If you’ve been a follower of David Rosenberg’s over the years and think there is absolutely nothing that would turn him bullish, think again.
The Gluskin Sheff economist and strategist, who’s been everything short of a perma-bear for, well, a long time, this morning offers up a list of 10 things that would turn him bullish in the market.
Of course, the bad news is that meeting all the items on the list is likely impossible. For that matter, meeting any combination of three or four of them seems far-fetched.
Nevertheless, here it is, the road to bullishness:
1. Eliminating dependence on foreign oil.
2. Rewriting the tax code to promote savings and investment while cutting both loopholes and tax rates.
3. Reversing the increase in debt-to-GDP ratio, which is getting ever closer to 100 percent.
4. Getting banks to write down the principal on mortgages so upside-down homeowners can regain equity.
5. A “creative strategy” to incentivize people to get back to work.
6. Tort reform, particularly pertaining to health care.
7. Using the savings from tort reform for educating the unemployed.
8. Enacting regulatory reforms for the financial sector “that actually have some teeth.”
9. Repatriating foreign profits from US companies.
10. Increasing immigration inflows.
Give the list a quick read, and it’s clear to see that Rosenberg doesn’t have much hope for long-term prospects. In fact, he thinks a reversal in the market’s 90 percent run-up from the March 2009 lows is likely on the magnitude of the burst in the technology and real estate bubbles. He says the recovery is “made of straw instead of bricks.”
Just don’t label him.
“I refuse to be labeled a perma-bear even if I have been bearish for a long time. Having been a bull in the 80s and 90s I do know what it feels like to wear rose-colored glasses,” he wrote in his daily newsletter this morning.
“An economic expansion and bull market built on rampant expansion of the Fed and federal governments’ balance sheet is neither sustainable nor desirable,” he added. “I am desperately looking for reasons to turn more optimistic, but to do so some major policy shifts have to take place, like the ones above.”
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