While many are questioning whether the Federal Reserve will push its plan for an interest rate hike even further down the road after recent market turmoil, Raymond Dalio of Bridgewater Associates thinks the pendulum will swing in the opposite direction. In a post on LinkedIn, as first reported by the Wall Street Journal, the Bridgewater founder argues that the U.S. economy is heading for deflation and that the Fed will soon have no choice but to double down on quantitative easing. “[T]he ability of central banks to ease is limited, at a time when the risks are more on the downside than the upside and most people have a dangerous long bias,” he writes.
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Thomas Sandell of Sandell Asset Management has fired another salvo in his activist battle with furniture maker Ethan Allen. The New York-based hedge fund manager called the company “irresponsible” for delaying talks with him until after Labor Day and said the move is “possibly reflective of a strategy to play for time.”
Sandell noted that he had sent an earlier letter to Ethan Allen president, CEO and chairman Farooq Kathwari expressing his concern over the company’s decision to move its annual shareholders meeting up from November 25 to October 15. In yesterday’s letter, Sandell said he was initially pleased that the company decided to move the meeting back to its regular time after hearing these concerns but was then taken aback when he received an e-mail from Ethan Allen CEO Corey Whitely saying the company would not talk with him until after Labor Day.
Sandell, who initially revealed his Ethan Allen stake at the CNBC/Institutional Investor Delivering Alpha conference, also said his firm is prepared to nominate a slate of director candidates for election at the meeting and that while the firm prefers to resolve things cordially, “We do not view waiting until the second week in September as timely by any stretch of the imagination. Should the company, like us, prefer to resolve this matter without the distraction and expense of a proxy fight, we ask it to enter into discussions with us immediately.”
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New York-based alternative investments firm Angelo, Gordon & Co. has hired Joshua Baumgarten as senior managing director and head of credit. Baumgarten, who will join the firm in 2016, previously worked at the Blackstone Group, which he joined in 2007. He oversaw credit for the firm’s Blackstone Alternative Asset Management unit. Before that, he spent seven years at BlackRock as a trader and portfolio manager. At Angelo, Gordon, he will oversee the firm’s credit strategies, reporting to firm co-founder and CIO Michael Gordon. Angelo, Gordon manages approximately $27 billion.
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This week has been rough for many hedge funds, but London-based hedge fund 36 South reportedly had its “best performance in a couple of years” thanks to the recent turmoil. Co-founder Jerry Haworth told Business Insider that his firm’s use of “predetermined profit stops” on its positions to take advantage of other investors’ failure to hedge put 36 South in the right place at the right time when the markets crashed. Haworth says he sees more opportunities for this strategy to pay off in the near future: “We personally believe this crisis has been building since 1987,” he says. “It’s a credit bubble 30 years in the making and we can look forward to a period of sustained volatility.”
