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Who owns America? Hint: It’s not China January 29, 2012

Posted by tkcollier in Economy & Business, Geopolitics.
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Here’s a quick and fascinating breakdown by total amount held and percentage of total U.S. debt, according to Business Insider:

  • Hong Kong: $121.9 billion (0.9 percent)
  • Caribbean banking centers: $148.3 (1 percent)
  • Taiwan: $153.4 billion (1.1 percent)
  • Brazil: $211.4 billion (1.5 percent)
  • Oil exporting countries: $229.8 billion (1.6 percent)
  • Mutual funds: $300.5 billion (2 percent)
  • Commercial banks: $301.8 billion (2.1 percent)
  • State, local and federal retirement funds: $320.9 billion (2.2 percent)
  • Money market mutual funds: $337.7 billion (2.4 percent)
  • United Kingdom: $346.5 billion (2.4 percent)
  • Private pension funds: $504.7 billion (3.5 percent)
  • State and local governments: $506.1 billion (3.5 percent)
  • Japan: $912.4 billion (6.4 percent)
  • U.S. households: $959.4 billion (6.6 percent)
  • China: $1.16 trillion (8 percent)
  • The U.S. Treasury: $1.63 trillion (11.3 percent)
  • Social Security trust fund: $2.67 trillion (19 percent)

So America owes foreigners about $4.5 trillion in debt. But America owes America $9.8 trillion

via Who owns America? Hint: It’s not China – Global Public Square – CNN.com Blogs.

China Cost Advantages Erode as U.S., Mexico Gain January 5, 2012

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China, which is experiencing negative pressure as an exporter because of wage inflation, exchange-rate pressures and higher freight rates, could lose its cost advantage vis-à-vis U.S. production in four years if freight rates rise at 5 percent annually, according to the 2011 U.S. Manufacturing-Outsourcing Cost Index.

Since 2007, Mexico, some locations in Europe and locations in Asia other than China have gained a competitive advantage for offshore manufacturing. In addition to Mexico, emerging LCCs, including India, Vietnam, Russia and Romania, had lower landed cost for their exports to the U.S.

via China Cost Advantages Erode as U.S., Mexico Gain, Report Says | Journal of Commerce.

In the Future Everything Will Be A Coffee Shop December 28, 2011

Posted by tkcollier in Economy & Business, Lifestyle.
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But what’s the advantage of a good job if the salary difference between that job and a non-college-level job is lost servicing student debt? It’s a reasonable question that has become more pressing as the amount of student debt required to get an education has risen.

At the same time several universities with world renown branding have begun offering online courses for free. MIT has been the pioneering institution in this. They were first to make practically all classes available online. Now they are beginning to offer some level of credential for completion of online courses through a new program they’re calling MITx.

We’re going back to the future: the modern office was birthed in 17th century coffee shops. Steven Johnson has argued that coffee fueled the enlightenment. It was certainly a more enlightening beverage than the previous choice of alcohol.

The need for offices grew as the equipment for mental work was developed starting in the late 19th centuries. That need appears to have peaked about 1980. It was a rare person who could afford the computers, printers, fax machines, and mailing/shipping equipment of that time.

Now a single person with $500 can duplicate most of those functions with a single laptop computer.  So the remaining function of the office is to be that place that clients know to find you… and that kids and the other distractions of home can’t.

via speculist.com » Blog Archive » In the Future Everything Will Be A Coffee Shop.

More Poverty in Suburbs Than in Cities December 28, 2011

Posted by tkcollier in Economy & Business, Lifestyle.
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In the wake of the Great Recession, poverty rolls are rising at a more rapid pace in the suburbs than in cities or rural communities. Between 2000 and 2010, the number of suburban households below the poverty line increased by 53 percent, compared to a 23 percent increase in poor households in urban areas, according to a Brookings Institution analysis of census data.

Last year, there were 2.7 million more suburban households below the federal poverty level than urban households, according to the Bureau of Labor Statistics. That was the first time on record that America’s cities didn’t contain the highest absolute number of households living in poverty.

via America’s Dirty Little Housing Secret Is Rocking The Suburbs.

The Ruins of Detroit November 20, 2011

Posted by tkcollier in Cool photos, Economy & Business, Enviroment.
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Captured: The Ruins of Detroit | Plog — World, National Photos, Photography and Reportage — The Denver Post.

Tree Climbing Goats November 4, 2011

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Have you ever seen tree climbing goats? Apparently goats on the trees is a common thing in Morocco. Moroccan goats unbelievably easy get on the highest tops of argan trees to reach so loved fruit similar to olives.

Moroccan farmers constantly witness the flock of goats climbing from one tree to another. It’s not that the flock of goats to them is an unfamiliar sight, but because goats eat argan fruit in the inside of which there is a nut that goats cannot digest, therefore they spit it out or get rid of it in the form of excrement. The farmers gather them carefully.

Tree Climbing Goats – mytripsdiary.com.

Our Emerging Energy Independence October 29, 2011

Posted by tkcollier in Economy & Business, Enviroment, Geopolitics.
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For more than five decades, the world’s oil map has centered on the Middle East. No matter what new energy resources were discovered and developed elsewhere, virtually all forecasts indicated that U.S. reliance on Mideast oil supplies was destined to grow. This seemingly irreversible reality has shaped not only U.S. energy policy and economic policy, but also geopolitics and the entire global economy.

But today, what appeared irreversible is being reversed. The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere. The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas, past a major new discovery off the coast of French Guyana to huge offshore oil deposits found near Brazil.

For the United States, these new sources of supply add to energy security in ways that were not anticipated. There is only one world oil market, so the United States — like other countries — will still be vulnerable to disruptions, and the sheer size of the oil resources in the Persian Gulf will continue to make the region strategically important for the world economy. But the new sources closer to home will make our supply system more resilient. For the Western Hemisphere, the shift means that more oil will flow north to south and south to north, rather than east to west. All this demonstrates how innovation is redrawing the map of world oil — and remaking our energy future.

via Oil’s new world order – The Washington Post.

The Difference Between the Israeli and Greek Wailing Wall October 8, 2011

Posted by tkcollier in Economy & Business, Humor, In The News.
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Wailing Wall in Israel

Greek Wailing Wall

Why Manufacturing is Returning from China October 8, 2011

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Shipping and logistics adds 17 percent; finding a viable Chinese vendor adds 1 percent; quality issues add 4 percent; travel and communications add 1 percent and “all others” add another 1 percent to the total price of a product manufactured offshore. Some products are simply not good to produce offshore — those made with highly automated precision processes; those that are bulky and heavy; products that require flexible scheduling; and products that undergo many revisions, causing an increase in quality failures.

In a case study comparing costs in the United States and China, Meeker and his MIT colleague Jay Mortenson found that it is cheaper by 8 percent to produce a current design in China. There are substantial savings associated with purchased parts from China that include direct labor (79 percent savings versus U.S. labor rates), indirect labor and salaries (61 percent savings), benefits (75 percent savings), overhead (40 percent savings) and selling, general and administrative (SG&A) (11 percent savings).

When adding logistics to the China price, the cost advantage of producing in China shrinks to 8 percent: $13.85 for a case-study product made in China versus $14.99 in the United States. But when design for manufacturing and assembly (DFMA) software is applied to the same product, the China advantage vanishes. The China cost declines to $9.79 versus the U.S.-made product at $9.47

via The Case Against Shifting Production To China; Hidden Costs And Growing Risks Make U.S. Attractive For Manufacturing. (more…)

Cities as Hotels September 12, 2011

Posted by tkcollier in Economy & Business, Enviroment, Lifestyle.
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Private cities are happening now for a reason. Africa, India, and China are urbanizing more rapidly than has ever occurred in human history. In Africa, the number of urban dwellers is projected to increase by nearly 400 million, in India at least 250 million will move to cities and in China more than 400 million will move to cities in just the next 20 years. Not all of these people will move to older cities, which are not always in the right places and which rarely possess anything like the right material let alone the right political infrastructure. The rising middle-class want to live in first-world cities and in many of these countries only the private sector can deliver those cities.

The rapid urbanization of the developing world is an opportunity to remake cities anew. Private cities as hotels on a grand scale

via Cities as hotels — Marginal Revolution.

Globalization’s Greatest Victory September 9, 2011

Posted by tkcollier in Economy & Business, Geopolitics.
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The past four years have seen a sharp contrast between recession-hit rich countries and buoyant emerging giants. Estimates from the Asian and African Development Banks, using a rather broad definition of middle class as living on $2-20 a day, confirm the picture. On this measurement, which includes many people who are only just above the poverty line, a third of Africans and three-quarters of Latin Americans were middle class in 2008. Meanwhile, the evidence that this progress will bring political demands that will reshape the developing world is mounting.

People ask, what did America do for the world? It set the conditions for this to happen – and then it defended that system from those who would do it harm. The US is only world power in history whose primary goal has been the peaceful rise of other great powers through trade and development.

via Thomas P.M. Barnett’s Globlogization – Blog – Chart of the Day: globalization’s greatest victory.

Latin America’s blind love with China may be over September 9, 2011

Posted by tkcollier in Economy & Business, Enviroment, Geopolitics.
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Barbosa, who served as ambassador to Washington during the Luiz Inácio Lula de Silva government and now heads the foreign trade council of Brazil’s powerful FIESP industrialists federation, said Brazilian executives working for Chinese firms are also complaining about “long work days, frequent overtime, teleconferences in the wee hours, and production goals that are unrealistic and non-negotiable.”

As a result, 42 percent of Brazilian executives working for Chinese firms quit their jobs in their first year, he said, quoting a story in the daily Folha de Sao Paulo. Barbosa concluded that China’s business practices “should be followed with attention” by government authorities, labor unions and business associations.

Almost simultaneously, a new study by the United Nations Commission for Latin America and the Caribbean (ECLAC), “Overview of Latin America’s insertion in the world economy,” shows that 87 percent of Latin America’s exports to Asia — mainly China — are raw materials, while only 13 percent are manufactured goods.

By comparison, 60 percent of Latin America’s exports to the United States are manufactured goods, and the remaining 40 percent raw materials, the study says.
Read more: http://www.miamiherald.com/2011/09/07/2395293/latin-americas-blind-love-with.html#ixzz1XT8lszI6

Citing an article in The Economist on China’s investments in Africa, Barbosa says that China “is destroying parks and forests in search of mineral and agricultural resources, and routinely violates the most elementary labor laws. Roads and Hospitals built by the Chinese are badly finished, among other things because their construction companies pay bribes to local officials.”

via Latin America’s blind love with China may be over – Andres Oppenheimer – MiamiHerald.com.

E-Trade Baby Hit By the Market August 13, 2011

Posted by tkcollier in Economy & Business, Humor, Video.
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Why China Still Buy US Debt August 9, 2011

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The People’s Bank of China (PBoC) accumulated its forex reserves by borrowing yuan from the Chinese people. The U.S. dollar assets and yuan liabilities are roughly balanced on the central bank’s balance sheet. If the U.S. government is addicted to debt, so is China’s.

The purpose of that precarious balance sheet is to subsidize exports by keeping the yuan’s value low and deferring inflation. An economy like China’s that is enjoying rapid productivity growth would normally see rising real wages and hence benign inflation that would increase the cost of its exports. Because that process has been stopped, China’s exporters remain competitive across a range of labor-intensive products such as shoes and garments in which the country no longer has a true comparative advantage.

Were the PBoC to stop buying U.S. Treasurys and other dollar assets, the result would be an immediate increase in the yuan’s value. The losses on U.S. investments as the yuan slowly appreciates are one part of the cost for the export-subsidy policy.

In the short term Chinese threats to stop buying U.S. debt are empty, since there are no other asset markets deep and liquid enough to absorb the purchases needed to keep the yuan stable. Were China to buy euros or yen in sufficiently large quantities, it would soon run into a protectionist backlash in Europe and Japan as those nations ran trade deficits. The U.S. willingness to run a persistent trade deficit is key to the dollar’s status as a reserve currency.

via Review & Outlook: China’s Debt Addiction – WSJ.com.

June 17, 2011

Posted by tkcollier in Economy & Business, Geopolitics.
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China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills June 17, 2011

Posted by tkcollier in Economy & Business, Geopolitics.
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China has dropped 97 percent of its holdings in U.S. Treasury bills, decreasing its ownership of the short-term U.S. government securities from a peak of $210.4 billion in May 2009 to $5.69 billion in March 2011, the most recent month reported by the U.S. Treasury.

Treasury bills are securities that mature in one year or less that are sold by the U.S. Treasury Department to fund the nation’s debt.

Mainland Chinese holdings of U.S. Treasury bills are reported in column 9 of the Treasury report linked here.

Until October, the Chinese were generally making up for their decreasing holdings in Treasury bills by increasing their holdings of longer-term U.S. Treasury securities. Thus, until October, China’s overall holdings of U.S. debt continued to increase.

Since October, however, China has also started to divest from longer-term U.S. Treasury securities. Thus, as reported by the Treasury Department, China’s ownership of the U.S. national debt has decreased in each of the last five months on record, including November, December, January, February and March.

via China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills | CNSnews.com.

Garbage is USA’s Most Containerized Export June 14, 2011

Posted by tkcollier in Economy & Business, Enviroment.
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America Chung Nam, the sister company and supplier of wastepaper to China’s largest containerboard manufacturer, was the largest American exporter of containerized goods by volume in 2010 for the 10th year in a row, according to the latest Journal of Commerce Top 100 Importers and Exporters annual rankings.

The California-based company shipped a total of 300,800 20-foot equivalent units from the U.S. in 2010. The volume was 16 percent ahead of the 259,300 TEUs America Chung Nam exported in 2009.

America Chung Nam, founded in 1990, sends recycled paper goods to Chinese paper mills, which are then converted into fiberboard, cardboard, and packaging. The company has their customer base in the U.S., Asia and Europe. In addition to containerboard, they also exports plastic recyclables.

Recycling paper, plastics and scrap metal is good not only for the environment but also for reducing the U.S. foreign trade deficit. Then, it comes back to us, as Wal-Mart remained the No. 1 importer of containerized ocean cargo, increasing its shipping volume into the United States 1.8 percent in 2010. The world’s largest retailer imported 696,000 20-foot equivalent units last year, up from 684,000 TEUs in 2009. The company also was No. 39 on the Top Exporters 2010 list with 28,000 TEUs shipped out of the U.S.

via Wastepaper Giant ACN Was Top US Exporter | Journal of Commerce.

The Great Disruption Has Arrived June 8, 2011

Posted by tkcollier in Economy & Business, Enviroment, Food, Geopolitics.
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Why didn’t more of us see it coming? After all, the signals have been clear enough – signals that the ecological system that supports human society is hitting its limits, groaning under the strain of an economy simply too big for the planet. But we didn’t and, as a result, the time to act preventatively has past.Now we must brace for impact. Now comes The Great Disruption.It is true that the coming years won’t be pleasant, as our society and economy hits the wall and then realigns around what was always an obvious reality: You cannot have infinite growth on a finite planet. Not ‘should not’, or ‘better not’, but cannot. We can, however, get through what’s ahead – if we prepare. (more…)

Oil in Shale – New US Energy Source May 28, 2011

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Based on the industry’s plans, shale and other “tight rock” fields that now produce about half a million barrels of oil a day will produce up to three million barrels daily by 2020, according to IHS CERA, an energy research firm. Oil companies are investing an estimated $25 billion this year to drill 5,000 new oil wells in tight rock fields, according to Raoul LeBlanc, a senior director at PFC Energy, a consulting firm.

“This is very big and it’s coming on very fast,” said Daniel Yergin, the chairman of IHS CERA. “This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States.”

In the most developed shale field, the Bakken field in North Dakota, production has leaped to 400,000 barrels a day today from a trickle four years ago. Experts say it could produce as much as a million barrels a day by the end of the decade.

The Eagle Ford, where the first well was drilled only three years ago, is already producing more than 100,000 barrels a day and could reach 420,000 by 2015, almost as much as Ecuador, according to Bentek Energy, a consultancy.

via Oil in Shale Sets Off a Boom in Texas – NYTimes.com.

Somali Pirates Still Going Strong May 25, 2011

Posted by tkcollier in Economy & Business, Geopolitics, In The News.
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Twenty-five vessels and 560 people are currently being held for ransom by pirates. Continuing to expand their geographical reach, pirates are the maritime industry. Mixed opinions about how best to moderate the effects of piracy were revealed during a Wednesday session at the 2011 Breakbulk Europe Transportation Conference and Exhibition.

Dirk Steffen, Director of Consultancy for Risk Intelligence, outlined the extent of the problem, saying that one out of every five pirate attacks is successful.

Pirate tactics continue to evolve. For example, many have managed to extend the period of time during which they can attack, Steffen said. Until late last year most piracy attacks were linked directly to the monsoon season, but now there is a new tactic in that the Somali pirates are capturing large fishing vessels and using them as mother ships, which enables them to continue operating in monsoon-hit areas.

In another twist, the main “commodity” captured is now considered to be the crew rather than the vessel, Steffen said. In several cases vessels have been captured and later set adrift once the pirates had taken the crew prisoner. (more…)

Peak Oil? Now it’s Peak Cars May 12, 2011

Posted by tkcollier in Economy & Business, Enviroment.
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Australian and world peak car ownership per capita was in 2004 and since has shown a slow decline. It marks an end to car dependence. Teenage car ownership has dropped markedly. Figures suggest a big cultural shift as well as structural change within cities. Some very large cities such as Beijing and Shanghai have made it almost impossible to buy a new car. Car transport has reached a limit. Shanghai built a metro system in 10 years, which covers 80% of the city and carries 8 million passengers each day. Metros are being built in 82 Chinese cities and 14 Indian cities. Peter Newman compares the cost of constructing roads and railways and says both cost about $50million per kilometre. But rail carries 8-20 times the passengers carried by road. With the price of gasoline heading north, people are moving back into cities and not wanting to be as dependant on cars as they were. Thanks to Carlton Palmer

via Peak oil? Now it’s peak cars – Science Show – 7 May 2011.

New Gas Station’s Grades April 25, 2011

Posted by tkcollier in Economy & Business, Humor, In The News, Lifestyle.
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Thanks to Gear Head Carlton Palmer

Chart of Who Buys Oil From Libya March 8, 2011

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Almost 80% of Libya’s Oil exports go to Europe.

Lawyers Replaced by Computers March 6, 2011

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Computers are getting better at mimicking human reasoning — as viewers of “Jeopardy!” found out when they saw Watson beat its human opponents — and they are claiming work once done by people in high-paying professions. The number of computer chip designers, for example, has largely stagnated because powerful software programs replace the work once done by legions of logic designers and draftsmen.

Software is also making its way into tasks that were the exclusive province of human decision makers, like loan and mortgage officers and tax accountants.

Quantifying the employment impact of these new technologies is difficult. Mike Lynch, the founder of Autonomy, is convinced that “legal is a sector that will likely employ fewer, not more, people in the U.S. in the future.” He estimated that the shift from manual document discovery to e-discovery would lead to a manpower reduction in which one lawyer would suffice for work that once required 500 and that the newest generation of software, which can detect duplicates and find clusters of important documents on a particular topic, could cut the head count by another 50 percent.

The computers seem to be good at their new jobs. Mr. Herr, the former chemical company lawyer, used e-discovery software to reanalyze work his company’s lawyers did in the 1980s and ’90s. His human colleagues had been only 60 percent accurate, he found.

“Think about how much money had been spent to be slightly better than a coin toss,” he said.

via Armies of Expensive Lawyers, Replaced by Cheaper Software – NYTimes.com.

What to Teach in School February 19, 2011

Posted by tkcollier in Economy & Business, Geopolitics.
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We need to rethink our education system so that it turns out more people who are trained for the jobs that will remain in the United States and fewer for the jobs that will migrate overseas. We cannot, of course, foresee exactly which jobs will go and which will stay. But one good bet is that many electronic service jobs will move offshore, whereas personal service jobs will not. Here are a few examples. Tax accounting is easily offshorable; onsite auditing is not. Computer programming is offshorable; computer repair is not. Architects could be endangered, but builders aren’t. Were it not for stiff regulations, radiology would be offshorable; but pediatrics and geriatrics aren’t. Lawyers who write contracts can do so at a distance and deliver them electronically; litigators who argue cases in court cannot.

via Free Trade’s Great, but Offshoring Rattles Me – washingtonpost.com.

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