The $100m fund to support people that have been affected by the offshore drilling ban is CLEARLY a shakedown. I fail to see it any other way.
Sweep the Leg Wrote: ------------------------------------------------------- > CPierce Wrote: > -------------------------------------------------- > ----- > > inefficient markets…? overreaction? > > That’s my guess. I went long a couple Jan 2012 > calls at $50 for the hell of it. I’m long $32.50 calls for Jan12. I was thinking about the $50 calls, but thought that the stock would have to rise quite a bit before I’d be even in the money (not even talking profit) First time I’d bought calls - have traditionally done covered calls only. Ventured into buying puts earlier this year, and now doing naked calls.
CPierce Wrote: ------------------------------------------------------- > The $100m fund to support people that have been > affected by the offshore drilling ban is CLEARLY a > shakedown. I fail to see it any other way. Those tricky gubmint types really have BP over a barrel, shaking down poor helpless BP for a whole 50bps of their relief fund. “You pay up… or I’m gonna sic the iBanks on you! They’ll be making spreads on you so wide you’ll be begging for us to come back like we waz yo’ momma.” $100m, huh. That certainly won’t cover the loss in real estate value for beachfront property that’s now all tarred up. And probably won’t cover more than about 5 minutes of prime time “I’m so sorry, sorta” advertisements. I’d say BP got a deal if the can persuade the public that $100m is enough not to take those guys to court and have it hashed out that way. It’s $100m of hush money, basically.
These many question (or shall I say verbal lashing) sessions by the house committees on this BP issue and the financial crisis have really help me see the elected members of the US government in a new and somewhat interesting light.
CPierce Wrote: ------------------------------------------------------- > The $100m fund to support people that have been > affected by the offshore drilling ban is CLEARLY a > shakedown. I fail to see it any other way. Well BP was obviously cutting corners in their drilling practices leading up to the spill. Now, thanks to them we have to take a look at all of the deep water wells to ensure nobody else doing the same. Would it be prudent to do otherwise? So, yes, BP should pay. They should not only pay for the wages of the workers, but they should also pay for the lost revenue of all of the other companies during the moratorium (assuming of course they were following the proper procedures for drilling). While we’re at it they should pay for the lost rev that the gov’t should’ve received during this time period. People love to talk about free markets except when it impacts their constituency. BP should have to pay for lost tourism in US and Mexico, lost wages for all that use and work in the gulf, lost property value for all of those that live in the area, and the countless other externalities that their action caused. This of course is significantly higher than 20 billion. I wonder who will pay the difference in lost revenue in Florida beach towns in 2014?
I heard BP was responsible for the real estate crash as well.
This is hardly a shakedown. This is just prudent planning. If BP likes to cut corners on drilling, why wouldnt they cut corners on paying out what is owed. BP has the pockets to drag cases through court for years, even decades. Shrimpie McJoe does not. And if he cant get his income in a prompt manner, he’s done for. Take a look at how long Exxon dragged the various claims/damages through the legal system. This escrow plan is an extremely smart idea.
libor.plus1 Wrote: ------------------------------------------------------- > This escrow plan is an extremely smart idea. Few people like BP. But what’s the legal basis for this $20 billion in escrow account? BO, in trying to prop up his own rating, threw the due process out of the window?
What about Transocean & Halliburton in all this? Are they in the firing line? Should be.
Due process implies uncertainty of guilt. I dont even know why anyone is using that as an argument. BP has admitted and taken responsibility for the mess. This is just a matter of how much they are willing to pay and what they are willing to offer the government. BP doesnt have to do any of this, but nor does a guilty criminal have to cooperate with the state… its just in their best interest to do so.
If BO can shakedown BP for $20 billion this time, next time a plane crashes, accident or operator’s error, who’s to prevent him from shaking down billions from the airlines? Slippery slope… Vote him out in 2012… What say you?
I guess it has to do with how large an ecosystem has been destroyed and the profitability of putting the public at risk for private gain.
MacroMan’s blog has an interesting perspective on the situation: “Now, aside from any fundamental considerations of financial analysis, the fact that the $20bn fund is payable over 3 years, etc etc, ask yourself this: what is BP worth to a US politician dead versus alive? The answer: not that much. If the firm was put in liquidation, payment of claims would come to a standstill as these claims would not be considered normal business operations that need to be funded. Assets could not be sold unless they were “clean” and then only at bargain basement prices. Similarly, the UK and foreign subsidiaries would go into total lockdown as they go through a bankruptcy that looks more like Chapter 7: administrators in, very little cash out. Fishermen from Alabama would join the back of the line with other senior creditors. Compare that to keeping the firm alive, paying out claims as they are filed as opposed to validated by a court of law and thus keeping the general public (and the Democrats’ election prospects) happy.”
It’s amazing how due process gets thrown out the window when there is moral indignation.
AlphaSeeker Wrote: ------------------------------------------------------- > If BO can shakedown BP for $20 billion this time, > next time a plane crashes, accident or operator’s > error, who’s to prevent him from shaking down > billions from the airlines? > > Slippery slope… Is this seriously your best attempt at an analogous situation? There’s no threat to the due process of law here. BP is setting up this fund on their own. Now, obviously Obama “strongly suggested” they do it, but no one’s even remotely suggesting there’s been a violation of law. Frankly, it looks like Obama threw out a bid and BP hit it. The Republican and Democrat ideologies are generally at odds, so the fact that they oppose pretty much everything Obama does isn’t all that surprising. However, the people who are coming out against this are doing us all a favor by showing us who the true loons are. I knew Bachmann and AlphaSeeker were already, but I appreciate Barton raising the flag for me.
^^ Naked, in your own words - “…Now, obviously Obama “strongly suggested” they do it…” This is a classic defination of shakedown by politicans, people with power… BO is trying to save this own political viability by robbing a public company, which is 40% owned by average Joe American sharehoders, directly or indirectly.
NakedPuts Wrote: ------------------------------------------------------- > There’s no threat to the due process of law here. > BP is setting up this fund on their own. Now, > obviously Obama “strongly suggested” they do it, Please tell me you’re joking. Basically on day 1 BO told the American people that BP’s at fault and they’re going to pay. While it seems clear they did wrong, what level of wrong is it? Criminal negligence? And if so what level of criminal negligence? Was it some low-level manager that did something wrong? How far up BP did the negligence go… did it stop at Fabrice or go all the way to the top? It’s a matter of due process, no matter how completely ridiculously negligent BP might be or ends up being. Let me put this in terms that maybe you can understand. An analogous “strong suggestion” was that there were WMD in Iraq. There are multiple levels of WMDs, apparently. We all know how that turned out. This has nothing to do with D vs R. It’s a matter of politics, and a President that is trying to return to popularity.
AS, your wingnuttery and lunacy have been well established, and I don’t feel a need to respond. Justin makes some decent points, but I have no idea what "Let me put this in terms that maybe you can understand. An analogous “strong suggestion” was that there were WMD in Iraq. There are multiple levels of WMDs, apparently. We all know how that turned out. " means, and I definitely don’t understand how that’s an analogous situation. Here’s how normal people reacted to it: http://news.yahoo.com/s/ap/20100617/ap_on_bi_ge/us_bp_s_future
NakedPuts Wrote: ------------------------------------------------------- > AS, your wingnuttery and lunacy have been well > established, and I don’t feel a need to respond. My posts and view will always be pro: small government, free market, lower taxes and let the seemingly chaotic but actually the most efficient capitalism work… If you have a problem with that, please just stay away from my posts. Nothing against you personally, it’s just your ideology. Sounds fair? Now back to the big picture, wise Americans are really building momentum to turn the tide against the extremely left, populist BO administration…
Sorry that I wasn’t clear. My point is that this is predominantly political theater, just like how invading Iraq wasn’t about WMDs (righting wrongs) but was politically motivated. Intelligent people should be able to see through the histrionics. Dragging a CEO, who’s going to be on trial imminently, in front of Congress to encourage “self”-incrimination, then deriding him on a personal level when he doesn’t self-incriminate is asinine. To top it off, moral outrage from a Congressman – the lowest of the low – is a sad joke.