Let's hope it's wrong

Sudeep Reddy reports on the Wall Street Journal‘s blog that the coming recession will be the worst since the 1970s, at least according to Merrill Lynch economist David Rosenberg. Granted, as Reddy notes, Rosenberg is one of the most bearish economists on Wall Street, but it still hurts to hear. The mid-1970s recession “not only saw a sharp and sustained rise in food and energy prices, as is the case today, but also saw a very similar consumer balance sheet squeeze from a simultaneous deflation in residential real estate and equity assets, which never happened in the 2001 recession, the 1990-91 recession or the recessions of the early 1980s for that matter,” Rosenberg writes. “The last time we had more than one quarter of outright contraction in the value of both asset classes on the household balance sheet was in the 1973-75 recession.”