The Brightest Stars in the Commodities Boom, Part Two

Wow, what a slaughter in the coal sector on Wednesday, July 2nd, 08, as coal spot price plummeted nearly 10% in one day! I have warned on June 20 that there was something not right in the coal sector. The coal rally has gone too far too fast. The basic numbers of supply and demand does not warrant such a strong coal rally. I warned folks invested in coal stocks to take profit now, and move to other, more bullish commodity sectors. It's been proven correct and timely. Coal stocks peaked on June 23, right after I issued the warning.

Let's survey the damage: James River Coal Company (JRCC) closed at $62.14 on June 23rd, and at $44.15 on July 3rd, a drop of 28.95%; National Coal Corp. (NCOC) went from $10.55 to $6.39, a drop of 39.43%; Patriot Coal Corp. (PCX) went from $145.99 to $126.73, a 13.19% drop; Massey Energy Co. (MEE) went from $93.38 to $75.46, a 19.19% plummet. In one day July 2nd, Peabody Energy Corp. (BTU) dropped 9.3%; Arch Coal Inc. (ACI) saw a 17.2% haircut; Arch Coal Inc. (ANR) slashed 16%; CONSOL Energy Inc. (CNX) -14.6%; Foundation Coal Holdings Inc. (FCL) - 11.7%; Fording Canadian Coal Trust (FDG) - 12.7%; International Coal Group, Inc. (ICO) - 19.7%. What a catastrophe in this whole sector. I believe coal is bullish long term. But there is no fundamental justification for coal price to triple in just 6 months.

Almost all traders focused their attention to NYMEX coal future trade, or Australian Newcastle Port coal spot price, which continues to climb up at scary pace to this day! But on a typical day about 20 contracts for any particular month are traded on NYMEX, with each contract worth 1550 tons. In a typical week about 2 million tons of coal is loaded to ships docked at the Newcastle Port. Those numbers are a drop in the bucket comparing with the scale of global coal supply and demand, which according to BP is over 3 billion tons a year, or nearly 6 billion tons according to other sources.

What people don't understand is that the global coal market is largely a LOCAL market. Shipping coal half an earth away is too expensive and getting ever more so with skyrocketing oil price and extremely tight global dry bulk shipping capacity. Good luck for any major US coal producers to sell thousands of future contracts on NYMEX when the daily trade volume is only 20, or find enough ships to shop the bulk of their production to Europe.

They really can't rip profit from current high spot price either buy selling futures contracts, or by shipping a considerable portion of their coal production overseas. If they do, they merely collapse the NYMEX futures market, or simply drive up the dry bulk shipping rate to sky high levels that force international coal buyers to stay back. Good fortune to the Aussies, though. Producing only 6.9% of the world's coal, they are nevertheless the world's Saudi in coal, with 75% of their coal production exported in the first place.

Global coal exports can NOT expand significantly due to the bottleneck of global dry bulk shipping capacity. The Europeans might be so desperate that they are willing to buy coal at $200 a ton and want to import more. But they will not pay $200 a ton at Virginia harbors. Instead they probably pay $60/ton to Americans and then pay $140/ton to the Panamans (the ships). So if you really believe the global coal export market is tight, sell your coal stocks and buy dry bulk shipping stocks like  Dryships (DRYS), Diana Shipping (DSX). The bottleneck of coal market is NOT coal production, but coal shipment across the oceans. Don't be misled by the coal spot price at shipping ports!

I insist on looking at commodities at their basic supply and demand numbers, and future trend, and how elastic or inelastic the supply and demand responds to price changes. I don't think coal is the best long term commodity play judging from all I see.

In last article I mentioned the spectacular price rally of the PGM metal, rhodium, on a mere 4% shortage. Let's look behind reasons for rhodium's stellar performance as it gives us a perfect example what makes a superstar in the commodities boom. I will then talk about prospect of PGM demand in the auto industry in light of the auto sales drop recently. Finally I will talk about another spectacular minor metal called cobalt.

According to Johnson Matthey's Platinum 2008 Yearbook, annual rhodium supply in 2007 was 822,000 ounces, while demand, net scrap recycling, was 856,000 ounces. The net shortage was only 34,000 ounces, or 4% of the demand. Such an insignificant shortage was enough to drive rhodium price to $10,000 per ounce in 5 short years! So what is rhodium used for, and why it's so price inelastic?

Rhodium has two unique characters among the PGM metals. First, it's the most rigid and has the highest melting point among PGM metals. Second it is the only one that facilitates chemical reactions involving nitrogen, while being the only one strong enough to resist even the nitric acid. These two characters make rhodium virtually indispensible in all its applications.

The biggest demand of rhodium, over 81%, is usage in auto catalyst converters to neutralize the harmful nitrogen oxides (which are responsible for the acid rains) into harmless nitrogen, a role neither platinum nor palladium can play. There is no replacement possible and there is only so much auto makers can do to reduce the rhodium loading. If sub-standard catalyst converter is used, the vehicle may fail to meet the emission control standard after a few years of usage, so replacement will be required and it actually ends up increasing the rhodium demand.

Rhodium is also used as catalyst in a number of very important chemical processes, including the Ostwald Process to produce nitric acid, and the Monsanto Process that produces acetic acid. Nitric acid is the basis of the nitrogen fertilizer industry and a whole family of many chemical products. Acetic acid is the basis for a whole family of chemical products we see in our daily life, including wood glue that holds our furniture together, and plastic soft drink bottles.

Rhodium alloyed with platinum is also used in making high quality glass, including glass used in LCD displays, like computer monitors and big screen LCD TVs. High purity rhodium is made into the crucibles used in the production the high quality optical fibers used in high speed computer networks. The crucible is essentially just a container for the fused glass.

So why must it made of pure rhodium and not any other metals? Because the fused silica materials in the optical fiber used in long distance computer networks are extremely pure and extremely transparent. It's more transparent than even the air. This allows light to travel many kilograms in the optical fiber without much attenuation, enabling long distance communication using the light signal.

In making such material of extreme purity, crucibles made of almost anything would dissolve just a tiny bit into the fused silica, hence induces impurity and renders the material useless. Only rhodium, the toughest of all PGM metals, is perfectly rigid and inert, with very high melting point, and does not induce impurity into the material.

Without rhodium, computer fiber optics networks would not be possible, production of nitrogen fertilizers would not be possible, a lot of synthetic materials would not be possible to make. You look around yourself, 60% of all the stuffs we use everyday have something to do with rhodium in one way or another. Don't you think then such a magical, indispensible noble metal really should be worth more than ten times the price of gold?

Without gold, life on earth goes on and nothing much has been missed, without rhodium, half of the world's population would not survive because there will be no nitrogen fertilizers to boost food production to feed the hungry population. Without rhodium, companies like Monsanto (MON), Agrium Inc. (AGU), Potash Corp (POT), DOW Chemical (DOW) will have to shut down a major portion of their businesses. That's the whole reason why rhodium, at a mere 4% supply shortage, can reach such astronomical price level, $10,000 for one troy ounce.

The lesson from rhodium: A commodity that is in shortage, and that is unlikely to have increased production, and that is absolutely essential and indispensible in critical applications, will likely be one of the brightest stars in the commodities boom.

Most rhodium is produced in South Africa and Russia. But one of my two favorite palladium producers, Stillwater Mining Inc. (SWC) in Montana does produce 4,000 ounces of rhodium a year, and recycles about 28,000 ounces from spent catalyst converters. These are not trivial numbers consider that each 100 ounces of rhodium is worth one million dollars!

I have talked in the past that due to the ongoing South African electricity crisis disruption the supply of PGM metals, platinum and palladium; imminent depletion of the Russian government stockpile of palladium; increasing requirement of these metals in auto catalytic converters; emerging new applications of these metals; more over, due to strong investment demand, platinum and palladium will be extremely bullish in the next few years. The best way of leverage the platinum and palladium bull will be to buy the stocks of North American Palladium (PAL), and Stillwater Mining (SWC).

But first I need to address many people's concern that slowing US auto sales and slowing jewelry demand may hurt PGM metals demand. My viewpoints are that you need to study the details to get the accurate picture:

1. Auto sales in China, India, Russia and other emerging countries are booming and the increase more than offset the shortfall in the US market. China's passenger car sale increased 17% year over year. Combined with commercial vehicle sales China's auto sale now exceeds 10 million unions per year.

The foreign auto sales in Russia are growing at 54% annual rate. GM reported record Q1,08 auto sales in Europe. Looking globally, the demand on automobiles is very strong. You only need to check out recent gasoline price raise to realize the fact that the world has an insatiable demand on automobiles.

2. Customers are increasingly looking to buy small fuel efficient cars, but auto makers do not produce enough of the small cars to meet demand. They over-supplied the market with oil guzzlers but do not have enough small cars for offering. As auto makers adjust their production plans accordingly to meet customer demand, I actually see a booming new car market in the next few years.

The reality of high oil price is forcing many people to retire their oil guzzlers well ahead of time. They need to buy smaller, more fuel efficient cars as replacements to continue to meet their daily commute needs. Simple math! Assuming you drive 12,000 miles a year, keeping a SUV that gives you 15 MPG for the next 5 years costs you way much more money than buying a brand new Prius that gives you 60 MPG, consider that gasoline will go to $5, $10 or even $20 a gallon.

3. There is a myth that higher platinum or palladium price may suppress jewelry demand. Annually the amount of PGM metals used in jewelry is a couple million ounces, or roughly 0.01 grams per person in the world. Clearly platinum and palladium jewelry is NOT for every one. There is only enough metal for the wealthiest 0.08% of the world's population.

Platinum and palladium is mostly for high end jewelry, like bridal jewelry. A typical diamond wedding band set probably cost $5000 or more, and contains maybe 6 grams of platinum. The metal cost is worth about $400, far less than the diamond itself. If the platinum price goes up from $1500 to $2000, it only increases the cost of a $5000 diamond ring by $100. A typical American wedding costs $50K to $100K. A typical Chinese wedding costs $10K to $50K. No one will cancel a platinum diamond wedding ring just for $100 extra cost!!!

4. John Reade did not know that year 2008 is a big Chinese wedding year. As the number of weddings will double, so will the purchase of bridal jewelries. He probably observed how jewelry dealers responded to PGM price changes and concluded that demand in this sector was pretty price elastic.

It's absolutely wrong. Jewelry dealers, like any trader, always seek to reduce their cost, so they tend to double their purchases when the price drops a few dollars, and slash their purchases or even sell some, when the price rally a few dollars. But at the consumer end, the demand is not price elastic at all. At the end of day jewelry dealers will have to buy at any price to meet that consumer demand.

But most analysts missed two big issues on PGM metals fundamentals. One is investment demand on the physical metals. The other is the demand of industrial users to hoard stockpiles to secure their supply, especially in light of tight supply, and that investment demand may squeeze the already tight supply, and even worse, the possibility that some investors might intend to corner the PGM market.

The investment demand on physical PGM metals is very real. One only needs to look at the rapid increase of the physical metal holdings at the ETF Securities. Based on the dollar value of latest holdings of ETF Securities, the percentage of investment interests are respectively: Gold 54.90%, silver 7.78%, platinum 32.54%, palladium 4.78%. Such percentages reflect a very strong investment demand on platinum and palladium, if you consider how narrow the PGM market is in relative comparison to the gold and silver market.

Many gold bugs pitch gold as the best hedge against inflation. My opinion is any physical asset probably can be used as a hedge against inflation, and contrary to common myth, gold is the WORST of all inflation hedges. Just ask the people who bought gold neat the $800 peak in 1980, or people who bought before the peak, but held right through the peak and eventually sold at a loss. In the next wave of gold maniac, it's quite possible gold may actually reach $2000, $3000 or even higher. But do you actually gain in real term of purchase power?

Gold might be useful to people who has too much money to be invested in anything else but gold, because everything else has a market capital way much less than the gold market.

But even Warren Buffett doesn't like gold. He had this to say:

[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Almost every one laughed at Warren Buffett's gold comment. I did at one point. But after giving it some thought, I found that he actually said something in wisdom.

Why humanity continues all the efforts to dig gold out of the ground, when the world has already accumulated enough gold to last a thousand year? Why do we spend all the energy, resources and human efforts to mine something that we already have plenty? It doesn't make sense especially at a time when we are fast depleting our limited fossil fuels and other natural resources. Our efforts could be better spent on producing something that is useful, and that is in short supply.

I would rather buy iShares Silver Trust (SLV) and PGM metals than streetTRACKS Gold Shares (GLD). But now I have found something much better than silver: the metal cobalt. It is rare, in short supply, and the demand is surging due to increased production of batteries used in hybrid electric vehicles, and increased demand on special alloys containing cobalt. I believe this metal will do way much better than silver in the next few years.

If you know a place where folks can buy small quantities of cobalt metal, please share the information with me. I will talk about this magic metal in greater detail in my next article. For now if you are interested in cobalt play, have a look at a stock called OM Group Inc. (OMG), "Oh-My-God," which I first noticed during its run up from $35 to $60. I think now it's cheap to buy.

Disclosure: The author is heavily invested in SWC and PAL, and holds shares in OMG.

Comments

[RossQ]

Wow you really know a lot about this stuff and I have never read anything about this topic before. Thank you for the info. I have to say though, I have owned these stocks early in the year, they came up on my screens, but the charts broke down, and I got out with a small loss, these stocks are in real trouble (matbe not the companies). What will be the catalyst to turn the stocks around? I have found that stuff that isnt working, continues to not work until it does.

[Umm, yeah]

Lol, nice revisionist history, Mark. You were telling us to move money from Coal to Nat Gas, and it took just as big of a hit...

[sharksm]

I love Monday morning quarterbacks. AFTER a huge hit to commodities, our "expert" posts the news to sell coal, etc. Commodities including coal are in a long term uptrend and this sharp correction will be followed with furrther upward momentum. I have been overweight in energy since 1999, and have seen these pullbacks before. While I am most bullish on natural gas ,oil is going to continue to go up in price as long as the rest of the world sucks it up. Asia is adding cars every day and hasn't the natural resources to fuel them. Disclosure: I own 27,000 shares of CHK and have large positions in COP, XTO, EP, WMB, XOM, OXY and numerous oil services as well as pipelines OKS, MWE, KMP, EEP & TPP and coal as well through BHP & NRP.

[SGINSC]

Excellent reading. Thanks.

Ross makes a good point however; those are some seriously ugly charts! There would seem to be no rush to take positions in these stocks. I have added them to my watch list, however, and will track with interest.

[paultaut]

An earthquake hits a major US city. Eveyone bails on All Insurance stocks. All Markets go down simultaneously, not because anything fundamental has changed, but because the Insurance Companies sell whatever they own that is liquid to raise money for the coming Liability Tsunami.

Financial Institutions have their own Tsunami on the near Horizon. They have moved Billions onto Level 3.
But Accounting Regs. have not been changed and "Mark to Market" is looming. How to raise money while saying everything is HunkyDory, Dump whatever you can but be as unobtrusive as possible. Blame the moves in all the Markets on Speculators.

Use rallies in stocks to sell and accumulate hard asset stocks as they drop.

The Bejing area is off limits in China currently because of the Olympics. Once they are over, industrials in the area will restart and commodity consumption will increase. Do not look for a slowdown in reconstruction areas, Earthquake/snow/flood for the foreseeable future.

[schminkie]

cool stuff esp the facts on chinese weddings. these are the things that one needs to know.

wouldn't it be a better idea to buy miners who dig up cobalt than corps that use it? and don't certain major iron and coal miners come up with it almost as a by product or coincidental product 'find' in the course of work?

i still like met coal. for the time being steel has no broadly used alternative. buy dips. sells spikes. make money. don't be bitter.

per dry bulk. i keep asking appropriate parties why loading, unloading and transporting - land, sea - coal is so stuck in the past technologically. no answers yet. however the price 'warnings' mentioned by m.a. are appropriate. companies bid and are frequently happy to take what they can get as opposed to what the wall st journal says they should get. do you ever pick up the phone and talk to these guys? time is money.

ps. congrats on your grammies, m.a.

[ALLA360GUY]

The thing about coal is the price the companies are selling at is growing even as I type. As long as cost stay under control, profits will be up. Until that changes, coal is where to be!

[crimfunk]

Why would you not believe that he added James River Coal Company (JRCC) at $5.00 and sold for a huge profits? His other post called the coal bubble spot on. K-Fine on fast money also called the s/t coal bubble.

[Simple Simon]

Thanks for that Mark/ I learned a lot here. Great hat. I think I'll get me a Hopalong Cassidy one, and join your 'movement'. Hi yo Rhodium; Away!

[GMiki]

Good post though I don't at all agree about gold or even about selling coal. Stay long in coal and nat gas. Coal IS international, not that shipping isn't costly, but one reason South Africa is in trouble is that it sold much of its coal to European buyers. Now it's repatriating its coal and the U.S. is selling to Europe.

You have to hedge against currency collapse with gold. I agree about platinum/palladium/rho... was reading today about another rare and urgently needed aerospace metal that is a byproduct of moly.

[Florin]

Mark, you can buy cobalt from Aldrich (Cobalt pieces, 99.5%, Item #266655) $58.60/100 grams
https://sigmaaldrich.com/catal...

Other sources include Alfa or CERAC.

[User 92184]

My cobalt investment is Formation Capital listed on the Toronto Stock Exchange (FCO). They have a project in Idaho as well as some uranium properties.

[keo]

Thanks Mark, enjoyed reading the piece. Some notes though:

- few (no?) commodities have done any good in the period 1980 - 2000, not only gold performed poorly...we could use that period to bash commodities in general.
- In 1971-1980 Pt went from $90 to 1000$, gold from $35 to 850$. Gold did much better.
- In the period 1999-2007, Pt did 318%, Au 190%, Pd 10%. We found a hedge worse than gold ;). But the PM run is not over yet, we'll see what the future has in store for us.

[Questar]

Three silly errors in this make me doubt the rest of his numbers. First off, Priuses don't get anywhere near 60 mpg. Try around 25% less for current models. The one coming out next year is supposed to crack 50 mpg.

Second, "A typical American wedding costs $50K to $100K." Nope, try around $25K. Still insane, but 50-75% cheaper than listed.

And third, "This allows light to travel many kilograms in the optical fiber...". And I bet it does the Kessel Run in less than twelve parsecs too. Think you meant "kilometers" there.

[Mark Anthony]

Questar:

1. I drive a Prius and regularly get average of over 60 MPG by the time I need to fill up. It's a fact. EPA ratings have under-rated Prius. See the photo on top of my blog article:
stockology.blogspot.co...
That's an average of 66.6 MPG after driving 88 miles. I did not make it up. It's real.

2. I do not know the exactly cost of weddings. It varies from family to family. If my numbers are off it doesn't hurt my argument at all that increased cost of a platinum wedding ring is a tiny portion of a wedding cost. Consider that MOST weddings go without a platinum diamond ring (the world simply does not have enough platinum for every wedding!) you probably need to consider only those families more wealthier and more interested in platinum jewelries, then the average wedding cost is probably higher.

3.I meant to say kilometers. It was a sili typo. Every one can see that it was a typo.

[Mark Anthony]

Dieuwer:

The going wholesale price of cobalt right now is about $42 per pound. So $58.60/100 grams from Aldrich is too expensive. I want to see a price not much more than whole sale and I can buy a few hundred pounds. BHP has cobalt for sale but you need to buy at least 2 metric tons:
cobalt.bhpbilliton.com/

[Mark Anthony]

Johnson Matthey, world's largest producer of automobile catalytic converters, reports GROWTH in their North America market:
www.finanznachrichten....

The actual report is here:
www.matthey.com/media/...

So much is the myth that slowing US auto sale hurts the PGM demand in auto catalytic converter. The fact speaks otherwise.

[Florin]

Mark, the price per unit weight comes down when you order more from Aldrich or the like.
I am in the business to buy rare metals and their salts for your business. We usually buy kg quantities and get much better prices compared to the "catalog price" I quoted above. For fun, I could ask a quote from Aldrich for 1 kg Co.

[Florin]

I mean "I am buying rare metals and their salts for the company I work for"

[Florin]

For few hundred pounds, try ESPI metals: www.espimetals.com/met...

[Msccube]

The author cannot understand the coal market and has not even to study production and consumption of coal in different region.

Australian has produced much coal than it can consume every year since 1997. The surplus increases every year. If Australian cannot ship the coal, what will the Australian do with the surplus? They cannot eat the coal!

The author missed the important point that coal has been transformed from a LOCAL market to a GLOBAL market.

[CoalRunnings]

Disagree with the coal fundamentals changing and prices not being justified tripling in three months. This is may be true for thermal coal. But it does not justify hammering of metallurgical coal stocks. The thing that people have to understand is that there are different various types of coal which caters to different industries. I'll only focus on metallurgical coal and thermal coal. The run up in metallurgical coal was created by steel makers agreeing to prices set by the metallurgical coal producers like BMA (BHP Mitsubishi Alliance)or Fording Canadian Coal. BMA declared force majeure due to record flodding in the Queensland where most of the mines were located including the world's number 1 metallurgical producer owned by BMA. This did not help an already tight supply bottle neck environment. So when it came to contract renewal time with the steel makers, the standard price tripled which raised the industry standard and expectation for the rest of the metallurgical coal producers (but it also fueled momentum for other coal companies whose main revenues were not supplying metallurgical coal to steel makers but supplying thermal coal to utilities. The run in the spot coal price was due to sound offs in India, China, Europe, and US and from utilities not related to steel making and metallurgical coal. The 2008-2009 agreements are already in place so there will be record earnings this year and possibly into next for the metallurgical companies. So for a 12 month play "producing" metallurgical stocks should be fine and should still rise by 30% if not more. It's the 2009-2010 agreements that will be interesting which we will see around April 2009. This will determine if this is truly long term play.

Take a closer look at FDG, TCK, and ANR. I would rather be in FDG for several reasons:

1)It's Elk Valley mine being the second largest metallurgical producer in the world.

2)Before the run up in metallurgical coal prices the company was looking for strategic alternatives including the sale of the company.

3)TCK owns a 29% stake in FDG and 40% of Elk Valley Coal and announced that it was reviewing it's options regarding it's positions in FDG and mulled the possibilities in either selling all, acquiring more, or acquiring all of FDG.

About Rhodium...great angle and I agree in it's upside since the market hasn't fully absorbed the full impact and importance "yet".

[Chrismak]

Mark, your comments on the Prius may be correct but O,m sur thats not real world NY driving. The MPG put out by govt although not usually very accurate are almost always way conservative.

Downhill, wind on your back no air conditioner on etc. I drive a VW 2.0 TDI and if i can keep it under 65 I can get 41 on highway. Now if i drive it at 40 (which annoys the crap out of me and other drivers ) I get 45. Plus i run it on recycled vegetable oil.
Now before you all go off and say blah . blah , blah we all can't run on vegetable oil. The new VW jetta diesel will get 56 mpg real world. No plug in no batteries and runs cleaner than your prius. (bluetec) palladim. LOL
For my buck Quantum QTWW have the best system coming in Hybrids and deals with GM and china to boot.
Yes I own PAL and URRE and QTWW

[GMiki]

Due to horrible winter weather that stopped its own mining in some areas, China was also importing coal this winter. And coal to liquids is certainly an oil-replacement possibility, plus clean coal is a certainty (look at Silverado's demonstration project supported by the state of Mississippi).

[wayne6]

I suspected hybrids were just a bunch of hype until I rented one on a trip. After driving for what seemed like an enormous distance on the first tank, I decided to check the milage. The next tank was mostly slow in city and traffic jam driving, and I got a little over 60 mpg. The third tank was mostly freeway driving over 80 mph, and I got just over 40 mpg.

[RossQ]

K Fine owns Target, and Tesoro. She is a value investor. Not growth or momentum like Pete. Coal stocks found support at the 50 DMA for now if that breaks down you pull out for a small loss. Stuff thats in a trend will stay that way until it doesnt. Take a look at the 5 year $CRX chart we are right at its support. If this breaks I am selling everything related. Ross

On Jul 10 10:38 AM crimfunk wrote:

> Why would you not believe that he added James River Coal Company
> (JRCC) at $5.00 and sold for a huge profits? His other post called
> the coal bubble spot on. K-Fine on fast money also called the s/t
> coal bubble.

[GMiki]

CNX up $4.48 today.

[robc935]

People who claim super high MPGs with the Pious (oops Prius) are using the on-board mileage computer which as is with most computers wildly inaccurate. EPA uses actual fuel amounts placed in the fuel tank and then calculates MPG based on fuel used. Prius's are useful for in-town driving, try passing a truck at Interstate speeds and see how far that 1.6 gas engine gets you. I have an 2003 VW TDI and have gotten 845 miles on 16.1 gallons for a 52.5 MPG average city/hwy. Prious's are a feel-good status symbol that many Americans could never afford.

[leh]

Actually the Prius is/was very affordable for many families up until the recent shortage-inspired premiums were added to the list price of $23-26K. I've seen very used VW TDIs on eBay motors for not a whole lot less than that, so robc's argument about the so-called priciness of the Prius is bogus IMO. And I personally know several Prius owners who consistently get 50-60 mpg (real miles, real gallons) in average driving.

Finally, much as I like the torque and efficiency of a diesel, the new VW Bluetecs may well hit a wall here in the US with diesel @ almost $1/gallon premium to regular unleaded gas in many areas. And I doubt they'll be any cheaper than the Prius (and likely more expensive).

[Nelson_Lai1975]

Mark:

Does the HYBRID car auto catalyst converters require Palladium, Rhodium & Platinum ?

[floridaboy]

Thanks for your Bear outlook on coal (ANR), Mr. overpaid monday morning quarterback. Have you noticed its bounced back, and then some ? Maybe you should transfer bafk to the mailroom ?

You must get your reseach from fortune cookies......

[pachanguero]

Hey cowboy how wrong you are on coal. It came back stronger than ever. Get a real job and lose that cowboy hat. You a foolish looking fool and know nothing about what you speak.

[morgan77]

Wow.. Mark gets ripped apart. Some valid points but I think citations would work to hush all the naysayers.
Here's another article that explains why coal and gold are great buys right now. The coal chart shows that coal has essentially had an inverse relationship with the S&P over the last 100 years. Things look good for coal in the future...
www.greenfaucet.com/tr...

[Nelson_Lai1975]

Mark Anthony Bought my attention to the link between Gold Fusion and Palladium

I indeed found this very interesting updates on Cold Fusion

www.rexresearch.com/ar...

Review it and do D&D for yourself. If the Cold Fusion thing really worked, oil should be back to $50 and Palladium will easily be at $1200

[profound2]

Chrismak,

I want to run on vegetable oil too...or is it a blend of diesel and veg oil (?). Anyway, if you could share some of the details, costs, modifications, etc. necessary to do this, that would be great. Here's an address for contact: profound2_2000@yahoo.c...

[10QDetective]

How long do you think before the discussion on windfall profit taxes shifts from oil to coal on Capitol Hill--given their growing profitability?

industry.bnet.com/ener.../