Friday, May 09, 2014

The Day They Red Dogged Coal

Brian has a short post below describing the first large success has had convincing institutions to disinvest (somewhat like disrespect, a useful word that turns the stomach of the proper) in coal stocks.  As the comments point out this went down a lot smoother because coal stocks are falling like rocks in a frothely rising market.  The smart institutions have taken their losses, the dumber should and if you can get a bit of credit for it, well lagniappe is popular other places besides New Orleans.

The title of this post comes from George Goodman* who died this winter, a writer of the markets with wit and wisdom, whose perception of the madness of crowds and markets puts the wood to the illusion of rational expectations.  If you have not read them, run out and get copies of "The Money Game" and "Supermoney" (readable parts on Amazon).  In "The Money Game" Goodman writes
 That day, September 27, 1966 is going to be one of those days like December 7, 1941, peculiar to history, the day Wall Street stopped believing in anything, at least for that Bear Market, and you can mark it by minutes on the clock, just the way it happens in the diaster books when the water goes gurgling into the Titanic.  September 27 was the day they red-dogged Motorola.
May 6, 2014 could be such a day, with the release of the National Climate Assessment Report and Stanford's disinvestment announcement.  Bunnies may hope.

* Eli might point out to the hard of understanding that Goodman wrote under the nym of Adam Smith,


Hank Roberts said...

As long as Putin, or China, don't snap up the coal company assets at these, er, fire sale prices, it's good. But the value won't be where it should be until the contracts for burning the stuff start to expire, and the value of keeping it in the ground is established somehow.

Hank Roberts said...

Um, you need an update to that chart from 2012.


Anonymous said...

"The smart institutions have taken their losses"

The smart institutions sold at a profit.


Get back to me when Stanford shorts the shares in question .

Dano said...

I agree with Hank and Russell above about the next steps being difficult.

Chris Hayes recently wrote an interesting piece of economic history that used the economics behind the American Civil War to illustrate the difficulty of ending our dependence on a particular form of energy. It just so happens my daughter is finishing a project on the Civil War in school, and we had discussed this very topic for quite some time as she was choosing the angle for her story.

Anyhoo, interesting reading & if you have a few minutes, a good way to look at what's ahead. If you need more motivation, knowing that it has made the right foam violently after reading it should indicate the essay is on the right track.



Steve Bloom said...

If only that violent foaming could be used for household cleansing purposes instead of evil. :)

I doubt the author or very many of the NRO regulars noticed the irony of using an IEA figure in support of such an argument.

Steve Bloom said...

Be serious, Russell.

Anonymous said...

Of course, smart people have been short coal for six months.

And they were short green energy when that bubble was blowing.

Guess Yale beats Stanford here.

Hank Roberts said...

A reminder that we're far from being conservative about energy use:


I fear that if Steve gets any more serious, NRO may ban him too.

Susan Anderson said...

If only it were possible!

How can I bear to be away from Rabett for a day or three when all this is being revealed.

“Eternity?” said Frankie Lee
With a voice as cold as ice
“That’s right,” said Judas Priest, “Eternity
Though you might call it ‘Paradise’”
“I don’t call it anything”
Said Frankie Lee with a smile
“All right,” said Judas Priest
“I’ll see you after a while”
No one tried to say a thing
When they took him out in jest
Except, of course, the little neighbor boy
Who carried him to rest
And he just walked along, alone
With his guilt so well concealed
And muttered underneath his breath
“Nothing is revealed”

Well, the moral of the story
The moral of this song
Is simply that one should never be
Where one does not belong
So when you see your neighbor carryin’ somethin’
Help him with his load