But Marc Faber, publisher of the Gloom, Boom and Doom Report, told Bloomberg TV that markets have been oversold sparking a rally, and that the developments in Europe are nothing more than another 'cosmetic fix':
"If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. And when markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher.
And so I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans savers to bailout and to continue to finance people in Spain and Portugal and Greece and so forth that are living beyond their means."
Faber said he is buying European stocks in Portugal, Spain, Italy and France, and is buying "anything that has a high yield, or what I perceive to have a relatively safe dividend. In other words, I do not expect the dividends to be slashed by 90%." Faber is however avoiding the banks.