The Federal Reserve is poised to cause yet another housing downturn in the U.S. I’m not talking about a spectacular Lehman style apocalypse mind you, but an honest downturn that will be unavoidable. Today’s S&P Case-Shiller home price index showed another rise in Dallas home prices in November. This is essentially lagged data confirming what most prospective DFW home buyers already knew, namely that Dallas area home prices are pretty damn high. The national index showed that U.S. home prices were up 6.2 percent, or roughly three times average U.S. hourly income growth.

The BEA just informed us that the personal savings rate for Americans hit a new 12-year low in December posting at only 2.4 percent. You’d have to go back prior to the start of the Great Recession (aka mother of all housing collapses) to see Americans dipping into their piggy banks faster than what we are currently witnessing.

These developments should garner more attention in the corporate media than they are receiving, but then again we are talking about corporate media. It’s a sell-side business driven by misinformation and misdirection. It’s not surprising to see important developments taking a back seat to the latest gossip on the 20 city finalists aiming to become complete sell-outs to Amazon’s corporate greed.

I was looking at the Dalllas Regional Chamber metrics on housing costs for the DFW area, and it’s telling that the Chamber is still showing Q4 2016 prices on Dallas area home prices. According the the Dallas Chamber site “home prices in the DFW region are some of the most affordable in the country according to the Urban Institute”. That’s interesting because a December 2017 report from the Urban Institute listed DFW as one of the 16 markets where it was actually cheaper to RENT a home. I’m looking at the Chamber’s map of DFW housing costs, and there are a number of those zip codes colored in lime green/yellow that need to be shaded darker because the median home prices in those zip codes are now well north of $250,000.

With home prices in the DFW area at record highs, there are going to be some unhappy home buyers waking up to the prospect of mortgage rates that are the highest in three years. And yet the Federal Reserve is pushing headlong into a balance sheet normalization process (at glacial speed) with expectations of more rate hikes this year. One could be forgiven for interpreting the Fed’s real reasons behind recent rate hikes balance sheet tapering as something more self-serving than advertised.

The Fed has spent the better part of a decade serving Wall Street interests and enabling Congress’ reckless budgetary waste…all for what? So corporate greed and stock prices could reach a new zenith? The Fed, as a pillar of the U.S. financial system, has been ready and willing to do business with¬†serial lawbreakers like JPM, Citi, Wells Fargo and other TBTF banks, and now here we are supposedly 9 years into an economic “recovery” and the Fed’s balance sheet is still at $4.4 trillion and the target Fed Funds rate is only 1.5% With assets looking frothy across the board is it any wonder that Fed officials are looking for some cover to salvage any remaining shred of credibility.

The unfortunate reality is that years of ZIRP and three successive rounds of quantitative easing (QE) were successful in reflating stock prices and home prices, particularly when combined with the $trillions in coordinated QE of other global central banks also printing their own fake prosperity in the name of economic stability. The PR of stable prices and full employment has been a nice infomercial repeated by the Fed for years, but when push comes to shove the Fed is a creature of the banks serving the interests of our operationally corrupt U.S. financial system.

That “wealth effect” and trickle-down monetary policy scatology plays well at Davos, but the real economy is flashing more warning signs as the ship takes on more water. U.S. consumers are levered up once again, just as U.S. stock prices are at new all-time highs. Everything is awesome, and DFW home prices show now signs of slowing down. For better or worse, U.S. home prices are now increasingly dependent on the glaringly obvious stock bubble. That begs the question of what kind of foundation we are sitting on. Was the “recovery” real or just a spectacular PR campaign by opportunistic Fed and govt officials. We will soon find out.

This brings me to an upcoming event to be held at the Dallas Federal Reserve: ‘Finding Shelter: Affordability Squeeze in a Tight Texas Housing Market’. This one-day conference promises to be interesting on a number of levels, but notable because at this February 23 conference “industry experts will explore whether market fundamentals support unprecedented home price increases.” I’m wondering how many Aggies or Fed economists it takes to spot a housing bubble.