Cost Arbitrage

July 18, 2012

Overpopulation and Increased Lifespan make Life Tough for Youngsters

Overpopulation and Increased Lifespan This current day situation is taking an increasing toll on people graduating from colleges in the West. There are enough statistics to […]
February 16, 2012

List of Earth's Largest Wind Energy Countries – China Leads with 60 GW of Wind Electricity Capacity

Wind Energy is the largest renewable energy source in the globe right now (if you don't count in hydro and nuclear energy). The total installed wind energy capacity exceeds the solar and biomass capacity by quite a margin at over 200 GW . The recent surge in wind energy installations has been from China which put up almost 40-50% of the global wind turbine installations in 2010 and 2011. Now China has surpassed every other country to become the largest wind energy country in the world with over 60 GW. While Europe earlier led by Spain, Denamark and Germany used to lead in wind capacity, they have been comprehensively overtaken by the Middle Kingdom in the last couple of years. USA comes in next but still far below its potential while the rest of the world has started to pick up now. India is the 5th largest country and has been steadily putting up around 2-3 GW of wind capacity each year.
February 14, 2012

Chinese Low Cost Labor Massacres Western Telecom Jobs (Nokia, Alcatel, Motorola)

The relentless rise of Chinese telecom equipment and OEM companies has massacared telecom jobs in the West with major companies like Nokia, Alcatel and others firing in the thousands. Note Huawei and ZTE have become the nemisis of the telecom equipment makers which are showing losses in the last few years. These companies are not managing to compete with the low cost engineer advantage of the Chinese firms . Nokia is also firing thousands in its western factories in Poland and other places as it moves production to Asian factories. Note while Nokia has become unprofitable to other causes like Apple and Android, low cost phones from Asia is the biggest factor in its demise as well.
February 7, 2012

Global Stock Brokers Shut and Cut as Financial Industry Downsizes

Global Stock Brokers across continents are either firing hundreds of workers or are totally closing down. The reasons for this downsizing of operations by brokerages is a) The Financial Industry has become too large to the size of the global economy particuarly in countries like USA b) The reduction in risk and capital means that big financial companies are reducing and selling their operations c) The Broking Sector has seen a Peak in 2008 and now the only place to go for the next few years is Down
February 2, 2012

Apple Supernormal Profits Reflects Super Exploitation of Global Oversupply of Labor

Apple recently reported astounding financial results in which profits grew by an awe inspiring 50% on a huge basis with Net Profits Margin of 30% which is crazy for a company of Apple's size. It generates massive cash flows and has over $100 billion in its cash war chest. While there are a number of reasons which makes Apple one of the most successful and profitable companies in world history, the global oversupply of labor is one of the chief reasons which is overlooked at .
January 12, 2012

Financial Industry in a Depression of its Own RBS Firing 45% of pre crisis Global Banking and Markets Headcount

The Financial Industry will shed another 150,000 jobs according to Richard Bove, an analyst at Rochdale Securities LLC . Royal Bank of Scotland the bankrupt UK bank that was taken over the British government is going to kill a number of investment banking divisions and will fire 3500 people. RBS has already fired thousand before in wholesale and corporate banking . Now RBS will completely exit from a number of divisions like M&A, Cash Equities etc. which will mean thousands of firings . In an environment when financial jobs are scarce , this means that the fired thousands will have a tough time getting into the workforce again.RBS is going to fire 3500 people in addition to 2000 already announced. This would bring down the 24,000 pre crisis headcount by almost 45% .
January 7, 2012

Financial Jobs Killed in Tens of Thousands as Industry Shrinks, Global Oversupply of Labor Globalization Consequence

Financial Jobs are being let go in the tens of thousands by European and USA Financial Institutions. The Financial Industry has become too huge as a percentage of the global economy with any value creation to say something like the IT industry. The share of the market cap of the stock market had become too high during the boom boom years of 2008 and it is continuing to go down.Despite the best (some would say the worst) effort of the governments to prop up the Too Big to Fail Banks,jobs are being let go as there is not enough work. European Banks are shrinking their balance sheets as they are too leveraged and insolvent. Without the ECB crutch,almost all of them would go under.
July 6, 2011

Pros and Cons of Hydroelectric Energy

Hydro Electric Energy is second largest source of electricity in the world accounting for roughly 20% of the worldwide demand of electricity with around 800 GW of capacity installed.Hydroelectricity power plants are the biggest power stations in the world dwarfing the biggest nuclear and coal power projects.The world’s biggest power plant is the Three Gorge Dam in China which at 22.5 GW is more than 50% larger than the 2nd biggest power station in the world.s.China is the by far the world leader in hydro power plant capacity with around 200 GW which it aims to double to around 400 GW by 2020The advantages of hydroelectricity energy are substantial enough to far outweigh any disadvantages.But like nuclear energy,hydro power has some tail risks which can lead to catastrophic damage.
June 30, 2011

World's Largest Power Plant Hydro Dam Grand Inga 39 GW in Congo Depends on Inga 3 Design Choices

Note the cost of Hydropower at $1-3/watt are quite large and if not planned and implemented correctly can lead to huge time and cost escalation.The Inga 3 Dam being proposed to be built on the Congo River in the DRC faces tough choices.The Hydro Dam on the Congo which will become the biggest hydro power project in Africa is wresting over design issues.The major choice is between tunneling through rock structures or keeping open channels.Note the total cost of the 7 GW Power Plant will be around $14 billion making it the biggest investment in Congo and the 5th largest Hydro Power Plant in the world.Note Africa suffers from chronic power shortages which will become more acute with rising cots of fossil fuels and increasing per capita electricity demands.Making correct decisions on energy is vitally important for the development of the African continent.China is the country with the largest hydro power capacity at 200 GW which it wants to further increase to a massive 400 GW by 2020.
April 16, 2011

Wage Inflation Shrinks Indian Outsourcing Companies Margins as Labor Cost Arbitrage Reduces

Labor Cost Arbitrage is the biggest reason for the growth of the Indian outsourcing industry.The outsourcing revolution in India which started though technology outsourcing has spread to the legal,medical and other fields as well.Medical Billing,Coding and Transcription has become a big business besides Legal Outsourcing of work.Globalization of finance and trade has been much more rapid than the globalization of labor which faces many hurdles.The spread of Internet and improvement in Communications has made this hurdle moot as many high cost services in India are being performed virtually over the Internet.However this arbitrage which has bought billions in profits to global corporations and rise of new companies such as Infosys,TCS and others is disappearing.Rising Wage Inflation in India caused by a multitude of factors including the Bernanke Money Printing has led to shrinking of the margins.
April 4, 2011

Pros and Cons of Renewable Energy – A Detailed Explanation

Renewable Energy is one of the most read about and discussed topics in the world however various misconceptions remain about the advantages and disadvantages of renewable energy.Note Renewable Energy is a a very large topic and encompasses many different alternative energy forms which have their own distinct pros and cons.A Better Way to understand and explain Renewable Energy would be to look at each different forms of Clean Energy like Solar,Wind,Nuclear,Hydro,Tidal,Biomass and Geothermal Energy.Renewable Energy itself compared to Fossil Fuel forms of Non-Renewable Energy has substantial advantages and some disadvantages as well the biggest of which is Cost.Also note Fossil Fuel Energy has got a massive established base,industry and lobby.
April 1, 2011

Disadvantages of Renewable Energy – Drawbacks of Different Alternative Energy Sources

The Biggest Disadvantage of Renewable Energy is the relatively higher cost of most forms of alternative energy compared to fossil fuel sources of energy.This has prevented the higher penetration of clean energy as compared to the non-renewable sources of energy.Also the massive old energy lobbies have successfully used their massive influence and power to inhibit the growth of renewable sources of energy.The recent lobbying by oil and gas firms like the Koch Brothers and Valero is quite pertinent.Note the oil and gas lobbies receive almost 10 times the subsidy received by clean energy sources like wind and solar despite their massive established bases.
March 31, 2011

Advantages of Green Clean Renewable Energy – Complete List to Solar,Wind,Biomass Geothermal,Hydro,Nuclear and Tidal Energy Pros

The importance of Clean and Renewable Energy is growing driven by the twin factors of increasing fossil fuel prices and Global Warming.Other factors contributing to the importance and growing use of Alternative Energy is national energy security as geopolitical tensions in major oil and gas countries grows by the day.Also renewable sources of energy like solar energy promote the democratization of energy production which is centralized by power utilities today.There are a number of alternative sources of energy such as solar,wind,geothermal,tidal,hydro and nuclear energy.Some people may not consider nuclear and hydro energy to be green but it is a fact that these 2 energy sources do not produce GHG emissions and cannot be classified as fossil fuels sources.Each clean energy source has its own advantages and many of the pros overlap with each other as well.However each Green Energy source has its unique benefits which define and separate it from the other clean sources.While Renewable Energy advantages over Non-Renewable can be easily be understood as
March 31, 2011

Hydroelectricity Costs – Not as Simple as Dollars per Kilowatthour

Hydroelectricity is one of the largest sources of energy accounting for roughly 20% of the worldwide demand of electricity with around 800 GW of capacity installed.There is considerable potential still left and developing countries like India and China can be expected to install another 500 GW over the coming years.Hydroelectricity is very important as it does not lead to GHG emissions and contribute to global warming.It also does not have the drawbacks like other renewable energy forms of high costs and intermittency.The advantages of hydroelectricity are substantial enough to far outweigh any disadvantages.But like nuclear energy,hydro power has some tail risks which can lead to catastrophic damage.The costs of hydroelectricity are not a simple function of dollar costs.It should also take into account the massive displacement costs in case of massive hydro dams,the loss of ecology and potential tails risks which can lead to massive payments.
March 29, 2011

List of World's Largest Hydroelectricity Plants and Countries – China Leading in building Hydroelectric Stations

Hydroelectricity power plants are the biggest power stations in the world dwarfing the biggest nuclear and coal power projects.The world's biggest power plant is the Three Gorge Dam in China which at 22.5 GW is more than 50% larger than the 2nd biggest power station in the world.Most of the world's largest hydroelectricity plants in the world are situation in China and South America.North America also has some of the larger hydro power plants.China is the by far the world leader in hydro power plant capacity with around 200 GW which it aims to double to around 400 GW by 2020.Other major hydroelectricity countries are Canada,USA,Brazil and India.Note Hydroelectricity is responsible for producing around 20% of the world's electricity.Here are some of the major world hydroelectricity power plants .
March 29, 2011

Hydroelectricity Disadvantages – 7 Cons of Hydro Power Can't overcome the Advantages

Hydroelectric Dams have disadvantages which are quite different from those of other forms of renewable energy like solar, wind, geothermal or nuclear energy. Hydro Power in […]
March 29, 2011

Hydroelectricity Advantages – Nine Major Pros of Hydel Power

Hydroelectricity is the production of electrical power through the use of the gravitational force of falling or flowing water.Hydroelectricity capacity is around 800 GW accounting for almost 20% of the global electricity capcity.China and Canada have the largest hydro capacities in the world.If you consider Hydropower as renewable energy,then Hydro is the most widely used renewable energy in the world.In fact Hydroelectricity is the 3rd biggest source of electricity in the world after coal and oil/gas.Hydroelectricity power plants can have massive capacities with the Three Gorges Dam in China being the world's largest at 22.5 GW.The Itiapu and Guri Dams in South America are the 2nd and 3rd largest with 14 GW and 10 GW capacities.China is set to double its massive hydroelectric capacity to almost 400 GW by 2020 from 20 GW currently.The advantages of Hydroelectricity are many
March 3, 2011

Advantages of Solar Energy – Declining Cost the Biggest One

Solar Energy is the only form of Energy whose costs are continuously declining compared to other forms of Energy.This is one of the biggest advantages of Solar Power over other renewable and non-renewable forms of energy.Solar Energy costs have declined by over 50% in the last 2-3 years even as Coal,Oil,Gas and other Energy costs have gone up.While Wind Energy costs have declined in the last year the overall trend is increasing as the costs of copper and steel go up.This is one of the main reasons why solar energy demand has gone up by 150% in 2010.With solar costs going down by another 10% each year over the next few years,expect Solar Energy to grow at a further fast rate in the future as well after growing at 50% CAGR over the last decade.Here are some of the advantages of Solar Energy over other non-renewable energy forms
May 16, 2010

Global Labor Cost Arbitrage – Spanish workers Lose Jobs to poorer EU neighbours

One of my theories is that a lot of distortions and opportunities for arbitrage that we are seeing in the world today is because “Labor is […]
May 1, 2010

Labor Cost Arbitrage – Applied Materials moves to Asia

One of my pet theories is that they we see a lot of distortions and oppurtunities for arbitrage is because labor is not globalized while capital […]