Re Fred's [6104]: > I went back to check the data * (what data, Fred?) > and > discovered that about half of the decline in nonfinancial sector net > profit that I discussed in my previous post was indeed due to increased > interest payments as a percentage of gross profit (net profit + > interest). The ratio of net profit to gross profit declined from 0.77 in > 1997 to 0.64 in the second quarter of 2001. <snip, JL> > This result surprises me, because interest rates did not increase that > much from 1997 to 2000 and have of course decreased in 2001. So it would > be interesting to look into this result further. Anybody have any further > explanations? It might be interesting to disaggregate this data to see whether there are significant sectoral inequalities regarding indebtedness. E.g. it would be interesting to inquire about the indebtedness of so-called 'high tech' firms offering stocks on the NASDAQ and compare that to the level of indebtedness of the rest of the non-financial corporate sector to determine whether there is a correlation of firm indebtedness to the so-called 'Internet bubble'. In solidarity, Jerry
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