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After trading in a tight range for much of the summer, coiled within a $100 range around the mid-$500s, over the past several weeks bitcoin has once again started to push higher, closely tracking the decline in the Chinese Yuan as shown below.

However, the most recent burst in bitcoin activity, which sent it surging by over $20 overnight, has little to do with any moves in the official Chinese currency, which recently rebounded modestly tracking the recent dip in the dollar, and is likely attributable to a long overdue crackdown on China’s Wealth-management products, a key component of China’s “shadow banking” system.

As Bloomberg reported overnight, China’s central bank is finally conducting a trial monitoring of banks’ off-balance-sheet wealth-management products under its macro-prudential assessment system. A question one should ask perhaps is why the $1.9 trillion in asset locked up with WMPs had so far been exempt from regulatory supervision.

Just as notable, going forward the WMPs will be included in calculating broad-based credit, something we discussed last week when we showed just how vastly China is undercounting its broadest credit aggregate, Total Social Financing by ignoring shadow debt. Currently, the products aren’t included in the assessment framework, however it’s not clear when or if the People’s Bank of China will add them, Bloomberg added.

Citigroup estimated that 13 trillion yuan ($1.9 trillion) of the products, which are a key building block in China’s shadow-banking system, could be covered. Other banks’ estimates are even bigger.

No matter the size, the extra scrutiny will certainly cool growth of the unregulated products, as China tries to rein in financial risks that could tank the economy. Adding the products to the central bank’s calculations could help to emphasize requirements for lenders to limit dangers and maintain sufficient capital. A change would mean regulators would be may be better able to “control the pace of broad-based credit supply,” Judy Zhang, a Hong Kong-based analyst at Citigroup, said in a note. WMP issuance and yields may shrink as lenders pass on extra costs to investors, she said.

As Bank of America explained overnight, in late 2015, PBoC officially introduced its MPA framework, which expanded its focus from loans to credit in a broader sense, covering not only loans but also banks’ bond investments, equity rights and other investments, financial assets bought with re-sale agreement, and deposits with non-deposit-taking financial institutions. The MPA can make it more difficult for banks to adjust on-balance sheet assets to circumvent government’s credit control. The latest move adds banks’ off-balance sheet WMPs, i.e. those without a principal guarantee, to the mix. This, in theory, should make it more difficult for banks to move assets off balance sheet.

Chinese households, companies and banks held a record 26.3 trillion yuan of wealth-management products as of June 30 and the China Banking Regulatory Commission has been tightening rules on WMPs since late 2014. Most of the products are non-principal guaranteed, which means they reside off banks’ balance sheets.

The implications for th economy can be significant:

The cornerstone of PBoC’s MPA is capital adequacy, in-line with Basel III. So it’s possible that in the long term, banks may be required to provide capital for at least some of its off-balance sheet assets, including the WMPs. As of Jun, total balance of bank WMPs reached Rmb26.3tr. Without considering future growth, the additional amount under the MPA would be some Rmb15.5tr, after deducting Rmb6.1tr products with guarantees (already on banks’ balance sheet) and Rmb4.7tr of cash and deposits. This represents about 7% of banks’ on-balance sheet assets as of June (Rmb217tr). More important, we should view the latest development in the broad context of policy tightening over shadow banking activities since early this year (related reports linked in the sidebar).

However, the most immediate practical consideration from the increased regulatory supervision of the $1.9 trillion in related product is that these funds, many of which are of highly suspect origins, will seek to shift away from the heightened scrutiny and find alternative venues. Which may explain the latest jump in bitcoin as a modest portion of the funds locked up wealth-management products may have found itself into the digital currency, promptly sending it higher by nearly 5%. Should the crackdown on WMPs persist, it may be just the catalyst to push bitcoin above its recent multi-year highs just why of $800 hit earlier this summer.

via http://ift.tt/2dXDiab Tyler Durden

After trading in a tight range for much of the summer, coiled within a $100 range around the mid-$500s, over the past several weeks bitcoin has once again started to push higher, closely tracking the decline in the Chinese Yuan as shown below.

However, the most recent burst in bitcoin activity, which sent it surging by over $20 overnight, has little to do with any moves in the official Chinese currency, which recently rebounded modestly tracking the recent dip in the dollar, and is likely attributable to a long overdue crackdown on China’s Wealth-management products, a key component of China’s “shadow banking” system.

As Bloomberg reported overnight, China’s central bank is finally conducting a trial monitoring of banks’ off-balance-sheet wealth-management products under its macro-prudential assessment system. A question one should ask perhaps is why the $1.9 trillion in asset locked up with WMPs had so far been exempt from regulatory supervision.

Just as notable, going forward the WMPs will be included in calculating broad-based credit, something we discussed last week when we showed just how vastly China is undercounting its broadest credit aggregate, Total Social Financing by ignoring shadow debt. Currently, the products aren’t included in the assessment framework, however it’s not clear when or if the People’s Bank of China will add them, Bloomberg added.

Citigroup estimated that 13 trillion yuan ($1.9 trillion) of the products, which are a key building block in China’s shadow-banking system, could be covered. Other banks’ estimates are even bigger.

No matter the size, the extra scrutiny will certainly cool growth of the unregulated products, as China tries to rein in financial risks that could tank the economy. Adding the products to the central bank’s calculations could help to emphasize requirements for lenders to limit dangers and maintain sufficient capital. A change would mean regulators would be may be better able to “control the pace of broad-based credit supply,” Judy Zhang, a Hong Kong-based analyst at Citigroup, said in a note. WMP issuance and yields may shrink as lenders pass on extra costs to investors, she said.

As Bank of America explained overnight, in late 2015, PBoC officially introduced its MPA framework, which expanded its focus from loans to credit in a broader sense, covering not only loans but also banks’ bond investments, equity rights and other investments, financial assets bought with re-sale agreement, and deposits with non-deposit-taking financial institutions. The MPA can make it more difficult for banks to adjust on-balance sheet assets to circumvent government’s credit control. The latest move adds banks’ off-balance sheet WMPs, i.e. those without a principal guarantee, to the mix. This, in theory, should make it more difficult for banks to move assets off balance sheet.

Chinese households, companies and banks held a record 26.3 trillion yuan of wealth-management products as of June 30 and the China Banking Regulatory Commission has been tightening rules on WMPs since late 2014. Most of the products are non-principal guaranteed, which means they reside off banks’ balance sheets.

The implications for th economy can be significant:

The cornerstone of PBoC’s MPA is capital adequacy, in-line with Basel III. So it’s possible that in the long term, banks may be required to provide capital for at least some of its off-balance sheet assets, including the WMPs. As of Jun, total balance of bank WMPs reached Rmb26.3tr. Without considering future growth, the additional amount under the MPA would be some Rmb15.5tr, after deducting Rmb6.1tr products with guarantees (already on banks’ balance sheet) and Rmb4.7tr of cash and deposits. This represents about 7% of banks’ on-balance sheet assets as of June (Rmb217tr). More important, we should view the latest development in the broad context of policy tightening over shadow banking activities since early this year (related reports linked in the sidebar).

However, the most immediate practical consideration from the increased regulatory supervision of the $1.9 trillion in related product is that these funds, many of which are of highly suspect origins, will seek to shift away from the heightened scrutiny and find alternative venues. Which may explain the latest jump in bitcoin as a modest portion of the funds locked up wealth-management products may have found itself into the digital currency, promptly sending it higher by nearly 5%. Should the crackdown on WMPs persist, it may be just the catalyst to push bitcoin above its recent multi-year highs just why of $800 hit earlier this summer.

via http://ift.tt/2dXDiab Tyler Durden

Project Veritas has just released Part IV of it’s multi-part series exposing numerous scandals surrounding the DNC and the Clinton campaign, including efforts to incite violence at Trump rallies and, at least what seems to be, illegal coordination between the DNC, Hillary For America and various Super PACs.

Part IV focuses on a $20,000 foreign donation made by an undercover Project Veritas journalist to Americans United for Change (AUFC).  Ironically, shortly after the $20k donation wire was released, the contributor’s “niece” was offered an internship with Creamer’s firm, Democracy Partners.

In the effort to prove the credibility of the undercover donor featured in the videos and to keep the investigation going, Project Veritas Action made the decision to donate twenty thousand dollars to Robert Creamer’s effort. Project Veritas Action had determined that the benefit of this investigation outweighed the cost. And it did.

 

“First thing, like I said, thank you for the proposal.  And I’d like to get the $20,000 across to you.  The second call I’m going to make here is to my money guy and he’s going to get in touch with you and auto wire the funds to you,” said the PVA journalist.

 

Creamer told the PVA journalist to send the money to Americans United for Change. Shortly after the money was released, the “donors” “niece” – another Project Veritas Action journalist – was offered an internship with Creamer.

 

In an effort to see how far Creamer would go with the promise of more money, another Project Veritas journalist posing as the donor’s money liaison requested a meeting with Creamer. During that meeting, Creamer spoke about connections he had with Obama and Clinton.

AUFC President, Brad Woodhouse, subsequently returned the money, after Project Veritas started to release their undercover videos, citing “concerns that it might have been an illegal foreign donation.”

In an unexpected twist, AUFC president Brad Woodhouse, the recipient of the $20,000, heard that Project Veritas Action was releasing undercover videos exposing AUFC’s activities.  He told a journalist that AUFC was going to return the twenty thousand dollars.  He said it was because they were concerned that it might have been an illegal foreign donation. Project Veritas Action was pleased but wondered why that hadn’t been a problem for the month that they had the money.

While the latest video focuses on the “$20,000 illegal foreign contribution” from an undercover Project Veritas journalist, the following comments from Robert Creamer were also rather intriguing in light of recent White House efforts to vehemently deny any connections between he and President Obama.

“Oh Barack Obama’s was the best campaign in the history of American politics, I mean the second one, I mean the first was good too.  I was a consultant to both, the second one, was everything hit on every level and every aspect.

 

He’s a pro.  I’ve known the President since he was a community organizer in Chicago.

 

I was just at and event with him in Chicago actually, on Friday last.  He is just as good as ever.  I do a lot of work with the White House on their issues.  Helping to run issued campaigns that they have been involved in.  I mean, for immigration reform for the…the health care bill…trying to make America more like Britain when it comes to gun violence issues.”

* * *

As a reminder, video 3 directly linking Donna Brazile and Hillary Clinton to efforts to disrupt Trump events.

Video 2 provided the democrat playbook on how to commit “mass voter fraud”:

Video 1 revealed DNC efforts to incite violence at Trump rallies:

via http://ift.tt/2dJk8WI Tyler Durden

Submitted by Charles Hugh-Smith via OfTwoMinds blog,

Much was lost when the Western Roman Empire collapsed, but islands of literacy, learning and security arose despite the constant conflicts and threats of invasion.

Once dissed as The Dark Ages, the Medieval Era is more properly viewed as a successful adaptation to the challenges of the post-Western Roman Empire era. The decline of the Western Roman Empire was the result of a constellation of challenges, including (but not limited to) massive new incursions of powerful Germanic tribes, a widening chasm between the Western and the Eastern Roman Empire (Byzantium), plague, an onerous tax burden on the non-elite classes, weak leadership, the dominance of a self-serving elite (sound familiar?) and last but not least, the expansion of an unproductive rabble in Rome that had to be bribed with increasingly costly Bread and Circuses.

In effect, The Grand Strategy of the Roman Empire ran out of time and money. The Grand Strategy, successful for hundreds of years, relied heavily on persuading "barbarian" tribes to join the Roman system for the commercial and security benefits. This process of integration worked because it was backed by the threat of destruction by military force.

The Empire maintained relatively modest military forces given its vast territory, but its road system and fleet enabled relatively rapid concentration of force to counter an invasion. It also maintained extensive fortifications along active borders.

All of this required substantial tax revenues, manpower and effective leadership, not just for fortifications, the army, roads and the fleet, but to maintain the commercial and political benefits offered to "barbarians" who chose integration in the Empire.

Once the military threats proliferated and the benefits of Imperial membership eroded, the Grand Strategy was unable to maintain the integrity of the Imperial borders.

As tax revenues and the bureaucracy they supported imploded, security declined, reducing trade and communications. This unvirtuous cycle fed on itself: reduced trade led to reduced tax revenues which led to phantom legions that were still listed on the bureaucratic ledgers but which no longer had any troops.

The collapse of the Western Empire was a process, not an event. Key organizational infrastructures that endured through the Medieval era–for example, the Roman Catholic and Orthodox Christian Churches–gained traction in the waning centuries of the Western Empire.

Monasteries offered islands of scholarship and literacy and in many cases offered security via fortifications.

As trade diminished along with secure trade routes, self-reliance became the order of the day outside the borders of the Byzantine and Persian empires.

Though political leadership shifted with the latest invasion from the steppes of Eurasia, the two branches of Christendom slowly converted many invading groups or consolidated existing Christian powers into alliances that bound together diverse groups and proto-states.

These alliances were typically contingent and temporary, as today's ally became tomorrow's enemy, or vice versa. Despite the shifting loyalties of constant invasion and warfare, the Byzantine Empire endured and Charlemagne (and others) in Western Europe established the fractured but still effective Holy Roman Empire.

Much was lost when the Western Roman Empire collapsed, but islands of literacy, learning and security arose despite the constant conflicts and threats of invasion. Venice offers one example of a small city securing trade routes with commercial centers that then funded a regional empire.

The tidiness of the old Empire could not be reinstated. The adaptations were as messy and untidy as the challenges that swept in from the steppes and forests.

So please don't diss the Dark Ages. Yes, the Roman baths, coliseums and political /social order fell into disrepair, but new ways of coping emerged that were as contingent and untidy as the era's multiple challenges.

New modes of production and new social /political orders do not arise fully formed. They are pieced together by trial and error and numerous cycles of adaptation, innovation and failure.

via http://ift.tt/2f86k9k Tyler Durden