The BP blowout in the Gulf of Mexico is one of those unspeakably humongous events that defies explanation or immediate relief. Others include the tangled collapses of Enron or World.com, the bankruptcy of the American banking system or 9/11.
The inexplicable inevitably leads to conspiracy theories, wild speculation and market-oriented manipulations fueled on rumors.
BP is simply the latest subject. Conspiracies range from: BP is victim of U.S. over-reaction to weaken the company and make it a takeover target for the likes of ExxonMobil, to the converse, which is that everyone's covering up a disaster that will ruin the planet.
I recently was sent an email from a long-time and credible friend, which depicted the BP spill as a disaster beyond imagination. It was sent to him from a prestigious hedge fund in Britain whose name I shall not repeat because, as you will see, the email appears to be totally false and misleading.
The sender claimed it was the summary of a "Kremlin Report on BP oil spill." Here goes:
A dire report circulating in the Kremlin today that was prepared for Prime Minister Putin by Anatoly Sagalevich of Russia's Shirshov Institute of Oceanology warns that the Gulf of Mexico sea floor has been fractured 'beyond all repair' and our World should begin preparing for an ecological disaster 'beyond comprehension' unless extraordinary measures are undertaken to stop the massive flow into our Planet's eleventh largest body of water.
It claims that Sagalevich and his scientists went to the oil leak site, invited by BP, because they can do the deepest dives in the world with their special subs, down as far as 19,685 feet. They report that oil leaks are coming from 18 other sites nearly 11 kilometers away from the spill, and two million gallons of oil a day are leaking.
It said they are forbidden from admitting they were there, but their report says the only hope is to "nuke" the well or let the field run dry which could take 30 years.
I decided to check out this email with Tony Knap, one of the world's foremost oceanographers and Executive Director of the Bermuda Institute of Ocean Sciences. I'm a trustee with the Institute and here's what he said.
"Sagelevich is a very credible Russian scientist as is the Shirshov Institute and my good friend [Dr.] Robert Nigmatulin is head of the Institute. I will send a copy of the communication to Robert," he wrote me two days ago. "The Soviets used nuclear devises to close off five wells and this is pretty well known. They were done on land though."
Then he sent me his email reply from Robert Nigmatulin: "Dear Tony. The article on Sagalevich and the Gulf of Mexico is a fantasy of a journalist ("yellow duck"). Yours RIN."
By the way, this doesn't prove that the situation is more dire than BP or anyone is admitting. It just means that the specific details contained in an email being circulated in financial circles around the world just ain't true.
It also means that scurrilous statements are undoubtedly contributing to the doubling of oil future's contracts since the nightmare in the Gulf began.
Diane Francis blogs for Financial Post.