This Week With Puerto Rico

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Hot Mess

What a disaster. Lots of noise on this and so here goes PETITION stream-of-consciousness mode. Trump spoke and Lawrence Summers agreed about wiping out PR's debt. But, wait! Maybe, just maybe, the process has to play out ("Hello, right hand. Meet left hand."). The bond bloodbath that wasn't. Choice quote, "There were, quantitatively speaking, twice the number of buyers than sellers, of Puerto Rico’s benchmark security, the 8 percent general obligation bonds." Sounds like one of those sellers may be MatlinPatterson which likely isn't the last hedge fund to close its doors due, at least in part, to the Puerto Rico morass. Paulson & Co. continues to sh*t away the glow it gained during the financial crisis. The Baupost Group, a Boston-based hedge fund managed by billionaire Seth Klarman, has significant exposure. As do some others. And some think that exposure will equate to 10-to-20 cents-on-the-dollar (video). And, many think Washington is to blame for a lot of this mess. Finally, a special report from Reuters on the situation.

Oil & Gas (Long Reason...for Once)

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Oil & Gas Execs Disagree with Trump Administration Plans

Offshore exploration and production is a relatively expensive process unjustified by $50 barrels of oil. That, though, didn't stop the Trump administration from considering changes to 11 marine sanctuaries that would allow for more drill-baby-drilling. All in the supposed name of jobs and "energy needs." Energy industry reps, however, are lukewarm on the prospect. Because it may damage marine habitats and coral reefs, you ask? Of course not. Because it wouldn't be economical? Bingo! Indeed, shale drillers - after shedding costs to the bone - will, according to Moody's, continue to struggle if oil remains in the $50 range. Elsewhere in gas world, coal and nat gas are likely to fight for marginal megawatt-hours like "cats in a sack." We love that. You're definitely gonna be hearing that phrase again in the future.

Suniva & SolarWorld May Land Their Hail Mary

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A Critical Decision on Solar is Coming

Remember how we previously told youabout bankrupt Suniva Inc. and SolarWorld AG's efforts to get the Trump Administration to levy tariffs on foreign solar imports (looking at you China)? Well, the US International Trade Commission ruled on Friday that domestic makers are, in fact, hurt by foreign imports. There are a few admin steps before it goes to Trump but this could get interesting. Choice quote: "Hopper argues Suniva and SolarWorld are the victims of mismanagement and that the foreign-owned companies are using U.S. trade laws to bail out their bad investments." You read that right: both companies are actually majority owned by, wait for it, non-US companies. W.T.F.

Bankrupt Solar Companies Are Pressuring @POTUS Towards Protectionism

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We've previously noted Suniva's efforts to initiate a trade investigation (which, significantly, was a condition precedent to the $4mm DIP credit facility):this notes how significant the case could be for the solar industry and how it could score President Trump some major points. Notably, SolarWorld AG has now joined in the fun.

Enduring Retail Narratives

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Retail (At Least They're Consistent). Chico's FAS Inc. ($CHS) reported numbers and despite a profit increase, its other numbers looked a bit shaky - consistent with the rest of the apparel industry. Net sales, revenue and same store sales were all down with guidance indicating additional same store sales declines. In the face of challenging millennial spending habits, decreased tourism and President Trump, Tiffany & Co. ($TIF) reported a 3% same store sales decline which sent the stock tumbling nearly 6%. Some data on decreased tourism from FourSquare here. Sears Holding Corp. ($SHLD) revenue fell 20% and same store sales fell nearly 12% - and yet the stock initially popped showing the disconnect between reality and markets these days. Serious, WTF.

International Tourism Trending Down Bigly

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As if the retail situation isn't bad enough, Foursquare is reporting that leisure tourism is down a normalized 11% for Q4 '16 and Q1 '17. A proper inference to be made is that this could very well extrapolate out negatively for high tourist locales like New York City which, in many respects, depend on tourist spending for revenues. It will be interesting to see what the New York City Comptroller reports in coming periods. #MAGA