Is the Market Getting Psyched out?

[william the wie]

Most human trades in the US markets are conducted in NYC and Chicago. These two locales have seen local, state and federal tax increases for the traders. The real estate market in both markets is soft and generally slowly sinking. I am of the opinion that this is slowing the market down. What do you think?

 

[BULLDOG]

You got a list of those tax increases?

 

[BuckToothMoron]

Most human trades in the US markets are conducted in NYC and Chicago. These two locales have seen local, state and federal tax increases for the traders. The real estate market in both markets is soft and generally slowly sinking. I am of the opinion that this is slowing the market down. What do you think?

It could be having an effect, but a bigger reason IMO is the long bull market we have had buoyed by a dovish central bank with very little accompanying real growth. I think sentiment is changing with rising rates. I believe the DJIA will see 17000 before it sees 27000.

 

[MarathonMike]

There was clearly a correlation to the real estate bubble and the stock market collapse in 07 and 08. But to me it seems you would need more widespread tax effects than just a couple of states in which most traders live.

 

[william the wie]

A reasonable position that I disagree with. If Sessions goes with DOJ sequester to sanctuary states and cities as he is likely to do the Blue Wall goes into default as soon as that goes into effect. Where we seem to disagree is that I think that the capital markets will pull out in full bug-out boogie mode on the announcement while you seem to expect them to hang around in hopes that the state governments sign a deal immediately in order to avoid default but I doubt that it is possible for IL and NY to react fast enough to prevent default and the markets know that.

 

[william the wie]

The mini-meltdown is already happening in NYC and Chicago but so far it has been very good times in FL and TX. Both states have been the poster child for an epic meltdown FL in the 1921-7 bubble and TX the 1986-95 S&L collapse. Real Estate laws in both states are Draconian leading to a relatively small footprint in the 2008 melt down.