Squatch’s Open Thread 27/07/2016

It is still hot and muggy! Today was up to 30 C and humidity over 70%.  At physio, I bike for a minimum of 20 minutes which really gets a sweat up with temperatures as high as they have been.  By the time I arrived home, I was ready for a cold shower.  The furbabes have basically abandonned me and are sleeping downstairs for much of the night.  Suppopsedly, temperatures are to go down through this long weekend, but I'll believe it when I feel it.  BTW TC, this Canadian long weekend was called a civic holiday across the country, but now, here in BC it is known as BC Day . . . just incase you are trying to add this to your calendar!

Short Takes

MSN.com — The U.N. weather agency says it suspects a 54-degree Celsius (129.2 Fahrenheit) temperature recorded in Kuwait has set a record for the eastern hemisphere.

YASSER AL-ZAYYAT/AFP/Getty Images A Kuwaiti man takes a shower to cool off

The World Meteorological Organization said Tuesday it is setting up a committee to look into whether the temperature recorded Thursday in Mitrabah, Kuwait, was a new high for the hemisphere and in Asia. WMO's Omar Baddour says it's "likely" to be an eastern hemisphere record.

Now that is beyond hot!  Would the climate change and global warming deniers, who in the US are predominently Republicans, still deny global warming?  Perhaps we should send them to Mitrabah, Kuwait without the benefit of air conditioning and then ask them if their stance has changed after a week of this heat.  I wouldn't be surprised if the cool looking water of this man's shower were actually warm water.

Alternet — Chris Ladd is a Texan in exile. After growing up in Beaumont and working for more than a decade in Houston, he moved to suburban Chicago, where he is a Republican precinct committeeman.

He has a day job that he loves in the software industry. In his free time he has written for David Frum’s blog, the Washington Times Communities, the Houston Chronicle, and the Huffington Post.

Back in Texas he interned at the Legislature, worked on numerous state and local Republican campaigns, and volunteered for a statewide PAC. Chris graduated from Beaumont’s Central High, earned a degree from Southwestern University in Georgetown, Texas (the Harvard of Williamson County) and received his JD from the University of Houston.

He recently posted the following:

Chairman Cuzzone:

We come together in political parties to magnify our influence. An organized representative institution can give weight to our will in ways we could not accomplish on our own. Working with others gives us power, but at the cost of constant, calculated compromise. No two people will agree on everything. There is no moral purity in politics.  …

With three decades invested in the Republican Party, there is a powerful temptation to shrug and soldier on. Despite the bold rhetoric, we all know Trump will lose. Why throw away a great personal investment over one bad nominee? Trump is not merely a poor candidate, but an indictment of our character. Preserving a party is not a morally defensible goal if that party has lost its legitimacy.

Read Chris Ladd's entire letter HERE.  It is very interesting and makes good points that don't show up in the Alternet article.  Not only is it an indictment of Donald Trump, but also of the Republican Party.  How many more Republicans will follow their conscience and step away from what the party has become?

CBC — Some of Canada's banks must stress test their ability to withstand a 50 per cent drop in housing prices in Metro Vancouver area and a 40 per cent drop in the Greater Toronto Area, the country's banking regulator says.

The Office of the Superintendent of Financial Institutions also said Tuesday that the banks must all test for a 30 per cent downturn in valuations for all other areas of the country.

The OSFI said the test doesn't apply to the Big Six banks and HSBC. An OSFI spokesperson said the regulator and the Bank of Canada work together to conduct "regular macro" stress tests on the Big Six banks, which also do their own internal testing.

One of the major differences between the US and Canada is the strength of banking regulation.  IMO, Canada has a more robust regulatory regime.  It isn't perfect by any stretch of the imagination, however it did help avert a big crisis such as the US housing meltdown that occurred a few years ago.  But, housing prices in the two biggest markets, Metro Vancouver and Greater Toronto Area , have exploded over the past few years, such that ordinary people are almost unable to purchase a home. From CKNW.com:

"The benchmark price for a detached home in April in Greater Vancouver and the Fraser Valley hit just over $1.4 million — which is a 30.1% increase over 2015.

The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $844,800, a 25.3% increase compared to April 2015."

Because of this wild market, OSFI has mandated stress tests for all deposit and lending institutions.  Basically, what happens to the viability and stability of these institutions if there is a 30% or 50% market correction?  The stress tests are to help gage the affect of these anticipated corrections.  This whole issue is more than "just about housing prices".

There are also other factors in the mix for the "hot" housing market.  In British Columbia, the provincial government has finally taken action now that it has realised this a hot topic and there is an election next year.  Their 15% property purchase surcharge on foreign buyers is their attempt to address the problem.  However, this misses those who are resident in Canada already but hold very large deposits off shore.  Those people bring the cash in for the purchase, but the buyer is deemed a resident so not subject to the new tax.  Also, there are purchasers who are buying and then reselling before the first sale completes, at greatly inflated prices.  Some of this was being orchestrated by realtors.  Because the real estate boards were self governing, this aspect likewise exploded.  The boards in BC are now regulated by the government hoping to eliminate this activity.  Where it had been fairly easy to get a real estate license, no longer.  The provincial government is late to the party, but OSFI, a federal agency is trying to protect the overall health of the banking sector.

As a matter of disclosure, I was a senior lending manager in Metro Vancouver primarily involved in mortgage financing with several of the big 6 banks and HSBC.  When Canada Mortgage and Housing Corp (CMHC), a federal crown corporation created in 1946, introduced lower down payment criteria years ago, I was aghast because I could see problems.  Now that threshold has been restored.  If you want to see what CMHC does, go to CMHC (I set the link to English — all federal government websites are in French and English).  I hope I have not bored everyone with my commentary but as a 40+ year banker, 65% of it spent in mortgage financing, I become a little passionate.  Likewise, I believe in everybody having a reasonable chance to own their own home, which is why CMHC was originally created.

Politico — The nominee of the Republican Party — the party that takes credit for winning the Cold War — on Wednesday appeared to align himself with Russia over his Democratic opponent, in remarks that suggested to many he was urging Moscow to interfere in a U.S. election.

That break with longstanding bipartisan policy toward dealing with Russia, or any foreign nation, for that matter, succeeded in getting him the lion’s share of the media spotlight as Wednesday evening programming kicked off for rival Hillary Clinton’s Democratic National Convention. But it was a leap few fellow Republicans were ready to make — with some in the party suggesting it smacked of “treason.”

The backlash began immediately after Trump’s extended riff on Russia at a Wednesday morning press conference, in which he called for Russia to “find” and release 30,000 emails deleted from Clinton’s private email server. Trump went on to promise a better relationship with Russian President Vladimir Putin if elected president, saying he’d “look at” easing sanctions and recognizing Russia’s annexation of Ukraine’s Crimean Peninsula—something at odds with current U.S. policy–but most of the focus came back to the emails.  …

“It’s bad enough he doesn’t understand the gravity of what he said, but that he’s giving encouragement to a hostile foreign power is unconscionable,” Nichols said. “I don’t think he’s joking. He doubled down on it. Once off the cuff, it’s a joke. Twice, it’s policy.”

How long are Republicans going to wait to whittle Drumpf down to size?  I hope his "dyed in the wool" supporters pay attention to this issue.  Drumpf has taken things way to far such that it is a national security problem.  Wouldn't it be great if he was charged with treason,  I have read a number of other pieces on this matter and on Drumpf's connections.  One article (I think Daily Kos) mentioned that American banks won't touch Drumpf and that he went to some Russian oligarchs for financing.  True or not?  But the specter of such and his failure to make his taxes public are only fueling the fire which with any luck will turn into a conflagration that will consume the Republican Party and send it into the dustbin of history.

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