• ..Dec..Jan..Feb..Mar..Apr..May .. 6 months hor .. must be a world record . And 6 days for me to find this reply too .

• Inspite of scientific studies.. I conclude that cows have loonnggg memories.

• Chartists will also note it has gone sideways out of the downtrend line. Readers to make their own opinion please .

• You said investor invests based on fundamentals mah so fundamental investor mah redundant lorr

moo moo,

da way u bang bang, step step, trash trash  da stock makes me think u r giving the stock a death sentence ...

like u say, there is always a good side n the bad (back) side but most ppl tend to shut their ears on the bad (back) side.. but imo hor, on you hor, u very the like to talk on the bad (back) side oni...

anyway... yes... wat u hightlighted is not totally wrong also lar...

yea lor, will jus have to keep an eye on how they fair on their expansion venture...



 

side.. but imo hor, on you hor, u very the like to talk on the bad (back) side oni...

Weiii... laying out the bare bottom facts is back side meh????

yat - yee - sam - sei - mmm - luk ... oone rende moone naale anji aare .. cicaks can count in tamil

High oil prices reversing impacts of globalization, outsourcing of jobs: CIBC

May 27, 2008

OTTAWA — The rising cost of energy is undercutting global trade by raising transportation costs to such levels that businesses will be forced to look closer to home for suppliers, says a CIBC World Markets report.

"Globalization is reversible," the bank's chief economist, Jeff Rubin, wrote in the study released Tuesday.

"In a world of triple-digit oil prices, distance costs money. And while trade liberalization and technology may have flattened the world, rising transportation prices will once again make it rounder."

Rubin and co-author Benjamin Tal say the cost of moving goods - particularly heavy materials such as steel - not the burden of tariffs, is the largest barrier to global trade today.

They calculate the explosion in transport costs caused by the record price of oil has effectively offset all the trade liberalization efforts of the past three decades.

In 2000, when oil was US$20 a barrel, the cost of transportation was the equivalent of a three per cent U.S. tariff rate, they say.

Transportation costs are now equivalent to a nine per cent tariff, and at US$150 a barrel for oil, they would amount to an 11 per cent tariff - about the average of tariff rates in the 1970s.

If oil goes to US$200, as the CIBC has forecast, "we are back to the tariff rates not seen since prior to the Kennedy Round GATT negotiations in the mid-1960s."

Tal said in a interview that not all trade liberalization flows are reversible because of transport costs, nor does their analogy hold for all products.

China and other Asian exporters, with their low labour costs, will still out-compete many North American industries, such as the labour-intensive textile sector.

But in products such as steel and heavy machinery, which have a relatively low labour content and are expensive to ship, Canada and the U.S. may see real gains in market share and jobs, he said.

"Are we seeing a major inflow of jobs back to the manufacturing sector? Not yet," he said. "But if oil prices continue to rise and transport prices even double from the current rate, you will see more and more jobs coming back."

United Steelworkers economist Erin Weir said the CIBC paper makes sense in theory, since globalization is partially made possible by cheap transportation costs.

Weir said he cannot point to any sudden increase in steel production in Canada, but noted that the country's steel industry has been acquired by foreign interests in the past few years, "so they must believe they are good investments."

The CIBC says already some niche industries have been affected by energy costs, despite the recent nature of the oil spike, which has seen the price double to over the past year to about US$130.

China's steel shipments to the United States are down by 20 per cent from a year ago, the worst performance in a decade, while U.S. domestic steel production has risen 10 per cent.

And there is evidence that other Chinese exports such as furniture, footwear, metal goods and industrial materials are also beginning to slow.

"How much of Chinese manufacturing production will be coming home remains to be seen," the report adds, "but there is certainly no reason why we should not expect to see at least comparable if not greater trade diversion than we saw during the OPEC oil shocks of the 1970s."

A big beneficiary could be Mexico, with its low labour costs and proximity to the U.S. market.

Canada will be a more modest beneficiary, says Tal, in that some manufacturers will face less competition from China, India and Korea.

On the other hand, high energy prices will have a minimum impact on Canadian exports, Tal added, since the vast majority are bound for the nearby U.S. market, and many are in commodities, for which markets have few alternative sources.

 

(Altogether now... oone.. rende.. moone.. )

Last edited on Sat May 31st, 2008 13:27 by KayPee