by Edward Hugh: Barcelonabr /br /br /Wolfgan Munchau a href=”http://www.ft.com/cms/s/0/c94ac804-fb62-11dd-bcad-000077b07658.html?nclick_check=1″was complaining only last weekend/a about the extraordinary narrow-mindedness of Europe’s economic and political leadership in the face of the current financial and economic crisis, from Ireland in the West to Hungary in the East, and from Greece in the South to Sweden in the North. But more than narrow mindedness what we are faced with is innocence and inability to react, and frankly I am not sure which is worst. I say “innocence” because it is by now abundantly clear that they simply haven’t yet grasped the severity of the problems we face (in countries like Spain, or even Germany itself, let alone in the East), and I say inability to react, since they are always and forever moving too little and too late. The initial response to the banking crisis last October was one example (where we saw a …

HLS Systems International, Ltd. (HOLI), a provider of automation control systems to the nuclear, rail, and industrial markets in China, reported fourth quarter and full fiscal year 2008 financial results yesterday afternoon after the close. Revenues in the quarter fell slightly to $31.9 million from $33.6 million in the same period last year, and were impacted by the earthquake that struck Sichuan Province in May. Net income soared 414% to $6.3 million, or 14 cents per share, compared to $1.2 million, or 4 cents per share. For fiscal 2008, revenues rose 19.3% to $121.5 million, from $101.9 million in 2007. Net loss on a GAAP basis was $1.2 million, compared to GAAP net income of $13.1 million last year. Excluding non-cash stock compensation expense of $17.0 million, non-GAAP net income increased 20.9% to $15.8 million.

“We were pleased with our results for FY 2008,” said Dr. Wang Changli, HLS’ Chief Executive

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CDC Corp.’s (CHINA) loss for the second quarter of 2008 was $0.10 per share. However, its adjusted EPS again exceeded market expectations. We still think CDC is well positioned to leverage the growth opportunities in the small-to-medium business enterprise software market and China’s online game market.

In addition, its stock is trading under book value and the company will continue to repurchase its shares. Overall, we don’t think its current stock price fully reflects the company’s intrinsic value. Therefore, we are maintaining our Buy rating on CDC shares.

With a differentiated combination of online games, mobile applications, and Internet portals and media services, CDC's New Media Business is positioned to take advantage of the burgeoning demand for online services and entertainment in the China market.

China has 253 million internet users as of June 30, 2008. The internet users are expected to increase at 15% annually in the next three years.

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It is estimated that China will spend $42 billion to host the Olympics. To put that into perspective, that is almost three times what Greece spent on the Athens Olympics and roughly the cost of Hurricane Katrina reconstruction. That infrastructure build out has certainly been a major boost to the Chinese economy, but China plans on spending even more on the 2010 World Expo in Shanghai and the Sichuan earthquake reconstruction is expect to cost $140 billion. The Chinese building boom is going to last for a lot longer.

The May 27 Fast Money University segment had bad news for some — but possibly good for others. What was the topic?

#3 - Fast Money University: Natural Disasters

Syllabus: Is it possible to trade major disasters such as an earthquake or a cyclone?

China's industrial-production growth accelerated on rising exports, signaling that the world's fourth-biggest economy is weathering a global slowdown. Output rose 16 percent in May from a year earlier after gaining 15.7 percent in April, the statistics bureau said today.Overseas shipments surged last month and retail-sales growth was close to the highest in nine years, keeping factories busy even as the deadliest earthquake in 32 years disrupted output in Sichuan province. The shortening of a weeklong May holiday to a three-day break boosted production. Sichuan's small role in China's manufacturing limited the May 12 disaster's effect on production. Quake reconstruction work is boosting output of some products like steel sheets for housing. Raw-coal production rose 18.5 percent in May from a year earlier after gaining 13.9 percent in April. Crude-oil output climbed 1.8 percent in May after increasing 0.5 ...

I don't mean to turn this into a Hollywood tabloid blog, but I wanted to show how authoritarian the Chinese government is. In fact, I think twice before I say anything about the Chinese government. Sharon Stone made the insensitive remarks about the Sichuan earthquake being 'karma' for government poor treatment of Tibet. Not only has Christian Dior fired Stone as their representative in Asia, she was removed from the celebrity invitation list from the Shanghai Film Festival as well as having all her movies permanently banned from being played in China.

I really like Chinese gaming company Perfect World (PWRD) from a fundamental perspective; after selling off from its guidance after a very good earnings report [May 19: Perfect World - Good Earnings, Light Guidance - Buying the Dip] the stock spent a few days in purgatory before making a nice rebound. However, at this point technically we have some technical resistance ahead, both the 50 and 200 day moving averages lie ahead; the 50 day in the $26s and the 200 day around $27. Honestly this is as perfect of a setup as you could ask for from a technical perspective. Sell now right below resistance areas, and rebuy either (a) on a move over $27 or (b) on a pullback. So I'm executing the first part of that strategy (sell) here around $26.20... then for the second part (buy back), if the stock ...

If you want to do business in Asia, you need to be careful about what you say. Sharon Stone, the model/spokesperson for Christian Dior in Asia, recently said the Sichuan earthquake was 'karma' for its treatment of Tibet. That insensitive remark outraged the Chinese. Not only has Christian Dior dropped Stone from its Asian advertising campaign, the Christian Dior booth at the Hong Kong mall I visited was deader than a doornail. The other cosmetic counters were doing brisk business...but Christian Dior was dead. A similar boycott happened to French grocery retailers Carrefour when the Olympic torch was aggressively protested during its journey through France.