Two: The liquidity the Fed is pumping in will soon force the hands of our banks to lend, because they can't make money off any other investment. They aren't allowed to pay out as much as they want in dividends, nor to buy back as much stock as they want, so they will lend.
Three: Cyprus was a seminal event not for what ultimately happened -- confiscation from the rich, who had thought Cyprus was Switzerland -- but for all people in European banks. It has to send chills through the rich that the European Union pondered something that is unthinkable in the U.S. That money now stands to flow here month after month after month. It was a windfall for the U.S., plain and simple.
Four: Once the money gets acclimated, the foreigners should sense the same thing we have realized -- buying stocks may be the best way to get income. So they're set to put money in the 4% yielders, now becoming 3% and so forth.
Fifth: Last week, the president put forth new rules that say the U.S. will no longer tax foreign pension funds for investment in American real estate. As a result, the most favored part of the American stock landscape -- real estate investment trusts -- will get a whole new cohort of potential buyers. The "investment-ization" of this once-minuscule area of the market has to be noticed, and REITs should be choice investments for many of you reading this.Sixth: We speak a lot about how corporations have tremendous assets overseas, and how with breaks they would come here. I think the more important issue is how strong these balance sheets are. This is a godsend for when confidence returns, and it will return when the president and Congress either accomplish something or just cease to be important because there are no new deadlines. These manufactured crises are the only things that really stand in the way of hiring. With earnings season upon us, we are, of course, at a critical juncture. I have seen many a survey that shows an inordinate number of warnings ahead of this quarter. I think that's an overrated statistic. The simple fact is that we're seeing a secular change in the technology world -- out of expensive hardware, including personal computers, and into handhelds or cloud-based systems. For most companies, the change is happening too quickly to have produced a reaction. That and Europe are a killer to earnings; the latter has been a bedrock investment for our tech companies, particularly Dell (DELL) and Hewlett-Packard (HPQ).
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