Faber News Flow

Have you been watching the madness that has been unfolding on Wall Street?   Even though we are in the middle of the worst global pandemic in 100 years, and even though rioters and looters  have been turning our major cities into war zones , stock prices have been going up day after day.  In fact, the Nasdaq closed  at an all-time record high on Monday .  Sometimes people ask me to explain this rationally, and I can't, because the Federal Reserve has transformed our "financial markets" into a total mockery at this point.   The real economy is literally collapsing all around us, but thanks to Fed intervention stock investors are doing just fine.  It has been absolutely disgusting to watch, and if Adam Smith could see what was happening he would be rolling over in his grave.   Unfortunately, thanks to our rapidly declining system of education most Americans don't even know who Adam Smith is anymore. I can't recall another time in modern U.S.

Since the beginning of the year, the corona crisis has monopolized news coverage to the extent that a lot of very important stories and developments either went underreported or were ignored altogether. One such example was the  very surprising ruling that came out of the German Constitutional Court in early May , which challenged the actions and remit of the European Central Bank (ECB). In essence, the court's decision made it clear that the ECB's quantitative easing (QE) program did not respect the "principle of proportionality," abusing the ECB mandate, while the German government failed to challenge the bank's policies as it should have.  The ruling also mentioned the side effects of the program and of the ECB's overall ultraloose policy direction, such as the penalizing of savers and pensioners. As was highlighted in the official decision, "the ECB fails to conduct the necessary balancing of the monetary policy objective against the economic

The Federal Reserve is desperately hoping that the pandemic, the coast-to-coast protests and the military generals' scathing rebuke of the President's plan to "dominate" grannies and college kids with bayonets and Black Hawk helicopters in the streets would distract the public from its money-feeding tube to Wall Street. Unfortunately for the Fed, Americans can multitask. Between Monday and Friday of last week, the Fed made $304.20 billion in repo loans to Wall Street's trading houses. That was 230 percent of what it made the week before and 700 percent of what it loaned the week before that. (See chart above.) This would suggest that the liquidity crisis is heating up and/or that it's taking ever larger amounts to levitate the stock market as sellers come back in. The Fed has gone completely bonkers when it comes to its money spigot to Wall Street. On March 17, the New York Fed announced that it was going to be offering daily on

Coronavirus causes deepest economic crisis since the Great Depression Summary COVID-19 is expected to result in contraction of the global economy by 4.1% in 2020 This means that the corona crisis will be the deepest economic crisis since the Great Depression in the 1930s We expect a relatively limited recovery in 2021, as many countries will continue to be bound to a 'six-foot economy' for a long time Businesses in these countries will not be able to offer as many goods and services as they did previously, and demand will remain low for a long time Political tensions between the US and China have flared up again, and we expect the truce in the trade war to come to an end Downside risks such as a second wave of infections or a financial crisis continue to dominate The global economy will contract by 4.1% The rapid succession of developments relating to the coronavirus (see Figure 1a and 1b) is leaving deep scars in the global economy. We have therefore had to downgrade our estim

The World Bank has just released its new " Global Economic Prospects"  report, describing how the  COVID-19 pandemic  has unleashed a  "devastating blow"  on the global economy -- shredding all hopes that a V-shaped recovery will be seen this year. The report goes on to say the global economy will  contract for the first time  since World War II and emerging market economies will shrink for the first time in six decades -- the result of the global economic downturn is between  70 to 100 million people will be thrown into instant poverty .  The report investigates the depth and breadth of the economic impacts triggered by worldwide virus lockdowns in the first half of 2020, along with the  socio-economic consequences  thereafter. We make sense of this in the piece titled  "Global Instability, Soaring Deficits And Civil Disobedience: Are We Back In The 1960s, And What Happens Next?."   It said the 2020 baseline forecast for  Global GDP would be a contraction