On the way up: First-time claims for unemployment insurance in Louisiana for the week ending Dec. 19 increased from the previous week’s total. The state labor department figures released Monday show the initial claims increased to 2,675 from the previous week’s total of 2,443. For the comparable week a year earlier, there were 2,531. The four-week moving average, which is a less volatile measure of claims, increased to 2,522 from the previous week’s total of 2,454. Continued unemployment claims claimed for the week ending Dec. 19 increased to 21,789 compared to 21,530 the previous week. The four-week moving average for such claims increased to 21,991 from the previous week’s average of 21,944.
On the way down: As the price of crude falls for a second year, marking the steepest decline since the recession, the impact is cascading through the finances of states, cities and counties. Once flush when production boomed, Bloomberg reports some governments in major energy producing regions are facing a new era of unwelcome austerity as wells are shut—along with the tax-revenue gushers they spouted. Alaska, Colorado, Louisiana, North Dakota, Oklahoma and Texas have seen its tax collections diminished most by the rout, which has put pressure on credit ratings and led investors to demand higher yields on some securities. For example, a 10-year Louisiana bond traded last month for a yield of 2.64%, or 0.56 percentage point over top-rated debt, more than triple the gap when they were first sold a year ago. Read the full story.
Drastic times and measures: Rising financial stress in the U.S. energy sector has prompted some suppliers and vendors to take unusual legal action to collect unpaid debts: forcing struggling companies with billions of dollars in debt into bankruptcy. Reuters reports that since August, creditors have filed petitions for involuntary bankruptcy against three energy producers with nearly $2 billion in combined debt. Petitions for involuntary bankruptcy, which seek to impose court oversight on a company that is not paying its debts, are very rare and typically target smaller operations. Over the past decade, they accounted for less than 1% of the tens of thousands of business bankruptcies filed each year, according to the Administrative Office of the U.S. Courts. Over the past 12 years, creditors have taken such action against only six public companies. Four of those were filed this year. Involuntary bankruptcies signal deepening pessimism about the crude market outlook and herald more distress for oil and gas producers if prices stay low. Read the full story.
