Marc Faber's Anticipated Correction May Be Upon Us — Then, the Crackup Boom
by Michael Bogan
Marc Faber, Swiss money manager and editor of the Gloom Boom Doom report, said on Bloomberg television a correction is overdue. After yesterday's dismal performance in stocks, the awaited Faber correction, with all major averages off more than 1.5%, may be upon us.
He stated his expectation for a pullback on the October 26 edition of Bloomberg's InBusiness segment when the S&P 500 stood at 1185. After climbing as high as 1227.08 on Nov. 5, the broader measure of the U.S. stock market has since retreated to 1178.34 at Tuesday's close.
We are in the inflation trade again, he said to Bloomberg's InBusiness hostess, Margret Brennan, noting a weak dollar, strong precious metal prices, strong equity prices especially in emerging markets and now in frontier markets, plus strong industrial commodities.
So, I think a correction is overdue, he asserted.
With more than 95% of all stocks on the S&P trading down for the day, the sell off was a wholesale one. Broad-based selling of this magnitude, though not in price percentage terms, suggests the inflation trade that Faber spoke of, is unwinding.
Invariably comes the question: At what level is it safe again to buy? Faber weighs in with suspicions of a Federal Reserve intervention, at an important technical level, if stocks decline too far.
November 18, 2010
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