As we first reported on power lunch yesterday, the engineer pioneer died in a car crash in oklahoma yesterday, less than 24 hours after he was indicted on charges of conspireing to rig the price of oil and gas leases. Reuters now reporting the private equity fund emg halted new deals with mcclendon just before his death. Bethany mcclean is a contributing editor at vanity fair and cnbc contributor. We knew aubrey was scheduled to be in court later on that day. And now this. What have you found . Well, this is clearly a guy who was under siege from a lot of quarters and im connecting multiple dots, but you have obviously the indictment by the u. S. Government, and having the weight of the u. S. Government brute force come down on you is not an easy thing to live with. Thats been an investigation ongoing for the last four years. He was clearly starting to have a lot of trouble raising money and keeping his empire together. He tried to raise 2 billion in an ipo for American Energy partners, that fell apart. And energy and minerals group, which is the big Energy Private equity firm run by john raymond, lee raymonds son was pulling back undoing recent deals with him and in the wake of the indictment said they werent doing any deals. A source told me yesterday and reuters has the actual copy of the letter. This is a guy that was under an unordinate amount of pressure. Your source tell you why they didnt want to do business with aubrey . Well, it is in the letter. I think theyre worried look, the guy just got indicted by the government and even if you think somebody is innocent when somebody has been indicted, youve got to be pretty careful about doing business with them, right . But according to the letter, reuters had, they were deeply worried about this being the fracking industry has been a wild west land and i think theyre worried about this being the tip of the iceberg in terms of the government taking a more active role on whats gone on in the energy industry. What if anything do we know about his personal financial situation . Apart from his corporate situation, was he in any kind of personal money distress that we know of . Really hard to be sure. But it sure seems like it. He had pledged his personal stake in the oklahoma thunder Basketball Team as collateral for a loan. He had a 400 million loan from Goldman Sachs that was a personal loan that i think the bank had syndicated out to other investors, so im not implying theyre on the hook for it. So unless he had a stash of money somewhere that nobody knows about, it sure seems like per his personality, right, he was going all out. This is a guy who always took an an inordinate amount of risk in search of his goals and took risk with his own money and his companys money. Go ahead. Bethany, you wrote four years ago could Chesapeake Energy be the next enron . Thats when Aubrey Mcclendon was running Chesapeake Energy. What more can you tell us about the way that he approaches business and his personal life from a money perspective that might provide us some insight into the man . Well, hes just an enormous risk taker and that was true of the way he built chesapeake. It was interesting, i was listening to you read john arnolds letter and a lot of praise showering down on mcclendon now as is appropriate, but he had aspects that bordered on being a con man and crazy risk taker, as might be true of all great entrepreneurs, right, but he was willing to skirt the fine lines of truth and how he ran chesapeake in terms of trying to enrich himself and taking out a huge loan from the company, he had to sell most of his stake in chesapeake to meet margin loans when the energy when the economy went into shock in 2008. This is clearly a guy who lived on the edge. Both in terms of how he ran his business and how he ran his own money. If we get back to the original news new thing we think we know today, which is about emg, this other private equity firm, which he did an enormous amount of business with, and them telling him yesterday that this is it, were not going to do future deals with you, i mean, this could have been the straw that broke the camels back on top of everything else, right . And to just so people know, there is a bunch of companies that are going to come public, right, that were a product of this relationship between Aubrey Mcclendon and emg, right . There will be legacy cop legac from that relationship . I guess the survival of those Legacy Companies is going to be somewhat dependent on the future of the fracking industry in this country, which remains to be seen. Though i think there will be a future, a future of those companies are somewhat determined by that. But i mean aubrey is going to leave a huge, huge legacy. But i cant imagine the pressure of having all of this come down on you all at once. Clearly a guy who was under a great deal of stress. Bethany, what is your take on what the next steps are in the governments case that was against Aubrey Mcclendon . Well, look, it is a really weird case because in some ways the story that started this was another reuters story, 2012 story, about rigging in michigan. The government didnt end up charging michigan even though the reuters story was compelling evidence. They did charge oklahoma. But normally if the government charges a conspiracy case, they charge all parties to the conspiracy, right . And in this case they only charged aubrey, they didnt charge the allegedly the other side of it is tom ward who is aubreys former partner at chesapeake and then was the ceo of sandridge, but hes not been charged. Sandridge hasnt been charged. The indictment itself is odd, and aubrey obviously before his car crashed had put out a long statement protesting his innocence. The sources that youve been speaking with probably knew of him. Look, you look at the circumstances of how he died, there has been intense speculation as to whether or not it was suicide. Any of the people you talk to speculating as to whether or not Aubrey Mcclendon was the kind of person who would or would not commit suicide . I havent heard any i heard the same speculation you have. But i dont know if ill ever know the answer to that. All right. Bethany, thank you. A lot of speculation here that he wasnt wearing a seat belt. Wasnt wearing a seat belt, the Police Department said there was no evident effort to avoid the abutment, the bridge abutment to slow down. Could have had a medical problem. Could have. A lot of things still need to be discovered. Bethany, thank you so much for joining us. All righty. Thank you, bethany. Why the fed will raise rates more than the market expects. Pimco head of global credit will make the case. And tell us how Bond Investors need to position themselves. Thats coming next. Youre watching cnbc, first in business, worldwide, and we are waiting for the republican president ial candidate donald trump to, among other things, respond to mitt romneys scathing speech about him just about an hour or so ago. Trump set to speak at a rally in portland, maine. Minutes from now. And well bring it to you live. We need to be ready for whatever weather may come our way. My names Scott Strenfel and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Im seema mody with a market check. Healthcare facilities standing out as one of the best performing industry groups. Shares of tenet healthcare, community health, universal health and hca all trading higher. And this despite the s p healthcare sector underperforming the broader market, falling at nearly 1 . Again, a bit of a standout in todays market. Seema, thank you very much. Well, overall, your investments appear to be at a bit of an inflexion point right now, considering this for the First Six Months of the year stocks tumbled and bonds soared. The past two weeks or so, we achieved a measure of calm as price movements slowed and people have time to reevaluate. Let us take this time to get a measured view of where we may be headed. Mark keisel of pimco joining us now. Were going to get to your views on markets and where to invest in a second. Given everything going on, when you go into your investment meetings, how much do politics and the presidency play in any strategy perspective . Well, i think it matters, brian, and i think there is a lot of uncertainty now with what is happening with clinton and trump and who the republican nominee will be. I think this will play out over time. And right now what were focused on is a big opportunity in the credit markets where we see equity returns with a lot less volatility than equities. We think given the risks, given the political risk, we think that actually bonds and Corporate Bonds are the best place to be today. In any scenario, you dont say, well, if clinton is the nominee or wins by this or if trump is the nominee or wins by that, you think bonds overall are the better place to be in the corporate side . We do. There will be winners and losers depending on whether it is a democrat or a republican. But the reason why bonds are so attractive today, brian, is that 75 of the Government Bond market in japan and germany are offering negative yields and equities we think have significant head winds with Global Growth and the dollar, but credit is offering 4 to 8 returns in this world of very low rates on one hand and very risky returns on the other. So credit is the sweet spot for investors today. What kind of quality do you have to get to do get 4 to 8 returns . Junk or can i stay in decent quality corporates . So, michelle, thats the interesting thing because you can basically build a portfolio today, which is roughly 50 50 between Investment Grade and high yield and you dont even have to buy triple cs or single bs, you can buy companies that are double b rated that we think are trending up to Investment Grade that have the potential to deliver 8 to 10 returns. The fact is is that there is a huge disconnect now between economic fundamentals and Company Fundamentals and what the markets are pricing in. That creates a huge opportunity. There are Numerous Companies out there focused on the consumer, focused on housing, focused on health care. These companies are actually improving so there is a huge opportunity right now, the market is pricing in 8 defaults. Thats not going to happen in our opinion. So im curious, you know, the equity markets, we have seen in the past month, we have seen a lot of these being down sectors, materials for one, energy for another, really rebound. The sectors that have led us higher at this point, at what point in your view would there be an opportunity in investing and energy or materials credits within high yield . At some point that could make a great trade. Sure. And actually we have been underweight energy, metals and mining in a lot of these companies for years. We just started to, what i call, dip our toe about two or three months ago in this sector and the reason is that we see, number one, oil prices bottoming and were building a support base there. Number two, most importantly for bond holders is companies have raised 6 to 7 billion of equity into this market. So basically what has happened is the commodity price environment has forced Companies Management to have to act more bond holder friendly. Theyre diluting shareholders and theyre building equity base below the bond holder, thats a very positive sign. And thats why for the first time in years we have started to add in that sector. Be as specific as you like here, mark. I think i heard you say sort of 8 to 10 returns in some corporates are possible. In what sectors do you find those 8 to 10 returns or in which companies . Give me an example of one of your holdings you feel good about. Im not telling you to show me your buy list but something you own now. Sure, anything in housing, building materials. That company is organically deleveraging more than one turn of leverage a year. This company is going to be under four times levered in the next six months. So the companys fundamentals are significantly improving, and yet youre buying the bonds way below par at a yield close to 10 . That makes no sense. So the reality is is that there is tons of opportunities out there if you have the bottom up research to find the gems. And thats where the double digit returns are in the bond market today. 10 yields. Love it. I was going to ask you the same question, but energy. Any names youre willing to tell us that what kind of yield did you get in there . How deep into the messy territory are you willing to go . Again, we started several months ago when the prices were near bottom. We were basically buying Investment Grade companies at 7, 8, 9 yield. Those companies subsequently issued equity to protect the bond holder and now those bonds are up anywhere from 5 to 10 points. So we did get what i call fortunate in terms of our timing. I will tell you, at these prices today, we are being less aggressive in energy because there has been a significant runup. I do think today the opportunity is tied to the consumer in housing, in building materials, and in health care. I was going to ask you, you had been bullish on housing and mortgages and just mentioned a Building Company or remodeling company. Are you still overall macro bullish on the u. S. Housing market . Yes, brian, were very bullish. I just met with jamie diamond a few days ago. You buried the lead. What did you talk about in. We share he and i share optimism on the u. S. Economy. The u. S. Economy is 70 the consumer. You have real wage growth. Real wage growth of 3. 5 . Job growth of 2. Youve got 2. 5 million jobs added. The banks are relatively healthy. Jpmorgan looks great. And the reality is is that consumers have built their savings. Consumer is as strong as its been in 15 years. Thats the diskeconnect. Mark keisel of pimco, thank you for your insight. Moodys cutting its outlook on china, get morgue negative. What is the Credit Agency seeing ahead and the person who leads moodys sovereign risk team will tell us in another look live at portland, maine, where president ial candidate donald trump is expected to take to the lectern any moment now. Well take his comments live as he presumably responds to a stern tongue lashing from mitt romney. Black and beedenim cofound he started a second business, a coffee bar, in the same tampa, florida storefront. Customers can now sip their joe and shop for clothes at the same time. For more, watch your business sunday mornings at 7 30 on msnbc. Our cosmetics line was a hit. The orders were rushing in. I could feel our deadlines racing towards us. We didnt need a loan. We needed shortterm funding fast. Building 18 homes in 4 ½ months . That was a leap. But i knew i could rely on American Express to help me buy those building materials. Amex helped me buy the inventory i needed. Our amex helped us fill the orders. Just like that. Another step on the journey. Will you be ready when growth presents itself . Realize your buying power at open. Com sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Welcome back to power lunch. Im michelle carusocabrera. Moodys odowngrading its outlook on china. Moodys sights reform and fiscal risks. With us is ann van praagh of moodys sovereign risk group. I want to get into the specifics of what you talked about within your note and changing your outlook. Normally i would never start on this question but today is unique. Donald trump is coming up soon. Hes talking about a trade war sometimes at some point with china and tariffs of 45 to stop their imports. At what point have you thought about whether you have to consider whether or not the election could impact chinas outlook . Yeah, for us right now thats not a major driver. The main drivers of our outlook change this week from stable to negative and affirming our double a three rating. First is china has significant rise in debt levels. It has direct debt levels that have risen about 10 Percentage Points of gdp over the last couple of years. And it also has a rise in what we call contingent liabilities, these are liabilities coming from other parts of the economy. So if system wide leverage in china is about 180 of gdp, sorry, 280 of gdp, the portion of that x ante we would expect is somewhere in the 50 to 70 percentage point range. Could i translate that. The federal government of china doesnt have all that much debt, however it is implicitly backed every state owned company, every local government, every municipal government and if and when all of those fail, at some point all of that ends up being supported by the federal government anyway, even though it is not officially theirs, and it is a huge what does it get them up to . You just said the total system leverage is 250 to 280 by most estimates. Of gdp. How does that compare with it is not unlike other major advanced economies that have like . That have seen leverage in the u. S. And europe over the last decade. Isnt it more greecelike than u. S. Like . 280 gdp . Chinas direct debt, the debt we count at the federal level, and the local government level are much smaller. It is about 40 of gdp. So much more manageable amount for the government to handle in terms of repaying from its revenues and expenditures, you know. It doesnt run a large deficit. A lot of the parts of the economy are doing fine, theyre healthy. The parts of the economy that we see were at risk are certain corporates, certain parts of the Public Policy banks. And certain local government off Balance Sheet financing vehicles that have generated more debt in re