Rosenberg, Gross, oil.

So I grabbed the bear by the throat, looked him right in the eyes, and I said “Bear, you have ’till the count of zero to put some pants on and apologise to the president.”

Opening (spoken) lines of the video clip to my current favourite pop/dance song. (BTW, the clip is hilarious.)

And what could be a better way of introducing the subject of this post!

David Rosenberg. Talk about a perma-bear. On the internet a good piece of advice is if you don’t like something, don’t read it. There’s about a billion or something web pages out there, plenty for everyone. But David Rosenberg is just so hard to avoid if you are keeping track of the US equity market, he is a perma-bear and a prolific bear. So, from time-to-time I have a read of him. Glad I do, ’cause a few recent articles have made some sense.

Bill Gross (of Pimco) is vying for a spot in the Panic! Calendar with his stirring up fear about ‘who will buy US Treasuries when the Fed completes QE2 purchases?’. Short answer is, probably you Mr. Gross. Late March/early April 2010 Mr. Gross was saying the same thing about the completion of QE1, then PIMCO was shown later to have been a net buyer. Not so much “WTF?” … as , “Yeah, right” … you don’t get to be a billionaire fund manager without a little gamesmanship.

But. this time, David Rosenberg answers:

The answer(s) is hardly complicated since we have a template for this in 2010. …
The yield on the 10-year U.S. Treasury note plunged to 2.66% from 3.84%.


In another piece, Rosenberg argues that the recent more than doubling of oil prices within a 2-year span is strongly indicative of a recession ahead in the US economy. While I am very skeptical of Rosenberg (he is a poster-child for both confirmation bias and an economic commentator’s habit of saying the same thing over and over until eventually reality coincides (at least for a time) ), I am turning up the wariness over this persistent rise in oil prices just a notch or two. Important note: I am NOT looking for an apocalypse in the US equity market, or anything like that, I will leave that for the zombie-bears, just noting that the persistence of high oil prices is a concern that is not being given adequate consideration out there.

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