“David Rosenberg, chief economist at Gluskin Sheff & Associates, says there is a 99% Chance of Another Recession by 2012,” in an interview with the Bloomberg news service, as spotted by Mike Shedlock, a registered investment advisor with a column at Townhall:
Bloomberg: How Certain are you that we may be headed for a recession
Rosenberg: I think that by 2012, I would give it a 99% chance. I say that because as an economist, you have to be part historian. When you have a manufacturing inventory cycle recession, they are usually separated 5 years apart. But when you have a balance sheet recession, credit contraction, asset deflation (for example residential real estate), the downturn tends to be separated every 2 to 2.5 years. … Economists call this a soft patch. It’s not like this is a soft patch. Basically, when all the stimulus is gone, you get to see what the emperor looks like disrobed. It’s not a pretty picture.
And so, so unexpected, as well. As Daniel Henninger wrote last week in the Wall Street Journal, “The 2012 election is going to be fought over how we get economic growth.” The clothes may really have no emperor as a result.