Here's a decent joke to keep in your back pocket in case you need to lighten the mood over the weekend. (Credit goes to T. Boone Pickens, who told it at an investment conference, according to Raymond James strategist Jeffrey Saut's morning note.)
A woman strolling through Dallas encounters a talking frog, who informs her that he's not a prince, per say, but a Texas oilman. If she kisses him, the frog says, he'll turn back into a Texas oilman.
However, the woman keeps her lips to herself and just puts the frog in her pocket.
"What are you doing?" protests the frog.
"In this environment, a talking frog is worth a lot more than a Texas oilman!" the woman replies.
With jokes, like investments, timing is everything. So Pickens's gag would've been a lot funnier about eight months and $20 a barrel ago, but it still works. And the beauty is how highly adaptable it is.
For example, make the frog a hedge fund manager instead and get ready for some spit takes (But you have to know your crowd, so don't tell this joke if you're at a party in, say, Greenwich, Connecticut. Or maybe just make the frog a manager of a passive index fund or an allocator at an insurance company or Nevada's pension fund or whatever.)
Anyway, while last week we reported that the hedge fund crowd's mojo is showing signs of recovery, the must-read financial links from this week sure make it sound as if any talking-frog hedge fund managers out there best not count on getting smooched this weekend. This headline really tells you all you need to know: "Hedge Fund Managers Struggle to Master Their Miserable New World."
And how miserable is this new world? Here's another headline: "Hedge Fund Managers Expect ‘Massive’ 34% Pay Cut, Survey Says" and the sell side is putting the squeeze on. Some $28 billion flowed out of hedge funds last quarter, yet rising markets meant hedge fund capital rose to a record in the third quarter.
"Miserable" is a relative word, so the fact that hedge fund manager pay at a one-third discount would still make most of the rest of the world happier than their wildest dreams should in no way lessen your empathy toward these frogs. In any event, family offices are obviously where it's really at these days, just ask trendsetter Steve Cohen.
What if the talking frogs weren't people at all but market-based indicators of risk and stress in the financial system? Well, I'd maybe caution that you were taking this whole talking-frog joke in a direction that's a bit too nerdy. But you could still make it work using this piece from Luke Kawa and Andrea Wong, which discusses how modern market machinations have left indicators from yield curves to Libor and swap spreads to the VIX much less valuable to investors than they once were.
And while Libor's days may be numbered if the U.S. Treasury Department gets its druthers, it does make one long for the days when Libor was a reliable indicator ... of what a bunch of 20-something bros in chat rooms decided their P&Ls needed it to be. And while we're at it, we might as well get nostalgic about the days when low-volatility ETFs actually were less volatile than the rest of the market.
Anyway, to get back to the main topic of the week, which is talking frogs, it's interesting to see the Anti-Defamation League undertaking an effort to rehabilitate the image of Pepe the Frog, the hapless cartoon amphibian who's been co-opted by racists and bigots as well as -- hey, what a coincidence -- Donald Trump supporters.
And that leads us to the Trade of the Week, which will be awarded to whomever breaks off a little bit of the $50 trillion in dry powder lying around to buy Trump's childhood home, a five-bedroom tudor in Queens, which was scheduled to go up for auction with a starting bid of $849,000. The auction has now been delayed until after the election, leaving plenty of time to tour the property.
Regardless of your political leanings, you have to admit that owning the first home of one of New York's most iconic businessmen and politicians has some incredible profit potential. Maybe turn it into a cash-for-gold joint in honor of Trump's love of gold? How about student housing for Trump University once class is back in session? Certainly some wily tax accountant could build a huuuuuge business by hanging their shingle in front of this house. Perhaps there's even the potential to flip it right back to Donald if the Pennsylvania Avenue property he has his eye on falls through.
As for Pepe, Trump's camp has disavowed "symbols associated with a message of hate." Still, images morphing the faces of Pepe and Trump have proliferated on the web faster than tadpoles in a spring pond.
Hmm, Trump as a frog? It certainly explains that uncontrollable urge to kiss women.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Indeed, it may even be questionable judgment on our part to suggest this joke to Bloomberg readers. But that ship has sailed, so let's just all keep calm and carry on.
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