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Rosenborg:Why this is not the beginning of another secular bull market

David Rosenborg doesn’t think we are in a secular bull market. This is either gonna make him more famous or gonna make him look pretty stupid:

  • P/E Multiples were 8x, not 26x.
  • Dividend yields were 6%, not sub-2%.
  • The stock market was trading at a discount to book, not a 2x premium.
  • Monetary policy was aimed at reducing money growth and inflation rates, not creating both as is the case now.
  • Fiscal policy was aimed at reducing nondefense spending, not accelerating it.
  • Deficits were peaking and coming down, not surging to 10%+ relative to GDP.
  • Global trade barriers were being torn down; not erected.
  • Deregulation back then was in; today it is all about re-regulation and government ownership.
  • Union membership was on the way down; today it is back on the rise.
  • The dollar was entering a Plaza Accord bull market, not a mercantilist bear market.
  • Credit, household balance sheets and participation rates were expanding, not contracting.
  • Tax rates, income, capital gains and dividends, were declining then; rising now.

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