Welcome back to Dry Powder. I’m William D. Cohan.

In today’s issue, the director’s cut of my chat with former Goldman C.E.O. Lloyd Blankfein, which took place last Wednesday at a private Puck event in Manhattan. (If you missed my conversation, last week, with current Goldman C.E.O. David Solomon, you can find that here.) Naturally, the author of Streetwise: Getting to and Through Goldman Sachs had plenty to say about the current dynamics on Wall Street—from the A.I. I.P.O. madness to the jitters in the private credit markets—and the inner workings of Goldman, itself. And yes, it’s been a big Goldman week at Puck, and elsewhere in the universe, thanks in part to Goldman’s $110 million payday for being a co-lead underwriter of the SpaceX I.P.O.

Up top, some news and notes from the Tribeca Film Festival, and an update from my partner Marion Maneker, the author of Puck’s Wall Power, on Sotheby’s outpost at Art Basel.

Also mentioned in this issue: Ash Koosha, Albert Oehlen, Johan Nauckhoff, Bryan Cranston, Denis Villeneuve, George Condo, Tom Rogers, J.J. Abrams, Gary Cohn, Bridget Riley, David Rothschild, Yayoi Kusama, Etel Adnan, Ben Stiller, Gerhard Richter, and more…

Bill Cohan: Can you believe how much money Wall Street is making these days? JPMorgan Chase makes $60 billion of net income a year, and Goldman is on track to make $20 billion this year. It seems like the investment banking business is literally on fire.

Lloyd Blankfein: Right now, there’s a lot of alignment with tailwinds on the economy. I know the K-shapedness: some people are experiencing the best economy that we’ve ever had, and some the worst economy, and they’re both true. Add that to the reopening of the capital markets, which have been closed for a while, so there’s all this pent-up demand of companies that are nervously waiting in line to go public—because that window can close. It’s like the last boat out of Europe in 1939—everyone wants to jump ahead and get on that before it closes up. So that’s a moment.

Is it a sustainable moment?

No. Moments aren’t sustainable, that’s why it’s a moment. These moments are cyclical, and when things go well, it creates the stuff that goes bad. So in this moment, when everybody’s going out and making hay because the sun is shining, remember Apollo 13—the reason why it blew up was because there was some defect two years earlier they hadn’t discovered. What’s embedded in the balance sheets now is going to be the seeds of the next part of the cycle.

We have this confluence of three gargantuan companies that have been private for a long time that are just beating on the door to go public—SpaceX, OpenAI, and Anthropic. What do you make of this phenomenon? And should people be wary of investing in these companies? [Nota bene: This is not investment advice.]

Should people be wary? Yes, of course, everybody should always be wary. Look, there are a lot of massive companies that are trying very hard not to go public. But at some point, it becomes very, very hard to stay private when your own people are clamoring to realize some value. Goldman Sachs tried to do that for a long time, because we were the last big company that stayed private well after the others. It’s not always a pleasant experience to be a public company. When you’ve seen me testifying, it was not as much fun as it looked.

What about private credit? Are you worried about the whole phenomenon?

The fact that people are focused on private credit is actually a good thing. Everyone’s looking for what’s going to set this [next crisis] off, what’s going to cause it. What ignites it is not the big deal. Private credit and private equity is probably mismarked on balance sheets, because firms can’t return capital, which means that they’re marked too high.

It’s been 15 years since the last crisis of the century. If you don’t have that reckoning for 15 years or 17 years, which is where we are now, it builds up. Think of it like California, dry tinder on the floor of a forest, that’s what that stuff is now. If you have the tinder in a forest, something’s going to set it off. Maybe it’ll be a cigarette butt, maybe it’ll be a lightning strike. But what’s causing it is not the spark, it’s the kindling. When you have a mini-crisis, like with Silicon Valley Bank, or what’s happened with private credit, that’s kind of like a controlled burn. So if we get rid of all that bad stuff, that’s much less for the whole big system. But the real issue is the kindling.

But I thought Dodd-Frank was designed to eliminate the kindling, at least in the regulated banks.

Things have evolved. If you want to avoid the 80-year storm, and make sure you never have it again, then you’re going to avoid all the growth in the 79 years in between—it just can’t work. In Dodd-Frank, it says traders should facilitate transactions but not take risk to make money. It’s not an earthly thing. So you had a few years where it was discombobulated, nobody could do anything, and then the interpretation started to flow in the direction of being able to engage in activity.

One of the consequences of pushing markets toward the unregulated sector is pushing what used to be done on bank balance sheets, which were very highly regulated, into a space like private credit, where it’s not regulated. Before, you could take a boardroom table at the New York Fed and sit everybody around it that encompassed 90 percent of the market. You’d need Citi Field now.

In your book, you lavish praise on Gary Cohn, your number two. But in my Vanity Fair story in 2017 about Cohn entering the first Trump administration, I reported that when you were sick, he tried to engineer a coup at Goldman to replace you.

Why’d you think that?

Because it was true, and you don’t mention that in your book.

You know the theories of multiple universes and quantum mechanics—in your universe, that’s true. But in my universe, it’s not true. He was always appropriate. It was such a subtle coup that I wasn’t aware of it, and didn’t know about it. I don’t think that’s true at all, honestly. [Ed. note: Okay, Lloyd, we can agree to disagree.]

Join Puck’s chief political columnist, John Heilemann, as he roams the corridors of power and influence in America on this twice-weekly interview show, taking you beyond the headlines with the people who shape our culture: icons and up-and-comers, incumbents and insurgents, moguls and machers in the overlapping worlds of politics, entertainment, tech, business, sports, media, and beyond. The conversations are rich and revealing, unrehearsed and unexpected… and reliably impolitic. A Puck-Audacy joint, new episodes drop every Wednesday and Friday.

An essential, insider-friendly Hollywood tip sheet from Matthew Belloni, who spent 14 years in the trenches at The Hollywood Reporter and five before that practicing entertainment law. What I’m Hearing also features veteran Hollywood journalist Kim Masters, as well as a special companion email from Eriq Gardner, focused on entertainment law, and weekly box office analysis from Scott Mendelson.