Professor Elam

I urge students to subscribe to Business Week. Here is a sampling from the July 14-21 issue of why you should do that.

I have stated that Chrysler is about where American Motors was in 1970. Cars needed to be re designed to be smaller and more efficient, American Motors did not have the money to do a ground up front wheel drive like everyone else. There attempt at muscle cars failed. They had not pickup. Chrysler bought them for Jeep and AM was toast. Note this was ten years after VW made it clear Americans would buy well designed thrifty cars with the Beetle, even then a thirty year old design from pre war Germany. Now amid another fuel crisis, Chrysler has killed the Neon, their only sub compact with any economy claim. They literally have not economy car to sell.  I doubt they will be in business in eighteen months.  Perhaps Navistar aka International would be interested in the RAM and Jeep. After all International invented the 4 wd SUV with the Scout and Travelall back in the 1960s.  Then amidst the energy crisis of the 1970s they dropped them.

Lehman 52 week range, 75-20, yech, go back in our archives to Jan-March and see my comments about Lehman. I was quite skeptical when Maria interviewed Lehman’s CFO then. Since then that CFO was re assigned for failing to convince skeptics things were AOK, so much for accounting integrity.

For the Olympics factories that consume a total of 13 gigawatt’s of electricity may be taken off line, China is trying to reduce air pollution during the Olympics. This is nearly half of Mexico’s total industrial electric capacity.  So why should you care?

Glad you asked.
The Shanghais Stock Exchange has collapsed 55% in less than a year.
The high cost of fuel means that companies are coming back here rather than ship across the Pacific. In addition costs are rising in China.
Shutting down electricity production means that factories will shut down which means Americans will have to do without some goods, this will be just another reason to bring production back home.
All of which means I do not think,  that the Dallas Logistics Hub may not  attain its goals nearly as fast as they thought. This is a project conceived of years ago and in the meantime the energy picture has changed the original assumptions.

Cheating at the GMAT on line ScoreTop Site, gee I am shocked. Needless to say the Chinese proprietor of this site is back home in China safely out of US authorities reach. Hmm, yet another reason not to deal with these guys.

Meanwhile in that other conventional wisdom fountain of ‘everyone is going there’ the Bombay Stock Exchange is down 40% this past year. Whoops, as Jim Rogers said in Adventure Capitalist, too much red tape.