Tags: Faber | rally | Gloom | Doom

Faber: 'Don't Expect Too Much' From This Stock Market Rally

Tuesday, 29 Nov 2011 08:13 AM

Economist Marc Faber, publisher of The Gloom, Boom and Doom report, cautions investors not to expect too much from the current market rally.

“The rally came from a very oversold level," Faber told Fox Business Network. "We have a very strong support on the S&P between 1,100-1,150."

"And usually the December month is a strong month as well as January so we have seasonal strength and oversold conditions and we can rally, but I don’t think you should expect too much. I think we’ll get into overhead resistance when the S&P rallies another 5 percent or so between 1,250-1,300.”
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The current optimism, says Faber, arises from some sort of a bailout and monetization.

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Marc Faber
(Newsmax file photo)
"But if you look at the market, OK it’s up, but gold is also up and oil is up," he says.

"Like in the U.S., we monetized time and again and it’s just postponing the problem."

"In the end, crisis will eventually happen. The problem of the Western world is that there is too much debt and too many unfunded liabilities.”

Faber acknowledges that Black Friday and Cyber Monday outstripped expectations, saying that "the American consumer went shopping but it’s not supported by income growth."

"If you look at the share of labor income or salary as a percent of GDP going down, what is happening is that people are again borrowing and diminishing their savings rate and I don’t think that is very sustainable.”

Bloomberg Business Week reports that income gains in the U.S. are slowing and workers’ slice of the earnings pie is shrinking, raising the risk that consumer spending slackens next year.

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Economist Marc Faber, publisher of The Gloom, Boom and Doom report, cautions investors not to expect too much from the current market rally. The rally came from a very oversold level, Faber told Fox Business Network. We have a very strong support on the S P between...
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2011-13-29
Tuesday, 29 Nov 2011 08:13 AM
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