Smaller Companies Grab Bigger Share of Surging U.S. Exports
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Lower tariffs as a result of free-trade agreements have also helped. Since the North American Free Trade Agreement with Canada and Mexico in 1993, the U.S. has entered into accords with Chile and Central America. Treaties with Peru, Colombia, Panama and South Korea are currently awaiting congressional approval. “The free-trade agreements are really an important element for the smaller companies because tariffs and non-tariff barriers pose less difficulties for large multinationals,” the U.S. Chamber’s Murphy said. “For smaller enterprises, the tariffs can be a deal-breaker.”
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A European customer eyeing an American product priced at $100, would now need to come up with only about 68 euros to make the purchase, compared with 99 euros five years ago.
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That may be one reason spending by factories on new equipment rose for a fourth straight year in 2006, according to the Commerce Department’s Annual Survey of Manufacturers. The last time that occurred was from 1994 to 1998.
Interesting article. Once again I repeat my message that the end of manufacturing in the USA is greatly overstated. While surging exports are good for the economy the massive current account deficit needs to shrink a great deal before the USA can be said to have stopped living far beyond its means.
Related: Manufacturing Jobs Data (USA, China, Europe, Asia…) – USA Manufacturing Plant Construction – Manufacturing and the Economy
Goldman Sachs Rakes In Profit in Credit Crisis
But for Goldman’s chief executive, Lloyd C. Blankfein, this is turning out to be a very good year. He will surely earn more than the $54.3 million he made last year. If he gets a 20 percent raise – in line with the growth of Goldman’s compensation pool – he will take home at least $65 million. Some expect his pay, which is directly tied to the firm’s performance, to climb as high as $75 million.
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This contrast in performance has been hard for competitors to swallow. The bank that seems to have a hand in so many deals and products and regions made more money in the boom and, at least so far, has managed to keep making money through the bust. In turn, Goldman’s stock has significantly outperformed its peers. At the end of last week it was up about 13 percent for the year, compared with a drop of almost 14 percent for the XBD, the broker-dealer index that includes the leading Wall Street banks. Merrill Lynch, Bear Stearns and Citigroup are down almost 40 percent this year.
Interesting story with at least a couple of good points to remember. First it does make a difference what company you chose. There are many market conditions where anyone can make money, but those conditions will change. Also look at the type of pay these people get. The CEO’s take huge risks to possibly get even more obscenely paid. It is absolutely no surprise to me the companies write off hundreds of millions in losses. It happens constantly. Executives are paid ludicrous salaries. In order to try and justify them they take huge risks. When the gambles pay off they pocket even huger bonuses. When they fail they pocket huge severance packages. Who wouldn’t bet the future of the company for that kind of money. Some people wouldn’t but not many that fight there way to the top of the corporate world. Right now it is banks writing off hundreds of millions but just watch every year companies do it. It is not some isolated rare event – it is predictable, common happening.
And third the financal markets are much riskier than people think. Combine that with leverage and you get huge swings – huge profits and huge losses. I suppose some company may be able to guess just write about when to leverage and make the changes at just the right time – but I doubt it. A few great investors might be able too much of the time.
MIT launches initiatives in innovation and India
Since 2002, The Deshpande Center has funded 64 projects with over $7 M in grants. 11 projects have spun out of the center into commercial ventures, having collectively raised over $88 M in outside financing. Twelve venture capital firms have invested in these ventures. The Center supports a wide range of emerging technologies including biotechnology, biomedical devices, information technology, new materials, tiny tech, and energy innovations.
Related: India related posts from our management blog – Educating Engineering Geeks – What Kids can Learn – The Future is Engineering
Frontline World traveled to Uganda to explore the impact of microfinance and provide some great details on how Kiva is bringing economic opportunity to entrepreneurs. The site includes details and a nice webcast. It is great to see how people can connect directly using Kiva. And it is great to see how people can take small loans and some effort and financial literacy to make a living for themselves. The effort of these entrepreneurs to manage their finances would benefit many people in the rich world plan for retirement…
As I have mentioned before, if you loan through Kiva send me a link to your Kiva page and I can add it to the Curious Cat Kivans page.
Related: Make the World Better Using Capitalism – Helping People Help Themselves – Make the World Better – How Rich are You
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When you consider that farm income is at record levels (thanks to the ethanol boom, itself fueled by another set of federal subsidies); that the World Trade Organization has ruled that several of these subsidies are illegal; that the federal government is broke and the president is threatening a veto, bringing forth a $288 billion farm bill that guarantees billions in payments to commodity farmers seems impressively defiant.
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And the government would not need to pay feedlots to clean up the water or upgrade their manure pits if subsidized grain didn’t make rearing animals on feedlots more economical than keeping them on farms. Why does the farm bill pay feedlots to install waste treatment systems rather than simply pay ranchers to keep their animals on grass, where the soil would be only too happy to treat their waste at no cost?
Related: Farming Without Subsidies in New Zealand – Washington Pays Grandchildren’s Taxes to Special Interests Today – USA Federal Debt Now $516,348 Per Household
The Motely Fool is one of the best web sites for learning about investing (it is one of the sites included in our investing links – on the left column of this page). A recent article on the site is worth reading – Ways to Retire Sooner:
Embrace stocks Saving more is great, but there’s only so much you’ll be able to put aside. You have to make the most of what you have. People are often too conservative in their retirement investments. Despite the sometimes-violent ups and downs of the stock market, the long-term return on stocks far exceeds that of less risky investments like bonds and bank savings accounts.
These are not exactly earth shattering recommendation but so many people fail to take even the most basic steps to assure a economically viable retirement the simple advice needs to be re-enforced. No one piece of advice can assure success but by educating yourself about investing and retirement planning and taking steps when you are in your 20s, 30s and 40s you can succeed. You can also succeed without doing anything in your 20s it just means you have to do more work later. Those that get started earlier get a huge advantage.
Related: Saving for Retirement – Retirement Tips from TIAA CREF – Retiring Later, Out of Necessity – investment risks – IRA (Individual Retirement Accounts)
The World Bank compiles a ranking of the easiest countries from which to run a business. The rank counties on categories such as: protecting investors (New Zealand is #1), enforcing contracts (Hong Kong is #1), employing workers (USA and Singapore tied for #1). The overall ranking for 2007:
- Singapore – 2006 #2
- New Zealand – 2006 #1
- United States – 2006 #3
- Hong Kong, China – 2006 #7
- Denmark – 2006 #8
- United Kingdom – 2006 #9
- Canada – 2006 #4
- Ireland
- Australia – 2006 #6
- Iceland
Related: Countries Which are Easiest for Doing Business 2006 – Top 10 Manufacturing Countries – Farming Without Subsidies in New Zealand – Growing Size of non-USA Economies
We posted on Muhammad Yunus and Grameen Bank when he was awarded the Nobel Peace Prize last year. Here is a nice Interview with Mohammad Yunus:
So microcredit can be a social business. I don’t lend money to the poor people to make money myself. I lend money to the people to help them get out of poverty, so I can keep the interest rate low, because I don’t need to make money for myself. As long as I can cover the cost and run the company, that’s good enough. So that’s the idea for social business. So once we include this into the business world, tremendous things can happen in poverty alleviation, in nutrition, in health care, in child care, you name it — whatever problem we see around the world can be framed, can be designed as a social business and address that.
Today we leave everything to the government. Let government solve all the problems. We citizens are free, we’re busy making money. That’s not the way it should be. We citizens, we individuals, are capable people addressing social issues. Maybe address a small social issue within my neighborhood, maybe within my district, within my village. Government has to cover the whole country, that’s the only difference. But I’m more innovative than the government. I’m more enterprising than the government.
Related: Harnessing Capitalism to Improve the World – Microfinancing Entrepreneurs – Deming on the Purpose of Organizations
A Washington official dares to tell the truth
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Walker: The present value of future unfunded liabilities for Medicare, Social Security and other plans is $53 trillion.
Walker: “You’re supposed to leave the country not just the way you found it, but better prepared for the future. The baby boom generation is failing on that.”
Walker: President Bush’s Medicare drug plan and the way it was sold to Congress and the public was “unconscionable.” The true, $8 trillion pricetag “was never calculated, disclosed or debated.”
Walker: The $9 trillion national debt is much more important than the budget deficit. Through the miracle of compound interest on the debt, he says, it will eat up more and more of the country’s resources.
Right. I keep posting on this because it is very important. To understand economics you need to understand the true shape of the economy. And to manage your investments you need to understand the great risk of a rising debt load (whether it is you personally or a country). Charge It to My Kids – USA Federal Debt Now $516,348 Per Household – Why Investing is Safer Overseas – Lobbyists Keep Tax Off Billion Dollar Private Equities Deals and On For Our Grandchildren – Broke Nation