Check out the full Hot & Bothered archive here. Daily updates from Washington, Wall Street, and Silicon Valley. 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. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Recent and archived work by Bethany McLean for The New York Times. On March 9, the price of oil plunged by almost a third, its steepest one-day drop in almost 30 years. 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. [13][14][15] They divorced in 2020. 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. McLean is a contributing editor at Vanity Fair and co-author of the Enron book "The Smartest Guys in the Room." Nocera. Fracking, they said, was just manufacturing, in which process and human intelligence could reduce costs and conquer geology. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". 500 energy sector fell, questions weve gathered from readers recently, adequate research and support for sufferers, according to the law firm Haynes and Boone. From 2015 through 2019, private equity firms raised almost $80 billion in funds focused mostly on shale production, according to Barclays. Pension funds that have poured money into private equity firms may take a hit soon, too. 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. Anyone can read what you share. On the surface, it appears that two unforeseeable and random shocks are threatening our dream. How will the virus continue to change? To revist this article, visit My Profile, then View saved stories. This week, Kate and Daniel talk to Bethany McLean, author most recently of Saudi America: The Truth about Fracking and How It's 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. Rasmussen points out that after the financial crisis in 2008, the Federal Reserve set a limit on the amount of debt it considered prudent. today. Her two books are the The Smartest Guys in the Room: The Amazing. [citation needed], She authored an article on Enron for the March 5, 2001, issue of Fortune entitled, "Is Enron Overpriced? Certainly, President Trump, who has staked so much on the American shale industry, wants to save it. Has its bubble finally burst? A college student in Indiana died in her dorm room after testing positive for the coronavirus, school officials and her family said. Click here to take a moment and familiarize yourself with our Community Guidelines. Colombias Amazing Race to Build a $1,000 Ventilator Frontline Doctors Race to Learn the Mysteries of Coronavirus How Dr. Anthony Faucis Media Strategy Is Revolutionizing Coronavirus Messaging Can Americas Crowd-Driven Spectacles Return for the Fall Season? From the Archive: Following the Psychological Contagion That Fed the 2014 Ebola Outbreak. We could go even further. 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. Hot & Bothered is produced by Colin Kinniburgh. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. By signing up you agree to our User Agreement and Privacy Policy & Cookie Statement. (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. But there are ways to make it work better. All rights reserved. You can see how all of this is playing out by looking at Occidental Petroleum. Follow The New York Times Opinion section on Facebook, Twitter (@NYTopinion) and Instagram. So why should they be permitted to raid the federal Treasury in a time of crisis? Unfortunately, there isnt really an alternative to providing private equity with federal funds. 500 energy sector fell 20 percent, marking the sectors largest drop on record. If you need help with the Public File, call 540-512-1558. 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. [1] In 1992 she received a B.A. 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. The industrys total assets under management have hit a record $4.1 trillion. In the first half of 2019, when oil was around $55 a barrel, only a few top-tier companies were profitable. Coronavirus May Kill Our Fracking Fever Dream, https://www.nytimes.com/2020/04/10/opinion/sunday/coronavirus-texas-fracking-layoffs.html. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. In reality, the dream was always an illusion, and its collapse was already underway. All rights reserved. By Bess Levin . More than 100,000 people already have died in this country from the virus. 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 promised profits havent materialized. Copyright 2023 Click2Houston.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. [7][8] The Washington Post selected it as one of the best nonfiction books of 2015. Joe Nocera is a journalist and column writer for Dealbook. Bethany Nesbitt, 20, was found dead in a residence hall at. Even as the public equity and debt markets grew cautious, drilling continued. Over the past 10 years, the entire energy industry has issued over $400 billion in high-yield debt. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. Jack Ewings Faster, Higher, Farther is more than the story of a scandal. The politics dictating whether the private-equity industry will get its wishes are surprising. The immunobiologist Akiko Iwasakiwrites that new vaccines, particular those delivered through the nose, may be part of the answer. But among those angling for a federal handout is one of the wealthiest sectors of the American economy: private equity. 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.. Infuriatingly enough, the financial crisis in 2008 might even have saved private-equity firms from their sins. 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. She has been married to Sean Murray Berkowitz since May 2008. As early as 2018, some investors had begun to tell companies that they wanted to see free cash flow, and that they were tired of compensation models that rewarded executives with rich paydays for increasing production, but failed to take profits into account. This location, as with the other County contracted medical sheltering sites, will accept individuals from the local community that are referred through DPH. 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. Think of private-equity firms as the banks of the corona crisis: They are, for better or worse, too big to fail. 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. More than 100,000 people already have died in this country from the virus. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Workers monitoring a hydraulic fracturing operation near Wink, Texas. 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. About Bethany McLean is a contributing editor at Vanity Fair. 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. Almost everything thats happened since 2008 has tilted in their favor. Previous to her current roles, McLean was an editor-at-large at Fortune Magazine. 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 . This week, Ms. McLean begins promoting her new book, "All the Devils are Here," about the current financial crisis. According to the Institutional Limited Partners Association (ILPA), a lobbying group which represents CalPERs and other public investors, businesses backed by private equity employ more than 8.8 million Americans at over 35,000 companies, accounting for a staggering 5% of the United States GDP. This is late 80s bad, a close observer of the industry says. Manage all aspects of the daily operation for Ham Conversion, processing up to 1.5 million lbs/day . 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. A hydraulic fracturing site in Denton, Texas. 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. Here are some tips. 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. Bethany College will continue to adapt and collaborate as needed to encourage vaccines and boosters for staff and students. 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. James Glassman says his seven-year-old prediction that the Dow Jones industrial average will rise to 36,000 wasn't wrong, just early. All rights reserved). All rights reserved. Writer: Enron: The Smartest Guys in the Room. 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. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. Clients who show symptoms of COVID-19 (for example have a fever, cough, or difficulty breathing) and/or are waiting for their test results. Deaths, active cases . 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. As a subscriber, you have 10 gift articles to give each month. in English and mathematics from Williams College. Its thanks to those who are able to contribute that were able to make the podcast free for anyone to listen to. If you like the episode and want to hear more, sign up as a monthly member at patreon.com/hotbotheredclimate today. Looking for more? By Bethany McLean Coronavirus May Kill Our Fracking Fever Dream America's energy independence was an illusion created by cheap debt. 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. There are several pots of federal money that the private-equity industry is lobbying to access. Some of it has been packaged into so-called collateralized loan obligations, pieces of which are held by hedge funds. Latest trends. Private equity, of course, came of age in the 1980s, when greed was good and private-equity titans like KKRs Henry Kravis first burst into the limelight by taking over famed American manufacturers like RJR Nabisco. "Dow 36,000" co-authors stand by book's premise. COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. Driven partly by public pensions, the private-equity industry has mushroomed. Are Crude Oil & Natural Gas Prices Linked? 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. 1. [9], In September 2018, she published Saudi America: The Truth about Fracking and How It's Changing the World which examined the "fracking revolution" and U.S. energy independence. Music: Mercurias Meet Victor Rice, Carregar (Instrumental), courtesy of Total Running Time. Thats because oil fracking has never been financially viable. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. Blackstones Schwarzman has ties to Trump. 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. 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. And heres our email: letters@nytimes.com. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. 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. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. Whiting Petroleum, whose stock once traded for $150 a share, filed for bankruptcy. January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . 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. Archive Wall Street Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Coronavirus Crisis April 9, 2020 From the. More than 100,000 people already have died in this country from the virus. Not only should taxpayer funds not be used to pay management or consulting firms, she says, but companies that take the money should also, for instance, be required to include workers on their corporate boards and gradually increase their minimum wage to at least $15 an hour. And more! Bethany McLean is a Vanity Fair contributing editor. One of the key principles behind private equity is that increased leverageaka more debtcan make a business function more efficiently. But with super-low interest rates, investors in search of yield were still willing to buy debt. Fractivism: Corporate Bodies and Chemical Bonds, A Moderate Proposal: Nationalize The Fossil Fuel Industry, https://media.blubrry.com/belabored/dissentmagazine.org/mp3/24HotBothered.mp3. Fueled by debt and years of easy credit, Americas energy boom is on shaky footing. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". She is also a columnist at Yahoo Finance and a contributor to CNBC. Was Tiffany involved? All thats left to tally is the environmental and financial damage. 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. 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. COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. Thanks to the $2 trillion bipartisan bailout bill, the industrys coronavirus losses will belong to all of us. Private equity has made multibillionaires of executives like Blackstones Steve Schwarzman (net worth: $17.5 billion) and Apollos Leon Black ($7.5 billion). FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. A loophole in the tax code currently allows private-equity financiers to pay taxes on their returns at the lower rate for capital gains, rather than the higher rate for personal income. on March 2.Read more about the C.D.C . 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. Saudi America: The Truth About Fracking and How Its Changing the World., stocks that make up the S.&P. Thats because one big source of funding didnt dry up: private equity. 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. Investors in the equity of these companies have already seen the value of their holdings decimated. [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. 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. Blame Congress for the meltdown, not Goldman Sachs. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. And President Trump reveled in the rhetoric: We hadnt merely achieved independence, his administration said, but rather energy dominance.. Bill White wants to restore Americas historical proclivity for balanced budgets. Bethany McLean is a Vanity Fair contributing editor. After nearly bringing down the economy in 2008, how is it possible that Fannie Mae and Freddie Mac are still around? A journalist profiles the developers and devotees who have aided the rise of cybercurrency. According to the Institutional Limited Partners Association. 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. 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. 2023 Cond Nast. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. Like so many other facets of the COVID-19 crisis, however, this unprecedented crash exposed long-running cracks in the facade. Dec 2020 - Apr 20221 year 5 months. 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. In 2019, the American Investment Council (AIC), a lobbying group which represents private-equity giants like Blackstone, the Carlyle Group, Apollo Global Management, and KKR, declared that in order to continue to provide the benefits they guarantee, pensions must continue to invest in private equity.. 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 began as a contributor to Slate's Moneybox column, in 2010 and "The Bulldog" column in Fortune. McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate . 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. 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. (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.). Tar Heel, North Carolina, United States. In each of the past four years, according to data-provider Preqin, private-capital managers raised over $500 billion of new money to invest. The active outbreak list is intended to inform the public of the current COVID-19 outbreaks in Los Angeles County. Some of it may be on bank balance sheets. 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. That, too, is ending, as investors in such funds have become disillusioned. 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. According to the CARES Act, companies can only receive loans from the Small Business Administration if they commit to preserving jobs. 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. As for Pelosi, she doesnt want to see companies backed by venture capital excluded from federal relief, given her Silicon Valley constituents. This kind of rewrites the economics of oil trading.. The problem is, existing rules at the Small Business Administration, which is overseeing the program, have been widely interpretedas excludingloaning money to most mom-and-pop businesses that are controlled by large parent companiesincluding private-equity firms. Now, it has been shut off. To revisit this article, visit My Profile, thenView saved stories. But they wont fix its fundamental problem with profitability. 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. To revisit this article, select My Account, thenView saved stories. (And not all private-equity firms care equally about all of the programs.) To keep growing, companies have to keep plowing billions back into the ground. The community level of Covid-19 in McLean County is low based on cases and hospitalizations, according to the most recent update from the C.D.C. Contents 1 Early life and education 2 Career Bethany McLean is a Vanity Fair contributing editor. She has suggestions for how to approach the problem. Bethany McLean is a contributing editor at Vanity Fair and the author of "Saudi America: The Truth About Fracking and How It's Changing the World." The Power Law Venture Capital and the . As a group of scientists who study virusesexplains, Theres no reason, at least biologically, that the virus wont continue to evolve.From a different angle, the science writer David Quammen surveys some of the highly effective tools and techniques that are now available for studying Covid and other viruses, but notes that such knowledge alone wont blunt the danger. 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 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. Which explains why ILPA wrote to Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell last week, arguing that companies backed by private equity should be allowed to access the relief funds provided in the CARES Act. There were rumblings that shale companies would seek a federal lifeline. In 2019, Mclean launched a podcast titled Making a Killing on Luminary. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. How exactly did the alleged illegal activity go down? The industrys $1.5 trillion in cash on hand is also the highest on recordand more than double what it was five years ago, according to Preqin. (This may not surprise anyone who is attempting to be productive while working in close quarters with their children.). Monday - Friday The private-equity industry also wants the companies they have invested in to have access to the $454 billion being doled out through the Treasury, an amount that the Fed said could be leveraged into over $2 trillion. These cookies are used to collect information on how users interact with Chicago Booth websites allowing us to improve the user experience and optimize our site where needed based on these interactions. But that didnt seem to matter, because low interest rates facilitated private equity in another way. 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. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate. Occidental is just one piece of the puzzle.
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