Marc Faber Warns "The Market Is Waking Up To How Clueless The Fed Is"

Tyler Durden's picture




 

"I think it's very likely that we're seeing, in the next 12 months, an '87-type of crash," warns a somewhat excited sounding Marc Faber, adding that he thinks "it will be worse."

 

The pain is just getting started as Faber notes that "the market is slowly waking up to the fact that the Federal Reserve is a clueless organization." Internet and Biotech sectors (growth stocks) are "highly vulnerable because they're in cuckoo land in terms of valuations," and fully expects the selling to spread as The Fed "have no idea what they're doing. And so the confidence level of investors is diminishing," and that means we will see a major decline.

 

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Thu, 04/10/2014 - 15:02 | 4644369 Pladizow
Pladizow's picture

And Boom goes the Faber!

Thu, 04/10/2014 - 15:03 | 4644374 SilverIsKing
SilverIsKing's picture

If the FED is the market, does it matter that the market is waking up to the fact that the FED is clueless?

Thu, 04/10/2014 - 15:04 | 4644384 Pladizow
Pladizow's picture

Is this a tree falls in the woods thing?

Thu, 04/10/2014 - 15:08 | 4644398 zaphod
zaphod's picture

As much as I agree with Marc, at this point he's like a stopped clocked being right twice a day and wrong every other time. Marc has been preaching doom for so long that of course at some point it will hit.

Thu, 04/10/2014 - 15:13 | 4644410 Say What Again
Say What Again's picture

1823.50 on the ES Baby!  That's the Maginot Line

Thu, 04/10/2014 - 15:18 | 4644454 BaBaBouy
BaBaBouy's picture

The Feddies Have It Under Control...

CRANK UP The HFT Bullshiters... That'll Solve It...

Thu, 04/10/2014 - 15:19 | 4644468 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Down days are caused by HFT's turning their machines off.  That's what makes them NOT market makers.  "Liquidity" is provided at their whim and your expense.

It was May 7th, 2010 and there was no bid...

Deja Vu coming soon!!!!!!!!!!!!!!!!!!!!!

Thu, 04/10/2014 - 15:22 | 4644504 asteroids
asteroids's picture

Just a steady grind down. No panic. No waterfall. The machines are just walking this market down. There are no humans involved here.

Thu, 04/10/2014 - 15:31 | 4644539 BaBaBouy
BaBaBouy's picture

HFT's Don't Turn The Tubes Off.
They CRANK-ON The Shorting Switch...

They Fuck You On The Ups, AND They Fuck You On The Downs.

 

Thu, 04/10/2014 - 15:38 | 4644569 Dixie Rect
Dixie Rect's picture

And they fuck you in the drive-thru

Thu, 04/10/2014 - 16:35 | 4644797 Supernova Born
Supernova Born's picture

"Earth revolves around the Sun" took a while to catch on too.

Thu, 04/10/2014 - 17:49 | 4645078 ReactionToClose...
ReactionToClosedMinds's picture

I glare at the NYFed and its prodigy ......... currently the "vice" chmn and all the other formers that 'effect' the dual mandate of the Federal Reserve "System" .....calling Senator (self-designated smartest person in the Senate)  Schumer ... any "advice"

Thu, 04/10/2014 - 21:42 | 4645915 SafelyGraze
SafelyGraze's picture

faber arrested for throwing shoe at fed

 

Thu, 04/10/2014 - 21:51 | 4645950 Citxmech
Citxmech's picture

Off-Topic Post:  BTC-E seems to have gone off-line.  Last quote I saw wsa $345.00 BTC/USD.

The BTC bulls are hating it right now. . . 

Thu, 04/10/2014 - 23:20 | 4646204 Supernova Born
Supernova Born's picture

Faber is like a doctor that advises a patient to quit smoking, lose weight and exercise. Patient ignores doctor for years until patient drops dead from a massive heart attack. 

Was the doctor right just once or all along?

Fri, 04/11/2014 - 00:02 | 4646305 Tall Tom
Tall Tom's picture

The patient does not know if the Doctor was right all along or wrong. Does it matter to the patient at that point?

Fri, 04/11/2014 - 04:59 | 4646593 old naughty
old naughty's picture

I am a patient. I quitted smoking; lost weights; and exercises twice a day...

I am living...Now what?

Take the red pill, so I can wake up to knowing the market (eh, the Fed) played us, damn?

Oh sh't, BTC hugging bear?

Fri, 04/11/2014 - 00:13 | 4646338 weburke
weburke's picture

oh, "the fed is clueless" ? a doctor? fed is clueless ? why read another of his sentences?

Fri, 04/11/2014 - 05:28 | 4646602 HardAssets
HardAssets's picture

FED 'dual mandate' ?

That must be -

- Steal from the public

- Lie to the public

Thu, 04/10/2014 - 15:12 | 4644420 NoDebt
NoDebt's picture

An 87-type crash is all?  Oh, shit, for a minute there I thought it was something serious.  If that's the worst that happens, I'll take it and be grateful.

Thu, 04/10/2014 - 22:12 | 4646001 aVileRat
aVileRat's picture

Dude, the 1987 crash led to a massive feedback loop that pulled the entire commod complex down for 3 years. Long enough for the USSR to blow up, and LTCM to go zero (which was roughly the Citadel of it's time). Go read Bookstabber's "a demon of our own design" tonight. The breakers were not designed for 2b quotes a second. If there is a serious limit down, it would be like a dns attack on every price quote. Facebook's IPO unfolding on every major index weight with prices being crossed at a whole bunch of prices, some a full 50 seconds behind other quotes; so where is the average price ? When they do put on the breakers, what's a real trade vs the other 1.9999b trade quotes ?Are they going to bust a whole day of quotes? what happens then when they restart the networks ?

You would need to shut the whole place down and basically "eject the warpcore", where you manually process all the orders on constrained volumes from only established and recognized dealers. HFT's would be banned on site for another 20 years (until a new AI loophole is found). Imagine the entire world trying to panic sell post bank-holiday, and then to process a book that normally would be 60% cancels or rebates, now you have to check every ticket the old way. What will that do to the bid/ask spread when Blackrock or Fidelity needs to GTFO out of 80% of the NASADQ biotechs ?

3 day settle now becomes 5 days since the algos can't be trusted. Now what will that do for retail confidence when their RRSP's & day trading books are frozen. What will that do for guys trying to cover margins ? At what point will the full on route finally break the Money Market funds who are still providing base liquidity to currency guys.

What will the largest bagholder funds of subprime & UST's suddenly do when we go limit down ?

I know you have /sarc, but for those who do not know. 87 is/was no joke and that panic was only saved by the limitations of how much the pits were still dependant on human ticket checks + computer horsepower.

Today ? You could play ping-pong with the VIX (and we all on ZH know it happens) in picoseconds before anyone knows wtf is going on. and that's with 70 ms latency. Imagine the gong show someone could do with XOM at 300 ms. or 500 ms.

Or maybe not. Yellen may just say fuckit and declare all oil companies are now tax free national security NOC's like CNPC and Sinopec and all US manufacturing on-shore is now a mega-free trade zone like Dailan, and the SPX hits 9,000.

Fri, 04/11/2014 - 01:23 | 4646441 trader1
trader1's picture

ltcm wasn't founded until 1994, and its failure was in 1998.  

how old are you?  

Thu, 04/10/2014 - 15:12 | 4644421 McMolotov
McMolotov's picture

He's predicted twenty-four of the last two market collapses.

Thu, 04/10/2014 - 15:26 | 4644525 Charles Nelson ...
Charles Nelson Reilly's picture

I like those odds...

Thu, 04/10/2014 - 17:20 | 4644964 GOSPLAN HERO
GOSPLAN HERO's picture

Faber called the market bottom in March 2009.

Fri, 04/11/2014 - 00:15 | 4646342 weburke
weburke's picture

he echoed others. period.

Fri, 04/11/2014 - 05:38 | 4646606 HardAssets
HardAssets's picture

People seem to get pissed off when they discover someone doesn't have a crystal ball.

No One has a crystal ball. Might as well stop looking for one who does.

 

That's why I've long dropped all newsletter subscriptions except for Jim Willie.  Kept his because I find his writing amusing & thought provoking. But I know he doesn't have a crystal ball, either.

Fri, 04/11/2014 - 00:52 | 4646403 HulkHogan
HulkHogan's picture

Me too. When the Fed said it would buy all the subprime bets and it wouldn't let anymore banks go under, that was the bottom. 

Thu, 04/10/2014 - 21:33 | 4645865 q99x2
q99x2's picture

I wonder why the NWO isn't telling everyone what they are doing to take over control of the world. Probably has something to do with people

Thu, 04/10/2014 - 17:19 | 4644960 malek
malek's picture

Hey yeah, it worked for 5 years right? That's proof it's never going to fail! /s

Thu, 04/10/2014 - 21:34 | 4645886 Redneck Hippy
Redneck Hippy's picture

I wonder if ZH is going to apologize to Dennis Gartman after giving him shit for his negative call on the market yesterday?  Faber, I guess, is at least consistent, but how long can you spin the same garbage year after year and still get media attention for it?

Thu, 04/10/2014 - 21:44 | 4645925 Keyser
Keyser's picture

The same way Dennis does it, you publish a subscription based newletter and sound like you know what you're talking about. Same as it always was. 

Thu, 04/10/2014 - 21:51 | 4645949 Hovel Downs
Hovel Downs's picture

Hate to say...he was also right about Gold.  

Fri, 04/11/2014 - 02:06 | 4646477 Drifter
Drifter's picture

Maybe that's because Faber is the clueless one, not realizing Fed is playing out a speific plan of looting the nation for its banker owners, a plan they could implement only after (causing) the '08 meltdown.

Thu, 04/10/2014 - 15:20 | 4644481 replaceme
replaceme's picture

Mind officially blown.

Thu, 04/10/2014 - 17:55 | 4645115 Remington IV
Remington IV's picture

I hope he's right

After 26 years of bad calls , he needs the apocalypse , as do my shorts

Thu, 04/10/2014 - 21:06 | 4645808 CrashisOptimistic
CrashisOptimistic's picture

Shorts will never be paid off in an Apocalypse.  The counter parties will have no money.

Buy farmland.

Thu, 04/10/2014 - 22:04 | 4645996 daveO
daveO's picture

That's why metals make so much sense. Some hard metal is better than nothing.

Thu, 04/10/2014 - 22:41 | 4646085 CrashisOptimistic
CrashisOptimistic's picture

How did you get from farmland to taxable metal?

You grow food and sell it from farmland.  If you sell metal to buy that food, the govt will take taxes out -- and if that metal is ever a threat to anything, those taxes will be 80%.

You're never ever ever ever going to be the god of your community because you bought some old coins.  Just get that through your head(s).  It will never happen.  It will never be allowed to happen.

Farmers always seem poor.  They escape notice.

Thu, 04/10/2014 - 22:55 | 4646152 tmosley
tmosley's picture

Farmland is a hundred quintillion times more taxable than metals.  Didn't you see Gone with the Wind?

Only a fool would buy something that he can't take out of the jurisdiction under these conditions.

Fri, 04/11/2014 - 00:40 | 4646382 Beam Me Up Scotty
Beam Me Up Scotty's picture

Agree tmosley. They can tax you right off of your farmland. Or better yet, you will farm the land and give them the food it produces. And if you are lucky they will let you keep enough so you don't go to bed hungry every night. Get to work slave and hoe that field!!

Thu, 04/10/2014 - 23:39 | 4646267 Bernanke'sDaddy
Bernanke'sDaddy's picture

It's called buying and selling on the black market.

Thu, 04/10/2014 - 23:34 | 4646253 mt paul
mt paul's picture

moose swamps

set out salt blocks..

Thu, 04/10/2014 - 19:14 | 4645474 Landrew
Landrew's picture

Great question! I follow that up with, if the market fractures does that also mean the Fed will fail? Can the Fed fail because it is the buyer of last resort? 

Thu, 04/10/2014 - 21:31 | 4645878 Papasmurf
Papasmurf's picture

It is impossible for the fed to fail because on one side of their balance sheet, they have a money printing press.  They only fail when the money they print isn't accepted.

Thu, 04/10/2014 - 21:45 | 4645930 Keyser
Keyser's picture

The end of the petrodollar may accelerate that process with or without a printing press. 

Thu, 04/10/2014 - 22:42 | 4646109 Landrew
Landrew's picture

Actually the Bureau of engraving and printing prints the buck at the request of the Treasury. I do know what you mean the Fed does request the notes to be printed. However, there is a limit to printing, does a crash of magnitude preclude extraordinary printing?

Fri, 04/11/2014 - 00:43 | 4646390 Beam Me Up Scotty
Beam Me Up Scotty's picture

They can create digital dollars on a seconds notice. Who needs a printing press? How many of your dollars are real and how many are digital?? Ya that's what I thought... Most of them are digital. Press the 0 key one time and you go from one trillion to 10 trillion.

Thu, 04/10/2014 - 23:03 | 4646176 Crash Overide
Crash Overide's picture

BREAKING NEWS: Zombie apocalypse canceled, not enough brains in America left to eat.

Fri, 04/11/2014 - 04:07 | 4646567 WSP
WSP's picture

The pain is just getting started as Faber notes that "the market is slowly waking up to the fact that the Federal Reserve is a clueless organization."

Replace "Clueless" with "Criminal" and you have your answer!

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