Week InReview
Friday | Aug 30, 2019
Talking rates in the Maine woods with economists over good wine

"Let’s get this out of the way upfront: There is no such entity as the 'Shadow Kansas City Federal Reserve Board.'

"This isn’t a 'The first rule of Fight Club' situation. No one denies that a gathering of money managers, bond traders, and economists has been taking place at Leen’s Lodge in Grand Lake Stream, Maine, for several decades. It’s just that most of the conversations are off the record or governed by the  Chatham House Rule , which doesn’t allow identification of speakers without their permission. Many attendees have an affiliation with the Federal Reserve, as current or former employees, but aren’t authorized to speak on the Fed’s behalf.

"The long weekend in Maine takes place shortly before the  Jackson Hole Economic Symposium , an event dating to 1982, held in Wyoming and hosted by the Kansas City Federal Reserve. Hence, the gathering became known in some circles as the 'Shadow Kansas City Federal Reserve Board' because of the Fed affiliation of many attendees, more than a few of whom head off to Jackson Hole right after the gathering."

in case you missed it...
Areas of the market normally considered unrelated are moving in the same direction more regularly than they have in years, which some investors believe is behind recent volatility. Eleven sectors of the S&P 500 have moved in tandem during 11 trading sessions this month — the biggest display of alignment since January 2016. (The Wall Street Journal | Aug 28)

Six large US banks increased their Federal Reserve-set systemic risk scores in Q2, with two of the banks having to increase their global systematically important bank capital surcharge. (Risk | Aug 28)

The US Treasury yield-curve inversion deepened Tuesday. The yield on the three-month Treasury bill was as much as 52 basis points higher than the 10-year note, a spread last seen in March 2007, according to Refinitiv. (Reuters | Aug 27)

Government-sponsored enterprises Fannie Mae and Freddie Mac are due for an overhaul, with details expected imminently. Andrew Ackerman discusses why the Trump administration deems it necessary, what form it is likely to take, who is likely to benefit and what this will mean for mortgage payers. (The Wall Street Journal | Aug 27)

For the world’s central bankers gathered in Jackson Hole, there was a sense that things would never be the same again. Interest rates are not going back up anytime soon, the role of the dollar is under scrutiny both as a haven asset and as a medium of exchange, and trade uncertainty has become a permanent feature of policymaking. (Financial Times | Aug 25)
the cyber cafe
McAfee Labs: Hundreds of new threats emerge each minute
A McAfee Labs report states that 504 new threats per minute emerged in the first four months of the year and 2.2 billion stolen credentials showed up on the dark web. Internet of things devices, including household appliances, are vulnerable, but spear-phishing is hackers' favorite weapon, accounting for nearly 70% of attacks.
—  TechRepublic

Report: More than 1 in 3 vulnerabilities remain unpatched
Risk Based Security reports that the number of reported vulnerabilities declined to about 11,000 in the first half of the year but that 34% of all vulnerabilities remain unpatched. The biggest offenders, accounting for a combined 24.1%, are Oracle, Microsoft, IBM, Software in the Public Interest, and SUSE.
—  TechRepublic

How China uses LinkedIn to recruit spies abroad
Foreign agents are exploiting social media to try to recruit assets, with LinkedIn as a prime hunting ground, Western counterintelligence officials say. Intelligence agencies in the United States, Britain, Germany and France have issued warnings about foreign agents approaching thousands of users on the site. Chinese spies are the most active, officials say.
binge reading disorder
Transylvania’s growing reputation as the new Tuscany
Ancient Saxon villages and rustic cuisine are luring travelers to the bucolic region in Romania. It was an Italian, the son of a count, who aired the idea. Transylvania, said Giulio da Sacco, was the new Tuscany.

Farmers' Almanac predicts 'polar coaster winter' for 2020
The Farmers’ Almanac on Monday predicted the upcoming 2020 winter will be a “ polar coaster” with low temperatures and snowfall across most of the county. The Almanac also forecasts “above-normal” winter precipitation along the east coast, the Great Plains, the Midwest and the Great Lakes. In the Northeast, the Almanac warns of a “wintry mix” of rain and sleet, as well as a “good amount of snow.” 
—  The Hill

Asset managers say they're drowning in RFPs
Investment firms are fielding an increasing volume of requests for proposals and due diligence questionnaires — forms that are becoming increasingly complicated, according to Cerulli Associates.