The Five Scariest Numbers in the Global Economy (A Halloween Special)

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1:16David McWilliams: How are you doing there? Welcome to the podcast. Today is our Halloween special podcast, John's Sound Effects. I hope you are well. I hope you're looking forward to Halloween night. It's one of the great nights in the Irish calendar. It's one of the great nights now in the global calendar. And anybody who was born or raised in this country will have a real grow for Halloween. I always loved it. But the reason you might love it even more is we are having a Halloween sale. 20 % off the last of the Kilkenomics tickets. so from Friday morning which is tomorrow morning the 30th of October till the end of Halloween night midnight on the 31st of October everything Kilkenomics will be 20 % off all you've got to do is type in the promo which when you get to the checkout on the Kilkenomics website which is Kilkenomics.com and you will get your Halloween discount which is 20 % off and we will see you in Kilkenny next week next weekend.

2:24Indeed. And you might even get some apples and nuts.

2:26David McWilliams: You might get apples and nuts, exactly. Bobbing for apples and all that sort of thing. Now, it's interesting you say that, John, the bobbing for apples. But lots of people, obviously your Irish listeners know this, but obviously Halloween is a massive Irish festival. It was called Iha Nasaun. That was the time when the living and the dead were most close to each other. Because it was the Celtic New Year. You were going into the New Year. It was the year and the time of the darkness. Yeah. And during the darkness, it's when all the spooky people came out. So obviously, it was the last day of the light.

3:00David McWilliams: You're going into the dark. You're going into six months of darkness. And of course, they feared, the Celts feared, that that's when the dark world, the underworld, and the real world were closest together. Yes. So you'd either meet a ghost, and therefore you had to dress up as a ghost in order to disguise yourself. They wouldn't recognise you. So it's a very, very old festival. Of course, our American listeners are probably not aware of that. They probably think it started in the United States because the Americans have commercialised it so much. But, you know, I'll tell you, the Americans are spending $13.5 billion on costumes this year in America.

3:38David McWilliams: But... What? Really? But the brilliant one is nearly$100 million of this in America are going to be this weekend on costumes, for pets. What? Yes, pet costumes. Well, you dress up your dog. You dress up your dog. Oh, my God. Right, okay, so our American cousins have, as you know, they've taken it to the next level. Yeah, yeah, yeah, yeah. But of course, we know that Halloween is one of the most successful cultural exports from this country. And again, the spookiness, the darkness comes from the fact that it was this notion of the dark creatures from the underworld who come out at night Yeah. And us, the creatures from the real world who go in at night, it's that night that they're closest together, which is why we have bonfires.

4:25David McWilliams: So the bonfires were to keep away the darkness. Yeah, to light up the night. Yeah, yeah. And then another thing is because it was always called the mischievous night, dressing up meant nobody could really know who you were so you could do whatever you wanted. Yeah, yeah, yeah. Which is the sort of masked ball idea. Like in Venice. Precisely, precisely. Yeah, yeah. Except they go down in gondolas and we go to bonfires. Yeah, and do knick-knocks. Do knick-knocks and throw bangers at each other and things like that. Anyway, that is the thing. But today's podcast is going to be on a witch story, John, from Kilkenny.

4:57One of the very interesting witch story. And also, just to keep in with the Halloween theme, the five scariest economic developments that are going on right now and what they must lead to. Right, okay.

5:11David McWilliams: Then you can go, woo! Woo! Okay. So I'll give you Kettler's in Kilkenny. So we're going to Kilkenny. Kettler's is a bar in Kilkenny. Yes. Unusual name because it's a Flemish name, Kettler. Named after Alice Kettler, who was a very wealthy money lender. In Kilkenny, believe it or not, there was a townland called Flemings Town where Flemish people, so the Dutch-speaking people of the lowlands, settled in 1302. So you're talking in the 14th century because they were great weavers. Right. And they came with the Normans. And Kilkenny was settled by Normans. Yeah, yeah, yeah. Because, of course, the Normans came to Waterford and came up all the rivers.

5:53David McWilliams: So they came to Kilkenny and they made Kilkenny one of their bases. So Kilkenny and the Normans are always interlinked. Right. And, of course, the Normans brought the Flemish people from Flanders because they were very... As slaves? No, no, no, as drapers. They were drapers. They were weavers. They were clothesmakers. And Alice Ketler was one of those. and she arrived, we're talking the 1200th, so around 1280, she marries this guy. She eventually marries four fellas. You know, so Alice Kettler buried four husbands. She was very, very wealthy. But every time one of the husbands died... Whether they wanted her or not.

6:29David McWilliams: Well, this is the whole point of the story, right? Every time one of them died, all the money went to Alice. Right, yeah. But a lot of the stepsons and step... Because there were other people involved, nothing. So, hold on a second, who's getting all the money? So Alice basically had all the readies. And after the fourth husband, people started to question how and why the husbands were dying. Yeah. Okay. I'll give you a statistic. I'm kind of digging into wonder myself. I'll give you a statistic. At the time, right, think about this, she was lending out over three grand, three thousand pounds.

7:04At the time, a labourer was earning one to one and a half pennies a day. So if you had three grand... Three grand in those times? In those days, because she was the money lender for all the landlords around, right? Right. So that's somewhere between 480 ,000 and 720 ,000 days labour wages she was sitting on. Right. So what's that marked now? It'd be billions? It'd be billions, right? It'd be billions. But again, it shows you the inequality at the time. Yeah. The labourers were earning nothing. Yeah. And the landlords, who were all Normans, were earning a fortune. And Alice Kepler was the money lender.

7:42But anyway, after the death of the fourth husband, mysterious death of the fourth husband, people started to question what was going on. And she was accused of witchcraft. She was accused of murdering the husbands as a witch. Because one of them, the last one died of that lovely generic term, the wasting disease. And the Bishop of Kilkenny brought seven charges against her, including renouncing Christ, sacrificing animals to demons, brewing potions in the skull of beheaded robbers by the light of a candle made of human fat and keeping a demon lover through whom she supposedly acquired her unheard of wealth.

8:24Wow, okay. So Alice skips town. Yeah. Was there any evidence for this, by the way? No, no, it was just witchcraft. Right, right, right. But it doesn't matter. It doesn't matter. She was basically a witch. She was the first witch ever tried in Ireland. She skipped town, but for her, she got out and escaped to England. But her servant, a woman called Petranilla de Meath, was not so lucky. And she was actually burnt at the stake in Kilkenny on the square outside the castle. Wow. On the 3rd of November, just three days after Kilkenomics. Yeah. 3rd of November, 13. It was the highlight of Kilkenomics that year.

9:00Exactly. It was a bit of witchcraft. The 3rd of November, 1324, just again after Halloween. Because the Halloween mania with the witches and the spirits condemned this poor woman who was completely innocent of the fact that maybe her boss, Alice Kettler, was actually killing her husbands and was taking their money and was making money. but it shows you that what happens in economic calamities is that somebody is always made a scapegoat. Yes, of course. Right? And if you look at the history of witchcraft and witch hunting in Europe, it tends to coincide with periods where there's a crop failure or there's something going on that they can't explain.

9:45So, for example, most of the witch trials in Europe came after the Little Ice Age. Remember we did that when we were talking about Avignon. Yes. The Little Ice Age, right? You gave me a book on this. Yes, I did. Bad weather meant bad harvests. Bad harvest meant a search for somebody to blame because everyone was going hungry. And there's a fascinating piece of economic research which shows the data on more than 43 ,000 people tried across 21 countries had a different answer but quite similar again. Yeah. Whether an income mattered may be less as we got through the Renaissance than religious competition.

10:28So where Catholic and Protestant churches were fighting for followers, particularly in Germany, in the Reformation, they prosecuted witches to show each one that they could protect you against the devil. And of course, all the witches were women. Of course. Right, of course. But it is a fascinating thing that even though the details kind of are different, the pattern holds. When there is some big cleavage in society, be it weather related, be it money related, or be it religion related, everybody in history, European history, look for scapegoats. Yes. Right? So when there's a calamity, you look for scapegoats.

11:08And it is ever thus, John. Yeah, because that happens now. If something goes wrong, fingers are being pointed. Exactly. who's basically the problem. Yeah, yeah, yeah. It's Biden, according to Trump. Everything is Biden.

11:19David McWilliams: And it's Trump, according to the Democrats. Yes, yeah, yeah. Everybody looks for it. So, John, I'm going to give you the five big scary Halloween issues that are the five scariest things that are going on in the global economy now, that if they go bad, that they will lead to a witch hunt certain people. Right, okay. Hey, so I start building a bonfire now. Get your mask on. Get your mask on. Get your sparklers. Okay. Okay. So what's the first one then we should be looking out for? The first one is the expensiveness of stocks in America. Okay. There's a thing called the Shiller cap ratio, which is basically the price earnings ratio.

12:06Are you talking about tech stocks or stocks in general?

12:08David McWilliams: Stocks in general. Right. So it's called the Shiller cap index. And basically what it does is it goes through 100 years data and it says at what point do stocks become so self-evidently expensive that a crash is almost guaranteed, right? Almost on the cards, right? And the S &P 500, he goes back since 1881, which is a huge amount of data. And right now, the Schiller index for the S &P 500 is at 41. So it's the price to the earnings ratio. It means the investors are prepared to pay 41 euros today for every one euro or let's say dollar of annual earnings, which means companies are incredibly expensive.

12:56Why would you pay 40 euros today for one of potential profit for one euro of actual profit? It either means that you think the companies are going to grow exponentially, which is our AI friends, or you're buying something that's incredibly expensive and the risk is that those companies don't generate the earnings. So, for example, if a company is being priced 40 times earnings today and its earnings double next year, so its profits double next year, then that goes down to 20 times earnings. So it's back in reasonable position. But if that company doesn't hit its profit forecasts, suddenly it looks incredibly expensive.

13:43So that's the Shiller Index. It's basically a rule of thumb. It's like a short hand. Okay. And what should we be scared of here? So the long run median, John, this is the key. So over the average, over the long run, the median price earnings ratio at which financial markets in America have been trading is 16 times. So investors were prepared to pay 16 times the earnings of one year. and that makes sense because if you're buying a stock you buy it today but it throws off earnings every single year and in 16 years you'll be well paid back and of course any capital appreciation is in your back pocket but the market is now at 41 times it's incredibly expensive it's a lifetime yes exactly so you're basically, you're right you're basically saying I'll get paid back in 41 years at today's price but if prices rise rapidly and there's massive capital appreciation and these stocks actually do what you say they're going to do or you think they're going to do then you'll get paid back you get paid back quickly but of course the problem is that right now at 16 times earnings you're way over two and a half times three three times what the average is right so the market so first of all that's the big scary event right that right now this is your halloween scare at halloween number one it's your podge and roj scare at halloween number one right now does this mean that we're going to have a correction in ai markets the global financial stability report for the imf names an ai correction as one of the three triggers that could suddenly tighten money conditions everywhere.

15:35Because so many people have borrowed, so many banks are levied. What have you been talking about there for months now? Exactly. So that is a big, big risk out there. You might say, well, why should anyone in Ireland care about this? Because it's out there. Because as we said last week, our tax take is a bet largely on the very same companies that are now incredibly expensive in the United States. And of course, if there's your Microsofts, your Apples, these ones, okay, if they were to become subject to a correction, the AI market, you'd see a massive drain of cash out of them. Just to give you one quick idea of how quickly this is going to happen, Korea, and we spoke about this a couple of months ago, has got two very large companies that run the Korean, in effect, the Korean stock market.

16:25Both of them, one is Samsung. Samsung, yeah. And one is another chip maker, right? And on the 13th of October, so not that long ago when everything was going to be pear-shaped the Korean market lost 18 % in one day Wow, that's a crash This is how quick things can happen So just keep that, that's our first spooky This is now your This is where your apples and nuts come in Number two Number two is

16:57David McWilliams: global debt ratios, it's top of the pops for pessimists, right? For Halloween pessimists, right? Number two is how indebted the world is. The world now, taking all the Western countries together, so remember 100 % of GDP is where you don't want to be for government debt, right? Government debt has now reached 94 % of global GDP. That's an average. That's the whole lot. That's the average, right? France is much worse. Japan is much worse. countries like Ireland are much less bad, but we're so small it doesn't make any difference. And of course the United States is the big gorilla on the patch, the big gorilla in the jungle, right?

17:42David McWilliams: Now of course that means that we're getting closer and closer to the event. If interest rates were to rise rapidly because inflation rose rapidly, very few countries would have the fiscal capacity, the tax capacity. We talked about France last, a couple of days ago, the tax capacity to deal with this. So that is another massive problem. America, of course, leads the way. The big real, give you a sense, American government debt is projected to be 142 % GDP by 2031. It's not that far away. So the average then across the globe, it's creeping up slowly but surely. So when do they reckon we're going to hit that event horizon?

18:25Well, the 100 % of we're doing this is over the next couple of years. A couple of years. And of course, just the mathematics is very simple. If your debt GDP ratio is 100 % and your rate of interest is higher than your growth rate, you begin to go into what they call a debt spiral. It's very hard to get out of that.

18:41David McWilliams: Simply because, let's say, take it very simple. If your GDP is 100 and your debt rate is 100 and your growth rate is 2 % next year, that means you grow by 2 % so you're at 102. too. But if the rate of interest you're paying back your debt is at 5%, that means your debt ratio is 105. So you've got 102, 205, and then that grows exponentially. So consequently, that's when you have to start. Have you seen this happen before? Never on this level. So that's your number two Halloween. Oh my god. My anxiety is shooting up at this stage. I'll just give you one just to get people head around it, right? Going back to 1881, the Schiller index was at 41, this is worth saying very expensive, for only 19 months in all that period.

19:37And what were those 19 months? The period 1999 to 2000, just before the dot com bubble burst. So we're in those territories, okay? So number one, Halloween scare is 1999.

19:50David McWilliams: You can sing Prince's Party If you want, because I know you tend to be triggered by musical references. I'm trying to restrain myself. Number two is 94 % average debt GDP ratio heading to 100. Yeah. Let's call it the debt blob. That's where it all goes. Right. Number three, I would call the vampire bill, the blood-sucking bill. Right. And that blood-sucking bill is the amount of money sucked out of the economy by debt repayments. And that is in the United States. We keep to America because it's so much bigger. And they are spending a lot of money on pet costumes this year. Yes, apparently so. One trillion dollars is the amount of net interest that the United States is paying every year.

20:41Simply to service its debt. It is bigger than the American defense budget. Wow.

20:47David McWilliams: That is up 8.2 % from last year. And just to give you a figure again, their defence budget, which is to be the policeman of the world, is 900 billion, 100 million less than the rate of interest they are paying. So just to give you a sense, right? At one trillion a year, Americans are paying about 2.9 billion a day. Right. In debt. That's about 2 million a minute. So that means by the end of this podcast, John, the Yanks will have paid somebody else 80 million euros, just what we're talking to us, in debt service alone. And of course, this is the 25th annual deficit in a row that the Americans are running.

21:33Sorry, does that mean they're in a kind of a debt spiral? They are almost, they are in a debt spiral now. And that's why all Donald Trump's big, beautiful bills and all those sort of things only add to it because they're involved tax putting. But inflation is kind of working in his favour purely on the debt level. Yeah, but the point is that the United States is, again, it's the, what I would call, this is the vampire bill, the Halloween vampire bill. The United States is paying out huge amounts of money, right? And all the while the financial markets are looking and saying, is there going to be a bipartisan moment somewhere down the road where the Americans, Democrats and Republicans say, we've got to set aside our cultural differences.

22:23Yeah. You know, because it's all culture wars now in America. We're playing out this week and next week in the midterms. They set aside and they say, look, guys, we have to bounce the books here. Yeah. We can't just keep behaving like this. And of course, the reason they can keep behaving like this is the rest of the world up until now has shown an enormous appetite for American debt. but that may not happen indefinitely, John. So then the question is, is there a point, apart from just reaching that particular level, but is there a point something will spark it and trigger it? Is it the kind of the stock exchange, the AI bubble?

23:02David McWilliams: Any of the above, but this brings us to our fourth scare of Halloween. Do you know what, Mac? My heart is racing here. My anxiety is true. Your nerves are gone. I need to go and have some apples and nuts. Okay, fair enough. And we'll be back in the room with the fourth Scare for Halloween. And remember, the reason we're doing all this is because the Halloween sale for Kilkenomic tickets, all of the last tickets must go at a 20 % discount. It's on between tomorrow morning, Friday the 30th of October, and the end of Halloween night, midnight on the 31st. All you've got to do is when you are at the check-in, there's a promo code, WITCH, and you will get 20 % off.

23:45David McWilliams: John, we'll be back in a second.

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25:57Okay, Mark, so we're doing the countdown of the five... The pessimist countdown. The pessimist countdown of the five scariest economic issues in the world.

26:07David McWilliams: Yes. And give me number four, if I can take it. I'm not sure if I can. Number four is a number. It's 5.36%. Okay. The Bond Vigilante's Ride Again, John. Right. Imagine a fella, right? Imagine it's Halloween night. Yeah. You're sort of dark, dark, dark street. You're walking up in your costume, right? And a fella, a vigilante comes out with a big stick. Yeah. Right, just remember this. But you're dressed up as the bond market. Right, okay. Okay, if you can imagine what that looks like, because I can't. But it doesn't matter, right? And the big stick is the vigilante, right? Right. On October the 7th, the US 10-year treasury yield hit 5.36%, 56%, the highest rate of interest that the Americans have had to pay on their global debt for 24 years.

26:58David McWilliams: Right? That's the 10-year. The 30-year also hit a 24-year high, trading at 5.7%. Now, the trigger to all this was oil. Yeah. Going back above$100 a barrel, reviving fears that inflation just won't go away, right? That the energy prices keep going up. This is the bond yield on what is regarded as the world's safest borrower. So when it jumps, everybody else's borrowing cost jumps. And U.S. 30-year mortgage rates, which is what most American people really worry about. They're not worried about the bond market, are above, think about this, 7 % for the first time in a number of years. So that's a big, that's huge.

27:45David McWilliams: For a nation that likes to borrow a lot of money, right? And of course, the Fed, under the new chairman, Kevin Warsh, raised interest rates for the first time since 2023, a couple of weeks ago. Now, the question is, every time there's a jump in interest rates, there's a jump in the payments the Americans have to make. This makes the bond vigilantes a little bit more encouraged. They're like the witch hunters. Right. Right, okay? Yeah, yeah, yeah. In our thing, because... After Mrs. Kettle. They're like, yes, exactly, it's Mrs. Kettler. Mrs. Kettler, the witch hunters of finance, right? Because they decide who's guilty and who's not, and they pass a sentence which is yet higher interest rates.

28:28Who are they? So they are largely people, investors, who are hedge funds, investment funds,

28:36David McWilliams: who are looking at the sustainability of American debt and they're saying, will this country be able to pay all its debts? Now, what they're trying to do, so there's two sides to this. One is they are selling American government debt because they think that the American government hasn't got its act together. But the other hand, on the political front, the more the bond vigilantes move, the higher the rate of interest, the more likely it is that the Americans will get their act together. Because they can't keep churning all this money out of the United States to foreigners because foreigners own about half of all American debt.

29:14David McWilliams: So a lot of this money goes back into America, it's fine, but a lot of it's coming out to us. And so the Americans can't. So imagine they are the kind of witch hunters. If you are Alice Kettler and you are trying to defend yourself, every time there is more evidence of your fiscal incontinence and your dribbly bits. Another husband. Another husband, yeah, exactly. The bond vigilantes who are in effect the high priests of finance are waiting to pass sentence on you. and the more you spend, the higher the rate of interest. And it gets to a certain stage where something has to give. Well, at that certain stage then, you know, you were talking there about, you know, a bipartisan kind of agreement.

29:55Yeah. That you kind of take it in hand. But is there also a possibility that they'll default?

30:02David McWilliams: There is a remote possibility. The, in fairness to the United States, since our friend Alexander Hamilton and the Coinage Act of 1793. The dollar was enunciated and put together. America has never defaulted on its government obligations. And that is one of its, in effect, gold standard promises to itself and the world. And it is against that background that all American finance is anchored to the long bond rate, which is that the Americans will never, ever, ever default. However. With this lot in power. Hey, this lot, or maybe the next lot. I mean, imagine this, you get a, you know, this lot are the people that you really dislike intensely, right?

30:48David McWilliams: Yes, I do. Right. But imagine you get a democratic socialist coming into power who says, you know what? We're the world's biggest economy. We don't need to pay all this stuff off. Yeah. I'm not talking a Zoran or a Bernie. But that sort of thing, I mean, the way in which global politics is going, we talked about France last week, right? We talked about France yesterday, the day before, right? Anything could happen over a 10-year time horizon. Anything, anything, anything. Because everything is unbalanced and everything feels a little bit out of kilter. But my sense is the Americans won't because American capitalism or American financial capitalism is their most extraordinary achievement.

31:27David McWilliams: So the fact that they're able to finance all these companies. I'm even looking at, you know, the amount of companies that have been financed this year, whether it's AI as a bubble or not, It still is a testament to extraordinary dexterity. And do you remember I was saying in the book, money, that basically most of money is law. It's not actually finance. It's contracts, you know? Yes, yeah, yeah. The vast majority of borrowing and lending, no money changes hands. It's an inherited system of contracts and laws and promises and obligations. And sometimes things as nebulous as people's reputation keeps the whole thing together.

32:04David McWilliams: and things like trust and all those sort of things. So it is still, although it's a very amorphous edifice, it is still quite a significant and non-fragile edifice, I think. Ooh, there's a little bit of optimism there. Ooh, yeah, yeah. We're coming to the end, John. We're coming to the end, right? So that was our figure. So think about all our figures. That last figure was 5.36 was our scary figure, right? Thank God it wasn't 666. Well, it's only a matter of time. If it's 666, it's all over. If the bond rate goes to 666, John, that's it. We're folding up the tent, right? And we're going to live elsewhere.

32:41David McWilliams: And final number, fifth scary figure is 1.10. It is$110. And what is that, John? That is the price of oil. The haunted straits of Hormuz. Hormuz! Oh, no. Oh, shit. Oh, that's so pathetic. We need to go for a drink. We need to get out of this basement. Okay, right. Fair enough. Brent crude traded at 110 on the 19th of October. Yeah. That's only last week. That's a five-month high. It's 80 % above where the price of oil was this time last year. That's the key. The war which began when you had the Israelis and the Americans striking on Iran, and it's all going to be over by February. Yeah, yeah. It's still on.

33:34David McWilliams: And the ball is firmly in the Islamic Republic's court because the Americans haven't been able to knock them out. Yeah, they're stuck. Everybody's stuck. They're stuck, right? And so, therefore, a record 10 tankers, speaking of stuck, were stuck in the single week of the 28th of September to the 4th of October. on the 6th of October only 7 tankers made it through the Straits of Hormuz which is extraordinary and that's before your friends the Houthis had a go at the Saudi Arabian airport in fact there's a lot of people thinking is this the beginning of the end the Islamic Republic was the product of the end of the Shah of Iran which up until the Shah of Iran was deposed seemed to be incredibly militarily politically and with its own internal security apparatus incredibly strong and then it was gone like snow off a ditch yeah there's certain people saying that mbs's regime could go like that that basically they started a war against the houthis which they can't win yeah they have a really rest of population young population they don't seem to be able to win any wars yeah and people are saying And the shine has kind of gone off a lot of the, you know, Saudi Arabia, but also Abu Dhabi and Dubai and all that kind of stuff.

34:58And, you know, his great big plan for the... Noom, wasn't it? Yeah, Noom, Noom, whatever it is.

35:05David McWilliams: It's all run into the sand, John. See what you did there, Mike. Anyway, John, the IMF forecasts assumes that the world average price of oil will be$96 this year, right? But they are hoping that shipping in Hormuz will resume as normal by March. Based on what? If you're sitting in Tehran, you're like all day. Yeah. Because what you want to do is you want to bring down the great Satan or at least have a dig at the great Satan. Yeah, yeah, yeah. Right? So that is, of course, oil pushes up inflation. Inflation pushes up the Fed to raise interest rates. Higher interest rates push up the bond rates.

35:47David McWilliams: Higher yields swell the interest bill and the debt. And dearer money puts pressure on all those AI price shares. Yeah. Because at the end of the day, the AI people need to pay all that money back. And what are they doing to pay it back? At the moment, they're borrowing to pay it back. Right? So in every horror film, something always happens from inside the house, doesn't it? The coal is coming from inside the house. Exactly, exactly, exactly. So for the world economy, the coal is coming from that little strip. Yeah. The Straits of Hormuz. So we are in this period, this Halloween of the global economy.

36:26And to come back and to conclude to Alice Kettler, where we will be next week, we actually should go for a jar in Kettler's pub.

36:35David McWilliams: We will, yeah. It's a lovely pub, actually. just down the street there. I think it's John Street, just off John Street in Kilkenny. Medieval part of Kilkenny harking back to medieval times. If this all goes pear-shaped, who's going to be the scapegoat? Because if you think about it, like 700 years ago, the residents of Kilkenny looked at a rich woman and the fact she was a woman. Men didn't like that. A pile of debts because she'd been the money lender. A bit of bad luck. a few dead husbands and suddenly she is a witch. Yeah. And if we burn her at the stake, we cleanse the guilt and we cleanse the shame and we cleanse the sin.

37:17David McWilliams: And according to them, I'd say, and cleanse their death. Exactly, exactly. But look at those big five numbers I gave you, right? If something goes pear-shaped, things get ugly, people are going to look for someone to blame. So in the old days, it was women and the ducking chair and the witches. Europeans blamed their neighbours for the weather. They blamed each other for not converting to different religions. Frightened economies also look for scapegoats and they also look for somebody to blame. So, what we have is any number of characters, John. Go on, give us a few. No, I'll just give it over to you.

38:00There will be a witch hunt. The question is, who's the witch? Woo!

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