last month

A gauge of risk on Oracle Corp.’s debt reached a three-year high in November, and things are only going to get worse in 2026 unless the database giant is able to assuage investor anxiety about a massive artificial intelligence spending spree, according to Morgan Stanley.

A funding gap, swelling balance sheet and obsolescence risk are just some of the hazards Oracle is facing, according to Lindsay Tyler and David Hamburger, credit analysts at the brokerage. The cost of insuring Oracle Corp.’s debt against default over the next five years rose to 1.25 percentage point a year on Tuesday, according to ICE Data Services.

The price on the five-year credit default swaps is at risk of toppling a record set in 2008 as concerns over the company’s borrowing binge to finance its AI ambitions continue to spur heavy hedging by banks and investors, they warned in a note Wednesday.

The CDS could break through 1.5 percentage point in the near term and could approach 2 percentage points if communication around its financing strategy remains limited as the new year progresses, the analysts wrote. Oracle CDS hit a record 1.98 percentage point in 2008, ICE Data Services shows.

A representative for Oracle declined to comment.

Oracle is among firms taking part in an artificial intelligence spending race, which has quickly made the data center giant the credit market’s barometer for AI risk. The company borrowed $18 billion in the US high-grade market in September. Then in early November, a group of about 20 banks arranged a roughly $18 billion project finance loan to construct a data center campus in New Mexico, which Oracle will take over as tenant.

Banks are also providing a separate $38 billion loan package to help finance the construction of data centers in Texas and Wisconsin developed by Vantage Data Centers, Bloomberg reported last month. Lenders involved in these construction loans linked to Oracle are likely a key driver of the surge in trading volume on the Oracle’s CDS recently, a trend that may persist, according to Morgan Stanley.

“Over the past two months, it has become more apparent that reported construction loans in the works, for sites where Oracle is the future tenant, may be an even greater driver of hedging of late and going forward,” wrote the analysts.

There is a risk that some hedges by banks could unwind if and when banks distribute these loans to other parties, they wrote. Still, other parties may also hedge at some point even if down the road plus the construction debt funding needs don’t stop after the Vantage sites and the New Mexico site.

Last month, the analysts said they expect near-term credit deterioration and uncertainty to drive further hedging by bondholders, lenders and thematic players.

“The bondholder hedging dynamic and also the thematic hedging dynamic could both grow in importance down the road,” they added.

Oracle CDS have underperformed the broader investment-grade CDX index and Oracle corporate bonds have underperformed the Bloomberg high-grade index amid the jump in hedging demand and the weakening sentiment. Concerns have also started to weigh on Oracle’s stock, which the analysts said may incentivize management to outline a financing plan on the upcoming earnings call, including details on Stargate, data centers and capital spending.

The analysts had previously been recommending investors buy Oracle bonds and CDS in what is known as a basis trade, to profit from their expectation that credit derivatives would widen more than the bonds. Now they’re saying it’s a cleaner trade to just buy the CDS outright.

“Therefore, we are closing the ‘buy bond’ part of the basis trade, and keeping the ‘buy CDS protection’ leg of it,” they wrote. “We think a trade in CDS outright is cleaner right now and will result in a greater spread move.”

Larry Ellison, Oracle’s chairman of the board, is backing his son David Ellison’s bid to acquire Warner Bros Discovery, which is also considering offers from Netflix and Comcast.

Mutua writes for Bloomberg.

As Jaime Moore prepares to take the helm of the Los Angeles Fire Department, he said he plans to commission an outside investigation into missteps by fire officials during the mop-up of a small brush fire that reignited days later into the destructive Palisades fire.

Mayor Karen Bass had requested a probe late last month in response to reporting by The Times that firefighters were ordered to roll up their hoses and leave the burn area, even though they had complained that the ground was still smoldering.

Moore — a 30-year department veteran whose appointment was confirmed Friday by the Los Angeles City Council — said the reports have generated “understandable mistrust” in the agency.

The Times found that at least one chief assigned to LAFD’s risk management section knew about the complaints for months, but that the department kept that information hidden despite Palisades fire victims pleading for answers about whether more could have been done to protect their community.

On Wednesday, Moore told the council’s public safety committee that bringing in an outside organization to investigate the LAFD’s handling of the Jan. 1 Lachman fire would be one of his first moves as chief.

“Transparency and accountability are vital to ensure that we learn from every incident and is essential if we are to restore confidence in our Fire Department,” Moore said. “As fire chief, I will focus on rebuilding trust, not just with the public, but within the LAFD itself.”

Federal investigators say the Lachman fire was deliberately set on New Years’ Day and burned underground in a canyon root system until it was rekindled by high winds on Jan. 7. LAFD officials have said they believed the earlier fire was fully extinguished.

Moore said one of his top priorities is raising morale in a department that has come under heavy criticism for its handling of the worst wildfire in city history, which killed 12 people and destroyed thousands of homes.

In the days after the Jan. 7 Palisades fire, The Times reported that LAFD decided not to pre-deploy any engines or firefighters to the Palisades — as they had done in the past — despite being warned that some of the most dangerous winds in recent years were headed for the region.

An LAFD after-action report released last month described fire officials’ chaotic response, which included major staffing and communication issues.

Moore — who has the backing of the United Firefighters of Los Angeles City, the union that represents firefighters — said his other priorities include better preparation for major disasters, with a focus on pre-deployment and staffing, as well as for the 2026 World Cup and the 2028 Olympics.

“I’ve got skin in the game,” he said, adding that his son is an LAFD firefighter. “We need to address the amount of calls they’re going on, and make sure that they’re going on the right calls with the right resources, and if that means us having to change our department model, so be it. I have the courage to do that.”

He also said he wants to expand the LAFD’s technological capabilities and better deploy the equipment it already has, like the thermal imaging cameras and heat-detecting drones that officials did not deploy during the Lachman fire mop-up.

“We are now requiring them to be used, and we’re not picking up any type of hose until we know that we’ve been able to identify through the use of the drone, thermal imaging cameras to ensure that those surface hot spots are all taken care of,” he said.

“I wish it didn’t take this for us to have to learn the lesson about using the tools we already have,” Councilmember Traci Park replied.

Park grilled Moore on reporting by The Times that firefighters warned a battalion chief about the Lachman fire not being fully extinguished.

“We know now that our own firefighters on the ground were offering warnings that it was still too hot, that it was still too smoldering,” Park said. “For Palisades residents and Angelenos across the city who have questions and concerns, what would you say to them at this point?”

Moore referred back to independent investigation he plans to launch.

“I want to know why it happened, how it happened, and take the necessary steps to ensure that never happens again,” he said.

The Times reviewed text messages among firefighters and a third party that indicated crews had expressed concerns that the Lachman fire would reignite if left unprotected. The exchanges occurred in the weeks and months after the Palisades fire.

In one text message, a firefighter who was at the Lachman scene Jan. 2 wrote that the battalion chief in charge had been told it was a “bad idea” to leave because of visible signs of smoldering terrain, which crews feared could start a new fire.

A second firefighter was told that tree stumps were still hot at the location when the crew packed up and left, according to the texts. And another said in texts last month that crew members were upset when directed to leave the scene, but that they could not ignore orders.

The firefighters’ accounts line up with a video recorded by a hiker above Skull Rock Trailhead late in the morning on Jan. 2 — almost 36 hours after the Lachman fire started — that shows smoke rising from the dirt. “It’s still smoldering,” the hiker says from behind the camera.

A federal grand jury subpoena was served on the LAFD for firefighters’ communications, including text messages, about smoke or hot spots in the area of the Lachman fire, according to an LAFD memo. It is unclear if the subpoena is directly related to the arson case against Jonathan Rinderknecht, who is accused of setting the Jan. 1 fire and has pleaded not guilty.

Complaints that the city and state failed to properly prepare for and respond to the Palisades fire are the subject of numerous lawsuits and a Republican-led inquiry by a U.S. Senate committee.

In addition to the pre-deployment issue, the LAFD’s after-action report found other problems during the Jan. 7 fire fight. The initial dispatch called for only seven engine companies, when the weather conditions required 27. Confusion over which radio channel to use hampered communication. At one point in the first hour, three L.A. County engines showed up requesting an assignment, and received no reply. Another four LAFD engines assembled, but waited 20 minutes without an assignment. In the early afternoon that day, the staging area — where engines were checking in — was overrun by fire.

Moore said he is closely evaluating the 42 recommendations in the report to make sure they are properly implemented.

Bass announced Moore’s selection last month after conducting a nationwide search that included interviews with fire chiefs of other cities. She had ousted Kristen Crowley, who was chief during the Palisades fire, citing deployment decisions ahead of the extreme weather, and appointed interim Fire Chief Ronnie Villanueva in February.

Moore — who said he grew up in the Mar Vista and Venice area — joined the LAFD as a firefighter in 1995, working his way up the ranks in various assignments throughout the city, including supervising arson investigations and serving as a spokesperson for the agency, according to his resume. He most recently was deputy chief of Operations Valley Bureau, directing the response to emergencies across 39 fire stations.

For months, as victims pleaded for information, the Los Angeles Fire Department kept secret that its firefighters were ordered to stop mop-up operations on a small brushfire that continued to smolder and reignited days later into the massive Palisades fire.

At least one department official learned that a battalion chief had directed the firefighters to pack up their hoses and leave the scene of the Lachman fire Jan. 2, even though they complained that the ground was still smoking in places and rocks remained hot to the touch, according to a source who was briefed on the matter in June.

But the department did not include that finding, or any detailed examination of the reignition, in its after-action report on the Jan. 7 Palisades fire — or otherwise make the information public — despite victims demanding answers for months about how the blaze started and whether more could have been done to prevent it.

The report, which was released last month and intended to identify shortcomings in the LAFD’s preparedness and response, only briefly mentioned the prior blaze, even though its role in starting the Palisades fire was clear to firefighters. According to the report, on the morning of Jan. 7, an LAFD captain called Fire Station 23 — one of two stations in Pacific Palisades — to say that the Lachman fire had started up again.

Despite this, LAFD officials were emphatic early on that the Lachman fire was fully extinguished.

“We won’t leave a fire that has any hot spots,” Kristin Crowley, the fire chief at the time, said at a community meeting Jan. 16, after the Palisades fire killed 12 people and destroyed thousands of homes.

“That fire was dead out,” Chief Deputy Joe Everett said at the same meeting, adding that he was out of town but communicating with the incident commander. “If it is determined that was the cause, it would be a phenomenon.”

The Times reported late last month that a battalion chief had ordered firefighters to leave the scene of the Lachman fire the day after it broke out, rather than stay and make sure there were no hidden embers that could ignite a new fire, according to firefighter text exchanges. Mario Garcia, the battalion chief listed as being on duty the day that firefighters were ordered to leave the Lachman fire, said in an email that he was unable to comment due to “the ongoing investigation.”

Interim Fire Chief Ronnie Villanueva declined to be interviewed or answer questions about when top LAFD officials learned of the firefighters’ complaints about leaving the scene. Mayor Karen Bass also declined an interview request and did not respond directly to a question about whether she was informed of the firefighters’ complaints before The Times report and, if so, when.

After The Times published the story on the texts, victims of the Palisades fire expressed outrage, while Bass directed Villanueva to launch an investigation into the matter. Critics of Bass’ administration have asked for an independent inquiry. A spokesperson said Thursday that Bass’ selection for permanent fire chief, Jaime Moore, will lead the investigation, not Villanueva. Moore’s appointment still must be confirmed by the L.A. City Council.

Meanwhile, a federal grand jury subpoena was served on the LAFD for firefighters’ communications, including text messages, about smoke or hot spots in the area of the Lachman fire, according to a memo distributed to firefighters last week.

The source, a high-ranking fire official who works for a different agency in the L.A. region, told The Times that another LAFD battalion chief, Nick Ferrari, informed him in June that the department had learned of the Lachman firefighters’ account of being ordered to leave the burn site. The official asked not to be identified by name or the agency he works for because of the sensitivity of the LAFD finding.

The Times reviewed written notes that the official made shortly after the conversation, documenting what Ferrari had said about the firefighters’ complaints.

Ferrari works in the department’s risk management section, according to his LAFD email profile. That section typically conducts internal reviews of incidents such as the Palisades fire for potential liability. He did not respond to interview requests and an emailed list of questions. It is not clear what, if anything, Ferrari did with the information he shared with the official about five months ago.

Federal investigators say the Lachman fire was deliberately set and had burned underground in a canyon root system until high winds rekindled it on Jan. 7. Last month, an investigation by the Bureau of Alcohol, Tobacco, Firearms and Explosives led to the arrest of former Pacific Palisades resident Jonathan Rinderknecht, who is accused of setting the Lachman fire shortly after midnight Jan. 1.

It is unclear from the internal LAFD memo whether the federal subpoena for firefighter texts is directly related to the case against Rinderknecht, who has pleaded not guilty.

In one text message reported last month in The Times, a firefighter who was at the Lachman scene Jan. 2 wrote that the battalion chief in charge had been told it was a “bad idea” to leave because of visible signs of smoldering terrain, which crews feared could start a new fire. “And the rest is history,” the firefighter wrote in recent weeks.

A second firefighter was told that tree stumps were still hot at the location when the crew packed up and left, according to the texts. And another firefighter said in texts last month that crew members were upset when directed to leave the scene, but that they could not ignore orders. That firefighter also wrote that he and his colleagues knew immediately that the Jan. 7 fire was a rekindle of the Jan. 1 blaze.

The firefighters’ accounts line up with a video recorded by a hiker above Skull Rock Trailhead about 11:30 a.m. Jan. 2 — almost 36 hours after the Lachman fire started — that shows smoke rising from the dirt. “It’s still smoldering,” the hiker says from behind the camera.

The LAFD previously said that officials did everything they could to ensure the Lachman fire was out.

In an interview with The Times last month, Villanueva — who came out of retirement to head the department in February, after Bass removed Crowley from the position — said that firefighters remained in the Lachman fire burn area for more than 36 hours and “cold-trailed” it, meaning they used their hands to feel for heat, dug out hot spots and chopped a line around the perimeter of the fire to ensure it was contained.

He said firefighters returned Jan. 3 for another round of cold-trailing after a report of smoke in the area, though the LAFD did not provide records that corroborated those actions.

Those documents are readily available for release, but the LAFD has required The Times to pursue them through an often lengthy process under the California Public Records Act. Bass’ office declined to order the LAFD to provide the records to the paper.

The Times in recent years has filed three lawsuits against the city for its failure to release documents under the records act. Two of the lawsuits involved alleged misconduct by LAFD employees, including accusations that a chief deputy appeared to be intoxicated while the department was battling a 2021 fire in the Palisades.

The now-retired chief deputy said he was off-duty at the time and did nothing wrong. The department took no action against him. A judge ordered the city to release the records in the case and pay The Times’ legal fees.

In the second case involving alleged misconduct, the city agreed to settle by producing the records and reimbursing the paper’s legal costs. In the third lawsuit, which is pending, The Times contends that the city has unlawfully deleted Bass’ text messages related to the Palisades fire.

Pringle is a former Times staff writer.

A federal grand jury subpoena has been served on the Los Angeles Fire Department for firefighters’ text messages and other communications about smoke or hot spots in the area of the Jan. 1 Lachman brushfire, which reignited six days later into the massive Palisades fire, according to an internal department memo.

The Times reported last week that a battalion chief ordered firefighters to pack up their hoses and leave the burn area the day after the Lachman fire, even though they complained that the ground was still smoldering and rocks were hot to the touch. In the memo, the department notified its employees of the subpoena, which it said was issued by the U.S. attorney’s office in Los Angeles.

“The subpoena seeks any and all communications, including text messages, related to reports of fire, smoke, or hotspots received between” 10 p.m. on New Year’s Eve and 10 a.m. on Jan. 7, said the memo, which was dated Tuesday.

A spokesperson with the U.S. attorney’s office declined to confirm that a subpoena was issued and otherwise did not comment. The memo did not include a copy of the subpoena.

The memo said the subpoena was issued in connection with an “ongoing criminal investigation” conducted by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

Last month, an ATF investigation led to the arrest of former Pacific Palisades resident Jonathan Rinderknecht, who was charged with deliberately setting the Jan. 1 fire shortly after midnight near a trailhead.

It is unclear from the memo whether the subpoena is directly related to the case against Rinderknecht, who has pleaded not guilty.

During the Rinderknecht investigation, ATF agents concluded that the fire smoldered and burned for days underground “within the root structure of dense vegetation,” until heavy winds caused it to spark the Palisades inferno, according to an affidavit attached to the criminal complaint against Rinderknecht.

The Palisades fire, the most destructive in the city’s history, killed 12 people and destroyed thousands of homes, businesses and other structures.

Last week, The Times cited text messages among firefighters in reporting that crews mopping up the Lachman fire had warned the battalion chief that remnants of the blaze were still smoldering.

The battalion chief listed as being on duty the day firefighters were ordered to leave the Lachman fire, Mario Garcia, has not responded to requests for comment.

In one text message, a firefighter who was at the scene on Jan. 2 wrote that the battalion chief had been told it was a “bad idea” to leave because of the visible signs of smoking terrain, which crews feared could start a new fire if left unprotected.

“And the rest is history,” the firefighter wrote in recent weeks.

A second firefighter was told that tree stumps were still hot at the location when the crew packed up and left, according to the texts. And a third firefighter said this month that crew members were upset when told to pack up and leave but that they could not ignore orders, according to the texts. The third firefighter also wrote that he and his colleagues knew immediately that the Palisades fire was a rekindle of the Jan. 1 blaze.

The Fire Department has not answered questions about the firefighter accounts in the text messages but has previously said that officials did everything they could to ensure that the Lachman fire was fully extinguished. The department has not provided dispatch records of all firefighting and mop-up activity before Jan. 7.

After The Times published the story, Mayor Karen Bass directed interim Fire Chief Ronnie Villanueva to launch an investigation into the matter, while critics of her administration have asked for an independent inquiry.

MIAMI BEACH — South Florida is seeing a wave of new cars, but they won’t add to traffic or lengthen anyone’s commute. That’s because the cars are made of marine-grade concrete and were installed underwater.

Over several days late last month, crews lowered 22 life-size cars into the ocean, several hundred feet off South Beach. The project was organized by a group that pioneers underwater sculpture parks as a way to create human-made coral reefs.

“Concrete Coral,” commissioned by the nonprofit REEFLINE, will soon be seeded with 2,200 native corals that have been grown in a nearby Miami lab. The project is partially funded by a $5-million bond from the city of Miami Beach. The group is also trying to raise $40 million to extend the potentially 11-phase project along an underwater corridor just off the city’s 7-mile-long coastline.

“I think we are making history here,” Ximena Caminos, the group’s founder, said. “It’s one of a kind, it’s a pioneering, underwater reef that’s teaming up with science, teaming up with art.”

She conceived the overall plan with architect Shohei Shigematsu, and the artist Leandro Erlich designed the car sculptures for the first phase.

Colin Foord, who runs REEFLINE’s Miami coral lab, said they’ll soon start the planting process and create a forest of soft corals over the car sculptures, which will serve as a habitat teeming with marine life.

“I think it really lends to the depth of the artistic message itself of having a traffic jam of cars underwater,” Foord said. “So nature’s gonna take back over, and we’re helping by growing the soft corals.”

Foord said he’s confident the native gorgonian corals will thrive because they were grown from survivors of the 2023 bleaching event, during which a marine heat wave killed massive amounts of Florida corals.

Plans for future deployments include Petroc Sesti’s “Heart of Okeanos,” modeled after a giant blue whale heart, and Carlos Betancourt and Alberto Latorre’s “The Miami Reef Star,” a group of starfish shapes arranged in a larger star pattern.

“What that’s going to do is accelerate the formation of a coral reef ecosystem,” Foord said. “It’s going to attract a lot more life and add biodiversity and really kind of push the envelope of artificial reef-building here in Florida.”

Besides the project being a testing ground for new coral transplantation and hybrid reef design and development, Miami Beach Mayor Steven Meiner expects it to generate local jobs with ecotourism experiences such as snorkeling, diving, kayaking and paddleboard tours.

The reefs will be located about 20 feet below the surface of the water and about 800 feet from the shore.

“Miami Beach is a global model for so many different issues, and now we’re doing it for REEFLINE,” Meiner said during a beachside ceremony last month. “I’m so proud to be working together with the private market to make sure that this continues right here in Miami Beach to be the blueprint for other cities to utilize.”

The nonprofit also offers community education programs, where volunteers can plant corals alongside scientists, and a floating marine learning center, where participants can gain firsthand experience in coral conservation every month.

Caminos, the group’s founder, acknowledges that the installation won’t fix all of the problems — which are as big as climate change and sea level rise — but she said it can serve as a catalyst for dialogue about the value of coastal ecosystems.

“We can show how creatively, collaboratively and interdisciplinarily we can all tackle a man-made problem with man-made solutions,” Caminos said.

Fischer writes for the Associated Press. Associated Press videojournalist Cody Jackson contributed to this report.