Wednesday, 17 Sep 2014 | 2:12 PM ET

CalPERS hedge exit may be the first of many

Posted By: Kate Kelly
Don Bayley | E+ | Getty Images

The $300 billion California Public Employees' Retirement System's move this week to divest itself of $4 billion in hedge fund holdings is galvanizing a debate among many other pension managers.

"It's a discussion that's going on everywhere in our industry right now, given the high fees and what's going on with hedge funds," Steve Yoakum, executive director of the $40 billion Missouri teachers retirement funds, said in a telephone interview with CNBC on Tuesday.

CalPERS, which according to an annual tally by Pensions & Investments is the second-largest pension fund in the country, has long been a trendsetter.

The California retirees fund, which invests in private equity, fixed income, and stocks, among other things, was one of the first big retirement funds to put money into commodities in 2007, for example, and ushered in an influx of other pension-fund investments in the asset class—only to pull back on those investments after a number of years where the fund failed to make money.

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  Wednesday, 17 Sep 2014 | 11:30 AM ET

Here's the first 'correction' call...for 2015

Posted By: Jeff Cox
Adam Jeffery | CNBC

Credit Suisse has entered Wall Street's correction derby, but in a way different from its peers.

In a somewhat peculiar good news-bad news scenario, the firm's bad news is that a correction—of sorts—is coming for the stock market. The good news is that it won't happen until 2015, and probably later in the year. It's the first correction call for next year.

A note the firm's strategy team sent out Wednesday morning outlines a scenario that overall is fairly bullish—the year-end forecast for 2014 is now 2,050 for the S&P 500, up slightly from 2,020, and the 2015 target is 2,100.

However, that 2015 level is expected to close off from a high of 2,200 that the market will hit in midyear.

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  Tuesday, 16 Sep 2014 | 1:56 PM ET

The Fed's muddied message causing market mess

Posted By: Jeff Cox
Vehicles pass the Marriner S. Eccles Federal Reserve building in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images
Vehicles pass the Marriner S. Eccles Federal Reserve building in Washington, D.C.

Maybe this is what happens when a central bank becomes too transparent.

After years of nearly complete clarity regarding policy, the Federal Reserve suddenly has investors and economists scrambling to decipher whether just a few words will be removed or changed in a statement Wednesday that likely will run about 850 words in total.

Should those words—"a considerable time," in particular—go away, most market participants believe that will signal a hike in interest rates sooner than the market had expected. Should they stay, conversely, that will mean the U.S. central bank will stay on a path of near-zero short-term rates well into the future, and maybe even beyond current market expectations.

Consequently, Fed Chair Janet Yellen has fashioned quite a tightrope to walk when the Open Market Committee delivers its post-meeting statement, and when she follows with an afternoon news conference.

»Read more
  Wednesday, 17 Sep 2014 | 1:02 PM ET

No inflation, no problem. US not turning into Japan

Posted By: Jeff Cox
Tetra Images | Getty Images

Inflation may have taken a break in the U.S., but the country hardly seems perched to be the next Japan.

Data from August suggest flatlining price pressure in a year that has seen inflation fall well below the mid-2 percent range that some on Wall Street had expected in 2014. So-called core inflation, which strips out food and energy costs, was flat for the first time in nearly four years, and the consumer price index more broadly indicated just a 1.7 percent annualized increase. Prices actually declined 0.2 percent including food and energy.

"The widespread softening in core prices in recent months leaves us with no choice but to conclude that underlying price pressures are weaker than we thought they would be," Paul Dales, senior U.S. economist at Capital Economics, said in a note.

It's a trend that, extrapolated just a bit, might suggest the U.S., rather than witnessing inflation that goes with economic growth, actually could be closer to Japan-style deflation that has haunted the country for the past two decades.

Read MoreUS consumer prices fall in August

Not so, Dales said in a subsequent interview.

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  Monday, 15 Sep 2014 | 5:46 PM ET

Ackman to use dual share class for European IPO

Posted By: Kate Kelly
Bill Ackman
Kerima Greene | CNBC
Bill Ackman

Hedge fund activist Bill Ackman has never been shy about using his shareholder rights to demand change from company management teams. But as CEO of his own soon-to-be public company, he'll use a dual share-class structure that has traditionally been considered unfriendly to investors—albeit with a twist.

As part of the planned offering of Ackman's foreign offshoot, Pershing Square Holdings, on the Euronext exchange in Amsterdam in October, the company has created two sets of shares, say people familiar with the company's prospectus: One that will be sold to the public in Europe, and a second that will be controlled by a nonprofit organization in Canada.

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  Tuesday, 16 Sep 2014 | 8:00 AM ET

‘Monumental failure’ of today's colleges: Survey

Posted By: Stephanie Landsman

Colleges not preparing students for the workforce has been the perception for a long time—but now there's data to back that up.

A Gallup-Purdue University study describes a huge disconnect between what college presidents think students need to launch successful postgraduate careers and what the schools are actually delivering.

The survey, which involved more than 30,000 students, tackled topics such as internship experience, availability of mentors, enthusiastic teachers, special projects and extracurricular activities.

The biggest sticking point: Internships.

»Read more
  Monday, 15 Sep 2014 | 12:10 PM ET

One place you won't get Alibaba: The big ETFs

Posted By: Jeff Cox
Alibaba headquarters in Hangzhou, China.
ChinaFotoPress | Getty Images
Alibaba headquarters in Hangzhou, China.

Alibaba's blockbuster debut as a publicly traded stock has been everywhere leading up to Thursday's rollout. One place it won't be, though, is in a lot of investor portfolios.

That's because the e-commerce giant won't be included in the biggest exchange-traded funds that normally would list a company like Alibaba.

Because it is incorporated in the Cayman Islands and will only have American depositary receipts listed in the U.S., it will be ineligible for big indexes like the ones run by MSCI and FTSE.

While its exclusion from widely followed ETFs is unlikely to deter investor enthusiasm for Alibaba once the initial public offering hits Friday, it could have longer-term ramifications.

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  Friday, 12 Sep 2014 | 1:14 PM ET

This reg change would be huge for small banks

Posted By: Jeff Cox

Life is about to get more difficult for the nation's big banks but possibly a whole lot easier for the small ones.

As Congress enacts stricter regulations for large financial institutions and ponders future measures, there's growing anticipation that it is moving closer to steps that would exempt those not considered systemically important from the tough new oversight provisions.

On the table now is a provision that would increase the amount of assets a bank would need to hold before being considered a systemically important financial institution, or SIFI. A proposal in front of the Senate Banking Committee would raise that ceiling from $50 billion to $250 billion, and one analyst believes that despite ever-present gridlock in Washington, the SIFI threshold move likely will get through in the months ahead.

"We remain optimistic that the Senate Banking Committee will advance bank SIFI asset threshold legislation no matter the outcome of the midterm elections as there has been a clear divergence in the view of the banking industry on Capitol Hill between the money centers and all other banks," Compass Point Research & Trading analysts Kevin Barker, Isaac Boltansky and Jason Stewart said in a note to clients.

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  Thursday, 11 Sep 2014 | 2:58 PM ET

Third Point raises $2.5 billion in two weeks

Posted By: Lawrence Delevingne
Daniel Loeb
Simon Dawson | Bloomberg | Getty Images
Daniel Loeb

Investors want more of activist hedge fund manager Dan Loeb, and they're putting up lots of cash to prove it.

Loeb's Third Point pulled in $2.5 billion in fresh cash from investors in just two weeks, according to a person familiar with the situation.

A spokesman for Third Point declined to comment. The news was first reported by The Wall Street Journal.

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  Thursday, 11 Sep 2014 | 12:31 PM ET

Alibaba gets interest from Tepper, Loeb, Cooperman

Posted By: Lawrence Delevingne

Hedge funds appear to be salivating over Alibaba.

The Chinese e-commerce company's initial public offering is set for Sept. 19 and is already drawing significant attention from the so-called smart money.

Billionaire investor Leon Cooperman is one of Alibaba's fans.

Read MoreAlibaba taking the world by storm, but what is it?

"We like what we see so far and we are highly impressed with Jack Ma and his management team," Cooperman, founder of $10.4 billion hedge fund Omega Advisors, said in an email. He added that he had met with Alibaba executives and plans to invest in the stock once it goes public.

Three other major hedge fund investors who have shown interest in the IPO are Dan Loeb of Third Point, David Tepper of Appaloosa Management and Dan Benton of Andor Capital Management. All three were among the roughly 800 people—300 more than expected—who attended Alibaba's first road show presentation Monday at the Waldorf Astoria hotel in Manhattan, according to witnesses.

Spokesman for their respective firms declined to comment or didn't respond to requests on if the men planned to invest in the company. Loeb has previously invested in Yahoo and once called "hidden jewel" Alibaba "central to our investment thesis" in Yahoo.

»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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