Rato--Interesting View

Yes, there are US listed Chinese companies that have not been hit yet and there are more frauds that will be uncovered.

Are there any stocks that have had hit pieces written on them that have not been delisted and have refutted the allegations using independent parties investigations, but still trade as if they are frauds? If so, eventually, their price will reflect their true value.

99% Negative Sentiment -- Maybe near bottom soon?

LLEN Seeking Alpha Author Not Writing Part 2 -- Motley Fool

Motley Fool indicates:

However, some have questioned the accuracy of the author's own statements, and although he says he stands behind what he wrote, he no longer intends to complete what was originally going to be a multipart series on the coal miner. And though he had planned to take a short position in the stock, too, that apparently is off the table as well

http://www.fool.com/investing/general/2011/06/01/why-did-my-stock-just-die.aspx

SPU Seeking Alpha Hit Piece Out -- Stock Tanking

China Corruption Score in 2010 Corruption Perceptions Index

Transparency International published the above index showing the corruption in 178 countries. Their score is between 0 (highly corrupt) to 10 (highly clean). China scores 3.5 -- same level as Colombia. Other BRIC countries score as follows: India 3.3, Brazil 3.7, and Russia 2.1. The BRIC countries have much corruption and the current scams being unveiled should come as no surprise.

Link to Index is:
http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results

OSN GeoInvesting Endorsement

Yes, it was dated Jan 3rd which I noted in my post. There many levels of buying. It could be for a quick pop which the stock did yesterday -- in and out -- until the DD is completed. This is low risk as the hold time is short. For me until Geoinvesting comes out and says that they have completed DD it is not an endorsement. If they have completed the DD why not say so and not just say that they are buying it?

OSN Geoinvesting Endorsement?

I just reviewed their "endorsement".

Jan 3, 2011

"We are considering turning our OSN trade into a short-term core holding if we:

Determine that the company will upgrade its Auditor from Sherb.
Verify that SAIC filings are in order (company is an FIE)
Gain a grip on financing needs."

They have switched auditors, but did Geoinvesting verify SAIC filings and gain a grip on financing needs?

Enforcing Legal Rights against Fraudulent Chinese Mgt & Whistleblowers Difficult

In the section (below) of the LLEN 10Q Dec 10, 2010 Pg 31 in the MD&A notes that it is difficult for investors in the United States to enforce their legal rights against the executives. For the US listed Chinese stocks, there is little to deter fraud. The worst that can happen is that their stock is delisted and they cannot raise additional capital. In the mean time, they can illegally take money from the company without recourse.

Likewise, the whistle blowers residing in China, can fabricate any story about fraud and short the stock with no legal recourse. They have a lot to gain with little to lose.

For both sides, there is a lot to gain from fraud with little consequences. Therefore, fraud is very prevalant in the CGS.

It will be difficult for any shareholder to commence a legal action against our executives. Most of our assets are located in China.



Because our directors and officer(s) reside both within and outside of the United States, it may be difficult for an investor to enforce his or her rights against them or to enforce United States court judgments against them if they live outside the United States. Most of the Company's assets are located in China, outside of the United States. Additionally, the Company plans to continue acquiring other energy-related entities in China in the future. It may therefore be difficult for investors in the United States to enforce their legal rights, to effect service of process upon the Company or the Company's directors or officers, or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on the Company or the Company's directors and officers under federal securities laws. Moreover, China currently does not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of judgments of courts.

FUQI - No News -- Probably People Mistook May 9, 2011 deadline for proxies and the shareholder's meeting for a financial statement extension as per Fi's email. He has a link in his email which talks about the May 9, 2011 proxy and shareholder meeting extension (which was announced in January) but was taken as news. People by extension thought it pertained to the March financial statement deadline. The latter is firm and cannot be extended.

FUQI 2 Deadlines -- Proxies/Shareholder Meeting and Another for Financial Statements

For Financial Statements -- Rule 5250c1 applies and the March 28, 2011 deadline cannot be extended. (Review Dec 12, 2010 news)

For Proxies/Shareholder Meeting -- Rules 5620a and 5620b -- apply and the extension to May 9, 2011 was announced Jan 25, 2011.

Its all old news.

FUQI Extension is Old News -- Announced Jan 25, 2011, but that is only for Shareholder and proxies. They must still provide their Financial Statements on or before March 28, 2011 which is the maximum length of time that a Panel may grant to regain compliance. (This was announced Dec 10, 2010)

FUQI is Pushing Higher EOM

CPGI Oppenheimer Acted as Sole Book-Running Manager for their Dec 2010 IPO @$4.

HAO Correlation

Thank you for your insight!

HAO - No Correlation with Shanghai Market

Thank you for your reply. HAO is not correlated to the Shanghai market. The latter peaked last summer and the HAO peaked in April with the US market.

Shanghai Exposure With US Listed Chinese Companies

How do you benefit from current rise in the Shanghai market and projected rise till October, if the US market declines during the same period? The US listed Chinese companies move with the US market. How do you get Shanghai Market exposure without the US market exposure?

YONG Big 4 Auditor Used

As well, making allegations of fraud credible against a small cap using one of these auditors is difficult. It reduces the risk of these damaging allegations.

China Stimulus II 2010/2011??

I participated in a China webinar hosted by Deloitte this morning -- Green Giants: How China and the U.S. are Promoting Clean Development.

In this webinar, they indicated that in August of this year, China will present the details of their 2010/2011 589B$ stimulus package (the same size as their 2008/2009 stimulus). One of the speakers was from their US Chinese Service Group and another was Senior Advisor to Deloitte China, based in Beijing.

Does anyone else have any more information about China doing another stimulus package? I was under the impression that China was still trying to tighten to curb inflation.

If there is another stimulus package, why is the SSEC the worst performing market?

Hi

I would you send me the link to that article? I would like to follow up on this with the auditing firms mentioned.

Thanks.

CHOPW Low $0.01 EOM

ONP

As Muddy Waters was an unknown entity without a reputation to protect, but BDO's only commodity is its reputation, I invested in ONP. As ONP is an US listed stock, I hope that ONP pursue every possible avenue to bring charges against Muddy Waters.

ONP BDO

The auditing process is rigorous. Among other things, it requires that the auditor observe physical assets and have knowledge of the client's business. I cannot imagine BDO providing an audit opinion without this.

Rames ONP - BDO

If BDO was not the auditor, I would be concerned. They are in the top tier. As a certified accountant, I am familiar with the auditing process and this requires the auditor to inspect not only records, but assets - inventory count etc. I cannot imagine BDO not figuring out there is a fraud when they inspect assets onsite.

ONP Rick Pearson May 17, 2010

"Along with Orient Paper(ONP), my favorite price vs. fundamentals play is Duoyuan Printing(DYP). "

ONP Rick Pearson recommended stock

Do you know if he visited the facilities?

Rato I'm with you especially with the auditor they have

I went in at 4.25. Going up now.

Support at either 4.64 or 4.20ish depending on SPY action

ONP Denies Report by Muddy Waters that Its a Fraud
http://finance.yahoo.com/news/Orient-Paper-Responds-to-prnews-2825973296.html?x=0&.v=59

YONG List Accounting = Intangible Asset

Derek Why raise - Junior Resource Company Parallels

Thank you for your thoughts.

My experience in the junior resource company space parallels my experience in the CGS space. When the resource company is growing its reserves, the shareholder benefits. However, when it is ramping up for production, the shareholder is diluted many times over and loses money. When it is close to production, a shareholder entering at this time usually benefits. In the CGS space, a good entry point is when the company is close to bringing the new production on line.

Rato SCEI Dilution

As this dilution trend continues so do the low PEs in the CGS space.

FUQI Rising Today -- Any news yet??? eom

SPY Rally?

I wonder if the SPY is finished its correction with tightening around the world -- China, UK, Euro zone? Can US markets have a sustained rally while others are falling?

NFEC Files DEF 14C for Reverse Split Approval

Great Western Minerals Group - Rareco Sub Obtains Long Awaited Mining Permit

Today the company announced that Rareco Sub received the Steenkampskraal Mining Permit in South Africa.

"Rareco and Great Western Minerals Group Ltd. of Saskatoon, Canada, plan to bring Steenkampskraal into production as one of the first new Rare Earth mines outside of China."

"For GWMG, Steenkampskraal is significant since it is a high grade resource and can be brought to production quickly."

SSE Closed at 2647.57 which is below Close Aug 31, 2009 of 2667.74 - Bearish

Rato, Is it Bullish for Equities?

Yes, printing Euros is not good for the currency, but is it good for equities? Will this lead to inflation? Do you have any thoughts on the impact on equities of expansionary monetary policy on one side and tightening on the fiscal side?

Zacks Link Supporting China Stocks Today

http://www.zacks.com/stock/news/33925/Zacks'+Voice+of+the+People+highlights+opportunities+with+SPDR+S%26amp%3BP+500+ETF,+BlackRock,+Inc.,+China+Sunergy+Co.,+Ltd.+and+Suntech+Power+Holdings+Co.,+Ltd.

SPY Bounced off 200 MA and Sitting above 112

Zacks this morning was projecting that this would happen. I wonder if this support will hold.

Rato: US Dollar Reserve Currency Immunity

Great points although I wonder whether the US can continue with expansionary monetary and fiscal policy unchecked. If left unchecked, these policies will eventually lead to inflation and higher yields.