Marc Faber:15% fall coming and more shit ahead
The Standard & Poor’s 500 Index may drop as much as 15 percent in the next six months as global equity markets extend their decline, according to Marc Faber, publisher of the Gloom Boom & Doom report.
Faber predicted at the beginning of March a 20 percent decrease if the index reached a new high. The S&P 500 has tumbled 11 percent since reaching 1,217.28 on April 23, the strongest level since the days after the September 2008 bankruptcy of Lehman Brothers Holdings Inc. Faber advised investors to buy U.S. stocks on March 9, 2009, when the index reached its lowest level since 1996.
“The market became very overbought in mid-April,” Faber said in a Bloomberg Radio interview today with Tom Keene. “The S&P could still decline by another 10 percent, maybe 15 percent.”
The S&P 500 dropped 4.2 percent last week as Europe’s sovereign-debt turmoil spread. The crisis has served as a “reminder” that Western nations have liabilities too big for their economies, according to Faber.
“Either taxes will have to go up, or expenditures will have to go down, or a combination thereof, which then will not be particularly favorable for economic growth,” Faber said.
[REad More at Bloomberg Businessweek >>]
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