星期四, 五月 21, 2009

Here and There 22/05/09

1. SOEs' profitability in China

A interesting report produced for the HKMA by Giovanni Ferri and Li-Gang Liu, which argues that the rapidly rising profitability of SOEs may be a mirage. (Full HKMA report attached)

Summary: We are interested in investigating whether the profits of SOEs would still be as large as they claim if they were to pay a market interest rate.  Using a representative sample of corporate China, we find the costs of financing for SOEs are significantly lower than for other companies after controlling for some fundamental factors for profitability and individual firm characteristics.  In addition our estimates show that if SOEs were to pay market interest rate, their existing profits would be entirely wiped out.

2. S&P from 1929, priced in Gold

Given Gold is looking hot again these days. See Chart 1_SG.

3. Unemployment EU vs US Chart 2_US vs EU

While US has been outperformed EU for quite a while, which makes it the model of labor mobility. When they both reached a level around 9%, what will happen next? We shall see.

4. David Rosenberg's Letter for 20/05/09, fyi.



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