Tony Hayward Before Congress: No Sympathy for the Oil Man

Poor Tony Hayward.

The man was devoured by zombies last week.

Now that we’ve figured out how history works, we’re begging to see the forces of history at work all around us – an eternal fight between the zombies and the producers. We’re surrounded by zombies. They are all around us. Tort lawyers. Bureaucrats. Politicians. Welfare slaves. Chiselers. Layabouts. Whiners.

On the way to work, on the Washington beltway, there are so many lobbyists, we have to put up the windows and lock the doors.

But let’s look at the economy for a moment. Today is the longest day of the year in the northern hemisphere. That means the year is almost half over.

Stimulus measures are winding down…joblessness is creeping up again. Houses seem to be getting ready for another tumble.

David Rosenberg:

There is no denying the renewed decline in the US residential market, and this transcends the end of the tax credits – the sector is fundamentally weak. Moreover, demand has not reacted to the latest downdraft in mortgage rates and homebuying intentions are, in a word, moribund. The National Association of Home Builders (NAHB) housing market index sagged from 22 in May to 17 in June – a three-month low. Buyer traffic receded from 14 to 16 but the real story was the four point collapse in the “future sales outlook,” to 23 from 27 – it hasn’t been this low since the depths of the recession back in March 2009.

We ran some regressions and found that the “future” component does indeed have the best “fit” with both housing starts and new home sales – the latter is set for a renewed 10% in coming months, to a 600k annual unit rate, and the latter by 30% to the 350k level, which would [be] very close to the all-time low of 338k hit in February 2010. Ouch!

Hey, don’t say we didn’t warn you. It’s a Great Correction, not a recovery.

Stocks began last week with a swagger…but by the end of the week, they were barely crawling forward. Gold ran up day after day, adding another $9 on Friday. It looks as though it is aiming for the $1,300 mark.

Meanwhile, the zombies are gaining ground.

Last Thursday must have seemed like the longest day to Tony Hayward.

“Congress mauls BP chief,” is the way The Financial Times put it.

Mr. Hayward was confronted by a panel of zombies in Congress. They chained him to a rock so the members of the energy committee could take turns feeding on his internal organs.

For 7 hours, the BP CEO was asked the same questions, over and over again. No matter how many times he was asked, the answers were always the same. No, he wasn’t an expert on the bonding properties of sub-sea cement. No, he wasn’t there when the rig exploded. No, he didn’t know exactly what went wrong; he was waiting for the results of the experts’ inquiry, along with everyone else.

But the zombies didn’t really care about getting to the bottom of things. They were going for the jugular. And the right arm. And the liver.

From the reports we’ve read, Mr. Hayward held up pretty well. He played his part. He did not wander from the script. He remained calm as he was dismembered. His voice did not quake or complain as his liver was removed.

The politicians on the committee, meanwhile, were disappointing. Even for zombies. Hayward was the straight man. The zombies had the TV audience on their side. They should have made us laugh and cry. But for all their theatrical skills they seemed unable to do more than summon up a worn-out look of mock indignation. Like a man who wants to get rid of his wife and then catches her in flagrante delicto; their outrage seemed more stagey than authentic.

Neither Hayward, nor the leading zombies, Henry Waxman and Bart Stupak, will win Oscars. Still, they mostly performed as you’d expect. Hayward said what he had to say. His tormentors feigned profound concern for the fishes and fowl, the flora and fauna of the Gulf area, not to mention the oilmen idled by Barack Obama.

What disturbed us was the crowd reaction. There was a time when Americans had a sense of fair play. At least, we’d like to think so. In a fight between a group of zombies and a real producer, their sympathies should be with the oil man. After all, when they drive into the filling station, it’s not the Congressional Record that they pump into their fuel tanks. And when they heat their homes, it’s not tort lawyers whom they look to for fuel. Gasoline is valuable. They know it. And they know that someone has to get it. In fact, so keen is their demand for octane, and so high is the price, that the producers are lured farther and farther away from dry land. No one would drill a mile below the water for oil unless a lot of people wanted it badly. Sooner or later, one of the rigs was bound to spring a big leak.

You’d think the public would have more sympathy for the people who risk their lives and their money bringing oil to market.

Bill Bonner
for The Daily Reckoning

The Daily Reckoning