Special Report: Chesapeake's deepest well: Wall Street

Comments (19)
Vuenbelvue wrote:

This is a incredible story and even with Moody’s downgrade the stock went up when Wall Street has a 6 day down cycle. All the players are so casual about the billions of dollars and cover each other so smoothly even after the stock’s value fell from $75 a share to below $15 a share in 12 months. My first thoughts beside a big “danger” sign (wrapped like a derivative) is that royalties for US earth resources are too low but there is no danger that Congress or State legislatures would ever change that. Amazing theatrics.

May 09, 2012 10:41pm EDT  --  Report as abuse
jesterthejedi wrote:

Oh boy a big bubble is about to burst here.

May 09, 2012 11:44pm EDT  --  Report as abuse
amibovvered wrote:

It’s been a riveting series, to be sure. The mention of “innovations” makes the skin crawl. When will these ponzi schemes become regulated out of existence? Certainly, pension funds should have learned their lesson by now, but apparently not. Fiduciary responsibility is just too old-hat.

May 09, 2012 12:07am EDT  --  Report as abuse
libertadormg wrote:

Enron Oil and Gas

May 09, 2012 12:29am EDT  --  Report as abuse
breezinthru wrote:

I guess I’d like to know whether T. Boone Pickens has money invested in VPP’s and if so, whether he is running his own VPP operation or if he is invested in any way with Chesapeake.

If he isn’t running his own VPP operation and he has no money invested with Chesapeake, then I’d be more than a little worried about the financial footing of McClendon’s operation and Glenn Pool.

May 10, 2012 1:59am EDT  --  Report as abuse
rissey wrote:

Very good piece of journalism. Another MF Global, this time, striking the Commodity sector? Its old fashion factoring with slice and dice thrown in by Wall Street and rating agency as colluders all over again – another subprime in the making when gas prices dive, no real wells of substance to drill, old wells not yielding that much etc…another PONZI.

May 10, 2012 5:02am EDT  --  Report as abuse
Hippauf wrote:

Interesting that while analysts and ratings are downgrading Chesapeake that Jefferies analysts are consistently giving Chesapeake a Strong Buy recommendation

Did you also know Ralph Eads III is on Board of Trustees at Duke University and sitting at the table is Xiqing Gao the President and Investments Director for China Investment Corporation (CIC) which is minority stakeholder in EIG and CHK-Utica deal?

May 10, 2012 5:04am EDT  --  Report as abuse
Gaute wrote:

Glenn Pool – Glenn Core, coincidence?

May 10, 2012 7:05am EDT  --  Report as abuse
Hippauf wrote:

Kathleen McClendon, wife of Aubrey, is 1st cousin to Rep. Fred Upton (R-Mich.)

They have also given a combined $10,000 to Rep. Fred Upton (R-Mich.), the chairman of the powerful House Energy and Commerce Committee, which has oversight over issues central to Chesapeake’s interests. And besides that, Upton is a first cousin of McClendon’s wife — and, according to OpenSecrets.org data, an investor in Chesapeake: in 2010, he held a stake worth between $150,000 and $350,000.

http://www.opensecrets.org/news/2012/05/chesapeake-energy.html

May 10, 2012 7:08am EDT  --  Report as abuse
whyknot wrote:

You can sell almost anything to some people. Who gets paid when somebody loses ?

May 10, 2012 8:38am EDT  --  Report as abuse
Overcast451 wrote:

Why – if it’s Wall Street and Big Corporations is it called “strategy”.

And if it’s some second rate con-man, it’s called a ‘ponzi scheme’?

May 10, 2012 9:19am EDT  --  Report as abuse
WeWereWallSt wrote:

This is a Pulitzer series.

May 10, 2012 10:15am EDT  --  Report as abuse
HalinOK wrote:

The next Oklahoma financial bust seems well prepared by Chesapeake’s “strategies”. I await the news coverage of creditors hauling off McClendon’s wine collection.

May 10, 2012 10:56am EDT  --  Report as abuse
JLWR wrote:

This is just more of the sleazy financial engineering that caused the credit default swap meltdown in 2008 and brought the world to its knees. Enough of allowing the Wall Street thieves to perpetuate this type of shenanigan. The SEC should put a complete hault to any such criminal activity NOW today. Congress should make sure it is stopped immediately. There is no excuse not to stop it effective today!

May 10, 2012 11:55am EDT  --  Report as abuse

Now I know why my royalty checks keep getting smaller and smaller. The Chesapeake entity that extracts the natural gas on my property, sells it at a very low price (lower than market) to another Chesapeake entity. The only ones making any money are the top tier level of crooks.

May 10, 2012 4:03pm EDT  --  Report as abuse
libertadormg wrote:

Reuters, Carrick Mollenkamp and the other contributing reporters deserve a Pultizer for their work on this evolving story.

May 10, 2012 4:29pm EDT  --  Report as abuse

“Glenn Pool” or Glengarry Glen Ross? One refers to natural gas futures in Oklahoma, and the other is swampland in Florida. Sadly, on some level, they probably refer to the exact same thing….

May 10, 2012 5:37pm EDT  --  Report as abuse
Wassup wrote:

It’s only the tip of the proverbial “iceberg.” If you think Chesapeake is the only “smells like Enron operates like a J. P. Morgan hedge” outfit out there, you are more naive than I am. Do I feel secure in my investments with the knowledge that McClendon and Dimon are out there doing these “morphs?” Nah! “Egregious?” You bet’cha……

May 10, 2012 8:44pm EDT  --  Report as abuse
hogsmile wrote:

What’s been powering the near-catastrophic overproduction of natural gas? It resembles the overproduction of easy credit that powered the housing boom during its final blow-off phase (2001-2007) that ended in a colossal bust.

What could possibly be the incentive for such overproduction?

This study makes it obvious. Opaque derivative trading again, distorting normal market supply/demand balances. And it will end the same way that the housing bubble ended: in collapse.

May 11, 2012 3:19am EDT  --  Report as abuse
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