Friday, December 29, 2017

China central bank frees up cash for banks ahead of Lunar New Year


SHANGHAI (Reuters) - China’s central bank said it will let some commercial banks temporarily keep fewer required reserves to help them cope with the heavy demand for cash ahead of the Lunar New Year holiday, a step that analysts say does not signal any policy shift.

FILE PHOTO: A woman walks past the headquarters of the People's Bank of China (PBOC), the central bank, in Beijing, June 21, 2013. REUTERS/Jason Lee/File Photo
In recent years, the People’s Bank of China (PBOC) has provided some form of liquidity support for banks to deal with greater demand for cash from households and firms before the big holiday that starts between mid-January and mid-February.
In 2018, the first day of Lunar New Year is Feb. 16.
The mechanism the PBOC announced on Friday is the first that lets some national commercial banks trim the amount of reserves they need to keep with the PBOC.
The move will help “promote smooth money market operations and support financial institutions’ financial services before and after the Spring Festival”, the central bank said.
According to the PBOC statement, some banks will be allowed to lower their reserve requirement ratios (RRR) by up to 200 basis points, for 30 days.
For major banks, the current RRR rate is 17 percent of their deposits.
The PBOC statement did not specify when the arrangement to make more cash available will begin.

BASIC TONE UNCHANGED

Li Qilin, an analyst at Lianxun Securities, said the arrangement would be more effective in smoothing out liquidity volatility, and he expects it to release up to 1.8 trillion yuan ($276.65 billion) of liquidity.
“But the basic tone of monetary policy to fend off risks has not changed,” Li said. “And before any changes made to the monetary policy, the central bank’s determination to keep (liquidity) with a tightening bias and control leverage would be unchanged.”
In early 2017, the central bank unveiled a “Temporary Liquidity Facility”, with a tenor of 28 days, to help some major banks.
Wen Bin, economist at Minsheng Bank in Beijing, said this year’s use of official required reserves “will lower the qualified banks’ funding cost and increase their willingness to finance the market.”
“It will also create positive effect to keep the current liquidity level steady and prevent the market rates from rising too fast.”
Analysts expect the PBOC to keep policy slightly tight next year under the banner of a “prudent and neutral” stance, as part of a broader deleveraging drive to contain risks in the economy, even as that has sent market rates to multiple-year highs.
The volume-weighted average rate of the benchmark seven-day repo CN7DRP=CFXS traded in the interbank market, considered the best indicator of general liquidity in China, was trading on Friday afternoon at 3.0566 percent, around 46 basis points higher than the previous year’s closing average rate of 2.5948 percent. 
Reporting by Winni Zhou and Kevin Yao; Editing by Richard Borsuk

'Heed these words of warning:' Ethereum founder threatens to leave if the crypto community doesn't grow up

'Heed these words of warning:' Ethereum founder threatens to leave if the crypto community doesn't grow up

  • Ethereum's founder is fed up with the immaturity of the cryptocurrency community.
  • He threatened on Twitter on Wednesday that he would leave if folks in the space didn't get their act together.


Vitalik Buterin, the founder of Ethereum, thinks crypto is heading in the wrong direction.
Buterin, 23, on Wednesday lamented the immaturity of communities across the cryptocurrency market. He said folks in the space should understand the difference between enacting positive change for society and just moving a bunch of money around.
Screen Shot 2017 12 28 at 10.03.27 AMTwitter
Buterin said that energy was being squandered on meme-ing about luxury cars and inappropriate jokes, and that if things didn't change he would leave the space altogether.
Screen Shot 2017 12 28 at 10.12.14 AMTwitter
The market for digital coins has exploded this year, with bitcoin and ether — the cryptocurrency powered by the Ethereum blockchain — leading the way.
Ether is up more than 8,500% since the beginning of the year, and Ethereum has paved the way for hundreds of initial coin offerings, a cryptocurrency twist on initial public offerings that helps startups raise capital outside traditional financial services.
Autonomous Next, a fintech-analytics firm, estimates that over $4 billion has been raised via ICOs. In total, the market for digital coins has exploded from under $18 billion at the start of the year to a whopping $560 billion now, according to data from CoinMarketCap.com.
Still, Buterin has questioned whether such gains are grounded in reality. He tweeted this earlier this month, soon after the crypto market surpassed $500 billion for the first time:
Screen Shot 2017 12 28 at 10.51.06 AMTwitter
He continued:
Screen Shot 2017 12 28 at 10.45.14 AMTwitter

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Thursday, December 28, 2017

The 500 wealthiest people in the world made $1 trillion in 2017

The 500 wealthiest people in the world made $1 trillion in 2017

Jeff BezosAmazon Founder and CEO Jeff Bezos Mike Segar/Reuters
  • The 500 wealthiest people in the world got $1 trillion richer in 2017 according to a new Bloomberg report.
  • The Bloomberg Billionaires Index revealed that total fortunes hit more han $5 trillion.
  • 67 new and hidden billionaires were also discovered in 2017.


The 500 wealthiest people on the planet got $1 trillion richer in 2017, according to a new report from Bloomberg.
The staggering 23% increase is more than four times higher than last year, and brought total fortunes to more than $5 trillion.
The Bloomberg Billionaires Index, a daily ranking of the 500 richest people in the world, revealed that billionaires controlled $5.3 trillion by the end of trading on December 26, up from $4.4 trillion on December 27, 2016.
The 440 billionaires on the Index who added to their fortunes in 2017 gained a combined $1.05 trillion.
Amazon founder Jeff Bezos regained the title of richest person in the world in October, knocking Microsoft co-founder Bill Gates to second and adding the most wealth in the world throughout the year with a $34.2 billion gain.
Bezos' net worth topped $100 billion at the end of November and currently sits at $99.6 billion.
Gates, meanwhile, has a net worth of $91.3 billion, having donated much of his fortune to charity this year, including a $4.6 billion donation to the Bill & Melinda Gates Foundation in August. 
He wasn't the only one who dropped on the list due to donating a substantial amount of cash — George Soros revealed in October that his family office had given $18 billion to his Open Society Foundations over the past several years, according to Bloomberg, putting Soros at number 195 on the Index with a net worth of $8 billion.

A big year for tech

The 38 Chinese billionaires on the Index added $177 billion in 2017, a 65% gain that was the biggest of the 49 countries represented, according to Bloomberg. The number of Asian billionaires also surpassed the U.S. for the first time, according to a UBS Group AG and PricewaterhouseCoopers report.  
Still, the U.S. has the largest presence on the Index, with 159 billionaires who added $315 billion, an 18% gain that gives them a collective net worth of $2 trillion.
Meanwhile, the 57 technology billionaires on the Index added $262 billion, a 35% increase that was the most of any sector on the list.
Facebook co-founder Mark Zuckerberg had the fourth largest U.S. dollar increase on the Index, adding $22.6 billion, or 45%.
The Index also discovered 67 hidden billionaires in 2017, including Renaissance Technologies' Henry Laufer, fish billionaires Vitaly Orlov of Russia and Chuck Bundrant of Trident Seafood, New York real estate moguls Ben Ashkenazy and Joel Wiener, and bitcoin investors Tyler and Cameron Winkelvoss.

A billion 'doesn't buy what it used to'

However, 60 of the top 500 did not add to their fortunes, and 58 some even saw them fall, losing a combined $46 billion.
French telecommunications billionaire Patrick Drahi saw his fortune drop 39% to $6.3 billion, while Prince Alwaleed Bin Talal — the richest person in Saudi Arabia — dropped $1.9 billion to $17.8 billion after a crackdown against corruption.
Sixty billionaires also fell from the ranking completely.
According to Bloomberg, as the wealth of the richest people in the world skyrockets, a billion dollars "doesn't buy what it used to," with house prices hitting $300 million, the cost of divorce at $1 billion, and a painting by Leonardo da Vinci selling for $450.3 million at a Christie’s auction in November, the most expensive work ever sold.
"It’s part of the second-most robust and second-longest bull market in history," Mike Ryan, chief investment officer for the Americas at UBS Wealth Management, told Bloomberg. "Of all the guidance we gave people over the course of this year, the most important advice was staying invested."

Bitcoin is losing its dominance over the crypto market

Bitcoin is losing its dominance over the crypto market

A man walks past an electric board showing exchange rates of various cryptocurrencies including Bitcoin (top L) at a cryptocurrencies exchange in Seoul, South Korea December 13, 2017.  REUTERS/Kim Hong-JiAn electric board showing exchange rates of various cryptocurrencies including bitcoin, top left, at a cryptocurrency exchange in Seoul, South Korea. Thomson Reuters
  • Bitcoin had an incredible run in 2017, but in one respect the coin is worse off than it was at the beginning of the year.
  • Its share of the cryptocurrency market has more than halved since January 2017.


2017 was an incredible year for bitcoin.
In addition to appreciating by more than 1,500% since the start of the year, it also now has two futures markets, which have lured numerous traditional Wall Street players into the nascent digital coin space.
Still, in one respect the coin is far worse off now than it was at the start of 2017.
At the beginning of the year bitcoin commanded nearly 90% of the cryptocurrency market, according to data from CoinMarketCap.com. That number fell off a cliff in March, after which it shortly rebounded as bitcoin soared to eye-popping new highs.
That number started to decline again in early December, reaching a low of 42% on Monday.
It's a similar story for Ethereum. For some time it looked as if it could take over bitcoin's No. 1 spot. Its share of the market has fallen from about 32% in June to near 13% on Wednesday.
Take a look at this chart showing the market capitalization of the largest cryptocurrencies:
Screen Shot 2017 12 27 at 4.45.53 PMCoinMarketCap

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