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A manager of a large hedge fund based in Hong Kong described yesterday's trading
session in Asia as 'very worrisome.' Big intraday swings in some markets, in
particular, reveal an abiding uncertainty about the health of the global
financial system. 'There is wild volatility, which means no one knows what to
do, and there is no single direction of the market,' the manager said.

Further dollar weakness would hamper Asian exports to the U.S. because American
consumers would be forced to pay higher prices for goods.

The Fed's decision to push rates lower this quickly could exert further downward
pressure on the dollar.

There were different problems at the companies including insufficient cash flow to fund cash needs and a history of negative working capital, a condition that exists when a company grows rapidly, but which is unsustainable in the long run. The study found signs of possible earnings management with low allowances for bad debt and other provisions not keeping pace with inventory growth. That may mean so-called “cookie jar” accounting – where companies lower reserves and use excess cash to boost revenues.

The benchmark Shanghai Composite index, which had passed the 3,000 milestone on Monday following the weeklong Chinese New Year holiday, shed 268 points, or 8.8 percent, to close at 2,771.79

The smaller Shenzhen Component index fell even further, dropping 797.87 points, or 9.3 percent, to close at 7,790.82

Best Foreign Film – China Stock Market. The Shanghai Composite Index filmed a beautiful screenplay in 2006, rising exponentially from around 1100 to nearly 3000. But there's something to be wary of in this movie, as the February issue of the Elliott Wave Financial Forecast points out: "Chinese stock-buying frenzies are getting to be like 'Rocky' movies; they keep coming and coming. Of course, there is a very important difference; they don't end happily."

That refers to the original version of the movie, known as Red Chip Fever, that took place in Hong Kong's main stock index, the Hang Seng, in 1997. After a strong rise, the Hang Seng topped a month after Hong Kong reunited with mainland China and fell 46 percent in three months. EWI's analysts see the latest Chinese mania coming to an abrupt end, the same way the rise in housing stocks and copper did over the past two years.

Suntech
(nyse:
STP -

news
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people
) is a producer of photovoltaic cells that integrate directly with building materials, so that customers can generate significant amounts of solar power to produce electricity for homes, businesses and even bigger locations like stadiums.

"This Jiangsu-based company is also expected to be the biggest winner if the government's plan to build the world's largest solar power station goes through. Another key development for the company is the announcement that production of its latest 18% 'semiconductor finger' technology is proceeding on schedule. These cells will be more efficient than the 14% to 15% industry average.

Suntech has a market capitalization of $5.8 billion and trades for just above 30 times expected 2007 earnings.

"The company has a commitment to be the 'lowest cost per watt' PV cells in the industry. Suntech will be supplying solar power to Beijing's Bird Nest Stadium for the 2008 Summer Olympics.

Stephen Leeb, president of Leeb Capital and editor of the Complete Investor newsletter, recommends taking advantage of a pullback in shares of Wuxi, China-based Suntech Power Holdings to buy into two investment themes at once: China and green power.