> CDOs did not blow up the housing market. The housing market blew up the CDO market. The two were indistinguishable (CDOs == buckets of over-leveraged mortgag

> CDOs did not blow up the housing market. The housing market blew up the CDO market. The two were indistinguishable (CDOs == buckets of over-leveraged mortgages), so I'm not sure what your point is here. No one really knew/cared what was in those CDOs, so people were trading them at face value. I don't think recent home owners are even remotely as leveraged as they were in 2008, so we're not risking a cascading blow-up effect. House prices went up because of QE + high demand. QT will decrease demand at such high prices, and thus lower prices; we're already seeing this happen due to interest rate hikes. Undoubtedly we'll see some foreclosures, but I don't think it will be a bloodbath.