David Rosenberg – In A Depression, Own What’s Scarce

Published on
October 5th, 2020
46 minutes

Jay Pelosky: “The Higher You Go, The Tougher It Gets”

David Rosenberg – In A Depression, Own What’s Scarce

Investment Ideas ·
Featuring David Rosenberg

Published on: October 5th, 2020 • Duration: 46 minutes

David Rosenberg, chief economist and strategist at Rosenberg Research Associates, sits down with Real Vision's Ed Harrison to discuss the case that the US and, more broadly, the world are in an economic depression. Rosenberg defines an economic depression as more than just a haircut on GDP, but a secular change in the attitudes in both the household and business sector. Together they address the risks to this thesis and dissect investment opportunities that arise in an environment that is scarce on both growth and yield. Filmed on September 30, 2020.



  • MM
    Michael M.
    4 January 2021 @ 03:17
    What if all that “dry powder” goes into equities or cryptos?
  • JR
    John R.
    19 October 2020 @ 07:01
    Extraordinarily insightful and informative. Thanks very much.
  • kc
    kirk c.
    18 October 2020 @ 16:21
    You guys have so much great insight. Except you both need to understand the difference between Covid cases and Covid asymptomatic cases. Everyone who invests needs to look closer at this. Testing has gone up 800% in Ontario, which is uncovering thousands of new "cases". Except we are not seeing an increase in hospitalizations or deaths. I am tested every four days because I have gone back to work. If we hadn't changed our testing policies we would not be seeing any increase in the disease. Sweden and Canada have the same numbers of hospitalizations and deaths, except Sweden has no "2nd wave" because they aren't doing massive testing. Everyone needs to look closer at this. I actually think that Canada is reacting to this false 2nd wave by shutting down its major cities because if they go back to work too soon, they will see normalized inflation and will need to raise interest rates. If the Canadian dollar rises, it would be the most devastating economic event in Canada's history.
  • so
    steven o.
    5 October 2020 @ 19:05
    Ginormous deficits as far as the eye can see and we should be buying 30 year strips when yields are at an all time low! Wow! As an old who remembers that mythical beast known as the bond market vigilante, I am in awe of this brave new world.
    • SS
      Sam S.
      5 October 2020 @ 20:56
      The least dirty shirt still emerges as the winner.
    • PP
      Patrick P.
      6 October 2020 @ 03:59
      Steven.. If he's right .. there is a huge upside on price ...not on rate. The only thing that could throw a monkey wrench on his thesis ... if the Fed loses control of the long bond... At that point the market could take over and all hell would break loose.
    • JG
      Jave G.
      15 October 2020 @ 04:18
      Patrick: What would it mean for the Fed to "lose control of the long bond"? Curious, because I'm lately being persuaded into the long bond trade.
  • MF
    M F.
    13 October 2020 @ 09:34
    David Rosenberg is so good. Depth of experience, knowledge, and humility is a rare combination. Well done, Dave. Ed, thank you for the interview, with the right balance of questions and letting the guest speak fully without interrupting. Great job, gents!
  • MR
    Michael R.
    12 October 2020 @ 14:55
    They got me thinking about Bonds for price appreciation vs. interest but isn't that the 'least dirty shirt in the laundry bag' strategy? I would rather go in for disruption with #Bitcoin for the juice.
  • PH
    Pompeu H.
    10 October 2020 @ 00:38
    Great discussion and very well conducted interview. Thanks for that.
  • JL
    John L.
    9 October 2020 @ 12:53
    I've been following Dave for 25+ years going back to his "Breakfast With Dave" reports at Merrill Lynch, and this was one of his best interviews yet. Thanks Dave and Ed. This one goes into My Favorites folder.
  • DG
    David G.
    9 October 2020 @ 05:38
    Bess David Rosenberg's heart, he doesn't understand that a good percentage of the tea party's motivation to stand up against the government was because they were convinced that the first Black president was going to usher in socialism for poor people(all Black and Brown people in their eyes) despite the cash for clunkers, and $8,000 first time home buyer's checks they were cashing. Now that their Führer is spending the money, they have nothing to say. Sure, some of it is just republican and Faux News double standards and partisan loyalty, but, if you're going to argue that racism doesn't exist or complain that it is mentioned on a financial website, because the word makes you more uncomfortable than a homophobic man seeing two men kiss, save it. Correlation doesn't equal causation, but some things are too coincidental to be a coincidence. This propaganda based, mud slinging, and outright slander, didn't start until the left violented some unspoken rule and championed a Black man for president. My thesis is further evidenced by the fact that they voted in the antithesis of what they claimed to stand for in regards to morals and decency, while slandering a man who actually possessed those character attributes. You won't hear from the Tea party until the democrats' are in the oval again. They tasted blood with Obama, now it doesn't matter as much what the color of the Democrat is, the election of Obama severed the White supremacy bond between parties. Now the Dems are 100% the enemy as far as radical Republicans are concerned.
  • Po
    Pedro o.
    6 October 2020 @ 01:24
    The sour attitude of someone who's been on the wrong side of the trade. Rosenberg doesn't understand inflation.
    • PC
      Peter C.
      6 October 2020 @ 06:01
      I attribute the last couple years of my investing success to David. Low interest rates going lower for longer - long Treasuries, utilities, REITS (despite losing most of the REIT gains to Covid),... and most recently long precious metals.
    • PB
      PHILLIP B.
      9 October 2020 @ 05:06
      He's one of the best out there.
  • HA
    Hugo A.
    7 October 2020 @ 16:38
    Scarce = Bitcoin (BTC). Nothing beats that.
    • RV
      Ryan V.
      8 October 2020 @ 00:45
      What about bitcoin SV? Bitcoin cash? Bitcoin gold? Litecoin? Eth? The horizontal axis is infinite.
    • kb
      k b.
      8 October 2020 @ 16:04
      @Ryan V. look at the metrics behind those shitcoins, like node count, hashrate etc and you'll soon see that Bitcoin proper is the only thing that matters.
  • GK
    Gautam K.
    6 October 2020 @ 05:24
    As always, great interview with Rosenburg. What I don’t understand is his tip on buying Canadian Bank stocks, with Canadian housing hitting bubble territory - doesn’t make any sense.
    • SB
      Stewart B.
      6 October 2020 @ 13:59
      Agreed. That was my first thought too.
    • WG
      Wade G.
      6 October 2020 @ 18:01
      Don't know, but I gathered he places great import on government support....
    • JF
      JOHN F.
      8 October 2020 @ 06:29
      Canadian banks are few and are tightly regulated. They have (high) reserve requirements. Back in the 08 credit crisis they had no problems and, in fact, the Canadian banking system was ranked the safest in the world. Real Estate bubble? When there is a down turn, always there will be some bad loans. The "bubble" is essentially just Toronto and Vancouver. But that "bubble" has been sustained for the past 15 years, so it's not exactly bubbly. I can agree with Rosenberg: Canadian banks are a big (oligopolistic), boring and safe - all things considered.
  • BA
    Bob A.
    7 October 2020 @ 22:15
    Rosie is always outstanding.
  • JL
    Johnny L.
    7 October 2020 @ 17:54
    $25B for airports in round 2 of airport relief is Monday boggling. 6 major US airlines spent 97% of cash flow over last 5 years on stock buybacks. They borrowed even more for more buybacks. If they got the aid they workers would nt be working bcs there are no flights for them to work. How ridiculous is the US and the fed and DC swamp? Airliners sell this shares to fund what you need, do not ask the taxpayer for this. Flight cures crying on social nmedia they will loose their income to people who haven't had help in months and are losing homes and in food bank lines do not get it, nor do I. Federal reserve is so damn desperate to save this and themselves at any cost. ,abet participants begging for more debt for more SPY points w/o grasping the consequences or cost of these spy points. I don't understand this market and the logic anymore or the desperation to save stocks
  • RV
    Ryan V.
    6 October 2020 @ 12:20
    Wow. It’s amazing how instantly you can lose respect for someone. How can you take someone seriously on economics when they so easily pass along non scientific institutional lies? There is exactly zero scientific evidence that everyone wearing cloth masks has any effect whatsoever on infections. None. On the contrary there is evidence it is counter productive and increases infections. Makes you wonder if Rosenberg’s opinion on economics is equally well informed......So much for real vision being the contrarian voice of reason.
    • KC
      Kronos C.
      6 October 2020 @ 16:39
      if its counter productive, why have doctors been wearing masks even before corona?
    • DF
      Douglas F.
      6 October 2020 @ 17:00
      Ryan V. Please post links supporting your "zero scientific evidence." Just in advance Breitbart is not an acceptable scientific source.
    • WG
      Wade G.
      6 October 2020 @ 18:00
      Strident assertions, presented without support, and referencing science. Great. Helpful. Compelling.
    • LS
      Lemony S.
      6 October 2020 @ 18:33
      Ryan is correct, I can cite the studies if you like - I am also a physician. The reason why doctors wear masks are because they are actually AROUND SICK PEOPLE. The average person is not around sick people, and the disease is NOT LETHAL. I apologize for caps but this things must be said. Destroying [many] healthy people's lives for a catch all policy and in a disease where there is going to be (yes you will see) no real increase in excess mortality, is a disastrous policy. And it has nothing to do with medicine or science, which makes it even worse.
    • mf
      massimo f.
      6 October 2020 @ 22:46
      Even if that were true what bearing does that have on his economic opinions?
    • DF
      Douglas F.
      6 October 2020 @ 23:07
      Lemony S. Yes, I would like the studies and proof of your credentials, because what you've written is nonsense. Over 210,000 in US have died...and unless someone is tested they're possibly sick. From a legal standpoint anyone not wearing a mask is committing an assault (I'll let you look up the definition of that) if they are around people with underlying medical condition (most everyone).
    • CP
      Chamil P.
      7 October 2020 @ 02:41
      https://www.ucsf.edu/news/2020/06/417906/still-confused-about-masks-heres-science-behind-how-face-masks-prevent https://wwwnc.cdc.gov/eid/article/26/10/20-0948_article
    • DS
      David S.
      7 October 2020 @ 08:18
      Positive comments on masks are well received by me. There are still folks who believe to their dying breath that the earth is flat. It is wrong. I will wear my mask to help protect them. I will distance myself from them to protect myself. DLS
    • RV
      Ryan V.
      7 October 2020 @ 09:56
      Kronos, respirators work. Surgical masks work. Cloth masks do not.
    • RV
      Ryan V.
      7 October 2020 @ 09:57
      Douglas, burden of proof for evidence is on those calling for a cloth mask mandate.
    • RV
      Ryan V.
      7 October 2020 @ 09:58
      Chanil, op Ed’s by government bureaucrats aren’t scientific studies or evidence. The only study on cloth masks shows they increase infections. All that fidgeting.
    • LS
      Lemony S.
      7 October 2020 @ 14:10
      Quickly to the hysterical ... stop talking about the number of deaths if you have no idea what excess mortality or bias is. These concepts are strongly within any 50k, 100k, or 200k number. The new CDC data has 99.5% survival or people under 70 years of age. The survival of 70+ is 95% roughly. This is not a lethal disease, since that number also includes morbidities. You don't die from covid, just like you don't die from the flu. You die from old age, extensive disease along with your covid confrontation. This is PROVEN by any sane thinker looking at people ages 1-70 surviving at 99.5%. Stop the lies. This is getting ridiculous.
    • DF
      Douglas F.
      7 October 2020 @ 15:33
      Lemony S. or would you prefer to be addressed as Dr.? Still waiting for your studies and your credentials. tick, tick, tick.
  • JS
    Jon S.
    6 October 2020 @ 18:46
    Agreed. However, wait for China to attack Taiwan... then, the fireworks will start.
    • JS
      Jon S.
      6 October 2020 @ 18:47
      This means that deppresion solution is not NMT, but a new war unfortunately...
  • LS
    Lemony S.
    6 October 2020 @ 18:39
    What's the time frame for the change to inflation after disinflation? 3 years? 6? 10?
    • JS
      Jon S.
      6 October 2020 @ 18:43
      Let me look at my crystal ball... ummm 🤔
  • SR
    Steve R.
    5 October 2020 @ 15:28
    Great segment. Couple of points: 1. Ed, you said your mother is 90. My mother is 91, but you look a heck of a lot younger than I do. Life is obviously unfair. 2. Mr. Rosenberg, you said we should listen to the scientists. What do you do when the scientists disagree (which they should)? I found a link to a youtube for an epidemiologist named Ivor Cummins who points out that the lockdowns were unnecessary and futile. Here is the link: https://www.youtube.com/watch?v=8UvFhIFzaac
    • EH
      Edward H. | Real Vision
      5 October 2020 @ 15:30
      Appreciate that, Steve. My greying hair gives me away more and more though
    • WM
      Will M.
      5 October 2020 @ 17:30
      ...."Just for Men" used to be the answer..... ...I still have the bottle my daughters bought me 20 years ago and I never used....
    • SL
      Sean L.
      6 October 2020 @ 08:02
      Everyone should be listening to Ivor Cummins on this virus. He’s the only sane person in the room & his stuff is backed up with data. This virus is a casedemic not a pandemic & all countries should have followed Swedens lead
    • LS
      Lemony S.
      6 October 2020 @ 18:37
      Yes Sean, this will be the disastrous response we all know it was when the final data sets in (no excess mortality, see my post above). But the reason is because it is a trial run on authoritarianism, to see what is possible when the enemy becomes invisible, and in a global world where the global elites lost a lot of their power to national states that rejected them outright. For freedom lovers everywhere, the world reflected a dystopian system where hordes are hooked on various things, including inability to want or gauge risk, fear of the unknown, propaganda of "experts" and the other various resources or handouts of this world.
  • AH
    Attila H.
    6 October 2020 @ 03:52
    Excellent interview, wondering if the 30 year strips trade can be played with a long TLT ?
    • MO
      Master O.
      6 October 2020 @ 05:06
      The 30 year strip has more convexity than TLT. EDV and ZROS etfs invest in strips.
    • MW
      Max W. | Real Vision
      6 October 2020 @ 17:37
      $ZROZ is my favorite. I use it when I don't want to play around with options or I'm feeling especially nervous. $TLT is really the only way to go for liquid options in treasury ETFs.
  • JH
    Jesse H.
    6 October 2020 @ 13:11
    I think Rosie needs to be careful here that since we are at a true inflection point, and specifically at the end of both a business and a historical cycle, we could see larger changes that could make USTs riskier than one would normally think. Thanks again, guys.
  • JH
    Jesse H.
    6 October 2020 @ 13:00
    Great discussion between two heavyweights. Thanks, guys. This confirms my core thesis that we are going to see a risk-off, disinflationary event or series of events in markets, followed by yet more emergency stimulus that will create significant inflationary pressures, especially within the US & Europe. Cheers.
    • JH
      Jesse H.
      6 October 2020 @ 13:02
      To Rosie's point, I am already seeing a rotation in markets into Value and away from Growth (i.e. Russell moving up stronger than S&P, dollar down, gold up, oil up significantly on some days).
    • JH
      Jesse H.
      6 October 2020 @ 13:03
      Own banks?! Respectfully and strongly disagree - they are all subject to large systemic risks. I would own land, gold, bitcoin, TIPS and some cash...and maybe eventually equities.
  • PC
    Peter C.
    6 October 2020 @ 07:21
    Great interview ... but somehow feel we are left hanging. Massive government deficits / transfers, a much higher permanently unemployed, Covid destroyed industries.... = massive government debts. How is this going to turn out, how will it end,...? and it may take awhile?
  • MD
    Matt D.
    6 October 2020 @ 03:29
    Great interview Ed and David. Thank you. Good old school macro. Interesting comment that the US Banks are ok, it's their "customers" (Commercial Real Estate) who are the problem. Good way to put things. Things are pretty desperate if you are trading a 30yr for the price for when the yield drops 0.
  • Np
    Nikos p.
    6 October 2020 @ 00:26
    Ed et all...sorry for the dumb question....what is a 30year strip? Thanks in advance!
    • EH
      Edward H. | Real Vision
      6 October 2020 @ 01:37
      Investopedia has a good definition https://www.investopedia.com/terms/t/treasurystrips.asp They are the longest ‘duration’ before you get any money back which makes them the most sensitive to interest rates.
  • MD
    Mark D.
    6 October 2020 @ 00:40
    Last 15mins pretty vital
  • DS
    David S.
    5 October 2020 @ 21:11
    All the US monetary and fiscal response in the second and third quarters was a full Congressional/Presidential Re-election Act. Congress and the Administration just wanted to make sure that people have money until they get re-elected. The depression will start after the election. Republicans and Democrats will fight each other hammer and tong until it is time to campaign for 2022. DLS
  • CH
    Chris H.
    5 October 2020 @ 20:03
    Well done interview w/ very actionable ideas
  • MB
    Mickel B.
    5 October 2020 @ 18:39
    Great interview and discussion, especially relating to bond, yield scarcity and system fragility. The "outside" Canadian perspective is also most welcome for a more well rounded analysis. Always enjoy listening to, and learning from, Mr. Rosenberg.
  • WM
    Will M.
    5 October 2020 @ 18:17
    Great discussion, however, for me it just reinforces the likelihood of a very bad 2021....
  • JM
    John M.
    5 October 2020 @ 17:40
    Great interview Ed. Never miss an interview with David Rosenberg, one of Canada's greats!
  • RL
    Ruby L.
    5 October 2020 @ 16:52
    Always enjoy Dave’s views. Sometimes just a small removal from the USA adds some needed perspective
  • RM
    Richard M.
    5 October 2020 @ 14:42
    Man I love listening to Rosie! He is so articulate and persuasive, plus everything is back up by data (lots and lots of data). You just don't get better than Dave! And Ed is the perfect person to interview him as Ed lives in the world of credit and data too - just a great combination!!!
  • EH
    Edward H. | Real Vision
    5 October 2020 @ 14:11
    Ed Harrison here. I just did a tweet thread on this interview that I'll link here. https://twitter.com/edwardnh/status/1313111834208145408 There are three big issues here that Rosenberg addresses or will address soon: 1. Are we in a depression? 2. How do you do macro policy now? 3. How do you invest now? He talks to questions 1 and 3 in this interview. And once we get through the election season, he's promised to come back and talk to issue 2 from the position of why the likely policy shifts (regardless of how the election plays out) matter for the economy and investing. My biggest takeaway from Dave is that growth and yield are now scarce. And so, that's where you need to be focused.
  • BK
    Binyam K.
    5 October 2020 @ 13:47
    Great discussion. Thanks Ed and Dave!
  • IS
    Ionel S.
    5 October 2020 @ 11:40
    just awesome!
  • JC
    John C.
    5 October 2020 @ 07:59
    Awesome recap on many themes, I liked the finish esp. JCG