Including: the demise of BP, the Fiscal Cliff is still there, more Muddy Waters, and meet the new Pharaoh Mursi of Egypt
Good morning
The headlines:
- BP gets closed out.
Link: that, and it sells off the North Sea.
BP has been temporarily banned from winning new contracts from the US Federal Government – although the ban doesn’t impact current work. This was after pleading guilty to criminal charges around the Deepwater Horizon oil spill, etc. The good folk down at BP have announced that they are already working on getting the ban lifted.
There are some critics throwing the word “protectionism” around – but quite honestly, BP did some damage. I guess the real question here should be: is this constructive vengeance? Because the shareholders aren’t directly to blame – but it’s their bottom line that will suffer*. And the directors who are to blame have been fired. A better solution, I would think, is enforcing a regime of independent audits whose cost should equal the profit to be foregone under this ban.
In other related BP news, the company has sold off some of its oil assets in the North Sea to a firm from Abu Dhabi. Bob Dudley, BP’s CEO, is talking about “BP’s strategy to focus on a smaller number of higher-value assets with long-term growth potential”. The world is talking about BP saving up to pay for its fines.
*I’ll admit that the pressure from the shareholders to keep short-term** profits high probably didn’t help the safety standards. Then again – those particular short-term shareholders have probably already sold out and moved on…
**It has to be short-term investors, because only short-term investors would sacrifice the cost of safety standards in favour of higher profits this quarter. Long-term investors would acknowledge that safety standards are a necessary cost for long-term sustainability. Otherwise, like, oil spills happen that get you banned from drilling.
- A Muddy Waters update.
Link: “Look at our liquidity”
Olam’s CEO, Sunny Verghese, has pointed out that his company has $8.2 billion of liquidity. Then:
“This whole bogey of trying to say that we have some kind of liquidity crisis cannot be corroborated”
Bogey?
That aside – this is looking more and more like a Muddy Waters ruse.
- The US Fiscal Cliff.
Link: they’re still talking.
This is not really news so much as a reminder that I haven’t forgotten about it. But really, what we’re hearing is a lot of talk from the Geithners and Boehners of the world.
And Obama being all confident whilst jet-setting off to anywhere but Congress.
Everyone is alive with optimism, but the day after tomorrow is December.
- Egypt.
Link: the Supreme Constitutional Court defends itself.
Egypt is filled with protest against Mr Mursi and his Muslim Brotherhood. The Supreme Constitutional Court has chimed in, saying that it’s sad about the aspersions on its character (literally: “saddened”), and:
“The court will not be intimidated by threats, warnings or blackmail and will not succumb to any pressures against it.”
Which I thought was quite a valid point – because the military authorities didn’t need the constitutional court – they just changed the constitution. And seeing as the Court only needs to observe whether a given action is, or is not, in line with the current constitution – it can hardly be accused of political motivation.
Mr Mursi, on the other, self-decreed constitutional powers upon himself last week. Which included him forbidding any authority to revoke his decisions. He has since been called a “Pharaoh”.
Isn’t that what they call someone with absolute authority?
It’s outrageous. Even traditional dictators like to pretend they’re legitimate.
That’s all for now.
Have a good day.
