The wall street bear who claimed that an economic recession in 2019 will be “virtually unavoidable” has doubled down on his assessment. He warning that the corporate buybacks will fuel the next recession.
Gluskin Sheff Chief Economist and Strategist David Rosenberg acknowledged that his prediction about the recession may have come a bit too soon, but the risks in the United States economy are not to be ignored, he warned Thursday on CNBC‘s “Futures Now.” Rosenberg said that people just aren’t looking in the right places and that once they do, they’ll know that there’s a recession coming. This bubble will not remain this inflated forever.
“People say, ‘Well, I can’t see the recession, I can’t see the recession.’ It’s like saying, ‘I can’t smell the carbon monoxide,'” Rosenberg said. “I’m getting the same rhetoric and the same pushback and questions I was back in the latter part of 2006. Remember, the Fed stopped raising rates in 2006, and in 2007, by the tail end, we had a recession nobody saw coming.”
The same thing has happened to almost any media outlet who attempts to warn people of the upcoming recession so that they have time to prepare themselves for it. Rosenberg is basing his prediction on both the Federal Reserve’s recent series of interest rate hikes and what he called an “unprecedented” rate of publicly traded companies buying back their outstanding shares.
Rosenberg also noted that 10 of the Fed’s 13 tightening cycles since World War II, have pushed the economy into a slowdown or a recession. “More often than not, that degree of monetary restraint in the past has landed the economy in an economic downturn,” he said. “The only question is whether it’s in the second half of this year or the first half of next year, but I think that what investors have to know is that the business cycle’s not dead and that a recession is out there probably sooner rather than later.”
While the Great Recession was fueled by subprime mortgages, the next recession will be fueled by corporations. Their immense debt burden and corporate buybacks of stocks will eventually cause major problems for the United States. The next recession won’t look like it did a decade ago, however, it’s still going to get ugly, according to Rosenberg. “I don’t think it’s going to be a deep recession, and it’s not about the consumers or housing or the banks,” he said. “It’s really about these bloated corporate balance sheets. There will be a price to pay for the unprecedented debt-for-equity swap we did this cycle, borrowing at low-interest rates and buying back your stock. That is certainly something that is not sustainable.”
That does not mean the average American and consumer is shielded from another recession. It simply means it may not be as disastrous to those who haven’t over-leveraged themselves as others. The bond market is already signaling a slowdown, said Rosenberg to CNBC, and the economy is flashing all kinds of signs that buyers should beware.
Regardless of how a recession looks or affects people, there are ways to mitigate the disaster. Prepare your personal finances the best you can, and make sure you avoid taking on more debt right now.
Meh.
This is one reason we prep. Bring on the disaster! I’d like to see an extreme reset as we cannot go on this way. The scum elites and their minions want to kill us but that shit works both ways. I intend to use some of this ammo on someone guilty of fucking up my children’s futures.
” Remember, the Fed stopped raising rates in 2006, and in 2007, by the tail end, we had a recession nobody saw coming.”
Who the hell is this guy kidding? I saw it coming back then too and so did my wife. You’d have to be a complete idiot not to! We were prepared for the last one and this one too. Thanks for the article capt. obvious….
+1
I have SELDOM ever seen an “expert” that was ever right. And this is one of them.
Could we please stop calling the lunatics running the US regime, all of them, as “elites?” I use the word, ‘parasites’ as that aptly describes their behavior. They are an elite cadre of absolutely nothing. Their lives and souls are bankrupt.
You are right. I’ve been calling them the scum elites.
I heard that a plane flew into a mansion owned by Rothschild.
I can’t figure out what that’s supposed to accomplish. It’s weird. Who can afford to wreck a plane? Nobody I know. Maybe one of those Rothschilds got high and thought they were landing a helicopter on the roof.
Lol
More likely a false flag committed to prevent open criticism of the wealthiest banking family in the world.
Who knows?
Who cares?
But it is still kinda strange.
.
Hopefully some of the scum inside were killed.
HAPPY MOTHERS DAY YOU MUTHERS! 😀
Brought to you by the deregulation of the Financial Sector with the evisceration of Glass-Steagall.
Bought a 2020 Kia telluride yesterday. It’s been years since bought a new car. traded the wife’s Sedona minivan in. Was at end of warranty. Wasn’t gonna but I think the van was starting to have electrical problems heater fan wouldn’t work unless you kicked the bottom of the dash power sliding door on one side wouldn’t work anymore USB plugs worked when they felt like it. Front end starting to make clunking noise. Trouble turning the key so ignition switch. Was gonna run it another 50k miles but figured if I got all these problems now it’s downhill from here. Anyway the telluride is awd leather seats 18 inch wheels looks like a Range Rover style wise. After discounts paid $32500. This is a lot of car for the $. SUVs in this class like Honda Pilot the new Chevy blazer Ford Explorer are stickered at 50k they aren’t as nice imo. It’s the cats ass. Anyone looking to buy a new SUV should take a look at these.
Fffffffffffffffffffffuck????
thirty two THOUSAND?
I’m *supposed to be* “middle class” (chuckle yeah right) and I’ve never in my life paid more than 10k for a car. 10k is mightily pushing it. Like a lot pushing it. Like A LOT A LOT pushing it.
Know the best way to avoid problems with shit like USB plugs and auto doors… DON’T HAVE ANY.
Christ they’re over-complicating shit. I don’t wanna work on it. Ain’t nobody got time for that. You plug a $20 MP3 player into the cigarette lighter, use your cell phone or a Garmin for GPS, if the “peripherals” go tits up guess what, the car’s in no way affected. Plug in another.
Last car: $400. Ok, $500 because some idiot mechanic stripped out the oil pan drain plug and I had to replace the entire pan (which was no fun but it did work). If I had bothered… to actually MAKE the “stripped oil drain plug saver” I’ve thought of… it woulda took 5 minutes. I’m gonna be making it now because I see the need. In a lot of cars you gotta pull the entire engine to get that pan off and these guys strip out the goddamned things constantly.
My other is down with wheel bearing problems. Seems 2003 was a bad year for Honda. Never thought I’d say this about a Honda but it’s had problem after problem. All fixable though. Doing the wheel bearings myself. Never use aftermarket PepBoys crap if you want it to last. It ends up coming out the same on price when you factor in that the PepBoys shit has 1/4 to 1/3 the lifespan on average as dealer parts. But there are places you can get dealer parts at discount online.
What did anyone expect different from the vicious cycle known as capitalism?
Stupidest thing about Capitalism? “Let’s harness the power of evolution and translate it symbolically into a system!” Also known as “Law of the jungle” with paper tokens.
Smart (sarcasm). We spent 10,000 years trying to get rid of the goddamned unbearable unfairness of nature only to recreate a paper copy of it. Why the fuck even HAVE a society?
Stupidest thing about Communism/Socialism? It’s tyrannical monarchy with a lame (and utterly transparent) cover story. By design.
Can somebody get started on an Option 3 here? Norway’s kind of got this piecemeal thing that’s not bad…
If you short the market you better watch it closely and cover quickly. Those that short will get burned. Never, NEVER bet against the Federal Reserve.
Why perpetual new highs will be set: The federal government is increasing their spending YOY, they must and forever will, the fed will print, each new dollar created goes through Wall Street many many times.
New s&p highs again before XMAS.
No collapse until the cost of fuels and oil stops the truckers. In other words, you’re prepping because you have too much credit available, and a mental disorder involving a plucky chicken and an acorn. LOL