By all accounts, David Rosenberg of Gluskin Sheff is an understated fellow – humorous, self-deprecating, softly-spoken and quietly ironic.
Yet it is easy to read one of his “Breakfast (or Lunch, or Tea) with Dave” missives, dispatched daily to clients and fans, and imagine a shrill, mono-tonal, red-faced fanatic, shouting down all those around him.
Because Rosenberg just cannot abide this equity market rally.
Friday morning, circa 8.30 am ET and the release of the US payrolls report, it must have looked to Dave like his moment of crusading zeal had finally arrived. A few choice extracts from his latest report:
There’s no other way to describe the U.S. employment report that was just released for September. And guess what? The rose-colored glass donning set of economists who have been talking about sequential improvement in the data and how “less negative” the employment numbers have become can’t say that after today (thank the good lord)…
Welcome to the latest new paradigm — jobless prosperity. And whether you look at operating or reported earnings, trailing or forward, the S&P 500 today is trading at multiples that are higher than they were at the market peak in October 2007…
It never ever has paid in the past century to write off the ingenuity and might of the United States, but we may look back a decade or two down the road and view what is happening today as the first signposts that the sun is setting on the hegemony as has been the case with so many other dominant powers in the past.
To be sure, the fiscal might of the United States has completely eroded as years of pork-barrel overspending, insufficient resources to deal with a dramatic rise in dependency ratios in the near future, and decisions to cut taxes while fighting a prolonged war on terrorisms, have seriously jeopardized America’s financial, economic and military dominance. The fact that the current Administration is trying to combat a business cycle with ‘cash for clunkers’ and housing subsidies (at a time when the tax system already hugely favours homeownership as it is) shows that fiscal short-termism reigns and that it is completely bereft of ideas of how to plan for the long-term with regards to enhanced capital formation, skills and productivity, and sustainable job creation…
And let’s just finish off by saying that if there is a shred of truth in what Karl Rove had to say in yesterday’s op-ed piece in the WSJ (“Obama Can’t Outsource Afghanistan”), then gold is likely going to go much, much higher than $1,000 an ounce. That’s the currency we prefer.
If and when this rally cracks, Dave is really going to give people a piece of his mind.
But that moment hasn’t arrived yet. By lunch time in New York, the major equity indices were pretty much back in positive territory – the jobless numbers being treated Thursday’s news.
Related links:
‘I stand accused of having missed the turn‘ – FT Alphaville