Faber News Flow

It appears the US cash market open is a 'bearish' event now. After ramping gently overnight, US equity markets are dumping as markets open, erasing all gains from the Boxing Day spike... So much for the Santa Claus Rally... Treasuries are bid after their yield spike... And gold is rallying...

After 11 years of "the Fed is the market" expansion, the Fed has now reduced its bloated balance sheet by 6.7%. This is normal, right? So here we are in Year 11 of the longest economic expansion/ stock market bubble in recent history, and by any measure,  the hour is getting late , to quote Mr. Dylan: So let us not talk falsely now the hour is getting late Bob Dylan, "All Along the Watchtower" Sony Says Image Sensor Demand Outstripping Supply The question is: what would happen if we  stop talking falsely ?  What would happen if we started talking about end-of-cycle rumblings, extreme disconnects between stocks and the real economy, the fact that "the Fed is the market" for 11 years running, that  diminishing returns  are setting in, as the Fed had to panic-print $400 billion in a few weeks to keep this sucker from going down, and that trees don't grow to the troposphere, no matter how much the Fed fertilizes them? When do we  stop talking falsely  abou...

Veteran Wall Street strategist and Yardeni Research founder Ed Yardeni told  CNBC  on Friday that the stock market melt-up could run into exhaustion because valuation multiples are getting too rich. "I'm concerned about a possible melt-up here," Yardeni said. "I've been shooting for 3,500 for the S&P 500 by the end of next year, and we're getting closer. Faster than I would have expected." He warned: ″[A] 10% to 20% [correction] would be quite possible if this market gets to 3,500 well ahead of my schedule."  Yardeni said he's concerned about the market's latest melt-up and how everyone isn't worried anymore.  "This is not a cheap market," Yardeni said. "In early October, I looked around and said, 'you know, maybe there's some value overseas. So maybe you really got to look at emerging markets.'"  Several months ago, Yardeni sounded more carefree, appearing on CNBC to discuss his 2020 year-end S&P ...

In a volatile year for commodities and energy, S&P Global Platts' news, pricing and analytics teams explored many of the biggest themes and trends through infographics. Here are a selection. Tariff disputes weigh on commodities trade After around two years of   trade tensions  between the US and China, S&P Global Platts analyzed the impact on global product flows. How to replace Iranian oil? After US sanctions on Iran tightened with the non-renewal of waivers for oil importers, there were still plenty of options on the table to replace specific Iranian crude grades. The biggest carbon emitters Ahead of COP 25 in Madrid, S&P Global Platts crunched the numbers to show carbon emissions of the biggest global economies, and their costs compared to other major expenditures. US states ramp up clean energy goals President Trump may have disengaged from global efforts to tackle climate change, but individual US states are still pushing ahead with ambitious targets to ramp up ren...

Bank of America says that one of the dominant trends for the 2020s will be the "end of globalization" as countries increasingly realize that the phenomenon has brought unsustainable "social disruption." In a report mapping out what to expect over the next decade, BofA analysts said that largely unchecked globalization, which ran roughly from 1981-2016, "is coming to an end." This change will take place due to " the widespread recognition that while globalization has meant lower consumer prices, it has also meant slower growth, precarious employment and social disruption ." This massive shift will make commodities like precious metals and real estate safer investment because governments will move to impose protectionist economic policies. "Countries will develop explicit national industrial policies and boost spending on R&D to foster local innovation, protect nascent industries, and shield national champions from hostile foreign takeover...

Over the past two years there has been growing investor unease (if not when the Fed is actively involved in propping up risk assets) and much speculation that the massive increase in corporate US debt over the past decade, and specifically the record accumulation in the lowest investment grade-rated, BBB debt, would eventually hit a tipping point, sparking a credit crisis. Shown visually, the problem roughly reduces to the following: corporate debt has doubled from $5 trillion in 2007 to $9.5 trillion halfway through 2019 with corporate debt-to-GDP now back to levels which traditionally presage a recession. Amid this massive debt increase, the principal risk is that the biggest growth was that in BBB-rated debt (which now  amounts to over $3.2 trillion ), is just one downgrade away from junk, and is also why many skeptics have been warning of a barrage of "fallen angels" before or during the next recession.  Hilltop's Kozlik 'Cautious' on State, Local Government D...