That odd phase lasted a few years, but the former Merrill strategist is once again back to his bearish self.

“Cycles die, and you know how they die?” Rosenberg said, quoted by Bloomberg.

although the six Fed Funds rate hikes since Dec 2015 amount to a total of 170 basis points (bp) of tightening, one can argue that if we add the 300bp (Shadow) rate hike to the current Fed Funds rate of 1.70%, the degree of monetary tightening in the current cycle stands at 470bp.

If you don't think this is enough to cause a recession, take note that the Fed tightened 425 bps from 2004 to 2006, by 350 basis points prior to the 2000 downturn, and by nearly 400 basis points in the lead up to the 1990 pullback If you don't think this is enough to cause a recession, take note that the Fed tightened 425 bps from 2004 to 2006, by 350 basis points prior to the 2000 downturn, and by nearly 400 basis points in the lead up to the 1990 pullback.

<2/2> – David Rosenberg (@EconguyRosie) June 21, 2018 He's right, but what he forgets is that the second stocks drop by the maximum permitted 20%, the Fed will immediately halt the tightening cycle, and proceed with rate cuts, NIRP, QE4 and so on, because in the current, final phase of the global asset ponzi, even a small loss of control means the entire financial system gets it.

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