Some interesting thoughts from David Rosenberg at Gluskin Sheff:
“Well, rates are at zero. The central bank balance sheet is pregnant. All the fiscal goodies have had no lasting effect. The government is increasingly unpopular (the President’s approval rating in a new poll is at a record low). And now, in the latest tale of accounting gimmickry, a House-Senate conference is moving to establish new rules for all but the largest U.S. banks (who have already been bailed out) that will basically allow them to pretend that the bad loans on their books are actually still good (allowing them to spread their losses for up to 10 years instead of recognizing them immediately). Japan kept zombie banks alive … and so are we (the U.S. that is).
Oh, but I forgot. The demographics are far superior in the U.S.A. As far as I can see, that’s the last final distinction in our favour is labour mobility. However, the huge number of Americans upside-down on their mortgage has rendered that obsolete, and our political system is standing in the way right now of good decision-making. So, if this is turning out to be more Japanese than anyone would have liked or wanted, draw the chart of the Nikkei and JGB yields to get a sense of where market prices are likely headed. Treasury yields at 3% may be as attractive as the 4% yield we had at the turn of the year. “
Source: Gluskin Sheff