Real Talk on David Axelrod, Elizabeth Warren, Gary Cohn and Leon Cooperman

Apr 6 2017 | 2:58pm ET

On Thursday, we discuss Gary Cohn's support for Glass-Steagall, Leon Cooperman's defense of active managers, and why one property developer in London is giving champagne on demand to hedge fund analysts.

Hair of the Dog

Luke-warm shot: Hedge fund H2O suffers $160 million loss after Brexit shock
Fresh chaser: Hedge-fund billionaire and Donald Trump backer 'played key role in Brexit campaign'
Shot: David Axelrod (4/6/17): “For folks who worry about deterioration in our politics, nuke option vote in Senate will be troubling escalation.”
Chaser: David Axelrod (7/15/13): “GOP invites filibuster change through strategy of electoral nullification – slowing or stopping executive appointments to hamstring agenda.”

Quotes of the Day

“Someone hand Elizabeth Warren a paper bag.”

Bess Levin departed DealBreaker in November for Vanity Fair’s business site The Hive, and she’s been off to a remarkable start.

In the subhead to her Thursday column, she points out the expected mix of confusion and joy that must be felt by firebrand liberal Elizabeth Warren over news out of Gary Cohn’s office.

President Trump’s top economic advisor Cohn told several senators yesterday that he would like to reinstate some form of the Glass-Steagall Act and separate investment banking from lending.

Warren must be trying to figure out the catch. After all, she has accused Cohn’s former shop Goldman Sachs and the White House of collusion. Such a change in policy would be a massive challenge for Goldman.

And Warren, now aligned with Cohn, must think she is suffering from Stockholm Syndrome while she feeds ducks along the Potomac and takes a pull from a flask hidden inside her coat lining.

“Warren Buffett, Mario Gabelli, Stan Druckenmiller and Ken Langone — and a little bit Lee Cooperman — didn't get to their net worth by buying an index.”

Two days after USA Today praised passive investing, Leon Cooperman went on the offensive.

With passive funds attracting capital away from managers, Cooperman rightly points out that some of the world’s wealthiest investors didn’t do so speculating on the SPY.

"Money goes where money is treated best. The one truism is that you cannot charge a premium fee and deliver subpar performance," Cooperman said.

Cooperman says that a bear market or "two-way market" may be the medicine to help the industry get its glow back. His statement came not long after Cooperman requested that a federal judge allow him to appeal a ruling that – if it is overturned – could end the SECs insider trading case against him. For more on that story, go here.

“I want to be clear that performance we saw during the fourth quarter and full year of 2016 is not acceptable.”

This story is a few weeks old, but it slipped under the radar. There was a time that Vadim Perelman was on top of the world. The 34-year-old hedge fund manager was managing hundreds of millions of dollars, joining corporate boards, and talking shop with the titles.

Then, he decided to take all of his money and let it ride on one company.

Walter Investment Management.

So… err… how did that work out? The stock fell nearly 60% through February… and it’s fallen even further.

Cue the music as USA Today jumps on this story and offers another volley of talking points about how passive management and ETFs are better than human stock pickers.

“I’m sure he’d be good. Jeets pretty much seems to be good at everything he tries to do. … He’s always talked about it. I asked him if he wanted to coach. He was like, ‘Never.'”

That’s Miami Marlins manager Don Mattingly talking about a major story in the baseball world.

Yesterday, Fox Business Network’s Charles Gasparino took a few minutes away from hurling Twitter insults and doing pull-ups to break a business story that will rock the sports world. (We’ll leave Gasparino’s daily Twitter battles to your own viewing… it’s very entertaining.)

Former Yankee captain and future Hall of Fame shortstop Derek Jeter leading an investment group that wants to purchase the Miami Marlins from the worst owner in the sport -- Jeffrey Loria. 

Other investment groups include one led by former Florida Governor Jeb Bush.

“The planned “at desk” champagne buttons will allow the hedge fund workers expected to be its occupants to order a celebratory drink after a “good day at the office.”

Finally, just in case hedge fund managers are looking for another reason for the middle class to hate them...enter the developers of the new 40 Beak Street development in Soho, London. 

The new desks of hedge fund tenants will feature buttons that allow them to receive on-demand champagne, because apparently, every day is Mimosa Day. The idea was inspired by a nearby restaurant called Bob Bob Ricard.

The article makes a lot of points about an office building that doesn’t exist that has been inspired by a restaurant that exists nearby… and features a lot of pictures of people who have gone to that restaurant… for the purposes of what exactly?

One would assume envy.

But seriously: Champagne? There’s no button for Arraku or a good neat rye?

Second, it might not be so much that hedge fund analysts can get on-demand champagne that rubs us the wrong way… but that they will have “spa-style washrooms modelled on the bathrooms at the Kardashians’ favorite Manhattan hotel…”

People already wash their hands when they think of the Kardashians.

Now there will be a room in London dedicated to it.

We spent a good deal of time trying to determine if this was an April Fool’s joke… but then again, even if it were, someone would likely adopt this in the near future anyway.

Hedge Fund Winners

Dalio's Pure Alpha II Hedge Fund Gains 2.3% in First Quarter

A day after Ray Dalio was compared to a Buddha in an odd and rambling Forbes column, the hedge fund manager’s shop announced it saw an uptick of 2.3% in the first quarter. The hedge fund manages about $160 billion in assests.

Hedge Fund Losers

Brevan Howard Hedge Fund Fell in March to Wipe Out 2017 Gains

Brevan Howard Asset Management’s flagship hedge fund lost 2.85 percent in March. That knocked out roughly all of its gains since January, the firm confirmed in an investor letter.

Check Out Modern Trader

This week Modern Trader--the essential journal for professional traders & active investors, was named the Best Business-to-Business magazine by the Niche Media Awards committee.

Grab the Newsletter

Signup here for the daily FINalternatives Newsletter which includes the Daily Alpha.

Follow @FINalternatives

Be sure to check out the award-winning Modern Trader and a very special offer for first-time readers and follow @moderntradermag 

Garrett Baldwin is the voice of the The Daily Alpha, the features editor for Modern Trader magazine, and the author of The Man with The Big Red Balloon.

In Depth

Q&A: Sancus Capital And The Disruption Of The CLO Market

Oct 5 2017 | 6:28pm ET

Traditional collateralized loan obligation (CLO) funds in the U.S. market can offer...


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

Finding Success as Alternatives Converge

Oct 9 2017 | 4:00pm ET

Rising interest among institutional investors over the past several years has led...


From the current issue of