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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: CalculatedRisk who wrote (30010)	4/4/2005 12:52:29 PM
From: benwood	Respond to of 110194

I would expect a bigger drop at first along the lines of what you suggest, and that will cause a lot of inventory to be yanked off the market as the post-Nasdaq speculators lick their wounds and wait for the inevitable (to them) bounce. Speaking of "market friction" we had that discussion here (or Mish's forum) about the tax on sales in a few states, including Washington State. My brother sold a house last year and said his sale including a $6k plus charge for the excise/transfer tax. I looked up my 1993 house sale and for King County I was charged 1.78% at that time. Perhaps that rate has gone down due to the increase in property values. Which reminds me of how much money that has poured into wherever that money goes around here as a product of the real estate bubble and turnover -- they must be reaping hundreds of millions of additional revenues. Naturally, they always seem to inflate their expenditures to meet the increase, and when the bubble collapses and sales fall (along with absolute prices), that windfall will evaporate like a Vodka on Mercury and there will be pressure to increase taxes to make up the "shortfall." They are like a boa constrictor, tightening as a prevailing tax boom causes more dollars to be exhaled by punch-drunk tax payers. When sobered up, tax payers discover the immense pressure they are under to maintain everything at the heyday levels. You can't inhale your way out of a boa constrictor bind; instead you must kill or injure it.