#debt

Posts mentioning hashtag #debt

Below are all the posts — topics as well as replies — that mention the hashtag #debt.

Mention #debt in your post to continue the discussion!

The (Real) current state of the U.S. economy. Layoffs in 2026 will continue to Increase.

The (2) contributors for a Major recession when they do (and have) happened during U.S. economic-financial history are Unemployment, and a Major Downturn in consumer spending; currently (70%) of GDP (Gross Domestic Product) as shown in the PCE (Personal Consumption Expenditures Index).

2025 - Worst year of job growth since 2020, just reported.

2025 - Worst year of layoffs since 2020 (1.17 million), just reported.

2025 - The seven (7) U.S. debt bubbles at the highest level in U.S. history with (all of them) at (record) levels, just reported.

The (7) Debt bubbles - Household spending, mortgage loans; credit card debt, automotive loans; student loans, stock purchase financing; and finally the U.S. National debt.

The U.S. National debt (currently) is at $38.6 Trillion (and rising) with Interest paid per year by U.S. taxpayers at $968.0 Billion to outside Investors who finance it per usdebtclock.

Currently (skewed) U.S. GDP (positive data) is from AI corporate infrastructure spending, and higher income household spending.

Both of those things will (not if) revert Downwards over time impacting U.S. GDP negatively.

Note - The stock market, and U.S. economy are (not) the same thing.

It is called Divergence that (currently) exists between them (for now).


The (Real) current state of the U.S. economy. Layoffs in 2026 will continue to Increase.

It amazes me that (some) employees at Charles Schwab do (not) even understand basic U.S. economics -

The (2) contributors for a Major recession when they do (and have) happened during U.S. economic-financial history are Unemployment, and a Major Downturn in consumer spending; currently (70%) of GDP (Gross Domestic Product) as shown in the PCE (Personal Consumption Expenditures Index).

2025 - Worst year of job growth since 2020, just reported.

2025 - Worst year of layoffs since 2020 (1.17 million), just reported.

2025 - The seven (7) U.S. debt bubbles at the highest level in U.S. history with (all of them) at (record) levels, just reported.

The (7) Debt bubbles - Household spending, mortgage loans; credit card debt, automotive loans; student loans, stock purchase financing; and finally the U.S. National debt.

The U.S. National debt (currently) is at $38.6 Trillion (and rising) with Interest paid per year by U.S. taxpayers at $968.0 Billion to outside Investors who finance it per usdebtclock.

Currently (skewed) U.S. GDP (positive data) is from AI corporate infrastructure spending, and higher income household spending.

Both of those things will (not if) revert Downwards over time impacting U.S. GDP negatively.

Note - The stock market, and U.S. economy are (not) the same thing.

It is called Divergence that (currently) exists between them (for now).


Richard Baker is retail poison!

source: https://therobinreport.com/saks-global-another-trainwreck/

01.07.26: The Robin Report: Saks Global: Another Trainwreck by Mark Cohen

Saks Global is Richard Baker’s next and maybe his final retail failure. Lord & Taylor, The Hudson Bay Company in all its various iterations in Canada and Europe, and now the monstrosity he recently created by putting Saks Fifth Avenue, Saks Off Fifth, Neiman Marcus and Bergdorf Goodman together, teeters on bankruptcy. This recent disaster is the result of the company’s failure to make a required $100 million interest payment to lenders at year’s end.

Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure.

Baker Shadow Play

Baker suddenly appeared on the retail scene in 2006 when his real estate company, NRDC, bought Lord & Taylor from the newly branded Federated/Macy’s Corporation, which inherited L&T when it acquired May Company stores. Then, in 2008, Baker acquired control of The Hudson Bay Company following the untimely death of its majority shareholder. Three years later, in 2011, Baker’s HBC sold its Zeller’s stores in Canada to Target Corporation for $1.8 billion. Kudos to Baker, as most of the Zeller’s store locations were arguably worthless as hapless Target would soon find out.

When I was Director of Retail Studies at the Columbia Business School, I attended a student-led Retail and Luxury Goods Conference in 2012, keynoted by Baker. He gave a rambling off the cuff 40-minute presentation in which he regaled the 250 students and guests in the audience about how great it was to be rich; how he did little work at Wharton having surrounded himself with “good looking babes” eager to do his work; and how he had just “stolen” Lord & Taylor from Federated for $1.2 billion. Narcissism aside, he was likely correct in his view that Federated could not wait to unload L&T as an outlying May Company property. He went on to talk about how easy it was to master the art of merchandising based on his exposure to L&T’s business. Completely put off by this performance, I was unfortunately seated in a location that precluded me from leaving early.

Next in 2013, Baker acquired Saks Fifth Avenue and Saks Off Fifth stores in what might be described as another triumph of price over value. Saks’ management had failed to fully recognize the leverage it could have used on its own behalf based on its Fifth Avenue store’s real estate valuation. Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure. His stewardship of Lord & Taylor was pathetic.

In an effort to cut expenses, he attempted to rationalize back-of-the-house activities between Canada-based Bay stores and American-based L&T stores, which may have made sense to some clueless consultant but never worked in retail reality. He then came up with a scheme to downsize the L&T Fifth Avenue flagship and sold the building to that other paragon of business strategy, WeWork, eventually ki-ling the L&T brand.

Baker and The Bay

The disruption and ultimate liquidation of The Bay’s principal competitor in apparel, accessories and soft home, Sears Canada, should have resulted in a once-in-a-lifetime opportunity, but The Bay failed to capitalize on it.

Moving Saks Fifth Avenue stores into The Bay stores spaces in Canada and introducing Saks Off Fifth in Canada was another failed initiative. In fact, moving Saks Fifth Avenue into a cavernous “low-brow” Bay location on Queen Street adjacent to the Eaton Center in Toronto was an incredible misstep in and of itself. The physical space was available, but the luxury customer certainly wasn’t there.

Opening over a dozen Bay department stores in the Netherlands in 2017 was another bone-headed move. Baker did a complex deal with Germany-based Galeria Karstadt Kaufhof, securing retail space in the Netherlands, but again the customer just wasn’t there. Allegedly, Baker believed that since the Canadian Army liberated the Netherlands from the Na-is at the end of WWII, the Dutch would welcome a Canadian company with open arms. It didn’t happen. The Dutch Bay stores were all closed by 2019. The customers who might have remembered being liberated in 1945 were either dead or too old to patronize a Canadian-owned department store. Baker claimed he made money on this ridiculous foray, and he may very well have, but the Dutch paid a terrible price for this catastrophe.

Baker Business Model

In 2024, Baker set his sights on acquiring Sak’s principal competitor, Neiman Marcus/Bergdorf Goodman. The timing wasn’t great. There was the disappearance of luxury competitor Barney’s, and the Saks business at best treaded water. Also, Neiman Marcus/Bergdorf Goodman was struggling to put a challenging Chapter 11 Bankruptcy proceeding behind it.

There was also the monetization of hbc.com and saks.com, which raised a considerable amount of money from a group of hapless investors. These investors did not realize how completely counterproductive this strategy would prove to be.

Along the way, Richard Baker has presided over a never-ending list of lead executives, many of whom barely lasted two years with the company. There was Tina Johnson, Jeff Sherman, Bonnie Brooks, Jerry Storch, and Helena Foulkes, among others. And then there was Marc Metrick, whose 30-year tenure with Saks has just come to an abrupt end. But maybe it was 30 years too long. Metrick was a planning executive at Saks who, in recent years, masqueraded as its lead merchant.

Debt Economics

The history of two weak and/or weakened retail companies merging and finding success is simply this: There is no history. Add to that the non-starter of two companies that essentially do business with the same customer and in many cases in the same geographic locations. But these hurdles didn’t stop Baker from consummating a debt-laden merger of two icons. And incomprehensibly, for well over a year, the company failed to pay many of Saks’ vendors either on time or in many cases at all. So, now both companies have just completed a poor 2025 in sales. And having been cut off from receiving fresh inventory by a cynical factor community, Saks Global just failed to make that $100 million year-end interest payment.

Baker in Bankruptcy

Maybe Baker will come up with a bundle of new cash. If business remains as poor as it has been, any new cash infusion would only be a stopgap measure. Alternatively, the company might come up with a prepackaged restructuring agreement with its creditors. Or it will surrender to a voluntary or involuntary bankruptcy proceeding.

I’m not a bankruptcy attorney, but having lived through Federated department store’s successful restructure, and an up close and personal experience with Bradlees stores eventual failed emergence from bankruptcy, I think the bell may soon toll for Saks Global.

If it files for Chapter 11 financial relief, creditors organize and line up based upon their preexisting credit agreements (or lack thereof). Secured creditors, typically the company’s lenders, rely on collateral rights while unsecured creditors, typically vendors and service providers, hope for some eventual relief through the bankruptcy process. All payables from the company, whether current or past due, are frozen.

In a bankruptcy, legal and financial restructuring professionals line up for a typically substantial fee opportunity. A new lender or a consortium of lenders emerges to provide Debtor in Possession funding to enable the company to stay upright while in bankruptcy. All vendors are asked to resume shipping based on the newly created surety of DIP financing.

But, lacking confidence that past due receivables will eventually be paid, many vendors resort to selling their company receivables to distressed debt (or vulture) investors for substantial discounted values. This, in my opinion, is a terrible flaw in the bankruptcy process in that unsecured vendors, who you would expect to have a stake in the company’s eventual successful emergence from bankruptcy, have now traded places with investors seeking a fast financial return.

Saks Global at Risk

If Sak’s Global were operating as a stable platform with a successful sales and margin track record, with capable senior leadership, a reliable operating strategy, and good relationships with its vendors and customers, there would be ample reason for the company to navigate through bankruptcy and emerge with new debt and a newly restructured balance sheet. But none of this appears to be the case. As 2026 unfolds to what will undoubtedly be a challenging year for all retailers, the prospects for Saks Global are truly grim. My sense is that many vendors long ago stopped shipping or have curtailed their support for Saks, Neiman Marcus and maybe even Bergdorf Goodman, and they are unlikely to get back on board after having been egregiously abused these past few years.

Many will find another retailer to serve their customers if they haven’t already done so or continue to build a direct-to-consumer model of their own. Why wouldn’t they? Who needs the sturm und drang of a failing retail partner who doesn’t pay its bills? If that happens, Saks Global is toast.


Richard Baker is retail poison!

source: https://therobinreport.com/saks-global-another-trainwreck/

01.07.26: The Robin Report: Saks Global: Another Trainwreck by Mark Cohen

Saks Global is Richard Baker’s next and maybe his final retail failure. Lord & Taylor, The Hudson Bay Company in all its various iterations in Canada and Europe, and now the monstrosity he recently created by putting Saks Fifth Avenue, Saks Off Fifth, Neiman Marcus and Bergdorf Goodman together, teeters on bankruptcy. This recent disaster is the result of the company’s failure to make a required $100 million interest payment to lenders at year’s end.

Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure.

Baker Shadow Play

Baker suddenly appeared on the retail scene in 2006 when his real estate company, NRDC, bought Lord & Taylor from the newly branded Federated/Macy’s Corporation, which inherited L&T when it acquired May Company stores. Then, in 2008, Baker acquired control of The Hudson Bay Company following the untimely death of its majority shareholder. Three years later, in 2011, Baker’s HBC sold its Zeller’s stores in Canada to Target Corporation for $1.8 billion. Kudos to Baker, as most of the Zeller’s store locations were arguably worthless as hapless Target would soon find out.

When I was Director of Retail Studies at the Columbia Business School, I attended a student-led Retail and Luxury Goods Conference in 2012, keynoted by Baker. He gave a rambling off the cuff 40-minute presentation in which he regaled the 250 students and guests in the audience about how great it was to be rich; how he did little work at Wharton having surrounded himself with “good looking babes” eager to do his work; and how he had just “stolen” Lord & Taylor from Federated for $1.2 billion. Narcissism aside, he was likely correct in his view that Federated could not wait to unload L&T as an outlying May Company property. He went on to talk about how easy it was to master the art of merchandising based on his exposure to L&T’s business. Completely put off by this performance, I was unfortunately seated in a location that precluded me from leaving early.

Next in 2013, Baker acquired Saks Fifth Avenue and Saks Off Fifth stores in what might be described as another triumph of price over value. Saks’ management had failed to fully recognize the leverage it could have used on its own behalf based on its Fifth Avenue store’s real estate valuation. Baker, as a real estate manipulator, gets high marks. As a retail leader and retail strategist, however, he has been an abject failure. His stewardship of Lord & Taylor was pathetic.

In an effort to cut expenses, he attempted to rationalize back-of-the-house activities between Canada-based Bay stores and American-based L&T stores, which may have made sense to some clueless consultant but never worked in retail reality. He then came up with a scheme to downsize the L&T Fifth Avenue flagship and sold the building to that other paragon of business strategy, WeWork, eventually ki-ling the L&T brand.

Baker and The Bay

The disruption and ultimate liquidation of The Bay’s principal competitor in apparel, accessories and soft home, Sears Canada, should have resulted in a once-in-a-lifetime opportunity, but The Bay failed to capitalize on it.

Moving Saks Fifth Avenue stores into The Bay stores spaces in Canada and introducing Saks Off Fifth in Canada was another failed initiative. In fact, moving Saks Fifth Avenue into a cavernous “low-brow” Bay location on Queen Street adjacent to the Eaton Center in Toronto was an incredible misstep in and of itself. The physical space was available, but the luxury customer certainly wasn’t there.

Opening over a dozen Bay department stores in the Netherlands in 2017 was another bone-headed move. Baker did a complex deal with Germany-based Galeria Karstadt Kaufhof, securing retail space in the Netherlands, but again the customer just wasn’t there. Allegedly, Baker believed that since the Canadian Army liberated the Netherlands from the Na-is at the end of WWII, the Dutch would welcome a Canadian company with open arms. It didn’t happen. The Dutch Bay stores were all closed by 2019. The customers who might have remembered being liberated in 1945 were either dead or too old to patronize a Canadian-owned department store. Baker claimed he made money on this ridiculous foray, and he may very well have, but the Dutch paid a terrible price for this catastrophe.

Baker Business Model

In 2024, Baker set his sights on acquiring Sak’s principal competitor, Neiman Marcus/Bergdorf Goodman. The timing wasn’t great. There was the disappearance of luxury competitor Barney’s, and the Saks business at best treaded water. Also, Neiman Marcus/Bergdorf Goodman was struggling to put a challenging Chapter 11 Bankruptcy proceeding behind it.

There was also the monetization of hbc.com and saks.com, which raised a considerable amount of money from a group of hapless investors. These investors did not realize how completely counterproductive this strategy would prove to be.

Along the way, Richard Baker has presided over a never-ending list of lead executives, many of whom barely lasted two years with the company. There was Tina Johnson, Jeff Sherman, Bonnie Brooks, Jerry Storch, and Helena Foulkes, among others. And then there was Marc Metrick, whose 30-year tenure with Saks has just come to an abrupt end. But maybe it was 30 years too long. Metrick was a planning executive at Saks who, in recent years, masqueraded as its lead merchant.

Debt Economics

The history of two weak and/or weakened retail companies merging and finding success is simply this: There is no history. Add to that the non-starter of two companies that essentially do business with the same customer and in many cases in the same geographic locations. But these hurdles didn’t stop Baker from consummating a debt-laden merger of two icons. And incomprehensibly, for well over a year, the company failed to pay many of Saks’ vendors either on time or in many cases at all. So, now both companies have just completed a poor 2025 in sales. And having been cut off from receiving fresh inventory by a cynical factor community, Saks Global just failed to make that $100 million year-end interest payment.

Baker in Bankruptcy

Maybe Baker will come up with a bundle of new cash. If business remains as poor as it has been, any new cash infusion would only be a stopgap measure. Alternatively, the company might come up with a prepackaged restructuring agreement with its creditors. Or it will surrender to a voluntary or involuntary bankruptcy proceeding.

I’m not a bankruptcy attorney, but having lived through Federated department store’s successful restructure, and an up close and personal experience with Bradlees stores eventual failed emergence from bankruptcy, I think the bell may soon toll for Saks Global.

If it files for Chapter 11 financial relief, creditors organize and line up based upon their preexisting credit agreements (or lack thereof). Secured creditors, typically the company’s lenders, rely on collateral rights while unsecured creditors, typically vendors and service providers, hope for some eventual relief through the bankruptcy process. All payables from the company, whether current or past due, are frozen.

In a bankruptcy, legal and financial restructuring professionals line up for a typically substantial fee opportunity. A new lender or a consortium of lenders emerges to provide Debtor in Possession funding to enable the company to stay upright while in bankruptcy. All vendors are asked to resume shipping based on the newly created surety of DIP financing.

But, lacking confidence that past due receivables will eventually be paid, many vendors resort to selling their company receivables to distressed debt (or vulture) investors for substantial discounted values. This, in my opinion, is a terrible flaw in the bankruptcy process in that unsecured vendors, who you would expect to have a stake in the company’s eventual successful emergence from bankruptcy, have now traded places with investors seeking a fast financial return.

Saks Global at Risk

If Sak’s Global were operating as a stable platform with a successful sales and margin track record, with capable senior leadership, a reliable operating strategy, and good relationships with its vendors and customers, there would be ample reason for the company to navigate through bankruptcy and emerge with new debt and a newly restructured balance sheet. But none of this appears to be the case. As 2026 unfolds to what will undoubtedly be a challenging year for all retailers, the prospects for Saks Global are truly grim. My sense is that many vendors long ago stopped shipping or have curtailed their support for Saks, Neiman Marcus and maybe even Bergdorf Goodman, and they are unlikely to get back on board after having been egregiously abused these past few years.

Many will find another retailer to serve their customers if they haven’t already done so or continue to build a direct-to-consumer model of their own. Why wouldn’t they? Who needs the sturm und drang of a failing retail partner who doesn’t pay its bills? If that happens, Saks Global is toast.


Future Plans

In contemplating my future after being laid off from EJ, relying on a small severance and my depleting savings, I can see how people do something to go to prison. They will have shelter, food, daily exercise, health insurance, no utility or car payments and, I can study for a degree - even a law degree - without incurring any debt. Maybe not a bad gig....I'll have PP and DC to thank for this opportunity!


It will for sure get worse before it gets better

I've been "out" for awhile now and while I do believe there's value in the brands...and there's a host of great, talented people there...it is, as it stands, a sinking ship and one not worth staying on. It will for sure get worse before it gets better...and "better" might mean just a little bit better not thriving. You have a leadership team at this point that is swamped by arrogance, short-term incentives and a lack of understanding of people, team, engagement and leadership...the things that actually will grow the company long-term.
Too much debt. Sacrificing too much to protect dividend. Macro pressures. Bad leaders. A strategy that probably would work but requires a focus that isn't there. Cutting the wrong people and teams at the wrong time.

This post deserves its own thread. Found at @q4+1kbdjtt9e.


How we got to now

I see posts on here all the time lamenting PE ownership, made without any understanding of how we got to this point, and how this goes all the way back to asinine decisions pre-bankruptcy in 2013. I’ve decided to play Cengage historian and lay some of this out for posterity, and so I can yell at the sky

2012–2013: Debt pile gets ugly
• Pre-bankruptcy: Before Chapter 11, Cengage was already doing financial engineering just to push out maturities — e.g., in 2012 it sold $725M of 11.5% senior secured notes due 2020 and amended its credit facilities to extend term loan and revolver maturities.
• July 2, 2013: Cengage files for Chapter 11 with about $5.8B of outstanding debt, announcing a “pre-arranged” restructuring to eliminate more than $4B of that.
Even before bankruptcy, they were in the classic LBO textbook-publisher trap: lots of high-coupon debt, some of it maturing in big lumps, and a business that’s not exactly a rocket ship.

2014: Emerges from Chapter 11… still leveraged
• April 1, 2014: Cengage officially emerges from Chapter 11. The plan cuts ~$4B of funded debt and brings in $1.75B of new Term Loan B financing, plus a $250M asset-based revolver, as exit financing.
• Post-reorg, they’re no longer at $5.8B of debt, but they do still have roughly ~$1.8–2B of funded debt sitting above a business doing around ~$2B of revenue at the time, still pretty leveraged.

That Term Loan B is key. By design, those loans usually have tiny quarterly amortization and then a big “bullet” (lump-sum) repayment at maturity. You drag a big principal balance for years, paying interest the whole time, then face a huge refinancing/repayment cliff at the end.

2014–2019: Term loan era, dividend recaps, and financial engineering
• In the years after emergence, Cengage spends a lot of time tweaking the capital structure: repricing the term loan, issuing additional term debt, and even doing share-repurchase and dividend recap transactions (they literally disclosed a “dividend recapitalization” in FY2015 current reports).
• if you’re still doing buybacks / dividends and refinancing loans rather than aggressively paying them down, you’re implicitly betting that refinancing the big bullet at the end of the term will be doable when you get there.
So by late 2010s you’ve got a company that did cut its original $5.8B anchor, but is still sitting on a large secured term loan and reliant on capital markets to roll that over when maturities and balloon payments come due.

2019–2020: Aborted McGraw-Hill merger, more uncertainty
• In 2019 Cengage announces a planned merger with McGraw-Hill and a related amendment to its senior secured credit facilities, again, capital structure is clearly front-and-center.
• The merger is ultimately called off in 2020 after regulatory issues, which leaves Cengage still independent, still carrying its own debt stack, and now without the scale/merger synergies that were supposed to help.
So by early 2020s, you’ve got: meaningful secured debt, a term-loan structure with big future maturities, and no merger “escape hatch.”

2021–2022: Rising rates + debt drag
• For FY22 (year ended March 31, 2022), Cengage reports adjusted cash revenue of about $1.37B and Adjusted Cash EBITDA less prepub of ~$326M.
• That’s a decent EBITDA number, but on top of a large term loan it still implies a non-trivial leverage ratio. As global rates move up and credit spreads widen (2022–2023), the cost of keeping that debt financed goes up, and the risk of refinancing a big bullet at attractive rates gets worse.
The company itself starts talking more about “financial flexibility” and de-leveraging in investor materials around this time… they know the balance sheet is constraining what they can do.

April 2023: Apollo preferred equity to prevent collapse
• April 17, 2023: Cengage announces that Apollo Funds will invest $500M into a new series of convertible preferred stock
• In the press release, Cengage explicitly says it will use the proceeds to “reduce outstanding debt and lower interest expense,” and to “increase financial flexibility” to invest in growth.
The old LBO-style debt and its balloon risk were getting harder and more expensive to carry in a higher-rate world. Rather than wait for a ugly refinancing fight when the big maturities hit, they sold a chunk of the company to Apollo via preferred equity, then used that cash to pay down loans and push the maturity wall further out.

2023–2025: PE priorities, “efficiency,” and repeated layoffs
Once Apollo is in, the priorities shift to the usual PE playbook:
• Sharpen the focus on EBITDA, cash flow and “portfolio mix
• Cuts, cuts, cuts

A classic pattern of a ZombieCo:

  1. Heavy term-loan/balloon-style post-bankruptcy debt +
  2. Rising interest rates and a tougher refi environment
  3. Need to de-risk the maturity wall with Apollo preferred equity
  4. Apollo-style mandate to improve profitability and reallocate capital
  5. Repeated restructuring and headcount reductions

Goodbye Nina Goodheart

After years of foisting your su-kage onto SH&A, you are taking the golden parachute in a testament to the clear lack of leadership ability and lack of qualifications you brought to a once mighty division, leaving the group wallowing in debt to the tune of almost $800,000,000 to Blackstone, no clear goals and a culture of pettiness and obsequiousness.

Thanks for the memories and the sh---y raises.


Oil price fall turns up the heat on Big Oil's bloated payouts

By America Hernandez and Stephanie Kelly
October 7, 2025

SUMMARY

  • Current payouts unsustainable with oil below $80 a barrel

  • Crude oil prices expected to continue falling

  • Companies under pressure to cut debt

  • Reduced buybacks and job cuts announced

PARIS/LONDON, Oct 7 - The five biggest global oil majors are moving to cut costs, jobs and share buybacks as falling oil prices threaten to make shareholder payouts unsustainable without increasing debt, analysts said.

Chevron (CVX.N), ExxonMobil (XOM.N), BP (BP.L), Shell (SHEL.L), and TotalEnergies (TTEF.PA), have pledged high returns for the past decade to avert an investor exodus as fossil fuels lost their appeal.

But maintaining those generous payouts, which have topped $100 million annually since 2022, has increasingly been funded by debt as energy prices retreated from highs caused by sanctions and supply disruptions in the wake of Russia's invasion of Ukraine.

https://www.reuters.com/business/energy/oil-price-fall-turns-up-heat-big-oils-bloated-payouts-2025-10-07/


Cosplaying Solvent

The company is piling new debt on top of old debt again borrowing money to refinance what it is already refinanced block of debt.

Pull a block. Add a block. Raul smiling like all good. Until the market sneezes at the shaky debt tower. or it collapses under ongoing client exodus resulting in cashflow shortfall.


Fear

  • Oracle’s credit risk gauge on its debt closed at the highest level since 2009
  • A surge in bond issuance from large tech companies helped trigger the move
  • Investors are increasingly worried that the AI sector may be forming a bubble
  • The cost of protecting Oracle’s debt against default rose to about 1.28 % a year
  • This level is based on end of day credit derivative prices in New York
  • It marks the highest cost of protection on Oracle’s debt since March 2009
  • The price jumped nearly 0.03 % compared with the prior trading day
  • The gauge has more than tripled from around 0.36 % in June
  • Heavy funding activity by tech firms is adding pressure to credit markets
  • Oracle is being viewed as more exposed to AI related volatility in investor sentiment
  • The move fits into a broader rise in perceived credit stress for major tech issuers
  • These shifts are intensifying doubts about how sustainable the AI driven expansion will be

https://www.bloomberg.com/news/articles/2025-12-02/oracle-credit-fear-gauge-hits-highest-since-2009-on-ai-bubble-fears


The Bandy-Ponzi scheme: “Trust me, bro”

SB, aka Bandy, closed the last Town Hall with a sort of “Trust me, bro” line.

Fitting, because that’s basically the financial strategy right now: trust us while we borrow new money to pay old debt and hope nobody asks why the interest bill keeps climbing.

Xerox isn’t running a literal Ponzi scheme, but the behavior rhymes: fresh debt replaces maturing debt, each round more expensive than the last, with no cash flow to reduce anything on its own.

Let's not forget some of SB's “stellar” performances in this Ponzi-like scheme:

  • In September 2023, SB borrowed $500M to buy back from his lord and master Carl Icahn (a legendary activist investor who had fallen on hard times and was wrong not by decimal points but by several orders of magnitude in his calculations to buy HP) his stake in Xerox;

  • In late 2024, SB borrowed another $220M to buy ITSavvy, the company then and nowadays run by a friend of the now-departed COO John B (still a board member though);

(Meanwhile, days later, SB indulged the whims of the also now-departed Chief Disruption Officer and wasted $10-20M on sponsoring the Aston Martin Aramco Formula 1 team, which wouldn't even win a Hot Wheels toy car race)

  • And even though 2024 wasn't over yet, SB had time to plan how to borrow more money to acquire (well, rather than “acquire”, I would say “pay to be managed by”) Lexmark: close to $1B of extra liabilities for a company that lost about $740M last year.

SB & Friends claim they’ll pull out $200–300M in “synergies” by cutting overlapping functions, closing facilities, and shrinking corporate overhead.

Without those savings, the debt load gets heavier, interest expense keeps rising, and refinancing becomes harder. It’s that simple.

SB & Friends keep repeating the synergy story like it’s guaranteed.

It isn’t.

It requires flawless execution, discipline, and no surprises—things they know very little about.

Meanwhile, the core business is falling off a cliff. The only thing keeping this train moving is access to credit markets and the hope that lenders keep buying the story.

So yes: when the CEO says “Trust me, bro”, what he’s really saying is: “You are going to take a leap of faith and BELIEVE that the cuts will be implemented quickly, revenues will stop declining, and lenders will continue to be friendly”.

Except the lenders are not staying friendly anymore. S&P Global Ratings just cut Xerox’s credit rating to CCC+.

For those unfamiliar with S&P credit ratings: on a scale of 22, with 1 being “Prime” and 22 being “Lousy” (default, no money to pay bills anymore), CCC+ is 18.

S&P are also warning Xerox will burn $170–200M in cash this year and carry a debt load more than 7.5 times our earnings.

Put it in the simplest terms possible: the rating agency thinks we’re borrowing money just to stay alive, and that if anything goes wrong — if synergies slip, if revenue drops, if refinancing gets delayed — the whole structure can fall apart faster than any PowerPoint slide can explain.

At this point, the person who says "Trust me, bro" is in fact the last person you should trust.


We’ll go nuts before it’s all done

It’s not like this is the best company to work for, and most of us don’t even like our jobs. I’d love to switch myself. But honestly, I’m terrified of what’s out there right now. Jobs feel scarce, the cost of living keeps climbing, and so many of us are drowning in debt. I hate feeling shackled to a job I don’t even enjoy, and I hate even more having to stress about losing a job I don’t like to begin with.


ORCL hit 195.75 this morning, down over 43% in 10.5 weeks

It is truly amazing how fast the market may have gone from:
Yay, greatly reduced costs from layoffs of aging workers and huge new CAPEX to enter the shiny new field of AI

to:
Wow, you released many loyal and very knowledgeable workers because you thought AI would capably take up their workload? Who do you think generates the knowledge where AI extracts it supposed intelligence from?
Also, dilution and especially debt is favorable, and oh my, a lot of debt is very bad. If that debt is going to generate low margin revenue, you really have to wonder what management was thinking.

Don't even get me started discussing whether Open AI is going to generate enough revenue to fulfill their contractual obligations.

ORCL was last in double digits in Dec 2023, but we could be headed back there very soon in my opinion.


3 reasons

Here are the 3 reasons why Verizon will
never live up to its rivals or its own best years from the past.

  1. Outsourcing CS, IT and other depts
  2. Everyone wants to be a manager, attend meaningless meetings to say the right things, pointing out all the wrong things that need fixing BUT NOBODY WANTS TO DO THE WORK!! Managers aren’t doing any actual work.
  3. Nasty debt problem. Execs and board put us in a position impossible to get out of

When Verizon doubled down on 5G, we also doubled our debt.

Between $50B in spectrum, and billions more in buildout, we flushed money down the toilet to be able to say we had “Real 5G”. Users didn’t care. A rose by any other name.

Incremental speed increases to keep networks delivering richer content within user expectations is sufficient. Aside from that, they want USABLE, contiguous signal.

Not full bars at a busy lunch spot and all your apps are saying “No Internet Connection”. Not SOS at the same cabin in the mountains from 3 years ago when you still had 3G service.

When a brand has substance, your reputation precedes you and you can ki-l it each quarter with cheesy or basic advertising. When a brand is commoditized, and differentiators are all removed, the GLUE that kept that 1% churn rate is gone.


$101Million in Q3 interest

https://investors.xerox.com/static-files/adf78906-cdf0-4fef-b8ce-21264d06bd9b

Debt servicing on the interest is up to around $1.1 million a DAY! Each and every day, this is not going away. Not principal, just the interest. Under 'Total Interest expense.'

That''s 400 million a year, just on the vig.


IBM’s debt bubble

Is Alvind purposely trying to pork up the balance sheet so much , he wants more obligations ?

I was told the company needs to be leaner and they need to bring down costs but what the he11 are these acquisitions for ?

Just good press? Bragging rights ?

Make it make sense


Q4 will be worse

Layoffs will be bigger than the 15% wave a year ago. The goodwill write down will be in excess of 1 billion, and that will lower the EV and push Debt to Equity to over 1000%. Access to debt markets will effectively cease, and vendors that aren't getting paid in a timely fashion will Dun XRX. Also, the fact that the patent sale hasn't produced any dollar amounts, or hype from SB, means it is probably a terrible deal. Those patents are part of the EV of XRX and will further degrade the value of the company on the next call.


34 Billion Rev per 1/4 but needs to layoff techs making 100k or less

Verizon reported $33.8 billion in total operating revenue for the third quarter of 2025, not $34 billion in profit. Its consolidated net income (profit) for the quarter was $5.1 billion.
Verizon is currently in the process of reducing its workforce as part of a voluntary separation program and wider cost-cutting initiatives:
Job Reductions: In September 2024, Verizon announced a voluntary separation program for approximately 4,800 U.S.-based management positions as part of a cost-saving plan aiming to save up to $3 billion by 2025. Over half of these employees were expected to leave by September 2024, with the remainder departing by March 2025.
Technician Layoffs: The recent job cuts primarily targeted management positions, not specifically technicians, although overall headcount has been shrinking across the company and industry due to automation and digitization.
Financial Context: Despite strong quarterly revenue and profit, which actually increased year-over-year, the company has significant long-term debt (net unsecured debt of $112 billion as of Q3 2025) and operates in a highly competitive market. The cost-cutting measures are part of a broader strategy to manage debt, improve operational efficiency, and remain competitive.
The decision to cut jobs despite high revenue is a strategic business move aimed at long-term financial health, operational efficiency (partially through automation and AI), and managing a large debt load, rather than a reflection of immediate financial distress.
What a bunch of Dou--e Bags!!!


Cash Burn Rate - How long before Xerox is sold or Ch 11?

Risk of Chapter 11 or sale
Given the above:
The heavy debt load (several billions) and relatively small cash cushion raise risk if business continues to decline or cash flow weakens.
A sale or restructuring becomes more likely if they cannot reverse margin declines, stabilise revenue, and free up meaningful cash flow.
If nothing materially changes, the company may find itself pressured within 12-18 months, but this is highly dependent on actual cash flows, debt covenants, market conditions, interest rates, etc.
A sale (or strategic merger) may be a more likely outcome than full Chapter 11 if assets/brand can still attract buyers and if management acts proactively.


777X DELAYED AGAIN! Plus Boeing is "FIVE BILLION In Debt"

Plus A220 has problems too
https://www.youtube.com/watch?v=SYgAVCQmSLQ

Airbus "FINISHED" Boeing: 60 Years of Boeing Aviation History Ends, Handing Airbus The Crown!
https://www.youtube.com/watch?v=1OgHjmWOWec

Boeing is recognized the world over as a
Idіocracy based circus, managed by farcical MBA clowns supervising
a largely inept and inexperienced workforce of their own making.

This is not a groundless opinion by any means.
it’s a factual conclusion based in empirical data.

@isw+1u7qpocZ
@1ddx+1u88Z7xg
@lzx+1tUwviNA

https://oig.nasa.gov/wp-content/uploads/2024/08/ig-24-015.pdf?emrc=66b617078a773)


The (7) Major Debt bubble(s) and the (ongoing) disconnect between the U.S. economy, and Wall Street; but (ultimately) that changes.

AI spending -

Is driving the stock market (for now) but be aware.

The (7) Major Debt bubbles.

U.S. economic-financial system.

Debt bubbles (ultimately) lead to crashes (especially in the stock market).

Total household debt - $18.4 Trillion, and (rising) as of 2025 2nd quarter (a record).

It has been proven time-and-time again in U.S. history.

All of these are at (record) levels.

List of (current) U.S. debt bubbles -

U.S. National debt - $37.9 Trillion, and (rising) exponentially per usdebtclock (add another $3.74 Trillion (minimum) from the Trump Tax bill). Financed by outside Investors (a record).

U.S. mortgage debt - $12.94 Trillion, and (rising) as of 2025 2nd quarter (a record).

U.S. credit card debt - $1.33 Trillion, and (rising) as of 2025 3rd quarter (a record).

U.S. automotive debt - $1.66 Trillion, and (rising) as of 2025 3rd quarter (a record).

U.S. student loan debt - $1.81 Trillion, and (rising) as of 2025 3rd quarter (a record).

There is also (record) debt ($1.13 Trillion, September 2025 per FINRA) in the stock market by Investors financing purchases.

The U.S. Government shutdown (still ongoing) proves the U.S. National debt part (even more).

These are the facts.


AT&T's New Ad: When You Run Out of Ideas, Attack T-Mobile

AT&T just launched a shiny new ad campaign trashing tmobile – because nothing screams confidence like obsessing over your competitor's success.

They're bragging about "300,000 square miles of coverage" and the " AT&T Guarantee" Meanwhile, real customers on Truspilot are handing out 1-star reviews like Halloween candy. MAYBE fix your OWN moral and coverage before worrying about someone else's.

It's wild watching a 100-year-old company, drowning in debt and bad PR, act like a jealous ex. TMOBILE over there sitting comfortably at a $200 stock price, while AT&T's bragging about fiber and posting apology ads.

When your own employees are miserable, your customers are furious, and your stock is flatlined – maybe stop worrying about T-Mobile and start reconnecting with reality.