The latest issue of Tierra Grande is out, and it contains more examples of the Federal Reserve’s fingerprints on the Texas housing market. This new batch of evidence is contained in an article titled ‘Game of Homes – The Supply-Demand Struggle’. What is thoroughly entertaining is that the two Dallas Fed employees (both recent college graduates apparently) working on this latest missive appear to completely ignore their employer’s responsibility for the distortions in the Texas housing market while making a complete mockery of the economics profession. Collaborating with a PhD from TAMU, they lay out the case that strong demand for single-family homes in Texas has combined with tight inventories and rapid home price appreciation to cause declining affordability. Gee! You think?
“Texas’ strong demand for single-family homes coupled with constrained supply has led to tight inventories and rapid price appreciation. Residential construction is unable to keep up with demand because of constrained lot and labor shortages. The result: higher land and labor costs and declining affordability in the state.”
That ridiculous drivel is entertaining on a number of levels, not the least of which is the fact that two Dallas Fed employees contributed to it. It is a fact that does not surprise me at all, because I was writing just a few days ago that the Fed seems to be incapable of self-reflection. What is also amusing is that neither of these two supposedly well-educated individuals have any previous full-time work experience prior to their employment at the Fed. Go figure! It is truly fascinating that a PhD and two Fed employees can have a supposedly serious discussion of the supply and demand imbalances within the Texas housing market and completely ignore the causes of the distortions.
Dr. Torres, Ms. Assanie and Ms. Greer, let me see if I can spell it out for you since you were apparently having a difficult time with the subject matter. Apparently you were more focused on “cleaning” the data. That’s one of the special skills listed by of one of the Fed-employed authors. No joke! Those of us who live in Texas are perfectly aware of the fact that there are some serious distortions in the housing market. We know that homes are no longer affordable for many Texans…
What we really want to know is why establishment bureaucrats and crony capitalist bankers seem to be hell-bent on ignoring why homes and real estate are once again unaffordable. Why are “professionals” and supposedly educated people willing to do the bidding of a criminal banking sector and pretend that this is just the new normal? Why are employees from the Federal Reserve so oblivious to the bubble and bust cycles they are creating? Is the promise of higher pay at a future employer just too tempting? Are you incapable of telling the truth for fear of being recognized as human? Those are just some of the questions I have been pondering lately.
“It’s difficult to get a man to understand something, when his salary depends upon his not understanding it.” Sinclair
At any rate, let me help you out with the ‘Game of Homes’ thing so yourcan provide Texans with a more accurate version of what’s happening. The Fed blew it again, on a number of levels. After the last housing crisis, the Federal Reserve came running to the rescue of America’s criminal financial class to bail them out and make them whole, courtesy of U.S. taxpayers of course. Years of quantitative easing and zero-interest rate policy have created distortions in all sorts of markets. This fact is admitted by none other than the former president of the Dallas Fed himself. What we have now are not markets, but more bubbles being levitated by the Fed…
It didn’t help matters when the Federal Reserve facilitated turning foreclosures into a Wall Street rental empire when various hedge funds and private equity groups bought up large swaths of affordable homes and rented them back out to the poor peasants who were evicted during the foreclosure epidemic. Of course here in Texas, the Fed’s latest bubble-engineering efforts shot the wad prematurely as speculation in the shale oil patch turned parabolic, feeding off the cheap credit that the Fed and the banking sector was more than willing to extend. When the imbalances were more than the market could bear, oil prices collapsed along with Texas’ employment growth engine. Now we are left waiting for the bubbles in the equity and bond markets to unravel while our property taxes still seem to be on an upward trajectory, at least for a few more months.
Supply and demand? Those concepts seem rather familiar. I remember reading about them many years ago in a book. Those concepts used to hold some sway in my normal course of thinking, but that was before I learned what the Federal Reserve was capable of and the extent to which they could bastardize the concept of markets in general. Many Texans are finding that the housing market is no longer affordable, but if you are a high-ranking Fed official with previous employment at Goldman Sachs the whole supply and demand thing is probably working out quite well. You might even be able to purchase two luxury condos, while many working-class Texans get priced out of the housing market.
Dallas County CAD records indicate two luxury residential condos under the ownership of one Robert S. Kaplan. The combined appraised value of both properties is more than $4.5 million, with more than 7,000 square feet of combined living space. I can only imagine that one needs a lot of room to do “God’s work”. America’s secret banking cabal has obviously done a nice job taking care of their own for several decades. It’s a shame the same can’t be said for the general American public. Income inequality in Texas remains slightly worse than the national average based on a recent study from the Economic Policy Institute.
By all appearances it would seem the Texas housing market is just another one of the Fed’s glorious policy errors, hiding in plain sight for anyone willing to look.
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