BP down 13%. If that is all related to the dividend rumors and congress bitching about it then its a crazy move. Although it can create some short-term selling by income investors, the dividend is irrelevant frankly, the dividend will always be connected to the long-term stream of cashflows that the business creates, being right about that means you will be right about the dividend, eventually. Even if they suspend it, they will just retain the earnings and you will get the money down the line
http://insider.thomsonreuters.com/l...mNWY2ZC1kZmU0LTQ0MjgtYjE1Yy1jZWU3ZjFmYjU5MDM= Faber on China. Candid as always.
Matt Simmons on BP: "They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11." I have no idea how accurate this is. BP seems to tough call
I believe it was Simmons in the spring of 2008 who advocated for all governments to disolve their armies instantly, melt all the weapons available and rebuilt the decaying oil infrastructure immediately before it was too late and a barrel of oil costs 300$ an ounce. The drop in oil from 150$ a barrel to 30$ and the rest is history. Always rather fascinating how world class experts get their asses handed to them by the markets despite their superior knowledge on the matter.
I remember his bad 08 calls. Still in order to go comfortably long here I need to debunk his claims, he says there is another spill some miles away and that the costs of cleanup will be huge. Could be true for all I know. $1B so far, and the clean up probably will go for a long-time. Who knows
There is a 'this time is different' argument against BP. Part of this 'new normal' the world seems to be in, there seems to exist a rising trend of big business/rich hatred, more than usual. There is the big bonuses crackdown(which got the US congress to retroactively try to seek AIG bonuses, disregarding the Constitution), the global bank tax, crackdown on tax evasion, offshore tax havens, bank secrecy, efforts to tax the rich seem to be gaining more support etc. And people in general seem to be pretty upset about people who are doing well. This could mean its more likely than usual BP will pay higher amounts in court. So the comparisons with XOM Valdez could prove optimistic
Ackman on C http://www.marketwatch.com/story/ackman-sees-opportunity-in-citi-shares-2010-06-09?dist=bigcharts I will try to read a bit on their financials to see if I can understand this investment better
Yeah that's a very good point, especially with bank stocks, since reflexivity to the downside causes a run, and the same process to the upside averts the risk of one. I wonder if it would be possible to manipulate bank stock prices to actually make the manipulation a self-fulfilling prophecy at the fundamental level. E.g. if a bank is facing a run, maybe if they just took all deposits and loaded up on their own stock, it would restore confidence? Either they are wrong and go bust anyway, or they save the company and then make a killing on the market too
Greece 10y bond yields were close to their lows as recently as October 2010. The CDS went from 80bps in early 2008 to 600/700bps currently Its amusing to see people who routinely bash markets, take comfort in the fact that US yields are low