Opening Bell: 6.16.17
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The Man Who Ran the Bank Bailout Is the Fed’s Toughest Internal Critic (Businessweek)
Those of his colleagues who favor tightening have too much faith in their models, Kashkari says. “It’s like mean reversion is the religion of the Fed,” he adds. Eight years of missing targets call for a new approach. “How can it be that this group of really smart people who are dedicated public servants keep making the exact same mistake over, and over, and over, and over again?”
Pimco’s New Bond King Is Nothing Like Bill Gross (WSJ)
Dan Ivascyn’s predecessor at Pacific Investment Management Co. was known as the “bond king.” But the firm’s current investment chief would rather be called just about anything else. “There’s a tendency to bestow royal terms on asset managers,” he said at a recent conference. “We’re much more like conductors of orchestras.”
Flush With Cash, Top Quant Funds Stumble (WSJ)
Overall, quant funds, which use sophisticated statistical models often developed by Ph.D.s rather than trade based on human research and intuition to find attractive trades, rose 1.44% this year, through May, according to data-tracker HFR. That compares with a gain of 8.7% for the Standard & Poor’s 500 index and a rise of 5.7% for the Vanguard Balanced Index Fund. “You will see some very, very bad May numbers for a lot of firms,” says Andrew Fishman, president of Schonfeld Strategic Advisors LLC, which invests about $16 billion, including borrowed money, in various quantitative strategies.
Barclays hirings under US scrutiny (FT)
The DoJ asked Barclays for more information on discussions between its top brass and senior JPMorgan executives following a string of high-level departures from the US bank to its British rival. The hiring spree followed the appointment of Mr Staley, himself an alumnus of the Wall Street bank, as Barclays’ chief executive in December 2015.
Jeff Bezos Wants Ideas for Philanthropy, So He Asked Twitter (NYT)
Larry Brilliant, the acting chairman of the Skoll Global Threats Fund, a philanthropy created by Jeff Skoll, one of eBay’s founders, said that crowdsourcing philanthropic ideas had had mixed success in large part because of the challenge of identifying ones that have promise. “The denominator of ideas you will get in, the vast majority of ideas which are not good, not viable, will flood this process,” said Mr. Brilliant, who formerly ran Google’s philanthropic arm.
U.S. moves to seize DiCaprio's Picasso, 'stolen' funds in 1MDB case (Reuters)
U.S. authorities, in civil complaints, have accused Malaysian financier Jho Low of laundering more than $400 million stolen from 1MDB through an account in the United States, where he lavished his associates, including Leonardo DiCaprio, with money to gamble and luxury goods. Authorities said that in 2014, Low used $3.2 million diverted from a 1MDB bond sale to buy a Picasso painting for DiCaprio. "Dear Leonardo DiCaprio, Happy belated Birthday! This gift is for you," a friend of Low's wrote in a note.
Hedge funds keep accidentally naming themselves after gory, swindling, incestuous Greek gods (Qz)
Too often, the quest for gravitas leads to a mythological name that sends an unintended message. Fund managers would benefit greatly if they actually read the works they are mining for highbrow names, lest they unwittingly select one from the classical corpus with unfortunate associations. For example Hermes, the god of commerce, luck, and wealth, seems a fitting eponym for an investment fund, as evidenced by the many that bear his name… until one recalls that Hermes was also the patron of thieves and swindlers.
The Impossible Mathematics of the Real World (Nautilus)
A numerical coincidence is perhaps the most useful near miss in daily life: 27/12 is almost equal to 3/2. This near miss is the reason pianos have 12 keys in an octave and the basis for the equal-temperament system in Western music. It strikes a compromise between the two most important musical intervals: an octave (a frequency ratio of 2:1) and a fifth (a ratio of 3:2). It is numerically impossible to subdivide an octave in a way that ensures all the fifths will be perfect. But you can get very close by dividing the octave into 12 equal half-steps, seven of which give you a frequency ratio of 1.498. That’s good enough for most people.
Teen police volunteers steal LAPD cars, patrol Los Angeles (ABC)
Three teenagers in a program for those who may want to become officers stole three Los Angeles Police Department vehicles and went on patrol around the city before leading authorities on wild pursuits that ended with crashes. The trio — two boys and a girl ages 15, 16 and 17 — "gamed the system" and used a vacationing sergeant's name to sign out stun guns and radios and drive the cars right out of a stationhouse parking lot, Beck said. Police are investigating whether the teens impersonated officers and pulled over drivers.
