I. Shares of three publicly traded Chinese-based Internet portals -- Sina, Sohu.com, and Netease.com -- are up an average of 68 percent during the past month. The meteoric rise is scary, especially when you consider that when Sohu and Sina reported their first-quarter results this week, management of both companies said that if anything, future results could be negatively impacted by SARS as companies in China cut back on advertising. To be sure, the companies do have some fundamentals in their favor, and SARS is not the only reason the stocks have gone up. In fact, the three stocks are up an average of 108 percent this year and almost 760 percent since the Nasdaq's early October lows. Chang-hua Qiu, an analyst with FORUN Technologies, said that the three companies have done a good job of boosting their fee-based businesses, such as premium messaging services and online gaming, in order to lessen their dependence on advertising. (b) Their trading brings profit that is 30 times the profit they used to make. (c) They are making profit almost a half of the profit that Yahoo! has made. (d) Yahoo! makes profit that is 73 times its market price, which doubles those of the three portals. II. Japan's Nikkei average extended gains for a second session Thursday, clawing back ground lost to the "Sony shock," after banks rose on short-covering as investors anticipated policy steps to deal with the market slump. Analysts said recent media reports of emergency economic proposals by Japan's ruling parties boosted hopes for steps to prevent further drops in Japanese shares, which sank to 20-year lows earlier this week. The Nikkei rose 0.41 percent to close at 7,863.29. That put it above last Thursday's closing level of 7,854.57, after which Sony Corp. shocked the market with earnings and an outlook that were well below expectations. As a result, the companies have recently started to report profits after enduring several years of losses. And for what it's worth, the Chinese portals aren't nearly as expensive as Yahoo!, even with their huge run. Based on 2003 earnings estimates from Qiu, the three stocks are trading at less than 30 times earnings. Yahoo! has a price/earnings ratio of 73. "With the BOJ's move yesterday, the ruling coalition set to finalize a package over the long weekend, and Sony's plunge stopped, we have an atmosphere where it has become difficult to sell," said Tsuyoshi Nomaguchi, a strategist at Daiwa Securities. Still, making a bet on one analyst's estimates is obviously a huge risk, so investors would probably be wise to steer clear of these stocks. The Bank of Japan's surprise decision Wednesday to pump more liquidity into the financial system and the results of the latest inspections on bank loans, which were better than some had expected, were also behind the short-covering. 1. The three Internet portals are great listed companies in China. 2. Fundamentally speaking, the three portals are sending more and more stocks to the market to win investors’ favor. 3. The three portals are charging their customers in the hope that they can rely less on advertising. 4. It is advisable for investors to keep away from the three companies. 5. Why is the rise so meteoric and scary? (a) SARS seems to be the only reason why the stocks have gone up. (b) The rise is great, but future results could be negatively impacted by SARS. (c) Their stocks went up a lot, but companies in China could cut back on advertising. (d) Sohu and Sina reported their first-quarter results this week, but their stocks still went up a lot. 6. Which is correct about the three portals? (a) Their market prices are 30 times their earnings. 1. The BOJ is going to make it easier for assets to be converted into cash. 2. After banks rose on short-covering, Sony Corp. shocked the market 3. What would the “package” that the ruling coalition set to finalize? (a) One that would create a better environment for investment. (b) One that would make it difficult for traders to sell their stocks. (c) One that would stop Sony from getting worse. (d) One that would eventually make the economy better. 4. Which is not related to the extended gains of the Nikkie? (a) The package finalized to stop the Sony’s plunge. (b) The liquidity to be pumped into the financial system. (c) The good results of the latest inspections on bank loans. (d) The short-covering. 1 The unemployment rate rose to 6 percent in April as businesses cut thousands of jobs for the third ___A____ month(連續第三個月), extending the worst stretch for the U.S. labor market since World War II. "All this bickering about the shape of a dividend tax cut is a ___I____ (轉移焦點的事件) from how to get consumers spending right now," said Lawrence Mishel, labor economist and president of the Economic Policy Institute, a think tank that has long opposed Bush's tax plan. Unemployment rose from 5.8 percent in March, the Labor Department said, matching its December 2002 peak, which was the highest level since August 1994. Unemployed workers now total 8.8 million, up from 8.4 million in March. 1. Outside the farm sector, the average payroll for each citizen was undercut and is now less than $48,000. III. Payrolls shrank by 48,000 outside the farm sector after falling by a revised 124,000 jobs in March. In the past three months, 523,000 jobs have been cut, the worst such extension since the months after the Sept. 11 attacks. "I'm glad it wasn't worse," said Putnam Investments economist David Kelly. "I wouldn't say the job market is out of intensive care yet, but if we see a ____B___ (上揚) in retail sales and a rise in business spending in the next few months, the effects [of recent weak economic growth] should be done by the third quarter." But some analysts worried that the big jump in the unemployment rate could weaken consumer ___C____ (消費者信心) and undercut consumer wage growth. Consumer spending makes up more than two-thirds of the total economy. "The question must be asked as to what psychological ___D____ (心理上的衝擊) there may be from this oft-cited [number] ... upon consumer sentiment," said Rosenberg of Merrill Lynch. "The unemployment rate and inflation are the most important determinants of consumer sentiment." Some economists doubt further Fed rate-cutting would do much good anyway. ___E____ (刺激景氣的因素) isn't the problem, these analysts say -- as Cheney pointed out, the economy is awash in all these positive factors, with super-low interest rates, a ____F___ing dollar (貶值中的美金) making U.S. goods more competitive overseas, low ___G___ (存貨), high productivity, and a slowly improving stock market. 2. David Kelly thinks that unemployment rate would not be a decisive factor influencing the economy. 3. Rosenberg thinks that the economy depends most on the health of consumer confidence. 4. Some believe that the real problem is that people would not buy, especially those working for corporate sectors. 5. Which month saw the highest unemployment rate: (a) August 1994 (b) December 2002 (c) March 2003 (d) April 2003. 6. Cheney believes that rate-cutting, together with a lot of positive factors, would revive the economy. 7. Bush believes that (a) the current tax is too high for American citizens. (b) Cutting citizens’ tax will create more jobs. (c) The 6% unemployment rate is an alarming indicator. (d) Citizens would find jobs once they are taxed less. The real problem, according to some analysts, is that demand is weak, particularly in the corporate sector. President Bush has proposed tax cuts of at least $550 billion, which he claims will stimulate business investment and hiring. "That 6 percent number should say loud and clear to members of both political parties in the United States Congress: We need robust tax relief so our fellow citizens can find a job," Bush said in a speech Friday. Many economists, however, doubt cutting taxes will do much to stimulate job growth in the short term and are calling for measures that could have a more immediate effect, such as giving money to cash- ___H____ed (現 金短缺的) state governments or extending unemployment benefits. 2 IV (c) Many still think China is cooking its books, but now some are pushing a new theory, that it is playing down growth, which could be rather higher than the official numbers. (d) The thinking is that China may be leaving itself ___J____ room (彈性的空間) so that if hard times hit, it can still report solid performance and avoid unnerving its people -- and cash-rich investors. For instance, it could let Beijing smooth over any __K____ falls (猛跌) as a result of the deadly SARS virus, which is already denting tourism and retailing in Asia and could dull the shine on the region's brightest spot if not controlled soon. "There are good reasons to be ___L___ (持懷疑的態 度)," Lehman Brothers analyst Rob Subbaraman said of China's economic data in a research report. "The conventional wisdom is that China's official statistics ___M____ (浮報) GDP growth. But mis-measurement can cut both ways: we judge that the economy could be growing faster than the official numbers suggest, perhaps as fast as 12 percent," Subbaraman said. China said first-quarter gross domestic product -- the broadest measure of economic activity -- was up 9.9 percent on a year earlier, rising much faster than the official target of seven percent growth in full-year 2003 GDP. The economy last year was eight percent larger than in 2001. There have been signs that China's top statisticians are taking their jobs more seriously. An IMF team is to visit China in July to __N____ (評估) the work. "The official Chinese data are more ___O___ than often thought (可信度比一般人認為的還要高)," said the latest issue of the China Economic Quarterly. "The problem is not the faking of data but the failure of the traditional reporting system to capture economic activity dispersed among hundreds of thousands of small enterprises lying outside the traditional state sector," the journal said. 1. Economists have suspected China of puffing up its economic growth. 2. Subbaraman thinks that China’s official statistics may not be puffing up its growth. 3. In recent three years, China has seen its GDP growth up almost 25%. 4. What is the new theory as pointed out in the first paragraph? (a) China is still cooking its books. (b) China’s official numbers could be even higher. China is trying to make a less rosy growth report. If hard times hit its growth, China would still report well to attract investors. Which is not related to China’s “data” problem? (a) The government’s system is too old to take hold of its economic activity that is developing rapidly. (b) The country is so big and is developing so fast that the government has no power to take hold of it. (c) Its economic activity is too diversified for the government to tale control of. (d) Too many enterprises are outside the traditional state sector that the government’s system is forced into faking data. 5. Name____________________ Number____________ Vocabulary: _____ 1. assess _____ 8. sentiment _____ 2. decline _____ 9. sharp _____ 3. distraction _____ 10. skeptical _____ 4. impact _____ 11. Stimulus _____ 5. inventories _____ 12. straight _____ 6. overstate _____ 13. strap _____ 7. pickup _____ 14. trustworthy _____ 15. wiggle Choice I. 1. _____ 2._____ 3._____ 4._____ 5._____ II. III. 1. _____ 2._____ 3._____ 4._____ 1. _____ 2._____ 3._____ 4._____ 5._____ 6._____ 7._____ IV. 1. _____ 2._____ 3._____ 4._____ 5._____ 3 (A) All/Each (B) NAPM (C) CPI (D) Core Rate (E) GDP (F) CCI _____ 1. A reading over 50% indicates that manufacturing is growing, while a reading below 50% means it is shrinking. _____ 15. It measures the number of help wanted ads in newspapers to gain a sense of the state of the labor market. _____ 2. Basically, it is the widest measure of the state of the economy. _____ 16. It provides an excellent picture of the state of manufacturing. _____ 3. It excludes volatile goods like food and energy and gives a closer measure of real inflation. _____ 17. It tracks the cost paid by consumers for goods. _____ 4. It investigates the cost of about 200 types of goods and thousands of actual products, ranging from foods and energy to expensive consumer goods. _____ 5. It is also important because it is used to adjust the annual changes to Social Security payments. _____ 6. It is believed to change in advance of changes in the economy, giving you a preview of what is going to happen before the change actually occurs. _____ 7. It is considered a crucial part of the economic picture. _____ 8. It is the aggregated monetary value of all the goods and services produced by the entire economy during the quarter. _____ 9. It is the most important indicator. _____ 10. It is the most widely used measure of inflation. _____ 18. It’s report measures how confident consumers feel about the state of the economy and their spending power. _____ 19. It’s report uses about 5,000 households as a sample population. _____ 20. Many analysts believe that a lot of what ails an economy. can be cured when it gets strong. _____ 21. The Fed watches it as it decides what to do about interest rates. _____ 22. The Growth of it above 2.5-3 % is often thought to be unsustainable and a precursor to high inflation. _____ 23. There has been much debate about how well it measures inflation, and some feel that it is an imperfect way to track rising prices. _____ 24. When it gets high, it may help soften the blow or power a recovery, even though most data points to a slumping economy. _____ 11. It is thought to be an early indicator of inflationary pressures. _____ 12. It is worth noting that each initial report of it will be revised twice before the final figure is settled upon. Name____________________ Number____________ _____ 13. It measures conditions in the manufacturing sector. _____ 14. It measures the change in the cost of a bundle of consumer goods and services. 4