David Rosenberg – A Near-Certain Recession in Q2

The odds of a “hard” recession are 99%, according to David Rosenberg, and it will start in the second quarter. Indeed, he said, it may have already started.

“There is a 1% probability of a soft landing,” Rosenberg said.

Rosenberg was the opening keynote speaker at John Mauldin’s Strategic Investment Conference, an event that I have attended for many years, both virtually and, in prior years, in person.

Rosenberg is the president and chief economist and strategist of Rosenberg Research & Associates Inc., an economic consulting firm he established in January 2020. Prior to Rosenberg Research, he was chief economist and strategist at Gluskin Sheff and Associates Inc. from 2009 to 2019. From 2002 to 2009, he was chief North American economist at Merrill Lynch in New York.

Before I look at what Rosenberg said, let’s go back to his keynote at this conference a year ago. He wrongly predicted that the U.S. would be in a recession in the second half of 2022 and equities would suffer a bear market with a 30% decline (the actual return was -18.01%). He wrongly predicted that housing prices would decline in 2022 (the Case Shiller index was up last year), but he correctly predicted that inflation would subside. He was somewhat correct to call on investors to be “defensive” in stocks, but wrongly predicted that bond yields would go down.