All rights reserved. Moodys, the rating agency, said that in the third quarter of 2019, 91 percent of defaulted U.S. corporate debt was due to oil and gas companies. Fueled by debt and years of easy credit, Americas energy boom is on shaky footing. More than 100,000 people already have died in this country from the virus. Dec 2020 - Apr 20221 year 5 months. But with super-low interest rates, investors in search of yield were still willing to buy debt. Veuer's Tony Spitz has the details. Click here to take a moment and familiarize yourself with our Community Guidelines. Nocera and McLean writing book on U.S. coronavirus response By The Associated Press June 24, 2020 NEW YORK (AP) Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Driven partly by public pensions, the private-equity industry has mushroomed. Even before the coronavirus crisis, the spigot was drying up. All rights reserved). Regarding another ongoing Covid danger, that of reinfections, a virologist sets the record straight: There has yet to be a variant that negates the benefits of vaccines.. About Bethany McLean is a contributing editor at Vanity Fair. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. https://www.cdc.gov/coronavirus/2019-ncov/your-health/covid-by-county.htm January 12, 2022 COVID Update Update on Bethany College COVID Response Has its bubble finally burst? In a January 4 opinion piece for the New York Times, Bethany McLean had this to say about the outcome of the Elizabeth Holmes trial: "A jury's verdict is black-and-white, but the real story is . Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. That, too, is ending, as investors in such funds have become disillusioned. Its a rich history of a company, and a case study in how a corporate culture can turn toxic. All rights reserved. Following the trail of evidence, Louisiana Senator: Our Maternal Death Rates Are Only Bad If You Count Black Women, If you correct our population for race, were not as much of an outlier as itdotherwise appear.. Bethany McLean is a Vanity Fair contributing editor. This kind of rewrites the economics of oil trading.. Has its bubble finally burst? Thats because some of the major investors in private-equity funds are public pension plans; at Blackstone, roughly one-third of the firms money comes from retirement plans set up to provide for over 30 million working-class Americans, according to someone with knowledge of its portfolio. This location, as with the other County contracted medical sheltering sites, will accept individuals from the local community that are referred through DPH. Its still unclear where most of this debt is held. Writer: Enron: The Smartest Guys in the Room. Almost everything thats happened since 2008 has tilted in their favor. Bethany College will continue to adapt and collaborate as needed to encourage vaccines and boosters for staff and students. Create a Website Account - Manage notification subscriptions, save form progress and more. [12], McLean married Chris Wilford in 2000 and divorced in 2006. We could go even further. COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. Thats a difficult question to answer definitely, writes the Opinion columnist Zeynep Tufekci, because of the lack of adequate research and support for sufferers, as well as confusion about what the condition even is. Smithfield Foods. In the five years ending in April, there were 215 bankruptcies for oil and gas companies, involving $130 billion in debt, according to the law firm Haynes and Boone. (This may not surprise anyone who is attempting to be productive while working in close quarters with their children.). Deaths, active cases . All the Devils Are Here: The Hidden History of the Financial Crisis is a nonfiction book by authors Bethany McLean and Joseph Nocera about the 2008 financial crisis. The book, which she wrote from the couple's home, puts a human face to the crisis. More than 100,000 people already have died in this country from the virus. If private equity suffers, the blow will reverberate throughout the entire economy. According to the CARES Act, companies can only receive loans from the Small Business Administration if they commit to preserving jobs. The fear, of course, is that private equity will do what private equity does best, which is pocket the money themselves rather than devoting it to the businesses theyve invested in. Rasmussen points out that after the financial crisis in 2008, the Federal Reserve set a limit on the amount of debt it considered prudent. MCHD offers free COVID-19 (PCR) testing every Tuesday and Wednesday from 9am-12pm inside the McLean County Health Department building, 200 W. Front Street in downtown Bloomington, Room 400E. The allies of private equity hope that similar exemptions will soon be forthcoming for their firms.We are in a wait-and-see mode, Chris Hayes, the ILPAs senior policy counsel, told me. "[3] The article noted some irregularities in Enron's financial documents that were available to the public, suggesting the company's then-record high stock price was unjustified but she did not at that point suspect fraud at Enron. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. Americas energy independence was an illusion created by cheap debt. Jack Ewings Faster, Higher, Farther is more than the story of a scandal. The key issue is the parent child problem. When wells are clustered tightly together, with so-called child wells drilled around the parent, the wells interfere with one another, resulting in less oil, not more. In this episode, McLeanwho has tracked the industrys shaky footing for yearstraces the ups and downs of the industry from the 1970s to 2008 to today, and assesses whether a new recession will speed the transition away from fossil fuelsor hand oil barons a life raft. One of the key principles behind private equity is that increased leverageaka more debtcan make a business function more efficiently. NEW YORK (AP) Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. In September 2015, she published Shaky Ground: The Strange Saga of the U.S. Mortgage Giants which examines the governance and financial situation of Fannie Mae and Freddie Mac seven years after the 2008 financial crisis. As a result, fracking stocks badly underperformed the market. Ms. McLean is the author of Saudi America: The Truth About Fracking and How Its Changing the World., Ever since the oil shocks of the 1970s, the idea of energy independence, which in its grandest incarnation meant freedom from the worlds oil-rich trouble spots, has been a dream for Democrats and Republicans alike. (Many of the companies owned by mammoth private-equity firms like Blackstone are too big on their own to qualify for this bucket of money.). McLean was born in Hibbing, Minnesota on December 12, 1970. in English and mathematics from Williams College. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now. (And not all private-equity firms care equally about all of the programs.) Getting the government out of the housing market would mean saying goodbye to the 30-year mortgage. Bethany McLean. Whats more, the Milken Institute reported, even by mid-2018, private equity owned more companies than the number of businesses listed on all of the U.S. stock exchanges combined, and have accounted for a more significant source of financing than initial public offerings in many recent years. Whiting Petroleum, whose stock once traded for $150 a share, filed for bankruptcy. We really need Trump to do something or hes going to lose all the energy states in this election, Mr. Sheffield told CNBC in late March. She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. But among those angling for a federal handout is one of the wealthiest sectors of the American economy: private equity. Now, it has been shut off. Daily updates from Washington, Wall Street, and Silicon Valley. On March 9, the price of oil plunged by almost a third, its steepest one-day drop in almost 30 years. In 2019, Mclean launched a podcast titled Making a Killing on Luminary. So why should they be permitted to raid the federal Treasury in a time of crisis? Are Crude Oil & Natural Gas Prices Linked? It is absolutely imperative, Waters recently wrote in support of private equity, that the reliefbe extended to protect all workers, irrespective of the affiliations of their employers. Translation: Workers shouldnt suffer just because their bosses sold a controlling stake in their businesses to a bunch of greedy fat cats. So the era of low interest rates, which began with former Federal Reserve chairman Alan Greenspan and continues to this day, has been a huge boon to private-equity firms. There were rumblings that shale companies would seek a federal lifeline. Like so many other facets of the COVID-19 crisis, however, this unprecedented crash exposed long-running cracks in the facade. Bethany McLean. The book was later made into the Academy Award-nominated documentary Enron: The Smartest Guys in the Room. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. Pension funds that have poured money into private equity firms may take a hit soon, too. What could endemic Covid look like? The technology of fracking in shale rock - particularly in the Permian Basin in Texas - has transformed America into the world's top producer of both oil and natural gas. She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. The Wuhan Institute of Virology, the cutting-edge biotech facility at the center of swirling suspicions about the pandemics onset, was far more troubled than previously known, explosive documents unearthed by a Senate research team reveal. The Wuhan Institute of Virology, the cutting-edge . All thats left to tally is the environmental and financial damage. Ad Choices. [13][14][15] They divorced in 2020. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. On Thursday's show: The job forecast for the region in 2022, lessons from the collapse of Enron, a conversation with the late Stephen Sondheim, and the best new restaurants from the past year. Bethany McLean is a Vanity Fair contributing editor. today. Americas largest public pension plan, the California Public Employees Retirement System, or CalPERS, put almost $7 billion into private equity during the 2018-2019 fiscal year, according to Institutional Investor. 500 energy sector fell, questions weve gathered from readers recently, adequate research and support for sufferers, according to the law firm Haynes and Boone. 500 energy sector fell 20 percent, marking the sectors largest drop on record. Paying members will get access to perks like a monthly happy hour with Kate, Daniel, and friends, a free ebook of A Planet to Win: Why We Need a Green New Deal by Kate Aronoff, Alyssa Battistoni, Daniel Aldana Cohen, and Thea Riofrancos, and much more. Blackstones Schwarzman has ties to Trump. All rights reserved. After Enron's rapid collapse later in 2001, McLean co-authored the book The Smartest Guys in the Room (2003) which detailed the corrupt business practices of Enron officials. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Yet an exemption for the private-equity industry did not make its way into the CARES Act; according to Bloomberg, Senate Majority Leader Mitch McConnell is trying to pass a $250 billion boost to the PPPwithout provisions opening it to private-equity-backed companies. Thats because oil fracking has never been financially viable. She is also a columnist at Yahoo Finance and a contributor to CNBC. She is known for her writing on the Enron scandal and the 2008 financial crisis. NEW YORK (AP) Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Increasingly desperate to boost the portfolios of retiring workers, they too turned to private equity as their saviorurged on by private equitys promises that it alone could deliver the necessary returns. [16] McLean resides in Chicago with her children. From 2015 through 2019, private equity firms raised almost $80 billion in funds focused mostly on shale production, according to Barclays. In early 2015, the hedge fund manager David Einhorn announced at an investment conference that he had looked at the financial statements of 16 publicly traded shale producers and found that from 2006 to 2014, they spent $80 billion more than they received from selling oil. If you need help with the Public File, call 540-512-1558. Beleaguered pension funds, which suffered big losses in the financial crisis, could no longer count on decent returns from fixed investments, given how low interest rates have been kept by the Fed. [citation needed], She authored an article on Enron for the March 5, 2001, issue of Fortune entitled, "Is Enron Overpriced? How concerning are things like long covid and reinfections? How exactly did the alleged illegal activity go down? Because rules for access to this money werent specified in the CARES Act, as ILPA notes, the executive branch will have a fair amount of discretion over who gets access to the moneyand private-equity firms want to take full advantage of that opening. . We asked three experts two immunologists and an epidemiologist to weigh in on this and some of the hundreds of other questions weve gathered from readers recently, including how to make sense of booster and test timing, recommendations for children, whether getting covid is just inevitable and other pressing queries. A hydraulic fracturing site in Denton, Texas. Portfolio, a Penguin Random House imprint, announced Wednesday that the two had reached an agreement for a news-breaking, character-driven narrative revealing the forces that rendered critical American institutions ill-equipped to cope with the deadliest pandemic since the 1918 Spanish flu and the economic consequences of that failure.The title and release date have not yet been determined. In the Haynesville and the Utica Shales, two major natural gas plays, over half of the drilling is being done by private equity-backed companies; in the oil-rich Permian Basin, its about a quarter of the drilling. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. Tar Heel, North Carolina, United States. 8:00 a.m. - 4:30 p.m. 200 W Front StreetBloomington, IL 61701Phone: (309) 888-5450 HoursMonday - Friday8 a.m. - 4:30 p.m. - Manage notification subscriptions, save form progress and more. These firms not only have a record $1.5 trillion in cash on the sidelines, waiting to be invested, but their CEOs are among Americas richest executives. So if Blackstones investments crater, the teachers, firefighters, and health care workers who are counting on those investments to generate the returns necessary to pay their pensions will suffer. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". Private equity has made multibillionaires of executives like Blackstones Steve Schwarzman (net worth: $17.5 billion) and Apollos Leon Black ($7.5 billion). We could close that, once and for all. A deal, and higher oil prices, might help the industry. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. (Adila Mchich, CME Group), Fractivism: Corporate Bodies and Chemical Bonds (Sarah Ann Wylie), The Fracktivists (Colin Kinniburgh, Dissent), Kate: A Moderate Proposal: Nationalize The Fossil Fuel Industry (The New Republic), This week, Kate and Daniel talk to Bethany McLean, author most recently of, Saudi America: The Truth about Fracking and How Its Changing the World, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, If you like the episode and want to hear more, sign up as a monthly member at. That means public pensions might be forced to dump their holdings in public-backed investments to provide private-equity firms with emergency casha move that could depress the stock market even further. You can see how all of this is playing out by looking at Occidental Petroleum. This week, Kate and Daniel talk to Bethany McLean, author most recently of Saudi America: The Truth about Fracking and How Its Changing the World as well as the bestselling The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, with Peter Elkind. Months into the outbreak, no one really knows how well many of the screening tests work, and experts at top medical centers say it is time to do the studies to find out. At least 1 in 303 residents have died from the coronavirus, a total of 2,512 deaths. The title and release date have not yet been determined. The industrys total assets under management have hit a record $4.1 trillion. There are several pots of federal money that the private-equity industry is lobbying to access. And President Trump reveled in the rhetoric: We hadnt merely achieved independence, his administration said, but rather energy dominance.. And more! Portfolio, a Penguin Random House imprint, announced Wednesday that the two had reached an agreement for a news-breaking, character-driven narrative revealing the forces that rendered critical American institutions ill-equipped to cope with the deadliest pandemic since the 1918 Spanish flu and the economic consequences of that failure.. We need private equity, we need more of it, and we need it now, chief investment officer Ben Meng said in early 2019right before CalPERS hired a former private-equity guy, who began his career at Goldman Sachs, to head its private-equity efforts. Manage all aspects of the daily operation for Ham Conversion, processing up to 1.5 million lbs/day . Ever since Congress voted to hand out $2 trillion in taxpayer money to those hardest hit by the coronavirus pandemic, American businesses have been scrambling for a piece of the action. But it doesnt have to be a blank check. The reason is as simple as it is galling: while great private fortunes, such as that of Blackstones Stephen Schwarzman (net worth: $17.5 billion and Apollos Leon Black ($7.5 billion), have been made from private equitys march through the world, its losses, to a remarkable degree, will belong to all of us. Americas energy independence was built on an industry that is the very definition of dependent dependent on investors to keeping pouring billions upon billions in capital into money-losing companies to fund their drilling. COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. The industry also quietly helps itself to yet more money by having portfolio companies pay fees for consulting and financing services provided by, of course, their private-equity backers. Bethany McLean is a . 1. Hot & Bothered is produced by Colin Kinniburgh. Bethany McLean, a contributing editor at Vanity Fair, is the author of "Saudi America: The Truth About Fracking and How It's Changing the World." The Times is committed to publishing a. Infuriatingly enough, the financial crisis in 2008 might even have saved private-equity firms from their sins. After nearly bringing down the economy in 2008, how is it possible that Fannie Mae and Freddie Mac are still around? So private equity is pushing to waive those rules, arguing that small firms should not be penalized for having been bought out by big investors. She is a writer, known for Enron: The Smartest Guys in the Room (2005), Independent Lens (1999) and PBS NewsHour (1975). . Investors were willing to do this only as long as oil prices, which are not under Americas control, were high and when they believed that one day, profits would materialize. The socio-economic status of individuals needing . If private equity is handed billions in taxpayer money, it could use some of it to pay themselves hefty fees today, then pocket even more of it down the road, when they sell their portfolio companies and collect their 20% of the taxpayer-enabled gains. How will the virus continue to change? (AP Photo/Rick Bowmer), Connect with the definitive source for global and local news. Otherwise, the ILPA warned in a previous letter, there would be significant harm not only to employees that see their hours reduced or jobs eliminated, but also significantly reduced returns to the institutions providing retirement security through pensions, insurance policies and other investments that serve hundreds of thousands of Americans. To make matters worse, ILPA added, provisions in many private-equity investments allow private-equity firms to make additional capital calls when times are tough.
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