Faber News Flow

Cleveland Fed's Underlying Inflation Measure Hits 3.0%, Hottest in the Data. "Soft inflation?" The inflation measure by the Cleveland Fed — the " Median CPI ," which is based on Consumer Price Index data but removes the outliers in the data to reveal underlying inflation trends — jumped 3.0% for September, the highest in the data series going back to the Financial Crisis, when this measure was launched. By comparison, "core CPI," which removes food and energy prices, hit 2.4% in August and September, the highest since September 2008: The Fed is mentioning these kinds of alternative inflation measures in the  minutes of the FOMC meetings  – voiced by "some participants" – to show that underlying trends in inflation are pointing upward, except for a few outliers, such as the re-collapse of oil prices and a few other items that skew the overall results, and to show that the "soft inflation readings during the earlier period were transitory....

Watch out!  At this very moment, professional economists of all stripes are making plans on your behalf.  They're dreaming and scheming new and innovative ways to  spend your money long before you've earned it. While you're busy at the gristmill, grinding away for clients and customers, claims are being laid upon your life.  Your future earnings are being directed to boondoggles galore.  Yet these claims are in addition to everything Washington's already signed you up for. At last count of the  U.S. National Debt , every American citizen's on the hook for nearly $70,000.  Add U.S. Unfunded Liabilities – which includes Social Security, Medicare Parts A, B, and D, federal debt held by the public, plus federal employee and veteran benefits – and each citizen owes almost $383,000.   And this sum's going to double in the years ahead faster than you can say lickety-split. Bank of America Tops 3Q Trading Revenue Estimates These professional economis...

Ray Dalio Warns Of Looming "Big Sag" That Will Rattle Global Markets | Zero Hedge Ray Dalio never misses an opportunity to tell a room full of absurdly rich people how their unchecked greed and unwillingness to lift their heel from the throat of the poor could usher in a global revolution. And what better venue for this than the IMF's annual meeting in Washington? Oddly enough, Dalio holds back on the Greta Thunberg-style chiding of his audience (fortunately for them, he has no childhood left to ruin), and instead touches how the US and Chin's efforts to battle the post-crisis slowdown continue to impact the global economy and the economies and their respective spheres of influence. Once again, Dalio presents his views within the framework of his '1937' theory: That is, that there are a number of factors that make the modern investing environment similar to that of the 1930s. Once again there is an emergent power (China) rising up to take on the ex...

If one observes a conventional indicator of prevailing risk sentiment such as the VIX, which is trading in the low teens and near the lowest levels over the past two years (and far below its long-term average of 20), one would be left with the impression that virtually nothing is keeping Wall Street up at night. On the other hand, an even cursory assessment of current events - where in addition to trade war, slowing economies, renewed easing (there have been 54 global rate cuts YTD), repo market instability, an earnings recession, rising wages and shrinking margins, the world's most powerful person is now facing impeachment - would suggest that something is about about to snap, a conclusion which was confirmed by today's shocking surge in the  US economic policy uncertainty index , which bizarrely hit an all time high.   Incidentally, the S&P - which is trading less than 2% below its all time high - would obviously validate the VIX's cheerful outlook, although in a mark...

◆ The International Monetary Fund (IMF) has again warned that the world's financial system is more stretched, unstable and dangerous than it was on the eve of the Lehman crisis ◆ Quantitative easing, zero percent interest rates and massive financial repression has pushed investors – and in the case of pension funds or life insurers, actually forced them – into taking on ever more risk ◆ Ambrose Evans-Pritchard analyses the IMF warning in The Telegraph and concludes that the IMF has presented us with a Gothic horror show and that "we have created a monster" ◆ The International Monetary Fund (IMF) has presented us with a another stark warning; It alas is being ignored by most of the world's media and by most financial advisers and economists.

It's grossly premature to speculate too optimistically on the chance that there is light at the end of the tunnel for the global economy.   It is akin to trying to catch the falling knife with the vast majority of economists and analysts pushing down hard on the haft. But, with the possibility, even if slim, that   a number of the factors that have weighed on sentiment and smothered investment intentions are closer to some sort of resolution , it's worth thinking about. Don't smirk. Source: Bloomberg Is the World Economy Sliding Into First Recession Since 2009? It's true that this week economic forecasts have been lowered all over the place. Source: Bloomberg The IMF was downbeat on the global economy, Germany spoke for theirs. And Japan downgraded their assessment . While prognosticators can't afford to assume that issues they have no control of will dissipate, investors are under no such constraints. The overnight ranges have, by and large, been modest. The most n...