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Marc Faber: Market Setting Up for ‘Serious Setback’

Tuesday, 9 Oct 2012 | 5:44 PM ET

Global markets have been weakening technically and are poised to head sharply downward, “Gloom, Boom & Doom Report” editor Marc Faber said Tuesday on CNBC.

On “Fast Money,” he stood by his call that stocks would fall 20 percent.

“Basically, I think QE3, which I think is unlimited, and bond purchases by the ECB bailout of countries have been largely discounted by the market, and the markets have been weaking technically, so I believe that we may have here quite a serious setback,” he said.

Marc Faber: Market Setting Up for 'Serious Setback'
Markets have been weakening technically on their way to a downward part, 'Gloom Boom & Doom Report' editor Marc Faber says.

Faber discounted the role of government intervention as a way to improve economic conditions.

(Read More: Marc Faber: Stocks Will Fall; Jim Rogers: China to Rise)

“We need less policies, not more policies,” he said.

“I would love to see everywhere in the world, certainly in the Western world, government expenditures and government bureaucrats cut by minimum 50 percent,” he added. “That would turn me very bullish.”

Pressed for a place to put his money, Faber looked to Asia.

“If I had to really choose something, I might go for a rebound in Chinese stocks,” he said, adding that he would play it through Shanghai .

Last week, Faber told CNBC, “I just want to have a lot of cash because I think that within the next six to nine months we can buy just about anything 20 percent lower than it is now.”

(Read More: China's Tech Sector Is ‘Roaring’: Venture Capitalist)

Tuesday, on the 5-year anniversary of the Dow’s record high close of 14,164.53, Faber said he was “actually surprised” the index was at 5 percent off that level “because if I look at the presidential candidates today, if Obama is elected, I think the Dow Jones should be negative-13,473, and if Romney gets elected, it should be minus-6,000.”

Trader disclosure: On Oct. 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long GOOG; Karen Finerman is short PAY; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P ; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Keith McCullough is long AAPL; Brian Kelly is long UNG; Brian Kelly is long DBA; Brian Kelly is long RIA; Brian Kelly is long NAT GAS FUTURES.

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