Merrill’s Rosenberg takes down 2009 Operating S&P 500 Earnings to $46 from prior $56

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Merrill Economist David Rosenberg has taken his S&P 500 2009 operating earnings down to $46 from $56 this morning. 2010 earnings are going down in his forecast to $55.50 from $63. He states that using a recession trough multiple of 12 that would possibly bring an S&P now at 830 to 666 – a decline of almost 20% from here. He thinks we will get there by October, where he projects we will hit bottom. He expects home prices to decline another 15% and unemployment to get to 10% by the end of this year.

David Rosenberg has been very right in most of his bearish forecasts over the past year, and he is an economist whose views I greatly respect.

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