David Rosenberg has questioned economists rosy outlook for 2011 saying, "a lot of good news is already priced in," and we're going to need some upside surprises to get to the 20% surge in the U.S. people are talking about.
Speaking to CNBC this morning, Rosenberg expressed the two concerns everyone has on a macro level: tightening in Asia and eurozone chaos.
But his main focus was on the U.S. economy and the over excitement around 2011. He listed several major concerns:
- The government debt ceiling
- State and local government debt
- Deflationary pressures
- The European threat
- Policy tightening in Asia
- And, $90 oil, which will hit profit margins
When asked about where he was this time last year, Rosenberg sort of waffled, saying he wouldn't name his price target. He said, up until August, people loved him. He claims to have underestimated the market reaction to QE2.
If he's wrong in 2011 though, Rosenberg says it will be because he's not bearish enough.
The big issue in 2011, according to Rosenberg, is QE3. He says a lot of economists are assuming it will happen, and so that's the reason their positive for the future.
"This economy is operating on a lot of steroids right now," Rosenberg says. "We don't really know how the economy is operating organically," because of the stimulus measures brought on by Bernanke and the Fed.
"What happens in the second half of the year if there is no QE3?"
Rosenberg points out that, while there is stimulus in place, it is all temporary, and investors could choose to save it rather than spend it, hitting GDP.
