News 

Federal ‘Transparency’ Bill Endangers Songwriters’ Secret Weapon for Getting Paid

“Along with a database, the bill would establish rules that could take away the leverage rightsholders use to make sure they get paid” writes Robert Levine for billboard.com. Rightsholders that don’t maintain sufficiently accurate records — the bill doesn’t define a standard — would lose their legal leverage. Source: billboard.com Share This:

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Futures News 

All-time record options bets on volatility spook Wall Street over leverage risk

“The CBOE announced VIX options volume hit 2.56 million contracts on Thursday, a record for a single day” writes Dimaggio Kalish for cnbc.com. Options experts are saying Thursday’s record volume in volatility derivatives bets may signal a dangerous problem with the size of volatility-linked trading products.The focus is on the CBOE volatility index, a key measure of market expectations for near-term volatility as conveyed by the price of S&P 500 index options.One accomplished options trader said the dramatic one-day VIX surge Thursday likely stemmed from traders being forced to close…

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News Stocks 

Papa John’s stock soars 12.5% as company plans to buy back $500m in shares

“Shares of the company spiked 12.5 percent after the company said that it was raising its leverage over the next 12 months and would be repurchasing $500 million in shares” writes Source Papa John’s for cnbc.com. While the company outpaced analysts’ expectations of earnings of 64 cents per share, the pizza giant fell short of the $439 million revenue forecast. Source: cnbc.com Share This:

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News Oil 

Risks of large syndicated bank loans remain high, regulators say

“Risk in the portfolio of large syndicated bank loans declined a bit in the past year but still remains elevated, according to a joint annual report from three U.S. bank regulatory agencies released Wednesday” writes Senior Economics Reporter for marketwatch.com. The high level of credit risk “stems mostly from distressed borrowers in the oil and gas sector,” and other industry sector borrowers exhibiting excessive leverage,” the report said.Since 2014, the decline in oil prices has led to a significant increase in adversely rated credits, the report said. The agencies noted…

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News 

Direct Lending Funds’ Fading All-Weather Appeal

“However a small but growing group of those who embraced direct lending after the 2007-2009 financial crisis said they are now significantly reducing their exposure or avoiding direct lending investments entirely” writes Lawrence Delevingne for reuters.com. According to Preqin, U.S. direct lending funds soared from about $33 billion in late 2008 to around $100 billion in June 2016.But about two-thirds of funds have lock-up periods of a year or less, including none at all, according to an eVestment review of 71 direct lending and asset-based lending funds for Reuters.Nearly 200…

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News 

Lyft wants more leverage in the self-driving ecosystem so it’s building its own tech

“Matthiesen told Recode that the company has been transparent with its self-driving tech partners Waymo and nuTonomy about this since the beginning” writes Jul Edt for recode.net. The company already works with self-driving tech companies, like Waymo or nuTonomy, which are expected to plug their tech into Lyft’s network of cars.By contrast, Alphabet’s self-driving car division, Waymo, is building some of its own hardware, like the laser-based radars called lidar, in a bid to supply carmakers and other self-driving technology companies. Source: recode.net Share This:

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Lyft’s Late Entry Into Self-Driving Cars Gives It Leverage

“One thing is clear: Building its own autonomous vehicle technology gives Lyft more leverage in negotiations with other companies” writes unknown author for bloomberg.com. In an industry that loves to lose money, Lyft had a cheaper option.Lyft just needs to ensure that it has leverage and that autonomous vehicle companies, automakers and everyone else is as close to an interchangeable commodity as possible.Uber Technologies Inc. is sinking hundreds of millions, if not billions, of dollars into its autonomous vehicle work. Source: bloomberg.com Share This:

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Moody’s says it may downgrade McCormick by three notches after food deal

“McCormick would actually use $3.7 billion of debt to fund the deal and it would take it several years to come back to its pre-deal credit profile” writes Ciara Linnane for marketwatch.com. Inc.’s MKC, -5.24% A2 rating on review for a possible three-notch downgrade Wednesday, after the company unveiled plans to acquire Reckitt Benckiser Group Plc.’s food division for $4.2 billion.”This significant increase in financial leverage overshadows the benefits of the acquisition and results in a credit profile that is no longer consistent with its prior rating.”. “McCormick is acquiring…

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Markets News 

A $30 billion hedge fund identified a potential trigger for ‘the next financial crisis’

“That low volatility could be the harbinger of a crisis to come” writes Rachael Levy for businessinsider.sg. Baupost Group, a $30 billion hedge fund, has laid out a road map for market chaos.In a second quarterly private letter that was reviewed by Business Insider, Baupost said that the problem lies with a signature feature of current markets: low volatility. Source: businessinsider.sg Share This:

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Debt ceiling debate gives Congress opportunity to chart new fiscal course

“The upcoming debt debate gives members of Congress, and the people they represent, an opportunity to consider their options and to chart a new course” writes James Wallner for washingtonexaminer.com. In a budgetary sleight-of-hand, Congress suspended the $18.11 trillion debt ceiling when it was last confronted with the issue in 2015.If the debt ceiling is not raised by then, the government will be forced to operate on incoming revenue.While taking such steps would be disruptive in the near-term, simply raising the debt ceiling without simultaneously enacting fiscal reforms would be…

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