In case the housing market declines in Los Angeles area to the extent
of 20% of its current/peak value, how will the stock market, measured
by DJ30, SP500 or Nasdaq, be affected? The answer should address the
fundamentals (like rising mortgage interest rate necessarily pushes
down the bond market) and history. I heard people saying money moves
from property to other types of investment but am not sure if it is
true--Bond would drop, for example. How does history support a
correlation, if any? Note that the question assumes an eventual
housing decline  and is not on when this will occur. Since the
question is on a future event, the answer should be in the realm of
reasonable likelihood from knowledgeable minds.