Marc Faber says prepare for a market meltdown

Discussion in 'Economics' started by S2007S, Nov 13, 2012.

  1. S2007S

    S2007S

    I agree with what he says however who knows how long before it happens, I dont think the fiscal cliff isnt anything to worry about, the hype and talk behind that is just chatter, they will have everything in place to have a fix on it by the end of December...as he says


    “I think the whole global financial system will have to be reset and it won’t be reset by central bankers but by imploding markets — either the currency [markets, debt market or stock markets,” he said. “It will happen — it will happen one day and then we’ll be lucky if we still have 50 percent of the asset values that we have today.”


    The whole global financial system should have been reset years ago, but they avoided the reset button and sent in BUBBLE ben bernanke to boost markets with, QE 1,2,3, historical low interest rates, worthless dollars and more debt, anyone who thinks this economy and the rest of the world economy is in the clear is a fool, all they did was push it aside for the time being, you can only do that for so long before the system once again starts to crack, they just did a quick patch job...wait till the real drop comes and there is nothing left to prop it up, then what do you do....Faber is right, it will happen one day!


    Marc Faber: Prepare for a Massive Market Meltdown
    CNBC.com | November 13, 2012 | 07:54 AM EST

    The markets are going to go into meltdown soon, so expect stocks to lose 20 percent of their value, Marc Faber, author of the Gloom, Boom and Doom report told CNBC on Tuesday.

    “I don’t think markets are going down because of Greece, I don’t think markets are going down because of the ‘fiscal cliff’ — because there won’t be a ‘fiscal cliff,’ ” Faber told CNBC’s “Squawk Box.” “The market is going down because corporate profits will begin to disappoint, the global economy will hardly grow next year or even contract, and that is the reason why stocks, from the highs of September of 1,470 on the S&P, will drop at least 20 percent, in my view.”

    Faber, who is known for his bearish views, cited tech giant Apple [ AAPL 547.26 +4.43 (+0.82%) ], a company whose disappointing earnings have caused its stock to fall 20 percent from its September highs and 14 percent in the past month.

    A series of poor quarterly earnings from corporate giants such as Amazon.com [ AMZN 227.24 +0.77 (+0.34%) ], McDonald's [ MCD 84.93 +0.05 (+0.06%) ] and Google [ GOOG 662.76 -3.14 (-0.47%) ] have hurt investor sentiment in recent weeks.

    Faber argued that the “fiscal cliff,” a rise in taxes and automatic spending cuts, would actually involve some minor tax increases in “five years’ time” and some spending cuts “in 100 years.”

    What the U.S. needed was some pain, he said, aptly demonstrated by the euro zone’s austerity measures that are attempting, with a mixed measure of success, to curb gaping budget deficits.

    “There will be pain and there will be very substantial pain. The question is do we take less pain now through austerity or risk a complete collapse of society in five to 10 years’ time?” he said, adding that there was a lack of political will to tackle the U.S. budget.

    (Read More: Forget Mayans, Be Afraid of US Budget Armageddon)

    Faber added: “In a democracy, they’re not going to take the pain, they’re going to kick down the problems and they’re going to get bigger and bigger.”

    Payback Time

    Faber identified several issues curbing an economic recovery, such as the real estate market, which he said had never been so “overbuilt.” He also said there was lots more deleveraging ahead.

    “In the Western world, including Japan, the problem we have is one of too much debt and that debt now will have to be somewhere, somehow repaid or it will slow down economic growth,” Faber said. “I think we lived beyond our means from 1980 to 2007, and now it’s payback period.”

    (Read More: Greece Needs Another 80 Billion Euros)

    Faber told CNBC that central bank stimulus was useless and the implosion of markets was the only way to restructure the financial system.

    “I think the whole global financial system will have to be reset and it won’t be reset by central bankers but by imploding markets — either the currency [markets, debt market or stock markets,” he said. “It will happen — it will happen one day and then we’ll be lucky if we still have 50 percent of the asset values that we have today.”
     
  2. Can he be more specific about the timing of it all? :confused: :eek: :D
     
  3. sheda

    sheda

    Do fuck off.
     
  4. the way I see it, rates are low, the fed is accomodating, there is some improvement in housing, growth will probabably be low, I have doubled my money since 2009 but am worried there has been no correction in the market to shake out the weak hands.

    But they never come to my house to interview me.

    What the hell do I have to predict to get some news coverage?
     
  5. USA owes $600 trillion in derivatives.
     
  6. 1) Without googling it, what is the proper name for "1,000 trillion"? :confused:
    2) That $600 trillion is "offsetting" positions, not outright positions. :cool:
     
  7. Nazdack, 1 quadrillion.
     
  8. The problem is infrastructure change.

    This always has to be accommodated.

    consider the last infrastructure change:

    Agriculture to industralization.

    Labor before was 70% agriculture. Then it bacame 3%

    This shift is out of industrialization. Manufacturing will become relatively small.

    It is important to understand how such shifts take place.

    The media is way behind the curve for announcing what is going on these days. Too bad.
     
  9. prepare for a portfolio meltdown if you invest based on this guys advice.