Faber On Europe's Dilemma And China's Hard Landing

Tyler Durden's picture

Marc Faber brought his typical sense of reality and truthfulness to CNBC's Squawk Box this morning and in doing so managed to stop Jeremy Siegel saying long-term-buy-and-hold for more than 7 minutes. Siegel represented the 'new-hopers' with his insight that if the ECB would just guarantee all euro-wide deposits then all would be well in the world. Faber comes over-the-top in his gentle European accent reminding the academic that "it is hard to guarantee something you have no control over". Faber then proceeds to state his view that Europe is in a deepening recession and more importantly that China is growing at a far lower pace than official statistics would infer. Reminding viewers that about 40% of US corporate profits are from outside the US and the 'vicious spiral chain reaction' from slowing demand in China for industrial commodities has lagged effects on producing countries and then aggregate demand globally, Faber fears broad-based risk sell-offs but remains notably less sanguine on US Treasuries.


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fightthepower's picture

Fuck you Bernanke!

idea_hamster's picture

"It's hard to guarantee something that you have no control over."

Disagree: Insurance companies guarantee against weather all the time -- they have no control over that.

But it IS hard to guarantee something that you don't have the ability to cover -- that's why no private insurance company writes flood insurance. The actuarial data show that the damage numbers are too big, too often.

This is the same thing as the net/gross notional point in the CDS market that TD has been so on top of.

chiswickcat's picture

Insurance co's know the odds of having to pay out, to the penny! 

Dr. Engali's picture

Insurance companies know how much more they need to charge one group of people to cover any payouts to another group of people.

SilverIsKing's picture

Insurance companies measure risk based on historical data.  When history doesn't repeat, they are wrong and claims may cost more than what they had projected, hence losses.

In the event of a disaster, i.e. major earthquake in NYC, where buildings are toppled, the insurance companies wouldn't have the resources available to cover the losses.

So, when everything is going according to plan, insuring things one has no control over is possible.  When events don't follow the script...

fourchan's picture

i like how faber basically called china's offical gdp numbers bullshit. lol

Element's picture

So ... if you insure your house ... it'll never blow down?


That's the point he's making, the guarantee doesn't alter the fact of collapse occurring anyway.

The guarantee has zero to do with the collapse process, its cause and dynamics, it just means you put innocent third-parties on the hook for the damage.

Doncha love freedum and demockracy?

Actually .... No.

People just like to wave low-cred 'guarantees' around as though they can solve the fact that the debts can never be repaid ... no, not by taxpayers either.

The end.

q99x2's picture

Both videos "removed by user"

the tower's picture

Pulled because it was illegally posted. Here's the official link:



blindman's picture

the links don't work as you say and
there is malicious software associated
with the link, so you know.

slewie the pi-rat's picture

who runs sac's lil playpen of moronic add-ons, spying, junking, and avatar- and user-creation and backdating when he's not pretending he knows everything and is a good guy, too @ zH?

bilary?  bibi?  bambi?

Mr Lennon Hendrix's picture

Stocks are better than bonds; stocks will fall; Japanese stocks are a good play; blah blah blah.

- Marc Faber over the last year

Spitzer's picture

We all know what he really thinks but then he would never get on the air. He would just say go 90% gold and fuck it.


Matt's picture

I hear Sony is selling at a major discount right now. 

lemonobrien's picture

i lived in Japan, look at the stock prices back in 91, 92... etc. and compare to now. As for Sony, I worked there; company is full of retards. The South Koreans make the same shit at a better price point; and you have other major Japanese companies like Toshiba, Sharp, Matsushita, Pinoneer... etc.

slewie the pi-rat's picture

i don't believe faber ever has or ever will face a camera and be unwilling to say or do something totally asinine, even with his undies still on

no, the whartonProf doesn't have control over what is 2B guaranteed, but the cBanksters and pols think they do, marc;  b/c they do?  or could?  isn't that what canada is calling the bGees to discuss? 

but marc is somewhat correct despite the cheap shot, but as hendrix_lemon sez, pretending the short-term trend is the long-term trend is just bullshit, even if tyler does eat the corn outa faber's shit

but we all know more than we write or say and slewie thinks something is being unspoken here, and if i can see it, maybe lennon_H can?  

and tyler? 

>>>paying the debt back with cheaper corn, oil, OJ, coffee and cotton, wool, and synthetics which are now cheaper mean we are trying to dig out with a more valuable (as opposed to de-valued) dollar which is a smaller shovel for $-denominated debt, but a bigger shovel for the EU as the fungibility ratios change significantly here, as daCrisisDezBoyz deepens and the chairsatan's tradingPost is starting to look like he is getting some decent pelts, here

of course we'll own them when it's over, but we'll be in so deep, ourselves, that china will hafta devalue 40% just to stay in the game!

rocky!  R0CKY!   R0CKY!!!  [until the trend4hypno-conditioned traderZ based upon falsified data streams and oceans of garbage changes to risk0n again, of course...]

TBT or not TBT's picture

Man, fightthepower is fast.    Maybe the harbinger of an Occupy ZH movement.

midgetrannyporn's picture

How Much Gold Do Investors Need? Zero Should Suffice
The Wall Street Journal

Zero Debt's picture

In other news: MarketWatch top headline for now:


More trouble than it's worth?
Making a case against gold
Gold, Jack Hough argues in the wake of the precious metal's 6% May slide, continues to defy all efforts to calculate its worth — or even to describe how it behaves as an investment. Your portfolio doesn't need it


Dr. Engali's picture

Let them keep selling that story and I'll laugh all the way to the bank..so to speak..... I really wouldn't go to a bank since I hate them fuckers...more like I'll laugh all the way to the gun shop.

jimmyjames's picture

Investors sometimes use the cost of producing the world’s next ounce of gold as an approximate floor for its price. That cost is between $1,200 and $1,400 now,


Pure bullshit--try at tops $500/oz-


Some investors say gold is a hedge against inflation. That is true of any good or service that consumers can be counted on to want in coming years, such as oil or poultry farms. Gold’s wild swings have made it a poor proxy for the consumer-price index, a key inflation measure.

Perhaps that is because only 12% of gold’s demand comes from industrial applications, according to the World Gold Council, a trade group. The rest comes from jewelry and investment (and the divide between those two isn’t always clear).


Assbackwards--gold is not an inflation hedge and never has been-

Golds industrial and jewelry component is so small it's not even worth mentioning and we know there has been next to no consumer demand-but-

"Something" has been driving the price higher for the last 11 years-

Think smart money-

disabledvet's picture

Yeah, okay. "who wanted to own gold in the seventies" right? Anywho it is protection against outright default by governments. That doesn't mean the price is right however. Anyone who says or implies "prices only move in one direction" should be ignored.

jimmyjames's picture
Yeah, okay. "who wanted to own gold in the seventies" right? *************** Everyone wanted to hold gold in the seventies-not so today- http://bit.ly/xPhPSI And then what happened? Inflation happened (credit expansion)(monetary) (not prices) interest rates hit 20% and gold crashed and fell for the next 20 years and then broke the downtrend and has been rising for 11 years-- So i suppose you could say "prices" don't only move in one direction-but- You most certainly cannot deny-they can move in one direction for a hell of a long time--no? http://bit.ly/JQHO7d
Its_the_economy_stupid's picture

No tax holiday for repatraition of corporate profit. You want tax-free profit, buy foreign assets....and good luck.

DoChenRollingBearing's picture

+ 1

Over the past few years, there are only two assets that have gone up in the Bearing household:

1)  Our Peruvian bearing import company

2)  Our gold

EVERYTHING else is about breakeven or down.

Conman's picture

Ddint i see a headline earlier that had Faber sayign to buy stocks and sell bonds?

zorba THE GREEK's picture

When Siegel began speaking and said: "and I think, honestly.....", It seems to imply he does some

dishonest thinking too.

razorthin's picture

If these hopium fukkers would just listen to the best "gloom and doomers" (i.e., Faber, Rogers) they would make a sh!tload of money for themselves and their sheeple.  The so called doomers have consistently called the liquidity bullsh!t ramps as well.

DoChenRollingBearing's picture

Europe down hard NOW.  China probably due for a hard landing soon.  LIES everywhere here in the USA.

Oh, but we're all doomers here, at the "jumped the shark" website that is ZH...

LOL!  Except it really isn't funny what they are doing to us...

FieldingMellish's picture

Treasuries. You mean those things that can be printed at will and yield next to nothing of things that can be printed at will?

Omen IV's picture

why isnt J&J  - with all the potential for decline in medicare/ medicaid/obamcare / union benefits and decline in national income everywhere in europe and usa  not going to have decline in revenue, margins and therefore forward P/E is potentially very high and dividends may not be sustainable ?

Conman's picture

Think there was a sucessful cancer drug trail reported over the weekend.

NotApplicable's picture

I bet they'd all cause cancer in large enough doses.

francis_sawyer's picture

What? You mean to tell me they finally started doing some bong hits & stumbled on the cure?

NotApplicable's picture

J&J might feel the pinch in places, but overall, they are part of the primary mechanism that will transfer the last bit of wealth from aging Boomers to Fedgov Cronies Inc.

vote_libertarian_party's picture

Siegel sounds really stressed out.

azzhatter's picture

Everyone is getting stressed out. This thing is lasting longer than would have thought. Siegel and the bulltards keep thinking tomorrow will bring sunshine and everyday more bad news. The bears keep thinking the crash is tomorrow and we survive another day, slow motion death by a thousand cuts

NotApplicable's picture

This would be the classic "muddle-through" scenario that was tossed about in 2008.

q99x2's picture

Short Elmer Fudd

dwdollar's picture

Wasn't Jeremy Siegel thoroughly discredited over a decade ago? The fact that man still has a job is testament to the college bubble.