It’s totally reasonable and inevitable that the share price of BP would suffer mercilessly from the company’s gargantuan liability in the Gulf of Mexico. Earlier this week I created the following chart of BP’s daily closing share price for it’s U.S.-listed shares.
When Interior Secretary Ken Salazar opined publicly that the company ought to be responsible for all unemployment claims related to the federal government’s six month moratorium on offshore Gulf drilling, BP’s stock took an especially nasty dive to a 14-year low on Wednesday. I hope that the Obama Administration’s efforts to turn public opinion back in the president’s favor on this mess don’t backfire and kill what this country needs to be the proverbial “Golden Goose” for the next several years. A heavily-regulated and monitored BP – in a strong financial position – is the company that will be able to afford the tens of billions of dollars needed to make the people and environment of the Gulf Coast whole.
One hears a great deal about just what it will take for the U.S. stock market to rally and head on to another leg up from the March 2009 lows. Along with a Chinese soft landing, stabilization of the Eurozone, and passage of FinReg, there is a constant and well-deserved preoccupation with U.S. employment. The last two releases by the federal government – May unemployment and today’s weekly claims number were either bad or lackluster, depending upon your disposition. For some reason tonight, I thought to take a look at the Mass Layoff numbers for the last five years — I wanted an idea of whether or not the big layoffs, such as plant closings or major downsizings were subsiding since what was probably the peak of the recession in early 2009.
As you can see, in March 2009 Mass Layoff Events hit a peak just as you’ll remember the stock market bottomed. Unfortunately, they are ticking up once again – and the market is in the midst of several weeks of volatility. I’m not making a direct cause and effect statement here, but I am wondering if this employment statistic, along with the other dreary numbers, supports one argument out there that the growth we’ve experienced has been merely the restocking of depleted inventories.