There was already a Bear Market Beneath The Surface of The Stock Market in The US for a long time

Marc Faber, editor and publisher of “The Gloom, Boom & Doom" report, says the Chinese economy is growing at a much slower pace, closer to 2-4 percent, that's what its government is indicating.
Jan 23, 2016, 01.19 PM | Source: CNBC-TV18 CNBC Money Control


There was already a Bear Market Beneath The Surface of The Stock Market in The US for a long time

Q: How do you read the picture right now? You are bearish on China and I don’t think that 6.9 percent gross domestic product (GDP) number is something that you were in agreement with, now we have central banks hinting at some kind of action, there are experts talking about action in Japan and of course in the ECB, how do you read this fall that we have seen so far in January and just the overall set up?

Marc Faber : Basically the market in the US began to decline a long time ago if you look at the average stocks in the US. It is down over the last 12 months by 26 percent from their highs, the average stock but the indices held up very well until the end of December because the indices do not reflect what is happening in the market. For example, you have an index, you have 500 stocks, if three stocks are very strong, they can push up the index while 497 stocks go down. So we have to look at the market beneath the surface and beneath the surface there was already a bear market in the US for a long time, for a year or more but there are some stocks and maybe another 20 shares such as Facebook, Amazon, Google that were driving and keeping the index up. The interventions by the Central Banks have a numerous unintended consequences - they lead to rise in stock prices. But for many people, this is not favourable because particularly in real estate, the affordability becomes an issue, they don’t have the money to buy expensive homes and so the home ownership rate in the US has been way down.

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Marc Faber: Dont Listen to the Davos People

Marc Faber :  Basically the Chinese economy is much weaker than the government is telling you. Economy at the present time is growing at maximum 2-4 percent. In general, we have a colossal credit bubble in China and this credit bubble has to be deflated one way or the other. India in this respect is in a better position because we don’t have that kind of a credit bubble. We also have some excessive credit in some sectors of the economy but not to the extent China has. In my view, the Chinese economy -- you just have to look at imports and the exports from Taiwan, from South Korea, these are relatively reliable statistics. Then you look at the Baltic dry index and freight cost in China and electricity consumption and everything points out that the economy is not growing at 6.9 percent. This is complete nonsense but of course it is published by the government. So I am telling you, don’t listen to the Davos people.  read more here