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With Statements Like "This Will Likely Not End Very Well", Is David Rosenberg A Bear Again?
While we fully understand that when selling institutionally-priced newsletters to institutions (not retail for one simple reason: lack of "other people's money" to spend) one will have a far more lucrative career as a bull than as a bear simply because insecure (that would be most of them) institutional "strategists" prefer to surround themselves in cognitive bias-reinforcing groupthink just to convince themselves they are right, as the rating-agency era confirmed, one thing we are very confused by is whether David Rosenberg, who famously flipped from bear to bull a little over a year ago (recall David Rosenberg: Here’s why I’m bullish on the US economy), preaching a "wage-inflation" driven bout of economic growth which has not only not materialized, but the 10 Year recently hit 2014 lows, is now back to being a bear.
The reason? Statements like this from September 8 letter to clients:
While I have been labeled a bull on equities, it is only because the alternatives are so far worse, including zero-yielding cash. The central bankers are so consumed with riding the rescue for wages, income inequality and labour market slack, that they have either forgotten or dismissed the huge distortions their actions are having on financial market activity.
To be sure, in this world of relativity, equities stand out. But rest assured that relative valuations have been influenced — dare, I say, distorted — by central bank interventions that have gone global.
But as a standalone, not as a relative comment, let it be known that these central banks have turned a blind eye to the excesses in the financial markets. The price-to-sales ratio for the S&P 500 has soared to 1.77x — actually taking out the 2000 bubble high to register the highest reading on sixty years. Hey, maybe it is totally justified across a broad array of measures. Frankly, I don’t care. Price-sales ratios are at sixdecade highs. Use that information any way you like.
These valuations only make sense in the environment we are in — the environment of central banks suppressing the cost of loanable funds at or near zero. It won’t last forever, but let’s all try to understand that valuations are where they are because we have academics at the helm of central banks who largely have no experience in the real world of finance but have instead lived their lives in a theoretical bubble and have amazingly still not learned from the lesson of their past misadventures of creating financial excesses because they feel the need to deal with structural issues that actually lies at the door of the Congress and White House.
The party continues but down the road, understand … this will likely not end very well.
Or perhaps the latest thing among commentators is to be bullish on the economy, calling a recovery for all the wrong reasons, while hedging that a crash is coming and admitting that there is no recovery either in the economy and the stock market, if one pulls the magic rug of endless central banking intervention, and all this while saying that the best trade is to short bonds... short bonds... short bonds...
Somebody smarter can probably get to the bottom of it all.
Source: Gluskin Sheff
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I toldja it was time for him to flip again.
That's what she said...
Hes a Bull or Bear? all I know is Rosenbag is IRRELEVANT.
Aw, make up your mind.
He's a HFC guy. High Frequency Commentator. He espouses his positions for very short periods of time, sometimes as short as only a few milliseconds.
I was for it before I was against it...
he sold out looking for a payday (3 million i think i read here on Zh). seems like he wants more and he has figured out how to get one
check out corn--10 years--ONLY the federal reserve could engineer two bubbles & busts in 10 years:
http://futures.tradingcharts.com/chart/CN/M?anticache=1410371336
Oh, now he's David Rosenbear????
Don't know what to think when these guys flip and flop.
Also:
Golf courses block Obama, await fiery wrathhttp://tinyurl.com/k9dtj6a
It does not matter what he thinks or knows. The computers will not let the market crash. The fed algos run this market.
When confused about the direction of the makets, just copy some of the best traders and make the same profits as they do.
a few years ago i had an email exchange with rosenberg re retail sales
not impressed at all
That is all you need to know. My dad, an old school small manufacturing business accountant, told me his rule of thumb that a decent business is worth one times sales, no more, no less. 1.77 is the result of endless stock buybacks, fueled by ZIRP, driving down supply of equities. It will not keep going up forever.
what useless comments from a useless eater.
Yea yea I got it. The market may go down sometime in our lifetime. If the S&P crashes from 6000 back to 2500 in a few years will buying them now have been a mistake?
And what about from there down to 1500 or 1000 or 500? Mistake? Depends on if you're depending on that fiat for kith and kin..
We will never again print 1500. It's not possible with so much currency having been created. The only thing that could ever cause the market to decline to those levels is full employment, responsible governance and repayment of all the debt. We all know that will never happen.
A flip-flopper based on how the wind blows.
Not only the Central Banks suppressing the cost of loanable funds - but also backstopping banks and corporations with the public treasury while punishing savers, retirees, and future generations.
He also claims that Central Banks are riding the rescue of wages, income inequality, and labor market slack (LIE) - versus buttering the bread of he and his ilk.
You never get the whole unwashed truth in plain English from these types.
Speak the whole truth or STFU.
in case anyone interested
rosenberg blathering about retail sales meaning ____ (bullish)
retail sales something i follow closely ... and census bureau collects state govt tax collections with ~ 6 month lag. Well, sales tax collections growth (at time) only a little more than 1/2 of year over year growth in reported retail sales. Vertex keeps track of sales tax rate changes ... and sales tax rate (at time) flat to slightly up ... tried to tell rosenberg that mom and pop store were being exterminated and "surviving" customers going to big boxes who do report in monthly retail sales report ... didn't fit his thesis so ignored.
Ah come on - who cares about mom and pop? /sarc
"The price-sales ratio for the S&P 500 has soared to 1.77x — actually taking out the 2000 bubble high...Price-sales ratios are at six decade highs. Use that information any way you like."
Hmm...wonder if accounting practices are up to snuff on those sales numbers also? Meaning that ratio should be even higher. What could possibly go wrong?...............
"Accounting practices up to snuff", that is funny!
Rosenberg correctly called the US Housing meltdown (and bank exposure) well in advance. Unfortunately he got caught by sticking to fundamentals, ultimately "coming around" and tossing fundamentals out. I think his hedge was long credit not necessarily equites. Can't remember now who cares anymore.
i came to the conclusion we were in a bubble spring 2004.
a blind person could have seen it by 2006 with landscape littered with low/no doc loans ... with NINJAs on top
Hey Dummy,
The S&P 500 Price/Sales was well over 2x at the end of 1999.
It's called Google. Use it.
"These valuations only make sense in the environment we are in — the environment of central banks suppressing the cost of loanable funds at or near zero. It won’t last forever, but let’s all try to understand that valuations are where they are because we have academics at the helm of central banks who largely have no experience in the real world of finance but have instead lived their lives in a theoretical bubble and have amazingly still not learned from the lesson of their past misadventures of creating financial excesses because they feel the need to deal with structural issues that actually lies at the door of the Congress and White House."
No shit?
Rosenberg is just now figuring that out?
What a fucking moron.
hairball
Well, its all about interest rates. If bond yields keep rising its going to be very tough for stocks to advance.
Hey Dave...you were gone? ...uh... welcome back...how was insanity?
He's one of these guys that you can always tell how well he is doing just by looking at him. In 2008 he was fat. In 2010 he was much thinner. Then he began putting weight on again. And now, I imagine, he is starting to loose weight.