This page has been archived and commenting is disabled.

Marc Faber: "The System Is Very Vulnerable," Brace For A "General Asset Deflation"

Tyler Durden's picture




 

With global debts 30% higher than they were at the 2007 crisis peaks, enabled by the money printing of central banks, Marc Faber warns that the "asset inflation" of the last years is not reflective of the broad growth seen in the 70s. "The system is still very vulnerable," he warned as investors are exuberant over "hot new issues" just as they were in 2000 and fears "excessive speculation" means investors should brace for a "general asset deflation." Emerging markets are relatively cheap to the US and Europe, he notes, but it is too early; there is nothing to like about low treasury yields but they are good to offset risk. As the market soared recently, fewer and fewer stocks are making new highs and this internal weakness (lack of breadth) and the breakdown in so many 'loved' stocks says the drop is coming sooner rather than later...

 

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 05/22/2014 - 19:57 | 4786939 DirkDiggler11
DirkDiggler11's picture

Boom, Doom, and Dud Report.

Thu, 05/22/2014 - 20:06 | 4786954 Eisenhorn
Eisenhorn's picture

"System to collapse under weight of Faber's Doom Porn."

 

I guess if you put enough rounds down range you will eventually hit something....

Thu, 05/22/2014 - 20:17 | 4786975 ACP
ACP's picture

As much as I like the guy, yeah. Seems like every time he speaks, there's another short squeeze.

Thu, 05/22/2014 - 20:27 | 4786988 mvsjcl
mvsjcl's picture

I've been listening to this for five years now. What's another five years more. I'm patient. But it's cost me a lot so far., and I fear that the payback is merely whatever I can generate from within myself.

 

Who the fuck knows!

Thu, 05/22/2014 - 20:45 | 4787035 NoDebt
NoDebt's picture

Does this guy secretly work for Goldman Sachs?

Fri, 05/23/2014 - 07:43 | 4787884 pelican
pelican's picture

Who cares... lets all get loaded.

Thu, 05/22/2014 - 22:47 | 4787291 Greenskeeper_Carl
Greenskeeper_Carl's picture

my timeline is long. id take some more gold and silver price deflation with a big smile on my face

Thu, 05/22/2014 - 20:30 | 4786997 macholatte
macholatte's picture

 

Somebody please provide me with a link to a time when Faber said "buy stocks" anytime in the past 4 years, anytime since the bottom in 2009.

Maybe it's just me, but seems like he is always talking about the next crash.

What's Gartman doing?

Thu, 05/22/2014 - 21:10 | 4787084 CunnyFunt
CunnyFunt's picture

Faber has in the past few years consistently recommended certain asian stock issues.
He's entertaining and his analysis is good, but he underestimates the resources of tptb.

Thu, 05/22/2014 - 23:16 | 4787347 macholatte
macholatte's picture

 

 

Asian stocks ...... right

 

S&P 500          7/09                 880     

                     5/14                 1878

 

NASDAQ        7/09                 1756

                    5/14                 4131

 

DOW               7/09                 8146

                     5/14                 16,533

         

shoulda bought those Asian stocks.....

             

Thu, 05/22/2014 - 21:15 | 4787099 CrashisOptimistic
CrashisOptimistic's picture

No one in the past 4 yrs should be buying anything but farmland, so in that way, he's right.

Thu, 05/22/2014 - 23:41 | 4787392 Tarshatha
Tarshatha's picture

"No one in the past 4 yrs should be buying anything but farmland, so in that way, he's right."

And some silver to bury on that farmland. One, two combo!

Fri, 05/23/2014 - 01:56 | 4787558 Babalooee
Babalooee's picture

Well, let's see here. He said buy Total Oil at the low a few years ago, and Microsoft and Intel and Japan, that's right, he hit old Japan pretty much right on and Novagold, that was another. In fact, thinking about it here for a second, I've found it very benefical listening to that sing songy Swiss voice. 

Thu, 05/22/2014 - 20:17 | 4786976 Keyser
Keyser's picture

Hmm, what happens when you have both asset and currency devaluation, hyper-deflation? 

 

Fri, 05/23/2014 - 10:20 | 4788372 agNau
agNau's picture

Mor currency printing?

Fri, 05/23/2014 - 07:58 | 4787923 Pig Circus
Pig Circus's picture

Faber looks at reality so he is a Bear and the markets been a Bull so the commenters are taking him to task.

Meanwhile the Bulls have been claiming the Economy, Labor Markets, Capex, Corp Rev's and Earnings will increase.

None of that has been right but the market keeps grinding higher.

Who's the Hero and whose the Zero?

The prognosticator who would have stated it's all a fucking farce, the econ and labor market are and will remain in the shitter but the CB's will conterfit with reckless abandon so stay long is the hero. I just can find that person.

Thu, 05/22/2014 - 20:00 | 4786944 HaroldWang
HaroldWang's picture

Zzzzzzzzzzz......

Thu, 05/22/2014 - 20:02 | 4786947 Al Huxley
Al Huxley's picture

Bullshit Marc, the system is running better than ever - the economy might be fucked, but the system is fine.

Thu, 05/22/2014 - 20:03 | 4786948 intric8
intric8's picture

I think asshat deflation is more likely

Thu, 05/22/2014 - 20:32 | 4787004 Peter Pan
Peter Pan's picture

The whole deflation/inflation debate is badly constructed.

What is of greater importance is what the average man can buy with his cuurent pay packet in terms of housing, food, education and medical.

Thu, 05/22/2014 - 20:03 | 4786950 DirkDiggler11
DirkDiggler11's picture

Can't you just cut and paste the last 28 posts by Faber on ZH? I agree with his message, but I am fucking over hearing the same shit out of Faber and Rogers for about 5 years now. You know, timing does count for something in the markets ..... These two are like broken records.

Thu, 05/22/2014 - 20:15 | 4786961 intric8
intric8's picture

The dow has rallied over 10,000 points in 5 years

Edit: 6507.04 on march 9, 2009
16,543.08 at present

Thu, 05/22/2014 - 20:36 | 4787010 Peter Pan
Peter Pan's picture

If your whole perspective is affected by the DOW JONES then I can appreciate your frustration but if you are struggling to keep your home, job and sanity then I think you can relate a little more to Faber and Co.

There is a great gulf between timing and the final destination and some choose this difference to make money in the short run and others use this time to prepare for a wipeout.

Therefore it might be wise to split your portfolio into two, the FABER version and the HAPPY DAYS version.

Thu, 05/22/2014 - 22:31 | 4787254 intric8
intric8's picture

Precisely, the fed has gifted asset infation to the wealthy in this 'recovery' and given the shaft to everyone else. The middle class is being ransacked through monetary inflation. More significant class warfare is on the way. See how bad things get if they roll out austerity.

Fri, 05/23/2014 - 10:37 | 4788420 agNau
agNau's picture

The Russians/Chinese are taking the toys from the children now, and placing them in time out. Much kicking and screaming from the time out zone, as resolution on many fronts including austerity is coming. The checks written were never payable.

Thu, 05/22/2014 - 21:31 | 4787135 Savyindallas
Savyindallas's picture

Most of it is inflation. No real value. it's still due to crash. The dollar collapsing will assure it.

Thu, 05/22/2014 - 20:26 | 4786981 AGuy
AGuy's picture

What do you want? Marc or Jim to say the crash begins tomorrow? At this point it not possible to make such a prediction as we have not yet neared the tipping point. It appears to me your become frustrated because nothing has happened yet and your blaming Marc and Jim because it hasn't happened yet. Marc and Jim can't cause the Market to correct, they can only call as they see it.

At this point we are in a slow grind phase were debt grows, unemployment rises, food and energy prices rise. Nothing will change until we get close to the tipping point. 

Thu, 05/22/2014 - 22:00 | 4787195 Crawdaddy
Crawdaddy's picture

For starters this guy who claims balls can name names. He sits back and pontificates about things we can see for ourselves but he never EVER name the people pulling the strings. He is a minion of the globalists. He probably drew the short straw to fluff Kissinger before this year's Owl worshiping ceremony down in the grove.

Thu, 05/22/2014 - 20:05 | 4786952 buzzsaw99
buzzsaw99's picture

When I was a little boy
And the Devil would call my name
I'd say "now who do ...
Who do you think you're fooling?"
I'm a consecrated boy
Singer in a Sunday choir
My mama loves, she loves me
She gets down on her knees and hugs me
She loves me like a rock
She rocks me like the rock of ages...

[/Paul Simon]

Thu, 05/22/2014 - 21:21 | 4787116 Me.Grimlock
Me.Grimlock's picture

But my wife - she hits me. She hits me.

She hits me, hits me, hits me, hits me.

Thu, 05/22/2014 - 20:07 | 4786955 stormsailor
stormsailor's picture

yeah al,  it may one day end.  but it just keeps spinning,  everyday more outrageous than the day before, and i cannot claim to know when it will end any more than i know when jesus comes back to earth.

 

i have cut back my reading in the last few months,  i'm beginning to get nosebleeds from the illogical stress it places on my logic.

Thu, 05/22/2014 - 23:45 | 4787406 Tarshatha
Tarshatha's picture

"illogical stress it places on my logic"

That's beautiful, thanks!

Thu, 05/22/2014 - 20:07 | 4786956 RacerX
RacerX's picture

so how come he's not simulcasting from his home in Thailand? Bad reception?

Thu, 05/22/2014 - 20:16 | 4786972 falak pema
falak pema's picture

he has been marshall lawd by the lord of the flies. 

Thu, 05/22/2014 - 20:07 | 4786958 kito
kito's picture

oh please. enough already. faber just STFU!!!!

Thu, 05/22/2014 - 20:12 | 4786965 falak pema
falak pema's picture

ZH has been bracing since 2009... But the Oligarchy has been QE racing at the same time.

Question is will the braces break or will the race end first.

Its now just a question of time and maybe the novelty of the situation is that deciding when the race ends does not depend on the Fed but on those "dirty ex-reds!" 

Funny how being color blind can get you all full of hubris to the point of singing : the sun will never set on our way of life! 

Thu, 05/22/2014 - 21:33 | 4787140 Crawdaddy
Crawdaddy's picture

FWIW, I imagine the world view of a Joe Sixpack, honest hard working German, early 1930's, is bracing for what he sees coming. He can't understand why his neighbors are idiots for supporting the obviously megalomaniac, sadistic Nazis but he feels powerless to change anything. He finds few people want to hear his warnings that this isn't right. “Can't you see what they tell you is a lie?” He waits for someone to stand up and put an end to the madness but it never happens, at least in his soon-to-be-short lifetime.

It is going to have to be a lot worse in the US before it gets as bad as it was then. And since today most in the US measures govt “evilness” against what they were taught about the Nazis, anything short of concentration camps and ovens can be explained away by the shadow govt corps running the media. Eventually, even that won't work but by then the veil will have been ripped and the truth laid bare.

So how bout them Steelers?

Thu, 05/22/2014 - 20:20 | 4786977 Goldilocks
Goldilocks's picture

The way we were
http://www.youtube.com/watch?v=GNEcQS4tXgQ (3:32)

~//~

Stars On 45 - Stars On 45 (The Original Version)
http://www.youtube.com/watch?v=7skQvj-aBV8 (4:47)

Stars on 45 - 70's disco mix
http://www.youtube.com/watch?v=3gHvVBdby2s (7:14)

Stars On 45 - part.II 70's & 80's
http://www.youtube.com/watch?v=DRTvjFm3u0w (9:59)

Thu, 05/22/2014 - 20:38 | 4787011 onelight
onelight's picture

that cranks up the wayback machine...missed most of it, but this I remember and it seems appropriate now:

Dire Straits - Once Upon a Time in the West..

http://www.youtube.com/watch?v=tO7Tacda2WU

Thu, 05/22/2014 - 21:44 | 4787166 Crawdaddy
Crawdaddy's picture

Cool! That looks like the same set from Money for Nothing. Back when you could sing "that little faggot he's a millionaire" and not have it memory holed.

Thu, 05/22/2014 - 20:23 | 4786979 Bill of Rights
Bill of Rights's picture

In STAGFLATION, the driving engine is NOT demand, but rising costs.
What we face is governments are raising taxes and thus they are consuming a greater proportion of the economy. Raising the cost of government (taxes) REDUCES the disposable income and therefore we have rising costs, but declining growth because it is not a DEMAND led boom but COST driven inflation.

Keep SHOPPING!

Thu, 05/22/2014 - 20:25 | 4786980 Elliptico
Elliptico's picture

Faber has never been wrong before!  OMG!!!!!

Thu, 05/22/2014 - 20:27 | 4786986 TooBearish
TooBearish's picture

yeah Mark all good BTFATH and u can make double ur money!

Thu, 05/22/2014 - 20:31 | 4787001 ShrNfr
ShrNfr's picture

With all due respect, when was this guy right about as much as the time on his wristwatch. Yeah, listen to what he says, but for heaven's sake think for yourself.

Thu, 05/22/2014 - 20:44 | 4787031 naughtius maximus
naughtius maximus's picture

Why the bold parts? Its harder to read

Thu, 05/22/2014 - 21:40 | 4787155 homiegot
homiegot's picture

Bold for emphasis.

Thu, 05/22/2014 - 21:05 | 4787070 orangegeek
orangegeek's picture

No shit Marc.  Wealth is concentrated.  Consumers are broke.  Few are spending.  Inventories are bloated.  Consumer debt is excessive.

 

Prices will fall hard.

Thu, 05/22/2014 - 21:08 | 4787080 AdvancingTime
AdvancingTime's picture

Inflation, deflation, maybe stagflation, what is next? The modern economy that has evolved over the last several decades is loaded with interwoven contracts reeking of contagion. If faith drops in these intangible "promises" and money suddenly flows into tangible goods seeking a safe haven inflation will soar. Never before has mankind diverted such a large percentage of wealth into intangible products or goods.  I contend this is the primary reason that inflation has not raised its ugly head or become a major economic issue. Like many of those who study the economy I worry about the massive debt being accumulated by governments and the rate that central banks have expanded the money supply.

The timetable on which economic events unfold is often quite uneven and this supports the possibility of an inflation scenario. A key issue being one of timing. If the price of gas jumps to $8 a gallon overnight do you buy gas and not make your car payment or stop driving the twenty miles to work? Answer, it could be months before your car is repossessed so you buy gas. It is important to remember that debts can go unpaid and promises be left unfilled. Is this possible and if so where would that leave us? Chaos and major disruption would result from such a scenario. As we have seen from the economic crisis of 2008 and following many other unsettling developments legal actions can continue to drag on for years.  More in the article below.

http://brucewilds.blogspot.com/2014/04/inflation-seed-of-economic-chaos....

Thu, 05/22/2014 - 21:11 | 4787089 UTICA CLUB XX PURE
UTICA CLUB XX PURE's picture

Faber, Eric Sprott on & on. Broken record yes but the day is coming. Everyone knows that. Stackers will get whats coming to them bitches... Watch & see...

Thu, 05/22/2014 - 21:12 | 4787091 devo
devo's picture

A broken clock is right twice a day

Thu, 05/22/2014 - 21:18 | 4787108 CrashisOptimistic
CrashisOptimistic's picture

If he adds just one net sub per month, life in Thailand is pretty good.  Look around online for rents in Chiang Mai.

Thu, 05/22/2014 - 21:21 | 4787111 Dr. Engali
Dr. Engali's picture

I remember when Faber was a Zero Hedge favorite and everybody felt the same way he did. Now he is treated like a pariah which leads me to believe that we are closer to the next big event than we think.

Thu, 05/22/2014 - 22:05 | 4787200 Frilton Miedman
Frilton Miedman's picture

Good observation - I tentatively watch AAII & NAAIM sentiment on occasion when I need a tie-breaker, but when ZH starts posting blogs about peak oil and the end of days, it's also been a bull/bear indicator taking consensus in the comments.

 

 

Thu, 05/22/2014 - 21:23 | 4787117 Wahooo
Wahooo's picture

Faber must be majority shareholder in ABC Media, Inc.

Thu, 05/22/2014 - 21:42 | 4787159 52821740
52821740's picture

Just because it hasn't happened yet doesn't mean that Faber's wrong. Its that old addage - 'The market can remain irrational longer than you can remain solvent'

Thu, 05/22/2014 - 22:20 | 4787214 Frilton Miedman
Frilton Miedman's picture

I can promise there WILL be a 40% market crash, problem is that may not happen for another 60% gain.

A broken clock, twice a day.

I like Marc Farber, his logic is valid, but I think he assumes too much in the way that policies won't change, negates the effects of positive surprises, Fed / fiscal policy, etc.

Something as simple as an increase in minimum wages, or subtle changes in foreign trade policy, could have a dramatic effect on velocity and the multiplier, completely altering the assumed course.

 

 

 

Fri, 05/23/2014 - 03:40 | 4787630 chirobliss
chirobliss's picture

Exactly! I knew Marc Faber in Hong Kong in 1989 and he was saying the same thing then, so same-old, same-old now for two and a half decades. Trouble is he says, you must do this you must do that, it will all end unless this is done, meanwhile, he just gets richer and richer by doing exactly the opposite of what he recommends.

He is fully invested in everything he can get his hands on and has been that way for the past 30 years and made more and more money.

If he took his own advice he'd be selling massages on the beach in Phuket, instead of ordering them at the Grand Sukhumvit.

Thu, 05/22/2014 - 21:43 | 4787161 UTICA CLUB XX PURE
UTICA CLUB XX PURE's picture

Thank you Dr...

 

Thu, 05/22/2014 - 23:00 | 4787315 royal
royal's picture

Not only is Marc Faber a financial genius, but he wears the best fucking ties I've ever seen.

Thu, 05/22/2014 - 23:08 | 4787330 robertocarlos
robertocarlos's picture

When your house drops in value by half that is deflation. When your hamburger goes up in price by 10% that is inflation. I guess inflation is winning because you can't eat your house. Besides that, the bank still wants all their money and your landlord ain't dropping the rent.

Fri, 05/23/2014 - 01:00 | 4787512 Julian
Julian's picture

I don't know who wrote this on ZH but at the time I copied it because it reminds me to be patient..

""The coming fin de siècle has the distinction of being the most eminently foreseen secular reversal in history; so foreseen in fact that many have been waiting for years for it with baited breath. However, that does not mean that the details of its unfolding will be known to us with any greater clarity than if it had emerged, kraken-wise, unheralded out of the depths. What itdoes mean is that those responsible for staying the present course will be all the more reviled by posterity, and will in good time meet with a retribution so horrible that one could say hell itself arose to take them. It's not merely that they missed the warning signs, or even that they failed to heed the warning signs; no, the signs were proclaimed with a great voice and they silenced it; stoned the prophets who were sent to them; smothered, smited, and shackled any protest of dissent. They rushed headlong to their own graves and tried to drag us all with them. There is no excuse for what these men have done and no pity shall find them""......

Fri, 05/23/2014 - 04:15 | 4787660 The Chief
The Chief's picture

Me likey

Fri, 05/23/2014 - 05:31 | 4787705 Gold Eyed Cat
Gold Eyed Cat's picture

GooseShtepping Moron posted it back in March.   It's a good one.

Fri, 05/23/2014 - 06:11 | 4787732 q99x2
q99x2's picture

Does a Yellen shit in the woods. The FED's software controls the values of stock indexes. BTFD

Fri, 05/23/2014 - 09:09 | 4788135 Toolshed
Toolshed's picture

I, like many, are rather surprised that this charade has continued for as long as it has. I expected a reset well before now. One reason I felt that way was due to the fact that I expected the retirees to express their great displeasure over zirp quite loudly in the media, and more importantly, in the voting booth. They are the main demographic group that actually votes. What the hell happened to these people? Have they all been medicated into a comatose state or what? They are being crucified, yet remain silent. In light of this curious development, what hope is left?

Fri, 05/23/2014 - 09:24 | 4788186 esum
esum's picture

Benchmark the economy to WELFARE INCOME level.... that is what the LIBTARDS desire... equality.... Now tell me what the DOW will be.. that is where the Libtards are taking us. As for the dolla, well just look at iran russia and china trading in local currency and gold... what % of world trade is that or will it be and what impact on dolla demand. Now add in a muslim commie in the white house or just a commie if hitlary gets in and wait til obumblercare kicks in and SERIOUSLY do you think the economy will GROW.... GET SERIOUS. OK now for the coup de grace.... Putin turns off the EU gas supply..... fuck yeah... they will be burning fetuses for heat and eating dead bodies... In the ussa there will be 556 bodies hung from lamp posts lit afire providing heat and light in DC... A good start. Smoke and mirrors only works for so long.. Cheerleading the economy and optimism, priming the pump with the fed perverted into tbtf speculation profit fest only lasts so long. the $$$ never reached the mid class and consumers are 70% of the economy whcih will revert to 1967 levels... So what will houses and stocks be worth... look to '67... (adjusted for hyper inflation).... 

Do NOT follow this link or you will be banned from the site!