SubscribeChina Conspiracy Continues
August 15, 2007
Well, if you are still unconvinced about a convert and concerted effort by US manufacturers and/or our government against China, take a look at these few items that hit the news today..Do I sound paranoid?: (also see previous post on TDI)
COMMENT on this please on what you think….Look for Poll on this later
New York Times Slideshow of China Recalls
The China Syndrome – Fact or Fiction?
August 14, 2007
The original movie, The China Syndrome, starring Jack Lemmon was a “fictional” story about one man’s mission to stop a nuclear catastrophe from occurring. The title refers to the taunt concept of an American nuclear plant meltdown that will dissolve everything in its path until it eventually reaches all the way to China.
One wonders if we are witnessing a political and financial firestorm that will help to create a modern-day economic China Syndrome. As manufacturers looked to save money, they found an amazing opportunity waiting in Asia and have now created an economic monster that may be looking to eat its creator.
“Dangerous products and demi-corruption, spreading eco-crisis…can China be fixed?”, are the opening comments from a recent Business Week “Cover Stories” Podcast. Tainted seafood, poison paint, fatal toys, crunchable cars, toxic toothpaste and even failing tires are the most recent headlines we are seeing in the news on a daily basis. Combine this with poor regulation and oversight within China due to political ladder-climbing which focuses on quantity over quality. There is also a high degree of nepotism at the local levels that has allowed for quality assurance to be a reduced priority.
The wealth that this has created by exporting and manufacturing to the consumer markets is amazing. These exports are largely the result of foreign investment by the world’s multinationals. Herein is the concern – will the companies which are providing the mechanism for growth by using cheap China labor and manufacturing look for other alternatives as they see growing fear over Chinese made products?
One wonders who is really at fault. Here is the question that needs to be answered: Is it the lack of a legitimate and honest regulatory environment within China or is it the push to reduce costs by the multinational companies that are pressing Chinese manufacturers and suppliers to cut corners in order to keep costs down. (and ultimately profits up)?
So, is an “economic” China Syndrome possible? As we see the continual headlines that are showing product deficiencies and even deadly ingredients, consumers will undoubtedly boycott anything that has Chinese labeling.
According to CIA World Factbook and the U.S. Census Bureau – Foreign Trade Statistics, the United States is the number one importer of Chinese goods. At the top of the list are computer accessories, household good and toys. The companies that produce and sell these products to US consumers will have to quickly reevaluate their desire to utilize Chinese components in the light of the recent discoveries. At this all important time of back-to-school and holiday shopping, there will surely be a major outcry and a knee-jerk reaction that creates a BUY-AMERICAN movement.
Now, far be it for us to look at any of this from a conspiracy angle. But for the fun of it, let’s speculate. Could this be a master-plan that utilizes a coordinated governmental attack on the Chinese manufacturers? The timing is curiously close to the heightened economic tensions between China and America. If this were the case, it would make sense that the reports of tainted products will reach a crescendo up until China caves in and agrees to Washington’s demands. Then, the reports will surely come out about the new and improved product oversight and the eventual sounding of the “all clear” signal.
Back in May, 2007, Chao Wang, an assistant government minister led a trade delegation to and discussed the trade imbalance issue with the USA. He said, “For the interest of both our countries, and the people, and for the benefit of every state in the U.S., cooperation must remain as the mainstream,” At that time, he also hinted that he was beginning to feel the effects of “trade protectionism.”
So, if there were dark forces at work, the argument for a covert operation to increase the worries of consumers who are continuing to ravenously purchasing goods manufactured in China would be a great idea. The effect could be easily regulated and timed to create an atmosphere ranging from concern to hysteria. The economic effect of this could cause a virtual shutdown of Chinese imports. This approach will not be viewed as a governmental move that begs for retaliation. Rather, it will be a slower process brought about by the consumer rotating away from Chinese products.
The end result would be a natural reduction of the trade deficit and the eventual need for the Chinese government to realize that they are not invulnerable. It will also require other companies to re-evaluate their decisions that allowed them to be exposed to risks associated with the lack of diversification. It also brings up another interesting point: who is the ultimate beneficiary?
If the trade deficit is reduced, does that mean that companies will look inward for domestic suppliers and manufacturers? Or, is it more probable that they will seek out other emerging countries that have the capability of providing inexpensive labor that will be more cooperative and attentive to US interests. (India, Mexico, Eastern European Block countries)
As conspiracies go, this one, if taken to the extreme would effectuate an economic China Syndrome. If we cause a meltdown of imports from China, they could see an economic disaster that would affect millions.
But, that is just a fictional account of the situation. Odd as it seems, I am sure there is a good explanation for the timing on all of the recent Chinese related recalls and warnings. It is probably the result of the fact that I am in the middle of reading, Confessions of an Economic Hitman….
Rediff.com is Ripe
July 17, 2007
As Charles Dickens said: “Ain’t I volatile?”.
Rediff.com (REDF) has been as moving with a vengeance over the past few weeks. Starting from an amazing earnings report in May, and then following the usual course of buyout and merger rumors, it has moved from a consolidation range ($16-19) to $27 during July 2007. Why?
Apple: Here is what comes next for the stock
July 1, 2007
Well, Apple (AAPL) did it. They managed to create hype of epic proportions with the new iPhone. It is almost unbelievable that they were able to hypnotize people into waiting in line for a product that was unproven which admittedly has less functionality than many of its competitors.
In the spirit of full disclosure, let me tell you that it is now 45 minutes past Zulu (6:45) on Friday and I have no idea what the reports are from initial iPhone owners. Since I am on another international flight, I am writing this blind to what is going on at ground level. The truth is, riots could have broken out and countries could have gone to war over the iPhone and I am oblivious to it. Here is where it gets weird(er) though: I am asking the flight crew to see if the Captain Read more
Best Buy Apple
June 26, 2007
For a couple of years now, Apple (AAPL) and Best Buy (BBY) have been rumored to be getting more friendly. Back in 2006, there was discussion about the chance for Apple to enter into an agreements and start selling products within the Best Buy stores which never panned out.
Apple had preferred to sell its products through their online and retail stores as well as by the retail channel of Compusa. For whatever reason, the Best Buy relationship never seemed to move ahead. ow things may change. Behind the scenes, there has been some movement of late that should bring Apple and Best Buy closer together.
Store employees in Florida Best Buy locations are getting ready for a a new and expanded product line. Several employees (in separate conversations) have confirmed that over 200 stores will be see specific remodeling to include Apple mini stores within the Best Buy stores at key US locations. Best Buy has begun training for the floor salespeople on the Apple product line, which is anticipated to be seen by October 2007.
The design is said to be a special section within each of the initial Best Buy stores that will have a separate Apple section that will have a look and feel o the Apple brand. Specialist from Apple (Genius bars?) will have a permanent placement in each store to help with any product questions that are beyond the Best Buy employee’s range.
What does this mean to each of these companies? For Apple, it has been estimated Read more
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