JPMorgan Readies $6.5 Billion Skechers Debt Sale for Next Week
JPMorgan Chase & Co. plans to kick off a $6.5 billion debt offering to support private equity firm 3G Capital 's purchase of footwear maker Skechers as soon as next week, according to a person with knowledge of the matter.
The financing is expected to include $4 billion of secured debt and $2.5 billion of unsecured debt, the latter of which would allow for a 'payment-in-kind' feature with a toggle option, Bloomberg previously reported. The PIK component means the borrower can choose whether to pay interest in cash or by issuing more debt.
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Forbes
30 minutes ago
- Forbes
Higher Oil Prices Mean Less GDP
Iran's supreme leader Ayatollah Ali Khamenei speaks after casting his ballot during the runoff ... More presidential election in Tehran on July 5, 2024. (Photo by ATTA KENARE / AFP) (Photo by ATTA KENARE/AFP via Getty Images) The shale revolution has been a huge boon for America, producing an enormous amount of income, tax revenue and employment as well as reducing CO2 emissions. At the same time, by reducing our net oil imports, they have substantially improved our energy security. But the simple metric of net imports understates the complexity of energy security. Energy vulnerability is often treated as nothing more than reliance on imports from foreign countries, and that is certainly a crucial element but hardly the only one. Conversely, the fact that the U.S. still imports as much as eight million barrels a day of oil overstates our vulnerability: lost imports would not mean a shortage for domestic consumers, as that oil is swapped out for domestic supplies for the sake of economic efficiency, and producers can simply retain crude that is currently exported. The Figure below breaks down the source of gross imports; the decline in oil from OPEC is pronounced, while the rise of Canadian oil imports, due to higher oil sands production, exaggerates the security of our supply, albeit only slightly. U.S. Oil Imports (thousand barrels per day) On the one hand, despite ongoing tension with Canada, they are unlikely to cut off sales to the U.S. for political reasons. Nevertheless, there is no guarantee that in a new disruption of global oil supply, such as from unrest in Russia or war in the Middle East, Canadian oil would continue to be delivered to American refiners. In theory, Canada could use the U.S. for the transshipment of oil to better paying overseas customers, although given the globalized nature of the oil market, prices should not be significantly different elsewhere. Of course, should American politicians (foolishly) respond to a global oil crisis by restricting exports of domestic crude, U.S. oil prices would presumably drop below global prices, encouraging Canadian companies to export their oil elsewhere. Such a populist move by the U.S. would be detrimental and the impact multiplied if politicians tried to prevent Canadian companies from selling their oil onwards, mostly through the Gulf Coast ports. Should, say, a country like China offer attractive deals to Canadian companies for additional supply (similar to what happened in 1979), the political calculus becomes more complex. But this highlights another way the globalized oil market affects energy security: even if the U.S. is well-supplied with oil, a global oil crisis will translate into higher domestic oil prices. Absent political intervention, U.S. prices would rise to match global oil prices, meaning even with our current energy independence, a new oil crisis would inflict economic damage. Certainly, now that the U.S. is a net exporter of oil, higher oil prices would improve not worsen the trade balance. Still, sending the money from East Coast consumers to Southwest producers will have a deflationary impact on the economy because higher oil prices have an effect similar to a tax hike. Consumers would spend more for gasoline and reduce other spending accordingly. It is generally thought that a tax hike lowers GDP by 2-3 times the increased taxes, so that an increase in taxes equal to 1% of GDP yields a 2-3% reduction in GDP. Tax Increases Reduce GDP | NBER An oil price increase does not have precisely the same effect, because the money goes not from the private sector to the government but from one part of the private sector (consumers) to another (oil producers). Still, a $10/barrel increase in oil prices equates to roughly $35 billion in higher household expenditures, or about 0.1% of GDP. So, back of the envelope calculation suggests that GDP would drop somewhere on the order of 0.2% for every $10/barrel increase in oil prices. This effect is clearly seen in historical GDP data, as the figure below shows, although there are obviously many confounding factors. In all likelihood, the impact now would be less than in the past because our oil trade balance is positive; net exports, at 2 million barrels per day, will translate into modest but significant economic benefits. Still, in the case of a prolonged period of $100 per barrel oil, which many think could be achieved if the Middle East situation worsens significantly, a GDP loss of 0.5% is quite likely. Change in Real GDP (percent) At present, it appears unlikely that Middle Eastern oil supply will be affected by the ongoing conflict between Iran and Israel. Attacks on shipping or the Straits of Hormuz would boost prices but are unlikely to persist beyond a few weeks. More worrisome would be an Israeli attack on Iranian oil facilities, although at present, such is not expected. So, $100 oil for several months would not automatically translate into a recession, but would have a notable impact on GDP growth, especially if the Fed raises interest rates as higher oil prices increase inflation. But an oil price spike will definitely worsen consumer and business confidence. As much as it would be nice for cash-rich Southwesterners to spend their increased income on Maine lobster and New England clam chowder, a prolonger period of higher oil prices--$100 or more—will be disruptive enough to threaten at least significant economic slowing and potentially tip us into a recession.
Bloomberg
44 minutes ago
- Bloomberg
Johnson & Johnson CEO: 'We're in the Golden Era of Medical Innovation'
Johnson & Johnson Chairman and CEO Joaquin Duato believes that we are now in a 'golden era' of innovation, particularly in the United States. Venture capital plays a vital early-stage role, but big pharma provides the infrastructure and market access. We visit Johnson & Johnson's innovation facility in Spring House to see how its early-stage innovation ecosystem serves patients and the local economy. (Source: Bloomberg)
Fox News
44 minutes ago
- Fox News
Fox News AI Newsletter: Hollywood studios sue 'bottomless pit of plagiarism'
IN TODAY'S NEWSLETTER:- Major Hollywood studios sue AI company over copyright infringement in landmark move- Meta's Zuckerberg aiming to dominate AI race with recruiting push for new 'superintelligence' team: report- OpenAI says this state will play central role in artificial intelligence development 'PIRACY IS PIRACY': Two major Hollywood studios are suing Midjourney, a popular AI image generator, over its use and distribution of intellectual property. AI RACE: Meta CEO Mark Zuckerberg is reportedly building a team of experts to develop artificial general intelligence (AGI) that can meet or exceed human capabilities. TECH HUB: New York is poised to play a central role in the development of artificial intelligence (AI), OpenAI executives told key business and civic leaders on Tuesday. APPLE FALLING BEHIND: Apple's annual Worldwide Developers Conference (WWDC) kicked off on Monday and runs through Friday. But the Cupertino-based company is not making us wait until the end. The major announcements have already been made, and there are quite a few. The headliners are new software versions for Macs, iPhones, iPads and Vision. FROM COAL TO CODE: This week, Amazon announced a $20 billion investment in artificial intelligence infrastructure in the form of new data centers, the largest in the commonwealth's history, according to the eCommerce giant. DIGITAL DEFENSE: A growing number of fire departments across the country are turning to artificial intelligence to help detect and respond to wildfires more quickly. SHIELD FROM BEIJING: Rep. Darin LaHood, R-Ill., is introducing a new bill Thursday imploring the National Security Administration (NSA) to develop an "AI security playbook" to stay ahead of threats from China and other foreign adversaries. ROBOT RALLY PARTNER: Finding a reliable tennis partner who matches your energy and skill level can be a challenge. Now, with Tenniix, an artificial intelligence-powered tennis robot from T-Apex, players of all abilities have a new way to practice and improve. DIGITAL DANGER ZONE: Scam ads on Facebook have evolved beyond the days of misspelled headlines and sketchy product photos. Today, many are powered by artificial intelligence, fueled by deepfake technology and distributed at scale through Facebook's own ad system. 'EXPONENTIAL RATE': Artificial intelligence is helping Chipotle rapidly grow its footprint, according to CEO Scott Boatwright. AI TAKEOVER THREAT: The hottest topic nowadays revolves around Artificial Intelligence (AI) and its potential to rapidly and imminently transform the world we live in — economically, socially, politically and even defensively. Regardless of whether you believe that the technology will be able to develop superintelligence and lead a metamorphosis of everything, the possibility that may come to fruition is a catalyst for more far-leftist control. FOLLOW FOX NEWS ON SOCIAL MEDIA FacebookInstagramYouTubeTwitterLinkedIn SIGN UP FOR OUR OTHER NEWSLETTERS Fox News FirstFox News OpinionFox News LifestyleFox News Health DOWNLOAD OUR APPS Fox NewsFox BusinessFox WeatherFox SportsTubi WATCH FOX NEWS ONLINE STREAM FOX NATION Stay up to date on the latest AI technology advancements and learn about the challenges and opportunities AI presents now and for the future with Fox News here.
