283: 50% Recession Odds According to the FED?! What It Means for Government Contracts

Govcon Giants

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2M ago 1:11:57

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In this episode, David Rosenberg delivers a compelling analysis of the surprising strength in the S&P 500—despite fading “tail risks” like trade wars, Middle East conflict, and fiscal cliffs—and reveals that the current price/earnings multiple reaching 22–23 represents a historic 4σ event. He firmly argues that the rally is driven by market psychology and animal spirits, with fundamentals like GDP, which has fallen from 3.2% to 1.3%, and regional Fed “Beige Book” data signaling contraction—hardly typical signals for a sustained bull run. Rosenberg warns that with recession odds now at 50% (per Fed staff), the markets remain dangerously complacent.

Rosenberg also delves into fiscal sustainability and the looming risk to government contracting: federal spending has ballooned 53% since pre-pandemic, deficits hover around $2 trillion per year, and interest payments near $1 trillion—surpassing defense costs and crowding out future budgets. He emphasizes liquidity as the critical lifeline for entrepreneurs, especially small businesses reliant on debt, advising focused diversification into safe-haven sectors like utilities, consumer staples, defense and health care, while stressing the importance of coding and econometric skills for young professionals navigating economic uncertainty.

Website: https://www.rosenbergresearch.com/

Linkedin: https://ca.linkedin.com/in/david-rosenberg-40800219b

Youtube: https://www.youtube.com/RosenbergResearch

542 episodes

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