Thursday, November 29, 2012

Helicopter Bernanke

Ben Bernanke can drop as many Dollar bills as he likes into this room," he told the LBMA conference in Hong Kong, but what he doesn't know is what we will do with them. His helicopter drop will not lead to an even increase in all prices. Sometimes it will be commodities, sometimes precious metals, collectibles, wages or financial assets.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.

Wednesday, November 28, 2012

Gold not yet a bubble

Gold is not anywhere close to a bubble stage.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.

Monday, November 26, 2012

Commodities Will Continue To Fail near term

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.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.

Tuesday, November 20, 2012

Corporate profits declining

The market is actually going down because I think that corporate profits will begin to disappoint, and that the global economy will hardly grow next year, or even contract.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.

Tuesday, November 13, 2012

Debt burden increase

The debt burden in the U.S. and other Western countries will continue to increase. The timeframe would be within five to ten years you have a colossal mess … everywhere in the Western world.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.

Monday, November 12, 2012

Sensex may not cross 21000 levels anytime soon: Marc Faber - EconomicTimes

Edited excerpts from The Economic Times Now interview with Marc Faber, Editor & Publisher of The Gloom, Boom and Doom Report, for his take on the global and Indian markets. Marc says that there can be a year-end rally, but he does not see new highs in the markets.

ET Now: Do we brace ourselves for a year-end rally or a year-end fall, given the risk from a fiscal cliff in the US?

Marc Faber: We have peaked out recently a couple of weeks ago and we are in a downtrend. Eventually, the markets will be down 20%, but will be oversold in about 10 days' time to two weeks' time. So there can be a year-end rally, but certainly no new highs in the markets.

ET Now: How real is the possibility of a Euro break-up considering that Spain and Greece are still looking as vulnerable as before?

Marc Faber: Yes, it is a possibility. I do not think it will happen right away because the politicians want to keep the Eurozone intact, but the situation in Portugal, Greece, Spain, Italy and even France is actually unsustainable in the long run because of the unfunded liabilities. So a Euro break up will probably happen sometime in future, but not for another three or five years.

ET Now: Has your stance changed on India because of the slew of reforms that we have seen and do you see the recent announcements call for a rerating of the region?

Marc Faber: Not necessarily. While the government has announced some reforms, there is a huge execution risk in India. A lot of implementation is still to happen, and it will be interesting to see as to what extent they will be implemented and their actual impact on the economy. At present, there is high level of economic activity in India as well as China and Southeast Asia, but India is not growing anymore. Hence, I will take a relatively cautious stance towards the Asian markets.

ET Now: How do you see emerging markets manage the inflation versus growth equation?

Marc Faber: Like in Western countries, Asian central banks will also ease over time and they have done that already in some countries. There are not many countries in the region that are as disciplined as Singapore. I believe that even though there will be some inflationary pressure, but because of the overall weakness in the global economy the energy prices will come down somewhat. Moreover, food prices are already somewhat down after having risen so much, and are currently not as high as they were a few years ago.

ET Now: What do you see in terms of the returns on Indian equities over the next one or two years? Should investors adjust their return expectations?

Marc Faber: I am not exactly a prophet, but we have rallied strongly from the 2009 lows and the outlook for large capital gains at this level is very limited. The high in 2008 and the high last year was around 21000. I do not think we are going above 21000. I would rather expect the market to ease again from here.

ET Now: What regions are you seeing as the most and least attractive for investment right now?

Marc Faber: The Chinese economy is slowing down rapidly. In my opinion, it is not growing at any more than 4% now. The market was at 6000 in 2007, and today we are down to around 2000. Clearly, the market has already discounted a lot of bad news and if a junk country like Greece could rally from the lows of 65%, we can expect a trading rally in China of 20%-30% over the next four or five months. Additionally, the Japanese Yen has begun to weaken and that should be a positive trigger for Japanese equities.

Friday, November 9, 2012

My medicine for the U.S. is reduce government

The debt burden in the U.S. and other Western countries will continue to increase, Marc Faber, author of the Gloom, Boom and Doom report told CNBC on Monday, leading to a “colossal mess” within the next five to 10 years.

“I think the regimes will try to keep the system alive as it is for as long as possible, which means there’s no “fiscal cliff,” there’s a fiscal grand canyon,” Faber told CNBC’s “Squawk Box.”Faber argued that the political systems in place in the West would allow the debt burden to continue to expand. Under such a scenario of never-ending deficits, the Western world would rack up huge deficits.

One day, the system would break, he said. “Eventually, you have either huge changes occurring in a peaceful fashion through reforms, or, usually, through revolutions,” he said. The U.S. is getting closer to such a revolution, he said, as is Europe.

 “I think the timeframe would be within five to ten years you have a colossal mess … everywhere in the Western world,” Faber said. “I think the deficit here (in the U.S.) — irrespective of who is in the White House — will stay above a trillion dollars per annum for at least as far as the eye can see.”

Bureaucracies in the U.S., as well as Europe, are far too big, he said, and are a burden on the economy.

 “My medicine for the U.S. is: Reduce government by minimum 50 percent,” he said. “The impact would be immediately an improvement in the economy.”

Oulook for Stocks

 Faber believes the Chinese and Japanese stock markets could see a rebound, while in the U.S. the S&P 500 is likely to see a 20 percent downward move.

“I think here we’re going to go down 20 percent from the recent top at 1,470. The technical position of the market is poor and the corporate earnings are worsening. And I believe that if the statistics were precise – which they aren’t – (…) I think there’s hardly any growth,” Faber said.

 Four months ago, Faber turned his attention to European stock markets, attracted by the low valuations.
 “Greece, Italy, Spain, France, Portugal, they were four months ago at the 2009 lows or even lower,” he said.

Faber recommended buying European stocks at the time and for the first time in his life bought them himself.

 “I did it simply because the valuations were low. Since then, Greece is up 65 percent,” he said.

He would no longer buy European stocks, he said. “I expect a correction but no new lows,” Faber said.

 Now he is focusing on Asia.?

“In Asia, Thailand from the 2009 lows is up 250 percent. Other markets like the Philippines, Indonesia, Malaysia, Singapore, are up by a similar amount,” he said. The Chinese benchmark index on the other hand was at 6,000 in 2007, now it is at 2,000.

 “I think China and Japan could have a rebound here. If Greece could rebound by 65 percent the greatest garbage could rebound by 65 percent,” Faber said.

Tuesday, November 6, 2012

What is the cause of the crisis?

 Equities are a much better investment than bonds despite the rally in the debt of some emerging markets, according to Marc Faber, the bearish investor and author of The Doom, Gloom and Boom Report. Investors have been snapping up sovereign bonds issued by emerging and frontier countries as they search for yield after quantitative easing – massive money printing – in the US, Japan and Europe.

 “I would not own sovereign bonds. Maybe in some Asian countries, as they have been more prudent with their fiscal situation,” Faber told Emerging Markets in an interview. “People are chasing yields but I think there is a risk in sovereign bonds. I don’t care what other people do, that’s what I do,” he added.

 Stocks rise more in times of inflation, which is already happening in parts of the world, and therefore “between now and the eventual outcome [of the crisis that started in 2007], which will be a disaster, you’re better off in equities than in bonds,” Faber said. He has long argued that quantitative easing measures, taken in order to counteract the deflationary effects of the financial crisis and of the eurozone debt crisis, will lead to high inflation and said prices were already on the rise.

 “The costs of living have increased for most people and are higher than the official figures,” he said.

“Some economists say that there is little consumer price inflation. But there is, because the money-printing has lifted asset prices like those for luxury property, art, equities or bonds. There is inflation in the system but it’s not obvious.”
Faber said he found stocks in the debt-ridden eurozone countries “rather attractive” as “a lot of bad news” was discounted in these markets. Faber said he bought stocks in Greece, Portugal, Italy and Spain when they were low and was looking to buy more if markets fall again.

Faber said he was pessimistic about the outlook for the world economy and the recent rounds of quantitative easing were adding to the problem.

 “To intervene with monetary measures is negative to start with, and right now the same goes for fiscal measures because large fiscal deficits are undesirable,” Faber said. “What is the cause of the crisis? We have too much debt. To create more debt is not solving the problem.”

Monday, November 5, 2012

Markets could fall down 20 percent

By now all traders have heard of Dr Marc Faber and that he's a really smart investor/trader. This is why his recent comments will have shook us all up a little bit. According to Faber, there could easily be a 20 percent decline. “I believe globally we are faced with slowing economies and disappointing corporate profits, and I will not be surprised to see the Dow Jones, the S&P, the major indices, down from the recent highs by say, 20 percent.

Marc Faber is a famous contrarian investor and the publisher of the Gloom Boom & Doom Report newsletter.