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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.

»Read more
  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.

»Read more
  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.

»Read more
  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.

»Read more
  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."

»Read more
  Monday, 22 Sep 2014 | 10:36 AM ET

Julian Robertson sees TWO bubbles brewing

Posted By: Jeff Cox
Source: CNBC

Hedge fund pioneer Julian Robertson has bad news for those who fear bubbles: There are at least two brewing in the markets now.

The Tiger Management founder believes that even though "the economy is getting better," there are dangers brewing beneath the surface.

"The first bubble is that bonds are at ridiculous levels, so that the saver, the small charity, has no place to put his money except into stocks," Robertson said at the Bloomberg Markets Most Influential Summit. "I think that situation is serious on that score. Nobody seems to be concerned about that.

»Read more
  Monday, 22 Sep 2014 | 10:59 AM ET

Dudley: 'I would love to' raise rates in 2015

Posted By: Jeff Cox
New York Federal Reserve President William Dudley
Getty Images
New York Federal Reserve President William Dudley

New York Federal Reserve President William Dudley expressed concern Monday over dollar strength and cautioned investors against trying to read too much into the central bank's economic projections.

The remarks from Dudley, an influential member of the Fed's Open Market Committee and one of its leading doves, reflected continued concern over the strength of the economy and seemed to fortify the belief that the U.S. central bank won't be making any sudden policy maneuvers.

"The dollar has appreciated a bit over the last few months—not by a significantly large amount—that does factor in terms of our economic forecast," he said at the Bloomberg Markets Most Influential Summit. "If the dollar would strengthen a lot that would have consequences for growth."

»Read more
  Monday, 22 Sep 2014 | 12:38 PM ET

NY regulator warns against looming cyber 9/11

Posted By: Jeff Cox
Benjamin Lawsky, superintendent of the New York State Department of Financial Services, is shown in New York.
Jin Lee | Bloomberg | Getty Images
Benjamin Lawsky, superintendent of the New York State Department of Financial Services, is shown in New York.

A top regulator in New York believes it's only a matter of time before terrorists strike a major cyber blow against the American financial system.

"I'm worried what we are going to have some major event in the cybersystem that is going to cause us all to shudder," Benjamin M. Lawsky, the superintendent of the New York State Department of Financial Services, said Monday at the Bloomberg Markets Most Influential Summit.

Asked if it would resemble, in computer system terms, a 9/11-like event, he said the damages would be along those lines.

»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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