I have followed David Rosenberg, who is the Chief Economist/Strategist at Gluskin Sheff, for about 2 years. He is known to be out of consensus and really gives you an alternative look at where we are in this recovery cycle versus many of the main stream views that are currently circulating. In today’s morning note, Rosenberg highlights where we would be if this was a “normal” cycle:
- Employment would already be at a new high, not 8.4 million shy of the old peak.
- The level of real GDP would already be at a new cycle high, not almost 2% below the old peak.
- Consumer confidence would be closer to 100 than 50.
- Bank credit would be expanding at a 14% annual rate, not contracting by that pace.
- The Fed would certainly not have a $2.3 trillion balance sheet.
- The government deficit would not be running in excess of 10% of GDP or twice the ratio that FDR ever dared to run in the 1930s.
- There would be a ‘clean’ 5-6 months’ supply of homes on the market, not the 21 months overhanging as is the case now when all the shadow inventory is included from the foreclosure pipeline.
- The funds rate would not be near zero and one in six Americans would not be either unemployed or underemployed.
- Mortgage applications for new home purchases would not be down 13.9% year-over-year (just reported for the week of March 12) on top of the already depressing 29.4% detonating trend of a year ago.
If you are interested to receive Dave’s morning note, you can sign up here: Gluskin Sheff
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