Peregrine

From what I recall, he used some margin as well.

Really useful information from a U.S. expat in China and dispelled some of the false notions I had myself about wet markets:

Some of the tidbits in the article are mind-boggling. The CT scans did 200+ a DAY whereas over here we'd be lucky to see 10 a day. China's ability to carry out a wide coordinated move at scale with insane speed and efficiency is unmatched.

Lol what? How were they diagnosed BEFORE being hospitalized? Why not? They come to the hospital, wait for 5 hours while infecting all other patients waiting in line (and being infected as well). Then they met the doctor, who asked the nurse to do a series of lab testing for them. Then results show positive. And doctor says sorry we don't have any beds for you today. Go home and try to come here again tomorrow to see if we have any empty beds. Your story sounds like a whole load of BS. There is absolutely no way the hospital is letting an infected victim just go home. They’ll house them in tents if there aren’t any beds and keep them quarantined. Are you from China? Have relatives. If China is capable of completely shutting down 15 cities, enclosing off-boarding passengers suspected of being infected in boxes, and building a 1000-bed hospital in six days you think they’d test someone, find out they’ve been inflicted and just say “you should go home and come back another day when there’s space”? Have you seen the videos of the hospitals? They are overrun. They probably don’t have enough tests and telling people to go home and stay inside is a decent way to contain something. Basically house arrest. They’re full of people full of panic. Wuhan has 11 million people, just imagine what would happen once you quarantine the city and everyone’s scared shitless. Of course they’d rush to the hospital whether they have symptoms or not.

Lol what? How were they diagnosed BEFORE being hospitalized? Why not? They come to the hospital, wait for 5 hours while infecting all other patients waiting in line (and being infected as well). Then they met the doctor, who asked the nurse to do a series of lab testing for them. Then results show positive. And doctor says sorry we don't have any beds for you today. Go home and try to come here again tomorrow to see if we have any empty beds. Your story sounds like a whole load of BS. There is absolutely no way the hospital is letting an infected victim just go home. They’ll house them in tents if there aren’t any beds and keep them quarantined. Are you from China? Have relatives. If China is capable of completely shutting down 15 cities, enclosing off-boarding passengers suspected of being infected in boxes, and building a 1000-bed hospital in six days you think they’d test someone, find out they’ve been inflicted and just say “you should go home and come back another day when there’s space”?

Lol what? How were they diagnosed BEFORE being hospitalized? Why not? They come to the hospital, wait for 5 hours while infecting all other patients waiting in line (and being infected as well). Then they met the doctor, who asked the nurse to do a series of lab testing for them. Then results show positive. And doctor says sorry we don't have any beds for you today. Go home and try to come here again tomorrow to see if we have any empty beds. Your story sounds like a whole load of BS. There is absolutely no way the hospital is letting an infected victim just go home. They’ll house them in tents if there aren’t any beds and keep them quarantined.

Lol what? How were they diagnosed BEFORE being hospitalized?

What are the circumstances behind this example? Because no bank or federally regulated financial institution, not to mention credit union, will underwrite a $700k mortgage for a guy making $30k as a barber regardless if he's using it largely as a rental. And if $4,300 is his payment and assuming a 35-year amortization, his interest rate is 6.7% which is private lender territory.

Just curious - what was the expiry date on that put?

Thanks for this Liberty. It's ironic how these problems surfaced as Home was trying to ramp up its insured mortgage business (Accelerator program), which is theoretically supposed to be a higher credit quality business.

I don't want to get into another back and forth. And you're clearly putting words in my mouth and taking a couple things I said and disregarding others. In my view, it's both a supply and demand problem. I've made the case that there are supply issues but there's no doubt that when prices rise like this price action follows as well. That is inescapable.

The cranes that you refer to are building condos and there aren't many that are saying that there's a supply concern with condos - though listings there have also tightened. It's single detached homes that are now increasingly uncommon and whose prices have risen 33%. Condo prices have risen near that much. From CREA stats: GTA Condos 29% YoY. GTA single family 30% YoY. Tell me more about supply. I find it tiresome to discuss with you because you automatically take something I said, conflate it and then present a gotcha-type conclusion. One year numbers can have plenty of noise, but take a look at the following graph and tell me what kind of housing units have been rising faster than others: http://creastats.crea.ca/natl/images/natl_chartC010_xhi-res_en.png I also said that condo supply recently has been tight, but the supply concern isn't chronic like it is with single family detached homes. You'll see a lot of condo completions this year and the next which will help to alleviate some of that tightness currently. In contrast, there is barely any forseeable development of single family housing in the city area. Anyway, I'm done talking to you about housing.

There are spill-over effects on nearby towns with populations of between 100,000-300,000 when their neighboring city with over 6.5 million inhabitants see detached prices rise by so much. Just a small migration of people priced out of the GTA or selling out of their homes in the GTA and relocating elsewhere will have outsized impact on smaller towns. They're migrating to London, Windsor and Thunder Bay? I think a lot of retired people are as well as younger people who find the cost of living in Toronto too much to bear. IF people from Toronto are moving to Thunder Bay, their population should be increasing substantially if prices are rising 30%. Meanwhile, if you look at the data, the population has declined by 0.4% the past 5 years. How do you explain that? https://www.tbnewswatch.com/local-news/thunder-bays-experiencing-low-population-growth-531010 5-Year (2011-2016) population growth rates: London: 4% Kitchener-Cambridge-Waterloo: 6% Barrie: 5% Toronto: 6% Thunder-Bay: 0% But anyway, that’s beside the point. If you’re incoming migration is quite a bit wealthier than the present population, it will affect housing prices. But if population growth is 0% who are the wealthy people migrating there driving prices up 30%? I dont understand the logic. You can have net immigration yet still a static population. The net immigration might simply be replacing the numbers of people who move elsewhere or pass away. I don't know the demographics but just looking at population statistics tell little about what's happening with home prices.

The cranes that you refer to are building condos and there aren't many that are saying that there's a supply concern with condos - though listings there have also tightened. It's single detached homes that are now increasingly uncommon and whose prices have risen 33%. Condo prices haven't risen near that much.

I don’t know much about the situation elsewhere so I can only venture a guess. In general, I think housing supply is fairly inelastic in the short run. Not only does it take time to build them but it also takes time to get the requisite permitting, the development approvals, etc. Plus, manufacturing completely new development on new land requires new infrastructure as well and that takes time.

There are spill-over effects on nearby towns with populations of between 100,000-300,000 when their neighboring city with over 6.5 million inhabitants see detached prices rise by so much. Just a small migration of people priced out of the GTA or selling out of their homes in the GTA and relocating elsewhere will have outsized impact on smaller towns. They're migrating to London, Windsor and Thunder Bay? I think a lot of retired people are as well as younger people who find the cost of living in Toronto too much to bear. IF people from Toronto are moving to Thunder Bay, their population should be increasing substantially if prices are rising 30%. Meanwhile, if you look at the data, the population has declined by 0.4% the past 5 years. How do you explain that? https://www.tbnewswatch.com/local-news/thunder-bays-experiencing-low-population-growth-531010 5-Year (2011-2016) population growth rates: London: 4% Kitchener-Cambridge-Waterloo: 6% Barrie: 5% Toronto: 6% Thunder-Bay: 0% But anyway, that’s beside the point. If you’re incoming migration is quite a bit wealthier than the present population, it will affect housing prices.

There are spill-over effects on nearby towns with populations of between 100,000-300,000 when their neighboring city with over 6.5 million inhabitants see detached prices rise by so much. Just a small migration of people priced out of the GTA or selling out of their homes in the GTA and relocating elsewhere will have outsized impact on smaller towns. They're migrating to London, Windsor and Thunder Bay? I think a lot of retired people are as well as younger people who find the cost of living in Toronto too much to bear.

There are spill-over effects on nearby towns with populations of between 100,000-300,000 when their neighboring city with over 6.5 million inhabitants see detached prices rise by so much. Just a small migration of people priced out of the GTA or selling out of their homes in the GTA and relocating elsewhere will have outsized impact on smaller towns.

The other question is, how do you distinguish real demand, as in families living in houses, from speculative demand, buying to flip? There really is no clear way to distinguish that, but I would argue that speculation in the Toronto market is way less than what many perceive it to be. Home sales activity isn’t all that much above its 10-year average and actually pretty low compared to the demand that we’re seeing. And the number of active listings is at historic lows. If speculation is indeed rampant and driving market mania, you would see substantial transaction volumes and listings – but the data doesn’t bear that out.

You just explained it yourself. It's nice and all that people's homes have increased so much in value, but if they sell they'll still need a place to live in and they'll still need to pay high prices for places in similar locales. And for most, rent isn't a substitute and they don't look at their primary residences as assets that they can flip for profits. The lack of supply in the city area for detached homes is definitely an issue. And that dearth of supply has in turn strongly affected the markets for townhouses and condos. It's the nature of densification.

As mentioned before, "global" cities everywhere are facing rapidly rising real estate prices. I don't think that price inflation is unique to Toronto and Vancouver alone, although recent price increases have been particularly sharp. As the following NYT article indicates, supply has simply not been able to keep up with demand in places like LA, San Fran and even Boston: https://www.nytimes.com/2017/02/10/upshot/popping-the-housing-bubbles-in-the-american-mind.html

I'm not surprised that this happened. New mortgage insurance rules last fall substantially reduced portfolio insurance on low-LTV mortgages. Banks, due to capital constraints, don't have the capacity to hold all of that on their balance sheet so private securitization is creeping back a bit on that excess. I do not expect this to be a huge development as there isn't much investor appetite for these kind of products and there isn't much of these 'excess' mortgages to go around. But this further shows the unintended consequences that follow from government action.

That's entirely fair.

It's not a double standard. Everyone is entitled to their own opinion and freedom of speech allows them to voice it. I do have a problem with deliberately obfuscating facts, such as parroting out the line that $2 billion of mortgages are fraudulent, when in fact that wasn't the case.

I have no problem with shorts talking their book as longs do that as well (although I don't like that practice). I do have a problem with spreading misinformation and deliberately misleading insinuation without any support. Cohodes, like many, is pretty good at publicizing his wins - but what about his losses? And you think he intends to do that just because he says so?