a lift recent fl. >> likes the u.s. economy and value traditionally and he gets that with banks with u.s. banks on pe basis relevant tough to the s&p 500. >> yes. that does it for "closing bell." it's been a roller coaster ride morgan thanks for joining us >> great to be here thank you. >> and mike. we'll be back tomorrow tune in then and stay tuned now for "fast money. "fast money" starts right now live from the nasdaq market site over looking noerkz's time jaurs. traders are broien kelly karen finerman, guy adami and a special addition top strategist and "fast money" friend tony dividerof cannacord. bitcoin is crashing. in fact the cryptouniverse is tanking we tell you what's going on how bad the selling gets. plus the countdown on only 40 days until christmas and something happened in the retail space. we start off a wild tai on wall

street the dow singing 50 oh points during the day after being up more than 200 falling 300. the dow sold off in the close ending down about 200 points financial sector leading the declines and it's been a bank bloodbath and just the past week goldman sachs, the biggest looser here down 13% if he followed by city group. jp morgan. all under pressure as well what is wrong with the banks is the bank trade left for dead? guy? >> first of all, tony divider gets a special, single box. >> my family would never think i'm special. >> i've been here 36 years i am a little jelly that's what you say. i tried to make a cogent, intelligent whatever word for being long banks for a long time a couple weeks ago i said sometimes you are wrng and the banks prove that day after day. each of the banks you mentioned i can make an excuse for

goldman sachs feels like goldman sachs specifics. i think the malaysia situation is bigger than the mechanic gives credit for and i think you see ramifications for you. and they are trying to change business and it's not easy to turn it around jp morgan caught up in the damage not nearly as bad as the rest because they are best in breed. and citi bank. tappingable bank at citi bank give are or take 62.5 or of $3 trading 1.1 the 5 times tangible book why? i happen to think it's for european exposures and maybe the real problem and the systemic risk for our banks comes from europe. >> look at all the banks, they haven't performed in the best environments now you get an environment that's not as good and auchlds everything is sold off what i find interesting is people worried about a flat yield curve. since august that yield curve

sfeep steepened a bit. the bank does well there they haven't the other thing to be concerned about is high yield bonds or investment grade bonds, the credit quality in knows are under question i'm not saying it's falling apart process. but as traders you look appear say you know, maybe the bank's balance sheets aren't as strong as two or three months ago therefore and they haven't worked in a greater environment. now maybe i don't want to be in them. >> things could change with a new congress what sparked the sell off is what max even waters said earlier. a democrat poised to tank take over the house financials services committee listen to what she said. >> make no mistake, come january in this committee the days of in committee weakening regulations and putting our economy once again at risk of another financial crisis will come to an end. >> will come to an end >> ooh. >> deregulation was a big tailwind for the banks. >> right. >> and now. >> right. >> deregulation was a big tailwind i don't think -- i mean the

pendulum has swung way too far now singing back the other way towards less regulation. i don't think we got to the place of way too loosely regulated we weren't remotely closely to that. i don't love that rhetoric for the banks that might have caused the banks to sell off today. the other part being stocks. a terrible market for stocks like guy, they each have their own story why they're not good goemd on the side. citi we have foreign exposure. you think what about bank of america. that's very u.s., a bank. >> u.s. economy is strong supposedly. >> all of that bank of america somewhat disappointing rallied in the last couple election i'm long jp morgan. i i don't know warren buff set enough taking a stake is enough to move it. >> earlier up until today, mel, the banks were acting better off the low. the home builders were acting a

lot better off the low the interest rate sensitive areas were acting better off the low. i would put the entire move today to the washington comment. what happens in a market with no structure. you got algorithms, computerized traders no specialists or market makersers. you go into a vacuum and a comment out of no where when there is no edge and re-test you get a whooch and that is a whoosh as a real quickly, the senior loan officer surveyed the fed today that was related last night showed banks eased lending standards in the end of the month. think about that they eased lending standards and they said that with a flat yield curve it hasn't impacted their lending standards. if it inconverts it will dramatic che but the fed asked the question to the banks, does a flattening yield curve affect lending standards? the answer was no. >> what about late in the cycle lending standards? i mean it begs the question are

they easing too late. >> they've been easy that's the thing the lending standards there's been nothing wrong with credit and general. >> it's been great. >> credit has been great the fundamental back drop, you shake your head saying, what sns and they come out with lending stray which looked good. that doesn't mean the stocks go up when you're in a market swoon. but i think today was a lot more about that comment out of rep waters than anything zbleels as you said a comment out of no where in the sense that we heard it today for the first time but not out of no where in the sense that once election day happened, and we knew max even waters was cc to take over the chair of the house financials services committee we knew this was the statement she would make regarding regulation in the banks. yet we have a reaction still and when she actually does something what the reaction will be. >> maybe that's the time to get in the banks have been going down before we knew max even waters was taking a power position. they've been going now by and large for the last six months it hasn't been particularly good

environment. again, you have to ask yourself, like the autos we had and the conversation the if banks can't rally in the environment we find ourselves in the last year when everything has gone their way, except for the market over the last month or so, when are they going to rally? so my earlier point, you have to- at a certain point you have to say i'm wrong and take a fresh look and saying maybe banks shouldn't be trading at that multiple and maybe there is something structurally wrong with the secretarier >> are you at that point, close to that point, mentally thinks. >> no, they tried the change the sector with no history and no feeling like this is frustrating for six months or a year i'd want to buy enemy right here i really would i don't know what is between that comment her saying that and the point you brought up to some sort of regulatory change. a lot has to happen between that comment and -- i don't know that we get there but, you know, clearly since part of the reason to own the banks was a new regulatory

regime more friendly to the banks, this is not good. but i feel the valuations are attractive. >> here is the thing we had the market rallied after the election because we thought nothingway are would get undone. it's kind of a little crazy to toney's point to think one comment today all of a sudden everybody thinks now all kinds of regulations i'm not if that camp i'm in guy's camp where they had massive tail nds now the tail nds are going away. at the very least or lighter than they were before. how are they performing in this environment? i think that's why people are selling them. >> it can't be a sail both ways. you can't have a sail because the regulately environment is too good and can't get worse and then you can't are a sail because it's worse and can't get better it's been wrong i mean it's been a electronic wrong trade iech been on it it's wrong. can you compound a mistake by making it two wrong wrongs to exactly karen's point, if you can't are came in cold here

would you buy the banks, yield curve is steepening and a little bit off the low. it's likely the fed on the back of home building and some other issues and inflation break evens is softening in december can you imagine you walk into the end of november, you get aed trade resolution of some sort shake hands and hug it out. >> right. >> and then the financials get -- and then you get a lift because fed powell says yes raising rates. >> you get a lift to every stock in the market. i'm not convinced my opinion doesn't mean anything here amongst the traders i don't know if the financials have the torque in that scenario. >> they. >> it won't be the fangs. >> the downside either. >> they did off the low process. until today you were getting a lift in the interest sensitive stocks the 22-year note yield has been dropping more than the 10-year which to me is indication that inflation break evens are coming down. >> let's think of the best case scenario that could happen in the next month or so, right? there is a trade resolves.

>> trade resolution. >> maybe powell bakts he is more dovish or something like that. what rips the most >> technology in my opinion technology represents. not to say that banks won't rally. but if you ask, technology rallies with a two beta as opposed to one beta for the banks. >> i would say multinational or em dollars are coming down that's been killed. that's the ep i center of this. >> do you want to own banks. >> you got to buy the interest sensitive payments names the only thing out of the out of the malotherwise is softening from powell. >> if there is one chart, one chart that you have to see this week tony says it's this one it could be a sign we are in the midst of hitting the market bottom tony head over to the plasma appear break it down. >> thanks, mel the one thing in late september when we put out a piece called the market is ripe for volatility it was based on you had historically low volatility and historically high enthusiasm

and optimism in the market that's ripe for volatility and man did we get it. we track volatility on the 10-week rate of change not just the vicks but the 0-week rate of change thousand tracked the the last ten yes on that vicks the cbo volatility index when it gets over 90 that's what each arrow signifies you get flew a market roe. it's not right away. i think what you have to notice on all the points that you reet test the low make a climatic low wrp it spikes off a low level pan make a climatic low. we call it the slop, pop and drop you have a sloppy bottom lift like you did the 7% in seven days and retifft the low but the first sign over the last few years that you've been in that is in 10-week rate of change on the vix when it hits 90 which it did in october >> all right tony why don't you come -- maybe not -- okay fine come on over just joking.

>> that was close. >> that was close. >> that was half. >> kind of wrong to have an empty err chair they desk. >> what you did you like or not like about tony's. >> if you talk about volatility peaking, one thing the federal reserve did at the lows was remove volatility. now they are put going back in if we get some kind of i'll call it dovish rate hike in december. fed goes raises interest rates and then at the meeting has some dovish language, if you get that, that would signal that perhaps the volatility there is taking a little of the roll tilt out of the market. again, i think after you had the big downturn there is a tradeable opportunity here you start to see stuff like tony says, volatility peaking, the dollar coming in those are signs you want to buy again. >> all signs are inflation is on track. healthy at this point. fed chair powell is speaking tonight. >> right. >> a q and a session he could

talk and if he indicates the path is still on. >> i had eye eye i'd say good for him i'm in the minority camp jim cramer has different views >> i'm with you, know. >> i'm glad you're with me because i think they are doing the right thing. if our economy which is the greatest economy in the history of the polk not my words, the president's can't withstand us getting to a normalized rate maybe it's not as strong as we think. chairman powell is doing everything right his purview should not be making the united states stock market go higher. >> the sysco rally amp the earnings report. we hear from the ceo about the quarter. plus cryptokbugs the expire space under heavy selling pressure after a cryptocivil wars takes a turn for the worse. we explain what is going on. and it's the make or break moment for the retail rally with two names reporting earnings tomorrow ahead of the christmas crush. we tell you. we are back from times squarine

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reversal on the back of earnings today despite beating expectations shares closing down 7% or more after concerning compensates sent the stock reeling as the holiday are close 40 days away from christmas, guy, 40 days away. can you believe it could macy's be signaling a warning sign for retail. >> what a frustrating day for macy strong revenue growth that's good you like that good to see. uncertainty around gross margins. this was the crux of the issue the gross margins, 44.3% even with revenue dwr growth that's a problem because you want to see if they sell at full price which they seem to do better at. gross margins include delivery costs the. all of the online expansion has delivery costs with it there was a lot of uncertainty if they are doing well but can't

improve row gross margins what does that means if time are tougher. puts and takes dollar not so good putting that together. and then confusion when i read the transcript of the conference call it sounded a bit different nan the call itself. >> when you listened to the call when i listened to the call and read the transcript the transcript i saw said something about we'll see margin impact. and i didn't hear that clearly on the call. so maybe we'll see some margin improvement, not a huge amount though all that together i think the response in the stock was really way beyond. >> um-hum. >> what they reported. way beyond. >> 40 days until christmas, guy. >> counting down. >> 40 days until christmas. >> the christmas -- the holiday christmas season holiday season, when the calendar says december with a d then we can have the conversation we're still in november. we haven't made it to gobble gobble turkey day. >> that's one week away. >> yes. >> until gobble gobble day. >> it' away next

thursday after hump day. how was your turkey day? let's tone it down because you start by the way in june with the holiday season star. and that really. >> i-you. >> i-me. >> which is why i did it. >> with an i. >> did you put up the lights. >> let's talk about the retailers. >> we had a.m. li apple on fourth where home depot on fourth quarter. >> going back for the consumer -- and tony, i can agree to disagree on this. i'm of the belief that a market selloff causes recession what does that mean? if 73% of the kpee is driven by the consumer as long as the market goes up whether justified or not they sell spend money see a selloff maybe they don't spend as much. the retailers the last couple weeks the reason they rallied is everybody got off sides in the long amazon trade, short retailer and getting out now that's why you saw macy's go

from 32 to 38 in a week. i thought it was unjustified what do they call the boorpd tony. >> smart board when you're there it's the plasma. >> when i'm there anything but we talked about jw nordstrom we power pitched and everybody hate to do and went up like a rocketship and sold off in summer as it should. the move recently is unjustified. people getting out of the short retailer trade against the amazon or get themselves equally off sides in the erpgs period. >> we are definitely going to agree to disagree. because you have never had a recession in the u.s. on a back of a market crack. market crack can happen because of credit. it can happen because of slow spending because of credit but never first had a market crash and then resfwleegs we're not talking about a recession. >> he said recession. >> quickly, i don't want to do

revisionist stuff. '08-'09 that was a mess. >> let's go with this. consumers are not supposed to do well and consumer stocks don't traditionally do well when interest rates are going up. so autos and home builds shouldn't be doing well over the past year and a half they have speerds of spikes but ultimately give it up because it's more expense toef buy stuff. >> we'll get- retail tomorrow we get a couple more pieces of the puzzle nordstroms, wal-mart that should give us a broad spectrum of what's going on. you see those two weakness then i call the holiday season concern for that even though it's not there yet we have another week there is a wednesday a hump day. >> hump day. >> and then to gobble gobble. >> gobble gobble day. >> and then it's merry merry. >> yes. >> just saying >> 40 days until christmas still ahead chesk out cisco soaring after the earning report we hear what the ceo tells wall street after the break

you're watching cnbc here is what else is coming up with "fast money." >> announcer: that's what bitcoin looked like today. and we tell you what's happening in the cryptouniverse causing major panic. plus it's hard out there for a hedge fund manager we will tell you why the smart money isn't looking so smart th yr,isea despite all the volatility much more "fast money" right after this >> announcer: this cnbc is sponsored by gold bond ultimate lotion, ultimate skin

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welcome back to "fast money. the cryptomarket is in meltdown mode bitcoin suddenly spiraling today, down more than 10% hitting lowest level in a year after a quiet few months of crypto the crypto-dollar. b.k. at the plasma telling us what is going on b.k. >> thanks, mel after a quiet period lowest volatility almost in bitcoin history. all of a sudden today things

explode. what happened? bitcoin cash, the one that forked off of bitcoin last year is doing a hard fork what's a hard fork it's a software upgrade that's the easiest way to think about it when do you a software upgrade everybody agrees but this this particular case everybody is not growing about what that software upgrade should be. so we have ourselves a cryptocivil war is what they call it here and that has people in the market concerned so what happened today people are concerned that both bitcoin and bitcoin cash markets, their networks might slow down, might not work as well the software upgrade might not go through or if it does end with up chaos. everybody got concerned and that's what happened today the entire market fell in my view a short-term event. i think it's an opportunity. we did buying at my fund today let's look at the charts here. okay here is bitcoin. like i said, i mean there is nothing going on

i was falling asleep back then then all of a sudden today it falls apart. breaks through the year lows down to 5,500. you know what i thought was interesting. look at the other one. ethereum that's the next chart. here we go yes look at ethereum you know what's interesting with ethereum it was going sideways but today it had better performance than bitcoin outperformed bitcoin particularly on the up side. if you look to play this and don't understand the hard fork and if you don't understand a hard fork do not jump in right now. it's the deep end. but look at ethereum might be interesting that's something i bought today. >> beaks thank you come on over. our bitcoin bug is now new and improved because we don't just feature bit coin we rotate through the cryptocurrencies so you can keep track as we speak the coin share chief strategy officer for more on what is going on in the cryptouniverse.

>> thanks for being with us. >> not a great day maybe >> terrible day if you are long any of the cryptos bk says it's a short-term selling event. is there a catalyst to the up side after this. >> absolutely. i think what we see as b.k. pointed out we have other assets trading sideways there were a number of events that piled up that led to the mass release, selloff happened around10:00 a.m. eastern time. my view it's institutions can be funds deleveraging taking money off the table. any time there are forks things trade weird. people trying to take risk off the table. there is a new subsidiary bakd is going to lurj ofrpg institutional bitcoin to start. we sue saw this with the futures trading in november. those were catalysts leading to bitcoin's run to 20,000. then in january we see fidelity

cryptoarm operating. as they add clients maybe we will see the institutional money materialize. >> it doesn't sounds like you think bitcoin is in a financial crisis which is the wording of the notes i got. >> yes. >> what do you mean that bitcoin is in a financial crisis which sounds terrible. it sound like a catalyst. >> the bitcoin is the asset holding strength it's 50% marketdom nantz all other assets not bitcoin are in a liquidity crisis. what we see across the board asset prices down 75% or more some cases 95% over 80% of the markets had hess than $10 million in trading volume thinly traded no activity. i think we are at a point where projects are running out of money, they need to fire impose, they need to cut costs we are see consolidation and some of the assets will get marked to zero this is a speculators game at the long tail of the bubble

appear we see this coming to fruition now. >> i have a question we are whipping through the ones on the new ticker all the different names. are you saying the bigger ones let's call them the top ten in market cap i know that's a controversial metric are those marked to zero or are we talking about names we haven't heard about appear we don't talk about here. >> i think it's anyone's game. a lot of the top ten assets are early in the life cycle. as we talked about before during the.com bubble i went there but we saw companies in 2000 trading at 75% to the low of their all-time high and that persisted a lopping time and some of the companies went out of business i think what's the more interesting metric is during the.com boom companies created in the first six years were the ones that survived which to me indicate there is a first mover advantage in the cryptogame which is why we see bitcoin hitting the 10-year anniversarily performed well. >> how much volume it did

bitcoin trade versus the average of the last couple weeks. >> it's difficult to tell. there is publicly traded so liquidity on those markets was $6 billion but there is you otc volume not accounted for and a lot of reports documented the challenges of getting precise numbers making it difficult to look at day to day flow. it's a 2 x upstick not a lot of home but to bk.'s point on the plays that we had other people shorted the positions saw positions called and liquidate the. people look at the risk across the board in the portfolio appear want to make money off the table. another analog saw outflows first time in three years. we're the largest asset manager. that's an important sign as well that this isn't just a cryptothing. in the broader market there is uncertainty and fear. >> thank you so much meltdown

dumeres of coin shares. >> pay attention/8 in terms of the smart board plasma. >> that's another the civil war brewing. if you looked at the chart and we did nothing for so many months and then broke lower what would you say. >> one of the things i say all the time is the market doesn't i have g you a long time to sell the highs and in bitcoin's case the buy the lows the that it was hovered art around the 6500lechl here we are now maybe you are seeing the cap it laer to move to the soun downside if you back out i know you can't. but if you backed out the move to 7500 to 20,000 and eliminate that that and talk to about bitcoin you'd say this is a healthy correction in the market that's done well over the last couple years the perception is changed because of december. shares of syscosoaring about 5% in the after hours on the earning report

the stock has been getting hammered with the tech sector. we tell you what the ceo just said that could be a good sign plus hard out there for a hedge fund and the man running the illinois pension funds ss ayi told you so. he explains why hedge funds are bad for investors. much more "fast money" right after this

welcome back to "fast money. shares of sysco moving higher after reporting earnings let's get to josh in san francisco. >> on the sysco call ceo chuck

robins asked about the impact of tariffs on his business. take a listen. >> the tariffs were immaterial to us in q 1 the 10% tariffs we implementwood a month to go and didn't see impact but i can tell from you a demand perspective when we implemented the pricing changes we which we told you we would on the last call we saw absolutely no demand change from the -- dsh you know the week before and week after we did that. >> he also talked about the macroeconomy, mel. said it's showing resilience that not many expected enterprise strength he called out. chuck robins saying that was consistent globally across the portfolio. in terms of the segments, infrastructure platforms that came in better and thaekted 7 plt 6 billion, the company's core networking offering related to switching and routing applications came in at 1.4 billion. security up 11% to 61.1 million.

the q 2 guidance saying they did normalize no include thedy vised. grow on 9% on to the top none daup gap eps for more on what chuck robins you will hear jim cramer interview him. >> the stock up almost 5% right now. guy where do we go with cisco. their guidance is good on enterprise spending. >> the quarter was good. bet on eps and revenue that's good operating margins better than the street was looking for almost 32% the street was probably 30.5%. very good. the sque second quarter guide in line not a big deal. what are you willing to pay for this company probably trading close to 14 times next year's earning. 9 and a half to the 10%. eps what's the right multiple i would be inclined to by it upon

a market resistance at a number of than more inclined to fade here than buy here. >> what's interesting is chuck robins talked about the no demand decrease after the tariffs. but what we know from the gdp reports and see people were front loading a lot of purchases. so maybe that's the affect here. maybe the guidance was good but it wasn't blockbuster. wasn't like they raised it necessarily. so maybe that's what we see here i guess i'm more in the camp with guy wait for the momentum on this because there might be other things going on behind the curtain to be concerned about. >> and of course in today's session tech was amongst the biggest losers sectorwise. but alphabet and facebook bucked the trend up about 2% on chose off the highs related to the entire market. >> there were bright spots. >> that's my biggest position, alphabet really in the barak most of the day. even near the lows are we talking about fang and fang trade is over in to me the

n and the a are different -- different valuations -- kpetly different metrics. and facebook and alphabet to me very much in the value camp right here. >> you know, it's really interesting i went back and looked at a five-year chart of apple. i'm not recommending the stock but when you look at a five high pressure year chart of apple you've had two times the cycle where it's been down more than this and if you bought it halfway through the decline it was a hell of a trade. so the whole idea is -- of banks is similar to technology we have been underweight fang because we are underweight communications services. the next move which i said publicly is to lift that at least to equal weight. they paid the price. they have been hit like they have they've been hit in the past during the cycle. it's important for investors to remember these kind of high volatility stocks -- let's look at the nasdaq comp up 85% in the past two years is a 15% correction over -- is

that too much? 85% since the february of '16 low. we make it out like this is the end of the world if i told you you were getting an 85% increase but you had to suffer a 15% drop nobody would say i can't take it. and that's literally what we are in small business optimism is near a record high. staying high to the enterprise number out of cisco. consumer confidence remain near record high. ism confidence it's a god business environment. >> speaking of tech options traders making huge bets on apple today. mike khouw in san francisco to break it down. mike. >> apple did see 1.5 daily options volume while seeing only 150% may not seem a lot this is an active option that represents a significant bump up in activity and where we saw the most activity in the apple omission options watt november 1 '95 calls expiring at the end of the this week. they traded at ample price of

just over 80 cents sort of what we were just hearing, knows might be bets that apple's worst may be behind it tloeft for this woke and may make a bump above 195 by the 80 cents up around the 196197 levelled from. >> thanks, mike. mike khouw in san francisco check out or out the full show of "options action" friday 5:30 p.m. eastern time. as the latest 13 f filings trickle in this astro facing existential threat in travel stocks taking off with the holidays around the corner 40 days from christmas tonight we hear from expedia is a holiday surge coming for the stock? much more "fast money" right after this >> announcer: "options action" >> announcer: "options action" is sponsored by think or swim b. is there a cure? td ameritrade's trade desk.

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welcome back to "fast money. 13 f filings rolling in amid a hard knock year for hedge funds. leslie picker is back with more on why it's hard for the funds. >> we see a lot of movement in bank stocks as 13 f filings trickle out. buffett adding to his position tiger management adding new calls on citi bank of america and jp morgan. tiger global chase coleman as it appear loose an david teper

bying 100,000 shares worth, $20 million. these numbers are as of september 30th, notable because they show how hedge funds were positioned before october which was a tough month. energy and technology funds down about 8% and 5% respectively and activist funds down an average of 5.4% for the month. one exception is per shing square as bill ackman. his fund was up 5 appear a quarter% he said earlier today that his winning positions adp starbucks and chipotle were helpful to the portfolio because they had such little hedge fund ownership. >> it's sort of bet against the hedge funds has been a good trade this year. and hedge funds tend to be shorter term in nature hedge funds had a poor year. most funds down for the year people facing significant redemptions for sellers. we think that's an interesting

sort of factor. >> now tomorrow is the delaine for many investors and hedge funds to give notices about whether or not they want to redeem we're already seeing many predictions in the industry for a wave of closure as a result of this recent performance, melissa. >> leslie, is bill characterized in the tables as an activist fund because knows positions were passive positions. >> good point. exactly. he is still characterized as an activist fund thap that's what his materials indicate denote investor questions surrounding his active versus passive positioning and some of the recent holdings he has and he said that just because you are not seeing us in the media on cnbc -- he mentioned cnbc by name -- in the newspaper, rattling the tables doesn't mean we are not doing active positioning and having those conversations behind the scene. for what it's worth. >> leslie picker back at headquarters mark levine is the head of the

investment he eliminated hedge funds under his management saying they destroy value. mark joins us now. that was a while ago how has it been in terms of your performance, not having hedge funds in there. >> well, remember, we took out the hedge fund category. >> right. >> but we retained great managers wed moved into the equity book and the names are doing well srs, tiger global. viking tci, they're doing well. we redeemed about 70 hedge funds. some of them because of- it takes years to get out of them they've opinion dragging our performance down we are waiting the to get rid of them that will happen soon and that's where we want to be. >> what is your investment committee saying about the market environment and how you want to be positioned overall in terms of allocations. >> i think generally we are bullish, not makingny dramatic

changes to the allocation. the one place i am -- i'm a bit nervous is in the corporate lending space where -- the leveraged corporate lending space where they had a free pass in 2008 because all the liquidity came in to save the baepgs, the garbage mortgage derivatives, enabling the entire stre to refinance. i'm worried they were long- you think we are long in the tooth on nine year in the economic recovery we are 20 years since he leveraged corporate paper has faced a test that's -- and we're making moves into the portfolio along those lines. >> back to the hedge fund god call first of all. let me ask you, when markets are straight up that's a tough time for hedge funds. but flattish they should do well which isn't happening. what wouldo rethink that position? is pricing years of outperformance. >> when we think about hedge funds we divide into the tup

groups stocks bicker and derivative groups the derivative grupts generated sub2% returns three years five years. piles of derivatives sell themselves as like diversifiers which means you pay about 20 basis points that's what we pay the bond guys who are the real diversifiers. so there is no appetite for that and again on the stock picker side we like a few there is about so thousand hundred dollars half are stock pickers which think about good ones the good rupps with hard to get in the names i gave are you closed funds and you know so we are happy with the portfolio and the performance like multihundred basis points of alpha. the great performance isn't me or us. we have had a replace with a firm called rock creek sony has a terrific team they got us in years ago and we get the positive for that right

now. >> mark, i'm curious it sounds like what you pay for whether a 2 and 20 hedge under is a good manager and it don't matter the wrapper. it's not hedge funds it's just that there aren't that many good managers out arthro. >> that's everything that's exactliway the philosophy is hedge fund structure is a flfgt. we don't like it but willing to deal with it with a great manager. of the 10,000 hedge funds out there there might be 100 great managers i come on shows like this and sort of -- my bigds fans are those hundred guys because they are getting taken advantage of by the other 9,900 trading off the great returns of the great managers because they are structured the same which is completely irrelevant. >> mark, great to see you thanks for coming by. >> mark levine of the state of illinois guy, where do you want to go in terms of the 13 f filings. >> buffett initiated a position in jp morgan, right. >> yes. >> that to me is the most -- there are a lot of interesting

ones to me that's most interesting. jp morgan had a tremendous run and probably the most expensive on valuation or one of the most expensive. you have to ask yourself, he is a value investor initiating a position in a stock that he sees -- still

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the stocks pull back is's tough to make the case that th cyclical area is so bad. >> final trades up next.

not long ago, ronda started here. and then, more jobs began to appear. what started with one job spread all around. because each job in energy creates many more in this town.

final trade time tony dwyer. >> we're going for banks and tech on the slop, pop and drop retest. >> slop, pop and drop. that sounds like something you get at popeye's chicken or something. >> which is good, too. >> i likw it acted today. the valuation is very good right here, alphabet favorite position. >> thank you, tony a certain energy, a certain gravitas. >> 40 days to christmas.

get out there and buy, buy, buy. right, mel >> why not >> i would be inclined to take a look at that tomorrow, melissa lee. >> that does it for us here on "fast. meantime, don't go anywhere. "mad money" with jim cramer starts right now my mission is simple, to make you money i'm here to level the playing field for all investors. there is 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 call me at 1-800-743-cnbc or tweet me @jimcramer. but the word