9/8/26: Fetterman Staffers Expose Insane Behavior, Leon Black & Jeffrey Epstein

8 Sep 2026 · 38 min · 14 chapters

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In short

The episode has two main parts. First, the hosts discuss a Wall Street Journal report alleging John Fetterman’s staffers leaked text messages showing he allegedly cared little about senatorial duties and prioritized conservative media appearances (especially Fox News) and pro-Israel positions.

Notable examples

he allegedly told staff he didn’t care about CHOP vaccine/Medicaid concerns and thought meetings were “free trips to DC”; he allegedly declined attending multiple police funerals because the ceremony would last “three hours”; and he allegedly pursued an Israel/Gaza genocide stance resolution and used Israeli ambassador-provided talking points for an op-ed. The hosts also say former Fetterman staffers formed a group to leak more.

Second, guest Leon Black (Apollo co-founder) is interviewed about his rise, his relationship with Jeffrey Epstein, and the private credit market.

Key claims

Black says he commissioned an investigation (Deckard report) and claims no wrongdoing; he describes Epstein as providing “tax and estate advice” tied to avoiding a purported $2B tax bill via “miracle consideration” (dividend adjustments). The episode also explains private credit: post-2008 bank lending restrictions drove growth in private credit, with risks for retail investors via BDCs limiting withdrawals (e.g., 5% per quarter).

Written by AI. May contain mistakes. Listen to the episode to check what was said.

Chapters

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Fetterman's Disinterest in Senate Duties

2:15 to 6:43

Analysis of John Fetterman's apparent priorities over Senate responsibilities.

“Let's put this article up on the screen from The Wall Street Journal.”

Fetterman and His Staff's Issues

6:43 to 8:02

Discussion of the internal issues with Fetterman's staff and their concerns.

“And the thing is that really, Senator, it's not a hard job.”

The Impact of Fetterman's Stroke on His Politics

8:02 to 11:00

Exploration of how Fetterman's health affected his political behavior and priorities.

“He doesn't seem to care about Pennsylvania at all.”

Fetterman's Future and Political Delusions

11:00 to 14:00

Speculation on Fetterman's political future and his possible delusions about reelection.

“differently he's comported himself now versus before.”

Discussion on Fetterman's Political Future

14:00 to 17:52

Explore the dynamics of Fetterman's potential reelection and his current political standing.

“You know, actually, I should adopt that new thing.”

Discussion on Fetterman's Political Future

17:55 to 18:37

Explore the dynamics of Fetterman's potential reelection and his current political standing.

“This is Jacob Goldstein from What's Your Problem?”

Leon Black and Jeffrey Epstein

18:37 to 25:43

Delve into the complex relationship between Leon Black and Jeffrey Epstein, exploring their past and its implications.

“So I will confess I'd known a little bit about Leon Black from his days at Apollo.”

Examining Black's Judgment and Business Practices

25:43 to 28:00

Investigate the dichotomy in Leon Black's financial acumen versus personal indiscretions.

“and to some extent did do that, but now is entwined forever, I guess, with Jeffrey Epstein.”

Leon Black and Jeffrey Epstein's Financial Intricacies

28:00 to 34:54

Explore the complex financial dealings between Leon Black and Jeffrey Epstein, including substantial payments and tax strategies.

“you're on the cover of Business Week with a one-word headline that said ruthless.”

The Rise of Private Credit Post-2008

35:05 to 42:00

Understand the evolution of private credit markets following the 2008 financial crisis and the risks associated with them.

“This is Jacob Goldstein from What's Your Problem?”
Show all 14 chapters

Discussion on Financial Instability

42:00 to 42:52

Learn about the dynamics of financial institutions and liquidity issues.

“But you basically signed up for seven or 10 years.”

Closing Remarks and Preview

42:52 to 43:04

Hear final thoughts and a preview of the next episode.

Closing Remarks and Preview

43:52 to 44:22

Hear final thoughts and a preview of the next episode.

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Closing Remarks and Preview

44:25 to 45:17

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Transcript

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2:14Time to check in with our favorite brain-damaged Israel Schilling Senator John Fetterman. A new article out with staffers spilling the tea about how he has very little interest in actually being a United States senator and quite a lot more interest in doing the bidding of Israel and appearing on conservative media, specifically Fox News. Let's put this article up on the screen from The Wall Street Journal. The headline here is Behind Closed Doors, John Fetterman Shows Little Interest in the Work of a Senator. The headline very much underplays some of the anecdotes that they have here backed up by text messages.

2:49Let me go ahead and show you some of the most stunning examples that they pull here. Let's put the first one up on the screen. So they say that last summer he was supposed to meet with CHOP as the Children's Hospital of Philadelphia. he says to his staffer in a text message why do I have to keep meeting with the children's hospital the aide says because they're worried about vaccines and medicaid cuts betterman replies well I'm not I'm convinced they just want free trips to DC so aggrieved at the idea he has to meet with the children's hospital and saying I don't really give a shit about vaccines and medicaid cuts myself it's not of interest to me let's go and put this next one up on the screen we've got some more tweets here from an aide.

3:34This is with regards to the funeral of three different police officers that he was supposed to attend. So the aide says, update on the event. No one will be allowed to staff you due to number restrictions. The organizers are requiring everyone to be seated by 11 a.m. and the funeral will begin at noon and last at least three hours. Fetterman says, three hours? Question, question. The aide says, yes, it's a very formal ceremony and the equivalent of three separate funerals. Fetterman, this may be a non-starter. So can't attend the cop funerals because it's just going to be too burdensome on him.

4:13Too much of a time commitment. Three hours is just too much out of his day. Let's put the next one up on the screen here. We've also got some details here, I believe, about his commitment to Israel and the way this is all going. So they say that he wanted to, told his advisors and senior staff he wanted to introduce a resolution forcing every senator to take a public stance on whether the war in Gaza constituted a genocide. I would also actually welcome that resolution. His senior staff tried to talk him out of this idea, according to people familiar with the matter, but he was undeterred. Last September, the Israeli ambassador met with Fetterman in his office and suggested an alternative.

4:50Fetterman could write an op-ed explaining why he continued to support Israel, according to people familiar with the matter. Fetterman agreed and told Leiter, that's the ambassador, he would write the submission based on any points the ambassador sent over. According to these people, a few days later, MC staff sent over drafted points for Fetterman to consider. So literally taking talking points from Israeli officials, that's great. There was another incident we didn't pull the graphic of, But there were three disabled veterans from Pennsylvania who'd set up a meeting with him that they traveled all the way from Pennsylvania to D.C.

5:24for. You know, they'd waited months to be able to have his ear on an issue that was important to them and their quality of care. He texts the staffers, oh, I think I got food poisoning. I'm not going to be able to make this meeting with the veterans. then shortly after the meeting shows up in the office seeming perfectly fine and says I've gotten I've gotten an appearance with Fox News on the topic of course of I think it was the Iran war or Israel so I gotta I don't want to be late for that I got to get over for that so showing his priorities there but um not shocking but pretty stunning just I mean this really is goes beyond a sort of left right spectrum just shows what a kind of like piece of shit he is honestly not caring about his constituents on basic issues like health care for children or disabled veterans or these cops that were killed whose funeral he was supposed to attend and shows you his priorities.

6:19He wants to be on camera talking about how much he loves Israel. You put that together with that article we covered previously, Sagar, about how he has this one super pro-Israel guy who's like showed up out of nowhere and is with him all the time and sort of guiding him. You know, it's a pretty it's a very disturbing picture because this is definitely not what Pennsylvania voters thought they were getting when they voted for this guy. Absolutely. And the thing is that really, Senator, it's not a hard job. I know that people, you know, build it up and all of this. Unless you're the majority leader, you basically don't do anything really all that great.

6:58You take a party line vote up or down occasionally. Additionally, the good ones, they get Senate Foreign Relations Committee. They can do investigations, et cetera. But especially when you're in the minority, you don't do anything. Your only real job is to take these types of meetings and to use your name, you use your staffers and your name to go and to get things done for your constituents, like the Children's Hospital. That's something they actually might be able to help or save. They're like, hey, you've got a budget cut that's coming here. Let me get on the phone with the administration. In fact, Fetterman, you could even argue, considering all of these connections he has now with the Republicans, he could be really using that for the benefit of Pennsylvania.

7:38He could say, I'm not going to vote for this, this, and this. I'll back you guys up on Israel. You guys got to give me this. You got to make sure you keep CHOP out of the budget cuts. You got to make sure that some of these cuts and things don't affect this disabled veteran community or this veterans' hospital. This is what real politics looks like. A lot of it won't show up at the national level for a show or something like that for us. But that's what makes an actually effective United States senator. He does none of that. He doesn't seem to care about Pennsylvania at all. He does not seem to care about his constituents at all.

8:11The only public appearances this guy is making are ones that are organized by Dave McCormick's staff, the Republican senator from Pennsylvania, who he doesn't even have to do any of the work. I think it's also very telling. Look, you and I both know there's a lot of bad bosses on the Hill, right? They're legendary senators. Like the Klobuchar thing has come out. I won't spill all the beans, but everybody knows these people's names. I have never, ever seen people leak an internal senator's text messages. And in this case, we now have a group of Fetterman staffers put D4, what is it, D4, where his own former staffers have come together and are now saying, hello, Twitter.

8:51We're a group of former campaign Senate staffers for John Fetterman who are disgusted with what he's become. If you were troubled by yesterday's story, trust us, they're just the tip of the iceberg. It is even worse than you thought. We have come together to share our stories and screenshots to show us Pennsylvanians exactly who their senator is. Set your calendar for September 14th, the day the Senate is back in session, for our first drop. Let's be honest, maybe the 15th. He'll skip Monday votes. He is calling these smears. I mean, again, I can tell you a roster of a dozen of stories of people here in Washington and what these people are really like.

9:29Even they never have had a band of their former staffers come out and just be like, let me show you how much of a piece of shit that this guy really is. I mean, this is the there is a code of Washington. You never leak this type of stuff for the principal. But he has no respect for these people. And what's telling is, is I don't think any of the other senators would even care. They would still hire them. That's the main reason why this stuff usually doesn't come out, because they despise John Fetterman just as much as his own staff does. And that's how unprecedented this situation is. Yeah. Well, and also he's already most of the people, if not all the people who were with him when he was a progressive running as having endorsed Bernie Sanders and in favor of Medicare for all those people have by and large left already.

10:16Right. So the staffers we're talking about now, these are the people that came in knowing like, OK, well, you know, he's a centrist now and he hangs out with Republicans and he's super pro-Israel. Like those are the people that we're talking about who are now leaking these anecdotes who are like above and beyond anything else. Like all he cares about are his Fox News appearances. There's a broader issue here. clearly like he is not the same person politically as he was because he was an established politician with the track record and we interviewed him before the stroke, et cetera. This is a person who is different because of a stroke and because of the damage that was done to his brain.

10:55I know that's uncomfortable to say, but there's just no other conclusion you can come to based on how differently he's comported himself now versus before. How is it that there's no mechanism for voters to get to weigh in on the capability of a center. We mostly talk about this with health issues like specific like the Tom Keen situation or most frequently with people who are extremely old and whose brains are deteriorating in front of us. This is a major democracy issue that this guy who has completely changed his stripes just and does not care about doing the job and doesn't seem to care about getting reelected either is just allowed to persist.

11:33And there's no check on that whatsoever. I think to a lot of people that seems totally, totally insane. And you can imagine what happened here, Sagar. Like he's awkward and weird and people don't like him in the Democratic caucus. So you had the, you know, the Israel types, the pro-Israel types sort of swoop in and they got their guy on the inside who's like, oh, let me tell you what to do and let's push this and here, I'll help you with your op-ed and all of those sorts of things. And then the Republicans smelled an opportunity. So you had a couple of Republicans, including, as you were pointing out, his Republican colleague from Pennsylvania, senator from Pennsylvania.

12:10Oh, I'll be your friend. Like, let's go hang out. Let's have dinner together. Come over to my house. Meet my wife. We've seen way too many times how even with people who haven't had significant brain injuries, who they can be really seduced by that. Oh, this this is the people that are being nice to me. So my politics are going to shift more to their viewpoint because they're the ones that are being nice to me, whereas the people I used to agree with politically, they're being mean to me. So I'm going to completely change my politics just based on who's being nice or who's being mean to me. And so Republicans have really, I think, very cleverly kind of, you know, manipulated him and have helped to craft him into the person that we see today.

12:51In terms of his political future, you and I were debating this. I think he is delusional enough to think that he could get reelected. One of the last articles that came out about him, his staffers were saying that he thinks he could be a vice presidential pick. He even thought maybe he would run for president, but he was like, oh, maybe I'll be a vice presidential pick on the Democratic side, which is so insane, which is why I think he may, Sagar, be deluding himself into thinking that he has a lane either as a Democrat or a Republican to actually win reelection, even though it's utterly preposterous.

13:24I mean, Democrats completely hate him. And then the Republicans, they're not going to want some like, you know, sort of Republican. They're going to want someone who's a true believer who's with them all the way on everything. And he is not that. So as much as they may love him when he's a Democrat who's pissing on Democrats, it's another thing for him to get nominated, let alone be able to win in a competitive election. I don't know. I could be wrong. He's more cinema than my I will say I've hated John Fetterman before the brain aneurysm. So I think I deserve an award. You've hated him the whole time.

13:57I've hated him from day one. He was weed degenerate from the beginning. Maybe it's weed. You know, actually, I should adopt that new thing. It's not just the brain aneurysm. It's the marijuana that cooked his brain. But look, the guy is a literal resident ogre being used by the Israel lobby or Katie Britt or Dave McCormick. You could be right. He is so delusional that he may run for reelection. Here's the thing. I don't think he would even make it through the Democratic primary, at least as of right now. He would have a better chance in the Republican primary than the Democratic primary. He probably would.

14:33Zero percent chance he wins the Democratic primary. And like you said, by the way, Pennsylvania GOP is literally insane. They're nominating outright morons up there on the ticket. McCormick is definitely not the, how should I say this, he is not the norm whenever it comes to who they usually are putting up there on the ballot. But when we actually just like think about Fetterman's career, this is a guy motivated clearly by ego and by media love. That's part of the reason why running for office is hard. You know, Fetterman now is lazy. He literally does nothing. When he ran for reelection, to his credit, he actually did go to like almost all the counties in Pennsylvania.

15:11He barnstormed the whole state. He was all over the media. I mean, you got to really work at it. This is a big ass state. It's a 15 million people, right? It takes several hours to drive across. the entire thing. You really think he wants to do that? I mean, he was already a little rich boy beforehand whose parents were floating his mortgage and all of his payments. Now he could just be a multimillionaire and do Fox News hits from his weird basement in Pittsburgh, which is like some former auto dealer. That seems, again, to me, to fit his more current personality as opposed to actually running.

15:43Because running is not easy. You got to go out and shake hands. You got to take meetings. I mean, if you think taking meetings with veterans is hard, the type of groups you have to meet when you're running for office, that's a whole other level of what it would actually take. That's my only reason. I think he's just unbelievably lazy and motivated at this point by money and fame. I mean, it's not that hard to live that life, especially now you've done what you've done. You can get hired by some lobbyist firm. He can make a million dollars a year for the rest of his life. I don't know. Seems like a path he might take.

16:13Or hired by, you know, government of Israel to do whatever for them. Like, all of that is certainly on the table for him and his future career prospects. So you may be right. He should make Aliya. He should make Aliya. He should convert to Judaism and make Aliya. We'd be home. He'd be better off. We really would. All right. Let's move on. We know kids don't hold back. And I wouldn't want them to. Get in there. Make a mess. Slide for home. Bring on the stains. I've got OxyClean Versatile Stain Remover. It works on over 100 stains, and it's America's number one stain fighter additive brand. It's color-safe and chlorine-free, so I use it on whites, colors, and dark fabrics.

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19:02Thank you for having me. Absolutely. So I will confess I'd known a little bit about Leon Black from his days at Apollo. Obviously, now your book has done a lot of work to uncover his rise and what it means about financial capitalism. But for the vast majority of Americans, I think they became familiar with him with the more recent revelations around Jeffrey Epstein. In fact, Mr. Black is currently in the news. Let's put it up here on the screen. currently actually suing the United States House of Representatives over a subpoena and refusing to give a deposition, which has included many of the other billionaires named in the Epstein files.

19:41What throughout your work struck you about Leon Black's, his rise in his fortune and his relationship with Jeffrey Epstein? Well, I mean, first of all, yes, I agree that everybody, if they know him at all, They know him because of his relationship with Jeffrey Epstein, which is, of course, I mean, Jeffrey Epstein's behavior is reprehensible in every way, as we all know. And Leon's relationship is sordid at worst, maybe even potentially a criminal, although he's certainly not been found to have any criminal engagements with him. but it certainly is reflective of poor judgment, which he and Lee and I talked about.

20:29But again, the story of Leon and his father and his family and, you know, and I mean, Jeffrey Epstein is really the last portion of all of this. You know, it began with his His famous father committing suicide when Leon was in his second year at Harvard Business School, which he didn't even want to go to. But his father basically insisted that he do that. And then after his father's death, realizing that he had to become the family's breadwinner, and he figured out that the best way to do that was to go to Wall Street. turned out that he was very, very good at what Wall Street did, especially advising companies on mergers and acquisitions.

21:18He did that at Drexel Burnham, which was, of course, a very powerful firm, especially in the late 80s during the reign of Mike Milken, who, of course, most people know who he is. But then Drexel blew up in 1990, actually was liquidated, And Leon sort of corralled a bunch of the best people he could find from Drexel and started Apollo, which was a private equity firm, so to speak. It was also more than that. And so, you know, he made his fortune in sort of a very sharp elbowed way. The firm was very aggressive, very smart, smarter than most other firms and made a lot of money over many years. The firm is now, what, 36 years old.

22:16And Leon and his partners became billionaires. and then what we all know now is that in addition to having very good judgment, I guess, about doing deals and making a lot of money, he had very poor judgment in his personal life with his involvement with Jeffrey Epstein and also a number of women he was having affairs with who are not his wife. What do you think led to that? And is there anything that we can sort of extrapolate because obviously land block is far from the only elite who had that quote unquote bad judgment with regard to their activities and Jeffrey Epstein. What was it that led to that dichotomy you're setting up where in the business world, he perhaps had good judgment, putting the, you know, sort of moral judgments there aside, but in his personal life had such incredibly disastrous judgment that led to a lot of, I mean, massive reputational harm and, you know, ultimately business damage for him as well.

23:16Yeah. I mean, he ended up having to give up his job as CEO of Apollo and as chairman of the Apollo board, although he remains with 85 million shares, the largest single shareholder at Apollo, which has made him worth, you know, more than 15 to 20 billion dollars now. You know, I asked Leon on many occasions because I had unusual access to him. He was on the record for 99 % of our conversations, which, you know, I give him credit for most guys. Yeah. Wouldn't, wouldn't, wouldn't sit for that. And, you know, he hasn't talked to many other journalists. So, you know, I appreciated that very much. And there There was like no question that he shied away from.

24:02You know, it's clear that he, you know, I don't know whether it was his father's suicide when he was in graduate school. That obviously, you know, he revered his father. His father, he comes from 10 generations of Orthodox rabbis. His father was an Orthodox rabbi, practicing Orthodox rabbi in Woodmere, Long Island, and then went to business school and became a banker at Lehman and then went off and ran a company and created a major and important conglomerate and then jumped out of the Pan Am building. And that was front page news in The New York Times. So obviously that was traumatic. uh leon uh you know i i didn't uh psychoanalyze him i'm not sure why somebody uh steps out uh on uh his wife i mean he's got four kids by by all reports they're um you know he's a good father and the kids are all well adjusted uh including one who works for the trump administration uh look i can't explain why that happens that happens a lot as we all know uh leon's uh uh poor judgment in that regard became a front page news and his involvement with jeffrey emstein became front page news but you know which i see is sort of a strange circle of life with his father both involved in scandal, even though Leon was trying to restore the family's name, and to some extent did do that, but now is entwined forever, I guess, with Jeffrey Epstein.

25:51But he answered my questions about it. He explained the involvement. There was this report by Deckard, the law firm, which, you know, basically found no wrongdoing on his part that it was for tax and estate advice. You know, there's been subsequent reporting in The New York Times and other places that showed that there was some more involvement with other women than was reviewed in the Deckard report. But people have been trying to make... for that tax advice. That's what I was going to get at, sir, is that to me, you know, look, you talked about his personal indiscretions. I don't care about his personal indiscretions at all.

26:34I mean, this guy's worth, what,$915 billion? You're paying$170 million for tax advice to somebody who's not a registered financial advisor through some sketchy LLCs. I mean, did you get into the details on that? Because that just doesn't pass the... I know a lot of people who are worth a lot of money. They have a team of professionals, the wealth management firm. I mean, this guy had access to the top wealth management tax people in the history of the world. And you have somebody you can barely spell in a private email. That doesn't pass the smell test to me. I'm curious what he said to you about it.

27:07So, first of all, when the Decker Report came out, which was in January of 2021, which Leon basically asked the Apollo Special Committee of the Apollo Board of Directors to undertake. And he told me that he's basically and this is true. He is the only person who has ever asked for an investigation to be done of his relationship with Jeffrey Epstein. I don't see Bill Gates doing that. I don't see Larry Summers doing that. Very true. Or Ehud Barak. I mean, he said he did that because he believed he did nothing wrong. OK, so that's his view of events. Deckard basically ratified that. I wrote a piece in Vanity Fair when that Deckard report came out and said, hey, Leon, do you think we're idiots?

Read the full transcript

27:55How could this possibly be true? You're you're Leon Black. You're one of the great financial minds of your generation. you're on the cover of Business Week with a one-word headline that said ruthless. So you're aggressive, you're smart, you're brilliant, and you want everybody to know you're aggressive, smart, and brilliant. How could you have paid Jeffrey Epstein$158 million for something you could have paid Paul Weiss$5 million for? So Leon and I spent a lot of time talking about that. And again, he has his answer. I, you know, I've been through the as much as I could, given that, of course, these three million dollars, three million files dropped in and around the time that my book was closed before, been locked before publishing.

28:44There were all these crazy ranting emails from Epstein to Leon, but Leon never replied to any of them. uh uh we talked about uh uh how this all could have happened and what epstein did for him look uh he was an autodidact uh jeffrey epstein he did not graduate college but he was somebody who managed to either hoodwink or blackmail or or or something a lot of rich and powerful people. He obviously, his behavior with women was reprehensible. Leon and I talked about this. You know, it's, I go into it in the book. It's complex. I could, I could try to explain it to you here, but, but basically what the 158 was a payments accumulated over, you know, six or seven years.

29:41So that's number one. The tax and estate advice that related to his grads, which are the trusts that he set up for his children, he was facing, and this is in the Decker Report, something like a$2 billion tax bill if it weren't resolved, because apparently, now I find this hard to believe, and I said this to him, that the person who did the original grads kind of messed them up, and he was facing a$2 billion tax bill. I said, I found that hard to believe, but okay. and that he had shown them to other typical Wall Street tax and advice attorneys, and none of them could figure out what to do to avoid this tax bill that was staring down Leon.

30:20And he decided at that point, well, what do I have to lose? I'll mention it to Jeffrey Epstein, who was on the board of his family foundation. OK, that's weird, number one. And why would he think that Jeffrey Epstein could come up with a solution that the high-priced Wall Street lawyers couldn't come up with. Well, I was curious about that, and he laid it all out. And it comes down to what I call this miracle consideration, and I'll try to put it in layman's terms, which is that for some reason, which I don't understand, Leon was paid extra dividends, hundreds of millions, like as much as 400 million of dividends on his Apollo stock that he was not really entitled to.

31:01And Epstein came up with a solution. Well, if we give up those dividends, if we give those back, then that'll be the consideration, i.e. what I call the miracle consideration, for how to redraft these gratts to fix them to avoid the$2 billion tax liability. And, I mean, as crazy as that sounds, that is exactly what happened. I've seen the redrafted documents. I've talked to his attorneys at his law firms that ratified what Epstein did. As crazy as that sounds, I mean, I was sort of thinking to myself, please, Leon, don't tell me something that actually makes sense and justifies this. Don't don't share with me documents that I can see that actually verify some of the things you're saying here.

31:48But he did. And I did. And it really hasn't been challenged. There's been the IRS hasn't challenged it. I mean, Ron Wyden, Senator Ron Wyden talks about it and challenges it. But he hasn't really come up with the goods yet. So people are still looking at this and people are still incredulous. As to some extent I am, but the 158 was more than just this one problem that he solved for Leon or supposedly solved or effectively solved because he hasn't been charged for that$2 billion. And so it was like sort of a M &A fee for saving him his$2 billion. And then he went on to weasel himself, you know, into all sorts of other businesses that Leon was involved with and into his family office at Elysium.

32:35And this went on for a number of years. And he expected to get paid every year that he was giving this advice to Leon about how to structure his purchase of a jet or his art collection, which is basically invaluable, or his boat or his apartments or his homes, and all to be done in a tax-efficient manner. and again there's a lot of emails about this from Epstein to Leon in in the files but there's really no response from Leon to any of this and basically Leon's view is he was a raving mad lunatic who was trying to you know squeeze me for as much money as he could to the point where I had to cut off the relationship, which he did.

33:25And, you know, we all know Jeffrey Epstein is dead now, and it's very hard to verify the other side of this argument. And so that's what we're left with. We know kids don't hold back, and I wouldn't want them to. Get in there, make a mess, slide for home, bring on the stains. I've got OxyClean Versatile Stain Remover. It works on over 100 stains, and it's America's number one stain fighter additive brand. It's color safe and chlorine-free. So I use it on whites, colors, and dark fabrics. And OxyClean isn't just for laundry. Mix it with water for use all around the house, kitchens, bathrooms, and even floors.

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35:27Fully integrated, easy to use, and built to grow with your business. Thousands have already made the switch. Why not you? Try Odoo for free at odoo.com. That's odoo.com. um the epstein piece is a uh comparatively small portion of the book which uses leon black both to track his uh biography but also to track the way that private equity has changed uh over the years and this is something we've been um touching on some in the show as well in particular how large the how large private credit is and um you know some potential risks that could pose to the economy We could put F5 up on the screen. I think things have stabilized somewhat, but the private credit market was under stress recently.

36:15This was a recent article that says they're marking down more loans. Can you explain for people who are total laymen, what is private credit? What is the role that it's filling in the economy? And what are some of the risks that people are concerned about here? Well, that's a great question. And thank you for asking that. You know, people like to talk about Jeffrey Epstein and Leon Black all day long, which I understand. But there's definitely more to this than that. And the bigger risk that exists is in this explosion of private credit. So long story short, essentially after the 2008 financial crisis, the big Wall Street banks are now regulated by the Federal Reserve.

36:56And then with the passage of the Dodd-Frank law, basically there were serious restrictions on the kinds of loans they could make. at the big banks and how long they could hold them on their balance sheet. Basically, they went from being in the storage business where they could hold these loans on their balance sheets for maybe, in fact, the duration of the loan, which often would be five or seven or 10 years, into the moving business where they had to syndicate those loans and move them off their balance sheets because the Fed and Congress was worried that that the last financial crisis in 2008 was basically exacerbated by the big Wall Street banks and the crappy assets they had on their balance sheets.

37:41And they wanted to say, look, no more of that. So out they go. You can't hold those loans anymore. You can't really make as many of those loans as you did before. So that created a vacuum in the market, which firms like Apollo and Blackstone and KKR and a whole rash of other private credit providers stepped in to fill. So for many years, Apollo was just like a private equity firm. It had its own variation of that. But right now, it has a trillion dollars of assets under management,$150 billion of which are private equity, and$850 billion of the$1 trillion is now private credit. So what is that?

38:25Basically, it's just so that was an explosion. And, you know, now the private credit market is said to be$40 trillion if you include investment grade credit,$2 trillion if you include just focus on sort of riskier loans, junk bonds and other kinds of mezzanine financing. But essentially what Apollo is now doing through the capital that's generated from its insurance business called Athene, which is an annuity provider, which annuity is basically a long term obligation that the insurer owes to people like you and me who, you know, want a fixed rate of return on essentially their for their retirements.

39:16that they are taking that capital and investing it by and large, not completely, in the senior secured debt of companies that it's lending to. And that's become a very big business on Wall Street that most people don't, as you said, don't understand or recognize because it's grown up in the years after the 2008 financial crisis and intentionally because of the architecture of Wall Street that the Fed has imposed on the big Wall Street banks. So now Apollo and Blackstone and KKR are stepping into the void that was created in the aftermath of the 2008 financial crisis. And in many ways, these firms have created a sort of symbiotic relationship with the JPMorgan Chase's and B of A's and Goldman's and Morgan Stanley's of the world where the Wall Street banks have the relationship with the companies, get paid for that relationship, but then essentially hand off the asset, which is this loan to Apollo, which then is happy to hold it and happy to syndicate it out to other investors.

40:24So it's this flywheel, as they like to say on Wall Street, an expression I cannot stand, that sort of makes the whole thing work. And the question is, have we created a whole new potential set of risks that we're not really prepared for and don't understand? And I think that's the open question. And that's what that article that you put up goes to, because what these firms have done and what the SEC and others and the Fed has beginning to allow is for these syndicated loans, these private credit loans to be sold to individual investors through publicly traded vehicles called BDCs, business development corporations, that limit to 5 % a quarter the amount of money that people can take out.

41:17So when some of these loans started going bad, the retail investors were wondering, hey, I want my money out. But the next thing you knew, they found out that they could only get 5 % of their money out at best. And so they started clamoring and going to the media and saying, hey, what happened here? I didn't read the fine print. How can I not get my money out? Well, that's what they've signed up for. Makes sense. Yeah. It's usually not a good sign, though. when you go to what's essentially a bank and, hey, can I have my money back? And they're like, whoa, not today. It doesn't work like that. How about later?

41:50That's right. But of course, there's no ATM at Apollo. Right. You can't go to ATM or Athene and get your money out. You can get it out. It's going to be a penalty. But you basically signed up for seven or 10 years. Not like with an ATM, you get your money out the instant you want it, which is what happened with Silicon Valley Bank. Why that went down the tubes a few years ago is because people took their money out instantly from the ATMs and they had all these long-term assets. They couldn't liquidate fast enough except at a discount. So we'll see if the same version of that has been created here.

42:27That's the big mystery. That's the new thing on Wall Street that's been created that I wanted to explore in the book that people don't really fully understand yet and hasn't been fully tested. Well, sir, we really appreciate you joining us. We encourage everybody to go read the book. Obviously, you're very thorough and you have a deep amount of knowledge here. Extraordinary access here to Leon Black and to kind of the history of how this all came to be. So we appreciate your time. Thank you for joining us. Thank you for having me. And I apologize about my camera angle. All good. We made it work.

42:58OK, thank you. Thank you. Thank you both for having me. Thank you guys so much for watching. We appreciate it. Great Wednesday show for everybody tomorrow. We'll see you then.

43:23This episode is supported by FX's The Drop, a snowfall saga. Wanda and Leon are back, but this time they're chasing a different kind of legacy. As West Coast rap begins to take over 90s Los Angeles, Wanda is betting on a new generation of artists. But in a city where every opportunity comes with a price, they'll have to decide what they're willing to risk to leave their mark. FX is the drop. Premieres September 8th on FX and Hulu. Hey, did you know Dietzen Watson has been family owned for over 85 years? To us, that means it's more than a business. It's personal. We make our premium meats and cheeses the right way, even if it's slower or inconvenient or hard, because that's how you get the highest quality.

44:08If it's not good enough for our family, it's not good enough for yours. And while others cut corners, we keep raising the bar. So if you see the Dietz & Watson name, you'll know every slice has my family's seal of approval. Dietz & Watson, it's a family thing since 1939. This episode is brought to you by Choiceology, an original podcast from Charles Schwab, hosted by Katie Milkman, behavioral scientist and author of the best-selling book How to Change, Choiceology is a show about the psychology and economics behind our decisions. Each episode shares the latest research in behavioral science and dives into themes like the power of self-control, shaping your mindset for success, navigating new beginnings, and why starting over can feel so hard.

44:56Katie talks to authors, athletes, Nobel laureates, and everyday people about why we make irrational choices and how we can make better ones to help avoid costly mistakes. Listen to Choiceology at schwab.com slash podcast or wherever you listen. This is an iHeart Podcast. Guaranteed human.

From the publisher

Krystal and Saagar discuss Fetterman staffers expose insane behavior, top billionaire paid millions to Epstein.

 

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