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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (6638)	1/31/2004 8:33:18 PM
From: yard_man	Read Replies (3) \| Respond to of 110194

answer the other pt, though -- it is real economic capacity that was brought online with a certain expectation about its longevity, unlike your old car -- shutting the capacity has a undeniable depressive effect -- it is real capital. It won't happen, but if the price of Al were to go up relative to electricity -- those plants would be reopened -- they are by no means technically obsolete. So the analogy with the car breaks down there.

To: russwinter who wrote (6638)	1/31/2004 8:44:19 PM
From: yard_man	Read Replies (2) \| Respond to of 110194

I think when you look at utilization -- you're analogy is just plain bogus. There IS capacity out there that can be restarted if the price of the end product is high enough to offset the input costs. Fertilizer is a prime example. There are plants out there that shut down when the price of NG went high enough ... I don't know how dynamic the situation is, but I am told that if either 1) the price of fertilizer rises enough or 2) NG price falls it'll be brought back online. This is certainly true of other chemicals as well. I have been told that the railroad problem is one of forecasting labor needs -- they over-streamlined -- now they have to hire folks back -- they will probably get some new folks trained in enough time for the coming slowdown ...