Marc Faber : Well, compared to the stock market commodities are probably relatively inexpensive. Green is considered the neutral or low probability zone for the metric to create a condition conducive to a major market correction. Likewise, a yellow marker denotes a cautionary condition, and red denotes a relative measure that has a high probability of causing downward market pressure. Through time as the measurements change, the directional change in each variable is also assessed and if a variable is approaching, but not yet reached a warning condition, then it is outlined in red. The July month end metrics, which were updated on the Financial website after the July close, included a warning statement for the first time.
BAA1 / 30 Year Treasury Spread – a major widening of spreads between the Treasury market and investment grade bonds to historical warning levels. Oil Price Levels – rapid commodity price deflation as exhibited in the oil market creates a warning sign on what should be a positive for U.S. consumers. All these metrics became progressively stronger headwinds as the stock market pushed to higher and higher all-time highs during the first half of 2015. The stock market relative to GDP (DOW:GDP) has been expensive for over a year, and is now in progress of rolling-over. There is bound to be a significant correction (likely an outright crash) sooner than later, and it may have already begun.
The fact that Apple (AAPL), the bell weather in the current tech driven bull market, suddenly lost its appeal in the market and recently entered correction territory was a good anecdotal signal that the overall market was entering a correction phase. The recent market pull-back has left the metric in caution territory, but since the momentum in stock price growth is now negative, risk is still high for further declines. Up until now, there’s been little sense in buying government bonds, or putting your money in a bank CD (which seems positively old fashioned at this point) when the stock market has continued an upward ascent.
As historian Gabriel Kolko observed in 1988, The notion of an honest puppet is a contradiction Washington has failed to resolve anywhere in the world since 1945.” What follows is a brief A to Z guide to the history of that failure. Fully one-third of the companies in the Russell 2000 stock index do not earn any profits , the highest percentage in a non-recessionary period, notes Francis Gannon, co-chief investment officer at Royce Funds. Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the Doom also trades currencies and commodity futures like Gold and Oil.
Doctor Doom also trades currencies and commodity futures like Gold Natural Gas and Crude his harshest critics must admit that he’s been unerringly correct in his market forecasts over the past three decades Marc Faber is a Swiss was born in Zurich, Switzerland. I can recall during the tech sector boom that many analysts suggested that the concept of price-to-earnings was no longer applicable to stock valuations, particularly since many tech sector companies had almost no earnings and extremely high valuations.