Sunday, January 21, 2018

Marc Faber Breaks Down the Rise the Fall of Empires

Marc gets right down to brass tax and addresses the controversy surrounding his recent comments in the media. A tremendous amount of time is spent tracing the rise and fall of empires and what those great societies added to our modern day world. 

A cordial conversation continues with Marc delving into sound investment advice and speaks to the hypocrisy of (mostly) American pandering. In Marc’s view every government, the world over, is equally corrupt. Marc ends with the thought that once you are a prisoner of the system it is very difficult to get out. 

Prisoners are good for governments as they help boost GDP. GDP, therefore, is not what one should use to measure how well a society is doing. A better indicator is the quality of living amongst the population.

- Source, On the Road

Friday, December 29, 2017

Join the Few Who Gain from Economic Armageddon

The warning signs that a market crash is looming are becoming louder and more frequent. Despite this, most market participants are behaving like it can never happen. In fact, bullish trading is pushing the markets to new highs on an almost daily basis. The warnings are seen, heard and then ignored.

Join the few who will take advantage of what's about to happen. The same few who profited handsomely when billions were lost in the last global economic crisis almost a decade ago rather than those who simply follow the herd.

For most people these warnings are like the graphic images printed on today's packets of cigarettes, they spell out the dangers and yet all the same people are still smoking.

Warnings about an impending market crash are being made by people who predicted with considerable accuracy in 2006 and 2007 what was ahead when the US sub-prime mortgage market collapsed and triggered the global financial crisis.

The one thing these analysts can't predict is an exact time and place for when the crash will happen. It's the same reason people continue to smoke; nobody can say with certainty the number of cigarettes required to kill a person.

So, trading continues regardless until the day the sudden dramatic drop in prices exceeds the 10 per cent threshold that officially marks the point that the crash has arrived.

Just as smokers only decide to stop when the physician says: "Mr Smith, I regret to inform you that you have lung cancer."

Swiss investor Marc Faber, also known as "Dr Doom", predicts that stocks are set to plunge by 40 per cent or more. Mr Faber, the editor of 'The Gloom, Boom & Doom Report' recently told CNBC: "We have a bubble in everything."

His caution is echoed by Nobel Prize-winning economist Robert Professor Shiller who has urged investors to tread cautiously because market valuations are at "unusual highs".

In a recent interview with CNBC, he said: "We are at a high level, and it's concerning," highlighting that the only times valuations have been higher were in 1929 and 2000.

Mark Zandi is chief economist at Moody's Analytics. In August he joined the chorus of analysts preaching caution after determining that the stock market is overvalued.

In an article in Fortune he said: "The stock market is due for a significant correction" adding, "stock returns in the next several years will be very pedestrian if they increase at all."

Last month HSBC issued a Red alert warning. They're looking at two key levels: 17,992 in the Dow Jones Industrial Average and 2,116 in the S&P 500.

"As long as those levels remain intact, the bulls still have a slight hope. But should those levels break and the markets close below, which now seems more likely, it would be a clear sign that the bears have taken over and are starting to feast," said head of technical analysis Murray Gunn. "The possibility of a severe fall in the stock market is now very high," he added.

However, according to Bill Blain, a strategist at Mint Partners, this time bond markets will trigger the mayhem.

According to Blain, stock markets don't matter. "The truth is in bond markets. And that's where I'm looking for the dam to break. The great crash of 2018 is going to start in the deeper, darker depths of the credit market," he said.

"I'm convinced bond markets are the real bubble we should be watching, and it's going to start in high yield..."

Blain's opinion on a bonds inspired crash is echoed by Niall Ferguson in his piece in The Sunday Times this month.

Ferguson was warning about the sub-prime mortgage crisis over a year before the crash occurred. He spoke publicly about it on many occasions and in his book The Ascent of Money spelling out the dangers in graphic detail, which was published just as his predictions were coming true.

He sees a bonds sell off as a result of a series of events that will bring about the next economic crisis.

Ferguson firstly points to the effect of interest rate increases by the big four central banks -- the Fed, European Central Bank, Bank of Japan and Bank of England -- when the rate of economic expansion has already started to slow.

He explains: "History shows that monetary tightening acts with long and variable lags. But it does act, often on stock markets."

Ferguson also points to global wage and inflation increases as the second contributory factor as we approach a demographic inflection point where the ratio of workers to consumers has peaked.

This has led Ferguson to the conclusion that the end of the 35-year bond bull market is imminent. "Bonds will sell off; long-term rates will rise. The question is whether inflation will increase as much or more. If not, then real (inflation-adjusted) interest rates will rise, with serious implications for highly indebted entities."

He points to two big economies, China and Canada, which are in particular trouble. You should probably add Australia to that list given its level of connectedness to China.

Despite being described with the same words, no two financial crises are the same. The next one will differ from the last one, that's why they are so hard to put into an actionable timeframe. But the inevitability that there will be a next one increases as the monetary medication begins to be withdrawn, which makes the need for taking the right measures now all the more important.

FXB Trading's experts are equally convinced that a significant market correction is imminent. They've devised a strategy to profit from the situation as many notable forward-thinking analysts did ahead of the 2008 sub-prime mortgage crash in the US which then caused the subsequent global financial crisis.

In the 2008 scenario their investment returned ratios of between 1:10 to 1:20. FXB's traders will replicate the trade, but will also hedge their position.

Until the market crashed in 2008 those US traders were in a losing position, but by hedging it is possible to avoid losses until the crash occurs.

- Source, The Digital Journal

Monday, December 25, 2017

A 64% Decline? Really?

EconomPic had an interesting article about the standard deviation of a 60/40 equity fixed income portfolio having imploded during the bull market and included a great chart for a visual idea of what has occurred.

While I doubt there are any surprises here as you can’t go more than a couple of scrolls on your Twitter feed without seeing something about how low VIX is, it nonetheless raises some good talking points.

The first thing is capital markets are like pendulums with a lot of things. Foreign equities dramatically outperformed domestic in the 2000's. This decade, domestic is way ahead of foreign - until this year. Same thing with currencies, the dollar goes on long runs of outperformance, followed by long periods of underperformance and so on. Where volatility has been low and headed lower this year, it will at some point turn around and move higher. That is not a prediction that I am trying to game so much as an observation of how markets work and a reminder for practice management, take the time to remind clients that market cycles and volatility have not been repealed.

To that point John Hussman’s latest commentary is a doozy. He says that based on his study of valuations versus interest rates and a few other things, he believes that a 64% decline is coming to the S&P 500 (NYSEARCA:SPY) with the expectation that the next 10-12 years will offer negative returns.

If you know who John Hussman is, you know that he has been bearish all the way up. The way I always mention him is to say, he does a great job of framing the bear case, and that is what he is doing; valuations are out of whack given where interest rates are. He hasn’t really drawn the correct conclusion in that he positioned against the market rising and his flagship fund has suffered for it.

- Source, Seeking Alpha

Thursday, December 21, 2017

Marc Faber: Why Trump's rhetoric will drive up Asian stocks

(Please Click Image, or HERE to Watch Video)

Trump may publish harsh tweets, but that'll only send the Asian markets down for a day or so, Faber, also known as Dr. Doom for his pessimistic views, told CNBC's "Squawk Box" on Thursday.

- Source

Saturday, December 16, 2017

The Real Risk of Total Global Economic Collapse

Marc Faber discusses the very real risk that the world is facing. A total economic collapse. Central bankers are going to be the driving force behind this, and their ignorance is going to be our undoing. Get prepared.

- Source

Wednesday, December 13, 2017

Marc Faber: An avalanche of selling is coming our way

The Gloom, Boom & Doom Report’s Marc Faber discusses why he foresees the end of the market's bull run.

- Source, CNBC

Tuesday, November 28, 2017

Marc Faber: Every Market In Asia Has Outperformed The United States!

Marc Faber shares his thought provoking insights with us regarding freedom of the press the economy and also Blockchain technology. Other important subjects discussed is the Central Banker’s control over the economy and President Trump.

- Source, Crush The Street

Friday, November 24, 2017

Marc Faber: Will 2018 be Boom, Gloom, or Doom?

Dr. Marc Faber is a Swiss investor based in Thailand. He publishes a widely read monthly investment newsletter “The Gloom Boom & Doom Report” which highlights investment opportunities. He is also a published author and a regular contributor to several leading financial publications around the world. When it comes to investing your hard-earned money, he is the perfect person to learn from. 

This episode visualizes the possibilities of the future in terms of Economy and Investments. As an expert in the field, Dr. Faber explains how the world has changed rapidly and what could be expected in the coming years. He also offers great insights on what to consider when investing your money.

Monday, November 20, 2017

Marc Faber: There is Massive Fraud In This Financial Bubble

A big difference between the market today and that of the 1987 crash is unfunded pensions. Renowned investor Dr. Marc Faber, who holds a PhD in economics, says, “The unfunded liabilities have gone up. 

They did not go down. So, if in rising asset markets the pension funds unfunded liabilities go up, can you imagine what will happen when markets fall? So, they will have to print money.

Bear markets do not occur just because of one event. It’s a series of circumstances that lead to a loss of confidence with people exiting markets, and then with people exiting markets in a panic.

Fed Head Janet Yellen said if conditions would warrant further measures, the Fed would take further measures. So, she (Yellen) said if the Fed thought the economy was weakening, or their beloved asset markets go down, then she may again ease and introduce QE4 (money printing out of thin air.).

In today’s situation, the asset market is less overbought, but the asset bubbles are everywhere. Each bubble has fraud cases, and I mean massive fraud. That’s the characteristic of each bubble. There is fraud.”

- Source, USA Watchdog

Wednesday, November 8, 2017

Marc Faber Defends His Controversial Comments: "If I Recall We Have Freedom of Speech"

Dr. Doom has cited freedom of speech as part of his decision to not rescind his racist comments.

Marc Faber, the Hong-Kong based, Swiss-born financier, known as Dr. Doom, faced severe backlash this week for suggesting that the U.S. prospered because it was settled by white people rather than black people.

While the comments have led to his being dismissed from the boards of three firms, Faber does not appear to feel remorse for what he wrote. Faber told the New York Post in an email, “If I recall we have freedom of speech and expression. I am not prepared to compromise this freedom and liberty.”

He reportedly exchanged additional emails with the outlet, further clarifying his remarks. He explained that he is “aware that we all have different values, but I was talking about economic progress when I wrote my report, not [white nationalist] values.”

When Faber was asked about his opinions on the abilities of African Americans and their capacity to “deliver economic progress,” he simply replied, “May I suggest you travel extensively through Africa and you will find — hopefully the answer.”

When asked for comment on the Post report and the backlash over his comments, Faber told Fortune that, “If this is the only sin I committed in my life I would feel like a saint.”

- Source, Fortune

Thursday, November 2, 2017

Dr Doom: Stock Market Meltdown Coming and No One is Prepared

Share prices in the US have posted fresh record highs in recent days as fears over North Korea fade.

But a sharp downturn is coming and will be as bad as the 2008 shock, according to Marc Faber, who has warned investors are too complacent.

He told CNBC: "You don't see, and I don't see. And, nobody sees. That's why people keep buying stocks.

"And yet, something will happen one day."

He previously said billions of pounds worth of holdings will be lost when stocks fall a huge 40 per cent.

And said the crash is likely to happen when Wall Street least expects it.

There are several scenarios that could trigger market carnage, according to Mr Faber.

The pessimistic critic said: "I think it may very well come from a credit event.

"Or, it may come from the disclosure of a major fraud.

"Or, it may come because interest rates start to go up."

US stock markets continue to reach for the sky as the US Federal Reserve yesterday signalled further rises in interest rates.

The S&P 500 has hit 36 record highs this year, while the Dow has notched up 41 highest ever closes.

But the US Fed has forecast three rate hikes next year and there could also be a rate rise in December.

Dr Doom, as Mr Faber has come to be known, said the market is overvalued: "In 2009 when stocks bottomed out, I can tell you that not many people saw why stocks would go up.

"Now it's the opposite. The sky is clear. Corporate profits have been expanding — they're good.

"Interest rates are low, but valuations are very high."

- Source, Express