Marc Faber - the man who predicted the stock market crash in 1987 - thinks we are at the start of a bear market:

"We're right where the market would usually be at the start of a bear market," Faber said in an interview from Copenhagen. "Financial stocks are not performing well and this is usually a bad indicator for the market."

A measure of financial shares has retreated 5.9 percent since Feb. 20. Countrywide Financial Corp., the biggest U.S. mortgage lender, and Lehman Brothers Holdings Inc., the fourth- biggest U.S. securities firm by market value, led the losses.

Inflation and rising oil prices may restrain economic growth and keep stocks from completing a rebound from the Feb. 27 rout that sent the S&P 500 to its worst plunge in four years, Faber said.

"What the government publishes as inflation isn't the cost- of-living increase for the average household in America," said Faber, who oversees $300 million at Hong Kong-based Marc Faber Ltd. Increases in corn, wheat, soybean and meat prices have driven food costs up for most Americans, he said.

Emerging markets, including China, may fall more than the U.S., according to Faber. Rising oil prices and defaults on mortgages by the riskiest borrowers in the U.S. reduce the cash available for investments in those markets, he said. Growth in the U.S. current account deficit has boosted global equities, he added.

'Excess Liquidity'

"In an environment where global liquidity is tightening, emerging markets that benefited from excess liquidity would be the most vulnerable," he said.