In honor of today being David Rosenberg’s last day as Merrill Lynch North American Economist, here are Rosie’s rules to remember (an economist’s dozen):

1. In order for an economic forecast to be relevant, it must be combined with a market call.

2. Never be a slave to the data – they are no substitute for astute observation of the big picture.

3. The consensus rarely gets it right and almost always errs on the side of optimism – except at the bottom.

4. Fall in love with your partner, not your forecast.

5. No two cycles are ever the same.

6. Never hide behind your model.

7. Always seek out corroborating evidence.

8. Have respect for what the markets are telling you.

9. Be constantly aware with your forecast horizon – many clients live in the short run.

10. Of all the market forecasters, Mr. Bond gets it right most often.

11. Highlight the risks to your forecasts.

12. Get the US consumer right and everything else will take care of itself.

13. Expansions are more fun than recessions
(straight from Bob Farrell’s quiver!).

Good luck up north Rosie, your insights will be missed south of the border . . .

Category: Economy, Investing, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

15 Responses to “Fare thee well: Rosie’s Rules to Remember”

  1. Marcus Aurelius says:

    I don’t know Rosie, but at least one other rule comes to mind:

    14. Neither a borrower nor a lender be.
    For loan oft loses both itself and friend,
    And borrowing dulls the edge of husbandry.

    450 years can’t take the edge off of truth.

  2. Chief Tomahawk says:

    Uh, I think certain financial institutions missed #6.

  3. leftback says:

    I especially like #10 today. Can anyone say “flight to quality”?

  4. for today, especially:
    2. Never be a slave to the data – they are no substitute for astute observation of the big picture.
    IOW, “Exhaust Fumes make better better Economists”

    4 , 8 & 10 stand out, as well

    hopefully, Rosie’s new digs will allow him to remain accessible..good minds willing to to tell the *Truth, as they see it, seem to be in short Supply..

    as an aside, good to see they got the Opening Ramp in place, again, today..

  5. Patrick Neid says:

    “Of all the market forecasters, Mr. Bond gets it right most often.”

  6. History rhymes, but never repeats is good too. Funny how we always look for “rules”, but there’s always exceptions.

  7. matt says:

    #10 has been my mantra for years… except when the government steps in and starts buying all flavors of paper. Then it becomes worthless.

  8. hawleyl says:

    2. Never be a slave to the data – they are no substitute for astute observation of the big picture.

    This is why I look at TBP. Because we analyze data from the past, but live life forward into the future, astute observation of the big picture is a necessity.

    3. The consensus rarely gets it right and almost always errs on the side of optimism – except at the bottom.

    Or to say it another way: If it’s obvious, it’s obviously wrong.

    From my engineering background: MISS A KISS (Make It Simple Stupid And Keep It Simple Stupid).

    From physics there is an uncertainty principle. One interpretation is that the more you interact with a measurement of something, the less certain you are of the value of the measurement. So if someone publishes a new indicator that is right 95% of the time and a million people start using the indicator it’s predictive value is compromised.

  9. ben22 says:

    for me, 10 and 12 are the most important right now. all of them are good rules though.

  10. The Curmudgeon says:

    Marcus Aurelius Says:

    May 8th, 2009 at 11:27 am
    I don’t know Rosie, but at least one other rule comes to mind:

    14. Neither a borrower nor a lender be.
    For loan oft loses both itself and friend,
    And borrowing dulls the edge of husbandry.

    450 years can’t take the edge off of truth

    Reply:

    MA, it would rip out the innards of the entire corrupt edifice upon which this economy, nay all of modern civilization, stands if we were neither borrowers nor lenders.

    But I agree. I’m just a free-riding, no leverage rascal that refuses to play. You don’t own nothing until you owe nothing.

  11. AverageJoe says:

    Love “…Mr. Bond gets it right most often”, but need help understanding.

    Which bond numbers are the smart people following and why?

  12. Pat G. says:

    I think in their own way, all Rosie’s Rules have merit. It’s more a matter of your perception however. For example, a few on here have mentioned that they like #10. Okay.. If the dollar becomes toast an asset denominated in dollars becomes toast. Except one class. No? And if you buy ETFs or companies you eventually have to trade out of them and back into the dollar. I heard Maria say yesterday that interest rates on home mortgages went up this week because the economy was coming out of recession. No.. Interest rates went up because investors demanded a better yield on the 10 year because of all the Treasuries that our government is flooding the market with in order to fund all its enterprises. This tells me that inflation is coming. No? And now we’re back to “if the dollar becomes toast”. I digress…

  13. jc says:

    Gas is over $2 in Jersey now, must be all those new commuters going to their new jobs doing…uuuh census work! It’s not Uncle Ben’s printing press driven (hyper) inflation. Maria is one sharp chick.

    Uncle Ben has been trying to move heaven & earth to get mortgage rates lower but all the currency he and Tiny Tim are throwing around to cover public & private losses is spooking the bond markets and we’ll be going pillar to post with an inflationary depression, I thought hyperinflation would follow depression but maybe they’ll overlap. Brilliant!

  14. H.T. says:

    With all due respect Barry– Might want to look at #1. I don’t see a lot of market calls on your part, but a lot of forecasts–implied or otherwise– . No ad hominem here–just my humble observation.

  15. dctag says:

    I will miss Rosenberg, whether he was right or wrong he was always thought provoking and well thought out. Hopefully he will get another outlet from which to deliver his research to us.