财务管理 财经英语补充资料.doc

Chapter One Economic Basics I Key words Group A economic economy economist market economy produce production producer manufacture output production capacity product goods cost capital labor stock industry sector import export retail wholesale surplus deficit budget supply demand profit margin return revenue earnings gain recession inflation deflation boom slowdown recover recovery downturn overheat consumer consumption household consumer spending consumer confidence survey figure poll statistics unemployment rate lay off capital market money market emerging market forecast expect expectation predict prediction prospect outlook sign signal concern measure quarter fiscal year annual financial year over the same period last year compared with the same period of last year year on year for the 5th straight month for the fifth consecutive month in the first two months of the year slide slip surge tumble shrink jump slump raise soar drop fall decline hike exceed prompt curb promote boost drive include exclude trigger tighten loosen set a target oil fuel raw materials automobile energy Group B pessimist pessimism pessimistic optimist optimism optimistic buoyant sluggish strength weaken worsen quicken accelerate deteriorate estimate stimulus incentives maintain sustain release acquisition merger billion trillion market share indicate volume overheat release item productivity launch efficient efficiency asset temporary developing economy domestic II News Reading A China Partly Lifts Veil on GDP Data The Wall Street Journal April 16 2011 By TOM ORLIK BEIJING China s publication of a new kind of economic data brings it closer in line with the way other major economies report growth but also exposes continuing problems with the quality of its statistics analysts said The headline figure when China reported its economic data for the first quarter of this year on Friday was the 9 7 growth rate in gross domestic product That figure as with all of China s quarterly GDP numbers in the past compared output in the report period with output in the same three months of last year But the National Bureau of Statistics on Friday also published for the first time data on how economic output compared with the previous quarter This quarter on quarter number which is adjusted to account for seasonal differences and multiplied according to a compound growth formula to give an annualized rate is how the U S and most other major economies report their quarterly GDP data By this measure the statistics bureau said GDP in the first quarter grew 2 1 or 8 7 on an annualized basis according to Wall Street Journal calculations significantly slower than the year on year figure suggesting the current momentum of the world s second largest economy is markedly slower than the year on year figure indicates Big economies use adjusted quarter on quarter data because they provide a more real time picture of the current trajectory of growth A statement on the bureau s website April 8 said Year on year data does not provide up to date information on changes in the economy The development of quarter on quarter indicators will make up for that shortcoming and provide better information to policy makers and analysts Economists who watch China generally agree that the move represents progress But the progress is limited because the statistics bureau failed to publish any historical data for the quarterly measure which is important for understanding where the current number fits into past trends Arthur Kroeber managing director of Beijing based research firm Dragonomics said The revisions aim to create a series that has a closer relation to reality but the failure of the NBS to produce comparable historical data or to clearly explain their methodology detract from progress that is made The statistics bureau didn t explain the omission Analysts said it likely arose at least partly because such data would reveal a much sharper slowdown during the recent global recession than the government has ever acknowledged particularly in the fourth quarter of 2008 In a Wall Street Journal poll of China economists in early 2009 the median estimate for quarter on quarter annualized growth in the final quarter of 2008 was 1 5 compared with an official growth rate of 6 8 in the official year on year data The statistics bureau had suggested that the quarter on quarter data would be available starting in 2010 Difficulties in adjusting the growth rate to account for seasonal variations in particular the weeklong New Year holiday that falls in January some years and February in others delayed the process B China inflation surges to 25 month high By Geoff Dyer Financial Times November 11 2010 Chinese inflation jumped to its highest level in just over two years in October prompting new fears that the economy could be overheating as a result of the government s huge stimulus measures Consumer price inflation surged to 4 4 per cent in October from 3 6 per cent the month before well above the government s target of 3 per cent and increasing the pressure on the authorities to introduce new tightening measures The country s banks are also on track to exceed this year s quota for bank lending after new loans reached Rmb587 7bn 88 7bn 55bn 64 7bn in October Economists said that to meet the full year target of Rmb7 500bn there would need to be a sharp contraction in new bank lending in the past two months of the year Although inflation in China has been inching up for some months the big jump in October surprised many economists and raises the chances of further interest rate rises this year to follow the increase last month and the increase in bank reserve requirements announced on Wednesday Beijing is also under pressure from other governments to accelerate the appreciation of its currency a topic that will be prominent at Friday s G20 summit which could help damp inflationary pressures At the close of Asian trading on Thursday the Chinese currency had gained almost 1 per cent against the dollar over three days Li Wei and Stephen Green at Standard Chartered in Shanghai said that on a seasonally adjusted basis consumer price inflation increased at an annualised rate of 12 1 per cent in October up from 5 2 per cent the month before This is worrying as inflation is now heading towards its level in mid 2007 which was a time of overheating they said in a note Earlier this week Zhang Ping head of the National Development and Reform Commission the main economic planning body acknowledged inflation would exceed the 3 per cent target this year He blamed the weaker US dollar speculation in commodities markets and loose monetary conditions Several Chinese officials have warned in recent weeks that the new round of quantitative easing in the US will lead to hot money inflows into developing economies and the Chinese foreign exchange regulator has taken steps this week to reduce capital inflows in the financial system However many economists believe that it is relaxed monetary policy in China which is adding to the domestic inflationary pressures rather than capital inflows from overseas There is no trick to keeping growth afloat on a sea of credit the question is what happens when the lending taps are turned off said Tom Orlik an economist at Stone also assume inflation during the first year was 10 If this were the case the face value of the TIPS would adjust upward by 10 to 1 100 Furthermore the coupon payment 3 which is also based on face value would be 33 in actuality payments adjust and are paid semi annually The end of result is that not only are interest payments protected against inflation but so is face value of the bond which is returned to the investor at maturity Traditional nominal bonds offer neither of these protections Because TIPS protect investors against inflationary concerns and nominal bonds do not they behave differently from one another More specifically as inflationary expectations increase nominal bonds will become less attractive as future interest payments are eroded by inflation Similarly as inflationary concerns decrease which includes deflation nominal bonds become more attractive relative to TIPS as future interest payments become more valuable on a real or after inflation basis Break Even Inflation Traditional fixed income investments may not provide the real return investors need during periods of high inflation It s important to know whether your traditional fixed income investment breaks even with inflation Break even inflation is the difference between the nominal yield on a fixed rate investment and the real yield on an inflation linked investment of similar maturity and credit quality If inflation averages more than the break even the inflation linked investment will outperform the fixed rate Conversely if inflation averages below the break even the fixed rate will outperform the inflation linked Calculation Formula Comparable Fixed Rate Inflation Linked Real Yield Break Even Inflation Calculation Example 4 00 5 Year CD 1 05 Inflation Linked Real Yield 2 95 Break Even Inflation An inflation linked investment s coupon is determined by adding the current rate of inflation to the real yield In the example above the average rate of inflation would have to be more than 2 95 in order for the inflation linked investment to outperform the fixed rate investment And if inflation averaged lower than 2 95 the fixed rate investment would outperform the inflation linked III Advanced Reading The puzzle of low Treasury bond yields May 29th 2008 From The Economist print edition THE yield of Treasury bonds is arguably the single most important indicator in financial markets Since the American government is unlikely to default the bond yield sets the risk free rate against which other assets are measured It also serves as a barometer of investors feelings about economic variables like inflation and recession But precisely because it does so many things the Treasury bond can send out conflicting signals Consumers have been grumbling about the inflationary impact of higher oil and food prices for a while But bond investors have only recently taken fright pushing the yield on the 10 year Treasury bond above 4 on May 28 for the first time since the start of the year Even now however the breakeven inflation rate the difference between yields on conventional and inflation linked bonds on five year Treasury issues is just 2 4 within the range it has occupied for the past four years compare that with the 7 7 inflation rate that American consumers expect over the next 12 months One possibility is that the bond market vigilantes have been asleep We sometimes wonder if Treasury bond investors enjoy losing money muses Tim Bond a strategist at Barclays Capital as he ponders the logic of owning ten year Treasuries yielding close to 4 when headline inflation is heading on his view for more than 5 by August Bill Gross of Pimco a bond market investor argues that inflation is understated in the official American figures because of statistical adjustments made over the past 25 years The result may be that investors have been fooled into buying Treasury bonds on unrealistic expectations of real after inflation yields Another possibility is that breakeven rates are not an effective measure of investors inflation expectations That is the view of Jack Malvey a strategist at Lehman Brothers He argues that yields on inflation linked bonds have been distorted over the past decade by demand from pension funds which see the bonds as an ideal way to match their liabilities A third option is that bond investors think today s inflation rates are a blip Inflation may be an issue now but it likely won t be over the next ten years says Pavan Wadhwa head of European rates strategy at JPMorgan Chase Optimists argue the anti inflation credibility of central banks is stronger than in the 1970s And they note that high oil prices although they push up inflation in the short term ultimately tend to act as a tax on growth The credit crunch may also be having lingering effects Bond yields reached their low in mid March when the Bear Stearns crisis was in full swing At that point the ten year Treasury bond yielded just 3 31 the lowest level in five years Investors were fleeing the riskier debt of bank and other corporate borrowers for the safety of government paper Yields have moved up by more than half a percentage point since then as investors have started to move money out of government bonds and back into the equity market But recessionary fears still linger especially when investors are bombarded with statistics such as the continued fall in American house prices and the decline in consumer confidence It may still be worth holding Treasury bonds yielding around 4 as a hedge against a sharp economic downturn In short the bond market is caught in an awkward compromise with worries about the financial and economic outlook balancing concern about inflation In the medium term however it is hard to argue with Lehman s Mr Malvey when he says that he expects yields in some government bond markets to rise by two to three percentage points over the next two or three years Although the world may not be about to return to the excesses of the 1970s the Goldilocks era is tapering off the trade off between growth and inflation has deteriorated Nor have Treasury bond investors exactly been coining it in recent years According to Barclays Capital the annualised real return since the start of 2003 has been a meagre 1 Will the Chinese with a domestic inflation rate of 8 5 really want to hold bonds yielding 4 in a currency they expect to depreciate against the yuan Is the anti inflationary credibility of the Federal Reserve really that convincing when it is clear that its rate decisions can be driven by concern for the health of the banking sector Indeed does it make sense for German ten year bonds to yield more than Treasuries when the inflationary rhetoric of the European Central Bank looks much more hawkish Veteran investors may recall 1962 when the Treasury bond yield was less than 4 Those who bought bonds then earned negative real returns over the succeeding five ten and 20 year periods They should be very careful about making the same mistake again Chapter Four Foreign Exchange I Key Words Forex FX Aussie loonie greenback cable Swissie kiwi bid ask spread pip appreciation depreciation revaluation devaluation currency basket pegging base currency cross currency quote currency reserve currency hard currency soft currency fixed exchange rate floating exchange rate cross rate exchange rate II Text Big Mac Index Ever since 1986 the Economist has published its famed Big Mac Index an informal way of measuring the purchasing power parity PPP between two currencies Its purpose is to make complex exchange rate theory as digestible as well a Big Mac The theory of purchasing power parity says that a dollar should buy the same amount in all countries Thus in the long run the exchange rate between two countries should move towards the rate that equalizes the prices of an identical basket of goods and services in each country By looking at a McDonald s Big Mac a good that is produced in about 120 countries the Economist s tongue in cheek index illustrates how market exchange rates can result in identical goods having different prices in different countries By comparing the cost of Big Macs across countries the Big Mac Index calculates the Big Mac PPP the exchange rate that would mean hamburgers cost the same in the U S as abroad Compare the Big Mac PPP to the market exchange rates and you see which currencies are under or over valued How does it work The Big Mac PPP exchange rate between two countries is obtained by dividing the price of a Big Mac in one country in its currency by the price of a Big Mac in another country in its currency This value is then compared with the actual exchange rate if it is lower then the first currency is under valued according to PPP theory compared with the second and conversely if it is higher then the first currency is over valued For example using figures in July 2008 the price of a Big Mac was 3 57 in the United States the price of a Big Mac was 2 29 in the United Kingdom Britain Varies by region the implied purchasing power parity was 1 56 to 1 that is 3 57 2 29 1 56 this compares with an actual exchange rate of 2 00 to 1 at the time 1 56 2 00 2 00 100 22 the pound was thus overvalued against the dollar by 22 The Big Mac Index An Imperfect Measure The Big Mac Index does have its shortcomings A Big Mac s price reflects more than just the cost of bread and meat and vegetables It also reflects non tradable elements such as rent and labor For that reason the Big Mac Index probably is best when comparing countries at roughly the same stage of development In any case there is no theoretical reason why non tradable goods and services should be equal in different countries That explains why PPPs are different from market exchange rates over time Furthermore eating a Big Mac means different things in different countries Indians eat fewer Big Macs than Americans In some countries eating at McDonald s is a relative luxury Whereas low income Americans may eat at McDonald s a few times a week low income Malaysians rarely eat Big Macs Finally local taxes levels of competition and import duties on Big Mac components may not be representative of the country s economy as a whole The latest Big Mac index suggests the euro is still overvalued Jul 22nd 2010 The economist ASK Western policymakers how they intend to squeeze growth from their sluggish economies and most pin their hopes on higher exports That makes exchange rates an especially sensitive topic A weaker currency improves the competitiveness of a country by making exports cheaper It also encourages domestic consumers to switch from expensive imports to domestic goods The Economist s exchange rate scorecard the Big Ma