Faber News Flow

According to the latest IIF Global Debt Monitor released today, debt around the globe hit $246 trillion in Q1 2019, rising by $3 trillion in the quarter, and outpacing the rate of growth of the global economy as total debt/GDP rose to 320% NEW Global Debt Monitor: Global debt hit $246T in Q1 2019, nearly 320% of GDP. Debt by sector, Q1 2019 (as % of GDP): 🔹Households: 59.8% 🔹Non-financial corporates: 91.4% 🔹Gov't: 87.2% 🔹Financial corporates: 80.8%  pic.twitter.com/4Qu0ekvpZw — IIF (@IIF)  July 15, 2019 This was the second-highest dollar number on record after the first three months of 2018, though debt was higher in 2016 and 2017 as a share of world GDP. Total debt was broken down as follows: Households: 60% of GDP Non-financial corporates: 91% of GDP Government 87% of GDP Financial Corporations: 81% of GDP And while the developed world has some more to go before regaining the prior all time leverage high, with borrowing led by the U.S. federal government and by global non-fin...

As one Goldmanite departs (i.e., Mario Draghi, whose term ends on October 31) another Goldmanite arrives at the ECB. Now that Christine Lagarde (who had her share of run-ins with the French law especially her  guilty conviction in 2016  over a €400MM payment to Bernard Tapie) has been picked to head Europe's central bank, the European Central Bank has hired Elizabeth McCaul, a former Goldman Sachs banker who later led an audit of the Vatican's scandal-ridden bank, as one of its top banking supervisors, the bank said last week. She is one of three new ECB representatives on the Single Supervisory Board, which oversees the euro zone's 114 largest banks according to Reuters. McCaul will join the ECB from Promontory Financial Group, a prominent US consultancy firm - famous Wall Street "revolving door" which sends financial execs into positions of power - which agreed to pay $15 million to New York's banking regulator in 2015 to settle accusations of whitewashing a...

While there was some modest compression in the famous "jaws" chart last week, the market's biggest paradox of 2019 continues to vex traders, investors and even algos. Namely that, as Deutsche Bank's Parag Thatte writes,   bond yields are in line with slowing growth, while equities are priced for a strong rebound,  a theme discussed extensively last month in   " How Can The Economy Both Be Booming And Headed For A Recession: A Quantum Explanation .") If looking purely at the fundamentals, bond yields have tracked growth indicators like the ISM Manufacturing index closely through this cycle and have declined in line with slowing growth. Equities, on the other hand, are pricing in a significant rebound in the ISM from under 52 currently back up to around 57. The technicals are familiar as well: the bond rally has been underpinned by near-record inflows and long positioning. Specifically, global bond funds have seen inflows of almost $330bn, close to the largest...

On a recent call with  ETMarkets.com , no-nonsense economic guru Jim Rogers restated his concern that a bear market was on the way, and investors should be on the lookout for small signs to avoid another crisis like 2008. Although Rogers could not give a timeline for the bear market to arrive, he did say that it will be  the "worst in my lifetime,"  a prediction he's stuck by for a while now, and the key to spotting a market correction lies within smaller markets. Via Economic Times: How do you view US stock markets currently? I am not investing in US stock market because I expect problems to come in the next year or two. I am not buying shares. In the US market, some of the stocks like Apple and Google go up every day. They never go down, which is a dangerous sign in any stock markets. When you have a few stocks always going up and the movement has been concentrated and that seems to be what is happening in the US stock market. Any timeline, any horizon that you have for...

Now that the S&P 500 has finally broken out above the key psychological resistance of 3,000 which served as a ceiling to risk assets for the past two years, the market has entered fresh nosebleed valuation territory. As Bank of America writes today, following one of the strongest June markets ever, the forward P/E of the S&P 500 on consensus estimates rose by 6% to 16.7x. However, unlike JPMorgan which like a good penguin raised its year end 3,000 price target to 3,200 just to stay ahead of the market, Bank of America - just like Morgan Stanley - refuses to do that (for now) and warns of downside risk to consensus earnings (they forecast $176 over the next 12 months or NTM)  putting the S&P 500 PE at 17.4x on the bank's NTM forecast ($169),  which is hardly a bargain, while noting that  guidance for the 2H and 2020 has turned sharply negative  (as we  reported at the end of June , the second highest number of S&P500 companies is issuing negative guidance). Yet while...

Global stocks have re-surged back near record highs, US equities are at record highs, and European companies have rallied an impressive 15% in the last few weeks ahead of earnings season. This scream higher has occurred despite a major divergence with earnings revisions - continuously negative for months... However, thanks in major part to The Fed's massive flip-flop and The ECB's promises,  investors are doubling-down on bets that the party will continue.  Bloomberg reports that the three largest exchange-traded funds that track the S&P 500 Index took in a combined $6.2 billion last week, just as the benchmark topped 3,000 for the first time, data compiled by Bloomberg show. Of the more than 1,600 U.S.-listed equity ETFs, these three -- known by their tickers SPY, IVV, and VOO -- received more cash than any other funds in one of their best weeks of 2019. Investors are "all-in on equities,"  Steven DeSanctis, a U.S. stocks strategist for Jefferies wrote in a Monda...

The Chinese  goalseek-o-tron  was in perfect working order on Monday morning, when moments ago Beijing reported that China's Q2 Y/Y GDP rose at 6.2%, once again precisely as consensus had expected, down from 64% in Q1 and the lowest since "modern" records started to be kept 27 years ago in 1992, dipping below even the financial crisis low of 6.4$ Additionally, 2Q cumulative GDP rose 6.3% y/y, also matching the consensus estimate, and down from 6.4% in Q1. "We expect Beijing to ramp up stimulus measures in the second half despite more limited policy room, though markets should not put too high expectations on the scale and duration of these stimulus measures," Nomura's China economist Lu Ting wrote in a recent research note. "Domestic policies will to a large extent be dependent on the U.S.-China trade tensions." The disappointing GDP print comes just day after another miss, this time in the value of exports, which sharnk by 1.3% in dollar terms in ...