BONUS POD: Ari Talks Trump Tariffs, Fed, Bubble with Goldman Sachs' Lloyd Blankfein

15:12Lloyd Blankfein:I didn't know what it was. I hadn't seen it, but I thought it would be kind of a cool thing to live in a real house as opposed to an apartment with grass in front and not like concrete and broken glass.

15:22Ari Melber:That would be a step up to Lloyd Blankfein, get out of the apartment.

15:25Lloyd Blankfein:You know, so for me, it took this. It was I wanted to go to an out of town school. That was what that to me was it. And so a lot of what I was doing, a lot of motivation, a lot of my work ethic came from being motivated to get into an out of town school. And Harvard's not in Brooklyn. Harvard wasn't in Brooklyn. Now, that was a reach. I didn't know, you know, it was a brand name. I'd never seen it before. I applied to it, but I went to a high school in a different neighborhood to their college night. There wasn't a college, shockingly, there wasn't a college night at my high school, which was a school that was on triple session, means they emptied the school out and had three different groups go to the high school because it was overcrowded for the building.

16:08Lloyd Blankfein:and there was a booth and it was man, different booths were for different schools. And there was a Harvard college booth and whoever was sitting about it, I thought it was a, it was probably a young kid, but at that point it looked like an old guy to me. And he chatted with me and he handed me an application and I, and I filled out that application like you'd fill out a landing form when you were going through immigration or something. It asked a question and I answered And I realize now that these were essay questions, but I didn't deal with them as, you know, something that you go home and write and rewrite.

16:39Lloyd Blankfein:Fifteen times I answered it. And to the credit of Harvard and my eternal gratitude, they took me. By the way, I didn't get into every college, but I got into Harvard. I had very good math scores and not very good verbal scores. I don't ever think I read a book through cover to cover in high school since it certainly became quite bookish. But anybody who knows me would consider me pretty verbal. Yet I didn't. Yeah, but that developed.

17:10Ari Melber:Now, do you remember the rap group Tribe Called Quest?

17:13Lloyd Blankfein:No. They were. Why don't you hum a few bars? Well, I got some for you. OK.

17:18Ari Melber:Because reading your book, they have a couple songs. One, they say, back in the days on the Boulevard of Linden, we used to kick routines and the presence was fitting. They have another hit song where they say, Linden Boulevard, represent, represent, when the mic is in my hand. And I'm never hesitant.

17:34Lloyd Blankfein:Well, that was the big street, Linden Boulevard, where I lived.

17:36Ari Melber:So it's striking. That's in the culture. You had your road out. Other people had their road out. But you were coming up in a place that was obviously diverse. And a lot of people, however much they loved that neighborhood, knew that they were not necessarily reaping the benefits of America.

17:52Lloyd Blankfein:I wish I'd thought of it at the time, but I think I was pre-rap.

17:55Ari Melber:Yeah, but you were. They came later than you. Yes, yes, yes. But but that neighborhood looking at that now, you feel like, wow, I made it out and I would have not had that motivation had I started somewhere else.

18:08Lloyd Blankfein:I think that, you know, that's certainly right. Now, that's not to say, you know, there's always probabilities and statistics. I think, you know, I'd like to say that I'm representative of what anybody could accomplish if they're properly motivated. But, you know, something if you're properly motivated, you still have to be lucky and you still have to get opportunities and you still have to, you know, by random sheer chance run by that little booth at that high school that I wasn't even going to, and it has to work out, and somebody had to pick up my application, and somehow it thought, you know, this is a quirky kid.

18:38Lloyd Blankfein:Let me take a risk on him. So, you know.

18:40Ari Melber:And you kept pushing, which comes through in the book. So I'm going to read from the book. You say after law school and all of that, right, which is already a ways from where you started, You get to a good firm and then find out that they're basically pushing you over to a department out of your expertise. They're placing you last. And you write, well, under the circumstances, I couldn't accept that job. I had some pride without delay. I got back on the phone, too. And you mentioned a different firm and try to go back to a different offer. And you write looking back on law school. I can see at that stage I was still holding myself back, not aiming for the law review or a clerkship or pursuing a more exciting specialty.

19:19Ari Melber:Why was I underestimating my ability, underperforming my smarts? The truth is that coming from where I did, I still felt like an imposter. There was a chip on my shoulder, always looking for someone to knock it off. And in certain rooms I felt and still feel, and you're writing this book now, still feel illegitimate. Other people are the real grownups. Tell us about that. And for somebody watching who might feel like that, do you have a tip that comes out of that?

19:47Lloyd Blankfein:You know, again, I'm not even sure that's such a bad thing. Look, it depends what you're going. Is that the formula for having the happiest life? Not necessarily. Probably not. Probably not. I always joke, and I say it in a different context. I've known people. Look, I've been around. I've been top of a very, you know, I went to great schools, big firm and everything. I've met everybody in the world. The mythology is gone, you know, the mystique. And I met a lot of people who've done very well, including, and I used to say, so-and-so, I envy that guy. That guy was probably elected most likely to succeed from kindergarten on.

20:33Lloyd Blankfein:You know, that probably never had an insecure moment in his life. And by the way, I know people. I'm not going to name them. I could name them.

20:39Ari Melber:You're talking about Thune or Diamond?

20:40Lloyd Blankfein:No, I'm talking about people who are in the press now, household names, and you look at them. But by the way, you also never know. I don't know what happens when they go home and they, you know, cringe in the corner and their wife has to give them smelling salts. I don't know. Or their husband. I don't know. So you never know what somebody else. But I do know people who look like they've been most likely to see their entire lives. I wasn't that person. And at the end of the day, what's the best formula for, you know, I say this at times to my kids and other people. You know, you get, you know, this is one of those poker hands where you can't give the cards back that you don't like and get new cards.

21:15Lloyd Blankfein:These are the cards you have make the best of it. I am the way I not to quote Popeye, but I am what I am, what I am. Boop, boop, as they say in the cartoon. Bars. Bars, yes. And so that's what you that's what you have. But sometimes I look at people who are so secure and just was at the top of their class all along, never had a down moment. That wasn't me. And, you know, maybe it's paid off in a lot of ways. It made me much more empathetic to other people. You know, at the beginning of this conversation, we had, you know, what's the economy? And most people who do what I do would tell you how great the economy is doing.

21:51Lloyd Blankfein:But I'm really thinking about that. Who's the economy doing great for? And the bifurcation of outcomes for different parts of the, you know, for different categories. And you're saying partly because of the neighborhood you came from. It's because of where I identify with. You know, I was a CEO of a very big company. I get in a car in the backseat and a driver drives off. I go upstairs and I say, gee, I wonder if it's cold in the car that I just left two and a half hours ago. I think of other things because that's who I was.

22:24Ari Melber:Well, you say you don't get to turn your cards back in. That's certainly the case when the market drops. And I want to take us just back in the moment because it can be easy to forget. History has this way of flattening things. We just put together briefly what it started to feel like during that crash.

23:07Ari Melber:its foundation. History in the making. The Dow plummets more than 777 points, its biggest one-day point drop.

23:16Lloyd Blankfein:You know that Kramer was Harvard College, Harvard Law, and Goldman Sachs, just like me. Yeah. Yeah. How do you like that? How do you like that? And we go to the same barber.

23:26Ari Melber:What was the day you remember appreciating that the risk was rising? Because it was clearly before the crash based on Goldman's book?

23:34Lloyd Blankfein:Oh, way before the crash. And one of the things, look, you know, I don't want you to think I'm overly humble. I think we did very well in it registering. We saw signs of it early. Why did we see signs of it early? We mark our balance sheet. We mark our assets. What does that mean? Everything we own every day, we try to, we figure out what the price of that is worth and record that. And so we do that every day. And we're very, very, very, very rigorous about that. Not everybody was as rigorous as we were. And I will tell you, the first day I had an inclination that something was happening. I was sitting in a movie theater with my wife and doing what I always do when I was watching a movie theater in those days.

24:13Lloyd Blankfein:I was going through my P &L with, you know, with what then was a BlackBerry on a backlight pretending to watch a movie. And, you know, one of the things that we had, one of the assets that We had that on a wild day would move hundredths of a percent, aces points, hundredths of a percent, tiny amount every day. And it had moved 8%. And I go, whoa, that's not supposed to happen. So I said, excuse me, got to get some popcorn, ran to the telephone and start calling. What's going on that?

24:45Ari Melber:And let me just slow you down because a lot of people imagine you got this giant bank at 1.30 ,000 staff. They don't imagine. Sorry. Yeah, go on. They don't imagine that you are at whatever time at night going line by line and then noticing something that apparently had not yet been absorbed by the market.

25:04Lloyd Blankfein:Well, let me tell you, and this is not just me. This is, you know, people who run big companies. I don't know what you think people do. But when you're accountable and it's consequential, all these people are depending upon you. And if anything goes wrong, they haul you in and your shareholders will want to kill you and everything. That's quite an incentive to stay on top of things. Now, not everybody does it the same way or the same thing. If we were manufacturing jets, which we're not, I'd be walking through the factory. In our case, we're in the financial business, and I go over numbers all the time.

25:34Ari Melber:So you look at that 8%, you get on the phone, and you do what?

25:36Lloyd Blankfein:I go on that, and I start making phone calls, and I say, what's going on here? And there's no good answer to that at that point, because this is like in a movie when you're watching a Western, and the horses in the corral are starting to whinny. You know, and you see a little cloud on the horizon. And you in the audience know something big is going to happen, but the people on stage don't. I was, I kind of started to know this is right now. I've had that feeling before and it passed over. And so, but you react to it. And we started getting together and what's going on here. And a few more of those incidents start to happen.

26:10Lloyd Blankfein:And we put out, you know, the word in the organization. And when I say that's not casual, we instructed people, let's get closer to home. So in other words, everybody has a lot of different parts of our firm. In New York, in Japan, Singapore, China, everywhere else in different assets, in stock market, bond markets, commodity markets. We trade everything and we trade everything all over the world. Do your business, stay close to your customers, but try to keep your risks closer to home. If you're being asked by your clients to take an extraordinary risk in something, try to hedge it quickly. So you get closer to even, closer to neutral as much as you can.

26:53Lloyd Blankfein:And that's how we tried to run ourselves. Still doing our business, still buying from people who wanted to sell, selling to people who wanted to buy. We would get extraordinarily risky at times in service of our clients, but we very quickly try to bring it back to home. And that's the instruction that went out. And then we started to operate that way. And it started to get worse and worse and build and build. And I would say the thing that helped us is that we were dealing in reality. We were marking to market, looking at the valuation of every day. Some people in our firm would argue and say these securities, these mortgages are worth more than you think.

27:31Lloyd Blankfein:The people in the control department of the firm that do the P &Ls, they're getting it wrong. This should be a higher price than they're ascribing. And we go to the trader or someone who had that position. You know something? Maybe you're right. Go sell something and prove that you can get the price you think it's worth. And then they couldn't do it. So then we mark it down again. And if you mark it down again, it becomes easier to sell because you're asking everyone for a lower price.

27:56Ari Melber:So in simple terms, you would call. Other people didn't want to be called. They just wanted to say, I got a good hand.

28:01Lloyd Blankfein:We ran our business tighter. We marked ourselves to market. And because we did that, we didn't know where it would go to next. Half our firm wanted to buy more of whatever was going down. Half the firm wanted to go short, sell more. And we didn't know whether to go up or down. But at this particular time, given what was happening in the market, illiquidity, and going back to your original question, the breakdown of efficiency in the market. Because the people who owned it couldn't sell it at the price they thought it was worth. And the people who wanted to buy it couldn't buy it at the lower price.

28:40Lloyd Blankfein:The owners wanted more. The sellers, you know. Yeah. And you couldn't get to that. And so we just, to me, that was the reality. And other people didn't do that and didn't have a reality.

28:52Ari Melber:So you explore this in the book. Yes. There's two macro big stories here, two big narratives. One is the financial data and results that show you led a firm that handled this better than most other competitors. Came out ahead. that was good for anyone who'd invested in you, that's kind of your job, landed with Warren Buffett money, that kind of outcome, and there was positives for that, and also became seen as what's wrong with Wall Street and associated with a lot of the critiques.

29:28Lloyd Blankfein:And not just Wall Street, us in particular. Sure.

29:30Ari Melber:Let's not... Right, but you became the face of that, as opposed to perhaps other firms that were so irresponsible, they literally ceased to exist. they collapsed. I'm going to show you. Go ahead.

29:40Lloyd Blankfein:Sorry. No, good. At that time, there was no value in going after firms that were either bankrupt or lost$50 billion. They're gone. They're gone. They're gone. So let me show you.

29:50Ari Melber:We had done too well. So we, yeah, well, we want to show accurately both pieces of this. Sure. The first is the positive. People, especially those close to the market and Buffett himself, saying not just Goldman, but Goldman under your leadership worked. Take a look.

30:05Lloyd Blankfein:This is the part I like.

30:07Ari Melber:Blankfein is an incredibly smart and very politic guy. Blankfein has a charitable side. Records show the foundation he runs with his wife donated $11 million to Harvard. One of the most important people, the financial firm specifically, and the business world in general, the CEO and chairman of Goldman Sachs, Lloyd Blankfein. Unequivocal and by praise of Lloyd, I think he did a terrific job in bringing the company through

30:32Lloyd Blankfein:a crisis.

30:34Ari Melber:So you have that associated with those results. And then you have a lot of other people who represent individuals who have been chosen for leadership and power, their constituents. And they're saying some of this. A dangerous and growing inequality and lack of upward mobility that has jeopardized middle class America's basic bargain. The Justice Department on Monday announced a$5 billion settlement with Goldman Sachs.

31:02Lloyd Blankfein:Because concentrated money and concentrated power are corrupting our democracy. The most powerful group of institutions in our country is engaged in fraudulent activity. Goldman Sachs now has enough people in the White House to open a branch office. Yeah. Who's right? Well, the world was like, listen, I'll tell you, let me summarize it for you. It was almost like in time bound. It started out as how did you do it? You know, magnificent. You hedged. And by the way, if every bank had done this, nobody would have, there wouldn't have been a banking crisis. We might have had a recession, but it wouldn't have been a banking crisis.

31:46Lloyd Blankfein:It was a kind of worship. How did you do it? And then it became how did you do it? Right.

31:51Ari Melber:And that's how your point one, though, is you say that the financial data would support the view that if more banks operated like Goldman at the time, you wouldn't have had the level of bailouts. Oh, yeah.

32:02Lloyd Blankfein:Wouldn't have the bailouts. You might not have had the intensity of a crisis. One of the things about this crisis, it was a lot of recessions, but this was a very big crisis, partly because it was also a banking crisis. At the end of the day, governments don't lend money to people. Central banks don't lend money to people. banks lend money to people. If the government wants to give money to people, they don't call you up and lend it to you and they don't give you a mortgage. It's financial institutions that do that. The financial institutions were very distressed. And because of that, there was the transmission mechanisms, the way in which government support and government policy could get out into the general public was impaired.

32:43Lloyd Blankfein:If you gave weak banks at that moment money, they'd hold on to the money to improve their balance sheet, to make themselves stronger, to recover, and it wouldn't get into the public. And that's why that - That's part of the catch-22. And that's part of the crisis was so dragged out. But when Sanders and Warren - But we wouldn't have had a banking crisis if the banks had run themselves better.

33:03Ari Melber:And when Sanders and Warren say this was a Goldman problem, you say -

33:07Lloyd Blankfein:It was singularly on Goldman, because frankly, we had done several reasons. We had headdressers. By the way, we didn't make money in those years, but we didn't lose money. And if you were looking, there was legislation that that particular part, that they wanted to pass and they were looking for symbols of it. You know, go get a mortgage from Goldman Sachs. Go to your Goldman Sachs local branch office and make a deposit. We were a wholesale bank. We did not have a relationship with the general public. It was Goldman Sachs. The illusion that was made there, Elizabeth Warren is saying there, you could have a whole government out of Goldman Sachs.

33:44Lloyd Blankfein:The Treasury Secretary was from Goldman Sachs, the economic advisor. So there were a lot of Goldman Sachs people in government. By the way, both parties, Bob Rubin, Democrat, Hank Paulson, Republican.

33:58Ari Melber:It's remarkable. You bring it up. We pulled the names. It's a very bipartisan thing.

34:04Lloyd Blankfein:By the way, not just America. The former prime minister, you know, the current prime minister of Canada, the former prime minister of London. Take a look.

34:11Ari Melber:I think we have all of the government veterans, primarily who've left Goldman Sachs and gone into government.

34:17Lloyd Blankfein:We won't have all of them. It's very...

34:18Ari Melber:Well, we won't have all of them, but we have many top ones. When you look at this, this is a point of pride, or at some point it raises these questions that the public has about...

34:27Lloyd Blankfein:Or go out of the country, the current prime minister of Canada.

34:30Ari Melber:Is this a point of pride for the firm, or does this at some point become an issue?

34:33Lloyd Blankfein:Of course it is. Well, it's a source of pride. At some point, it became an issue for other people. We tended to hire people. Look, the people in our firm do very well, make a lot of money. But if all they want to do is maximize their income, they could go somewhere else and make money. There are hedge funds and boutiques and other places. People in our, we tend to hire people who are public service minded. They have their early career and they go into government. I know there will be people who always talk about revolving door. Our door really didn't revolve. We didn't hire people from government.

35:03Lloyd Blankfein:Government hired people from us, by and large. There's a few exceptions where people went into government and came back, but very few. Largely, people get hired from us. And it's not so much that we, a little bit, it's part of the ethic of the firm and the culture of the firm to want people to go into public service after they've run their course at the firm. You're supposed to have other chapters in your life after you leave the firm. But by and large, those are the kind of people that we tend to recruit. And that was always a source of pride. And by the way, it stayed a source of pride. But if you're looking, if there's a crisis, look, if you're going to be a samurai class or something, I'm just going to make a wild analogy here.

35:45Lloyd Blankfein:And you're going to have, you know, a source of pride and be well compensated and do this because you defend the country and you don't do a good job at it. Everyone wants to get you. And there was an economic crisis. And if you're looking around, you know, certainly the banks were, you know, could have done a better job. But I'm saying why specifically Goldman Sachs when I think it was because there were it was because we didn't lose a lot of money at that point. And because we were a mystery to people, because, again, we're not a consumer firm, not a retail firm. And so we didn't have that relationship with them.

36:29Lloyd Blankfein:And another name for consumers and retail are citizens and taxpayers. And I would say, shame on us. A big mistake that we made was thinking that we did not have to let people know what we did. Our ethic was always to stay in the background and have our clients. We would advise companies, and the companies were in front. We never explained. We never went on TV. At some point, I went out there, and I said something joking. I took it seriously. I once said to a—

36:58Ari Melber:Yeah, you write about it in the book that you said it was a quip, and you're known for some quips about you're doing—

37:02Lloyd Blankfein:I said to a reporter who interviewed me for two hours and then was coming to interview other executives on Goldman Sachs for a feature they were writing. And as I was after the day after he interviewed me, he's waiting in the anteroom to interview someone else. And I'm walking to the elevator. He sees me walk by and he says, just one more question, Lloyd. I said, I can't. I'm late. I'm running off to do God's work. And I kept on going. And he printed it as if it was some ecclesiastical statement that I was that I was representing that I was, you know, it was silly.

37:33Ari Melber:But you were joking. You weren't trying to make a statement about the religious value.

37:36Lloyd Blankfein:If I wasn't joking, that guy would be in even bigger trouble. if I had that as close a relationship.

37:41Ari Melber:You mentioned inequality, and this is much broader than the financial sector or banks. The CEO pay across the entire economy has risen by over 1 ,000 % from the 70s, and worker pay is up only about 26%, not keeping pace with inflation. Is that a market failure? Is that a problem?

38:03Lloyd Blankfein:I think it's not a market failure, but it may be a big problem because the market is the market, And I hate to sound religious, having just talked about an ecclesiastical statement about it. But, you know, things are unique. You know, these days, it wasn't always this. I was always a football fan. But it seems to me these days there's a general consensus that if you have a great quarterback, you have a chance of winning. And if you don't have a great quarterback, you don't. And so what's a franchise quarterback worth when the difference between success and failure is so commercially consequential to a team?

38:37Lloyd Blankfein:And look at how those are getting bid up. And I think the people who run these firms are very, very consequential. And the difference between getting someone who's very, very good with seven varies and very good with three varies could be the difference. You know, it'd be a huge difference. And so people are paying, you know, people pay up for that. So that's the market. Is it a problem? Yes. Inequality and distribution. Again, as I said, the economy in general has to do two things, create the wealth and distribute it according to values. And you look at that. And in good times where everybody's being elevated, there tends to be a relaxation of concern if somebody is getting elevated more.

39:17Lloyd Blankfein:But at times when people are just getting by, it's infuriating to see that people are getting spectacular multiples of it, even if that's what the market is compelling. So I think it is a political problem today and a social problem. But one has to pay a lot of money for NFL quarterbacks, and people pay a lot of money for effective CEOs.

39:39Ari Melber:Let me ask you philosophically, because it's very clear that you're bright, and all these other bright people say that you're bright. You have Harvard Law, and you run this thing, and now you're retired. philosophically, is there a level of wealth that one person should hit their ceiling, whether it's a billion or 10 billion or a hundred billion or an era where we hear we may have the first trillionaire? Is there some level that you see that as a, as a philosophical matter that says it's a limit?

40:09Lloyd Blankfein:People are different. They're people, look, the people who are killing themselves the most, I think the most competitive people in the moment today are these hyperscalers. What are hyperscalers? The meadows of the world, the biggest companies of the world who are competing like crazy. Who's going to be the first to artificial intelligence? Who's going to be the social networks? I'm glad these people are still competitive and still want to win and still want to make up. What do they do with their money at the end of it? What does Bill Gates do with his money? A lot of people give it away. You've given some away.

40:40Lloyd Blankfein:That's the only thing you can do with the money, they're competitive. They make it. I don't want them to be capped. I do think that there's social pressure on everyone to be philanthropic. You get judged by that. And at the end of the day, you're not going to change your lifestyle at levels way, way, way under what they're doing, but they're competitive about it. And the only thing you can do with that money at the end of the day is give it away. And that's what they're doing. The idea of a cap, it's a phony thing. You want to continue to incentivize the best people. In different cultures, there are different incentives.

41:15Lloyd Blankfein:People work very hard in China. Nobody makes that much money, but the currency that they're dealing with is fame, acclaim, status within the party. If you're a Nobel laureate, your currency is whether you get a Nobel Prize or not. You don't get fame and acclaim and you don't get a Nobel Prize when you're wealthy and you create a business that generates jobs. Generally, you get hauled in front of Congress and have the heck kicked out of you. The only thing they get is the ability to endow large foundations and give away the money. I'm glad they're still incentivized, even after they made a fortune, to keep on going.

41:54Lloyd Blankfein:I'm glad Elon Musk is somehow incentivized to keep on going, even though he's going to end up a trillionaire and he still keeps on going. I'm glad of that. You can't take it with you. Eventually, even he probably, I can't prove this, but even his life will be over at some point. And by then he will have undoubtedly given away his money. But the fact of the matter is very few people in the world. And by the way, in every era are have make an outsized contribution to the advancement of wealth creation and society. Again, there are different kinds of currencies, different kind of metrics for this.

42:31Lloyd Blankfein:So I wouldn't put a cap on anything. But our culture also does a very good job of pressuring people appropriately, I think.

42:39Ari Melber:You think the pressure on billionaires is good?

42:41Lloyd Blankfein:To give money away? Yeah, I think it is. Look, the first thing, the first conversation I had, and by the way, everyone else did when you make partner at Goldman Sachs. The first thing, you know, you meet with the partner who is like the minister of the interior of the firm. And he's laid out some things that you should and shouldn't do in your partner. And one of the things that he ticked in is we are now going to set up a private foundation for you and we expect you to use it. To use it, yeah. And we expect you to have a balanced life, including making contributions to your society, your environment, your neighborhoods, away from the firm.

43:12Lloyd Blankfein:And there was this old glib statement. It's a little bit dark to say to a young guy, but I remember he said it to me. He said, and it should be such that when they write your obituary and if it's nine paragraphs long, no more than three of those paragraphs should be about your tenure at Goldman Sachs. In other words, you should have done other things. Yeah.

43:29Ari Melber:And you discuss that in the book and it speaks to the point we discussed earlier. You have people who are more well-rounded rather than being obsessed.

43:35Lloyd Blankfein:Look at the people whose pictures you put up on that screen. What does Hank Paulson took? I mean, I don't want to speak for him, but I think he took most of his wealth and put it into an environmental foundation. You know, he did that. Barbara, all these guys went into public service. In other words, people in that financial crisis, when you see Elizabeth Warren there and Sanders there, they made it almost a pejorative that those people left their high paying jobs at the height of their powers and their career and went into public service. And that somehow got turned into a pejorative. I'm incredibly proud of those people.

44:11Ari Melber:Let me go to lightning round. Some news items. Sure. And some fun. Oh, fun. I'm in fun deficit. On the news. So this is lightning round. The Supreme Court limits the president's tariff powers. This is good, bad. And the market thinks what?

44:29Lloyd Blankfein:I think separating into two pieces, it's good that there was a limitation because I believe in the republic and separation. I believe in the Constitution, separation of powers. To me, that's what that case was about, is does the does the presidency, the executive have unlimited power? No, certain things belong to the Congress and the third branch of judiciary decides that that's good. The other substantive question, should we have tariffs? That's a different question. And should someone wield those tariffs, the right authority wield it? I think should under most circumstances, although it shouldn't be crazy and change every day and it should be somewhat predictable, but tariffs serve a useful purpose.

45:09Ari Melber:The president has two Fed officials under investigation, widely reported to be baseless. This is appropriate use of power or bad?

45:19Lloyd Blankfein:Bad, bad, bad, bad, bad. Anytime the Federal Reserve, you know, we borrow money. Other people are our creditors. Yeah. The way the U.S. defaults to creditors is not by not paying because we print dollars. We can always pay back dollars. We have printing machines that pay back dollars. How does the U.S. default potentially? by inflating the currency or that the dollars we pay back aren't as worth as much. The protector of the dollar, people who keep the purchasing power, who keep inflation down, is the Fed. If you attack the Fed, the people who lend us money are either going to stop lending us money or else they're going to require a higher interest rate.

45:57Lloyd Blankfein:So undermining the prestige and power of the Fed is just a bad thing.

46:02Ari Melber:Paramount beats Netflix to get Warner Brothers. did they get a good price and is it a good deal?

46:08Lloyd Blankfein:Those guys are closer. I mean, I'm not afraid to answer a question, but that was the market clearing price. And there was at least one other entity that was willing to pay just a smidgen lower. So at least two people who know a hell of a lot and are in that industry thought that was a good price. The good price depends on synergies and whether these companies, when they're pushed together, you can run them more efficiently, that one plus the cost of one and the cost of the other doesn't add up the cost of two, less cost, and therefore it's a much more efficient organization and will earn the increased price that they paid.

46:43Lloyd Blankfein:And they believe that and their bankers believed it. And I'm not close enough to give you a competing opinion.

46:50Ari Melber:Betting markets are growing. They are a good thing. They're like the stock market or they're dangerous?

46:55Lloyd Blankfein:I think they're both. I think they're good because it allows people to hedge certain risks that are worth hedging, you know, because generally you want to do your business. And if you're afraid that this thing is going to happen and it stops you from doing your very socially constructive thing, you can hedge, put a bet on and hedge the way that risk. But if it just becomes such a distraction and it becomes, and you're betting on things that are not socially useful, then it could be, it's like asking, there's a whole casino industry and it's a big industry. It's good entertainment for a lot of people.

47:29Lloyd Blankfein:It's cheap entertainment. But for certain people, it's not only distractive, it's really counterproductive and it destroys, you know, certain kind of addictive personalities in their lives. Yeah, you put that.

47:40Ari Melber:No, you put that clearly. You know, this is going to be hard for you now. The rest are in one sentence.

47:46Lloyd Blankfein:Oh, my God. I've never said one sentence on anything.

47:48Ari Melber:The first rule of investing is.

47:54Lloyd Blankfein:stay within your capacity to lose money don't go beyond it

47:58Ari Melber:the most underrated risk right now is

48:05Lloyd Blankfein:people investing in illiquid in illiquid assets and assets that can't be easily sold stocks or bonds always for me over the long-term stocks

48:18Ari Melber:your response in a sentence to these maxims. Past performance does not indicate future results. Always true. Time in the market beats timing the market.

48:37Lloyd Blankfein:Impossible to predict when things that you think will happen will happen, so stay in, don't get out, it's hard to get back.

48:45Ari Melber:Buy the dip.

48:48Lloyd Blankfein:Usually true as long as you have a long time horizon.

48:53Ari Melber:Never outsource your risk management.

48:57Lloyd Blankfein:Never outsource your risk management and spend more time on it than you think you should.

49:02Ari Melber:There is no price that can guarantee something is under or overvalued.

49:11Lloyd Blankfein:value is in the eye of the beholder and the best indication you have is the price at which it clears at that moment what if the price is zero if the price is zero what your pricing will not be allocated efficiently and chances are there'll be a lot of waste okay that makes sense it's not

49:32Ari Melber:that anything can happen it's that given enough time everything will happen right and so therefore

49:38Lloyd Blankfein:Therefore, you should always believe that events that you think are low probability are a higher probability than you think.

49:48Ari Melber:Too many people know the price of everything and the value of nothing.

49:56Lloyd Blankfein:That's more sociology than market. That's more psychology than market.

50:01Ari Melber:If you want to grow in an organization, you need the support of your subordinates, not their grudge and cooperation.

50:12Lloyd Blankfein:You will advance when the people under you are not just responding to you reluctantly and narrowly, but have thrown in with you and really want you to succeed. The people, and that's much more important than getting the support of the people above you. If you're good, the people above you will want to use you. You know who said that? Yes, a very wise philosopher.

50:35Ari Melber:Yes, in your book. Finish this sentence. Back then, I wish I knew.

50:43Lloyd Blankfein:I wish I knew how senior and important I was going to be because I would have been a lot nicer to people on the way up and I wouldn't have had to spend so much time apologizing to them later.

50:56Ari Melber:Honest. When it feels like you can party, like it's 1999, you should.

51:04Lloyd Blankfein:You should go back to the question on risk management and spend more time going over what you have on your balance sheet to make sure you've you've you've audited everything and that you've you've narrowed down and been very conservative about your risks.

51:19Ari Melber:So even at the high, that's the time to double check.

51:21Lloyd Blankfein:Especially at the highs. You should, when you're feeling good and everybody's popping champagne corks, you should say, excuse me for one moment and go back and look at what's going to go wrong.

51:31Ari Melber:The best thing about money is?

51:35Lloyd Blankfein:That you don't have to worry about money. The worst thing about money is? That it robs you of your motivation. The best advice you've gotten? The best advice I've gotten is don't accept commitments just because they're far off on your calendar, because eventually they'll roll around and you'll regret having agreed to do them.

52:04Ari Melber:When people tell me something is impossible, I... Try to get help. For fun. I like to...

52:19Lloyd Blankfein:I like to read. And I like to learn things that I don't know very much about.

52:28Ari Melber:Final three. Failure means...

52:35Lloyd Blankfein:Failure means I now have the opportunity to prove my resilience, which is the most important characteristic to have. Success means... Success means that you have to have higher objectives. Reaching the summit means? Reaching the summit means that it's easy to get used to and you better work harder to sustain your tenure at the summit.

53:08Ari Melber:Lloyd Blankfein, thank you for your time. The book is Streetwise, Getting to and Through Goldman Sachs. Thank you.

53:15Lloyd Blankfein:Appreciate it very much.

53:45Oh, oh, oh, oh.