DailyAlts Playbook: The Iowa “Circus”, Coronavirus Warnings, the “Succession” Drama in South Korea, Tepper’s Market Temperament, and a Busy Day for Activists

February 4, 2020 | News, The DailyAlts Playbook


February 4, 2020

Today, the DailyAlts Playbook talks about the Iowa “Circus”, Coronavirus Warnings, the “Succession” Drama in South Korea, Tepper’s Market Temperament, and a Busy Day for Activists.


This morning, we start in Iowa.

For years, political analysts have asked why Iowa should be the first voice in the primary season.

Last night, Iowa proved it shouldn’t play this role ever again.

A mind-bending caucus process led to irregularities all across the state. Vote confirmation stalled.

And while the college kids chanted for Bernie’s name, some of the mid-tier candidates like Amy Klobuchar seized the paralytic moment and confusion to take center stage. These candidates got free airtime to spread their messages to voters across the country while the media looked for any opportunity to fill the dead air. Politico called the event a “technical meltdown.”

That’s being generous.

During last night’s broadcast, television analysts attempted to explain the new voting process (No one has enough patience to do this), confusion among the attendees, the breakdown of the digital voting app, and the mixed messages from the candidates.

Moderate Democrat Pete Buttigieg claimed victory – because why wouldn’t you when no votes have been tallied? A lot of people will now think he won, even though it might take weeks to count the votes – and he’d be moving toward New Hampshire with a claim to victory.

Bernie Sanders attacked Buttigieg amid growing concerns that Democrats are working to prevent Sanders from becoming the nominee.

And Joe Biden – who had an underwhelming turnout amongst voters – questioned the Iowa Democrats’ organization.

The “considerable flaws” his campaign cited gave him enough ammunition to dismiss concerns about viability in the state.

Things got so bad that Iowa Dem party reps began hanging up on campaigns and even hung up on one precinct secretary who was waiting on the phone while talking live to CNN reporters. For added comedy, Iowa representatives will now double-check all of the votes… by hand.

The 2020 Election Season starts exactly the way we expected. And exactly the way we deserve.


MACAU MONEY: This morning, the number of global coronavirus cases topped 20,000 as officials take the latest steps to disrupt its spread. Macau announced that it was shuttering its casinos, a blow to Wynn Resorts (NASDAQ: WYNN) and Las Vegas Sands (NYSE: LVS). Casino companies were already reeling due to this crisis. Meanwhile, more airlines are halting flights into mainland China. The death toll has hit 425, economists have slashed Chinese growth outlooks, Credit Suisse called off its annual Asia investment conference, and we will see sharp delays in earnings reports at the Hong Kong exchange.

MARKET MOMENTUM: Chinese stocks were rebounding this morning after a $720 billion wipeout Monday. In the United States, Dow Futures showed a 300 point gain this morning, while the S&P and NASDAQ pushed higher. Investors largely shrugged off a weaker-than-expected earnings report after the bell Monday from Alphabet Inc. (NASDAQ: GOOGL). While oil prices are ticking higher this morning, OPEC is currently discussing more cuts to support prices. WTI crude prices dipped for a moment below $50 per barrel, a figure that stands to hammer shale producers and weaken the broader sector. Hedge funds, naturally, have been dumping crude contracts.


BITCOIN BLOWOUT: Eurekahedge and HFR data conform that crypto hedge funds beat their traditional siblings in 2019. The average cryptocurrency hedge fund reported a 16.33% return last year, compared to the 10.4% of traditional funds. It is worth noting, however, that extreme variance exists in previous years’ returns. In 2018, the Eurekahedge crypto hedge fund index plunged more than 70%. That downturn came a year after the Index increased by more than 1,708% in 2017.

TO THE MOON: Yesterday, we noted that David Einhorn’s Greenlight Capital fell 7.6% in January. His February might be off to a rough start as well if he held onto that TSLA short position. Shares of TSLA stock rallied more than 20% Monday. The stock topped out at $808 before finishing the day at $780. It was just a few months ago that shares traded at $250 and Musk’s “$420” tweet appeared to be an outrageous goal. More so, check the options chain. It wasn’t long ago that a certain $1,000 Call Option had been priced at $0.05. Today, that same option trades at $2.65. [Editor’s note: TSLA stock rallied another 12% in premarket hours]

REAL ESTATE BOOM: In deal news, Neuberger Berman purchased real estate manager Almanac Realty Investors in a deal that signals the former’s commitment to the real estate business. Almanac has $4 billion in AUM, a figure that is much lower than Neuberger’s $356 billion. However, the deal bolsters Neuberger’s Real Estate Fund, public and private mortgage credit solutions, and real estate private equity secondaries. The deal comes a day after Blackstone Tactical Opportunities announced it has completed a big recapitalization deal for Phoenix Tower International.


“You have to be careful, because it may be a game changer. So you’ve just got to be cautious.”

That’s David Tepper. It was just a few weeks ago that Tepper said that he was bullish on the market. I seem to recall him saying that he loves “riding a horse that’s running.” Now, however, he warns that he is concerned about coronavirus impacting performance. He also said that you can’t be leveraged if you’re a “long person.” It’s unclear how to accept this change of heart before the second cup of coffee.

“Big shocks for weak economies that don’t have cushions to withstand them could lead to unexpected recessions.” 

If Tepper’s coronavirus bearishness didn’t have the caffeine boost you’re looking for, meet Stephen Roach. The former Morgan Stanley Asia chairman said that the potential fallout in China could be much worse than back in 2003 during the SARS outbreak.


GRILLING – Jana Partners announced intentions to nominate directors to the board of Bloomin’ Brands (NASDAQ: BLMN). Jana wants the restaurant to consider strategic options, which include the spinoff or sale of its prized Outback Steakhouse. Jana owns a 7.4% stake in the firm, according to an SEC filing. Proposed nominations would feature Scott Ostfeld, a Jana partner and portfolio manager, and John Paul Gainor, a corporate director.

SWIPING – Starboard Value has taken a 9% stake in Green Dot Corporation (NYSE: GDOT), an issuer of pre-paid debit cards. Shares of GDOT stock rallied more than 5.8% on news of the associated SEC filing.

SUCCESSION – HBO might have created a fascinating show about family power in “Succession,” but the real-life drama is taking place in South Korea. The heiress of the Hanjin Group and daughter of the late Korean Air Lines Chairman Cho Yang-ho has partnered with a local activist fund to improve management at the family firm. Family members aren’t too pleased with the proposal.


DAIRY DRAMA – Last week,  the Securities and Exchange Commission charged Philip E. Riehl with defrauding Amish and Mennonite community members by making false claims about the use of their funds and guaranteed returns. The scheme involved the sale of promissory notes to a failing dairy business. If there ever was a television show about SEC enforcement, this episode would probably get three out of five stars for its obscure plot.


  • Blackstone Group (NYSE: BX) has appointed John Stecher to the role of Chief Technology Officer. The world’s largest PE firm poached Stecher from Barclays, where he served as CTO and group innovation officer.
  • Logical Capital has appointed Michael Green to the role of Chief Strategist & Portfolio Manager at the boutique quantitative hedge fund. Green comes over from Thiel Macro, where he managed macro portfolios at the family office of Peter Thiel. He previously founded Ice Farm Capital, which was seeded by Soros Family Management.
  • Sound Point Capital Management appointed Francis McCullough to the role of Global Head of CLO Capital Markets and Structuring.
  • Nomura Singapore hired Subhajeet Parida from hedge fund Silver Ridge Asset Managemen. He will serve as the firm’s executive director in emerging markets (EM) linear rates trading.
  • Defined Contribution Institutional Investment Association has elected Mary Beth Glotzbach to chairwoman of the executive committee. Glotzbach works at Franklin Templeton Investments as a vice president and senior institutional DC strategist.


  • DailyAlts Playbook: @DailyAlts
  • For tips and suggestions, please contact: Contact@DailyAlts.com
  • Garrett Baldwin is the author of the DailyAlts Playbook.
  • An economist and author based in Naples, Florida, Garrett has an extended history of financial analysis, business journalism, public relations and consulting experience in hedge funds, private equity, alternative investments, housing policy, commodities, and public equity coverage. He holds degrees from Northwestern University, Johns Hopkins University, Purdue University, and Indiana’s Kelley School of Business. He also has a Certificate in Global Business from Harvard Business School.
  • An avid Baltimore Orioles and Buffalo Bills fan, he would prefer to discuss other sports, please.

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