Long BP, Short Obama

Long BP: because BP is currently trading below book value. As the Huffington Post put it yesterday, it is worth more dead than alive.
I consider this market valuation the result of a panic selling, a consequence of the media and Barack Obama's focus on BP as responsible for the oil spill.
And they might be partly right: it might be that BP is responsible for the mistakes that caused the spill. But the question is: how much will this cost to BP at maximum?
Considering that BP currently makes quarterly profits in the magnitude of $6 billions, they have plenty of room to "make it right".

I think there is currently a mob hysteria against BP that will have to calm down at some point. The hysteria might not have reached its climax yet: there could be a total boycott of BP gas stations, etc.
There could be a worsening of the oil spill, dozens, hundreds of law suits, etc.

But can we live in a world where hysteria goes on so far? If BP is brought down, there will be many negative consequences: will oil companies continue deep water drilling after the events of the last months? What will be the legal protection they will have? What will be the implications on the cost of the barrel of oils?


There were already several bad oil spills in the past, and the fact that we have a new one in deep water (which makes the fix so complicated) is the consequence of:
- the world addiction to oil,
- a depletion of oil sources in dry land and low water locations.

We want the oil, and BP was there to get it. Yes, they did a big mistake. But sooner or later somebody was going to make a mistake in one of the dozens or hundreds of deep water wells.
Obama should be careful not to go too far after BP because this fight might very well haunt him in the future.
There is a lot of hypocrisy in going after BP, and not blaming ourselves for wanting the oil, but not the spills that it might cause. We should know by now that oil spills are a part of this human activity.
Once people calm down on their witch hunt, they might look back in the current time and judge that Obama only played a role as a witch-hunt follower, rather than a wise leader.

If we truly want to protect the environment, I think we should acknowledge our addiction to oil and its risks and impacts on the planet. And we should acknowledge that we all have a responsibility in the oil spill, not just BP.