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#270 David Rosenberg: Nobody Sees the Recession Coming - But It's Already Here

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Manage episode 491863925 series 3510102
Content provided by Julia La Roche. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Julia La Roche or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.

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

  continue reading

272 episodes

Artwork
iconShare
 
Manage episode 491863925 series 3510102
Content provided by Julia La Roche. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Julia La Roche or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://ppacc.player.fm/legal.

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

  continue reading

272 episodes

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