Tuesday, October 16, 2012

Marc Faber: Global Markets Poised For a Sharp Downward, Expect Stocks to ... - Wall Street Pit

Global markets have been deteriorating technically and are setting up for serious setback, ultra-bear Marc Faber said Tuesday on CNBC’s “Fast Money”.

Faber stood by his call that within the next six to nine months stocks would fall 20%.

“Basically, I think QE3, which I think is unlimited, and bond purchases by the ECB bailout of countries have been largely discounted by the market, and the markets have been weakening technically, so I believe that we may have here quite a serious setback,” he said.

Last week, Faber told CNBC he was preparing for a full correction for the market, which has been up-trending since early June.

Full Faber clip

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Sunday, October 7, 2012

Profit taking correction

Mr. Marc Faber warns of profit taking in some of the most popular assets on the market. Faber feels that a recession is coming and thinks profit taking will lead to a correction.

Tuesday, October 2, 2012

Financial guru Faber knocks Thai pledging scheme

Chiang Mai October 1, 2012 1:00 am "I think that, to be quite honest. I as an investor, it concerns me that, for instance, the government appoints principally people connected to Mr Thaksin for, say, Thai [Airways] International," he said.

"As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them. There is |still a lot of so-called cronyism. |In other words, I have political power and you're a businessman or you are someone who was at the party before and I give you a good job and the position of power," he said.

The Swiss investor and publisher of the "Gloom Boom & Doom Report" newsletter was speaking at his home in Chiang Mai in an exclusive interview with The Nation Group. Faber also criticised the Yingluck Shinawatra administration's multibillion-baht rice-pledging scheme, saying any price-support mechanism could basically distort the free market and lead to unintended consequences.

"Rice is not endemic to Thailand. Rice is a commodity traded all over the world. If the price should be fixed, it should be fixed all over the world," he said.

Nonetheless, Faber said he was "reasonably positive" about the future of Thailand, where he has resided since 2000 and has invested in some properties and Thai stocks.

"Thailand is unlikely to be a dynamic economy. It's not going to be like South Korea or Taiwan. In the long run, it could easily grow at 4-5 [per cent] per annum for the next 10-20 years unless the whole global economy collapses.

"It's like in the US ... tension between the Democrats and the Republicans are very high ... they just can't agree on anything. In Thailand, I don't know ... the red shirts, the yellow shirts ... both have probably some good and bad points. There is still too much corruption," he said.

Regarding his view on the global economy, Faber said he believed the Chinese economy was currently growing at a maximum of 4 per cent annually and the world economy overall was decelerating dramatically.

Nonetheless, Faber said the stock, gold, bond, currency and real-estate markets were different stories from the official economic figures since central banks would keep printing out money. This money has largely flowed to rich people while the lower middle class and poor have suffered from a higher cost of living.

Faber suggested that the average investor split his or her portfolio equally among stocks, property, gold, and corporate bonds.

"The purchasing power of money has depreciated a lot, and maybe the gold is still cheap. I will never sell my gold," he said.

Faber said the entire financial sector was vulnerable to a setback and a "systemic failure" would occur sooner or later.

"Now I happen to believe if you have money on deposit in Thai banks, it's much safer than if you have deposits with Citigroup, UBS, Royal Bank of Scotland and so on, because Thai banks don't have huge derivative portfolios. JPMorgan, they have trillions of dollars in derivatives. Nobody knows how to value this 'garbage'."

Faber said Thai property was still reasonably priced when compared with real estate in other parts of the world. He said he had invested in some Thai stocks including Bumrungrad International Hospital, Bangkok Dusit Medical Services, CP All, Charoen Pokphand Food, and some companies related to telecommunications and real estate.

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After the Fed announced unlimited QE3, Faber appeared on Bloomberg TV saying that Fed policy will destroy the world.

Faber on more Federal Reserve stimulus:

“It is difficult to tell what will happen. I happen to believe that eventually we will have a systemic crisis and everything will collapse. But the question is really between here and then. Will everything collapse with Dow Jones 20,000 or 50,000 or 10 million? Mr. Bernanke is a money printer and, believe me, if Mr. Romney wins the election the next Fed chairman will also be a money printer. And so it will go on. The Europeans will print money. The Chinese will print money. Everybody will print money and the purchasing power of paper money will go down. And I don't like bonds. I don't particularly like equities, but I think equities are a better space to be in than bonds.”

On what he will do with his portfolio in reaction to yesterday’s move:

“I own corporate bonds and I recently, as I wrote, I pulled some bonds from Kazakhstan because Kazakhstan economically is a much sounder country than the United States or any European country. But it is in small doses. I wouldn't put all of my money in corporate bonds. They have an equity character. I also own equities still in Asia and as I pointed out already four months ago for the first time in my life I bought equities in Portugal, Spain, Italy and France because they were unbelievably distressed. I think what people overlook today is they look at markets but they don't look at what happens within the market. In the last 12 to 18 months the U.S. has massively outperformed European markets, Asian markets with a few exceptions and now some markets are relatively depressed. I could argue the Chinese stock market is now relatively depressed. So the asset allocators may move some money in Chinese stocks and then they can rally 10 percent to 20 percent.”

“The fallacy of monetary policy in the U.S. is to believe this money will go to the man on the street. It won't. It goes to the Mayfair economy of the well-to-do people and boosts asset prices of Warhols…Very happy. Very good for the Fed. Congratulations, Mr. Bernanke. I’m happy. My asset values go up but as a responsible citizen I have to say the monetary policies of the U.S. will destroy the world.”

On whether there’s any credibility in the Federal Reserve trying to bring down the unemployment rate and improve the housing market:

“I think there is a huge misconception and fallacy that money printing can actually improve the rate of employment because the money flows down into the system. It goes first into the banking system and into financial institutions, into the pockets of well-to-do people. If you drop money into my pockets and you have at the same time increased government involvement in the economy and we have the government growing with its regulation and legislation that stifles economic development. I don't want to build a new business. But what I may do is look around the world, where are the distressed assets. So I will go and buy existing assets, takeovers. But takeovers don't add to employment. They destroy employment. Secondly, I would just like to mention one thing. This money printing business, they have been saying that for the last 15 years that bailing out LTCM were necessary. Then they say the NASDAQ collapsed after March of 2000. We need to create another bubble, print money. They created a gigantic credit bubble and the misery that we have today.”

On where gold prices are headed:

“I think that the trend for gold prices will be steady, but the trend for the dollar and other currencies will be down. In other words, in dollar terms the price of gold will trend higher. How high it will go, you have to call Mr. Bernanke. And at the Fed there are other people actually that make Mr. Bernanke look like a hawk. So they are going to print money. And they have done it for ages already and where has it led? To record high unemployment essentially since the Great Depression and structural unemployment. Unemployment goes among low paying jobs, not high paying jobs. So, you ought to own some gold, but don’t store it in the U.S. because the Fed will take it away from you one day.”

On whether he would buy property in the United States:

“Yes. Property prices in the south of the U.S. are very inexpensive compared to property prices around the world. The tragedy is that the people that were evicted from these homes have no access to credit. They have no money. They can’t buy them. So, with easy money by the Fed well-to-do people can buy these properties and then rent them out to the people that were kicked out of these homes. What a great achievement of the Fed. First they create the property bubble and destroy the wealth of poor people, then the poor people have to rent and the rents have been up over the last 12 months. What a great achievement. Thank you, Mr. Bernanke.”

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Commodities Will Continue To Fail near term

China looks like it is entering a slow down and this could affect Commodities and industrial metals such as copper, steel, aluminum, and others. They have struggled as of late given the shaky economic indicators from around the world. Marc Faber thinks that industrial commodities will remain under pressure due to the fact that the Chinese economy is slowing down considerably. If China were to cut its demand prospects from something like copper or steel, it could have devastating impacts on the commodities themselves, according to Faber's theory. Below, we outline several options to make a play on Faber's prediction.

Monday, October 1, 2012

MARC FABER: I'm Bearish On Stocks, Gold And Everything Else - Business Insider

Marc Faber is still convinced that there's a 100 percent chance of a global recession and that stocks are due for a big sell-off.

While Faber favors gold, he thinks that it too is due for a correction after staging a huge rally. It has a huge rally from around – the low was at $1,522 last December and we are now over $1,700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.

However, Faber's bearish stance isn't so bearish that he has dumped everything. I’m not 100% in cash, for the simple reason that I could be wrong, but in general I think that people that have a heavy exposure to assets being that equities, or gold, or other commodities. I think they will face some profit taking here.

View the original article here

US Economy has 100% Chance of Entering Another Recession – Marc Faber - Wall Street Pit

Gloom Boom & Doom Report publisher Marc Faber spoke to FOX Business Network (FBN) about his concerns regarding investing in the United States. Faber states that he is “bearish about practically all assets near term” and that “we’re entering a correction time.” Faber further states that equities, gold, and other commodities “will face some profit taking.” Excerpts from the interview are below, courtesy of Fox Business Network.

On Gold in today’s economy:

“It has a huge rally from around – the low was a 1522 last December and we are now over 1700 and I think we need a correction here. In fact, I am now bearish about practically all assets near term I think we’re entering a correction time where there will be some disappointments, where stock markets, from the recent times can easily drop 20%.”

On being bearish on almost all assets in “the near term”:

“I’m not 100% in cash, for the simple reason that I could be wrong, but in general I think that people that have a heavy exposure to assets being that equities, or gold, or other commodities. I think they will face some profit taking here.”

On whether or not the U.S. will enter a recession:

“I think some people in the US, actually the ECRI already say that the US is in a recession. But of course we have to consider the following, an economy is a very large vessel, there are different sectors. And some sectors are improving like housing in the U.S. is improving. The problem with improvement in housing is that stocks have already gone up very substantially, they more than tripled from their low. And so we are ahead of ourselves. The Greek stock markets from its low is up more than 60%, so a 20% correction is nothing unusual.”

View the original article here

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