Can strong international corporations offset collapsing economies? Maybe.
My radar is picking up increasing international activity – and lack of activity. Much of it is defensive.
Retailers are postponing planned expansions in Europe.
Airlines are erasing European flights from upcoming schedules.
Europe, itself, is on the ropes.
Major international players are withdrawing their exposure to the European market in a major No Confidence vote on the Euro.
Initially, I wonder whether these defensive pull backs simply anticipate recessions or do they, in fact, cause recessions?
Finally, I’m left with a greater question… Does it even matter?
The looming destruction of an entire currency makes the combined size of corporate repositioning insignificant.
Entire countries and continents teeter on collapse under massive debt.
Sadly, U.S. debt is proportionately far worse than European debt.
Corporate Life Boats?
Interestingly, as international companies flee weak economies, their defensive and creative instincts may become the saving grace for those of us who enjoy food, water, heat, and shelter.
Companies move faster than countries. In some cases, companies are actually bigger than countries. And in nearly all cases, internationals have far better balance sheets than countries.
Huge international corporations, moving all at once, can leverage as much or more financial power than the countries where they do business.
Further, the lightening fast debt and currency markets provide significant liquidity and safety to international corporations, as internationals trade against issuing countries and against each other.
Sovereign Bad Behavior is evaluated in mere seconds, on a massive scale.
The U.S. Perspective
What does all this mean on the U.S. side?
Consider that growth and earnings of major U.S. corporations come largely from overseas markets, not from the U.S. itself. Look at the skewed earnings of the S&P 500 for proof.
Here’s the irony… The outflow of resources, talent, and capital leaving the U.S. may run smack into the withdrawal of assets from European markets.
So, now what?
Combined with unsettling signals coming out of China, it would appear that an absurd amount of cash and productivity will slosh around the world, looking for a place to prosper.
For possible destinations and explosive growth, we’ll need to revisit the BRIC countries. And we’ll come back for a fresh look at non-destructive currencies, like the Canadians and the Australians and see how they’re performing.
Lurking in the background, of course, is the critical influence of the 2012 U.S. presidential elections.
Major Trends Affect U.S. Jobs
The U.S. job market will be superseded by national and international events.
Hiring may improve if employers handicap the presidential campaigns as favorable.
Or, unemployment may seem to decrease as a large, aging work force retires, goes underground, or does both. The incoming generation, after all, is nowhere near as large as the outgoing generation.
(And what, really, is the difference between long term unemployment compensation and a Social Security check?) If citizens receive money without working, while unemployment ratios simultaneously improve, have we not achieved a politician’s nirvana?
Despite the very real threat of global chaos, I continue to discover cautious job creation by international corporations, or by those who serve international corporations.
People far smarter than I, with nearly unlimited resources, spend their careers calculating where in the world to bet on growth.
Pay attention to what they say and do.
Intelligent, disciplined job creators will show us where to go.
Meanwhile, in the U.S., there are some jobs that simply can’t be shipped overseas…
Despite the best efforts of our government to muck it up (or because of it, for all I know,) I continue to see huge demand in the energy sector.
Projects lurch about as law makers stack regulations upon regulations.
But energy development moves forward, nonetheless.
The United States has unfathomable energy resources, and the world wants access to them.
Even as the windmill people clamor for more government support, U.S. energy companies are preparing to sell and ship massive quantities of excess natural gas to other countries. We have more than we are prepared to use!
The shale plays have incalculable value.
And I remain fascinated how an increase in oil production might collide with our limited refining capacity.
I like the world of automation.
Automation and energy continue to look very, very strong.