I had a very interesting meeting with the largest athletic shoe company in the world, Yue Yuen Industrial (0551.HK). The soles of tennis shoes are made from 'synthetic' rubber, a combination of petroleum-based chemicals as well as rubber. Since the cost of oil is soaring, so is the cost of synthetic rubber. That doesn't mean Yue Yuen International is headed for trouble. It does mean that they'll need to improve productivity and/or raise prices to compensate for the raw materials increase. I did have a fascinating discussion with the CEO about the success of their manufacturing plant in Vietnam.

Here are some eye-popping stats on agriculture from Marc Chandler at RealMoney.com ...Consider the chicken. In 1900 the average hen laid 30 eggs a year. Now she can lay 250 eggs or more a year. In 1900 it took 16 weeks for a chicken to come suitable for frying (weight of 2 pounds). Today a four-pound roasting chicken is ready in just six weeks. In 1930, it took more than six pounds of feed to yield one pound of broiler meat. By 1940 it required four pounds of grain. Today, less than two pounds of feed are needed. Now that is productivity.