If 10% years treasuries go to 3%, it would justify a much higher PE on the spx. I don't see that unless we have a serious recession and thus major decline in earning (which will naturally bring the PE up even if the SPX stays in place...). An inverse yield curve (at current rates, rather than at 3%) will be sufficient to bring equities down sharply. By the time the the feds come to the rescue (and bring rates back down), the market may first discount a recession, and then a following recovery. Right now, I still think we take 2100, and because we had quite a stretch now attempting, it may carry a little more than just a "fakeout"...
