Marc Faber : Well, we have to distinguish several
factors. First of all, on QE1 the market in March 2009 was unbelievably
oversold and so the market was ready for a rebound and as you know that
if you print money, it goes somewhere and in the US it went principally
into equity prices and into corporate profits. We have record corporate
profits which is unusual because revenue growth is actually very
disappointing, very little revenue growth. But there are record profits
and I do not think these profits are sustainable.
Moreover, the
markets are no longer oversold. We are above 1400 on the S&P and
compared to other markets in the world, say if you compare the
performance of the US stock markets to foreign markets, over the last 18
months in early 2011 the US market had outperformed just about anything
else and therefore actually by international comparison the US market
is quite high and my view would be every central bank will print money,
including the ECB, directly or indirectly, whatever they may call it,
but they will do it. The European markets, some of them like France,
Italy, Spain, Greece and Portugal, two months ago were either below the
2009 low or close to the 2009 low on the S&P that would be the
equivalent of 666. So relative to other markets, some European stocks are now very inexpensive. - in Economic Times India
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