David Rosenberg: We're In A Depression, Not A Recession

In his daily briefing to investors Tuesday, Gluskin Sheff economist David Rosenberg replaced the R-word with the D-word.

The "current economic malaise" is a "depression, and not just some garden-variety recession," said Rosenberg in a note to clients today, as reported by CNBC. Rosenberg, who's been issuing warnings about a double-dip recession, was formerly the chief economist at Merrill Lynch.

Like the Great Depression of the 1930s, the U.S. economy as of late has posted a series of quarterly GDP bounces and stock market gains, he noted. Yet, the tidbits of good news are the same kind of fluff that gave our 1930s predecessors a false sense of optimism amidst unsustainable growth, Rosenberg argues.

As CNBC points out, Rosenberg wrote, "the 1929-33 recession saw six quarterly bounces in GDP with an average gain of 8 percent." Rosenberg proposes that we may be reliving history: "If you're keeping score, we have recorded four quarterly advances in real GDP, and the average is only 3 percent."

In a separate report this morning ("Breakfast With Dave"), Rosenberg added this:

"Look, we can understand the need to be optimistic, but it is essential that we recognize the type of market and economic backdrop were are in. The markets are telling us something valuable when, after a period of unprecedented government bailouts, incursions and stimulus programs, we have a 2-year note auction that sees the yield dragged to new record lows of 0.46%."

And Rosenberg offered us some more gloom on housing:

"So let's get this straight. Mortgage rates have tumbled nearly 100 basis points in the past year to a record low of 4.42% for the 30-year rate, yet existing home sales collapse a record 27% MoM to an all time low (data only back to 1999 for total sales) of 3.83 million units at an annual rate? Are you kidding me?"

Is all this just a gloom and doom forecast or is it realism, as Rosenberg calls it? What do you think?