BP Causing Economic & Environmental Disaster

[Ninong]

Goldman Sachs is a very large investment bank. Thanks to the Bush Administration's bank bailout of November 2008, they got even bigger. That's because the Bush Administration decided to allow Lehman Brothers to go under, increasing Goldman's share of the market. You might remember that the Bush Administration also forced Bank of America to take over the failing Merrill Lynch.

I like to point this out because to hear John McCain and most Republicans today you would think that it was Obama who bailed out Wall Street. John McCain, you might remember, famously suspended his campaign for president so that he could ride back to Washington on his white horse to rescue the banks. Both he and his sidekick, former half-governor of Alaska, Sarah Palin, supported the bank bailout. I did too and I still do but it galls me that the Republican party is now trying to distance itself from something they whole-heartedly supported at the time.

You might also remember that Treasury Secretary Hank Paulson decided to allow all of the investment banks to become bank holding companies so that he could provide the sort of financial assistance that the fed can only provide to true banks (bank holding companies) and not investment banks.

The new and improved Goldman Sachs is thriving and doing exactly what they have always done: trade for their own account. That's what investment banks do. They trade for their own account and for their clients. Goldman took that a step further onto the darkside by selling mortgage-backed securities to their clients while shorting those same securities for their own account. They even allowed a hedge fund manager to help them select the worst possible CDOs to include. They wanted to make sure that the fund they were shorting would be guaranteed to fail. It did. It failed miserably within a few months. So Goldman sold crap to their customers knowing it would tank and they themselves shorted it. They made more than $1 billion on that one little deal alone. And their customers lost $1 billion.

Getting back to the original point you were trying to make about Goldman selling 4.6 million shares of BP during the first quarter of 2010. That was spread out over the entire first quarter, January through March. Goldman is by far the largest institutional trader. During that same period Wells Fargo sold 2.6 million shares of BP and UBS sold 2.1 million shares. So Goldman's sales of BP stock were not out of line compared to Wells Fargo or UBS.

Is it possible that these banks had insider knowledge that BP might be having problems with Deepwater Horizon? Sure, anything's possible but all of the banks have insider knowledge about a lot of things all the time. The issues with the Deepwater Horizon rig didn't even surface inside the company until March. Even then, there was no reason for banks to become alarmed. It's much more likely that those trades were made based on technical data showing that crude oil was overdue for a correction.

Oil skyrocketed to $147/bbl back in July 2008 based on speculation that the Bush-Cheney Administration might actually take military action against Iran. Then it plunged all the way down to $32/bbl in December 2008. From January 2009 until December 2009, it rose steadily, without correction, to around $84/bbl. Then it pulled back to $70/bbl in January 2010. Following that January drop to $70/bbl, it rallied to $86/bbl in March/April 2010 before dropping to less than $71/bbl this past week. The banks sold oil stocks because they were expecting a correction. If the price falls below $60/bbl, they will all start accumulating oil company stock again. The correction in the price of crude oil was brought about mainly because of the problems with the euro. It's still unknown if countries like Greece, Portugal, Spain and even Italy, can survive in a one-currency system. They can't compete with the likes of Germany and they can't abide by the strict financial requirements of membership in the Euro Zone.

Please note that the price of crude oil actually fell by $20/bbl during the first three weeks of May, not long after the Deepwater Horizon blowout:


The article you linked was written by John Byrne. He started Raw Story a few years ago when he was only 21 or 22 years old. He sees conspiracies in everything. He's jumping to conclusions just for the sake of pushing his point of view -- something we all do, but just keep in mind that he does have an agenda. Also keep in mind that his life experience is extremely limited.

[TheMarineGuy]

Is it possible that these banks had insider knowledge that BP might be having problems with Deepwater Horizon?

That article was written by John Byrne. He started Raw Story a few years ago when he was only 21 or 22 years old. He sees conspiracies in everything. He's jumping to conclusions just for the sake of pushing his point of view. Something we all do but just keep in mind that he does have an agenda.

On the part that they had insider knowledge,would'nt that pretty much be the same case as martha stewart....Since she had prior knowledge too her stock crashing,and i mean come on if somebody could prove it who wouldnt want too see Tony "Baloney" doing some time in the feds....i know i would....But i also understand that yes people do always have some type of conspiracies in question,its human nature too wounder what if....but that why i bring it up....

[Ninong]

You have to prove insider trading. Martha Stewart knew better. After all, she's a former stock broker. Not only that, the amount of the trade was pennies compared to her then-net worth of more than $1 billion. Martha sold 4,000 shares of ImClone the day before it became public knowledge that ImClone's application had been denied by the FDA. Martha had once dated Sam Waksal, CEO of ImClone, and they were still good friends. It turned out that it was her broker who alerted her while she was at the airport enroute to a vacation, I believe in Mexico or someplace down that way. The feds didn't actually nail her on insider trading, they nailed her on lying about it to the FBI.

She messed up and the Bush Administration wanted to make an example of her just to show how tough they were. Too bad the SEC didn't catch the big fish like Bernie Madoff, who made off (pun intended) with more than $60 billion! In fact, the SEC did know about Bernie but they ignored all of the reports they received on him because he was the former head of NASDAQ.

Anyway, there was no insider trading involved in the sale of BP stock during the first quarter of this year. I'm just making the point that insiders know a hell of a lot more than the average 'civilian' investor. That has always been the case and it always will be.

The banks reduced their holdings in oil company stock because they were worried about an economic downturn resulting from the problems with the euro. Don't forget, the euro peaked around $1.60 not that long ago (I think it was sometime last year) and it's now around $1.20. It was only $0.83 when George W. Bush took office but he trashed the dollar during his eight-year reign.

[Ninong]

Encouraging News From BP

From Rupert Murdoch's Wall Street Journal:

BP PLC (BP, BP.LN) said Sunday that a containment cap placed on a ruptured well about a mile deep in the Gulf of Mexico collected 10,500 barrels of oil Saturday, adding the company hopes to increase the amount of oil funneled to the surface in the next few days.

"At the moment it is difficult to say, but we would expect it to be the majority, probably the vast majority of the oil," BP Chief Executive Tony Hayward said earlier in an interview on BBC. The amount of oil collected Saturday was up from the 6,077 barrels captured on Friday.

"We have a further containment system to implement in the course of this coming week which will be in place by next weekend. So when those two are in place we would very much hope to be containing the vast majority of the oil," Hayward said. Scientists led by the U.S. Geological Survey have estimated that 12,000 to 19,000 barrels of oil a day were gushing into the Gulf. There are 42 gallons in a barrel of oil.

In an update on its website, the company also said it flared off 22 million standard cubic feet of gas collected from the leak on Saturday.

[Ninong]

Latest News from BP:

Subsea operational update:

• On June 6, a total of 11,100 barrels of oil was collected and 22 million cubic feet of natural gas was flared.

• Optimization continues and improvement in oil collection is expected over the next few days.

P.S. -- That information was posted to their corporate website at 9:00 a.m. CDT, today, Monday, June 7.

[Ninong]

Latest News from BP:

Subsea operational update:

• On June 7th, approximately 14,800 barrels of oil were collected and 30.6 million cubic feet of natural gas flared.

• Total oil collected in the last four days is approximately 42,500 barrels.

• Operations during this period were stable.

• The next update will be provided at 5:30pm CDT on June 8, 2010.

Updated June 8 at 9:00am CDT / 3:00pm BST

P.S. -- Some interesting observations: 14,800 bbls/day is three times as much as the highest rate BP was willing to accept. 14,800 bbls/day x $4300/bbl x 50 days = More than $3 billion potential federal fine so far. And that will be just a drop in the bucket compared to what BP will be on the hook for if this incident is proven to be the result of criminal negligence, as I suspect. The economic damages will be in the tens of billions, and that's assuming the flow is reduced by 95% with the present procedure and the relief wells are successful before Labor Day.

[Ninong]

Would you want 0.50 ppm crude oil in your reef aquarium?

WASHINGTON (AP) - The government says water tests have confirmed underwater oil plumes as far as 142 miles from the BP oil spill, but that concentrations are "very low."

NOAA Administrator Jane Lubchenko said that the tests conducted at three sites by a University of South Florida research vessel confirmed oil as far as 3,300 feet below the surface 42 miles northeast of the well site and also below-surface oil 142 miles southeast.

Lubchenko said the analyses "indicate there is definitely oil sub surface. It's in very low concentrations" of 0.5 parts per million.

BP had questioned whether oil actually was forming below water.

P.S. -- How does this sound for your reef tank parameters?

Nitrate: 2.0 ppm
Nitrite: none detected
Phosphate: 0.03 ppm
Crude oil: 0.50 ppm

[Ninong]

BP's latest update:

On June 8th, a total of approximately 15,000 barrels of oil were collected and 29.4 million cubic feet of natural gas were flared.

I don't think they can process any more than 15,000 bbls per day with their present equipment. A lot of oil is still visible leaking from the well, so it's very obvious that the leak exceeds 15,000 bbls/day. I think they have a second ship due to arrive on site next week to increase their capacity.

[Ninong]

From BP's 2009 Gulf of Mexico Oil Spill Response Plan:

Professor Peter Lutz is listed in BP's 2009 response plan for a Gulf of Mexico oil spill as a national wildlife expert. He died in 2005.

Under the heading "sensitive biological resources," the plan lists marine mammals including walruses, sea otters, sea lions and seals. None lives anywhere near the Gulf.

The names and phone numbers of several Texas A&M University marine life specialists are wrong. So are the numbers for marine mammal stranding network offices in Louisiana and Florida, which are no longer in service.

BP PLC's 582-page regional spill plan for the Gulf, and its 52-page, site-specific plan for the Deepwater Horizon rig are riddled with omissions and glaring errors, according to an Associated Press analysis that details how BP officials have pretty much been making it up as they go along. The lengthy plans approved by the federal government last year before BP drilled its ill-fated well vastly understate the dangers posed by an uncontrolled leak and vastly overstate the company's preparedness to deal with one.

P.S. -- I forgot to mention that that plan was accepted by the MMS. It's obvious the MMS hasn't changed much since the Cheney-Bush years when their motto was "Drugs and Sex with Oil Execs." Those were the clowns who were literally in bed with the oil company lobbyists. And some of them did lines of coke at work with lobbyists. They were fired during the Bush years but it's obvious that MMS is still screwed up. Interior Secretary Ken Salazar fired the director of MMS a couple of weeks ago. Maybe it's time Obama fired Salazar, too?

[Ninong]

BP's Stock Plunging, BP's Bonds Are Trading As Junk!

BP's stock fell 15.8% today. It has fallen more than 50% since the Deepwater Horizon blowout on April 20. It now has a market cap of $91.44 billion. Credit Suisse estimates this disaster will end up costing BP $37 billion.



BP's bonds are trading as if they were junk. They're yielding 7.57 percentage points more than Treasuries. Junk bonds average 7.26 percentage points more than Treasuries. As recently as April 30, a full 10 days after the blowout, it cost $29,000 to protect $10 million of BP debt for one year. That same credit-default swap now costs $512,000.

The company is now trading far below the value of its reserves. In fact, their reserves are now valued less than half that of the other major oil companies. It is clear that the market expects BP to be hit with heavy, heavy punitive damages in addition to the costs of restitution.

Obviously the market is expecting charges of criminal negligence. That's the only way you can explain the $90 billion drop in BP's market value since April 20.

[Ninong]

BP Chairman Summoned to White House

Admiral Thad Allen has sent a letter to the chairman of BP requesting that he attend a meeting in the White House next Wednesday. I love the way the letter was worded. The letter requests the presence of Chairman Carl-Henric Svanberg and other "appropriate officials from BP" to discuss the company's response to the oil spill in the Gulf of Mexico. There is no mention at all of BP CEO Tony Hayward's name. Haha! That should piss off Tony "Baloney."

In the letter, Admiral Allen wrote that President Obama will participate in a portion of the session.

On two different TV news broadcasts this evening I heard that "Obama has asked for a meeting with BP Chairman Tony Hayward." Tony Hayward is not BP's chairman. And Obama did not request a meeting with him. Hayward will no doubt accompany BP's chairman of the board as one of the "appropriate company officials" who have been invited to meet with Admiral Allen and administration officials.

I wish they would allow TV cameras to be present when President Obama arrives to address the meeting.

The latest estimates from the scientists who are attempting to estimate the flow from the well now peg it at between 20,000 to 40,000 bbls per day. They're making those estimates based on an analysis of the video reluctantly released by BP as well as NOAA studies of the spreading surface oil.

BP is collecting approximately 16,000 bbls/day right now, which is the most they can process with present equipment on site, and the live video feed clearly shows a lot of oil flowing outside the temporary cap. They still haven't closed off the vents on that cap and I'm beginning to think that they're afraid that doing so will make matters worse.

They's still a lot of oil in the Gulf and that oil may end up on those pretty white Florida beaches. What if oil gets caught up in the loop current and ends up washing up on Miami Beach? What if tourists cancel their plans to vacation in Florida this summer? Can BP afford to pay for the losses caused to Florida's tourist industry? I doubt it. I don't even think they can afford to pay the long-term damages to Louisiana's seafood industry.

P.S. -- Several U.S. senators have sent a letter to BP CEO Tony "Baloney" Hayward asking him to suspend the company's dividend until after the full extent of the cleanup costs can be calculated. Hayward has refused to answer questions about the dividend over the past few days. As recently as a couple of weeks ago he said that there was no reason why the dividend would not be paid on schedule later this month, June 22nd to be exact.

Well, Friday, June 11th, BP's chairman Carl-Henric Svanberg responded to those inquiries as follows:

"Future decisions on the quarterly dividend will be made by the board, as they always have been, on the basis of the circumstances at the time."

[gregony]

I asked BP via email, if they had tried to actually stop the leak or if they were only trying solutions that would allow them to continue to tap the well. If you recall, they tried that dome, and said it didn't work because ice crystals caused it to clog. I would think clogging was a good thing. Other guys at work had the same question. They are all under the impression BP is only trying solutions that will enable it to continue to draw oil. I mean, how come they can't pull up one of those cement factory barges they use to make bridges and just form a cap out of concrete and dump it on top of the pipe stem? Am I an idiot? Did I miss their explanation why this couldn't be done?

[gregony]

Oh and in case you're wondering they never answered my email.

[Ninong]

BP has an absolutely horrible safety record compared to other oil companies. No other oil company even comes close to BP. They really don't care. All they're interested in is making money, not the safety of their employees or the welfare of the environment. I'm sure the investigation will conclude that BP's criminal negligence caused this disaster in the Gulf of Mexico. It's painfully obvious that fines haven't worked with this company. I think it's time some of these scumbags do some time behind bars.

BP's horrible safety record.

True to form, BP is now spending $50 million on their phony TV ads claiming they care, etc. Remember back in 2001 when they changed their name from British Petroleum to BP and came out with the new slogan, "Beyond Petroleum," and the eco-friendly looking sunflower logo? That was all marketing hype and an attempt to rebrand their image.

[Ninong]

Original BP estimate of the oil spill: 1,000 bbls/day.

Then, after NOAA looked at satellite photos of the surface oil, NOAA said it had to be at least 5,000 bbls/day and BP said, "Maybe."

Then, three weeks later BP finally released a single 30-second video clip of oil gushing forth from the undersea volcano of oil in the Gulf of Mexico and NOAA revised their estimate to 12,000-19,000 bbls/day but some independent scientists said it could be much higher.

Then NOAA revised their estimate to 20,000-40,000 bbls/day after studying the live HD video feed and BP said, "who's counting."

Now, today's New & Improved Estimate is: 35,000-60,000 bbls/day!

[Ninong]

Republican Congressman Apologizes to BP

Rep. Joe Barton (R-TX), the ranking Republican on the House Energy and Commerce Committee, apologized to BP CEO Tony Hayward today over the mean way he was treated by President Obama yesterday in the White House.

"I'm ashamed of what happened in the White House yesterday. I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown. In this case, a $20 billion shakedown."

Mr. Barton represents the Houston area, where most of the big oil companies are headquartered. His apology seemed to catch Tony Hayward by surprise.

Wow! All this time I thought it was the American people who suffered "a tragedy of the first proprotion."

P.S. -- GOP and Big Oil: A Love Story

[Ninong]

White House Responds to GOP Congressman's Remarks

"What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction. Congressman Barton may think that a fund to compensate these Americans is a 'tragedy', but most Americans know that the real tragedy is what the men and women of the Gulf Coast are going through right now. Members from both parties should repudiate his comments." -- White House Press Secretary Robert Gibbs

[Ninong]

Here's How the British Media Is Covering This:

Some Republicans consider BP deal a U.S. "shakedown"

(Reuters) - The first apology that rang out in a congressional hearing about the Gulf of Mexico oil spill on Thursday was not from BP Chief Executive Tony Hayward.

It was from Texas Republican Representative Joe Barton, who apologized to Hayward for BP's having to agree to a deal with President Barack Obama to set up a $20 billion fund for Gulf damage claims.

Note: Reuters has re-written that article since I first copied it. I'm surprised they don't say that somewhere at the bottom of the new & improved version. Their 'updated' version has an entirely different tone.

P.S. -- The Republican Study Committee, with its 114 members in the House, called it a "shakedown" the day before Barton did. Sen. John Cornyn said he "shares" Barton's concern. Rep. Michele Bachmann said that BP shouldn't agree to be "fleeced."

Rep. Joe Barton (R-Texas) has received $1.5 million in campaign contributions from big oil companies, more than any other member of Congress. He's the ranking Republican on the House Energy and Commerce Committee. Before entering Congress, Mr. Barton was an executive with a large oil company: ARCO.

ARCO (an acronym for Atlantic Richfield Company) is an oil company which became a subsidiary of UK-based BP in 2000, officially known now as BP West Coast.


Try to act surprised.

[Ninong]

Next, Joe Barton apologizes to Union Carbide for the Bhopal 'incident.'

Next, Joe Barton apologizes to Osama bin Laden for 9/11.

Next, Joe Barton apologizes to the UK for the War of 1812, especially the Battle of New Orleans.

Next, Joe Barton apologizes to the UK World Cup team for the sneaky goal we scored on them.

[zhenya]

Rep. Joe Barton (R-Texas) has received $1.5 million in campaign contributions from big oil companies, more than any other member of Congress. He's the ranking Republican on the House Energy and Commerce Committee. Before entering Congress, Mr. Barton was an executive with a large oil company: ARCO.

ARCO (an acronym for Atlantic Richfield Company) is an oil company which became a subsidiary of UK-based BP in 2000, officially known as BP West Coast.


Try to act surprised.

No, I am not surprized. I'm trying to subdue bunch of bile that is in the back of my throat...
Just goes to show you what we have in the Senate and Congress won't be looking out for any of us when disaster comes calling.
How can you say that it is fleecing? And how do you put a price on all the life that is and will be lost for years ahead?