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Bridgewater's Pure Alpha II climbs 9.5% YTD
Hedge Funds
<p>While Fortress and BlackRock shut down macro funds, things are looking pretty good over at Bridgewater, as Reuters reports:<br /> "Bridgewater Associates’ Pure Alpha II Fund, managed by Ray Dalio, Robert Prince and Greg Jensen, is up 1.97 percent so far in November for a year-to-date total return of 9.5 percent, two people familiar with the fund's performance said on Tuesday.</p> <p>Pure Alpha has $81 billion in assets under management and employs a traditional hedge fund strategy that actively bets on the direction of various securities, including stocks, bonds, commodities and currencies, by predicting macroeconomic trends. The fund has returned 13 percent since inception in 1991.</p> <p>A subset of the fund, Pure Alpha Major Markets, which has approximately $15 billion in assets rose 4 percent for the month and has returned 14.8 percent for the year, according to the sources."<br /> The firm's $70 billion All Weather fund however is still down 4.5% for the year.<br /> Photo: Public domain</p>
China’s macro disconnect
Capital Markets
<p>&nbsp;</p> <p>NEW HAVEN – Structural change and rebalancing are formidable undertakings for any economy. China has been focused on these objectives for five years – seeking to transform a powerful yet unbalanced growth model based largely on exports and investment into one driven increasingly by its consumers. Success is essential if China is to avoid the dreaded “middle-income trap” – the economic slowdown that most fast-growing developing economies experience when they reach income thresholds comparable to that of China today.<br /> The results have been mixed. China has been highly successful in its initial efforts to shift the industrial structure of its economy from manufacturing to services, which have long been viewed as the foundation of modern consumer societies. But it has made far less progress in boosting private consumption. China now has no choice but to address this disconnect head on.<br /> The performance of China’s services sector has been especially impressive in recent years, with its share of GDP increasing from 44% in 2010 to 51.6% in the first three quarters of 2015, according to official statistics. That is nearly double the four-percentage-point increase that was initially envisioned in the 12th Five-Year Plan, which is about to come to an end.<br /> Click here to read more</p> <p>© Project Syndicate</p> <p>This story originally appeared in Advisor Perspectives.<br /> Photo: g0d4ather</p>
BIS reports on bitcoin challenge
FinTech
<p>It's official: the suits really are taking notice of the hoodies.</p> <p>Digital currencies such as Bitcoin could threaten the ability of central banks to control economies, issue cash and measure money aggregates, according to a report by the Bank for International Settlements (BIS) released this week. (Coindesk.com)</p> <p>"A widespread substitution of banknotes with digital currencies could lead to a decline in central bank non-interest paying liabilities. This, in turn, could lead central banks to substitute interest paying liabilities, reduce their balance sheets, or both. The result could be a reduction in central bank earnings that constitute central bank seigniorage revenue," said the BIS.</p> <p>"The emergence of distributed ledger technology [blockchain] could present a hypothetical challenge to central banks, not through replacing a central bank with some other kind of central body but mainly because it reduces the functions of a central body and, in an extreme case, may obviate the need for a central body entirely for certain functions."</p> <p>"In some extreme scenarios, the role of a central body that issues a sovereign currency could be diminished by protocols for issuing non-sovereign currencies that are not the liability of any central institution."<br /> Photo: BTC Keychain<br /> &nbsp;</p> <p>&nbsp;</p>
Daily Scan: SEC says Goldman Sachs employee stole secrets; stocks close largely unchanged
Capital Markets
<p>Updated throughout the day</p> <p>November 25, 2015</p> <p>U.S. markets barely changed Wednesday. The Nasdaq added 0.26%. The Dow and S&amp;P 500 were largely unchanged. It was data dump Wednesday: Weekly jobless claims came in much better than expected at 260,000, under the 270,000 estimate. Durable good orders surprised, rising 3% in October after declines in August and September. October U.S. personal spending rose a disappointing 0.1% and personal income rose 0.4%. New home sales were mildly disappointing in October with downward revisions in the previous months.</p> <p>Don't forget -- the U.S. markets are closed Thursday for Thanksgiving. They will reopen Friday for a short day, closing at 1 p.m. ET.</p> <p>Here’s what else you need to know:</p> <p>SEC says Goldman Sachs employee stole secrets. The SEC filed a civil complaint against former Goldman employee Yue Han, accusing him of taking nonpublic information to trade ahead of client mergers, garnering $450,000 in profit. Wall Street Journal (paywall)</p> <p>Pimco sues Citigroup over mortgage debt losses. Pimco and other investors claim Citigroup failed to properly monitor toxic securities, resulting in a loss of $2.3 billion. Reuters</p> <p>Hewlett-Packard stock falls more than 13%. The computer maker announced fourth quarter earnings of 93 cents per share and revenue of $25.7 billion, down 9% from last year and falling short of the expected 97 cents a share on $26.36 billion. CNBC</p> <p>President Obama comforts Americans. Obama tried to reassure Americans preparing for one of the biggest travel days of the year that U.S. security services are ready for anything terrorists may want to try. Obama also said that there are no credible reports of "a plot on the homeland." NBC</p> <p>Brazilian bank CEO arrested. Andres Esteves, CEO of BTG Pactual, was arrested Wednesday in connection to the Petrobras oil company corruption scandal. Sen. Delcidio do Amaral of the ruling Workers’ Party was also arrested. Wall Street Journal (paywall)</p> <p>Ethan Allen rejects hedge fund take over. The furniture company rejected Sandell Asset Management's bid to take control of the board of directors. Sandell's founder Thomas Sandell has been pushing for the company to spin off its real estate into an investment trust and lease the space back for the tax advantages. Sandell owns about 5% of Ethan Allen's shares. Hartford Courant</p> <p>Costco chicken salad causes E. coli breakout. At least 19 people in seven states may have gotten E. coli after eating rotisserie chicken salad from Costco. Five people have been hospitalized but no deaths have been reported. Reuters</p> <p>ISIS claims responsibility for Tunisian attack. The attack on a bus carrying members of the Tunisian presidential guard killed 12 people Tuesday. Wall Street Journal (paywall)</p> <p>Chicago officials urge calm after police-shooting video released.  A city police officer was charged with first-degree murder Tuesday in the fatal shooting in 2014 of a black teenager, and hours later officials released a graphic video showing the white officer repeatedly firing at the 17-year-old. Wall Street Journal (paywall)</p> <p>Calpers coughs up $3.4 billion in private equity fees. The largest U.S. pension fund revealed the payments -- which date back to 1990 -- as part of its most significant disclosure to date. Wall Street Journal (paywall)</p> <p>Europe shrugs off geopolitical tensions. European stocks are firm following a mostly soft Asia-Pacific session as traders shrug off heightened geopolitical tensions following the downing of a Russian jet fighter by Turkey. Financial Times (paywall)</p> <p>Hello, it's a record. Adele's new record, "25," looks like it will sell more than 2.5 million albums in the first week. The record is currently held by 'N Sync for its 2000 sale of "No Strings Attached," which hit 2.42 million in a single sales week. Forbes<br /> You won’t believe this:<br /> Frank Gifford had brain disease. The former NFL running back and t.v. commentator passed away at 84 in August. His family had his brain studied
Apple may be Square's next big competitor
FinTech
Progress is a beautiful thing. pic.twitter.com/VmLhkahutD — Square (@Square) November 19, 2015 Square just released a new payment reader that is now compatible with both Apple Pay and Android Pay. To push out the chip-compatible reader, Square is even offering to give away 250,000 of the $49 readers for free. But there could be a fly in the Square ointment.
Mass. pension wants hedge fund fees private
Hedge Funds
<p>The Massachusetts Pension Reserves Investment Management (PRIM) doesn't want to disclose what it pays in hedge fund fees.</p> <p>PRIM has lost almost $1.2 billion in investment revenue since 2005 because of hedge funds, says a recent report from the American Federation of Teachers and the Roosevelt Institute. The board paid $1.2 billion in fees for hedge funds to manage investments that have provided worse returns than the same-sized total fund returns, reports the Boston Business Journal.</p> <p>Eric Nierenberg, senior investment officer for hedge funds at PRIM, says not fair. The size of PRIM's investment, as well as its long term status, allows the fund to negotiate fee reductions of 40% or more. Managers “may be less willing to make significant fee concessions if they know that’s going to be very publicly discussed,”says Nierenberg.</p> <p>Nierenberg also called the $1.2 billion estimate "wildly inflated," but he did not provide any counter numbers.<br /> Photo: David Goehring<br /> &nbsp;</p>
Zuckerberg to take two month paternity leave
Lifestyle
<p>Mark Zuckerberg is taking full advantage of Facebook's generous parental leave policy.</p> <p>Companies from Amazon to Netflix have spent 2015 talking up their parental leave policies. Facebook has always offered 17 weeks of paid leave for new dads, ranking it second on Fatherly's list of 50 best places for new dads to work, reports Fast Company. Zuckerberg announced on his own Facebook page that when his first child is born in a few months he will take off a full two months of work.</p> <p>Zuckerberg called his leave a "very personal decision," saying that the outcome is better for children and families when working parents take time with their newborns.</p> <p>Studies show that even when companies offer paid parental leave, few employees actually take it. A 2012 study showed that only 12% of tenured professors offered paid paternity leave took it. But if the head of a $302 billion company can take off a full two months to spend time with his new daughter, perhaps more men will feel comfortable doing the same.<br /> Photo: Oleg Sidorenko<br /> &nbsp;</p>
Deutsche's CEO: Bonus doesn't make me work harder
Capital Markets
<p>CEOs have admitted that the financial world's compensation system is a mess, but Deutsche CEO John Cryan took it a step further.</p> <p>“I have no idea why I was offered a contract with a bonus in it because I promise you I will not work any harder or any less hard in any year, in any day because someone is going to pay me more or less,” he told a conference in Frankfurt.</p> <p>Cryan says pay in the sector is too high, and he doesn't understand people who say they work harder because they can be paid a bit more, reports the Financial Times.</p> <p>Needless to say, many of Cryan's peers weren't too happy with his comments. And it doesn't seem he's handing back his bonus any time soon.<br /> Photo: Pictures of Money<br /> &nbsp;</p> <p>&nbsp;</p>
Elliott takes stake in 'dramatically undervalued' Alcoa
Hedge Funds
<p>Elliott Management grabbed a 5.1% share of Alcoa, as Elliott founder Paul Singer calls the metal manufacturing company "dramatically undervalued."</p> <p>Alcoa has slumped this year, hitting a 52-week low of $7.81 on the day Elliott made its purchase, reports Forbes. The company's shares were up 4.37% Monday, but the stock price is down more than 42% for the year.</p> <p>Singer says the company's plans to separate into two Fortune 500 companies, one innovation and one technology focused, will add value. Tuesday Alcoa announced the new executive structure for the split. Roy Harvey, current executive v.p. and president of global primary products, will be CEO of the new upstream company. William Oplinger, executive v.p. and chief financial officer, will become CFO, reports The Wall Street Journal. Ken Giacobbe, current CFO of Alcoa's engineered products and solutions unit, will be CFO of the new value-add company. Alcoa CEO Klaus Kleinfeld will serve as CEO of the new value-add company.</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;<br /> Photo: broombesoom</p>
Video: If you are still angry about the 2008 market collapse, then watch this trailer
Lifestyle
<p>Remember all those bankers that went to jail for launching one of the worst financial collapses of the last 100 years? Neither do we. If you feel the way we do about that then you will probably love the movie "The Big Short,"  based on the Michael Lewis bestseller. Get in line now to get tickets -- it opens on Christmas. What a present.</p> <p>&nbsp;</p>