Zeev's Turnips Patch-No Politics (ZEEV)

[osprey]

The S&P p/e versus bond yields sounds a lot like the "fed model" that used to be mentioned frequently on this thread. The idea being that rallies couldn't get much momentum if the aggregate p/e was over the safer bond yield. Does anyone know what the fed model says today about valuations?

If the ratio of p/e to bonds is more important than actual p/e than we may never see the ultra low p/es of <10 that have characterized other bear markets.

It also says that if interest rates rise a lot, that should slam the brakes on any stock market move. We are in uncharted territory here with record low interest rates so it is hard to say what will happen. I doubt that they are sustainable for long without causing some other economic dislocation, probably inflation.