David Rosenberg: “Every Bubble Pops” — Markets Aren’t Ready

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**David Rosenberg** (1:11)
I don't mind calling it a bubble. Every bubble pops. Margin debt is soared 50 percent in the past year to one and a half trillion dollars. What is going to be the surprise heading into the fourth quarter of the year, Maggie, is going to be the labor market.

**Maggie Lake** (1:28)
Let's talk about what happens. So you have a global ETF that you're launching appropriately called Rosie. So how are you allocating or what is your strategy based on the scenario you just laid out, which is the economy is weak or then people think earnings are really being held up by AI. But beyond that, there's weakness.
So the Fed may cut, but that doesn't mean rates will necessarily go down if there's uncertainty and investors are concerned about all of the things we discussed. What do you do? What is your strategy here?

**David Rosenberg** (2:02)
Okay. Well, let me just go into something. I am, so it's 100% true that I personally am not launching the ETF. Yes. The CTF specialist that I teamed up with, Quarton Capital, I am the research advisor on the CTF, and it is 100% going to be premised on the views, the thematics of me and my team at Rosenberg Research. And it's nothing really new, because the genesis of this was the Rosy Model Portfolio, and you can go on the website and have a look at it.

**Maggie Lake** (2:39)
We'll put all the links in the description.

**David Rosenberg** (2:42)
So yeah, so basically, and this was the genesis for the ETF that's going to be launched in the second or third week of September.
And I have 2,300 of my subscribers in 40 countries that buy my research because they want to become better investors. And they're the ones that push me to do this. So they can now still get my research and invest right alongside me. I could tell you right now that, you know, the Permabear, I started the model portfolio, put it on the website. It started in the beginning of 2023
It's up 55 percent with a 0.7 beta to the 60-40, 0.4 to the S&P of 100, and a sharp ratio north of 1 It's classified as low to moderate risk. And so the problem is that when you're low to moderate risk, because I am the flag bearer of capital preservation and the preservation of cash flows, this is basically the hedge against all the rocket fuel and other parts of your portfolio. But God forbid, you're low to moderate risk, he's got to be a Permabear. Well, the Permabear, 55 percent, it's been a model portfolio with a unit holder of one, David Rosenberg, and it's been my best investment in the past three years. I go figure how a Permabear can make you money. The operative word here, and by the way, I have no cash, I got no shorts, and it's a multi-strip. No cash? I got no cash, and it's perfectly liquid. But yeah, because it doesn't mean it can't have cash. By the way, it doesn't mean that I couldn't short. And in this new ETF, we could short, but shorting takes a real skill, okay? And really high conviction, because if you're wrong, the negative carry is going to work. The punishment, right.

**Maggie Lake** (4:28)
I know a lot of people who have, in the way this market is operating now, do not short.

**David Rosenberg** (4:34)
Look, when I worked at Glaskon Chef, they had like $3 billion were in their loan short funds. And I sat right out there with the portfolio managers day in, day out for 12 years. So Permabare, Permabull, doesn't matter. I'm one of the few economists out there that had that opportunity to sit out there with PMs. And my office was right kitty corner to the CIO.