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#270 David Rosenberg: Nobody Sees the Recession Coming - But It's Already Here
Manage episode 491863925 series 3510102
David Rosenberg, founder and president of Rosenberg Research, believes recession odds are higher than 2022 despite nobody expecting one, pointing to Fed staff forecasting 50% recession probability and the most downbeat Beige Book since 1980. Rosenberg criticizes Powell for calling the economy "solid" while real GDP has been negative sequentially in 2 of the past 3 months and survey data suggests 1% contraction. He highlights a major market dichotomy with stocks up 24% while the dollar is in an 11% bear market, suggesting something is fundamentally wrong. The housing market faces a negative wealth effect as supply-demand gaps widen and prices start cracking.
Sponsors:
Monetary Metals: https://monetary-metals.com/julia
Kalshi: https://kalshi.com/julia
Links:
https://rosenbergresearch.com/
https://x.com/EconguyRosie
Timestamps:
00:01 - Introduction: Dave Rosenberg, founder and president of Rosenberg Research
00:49 - "Meat grinder roller coaster ride" - elevated policy uncertainty
02:15 - Tail risks removed: no trade war, regional conflict, or fiscal cliff
05:35 - S&P 500 multiple expansion: 18 to 22 in three months (4 sigma event)
08:30 - Housing market in "huge state of disarray" - prices starting to crack
11:22 - Survey data consistent with economy contracting at 1% annual rate
13:20 - Real GDP negative sequentially in 2 of past 3 months
15:24 - Nobody talking about recession despite higher odds than 2022
18:18 - Recession probabilities are binary - "zero or 100, not 60% pregnant"
21:18 - Mistakes from 2022-2023: didn't anticipate fiscal stimulus scale
25:34 - Big beautiful bill not stimulative - just extending status quo
28:20 - Housing supply-demand gap widening, negative wealth effect coming
32:42 - S&P 500 became growth index, small caps still in correction
36:00 - Fed staff said recession odds equal to GDP baseline forecast (50%)
38:56 - Beige book: economy declining slightly, more downbeat than 2007
44:32 - Powell calling economy "solid" despite weak data - credibility issue
48:04 - Fed damaged by "transitory" mistake, protecting legacy
55:17 - Next Fed Chair speculation: wants someone he can "push around"
59:04 - US dollar down 11% in bear market while stocks up 24%
01:04:13 - Closing: importance of liquidity and diversification
272 episodes
Manage episode 491863925 series 3510102
David Rosenberg, founder and president of Rosenberg Research, believes recession odds are higher than 2022 despite nobody expecting one, pointing to Fed staff forecasting 50% recession probability and the most downbeat Beige Book since 1980. Rosenberg criticizes Powell for calling the economy "solid" while real GDP has been negative sequentially in 2 of the past 3 months and survey data suggests 1% contraction. He highlights a major market dichotomy with stocks up 24% while the dollar is in an 11% bear market, suggesting something is fundamentally wrong. The housing market faces a negative wealth effect as supply-demand gaps widen and prices start cracking.
Sponsors:
Monetary Metals: https://monetary-metals.com/julia
Kalshi: https://kalshi.com/julia
Links:
https://rosenbergresearch.com/
https://x.com/EconguyRosie
Timestamps:
00:01 - Introduction: Dave Rosenberg, founder and president of Rosenberg Research
00:49 - "Meat grinder roller coaster ride" - elevated policy uncertainty
02:15 - Tail risks removed: no trade war, regional conflict, or fiscal cliff
05:35 - S&P 500 multiple expansion: 18 to 22 in three months (4 sigma event)
08:30 - Housing market in "huge state of disarray" - prices starting to crack
11:22 - Survey data consistent with economy contracting at 1% annual rate
13:20 - Real GDP negative sequentially in 2 of past 3 months
15:24 - Nobody talking about recession despite higher odds than 2022
18:18 - Recession probabilities are binary - "zero or 100, not 60% pregnant"
21:18 - Mistakes from 2022-2023: didn't anticipate fiscal stimulus scale
25:34 - Big beautiful bill not stimulative - just extending status quo
28:20 - Housing supply-demand gap widening, negative wealth effect coming
32:42 - S&P 500 became growth index, small caps still in correction
36:00 - Fed staff said recession odds equal to GDP baseline forecast (50%)
38:56 - Beige book: economy declining slightly, more downbeat than 2007
44:32 - Powell calling economy "solid" despite weak data - credibility issue
48:04 - Fed damaged by "transitory" mistake, protecting legacy
55:17 - Next Fed Chair speculation: wants someone he can "push around"
59:04 - US dollar down 11% in bear market while stocks up 24%
01:04:13 - Closing: importance of liquidity and diversification
272 episodes
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