Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate . The Next Financial Crisis Lurks Underground, Coronavirus May Kill Our Fracking Fever Dream. 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. 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. Confirmed case data are from the Department of Public Health's communicable disease surveillance database. Create a Website Account - Manage notification subscriptions, save form progress and more. 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. 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. 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. If you like the episode and want to hear more, sign up as a monthly member at patreon.com/hotbotheredclimate today. On April 20, oil prices did something theyve never done before. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Restaurants and hotels owned by big chains have already received exemptions granting them access to the relief funds, regardless of how many people their parent companies employ. Bethany McLean | Chicago Booth Review Bethany Mclean - KPRC Investors in the equity of these companies have already seen the value of their holdings decimated. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. As a result, the stocks that make up the S.&P. The industrys total assets under management have hit a record $4.1 trillion. She is also a columnist at Yahoo Finance and a contributor to CNBC. Manage all aspects of the daily operation for Ham Conversion, processing up to 1.5 million lbs/day . Thats because oil fracking has never been financially viable. Music: Mercurias Meet Victor Rice, Carregar (Instrumental), courtesy of Total Running Time. Americas energy independence was an illusion created by cheap debt. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. A hydraulic fracturing site in Denton, Texas. 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. 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.. 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. 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. At least 1 in 303 residents have died from the coronavirus, a total of 2,512 deaths. More than 100,000 people already have died in this country from the virus. Veuer's Tony Spitz has the details. 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. 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. Bethany McLean. As for Pelosi, she doesnt want to see companies backed by venture capital excluded from federal relief, given her Silicon Valley constituents. It once seemed utterly unattainable until the advent of fracking, which unleashed a torrent of oil. McLean started her career as an investment banking analyst for Goldman Sachs[2] and joined Vanity Fair as a contributing editor in 2008. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. Recent and archived work by Bethany McLean for The New York Times. One of the key principles behind private equity is that increased leverageaka more debtcan make a business function more efficiently. Coronavirus May Kill Our Fracking Fever Dream - The New York Times By Bess Levin . 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. Bethany McLean is a journalist and contributing editor for Vanity Fair. Its still unclear where most of this debt is held. 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. 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. 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. Check out the full Hot & Bothered archive here. Portfolio, a Penguin Random House imprint . 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. On the other hand, Democrats, including House Speaker Nancy Pelosi and powerful Representative Maxine Waters, have weighed in loudlyon the industrys behalf. Coronavirus Resource Center: Testing and Vaccine Updates - CVS But there are ways to make it work better. Joe Nocera is a journalist and column writer for Dealbook. 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. CORONAVIRUS (COVID-19) - McLean County Health, IL FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. In the first half of 2019, when oil was around $55 a barrel, only a few top-tier companies were profitable. And why not? Making a Killing with Bethany McLean on Apple Podcasts 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. 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. 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. Daily updates from Washington, Wall Street, and Silicon Valley. 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. The big banks emerged from the financial crisis victorious, but also subject to a host of new regulations designed to reduce leverage and stabilize the economy. All thats left to tally is the environmental and financial 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. 2023 Cond Nast. 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. 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. All information these cookies collect is aggregated and therefore anonymous . [citation needed] She began as a contributor to Slate's Moneybox column, in 2010 and "The Bulldog" column in Fortune. The politics dictating whether the private-equity industry will get its wishes are surprising. She has been married to Sean Murray Berkowitz since May 2008. If private equity suffers, the blow will reverberate throughout the entire economy. Tens of thousands of Texans are being laid off in the Permian Basin and other parts of the state, and the whole industry is bracing for worse. We could close that, once and for all. To revisit this article, select My Account, thenView saved stories. I dont think any of us can really believe what we saw today, one industry analyst told AP. McLean is a contributing editor at Vanity Fair and co-author of the Enron book "The Smartest Guys in the Room." Nocera. Dylan Hollingsworth for The New York Times. Monday - Friday On the surface, it appears that two unforeseeable and random shocks are threatening our dream. Bethany McLean Latest Articles | Vanity Fair Coronavirus May Kill Our Fracking Fever Dream, https://www.nytimes.com/2020/04/10/opinion/sunday/coronavirus-texas-fracking-layoffs.html. 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. 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. The industrys boosters argue that technological gains, such as drilling ever bigger wells, and clustering wells more tightly together to reduce the cost of moving equipment, eventually would lead to a gusher of profits. But among those angling for a federal handout is one of the wealthiest sectors of the American economy: private equity. Blame Congress for the meltdown, not Goldman Sachs. They subprimed the American energy ecosystem, says a longtime energy market observer. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . 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 2018, according to analytics firm eVestment, pension funds in the U.S. and the U.K. pumped 27% of their fresh allocations of money into private-equity funds, up from 25% the year before. 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. Copyright 2023 Click2Houston.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. Best-selling author Bethany McLean reveals the true story of fracking's impact - on Wall Street, the economy, and geopolitics. Some of it has been packaged into so-called collateralized loan obligations, pieces of which are held by hedge funds. David Wallace Wells writes that by one estimate. Getting the government out of the housing market would mean saying goodbye to the 30-year mortgage. Bethany McLean is a Vanity Fair contributing editor. 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. There are several pots of federal money that the private-equity industry is lobbying to access. And more! She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. Almost everything thats happened since 2008 has tilted in their favor. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now. 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. 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. 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. 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. Was Tiffany involved? By Bethany McLean Coronavirus May Kill Our Fracking Fever Dream America's energy independence was an illusion created by cheap debt. Certainly, President Trump, who has staked so much on the American shale industry, wants to save it. And President Trump reveled in the rhetoric: We hadnt merely achieved independence, his administration said, but rather energy dominance.. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Bethany McLean. Ad Choices. The book, which she wrote from the couple's home, puts a human face to the crisis. But that didnt seem to matter, because low interest rates facilitated private equity in another way. 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. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. Even as the public equity and debt markets grew cautious, drilling continued. 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. The typical fee structure in private equity is the so-called 2 and 20, which means that a fund collects a fee of 2% of the total assets it manages, as well as 20% of any gains on its investments after a certain return is achieved. What could endemic Covid look like? Infuriatingly enough, the financial crisis in 2008 might even have saved private-equity firms from their sins. Even before the COVID crisis, there were questions about how well private-equity investments were actually performing. They have two children. She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. 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 .