Real Talk on Jerome Powell, Donald Trump, Bitcoin, and Maverick Capital

Oct 30 2017 | 11:29am ET

Today, we discuss the big news from the Mueller investigation, President Trump's expected response (hint: it involves Hillary), and the surge of Bitcoin hedge funds, many of which will eventually lose everyone money.

Quotes of the Day

"Conspiracy against the United States."

That is one of 12 charges filed against former Trump campaign chairman Paul Manafort and his business partner Rick Gates.

This morning, the Special Counsel's Office released a 31-page indictment. Both Gates and Manafort have already surrendered to authorities. 

In addition to a conspiracy against the United States, it's a long list says (CNBC):

  • "One count of conspiracy to defraud the United States
  • One count of conspiracy to launder money
  • Manafort faces four counts of failure to report foreign bank and financial accounts. Gates separately faces three counts of failure to report foreign bank and financial accounts.
  • One count of acting as unregistered foreign agents of the Ukrainian government, the Party of Regions and former Ukrainian president Viktor Yanukovych
  • One count of making false and misleading statement related to the foreign agents registration act
  • One count of making false statements in submissions to the Department of Justice"

"Sorry, but this is years ago, before Paul Manafort was part of the Trump campaign. But why aren't Crooked Hillary & the Dems the focus?????"

That's President Donald Trump on Twitter in response to the indictment. 

[Side note: Grammarly goes crazy every time we put a Trump tweet into our browser. The grammar and punctuation are just... bad.

"Powell, a Republican, has been a governor on the Fed's board since 2012, and he was assigned to lead the bank's Wall Street oversight committee back in April."

CNNMoney reports what we already speculated. Trump is likely to appoint Fed Gov. Jerome Powell to the head of the class at the central bank. 

We're down to three candidates right now:

- Powell;
- Stanford economist John Taylor; and,
- Current Fed Chair Janet Yellen.

Choosing Powell would allow Trump to remove Yellen – a move that would excite his base – but ensure the stability of monetary policy over the next few years.

"More than 90 funds focused on digital assets like bitcoin have launched this year, bringing the total number of such "crypto-funds" to 124, according to financial research firm Autonomous Next."

That is a line from a report in CNBC Monday on the surge of hedge funds tapping into the cryptocurrency speculation game. 

AUM of cryptocurrency hedge funds is hovering around $2.3 billion.

Sure, this will end well. It has nothing to do with the cost of Bitcoin and other cryptocurrencies. The real question is why exactly people are willing to pay 2 and 20 to invest in these assets. Why not just buy and hold Bitcoin?

What confidence should a hedge fund investor have in placing their capital into the hands of people who believe themselves to be experts in an industry that is just about five years old? Seriously, if you're running a Bitcoin hedge fund, reach out to us. Our audience wants to hear the pros of this investment. 

But come prepared to an interview... You'll face very tough questions.

"Previous to this current period, Maverick had only suffered eleven five quarter periods with negative returns in our history, and Maverick has delivered positive returns in the following year every time." 

Maverick Capital has a plan to bolster returns after a year-to-date loss of about 2% in its flagship fund. 

And it involves a dramatic change to its performance fees.

Hedge Fund Reading List

Private Equity Reading List 

In Depth

PAAMCO: Will Inflation Deflate the Asset Bubble?

Jan 30 2018 | 9:49pm ET

As the U.S. shifts from monetary stimulus to fiscal stimulus, market pricing should...


CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Boost Hedge Fund Marketing ROI By Raising Your ROO

Feb 14 2018 | 9:57pm ET

Tasked with delivering returns on client capital, a common dilemma for many alternative...