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From: dsf@allegra.UUCP (David Fox)
Newsgroups: net.invest
Subject: Re: Why are things they way they are??
Message-ID: <5876@allegra.UUCP>
Date: Thu, 27-Feb-86 13:41:38 EST
Article-I.D.: allegra.5876
Posted: Thu Feb 27 13:41:38 1986
Date-Received: Fri, 28-Feb-86 22:58:45 EST
References: <123@tetra.UUCP> <36500008@convex> <1961@jhunix.UUCP>
Reply-To: dsf@allegra.UUCP (David Fox)
Organization: AT&T Bell Laboratories, Murray Hill
Lines: 11
Keywords: stock market, bond market

Another reason the stock market is doing so well is that the tax free
bond market is so poor.  The administration's promise to "close up
tax loopholes for wealthy investors" has caused new tax free bond
issues to nearly cease to exist, since no lawyer will say for sure
that they will continue to be any good.  People with cash lying
around that they would usually invest in tax free bonds have to put
it somewhere, and many are putting it into stocks.  This increases
demand and drives up prices.  Presumably, when something breaks in
the bond situation the stock market may even out, at least a little.

This is basically conjectural, but I've corroberated it with my broker.