David Rosenberg is an economist of some note. Currently, he is the Chief Economist and Strategist for an economic consulting firm called Rosenberg Research & Associates, Inc. that he founded. However, Rosenberg has occupied more than one well-respected role before that.
1. Studied At the University of Toronto
Rosenberg received his education from the University of Toronto. It is interesting to note that the school was once called King's College, which was when it was still a religious institution with very close ties to the Church of England. However, when the Province of Canada chose to cut the school's ties with the Church of England in 1849, the school was renamed the University of Toronto. Both the school's University College and Trinity College were founded at around this time, though the latter wouldn't become a federated college until 1905 because it was founded in protest.
2. Studied Economics
Perhaps unsurprisingly, Rosenberg studied economics at both the undergraduate level and the graduate level. It is interesting to note that the term comes from the Greek for "household management," which is how it was used in earlier times. However, while there is still a branch of economics that is very interested in the choices of households as well as other individual economic actors, there is now also a branch of economics that is focused on the aggregate created by those choices. These would be microeconomics and macroeconomics respectively, though it is important to note that there is plenty of overlap between them.
3. Chief North American Economist For Merrill Lynch
From 2002 to 2009, Rosenberg was the Chief North American Economist for Merrill Lynch, which was a U.S.-based investment bank that operated on an independent basis from 1914 to the January of 2009. This is because it was one of the banks that were extensively involved in the market for mortgage-backed securities in the early 2000s with the result that it was hammered by the subprime mortgage crisis. Due to this, Merrill Lynch was bought out by Bank of America.
4. Chief Economist and Strategist For Gluskin Sheff
Later, Rosenberg became the Chief Economist and Strategist for Gluskin Sheff, where he remained until 2019. For those who are curious, this is a Canada-based wealth management firm that manages investment portfolios for a wide range of investors. Amusingly, Gluskin Sheff went public in 2006, with the result that it was bought out by Onex Corporation before being privatized.
5. Predicted the U.S. Housing Bubble
The bursting of the U.S. housing bubble caught a lot of people by surprise. However, it was by no means wholly unexpected. For instance, Rosenberg was one of a number of economists who predicted the existence of a housing bubble, which provided his reputation with a boost when he proved to be correct.
6. Predicting Deflation
Currently, Rosenberg is predicting that the aftermath of the COVID-19 crisis is going to cause deflation, which is a fall in the general price level of goods and services. This means an increase in a currency's purchasing power, but this isn't a good thing because it happens when there is a serious problem with the economy. In Rosenberg's opinion, there is going to be low consumption, which in turn, will bring about high unemployment. Yes, the federal government is providing assistance, but that assistance won't be enough to prevent all of the defaults and delinquencies that are going to happen, meaning that the impact of the novel coronavirus will continue to be felt.
7. Predicting Stagflation
Besides deflation, Rosenberg is predicting stagflation as well, which is when high unemployment is combined with high inflation. In his scenario, the period of deflation will last for three years' time assuming that the novel coronavirus is brought under control. After which, there will be supply-side constraints such as localization and preventative measures that will reduce the amount of goods and services that can be produced using the same inputs, thus bringing about stagflation.
8. Recommends Gold
Rosenberg is recommending gold to investors who are looking for some kind of hedge. This is unsurprising because there are a lot of people who believe that the precious metal possesses intrinsic value, thus causing them to flock to it in bad economic times. As such, gold is an excellent example of a counter-cyclical asset, meaning that it tends to move in the opposite direction of the general state of the economy. Something that makes it very useful for when investors are concerned about protecting the value of their investment portfolio.
9. Recommends Real Estate
Besides gold, Rosenberg has recommended real estate as well. Once again, this isn't uncommon because real estate prices tend to rise in periods of inflation, thus enabling them to protect the value of an investor's investment portfolio much better than cash under the same circumstances. Having said that, it is interesting to note that Rosenberg has singled out farmland for special mention, though their increased value is reliant on the COVID-19 crisis continuing to cause disruptions in the food supply.
10. States That He Will Turn Bullish If There Is News of an Imminent Vaccine
Generally speaking, Rosenberg is famous for being a bear rather than a bull. This isn't 100 percent fair, but it is nonetheless the reputation that he has managed to build for himself because of his predictions. However, it is interesting to note that Rosenberg has stated that he would turn bullish if there is ever news of a vaccine for the novel coronavirus that will be available within a short period of time. Presumably, this is because if said vaccine saw widespread use, that would enable the world to return to the "normal" state of things rather than be forced to adjust to the current state of things. There would still be considerable damage as well as a considerable recovery period, not least because it would take time for the vaccine to see sufficient deployment in order to achieve the desired effect. Still, there can be no doubt that a vaccine would make the process much faster than in Rosenberg's current prediction. Unfortunately, it doesn't seem as though we can expect to see a vaccine in the near future.
Written by Allen Lee
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