Uber-bear Marc Faber is at it again, reiterating his thesis that a big market correction is coming. He outlines three reasons:
The U.S. markets are destined to follow emerging markets down at some point. U.S. equities have run up over 70% in just the last two years, Faber says. "Where exactly," are further earnings gains going to come from? And with the iShares MSCI Emerging Markets ETF already losing nearly 20% of its value and bouncing, its likely that asset allocation will flow out of the top-heavy U.S. equities and back into emerging markets.
Second, the Middle East will become a "disaster." Faber thinks the region "will go up in flames because the Western imperialistic powers, they still meddle into the local affairs."
Lastly, interest rates have become a headwind rather than a tailwind. The interest rate has doubled on the 10-year Treasury note since the July 2012 low, and and that's in spite of Mr. Bernanke's maddening asset purchases since September 2012.
It's all academic however, because once the market comes around to his line of thinking, Faber thinks we'll have already lost over 20%.