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  Monday, 29 Sep 2014 | 9:01 AM ET

Gartman: 'Bond market is bigger' than Bill Gross

Posted By: Jeff Cox

Bill Gross' headline-grabbing departure from Pimco may have rocked the investing world, but Dennis Gartman thinks everyone will get over it soon enough.

Gross on Friday quit the firm he founded 43 years ago for a position at Janus Capital amid huge outflows from Pimco's flagship Total Return Fund and a slew of controversies that began with the departure earlier this year of then-CEO Mohamed El-Erian.

While Gartman acknowledged the importance of the move—and weighed in with some speculation of his own—the author of the widely followed Gartman Letter said investors should avoid knee-jerk reactions.

"The bond market was thrown into a state of confusion early Friday following the announcement of Mr. Gross' resignation, but we are talking here of the departure of one man from one fund, whose influence had been waning for quite some while as his asset base was falling," Gartman wrote Monday. "The bond market is collectively wise enough to accept Mr. Gross' departure from Pimco and 'get-on-with-it' without undue problems."

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  Sunday, 28 Sep 2014 | 7:00 AM ET

Rich get richer: Largest hedge funds suck in cash

Posted By: Lawrence Delevingne
Ray Dalio, founder of Bridgewater Associates
Jason Alden | Bloomberg | Getty Images
Ray Dalio, founder of Bridgewater Associates

The rich keep getting richer in hedge fund land.

A new investigation of industry assets by Absolute Return reveals that, once again, the largest funds are controlling more assets than ever.

The publication's twice-yearly Billion Dollar Club analysis, which ranks the assets of all Americas-based firms with at least $1 billion in hedge fund strategies, increased to 305 firms that managed $1.84 trillion as of July 1, up from 293 firms that managed $1.71 trillion at the start of 2014.

Bridgewater Associates remains the largest hedge fund manager in the Americas, followed by J.P. Morgan Asset Management, Och-Ziff Capital Management and BlackRock.

»Read more
  Sunday, 28 Sep 2014 | 9:00 AM ET

Invasion of the robo-advisors: Don't be afraid

Posted By: Carleton English
ArtBox Images | Getty Images

Contrary to what you might think, traditional wealth managers and online investment advisors—known colloquially as "robo-advisors"—don't hate each other.

In fact, the sentiment between the two models borders on admiration.

A recent report from MyPrivateBanking Research suggested that traditional wealth management firms are late in realizing the threats posed by robo-advisors.

According to the report, assets under management for all registered investment advisors is said to be about $5 trillion. Robo-advisors presently hold only $14 billion of those assets, but their numbers are growing because of lower account thresholds and popularity with tech-savvy young professionals in the asset accumulation phase of their career.

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  Friday, 26 Sep 2014 | 12:17 PM ET

With Gross out at Pimco, who's the next bond king?

Posted By: Jeff Cox

If Bill Gross still can be called "the bond king," then there's at least a significant amount of tarnish on the crown.

While the Pimco founder's stunning departure from the bond giant—the firm he founded 43 years ago—may ease his personal stress load, it does little to burnish his image.

In going to Janus Capital Group, Gross will manage a fund at a firm less than one-tenth the size of his old company. He leaves amid a trail of embarrassing headlines, weak performance and huge investor outflows. That's not to mention a swirl of reports that he was about to be fired for erratic behavior.

For the markets, then, the question turns to who will be the next to wear the crown of bond king. At 70 years old, Gross was in the waning days of his reign anyway, but the move announced Friday puts a bit more urgency to see who will be his successor not only at Pimco but also as a widely followed voice in the broader fixed income market.

»Read more
  Thursday, 25 Sep 2014 | 1:40 PM ET

Fund flows flashing that there's danger ahead

Posted By: Jeff Cox
Traders on the floor of the New York Stock Exchange.
Brendan McDermid | Reuters
Traders on the floor of the New York Stock Exchange.

Investors are still betting on a rising stock market, but they've been doing so with less long-term conviction.

A compelling story is developing from how market participants are allocating cash in 2014. On net they are continuing to push into U.S. equities, but they're doing so now with short-term bets on exchange-traded funds rather than historically longer-term commitments to mutual funds.

Read MoreCashin: What could be behind the selloff

About $35 billion has flown into domestic ETFs, boosting the burgeoning industry's assets to nearly $1.9 trillion, according to the Investment Company Institute, and likely past $2 trillion by year's end.

At the same time, ICI figures show that nearly $28 billion from equity funds has exited the $12.9 trillion (excluding money market) mutual fund space. After an early year surge in inflows, investors have pulled money from stock-based mutual funds for five months running.

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  Wednesday, 24 Sep 2014 | 2:50 PM ET

More bank IPOs on the way? Don't hold your breath

Posted By: Jeff Cox

The largest-ever initial public offering for a bank is unlikely to prompt a stampede for the sector.

It's not just that the Citizens Financial IPO received a mostly tepid market reception, but rather that other conditions are lining up against bank offerings as well, even in a year that quite likely will break records by the time it's all over.

Banking analyst Dick Bove said in a note that he has been receiving multiple inquiries implying "that this offering may represent what could be a sizable number of equity issuances by existing banks and the likelihood of more new issues from banks seeking to go public."

But "nothing could further from the truth," he added.

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  Wednesday, 24 Sep 2014 | 11:28 AM ET

Hedge funds: China not 'going out of business'

Posted By: Lawrence Delevingne
A worker of an Industrial and Commercial Bank of China Ltd (ICBC) branch counts money as she serves a customer in the China (Shanghai) Pilot Free Trade zone during a media trip on September 24, 2014.
Johannes Eisele | AFP | Getty Images
A worker of an Industrial and Commercial Bank of China Ltd (ICBC) branch counts money as she serves a customer in the China (Shanghai) Pilot Free Trade zone during a media trip on September 24, 2014.

Hedge fund investors still think China is a top play in emerging markets.

"China is actually one of the best places to invest today," Frank Brochin, chief investment officer of hedge fund firm StoneWater Capital, said at the Alpha Hedge West conference in San Francisco on Tuesday. "The country has been priced as if it were going out of business. It's very difficult to imagine China going out of business."

Brochin said investors can buy into "very good companies" that trade at low single-digit price-to-earnings ratios and are growing between 15 percent and 20 percent.

"Over time if you do that, you should be fine," he said of value investments in the country.

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  Wednesday, 24 Sep 2014 | 12:01 PM ET

Bass big on Argentina; rips 'immoral' competitors

Posted By: Kate Kelly
Kyle Bass, founder of Hayman Capital.
Timothy Fadek | Bloomberg | Getty Images
Kyle Bass, founder of Hayman Capital.

Kyle Bass, founder of the $1.7 billion hedge fund Hayman Capital, revealed Wednesday morning having recently taken a large stake in YPF, the Argentine oil company, as the best play on a new decade of economic growth in the South American country.

He also bashed rival hedge funds such as Elliott Management, who have invested in Argentine bonds and held out for full payment on their investments, calling their behavior immoral.

In an exclusive interview with CNBC, Bass, whose Dallas-based fund is known both for large stock market investments and other idiosyncratic bets, argued that Japan and Argentina were the best places to put money right now.

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  Tuesday, 23 Sep 2014 | 2:16 PM ET

To reduce inequality, end buyback 'binge': Study

Posted By: Jeff Cox

Root causes of massive wealth disparity come down to one issue: Companies would rather use cash to buy back their own stock than to grow their businesses, a study in Harvard Business Review says.

Share repurchases have soared since the Great Recession ended, totaling more than $950 billion just in the past two years, according to data from FactSet and S&P Capital IQ. Capital spending, though, has essentially flatlined during the recovery, remaining at anemic levels when compared to the total economy.

The net result has been an economy that has grown historically slow when compared to previous periods following a recession, even as the gap between the rich and poor swells.

A recent Federal Reserve report highlighted the problem, stating that most of the gains in income and family wealth went to top earners, while those at the bottom of the scale actually saw "continued substantial declines in real net worth."

In an article titled "Profits Without Prosperity," Harvard Business Review's William Lazonick, an economist at the University of Massachusetts in Lowell, identifies the buyback culture as the wealth divide culprit:

Corporate profitability is not translating into widespread economic prosperity. The allocation of corporate profits to stock buybacks deserves much of the blame.

»Read more
  Tuesday, 23 Sep 2014 | 10:52 AM ET

Still hedging: Pensions won't follow CalPERS lead

Posted By: Lawrence Delevingne
The California Public Employees' Retirement System building in Sacramento, Calif.
Getty Images
The California Public Employees' Retirement System building in Sacramento, Calif.

A high-profile hedge fund exodus from a huge pension manager does not appear likely to spark a major movement.

Pensions, investment consultants and other money managers at an industry conference this week dismissed the idea that the California Public Employees' Retirement System's decision to cut a $4 billion slate of hedge funds would stall the otherwise steady increase of public retirement plans into so-called alternative assets.

"I haven't heard any rumblings about other pensions pulling out of hedge funds," Arn Andrews, chief investment officer for the city of San Jose Department of Retirement Services, said Monday on the sidelines of the Alpha Hedge West conference in San Francisco. "You either have a strategy or you don'tpeople are sticking to their plans."

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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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