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Five Things You Need to Know for Monday

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What you need to know (and what it means).

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Five things you need to know to stay ahead of the pack on Wall Street.

1. China Bear Jamboree?

The Wall Street Journal says China Construction Bank is in talks with Bear Stearns to acquire a 10-20% stake in the firm. Bloomberg says CCB denies the report.

  • According to the Journal, the deal could be worth as much as $4 billion and would give the Chinese bank a 10-20% stake in Bear Stearns
  • China Construction Bank is the country's third largest lender and was the first of the major Chinese banks to begin trading on the stock market.
  • Last year, Bank of America (BAC) paid a total of $3 billion for a 9% stake in the bank.
  • The Chinese government still controls the bank through Central Huijin Investment Co., a state-owned concern that controls about 72% of the bank's shares and nominates and elects a majority of its board.
  • Central Huijin's third highest-ranking official, denied talks were being held.
  • But CCB, which raised $8 billion selling shares in Hong Kong last year, is looking to buy a lender as a part of a ``long-term'' plan, Chairman Guo said last month.
  • Because it involves a bond purchase, and not a direct equity investment, the structure of would allow CCB to get around the difficult investment-approval process in China.
  • Bear Stearns is the fifth largest U.S. securities firm.

2. Are you with me Mr. Hu?

China President Hu Jintao is visiting Washington this week, arriving in Seattle tomorrow to kick off a four-day tour.

  • This is President Hu Jintao's first formal U.S. visit since becoming China's leader three years ago.
  • It will include a meeting with President Bush, a speech at Yale, and visits to Microsoft and Boeing.
  • Mr. Hu is scheduled to dine with Microsoft's Bill Gates and deliver a speech at a tour of Boeing's factory.
  • Meanwhile, over the weekend Mr. Hu disclosed in a televised meeting with a visiting Taiwanese official that China's growth rate in the first quarter had accelerated over last year.
  • Until now, China has said its growth is moderating.
  • This increases the tension between Beijing and Washington as the U.S. government has been insistent that China take more decisive steps to allow its currency to rise.
  • The accelerating economic figures have implications for commodities markets as China has been a key buyer of industrial metals and materials to fuel its pace of construction, manufacturing and transportation activities.
  • China's National Bureau of Statistics will release detailed first-quarter figures on Thursday.

3. Pardon our TICS

Against the backdrop of Chinese growth and Japan's turnaround, increased focus and scrutiny of the US Treasury International Capital Systems (TICS) data.

  • U.S. foreign capital inflows rose to $86.9 billion in February.
  • The TICS data measures net foreign purchases of U.S. securities.
  • Foreign investors need to exchange their currencies for dollars to buy U.S. securities.
  • February's current account deficit was $65.7 billion, so we needed to draw in more than $2 billion a day to offset it.
  • The data was forecast to come in at $65 billion, slightly below January's $66 billion according to one survey, and $60 billion, according to the median estimate in a Bloomberg survey.
  • Cheng Siwei, vice chairman of China's Standing Committee of the National People's Congress said yesterday the country should slowly reduce U.S. debt holdings and boost imports from the U.S. instead, according to Bloomberg.

4. 13 - 70 - 600

Looking at the number series above, which answer below best describes the pattern in the string?

  • A. The combination to the padlock on locker 137 at St. Leo's High School in Springfield.
  • B. Eyeglasses prescription for Darrell "Three Eye" Willoughby.
  • C. Silver, Crude and Gold above the Doomsday Thresholds.
  • If you answered C, then you are following metals and crude as gold hits 25-year highs and the latter spikes to its highest level in eight months, presumably on fears over the increasingly tense Iran - U.S. nuclear standoff.
  • Silver is at its highest level since 1983.
  • Spot gold hit a high of $850 in January 1980.
  • Oil reached a record $70.85 on Aug. 30, a day after Hurricane Katrina.
  • Japan and India have both expressed concern over rising oil prices, saying these levels could threaten domestic consumption.
  • As well, in the U.S., demand for gasoline peaks as travel increases between Memorial Day until Labor Day.
  • The average U.S. pump price for regular gasoline was $2.717 a gallon on April 13, up 8.4 percent from a month ago, according to AAA.
  • The U.S. recently changed regulations for gasoline content, forcing removal of methyl tertiary butyl ether in favor of ethanol.

5. Whatever you do, don't spill your drink.

What is it with all these high-priced cocktails?

  • Apparently, Manhattan's average drink price of $12 for a typical cocktail is not enough.
  • Foxwood Resort Casino in Connecticut recently introduced a $3,000 martini made with Blue Curacao, Bombay Sapphire Gin and a splash of vermouth.
  • Oh, and a pair of custom-made blue sapphire and diamond earrings set in a sterling silver pick.
  • The Algonquin Hotel's Blue Bar in New York offers a $10,000 diamond martini, accompanied by a diamond from the hotel jeweler. (Two have been sold).
  • The Prime Steakhouse at Bellagio hotel-casino on the Las Vegas strip offers 50-year-old aged Chivas Royal Scotch that costs $1,050 for an ounce.
  • Churchill Downs recently announced plans to offer a $1,000 Mint Juelp at this year's Kentucky Derby. The drink will come in a 24-carat gold-plated julep cup.
  • At the rate of increase being seen in spot gold, that may wind up being a bargain after all.

Poor man's mint julep cup in sterling silver.





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The information on this website reflects an analysis of market conditions by Minyanville contributors and should not be interpreted as or deemed to be a recommendation to any investor or category of investors to purchase, sell or hold any security. Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Minyanville contributors will not respond to requests for individual and specific investment advice.

The views expressed on this website are solely those of the writers whose articles appear on this site and do not necessarily reflect the views of the Fund or of any other person except where expressly indicated.

Copyright 2006 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.

THIS CONTENT IS FOR EDUCATIONAL PURPOSES AND IS NOT INTENDED AS ADVICE.Minyanville contributors may trade securities that are discussed on the site, both before and after the articles are published and/or may have a position in such securities for either personal or firm account(s). Minyanville contributors will indicate whether he or the firm has a position in stocks or other securities in any of the companies he discusses in an article. He will not disclose his or the firm's ownership of any securities issued by companies that are not discussed in an article. The disclosures will be accurate as of the time of publication of an article and may change at any time thereafter without notice to the reader. The information on this website reflects an analysis of market conditions by Minyanville contributors and should not be interpreted as or deemed to be a recommendation to any investor or category of investors to purchase, sell or hold any security. Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Minyanville contributors will not respond to requests for individual and specific investment advice. The views expressed on this website are solely those of the writers whose articles appear on this site and do not necessarily reflect the views of the Fund or of any other person except where expressly indicated. Copyright 2006 Minyanville Publishing and Multimedia, LLC. All Rights Reserved.

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The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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