2015 is shaping up as the year the U.S. consumer will have to shine the light for the rest of the world—or else.» Read More
A top hedge fund manager is worried about what the continued low price of oil could mean for the global economy.
"A persistently low oil price could affect producers' ability to maintain domestic infrastructure and in the medium term be a force for geopolitical instability," Sir Michael Hintze, CEO of $14.1 billion hedge fund firm CQS, said in a letter.
Hintze did say that low crude prices would be "broadly-speaking, positive for the global economy." But he noted that the big decline was driven by lower economic growth and not just expanded supply from factors like U.S. shale reserves.
In the short term, the biggest effect will be on indebted oil-producing countries.
Hedge funds are continuing to shut down, but the pace of failures isn't quite as bad as feared.
Some 200 funds liquidated during the third quarter, according to industry data tracker HFR. That brings the total of closed funds to 661 through September, not quite on pace to match the 1,023 that shut in 2009, the previous record outside of the peak of the financial crisis in 2008 when 1,471 funds closed.
The number that shut in the third quarter also represents a slight decline from the same three month period in 2013, when 222 shut. And more funds are starting: HFR data shows that 814 funds have launched this year.
Energy prices are unlikely to rise, with the drop providing a "massive tax cut" for a growing economy, BlackRock's Larry Fink said Thursday.
The head of the $4.6 trillion money manager described his sentiment as "more bearish on energy, more bullish on the world," after a trip to the Middle East recently.
"It's fair to say the oligopoly is confused right now," he said.
Fundamental factors are at play in oil's drop to about $60 a barrel as production for years has been outstripping demand, Fink said at the DealBook conference in New York.
Stephen Schwarzman thinks the drop in energy prices is creating "wonderful, wonderful" options for investors.
"I think this is going to be one of the best opportunities we've had in many, many years," the CEO of private equity giant Blackstone Group said at the DealBook Conference in New York Thursday.
"I think there's going to be a fallout. I can't tell you how big. But I can tell you I like buying things cheaper than more expensive," Schwarzman said of companies being hurt by plummeting oil prices.
Billionaire investor Paul Singer thinks the economic recovery is "unfair" and the Federal Reserve is to blame for growing income inequality.
"[It's an] unfair recovery, a distorted recovery," the founder and president of Elliott Management said at the DealBook Conference in New York Thursday, repeating a previous charge.
Ray Dalio thinks the economy is good for now, but there could be trouble ahead as monetary policy becomes less effective in the developed world.
"It's a good environment," the founder of hedge fund firm Bridgewater Associates said Thursday at the DealBook Conference in New York.
He noted Bridgewater was still holding bets on the appreciation of U.S. stocks.
But in a year or two, Dalio noted, the "effectiveness of monetary policy will be less" and that could lead to less buffer against an economic hit.
"Whenever there might be a need for easing of monetary policy, we're going to be in a situation in which the effective ability to ease is very limited. And that's at the same time that asset prices will be comparatively high."
Lower oil prices are an unquestioned positive for the U.S. economy, Treasury Secretary Jack Lew said Thursday.
Speaking at the DealBook "Opportunities for Tomorrow" conference in New York, Lew said the plunge in energy and accompanying prices at the pump that have dropped well below $3 a gallon in most places have helped boost a U.S. economy that is doing well otherwise.
"Short-term we're seeing a U.S. economy that's growing with increasing strength, and lower energy prices are going to be a boost to consumer demand and confidence," he said.
He said the decline is "like a tax cut to the economy" and praised U.S. oil production as a "great success story."
Lew would not predict the future path of oil prices. He did say that forward cpntracts indicate that market conditions indicated the price would "trend back towards normal."
In other issues, Lew expressed some willingness to compromise on the latest spending battle raging in Washington.
Lloyd Blankfein thinks the economy is on the right track even though it's about to be overtaken by China.
"There are a lot of positives to the economy," the CEO and chairman of Goldman Sachs said at the DealBook Conference in New York Thursday.
He noted falling energy prices, an improving housing market, and lower leverage in the system.
The future of insider trading is here, and it will probably be harder to prosecute.
A federal appeals court decision Wednesday significantly redefined insider trading and may have altered the course of all further enforcement, experts said. The court's findings, which overturned convictions for former hedge fund managers Todd Newman and Anthony Chiasson, place a much higher burden on prosecutors and could even change how business is done on Wall Street, legal experts said.
"The stunning decision ... has the potential to rewrite the book on insider trading, while also dealing a body blow" to Justice Department and the Securities and Exchange Commission efforts, former assistant U.S. attorney Patrick Cotter said in a statement to CNBC.
Sen. Elizabeth Warren is going full throttle against President Barack Obama's nominee for a key Treasury Department position.
Speaking to supporters at various locales this week, the Massachusetts firebrand launched withering attacks against Antonio Weiss, the Lazard mergers and acquisitions specialist who Obama nominated as Treasury undersecretary for domestic finance. Warren labeled him as a Wall Street insider, a group she said is in too great a supply in Washington power circles.
"We'd all scratch our heads if the president nominated a theoretical physicist to be surgeon general just because she had a background in science," Warren said Tuesday at the Managing the Economy conference in Washington, according to a report in The New Republic. "It's no less puzzling to nominate an international mergers specialist to handle largely domestic issues at Treasury because he has a background in finance."
The report analyzed Warren's campaign against Weiss within the context of a potential 2016 presidential run she has insisted isn't happening. Her populist base is pushing for her to jump into a Democratic primary contest that is expected, at least at this point, to be dominated by Hillary Rodham Clinton.
The scandal-plagued head of health-care investment banking has resigned to focus on family.
2015 is shaping up as the year the U.S. consumer will have to shine the light for the rest of the world—or else.
Softer talk on Ukraine from Russian President Vladimir Putin may be an early sign of recovery, said Christopher Granville.