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Oil Spill Conflict of Interest: Matt Simmons Is Shorting At Least 8,000 BP Shares
By Static Chaos
After busy making outrageous comments regarding BP and the Gulf oil spill as recent as last evening, Matt Simmons abruptly announced today that he would retire from the board of Simmons & Co.--the company he founded in 1974--effective June 30.
Meanwhile, Simmons & Co. also issued a statement in an apparent attempt to distance itself from its founder. As Houston Business Journal reports:
"..on June 14, [Simmons & Co] issued a statement dated May 12 in which [CEO Mike Frazier] distanced himself from the founder, saying that the former chairman’s views were not those of Simmons & Co. Frazier referred to Simmons' comments related to the Deepwater Horizon rig explosion and the implications for the industry and the individual companies."
You might recall in a Bloomberg interview on May 28, Matt Simmons endorsed the nuclear option as the only viable solution for the oil spill. Later on, BP shares slid to a 14-year low, around the same time Fortune magazine (on June 9) quoted Simmons as saying BP had a month before it would file for bankruptcy. As recent as last evening in a CNBC interview (at around 6-minute mark) Simmons also intimated that the Gulf oil leak was at 120,000 bpd, instead of the official estimate of 60,000 bpd.
Being a devil's advocate, my suspicion only grew each day when Simmons seemed to have become increasingly "passionate" about preaching the worst possible outcome and solution (a nuke bomb? come on!) to this unprecedented disaster.
Well, say it isn't so, but according to Barron's,
"...Simmons has a 4,000-share short sale on BP that he picked up when the stock hit $37. That’s in addition to a prior 4,000-share short sale he made at $48 a couple weeks prior. “It’s going to zero,” he says of BP stock. Mind you, Simmons has an interest and a deep investment in moving beyond fossil fuels."
The Barron's article went on to note that Simmon's Ocean Energy Institute, a renewable energy think-tank and venture capital fund he started in 2007, is involved in a project to develop off-shore wind power facilities and other alternative energies.
If Barron's assertion is true, it would appear that Simmons, an energy industry veteran and expert on "peak oil", could have had a serious conflict of interest when he went onto so many TV and magazine interviews talking his book about BP and the Gulf oil spill.
From that perspective, his remarks would seem irresponsible and only added to the existing despair and chaos, which is nothing the nation, particularly the Gulf Coast residents, need right now.
One has to wonder if this potentially unethical and maybe illegal act could have been easily deterred if only the media, instead of dashing to a seeminly sensational headline, would take a minute to require a disclosure before putting Simmons on TV and quoting him??
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EVERYBODY talks their book. Call me a cynic, but whatever someone says I figure they've got an interest in what they speak. So, I assume you're long BP Static Chaos.
The funny thing is that Simmon's "exaggerated" projections are becoming truer everyday. Yes, he should have disclosed, but that still doesn't change the facts.
Conflict of Interest ?!X!!??!
BP has no conflict of interest?
Lets play devil's advocate and this is based on last night's BP post rather than any of my expertise on crisis geology (of which I have none). I simply supply the math. BP admits there are 2.5mm gallons a day leaking. Simmons claims it is closer to 5mm/day. If the claim that the reservoir contains 3B gallons is correct, according to Simmons, half of it leaks out by maybe Memorial Day 1011. According to BP, it is July 4th, 2012. Somewhere around the correct guess, the pressure of the water exceeds that of the revesoir. Somewhere after that point of equilibrium, you will have water intrusion into a (claimed last night) 400° half-empty reservoir of oil. If the 400° claim is correct, and if liquid H2O penetrates that reservoir, that will point to the investment of the century being cheap real estate around Montgomery AL since that is about where the new redneck riviera will be.
Mr Simmons' description of additional, larger plumes meshes with today's assessment at The Oil Drum: http://www.businessinsider.com/heres-why-top-kill-and-every-other-top-do...
The Oil Drum believes the well bore structure is most likely compromised "down hole," which is one of the worst case scenarios. Until such time as the two relief wells are drilled and pumping, the compromised bore hole will spew oil uncontrollably. Will the Gulf be able to recover from the damage, or will it become a gigantic, putrid, dead sea? Is this already known at the highest levels, and did Mr Simmons spill the beans to the public too soon? I hate to see anyone pressured into resigning from their own company, but no doubt the political heat was intense. I could not play that particular video clip, but in other clips I heard him mention nuclear, and although he did advocate the idea of an underground explosion, he did not advocate a nuclear explosion. He may have been the first to publicly refer to Russia's previous nuclear explosions used to successfully stop large leaks. The subsequent over-reaction prevented any serious discussion of the merits of using a conventional underground explosion, if such technology exists. It is understood that a nuclear explosion would render that oil and gas radioactive, and therefore unsellable, therefore BP would prefer to destroy the ocean before conceding to a nuclear solution.
Is it sure about render oil and gas radioactive?
Besides, unsellable for what reason?
Usually, building facilities to recycle nuclear wastes is useless because you can organize the following trade: buy uranium from people and sell them the nuclear toxic wastes to be dumped.
This way, everyone is happy: people who buy uranium, people who get uranium waste in exchange as both get something they get without the other: one nuclear energy and the other a radioactive environment.
Mutual benefit.
unintended consequences .
http://www.youtube.com/watch?v=ddlrGkeOzsI
EURO bullish warnings mentioned earlier, have strengthened today. Vice versa for the USD index of course.
I have detected EURO buying support for several weeks now.
XAUEUR daily chart gives bearish warnings as of today.
This could be an important development.
The proprietary indicators I use in my technical analysis can identify trend changes before they occur.
http://stockmarket618.wordpress.com
GS: anything on topic or just the same ad?
Aw shucks, he was just haven fun...
More to the point on the 8k shares, if Simmons really believes BP is a zero, why doesn't he have a much bigger position (shorter stock or put options)? The fact that it is only 8k short leads me to believe he isn't convinced (I guess to him, losing his reputation is not as risky as losing a couple hundred grand).
Is everyone here totally blind as to who Simmons is and what he does?
Its absurd that people refer to Simmons as an "investment banker" to the oil industry when the man has been anti oil for the last ten years with his entire interest now devoted to alternative energy. He spends his time talking oil down and alternatives up. If that isn't a strong bias, I don't know what is.
Some serious conflict of interests or putting his money where his mouth is.
Nice stuff by the way because it shows how failed certain concepts are.
Division between public/private, politics and economics etc...
BFD! 8k shares with a market value of about $250k. Who gives a rat's ass?
cry me a river. do you see any disclosure when the permabull pundit crew praises the charade of a market to the sky?
This is as blatant an act of 'fomenting' as I've ever seen. It is illegal, disclosure or not (although I dont know of a single case ever being procecuted).
Static Chaos, you really ought to read some of the basic site literature:
http://www.zerohedge.com/content/zero-hedge-conflictsfull-disclosure-policy
The readers here KNOW or at least strongly suspect that MS was short BP. As Rusty said, why the hell WOULDN'T he be?
The general populace has NO IDEA who Simmons is or what he said and why. Asset managers who do not know/strongly suspect that MS is short and rely on his statements exclusively to make investment decisions should be run out of the business on a rail.
What's your point?
Bingo.
This reads like the recent hit piece on Ron Paul ( http://www.washingtonpost.com/wp-dyn/content/article/2010/06/13/AR201006... ).
The guy has based his whole political life on the need for sound money and the dangers of non-redeemable paper ticket currency and somehow it's some kind of dark revelation that he's a goldbug?
F-ing Duh!
Why aren't they writing about all the other congressmen with all their money invested in FRN's and other investments that are dependent on keeping the current ponzi going?
It's ridiculous.
Still waiting for the Washington Post article on the conflict of interest with Fiat $$ and the banking system / Federal Reserve system. They write articles about Ron Paul's piddly flea of a gold investment and ignore the $trillion Titanic in the living room in the Gold vs. Fiat conversation. With fiat raping every man, woman and child of their standard of living day in and day out.
The msm is trying to discredit Ron and Rand both. Both parties are terrified of Rand. If he wins his Senate race, he becomes a contender for the big job.
The problem is that his "outrageous" statements are proving to me more than accurate.
In fact, in 3 weeks time, we could all be saying how conservative Ole Simmo was, being that he is an insider after all.
In addition, he's got the current attention, but can you imagine everyone in the "establishment" havening to Truth out about their conflict of interest every time they take the bully pulpit for this or that? A secret payoff here, a whore there, a job for sonny boy...... real life!
At least his shenanigans are for all to see.
Act III, Scene I aaaaand "CLAP"
Fantasy is finally meeting reality, tellyvision and Internet/Youtube are the contact points and boy, what a story it's turning out to be.
ORI
http://aadivaahan.wordpress.com
8000 shares? Come on - it's hardly "sheep stations" (as we say in 'Straya).
On that basis, a piss-ant like my good self could be accused of the same conflict of interest because I have gabbled about how all the doomsaying is WAY overdone and that BP should tell Obama to go stop posturing and go fuck himself because they never did anything that the government's toadies didn't sign off on.
(I am currently long BP - for the fifteenth time in recent weeks... 600 shares all up, purchased last night after the US open - waiting for the trade that turns from a scalp into a "hold half and swing for the fences").
Obviously I'm not getting my gorgeous 'physog' on the telly though - more's the pity: the wafer-thin sliver of bleached-blonde thin-lipped harridans that make up the CNBC female viewership would have seen what a real fatty looks like.
Cheerio
GT
Yes, make all proclamations like this "illegal". I'm sure we are not far from that point.
You might even set up a hotline at the whitehouse so concerned citizens can report nay sayers.
Twilight in the consultingzone?
The problem isn't him shorting it, the problem is not disclosing that to any and all concerned.
I don't think BP is finished as they can just divest their North American assets.
If he thinks BP is finished, why shouldn't he short it?
That's fine Rusty as long as he discloses it. I called bullshit on this guy two days ago. He's an investment banker from Texas, not an engineer; plus he's a memeber of the Council on Foreign Relations. That's a red alert dewds. He's been doin' the Texas two-step and you fools have been believing hiim. He said that 40% of the Gulf of Mexico covered in oil -- underneath !!! Puhleeeze.
Texas two step, OR putting his money where his mouth is? His short shows he has conviction for what he is saying. Perhaps he was not talking his book, but booking his talk.