All Bubbles End - So You'd Better Have Some Liquidity | David Rosenberg

**Adam Taggart** (0:00)
You're about to make a trade.

**SPEAKER_2** (0:02)
Which you do you listen to?

**SPEAKER_3** (0:03)
Is it get optioning those options?

**Adam Taggart** (0:07)
Or let's do a little research.

**SPEAKER_4** (0:11)
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**David Rosenberg** (0:45)
Every bubble bursts. I am 99.999% convinced we are in a market bubble. It's a price bubble. At some point the pin will prick the bubble. This is how it's played out over the millennia. And it's the people that have the liquidity that can pick up the pieces at the bottom.

**Adam Taggart** (1:13)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. You know, it's easy to feel confused these days. With the stock market at all time high, some analysts predict the bull market has a lot longer to run as the business-friendly policies of the new administration start adding tailwinds to the economy. Others see economic growth as imbalanced at best and worry that overall, the trend for 2026 is downwards, risking recession and a material market correction. Which is it? For guidance, we turned to highly respected economist and award-winning researcher, David Rosenberg, founder and president of Rosenberg Research. David, thank you so much for joining us today.

**David Rosenberg** (1:54)
Well, thanks for the invite, Adam. It's great to be on.

**Adam Taggart** (1:57)
Well, great to have you on, David. As we talked about before we turn the camera on, congrats to your Blue Jays there. I hope everybody in your province there is excited at what the series might hold for them.

**David Rosenberg** (2:10)
Well, Canada is probably not going to win the Tariff War, but I think that the hope north of the border is that they'll win the baseball battle. So, a small consolation.

**Adam Taggart** (2:27)
A small consolation, and I should note on the day that we're talking, we just had another curveball in the U.S.-Canada trade discussions, where I think Donald Trump just walked away from the table because of some ad that ran in Ontario. I'm sure we'll get to this talking about the impact or the impact of these trade discussions, but the surprises are happening in real time here. But to the question that I raised there in the intro, David, why don't we just roll up our sleeves and start right there? Where, in your opinion, is the economy headed here? Do we have a healthy economy? Is 2026 going to be a decent year? Is the momentum that we've had over these past several years, especially in the markets, going to continue or will 2026 be a different story?

**David Rosenberg** (3:25)
Well, lots to unpack there. Let's talk about the economy.
Because when you ask me is it healthy, I guess it's a case of what your definition of healthy is, and another case of beauty being in the eye of the beholder. I mean, the economy has definitely cooled down this year compared to what it was a year ago. There's no doubt about that. If your definition of healthy is that, you know, we're small positive growth. And frankly, I don't know how the Atlanta Fed now cast is as high as 3.9% for the third quarter. But then again, the St. Louis Fed now cast, which gets very little play, is close to zero, which is where we are. You know, we don't have the government data right now.
So the emphasis is on what's referred to as, you know, the soft data or the survey-based data. And we rely a lot on the soft data, too. The soft data, you can argue, is more anecdotal than the hard government data. But the one thing we know about the hard government data is that it is also subject to well revisions. One well revision cost the BLS Commissioner her job, if you remember, a couple of months ago. So I don't bow down to the holy grail of just one number or just, say, GDP. When we actually run our survey-based models on the economy, and we've got all the survey data across the business sector and across the consumer sector, it actually is pointing to flat growth for the third quarter, notwithstanding what the consensus is or what the Atlanta FedNow cast is saying. The amalgam of the survey data is telling you that things are as flat as a pancake, or what they say in Quebec is flat as a Coup de Castor, which is a beaver tail. And we already have, Adam, we already have some data points for October. We just got the complete picture for October from the University of Michigan Consumer Sentiment Index. We've got data from various Fed surveys, including the Venerable Philly Fed Survey. And it's actually pointing to flat economic activity once again for the fourth quarter. So our readings, and we can talk about what the stock market is telling us. But for the here and now, the incoming information when we model it out is telling us the economy is flatlining. And by the way, it's not just us. Look at the Beige Book. Look at the Fed's Beige Book. You know, it's been coming out since 1970 It's called Beige because the cover is beige. But every six weeks, the Fed sends its staff into the field, and they go across the United States, all regions, all industries. It really is the most comprehensive look at the US economy. And we get that every six weeks. And we started to run some diffusion indices on the Beige Book, and we've also done some data science on it. And once again, it's pointing to a flat economy. So if your definition of healthy is flat, well, then call it healthy. In actuality, when you look at the percent share of the US economy weighted by population that's still expanding, that share is 18%. Less than a fifth of the US economy is still in expansion mode when it comes to overall economic activity. Six weeks ago, that share was over 40%.