Faber News Flow

Following the drops in US Manufacturing survey data (even with ISM's data skewed by the vendor-delivery-bias issues), expectations were for further deterioration in the services side of the economy in March. Markit's Services PMI tumbled from 49.4 to 39.8 (but was better than the expected and flash prints) ISM's Services survey fell from 57.3 to 52.5 (the biggest decline since 2008) but dramatically better than expected Source: Bloomberg China's Manufacturing PMI Rebounds in March While March was well above the median forecast in a Bloomberg survey,  the figure was propped up by considerably longer lead times . Similar to the group's manufacturing report, the supplier deliveries index for service providers surged by the most since 1997 as the Covid-19 outbreak resulted in supply-chain disruptions. The IHS Markit Composite PMI Output Index sank to a new low of 40.9 in March, notably down from 49.6 in February. Source: Bloomberg The marked decrease in business activit...

By the mid 1300s, the Republic of Florence in modern day Italy had experienced one of the greatest economic booms in human history. In less than a century, Florence had grown from a tiny, irrelevant backwater to become one of Europe's largest cities and preeminent financial center. The expansion was truly impressive. Florence's population had grown 10x. It had become a leading manufacturer in both weapons and textiles. (Many etymologists believe the word 'pistol' is derived from the name of a town near Florence called Pistoia, which was renowned for its quality arms.) And the city's innovations in the banking industry were revolutionizing business across Europe. Florence's phenomenal economic success is quite similar to what the United States experienced in its early history. Naturally, though, they managed to screw it up. At the turn of the century in the year 1300, the Republic of Florence's public debt was quite manageable at just 50,000 gold florins. Tha...

Update (1740ET):  Following reports that small banks were on the verge of pulling out of the administration's $350 billion "Paycheck Protection Program" over fears they might be blamed for corruption and fraud due to hurried oversight, the White House got Jovita Carranza (the woman who replaced Linda McMahon at the helm of the SBA) and Steve Mnuchin out in front of the cameras to deny reports about a "power struggle" or someother breakdown between them. In addition to assuring the press that they had stayed up "until 4 am" to smooth out all issues, Mnuchin and Carranza insisted that checks would start landing in bank accounts and small businesses would have access to the loan programs (remember, this money was supposed to cover rent, utilities and payroll due on April 1) which would be "up and running tomorrow." But as Mnuchin went on to discuss the program and how small business owners could access the funds, he mentioned one interesting lit...

At the depths of both the post dot-com bubble and the financial crisis, the New York City Purchasing Manager Current Business Conditions index, a relatively obscure indicator which focuses on the economy of the financial capital of the world, slumped to levels in the mid-20s after normally being found in a range just above 50, indicating the Big Apple is humming along. Then moments ago we got the first post coronacrisis print:  at 12.9 this was the lowest reading on record, crashing from a solid 51.9 in February (there was no expectation).  Specifically: The Business conditions outlook fell to 37.9 vs 53.8 prior month The Employment index fell to 36.7 vs 49.3 Hong Kong Retail Sales Plunge Most on Record As with all diffusion indexes, a reading below 50 indicates contracting activity, while readings above 50 suggest expansion. It was not clear what a catastrophic reading of 12.90 indicates for the Big Apple, one which at this rate may drop to 0 next month, but the dreaded D-word comes t...

After a surprise tumble in January (before the virus impacts really hit), US Factory Orders were expected to rebound modestly in February (data released today and still lagging the current effects of the lockdowns and supply chain disruptions). However, unsurprisingly, Factory Orders were flat (0.0% MoM) in February (below the +0.2% expectations). However, this did lift the YoY change in factory orders into the green (barely) at +0.1% YoY - the first annual gain  since July Source: Bloomberg E x-Transports, factory-orders tumbled 0.9% MoM (the worst since Nov 2018), and YoY declined 0.1%...

Bill Moyers talks with former Citigroup Chairman John Reed to explore a momentous instance: how the mid-90's merger of Citicorp and Travelers Group – and a friendly Presidential pen — brought down the Glass-Steagall Act, a crucial firewall between banks and investment firms which had protected consumers from financial calamity since the aftermath of the Great Depression. In effect, says Moyers, they put the watchdog to sleep. There's no clearer example of the collusion between government and corporate finance than the Citicorp-Travelers merger, which — thanks to the removal of Glass-Steagall — enabled the formation of the financial behemoth known as Citigroup. But even behemoths are vulnerable; when the meltdown hit, the bank cut more than 50,000 jobs, and the taxpayers shelled out more than $45 billion to save it. Now, John Reed regrets his role in the affair, and says lifting the Glass Steagall protections was a mistake. Given the 2008 meltdown, he's surprised Wall Street...

Since 2017,   we have been following the bread-crumbs of the   mysterious VIX-whale nicknamed "50-Cent"  - so-called for his habit of scooping up super-cheap VIX calls at a price around 50c (and with very good timing): April 2017 - Who Is The Real "50 Cent" - A Mystery Trader Is Systematically Betting Massive On A VIX Spike Feb 2018 - VIX-Trader '50Cent' "Steamrolls" XIV-Traders To $200 Million Gain Jul 2019 - Is VIX Whale '50-Cent' Back? Volatility Collapse Sparks Huge Bearish Bets Dec 2019 - VIX Options-Whale '50 Cent' Re-Emerges As New Short-Vol ETF Appears He is among several VIX whales discovered in recent years. What Sanders, Biden, And Trump Want To Do About Health Insurance And now,   according to The FT,  the real '50-cent' has stepped forward as  Jonathan Ruffer - a London-based fund manager for investment firm Ruffer Capital. His strategy, which is believed to have spent $200m to protect against a rise in volatili...