Dare you buy a BP share?

That's not a proper way of thinking; you're thinking security before principles. It's still immoral to bail out a large corporation, no matter how large they are; it's unfair to smaller competitors, and it completely violates the principles of self-sufficiency.

 

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Has your life always been fair?

Is it fair, to cause mass unemployment because a few people were corrupt and used the legal and political system to rip people off?

It is fair to rob people of their life savings and retirement accounts?

I think you have a strange definiton of principals and morals my friend.

 

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Nobody is entitled to a job anyway; sometimes companies go under. Are we supposed to always bail out companies just because we want to "save jobs"? No. Losing your job happens.

And it is very unfair, as I said, to bail out large companies unless you are willing to bail everyone else out, including me.

Where the hell is my bailout? Granted, I'm not in debt...but if they get free money, I want some too, dammit!

 

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Bailing out these banks stopped the bankrupcy of banking system not just domesticly but globally as well. If the bailout was not taken, it would have resulted in a lot of innocent depositors loosing their money.

And since it the banking crisis was in no small part allowed to occur by government (e..g reversal of Glass-Stegal and failure to enforce existing security laws) government bears some responsiblity for the crisis as well.

If you need a bridge loan, I think there are some government agencies out there to help with that. But the government did not give the money away to the banks. It was a loan and it is being paid back. The government is actually making a tidy profit on most of the bailout money.
Bailiing out the banks with bridge loans was the right thing to do. The bank baliout/bridge loans kept government from going further in debt (FDIC payments, unemployment benefits, lost revenues, etc) and it served to mitigate governments complict roll in the scandal.

 

The release well is only 15 feet away, so we should know in 2-3 days if it is successful or not. If yes, the stock could jump $5 easily, if not drop the same. So from a technical POV it is not worthy to risk it at this point if one has a profit already...

 

Where did this news come from? I cannot find anything like this.

 

It was running on CNN's screen this afternoon, but right now I can't find it either...

Maybe a typo about the distance....

Edit: I have found it:

http://news.yahoo.com/s/nm/20100707/bs_nm/us_oil_spill

"The U.S. official overseeing the spill cleanup said it was 15 feet from the side of the leaking well, although still not expected to be finished before mid-August."

 

Thanks On basis of your 2 to 3 days, I bought a 17 July strike $33 put at $1.05 at market open today and sold it at $1.18 a few minutes ago, for net loss $8.49 when I paid two commissions.

I was willing to gamble that some snag would come in your 3 or less days, well within the 9 day life of the puts, but now that it is "mid August" before we know, I decided to take the minor loss. (instead of expire worthless)

I may do the same again in "mid August" as I agree a real proble can drop stock back to 27 or below (Risk $100 for possibility of $500 gain)

 

BP touched 33.75 today before dropping lower. I am usually early with entries/exits. Anyhow, assuming no breaking news for the next few days, I expect it to dropa few bucks, based on, well, magic.....

 

As I expected BP is finally in the red for the day, down -2% so far. The market is slightly in the green, so the divergence is signifficant...

 

This may be why:

"... 7:01a ET July 9, 2010 (MarketWatch):... BP was the second-worst performing stock of the second quarter, according to Morningstar Inc., losing almost 50% of its value. The company's reputation is forever tainted, and while some industry watchers are suggesting that BP has been beaten down to where it's almost a value play -- I would argue that it would have to be cut in half again before it would truly be cheap -- the truth is that no ordinary investor really wants to go there.

The 'Stupid Investment of the Week' is about issues where consumers rely on faulty logic or misleading characteristics to take a chance on a security, there should always be a case where the average investor would buy. You don't need to be a socially conscious investor to hate BP for the spill and to stay away from its stock. Thus, the average investor isn't going there, and neither is the column.

There's little doubt that BP currently aces the test for being a stupid investment -- and perhaps it should have been the choice in the days before the full scope of the spill and the inability to stop it became clear -- but the liabilities that now face the company and the public's outrage are such that most retail investors likely will shun the stock for years. ..."

In the BP news section at TD AmTrade today. At 10:30EDT here is price: $32.78 down 0.9599 (2.84%) Volume = 11,981,795 (Above Avg)

Fast dropping on high volume => likely to close below $32/sh.

 

Mega Dittos...especially when you consider the alternatives available to investors. There are just too many good stocks and good companies out there without the risk.

In my view BP is on the wrong end of the risk reward curve at this point in times. When the price gets to the low to mid teens, then it becomes interesting from a value perspective, assuming that we can see some end to its legal and operational issues.

I think we can expect to see Hayward leave in the coming months and that wil be a small boost. And we sure the heck hope that they are able to plug the well. It is not at all clear to me that they are or willl be able to do so in the near future.

This whole thing kind of reminds me of Citi Group Prince Talal in 2007. I remember the good prince lecturing Americans about the value in Citi Group as he invested heavily in the stock just before it crashed. At the time Prince Talal invested, Citi stock was selling at around 30 dollars per share. It is now selling at around 4 dollars per share.

http://www.nydailynews.com/money/20...sh_pressures_led_to_citigroup_deal_ara-2.html

Are we seeing something similar with BP? One thing is for certian, it will be interesting to watch this company and this stock in the days to come. I think we are all hoping for the best. But to ignore the risk here is to invite folly.

 

I don't trade stocks specially ones that are sensitive to breaking news. The reason why I was expecting a pullback is because the stock reached the upper Bollinger band, just in case anybody wondered what I meant by magic earlier.
I trade based on technicals (indicators) and not on fundamentals (news,earnings)...

 

I just heard a story that BP is trying to sell and they may be selling to China. Wouldn't that be an interesting development? My next question is what would they be selling? I am guessing that if they are planning a sale of let's say their north American operations, they would do it before they try to plug the wellhead...just a guess.

 

"... I'm {DR.Kent Moor} still giving the company no better than a 50/50 chance.

Here's what they need to do.

The bottom of the production casing (what's left of it) for the blown Macondo-1 well is 18,360 feet down - about 5,000 feet of water followed by 13,000 feet of seabed below. The relief wells are going to intersect the current pipe at about 17,500 feet down. The idea is to interrupt the oil flow and then stop the leak by pushing down a considerable amount of drilling mud and fluid. This is called a "dynamic kill." It is not intended to stabilize the well for later production... it's intended to end it for good.

But this outcome is hardly a certainty. To put it in perspective, BP needs to drill down three miles - having to do so blind for the more than 70% of the operation that is below the seafloor - while hitting, at the correct angle, a target no bigger than a salad plate.

What if the leak cannot be plugged?... the "Armageddon Scenario."

We can see in the video feeds that the blowout preventer (BOP) is intact. It sits on top of the wellhead. The leak comes from the place where the connection between the BOP and the riser pipeline used to be.

What we cannot see is the stability of the production casing below the wellhead. We don't even know how much of that casing remains intact. The increasing oil flow over the past few weeks may provide some concerns about the continuing integrity of the well structure below the surface. If it begins to concave, the pressure will cause it to rupture, with debris and an accelerating oil flow moving into what is already a compromised annulus (the space between pipe and borehole surface) filled with cement. We already know the cement has fissures - that seems to be how the gas bubble reached the surface to cause the initial explosion back on April 20th.

Ruptured casing would cause the collapse of the surrounding ground, producing an implosion, a widening sinkhole, and a rapid rush of oil up to the surface.

Estimates now put the oil flow at as much as 80,000 barrels a day - including the volume being captured by BP. In my Armageddon Scenario, that figure would immediately double or even triple. And any attempt to combat that kind of spill, either on the surface or at the shoreline, would be futile and pointless.

Let's hope that doesn't happen. ..."

From today's Email of Dr. Kent Moor www.oilandenergyinvestor.com

 

"... To make a tight seal the existing cap will be moved away so underwater robots can unscrew six bolts holding the stump of pipe left after a robot sheared away most of it June 3, Allen said. A purpose-built sealed cap with connections to the surface would be bolted in place.

The sealed cap improves BP’s chances of successfully plugging the well from the bottom by injecting mud followed by cement through a relief well. With a tight seal at the top, engineers will get accurate flow and pressure readings, clues to the condition of the well bore, he said.

Kill May Work

“If they have that cap in place, they have an added advantage in trying to kill the well,” said Don Van Nieuwenhuise, director of professional geosciences at the University of Houston. “It should ensure the kill will work.”

Controlling flow atop the well will assure that cement injections have a chance to set, he said. ..."

From: http://noir.bloomberg.com/apps/news?pid=20601087&sid=am9Xmq6YiSL4&pos=8

Billy T comment:
I sure hope those six bolts the robots will try to remove were stainless steel so they have not "frozen" via corrosion. I am sure they know the risk, better than I do but it sure sounds risky to me if they think the relief well will work in less than a month. Article seems to be saying this "cap exchange" will increase the chances of the relief well working. If it doesn't it looks like several years more of rapid leaking. - See my last post, quoting Dr Kent Moor.

BP seems to be "betting the farm" on their robots.

 

http://news.bbc.co.uk/1/hi/business/10518442.stm

According to this report:

It's like I said previously the Oil firm's downturn in share value is going to allow people to buy into an oil company and gain the same sort of returns in the future as other tycoons have through other companies.

Those people that have been slowly buying shares could well find the value suddenly skyrocket, I would definitely say it would be a longterm investment to gain the maximum amount of return from it.

 

I don't think BP has a choice other than to bet the farm on this deal.

 

Neigh sayer.

The only true financial turmoil is the one that occurs from a market panick and to be honest since near anyone can trade, the panicks have uncreased.

 

I bought call options on BP shares. If BP tanks, my downside is limited, but if it goes back to $60/share, I will be set. Right now, my options are in the money, so I am reasonably happy.