#110 - Bryan Taylor - “At Some Point, the Stresses Are Going to Be So Great that Some of the Countries (In the European Union) Are Eventually Forced to Leave"

61 minutes

In Episode 110, we welcome author and market data expert, Dr. Bryan Taylor.

Meb begins by asking how Bryan built the massive financial database that is Global Financial Data. Bryan walks us through how the database developed over time.

The conversation soon turns to Bryan’s book, Debts, Defaults, Depression and Other Delightful Ditties from the Dismal Science. Bryan tells us this is actually the first of two books. It includes stories about the past that people might find interesting – some of the crazy things that have happened in the financial markets, as well as an inference about what that might mean for the future. The follow-up book will focus on a number of specific cases, from The East India Company, all the way up to some of Trump’s companies.

Next, Meb changes gears – there are a few contenders getting close to becoming the first $1T company. Meb uses this as a chance to look back at the first $1B company.

Bryan tells us that title goes to Standard Oil. He then walks us through its history, including its practice of pushing prices down to drive competitors into bankruptcy, the Sherman Anti-trust Act, the break-up of Standard Oil, and the effect on shareholders.

This conversation dovetails into a conversation about which company today – Apple, Amazon, Facebook, or Google – is more likely to face a threat from government oversight. Listen in to get Bryan’s thoughts.

The guys then get into inflation. It turns out, the 20th Century had the highest inflation ever. What might be in store for us in the 21st Century? Bryan and Meb discuss this, touching on various governments’ ability to pay debt, growth rates, Bryan’s red-flag metric (when the interest coverage ratio to GDP exceeds 5%), as well as the most likely path for US and global interest rates.

Meb then uses his recent trip to Greece as a springboard for a discussion about the future of the EU. Bryan tells us it’s an all-or-nothing situation. And the concern now isn’t over Greece, it’s over Italy. It might be the first country to drop out of the Euro. If so, it will face severe consequences in trying to be independent. Plus, it could have a domino effect, leading to other countries leaving and the entire system falling apart. He concludes by telling us that “at some point, the stresses are going to be so great that some of the countries (in the European Union) are eventually forced to leave.”

Next, Meb moves toward Asia. He brings up a quote from Bryan about the future market-cap of Asian stock markets (as the biggest in the world) and asks if this is a no-brainer “buy Asia” right now. Bryan gives us his thoughts but notes that Asia has lots of internal issues that need solving before they can challenge the US as the primary engine of returns going forward.

Next up is an interesting discussion of what investing used to be like, how it changed, and how it might change for us going forward. The conversation touches on investing in the 1800s, how World War I flipped everything on its head, and the current concern of nationalism.

There’s plenty more in this episode – the need to be conscious of how integrated global markets are these days… the historical period that most closely resembles today’s investing climate… what Bryan is working on now… And Bryan’s most memorable trade.

Get all the details in Episode 110.

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