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Did The Fed Just Give The Green Light To Sell The Stock Market?

Posted By admin On June 2, 2011 @ 4:05 am In Money Watch | Comments Disabled

Tyler Durden
Zero Hedge [1]
June 2, 2011

Remember when the president uttered the magic words back in March 2009 [2], when he said that “profit and earning ratios [whatever the hell those are] are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it” giving the green light for the 2 year bear market rally? Well, if that was global market Risk On, Janet Yellen just gave the Risk Off command. To wit: “forward price-to-earnings ratios in the stock market fall within the ranges prevailing in recent decades, and are well below the early-2000 peak, although corresponding measures for small-cap equities (not shown) appear somewhat elevated.special questions included in the March 2011 SCOOS suggest an increase in the use of leverage by some traditionally unlevered investors (such as pension funds and insurance companies) as well as hedge funds during the previous six months. ” Yup: small caps, aka the Russell 2000, aka the Economy according to the Fed’s third mandate. Ironically, the Fed realizes the Catch 22 it is caught in, which we noted earlier, namely that stocks are pricing in QE 3, but for QE 3 to happen stocks have to drop 20% from here. Well, this may be the last warning from the Fed.

Full Yellen speech at the 2011 International Conference: Real and Financial Linkage and Monetary Policy, Bank of Japan, Tokyo, Japan [3]

Stock up with Fresh Food that lasts with eFoodsDirect (AD) [4]

Did The Fed Just Give The Green Light To Sell The Stock Market?  260310banner2 [5]


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URLs in this post:

[1] Zero Hedge: http://www.zerohedge.com/article/did-fed-just-gave-green-light-sell-stock-market

[2] magic words back in March 2009: http://www.nationalreview.com/campaign-spot/7771/does-president-know-what-p-e-ratio-stands

[3] Full Yellen speech at the 2011 International Conference: Real and Financial Linkage and Monetary Policy, Bank of Japan, Tokyo, Japan: http://ht.ly/58a2D

[4] Stock up with Fresh Food that lasts with eFoodsDirect (AD): http://www.efoodsdirect.com/

[5] Image: http://purewaterfreedom.com/

[6] RICHARD RUSSELL: A Massive Stock Market Collapse Will Wipe Out 60 Years Of Inflation And Leveraging: http://www.prisonplanet.com/richard-russell-a-massive-stock-market-collapse-will-wipe-out-60-years-of-inflation-and-leveraging.html

[7] In Past Week Americans Pull The Most Money From Stock Market Farce Since US Downgrade, Despite Market Surge: http://www.prisonplanet.com/in-past-week-americans-pull-the-most-money-from-stock-market-farce-since-us-downgrade-despite-market-surge.html

[8] TrimTabs: “No Amount Of QE Will Be Able To Keep The Current Stock Market Bubble From Bursting”: http://www.prisonplanet.com/trimtabs-no-amount-of-qe-will-be-able-to-keep-the-current-stock-market-bubble-from-bursting.html

[9] Fed-Subsidized ‘Green’ Light Bulb Hits Market -Cost: $50: http://www.prisonplanet.com/fed-subsidized-green-light-bulb-hits-market-cost-50.html

[10] Did Foreigners Bail Out The US Stock Market… By Dumping $56 Billion In Treasurys?: http://www.prisonplanet.com/did-foreigners-bail-out-the-us-stock-market-by-dumping-56-billion-in-treasurys.html

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