Marc Faber, The Gloom, Boom & Doom Report says it’s time to short stocks as the Fed “has lost control” of the bond market and stocks have become overbought. Faber explains why he is looking at a gold play in mining stocks and Treasury Notes. And a trade on the housing sector and the S&P 500, with CNBC’s Jackie DeAngelis and the Futures Now Traders, Jim Iuorio at the CME and Anthony Grisanti from the Nymex. The perma-bear also is predicting (again) that stocks will drop.
Marc Faber video interview clips and transcript below
and europe has been better, look what’s going on with european banks today the all of a sudden, a lot of the big names up. aunds it looks like some of the winners in the u.s. are being sold to buy some european companies. we’ve seen inflows into european etfs. i know we’re waiting for a bottom in europe, but there’s some money being committed here. i think that’s the story. we see the effect of china, positive expos data on the overall group. materials are on the up side, and take a look at what it’s doing with commodities countries, again all because of china. copper aluminum, zinc, nickel, terrible numbers for days and months now, and here’s commodity country, sue. australia, brazil, these are all exchange-traded funds. you can buy them. they’re all with the wind at their back as a result of the positive — between 1% and 3%. good news on china, hopes of europe bottoming, and some better numbers on europe. i think it’s shifting a bit of money around. ben, come on into the picture. tyler asked the question at the beginning of the hour. are you better off buys stocks, or do you try to catch that falling knife? you’re with us. also hugh johnson will join us from albany as you know, hugh is basically the chairman of ciof hugh benson advisers. it depends on what kind of investor you are. obviously. a trader would approach the market differently. as a trader, are you better off trying to catch the falling knife? or do you wait until you think you see a bottom and wait until the market turns? as a trader my instinct is to sell when the market is rising. i know sooner or later it will pull back. that’s been a pain ffl trade. the pullbacks have been very short-lived and shallow. as a long-term investor, i continue to say, if you’re an investor, you want to buy things when you go on sale, not when you’re going up. you do the same thing the rest of your life. why would you change when you’re invest if you followed that thought process four or five years ago and bought the major banks or the home builders, you have a veryfully portfolio right now. not cheap, though. that’s the problem. that is the problem. so, hugh, weigh in on this. you tend to take the longer view of things, but it is tempting when you see prices get cheaper and cheaper. that doesn’t mean they aren’t going to continue to decline. well, that’s the whole problem, sue. you do want to buy things when they represent really good value. right now we need things to get cheaper, whether we’re talking about the whole market or whether we’re talking about individual stocks, but that’s not enough. you mentioned the right point, and that is when they get cheap, as we found out in 2007, going into the financial crisis, they can get cheap, but they can get cheaper. what you want is both. you want stocks getting the levels to represent good value, and then after they represent good value, you want them to start to post good relative performance orerformance relative to the s&p 500, when you get that positive momentum or positive performance of cheap stocks, you have the right combination, you should insist on both parts of this equation. are you anticipating a pullback, hugh? everybody’s been waiting for a pullback. maybe there will be in august. this is traditionally a crumby month. exactly. we had three days in a row. do you think there will be a significant pullback, hugh? you know, i don’t know whether to say i anticip a pullback or i’m crossing my fingers and hoping for a pullback. my guess is, based on my crunching of the numbers, we’re about 1.5 to 2% overvalued. common sense, plus that number crunching, common sense, of course suggesting we’ve come very far, very fast, suggests that we should at least guess some kind of decline. i’m hoping for 5% or 6%, for the important purpose of getting things to a level that represent muchr value, otherwise i’m not going to buy. hopefully then we start to see better performance. you can also buy protection. that’s one way to play it. that’s where the etfs are an important role, whether they’re a sophisticated trader, etfs are a great model for protecting, because you can buy the bearish side of the equation, the negative etfs, if you will, rather than buying puts that have a whole different pricing structure. that’s another reason why the vix doesn’t trade the way it used to. and you can hedge the etfs. listen to the tone here. it’s we’re wait fog it to drop a bit, so we can buy it cheaper. if that’s not a floor under the market, i don’t know what is. we’ll leave it there. gentlemen. good to see you, hugh, bob, i’ll see you in a bit. ty up to you. tesla is soaring. the electric car company knocking its quarterly earnings out of the market. look at tesla shares today alone. life is good for tesla’s ceo elon musk. well, i’m glass that bmw is bringing an electric car to market. that’s cool. i think there’s room to improve, and i hope that they do. my comments about the manufacturers — sorry — a little giddy there, you know? tesla up a whop 350% in 2013. that’s why barclays downgraded the stock to equal rate while raising the price target. groupon also surging as it continues its recovery, having the best day since the ipo, the company reporting a record quarter for its north america business on a better than expected 7% jump in revenue. it named cofounder eric lefkofsky, and announced — the stock is up about 125, 126%. fannie mae bringing in — the government-controlled mortgage giant has earned a profit six straight quarters. da olick is live on the real debate in washington. diane that? reporter: well, that’s right. that net income is nearly twice the income earned in q2 of last year. as you said the company’s sixth consecutive quarterly profit. the mortgage giant, which along with freddie mac, now backed nearly two thirds of all new loans, reported a positive net worth of $13.2 billion as of june 30th and will may taxpayers as a different on the senior preferred stock. treasury performed some of that is stock to keep the company afloat, and after the september dividend payment, fannie mae will have paid approximately 105 billion, trim mayopolis said we pect or revenues to be stable and earnings to be strong over the next few years. it was driven by continued stable revenues and boosted by a significant increase in home prices in the quarter that resulted in a reduction in the company’s loss reserves. earlier this week president obama traveled to phoenix to make a strong pitch to dismantle fannie mae and freddie mac and bring private capital back to the mortgage market. fannie mae’s ceo says that profitability should not slow the appropriate debate. loan offers are still high, but the higher home prices are helping to offset that. fannie mae stock, which is really worthless, continues to trade on speculation to what will happen to the future of the gses. back to you. she also managed to look good even in humid washington. is hilton about to come back into the new york stock exchange? we’ll talk about that. there’s brand-new crash test video. raight ahead. stay tuned to power lunch. we’re back in two. ?? ?? i’ve found software that intrigues me. it appears it’s an agent of good. ?? ?? ge software connects patients to nurses to the right machines while dramatically reducing waiting time. now a waiting room is just a room. in the cars that perform poorly, the crash test dumb juries’ head struck hard structures like the windshield pillar, the institution for highway safety found that both the two-door and four-door honda civics were the best performers, and the worst, the nissan sent ra, the kia soul and forte were the worst. they’re standing by the safety of their cars saying they would further investigate the results. this one is not a test. this is a video of a terrible bus crash in china. you see the driver. he just flew right out the window of the car. watch this. look at that. the driver was backing up. another camera angle shows passengers being tossed around. about 22 people were hurt in that terrible bus accident. sue? that is awful. i’m surprised no one was killed. all right. let’s try to switch to corp news, orbitz posting better than expected quarterly earnings as it booked more hotel and vacation packages. for for the year orbitz is up more than 300%. the blackstone group is reportedly preparing to take hilton hotels public. simon hobbs among other things is also our travel and leisure correspondent. it will be interesting. very interesting. sue, for a long time critics wondering if blackstone had bitten off more than it could chew. the timing was potentially disastrous. they offered shareholders a massive 40% premium to take the giant private in 2007. just before the financial crisis struck hard, hotel occupancy was crushed, for many owners, and hilton, which also trades under brands like doubletree, hampton and waterford astoria was left staggering. but blackstone poached chris nassetta to become the ceo. not only did it weather the storm, it boosted the number of properties by over 30%, many of them overseas, where hilton had badly lacked market share. importantly blackstone will restructure hilton’s dead for a third time before for a inly returning it to the stock market early next year. the big is what valuation can he share that this i think is fascinating. blackstone is choosing to widely brief now that hilton will return to the market just as the share prices of other industry players like marriott and starwood finally fully cut the losses they incurred through the financial crisis, returning to the same place they were on july 3rd, 2007, the date that blackstone made it big for hilton, but remember this, blackstone did so by offering a 40% premium, to where stocks were then trading. sue, back to you. it will be interesting to see if they have to restructure that debt. interest rates have moved considerably. to eps. to the advantage of the chain, now is the time that what was burdensome is less burdensome, therefore more attractive to shareholders. it will be interesting to see if they make their money back. simon, thank you very much. crime and punishment, the notorious international pink panther gang accused of stealing hundreds of millions in diamonds and jewelry. how they’re doing it, and can the cop every catch up with the robbers? 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