Rosenberg Rewrites History

If you’re in the business of making market calls, you’re going to wrong. That’s just how it is. I’m wrong all the time. So is Jim Cramer. It happens. But I won’t tolerate someone trying to run away from their calls. There’s no excuse for that.
For the second time, David Rosenberg is trying to rewrite history and claim that he was neutral at the bottom. First he claimed it a few weeks ago and again today. As Joe Wisenthal points out, Rosenberg claims he “turned agnostic” in March.
Bullshit. That’s just complete bullshit.
Check out these stories.
March 9, 2009

Merrill Lynch & Co.’s chief North American Economist David Rosenberg said today the S&P 500 may bottom out at 600 in October, lowering his estimate after the benchmark’s decline last week.

April 2, 2009

Based on the outlook for corporate profits and the typical trough P/E multiple that characterized recession bear markets, it would not surprise us to see the S&P 500 gravitate in a 475-650 range for an extended period of time.

At every point, Rosenberg discounted the rally (see here, here and here). After the market experienced a stunning rally, this is what he said in September.

I never did turn bullish enough at the lows, which is true. But I did turn neutral and while I did see the prospect of a complete throw-in-the-towel move towards 600 on the S&P 500, I can recall putting in print that the good news was that the bear market was about 95% over. Why quibble about another 60 points at that juncture. And, in the name of keeping an open mind, in my final report at Merrill Lynch, I played a game of Devil’s Advocate with myself … what if I was unduly bearish?
I didn’t stay bearish at the lows, which is contrary to popular opinion. I was basically neutral. And I continued to — still do, by the way — frame what we have experienced in the context of a bear market rally as opposed to the onset of a new secular bull market (the first you rent, the second you own). I am always skeptical of rallies that are purely premised on technicals and liquidity but bereft of a solid economic foundation. While green shoots did appear in the economic data, all the growth we have seen globally, and in the U.S.A. in particular, has come courtesy of unprecedented government stimulus. We see nothing organically in the economy to get us excited.

I’ll quibble about 60 points because it was a lot more than 60 points. We’re now up more than 400 points since then and Rosenberg said that bottom could come in October (i.e. now).
You simply can’t say that you’re neutral but you see the prospects of a big move down. That statement makes no sense. It can be used to say anything, which is another way of saying it means nothing.
If the market were at a new low now, then I doubt Rosenberg would say he had truly been agnostic in March.

Posted by on October 19th, 2009 at 2:13 pm


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