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Fitch Downgrades BP To BBB From AA
More imminent concerns of counterparty collateral calls: BP Plc’s long-term issuer default rating snd senior unsecured rating were cut to BBB from AA at Fitch Ratings. The rating watch was changed to Evolving from Negative. BP is now just barely investment grade to Fitch, the rating agency that has the highest Greek rating.
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And we should believe any rating coming from a "rating" agency after the big and continuing fail?
+1000
ratings agencies = no credibility
Why they continue to issue their "ratings" after what happened in 2009 is beyond me.
But there are other significant effects, even if we all know that the agencies have no credibility. For example, all of BP's trading agreements are likely to have provisions that trigger margin calls (or if the rating goes low enough, termination) based on downgrades. This is the kind of thing that played a huge role in Enron's downfall, because it creates a run on the bank.
The question for now is whether BP's agreements included Fitch ratings. Probably not, but I suspect that the relief is just temporary.
Notice how quiet JPM is on BP right now? I bet JPM earnings don't look so hot this quarter being the largest holder of their stock. I hope they go bankrupt along with BP.
a BP bankruptcy won't be what you might expect. BP has enough Bilderberg members to engineer a bailout of some sort from the Brits. oil. national security. the crown. grandma's pension. just a few rogue workers that cut corners.
Gosh golly does being owned by The Monarch count as clout? Did we see the Brit PM (or other high official) officially going rapid pit bull snarl on Obamanation when he was in his "grow a pair instantly by seeming to care" pose?
She is not *a* piece of cheese, she is The Cheese.
A little watching of the Red Dragon Bloodline series on youtube will show you her bicep size.
In point of fact, Obama and She are related, so the whole thing is a shadow play.
How did you find out that JPM is largest s/holder of BP?
Being the registered holder of the stock, according to Bloomberg I assume, does not mean you have the economic risk....
BP will soon be drinking Bee Pee
Nope, that's what the GOM and soon the Eastern US Coast are going to be drinking.
Thanks for the T-Shirt though.
"Swimmin' At the Beach?"
"Don't Drink The Bee Pee!"
I read on another thread that BP-America is only worth 25 Billion.
Hence if B Hussein's militant bloviating and simian show of aggression
gets excessive ie.throwing shit , they can simply cut it loose and give
GOM/ U.S. the fat finger. Restoring the cherished dividend. Any thoughts?
BP's assets would be seized if they tried to pull that, and the U.S. and/or each State's Attorney Generals could easily shut their businesses down completely. Do they really want to lose all that market share? I doubt it. We all know Obama is just a pawn, he has to put on the show so people can still HOPE. This thing is just getting started and BP will not be able to survive it. I don't care how much money people claim they have or earnings they think they can generate. When the lawsuits start rolling in, then its going to get uglier, and there are going to be thousands upon thousands of them. Including shareholder class action suits, due to the recent news regarding BP management cutting corners and then lying about the whole incident.
jfruffin
fair point but how do say GS get away with it
I think BP is too well connected and will be too big too fail
we shall see
The only reason GS has gotten away with the massive fraud they have is due to the fact that 95% of our Congress/FED/TRSY are all ex-employees of GS. BP doesn't have this luxury.
As suggested earlier, the EURUSD daily chart is giving bullish signals.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
BP, from a legal standpoint, is likely insulated from bankruptcy due to legal claims. Consider the following analysis (not mine, author unknown):
Many have said that the gulf spill will put BP out of business. Let's review how incorporation is used by modern corporation to encapsulate and limit liability. I would expect something like the following structure exists within BP.
BP Cayman Islands master owning corporation of all sub corporations
BP England stand alone corporation wholly owned by BP Cayman Islands
BP US stand alone corporation wholly owned by BP Cayman Islands owns gas station in US no connection with corporate entity that is doing the drilling in the gulf.
BP US Exploration stand alone corporation wholly owned by BP Cayman Islands owner of the right to drill in gulf. Rents oil drilling platform from outside corporation. Owns nothing expect the right to drill. Has borrowed money from banks and will have to first use the value of the right to drill to pay back bankers loans before paying for any cleanup or damages claims.
The only corporation that might go bankrupt is BP US Exploration. As it has a negative net worth I do not see any investor shedding any tears. Nor any victims getting any money.
Since the supreme court decided corporations were people each corporation named is a separate person and stands liable all by themselves. All the other persons are free and clear. They can not be held responsible for the crimes of others.
What will be interesting is if criminal charges are filed against management and the BOD. This will be the game changer...
Erin Burnett's breasts seem to be going in the opposite direction from bbb to aa.
that's a mic
flat as my michelins
BUMBLING INFERNO:
http://williambanzai7.blogspot.com/2010/06/bumbling-inferno.html
Yeah but they have a stake in CCX, that might be worth tens or hundreds of trillions. Did they account for that?
But yeah, other than that, it should have been downgraded further.
BP has a large number of US employees, it also has a large number of US shareholders and most of its earnings are in US dollars.
In addition, a lot of the work was contracted out to other (US) companies. Any litigation against BP will be swiftly moved to those companies. BP is not going under.
Typical ratings company, behind the curve as usual and reactive rather than proactive.
DavidC