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Faber: Prepare for a Massive Market Meltdown - (finance.yahoo.com) The markets are going to go
into meltdown soon so expect stocks to lose 20 percent of their value, Marc
Faber, author of the Gloom, Boom and Doom report told CNBC on Tuesday. "I
don't think markets are going down because of Greece, I don't think markets are
going down because of the "fiscal cliff" - because
there won't be a "fiscal cliff," Faber told CNBC's "Squawk
Box." (Read More Below Video.) "The market is going down because
corporate profits will begin to disappoint, the global economy will hardly grow
next year or even contract, and that is the reason why stocks, from the highs
of September of 1,470 on the S&P, will drop at least 20 percent, in my
view." Faber, who is known for his bearish views, cited tech giant Apple (AAPL),
a company whose disappointing earnings have caused its stock to fall 20 percent from
its September highs and 14 percent in the past month. A series of poor
quarterly earnings from corporate giants such as Amazon (AMZN),
McDonalds (MCD)
and Google (GOOG) have hurt investor sentiment in recent weeks.
S&P
and Fitch accused of market manipulation in Italy - (www.telegraph.co.uk) Italian prosecutors have
filed charges against Deven Sharma, the former president of Standard &
Poor’s, and six other credit rating officials for issuing downgrades that
destablised the country and fuelled the debt crisis. Prosecutor Michele
Ruggiero has asked a court in Trani, Italy to indict five S&P employees and
two from Fitch Ratings for market manipulation, in a move that could trigger a
raft of similar claims against rating setters around the world. Mr Ruggiero,
who has pursued the agencies since they placed Italy on negative watch last
summer, accused them of “aggravated and continuous…market abuse”. He claimed
they leaked “biased and distorted information” about Italy’s financial
stability to traders. In a statement, he said the rating agencies had tried to
“destabilise Italy’s image, prestige and credit confidence on the financial
markets, alter the value of Italian bonds by depreciating them [and] weaken the
euro”.
Spanish Yields Climb to Six-Week High as IMF, Europe Disagree
- (www.bloomberg.com) Spanish 10-year bonds rose, pushing down yields
from the highest in more than six weeks, after German Finance Minister Wolfgang
Schaeuble signaled Greek aid payments may be bundled into a
single installment. Germany’s 10-year bonds erased a gain after Bild-Zeitung
earlier reported that the nation favored giving Greece a
one-off disbursement of 44 billion euros ($55.8 billion). European policy
makers extended by two years the Mediterranean country’s deadline to reduce its budget
deficit, though they didn’t say how the additional funding needs
would be covered. The yields on Austrian and Belgian securities slid to records
and French bonds climbed for a ninth day, the longest winning streak since
1997. “The headlines on Schaeuble” have boosted Spanish and Italian bonds, said Marc
Ostwald, a rates strategist at Monument Securities Ltd. in London.
“He’s saying all that is left to discuss is process rather than principal. That
gives markets a bit of reassurance.”
Carry Trades Lose Most Since ’11 as HSBC Gauge Warns:
Currencies - (www.bloomberg.com) The foreign-exchange market
is signaling more pain ahead for currencies that benefit from a sustained
global recovery, five years after the onset of the worst financial crisis since
the Great Depression. HSBC Holdings Plc’s Global Hazard Indicator, which
combines implied volatility readings in options for the dollar, euro and yen,
shows wider price swings in currencies over the next year than in the coming
three months. If history is any guide, that means the dollar and yen will
strengthen and higher-yielding, higher-risk currencies such as the Brazilian
real and South African rand will depreciate.
EU-IMF feud erupts over Greek debt - (www.financialtimes.com) Eurozone finance ministers
last night postponed agreement on Greece's long-delayed €31.3bn aid payment for
yet another week as divisions between the International Monetary Fund and EU
creditors over how fast Athens must reduce its burgeoning debt levels burst
into the open. Christine Lagarde, the IMF chief, and Jean-Claude Juncker, chair
of the eurogroup of finance ministers, publicly sparred over whether Greece
must reduce its debt levels to 120 per cent of economic output by 2020, long
viewed the target to get Athens back to a sustainable debt level. An agreement
between the IMF and eurozone governments is essential to releasing the bailout
tranche since both creditors disburse financial assistance concurrently. In a
rare breach, Mr Juncker told a post-meeting press conference the target would
be moved to 2022, prompting Ms Lagarde to insist the IMF was sticking to the
original timeline. When Mr Juncker again insisted it would be moved --
"I'm not joking," he said -- Ms Lagarde appeared exasperated, rolling
her eyes and shaking her head.
What the earnings numbers from corporate America are telling us
about the economy - (www.washingtonpost.com)
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