Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
So, Where Is Gold's Corrective Upswing? - 7th Mar 21
US Treasury Yields Rally May Trigger Stock Market Crazy Ivan Event - 7th Mar 21
The Great Reset Is Coming for the Currency - 7th Mar 21
Gold Continues Declines on Bond Yield Jitters - 7th Mar 21
The Case for Inflation - 7th Mar 21
Dow Short-term Stock Market Trend Analysis - 6th Mar 21
Intel Rocket Lake EXPLODE on Launch - 11th Gen CPU's RUN VERY HOT Bad Cinebench R20 Scores - 6th Mar 21
US & UK Head for Post Coronavirus Pandemic Lockdown Inflationary Economic BOOM - 6th Mar 21
FED Balance Sheet Current State - 5th Mar 21
The Global Vaccine Race Against Time and Variants - 5th Mar 21
US Treasury Yields Rally May Trigger A Crazy Ivan Event (Again) In Stock Market - 5th Mar 21
After Gold’s Slide, What Happens to Miners? - 5th Mar 21
Racism Pandemic Why UK Black and Asians NOT Getting Vaccinated - NHS Covid-19 BAME - 5th Mar 21
Get Ready for Inflation Mega-trend to Surge 2021 - 4th Mar 21
Stocks, Gold – Rebound or Dead Cat Bounce? - 4th Mar 21
The Top Technologies That Are Transforming the Casino Industry - 4th Mar 21
How to Get RICH Crypto Mining Bitcoin, Ethereum With NiceHash - 4th Mar 21
Coronavirus Pandemic Vaccines Indicator Current State - 3rd Mar 21
AI Tech Stocks Investing 2021 Buy Ratings, Levels and Valuations Explained - 3rd Mar 21
Stock Market Bull Trend in Jeopardy - 3rd Mar 21
New Global Reserve Currency? - 3rd Mar 21
Gold To Monetary Base Ratio Says No Hyperinflation - 3rd Mar 21
US Fed Grilled about Its Unsound Currency, Digital Currency Schemes - 3rd Mar 21
The Case Against Inflation - 3rd Mar 21
How to Start Crypto Mining Bitcoins, Ethereum with Your Desktop PC, Laptop with NiceHash - 3rd Mar 21
AI Tech Stocks Investing Portfolio Buying Levels and Valuations 2021 Explained - 2nd Mar 21
There’s A “Chip” Shortage: And TSMC Holds All The Cards - 2nd Mar 21
Why now might be a good time to buy gold and gold juniors - 2nd Mar 21
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Marc Faber - Greece is Basically Bankrupt

Stock-Markets / Eurozone Debt Crisis Jun 30, 2015 - 10:04 AM GMT

By: Bloomberg

Stock-Markets

Marc Faber, Editor of the Gloom, Boom & Doom Report, spoke with Bloomberg Television's Stephanie Ruhle, Joe Weisenthal and Scarlet Fu about the U.S. economy, financial markets and the Greek debt crisis.

Describing the situation in Greece, Faber said: "My sense is that they will come to some kind of an agreement in the last minute. But I don't think that's any positive because Greece is basically bankrupt. The debt should be written down by 50 percent or more. However, I have this to say. I don't believe that stocks are going down because of Greece. I believe that the market has been weakening internally for a long time."


When asked what kind of investor will profit the most off the weakness brought on by the Greek debt crisis, Faber said: "The investors who are in cash, they benefit the most, because asset prices have gone down substantially in the last couple of weeks. In the case of China within two weeks the market is down 20 percent. The bond market has given up all the gains since the beginning of the year, and there are losses in bonds...And the big losers are people who just vote on the advice of some media into stock months ago."

Highlights:

*Faber Sees Some Kind Of Greece Agreement At Last Minute
*Markets Going Down Aren't Due To Greece
*Have Been Weakness In Markets For Some Time
*Investors Who Are In Cash To Benefit The Most
*Still Likes Precious Metals
*Says Chinese Economy Has Weakened Substantially
*China Stock Market Down 20%, Likely 20% More To Go
*Doubts Fed Will Boost Interest Rates This Year
*Sees Economy 'Badly Disappointing' Within 6 Months

STEPHANIE RUHLE: For more reaction on the evolving situation in Greece, I want to bring in Marc Faber. He's the editor of the "Gloom, Boom and Doom Report." He joins us now over the phone. Marc, give us your assessment. What is the Greek situation really like right now?

MARC FABER.: Well my sense is that they will come to some kind of an agreement in the last minute. But I don't think that's any positive because Greece is basically bankrupt. The debt should be written down by 50 percent or more. However, I have this to say. I don't believe that stocks are going down because of Greece.

I believe that the market has been weakening internally for a long time. On Friday there were almost 200 new 12-month lows on the New York Stock Exchange. The Chinese stock market, the Shanghai index is now down 20 percent from the highs. So Greece is a side play, but it's used by people as an excuse to sell stock.

JOE WIESENTHAL: Marc, should people in Europe feel confident that what's happening in Greece stays in Greece, or do you think we could see contagion spread and similar concerns re-arise in Spain and Italy?

FABER: Well I think a lot of Europeans don't like the EU, and the bureaucrats in Brussels. They hate them because the bureaucrats in Brussels are like the IMF and the World Bank, basically a corrupt organization that do not pay taxes, but then impose taxes on other people and so forth. And I strongly believe that the typical European would prefer not to have or be a member of the EU.

SCARLET FU: Marc, I want to get your perspective on who and by what, I mean, what kind of investor is going to profit the most off this weakness that we're seeing this morning brought on by the Greek debt crisis, brought on by the negative headlines on Puerto Rico, brought on by the selloff in China, what kind of investor?

FABER: I will tell you precisely. The investors who are in cash, they benefit the most, because asset prices have gone down substantially in the last couple of weeks. In the case of China within two weeks the market is down 20 percent. The bond market has given up all the gains since the beginning of the year, and there are losses in bonds.

So people who are in cash, they are not totally wrong. And the big losers are people who just vote on the advice of some media into stock months ago. They are the big losers because many stocks -- Micron is down 46 percent from its high earlier this year. There are many stocks that have lost a lot of money.

WIESENTHAL: Marc, besides cash, is there anything else that you like right now?

FABER: Yes. I like my Bloomberg terminal.

RUHLE: I like that.

WIESENTHAL: And perfect answer.

FABER: No. I still like the price of metals. They may still come under some pressure, who knows, but in general the debt, the world is indebted and the debt burden is so high that there won't be any substantial economic growth. Now Japan with Abenomics, they just reported for May that the industrial production was down two percent. So money printing doesn't solve all the problems.

FU: Money printing doesn't solve all the problems. Yet China is trying to do what it can to bolster its economy. We heard about the interest rate cut, the surprise cut over the weekend. What is your interpretation of that move? Was it aimed at keeping the rally going? Was it aimed at addressing a liquidity shortage?

FABER: My sense is that the Chinese economy has weakened very substantially. The stock market went up from a year ago by more than 100 percent. I have maintained that the market would correct at least 40 percent. I think we are down 20 percent. I think another 20 percent is likely. But longer term, as you know, the U.S. since 1800s to today have so many recessions, and the Civil Wars and World Wars and so forth, and was still growing.

I'm still reasonably optimistic that the Chinese economy after a slump will come out okay. But they need to lessen in terms of borrowing less, in terms of reducing debt and leverage, as do all the other countries too. But you understand, following the 2008 crisis the central banks allowed governments to borrow even more because of their artificial low interest rates. So basically, global debt as a percent of global GDP is up 30 percent from the 2007 level.

FU: Right, right, right. Well --

FABER: It's not going to end well. That's for sure. Whether Greece is the catalyst, who knows. But definitely the markets are reacting on the downside, and largely because corporate earnings will disappoint. First of all, wages are going up. They will squeeze corporate profits.

Number two, interest rates won't go much lower. So as they don't go any lower it also squeezes corporate profits. And number three, the most important economy for emerging markets was China. And China is now growing at maximum three percent to four percent per annum.

FU: Three to four percent, according to Marc Faber. So given all of that, Marc, do we presume that the Federal Reserve is unable to move ahead with its September timetable for an interest rate increase?

FABER: It's my view the Fed under its (INAUDIBLE) Mrs. Yellen will not increase interest rates for a very long time. And if they do it will be by an eighth or a quarter percent just to see what the market reaction is. But I personally doubt she will do it this year. They'll find an excuse not to do it.

RUHLE: But should they? I mean what are the unintended consequences of keeping rates where they are? If the U.S. economy is doing well, shouldn't we focus on that, or shouldn't she, excuse me.

FABER: Do you really think that the U.S. economy is doing well? I -- that's not my impression. I think the typical household is squeezed very badly. I was recently in a limousine, and then we talked about this and that. And the limousine driver told me his health care premium was -- and I mean the insurance premium this year will go up 39 percent. So I believe that actually most households are struggling, but they're borrowing again. Most households in the U.S. have no savings. I believe that the U.S. economy will badly disappoint within six months.

RUHLE: Marc, you just carry an umbrella all day, every day, just always rains in Marc's town. Marc, thank you so much for joining us this morning, the one and only Marc Faber. He's the editor of the "Gloom --

FABER: Actually in Thailand we have a shortage of rain. We have a cloud.

RUHLE: Well, Marc, I love when you join us, and Marc Faber. He's the Executive Editor of "Gloom, Boom and Doom Report" and, Joe, no one better in the house than you.

**CREDIT: BLOOMBERG TELEVISION**

**For more on Greece and the biggest news in financial markets, 'What'd You Miss?' featuring Joe Weisenthal and Alix Steel debuts today at 4:00 pm ET. Watch on Bloomberg Television or on livestream here: www.bloomberg.com/live

bloomberg.com

Copyright © 2015 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Bloomberg Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules