Coal: Capped and Spayed

Once again we find Coal at the bottom of the stack in this week’s sector performance update. With Cap & Trade passing the house and the Senate sure to pass something too, Coal should make itself comfortable down there. After all, President Obama himself said his Cap & Trade policy would necessarily bankrupt coal companies and drive utility bills up. Much like Europe has tried to do, unsuccessfully, this administration is hell bent on driving the cost of fossil fuels up so that windmills, solar panels and whatever riles the imagination will be almost as cost effective as our current energy infrastructure. We just hope they put those Obama stimulus stickers on everybody’s energy bill so Americans know who is to blame when the cost of cap & trade hits your mailbox.

Here are the past week’s top and worst performing sectors:

Performance versus the S&P 500

Rank	Industry	% Return +/- the S&P	% up/down
1	NONFOOD RETAIL-WHOLESALE	5.15%	4.88 %
2	CONS PROD-MISC STAPLES	4.84%	4.58%
3	DRUGS	4.80%	4.54%
4	POLLUTION CONTROL	3.96%	3.70%
5	TELECOMMUNICATIONS SERVICES	3.41%	3.15%
6	COMPUTER SOFTWARE-SERVICES	2.94%	2.68%

Here are the week’s poorest performing industries:

Performance versus the S&P 500

Rank	Industry	% Return +/- the S&P	% up/down
59 of 59	COAL	-2.52%	-2.77%
58	AEROSPACE-DEFENSE	-2.17%	-2.41%
57	OIL-EXPLORATION&PRODUCTION	-1.83%	-2.08%
56	OIL MACHINERY-SERVICES-DRILLING	-1.62%	-1.87%
55	MEDIA	-1.44%	-1.69%
54	OIL-INTEGRATED	-0.88%	-1.13%

This week our technical analysis of industry stock charts only managed to find 1 new buy signal, Personal Products Stocks, and 1 new sell signal, Footwear Stocks.

Comments

[Mad Hedge F...:]

Not soon enough. I wanted to get the low down on clean coal, a political hot potato in the energy sector, so I visited some friends at Lawrence Livermore National Laboratory. The modern day descendent of the Atomic Energy Commission, where I had a student job in the seventies, the leading researcher on laser induced nuclear fission, and the administrator of our atomic weapons stockpile, I figured they’d know. Dirty coal currently supplies us with 50% of our electricity, and total electricity demand is expected to go up by 30% by 2030. The industry is spewing out 32 billion tons of carbon dioxide (CO2) a year and the global warming it is causing will lead us to an environmental disaster within decades. Carbon Capture and Storage technology (CCS) locks up these emissions deep underground forever. The problem is that there is only one of these plants in operation in North Dakota, a legacy of the Carter administration, and they cost $4 billion each. The low estimate to replace the 250 existing coal plants in the US is $1 trillion, and this will produce electricity that costs 50% more than we now pay. And while we can build a wall to keep out immigrants, it won’t keep out CO2. This is a big problem as China is currently completing one new coal fired plant a week. In fact, the Middle Kingdom is rushing to perfect cheaper CCS technologies, not only for their own use, but also to sell to us. Since it appears that Obama is not willing to wait on anything, expect to hear a lot of sturm und drang about CCS this year. For proof of this, look at the chart of coal prices. While competing crude has had a good year so far, coal has been dead as a doorknob.

Jun 30 01:26 PM

[Chad Brown:]

So, what did your friends at Lawrence Livermore Lab say? Is clean coal an oxymoron? Or do they think it can be viable in a relevant time frame? Your post does not tell what which is your view and what your friends said....


On Jun 30 01:26 PM Mad Hedge Fund Trader wrote:

> Not soon enough. I wanted to get the low down on clean coal, a political
> hot potato in the energy sector, so I visited some friends at Lawrence
> Livermore National Laboratory. The modern day descendent of the Atomic
> Energy Commission, where I had a student job in the seventies, the
> leading researcher on laser induced nuclear fission, and the administrator
> of our atomic weapons stockpile, I figured they’d know. Dirty coal
> currently supplies us with 50% of our electricity, and total electricity
> demand is expected to go up by 30% by 2030. The industry is spewing
> out 32 billion tons of carbon dioxide (CO2) a year and the global
> warming it is causing will lead us to an environmental disaster within
> decades. Carbon Capture and Storage technology (seekingalpha.com/symbo...)
> locks up these emissions deep underground forever. The problem is
> that there is only one of these plants in operation in North Dakota,
> a legacy of the Carter administration, and they cost $4 billion each.
> The low estimate to replace the 250 existing coal plants in the US
> is $1 trillion, and this will produce electricity that costs 50%
> more than we now pay. And while we can build a wall to keep out immigrants,
> it won’t keep out CO2. This is a big problem as China is currently
> completing one new coal fired plant a week. In fact, the Middle Kingdom
> is rushing to perfect cheaper CCS technologies, not only for their
> own use, but also to sell to us. Since it appears that Obama is not
> willing to wait on anything, expect to hear a lot of sturm und drang
> about CCS this year. For proof of this, look at the chart of coal
> prices. While competing crude has had a good year so far, coal has
> been dead as a doorknob.

Jun 30 07:10 PM

[AntonioSosa:]

Lies, manipulation, intimidation and bribes were used to force the House to pass Obama’s economy killing bill!

House members were not given time even to read the bill! Obama and his accomplices thus trampled on our human right to be represented and defended by our Legislative body.

Obama’s Cap and trade is another giant step towards Marxism — and the corruption, poverty, enslavement, destruction and despair that Marxism entails.

Obama is working much faster than Hugo Chavez at destroying the economy and imposing Marxism. No wonder the Russians are gloating:

From Pravda: “…the American descent into Marxism is happening with breath taking speed, against the back drop of a passive, hapless sheeple, excuse me dear reader, I meant people…” english.pravda.ru/opin...

We must do whatever is necessary to defend ourselves and our children from from Obama and his accomplices.

Jun 30 09:16 PM

[Spartacus t...:]

why anyone would buy a US coal company right now (or wonder why they're underperforming the market) is beyond me.

I'd suggest CHGY or PUDC for emerging China coal companies that will double by the eoy.

Jul 01 08:58 AM