it is called calpers.e hearing said, wait a second, the federal government can break contracts between government pensions and cities, basically because they are not, they don't have exclusive positioning in a bankruptcy. so they can be treated like debt just as any other creditor. stuart: so the state worker pension fund are not doing well. state government, some, they want to cut them. they have gone to court saying you can't cut those pensions. the judge says, yes you can. >> yes you can. you can cut them. you can break contracts with them. the judge also saying you know what? you, the cities in california, you can go to insurers and get your retirement plans. you don't have to use a state-backed plan. socal percent is reeling from this. and what this means is, the judge could decide by october 30, that, yes, stockton does not have to abide by calpers pension plan that doesn't owe any money into the calpers pension plan. stuart, this matters for other cities in california teetering on the brink of insol

last week some one broke into a home on calpers street going through a bathroom window. in most cases crimes are hatch penning middle of the day. the thief looks for a side gate. victims hatch lost electronics and valuable items easy to cart off. >> did you see what happened to the as. thousand in the bay area are heartbroken. as lost their one game playoff. in dramatic fashion. the stae season is over. >> fans filed into ricky's. prepared for a game, but not for this ride. an early lead. early hope. long time fans joining together. i hope we get hits and see what happens. >> here, they feel like friend. family. enjoying the ups and downs of playoff baseball. one night to advance. as went down. until the home run. but eventually they saw it coming. extra innings. a nail biter. the as go up and then they lose. a tough game. as played well. i am proud of my team. and, they came through. and within the game. still an as fan. oh. such a heartbreak. we are jeoined now. bummer. >> neither teams deserve off to lose. all about the little defense. solid baserunning. timely hittin

the city of stockton, california, thought it had to make pension payments to calpers, the california public employment retiree system before bondholders and other creditors got paid. but the ruling allows the city to treat pension obligations like any other debt. meaning it can start cutting those retiree contributions. now, that ruling is expected to be appealed. >>> some good news about hiring from small business owners. the latest monthly survey from the national federation of independent business shows that small companies hired workers at the fastest pace in eight months in september. that is a sign that the job market continues to gain strength. >> that survey showed an average gain of just one quarter of one employee. getting hired last month. that means a lot of other small businesses are just not taking on new workers so what is holding them back? ahead of tomorrow's big jobs report, kate rogers takes a look. >> reporter: ask small business owners what is bothering them and you wouldn't find a single answer. >> this is for that order that we're donating. >> reporter: for the

. >> on the institutional side you hear about investors and calp s calpers. and hedge funds and not investing and. you recognize the talent out there on the hedge fund space. and i completely disagree with that premise. and if you are sitting at home you should be giving consideration to that alternative asset class that hedge funds are. because there is a brilliant guy a guy clearly winning in the markets and you want to be with people like that. >> and a guy, josh, who clearly looks at the turmoil that has taken place most recently in the market and sees that as a big opportunity. i thought that was one of the more interesting things david had to say about the broader market. >> so do i. and to be deer tclear the typicl person cannot call capital and money. most people out there i think did get blown out of some trades last week. it is very textbook. when you plook at things like the mlp space. hyg and the big junk bond etfs traded. those are liquidations. those are not thoughtfully made trades on fundamentals. you have incredible declines. and steve weiss

you listen to warren buffett, he says you can do so much better in an index fund, and people say calpers out of hedge funds because the fees were so prohibitively high. i know you cover this. this is what you do. what should the average investor be watching right now, really think about that? abso. certainly there's a couple of things that are important here. the model that most institutional investors are empleaing these days is looking at the hedge fund industry in alternative exposure as something that complements equities, fixed income and real estate and a specialized exposure which serves as a hedge exactly as its supposed to in those things. that's what i think the important takeaway. and i think if you look at last five years, certainly you've done very well in the last five years in index funds. you've had a five-year bull market. if there's a takeaway to put a point on it from september in the third quarter. i think that the paradigm. market has changed and you're now seeing an environment where you had a five-year bull market in equities, you had extensive amount quantitative

the hedge funds and calpers. letter saying in part over typical market cycles rather than extended trended bull markets, hedge funds have materially outperformed the broader market on a net of fees basis. having calpers decide it's not going to use any hedge funds. i know your hedge fund has done very well. the question becomes when you have over 8,000 hedge funds can you really hold them up as an exclusive class anymore. i just wonder if we can get into this is little. >> i never held myself or the hedge fund industry in an exclusive class. >> we have. >> well, you created the publicity in a sense. let me say this. the american dream, you know, somebody wants to be the next julia robinson, david tepper, michael steinhart. there are 12,000 hedge funds happy to manage money and 10,000 mutual funds. if you had a choice you'd rather work for 2 and 20 manager than 1% manager. i think the best people have been attracted to the industry. but generally what happens is a shakeout. and a lot of people have come to the ind

what calpers does is up to calpers and what others decide to do is up to them. before, andrew, we have a 20 trillion dollars of assets in this room today where you'll be later this morning, and all of these people are committed to the alternative space, and it's a space that we see continuously growing. if we bring out a new hedge fund management and take them out on the road, their ability to raise capital today, it's out there. we can go out and raise capital for a good manager, and there's many pools of capital out there looking for the alternative space. >> right. one of the great barometers of confidence is mergers and acquisitions. we said at the beginning of the segment, you guys have been killing it. curious about your views of what's happened to washington to inversions. that was helping not only you, but the broader landscape, looked like they were headed for a lot of deals, and now maybe we'll see less of them, theabvee shire deal. what's going to happen? >> at the end of the day, companies need to grow, and companies want to create jobs and high pays

i think what mark miller i was influenced by studying the calpers. and, you know, if you look at the very specific quality measures they have for joint replacements, you know, they seem to me to be much, much stronger. than many of the general quality measures that you would tag, say, for an entire hospital. and working that into the system at some point. >> we have time for maybe one more back here. >> hi, i'm mara mcdermott. you have talked about specific changes to the aco program. i was wondering if you could speak to the extent you think legislation is needed to make those changes versus what cms or innovation center could do to advance next generation of acos. >> number one, along with a lot of people, i was going around talking to both sides of everything. >> i believe it takes legislation to solve the payment changes that are going to go off the cliff if we don't, you know, reset how things are paid and the baseline information. so, i think you do -- you do have to have that people we should identify won't change but they won't have the legal

calpers recently decided they are no longer going to be in the hedge fund business.vest in equities. do you think that is the right decision for pension funds across the country? >> i made a bet seven years ago. i made this offer to anybody in the united states. i said i would bet $1 million they could pickney group of hedge funds and i would take the s&p 500 run guy vanguard. the winner will pick the cherry the money went to. i'm quite aways ahead on that bet now. hedge funds after fees are not going to deliver, in my view, a return as well as a low-cost index fund. i ma they made a lot of money for the people who run them. >> we had dan gilbert on. he talked about how he brought lebron back. did he speak with you before he made that decision? >> no. i sent a congratulatory note after. i know lebron and dan. for the city of cleveland, i feel good, too. i'm glad lebron went back. he doesn't need advice from me. >> another one of the headlines we've been focusing on with great interest is what's been happening with ebola. the first patient with ebola found here in the