I am very short on time today and I have right around $20 billion dollars worth of links to share so instead of making a formal post I’ll make like our good friend Editilla who also gets a blanket hat tip and simply aggregate the BP finance news for the Slabbed Nation. Hopefully Nowdy will be around a bit later with the latest on the Ex Rel Rigsby. Without further adieu here is the latest:
Becky Mowbray at the Times Picayune wrote a good article on the specter of a BP bankruptcy which included comments from two local bankruptcy lawyers in Joe Friend at Breazeale, Sachse & Wilson and Rudy Cerone at McGlinchey Stafford who both were willing to go out on a limb making quasi-predictions about what the future holds. The story is a bit more sanguine regarding BPs future prospects than most I’ve seen.
James Gill’s column in today’s Times Picayune nails the dichotomy of why everyone hates BP while also needing the company to stay solvent and engaged.
Harry Shearer wrote a very good piece for the Huff Po that nails the hard reality why no one should feel sorry for BP longs. I personally do not like to see people lose money in the markets but how much of BP’s profits came from cutting corners on safety through time? The piece serves as a reminder why I caution most retail investors against owning individual issues, especially those using brokers or so called money managers.
One knucklehead wanting to save 10 hours may well be the cause of this disaster. It appears the same knucklehead also has a slight problem telling the truth.
Fitch gave BP’s credit rating a big time haircut yesterday. The Wall Street Journal reports that pricing on BP credit default swaps soared today to 695 basis point sand yields on one of their short term bonds rose to over 9%. Action on BP put options also was very brisk. None of these items bode well for the future direction of BP stock.
The announcement of the $20 billion escrow account was accompanied by news that the heretofore sacrosanct BP dividend has been eliminated for the rest of this year. The news actually helped stabilize pricing in BPs ADRs as investors gained a bit of comfort on the ultimate price tag. The again no one can say with any sort of certainty how much the ultimate price tag will be for the disaster.
James Stewart at the Wall Street Journal gives some friendly advice to those still holding BP stock: Sell the first time any sort of good news causes the pricing to spike upward in a twist on the old Wall Street adage Buy the rumor, sell the news.
Our boy Alan Kanner was selected by Louisiana AG Buddy Caldwell to lead the state’s litigation team against BP. This of course has set off old tensions between the plaintiff’s bar and the corporate shoeshine boys at the Louisiana Association of Business and Industry. It appears the gang at the legislature has found there are benefits to allowing the legal team to work on contingency but if the state is willing I’m certain Mr Show Me the Money will gladly work for the $500 plus an hour good corporate lawyers fetch.
Speaking of corporate lawyers, BP’s legal team is taking shape and it looks like several large firms from Florida will be handling the heavy lifting for team BP.
More later as time permits.