Before you can have negative growth, you need to have slowing growth. The effect won’t be as abrupt as the end of QE1 and QE2, since they tapered it slowly, but give it a few months. Especially if the US gets hit with another “economic winter” in the snowy parts of the country (here’s hoping, doin’ a snow dance!).
Interestingly, high dollar has been exactly a harbinger of a poor economy since 2008, since it meant a rotation into cash from other assets.
Foreclosures? Many states are still working through loans from 2010-11 (believe it or not). Pretty soon, we’ll have HELOCS from the 2006 era resetting as well. Foreclosures in judicial states are up a lot since last year.
A rise in rates and end of QE will likely send any uppity sellers back underwater 🙂
