DailyAlts Playbook: March 24 – The Leaders We Deserve, Why Twitter Debates are Worse than Orioles Games, SALT’s Cancelation, and Coronavirus Updates 



March 24, 2020

Today, the DailyAlts Playbook talks about the Leaders We Deserve, Why Twitter Debates are Worse than Orioles Games, SALT’s Cancelation, and Coronavirus Updates


Good morning:

We start in Washington where politicians prove incapable of solving problems even as the country sinks into greater economic turmoil. The House of Representatives has introduced its own stimulus plan this morning worth $2.5 trillion. The news comes after the Senate failed to reach a procedural vote to move its bailout package forward.

You can read all of the details of what is happening here.

I would try to put all of this into some rendition of English, but I don’t want to give myself a headache.

It is times like this that I fall back on the classic lesson of American civics: “We get the leadership that we deserve.

If this crisis doesn’t necessitate the purging of Congress, the introduction of term limits, the need for serious, professional experts in positions of power who don’t rely on partisan aides to tell them what to do, to eliminate the incentives to grandstand, and to ban riders and unrelated issues to the bill, then nothing does.

I am not happy with handing the airline industry a blank check, but what exactly does a federal $15 per hour minimum wage have to do with this bailout? We can’t agree to that until we — [hard stop].

You know what, don’t answer that.

I’ve thought too much with the sun still rising. We’re moving on.


SPREAD: Global coronavirus cases surpassed 382,000, according to Johns Hopkins University. The ongoing surge in cases has fueled an “unprecedented” collapse in economic activity in Europe during March. The contraction in economic activity surpassed the lowest levels since February 2009. Meanwhile, growth numbers from around the globe continue to suggest significant contraction. China could see its economy shrink by as much as 10% during the first quarter, according to the China Beige Book.

DEAL PROGRESS: Senate Minority Leader Chuck Schumer (D-New York) met with U.S. Treasury Secretary Steven Mnuchin on Monday night to attempt to press forward a deal that would provide $500 billion to distressed American companies. Democrats have referred to the bailout package as a “corporate slush fund” and raised concerns about the lack of provisions on the use of the money. Some have speculated that both sides are waiting for Thursday’s unemployment insurance report before finalizing a deal.

CASH INFUSION: Many investors were stunned Monday morning when the Federal Reserve announced it would provide as much liquidity as possible to help support the U.S. economy. The central bank said it will offer “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” This means that QE4 is alive and well. The Fed even announced that it will begin purchasing ETFs as a method of supporting the U.S. economy.


SALT IS CANCELED: First the NCAA tournament, then Major League Baseball. And now the SALT Conference. My spring schedule is completely clear. Anthony Scaramucci has canceled SkyBridge’s annual fund conference in Las Vegas due to COVID-19 concerns. “The wellbeing of the SALT community is our first priority, and after consulting with numerous experts, we determined cancellation is the best course of action,” a press release reads.

DOWN MARKET: Reports are starting to pour out about the underperformance of various funds during this “Black Swan” event. Third Point is having a tough start to 2020 and shed 8% during the first two weeks of March. Dan Loeb’s fund is now off 13% YTD, according to FT. Meanwhile, Lansdowne Partners took a big hit, shedding 42% since the start of the year. Renaissance’s equity fund is also off 24% due to this sharp downturn.

FAUCETS ON: The Federal Reserve’s aggressive stimulus efforts will face competition from its peers around the globe. Yesterday, Germany – which might have not have much of a banking system by the time this is over – announced that it would launch an $808 billion package to address the economic fallout from coronavirus. Where does Berlin want to get that money? From the debt market. Who is buying? Your guess is as good as mine. I imagine they’ll force some of their institutions to do so.

REALITY CHECK: Finally, we close out this section with some reality check. A survey by supervisor De Nederlandsche Bank (DNB) measured expectations on just how long this COVID-19 fallout will last for the Dutch financial sector. The answer: As much as four years. The data is initially based on models from a 2006 analysis of what a pandemic like SARS or Bird Flu would do to an economy. It’s just a matter of time before we have to start having that conversation here. But I guess it would take Congress two months to decide what color paper on which to conduct the survey.


“Extreme measures to flatten the virus ‘curve’ is sensible-for a time-to stretch out the strain on health infrastructure. But crushing the economy, jobs and morale is also a health issue-and beyond. Within a very few weeks let those with a lower risk to the disease return to work.”

That’s Lloyd Blankfein on Twitter (a sentence that I never knew would come from these hands.) The former Goldman CEO has raised concerns that public health efforts could create significant problems for the broader economy.

“The virus can’t survive without a host. With a coordinated national shutdown for all but essential services, manufacturing, retail, etc for 30 days, the virus is largely obliterated. When the economy reopens, we test widely so that we can quarantine outbreaks when they reappear.”

That’s Bill Ackman on Twitter (a sentence I’ve been writing a lot recently). Ackman responded to Blankfein’s statement by arguing we should simply lock America down for a month.

I have to say, having to watch two billionaires spar on Twitter over public health is worse than being a Baltimore Orioles fan. When the Orioles are 48-100, remind me that watching a AAA team lose to the Yankees by 12 beats reading any Twitter debate.


Maybe it’s contrarian. Maybe the downturn is the best time. That said, a hand full of new funds are ready for launch



DailyAlts Playbook: @DailyAlts

For tips and suggestions, please contact: Info@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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