Jim Rogers: U.S. Market Overdue for a Correction

Jim Rogers fears the worst is yet to come for the market -- but he's still optimistic, in ways that may surprise. The commodities trader and author joined "Closing Bell" to share his insights on perils and opportunities.

Rogers, who penned investment books including Hot Commodities, told CNBC's Maria Bartiromo that yesterday's "3% or so" change in the market was not a true correction: "Normally, we have a 5%, 10%, 20% correction" -- and he declares that the U.S. market is "overdue" for one.

Why? The trader pointed to weak "housing starts, auto sales," along with margin debt "at an all-time high." To those, he adds the "gigantic amounts of liquidity in the system," all signs that -- he claims -- indicate a big correction will happen in the not-too-distant future.

Rogers boasts viewpoints that many call contrarian: he says the trouble in the subprime lending segment can, in fact, damage the greater lending industry, as "80% of all subprime loans were made" in the past three or four years.

But he agrees with seasoned analysts who dispute the impact of China: Rogers said that the Asian nation's "9% drop was a signal, perhaps" of trouble to come -- but was a small factor in Tuesday's market meltdown, as too few non-Chinese are actually invested in the country.

Besides the sugar, cotton and coffee he invests in, Rogers touts utilities -- naming KKR's TXU takeover as a sign of utility vitality -- and air carriers. "I'm not thinking about selling the airlines," he said, "and if they go down, I'll buy more." He concluded on another up note: "Major economies don't change because of something that happens...on Tuesday in New York."

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  • With almost 30 years experience in business television, Bill Griffeth is co-anchor of the 3 p.m. ET hour of CNBC's "Closing Bell."

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    Kelly Evans is co-anchor of CNBC's "Closing Bell."