Today's economy is largely manipulated by central banks which use interest rates to create artificial liquidity, Barron's Roundtable participant Marc Faber says. U.S. corporate earnings are destined to disappoint. Faber also notes that net of the energy sector, the S&P's P/E ratio is an overvalued 20, not 15. Trades he likes:
Short DryShips (DRYS) - tanker rates have plunged, while dry shippers have not.iShares MSCI Japan Small Cap (SCJ) - Faber notes Japan has fallen out of favor with investors despite the fact that its valuations are very low compared to Japanese bond yields. He says to wait for a 10% correction, then buy.
Currency trades - short the pound vs. the yen [Editor: sell FXB, buy FXY]. Short the euro vs. the yen [Editor: sell FXE, buy FXY].
Short emerging markets - by buying ProShares Short MSCI Emerging Markets (EUM), shorting iShares Trust FTSE-Xinhua China 25 Index Fund (FXI), and buying ProShares UltraShort FTSE/Xinhua China 25 (FXP).
