Monday, August 15, 2011
Rosenberg Daily - The Outlook
In just a matter of weeks, consensus views for 2011 real GDP growth have been pared to 1.8% from 3.2%. Recession odds, on average, have doubled in the past three months to 30% (when economists are at 30%, it really means 80%). Companies are stress testing their order books for a recession as well (see Industrials in U.S. Prepare for Risk of Double Dip on page 11 of today’s FT). These businesses should be worried because the real 10-year Treasury note yield is flat and the 5- year is a record low -80 basis points — the Treasury market is sending out a very powerful signal pertaining to the macroeconomic outlook — ignore at your peril.