Date: 13 Dec 96 04:26:03 From: Chuanga@cris.com (H Andrew Chuang) Organization: Concentric Internet Services References: 1 2 Followups: 1 2
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In article <airliners.1996.2822@ohare.Chicago.COM> Jean-Francois Bosc (firstname.lastname@example.org) wrote: > Chuanga@cris.com (H Andrew Chuang) writes: > > In article <airliners.1996.2380@ohare.Chicago.COM> Jean-Francois Bosc (email@example.com) wrote: > > > The fact is that the only governments helps allowed by the European > > > returned Commission, and provided by governments, are loans, which > > > _are_ being after a while. > > > At market rate? Most likely not. Then, it's a subsidy. Also, most > > surveys show productivity of European labor is in general less than their > > American counterpart. > > Well, there was one I read a few months ago showing that labor productivity > was higher in France than in any other country ... Are you sure ... > Also, all analysts I heard agree that the current low rate of the US dollar > is a subsidy for US exporting companies, and that the normal rate should > be around 20% higher (if I remember correctly). All analysts? Furthermore, if the exchange rate is so much in favor of US exporters, why is US trade deficit still growing? > Finally, considering that market loan rates are around 5%, even if you > are right this doesn't leave much room for significant "subsidies". Investors can get panic with a 0.5% change in prime rate, and you think 5% is not significant! I'm no economist, but I know every percentage point counts. Just a simple illustration: after 25 years, one billion dollars compounded monthly at 5% annual interest rate will be worth 3.48 billion dollars; compounded monthly at 10% will be 12.06 billion dollars. Insignificant? I wish I could find a banker who thinks like you do. (I would think many of Airbus's loans were paid as lump sums, thus, my simple example is not totally irrelevant.) FWIW, I came across this number recently: Airbus received approximately US$3.5b worth of loans from the participating governments for the A330/340 program in 1987.