On a snowy day in January, BlackRock CEO Larry Fink joined Andrew Ross Sorkin on CNBC’s Squawk Box for an interview in Davos, Switzerland, where corporate and political leaders gather for the annual World Economic Forum. While the segment mainly revolved around the BlackRock CEO’s plea for Donald Trump’s SEC to make it harder for activist shareholders to take on corporations via proxy vote, Sorkin couldn’t resist asking for Fink’s take on the booming cryptocurrency ecosystem.
“Are you planning on issuing either a meme coin, ETFs, or anything like that, now that the animal spirits seem to be very much alive?” he asked.
“I think the Sorkin coin,” Fink replied. Two hours later, Sorkin was watching the brand-new cryptocurrency, minted by some enterprising meme coiner, soar by millions of dollars. “It was wild,” he recalls.
At the time, Sorkin was finishing his latest book, 1929: Inside the Greatest Crash in History—And How It Shattered a Nation, an extensive account of how Wall Street and the US government dragged the country into the Great Depression.
So what’s the contemporary analog to the old stock pool? “I think Reddit,” Sorkin says.
Several months later, over a late-summer coffee, Sorkin and I are discussing the history of the economic collapse and the book itself, in which the parallels to today exist almost down to the person, Fink included—sort of (more on that below). I ask whether the popular 1920s-era stock-pooling practice among Wall Street insiders—where powerful investors combined their resources and artificially ran up the stock price of a given company—bore any similarity to modern-day meme stocks, as online communities drive stock purchases, leading to rapid price oscillation. “Completely,” Sorkin replies, adding that it’s happening in both meme stock culture and the world of crypto. So what’s the contemporary analog to the old stock pool? “I think Reddit,” Sorkin says.
After his own crypto coin hit the market in January, Sorkin was invited to direct-messaging groups of that nature on X and Signal. “They’re talking about, ‘I’m gonna buy in at this, and then you’re gonna do this. I’m gonna put up $2 million, then you’re gonna put up a million.’ And it’s up and up and up and up,” he tells me of the groups’ members. “It’s totally crazy,” he says.
‘1929’ by Andrew Ross Sorkin
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Sorkin argues that technology has allowed for more democracy; as the 1920s backrooms were invite-only, restricted to those with deep pockets and established Wall Street connections. But it’s entirely possible if that were the case today, Sorkin would still find a way to observe and report.
The New York Times financial columnist and CNBC anchor occupies a high-profile role in business media, where he threads the needle between reporting on powerful figures and companies while maintaining exclusive access to leaders at Davos and his standing invitation to Allen & Company’s strictly off-the-record Sun Valley conference. His previous book, 2009’s Too Big to Fail, became one of the definitive accounts of the 2008 financial crisis. Sorkin parlayed it into an HBO movie and had a prestige TV side hustle, cocreating Showtime’s Billions.
For his latest literary undertaking, Sorkin explores the big one and how it took shape on Wall Street, while the government maintained an unwillingness to interfere and prematurely stem foul play from taking root under the guise of the democratization of the stock market. But did the most infamous economic collapse in American history, which isn’t lacking in extensive coverage from journalists, historians, and economists alike, need Sorkin’s take? His proposition is that there might not be a single journalist with a better understanding of how the economy is currently being reshaped by key players adopting modern finance technology under a similar pretense of accessibility. And they might eventually have the same power to shove America off the cliff.
The “spine of the story,” in Sorkin’s telling, centers on Charles Mitchell, National City Bank president and board member of the New York Federal Reserve, and Virginia senator Carter Glass, who constantly declared war on Wall Street, attempting to warn the rest of the government and the public of the perilous trajectory the US was headed on. Sorkin would compare Mitchell to the modern-day CEO and chairman of JPMorgan Chase Jamie Dimon in terms of status. But his mien was more an amalgam of Apollo Global Management CEO Marc Rowan, Coinbase CEO Brian Armstrong, and BlackRock’s Fink. “Those three people at the moment are reinventing Wall Street and modern finance,” Sorkin explains. Mitchell might have been just as ubiquitous as Dimon, fronting the covers of business publications, which frequently touted his “bank for all” program, an effort to make the financial industry accessible. Sorkin views various instruments from BlackRock, Coinbase, and Apollo in a similar vein.
Glass, the rain cloud to Mitchell’s “Sunshine Charlie” media persona, would be represented by today’s Elizabeth Warren or Alexandria Ocasio-Cortez. Well, “except that he’s racist,” Sorkin adds.
Another character parallel was the restless John Raskob, who became one of the wealthiest men in the country by revolutionizing the automobile industry. Money alone failed to satisfy him, so Raskob got involved in politics (where he was despised), wrongly assuming that his wealth could be weaponized for political purposes. And in his downtime, he sired 13 children. Sound familiar? He’s the Elon Musk of Sorkin’s narrative. Both men were seemingly “never satisfied,” Sorkin says.
Then there is the stock trader Jesse Livermore, who was able to maintain his allure in the press by “planting stories and issuing elaborate denials to provocative questions,” even though he squandered several fortunes. The first comparison that came to mind was Billions’ Bobby Axelrod, who manages a multibillion-dollar hedge fund. He also compares Livermore to Bill Ackman, the Pershing Square Capital Management CEO, who has become a media constant over the last few years.
Throughout the book, Sorkin chronicles the attempts of these business leaders to move the markets, both for personal financial gain and to reassure the public that there was nothing to worry about as the house of cards started to collapse. Most of the financial coverage at the time was “relatively obsequious,” Sorkin tells me, adding that investigative journalism in the sector was uncommon given the novelty of burgeoning Wall Street celebrity. The shine wore off around 1931, but it was too late for warnings by that point. Sorkin argues that by 2008, journalists had started to learn from their mistakes, setting off alarms for years of a real estate bubble that could burst at any moment. But, he says, “by default, if our job is to blow the whistle, you can argue we didn’t blow it loud enough.”
Even still, CEOs and business leaders use the media as a tool to move the markets and cozy up to journalists. Sorkin acknowledges that he encounters this frequently given his platform. Fink may have been doing something like that with his Davos Squawk Box appearance, signaling his hopes for Trump’s SEC. It’s something of a trade hazard when the president is a well-known cable news obsessive.
If the question is whether the US is walking into another financial crisis like 1929 and the Great Depression, Sorkin isn’t ready to draw that conclusion. Most financial crises are a function of debt and too much leverage in the markets, he continues, “and part of the problem is we don’t know whether there is, because so much of the leverage in the system is now in sort of the shadow banking system.” The events of 1929 should serve as a warning, not that we are necessarily on the cusp of a financial crisis of that magnitude, Sorkin argues, but that if lessons aren’t learned, “we could go down the same road.”
And, as any crypto investor who may have been put on to SorkinCoin by a stock-pool-esque group chat by now surely knows, nothing good lasts forever. At press time the unit was trading at $0.00008786.
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