Wednesday, October 12, 2016
Marc Faber on Deutsche Bank Problems
Q: There are problems emerging for one of the biggest banks in one of Europe’s strongest economies. How are you reading the situation in Deutsche Bank?
Marc Faber : The crisis in 2007-08 occurred because we had excessive credit growth and because banks in Europe and of course in the U.S. changed their very nature – from being essentially institutions that accept deposits and then make loans to people, into big institutions that gamble with clients’ money. And so the first problem occurred with Bear Stearns and then Lehman Brothers in the U.S. and then AIG, and that was then bailed out. But the bailout did not lead to cleaning-up of the system. The banks were allowed to continue to gamble with their capital. And now with zero interest rates and with more leverage than in 2007 in the banking system and in total debt as a percentage of GDP, now there is a problem with Deutsche Bank. I suppose the bank is basically bankrupt. But the government will not let it go bankrupt. They will engineer some kind of a bailout. Either the government can ask the private sector to help Deutsche Bank or the government can help Deutsche Bank. But it is not that the bank will disappear. But I think what will happen over the time is that these banks like Deutsche Bank, Credit Suisse, UBS , JPMorgan, Citi will not be allowed to gamble in all kinds of speculative markets - whether it’s equities, swaps, currencies. So I think that in general we’ll move over time to sound the financial system. But it is not going to happen overnight, it will take a lot of time. -- in BloombergQuint
Marc Faber is an international investor known for his uncanny predictions of the stock market and futures markets around the world.Dr. Doom also trades currencies and commodity futures like Gold and Oil.
Dr. Marc Faber Tomorrow's Gold
Dr. Marc Faber author of the Gloom, Boom and Doom report is a world class Investor, Doctor Faber 's typically controversial and contrarian views have earned him the label of Dr. Doom. Doctor Doom also trades currencies and commodity futures like Gold Natural Gas and Crude Oil.Even his harshest critics must admit that he's been unerringly correct in his market forecasts over the past three decades . Marc Faber is a Swiss investor.He was born in Zurich, Switzerland. He went to school in Geneva and Zurich and finished high school with the Matura. He studied Economics at the University of Zurich and, at the age of 24, obtained a PhD in Economics magna cum laude. Between 1970 and 1978, Dr Faber worked for White Weld & Company Limited in New York, Zurich and Hong Kong. Since 1973, he has lived in Hong Kong. From 1978 to February 1990, he was the Managing Director of Drexel Burnham Lambert (HK) Ltd. In June 1990, he set up his own business, which acts as an investment advisor and fund manager. Faber is publisher of the Gloom Boom & Doom Report newsletter and is the director of Marc Faber Ltd which acts as an investment advisor and fund manager.