Marc Faber Fears 1987 Redux As "Markets Will Punish Interventionists"

Tyler Durden's picture

"Regardless of what the markets do near-term, a correction is overdue," Marc Faber tells Bloomberg TV's Betty Liu. From discussing Europe's 'apparent' stabilization - "anything can go up when you print money"; to US equity exuberance - "a correction is overdue and February is a seasonally weak month"; Faber sees no change from Geithner's handover to Lew as he opines: "The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary policy that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would be embarrassing for the Fed's sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover."




Faber: on whether he agrees with George Soros that Europe has been stabilized:

"It has been stabilized for now, but the big question as he said is the imbalances have not been solved and these could come back and harm the markets and the euro at some point in the future. In terms of stock markets, I have advocated one year ago between April and June of last year to buy European stocks in Portugal, Spain, Italy, Greece and France because they were extremely depressed. Since then, the markets have rallied very sharply. Greece is up from the lows by 100%. That tells you anything can go up when you print money."

On whether he's getting out of European markets:

"Not really because we made the secular low roughly one year ago, but I have argued that it is the time right now to reduce equity positions. I think the markets are at the difficult juncture between overbought and a euphoric state. I am not ruling out that they could go up somewhat more like in 1987, going up 40% between January and August, but we also fell 40% in two months' time. So the gains were wiped out quickly. In March of 2009 we are close to 1500. We had already a huge bull market, and a lot of the good news has been discounted already."

On whether there will be a correction on the S&P:

"I think regardless of what the markets do, near-term, a correction is overdue and usually February is a seasonally weak month…It will be interesting to see how the correction unfolds."

On why he's not going big on any short in the market:

"The problem with shorting the markets nowadays is that you have this huge intervention by governments. Look at bonds of Italy Portugal and Spain--they rallied last year, there was a huge profit opportunity, and I admit that I missed it, but the profit opportunity came about as a result of government intervention. I feel the markets are -- some people say it is intervention. I can call it manipulation. If manipulation continues, you do not know how far they will go. The only thing I know is one day the markets will punish the interventionists, the Keynesians and the monetary that the Federal Reserve and ECB has enforced because the markets will be more powerful one day. How will this look like? Will the bond market collapse or equity markets become a bubble, which would be embarrassing for the Fed's sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover."

On Tim Geithner's legacy and whether anything will change under Jack Lew:

"I doubt there will be much change. To be fair to Mr. Geithner, he inherited a colossal mess. he is involved in politics and he has to listen to what the politicians want to do. He did an ok job. Where it is not ok is that basically nobody that has committed financial fraud or contributed to the fraud was prosecuted."

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gjp's picture

or equity markets become a bubble, which would be embarrassing for the Fed's sake if the U.S. market became a gigantic bubble and at the same time the economy does not recover

Um, news flash Mr. Faber, that horse left the barn a long time ago.  The Fed and everyone involved in this repeated scam should be deeply embarrassed.  But they're too busy patting themselves on the back and laughing in disbelief that it worked again.

TruthInSunshine's picture

The Bernank is like Navin R. Johnson in The Jerk, with his "virtuous circle" macroeconomic theory representing Nathan Johnson's ashtray, paddle game & remote control, as all he "needs." 

Shit could be falling down & collapsing, and burning, giving off thick streams of smoke, comets and fiery asteroids crashing everywhere, and as long as the equity "markets" post daily 1/2 % gains continuously and forever, The Bernank is vindicating the "virtuous circle" macroeconomic theory.

Ashtray, Paddle Game & Remote Control - That's All I Need

The Bernank is desperately clinging to his "virtuous circle" macroeconomic theory as the shot clock to 2014 runs down.

Banksters's picture

Bernank and his minions know that we are in the event horizon of the exponential function.   If wages don't follow the next credit doubling, BOOOOOOOOOOOOOOOM.  However, if they do, then BOOOOOOOOOOOOM.


Wash rinse repeat.   The fucker is doomed.   

JuicyGrabs's picture

Sleepy head eye job meets Mr Obvious.

dark pools of soros's picture

The market will crash when they want it to..  it is a tool like mob muscle

Cursive's picture

Two things are driving this market upward:

1.) The few remaining bears are still being squeezed.

2.) Newly converted bears have been trained to BTFD.

Once this underbrush of kindling has been burned off, there will be nothing left to this rally and, with all of the roots gone, will have ensuing mudslides once the rain starts.  Of course, this could happen before or after SPX 1600, so it's not like it good "investment" advice.

dark pools of soros's picture

Ben prints 85 bil a month and you have legions of 401ks that force the workers hand to buy small selection..


the manipulation is set for quite a while



TruthInSunshine's picture

Let me provide the LameStream Media (compliments of the New York Times) narrative as to why the equity "markets" are now back at their nominal year 2000 levels (try not to laugh; really):


Breaking News 4:04 PM ET

S. &. P. 500 Closes Above 1,500


Stocks Near New Heights as Small Investors Regain Faith

By NATHANIEL POPPER 10 minutes ago

Americans seem to be falling in love with stocks again.


After millions of people all but abandoned the market after the 2008 financial crisis, individual investors are pouring more money than they have in years into stock mutual funds. The flood, prompted by fading economic threats and better news on housing and jobs, has helped propel the broad market to within striking distance of its highest level ever.

**This section was since edited, and earlier read that:

Money pouring into stocks in the last three weeks through mutual funds — the common investor’s way to play the market — has helped put the broader market within sight of its highest levels ever.


You see? Equity markets are rising to their year 2000 levels (not the Naz, though) not because of the 85 billion per month (a clean trillion per year; hey! That's about the size of the deficit!) POMO pump, but because the "little guy" is buying "stawks" hand over fist.

I hope that conclusively & permanently establishes the foundation for this secular bear "market" rally (now in a dead heat with that which took place from 1930 to 1933, prior to that fiat-juiced bottom from falling out).

Oh, I almost forgot, fundamentals and compelling P/E & P/S ratios on stawks such as PCLN, CMG, AMZN & CRM are also deeply attractive to "value investors."

Thank you.

espirit's picture

I know it will a tenuous wait at best, but positioning for May is probably what they're setting up the shearing corner for.

Should the rampalooza continue on, prepare the best you can.

The fall is going to hurt everyone...bad.

ZeroAvatar's picture

This is going to be epic, and it's nigh at hand.

CheapBastard's picture

Interestingly, the Chinese never regained faith in the stock markets seeing too much fraud. Instead, they have their money either; 1) in cash; 2) in some form of RE; or 3) in hard assets such timber or PMs.


Shanghai index never recovered and in HK people were so punked being sold Lehman MiniBonds (worthless althugh rated AAA by NYC rating companies) they moved away from the makets also.

AgAu_man's picture

They are being smart and shrewd: converting tertiary (fiat paper) 'assets' into primary and choice secondary assets.

So are the Top TPTB players for their own private portfolios. So should you.

When the Harvest is over, it's over.

FEDbuster's picture

"Invest in things you can stand in front of and defend with an AR-15"  Ann Barnhardt 2011

"Buy some gold or silver each month, become your own Central Bank" Dr. Marc Faber


King_of_simpletons's picture

The Modus Operandi is "Pretend, propagate, propagandize, ignore, blare, deceive" that the economy is doing great and that small investors are jumping in. The mom and pop guy who reads this article won't want to miss the boat and will probably plunk his hard cash into this ponzi scheme. In the end bubbles always end in misery for the participant. The media does a great disservice in this country. Instead of exposing schemes and fraud in real time, they earn awards examining scams in performing postmortem. That's the way this system is set up. Glad that more people are not falling for this outright lie and cash see through all this BS.

SeattleBruce's picture

"The media does a great disservice in this country."

The lack of curiosity about the fraud markets, and any kind of convictions for the massive fraud stemming out of 2007/8 is most telling.  What use are they any longer?  Thank God for the blogosphere.  Learn, act and network on it while you can!

Bubble's picture

But they fixed it all by telling us it was fixed.

sun tzu's picture

recovery summer, green shoots!!!

CPL's picture



For a day more I think.

Spitzer's picture

I want in her loop.

StoleYourMoney's picture

This will be called the QE Bubble!

de3de8's picture

Betty Liu is hot!

chubbyjjfong's picture

I do like that interesting, extra chunky SILVER chain around her neck, very provocative indeed.

BlueCheeseBandit's picture

That was jewelry? I thought she lost her locker key at work and had to find another way to deal with her bike chain.

FEDbuster's picture

Solid would be too heavy, maybe hollow links?  Most likely hollow and plated.  BTW bike chain jewelry looks like slave wear.

AldoHux_IV's picture
  1. did anyone else read his comments in his accent?
  2. i disagree the markets will ever be bigger/more powerful than the interventionists and thus price levels don't really matter-- if the general assumption is that the markets are pricing in hope and giving benefit of the doubt than it will get just that and continue to go up as data points can be subjective
  3. faith is the real bubble and thus the loss of it in the system and the emergence of alternative ones is really what will punish such reckless and morally corrupt ways
knowless's picture

so, is his german or french better, his english always sounds a little broken to me.. any interviews in other languages of merit?

knowless's picture

found some for myself again.. godfuckingdammit.





compare shit people. even if you only know one speek.

knowless's picture

he does the same shit across language. he carrries the Affect. underlined "A" and they all talk specifically about the amreican stock market.

Titus's picture

Who can fucking understand Swiss German except the Swiss anyway? The reason a spouse of a Swiss national has to wait 10 years before getting citizenship is it takes at least that long to comprehend Swiss Deutsch.

Yen Cross's picture

 You Germans And Limies! I s Cameron going to leave the (EU)?   I like Cameron, and I hope his referrendum works!

Sudden Debt's picture

populist talk. England never wanted to join the euro so can't get external help for it's financial problems and can only print for itself destroying the pound.
They need help from Europe and this is the blackmail tool.
Remember Greece?

they also wanted he Cosa Nostra Union and got a shitload of money to stay in.
So did spain...
And so will England.

AgAu_man's picture

Look, I like England and the Brits. However, let's be intellectually honest: without the EU, its Commonwealth, or the US-Commonwealth, they'd be in far worse shape than they are.

Spent too much time there and know too many British expats in North America to be bamboozled by their Gov.UK or their propaganda.

You should know that their advertising (propaganda) industry is ahead of Madison Ave.

Pope Clement's picture

me too Yen- Heard the speech in the middle of the nighr and it seemed to have a Churchillian air....

Sudden Debt's picture


A cookie anyone?

disabledvet's picture

classic. equities believe it or not haven't been in a bubble...certainly since the tech wreck...but i would argue insofar as the West is concerned "not since the 1920's." i'm sorry but i just don't see the truly insane valuations...ala Japan in the 80's or China in the 90's...where 1000 p/e's were NORMATIVE. Nope..."the Western Way" is to speculate wildly in real estate first ("never making more of it") and commodities (especially gold) second. the latter is TERRIBLY small and hence easy to manipulate in ANY direction save oil and natural gas. The former obviously is big since it has the total involvement of Government "to the upside." (that would be price AND direction.) go ahead...hide your real estate bubble from Government officials. sorry but i'll take a railroad stock over Manhattan real estate any day. not only do a i get a house on wheels...but a get a commodity kicker as well. i still like plain old arable land...but that's because should a "solar powered plane" become real then why do a need an airport anymore? let alone a highway system. what suddenly becomes VERY valuable is...simply put "ten acres that i own and that can double as a air-port." this technology is NOT fantasy but is real...and once it becomes available for say 20,000 bucks...sorry but it's game over for the "Big Oil/Big Government cabal" that's been ruling the Western World going on 70 years now. the irony that oil is fundamentally a worthless product should be lost on no one.

TruthInSunshine's picture

I'll take oil, and you can have LULU.

CrashisOptimistic's picture

How can any of these comments make sense when HFT is 80% of volume?

Computers don't care about any of this stuff.

Osmium's picture

I think I will bring this rally to a screeching halt by buying a few S&P calls on Monday.'s picture

Real Estate Update....I have a house with a sinkhole on it and 5 offers on it...within 3 hours of listing it.  Carry on....

espirit's picture

I live on the coast, and we don't have no stinking sink holes.

Real Estate Geek's picture

San Francisco's on the coast.  (For now.)

(An incredible 90-second video.)

Hohum's picture

But what will really crash this market?  What Bernanke is doing has NEVER been done before.  We know the 85 B isn't going to new loans; we know stocks are going up, up, and away and UST bond prices about level so far in 2013.

What will be the catalyst, traders?  I think it's when oil gets a wee bit too expensive.  What say you?

espirit's picture

Bee Bee's not monetizing the debt... personally.

My question is... What respected leader will eventually tell the truth?  Or is it really over?

cowdiddly's picture


jomama's picture

where have i heard this before...?

new game's picture

clueless i say. i sit hear and observe knowing that as the dollar is debased and the stock must go up based on the dollars purchasing power.

but i buy pm s, because i have played the market for almost thirty years and don't want to care a shit about what the fuck

all them stock fucks do and care.

some day i will wake up and my pm s will be worth more than inflation would have rewarded me and my hair will not be

silver gray and my face will not have deep worry lines...

belogical's picture

Boy, she cut off the minute he mentioned fraud

Dr. Engali's picture

That was the only thing that I took away from that video. It was all interesting , but the moment she did that I forgot the rest of the interview.