http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6vr3uRGjrvw
Stocks, Real Estate and Oil Are Overvalued, Marc Faber Says
By Carol Massar and Alexis Xydias
June 9 (Bloomberg) -- Stocks, property and commodities are overvalued as an economic slowdown and inflation will curb earnings growth and erode the value of assets, investor Marc Faber said.
Oil may have peaked after a 43 percent increase this year, said Faber, the Gloom, Boom & Doom report publisher, in a Bloomberg Television interview today. He said he favors the dollar against the euro, as well as gold.
``I don't see any compelling value in equities, real estate or commodities,'' Faber said from Zurich. ``Contrary to the last 25 years, we are in a period of de-leveraging. Corporate profits in particular are still far too high for 2009 and have to be adjusted downwards, and valuations become less compelling.''
Stock indexes in the U.S. and Europe have tumbled this year as banks piled up $390 billion in losses from credit investments, house prices fell, and investors braced for the possibility of a U.S. economic recession. The Standard & Poor's 500 Index in the U.S. is down 7.3 percent in 2008, while the Dow Jones Stoxx 600 Index in Europe has dropped 15 percent.
Crude oil futures in New York rose $10.75, or 8.4 percent, to an all-time high of $138.54 a barrel on June 6. That was the biggest-ever gain in dollar terms and the largest on a percentage basis since June 1996.
The U.S. Federal Reserve is paving the way for inflation to pick up by slashing interest rates since September, while undermining any strength in the dollar, Faber said.
The Fed's policy ``inevitably is inflationary,'' the investor said. ``Their economic knowledge is extremely limited. They confuse the issues.''
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To contact the reporters on this story: Carol Massar in New York at cmassar@bloomberg.net; Alexis Xydias in London at axydias@bloomberg.net.
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