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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: elmatador who wrote (68410)	11/20/2010 1:39:37 PM
From: prosperous	3 Recommendations Read Replies (2) \| Respond to of 217825

Yes on jobs moving away, my simplistic observations are: -wall street pressure on CEOs to continuously show earnings growth has provided them incentive to find cheapest labor to get the job done, lot of this growth is coming from optimizing bottom line (direct costs) and expanding revenues at the top line from high volume, low cost product segment with lower margins -price driven global competition has always put downward pressure on ASPs and thus the consumer expectation on longetivity of products and its concomittant quality has been on a downward slope -this allows global wage arbitration to be done assuming a reasonable product quality anywhere in the world and is a trend of the future -Now that this wage arb trend is established it will unlikely to reverse unless there are key inflection events which could take place in several forms, relative currency valuation being one -With global wage arb there is huge exchange of inflation/deflation from one geo to another and we are not at an equilibrium point yet, we may get there (Bernake's hope)or may not if we get 6 sigma events, if we do get equilibrium, we could have some averaging effect in the living standards across the world after accounting for resulting inflation. On the other hand, if the experiment fails and we start seeing protectionist barriers/tariffs etc then the global wage arb is done for and we may resolve in unexpected way, the jobs may come back but at an extremely high price still needing adjust ment in living standard in West -Its an interesting movie, but longer than I care to watch, unfortunately they pulled my skin the game by making me watch by putting gun to my head :-), at this point one needs to cover both extremes of resolution of this movie by adequate diversification