Faber News Flow

(Update 8:45am ET):  The euro dropped to session lows, erasing earlier gains as Lagarde speaks. She said the euro-area economy is clearly rebounding but the speed of recovery depends on the pandemic and valuations. EUR/GBP fell through its 55-DMA to a two-week low. The ECB released new GDP and inflation forecasts which looked as follows: GDP: 2021 at +5.0% vs +4.6% prev. 2022 at 4.6% vs +4.7% 2023 at 2.1% vs +2.1% Inflation: 2021 at +2.2% vs +1.9% 2022 at +1.7% vs +1.5% 2023 at +1.5% vs +1.4% Ominously, as the following chart shows, despite the current surge in inflation the ECB still does not see inflation hitting its 2% target durably... ... which as Viraj Patel asks " what's the point of the ECB if they can't influence inflation." So the ECB's inflation targets suggests they will never get to the new 2% inflation target durably in this cycle........... What's the point of the ECB if they can't influence inflation  $EUR   pic.twitter.com/jvIUp3ioYN — Vir...

Yesterday, the ECB announced that, in Q4,   it would " modestly lower the pace of net asset purchases under the PEPP than in the previous two quarters " (even as Lagarde scrambled to convince markets   not to  call it tapering ) with   Reuters sources  adding that "policymakers set a   monthly target of between 60 billion and 70 billion euros"  down from 80 billion currently " with flexibility to buy more or less, depending on market conditions."  Putting this   non-taper taper  in context, Nomura calculated that " even if net PEPP is scaled down to €60bn/month the ECB would still buy 85% of the remaining gross supply, strongly supporting EUR rates ." Despite the shrinkage of ECB bond-buying, Lagarde made it clear that the fiscal spice must flow: *LAGARDE: FISCAL SUPPORT HAS TO BE CONTINUED *LAGARDE: FISCAL SUPPORT NEEDS TO BE MORE TARGETED And to facilitate just that despite periodic loud if mostly theatrical objections from conservative "N...

While China's trade data published overnight may have smashed expectations, with both exports and imports coming far stronger than expected, and surprising China watchers who were expecting a far worse print amid the the disruptions to operations at Ningbo port in August (with Goldman pointing out that "the impact on trade activities was limited likely because lockdown restrictions at ports were relatively targeted and throughput volume was redirected to nearby ports"), the reality is that China's economy continues to flounder as the most recent set of contractionary PMI prints indicated. The latest proof of China's economic deceleration, came from the latest consumer spending data which showed that Chinese consumers cut back sharply on buying cars and apartments in August as stronger regulation of the property market and a broad Covid outbreak in the country further undercut the economy's already slowing recovery. Property sales in the four first-tier cities ...

We've all been so focused on the internal divisions in the U.S. and with  Davos  trying to run the table here that we've neglected somewhat old theses about the potential breakup of the European Union. The EU is a mess.   Everyone knows this. Its banks are  zombies .  Its bond markets  oxymorons .  Its trade relations with the world  degrading .  And its relationship with the people it nominally governs is  turning toxic .   Moreover, it is led by a bunch of unelected, horrific women who are all the very definition of midwits and ideologues. These are the faces that you want to look at when you consider why women shouldn't run countries, companies or even school boards. Hell, the older I get, the less I think women should even vote, but we'll leave my wife's wisdom aside for now.   Source: M. Armstrong Honestly, the only woman not pictured here who should be is French President Emmanuel Macron.   These women were...

A new Beijing Stock Exchange was announced by Xi Jinping at the  Global Trade In Services Summit  in Beijing last Thursday. Xi said the exchange would "deepen reform of the New Third Board," referring to the existing financing mechanism in Beijing for Small and Medium-Sized Enterprises (SMEs). SMEs are firms with fewer than 500 employees. Traditionally they have  struggled  in comparison with larger companies to acquire loans from banks. The new stock exchange appears designed in part to make redress for that by connecting SMEs with retail investors. It comes against the backdrop of increased regulatory scrutiny of some of China's largest existing publicly traded firms. China has curtailed the power of big tech companies with moves such as  blocking  ride-hailing firm Didi from app stores in July over data privacy issues and fining other e-commerce platforms including  Alibaba  over alleged monopolistic business practices. Xi made explicit that th...