David Rosenberg On The Difference Between The Buy And Sell Sides, And What He Is Investing In Right Now

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Wed, 12/21/2011 - 15:08 | 2001866 Tsar Pointless
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China pension fund to invest $1.6 billion in stocks


ECB. Fed. China. All buying stocks.

Exactly how many times since March 2009 have we heard "Just one more rally, then..."?

Wed, 12/21/2011 - 15:26 | 2001905 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It's fun watching them scramble.  Look how they run, like pigs from a gun, see how they fly.....

No one knows what to do with their fiat?  Not even Rosie.  Short this, buy that, at the end of the day one is still left holding the bag. 

Equity is a ludacris investment.  Either you "diversify" and own everything, or you buy one company.  If you buy the wrong company, you lose your pants.  If you diversify, you mute your return.  This not to mention that the corporations are working directly against the people of the world, to favor the oilgarhs in their quest for world domination as the Kings and Queens they want to always be.

If you buy debt/bonds you have to buy the top of this market, this very artificial market thanks to economists everywhere.  Economics, a scientific study, studying something that is based on one big lie.  The lie is that fiat is money; it is not, it is currency.  Then from there the lies spin out of control by ways of fractional reserve lending, rehypothecation, etc.  The money is spun like the lies they weave, and in the center is one giant spider who is very hungry, and waits patiently for the bug that is oh so close to getting stuck.

The reality is, there is only one way out, and that is by not participating in the system.  One must be prepared to work the land, one must own wealthful investments that are not lent out.  One can make loans, that is fine, but the recourse is exponential, and if a loan stops performing, it is on the owner, not anyone else.

We will soon be dealing with this reality.  Once the Fiat Ponzi's growth decelerates, which it might have today, the spider will catch its meal.  The US peaked at 100% debt/gdp, and since the US was the engine of growth for the last hundred years, the game is over. 

The cause was not just debt issuance in the public and private sector.  It was also a resource peak.  Now that resources cost more money than it is worth to use them, the growth stagnated and has begun falling.  No longer will Americans drive 5 blocks to the store for dinner; they will walk.  No longer will Europeans retire at 55; they will work.

This New World, for all purposes of dates, began today.

Welcome to the New World.

Wed, 12/21/2011 - 15:36 | 2001960 economics1996
economics1996's picture

Hey Hendrix you need to separate out the Keynesian pond scum from the Austrian economist.

Wed, 12/21/2011 - 15:37 | 2001962 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I'll work on it

Wed, 12/21/2011 - 18:53 | 2002718 Larry Dallas
Larry Dallas's picture


Thankfully our young 20-somethings are still smoking the Hopium and buying stocks. The ponzi will be kept alive a little while longer... albeit i'm sure their demand for equities is not enough to counter the supply that baby boomers will be providing when they sell this stuff off in the years to come.

Ameriprise must be givng out credit cards on college campuses now. Or sponsoring spring break weekends now.

Wed, 12/21/2011 - 15:26 | 2001921 walküre
walküre's picture

China and their central planning committee stopped building empty cities and are now buying "local" stocks to put a floor under their market. Clear signs of a last ditch attempt to try and keep CONTROL. That's what this is all about, control. It's a for sure "sell" signal to every foreign investor in China's stock market.


Exactly how many times since March 2009 have we heard "Just one more rally, then..."?


But few stocks have actually improved at all during 2011. That's one year of a pretty much flatlined market unless you were able to pick the winners and avoid the losers.

How is 2012 going to be different in the face of a pronounced depression in the US and a recession (or worse) in Europe? Sure, the CBs are putting a floor under the market (until they can't) but there won't be any gain. Look at Japan.

Might as well take the money and drink and party until the end of days. Investing is going to be a buzz kill.

Wed, 12/21/2011 - 15:30 | 2001936 Tsar Pointless
Tsar Pointless's picture

Invest? Oh, I don't invest.

In these markets? I don't see any markets - just casinos. And I am not a ramblin' gamblin' man.

I have no 401(k), nothing in equities, bonds, or paper of any fashion. Just cold hard cash is all I deal in.

I've never made a single trade in my life. I merely come to ZH for the comaraderie and free cookies.

Wed, 12/21/2011 - 16:00 | 2002030 walküre
walküre's picture

Cash positive is good way to live. When all is settled and done, your cash stays with you and your family. Nobody can tax you or your estate on that.

Wed, 12/21/2011 - 16:27 | 2002136 Potemkin Villag...
Potemkin Village Idiot's picture

I merely come to ZH for the comaraderie and free cookies.

Stay away from the shrimp bisque...

Wed, 12/21/2011 - 15:41 | 2001974 economics1996
economics1996's picture

A price floor can be set above the free-market equilibrium price. In the first graph at right, the dashed green line represents a price floor set below the free-market price. In this case, the floor has no practical effect. The government has mandated a minimum price, but the market already bares a higher price.

Wed, 12/21/2011 - 16:10 | 2002069 walküre
walküre's picture

Probably true for the gold market. But as far as the Chinese stock market goes, I guarantee you that market would have the price much much lower if government via CB hadn't stepped in at some point this year. The article also said the Chinese already put 10 billion Yuan into the stock market since August, and now another 10 billion Yuan. If all was rosy and investors lining up to buy stocks the government wouldn't have to engage in this action.

Question is, can they stop the outflows or at least mitigate the downtrend?

Wed, 12/21/2011 - 17:01 | 2002242 Stax Edwards
Stax Edwards's picture

China and their central planning committee stopped building empty cities and are now buying "local" stocks to put a floor under their market. Clear signs of a last ditch attempt to try and keep CONTROL. That's what this is all about, control. It's a for sure "sell" signal to every foreign investor in China's stock market.

Yep.  Been singin this tune for some time now.

Wed, 12/21/2011 - 15:10 | 2001867 bank guy in Brussels
bank guy in Brussels's picture

David Rosenberg writes above:

« In my former role as chief economist at Merrill Lynch, I flew all over the world ... »

Wonder if he ran into Simon Black, the Sovereign Man?

Wed, 12/21/2011 - 15:16 | 2001888 GeneMarchbanks
GeneMarchbanks's picture

'Wonder if he ran into Simon Black, the Sovereign Man?'

Yep, at a bus stop in Bangkok where Simon's dishes out 50 baht HJs...

Wed, 12/21/2011 - 15:19 | 2001899 kralizec
kralizec's picture

That right there is funny!

Wed, 12/21/2011 - 15:22 | 2001907 kekekekekekeke
kekekekekekeke's picture

OT but has Zero Hedge addressed the Trillion-Dollar Lawsuit/David Wilcock article? Thoughts? what does it mean for gold?

Wed, 12/21/2011 - 15:23 | 2001908 clones2
clones2's picture

Strangest action in the market today.

Dow, Nas, Spy all down

TLT (bonds) - down

The dollar AND the Euro - down

Gold and Silver - down

Even Volatility is down...

Where the hell is the money going???? 

Wed, 12/21/2011 - 15:27 | 2001923 Tsar Pointless
Tsar Pointless's picture

You might want to start your search by checking the pockets of bank CEOs and legislators.

Just a suggestion.

Wed, 12/21/2011 - 15:31 | 2001940 s2man
s2man's picture

I put a couple hundred in my gun safe, today. I'm sorry.

Wed, 12/21/2011 - 15:33 | 2001947 kralizec
kralizec's picture

Cashing out for Christmas, one last binge to close out the year in good form before the floor caves in?

Wed, 12/21/2011 - 15:50 | 2002002 I am a Man I am...
I am a Man I am Forty's picture

oil companies are up

Wed, 12/21/2011 - 16:15 | 2002095 walküre
walküre's picture


miners are down.

LTOR did sweet fuck all for gold / silver and miners.

gold is the leading indicator for next year .. deflation

Thu, 12/22/2011 - 20:02 | 2005845 SoK
SoK's picture

It's not money disappearing. This is a credit contraction. So, where do broken promises go?...

Wed, 12/21/2011 - 15:23 | 2001910 twotraps
twotraps's picture

I'm sure he's a lovely guy but you don't pay them to sit in cash.   Like colleget tuition, its the same or higher every year regardless of the larger economy...as are wealth management fees, great gig.  Now that its in vogue to be cautious, everyone can look like they are looking out for their customers!!

Wed, 12/21/2011 - 15:24 | 2001915 s2man
s2man's picture

Short paper.  Got it.

I'll assume that includes FRNs and other forms of IOUs, equities, ETFs.  What did I miss?

Wed, 12/21/2011 - 15:35 | 2001957 High Plains Drifter
High Plains Drifter's picture

its strange how many talking heads on cnbc continue to this day talking about whether or not we are going into recession in 2012..........kind of academic.......no?

Wed, 12/21/2011 - 15:44 | 2001987 economics1996
economics1996's picture

The useful idiots.

Wed, 12/21/2011 - 16:07 | 2002057 Amused2Death
Amused2Death's picture

Not necessarily, you got the Bernank at the helm and there's no limit to how high he can hover so no, it's not academic...

Wed, 12/21/2011 - 15:42 | 2001980 Eagle1
Eagle1's picture

I worked for Merrill back in the late 60's and early 70's and have followed them since. They have a rich history of getting rid of anyone that was too open about not being bullish on america as they used to say.

Wed, 12/21/2011 - 15:48 | 2002001 brew
brew's picture

wonder how he's liking the tech sector today (orcl)...

Wed, 12/21/2011 - 16:05 | 2002051 apu123
apu123's picture

Say what you will about the long term, I will not be short anything going into tomorrow's fake unemployment numbers.  It is stunning there was not more fall out from the false years of housing data this morning.  I guess the ECB dumping all that free money into the insolvent banks is cause for celebration.  I am beginning to feel like one of those guys that wanders around with a sign saying "the end of the world is nigh".  I was trying to tell a family member about how some of the money printing and false statistics may cause upheaval in the future and I got a "fuck you you are just a doomer, if your so smart how come you are not rich and on TV"

Wed, 12/21/2011 - 16:16 | 2002100 walküre
walküre's picture

then go short the day after or the day after that.

the trend is your friend since June 2011....

Wed, 12/21/2011 - 16:06 | 2002055 Lotus
Lotus's picture

for those of you stuck in TVIX get out now!     the boys at Credit Suisse have got you mesmerized       just saying

Wed, 12/21/2011 - 16:13 | 2002080 Amused2Death
Amused2Death's picture

So he's basically long a bunch of equities, short a few, and newtral on PM's, did I miss anything?

Wed, 12/21/2011 - 16:50 | 2002205 Lester
Lester's picture

Anyone who "invests" money in anything other than physical or real property is an idiot...

The term investment implies by definition a commitment or determined holding. Average time of an "investment" in the market today is measured in nano-seconds. Anyone committing their funds on a more than couple days time-horizon is looking to get fleeced.

Wed, 12/21/2011 - 16:56 | 2002221 Stax Edwards
Stax Edwards's picture

Enjoyed this post, Good Stuff

Wed, 12/21/2011 - 22:46 | 2003237 Artful Dodger
Artful Dodger's picture

Even Rosie is making things sound "not that bad". Where'd the worry go - VIX down day after day, even if SPX is down 10 points. Even I've been looking for a "normalizing" market to go after illiquid bargain dividends into year end. I don't usually think like that...

Either the trance generators are working overtime or this market is simply not going to do worse than muddle around indefinitely. Or both.


Contrary Indicator

Wed, 12/21/2011 - 22:56 | 2003265 Ted K
Ted K's picture

I hope David Rosenberg reads this, it would do my heart good. Because there are very very few institutional guys, who are honest, act the same as they talk, and don't sell the individual investors down the river.  David Rosenberg is that guy.  There are lots of negative stereotypes about Jews.  Rosenberg is good with money, but he doesn't steal it or con it.  He earns it.



Thu, 12/22/2011 - 15:50 | 2005036 kelpie-capital
kelpie-capital's picture

I think Rosie is absolutely great. His analysis is always insightful and honest, he has never claimed to be a trader or a market timer.

Predictions for the Year....



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