Capital, Politics and Power: Ken Griffin on the 2024 Election (w/ Andrew Ross Sorkin)

Please welcome Andrew Ross Sorkin and his guest, founder and CEO of Citadel, Ken Griffin.

Good morning, Ken. Thank you for being here. As I mentioned before, Ken Griffin is here. He is the CEO, founder of Citadel. As I mentioned, he may very well be the most consequential single individual right now in the financial markets. His hedge fund manages about $65 billion in assets under management. But perhaps, I would argue, more important, Citadel Securities business now handles nearly a quarter, a quarter of all trading volume in the U.S. stock markets every single day. He's a major philanthropist. And he is also a force in American politics. He was one of the five largest donors in the Republican Party this last cycle, just behind Elon Musk. And we welcome Ken now back to the stage, actually for the third time.

So thank you for being here, sir. It is a pleasure to be here this morning.

There is so much to talk about, and I want to get to about a million things. But here's where I want to start. I want to start at politics and policy, because I just mentioned that you were one of the largest Republican donors. And I mentioned that, but interestingly, I believe that you were not a donor to President-elect Trump. And I want to read you something. This was back in October. You said, "I have not supported Donald Trump. I'm so torn on this one." You said, "I know who I'm going to vote for, but it's not with a smile on my face." So here we are. The election's over. Do you have a smile on your face?

I do, because the Republicans took the House, the Senate, and the White House. And now we have a chance to govern. We have a chance to govern an America that makes America work for the average American, will return America back to a nation of principles, of strength, of prosperity. And I'm excited about that possibility. Tell us what your issue was with the president-elect. I think the president-elect has gone through just a tremendous amount of personal strain over the last few months. I mean, can you imagine both the endless attacks in the American court system and then literally an assassination attempt that was one inch off the mark? And yet he persevered through an election. And in that moment in time, I think we saw somebody who was paying the price for that stress.

Right? There's no doubt about it. And it did not always bring out the best in him, as one could imagine. But at this point in time, he is the president-elect. And I will do whatever I can do to help support the president-elect in his future role as president of the United States.

When you said you weren't going to smile with the vote, I assume you were voting for him, can I ask? I voted for him. You voted for him? I voted for him. So you're happy that this was the outcome?

Look, I think that between the two candidates, I think this was clearly, from a policy perspective, the best outcome for America.

Okay. So let's now talk about some of those policy issues, perhaps the biggest one being this question mark that nobody knows the real answer to, which revolves around tariffs, because they have a huge impact on the economy.

You're missing the big picture. It's not even close to the biggest issue. Bring it. Bring it. The biggest issue in the United States is that America is open for business again. The endless amount of regulatory and litigation-induced paralysis from the Biden administration is over. It's over. So when I'm with a group of American executives, whether it's from telecommunications, it's from the consumer space, whether they voted for Trump or for Harris, from a perspective of building their business, they are smiling from ear to ear because they know they can now focus on creating value for customers, on creating jobs, on growing their business, and on prospering, rather than having to deal with just an endless onslaught of pointless litigation and pointless regulation.

I mean, Lina Khan seems to have missed the entire economic section in her college experience, because the role that she played in really reducing and eroding American productivity was profound. It was profound. So I think that for the United States, all these issues around tariffs and this and that, how much are we going to drill, it's all second order. First order?

We're back to business. Why do you say second order? And the reason I, I ask is there is no question that the regulatory regime under the Biden administration created a lot of uncertainty. I, I think we'll all agree that it's not uncertainty, it's loss. Okay, loss. There's, there's, there's uncertainty and there's just flat-out loss. But my question is, there's this now new uncertainty, right? So the tariff piece, for example, how do you think about that?

So I think that we are literally months or years away from knowing where that lands. And to be clear, that uncertainty does erode capital formation. It does. There's no doubt about it. And I think that one has to remember that the president comes from a field, real estate, where the norms of negotiation are often different than we see, for example, in trading stocks or bonds. In real estate, you buy a building every couple of years, every couple of months, you'll probably never deal with the seller again. It creates a different negotiating dynamic in tension than with somebody that you do business with each and every day. And I think the president brings to the White House that behavioral pattern that comes from coming up through that particular part of the economy.

So, "I'm willing to throw out some big, bold positions. I'll see what the other side does in response to this." So you'll see the threat to the Canadians and the Mexicans about tariffs.

Well, and that's a real issue, I would imagine. I would think even a bigger issue would be this issue of BRICS, for example. You're hearing the president come out or the president-elect come out and say that all of these BRICS countries, if they were to try to consider building their own currency or creating their own currency, that they would, you know, tariff them, all of them, right? I would assume for you that would have to be a new uncertainty that was not on your bingo card. Yeah, but here's the big picture. It's like, where do you go with that?

OK? What are you going to do with that? He's not going to do it. It's not going to happen. The BRICS aren't going to move away from the dollar when it's all said and done over the next four years. And nor is he going to seek retribution on them for trading it in other currencies.

Do you think the language matters? Yeah, it does. It does? No, I mean, when you read those either tweets or Truth Socials or Xs or whatever we're going to describe them now as, do you think that when he makes these proclamations, even the ones where you read them and I assume you toss them off and say, "This isn't going to happen," is there an impact? Is there an impact to this country in any way? Well, OK, I mean, you're in media. Yeah.

Words matter. I would think. OK. That's why I'm curious if they matter to you, though. No, of course they do, right? And that goes part of why there's not a smile on my face. I wish the precision in words was tighter. I wish the thoughts he was trying to convey were more transparent and clear and well understood. But the big idea that he's portraying, which is that America can be a country that's exceptional, that this is a country where you can have a better life, this is a country where you can have agency over your decisions—those values resonate with the entire country. Let me ask you a different question. Let's separate the big picture, what this administration represents. It's an America of freedom.

It's an America of prosperity. It's an America that's strong. It's an America that's respected. Let's stay focused. That's the big picture. That's what the American voters are fighting for.

The respect issue is an interesting one, though. That does become a central question if you antagonize all of the other countries around you.

There is no doubt the world looks to America for leadership. And although we may do things such as threaten Mexico or Canada with tariffs, that's like small ball compared to the role that the world's looking to us for. When we tell Hamas, 'Release the hostages by the start of the presidency,' that resonates with the world.

Let me ask you this. Trump just picked Scott Bessent as his Treasury Secretary. I know, I think you were pulling for Mark Rowan, who runs Apollo, at the time. What do you think of Scott Bessent as the Treasury Secretary?

I don't have personal experience with Scott. One of my good friends, who's one of the most successful money managers of all time, sings his praises. Look, why did I like Mark Rowan? Mark Rowan knows how to run a large organization. And I think that, from my perspective, people around the president that have the ability to run large organizations, that's a really important skill. So it's easy to be excited about Mark. But this doesn't mean that Scott can't do a great job.

So the reason I wanted—I was curious where you landed on Scott Bessent is Scott Bessent and President-elect Trump have talked about potentially eroding the independence of the Federal Reserve. We're gonna have Jerome Powell here a little bit later this afternoon. And one of the things that Scott Bessent has talked about openly is this idea of creating what he calls a shadow Fed chair. Somebody who would be nominated to the Fed chair even though they wouldn't be on the Fed and that somehow the markets therefore would undermine whatever the Fed is doing in the moment, because the markets and investors would look past it to whoever they think the next Fed chair is going to be and what they're going to do.

What do you think of that?

I mean, okay, let's take a huge step back. The independence of the Federal Reserve is extraordinarily important to the sanctity of the dollar. All right, I've been publicly on the record defending Powell vis-a-vis Trump over the years, not just in recent months, but over the years, because I truly believe that the independence of the Fed, whether it's from President Trump or any former president, is incredibly important to the preservation and strength of our economy. So again, going back to first-order principles, that's what I believe is in the best interest of the country. Now, of course, every president wants to push back on the Fed when they're making tough decisions. And they'll have to push back not only just as a political matter.

You can't look at the Fed raising rates, destroying jobs when you need to deal with inflation and go, like, 'Kudos, I'm so excited about that as the president,' right? No one expects you to take on that role. The part of the Fed chairman role is to make the really tough decisions that the body politic is often afraid to make.

How would you grade Jay Powell's job thus far? We can play the grade back to him later.

Here, let me just be clear. Powell has had one of the worst jobs you could have. Because the Biden administration, in their reckless fiscal spending, put this country on an inflationary path that was unprecedented in our lifetime. And he's had to deal with cleaning up the mess of that fiscal largesse, just as this administration's gonna have to clean up that mess. So he's had a really tough no-win job over the last few years.

And therefore? I mean, some people think he's either landed the plane, or it's a soft landing, or we're hovering above the ground. You can look at the stock market now.

The short run feels good. But as Scott has said, and I applaud him for this, we have to put our fiscal house in order. And as we put the federal fiscal house in order, that's going to have other complications in terms of our economy that both the legislative branch and the Fed's going to have to navigate through.

So right now the stock market is flying, flying. The bond market may be saying something else. What do you think is happening? I don't think the bond market has actually said all that much over the last couple of weeks when it's all said and done. Does it make sense to you that equities, if you're an investor in the stock market, that that makes sense, what's happened right now in the past? There's no doubt.

Let's just go back to the opening set of commentary. For corporate America, it's a better world today than it was before the election.

because none, but doesn't that just undercut all of these other uncertainties, or you just say that these other uncertainties just never come to pass and that's what we should decide?

No, no, it's the difference between understanding the big picture and getting caught up in the trivia, all right? It's the forest and the trees problem.

But given that there's the White House, as you said, Congress, and the Senate have all gone red, is there any governor—and maybe it's the bond market ultimately—talk about spending and everything else that's gonna happen or not? Do you imagine you're gonna see the bond market get rattled if we don't get things under control, for example? Yeah, the bond market should get rattled if we don't get our house in order. I mean, that's what the bond market should do. Are you a believer in Elon Musk and DOGE? Because that relates right now to whether the bond market is going to say we're getting things under control or not. Or maybe not.

I think to sort of make Elon wear that entire burden of responsibility is a bit preposterous. Do you think? I mean, let's be clear. He is truly one of the great entrepreneurs of our lifetime. I mean, no ifs, no ands, no buts. He runs Tesla. He runs SpaceX at a level of excellence that very few companies can even start to relate to. And I think that his willingness to be in this role that involves such a commitment of his time in public service is something that I applaud and admire. Will he be successful? That's really hard to tell at this point in time, because as you and I both know, he's gonna have to hit the hard reality, the hard truth, that making cuts of any form whatsoever will be politically very unpopular.

Well, that's what I was gonna ask. Do you think it's actually... He's talked about $2 trillion, and we don't know whether that's annually or over time or what it is, but do you think that that's even plausible?

I think that without a thoughtful change in the trajectory of entitlements, it'll be very hard to squeeze numbers in the trillions of dollars out of the baseline budget. And in particular, because we've increased interest expense in such a profound way over the last eight years.

Let me ask you a different question about Elon, who of course we were discussing was here last year. You know, he is very close to this president. We see him sometimes even talking about being a co-president. You look at the pictures every day at Mar-a-Lago. How do you feel about that relationship? And how do you think other business folks should think about it? You know, Sam Altman's going to be here actually in just a little bit and is a competitor, effectively, to Elon with xAI and the like. Jeff Bezos is going to be here later. There was just a big article in The Wall Street Journal saying, is this, you know, are these relationships that are, you know, is it going to be used in some way against certain companies, given the closeness of certain business leaders to this president and other business leaders that might not have that same relationship?

Is that something that concerns you? Do you think that should concern them?

So let's be clear. Here's what we have. We have somebody who's extraordinarily competent, capable, and brilliant helping advise the President of the United States. We go back to the good old days when people like that weren't in the White House. I'll take Elon in the White House. Now, what we have to hope for is the President, the House, the Senate, the judiciary all play their role in pushing back against crony capitalism. And one of the great, great worries that I do have, whether it's about this administration or the prior administration, has been the increase in crony capitalism in the United States. It is truly unfair to the American taxpayer and the American consumer and future generations when we start playing favorites in Washington with taxpayer dollars, picking winners and losers.

And it's not just Washington. I mean, look at California trying to put in place EV subsidies for every company but Tesla. I mean, how incomprehensibly appalling is that? 'You're an investor in Tesla, Citadel?' 'I have no idea if we are today.' 'I saw it on the 13F, so I think so.' 'Yeah, but that was like weeks ago.'

Um, we do trade a quarter of all the stock that trades in America every day. That, that is true. Um, I actually am curious about this, though. Uh, assuming you are an investor in Tesla, or at least you're interested in it, uh, there was a big, um, decision made this, this week—I don't know if you were following it—about Elon Musk's pay package, which has been up for grabs for this past year. Do you have a view about that? In this case, the shareholders voted effectively that they asked twice to give him the pay package. And the state of Delaware, where that company was incorporated, said, 'No, not acceptable.' Do you have a thought?

I mean, here's the only thing I will say. It must be amazing to have $50 billion at risk and still be OK. I mean, can you just imagine that?

Totally true. Which actually leads me to this. You happen to be one of the wealthiest people in the country. Maybe you don't have an extra $50 billion lying around, but you're up there. And I wanted to read you something. I'm curious how it sits with you. Warren Buffett just wrote a letter. I don't know if you saw it. He was talking about giving away more of his money and having his children do it for him. And he wrote the following, and it fascinated me. He said that, 'Very early on in life, I had confidence that I would become rich. But in no way did I or anyone else dream of the fortunes that have become attainable in America during the last few decades.' He didn't believe it was going to happen, even to him.

He said it's been mind-blowing. Beyond the imaginations of Ford, Carnegie, Morgan, or even Rockefeller, 'billions has become the new millions.' How does that idea sit with you? Because it is something that I think is actually quite remarkable in terms of just the shift in our culture and society.

Here's the amazing part of American history. Roughly 125 years ago, almost half of all America was involved in agriculture. The transformation of our economy over 12 decades has been stunning. And we're at an interesting point in our economy where a brilliant idea can be brought to market and overnight reach billions of consumers. In fact, think about the instantaneous reach that we have today from this conference. You reached the world today with this conference, which is a thought that 50 years ago was impossible. So what this means is that the great entrepreneurs of this moment in time, and this will continue to accelerate, have the ability to create an idea, to bring it to market, and to bring it to market globally in a way that you could never do before in time.

If you go back 70 years ago, you'd open a single retail operation, a single store. And then if things went well, you could open another store a few miles down the street or the next town over. Right, you have Jeff Bezos coming today. Amazon gives everybody instantaneous reach that you can't imagine just 50 years ago.

Oh no, that I don't disagree with. It's an amazing, amazing thing. The question is, if billions is the new millions, I imagine trillions, we'll get to trillions soon. I think Warren is very clever with his choice of words.

There's not that many billionaires as compared to millionaires. It's kind of a throwaway line.

But I guess where I'm going with this is, so Sean Fain, who unfortunately, as we mentioned earlier, is ill and is going to be here, he says billionaires should not exist. That they just shouldn't even exist. Now, you're a capitalist. By the way, I'm a capitalist. What do you think of that? I mean, Sean, we can just all be poor. We can. We can just all be poor. But that's the fundamental, I don't know if that's what he's suggesting either. I'm just wondering what you think of the disparity.

This is sort of the problem with where he is on many issues, is he doesn't understand the consequences of his actions. We can just all be poor. I'd rather not be poor. And everyone in this room would rather not be poor, and our country would rather not be Venezuela.

I have a couple of quick other questions for you. One actually directly about your specific business right now. And I think I saw Bill Ackman and maybe Dan Loeb and some other people in this audience.

I can't emphasize enough, and you want to move away from this. The flexibility of the American capital system and the American labor markets is a big part of the story of the standard of living in our country. There is no country to speak of where people have both, on average, such a high standard of living, and children, on average, have such opportunity. Go to Europe. It's lethargic compared to the United States. And it's a continent that's, in every sense of the word, disappearing. Their birth rates are a challenge. Their economy's not growing. Their per capita numbers are horrific. The sense of optimism, the future's not there.

Do you want to be Europe? I don't want to be Europe.

I want to be America.

Let me ask you about the investing business, because it's changed and shifted a lot over the years. And I would argue there's really sort of two models ruling right now. There's yours, and I'd put you and maybe Millennium and maybe put Point72 and maybe a Jane Street in this kind of category. I don't know where you'd put it. And then there's individuals who have their own firms. And there's a big question mark about whether we can all play effectively against the bigger guys, right? What do you think of that as a sort of a concept right now?

I mean, play? Serena Williams is coming today, right? So if her and I went and played tennis,

Would I make a point? You would not make a point with tennis. I'm not disagreeing there. But what I'm suggesting is that right now there's these sort of massive funds that have access to all sorts of information. I'm not suggesting illegally having access to information. I'm just suggesting that there's these sort of huge teams that can pass on their costs of getting a lot of this information to their investors. It's just a different business than it was 10 or 20 years ago. If you were starting today, do you think that you could start a small little fund and compete against you?

That's the power of the naivete of youth. When I started, I got to compete with Salomon Brothers and Goldman Sachs, and they looked gigantic.

And so today, if you were going to start a fund today or do something today, what would you do? Look, here's what entrepreneurs have, OK?

They have this belief that although on any set of metrics you have no chance, I'm just going to go for it. Do you think Elon Musk thought he could beat the big car companies just as a matter of first-order principles? No, but I'm going to outthink, outwork, put better people together. I'm going to find a way. True entrepreneurs find a way to make it happen. All right? Has the investment business changed over the course of the last 30 years? Absolutely. We have the enormous rise of passive investing. Almost 50% of all assets are now in passive vehicles at virtually no cost to investors. But the premise of those vehicles is that markets are efficient. Markets are efficient because of the active management of firms like Citadel and Millennium and Point72.

And to be clear, hundreds and hundreds of other very well-managed, very capable hedge funds—D1, so on and so forth. These are really well-run firms that do really good research. Because here's the fun thing about my business. My job is fundamentally—it's a research job. It's like you said. It's gathering information. It's drawing conclusions. It's understanding business models. It's understanding products. And it's understanding which elements of those are not reflected in the price of stocks.

What's the big macro investment you'd make right now, given all the good things you say that are happening in this country? Are there certain places you'd say, 'This is what we're doing,' at least theoretically?

Look, the big macro trend in the world is more resources towards America. That's the big trend in the world because this is the most vibrant.

But there's not an industry or a company or anything that you're saying, 'Guys, this is the direction to travel, folks'?

Here's the challenge with investing versus the economy. The direction of travel in the economy is clear. Healthcare is going to continue to be ever more important. Technology is going to continue to draw in resources and continue to revolutionize our lives. But the question is, the valuation of these companies as investments, have we fully reflected a bright future or over-reflected a bright future?

Where do you land on one of the other things that is flying right now? I mean, flying is Bitcoin and cryptocurrencies.

Really? We're going to end on this? What do you think? I thought we had a fun conversation.

Is this like my exit tax? Is crypto that not fun to you? I still—look.

Here's the problem. I own canvases covered with oil. Canvas probably costs $15. The oil paint probably costs $20. That's $35 sort of net cost. Some of these paintings trade for tens of millions of dollars. Who am I to judge crypto?

"Well, that is true. But you've been asked to judge crypto for a very long time, and you've judged it by not buying it." "Yes, and what a mistake that's been." "So do you wish you had?" "I still—" "OK. And do you?" "No, no, no. I'm a journalist. Honestly, I own mutual funds. I'm not allowed. So I missed out, too." "That's unfortunate."

It is unfortunate. So I mean, of course, I wish I'd bought something that trades at 100 times the price it traded at a few years ago, right? We all have FOMO. It's just universal. It's part of human psychology. There's always, what do we miss out on? Right? And then number two is, what I don't care for about crypto is what problem does it solve for our economy?

Do you think eventually then, because you've said that a lot, what problem does it solve? What problem does it solve? Therefore, do you say this whole thing is some crazy speculative bubble that ends badly the way Warren Buffett says? Or do you say it could just live up in these numbers and it makes a lot of sense?

So the question is, how much has this structurally captured the zeitgeist of the world? Just, you know. What do you think? I don't know. I don't know. I think part of this is, you know, going back to why do people vote for Trump? They want to get away from the yoke of government. So therefore, maybe it has a future. It may have a future. You have to remember that an asset like this, an intangible asset like this, its value derives from intangible aspects. Right. Part of being a community, part of having this sense of, like, I stand opposed to... the power of the state, right? People take joy in that. And I think that one of the things that we did see over the course of this election cycle is the American people saying, "I want to have agency in my life."

And crypto is part of that. What do you think about people?

I don't know if he's here. I think I saw the CEO of Polymarket, the founder of Polymarket. What do you think of people now betting? Hi. Oh, hi. Well, there, there he is. We can get him a microphone. What do you think about, oh, standing next to Dan Loeb. What do you think of folks betting on elections? That's a market. Is that something that you want to get into?

I don't, you know, it's not on our to-do list. But congratulations to Polymarket for having built such an international brand in just a few weeks on the back of that very large position and bet they had on the pro-Trump side. This is not an issue I've spent a lot of time thinking about. This is not core to my to-do list on any given day. Betting on markets has been around for a long time. Do you have any bets with your friends?

I'm a terrible bettor. I lose pretty much all the time, so I really don't bet, sadly. I wish I could tell you. Then I'd be better at this. Maybe I'd be in your business, rather than just asking the questions. I could have so much fun with that answer.

I know. There's a lot of places to go. I'm just going to let that go.

Let it go. Sean has a microphone. Hey, Sean. Shayne. Oh, Shayne. I apologize. I apologize, Shayne. He doesn't want to be in your business, but I'm curious, actually, since you're now a market for betting on all sorts of things, whether actually you ultimately want to be in this kind of business.

You know, I'm a product builder. I can't say I'm much of a trader. But I do think it's inevitable that there'll be markets on everything. And it's exciting that that's flourishing. And it's not a bad thing, in my opinion, that the biggest finance people are maybe a bit dismissive or think it's too small yet. But that's continued opportunity for us. I think, like Ken said, where it's the naivete of youth and entrepreneurship, it's the opportunities that may seem small, that can end up being really big tomorrow.

Maybe we'll be betting on all of these things. We're out of time. Before I let you go, I have one last question for you, which was a couple of years ago, I don't know if you remember this, you bid at a Robin Hood event on a seat on a Blue Origin flight to space. You paid $8 million for it. Do you remember this? I do. And you gave the seat up to a schoolteacher. We're going to have, as I said, Jeff is going to be here at the end of the day. And so my question to you is, do you have an ambition to ever go to space yourself?

When I get to 98?

If you get to 98— I like to go with "when." Oh, "when." "When." I prefer "when" rather than "if." So it's "when." It's "when." It's "when." It's "when." Okay, so we'll go on a rocket.

Yes, but I have three little kids.

I don't need to go tomorrow. Ken Griffin, everybody. Thank you. Thank you very, very much. Thank you.