When Occidental Petroleum Corp (OXY.N) acquired Anadarko Petroleum Corp. back in August 2019, some information about Occidental was not revealed – investors claim. The class-action lawsuit says that Occidental did not have enough funds available to be able to handle the recent drop in oil prices after the acquisition – which resulted in its market value dropping from around $44 billion to $13 billion.
Lenders such as Citigroup, Bank of America, Wells Fargo, and JPMorgan are also being sued because they did not perform due diligence when they helped underwrite the bonds for Occidental. The bonds were traded for 60 to 90 cents on the dollar. The oil company may need to sell assets so that money can be raised.
United Airlines to Avoid Bankruptcy
The new CEO of United Airlines, Scott Kirby, has emphatically stated that the airline company will not be declaring bankruptcy. His reason for not taking that route is that he thinks it is a very dumb move – except as a very last resort. It is not worth the cost, he says. People are starting to fly again, though not yet anywhere close to where it was this time a year ago. This past Wednesday, United flew about 50,000 passengers. One way that the company is saving money is to keep its current aircraft and not switch them yet for newer models.
Airbus Opens New Plant in Mobile
The aircraft manufacturing company Airbus just opened a new plant in Mobile, AL that will assemble parts for the A220 aircraft. This aircraft is a medium-sized plane that will be sold to U.S. airline companies. The first customer is JetBlue. The plant for this plane was built in Mobile because there would have been a 300% tariff if brought in from overseas – but the tariff was later rejected. Airbus has other facilities at the same location that builds the A320, A319, and A321’s for U.S. customers. There will be about 1,000 people working at the new facility.
Conflict in the Gulf Increases
The Revolutionary Guards in Iran showed off 110 new combat boats, speed boats, and submarines. The new delivery of these vessels prompted Iran to warn the U.S. that they will now have an increased presence in the Gulf. Tensions there have increased recently because Iran uses their boats to harass U.S. vessels in the Gulf by traveling close to them, which led President Trump to warn them to keep their distance. This harassment has recently nearly led to serious conflicts in the Gulf.
Home Sales Dropped
The housing market is suffering greatly because of coronavirus and its damage to the economy. Sales of homes have dropped to their lowest point ever, being 34.6% lower than this time last year. Not many homes are being listed or sold. Economic instability, along with job loss, seems to have made people afraid to buy or sell a home.
Job Loss at Record Highs
Since the pandemic began, the toll of people applying for unemployment benefits has risen to a record-breaking 41 million. This happened just in the past 10 weeks. The good news is that some of these people have started back to work as states begin to reopen for business, Employees, and possibly some employers, may be taking advantage of the PPP as employees in some places can earn more being unemployed than on the job. This could be encouraging many people to continue to collect unemployment, which may be hurting economic recovery.