Chief Economist David Rosenberg warns against buying US stocks, calls on the Federal Reserve, predicts an economic slowdown in a new interview. Here are the 10 best quotes.
- David Rosenberg expects US stocks to underperform in 2021 as they have jumped to very high levels.
- The veteran economist warned that the end of the fiscal stimulus would erode economic growth.
- Rosenberg said the Fed cannot prevent the next market correction.
- See more stories on the Insider الأعمال Business page.
David Rosenberg sounded the alarm about US stocks, predicting an economic slowdown next year and warning that the Federal Reserve won’t be able to stop the next market slump of recent times. RealVision Interview.
The chief economist and strategist at Rosenberg Research & Associates also called on the Federal Reserve to support asset prices, beat Japanese stocks, and emphasized that the Evergrande fiasco could dampen global growth.
Here are Rosenberg’s 10 best quotes from the interview, slightly edited and condensed for clarity:
1. “At this point in the stock market, you’re chasing nickels in front of the steamer. We’ve reaped all these returns, and there’s not much left.”
2. “The US stock market is trading at multiples that we have only seen back in the last century. And that was from 1999 to 2000, during the dot-com bubble.”
3. “If I had only been an investor in stocks for a long time and had to fully invest in stocks, I wouldn’t be in the S&P 500 right now. I would be in Japan, and their valuations are more convincing. The dividend stream you pay for in Japan is much more convincing than it is in US stock market right now.”
4. “It will be a challenging year for stocks. Not everything will go down, but if you are a passive investor you will probably be better off being in cash than being in stock market indices.”
5. “We are in an immense quagmire of uncertainty in many different respects—financial, political, economic.”
6. “I shudder when I think about what the next recession will bring. Global debt is $300 trillion, it’s 350% of GDP. Be careful what you wish for as prices enter the next price cycle, because it will probably be enough to tip the scales toward Recession – maybe not next year, but maybe the year after that.”
7. “Gradually it did nothing for the labor market, QE boosted risk appetite and animal spirits and had nothing to do with the labor market. Why don’t you just come out and say, ‘We’re doing QE because we think we’re in an asset bubble, and we’re trying to defuse it?’” “- Criticizes the Federal Reserve.
8. “We will have the mother of all fiscal stimulus withdrawals next year. It’s equivalent to roughly 3 percentage points of GDP. Next year’s financial crisis will be the equivalent of 250 basis points of Fed rate hikes.”
9. “The Fed won’t be able to control the market very much. They will come in with firearms, but they won’t prevent a correction. But they will be there to pick up the pieces.”
10. “The Evergrande situation is really emblematic of what has happened with respect to the debt and property bubble in China. It might be contained within China from a financial point of view since they essentially own all the bonds. But China accounts for roughly 20% of global GDP, So it will definitely have a global economic impact.”