US refuses foreign help in BP oil crisis.... WTF

[Jim Richards]

The US gave billions to Greece?

[jyl]

Not hardly.

[Jim Richards]

Must've been on FOX

[widgeon13]

"The "shock and awe" financial rescue package from the European Union and the International Monetary Fund will total euro750 billion ($1 trillion) — money that can be lent to any indebted eurozone nation risking default, and intended to counter investor fears that Spain, Portugal or others could follow Greece in requiring a bailout to meet debt repayments."

Isn't the US a member of the IMF (yes), I'm assuming some portion of the $1 trillion came from good old US of A.

[VINMAN]

Originally Posted by jyl

Why would the US govt bail out a British oil company?

Is any oil company too big to fail? There is plenty of oil currently available, check out storage levels and oil prices. If all of BP's wells shut down, it wouldn't make a big difference to global supply/demand.

WTF does this have to do with bailing out BP??

This is about protecting our coastline and resources and peoples lives. This is going to effect us for decades.

[Jim Richards]

I'm not away of any of the $1T coming from the US. If you can nail this down, I will admit my ignorance.

[Jim Richards]

You're right Vinny. John was just responding to widgeon's assumption that the gov't would bail out BP. Widgeon's made a number of assumptions in the last few posts. Is he right? Dunno. But, you're spot on that the issue is how feked the environment and people's lives are / are going to be by this BP well.

[BGCarrera32]

Originally Posted by widgeon13

"The "shock and awe" financial rescue package from the European Union and the International Monetary Fund will total euro750 billion ($1 trillion) — money that can be lent to any indebted eurozone nation risking default, and intended to counter investor fears that Spain, Portugal or others could follow Greece in requiring a bailout to meet debt repayments."

Isn't the US a member of the IMF (yes), I'm assuming some portion of the $1 trillion came from good old US of A.

Correct. It was rumored to be around $50B. With the Fed's financials effectively unavailable for audit, it was one of the reasons the House recently passed a bill to authorize a 1 time audit of the Fed. I'm not sure where it ever ended up.

[VINMAN]

I may be a Right -wing Conservative whacko, but I'm a tree-hugger when it comes to the outdoors and our enviorment. It enrages me how the Govt. (and BP)is letting this thing get so far out of control.

[Jim Richards]

The IMF contribution is a 3 year LOAN of ~ $40b USD. Of that, $7b USD has actually been borrowed by Greece. US contributes approximately 20% of IMF funding. BTW, even Greece contributes to the IMF.


So, I am ignorant. US has, in effect, LOANED Greece ~$1.4b USD to date, with the total available LOAN of $8b USD, with a 3-year term.

[Shaun @ Tru6]

Government should have no role in this other than to ensure BP is doing all it can to fix the problem and hold them accountable financially for the damage that the Corporation has created. This is a Corporate-made problem due to their own delinquency.

What's it called when a Government comes in and takes over private enterprise?

[The Gaijin]

I think the drillers lobbied and received limited liability (a cap if you will) on environmental costs related to any spill or accident.

They thought this might happen, the government decided it was worth the risk in order to develop these resources and ensure and adequate domestic supply.

Now, I don't think anyone is a fan of BP right now, but you can't change the rules mid stream.

[jyl]

Greece is not getting $1TR or anything close to it. The EU/IMF put together a package of $1TR in potential loans, to get a really big number (shock/awe) that was supposed to convince financial markets that no euro-zone country could conceivably default.

Greece is getting, last I read, something like $150BN. $110BN is coming directly from other European countries. $40BN is coming from the IMF. The IMF is funded by the US, Europe, and many other countries. Each country contributes a certain amount, the US is the largest, those contributions are determined years in advance. That contribution is fixed, the US doesn't contribute more because the IMF is loaning money to Greece and the US wouldn't contribute less if the IMF wasn't. Sometimes the contribution is simply an agreement to make funds available if needed, rather than actually disbursing money.

Historically, the IMF doesn't lose money on its loans. IMF loans are senior to all else, countries in trouble will default or restructure their loans from banks, bondholders, etc before they will renege on IMF loans. "IMF loans have had a stubborn habit of being repaid in full. Although some countries have gone into arrears, almost all have eventually repaid the IMF: the actual realized historical default rate is virtually nil." (admittedly from an IMF document, but I've read the same elsewhere too.)

Sorry to digress, I know this is a thread about the BP spill.
At the same time, countries take IMF loans as a last resort, because the IMF goes in and forces countries to take really painful measures to right their ships. Greece's government budget will be cut, its govt workers and retirees will lose benefits, taxes or at least tax collection will rise, some public companies will be privatized and public asets sold, all deeply unpopular things (among the average Greek) that the govt has been trying to avoid doing. Taking IMF money means the Greek govt effectively gives up much control.

IMF's Greek Bailout: Who Pays? - WSJ.com

Americans do, or should, care about Europe's problems. The recent decline in the US stock market - which hits lots of Americans directly - shows that. This decline is primarily due to market concerns about Europe's debt problems (and about China's overheated RE market and slowing economic expansion). The world economy is tightly interconnected.

[widgeon13]

Originally Posted by Jim Richards

I'm not away of any of the $1T coming from the US. If you can nail this down, I will admit my ignorance.

I'm not trying to be argumentative, I assumed that because the US is a major member of the IMF that some of the $ trillion came from this side of the pond, not just from European members. That was the assumption on my part when I read the article but I didn't do any math to actually see what the US $$ contributed were.

Thanks for the clarification.

[enzo1]

vinman i may be a right -wing conservative whacko, but i'm a tree-hugger when it comes to the outdoors and our enviorment. It enrages me how the govt. (and bp)is letting this thing get so far out of control.

+1

[Jim Richards]

No worries. I spoke, well, typed actually, before looking into the details of the IMF contribution to Greece. We are helping out Greece, with a loan, as a member of the IMF.

[The Gaijin]

Back to BP:

Key senators call for lifting of oil liability caps - CNN.com

Love 'em or hate 'em. We are not a banana republic. I think..

[flatbutt]

frankly I wouldn't care if DEME has the answer or not, their experience might trigger another idea or maybe they'd just ask the correct questions that lead to a solution

[jyl]

Originally Posted by VINMAN

I may be a Right -wing Conservative whacko, but I'm a tree-hugger when it comes to the outdoors and our enviorment. It enrages me how the Govt. (and BP)is letting this thing get so far out of control.

It is maddening, but I don't actually see what the govt is supposed to be doing different?

The federal and state govts don't have any expertise, equipment, experience to cap blown-out oil wells 5,000 ft underwater. The oil company(ies) are the only ones who can do this.

The federal and state govts could flood the coastline with workers and guardsmen. But 20,000 or even 200,000 people in white suits cannot stop oil from coming ashore with the currents. The ocean is way more powerful than we are.

So the remaining thing that the govt can do is keep whipping BP to work harder and faster, I think they are doing that, and to change regulations and laws to reduce the chance of this happening again, which they are trying to do (6 month moratorium on new drilling) while at the same time the "drill baby drill" crowd is still pushing back:

From a news story -

Sessions, however, also tried to turn the focus of criticism to the Obama administration, attacking the White House's decision to implement a six-month moratorium on deepwater drilling.

The offshore drilling industry is responsible for nearly 200,000 jobs and $13 billion in annual non-tax revenues for states along the Gulf Coast, Sessions said. Offshore drilling in the Gulf accounts for 30 percent of America's domestic energy production, he noted, and most of the drilling is done at depths of over 1,000 feet.

Deepwater drilling is important to our "economy, jobs, and national security," Sessions said. He urged the White House to accelerate an ongoing review of safety procedures in order to allow for a more rapid resumption of drilling.

[Shaun @ Tru6]

it's really a catch-22 for the Government. assuming the Government even had the capacity to physically cap the oil line, if they had stepped in on say day 5, pushed BP out of the way and fixed the leak, all we would have heard was shrill screams of SOCIALISM and GOVERNMENT TAKEOVER OF THE PRIVATE SECTOR.

Reality is that Government can only tell BP to fix it, and then, as expected, get blamed for BP not fixing the leak.