The Big Picture

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• 10 Tuesday PM Reads
• Liquidating Lehman
• Expensive Cities
• CalPERS to Hedge Funds: Buh-Bye
• 10 Tuesday AM Reads
• Explaining How Alibaba Works With 280 Pairs of Pants

10 Tuesday PM Reads Posted: 16 Sep 2014 02:30 PM PDT My afternoon train reads: • Hilsenrath: Fed Chief Yellen Seeks Interest-Rate Consensus (WSJ) see also As Bond-Buying Ends, Yellen Now Will Chart Course for Federal Reserve (NYT) • Cathy O’Neil on Math, Wall St and Occupy Wall Street: EconTalk Episode with Cathy O’Neil hosted by Russ Roberts (Library of Economics and Liberty) • Avoid Being An Out-Of-Style Investor (Rick Ferri) see also Swedroe: Why Some Anomalies Persist (ETF.com) • Companies’ Stock Buybacks Help Buoy the Market (WSJ) • Crash Ahead!!! (Above the Market) see also Preserving Capital During a Bear Market (Wealth of Common Sense) • Can Real Estate Stocks Cope with Rising Rates? (Context) • Ayn Rand’s Capitalist Paradise Is Now a Greedy Land-Grabbing Shitstorm (Gawker) • Learning From Benjamin Franklin (Seeking Wisdom) • Sun and Wind Alter Global Landscape, Leaving Utilities Behind (NY Times) • Don’t Underestimate Smartwatches (WSJ) but see Apple Watch: Asking Why and Saying No (stratechery) What are you reading?     Norway’s gargantuan sovereign wealth fund, by the numbers Source: Quartz

Liquidating Lehman Posted: 16 Sep 2014 12:00 PM PDT Source: WSJ   I’ve been paying attention to so many other stories that I almost let the anniversary of the Lehman Brothers’ Chapter 11 bankruptcy filing (it was six years to-the-day yesterday) slip by unnoticed. That would be a shame.   Continues here

Expensive Cities Posted: 16 Sep 2014 09:00 AM PDT How Far Your Paycheck Goes, In 356 U.S. Cities Source: NPR via Know More

CalPERS to Hedge Funds: Buh-Bye Posted: 16 Sep 2014 06:45 AM PDT This was the big news yesterday out of California: The California Public Employees' Retirement System (Calpers) today announced that it will eliminate its hedge fund program, known internally as the Absolute Return Strategies (ARS) program, as part of an ongoing effort to reduce complexity and costs in its investment program. The staff recommendation, supported by the Investment Committee, will exit 24 hedge funds and six hedge fund-of-funds valued at approximately $4 billion. Though this move may shock some people, it was one of the most-telegraphed actions that the nation's biggest pension fund has made. The seeds for this were planted last year, when Calpers moved the authority over hedge funds from its equity desk to its fixed-income group. Bond investors look at the world very differently from equity investors. The criticism of hedge funds from the equity side of the investing universe typically focuses on performance and fees, to a lesser extent. Charging high fees — hedge funds typically collect fees equal to 2 percent of the assets under management plus 20 percent of any gains — is a pretty big drag on long-term performance. However, a handful of funds have managed to accomplish high returns over long periods of time. That is the promise of alternative investments. The reality is much different, as the industry as a whole and most of its components underperforms the broader market. Not surprisingly, paying high fees for a lack of performance has become a difficult investment practice to defend. But that is the equity view. From the fixed-income side of things, the focus is on a risk-reward analysis . . . Continues here

10 Tuesday AM Reads Posted: 16 Sep 2014 05:00 AM PDT Happy Fed Day! Or should we say: Happy start to the-two day FOMC meeting that will drive trading volumes even lower as we await the inevitable continuation of the taper. Oh, and here are our morning reads: • Record S&P 500 Masks 47% of Nasdaq Mired in Bear Market (Bloomberg) see also A Closer Look At The Dow (Irrelevant Investor) • As Fed meets, markets fixate on 2 words (USA Today) see also Fed Liftoff May Not Send Yields Soaring (WSJ) • Venture Capitalist Sounds Alarm on Startup Investing (WSJ) • Interesting list: 102 finance people you have to follow on Twitter. (Business Insider) Continues here

Explaining How Alibaba Works With 280 Pairs of Pants Posted: 16 Sep 2014 04:00 AM PDT Alibaba’s IPO could be the biggest in history. Bloomberg’s Sam Grobart explains how Alibaba works through the experience of ordering 280 pairs of pants manufactured overseas. Source: Bloomberg, Sept. 15 2014 Video by: Dan Przygoda, David Yim

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