Investments

Alternative investing these days seems to mean finding an alternative to once red-hot hedge funds. Institutional investors and well-heeled investors yanked a record $152 billion of their cash from hedge funds in the fourth quarter, and $155 billion for all of 2008, marking only the second year with net withdrawals since Hedge Fund Research began tracking the industry in 1990. Total industry assets shrank to $1.4 trillion by year-end, from the mid-2008 peak of $1.

The corporate junk bond market once again is living up to its name, as defaults continue to surge. A total of 15 companies worldwide have defaulted on their bonds this month, triple the total in January 2008, according to Standard & Poor's. The casualties this month include Lyondell Chemical Co., cable TV firm Charter Communications and mattress maker Simmons. All of the 15 were U.S. companies except one: Canadian telecom giant Nortel Networks.

The last few months have undercut Theresa Dreike's retirement savings at least 20%, but the 28-year-old Long Beach resident is still contributing $200 a month to her 401(k) account as she cuts back elsewhere in her life. "It's not like I need this money tomorrow, so it's important to keep making the investment because I don't know what's going to be there for me when I actually retire," she said. "For all I know, Social Security could be gone."

One month into the new year and the stock market already finds itself in a deep hole. For people whose portfolios were devastated by last year's market crash -- but who still held fast to their stock investments -- this may force some soul-searching about how much more pain they can handle. Right off the bat, let's point up the good news here: Corporate, municipal and mortgage bonds generally have been profitable investments this month.

There doesn't appear to be a lot of philosophical or practical daylight between Joseph A. Dear, the new chief investment officer of the country's largest public pension fund, and the labor-oriented board that hired him. And he doesn't see much daylight in gloomy financial markets, either. Dear, 57, is leaving a similar post at the Washington State Investment Board to run the $177-billion portfolio at the much larger, 1.6-million-member California Public Employees' Retirement System, or CalPERS.

Swiss Reinsurance Co. said Thursday it would get a capital injection of $2.6 billion from U.S. investor Warren Buffett's company after warning investors it expected to lose $869 million for the full year. Swiss Re, which based its expected net loss on preliminary figures, said it would seek more funds from the capital markets. Write-downs of about $5.2 billion for the full year offset strong underwriting performance, Swiss Re said.

Walt Disney Co., looking to bolster its movie operation, is close to making a distribution pact with Steven Spielberg's new DreamWorks studio. The surprise development comes after DreamWorks and Universal Studios failed to reach final terms on a distribution agreement announced in October. Despite months of negotiations in the home stretch, Universal was unwilling to grant DreamWorks and its partner, India's Reliance Entertainment, all the cash and concessions they demanded.

The nation's biggest public pension fund, which has lost more than a quarter of its value in the last seven months, is planning to rally big investors nationwide to demand changes in the way Wall Street operates.

The Treasury had to pay a little more than expected Thursday to sell $14 billion in 30-year bonds, the final leg of a record three-part bond sale this week to fund Uncle Sam's soaring cash needs. At least investors showed up to buy -- as opposed to what happened in Mexico on Wednesday: The government of President Felipe Calderon had to pull a planned sale of 21-year bonds after investors balked.

We've reached a point in the global recession where things no longer look universally bleak. Maybe just mostly bleak -- but that still counts as an improvement to some investors who are getting restless sitting on markets' sidelines. They're particularly restless in the People's Republic of China, which boasts the world's hottest stock markets in 2009. The Shanghai composite index jumped 6.4% this week, boosting its year-to-date gain to 27.