David Rosenberg Bashes Daniel Gross

Tyler Durden's picture

Daniel Gross, who while at Newsweek saw the end of the recession even as the depression was merely stretching its wings, and generally drank Kool Aid by the supertanker, only to see his media venue blow up (some recovery) and by forced to move to that other bastion of creative thought Yahoo!, gets pummeled in today's letter by David Rosenberg for his most recent lunatic ramblings which not at all surprisingly made it into Paul Krugman's New York Times. Frankly, it was about time someone explained to Mr. Gross that reality is actually quite visible, if only one puts down the mild hallucinogens for at least a minute.


Yesterday’s WSJ ran with this: Middle Class Slams Brakes on Spending (page A4). It’s all about how consumer attitudes toward discretionary spending have undergone a secular shift. Not too hard to understand considering that the average household is still in the hole to the tune of over $100,000, in terms of net worth, when compared to three-years ago. There is also this other little problem of 1 in every 7 Americans either unemployed or underemployed. Uncle Sam’s generosity is not accounting for a record 20% of personal income for no reason.

Then we came across this surreal column in the op-ed article of yesterday’s NYT by Daniel Gross. His message is that “the new frugality is a myth — and that's good for the economy.” He adds, “for this recovery to mature, broaden and persist, the greatest economic force known to mankind — the American consumer — has to get back in the game.”

Wow. Talk about playing by the old rules. There was no mention in the article the fact that with a 70% share of GDP, the U.S. consumer never exactly went into hibernation, even if spending decisions have changed.

Then he goes on to extol the virtues of debt (what would Kant say?) and longs for the days when we collectively lived beyond our means: “The renewed willingness and confidence to spend money we don’t have is vital to the continuing recovery.”

Huh? And I thought employment and income were the vital components to sustainable growth.

Then Mr. Gross goes on to say — brace yourself: “Money may make the world go 'round, but credit makes the gears ofcommerce run smoothly.”

Yes, sure it does. Up until you reach a point where 30% of the population have a sub-620 FICO score.

But listen to this ... the coup-de-grace: “As the economy slowly recovers, there are signs that Americans are rediscovering their free-spending ways. Total consumer credit, which includes non-revolving debt like car loans, have stabilized, and it rose in both June and July. It’s back to where it was in the second quarter of 2009.”


We just went to the Fed’s database and saw that in July, outstanding consumer credit shrank $3.6 billion and has contracted now in each of the last six months and in 18 of the past 19, which makes it mathematically impossible to have gone back to 2009 Q2 levels. And, the August data for bank-wide consumer loans showed a $6.0 billion slide.

As a wise man once told us, you are entitled to your own opinions, but not your own facts.

Come to think of it, the opinions were about as spurious as the data (still trying to figure out what series he was looking at).

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Pladizow's picture

Perception is reality!

aint no fortunate son's picture

I hear a guest spot coming on Sqwauk Box next week for Mr. Gross... this is Becky and Joe's kinda guy!

dlmaniac's picture

Gross was the guy screaming "America is back" on Newsweek in April, wan't he?

Bitch Tits's picture

It's a joke, obviously.

A little tongue-in-cheek humor at the expense of the middle class. Manipulating minds isn't an easy thing to do, so it might as well be fun.

SteveNYC's picture

This Gross guy thinks he is the new Ed Bernays. A pathetic, poor man's version if anything.

GFORCE's picture

The charts have been manipulated there. Look at gold on a daily chart.

Your confirmational bias obsession is a hazard to your wealth.

MrMorden's picture

Smokin' crack, bitchez!

Thoral69's picture

Yeah right! The consumer is tapped end of story!



Cognitive Dissonance's picture

Rosie baby I respect the ground you walk on, but if the New York Times prints it, it must be true. I don't care where you get your economic numbers, not even if they come from the NY Times itself (which would make them correct) you're wrong and the NY Times is right. Which means by extension anyone who graces the pages of the NY Times is right.

How do I know this? Because the NY Times told me the NY Times is always right. In fact, they printed an editorial (it doesn't get any more right than a NY Times editorial) declaring they're always right. And since everything printed in the NY Times is right.....well you get the picture.

I love circular logic. It assures me that I'm always right, right? 

PS: Just in case its not obvious..........<sarcasm off>

Cognitive Dissonance's picture

Very clever. And it just proves I'm right, right? :>)



Problem Is's picture

"The New York Times is the toilet paper of record..."
G. Celente

svendthrift's picture

Gross wrote: Pop!: Why Bubbles Are Great For The Economy.

Fred Hayek's picture

Damn.  I didn't see that you had already posted that.  Oh well.  I left a link to it below.  I'll do it again.


BobWatNorCal's picture

There's a reason it's called "Newsweak"

Problem Is's picture

"newsweek saleprice - one buck"

$1 Too Much...

     MSM bankruptcy and liquidation, bitchez...

Attitude_Check's picture

"The renewed willingness and confidence to spend money we don't have is vital to the continuing recovery"


You can't make this stuff up.  High on Hopium I guess.

Cognitive Dissonance's picture

Statements such as this illustrate how far into the wilderness we have strayed. And its said with a straight, even sincere, face. Truly mind boggling to witness insanity accepted as sane and responsible thought.

We have crossed over into the Twilight Zone. Rod Serling, where are you when we really need you?


ssp2s's picture

Newsweek: "America's Back!"

Yardfarmer's picture

Durden, Rosie, oh, if only you would learn to suffer such fools with more gladness in your hearts. Do you not see that without their unfortunate forays into matters of which they know little or nothing, you would not have attained half the stature as the recognized intellectual titans of economic understanding you are so deservedly recognized as.

TheJiddish's picture

I enjoyed reading this other article on ZH per the frugality myth. This one seems to combine both opinions into a more plausible picture.



MarkTwainsMustache's picture

Daniel Gross and James Altucher have the same mother.

RockyRacoon's picture

Yeah.  "Mother" being the first word of a two word phrase to describe them.

gwar5's picture

That was funny....

Daniel Gross and the JournoPimpwagon, formerly known as Newsweek, famous for more left turns than NASCAR.  Daniel, why so socialist? Maybe Newsweek just didn't spend enough money, or take out enough loans?

Obama insists this tactic is working.  


John McCloy's picture

The NYC MTA is voting on another fare hike today.

This would be the 3rd in as many years.

in 2005 the 30 day was was increase 11+ to $76.

In 2008 they 30 day was increased to $81

Only a year later in 2009 base fares 25% increase across the board

And today in 2010 the MTA board approved a monthly fare jump from $89 a month to $104 an increase in single ticket base fare to $2.50, increase in 7 day pass and a the ending of the popular 1 day fun pass (Which allows unlimited rides in a day for a fixed price).

   in 2005 they had a 900 million dollar surplus. More middle class rape. No inflation to be seen here folks.

svendthrift's picture

They are closing lines too, yeah? There was a planned expansion (planned every decade or so) that I assume is mothballed due to pension liability?

John McCloy's picture

Massive cuts. They removed a number of those booths with the help desk people, removed a number of ticket boots and I saw them installing a number of miniautomated kiosks all over the city actually on the street for the first time in MTA history.

  They closed down a few lines or trimmed service to weekday service and more jobs cuts are on the horizon. But hey...they announced wifi in a few stations so cheers all around. They ridiculous extension of the 7 train line further west. Meanwhile they do things like shut off the escalators going downward to save energy or shut them off on the weekend. And if you ever have to ask one of the lazy clerks a question while they are on their cellphones chatting with anyone they can get on the phone you can expect an attitude from these entitled smiling faces.

MarketTruth's picture

<s> i ALWAYS trust the Ministry Of Truth. </s>

Fox Moulder's picture

I was sure I was reading The Onion. Had to double check.

AR15AU's picture

Call these mofo's out...!  They love to post this crap in the safety of their little ivory towers where readers cannot provide feedback to the garbage articles. Kudos for cross posting and debunking. We need more of this. I want Google to come up with Zero Hedge as the number one item when someone searches on Daniel Gross...!

Gimp's picture

"Honey I am out of TP can you get me another roll of NY Times so I can wipe my ass!"

Whoever is reading this junk is already living comfortable in the Matrix and fully connected to the machine. Thank G_d for the internet and ZH, enjoy it while it lasts.

The Arts section is pretty good so I won't wipe my posterior with this section!


Fred Hayek's picture

Daniel Gross has been able to be spectacularly wrong often and yet remain employed.  He may be a dolt but, somehow, he's not an unemployed dolt.


Here's my personal favorite Daniel Gross piece from Slate.com in May 2007.  The title is "Why Bubbles Are Great for the Economy".  I kid you not.


SteveNYC's picture

In a society where the truth and honesty are taboo, the one-eyed shill is king!

dashingdwl's picture

It depends on what your definition of "rose" is.

UninterestedObserver's picture

I read one of Gross's articles on Yahoo and I honestly thought he was retarded.

lamchops's picture

Reinflating a bubble.

That's what these morons are trying to do--Let me stress here that in particular I am referring to that fool Paul Krugman.

We are witnessing the greatest economic collapse since the South Sea Bubble in 1720. It may take a decade or more before this cycle bottoms. The thought that we can borrow and spend enough money to start the bubble growing again is preposterous.