Word of the day: Reshoring

From FreightWaves:

North America’s reshoring of the global supply chain

With manufacturing and labor markets on the decline with North America’s traditional partners in Asia — and with trade with Russia collapsing — North America is in prime position to take advantage by reshoring global sourcing.

“For the most part we can keep this in America — or at least North America,” said geopolitical strategist Peter Zeihan during the opening keynote Tuesday at FreightWaves’ F3: Future of Freight Festival in Chattanooga, Tennessee.

Zeihan is the author of the recently published book “The End of the World is Just the Beginning: Mapping the Collapse of Globalization.”

He said one of the keys to boosting U.S. trade will be reforming the Jones Act, a century-old trade protection law that Zeihan contends boosts transport costs.

“This would help the country bring manufacturing back on the water in a very big way,” he said. “Mexico is now ahead of Canada from a labor productivity measure, which means that Mexico now needs a low-wage partner. Colombia and Cuba are the obvious candidates. It’s a much simpler system, one that is reliant on things close to home.

“When you want to do a trade deal with Russia or China, it’s a pain. But calling on a country like Colombia, which is kind of desperate and wants to be part of the club, it’s a much easier process and we don’t need to do things at scale to the same degree. A small container ship is fine, you don’t need that massive Triple E container ship.”

“If at the end of the five-year period we’ve succeeded in building out the industrial plant, we go back to a much tamer system that will be lower for longer, because the supply chains will be local, the processing will be local and we’ll be following our own labor metrics, which will have evolved because we will have had to do a lot more with artificial intelligence and automation than we currently have, especially as we bring in electronics manufacturing — we will have a choice.

“But if we fail to do that, then the 9% to 15% inflation continues and there are product shortages. From my standpoint, it’s a really clear path. The alternative is to go through the worst of it and get none of the benefits.”

For companies looking to survive in the new North American supply chain, “anything that makes you more modular and more capable and allows you to adapt more quickly is something I think that can provide an outsized advantage,” Zeihan said.

“We’re going to have fewer supply chain steps closer to home, and the competitive nature to that is going to be very different from just waiting for things to show up at the dock. We’re going to have the need to do everything that is currently done in Asia but in fewer steps and right in our own world.

This entry was posted in Economics, Employment, National Real Estate. Bookmark the permalink.

75 Responses to Word of the day: Reshoring

  1. grim says:

    Great example this morning:

    Apple Stock Lower As China Officials Order Lockdown Around Key iPhone Factory

    Apple (AAPL) shares moved lower again Wednesday after officials in China ordered a seven-day lockdown around a key iPhone factory amid an ongoing Covid outbreak that could snarl production heading into the crucial holiday season.

    City officials in Zhengzhou ordered the lockdown, which will last until November 9, in and around the 200,000-person factory run by Taiwan’s Foxconn, a key Apple assembler responsible for around 70% of the tech giant’s iPhone shipments. Data suggests infections in the city have tripled this week, to around 360 cases, prompting the strict lockdown response that echoe’s Beijing’s ‘zero Covid’ policies.

    Foxconn said it would keep the plant operating as part of a ‘closed loop’ strategy — where workers remain on premises until the lockdown order expires — but may struggle to maintain production levels as workers left the compound earlier this week in advance of the lockdown orders.

  2. grim says:

    From Assembly Magazine:

    Geopolitical Forces Drive Record-Breaking Reshoring

    Geopolitical forces are accelerating the growing trends of reshoring and foreign direct investment (FDI). Over the last decade, an expanding understanding of the routine logistics costs of offshoring drove an upward trend of reshoring. But now, our lack of self-sufficiency in many essential products has been revealed by the COVID-19 pandemic, the risk of China decoupling, domestic supply chain growth for clean energy, and the Russian invasion of Ukraine. Geopolitical risk and the advantages of domestic manufacturing are motivating more and more companies to move production back to the U.S., driving job announcements to record-breaking highs.

    In 2021, the private and federal push for domestic supply of essential goods drove reshoring and FDI job announcements to a record 261,000. We forecast about 350,000 job announcements in 2022, which will bring the total jobs announced since 2010 to over 1.6 million. The Reshoring Initiative Data Report discusses the trend and how reshoring will continue to be key to U.S. manufacturing and economic recovery.

  3. grim says:

    From IndustryWeek:

    Schneider, Deere Investing $76M in Reshoring Projects

    Executives with Schneider Electric and Deere & Co. will invest tens of millions of dollars to expand factories in Kentucky, Nebraska and Louisiana—with Deere’s move shifting some production work to the United States from China.

    Schneider will put to work a total of $46 million at plants making circuit breakers and other electrical output products in Lexington, Kentucky, and Lincoln, Nebraska. The investments will include new equipment and machinery that will be more automated and technologically connected than the plants, which are 65 years and 50 years old, respectively, are today.

    “To keep pace with the near and long-term demand for our products and to plan for the future, we must invest in our supply chain capabilities,” said Ken Engel, senior vice president of Schneider supply chain team for North America. “Our duty always, and particularly in the context of the current economic and energy environment, is to serve the needs of our customers and partners across our manufacturing and distribution network.”

  4. grim says:

    From the WSJ:

    Everybody Talks About Made in America. But It Isn’t That Simple.

    The supply-chain disruptions over the past few years have put a lot more focus on the idea of bringing manufacturing back to the U.S.

    Investors, customers, regulators and the general public have all voiced a desire for it. So has the Biden administration, which has emphasized the importance of making critical products such as semiconductor chips in the U.S. and is offering incentives for companies to reshore and create more manufacturing jobs in the U.S.

    Some 1,800 U.S. companies intend to reshore at least parts of their business operations this year, and reshoring activities created 261,000 jobs in 2021, according to a report issued by the Reshoring Initiative, an advocacy group. More executives are singing the homeward-bound song, too: In the first eight months of 2022, 106 corporate earnings calls mentioned reshoring, up from six in the same period in 2019, according to our analysis of Capital IQ Transcripts data.

    Some sectors, such as electric vehicles, vaccines, semiconductors and renewable-energy industries, are eligible for government support for their reshoring efforts. Industries that don’t get those incentives, however, might find the cost of reshoring outweighs the benefits due to the higher cost of labor, among other things, as well as the need for new infrastructure.

  5. The Great Pumpkin says:

    Overstocked retailers are cutting back on lenient pandemic-era return policies heading into the holiday season. Many companies during the pandemic worked to make online returns easy and free to appeal to homebound customers, fueling a habit of buying several items at once and returning unwanted items. The WSJ’s Rachel Wolfe reports the pattern has become costly for retailers, with the National Retail Federation estimating about 17% of all merchandise bought in 2021 was returned, totaling $761 billion. For retailers coping with excess inventories, the sight of goods coming back is proving too much too bear. Brands including J.Crew, Gap and Zara are shortening their refund and exchange windows and charging customers restocking fees to discourage returns. One survey shows the number of retailers offering free returns has fallen by half this year, suggesting easy returns is another trend unlikely to outlast the pandemic.

  6. Fast Eddie says:

    Question for all you savvy engineers: I bought a Generac generator (fuel injection) a few months ago. It has a small 12v battery which is nice because when fully charged, you just turn a key and the engine starts. It also has a pull start but here’s the catch: The battery needs to be fully charged even if you use the pull start. I don’t get that feature at all. What’s the point of having the pull start option? If the battery’s charged, why am I not just turning the key?

    Anyway, I bought the generator without realizing this limitation. My question is: Can I jump start the battery with jumper cables from a car battery? They’re both 12v. Or, better yet, do you guys know if I can use a hand-cranked generator to kick/jump start the battery/engine just to get it going?

    Are any of way familiar with hand-cranked power generators/starters, etc.?

  7. Juice Box says:

    Ed – Put it to “Run” on the switch Not “Start” and pull the cord. It should start.

    Lead acid batteries will die if not trickle charged most of these units come with a wall charger. You can start it with a car battery or good battery charger that has a start option, but the battery will need to be changed if it is old and dead.

    Here is a video on it, about starting it with no battery.


  8. Juice Box says:

    re: production back to the U.S.

    Let’s not continue to confuse assembly with manufacturing.

    What industry that actually produces goods from raw materials today the does not rely on obtaining materials from the global supply chain? Nothing mentioned above that is for sure.

    “electric vehicles, vaccines, semiconductors and renewable-energy industries, are eligible for government support for their reshoring efforts.”

    (electric vehicles) – lithium-ion raw materials for battery assembly.. after mining there is plaetary mixing, slurry casting, heat drying, calendaring. Where is that done in the USA?

    (vaccines) – even worse global supply chain issues from the raw materials to bioreactor bags, single-use systems, cell culture media filters, gamma sterilization, evn vials and needles.

    (semiconductor) – Need I say more? silicon, germanium, and gallium arsenide and the countries of Taiwan, Japan, and South Korea for fabrication and packaging?

    (renewable-energy industries) – There is no polysilicon made in the USA today from raw quartz for mass solar cell manufacturing.

    There is no way foward here, sure we can bring some plants and jobs back but lets face it the modern world relies on globalization of labor (for manufacturing) to the cheapest places. The jobs will move but few will end up on our shores.

  9. Juice Box says:

    re:” China ordered a seven-day lockdown”

    They also did a mass lockdown it for Disneyland Shanghai again, and locked in lots of people. To get out 3 negative tests over several days etc or Mr. Mouse breaks your legs.

  10. crushednjmillenial says:

    6 days to election day . . .

    My youtube ad just said “vote against the politicians choosing criminals over our communities.”

  11. BRT says:

    This hissy fit from blue checks on twitter is laughable. They don’t want to pay $8. They can toss the blue check and still tweet for free to their hearts content.

  12. Fast Eddie says:


    Thank you for that info. The manual (and a sticker message on the unit) explicitly states that it will not pull start even if the battery is dead. I can’t figure why the option to pull start if you need to have a charged battery. This is new, fuel injected unit.

    I have it plugged in to the wall charger at this moment. That’s fine as it will be charged soon enough. My dilemma is if I need to use it some day and the battery is dead.

    What do you know about a manual hand crank generator to kick start it? I guess the only other open is to jump start from the car? Should I buy a separate car battery and leave it on the side in the garage?

  13. crushednjmillenial says:

    There’s some polling that indicates the NH senate seat might be in play. That would be seismic, politically. I kinda doubt the R’s win in NH, but let’s run it . . .

    In that race, Maggie Hassan is looking to be re-elected. In 2016, she won by 1,100 votes, so it was very close.

    If the R’s win in NH, and sweep the toss-ups (PA, GA, NV, AZ), then the R’s would have 54 seats in the Senate.

    Looking ahead to 2024, Biden is at the top of the ballot. If current trends continue, his approval is pretty bad. In 2024, there are Senate races for seats currently held by D’s:


    D’s keep going woke, they might go broke and . . . we see 2024 with a R President, a 63 R’s Senate, and a R house. I suppose the D’s aim their message at the base for turnout, rather than tacking to the center. We’ll see in 6 days what the verdict is with respect to that strategy.

  14. crushednjmillenial says:


    -should be $8 minimum for blue check marks
    -plus, an escalating tiered monthly payment, based on your follower count (maybe, $1 extra/month if you have 100k followers, $100/month extra if you have 1m followers, $2k/month if you have 10m followers, etc.).

    TWTR is giving brands and news influencers a conduit for spreading the word or marketing themselves to their followers. TWTR can likely catch some of that value and still be a bargain for the big brands and similar.

  15. Juice Box says:

    Ed Model #? – Car battery will work fine plenty of amps..as I said your battery is only 10 amps…I still would try and put it in run mode and pull the cord no matter what the sticker says.

  16. leftwing says:

    Hey guys, nice conversations yesterday in response to crushed’s comment on jobs…shows the best of this board…

    Anon, really liked your comment on ‘false’ sensitivities we may set up that limit ourselves having comp discussions…”comp is literally half of the whole having a job deal”. Brilliant!

    Boomer, I take your comments on the specificities of certain workplaces but I haven’t heard nor seen anyone ever have their job in jeopardy for having a comp discussion…unless that person turned a ‘managing up’ meeting into a full blown disaster, which I doubt any professional here would do given the age, experience, and socio-economic background of us…

    Crushed, my two cents, with the understanding that corporates, jobs, groups/divisions are all different so some things may be more applicable than others…

    As someone said yesterday comp comparisons are not just about data but context…not enough to know Joe Schmoe earns X, but you need to know why he is getting X. So the goal is getting the most and best data with context.

    I agree with the avenues you posted. Regarding the discussion about co-workers sharing information it has happened everywhere I worked. Obviously, again, not in a blind, shotgun manner (everyone knows when bonuses come out you don’t run from office to office asking everyone their number) but there is definitely sharing among those co-workers ‘in your circle’. Caution is required here…having internal data may be of higher value since you have perfect context for that data (you are inside the group after all), however, with the ‘historical taboo’ on conversations it could come back and bite you on the ass. You know the co-workers with whom you have a relationship and trust. Don’t go outside that circle.

    Other avenues, randomly, so apologies for typos/clouded thoughts…

    Former co-workers. Great source. They’ve done the move, they’ve run the gamut, and in the process elevated their knowledge of the data and context. Plus, they have the current experience at their own firms.

    Up the chain, internally or externally. Very good source, they know the data down the chain (you and your peers) and have the context. Have you been on a project across divisions and hit it off with someone in the firm more senior outside your group? Great source. Sit down and have a ‘career path’ discussion. Be smart, respect boundaries, have an agenda, know the data point/context holes you’re trying to fill, and you’ll get there. On the other hand some of the best benchmarking I’ve had were external peers/competitors…funny anecdotal story there for another time.

    Recruiters (yeah, I know). Maybe this is dated, my experience was mostly pre- the explosion of LinkedIn and similar, but they are still out there…yes, they are repulsive bottom feeders, whores, etc, etc…but…they have perfect data and context. Off the top of their head or with a few keystrokes. Which is exactly what you want. The irony here is that most professionals treat them like absolute shit until the day they have to deal with one (which, needless to say, is not how one manages any social or business relationship). That creates a neat opportunity for anyone willing to even remotely treat them as human beings…I had a few (after screening out the 90% of buffoons) who were real who I would meet with regularly…yes, it started with them wanting to place me in some role I wasn’t interested but evolved…they have a role they need to fill that isn’t seeing the activity it should for a major client, they’ve asked me for help…do I know anyone? You get to a level of relationship and trust (and mutual self interest) when the point comes you need some data/insight, it’s there.

    HR Execs. Only slightly less repulsive than recruiters IMO (kidding, actually not) but same argument…they possess perfect data and context. Can you get it? I hit a point in my career where I was looking at a major move, it wasn’t down the middle of the fairway, and the delta on comp/benefits was very wide. Had no idea where the goalposts really were. Two people in my broad social/business network were HR execs. Fairly senior at the time, but not extraordinarily so, and in a totally different industry (hospitality)…but…it is their career and I made the ask of them if they knew someone in my space with whom I could have an open and confidential discussion…one hooked me up. It helped, a lot.

    To wrap, the common theme seems to be you need the best data in context and will get it most easily, confidentially, and reliably from a trusted relationship.

    No different than many other aspects of life I guess…purchasing a home, etc.

    One last thought…I did spend a little time on two firm Committees, Comp and Promotions. Again, pre- the explosion of a lot of the online apps yet even in that analog data desert it was very interesting…there was a cohort of employees who appeared to have a frighteningly near perfect handle on the situation, and others who simply floated with the flow. If you want to be in the former you can be. My experience is it will be for your benefit, at worst you’ve blown some time on trying to advance your career, in that case we’ve all spun our wheels on much less productive endeavors.

    Accurate data and context from reliable, knowledgeable, and trusted sources.

    Hopefully others can continue to weigh in on their experiences in different industries and jobs….GL

  17. Libturd says:

    “They also did a mass lockdown it for Disneyland Shanghai again, and locked in lots of people.”

    Hope they have enough turkey legs.

  18. Fast Eddie says:


    XT8000 EFI

    I was on the phone w. Generac, they’ll send me a new battery to try. I had an existing case number. The associate said it doesn’t know why it says on the unit that manual recoil will not work w/o full battery charge. I tried pull-starting when battery was dead and it would not kick over, even with “run” option on. I’ll let this battery go dead and try it again by putting the unit on “run” option. I tried it a few weeks ago, meaning; I put it on “run” and pulled the cord but couldn’t get it to kick over. I may buy a jump pack and use that as my backup, just in case. It’s a really nice unit but what good is it if I need to battle this crap?

  19. The Great Pumpkin says:

    Has to be scary in a hurricane.

    “In Miami, meanwhile, workers recently broke ground on the Waldorf Astoria hotel and residences, which would be South Florida’s first supertall tower. Deborah Acosta writes about how the developers are taking measures so that the more than 1,000-foot tall building can withstand hurricane force winds and remain stable around sea level.”

  20. Bystander says:

    “Some 1,800 U.S. companies intend to reshore at least parts of their business operations this year, and reshoring activities created 261,000 jobs in 2021, ”

    Thanks Joe. A real prez, not angry red hat hubris. He simply accomplished rather than twittering his own greatness for gullible low IQ masses

  21. A Home Buyer says:


    I had a longer response to your generator question but deleted when I saw Juice answered. I would wager the battery is needed for one or both reasons:
    – DC Excitation
    – Power for internal controls systems

    The pull cord is probably just a “fail safe” incase the automatic starting system fails, but the generator may still need external power to run through the internal monitoring / controls and field generation required during startup. More expensive / larger model diesels may have PMGs instead relying on external DC battery power for field generation, but DC batteries are pretty common in the stationary generator scene at least for controls on the diesel units.

    My knowledge of small / portable generators is severely lacking though, take it for what it is worth.

  22. A Home Buyer says:

    For what its worth, just reading the manual now.

    Generac says it needs the battery for “internal electronics and a fuel pump”. Without those systems powered it will not start.

  23. Libturd says:

    You should have just bought a $300 Champion. Just a pull-start. Been using it for 10 years now. I start her up once every couple of months with the first pull. About two years ago when she started requiring three or four pulls, I replaced the carb on Amazon for $17, including spark plug and some replacement gaskets. It took 15 minutes to do.


    She’s strong enough to power two refrigerators, a chest freezer, one window air conditioner, my router and ONT, our large screen TV and audio system plus our phone/ipad charging station. She’ll run for most of a day on 5 gallons of fuel. Use Sta-bil.

  24. 3b says:

    ADP job numbers surprise to the upside. Their numbers have been notoriously unreliable over the years of course, although I understand they have revised their methodology a few years ago.

  25. Bystander says:


    The entire recruiting landscape has changed in last decade. You can’t even compare before LinkedIn era to now. I am not sure if yout area would even have contract workers but it has exploded. We used to have 3 NYC area staffing firms at CS back in 2007. Now, it is all contingency hiring ie any sh$thead opens IT recruiting firm and asks for resume. I had 6 recruitets that I had solid relationships between 2007 and 2012 and not one has stayed in NYC financial area. LI changed it all as retainer fee got thrown to wayside. Back in
    2012, I was quoted daily rates with C2C as option. Today you will rarely come across anything other than straight hourly W2. It is a wasteland of garbage mostly. Post o LI, Dice, Indeed and find out with burner email

  26. Fast Eddie says:

    Home Buyer – “internal electronics and a fuel pump” — Yep, that’s the skinny. EFI is picky so I just have to be diligent and do what’s necessary. I’ll either get another battery or jump pack in case. A pain in the ass but all I can do is prepare.

    Lib – I bought a Cadillac of a unit so I need to just do what’s necessary to run it. I can’t return it. Had I known it needed a battery at all times, I would have reconsidered an alternative. Nothing to do now but maintain it.

  27. Libturd says:

    I find, when it comes to small engine appliances, simple is always way, way, better. During our first real power outage post Sandy. Two of the four whole house generators (10K a piece) failed. Heck, in my garage I have an unopened window AC unit. An unopened gas powered water pump and a back up Weber BBQ and electric smoker (both heavily used in their heyday).

  28. Very Stable Genius says:

    Clearly an anti-trump commercial

    crushednjmillenial says:
    November 2, 2022 at 10:02 am
    6 days to election day . . .

    My youtube ad just said “vote against the politicians choosing criminals over our communities.”

  29. BananaJoe3rdWorldPres says:

    Lol. Great timing.

    Twitter adds fact-check to Biden White House’s tweet bragging about Social Security’s COLA of 8.7%


    “He simply accomplished rather than twittering his own greatness for gullible low IQ masses”

  30. Juice Box says:

    Ed – From the manual page 14.

    Charge battery for 12 hours
    Every 100 Hours or Every Season*

    WTF does that mean every 100 hours of use? Does this engine not charge the battery at all? So if you run your generator for 4 days you need to charge this battery with a 120v outlet for 12 hours?

    Seems like a PITA and from the manual the fuse is 3A on the charger supplied, most of those cheap 3A chargers are not smart trickle chargers, but it could be on the circuit board inside etc. You may want to get one of these of those better ones and just leave it attached to the battery, it will know when to stop charging etc. I would also have a jumper battery but that needs maintence too, get a Lithium Ion Jump Starter Box not one with lead acid battery, Lithium last for like 10 years or more most lead acid are good for maybe 4.


  31. Juice Box says:

    re: I can’t return it

    Yes but next emergency you can sell it on ebay or FB pretty quickly. Tell em cost + shipping.

  32. Fast Eddie says:


    The manual says the running engine will charge the battery. I don’t know what the “every 100 hours” means, too.

    And, are you saying a trickle charger will know when to halt charging? Is that the purpose/idea of a trickle charger? If so, I’ll pick up a trickle charger and a jump starter as well. I was actually looking at those jump starters like you’ve shown in the link.

    Thanks again. Let me know if I’m correct in my thinking on the trickle charger… that it will not over-charge the battery.

  33. Fast Eddie says:

    Ahh… was just searching for the definitive answer! I was watching some Youtube vids.

    Thanks again, Juice.

  34. No One says:

    I have to admit that in my 30 year career I’ve never once asked for a raise or a promotion. Had basically 3 employers during that time, one for eleven years, one for three years, and currently over 16 years. I did a few years back have to discuss which of two promotions bein offered I would prefer.
    I’ve probably left some potential money on the table.

  35. No One says:

    On twitter providing context for Biden’s claim about his leadership resulting in the social security COLA, I get that it’s funny, and I’ve long thought how unfair it is that Facebook, or Twitter allow politicians to lie and drop context in their statements, while factchecking/context-editorializing their ideological opponents. But the solution is to just stop doing it, for everyone. Let people respond with context or factchecks. I hate that Facebook or Twitter has some group of biased “experts” claiming to offer the superior factchecking or context-providing. Because they often don’t get it right, and I will never trust them to do so without bias. So let other tweeters make fun of Biden, or whatever lying politician, and stop paying people to editorialize.

  36. Boomer Remover says:

    If there’s one thing you can count on, it is that immediate head fake knee jerk move in the indices. Always.

  37. BananaJoe3rdWorldPres says:

    I agree fully. The fact check gimmick is just another tool of the propagandists. I don’t file them but that comment was too ironic to pass up.

    We’ve seen that time and time again. The covid fact checkers, Russia gate etc. usually they appoint an insider, someone with boss on their hands as the “fact checker.” Helps then to keep their lies straight.

  38. leftwing says:

    “Twitter adds fact-check to Biden White House’s tweet bragging about Social Security’s COLA of 8.7%”

    Priceless. LOL.

    Social media is no longer just a Liberal mouthpiece…

    NoOne, the link seems to show that it was reader fact checking that was upvoted, not internal TWTR fact checkers…did not actually go on TWTR to confirm that though…

  39. BananaJoe3rdWorldPres says:

    I’m sure right now someone is being anointed the pelosi fact checker. Correct everyone about just who was “holding the hammer” when the police showed up.

  40. No One says:

    That could be a new feature, if user “fact-check” or “context notes” could be upvoted into tweets. But could also create a lot of dumb stuff done for the lols, or driven by obsessives. Imagine the pack of lefties upvoting all of little Greta’s nonsense, or the Sanders bros.
    The thing to always remember is that once you get past a bulletin board, someone is manipulating what you get to see and what you don’t.
    The most annoying thing about Facebook has been its default hiding of comments they don’t like. Seems there’s no permanent setting to show all comments. But who cares about Facebook anymore?

  41. The Great Pumpkin says:

    Republicans and democrats…two peas in a pod. Both live out a daily soap opera where they blame anything that is bothering them on the other side.

  42. Libturd says:

    “It is very premature’ to talk about pausing interest rate hikes”

    There goes the best October ever. :P

  43. chicagofinance says:

    left: regarding inflation…….. screw your base effects…. I don’t want disinflation; I want deflation. I think the broad populace thinks the same. It’s not that the rate of prices rising is the problem. It is the nominal level of prices. They have to come down. That is a huge paradigm shift, not just baby steps.

  44. The Great Pumpkin says:


    I’m curious as to why you want deflation? I don’t see how that will end well.

  45. No One says:

    So Cathie’s stocks can go up again, and people can pay negative YTM for government bonds again?

  46. No One says:

    Interesting links for the reshoring topic. The thing is that building new local factories takes more capex, and normally companies don’t like doing that in the face of economic downturn and rising interest rates. Schneider’s order backlogs are still strong so I can understand why they’d be trying to build to match supply and get around possible bottlenecks.

  47. Fast Eddie says:

    I was listening to the FED meeting. I can’t imagine how long it’s going to take to get inflation down to 2%. I know there’s a lag in rate increase and the effective results but to think their going to ease to 50 then 25 basis points is just smoke and mirrors. Rip the fucking band aid off and go 75 until blood curdling screams can be heard from a distance. I would say they’re 200 basis points away from even pausing and then, who knows how long it will be before balance in inflation, wages, job supply/demand is achieved. Staying at 0% for so long was not good.

    And here’s the other thing that illustrates the uselessness of the Obammy administration; we were at 0% Fed rate for almost the duration of his two terms and growth was anemic. Can you imagine if we had a pro-growth president during that time period? The DOW was non-existent when that shithead took office. It had no other option than to go up as there was no other asset that would make any money. Any one of us could have been sitting in that chair in the oval office and would’ve done as well or better than that empty suit. I digress.

  48. Boomer Remover says:

    My BIL has a machine shop out in CA. He has said many times that covid was the best thing that happened to his business. He was tapped to provide parts for various aerospace ventures in light of Asian supply chain issues.

    Perhaps on a smaller scale, but the capex is his and not his clients. This seems like the supply chain equivalent of the hourly W2.

  49. chicagofinance says:

    After a happy ending there is always deflation.

    The Great Pumpkin says:
    November 2, 2022 at 3:27 pm
    Chi, I’m curious as to why you want deflation? I don’t see how that will end well.

  50. Bystander says:

    Anecdote from today’s conversation with Indian co-worker. I told you that a person I managed has to leave and go back to India after 6 years on H1B. Uprooting entire life, child and wife. Selling car and apt furniture. Guy was best BA I ever had. All due to company not getting I 140 for approval soon enough. He is now is same boat. Had until March or needs to leave. I asked why this is suddenly problem? Apparently it took govt 180 to approve I 140 in past but then became 215 days and now at 270. He estimates that 30-40k H1bs will be impacted and sent back. That won’t help NYC slave labor pool..

  51. chicagofinance says:

    Everything you see in the economy is a lagging indicator. It is possible that the Fed has already gone too far. You cannot know with certainty about November 2022 until some time early next year. By the time the Fed is aware they have done enough, it is far too late. Totally blind wild stabs in the dark as to what to do….. even at 2PM today.

    That said, the behavior of the stock market in October was a red headed step-child asking for a beating……

    Fast Eddie says:
    November 2, 2022 at 3:56 pm
    I was listening to the FED meeting. I can’t imagine how long it’s going to take to get inflation down to 2%. I know there’s a lag in rate increase and the effective results but to think their going to ease to 50 then 25 basis points is just smoke and mirrors. Rip the fucking band aid off and go 75 until blood curdling screams can be heard from a distance. I would say they’re 200 basis points away from even pausing and then, who knows how long it will be before balance in inflation, wages, job supply/demand is achieved. Staying at 0% for so long was not good.

  52. No One says:

    I don’t know what the INS is doing these days, but one thing they definitely aren’t doing is renewing green cards at any kind of normal pace. Are they distracted by all the extra work of seeding people around the country coming across the Mexican border? What about all the people in the country legally who get garbage non-existent service from them?

  53. chicagofinance says:

    How about the “Bystander disgruntled in a dead end job” pool?

    Bystander says:
    November 2, 2022 at 4:12 pm
    That won’t help NYC slave labor pool..

  54. chicagofinance says:

    The NASDAQ lost 4.2% in 85 minutes. That is hard for even Cathie Wood to do.

  55. 3b says:

    Pivot / Pause my ass.

  56. BRT says:

    Boom….question is….do I ride those shorts.

  57. Libturd says:


    In the long-term, yes. In the short-term, you might have to take your pants off since your balls won’t fit in them.

    Exactly on the overshoot due to lagging data. But I think the failure to of the FED to unload their balance sheet even at their pathetic speed speaks volumes of the health of the “real” economy. The “pain” deceleration barely slowed the consumer. It is going to get ugly. When my 7,500 on the nasty rings true, I am going to do so friggin’ well. I’m still solidly up on the Don’t.

  58. leftwing says:

    “regarding inflation…….. screw your base effects…. I don’t want disinflation; I want deflation. I think the broad populace thinks the same.”

    Good luck brother. I’m not holding my breathe for any amount of time waiting for the price of everyday goods and services to post actual declines…

    “I don’t know what the INS is doing these days…” WFH? Because government agencies and their workers were so efficient in the first place?

    BRT/Chi, glad I lightened up my SPY exposure yesterday…

  59. chicagofinance says:

    Why Mortgage Rates Are So Darn High

    It makes sense that mortgage rates are up. But by this much?

    That requires some explanation.

    Freddie Mac’s weekly average 30-year fixed mortgage rate has cracked 7% for the first time in two decades, a rise just shy of 4 percentage points from the end of last year. By contrast, benchmark 10year U.S. Treasury yields are up around 2.5 points. What this means is that the gap—or spread, in financial lingo—between mortgage rates and Treasury yields has ballooned.

    For the past decade, the spread between a measure of average national mortgage rates and 10-year Treasury yields has averaged 1.8 points, according to figures tracked by Autonomous Research.

    This year began right around that level. But with Treasurys yielding over 4%, the spread now at roughly 3 points is about as high as it has been this century.

    Other times that the spread has seen comparable widening were in late 2008 and March 2020, when the financial crisis and pandemic, respectively, were driving investors to the haven of Treasurys. In both cases, the Federal Reserve stepped up to buy more mortgage bonds, bringing spreads and mortgage rates down, as spreads on mortgage bonds are a key component in the mortgage rates ultimately charged to borrowers.

    This time, that isn’t happening: The Fed this year, as part of its plan to shrink its balance sheet, has stopped purchases of agency mortgage- backed securities. Those are packages of mortgage loans issued by government-sponsored enterprises such as Freddie and Fannie Mae.

    On top of that, the Fed’s overall tightening of policy has contributed to a reduced appetite for bond buying by banks. As rates have risen, drastically fewer people are refinancing their mortgages and paying them off early.

    That increases the expected lifespan of mortgages and MBS.

    But the appeal of a longer-duration asset diminishes when banks’ deposits are more prone to quickly reprice in response to higher rates. Together, banks and the Fed own about 75% of the agency MBS market, according to Bank of America strategists. Without those buyers, there has been more volatility in that market, which also contributes to widening spreads between MBS and Treasurys.

    Though investors could be tempted by wide spreads on MBS, one concern holding buyers back is that the gap could possibly widen even further as the Fed fights inflation, says Jeana Curro, head of agency MBS strategy at Bank of America. “Over the past few sessions, there’s enough investor interest to keep spreads contained, but not enough to drive them tighter,” she said. “The risk is that without that demand, spreads could get wider.”

    Another component of mortgage rates is what mortgage originators can earn for selling mortgages into the market. A proxy for this is the spread between rates charged to borrowers and the yield on current MBS. As volumes have plunged and volatility has jumped, originators are often not in a position to offer lower mortgage rates to entice borrowers, as they have needed to protect their own economics.

    Analysts at Morgan Stanley in late October noted that spreads on agency MBS were closer to their widest post-Covid levels than spreads for corporate credit, which were in about the middle of their range since May 2020. The difference, the analysts said, is that banks have been major MBS purchasers but aren’t generally big buyers of corporate credit. The relative spread widening in MBS is a consequence of banks trying to manage their balance sheets, they said.

    One form of a possible silver lining for mortgage bonds—and in turn, mortgage borrowers—is that agency MBS may outperform other credits during recessions. The fact that MBS spreads are currently wider relative to recent history than corporate credit spreads, which generally suffer in recessions, might even accelerate that effect.

    Yet with the Fed both raising rates and no longer buying mortgage bonds, and with home prices generally in the central bank’s crosshairs, it is no wonder that few are stepping up so far to help keep mortgage rates in check. —Telis Demos

  60. Bystander says:


    Why being a d&ck?

  61. leftwing says:

    I don’t think he was being a dick…I read it more as him asking if it would make your difficult situation easier….

  62. BRT says:

    Chi, I’m curious as to why you want deflation? I don’t see how that will end well.

    We live in a world where people believe the currency needs to be continually debased in order to achieve prosperity. It’s pretty sad.

  63. Bystander says:

    left, thanks. Sorry chi. Misread it.

    Yes, it will. Slack has always been the issue in tech and Polish/Indian labor markets are extremely difficult right now. Even NYC wage law has recruiters hopping. There is some real shady stuff. BoA posted Sr scrum/role for 75K to 135K for NYC on their site. A third party recruiter sent me same job (exact same wording) and said could go to 200k. My guess is that BoA is obfuscating pay to keep employees in dark. Long way to go with this.

  64. Boomer Remover says:

    I can’t believe ROKU peaked at $459 per share mid 2021. It closed at $54 and is $45 AH.

  65. The Great Pumpkin says:

    How does the economy grow in a deflationary environment?

    BRT says:
    November 2, 2022 at 7:20 pm
    Chi, I’m curious as to why you want deflation? I don’t see how that will end well.

    We live in a world where people believe the currency needs to be continually debased in order to achieve prosperity. It’s pretty sad.

  66. BRT says:

    How does the economy grow in a deflationary environment?

    How does it grow with 10% inflation?

  67. Ex says:

    People are still employed. Money, goods and services are still being consumed.
    If a real recession is coming it’s almost like it’s in slow motion. Like some asteroid heading to Earth in 6 months. Hell, most people think, that’s six months…! Give me the 60 mo. Lease.

  68. Ex says:

    8:51 ouch. There goes that big office bldg in Silicon Valley.

  69. leftwing says:

    “I can’t believe ROKU peaked at $459 per share mid 2021. It closed at $54 and is $45 AH.”

    CW shit-cos deliver on the downside.

  70. Juice Box says:

    Speaking of another overvalued company. Stripe just announced layoffs, 14% of staff.
    They plan for an IPO at some point this year or next with an astronomical 100 Billion dollar valuation but now claim that the interest rate hikes have slashed their valuation by as much as 25%.

    I thought credit card usage was going through the roof?

    They still have not built the better mousetrap to directly challenge Visa and Mastercard in an effort to build a “5th” network.

  71. Juice Box says:

    re: “Like some asteroid heading to Earth in 6 months”

    Close….Interest rate changes might take a full year to trickle down into the real economy.

    The reality is the bean counters plan the work by quarter and year etc, as the planning for sales, purchases, hiring, expansion etc all have to be netted out as to whether efforts to actually produce something to net a particular amount of money aka PROFIT after tax and other costs have been paid will actually work.

    Fed is jawboning on what now a 2% increase in unemployment is acceptable?

  72. Juice Box says:

    Lol – AOC now saying Elon bricked her twitter account, aka shadow ban? Seems like the same “technical” glitch ha ha that has been plaguing people with “other” views for years…

    BTW she then goes on to claim it is because he has lack of confidence in himself……….. Elon has more tenacity in and of our shared reality than she ever will.

Comments are closed.