But it doesnt have to be a blank check. She was previously married to Christopher Roberts Wilford. 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. Has its bubble finally burst? 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. COVID-19 Origins: Investigating a "Complex and Grave Situation" Inside a Wuhan Lab. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". Recent and archived work by Bethany McLean for The New York Times. (AP Photo/Rick Bowmer), (Rick Bowmer, Copyright 2020 The Associated Press. Fracking, they said, was just manufacturing, in which process and human intelligence could reduce costs and conquer geology. Over the past 10 years, the entire energy industry has issued over $400 billion in high-yield debt. We could go even further. Contents 1 Early life and education 2 Career 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. Was Tiffany involved? She co-authored a book on the 2008 financial crisis titled All the Devils Are Here. Deaths, active cases . Latest trends. Nocera is a columnist for Bloomberg Opinion and co-author of Indentured, about the NCAA. Ad Choices. 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. 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 Vanity Fair contributing editor. . 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.. 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. McLean graduated from Hibbing High School in 1988. According to the Institutional Limited Partners Association. By signing up you agree to our User Agreement and Privacy Policy & Cookie Statement. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. After nearly bringing down the economy in 2008, how is it possible that Fannie Mae and Freddie Mac are still around? Traders last year at the New York Stock Exchange near the post that trades Anadarko Petroleum and Occidental Petroleum. Americas energy independence was an illusion created by cheap debt. Energy independence was a fever dream, fed by cheap debt and frothy capital markets. 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. You can see how all of this is playing out by looking at Occidental Petroleum. Thats because one big source of funding didnt dry up: private equity. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. 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. On the other hand, Democrats, including House Speaker Nancy Pelosi and powerful Representative Maxine Waters, have weighed in loudlyon the industrys behalf. "Dow 36,000" co-authors stand by book's premise. Bethany McLean. 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. Ever since Congress voted to hand out $2 trillion in taxpayer money to those hardest hit by the coronavirus pandemic, American businesses have been scrambling for a piece of the action. Its thanks to those who are able to contribute that were able to make the podcast free for anyone to listen to. 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.. Paying members will get access to perks like a. by Kate Aronoff, Alyssa Battistoni, Daniel Aldana Cohen, and Thea Riofrancos, and much more. Dont hesitate: sign up on Patreon today. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Tar Heel, North Carolina, United States. 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. (And not all private-equity firms care equally about all of the programs.) Private-equity managers won the financial crisis, as Bloomberg put it last fall. All rights reserved. Hot & Bothered is produced by Colin Kinniburgh. Almost everything thats happened since 2008 has tilted in their favor. Blackstones Schwarzman has ties to Trump. McLean started her career as an investment banking analyst for Goldman Sachs[2] and joined Vanity Fair as a contributing editor in 2008. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. 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. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate . 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. Exclusive: Inside the S--tshow That Was the Trump-Biden Transition. [16] McLean resides in Chicago with her children. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. The title and release date have not yet been determined. 500 energy sector fell, questions weve gathered from readers recently, adequate research and support for sufferers, according to the law firm Haynes and Boone. Monday - Friday 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. Sign up for our daily Hive newsletter and never miss a story. The SHIELD saliva-based testing is available for all ages. Bethany McLean is a journalist and contributing editor for Vanity Fair. So the era of low interest rates, which began with former Federal Reserve chairman Alan Greenspan and continues to this day, has been a huge boon to private-equity firms. This location, as with the other County contracted medical sheltering sites, will accept individuals from the local community that are referred through DPH. Coronavirus May Kill Our Fracking Fever Dream, https://www.nytimes.com/2020/04/10/opinion/sunday/coronavirus-texas-fracking-layoffs.html. Create a Website Account - Manage notification subscriptions, save form progress and more. Some of it may be on bank balance sheets. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. 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. Its thanks to those who are able to contribute that were able to make the podcast free for anyone to listen to. Actually, no. How Screwed Are Donald Trump and His Adult Children, and Other Questions You Might Have About the Staggering Fraud Lawsuit Against Them. (AP Photo/Rick Bowmer), Connect with the definitive source for global and local news. Americas energy independence was an illusion created by cheap debt. In 2019, Mclean launched a podcast titled Making a Killing on Luminary. https://www.cdc.gov/coronavirus/2019-ncov/your-health/covid-by-county.htm January 12, 2022 COVID Update Update on Bethany College COVID Response On the surface, it appears that two unforeseeable and random shocks are threatening our dream. 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. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. As a result, fracking stocks badly underperformed the market. (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. Here are some tips. This kind of rewrites the economics of oil trading.. FILE - In this Friday, June 12, 2020 file photo, a nurse uses a swab to perform a coronavirus test in Salt Lake City. A hydraulic fracturing site in Denton, Texas. 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. If you need help with the Public File, call 540-512-1558. [7][8] The Washington Post selected it as one of the best nonfiction books of 2015. The promised profits havent materialized. Are Crude Oil & Natural Gas Prices Linked? 1. Blame Congress for the meltdown, not Goldman Sachs. Private equity has made multibillionaires of executives like Blackstones Steve Schwarzman (net worth: $17.5 billion) and Apollos Leon Black ($7.5 billion). David Wallace Wells writes that by one estimate, 100,000 Americans could die each yearfrom the coronavirus. 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. Infuriatingly enough, the financial crisis in 2008 might even have saved private-equity firms from their sins. 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. Archive Wall Street Too Big to Fail, COVID-19 Edition: How Private Equity Is Winning the Coronavirus Crisis April 9, 2020 From the. Wed like to hear what you think about this or any of our articles. 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. 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. Its essential that we do the same today. 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. But there are ways to make it work better. Portfolio, a Penguin Random House imprint . The book, which she wrote from the couple's home, puts a human face to the crisis. 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. Some of it has been packaged into so-called collateralized loan obligations, pieces of which are held by hedge funds. 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. But with super-low interest rates, investors in search of yield were still willing to buy debt. And North American oil and gas drillers have almost $100 billion of debt that is set to mature in the next four years. More than 100,000 people already have died in this country from the virus. This is late 80s bad, a close observer of the industry says. 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. 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 that's left to tally is the damage. Music: Mercurias Meet Victor Rice, Carregar (Instrumental), courtesy of Total Running Time. [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]. Thats because some of the major investors in private-equity funds are public pension plans; at Blackstone, roughly one-third of the firms money comes from retirement plans set up to provide for over 30 million working-class Americans, according to someone with knowledge of its portfolio. Workers monitoring a hydraulic fracturing operation near Wink, Texas. January 2022 was the month with the highest average cases, while November 2020 was the month with the highest . And why not? 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 immunobiologist Akiko Iwasakiwrites that new vaccines, particular those delivered through the nose, may be part of the answer. The Next Financial Crisis Lurks Underground, Coronavirus May Kill Our Fracking Fever Dream. 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. Stopping that will require a creative effort to increase and sustain high levels of vaccination. The industrys lack of profits wasnt exactly a secret. James Glassman says his seven-year-old prediction that the Dow Jones industrial average will rise to 36,000 wasn't wrong, just early. The total number of . 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. This week, Ms. McLean begins promoting her new book, "All the Devils are Here," about the current financial crisis. COVID-19 Guidance for isolation and quarantine, COVID-19 Education and Outreach Materials Page. All rights reserved. On April 20, oil prices did something theyve never done before. Anyone can read what you share. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate. If you like the episode and want to hear more, sign up as a monthly member at patreon.com/hotbotheredclimate today. 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. Clients who show symptoms of COVID-19 (for example have a fever, cough, or difficulty breathing) and/or are waiting for their test results. Like so many other facets of the COVID-19 crisis, however, this unprecedented crash exposed long-running cracks in the facade. 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. [1] It details how the financial crisis bubbled up from a volatile, and bipartisan, mixture of government meddling and laissez-faire. 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.. Copyright 2023 WSLS.com is managed by Graham Digital and published by Graham Media Group, a division of Graham Holdings. 2023 Cond Nast. 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. It once seemed utterly unattainable until the advent of fracking, which unleashed a torrent of oil. McLean is a contributing editor at Vanity Fair and co-author of the Enron book "The Smartest Guys in the Room." Nocera. And more! Thats because oil fracking has never been financially viable. 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. Best-selling author Bethany McLean reveals the true story of fracking's impact - on Wall Street, the economy, and geopolitics. She resides in Chicago with her children. Previous to her current roles, McLean was an editor-at-large at Fortune Magazine. They have two children. Her two books are the The Smartest Guys in the Room: The Amazing. She has been married to Sean Murray Berkowitz since May 2008. The 42 Best Romantic Comedies of All Time, The 25 Best Shows on Netflix to Watch Right Now. 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? Like the big banks in 2008, private equity is holding us all hostage. Dylan Hollingsworth for The New York Times. 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. 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. If you need help with the Public File, call (713) 778-4745. 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. Driven partly by public pensions, the private-equity industry has mushroomed. As a result, private equity is now wound into the very fabric of our economy. on March 2.Read more about the C.D.C . Bethany McLean. 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. Now, it has been shut off. 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. (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.). The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Cond Nast. More than 100,000 people already have died in this country from the virus. 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. To revist this article, visit My Profile, then View saved stories. How concerning are things like long covid and reinfections? Joe Nocera is a journalist and column writer for Dealbook. She has co-authored multiple bestselling books, including The Smartest Guys in the Room and All the Devils Are Here. Even before the coronavirus crisis, the spigot was drying up. 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. 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. 500 energy sector fell 20 percent, marking the sectors largest drop on record. 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. When will the pandemic end? Hours 2023 Cond Nast. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. 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. The man who shot his girlfriend and five relatives at a birthday celebration had "control issues". She is known for her writing on the Enron scandal and the 2008 financial crisis. [citation needed], She authored an article on Enron for the March 5, 2001, issue of Fortune entitled, "Is Enron Overpriced? McLean is a contributing editor at Vanity Fair and co-author of the Enron book The Smartest Guys in the Room. What the Theranos trial says about the blurred lines between visionaries and frauds. [10][11] Copyright 2020 The Associated Press. How will the virus continue to change? 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. Is there any chance this could lead to prison time? [1] In 1992 she received a B.A. One of the key principles behind private equity is that increased leverageaka more debtcan make a business function more efficiently. 2 FOR DRIVE-THRU TESTING RESULTS: Lab samples are sent to an off-site laboratory and results may take 1 to 2 days or even longer in some instances or in times of peak demand. By Bess Levin . In May 2008, she married attorney Sean Berkowitz, the former Director of the United States Department of Justice Enron Task Force. The Wuhan Institute of Virology, the cutting-edge . 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. NEW YORK Business writers Bethany McLean and Joe Nocera are collaborating on a critical take of the U.S. response to the coronavirus pandemic. Use of this site constitutes acceptance of our User Agreement and Privacy Policy and Cookie Statement and Your California Privacy Rights. 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. 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. 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. 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. 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. 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. As a result, the stocks that make up the S.&P. 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. 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. 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. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. At least 1 in 303 residents have died from the coronavirus, a total of 2,512 deaths. He and McLean previously worked together on All the Devils Are Here: The Hidden History of the Financial Crisis, about the 2008 market crash. In reality, the dream was always an illusion, and its collapse was already underway. Vanity Fair may earn a portion of sales from products that are purchased through our site as part of our Affiliate Partnerships with retailers. sure to go down in history as one of the wildest business stories ever. Policymakers who wanted to tout energy independence disregarded all this, even as investors were starting to lose patience. [13][14][15] They divorced in 2020. Mortgages should be used to buy homes, not for refinancing. Bethany McLean is a . The Wuhan Institute of Virology, the cutting-edge . 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. From 2015 through 2019, private equity firms raised almost $80 billion in funds focused mostly on shale production, according to Barclays.