You know I’m reluctant, outside of a major shock, to ascribe stock movements to a single event — too many individual decisions are being made on information and passions we may or may not be party to. So today it’s easy to blame the failure of the so-called top kill operation for the sell-off in BP shares.
Maybe. Who knows? The more information that comes out, especially thanks to the investigative work of the Wall Street Journal and New York Times, the worse BP comes off. The greater its potential liability grows. Offsetting that is the huge political power BP and the other oil giants have in Washington. If they can’t capture this worst oil leak ever, they certainly have captured regulators and politicians.
The stock should be falling because BP, with an abysmal environmental and safety record, has been shown to also be incompetent, with the gusher a running sore reminder for months/years to come. Because in a more balanced world the environmental and safety claims would empty BP’s treasury. Because, along with the shares of the other majors, BP is caught in the vortex of peak oil, where the easy and cheap days are rapidly diminishing.
But the reason is as likely that the shadow boyz shorting BP for profit. And the danger of a double-dip recession causing oil to fall, hence hurting profit growth, and BP is the ugly duckling, already. If that fear abates, our hunger for oil will restart the gusher of green.
The Back Story: Talking Points Memo has compiled a must-bookmark interactive graphic on the former members of Congress working on behalf of private interests. Not all are registered lobbyists. Leaders are Texas with 17 and New York with 14 in this “shadow Congress.” A total of 41 states are “represented” and this gang is comprised of both Republicans and Democrats. And you wonder why nothing ever seems to change except the increased power of special interests?
Today’s Econ Haiku:
Where will the jobs be?
Retrain for technology
Oh, wait, there’s HP