President Trump: The NEW one and only politics thread

Slacker · Jul 12, 2018

Once more, with feeling: "Fuck you, Trey Gowdy."

After Rep. Gowdy says, "I don't appreciate having an FBI with an unprecedented level of animus working on two major investigations during 2016," FBI agent Peter Strzok passionately defends himself and the FBI, drawing applause during a House hearing.

FBI agent Peter Strzok passionately defends himself at fiery House hearing - CNNPolitics

typefitter · Jul 12, 2018

poindexter said: ↑

I'm a day late on this, but if you purchased a $1.2 million home on June 1, 2006, with 10% down (because, America) with a 6.7% mortgage rate (I googled rates for 2006), and just did a standard 30 year amortization, your outstanding balance today would be $871,135.
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Thanks for the non-dickhead answer (@doctorquant, et al). Just coming at it from a different perspective. I've always assumed a seven-figure house had 20 percent put down. (And my five-year fixed mortgage back then was nowhere near that interest rate. I'm just signing a new mortgage at 2.6 percent.)

I sort of understand why the US housing market collapsed, but it seems like, in a nutshell, it's because nobody down there actually owns their house. For his income, even with his wife's, to have that much credit-card and mortgage debt... That is an insane debt load to me. But we also only have five banks, and it's hard to get a mortgage of any kind at the moment. So it's a trade, I guess.

TigerVols · Jul 12, 2018

Slacker said: ↑

Way to go, Fucko!
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Who cares? The Cheese Wheel in Chief already arranged repatriation for the heroes of the Battle of Bowling Green so give it a rest.

Donny in his element · Jul 12, 2018

"I believe that the people in the UK - Scotland, Ireland, as you know I have property in Ireland, I have property all over - I think that those people they like me a lot and they agree with me on immigration."

Slacker · Jul 12, 2018

Donny in his element said: ↑

"I believe that the people in the UK - Scotland, Ireland, as you know I have property in Ireland, I have property all over - I think that those people they like me a lot and they agree with me on immigration."
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"Don't forget Iceland, sir!"

The Big Ragu · Jul 12, 2018

typefitter said: ↑

Thanks for the non-dickhead answer (@doctorquant, et al). Just coming at it from a different perspective. I've always assumed a seven-figure house had 20 percent put down. (And my five-year fixed mortgage back then was nowhere near that interest rate. I'm just signing a new mortgage at 2.6 percent.)

I sort of understand why the US housing market collapsed, but it seems like, in a nutshell, it's because nobody down there actually owns their house. For his income, even with his wife's, to have that much credit-card and mortgage debt... That is an insane debt load to me. But we also only have five banks, and it's hard to get a mortgage of any kind at the moment. So it's a trade, I guess.
Click to expand...

I realize it is a time investment, and thinking about this stuff isn't everyone's cup of tea. But if you are really want a handle on the Canadian housing market, I heard a very good podcast a few weeks ago. These two Canadians who wereon top of it and gave a thorough analysis of things. The Canadian housing market is a ticking time bomb.

Among other things they touch on and explain: 1) Credit expansion in Canada has gone on unchecked over many years now, savings are way down, and among other things (and it is just one unintended consequence) a big housing bubble that formed. They have numbers right now that are worse in many ways than they were in the U.S. during our housing mania. And lending practices have become lax there. 2) There is a very seedy underbelly to what has happened there, and it relates to the government-mandated mortgage-insurance you mentioned in your earlier post. It has created very perverse incentives for lenders, in that those sizeable mortgage insurance provisions are backstopped by the government. That de-risks the lending from the institutions. On top of it there is a patchwork mortgage regulation structure that really doesn't have anyone on top of policing mortgage originations. . . . and the short of it is that one of the guys was explaining that fraud, falsifying loan documents, etc. is prevalent. It's a mirror of one of the things that created the housing mess here. The risk doesn't sit with the lenders originating the loans (here it was Fannie, Freddie and a shadow lending market, for which a similar one has developed in Canada), so they have no incentive to give a shit. At least the banks don't. They are just going to do whatever they have to do to originate more and more loans. And the assumption is that if there is a default, well, the government is backstopping it, so we're not on the hook. Which is what creates risky behavior. That feeds the bubble, obviously, because it creates way more demand than there should be in a balanced market, which drives up the prices.

This wasn't a part of this podcast, but typing what I just did, I was thinking about something I saw Jim Chanos say at a conference recently about fraud. The fraud cycle follows the financial cycle. For the last 8 or 9 years, central banks, have all worked hard to create a fairy tale, in which they have enabled more and more credit and the risk that ha come with it, by manipulating interest rates. The Bank of Canada is a small player compared to the Fed, the ECB and BOJ, but it has certainly done its part. Cheap money has created an epic bull market here, spurred by a lot of things, but to a great degree, corporations loading up their balance sheets with debt and using the money to buy back their own stock. That drives up the stock price, which is fine by the management who puts in those stock buybacks, because they have largely been selling into it, reaping the windfall. In Canada, it created a housing mania, as consumers have leveraged themselves up and bid up prices. The reason they can do it is that during a mania, people get sucked in, and they never see the rotting pieces underneath what is happening while all of the artificiality is pumping up prices. That only start to appear at the end. And when it ends, there is a huge consequence. Don't assume that Canada's housing market has it figured out. And if you do listen to the podcast, when a serious deleveraging happens, and it is inevitable, remember that it didn't come as a surprise to EVERYONE. There were people speaking reasonably, but they get drowned out. Just as, in 2002, 2003, 2004, 2005, 2006, etc. there were people here getting drowned out. If others had listened, particularly the central banks that create these credit and fraud cycles, a lot of financial pain could have been avoided (you lose the phony sugar highs, too).

One other thing. I am not an expert on Canadian housing, although it is such an obvious mania situation that it has been on my radar for at least the lsat couple of years. You said that mortgages are hard to get because it is so tightly regulated and there are like 5 banks. But that isn't the reality. As it has gotten harder to get a bank mortgage, an unregulated shadow lending market has picked up the slack. The Bank of Canada itself has been tracking it, and reporting about it, and the short version is that loans in the uninsured space from those lenders are increasingly going to highly indebted households and for amortizations longer than 25 years. And these are lenders whose activities fall out of the federal regulatory scope. There are a lot of originations coming from credit unions, mortgage-investment corporations that are speculating and money pooled by individual speculators. Honestly, it reeks of what subprime became here.

typefitter · Jul 12, 2018

The Big Ragu said: ↑

I realize it is a time investment, and thinking about this stuff isn't everyone's cup of tea. But if you are really want a handle on the Canadian housing market, I heard a very good podcast a few weeks ago. These two Canadians who wereon top of it and gave a thorough analysis of things. You'll have to trust me, but the Canadian housing market is a ticking time bomb.

Among other things they touch on and explain: 1) Credit expansion in Canada has gone on unchecked over many years now, savings are way down, and among other things (and it is just one unintended consequence) a big housing bubble that formed. They have numbers right now that are way worse than they were in the U.S. during our housing mania. And lending practices have become ridiculously lax there. 2) There is a very seedy underbelly to what has happened there, and it relates to the government-mandated mortgage-insurance you mentioned in your earlier post. It has created very perverse incentives for lenders, in that those sizeable mortgage insurance provisions are backstopped by the government. That de-risks the lending from the institutions. On top of it there is a patchwork mortgage regulation structure that really doesn't have anyone on top of policing mortgage originations. . . . and the short of it is that one of the guys was explaining that fraud, falsifying loan documents, etc. is prevalent. It's a mirror of one of the things that created the housing mess here. The risk doesn't sit with the lenders originating the loans (here it was Fannie, Freddie and a shadow lending market), so they have no incentive to give a shit. They are just going to do whatever they have to do to originate more and more loans. And the assumption is that if there is a default, well, the government is backstopping it, so we're not on the hook. Which is what creates risky behavior. That feeds the bubble, obviously, because it creates way more demand than there should be in a balanced market, which drives up the prices.

This wasn't a part of this podcast, but typing what I just did, I was thinking about something I saw Jim Chanos say at a conference recently about fraud. The fraud cycle follows the financial cycle. For the last 8 or 9 years, central banks, have all worked hard to create a fairy tale, in which they have enabled more and more credit and the risk that ha come with it, by manipulating interest rates. The Bank of Canada is a small player compared to the Fed, the ECB and BOJ, but it has certainly done its part. Cheap money has created an epic bull market here, spurred by a lot of things, but to a great degree, corporations loading up their balance sheets with debt and using the money to buy back their own stock. That drives up the stock price, which is fine by the management who puts in those stock buybacks, because they have largely been selling into it, reaping the windfall. In Canada, it created a housing mania, as consumers have leveraged themselves up and bid up prices. The reason they can do it is that during a mania, people get sucked in, and they never see the rotting pieces underneath what is happening while all of the artificiality is pumping up prices. That only start to appear at the end. And when it ends, there is a huge consequence. Don't assume that Canada's housing market has it figured out. And if you do listen to the podcast, when a serious deleveraging happens, and it is inevitable, remember that it didn't come as a surprise to EVERYONE. There were people speaking reasonably, but they get drowned out. Just as, in 2004, 2005, 2006, etc. there were people here getting drowned out. If others had listened, particularly the central banks that create these credit and fraud cycles, a lot of financial pain could have been avoided (you lose the phony sugar highs, too).

One other thing. I am not an expert on Canadian housing, although it is such an obvious mania situation that it has been on my radar for at least the lsat couple of years. You said that mortgages are hard to get because it is so tightly regulated and there are like 5 banks. But that isn't the reality. As it has gotten harder to get a bank mortgage, an unregulated shadow lending market has picked up the slack. The Bank of Canada itself has been tracking it, and reporting about it, and the short version is that loans in the uninsured space from those shadow lenders are increasingly going to highly indebted households and for amortizations longer than 25 years. And these are lenders whose activities fall out of the federal regulatory scope. There are a lot of originations coming from credit unions, mortgage-investment corporations that are speculating and money pooled by individual speculators. Honestly, it reeks of what subprime became here.
Click to expand...

There are definitely problems here. They're not a secret. Vancouver is insane. Toronto is close to insane. The government has tried to control prices by adding a tax on foreign speculators (a big problem in the cities) and by making mortgages harder to get. There are stress tests now that can be hard to pass.

New regulations came into effect in January that I ran against this month on my own mortgage. (I should preface all of this by saying that I am very debt averse. I carry zero debt right now.) Most of my income goes into a corporation that I set up. It's just me, but it's outside of me. I pay myself out of that corporation, but I don't pay myself very much. Just what I need, because corporate tax rates are lower.

The only thing the big five banks use to determine how big of a mortgage you can get is your personal income for the last two years. The insurance doesn't matter, nor does your credit history or anything else. So, my personal income is not very high, because of the corporation. I was basically turned down for the mortgage I needed unless I got a guarantor—or, my broker explained, I could do one of those shadow lenders you're talking about. And, not to sound like a dick, but I have enough money in my corporation to pay for the house in cash. I am a good bet. The banks didn't care.

Compared to a bank, those lenders charge about $8,000 in upfront fees and twice the interest. You would have to be in a real fucking spot, I think, to use one. But people obviously do use them, and you're right—if they go bad, the housing market is in deep shit. But as far as I understand it, the majority of people still use the banks, because you would never pay those rates unless you had no other choice.

The problem, of course, is the people who have no other choice.

The government will not approve a mortgage that costs more than 44 percent of someone's income. That's a hard line. In Vancouver, the average house costs 84 percent of the average income. Something will break there. It has to. But where I live, or in most of Canada, prices aren't like that. I would say we have bubbles, but they're not national. It's just whether the two (very big) urban bubbles bring the rest of us down.

swingline · Jul 12, 2018

I was told there would be no math.

JC · Jul 12, 2018

typefitter said: ↑

There are definitely problems here. They're not a secret. Vancouver is insane. Toronto is close to insane. The government has tried to control prices by adding a tax on foreign speculators (a big problem in the cities) and by making mortgages harder to get. There are stress tests now that can be hard to pass.

New regulations came into effect in January that I ran against this month on my own mortgage. (I should preface all of this by saying that I am very debt averse. I carry zero debt right now.) Most of my income goes into a corporation that I set up. It's just me, but it's outside of me. I pay myself out of that corporation, but I don't pay myself very much. Just what I need, because corporate tax rates are lower.

The only thing the big five banks use to determine how big of a mortgage you can get is your personal income for the last two years. The insurance doesn't matter, nor does your credit history or anything else. So, my personal income is not very high, because of the corporation. I was basically turned down for the mortgage needed unless I got a guarantor—or, my broker explained, I could do one of those shadow lenders you're talking about. And, not to sound like a dick, but I have enough money in my corporation to pay for the house in cash. I am a good bet. The banks didn't care.

Compared to a bank, those lenders charge about $8,000 in upfront fees and twice the interest. You would have to be in a real fucking spot, I think, to use one. But people obviously do use them, and you're right—if they go bad, the housing market is in deep shit. But as far as I understand it, the majority of people still use the banks, because you would never pay those rates unless you had no other choice.

The problem, of course, is the people who have no choice.

The government will not approve a mortgage that costs more than 44 percent of someone's income. That's a hard line. In Vancouver, the average house costs 84 percent of the average income. Something will break there. It has to. But where I live, or in most of Canada, prices aren't like that. I would say we have bubbles, but they're not national. It's just whether the two (very big) urban bubbles bring the rest of us down.
Click to expand...

There are also other factors in Vancouver such as money laundering, organized crime and offshore money that have driven prices through the roof. There would need to be a huge correction for it to become affordable here. The suburbs aren't affordable out here either. And good luck trying to find affordable rent.

typefitter · Jul 12, 2018

JC said: ↑

There are also other factors in Vancouver such as money laundering and organized crime that have driven prices through the roof. There would need to be a huge correction for it to become affordable here. The suburbs aren't affordable out here either. And good luck trying to find affordable rent.
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No, Vancouver is in a very bad spot. I know someone working on the problem from a regulatory standpoint, and he's admitted that he doesn't really know how to fix it.

Azrael · Jul 12, 2018

"If every generation gets the intellectuals it deserves, we’re in serious trouble."

Laurie Penny takes apart Jordan Peterson. Nothing left at the end but a suede elbow patch and a hank of hair.

Peterson’s Complaint

"The first time I waded through the collected polemics and YouTube punditry of Professor Jordan Peterson — the unthinking man’s televangelist, inflated to the status of serious truth-seeker by respectable newspapers around the world — I was expecting to be at least slightly dazzled by his rhetoric. But no matter how long I stared at the magic-eye picture of jumbled platitudes, masturbatory nightmares about being devoured by an all-consuming mother figure, and occasional sensible tips about making your bed, it failed to resolve into a work of epoch-defining insight. Instead, it reads as if St. John the Divine of Patmos settled down and got a job selling insurance but occasionally had flashbacks to when he used to lick blue fungus off cave walls and babble about the Great Dragon."

justgladtobehere · Jul 12, 2018

Is this "foreign speculator" junk real or just overblown fearmongering?

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President Trump: The NEW one and only politics thread

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