07-07-2009, 02:24 PM
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CC Member
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Join Date: Apr 2004
Location: Scotts Valley,
CA
Cobra Make, Engine: ERA 289 FIA #2108
Posts: 1,882
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Not Ranked
Cobra Bill nailed it. Short-sighted decisions by corporate executives to manage the numbers and ratios analyzed by Wall Street. Manage the ratios right, Wall Street reacts and the stock goes up in value. Execs get their near-term bonuses AND their options go up in value. Wall Street rides the upward trend on the stock price, and brokers take fees for buys on the way up, and sell orders on the way back down.
By pushing costs down (i.e. outsourcing to China, et al) you reduce your cost of goods sold, increase your profit margin, and reduce your days of inventory all in one swipe. Wall Street loves this, so corporate execs manage accordingly.
As long as we keep filling the trough, the pigs will continue to feed.
DD
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Dangerous Doug
"You're kidding, right?"
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