Faber News Flow

Sounding a markedly more somber note about the global economy than he has in the past few years, JPMorgan CEO Jamie Dimon released his annual 'investor letter' Monday morning, warning the world that, from Dimon's vantage point, at least, the US appears to be on the verge of a "bad recession" that could be exacerbated by "financial; stress similar to the global financial crisis of 2008." Though, leaving off on an optimistic note, he warned that while the challenge ahead might be great, he believes the US economy can emerge from it "stronger" than in the past. "We have the resources to emerge from this crisis as a stronger country," Dimon said in the letter. "America is still the most prosperous nation the world has ever seen." This, after sell-side banking analysts have spent the last two weeks telling CNBC's audience that the banks are much better capitalized this time around (though excessive corporate debt is keeping s...

I had a lot of time away from screens this weekend which is probably a good thing. Always good to get to step away and get a different perspective away from the constant bombardment of news, opinions, and, dare I say, conspiracy theories. People never lose their collective shit more than during times of crisis and uncertainty. But I'm not here to talk about conspiracy theories, rather I just wanted to offer some perspectives. And feel free to disagree with them.   We're all working with an evolving set of data points (health, macro, interventions, etc.) and lots of global emotions ranging from ignorance to hysteria during a time of great uncertainty. Banks Will Go Through 'Earnings Hell,' Dimon May Provide Lift, Mayo Says But here's a few thoughts to consider as we collectively navigate through this mess. First off, this is not a drill, and everybody's lives are affected in one or the other, many severely, many are losing their lives and it's a horrid traged...

One market is saying "hope"... Dow Futures are up over 1,000 points, topping 22k... While another is yelling "nope"... Houlihan Lokey's Gold Expects a Spike in Defaults as 'Severe' Recession Looms Gold futures are up over 2%, nearing $1,700... Is this investors claiming to  "...barbell the virus turning point?" The dollar has drifted back to unchanged... And bonds are offered... Who will be right at the end of the day?

The sheer speed of the coronavirus crisis means   investors are way behind the curve in assessing its long-term impact on economies, companies and stock market valuations. The global business environment is being transformed -  we are all socialists now. This is about more than just the failure of earnings estimates to keep up with the virus impact -  investors need to disregard projections that an end to the crisis will restore the pre-outbreak status quo. Decades of pushing government out of business are being reversed in mere weeks, with policy makers telling companies where, how and if they should operate - whether they can pay dividends, buy back stock or fire employees. In other words, governments are almost fully taking over free markets, with the profit principle dethroned as the key business driver. This changes the rules of the game for investors. Look at crude oil for example, where U.S. companies that were on the way to going bust amid last year's supply and demand shoc...