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. Private equity financiers typically get a 2 percent management fee on funds they can raise, so they are incentivized to take all the money that pension funds, desperate for returns to shore up their promises to retirees, have been willing to give them. [1] It details how the financial crisis bubbled up from a volatile, and bipartisan, mixture of government meddling and laissez-faire. Are Crude Oil & Natural Gas Prices Linked? Stopping that will require a creative effort to increase and sustain high levels of vaccination. One of the key principles behind private equity is that increased leverageaka more debtcan make a business function more efficiently. Airlines, hotels, and restaurantsall of whose revenues have cratered in the wake of sweeping stay-home ordershave engaged in Hunger Gameslike lobbying to cash in on the CARES Act, making their case for a share of the disaster relief. Mnuchin is a former Goldman Sachs executive and hedge fund guy; Blackstones Schwarzman has ties to Trump; Jared Kushners family business has gotten loans from Apollo, according to the Washington Post. Policymakers who wanted to tout energy independence disregarded all this, even as investors were starting to lose patience. Copyright 2020 The Associated Press. Dec 2020 - Apr 20221 year 5 months. But that didnt seem to matter, because low interest rates facilitated private equity in another way. She is known for her writing on the Enron scandal and the 2008 financial crisis. The immunobiologist Akiko Iwasakiwrites that new vaccines, particular those delivered through the nose, may be part of the answer. 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. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. 2023 Cond Nast. Bethany McLean is a . Recent and archived work by Bethany McLean for The New York Times. The Next Financial Crisis Lurks Underground (Bethany McLean, New York Times), Coronavirus May Kill Our Fracking Fever Dream (Bethany McLean, New York Times), Are Crude Oil & Natural Gas Prices Linked? New revelations about how one Trump staffer helped preserve the transfer of powerfrom the forthcoming book on the Biden White House, COVID-19 Origins: Investigating a Complex and Grave Situation Inside a Wuhan Lab. [1] In 1992 she received a B.A. The active outbreak list is intended to inform the public of the current COVID-19 outbreaks in Los Angeles County. Pension funds that have poured money into private equity firms may take a hit soon, too. 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. Has its bubble finally burst? She is the co-author of the 2003 book, "The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron," which was the basis for the Academy Award-nominated documentary of the same name. But they wont fix its fundamental problem with profitability. In the Season One finale of Making A Killing, Bethany brings back her friend, colleague and co-author Joe Nocera (Bloomberg Opinion columnist and creator of The Shrink Next Door podcast) to bookend the season with a lively analysis of the former head of Nissan Motor Co. and Renault S.A., Carlos Ghosn. All rights reserved. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Her two books are the The Smartest Guys in the Room: The Amazing. 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. By early 2019, America was the worlds largest producer of crude oil, surpassing both Saudi Arabia and Russia. Dylan Hollingsworth for The New York Times. By Bethany McLean. She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. Was Tiffany involved? You can see how all of this is playing out by looking at Occidental Petroleum. January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . on March 2.Read more about the C.D.C . Ad Choices. All thats left to tally is the damage. Thanks to all the cheap money made available by the Fed, companies owned by private-equity firms could simply refinance their debts at lower rates, thereby getting a fresh lease on life. The book was later made into the Academy Award-nominated documentary Enron: The Smartest Guys in the Room. Driven partly by public pensions, the private-equity industry has mushroomed. Until the capital markets began to get suspicious, private equity investors could flip companies they had funded to larger, public companies, making a profitable exit regardless of whether or not the underlying business was making money. How exactly did the alleged illegal activity go down? They have two children. How will the virus continue to change? To revisit this article, select My Account, thenView saved stories. What could endemic Covid look like? About Bethany McLean is a contributing editor at Vanity Fair. Anyone can read what you share. Coronavirus May Kill Our Fracking Fever Dream, https://www.nytimes.com/2020/04/10/opinion/sunday/coronavirus-texas-fracking-layoffs.html. If private equity suffers, the blow will reverberate throughout the entire economy. Think of private-equity firms as the banks of the corona crisis: They are, for better or worse, too big to fail. Here are some tips. Traders last year at the New York Stock Exchange near the post that trades Anadarko Petroleum and Occidental Petroleum. All information these cookies collect is aggregated and therefore anonymous . There are several pots of federal money that the private-equity industry is lobbying to access. Bethany McLean is a journalist and contributing editor for Vanity Fair. governor announced on Tuesday that he will convene a grand jury to investigate "crimes and wrongdoing" related to COVID-19 vaccines. Sign up for our daily Hive newsletter and never miss a story. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate. Bill White wants to restore Americas historical proclivity for balanced budgets. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". There were rumblings that shale companies would seek a federal lifeline. She is known for her writing on the Enron scandal and the 2008 financial crisis. In April, the Energy Information Administration cut its forecast for U.S. oil production, estimating that it will fall both this year and next suggesting that the days of huge growth in production from shale are over. [17], Last edited on 21 November 2022, at 20:31, "Hibbing grad warns of economic crisis below ground", "What Working At Goldman Sachs Taught Legendary Business Journalist Bethany McLean", "Meet Patrick Byrne: Bitcoin Messiah, CEO of Overstock, Scourge of Wall Street", "BYRNE'S HOT MAIL; OVERSTOCK CHIEF'S TEMPER ERUPTS IN MESSAGES", Financial System's Top Risk, Hiding in Plain Sight, "U.S. mortgage giants under the microscope", "Loughlin, Giannulli lawyer is prosecutors' 'worst nightmare', "Q & A with Bethany McLean, Author of 'All the Devils Are Here', "Enron tale author Bethany McLean has a new book she wrote from her Chicago home", https://en.wikipedia.org/w/index.php?title=Bethany_McLean&oldid=1123096713, This page was last edited on 21 November 2022, at 20:31. Its essential that we do the same today. Portfolio, a Penguin Random House imprint . The politics dictating whether the private-equity industry will get its wishes are surprising. Coronavirus outbreaks were reported by the Merced County Department of Public Health at New Bethany Residential Care retirement home in Los Banos and Dutch Bros Coffee. 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 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. 500 energy sector fell 20 percent, marking the sectors largest drop on record. Manage all aspects of the daily operation for Ham Conversion, processing up to 1.5 million lbs/day . Given how much of the economy will rise and fall on the investments that private-equity funds manage, we may be forced to let them share the federal handout. 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. More than 100,000 people already have died in this country from the virus. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. 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. The Wuhan Institute of Virology, the cutting-edge . today. Workers monitoring a hydraulic fracturing operation near Wink, Texas. And President Trump reveled in the rhetoric: We hadnt merely achieved independence, his administration said, but rather energy dominance.. As a result, the stocks that make up the S.&P. Music: Mercurias Meet Victor Rice, Carregar (Instrumental), courtesy of Total Running Time. We could also limit the deductibility of interest payments for tax purposes even more than President Donald Trumps new tax law already did, so companies arent encouraged to load up on debt. Latest trends. On March 10, the company announced that it would slash its dividend for the first time since the early 1990s, when Saddam Husseins invasion of Kuwait sent oil prices plummeting. Rasmussen points out that after the financial crisis in 2008, the Federal Reserve set a limit on the amount of debt it considered prudent. Bethany McLean is a Vanity Fair contributing editor. Its thanks to those who are able to contribute that were able to make the podcast free for anyone to listen to. 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. Unfortunately, there isnt really an alternative to providing private equity with federal funds. McLean was born in Hibbing, Minnesota on December 12, 1970. But among those angling for a federal handout is one of the wealthiest sectors of the American economy: private equity. [13][14][15] They divorced in 2020. The Next Financial Crisis Lurks Underground, Coronavirus May Kill Our Fracking Fever Dream. More than 100,000 people already have died in this country from the virus. If you need help with the Public File, call (713) 778-4745. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. (AP Photo/Rick Bowmer), (Rick Bowmer, Copyright 2020 The Associated Press. Private-equity managers won the financial crisis, as Bloomberg put it last fall. Unlike venture capitalists, who provide start-up funds to new companies, private-equity firms generally take over existing businesses, usually by borrowing large sums of money. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. Blackstones Schwarzman has ties to Trump. Waters, in her letter, argues for placing even more strings on the money taken by private-equity-backed companies. Even so, he told me, a large number of private-equity firms ignored that guidance and decided to put very high levels of leverage on their portfolio companies. Maybe those firms should now be required to contribute more equity from their cash stockpiles, he suggests. On March 9, the price of oil plunged by almost a third, its steepest one-day drop in almost 30 years. 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. Novavax Inc said on Thursday it would require six months to produce a COVID-19 vaccine designed to match whichever coronavirus variants are circulating for an annual immunization program each fall . Energy independence was a fever dream, fed by cheap debt and frothy capital markets. Almost everything thats happened since 2008 has tilted in their favor. 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. Copyright 2023 Click2Houston.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. COVID-19 in McLean County for the week ending 3-3-23 - New Cases (2-23-23 to 3-1-23):129; New Hospitalizations (2-22-23 to 2-28-23):10 ; McLean Countys COVID-19 Community Level is LOW: When Community Level is LOW: Stay up to date on vaccinations, Get tested if you have symptoms. Actually, no. Over the past 10 years, the entire energy industry has issued over $400 billion in high-yield debt. The taxpayer handouts will also help private equity continue its relentless march through the global economy, snapping up troubled companies at bargain prices or extending high-priced credit as other investors, including hedge funds, are forced to sell off their holdings in the post-corona landscape. Its still unclear where most of this debt is held. In 2019, Oxy, as its known, topped a competing bid from Chevron and paid $38 billion to take over Anadarko Petroleum, which is one of the major shale companies. Previous to her current roles, McLean was an editor-at-large at Fortune Magazine. David Wallace Wells writes that by one estimate, 100,000 Americans could die each yearfrom the coronavirus. Blame Congress for the meltdown, not Goldman Sachs. Whiting Petroleum, whose stock once traded for $150 a share, filed for bankruptcy. [4], In 2005, McLean got into a spat with then-CEO of Overstock.com Patrick M. Byrne after she wrote a negative article about Overstock and him.[5][6]. As a subscriber, you have 10 gift articles to give each month. Free COVID-19 testing is available at the McLean County Health Department from 9 a.m. to noon every Tuesday and Wednesday in Room 400E of the MCHD building at 200 W. Front St. in Bloomington. Get COVID-19 vaccine updates from the CDC. Private equity has made multibillionaires of executives like Blackstones Steve Schwarzman (net worth: $17.5 billion) and Apollos Leon Black ($7.5 billion). Well continue to work with the administration and Congress to request that federal programs support all businesses, regardless of ownership structure, and their workers, says the AICs CEO, Drew Maloney. The promised profits havent materialized. She has suggestions for how to approach the problem. Confirmed case data are from the Department of Public Health's communicable disease surveillance database. It once seemed utterly unattainable until the advent of fracking, which unleashed a torrent of oil. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. One is the so-called Paycheck Protection Program (PPP), set up to make $349 billion in government-guaranteed loans available to businesses with fewer than 500 employees. All rights reserved). Clients who show symptoms of COVID-19 (for example have a fever, cough, or difficulty breathing) and/or are waiting for their test results. We asked three experts two immunologists and an epidemiologist to weigh in on this and some of the hundreds of other, Thats a difficult question to answer definitely, writes the Opinion columnist Zeynep Tufekci, because of the lack of. 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. And heres our email: letters@nytimes.com. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. More than 100,000 people already have died in this country from the virus. Daily updates from Washington, Wall Street, and Silicon Valley. Then came Covid-19, and, on March 8, the sudden and vicious end to the truce between Saudi Arabia and Russia, under which both countries limited production to prop up prices. Fueled by debt and years of easy credit, Americas energy boom is on shaky footing. Bethany McLean. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. 2023 Cond Nast. She is also a columnist at Yahoo Finance and a contributor to CNBC. To revisit this article, visit My Profile, thenView saved stories. 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. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now. To revist this article, visit My Profile, then View saved stories. Exclusive: Inside the S--tshow That Was the Trump-Biden Transition. So why should they be permitted to raid the federal Treasury in a time of crisis? Some of it has been packaged into so-called collateralized loan obligations, pieces of which are held by hedge funds. Thats because one big source of funding didnt dry up: private equity. The basic reason is that the amount of oil coming out of a fracked well declines steeply after the first year more than 50 percent in year two. By Patrick Semansky/AP Photo (Mnuchin); By Mark Wilson (Pelosi), Jason Alden (Shwarzman), Patrick T. Fallon/Bloomberg (Black), by Johannes EISELE/AFP (stocks), by Christina Horsten (tents), by John Nacion (ambulance); All from Getty Images. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. James Glassman says his seven-year-old prediction that the Dow Jones industrial average will rise to 36,000 wasn't wrong, just early. 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. (And not all private-equity firms care equally about all of the programs.) 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. On March 10, Scott Sheffield, the chief executive of Pioneer Natural Resources, a major driller in the Permian Basin, told Bloomberg that U.S. oil output could fall by more than two million barrels per day by next year if prices remain where they are today. Like the big banks in 2008, private equity is holding us all hostage.
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