Jaime would be clueless at two weeks into the tax reform, just blowing smoke.
But the tax reform has induced the melt up, mainly because pension funds are allocating to stocks. However, the tax reform obviously raised rate some 10 basis points across the board, and housing will take a hit counteracting all the good news. Housing will likely take the hit in California first, then Florida if matters repeat.
The problem with the pension funds is they will revert back more bond holdings once the California cities have their budgets. So somewhere in this quarter we will see a stock market correction and the TBTF system is back in trouble.
Yields are still rising
The ten year is back to 2.6, a 20 point rise in a year. All the tax reform did was to shift resources from an treet to all street, and this was all about maintaining the TBTF system.
In the sandbox, we don;t ind TBTF banking, we can do it. The difference is that we open TBTF banking to main street and wall street. So all of Jaimie's mortgage backed securities are at risk.
The problem with the pension funds is they will revert back more bond holdings once the California cities have their budgets. So somewhere in this quarter we will see a stock market correction and the TBTF system is back in trouble.
Yields are still rising
The ten year is back to 2.6, a 20 point rise in a year. All the tax reform did was to shift resources from an treet to all street, and this was all about maintaining the TBTF system.
In the sandbox, we don;t ind TBTF banking, we can do it. The difference is that we open TBTF banking to main street and wall street. So all of Jaimie's mortgage backed securities are at risk.
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