David Rosenberg: "From What I Hear..."

Tyler Durden's picture

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.


* * *

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.”

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
notadouche's picture

Which would correlate perfectly with the front running of precious metals dump earlier this year.  

Peter Pan's picture

We are in danger of moving to a fresh paradigm without having dealt with or allowing the free market to deal with the outstanding issues.

Pinto Currency's picture


The bond market has shown signs that it does not move in tapering steps.  The load shifts rather quickly.

The bond barge is stuffed and a shift risks rolling enough that it starts taking on water.

Just discussing tapering has sent yields from 1.6 to 2.3%.

Santelli is on to this.

nope-1004's picture

Talk and Action are two different things.  The FED has always talked more than acted, as they are completely ineffectual at stimulating organic growth.


flacon's picture

I'm confused. I thought *'Obi-Ben Bernobi was our only hope'* to "grow" the economy by using QE. But this sounds like he WANTS the economy to contract... I don't understand. Does "tapering off' mean "taper is off" (ie more QE) or does it mean QE is going to be 'tapering off'? Fucking English language. I used to think I understood the basics of their insane Keynesian minds, but now I doubt myself. 


told the hawks on the FOMC that if the economy was not in contraction mode by now, the 'tapering off' talk would ensue 

spine001's picture

To understand their wierd logic you ned to do at least an masters in finance if not a PhD. I am doing an MBA and barely grasp how they think. Ass I have mention3d before Bernanke testified in Congress multiple times that QE woukd not work to kick start the economy without them bringing on structuralnand fiscal reform that ensured the markets that long term deficits were under control. The desperate measures taken to avoid the cliff have made the worst case sc3nario of bubbles and financial ijstabioity with no growth the base case now. With that sa8d, it should be clear to them by now that further QE would only bring larger bubbles and more worldwide instability to the sytem without doing anything for growth. Thus the Fed is no longer in front of a decreasing gains scenaro but in front of a negative scenario where more clearly means less. They have mo option but to taper if they want to fulfill their mandate. Wether the technical people will have their advice heard or wether the ignorant politically driven members of the FOMC wipl 0revail nobody can know. But the t3chnical equation has been clear for a long time as I have posted here before. What David is saying makes too much sense. I hope that the techn8c8ans win this one or we are all doomed, and 8t may be t9o oate already...

Until next time,


fonzannoon's picture

I just got off a call with a client with a pretty big account

Them: I'm down 8k in the last month

Me: you're welcome

Them: You said we were not that exposed to the stock market

Me: You're not. You, and everyone else got creamed in your bond positions

Them: How can that be, interest rates have not gone up.

Me: They most certainly have.

Them: But they said they were going to announce when rates would start to go up. They said 2016 or something.

Me: It seems it works a bit differently.

Them: I don't understand?

CH1's picture

Them: But they said they were going to announce when rates would start to go up. They said 2016 or something.

Me: It seems it works a bit differently.

Them: I don't understand?

You: Have you ever seen The Matrix? With the red pill and the blue pill?

Ham-bone's picture

man, if I was short deliverable gold and wanted to finish the destruction of PM's, what better way than tell everybody I've found religion and I'm taking away the QE party.  Make some tough talk bout how the economy ready to stand on it's own two feet. 

Oh and the metals smashdown...that's you chance to buy it at dimes on the dollar.  JPM and COMEX issues solved.

nope-1004's picture

lol.  Then let's bring this issue to resolution NOW.

Smash the markets and kill PM's.  Miners will shut down.  And I won't mind being a contributing factor to zero supply left - ANYWHERE.  We'll see how long that equillibrium lasts.


Pinto Currency's picture

Problem is, the financial talking heads think that inflation is caused by economic activity.

If they are tapering, it is because activity is picking up.

So as the bond market (size XXL) starts to deflate where is the money going to run?

Real goods.  Oil, p.m.'s etc.


Why do you think the banks have shifted from 100,000 contracts short to 30,000 contracts long in gold:


disabledvet's picture

"why not roil the markets. All of em! that's why the call it the summer doldrums. i promise to wait until after Memorial Day when all the Young Turks have headed of the Hamptons." Thanks! http://www.youtube.com/watch?v=oHA7p9t4yCQ

JPM Hater001's picture

I remember when I was wholesaling early in my career and I was outside a corner office when I first heard the words: margin call.

That 2001 was so overdone. Today we have safety in less loss.

"So, where do you think you will lose the least. I would caution you not to think cash."

buzlightening's picture

Well stated Peter Pan.  Here comes the judge.

The Shootist's picture

Well the economy has been contracting since 2008. Does he mean the stawk market bazaar?

BeetleBailey's picture

"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."

Not in contraction.

It's in ICU.....lied about as "recovery".....

CrashisOptimistic's picture

2012 Q4 GDP 0.4%

2013 Q1 GDP on the inventory bounce, 2.4%

Projected 2013 Q2 GDP with bounce complete, 1.5%


Why on Earth would they think they can withdraw it.  With GDP at 1.5% BEFORE the DoD Sequester layoffs starting in July, why would they think they can withdraw it?

I smell a Mario Draghi moment.  Say you are going to do things, over and over again, and never do them.

slaughterer's picture

$5-10b/m taper announced at next FOMC next week: do with it what you will.  

fonzannoon's picture

That puts the 10yr at 2.35%.

Kevin stays busy trying to hold stawks together.

gatorengineer's picture

i cant see how they could go that small....  I think its a 20 roll back or nothing.....  Also depends on how they split it betwen mort and bills...

Stuart's picture

Ya.  Ben better wish the Treasury Dept good luck in servicing the public debt, let alone the Fed eating its own losses as it's own books implode.   Damned if they do, damned if they don't.  Either way...    

flacon's picture

"Tapering of". Lots of double negatives. Does it mean a reduction in the amount of the increase of asset purchases, or does it mean a reduction in the amount of the reduction of the amount of the increase of asset purchases? It's fuckin' 'economist-speak'. 

Lets Buy The Dip's picture

Never mind metals

That will rally later in the year, and still in a bigger bull market. I think traders right now are looking at the market after today. 

The market took a dump today down 27 points.  

But the Transports (or the leader of the market) CLOSED BELOW THE 50 EMA => SEE THE CHART HERE!

Could get messy on the market the next few weeks, WEEKLY on S&P just turned to a sell signal. Time to hit the bloody PANIC BUTTON sirs.

LostPolarBear's picture

So they "taper" from $85B per month to $65B-$75B per month.  That's still a shit ton of money printing.



RSDallas's picture

These are all plants to get a feel for what the markets will do.  Plain and simple.  

cougar_w's picture


Monetary policy now days is 1 part economic analysis and 9 parts mind-fuck.

dracos_ghost's picture

These are all plants to get a feel for what the markets will do.  Plain and simple.  

I'd tend to agree with you, but with the "intangibles" line item in the GDP coming up in July, it's going to be hard for the Bernanke to justify the QE spigot when GDP posts a bogus +5.5% growth number. In addition, with the imminent immigration bill passage magically creating millions of jobs by decree(all those illegals mysteriously becoming new jobs), the unemployment number will plummet -- once again with the irrelevant fact that it's BS. Plus passage of the immigration bill will have the Republidicks ceding power to Chancellor Obama and the sequester "headwinds" will be fart exhaust.

It's the end of the world as we know it -- and I DONT feel fine.


Ned Zeppelin's picture

Absolutely correct. Jawboning is the preferred tool.

The Master's picture

"From what I hear".......usually a fan of Rosenberg but that's not good enough for me.  Where was this quote in January?

alphamentalist's picture

2013 is 1984 and 1987. awesome.

CH1's picture

2013 is 1984 and 1987. awesome.

With an overdose of Brave New World thrown in for good measure.

Peter Pan's picture

The only thing for the FED and the govt to do is to shrink government and allow people and the market find a solution no matter how painful it will be.

cougar_w's picture

Well those are the very two things the Fed and the government absolutely will not do.

Got anything else for us?

Imminent Crucible's picture

Got anything else? Sure; they can start a war.

Edit: Start ANOTHER war.

notquantumdum's picture

And, they really don't even have to shrink the government, they could just slow down its rate of growth in order to allow the economy to catch up thus shrinking govt as a percent of GDP.  Even that would cause massive nashing of the teeth and much complaining as the sequester has.  Keep in mind, even the sequester INCREASES spending; it just does so at a slower rate than had been "budgeted" (no matter how terribly the individual components of the "cuts" were selected).

As I think Thomas Sowell wrote, if an imaginary government which only performed two activities, providing healthcare to poor children and building statues of Benedict Arnold, were to ever enact any "spending cuts" they would almost certainly cut back providing healthcare to poor children since this would cause the most public consternation for the cuts; whereas, people might actually ask why statues of Benedict Arnold were actually being built in the first place if this activity were cut.

fonzannoon's picture

What a total bunch of bullshit this all is. So Bernanke signals a change in policy. Shocks everyone. The market tanks. Rates do what? Rise? Drop? Let's go with scary and say they rise. We know Bernanke is not showing up in August right? So we get all this turmoil and our monetary leader is nowhere to be found? He will resign between now and August. The next fool will come in and launch another round of massive QE.

That's all I can see happening from here.

BeetleBailey's picture

Janet "Smellin like Hellin" Yellen.....Obamavik.....next in line for the fucking throne....and will print like she's out of panties at an "Everything's a Fuckin Trillion Dollars" store....

Praetorian Guard's picture

I laughed so hard I cried... good one... hahahahahaha

kito's picture

im getting the sense that ben sees the end of the line with printing.....

fonzannoon's picture

Maybe he does. Is this 2010 all over again? Pre QE2?

kito's picture

i dont know anymore......all i know is that i dont know.........all i know is that nobody knows................who am i???????

ekm's picture

It's over.

Even Rosie is trying to give the impression that there are hawks and doves, as if there is democracy at the Fed.


There is none. Benny rules and White House rules over him.

ekm's picture

Not far from the truth, that's why QE was dead in January.

We'll have 1 or 2 primary dealers sacrificed on JPM's altar.

lolmao500's picture

Now if the DOW could man up and do like the Nikkei, that would be hilarious.

russwinter's picture

"If you fake the funk, your nose will grow." - Bootsy Collins, The Pinocchio Theory

savagegoose's picture

"from what i hear" is code for " they will destroy me if i dont play along "

buzzsaw99's picture

Whether the fed manipulates the S&P up, or down, it is still just manipulation. There is no market, there is only the bernank.