EconoPlay on the Dow's crash and housing:
The conventional explanation for the Dow’s plunge is that wages are accelerating and that the cost of borrowing is therefore bound to rise. But that reasoning fits under a rubric of great news and neutral news, respectively, in the world builders live in.
Builders seem comfortable with the 30-year fixed-rate mortgage climbing 34 basis points since January, calling it a move toward normality. But tax reform, on the whole, seems to weigh against homeownership in too many important markets.
Ultimately, there is no denying the crash. They always do seem to occur when the economy is strong, which is exactly why they are so discombobulating.
What makes this situation somewhat more nettlesome is that President Trump spent two years convincing voters that economic indicators are fake news, and he now has to rely on them to reassure a skeptical nation that the economic fundamentals are strong.
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