Here is a verbatim transcript of the exclusive interview with Marc Faber on CNBC-TV18. Also watch the accompanying video. 

Q: How have you read the big rally that came into many global equity markets in early parts of January and do you think that’s now coming apart?

A: We were oversold when the S&P in the US reached 741 on November 21. We had a rally of around 25% and some markets rallied even more. We can still rally a bit more because there is a huge liquidity injection into the market by all the Central Banks around the world. But in general I feel it’s a bear market rally and that after this rally we will test the lows or exceed the lows again.

Q: Is that how you are seeing 2009 that the Q1 may not be too bad but by the time we get over that we go back and retest October lows for most markets including India?

A: The consensus is that 2009 will be better than 2008 and I do not think it will be much worse. I do not think we will drop another 50%. But the contrarian view would be to think that all the monetary and fiscal injections by government fail and that they run out of ammunition and the market will drift lower.      

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