How hedge funds make a gain during this recession times !
William Ackman just scored big on a bearish bet that enabled him to sidestep steep market losses.
About a month ago, Mr. Ackman laid out $27 million to protect his portfolio against a precipitous drop he anticipated in U.S. markets as a result of the coronavirus outbreak. Those so-called hedges came in the form of credit protection on global investment-grade and high-yield bond indexes that becomes more valuable as the likelihood of corporate defaults rises.
He said in a letter to investors in his Pershing Square Capital Management LP released Wednesday that he has now closed those hedges, generating $2.6 billion in proceeds.
That offset losses in his portfolio and enabled Pershing Squareâs public fund to notch a 7.9% gain in March through Tuesdayâs close, a period in which the S&P 500 lost 17%. For the year, the fund is up 0.2%.
Mr. Ackman said in an interview Wednesday that as he watched the virus spread in China, it became clear to him the only way to deal with it was to take drastic action and shut down the economy. In February, as many others were still dismissive of the risk in the U.S., Mr. Ackman sought to protect his portfolio.
âThere happened to be a way to hedge that was almost riskless,â he said. âIf the world stayed stable, weâd lose about $25 million in a month, and if it didnât, the hedges would protect the entire portfolio.â
Give direct payments of up to $1,200 for individuals and $2,400 for couples, with $500 added for every child, based on 2019 tax returns for those who filed them and 2018 information, if they have not. The benefit would start to phase out above $75,000 in income for individuals and $150,000 for couples, going away completely at the $99,000 and $198,000 thresholds, respectively
Boost unemployment insurance, adding $600 per week for up to four months on top of what beneficiaries normally receive from states. It expands eligibility to self-employed people and independent contractors
Create a $500 billion pool of taxpayer money to make loans, loan guarantees or investments to or in businesses, states and municipalites damaged by the crisis
Give $25 billion in grants to airlines and $4 billion to cargo carriers to be used exclusively to pay employee wages, salaries and benefits, and set aside another $25 billion and $4 billion, respectively, for loans and loan guarantees
Provide $17 billion in loans and loan guarantees for unspecified âbusinesses critical to maintaining national securityâ
Put $117 billion into hospitals and veteransâ health care
Provide $16 billion for the strategic national stockpile of pharmaceutical and medical supplies
Give $350 billion in loans for small businesses to cover salary, wages and benefits, worth 250% of an employerâs monthly payroll, with a maximum loan of $10 million
Include a tax credit for retaining employees, worth up to 50% of wages paid during the crisis, for businesses forced to suspend operations or that have seen gross receipts fall by 50% from the previous year
Require group health plans and insurance providers to cover preventive services related to coronavirus without cost sharing
Delay payroll tax for employers, requiring half of the deferred tax to be paid by the end of 2021 and the other half by the end of 2022
Ban companies that take government loans from buying back stock until a year after the loan is paid back
Bar employees or executives who made at least $425,000 last year from getting a raise
Stop President Donald Trump and his family membersâ businesses from receiving emergency taxpayer relief. The provision also applies to Vice President Mike Pence, heads of executive departments, members of Congress and their family members
Suspend federal student loan payments through Sept. 30 with no accrual of interest on those loans
I watched the back and forth between Ted Cruz and Dick Durbin. Itâs completely insane. Canât understand why the Dems wouldnât even accept a 100% cap on salary for the unemployment insurance.
I donât know if anyone has any idea how difficult the logistics is gonna be to distribute that $1200. Hong Kong government announced something similar back in February but the money is not expected to arrive in peopleâs hands until July. And thatâs without any income qualification so no one in back office needs to check.
Hong Kong government is among the worldâs most efficient and still it takes them 6 months to hand out free money. How long will it take our federal government? If Trump bungles this and people still donât get that âemergencyâ cash on Election Day he will be in big trouble. The backlash will be relentless.
In theory, the IRS has a database with every return and key data in it. They can quickly pull a few fields and fire off a check or send electronically if thatâs how you get your refund. They have something, since when you E-File turbo tax verifies youâre prior year AGI vs the IRS transcript. They have to match or your E-File gets rejected. Iâm not sure if all the data is there to query or just the AGI.
Itâd be faster to just put $1,200 into everyoneâs amazon prime account. If you arenât a prime member, then go wait in line at the DMV for it
Iâm sure this will delay tax refunds, and I havenât received mine yet. I wonât be getting any of this money either. So Iâm getting screwed twice.
We have to wait for details. I thought they didnât want to just cover people who filed taxes? People could be fresh out of school and havenât file a return yet. I donât think adding a field to a system coded in COBOL in 1976 is easy either. Lots of ways to screw this up.
Ahem⌠easily done in Singapore in one day. SG govt has been giving citizens broadly and specifically for decades. All males have a POSB account which the govt knew, so only one click to send money to you.
Great chance to dump the stock. When whole world GDP stops. no matter you unlock it or dump whatever trillion i donât think it matters, just buying 3-4 weeks of time.
We didnât respond to either of the priors with zero percent interest rates, QE, and $2T stimulus. This is insane. Plus, we did full bailouts of airlines and Boeing. There might be a lull before the $2T starts flowing, but once it does itâll be crazy.
