David Rosenberg, recent reflationist reincarnation aside, has never been one to interject spurious rumors in his client letters. Which is why, if what he is "hearing" is accurate, then the bulls better pray that David Tepper's view of the taper as being bullish (then again, to David Tepper everything is "bullish" during CNBC appearances as it is merely provides an opportunity to sell to the gullible public) is correct, or else Bernanke may go ahead and shock the market as soon as next week's FOMC press conference (the last until September) with a very disturbing gravitational reality check.
From what I hear, Ben Bernanke convinced the FOMC in December that in order to get ahead of a potential 'fiscal cliff' in December, it was a matter of having to 'shoot first and ask questions later'. In other words, take a pre-emptive strike in December against the prospect of falling off the proverbial cliff and into recession in the opening months of 2013. But what happened next was a fiscal deal that was reached in early January and the economy faced a hill, not a cliff. The economy still faces near-term sequestering hurdles, but the reality is that a bold policy move aimed at thwarting off recession is now being reconsidered. Bernanke apparently told the hawks on the FOMC that if the economy was not in contraction mode by now, the 'tapering off' talk would ensue — and that is exactly what has happened.
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David Rosenberg is Gluskin Sheff’s Chief Economist & Strategist and the author of the daily economic report, Breakfast with Dave. You can subscribe to it by visiting www.gluskinsheff.com/research.”