Can you talk about globalization without oil? With oil running at record prices many are asking how high can it go. If you ask the producers they will say it should not be this high, but they have no control over it “cough”. One does have to wonder why the price is so high with no storms or supply disruptions. So why is oil at these sky high prices? The free market for all its benefits often runs the price up on speculation. Of course the producers talk a big game, but you know they want the price where it is. While the dollar falling certainly plays into the mix, it would seem that this is just more excuses for the exuberant prices.

I doubt the prices will get any better either. The global economy storms on with no end in sight. I doubt they will ever catch up; which brings alternative sources even closer to the helm. Someone is going to make a fortune investing in these alternatives. It’s not without its gambles though obviously. I don’t think for example, ethanol is the answer as it’s not plentiful enough, and we need it for food. In my opinion it will have to be hydrogen or something of that ilk, but it too will have to be subsidized in the beginning. Either way something has to be done as we all try to find cheaper energy. The days of 20 dollar a barrel oil are long gone.

The Iphone will hit the UK on Nov 9th according to Mr Jobs. As an Iphone owner myself I would highly recommend our British friends pick one up. It really is a game changer (at least it was for me). I hated the big clunky Blackberry or Treo lines and it fit me well. I also can fly on the keyboard just as fast after a little bit of a learning curve. It’s not without it’s fault though as they will see it. They need to get to a 3G version of the phone asap so I can pawn mine on ebay and get the new one. I’m not going to complain about a price drop either. I guess the Iphone brought in a lot of newbie gadget buyers that have not learned early adopters usually pay a price for it.

Well if you thought that the old ladies pulling their money out of Countrywide was bad, just take a look at this one. Are people wanting to go back to the mattress piggy banks or what? I’m not sure how their banking system is as far as insurance(FDIC Equivalent), but the government said that they would back all deposits. If it gets that bad(not trusting the government), standing in line for your money is going to be the least of peoples worries. It should be interesting to see if the Fed cut today will alleviate some of the stress in the bond and credit markets. I think it’s all just fear, and has little to do with the fundamentals of the economy. Now the depression was a time when you actually had the fundamentals to back some of the fear, but some of these fear mongers crack me up.

It appears there are names behind the faces of the sub prime slime and it has spread abroad. If you need anymore proof that our economy is not global look no further. We all are interopable at this point. We hawked our supposed triple A paper to these banks and foreign investors, and now they are finding out it’s not worth more then the paper it was printed on.

Full article

http://www.nytimes.com/2007/08/09/business/09cnd-stox.html?hp

If you need to see the proof of big global infrastructure build out just look no further then Cisco. The John Chambers led company beat the street, but more impressive was the forward guidance. The world is shrinking and Cisco is leading the way. You might want to tuck this one away for retirement.

http://www.investors.com/member/IBDalerts/default.asp?src=A562CPI

Chinas latest threat in the trade war seems to have raised some eyebrows. Let’s see they hold about a trillion dollars worth of U.S Treasuries. Hmm yeah that would give them some clout. It’s not beneficial to either party to turn the back on the other. Sit down and work it out. Whether you like it or not our economies are attached at the hip. Brash measures never do anyone any good. Especially with our edgy markets.

 http://www.investors.com/editorial/editorialcontent.asp?secid=1501&status=article&id=271465242819506

India seems to be becoming the IT island. Dell plans to expand to double it’s staff across various departments, and adding a manufacturing center. If you remember dell faced some backlash in the not so distant past with customer complaints over the outsourcing of customer service. It just goes to show you that regardless of the backlash, as long as these countries offer lower cost, higher educated labor then they will continue to grow and flourish. I mean it’s not like many Americans view their job in a call center as something to be thankful for. It won’t last forever though as more people move up into the middle class they will become more dependent and expectant on their wages all while expecting more from employers. It’s easy to be thankful for a job when your country is struggling. If someone throws you an old soggy cracker, and you haven’t ate in a week or so it’s going to taste like the best ritz cracker ever made.

Anyone who was around in the early 80’s to see Walmart exploding across America with one of the biggest and quickest expansions may now see something even bigger in China. Walmart expects to hire 150,000 workers in China over the next five years and could overtake the US as it’s biggest market in 20 years some are saying. I think Walmart may be something to tuck away in your portfolio if you have long term plans. Imagine them doubling revenue, and with a supply chain that is probably the best in the world, you would be a fool to bet against them.

As more outsourcing moves to India is your business capable of reaping the benefits. I actively use outsourcing for my business, as they provide lower cost opportunities. It is not without limitation however as they are just getting up in the morning as you are going to bed, making collaboration a chore at times. It can be beneficial though if you have them perform daily work, as they can perform the service why you sleep and be ready for you when you awake. I wonder how long they can really keep wages down as demand increases, and other countries start vying for a piece of the pie. I use them primarily for software development, but they also are frequently used for other service industries. I’m sure you have dealt with them a time or two, as many blue chip companies outsource customer service segments to these areas.