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February 10, 2016
What’s Booming in this Economy? Bankruptcy & Restructuring Business “Highest Since Great Recession”
by Wolf Richter • February 8, 2016
[font color="blue"]“Up over 25% from one year ago.”[/font]
It starts like this: Reuters reports that “sources” said that a company has hired “restructuring lawyers.” A sign of an impending debt restructuring, such as a bankruptcy. And shares plunge.
This is what happened Monday morning to Chesapeake Energy, the second largest natural gas producer in the US, after it was reported that it had engaged restructuring advisors Kirkland & Ellis. Shares, already reduced to near-penny-stock territory, plunged another 50% to $1.50, at which point trading was halted.
To soothe our rattled nerves, the company said that it “currently [emphasis mine] has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders.”
As of September 30, after losing nearly $5 billion in the quarter, Chesapeake had $16.7 billion in liabilities, including $10.7 billion in long-term debt, mostly bonds. It has $1.8 billion in cash. In addition to its operating requirements (losses), the company has to deal with $500 million in debt that comes due in March. OK, that might still work. But it also has commitments to pay about $2 billion per year for space on a number of pipelines, including those owned by Williams Companies, whose shares plunged 34.8% upon the news. ..............(more)
http://wolfstreet.com/2016/02/08/bankruptcy-restructuring-business-booms-highest-since-great-recession/
What’s Booming in this Economy? Bankruptcy & Restructuring Business “Highest Since Great Recession”
What’s Booming in this Economy? Bankruptcy & Restructuring Business “Highest Since Great Recession”
by Wolf Richter • February 8, 2016
[font color="blue"]“Up over 25% from one year ago.”[/font]
It starts like this: Reuters reports that “sources” said that a company has hired “restructuring lawyers.” A sign of an impending debt restructuring, such as a bankruptcy. And shares plunge.
This is what happened Monday morning to Chesapeake Energy, the second largest natural gas producer in the US, after it was reported that it had engaged restructuring advisors Kirkland & Ellis. Shares, already reduced to near-penny-stock territory, plunged another 50% to $1.50, at which point trading was halted.
To soothe our rattled nerves, the company said that it “currently [emphasis mine] has no plans to pursue bankruptcy and is aggressively seeking to maximize value for all shareholders.”
As of September 30, after losing nearly $5 billion in the quarter, Chesapeake had $16.7 billion in liabilities, including $10.7 billion in long-term debt, mostly bonds. It has $1.8 billion in cash. In addition to its operating requirements (losses), the company has to deal with $500 million in debt that comes due in March. OK, that might still work. But it also has commitments to pay about $2 billion per year for space on a number of pipelines, including those owned by Williams Companies, whose shares plunged 34.8% upon the news. ..............(more)
http://wolfstreet.com/2016/02/08/bankruptcy-restructuring-business-booms-highest-since-great-recession/
February 10, 2016
from truthdig:
by Chris Hedges
What is in the mind of someone who knowingly poisons children and impairs their lives? Why did the politicians, regulators and bureaucrats who knew the water in Flint, Mich., was toxic lie about the danger for months? What does it say about a society that is ruled by, and refuses to punish, those who willfully destroy the lives of children?
The crisis in Flint is far more ominous than lead-contaminated water. It is symptomatic of the collapse of our democracy. Corporate power is not held accountable for its crimes. Everything is up for sale, including children. Our regulatory agencies—including the federal Environmental Protection Agency, the Centers for Disease Control and Prevention and Michigan’s Department of Environmental Quality—have been defunded, emasculated and handed over to corporate-friendly stooges. Our corrupt courts are part of a mirage of justice. The role of these government agencies and courts, and of the legislatures, is to sanction abuse rather than halt it.
The primacy of profit throughout the society takes precedence over life itself, including the life of the most vulnerable. This corporate system of power knows no limits. It has no internal restraints. It will sacrifice all of us, including our children, on the altar of corporate greed. In a functioning judicial system, Michigan Gov. Rick Snyder and Flint’s former emergency manager, Darnell Earley, along with all the regulatory officials who lied as a city was being sickened, would be in jail facing trial. ......................(more)
http://www.truthdig.com/report/item/flints_crisis_is_about_more_than_water_20160207
Chris Hedges: Flint’s Crisis Is About More Than Water
from truthdig:
by Chris Hedges
What is in the mind of someone who knowingly poisons children and impairs their lives? Why did the politicians, regulators and bureaucrats who knew the water in Flint, Mich., was toxic lie about the danger for months? What does it say about a society that is ruled by, and refuses to punish, those who willfully destroy the lives of children?
The crisis in Flint is far more ominous than lead-contaminated water. It is symptomatic of the collapse of our democracy. Corporate power is not held accountable for its crimes. Everything is up for sale, including children. Our regulatory agencies—including the federal Environmental Protection Agency, the Centers for Disease Control and Prevention and Michigan’s Department of Environmental Quality—have been defunded, emasculated and handed over to corporate-friendly stooges. Our corrupt courts are part of a mirage of justice. The role of these government agencies and courts, and of the legislatures, is to sanction abuse rather than halt it.
The primacy of profit throughout the society takes precedence over life itself, including the life of the most vulnerable. This corporate system of power knows no limits. It has no internal restraints. It will sacrifice all of us, including our children, on the altar of corporate greed. In a functioning judicial system, Michigan Gov. Rick Snyder and Flint’s former emergency manager, Darnell Earley, along with all the regulatory officials who lied as a city was being sickened, would be in jail facing trial. ......................(more)
http://www.truthdig.com/report/item/flints_crisis_is_about_more_than_water_20160207
February 9, 2016
from truthdig:
by Chris Hedges
What is in the mind of someone who knowingly poisons children and impairs their lives? Why did the politicians, regulators and bureaucrats who knew the water in Flint, Mich., was toxic lie about the danger for months? What does it say about a society that is ruled by, and refuses to punish, those who willfully destroy the lives of children?
The crisis in Flint is far more ominous than lead-contaminated water. It is symptomatic of the collapse of our democracy. Corporate power is not held accountable for its crimes. Everything is up for sale, including children. Our regulatory agencies—including the federal Environmental Protection Agency, the Centers for Disease Control and Prevention and Michigan’s Department of Environmental Quality—have been defunded, emasculated and handed over to corporate-friendly stooges. Our corrupt courts are part of a mirage of justice. The role of these government agencies and courts, and of the legislatures, is to sanction abuse rather than halt it.
The primacy of profit throughout the society takes precedence over life itself, including the life of the most vulnerable. This corporate system of power knows no limits. It has no internal restraints. It will sacrifice all of us, including our children, on the altar of corporate greed. In a functioning judicial system, Michigan Gov. Rick Snyder and Flint’s former emergency manager, Darnell Earley, along with all the regulatory officials who lied as a city was being sickened, would be in jail facing trial. ......................(more)
http://www.truthdig.com/report/item/flints_crisis_is_about_more_than_water_20160207
Chris Hedges: Flint’s Crisis Is About More Than Water
from truthdig:
by Chris Hedges
What is in the mind of someone who knowingly poisons children and impairs their lives? Why did the politicians, regulators and bureaucrats who knew the water in Flint, Mich., was toxic lie about the danger for months? What does it say about a society that is ruled by, and refuses to punish, those who willfully destroy the lives of children?
The crisis in Flint is far more ominous than lead-contaminated water. It is symptomatic of the collapse of our democracy. Corporate power is not held accountable for its crimes. Everything is up for sale, including children. Our regulatory agencies—including the federal Environmental Protection Agency, the Centers for Disease Control and Prevention and Michigan’s Department of Environmental Quality—have been defunded, emasculated and handed over to corporate-friendly stooges. Our corrupt courts are part of a mirage of justice. The role of these government agencies and courts, and of the legislatures, is to sanction abuse rather than halt it.
The primacy of profit throughout the society takes precedence over life itself, including the life of the most vulnerable. This corporate system of power knows no limits. It has no internal restraints. It will sacrifice all of us, including our children, on the altar of corporate greed. In a functioning judicial system, Michigan Gov. Rick Snyder and Flint’s former emergency manager, Darnell Earley, along with all the regulatory officials who lied as a city was being sickened, would be in jail facing trial. ......................(more)
http://www.truthdig.com/report/item/flints_crisis_is_about_more_than_water_20160207
February 6, 2016
Restaurant Industry Suddenly Tanks, Worst Plunge since the Beginning of the Financial Crisis
by Wolf Richter • February 3, 2016
[font color="blue"]Plunges like this only occur when something big is going on.[/font]
The restaurant industry has been unscathed by the economic slowdown. The meme is that Millennials like to spend their money on “experiences” – such as eating out, drinking at their favorite watering holes, and going places (and eating out) – rather than buying stuff, particularly stuff at brick-and-mortar stores.
These brick-and-mortar stores have been singing the blues of dismal sales, earnings warnings, layoffs, and store closings as consumers refuse to splurge. And to add insult to injury, consumers have been shifting their spending online. But the restaurant industry has been flying above the fray, benefiting from Millennials’ preference for “experiences.”
Or that was the meme. The National Restaurant Association just released its Restaurant Performance Index for December. And it suddenly plunged.
The RPI is a composite of the Current Situation Index and the Expectations Index, both of which track restaurant operators’ responses on same-store sales, traffic, labor, and capital expenditures. “Steady-state level” is 100. Values above indicate expansion, values below indicate contraction. In the data series going back to 2003, the RPI has ranged from its peak of 103.5 in 2004 to its low 96.5 during the worst moment of the Financial Crisis.
“As a result of broad-based declines in both current situation and expectations indicators,” – as the report started out – the RPI for December fell to 99.7, from 101.3 in November and from 102.1 in October, 2.4% in two months, the worst two-month plunge since early 2008, at the cusp of the Financial Crisis. .................(more)
http://wolfstreet.com/2016/02/03/restaurant-industry-suddenly-tanks-worst-plunge-since-the-beginning-of-the-financial-crisis/
Restaurant Industry Suddenly Tanks, Worst Plunge since the Beginning of the Financial Crisis
Restaurant Industry Suddenly Tanks, Worst Plunge since the Beginning of the Financial Crisis
by Wolf Richter • February 3, 2016
[font color="blue"]Plunges like this only occur when something big is going on.[/font]
The restaurant industry has been unscathed by the economic slowdown. The meme is that Millennials like to spend their money on “experiences” – such as eating out, drinking at their favorite watering holes, and going places (and eating out) – rather than buying stuff, particularly stuff at brick-and-mortar stores.
These brick-and-mortar stores have been singing the blues of dismal sales, earnings warnings, layoffs, and store closings as consumers refuse to splurge. And to add insult to injury, consumers have been shifting their spending online. But the restaurant industry has been flying above the fray, benefiting from Millennials’ preference for “experiences.”
Or that was the meme. The National Restaurant Association just released its Restaurant Performance Index for December. And it suddenly plunged.
The RPI is a composite of the Current Situation Index and the Expectations Index, both of which track restaurant operators’ responses on same-store sales, traffic, labor, and capital expenditures. “Steady-state level” is 100. Values above indicate expansion, values below indicate contraction. In the data series going back to 2003, the RPI has ranged from its peak of 103.5 in 2004 to its low 96.5 during the worst moment of the Financial Crisis.
“As a result of broad-based declines in both current situation and expectations indicators,” – as the report started out – the RPI for December fell to 99.7, from 101.3 in November and from 102.1 in October, 2.4% in two months, the worst two-month plunge since early 2008, at the cusp of the Financial Crisis. .................(more)
http://wolfstreet.com/2016/02/03/restaurant-industry-suddenly-tanks-worst-plunge-since-the-beginning-of-the-financial-crisis/
February 2, 2016
Yahoo Inc Chief Executive Marissa Mayer is set to reveal cost-cutting plans that include slashing 15 percent of the company's workforce, or roughly 1,600 jobs, and closing several business units, the Wall Street Journal reported on Monday.
The plans are expected to be announced after Yahoo's fourth-quarter results on Tuesday, the Journal reported, citing people familiar with the matter. (on.wsj.com/1Tx30jF) It did not specify which business units might be closed.
A Yahoo spokeswoman said the company could not comment during its quiet period before releasing earnings.
Activist investors have pressed Yahoo to sell its core business rather than spin it off, even though a sale would likely incur more taxes. ..............(more)
http://www.reuters.com/article/yahoo-redundancies-idUSKCN0VA33R
Not much joy at Yahoo!
Yahoo Inc Chief Executive Marissa Mayer is set to reveal cost-cutting plans that include slashing 15 percent of the company's workforce, or roughly 1,600 jobs, and closing several business units, the Wall Street Journal reported on Monday.
The plans are expected to be announced after Yahoo's fourth-quarter results on Tuesday, the Journal reported, citing people familiar with the matter. (on.wsj.com/1Tx30jF) It did not specify which business units might be closed.
A Yahoo spokeswoman said the company could not comment during its quiet period before releasing earnings.
Activist investors have pressed Yahoo to sell its core business rather than spin it off, even though a sale would likely incur more taxes. ..............(more)
http://www.reuters.com/article/yahoo-redundancies-idUSKCN0VA33R
February 2, 2016
Negative Interest Rates Already in Fed’s Official Scenario
by Wolf Richter • February 2, 2016
[font color="blue"]But forget QE-4.[/font]
The Germans, with Teutonic precision, call them “Punishment Interest.” Negative interest rates are spreading from the ECB’s negative deposit rate across the bond market and to some savings accounts in the Eurozone. The idea is to enrich existing bond holders and flog savers until their mood improves. Stock prices are allowed to get crushed by reality.
Negative interest rates destroy one of the most essential mechanisms in an economy: the pricing of risk. Investors end up taking huge risks with no reward. Many of them will get cleaned out down the road.
In Switzerland, punishment interest already causes “perverse unpredictable effects,” as mortgage rates have started to soar. It’s wreaking havoc in Denmark and Sweden. Bank of Canada Governor Stephen Poloz let the idea float that he’d unleash punishment interest to destroy the Canadian dollar. The Bank of Japan announced Friday morning – timed for maximum market effect – that it too would inflict negative interest rates on its subjects.
In the US, Ben Bernanke has been out there preaching to the choir about them. Over-indebted corporate America, except for the banks, would love this absurdity; it would allow them to actually make money off their mountain of debt.
“Potentially anything – including negative interest rates – would be on the table,” Fed Chair Janet Yellen told a House of Representatives committee in early November. ..................(more)
http://wolfstreet.com/2016/02/02/negative-interest-rates-already-in-feds-official-scenario/
Negative Interest Rates Already in Fed’s Official Scenario
Negative Interest Rates Already in Fed’s Official Scenario
by Wolf Richter • February 2, 2016
[font color="blue"]But forget QE-4.[/font]
The Germans, with Teutonic precision, call them “Punishment Interest.” Negative interest rates are spreading from the ECB’s negative deposit rate across the bond market and to some savings accounts in the Eurozone. The idea is to enrich existing bond holders and flog savers until their mood improves. Stock prices are allowed to get crushed by reality.
Negative interest rates destroy one of the most essential mechanisms in an economy: the pricing of risk. Investors end up taking huge risks with no reward. Many of them will get cleaned out down the road.
In Switzerland, punishment interest already causes “perverse unpredictable effects,” as mortgage rates have started to soar. It’s wreaking havoc in Denmark and Sweden. Bank of Canada Governor Stephen Poloz let the idea float that he’d unleash punishment interest to destroy the Canadian dollar. The Bank of Japan announced Friday morning – timed for maximum market effect – that it too would inflict negative interest rates on its subjects.
In the US, Ben Bernanke has been out there preaching to the choir about them. Over-indebted corporate America, except for the banks, would love this absurdity; it would allow them to actually make money off their mountain of debt.
“Potentially anything – including negative interest rates – would be on the table,” Fed Chair Janet Yellen told a House of Representatives committee in early November. ..................(more)
http://wolfstreet.com/2016/02/02/negative-interest-rates-already-in-feds-official-scenario/
February 1, 2016
by Jim Hightower
War is hell.
Unless, of course, you happen to be a global corporate peddler of rockets, drones, bombs, and all the other hellish weaponry of military conflict. In that case, war is manna from hell. So bring it on.
Indeed, it seems as if Beelzebub himself is in charge these days, with U.S. military forces enmeshed in at least 135 countries in 2015 alone. Plus, such chicken hawks as Donald Trump and Ted Cruz are maniacally beating their flabby chests and screeching for even more military adventurism.
This perpetual warmongering is music to the ears of the people who serve as the CEOs and biggest investors in the war machine. It means a windfall of perpetual profits for them. ..................(more)
http://www.truthdig.com/report/item/manna_from_hell_20160131
Jim Hightower: Manna From Hell
by Jim Hightower
War is hell.
Unless, of course, you happen to be a global corporate peddler of rockets, drones, bombs, and all the other hellish weaponry of military conflict. In that case, war is manna from hell. So bring it on.
Indeed, it seems as if Beelzebub himself is in charge these days, with U.S. military forces enmeshed in at least 135 countries in 2015 alone. Plus, such chicken hawks as Donald Trump and Ted Cruz are maniacally beating their flabby chests and screeching for even more military adventurism.
This perpetual warmongering is music to the ears of the people who serve as the CEOs and biggest investors in the war machine. It means a windfall of perpetual profits for them. ..................(more)
http://www.truthdig.com/report/item/manna_from_hell_20160131
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