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Extend & Pretend
“…in leveraged loans & middle-market credit we see lenders getting coerced by equity sponsors” - Dan Zwirn
***Editor’s Note: The International Red Cross / Red Crescent is apparently active - on the ground, in Beirut - providing humanitarian support. They are accepting donations to support the disaster response efforts.***
Ideally, regulators should function something like the Japanese train system:
And predictable, down to the second
Around the world, recent regulatory actions have resembled the mid-19th century American railroads…
Dangerous, sometimes deadly
But putting fatal tragedies asides, chaotic regulatory regimes have - both directly & indirectly - made headlines this week for a variety of reasons:
The DAPL pipeline appeal
BNP’s Trade Finance review
We’re not saying that there’s too much or too little regulation…
… but rather that there seems to be less-and-less of a rhyme-or-reason to regulatory action.
Arbitrary like the rules of the street.
An erratic environment that harkens back to the lyrics of a G-funk classic -
We regulate any stealing of his property - Warren G
Unfortunately, there’s a growing edge in business & investing…
.. and - that edge - is in knowing / influencing what how government is going to regulate -
If you’re watching, expect to see pandering
If you’re playing, you’d better be lobbying
We don’t like it. We don’t endorse it.
We’re just saying - don’t be surprised to see private sector games become increasingly political -
That’s generally not a good sign.
“…we identified an error in the future production costs component of the estimated present value ("PV-10") of our reserves…
We’ve beat this topic to death…
So, here’s a couple noteworthy threads from others:
We blindly recommend reading anything Mauboussin publishes.
Hellfighters: Red, Coots & Boots and the story of oil well firefighters
The RRC’s latest on flaring
Ring update from Josh Pollard
Champions League, Hockey, MLB, NBA… pick your poison - we’ll be back on Tuesday - catch y’all then -