Peregrine

Of course they want to retain their power and they also believe that they also believe that they are the only party who can govern China. Whether that is right or wrong, who knows? But keep in mind this: before the Communist Party came into existence, China was largely a feudal society that went no where for over a century. The country has NEVER EVER had a democracy in its history...you think that such radical change can happen cold turkey? This will take time to develop. The rest of your post just reveals a deep ignorance on geopolitics.

Let me start by saying that I am Chinese Canadian and have long believed many of the preconceptions that the West has about China, including some of the things you said here. But my views have changed as I've gotten older and have come to understand China and its government better. 1) With respect to freedom of speech: Yes, it is far restricted compared to what happens in the West. But it's far less than what many think. The Chinese people frequently criticize the Communist Party, so much so that my parents here are annoyed by their relatives' complaining in China. Don't mistake the Chinese people for being ignorant about their government's faults - they know plenty (internet is a huge source of information). But for now, they are willing to put up with a lot of things because they're getting wealthier. That's the key for both the Chinese people and the Communist Party - economic growth. 2) Property rights and the government's ability to appropriate: This is a patently false. Granting property rights to citizens was one of the key policies that jump-started China's growth after Deng Xiaoping came into power. Property is also the most valuable asset by far in Chinese households. Chinese government officials know how important this is and they also value social stability above all else. A municipal government has to pay for property to make way for more development. Now, that is not to say shenanigans doesn't happen. In some places, such transactions are rigged with information asymmetry and the transaction process is highly corrupted. This drew a lot of attention some time ago and such practices are being cracked down on. In sum: there are plenty of things wrong about China, but there is no doubt that it is improving. The senior officials of the party aren't like the ideologues of the past - many of them have experienced some of the worst that happened during the Mao years. In my view, the Chinese leadership today are more pragmatic than ideological and they think long-term. They know that economic growth requires more reform and more opening but they also value social stability above all else which is why they want the changes to happen gradually.

I'm too lazy to look up all sources but I'll try to direct in the following: 1) Mortgage underwriting tightening: Mortgage insurance rules changes: you can find this on CMHC or Genworth. Tightening uninsured mortgage underwriting: refer to B-20 (and soon B-21) guidelines from OSFI. Plus historic low NPLs, loss ratios and origination LTVs in Canadian residential uninsured mortgages in all federally regulated banks. 2) Housing supply shortage: Just found this: http://www.bnn.ca/newly-constructed-homes-near-new-lows-in-gta-1.636982 3) Debt service ratio: I stand corrected by Liberty on the total DSR, which is currently a bit higher than its 25-year average. Interestingly enough, the DSR on mortgages are right at its historic averages so the increase in total DSR is due to the rise in DSR of non-mortgage loans - likely due to more auto loans and substitution of credit cards for cash based payments. RBC report on Stats Canada DSR ratios: http://www.rbc.com/economics/economic-reports/pdf/other-reports/currentanalysis.pdf

Firstly, anecdotes regarding mortgage underwriting are relevant because mortgage underwriting is centralized and automated at the big banks. If it works for one it works for all. Secondly, it's easy to just repeat the words green belt and supply without actually backing them up. If the green belt is causing supply shortages and prices to go up then why have prices in Newmarket (outside the greenbelt) have kept pace with prices in Richmond Hill and Toronto (inside the belt). If what you say is true then prices increases should be bigger in Richmond Hill and lower in Newmarket. However that's not the case. In addition, how do you explain Hamilton? It doesn't have a green belt and price action in Hamilton has been highly correlated with Toronto. Plus Hamilton is far from a beacon of economic prosperity. I've attached price action for Toronto and Hamilton for the past 18 years. Thirdly mortgage rates have helped but not as much as you thing. I see that today some banks have 3% promotional rates for 5 yr fixed. That seems a bit low. They were higher when I renewed my mortgage a couple of months ago. But let's go with 3%. When we bought the house I live in now (a semi in a Toronto suburb) in 2004. We paid 280K, put 20% down, took out a 5 year fixed mortgage @ 4.5% with a 25 year term. Our monthly payment was $1,245. Right now our house goes for about 650k. If one was to take out the 3% promotional rate and put 20% down, the monthly payment would be $2,458. So it's a massive increase in cost even with the lower rates. You actually haven't refuted a single thing that I wrote. 1) Anecdotal evidence can be highly misleading. Do you know all the details of even your sister's mortgage? Besides, even in the homogenous financial system in Canada, taking a single mortgage to represent the entire mortgage market is rife with statistical error. Anyway, the facts remain clear: mortgage underwriting standards for both insured and uninsured have never been tighter. 2) I don't know what you're getting at here. I'm not just repeating green belt. Supply constraints are backed by hard data - take a look at months of supply data for single detached homes in the Greater Toronto area over the last few years - they are at historic lows. 3) It is clear that low mortgage rates have had an enormous effect on housing prices. People always talk about the debt-income ratio, but the total debt service ratio is in line with its historic range.

I'm not arguing whether it is or isn't in a bubble, just that the US situation from 2003-2007 and the Canadian situation now are very different.

Both Vancouver and Toronto are surrounded by green belts. A large part of the surrounding greater metropolitan areas are undeveloped due to difficulties in obtaining permits and lack of zoning rights. In Toronto, for example, you'll notice this when you go north of the city. Some lots are crammed full of townhouses, yet on the adjacent street corner there is no development. The housing shortage bears out in the data, especially for single detached homes. Months of inventory are at record lows in Toronto. As for the comparison with the 90s, I'm not sure that's relevant. This is a period of extremely low interest rates and both cities are also considerably larger than they were in the 90s. In the 90s, 5-year fixed rates were in the area of 8-15% versus barely 2% now. Also, Greater Vancouver has grown from 1.6 million to 2.5 million from 1990 to 2015, a 56% increase, while Greater Toronto has grown from 3.8 million to 6.1 million in that same time frame, or a 61% increase. Together, these two cities accounted for 40% of the entire growth of Canada's population from 1990-2016. Housing supply has increased, but not to the same degree as population growth. Re: underwriting. Anecdotal evidence can be highly misleading. You're not privy to all the facts when you hear this stuff through the grapevine. The fact is that it's harder now to get mortgage insurance now than ever before. It is also harder to get an uninsured mortgage with any federally-regulated lender due to B-20 rules. Tightening regulation of course is pushing stuff into the more shadowy lending side, which is growing but still a very small part of the entire mortgage market.

There are a few key differences between what happened in the US and what's happening in Canada (but really just Toronto and Vancouver) right now. The US housing bubble was driven by a general mass delusion regarding housing prices that drove mortgage underwriting standards to the ground. This in turn fed massive housing development that ultimately created a massive overhang in the housing supply that took years to work through. What's driving housing prices in Canada (but really just in Toronto and Vancouver - the rapid price increases haven't been observed elsewhere) is primarily a function of record low interest rates and low housing supply. If anything, mortgage underwriting standards have never been tighter. Ask anyone in the real estate business in Canada these days - it has become far harder to secure a mortgage now than just 5 years before. Now, I'm not saying that housing prices can't fall - but the general narrative comparing the two situations has plenty of fallacies.

This is an excellent explanation of the dilemma facing housing finance policy-makers today. Either the GSEs are truly government backed or they are privately-owned. Any arrangement that mixes the two will lead to the same issues pre-crisis.

Except that one side wants to get rid of the entities all together by starving them of their capital. The other side wants them recapitalized to ensure affordable housing, and would rather see them in private hands than in constant jeopardy as they are in their current state. Furthermore, it's all up to the Executive Branch anyway, and if not, the Judicial Branch. Congress is the least important of the three. Only financially-interested hedge funds are complaining. When did my personal assets morph into a hedge fund? Haha, duly noted.

Except that one side wants to get rid of the entities all together by starving them of their capital. The other side wants them recapitalized to ensure affordable housing, and would rather see them in private hands than in constant jeopardy as they are in their current state. Furthermore, it's all up to the Executive Branch anyway, and if not, the Judicial Branch. Congress is the least important of the three. They are not under "constant jeopardy" as they are under government conservatorship currently. The case can be argued that without the government's backing, these entities would cease to exist and the common and subordinated preferred stock would be worth 0 so why should they receive anything? The GSEs are currently in a weird limbo state, but interestingly enough the mortgage market is functioning well. Only financially-interested hedge funds are complaining.

Not if charters (Congress mission) disappear together with the implicit guarantee. Perhaps Mnuchin recommends an explicit, pay-for guarantee from Treasury for specific segments of mbs. If it's an explicit guarantee, then the GSEs will fall under the purview of the US government. Americans love the 30-year mortgage and the 30-year mortgage simply isn't possible without federal government backing. No private entity will lend long for 30 years at fixed rates when their liabilities have technically 0 duration.

I don't think many people understand what they're getting into by buying into these companies. It is clear that the former system with Fannie and Freddie as private entities with implicit government backing was unsustainable and led to perverse market effects. There is strong bipartisan opposition to turning these two GSEs into the hands of private ownership again.

This. Given where interest rates and corporate profits have gone, the case can be made that stocks are cheap (relative to other asset classes).

For those who enjoy long-form journalism, the following New Yorker piece on Obama is one of the best articles I've read this year. Whether left or right, I think we as human beings can all admire the man's rationality, integrity and perhaps most importantly, optimism. I think that we will miss him. http://www.newyorker.com/magazine/2016/11/28/obama-reckons-with-a-trump-presidency

Now much of this may be isolated incidents, but this is highly disturbing nonetheless: It seems like many of these people, who were previously silent, are now more emboldened than ever.

Surely you are kidding. Surely you realize that Hilary is the worst thing to happen to the democratic party in living memory. She is unelectable for prez. The pundits should have realized that point. She comes in as the early favorite and when people really have to think about it hard and make a decision they just can't vote for her. I mean her campaign against Sanders was a warning to the party.... Sanders should have been a lightweight. I hope many of us have changed our world view after this election. I thought I was cynical, but my pre-election cynicism is nothing compared to after. I was so wrong at understanding the US - where I reside BTW. And I think Hilary being the kind of woman she is cannot be prez. This is my theory of course. But I have thought about successful women leaders. They are the kind of low key non pushy types in male-dominated societies who don't threaten the status quo between men and women. For example, Butto or Thatcher. Thatcher can never be considered a feminist. She looks so motherly with her trademark purse. But Hilary is different she is a strong and smart and elite woman. If she runs the country, many will think that women have a strong place in america. And that is a threat, to both men and women. It is upending their view of their society. I cannot otherwise cannot explain the visceral hate towards her. I mean all they got on her is some improper handling of emails?? I think a lot of people who voted against her think of her as a unelectable bitch. (sorry I just cannot find a more apt word) The unrelenting, sensational and unsubstantiated attacks on her over the years ultimately took its toll.

This may be the best piece I've read on this election.

I still LOL hard at "accomplished businessman".

Re: Fox: I found this interesting: http://mediamatters.org/blog/2016/11/04/white-racist-kills-two-cops-iowa-ambush-and-fox-news-goes-quiet/214294

Say what you will but this is what I like about Trump. Most politicians would have coughed up the money because 1) Its not theirs 2) They don't want a bad publicity. Not Donald. He saw the charge he didn't like and now this guy has to explain. Very powerful message and these idiots at WaPo think they landed a scoop. If you've agreed to pay x amount for a product or service provided and then reneg on that obligation, what does that say about you? If the product is defective only a fool(or someone using money that isnt theirs) would pay for it. What defines defective and substandard? This is subjective. If we allow one side to define acceptable quality then the transaction is asymmetric. There needs to be compromise and that is usually hashed out in contracts prior to the work being done. Besides, I'm not even sure Trump even saved any money from stiffing his vendors with all the lawsuits, lawyer and court-related fees that followed.

Say what you will but this is what I like about Trump. Most politicians would have coughed up the money because 1) Its not theirs 2) They don't want a bad publicity. Not Donald. He saw the charge he didn't like and now this guy has to explain. Very powerful message and these idiots at WaPo think they landed a scoop. If you've agreed to pay x amount for a product or service provided and then reneg on that obligation, what does that say about you?

I find it funny that this election for some reason or another has been a referendum on politics. What the people who rail on the "mainstream", "the establishment", "career politicians" et al don't realize is that wherever there is people, there will be politics - it's unavoidable. People have some kind of idealistic, utopian view that there is some better form and they have a very mistaken view in how people and our society actually works.

Cardboard, you seem rather incapable of viewing things in its appropriate contexts.

Look at RWAs, not simple asset/equity calculations. There's a reason why A/E is way higher but their tier 1 common equity ratios are in line.

I go back and forth on 2nd amendment / gun control, but I don't think it's within a president's power to modify. If there's political will / popular support against the 2nd amendment we should vote on an amendment. It makes me uncomfortable when presidents support hollowing out certain aspects of the constitution as it implies a disregard for the document they swear to protect. I think there's a very good argument that we should stop selling semi-automatic rifles, but I don't support doing that any way other than a constitutional amendment. Well that depends on how literally you interpret it. I think having a strict, literal interpretation of the document does more harm than good and is not what it's intended to be. I'm pretty sure the founders didn't intend on allowing the people to own semi-automatic weapons. I'm comfortable with having Executive/Legislature regulate our freedoms. If anything goes out of hand, we have the Courts to protect us. See, I'm not sure of that. Most commentary on the intent of the amendment seems to be that it was some combination of maintaining a strong standing militia (similar to what Switzerland has) and preventing government tyranny. That would imply to me that it was written to allow for military-grade weapons. I think there's a good argument that military-grade weapons have progressed to the point where we no longer wish for people to have them (or at the very least be able to easily obtain them), but I think that's a change of direction from how it was intended and should be enacted through an amendment. I'd vote for that amendment, but I wouldn't want it done a different way. The problem is once we start allowing loose interpretations the whole document basically just becomes symbolic. That's where I really diverge from Hillary/Obama though. My biggest issue with Obama's presidency is the use of military force without a declaration of war as I think is required by the constitution. Part of the benefit of that is it requires the president to come to congress, say "hey here's my rationale and my plan", and then thoroughly debate both parts. Hillary rushed Obama off to war (at least in Libya) without taking the time to go through Congress and now we're suffering the consequences (see tail risks post above re EU disintegration). The Germans took their time, thoroughly debated the question of "what happens when Gaddafi is gone", and decided to abstain from the bombing. Obviously congress isn't always right either, but it helps. I agree. The whole ISIS mess stems from the US intervention into Libya, so Trump's claim that Obama and Hillary are the founders of ISIS aren't that exaggerated, though I know he is definitely joking. But the media picks this up as another sign that Trump is unfit and immature. Lol.