I thought this was an interesting article in relation to Marc Faber's expectation the US markets are due for a large correction... Quite poignant considering the recent action in the markets.
'All year long, the media has focused on the "obvious" excuses to explain weaker housing data (weather) and the breakdown in high-beta names (risk sentiment on fear of Russia/Ukraine "tensions"). None of this jibes with what the market itself has been saying for the past few months. Economic growth for the first quarter was abysmal despite the rallying cry of “ economic escape velocity” at the start of the year. Long-duration bonds and low-beta/non-cyclical sectors all along have disagreed with that narrative.'
'Ask yourself if something is wrong with this picture. Small caps relative to large caps are in a crash. Yes, the word crash is appropriate given that the last three weeks have erased all of 2013's alpha and outperformance.'
