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The Morning Brief: Kynikos Founder Jim Chanos Likes Biden for President

Kynikos Associates founder James Chanos says he’ll back Vice President Joe Biden if Biden makes a bid for the White House. “If the vice president is going to run, I would raise money for him and I would give to him personally,” Chanos told Bloomberg, adding that he had no direct knowledge of Biden’s plans. Biden has not formally announced his candidacy, though supporters seem to think he’s getting comfortable with the idea, according to Bloomberg. “I’ve had no indication from him about what he’s going to do. I haven’t spoken to him,” Chanos told the news service.

Chanos, who famously called the Enron bankruptcy back in 2001, has long warned of problems with China’s economy — and the country’s stock market chaos this week appears to be proving him right. But Chanos, who first sounded the alarm five years ago, saw his firm’s assets plunge from $6.5 billion at the start of 2012 to $2.5 billion as of February 2015 as investors grew impatient waiting for his thesis to play out. Still, Chanos told the Wall Street Journal last month that 20 percent of his portfolio is short China and that the position has made money, though he did not say how much at the time.

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In what appears to be an attempt to piss off every person in America, Donald Trump has identified a new group for his ire: hedge fund managers. Speaking on CBS’s Face the Nation, the star of “The Apprentice” and the current front-runner for the GOP presidential nomination said hedge fund managers are “getting away with murder” because they unfairly benefit from the so-called carried interest loophole. This loophole allows fund managers to pay only capital gains taxes — which are lower than ordinary income taxes — on returns from their stock market investments, provided they have held those investments for a minimum of one year. (Trump apparently did not single out private equity managers, who benefit from the loophole far more frequently than hedge fund firms.)

“They’re paying nothing and it’s ridiculous. I want to save the middle class,” Trump said. “The hedge fund guys didn’t build this country. These are guys that shift paper around and they get lucky.” Trump’s tirade was the latest in a string of attacks on targets ranging from undocumented immigrants to Fox News anchor Megyn Kelly.

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Some hedge fund managers are looking at the recent stock market turmoil as a buying opportunity, despite enduring their worst two-day performance in years, according to the Wall Street Journal. Equity hedge funds posted median losses of 1 percent on Thursday and Friday of last week, with the median hedge fund losing 1.7 percent this month, the paper reported, citing a Morgan Stanley report to clients. And event-driven managers fell into negative territory for the year, according to the report. Still, some managers are scooping up healthcare and technology stocks, and even investors in the $35 billion Halliburton-Baker Hughes deal are staying the course, despite the spread widening more than 10 percentage points. “We love it,” ValueAct Capital founder Jeffrey Ubben told the paper in an e-mail, adding that he thinks management will stick with the deal. Ubben has big holdings in both stocks.

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