I liked this presentation by David Rosenberg which comes courtesy of one of the hardest working guys in journalism, Joe Weisenthal. I’ve disagreed with Rosenberg on the recession call in the USA for a long time now, but we’re on the same page about a lot of the macro trends. Here are three pertinent ones that are worth highlighting from the presentation:
Chart 1 – One of the weakest recoveries in 50 years - Rosenberg and I both agree on the de-leveraging effect from the balance sheet recession and its extremely depressing effect on GDP. This is one of the most anemic recessions in the post-war era. Not surprisingly, it’s the only one to occur during a de-leveraging so that shouldn’t be terribly surprising.
Chart 2 – Putting the housing recovery in perspective – I am substantially more bullish on housing than I was several years ago, but I am trying to keep things in perspective also. The housing “recovery” is pathetic. This chart summarizes the recency effect that has a lot of people saying we’re off to the races here….
Corporate profit trends are disconcerting – As I detailed earlier this year, corporate profits are likely to weaken and could potentially tip into a profits recession. Profit margins, weak global growth and the fiscal cliff are all big risks here. The deficit has been driving corporate profits to a huge degree in recent years so keep a close eye on that fiscal cliff situation. It will be as important as it’s been trumped up to be.