Just when I was beginning to think the Chinese had us by the short hairs, a potential move of desparation can prove me wrong. Of course, everything hindges on US politicians doing the right thing, and protecting our national interests over making a buck. I guess we'll see. I'm talking about the rumor of the Chinese oil giant CNOOC Ltd (CEO), making a competing bid for Unocal (UCL). Maybe we do have something we can finally hold over their heads.
I have serious doubts whether regulators will ever grant CNOOC approval to outbid Chevron (CVX). In reality, regulator approval is the only trump card the US has to keep the Chinese from declaring economic war on America.
Also announced today was China's interest in buying Maytag out from under a New York investment firm, Ripplewood Holdings. Hey, I have an idea... why don't we bundle up Enron, Worldcom, Aldelphia, Qwest and a host of corrupt CEO's and investment bankers and sell them to the Chinese. As far as oil is concerned, that is off limits.
It is beyond me as to why our politicians and US corporations keep sucking up to the communist Chinese regime. Of course the quest for money sometimes tends to supersede our national sovereignty. Watch this Unocal (UCL) situation very closely. If our regulators allow CNOOC to outbid Chevron, the ramifications would be devistating for our nation. I doubt very seriously however that this would be allowed.
Our recommendation of the GMAC preferreds on May 9th have paid off nicely. If you happened to purchase the preferreds we highlighted in May, you're sitting on almost a 13% capital gain in a little over a month.
In addition, Sears Holdings(SHLD) jumped 19 points since dipping below our buy limit of $139 on June 14th.
I will give you a rundown soon on all the stocks in the Investor Alert Portfolio. I would like to hang on to what we have for the final burst up that seems to be coming sometime this summer.
For those of you who are still in real estate bubble denial, I leave you with a few excerpts from the June 4th Cavuto on Business.
Bottom Line
Neil Cavuto: Has Donald Trump called the top of the housing market? Trump and his partners will rake in a record $1.8 billion on the biggest sale of residential real estate in New York City history. Some say the Donald sees a top and is getting out while the getting's still good. Jim, is it downhill from here for the housing market?
Jim Rogers: Donald Trump has never been right about much of anything. But I have to say this time
Neil Cavuto: I don't know. This Apprentice thing was pretty good.
Jim Rogers: All right. You're right about that, but Real Estate is topping in America. I'm sure homebuilders are starting to lose money. I assure you it's starting to crack.
Barbara Corcoran: A couple of facts here. The flippers are roughly 2 percent of the U.S. market right now. I don't consider second-home buyers flippers. But the part I think everyone always overlooks is the amount of supply we have compared with 1987, when everyone acknowledged that it was ready to burst and it didn't burst, but it slid.
Neil Cavuto: But the precursor to that was the stock market crash. Do we need a stock market crash to get a real estate crash?
Barbara Corcoran: You need something else because this whole thing is not a bubble.
Jim Rogers: Barbara, dotcoms were also 2 percent of the market and when that crashed, the market went. That's what's going to happen in the hot markets.
Jim Rogers: The foreclosure rate is the highest its been in America. Somebody is suffering.
Leigh Gallagher: What better gift for a couple than a home improvement stock like Lowe's (LOW). They're the number two behind Home Depot. Consumer confidence is surging, so as a retail stock it is a play on that.
Jim Rogers: You just said consumer confidence is surging. You're supposed to sell at the top. If real estate tanks, which I think it's going to do, than people are not going to be spending money fixing up these houses.
Comments (1)
Didn't China buy a significant interest in the Alberta oil fields? And what if Congress says no to their purchase of Unocal? China is obsessed with purchasing natural resources to diversify and complement their holdings of massive US debt. China would probably threaten to take money out of our country, but the US has to make a stand. Afterall, wasn't it 2 years ago during congressional testimoney that Alan Greenspan said that he didn't care if we continued to lose manufacturing jobs as long as we had a reliable source of manufacturing goods AND THAT IT DIDN'T JEOPARDIZE OUR NATIONAL SECURITY. I think our national security is already jeopardized because of a 30% external debt that is growing 25% annually and a current account deficit of 7%.
Posted by alan | June 22, 2005 11:27 AM
Posted on June 22, 2005 11:27