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2. Who are the most influential on Wall Street?

There are plenty of bull vs. bear battles being waged over individual stocks right now. The most riveting might be the battle over Herbalife. At the market level, an even more intriguing battle is underway, pitting two academic market heavyweights, Jeremy Siegal, the bull, against Robert Shiller, the bear.

Shiller, the Yale professor, of course has been right before. He is credited with having called the Internet stock implosion in the 1990s and then the housing collapse of the 2000s. His cape measure, cyclically adjusted price earnings multiple, has become accepted as a strong indicator of stock performance. Shiller contends that the market is 62 percent overvalued.

But Siegal, of the University of Pennsylvania's Wharton School, "contends that it is based on faulty data. Many on Wall Street and the City have doubts too," according to the Financial Times.

He has "produced a new version of the Cape, which he says corrects Prof Shiller's mistakes. And his version suggests that the US stock market is sending a different signal: equities are cheap." Siegel calls the Cape "the single best forecaster of long-term future stock returns," but he "the data on which it is based are now unreliable, sending out a false signal that stocks are expensive." He sticking with his buy-and-hold mantra.

So who's right? The debate rages. What's your opinion?

What if they are both right in a sense. Even if the market is due for a short-term correction, people may still be better holding on for the long-term.

For more:
- here's the article

Read more about: Bulls vs. Bears
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By Jim Kim

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3. Dicey situation: CEO arrested in prostitution sting

Power is an elusive commodity on Wall Street. Once you get it, it's hard to keep it. For proof, we turn to the third annual Bloomberg Markets list of 50 Most Influential people in finance, which will be published in October.

This year, 36 of the 50 are new to the list. And only seven have been on it all three years, led by the likes of Goldman Sachs CEO Lloyd Blankfein, JPMorgan Chase CEO Jamie Dimon and Blackrock CEO Larry Fink.

On the bankers list, only one other CEO of a top U.S. bank made it: John Stumpf, of Wells Fargo. He is joined, notably by two high-ranking women, including the perennially powerful Ruth Porat, CFO of Morgan Stanley, who made the list while her boss, CEO James Gormsan, did not. Isabelle Ealet co-head of securities at Goldman Sachs, said to be the highest-ranking female executive at the bank, also graced the list. The CEOs of bank of America and Citigroup were left out.

On the buyside, Mary Erdoes CEO JPMorgan Asset Management, joined the likes of Fink, Carl Icahn, Leon Black of Apollo, Daniel Loeb, and Stephen Schwarzman. KKR was not represented in this group.

All in all, ranking power brokers is a fun parlor game that in the end doesn't count for much.

For more:
- here's the article

Read more about: CEO, executives
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By Jim Kim

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4. World's largest bond funds fund keeps shrinking

What to do when the head of quiet fund of funds is arrested in a prostitution scandal?

That unfortunate scenario is playing out in real life at Common Sense Investment Management, a $2.9 billion fund of funds based in Oregon. James Bisenius, the CEO, was arrested along with eight other men on charges of patronizing prostitutes as part of a local police sting operation.

The firm decided that for now, the best course of action would be to let him work out his issues on his own. "Going forward, the firm's partners have decided that Jim will remain in his role as Chief Executive Officer and Chief Investment Officer and he will deal with this recent event as the personal matter that it is," the company said in a statement. It also said that Bisenius's "recent personal transgressions bear no reflection on this outstanding team of professionals or the quality of portfolio management."

However, at a time when funds of hedge funds are struggling, this sort of negative publicity is hardly welcome. If the fund is struggling from a performance perspective, this sort of personal blight might be enough to tip a limited partner toward redemption. On the other hand, if the performance has been solid, people will be in a more forgiving mood.

The Oklahoma Municipal Employees Retirement fund "is aware of the situation." But it says its decision to redeem $30 million was made earlier and is "unrelated to the arrest," according to CNBC.

In this case, there may be a price to pay on the domestic front, which could affect business. Janet Bisenius, the wife of James, has majority control of Common Sense.

For more:
- here's a CNBC article

Read more about: CEO
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By Jim Kim

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5. High praise for Wells Fargo

So is there a great rotation underway?

That could be debated every which way. But for the top retail bond funds, it sure feels like a rotation, a powerful one at that. All the big bond mutual funds, the likes of the Pimco Total Return Fund and the Doubleline Total Return Bond fund, have been suffering massive redemptions as of late. And with the market tumbling on rate concerns, these funds have been dealt a double-whammy.

Bloomberg notes that Pimco's $250 billion Total Return Fund has shed $41 billion, or 14 percent of its assets, in the past four months through losses and redemptions. The fund suffered $7.7 billion net redemptions in August, the fourth straight month of withdrawals and the second highest amount this year, according to Morningstar data.

The $37 billion DoubleLine Total Return Bond Fund suffered its third straight month of redemptions in August, amounting to $1.1 billion. Since April 30, the fund has lost about 10 percent of its assets via losses and redemptions. Other bond funds have similarly suffered.
At times like this, top-shelf portfolio managers will prove their worth. They are all pondering steps to keep their losses at a minimum. It's been a long time since bond fund investors have been stuck with losses. But that appears likely this year, much to the delight of stock funds and even commodity funds.

So how high do you think yields will rise this year?

For more:
- here's the article

Read more about: Bond Funds, Great Rotation
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By Jim Kim

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