The Yen-Bitcoin Carry Trade

Japan Legalization a Gamechanger

According to Trace, this was all set in motion just last month when Japan officially recognized bitcoin and other cryptocurrencies as legal payment methods, which set off a flurry of buying in the cryptocurrency space. Trace again:

China’s building a mega city from scratch – it’s going to suck in lots of steel, copper

Xiongan New Area is designed to relieve the pressure on Beijing which is being choked by overcrowding, pollution and traffic congestion. The central government will relocate many state-owned companies and institutions including universities to Xiongan. By linking the new city to Tainjin authorities hope it will become an engine of growth to rival Shenzen (the first Special Economic Zone created in 1980) in the Pearl River delta, as well as Shanghai and the Yangtze River delta megalopolis.


Путин в Пекине: как Россия встраивается в китайский Шелковый путь

ладимир Путин, выступив после хозяина форума, заявил о необходимости создания большого евразийского партнерства, которое свяжет Азию и Европу. Его формирование, пояснил Путин, возможно за счет сложения потенциалов таких интеграционных форматов, как Евразийский экономический союз (ЕАЭС), «Один пояс, один путь», Шанхайская организация сотрудничества (ШОС), Ассоциация государств Юго-Восточной Азии. В ЕАЭС входят Россия, Белоруссия, Армения, Казахстан и Киргизия.

По словам президента, для интеграции стран Евразии необходимо делать движение товаров на евразийском пространстве быстрым и удобным, нужно двигаться в сторону унификации норм технического регулирования как для традиционных промышленных и сельхозтоваров, так и для новой высокотехнологичной продукции, также необходимо снимать инфраструктурные ограничения для интеграции и создавать систему современных связанных транспортных коридоров.

Подробнее на РБК:

JPMorgan Tells Banks to Partner Up as U.S. Deposit Drain Looms

The company’s investment bankers are warning depository clients that they may begin feeling the crunch in December, thanks to a byproduct of how the U.S. Federal Reservepropped up the economy after the financial crisis, according to a copy of a confidential presentation obtained by Bloomberg News and confirmed by a JPMorgan spokesman.

JPMorgan argues that some midsize U.S. banks — those with $50 billion in assets or less — could face a funding problem in coming years as the Fed goes about shrinking its massive balance sheet, according to the 19-page report the New York-based bank has begun sharing with clients.

The Fed’s bond-buying spree from 2009 to 2014, dubbed quantitative easing, inadvertently left the industry flush with deposits. Investors took money they got selling mortgage-backed bonds and Treasury securities to the Fed and parked it in U.S. retail and commercial bank accounts.

This created some $2.5 trillion in excess bank deposits, according to JPMorgan. It estimates that 60 percent, or $1.5 trillion, of that money will trickle out of banks in the next four to five years if the Fed follows through with recent guidance and begins reversing quantitative easing in December.

The Fed is currently holding about $4.5 trillion of securities. The way it will get rid of them is by letting them mature and not buying new ones.

Deposit ‘Destroyed’

JPMorgan’s presentation, titled “Core Deposits Strike Back” illustrates how this process will sap bank deposits using the example of a couple who pays off a mortgage that was bundled with other mortgages and sold to the Fed. Right now, when that couple takes that money out of their bank account for that payment, the Fed uses that cash to buy another mortgage bond, recycling it back into the banking system.

A “deposit is destroyed” if the “Fed does not reinvest,” the presentation states.
JPMorgan estimates that a quantitative easing-related deposit-drain could result in loan growth lagging deposit growth by $200 billion to $300 billion a year.

That could be particularly problematic for banks that rely on deposit products that tend to roll over swiftly, such as brokered accounts bought from third parties, large commercial banking accounts and high-interest savings accounts for wealthy customers.