Faber News Flow

The crisis in Europe will come from Germany.  Germany has entered a period of political crisis that,   as yet, has not exploded . But the pyre is built, the torches lit and all that remains is dragging Chancellor Angela Merkel up and setting the whole thing on fire. For those that want to understand the fundamental impulses which have led the European Union to where it is today and Germany's central role one really needs to read  Bernard Connolly's "The Rotten Heart of Europe." It's a book that damns pretty much everyone in their monomaniacal drive for the European Project but, Germany, in particular, to me, comes across the worst. Because the design of the euro, as a currency, was guided by German industrialists looking for the advantage a single currency would bring them. This is a point I've made many times that the single exchange rate underprices the value of Northern European industrial entities while overpricing Southern Europe's productive capacity...

"Whatever you think - he got elected because he pointed out huge troubles in our economy and democracy!" No one should be in the least little bit surprised at yesterday's market tremblor following Trump's big reveal – he might not make a trade deal this side of the election! Quel Horror. (Sarcasm Alert) Stocks gapped down, and bonds rallied strongly – a knee jerk reaction. But it is more than that.  No one should be particularly surprised a China deal is off the table. (Bloomberg seem to think it is already back on). If you had been watching closely, it should have been obvious the "we're going to get a deal" story could only be extended so long.  The question is how deep will this current wobble go?  Could it become a correction?  Or even a full Christmas crash?  Speaking to investors yesterday, it definitely felt like something is breaking .  It's not about the China/US spat – that is well understood. My clients are not stupid and understand how th...

Stocks closed out November on a high note with the hope of a trade deal fueling Wall Street. But is this warranted? And   are consumers really doing as well as the mainstream would have us believe?   Peter Schiff appeared on  RT Boom Bust  last week to talk about it. He said it's all a house of cards and it's going to come crashing down on American consumers. Peter started out the interview talking about Hong Kong. The territory became a focal point in trade talks between the US and China after President Trump signed the Hong Kong Human Rights and Democracy Act supporting pro-democracy protestors. Peter said US criticism is a bit hypocritical. If you look at the index of economic freedom that the Heritage Foundation puts out every year, Hong Kong ranks number one. Today, it's the freest economy in the world.  The United States ranks 12th on that list. So, I'm more concerned about the freedom of our own people. So, rather than worrying about the freest people in the worl...

Not only will events outrun Plan B, they'll also outrun Plans C and D. We all know what  Plan B  is:  our pre-planned response to the emergence of risk. Plan B is for  risks that can be anticipated , regular but unpredictable events such tornadoes, earthquakes, hurricanes, etc. In the human sphere, risks that can be anticipated include temporary loss of a job, stock market down turns, recession, disruption of energy supplies, etc. Hidden in most Plan B's are a host of assumptions that  all the systems running in the background pf the economy will remain stable.  Even if electrical and cell-phone service go down, for example, we assume the outage will be temporary. We assume delivery of energy and food will resume shortly, we assume medical care will be available somewhere nearby, roadways will soon be cleared and so on. In other words, we assume emergencies will be short-lived and that these  non-linear events  will leave the rest of our social and economic orders as fully inta...

James Gorman, Chairman and CEO Morgan Stanley, Testifying Before the House Financial Services Committee in April 2019 James Gorman is the Chairman and CEO of Morgan Stanley. He also sits on the Board of Directors of the Federal Reserve Bank of New York (New York Fed), one of Morgan Stanley's regulators. The New York Fed is one of 12 regional Federal Reserve banks – but the only one willing to turn on a multi-trillion dollar money funnel to Wall Street's mega banks when they need a secret bailout. Since September 17 of this year, the New York Fed has pumped upwards of $3 trillion in revolving loans to trading houses on Wall Street, without naming which firms are getting the money and why they're getting it. From December 2007 to the middle of 2010, the New York Fed turned on its money funnel to Wall Street  to the tune of $29 trillion  – a fact it battled in court for years to keep secret. Today, the New York Fed will only say that it's making these new loans, which tall...

What a difference a year makes. It was last December, which incidentally was the worst December for US equities since the Great Depression, that we  showed a remarkable chart : an astounding  93% of all assets tracked by Deutsche Bank were down for the year - worse than even the years of the Great Depression. 2018 would go on to close with a similarly deplorable record: of all assets, only cash posted a positive real return. Fast forward 12 months when things couldn't be more different, and with November now in the history books we have a performance mirror image on our hands: as Deutsche Bank's Craig Nicol writes today , all 38 assets in its tracking universe have posted positive YTD returns in both local currency and dollar terms. Equity markets still lead the way with notable mentions for the Greek Athex (+49.8%), FTSE MIB (+32.4%), MICEX (+32.3%) and NASDAQ (+31.9%). Credit markets are up anywhere from +5.2% to +16.5% with USD outperforming EUR. Meanwhile bond market return...

Bridgewater Associates Founder Ray Dalio and Tudor Investments' Paul Tudor Jones   joined Yahoo Finance   for the 2nd annual Greenwich Investment Forum earlier this month. Speaking directly after Connecticut Gov. New Lamont, with whom Dalio is working to bolster Connecticut's schools via a $100 million gift  - the largest charitable gift the state has ever received, PTJ and Dalio largely focused their "Fireside Chat" on  the flaws of Fed policy, the dangers of America's ballooning budget deficit, and the steps that must be take to "stop us from killing each other" in a violent revolution,  as Dalio warned.  PTJ spoke first, starting with a few words about President Trump, praising him as "the greatest salesman" to ever enter the American political arena.  After all, didn't Trump convince the Republican Party - once the party of fiscal piety - that 5% budget deficits 10 years into an economic rebound are necessary to protect the economy. Sim...