Patterico's Pontifications

1/2/2008

Breaking News

Filed under: Current Events — DRJ @ 1:12 pm



[Guest post by DRJ]

Washington Post
:

“Attorney General Michael B. Mukasey announced today that the Justice Department will open a criminal investigation of the CIA’s destruction of videotapes that showed harsh interrogation tactics of suspected terrorists.”

Associated Press:

“President Pervez Musharraf announced Wednesday that Scotland Yard will help investigate the assassination of Benazir Bhutto, reversing his initial rejection of foreign help after he came under pressure to allow a U.N. probe.

Authorities also pushed back parliamentary elections until Feb. 18—a six-week delay prompted by the rioting that followed the opposition leader’s death. Opposition parties condemned the delay but still plan to take part in the elections, seen as a key step in bringing democracy to Pakistan after years of military rule.”

USA Today:

“Oil prices soared Wednesday and briefly hit $100 a barrel for the first time ever, reaching that milestone amid an unshakeable view that global demand for oil and petroleum products will continue to outstrip supplies.

Surging economies in China and India fed by oil and gasoline have sent prices soaring over the past year, while tensions in oil producing nations like Nigeria and Iran have increasingly made investors nervous about supplies and invited speculators to drive prices even higher.”

— DRJ

10 Responses to “Breaking News”

  1. “tensions..have increasingly made investors nervous about supplies and invited speculators to drive prices even higher.”

    Like speculators need an excuse. High prices are more than just a supply and demand issue. Traders can buy or sell oil with just 4 percent down, compared to 50 percent for stocks.

    According to Business Week [11/07/2007], there are 595 hedge funds that engage in energy trading now, more than triple the 180 funds involved just three years ago. They now control assets of more than $200 billion, up more than 60% from the beginning of 2007.

    Just like Enron, people who produce nothing sit in front of their computers and bid up oil on futures. And fears.

    steve (b9b6dc)

  2. Not only is Iran’s output not “declining a double digit rates,” it’s a little over 4 million barrels a day.

    http://uk.reuters.com/article/oilRpt/idUKHOS44924920071204
    http://www.guardian.co.uk/feedarticle?id=7191244

    steve (b9b6dc)

  3. Are you saying that if we let the CIA torture and cover-up slide, gasoline would be cheaper??

    Andrew J. Lazarus (7d46f9)

  4. No, I’m saying I’m very busy today so all you get is one lousy post with all the news lumped together.

    DRJ (29b04b)

  5. Are you saying that if we let the CIA torture and cover-up slide, gasoline would be cheaper??

    No, but if we’d finally get around to plundering it…

    Pablo (99243e)

  6. No, I’m saying I’m very busy today so all you get is one lousy post with all the news lumped together.

    As for “lousy”, no cooties have jumped on me yet that I can see or feel. And, yes, after the holidays you work twice as hard and need a vacation to recover from your vacation.

    nk (5221ab)

  7. Energy hedge funds…
    And, how many of these funds are controlled by our old friend George Soros. This is just the sort of thing he does. He made billions driving down the Pound back in the mid-90’s until the Brits were forced to devalue.
    My personal opinion is that Soros would (if he could, and maybe he can) drive the US economy into a depression if it would serve to humiliate GWB and the GOP.
    Truly someone who does bite the hand that feeds him.

    Another Drew (25a0ac)

  8. Two minor points…oil futures speculation is just that. Speculators make money by going long or short x number of contracts which the commenter correctly noted are highly leveraged. However, it is the spot price of oil which everyone must pay the producers. That is the physical oil price, an aggregated price determined by actual buyers and sellers each day. Futures trading is predicated on physical supply and demand, not the cause of these two. Supply is affected by the controllers of the supply (over 75% of global oil production is under control of sovereign oil companies, not the evil Chevrons and Exxons). Futures speculation, per se, has at most an extremely minimal effect on spot pricing. It’s when the spot prices move that precipitates futures pricing swings. For every trader going long, another trader must sell that contract. Hence, the famous zero sum game description of commodities trading. Futures are ‘bets’ on the direction of future prices, not the physical commodity’s current price.

    Second, The Famous Soros Trade was nothing close to Soros’ genius or Machiavellian evilness (though I couldn’t deny the existence of either of those characteristics with any degree of conviction), but rather the bullheadedness of the Brit’s version of the Fed which attempted to prop up the pound for reasons too entailed for a blog comment. Soros kept shorting (selling) the pound on the open market, while the Brit money boys kept buying the pound, by way of printing more money which in itself decreases a currency [just as is happening to the US$ currently]. The Brits finally ran out of gas, and let the pound fall to its ‘real’ value. I understand that Soros was himself running on fumes to hold his positions, but with other traders piling onto the sell side, the Brits were eventually overwhelmed with sanity.

    All to say Soros, or any trader, does not singly drive down an entire market. It’s always much more complex.

    allan (5cca7a)

  9. Haw Haw – Another Drew must have just seen “zietgeist”, except, of course, the “puppetmasters” are more than just one guy, and they snicker at labels and political parties (well, it’s implied in the movie anyway).

    EdWood (9c41f4)


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