In a recent interview, Dr. Marc Faber, the author and publisher of the Gloom Boom and Doom report, talked about his near-term gloomy outlook for equities. This article discusses his views and lays down further reasons to remain cautious on equities in the near-term.

According to Faber -

What was the trigger of the '87 crash when markets fell 21 per cent in one day? What was the trigger of the Nasdaq crash in 2000? What was the trigger of Japanese crash of 1989? What was trigger of 2007 crash that brought global stocks down 50 per cent? We don't know these things ahead of time, but something will always move markets up and something will always move them down. I would guess at the present time, given markets from the 2009 lows have in many cases increased by as much as 100 per cent, that they are

The adjusted monetary base, which is an indicator of expansionary or restrictive policies, topped $3 trillion as of May 2013. The U.S. monetary base has grown by $2.2 trillion since the crisis started as policymakers expand the Fed's balance sheet in order to bail out banks and also to keep bond yields relatively suppressed through the bond purchase program. This article discusses the monetary base trend, the inflation trend and investment ideas considering the current scenario.

As the chart below shows, the adjusted monetary base has surged since 2008 and there has been a renewed surge in the monetary base in the last few months.

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With the policymakers aggressively expanding the balance sheet, it is very likely that inflation concerns will be high. On the contrary, deflation concerns are high and the policymakers are still struggling to meet the FOMC target of 2% inflation.

The chart below

After trailing the broader markets for most of the year, energy sector stocks and exchange traded funds are finally leading the charge.

Energy Select Sector SPDR Fund (XLE) has been outperforming the S&P 500 since mid-April.

The energy sector shows attractive valuations, with component holdings in the XLE at a price-to-earnings ratio of 12.45, compared to the 16.4 P/E of SPY.

The energy sector was the second-best performing sector, slightly behind technology stocks, last week as the strengthening oil market and better jobs report help push the S&P 500 to record highs.

"The oil market has broken out and the jobs report is the biggest catalyst," said Jeff Grossman, president of BRG Brokerage and a New York Mercantile Exchange floor trader, said in a Bloomberg article. "The stock market is strong and everything is going higher."

"People had been a bit nervous about oil demand and economic

What the "tree huggers" don't realize, says 321energy.com founder Bob Moriarty, is that "the BMWs they drive to anti-Keystone protests need fuel." But the pipeline supporters who expect that fuel to come from American sources are just as delusional, Moriarty asserts in his scathing interview with The Energy Report. That's why he's looking beyond North America for lucrative oil plays. Find out which international producers may be ideally positioned to supply an energy-hungry U.S., and why Moriarty believes oil should be taxed "to the limit."

The Energy Report: In September 2012, you described $100/barrel [bbl] as the new normal. What market factors are behind today's price of $93/bbl?

Bob Moriarty: If the new normal is $100/bbl in any given market, the price should be as high as $115/bbl and as low as $85/bbl. The price will continue to swing around that. Even with the Bakken

Last week, Yahoo Finance published an article - "The Economic Argument Is over - and Paul Krugman Won."

In this article, I will discuss some important reasons for believing that the stimulus vs. austerity debate, which sparked off after the financial crisis of 2007, is far from over. It's just too early to declare that Krugman, who batted for aggressive government stimulus, has won the battle. More importantly, the parameters used to judge the victory need to be looked at again and investigated at a deeper level.

Just as an example, the civilian unemployment rate has declined to 7.6% in March 2013 from a peak of 10% in October 2009. The improvement seems significant when analyzed on a standalone basis. When combined with other facts, the real picture is evident. The U6 rate, which includes marginally attached workers and part-time employed workers for economic reasons, still remains uncomfortably high at

Deleveraging has been in discussion ever since the financial crisis of 2008-09. I have read numerous commentaries on the painful and long process of deleveraging, which is assumed to be underway. In this article, I will discuss the reasons for believing that the real deleveraging is yet to start.

To put things into perspective, the chart below gives the total credit market debt owed in the US. The total credit market debt has surged from $47 trillion at the beginning of 2007 to $56 trillion in the fourth quarter of 2012. On a consolidated basis, there has been significant leveraging instead of deleveraging. Also, if excessive debt was one of the primary reasons for the current crisis, we are headed for a bigger crisis in the future.

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A break-up of the total debt outstanding in the US might give a better picture of the sectors that have

The monetary base is one of the best indicators of an accommodative or restrictive monetary policy. This article discusses the U.S. monetary base trend and its impact on real economic activity.

Before I discuss the monetary base trend, it is important to note that the central bank determines the monetary base (total reserves plus currency). However, it is the commercial banks that decide the extent to which an increase in the monetary base changes the quantity of bank loans and the broader monetary aggregates (M2 or M3). In other words, a central bank's push for an expansionary monetary policy can be offset by a conservative approach taken by commercial banks. A clear conclusion is that a central bank's zero interest rate policy to spur lending and hence economic growth becomes futile if commercial banks adopt a conservative approach to prevent losses.

I started with this explanation because the current scenario

In the current economic and financial environment, equity market movement is primarily a function of liquidity and fundamentals. I mention liquidity as the first factor as the current rally in the market is more a function of liquidity than fundamentals. This article discusses the fundamental factor of S&P 500 earnings and the reasons for believing that earnings have peaked out for the medium term.

The charts below (data from S&P 500) gives the numbers for operating earnings per share and as reported earnings per share for the S&P 500 index until the fourth quarter of 2012.

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The operating earnings per share for the S&P 500 peaked out in the second quarter of 2012. The next two quarters have witnessed a 9% decline in the operating EPS. The as reported earnings per share also peaked out in the first quarter of 2012 with the

Marc Faber has voiced his concern on serious asset deflation in his widely read Monthly Market Commentary. According to the summary of his March 2013 report -

I worry about the time when the current asset inflation will give way to a serious asset deflation, which will inevitably happen sometime in the future. As an observer of markets I am, therefore, concerned that the decline in gold prices could be telling us that we are about to enter a period of asset deflation.

I should like to make two points very clear. I am not sure when the asset deflation will start. Most likely, different asset classes will deflate at different times and with different intensity. The second point I wanted to make is the following. In a deflationary environment (whenever it will happen), financial assets (stocks, government and corporate bonds especially high yield bonds) would likely be the

The Vanguard Energy ETF (VDE) is given a four star rating from investment research company Morningstar. The ETF gives investors exposure to mega-cap energy giants such as Exxon Mobile (XOM) and Chevron (CVX), at a rock bottom price.

"Over the years, the diversification benefits seem to have been eroding. Over the past five years, VDE has been 79% correlated with the S&P 500. However, over the past three years its correlation has jumped to 90%. Still, the fund remains an effective tool for investors seeking to overweight the energy sector within a broadly diversified portfolio," John Gabriel wrote for Morningstar.

The exposure to the oil giants through VDE is cost effective for those investors who do not want to choose individual stocks. XOM still makes up around 21% of the portfolio and pays a 2.5% dividend, reports Matt DiLallo for The Motley Fool. Chevron makes up around

By The ETF Professor, Benzinga Staff Writer

A prominent theme among ETF industry observers from 2012 has, unfortunately, remained in play in 2013. That theme is the ongoing attacks on, criticism of and fear-mongering pertaining to ETFs with small assets under management tallies and low average daily volume.

Incorrect interpretations of ETF liquidity have started to border on dangerous. For example, one noted commentator recently said he prefers the iShares MSCI Japan Index Fund (EWJ) over the WisdomTree Japan Hedged Equity Fund (DXJ).

As has been noted, that deeply flawed logic has proven costly.

DXJ itself is large with over $3.6 billion in AUM, and robustly traded with average daily turnover north of 1.9 million shares. In other words, it is not the type of ETF experts would tell investors to stay away from on the basis of size.

Still, just as some banks are "too big

The Energy Sector is in the Danger Zone this week due to the poor management and holdings of ETFs and mutual funds in the sector.

Investors who want exposure to this sector should buy a basket of attractive-or-better rated stocks and avoid paying undeserved fees. Here are my top 20 Energy stocks, all of which get an Attractive-or-better rating.

12 out of 20 ETFs and 51 out of 73 mutual funds get a dangerous-or-worse rating. Not a single Energy Sector ETF or mutual fund allocates enough value to Attractive-or-better rated stocks to earn an Attractive rating.

It is not as if there are no good stocks for Energy Sector funds to choose from. The Energy Sector ranks fifth out of ten sectors in our sector rankings report. Sectors such as Financials, Consumer Discretionary, or Utilities are all ranked lower. Out of the 275 stocks in the

Dr. Marc Faber, editor and publisher of the Gloom Boom Doom report is well known for his market timing and for staying ahead of the curve. His credentials include the prediction of the 1987 crash and the call on the financial crisis of 2007. This article discusses Dr. Faber's market outlook and my opinion on the same.

In a recent interview, Dr. Marc Faber pointed towards a 10% correction in global equities. According to Dr. Faber -

We could easily see 10% correction. We have seen over 30% correction in Apple (AAPL). So it is a reminder that stocks move up and they can also move down. My scenario for 2013 is either the market will make a peak relatively soon which will not be exceeded or we have a correction of a month or two and then another strong rally into August, such as we had in

The Energy sector ranks fifth out of the ten sectors as detailed in my Sector Rankings for ETFs and Mutual Funds report. It gets my Neutral rating, which is based on aggregation of ratings of 20 ETFs and 73 mutual funds in the Energy sector as of January 25th, 2013. Prior reports on the best & worst ETFs and mutual funds in every sector and style are here.

Figures 1 and 2 show the five best and worst-rated ETFs and mutual funds in the sector. Not all Energy sector ETFs and mutual funds are created the same. The number of holdings varies widely (from 23 to 167), which creates drastically different investment implications and ratings. The best ETFs and mutual funds allocate more value to Attractive-or-better-rated stocks than the worst ETFs and mutual funds, which allocate too much value to Neutral-or-worse-rated stocks.

To identify the best and

The price of West Texas Intermediate crude oil averaged $94 per barrel in 2012 and was essentially unchanged from the 2011 average level of $95. This article looks into the expected trend for crude oil in 2013 and discusses the reasons why crude might sustain at higher levels throughout 2013.

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In general, crude oil prices are a function of demand and supply, currency fluctuation, geopolitical tensions and economic activity (which relates to demand and supply). I would therefore be discussing these aspects to conclude on the probable trend for crude in 2013.

In terms of global demand, the outlook looks favourable with demand expected to increase in all emerging economies. The important thing to point out here is that demand for oil grew in India and China in 2012 amidst a slowdown in both the countries. With significantly low per capita consumption in emerging markets, demand will

This article discusses the trend of gold and Dow Jones in the last 15 months in order to underscore the importance of portfolio diversification. Further, the near-term expected trend for equity markets and the precious metal is discussed.

Amid a long-term secular bull-market, gold peaked out (in the near-term) in September 2011 at $1,895 an ounce. Since then, gold has moved sideways and downwards while equities have trended higher. As a result, equities have outperformed gold in the last 15 months. On converting this observation in numerical terms, golh ratio from September 2011 to February 2013.

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As mentioned earlier, the primary objective of this discussion is to underscore the importance of portfolio diversification. I am bullish on gold for long-term and I have explained the rationale for the same in one of my earlier articles. However, if my bullish view converted to 100% exposure to gold,

During the current commodity supercycle, there have been occasions -- too many to count -- when investor psyche has been damaged by reports about slowing U.S. growth, a hard landing in China, or a debt crisis in Europe. Yet just behind the gloom, significant and positive trends are taking hold, causing the storms to start dissipating.

I often say that government policies are precursors to change, which is why we follow the monetary and fiscal actions closely as they can have a significant impact on asset prices. You have to go back about 16 months, when Brazil kicked off the latest global easing cycle by cutting interest rates by 50 basis points. Since then, many developing countries such as the Philippines, China, and Colombia -- as well as developed nations of Japan, the European Central Bank, the U.S., and the U.K. -- have joined forces in a world-wide synchronized stimulation

Knowing the broad market had a strong move this week, what are the Bullish Percent Indicators showing for other indexes and sectors of the market. Are there any buying opportunities remaining or is this a time to prune holdings and build cash?

BPI of Indexes: Every major index tracked in the following table gained numerical ground this past week. In every case the offensive team has the ball as indicated by the X's in the right-hand side of the table. Of concern is the overbought condition of every index with exception of the NASDAQ.

An overbought condition is when the Bullish Percent Indicator is above the 70% mark. This week we have four indexes above the 80% line so it is difficult to conclude anything other than this is a very high market.

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Sector Bullish Percent Indicators: Drilling down into individual sectors we see a