Faber News Flow

Once again, the ability to code is trumping all other skills,   again lending credence to the "learn to code" joke   that came off as so harsh to the liberal social media elite that it wound up getting people   banned from Twitter .  But the adage is holding true in the bond market, according to Bloomberg, where quants are now striking it rich with the ability to code. The bond market is getting  "wired up by systematic players"  and firms are scrambling to scoop up the best talent.  Hedge funds are stealing each others' talent and trying to entice employees with robust compensation packages.  For instance, credit-quant clients at Selby Jennings in London are offering annual compensation of $400,000 to a Ph.D. graduate with five years' experience as a desk strategist. Ex-Citadel head of quantitative research for global credit Frederic Boyer had no issue finding work, either, after being recruited to Chicago-based Jump Trading, as the HFT firm seeks to move i...

New York Fed Headquarters Building in Lower Manhattan The Federal Reserve Bank of New York (New York Fed) is just one of the 12 regional Federal Reserve banks around the country. But it has amassed enormous powers for itself since the Federal Reserve was created in 1913. Three of those powers dwarf all others: the ability to create money electronically at the push of a button; the accepted right to meddle in the markets; and the supervision of some of the largest bank holding companies in America. After Wall Street blew itself up under the indulging and incompetent supervision of the New York Fed in 2008 and it was exposed that the Fed had  secretly created $29 trillion  in electronic money to bail out zombie banks – most of that funneled out by the New York Fed – most rational folks would have assumed that Congress would have stripped it of supervisory and money-printing powers for bailouts. Insanely, that did not happen and here we are today with the same deeply-conflicted N...

Deutsche Bank Headquarters in Frankfurt, Germany This morning, Wall Street's money spigot arm of the Federal Reserve, the New York Fed, paid out $35 billion in 14-day term loans to Wall Street's trading houses. The problem was,  this morning the banks wanted $41.15 billion  or $6.15 billion more than the Fed was offering. That's a very clear sign that liquidity remains tight on Wall Street and we have yet to enter the pivotal year-end period when banks try to dress up their books by dumping or parking their most toxic positions. Between the term loan and the overnight loan, the New York Fed paid out $115 billion this morning to unnamed securities firms on Wall Street. (The Fed won't say who is doing all of this borrowing and Congress can't summon the willpower to hold a hearing.)   According to the most recent  schedule provided  by the Federal Reserve, it is providing up to $120 billion per day in overnight, revolving loans to Wall Street's securities firms (pr...

https://www.thehindu.com/news/international/trade-war-china-says-it-has-agreed-with-us-to-cancel-tariffs-in-phases/article29908365.ece Fabrizio

https://www.ft.com/content/1d237a0e-009b-11ea-be59-e49b2a136b8d Fabrizio

https://www.msn.com/en-us/money/markets/us-productivity-falls-for-the-first-time-in-nearly-4-years/ar-AAJWMcX Fabrizio

Having explained that   "the world has gone mad and the system is broken,"   Bridgewater Associates founder Ray Dalio sat   down with CNBC   to criticize Washington's fiscal profligacy, claiming that the federal government doesn't have a plan for eliminating its growing pile of debt, and that it will need to raise taxes in a way that's "well engineered" to stave off broader societal issues. Since the beginning of the year, Dalio has established himself as a crusader for government reform,  calling for the government to treat economic inequality as if it were a national emergency.   To that end, Dalio said during the interview, which took place on the sidelines of the Greenwich Economic Forum, that the national debt, pension liabilities and health-care liabilities will ultimately have to be paid via higher taxes, since default isn't an option for the US government. Over the summer, following a trip to trippy arts festival Burning Man, Dalio offered   ...

During a lengthy interview with   Bloomberg   published on Tuesday, Goldman Sachs CEO David Solomon offered his thoughts on a number of topics, including the possibility of a recession before election day, the lessons learned from the implosion of the WeWork IPO and Uber's post-IPO flop, and the legacy of negative interest rates.  First, Solomon said that when we look back on the experiment with negative rates,  he suspects it won't look like a success.  Over time, more of the detrimental side effects will become apparent. Central bankers argue that loose monetary policy supports the economy, but low rates hurt savers and stress the financial system. "When we look back on negative rates, I think when the book's written, it's not going to look like a great experiment,"  he said.  "Growth in this part of the world has been lagging and negative rates have not allowed an acceleration of that growth in my opinion." When Solomon looks at the economy, he se...

If the supply of money in an economy is $1 billion, each unit of currency buys X (the purchasing power of each unit of currency). If the money supply is doubled without any expansion in the consumers' pool of goods and services, the purchasing power of each unit of currency falls in half.  This reduction in the purchasing power of each unit of currency is called inflation. Governments facing soaring demands and limited  tax revenues are naturally tempted to meet these demands with "free" new currency, since the political and financial pain caused by skyrocketing taxes leads to governments being tossed from power. This temptation explains the regular occurrence of hyperinflation and debt default, as the temptation to over-borrow and pile up interest payments leads to governments defaulting on their debt. In both cases — hyperinflation and debt default — there's a currency/ governance/ financial crisis that upends the status quo. This is one common objection to MMT: the...