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This presentation* by David Rosenberg, comes courtesy of Joe Weisenthal 
(www.businessinsider.com). I’ve disagreed with Rosenberg on the recession call in the USA for a long time now, but we’re on the same page about a lot of the macro trends. Here are three pertinent trends that are worth highlighting from the presentation. Words: 555
So says Cullen Roche (http://pragcap.com/) in edited excerpts from his article** posted on Business Insider. Additional comments by Ian R. Campbell (www.StockResearchPortal.com), as taken from his daily Commentary*** (a subscription service but included here with his kind permission), are included within brackets [__] to round out the discussion.
Roche goes on to say:
Chart 1 – One of the weakest recoveries in 50 years – Rosenberg and I both agree on the de-leveraging effect from the balance sheet recession and its extremely depressing effect on GDP. This is one of the most anemic recessions in the post-war era. Not surprisingly, it’s the only one to occur during a de-leveraging so that shouldn’t be terribly surprising.
[Campbell comments that:
“(The 2 charts above) shows that the recovery from the latest technical recession has been significantly less than the average recovery, and somewhat less than the recovery from the worst recovery number of the previous six recessions. Interestingly, the worst recoveries of the seven (including the current recovery) were the last three.”]
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Roche says:
Chart 2 – Putting the housing recovery in perspective – I am substantially more bullish on housing than I was several years ago, but I am trying to keep things in perspective also. The housing “recovery” is pathetic. This chart summarizes the recent effect that has a lot of people saying we’re off to the races here.
[Campbell comments that:
“(The 2 charts above) clearly show how low U.S. housing starts currently are when measured against historic U.S. housing starts. On average, they look to me to be currently running at a rate about 50% of the average annual number of housing starts for the 48 year period ended 2007 (800 thousand per year currently versus about 1.6 million per year on average during said 48 year period).
The following table shows the U.S. population, and percentage growth in population during the 1959 – 2012 time period (millions – sources various). Note the comparatively consistent annual growth in absolute numbers per year over the 53-year period. This table, in combination with Mr. Rosenberg’s housing charts, puts current U.S. housing starts into even clearer ‘dampening’ perspective.’]
|
Year |
U.S. Population |
Growth (#’s) |
Avg Annual Growth (#’s) |
|
1959 |
177.1 |
– |
– |
|
1969 |
202.7 |
25.6 |
2.6 |
|
1979 |
225.1 |
22.4 |
2.2 |
|
1989 |
247.3 |
22.2 |
2.2 |
|
1999 |
275.6 |
28.3 |
2.8 |
|
2007 |
299.4 |
23.8 |
2.4 |
|
2012 |
313.0 |
13.6 |
2.7 |
Roche says:
Chart 3 – Corporate profit trends are disconcerting – Corporate profits are likely to weaken and could potentially tip into a profits recession. Profit margins, weak global growth and the fiscal cliff are all big risks here. The deficit has been driving corporate profits to a huge degree in recent years so keep a close eye on that fiscal cliff situation. It will be as important as it’s been trumped up to be.
[Campbell comments that:
“I am not sure why Mr. Rosenberg thinks the 2 charts above show much about the U.S. economy viewed in isolation, as I think both charts inherently must include the impact of U.S. corporation profits that are earned both outside the U.S. and domestically within the U.S. – although Mr. Rosenberg may have segregated earnings generated outside the U.S. where the article – a summary of his work – hasn’t noted that.”]
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Sources:
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