Faber News Flow

One of the constantly repeated mantras of this stock market, which keeps rising no matter how much bad news is lobbed at it, is that it is climbing a wall of worry as investors refuse to participate in the "most hated bull market of all time". This has been, at its core, the primary reason why JPMorgan's Marko Kolanovic has been bullish on stocks for the past several hundred points. There is just one problem with this conventional wisdom: as often happens,  it is dead wrong,  and as JPMorgan's " bad cop"  strategist, and now chronic foil to Koalnovic's unbridled permabullishness, Nick Panigirtzoglou wrote on Friday, not only are investors very much long risk, but most asset classes have now been massively "overbought", with some positioning levels in record territory. Case in point, the combined asset-manager and leverage fund positioning in U.S. equity futures the most extended in years this decade, if not ever. Three Must-See Charts About Pos...

Since the 1950s, the Fed has embarked on 19 easing cycles, including the unconventional easing measures adopted during the course of this economic recovery, according to Deutsche Bank's Binky Chadha. However of these, 9 or almost half, saw the economy eventually slip into recession; not only that,  but the latest three rate cut resulted in a recession within 3 months of the first cut . How did the economy fare following these rate cuts? First, the good news for "insurance" rate cuts such as the one coming up, is that mini easing cycles were distinguished by very quick turnarounds in growth (2-3 months) following the first cut.  Such quick turnarounds in growth, which risk assets are currently already pricing in,  suggests factors other than the easing of monetary policy played key roles in driving them. Fed in Trump's Firing Line In Deutsche Bank's view, a resolution of the trade war remains key to a turn up in growth at the current juncture. The episodes that end...

In the runup to the Federal Reserve's Open Market Committee meetings on July 30 and July 31, policy makers are debating the value of what would normally be considered unorthodox policy actions.  The consequences of the Fed's actions in the next week  - the U.S. central bank is expected to cut interest rates by a quarter of a percentage point -  could be with us for much longer than we think, culminating in the next recession and increasing the risk to financial stability. In the meantime, the Fed could be  delivering yet another sugar high to the economy that doesn't address underlying structural problems  created by powerful demographic forces that are constraining output and depressing prices. Why an Aggressive Rate Cut is Very Likely By almost every measure,  policy makers should be considering another rate hike, not a rate cut,  in anticipation of potential economic overheating from looming limitations on output. Instead, debate has been focused on the need to take pree...