Is the Potash Corp the next Nortel?

[SASKFARMER3]

Their is a great article in McLean's (no I don't really subscribe to it but reading at dentist office) about the hype in commodities and fact that potash is no oil. The article goes on to describe its massive increase in value because of the boom in agriculture but with the down turn in Grain prices was PCS up for a massive crash in value like nortel. Any way its a good article.
What goes up eventually goes back down just to bad grain prices only had a 25 day price rise then retracted some 40%.

[agstar77]

This goes back to the China has stopped buying. It will recover long term.

[bucket]

No I think the cwb will be the next Nortel. PCS will be fine but with the current downturn and china not buying while the cwb falls hook line and sinker for the chinese marketing plan the farmers are going to fed up with their incompetence. Pcs has a strike and the chinese are not buying - its a perfect storm for pcs - lower costs until the customer comes back to the table.

[bduke]

If my memory is correct, Nortel was overstated by balance sheet improprieties. Accounting rules can be very complex regarding future, i.e. booked but undelivered, sales.I think they were including deferred orders, or a large percentage of them in current sales. While it sounds straight forward to people on "cash" systems, accrural rules are often changing to try to account for future sales with current costs, derivitive hedging and speculating,timing of payments, partial deliveries, and contractual defaults....to name a few....Add in Quarterly reporting and Fund investing and the pressure to show growth and profit is enormous.

When their market rapidly turned south, and orders were cancelled, their balance sheet couldn't sustain their inflated value....nor finance their current cash requirments.

Adjustments needed to be made.....sound familiar?.....Bill