But the debt bubble is different this time. “It’s not about the banks or households,” he said.
Corporate debt is at an all-time high and corporate balance sheets are “the most overextended in history,” he said. Over the next few years, U.S. corporations will have to roll over $1 trillion in debt a year at the same time as the U.S. Treasury has to refinance all the trillions in 10-year debt issued during and after the Great Recession.
Rosenberg worries the Fed is viewing recent economic reports through rose-colored glasses. The Fed has “never called a recession when it is staring them in the face,” he said.
In January 2001, Alan Greenspan thought the slowdown was simply a correction in the inventory cycle. In January 2008, Ben Bernanke said the Fed saw no recession on the horizon. In reality, the Great Recession had started the month before.
Where should investors seek shelter? Not in emerging markets, which Rosenberg defined as "markets you can’t emerge from in an emergency.”
With everyone forecasting anemic returns for equities, Rosenberg said trading them will yield better results going forward than buy and hold.
U.S. Treasurys, in his view, are the place to be. If the Fed lowers rates to 1 percent, 30-year zero coupon Treasurys will return 35 percent.