Real Talk at the 2017 Salt Conference

May 17 2017 | 12:21pm ET

Today, we discuss Ben Bernanke, the Salt Conference and the future of hedge funds.

Hair of the Dog

Shot: US intel sources warn Israel against sharing secrets with Trump administration

Chaser: Israel was source of secret intelligence that Trump gave to Russians, officials say

Quotes of the Day

“What do you think about the future of this industry in five or six years?”

That’s a 32-year-old hedge fund manager asking a question to our team out at the annual SALT Conference in Las Vegas.

Fittingly, it’s a question that many industry participants will aim to answer during the next three days in Las Vegas. Simply put, it’s up to the industry to define itself.

The financial media, meanwhile, needs to avoid chasing needless headlines in Las Vegas.

Be sure to check back to FinAlternatives all this week and follow the event agenda, here.

“We have to fix this problem…”

That’s Anthony Scaramucci, founder of the annual SALT Conference. Scaramucci kicked off the ninth SALT conference (over eight years) with his annual opening.

Scaramucci discussed SkyBridge’s deal with Fortune 80 global company H&A Capital that occurred in January. He praised the Chinese firm as a world-class organization and said that the company he founded remains in good hands.

Scaramucci also reaffirmed his desire to serve the country and his goal of helping resolve the lower- and middle-class income crisis.

In a reflective speech, Scaramucci discussed his personal travel across the United States and how he saw the economic desperation affecting the United States.

Scaramucci advised the audience, regardless of political leanings, to take falling incomes seriously. He said that the wealthy in America don’t want to live behind walls and gates like they do in Latin America.

“The risk of a taper tantrum is low."

That’s Dr. Ben Bernanke, the former Federal Reserve Chair, speaking at the 2017 SALT Conference. In his morning session, Bernanke explained the differences between market expectations in 2013 and 2017. He argues that the Fed has done a fine job of divorcing the decisions on purchasing assets from its rate policy.

Bernanke said that the U.S. economy is still doing well – in the ninth year of the recovery. He said that growth has not been sensational because productivity hasn’t been where the central bankers want it. He said that he expects the U.S. to continue its moderate growth in the future barring a surprise shock. The nation is just two to three years away from reaching its longest period of economic expansion in its history.

The former Fed chair also discussed the impact of politics on the U.S. economy. Prior to the election, Bernanke expressed his concerns about the Trump administration’s lack of political experience and combativeness to free trade.

Bernanke said he has heard comparisons of Trump to Jimmy Carter. While he acknowledged that view might not be popular, he explained how being an outsider can create market uncertainty.

"[The] McGuire 'plan' to create value for Borders was unsuccessful, and Borders was eventually liquidated in a bankruptcy process."

Is that the sound of crashing glass? Of men gnashing their teeth? Of such unspeakable horrors that if they were described properly, you would flee from this room?

Or is the sound of a company snapping back at an activist investor?

Buffalo Wild Wings roasted activist hedge fund Marcato after the latter called for board changes at the director level. Last month, Marcato urged shareholders to get behind a number of initiatives and changes in leadership.

Buffalo Wild Wings responded by attacking Marcato founder Mick McGuire and his experiences with NCR and Border’s.

“After seeing these disclosures, investors seemed to decide, if they’re doing it, why shouldn’t we?

Quartz is doing a nice job in the journalism space.

Writer Eshe Nelson pulls the numbers and explains how money manangers are running together again – this time piling into Snap Inc. stock.

Last week, 13D revealed that Coatue Management, Soros Fund Management, Goldman Sachs, Jana Partners, Third Point, and BlackRock all loaded up on Snap stock.

Good luck… make a wish… snap your heels together.

As we’ve said before – and we’ll say again – there are too many problems with Snap.

This was all explained at length during our Modern Trader feature on Snapchat before the IPO. 

At best, there is no reason to own Snap stock until after the IPO lockup period. 

At worst, this is a company that is completely unprofitable and should be patient zero for the reason why dual-class voting structures are a bad idea.

Wednesday’s Reading List

Business Insider: Hedge funds that bet on Silicon Valley are crushing it

Forbes: This Central Bank Owns $80 Billion Worth Of U.S. Stocks

Finalternatives: Hedge Fund Industry Inflows Hit $20B In Q1/17

Business Day: Hedge-fund billionaire Paulson sticks to gold

DealBreaker: Local Retiree Making More Money Than Hedge Fund Managers Who Work For A Living

Grab the Newsletter

The Daily Alpha is published on Finalternatives.

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. 

You can also pick up a copy of the June Hedge Fund issue at Barnes & Noble.

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. 


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