Capitulating Deflationists: David Rosenberg and Rick Ackerman

One by one members of the deflationist camp have been capitulating.

I earlier pointed to populist analyst John Mauldin and celebrity guru Nouriel Roubini.

Now, Pragmatic Capitalism’s Cullen Roche says this time it’s David Rosenberg’s turn.

From Mr. Roche

After trying to call the top in equities every other week for the last two years, David Rosenberg has finally thrown in the towel on the bearish calls. In his Wednesday research report he detailed why he believes equities have achieved a “holy grail” and should continue to move higher:

“On a very near-term basis, and despite my long-standing macro concern list, which has not gone away, it does look like the market is set to rise further. The technicals are suggesting as much, though I do await what Walter Murphy may have to say on the matter. I had said before that a breakout to new highs led by higher volume would be an important technical signpost. Well, we achieved that Holy Grail yesterday – both in level terms and with respect to the change. This is not throwing in the towel, it is an acknowledgment of what the market internals are flashing at the current time from a purely tactical and technical standpoint….

“…All that said, we had a breakout to new highs yesterday and this time, the volume rose on the major exchanges, not to mention rising above the 50 DMA on the Nasdaq, which is a clear sign that the big boys are putting money to work. This market continues to impressively climb a wall of worry. Market internals are too strong to ignore right now – the NYSE advancers beat decliners by a 3 to 1 ratio yesterday; the Dow transports soared 1.9%; and the small caps beat their major benchmarks. My overall macro concerns have not gone away, but these market facts on the ground are tough to ignore.”

Austrian economics Professor Gary North also points to the defection of Rick Ackerman after 30 years of adhering to the deflationist outlook. He follows Martin Weiss in 2009

Writes Professor North,

What I have always said is this: there is no deflationary factor in the structure of the capital markets to keep a central bank from destroying the currency unit. There are no deflationary forces that central banking cannot overcome if it chooses to destroy the currency unit.

Well, this represents the fundamental flaw of deflationists, which they have stubbornly refused to pay heed to... of course, until the markets have proven them constantly and profoundly wrong which eventually led to their apostasy.

Nevertheless as a saying goes it's better late than never.