To finance professionals, EBITDA is a proxy for corporate cash flow, while Adjusted EBITDA is a proxy for telling investors whatever they want to hear. Most of the time it involves a unjustifiably high cash flow number, one which has no basis in reality.
In yet another hit for the energy complex, EIA just cut their global oil demand forecast to 95.19 million barrels a day this year (down from 95.22 million in December’s outlook). The energy agency also increased its forecast for global production to 95.93 million barrels a day (up from 95.79 million last month). This pressured WTI Crude back off a brief bounce and pushed it to a 20-handle at $29.97 for the first time since December 2003.
Submitted by Adam Taggart via PeakProsperity.com,
Geologist Arthur Berman explains why today's low oil prices are not here to stay, something investors and consumers alike should be very aware of. The crazy-low prices we're currently experiencing are due to an oversupply created by geopolitics and (historic) easy credit, not by sustainable economics.
A few market participants have noticed that the US High Yield Energy sector's credit risk collapsed 170bps this morning according to Bloomberg's data. This is the biggest plunge (rally) in the index of "incredibly risky stuff" on record and in the face of new cycle lows in crude, borrowing bases contracting, and rig counts crashing, this seemed odd... well here is why the index collapsed (spoiler alert - do not get excited).
So this happened and everyone rejoiced...
But here is why...
It just never fails.
Earlier today, the 3 Year was the only place on the curve that was trading special in repo, at a rate of -0.35% as shown in the Stone McCarthy chart below, with no shortages at any other point:
That, as regular readers know, has been a nearly flawless predictor of auction strength, and the potential for a short squeeze into the 1pm issuance.