When David Rosenberg and Richard Bernstein were at Merrill Lynch in the 2000’s (now at Gluskin Sheff and Richard Bernstein Advisors) they used to agree on just about everything. That’s changed in recent years as Rosenberg has remained quite bearish while Bernstein has turned bullish.
Rosenberg is calling for another year of very slow growth, but seems to be backing away from his recession call. He says the biggest risks are capital spending and a rise in savings. I think he’s missing the fact that deficits are an enormous buffer to these negative trends. With a $1T deficit on deck for this year we’re again going to see another year of consumer spending offsetting de-leveraging.
Bernstein is much more bullish. But he’s not bullish on everything. He says investors are far too bullish on emerging markets and that that makes US equities attractive on a relative basis. He also likes U.S. Treasuries.