David Rosenberg of Gluskin Sheff joined Consuelo Mack on Wealth Track this weekend to discuss his outlook for the economy. Rosenberg isn’t just bearish. He say the US economy is in a modern day depression similar to what Japan has suffered from for the last 20 years. He bases this view on the idea that de-leveraging tends to coincide during a prolonged period of economic weakness that is not merely consistent with recession.

Rosenberg says we’re just 4 years into a depression that will likely last 7-10 years. He says the economy is likely to begin contracting again in 2012 and that the employment situation is going to deteriorate further. He calls the MF Global bankruptcy the Bear Stearns of 2011.

Contrary to common misconception, Rosenberg is not bearish on everything. After being a long-time US Treasury bull, Rosenberg is sounding a bit less bullish on government bears. He says the love affair is over. He now prefers corporates and income at a reasonable price.


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Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • Octavio Richetta

    If one departs from the premise, as I have written many times in the last couple of years, that the European Sovereign debt crisis is MUCH BIGGER than subprime, then. Yes BIGGER CUCARACHAS will follow. BTW, I am now at a confiteria (coffee shop – bar) in an Argentinean cattle town, and guess what? I cannot watch the video in my IPAD. Will have to wait until I ge to my PC at home. I am always too early but the time when Apple will again be a BIG short will come…. Even though there is the possibility they will do better without Steve Jobs, whom I believe right now is grossly overated.

  • Ben Wolf

    I don’t see how we can have a recovery when everyone knows the banking sector is a bomb primed to explode at each and every opportunity. Trust is a critical commodity too, and no one has that any more.

  • JWG

    A recession occurs when your neighbor loses his job; a depression occurs when you lose your own. The Great Depression was a catastrophe in which 25% unemployment occurred in a work force that was primarily living in one wage earner households in a gold standard world. It seems unimaginable today in the West. If Greece defaults and is expelled from the Eurozone, and the rest of the world tells the Greeks “sink or swim”, we will see whether it remains unimaginable. If the Greeks manage to survive and then start to prosper under the Drachma, others in the periphery will follow in its wake.

    Rosenberg offers some optimism at the end of the video, if the political situation changes in the US in 2012. He points to Reagan in 1980 at what was the end of a terrible series of events as an example of a turning point that did not seem obvious at the time. Given the decreasing responsiveness of the US real economy to debt over the last 30 years he may need an alternative ray of hope.

  • JKH
  • Ashkat

    Rosenberg is a very well-written commentator for certain. But the outcome of his content has been less than average and way below the market return. Its funny how the bearish and disgruntled talking heads dominate the media mantle. If these people actually managed people’s money, they would be out of business.

  • Octavio Richetta

    I think you are confusing Rosemberg’s bearish forecast for the economy with his investment performance/recommendations. He is not a “market timing” strategist trying to tell you how to ride the bear market. If that is what you are looking for and have found one please let us know!

  • PDW

    Submit ideas for stories you would like The Real News produce. Vote on the stories you like. We will produce the stories that are most voted for.

  • VII

    2016 with a candidate from jersey will be our 80s Reagan 18 year bull market moment…we have a long way before we hit long term trends. 2012s candidate is just warming the seat for President Christie

  • Wilma

    Does Christie really need any seat to be “warmed”? C’mon.

  • jswede

    again, and again, and again we hear mis-information like this about Rosie’s “poor” performance. Let’s see – back in 09, in general, he said “stay out of stocks and buy gold and corporate bonds”, yet nobody heard anything past “stay out of stocks”.

    Returns since then:

    Gold: +100%

    IG bonds: +25%

    SPX: +75%

    He also recommended Canadian stocks, which are +50%.

    They did not like the risk/reward in stocks, so they found return elsewhere. Since when does this type of performance put someone “out of business”? Gluskin Sheff manages $5billion – hardly out of business.

  • HumbleGrizz

    You don’t make dough by following truth and logic and fundamental mathematic-economic equations – which Rosenberg articulates; it’s herding, psychology and ‘perception is reality’ investing that makes you dough in these markets – it’s the 1st derivative which matters, and not the 2nd derivative wherein lies the truth about what Rosenberg speaks. All roads lead to austerity, unless those roads lead to foregiveness, or a combination thereof…….

  • F. Beard

    “Reinforced” would appear to be the greater need.

  • Bond Vigilante/Willy2

    Perhaps Rosenberg also noticed that foreigners have become net sellers of T-bonds.

  • GRock

    2012 recession coincides with the next presidential/congressional elections. I think the next recession will be after the 2016 elections. Whomever is put in will get credit and probably reelected for another term in 2016. So hopefully we’ll have A Reagan in 2012 emerge but I don’t see any robust economic cycle emerging till mid way in the 2016 term. It will take a lot to fix everything to start growth anew. Hopefully the seeds for this will be sowed during the next two presidential terms and America will climb its way up and make the 21st century an American century as the 20th was.

  • Lance Paddock

    Exactly! Rosie’s clients have done quite well since the crash, and did spectacularly better before then. He also always recommended stocks, just dividend payers instead of some of the stuff that did best, for a while. That out-performance is fast eroding. Anyway, his clients did fine.

  • Jack


  • hoops

    Hmmm… Steve Jobs over-rated.

    The guy who along with Woz invented Personal Computing with the first top selling PC the Apple II
    The guy who popularized the GUI and gave us a friendly face to computing with the Mac
    THe guy who brought us the most iconic TV ad of all time “1984”
    The guy who because of his obsession with typography gave us the Desktop Publishing industry
    The guy who gave Tim Berners Lee NeXTSTEP on which to create the WWW
    The guy who brought us the first CGI animated feature and 11 CGI blockbusters and counting
    The guy who brought the OS he’d developed in the wilderness back to Apple to save their bacon OSX = NeXTSTEP
    The guy who brought us the first usable digital music player (iPod) and reinvented the music business with iTunes
    The guy who brought us the only Computer Brand able to sustain a flourishing retail operation
    The guy who re-invented the phone business and brought us the first usable smartphone the iPhone
    The guy who finally gave us a tablet computer that worked and invented a market no else seems to be able to get

    Not to mention taking Apple from the verge of bankruptcy to the largest market cap on the planet

    Yeah he’s over-rated.

    Steve will be missed. But they will be able to coast on his legacy for at least 5 years , maybe 10. You will know the end is nigh when they get some bozo to run the place whose back ground is marketing.

  • El Viejo
  • El Viejo
  • Fabian

    I’m running an eMac (the first Intel) since Spring 2006, upgraded to Snow Leopard (that’s two OS generations) after buying $ 25 of RAM. I’m going to reach 6 years with the same machine with an updated OS! That’s value for the money and unthinkable on PC and I give full credit for that to Apple and Jobs.

  • Fabian

    Interesting interview and I agree upon his thesis that you’ve to seek cash flow. I would have liked to hear about stimulus counteracting deflation forces. Stimulus, monetary or fiscal, is not over (Europe has barely started) and it doesn’t have to come from the States (which did its part so far).

  • ES

    Seeing how there are only 20 comments on this story and not 200 I conclude that we are in a depression. And this new is so stale nobody cares to comment on it.

  • Dismayed

    Not so unthinkable on a PC. My son is still running the Win XP PC that I bought in 2005. I haven’t upgraded RAM nor have I upgraded the OS – not necessary because Win XP was/is a good OS.

  • Dismayed

    Christie won’t run for president – health problems will overtake him.

  • John D

    Good one, Wilma.

  • El Viejo

    Another video with Rosenberg:

    AND a link back to on the new home page.

  • http://None.Individualinvestor. Douglas Kanarowski

    Nice to see that David Rosenberg has concluded that we’ve been in a depression for at least 4 years. So, you could say that this “news” is 4 years old. Did anyone see it begin? Well, I reached that conclusion and wrote that essay in September of 2007. A Depression is best defined as an extended period of time where the standard of living of the average citizen declines. So Rosenberg is easily correct. However, I would dispute his projected ending date.

  • http://None Clay

    Take away all gov’t subsidies available today to taxpayers that were not available at the beginning stage of the Great Depression(?)such as unemployment, HUD, social security, food stamps and possibly others and I suspect today’s situation might be eerily similar to the Great Depression.

  • Illini

    Amen to that.

  • Brittney Defrancisco

    Hi man! I quite agree with your thoughts. I really appreciate what you’re providing here.

  • Jeff Lustman

    Hoops: Great letter.

  • Chris of Stumptown

    For those that would rather read the transcript:

  • SAndy V

    Steve over rated? Hmmmmmm…. Bill Gates is over rated. I have 5 MACS. One is 10 years old and is still running smoothly. My last PC lasted less than 4 years before I had to replace parts – which I didn’t. I just junked it and moved on.

    I have to agree though the iPad would be nice if it supported Flash.

  • Dom

    Don’t forget…

    Steve Jobs… the guy whose company employs child labor in China to assemble Apple products.

    Personally I’m glad such a horrible human being is gone…

    btw people were using mp3 players and handheld smartphones long before apple products came out… just because a large portion of the lower half of the bell curve couldn’t figure out how to use them does not make a guy who made minor design improvements anything special.

  • Dom

    Sorry to say but the US is not getting out of this hole for at least another 10 yrs.

    There are major systemic issues that are not being addressed such as broad corruption of the political sphere and persistent use of debt to float the gov’t bureaucracy which barely does its function due again to corruption (not necessarily lack of quality workers or funds).

    Beyond that we have no manufacturing base for the blue collar class to be enabled to making a wage which can support families with 2-3 children even with 2 working parents.

    Lastly, the social-cultural system in the US is so broken that now it is more common for a child to come from a single parent family, a divorced family and most likely never been exposed throughout their entire childhood by an organized religion (and sorry Mormonism and Scientology doesn’t count in my book).

    These problems won’t get solved for at least a generation… until then all the stuff in our homes will be “made in China” and your children and grandchildren can look forward to working as a customer service rep at a call center or pushing carts for the Waltons at Walmart…