Tags: Faber | asset | bubble | correction

Marc Faber: Asset Bubble Might Already Be Popping

By    |   Wednesday, 09 July 2014 11:45 AM

Asset classes across the board have entered bubble territory and might already be bursting, says Marc Faber, publisher of the Gloom, Boom & Doom Report.

"I think it's a colossal bubble in all asset prices, and eventually it will burst, and maybe it has begun to burst already," he tells CNBC.

Presumably, he was referring to the decline in stocks Monday and Tuesday, which pushed the S&P 500 down 1.1 percent. The index rebounded to 1,972.83 Wednesday.

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Faber acknowledged he's been wrong during the past two years in forecasting a stock-market correction, but he's unbowed.

"We've gone up in a straight line, without a correction larger than [10] percent, and I think we're not going to have a correction, but we're going to have a bear market," Faber proclaims.

Economic weakness will hurt stocks, he notes. "I don't believe that the global economy is strengthening. I rather think the global economy is weakening." The poor performance of President Obama and higher oil prices also could play a role, Faber adds.

He predicts a 30 percent drop for the S&P 500, which would put it at 1,379.

Meanwhile, Arturo Bris, a professor of finance at IMD business school in Switzerland, expects a global financial crisis to arise as soon as next April 2015 and says a stock market crash may cause it.

He listed seven other potential causes in a commentary provided to Moneynews:
  • China banking crisis.
  • Energy crisis.
  • Real estate bubble.
  • Corporate ratings and bankruptcy crisis.
  • War and political conflict.
  • Poverty.
  • Cash and hyperinflation.
"While many economies seem to be finally rebounding since the 2008 crisis, we shouldn't be complacent," Bris said. "Too often we do not learn from history and do not act when faced with a crisis we know is imminent."

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Economy
Asset classes across the board have entered bubble territory and might already be bursting, says Marc Faber, publisher of the Gloom, Boom & Doom Report.
Faber, asset, bubble, correction
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2014-45-09
Wednesday, 09 July 2014 11:45 AM
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