Faber News Flow

After more than a decade since the subprime mortgage market triggered the 2008 financial meltdown, the strict lending standards placed on new homeowners post-crisis have disintegrated in the last three years. Homebuyers with low credit scores, gig-economy jobs, and high-debt loads (sounds like millennials), can now obtain mortgages and participate in the American dream of owning a home. Putting unqualified people back into homes is the latest example of stupidity from Wall Street, but the lack of oversight from the Federal Reserve and government.  The rapid surge of non-qualified, or non-QM bonds, is happening as cracks in the housing market have appeared. For instance, the housing price growth of major cities in the  S&P CoreLogic Case-Shiller Index has stalled . Delinquency rates of these unconventional loans have also started to tick higher.  "It's obviously disturbing this late in the cycle to see originations for these loans at the kind of level they've kicked up ...

While world's attention is absorbed by tectonic shifts unfolding across the Middle East,   and as many Americans are brainwashed to believe the 2020 elections are driven by the need to impeach President Trump, something very ominous has appeared "off of the radar" of most onlookers.   This something is a financial collapse of the western banks that threatens to unleash chaos upon the world. Recently was discussed why  the current financial system is on the verge of a 1923-Weimar style hyperinflation driven by Federal Reserve bailouts trying desperately to support a deleveraging of the $1200 trillion derivatives bubble that has taken over the western banking system . I also discussed the Bank of England-led "solution" currently to this crisis involves a new global "green" digital currency with new "rules" which are very similar to the 1923 Bank of England "solution" to Germany's economic chaos which eventually required a fascist ...

While world's attention is absorbed by tectonic shifts unfolding across the Middle East,   and as many Americans are brainwashed to believe the 2020 elections are driven by the need to impeach President Trump, something very ominous has appeared "off of the radar" of most onlookers.   This something is a financial collapse of the western banks that threatens to unleash chaos upon the world. In the past, I discussed why  the current financial system is on the verge of a 1923-Weimar style hyperinflation driven by Federal Reserve bailouts trying desperately to support a deleveraging of the $1200 trillion derivatives bubble that has taken over the western banking system . I also discussed the Bank of England-led "solution" currently to this crisis involves a new global "green" digital currency with new "rules" which are very similar to the 1923 Bank of England "solution" to Germany's economic chaos which eventually required a fascis...

The positive tone of trade-related leaks and jawboning last week has decidedly faded into uncertainty surrounding reports that Beijing is demanding larger reductions in tariffs before committing to the 'Phase 1' deal that Trump once described as practically finished. And in the latest leak likely intended to undermine American markets,  the SCMP  reports that  Chinese President Xi Jinping's planned trip to Brazil next week would likely come too early for him to sign the "Phase 1" trade deal.  Analysts in recent days had speculated about the trip to an emerging-markets summit in Brasilia, with many hoping it might present an opportunity for Xi to stop over in the US and seal the deal, since Chile cancelled the APEC Summit that was supposed to host the deal-signing later this month. Unfortunately, as we've learned in recent days, the two sides have yet to reach a consensus.  And that probably won't happen until after President Xi has safely returned to Beiji...

The stock market keeps hitting new highs and employment reports continue to look good. President Trump and central bankers at the Fed like to point to this and tell us that the economy is doing good. But as Peter Schiff explained in his latest podcast,  the markets aren't making highs because the economy is good. It's making highs because of the Federal Reserve's easy-money policies. Despite the fact that the economic data is deteriorating. Despite the fact that corporate earnings are falling, it is the Fed that is pushing this market to new highs by cutting interest rates, by indicating to the markets that they don't have to worry about rate hikes no matter what happens with inflation. The Fed's not going to raise interest rates. Oh, and by the way, they're doing quantitative easing, and they're going to print as much money as they have to keep the markets going up and to keep the economy propped up." In a recent article published at the  Mises Wire , ...

US Productivity  unexpectedly posted the first decline in almost four years  and labor costs accelerated in Q3, suggesting a pickup in efficiency earlier this year was more of a temporary shift. Nonfarm business employee output per hour decreased at a 0.3% annualized rate in the third quarter, well below the expected rise of 0.9% and the first decline since December 2015. Source: Bloomberg The report showed the decline in productivity resulted from   a 2.1% increase in output against a 2.4% rise in hours worked . Driving this decline was surging unit labor costs (+3.6%) following 2.4% in the prior period... Source: Bloomberg From a year earlier, productivity rose 1.4%, down from 1.8% in the prior period.  Unit labor costs were up 3.1% year-over-year, which could be a sign that a tight job market is filtering through to what companies are spending on wages. Get back to work Mr.Powell?

Today we live in a bifurcated economy: it is boom times for some and bust times for others. Your personal situation depends largely on how close you fall on the socioeconomic spectrum to the protected elite class, towards which the central banks are directing their money-printing firehoses. Why should we care about this bifurcation?  History. 2,000 years ago, in Plutarch's time, it was already 'old wisdom' that unhealthy wealth imbalances ended badly for society: Even those near the top of the wealth pyramid don't aspire to live surrounded by an impoverished underclass, forced to live hiding behind their fortifications and guards, hoping the unrest of the masses doesn't get any worse. But sadly, the US is not far off from this fate…this is Los Angeles: The streets of San Francisco, Seattle, and a growing number of other once-proud American cities look very similar. I care about our social stability which is why I believe in having a strong and vibrant middle class –...