David Rosenberg: The Economy Is Weaker Than The Narrative Suggests

The Julia La Roche Show, Released on 2/15/24

Economist David Rosenberg, founder and president of Rosenberg Research, shares his macroeconomic view of the economy and explains why he’s not throwing in the towel on his recession call. Rosenberg highlights the importance of understanding the business cycle and the impact of interest rates. While many economists have thrown in the towel on their recession calls, Rosenberg remains in the recession camp, pointing out that the economy is weaker than the narrative suggests. He also emphasizes looking at the full picture, noting the divergences in various economic indicators.  Elsewhere, Rosenberg provides insights into the Federal Reserve’s rate policy and its implications for bond and equity markets. Rosenberg is bullish on bonds and explains how you could make a 20% total return in the 30-year Treasury.

00:00 Introduction, welcome, macro picture
0:54 Economists throwing in the recession towel
2:55 State of the consumer
4:15 Fiscal stimulus
6:40 Bullish on bonds, sees equity-like returns
7:30 Recession call
10:30 Bifurcation and divergencies in the markets and economy
12:00 GDP and GDI
14:00 Growth in credit card usage, epic drawdown in personal savings
15:00 Employment
22:30 Fiscal policy likely to be a drag
24:30 Household balance sheets – auto loans and credit card delinquencies
26:30 GDP likely close to flat this year
28:30 Outlook for Federal Reserve rate policy, need to go to 2.5%
35:45 Yield curve, why you could make more than 20% total return in 30-year Treasury bond
38:20 Implications equity markets if Fed cuts rates
44:30 Stock market has become a bidding war
48:27 Equity risk premium
53:33 Bob Farrell’s influence
57:44 Parting thoughts

David Rosenberg is the chief economist & strategist of Rosenberg Research & Associates, an economic consulting firm he established in January 2020. He received both a Bachelor of Arts and Masters of Arts degree in economics from the University of Toronto. Prior to starting his firm, he was Gluskin Sheff’s chief economist & strategist. Mr. Rosenberg was also chief North American economist at Bank of America Merrill Lynch in New York and prior thereto, he was a senior economist at BMO Nesbitt Burns and Bank of Nova Scotia. Mr. Rosenberg previously ranked first in economics in the Brendan Wood International Survey for Canada for seven straight years, was on the US Institutional Investor All American All Star Team for four years, and was ranked second overall in the 2008 survey.

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