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May 16

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Two Ways to Profit as China and Japan Quietly Forge the Most Powerful Trading Alliance in the World

By Martin Hutchinson
Contributing Editor

Chinese President Hu Jintao and Japanese Prime Minister Yauo Fukuda met recently and signed some modest cooperation agreements. That doesn’t sound much to get excited about, until you consider how well the Chinese and Japanese economies fit together.

Think of it this way: With China’s boundless supply of low-cost labor and Japan’s superb education system - and an ability to work together that’s clearly founded on considerable commonality of thinking - these two countries, as a pair, will be world-beaters.

In fact, they’ll be world leaders.

The Past has Passed

The summit - while modest - marked an important policy change from the mutual hostility during the premiership of Junichiro Koizumi, whose tilt to the United States and suspicion of Chinese motivations was symptomized by his love of Elvis Presley and visits to the Yasukuni Shrine, controversial because it includes convicted World War II criminals. Nevertheless, while Japan and China have many historical reasons to hate one another, so did France and Germany after World War II, and those countries have now been partners for more than 50 years in the European Union. Thus, a close economic partnership between Japan and China is by no means unthinkable.

Economically, China and Japan have …

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Former Oilman T. Boone Pickens Makes a $2 Billion Bet on Alternative Wind Energy

By Jennifer Yousfi
Managing Editor

T. Boone Pickens made his fortune in oil. But now the Dallas oilman and famed former corporate raider is betting $2 billion that he can have the same success with a new source of energy - wind.

Pickens’ Mesa Power LLP yesterday (Thursday) unveiled the first phase of an eventual $10 billion alternative energy project that has the potential to become the world’s largest wind farm.

"You find an oilfield, it peaks and starts declining, and you’ve got to find another one to replace it," Pickens, who once operated one of the largest independent oil-and-gas production companies in the country, said of the deal. "It can drive you crazy. With wind, there’s no decline curve."

Mesa Power will purchase 667 wind turbines from General Electric Co. (GE). Each turbine can produce 1.5 megawatts of electricity. The first phase of the project will produce 1,000 megawatts, enough energy to power 300,000 homes. GE will begin delivering the turbines in 2010, and current plans call for the project to start producing power in 2011.

"T. Boone Pickens’ commitment underscores the ability of …


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Global Investing Roundups

China Quake Death Toll Could Hit 50,000; Initial Jobless Claims Edge Higher; CBS to Acquire CNet; GM Strikes Deal with Union; Fed Chair Urges Banks to Raise Capital; Industrial Output Sinks Led by Auto Industry; Profit Falls, Stocks Rise for Penney’s; Multi-Billion Housing Rescue Package Close to Resolution

  • China’s central government said yesterday (Thursday) that this week’s earthquake in Sichuan ultimately could result in 50,000 deaths, and catastrophe-modeling firms are estimating the disaster will trigger losses of up to $20 billion, MarketWatch.com reported. Monday’s quake - which measured 7.9 in magnitude - is throwing a "harsh spotlight" on the widening gap between the rich and poor in China, particularly since the losses incurred by the country’s lower-wage classes were mostly not covered by insurance, The Wall Street Journal reported.

  • The number of U.S. workers filing for initial jobless benefits increased slightly more than expected in the week ended May 10, the Department of Labor said yesterday (Thursday). First-time jobless claims rose to 371,000, up from 365,000 for the week prior. Economists surveyed by Reuters had forecast the number of new claims at 370,000. The four-week moving average of new claims, considered by economists a more reliable gauge of labor trends, fell to 365,750 in the week ended May 10.

  • CBS Corp. (CBS) announced yesterday (Thursday) that it would pay $1.8 billion to acquire CNet Networks Inc. (CNET) in a move expected to help CBS establish a foothold in new advertising markets while also helping with its effort to gain a higher profile on the Internet. CBS will pay $11.50 a share for the online provider of technology news and product reviews, a 45% premium to the price CNet traded at prior to the deal’s announcement, MarketWatch reported.

  • At a conference on bank structure and competition in Chicago, U.S. Federal Reserve Chairman Ben S. Bernanke told banks to hold "generous" capital cushions and actively raise money. "I strongly urge financial institutions to remain proactive in their capital-raising efforts," Bernanke said. The Fed chair added that he has been encouraged by the success of many banks in raising new capital and he praised foreign-owned sovereign wealth funds for the positive role they were playing as suppliers of badly needed capital.

  • First-quarter profit for J.C. Penney Co., Inc. (JCP) dropped 50% from last year, but beat Wall Street expectations, causing the department store operator’s shares to rise more than 4% yesterday (Thursday). "I think it’s good news in the sense that things have stabilized. It doesn’t appear to be getting worse," Wayne Hood, a retail analyst with BMO Capital Markets, told Reuters.

  • A multibillion-dollar housing rescue package is close to being resolved, two members of the U.S. Senate Banking Committee said yesterday (Thursday). "We’re very, very close," Panel chairman Sen. Chris Dodd (D-Conn.) told CNBC. "There’s really maybe one or two issues - maybe only one that’s outstanding here that we need to resolve."