Good morning. Andrew here. It was quite the week, between Paramount Skydance winning the bidding war for Warner Bros. Discovery, President Trump ordering all federal agencies to stop using artificial intelligence technology made by Anthropic and OpenAI raising $110 billion and developing a partnership with Amazon (which happens to be a huge competitor of OpenAI’s biggest partner, Microsoft). This morning, we’re taking a breather from the torrent of headlines. I spoke to Lloyd Blankfein, the former C.E.O. of Goldman Sachs, about his provocative new memoir — and he may have made some headlines of his own. We also take a look at what the rest of the world thinks of America after the Supreme Court’s decision on Trump’s tariffs and what may come next. And please make sure to try our quiz about Mayor Zohran Mamdani. (Was this newsletter forwarded to you? Sign up here.)
Lloyd Blankfein in his own wordsIf there’s one thing to say about Lloyd Blankfein, it’s that he rarely holds back — and when he lets loose, he has a wicked sense of humor (which sometimes gets him in trouble). As C.E.O. of Goldman Sachs from 2006 to 2018, Blankfein shepherded the firm through a brutal public reckoning after the financial crisis, often serving as the primary lightning rod for the world’s critics. In his new memoir, “Streetwise: Getting to and Through Goldman Sachs,” Blankfein finally shares the raw reality of that climb, and of surviving cancer while steering the world’s most influential — and scrutinized — investment bank. It is an often poignant, revealing look at the view from the top. Wall Street denizens are likely to be fascinated by the insider details during his career and from inside the crash that Blankfein proffers. Critics of Wall Street, on the other hand, won’t find any apologies from Blankfein. “Going into the crisis, I thought I was cynical about politics. It turned out that I wasn’t cynical enough,” he writes. I sspoke with him this week to get the story behind the story. Andrew: In the preface, you pose an interesting question but don’t answer it. You write: “The global financial crisis and its aftermath continue to reverberate. Would we have as polarized a society, would we have a Donald Trump, had we not had the crisis?” Well, I’ll ask you, would we? Lloyd Blankfein: I would say a major contribution to the feeling of unfairness we see is when Republicans give tax breaks to billionaires and nothing for everybody else. There’s a set of laws that apply to rich people and a different set for poor people. And, you know, look at how the rich people — with Epstein! — look at this rich crowd of celebs and 1 percenters that live this kind of dissolute lifestyle. After the financial crisis, there was a feeling that the well-to-do got bailed out and the receptionist that put down payments on three apartments didn’t. And that was a major factor in the erosion of the fairness of our society. But we know the central bank doesn’t lend to people or institutions; it lends to banks that lend to institutions. The financial system and the banking system are the intermediaries for the translation of policy. And a recession that is also a banking crisis is a much more difficult thing to sort out. Some of that dialogue has been taken to an extreme — like the banks were malevolent and they knew what they were doing and they inflicted themselves on people. And then the people who were buying three homes, they were not greedy, they were just taken advantage of by banks. The people on the consumer side were certainly not any more culpable than the banks and probably less so, even if both of them were merely negligent. None of them were intentionally trying to blow up their balance sheets. You managed to dodge Jeffrey Epstein. I looked in the files. It sounds like he was trying to get a meeting with you. Your assistant seemed to do a good job of keeping that from happening. I did not know who Epstein was. I have no memory of the specifics of telling her to do this, but standard procedure is: “You don’t say ‘no,’ because I don’t know who they are — just keep putting them off.” In the book, you wrote about how Donald Trump called you because one of your brokers wouldn’t buy debt of the Trump Organization and that you apologized to him. Have you talked to him since then? That was before Trump won. I visited him in his office, and he couldn’t have been nicer, and other times, too. I went to a state dinner in China that was thrown for Trump. Gary Cohn was there, and Dina Powell was there, and Steven Mnuchin was there — it was all Goldman. And, in fact, he called me up. “Am I taking too many people from Goldman?” And I said: “You know, frankly, the needs of the country outweigh us. And by the way, in some cases you’re helping us. I can give you a list of 20 other people I’d like you to take.” What do you make of Trump suing JPMorgan and Jamie Dimon personally over debanking him after Jan. 6? I’m licensed but not necessarily qualified to practice law. I don’t understand what the cause of action is. JPMorgan has the right to pick its clients. It’s not a common carrier. I don’t know that you have to take in anyone. Regulators are requiring you to know your client and to avoid reputational risk. By almost definition, they’re telling you that you’re expected to be discerning and not talk to certain people who you technically are allowed to talk to, but who don’t meet a reputational standard. And that was their decision and their judgment at that time. What would you have done? I don’t know. I think I probably would not have debanked him — half the country possibly thought he acted well, and half the country didn’t like him. I tried not to draw conclusions just because I’m in a blue bubble in New York City. How do you view your successor David Solomon’s leadership and the evolution of Goldman Sachs? He’s doing things that I probably wouldn’t have done, but that our owners, which are the public shareholders, want him to do and are probably benefiting from. I was grounded in the old partnership. He’s completing the orientation of Goldman Sachs as a public company. Goldman Sachs has been lucky enough to get the guy they needed at any given moment. I was a very risk-oriented risk manager guy, and I was gifted the financial crisis and the aftermath. He’s the first C.E.O. that was never a partner of Goldman Sachs. He’s rooted in a public world. I was fascinated to read that you overruled the recommendation of Goldman’s underwriting leader so the firm could back Elon Musk’s Tesla. Once upon a time, not that long ago, to be a public company and to get reviewed by the underwriters, you had to show profits. You had to be on your way to a profitable enterprise. Companies today, it’s almost cute — that’s a quaint notion. One of the things about Elon Musk that I admire that doesn’t get talked about that much is Elon Musk is an industrialist. He had plant and equipment when most of these guys who made fortunes in a gigantic way — the Google guys, they could do it in a basement and get bigger and bigger and take in tons of revenue with a relatively minor capital investment. This guy had to build factories and supply chains. Who else has done that? Edison couldn’t do that. Jack Dorsey, the co-founder of Twitter, sent you a plaque when you retired that said, “Here’s one thing I look forward to: unrestrained tweeting.” What was the reaction either inside the firm or from clients to all your tweeting? I’m a good enough risk manager to know I was losing the discipline of following my risk-management judgment. I was inserting myself into public arguments which I could easily have avoided. I was sort of elbowing my way in, and from a risk-reward point of view, I realized that it probably wasn’t a very good risk judgment to be going at people who had subpoena power. Usually in life you find out you’ve gone too far after you’ve gone too far. Just like most C.E.O.s find out they stayed too long after they stayed too long. I think in most cases I’ve been good at getting out before it was too late. When you think back on the crisis, all the vampire squid stuff and all the criticism that was heaped on the company, is there something you wish you had done differently? We were always going to be unsympathetic because we were doing well — anybody who does well is going to be somewhat picked on. I don’t want to sound excuse-y, but there’s the tendency. Our P.R. department was charged with making sure that no one ever gave an interview or that no one knew anything about us. We were supposed to put our clients first. And nature abhors a vacuum. So when we found ourselves front and center, we should have realized we were too big, too powerful, too influential to be invisible to people. OK. So — When I said something like, “I’m sorry, I can’t talk to you, I’m off to do God’s work,” who today would take that as making an ecclesiastical statement? Because people know me now. Then, they didn’t know my sense of humor. People were horrified that I would invoke the name of God. We had an obligation — and it was in our interest — to explain ourselves to our public. And that was a mistake that I wish I had addressed. Now, is that really what you’re asking? If I had had perfect knowledge, I would have gone out and shorted every security instead of being flat. I think if every bank — and this is very haughty, and that’s not really my go-to move to be arrogant about these things — but I think if every bank had managed its risk the way we did, we wouldn’t have had a banking crisis.
Paramount Skydance won the fight for Warner Bros. Discovery. Netflix dropped out of the monthslong bidding war after David Ellison’s company submitted a revised offer of $111 billion, which values Warner Bros. Discovery at $31 a share. The deal, which needs approval from regulators in the United States and Europe, would effectively be the largest-ever leveraged buyout, leaving the combined company with a mountain of debt. President Trump ordered the government to stop using Anthropic. The A.I. company doesn’t allow Claude Gov, the only A.I. model operating on classified military systems, to be used on mass surveillance of Americans or autonomous weapons without human intervention. The president issued his directive after the start-up missed a deadline to remove guardrails set by Defense Secretary Pete Hegseth. A.I. anxiety continued. Early in the week, a Substack post that outlined a potential A.I. economic collapse helped drive a brutal stock sell-off (and a wave of critical responses). Then on Thursday, Jack Dorsey, the founder of Block, announced that the payments company would lay off nearly half of its work force because of A.I. intelligence tools. That rationale is likely to make some white-collar workers uneasy, but not Block’s investors: The company’s share price soared. More big deals: Meta agreed to rent A.I. chips from Google. Kalshi announced its first major enforcement actions for insider trading. And the average 30-year mortgage rate fell below 6 percent for the first time since 2022.
What the world is saying about Trump’s new tariff planIf anyone held out hope that President Trump might relax his commitment to tariffs after the Supreme Court ruled against him, his State of the Union speech on Tuesday put an end to that idea. Trump instead offered a blunt warning to those who have been the targets of his tariffs: Take what you can get. “The good news is that almost all countries and corporations want to keep the deal they already made,” Trump said. He added: “A new deal could be far worse for them.” Despite Trump’s defiant language, the latest tariff tumult has prompted exasperated politicians and pundits around the globe to reassess their options, Vivienne Walt reports. That’s tough given that the signals coming out of Washington are confusing. After the Supreme Court’s ruling on Feb. 20, Trump first said he would impose a new 10 percent global tariff, then raised it to 15 percent, only for it to go into effect at 10 percent. The U.S. trade representative, Jamieson Greer, then signaled that the tariff rate could still climb to 15 percent or even higher for some countries. Three basic strategies are emerging: Keep resisting. Brazil, India and China have seen the world’s biggest tariff relief since the ruling, with the new 10 percent rate bringing down their average levies sharply. That’s despite — or perhaps because of — their vociferous pushback against Trump last year. Brazil refused to drop charges against former President Jair Bolsonaro. India refused to halt Russian oil imports. And China threatened to cut exports of rare earths to the United States. On Monday, China’s Commerce Ministry reasserted its opposition to Trump’s tariffs. They “violate international trade rules and U.S. domestic law, and are not in the interests of any party,” the ministry said. By contrast, the 27 European Union countries could face worse terms under the new global rate, having inked an agreement for a 15 percent tariff in July — a move that Europe had regarded as “a collective humiliation,” Le Monde reminded readers on Tuesday. Talk tough and fight. So advised Germany’s financial daily, Handelsblatt, as Chancellor Friedrich Merz landed in Beijing for trade talks on Wednesday. “Set conditions for Beijing to grant free access to Europe’s single market,” the paper’s Beijing correspondent Sabine Gusbeth wrote. “With their rare-earth export restrictions,” she added, China “even forced” Trump to the negotiating table. Stall for time. Several countries are pausing trade negotiations with the United States and waiting for the tumult to clear. India scrapped this week’s trade delegation to Washington. And in Brussels, the European Parliament shelved a vote to ratify the July tariff deal. “It’s impossible for us to do this in circumstances where nobody is sure whether the new tariffs themselves are legal,” Barry Andrews, an Irish center-right member of the Parliament, told Euronews TV on Wednesday. “We are not even sure whether or not there will be refunds for the former tariffs,” he said, adding that Japan, Taiwan and others were also “slow-walking” U.S. trade talks. Quiz: A mayor of many namesThis question comes from a recent article in The Times. Click an answer to see if you’re right. (The link will be free.) Between managing the fallout from a huge winter storm, weighing in on a snowball fight gone wrong and making a surprise visit to the White House, Mayor Zohran Mamdani generated many headlines this week. That highlighted a conundrum for New York City’s tabloid papers: what, exactly, to call him. Which of these nicknames for the mayor has not been used by one of the New York newspapers? We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times. Thanks for reading! We’ll see you Monday. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
|
