Do any of you know of the economist David Rosenberg? Long-time readers of Boom2Bust.com know that Rosenberg, considered one of the best North American economists around, is one of our original “crash prophets” and called the current recession and crisis a long time before most of his colleagues. As a matter of fact, not only was Rosenberg correct about the recession, but his timing on the start of the downturn was only off by a few weeks. I wrote the following way back on November 12, 2007:

A runner-up in the October contest was chief North American economist David Rosenberg of Merrill Lynch. The Wall Street Journal is reporting in their MarketBeat Blog post today that Rosenberg is saying the U.S. economy may already be in a recession.

And here’s a post I dug up from July 17, 2008, which isn’t too far off from what some of his contemporaries are now warning about:

According to the Financial Post (Canada) from July 9, David Rosenberg, the chief North American economist at Merrill Lynch, is warning of the possibility of not one U.S. economic recession, but a series of them. The Post’s Jacqueline Thorpe wrote:

Rosenberg has consistently held one of the more pessimistic views on Wall Street, arguing the housing slump and credit crunch will exact a heavy toll on U.S. consumer spending. He believes the data will eventually show the recession started in January.

But he adds it’s not the peak-to-trough decline in real GDP that’s important but the duration. Trouble is, the duration could be Japanese-like (about a decade).

Just like Japan, he says a series of rolling recessions is possible for the next three to five years, making it extremely difficult to time the market. Japanese equities got trashed through the process. At the 1998 post-bubble lows, Japanese bank, construction, real estate and transport stocks were all down 80%, retail stocks were down 50%. The only place to hide was bonds, notes the bond bull.

Rosenberg told the Canadian publication:

We are nervous that we have ended up following in Japan’s footsteps due to the inept fiscal response to the problem. A temporary tax rebate from Uncle Sam to buy iPods tackles a real estate deflation and credit crunch as effectively as the LDP’s (Liberal Democratic Party) “solution” in the early 1990s to build bridges and pave river beds that nobody needed.

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So, what is Rosenberg, now chief economist and strategist at Toronto wealth management firm Gluskin Sheff, forecasting these days? From the CNBC website yesterday morning:

The stock market is still in danger of breaking through its March lows as the economy continues to struggle, economist David Rosenberg told CNBC.

An additional round of government stimulus is likely to have little more impact than “cushioning the blow” of unemployment that will “easily” break the post-World War II high of 10.8 percent in 1982, said Rosenberg, chief economist and strategist at Gluskin Sheff.

“Could we see a new low? Who’s to say that we couldn’t?” he said. “A lot’s going to depend on the economic outlook. I don’t think another fiscal package is going to save the day.”

Some of Rosenberg’s other points:

• The market is currently only half-way through a secular bear market that could last another nine years. “You’ve got to trade accordingly, because there’s going to be huge spasms and rallies along the way,” he said.
• Stocks have priced in an earnings level that probably won’t be achieved until 2012, posing more danger of a move lower.
• The gap between the so-called “U6″ unemployment rate, which entails virtually all jobless including part-time workers who want to work full-time, and the number the government releases is at its widest ever. That indicates that even when the outlook improves for companies they are likely to bring part-time workers to full-time status first before hiring new workers, which in itself indicates a protracted period of a high unemployment rate.
• Cutbacks at the state and local government levels as well as a massive reduction in household balance sheets pose further headwinds for the economy.

“There are secular changes taking place in the economy right now, and you really have to be braced for it,” he said.

http://www.boom2bust.com/2009/07/08/stock-bear-cycle-only-half-over-9-more-years-to-go/

posted here by Moishe Alexander, CFC Canadian Funding Corp CEO

Normally, “hot spot” isn’t the first phrase that comes to mind when talking about Saskatchewan, Canada. A relocation service company president said he is moving more people to Saskatechwan than ever before. But with most of Canada suffering from devastating job losses, this cold province is becoming exactly that. It’s an asterisk to the entire country when it comes to the economic climate, and Premier Brad Wall is shouting it as loud as he can.
“It’s a great time to come to Saskatchewan,” said Wall, who even called the Toronto Star newspaper to tout his province’s economic success and let Ontarians know there were jobs for the taking.
“For those who are losing their jobs, we need them to know we have thousands of jobs open right now in both the private and public sector,” Wall said. “We have a powerful story to tell, a story of success and that’s something we want to share with those who are struggling.”

Wall’s province is one of the exceptions to the unemployment increases battering provinces across Canada. Saskatchewan’s unemployment rate fell to 4.1 percent in January from 4.2 percent in December, making it the only province recording a decline. In Ontario and the city of Toronto, unemployment rates rose to 7.2 percent and 8.5 percent respectively. To the west, British Columbia shed 68,000 full-time jobs in January.
More Saskatchewan jobs should be on the way. To stave off any possible recession, Wall announced a $500 million infrastructure “booster shot” to help keep the economy strong.
“All across the country, industries are getting quite ill,” Wall said. “We aren’t immune to it. We see some impacts in terms of layoffs and new vehicle purchases slowing off, and so we want to be proactive in staying ahead of the curve.”
On Tuesday, the Conference Board of Canada released a report that said Saskatchewan will likely continue to lead the nation in economic growth in 2009 because of the infrastructure investment and tax reductions.
The province has also been reaping the benefits of an influx from nearby Alberta. When the government in Alberta decided to raise the oil royalty rates, oil exploration and expedition companies decided to move their operations to Saskatchewan in hopes of making more money.
With the province’s growing opportunities, David Montgomery, president of Calgary’s Qwest Haven Relocation Services, said he is moving more people to Saskatchewan each day.
“Alberta has always been the gravy train of oil,” said Montgomery, who is also a former resident of Regina, the capitol and second-largest city in Saskatchewan. “But with the new royalties, oil companies are saying ‘Why stay here and make less when the opportunities right next door are even better?’ Many other companies may start to follow suit.”
Montgomery said people looking to move have said that cheaper land and insurance prices are among the other reasons they are headed to Saskatchewan.“There, government insurance is cheaper than anywhere else in the country and it comes with your license plates,” he said. “With the amount of jobs, cheaper opportunities and great way of life, the government there has made it very attractive to move there.”
That means more business for Wall’s province and more jobs coming to the area.Not that there’s a shortage of jobs. On Tuesday night there were nearly 6,000 private- and public-sector jobs on the web site SaskJob.com A constant stream of revenue from oil production and exports also buoys the economy in the province.
Saskatchewan is the largest producer of oil in Canada and exports more oil to the United States than Kuwait. It is the leader in uranium production and produces a third of the world’s potash.
The province continues to keep ahead of the curve, Wall said, finding ways to diversify its resources and embark on ambitious green projects and new oil projects. The province is working with Montana on a $212 million climate change initiative that would create the first major greenhouse gas storage project in North America. The carbon dioxide from coal-fueled power plants would be stored in the ground in Montana and later be withdrawn for use in oil production.
Wall also said what may be the largest discovery of sweet, light crude oil in the southeast part of the province means it could have even more oil to work with. The Bakken Formation could potentially have 413 billion barrels of oil, according to the U.S. Geological Survey. That would be another huge untapped revenue gold mine.
Despite the growth of nearly all sectors across the board, Wall cautioned that it is possible his province may see economic stress, just later in the game than other places.
“We need to be circumspect and prudent about promoting our province,” he said. “We are not immune; we do see the impacts. It isn’t some sort of panacea or answer to economic questions that don’t exist elsewhere. We are a bit of an asterisk that says there is some stress, but it’s relatively calm here.”
Wall encouraged people not to count out a move to the province based on stereotypes that it is “only winter here,” and “all of the land is just rolling hills.”
“‘It’s a beautiful, big place where life is great and right now there’s also opportunity,” he said. “I’m very, very biased, but I can’t imagine a place I’d rather be, especially with what’s going on economically around the world.”

http://www.reginainformation.com/2009/03/saskatchewan-get-top-billing-on-cnn.html

reviewed by Moishe Alexander

KENORA, ON, June 8, 2009

Canadian Funding Corporation – CFC – posts CMHC update. Mr. Greg Rickford, Member of Parliament for Kenora, joined with Naotkamegwanning First Nation and Chief Warren White to celebrate the grand opening of a new 10-unit seniors residence today, which was officially opened by Chief Warren White and will be home to more than 30 elders.

“The Government of Canada is committed to creating safe and affordable housing for Aboriginal people in Ontario and across the country.” said MP Rickford, on behalf of the Honourable Diane Finley, Minister of Human Resources and Skills Development Canada and Minister Responsible for Canada Mortgage and Housing Corporation (CMHC). “This project provides area elders with access to safe, quality housing at an affordable cost.”

CMHC provided a housing loan of $1,064,000 to facilitate the construction of this seniors residence. CMHC will also provide housing subsidies for this project, which are estimated at $2.1 million over the term of the 25-year loan agreement.

“It’s been a long, prosperous journey and now we can express the wishes that our elders voiced years ago to develop a seniors residence in Naotkamegwanning First Nation,” said Chief White. “Through hard work, determination and negotiations with CMHC, it has become the greatest accomplishment for our community. We’re a community that believes dreams can become reality when we work very hard to achieve them.”

CMHC’s On-Reserve Non-Profit Housing Program assists First Nations in the purchase, construction, rehabilitation and administration of affordable on-reserve rental housing, and provides subsidies for First Nations people living on-reserve. The Government of Canada provides approximately $270 million in on-reserve funding each year to address housing need.

In April, the Government of Canada announced as part of Canada’s Economic Action Plan that it is providing $400 million in additional funding over the next two years to support on-reserve housing. These funds are dedicated to new social housing projects, the remediation of existing social housing and complementary housing activities through programming from CMHC and Indian and Northern Affairs Canada (INAC). This funding will also provide an economic stimulus for many First Nations and rural areas by creating jobs, developing skilled trades and supporting small businesses.