Popular Articles
Today Week Month Year

Top economist warns the next recession will be as if “the whole country takes a pay cut”
By News Editors // May 04, 2023

Ever since the United States Federal Reserve (the central bank) began hiking interest rates in early 2022 to “combat inflation”, fears of recession have grown. But the next recession is going to be an ugly one, and it will appear as if “the whole country take a pay cut” according to former Merrill Lynch economist David Rosenberg, who is also the president of Rosenberg Research.

(Article by Mac Slavo republished from SHTFPlan.com)

“The leading indicators are telling me that the recession is actually starting this quarter,” he said in a recent YouTube interview with Blockworks Macro. “If it’s not this quarter I think it’s next quarter. It’s certainly not a 2024 story.”

With rampant inflation, most Americans are struggling with wages that are not keeping up with the rising cost of living. Should a recession materialize, it could result in greater financial hardships. Not only that but artificial intelligence and automation are going to make it tough for people in the future.

“A recession is a very big call because it is actually a haircut to national income. It’s as if the whole country takes a pay cut,” Rosenberg explained according to Yahoo News. “It’s not that we take the Lamborghini from 80 down to 20. It’s that we go in reverse.”

“I am bearish on equities as an asset class,” Rosenberg said, adding that he doesn’t believe “a recession is fully priced in. I don’t like the valuations. I mean, we’re pressing against a 19 forward multiple,” he said, referring to the forward price-to-earnings ratio. “So what does that get you? Like 5.3% as an earnings yield. I can pick up 5.4[%] in single-A triple-B corporate credit … wind up in a better part of the capital structure.”

The S&P 500 currently sits at 4,169 and the economist’s target implies a downside of 23%. “It will be painful if you’re long, but if you have the dry powder and the liquidity, you’ll be able to pick up assets at better levels as you always do in a recession,” Rosenberg said.

In other words, when the recession comes and stocks tumble, investors can take advantage of better prices by buying the dip…if you have the capital to do so. Most Americans are struggling now. If a recession hits, it’ll hit the lower-income people the hardest.

“The beauty of recessions is that they cleanse, and they move assets from weak hands to strong hands,” he said.

Prepare For An Economic Emergency Or Recession

Read more at: SHTFPlan.com

Take Action:
Support NewsTarget by linking to this article from your website.
Permalink to this article:
Embed article link:
Reprinting this article:
Non-commercial use is permitted with credit to NewsTarget.com (including a clickable link).
Please contact us for more information.
Free Email Alerts
Get independent news alerts on natural cures, food lab tests, cannabis medicine, science, robotics, drones, privacy and more.

NewsTarget.com © 2022 All Rights Reserved. All content posted on this site is commentary or opinion and is protected under Free Speech. NewsTarget.com is not responsible for content written by contributing authors. The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. NewsTarget.com assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms and those published on this site. All trademarks, registered trademarks and servicemarks mentioned on this site are the property of their respective owners.

This site uses cookies
News Target uses cookies to improve your experience on our site. By using this site, you agree to our privacy policy.
Learn More
Get 100% real, uncensored news delivered straight to your inbox
You can unsubscribe at any time. Your email privacy is completely protected.