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Friday, August 9, 2013

Dr. Doom Warns Of Major Market Crash This Fall: “20 Percent, Maybe More”

He made the crash call ahead of the 2008 crash, and predicted the market turn-around in 2009 to the exact day on which it happened. Now Dr. Marc Faber of the Gloom, Boom and Doom Report is warning of an imminent stock market meltdown yet again. Based on analysis of current stock market prices and the overall value of stock market indexes like the S&P 500 and the Dow Jones, Faber warns that, while we are seeing near all-time highs, the valuations are nothing but conjecture. Looking at the makeup of the major indexes, it’s clear that their high values have become dependent on a small number of companies. A peak into what’s happening behind the scenes,however, shows that scores of other companies are being crushed because of weak earnings and a poor forwarding looking economic outlook. This, according to Dr. Doom, is remarkably similar to what we saw in the days and weeks leading up to the 1987 crash. It’s a recipe for disaster. [In 1987] we had a very powerful rally, but also earnings were no longer rising substantially and the market became very overbought and the final rally into August 25th occurred with a diminishing number of stock hitting 52 week highs.



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