The connection between subprime and the BP price is, money.
As this crisis unfolds - and it has a long way to go yet - people, investors, banks, institutions all run out of money. So they sell assets.
When the price starts to fall, people who have not so far run out of money decide it's time to get out while they can, and find somewhere safer. This is causing the flight of money from industrial-type investment to commodity-type investment, which is seen to be a value store. In previous crises the flight has been to bonds, or particular currencies or countries, and in this case it will probably be to precious metals and energy.
So BP will fall, whether it's managed well or not. Almost all stocks will, whether exposed directly to toxic waste or not.
I see there's a load of armchair generals out taking their constitutionals on the board this morning, whacking away at BP. It looks different when you're inside looking out. I'm still putting my money on Tony Hayward rather than Tony Bafoo.
Subprime was a bad decision by the managers of invesment houses who obliterated capital by not lending in a responsible fashion. Bottom line, it came down to inept management.
I'll extrapolate your question by presenting a company example. How is BSC related to BP, bad management.
The market is concerned about BP because of mistakes made around cost cutting by management. I don't have to expound on the mistakes. The senior line of management has been cut and the next line moved up, same genetics as before. The theme is still cost cutting and reorganization, see the recent comments by Tony Hayward in Phoenix in the press, sounded a little desperate to me. Bottom line, bad management screwed BSC and is bringing down BP, but more slowly. Proof: oil is close to an all time high and BP stock has been tanking