Tuesday, June 29, 2010

Phil Flynn: Is BP Too Big To Fail?

Get ready for the latest BP stress test and a new BP thing to worry about. Reuter’s reports that the U.S. Federal Reserve's New York branch has been investigating the exposure of major financial firms to BP to make sure that if BP can't meet the costs of its spill in the Gulf of Mexico, it won't put Wall Street or the world's financial system at risk. Reuters says that the New York fed, after two weeks of reviewing documents and asking banks about their BP exposure, found no systemic risk, and it hasn't asked firms to alter their credit relationships with BP, the sources said. The New York fed and BP officials declined to comment. Banks that trade with BP wouldn't comment publicly. You are entering a new dimension.

The dimension not only of sight and sound but of the mind and imagination, you are entering land and borrowing and illusion of cutting deficits. Beware you have entered the Euro Zone. The oil market seemed to have one eye on the storm had another eye on the Euro. The Euro really saw some pressure during the session as uncertainty about EU member nations ability to pay back debt became an issue. Dow Jones said the euro fell broadly Monday as worries mounted about financial system strains ahead of the expiry of a large scale European Central Bank lending facility later investors fear a liquidity shortfall. The euro fell to a fresh all time low against the Swiss franc and its worst level since November2008 versus the U.K. pound. It's clear now that.....Read the entire article.


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