David Rosenberg: The AI "Mania" Is More Extreme Than 1999

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David Rosenberg (1:09)

So I learned from my experience, can I call it a mania? Yeah, mania is fine. Just don't call it a bubble because bubble incites angst and anxiety and people don't like that word very much. When we had the Internet cycle in the late 1990s, see that was a rising tide to lift at all the boats. The economy was dripping at 5%. You could strip out the Internet mania and all the fiber optics and telecom equipment and it was still running over 3%.

Housing was strong. Real incomes were rising. It didn't last, but at the peak of the cycle, you can't say that it was a one trick pony. This is a one trick pony.

Dan Nathan (1:47)

Welcome to the Risk Reversal Podcast. I am Dan Nathan. I have a very special guest in studio today. His name is David Rosenberg. You affectionately know him as Rosie. He is the founder and president of Rosenberg Research. We have a great conversation. We talk about his views on the AI bubble and how it could be bigger than 1999 The debt-fueled expansion of that bubble talks about the credit markets to some degree and how we're seeing some cracks in it right now. We also have a conversation about yields. 5.2 in the 10-year, he thinks it's a screaming buy. We're going to talk about inflation. He's fading that inflation call that so many folks are really locked into right now, especially in a day that we got a CPI. And he also wrote a book. It's called Bear in the Bull Ring. We're going to go through some of the lessons that he's had in 30-plus years as an economist, a strategist, an investor. We talk about some of the rules of his mentors and how they could be applied to market and investing today. So stick around because we're going to give away 100 books. We're going to tell you how to get one. So right after this conversation, Bear in the Bull Ring, you're going to get one. David Rosenberg, IRL. How are you doing in this fine city?

David Rosenberg (3:00)

Living the dream. It feels like June out there.

Dan Nathan (3:02)

We had a very nice day. We're recording this on Wednesday afternoon. We had some fun economic data. Then you probably went out and got a coffee after you digested CPI.

David Rosenberg (3:11)

It wasn't so much fun.

Dan Nathan (3:12)

No, it wasn't. So we're going to get your take on just what the inflation readings look like, what they mean to you, and how the Fed's going to get to their 2% target, if they ever will. And then obviously, you have a lot of views on the stock market. You're seeing some strains in the credit market. And there's a whole host of other things we want to get through. But first and foremost, as I teased in the introduction, this is Bear in the Bull Ring. This is David Rosenberg's book. It just came out, How Independent Thinking Protects Your Money and Improves Your Life. And I'm really excited to read that. And I got pretty geeked up because Jeffrey Gunlock wrote the back side of this thing. And he is, to me, he's up there with you, Rosie. And obviously, you guys all know, go subscribe to Rosenberg Research. You did an amazing podcast, if you will, with Jeffrey Gunlock. And there's a lot of great stuff like that. It's one of my first reads every morning. We're going to get to the book and some of the lessons with nearly 40 years. And some of your mentors, you quote Bob Farrell all the time. And obviously, he put, it was amazing impact on you. Let's get into it. I'm going to shut up a little bit. Let's talk about CPI. You were last on with us a month ago. And I think consistently, you have not been in the rip roaring inflation camp. And I'd love for you to break it down a little bit, what you think maybe the Fed is missing and a whole host of others, whether they be economists, strategists, investors.