How Will State Defaults Affect Stocks?

[william the wie]

Please note I did not say if and when is unknowable. Go to yahoo bonds check munis and even at 7+% yield two cities in CA are represented. The stock screener picks up funds specializing in particular states NY, NJ and PA provide 6+% yields. So this mess will blow up in a chain reaction.

Besides the stock and futures markets moving out of NY and IL to cause confusion what will likely happen?

 

[DarkFury]

Interest rates in those cities/counties will go up.
Insurance rates in those cities/counties will go up.
Home values in those cities.counties will go down.

Interest rates go up based on their credit rating.
Insurance rates go up because their inability to stay cutting edge with fire and police staffing and equipment.
Home values go down for those same reasons.

 

[william the wie]

So. real estate losses of 1.5 GDPs or greater? that seems likely.