We relish reading the daily economic commentary provided by David Rosenberg of Gluskin Sheff (a Toronto-based money management firm). For several months he has cast a skeptical eye on the prospects for organic, sustained economic recovery. Remember the old Temptations song "My Girl"? It starts of: I've got sunshine on a cloudy day... Rewritten as an ode to Rosenberg, it would begin: He's got clouds for every sunshiny day... But, as depressing as it can be to read, the commentary focuses on real issues. Like this list from yesterday's note:
SCARY MATH
1 in every 10 American homeowners missed a mortgage payment in Q1 (a record)
1 in 6 Americans are either unemployed or underemployed
Over 4 in 10 unemployed Americans have been out of work for at least six months.
1 in 4 Americans with a mortgage have negative equity in their homes.
1 in 10 Americans believe their income will rise in the next six months.
1 in 5 Americans see business conditions improving in the next six months.
1 in 50 Americans plan to buy a home in the next six months.
1 in 8 Americans believe that current government policy is actually helping the economy.
1 in 10 American small businesses have a job opening. 1 in 10 American’s credit card usage is being written off (a record).
There are 5 unemployed workers competing for every job opening (hence downward pressure on wage growth).
Mortgage delinquencies in the U.S. hits a new record high, now over 10%
Outside of these, it’s all good. Lagged impact of gargantuan fiscal stimulus (the longevity of which is now being challenged with Greece the proverbial canary in the coal mine) and inventory-led production gains (the longevity of which is now being challenged by the fact that real final sales since the recession technically ended is running at a pace that is two-thirds weaker than what is “normal” coming out of a “downturn”).
Sell in May and go away started a week early this time around. April 26 was very likely the peak of the bear market rally.
