Faber News Flow

"Most investors are primarily oriented toward return, how much they can make and pay little attention to risk, how much they can lose." -  Seth Klarman Growing wealth occurs over a long time horizon, including many bullish and bearish market cycles. While making the most out of bull markets is important, it is  equally  important to avoid letting the inevitable bear markets reverse your progress. Making this task much more difficult are extreme market environments and inane investor beliefs at such times. When markets are frothy and grossly overvalued, greed takes over, leading to lofty performance expectations and excessive risk stances. Equally tricky is buying when fear grips the markets. In both extremes and all points in between, we must maintain investor Zen. The best way to accomplish such mindfulness and awareness of market surroundings is to understand the risks and rewards present in markets.  Zen-like awareness allows us to run with the bulls and hide from the bear...

In just a few days, US high frequency economic data will lap March 2020 when the US economy literally shut down and sent all economic indicators in freefall to a degree not seen since the Great Depression (and in many cases, more). When that happens, while March/April economic data will rise only modestly compared to the previous month, it will be a veritable explosion compared to the shutdown a year ago. This is the so-called "base effect" and while many economists will ignore it, especially when it comes to inflation data, the impact for many will be jarring especially when investors see charts that have gone, for lack of a better word, vertical. To preview the annual change base effect that is coming in everything from retail sales, to income and spending, to housing data, to jobs and unemployment, we have pulled some of the most representative real-time indicators available from JPMorgan and Bank of America, starting with what is perhaps the most illustrative chart of all...

Traders across Wall Street and on the buy side are anxiously waiting to see if any more big block trades in names like VIAC, GXU, TME and the other constituents of Archegos founder Bill Hwang's busted portfolio will wander across the tape. As journalists, regulators and academics question how Hwang was ever allowed to take on so much leverage (a question that has yet to be thoroughly answered), Bloomberg reports that  regulators have already started asking prime brokers tough questions about how this was allowed to happen. Bloomberg reported that the prime brokers spent Monday briefing US regulators as Washington starts to dig in into a historic fund blowup that could have broader implications for market stability. According to the report, the SEC hastily summoned banks for meetings on what triggered the forced sale, while Finra, the industry self-regulator, asked brokerages about the impact to their operations and credit risks, people familiar said. "We have been monitoring t...