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Here is an
interesting video of Marc Faber on Bloomberg about politicians in general,
Obama specifically, and about investment themes for the next few months.
http://noir.bloomberg.com/apps/news?pid=newsa...id=aGQI_w8IwQnU
Points Faber Emphasized
·
Obama has
done a horrible job and that will continue. He is intellectually dishonest
and nothing has changed.
·
I do not
have a high regard for politicians, I have a high regard for people who work,
not for those who abuse the system.
·
Obama came
in on a platform of wanting to change government in Washington and actually
he has made it worse.
·
In terms of
investments, emerging markets and industrial commodities have done
fantastically well. Now we have a change, the US may outperform, it may not
go up but it may outperform on a relative basis.
·
Treasuries
may do well for the next few months.
·
China
stock market is giving a signal that something is not right in the Chinese
economy.
·
Right now,
shift out of emerging markets as they may correct 20-30%, out of industrial
commodities, and into US equities on a relative basis.
·
Sentiment
is overly optimist on the inflation trade like commodities, and overly
negative about treasury bonds.
·
As of
tonight I have a buy signal on US treasuries, but not for the long term. The
rally may last 2-3 months.
·
Treasuries
may be the best place for the next three months as is the US Dollar.
·
Look for a
correction of 10% in US equities and 20-30% in emerging markets.
·
It is not
a group of thinkers in Davos, but a group of liars.
·
Gold may
correct over the near term.
The Bloomberg interviewers repeatedly tried to put word in Faber's mouth he
never said, or remove words that he did say. For example, the Bloomberg
interviewer dropped the word relative with
statements like "You would advise investors to invest in the US."
That happened 2-3 times, forcing Faber to reiterate the opinion that US stock
would likely go down, they just may go down less.
In regards to treasuries, the Bloomberg interviewer quipped "You said US
treasuries are a suicidal investment causing quite a stir. ... Marc, things
are better than they were a couple years ago, how is that Fraud?"
Faber replied "If you print money, and you have huge fiscal deficits, it
would be horrible if the data isn’t any better than it is. So we have a
crack-up boom. The question is, how sustainable is it and how healthy is it?
It’s all money printing and fiscal deficits. One day the burden of
these deficits will have to be paid by someone. … The economy is like a
drug addict and you are not going to solve this by injecting more
drugs."
It was a good performance by Faber in spite of the interviewer's efforts to
twist his statements by dropping the word "relative" and by failing
to distinguish between the near and long term.
Faber handled it well, laughing when those things happened. On one occasion,
in reference to Obama, Faber joked that the interviewer was an optimist.
In general, I am in agreement with Faber, including the outperformance of the
US stock market on a "relative" basis for a while.
However, I am much more bearish on US equities over the long haul than is
Faber.
In regards to treasury bonds, there may easily be one more push higher in
yields before we see a good buying opportunity. Shorter durations are safer
for now.
Mish
GlobalEconomicAnalysis.blogspot.com
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Thoughts
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