Predicts Stock Market Crash Coming: Marc Faber
The world is already in recession and we could be nearing a global stock market crash on par with 1987. At least, that’s according to renowned analyst Marc Faber.
In an interview with CNBC on Monday, the publisher of the Gloom, Boom & Doom Report reiterated his call for a global stock market crash in the coming months. The entire world, in Faber’s view, is on the verge economic collapse. (Source: “Markets finally adjusting to reality that we’re entering recession: Faber,” CNBC, January 26, 2016.)
“[The market] will remain very volatile because interventions with fiscal and monetary policies, instead of lowering volatility they postpone it, and then it explodes,” Faber told the Fast Money panel. “The average stock in the U.S. is already down 26% from its 52-week high and there are a lot of stocks that are down 50% or more. The indices have hidden the weakness beneath the surface and basically the market has been weak the whole time.”
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The noted perma-bear received some criticism for his alarmist rhetoric. But Faber countered by pointing out that since the S&P 500 hit a record-high in May, the index is down 11%. Global equity markets have suffered even worse.
“Markets all over the world are down meaningfully since 2011,” Faber countered. “The U.S. market has been holding up much better than other markets and now it’s just adjusting to the reality, and the reality is we are almost in a recession.”
“Those media and financial people haven’t felt the recession yet because they are in the wonderful service economy that is booming. But ordinary people are not booming,” Faber noted.
A stock market crash would be dire for investors. In Faber’s “medium bearish” scenario, broad market indices could plunge 40%. In the worst-case scenario, the S&P 500 could fall back to its 2009 low. (Source: “Marc Faber’s forecast for the U.S. stock market is frightening,” MarketWatch, January 26, 2016.)