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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: faro who wrote (34700)	11/3/2000 9:45:03 AM
From: donald sew	Read Replies (1) of 42787

Faro, >>>> Yet, US sales abroad have been lagging since the $ was so high and US goods became unaffordable for foreigh countries. Don't you think that the negative effect of la low $ for US citizens buying power will be offset by the positive effect of increasing exportation? <<<< Thats a very valid question. However, there could be a large time lag for a dropping dollar to help the U.S. Right now the U.S. is hardly exporting any of the HIGH PAYING CARGOs like MACHINERY/PLANES/etc. Not that the U.S. exports alot of ships, but for example it takes approximately 3 years from time of order of a 3500-4000 TEU container vessel, to the time of delivery. The U.S. is basicly exporting waste right now(waste paper/tin-plate/metal-waste/etc. With a drop in the U.S.DOLLAR you will see an immediate increase in waste paper/metal-scrap/log&lumber/paper products, but these commodities are so cheap. A container of waste paper has a F.O.B. value from $500-$1000 per container, compare to a container of machinery, which could range from hundreds of thousands into the millions, such as military tanks/armament. These higher paying exports take time to ramp up. For example a plane takes around a year or more just from the time of order until delivery. Boeing already lost a big order for SINGAPORE AIRLINEs to AIRBUS, and I believe that is still continuing. Most of the machinery will take several months to over a year from order until delivery. We are not talking about garments/toys/electronics/footwear, which are our common imports. It also takes time for the sales forces of U.S. companies to gain back what they lost, considering that machinery is alot more involved. Keep in mind that technical details have already been shared with non-U.S. companies which is very time consuming and dont forget contractual agreements. A buyer would have to be strongly influence by price by a U.S. manufacturer to regain the biz that was lost already. I had witnessed this problem often when I was in the trading biz. The opposite for our imports. One can basicly change suppliers of gaments/toys/footwear/electronics overnight.

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