Much has been made this year with the "non-confirmation" of the Dow Transports vs. the Dow. Tim Wood on Financialsense.com offers this
http://www.financialsense.com/Market/wrapup.htm
However, I couldn't help but wonder about the following. Remember the ISM Manufacturing numbers. That is going down. The service sector number this week made some a little brave, and today non-farm payroll number was better than expected.
Here's my wonderment: If we are moving away from a manufacturing base (and we know we are because we make too much damn money here to produce anything that anyone can afford) and if we are more of a service based economy, then is the non-confirmation of the transports that big of a deal?
It's a rhetorical question. I'd like to form some other thoughts on this. But it is something that bears some consideration.
1 comment:
There are a number of good economic reasons to locate manufacturing within the US. The foreign car makers are still opening new plants in the South.
Yes labor cost is important, but so is access to the market, shipment times, etc. I saw a study recently (I'll post it if I can find it) that shows that there has been a recent slight pull pack in the "globalization" of industry. The authors noted that the likely culprit was transportation costs.
I remember seeing some data that implied that the peak of globalization in the first world market (that was destroyed by WWI) was 1870, not 1913 as you might think. Again their is a seesaw effect of a variety of market factors that dictate the optimal location for manufacturing.
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