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  Monday, 24 Nov 2014 | 1:31 PM ET

In this recovery, fast cash trumps smart money

Posted By: Jeff Cox
Suzanne Plunkett | Reuters

There are more payday lenders in the U.S. than McDonald's or Starbucks, reflecting economic conditions in which fast money is even more important than fast food.

Payday lending, in which users pay a fee for what amounts to an advance on their paychecks, has blossomed over the past 20 years. There are now more than 20,000 across the country, according to the St. Louis Federal Reserve, while McDonald's boasts 14,267 locations.

They're used most often by people who lack access to ordinary credit—often those at or near the bottom of the economic spectrum, with nearly a quarter living on public assistance or retirement income.

Read More PayPal co-founder aims to reinvent banking

While the loans can fill a need for fast cash, they also can become a way of life for users who end up paying effective annual percentage rates, or APRs, well in excess of 300 percent.

»Read more
  Monday, 24 Nov 2014 | 10:54 AM ET

Hedge funds playing buy-and-hold, and losing

Posted By: Lawrence Delevingne
Pedestrians pass in front of an Apple store in New York.
Scott Mlyn | CNBC
Pedestrians pass in front of an Apple store in New York.

Hedge funds aren't changing their stock holdings much despite poor performance compared with the broader stock market.

Hedge fund position turnover averaged 27 percent in the third quarter, according to a new report of holdings as of Sept. 31 by Goldman Sachs. That's the lowest percentage ever since tracking began in 2001.

The typical hedge fund also has an average of 64 percent of its long stock bets invested in its 10 largest positions, according to the report.

"Hedge fund returns are highly dependent on the performance of a few key stocks," Goldman Sachs wrote.

»Read more
  Friday, 21 Nov 2014 | 2:39 PM ET

Pro's 10 signs you've been on Wall St too long

Posted By: Jeff Cox
Scott Mlyn | CNBC

To say Wall Streeters are not like ordinary humans is hardly a universe-shattering observation on social behavioral norms.

Everybody knows people on the Street are ... different.

How different?

Nick Colas, chief market strategist at New York-based brokerage ConvergEx and someone who has devoted quite a bit of time in his daily missives to piercing through not only market action but also the behavior that drives it, has a top 10 list that seeks to quantify some of the ways in which his colleagues are ... unique.

In much the same way that "reformed broker" Josh Brown a few weeks ago dissected 10 "insane things" that Wall Streeters believe, Colas delves into 10 signs of someone who's been on the Street for too long.

»Read more
  Friday, 21 Nov 2014 | 11:08 AM ET

Jilted hedge funds even more in love with Japan

Posted By: Lawrence Delevingne
Michael Novogratz
David Grogan | CNBC
Michael Novogratz

If hedge funds and Japan dated, it might be called an on-again, off-again relationship.

Investors famously shorted Japanese government bonds, or JGBs, a few years ago but got burned; the bearish trade was dubbed the "widow-maker."

The next big play was a bullish one on local stocks rising and the yen falling, which made tons of money in 2013. But many of the same hedge funds got burned early this year when that "reflation" trade reversed.

Despite those ups and downs, hedge funds are now more in love with Japan than at any time in the last decade. Managers surveyed by Bank of America Merrill Lynch from Nov. 7 through Nov. 13 found that they had the most positive outlook on Japan since 2005 and the country is the most-favored investment region for the coming year.

"Japan is the flavor of the month," said V-Nee Yeh, an investor in hedge funds through Hong Kong-based Cheetah Investment Management.

»Read more
  Friday, 21 Nov 2014 | 1:52 PM ET

Fed's Tarullo wants to get tougher on big banks

Posted By: Kate Kelly

Federal Reserve Board Governor Daniel Tarullo argued Friday that financial-firm compliance enforcement hasn't been stiff enough and that tougher action on the part of the Fed and other regulators was likely needed.

"The accumulation of violations, investigations, and in many cases, I think, acknowledgement of violations" in a variety of areas, Tarullo said during the second day of a tense two-day hearing on U.S. bank commodity activities.

The recent trouble in markets for interest rates, currencies, mortgages, and commodities, "suggests that in general, the compliance, procedures, mechanisms, expectations, within firms for abiding by laws ... are not adequate in many cases," he said. The Fed, Tarullo added, is focused on "how to assure" that robust enough monitoring is in place.

»Read more
  Friday, 21 Nov 2014 | 6:00 AM ET

Testimony to end, but AIG case far from over

Posted By: Mary Thompson
AIG headquarters in New York City.
Adam Jeffery | CNBC
AIG headquarters in New York City.

The last witness in an eight-week trial over the government's role in AIG's bailout is expected to be called Friday, but a verdict is still months away.

The trial, being heard in federal claims court in Washington, D.C., is a bench trial. Overseen by Judge Thomas Wheeler, it has pitted the government against a high-powered team of lawyers representing former AIG CEO Hank Greenberg and other current and former shareholders of the insurance giant.

The plaintiffs claim the Federal Reserve overstepped its powers by imposing unusually high interest rates on AIG, and taking what became a 92 percent stake in the company as part of a $182 billion bailout of AIG. During the trial, financial luminaries including former Treasury secretaries Hank Paulson and Timothy Geithner, along with former Fed Chairman Ben Bernanke, were called to testify.

In an opening statement at the trial, a lawyer from the Department of Justice, Kenneth Dintzer, said AIG received assistance only because of the potential global consequences of the company filing for bankruptcy, and that the loan terms made sense given market conditions. "The goal was not to save AIG, it was to save the world from AIG," Dintzer said.

»Read more
  Thursday, 20 Nov 2014 | 3:42 PM ET

Fired bankers at Goldman, NY Fed were pals: Lawyer

Posted By: Mary Thompson

Rohit Bansal and Jason Gross had been friends for years, both having worked at the New York Federal Reserve. Now both find themselves out of jobs because of information Gross may have illegally shared with the Bansal.

"He and Mr. Bansal socialized together, they vacationed together," said attorney Bruce Barket, a partner at Barket Marion Epstein & Kearon who is representing 30-year-old Gross.

Barket, a criminal defense lawyer, told CNBC that Gross left his job as a bank examiner at the New York Fed in early October. Barket said it was not clear to him if Gross was fired or if he left of his own volition.

Bansal, 29, was fired from Goldman Sachs on Sept. 26, after a senior Goldman executive flagged a report Bansal had prepared for the financial institutions group, a unit of the investment banking division.

According to an internal memo sent to employees and obtained by CNBC, in the report, Bansal, who had joined Goldman from the New York Fed in July, included information received from Gross that the senior executive recognized as being confidential to the bank's supervisor—also the New York Fed.

»Read more
  Thursday, 20 Nov 2014 | 2:24 PM ET

Bill Gross to manage $500 million for George Soros

Posted By: Lawrence Delevingne

Recently departed Pimco boss Bill Gross just got a vote of confidence from one of the most successful investors of all time.

Janus Capital Management announced Thursday that Quantum Partners, a private investment vehicle managed by Soros Fund Management, has invested $500 million in a separate account managed by Gross.

The account will pursue a similar strategy to the publicly accessible Janus Global Unconstrained Bond Fund, which managed just $442.8 million as of Oct. 31, according to Janus. Pimco managed $1.87 trillion firmwide as of Sept. 30.

Read MorePimco is pulling down rest of the bond market

»Read more
  Thursday, 20 Nov 2014 | 11:51 AM ET

Bond market volatility: There's a VIX for that

Posted By: Jeff Cox
Getty Images

As the Federal Reserve gets set to chart a future course off zero interest rates, investors now have a chance to play along with how the moves will affect the government bond market.

The Chicago Board Options Exchange has added another wrinkle to its package of "VIX"—or Volatility Index—products, with futures that trace market sentiment over the direction of the 10-year Treasury note.

Futures trading on the 10-year U.S. Treasury Note Volatility Index (ticker VXTYN) began a week ago, about a month too late for October's whipsaw activity in government bond yields but still plenty ahead of the real action in rates that should start once the Fed begins the expected normalization process in 2015.

»Read more
  Thursday, 20 Nov 2014 | 10:50 AM ET

Greek drama: Telecom focus of bloody PE fight

Posted By: Lawrence Delevingne
David Bonderman, founding partner of TPG Capital
Andrew Harrer | Bloomberg | Getty Images
David Bonderman, founding partner of TPG Capital

A hedge fund and other out-of-luck bond investors have won a $565 million judgment in a long-running legal saga that accuses large private equity firms of unfairly profiting from a Greek telecom company they set up to fail with piles of debt.

Despite the favorable court ruling filed Tuesday, London-based SPQR Capital and other bondholders of the company still face legal challenges to get PE giants TPG Capital Management and Apax Partners to pay.

»Read more

About NetNet

  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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