``his basic idea is that risk premiums are maxed out, and have to come down. In other words, people have paid up max dollar for all risk assets thanks to the Fed dropping rates to rock bottom. Now that will reverse. His novel set of circumstances he sees is an economy that faces austerity (due to the Fiscal Cliff, etc.) coupled with a  Fed that's mostly blown its bazooka, and can't get much more juice out of QE (he believes that QE does less and less because the Fed can't push that much that much more money from bonds into riskier assets).''

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