U.S. "Virtually Certain" To Fall Into New Recession: Rosenberg

Economist David Rosenberg told CNBC this morning that the U.S. economy is almost certainly headed back into a double dip recession. He believes most economists are missing the warning signs because they are using "the old rules of thumb" that do not apply this time. Rosenberg believes that consumers' focus on shedding debt rather than spending will prevent the economy from growing and halt the recovery. Rosenberg has been pessimistic on the economy and even doubts the U.S. got out of the first recession. He adds, "The risks of a double-dip recession-if we ever got out of the first one-are actually a lot higher than people are talking about right now. I think it's a foregone conclusion, a virtual certainty." Persistently high unemployment, weak economic indicators and massive debt-cutting by consumers and business will send the economy into a double-dip according to Rosenberg. Rosenberg believes most economists are using old rules of thumb that worked so well in the post-1945 period, where recessions were just corrections in GDP and credit continued to expand. "Comparing to the recessions of the post-World War II period is a total waste of time," he said.