Faber News Flow

We  noted  on Wednesday night, two-thirds of the Chinese economy has effectively shut down much of its production capacity, crippling supply chains critical to keep not only the second-largest economy in the world humming, but the entire world.  Former Morgan Stanley Asia chairman Stephen Roach  warned  last week that the global economy could already be in a period of vulnerability, where an exogenous shock, such as the coronavirus, could be the trigger for the next worldwide recession. Goldman Sachs has warned that virus outbreak could reduce Chinese GDP growth in 1Q by 1.6% in year-over-year terms, or 6.4% in quarter-on-quarter annual rate terms, resulting in a sub-5% GDP 1Q print. A growth shock in China will be felt across the world as the virus has severed supply chains. As growth expectations for China and the world come down, stocks are due for a repricing event.  S&P 500 companies generate 60.5% of their revenue from the US and the rest international.  Refinitiv  data shows...

We   noted   on Wednesday night, two-thirds of the Chinese economy has effectively shut down much of its production capacity, crippling supply chains critical to keep not only the second-largest economy in the world humming, but the entire world.  Former Morgan Stanley Asia chairman Stephen Roach  warned  last week that the global economy could already be in a period of vulnerability, where an exogenous shock, such as the coronavirus, could be the trigger for the next worldwide recession. Goldman Sachs has warned that virus outbreak could reduce Chinese GDP growth in 1Q by 1.6% in year-over-year terms, or 6.4% in quarter-on-quarter annual rate terms, resulting in a sub-5% GDP 1Q print. A growth shock in China will be felt across the world as the virus has severed supply chains. As growth expectations for China and the world come down, stocks are due for a repricing event.  S&P 500 companies generate 60.5% of their revenue from the US and the rest international.  Refinitiv  data sho...

One month ago, in a bizarre attempt to mock " QE Conspiracists " such as his current colleague and former Goldman co-worker   Robert Kaplan , Trump's chief economist   Larry Kudlow   and Morgan Stanley   CEO James Gorman   - Minneapolis Fed president and 2020 FOMC voter Neel Kashkari, also known as " Chump " for his role in arranging a bailout of his former employer Goldman Sachs alongside all US commercial banks and sticking the US taxpayers with the bill, asked "someone" to explain to him "how swapping one short term risk free instrument (reserves) for another short term risk free instrument (t-bills) leads to equity repricing." To help the confused Kashkari, we   did just that   using examples from none other than his own regulator,   the Bank of International Settlements , although he appears not to have understood anything we said, because just a few days later, his former Fed and Goldman colleague, Bill Dudley, echoed Kashkari and confi...