David Tepper's Appaloosa Management has filed its 13F with the SEC. 

For the second quarter ended June 30, Citigroup remained one of Appaloosa's top holdings.  During Q2, the fund held 9,601,639 shares in the bank compared with 8,519,547 shares in Q1. 

During Q2, Tepper sold some of his Apple stake. He held 383,004 shares in Q2 compared with 540,000 in Q1.

He added more to his Delta position during the second quarter. He held 10,290,884 shares in Q2 compared with 9,824,135 in Q1.  

The fund closed its positions in Two Harbors and MFA Financial, the filing shows. New positions in the second quarter include Axiall Corp (1,877,715 shares) and Powershares QQQ (5,750,000 shares). 

Just a reminder, fund managers only have to disclose their long equity holdings in these filings.

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Before they were masters of the universe, the biggest names on Wall Street were once just regular high school kids.  

They were members of sports and academic teams.  They were on the homecoming court.  They entered essay contests, edited the school's literary magazine and starred in musicals.

We combed through a number of high school yearbooks and have compiled photos and accomplishments of some of the Street's most recognizable names. Some of them still look the same, while others have drastically improved their hairdos. 

We even found Goldman's CEO Lloyd Blankfein in his swim trunks.  Enjoy! 

Warren Buffett said he wanted to be a stock broker in the 1947 Woodrow Wilson High School (Washington, D.C.) yearbook.

Goldman CEO Lloyd Blankfein was the valedictorian of Thomas Jefferson High School (Brooklyn, New York) in 1971. He was a city champion in the 400 meter freestyle. We think we've identified a young Blankfein in his swim trunks below.

Here's Blankfein's senior portrait. He ended up going to Harvard, not Columbia.

David Tepper, who runs $19 billion distressed debt hedge fund Appaloosa Management, was on CNBC's "Squawk Box" moments ago.  

The hedge fund manager talked about the markets, the Fed and the government shutdown. 

Here's a recap from the show: 

They're opening up talking about the Robin Hood Foundation and it's upcoming stacked investor conference. 

Andrew Ross Sorkin brought up an op-ed from this summer written by Peter Buffett.  Basically, Buffett said the system provides immense wealth for the few and they later sprinkle it around via charity. 

Sorkin asked Robin Hood's executive director David Saltzman to respond that that.  He said Peter Buffett has a "big heart and a big brain" and ended his response with a big grin. 

Tepper jumped in and said, "That's bulls--t" before explaining why corporate philanthropy actually matters.

Minutes later, Sorkin jokingly told him that he had to watch his mouth. 

Tepper responded, "What did I say? What did I say?"

Joe Kernen jumped it, "It's not broadcast, it's cable." 

Now the interview is going to get into what everyone had been waiting for — the markets and the Fed. 

Kernen is asking Tepper about the Fed deciding not to taper. 

"Look, they're not tapering for a long time. Fortunately or unfortunately," Tepper said.

He does expect markets to go up, though. 

"In the meantime, it might be a little tough for markets to fly up. On the other hand, my basic belief is when you have this large QE the markets will go up." 

He added that there's no way the Fed can taper because of the shutdown situation in Washington, D.C. 

"As far as the debt is concerned, they should just pass something in Congress that says the debt will be paid always," he said. "Do that and that will make things much, much, much more stable." 

He said if we default then everyone's mortgage will be more expensive. That will really hurt Main Street, according to Tepper.

As for the default deniers, Tepper called them "so freakin' stupid."

"These guys they were great debaters in college.  I'm so glad they were great debaters...They're so smart. They're so smart. That they're so friggin' stupid...so friggin' stupid..." 

He added at his firm they always say, "You have to be stupid before you can be smart." 

Kernen jumped in and said you can use "muck" and call them "muckers." 

Now the conversation has shifted to the stock market. 

Becky Quick asked him if they're cheap or at a fair valuation. 

Tepper told CNBC that we'll get back toward more normal multiples of 18-20 times earnings. 

Tepper came out at the beginning of this year as being extremely bullish on the U.S. stock market telling Bloomberg TV's Stephanie Ruhle that the U.S. was on "the verge of an explosion of greatness."

He continued to remain bullish on U.S. equities throughout the summer. In August, he told CNBC's Scott Wapner that he continues to be long and finds stocks reasonable. 

Tepper has one of the most successful long-term track records of any fund manager.  Last year, he was the highest paid hedge fund manager, taking home $2.2 billion, according to Forbes.

Refresh this page for updates.

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David Tepper's Appaloosa Management picked up a small stake in embattled retailer JC Penney last quarter, according to filings with the SEC.

Specifically, the fund picked up 737,800 shares of JCP — the stock is up slightly in after hours trading.

Appaloosa also added slightly to its stakes in JP Morgan and Citigroup.

Not all the financials were a buy, however.  Appaloosa reduced its stake in Bank of America — going from 6,344,607 shares to 2,219,607 shares.

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Great interview here with David Tepper of Appaloosa.  Bloomberg provides us with the video and a nice summary:

Appaloosa Management’s David Tepper joined Bloomberg Television’s Stephanie Ruhle this afternoon, live from The Robinhood Foundation Investors Conference. Tepper said U.S. equity markets are not in a bubble, “I know there’s talk about bubbles, this is not one.” Tepper went on to say he is short the bond market and it’s time to start tapering. Additionally, Tepper said:

-          Sees equities, GDP is going to be higher

-          U.S., Europe on firm ground

-          “Airlines are a big play”

-          Owned big percentages in airlines stocks

-          Sees gross numbers for this year “well into 40s”

-          Recently put on more of a treasury short

-          Not worried about inflation at all

-          He no longer owns JC Penney Position; JC Penney stake was more of a trade

-          He would have bought Twitter for long-term

-          Rather work at McDonald’s than Bank but not at grill, because that’s too hard

-          He still invests in and owns U.S and European Banks

-          Sees upside in Citibank, sees stock at $70/SHR

-          He’s a democrat but would support Chris Christie

-          Taper could affect market negatively in short term

Read more at http://pragcap.com/david-tepper-still-super-bullish#MqqgbEHZYBMWb341.99

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Hedge fund giant David Tepper made a ridiculous amount of money in 2013.

Michelle Celarier at the NY Post reports:

It could be one heckuva New Year’s Eve party for hedge fund titan David Tepper — again.

The founder of Appaloosa Management, with more than $20 billion under management, is looking at a possible $3 billion-plus payday in 2013, which could make him the highest paid hedgie.

Why did Tepper do so well? Because as we've explained earlier this year, he's a Democrat.

Why does that make sense? Here's the deal. A lot of big macro hedge fund managers have had a terrible time of it in recent years because they've been so negative on policy for political reasons. They hate Bernanke. They hate high deficits. They hate Obamacare. They hate "redistribution." And when you're negative on policy it's hard to feel good and just go with the flow and buy stocks.

Conversely, if you don't have any reason to hate policy, you're not going to let your investments be burdened by all kinds of nonsense ideas.

Now it's certainly possible to hate policy and be long and it's possible to like policy but be wrong on the market. But many big time hedge fund managers have had a hard time of it because they've let politics get in the way. That wasn't an issue for Tepper, and now he'll be raking in the cash.

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Some of the biggest names in finance worked a variety of jobs before heading to Wall Street. 

We're talking about things from bagging walnuts to selling peanuts to delivering newspapers and attending parking lots. 

Some of these jobs were things they did as kids to earn some extra spending money, while others were to pay for college or make an actual living.

We've compiled a detailed list of these titan's gigs. 

Bill Ackman dug ditches and waxed cars as a kid.

First Job: Growing up, Ackman had a car waxing business and a ditch digging business. 

Wall Street Career: Ackman, an activist investor, runs Pershing Square Capital Management. He has an estimated networth of $1.2 billion.

Dan Loeb made skateboards.

First Job: When he was 12, he had a skateboard company where he would make boards for his friends. 

Wall Street Career: Loeb currently runs hedge fund Third Point LLC. He has an estimated networth of $1.5 billion.

Source: Vanity Fair

Lloyd Blankfein sold concessions at Yankee stadium and lifeguarded.

First Job(s): Blankfein grew up in a housing project in Brooklyn. To earn extra money, Blankfein sold concessions at Yankee stadium and worked as a lifeguard.

Wall Street Career:  He's the CEO and chairman of Goldman Sachs.  

Source: Money And Power

No one can escape March Madness, not even the Masters of the Universe. With that in mind, Bloomberg TV's Stephanie Ruhle collected final four picks from some of the biggest names on Wall Street.

Of all of them, only JP Morgan CEO Jamie Dimon wouldn't share his entire final four, just his top pick (Duke).

Here's the rundown, and you can watch Ruhle talk about their picks (and some helpful hints on how to build your bracket) in the video below.

Appaloosa Management's David Tepper:

• Florida (1)
• Arizona (1)
• Louisville (4)
• Virginia (1)

Pine River Capital Management's Steve Kuhn:

• Florida (1)
• Creighton (3)
• Wichita State (1)
• Iowa State (3)

Oaktree Capital Management's Howard Marks:

• Florida (1)
• Wisconsin (2)
• Wichita State (1)
• Michigan State (4)

Fortress Investment Group's Mike Novogratz:

• Florida (1)
• Wisconsin (2)
• Louisville (4)
• Michigan State (4)

Goldman Sachs' Gary Cohn:

• Florida (1)
• Arizona (1)
• Michigan (2)
• Michigan State (4)

Greenlight Capital Inc's David Einhorn:

• Florida (1)
• Wisconsin (2)
• Wichita State (1)
• Michigan State (4)

12th Avenue Management's Marc Lasry:

• Florida (1)
• Wisconsin (2)
• Duke (3)
• UNC (6)

and … JPMorgan Chase & Co's Jamie Dimon:

• Duke (3), just Duke.

Check out the video below:

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In 2011, hedge fund titan David Tepper famously bought a $43.5 million oceanfront mansion in Sagaponack — and promptly tore it down so he could build one twice the size.

Now, three years later, construction on the project is nearly finished. At this rate, Tepper could be in his new home by the start of the Hamptons summer season.

Aerial photographer Jeff Cully at EEFAS recently flew by the beachfront estate on Gibson Lane and took some great photos of the construction site, which he shared with Business Insider. In addition to a massive pool, it looks like the home will have two hot tubs, a backyard fountain, gazebo, and tennis court.It appears that Tepper also benefitted from Southampton's $26 million beach nourishment project, a major effort to protect the waterfront and the homes located along it. Note the three zig-zagging fences on the beach in front of the home, which are part of the plan to redevelop dunes in the area.Construction of the estate has been a massive undertaking. Here's what it looked like in January 2013: And this is what the construction pit looked like in March 2012, a year after Tepper tore down the home that once stood there:
This was the 6,000-square-foot home Tepper tore down. It wasn't too shabby:

SEE ALSO: The Best Hamptons Mansions At Every Price Point

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Despite most hedge fund managers fell short on  the market's returns last year, the top 25 highest-earning hedge fund managers in the U.S. pocketed a combined $21.15 billion, according to an annual ranking by Institutional Investor’s Alpha magazine.

In fact, their multibillion-dollar payday is the highest since 2010, according to the report. 

In the last five years, David Tepper, 56, founder of Appaloosa Management, has made the 'Alpha's Rich List' and in the last two years he has topped it.

Known as a distressed investor who got his start investing in junk bonds, Tepper brought home $3.5 billion in 2013.

The 30 Most Successful Hedge Funds On Wall Street In 2013

Steven Cohen of SAC Capital Advisors and John Paulson of Paulson & Company came in 2nd with $2.4 billion and $2.3 billion, respectively.

The $2.7 trillion hedge fund industry has sought billions of dollars from the wealthy as well as from pension funds and endowments. Last year, investors poured $63.7 billion into hedge funds alone, according to DealBook.

Head over the Institutional Investor for the rest of the list>

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Billionaire David Tepper, who runs $20 billion distressed debt hedge fund Appaloosa Management, gave some cautious comments at the SALT Conference in Las Vegas on Wednesday evening.

Tepper is one of those closely followed fund managers. Following his comments, S&P futures hit session lows and Treasuries hit session highs.

Tepper has one of the best long-term performance track records in the hedge fund world. He has also been the highest paid fund manager the last two years.

"I think if you had a million with David when he started Appaloosa, it would be worth more than $191 million," SkyBridge Capital's Anthony Scaramucci said during the introduction.

Scaramucci's discussion with Tepper touched upon a variety of topics. He asked him about the stock market. Tepper doesn't sound bullish anymore.

"I think we're OK. But, listen, there's times to make money and there's times not to lose money. This is probably you're supposed to think about preserving some of your money...I think you can still be long, but I think you're supposed to have some cash now."

"It's funny people think we're always bullish."

He said he's positioned low enough in exposure where he can bring it back up or down.

"I am nervous. I think it's nervous time."

He said the market is probably OK. "But it's getting dangerous."

Scaramucci asked for any opportunities that are glaring.

Nothing.

"I'm not saying go short. Just don't go too friggin long."

He pointed to the Central Banks. He has a new phase for Central Banks—"Coordinated complacency...the market's kind of dangerous in a way."

"I think the ECB...they better ease in June. I don't know how far they are behind the curve...We are a fairly leveraged world...I'm not so keen about deflationary forces."

"I'm more worried about deflation than inflation... First of all, I don't know how to feel it out. I've never lived through it."

"If the ECB does this thing, the market's probably OK. If they don't do this thing, it's no OK."

Scaramucci began the discussion going over Tepper's past. Tepper became the head trader in the junk bond department at Goldman Sachs at a young age.

"They put the junk bond room by the women's room because they wanted to hide it."

Scaramucci asked him about his investment philosophy for junk bonds.

"I had a really good education background. The whole background from Republic Steel...was really great at understanding companies and when they're bullsh**ing you...Because I used to bulls*** on the phone," he said. 

"You were a legend down there," Scaramucci, a Goldman alum, said of Tepper.

"They didn't make me partner for the third time so I said screw that s***."

Scaramucci then asked Tepper how he got the name Appaloosa. He wanted Pegasus, but that was taken. So he picked an "A" name because it would give him an edge when people faxed alphabetically.

"Actually it's because I like to eat horse meat," he joked. "Nah, that's not true."

Following Goldman, he set out to start a hedge fund. He had $4 million saved up to start his hedge fund. He invested $3.5 million of his own money and he doubled that money.

He also raised money, but that wasn't easy. He didn't know anyone as a junk bond trader and a kid from an inner-city school in Pittsburgh. He was able to raise $50 million.

Appaloosa has had really solid performance. Tepper said there's definitely been hiccups along the way.

His fund has been down 20% three times. Once was in 1998 because of Russia, he said.

Scaramucci asked him about his investment philosophy today.

"We invest to make money. I don't do this to collect assets. I love the game. The game. I love winning the game...I think the business model that we have... is just trying to make the best return for our investors and giving back money."

Tepper said he's given back double peoples initial investment.

"I like most of my investors. I don't like them all. But when you give them back twice what they invest...It takes a burden off your shoulders...What are you going to say to me?"

Tepper also discussed his philanthropy. He said even though he grew up with no money, his father made an effort to give to charity.

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David Tepper, head of $20 billion Appaloosa Management, cut his SPDR S&P 500 ETF stake by over 6 million, to 4,814,613 shares, according to a 13F filing with the SEC. 

Still, that ETF represents the largest single holding in the the filing, valued at $900 million as of the end of March 31.

His second largest holding was PowerShares QQQ Trust, which tracks the Nasdaq. That position was worth $815 million.

Speaking at SALT conference in Las Vegas on Wednesday, Tepper said he is "nervous," that the stock market is "getting dangerous" and that he's not saying go short, but "just don't go too friggin long."

Tepper added brand new positions in Facebook (478,500 shares), Expedia (695,837 shares) and Priceline (183,224). Halliburton is one of his top position increases with 4,032,021 new shares to bring his position as of March 31 to 5,024,621.

He liquidated his positions in Transocean, Foster Wheeler, EMC Corp, Hartford Financial, Fluor. Tepper also sold 2.8 million shares in MGM Resorts International and now has 3,598,758 shares. 

SEE ALSO: John Paulson Is Sticking To His Big Bet On Gold

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Thursday night was the last night of the biggest hedge fund conference of the year, SALT 2014.

That means some serious partying went down.

After an awesome performance from Lenny Kravitz at host hotel The Bellagio, the crowd dispersed to clubs up and down the strip. A lot of people headed to Hakkasan at the MGM, but some serious ballers stayed right at home.

Both David Tepper and Jim Chanos had tables at The Bellagio's Hyde. CNBC's Melissa Lee was also there dancing her face off.

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Last month David Tepper spoke at one of the biggest hedge fund conferences of the year, SALT Las Vegas.

He told the crowd, "I am nervous, I think it's nervous time."

Now, according to CNBC's Kate Kelly, it seems that Tepper thinks we're out of the woods for now. His market concerns have "alleviated."

From Kelly:

I just spoke briefly to David Tepper this morning who said his view has changed somewhat since last month when he spoke at a conference and said, famously, it is nervous time in the markets for a number of global macro reasons dealing with Central Banks. Now that the ECB has made this somewhat historic decision today he indicates to me that he is feeling a little bit better.

Tepper had said in May that the ECB"better ease in June. I don't know how far they are behind the curve...We are a fairly leveraged world...I'm not so keen about deflationary forces."

He warned the crowd that he wouldn't be short but "don't be too freakin' long."

He also voiced concerns about China's slowing growth, instability in Ukraine, and the U.S.'s own anemic recovery. He told Kelly that those concerns too had alleviated for the moment.

Anyone out there relieved? Now it seems that Wall Street's main concern is being bored to death.

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Wall Streeters are just like us in many ways, sharing the urge to settle down and start a family at some point in their careers. 

We decided to track down a bunch of these Wall Street offspring to see what they've done with their legacies so far.

Some followed the family business path, while others strayed into new passions. From singer-songwriters to journalists and equestrians, these Wall Street kids are doing some remarkable things.

Let's meet the next generation. 

Alexander Soros, son of billionaire hedge fund manager George Soros

Age: 28 to 29 (est.)

About: Alex has established himself as a big-time philanthropist like his father. As a student, he's a big political donor, too.

He graduated from NYU in 2009. He's pursuing his doctorate in modern European history at the University of California – Berkeley, and has also started a social justice foundation in his name. 

Brian Tepper, son of billionaire hedge fund manager David Tepper (Appaloosa Management)

Age: 27 (est.)

About: Brian is a software engineer in the computer gaming field.

He graduated with a degree in game development from Full Sail University in Winter Park, Florida.

He has two sisters, Randi and Casey.

Caroline Gorman, daughter of Morgan Stanley CEO James Gorman

Age: 18

About: Caroline Gorman is another Wall Street progeny on a musical path. She sings and plays piano and guitar for her band, Madness and the Film.

Last year, the two-person band released "Scrapbook," a four song EP.

School is back in session. 

Before they were masters of the universe, the biggest names on Wall Street were once just regular high school kids, too.  

They were members of sports and academic teams.  They were on the homecoming court.  They entered essay contests, edited the school's literary magazine and starred in musicals.

We combed through a number of high school yearbooks and have compiled photos and accomplishments of some of the Street's most recognizable names. Some of them still look the same, while others have drastically improved their hairdos. 

We even found Goldman's CEO Lloyd Blankfein in his swim trunks.  Enjoy! 

Credit Suisse CEO Brady Dougan ran varsity cross-country for Hillcrest High School in Illinois.

The Credit Suisse CEO was also in his high school's concert band.

Bank of America CEO Brian Moynihan's senior portrait at Marietta High School in Ohio. He was a member of the French Club, National Honor Society and the football, baseball and track teams.

David Tepper says the bond rally is over. 

Speaking in an interview with Bloomberg's Stephanie Ruhle, Tepper said, "It's the beginning of the end of the bond market rally. We are done." 

Tepper, the founder of $20 billion hedge fund Appaloosa Management, made these comments following the ECB's interest rate cuts — and asset purchase program — announced earlier this morning.

After starting 2014 at around 3%, the yield on the ten-year fell to less than 2.4% during the summer and is currently trading near 2.45%.

Bonds in the Eurozone have also been rallying this summer, with the yield on 10-year German bunds falling below 1%.

It's not clear if Tepper's call is for the end of this year's bond rally, or for a meaningful break from the nearly thirty-year bull market that investors have enjoyed since the U.S. 10-year topped out above 15% in the early 1980s.

Tepper's comments also come after Jeff Gundlach of DoubleLine Funds, one of the few people on Wall Street who predicted this year's rally in bonds, told BI in early August that he expects the 10-year yield to remain between 2.2%-2.8%, with the risk that yields fall below 2.2%. 

Here's the amazing run enjoyed in the U.S. 10-year over the last forty years.

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We've made the case before (see Here) that for all the pomp and circumstance, Fed policy over the last three decades has done very little to deviate yields from what became a genuinely symmetrical and balanced return from the profound 1981 highs. Where they have had effect - we would argue, is around the fringe in introducing volatility to the slope of the decline, with numerous interventions and surprises as they navigated various market conditions. The chart referenced below with the 1941 to 1981 mirrored trajectory captures that story, especially when contrasted with the relative smoothness of the previous long-term cycle in the first half of the 20th century, when the Fed was still in its infancy and developing the first edition textbook of accommodation and reduction - they have continued to build upon with each passing cycle.  

On both sides of the spectrum, whether through bailouts, interventions or rate tightenings - the Fed has looked to shake the tree from time to time when the markets are deemed too complacent, accommodative or risk adverse. Coincidentally - or not, these occasions over the last thirty years have been when yields have fallen back proximate to the mirror of the cycle. Has it been beneficial? We'll save that nuanced argument for the historians, but do believe it demonstrates quite clearly the nature versus nurture aspect of the Treasury market. The Fed may find efficacy with the cattle prod at times, but the herd of the largest security market in the world will still closely follow the inherent migration pattern - one that many analysis, pundits and traders have attempted to call an audible from over the years.   

Coming into this year, we had looked for the taper-tantrum squeeze in 10-year yields to reverse from the relative extreme punctuated at the end of last year. The irony being, the collective wisdom in the market in late December and early January was wresting with how different markets would cope with a rising rate environment. Gold and gold miners were left for dead. Emerging markets were viewed as a fashion craze of the previous cycle, but unwearable in a rising rate environment.  China? "You must be crazy", we were told. Utility stocks? They'll strongly underperform. 

Lost on most was the fact that 10-year yields had surged over 80% higher in only a few short months, eclipsing the entirety of influence on long-term yields of the previous rate tightening cycle (~70%) and roughly doubling the effects of the surprise tightenings by the Fed from 1994 through February of 1995. Not surprisingly, it was a great time to buy long-term Treasuries, gold and precious metals miners, emerging market and Chinese equities and utilities.

With 10-year yields rising the most since the first week in June, bond bears started sticking their heads outside their caves last week, looking to feed and remind us once more that investing in Treasuries is akin to swimming in gasoline in a lightening storm. Emboldened by comments from Appaloosa Management's David Tepper, declaring, "It's the beginning of the end of the bond market bubble", the bond bears gain a credible ally and spokesman just as the Fed looks to shut down their country kitchen this fall - as the ECB notifies us of their own grand opening that same month. Exquisite - or desperate, timing we wonder? While Tepper's reputation and fortune have very much been built on the former, more than a tinge of the later comes to mind - with respect to the severe structural limitations of the European condition and the modest proposal the program will begin with. With that said, it is the thought that counts and we can't deny that Draghi is at the very least forging a reputation of delivering the goods - whatever they may be. 

Although we don't believe that the bond market is in a bubble per se, over the last two years we would agree that the Treasury market has been going through a transition of the beginning of the end of the move that began over 30 years ago. The main difference, is we don't expect yields to sustain a pivot higher, but remain in a long-term range roughly between 1.5 and 3.0 percent over the next several years, as the markets wrestle with normalization of monetary policy from the extraordinary measures enacted over the past five years. To that end, we defer to history and the over 70 year patterned memory of the cycle, that points to Yellen's patient refrain of lower -longer. 

In the obvious sense, the timing of the ECB announcement appears tailored to mitigate the swift collapse in yields that occurred at the end of the two previous QE salvos, as investors apprehensions without the Fed's training wheels and soup kitchen took over. While conventional market wisdom infers that QE helps a central bank put a cap on yields, as we mentioned earlier - the evidence in the market is very much to the contrary. QE by all accounts has successfully stimulated participants away from the safe-haven shores of Treasuries and into riskier assets.   

When the Fed started tightening first in the summer of 2004, US 10-year yields diverged higher away from Europe. As shown below in the chart between US and German yields, it wasn't until the financial crisis took hold in the back half of 2008 did the two markets once again converge. Maintaining its leadership role in dictating broader monetary policy direction, US yields fell below Europe in the fall of 2008 - as the Fed cut swiftly towards the lower bound of the fed funds rate. Reaching the bottom in December of that year, the ECB would take its time over the next five, meeting the Fed just last November. 

Propelled by the cattle prod of QE3 and the threat of the taper last spring, US 10-year yields have diverged considerably from Germany - Europe's strongest economy, as the ECB has continued to cut below where the fed funds rate currently resides. With the ECB finally pulling a page from our own quantitative cookbook, as our last bunch of QE biscuits warm, it seems reasonable to suspect that the spread between US and Germany will begin to come in soon. The question - we suppose, is where the next convergence might take place: higher or lower than where US yields currently reside? Will US yields enjoy support extended from the new European initiative, or will nature exert its influence over the cycle and cause them to meet lower at a later date? Longer term, our money is still on the latter and from a relative performance point of view, we continue to favor long-term Treasuries relative to equities today. From our perspective, Tepper's audible will meet the same fate as the many quarterbacks who have made the call over the years. Sacked - behind the line of scrimmage.  

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Appaloosa Management founder David Tepper was on Bloomberg TV on Wednesday morning, and host Stephanie Ruhle got him talking about the hedge fund bloodbath of the day — Fannie Mae and Freddie Mac.

Shares in the two insurers plummeted up to 40% after a court decided against a group of hedge fund managers suing for the rights to Fannie and Freddie profits.

Since the financial crisis, the U.S. Treasury has taken virtually all of that cash, and now investors like Bill Ackman, Bruce Berkowitz, and Richard Perry want a piece.

Twenty more cases are pending about this issue, but losing this first case doesn't bode well for the rest.

Tepper told Bloomberg that he wished he didn't own any of the stock, but they weren't a large position for his fund.

Either way, he pointed out that investors could appeal the decision if they like — so there's that.

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Influential hedge fund manager David Tepper appeared on Bloomberg TV with Stephanie Ruhle and Erik Schatzker, and talked a bit more about his call on the "beginning of the end" for the bond market rally.

Tepper rhetorically asked if bond investors in Europe are really being paid enough for the risk they're taking?

"There are a lot of places to lose money," Tepper said, noting that short-term interest rates in a number of countries in Europe, from Germany to Ireland, are negative on a real basis. 

"If you look at the Euro Stoxx 50, you have a 3.6% dividend yield," Tepper said. "You have higher dividend yields all through Europe and Japan than the bond market, so at some point that has to turn."

But this "turn" in bonds won't happen, Tepper says, until central bankers, namely Mario Draghi, finally starts doing something. 

Tepper said that the beginning of the end would be coming for the bond market when the ECB started a full quantitative easing program. To date, that hasn't happened. 

The ECB's next monetary policy meeting is on Thursday.

Tepper also spoke on a number of other subjects including:

• What Bill Gross' departure from PIMCO means for the bond market: "Nothing. Who cares... He's there, he's here, it's not really going to matter that much... the market is the market, its bigger than anybody."
• On the currency market: Tepper said recent weakening in the euro and yen haven't really been big moves. "'Big moves' is when the euro goes to 110 [against the dollar]." 
• On the US stock market: "On a multiple basis, its interesting."
• On high-yield bonds: "They were on the rich side of fair value, but now they're in the middle of fair value."
• Tepper, who owns a 5% stake in the Pittsburgh Steelers, was also asked about Roger Goodell and said that right now, "I like my job better."

SEE ALSO: DAVID TEPPER: I Wish I Didn't Have Any Fannie And Freddie Stock

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