hc, I'm not quite sure what you are referring, all I see is that Jeff is bullish on bonds, believing that the yield on a 10-year treasury will fall from 2.15% to about 1.7% by the end of the year, which should, theoretically, goose the price by about 3.9%. In my opinion, that's not good news for naive, passive investors (like our children, funding their 401(k)s on a monthly basis). All that does is keep equity prices artificially high for at least another six months, resulting in nothing but bad buys for them.
By the way, Bloomberg is making some noise this morning about BEER, "Stock Investors Are Drunk on the BEER Ratio". Isn't BEER, the Bond Equity Earnings Ratio, just another name for the Fed Model? Same Old, Same Old.
IMO, the financial media should be interviewing Narayana Kocherlakota, the president of the Minneapolis Fed.
Here's one of his delightfully iconoclastic points of view:
« In his research, Kocherlakota has a history of staking out counterintuitive positions. For instance, in a 1996 study, he poked holes in the widely held belief that young people should own more stocks and gradually rebalance toward less-risky government bonds. He pointed out that the possibility of a disastrous decline in stock prices is exacerbated over time. "Over a 30-year period," he wrote, "the events of 1929 can occur 30 times." »