The Stock Market

[midas]

Will BP assume all the costs of the clean up if they where forced by special interest groups to drill in deep water rather then the shallow water closer to shore ?

Couple of things come to mind.....

1..Dont roll the dice if you cant pay the price..

2...Even if the problem occurred in shallow water I am not sure they could fix it any easier.

You cannot back a cement truck up to a volcano & expect it to just stop.

They now have a gapping hole into hel_l

Lastly whether they assume all costs or go bankrupt trying...The world loses if this cannot be remedied.

I would rather invest in BP's lawyers than the company itself !

How can anyone predict the extent of claims for consequential loss to all the small business people whether

they look spurious or not. They will all have to be defended.

[sokal]

Will BP assume all the costs of the clean up if they where forced by special interest groups to drill in deep water rather then the shallow water closer to shore ?

Couple of things come to mind.....

1..Dont roll the dice if you cant pay the price..

2...Even if the problem occurred in shallow water I am not sure they could fix it any easier.

You cannot back a cement truck up to a volcano & expect it to just stop.

They now have a gapping hole into hel_l

Lastly whether they assume all costs or go bankrupt trying...The world loses if this cannot be remedied.

I would rather invest in BP's lawyers than the company itself !

How can anyone predict the extent of claims for consequential loss to all the small business people whether

they look spurious or not. They will all have to be defended.

What would stop BP from just plugging the leak and getting out of the US ? It seems like nobody in the US is talking any sense. They are just making endless claims that will guarantee a bankruptcy.

They could just sell all their reserves in the area, pack up and leave and not answer the phone. What could anyone in the US do ?

[My Friend Same]

BP's price now depends on so many imponderables that are more political than financial that it remains impossible to attempt to define value. Speculators may look and decide that the risk (further falls extending to the entire value of BP if it's out out of business and there is no residual equity left on the closure of the business) is outweighted by whatever the upside is from here.

I suspect that there are smarter ways to play the opportunity though based on the fact that market assumptions may be flawed - option pricing could well be making false assumptions about the stochastic volatility of BP's price -

1) I see that the structured product providers are rushing out BP-based products. The retail ones that I've seen so far are wildly over simplified but I believe that it's possible to exploit these to generate a premium today for taking a 12 month position that sees you 100% positively exposed to share price movement of -20%to+15% from today's pricing neutral on falls of 20%+ and 15-30% and leaving yourself -100% exposed on gains of 30% plus. If you felt confortable that you could trigger-buy into a rising BP in a way that mitigates the cost of that risk and assuming that BP pay some dividends, this would appear to be free money but it then hinges on BP vol in that +15to+30% range over the next 12 months

2) You could buy a basket of stocks of the participants in the well problem - it's not just BP that have been marked down so badly - but will the blame be shared equally - will BP/Transocean/Halliburton take an equal caning here - if so is 50% excessive? or will the blame largely devolve to BP in which case the others are the buy here? buy an equal basket of the related stocks and as long as the final outcome is overall positive for the basket, you're doing OK

3) The entire sector seems to be suffering (not to the extent of the participants admittedly) but is it reasonable to have a 25% markdown in the price of oil service companies that have no exposure to this situation?

There's an opportunity here for sure - it's too speculative for my taste and I'm happy to not participate as for my requirements the risks here outweight the upsides. As I pointed out sarcastically to Sokal a few days and several dozens of points of price action ago, I think that you need something more scientific than a previous pricing chart to define BP's value right now.

Goldman estimates that the the all the claims combined against BP will add up to 180 billion dollars. That is enough to bankrupt them. The question is, will the UK government allow this to happen ? BP accounts for 12% of all dividends paid in the UK. It is the UK's largest corporation.

Will BP assume all the costs of the clean up if they where forced by special interest groups to drill in deep water rather then the shallow water closer to shore ?

you just hit the nail on the head right there pal. Goldman knows everything, right? Nobody smarter. They are the market controller criminals! 180 bil is horseshit.

[My Friend Same]

Anyone heard of Vioxx? they were supposed to be finished (Merck). Gee what happened there?

The media hype was just that. Exxon Valdez. Media - BLOOMBERG, CNBC, NYT, GOLDman, wsj. You get the picture, Watch out for the hype, the controllers. They need to scare everyone who owns the stock. Get em to sell it. Push it down as far as possible ($26 mrk in 2005, back to $60 in 2 years). Yeah after they puke everyone out, they swoop in and gobble it up and then hype it in the up direction to triple their money. How many times have I seen this? They need a jail the size of CT to cage all these thieves

Edited June 11, 2010 by My Friend Same

[My Friend Same]

dam_n, those chosen few who control the business news made me panic and sell my BP at $29.44 on wed. Goddammit! I lost $44,000 in 1 day because I listened to cnbcberg, goldstein sachs, wall st journalberg, new york timestein

I HATE YOU MEDIASTEINS

[zorro1]

You should have bought bhp yesterday in tha case and flogged it off tomorrow morning. BHP has started uptrend and will be a nice little gain tomorrow.

I made a sentiment call that BP was putting in a short term bottom yesterday and I did it without any charts. Look at my post from yesterday

errrm this is a BHP chart not BP. Nice little trade today

[badge]

I have some profit-taking levels around 1% higher on UK Miners BLT.L(curr 1895), RIO.L, XTA.L, AAL.L etc, so Im avidly following haivng bought tuesday:ph34r:

[flying]

What would stop BP from just plugging the leak and getting out of the US ? It seems like nobody in the US is talking any sense. They are just making endless claims that will guarantee a bankruptcy.

They could just sell all their reserves in the area, pack up and leave and not answer the phone. What could anyone in the US do ?

What would stop them plugging the leak? Just the fact that they cannot

If they could they would have one less problem. Yes they can try & duck out on their responsibilities same as anyone including Haliburton.

What could the US do? What could the world do ? This leak is affecting the US today..None know who it may effect tomorrow.

PS: Seems today BP has in fact decided to defer their dividends to share holders decision till July. Now that I think may be a dumb move as that may drive their stock down quite a bit faster.

Also think it was wrong for the US Prez to pressure them in that direction of no dividends as he also implies by that action that they are short...Which can only increase a lack of faith

Edited June 11, 2010 by flying

[sokal]

Petro China would just duck out without even plugging the leak. The US is doing its best to bankrupt this company, we will see how happy they will be when the only oil companies in the gulf are owned by China or Venezuela.

Defering the dividend is better then cutting it.

[flying]

Defering the dividend is better then cutting it.

Yeah it is kind of unclear what is going on.I get the impression they are deferring the decision as to whether or not pay it out at all. I also see they are putting the $$ in an escrow account until more is known as to the cost of liabilities.

Edited June 11, 2010 by flying

[Gambles]

What would stop BP from just plugging the leak and getting out of the US ? It seems like nobody in the US is talking any sense. They are just making endless claims that will guarantee a bankruptcy.

They could just sell all their reserves in the area, pack up and leave and not answer the phone. What could anyone in the US do ?

What would stop them plugging the leak? Just the fact that they cannot

If they could they would have one less problem. Yes they can try & duck out on their responsibilities same as anyone including Haliburton.

What could the US do? What could the world do ? This leak is affecting the US today..None know who it may effect tomorrow.

PS: Seems today BP has in fact decided to defer their dividends to share holders decision till July. Now that I think may be a dumb move as that may drive their stock down quite a bit faster.

Also think it was wrong for the US Prez to pressure them in that direction of no dividends as he also implies by that action that they are short...Which can only increase a lack of faith

POTUS dictating BP's dividend policy

I smell international interference, protectionism, NIMBYism, currency speculation and the rise of every-man-for-himself international tensions.....

[BlackJack]

Defering the dividend is better then cutting it.

Yeah it is kind of unclear what is going on.I get the impression they are deferring the decision as to whether or not pay it out at all. I also see they are putting the $$ in an escrow account until more is known as to the cost of liabilities.

it will take decades for the courts decision on liabilities

the winners will be the lawyers

do they have a ticker?

[Abrak]

There are loads of interesting issues here.

To me the biggest and most important decision BP needs to make is whether they will actually payout the dividend they have already announced for the first quarter on Monday week. They have the ability to cancel actual payment until it is physically paid. If they intend to suspend dividends for a while then the 'big sacrifice' is to cancel the announced dividend. It would be unprecedented and show 'real commitment'. I suspect many people already assume it has already been paid. Just seems a neat move to me if they are going to suspend payments.

They also have the scrip dividend option - which avoids a transfer of cash while maintaining a commitment to shareholders.

I do not think a cash dividend payment is in shareholders best interests at present. Ultimately it is has no inherent impact on the value of the company. But BP accept liability for the spill. As 'Flying' pointed out a couple of pages ago while the spill continues to increase the size it is unknown and therefore the liability 'infinite' so cash dividend payments seem inappropriate until the damage has 'stopped'. When it has stopped, then a dividend can be paid on 'assessed' liability (as with any balance sheet) rather than an unassessable liability.

To me the right thing to do is to announce a dividend on a 'deferred' basis. Meaning that you believe you have the resources to justify payment but you cannot make payment while the spillage is increasing, a true and fair valuation of the liability cannot be justified.

[BlackJack]

There are loads of interesting issues here.

To me the biggest and most important decision BP needs to make is whether they will actually payout the dividend they have already announced for the first quarter on Monday week. They have the ability to cancel actual payment until it is physically paid. If they intend to suspend dividends for a while then the 'big sacrifice' is to cancel the announced dividend. It would be unprecedented and show 'real commitment'. I suspect many people already assume it has already been paid. Just seems a neat move to me if they are going to suspend payments.

They also have the scrip dividend option - which avoids a transfer of cash while maintaining a commitment to shareholders.

I do not think a cash dividend payment is in shareholders best interests at present. Ultimately it is has no inherent impact on the value of the company. But BP accept liability for the spill. As 'Flying' pointed out a couple of pages ago while the spill continues to increase the size it is unknown and therefore the liability 'infinite' so cash dividend payments seem inappropriate until the damage has 'stopped'. When it has stopped, then a dividend can be paid on 'assessed' liability (as with any balance sheet) rather than an unassessable liability.

To me the right thing to do is to announce a dividend on a 'deferred' basis. Meaning that you believe you have the resources to justify payment but you cannot make payment while the spillage is increasing, a true and fair valuation of the liability cannot be justified.

morals / ethics and an oil company dont go together

latest report is that the spill is 40 times larger than first stated

the loss and damage to BP is just 1 hair off a bears back

now the accountants / lawyers etc are looking for ways to minimise their loss

it will take a few more months to drill relief wells and so more problems ahead

i think that this is a true disaster however there is such an irony in this as the UK stuffs up the USA

BP may shut down and start up as another company - its been done before - think wall street banks recently -

[zorro1]

just announced CNN BP will NOT pay dividends

[BlackJack]

just announced CNN BP will NOT pay dividends

bummer

[Abrak]

There are loads of interesting issues here.

To me the biggest and most important decision BP needs to make is whether they will actually payout the dividend they have already announced for the first quarter on Monday week. They have the ability to cancel actual payment until it is physically paid. If they intend to suspend dividends for a while then the 'big sacrifice' is to cancel the announced dividend. It would be unprecedented and show 'real commitment'. I suspect many people already assume it has already been paid. Just seems a neat move to me if they are going to suspend payments.

They also have the scrip dividend option - which avoids a transfer of cash while maintaining a commitment to shareholders.

I do not think a cash dividend payment is in shareholders best interests at present. Ultimately it is has no inherent impact on the value of the company. But BP accept liability for the spill. As 'Flying' pointed out a couple of pages ago while the spill continues to increase the size it is unknown and therefore the liability 'infinite' so cash dividend payments seem inappropriate until the damage has 'stopped'. When it has stopped, then a dividend can be paid on 'assessed' liability (as with any balance sheet) rather than an unassessable liability.

To me the right thing to do is to announce a dividend on a 'deferred' basis. Meaning that you believe you have the resources to justify payment but you cannot make payment while the spillage is increasing, a true and fair valuation of the liability cannot be justified.

morals / ethics and an oil company dont go together

latest report is that the spill is 40 times larger than first stated

the loss and damage to BP is just 1 hair off a bears back

now the accountants / lawyers etc are looking for ways to minimise their loss

it will take a few more months to drill relief wells and so more problems ahead

i think that this is a true disaster however there is such an irony in this as the UK stuffs up the USA

BP may shut down and start up as another company - its been done before - think wall street banks recently -

I am sorry if I implied my argument was based on morals/ethics - it is simply based on two principles (1) it is a decision that is in the best interests of their shareholders and (2) it is usually best to get on the train before it leaves the station.

If they pay a dividend you will make one person extremely happy - President Obama.

You see from a purely 'ethical' point of view, the owners of BP should not be paid until the company that has 'destroyed the lives and incomes of others' have been repaid first. Now that essentially means 'for the forseeable future' as the law cases will go on for years. The argument that shareholders depend on that 'dividend' holds no water. They chose to invest in the company. The people of Florida did not choose for their incomes to be destroyed.

I would have thought that a deferral of dividend payments 'until spillage stops' would actually make the share price go up under current sentiment.

However, I think that deferring the announced dividend is far more important (to be paid Monday week). Obviously Obama hasnt asked them to do that. But it is unlikely that he and his advisors dont know about it. And the day it is paid, I suspect he will take political advantage of it.

Edited June 13, 2010 by Abrak

[badge]

[...]

However, I think that deferring the announced dividend is far more important (to be paid Monday week).

Theres no divi anytime soon by my records; they only paid one a month ago.

[loong]

[...]

However, I think that deferring the announced dividend is far more important (to be paid Monday week).

Theres no divi anytime soon by my records; they only paid one a month ago.

Dividends are paid quarterly and the next payment date is 21st June 2010

It went ex-dividend on the 5th May

Last divi was paid 8th March

Edited June 13, 2010 by loong

[Abrak]

[...]

However, I think that deferring the announced dividend is far more important (to be paid Monday week).

Theres no divi anytime soon by my records; they only paid one a month ago.

Dividends are paid quarterly and the next payment date is 21st June 2010

It went ex-dividend on the 5th May

Last divi was paid 8th March

Thanks Badge for clarifying something I should have.

In addition the neat thing about announcing a deferral of this payment is ...

1) a Company in he UK does not have to pay a dividend until payment date (i.e. not announcement date or ex-dividend)

2) However, if it cancels the payment it has problems. If you hold BP and sell ex-D you expect to receive the dividend. So while BP can justify deferring payment it cannot justify canceling it.

3)So essentially BP maintains dividends, defers them rather than suspending future dividend payments. BP cannot cancel that payment historically. So to the extent, they are forced to 'stop' future payments it must be based on meeting the commitment to pay the 1Q dividend.

[badge]

[...]

However, I think that deferring the announced dividend is far more important (to be paid Monday week).

Theres no divi anytime soon by my records; they only paid one a month ago.

Dividends are paid quarterly and the next payment date is 21st June 2010

It went ex-dividend on the 5th May

Last divi was paid 8th March

UK dividends are always paid on Wednesdays.

http://uk.reuters.com/article/idUKLDE64310C20100504

I was paid on the 6th May, but its not important.

[Abrak]

Sorry Badge, it was Loong who corrected you.

Your link simply shows the EX-D date. It is physically impossible for any company to pay its dividends one day after the ex-D date.

As you can see payment is due on the 21st of June.

http://www.bp.com/extendedgenericarticle.do?categoryId=9033038&contentId=7060556

And the good news is that you have something to look forward to.

[loong]

Sorry Badge, it was Loong who corrected you.

Your link simply shows the EX-D date. It is physically impossible for any company to pay its dividends one day after the ex-D date.

As you can see payment is due on the 21st of June.

http://www.bp.com/extendedgenericarticle.do?categoryId=9033038&contentId=7060556

And the good news is that you have something to look forward to.

I would hazard a guess that Badge had invested via CFD's as with CFD's you will be credited on the ex-dividend date, not the payment date.

[Abrak]

Sorry Badge, it was Loong who corrected you.

Your link simply shows the EX-D date. It is physically impossible for any company to pay its dividends one day after the ex-D date.

As you can see payment is due on the 21st of June.

http://www.bp.com/extendedgenericarticle.do?categoryId=9033038&contentId=7060556

And the good news is that you have something to look forward to.

I would hazard a guess that Badge had invested via CFD's as with CFD's you will be credited on the ex-dividend date, not the payment date.

Didnt know that. Makes sense.

I notice that one of the ideas floating around is that the 'dividend' should be put in an 'escrow' account. This is a ridiculous concept because a 'liability' and a 'dividend' are so far apart under any logic. BP essentially believes it can meet its underlying liabilities here and also maintain the dividend. A deferral is based on the uncertainty that there is until the flow of oil is stopped. Placing dividends into an 'escrow' would imply that the liability will be paid out of dividends. In which case there can be no payout for the foreseeable future.

[BlackJack]

it would be PC to not pay the div

but this is a drop in the bucket for BP

it would seem that they could pay for cleanup and div

but it all comes down to politics

What BP says and what Mohamed Obuma says

[loong]

Sorry Badge, it was Loong who corrected you.

Your link simply shows the EX-D date. It is physically impossible for any company to pay its dividends one day after the ex-D date.

As you can see payment is due on the 21st of June.

http://www.bp.com/extendedgenericarticle.do?categoryId=9033038&contentId=7060556

And the good news is that you have something to look forward to.

I would hazard a guess that Badge had invested via CFD's as with CFD's you will be credited on the ex-dividend date, not the payment date.

Didnt know that. Makes sense.

I notice that one of the ideas floating around is that the 'dividend' should be put in an 'escrow' account. This is a ridiculous concept because a 'liability' and a 'dividend' are so far apart under any logic. BP essentially believes it can meet its underlying liabilities here and also maintain the dividend. A deferral is based on the uncertainty that there is until the flow of oil is stopped. Placing dividends into an 'escrow' would imply that the liability will be paid out of dividends. In which case there can be no payout for the foreseeable future.

I have never heard of a company cancelling a dividend payment after the ex-divi date. Should they cancel it, in theory, those holding a long position via CFD's would have their account debited by that amount and those holding a short have it credited.

[Abrak]

I have never heard of a company canceling a dividend either. But it can up until it is paid. There is an inherent logic to this. Say a company announces a gbp1 dividend one day and defaults on debt payment the next on the basis they have paid out all their money to shareholders. The bank would be able to force the cancellation of the dividend.

The underlying issue here seems to be that BP believes it has the resources to meet liabilities from the spill and maintain the dividend. The US can rightly claim that whilst it is still spilling oil it cannot make that claim. As I pointed out before if you have a bucket of water, whatever value you put on it you still have a bucket of water. If there is a hole in the bucket you can claim to have any water at all.

Anyway I do not believe that you can really cancel announced dividend without a specific claim against you has priority.

You can defer a dividend that has been announced already.and deferring previous payment given a very high degree of commitment to actually have to pay it, places the responsibility to prevent paying future dividends very firmly in the hands of the accuser.

As for CFDs I am not an expert. I would guess that buying a CFD does not make you the registered owner of the stock. It is quite possible that the dealer may not even own the underlying. So if you deal with the guy you assume he is good for the value of the underlying asset. To the extent he credits you ex-d this is to match the price movements. Clearly he assumes he will get paid, possibly like the buyer assumes he has the underlying stock. Neither assumption may necessarily hold true. Assuming a deferred payment then it is clear that cfd dealer was prepared to pay upfront a payment he would receive in the future. Cancellation would not be an issue for Badge but the cfd dealer may have an issue with BP

E

[badge]

I have some profit-taking levels around 1% higher on UK Miners BLT.L(curr 1895), RIO.L, XTA.L, AAL.L etc, so Im avidly following haivng bought tuesday:ph34r:

This area has been rather tumultuous, but has essentially been surpassed, plus European markets are called higher at the open. My model suggets the next possible profit taking level lies around 3.5%-4% above. BLT.L last closed at 1919.

Edit: To remain fair Im also showng a sell signal c1% above the last close, but due to the exuberance of futures Im assuming its void(i.e surpassed).

Edited June 16, 2010 by badge

[badge]

Sorry Badge, it was Loong who corrected you.

Your link simply shows the EX-D date. It is physically impossible for any company to pay its dividends one day after the ex-D date.

As you can see payment is due on the 21st of June.

http://www.bp.com/ex...ntentId=7060556

And the good news is that you have something to look forward to.

I would hazard a guess that Badge had invested via CFD's as with CFD's you will be credited on the ex-dividend date, not the payment date.

Didnt know that. Makes sense.

I notice that one of the ideas floating around is that the 'dividend' should be put in an 'escrow' account. This is a ridiculous concept because a 'liability' and a 'dividend' are so far apart under any logic. BP essentially believes it can meet its underlying liabilities here and also maintain the dividend. A deferral is based on the uncertainty that there is until the flow of oil is stopped. Placing dividends into an 'escrow' would imply that the liability will be paid out of dividends. In which case there can be no payout for the foreseeable future.

Correct, I deal CFDs, apologies for not clarifying.

Dividends always paid the following day on CFDs.

[Gambles]

Obama's lack of any kind of moral compass in just irresponsibly playing to the gallery on BP (until this I was undecided but marginally positive about B.O.) has given me an idea for an article

Bush was the strawman needing abrain

Brown was the unemotional tin man

Obama is the lion

Thatcher as the wicked witch

and Clegg & Cameron are munchkins?