Hacker Attacks

Chinese hacker attacks are not being reported right and left. First Google, then Yahoo. I wonder if the administration will use this to pursue a trade war with China. My feeling is that most people have a gut-level reaction of anger against hacker attacks similar to terrorists. If this becomes a media blitz to sway public opinion, I would not be surprised.

In other news, the Obama administration has finally priced their moral-hazard bailout protection racket for Wall Street at $90 billion over ten years. In other words, pennies on the dollar. The taxpayers get a couple of pennies, and TRAP will be declared a huge success.

And finally, Obama has given up trying to "sell" ObamaCare. Nobody's talking about it any more. But they're still trying to sneak it down our throats anyway. Our best hope is that the house changes the bill enough that it has to go back to the Senate.

And in economic, not political news, global oil consumption has not rebounded, yet VLCC tanker rates are now at $60k/day, up from $12 last year. My guess is that this comes as a result of a crunch on available tankers for storage. Now the storage can be hedged or it can be speculative. The futures market is still in contango, with the February 2010 contract at $85.50, a 7.7% premium to Feb. '09. If this market goes into backwardation, the specs will have to dump to cut losses, and the price will tumble. U.S. crude stocks recently jumped higher. If the weather turns warmer, this could factor in as well. Unfortunately, this is hard to play. I don't want to buy DUG, because of the built-in time-decay loss. Shorting DIG is impossible, as it is hard to borrow. Option volatility is over 50 for both of them, making them too expensive. I'll just have to watch and see if they settle down. Volatility on USO is "only" about 35, so maybe that will give me a better option.