Prominent economist says there’s a “99% chance of another recession by 2012”

by Lee on June 21, 2011 13:33 pm · 1 comment

David Rosenberg bears the lofty title of Chief Economist at Gluskin Sheff & Associates.

It’s not difficult to figure out that those of us at put very little faith in the words of most economists. They’re like members of a barbershop quartet – one may be a baritone, another may be a tenor and a third may sing bass, but they all sing the same song.

The economists who catch our attention are the ones who aren’t afraid to go against the mainstream – the ones who speak truth to power and take positions that aren’t endorsed by the criminals in Washington, DC.

David Rosenberg, for example, expressed his heresy in an interview with Mike Shedlock at We’re guessing that he won’t be invited to dinner with Timothy Geithner anytime soon.

Bloomberg: How certain are you that we may be headed for a recession?

Rosenberg: I think that by 2012, I would give it a 99% chance. I say that because as an economist, you have to be part historian. When you have a manufacturing inventory cycle recession, they are usually separated 5 years apart. But when you have a balance sheet recession, credit contraction, asset deflation (for example residential real estate), the downturn tends to be separated every 2 to 2.5 years. … Economists call this a soft patch. It’s not like this is a soft patch. Basically, when all the stimulus is gone, you get to see what the emperor looks like disrobed. It’s not a pretty picture.

Rosenberg may be guilty of mixing his metaphors, but he seems to understand the problem better than most of the economists in Washington, DC and on Wall Street.

Or, perhaps, he’s just more honest than most of them.


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