Friday, September 28, 2018

Dr Marc Faber: Economic Boom or Doom?

I was recently in Chiang Mai and connected with world-renowed economist, Dr. Marc Faber. 

Dr. Faber is a Swiss-born Phd in economics, and is the editor and publisher of the 'Gloom, Boom and Doom Report'. 

He is regularly invited on mainstream financial news media to provide his views on various aspects of the global economy and financial system. 

In this conversation we talk about economic history, social and political issues, and the emerging opportunities and threats in the global economy.

- Source, John Vallis

Wednesday, September 5, 2018

Why you Need to Pay Attention to the Market Pessimists...

There’s always market pessimists to tell you “I told you so.”

‘Permabear’ is a term used for pundits like Societe Generale’s Albert Edwards or newsletter writer Marc Faber who predict market calamity on a weekly or monthly basis without respect to recent market activity.

Permabears are really only the tip of the iceberg, though. The number of pundits who are pessimistic 60 or 80 per cent of the time is far larger than the count of devout permabears.

The end result is that there is never a shortage of dramatic calls for catastrophe so when anything truly bad happens in markets, business TV will find someone to gloatingly announce: “I told you so, but you wouldn’t listen.”

The Financial Times’ (free to read with registration) Alphaville site discussed this phenomenon in “The hunt for the next Nostradamus.”

“To state the obvious: for every buyer there must be a seller. Wild views about future market events, long or short, should be treated with the same scrutiny. Claims that Tesla is going to $4,000, or the Fed’s quantitative easing program is going to cause hyper-inflation, should be judged on their merits, not on the extent to which they tap into fears over another crisis… Brave, contrarian predictions are supposed to lean against the kind of herd mentality that drives exuberant valuations. Think Templeton during the Nasdaq bubble for instance. But perhaps the bubble is now in predicting the next systemic crisis, rather than assuming everything will be OK.”

As Alphaville points out, this doesn’t mean investors can always ignore pessimism. New short positions put in place by famed fund manager Jim Chanos, for example, are always worth further research. It is a key point that Mr. Chanos has been correctly bearish numerous times on many short trades, not just once. As a foreign exchange trader once told me, “It’s easy to be bearish, you have to be bearish and make money.”

- Source, Globe and Mail

Saturday, September 1, 2018

US driving Turkey to quit NATO, boost business with Russia & China

Mounting US pressure on Turkey is hardly a good diplomatic strategy for Washington and its allies, says veteran investor Marc Faber. Ankara has other countries to make alliances with.

“[US President Donald] Trump doesn’t pursue foreign diplomacy. He is just like an elephant in a porcelain shop. He picks on this, picks on that, but there is no diplomacy at all,” Faber told Turkey’s Anadolu news agency.

Turkey has some leverage regarding the recent tension between Washington and Ankara, he said. “This is the Trump card that Turkey have – NATO. NATO has significant bases in Turkey. In the long run basically Turkey has two options; it can be closer to Europe and stay in NATO, or it could join the Shanghai cooperation.”

“That would imply that Turkey abandoned or have less relationships with the West and more relationships with Russia and China. This is a possibility that [Turkish President Recep Tayyip] Erdogan has. I think Trump doesn’t realize that this option is very realistic.”

Faber noted that after the harsh sell-off that hit the Turkish markets, now is a good time to invest in the country. “People always say they would like to buy low and sell high. Turkish stocks are valued in US dollars. Now it’s in buying range. I think I will buy some Turkish stocks, ETF’s [Exchange Traded Funds]. I own some [Turkish] bonds. It’s not the huge portion of my portfolio but yes I own some Turkish debts. I think it’s the time to buy Turkish assets,” Faber said.

The Turkish economy has recently been hit by a record depreciation of the national currency – the lira. On Friday, Trump doubled tariffs on aluminum and steel from Turkey in response to the detention of a US citizen. American pastor Andrew Brunson is being held on terrorism charges in Turkey, facing up to 35 years in prison for his alleged role in a failed coup in 2016.

In response, Erdogan announced a boycott of US electronic devices, including Apple iPhones. Turkey has also hiked tariffs on US goods such as tobacco, alcohol, cars, cosmetics and others.

- Source, Russia Today