Job Cutting = Stock Price Rising?

I had always heard that when a big multi-national company announced they were cutting a signifcant number of jobs, their stock price would rise. Something to do with lower costs, better ROI. Today IBM announced job cuts for 13,000 workers and their stock rose 1 percent. I wonder however if they figure in the longer term cost of loss of domain expertise, higher training costs, mistakes made by rookies, and burn out from the remaining over-worked staff?

I'm not advocating against job cuts, by any means, as I will be first to admit that I do not know all the details involved, but I wonder how they weight all the criteria before making a decision like this. It is going to cost them somewhere between 1.3 and 1.7 billion dollars to do the cuts so I wonder how many years it will take to cover that expense. Perhaps it results in tax deductions that lessen the blow.

They stated the cuts were made to focus on higher growth markets. Where exactly are those higher growth markets, and why not offer relocation to some of the skilled workers in Europe where the cuts are being made. Is it rather that they are going to focus on higher growth markets with lower cost resources from places like India and China?

I'll ponder that for awhile...

Who Sets Your Price?

I received one of those chain emails the other day. This one stated that the oil prices are controlled by a few people, and if everyone banded together and stopped purchasing gas (or petrol for your overseas types) from only a few select companies, it would pressure them all to reduce the price. From what I hear, this has been going around for a while, but the prices do not seem to be affected (other than going up!).

This begs the question, can consumers work together to push prices lower on a commodity? I think back to these global trade sites that I've been visiting. If they sent a message to all of their members requesting them to stop buying from a certain company (forget the negative press they would get), I wonder what kind of effect they would have? Could the same thing work for diamonds for example? Diamonds we all know are a controlled price commodity.

When the consumer word of mouth power of the Internet meets the marketing power of the corporation, who will win out in the end? This has caught my interest so I think I'll do some more research and let you know what I find.

Where are you Trade Leading Me?

The learning continues. I did some additional searches for global trade and found a whole series of web sites that cater to those who want to trade in other countries. Being from Canada, I did a search for Canadian trade websites and found one called NuDeal (http://www.NuDeal.com) where you can post trade leads (buy and sell offers essentially).

They offered a free membership so I signed up. I think I'll try interviewing someone by sending them a message through the site. Likely they'll ignore me as I'm not buying anything, but who knows?

I found other trade leads sites in my travels like Alibaba.com, EC21.com, and Worldbid.com as well. Looks like they are all active busy sites. It appears that people post on each of them as it is free to become a member.

I'm thinking maybe I'll end up with an Import / Export business at the end of this, buying widgets from one place and selling them to another. That could be interesting, but I don't know the first thing about how to do that, and the thought of buying something from overseas still scares me for some reason... again likely my ignorance.

Its the Global Economy Stupid

I start my journey by asking a simple question... What is the global economy? I hear that buzz word used so often it makes my head spin. I see it mentioned in print everywhere. I hear the pundits proclaiming the virtues or ills of a worldwide marketplace on cable news programs nightly. Why all the fuss?

Before I can start walking the road to understand global trade I need some type of roadmap. I decided to begin by gaining an understanding of the definition of "The Global Economy" with a Google search which returned twenty five million, five hundred thousand results in 0.31 seconds.

I found an article at: http://www.ericdigests.org/1993/global.htm that has some good information. One of the first things I learned is that the global economy is nothing new... In fact it has been around for hundreds of years. Okay, now I'm confused. Every where I look I see messages about the "new economy" or the "emerging global economy" and the like. If it isn't new, then why all the buzz?

It appears I'm not the only one questioning this. Erik Rauch who has a website at: http://swiss.csail.mit.edu/~rauch/misc/globalization/ thinks the whole globalization thing is overrated at best, and horribly exaggerated at worst. I'm not sure I agree 100% with him, but that could be out of ignorance more than anything. The plot thickens.

I wonder half jokingly if there is some shadowy group out there pushing the global economy thing for some underhanded purpose... hmmm We'll this is not a consipircy blog so I'll just leave that alone for now.

The Global Economy Blog

I created this blog as an outlet for my research into the world of global trade and commerce. A boring subject perhaps? I don't think so, because as the world shrinks and the Internet grows, I believe the next two decades are going to bring amazing and very interesting changes. I plan to chronicle one person's view of these world economic events both positive and negative (in one person's opinion). I invite you to follow along and see through my eyes; the emerging global economy, country to country commerce, and how politics effects everything.

What is my education and experience in the field? Well, none frankly, but that is the point. I plan to become an expert on the subject. I do not have any pre-conceived notions of what I will discover, what my viewpoint will become, or if I'll stop blogging tomorrow and take up carpentry. What I do know is that my intentions are honorable, my morals are intact, and my naivety is rampant.