What are you expecting for the G8 meeting? Will there be a debate on USD as a reserve currency?

“The Chinese didn’t want to let Xinjiang be independent before, but after they built all the oilfields, it became absolutely impossible,” said one Muslim resident in Korla, who asked not to be named for fear of retribution by government security agents.

The Chinese have been buying up African oil assets left and right. But, this is a HUGE asset grab by the Chinese in America’s backyard. Remember the Monroe Doctrine? Well, forget about that now, because it is game on for the Chinese.

China has a different method for handling WTO complaints. At the same time that she files the complaint, she takes an action against American products that is way out of proportion, forcing America to cave.

A few days ago, Dr. Oatley wrote about the attempt by the U.S. House of Representatives to cap greenhouse emissions and coerce other countries into doing the same:

This time it is the Waxman-Markey cap and trade legislation. The intent of the legislation--reduce greenhouse gases--addresses concerns of the Democrats' median voter, who cares deeply about climate change. Producers, however, are concerned that the higher energy costs generated by cap and trade will disadvantage them relative to Chinese firms who are not facing higher energy costs because China does not regulate greenhouse gases. The solution, added late to the legislation, is to impose tariffs on goods from countries that do not regulate GHG (i.e., China). Nobody really wants to impose tariffs, but the hope is that the threat of tariffs will be sufficient to induce China to agree to international regulations on CO2 emissions.

People often accept naive views of how the market works, perhaps considering how their own life seems to work, and not considering the other side of the trade. As an example, aside from laziness, why do market observers report a day where the market goes down on no significant news as “profit taking,” or grab at some lame smaller story which couldn’t explain the decline? For every seller, there is a buyer. No money went into or out of the market unless there was a new IPO, rights offering, company sale for cash, buyback, cash dividend, etc. People don’t run away from or run to the market; only the terms of the trade change at the margin.

From the WSJ:

“Go East” is a message being heeded by many Asian professionals in the United States and Europe who see brighter job prospects in a region that is expected to outperform the rest of the world for economic growth.

The Japanese, who also have the same export orientation, making them the second largest holder of U.S. treasury assets, have come America’s defense.

Guilin Sanjin priced its IPO at 19.8 RMB per share, on the high side of its projected 17-21 RMB range. Because of the price and an expanded offering size, the 46 million shares placed in the IPO will generate 911 million RMB, about 44% more than the original projection. At the IPO price, the price/earnings multiple for the offering is 33, a sufficiently high number to discourage some investors from participating. Others, however, were more than willing to take their place. Among other products, Guilin Sanjin makes Watermelon Frost lozenges.

Xarelto is an oral medication, taken once daily, that was approved for the relatively narrow indication of preventing deep vein thrombosis in patients who undergo knee or hip replacement surgery. Xarelto works by inhibiting the enzyme known as factor Xa. Xa helps thrombin and fibrin fibers combine to form clots. As such, Xarelto’s mechanism is different from the blood thinners that are currently on the market.

Also, affiliates of Suzhou Erye Pharmaceuticals Company, Ltd. have increased their overall investment in NeoStem to over $1,000,000. NeoStem expects to acquire a 51% in Suzhou Erye by merging with a company that owns the 51% stake in Suzhou Erye. NeoStem plans to close the transaction, which was announced in late 2008, before the end of the year.

Not surprisingly, a cautious mood has descended on investors as they await the next major move in the stock market. During this lacklustre period (a good excuse for not updating this blog), what gives for July? For one thing, there is the hugely anticipated second quarter earnings reports which will either lend credence to green shoots theory or spark a fresh round of selling as optimism is shown to have overtaken reality by a mile.

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It is likely that the commodities rally of the past few months was mainly driven by Chinese strategic stockpiling. If the stockpiling comes to an end, and there are no other major buyers, commodity prices could potentially crash by 20-50% from their recent highs.

From MarketWatch, real estate prices in China are going through the roof:

July 2 (Bloomberg) — China will allow companies to use the yuan to settle cross-border trade and let them keep their entitlement to export tax rebates, seeking to reduce the reliance of importers and exporters on the U.S. dollar.

It wasn't until about June 9 that the mainstream media was told that the Chinese government was planning to purchase an additional huge quantity of gold. The information became public when U.S. Rep. Mark Kirk (R-Ill.) was interviewed on Fox News by Greta Van Susteren.