Some economic commentators have suggested that the Federal Reserve has lost all credibility with the absolute refusal to recognize the dire effects on asset prices that their recent money printing has created.

Here's how it works: the Fed purchases Treasury Bills, aka government bonds, from financial institutions on the open market. The idea is that banks, now flush with cash, will then go out and buy riskier assets than T-Bills -- i.e., stocks -- thereby spurring liquidity.

And since the Fed owns the printing presses, it has an infinite supply of money to pour into a flailing economy. But here's the rub: For one, you run the risk of devaluing the dollar. And two, the stock market has pretty much come to not only expect but rely on these supportive measures from the government.

"The Fed has refused to even acknowledge the possibility (rather than the indisputable facts) that not only have they inflated selected asset prices like S&P 500, the Dow indexes, but they also have inflated asset prices like food, energy, and clothing, which would actually hurt the economy and consumers," writes Dian Chu at EconMatters.

The bottom line: Bernanke has taken a huge risk in trying to inflate the stock market, in an effort to boost the economy. But an inflated stock market that is based on speculation and low interest rates can create the potential for a crash.

"Stock market returns in the long run are based on earnings and not low interest rates," writes Jacob Wolinsky at DailyFinance. "Bernanke might be creating a stock market bubble which could just as easily crash as it rose. In addition, the market might get scared of all the possible negatives that come along with QEII (i.e., the money printing) and it could lead to a market decline."

So, which inflated stocks are being dumped by big money managers? To create this list, we started with a universe of stocks that have rallied over recent months. We then collected data on institutional flows, and identified the names that have seen the largest institutional selling during the current quarter.

Hedge funds think these stocks are due for a pullback. Are any of these names in your portfolio? (Click here to access free, interactive tools to analyze these ideas.)

1. RPC (NYSE: RES): Oil & Gas Equipment & Services Industry. During the current quarter, institutional investors reduced holdings by -16.4M shares, which represents about 32.8% of the company's float of 50.00M shares. The stock has gained 200.23% over the last year.

2. Weight Watchers International (NYSE: WTW): Personal Services Industry. During the current quarter, institutional investors reduced holdings by -3.7M shares, which represents about 11.74% of the company's float of 31.52M shares. The stock has gained 191.05% over the last year.

3. Abercrombie and Fitch (NYSE: ANF): Apparel Stores Industry. During the current quarter, institutional investors reduced holdings by -9.2M shares, which represents about 10.69% of the company's float of 86.08M shares. The stock has gained 45.41% over the last year.

4. Silgan Holdings (Nasdaq: SLGN): Packaging & Containers Industry. During the current quarter, institutional investors reduced holdings by -5.3M shares, which represents about 10.68% of the company's float of 49.62M shares. The stock has gained 40.89% over the last year.

5. Lululemon Athletica (Nasdaq: LULU): Apparel Clothing Industry. During the current quarter, institutional investors reduced holdings by -4.5M shares, which represents about 9.33% of the company's float of 48.21M shares. The stock has gained 134.12% over the last year.

6. Medivation (Nasdaq: MDVN): Biotechnology Industry. During the current quarter, institutional investors reduced holdings by -2.0M shares, which represents about 9.% of the company's float of 22.21M shares. The stock has gained 105.08% over the last year.

7. Dillard's (NYSE: DDS): Department Stores Industry. During the current quarter, institutional investors reduced holdings by -3.0M shares, which represents about 8.78% of the company's float of 34.16M shares. The stock has gained 51.12% over the last year.

8. Allied Nevada Gold Corp (NYSE: ANV): Gold Industry. During the current quarter, institutional investors reduced holdings by -6.9M shares, which represents about 8.73% of the company's float of 79.05M shares. The stock has gained 137.12% over the last year.

9. DSW (NYSE: DSW): Apparel Stores Industry. During the current quarter, institutional investors reduced holdings by -1.3M shares, which represents about 8.67% of the company's float of 14.99M shares. The stock has gained 62.12% over the last year.

10. Rackspace Hosting (NYSE: RAX): Internet Software & Services Industry. During the current quarter, institutional investors reduced holdings by -7.9M shares, which represents about 7.91% of the company's float of 99.92M shares. The stock has gained 128.59% over the last year.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research. Note: The numbers on top of items represent the forward P/E ratio, if available.


Kapitall's Eben Esterhuizen does not own shares of any companies mentioned.