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. She is also a columnist at Yahoo Finance and a contributor to CNBC. 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. Hours He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. TDD: (800) 526-0844 At least 1 in 303 residents have died from the coronavirus, a total of 2,512 deaths. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. 1. As a subscriber, you have 10 gift articles to give each month. More than 100,000 people already have died in this country from the virus. The immunobiologist Akiko Iwasakiwrites that new vaccines, particular those delivered through the nose, may be part of the answer. . All rights reserved). In the first half of 2019, when oil was around $55 a barrel, only a few top-tier companies were profitable. Even before the coronavirus crisis, the spigot was drying up. The SHIELD saliva-based testing is available for all ages. Joe Nocera is a journalist and column writer for Dealbook. 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. Thats because one big source of funding didnt dry up: private equity. (AP Photo/Rick Bowmer), (Rick Bowmer, Copyright 2020 The Associated Press. 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. Business and Society Lecture features journalist Bethany McLean All the Devils Are Here - Wikipedia Over the past 10 years, the entire energy industry has issued over $400 billion in high-yield debt. 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. Latest trends. 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. Elizabeth Holmes Was Found Guilty, But Was She Fundamentally - Forbes The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. Even as the public equity and debt markets grew cautious, drilling continued. Archive Wall Street Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Coronavirus Crisis April 9, 2020 From the. By Bess Levin . 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. 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. 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. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. The fracking boom that drove a decade of record U.S. oil and gas production was never really profitable to begin with. The politics dictating whether the private-equity industry will get its wishes are surprising. Fueled by debt and years of easy credit, Americas energy boom is on shaky footing. Infuriatingly enough, the financial crisis in 2008 might even have saved private-equity firms from their sins. Almost everything thats happened since 2008 has tilted in their favor. Music: Mercurias Meet Victor Rice, Carregar (Instrumental), courtesy of Total Running Time. COVID-19 Locations & Demographics - LA County Department of Public Health January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . McLean graduated from Hibbing High School in 1988. Waters, in her letter, argues for placing even more strings on the money taken by private-equity-backed companies. Hot & Bothered is produced by Colin Kinniburgh. Some of it may be on bank balance sheets. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. Manage all aspects of the daily operation for Ham Conversion, processing up to 1.5 million lbs/day . Previous to her current roles, McLean was an editor-at-large at Fortune Magazine. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. Is there any chance this could lead to prison time? Bethany McLean is a Vanity Fair contributing editor. Pension funds that have poured money into private equity firms may take a hit soon, too. Portfolio, a Penguin Random House imprint . 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. Thanks to the $2 trillion bipartisan bailout bill, the industrys coronavirus losses will belong to all of us. We could go even further. . How concerning are things like long covid and reinfections? [16] McLean resides in Chicago with her children. Confirmed case data are from the Department of Public Health's communicable disease surveillance database. According to the CARES Act, companies can only receive loans from the Small Business Administration if they commit to preserving jobs. David Wallace Wells writes that by one estimate, 100,000 Americans could die each yearfrom the coronavirus. 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. In 2019, Mclean launched a podcast titled Making a Killing on Luminary. [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. Occidental is just one piece of the puzzle. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Like so many other facets of the COVID-19 crisis, however, this unprecedented crash exposed long-running cracks in the facade. Daily updates from Washington, Wall Street, and Silicon Valley. By now, it should be abundantly clear that the current shale oil business model does not work even for the very best companies in the industry, the investment firm SailingStone Capital Partners explained in a recent note. Bethany Nesbitt, 20, was found dead in a residence hall at. 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. 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. But they wont fix its fundamental problem with profitability. Its thanks to those who are able to contribute that were able to make the podcast free for anyone to listen to. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. How will the virus continue to change? You can see how all of this is playing out by looking at Occidental Petroleum. 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. The industrys lack of profits wasnt exactly a secret. 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. 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. What could endemic Covid look like? Copyright 2020 The Associated Press. Bethany McLean - Contributing Editor - Vanity Fair | LinkedIn Americas energy independence was an illusion created by cheap debt. 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. All thats left to tally is the environmental and financial damage. No food or drink for one hour prior to testing. 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. Nursing home COVID-19 outbreak reported in Merced County, CA | Merced All thats left to tally is the damage. COVID-19 Guidance for isolation and quarantine, COVID-19 Education and Outreach Materials Page. [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. How Screwed Are Donald Trump and His Adult Children, and Other Questions You Might Have About the Staggering Fraud Lawsuit Against Them. [1] In 1992 she received a B.A. Getting the government out of the housing market would mean saying goodbye to the 30-year mortgage. This location, as with the other County contracted medical sheltering sites, will accept individuals from the local community that are referred through DPH. She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. 2023 Cond Nast. She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. Copyright 2023 Click2Houston.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. This kind of rewrites the economics of oil trading.. 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? on March 2.Read more about the C.D.C . In reality, the dream was always an illusion, and its collapse was already underway. And why not? From 2015 through 2019, private equity firms raised almost $80 billion in funds focused mostly on shale production, according to Barclays. 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. [12], McLean married Chris Wilford in 2000 and divorced in 2006. 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. After nearly bringing down the economy in 2008, how is it possible that Fannie Mae and Freddie Mac are still around? 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.. Bethany McLean - The New York Times governor announced on Tuesday that he will convene a grand jury to investigate "crimes and wrongdoing" related to COVID-19 vaccines. 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. 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 the surface, it appears that two unforeseeable and random shocks are threatening our dream. Exclusive: Inside the S--tshow That Was the Trump-Biden Transition. As a result, private equity is now wound into the very fabric of our economy. 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. All we know for sure is that fracking company executives and private equity financiers have made a fortune by touting the myth of energy independence and they wont be the ones who have to pick up the pieces., Bethany McLean, a contributing editor at Vanity Fair, is the author of Saudi America: The Truth About Fracking and How Its Changing the World.. To revisit this article, visit My Profile, thenView saved stories. Bethany McLean is a . Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. Bethany McLean. Here are some tips. Ad Choices. The total number of . As for Pelosi, she doesnt want to see companies backed by venture capital excluded from federal relief, given her Silicon Valley constituents. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". 2023 Cond Nast. 1 FOR PHARMACISTS PRESCRIBING PAXLOVID: This service is available in all locations, with the exception of those in New Hampshire. Coronavirus May Kill Our Fracking Fever Dream - The New York Times 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. 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. Confirmed cases include those reported since the beginning of the current active outbreak and may include cases that . A journalist profiles the developers and devotees who have aided the rise of cybercurrency. 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. All rights reserved. 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. 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. Mortgages should be used to buy homes, not for refinancing. As a result, fracking stocks badly underperformed the market. [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]. 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. 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. Actually, no. 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. McLean County reports 182 new COVID cases - pantagraph.com 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. 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.. CORONAVIRUS (COVID-19) - McLean County Health, IL 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. today. Americas energy independence was an illusion created by cheap debt. 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. 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. Enron tale author Bethany McLean has a new book she wrote from her COVID-19: Medical Sheltering at the Bell Gardens Quality Inn and Suites But there are ways to make it work better. 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. Think of private-equity firms as the banks of the corona crisis: They are, for better or worse, too big to fail. BETHANY MCLEAN - wsls.com This is late 80s bad, a close observer of the industry says. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. Energy independence was a fever dream, fed by cheap debt and frothy capital markets. 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. She is a writer, known for Enron: The Smartest Guys in the Room (2005), Independent Lens (1999) and PBS NewsHour (1975). 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 . 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. In May 2008, she married attorney Sean Berkowitz, the former Director of the United States Department of Justice Enron Task Force. Driven partly by public pensions, the private-equity industry has mushroomed. Coronavirus Resource Center: Testing and Vaccine Updates - CVS 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. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. If you like the episode and want to hear more, sign up as a monthly member at patreon.com/hotbotheredclimate today.