The Daily Alpha: Real Talk on Barack Obama, Donald Trump, Carried Interest and May Day

May 2 2017 | 3:13pm ET

Following May Day, the Daily Alpha returns. Having seized control of the means of production, our editorial team offers insight on Barack Obama’s new-found wealth, former red lines and the New York Times flirtation with the Bolshevik Revolution.

Shot: The 93 words that could unlock $200 billion in bank capital

Chaser: 93 words, most of them wrong 


Quotes of the Day:

“Speak, Obama, speak. Just not for money.”

That’s Jill Abramson at The Guardian.

During the last week, former President Barack Obama discovered an easy way to make a lot of money for doing very little in a very short period. Taking a page out of the Clinton book, Obama has started securing six-figure speeches on Wall Street.

The American Left is up in arms. Senator Elizabeth Warren has said that Obama is sending the wrong message. Others are demanding that he gives the money back and stick to writing books or giving free speeches elsewhere in the nation.

It’s all part of his post-presidential perks. If you want to make a lot of money, you go into banking. If you want to become exceptionally rich – and you can act hypocritical at any time you want so long as you carry the water for the government party – you can get extremely rich.

President Barack Obama secured a $400,000 speaking fee from Cantor Fitzgerald. He was paid the same amount of money in less than an hour to talk to a group of bankers than he earned running the world’s largest economy and military for 12 months.

That payday comes just months after securing what is believed to be a $65 million book deal… and all this seven years after famously saying that, “I do think at a certain point you’ve made enough money.”

Sure, it sounds hypocritical, but it’s nice to see that he is making money. Maybe he’ll discover that the more specialized you are at something, the more money you can earn in a free market economy.

After all, he has a specialized skill. He exposes hot air political rhetoric and lectures at Americans probably better than anyone. It’s his thing. Now he gets paid to do what he loves…

Did people really expect him to turn down money?

“I think what would motivate President Obama to re-engage in the political debate is if we saw the federal government start to cross some clear red lines in terms of long-observed norms and values that frankly I think we have started to take for granted.”

That’s former White House Press Secretary John Earnest discussing Obama’s role in the Trump presidency. During a conversation with MSNBC last week, Earnest said that he would step in if Trump went too far on policy issues…

Which had everyone wondering the same thing: Barack Obama is going to start enforcing red lines?

“You should all thank me for your bank stocks doing better.”

That’s Treasury Secretary Steven Mnuchin speaking to a Beverly Hills audience at the annual Milken Institute conference…

We’ll just let the Washington Post take this one.

"That balloon is going to get popped pretty quick. The president wants to get rid of carried interest."

Reince Priebus said on Sunday that President Trump is eyeing a cut to the “carried interest” loophole. Hedge fund managers to be hardest hit.

“I was beside myself with youthful rage. “Lies!” I screamed at them. “Lies and treachery and murder. And all in the name of socialism! In the name of socialism!”

The New York Times has set the right-wing blogosphere ablaze.

During the last few months, the Grey Lady has printed a series of columns on communism that have grown increasingly more nostalgic for the Revolution of 1917 and others in the 20th century.

The most recent – from this past Sunday – is titled “When Communism Inspired Americans.”

These are the words of an author who looks back on his life and realizes that he was wrong about the message of his religion and the end results. He has a hard time coping with the century of destruction caused by the calamity of this system. Despite the admission, he returns in the final paragraph to seek sympathy for those who embraced communism and suffered professional and social ruin for their decision…

This article appears to recognize the failure, but it’s still way too nostalgic. It’s as close as one will get to an admission of guilt and failure.

Typically, we find ourselves reading arguments that every past transgression of this system was not real “socialism” or real “communism.” They will argue that Fulgencio Batista was a worse tyrant than Fidel Castro and cling to the message of “universal healthcare” in a nation where people can’t even buy toilet paper.

It sounds like a desperate argument, but it’s one that was uttered multiple times during conversation on May Day yesterday in Chicago by people with no understanding of economics or history. However, they still wore the symbols of the system’s past horrors on their apparel.

To which there is only one reply: If you were wearing a T-shirt with Che Guevarra on it yesterday, you should have just stayed home and spent the day coloring.  

Tuesday Morning Reading List

Private Wealth: Hedge Fund Billionaire Griffin to give $15 million to 'Robin Hood'

“Ken Griffin, the billionaire founder of hedge fund firm Citadel LLC, will make a $15 million donation to the Robin Hood Foundation, a New York City poverty-fighting group that named a new chief executive officer this week.”

Reuters: Steven Cohen, SAC must again face Fairfax short-selling lawsuit

“The billionaire Steven A. Cohen must again face a lawsuit accusing him and his former firm SAC Capital Advisors LP of conspiring with other hedge funds to spread false rumors about Fairfax Financial Holdings Ltd FFX.TO to drive down its stock price.” 

Barron’s: When fund honchos invest on the side

“Executives at hedge funds and private-equity firms increasingly are pursuing personal investment projects on the side, sparking concerns among institutional investors, reports The Wall Street Journal.”

Forbes: Some of the world's biggest hedge funds think private equity stocks are cheap

“As institutional investors pile into new mega-sized private equity funds, allowing firms like Apollo, Blackstone, Carlyle and KKR to raise record amounts of cash, much of this gush of money has come at the expense of the hedge fund industry, which saw assets fall in 2016 as a near-record number of funds closed.”

Farmlead: How the farmer is a hedge fund manager but acts like a casino gambler

“Farming is a tough business. I may be a bit biased, but there is no other profession in the world that requires the business owner to wear so many different hats at the same time … all while knowing that there are so many variables outside of your control. The main one: Mother Nature. The weather plays a big role on the growing season.”

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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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