Business

One of the more impressive short squeezes in recent history took place in the first two weeks of March, when the stock of distressed Peabody Energy, the largest U.S. coal producer which employs 8,300 workers, exploded higher from just $2.50 per share at the start of the month to a whopping $6.50 just last week.

Many scratched their heads at this move as nothing fundamental had changed in the company's deteriorating operations, and its bonds are among the most distressed issues trading currently (with upcoming interest payments as we profiled last night).

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Today Janet Yellen and the FOMC will go back to square one and try to reset global expectations unleashed by the ill-fated December rate "policy mistake" hike, when at 2pm the Fed will announce assessment of the economy (even if not rate hike is expected today) followed by Yellen press conference half an hour later.

By EconMatters

Over the past several weeks, courtesy of the jump in oil prices from 13 years lows, the narrowly reopened window granting some companies the chance to sell equity and in some cases debt (and promptly use the proceeds to repay their secured lenders), and the various last-ditch extensions afforded to near-default oil and gas companies, the dire reality of the default wave about to be unleashed in the shale patch has been swept under the rug, if only briefly.

That is about to change.