I’ve written a lot over the last few years about missed signs and signals that clearly indicated the housing boom would go bust — and in a big way.

Check out: Calculated Risk: Q3 2012: Mortgage Equity Withdrawal strongly negative.

The MEW as figured here combines equity withdrawal, which increases overall debt, versus debt cancellations (foreclosures and the like) plus normal paying down of mortgage debt by reducing the principal.

Note that for decades this number never really moved above 4 percent of disposable income except during the biggest months for home sales. During the boom, it barely moved below 4 percent.

This should have been a huge warning flag to economists and the Fed during the boom.

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