Conflict Erupts Between Russia And Georgia

In the shadow of the Olympics Russia and Georgia are engaged in a full scale war. The recent news of missile and bombing attacks on Georgian Airbases and civilian areas shows Russia's reemergence on the World scene and its intentions to dominate or at least weaken the surrounding republics that were once part of the Soviet Union. While it is unlikely that this will spread into a much larger conflict, there have been fears in the west comparing this to past Soviet and Czarist Empire ambitions.

Bottom Line: The is very little that the U.S. or NATO can do other than work the phones in hopes of persuading the two sides to pull back. The big risk, is the lack of any major intervention may encourage Russia to seize territory from other former Soviet Republics.

Is Now A Good Time To Invest In China

China's economy is growing at an incredible rate. However, many are concerned about the country's potential slow down. The Shanghai Stock Exchange is down 55.2% from its October peak. It was down as much as 58%. Some are calling this, "Double bear market territory." That being said, those who are avoiding China are missing the big picture. China, has become the second most important country on the planet. In 2007, it contributed more to global growth than the United States. The first time since the Great Depression. Second, its manufacturing sector is now bigger than that of the U.S. And third, China is now the number two manufacturer of cars and the number one producer of merchant ships.

Bottom Line: It would not be surprising to see the standard of living in China grow by 8000% during our lifetimes. However, it will not happen overnight and will not occur in a straight line. The way we recommend to invest in China is through ADR's that trade in the United States or through ETF's that can give you growth as well as strong dividends.

Upcoming Events And Earnings

Tuesday August 12

Trade Balance: consensus: -61.9B prior: -59.8B

Wednesday August 13

Import and Export Prices: prior: .9%

Retail Sales: consensus: .5% prior:.1%

Business Inventories: consensus: .5% prior: .3%

Oil Inventories: prior:1.614M

Thursday August 14

CPI: consensus: .4% prior: 1.1%

Initial Claims: prior: 455K

Friday August 15

NY Empire Index: consensus: -5.0 prior: -4.9

Industrial Production: consensus: 0.0% prior: .5%

Michigan Sentiment: consensus: 62.0 prior: 61.2

Upcoming Earnings

Wednesday August 13

Deere (DE): Before the bell: consensus: 1.37

Thursday August 14

Wal Mart (WMT): Before the bell: consensus: .84

Friday August 15

JC Penny (JCP): Before the bell: consensus: .42

Buys

The Greater China Fund (GCH). This ETF invests in the public equity markets of China. It is right off it's 52 week low of 11.59. Which, is also where long term support levels are at. The current dividend is $8.50 or 69.70%. This is one way to get involved in the growth of China and receive a strong dividend as well.