What we’re reading (5/10)
“Repeat Bankruptcies Are Piling Up At Fastest Rate Since 2009” (Bloomberg). “The 11 repeat bankruptcies filed through April already tops the tally for all of 2021 or 2022 and the spate of Chapter 22 filings through the first four months of the year has been eclipsed only once since 2000, according to BankruptcyData…Ed Altman, a New York University finance professor and inventor of a popular default prediction metric, the Z-score, said firms too often leave Chapter 11 ‘looking like a failing company’ when it would be better for creditors to get paid in a liquidation. A second bankruptcy is a sign the first was a waste of capital, Altman said.”
“Icahn, Under Federal Investigation, Blasts Short Seller” (Wall Street Journal). “Icahn Enterprises IEP, the publicly traded firm controlled by Mr. Icahn, was targeted by short seller Hindenburg Research early this month. The next day, the U.S. Attorney’s Office for the Southern District of New York contacted Icahn Enterprises asking for information about the value of its assets, corporate governance, dividends and other topics, the firm said in a securities filing Wednesday.”
“Wealthy Americans Are Getting Hit Hardest By The Economy Slowing Down” (Yahoo! Finance). “Wealthier Americans aren't spending — or earning—like they used to. Data from Bank of America Institute out Wednesday reveals households making more than $125,000 have seen wage growth slow down faster than lower-income households while spending trends have followed a similar pattern. Higher-income households' discretionary spending on Bank of America credit and debit cards has slipped below lower- and middle-income groups since the start of this year.”
“DB Proxy Rate: Bank Lending Offsets Easing Financial Conditions” (Deutsche Bank). “There remains tremendous uncertainty about how recent bank stresses will evolve and how much they will tighten financial conditions. Based on our proxy rates, the further tightening in bank lending conditions has largely offset the easing from lower yields and other high-frequency variables but has not, on net, produced a further meaningful tightening. This update therefore raises some questions about whether tighter credit conditions will substitute for Fed rate increases as much as initially anticipated.”
“Electric Vehicle Illusions” (City Journal). “The rush to subsidize and mandate EVs is animated by a fatal conceit: the assumption that they will radically reduce CO2 emissions. That assumption is embedded orthodoxy not just among green pundits and administrators of the regulatory state but also among EV critics, who take issue with a forced transition mainly on grounds of lost freedoms, costs, and market distortions. But the truth is, because of the nature of uncertainties in global industrial ecosystems, no one really knows how much widespread adoption of EVs could reduce emissions, or whether they might even increase them.”
