Mike, Armstrong is a little late, we discussed this as early as April, when the big bang was announced. He is also wrong, IMHO, in assuming that within a short period 5% to 10% will move to international markets. The assumption I used at the time of 2% per year (and thus about $200 Billion of new liquidity) makes more sense in my opinion. Last, his timing must be wrong, since, if memory serves, the deregulation should start 6 months post April (thus my turnips bottom in October or so). Apart of that, I do not see much wrong with his argument. I would say that these $200 MM/years, plus the budget balance or surplus, plus the normal flow of capital from 401 k and pension funds will keep this bull alive as long as it does not get too much ahead of itself and declining interest rates.
Things that can derail this scenario, spreading of the Asian malaise to these shore and thus budget deficits due to a recesionary environment, higher interest rates or no longer declining interest rates, and of course excessive bullishness.
Zeev
Zeev |
