Greenpeace’s Exxon failureShortly after last month’s issue of TheEcologist hit the news-stands I got emailsfrom senior Greenpeace staffers on threedifferent continents ‘urgently’ requesting that Iexpose the author of the memo I hadreported as outlining Greenpeace’s exitstrategy from its self-admittedly failed StopEsso campaign.

What struck me about these emails was theconfirmation of my long-held belief thatGreenpeace is an organisation held captiveby its public relations department. No mentionwas made of the merits of the argument. No,the emails were concerned about how thismemo, if leaked to the press, might ‘play’, andwhether or not Exxon would contact me andget a copy of it to help it discreditGreenpeace. As if Exxon, a multi-billion-dollarcompany has time for such nonsense.

So what do I hear coming out ofGreenpeace now? Speaking to me on

Our man on Wall StreetMax Keiser bemoans Greenpeace’s financial naivety, rails at Citigroup’s

daylight robbery, and suggests we fill our boots with carbon credits.

The KarmabanQue (KbQ) Index2004 tracks the share price ofhigh-performing but socially andenvironmentally irresponsiblecorporations, assuming theirshares had been sold short on 1January 2004. A short sale is abet that a trader makes that acompany’s share price will fall.The further the company’s shareprice falls, the more money thetrader makes. Selling short stockshurts corporations because itdeflates their share price, the oneand only language CEOsunderstand. The 10 stocks listedhere are those with the highestKbQ rating on 1 January 2004.

The KbQ rating determineswhere a company appears in theindex, and combines the amount ofdissent directed at a company andits boycott vulnerability ratio (BVR).

A company’s BVR indicatesthe susceptibility of its stockprice to a consumer boycott.Currently, ExxonMobil’s BVR isclose to $1, whereas Coca-Cola’sis closer to $5. Put simply, if Isubtract a dollar of sales fromCoke, that boycott cuts into thevalue of its stock five timesharder than if I were to subtract adollar of sales from Exxon.

For this reason boycotts oughtto target high-BVR stocks like Coke. www.karmabanque.com

STOCK STOCK PRICE FALLsince 1 January 2004

1 Krispy Kreme Doughnuts (kkd) -64.81

2 Ryanair (ryaay) -38.71

3 Clear Channel (ccu) -28.44

4 Coca-cola (ko) -11.90

5 Pfizer (pfe) -7.53

6 Citigroup (c) -4.04

7 Microsoft (msft) -0.26

8 Mcdonald's (mcd) + 8.82

9 ExxonMobil (xom) +12.44

10 Starbucks (sbux) +30.30

INDEX IS UP 13.25%

Investors should be cautious about any and all stock recommendations and should consider the source of any advice on stock selection. Various factors, includingpersonal or corporate ownership, may influence or factor into an expert's stock analysis or opinion.

All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised thatpast stock performance is no guarantee of future price appreciation.

condition of anonymity, a senior staffer said(and I paraphrase here): ‘KbQ’s results mirrorour own internal studies. Coke has been agreat campaign: it took only a few months forthem to back down on ozone-depletingcoolants. Whereas Exxon’s proven to be ahard target that won’t give an inch. I think youridea about targeting only high BVR-ratedcompanies makes sense, and it would save usa lot of grief if we incorporated KbQ’s ideas.’

When I probed further about this, twothings became apparent: one, campaigns atGreenpeace are chosen more for PR valuethan strategic sense; and two, nobody at thepressure group can read a corporate balancesheet. Why bang on about this? Because theFT reported something last week that should,if financial statements were not off-limits toenvironmentalists, be an extremely importantbit of news concerning carbon credits. Moreon this in ‘When greed is good’ over the page.

Krispy Kreme slide continuesObesity provoker and allegedaccounting fraudster KrispyKreme Doughnuts hit a 52-week low this August. I’d liketo see Krispy boycotters takethis one down to single digits.There is some precedence:fellow US confectioner

Starbucks gets whackedCoffee chain Starbucks was flirting with a 52-week high when KbQ re-emphasised its sellrecommendation last month. The stock isswimming against a powerful, global, anti-American tide, not to mention way too

Ryanair in a tailspinCarbon-spewing, wheelchair-hating, budgetairline Ryanair picked up some newcorporate social responsibility risk potential.A new website called ryan be fair (www.ryan-be-fair.org) tracks disgruntled employees and

Interstate Bakeries is feelingthe wrath of anti-carbboycotters who have forcedthe company to warn of the‘possibility’ that auditorscould raise questions aboutits ability to continue as agoing concern.

expensive lattes in the Bush depression.Looks like we were right: sales numbers forAugust came in below Wall Street estimates,and the stock got whacked for 10 per cent.More pain on the downside to come, we think.

their grievances (hey, they want to start aunion). Add to this the potential of higher oilprices for dragging down the firm’s earnings,and we think the stock may yet hit fresh lowsthis year.

TheKaramabanQueIndex

1 2 | T H E E C O L O G I S T O C T O B E R 2 0 0 4

FIN1213 7/9/04 4:05 PM Page 1

Euro Disney Shares in Euro Disney, the US’s proxy onthe Continent, continue to ‘shit the bed’,as we say on Wall Street. It appears thestock’s dive mirrors the rise of animositybetween Europe and the US.

Adding heat to this volatile cocktail ofanimus is the recent trade data showingdirect investment from the US to Francehas dropped by more than 80 per centthis year. Then there’s the Bushadministration’s plans to pull 70,000 free-spending US troops out of Europe andAsia so they can be deployed to the newAmeri-Disney-Saudi Oilworldland in Iraq.

Against this backdrop the unthinkable

Market news

CitigroupHow do you spell larceny? On 2 Augusta Citigroup bond trader working theelectronic trading system known asEuroMTS sold €11 billion worth ofbonds. Prices for the bonds crashed.But then Citigroup traders scooped upbargains, bargains that theythemselves created, and pocketedan estimated €2m profit in less than

5 FREE TICKETS to see Max Keiser live and unplugged on Wednesday, 22nd September 7.30pm @ the Window, 13 Windsor Street, Islington N1 8QG. Contact Stacy on: 07966 223 749

Carbon Credits: ‘When greed is good’The new European Climate Exchange isscheduled to begin trading the world’sfirst futures contract based on carbonemissions later this year.

Governments know that if they are tostop premature, carbon-led humanextinction they have to cap emissions.They also know that they can never getany company to cap carbon out ofsimple philanthropy; simple philanthropydoes not trade on any exchanges: it’s asinvisible as Adam Smith’s hand.

Carbon credits and futures on carboncredits fill this gap in the marketplaceby giving greedy speculators a way tomake bets on greed in a new way. Theidea works like this: emissions are givena financial value and made tradeableon an exchange; the amount companiescan emit is capped, and if companiesdo not exceed their quotas they aregiven credits that they can then sell to

the slow pokes in the class who need tobuy the right to make excessiveemissions.

This makes excessive emissions anot-so-profitable business. And thecompanies cutting down on emissionsand selling their emission credits arehappy to keep doing so because theprofits they get from selling thesecredits are more than they would makefrom emitting carbon in the first place.The powerful force of greed is turned inon itself and turbo charges a trend toreduce carbon – not because it’s the‘right’ thing to do, but because it’s thegreedy thing to do. For example,American Electric Power (AEP) is theUS’s number-one coal-burningcompany. Now, it is chasing renewableenergy projects in Chile and Bulgaria asa way of freeing up carbon credits itcan then sell to its carbon-inefficient

of the cash he made available to help torebuild Ground Zero.

I remember when Euro Disney firstopened: the French called it a culturalChernobyl, and that was the high pointfor the stock. The question still remainswhy anyone would pay to go to ashopping mall surrounded by boringrides, bad food and screaming, spoiled,obese kids, when you can see realcastles, the ones that inspired WaltDisney to create his magic kingdom inthe first place, in the Loire valley just afew kilometres down the road.Recommendation: just sit backand watch this one implode.

starts to become possible: a Euro Disneybankruptcy. Not even Saudi billionairePrince al-Waleed, who has a 16.3 percent stake in Euro Disney, appears readyto ride to the rescue. The rumour is he’sstill hopping mad with the US afterformer New York mayor Rudolph Giulianisnubbed him post-9/11 by not taking any

competitors. As green exchanges expand more

companies will follow AEP’s lead andchase carbon efficiencies as eagerly asthey now chase drilling rights and veinsof coal. Should we care that thesecompanies are not doing this to be‘good’? No. We should only care that theamount of carbon being emitted goesdown as quickly as possible. The ‘loser’in such a system, by the way, will be thelast big company to get carbon-efficient.My guess is that that will be ExxonMobil.

If environmental groups made abasic understanding of financialmarkets more of a priority than goodphoto opportunities, then support forthese new carbon-based financialproducts would spread around theworld, thus ensuring their success. Recommendation: buy carbon credits.

30 minutes. I think I’ll try this trick the next time

I’m in Marks & Spencer. I’ll scream‘fire’ at the top of my lungs, grab afew abandoned trolleys, and then sellthe food I steal for a ‘profit’ acrossthe street.

Citigroup’s name seems to pop upwherever allegations of fraud appear:

T H E E C O L O G I S T O C T O B E R 2 0 0 4 | 1 3

Parmalat, Enron, you name it. Hasanyone considered that maybe theproblem is not these companies, but withtheir banker? And isn’t Citigroup helpingout vivisectionists? That’s what I heard.Recommendation: suggest toanimal rights activists StopHuntingdon Animal Cruelty that Citifinances vivisection.

Looks like curtains for this cultural Chernobyl

FIN1213 7/9/04 4:05 PM Page 2