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Marc Faber Previews Q2, Is Long Japan, Cautious The US And Gold, And Sees A 5-10% Increase In Inflation

Tyler Durden's picture




 

Mark Faber was on Bloomberg TV earlier, presenting his latest outlook on markets and the economy, but first he summarizes 2011's first quarter which as repeatedly observed here before has so far been a mirror image of 2012, with the only different that while it ran up on 2010's QE2 back then, now it has surged on the transitory flow (not stock) impact of two back to back $1.3 trillion LTROs. "I think that if you look back at a year ago we made a peak of 1370 on S&P on May 4 and then dropped sharply to 1074 on October 4. Then we recaptured the lows in November and December. Since then, the first quarter has been very powerful and has surprised investors because of its strong performance. And I think now the expectations are very high. The market is no longer oversold the way it was in December. And everybody thinks that the race is on, go along with equities, the hedge funds have positioned themselves on the long side and optimism is high. I would be very careful at this stage." As for his outlook, he is "reluctant to short" in a money-printing environment, believes that Japan will provide the best equity futures returns (more easing from the BOJ appears imminent), is confident margins will roll over (as they already have) on the back of record for this time of year input costs, and thus thinks earnings will disappoint, sees inflation running 5-10% more than a year earlier, and is still accumulating gold every month. Overall, mostly as expected from the pony-tailed one.

Full interview:

And key selections:

Faber on whether he's finding more shorts in the equity market:

"In a money-printing environment I'm reluctant to short. But say whereas I recommended investors to increase their positions last October, November, December, now I think that if people are overweight in equities they should reduce positions somewhat…maybe cash. The U.S. dollar is desirable at the present time. And we have to say one thing. The market consists of thousands of stocks and the market consists of many different stock markets globally. The S&P has done exceptionally well relative to, say, emerging economy stock markets, most of which are still lower than they were in 2011. So, if you look at the advance-decline line of all the share markets in the world, then it is definitely being deteriorating. And I happen to believe that money printing will continue and I would probably buy financial shares and I believe that the Japanese market may outperform all the other markets against all expectations in 2012."

On saying that earnings will deteriorate and profit margins will shrink:

"First, I think there are some cost pressures creeping in terms of rising raw material costs, especially energy, and the problem with, say, a QE3 would be that you are doing it in an environment of very elevated oil prices. So, maybe the energy prices would go up more and squeeze the margins of some corporations. And certainly squeeze the consumer. And my sense is that the economy has bottomed out but is far from robust because the typical household is being squeezed by higher cost of living increases. There are various measurements. You can measure the CPI. It is rising by less than 3%. Everywhere I look I see households essentially paying between 5% to 10% more for goods and services than a year ago."

On whether Q2 will be as strong as Q1 for investors:

"I think that if you look back at a year ago we made a peak of 1370 on S&P on May 4 and then dropped sharply to 1074 on October 4. Then we recaptured the lows in November and December. Since then, the first quarter has been very powerful and has surprised investors because of its strong performance. And I think now the expectations are very high. The market is no longer oversold the way it was in December. And everybody thinks that the race is on, go along with equities, the hedge funds have positioned themselves on the long side and optimism is high. I would be very careful at this stage."

On why investors should have caution:

"Basically I think that earnings may begin to disappoint. That corporate profit margins could deteriorate. And I think we still have a lot of issues. Don't forget we have QE1, QE2 and Operation Twist. I think in order to really hold asset prices across the board much more QE3 would have to be gigantic. I'm not ruling out that stocks can continue to go up but I doubt they will go up at the same rate as the first quarter. And if you look at the technical under underpinnings of the market, they have deteriorated. The list of new highs is deteriorating. The short positions are way down. And we have an overbought condition in the market if we measure the number of stocks above the 50-day and 200-day moving average. So, generally I would say maybe April is traditionally still a month of seasonable strength but somewhere in the next six months I think you can buy the whole market much cheaper."

On QE3 having to be "enormous":

"It would have to be very significant to boost all asset prices including homes, stocks, bonds and commodities…Much larger [than QE1 and QE2]."

On gold:

"As you know, I have been very positive about gold and I still accumulate gold every month. But I think that we had an intermediate peak at $1921 on September 6 of last year. Then we dropped sharply to $1,522 an ounce on December 29, 2011. Since then we've had a feeble recovery. I think that the correction period is not yet over. I'm not selling my gold because I don't trust governments and I don't trust the Federal Reserve, nor would I trust the ECB or other money traders in the world. They are all going to print money. I still recommend to hold gold."

On bad returns for gold in Q1:

"Yes, that's correct. But the returns have been very good since 1999 and year over year I think gold is still up 12%…I think that gold is in a correction period and we had an intermediate peak on September 6, 2011. And I always advise don't put all your money into gold because it doesn't have any cash flow. So you are really dependent on the price appreciation. That is different from owning, say, equities that have a dividend yield of 5%, which I can find in Asia."

 

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Mon, 04/02/2012 - 14:21 | 2310191 CPL
CPL's picture

What part of Japan is he long?

 

The cancer treatment centers?

Mon, 04/02/2012 - 14:23 | 2310197 Oh regional Indian
Oh regional Indian's picture

Seriously CPL. Anyone wanting to carry so much currency risk? And Japan? The yen need to Strengthen Massively and Weaken massively to save Japan.

End of story.

ori

/the-curse-of-free-energy/

Mon, 04/02/2012 - 14:36 | 2310255 theXman
theXman's picture

What a stupid comment by the host that gold investment has been losing in Q1! Is that how far her eyesight is, one quarter? Was she even aware that gold investment had been winning since 1 year, 3 years, 5 years, and a decade ago?

Mon, 04/02/2012 - 14:37 | 2310260 WestVillageIdiot
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From what I can tell an ounce of gold on January 1st is still an ounce of gold on April 2nd. 

Mon, 04/02/2012 - 14:45 | 2310291 The Big Ching-aso
The Big Ching-aso's picture

 

 

As a graduate of Faber College, going thru life in Thailand fat, drunk and stupid has its pluses.

Mon, 04/02/2012 - 15:32 | 2310392 tdogg
tdogg's picture

why is it every time i hear Faber i want to drink scotch & chase tail.

Mon, 04/02/2012 - 14:39 | 2310266 Spitzer
Spitzer's picture

ah haha, good point.

seriously.

The dollar has the same issue tho. The Euro is actually the only one in a livable spot

Mon, 04/02/2012 - 14:43 | 2310281 WestVillageIdiot
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All of them have black spots on the x-ray. 

Mon, 04/02/2012 - 14:27 | 2310212 CvlDobd
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FRCOY is expanding into the US. Good,cheap, functional clothing.

Mon, 04/02/2012 - 14:34 | 2310214 Pladizow
Pladizow's picture

To: CPL

Gaishas?

Mon, 04/02/2012 - 14:36 | 2310251 Rubbish
Rubbish's picture

I call my slave owner: Cocksucker

Slaveowner says: That's why I trust you !

Mon, 04/02/2012 - 16:14 | 2310576 The Big Ching-aso
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"What part of Japan is he long?"

 I think with Faber he's most definitely long on Geishas.

Mon, 04/02/2012 - 16:38 | 2310674 Jack Sheet
Jack Sheet's picture

How about this bastion of Japanese corporate governance?

http://www.nytimes.com/2012/02/17/business/global/7-arrested-in-olympus-...

and this was only one case that was conicidentally exposed - wouldn't touch Japanese equities with a bargepole

Mon, 04/02/2012 - 14:24 | 2310195 PontifexMaximus
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No news are good news!

Mon, 04/02/2012 - 14:27 | 2310199 Bansters-in-my-...
Bansters-in-my- feces's picture

So he recommends to hold gold,but not to buy gold.

He says he buys every month,so why would he not recommend to buy to others?

Ad what fuck with the gold is in a correction thing?

He means a Federal Reserve and Primary dealer correction....right?

Mon, 04/02/2012 - 14:42 | 2310275 LowProfile
LowProfile's picture

 

On gold:

"As you know, I have been very positive about gold and I still accumulate gold every month. But I think that we had an intermediate peak at $1921 on September 6 of last year. Then we dropped sharply to $1,522 an ounce on December 29, 2011. Since then we've had a feeble recovery. I think that the correction period is not yet over. I'm not selling my gold because I don't trust governments and I don't trust the Federal Reserve, nor would I trust the ECB or other money traders in the world. They are all going to print money. I still recommend to hold gold."

On bad returns for gold in Q1:

"Yes, that's correct. But the returns have been very good since 1999 and year over year I think gold is still up 12%…I think that gold is in a correction period and we had an intermediate peak on September 6, 2011. And I always advise don't put all your money into gold because it doesn't have any cash flow. So you are really dependent on the price appreciation. That is different from owning, say, equities that have a dividend yield of 5%, which I can find in Asia."

 

Read much?

Mon, 04/02/2012 - 14:24 | 2310200 riphowardkatz
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And thinks real estate in non-financial centers of southern states looks attractive and undervalued. I concur. 

Mon, 04/02/2012 - 14:28 | 2310220 SheepDog-One
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Better go buy some undervalued rural Mississippi real estate then, yea see how that works out for you. 

Mon, 04/02/2012 - 14:35 | 2310236 riphowardkatz
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Probably not a bad idea but I prefer the southwest. I like the drier climates.

If you don't agree you should for sure liquidate any real estate investments and hold on to that fiat  with both fists waiting for the day when houses are half the price (that will never happen but keep hoping, and then eventually you will be paying rent which would equate to 3 mortgage payments taken out today)

 

 

Mon, 04/02/2012 - 14:42 | 2310276 Deep79
Deep79's picture

You really think it's a good inevstmnet? Unless you thik it's gonna start going up 5-10% from here, bad idea my freind. 

I think real estate is done, ya we might have hit a bottom, but i doubt that, i still think there is more to come, but i see real etstate prices flatlining

So go ahead, pay the property taxes and upkeep

 

 

Mon, 04/02/2012 - 14:45 | 2310290 WestVillageIdiot
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God ain't making any more god-forsaken desert wasteland. 

Mon, 04/02/2012 - 14:52 | 2310314 riphowardkatz
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When I look over this desert wasteland I see literally thousands of tourists coming here. I see tons of beautiful landscapes with lots of trees, I see sales tax revenues going up. I see record attendance at sporting events, I see huge influx of people from cold climates that have tons of money (Cananda)

The future looks bright and warm. 

Mon, 04/02/2012 - 14:56 | 2310325 WestVillageIdiot
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The H20 situation in the southwest would scare me away.  I'm funny that way.  I want to know that there will actually be water running to a house that I own. 

Mon, 04/02/2012 - 16:40 | 2310679 riphowardkatz
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The interesting part is I have lived in Oregon where there would seem to be unlimited amounts of water and I would be much more fearful of running out of water to my home there than in the Arizona. The constraint to good water is not water it is the ability to process water. 

Mon, 04/02/2012 - 19:02 | 2311192 Vlad Tepid
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Read Cadillac-Desert and get back to us.

You will not be singing the same tune.

Mon, 04/02/2012 - 14:57 | 2310330 UP Forester
UP Forester's picture

Good thing you don't see an influx of people from the south that have the shirt on their backs, no money, and a limited grasp of English.

You have lots of water and can live without power, too, eh?

Mon, 04/02/2012 - 16:37 | 2310672 riphowardkatz
riphowardkatz's picture

Most of the illegals are now moving to California where they are welcomed with open arms. 

In addition immigrants have always been a vital part of any healthy economy. The legal immigrants that choose Arizona are welcomed with open arms and are  an important part of every aspect of the growth and development this area has experienced. 

There is a lots of water in most parts of Arizona. In fact so much that Arizona  sells it to California and Nevada.  Though some forsee a water shortage there is still tons of ability for resuse, cutting back  and water banking (storing water in underground aquifers) Phoenix is already a leader in water conservation and is using less water now than they did 10 years ago. The resuse infrastucture is much more developed and people are moving away from lawns to xeriscaping. 

Power is very abundant (coal, natural gas and solar) and there are miles and miles of area for solar farms to develop so from what I can see power isn't really an issue.

 

Mon, 04/02/2012 - 17:18 | 2310826 Blankenstein
Blankenstein's picture

"There is a lots of water in most parts of Arizona."

Where is all this water you speak of in this desert climate?

Mon, 04/02/2012 - 19:58 | 2311301 riphowardkatz
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in the mountains in snow pack, in under ground aquifers and in trucks/trains shipping bottled water here.

Mon, 04/02/2012 - 19:34 | 2311259 AustriAnnie
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Arizona obtains water by depleting aquifers.  This is a problem in other regions as well.  Chris Martenson had an interview in Nov or Dec on this topic, I was blown away by some of the data presented.  (podcast available on itunes for free or on youtube here: http://www.youtube.com/watch?v=E0qSr8TExmc)

I think we will see government overseeing the use of water more so in the future (as they have regulated oil).

Mon, 04/02/2012 - 19:40 | 2311269 AustriAnnie
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Another problem, water is used in energy production, even solar.

Solar projects in the southwest are running into water troubles:

http://www.nytimes.com/2009/09/30/business/energy-environment/30water.ht...

Mon, 04/02/2012 - 14:49 | 2310303 riphowardkatz
riphowardkatz's picture

There are no good investments in this world. That is a fact. There are only speculations from here on out (or until the ultimate reset crash)

Yes I think GOOD real estate is a very good speculation. It is  a short of the dollar. There are  are only so many good real estate locations and 2-8x the number of dollars. 

Even with huge inflation that money filters out into the economy. Some people will be getting paid more in nominal terms.

Rents are equalling 30 year motgages in lots of places.

Housing is becoming cheap in gold terms.

Taxes may be going up and real estate offers a shelter.

People are looking for income and will think (right or wrong) that real estate is the place to find some. 

Mon, 04/02/2012 - 15:01 | 2310336 WestVillageIdiot
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Real estate can come with big rewards but it comes with huge risks.  A real estate investment must be fed every month.  It pauses for no man's cashflow problems.  It is high-maintenance and you need to be on top of it constantly. 

That just isn't for me.  Good luck to you.  You may be on to something but as Don Corleone said, "your business is a little too dangerous", especially when society no longer feels they need to pay their obligations. 

Mon, 04/02/2012 - 15:49 | 2310463 AustriAnnie
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Additional risk of real estate comes from the fact that you have no option to leave a location if it goes to hell around you.  It only takes a few weeks for any kind of civil unrest to destroy entire cities.  (See pics of Spain/Greece and the trash/vandalism/crime that is visible after only 7 days of protest).  Even without severe unrest, groups of people are renting houses via Section 8 or HUD, and formerly nice neighborhoods are becoming slums.  Its happening already. 

You can buy the house, but you can't control who moves in next door.  The value of your investment is exposed to a lot of risk this way.

If you own a home you better be willing to walk away from it in the future if necessary. 

 

Mon, 04/02/2012 - 16:02 | 2310520 AustriAnnie
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"Taxes may be going up and real estate offers a shelter"

False.  Property owners are completely vulnerable to changes in property taxes (one of the first taxes that will be raised, most likely).  Increased cost of utilities (water, sewer, etc) are likely coming as well, and property owners take that hit directly.  

Tax laws change quickly.  Right now there are exemptions for energy-saving renovations, etc.  But when energy upgrades become mandatory, that isn't much different than a direct tax. Other tax exemptions may be eliminated.  The recent trend is to punish those who save and pay off their own mortgage, and to subsidize those who don't.  Tax law is a favorite way to twist favor to one party in expense to another.

 

Mon, 04/02/2012 - 16:37 | 2310670 metaforge
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Renters are just as vulnerable when their landlords raise the rent to compensate for said taxes.  Ya gotta live somewhere...

Mon, 04/02/2012 - 18:56 | 2311166 AustriAnnie
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Yet, renters have the flexibility to move, change plans, because they are locked into a 1 yr contract not a 30 year contract.  (Plus, when you rent its pretty easy to hide income from taxation.  Many work for cash and pay rent in cash, one of the most popular forms of tax evasion)

Regulations which make it harder for landlords to pass costs onto renters and/or rent control are likely to occur.  This is often done at the state level, and renters have the option to move across state lines.

All I'm saying is, someone shouldn't rent without having a good plan for when rents go up.  And someone shouldn't buy without a good plan for when property taxes go up and/or regulations increase the burden of property ownership.  In a country where wealth is quickly being redistributed, I'm not sure I want wealth that is too visible and which I cannot hide or take with me.

Mon, 04/02/2012 - 21:53 | 2311593 AldousHuxley
AldousHuxley's picture

real estate investment are like gold....you never get rich unless you leverage and buy multiple homes.

 

on the long haul, real estate = US Treasury = inflation

 

the utility of good home doesn't go up or down due to increase in perceived value. All you are seeing is inflation eroding your wage not any real increase in real estate.

 

while you believe your home value went up, everything else goes up too and real limited resource like top education, value of political position, etc. goes up multiple times of your shitty shack value.

 

Sorry, real estate is for the big banksters.

Tue, 04/03/2012 - 09:38 | 2312612 PeterPansDad
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Totally unrelated, nice username.  We need to find another good one handed economist.

Mon, 04/02/2012 - 14:49 | 2310304 SheepDog-One
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Well riphoward I was far ahead of the curve in selling real estate in 2003 and 2004....I saw that top coming a mile away and since my family are land developers, I did all I could to sell all we had, much to the hemming and hawing of them who said 'real estate only goes up' so well long story short we sold the top. Im not much into calling bottoms, real estate is still screwed, because the economy is screwed, and I dont care how much frosting is put on it its still a turd because policy is insane.

Mon, 04/02/2012 - 17:19 | 2310799 DosZap
DosZap's picture

And thinks real estate in non-financial centers of southern states looks attractive and undervalued. I concur.

More room yet to drop, but some bargains if you really steal them.

That said, anyone investing in real estate, or farmland, is setting themselves up for a sad mistake.

The recent EO's, have put a HEAVY risk into owning any land.........and, almost anything else for that matter.(that's not easily hidden.)

Mon, 04/02/2012 - 14:25 | 2310204 lolmao500
lolmao500's picture

Long Japan?? He's high as a kite! A radioactive kite.

Mon, 04/02/2012 - 14:30 | 2310228 riphowardkatz
riphowardkatz's picture

Japan has increased money supply relatively little compared to the west.

http://blogs-images.forbes.com/michaelpollaro/files/2012/03/Slide13-e1333057571772.gif

They are going to have to start increasing the money supply significantly and have started doing so. This will most likely lead to a boom of course a bust will follow but that is life in the 21st century.

And your hyperbole about the  country being radioactive is neither clever nor accurate.

 

Mon, 04/02/2012 - 14:42 | 2310278 crawldaddy
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actually its pretty accurate.  Northern Japan is just a cancer cluster in waiting at this point.

Mon, 04/02/2012 - 14:55 | 2310322 riphowardkatz
riphowardkatz's picture

why is it different than chernobyl, seemed like that was the end of the world until it wasn't. Honest question I am really not that up to speed on its effects.

Mon, 04/02/2012 - 14:46 | 2310295 WestVillageIdiot
WestVillageIdiot's picture

I think it is Japan's turn at the QE round-robin now that Benny has taken his turn and the ECB has done their LTRO.  it doesn't matter who prints just so somebody prints. 

Mon, 04/02/2012 - 14:36 | 2310252 Spitzer
Spitzer's picture

Yeah idoit.

What are you buying ? The DOW of course because its close to all time highs

Mon, 04/02/2012 - 14:40 | 2310273 SheepDog-One
SheepDog-One's picture

I dont always buy equities....but when I do....I buy zee top! Stay thirsty my friends...'

Mon, 04/02/2012 - 14:47 | 2310299 WestVillageIdiot
WestVillageIdiot's picture

When Sheepdog-One punches you in the face you have an overwhhelming urge to thank him. 

Mon, 04/02/2012 - 14:52 | 2310318 SheepDog-One
SheepDog-One's picture

Now how could somebody not like that post? I thought it was pretty funny.

Mon, 04/02/2012 - 14:26 | 2310208 mayhem_korner
mayhem_korner's picture

 

 

Farber needs to decide whether he's a seer of long-range trends or a trader.  The whole "intermediate peak" on gold followed by "but I still recommend to buy and hold gold" bit lacks conviction. 

Mon, 04/02/2012 - 14:34 | 2310240 GeneMarchbanks
GeneMarchbanks's picture

He is almost as clueless as Mark Grant ;)

Mon, 04/02/2012 - 16:38 | 2310673 mayhem_korner
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I didn't say he was clueless - in fact I like his perspective.  I just can't reconcile having conviction about the long-term trend of things while at the same time giving out market-timing advice.  And tops and bottoms and intermediate peaks is all trader-speak for market timing.  I just want his perspective on what he thinks is unfolding without tying it to some trade.

Mon, 04/02/2012 - 16:20 | 2310302 baby_BLYTHE
baby_BLYTHE's picture

did you ignore him when he told you to get long near the exact bottom March 2009? A few months later he also told you gold would never fall below $1000/oz again.

Mon, 04/02/2012 - 16:32 | 2310634 mayhem_korner
mayhem_korner's picture

 

 

Exact bottom of what?  Sorry, but I don't play the paper equities game...

And as far as gold goes, I've been in it for quite a while, and my wtd avg acquisition cost isn't yet at $1,000/oz.  I haven't changed my accumulation habits before or since.  So I'm not real interested in Faber's "call" - I'm interested in his perspective absent his calls.

We're not all market-timers here...

Mon, 04/02/2012 - 14:52 | 2310316 Ghordius
Ghordius's picture

I don't agree. He is a wealth/asset manager - he has to take in account both his convictions AND all possible scenarios.

He and his clients have portfolios big enough to take a multi-generational approach - "old money" style.

They don't invest aggressively and they don't leverage.

Think saving with benefits.

Mon, 04/02/2012 - 14:27 | 2310211 SheepDog-One
SheepDog-One's picture

I cant even sit here talking about margins and earnings when its all fake bullshit fueled by 0% money printing and the S&P shouldnt be anywhere over 500 or 600 area. Bullshit.

Mon, 04/02/2012 - 14:27 | 2310215 Squishi
Squishi's picture

quack quack

Mon, 04/02/2012 - 14:28 | 2310217 kito
kito's picture

lookie here, seems the u.s. can now deny british travelers the right to fly to.....canada....mexico...and cuba...even if the plane doesnt enter u.s. airspace....... and amazingly enough, these airline carriers and host countries have no problem with it!!

linked from ckm3.blogspot.com:

 

http://www.independent.co.uk/travel/news-and-advice/planning-a-trip-to-canada-or-the-caribbean-us-immigration-may-have-other-ideas-7584912.html

 

Mon, 04/02/2012 - 14:29 | 2310222 SheepDog-One
SheepDog-One's picture

And 'QE3' has to be FAR LARGER than QE1 and QE2 COMBINED!

LOL....yea sure it will.

Mon, 04/02/2012 - 14:33 | 2310239 TradingJoe
TradingJoe's picture

HAH! HmH!

Mon, 04/02/2012 - 14:34 | 2310248 the not so migh...
the not so mighty maximiza's picture

Monroe doctrine bitchez

Mon, 04/02/2012 - 16:44 | 2310685 metaforge
metaforge's picture

Wow... just wow... can't believe they are complying with that garbage.

Mon, 04/02/2012 - 14:32 | 2310233 Ides of Marc
Ides of Marc's picture

I was stupid enough to believe this ole coot and run out and buy a bunch pf prepper shit. Years later -- We're still here.

In fact I have now come to the conclusion that it's all horseshit. We are not going to crash and burn. We will limp along because the powers that be NEED US to make their money off of, not to mention --to serve them.

They WILL keep the game going no matter what. Because. They also know if it were to crash -- really crash -- we would kill them in a grueling spectator sport manner.

I call dibs on Berskanky and Geitner!!

Mon, 04/02/2012 - 14:36 | 2310253 SheepDog-One
SheepDog-One's picture

Except that you apparently dont understand that the end of the game is the crash, in order to bring about their planned 1 world govt, bank, and currency thats only been proven in thousands of places by now. You think they really care about your little nickels and dimes? No, theyre positioning to grab the whole enchilada casserole. Theyll use whoever is left around for free slave labor, as just passed in the NDAA bill...its all obvious just have to be able to see it.

Mon, 04/02/2012 - 14:40 | 2310269 riphowardkatz
riphowardkatz's picture

You probably weren't listening, I have never heard him say he can predict dates. 

Were you also stupid to buy an insurance policy because your house hasn't burned down? Or auto insurance because you haven't been in a wreck?

I think you could have left your sentence at just "I was stupid" and maybe even amended it to "I am stupid" 

Mon, 04/02/2012 - 14:42 | 2310277 SheepDog-One
SheepDog-One's picture

Yea really...I dont know how anyone can ever say it was a poor decision to buy stuff that lasts forever and helps you get thru an emergency. Americans are SO fucking sheltered and coddled....My God are they fattened up for the slaughter.

Mon, 04/02/2012 - 14:36 | 2310247 WestVillageIdiot
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"And my sense is that the economy has bottomed out but is far from robust because the typical household is being squeezed by higher cost of living increases."

We have added $7 trillion to our national debt and that is just the part that we admit to.  And on top of that we are about to embark on "free" healthcare as a co-worker was calling it last week.  And this economy has "bottomed"?  Whoa, Nellie.

 

 

Mon, 04/02/2012 - 14:38 | 2310263 SheepDog-One
SheepDog-One's picture

Yea the Titanic also 'bottomed out'...Im not impressed with things bottoming out because most of the time they stay there.

Wait until we have a hot summer with $5.50 gas...people are gonna be pissed...all this crap will be totaly irrelevant and forgotten in a couple months from now.

Mon, 04/02/2012 - 16:47 | 2310695 metaforge
metaforge's picture

False paper-fueld recovery, bitchez.

Mon, 04/02/2012 - 14:36 | 2310254 TradingJoe
TradingJoe's picture

Oh Well, Mark, Du alter Schwaetzer! Mal wieder zu tief inhaliert, eh?! Leg mal die Vodka Flasche weg, vieleicht siehst Du etwas besser, eh?!

Mon, 04/02/2012 - 14:37 | 2310259 John Law Lives
John Law Lives's picture

As of the March 3, 2012 data release, Mississippi had 22% of its residents on SNAP (trailing only Washington DC at 23.5%).

http://frac.org/wp-content/uploads/2011/01/snapdata2011_december.pdf

Mon, 04/02/2012 - 14:44 | 2310284 riphowardkatz
riphowardkatz's picture

What is your point? 

DC housing market is doing to bad. Maybe there isn't a correlation between snap and appreciating real estate?

Or maybe you had another point that I am not understanding.  

Mon, 04/02/2012 - 14:53 | 2310312 John Law Lives
John Law Lives's picture

I was intending to respond to SheepDog-One's post as follows:

"Better go buy some undervalued rural Mississippi real estate then, yea see how that works out for you."

I detected that SheepDog-One was being a bit sarcastic, so I enforced that by sharing some dismal economic data re. Mississippi.  Looks like I responded to the wrong post, so my comment appears misplaced on the thread.

 

Mon, 04/02/2012 - 16:14 | 2310577 riphowardkatz
riphowardkatz's picture

got it. have  a great day.

Mon, 04/02/2012 - 14:44 | 2310287 SheepDog-One
SheepDog-One's picture

Hmm....so then its 'bottomed out' I presume? lol...buy 'attractive undervalued' southern rural real estate like Mark......Yeaaaa thats should work out real good.

Mon, 04/02/2012 - 14:52 | 2310317 WestVillageIdiot
WestVillageIdiot's picture

But Cramer was telling everybody it was safe to buy real estate in 2007.  The bottom was in.  Surely, he couldn't have been wrong.  Oh, yeah.  Right. 

When it comes to real estate common sense is so very uncommon.  And unwelcome.

Mon, 04/02/2012 - 14:56 | 2310323 SheepDog-One
SheepDog-One's picture

I know, these clowns are always saying its safe to buy now. Real estate is a joke to me, and Ive been in real estate most of my life! People STILL havent learned their lesson from that past real estate bubble? Then they deserve what theyll get again....'bottom fishing real estate'....OH and another thing, I'm noticing 'house flipping' seminar ads on the radio lately! WHAT?

Mon, 04/02/2012 - 15:35 | 2310397 Son of Loki
Son of Loki's picture

House prices will keep drifting lower for years ...the ONLY people still beating this dead horse is the NAR.

Shiller, GS, Morgan Stanly, DB and just about every major analyst writes house prices will not come back until jobs come back...and they say that's 8-10 years away.

It's sad but it's better to be real then delusional so you can make the best decision.

Mon, 04/02/2012 - 15:45 | 2310445 SheepDog-One
SheepDog-One's picture

And then its just still speculation, most people buy real estate just believing that someone later will surely pay more than they did. Just the same old Greater Fool theory.

Mon, 04/02/2012 - 18:37 | 2311126 newengland
newengland's picture

SheepDog,

Yes, but no, but maybe. Every dog has its day ;-) I'm buying a house soon after five years of renting during which time I put the equity from the previous owned home into gold and silver. I can afford to pay full cash for the lovely home, but I'll get a small mortgage at low interest rate, just for the pleasure of keeping more in PMs, and sticking it to the banksters who can loan me at a rate whereby they will lose over 15 years, and I will profit. F'em.

Yes, I am aware that real estate will fall further, but the seller and me the buyer did a good deal for both of us. F Big Brother scammers.

End the Fed.

Mon, 04/02/2012 - 14:38 | 2310264 CvlDobd
CvlDobd's picture

As outsiders watching for a Japanese bond bubble bursting and possible currency devaluation. Wouldn't Japanese stocks be very lucrative for an American in that devalued currency environment?

Mon, 04/02/2012 - 14:57 | 2310329 skepticCarl
skepticCarl's picture

Faber is right about real estate in general, but somewhat wrong about the location.  Choose the sunbelt (even Florida), in medium-sized cities with access to airports and medical care.  The tidal wave of retiring baby boomers is headed there, starting now.

Mon, 04/02/2012 - 18:32 | 2311114 newengland
newengland's picture

And JPMorgue advises its senior staff and clients to buy in Cape Cod, MA.  There's some very weird $hit happening; those in the know are heading for the bunkers; self-sufficient places. 

Florida: a sheep herder's paradise. Personally, I would rather the sheep stayed in sunny climes along with their Big Brother government. Tsk. Big Brother with a sun tan, all the easier to kill the people who trust it.

Mon, 04/02/2012 - 15:07 | 2310345 mogul rider
mogul rider's picture

Oh dear he just bent over the gold pumpers.

Oh wait no sorry the pumpers are over at the AAPL site this quarter.

They'll be back for the "sell in May" bend over

 

Mon, 04/02/2012 - 15:47 | 2310451 SheepDog-One
SheepDog-One's picture

Oh dear....gold is what, -$100 from its all time highs? Yea sure its real dismal in gold and all.

Tue, 04/03/2012 - 07:38 | 2312356 prole
prole's picture

Mogul rider's right .. Gold sux!

Look how the pumpers have gotten bent over since 2000, Hell since 1970 .. Gold and esp silver suck as an investment. Precious metals ... getting bent over for a hundred years!

Only thing I can't figure out is since PM are such poor investment choices, why do governments even bother holding them by the ton? Why doesn't the US gov and governments like Germany and Venezuela simply dump their gold before the price collapses? Mogul rider could you help out a ex-gold bug who has seen the light? Help me understand this?

Mon, 04/02/2012 - 15:07 | 2310348 TradingTroll
TradingTroll's picture

The Japanese anti-nuclear sentiment is growing. Japnaese are learning how to not be a docile obedient society. It might be good for the anti-uranium movement but:

 

-docile people make good cars and sophisticated electronics with little variation, that may change

-an obedient society buys their government bonds, a disobedient socienty may not

 

I expect the govenrmnet to collapse, the drag of Fukushima to continue to weigh heavy, in terms of cleanup, health issues, and decreased trade due to consumers not wanting contaminated products

Mon, 04/02/2012 - 15:10 | 2310352 Son of Loki
Son of Loki's picture
JC Penney CEO: $53 million in 2 months

Ronald Johnson collected more in the final 61 days of 2011 than most CEOs get in a year -- and his predecessor got more than most as well.

 

http://money.msn.com/investing/jc-penney-ceo-dollar53-million-in-2-month...

 

"What recession?" CEO Johnson asks.

Mon, 04/02/2012 - 15:15 | 2310361 monopoly
monopoly's picture

"Pony tailed one"....LOLOL

Mon, 04/02/2012 - 15:17 | 2310363 walküre
walküre's picture

On QE3 having to be "enormous":

"It would have to be very significant to boost all asset prices including homes, stocks, bonds and commodities…Much larger [than QE1 and QE2]."

 

3.6 trillion. LOL.

Mon, 04/02/2012 - 15:48 | 2310460 SheepDog-One
SheepDog-One's picture

Hell Bernank will probably just call QE3 an even $4 trillion and really party down! Nevermind the $8 gas and $10 loaves of Wonderbread.

Mon, 04/02/2012 - 15:17 | 2310364 q99x2
q99x2's picture

10% inflation will spark riots and cut real returns on equities. Ben will not allow it.

Mon, 04/02/2012 - 15:48 | 2310459 JohnKozac
JohnKozac's picture

10% inflation will not spur riots imo....deflation more comonly spurs civil unrest.

Look, gas and food are up over 40% in the last two years...what riots?

Ben is titrating printing round robin with the EU and Japan.

Oil, gas, PMs, food wil keep drifting higher from what I see with trillion yet to be printed to sooth the Quadrillion of deleveraging needed.

Mon, 04/02/2012 - 16:49 | 2310705 metaforge
metaforge's picture

Frog in pot of water.  Apply heat.

Mon, 04/02/2012 - 15:45 | 2310443 Bastiat009
Bastiat009's picture

Faber says that the Fed is wrong (when it tries to boost prices) but he buys stocks because the fed will succeed (in boosting prices). That doesn't make much sense to me.

Mon, 04/02/2012 - 15:49 | 2310465 SheepDog-One
SheepDog-One's picture

I guess Fabers gambling model is all-in on the house printing $4 trillion QE3...Im not buying it myself.

Mon, 04/02/2012 - 15:57 | 2310497 resurger
resurger's picture

i lost respect for the guy after this article

Mon, 04/02/2012 - 17:06 | 2310772 mayhem_korner
mayhem_korner's picture

 

 

Agreed.  I look to Faber, Celente, et all for their perspective on macro trends.  That loses some sheen when they tack on the trade du jour.

Mon, 04/02/2012 - 18:52 | 2311160 newengland
newengland's picture

Faber is in Switzerland, the Gnomes of Zurich, the soul less rootless cosmopolitans profit no matter what.

Faber's tales are most profitable for his tiny clique, but I would not live with his sort for all the gold in the world. The Midas touch; instant death in this life.

Mon, 04/02/2012 - 16:02 | 2310477 W10321303
W10321303's picture

 

  6Share

.

Trucking company president Masazumi Ando said he was furious when he saw Kazuhiko Asakawa (pictured), head of an investment firm that lost $1.3 billion in pension money, bow in apology at a parliamentary hearing last week.

"This is nothing but a fraud," said Ando, whose 300 employees belong to a trucking-sector pension plan with $120 million in retirement savings that may now be gone for good.

"We are preparing to file lawsuits so that any cash that may be hidden overseas could be recovered," he told AFP.

Ando's sentiment may be widely shared amid the fallout from Japan's latest financial scandal, which has shaken trust in cherished private pension plans seen as crucial for millions in a country with a rapidly ageing population.

It also comes at a time when camera maker Olympus attempts to rebuild its own reputation following a $1.7 billion loss scandal by present and former top executives.

The problem at AIJ Investment Advisors goes beyond a cover-up -- analysts say the AIJ meltdown points to a serious problem with the deregulation of Japan's private pensions.

It also casts doubt on the future of small and medium-sized businesses if they cannot compensate about 880,000 employees who lost money in the scandal.

"Many of them are small businesses. They could collapse in a domino effect," said Hiroyuki Ozaki, a business professor at Tokyo University of Technology.

The spectre of such a collapse comes as Japanese firms, big and small, are already struggling to recover after last year's earthquake-tsunami disaster.

The stress is particularly acute for smaller firms that contribute more and more money to their pension plans, which tend to be generous in addition to Japan's national retirement scheme.

The fate of 109.2 billion yen ($1.3 billion) managed by AIJ was all but confirmed when president Kazuhiko Asakawa on Tuesday admitted wrongdoing, saying the company falsified its accounts to hide massive losses.

Asakawa told a parliamentary panel the money had disappeared in a string of risky bets on futures and options contracts between 2002 and 2011, but insisted he had not deceived clients since his plan included making the money back.

"I didn't want to use inflated figures for the pensions fund, but I did not want to come back with losses, no matter what," he told the panel in his first public appearance since the scandal surfaced in February.

"I was confident of recouping the losses," he added. (Bangkok Post online)

Regulators have so far found just 8.1 billion yen in accounts in Japan and Hong Kong, with one official saying some of the money may have been funnelled into offshore bank accounts, which Asakawa has denied.

His parliamentary appearance followed a raid on AIJ's Tokyo headquarters by securities regulators, which itself came after a January inspection of AIJ's books found it could not account for most of the funds under its management.

The Financial Services Agency halted the company's operations in February and then revoked its license as an asset manager in March.

No charges have yet been laid, but Mario Takeno, head of the Securities and Exchange Surveillance Commission, has said the watchdog may ask prosecutors to pursue criminal charges.

It has also been widely reported that former employees at the now-defunct Social Insurance Agency were hired at AIJ.

In 2007, the state agency that managed the public pension system admitted it could not find records for about 50 million accounts. The ensuing scandal contributed to the 2009 downfall of the long-ruling Liberal Democractic Party.

Yasuyoshi Masuda, a Tokyo University economics professor, said the wider problem was rooted in deregulation of the sector after Japan's booming economy headed south in the 1990s.

Authorities pushed for wide-ranging changes to stimulate the economy, easing rules for investment advisors looking to manage corporate pensions, he said.

"But following the deregulation, authorities failed to set up a system to impose penalties on almost fraudulent managers like this," Masuda told AFP, referring to AIJ.

"There is a flaw in the whole system," he said.

(Bangkok Post online)

Mon, 04/02/2012 - 16:09 | 2310546 W10321303
W10321303's picture

How many of these Talking Head maniacs have been on the tube since 2000, 2001 (whatever) selling their BOSSES BS to the (at this point) totally retarded?

Mon, 04/02/2012 - 15:55 | 2310489 resurger
resurger's picture

Seriously Marc Faber! i didnt see the clip but wtf!

what do you mean you are long Japan!?

did you jump the QE wagon...

Mon, 04/02/2012 - 16:00 | 2310508 W10321303
W10321303's picture

 

Goldman Sachs insisted it had grown 'uncomfortable with the direction of the company' and its inability to influence its direction.


Stake: A Goldman Sachas spokesman said the fund invested $30million in the Village Voice in 2000

However, New York Times columnist Nicholas Kristof, who exposed the connection, said the bank had been 'mortified' when he first enquired about its stake last week and 'began working frantically to unload its shares'....

Critics including prosecutors, politicians and religious leaders say many of the adverts for so-called escorts are soliciting sex with children, who are sometimes substituted at the point of sale for the adults who have been pictured.

But anti-sex trafficking campaigners have been hampered in their efforts because Village Voice Media is privately owned and doesn’t have to reveal its owners.

Goldman Sachs invested £19 million ($30 million) in Village Voice, an alternative New York newspaper, in 2000 and the stake was converted into a 16 per cent minority stake when the publication merged with another media company, New Times Inc, in 2006.

Since then, a Goldman managing director, Scott Lebovitz, has had a seat on the board of the new company.

Village Voice Media has rejected demands to close down its adult adverts section, insisting the advertising would simply move offshore and outside the jurisdiction of US authorities.

The company said it was cooperating with investigators and had reported 2,695 of suspected child trafficking to officials in 2011.

Read more: http://www.dailymail.co.uk/news/article-2123738/Backpage-com-Goldman-Sachs-sells-16-cent-stake-website-linked-sex-trafficking.html#ixzz1quXmm2La
Mon, 04/02/2012 - 16:16 | 2310587 Scalaris
Scalaris's picture

Mark "sexay accent" Faber 

Mon, 04/02/2012 - 18:48 | 2311143 newengland
newengland's picture

Scalaris,

I prefer the plain talk of James Sinclair and James Turk, but hey ho, it's a free world, sort of...err, no not really. Faber's tales are most profitable for his little world, and the mainstream media do so like his quirky, boot licking ways.

My daughter has dear friends in Japan, and the Far East, and I see nothing profitable in their pain, and the lies told by some vain, shallow  Westerners about their plight.

Mon, 04/02/2012 - 16:34 | 2310656 LarryDavis
LarryDavis's picture

VIX up fractionally on a day where the S&P is up 11 points. Seems about right.

Mon, 04/02/2012 - 18:23 | 2311093 newengland
newengland's picture

Ah, yes, Faber the funmeister, very droll...or drool.

If he became the richest man on earth, then he would still remind me of Oscar Wilde's truism: 'What is a cynic? A man who knows the price of everything, and the value of nothing.'

The Bald One is shorn, and nothing will ever make him comprehensible to most folk, and that includes folk who are rich in money and family, friends, humanity. 

Always amusing to read Faber's tales.

Tue, 04/03/2012 - 02:56 | 2312129 Tsukato
Tsukato's picture

Although I've been one for the longest time, thinking that the end is coming to the U.S., I'm starting to wonder if that's the case. About 15 years ago when I was living in america, I remember some discussion on tv, and they were saying the dollar had to be devalued in the future in order that manufacturing would again be competitive. Also, something was said regarding american workers needing to lose their primadonna attitude, and work for longer hrs, and less money. Well it looks like that is coming. Also, wages in the cities here in China, rose 49% last year.

It doesn't seem to matter if the BRICS start their own world bank. Everything boils down to who controls the oil, and that it remains priced in dollars. Looks like america/nato is taking care of that.

I'm starting to wonder if it might not be a bad idea, to start, incrementally, increasing my exposure back home. For starters, I see tons of palatial homes in the hills outside Sacramento (where I'm from) in the $500-700,000 range. Hell, here in Chongqing, we've been thinking to buy a villa for around that price, but they are piles of concrete shit. Also, wages are lower in the US now, so I wonder if it might not be a bad time to start up sthg over there. Any advice?

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