28 February, 2009
Buy a Farm, Escape from the Cities
The best bet for investors may be to buy a farm and escape from the cities, as a prolonged recession could lead to war, as the Great Depression did. If the global economy doesn’t recover, usually people go to war.
Outlook for Gold Prices
I’m a little bit careful about the outlook for gold for the rest of the year.
A countertrend rally could occur soon where stocks would suddenly rise quite substantially.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
A countertrend rally could occur soon where stocks would suddenly rise quite substantially.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Financial Sector will Contract Much Further
The financial sector will contract and it will contract much more than we’ve seen so far, financial professionals have been in paradise for the past 25 years.
The financial sector has been occupying themselves with trading against each other all day and it’s totally unproductive, it’s like a huge casino and that will come to an end.
The financial sector has been occupying themselves with trading against each other all day and it’s totally unproductive, it’s like a huge casino and that will come to an end.
27 February, 2009
Faber says Short Treasuries and the Yen
"Faber today recommended investors short U.S. Treasuries, as a 27-year bull market likely ended in December, starting the beginning of a long bear market. Faber also recommends selling the Japanese yen, though the nation’s stocks may outperform global equities in the next one or two years because they have been depressed for so long, he said." in Bloomberg.com, February 27
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Faber spoke to Bloomberg TV
“The financial sector will contract and it will contract much more than we’ve seen so far” Marc Faber in Tokyo speaking at an event hosted by CLSA Ltd.
“The financial sector has been occupying themselves with trading against each other all day and it’s totally unproductive”
“It’s like a huge casino and that will come to an end.”
“I’m a little bit careful about the outlook for gold for the rest of the year”
“A countertrend rally could occur soon where stocks would suddenly rise quite substantially.”
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
“The financial sector has been occupying themselves with trading against each other all day and it’s totally unproductive”
“It’s like a huge casino and that will come to an end.”
“I’m a little bit careful about the outlook for gold for the rest of the year”
“A countertrend rally could occur soon where stocks would suddenly rise quite substantially.”
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
24 February, 2009
Faber on the Stock Market
I would like to point out, regarding the markets, people focus on indexes and I am sure that indexes are important: If you look at markets since last November, the low was on November 21, and some indexes have made new lows like the Transportation Index and the Dow Jones.
But the Nasdaq 100 has not made a new low that does not have financial stocks in it, is still above the November lows, so I would not give up entirely on the theory that we can still have some kind of a rally developing relatively soon.
For the simple reason, the news on the economy has been horrific and the economic news will stay bad for quite some time and the global economy will continue to deteriorate. The question is however, to what extent have asset markets discounted much of the bad news.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
But the Nasdaq 100 has not made a new low that does not have financial stocks in it, is still above the November lows, so I would not give up entirely on the theory that we can still have some kind of a rally developing relatively soon.
For the simple reason, the news on the economy has been horrific and the economic news will stay bad for quite some time and the global economy will continue to deteriorate. The question is however, to what extent have asset markets discounted much of the bad news.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
23 February, 2009
Nationalization of the Banks
Marc, what do you think of this idea of the government taking a step in the direction of nationalization of certain banks? Is this going to give the stock market the boost it needs?
I am not sure that it is all that relevant but I would say it is probably the only solution that the government can actually implement. Either these banks are bust or they get the capital infusion and the private sector probably does not want to give capital to the banks at the present time.
So if the government steps in, that is at least a solution. I am not sure it is a good solution but at least it is a solution.
That would certainly improve the credit ratings of Citigroup and Bank of America, because they will rest on the stability of the government.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
I am not sure that it is all that relevant but I would say it is probably the only solution that the government can actually implement. Either these banks are bust or they get the capital infusion and the private sector probably does not want to give capital to the banks at the present time.
So if the government steps in, that is at least a solution. I am not sure it is a good solution but at least it is a solution.
That would certainly improve the credit ratings of Citigroup and Bank of America, because they will rest on the stability of the government.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Bloomberg Video, Stocks May Rally Soon
Marc Faber told Bloomberg News today that stocks may rally relatively soon, even if we have a selling climax before the rally.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Faber on Bloomberg TV
Marc Faber spoke to Bloomberg TV today from Thailand. Here is the Video Link.
Marc Faber spoke about Bank Nationalizations in the United States as the unique solution for the Government to implement:
"I am not sure its a good solution, but its a solution." MARC FABER
"The SP500 made a new low and the Nasdaq 100 that has less financials in it is still 10% above the November lows. I wouldn`T give up on the theory that we can have a market rally pretty soon" MARC FABER
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber spoke about Bank Nationalizations in the United States as the unique solution for the Government to implement:
"I am not sure its a good solution, but its a solution." MARC FABER
"The SP500 made a new low and the Nasdaq 100 that has less financials in it is still 10% above the November lows. I wouldn`T give up on the theory that we can have a market rally pretty soon" MARC FABER
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
China Stocks Rally
"China’s equities rally isn’t sustainable because the world’s third-largest economy will continue to deteriorate" Marc Faber on Bloomberg, February 20
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber on Deleveraging
"The deleveraging taking place among financial intermediaries is negative for the American economy that is addicted to credit growth. The United States trade and current account deficits will shrink further and diminish international liquidity. This is bad for asset prices." MARC FABER, Singapore, February 20
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
22 February, 2009
China Stock Market
Marc Faber is bullish on chinese stocks for the short term, as the Shanghai Composite Index may rally as much as 15% before declining as the economies deteriorate.
China stocks are the world’s best-performing benchmark measure this year, up 24% year to date.
“There is a lot of liquidity in China that keeps the market momentum going” Faber, publisher of the Gloom, Boom & Doom report, said in an interview in Singapore today. “Chinese stocks may rally another 10 percent to 15 percent and then drift lower.”
China’s economic growth has slowed to the weakest pace in seven years as the deepening global recession causes exports to plunge.
“The Chinese economy is actually in recession despite what the government data shows” Marc Faber said in Singapore.
“The collapse in imports doesn’t suggest that consumption is strong in China. The Chinese economy is already very weak.”
“The reason stocks have rallied in China is because of money supply and loans have grown,”
“This money hadn’t gone into production but into the stock market.”
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
China stocks are the world’s best-performing benchmark measure this year, up 24% year to date.
“There is a lot of liquidity in China that keeps the market momentum going” Faber, publisher of the Gloom, Boom & Doom report, said in an interview in Singapore today. “Chinese stocks may rally another 10 percent to 15 percent and then drift lower.”
China’s economic growth has slowed to the weakest pace in seven years as the deepening global recession causes exports to plunge.
“The Chinese economy is actually in recession despite what the government data shows” Marc Faber said in Singapore.
“The collapse in imports doesn’t suggest that consumption is strong in China. The Chinese economy is already very weak.”
“The reason stocks have rallied in China is because of money supply and loans have grown,”
“This money hadn’t gone into production but into the stock market.”
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
20 February, 2009
Latest Video Interview
Latest Marc Faber video interview to Bloomberg TV, February 19, 2009. Topics: Eastern Europe, Bailouts and Stock Market Outlook.
Marc Faber on Gold
“One day the price of gold will be higher than the Dow Jones.”
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world. Dr. Doom also trades currencies and commodity futures like Gold and Oil.
19 February, 2009
Marc Faber on the Stock Market
"Basically there was a rally from November 21, to January 6, the S&P 500 Index rallied 26%. Unfortunately it did not continue.
We have fallen back again, approaching the November lows, and some technical indicators are much better now then they were in November, so the next few days will be very important.
The stock market needs to start rallying now, otherwise we can break the November lows and have a new big selling wave." MARC FABER
If you are a futures trader, or if you trade stock you can always find some interesting stock market investments ideas here in Marc Faber Blog. Mr. Faber has been trading stocks, commodities futures, forex futures and options for decades.
We have fallen back again, approaching the November lows, and some technical indicators are much better now then they were in November, so the next few days will be very important.
The stock market needs to start rallying now, otherwise we can break the November lows and have a new big selling wave." MARC FABER
If you are a futures trader, or if you trade stock you can always find some interesting stock market investments ideas here in Marc Faber Blog. Mr. Faber has been trading stocks, commodities futures, forex futures and options for decades.
18 February, 2009
Situation in Eastern Europe
Q: What is happening with the banks in Eastern Europe, I mean we have heard some alarms even from prettyhigh ranked, the German Finance Minister with worries about debt, will germany and France sort of be forced to comtemplate the unthinkable, a financial rescue if you like?
>MARC FABER: Well, basically yes. It is not just the banks, what happened is, in Eastern Europe, not in every country, but in most countries, they have very large current account deficits, and growing, they have financed these debts with foreign borrowing, in Euros, Dollars and Swiss Francs. And individuals who bought homes rather than pay high interest rates in local currency, they borrowed in foreign currencies, in Euros and specially in Swiss Francs.
There are lots of mortgages that have been written in Swiss Francs in these Eastern European countries. So these economies that depend on a large extent on capital flows and exports, were obviously hit hard and the currencies tumbled.
As the currencies tumbled there was an huge mismatch of assets which are in local currency and liabilities in foreign currencies that have appreciated against local currencies.
So now, all this countries face payments difficulties.
>MARC FABER: Well, basically yes. It is not just the banks, what happened is, in Eastern Europe, not in every country, but in most countries, they have very large current account deficits, and growing, they have financed these debts with foreign borrowing, in Euros, Dollars and Swiss Francs. And individuals who bought homes rather than pay high interest rates in local currency, they borrowed in foreign currencies, in Euros and specially in Swiss Francs.
There are lots of mortgages that have been written in Swiss Francs in these Eastern European countries. So these economies that depend on a large extent on capital flows and exports, were obviously hit hard and the currencies tumbled.
As the currencies tumbled there was an huge mismatch of assets which are in local currency and liabilities in foreign currencies that have appreciated against local currencies.
So now, all this countries face payments difficulties.
Eastern Europe and Austria
"Austria is on the hook for so much money that if they don`t get paid by Eastern Europe, they can go bust. So the European Union has to help Austria, one way or another." MARC FABER, 18th February in Bloomberg TV
Faber on the World Economy : February 2009
"The global economy may take as long as 10 years to return to the peak level reached in 2006", Marc told the South China Morning Post.
“The crisis won’t be over anytime soon”. Still, interest-rate cuts may cause a short-term jump for stocks, including a leap of as much as 30 percent in Hong Kong within three months, Marc Faber said.
"But in the second half of the year, stocks will likely dive again because of the slowdown."
"Commodities have a very strong rebound potential” over the next few years, citing silver, platinum and palladium as investments to consider.
Mar Faber said that gold is likely to outperform U.S. stocks over the next five to 10years, and that he is adding to its investments in the metal.
Technology companies, such as Intel Corp., Cisco Systems Inc., Oracle Corp. and Microsoft Corp., also look “quite interesting,” Faber added.
Still, investors shouldn’t have more than 15 percent of assets in equities at the moment.
“The crisis won’t be over anytime soon”. Still, interest-rate cuts may cause a short-term jump for stocks, including a leap of as much as 30 percent in Hong Kong within three months, Marc Faber said.
"But in the second half of the year, stocks will likely dive again because of the slowdown."
"Commodities have a very strong rebound potential” over the next few years, citing silver, platinum and palladium as investments to consider.
Mar Faber said that gold is likely to outperform U.S. stocks over the next five to 10years, and that he is adding to its investments in the metal.
Technology companies, such as Intel Corp., Cisco Systems Inc., Oracle Corp. and Microsoft Corp., also look “quite interesting,” Faber added.
Still, investors shouldn’t have more than 15 percent of assets in equities at the moment.
17 February, 2009
Marc Faber: Inflation and Money Printing
"I think that in general he have an Administration that we be in the very long run highly inflationary. I am not saying we have inflationary pressures at the present time, we may even have a bit of deflation, but the fact is simple, the longer the economy does not recover and the longer we have deflationary pressures, the more the fiscal deficits will go up and more money will be printed. That I can guarantee you"
MARC FABER
MARC FABER
16 February, 2009
Marc Faber on Monetary Policy
"We have different economic schools, we have the Austrian School, the Rational Expectations School, and the Monetary School and so forth. In the US we have a totally new School and its called the Zimbabwe School. Its founded by one of the great leaders of this world, Mr. Robert Mugabe, that has managed to totally impoverish his country. That is the monetary policy the United States is persuing. If something goes wrong, you print money, if it does not get fixed you print even more money" Marc FABER
15 February, 2009
Faber on Bloomberg TV
Marc Faber spoke to Bloomberg TV this week in a 10 minute long video interview. Watch all Marc Faber`s video interview here on this Blog.
Latest Marc Faber CNBC Interview
Watch all Marc Faber`s videos interviews to CNBC, Bloomberg TV and other financial media networks here on Marc Faber Blog.
One Hour Audio Interview
Listen to a long and very interesting Marc Faber audio interview to Financial Sense HERE.
Main Topics in this hour long audio interview:
Marc Faber talks about the economy, saving rates, asset prices, home prices, Bernanke, Geithner the possible inflation threat in the US and the imminint near term deflation in the US. Faber expresses his concern over the fiscal deficits and the money printing capabilities of Mr. Bernanke.
Marc Faber in this hour long interview analysed Gold, commodities, the CRB Index, commodity related stocks, China`s stock market, Taiwan exports, Chinese economic statistics, Chinese recession, the dollar strength versus other currencies, geopolitical tensions, war and many more investment and political topics.
Main Topics in this hour long audio interview:
Marc Faber talks about the economy, saving rates, asset prices, home prices, Bernanke, Geithner the possible inflation threat in the US and the imminint near term deflation in the US. Faber expresses his concern over the fiscal deficits and the money printing capabilities of Mr. Bernanke.
Marc Faber in this hour long interview analysed Gold, commodities, the CRB Index, commodity related stocks, China`s stock market, Taiwan exports, Chinese economic statistics, Chinese recession, the dollar strength versus other currencies, geopolitical tensions, war and many more investment and political topics.
Over Consumption and Over Borrowing
We got into this mess with over consumption and over borrowing and now they are applying the same prescription to get bail us out of this mess?
Consumption and residential spending as a percentage of GDP, bottomed out at 64% in 1982, and then as a result of the fiscal deficits of Mr. Reagan, consumption and residential construction went up to 72% of GDP and stayed there, until he had 2 money printers, Mr. Greeenspan and Mr. Bernanke, stimulating consumption like crazy though artificially low interest rates from 2001, and so consumption and residential spending went to 77% of GDP, we had over consumption and now is coming down. I would also like to mention that is not the US that does not consume enough but the policies of the decision makers, have been a total catastrophy over the last 25 years.
Consumption and residential spending as a percentage of GDP, bottomed out at 64% in 1982, and then as a result of the fiscal deficits of Mr. Reagan, consumption and residential construction went up to 72% of GDP and stayed there, until he had 2 money printers, Mr. Greeenspan and Mr. Bernanke, stimulating consumption like crazy though artificially low interest rates from 2001, and so consumption and residential spending went to 77% of GDP, we had over consumption and now is coming down. I would also like to mention that is not the US that does not consume enough but the policies of the decision makers, have been a total catastrophy over the last 25 years.
Second Half of the Year Recovery?
Marc why don`t we start our interview with the second half economic recovery theme, based on the stimulus?
The same people that say that we will have a second half recovery were saying at the beginning of 2008 that ther would be a strong recovery in the second half of the year and estimatd that S&P 500 Index earnings to be of 90 dollars, and for 2009 they have estimated earnings of over 100 dollars. So what other people tell you is not very relevant. I think the market is at a juncture, where we could have a recovery, or another sharp fall, if we have a market recovery here, it might last till april, early may, and by the second half of the year economic reality sets in, because I don`t think there will be an economic recovery anytime soon.
The same people that say that we will have a second half recovery were saying at the beginning of 2008 that ther would be a strong recovery in the second half of the year and estimatd that S&P 500 Index earnings to be of 90 dollars, and for 2009 they have estimated earnings of over 100 dollars. So what other people tell you is not very relevant. I think the market is at a juncture, where we could have a recovery, or another sharp fall, if we have a market recovery here, it might last till april, early may, and by the second half of the year economic reality sets in, because I don`t think there will be an economic recovery anytime soon.
13 February, 2009
Marc Faber criticizes the Obama Administration
Marc Faber criticizes the Obama administration’s fiscal stimulus package, saying that the only thing it will do is to keep the economy and stock markets underwater.
“The current crisis is a direct consequence of continued U.S. government intervention into the economy through fiscal and monetary policy that has been designed to never have a recession” he said in an video interview with Bloomberg TV.
"The economy needs a recession" Marc Faber
“The current crisis is a direct consequence of continued U.S. government intervention into the economy through fiscal and monetary policy that has been designed to never have a recession” he said in an video interview with Bloomberg TV.
"The economy needs a recession" Marc Faber
12 February, 2009
Tech Stocks
“Technology companies with the biggest cash hoards are better positioned to grow earnings when the economy rebounds because they can maintain spending on research and development” MARC FABER
Faber is bullish on big cap US technology companies in Nasdaq like Intel, Microsoft, Google, Apple or Oracle.
Track all Marc Faber investing here. If you are looking for an Internet Broker or Online Banking, be sure to choose one that has very low comissions. Low costs are one of the most important online trading secrets.
Faber is bullish on big cap US technology companies in Nasdaq like Intel, Microsoft, Google, Apple or Oracle.
Track all Marc Faber investing here. If you are looking for an Internet Broker or Online Banking, be sure to choose one that has very low comissions. Low costs are one of the most important online trading secrets.
11 February, 2009
Faber on the Stimulus Package
The U.S. stimulus package under consideration in the US will backfire because the government will grow.
"With the stimulus package the government is proposing, I think the depression will last longer, and the unproductive government will continue to grow at the expense of the private sector" MARC FABER in MoneyNews
Marc Faber also said that "If you never have a recession, it's like someone who never sleeps" and that "If you have a stimulus package, fiscal deficits go up, and eventually you end up with higher interest rates and inflation. There is no free lunch. Someone has to pay"
Marc Faber is quite pessimistic on the government actions to sort this crisis. Follow Marc Faber latest interviews, stock pickings and market opinions on Marc Faber`s Blog.
"With the stimulus package the government is proposing, I think the depression will last longer, and the unproductive government will continue to grow at the expense of the private sector" MARC FABER in MoneyNews
Marc Faber also said that "If you never have a recession, it's like someone who never sleeps" and that "If you have a stimulus package, fiscal deficits go up, and eventually you end up with higher interest rates and inflation. There is no free lunch. Someone has to pay"
Marc Faber is quite pessimistic on the government actions to sort this crisis. Follow Marc Faber latest interviews, stock pickings and market opinions on Marc Faber`s Blog.
10 February, 2009
Faber on US Tech Stocks
Marc Faber is optimistic on US big tech stocks. Last Friday, Marc Faber told Bloomberg News:
“Investors should buy U.S. technology stocks after prices fell near the lows reached after the dot-com crash in 2000”
“You could make a case that in the U.S. some equities have come down a lot and are inexpensive”
“In Nasdaq stocks, in high-tech companies, we have a base-building period.”
“Technology companies with the biggest cash hoards are better positioned to grow earnings when the economy rebounds because they can maintain spending on research and development”
“In a crisis like we have now the weak competitors don’t have the money to carry out R&D, whereas the strong competitors have that money”
“When the crisis comes to an end, the strong competitors emerge in a relatively stronger position.”
Marc Faber is bullish on the Nasdaq big caps like Intel, Oracle, Microsoft or Cisco Systems.
“Investors should buy U.S. technology stocks after prices fell near the lows reached after the dot-com crash in 2000”
“You could make a case that in the U.S. some equities have come down a lot and are inexpensive”
“In Nasdaq stocks, in high-tech companies, we have a base-building period.”
“Technology companies with the biggest cash hoards are better positioned to grow earnings when the economy rebounds because they can maintain spending on research and development”
“In a crisis like we have now the weak competitors don’t have the money to carry out R&D, whereas the strong competitors have that money”
“When the crisis comes to an end, the strong competitors emerge in a relatively stronger position.”
Marc Faber is bullish on the Nasdaq big caps like Intel, Oracle, Microsoft or Cisco Systems.
09 February, 2009
Reaching a Temporary Bottom?
"Don`t forget when the news were very good in 2007 the market peaked out, so on bad news you can reach a temporary bottom and also I believe we have this tremendous downside momentum in the global economy, in other words we fell of a cliff and the news will remain bad but maybe not as bad as in the last 4 months and then the goldilocks crowd that is always around us and will never give up, no matter what, they will say “now, see, the global economy is improving so lets buy”." MARC FABER
Is it time to get onboard and buy stock markets and commodities? Only time will tell. But high dividends stocks in Asia are a strong candidate for any asset allocation.
Is it time to get onboard and buy stock markets and commodities? Only time will tell. But high dividends stocks in Asia are a strong candidate for any asset allocation.
08 February, 2009
Commodities Are Cheap
A 30% rebound? So the tactic or strategy here if you want to be invested in asian equities, I mean, with the yields that high it seems like a good time to get in and hold stocks, specially the ones that pay you and pay you well to hold them.
MARC FABER: Yes, sure. Actually I said that asian markets are better valued than the US markets and I also pointed out that now you are paid to wait here in Asia. I don`t think there is an huge downside risk, I think there is upside potential.
Don`t forget that from the November 20 low, even the S&P 500 Index managed to rally 27% between November 23 and January 6 and many shares like mining companies, you take Newmont Mining, it was a 21 dollars and it went to 45, DryShips was at 3 and went to 15, you will have huge volatility in this environment of ultra low interest rates.
It doesn`t mean that the global economy will heal anytime soon specially given the government interventions that will in my opinion prolong the crisis and not solve it at all.
What would be the catalyst for that 30% upside you mentioned?
MARC FABER: First of all we have fallen dramatically and markets have become oversold, in particular we have to talk about commodities because that is probably the most oversold market of any, but secondly the global economy fell of a cliff between September and January of this year, in the last 4 months and the news is universally very bad.
But don`t forget when the news were very good in 2007 the market peaked out, so on bad news you can reach a temporary bottom and also I believe we have this tremendous downside momentum in the global economy, in other words we fell of a cliff and the news will remain bad but maybe not as bad as in the last 4 months and then the goldilocks crowd that is always around us and will never give up, no matter what, they will say “now, see, the global economy is improving so lets buy”.
I am not a great believer that there is going to be a great economic improvement but I believe that market participants that are always bullish because they have been conditioned to be always bullish over the last 25 years, they will push markets up.
Are the commodities prices and stock related commodity plays truly reflecting demand and supply out there?
MARC FABER: Well I think commodity markets reflect demand and supply and that`s why they totally collapsed and as you may remember, it was my view last year that in the second half of 2008, commodity markets would implode because they should not have gone up in the first place after September 2007 when the global economy was already decelerating. So we went up to much because of monetary policy of the US, and then we crashed.
And now we are at such a low level that new supply won`t come to the market. So if you think there is going to be an economic recovery in the world, in a year`s time, or in 5 years, or in 10 years, or whenever that happens, there will be a shortage of commodity prices and commodity prices will go ballistic and because when compared to equities, commodities are essential at their lows since the major bottom in the CRB Index in 1999 and 2001 around 185. Now we are at 215-220 so we are only up 20% from major lows that were lows after 20 a year bear market.
This is the transcript of Marc Faber`s latest interview.
MARC FABER: Yes, sure. Actually I said that asian markets are better valued than the US markets and I also pointed out that now you are paid to wait here in Asia. I don`t think there is an huge downside risk, I think there is upside potential.
Don`t forget that from the November 20 low, even the S&P 500 Index managed to rally 27% between November 23 and January 6 and many shares like mining companies, you take Newmont Mining, it was a 21 dollars and it went to 45, DryShips was at 3 and went to 15, you will have huge volatility in this environment of ultra low interest rates.
It doesn`t mean that the global economy will heal anytime soon specially given the government interventions that will in my opinion prolong the crisis and not solve it at all.
What would be the catalyst for that 30% upside you mentioned?
MARC FABER: First of all we have fallen dramatically and markets have become oversold, in particular we have to talk about commodities because that is probably the most oversold market of any, but secondly the global economy fell of a cliff between September and January of this year, in the last 4 months and the news is universally very bad.
But don`t forget when the news were very good in 2007 the market peaked out, so on bad news you can reach a temporary bottom and also I believe we have this tremendous downside momentum in the global economy, in other words we fell of a cliff and the news will remain bad but maybe not as bad as in the last 4 months and then the goldilocks crowd that is always around us and will never give up, no matter what, they will say “now, see, the global economy is improving so lets buy”.
I am not a great believer that there is going to be a great economic improvement but I believe that market participants that are always bullish because they have been conditioned to be always bullish over the last 25 years, they will push markets up.
Are the commodities prices and stock related commodity plays truly reflecting demand and supply out there?
MARC FABER: Well I think commodity markets reflect demand and supply and that`s why they totally collapsed and as you may remember, it was my view last year that in the second half of 2008, commodity markets would implode because they should not have gone up in the first place after September 2007 when the global economy was already decelerating. So we went up to much because of monetary policy of the US, and then we crashed.
And now we are at such a low level that new supply won`t come to the market. So if you think there is going to be an economic recovery in the world, in a year`s time, or in 5 years, or in 10 years, or whenever that happens, there will be a shortage of commodity prices and commodity prices will go ballistic and because when compared to equities, commodities are essential at their lows since the major bottom in the CRB Index in 1999 and 2001 around 185. Now we are at 215-220 so we are only up 20% from major lows that were lows after 20 a year bear market.
This is the transcript of Marc Faber`s latest interview.
Commodities and Emerging Markets can have a 30% Rebound
"I don`t think that markets will necessarily run away into a new bull market, but we have fallen so hard in commodities and in emerging markets that we can easily have a 30% rebound here." MARC FABER IN CNBC, February 6.
07 February, 2009
US Markets Expensive vs. Asian Markets
Warren Bufett`s favourite metrics is market cap as a percentage of gross national product, he thinks when its down to about 75% or so, it’s a screaming buy, its time to go in. How would Asian stock markets compare?
Basically I look at markets around the world, its very clear that the US market is not particularly cheap, specially if you take the Dow Jones, the S&P in real terms, with inflation adjusted or the market cap in the US as a percentage of GDP, in 1982, 1974 and other major lows it was around 25 to 30% of GDP and now its close to 100% actually and not at 75%; and by historical standards is still very high.
In the case of Asia we have many markets that are, in the case of Japan at 30 years low, basically at the same level as in 1981, and Korea is at the level it was in 1988, and if you look at the dividend yield in Asia compared to the bond yields, it`s around 3 times higher, so even thought we will have dividend cuts for sure, as a shareholder you begin to be paid to waiting.
I don`t think that markets will necessarily run away into a new bull market, but we have fallen so hard in commodities and in emerging markets that we can easily have a 30% rebound here.
Basically I look at markets around the world, its very clear that the US market is not particularly cheap, specially if you take the Dow Jones, the S&P in real terms, with inflation adjusted or the market cap in the US as a percentage of GDP, in 1982, 1974 and other major lows it was around 25 to 30% of GDP and now its close to 100% actually and not at 75%; and by historical standards is still very high.
In the case of Asia we have many markets that are, in the case of Japan at 30 years low, basically at the same level as in 1981, and Korea is at the level it was in 1988, and if you look at the dividend yield in Asia compared to the bond yields, it`s around 3 times higher, so even thought we will have dividend cuts for sure, as a shareholder you begin to be paid to waiting.
I don`t think that markets will necessarily run away into a new bull market, but we have fallen so hard in commodities and in emerging markets that we can easily have a 30% rebound here.
06 February, 2009
Marc Faber`s Latest Video Interview (CNBC 6 FEB)
Watch Marc Faber full video interview HERE. He discussed asian stock markets including some stock picks and the value of the US stocks. He talked about monetary policy amoung several other investment topics.
General Electric should be a Junk Bond
Marc Faber commented General Electric (GE) rating and this is what he said to CNBC earlier today:
"Yeh, I think GE should be a junk bond. But I also think the US government should be junk. I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
Track Marc Faber`s stock pickings and major trading ideas on Marc Faber`s Blog.
"Yeh, I think GE should be a junk bond. But I also think the US government should be junk. I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
Track Marc Faber`s stock pickings and major trading ideas on Marc Faber`s Blog.
Hyperinflation?
Is Inflation in America going to reach 200% annual rate?
"Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate." MARC FABER
"Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate." MARC FABER
Marc Faber on US Monetary Policy
"In the US, we have a totally new school, and it’s called the Zimbabwe school. And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing." MARC FABER ON CNBC
Robert Mugabe is an African dictator mostly known for his costly intervention in the Second Congo War and the expropriation of thousands of white-owned farms, printing hundreds of trillions of Zimbabwean dollars triggering hyperinflation creating total economic chaos with food and oil shortages and with massive internal displacement and emigration.
The Zimbabwe school is the Dr. Doom new designation of the politics of the US Federal Reserve.
Read about Marc Faber`s trading ideas about futures, stocks, commodities and Forex in this weblog.
Robert Mugabe is an African dictator mostly known for his costly intervention in the Second Congo War and the expropriation of thousands of white-owned farms, printing hundreds of trillions of Zimbabwean dollars triggering hyperinflation creating total economic chaos with food and oil shortages and with massive internal displacement and emigration.
The Zimbabwe school is the Dr. Doom new designation of the politics of the US Federal Reserve.
Read about Marc Faber`s trading ideas about futures, stocks, commodities and Forex in this weblog.
05 February, 2009
One day the price of gold will be higher than the Dow Jones
Here are Marc Faber`s most recent comments on the financial markets:
"One day the price of gold will be higher than the Dow Jones."
"The CRB, a broad index of commodities, fell for 20 years in nominal terms, from 1980 to 1999. It is now up 12% and is still inexpensive. The Dow and the S&P are up substantially from the 1980s or early 1990s. Everyone thinks fiscal and monetary measures will work to fix the financial system. I don't. They will be disastrous and fuel inflation. But the supply of oil, gas and copper is relatively limited compared to paper money you can print."
"Recently I bought some U.S. stocks for the first time in a long time. If you buy Intel , Cisco , Yahoo! , Oracle and Microsoft , you will do much better in the next 10 years than you would with Treasuries."
Marc Faber is bullish on industrial commodities and thinks that these government plans will only fuel inflation. You can track Marc Faber trading views on FOREX, commodities, futures and stocks here. Marc Faber is stock picking big cap tech stocks for the first time in a few years.
"One day the price of gold will be higher than the Dow Jones."
"The CRB, a broad index of commodities, fell for 20 years in nominal terms, from 1980 to 1999. It is now up 12% and is still inexpensive. The Dow and the S&P are up substantially from the 1980s or early 1990s. Everyone thinks fiscal and monetary measures will work to fix the financial system. I don't. They will be disastrous and fuel inflation. But the supply of oil, gas and copper is relatively limited compared to paper money you can print."
"Recently I bought some U.S. stocks for the first time in a long time. If you buy Intel , Cisco , Yahoo! , Oracle and Microsoft , you will do much better in the next 10 years than you would with Treasuries."
Marc Faber is bullish on industrial commodities and thinks that these government plans will only fuel inflation. You can track Marc Faber trading views on FOREX, commodities, futures and stocks here. Marc Faber is stock picking big cap tech stocks for the first time in a few years.
02 February, 2009
Bank Bailouts Won`t Work
"The new bank bailouts are not likely to work because they are run by the same people who prolonged the economic agony by throwing money at weak companies rather than allowing them to fail and encouraging the strong ones" Marc Faber
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