“That marginal dollar that’s sitting in cash… will just sit there,” says Jim Bianco.  “It will be harder to drag that money out.”  You get 2/3 of the historical stock market return of 9% with almost no risk in money markets.

So Mr. Bianco says that this is what the stock market is competing with now. 

He agrees that we are generally in a secular bond bear market.  And in the short term, he is looking for an old-fashioned capitulation, as so many bond managers have been long and searching for a recession and arguing for a rally.  “They have been getting their brains beaten in, and they can’t take it anymore,” he says.