Broking the football

by Jolyon on 23 June, 2010

Overheard outside the Aviva building just now, one broker chatting to another about his plans for the England v Slovenia match this afternoon: “Yeah, I’m just gonna leave my jacket on the back of the chair and duck out.

I expect a lot of that today.

Good luck, England.

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There is an excellent guest post on the Oil Drum with an easily accessible (to the layman) explanation of what went on and what is going on.

It’s good on the nature of the ‘leak’ and presents this pretty graphic image of the ferocity of the escape:

Factoid: If you assume that there is over 5,000 psi of downhole pressure at the BOP–and everything I have heard indicates it is probably substantially higher than that–then a 1/4 inch diameter hole is large enough to “leak” 5,000 barrels a day. That “leak” would probably cut off your arm if you passed it in front of itB

He adds that the fact that there is almost certainly significant sand mixed in with the oil means that there is a ’sand-blast’ effect going on, too, constantly gouging away at the escape site and enlarging it. Not good.

Under the heading “The Politics” (though really it should be “Who’s going to be liable”), he considers who might be in the firing line:

Does BP have culpability because of trying to move too fast? At over $500 a minute, they certainly have the incentive to move fast. We don’t know – yet.

Is Transocean to blame for some sort of negligence in not properly monitoring the mud return or some other aspect of cementing process? We don’t know – yet.

Was Halliburton’s cement job faulty? We don’t know – yet.

Did Cameron International’s BOP fail due to manufacturing or design fault? We don’t know – yet.

Is a combination of one or more of the above? Quite possibly, but we don’t know – yet.

There are unsubstantiated reports that the kick registered over 30,000 psi. If the BOP stack saw that kind of pressure, it could be a important factor, both in determining what happened and how to prevent it from happening again.

I guess these are some of the issues that are going to play out over the coming months and years as people struggle to get to the bottom of the incident and what — and who — caused it.

Not a mention of insurance, though. But then it’s not top of people’s minds. Oh, and there is some perhaps surprising defence of lawyers in the comments to the article. Now that is unusual.

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Deepwater Horizon: how it happened

May 3, 2010

There’s a great, detailed piece about how the Deepwater Horizon incident unfolded and some pretty precise technical reportage on what has broken and how (though it’s a shame the diagrams aren’t there).
As the author says:
this accident is Mother Nature’s wake-up call to everyone. Deep-water drilling is a high-stakes game. It’s not exactly a “casino,” [...]

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Goldman case thoughts

April 26, 2010

Barry Ritholtz at the Think Tank has 10 Interesting Points to make about the SEC case against Goldman Sachs.
I especially like:
7. This is a Complex Case: Again, no. Parts of it are a little more sophisticated than others, but this is a simple case of fraud/misrepresentation. The most difficult part of this case is [...]

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Repo men: Lehman and Ernst & Young

April 21, 2010

Will Lehman be Ernst & Young’s Enron?
That is the question everyone is asking after the publication of investigator Anton Valukas’s report suggesting that Lehman may have used an, um, unusual accounting practice — Repo 105 — to make it look as if its leverage was much lower at each quarter-end that in fact it [...]

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Sprott on lessons unlearned

April 17, 2010

Eric Sprott has an excellent paper on the financial crisis and how we collectively appear to have learned nothing from it.
So where does this leave us for the decade ahead? In bad fiscal shape. It seems as if we’re just making the same mistakes over again, and on a far larger scale. We have passed [...]

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Goldman case just a distraction?

April 17, 2010

Provocative but not wholly unpersuasive slant from zerohedge.Com, who say that Obama is, in true Roman fashion, distracting the people with bread and circuses (well, at least circuses) from the main story:
“For those who care where the real news is, we direct your attention to today’s Daily Treasury Statement, which disclosed that total US debt [...]

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Senator Ted Kaufman on Goldman SEC charge

April 16, 2010

Senator Ted Kaufman Comments On Goldman SEC Charge:
“‘To restore the public’s faith in our financial markets and the rule of law, we must identify, prosecute, and punish with stiff fines or prison those who broke the law. Their fraudulent conduct has severely damaged our economy, caused devastating and sustained harm to countless hard-working Americans, and [...]

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ESI disclosure in practice

March 11, 2010

Public bodies, private businesses and even some individuals now create, exchange and store data and communicate with each other almost entirely by electronic means. The volume of such Electronically Stored Information (ESI), even in small organisations, is immense because of the sheer ease of creation, transfer and storage.
The problem with ESI in litigation
The [...]

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Why ADR can be important in litigation

March 2, 2010

ADR (Alternative Dispute Resolution) is something that the English Courts tend to encourage in the process of litigation. Normally, at least in the Commercial Court, the parties will be required to confirm by the time of the Case Management Conference what steps they have taken to resolve the matter by way of ADR.
In the [...]

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