When Mr Bernanke said the fed will sell short term treasury and buy long term treasury bond with the same amount, he means the fed is not going to print money, which is good long term wise. Short term interest rate will rise and long term interest rate will fall. The yield curve is flattening, can even inverted, which the curve reflect negative outlook for economy.
As short term interest rate go up,Investor will have no interest to borrow short term to invest in stock market or risky asset anymore. If they want to borrow, they have to commit long term. In this environment, most speculators will be filtered out.
Stock market will fall greatly, 1st selling by speculator, 2nd, selling by general public that need cash and not so wealthy, lastly follow by panic selling. You can imagine when they sell at whatever price, means they can sell at 40, 50 or even more than 50% discount. Other risky asset prices played by speculator is at risk as well, like property? Commodity? Etc.....
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