Mark Mahorney at BlogginWallStreet takes slight delight at the trading problems they've recently been having in Tokyo:
In the past few years a heck of a lot of money has been funneled into international equity funds, much more than has gone into domestic funds. Honestly, I like seeing these problems emerge sooner rather than later. For one it means they'll have to fix the problems and the world's markets will improve. But most all, we compete for assets and I wouldn't at all mind seeing some of the money we've sent overseas come back, and more foreigners sending their money here if people get a little nervous about their money over there. And they should be. That would be good for the dollar, growth, productivity, and stocks.
It seems that rooting for the home team has recently become dirty and politically incorrect. It's been associated with ignorant protectionism. A couple of years ago our business leaders took a public relations beating on the issues of globalization, outsourcing, and sending jobs over seas when our own job growth was stagnate and everyone was crying stagflation. Somehow they've managed to turn that around on us to where we're starting to think it's not ok to say hooray for our side. It's a bunch hooey I tell you. There's a big difference between aggressively competing and protectionism. Having the best financial markets in the world and attracting foreign capital is good for our country, contrary to what Warren Buffett would have us believe.
Our take: It's good to be competitive, but weakness abroad does nothing for us. As for "seeing some of the money we've sent overseas come back", it's hard to know what he's talking about. The US, as everyone knows is absolutely awash with cash. We have more than we know what to do with men are getting plastic surgery, janitors are buying second houses, children are replacing their iPod Minis with iPod Nanos. If more cash started coming over to us, for investment, we should be tempted to yell "take it back", your money's no good here.
I was thinking more about the outsourcing homework story we talked about yesterday. What about it is so problematic, and how is it different than any other outsourcing? Yes, part of the problem is that students can avoid learning, by outsourcing their computer science to someone in India, but the real problem lies, I think with what the student is likely to do with their surplus time. If the student were a theoretical physics genius, the next Einstein, and he saved some time outsourcing his math-work, so that he could more deeply pursue something as groundbreaking as the theory of relativity, that would be fine. It would probably be a win-win for everyone, as outsourcing is supposed to be. Instead, the student will probably spend more time drinking, watching bad TV, and drinking.
This is the problem with the above logic about wanting more money to come into our shores. We aren't doing anything productive with all this extra cash. We've got an embarrassment of riches, time, and resources yet, by many accounts, we aren't using it all that well. Perhaps if we had a little less, it may concentrate the mind, and we'd start to use it better.
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