Moody's: China Shadow Banking 82pc of GDP

SCMP: China’s shadow bank lending balloons to 58trn yuan, as focus shifts to risks from fintech platforms

Credit Tightening: PBoC Increases Oversight of WMPs

Caixin: China's Central Bank Boosts Oversight of Wealth-Management Products
China's central bank has stepped up risk assessment efforts that will oversee fast-growing, off-the-book wealth-management products, but analysts say the impact will be limited.

Several sources from a sub-branch of the People's Bank of China (PBOC) and commercial banks told Caixin that they had received a notice from the central bank confirming that off-balance-sheet wealth-management products will be incorporated into the Macro Prudential Assessment (MPA) system, a framework adopted by the central bank at the beginning of this year to gauge risks in bank-credit exposure.

The MPA system takes into account several factors, including banks' capital adequacy and leverage ratios; the quality of assets, liquidity and foreign debt risks; and interest-rate pricing. Wealth-management assessment falls under "broad credit loans," a term the MPA adopted to represent loans, bonds, equities and certain other investments.
There's no effect on banks yet, but it paves the way for tougher regulations down the road.


Global Dollar Shortage aka Deflation

Carmen Reinhart at Project Syndicate: The Return of Dollar Shortages
But, because numerous countries employed the same tactics in an environment in which a broad array of capital controls was in place and official exchange rates were pegged to the US dollar, a parallel currency market flourished. The black market’s premium (relative to the official exchange rate) in most European countries (and in Japan) skyrocketed through the early 1950s, reaching levels that we now tend to associate with “unstable” emerging markets.

Today, seven decades later, despite the broad global trend toward more flexibility in exchange-rate policy and freer movement of capital across national borders, a “dollar shortage” has reemerged. Indeed, in many developing countries, the only thriving market for the past two years or so has been the black market for foreign exchange. Parallel currency markets, mostly for dollars, are back.

This time, the source of the dollar shortage is not the need for post-conflict reconstruction (though in some cases that is also a contributing factor). Rather, countries in Africa, the Middle East, Central Asia, and Latin America – most notably Venezuela – have been hit very hard by plunging oil and commodity prices since 2012.

Jeffrey Snider of Alhambra comments in What Progress Looks Like
The world is finally waking up to its dollar problem, though in reality it is much, much more than that; it is a full “dollar” shortage. What will likely be most shocking to those who had subscribed to the Bernanke view is that this “dollar” condition is nearly a decade old, actually explaining why Bernanke should have been dismissed at least by the time Bear Stearns failed. The FOMC in every way demonstrated conclusively its utterly criminal incompetence because money wasn’t what they thought it was – even though that was the one task they were supposed to be totally unchallenged by.

...Central banks, especially the Fed, don’t have a printing press in their “toolkits.” They had been using the myth of the money tree to some effect for decades, Alan Greenspan the most prominent accidental “genius” maybe in world history because of it. When it counted the most, however, meaning since August 2007, a money tree has proven exactly as useful as it sounds. The “rising dollar” is and has been a euphemism for “dollar” shortage but only the latest stage of it, finally proving even to (some of) the previously obstinate orthodox faithful they have no idea what they are doing.

The next step is appreciating that they never did.
Take this view of the U.S. dollar system in deflation since 2007-ish. Then consider the renminbi has been inflating almost non-stop since then. A shortage arises when demand outstrips supply, but there are large dollar reserves in places such as China. China created massive amounts of credit all of which acts a a potential conduit for U.S. dollar flows out of China. The world needs dollars, China has them, the dollars flow, the renminbi depreciates.

Chinese Homebuyers Must Prove Source of Funds

For homes valued at 5 million yuan or more, banks will require homebuyers show where their money came from. This will throw a wrench in down payment loans from various sources. Banks are also strengthening checks of income and cash, creating a blacklist for fraudulent borrowers who put fake information on applications. Violators will be banned from ever borrowing from any bank ever again.

iFeng: 楼市又出大消息!以后买房要说清楚钱从哪来

Nanjing Home Sales Cut in Half

Average daily housing turnover is 205 units in October, down from 440 in September before the implementation of buying restrictions.
Caijing: 南京楼市限购满月 10月日均成交量已腰斩


Silicon Valley Has Peaked

Silicon Valley is no longer concerned chiefly with building the best technology products, a sign that technology is close to a peak and the stock market may be ready to turn.

Bloomberg: Peter Thiel’s Politics Become a Deal-Killer in Silicon Valley
Dismay over the billionaire venture capitalist’s stance on the Republican candidate has been showing up all across the technology landscape -- from a startup founder saying he regrets taking a Trump backer’s money to a prominent diversity group refusing to work with any company associated with Thiel. In one recent case, it also throttled the flow of cash into a fledgling VC fund.
On the other side are technology start-ups specifically designed to replace the overly political censorship of firms such as Twitter (with already launched), Wikipedia (Infogalactic has launched) and eventually Facebook and others. To say nothing of growing overseas competition in places such as China.

Last Round of Swing County Polls Shows Hillary Lead

Final polling from Axiom Strategies. The counties below are those that have predicted the statewide outcome going back several election cycles.
Looking at the latest results compared to statewide polling, utilizing the same methodology, it appears all of the normally predictive counties remain consistent with statewide results with the exception of
Luzerne County, PA. Trump greatly outperforms his statewide performance in this particular county. This is where you can see local issues, such as Luzerne’s struggling economy, break the county from their predictive nature.

All other counties show three points or less difference from the statewide polling.

As of this moment we find a presidential campaign where Hillary Clinton has the clear advantage over Donald Trump, but we do not find a presidential campaign that is out of reach for Trump. The odds are stacked against Trump, as our data and data from most reliable sources shows, but he has slim leads or is within the margin of error in his must-win states. Trump would need to overcome a deficit in Colorado, break through a current tie in Florida and maintain small leads in Nevada, North Carolina and Ohio to have a chance to accumulate 270 electoral votes. Virginia, Wisconsin and Pennsylvania appear to be out of his reach as he is at least three points behind in each of those states in the closing weeks of the campaign. A pathway has been charted, but data also shows that Trump could also be the victim of a clean sweep in these states.
Assuming Trump gets a few breaks that go with the swing polling, this is the dead heat possibility, where a single congressional district in Maine could swing it to Clinton victory or a 269-269 dead heat. It requires he flip Pennsylvania though.
Strictly as a speculation, the odds on a Trump bet look decent for anyone who thinks the polls are not accurately measuring 2016 turnout.

The decision by establishment Republicans to distance themselves from Trump likely lost not only the Senate, but the GOP as well because Trump voters are aiming to boot these members out of Congress by withholding votes.

Worst Asset of the Next Decade: Renminbi?

The headline asks if the yuan will be the worst investment over the next ten years. Answer: yes. Not solely a depreciation story, but rather an inflation story.

Also: bypass China's stock market and invest in India's.
5. the RMB

The next 10 years may be the worst of assets. This is determined by the nature of fiat money, is also China's national conditions. For over 30 years, the average annual purchasing power of RMB decreased by 10%, down 7% annually recent years. Difficult to control in the future decline of 5 percentage points per year or less.
iFeng: 又一轮财富洗牌!人民币或是未来十年最差资产?