[cobran20]

Since job retrenchments are in the news, this article highlights why western workers/manufacturers are up against the wall, competing against the chinese.

link

[mattau]

“Companies once felt an obligation to support American workers, even when it wasn’t the best financial choice,” said Betsey Stevenson, the chief economist at the Labor Department until last September. “That’s disappeared. Profits and efficiency have trumped generosity.”

The picture of the chinese job hunters in the article is quite funny! It looks like something out of Wall Street - but chinese version - very chaotic

[wulfgar]

A major element is quite simple. Historically savings of real capital are required for investment and the resultant job growth. Basically the Chinese save money and Americans don't. On the world market it's buy now and pay later with the Chinese. With America it is pay now and buy later.

[Turkey]

I think it's even simpler. Chinese workers are prepared to work for much less than US workers and you can get away with environmental and safety issues that would never be tolerated in a first world country.

All makes it cheaper to produce there. I doubt that people (in significant numbers) ever bought local simply to be patriotic. I think price/quality ratio of the local (US) goods used to be better, and now that ratio favours the Chinese.

[wulfgar]

Turkey, on 25 January 2012 - 12:23 AM, said:

I think it's even simpler. Chinese workers are prepared to work for much less than US workers and you can get away with environmental and safety issues that would never be tolerated in a first world country.

All makes it cheaper to produce there. I doubt that people (in significant numbers) ever bought local simply to be patriotic. I think price/quality ratio of the local (US) goods used to be better, and now that ratio favours the Chinese.

That's way too simple and even questionable as whether it is correct. As to whether Chinese are that much prepared to work cheaper, it is government policy that they do. Internally the currency has been inflated like the clappers to keep wage costs down. This printing doesn't show up outside China because of exchange controls.

Chinese labor might be cheap, but other costs are much higher than in the US due to lack of infrastructure. For example Chinese steel landed to the US costs the same as the local product, but the Chinese is preferred because the credit terms are attractive.

The idea that cheap labor is all it is about means the most backward African nation must have it all over the Chinese.

[Turkey]

wulfgar, on 25 January 2012 - 12:49 AM, said:

That's way too simple and even questionable as whether it is correct. As to whether Chinese are that much prepared to work cheaper, it is government policy that they do. Internally the currency has been inflated like the clappers to keep wage costs down. This printing doesn't show up outside China because of exchange controls.

Chinese labor might be cheap, but other costs are much higher than in the US due to lack of infrastructure. For example Chinese steel landed to the US costs the same as the local product, but the Chinese is preferred because the credit terms are attractive.

The idea that cheap labor is all it is about means the most backward African nation must have it all over the Chinese.

No, hence my comment about quality.

African countries don't have the infrastructure, skills and the corruption is so bad that getting anything done is next to impossible / very expensive.

It's a simple business decision for companies like Apple to produce where it's cheapest (given that the end is of acceptable quality).

[cobran20]

Turkey, on 25 January 2012 - 04:15 AM, said:

No, hence my comment about quality.

African countries don't have the infrastructure, skills and the corruption is so bad that getting anything done is next to impossible / very expensive.

It's a simple business decision for companies like Apple to produce where it's cheapest (given that the end is of acceptable quality).

As the article stated. speed at which they adjust and are ready to produce was very important along with cost and quality.

[wulfgar]

cobran20, on 25 January 2012 - 06:57 AM, said:

As the article stated. speed at which they adjust and are ready to produce was very important along with cost and quality.

Good point, but look at who underwrites the cost! With Apple it is buy now, pay later. But somebody has to pay for the now, before it will be refunded later. But there's a risk as well, the OS pay later company might go to the wall, leaving the Chinese with the tab.

[cobran20]

wulfgar, on 25 January 2012 - 10:37 PM, said:

Good point, but look at who underwrites the cost! With Apple it is buy now, pay later. But somebody has to pay for the now, before it will be refunded later. But there's a risk as well, the OS pay later company might go to the wall, leaving the Chinese with the tab.

If Apple went bust in the next couple of years, it would probably be the biggest, unexpected event in modern financial history!

[cobran20]

Why Are You Buying Apple (And Other Chinese) Products?

It's what I expect will happen if western unemployment goes through the roof.

Quote

... Tariffs, and lots of them, right here, right now.

[firehawk]

cobran20, on 26 January 2012 - 04:14 AM, said:

If Apple went bust in the next couple of years, it would probably be the biggest, unexpected event in modern financial history!

Pigs might fly unless Apple has finances as, shall we say, manipulated, as Enron's used to be.

According to the recent quarterly report from Apple, it made a profit of $13 billion in the last quarter. That's worth repeating. Thirteen billion dollars in one quarter!!!

They also have close to $100 billion in cash sitting around waiting for them to decide how best to use it.

The company is now the biggest market cap company in the world its share price having gone from sub $10 in 2001 to $460 today.

I am not sure how long they can keep this momentum up with Steve Jobs dead but they seem set for at least another year or two.

[wulfgar]

A nice good hard belt of deflation and Apple would wind up under water in quick time.

[savagegoose]

100 bill in cash? isnt deflation meant to make cash king? that just means apple can buy more sh*t really cheap.

[wulfgar]

savagegoose, on 27 January 2012 - 02:22 PM, said:

100 bill in cash? isnt deflation meant to make cash king? that just means apple can buy more sh*t really cheap.

Apple's liabilities are in the region of 400 billion, their assets are valued at 500 billion.......that's 100 billion in equity not cash!!!

Their liabilities are often in cold hard cash, their assets depend on Samsung not stealing their bacon.

This post has been edited by wulfgar: 27 January 2012 - 09:41 PM

[urchin]

wulfgar, on 27 January 2012 - 09:40 PM, said:

Apple's liabilities are in the region of 400 billion, their assets are valued at 500 billion.......that's 100 billion in equity not cash!!!

Their liabilities are often in cold hard cash, their assets depend on Samsung not stealing their bacon.

where are you getting those numbers? took a quick glance at sep. 2011 balance sheet and don't see anything remotely close to those numbers. balance sheet shows ~40b in liabilities vs. 26b in cash.

[wulfgar]

urchin, on 28 January 2012 - 03:54 AM, said:

where are you getting those numbers? took a quick glance at sep. 2011 balance sheet and don't see anything remotely close to those numbers. balance sheet shows ~40b in liabilities vs. 26b in cash.

Sorry, must be looking at next decades balance sheet.

Total assets 116b - 40b = 76b shareholders equity, 26 billion in liquid assets.

Market cap heading towards 500 billion.

http://au.finance.ya...s?s=AAPL

[cobran20]

Apple's problem: what to do with a mountain of cash?

Quote

This week Apple announced yet another record profit, numbers so large as to become rather meaningless: gross revenue of $US46 billion ($A43.3 billion), cashflow of $US17.5 billion, a net profit of $US13.6 billion, more than double last year's result. And these figures are just for the December quarter, a mere three month's worth of i-gadgets.

Apple's profit margin was 28 per cent - what Ken Henry would describe as a ''super profit'' and therefore deserving of an extra tax, not that the financially strained American government is capable of thinking along those lines. What's even more astounding is that Apple is sitting on cash reserves of $US97.6 billion. With sales for this quarter conservatively forecast to be $US32.5 billion, the spare change will tip it over the neat $US100 billion mark well before March 31.