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Not a debate. Just adding more info about disk drive makers. Seagate
also has production in that region as well. Off the top of my head I do
not know which. But here is the problem. In simple terms lets look at
supply and demand and where they intersect is the market price for a
good. There will be less demand from effected Asian countries. Hence
over supply and prices must move lower to reach equilibrium again. Since
they have already been producing over seas there will be no net gain in
workers wages (or disposable income) in these countries unless they
increase production. In some countries, like Korea, where the IMF is
involved. They my actually have to cut production to adhere to the IMF
policies for slowing growth.
I do not know all the details of what is going on there. But there is a
wealth effect taking place there. Where individuals will have so
substitute more labor for leisure to maintain a perceived standard of
living. Greenspan also felt that the same thing had occurred here in the
US when our markets took a tumble.
Maybe the point here is that these companies are not going to go up but
they lose time to make profits. When Ralph Acompora came to the twin
cities this is what he had said about Boeing (BA). That in the long run
you are not going to be hurt holding BA. But instead you will miss other
opportunities in the market to make money because you choose to keep
your money tied up in BA. (He was giving an example of an investor who
bought BA 5 years ago.) He did say that this person was going to lose
time. The analogy is similar to the Asian crises. That is if it doesn't
get worse.
Harley
DanMartinz wrote:
> While it's not my job to debate here, hard drive manufacturers have
> already
> moved production overseas. They seem to be doing all right. Ex.: WDC
>
> manufactures drives in Singapore or Malaysia.
>
> Daniel L. Martinez
> Orange, CA
>
> In a message dated 97-12-12 07:55:33 EST, meyer@xxxxxxxxxxx writes:
> << You have a good point here. Iomega moved production overseas to
> take
> advantage of cheap labor. As soon as they miss one earnings estimate
> look out. So how else will they improve the bottom line. Raise
> prices-thats a joke. You know the competition won't let them. >>
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