BP and Obama

[s2art]

Saw this, any comments on its accuracy?

SHORT & SWEET... BUT, IT IS A GREAT EXAMPLE OF O BA MA'S SKILL...

It seems like a miracle that our beloved leader was able to convince BP to establish a $20 billion slush (oops, escrow) fund to compensate those hurt by the ongoing oil plume in the Gulf of Mexico . After all, he had no constitutional power to force them to do so; so resorted to Chicago-style negotiating.

But, let us take a closer look at the effect on BP's finances:

1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

2. BP is a British corporation, but has a very large operating entity in the US but only about 30% of it's income is derived from the US .

3. By Generally Accepted Accounting Principles (GAAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

4. Our dear leader also convinced this massive corporation to show their concern for the "small people" by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount
to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We
won't even discuss the effect on the US economy.

Let us put the results into a table easily understood by the small people (including me):

BP Cash Flow:

o Escrow funding ($7 billion)

o Dividend saving $7.5 billion

o Tax savings $7 billion

o Net favorable cash flow : $7.5 billion


US Treasury Tax Receipts:

o BP Corporate income tax .... minus $7.5 billion

o BP Shareholders ..... minus $0.45 billion

o Net unfavorable tax receipts ..... minus $7.95 billion

I guess we really should expect this. After all, our dear leader is the most inexperienced man in ANY room he enters.

Now tell me... Did the enlightened one "Kick Ass", or did he get "Sucker Punched"?

This is just one more reason why a 'community organizer' should NOT be negotiating anything dealing with money and finances!

Bottom line: The $20 billion BP is putting up will create a $7.5 Billion positive cash for BP flow this year. But, Obama actually "thinks" he really did something special and "kicked ass" (in his own words).

In reality, BP executives are laughing at him and "kicked his ass". Oh well..what's new with this President anyway??? He is in over his head when he starts dealing with "business people".

[s3fella]

So they are 7.5 bn up on cashflow this year, but have put through the whole 20bn as expense this year, and still owe $13bn?

Sounds like they are still down on the deal..

[Blue Meanie]

What do you think SHOULD have happened, S2art?

[s2art]

Blue Meanie said:

What do you think SHOULD have happened, S2art?

Should? For starters Obama should have spent more time helping the situation rather than shouting at BP. But that wasnt my point, the question was, is that summary accurate?

[Blue Meanie]

s2art said:

Blue Meanie said:

What do you think SHOULD have happened, S2art?

Should? For starters Obama should have spent more time helping the situation rather than shouting at BP. But that wasnt my point, the question was, is that summary accurate?

Well, it has been floating about for a few months now, and never really got any attention, as far as I remember. It doesn't really matter what happens to BP, as long as the folks down South get their 20 Billion, and whatever else is needed by them.

[Victor McDade]

If the $20 billion is a fine/penalty then it won't be tax deductable.

And if it's not a fine then are they legally allowed to book the $20bil before they actually pay it?

Edited by Victor McDade on Tuesday 21st September 20:23

[s2art]

Blue Meanie said:

s2art said:

Blue Meanie said:

What do you think SHOULD have happened, S2art?

Should? For starters Obama should have spent more time helping the situation rather than shouting at BP. But that wasnt my point, the question was, is that summary accurate?

Well, it has been floating about for a few months now, and never really got any attention, as far as I remember. It doesn't really matter what happens to BP, as long as the folks down South get their 20 Billion, and whatever else is needed by them.

It actually does matter what happens to BP. For starters if that summary is correct then BP are only out approx 6 billion. Which means their share price is seriously undervalued. Not to mention that BP will be trying to claw back much of that from Transocean etc.

[Blue Meanie]

s2art said:

Blue Meanie said:

s2art said:

Blue Meanie said:

What do you think SHOULD have happened, S2art?

Should? For starters Obama should have spent more time helping the situation rather than shouting at BP. But that wasnt my point, the question was, is that summary accurate?

Well, it has been floating about for a few months now, and never really got any attention, as far as I remember. It doesn't really matter what happens to BP, as long as the folks down South get their 20 Billion, and whatever else is needed by them.

It actually does matter what happens to BP. For starters if that summary is correct then BP are only out approx 6 billion. Which means their share price is seriously undervalued. Not to mention that BP will be trying to claw back much of that from Transocean etc.

So you are more concerned with punishing BP, than you are with getting aid to the Southerners in the st? Why does it matter if BP have some loopholes to play with? The 20 Billion was not a fine, remember.

Edited by Blue Meanie on Tuesday 21st September 20:58

[s2art]

Blue Meanie said:

s2art said:

Blue Meanie said:

s2art said:

Blue Meanie said:

What do you think SHOULD have happened, S2art?

Should? For starters Obama should have spent more time helping the situation rather than shouting at BP. But that wasnt my point, the question was, is that summary accurate?

Well, it has been floating about for a few months now, and never really got any attention, as far as I remember. It doesn't really matter what happens to BP, as long as the folks down South get their 20 Billion, and whatever else is needed by them.

It actually does matter what happens to BP. For starters if that summary is correct then BP are only out approx 6 billion. Which means their share price is seriously undervalued. Not to mention that BP will be trying to claw back much of that from Transocean etc.

So you are more concerned with punishing BP, than you are with getting aid to the Southerners in the st? Why does it matter if BP have some loopholes to play with? The 20 Billion was not a fine, remember.

Edited by Blue Meanie on Tuesday 21st September 20:58

Nope, I am more concerned with if BP are a good share to buy.

[Blue Meanie]

Well, considering the thing you copied and pasted is at least a few months old, it should already have had an effect on the share price.