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| Economy Faces ‘Tornado-Like Headwind’ as Financial Markets Spiral | Economy Faces ‘Tornado-Like Headwind’ as Financial Markets Spiral |
| (about 16 hours later) | |
| The fast-spreading coronavirus and a plunge in oil prices set off a chain reaction in financial markets on Monday, a self-perpetuating downward cycle that could inflict serious harm on the global economy. | The fast-spreading coronavirus and a plunge in oil prices set off a chain reaction in financial markets on Monday, a self-perpetuating downward cycle that could inflict serious harm on the global economy. |
| What started last month as unease about a potential economic slowdown in China has evolved into a borderline panic, with the S&P 500 on Monday crashing nearly 8 percent. The mayhem is threatening to roil the underlying global financial system and the abilities of companies large and small to survive a potential economic monsoon — a downward spiral that is fed and intensified by these destructive forces. | What started last month as unease about a potential economic slowdown in China has evolved into a borderline panic, with the S&P 500 on Monday crashing nearly 8 percent. The mayhem is threatening to roil the underlying global financial system and the abilities of companies large and small to survive a potential economic monsoon — a downward spiral that is fed and intensified by these destructive forces. |
| The odds of such a storm grew after an unexpected fight between Russia and Saudi Arabia. After failing to reach an agreement about how much oil to produce and sell on international markets, Saudi Arabia announced it would quickly ramp up production. | The odds of such a storm grew after an unexpected fight between Russia and Saudi Arabia. After failing to reach an agreement about how much oil to produce and sell on international markets, Saudi Arabia announced it would quickly ramp up production. |
| Oil prices had been falling as investors fretted about a possible recession. On Monday, they plummeted over 20 percent — the sharpest decline since the first Persian Gulf war. | Oil prices had been falling as investors fretted about a possible recession. On Monday, they plummeted over 20 percent — the sharpest decline since the first Persian Gulf war. |
| Facing one of the worst crises since he was sworn in, President Trump — who has played down the virus threat — said he would talk on Tuesday with Republican congressional leaders about a payroll tax cut and legislation to protect hourly wage earners who may have to miss work because of the virus. He did not provide any details. | Facing one of the worst crises since he was sworn in, President Trump — who has played down the virus threat — said he would talk on Tuesday with Republican congressional leaders about a payroll tax cut and legislation to protect hourly wage earners who may have to miss work because of the virus. He did not provide any details. |
| The S&P 500 has tumbled 19 percent over the past few weeks, and Monday was its worst one-day decline in over a decade. The free fall has vaporized more than $5 trillion in stock market wealth. | The S&P 500 has tumbled 19 percent over the past few weeks, and Monday was its worst one-day decline in over a decade. The free fall has vaporized more than $5 trillion in stock market wealth. |
| Less than 10 minutes after markets opened in the United States on Monday morning, the sell-off became so steep that automatic “circuit breakers” kicked in and halted trading. It was the first time that has happened since the current circuit breakers were set in 2013. The S&P’s 7.6 percent drop came on the 11th anniversary of the start of the current bull market, one of the longest ever. A 20 percent drop from the high point would signal what’s known as a bear market, a marker the S&P 500 has only narrowly avoided for now. | Less than 10 minutes after markets opened in the United States on Monday morning, the sell-off became so steep that automatic “circuit breakers” kicked in and halted trading. It was the first time that has happened since the current circuit breakers were set in 2013. The S&P’s 7.6 percent drop came on the 11th anniversary of the start of the current bull market, one of the longest ever. A 20 percent drop from the high point would signal what’s known as a bear market, a marker the S&P 500 has only narrowly avoided for now. |
| The public health crisis is now threatening to turn into a financial one, which in turn could amplify the virus’s economic fallout. | The public health crisis is now threatening to turn into a financial one, which in turn could amplify the virus’s economic fallout. |
| “There’s panic,” said Dan Krieter, an analyst at BMO Capital Markets. “We’re heading into what looks to be a global recession, including the U.S.” | “There’s panic,” said Dan Krieter, an analyst at BMO Capital Markets. “We’re heading into what looks to be a global recession, including the U.S.” |
| In Asia, markets were mixed early on Tuesday, in an apparent sign that investors were trying to regain their footing, and futures markets were predicting Wall Street and Europe would open higher. | In Asia, markets were mixed early on Tuesday, in an apparent sign that investors were trying to regain their footing, and futures markets were predicting Wall Street and Europe would open higher. |
| Oil prices also rose about 6 percent, though they remained well below levels from last week. | Oil prices also rose about 6 percent, though they remained well below levels from last week. |
| Still, the downward cycle — there are signs it is underway — might play out like this: As the virus disrupts manufacturing supply chains as well as travel, consumer spending would fall and businesses would falter, and stock prices would plummet. The threat to corporate profits would send investors in search of safe havens, like government bonds, sending those prices up and their yields down, in turn straining the banking industry. Banks would limit financing for businesses, which would cut production or lay off workers to hoard capital. | Still, the downward cycle — there are signs it is underway — might play out like this: As the virus disrupts manufacturing supply chains as well as travel, consumer spending would fall and businesses would falter, and stock prices would plummet. The threat to corporate profits would send investors in search of safe havens, like government bonds, sending those prices up and their yields down, in turn straining the banking industry. Banks would limit financing for businesses, which would cut production or lay off workers to hoard capital. |
| Already, investors have hustled to safety, shunning corporate bonds and driving up the financing costs for many companies. And as they piled into U.S. government bonds, long-term interest rates fell to historic lows; benchmark 10-year Treasury bonds, whose interest rates until last week had never sunk below 1 percent, were recently yielding half that. | Already, investors have hustled to safety, shunning corporate bonds and driving up the financing costs for many companies. And as they piled into U.S. government bonds, long-term interest rates fell to historic lows; benchmark 10-year Treasury bonds, whose interest rates until last week had never sunk below 1 percent, were recently yielding half that. |
| Hoping to forestall that spiral, the Federal Reserve on Monday said it would increase the volume of short-term loans available to banks to make it easier for them to continue lending. It was the second time in a week — after an emergency interest-rate cut last Tuesday — that the Fed had moved to stem potential fallout as the coronavirus sent markets gyrating. | Hoping to forestall that spiral, the Federal Reserve on Monday said it would increase the volume of short-term loans available to banks to make it easier for them to continue lending. It was the second time in a week — after an emergency interest-rate cut last Tuesday — that the Fed had moved to stem potential fallout as the coronavirus sent markets gyrating. |
| Even for people who don’t have money in the markets, the developments are ominous. Large and small businesses hire or fire workers and buy equipment and raw materials based on their own financial strength and their expectations for how the economy will perform in the future. As companies retrench, it affects workers and suppliers, which then have to tighten their own belts. | Even for people who don’t have money in the markets, the developments are ominous. Large and small businesses hire or fire workers and buy equipment and raw materials based on their own financial strength and their expectations for how the economy will perform in the future. As companies retrench, it affects workers and suppliers, which then have to tighten their own belts. |
| Layoffs rise; wages decline. Consumers spend less. | Layoffs rise; wages decline. Consumers spend less. |
| Businesses in need of cash would normally turn to their banks for help in moments like this. But as banks get squeezed by sliding interest rates, their ability and appetite to lend to struggling companies diminish — the type of situation the Fed was trying to head off by increasing its short-term lending. At the same time, panicky investors don’t want to buy risky corporate debt, severing another potential lifeline for many companies. Investors are also yanking their money from mutual funds that invest in leveraged loans, a risky type of corporate debt that has become a popular way for many companies to finance their operations in recent years. | Businesses in need of cash would normally turn to their banks for help in moments like this. But as banks get squeezed by sliding interest rates, their ability and appetite to lend to struggling companies diminish — the type of situation the Fed was trying to head off by increasing its short-term lending. At the same time, panicky investors don’t want to buy risky corporate debt, severing another potential lifeline for many companies. Investors are also yanking their money from mutual funds that invest in leveraged loans, a risky type of corporate debt that has become a popular way for many companies to finance their operations in recent years. |
| The result could be a surge in bankruptcies as companies — in particular in the shale industry, where many drillers are deep in debt — tip over a financial cliff. More workers lose their jobs. Families cancel vacations and postpone big purchases. | The result could be a surge in bankruptcies as companies — in particular in the shale industry, where many drillers are deep in debt — tip over a financial cliff. More workers lose their jobs. Families cancel vacations and postpone big purchases. |
| Round and round the cycle goes, further sapping the economy. | Round and round the cycle goes, further sapping the economy. |
| “Markets want to hear that the global economy is open for business, and the problem is, it isn’t easy to say that going forward,” said Patrick Chovanec, chief strategist at the investment advisory firm Silvercrest Asset Management. | “Markets want to hear that the global economy is open for business, and the problem is, it isn’t easy to say that going forward,” said Patrick Chovanec, chief strategist at the investment advisory firm Silvercrest Asset Management. |
| It is possible, of course, that investors’ gloom will prove to be overblown. | It is possible, of course, that investors’ gloom will prove to be overblown. |
| At some point, for example, the coronavirus is likely to stop spreading; it already appears to be easing in China and South Korea. If that happens soon, any economic damage from closed factories and canceled conferences and restricted travel may prove fleeting. | At some point, for example, the coronavirus is likely to stop spreading; it already appears to be easing in China and South Korea. If that happens soon, any economic damage from closed factories and canceled conferences and restricted travel may prove fleeting. |
| Perhaps Russia and Saudi Arabia will quickly reach an agreement. And until they do, there is a silver lining to rock-bottom oil prices: The resulting cheap fuel will be a boon to consumers and to industries like trucking and airlines. | Perhaps Russia and Saudi Arabia will quickly reach an agreement. And until they do, there is a silver lining to rock-bottom oil prices: The resulting cheap fuel will be a boon to consumers and to industries like trucking and airlines. |
| All is not lost. Even after the decline on Monday, the S&P is still up 140 percent over the last 10 years. And the scorching bond market rally — bond prices go up as yields go down — has delivered outsize returns to many individual investors. Mutual funds and E.T.F.s holding longer-term U.S. government bonds were up 22 percent so far this year as of Friday, according to Morningstar. | All is not lost. Even after the decline on Monday, the S&P is still up 140 percent over the last 10 years. And the scorching bond market rally — bond prices go up as yields go down — has delivered outsize returns to many individual investors. Mutual funds and E.T.F.s holding longer-term U.S. government bonds were up 22 percent so far this year as of Friday, according to Morningstar. |
| In addition, low interest rates are good for people who own or are looking to buy a home. A mortgage refinancing boom is underway, and many borrowers will pocket substantial monthly savings. | In addition, low interest rates are good for people who own or are looking to buy a home. A mortgage refinancing boom is underway, and many borrowers will pocket substantial monthly savings. |
| “This is a temporary headwind to the economy,” said Rick Rieder, chief investment officer of global fixed income at BlackRock. “It’s temporary, but it’s a tornado-like headwind, so it’s going to be powerful for a period of time.” | “This is a temporary headwind to the economy,” said Rick Rieder, chief investment officer of global fixed income at BlackRock. “It’s temporary, but it’s a tornado-like headwind, so it’s going to be powerful for a period of time.” |
| Updated June 5, 2020 | Updated June 5, 2020 |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. | Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| He added that the amount of uncertainty in the markets is higher now than it was at the peak of the financial crisis. “I don’t even remember in 2009 the uncertainty being so high,” he said. | He added that the amount of uncertainty in the markets is higher now than it was at the peak of the financial crisis. “I don’t even remember in 2009 the uncertainty being so high,” he said. |
| Governments and central banks are scrambling to defuse the precarious financial situation. In addition to the Fed cutting interest rates and making it easier for banks to borrow money, the Trump administration and Congress are discussing ways to stimulate the economy. | Governments and central banks are scrambling to defuse the precarious financial situation. In addition to the Fed cutting interest rates and making it easier for banks to borrow money, the Trump administration and Congress are discussing ways to stimulate the economy. |
| But that is unlikely to offer much immediate help. | But that is unlikely to offer much immediate help. |
| “Many investors are anticipating fiscal stimulus within days, but that’s not typically how D.C. acts — even in emergency situations,” Henrietta Treyz, director of economic policy at Veda Partners, an investment advisory and consulting firm in Bethesda, Md., said in a note to clients on Monday. “It takes weeks to pass even the most urgent of legislation, and there are very few ideas circulating on Capitol Hill right now.” | “Many investors are anticipating fiscal stimulus within days, but that’s not typically how D.C. acts — even in emergency situations,” Henrietta Treyz, director of economic policy at Veda Partners, an investment advisory and consulting firm in Bethesda, Md., said in a note to clients on Monday. “It takes weeks to pass even the most urgent of legislation, and there are very few ideas circulating on Capitol Hill right now.” |
| In the meantime, the signs of stress are multiplying, especially in normally mundane corners of the financial markets. | In the meantime, the signs of stress are multiplying, especially in normally mundane corners of the financial markets. |
| In recent days, for instance, investors that buy ultra-short-term debt issued by companies — including a popular variety known as commercial paper — have started growing jumpy. Investors like money-market mutual funds are demanding much higher interest rates. | In recent days, for instance, investors that buy ultra-short-term debt issued by companies — including a popular variety known as commercial paper — have started growing jumpy. Investors like money-market mutual funds are demanding much higher interest rates. |
| That drives up many companies’ borrowing costs, which makes it more expensive for them to operate. It also shows that institutional investors fear that an increase in corporate defaults could be imminent. | That drives up many companies’ borrowing costs, which makes it more expensive for them to operate. It also shows that institutional investors fear that an increase in corporate defaults could be imminent. |
| The good news is that the U.S. banking industry is, over all, much stronger than it was in 2008 as an intense financial crisis enveloped the world. | The good news is that the U.S. banking industry is, over all, much stronger than it was in 2008 as an intense financial crisis enveloped the world. |
| The energy industry, though, is shaping up to be among the hardest hit sections of the U.S. economy. Demand for energy was already set to decline with an economic slowdown. Then Saudi Arabia and Russia initiated a pricing war. | The energy industry, though, is shaping up to be among the hardest hit sections of the U.S. economy. Demand for energy was already set to decline with an economic slowdown. Then Saudi Arabia and Russia initiated a pricing war. |
| Shares of companies like Marathon Oil and Apache Corporation fell more than 40 percent on Monday, while Exxon Mobil stock fell 12 percent, and Chevron slid 15 percent. | Shares of companies like Marathon Oil and Apache Corporation fell more than 40 percent on Monday, while Exxon Mobil stock fell 12 percent, and Chevron slid 15 percent. |
| Some of the companies that pioneered the shale boom, including Chesapeake Energy and Range Resources, were already in trouble, and their woes are likely to intensify. Chesapeake’s stock goes for pennies; its bonds are trading at a level that reflect investor expectations of a default. Range Resources, an early natural gas driller in Pennsylvania, is, like many of its peers there, slashing its capital spending. | Some of the companies that pioneered the shale boom, including Chesapeake Energy and Range Resources, were already in trouble, and their woes are likely to intensify. Chesapeake’s stock goes for pennies; its bonds are trading at a level that reflect investor expectations of a default. Range Resources, an early natural gas driller in Pennsylvania, is, like many of its peers there, slashing its capital spending. |
| That is likely to hurt the local economies in which the gas companies operate — another reminder of how the economy is in danger of getting sucked into a steep, sinking spiral. | That is likely to hurt the local economies in which the gas companies operate — another reminder of how the economy is in danger of getting sucked into a steep, sinking spiral. |