The stock market could be in for a strong correction, formerly chief economist at Merrill Lynch and now with Gluskin Sheff, David Rosenberg told CNBC.
“[The market] is overvalued by at least 20%,” Rosenberg said.”But again, it comes down to what your view in corporate earnings (is) going to be. By the time you’re up 60% from any egregiously oversold low, you’ve already got the earnings recovery…This has been a 9x points expansion rally over a short period of time.”
Rosenberg also ‘admitted’ of not being “bullish enough in the equities market”. We don’t recall Rosie ever being bullish. In fact, he has persistently doubted the market’s ability to recover since its March lows. (60% gains later, no matter the spin, it’s only fair to conclude that that argument is already lost).
Rosenberg also talked about the economy. He said “in a post-bubble credit collapse” economic recovery is tenuous because of the large amounts of government stimulus that have entered the system.
