Speaker 1: Pushkin.
Speaker 2: This is Talk Easy. I'm Stan Fragoso. Welcome to the show.
Speaker 2: Today we are joined by writer and podcaster Michael Lewis.
Speaker 2: He's the host of Against the Rules and the author
Speaker 2: of several best selling books, including Liars, Poker, Moneyball, and
Speaker 2: The Big Short. His latest is called Going Infinite, The
Speaker 2: Rise and Fall of a New Time. The tycoon in
Speaker 2: question is Sam Bankman Freed, the FTX crypto mogul, who
Speaker 2: was once listed by Forbes as the richest person in
Speaker 2: the world under thirty. That was until the cryptocurrency exchange
Speaker 2: collapse last fall, when several billions from customers and investors
Speaker 2: were lent to Alameda Research, a cryptocurrency trading firm co
Speaker 2: founded by Bankman Freed. Sam now stands trial in a
Speaker 2: Manhattan federal court where he's been accused of orchestrating a
Speaker 2: scheme to siphon money from FTX into various political contributions,
Speaker 2: real estate purchases, charitable donations, and venture investments. He currently
Speaker 2: faces seven criminal counts, including wire fraud, conspiracy, and money laundering.
Speaker 2: But at each twist and turn in Sam's improbable story,
Speaker 2: there's only one person that really had a front row
Speaker 2: seat to the action Michael Lewis. Since the publication of
Speaker 2: Going Infinite in early October, the book has received a
Speaker 2: wide array of reviews. The Guardian, for one, marveled at
Speaker 2: Lewis's ability to quote, pace, structure, and humanize a story
Speaker 2: about something as dense and unfriendly as crypto. However, as
Speaker 2: Michael and I discussed at the top, others have been
Speaker 2: less charitable, including The New York Times, The Washington Post
Speaker 2: and The Atlantic, each of which have suggested in one
Speaker 2: way or another that Lewis grew too close to his
Speaker 2: subject that he failed to demonstrate quote a healthy helping
Speaker 2: of skepticism, as one Calmness wrote. But in my view,
Speaker 2: the book, much like the subject at its center, is
Speaker 2: a bit more complicated than those descriptions, and so this
Speaker 2: week I wanted to sit with Lewis to discuss the
Speaker 2: thornier elements of Going Infinite, along with the whirlwind press
Speaker 2: tour he's been on as bankman Freed remains on trial.
Speaker 2: We also discuss Sam's belief in effective altruism and all
Speaker 2: the ways in which he planned to use his money
Speaker 2: for the greater good. And then, finally, in the last act,
Speaker 2: Michael reflects on his own journalistic philosophies and how he
Speaker 2: managed to write this book in the aftermath of great
Speaker 2: personal tragedy. That's all coming up next with our guest
Speaker 2: and fellow Pushkin podcaster Michael Lewis.
Speaker 1: I hope you're intruct.
Speaker 2: Michael Lewis, Welcome back to the show.
Speaker 3: Sam's good to see you.
Speaker 2: How are you feeling anything interesting happening in your life?
Speaker 3: Well? Yes, as a matter of fact, I'm having an
Speaker 3: experience I've had versions of before where book comes out
Speaker 3: and it just kind of goes nuts. It upsets some people.
Speaker 2: A lot of people.
Speaker 3: Yeah, very angry. Yeah, a lot of people very angry.
Speaker 2: Why are they so mad at you?
Speaker 3: So let me just back up a little bit. I've
Speaker 3: had people angry with me before. The first I don't know,
Speaker 3: six weeks of Moneyball was miserable, and it was miserable
Speaker 3: because the people are right out of the gate, were
Speaker 3: people who were wedded to the old way of doing things,
Speaker 3: and it was an insult to the old way of
Speaker 3: doing things.
Speaker 2: And as a Cubs fan, I was insulted.
Speaker 3: Yeah, people were insulted. I'm trying to get my mind
Speaker 3: around the anger this time because it's a little it's
Speaker 3: a little less clear. It's not universal, highly concentrated in
Speaker 3: the United States, which is a little odd because you know,
Speaker 3: the book is about Sam Bekman freedom FTX, and the
Speaker 3: vast majority of the losses are outside of the United States.
Speaker 3: The people who you would think would be angry because
Speaker 3: they lost money are in Turkey, in China and India,
Speaker 3: and the outrage is here. I mean even so, I
Speaker 3: just came back from touring in Ireland. In England and
Speaker 3: the feeling near there is curiosity and a desire to understand.
Speaker 2: Well, those are the guiding principles of this podcast. Yes,
Speaker 2: we're the last interview you're doing on your press tour,
Speaker 2: which I know you have not been overjoyed to do,
Speaker 2: in part because the subject of your book is currently
Speaker 2: on trial and has just announced that he will be
Speaker 2: testifying later this week. Sam Bankman Fried is the founder
Speaker 2: of FTX, the cryptocurrency exchange. He plans to defend himself
Speaker 2: against claims that he orchestrated a sweeping scheme to steal
Speaker 2: as much as ten billion dollars in deposits from fts customers.
Speaker 2: He's pleaded not guilty to seven charges of fraud, conspiracy,
Speaker 2: and money laundering. If convicted, he would face what amounts
Speaker 2: to a life sentence. Now, you spent the better part
Speaker 2: of the last two years with Sam and his colleagues
Speaker 2: and his family, first as a fly on the wall,
Speaker 2: then as a kind of sounding board before we dive in.
Speaker 2: Are you surprised that Sam has elected to testify? And
Speaker 2: more importantly, do you think it's a good idea?
Speaker 3: Not surprised, because he's been adamant all along, and then
Speaker 3: he would do.
Speaker 2: It if he got the medication required, If.
Speaker 3: He got the medication required for ADHD right, And he's
Speaker 3: been adamant all along about his feeling of his own innocence,
Speaker 3: has maintained all along the gap between his perception of
Speaker 3: this event and the prosecutor's perception. So there was never
Speaker 3: like there was never in the air ideal. It was never, oh,
Speaker 3: let's talk to them about maybe five years in jail.
Speaker 3: It was I think I'm innocent, and they think I
Speaker 3: should go to jail for life. So I knew that
Speaker 3: he wanted to tell his story from the witness stand.
Speaker 3: Is it a good idea? Every lawyer in the world
Speaker 3: would tell you no.
Speaker 2: And it's including maybe his own father possibly who's an attorney.
Speaker 3: The parents long ago learned that anything they try to
Speaker 3: tell him backfires, so that they wouldn't be so unwise
Speaker 3: as to give their advice because he just does the opposite.
Speaker 3: And the reason why it's a bad idea is interesting.
Speaker 3: It isn't that like he can make it worse, because
Speaker 3: it's already as bad as it really as he can get.
Speaker 3: I mean, every lawyer in the world will also tell
Speaker 3: you that the jury is likely to convict, so you
Speaker 3: kind of think, well, why not. It's kind of a
Speaker 3: hail Mary. But if the judge takes offense at his testimony,
Speaker 3: if the judge thinks he purchases himself in the court
Speaker 3: in his courtroom, the judge has a great latitude as
Speaker 3: the sentencing, and the judge might just layer on some
Speaker 3: more years because of whatever Sam says on the stand.
Speaker 3: And I know he's been told that, so he's running
Speaker 3: that risk. And I have no idea. I haven't had
Speaker 3: any contact with him since he was put in jail,
Speaker 3: so I don't know what he's going to say.
Speaker 2: Have you tried to have contact with him.
Speaker 3: I floated the idea of going in to visit. I
Speaker 3: had a few more questions. I wanted to put to him,
Speaker 3: and everybody agreed it was a bad idea for him
Speaker 3: to let me in because the prosecutors were already agitated
Speaker 3: about my presence in his life.
Speaker 2: Now you've said that the prosecution has one story, the
Speaker 2: defense has another story, which we're about to hear, which
Speaker 2: we're about to hear for the first time. You've said
Speaker 2: that you have the best story. Why do you think
Speaker 2: that is?
Speaker 3: Because I had context for it all, Because I interviewed
Speaker 3: all these people when things were good up until November
Speaker 3: of last year. Everyone in the world wanted to be
Speaker 3: aligned with Sam Begman freed. After November, everybody wanted to
Speaker 3: The last thing they wanted was to have anything to
Speaker 3: do with him or be aligned in any way. And
Speaker 3: so I saw that. I saw both. I saw the
Speaker 3: states of mind of the participants, which have now been
Speaker 3: I think a little distorted on the witness stand and
Speaker 3: distorted by social pressure. So I had just had a
Speaker 3: text for it all. Also, there's all kinds of stuff
Speaker 3: that isn't admissible in a courtroom. It would be important
Speaker 3: for someone who's just curious about what happened, but that
Speaker 3: is irrelevant to the legal proceedings. A couple of examples
Speaker 3: the whole effective altruism angle, like what these people lived
Speaker 3: in eight and breathes for and they really did all
Speaker 3: of them. That's not come up in the courtroom. You
Speaker 3: kind of need to know that, you know, the kind
Speaker 3: of the spirit in the air and the weirdness of
Speaker 3: the whole thing. Another example the fact that it's looking
Speaker 3: increasingly like all the customers are going to get their
Speaker 3: money back. The bankruptcy people have said that they're eight
Speaker 3: point six billion dollars in customer deposits that are missing,
Speaker 3: that they found seven point three and they're sitting on
Speaker 3: at least one one private investment that seems to be
Speaker 3: worth several billion dollars. That's not admissible in the courtroom.
Speaker 3: It's sort of like when you tell someone over dinner that, oh,
Speaker 3: by the way, there's likely to be close to full recovery.
Speaker 3: Their jaws are on the floor. What do you mean,
Speaker 3: I thought he stole all the money? Well, he put
Speaker 3: the money in the wrong place and used it for
Speaker 3: his own purposes when he should have and he put
Speaker 3: people at risk that he shouldn't have put at risk,
Speaker 3: which is a crime, which is all of course. So
Speaker 3: it's like the courtroom has a very narrow purpose, and
Speaker 3: my purpose is just much broader.
Speaker 2: If we had had dinner in October of twenty twenty two,
Speaker 2: at that point, FDx had ten million account holders, to
Speaker 2: whom it owed eight point seven billion dollars. It had
Speaker 2: generated a billion dollars in twenty twenty one, it was
Speaker 2: likely to do the same in twenty twenty two, even
Speaker 2: despite crypto prices crashing. It was on the surface a
Speaker 2: booming business, with venture capitalists suggesting that Sam could be
Speaker 2: the first trillionaire. So if we were to have that dinner,
Speaker 2: how would you explain the book you were writing at
Speaker 2: the time.
Speaker 3: It's funny you asked this question because I had that
Speaker 3: dinner at the very beginning of November with a friend
Speaker 3: who was a film director. It wasn't a dinner, it
Speaker 3: was a cup coffee. But I really like his storytelling,
Speaker 3: Chops like, I really kind of He's a good sounding board.
Speaker 3: And the point of the conversation was, I don't know
Speaker 3: if I have a book, and so I've been sitting
Speaker 3: with this guy for a year. Let me just tell
Speaker 3: you this material, and let me tell you why I
Speaker 3: haven't decided whether I'm going to write it. Or not,
Speaker 3: and I sort of laid out what I knew about
Speaker 3: Sam Bankman Freed. I laid out it was effectively the
Speaker 3: first six chapters of the book.
Speaker 2: So how did you do that?
Speaker 3: In conversation, I said, here's this character, born without a
Speaker 3: full complement of human feeling, born without empathy, born without
Speaker 3: ability to feel pleasure, who lives a completely isolated childhood,
Speaker 3: isolated beyond belief, given that he's being raised by two
Speaker 3: Stanford law professors on the Stanford campus who were quite
Speaker 3: social people themselves and had a brother, and had a
Speaker 3: brother who regarded him as a tenant in the house
Speaker 3: because he didn't have anything to do with each other.
Speaker 3: This person sort of compensates for what he lacks by
Speaker 3: taking what he can do and imposing it on the world.
Speaker 3: What he can do is math calculations. He can think quantitatively, analytically,
Speaker 3: and so he kind of turns life into this math
Speaker 3: problem and would seem to not fit anywhere in the
Speaker 3: world until he collides with Wall Street Wall Street and
Speaker 3: its modern incarnation, high frequency trading, And when he collides
Speaker 3: with that, he finds what he thinks is special about himself.
Speaker 3: It's a particular kind of problem solving. It isn't exactly math.
Speaker 3: It's making decisions, aren't calculations in semi chaotic environments, environments
Speaker 3: where there isn't you can't get to a right answer.
Speaker 3: You can just get to a better answer. It's not
Speaker 3: playing chess. It's playing chess on a clock where you
Speaker 3: have to make a move every five seconds and the
Speaker 3: rules change, like the rules change every five minutes, so
Speaker 3: the pieces the queen's become pawns or whatever. So you're
Speaker 3: dealing with this kind of chaotic environment. But where it
Speaker 3: does help to have a quantitative, analytical kind of aptitude,
Speaker 3: and it happens to be Those are the kind of
Speaker 3: tests they put him through. His Jane Street is his
Speaker 3: high frequency trading for him in order to before they
Speaker 3: hire him, and he's exceptional at it, and this defines him.
Speaker 3: And what I'm telling the film Rector is I'm so
Speaker 3: interested in this character because he goes from being having
Speaker 3: no place in the world to sitting at the center
Speaker 3: of the world. He goes from being nobody to being,
Speaker 3: you know, the richest person in the world under thirty
Speaker 3: and he's an octopus with his tentacles everywhere.
Speaker 2: At that point, what did the center look like.
Speaker 3: The center is bizarre because of where he is is
Speaker 3: the Bahamas. He's in a jungle hut you know that
Speaker 3: with and in a fancy condominium that he sleeps in.
Speaker 3: But the office is this nondescript hout in the middle
Speaker 3: of the jungle in the southern part of the main
Speaker 3: island of the Bahamas. But what does it look like?
Speaker 3: It looks like the fanciest, most celebrity drenched dinner party
Speaker 3: you've ever been to. You name the famous person in
Speaker 3: there there and the person who you don't recognize, Sam
Speaker 3: Bankman Freed in shorts and a T shirt and droopy
Speaker 3: white sox with his hair all over the place is
Speaker 3: the center of attention. Everybody's around, hanging on every word,
Speaker 3: and he's just starting to have in luance every which way.
Speaker 3: And so the question is like, what is this telling
Speaker 3: us about the world? That was always what interested me
Speaker 3: about him. So I'm telling the film director this story.
Speaker 3: It takes me an hour to get through it, and
Speaker 3: he says, this is interesting. He says, you have a
Speaker 3: problem that this story does not have a third act.
Speaker 3: You don't know where it's going, so you don't have
Speaker 3: an ending. So it's not a movie, he said. He said,
Speaker 3: but you're a good enough writer. You can fool the
Speaker 3: reader into thinking you have an ending, and you probably
Speaker 3: it's also interesting. You should probably just write it. Three
Speaker 3: days later, FTX falls apart and he writes and says,
Speaker 3: can I direct the movie? It's like, this is incredible.
Speaker 2: You mentioned in court that they have not brought in
Speaker 2: effective altruism, which is sort of his entire mode of
Speaker 2: operation is based on. That. Is that what initially brought
Speaker 2: you into the story, that made you interested in him.
Speaker 3: It was one of the things that made me interested
Speaker 3: in him. I had this long standing curiosity about effective altruism.
Speaker 3: I didn't know the name, but back in I would
Speaker 3: it had been. It had been about the time Sam
Speaker 3: was starting on Wall Street twenty twelve, thirteen fourteen. I
Speaker 3: started to hear from friends about this guy they'd hired.
Speaker 3: It wasn't Sam, some other person who had come to
Speaker 3: work at some Wall Street firm, not because he wanted
Speaker 3: to get rich, or rather not because he wanted to
Speaker 3: get rich for himself, because he wanted to make money
Speaker 3: to give it all away. And I thought it was
Speaker 3: such a seditious idea when I first heard it, and
Speaker 3: kind of a fun idea. I thought this like might
Speaker 3: be the one thing that could sink Wall Street is
Speaker 3: that everybody there was actually there just to give the
Speaker 3: money away. So I had taken a slight interest in
Speaker 3: it long ago without knowing what it was, and that
Speaker 3: when I finally meet this dude who actually has done
Speaker 3: this in such a big way, it's one of the
Speaker 3: things that interests me.
Speaker 2: So you two go on a hike that first meeting.
Speaker 3: A walk, A walk, a two hour walk, A two
Speaker 3: hour walk.
Speaker 2: Yeah, we don't want to overemphasize his athletic prowess, yes
Speaker 2: or mine? You used to play baseball? Come on, come on,
Speaker 2: so tell me when you replay that converse now, can
Speaker 2: you still recall what exactly pushed you over the edge
Speaker 2: to say I need to spend the next couple of
Speaker 2: years of my life with him.
Speaker 3: I didn't say I need to spend the next couple
Speaker 3: of years of my life with him. I said to
Speaker 3: him at the end of two hours, this is so strange.
Speaker 3: Can I just come watch? I just want to be
Speaker 3: an observer in your life for a while and see
Speaker 3: what there is to do here, and the things that
Speaker 3: struck me as strange or interesting won the sums of
Speaker 3: money Forbes was either had just we was about to
Speaker 3: declare him worth twenty two and a half billion dollars.
Speaker 3: He was a child of two liberal law professors at Stanford. Clearly,
Speaker 3: in most other moments in human history, he would have
Speaker 3: been at best like a physics professor. He wasn't interested
Speaker 3: in money the way Wall Street people normally are, so
Speaker 3: that it was a different vibe about the money. It
Speaker 3: was like more ambitious in what I'm going to use
Speaker 3: it to do. The fact, he was quite open about
Speaker 3: how he was meddling in politics. He was The newspapers
Speaker 3: had him as Biden's second biggest donor. He said, no,
Speaker 3: I'm actually only the seventh. But still it's going to
Speaker 3: get very big. He was talking about a billion dollars
Speaker 3: into the next presidential election site. I thought, that's just wild.
Speaker 3: He said something that was really interesting to me. He said,
Speaker 3: there's not enough money in politics, and I thought, I
Speaker 3: have always had the opposite view, and I thought, but
Speaker 3: his point was, when you see what the stakes are,
Speaker 3: and you see that the rules have changed to allow
Speaker 3: rich people to do basically whatever they want to do,
Speaker 3: it's amazing that rich people aren't doing even more that
Speaker 3: that was a very interesting kind of take on the
Speaker 3: whole thing, and if he was going to follow through
Speaker 3: on this, he was going to be a big deal
Speaker 3: in the elections. But by that point, the crypto markets
Speaker 3: had gone from being worth you know, cryptos as a
Speaker 3: as an asset class, gone from being worth zero in
Speaker 3: two thousand and eight to two trillion dollars, and I
Speaker 3: had taken I was thinking, I wonder what the social
Speaker 3: consequences of that kind of instant wealth creation is. Like,
Speaker 3: You've got people walking around two trillion dollars in their
Speaker 3: pocket who didn't have anything before, and here was this
Speaker 3: walking example of it that crypto had yielded it for
Speaker 3: him in a matter of eighteen months, twenty two billion dollars.
Speaker 3: I was kind of thinking, like, maybe he's a way
Speaker 3: to get it that, like the social consequences, So I
Speaker 3: just went and loitered for a year.
Speaker 2: So as you're loitering, he begins to explain that this
Speaker 2: effect of altruism, in part comes from Will mccaskell. This
Speaker 2: earn to give philosophy should you do good or make
Speaker 2: money and pay other people to do good? That anyone
Speaker 2: basically with the ability to go to wall Street has
Speaker 2: something like a moral obligation to do so. But when
Speaker 2: it comes to Sam, he described himself in one exchange
Speaker 2: with a colleague as quote, not really having a soul.
Speaker 2: In the end, there's a pretty decent argument that my
Speaker 2: empathy is fake, my feelings are fake, my facial reactions
Speaker 2: are fake. You yourself said that he does not have the
Speaker 2: full complement of human feelings. He does not have empathy.
Speaker 2: So if everything in his life is fake, do you
Speaker 2: believe his interest and effective altruism.
Speaker 3: Is fake his reasons not fake? Isn't explain that, Well,
Speaker 3: he's not attracted to effective altruism because he's got an
Speaker 3: emotional attachment to other people. I mean, the mistake people
Speaker 3: make is, oh, you're an effective altress because you really
Speaker 3: cared deeply about other people, like individual other people.
Speaker 2: Saying he cares about mind.
Speaker 3: Cares about math and humanity is like that seemed abstractly
Speaker 3: to be something he should be servicing, and the math
Speaker 3: is this is the best way to do that. Peter
Speaker 3: Singer would be the oldest living sort of exponent of this.
Speaker 3: That you have the idea that you have. The Singer
Speaker 3: idea is that you have you have a duty not
Speaker 3: just to the people around you, but to people you
Speaker 3: don't even know. The argument is you have an obligation
Speaker 3: to give if sort of the cost to you is
Speaker 3: less than the benefit to others, it's a hard way
Speaker 3: to live.
Speaker 2: Did you buy that way of living?
Speaker 3: I admired the spirit of it. I admired the idea
Speaker 3: of expanding your circle of empathy or caring about people.
Speaker 3: To get someone to buy in that into that argument,
Speaker 3: don't go be a doctor in Africa, but instead go
Speaker 3: be a banker and pay to have ten doctors go
Speaker 3: to Africa. It really helps if they don't actually get
Speaker 3: any emotional benefit to physically helping other people, you know,
Speaker 3: there's no feeling there to start with, they just buy
Speaker 3: the argument. But once you're in this argument and the
Speaker 3: argument is about, and this is what these philosophers that
Speaker 3: are at Oxford eventually do. They morph the movement away
Speaker 3: from helping living people on the planet now to maximizing
Speaker 3: the lives you say, for all eternity. And so this
Speaker 3: is the real weirdness to the movement that Sam buys into,
Speaker 3: and that actually the movement buys into is when it
Speaker 3: flips to existential risk. And Sam, if you when I
Speaker 3: meet him. He's on the practical end of the spectrum
Speaker 3: of the people in this conversation because he's thinking, yeah,
Speaker 3: there's this list of risks. Let's asteroid strikes or climate
Speaker 3: change or AI for example, pandemic or pandemic prevention, and
Speaker 3: or Donald Trump's democracy or actually the actually Donald Trump
Speaker 3: is on his list. There is a kind of like
Speaker 3: ven diagram. It's the risks in one circle, but the
Speaker 3: tractability of them in another circle. Like some of these things,
Speaker 3: you don't know what to do about them. I mean,
Speaker 3: what do you give money to just to prevent AI
Speaker 3: from right now? It's very hard to know. But when
Speaker 3: we were on that walk, one of the things that
Speaker 3: did interest me was, I just come out of writing
Speaker 3: the Premonition, it was appalling to me the governments weren't
Speaker 3: being more aggressive on the subject of especially building a
Speaker 3: better a kind of better prediction, a model for disease.
Speaker 3: There is every reason why we should be building essentially
Speaker 3: a national weather service for disease. And the lack of
Speaker 3: real energy behind that movement, not that it doesn't exist,
Speaker 3: it's just sort of lack of energy was shocking to me.
Speaker 3: And it was really interesting to me that a private
Speaker 3: citizen was talking about generating the wealth he needed in
Speaker 3: order to do such a thing, So that partly interested
Speaker 3: me too.
Speaker 2: So if that describes like the principled approach to his work,
Speaker 2: I want people to understand how he views life probabilistically.
Speaker 2: And to do that, I thought we'd read from a
Speaker 2: chapter of your book entitled how to Think about Bob?
Speaker 3: Who do you want me to do it? You want
Speaker 3: to do it? You talk easier than I do, so
Speaker 3: you know, look, all right, that's funny you pick this
Speaker 3: passage because I think it's like an important passage.
Speaker 2: It is against the rules for me to read your book.
Speaker 3: Okay, do you.
Speaker 2: Want to set up any context for this or does it?
Speaker 3: So I'll do some content. I'll do a little context
Speaker 3: so that this is the this is the foreshadowing of
Speaker 3: the collapse that's going to happen. Four years later, Sam
Speaker 3: has just started a crypto trading hedge fund with nothing
Speaker 3: but a bunch of effective altrusts. Within two months, they're
Speaker 3: at each other's throats, and half the effect of altrus
Speaker 3: think Sam is either so catastrophically disorganized and chaotic or
Speaker 3: possibly criminal that they up and quit, and the immediate
Speaker 3: subject of conversation is some money that's been missing, just
Speaker 3: like not like stolen, but like lost, like you lost
Speaker 3: your keys.
Speaker 2: And this is not money lost at FTX.
Speaker 3: No, this is alimeter research before FTX.
Speaker 2: This is another project.
Speaker 3: This is back in twenty eighteen, and the money is
Speaker 3: in the form of a crypto tooken called ripple, and
Speaker 3: so I'll start with that. Sam is arguing, we don't
Speaker 3: need to worry about the ripple, it'll turn up. His
Speaker 3: colleagues are arguing, that's four million dollars of other people's
Speaker 3: money we should worry about it.
Speaker 2: Sounds awfully familiar to yes, the reframe we've been hearing lately.
Speaker 3: This is exactly right. The missing Ripple reminded him of
Speaker 3: a favorite thought experiment. You have a close friend, Bob,
Speaker 3: he explained, he being Sam. He's great, you love him.
Speaker 3: Bob is at a house party where someone gets murdered.
Speaker 3: No one knows who the murderer is. There are twenty
Speaker 3: people there. None are criminals. But Bob is less likely
Speaker 3: in your mind than anyone else to have killed someone.
Speaker 3: But you can't say that there's zero chance Bob killed someone.
Speaker 3: Someone got killed, no one knows who did it. You
Speaker 3: now think there's like a one percent chance Bob did it.
Speaker 3: How do you see Bob now? What is Bob to you?
Speaker 3: And there's no updating, there's no new information about Bob.
Speaker 3: One answer was that you should never go near Bob again.
Speaker 3: There might be a ninety nine percent chance that Bob
Speaker 3: is the saint you always thought him to be, but
Speaker 3: if you're wrong, you're dead. Treating Bob's character as a
Speaker 3: matter of probability felt problematic. Bob was either a cold
Speaker 3: blooded killer or he wasn't. Whatever probability you assigned before
Speaker 3: you found out the truth about Bob would appear after
Speaker 3: the fact unfair and even absurd. There doesn't exist a
Speaker 3: guess you can make that is overwhelmingly likely to be
Speaker 3: roughly correct, said Sam. Bob is either completely blameless or
Speaker 3: far more guilty, and yet assigning a probability to Bob's
Speaker 3: character was, in Sam's view, the only way to think
Speaker 3: about him, or indeed any uncertain situation. It's not good
Speaker 3: enough to say Bob's not the kind of guy I
Speaker 3: want to be around. So what is the probability at
Speaker 3: which you say, Okay, I'm going to just stay away
Speaker 3: from Bob. Until this was resolved, said Sam. It's sort
Speaker 3: of mind bending. There's no way to deal with Bob
Speaker 3: right now. That's just.
Speaker 2: The next line is my favorite, which I'll do okay.
Speaker 2: Life's uncertainties often made a mockery of a probabilistic approach,
Speaker 2: but in Sam's view, there was really no other approach
Speaker 2: to take. A lot of things are like Bob, said Sam.
Speaker 2: I thought that the ripple was like Bob would either
Speaker 2: get it back or not. I like how you were
Speaker 2: mouthing your own words as I was reading that.
Speaker 3: Sorry about that. Yeah, I laugh at my own jokes too,
Speaker 3: so I'm sorry about that. The punchline in this is
Speaker 3: that over the ripple, the ten effective altrus is quit
Speaker 3: and then they find the ripple, confirming in the minds
Speaker 3: of the other people who stayed behind, a group that
Speaker 3: includes the current witnesses in the trial and the shots
Speaker 3: seeing Caroline Ellison and Gary Wang, that Sam was kind
Speaker 3: of right all along.
Speaker 2: So he is redeemed in some way. But what do
Speaker 2: you think that story in terms of foreshadowing, What do
Speaker 2: you think that story tells us about his way of
Speaker 2: moving through the world, about his psychology that.
Speaker 3: He doesn't have firm principles. Everything is shifting odds.
Speaker 2: Which could be a problem when running a company. Yes,
Speaker 2: what you're saying is reminded me of a passage of
Speaker 2: a piece of writing that actually comes from Sam's mother, Barbara.
Speaker 2: She wrote an essay. We haven't really talked about Sam's
Speaker 2: parents much, but they both were Stanford law professors. By
Speaker 2: all accounts, upstanding, downful people, accomplished in their respective fields.
Speaker 2: But she wrote an essay in twenty twelve in The
Speaker 2: Boston Review titled Beyond Blame.
Speaker 1: Have you read this?
Speaker 3: I've heard it.
Speaker 2: I want to read a little bit from it. The
Speaker 2: piece is about the philosophy of personal responsibility and how
Speaker 2: it is ruined criminal justice and economic policy, and how
Speaker 2: it's time to move past blame, which is exactly, by
Speaker 2: the way, when I did something wrong as a child,
Speaker 2: that exactly how my mom would render how we should
Speaker 2: move forward, which I don't think we should really blame.
Speaker 2: My mom was also an attorney, so she writes in
Speaker 2: the piece, the reality is that we are all at
Speaker 2: best compromised agents, whether by biology, social circumstance, or brute luck. Tellingly,
Speaker 2: the more information people have about the context of the crime,
Speaker 2: the person who committed it and the circumstances he or
Speaker 2: she came from. The more nuanced are their views of
Speaker 2: moral responsibility.
Speaker 3: What do you think of that?
Speaker 2: What do you think of that?
Speaker 3: Now? What do you think of that?
Speaker 2: No, what do you think of that?
Speaker 3: Well? I think it's interesting that the second part of
Speaker 3: it is just a statement of fact. I think I
Speaker 3: think it is true that the more you know about
Speaker 3: the circumstances of any crime, the more you know about
Speaker 3: the person, the more complicated your response is to it.
Speaker 3: And that we also live in a society that isn't
Speaker 3: terribly interested in that, that we jail people at a
Speaker 3: rate that's unseen anywhere out in the world, right to punish.
Speaker 3: I think that's an interesting point of view, and I
Speaker 3: think I think she's that observation is not wrong. Is
Speaker 3: it a useful way to parent your child that, I
Speaker 3: don't know, like teaching them that you we're not gonna
Speaker 3: blame you for anything. I don't parent my child that way.
Speaker 2: I guess what I'm getting at. Early in this conversation,
Speaker 2: you said Sam's parents had long given up trying to
Speaker 2: teach him anything. It seems to me that maybe they
Speaker 2: didn't get a lot of things through but they seem
Speaker 2: to have crafted part of his guiding principles.
Speaker 3: So this is true. It's also interesting how he and
Speaker 3: his brother view this because he and his brother emerged
Speaker 3: from this household self conscious utilitarians consequentialists. You move through
Speaker 3: life evaluating your decisions, evaluating your actions, evaluating other people
Speaker 3: based on their consequences rather than their intent. And the
Speaker 3: principle you are gunning for is the greatest good for
Speaker 3: the greatest number. So when you see something like the
Speaker 3: famous trolley problem where you're on a trolley and the
Speaker 3: trolley's rolling down the track and it's about to roll
Speaker 3: over four people, but you can pull a switch and
Speaker 3: send it on a side rail that kills only one person,
Speaker 3: doesn't even occur to you not to pull the switch.
Speaker 3: They don't have a problem with that kind of thing.
Speaker 3: It's like you're evaluating actions based on their consequences. You
Speaker 3: were trying to maximize good and minimize bad. The brut
Speaker 3: but I was going to say, is that this isn't
Speaker 3: from Sam, this is from his brother. Because I pushed on,
Speaker 3: I pushed on both of them. I said, it is
Speaker 3: kind of amazing that you two both think you've come
Speaker 3: to your own principles all by yourself, but they happened
Speaker 3: to be kind of close to your parents' principles. They
Speaker 3: extended their parents' principles like their parents were not fond
Speaker 3: of effective altruism, very hostile to it in fact. But Gabe,
Speaker 3: Sam's brother, said, this looks like, oh, our parents influenced us,
Speaker 3: and surely they must have in some way, but in
Speaker 3: real time, it felt like we came to these ideas ourselves.
Speaker 3: So it's funny how they interpreted this. The point isn't
Speaker 3: that Sam wasn't influenced by his parents. The point was
Speaker 3: Sam resisted the eye idea that he was influenced by
Speaker 3: his parents at the same time he was influenced by
Speaker 3: his parents.
Speaker 2: Is that because he thinks anyone over the age of
Speaker 2: forty five is meaningless and useless.
Speaker 3: Yes. I think it's because he had vanity about his
Speaker 3: own mind, and part of the vanity was everything that
Speaker 3: happened into it in it was his doing. It was
Speaker 3: very hard to get him to point to influences. He
Speaker 3: sort of liked the idea that he was thinking everything
Speaker 3: up by himself. From first.
Speaker 2: Principles were bright back with writer Michael.
Speaker 1: Lewis Hey everyman.
Speaker 2: This is Sam. As you may have noticed, the past
Speaker 2: six months in Hollywood, they haven't been going that great.
Speaker 2: The actors and the writers went on strike against the AMPTP.
Speaker 2: The writers have recently reached deal, but the actors have
Speaker 2: yet to do so. Obviously, for a show like ours
Speaker 2: that has on writers, actors, filmmakers, this has proven to
Speaker 2: be a challenging time. I'll just be honest with you.
Speaker 2: It's been difficult to make a show about culture when
Speaker 2: culture has basically been put on pause for the most part,
Speaker 2: and yet myself, along with our incredible, incredible team, have
Speaker 2: continued to make new episodes just about every Sunday. We've
Speaker 2: done this with authors like Zadi Smith and WashU, musicians
Speaker 2: like Leave and Ludwig Gorenson, who created the score for Oppenheimer.
Speaker 2: We had on st Higham, We had on reporters like
Speaker 2: Sam Sanders and Matt Bellanie. We did an episode about
Speaker 2: the border with Beto O'Rourke and my father. We had
Speaker 2: a conversation with screenwriter Alex O'Keefe at the height of
Speaker 2: the strike about the conditions of being a modern screenwriter,
Speaker 2: the state of Hollywood, and really so much more. Through
Speaker 2: this turbulent, precarious time, we have continued to find stories
Speaker 2: that I think are worth telling and worth sharing with you.
Speaker 2: And so if any of those episodes, or if any
Speaker 2: of the episodes that I did not mention, have meant
Speaker 2: something to you, if the show has meant something to you,
Speaker 2: I would really appreciate if you shared the program on
Speaker 2: social media or with a friend, with a family member,
Speaker 2: anyone that you'd think would be interested in the kind
Speaker 2: of researched, thoughtful and honest conversations that we try to
Speaker 2: have here each in every Sunday. You can share and
Speaker 2: tag us at talk easypod across social media. If you
Speaker 2: want to drop us a line, you can reach me
Speaker 2: at SF at talk easypod dot com. That's SF at
Speaker 2: talk easypod dot com. This year, we'll be starting our newsletter,
Speaker 2: which we are very excited to do and put out,
Speaker 2: but until then, sharing the show or reviewing it on
Speaker 2: the platform that you're listening to this right now. I
Speaker 2: know every podcaster talks about it, but it really does
Speaker 2: help us continue doing the work we so love to
Speaker 2: do here each and every week. And with that, I
Speaker 2: hope you enjoy the rest of this conversation with Michael
Speaker 2: Lewis coming back. Why don't we talk about some of
Speaker 2: his doing? Because from November two to November twelfth of
Speaker 2: twenty twenty two, FTX goes from having seemingly limitless potential
Speaker 2: to being on its last legs, being bankrupt. I was
Speaker 2: being generous. Now that we're are a year removed from
Speaker 2: that ten day catastrophe, how do you understand what happened?
Speaker 3: So this is my best guest. I mean this is
Speaker 3: also taking some stuff that came up in the trial.
Speaker 3: You start with a person who is vain about his
Speaker 3: risk management abilities, thinks he's maybe like God's gift to
Speaker 3: managing financial risk. You couple it with a character who
Speaker 3: has almost psychological need for a chaotic environment. So I
Speaker 3: think in the very beginning they create FTX, they don't
Speaker 3: do the first thing you would do is segregate the
Speaker 3: customer's funds from your funds. They didn't do this in
Speaker 3: the original hedge fund all. But I'll jumble together with
Speaker 3: Sam's money with the investors' money. So you haven't you
Speaker 3: already have a problem right from the beginning. That's real
Speaker 3: clear that like the customer's money is available to out
Speaker 3: Talameda if it wants to use it. Flash forward to
Speaker 3: June of twenty twenty two. I think in May of
Speaker 3: twenty twenty two. Certainly, in like April twenty twenty two,
Speaker 3: if all the customers of FTX had showed up and
Speaker 3: said we want our dollars and bitcoin and whatever back,
Speaker 3: I think they would have gotten them back. There was
Speaker 3: the money was there. The prosecutor seemed to not be
Speaker 3: pushing this point, but a combination of crypto collapsing and
Speaker 3: crypto lenders who lent money to Alameda asking for their
Speaker 3: loans back caused Sam with Caroline to make a decision
Speaker 3: to pay lenders back their money and use the depositors'
Speaker 3: money in their place. That seems to be what happened.
Speaker 3: That's what Caroline says happened. Do you believe that, Yes,
Speaker 3: we know they did that. The question is how involved
Speaker 3: he was, how where he was of what that implied
Speaker 3: for the deposits, and how much risk he was putting
Speaker 3: the customers at all that, how much money he thought
Speaker 3: was inside of Alameda. There are questions about that, but
Speaker 3: the fact is they did that, which was a weird
Speaker 3: decision because the wealth, all their wealth was tied up
Speaker 3: at FTX. If they had just said to the lenders, sorry, Ristiff,
Speaker 3: and you and al if you want to, if you
Speaker 3: want to, you want to force the issue, Alimta will
Speaker 3: go bankrupt. They'd just still had their crypto exchange. It
Speaker 3: would have taken a blow, but it would have survived.
Speaker 3: You know, all of Sam's you know, all the twenty
Speaker 3: two billion is his stake. All of Caroline's wealth is
Speaker 3: a stake in FTX. So it was a really strange decision.
Speaker 3: So we're going to dep intot why they might have
Speaker 3: made that decision. Even though it's so strange. He's tied
Speaker 3: up with Sam's vanity about how he's perceived as a
Speaker 3: risk manager. That if he's seen as, oh, he's not
Speaker 3: the idiot who blew up a hedge fund, he couldn't
Speaker 3: stand that narrative. So then what happens from June to November.
Speaker 3: This is where it gets messy. I like that.
Speaker 2: You think this is where it gets messed Well, this is.
Speaker 3: Where it gets really messy into sort of trying to
Speaker 3: recreate what happened, right, Caroline would say, did say that
Speaker 3: from that moment on she lived in this state of
Speaker 3: existential dread until finally the depositors asked for their money back,
Speaker 3: and they're exposed and the whole thing collapses. Nashad, who
Speaker 3: is also a party to this. Dashad Singh, who was
Speaker 3: sort of number two or number three at FTX, says
Speaker 3: he doesn't even didn't even realize there was a hole
Speaker 3: in Alameda until September.
Speaker 2: An eight point seven billion dollar hole.
Speaker 3: Maybe bigger than that, but in the end, right now
Speaker 3: it's an eight point six billion dollar hole. But there
Speaker 3: were supposed to be the gross numbers were They were
Speaker 3: supposed to be sixteen billion dollars of customer deposits on FTX,
Speaker 3: and they weren't there. They were all over the place.
Speaker 3: Some were there, but most were like all over the
Speaker 3: place where it gets weird to be And like, what
Speaker 3: hasn't been explained in the trial is if Caroline is
Speaker 3: in this state of existential dread for five months, why
Speaker 3: when it blows up, does she not know where the
Speaker 3: money is that they have. This is a bizarre thing.
Speaker 3: So the couple of days it's all blowing up. Other people,
Speaker 3: not sam Other people who are in the room are
Speaker 3: struck by banks calling them up and saying, hey, do
Speaker 3: you know that we have three hundred million dollars a
Speaker 3: year of your dollars? Do you want it back? And
Speaker 3: they don't know that they a bank has the dollars.
Speaker 1: Yeah.
Speaker 3: And John Ray, the bankruptcy guy who's been running it,
Speaker 3: has said the same thing to me. He said, this
Speaker 3: has been like an easter egg hunt. There's money all
Speaker 3: over the place. There's money and in crypto exchanges in
Speaker 3: age are their money in banks that they didn't have
Speaker 3: records of. If you are terrified in June of not
Speaker 3: having the money to pay customers back, wouldn't you actually
Speaker 3: gather up all this money or at least have a
Speaker 3: list of where it was. It's hard to explain why
Speaker 3: they made no effort until it all blows up to
Speaker 3: a sort of account for what they had and what
Speaker 3: they didn't have. It's messy what's going on from June
Speaker 3: to November, because they don't do the things you would
Speaker 3: think you would do if you were panicked or worried.
Speaker 3: They Also the other thing's odd is in that period
Speaker 3: you would think if they're all that worried about this,
Speaker 3: they would stop spending money, and they don't stop spending money,
Speaker 3: and they don't raise money, and makes me wonder just
Speaker 3: how worried she was?
Speaker 2: You spent the good part of Sam's house rest with him?
Speaker 2: Is that right.
Speaker 3: I didn't go live at his house, but I saw
Speaker 3: I was able to id ahol passed.
Speaker 2: They didn't like pullot a cop for you or something
Speaker 2: like that.
Speaker 3: I didn't plot a cot, but they did. And when
Speaker 3: you went, you had to notify the authorities and they
Speaker 3: met you outside the door and they took away your
Speaker 3: cell phone. But I went. Every other week I go
Speaker 3: down and spend six or seven hours with him.
Speaker 2: So obviously you're asking him questions like how did this happen?
Speaker 2: Where do you think the money is. You've said recently
Speaker 2: in a Time magazine interview that Sam is not a
Speaker 2: serial liar, but that he is a serial withholder. Yes,
Speaker 2: explain the difference.
Speaker 3: If I'm talking to you, I say, Sam, where were
Speaker 3: you born? And you say, ah, I was born in Nashville, Tennessee,
Speaker 3: but actually you were born in Portland, Oregon. That's one
Speaker 3: kind of thing if I say Sam, where you were born,
Speaker 3: and you kind of change the subject and I never
Speaker 3: get to the answer of why you where you were born?
Speaker 3: He's very good. He was very good at that. There's
Speaker 3: a footnote in the book and the you know it's
Speaker 3: in the text of the book, but it's that try
Speaker 3: to deliver the reader an example of just this thing
Speaker 3: he does. I asked him, all right, one of the
Speaker 3: mechanisms for the money getting from FTX into Alameda, from
Speaker 3: this exchange into your private edge fund, was that Alameda
Speaker 3: alone didn't have its risks managed by FTX, the risk
Speaker 3: engine that stopped other people from losing money on FTX,
Speaker 3: which switched off for Alameda. If I had asked you
Speaker 3: directly back in the day before things went bad, is
Speaker 3: Alameda subjected to the risk engine? What would you have said?
Speaker 3: And he says, I would have either made a word salad,
Speaker 3: or I would have answered a different question. That's him
Speaker 3: being weirdly honest about being weirdly dishonest if you asked
Speaker 3: him the right question, and this happened to him before,
Speaker 3: when things were good, people would ask him questions and
Speaker 3: he'd get himself in trouble because if the question was
Speaker 3: exactly right, he tended to answer it. It was almost
Speaker 3: a mechanical kind of thing. But if you asked him, oh,
Speaker 3: I don't know, do you have conflicts of interest between
Speaker 3: Alameda and FTX, he would answer a question about how
Speaker 3: the kind of conflicts of interest that exist on US
Speaker 3: stock exchanges between the stock exchanges and high frequency traders,
Speaker 3: kind of thing you would answer a slightly different question.
Speaker 2: Do you think you asked them in retrospect the wrong
Speaker 2: set of questions?
Speaker 3: No, I mean he gave me answers like the one
Speaker 3: he gave me about how I wouldn't have given you
Speaker 3: the answer, So you know I got it. And and
Speaker 3: in the book, you know I was really careful to
Speaker 3: keep myself out of the inquisition of Sam Bankman Freed.
Speaker 3: I let other people do it, and in particular did
Speaker 3: it is his chief operating officer. And I think she
Speaker 3: asked all the right questions too, she just didn't get
Speaker 3: the answers she got. I thought we had more money.
Speaker 1: Uh huh.
Speaker 3: That's a state of mind thing. It's kind of hard
Speaker 3: to the point, isn't that it's true. The point is
Speaker 3: it's hard to falsify.
Speaker 2: And the book you described Zame Packet. He was a
Speaker 2: colleague of Sam's, right though.
Speaker 3: He was kind of the original crypto great there who'd
Speaker 3: been in the crypto markets for a long time and
Speaker 3: who was kind of the face of FTX to old
Speaker 3: crypto people.
Speaker 2: Well, in the book. You said that he doesn't care
Speaker 2: much about why Sam Dibbity did, but how he asked
Speaker 2: why had neither he nor anyone else he knew seen
Speaker 2: this coming? And I think this is a question that
Speaker 2: through this book tour of yours, you have been asked
Speaker 2: repeatedly you spent all this time with him? You are,
Speaker 2: of course, Michael lewis known for shrewd observations. Humanistic portraits
Speaker 2: generally have a good sense of people and why they
Speaker 2: do things. Did you really not see any of it coming?
Speaker 2: Or was it more advantageous for a potential book to
Speaker 2: not see it coming?
Speaker 3: It's certainly the latter is certainly true, but I'm not
Speaker 3: sure it's an either or a question. It's completely true
Speaker 3: that just watching and not kind of udge them too
Speaker 3: strongly was very helpful to generating the literary material for
Speaker 3: a book. That's true. But let me just point out
Speaker 3: that one hundred and twenty of the world's leading venture
Speaker 3: capitalists gave him money. I didn't give him money.
Speaker 2: Didn't you put two thousand dollars in ftxus only.
Speaker 3: To see if it were and actually put most of
Speaker 3: it in Swiss francs.
Speaker 2: But those venture capitalists did not write Moneyball or the
Speaker 2: Big Short or liars Pope there I interview Obama, so gone.
Speaker 3: The whole place was so chaotic, so comically chaotic, that
Speaker 3: the absence of lists of employees, the absence of an
Speaker 3: organization chart, no titles matched what the person was doing,
Speaker 3: just and all the people unhappy because Sam wouldn't manage anybody,
Speaker 3: because he didn't believe in managing anybody, because he thought
Speaker 3: everybody should just manage themselves. All that stuff. So it
Speaker 3: was bound to lead to something. It was a very
Speaker 3: volatile situation, something bad, probably bad. But the actual thing
Speaker 3: that happened did not make a lot of sense. It
Speaker 3: did not, like make a lot of sense for them
Speaker 3: to put this goal mine. They had FTX in peril
Speaker 3: for the sake of Sam's vanity trading fund, and leave
Speaker 3: Sam out of it for a minute. The other principles.
Speaker 3: If you said, oh, is the FTX depositors' money inside
Speaker 3: of Alamede instead a thing nobody said. By the way,
Speaker 3: zero people said that, I would have said, nobody would
Speaker 3: allow that. Nishad and Gary and Carolyn, they just wouldn't
Speaker 3: let that happen because all their wealth is tied up
Speaker 3: with FTX. They just wouldn't let it happen. It was
Speaker 3: such an idiot crime to do that, to set up
Speaker 3: the place in the first place, so that the money
Speaker 3: that's supposed to be an FTX is actually in Alameda.
Speaker 3: I did not see that coming. I did think something
Speaker 3: was going to happen that was going to give me
Speaker 3: the ending to the book.
Speaker 2: It all came tumbling down between November two and November twelfth.
Speaker 2: As I said, you did not get back down to
Speaker 2: the Bahamas until November ninth. Right at what point in
Speaker 2: that week did you realize you had a third act?
Speaker 3: Immediately? I had childcare reasons. While I couldn't get down
Speaker 3: to the Bahamas on November the third or fourth, but
Speaker 3: I should have. But I got down there entire the
Speaker 3: day he signed the bankruptcy papers.
Speaker 2: Can you set that same for us?
Speaker 3: It was wild. The whole book is wild, like the
Speaker 3: whole stories wild. But this was the Friday of the
Speaker 3: disastrous week. Virtually all the employees have already fled, fled
Speaker 3: so fast that they've left all their possessions in their condominiums.
Speaker 3: All the food is on the shelf, all their possessions
Speaker 3: at worker that's still at work. They've just run to
Speaker 3: the airport and basically run home to their parents' basements.
Speaker 3: And I get there still there is Natalie Tien, and
Speaker 3: Natalie was the important character of the book. She was
Speaker 3: Sam started out as Sam's scheduler and PR person. She
Speaker 3: ran PR for them. She knew she was the one
Speaker 3: person knew where Sam was at any given moment. So
Speaker 3: she picks me up at the airport in the Bahamas,
Speaker 3: and she has, at that point, for the first time
Speaker 3: since I've known her, no idea where Sam is. That
Speaker 3: she doesn't care anymore. She's like the whole place is
Speaker 3: blown up. She's furious with Sam. On the way there,
Speaker 3: I said, could we stop at the FTX offices because
Speaker 3: she passed them anyway. And she was really nervous about
Speaker 3: doing this because she had one of the last remaining
Speaker 3: FTX cars that had all been repossessed or dumped at
Speaker 3: the airport, and she was afraid someone was going to
Speaker 3: see her with it and they would take away her
Speaker 3: car and she wouldn't have anybody to get out. But
Speaker 3: I talked to her into going to the FTX offices.
Speaker 3: And it is these collection of huts in the jungle.
Speaker 3: There's no one at the guard booth. We drive around
Speaker 3: the guard booth, and in the distance is Sam walking
Speaker 3: circles around the office buildings, all by himself, and he's
Speaker 3: obviously not bathed or shaved in days. He's in an
Speaker 3: agitated state of mind. He sees us, walks over, gets
Speaker 3: in the car like we're an uber, and almost the
Speaker 3: first thing he says is, you know what's weird to
Speaker 3: think about Saturday? Saturday? Everything was normal, he said, about
Speaker 3: six days earlier, everything was normal, and now his empire
Speaker 3: lay in ruins. And from then I really just squatted
Speaker 3: as best I could in the Bahamas until he was extradited.
Speaker 2: When you saw Sam there in the parking lot, you
Speaker 2: said on sixty minutes that if I were a better person,
Speaker 2: I would have been deeply distressed by all of this.
Speaker 2: What do you mean by that? A better person?
Speaker 3: If I were chiefly worried about his suffering or the
Speaker 3: suffering of those around them, I would have gone there
Speaker 3: in my head it would have been like, oh, this
Speaker 3: is all so sad, and this does happen to me.
Speaker 3: It's just how I'm wired. I was just interested, like
Speaker 3: so interested, and I was also aware that this answers
Speaker 3: the question of where this story went and it made
Speaker 3: sense of an awful lot of what had come before,
Speaker 3: an awful lot like things that were kind of like
Speaker 3: pieces of the puzzle, and I couldn't figure out how
Speaker 3: they all fit together. They started to fit together, like
Speaker 3: the mini collapse that had happened back in twenty eighteen.
Speaker 3: It all sort of like resonated in a different way.
Speaker 3: So my mind is racing with the story. I didn't
Speaker 3: del chiefly worried about the people around me. I felt
Speaker 3: chiefly worried about my reader.
Speaker 2: And even as a father, what do you mean, even
Speaker 2: as a faulther, Well, you're a father, and I imagine
Speaker 2: you see a young kid whose life is falling apart,
Speaker 2: whose lives he's ruined, many many people's lives he's ruined.
Speaker 3: There was a little hard. It's still a little hard
Speaker 3: to know what's going to happen there. The people whose
Speaker 3: lives he ruined, or rather he caused a lot of damage.
Speaker 2: To, were colleagues.
Speaker 3: His colleagues, They all have their money on the exchange.
Speaker 3: Their reputations are in tatters. His parents, his parents, that's painful.
Speaker 3: His parents were painful for me.
Speaker 2: Why was that?
Speaker 3: Because I was watching parents lose a child and I
Speaker 3: had lost a child. You know, I know what that
Speaker 3: feel like. I mean, it's a different way to lose
Speaker 3: a child, but I know that that was something that
Speaker 3: that's still something that's hard for me is watching them
Speaker 3: process this event is a moment. It's not in the book.
Speaker 3: And maybe this is partly why I maybe maybe our
Speaker 3: partlet left it out because it was just it just
Speaker 3: it seemed like too raw for them. The day he
Speaker 3: was put in jail and the Bahamas and he was
Speaker 3: put in a prison, it's like, it's like it makes
Speaker 3: our prisons look pretty cush, it's like ranked the top
Speaker 3: ten worst prisons in the world. Or the day after
Speaker 3: they went to visit and I went with them. As
Speaker 3: we're getting in the car, his mother said to me,
Speaker 3: tell me something that will make me feel better. And
Speaker 3: I said. The first thing I said was, well, in
Speaker 3: a month, he's probably going to be home under house
Speaker 3: arrest in Stanford at your house. And she said, that
Speaker 3: doesn't make me feel better. She actually said try again,
Speaker 3: And I said, you will be amazed how adaptable you are.
Speaker 3: You'll be amazed how your mind can adjust to a
Speaker 3: situation that you find right now unimaginably painful. And she said,
Speaker 3: that makes me feel better now, So why do I
Speaker 3: mention this moment? I didn't think of that as material.
Speaker 3: I was actually connecting to them just as a person,
Speaker 3: as a human.
Speaker 2: Being, as a father who just lost their daughter.
Speaker 3: Right, And I was in a different emotional space than
Speaker 3: I am in almost all the time when I'm thinking
Speaker 3: about some piece of writing. There was like a famous
Speaker 3: Joan Didion moment line. It's probably apocryphal where and I
Speaker 3: can't remember even what book it was from. Someone asked
Speaker 3: her how she felt when she walked into a room
Speaker 3: and she saw a five year old girl with a
Speaker 3: cocaine in her hands, and it was acid. I was
Speaker 3: an acid. Heyne Ashbury, you know this then?
Speaker 2: Do you know what she said?
Speaker 3: You tell me it was gold? It was gold. And
Speaker 3: when I'm wandering around the world thinking about how to
Speaker 3: write about something, I am filtering it that way. I'm thinking, like,
Speaker 3: what's the meaning of this, Like what's the story of this?
Speaker 3: I'm not thinking. I'm not thinking I am responsible for it.
Speaker 3: I'm an observer. So I didn't feel responsible for Sam.
Speaker 1: Right.
Speaker 3: I was aware of how much damn it she'd caused
Speaker 3: in other people's lives, so if anything, I was, you know,
Speaker 3: like massively irritated with Sam for that if I thought
Speaker 3: about it, But mainly I was just watching it for
Speaker 3: like how is this going to play out?
Speaker 2: But in that moment with his mother, you said that
Speaker 2: you were not in your traditional journalistic state. You were
Speaker 2: in a different emotional state.
Speaker 3: I wasn't writing that down right, and I knew almost instinctively,
Speaker 3: I would not write about that. I'm talking about it,
Speaker 3: but I knew in that it wasn't like, oh, this
Speaker 3: isn't exactly material, because I had watched the relationship and
Speaker 3: I'd seen how far he kept them from what he
Speaker 3: was doing. Not everything like the mother received. He gave
Speaker 3: money to the mother's political causes, and his dad was
Speaker 3: involved in a lot of philanthropic efforts, but at the
Speaker 3: core of the operation, they were kept far from it,
Speaker 3: like they couldn't get on his schedule. Natalie, who kept
Speaker 3: his schedule, said, one of the biggest embarrassments for me
Speaker 3: is that the mom and dad would call up and
Speaker 3: say they want fifteen minutes with Sam, and Sam will say,
Speaker 3: you know, you know, dodge that for two weeks, and
Speaker 3: so they'd been kept at this kind of distance from
Speaker 3: the thing that had happened, and they'd been led to
Speaker 3: believe this thing about their child, that he was the
Speaker 3: richest person in the world in under thirty, that he
Speaker 3: was a miraculous human being who was going to save
Speaker 3: us all from pandemics, all that stuff, and that it
Speaker 3: was all ripped away so fast, and that they were
Speaker 3: staring right away pretty realistically at the situation that this
Speaker 3: is going to end very, very badly for him. So
Speaker 3: it was hard not to feel something for them.
Speaker 2: You know, when you got in the car with Sam
Speaker 2: and he said, it's so strange. Everything last Saturday was
Speaker 2: so normal, you know. In prep for this, I went
Speaker 2: back and I thought, when did you and I first talk?
Speaker 2: I found the date. It was May thirteenth of twenty
Speaker 2: twenty one.
Speaker 3: It was eight days before Dixie died.
Speaker 2: And of course this book is dedicated to her, and
Speaker 2: she was just on my mind, on my mind and
Speaker 2: reading this that you've had to hold that while writing
Speaker 2: this book, that you have held it while writing this book.
Speaker 2: How the hell have you done? All that?
Speaker 3: She helped me? So this is this is what she
Speaker 3: enters this book in a very curious way. There's an
Speaker 3: opening to another book I wrote called Home game, which
Speaker 3: is a collection of basically notes on fatherhood, and it's
Speaker 3: she's the opening, and she's a little kid, and she's
Speaker 3: standing up to some bullies that are trying to bully
Speaker 3: her older sister. Unbelievable act of bravery. And she was
Speaker 3: that way all the time. I mean to a fault,
Speaker 3: had this nerve in the face of what she perceived
Speaker 3: as injustice or attacks from bad people, or she's a fighter.
Speaker 3: The one thing I had to worry about writing this
Speaker 3: book was there was a mob waiting for it. I
Speaker 3: knew that if I wrote it, wrote what I thought
Speaker 3: and what I thought to be true, that lots of
Speaker 3: people are going to be angry about it. And I thought,
Speaker 3: I'm going to do this the way Dixie would do it.
Speaker 3: I'm just gonna say fuck it. And so it helped
Speaker 3: knowing that her spirit was there. There's another answer to
Speaker 3: this question too, And the other answer to the question
Speaker 3: is how could I not throw myself into work when
Speaker 3: Dixie died very shortly after, like days after, it was
Speaker 3: so traumatic, I realized that, like I got a sheet
Speaker 3: of paper out and I said, draw a line on
Speaker 3: the sheat of paper. On one side, put the things
Speaker 3: that make you feel worse on the other side, make
Speaker 3: the things that put the things that make you feel better,
Speaker 3: and just do the things on the left side and
Speaker 3: don't do the things on the right side. Like it's
Speaker 3: so bad that you have to sort of service yourself
Speaker 3: in order to survive. And one of the things that
Speaker 3: made me feel better was working, loving and working, like
Speaker 3: forcing the relationships with people I love, like making sure
Speaker 3: I'm expanding the circle of love. All that that, Like
Speaker 3: Dixie's loss was a loss of love and finding love
Speaker 3: and in thing on love was really important. But work,
Speaker 3: for whatever reason, it's probably because I love my work.
Speaker 3: It was it was became even more necessary. So yeah,
Speaker 3: I was grateful that a story walked into my life,
Speaker 3: even if it took me a while to figure out
Speaker 3: what it was. You are right, Yeah, all right, she
Speaker 3: was brave. I try to. I've sort of one of
Speaker 3: the things that I intend to do going forward is
Speaker 3: live as bravely as possible. And it's sort of to
Speaker 3: honor her.
Speaker 2: I want to play a clip for us. It's from
Speaker 2: that conversation we had, okay, and it's about the future ambition,
Speaker 2: what you pass down to your kids, how you hope
Speaker 2: they moved through the world, how you move through the world,
Speaker 2: basically a lot of what we've been talking about in
Speaker 2: this back and forth. And I wonder just where it
Speaker 2: lands with you now.
Speaker 3: I mean, to this day, when I go to New Orleans,
Speaker 3: I'm you know, yeah, I'm a but I'm Tom and
Speaker 3: Diana Lewis's son and uh and and thus interpreted by
Speaker 3: my bye and and I could spend weeks in New
Speaker 3: Orleans trying to get someone to take me seriously without
Speaker 3: without succeeding. So that's just a different attitude towards life.
Speaker 3: And I loved it. I growing up, I just I
Speaker 3: didn't have I mean, I eventually sort of developed ambition,
Speaker 3: but it I didn't. It wasn't there all the time.
Speaker 3: Like one of the things that I mean is different
Speaker 3: from my child my life and my children's lives is
Speaker 3: they have forced upon them enormous anxiety to like you're
Speaker 3: supposed to achieve. And no one even no one ever
Speaker 3: suggested that to me that I was supposed to achieve something.
Speaker 2: Do you think you've forced it on them?
Speaker 3: I've tried not to, you know, It's it is an
Speaker 3: unfortunate byproduct of being a successful author. Like my books
Speaker 3: are out there and I'm on TV and all that crap. Uh,
Speaker 3: that they see me as a success, and it probably
Speaker 3: they eternalize it as well. I have to be a
Speaker 3: success too, so in that sense maybe I do. But
Speaker 3: I try to explain to them that that the success
Speaker 3: should just be thought of as like whatever, it's a
Speaker 3: byproduct of doing something I really love doing, and that
Speaker 3: the goal is to move through life in a way
Speaker 3: that you don't you don't miss the thing that you
Speaker 3: really love to do, that you don't walk away from
Speaker 3: it by mistake, that you that you're alive to it
Speaker 3: when it walks in the front door. And we shall
Speaker 3: see if I've succeeded in getting that message across. That
Speaker 3: doesn't sound like bad advice, I don't. I don't disapprove
Speaker 3: of that person. My youngest walker is sixteen years old,
Speaker 3: and I try to live that with him. I mean
Speaker 3: I try. I try to explain, like the trick to
Speaker 3: happiness is finding the things you like to do in
Speaker 3: doing them and not trying to be famous or be
Speaker 3: rich or any of that. And it's funny, I sometimes
Speaker 3: find myself talking to like a deaf eared boy, like
Speaker 3: he just doesn't believe, he doesn't believe in me. He's
Speaker 3: easy for you to say. It's basically his attitude towards
Speaker 3: at all. Soon we're gonna do kids. I'm gonna tell
Speaker 3: you fun can't tell you a funny story to end on.
Speaker 3: I don't know if we're about to end. But before
Speaker 3: I walked on the out of the door on the
Speaker 3: book tour, word had gotten out in his school or
Speaker 3: whatever that I had actually been living in Sam bankmin
Speaker 3: Free's life for the last eighteen months, and I had
Speaker 3: this book that was going to come out, and that
Speaker 3: was incredible. How did I know? You know all that stuff?
Speaker 3: And we were sitting on a sofa. We were talking
Speaker 3: about his homework, his history homework. We're talking about this
Speaker 3: kind of weirdly appropriately the same the Salem witch trials,
Speaker 3: and talking about mobs. And when we were finished, he
Speaker 3: was it was late at night, and he was kind
Speaker 3: of tired, and he gets tired all of a sudden,
Speaker 3: He's eight years old all over again. And he looks up.
Speaker 3: He says, Dad, are you a genius? And I said no, no, no, no,
Speaker 3: not a genius. He said, would anybody say you're a genius?
Speaker 3: And I said, only some stupid people like nobody would say,
Speaker 3: I'm really Sam a genius. And he said it is
Speaker 3: like this relief that came over his face, and he said,
Speaker 3: that's what I thought, because you never say anything that
Speaker 3: that's that intelligent. I thought some of the good has
Speaker 3: happened here.
Speaker 2: And you're saying this because the book tour you've been
Speaker 2: on has been a lot of people saying the same thing.
Speaker 3: The reactions of the book have been have been so volatile.
Speaker 3: I mean, Twitter is one thing, but the reactions I
Speaker 3: have gotten to the book have been as all over
Speaker 3: the place I've had all over the place reactions before,
Speaker 3: but more all over the place than usual extremes in
Speaker 3: every direction.
Speaker 2: So your son prepared you, Yeah.
Speaker 3: He did. The family life prepared you. Right. You may
Speaker 3: think you're interesting, but they don't.
Speaker 2: That advice you gave in that clip for your kids,
Speaker 2: if it walks in through the door, like to be
Speaker 2: alive enough to hold it, to take it on. It
Speaker 2: seems to me that you have done that again and
Speaker 2: again and again, and you've done it with this new book.
Speaker 2: I guess I want to know when you started this book,
Speaker 2: you had that question, what is this story tell us
Speaker 2: about the world? What does Sam tell us about the world.
Speaker 2: Do you have an answer to that?
Speaker 3: Well, there's something Sam says that's I think recurs throughout
Speaker 3: the story and recurs throughout the response to the collapse
Speaker 3: of FDx. People see what they're looking for, they don't
Speaker 3: see what they're not looking for, and when someone really
Speaker 3: unusual walks into the room, they have a hard time
Speaker 3: placing him. The other thing I'd say is that runs
Speaker 3: right through the book is how unsettling and revealing it
Speaker 3: is when you have a character who's devoid of feeling,
Speaker 3: when there's no when you try to strip life of
Speaker 3: emotional content, and you kind of try to denature it
Speaker 3: and reduce it to a math problem the way like
Speaker 3: an AI would how much you lose, what you gain
Speaker 3: and what you lose. It's a incredible character study of
Speaker 3: that particular character trait.
Speaker 2: When we're done here, you're going to have a meeting
Speaker 2: that you're going to do a book event, and then
Speaker 2: you're going to go to New York City to see
Speaker 2: Sam testify. Is that right correct? How do you think
Speaker 2: this is going to play out?
Speaker 3: You know it's it's the sentencing is curious, it's not
Speaker 3: clear the judge is a hanging judge. He's a tough
Speaker 3: sentencer and the judge doesn't like him. But the judge
Speaker 3: has enormous latitude as to the sentence, so it's not
Speaker 3: clear exactly what the sentence will be. It isn't even
Speaker 3: if he's convicted of all the charges. The most the
Speaker 3: judge can sentence him too is one hundred and twenty years,
Speaker 3: But he could say you're also free to go. He
Speaker 3: could say anything. I don't know what the judge is
Speaker 3: going to do, how I think it plays out. I
Speaker 3: don't know how much more there is to play out.
Speaker 3: And it's pretty clear he's going to be convicted.
Speaker 2: Do you want him to be punished.
Speaker 3: He needs to be punished in some way. I don't
Speaker 3: think he's just going to escape punishment. It seems a
Speaker 3: waste to stick them away in jail for a life.
Speaker 3: I don't know. I feel a mixture of like, yeah,
Speaker 3: he did things, he did things he shouldn't have done.
Speaker 3: He broke the law almost certainly, and when people do that,
Speaker 3: they are punished. There's a part of me that, even
Speaker 3: as I think that, I also feel kind of sympathy
Speaker 3: for the situation. When I first met him and I
Speaker 3: started to watch him move through the world. I thought,
Speaker 3: there's a place for this person that there would never
Speaker 3: have been in earlier in other times on Wall Street,
Speaker 3: in society. This instant child billionaire is this new character
Speaker 3: and willingness to accept as an authority a person who
Speaker 3: generates vast amounts of wealth for himself very quickly, without
Speaker 3: knowing very much about who this person is, and allow
Speaker 3: them to start exercising influence over the culture in all
Speaker 3: kinds of ways that you might not if you knew
Speaker 3: who this person was. And it's partly a byproduct of
Speaker 3: a collapse in trust in institutions, governments, all the rest
Speaker 3: is sort of looking to this person to do what
Speaker 3: our institution should do, so putting in a position of
Speaker 3: authority that really probably no individuals should be.
Speaker 2: In my last question, because we had to go. The
Speaker 2: thing that you have I think cemented over the years
Speaker 2: is a trust between you and the readers. I think
Speaker 2: that's why people keep coming back to you as readers.
Speaker 2: It's probably why people keep agreeing to be subjects in
Speaker 2: your books. And I'm curious because when Dixie passed, you
Speaker 2: said I didn't know if I wanted to write again.
Speaker 2: I suppose as we leave, I wondered, now, two and
Speaker 2: a half years since she left us, how do you
Speaker 2: feel about writing in this moment?
Speaker 3: I just loved it. I mean I took such joy
Speaker 3: and pleasure. I shouldn't have joy than I should have
Speaker 3: taken in writing the story. I've had this feeling several
Speaker 3: times and would that I have it several times again.
Speaker 3: I felt I was limited only by my abilities. I
Speaker 3: thought that the world had generated once again this material
Speaker 3: that was so good I could only screw it up,
Speaker 3: and having that gives me enormous pleasure, the same pleasure
Speaker 3: like whatever that happy place is I'm in when I'm writing,
Speaker 3: it's there, and so I feel great about it. My
Speaker 3: worry when I think about writing now is that I
Speaker 3: force it, like that I go force the need to
Speaker 3: go write a book, rather than sit back and let
Speaker 3: it walk in the door. This walked in the door,
Speaker 3: and I think other ones will. But I think I
Speaker 3: want to be careful to make sure that I only
Speaker 3: write the books that feel like they really need to
Speaker 3: be written, because that's the joy. That's the joy, it's
Speaker 3: the pleasure of that.
Speaker 2: Michael Lewis, thank you for sitting and congratulations on the book.
Speaker 2: Thank you, Sam that was Michael Lewis. He's the author
Speaker 2: of the new book Going in Evident, The Rise and
Speaker 2: Fall of a New Tycoon. The trial of Sam Bankman
Speaker 2: Freed is set to resume tomorrow, Monday the thirtieth, in
Speaker 2: a Manhattan federal court. Upon initially taking the stand this
Speaker 2: past Friday, Bankman Freed acknowledged that mistakes were made while
Speaker 2: running FTX quote. There were significant oversights, he said to
Speaker 2: a crowded courtroom filled with his parents, Barbara Freed and
Speaker 2: Joseph Bankman, reporters, students, and of course, our guest today,
Speaker 2: Michael Lewis. According to The New York Times, Bankman Freed's
Speaker 2: testimony could end as soon as Tuesday, Closing statements could
Speaker 2: happen on Wednesday, and the jury could begin deliberation as
Speaker 2: early as Thursday. If charged with the seven counts of conspiracy, fraud,
Speaker 2: and money laundering, Bankman Freed, at the age of thirty one,
Speaker 2: could be sentenced to a life in prison. And that's
Speaker 2: our show. If you enjoyed today's episode, be sure to
Speaker 2: leave us five stars on Spotify, Apple, wherever you do
Speaker 2: your listening. I want to give a special thanks this
Speaker 2: week to Elizabeth Riley, the publishing team at w W Norton, Lydia,
Speaker 2: Gene Kott, and of course, our guest and fellow Pushkin
Speaker 2: podcaster Michael Lewis. To order his new book, Going Infinite,
Speaker 2: The Rise and Fall of a New Tycoon, be sure
Speaker 2: to visit our website at talk easypod dot com. There
Speaker 2: you'll also find other episodes with great writers including Zadi Smith,
Speaker 2: fran Leebowitz, David Sedaris, Min Jin Lee, and Hilton Nows.
Speaker 2: To hear those and more Pushkin podcasts listen on Apple Podcasts, Spotify,
Speaker 2: or wherever you like to listen. You can also follow
Speaker 2: us on Twitter, Facebook, Instagram at talk easypod. If you
Speaker 2: want to join our mailing list, drop me a line
Speaker 2: at SF at talk easy z pond dot com. That's
Speaker 2: SF at talk easypond dot com. You can also purchase
Speaker 2: one of our mugs at Come and Cream or Navy,
Speaker 2: or our vinyl record with fran Leewitz at talk easypond
Speaker 2: dot com slash shop Talk Easy is produced by Caroline Reebok.
Speaker 2: Our executive producer is Jenixi Bravo. Our associate producer is
Speaker 2: Caitlin Dryden. Today's talk was edited by Caitlin Dryden and
Speaker 2: mixed by Andrew Vastola. Our music is by Dylan Peck.
Speaker 2: Our illustrations are by Chris Chenoy. Video and graphics by
Speaker 2: Ian Chang, Derek Gaberzak, Ian Jones and Ethan Seneca. Photographs
Speaker 2: today are by Julius chu House. I want to thank
Speaker 2: our team at Pushkin Industries, Justin Richmond, Julia Barton, Johnsnars,
Speaker 2: Kerrie Brody, Heather Fane, Eric Sandler, Jordan McMillan, Cura Posey,
Speaker 2: Tara Machado, Jason Gambrell, Justine Lang, Malcolm Gladwell, and Jacob Weisberg.
Speaker 2: I'm Sam Fragoso. Thank you for listening to Talk Easy.
Speaker 2: I'll see you back here next week with another episode
Speaker 2: All that Happened, Stay safe, sen So long MHM