#270 David Rosenberg: Nobody Sees the Recession Coming - But It's Already Here

David Rosenberg, founder and president of Rosenberg Research, believes recession odds are higher than 2022 despite nobody expecting one, pointing to Fed staff forecasting 50% recession probability and the most downbeat Beige Book since 1980. Rosenberg criticizes Powell for calling the economy "solid" while real GDP has been negative sequentially in 2 of the past 3 months and survey data suggests 1% contraction. He highlights a major market dichotomy with stocks up 24% while the dollar is in an 11% bear market, suggesting something is fundamentally wrong. The housing market faces a negative wealth effect as supply-demand gaps widen and prices start cracking. Sponsors: Monetary Metals: https://monetary-metals.com/julia⁠ Kalshi: ⁠https://kalshi.com/julia Links: https://rosenbergresearch.com/ https://x.com/EconguyRosie Timestamps: 00:01 - Introduction: Dave Rosenberg, founder and president of Rosenberg Research 00:49 - "Meat grinder roller coaster ride" - elevated policy uncertainty 02:15 - Tail risks removed: no trade war, regional conflict, or fiscal cliff 05:35 - S&P 500 multiple expansion: 18 to 22 in three months (4 sigma event) 08:30 - Housing market in "huge state of disarray" - prices starting to crack 11:22 - Survey data consistent with economy contracting at 1% annual rate 13:20 - Real GDP negative sequentially in 2 of past 3 months 15:24 - Nobody talking about recession despite higher odds than 2022 18:18 - Recession probabilities are binary - "zero or 100, not 60% pregnant" 21:18 - Mistakes from 2022-2023: didn't anticipate fiscal stimulus scale 25:34 - Big beautiful bill not stimulative - just extending status quo 28:20 - Housing supply-demand gap widening, negative wealth effect coming 32:42 - S&P 500 became growth index, small caps still in correction 36:00 - Fed staff said recession odds equal to GDP baseline forecast (50%) 38:56 - Beige book: economy declining slightly, more downbeat than 2007 44:32 - Powell calling economy "solid" despite weak data - credibility issue 48:04 - Fed damaged by "transitory" mistake, protecting legacy 55:17 - Next Fed Chair speculation: wants someone he can "push around" 59:04 - US dollar down 11% in bear market while stocks up 24% 01:04:13 - Closing: importance of liquidity and diversification