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  Monday, 28 Jul 2014 | 1:29 PM ET

Fed up? Yellen facing challenges from within

Posted By: Jeff Cox

Not quite six months into her term, Federal Reserve Chair Janet Yellen already faces a stern test: unrest from within.

Dallas Fed President Richard Fisher's op-ed column in Monday's Wall Street Journal represents an unusual—though not entirely unprecedented—public calling-out of the central bank's policies and, by extension, the chair. Long considered a maverick among the Fed's 12 regional presidents, Fisher expressed concern that ultra-loose monetary policy is creating "financial excess" leading to "an artificial sense of confidence" in financial markets.

"Given the rapidly improving employment picture, developments on the inflationary front and my own background as a banker and investment and hedge fund manager, I am increasingly at odds with some of my respected colleagues at the policy table of the Federal Reserve as well as with the thinking of many notable economists," Fisher said.

His hawkish, outlier stance aside, however, the sentiments Fisher expressed are gaining traction among Fed-watchers and presenting a challenge for Yellen.

"They get more difficult for her," Carnegie Mellon Fed historian Allan Meltzer said in an interview when asked the type of conditions Yellen faces going forward.

»Read more
  Monday, 28 Jul 2014 | 11:29 AM ET

Bain snaps up $1.3 billion JPMorgan loan book

Posted By: Lawrence Delevingne
Sankaty Advisors home page
Source: Sankaty Advisors
Sankaty Advisors home page

JPMorgan Chase found the perfect suitor for a big book of loans it had made around the world but wanted to shed: Bain Capital.

JPMorgan announced Monday that it had agreed to sell $1.3 billion worth of loans and other securities to Sankaty Advisors, the $24 billion Bain unit focused on lending money as an investment strategy. The portfolio represents the bank's entire Global Special Opportunities Group, which is led by Chris Nicholas and has about 35 employees.

The sale of the unit and its assets culminates a long dating process. JPMorgan will be receiving interest for some or all of the loans from "dozens" of parties, including KKR, Carlyle and Blackstone's GSO unit, according to people familiar with the situation.

»Read more
  Thursday, 17 Jul 2014 | 12:59 PM ET

Bullish BofA changes gears, calls for correction

Posted By: Jeff Cox
Adam Jeffery | CNBC

Another prominent market bull has joined the growing ranks of Wall Street strategists who think a correction is not far away.

Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch, believes stocks are setting up for a drop of 10 percent or better in the fall. That would come after the market repeatedly dodged big declines despite numerous predictions that the two-year run without a correction was near an end.

The S&P 500 has gained 6.7 percent year to date, and Hartnett thinks the market index will finish the year higher still—the firm has a 2,000 target—but not before some turmoil.

"High cash levels say the summer 'melt-up' is not over yet," he said in a note to clients. "But with both institutional and private client allocations to stocks at multi-year highs, we think an autumn correction is increasingly likely."

»Read more
  Monday, 28 Jul 2014 | 1:04 PM ET

Wall Street elite call for trading fee changes

Posted By: Everett Rosenfeld

Key Wall Street executives called for reform to trading fees that could be distorting markets and increasing use of dark pools, and even one of the men behind the fees agreed it's time for a change.

In a Monday round-table discussion headed by Rep. Scott Garrett (R-NJ), chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, several of Wall Street's biggest players called for reforms to the maker-taker fee model.

Read MoreDC stock hearing to feature Who's Who of Wall Street

»Read more
  Thursday, 17 Jul 2014 | 11:15 AM ET

Paulson: Buying a house still best investment

Posted By: Lawrence Delevingne

Billionaire money manager John Paulson believes buying a home to live in is the best investment possible.

"I still think, from an individual perspective, the best deal investment you can make is to buy a primary residence that you're the owner-occupier of," Paulson said Wednesday at the Delivering Alpha conference presented by CNBC and Institutional Investor.

»Read more
  Wednesday, 16 Jul 2014 | 6:00 AM ET

Big banks crush earnings expectations. But how?

Posted By: Kayla Tausche
JP Morgan Chase World Headquarters on Park Avenue in New York.
Timothy A. Clark | AFP | Getty Images
JP Morgan Chase World Headquarters on Park Avenue in New York.

For the first time in recent memory, Main Street borrowing and spending has been a bigger driver of earnings than Wall Street's trading.

JPMorgan Chase, Goldman Sachs and Citigroup have all reported double-digit declines in trading revenues for the last quarter, as volatility or lack thereof created a void of demand for buying and selling, especially fixed-income securities. While Goldman CFO Harvey Schwartz called a bottom in the activity, which has slowed during the extended period of low interest rates, investors have shifted their focus to other, stronger parts of the banks' bottom lines.

In JPMorgan's case, the bank is seeing client assets rise sharply, and consumer confidence spurs more spending across credit and debit cards. CFO Marianne Lake said she sees high single-digit growth in spending on items like groceries and gas, and double-digit growth in spending on discretionary items like travel and retail.

"Across the board, consumers are spending healthily in all categories," Lake told investors on a conference call.

»Read more
  Tuesday, 15 Jul 2014 | 4:47 PM ET

Viking preps $2 billion illiquid investments fund

Posted By: Lawrence Delevingne
Andreas Halvorsen, chief executive officer of Viking Global Investors LP.
Daniel Acker | Bloomberg | Getty Images
Andreas Halvorsen, chief executive officer of Viking Global Investors LP.

Viking Global Investors, the $28.8 billion firm led by Andreas Halvorsen, is preparing the launch of a new fund to focus on illiquid investments, according to three people briefed on the matter.

The firm is seeking up to $2 billion for the Viking Global Opportunities fund by mid-November, according to the people. Viking employees will contribute some of that and plan to start investing the capital on January 1, 2015. Viking already manages $20.6 billion in long-short hedge fund assets and more than $8 billion in long-only strategies as of July 1.

A spokesman for the firm declined to comment.

»Read more
  Tuesday, 15 Jul 2014 | 12:49 PM ET

Alpha addict: The amazing career of Leon Cooperman

Posted By: Lawrence Delevingne

Leon Cooperman is addicted to investing.

The hedge fund manager's stock-junkie lifestyle starts at 5:15 a.m. on weekdays, when he wakes up in the Short Hills, New Jersey, house he's lived in for 36 years. He then drives to the Manhattan offices of his $10.7 billion Omega Advisors, getting in by 6:30 a.m. (he took the ferry for 30 years before the firm recently moved from Wall Street to midtown). Cooperman then digs in to investing for 12 hours—including a working lunch in the office—bouncing between grilling corporate executives in person or on the phone, consulting with his 18-person research team and reading company reports. By 6:30 p.m., it's off to a business dinner with more CEOs or fellow investors like Mario Gabelli of Gamco Investors and Bill Priest of Epoch Investment Partners. Then it's a quick post-dinner shower and more time in front of a Bloomberg terminal checking international markets before bed at 11 p.m.

"The way to be successful is do what you love and love what you do," Cooperman said this month in an interview. "I get paid normally a lot of money for basically doing something I enjoy doing. And what I enjoy is to hunt—finding something somebody else doesn't see, making a bet and having Mr. Market prove me right."

Mr. Market has indeed smiled on Lee Cooperman, making the 71-year-old South Bronx native a billionaire. A maniacal focus on picking undervalued companies combined with the hard work and frugality of someone who came from little have led to a nearly unparalleled track record of investment returns for longer than most people have worked on Wall Street.

Take Cooperman's recommendations at the Delivering Alpha conference, where he is scheduled to speak Wednesday. In 2012, Cooperman made 10 stock recommendations at the joint CNBC and Institutional Investor conference. All gained in value over the next year, many by double digits. In 2013, the hedge fund manager presented 10 more picks. Eight of them are winners.

»Read more
  Monday, 14 Jul 2014 | 11:46 AM ET

KKR buys into money-minting energy hedge fund

Posted By: Lawrence Delevingne
Henry Kravis, co-founder of KKR
Daniel Acker | Bloomberg | Getty Images
Henry Kravis, co-founder of KKR

BlackGold Capital Management has been virtually printing money, and KKR wants in.

The private equity giant announced Monday that it was acquiring a 24.9 percent interest in the $1.4 billion Houston, Texas-based hedge fund firm. The terms weren't disclosed, but the reason for the interest in BlackGoldwhich primarily invests in the debt of energy-sector companies—is obvious.

The BlackGold Opportunity Fund has produced annualized returns of 30.81 percent from January 2009 through May 2014, according to confidential performance information. By comparison, the Absolute Return Credit Index, which measures hedge funds that practice a similar strategy, gained 11.75 percent over the same period.

»Read more
  Sunday, 13 Jul 2014 | 2:00 PM ET

Though just 3% outperform, ETFs keep growing

Posted By: Jeff Cox

Exchange-traded funds have exploded over the past several years and investors literally can't get enough.

In fact, respondents to a recent survey from Charles Schwab said the industry needs to grow even more, with 66 percent saying there's room for still more ETFs. The sentiment comes at a time when both the total amount of funds and the assets investors are plowing into them are increasing rapidly and investor appetite just seems to grow stronger.

"The industry's changing. There's innovation that's going to be needed," Michael Iachini, Schwab's managing director of ETF research, said in an interview. "We think more product means more competition and better pricing."

Indeed, it's pricing that has brought many people to ETFs and swelled assets under management globally to $2.6 trillion and domestically to $1.86 trillion, according to State Street, which is the second-largest issuer of the funds with $406 billion under management.

»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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