Several months ago I posted an article contending that decoupling – the notion that movements in emerging markets correlate minimally, if at all, with those in mature markets – was dead. The vertiginous rise in most emerging market indices over the previous seven or eight years stood in stark contrast to the anemic performance of the S&P 500 over the same period. As the financial meltdown and subsequent recession hit, there was a brief moment when it seemed that many of the emerging markets, especially in Asia and Latin America, might emerge unscathed. Subsequent events indicated that emerging markets, especially in Africa but also Southeast Asia, were suffering as much as the OECD countries, but with much less of a cushion against humanitarian catastrophe. In some parts of Africa, a five per cent drop in GDP can push millions of people into starvation. Decoupling, as I wrote, was dead. Even the miserable Congolese worker scrabbling in the dirt for diamonds or gold or the columbium-tantalite used in cell phones, was hit by the collapse in consumer and industrial demand in America, Europe, Japan, and China.

I may have been wrong. [click to continue…]



Even before this week’s Economist came out with “The Collapse of Manufacturing,” emblazoned on its cover, I had been thinking about manufacturing. Actually, I have been thinking about it for a long time. I love going to factories, seeing massive pieces of equipment, hearing the clang of machinery, feeling the heat from molten glass and metal, seeing how they put the filling between halves of an Oreo cookie, and watching people dressed like extras in a James Bond movie padding around in a silent clean room in their sterile slippers, making silicon wafers. [click to continue…]


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