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Our briefing for Monday April 6, 2020:
Apr 6, 2020 4:01:18 PM
- United Kingdom Prime Minister Boris Johnson was moved to the intensive care unit of St. Thomas’ Hospital in London after his condition worsened Monday afternoon from complications due to the coronavirus. A spokesperson for the government noted Johnson remains conscious and was moved to the intensive care unit in case he requires ventilation to aid his recovery. Johnson was admitted to the hospital over the weekend as symptoms of a high fever and cough persisted since testing positive for the coronavirus on Friday March 27th. Dominic Raab, the country’s foreign secretary chaired cabinet meetings in Johnson’s absence on Monday and will deputize for the Prime Minister “when necessary”.
- In the United States, coronavirus cases are closing in on 350,000 while the number of deaths are now over 10,000, according to Johns Hopkins University. The U.S. surgeon general says this week might mirror the levels of tragedy Americans felt during the September 11th attacks and the bombing of Pearl Harbor saying during an appearance on CNN, “this is going to be the hardest and the saddest week of most Americans' lives, quite frankly."
- In Canada, the government started to roll out its new emergency benefit program starting in stages, based on the month people were born, starting from January to March. The number of coronavirus cases in Canada sits close to 16,500 and 339 deaths. In Ontario, Premier Doug Ford noted around three million masks were ordered from the United States, but were being held at the border by American officials with 500,000 being released on Monday. Premier Ford said the province has just one week’s worth of protective equipment left for its front-line health care workers.
- Europe seems to be turning a corner in the number of new cases reported. Italy’s total number of active diagnosed cases only rose by 2.1% in the last 24 hours and a daily decrease in intensive care bed usage lowered on Saturday; a first for the country since the outbreak began. Germany also saw a drop in cases for the fourth straight day, however Chancellor Angela Merkel is not talking about a date yet to ease social distancing restrictions, noting health of its citizens will always be the number one consideration.
- In the Philippines, President Rodrigo Duterte is considering extending the lockdown of the country’s main island until April 30th to help bend the curve of the coronavirus outbreak.
- Japan’s Prime Minister Shinzo Abe is set to declare a state of emergency for Tokyo and six other prefectures as early as Tuesday but insists there will be no hard lockdowns. The coronavirus is rapidly expanding in densely populated areas, including Tokyo and the state of emergency measures once enforced will be in place for a month.
Covid-19 – Due Diligence And Asset Management
JPMorgan CEO Dimon Calls ‘Bad Recession’, Mulls Suspending 2020 Dividend
Brief: JPMorgan Chase & Co’s top boss, Jamie Dimon (JPM.N), on Monday said he sees a “bad recession” in 2020, and that the largest U.S. bank could suspend its dividend if the coronavirus crisis deepens. Dimon, widely regarded as the face of the U.S. banking sector, is the most prominent voice on Wall Street so far to project that the economic cost of the coronavirus will not evaporate quickly, and said the bank’s earnings will be down “meaningfully in 2020.” But, Dimon said, even in the worst case scenario, the bank is strong and will continue lending to customers and will not need any relief from the federal government.
Barrack Give Up on Rescue, Says ‘We’re Fighting Politics’
Brief: After pushing for weeks for government intervention to help asset-backed securities markets, Tom Barrack isn’t optimistic about his chances. “We’re fighting politics,” the founder and chairman of Colony Capital Inc. said in a phone interview from his Santa Barbara, California, home, where he’s riding out the Covid-19 pandemic with his family. “In an election year, nobody wants to be viewed as bailing out over-leveraged industries -- even if that’s not what is happening.” Barrack, 72, is no stranger to politics: His first job after graduation was at the law firm of Herb Kalmbach, President Richard Nixon’s personal attorney, and he later served as a deputy undersecretary in the Reagan administration before starting his business career. He has been close to President Donald Trump and remains friends with Steven Mnuchin, who he called one of the best treasury secretaries ever.
Four Citadel Portfolio Managers Leave After Market Dives
Brief: Four equity portfolio managers were fired from Ken Griffin’s Citadel hedge fund last week, after one of the most volatile months for stocks on record. The four managers are Chris Connor, who ran a technology portfolio; Tio Charbaghi and Steve Bergman, who both ran baskets of industrial stocks; and Chip Fortson, who ran a book of financial stocks, according to people familiar with the firm. The managers all worked in the firm’s Global Equities group, which got a new head at the beginning of March, when Justin Lubell took on the role. He previously worked for Steve Cohen’s Point72 Asset Management. A spokeswoman for Citadel confirmed the firings, and declined to comment further. Connor declined to comment, and the others couldn’t be reached for comment.
Seeking Coronavirus Relief, Investment Firm With Ties to Kushner Emails Kushner, Trump Admin
Brief: The co-founder of a huge private equity firm sent an email this week to Jared Kushner and other Trump administration policymakers seeking to relax rules on coronavirus relief money in a way that would benefit the company, according to sources familiar with the matter. Kushner's family real estate business has financial ties to the company, Apollo Global Management. A source close to Kushner says there was nothing remarkable about his receipt of the email, from Apollo co-founder Mark Rowan. Kushner gets hundreds of proposals from all sorts of people, the source said. But Apollo is not just any business: It made a $184 million loan in 2017 to Kushner Companies, the real estate company in which Jared Kushner, President Donald Trump's son-in-law and senior adviser, retains an interest.
Hedge Fund Alden Global Forces Layoffs of ‘Essential Workers’ Mid-Pandemic
Brief: The hedge fund that’s vacuumed up almost 100 local newspapers hit its Southern California papers with another round of layoffs Thursday, cutting jobs that the state deems “essential” in fighting the pandemic. The Orange County Register, Riverside’s Press-Enterprise, Pasadena Star-News, and Long Beach Press-Telegram belong to the 11-paper umbrella group — called the Southern California News Group (SCNG) — that laid off numerous staffers from both the editorial and advertising sides, according to a source with knowledge of the situation. Controversial hedge fund Alden Global Capital owns the papers and forced the cuts, the source told Institutional Investor. SCNG leaders called an all-hands meeting Thursday evening after breaking the news to each laid-off employee individually. Leaders did not tell the remaining staff precisely how many people got cut.
PointState Hedge Fund Has $2 Billion Estimated Withdrawals
Brief: Zach Schreiber’sPointState Capitalhas suffered an estimated$2.1 billionof redemptions so far this year amid lackluster performance and as the coronavirus pandemic tears through markets. The hedge fund also forecast nearly$640 millionof withdrawals in the coming months, said a person familiar with the matter, who asked not to be identified because the details are private. It managed assets of around$5 billionat the end of last year, the person said. The outflows are estimates as of late March and could change. A spokesperson for New York-based PointState declined to comment.
