When last we checked in on Marc Faber, the Gloom, Boom, and Doom seer was predicting that the market had reached [9] a “tipping point”, as thanks to QE and incessant central bank interventions, there are no safe assets left.
“It's ludicrous to believe that you will create prosperity in a system by printing money,” he said. “That is economic sophism at its best.” Or at its worst.
Shortly thereafter, Faber told Bloomberg [10] that China's economy has most assuredly "landed hard."
"I think it's very difficult if you had the kind of bubble like you had in China, and the credit bubble, to then engineer a soft landing," he continued, before warning that "you could maybe cushion the downturn somewhat, but the fact is I the economy isn't growing at all."
On Tuesday, Faber was back on Bloomberg TV to discuss the outlook for 2016. The US economy, he says, is headed into recession and rather than be bullish on US equities (as every strategist polled by Barrons apparently is [11]), Faber is long USTs. Asked whether it's a good idea to be bearish when stocks generally rise over time, Faber responded: "I think the right way to think about any investment is to be realistic."
Here's the video followed by some notable excerpts.
On US stocks:
“I just read the other day a Barron’s cover and not one strategist was negative about the US stock market in 2016. I think the US stock market will go down in 2016.”
On the 10-year:
“I think 10-year USTs are quite attractive because of my outlook for the weakening economy. Actually I believe we’re already entering a recession in the US.”
On EM:
“Emerging markets have underperformed grossly since 2011. I believe it may slightly premature to go into EM, but they’re moving into a buying range.”
On the inevtiable path back to QE:
Well, I don't think that the U.S. will continue to increase interest rates. In fact, given the weakness in the global economy and the deceleration of growth in the U.S., I would imagine that by next year the Fed will cut rates once again and launch QE4.
And finally, on periphery countryside retreats and Vietnamese equities:
“I like real estate in the countryside in Portugal, Spain, Italy. I think the Vietnam stock market looks attractive as the Vietnam economy continues to perform exceedingly well.”
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For those who missed it, here's the Barron's piece Faber references:
[12]
