Week InReview
Friday | Jul 12, 2019
Whatever happened to John McAfee?

On the run from US tax authorities, tech guru John McAfee puffs a cigar aboard his towering white yacht in a Havana harbor and says he can help Cuba evade the US government too by launching a cryptocurrency that defeats a US trade embargo.

“You can’t just create a coin and expect it to fly. You have to base it on the proper blockchain, have it structured such that it meets the specific needs of a country or economic situation,” said McAfee.

“There are probably less than 10 people in the world who know how to do that and I’m certainly one of them.”

With him on the yacht are his wife, four large dogs, two security guards and seven staff for his campaign “in exile” for the Libertarian Party presidential nomination, McAfee said. He previously ran in 2016 and came in a distant third.

McAfee said he did not pay income tax for eight years for ideological reasons and was indicted. The Internal Revenue Service declined comment.

Reuters
in case you missed it...
Federal Reserve Chair Jerome Powell told the Senate Banking Committee that the central bank has room to ease monetary policy as the tie between the inflation and jobless rates has broken down. In prepared testimony for the House Financial Service Committee on Wednesday, Powell said "i t appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook. (Bloomberg Economics | Jul 11)

There’s a powerful force at work in markets that helps explain why stocks seem to do nothing for long periods and then suddenly lurch int o activity. Market players have noticed this force — known by some as a “gamma trap” — and have been devising tools to estimate its size and direction in order to predict how markets will move and to trade around it. (The Wall Street Journal | Jul 9)

Buyers of loans have long lamented a steady erosion in loan covenants. But now those looser standards are extending to the amount of time that investors have to wait for basic financial updates. Some fear that the consequent loss of transparency could deprive investors of early warnings of trouble ahead. (Financial Times | Jul 9)

The link between moves in US stocks and Treasury yields has slipped to its lowest reading in more than a year, according to an analysis by Credit Suisse. With equities rising and bond yields dropping in anticipation of lower rates, the correlation between stocks and rates fell more than 60 percentage points last week to -16 per cent. (Financial Times | Jul 8)

Trap doors. Black holes. Restricted payment baskets. These things sound scary, and they are — to buyers of corporate debt. Issuers have increasingly been able to sell new debt with lower yields and looser "covenants," or promises to lenders meant to restrict corporate borrowers from doing anything to erode the debt's value. (Barron's | Jul 5)
CFTC votes on swaps clearing rules
(Jul 11) — At an open meeting, the Commodity Futures Trading Commission voted unanimously to approve a proposed rule on registration with alternative compliance for non-US derivatives clearing organizations. With a 3 to 2 vote, the commission also approved a supplemental proposal on exemption from derivatives clearing organization registration. The proposed rule on customer margin rules relating to security futures was unanimously approved in seriatim on July 9.  
the cyber cafe
binge reading disorder
Size matters less than skill in asset management's new world
The age of asset gatherers has peaked and the asset management industry is re-entering the age of the boutique, where it began. The scales are tipping: some colossi will survive but the smarter money will flow elsewhere.

I tried eMailing like a CEO and quite frankly, it made my life better
Replying immediately and with two words to all emails is actually heaven.
—  BuzzFeed

Banned Chinese security cameras are almost impossible to remove
A complex web of supply chain logistics and licensing agreements make it almost impossible to know whether a security camera is actually made in China or contains components that would violate US rules.