David Rosenberg – What Went Wrong?

Greatest Economist Ever?

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it” -Albert Einstein

D’oh

Consensus said…

exactly a year ago that:

  • The fed funds rate would be 1.25%
  • The 10-year T-note yield would be 3.0%
  • WT! would be US$75 per barrel
  • The S&P 500 would be at 2,233
  • Canadian dollar would trade at 031.16 or 86.2 cents US.

David Rosenberg – Perpetually Optimistic – But A Dose Of Reality Sets In

David Rosenberg - What Went Wrong

David Rosenberg – Moving The Goalposts On The ‘Dots’

[drizzle]David Rosenberg - What Went Wrong

David Rosenberg – Is This An Apology For The December Rate Hike?

“Given the risks to the outlook, I consider it appropriate for the Committee to proceed cautiously in adjusting policy” ‘The current stance of monetary policy appears to be consistent with actual economic growth modestly outpacing potential growth and further improvements in the labor market.” “Looking forward however, we have to take into account the potential fallout from recent global economic and financial developments, which have been marked by bouts of turbulence since the turn of the year.” “It is still my judgment that inflation expectations are well anchored, but as I will shortly discuss, continued low readings for some indicators of expected inflation do concern me.”
Notes:

Fed Chairperson Janet Yellen at Economic Club of New York – March 29th 2016

David Rosenberg – McKinsey On Finance: Perspective On Corporate Finance & Strategy

David Rosenberg - What Went Wrong

Findings from McKinsey & Company:

“While we cannot say for certain whether these sectors will deleverage, we do know that nearly every significant financial crisis in the post-World War II period was followed by a lengthy and painful period of deleveraging. These episodes lasted on average six to seven years, with total debt as a percentage of GDP declining by muggy 25 percent. GDP contracted in the initial years of deleveraging but rebounded in the later years. If history is a guide, therefore, we would expect a significant period of deleveraging to come, which will dampen GDP growth”

See full slides below.

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