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>I don't understand why this isn't a bigger story. Why isn't the stock market reacting at all? GM, Ford, Toyota are shutting down car plants because they can't

>I don't understand why this isn't a bigger story. Why isn't the stock market reacting at all? GM, Ford, Toyota are shutting down car plants because they can't get parts, and the financial system shrugs! Because the stock market doesn't care about any of that. If reason commanded the financial system, pretty much the entirety of manufactories would never had moved to South Asia. They moved not because it was in the interest of the people or the several countries, but because it was more favourable to the shareholders, and all these "businessmen" who have no loyalty to any country.

gruez 5y ago
>If reason commanded the financial system, pretty much the entirety of manufactories would never had moved to South Asia. They moved not because it was in the interest of the people or the several countries, but because it was more favourable to the shareholders, and all these "businessmen" who have no loyalty to any country. That seems... totally consistent with reason? Companies cutting costs to increase shareholder profits is totally consistent with reason. It might not be consistent with reason for the welfare for the entire country, or for the poorest, but that doesn't mean it's not reasonable.
- throwaway59553 5y ago
  Please continue to ignore that the whole economy is a house of cards, with the recurrent crisis every few years where taxpayers have to bailout the same people. It seems very sustainable. Companies have to stop working because the supply chain is a mess? Very reasonable. Your post doesn't sound like mental gymnastics at all.
  - gruez 5y ago
    > Please continue to ignore that the whole economy is a house of cards, with the recurrent crisis every few years where taxpayers have to bailout the same people. It seems very sustainable. What bailouts are you talking about? The only ones that come to mind are the 2008 financial crisis and covid. The latter seems less "the whole economy is a house of cards" and more "we had to shut down the economy for several months". Also, how is this related to the original comment about offshoring being unreasonable? It looks like you saw a "the economy is bad" post and wanted to chime in with your own "the economy is bad" thoughts. >Companies have to stop working because the supply chain is a mess? or you know, covid.
  - robbedpeter 5y ago
    It's not "brittle," it's "just in time." It seems to me a whole lot of people were given authority to make decisions and agreements that collectively whittled away at the ability of participants in US markets to be responsibly prudent. We allowed players in the market not subject to labor, quality, ecological, or criminal accountability, promoting an endless deluge of cheap crap at the expense of business (and thus economic) resilience. This led toward more consolidation, with acquisition and endless growth replacing reserves and correct planning for lean times, ensuring that only the biggest players in a rule abiding market can survive. When tshtf the boomers will die first. As the world burns we can at least enjoy a little schadenfreude.
- toss1 5y ago
  It is totally consistent with SHORT-TERM reason The west is focused on quarterly profits (you get what you measure). China is focused on global domination. While the west thinks that they are exploiting cheap Chinese labor and shipping, the CCP is exploiting they west's myopic focus on short-term profits. So while the west "wins" for a few years by under-paying poor Chinese workers, China wins over decades and centuries by ensuring they extract maximum intellectual property and manufacturing know-how, and corner key markets, to the level that the supply chain is now a key military threat. This will be recorded as a strategic blunder of historic proportions.
  - gruez 5y ago
    > It is totally consistent with SHORT-TERM reason 1. alternative is that they don't and their competitors do, and they get driven out of business. "Long term" doesn't mean anything when you're bankrupt short term. 2. my point in the previous comment is that the parent commenter explicitly said it was favorable to the shareholder, which contradicts his assertion that it's "not reasonable". >The west is focused on quarterly profits (you get what you measure). China is focused on global domination. The same investors that buy stocks at 34x annual earnings, necessitating more than three decades to make back their investment? https://www.multpl.com/s-p-500-pe-ratio https://www.multpl.com/s-p-500-pe-ratio
    - toss1 5y ago
      The point is NOT that given the current system as the leaders of the west set it up that it is irrational. You correctly identify some trees, and miss the entire forest. The point is that the western leaders SET IT UP THIS WAY. Effectively, they externalized the costs of losing the massive geopolitical/economic strategic advantage onto future generations, who will have to deal with the fallout of an authoritarian regime in a very strong geopolitical position. And these "leaders" effectively sold out for a very transient advantage. What could have been done differently? 1) Implement laws preventing transfer of IP to China, to counter their laws requiring it. 2) prevent critical components of defense systems from being made there, both to avoid technology transfer and to maintain onshore manufacturing skills 3)Implement quotas and tariffs that reflect the actual costs of the strategic loss. 4) Encourage investment in other low-wage countries that do not pose the same geopolitical risk. This is just the beginning, and none of it was done. Once those restraints were removed, of course it becomes in the interest of every manager to offshore to the newly opened areas. >> The same investors that buy stocks at 34x annual earnings, necessitating more than three decades to make back their investment? Nonsense, decades is not the typical investment expectation. If they are investing at 34X PE, they expect bigger returns sooner. Amazon is a great example, whee you could invest at effectively infinite PE ratios and double your money within years, or get 10X within 7 years. Recent price $3475. It passed $340 in Q1 of 2015, and at that time the P/E was effectively infinite with negative earnings per share. [1] Your example more even proves the point of short term focus. By your example, if investors lost money really means that they're investing for the long term - preposterous. [1]https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-ratio https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-rat...

gruez 5y ago

>If reason commanded the financial system, pretty much the entirety of manufactories would never had moved to South Asia. They moved not because it was in the interest of the people or the several countries, but because it was more favourable to the shareholders, and all these "businessmen" who have no loyalty to any country. That seems... totally consistent with reason? Companies cutting costs to increase shareholder profits is totally consistent with reason. It might not be consistent with reason for the welfare for the entire country, or for the poorest, but that doesn't mean it's not reasonable.

throwaway59553 5y ago
Please continue to ignore that the whole economy is a house of cards, with the recurrent crisis every few years where taxpayers have to bailout the same people. It seems very sustainable. Companies have to stop working because the supply chain is a mess? Very reasonable. Your post doesn't sound like mental gymnastics at all.
- gruez 5y ago
  > Please continue to ignore that the whole economy is a house of cards, with the recurrent crisis every few years where taxpayers have to bailout the same people. It seems very sustainable. What bailouts are you talking about? The only ones that come to mind are the 2008 financial crisis and covid. The latter seems less "the whole economy is a house of cards" and more "we had to shut down the economy for several months". Also, how is this related to the original comment about offshoring being unreasonable? It looks like you saw a "the economy is bad" post and wanted to chime in with your own "the economy is bad" thoughts. >Companies have to stop working because the supply chain is a mess? or you know, covid.
- robbedpeter 5y ago
  It's not "brittle," it's "just in time." It seems to me a whole lot of people were given authority to make decisions and agreements that collectively whittled away at the ability of participants in US markets to be responsibly prudent. We allowed players in the market not subject to labor, quality, ecological, or criminal accountability, promoting an endless deluge of cheap crap at the expense of business (and thus economic) resilience. This led toward more consolidation, with acquisition and endless growth replacing reserves and correct planning for lean times, ensuring that only the biggest players in a rule abiding market can survive. When tshtf the boomers will die first. As the world burns we can at least enjoy a little schadenfreude.
toss1 5y ago
It is totally consistent with SHORT-TERM reason The west is focused on quarterly profits (you get what you measure). China is focused on global domination. While the west thinks that they are exploiting cheap Chinese labor and shipping, the CCP is exploiting they west's myopic focus on short-term profits. So while the west "wins" for a few years by under-paying poor Chinese workers, China wins over decades and centuries by ensuring they extract maximum intellectual property and manufacturing know-how, and corner key markets, to the level that the supply chain is now a key military threat. This will be recorded as a strategic blunder of historic proportions.
- gruez 5y ago
  > It is totally consistent with SHORT-TERM reason 1. alternative is that they don't and their competitors do, and they get driven out of business. "Long term" doesn't mean anything when you're bankrupt short term. 2. my point in the previous comment is that the parent commenter explicitly said it was favorable to the shareholder, which contradicts his assertion that it's "not reasonable". >The west is focused on quarterly profits (you get what you measure). China is focused on global domination. The same investors that buy stocks at 34x annual earnings, necessitating more than three decades to make back their investment? https://www.multpl.com/s-p-500-pe-ratio https://www.multpl.com/s-p-500-pe-ratio
  - toss1 5y ago
    The point is NOT that given the current system as the leaders of the west set it up that it is irrational. You correctly identify some trees, and miss the entire forest. The point is that the western leaders SET IT UP THIS WAY. Effectively, they externalized the costs of losing the massive geopolitical/economic strategic advantage onto future generations, who will have to deal with the fallout of an authoritarian regime in a very strong geopolitical position. And these "leaders" effectively sold out for a very transient advantage. What could have been done differently? 1) Implement laws preventing transfer of IP to China, to counter their laws requiring it. 2) prevent critical components of defense systems from being made there, both to avoid technology transfer and to maintain onshore manufacturing skills 3)Implement quotas and tariffs that reflect the actual costs of the strategic loss. 4) Encourage investment in other low-wage countries that do not pose the same geopolitical risk. This is just the beginning, and none of it was done. Once those restraints were removed, of course it becomes in the interest of every manager to offshore to the newly opened areas. >> The same investors that buy stocks at 34x annual earnings, necessitating more than three decades to make back their investment? Nonsense, decades is not the typical investment expectation. If they are investing at 34X PE, they expect bigger returns sooner. Amazon is a great example, whee you could invest at effectively infinite PE ratios and double your money within years, or get 10X within 7 years. Recent price $3475. It passed $340 in Q1 of 2015, and at that time the P/E was effectively infinite with negative earnings per share. [1] Your example more even proves the point of short term focus. By your example, if investors lost money really means that they're investing for the long term - preposterous. [1]https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-ratio https://www.macrotrends.net/stocks/charts/AMZN/amazon/pe-rat...