Contributed by Lee Adler, of The Wall Street Examiner. The Fed, ECB, BoJ, and BoE all deal with the same banks. Of the Fed’s 21 Primary Dealers, its sole counterparties, only seven are US domiciled. Three are Canadian, eight are European, including three British banks, and three are Japanese. All of them are major players in Europe and Japan.
The “Chinese dream” is the dream of the whole nation and also of every individual Chinese, explained Fu Ying, chairwoman of the Foreign Affairs Committee. The slogan had been coined by President Xi Jinping after he’d ascended to the throne of the Communist Party. It would benefit the world, she said. But for the richest Chinese, it has already come true.
“Yes, the industry is in collapse mode, but it is not all bad, it is just a healthy shakeup needed in a maturing industry,” an insider wrote in an email. Then he offered what he called “a slightly less gloomy take on the industry and with 50% more silver lining as well.”
The solar-panel price war waged by state-subsidized Chinese companies killed a slew of manufacturers worldwide. Now, much of solar-panel manufacturing takes place in China. To stay alive, they cut costs – and corners. Defects are ballooning. And “cheap” solar panels suddenly get very expensive. A cruel twist for an already threatened industry.
The solar-panel industry, once fattened by taxpayer subsidies and false hopes, has been in a death spiral around the world. In the US, a slew of photovoltaic standouts like Solyndra went under, taking billions of subsidies and investor capital with them. In Germany, it has been just as brutal. Even large companies are licking their wounds.
American manufacturing renaissance? Maybe not. But China is losing the low-wage edge. With manufacturing already in the doldrums, dizzying wage increases, long a reality on the factory floor, have become government policy. Now there are consequences: offshoring and automation.
Aircraft maintenance was a highly paid blue-collar job that required education, training, manual skills, and brains. It was one of the perfect American middle-class jobs with generous healthcare, retirement, and vacation benefits; and free flights! They were working for icons like Delta, American Airlines, Continental, TWA, or Pan Am. Icons indeed!
Where German industrial companies plan to invest: a slew of losers out there, including Germany. But one country stands out … and the reasons why!
There could not possibly be any clouds on the horizon with the Dow and the S&P 500 setting all-time highs, while the German DAX is marching relentlessly towards 8,000 and the Japanese Nikkei is soaring. But just then, a deeply connected representative of the world’s real economy spoils the rosy scenario.
Putzmeister was a paragon of the German Mittelstand—family-owned firms with innovative technologies and high-quality manufacturing that dominate their niches worldwide. But in 2012, it was acquired by a Chinese giant. Now its German CEO reveals just how impossible integration is and how dire not only Europe but the world look to him, particularly China.