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"They say unemployment rate, but they really mean" the S&P 500 (SPY), says David Rosenberg,...

"They say unemployment rate, but they really mean" the S&P 500 (SPY), says David Rosenberg, referring of course, to the esteemed members of the FOMC. "After all, to get the wealth effect to work on spending, you have to generate the wealth," he continues. As for the sustainability of the rally in both equities and fixed income, Rosenberg is having déjà vu: "Distortions caused by negative real interest rates, the mis-pricing of risk and promotion of leverage sounds a lot like the previous cycle … enjoy it while you can." (Also: NYSE margin debt signals return of leverage)
Comments (10)
  • I am enjoying it (my new wealth) while I can , thank you......enjoy your knowledgeable carping, mr. Rosenberg......(creden... unknown and finances going nowhere).
    12 May 2013, 12:55 AM Reply Like
  • Gross Private Domestic Investment as a % OF GDP is currently 13.5%....the low for the Business Cycle in the 80's was 14.6% (4th qtr 1982)...the low for the Business Cycle in the 90's was 13.1% (1st qtr 1992)...looks like there is a lot more room to run in this economy....
    12 May 2013, 01:39 AM Reply Like
  • Another economist forecasting a downturn for over 3 years now. I am sure Mr. Rosenberg will be correct one day but the opportunity cost of following his suggestions are material.
    12 May 2013, 11:25 AM Reply Like
  • Hope I don't sound clueless & hope you don't mind some comments from a guy much less sophisticated than most here, but to Mr Rosenberg or U.S economists i would ask this"
    If the top 10 largest companies in the S&P 500 in 2011 were: Exxon Mobil, Apple, IBM, Chevron, General Electric, Microsoft, AT&T, Johnson & Johnson, Procter & Gamble and Pfizer,assuming no material change, I wonder how many of these companies are reducing employment in the U.S. and expanding overseas? So how the hell is this a proper gauge?
    I just briefly read
    and I wonder how it will get better? Anyone try to get their high school kid a summer job lately?
    It seems that because our political parties cannot agree on any type of fiscal policy to help plant the seeds for prosperity "inside" this country, because we will not demand and make it economical to invest in this country anymore, americans now have to rely on the banking system to run fiscal policy in this country?
    I feel like I am witnessing the intentional destruction of the middle class of our country.
    12 May 2013, 12:57 PM Reply Like
  • The destruction of the middle class. It's not intentional, it's just capitalism. It's good business, in the short run, until the consumers can't afford to consume any more.
    12 May 2013, 04:09 PM Reply Like
  • The class system is a socialist construct.
    12 May 2013, 08:40 PM Reply Like
  • Nothing but compressed air......
    I think that summarizes the situation.The 10 yr at 1.8 give or take is a shame. Ben has taken from those who saved and planned and were conservative in their lives and replaced it with debt and risk. Deflation is a very powerful force but cleaning out the system can never happen by pouring on debt. Your money is worth nothing because the Fed Res used its powers to destroy the value of saving. We can only pray that God has given us a second chance as we frack our way out of this mess. China sets up dollar replacement deals while the Gov sits on Ben's last opportunity to act. We need a big deal and soon.
    12 May 2013, 01:11 PM Reply Like
  • Apres moi, le deluge!
    12 May 2013, 03:38 PM Reply Like
  • We speak of wealth as if it were tangible, today our mothers love is the real wealth.
    13 May 2013, 03:24 AM Reply Like
  • all I can say is look at the st Louis m2 mooney velosity chart,it is lower than 1964. Money is stagnant and not getting through to the economy. We have lost 5 million good 50k plus jobs in the last 5 years.


    Rich h
    14 May 2013, 12:11 AM Reply Like
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