David Rosenberg, founder of Rosenberg Research and author of Bear in the Bull Ring, says he has never seen so many imbalances in the economy and markets in his 40-year career. He argues we’re in an AI-driven bubble, now in “extra innings.” Ten stocks make up over 40% of market cap while the median stock is down nearly 20%. The Shiller CAPE has topped 40 and the equity risk premium has turned negative. Beneath roughly 2% GDP growth, he sees an economy held up by AI capex, a falling savings rate and stock-market wealth effects, while hiring stalls and real incomes shrink. Rosenberg warns that Kevin Warsh’s Fed risks a policy mistake by hiking into a supply shock with a flat yield curve. He also flags fading fiscal stimulus, midterm gridlock and canceled data center projects as headwinds that put recession odds above 50-50 for 2027. His prescription is to de-risk without going to zero equities: shift toward Treasuries (two-year and 10-year notes), defensive sectors like utilities, healthcare and REITs, gold, and some cash, so you’re one of the “strong hands” when the cycle turns.
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Links:
Book: https://www.amazon.com/Bear-Bullring-Independent-Thinking-Protects
Website: https://rosenbergresearch.com/
X: https://x.com/EconguyRosie
Timestamps:
0:00 Intro: Protect your capital
0:21 Welcome David Rosenberg
1:36 Most imbalances in 40 years: a narrow market & fragile economy
6:57 What’s propping up the economy: AI spending & the wealth effect
10:23 Market call: CAPE above 40 & a negative equity risk premium
13:46 Why nobody calls it a bubble until it bursts
18:29 Don’t extrapolate: lessons from oil in 2008
23:17 Fed chasing headline inflation & recession odds
26:09 Is Warsh’s Fed dangerous?
31:32 Four supply shocks & where tariff inflation went
36:09 Labor market weaker than perceived
37:51 Will the Fed be forced to cut? The rookie Fed chair pattern
41:49 Greenspan, 1987 & testing a new Fed chair
42:40 Midterms, fiscal gridlock & a growth slowdown
45:47 AI backlash & data center cancellations
50:33 2001 recession, valuations & savings rate risk
53:42 Where to be on the Treasury curve
54:48 Bonds under-owned & boomers’ 55% stock exposure
1:00:56 Recession vs. growth slowdown
1:01:59 AI credit cracks: Oracle & CoreWeave
1:04:29 Gold outlook & why Treasuries
1:09:35 Book: Bear in the Bull Ring & independent thinking
The content of this podcast is provided for informational, educational, and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Nothing discussed should be interpreted as a recommendation or solicitation to buy, sell, or hold any security. Guests' views are their own. Always do your own research and consult a qualified financial professional before making investment decisions.
