David Rosenberg: Even If The Fed Cuts Rates To 0%, A Recession Will Hit In 12 Months

by | Sep 23, 2019 | Emergency Preparedness, Experts, Forecasting | 16 comments

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    David Rosenberg, the Gluskin Sheff chief economist and strategist, is warning that a recession is coming. Rosenberg says economic growth in the United States will turn negative sooner than most investors anticipate and the Federal Reserve is powerless.

    Even if the central bank lowers interest rates to zero, a recession will still grip the U.S. within 12 months, Rosenberg predicts. “There’s a recession coming in the next 12 months,” he stated with fact last Thursday on CNBC’s “Futures Now. The Fed just lowered its benchmark interest rate last Wednesday by a quarter-point and Fed Chairman Jerome Powell signaled rates would only be cut again if there’s new evidence the economy is softening.

    However, Powell said he didn’t expect that to happen. The evidence is showing otherwise.

    Why Does The Federal Reserve Keep Slamming The Panic Button Over And Over If Everything Is Okay?

    “The only reason that he said that he’s optimistic on the outlook is because of exactly what the Fed is doing which is breathing stimulus back into the economy,” said Rosenberg, who came into 2019 with a recession warning and has been known as a perma-bear on Wall Street for decades.  Government numbers show that economic growth has not gone negative yet this year, but Rodenberg says that it is only a matter of time before it does.

    Because of the economy slowing, Rosenberg thinks that Federal Reserve chairman, Jerome Powell will continually be lowering rates through 2020. “I think that they’ll go in October and December and through 2020,” he added of the Fed’s likely decision. “The economy is already slowing down,” Rosenberg said. “Earnings are actually contracting.”

    Rosenberg stressed that it doesn’t matter how much the Federal Reserve decides to cut rates, and lowering them to zero will end up with the same net result: a massive recession.

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      1. I know these computers, their parts, pieces, and the network, inside and out.

        Depending on where you visit, it will definitely jam you up, in the middle of writing.

        Not naughty, racial, or religious words, but those pertaining to some market forces.

        I can retrace my steps, am strong, and in good spirits.

      2. Rosenberg is a well educated guy. I have read his newsletter for 25 years or so. His reasoning is sound. He seems to be a nice fellow. I like him.
        He has been predicting Deflation consistently for those 25 years. So far he has been wrong. Draw your own conclusions.

        • Stew,
          “He has been predicting Deflation consistently for those 25 years. So far he has been wrong.”
          What can you expect when the Fed and the government works very hard at keeping inflation at an artificial 2-3% per year?
          I would like to see a “depression”, but that isn’t going to happen.
          Also why pay for a newsletter where the guys is consistently wrong?

          • Well yes, that’s true. But also the economic planners continue to come up with innovative ways to temper the runaway inflation. Dr Ron Paul referrs to this as stag flation.

            People with the lowest debt loads will be most insulated from economic downturns. We have not had ‘growth’ per say, but it certainly looks that way with the continually rising numbers. That’s just inflation coming home and the QE money coming out of bond markets and others, finally landing at the end of the line.

            Think about the absurdity of the approach where a fiat dollar backed by nothing devalues 2% or more yearly, and the economy pundits hail the 2-5% housing market and consumer goods price increase as having represented value in the market. The price increased, the value of the asset runs the opposite direction. Hence; Inflation. CPI is a poor indicator because the monetary supply chain is lengthy indeed. Actual devaluation of the currency happens retroactively, sometimes years or decades later as the first receivers of money attain fresh monies through negative lending rates coupled with a debt management model which is an infinite closed cycle instrument of debt repurchase from each other.

            How much sense would it make for regular people to purchase each others debt, and then sell it back to the next guy the day later? The plunge protection team reads current and projected measurements, they can’t predict the exact future how QE money will return to the supply stream. It’s the ‘let them eat cash’ argument.

          • “What can you expect when the Fed and the government works very hard at keeping inflation at an artificial 2-3% per year?”
            Rosenberg acknowledges that but feels that ultimately the debt bubble will run it’s course. Debt reduction is ultimately deflationary. Eventually he will be right – but then so is a stopped clock.

            “Also why pay for a newsletter where the guys is consistently wrong?”
            I didn’t pay for it. The newsletter was from Gluskin Sheff, a Canadian wealth management firm. I received it because they wanted my client’s business.

      3. Hell, I can predict a recession. It is a normal part of our economy. I give my advice for free.
        The timing, I don’t have a clue. Nor does anybody else.

        • A dollar saved today is no longer worth more than a dollar tomorrow. Throw your multipliers out the window and focus on carrying a lower to nill debt load instead. You don’t own it, until the last bill is paid. So much for going to the mattress and burying change jars. Although if you’re dealing with just weights and measures you’ll stay on the price upswing, while hopefully maintaining constant value. If you keep it in the bank you’re not really winning, except on paper. If you keep it at home, you’re not really winning because all physical assets can change hands at a moments notice, permission given or not.

          There are no easy answers except to stay debt free which is the best insulation anyone can give themselves in this decade of a federal reserve 100 year anniversary. If you want to promote a sound economy, thrift is the new new back again new idea. It’s not good business, unless it’s old business. Think about data monetization, that is the biggest economic sector at the moment. Data worth is the purest expression of fiat money we’ve ever seen. Nobody sensible would pay gold and silver for fungible data at this scale. But as it’s other peoples money, and it’s working for now, the game continues for another few rounds. You are watching economic theater.

        • Bingo.
          The important thing is to know the proper investment response when it happens.

      4. The trillions in debt (fractional reserve banking) coupled with ridiculously low interest rates divorced from the reality of savings barely prevented a massive deflationary spiral. The root cause was debt becoming the economic driver in the absence of manufacturing. The collapse and inflate cycle is not being debated for its validity because that puts the entire economy into question. It’s all phony bullshit.

      5. I appreciate your opinion. You do know that recessions are and always have been a part of the normal business cycle? Why goad the sheep here into thinking they need to dig a pit in their backyard and click the amazon link to more shit they’ll never need [and never repay their credit card balance for a castle-full of end-of-the-world crapoli]?

        Another example of throwing shit up against the wall and see what sticks “journalism”

        You commy.

        • Bert

          Interest rates derived from supply and demand capitalism based upon now much is saved to determine what the cost is to loan will have cyclic ups and downs. Meddling with the above setting rates divorced from this is planning the economy. When private bankers do it it’s by definition fascism. Every intervention ends up creating distortions in value obliterating capitalisms greatest asset, “price discovery” thus creating even more instability. The “cycles” become larger and more frequent.

          We live under a hybrid of fascism / crony capitalism at the top with a welfare state becoming totalitarian at the bottom. It’s disguised as capitalism for public appeasement. .

      6. h ttps://pics.onsizzle.com/try-communism-did-it-work-no-it-wasnt-real-communism-1395858.png

        For some reason, capitalists never blush, when communism is compared to state capitalism. You work with too-big-to-fails and ppp’s and criticize when a foreign power nationalizes one of *their industries.

        My theory is that they stoke a figurative dumpster fire.

        It’s not protectionism when a surplus of disenfranchised workers is built into the system.

        You have city planners, who could measure spending power in their district, relative to the amount of consumer debt and live bodies, there. They decide what kinds of houses and business are allowed and what it is the carrying capacity, and they willingly exceed the occupancy limit.

        That’s pet hoarding, not a literal competition. When you allow a quota case, slumlord employer to grade you, based on what they call “intangibles”, you “capitalists” are being superstitious.

        • Clown World

          When one looks at the functional similarities and differences between “us and them” it’s obvious that the similarities of economic control are common. “Let me control a nations money supply and I care not who writes its laws”. Now with that accomplished the social end of an omnipotent government is appearing. The difference between Socialism & Fascism is just a question of which few control the many.

          • They (we) complain about imbalances being structured into an unfair system.

            Nothing really happens, after some temporary state of anarchy, or some fake color revolution. Maybe, the motto or the noble lie changes. Maybe, there is a changing of the guard or new management or a new front person for the incorporated country.

            Very close to the surface, it appears to be the same exact regime and the same exact structure, usually, as best I can tell.

            Corporatism is something dirty, that follows mankind, wherever it goes — like roaches, rats, sewers and undertakers.

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