sherlock...
Before completely trashing Merrill's (actually Bernstein's) market allocation, you might want to read Greenspan's (and Berdanke) most recent pronouncements once again. While deflation is their fear and has 100% of their attention right now (the underlying thesis of the recent flood of money into the system and the recently lowered rates), any hike in rates (such as through a selloff in bonds) would be totally unacceptable in their fight to keep the economy alfoat. Specifically, Berdanke talked about monetizing the debt by the Fed making permanent offers on bonds across the spectrum (even the longer ones if necessary) to keep them from falling.
Perhaps that was behind Bernstein's thinking. Whatever it was, his track record is extremely good.
mlsoft