With credit markets beginning to creak, market internals flailing, and numerous sectors and individual stocks in a state of correction or bear market, it appears Marc Faber's calls for a big correction in stocks is more right than wrong but the algo-driven exuberance in indices maintains the illusion a little longer (even as the number of leading stocks drops). However, with redemptions increasing in credit, and costs of funding rising, perhaps Faber's insights in the following interview with a radiant Trish Regan are about to be realized. "By printing money, [The Fed] has delayed the cleaning process," as mal-invested capital (and self-referential buybacks) have sustained (and even encouraged) the worst quality companies. As corporate defaults pick up (and The Fed's free money dries up), perhaps that cleaning process will be allowed into the free-market producing "the big sell-off" Faber sees in the Fall.

Faber warns:

"I think the s&p will close down on the year. The bull market is more than five years old. By any standard, this is a very old bull market. It is a weak recovery, a lengthy recovery, and by printing money, they have delayed the cleaning process. But I believe asset prices are unattractive."





Let's see how 'dirty' everyone gets after this wall of maturing debt is hit...

As Paul Singer previously noted on The Endgame:

[The Fed] has been administering painkillers and artificial respiration instead of telling the President and Congress to take intelligent action to improve economic growth. As we have said over and over: Leadership is wanting; leadership is needed. If QE loses effectiveness now and the plug is pulled, the economic consequences could be disastrous, because the Fed didn’t force the President and Congress to adopt progrowth policies when it had the chance. At the same time, if the current course is maintained, the ultimate results are likely to be much worse. ... At some stage, central banks inevitably realize, regardless of whether they admit the catastrophic nature of their own failings, that the cessation of money-printing will cause an instant depression. Even though at that point the cessation of money-printing may be the only action capable of saving society, that becomes a secondary consideration compared to the desire to avoid immediate pain and blame. The world’s central banks are in very deep with QE at present, and the risks continue to build with every new purchase of stocks and bonds with newly-printed money.

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And here is Trish Regan...

You're welcome.