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Poison Ranch: The Porter Ranch Gas Blowout

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May 6, 2016

Poison Ranch: The Porter Ranch Gas Blowout

Jennifer: “It’s not necessarily the gas; it’s the chemicals they lied about, the benzene and other carcinogens in the well. It was one of those eye-opening things; we were about to go back, and slowly going back to our house for a few hours at a time to clean up and prepare to move back, and one night the kids were there with my mom who was watching them … and my daughter woke up twice that night and threw up, and then you’re thinking, ‘Well is it just the gas, or is my kid just sick? But being that there’s five kids, surprisingly we’re a pretty healthy family. About five days later they read the benzene levels were at 2.4. Now, the legal limit for Benzene is under one, and it was at 2.4 that day. Now looking back I’m like, well, that could have been the reason my daughter threw up twice. Everyone’s mad at the gas company because they can get away with things and just say, ‘Your kid’s probably just sick.’”

Andrew: “There’s no trust of the gas company or regulatory boards. The only group that’s been trustworthy or feasible testing program is the University of California — Los Angeles. The department of public health didn’t know what to do. They basically merged with UCLA to fund their testing.”

Jennifer: “What’s come out clearly, is this facility leaked before the blowout. You have to look at the language the gas company uses. They talk about air levels returning to ‘pre-leak’ levels. What people are starting to realize is that even as of a month ago there were 66 leaks. They’ve just had it return to whatever those levels were. The problem is we only know maybe 10 of the potentially hundreds of chemicals we were exposed to because it’s proprietary and the gas company won’t release it. So we don’t even know what we’re testing for. The leaks are supposed to be resolved. They are not.”

Andrew: “So we still have air-quality issues, and a bigger issue is that everything that was spewed is in the environment now, in trees, on the ground, in your house. They’ve already talked about smaller-than-dust-size particles that can’t be seen. So we don’t know what we’re looking for, but it’s been admitted that it’s around and coated everything. So how are they treating that portion of it? You gotta fix the air, you gotta prove that the ground and homes are clean and safe, and do that over however many square miles of the north valley that you have to handle, and do it in a manner that people believe you when you release results as independently as possible.”

Jennifer: “What’s hard is we have really good friends who turn their noses up at us because they aren’t getting sick. We dealt with lots of close friends who just blindly trusted everything was fine because the gas company said it was fine, and it took some of them four months to where they finally got sick enough to leave.”

David Overton, a 34-year-old software engineer, looks toward his home of five years in Porter Ranch. Citing health concerns for their three children, he and his wife decided to relocate to a hotel until the area is deemed safe again. “My wife and I grew up poor,” he says. “We had to work our entire lives to live here. We’re not sure if it will ever be the same in Porter Ranch, not to mention the impact on home values. People are pretty pissed off about it.”

Alan and Sandy Crawford of Granada Hills join a protest outside of Southern California Gas Company offices on March 22. “The breaking point for us was when we returned home and the kids got sick again. In the hotel we kept up with all the protests and events on Facebook and everything, but it was easy to be removed from it all,” Sandy says. “Once we got back and the nosebleeds started happening again, we decided enough was enough.” Sandy is holding a sign showing their son Diesel with a bloody nose.

Sandy, Chancellor, Diesel, and Alan Crawford stand outside their home in Granada Hills, which they have temporarily vacated due to nosebleeds and other health issues related to the nearby gas leak. Depending on the winds in the canyon, many communities other than Porter Ranch also reported health issues.

“We’ve lived here five years. It’s a great place to raise kids. We don’t want to leave,” Sandy says. “We’re still paying for the hotel because we don’t feel safe fully moving back home yet. We want the gas company to cover our cleaning expenses, the hotel, etc.”

“The regulations have to change,” Alan says. “I knew as soon as I heard that [Governor] Jerry Brown’s sister was on the board of directors for the Southern California Gas Company that’s why they dragged their feet for so long.”

Jitender Singh looks into the back of a moving truck as office supplies are packed up with help from his employees. Singh has run a cyber-security firm out of his house in Porter Ranch for years, but finally decided to relocate temporarily because of the gas leak. “My wife was having symptoms, and a few of my employees complained about feeling sick, so it was time to go,” he says.

University of California-Davis scientist and pilot Stephen Conley steps over cables transferring data from instruments on his plane at Van Nuys airport on January 21 after making another flight over Aliso Canyon to measure methane emissions from the gas leak.

Conley was one of the first scientists to sound alarms to the public about the massive scale of the leak and has been making flights for several weeks to gather data. The flight path goes through windy canyons and heavy turbulence before reaching the invisible cloud of methane and its accompanying foul-smelling compound mercaptan, which is a chemical added to make the odor of natural gas detectable. “I’ve had seven people, other researchers mostly, join me on the flights, and all seven of them have gotten sick on the ride,” he says. “I guess I’ve got a strong stomach.”

Doctor and activist Leah Garland affixes a gas mask at a rally on January 16 demanding the shut down of the Aliso Canyon oil and gas wells.

Gurbux Singh of Chatsworth protests on January 23 outside of the Hilton Hotel in Woodland Hills before a public hearing concerning the natural gas storage facilities in Aliso Canyon. Singh says the community will “keep fighting” until the gas storage facilities surrounding nearby residential areas are permanently shut down.

A member of the Sierra Club environmental group dances with a cutout of California Governor Jerry Brown at a Save Porter Ranch rally at Granada Hills Charter School on January 16. Governor Brown has been criticized for responding slowly to the situation, leaving many to speculate that his lack of response was influenced by his sister Kathleen Brown’s position on the board of director’s for the Southern California Gas Company.

Employees and contractors of the Southern California Gas company huddle to discuss the night’s testing plan of chemical emissions on January 14 near the entrance to the Aliso Canyon storage facility where natural gas had been leaking since October.

Ammar Abukarah, a longtime resident of Porter Ranch, flies his recreational drone over Aliso Canyon to get a better view of the leak site. Many hiking paths into the canyon have been blocked by the Southern California Gas Company security contractors, leaving curious residents like Ammar to resort to other means to satisfy their curiosity.

Gary Yamron of Porter Ranch attempts to visualize methane emissions spewing from Aliso Canyon using an infrared FLIR video camera that costs over $10,000. Yamron works for an environmental equipment rental company and happens to live in the Porter Ranch community that has been severely affected by the gas leaks, so he decided to test out the equipment’s infrared capabilities. A video uploaded to YouTube on December 12 used the same model of FLIR camera to record the otherwise invisible giant cloud of leaking methane.

A man from a cleaning service washes the floors of a recently vacated home on Dunure Place in Porter Ranch on March 26. The home, which is up for sale, was vacated by the previous owners because of the gas leak. This is the second time it has been cleaned, according to the man.

The sun sets over the community of Porter Ranch on the evening of January 28, a few weeks before the largest methane blowout in U.S. history was finally capped less than a mile away. Over 112 days, the leak spewed 100,000 tons of methane into the atmosphere, equivalent to the annual greenhouse gas emissions of half a million cars, and the future is still uncertain for many residents who were affected.

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Healthy job gains expected despite weak report

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May 6, 2016

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Healthy job gains expected despite weak report

Several top analysts expect the government to report strong job growth on Friday despite a disappointing private-sector survey, a development that would reinforce the belief that the economy is poised to pick up after two weak quarters.

Payroll processor ADP said Wednesday that businesses added 156,000 jobs in April, well below the 195,000 economists expected and a possible red flag that the sluggish economy is finally dragging down the resilient labor market.

But economists project the Labor Department’s survey of the public and private sectors, due out Friday, will record 200,000 job gains for last month, according to the median estimate of those surveyed by Bloomberg. ADP’s tally has often varied significantly from Labor’s, though the two reflect similar broad trends.

High Frequency Economics, Barclays Capital and JPMorgan Chase expect Labor to announce job gains of 240,000 to 250,000 Friday, above the 209,000 monthly average so far this year. They largely point to initial jobless claims, a reliable gauge of layoffs, that continue to hover near 42-year lows. And the Institute for Supply Management said Wednesday that its measure of service-sector employment reflected more hiring last month.

The labor market has held up remarkably well, defying weak economic growth of 1.4% at an annual rate in the fourth quarter of 2015 and a meager 0.6% in this year’s first quarter. A listless global economy, strong dollar and low oil prices have hampered U.S. exports and the production of crude and related products such as steel pipes. Those headwinds typically hamper larger companies more than small businesses, which, the ADP report showed, continued to hire briskly.

Of greater concern is that consumer spending — which makes up 70% of economic activity — also has slowed. That has stoked worries that monthly payroll growth topping 200,000 a month may dip.

Yet Barclays economist Jesse Hurwitz blames the slip in consumption on soft heating demand because of unseasonably warm winter weather and a pullback in torrid auto sales. A report this week revealed that vehicle sales bounced back in April. Solid job growth, low gasoline prices and reduced household debt, should continue to support consumer purchases, economists say.

Meanwhile, both the dollar and oil prices have stabilized, while a sharp retreat in business stockpiling is mostly played out, says Jim O'Sullivan, High Frequency's chief U.S. economist.

Hurwitz also notes that the government has at least partly attributed a pattern of weak first-quarter growth to insufficient seasonal adjustments in the volatile cold-weather months. And many economists believe the labor market provides a better barometer of the economy than gross domestic product, which can be difficult to measure.

A report Friday of at least 200,000 or so payroll gains likely would dispel concerns of a weakening economy, O’Sullivan says. At the same time, he says, a disappointing tally “is going to be viewed as evidence the (job growth) trend is slowing.” Job gains of 150,000 or fewer likely would help dissuade an already-cautious Federal Reserve from raising interest rates again in June, he says. The Fed lifted its benchmark rate in December for the first time in nine years but has stood pat since.

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NY / Region|Shutdown or Less Service? MTA Weighs 2 Options for L Train Project

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May 6, 2016

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NY / Region|Shutdown or Less Service? MTA Weighs 2 Options for L Train Project

Crews work on the L train line after Hurricane Sandy damaged it in 2012. The Metropolitan Transportation Authority is considering two options for fixing the line’s tunnel under the East River.

The Metropolitan Transportation Authority is considering two proposals to shut down the L train tunnel between Manhattan and Brooklyn that would close the subway line under the East River or reduce its service by 80 percent, officials said on Wednesday.

The proposals that will be outlined at a public meeting in Brooklyn on Thursday are closing the entire tunnel for a year and a half to repair damage from Hurricane Sandy, or closing one tube at a time over a three-year period. Any shutdown — a growing source of anxiety among people who live along the crowded subway line — would not begin until early 2019, officials said.

If one tube remained open, trains would run every 12 to 15 minutes, up from the current interval of three to four minutes during the morning rush, officials said at a briefing for reporters. Trains could carry about one-fifth of the 225,000 riders who currently take the L train under the river each day.Passengers on an L train last month.

The agency has ruled out making repairs only during nights and weekends because the complex work could not be done in such a narrow window, said Veronique Hakim, the president of New York City Transit, which runs the subway and buses. Building a subway tunnel under the river, as some residents have suggested, would be expensive and take too much time, Ms. Hakim said.

Under either proposal, the authority might run extra buses over the Williamsburg Bridge and add ferry service between Manhattan and Brooklyn. Riders could be directed to other nearby subway routes, including the G and M lines, which would have additional trains to handle more passengers.

The authority’s chairman, Thomas F. Prendergast, and Ms. Hakim planned to present the two options on Thursday during the meeting at the Marcy Avenue Armory. A second public meeting is scheduled for May 12 at the Salvation Army Theater in Manhattan.One option presented by the transportation authority: closing the entire tunnel for a year and a half.

The subway crossing, known as the Canarsie tunnel, was flooded during the 2012 hurricane. Officials said the tunnel required major work to fix crumbling walls and to repair tracks and cables.

Despite the damage, Mr. Prendergast said that the tunnel was safe for riders, and that the agency had conducted regular inspections to look for problems. After receiving input from residents and businesses, the agency plans to decide which option to pursue within three months.

Asked whether he would rather close the whole tunnel at once, Mr. Prendergast said the agency was committed to hearing from the community before making a decision. But he noted that when people learned more about the plans, they often favored a full closing.The second option: closing one tube at a time over three years, with less frequent service.

“I think there is an ‘Aha’ moment they have in their minds, like, ‘Geez if it’s only one in five people you can carry, maybe it would be better to have two tracks,’” Mr. Prendergast said in reference to closing the tracks in both tubes, the more efficient of the two options.

The Canarsie tunnel work could cost $800 million to $1 billion, with the federal government covering much of the project, Mr. Prendergast said.

The briefing was the first time that officials from the authority discussed the plans in detail. Under plans for a full tunnel closing, no L trains would run between the Eighth Avenue stop in Manhattan and the Bedford Avenue stop in Brooklyn. The line would continue to run throughout the rest of Brooklyn.

If one tube were closed at a time, the L line would run in two separate segments: reduced service between Bedford Avenue and Eighth Avenue and nearly regular service between the Lorimer Street and Canarsie-Rockaway Parkway stops.

Asked whether buses might have a dedicated lane over the Williamsburg Bridge so they would not get stuck in traffic, Mr. Prendergast said the idea would be considered. To add capacity to the G line, Ms. Hakim said the agency would add cars to its trains, which are known for being shorter than their platforms.

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Consumer Agency Moves to Assert Bank Customers’ Right to Sue

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May 6, 2016

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Consumer Agency Moves to Assert Bank Customers’ Right to Sue

Richard Cordray, director of the Consumer Financial Protection Bureau, pointed out what a major change his agency was poised to bring about. “Many banks and financial companies avoid accountability by putting arbitration clauses in their contracts that block groups of their customers from suing them,” he said in a statement.

The rule would apply only to the consumer financial companies that the agency regulates. It would not apply to arbitration clauses tucked into contracts for cellphone service, car rentals, nursing homes or employment.

“It is a good start,” said Berle M. Schiller, a federal judge in Philadelphia who has been critical of arbitration clauses that dismantle class actions and tip the scales in favor of companies. “Class actions are the only way that companies can be brought to heel.”

The agency’s proposed rule would be the first significant check on arbitration since a pair of Supreme Court decisions in 2011 and 2013 blessed its widespread use. Those decisions signaled the culmination of an effort by a coalition of credit card companies to stop the tide of class-action lawsuits.

The group dusted off a federal law dating to 1925 that formalized arbitration as a means for companies to resolve their disputes with one another. Starting in the early 2000s, the credit card companies began widely using arbitration for disputes with their customers.

As arbitration spread, it drew the ire of prosecutors, judges and officials like Senator Elizabeth Warren, Democrat of Massachusetts, who championed the creation of the consumer protection bureau. The Dodd-Frank law, which overhauled Wall Street and created the bureau, specifically charged the agency with the task of studying arbitration.

Last March, the agency released a 728-page report detailing how few consumers followed through with arbitration once their class actions were blocked.

Removing the Ability to Sue

A New York Times study of the increasing use of arbitration clauses in contracts, which has effectively forced millions of people to sign away their right to go to court.

For the few who did go through with the process, the report also showed the lopsided nature of the rulings. Businesses won bigger judgments against consumers in arbitration — a total of $2.8 million in 2010 and 2011, largely for debt payments — than the consumers obtained in relief, according to the agency’s analysis.

During that period, only 78 arbitration claims resulted in judgments in favor of consumers, who received less than $400,000 in total relief.

The financial industry disputed the findings, arguing that on an individual basis, consumers fare better in arbitration than in class actions. On average, awards in arbitration are 166 times as great as the sums received by individuals participating in a class action, according to the industry’s analysis.

But judges and law professors say that class actions, by their very nature, are meant to help large groups of people recoup small amounts of money — a $35 overdraft fee or a mysterious $5 late fee, for example.

And more broadly, class actions can force companies to change their business practices.

Banks — not all of which use mandatory arbitration clauses — may understand that concept better than most. Banks had to pay more than $1 billion to settle class-action lawsuits, beginning in 2009, that accused them of manipulating their checking account policies to maximize the number of overdraft fees.

Since then, seven of the banks involved in the class actions have adopted mandatory arbitration clauses.

The new rules giving borrowers access to class actions are likely to draw vigorous opposition from the U.S. Chamber of Commerce and other business groups, though they may not be able to do much about them. Their position has been that the consumer agency’s study does not support its conclusions about mandatory arbitration.

“The proposed rule is a wolf in sheep’s clothing,” the U.S. Chamber of Commerce said in a statement. “Now the agency designed to protect consumers is proposing a rule that will end up hurting them.”

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Yahoo loses key AT&T business

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May 6, 2016

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As Yahoo continues to weigh offers from potential bidders, its current display ad and search business has taken a hit.

AT&T(T, Tech30) said Wednesday that it would be ending part of a 15-year-old deal with the company. It's moving management of its online portal, AT&T applications, and search to another company, Synacor (SYNC).

The Wall Street Journal first reported the break on Wednesday.

AT&T confirmed the split in a statement, saying the transition would take place over the next one to two years. It will not have any impact on AT&T email, which will continue to be hosted by Yahoo (YAHOF).

Related: Yahoo is for sale; bidders line up; Marissa Mayer is toast

"It is another step as we integrate the entertainment and services our customers want. Our customers will not have to take any actions during this transition. This deal does not impact email addresses," said AT&T.

In a news release announcing the new contract, Synacor estimated the revenue from the deal at around $100 million a year after the transition is completed.

Under the expiring deal with Yahoo, visitors to att.net are redirected to att.yahoo.com where they are greeted with a Yahoo search bar and the latest Yahoo news. Yahoo search also appears in other AT&T products.

"We are honored to have been selected from among the contenders AT&T considered in their evaluation process," said Himesh Bhise, Synacor's CEO, in the release.

Yahoo declined to comment on the matter.

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The cost of the massive, 4-month gas leak around Los Angeles has climbed to $665 million

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May 6, 2016

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The cost of the massive, 4-month gas leak around Los Angeles has climbed to $665 million

SoCalGas crews and technical experts attempt to safely stop the flow of natural gas leaking from a storage well at the utility's Aliso Canyon facility near the Northridge section of Los Angeles in November 2015. Sempra Energy says costs from a massive gas leak in Los Angeles have reached $665 million.

The estimated cost of a massive gas well blowout that spewed methane uncontrollably for nearly four months and uprooted 8,000 Los Angeles families has more than doubled to $665 million, Sempra Energy announced Wednesday.

San Diego-based Sempra had estimated costs of $330 million in its annual report in February, but that was before courts forced its Southern California Gas Co. to continue paying to house thousands of relocated residents.

The gas leak at the Aliso Canyon storage facility was the largest-known release of climate-changing methane in U.S. history, according to scientists. It spewed an estimated 107,000 tons of methane over 16 weeks.

The blowout reported Oct. 23 sickened residents in Porter Ranch and surrounding San Fernando Valley suburbs who complained of headaches, nausea, nosebleeds and other symptoms as the foul-smelling gas wafted over neighborhoods.

SoCalGas has pointed out that public health agencies have found the air quality in the area has returned to normal, though many residents have continued to complain of maladies since the leak was capped in February. Some 3,700 households remain in short- or long-term housing, many because of fears of returning until they are assured their homes are clean and safe.

Dennis Arriola, president and chief executive of SoCalGas, said that 54 percent of relocated residents had returned home and more were returning each week.

He said the latest cost estimates, which were included in Sempra's first-quarter earnings, reflected the expectation the company will continue to pay housing for relocated families until June 7 when another court hearing is scheduled.

Judges have repeatedly extended orders for the company to pay relocation costs while the Los Angeles County Department of Public Health tests homes for carcinogens and other compounds found in natural gas.

The company has begun moving families from hotels to apartments, which it said was being done to provide more space and amenities such as kitchens. Arriola said it also allowed the company to cut costs because it won't have to pay $45 per person each day for meals.

gas leak california los angeles A woman holds a sign while attending a public hearing before the South Coast Air Quality Management District (AQMD) regarding a proposed stipulated abatement order to stop a nearby massive natural gas leak, on January 16, 2016 in Granada Hills, near Porter Ranch, California.Arriola said the lion's share of the latest cost estimate — 70 percent — is for relocation expenses. The other 30 percent is split equally between: costs for stopping the leak and investigating its cause; and legal and other costs.

The estimates do not account for possible damages from 138 pending lawsuits or civil or criminal penalties that could be brought by a swarm of government agencies investigating the leak.

The company said it has four types of insurance policies to cover more than $1 billion in costs. In its first-quarter earnings report Wednesday, Sempra said SoCalGas has recorded an insurance receivable of $660 million.

Sempra said the estimated costs had no material impact on earnings in the quarter. Net income for Sempra was down 28 percent from the same quarter last year and earnings fell short of Wall Street expectations.

Arriola said the company expects an investigation into the cause of the leak to be completed by early 2017.

He reiterated plans to complete a battery of tests on the remaining 114 wells at the field so the company can resume storing gas underground.

Aliso Canyon is the largest gas storage facility west of the Mississippi River and a major source of energy for the Los Angeles area. Energy officials have warned of possible blackouts this summer if it is not able to operate.

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Media|Tribune Publishing Says No to Gannett’s $815 Million Offer

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May 6, 2016

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Media|Tribune Publishing Says No to Gannett’s $815 Million Offer

The Los Angeles Times building. The owner of the newspaper, Tribune Publishing Company, rejected an unsolicited offer from Gannett.

Two weeks after the Gannett Company went public with an unsolicited bid to acquire Tribune Publishing Company, Tribune’s board formally responded with a firm answer: No.

On Wednesday, Tribune Publishing, which owns newspapers including The Los Angeles Times and The Chicago Tribune, sent a letter to Gannett saying its board had unanimously rejected the $815 million takeover offer, which included debt and other liabilities and represented a significant premium above Tribune’s share price.

“The board believes that the price reflected in the proposal understates the company’s true value and is not in the best interests of our shareholders,” the letter said.

Gannett’s bid was an unconventional move in the newspaper industry, and Tribune’s rejection was not surprising. Still, the reply ratchets up the pressure on Gannett, which can now choose to walk away or try to assuage shareholders’ objections.

“This announcement reaffirms our concern from the outset that Tribune’s board never intended to engage with us, necessitating that we make our proposal public,” John Jeffry Louis, chairman of the Gannett board, said in a statement. “It is unfortunate that Tribune’s board would deny their shareholders this compelling, immediate and certain cash value by rejecting our offer without making a counterproposal or otherwise negotiating or providing any constructive feedback.”

Gannett, which owns USA Today, went public on Monday with its intent to solicit so-called withhold votes ahead of Tribune’s annual shareholder meeting. This tactic, infrequently used in the world of deal making, encourages shareholders of the target company to essentially boycott their votes for director nominees. Gannett said it had filed preliminary proxy materials, urging investors to withhold their votes in the election of eight directors. The move is primarily symbolic, in that it will probably not block the nominees from being elected.

“We intend to give Tribune shareholders the opportunity to send a clear message to the Tribune board that its lack of engagement with our board and management team regarding our highly compelling premium offer for $12.25 per share in cash is unacceptable,” Gannett’s chief executive, Robert Dickey, said in the statement on Monday.

Gannett missed the nomination window to submit its own slate of directors, a move that might have put even more pressure on Tribune’s board.

On April 12, Gannett sent a letter to Tribune Publishing’s management team with an offer of $12.25 a share. After waiting two weeks for an answer, Gannett tried to bring Tribune Publishing to the table by disclosing the bid and corresponding letter. If the acquisition were to go through, it would expand Gannett’s portfolio to nearly 120 newspapers and give it more of a presence in major markets, including Los Angeles, Chicago and Baltimore.

But the management team at Tribune seemed to think that remaining independent was the better course. In a statement, Justin C. Dearborn, the chief executive of Tribune Publishing, said the company was “in the early stages of a compelling transformation” and that the board was “confident that the execution of our stand-alone strategic plan will generate shareholder value in excess of Gannett’s proposal.”

During an earnings call with investors on Wednesday, Mr. Dearborn said The Los Angeles Times planned to open seven overseas news bureaus this year.

He also addressed Gannett’s offer.

“I want to be clear that we did not seek or encourage this proposal, and the board has not been trying to sell the company,” he said. “I also want to reiterate that Gannett’s repeated claims that our board did not take this proposal seriously are misleading and disingenuous.

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ES Morning Update May 5th 2016

Reds Daily Updates

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May 5, 2016

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Futures hit the falling trendline of resistance afterhours and briefly pushed through it (hitting 2060) before falling back to trade sideways riding that trendline.

The MACD's on this 2 hour have more room to go up but the 60 minute chart is rolling over suggests a pullback in the morning and then a turn back up later on.

Looking at the various time frame on the ES Futures and the SPX Cash we do appear to be close to a short term bottom. While the 60 minute chart on the futures acts like it's going to rollover and push the market down the other time frame charts suggest that the market isn't ready to collapse yet as they want to turn up for a few days or so. And since we had brief pierce of the falling trendline of resistance afterhours and are currently choppy sideways this suggests the pullback should be small as the market wants to go back up through that trendline again and try to hit the next falling trendline up a little higher.

Patternwise we are making an "Inverted Head And Shoulders" pattern on this 2 hours chart and the smaller timeframe charts as well. What we might see is the futures drift down some early riding that falling trendline to reset the overbought 60 minute chart and make a slightly deeper "Right Shoulder" for the IH&S pattern. That would leave the afternoon session and/or Friday for the breakout to the upside to happen. It would also make an ABC pattern of wave up from yesterday's low, which the breakout wave would be the C wave up to end the pattern sometime later today or Friday morning.

That is my preferred scenario and the one I see that has the best odds. However, we still only came close to the 2042 target on the SPX Cash (about 2035 on the ES Futures) and it's still possible that this first attempt rallying up fails to make an ABC up and just drops at the open and makes another lower low today. If so, then I'm still going with the same target zones of 2035 on this futures chart and 2042 on the SPX cash. On the pullback (for either scenario) the first support is the 2045.75 level from the prior low on 4/29 and then of course the "Head" of this IH&S pattern, which was yesterday's low 2039.00... break that and 2035 is next followed by 2026.

Tribune Publishing rejects Gannett’s bid

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May 5, 2016

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Tribune Publishing rejects Gannett’s bid

Tribune Publishing shares plummet after the company revises 2015 revenue, earnings estimates.

Tribune Publishing, which owns the Los Angeles Times, Chicago Tribune and nine other daily newspapers, said Wednesday its board of directors has rejected Gannett's $815 million offer to buy the company.

"Tribune Publishing’s board has unanimously determined that Gannett’s opportunistic proposal understates the company’s true value and is not in the best interests of its shareholders," Tribune said in a statement.

Tribune shares rose 4.4% to $11.50 in after-hours trading.

On April 25, Gannett, which owns USA TODAY and 107 local news properties, revealed its offer to buy Tribune Publishing for $12.25 per share and assume $390 million of Tribune's debt, bringing the total value of the bid to $815 million. Gannett CEO Robert Dickey, who submitted the offer in a private letter to Tribune's board on April 12, said he chose to go public with the offer due to Tribune's "continued refusal to begin constructive discussions with us."

Tribune's board has since hired bankers to review the offer, but its management has maintained that it prefers to run the company on its own with a new strategy formed by Michael Ferro, the company's chairman and its single-largest shareholder, and Tribune CEO Justin Dearborn.

"Tribune Publishing is in the early stages of a compelling transformation, with a well-defined strategic plan to drive increasing monetization of our important brands, capitalize on the global potential of the LA Times and significantly accelerate our conversion of content to revenue through an enhanced digital strategy,” Dearborn said in a statement Wednesday.

Tribune announced Wednesday that it had suffered a loss in the first quarter of this year.

Tribune's board is open to evaluating "any credible proposal," but for now, Tribune will begin executing its strategy that includes investing more in content and deploying "programmatic" advertising-buying technology more widely at its news properties, Dearborn said in a call with analysts Wednesday afternoon. As part of expansion, the L.A. Times plans to open seven foreign bureaus, including outposts in Hong Kong, Seoul and Mexico City.

Dearborn also said the company will create a business unit called Tronc to sell more digital ads. According to the U.S. Patent and Trademark Office’s record on Tribune’s trademarking of the term, the unit’s new services will include “compilation, production and dissemination of advertising matter” and “social media strategy and marketing consultancy services.”

"I believe we have a fundamental advantage in that we create more original curated content," Dearborn said.

“Likely, this will be a test of wills,” said Ken Doctor, a media analyst who writes about the news business at his site, Newsonomics.com. “Tribune chairman Michael Ferro will try to stonewall Gannett, while Gannett must decide how much public and legal pressure it is willing to exercise to win the company. I expect this test of wills will be decided sooner than later. In this case, while Tribune management passions may be high, the numbers are on Gannett's side — and numbers usually triumph in these cases.”

He added, “Given the poor Tribune revenues …Tribune has a hard time justifying a greater value for the company than Gannett has offered.”

As the earnings call began, analysts were told Dearborn wouldn't answer questions about the Gannett offer. Ferro, who became Tribune's board chairman in February after buying a 16.6% stake for $44.4 million and expanded the board to 10 members from seven, didn't participate in the call.

"Gannett’s opportunistic proposal understates the company’s true value and is not a basis for further discussion," Dearborn said. "The board is confident that the execution of our standalone strategic plan will generate shareholder value in excess of Gannett’s proposal.”

Tribune, based in Chicago, also said Wednesday it swung to a loss in the first quarter as rising circulation revenue couldn't offset an advertising sales drop and higher expenses.

Net loss for the three-month period ending March 27 totaled $6.5 million vs. $2.5 million of net profit a year ago.

Per-share earnings, after adjusting for some items, including employee buyout costs, were 23 cents, below 25 cents estimated by analysts who were polled by S&P Global Market Intelligence.

Revenue was relatively flat at $398.2 million.

Advertising sales fell 4.4% to $214.7 million due to "softening" in print ad sales, it said. Circulation revenue rose 11.4% to $121.8 million as the company raised rates. Total digital revenues rose 15% to $55 million.

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Two Tesla Production Chiefs to Leave Ahead of Biggest Challenge Yet

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Red

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May 5, 2016

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Two Tesla Production Chiefs to Leave Ahead of Biggest Challenge Yet

Two top manufacturing executives are leaving Tesla Motors Inc., including the global head of production, at a time when the electric-car company is about to release its most important car: the mass-production Model 3.

Greg Reichow, Tesla's vice president of production and one of its highest-paid executives, and Josh Ensign, vice president of manufacturing, will leave the company. A Tesla spokesperson confirmed both departures and said Reichow will remain until his replacement is found.

A person familiar with the situation who isn't authorized to speak about the matter said the executive changes are linked to delays, glitches, and a recall that have bedeviled Tesla's Model X. Tesla denied any connection between the departures and production problems with its SUV. "This is not about the Model X," said a Tesla spokesperson. "After being at Tesla for over five years and leading its production team for the past three years, Greg Reichow has announced his intention to take a leave of absence from Tesla so that he can have a well-earned break."

The latest high-level personnel changes brings to five the total number of Tesla vice presidents who have left the company this year, and Reichow marks the biggest departure. He served as the leader of car production and had been one of Tesla's highest-compensated employees, making almost $6.4 million in cash, stock, and options in the last two years, according to company filings. Tesla did not elaborate on Ensign's plan to leave.

"Greg and the team deserve a lot of credit for building an all-new manufacturing organization from the ground up and for making Model S and Model X a reality," said Tesla Chief Executive Officer Elon Musk in an e-mail to Bloomberg. "We're confident that with the strength of the team, high-quality manufacturing at Tesla will continue." In the same e-mail provided by Tesla, Reichow added: "My belief in Tesla's ability to successfully deliver great cars and inspire the world to drive electric remains as strong as ever."

While Tesla described Reichow's exit as a leave of absence—and other executives have left and rejoined—the company also said Reichow will be involved in handing off his responsibilities to a successor to ensure uninterrupted production.

The launch of Tesla’s Model X, which Reichow helped oversee, was marred by delays. Musk has publicly taken responsibility for what he described as engineering "hubris" that packed too many new features into the first version of the SUV, including the double-hinged "falcon-wing" doors and mono-post seats. The Model X was delayed by more than 18 months, following missed launch dates for previous models. Several thousand of the earliest Model X vehicles were recalled over problems with the seats.

“In retrospect,” Musk said in September, “we would not have had so many features and functionality.”

The company has been working to resolve the problems. Model X deliveries have been increasing, and reviews have been positive. Tesla will report first-quarter earnings after the close of stock trading on Wednesday.

Other senior executives who have left Tesla this year include Michael Zanoni, vice president of finance and worldwide controller; James Chen, vice president of regulatory affairs and deputy general counsel; and Ricardo Reyes, vice president of global communications. Tesla said that of 40 executive positions filled in the last year, only one has left. Half the people who report directly to Musk have been at the company for more than five years.

Reichow joined Tesla in April 2011. He had previously worked at U.S. solar panel manufacturer SunPower for more than seven years, according to his profile posted on LinkedIn, which cited no prior auto industry experience. Ensign joined Tesla in June 2014 after working at Honeywell for more than a decade. Ensign could not immediately be reached for comment.

Next up for Tesla may be its biggest manufacturing and production challenge yet: building the Model 3. The $35,000 mass-market electric car received deposits for 400,000 reservations in the weeks after the March 31 unveiling of the prototype. Before the designated launch date of late 2017, Tesla needs to massively ramp up production capacity—first for the Model X, then for the batteries that power all of Tesla's vehicles, and finally for the Model 3 itself. Much of that effort will now fall to an as-yet-unnamed top production executive.