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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (49914)	5/12/2004 10:58:39 PM
From: elmatador	Read Replies (1) \| Respond to of 74559

ACF I tend to agree with your views on the vanishing "good" old manufacturing jobs have big implications if we take the long view. Economic activities will be carried out where (and by whom)they can be done economically. Manufacturing in China. Equipment repair in Eastern Europe. Call Centers in India and Malaysia. Raw materials in LATAM, Australia, Indonesia, Africa, Russia and Canada. Food stuffs (beef, poultry, soy beans, orange juice, wheat, coffee...) in Argentina, Brazil, Australia, US and Canada. Yes, that's the transition into this new status quo we are facing now. In a transition, the picture is not sharp enough to be understood by the average citizen. Average citizen gets restless. Politicians pray on average citizen restlessness and promise to fix the situation if he gets in power. (Export promotion, subsidies, pseudo-jobs, tariffs, non-tariffs barriers…) But the noise in the back seat should not let the driver take focus off the road ahead. Now for Jay. Not putting my words in Jay's mouth, but the way I look at the whole construct, the present transition points to disruptions that the institutions and the markets' mechanisms are not made to cope with. Look to Europe and you see what I call "industrial nostalgia" like propping up industrial enterprises (right now France's Alstom is a case in point). Witness them putting laws of to avoid uncompetitive take over because a single enterprise will dominate a certain market, a relic of the industrial era. If a parent is planning send a kid to college and spend $80 to $100K for him/her to get a diploma he is no longer sure that investment will translate in a job with a salary. Perhaps the kid would do better coming to Malaysia or Thailand, spend $20K and half year to become a beautician. Then go back and open a massage parlor in the US and might be doing the right thing rather than becoming another graduate in the market to compete for the few traditional jobs that will be available. The US citizen just hope that the Bureau of Labor Statistics is capturing that!!!!

To: AC Flyer who wrote (49914)	5/13/2004 12:12:37 AM
From: Taikun	Read Replies (1) \| Respond to of 74559

<US manufacturing output as a percentage of US GDP remains approximately constant.> The Economist magazine did an interesting piece a few weeks back about how the US trade statistics understate the value added in manufacturing products and services that are sent to India and China because the local input value is calculated, not what was replaced. ie If Amazon can do basic support in India for 1/2 of the cost of a Seattle support person, but the advanced support is in Seattle, the advanced support gets counted at, say, $30,000/yr but the $20,000/yr job sent to India now gets counted at the lower Indian salary, say $10,000 not $20,000. The Economist argues that this makes a relative overstatement of value-added in the US and understatement of the value added in India. Why? Well, next that $30,000/yr job in Seattle will be outsourced to India for $20,000/yr and be counted to India at $20,000 not $30,000 I guess if every job but the CEOs is outsourced to India then all those $10,000 and $20,000 differences between jobs outsourced and the old jobs in the US will roll up to the CEO. Viola, voila, presto: the US CEO does the job of 10,000 people (in India) and that justifies the salary!

To: AC Flyer who wrote (49914)	5/13/2004 8:44:49 AM
From: TobagoJack	Read Replies (3) \| Respond to of 74559

ACF Mike, <<How come you can not see the big picture?>> ... because I see the larger picture you don't want to see. Here is something just sent to me from somewhere by a buddy in a prestigious firm on the artery of gushing money ... The picture is more complex, and there are bright spots, although most of the US economic participants won't get their "fair share." Cash wealth is substantially greater at the top of the pyramid in the US than is widely perceived. I think that we are beginning to see a much more bifurcated US economy, with the "haves" exporting wealth and savings to offshore locales, while the rest (95%) of the US populace continues to suffer from slowly rising taxes and suffocating creep of government social services whose growth is financed by more and more debt. One harsh day in the future, a big chunk of the US populace may just wake up in a new American Buenos Aires with Chinese and Indian hands on the tiller of the year 2100's version of the World Bank. US politicians will then find themselves on the receiving end of condescending and vaguely impatient patriarchal statements about "rolling over the US debt one last time." That should sound familiar to anyone who has paid close attention to the games played around end of empire scenarios, when the former emperors don't quite admit to having no clothes, but all the same the rest of us have a harder and harder time looking at their paunchy naked bodies and listening to their whining about "one more chance and this time I promise I won't piss it away." BUT, while this is all happening over a period of decades, that other 5% of the populace is building more and more gated communities and sending their children overseas to school and accumulating real estate and collecting rent from the greater and greater numbers of the US citizenry who can no longer accumulate the capital required to buy a home because taxes have become so burdensome. That of course leads the top 5% to salt away more and more capital far away from the reach of US tax authorities, by whatever means necessary. This whole trend is nothing new, nothing surprising, nothing more than the natural trend that occurs after a powerful mercantile society has peaked in power and influence and begins to wildly over-extend itself in the vain belief that its previous (and usually outdated) path to success can be exported to other cultures. The effort to create democracy in Iraq smacks of many previous last-ditch efforts by global empires to re-create a faraway place in their own image. Think the Dutch in the South Pacific, the Brits in India, the Spanish in Mexico and South America, the French in Africa, the Romans in Europe and Africa............and on and on back through the mists of time. Often, these ill-fated and expensive foreign ventures have started as an expedition to secure a key natural resource that gets made permanent and justified in the guise of "helping" the local populace to run their joint just a little more efficiently.....until it all breaks down and the [Gai-jin] [gwey-lo] [samurai] [mongols] [turks] [gringos] go home empty handed and slowly realize that they just lost some mind-bogglingly enormous amount of capital that took decades to build and a few short years to dump overboard. So.....the question to contemplate is ...what happens to the 50% of the wealth controlled by the 5% who are lucky enough to grasp the concept of building and preserving capital. If I am right about the broad scenario, then wherever that wealth goes, markets will be skewed by one-sided demand for decades to come. Like Warren Buffett getting out in front of the branded product trend in the US and riding that wave for thirty years..........Gates getting out in front of the need for a uniform computer operating system to build apps on top of........think, my friend and choose wisely. Chugs, Jay P.S. Have you chosen wisely? Do you find that you are inexplicably holding a bag? It is 8:44, do you know what your money is doing? Is ruination ahead?