Faber News Flow

It seems that the year-end repocalypse that Credit Suisse's repo market guru Zoltan Pozsar predicted exactly two weeks ago, is not going to happen this year after all, and all it took was a "bigger than QE4" $500 billion liquidity injection/backstop by the Fed. Yesterday's "turn" Term Repo which matures on January 9 saw only $18BN in security submissions ($8.25BN in TSYs, $9.75BN in MBS), below the $35BN in total availability. As such,  this was the third term repo since the start of the Fed's emergency repo program that covered the year-end "turn" that was not fully overalotted.   As shown in the chart below, the first four "turn" term repos were all oversubscribed (boxed in red), while today's was the  second "turn" repo that saw a less than full allotment.  Fed Has Thrown Kitchen Sink at Repo Issue, BofA's Cabana Says As such, it now appears that banks have reached their fill of what they believe will be sufficien...

Will OPEC+ Members Comply With Its Production Targets in 2020? SBTV guest, Professor Steve Keen, who was credited as the first Australian economist to have warned of the 2008 financial crisis years before it happened. Steve Keen believes the global economy is stuck in a 'lost decade' type of credit stagnation which will continue into the 2020s if private debt levels are not reduced.

The head of investment strategy for one of the largest piles of investor capital in the world believes stocks face  a "greater-than-usual" risk of a sizable pullback during 2020.   Joseph Davis, the head of investment strategy at Vanguard, one of the largest asset-management companies in the world and the progenitor of passive investing,  said he sees a "50% chance" of a correction - that is, a drop of 10% or more from the highs - next year.  While some joked about Davis's "coin flipper" odds... ...he explained that during more typical years, the odds of such a pullback are only 30%, and that stocks have a greater than usual chance of a double-digit pullback next year. We haven't seen a correction since, well, late last year, when stocks came a hair's breadth away from entering a bear market during the closing days of the year, culminating with one of the worst Christmas Eve sessions on record. Joseph Adinolfi But fears that the market chaos wa...

 just days after China's " moment of reckoning " in the solar bond market arrived, when China was rocked by not only the biggest dollar bond default in two decades but also the first default by a massive state-owned commodities trader and Global 500 company, when Tianjin's Tewoo Group   announced the results  of its "unprecedented" debt restructuring which saw a majority of its bondholders accepting heavy losses, and which according to rating agencies qualified as an event of default, last week a top adviser to China's central bank warned of   a possible "chain reaction" of defaults among the country's thousands of local government financing vehicles after one of these entities nearly missed a payment this month. As the FT reported, Ma Jun, an external adviser to the People's Bank of China, called on the government to introduce "intervention mechanisms" to contain the risk associated with LGFVs — special entities used in t...