Alright, it has been too long. I have sat and watched many of you post great articles over the past several weeks and needed to get back in the fray. I tend to try to find articles that not only have meaning to the class but also to me. With pallets, I was a fork lift operator staring them down daily.  The article I share with you all today also brings back some fond (and not so fond) memories.  I was working at Commerce Capital Markets (the securities arm of Commerce Bank) when Toronto-Dominion acquired us in 2007.

I learned quickly of the Canadian Bank structure. Unlike here in the US where it seems a new bank opens daily, the Canadian Banking market is an oligopoly with several banks dominating the market share. Many of these banks looked to the US to drive higher revenues as they were limited in the current Canadian market.

From the article attached, it seems that, although making some decent returns, the Canadian invasion hasn’t been a home run move.  While the Canadians are nice people, they weren’t too nice to our municipal finance group. We had around 50 people working there at the time of acquisition. When I finally left in 2012, there were only 3 of us left.

http://www.theglobeandmail.com/report-on-business/international-business/us-business/rolling-at-home-canadas-banks-find-headwinds-in-us/article18940306/

http://p.nytimes.com/email/re?location=InCMR7g4BCKC2wiZPkcVUrJYFxeRblCO&user_id=2676b5777ec170e96b9f3f65bf0546ae&email_type=eta&task_id=1403690269791698&regi_id=0

this article and the links within the article create a signicant portrait of the very near term future of what the risks and the associated costs, including human capital, when doing business in the USA.   We need to consider deciding today where our children will live in the future.  Do you want a beach front house on LI?  Where will your labor market come from?

im scared.

Stefanie

Global FDI is expect to rise 12.5%. The biggest recipient of such investment remains the US-50% above China.http://www.nytimes.com/2014/06/25/business/international/foreign-direct-investment-will-grow-for-next-3-years.html?src=twr&module=Search&mabReward=relbias%3Ar%2C%5B%22RI%3A5%22%2C%22RI%3A16%22%5D&_r=0

[contact-form][contact-field label=’Marisol Ramos’ type=’name’ required=’1’/][contact-field label=’[email protected]’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form

(Side note)  Baruch’s International Business class and curriculum has been extremely informative.  I became interested in learning more about the Global Market, trade, tariffs, export, and import implications around the world while participating in this particular class of International Business Fundamentals (IBS 9600).  This class has increased my awareness and interest in learning more about other countries and the global economy.

In a recent search on the internet, I came across an impressive Management Plan designed specifically for Trade that I thought may be of interest to others.  I was surprised to find out that a strategic plan has been designed and published to foster trade and growth in the global economy.

1. MISSION STATEMENT

The European Commission’s Directorate-General for Trade implements the EU’s trade policy in order to help secure prosperity, solidarity and security in Europe and around the globe.

DG Trade contributes to shaping a trade environment that is good for European citizens and European business.

2. THIS YEAR’S CHALLENGES: PERSONAL MESSAGE BY JEAN-LUC DEMARTY, DIRECTOR GENERAL, DG TRADE

DG Trade seeks to implement  two general objectives — driving growth by improving trade conditions for European companies and fostering sustainable development around the world. Read the full article, link is provided below.

http://trade.ec.europa.eu/doclib/docs/2013/january/tradoc_150230.pdf

Marisol R.

[contact-form][contact-field label=’Marisol Ramos’ type=’name’ required=’1’/][contact-field label=’[email protected]’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form] From Ted Talk:

James Glattfelder studies complexity: how an interconnected system — say, a swarm of birds — is more than the sum of its parts. And complexity theory, it turns out, can reveal a lot about how the economy works. Glattfelder shares a groundbreaking study of how control flows through the global economy, and how concentration of power in the hands of a shockingly small number leaves us all vulnerable. (Filmed at TEDxZurich.)

Check out this amazing TED Talk:

James B. Glattfelder: Who controls the world?

Sent from TED app for iOS
http://itunes.com/apps/tedconferences/ted

Marisol R.

http://online.wsj.com/articles/google-considering-investment-in-new-trans-pacific-cable-1403275030

This article once again shows that the proactive approach by US technology companies of being the first to connect the most populated region of the world to the US.  In essence, they are both making good use of their cash, controlling their costs, and controlling the access to information.  ‘

Stefanie

While in everyday life stability and predictability are in high demand , quite the opposite is true in a  world of energy trading. At the times of relative stability  energy traders are bored because moneymaking opportunities are scarce.

Polar Vortex definitely cheered them up with unusually large price swings in natural gas.

“We did have a particular strength in commodities given the volatility in the market with the weather,” CFO Ruth Porat told The Wall Street Journal. “Commodities tend to perform better in extreme weather.”

Now is even better. Current situation of confrontation between Russia, Ukraine and EU, which might impact lives of millions of people in Europe creating perfect opportunity for the energy traders to rip big benefits. Prices of natural gas went up significantly on a concern that Russia will cut the gas supply. Due to the recent events in Iraq oil market again became very volatile with prices hitting $115 for the barrel of oil to the sheer joy of energy traders. So when we consider crises in Iraq or Ukraine as destabilizing factors, traders love the opportunity that these instability factors present because that where real game starts.

http://www.forbes.com/sites/chipregister1/2014/06/19/what-do-iraq-the-ukraine-and-the-polar-vortex-have-in-common/

Rada

I thought that this was very interesting as we spoke about Soros and the global supply chain in class.  Here’s a quick highlight:

Niedermaier has teamed up with investor Alexander Soros— the son of billionaire financier George Soros— and the Global Emerging Markets group (GEM) to raise $1 billion in his mission to revamp the vast infrastructure that moves millions of products and materials around the world.

He said industries like electronics and toy manufacturing are full of inefficiencies and outdated equipment that can be upgraded for a nice profit. His Tau Investments has chosen as its first target textile and apparel manufacturing in emerging markets, a $1 trillion industry that has been in the headlines recently for such disasters as the Rana Plaza building collapse in Bangladesh last May that took 1,129 lives.

Andrew Bonacci

This is recent article that touches on import, export and taxes between the US and China.  He’s some of the highlights from the article:

In  2009, the union claimed a surge in Chinese tire imports from 2004 to 2008 had cost 7,000 US jobs, and it sought restrictions on the imports. US President Barack Obama backed the move, and in September 2009, the administration levied a new duty of 35 percent on tire imports, which were imposed in addition to a pre-existing 4 percent tariff.

China’s exports of tires to the US market more than doubled to 50.8 million units last year, worth more than $2 billion. In the first quarter of 2014 alone, tire imports from China surged another 24.6 percent, the union said.

Andrew Bonacci

Hi all,

A week hasn’t passed, yet last Friday seems like an eternity ago. During our intense debate, I indirectly referenced the incident that got Apple into a lot of trouble and made the infamous Foxconn a household name in the United States. The New York Times article below goes into excruciating detail about the inhumane and unsafe living and working conditions at Foxconn’s factories.

Please skim the article below to better understand the situation:

http://www.nytimes.com/2012/01/26/business/ieconomy-apples-ipad-and-the-human-costs-for-workers-in-china.html?pagewanted=1&_r=2&sq=Apple%20working%20conditions&st=cse&scp=23&

Given the intense pressure, Apple hired a labor auditor to review the practices and conditions in the Foxconn factories. The auditor’s report confirmed what everyone already new: Foxconn bad. 😉

In all seriousness: imagine a sweatshop type environment the next time you play with your iPad or Xbox or just about any other piece of high-end electronics, as it is likely to have been assembled by one of the 1.2 million Foxconn workers. Ultimately, Foxconn had to make concessions and improve the environment. They also had to increase wages.

Now you ask, why do we care Leo? Well, the pressure from the American people, which forced Apple to audit and eventually pressure Foxconn to resolve these issues, which is forcing Foxconn to improve the working and living standards for its employees, came along with an interesting, yet unexpected side effect. An externality, if you will. The improvements come at a cost; an increase in price to be passed along to Foxconn customers (Amazon, Microsoft, Dell, etc.).

The increase has no bearing on Apple’s bottom line, since it is a negligible portion of the overall unit price. The other technology companies will have a tougher time dealing with potentially higher labor costs because their profit margins are far thinner than Apple’s.

See the irony? The issue that forced the world to force Apple’s hand to solve these human rights violation is literally giving Apple a competitive advantage. Freaking Steve Jobs!

You can follow the rest of the story in the Huffington Post article below:

http://www.huffingtonpost.com/2012/03/30/apple-foxconn-pledge-wages-china_n_1390775.html

Leo Bodden