In a world in which the average hedge fund has failed to outperform the stock market for 8 years running, many have asked themselves what is the point of paying 2 and (not so much 20) to consistently underperform a global asset class which is now actively micromanaged by central banks themselves.
Following its recent critical profile by Bloomberg which earlier this week penned, "Wells Fargo Misjudged the Risks of Energy Financing", which came about 4 months after we wrote an almost identical report, the biggest US bank by market cap knew it had to reveal more than just the usual placeholder data in its investor presentation today. Sure enough, Warren Buffett's favorite bank finally opened its books more than usual as concerns built about its $17.4 billion in total outstanding oil and energy loans (at the end of 2015). This is what it revealed.
Following yesterday's historic bankruptcy of the world's largest coal miner Peabody Energy, the defaults continue hot and heavy overnight when first Energy XXI, which had already warned it would unlikely make its bond payments, filed for a prepack Chapter 11, and then Gulf Keystone announced it would delay a bond payment.
This is what XXI posted overnight to explain its prepackaged bankruptcy:
Energy XXI Enters Restructuring Support Agreement With Second Lien Noteholders to Strengthen Balance Sheet and Reduce Debt
'Nothing to see here, move along' is the message from embattled once-hedge-fund-darling SunEdison following its Valeant-esque self-investigation. Despite finding 'wrongdoing' by a former employee in talks over a failed acquisition and that its own executives fostered an "overly optimistic culture," SUNE officials found no misstatements in financial statements. The stocks is 75% higher in the pre-market on this 'good' news (remember BTU?).
Having surged to its highest since 2008 in February, Core CPI's YoY gain inched back from 2.3% to 2.2% YoY in March hovering at post-crisis highs. The food index declined in March, as did the cost of 'shelter' and medical care but used cars and truck prices declined, as we noted previously.
Still above Fed "mandate" levels and near 8 year highs...