It is Pointless to Talk to the FED

It’s pointless to talk to Fed members about economics because they are academics who believe in money printing. Some of them believe they didn’t print enough, and so with these kinds of people, it is like running to the pope. What do you want to tell them? It’s pointless to spend time with these people trying to convince them that their monetary policies have been very destructive. They bailed out Mexico in 1994, and there was an EM bubble until 1997. They then bailed out LTCM (Long-Term Capital Management), which gave a signal to leverage up...then they had the Nasdaq bubble, then they printed again and had the housing bubble. David Hume and Irving Fisher said bubbles are very destructive to the majority of market participants. They lose money, the minority makes money. The Fed doesn’t see it that way so it is pointless to talk to these people.

- Source, Marc Faber via Market Watch

I See the Global Economy Weakening

When I travel and look around economies, I don’t see the global economy strengthening, I see it weakening. In Asia, we don’t have a recession per se, it is just economic growth has slowed down meaningfully or there is no growth at all .

We are now in the fifth year of an economic recovery which began in June 2009 in the U.S. and we’re more than in the fifth year of a bull market that began on March 6, 2009. This is a very mature economic recovery...it would seem to me that the monetary policies that central banks pursue are negative for economic growth, but they are positive for asset price increases. As a result of asset price increases, lots of goods have become unaffordable for the typical household.

- Source, Market Watch

Financial Media Doesn't Believe a Market Correct Can Happen

Since 2012, I have been expecting a correction that hasn’t happened, but it has happened in individual stocks, and it has happened in emerging economies. A 30% [drop] would not surprise me, but the financial media doesn’t believe it can happen. When the S&P was at 666 on March 6, 2009, they didn’t believe the S&P would go to 2,000 either.

The market is very overbought. The rise this year has been accompanied by fewer and fewer stocks making new highs. GE, GM, IBM, Wal-Mart, are no longer participating in the advance. [but] if stocks went down 30% I’d be interested again.

- Source, Market Watch