In the darkest days of the Civil War, Abraham Lincoln learned that Confederate cavalry had captured a Union general and a hundred horses. Lincoln knew what was scarce, and it wasn’t the general.

In this special episode, recorded at More Than Capital’s Global Annual Meeting at Rice University’s Baker Institute in Houston, we sit down with four leaders who have made consequential decisions under pressure:

- Retired Lt. Gen. George W. Smith Jr., former commanding general of I Marine Expeditionary Force

- Ambassador David Satterfield, director of the Baker Institute

- Dr. Kenneth Medlock, senior director of the Center for Energy Studies

- Britt Harris, who has led major financial institutions like Bridgewater, TRS and UTIMCO

Chapters

(00:00) Lt. Gen. George W. Smith Jr. on knowing what’s scarce

(05:08) Britt Harris’s seven storms

(15:11) Ambassador David Satterfield on the Iran war and its two likely outcomes

(19:08) Maritime choke points and asymmetric forces

(26:26) Satterfield on the administration’s “two original sins”

(29:06) Dr. Kenneth Medlock on how oil markets reorganize

(32:24) 1970s industrial power generate and why data centers may follow the same path

(40:59) The Marine Corps’ trust tactics

(44:52) Britt Harris on leading UTIMCO through COVID

(50:18) Core values as a fixed point in uncertain times

Sponsors

Big thanks to EQT Corporation for helping us bring you the stories of market history and how they apply today. To learn how EQT is unlocking energy to power AI, go to PoweredByEQT.com.

Note: this show is for informational purposes only and isn’t investment advice. Backtest hosts and guests may have investments in the companies discussed.

By 1869, the transcontinental railroad is finished, the Civil War debt is refinanced, and the business that made Jay Cooke reach the pinnacle of private banking in the US is disappearing. He had spent the war building something nobody had built before: a retail distribution machine that sold Union bonds to farmers, mechanics, and merchants. He had created the template for war financing that would inform government playbooks for the next 100 years, and it made him the best known banker in America. But by focusing on that, he had missed the banking business for the major railroads that were booming in financial markets.

As the government financing business shrinks and excitement builds over the completion of the Union Pacific and Central Pacific linking New York to California, Cooke turns to the Northern Pacific transcontinental railroad. The structure is elegant on paper but the project combines massive capital needs with a speculative vision on an unprecedented scale.

This is the perfect story to answer the question of what happens when enormous capital funds transformative infrastructure ahead of the demand that must eventually pay for it.

Chapters

(05:01) Jay Cooke in Philadelphia, 1839 as a young banker

(11:51) The retail distribution in Pennsylvania

(16:38) The financier of the Civil War

(22:56) Jay Cooke looks for non-government business after the war

(30:19) The Northern Pacific comes calling

(36:13) Jay Cook signs a deal with the Northern Pacific

(45:47) Harris Fahnestock, Cooke’s partner, warns him about funding the Northern Pacific

(50:36) Jay Cooke & Co. almost fails on October 1872

(56:10) Fahnestock closes the New York office and triggers the Panic of 1873

(59:15) The realization of a vision

References

Jay Cooke, Private Banker by Henrietta Larson (link)

1873: The Rothschilds, the First Great Depression, and the Making of the Modern World by Liaquat Ahamed (link)

Jay Cooke’s Gamble: The Northern Pacific Railroad, The Sioux, and The Panic of 1873 by M. John Lubetkin (link)

Panic on Wall Street: A History of America’s Financial Disasters by Robert Sobel (link)

Sponsors

Big thanks to EQT Corporation for helping us bring you the stories of market history and how they apply today. To learn more and explore the latest data on energy affordability, go to eqt.com/eqt.com/permitting-reform-now.

Note: this show is for informational purposes only and isn’t investment advice. Backtest hosts and guests may have investments in the companies discussed.