That’s what a law maker said today at the BP hearing. Anyone agree or disagree with this?
More like a taser to the gonads and watch theft. But if the 20B is a shake down, then the oil spill is shitting in Uncle Sam’s mouth.
as with all politicans take everything with a grain of salt. he has accepted lots of money from big oil and is just pulling for his boyzzz http://www.businessinsider.com/republican-who-accused-obama-of-bp-shakedown-got-15-million-from-big-oil-2010-6
BP did horrible things, by mistake or by reckless actions. They are a-holes, blah, blah, blah. That said, where is the due process? If BO got $20 billion from BP today, what prevents him from getting $xxxxxxxxxxxxx from others tomorrow.
I don’t think the $20b is a shakedown, but the $100m fund to help “the little guy” totally is. Let’s see. 1. BP blows up oil rig 2. US govt says no more off shore drilling 3. US govt tells BP that because they banned offshore drilling, BP must contribute to a fund to help those displaced by it’s ban on offshore drilling srsly?
Fair point. The bottom line is 1) whether the government policy/action should adhere to the rule of law? Or 2) should they follow what please the public, usually for short term political gain, but long-term economic loss.
Why did BP spike up after the announcement? They jumped from the high $20’s to over $31. Is the $20B a cap on punitive damages?
This is akin to “settling” out of court, I suppose.
bchadwick Wrote: ------------------------------------------------------- > This is akin to “settling” out of court, I > suppose. It is a STEAL if their total liability is maxed at $20B.
joemontana Wrote: ------------------------------------------------------- > It is a STEAL if their total liability is maxed at > $20B. If false…
I think we read it like a bank increasing it’s loan loss provisions in the face of bad news. The big question is “did they reserve enough for their losses.” However, this has a public relations aspect to it as well, which is slightly tipped in BP’s favor. They can say “but we already dedicated $20B to this, and the government wants $5B more… we’ve done what’s right, now they’re milking us.” This may be true or it may be untrue, but it will probably play to BP’s favor, unless some dramatically horrific environmental damage appears in the newspapers between now and then.
The $20b was never a cap. Whatever news source you read that at should be outed for shoddy (at best) journalism
Then why did their price jump? I didn’t see anything about a liability cap. I just saw a $2 price increase after the $20B liability announcement. Still can’t figure it out.
inefficient markets…? overreaction?
joemontana Wrote: ------------------------------------------------------- > Then why did their price jump? I didn’t see > anything about a liability cap. I just saw a $2 > price increase after the $20B liability > announcement. Still can’t figure it out. Among others, two main reasons: 1) The market expected even worse, etc. 2) At $20 billion or whatever the price, it takes some of the uncertainty premium away. Back to my topic, shaking BP down for $20 billion seems crowd pleasing now, but it damages US reputation of law abiding country to do business over the long haul. Anyone disagree?
CPierce Wrote: ------------------------------------------------------- > inefficient markets…? overreaction? That’s my guess. I went long a couple Jan 2012 calls at $50 for the hell of it.
Alphaseeker – I am not disagreeing with you, but… Yesterday only established a FLOOR for the liability. The worst case scenario remains unchanged. Could this be the perfect example of a bias we read about in LIII? I forget the term but it relates to how people cling to any data point in the face of uncertainty. The liability range has changed from $XB - $XXXB to $20B-$XXXB. Now people feel more confident just because a data point has been thrown in?
I’ll go with frame dependence or representativeness for the win. Also, the $20B isn’t necessarily a floor, it’s just an escrow account. If damages don’t amount to $20B the money goes back to BP. But, it’s probably just semantics at this point anyway. The $20B will be spent.
Reading comprehension guys, come on. It is neither a floor nor a ceiling. It’s an escrow account. If the money is not used up (perhaps a big if but not a certainty either), it is returned to BP.
I think shakedown is a little extreme. Presumably, the situation is that B.O. says “look, SOMEONE needs to *look* like they’re doing somehting. Now you can be the one that does something that looks like it’s on the order of magnitude of the disaster, or *we* have to do it.” What’s it going to be. Calling it a “shakedown” presumes that BP had no obligations to do something. It’s a bit like saying, “pay for my operation, or I’m suing yo’ azz,” except that that getting sued has extra headline risk for the company. A true shakedown is “give me some money,” or I’m going to do something nasty to you, when there is no reason for someone to come up with money in the first place.