alt.politics.economics

On Feb 25, 8:15=A0am, "John Galt" wrote:

> Not to butt in on all the fun you guys are having, but my personal interes=
t
> in why the focus remains on the impossible rather than the possible.

I don't understand.

> If you look at what's happening in the capital markets, there are a couple=

> of industry sectors that have avoided the current market pullback:
>
> 1) The hot stocks are the COAL stocks. They've been flying for a couple of=

> years, and continue to increase in price, as they can't get it out of the
> ground fast enough to meet demand.

The problem with free market economics is that it doesn't properly
consider the costs of externalities. I really disagreed with
Clinton's
handling of Tyson's Foods. Even though there was a need for jobs
the costs of providing those jobs wasn't fully considered (they were
discounted.)

> 2) Where's the demand? Well, not in the US or EU, where coal is persona
> nongratis. The demand is in the emerging markets, and anecdotally it's sai=
d
> that 20% of the coal fired plants in India are currently nonproducing
> because they can't ship in enough coal.

OK, maybe the prior comment belongs here. The problem is the focus
in these emerging markets is economic growth. What looks good in the
short term looks bad in the long term but the decisions are made in
the short term.

> 3) Other industry sectors that are flying high? Companies that make the Bi=
g
> Trucks that the open pit coal mines use (take a look at the graph on Terex=
,
> TEX), companies that make mining equipment, and like industries.
> 4) One of Warren Buffet's largest equity investments in the last few years=

> has been in Burlington Northern Railroad. Why? You have to have trains to
> get all that coal to Long Beach so it can get shipped to Asia.

This merely makes us complicit in the badness. It's a sugar fix to
the
problem of tiredness.