>> i love that. >> it doesn't really matter if it's called flappy bird. he can call it flippy bird. >> it has the same connotation, john. >> that he's a fun connotation, isn't it? >> has anybody here played it? >> i have not. i just got a cell phone three years ago. i'm making progress. >> gieuys, thank you all very much. time for "fast money." that does it for us on the closing bell. over to vegas with melissa lee and the gang. >> announcer: before leaving las vegas the "fast money" team has one more lauhour of trading ide. and market moving news. >> we see great value but not a bubble. >> announcer: all these vip parties haven't left our crew hungover.

on "fast money" we know how to rally. tonight the fast team goes the distance with more heavy weight guests. hedge fund giant and vanity fair's bethany maclean. >> the viewers got a taste of what actually happened here at salt. >> announcer: live, this is "fast money." there we are, we're back. in las vegas. tonight's top story. the tepper tantrum. made here at the salt conference by hedge fund manager by tepper. he made more money than any hedge fund manager on the street and he cautioned that now is the time to be getting nervous and not to be quote, "so fricking long." he had cut his equity expose chur --

exposure six months ago. google and priceline. our traders. guy, don and pete. pete, what did you make of the move? >> because of his commentary, people see his success and after they have seen the success, the selling pressure seemed to come into the marketplace. it was broad-based selloff today. the one thing that stuck out to me was the fact we never got the panic in the volatility index. we were down over 24 points in the s&p. you would expect to see a gap higher in the volatility index. we never got any of that. so it tells me right now we're still many the range and can't get through 1,900. we have a hard time sustaining anything above 1,900. tepper didn't say everybody get out. he said i'm taking some off. this is a move at the top end of the range. >> he was clear yesterday, he was saying i'm not saying go

short, i'm just saying don't be as long right now. we did see the ten year yield reaching the lowest. >> he didn't say he was coming. but he said nobody ever lived through it. he didn't know how the market was going to react to that. that's why you don't want to be long. he mentioned the market is okay, not great. the market took that as deflation. >> there's a time to make money and not to lose money. i think i i'm paraphrasing i'm sure. this bond market move has been happening long before that he made any of those comments. pete and i can disagree to the extent the bond market is important. i think it's important because i still think if the growth in the economy was there, the s&p suggests rates much higher than they are. to me, there's still some disconnect.

pete's point, about the market being great, spot on. i don't think there's anything to be concerned about yet. but maybe today is the first day of something different this time. >> as far as the stocks he mentioned to me, google, priceline. google we get. priceline still trades at -- >> i don't think it's an extreme level. a great momentum stock. but i don't see it when you're talking about the teslas of the world. netflix. amazon. different animal all together. he, leon cooper and a lot of the folks have had an impact at this conference. >> i think this underscores the fact he pointed out two technology stocks and if you're really nervous about the markets, you wouldn't be in these tech names. these aren't the names you point to necessarily. >> you wouldn't be in many

stocks. particularly not priceline. if you're worried we're going to have some kind of recession or econom economic slowdown, you would not be in priceline at all. >> priceline is not an expensive stock. i have it 18, 19 times forward earnings. their growth rate suggests this stock is not expensive at all. it's also got caught up in some of the other high fliers. i don't think it should have been but it was. i think you can make an argument, it's not a value stock but not a high flier stock either. >> it's got the growth. when they have the growth along with the valuation, priceline is interesting. >> in terms of gold, you made a move in gold today which may not seem to make sense when you take a look at what the markets are

doing. >> you would have thought gold would have been up today and it wasn't. deflation is the concern. you don't want to be in gold if the market is going to think deflation is the problem. i sold out of all my gold today and 2/3 of my market position, my long bonds. as i walk around here, everybody is starting to understand why the bond market has been doing this. this is something guy adami has been talking about. everybody started to talk about the move in the bond market. starting to understand it. that's the time to sale and take profits. that's what i did. >> i think this is part of a big we are picture. i've been in the camp that ten year rates are going to go down to closer to 2% than 3%. i still think we have a long way to go. as a trade, today is as good a day in a while. >> dominick chu has got the details back at headquarters. >> here are the interesting

headlines. amidst all the talk about facebook, twitter, tepper has taken a dip into facebook. he's bought 479,000 shares as of the end of last quarter. a new stake in facebook. 479,000 shares. also online travel company expedia. taking a near 700,000 share stake. he sold completely out of emc and verizon. selling completely out of those. notable additions to tepper's portfolio, he's added to positions in disney, comcast, which is the parent company of this network and cbs. so on the entertainment you're seeing a boost in stakes. selling a selling -- entertainment a theme here. i want to note one thing,

paulson has just come across as well. tepper has sold out of his 400,000 shares of stake in verizon. paul son took a new 8.7 million share stake. that's near $420 million in terms of the new stake for paul son. back over to you guys. >> verizon dividend yield, 4.4%. which is great compared to what the ten year yield is yielding. >> it is. a lot of event driven. you have a lot of deals going on for verizon. it may seem like a big stake. we don't know how it's hedge or the other side of the trade is. >> going back to tepper, this fits into the category of the stocks that have been beaten down. >> i was very patient for a long time. i jumped into the stock as well. when you look at the level, it would be interesting to see where tepper was able to position himself in the stock. it says what zuckerberg has been

able to do and facebook has been able to do as far as getting some of that money. the interesting one was adding to disney. this is a name that's been nothing but upside. these another company able to exploit as much as they can because of their power right now because of the content they have got. >> we should note again just as a reminder these are all moves in the past. >> we don't know when he got in. i would manual he has ridden the disney train. >> expedia, priceline, you starting to see the themes played back. you just sort of close your eyes and buy it. expedia is interesting as well. verizon and the run for yield, somewhere in there and i'm not saying you do this, but it suggests the fact the stock doesn't go down. >> there might be a reason why the yield is high. >> to compare treasury yields and dividend yields, i think is

a full -- >> jcpenney as much as 27% jump. the short certainly feeling the pain on this one. let's bring in the ceo of the ad adviser group. do you think this will be sustainable? >> they're getting the private brands back in stock. they brought promotions back. traffic is picking up. they had the first positive traffic count in the month of april. first time in the last 30 months. we liked jcpenney before. we like it now. all the checks we have been doing show an improved reception to the product. >> if you had a specific and definite bucket for retail in your portfolio and wanted to add jcpenney, what would you kick out? >> if i had to kick out something else and put in jcpenney, i think overall i would kick out some of the team

retailers. >> dana, we're going to leave it there. telsey adviser group. >> she's been great in the space. they bought themselves some time with this credit facility. it's great. we're still talking about somewhat disastrous numbers. this is a 30% shortage for stock. you can see a continued rise. i would be in the camp to find a place to sell rather than to buy right here. >> coming up next, the hedge fund founder who oversaw the most successful fund of 2012 talks to "fast money." he did it all by betting big on some of the riskiest assets in the market. joining us live next. this just in. is activism replacing private equity? we'll tackle that question ahead when "fast money" returns. it steals your memories. your independence.

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vegas. he is considered one of the best morning minds of wall street. the most successful large hedge fund manager in the industry. the founder and managing partner of medicap management. i want to talk about the fund you have not yet launched which will invest in delinquent mortgage. how will that work and what does that say about your view of the housing market right now? >> the housing market has had two years of what has been solid performance. we have seen home prices rebound 25% from the lows. that actually has resulted in security valuations in distressed mortgages going up significantly. there is a pocket of risk out there. in particular, the loans which are nonperforming. these are loans where the homeowners are not paying mortgages and the amount outstanding is large. if you look at what the bank own, over $200 billion and what

the government owns through hud. and what fan any may and freddie mac own. you're talking about $600 billion. outstanding. which none of these owners want to have these part of their core strategy. the banks are going to be shedding these assets and it's not a core asset for them. it's one of the few areas in the marketplace where security valuations have gone up a lot and loan valuations are still depressed inspite having gone up. buying loans at a price where you buy them for what the underlying real estate is worth to the discount to the underlying real estate and working with the homeowner, cutting the balance, the interest rate to a level such that they can afford the home. >> this is not to say the housing market is weakening.

the worst case scenario is you'll have to sell the home. you're betting the value of the home will continue higher or at least maintain its value? >> i think that would certainly be a tail wind if home prices continue to go up and even at half the pace that they have gone up over the last two years. that would be a big benefit to the strategy. where current market valuations are, you can buy the loans between 60% to 70% of what the loan is worth. >> in that pocket. >> exactly. >> this is a crowded strategy. it seems like a lot of funds are starting up, ellington, one williams street and lone star, they're already in the space. >> you're right. if you see the size of the opportunity. there's $600 billion outstanding and the if you discount that fan any or fr-- fanny or freddy wou

sell the loans. the total capital raise for the strategy is maybe $10 billion, maybe $15 billion. it is something we think as it picks up momentum more capital needs to be raised. >> i want to talk about your rising interest rate fund. we have been talking how interest rates have remained shockingly low despite what every person has been saying on the street. it's been opened up for a year and doing well. what are you investing in that is doing well when the bond market yields are extremely low? >> well, the thing about interest rates is they're very low and you're right, they have -- i think most economists were calling on rates to go up. it's a question of how much. if you look at the ten year treasury yields, it's down 50 points. the thing about having a strategy that benefit from rising rates is you need to

short bonds and shorting bonds is expensive because the yield curve is steep. it entails negative carry. while you wait for rates to go up, and it's hard to tell, they may not go up for six months or two or three years, and while your waiting, even if you're right, the part comes with negative carry. so you may be right eventually but may make no money because you lose so much while waiting for rates to go up. >> what are you doing? >> there are securities that benefit from rising rates but also have high yields. >> i see. >> so we -- the strategy entails looking at the securities and combining them but buying put options on the bond market. if rates don't go up, you lose money on your put options. there's time to kill. but producing high enough returns, you're basically left with a strategy that is a positive carry. it's not large. the numbers we looked at for the strategy. you make maybe 3.2%, 4%.

that's a positive number. >> pete, i'm curious in terms of using the put options, that's his area of expertise, have you suspected that's going on? >> i was always curious. the question for you is the premium high? is that a high premium you're having to pay or something palatable for you guys? >> volatility has come down substantially this years. requiring buying puts long-dated. you would think rates go up. if you look at where ten year yields were. it seems reasonable. housing is a lot stronger.

employment is better. yields should go up. the bond market is very efficient and there are many force that is work in there. so you want to give yourself some room and belong puts. what entails is the significant time. and what you need is a strategy that produces enough currency to offset that if rates don't go off for some time. >> thanks so much for joining us. coming up next on "fast," it is a question making waves along the vegas strip. is private equity being replaced by activism? we'll here from the vice chairman of ramius. >> and the comments you need to hear from the master himself. pack in two. bpack in two. when does your work end?

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point llc. in the filing as of the end of last quarter. adding positions, new positions in american airlines, also verizon. another person getting to verizon. also an hieser bush and citigroup as well. interestingly enough. there have been 20 plus new positions. so a lot of new positions here. they have sold completely out of their apple stock as well as yahoo and activision. he was a big activist on yahoo's stock for quite some time. we wanted to put out third point added citi at the same time that george sorus was dissolving their entire stakes. in jpmorgan, citigroup and bank of america. at the same time that dan loeb

is getting a new position in citigroup. back over to you. >> thanks. an airline adding a new position when at a time they rate new highs. >> we talked about it. pete's been on it as well. airlines continue to be impervious to this. you basically cut the amount of airlines in half. and these guys have everything going for them. delta is my favorite play. and i think citigroup is going to work for them as well. >> let's go back to the markets here. and the tepper tantrum that helped push stocks to their worst drop. joining us now is jake. great to have you here. what's your take on this. tepper was clear, don't go short, the markets, just don't be as long. he's pulled back from 100% to

60%. >> tepper is wealthier than i am so i'm not about to argue with him. but i don't agree. you still have a lot of support coming into the equity markets. i don't know where david plans to put this capital. if you look at credit spreads, they're at all time tights. i guess i would have to ask him where would you put 40% of the capital. >> in terms of the areas of the market, where would they be by sector or asset class. >> we still find value in credit and equities. we have certain strategies that we think are poised to do well regardless of the overall environment like health care royalties where you're buying revenue streams from inventors. >> you and i were on a panel yesterday and discussed specifically activism. that falls in the winning

strategies. in the hedge fund world, it's been one of the top performers this year. in terms of what is driving activism, what is it replacing at this point? >> i believe it's replacing private equity. we have been involved with activism for 20 years and haven't seen this much demand for what we do in a lock pering of time. on the other side is private equity. unlocking shareholder value. when you look at activism, daily pricing and liquidity and you have less of a lockup. two years versus ten years. you have managers that are very skilled at using a power of the press, power of the pen, power of persuasion to get the same result as an equity manager and we think smart investors are starting to think about activism as a surrogate for private equity. >> here at the conference this has been a major theme. let's bring in contributing editor for more on this.

when jake made that statement yesterday, a lot of people really sort of latched on to it. what do you make of that and what is driving here? it is a lot easier to be an activist investor than private equity investor. >> i guess there has been this interesting merger of the worlds of private equity and hedge funds for a long time. it seems like a natural merger of two world. i guess i would just also add there are very different kinds of activists and investors. it's interesting to think of the span of that. from microsoft stock, quietly, behind the scenes, to a big ackman. very different approaches. >> where do you see -- when you take a look at the different sectors where is activism the most active? i would say in the small to mid cap sector.

companies still have a lot of cash on the balance sheet. given the capital they have to put to work, they can be far more effective in owning fairly significant position of those companies and having influence with the board and the management. >> so bethany, activism has been a long for a long time. but the 24/7 news flow, activism is pushed in what i believe is a gray area using a lot of these medias as a way to sort of promote the positions they're in. are we gets into areas a little dangerous do you think? >> i think of it two ways. one way, yes. i have the instinct of wait. on the flip side, it's not as if mutual fund managers haven't been out there promoting for ages.

so this is just the new version of that. i'm not sure it's really any different. it feels different but i'm not sure it is. >> but this does feel sort of the rise of it. it's not surprising. maybe that's one of the reasons why you think this will continue. there's this frenzy where an activist can use the media and other platforms that exist today that didn't exist before. >> i think investors have very little tolerance for underperformance at the company level. we can't forget underlying activism which is giving boards, management, public accounting firms a tremendous amount of pressure to do the right thing by investors. activism is leveraging is what actually was this place back in 2002. >> we have got to leave it there. thank you very much for your time. appreciate it. jcpenney soaring after posting a much smaller than expected loss. the latest headlines from ceo right after this break. later on, gm announcing another

recall, bringing the grand total to 11 million vehicles worldwide. we'll talk to a hedge fund heavy hitter and find out how he's playing the latest headlines later in the show. stay tuned. at delta we're investing billions of dollars,

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. welcome back to "fast money" live from las vegas. jcpenney spiking in the after hour's session. let's head over to the earnings call wrapping up. >> the earnings and can call itself, on the conference call ceo said traffic positive in april for the first time in 30 months. jcpenney had said its search for successor is i don't know goion. listen to what he had so say. >> we're all together with this. and the team is very aligned into executing the strategy. so no major changes on the

horizon. >> that seems to suggest a shift in planning that perhaps he's not going anywhere any time soon. now on the issue of owner relationships, he said we haven't had any major tension with our mall landlords. i think we're a preferred tenant. a lot of positive news coming out of the jcpenney call. something i haven't been able to say in a while. back to you. >> if you had to have jcpenney in the portfolio, she would sell some of the teen retailers. >> i would actually be selling jcpenney. he's caught our eyes and now the question is is the patient going to be able to walk after this. that's really the hard thing to do. >> very individual. >> time now for pops and drops. big movers of the day. we kick it off with a pop for rackspace up 7%. >> a lot of analysts got on the back of this after the quarter they reported.

you can't be short. i think it has room to run. >> got a pop for cisco up 6%. >> they were strong across geographies and different areas of the business. when you look at what it did today, really impressive day. >> down 2% for blackstone. >> stock was down 2% and probably got caught up in the market as opposed to the deal. if you like it, buy it. >> worked check out the casino. craps or something later on. >> i played last night. >> i know you did. some unusual activity here. we're talking about what's going on in the options market. >> red hat, today the tape was terrible. we rallied off that a bit. red hat hit us with some very large call buying. they were buying them for 80 cents. over 9,000 looking for upside.

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. shares of weight watchers down nearly 30% this year. predicted to climb by the end of 2014. what did you see? >> quite unusual put activity. the top 13 were all puts. one of the trades we saw was the july 20 puts. paying about $1 for those. suggests just a couple months away down more than 10%. what's interesting is the longer dated leaps. there's the 17.5 strike puts were trading for $4. either way, i look at that and i see people who are thinking this company could be toast. >> wow.

yeah. >> we got declining earnings. not a good story. >> check out the website. optionsaction.cnbc.com. now sounding the alarm on the half time report. take a listen. >> we're getting concerned that a crackdown is looming. we would no longer be long. in fact, i am worried that the u.s. operators are facing risk from the corruption crackdown that she is doing. >> tim seymour, joining us. you're in. >> yeah. it's a name we have been on the short side. what mr. chanos is saying, you have to be clear here. paypal, alipay, they're concerned to launder money. they're not going after u.s.

firms. i think this is stretching the news. >> if they crack that down, that will impact the casinos? >> it will. earnings that have a tough time living up to valuations high. when it was 60% growth at 40 times multiple. that made sense. now it has gone from 45 down to 32. i think around 30 you start to cover the stock. it's about valuation here. you're not getting 60% growth. and i think people expected the same kind of growth in the valuations that are there. >> in terms of china, we have heard this also from roubini who mentioned it is one of the political risks. >> everybody knows there is a housing bubble overcapacity in china. they're trying to prick that bubble. it would be incredible if they're able to do that. but nobody has been able to prick a bubble without having a

major problem. and you are seeing that. you are seeing a lot of it from places. that's what people are concerned about. >> i think china is in a position to manage their credit issues better than just about any place because of the control they have. they have 6 trillion because hard currencies. i think if you look at the chinese data, and citibank does a great chart on this, we're at low, low points, all-time lows in terms of the earnings versus the expectations meaning i think people have priced in the worst. look at the internet sector. 10 cents. great earning in the last couple of days. this is very different than the u.s. technology sector. investors are getting sequential top line growth. it's interesting. and those are companies you should look at. >> see you at the black jack table. >> absolutely. >> gm issuing more recalls. coming up, we talk to hedge fund

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i think guy adami is in one of those shots. berkshire hathaway making new moves in gm. dom. >> melissa, we have a big move in gm, berkshire hathaway has been a shareholder. but they're reducing the stake to about 10 million shares. going to around 30 million shares. a reduction in gm for warren buffett's berkshire hathaway. berkshire hathaway is an existing shareholder in walmart. we have been talking about wall matter and the retailers all day. they have boosted their stake by about 8.6 million shares. a nice big move.

8.6 million shares in addition to what they own. walmart. a boost in the shares. gm, a reduction. those are the headlines at this time. back over to you guys. >> thanks so much. on gm let's bring in a hedge fund heavyweight. don drapkin along with sky rich founder. great to have you with us onset. in terms of general motors it seems likes it's getting worse. another recall. 130,000 more chevy malibu madles today. the total number recalled 11 million to date. you have taken down your position in gm. >> we didn't take it down. we sold our shares. we are bullish on gm, they're trading at 2.5 times. $28 billion worth of cash on their balance sheet. they took 300 some odd million

dollar charge for the last recall. this one is about $200 million. but they have $28 billion. they have new models. their asps are high. china is on. europe is still a possibility. ally bank is on upswing. that would give you $40 stock. i am no warren buffett, he still owns 30 million shares. >> yes. >> as far as the recalls are concerned, we believe that the gm management is scrubbing the place clean. they have gotten religion and trying to get it out all. this is the much smaller one. even in bankruptcy, it's been -- they didn't have to but they're paying anyway. >> with the stock replacement strategy, am i right to assume you made a profit in gm stock and therefore, you wanted to

cash that in and define your risk? >> then we bought below the offering price. i think which was 31 and it got down from that and we sold 34. and option positions to keep some of our position. >> i think it would have been more meaningful to you eliminate the entire position. he could be trimming back something. i agree with don on this one, a low pe stock. management team is accepting accountability for what happened. they're redirecting the company. dividend increases. and the cars are a lot better. i know that pete is going to be in a corvette sometime soon. >> yeah. >> do i look like a corvette guy? >> i think. >> the price that is donald and i have gone -- >> they can buy back the canadians. they can buy back the unions.

they have got $3 billion worth of 9% coming to them at the end of the year. which is going to give a kickup on that. we're still bullish on it. >> the big message from salt has been the market is a little -- >> rocky. >> the growth is slower than we expected. david tepper said yesterday maybe the ecb is not going to move in june. he thinks that's a problem. this is a good defensive name in a situation we're in. >> obviously you have been active in other companies in which you hold stakes. would you call mary berra and say this is what you should do at this point? >> no. >> why not? you think they have got it under control. >> we are in the middle of a proxy campaign. don't have $55 billion hanging around or even $6 billion to buy a 10% piece. and i think they're doing a good job. activism is about getting management to be responsive and doing the right thing and i'm

sure she didn't know about the recall issue before she got there. she's acted decisively about it and their going a good job. what's my platform going to be? you should do what you're doing? if i want to own the stock, i could just buy the stock. >> have you been seeing activity on the call line? >> we had been. but we haven't seen as much of that upside that you're talking about. it's interesting you flipped out of the stock. did it have anything to do with dividend and it might take a while before it's recaptured at a higher level? >> we took it because sometimes when we have very quick 10% or 15% popup. we'll take money off the table. remember, we're emerging. we're not scar ramucci here. i think anthony is 100% right. this is a good stock for this

market. >> guys, good to see you. don drapkin. anthony, congratulations, you can rest tonight. >> not yet. we got lenny kravitz tonight. >> investigating gmt m airs tund night 10:00 p.m. on here on cnbc. coming up next, we talked to entrepreneur lauren bush about why she's here at the salt conference. when we come back. stay tuned. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes

where you can. so you can invest in the life that you want today. tap into the full power of your fidelity greenline. call or come in today for a free one-on-one review.

. our next guest here at salt is here to show investors another way to invest in the future. cofounder and ceo, lauren bush. thank you. giving back has been talked about a lot of salt. you're here why? >> to talk about my social business feed. i founded feed. essentially a consumer goods

company, we have been able to donate over 75 million males. >> 75 million meals. >> yeah. i'm proud of that. there's a bigger movement at play. wanting to give back through consumer goods and purchases. so it's a really exciting movement. you know, proud that feed was at the forefront of that. >> you've got pretty cool products. you brought a bag along. >> show and tell. >> guy and brian will have to fight for it. >> keep a tight lid on that because he will take it. >> grasp. exactly. >> it's feed kenya and when sold it feeds two children for a year. very tangible for the consumer. >> how much? >> retails for $250. >> how much goes to feeding children? >> oh, gosh. now you put me on the spot. >> a percentage. >> 10%. >> if you're not into bag, there

are t-shirts and things you can buy. >> yes. there are other accessories as well. >> where can folks buy these products? online? >> various stores around the country but the best would be our website so feedprojects.com. >> i'm going to tweet that out. the power of social media at work at salt. >> absolutely. lauren, thanks for joining us. of feed projects. sadly our time in vegas is coming to a close. final trade. guy. >> i was talking to pete and he saw interesting things in good year tires. so good year tire. >> brian. >> well the theme has been deflation. if you have to think about that, think about what other asset classes have not reacted. i think u.s. dollar yen hasn't reacted to that. you want to sell some toyota here. i think the yen gets stronger. sell toyota. >> it's been a terrific time at salt, right guy? >> a great time. who is playing?

lenny somebody. >> lenny kravitz. why don't you google him on your google machine. >> what does he play, the via lynn? >> it's been great here at salt. i'm melissa lee. that does it for us. catch my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. mad money starts now. >> hey, i'm cramer. welcome to mad money. welcome to cramerica. other people want to make friends. i'm just trying to make you money. my job is not just to entertain but coach and teach. me call at 1-800-743-cnbc or tweet me at jim