Earlie, the Japanese source of excess liquidity is more that the shift from repatriation (until the end of this month) to reinvestments overseas. After April 1st, a huge chunk of the Postal savings (I read something like 100 Trillion yens, or a trillion bucks) are due to be rolled over, and since last year, the Japanese savings no longer have to reinvest this in the postal system (part of the liberalization there), if you assume that over a year, only 20% of these funds will not go back into the "Postal" that will create a liquidity bulge, some of which will spill over our markets, adding to the excess liquidity here due to 401k, and the paydown of some of the treasuries, a lot of moula chasing overvalued stock, a real nightmare scenario for anyone trying to engineer a soft landing for the current bubble.
Bears are going to have a tough time swiming up stream of this liquidity flood until..., well, my guess is, the elections.
Zeev |
