From a few years ago, when coal was being pumped...
http://www.321energy.com/editorials/saville/saville021308.html
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Large vertical price rises are always bearish beyond the very short-term because they only ever happen towards the ends of rallies. The coal market will clearly reach some sort of top over the coming weeks, but there is no way of knowing whether it will be a short-term or an intermediate-term peak (it will almost certainly NOT be a long-term peak).
The performance of coal stocks relative to coal during 2004-2006 might be a reasonable indication of what's to come. To be specific, the weekly chart of the Dow Jones US Coal Index (DJUSCL) displayed below shows that coal-related equities continued to trend relentlessly upward for almost two years following the mid-2004 intermediate-term peak in the coal price
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We continue to believe that the stocks of coal-producing companies should be accumulated on pullbacks. And as previously advised, we think Patriot Coal (NYSE: PCX), a US-based coal miner with annual production of around 24M tonnes, has an attractive risk/reward ratio
Throw in a GFC, which popped a LOT of bubbles...and you get
http://in.reuters.com/article/2012/07/16/patriot-bankruptcy-idINL2E8IDK9J20120716
Quote:
In its first year, strong coal prices and demand offset the higher costs of mining in the older coalfields of eastern Kentucky, West Virginia and Virginia. But the recession hit and coal demand fell, sending down prices along with Patriot's stock.
Patriot was able to acquire only one other asset -- a subsidiary of Arch Coal called Magnum.
DEVASTATING DEFAULTS
Then this year, demand sharply dropped when the mild winter depressed electricity use and some power companies switched from coal as natural gas prices made it a more economical fuel.
Patriot responded by cutting its workforce and production, lowering its 2012 sales target to 25 million to 27 million tons -- down from the 31 million it sold last year. Revenue in the first quarter of this year declined 13 percent to $502 million.
With less revenue, the company struggled to pay pensions and healthcare to workers and retirees, while debt repayments on $200 million in convertible notes due next year loomed
Borrow a bucket load of money to make a fortune in a bubble market, and lose your pants ???
Sounds like the EPA pulled that one off masterfully...and messed up retirement savings as far under their control as Europe and Australia.