A paper w/ 4.5% would definitely allow momemtum to turn around to the plus pertaining to the real estate portion of the economy. But, and I say this with just a laymans view, with the subprimes gathering rot, and the possibility of knocking out a pretty sizeable portion of homebuying costumers (the subprime lenders and consumers), I wonder how much the direct effect would be on the economy. The 4.5% might allow those that did not or could not remortgage 18-48 months ago that option. But, with material costs skyrocketing, and no relief in sight, and with the predicted tightening of the lenders as a whole (until money flows again- then all will be forgotten), new home construction may only see a modest increase, and those that got in w/questionable credit may miss this run. I, like you, forsee a run up in the market on large caps due to money sitting on the outside waiting to get in, and there is a ton of it. Earnings were pretty good for the last 3-4 quarters. The mention of the sarbox act reform is something I am unaware of, in context and in meaning. May be something I look into in reference to small-mid caps. My feeling is there are some very attractive mid caps to look at right now, if you have money to "play" with. And the fact that you mention Japan's tightening leads me to believe that you are about 6 steps in a 12 step program ahead of me. It is just hard for me to envision some valuations of these large caps in terms of worth that is larger than most countries in the world. I do have a concern with China's way of controlling their money. But, beware of the "global economy" per say. With some hard and true companies that resisted moving production/services out of the US doing so now, it may only be a matter of time before the middle class that this country depends on for economic well being is squeezed out of the equation. Some of that discussion is political as well. That could be interesting. Always appreciate any return advise and items for discussion.
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