Marc Faber predicts another "Black Monday" by the end of the year

Marc Faber again makes pessimistic forecasts, writes MarketWatch. , Known as Dr. Doom, author of The Gloom, Boom & Doom Report, warning investors to prepare for a drop in the markets of 20% or more by the end of 2013 Faber predicted market crash like the one seen in 1987

"In 1987 we had a significant increase in stock prices. Profits, however, did not grow at a stable rate. Markets were overvalued. There was a sharp decline, and on August 25 was the last day on which a large number of shares registered 52-week low. In other words, the number of shares that rose, curled up and saw a number of disruptions to trade with different shares, "said in an interview with CNBC Marc Faber

October 1987 was a period that investors can not so easily forget. YTD broader index S & P 500 added 20% to its value. Faber comparison with 1987, when the market grew by 30% at the same time of year.

On October 19, 1987, the day known as "Black Monday", S & P 500 index dropped sharply by 20%. This event remains forever in the history of Wall Street as the biggest loss suffered in exchange for one day. It was the end of five years-long period of appreciation of the shares.

Faber notes that in just two days this week, when the S & P 500 hit historic high of 1,709 points, there were 170 issues, which were trading at 52-week lows. This means that only a few companies moving market.

Back in February, and then a few more times, Marc Faber make such negative predictions, but none of them came true. Analysts wonder how much longer he will play the role of the false shepherd before something actually happen?

Analyst at Schaeffer's Investment Research Ryan Detrick did make quite a different conclusion. According to him, just as in 1987, and now the index Dow Jones Industrial Average has almost doubled. Today, however, market participants behave differently compared to the year in question.



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

China vs The United States

 This is quickly becoming the favorite geopolitical parlour game. The Prospect Group put the question to Marc Faber and he was more than happy to oblige them with his thoughts on the subject.

Faber’s take on the two is the gap is narrowing but the US still remains the military superpower in the world. It is just quickly losing its perch as the number one market in the world. Which is to be expected according to Faber. China’s population warrants such a perch.

It would be odd for them not to be the leader in the mobile phone market of the refrigerator market if the country was fast growing.

What will cause the most tensions is the pivot towards Asia by the United States. With China flexing its military muscle, the US has been more willing to push out with its fleet and that has caused tensions to flare. Already, territorial disputes have erupted between Japan and China over an island chain.

Faber’s thought is that the US should let the countries resolve it on their own, but seeing as the US has strict alliances with countries such as Japan, that is unlikely. Plus, it is in the US national security interest to keep sea lanes open and controlled essentially by the US Navy.

Overall, the interview is an interesting listen and runs a pretty good clip. Clocks in at around 9 minutes so you’re not subjected to a lot of fluff. Plus this is Marc Faber. You know you’re going to get a steady diet of how he sees the world unfolding.

- Source, Trade the News



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

Has The FED Been Effective?

It is interesting that the money that has been printed essentially has not flown into the pockets of the workers or the middle class. We have precise statistics about who benefited from the money printing. Asset inflation has benefited a maximum of 3% or 4% of the population. It has benefited less than 1% meaningfully because if you look at real estate prices last year in the Hamptons, they were up 35% to record highs. Sandy Weill bought a condo in New York in 2007 for $43m at the peak and he sold it for $88m last August. Steve Cohen, a hedge fund manager, bought a condo for $24m on the East side and he is now putting it on the market for $115m. That price has gone up, the Mayfair economy or the luxury economy has gone up. But if you look at Las Vegas, or anywhere in the US that is not high end, it has recovered somewhat, but it is still way below the peak. But we also see this say in Asia. Recently I was in Bangkok and I have never seen such a big Ducati agent in the world. A Ducati is an expensive toy by Thai income standards. Driving around Thailand, you see a large number of Bentleys and Maseratis and Ferraris and BMWs and the works. These are expensive cars in this country because there is a 100% import duty on these cars. Whereby I think a lot of well to do people did not pay the import duty. - Source, The Prospect Group


Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

The Stark Contrasts Of Mongolia's Economic Boom

Mongolia is in the middle of an economic boom. In the last ten years the GDP has more than doubled, and Marc Faber has said it could be the "Saudi Arabia of Asia" due to its tremendous mineral resources. But all this growth hasn't come without problems, namely the "resource curse" where economies become unstable because of over reliance on one sector. Political problems are emerging, and neighboring China's thirst for gold is leading to so-called "ninja miners" who work, dangerously and illegally, under the cover of darkness... - in The Business Insider
Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.

A Financial collapse of dimensions

Like the aristocracy in Europe in the 18th Century, they didn’t give up just the power. They kept that power, same as the aristocracy in Russia in the 19th Century. They didn’t give up the power. Eventually, they were slaughtered. I believe what will eventually happen is that you have a financial collapse of dimensions so bankers can’t do anything.



Contrarian Investor Dr.Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.