Stitch, you are right that the Japanese savers are not going to jump into foreign (for them) markets. But you must also take into account that there are a little 10 trillion of Dollars worth of these savings earning peanuts (less than 1% per year) looking for better yields. I can definitely see some of these going into developed countries debt (relatively secure)and a small portion going into equities. If you figure that only about $200 billions or so injection of new money in the last 12 months into US mutual funds managed to extend the bull market here, guess how powerful this fuel might be if just 2% per year of it got into our equity markets? Having said this, I do not see that happening at once, but long term, I see that as another source of excess liquidity fueling the next leg up. Well, that leg, I am afraid will not be at once, since within the next few weeks (Late April early May?), the SEA crisis will be back with us. Both the Nikkei and Korean equities are already showing signs of cracking (the "support activities for the Nikkei have ceased as expected it started to tank, similarly, the Korean markets are back into free fall mode) and I expect a little indigestion in the US as well. Once this indigestion is cured, this market can continue in its merry ways.
Zeev |
