Marc Faber : Stocks are Cheap in Europe

Marc Faber - Everything Financial Radio Interview - Dennis Tubbergen Show - 15 July 2012 : ...I look at Europe from an investment point of view and as an investor I do not think it really matters whether the euro falls apart or not , if it does not fall apart the economy in Europe will not grow and if it falls apart the economy will grow from a lower level , so it does not really matter , the fact is simply that two years ago there was Euro Optimism ..and now there is euro pessimism that is widespread and the markets in Portugal Italy Spain Greece France are near the 2009 lows or below these lows ..... all I am saying is that now stocks in Europe are cheap ....

Marc Faber: The Markets are very Volatile, and it takes a lot of courage to be Short

Marc Faber : ...The markets are very volatile. and it takes a lot of courage to be short. I don't want to be short copper because copper can like other markets be manipulated because there are not that many players in the copper market. and so we could see a rally in copper prices. we could see a rally in gold prices and so forth and so on. but where I see opportunities, we have had now for the last one year bad news and worse news from Europe, and we have widespread euro gloom. this is different. two years ago there was euro optimism. and now everybody is so down on Europe. the markets of Portugal, Spain, Italy, France, Greece are either below the march 2009 lows or close to these lows - in CNBC
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Marc Faber : The Chinese Economy Growing by maximum 3% not The Official 7.8%

Marc Faber : When the Chinese economy was strong 2000-2008, it drove up commodity prices and that boosted growth rates in emerging economies such as Brazil, Argentina, and the oil-producing countries in the Middle East, and central Asia, Russia and of course also Africa and Australasia. When the Chinese economy slumps, then obviously the demand for commodities goes down and these countries have less money and so they buy less and so it has a very strong multiplier effect on the global economy. Whether the US contracts or grows at 2% has no impact on commodity demand or the service industry. If China grows at 12% or only at 3%, that will have a huge impact on commodity prices. I think that the slowdown in the Chinese economy – and believe me, the Chinese economy did not grow in the second quarter by 7.8% - in my view, maximum 3% - and we have very precise statistics. The two countries where the exports were predominantly China-geared – Taiwan and South Korea and where the statistics are more reliable than what the Chinese announced in GDP growth, these countries have negative export growth on a year-on-year bases in the last month in June. If these countries have declining exports, it tells you something about the Chinese economy. We have other reliable statistics like gaming revenues in Macau and so forth. The overall revenues are still up but the junkit turnover is down. These are middle men who bring the gamblers to Macau. Their growth rate has slowed down, luxury consumption has slowed down and electricity consumption is basically flat. Steel and cement production is up maximum 2-4% year-on year and so we have some reliable statistics. Macdonalds just reported that their sales in Asia year-on-year is down more than 1%. Believe me if in a growth region, where markets are not yet saturated and where shops like MacDonalds are like prestige things for families to go and where their sales are down believe me – something is not quite right. I can see it with my own eyes. I don’t think that in Asia at the present time there is any economic growth. - in Citywire

Marc Faber : Negative US GROWTH without The Government Throwing Money

Marc Faber : In the US, growth has slowed down and it is insignificant in my opinion. The growth is insignificant. The statistics are published by governments and government agencies. I don’t believe that the US economy is growing much at the present time.
The way that GDP is calculated is that you put in some figures about sales and production and then you deduct the inflation rate which they calculate. But if you took unofficial costs of living increases, then I would guess that there is no growth because rents nationwide, for residential rates, the rates have gone up by 9%. Insurance premiums are going up and healthcare rates are going up and if you look at employment it is a disaster.
In the meantime, the government is essentially throwing $1.3 billion at the economy annually through the budget deficit and through the household deficit. Without these payments by the government, I think there would actually be actually negative economic growth. - in Citywire

MARC FABER ON CURRENT AND FUTURE ASSET BUBBLES

Marc Faber : Given that given that zero interest rates are in the US in nominal terms and if I take say a more realistic view of cost of living increases. Last week, NY taxi prices went up 19%. If I consider that, I think that US stocks may for the time-being actually rally but I have doubts that they will rally above the highs at 1422 we saw in April of this year on the S&P. I think that it’s possible that the US may rally as the whole world thinks that the US has natural gas and there will be a re-industrialisation in America. The mood amongst international investors is that the US is the least bad choice. I’ve always said if you give me the choice to buy a 10 year treasury at the yield of 1.5% or Johnson&Johnson, I’d rather buy Johnson&Johnson with a ten-year view. But as I said, if I look at all the options that I now have, I can see that European stocks are now terribly depressed. I still own Asian shares and again the reason I own them is we have next to zero deposit rates and my portfolio of Asian shares has an average yield of say 5-6%. If I look at my investments, I think that they might go down 30% but I don’t think there will be massive dividend cuts – some here and there but not across the entire portfolio. I still keep a lot of cash because if the markets drop another 30% - which I hope they will do – I will then invest in equities. - in Citywire

Marc Faber : ZERO to Negative GDP Growth in the US in 2012

Marc Faber : In the US, growth has slowed down and it is insignificant in my opinion. The growth is insignificant. The statistics are published by governments and government agencies. I don’t believe that the US economy is growing much at the present time. The way that GDP is calculated is that you put in some figures about sales and production and then you deduct the inflation rate which they calculate. But if you took unofficial costs of living increases, then I would guess that there is no growth because rents nationwide, for residential rates, the rates have gone up by 9%. Insurance premiums are going up and healthcare rates are going up and if you look at employment it is a disaster. In the meantime, the government is essentially throwing $1.3 billion at the economy annually through the budget deficit and through the household deficit. Without these payments by the government, I think there would actually be actually negative economic growth.- in City Wire

Marc Faber : China Slowdown to have a huge impact on Commodity Prices

Marc Faber : When the Chinese economy was strong 2000-2008, it drove up commodity prices and that boosted growth rates in emerging economies such as Brazil, Argentina, and the oil-producing countries in the Middle East, and central Asia, Russia and of course also Africa and Australasia.
When the Chinese economy slumps, then obviously the demand for commodities goes down and these countries have less money and so they buy less and so it has a very strong multiplier effect on the global economy.
Whether the US contracts or grows at 2% has no impact on commodity demand or the service industry. If China grows at 12% or only at 3%, that will have a huge impact on commodity prices.
I think that the slowdown in the Chinese economy – and believe me, the Chinese economy did not grow in the second quarter by 7.8% - in my view, maximum 3% - and we have very precise statistics.
The two countries where the exports were predominantly China-geared – Taiwan and South Korea and where the statistics are more reliable than what the Chinese announced in GDP growth, these countries have negative export growth on a year-on-year bases in the last month in June. If these countries have declining exports, it tells you something about the Chinese economy.
We have other reliable statistics like gaming revenues in Macau and so forth. The overall revenues are still up but the junkit turnover is down. These are middle men who bring the gamblers to Macau. Their growth rate has slowed down, luxury consumption has slowed down and electricity consumption is basically flat. Steel and cement production is up maximum 2-4% year-on year and so we have some reliable statistics.
Macdonalds just reported that their sales in Asia year-on-year is down more than 1%. Believe me if in a growth region, where markets are not yet saturated and where shops like MacDonalds are like prestige things for families to go and where their sales are down believe me – something is not quite right. I can see it with my own eyes. I don’t think that in Asia at the present time there is any economic growth. - in Citywire

Marc Faber Warns The Slowdown in China is Larger than Reported

Fri 13 Jul 2012 : Marc Faber reacts to China's GDP data, and today's market rally.

Marc Faber : well, I think first of all investors must realize that the impact of a slowdown in the Chinese economy, which in my view is much larger than what the government has been reporting, the government says GDP has been growing at 7.8%, in my view it's much lower because we have very reliable statistics. say, export figures from Taiwan. export figures from south Korea. where the largest export destination is china. they're down year on year. electricity consumption in china is hardly growing. and so i think the economy in china is rather weak. but of course the markets have rallied because they think that because of weak economic growth in china they will stimulate, they will print money like in the united states and Europe and so forth and so on and that it will boost prices for a while.

Marc Faber : Massive Wealth destruction coming

Marc Faber : “Massive wealth destruction coming,” Marc Faber warned in an interview on CNBC in 13 July 2012 , The Super-Rich “may lose up to 50 percent of their total wealth.”
“Somewhere down the line we will have a massive wealth destruction. That usually happens either through very high inflation or through social unrest or through war or credit-market collapse.”

Marc Faber Portfolio 30% in Cash

Marc Faber : Because I didn’t buy a lot of equities and I liquidated quite a bit in Asian equity in recent weeks, I think the cash is around 30%. Then I have a lot of bonds. I have some which are more cash-like and some with a more equity-like character. - in an interview today with citywire.co.uk

Marc Faber : European Equities are now Cheap and a good Investment

Marc Faber : What we have is a rapidly slowing global economy. What we essentially have in the advanced economies are zero interest rates. I guess that the downside risk to real estate and equities is for now limited. I obviously still own real estate and since we talked I added to some real estate in Thailand - not that I particularly am optimistic about real estate in Thailand because prices have moved up a lot already. I just want to have some money in hard assets because I think eventually we will have a financial crisis where financial assets will be under stress. The only thing that I have changed meaningfully since our discussion in February is the following. For the first time in my life, I have been buying some European stocks because I can see the markets of Portugal, Spain, Italy, Greece and France near the March 6 2009 lows. The equivalent at that time was the S&P at 666. We are now at 1350 so basically these markets relative to the rest of the world are very cheap and some stocks in the markets are perfectly fine companies but because these markets were weak and because there is a threat of a euro break-up, everything has come down to very low valuations. - in an interview today with citywire.co.uk

Marc Faber Buying European Stocks For the first time in his life

Marc Faber : 'For the first time in my life, I have been Buying European Stocks because I can see the markets of Portugal, Spain, Italy, Greece and France near the March 6th 2009 lows,’
‘These markets, compared to the rest of the world are very cheap and some stocks are perfectly fine companies but because these markets were very weak and because there is a threat of a euro break-up, everything has come down to very low valuations.’ Marc Faber told Citywire Global on Monday from his home in Thailand - in Citywire Global

Marc Faber : Beware China but Not Commodities

“The markets are very volatile and it takes a lot of courage to be short,” Marc Faber told CNBC this morning “I don't want to be short copper because copper can, like other markets, be manipulated because there are not that many players in the copper market, and so we could see a rally in copper prices, we could see a rally in gold prices and so forth and so on.” “I think…investors must realize that the impact of a slowdown in the Chinese economy, which in my view is much larger than what the government has been reporting, the government says GDP has been growing at 7.8%”, he explained. “In my view, it's much lower.” - in CNBC

Difficult to be Bullish about the US Dollar or anything in the US Economy

Marc Faber : I think it is very difficult to be bullish about the US dollar or anything in the US economy. But, compared to other currencies, the dollar is now a relatively safe currency. Global liquidity is tightening and so the dollar probably will continue to appreciate, most likely also against Euro. But it is not that the US dollar is particularly good. It is just less bad for the time being. I have to specify for the time being compared to other currencies. - in ET Now

Marc Faber : The World is heading toward a Major Crisis

Marc Faber : The breaking point could be three, four, five years away. The world is heading toward a major crisis. In the meantime, central banks can continue to print money and markets might move up. Since 2009 stocks around the world have more or less doubled. But the economy hasn't performed well, and the typical household hasn't been helped. With quantitative easing, money flows into the hands of relatively few people. I am very negative about the outlook longer term.
It is safest to buy U.S. Treasuries because the U.S. can print money. It will pay the interest. But you are earning only 1.6%, and the cost of living is increasing by about 5% a year around the world. You are getting a negative real return. - in Baron's round table June 2012

Marc Faber : The Economic Situation in the US worse than 10 years ago

Marc Faber : ...well very clearly compared to say ten , twelve years ago the financial condition of the US has deteriorated because A the medium household have lost money and B the real income are down for the majority of people in other words the medium household income is down and the debt level and as I just mentioned the unfunded liabilities are up very substantially - in a Slovak Radio interview
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MARC FABER : US Bonds like The NASDAQ In 1999 - The Biggest Bubble Ever

Marc Faber, publisher of the Gloom, Boom & Doom report, talks about his strategy for global stocks, bonds, commodities and currencies. " If you had asked me about the NASDAQ in December 1999, I would have said this is the biggest bubble ever. And yet the NASDAQ continued to go up 30 percent until March 21st 2000, and then what happened to the NASDAQ and how have these people faired that invested in the NASDAQ in the final months of 1999 and early months of 2000? It's been a disaster. And I think the government bonds bubble will also burst, but I don't know if it's tomorrow or in three months. I suspect actually maybe sooner than later, because the consensus is now buy US government bonds...I can see why people buy US Government bonds " Marc Faber said

Marc Faber : Huge Fiscal Deficit in the USA overtime

Marc Faber : well basically we have a very large fiscal deficit and we have very large unfunded liabilities , The Democrats should cut the spending which is mainly on entitlement meaningfully and since the economy is very sluggish it will be very difficult to increase taxation so in my view essentially The fiscal deficit is going to become a huge problem overtime - in a Slovak Radio interview
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Marc Faber : a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone

Marc Faber : "If you put one or 100 sick banks in a union, it does not change the fact that they're sick. In my view the markets are rallying because they were grossly oversold. And when markets are grossly oversold, especially markets of Portugal, Spain, Italy, France, then any news that is not disastrous news propels stocks higher. And so I think that combined with seasonal strength in July, the rally has carried on somewhat. But it is another cosmetic fix, a quick fix that does not solve the long-term fundamental problem of over investment in the euro zone. And what it does, basically, it forces Germans savers to bailout and to continue to finance people in Spain and Portugal and Greece and so forth that are living beyond their means." - in Bloomberg
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Marc Faber: The European Banks Are Sick

Marc Faber :" ...If you put one or a hundred sick banks in a union it does not change the fact that they are sick , in my view the markets are rallying because they were grossly oversold and when markets are grossly oversold especially markets of Portugal Spain Italy France then any news that is not a disaster is propels stocks higher ..." says Marc Faber , publisher of the Gloom, Boom & Doom report, talks about his strategy for European stocks and the outlook for the EU debt crisis. Faber speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

Marc Faber : We have a Spiral on the Downside

Marc Faber : We are in recession in Europe We have an economic slowdown in the U.S. and we have not really recovered in the U.S. from the lows of 2009 and we have essentially a slowdown in economic growth in Asia and we have sliding commodities prices , so the commodities producers they have less money to buy goods and so we have essentially a spiral on the downside - Click Here to watch the full interview>>>>>>

Marc Faber Bullish on Equities in Portugal Italy Spain and France

Marc Faber Bullish on Equities in Portugal Italy Spain and France

Marc Faber : ...In my view the markets are rallying because they were grossly oversold and when markets are grossly oversold especially markets of Portugal , Spain Italy France then any news that it is not a disaster news propels stocks higher " says Marc Faber adding that what Europe did is just a cosmetic fix that does not solve the long term problems of over indebtedness in the Eurozone , " ...in Portugal Spain Italy and France the markets are either at the lowest of March 2009 or lower and along with that companies and the banks also reasonably good companies have been dragged down and so I see value in equities regardless if the Eurozone stays or is abandoned

Marc Faber: Investing opportunities in Italy, Portugal & Spain

Dr Marc Faber is interviewed by a Slovak Radio via phone directly from Thailand,He talked about the situation in the U.S., EU and Asia, and gave his opinion on precious metals.

Question : Yesterday (05 July) The ECB cut its base rate to a historic low and the conditions for release of collateral to banks. This will help Europe?
Marc Faber : I do not think so. I think whatever now the government will undertake may postpone the problems but it does not solve them , and the problem is too much debt. I mean I would say how long would the Germans essentially be willing to finance the excess consumption in Spain, Italy, Greece and Portugal and so forth . And I would like to add that although the situation is not ideal in these countries and these countries are close to the lows in 2007-2008 and may even fall even lower, there are decent companies in Spain Italy and Portugal that are now relatively cheap and in which Today, in my opinion is worth investing. I see real value there.

Marc Faber : Markets Oversold Especially in Europe

Q: What did you read first of the kind of reaction global equities had to the Euro Summit and the notes that came in from there?
Marc Faber : To start with, I think markets were oversold especially in Europe. When there was moderate good news, there was a lot of European short covering and a lot of stock rebounded by 5-7% in just one day.  - in CNBC TV 18 interview
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Marc Faber : We are still in a High Risk Environment

Q: Would you say the rally is probably short-lived and saw the best part of it play out by last week itself?
Marc Faber : This is too early to tell. Basically, we made a low in early June and at 1261 on the S&P and then we rallied and we came down again, but we didn’t test a new low. We may rebounce to around 1400 on the S&P. Don’t forget July is a month of seasonal strength and that we are coming into the election, there maybe some more money printing and fiddling with statistic sense of ours. So the market may actually rally a bit more. But it doesn’t change the global picture, which is essentially for a global economic slowdown, for an increasing number of companies that are reporting disappointing sales for forecast, for earnings.
When there is a minor disappointment that’s what the case on Friday in the case of Nike, the stock then drops very significantly and erases essentially all the gains of the last three or six months. So we are still in a high risk environment. Eventually, I think that in the next 12 months, you will be able to buy most markets at a lower level than today. The only stocks I bought in the last 10 days are from the fresh issues in Portugal, Spain, Italy and France. - in CNBC TV 18 interview
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Marc Faber : Not a particularly Happy Time for Investors Recently

Marc Faber : We have to be very specific. The total return of equity if you include dividends since 2007 hasn’t been a disaster. It hasn’t been particularly good, but it hasn’t been a disaster and the return from bonds have been very good and for commodities depending which ones you owned was also reasonable. So I think for investors, the situation was not all that bad. But I concede that a lot of people lost a lot of money because they were badly positioned, either overweight, stocks that went down a lot or they were in the case of the US heavily geared into the property market that tumbled and reversed. So I agree that it hasn’t been a particularly happy time for investors. - in CNBC TV 18 interview
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Marc Faber : The Euro Not a very desirable Currency

Marc Faber : In my view, the euro is not a very desirable currency, but the US dollar is not much better. I think if you look at the action of central banks around the world, it is very difficult to find any paper currency with which you can be particularly happy. If the Chinese economy slows down more as I expect it will then you will also have easing in China and capital flight and maybe the Chinese RMB will weaken.
Among the context of who is the least ugly currency I would say probably the US dollar for the time being, but that doesn’t change the fact that the US dollar was overbought recently and sentiment surrounding both European stocks and the euro was extremely negative. So I think a rebound in the euro may continue very well and then will have renewed weakness in my view. - in CNBC TV 18 interview
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Marc Faber Video Interview - CNBC TV18 - 02 July 2012

Marc Faber : “Don’t forget July is a month of seasonal strength and that we are coming into the election, there maybe some more money printing and fiddling with statistic sense of ours. So the market may actually rally a bit more. But it doesn’t change the global picture, which is essentially for a global economic slowdown, for an increasing number of companies that are reporting disappointing sales for forecast, for earnings.”

Marc Faber : Global markets to plunge further in 12 months

Marc Faber : Basically, we made a low in early June and at 1261 on the S&P and then we rallied and we came down again, but we didn’t test a new low. We may rebounce to around 1400 on the S&P. Don’t forget July is a month of seasonal strength and that we are coming into the election, there maybe some more money printing and fiddling with statistic sense of ours. So the market may actually rally a bit more. But it doesn’t change the global picture, which is essentially for a global economic slowdown, for an increasing number of companies that are reporting disappointing sales for forecast, for earnings.
When there is a minor disappointment that’s what the case on Friday in the case of Nike, the stock then drops very significantly and erases essentially all the gains of the last three or six months. So we are still in a high risk environment. Eventually, I think that in the next 12 months, you will be able to buy most markets at a lower level than today. The only stocks I bought in the last 10 days are from the fresh issues in Portugal, Spain, Italy and France. - in CNBC TV18 02 July 2012

Marc Faber Investment Picks for 2012

Marc Faber : I still like my January investment picks. As a group, Singapore REITS look OK. Among them I like Mapletree Commercial Trust [MCT.Singapore], Frasers Centrepoint Trust [FCT.Singapore], K-REIT Asia [KREIT.Singapore], Mapletree Logistics Trust [MLT.Singapore], Ascott Residence Trust [ART.Singapore], Cache Logistics Trust [CACHE.Singapore] and Parkway Life [PREIT.Singapore].
I am also warming to gold shares. Gold corrected to $1,522 last December from $1,921 in September. It rebounded to $1,795 in February and is back down around $1,600. The correction could last longer, but given that governments will print more money, gold is relatively effective as a currency. My preference is physical gold, but I would also own some gold shares, which have been decimated. Goldcorp [GG] is attractive because most of its properties are in the U.S., Canada, and Mexico. The company isn't exposed to regimes that are talking about nationalizing resources. In general, stock markets are oversold. The U.S. government-bond market is overbought. The U.S. dollar is overbought, and gold is oversold near term. - in Barron's roundtable June 2012

Marc Faber : The breaking point could be three, four, five years away

Marc Faber : The breaking point could be three, four, five years away. The world is heading toward a major crisis. In the meantime, central banks can continue to print money and markets might move up. Since 2009 stocks around the world have more or less doubled. But the economy hasn't performed well, and the typical household hasn't been helped. With quantitative easing, money flows into the hands of relatively few people. I am very negative about the outlook longer term.
It is safest to buy U.S. Treasuries because the U.S. can print money. It will pay the interest. But you are earning only 1.6%, and the cost of living is increasing by about 5% a year around the world. You are getting a negative real return. - in Barron's roundtable June 2012

Outlook for The Stock Market For the Rest of 2012

Marc Faber : Most markets peaked in May 2011. The S&P 500 fell to 1,074 by Oct. 4 from 1,370. Then we had a strong rebound with the index making a new high at 1,422. This high wasn't confirmed by other indexes, such as the Value Line Index, the Russell 2000, and the Dow Jones Transportation index. The S&P 500 is vulnerable at this level. I anticipate further weakness in the second half of the year. Corporate profits will disappoint. Some 40% of S&P 500 earnings come from overseas, and a large proportion are generated in Europe. There is no resolution to the problem in Europe because no one wants to accept austerity. The best outcome for Greece probably would be to exit the euro zone. But the new Greek drachma would depreciate by 50% to 70% against the euro. The Greeks don't want their pensions paid in a depreciating currency. Nor do they want austerity, as their pensions and government salaries would be cut by 50%. - in Barron's roundtable 2012

Marc Faber Recommends Diversification

Marc Faber : You are asking a very good question because I have been thinking about this a lot. High quality government bonds of Germany, Switzerland, Japan and the US are at a very low level of interest rate and are no longer safe. So whereas I am not optimistic about asset prices, I think that if you take a 10-year view, then just as an example if you I have to to buy over the next 10 years and the holding period is 10 years, a US treasury note at the yield of 1.6% or I give you the opportunity to put your money in Johnson & Johnson that yields 3.5%. I happen to think that Johnson & Johnson over the next 10 years will outperform treasury norms or treasury bonds of 30 years maturity. But you live with volatility, may be the next 10 minutes or next three months or next six months treasuries may still outperform, but I believe the notion that US treasuries are safe is misplaced.

Government Bonds of Germany, Switzerland, Japan and the US are no longer Safe

ET Now: Do you think globally money managers are extremely risk averse? If I look at US bond yields, they are nearing 1%. If I look at German bond yields, they are also nearing 1%. Do you think it is a matter of time the world will be opening up to risk or do you think for the next two or three quarters risk off trade will continue?
Marc Faber: You are asking a very good question because I have been thinking about this a lot. High quality government bonds of Germany, Switzerland, Japan and the US are at a very low level of interest rate and are no longer safe. So whereas I am not optimistic about asset prices, I think that if you take a 10-year view, then just as an example if you I have to to buy over the next 10 years and the holding period is 10 years, a US treasury note at the yield of 1.6% or I give you the opportunity to put your money in Johnson & Johnson that yields 3.5%. I happen to think that Johnson & Johnson over the next 10 years will outperform treasury norms or treasury bonds of 30 years maturity. But you live with volatility, may be the next 10 minutes or next three months or next six months treasuries may still outperform, but I believe the notion that US treasuries are safe is misplaced. - in ET Now 21 June 2012

The Fed Will Have up to QE99

Marc Faber : Yes, that is quite a good assumption. I think that the Fed will not only have QE3, but QE4, 5, 6, 7, 8, 9, 10, up to 99 until the whole system collapses. - in ET Now 21 June 2012