What happens to the price of palladium IF the government decides NOT to bail out GM, Ford or Chrysler and one or all of them have to file for bankruptcy by next spring?? I realise that it is probably a long shot when you consider the hundreds of thousands of jobs at stake and that the fact that the democratic party is in the back pocket of the unions, but anything is possible. Especially because I think that Obama is going to want to come out of the gate looking tough on wasteful government spending because I believe he wants the perception that he is not some blank check writing liberal.
Through in the fact that unemployment will probably swell to over 8% before things start getting better, the auto industry's demand for palladium can't be increasing anytime in the next couple of quarters.
Long term, this will pass, and PAL stock will hit over $5-6 within the next couple of years I think. But I wouldn't be loading up at $1.60-$1.70 when I believe there will be chances to get it for $1.10. When PAL is at $1.60, I think you are a lot better off putting money in Freeport, titanium metals, or southern copper and when PAL drops to 1.10, then PAL is the buy.
Think it through. The government will bail them out. They don't deserve to be, as they are bloated and burdened with very high cost labor contracts which will not be broken and products that are very high priced and are no longer in demand. But even if they should go into bankruptcy, their plants and equipment are very valuable, and will be sold to the highest bidder. Another auto company will emerge (let's call it GM II) and it will return to the business of producing cars and trucks. This company will recruit a workforce that will settle for reasonable compensation like most other blue collar workers in this country are paid. The cars and trucks will be produced at a much lower cost, and will again be competitive. The demand for palladium will be higher than ever, as far more cars will be produced and sold as a result of the more attractive pricing. Let's hope that GM fails, as in the long run we will all be far better off. SS
In the long term, the market will work things out, and if GM or Ford went under, obviously one of the Asian car companies or a new american car company would take the place........but you can't tell me that if GM filed for bankruptcy tomorrow, that the price of Palladium wouldn't fall $50 bucks like nothing.
If you think about it, whether government bails out GM is not even relevant.
The global auto indsutry depends on end user demand, NOT depend on individual auto makers. If I need to buy a car I will buy what is available, with or without GM. If I don't need to buy a car today, I will buy none, doesn't matter what brand is out there.
A good analogy is that some 15 years ago, the last American owned TV making company went out of business or be acquired by a foreign company. Do people stop watching TV? No they watch even more TV today.
Frankly I belieev GM should go bankrupt, get rid of the baggages. And then government can provide help to re-organize the company into a competitive auto maker.
I am saying it from one who invests heavily in palladium, and I am not worried about the fundamental demand of PGM metals just because GM goes bankrupt.
Like a bucket of alka seltzer and water or a science fair volcano - PAL will errupt as a MAJOR PERFORMER and the price of PALLADIUM will break out above $360 during January 2009.
Remember, The Legendary Danny O'Doul has opined thusly as recent as the last 2 weeks.
Anybody, not buying PAL here and waiting for a pullback is sorely erroneous.
A couple of years ago ENRON went belly up. Did people stop using electricity?
If GM went belly up, instead of Toyota, it simply means GM simply not competitive. Companies that are not competitive goes out of business. That happens all the time that non-competitive players go out of business.
The market share will be taken over by other auto makers.
I have not bought a GM vehicle for a long time. I decide to buy vehicles on my own transportation needs. Do I stop driving a car to work if GM goes bankruptcy tomorrow? No.
The fundamental need for vehicles as transportation tools will not change because of GM going bankruptcy.
exactly. And also if US decides to avoid foreign oil and starts using natural gas for transportation needs palladium catalysts will still be needed. As I understand it battery driven cars is an option but for larger vehicles and trucks battery driven cars are not powerful enough. I am thinking that maybe the next 2 decades we will see more and more natural gas driven vehicles. Kits exist so you can just fill up your car at home.
not 100 percent sure and of course no link but I belive gm has a deal for paladium thrugh stillwater mines at a set price for the next cople of years..the best thing to get this to pop is if the russians hold back thair big boat full witch i dont think they would wont to unload at a bargain price so who knows...
I am against the bail out even though I know it will happen. Even if Obama wants to take a "tough stance" against excess spending, Speaker of the House Nancy Pelosi will spend this country dry. There is no way they will let a blue state go unrewarded.