It's hard for me to go against the grain with Home Depot (HD), it really is. The fairly low multiple of 22 times trailing earnings, the current yield of 1.92% and the outstanding history of dividend growth are oood reasons to buy on pullbacks. And my readers know that I am typically indifferent to the causes of a recession. It's the current situation in the mREIT area that has me concerned. Lending standards have changed. What has occurred is that there used to be this ability for the mREITs to borrow money at pretty close to Fed rates. That's changed with the announcement that the FHFA (Federal Housing Finance Agency) has made with regards to this, and how it is going to affect interest rates. You might be asking yourself how it might affect interest rates at all. The reason is in the spreads between what mREITs pay to borrow, and the amount adding new mortgage backed bonds pays in interest. The changes mean that in order to get the same returns, the mREITs have to take on greater risk. They will offset that risk by demanding higher interest rates for new mortgages in exchange. The fallout will be widespread, but not necessarily catastrophic. This has the net effect of raising interest rates everywhere, since treasuries will have to pay more to compete with mortgage bonds, as will international bonds. Nothing in bonds moves by itself, everything is always affected. And if mREITs aren't in a hurry to buy new mortgages, that means the big banks like Wells Fargo (WFC) and Bank of America (BAC) will have to take on the lending risk on their own. They won't be in a hurry. Expect this activity to be a drag on new home purchases. Credit standards are going to be tightened as a result, and the prices of both new homes and the costs of borrowing should be expected to increase. Expect the slowness in new home sales to be a drag on future Home Depot earnings, at least for a while. I can't say that this kind of thing will be recessionary, but it should put a cap on the go-go years we've been having. Once the news of these changes is fully understood by the public, I'll become a buyer. For now, I'll pass because there are better income opportunities out there. In the meantime, I remain long on banks, short on mREITs, and for the most part unaffected by Home Depot.