Ramsey, I have said long before (almost a year now) that the solution for the current situation is for Japan to stimulate demand domestically so as to absorb some of the excess capacity created in the rim. Some capacity will have to written off as well.
The long term outlook, assuming Japan steps to the plate and discharges its responsibilities as the second largest economy, is actually quite bright. I see the worldwide number of "consumers" doubling within some 10 to 13 years worldwide and thus the world economy growing with that trend.
I have been talking for some time about two themes, the Sep/Oct minimelt and the liquidity driven prosperity in our markets. If Greenspan moves on his last speech before October (which I doubt very much, I think he'll want to see some of the exuberance taken out, or the mid 6000 or so), we have had our minimelt, IMHO. If, as it is more likely, AG will not move until the market are lower, or as a rescue operation if the markets become too "desperate", we will see the minimelt and from where we are, it will bring us to the mid 6000 where AG will be comfortable in lowering interest rates.
Zeev |
