Wednesday, November 8, 2017

MARC FABER - Its About Power & Money. The Bubbles Will All End Badly

late 2016, just 37% of Americans had enough savings to pay for a $500 or $1,000 emergency. The other 63% would have to resort to measures like cutting back spending in other areas (23%), charging to a credit card (15%) or borrowing funds from friends and family (15%) in order to meet the cost of the unexpected event (most recent statistics seem to indicate that currently 41% of Americans had enough savings to pay for a $500 or $1,000 emergency).
Then, a few weeks ago, I read about how Hurricane Maria had transformed Puerto Rico into a “Cash Only” economy. According to Zero Hedge, “Electricity, internet access and cell phone service have been offline in parts of Puerto Rico for a whole week."
Aside from the fact that it may not be a bad idea to raise now some cash and reduce the exposure to asset markets, I urge my readers never to leave home without some cash.
Emergencies do happen, and ATM do not always work. In less developed villages of emerging economies there may not even be ATMs, and credit cards may not be accepted.
Finally, there is an human aspect. People all over the world, especially in poor countries will always appreciate a small tip as a reward for their services. I find it difficult to accept that some people can tip generously a head waiter they know at their regular dining place in order to get a nice table, but cannot even part with one dollar for poor people who service them in emerging economies. claims that he's responsible for the record-setting stock market, and finds that the S&P 500 rose
In the Fidelity Insight of the week, Silverstein looks at Alibaba, which briefly overtook Amazon as the biggest company in the world, on a market cap basis. She calls back to Blodget's interview from a few months ago with portfolio manager Bill Kennedy, in which he said Alibaba is leapfrogging many brick-and-mortar retailers and taking advantage of the huge untapped growth potential in China.
The discussion then shifts to bitcoin, which has seen mixed public comments from influential people lately. Blodget reiterates his long-standing view that bitcoin is the perfect example of a speculative bubble, because there's no plausible argument for how to value it. Silverstein mentions the future use of blockchain perhaps attracting a valuation, and says that bitcoin can be compared to gold.
Silverstein interviews Scott Galloway, a marketing professor at NYU and author of the new book "The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google." Bank Banking Money Wealth Economy U.S. "United States" USA America Europe People World "Savings Account" income Asia Interest Gold Silver Bitcoin Author 2017 2018 Future Leader Leadership Investment Popular System history historic "free trade" trade West millionaire billionaire prosperity city debt loan "stock market" "bull market" credit "interest rate" bubble cryptocurrency forex "forex trading" bonds gerald celente jim rogers Galloway says that the four have disarticulated who we are as people and reformulated that as for-profit companies. Speaking about Amazon, he says that whenever the company is bumping up against the other three juggernauts, it's winning. He cites how Alexa is beating Siri, and mentions the company's torrid pace of growth. Galloway thinks that Amazon's core confidence is storytelling, and mentions Amazon having access to the cheapest cost of capital in history — which allows them to overwhelm the competition with brute force.

Galloway says that he doesn't understand Alibaba, which has some of the worst corporate governance in the world. Silverstein asks him about Tesla, and Galloway marvels at the market cap discrepancy between Ford and Tesla, saying that the company has painted an unbelievable vision, and that people are investing in the future, not anything tangible at the moment. He calls it incredible storytelling, and marvels at how the company has been able to overpromise and under-deliver, all because the vision is so intoxicating.

Galloway cites Uber as the best example for how poor corporate governance can destroy market value. He estimates that the board's tolerance and excuses for bad behavior probably took Uber's valuation down $20 billion to $30 billion. He also thinks that WeWork is massively overvalued, although he concedes that it's a great company. Galloway then highlights Snap and Twitter as also being overvalued.

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.

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