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BP To Decide On Dividend Cut On Monday
Immediately following the suddenly very contentious US-England soccer game on Saturday, part two of the great transatlantic diplomatic fiasco will occur on Monday when BP decides whether to cut its dividend. BP is now caught in a massive political crucible: if it does go ahead and cut, all of Britain will scream for Obama's blood. If it doesn't, Obama, and especially Botox queen Pelosi, will demand that BP be dismantled. Classic lose-lose, and as always, another huge political blunder for Obama whose only action so far has been to appear on TV day after day and, courtesy of teleprompter acting classes, to appear stern and serious. And that's about it, even as the real spilled oil content in the gulf has now been double from prior estimates.
Here is BBC's take as to what will happen on Monday:
BBC business editor Robert Peston expects that it will formally agree some kind of reduction in the dividend payment has already been taken.
The meeting comes in response to pressure from the US government, which wants BP to use the money to pay for the Gulf of Mexico clean-up instead.
"In practice Monday's discussion at newly instituted weekly meetings of the board will be about when to suspend the payments, how long to suspend the payments, and what to do with the billions of dollars that would be saved and not paid to shareholders," Robert Peston said.
Pensions expert and former government adviser Ros Altmann told the BBC that if the company did cut its dividend it would be "a blow" but should not be taken "out of proportion".
"For people already drawing a pension it doesn't really have much impact. For people saving for a pension, what we're talking about here is one quarter's dividend perhaps not being paid, certainly initially," she said.
"It will only have an impact on people who are coming up to retirement immediately and will then have to convert their pension fund into a pension straight away, then the value of that pension fund will be less."
Joanne Segars, chief executive of the NAPF, agreed that the impact on pensions would be "relatively diluted" as pension funds invest in many different companies' stocks and shares.
"The ability of pension funds to pay out pensions to today's pensioners and tomorrow's pensioners shouldn't be affected by this crisis," she said.
But she added: "If we saw a continuation of withholding of dividends or the company coming under further pressure and further speculation about its future then that's a real issue."
New British PM has so far tried to not get too involved in the political fallout, althought even he seems to be gradually siding on behalf of a BP shareholders:
A Downing Street spokesman said Mr Cameron had told the BP chairman that he was "frustrated and concerned" about the environmental damage caused by the spill.
He added: "He said that it is in everyone's interests that BP continues to be a financially strong and stable company."
David Cameron will discuss the issue with US President Barack Obama during their regular phone call on Saturday.
Perhaps in the latest theatric sign of anti-UK solidarity the president can have his next national address from the US-UK soccer stadium. Then again with England victory odds at 1.58 compared to the US' lowly 7.5, this may not be the best idea.
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Have no fear
BP will aquire one of many insolvent banks to deal with claims and at the same time funnel into the Fed sponsored printing press just to manage those dividends. At the same time the scottish widows will have sold their shares only to realize that the BP stock went up 40% on the news of endles money resource found at the wells of the Federal Reserve basement.
BP knows better than anyone the extend of the leak and its resultant unprecedented damage. BP therefore also knows better than anyone that Chapter 11 awaits.
Look for BP starting to transition strategic assets to Shell and Exxon Mobil under various "partnership" agreements leaving behind an empty shell of a company to file Chapter 11.
By the end of the day, the expense of cleaning up this mess (to the extend that it can be cleaned up) will be paid by more FRN's printing. The GoM may be a dead zone but the real patient on its death bed is the USD.
+100
Your scenario would continue when Obama then goes after those Exxon and Shell partnerships. Better to partner up with Total or other countries who are hostile to the USA.
Obama also gets the US assets (Amoco, etc.).
They would be pretty dumb to pay a dividend until, at the very least, the oil leak has been stopped for a quarter or two.
Apart from Tony Haward pouring oil into a pelican's mouth, live on TV whilst singing the British national anthem, paying a dividend is about the most inflammatory thing BP can do at the moment.
I say this as a BP shareholder too.
agreed, same as the banksters would have been pretty dumb to take billion $ bonuses in the same fiscal year as they were bailed out of extinction.
... oh wait..
Yes, but the stupidity of bankers knows no bounds.
Let's hold out a little hope for the men and women of our energy industry.
Anyone notice the GBP taking a solid beating today? 1.3% down at last check with a complete reversal of yesterday. Just another day at the "steady and stable" forex tables.
re: the BP dividend, they could just cut it in half or something in an attempt to placate both sides. That would put extreme political heat on the O team as BP would look like it is doing something for the spill while at the same time protecting its shareholders.
Too busy watching a meltup in SPY on literally zero volume - pretty sure there were some candles with <100k on the 1mins. Green, of course.
Is it coincidence that the amount of the divi that Obama wants to be used for the cleanup is a very similar number to what AIG would have received if the purchase of the Asian business by the Pru had gone through...
I think not.
Did bank of America pay a dividend when it was going through shit ?
Last time I checked, dividends came behind creditor claims.
The Gulf is as good as dead and the dividends should be as well.
I find it interesting that the overnight news that the estimate of the flow rate has doubled to the new range of 20,000 to 40,000 barrels. And this has been brushed over as not really news. The NY Times web site top story is the administration's concerns about leaks of another kind.
This is a classic example of controlling the news flow and conditioning the public to bad news. This is why they started at 1,000, then let other parties move it to 5,000, then 12,000 to 19,000 and now to this obscene number.
BP knew that the government had the same incentive to soft peddle this disaster. Thus BP always says they can't tell what the flow rate is, they are just working on solutions. Which is bullshit because they must have some idea what the rate is to devise solutions to contain it. This is a chess game with the US Government and both parties have conflicts of interest.
And this number doesn't include the increase that came from removing the bent riser, thus removing all obstructions to the flow. I'd be willing to wager this will eventually hit 50,000 as the bottom of the range before August.
For what it's worth, they never had me or my coworkers fooled. We're in the oil business and the moment we saw the live video feed of the oil billowing up, we could tell there was no fucking way that was just 1kbpd, or even 5kbpd. The guy who sits two desks down from me threw out a guess of 20kbpd. Turns out he wasn't that far off.
Advocating the boycott of BP is simply idiotic. You are part of the problem in doing so. A bankrupt BP will cost us dearly. Be a part of the solution and get money to BP by buying their products. Since this oil spill is an oil industry disaster, all the other big oil companies should announce that they will donate ($$) for every gallon of gas sold.
In a free market, never have i heard of a competitor donating to its rivals.
Microsoft put 150MM into Apple in 1997 to prop them up, so they would have competition... It happens...
Antitrust perhaps?
Mr. JohnnyBoy, what you've just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.
O'DOYL RULES!
Well, Rahm, hate to upset your crisis thinking but when BP goes BK look for a $1-2 clean-up tax on every gallon of gas to clean up this disaster. You know how those taxes have a nasty way of never going away. By the way, other than nationalizing the oil industry what other deep thoughts have you to help solve the problem?
that sort of tax is likely coming either way. Should we have funneled some money into Madoff's hedge fund once he got into trouble?
Perhaps an announcement of suspension of half the dividend. And a warning that future dividends may not be payed out. Split the difference.
I'm not the sharpest knife in the drawer, but isn't it SOP to cut dividends when a stock price drops precipitously? So isn't it obvious that they NEED to cut the divi in half, as it's currently yielding an unsustainable 9% or so? Seems like basic math. What's funny is that then both sides will get to claim victory...
I'm fairly confused as to how this could be an Obama blunder, seeing as nothing he can do or have done would change the fact that 90% of England's widowers have their money in BP and that BP fucked up trying to speed up production.
Also, I wonder how happy the English would be if they couldnt get their fucking fish and chips anymore because BP covered all their fish with Oil
I am sure that this is linked somewhere else on ZH....but a pretty decent overview of the multiple levels of failure leading to the blowout http://www.rollingstone.com/politics/news/17390/111965?RS_show_page=0
Sieze BP. Sell the assets. Keep the money. Enough said.
Yes it's definitely that simple.
FuckinA
why just BP & not the Banks?
who's done more damage ultimately?
O'sellout just doing what he does best - faking outrage at his corporate masters...
he is and will remain the "Bankers Bitch"...
fuck him and them...
Eternal damnation on Obama and Pelosi for forcing those pensioners into over-investing in a single asset class, nay, a single company.
A must watch clip, BP Coffee Spill:
http://www.youtube.com/watch?v=2AAa0gd7ClM&feature=related
Costner's last sentance pretty much says it all.
Just an update:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7148202.ece
I agree CD. This was soft-pedalled by BP and the White House from day 1. Until it became obvious that the problem would not be easily contained.
Than the White House went on a major offensive.
Now, as you point out, there is little said about the spill.
In fact, all the news is about how much oil is being sucked into the tanker. Nothing about how much is spilling into the Gulf.
The ramifications of this spill are just beginning.
In my opinion, BP should pay out all of the cash they can get their hands on as a dividend. It was necessary to drill in extreme conditions because of environmentalists. Let them pay for the spill. They all drive cars, don't they? Drilling for oil is necessary, isn't it?
I am an American and Obama is a facist moron. Let the facist moron party pay for the clean-up costs. That incompetent fool did nothing. Now all he can do is blow his worthless horn. Screw him. Screw the environmentalists.
Pay out all the cash and bankrupt the company, if necessary. The political idiots and environmentalists need to be taught a lesson. I say that oil companies should refuse to deliver any oil to America. Let America learn it ain't all about America.
We need companies. We need the jobs they provide. This is just another political baffoon platforming for American idiots. The oil spill sucks. But, if they were dealing with rational laws, then maybe they could be honest about dealing with catastrophic events. They can't be honest because honesty costs money.
Let's not deflect. Understand your frustrations with environmentalists, but the burden of safety for deep water drilling remains squarely on the shoulders BP, RIG, and the MMS. If you're thinking that you're teaching a lesson to, rather than empowering, environmentalists, I don't think you've thought this all the way through...
Secondy
Never let a crisis go to waste. Cleanup jobs, for soon to be unemployed census workers, with the tab to be picked up by BP.. Compensations claims, jobs created, and reduced unemployment, all helping fuel the "economic rebound" courtesy of BP and her Scottish widows. How is this not a White House win?
Furthermore, let's stuff that worthless piece of shit Obama down that oil leak to stop the oil flow. Let's stuff his little not-so-petite wife down there, too.
Oh, crap, that could be construed to be treason.
Well, if that's the case, since I am up on the charges, I say let's stuff that worthless piece of shit Pelosi, Frank, Dodd, Brown (before he becomes CA governor), Boxer, Clinton (Hillary, not Bill, we need him for comedy relief) et al down that pipe for good measure.
Had to stifle a belly laugh / spittle shoot...
way to go obummer - future presidents (if we have any) take note - do everything ex-fucking-actly opposite from these fuckstick douchenozzles
While we're at it, there is the little matter of the British Army burning down the White House in 1814. Did they think we forgot about that?
Every time Obama casts a stone at BP , George W, lets out a "hee haw "
shouldnt laugh really, but if you have to, this is quite amusing
fake BP PR twitter account - http://twitter.com/bpglobalpr
If we see Geithner on a plane to England we no were screwed.
BP will be forced to declare Chapter 11 before the end of July. Look out stock and bond holders! This means pension funds, mutual funds and Euro banks will get f**ked!!!