Which Is The Global Outlier?

Businessman, Internet, Continents

Awash in “stimulus”, but none able to dent a semiconductor shortage which is purportedly the reason for production woes. In the US and many other places around the world, governments have gone nuclear, with America’s federal authorities dropping checks with abandon. This has created, according to someeveryone in the media, a red hot economy right on the verge of massively overheating.

Bonds just aren’t buying it, and that was long before Friday’s payroll report. The US goods economy might be experiencing a sugar rush, that’s not the whole ballgame. In addition to services, there’s a global factor underlying the non-reflationary global yields of late (often synchronizing them before economies).

For all that is purportedly going right domestically, if there are planetwide considerations embedded within major interest rates regimes there’s any number of sharp contrasts by which to measure the relative relevance of that single segment in the single economy. To that end, we needn’t look far from our borders to find evidence for the less-than-fiery element(s) to the bond skepticism...Mexico.

Never has a 7132% annual increase come up so small. Yet, according to Mexico’s Instituto Nacional de Estadística y Geografía (INEGI) light vehicle production during the month of April 2021 totaled 269,180 units. Back in April 2020, when Mexico’s carmakers had decided to shut it all down near completely, the number was a bit lower, 3,722 in the final count.

The difference, a better than 7000% annual gain which doesn’t tell us all that much. Instead, compared to April 2019, production levels were still more than 10% short; that’s a pretty sizable gap for the boom.

This is where the semiconductor bottleneck gets inserted; of course production is still down, it’s been said, because global producers in Mexico like everywhere else can’t get enough chips to complete assemblies.

Of the major automakers, only Honda (that I’d been able to find) had gone so far as to announce full shutdowns disrupting its schedule. On March 17, the company said it was furloughing its Celaya plant offering a variety of reasons:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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