Why We Are Shorting The S&P Like Crazy - Thanks to This "Mini-Rally" Gift!

Here's your weekly investing outlook from CommodityBullMarket.com - and even though commodities are likely to run into some serious headwinds in the short term, we're still firing away with some contrarian investing and trading ideas!

If you're not yet subscribed to our new (and free) daily newsletter, The Contrary Investing Report, you can request a free subscription here. 

I'd highly recommend this, because we post articles and news throughout the trading day!  All this and more on our new site: http://www.contraryinvesting.com/

 

Now for the week's lead story...

Why We're Short the S&P - Again - Thanks to This Mini-Rally!

Two weeks ago, we picked up a story courtesy of Bespoke Investments that showed just 4% of S&P 500 stocks were above their 50-day moving average - a level not even seen during the March 2009 lows!

So we thought a stock market bounce might be on tap - and sure enough, this week we got it.

Now after 4 straight up days, where do we sit?  We're now out of extreme territory - now with 29% of S&P 500 stocks above their 50-day MA.  To illustrate the relationship between this ratio, and the actual price of the S&P 500, I plotted both below for the year to date:

Source: StockCharts.com

Of course this is a crude technical indicator, and one based on trailing prices at that.  But it has been effective at identifying extremes - especially oversold ones.  Not as much during overbought situations (like February to April of this year).

So where to from here?  I still see this ship heading down (here's the big picture of "why").

But we could rally further from here.  We closed Friday at 1077 on the S&P.  A rally up to but not surpassing the June highs around the 1130 mark would keep our bear market signature of lower highs and lower lows intact.

But I don't think a run up to 1130 is likely.  We've retraced roughly 50% of the last decline at this point.  So we could go farther - but that is not required at this point.  We're already halfway there - this mini-rally is livin' on a prayer!

Bottom line: Any further price appreciation will certainly leave a bear like me licking his lips for a chance to reinitiate a nice, juicy short position!  So, we initiated a short position on Friday.

And if you're new to our "shorting the S&P 500" mini-series, you can get caught up on our trade history - and thought process behind the trades - in the Shorting the S&P 500 section on our blog. 

http://www.contraryinvesting.com/

More Investing News...

 

Marc Faber's Latest Outlook and Predictions

Stock, real estate, precious metals OK...just stay clear of bonds!

More Deflation! Consumer Credit Declines

More than forecast - would you believe it?

The Baltic Dry Index is in Freefall

Look out below, global economy! 

Muni Bond Yields are "Breaking Out"

The public fiscal train is hurdling out of control

 

http://www.contraryinvesting.com/

Marc Faber's 3 Favorite Commodity Picks Right Now

Last night, we posted a Marc Faber interview over at our sister site, The Contrary Investing Report.  Most of the interview focused on Faber's outlook for China - he believes a crash is coming within the next 12 months.

For us commodity traders, Faber dropped a very nice tip right at the end of the interview.  He thinks agriculture is getting real cheap - perhaps making a major bottom - and specifically said that corn, wheat, and soybeans could be interesting plays.

As you can see, the grains (represented below by ETF DBA) have not "reflated" much over the past year - they've been largely left behind:

Are the grains forming a major bottom? (Source: StockCharts.com)

In my experience trading the grains, I've found that it's best to wait for them to make a move, before piling in. Major breakouts are often excellent times to buy.  

So we'll be keeping an eye on this developing story, and my interest is certainly piqued after Faber's comment.

Recommended reading:

• David Rosenberg's latest comments on the money supply and deflation
• Robert Prechter shares 8 bearish technical indicators
• Our Sacramento Casey Research Phyle Wrap for our May meeting

Contrary Investing Weekly Wrap: Fear is Dead; Delinquencies Skyrocket; Marc Faber - and more!

No Fear, Again: Market Participants Are Opting For Extra Yield, Risk Be Damned

Last week, a buddy from college sends me an email:

"Hey, I got a little bit of cash sitting around, earning next to nothing in a savings account. Anything you'd recommend to get this cash working for me?"

"Not really - everything looks pricey right now...hey, does that mean you paid off your law school loans?" I asked.

"Actually no," he informed me.

I suggested he may want to work down the debt first, no matter how low the interest rate.

Meanwhile, California pension funds are still counting on a cool 8+% annual return to deliver on existing obligations - based on historical returns, of course, which only includes the greatest bull market of several generations.

Anyone want to take the other side of that bet?

Not to be outdone, junk bond funds are back in vogue once again. And of course, the crappiest quality bonds are the hottest!

Chart courtesy of EconomPic Data.

It's hard to believe that this time last year, we were talking about how Return OF Capital was the new Return On Capital!

So is everything rosy again, or is this "reach for extra yield" mentality exactly what a bear market bounce is supposed to engender during it's final phases? My bet is on the latter, but in any case, we should find out soon!

Nothing To See Here - VIX Hits 18-Month Low

Volatility on the S&P is nowhere to be seen these days - perhaps the market crash was merely a figment of our imaginations!

The VIX is low, and it continues to head lower.

(Source: Yahoo Finance)

As you can see from our experience in 2008, when the VIX breaks out, it breaks out in a big way. So a breakout on the VIX would be a good cue for us to start slamming the PANIC button as hard as humanly possible.

But for now, all is calm in the markets, as February's drop now looks like a pebble tossed in the pond in hindsight.

The VIX could continue to head lower - who knows - but one would have to expect a spike in our future again sooner rather than later.

Scary Chart of Delinquency Rates Skyrocketing

Can you spot the trend?

Chart courtesy of http://www.calculatedriskblog.com/

Hat tip to friend, reader, and monetary expert Dave for sending this gem along.

For further reading on the real estate trainwreck, check out this interview with real estate entrepreneur and guru Andy Miller.

The Hidden, Historic Bubble That Could Burst Any Day

Of course we're talking about...

...all at once now...

Muni bonds!

Yay! Of course, municipalities far and wide have no way to pay back their increasing deficits amidst falling tax revenues.

Of course you knew this already, being an astute reader and no doubt a contrarian thinker. But the mainstream press is even starting to catch on.

The Contra Costa Times reports:

Declining income from property, sales and other taxes coupled with growing pension obligation debts and the residual effects of the financial meltdown are inflating a dangerous bubble in the $3 trillion to $4 trillion public bond financing market.

If the bubble bursts, agencies will be unable to borrow, and would cancel or postpone public projects such as school construction or building roads and highways. At worst, governments could default and upend the historically safe municipal bond market.

"This is the most serious municipal debt crisis in U.S. history, including the Depression," said Denver-based attorney Jeff Cohen, who represents bond issuers and buyers. "Arizona has huge problems. So do Nevada, Illinois, New York and New Jersey. And California has the same credit rating as Kazakhstan."

Small to mid-size public agencies, in particular, have been hit hard, said Cathy Spain, director of the Center for Enterprise Programs at the National League of Cities.

Not only has public agencies' income dwindled, but they can't even buy the bond insurance that would lower their borrowing costs. Most of the bond insurance companies, who participated in the mortgage-backed securities shenanigans, spiraled out of business during the bank meltdown.

Get your popcorn ready - this should be a doozy!

Also check out Robert Prechter's thoughts on why you should run, not walk, from these "safe" muni bonds.

Why Marc Faber Is Predicting A Large Correction Right About...Now

About a month ago, Marc Faber told Bloomberg that we could easily see a correction of 20% if the S&P topped 1150 and approached 1200.

Well, it seems like we're just about there, so we'll see how Faber's near term musings fare in the weeks ahead.

You can check out a video of Faber's Bloomberg interview here.

Some other thoughts from Faber:

• He thinks the Euro is very oversold, and can rally to 1.40 before going lower

• Doesn't see anything much good about the Euro, or the Dollar, for that matter

• Debt monetization is inevitable in the long run

• He likes precious metals and Asian currencies - says "most currencies are sick"

• Better to be in stocks than bonds over the next few years, because he expects increasing inflation

Faber's book Tomorrow's Gold is excellent by the way - if you haven't read it, and you are a Faber fan, I'd definitely recommend you pick up a copy.

Interestingly Faber was a deflationist when he wrote the book almost 10 years ago, and has since flipped to the inflation camp, because he believes that sovereign printing presses will overwhelm broader deflationary forces.

Further reading: Why Marc Faber sees no way around US inflation.

A Few More Links, In Case You Missed Them

• Sir John Templeton's Final Memo: We're Screwed

• How to Answer Your Census, Christopher Walken Style - Hilarious Video

• Robert Prechter's Deflation Primer - What You Should Know

My Current Positions and Market Outlook

The trend of all markets still (yes, still) appears to be up, but the risk appears to be predominantly to the downside. The only trend that appears to have changed for certain is that of the dollar, which is currently taking a breather after a multi-month rally.

The US dollar's trend is officially UP. It's well above it's 200-day moving average.

(Chart courtesy of StockCharts.com)

If the dollar is indeed the linchpin of the financial equation, then we'd expect the other markets to roll over one-by-one in turn here. We shall see if things play out this way.

(PS - Here's why I concur with folks who believe the dollar is the linchpin of the global financial markets).

I am still in wait and see mode, with no long or short futures positions.

Have a great week in the markets!

Marc Faber on American Economic Policy

Last week, Marc Faber wrote an article for The Daily Reckoning, where he critiqued America's economic policy...you can likely guess the general tone of it. I always find his commentary extremely insightful.

You've probably noticed that Faber is one of my favorite gurus. I'm almost finished reading Tomorrow's Gold, which he wrote back in 2002...it's excellent, and I'll post a review once I knock it off.

You can find his essay here:

• Faber on the Frame of Mind of American Economic Policymakers (Part 1)

• Faber on the Frame of Mind of American Economic Policymakers (Part 2)

Marc Faber Loves Agriculture at These Prices

Marc Faber says that investing in agriculture today will be like investing in oil in 2001, when it was priced at $17/barrel, according to The National Post.

Faber says that record low inventories, declining agricultural productivity, and increasing demand for food will drive prices higher.

The falling productivity line is especially interesting...Faber says productivity in agriculture has been declining since 1990, and expects that trend to continue.  If this is true, which I'd imagine it is, it's counter to what most folks (including me) believe.

Read the full article here...

More reasons to invest in agriculture:

• Jim Rogers loves the fundamentals too
• Sugar especially has an appealing supply/demand situation shaping up

Ed. Note: Stay up to date on the latest in agriculture and be sure to check out our weekly insights published every Sunday: This Week in Commodities

Marc Faber: We've Begun a 15-20 Year Bear Market in Bonds

Here's Dr. Doom himself, Marc Faber, giving one of his usual insightful and thought provoking interviews for Bloomberg.

What really caught my ear was around the 4:30 mark, he proclaimed the bull market in long dated bonds to have ended as of December 18, 2008.  (He also pinpoints the start of the bull market at September 21, 1981).  Faber believes we're now in the beginning of a long term bear market for these bonds, which he expects to last 15-20 years.

This really is a fantastic interview - be sure to check out Faber's answer to how Geithner and company can locate the bad apples in the financial system...I'll save the punch line for you.  It's around the 7:20 mark.

Other quick notes:

• Gold "could" dip back down to $750-800 (before heading higher)
• He likes the Canadian, Australian, and Singapore dollars better than the US dollar

Here's the full interview:

More recent coverage of Faber:

• Peter Schiff Interviews Marc Faber
• Faber Says This Rally May Have Some More Legs

Ed. note: If you love Faber, you'll also get a real kick out of Doug Casey.  Check out his piece about how we're in the early innings of the Greater Depression.

Peter Schiff Interviews Marc Faber

Here's a great interview I just came across - Peter Schiff interviewing Marc Faber (late February 2009), and I found it on LewRockwell.com to top it off - what a trifecta!

Here's a great quip from Faber:

What Mr. Greenspan and Mr. Bernanke have achieved is historically quite unique. They have managed to create a bubble in everything, everywhere in the world: in real estate, equities, commodities, art, worthless collectibles; even bond prices continued to rise as interest rates fell due to the loose monetary policy.

And a few investment specifics:

• Doesn't like stocks
• Asia is quite inexpensive relative to the US
• Would recommend half an investor's portfolio be in cash
• Short term thinks the US dollar is OK, but says obviously at some point it "won't be OK"
• Sugar is quite attractive at this level

George Soros, Marc Faber Say It's Only a Bear Market Rally

Legendary investor George Soros, co-founder of the famed Quantum Fund with Jim Rogers, told Bloomberg: “It’s a bear-market rally because we have not yet turned the economy around," and reiterated that this financial crisis is worse than anything we've seen in our lifetimes.

Marc Faber is also quoted in the article, saying the S&P index may fall to around 750, and rebound after July.

Marc Faber: This Rally May Have Some More Legs

Here's a short interview Marc Faber gave for Bloomberg recently (week of March 23rd), where he gave his current thoughts on US equities and Treasuries:

Faber's thoughts:

• Markets became extremely oversold on March 6, when the S&P touched 666 

• This rally may have some more legs, because the government is printing money - so asset prices may rise because of that fact alone

• The S&P could go as high as 880 in the short term

• The rally in US Treasuries has been very disappointing (to Bernanke and other Fed officials)

• Many people around the world are concerned about the long term effects of Bernanke's plan to monetize US debt

• Bernanke's actions will all "end in disaster"

Full interview at Bloomberg.com

Click here to read more Marc Faber coverage

Marc Faber: Expect Markets to Stabilize and Rebound (Somewhat) in the Short Term

Marc Faber's observations on a CNBC interview from January 19, 2009:

• The corporate credit markets have improved somewhat

• He expects government bond markets to weaken, due to the increasing unlikeliness they will be able to pay off their mounting deficits - believes this may be the "next shoe to drop"

• There's a very good chance the 2nd half of 2009 could be even worse than the 1st half of 2009

• At 850-900, the S&P is not particularly inexpensive, because corporate earnings continue to dissolve

• There are some pockets of value in Asia, and many stocks have attractive dividend yields at 3 to 4 times the bond yields

Faber on Commodities

• The bull market in commodities is still relatively young (started in 2001) - while the bull market in stocks started about 20 years earlier

• Supply of many commodities will suffer greatly due to this credit crisis

• When the global economy recovers, many commodities will rise substantially as a result

Faber on Inflation vs. Deflation

• While there has been a deflation in asset prices, he has not noticed any deflation in consumer prices

• Doesn't know who "in their right mind" would buy a 30-Year US Treasury that is yielding less than 3%...in a structurally weak currency
  

Faber's Current Investments

• Thinks the markets became very oversold in November

• Anticipates the markets will stabilize and rebound somewhat over the next couple of months

• Has some shares in Asia, mining stocks, exploration companies, physical gold, and a basket of currencies

• Thinks the dollar could strengthen further in the short term
  

Part I: Marc Faber on CNBC - January 19, 2009:




Part II - Marc Faber on CNBC - January 19, 2009:



Editor's note: Want to be alerted about Marc Faber coverage as it happens? Subscribe to our email alert list here.

Commodity Futures Weekly Review - January 11, 2009

Now for the weekly review of our commodity futures positions - current as of January 11, 2009.

First, our top blog posts from the past week:

• Is It (Finally) Time to Short US Treasuries - And Make a Fortune?
• China Starting to Regurgitate US Debt
• Marc Faber on Bloomberg: World War III Has Already Begun
  

Also our coverage of Jim Rogers' and Marc Faber's Commodity Picks for 2009 was the 2nd most popular article on Seeking Alpha for much of the week.

A review of our trades and positions from the previous week:

• Sold our mini-gold futures contract - to make way for another grains contract. This was a position sizing move - gold had not yet hit our sell stop.

• Also sold our one cocoa futures contract - also for position sizing purposes. Cocoa was not performing as well as wheat, so we decided to add to our wheat position.
  

• Bought one more wheat futures contract - wheat put in a strong performance this week, up $0.20.

• Continued to hold one corn futures contract. This was an attempt to "pyramid" our grains position and diversify. Corn was up $0.02 on the week.

• Continued to hold one cotton futures contract - we LOVE cotton at these prices - as we've discussed with before in this space. Cotton was up slightly on the week.

• And finally, the dunce cap so far goes on our decision to eat our own dog food and short the 10-Year Treasury Note. We haven't lost hope yet, but will have to exit this position if new highs are hit. It won't be the first time we've gotten burned on this trade.
  

Commodities that appear quite beaten down - but we don't own them...yet...

• Sugar
• Coffee
• Natural Gas
• Silver
• Crude Oil

Open positions

Date	Position	Qty	Month/Yr	Contract	Entry Price	Last Price	Profit/Loss
12/29/08	Long	1	MAR 09	Corn	422 1/4	412	($512.50)
12/31/08	Long	1	MAR 09	Cotton	48.52	49.33	$405.00
01/06/09	Short	1	MAR 09	T-Note (10yr)	123-285	125-220	($1,796.88)
12/24/08	Long	1	MAR 09	Wheat	579 1/4	630	$2,537.50
01/06/09	Long	1	MAR 09	Wheat	627 3/4	630	$112.50
Net Profit/Loss On Open Positions							$745.63

Account Balances

Current Cash Balance	$47,783.90
Open Trade Equity	$745.63
Total Equity	$48,529.53
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$48,529.53

---------------------------------------------
Cashed out: $20,000.00
Total value: $68,529.53
Weekly return: -2.1%
2009 YTD return: -4.5%

2008 return: -8%

***"Cash out" mostly means taxes - lately we've also been using it for living expenses, and also to finance our time management software company that was recently covered by the Sacramento Business Journal and Inc magazine.

Now Offering Free Email Alerts

Want to be alerted about specific investment coverage as it happens?

Send an email to:

Brett(at)CommodityBullMarket.com

with the type of investment alert you'd like to receive in the subject line of the email, and we'll add you to our email alert list.

Current email alert options:

• Marc Faber updates
• Jim Rogers updates
• Weekly futures review
  

Commodity Futures Review - January 4, 2009

Now for the weekly review of our commodity futures positions - current as of January 4, 2009.

First, our top blog posts from the past week:

• Expert Commodity Picks for 2009: Jim Rogers and Marc Faber
• GoldMoney Review: Gold Climbs for 8th Straight Year
• Jim Rogers on Kudlow: We're going to have an inflationary nightmare

Our coverage of Marc Faber's recent interview on CNBC from December 1st continues to see a lot of traffic.

A review of our trades and positions from the previous week:

• Continued to hold one cocoa futures contract - down on the week, mostly due to a sharp Friday drop.

• Continued to hold one mini-gold futures contract. Gold was stuck in the mud for the week - though it did wrap up an 8th consecutive up year vs. the US dollar.

• Continued to hold one wheat futures contract - up a bit for the week. Looking to add on further strength.

• Bought one corn futures contract. This was an attempt to "pyramid" our grains position and diversify - in hindsight, looking at the charts of each, wheat looks stronger, and we should have added to that position before initiating this one.

• Bought one cotton futures contract - we LOVE cotton at these prices - as we've discussed with before in this space.

Commodities that appear quite beaten down - but we don't own them...yet...

• Sugar
• Coffee
• Natural Gas
• Silver
• Crude Oil

Open positions

Date	Position	Qty	Month/Yr	Contract	Entry Price	Last Price	Profit/Loss
12/29/08	Long	1	MAR 09	Corn	422 1/4	410	($612.50)
12/15/08	Long	1	MAR 09	Cocoa	2586	2506	($800.00)
12/31/08	Long	1	MAR 09	Cotton	48.52	48.90	$190.00
12/24/08	Long	1	MAR 09	Wheat	579 1/4	610	$1,537.50
12/15/08	Long	1	FEB 09	Mini Gold	836.6	877.3	$1,351.24
Net Profit/Loss On Open Positions							$1,666.24

Account Balances

Current Cash Balance	$47,887.81
Open Trade Equity	$1,666.24
Total Equity	$49,554.05
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$49,554.05

---------------------------------------------
Cashed out: $20,000.00
Total value: $69,554.05
Weekly return: -2.5% *** since 1/1/09
YTD return: -2.5%

2008 return: -8%

***"Cash out" mostly means taxes, but lately we've also been using it for living expenses, and also to finance a cool new time management software startup that is starting to lift off - and was recently covered by the Sacramento Business Journal.

Expert Commodity Picks for 2009: Jim Rogers and Marc Faber

What a crappy year 2008 was for commodities! Will they rebound in 2009? If you believe, as I do, that we are in the middle of a secular bull market for commodities, then current prices represent a tremendous buying opportunity.

Jim Rogers has been saying it best lately - that you want to buy assets where the fundamentals are unimpaired. And the only asset class where the fundamentals are currently unimpaired is commodities - in fact, the fundamental story for many commodities has even improved since the financial crisis took hold, as there is a lot of supply coming off the market.

Jim is also fond of referencing the performance of commodities during the Great Depression, where they were the first asset class to turn up because there was no supply.

Since I agree with Jim's point of view, I decided to research specific commodity picks experts are making for 2009. My "expert" criteria is highly biased, based on the two people I've been following the closest during this commodity bull run - Jim Rogers and Marc Faber - because of their prescient calls and knack for spotting commodity trends before the herd.


Jim Rogers

• Likes agriculture and says prices are down due to forced selling, not fundamentals, which have actually improved. "Farmers can't get loans for fertilizer now."
• Also loves oil - says it has been crushed - it's price is below the cost of production - he's been buying more, and believes it will roar back in a big way.
  

Marc Faber

• Says 2009 will be a "total disaster" for the global economy.
• Believes commodities have corrected within a bull market, and there are opportunities to be found there.
• Sees significant inflation coming as a result of the Fed's actions.
• He continues to like gold and gold miners - believes exploration companies are very depressed with respect to the price of physical gold.
  
• Oil at this level is becoming attractive, as are oil companies.
• Shares his specific picks at the 7:45 mark of this interview.
  

Editor's Note: This article was also published by Seeking Alpha.

Click on their respective names to read more Jim Rogers and Marc Faber coverage.

For more information on investing in gold miners, check out some of our recent coverage of gold and gold stocks. I personally subscribe to BIG GOLD, produced by Casey Research, which is an excellent service.

Weekly Futures Positions Review - December 28, 2008

Top posts from the past week:

• Lean Hog Prices Poised to Climb in 2009
  
• Why eBay is the Best Indicator of Gold's Fair Value
  

Our coverage of Marc Faber's recent interview on CNBC from December 1st continues to see a lot of traffic.

A review of our trades and positions from the previous week:

• Continued to hold one cocoa futures contract - up slightly on the week. Looking to add to this position on higher high's.
  

• Continued to hold one mini-gold futures contract - a nice bounce on Friday for Gold also made this position a solid performer on the week. Looking to pyramid if/when gold makes a serious run at $1,000.
  

• Purchased one wheat futures contract. All of the grains look like they are now breaking out - the corn and soybean charts look very similar. I think the grains are seriously oversold, and the bullish fundamentals are quite intriguing at these price points. I prefer wheat and corn over soybeans personally from a fundamental perspective.

Our wish list...everything here looks beaten down...some starting to form a bottom it appears...

• Sugar
• Coffee
• Cotton
  
• Natural Gas
• Silver
• Crude Oil
• Corn

Open positions

Date	Position	Qty	Month/Yr	Contract	Entry Price	Last Price	Profit/Loss
12/15/08	Long	1	MAR 09	Cocoa	2586	2616	$300.00
12/24/08	Long	1	MAR 09	Wheat	579 1/4	599	$987.50
12/15/08	Long	1	FEB 09	Mini Gold	836.6	870.6	$1,128.80
Net Profit/Loss On Open Positions							$2,416.30

Account Balances

Current Cash Balance	$47,916.42
Open Trade Equity	$2,416.30
Total Equity	$50,332.72
Long Option Value	$0.00
Short Option Value	$0.00
Net Liquidating Value	$50,332.72

Cashed out: $20,000.00
Total value: $70,332.72
Weekly return: 4.9%
YTD return: -8.6%

***"Cash out" mostly means taxes, but lately we've also been using it for living expenses, and also to finance a cool new time management software startup that is starting to lift off - and was recently covered by the Sacramento Business Journal.

Marc Faber: The 2009 Global Economy Will Be A "Total Disaster"

Marc Faber's observations on a CNBC interview from December 1, 2008:

• We're experiencing the largest asset deflation since World War II

• Since 2001, every asset class in the world went up - except the US dollar. Fast forward to 2008, and every asset class has collapsed - except the US dollar.

• The global economy will continue to deteriorate badly next year. It will be a "total disaster".
  

• He sees a short-term rally in US stocks, due to the current oversold conditions.

• The "Warren Buffett" approach of buying and holding stocks has been dead for 10 years, and it will be dead for another 10 years.

• He expects volatility to stay sky high. It will be a "trader's market".

• Equities will not make new highs in real terms for years to come.

• Commodities have corrected within a bull market. He believes there are opportunities to be found there.

• The Chinese economy is a "disaster." It's going to get worse.
  

Marc Faber's current investment recommendations:

• Commodities...when the global economy recovers (and he expects this to take 5-10 years!)

• Within the next 12 months - short US long term government bonds
  

Part I: Marc Faber on CNBC - Dec 1, 2008:




Part II - Marc Faber on CNBC - Dec 1, 2008:



Editor's note: Want to be alerted about Marc Faber coverage as it happens? Subscribe to our email alert list here.

Marc Faber on Bloomberg - November 11, 2008

Marc Faber has certainly had some impressive calls over the past year. On July 10th, he predicted that deflation will rule the day in the short term. And as far back as March 29th, he voiced concern that massive deleveraging could drive down asset prices across the board.

I've posted the latest video of Marc Faber on Bloomberg (November 11, 2008). Faber currently believes:

• The equity markets are extremely oversold at this point.
  
  
• However, he would not bet on a big rally - it could happen, but is not a given, as economic news will continue to be terrible.
  


• Government bailouts are tiny compared to the asset deflation we've witnessed - so he does not see inflation being a factor as a result.
  
  
• BUT - as a result of capital projects being cut, commodity prices could skyrocket when the global economy picks up again (and this could take years).
  
  
• For example, a lot of oil exploration will stop at these prices, because it's not profitable.
  

Marc Faber on CNBC - October 14, 2008

In these crazy times for the market, I'm turning my attention to the few prognosticators that have nailed the story so far.

Marc Faber has certainly had some impressive calls recently. On July 10th, he predicted that deflation will rule the day in the short term. And as far back as March 29th, he voiced concern that massive deleveraging could drive down asset prices across the board.

I've posted the latest video of Marc Faber on CNBC yesterday (October 14, 2008). Faber currently believes:

• Downside to the US dollar is limited from this point
  
  
• Resource related currencies (Australian dollar, New Zealand dollar) both have room to move up from here, but he believes we have seen their highs
  


• Does not like gold exploration stocks - because exploration is difficult, and because they rely heavily on outside capital
  
  
• Prefers physical gold
  
  
• Likes commodities in the long run
  
  
• Says the best thing to do right now is to "take a holiday"
  
  
• Be careful about getting suckered into stock market rallies - in late 1929, the market bottomed out and rallied 50% going into the summer of 1930...only to collapse another 90% from there!
  

Part I

Part II

Part III

Marc Faber on Investment Outlook - Great Presentation

Really great info and insights here from Marc Faber on the near term and longer term economic outlook, from his vantage point.

I really love how he calls the Fed a "money printing machine." Interesting thing about his viewpoint is that, while he believes inflation will ultimately rule the day, he believe deflation will take hold in the short term, as the credit crunch worsens in the private sector.

Marc Faber: Bearish on Everything

Full clip (3 min) - Faber is a long term commodity and gold bull, and dollar bear - however he is concerned about massive de-leveraging that potentially drive down prices across all asset classes.