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Weekend reading: John Wayne rhetoric versus Wayne Rooney’s boot

Weekend reading

This week’s worthwhile reads, after a bit of a rant about US political posturing and BP.

England’s World Cup campaign kicks off in South Africa tonight with a clash against the US. Improbably, these two friendly nations who are currently allies in a bitter seven-year war in the Middle East will meet on the pitch with national scores to settle.

The reason for the acrimony is, of course, BP. And the bitterness should be ours.

That might sound odd given that BP is currently gushing oil into the Gulf of Mexico like an England fan relieving himself after seven pints in the first half.

Yet look at the response from the two nations’ players in the drama.

  • BP immediately stepped up to the plate, assuming responsibility beyond what it immediately had to (it only owns 65% of the well, remember, and it wasn’t even the company directly responsible for the accident).
  • It’s launched a massive clean-up campaign and already sent millions of dollars to fisherman affected. It’s attempted to use locals in the clean-up. Compare with the US government’s tardy response to Katrina, or even Exxon’s feet-dragging in Alaska.
  • It’s tried to fix the sodding well! There seems to be a perception in the US that BP executives have been playing bridge and wondering whether to bother, but in reality they’ve gone on a mini-war footing to try to mitigate the disaster.
  • In contrast, Barrack Obama has behaved like a four-year old child.

I agree the odd loose word from CEO Tony Hayward has been bad, but it’s not been inaccurate. The fact is accidents do happen, and if the US is going to keep demanding vast quantities of the world’s dwindling supplies of oil, it makes no sense to castigate a company that has suffered from a freak accident and then done everything in its power to try to put it right.

UK commentators are increasingly pointing out US companies’ dirty oil operations in Nigeria, not to mention the poor record of the US with respect to the Bhopal disaster. The latter killed over 2,000 people and poisoned an estimated half a million.

Most disappointing of all to liberals has been President Obama’s language. He seems to have turned into George W. Bush, ready to ‘kick ass’ and take names.

The US is the most powerful country in the world, and like Rome 2,000 years ago, it requires spectacle to govern. As the Imperial ruler, it also commands a certain hypocrisy – and it’d be fanciful to expect otherwise.

Nevertheless it is also a country that got great on laws about free enterprise, private property, and a healthy view of business and capitalism.

I’d be the last to say industry should get away with anything it likes, especially with respect to the environment, but I’m struggling to see what BP did wrong here other than get unlucky.

If anything, the US regulators deserve the blame for not insisting a relief well was drilled as a precaution. Then again, tens of thousands of wells have been drilled in the Gulf before this accident happened.

Stick it to them Rooney!

Some highlights from the money blogs

From the big boys

  • Let’s hear it for Alistair Darling [Really!]Bond Vigilantes
  • More evidence: he hid £7 billion from Brown – FT
  • BP highlights income fund imbalances – FT
  • How we should cap pension contributions – FT
  • A trust that invests in early stage China – FT
  • CGT fears spurs rush to gold coins – Telegraph
  • BP warns institutions of dividend hold – Telegraph
  • Lloyds launches 5.4% 5-year bond – Telegraph
  • The end of free banking approaches – Independent
  • BP dividend suspension: Not whether but when – Peston
  • Dow and the ‘six bear’ comparison – Money Moves Markets
  • The impact of Eurozone austerity – The Economist
  • Weird: cyclicals outperforming alongside gov bonds – Stock Tickle
  • Does gold belong in your portfolio? – Fama/French forum
  • A 15% yield from German property – Motley Fool

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{ 10 comments… add one }
  • 1 Tyro June 12, 2010, 12:03 pm

    Hear, hear. Of course the deaths of the workers is a terrible tragedy and it’s grievous to see the environmental damage on our TV screens, but hey, folks, the companies CAUSALLY responsible were Transocean, Haliburton, and Cameron …. American companies. And BP (which is not an abbreviation of ‘British Petroleum’) is an Anglo-American company with about as many US shareholders as UK shareholders, so the Brit-bashing is unjustified.

    Let’s not forget too that there’s a regulator in place who is supposed to preclude this kind of thing happening as a result of foreseeable causes, incompetence, negligence, etc, and who has apparently been in the pockets of Big Oil for years. (NB: Not libellous – Obama himself described the regulator as ‘corrupt’.) When political institutions foul up in a democracy the buck stops with its citizens. BP’s actions should certainly be investigated and the company and/or its officials punished for any genuine wrongdoing, but why should it be expected to show more concern for the public interest on the matter of oil exploration than US public officials or citizens have been bothered to summon up?

  • 2 Faustus June 12, 2010, 12:10 pm

    This is what happens when you elect a President materially and experientially unqualified for the job. American arrogance and bluster at its worst.

  • 3 Faustus June 12, 2010, 4:35 pm

    Perhaps I ought to have said ‘underqualified’. As it is, David Cameron is little better, conspicuously failing to put any pressure on Obama to tone down his Anglophobic rhetoric, or behave constructively given the importance of BP for British and American investors and pensioners. This is not a good start.

    Interesting perspectives on Alastair Darling – I broadly agree that he was much more competent than critics suggest. He probably had the toughest brief of any chancellor since the 1970s, and I wouldn’t be surprised if figures this week will show that borrowing will be less than predicted.

  • 4 ermine June 14, 2010, 12:34 am

    I’m with you on most of this, however, the Guardian article you refer to says mess in the Niger Delta seems to be largely perpetrated by Shell, which doesn’t appear to be a US company – from their website

    “Shell is a global group of energy and petrochemical companies. Our headquarters are in The Hague, the Netherlands, and our Chief Executive Officer is Peter Voser. The parent company of the Shell group is Royal Dutch Shell plc, which is incorporated in England and Wales.”

    Looks like the lions share of the mess is being done by another UK HQ company 🙁 To be fair, Exxon are mentioned and 40% of the Niger Delta output goes to the US so they’ve hardly got clean hands…

    I love the analogy with Imperial Rome, as they said in those days Pecunia non olet…
    .-= ermine on: Paul McKenna Says He Can Make Me Rich =-.

  • 5 Andrew Hallam June 14, 2010, 4:57 am

    I still think Obama is pretty cool, overall. Who would rather have George W instead?

    So team—I’ve heard your griping, but if there’s a difference between BP’s current price and true intrinsic value, then shouldn’t you all be commending the public slagging and buying shares instead of whining… if you believe in the business? Exxon would have been a fabulous buy in 1985, after the Exxon Valdez spill, right?

    On another note, from Singapore, (where I live) you Brits might be surprised at how passionate the country appears to be about their favorite team in the World Cup: England.

    Britain still has an invisible hold on Singapore, and their loyalty here (for the British squad) seems a hell of a lot higher than the press’ loyalty in the UK. What’s up with your press anyway? They’re freak’in ruthless on their sporting heroes. I remember, so thoroughly (and I don’t know why I remember this!) but they lambasted Sebastian Coe prior to the 1984 Olympics. It was especially…well..British, the kinds of things they were saying. Then he went on to repeat as gold medal winner in LA, in the 800 and 1500.

    For Green’s sake, I hope he doesn’t listen to the media sports deprecations coming out of the UK. It certainly won’t help England’s chances.

    As a fellow born in Nottingham, living in Singapore, and holding Canadian and British citizenship, I’m rooting for England all the way!

    Now tell me who’s buying shares in BP!

    .-= Andrew Hallam on: How we keep beating the S&P 500 index—by a very wide margin =-.

  • 6 The Investor June 14, 2010, 12:52 pm

    @Faustus – Yes, borrowing from the OBR has come in under expectations, and the outlook over the next five years is down, too. I wonder if Darling is briefing to get a place in the next Labour shadow cabinet.

  • 7 The Investor June 14, 2010, 12:53 pm

    @Tyro – Every time I turn on the TV and hear a US politician speak about BP, they remind me of Russian politicians with Shell a few years ago. Maybe Noam Chomsky had it right all along (i.e. It’s all in the ear of the beholder!)

  • 8 The Investor June 14, 2010, 12:55 pm

    @ermine – Yes, it does mention Exxon as the source of that recent leak. But agree, Shell is in the mix massively in Nigeria. My point was really just the hypocrisy of saying “Not in our backyard” while implicitly saying it’s fine in someone else’s.

    If the US was rising up against oil use altogether and demanding a great shift towards clean energy on the back of it, I’d have more time for their argument. As things stand, it seems spectacularly arrogant and self-interested.

  • 9 OldPro June 14, 2010, 3:39 pm

    BP shares walloping the FTSE 100 en solo this afternoon…. becoming a crisis turned drama.

  • 10 OldPro June 14, 2010, 3:44 pm

    @Hallam – Always good to hear from the old countries… I was out that way many years ago and had assumed it had gone native. Even Australia seems to be turning Californian if not Japanese whenever I visit. Strip malls… sushi.. progress and fair dos, but the Little Englander perspective of Bournemouth in the sunshine is decades outdated.

    As above and like Monevator himself I’ve got enough BP going on in my collectives to risk loading up.

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