He bases this on expensive valuations, all-time high corporate margins which are likely to mean-revert and Fed tightening effectively taking away the punch bowl. Today's newsletter will explore Blodget's views in detail, the holes therein as well as the more plausible risk to markets in the short-term: a deflationary bust precipitated by Japan and/or China. Many sell-side analysts point to the so-called J-curve effect, where the increase in exports after currency devaluation typically lags the rise in imports by 12-18 months.