Here are the (lightly edited) bits I found interesting in this week’s issue:

“China’s central bank plans to tighten its reserve requirement ratio by a half percentage point to 8%, to reduce the money supply and stanch growing risks of inflation. The move, which will take effect July 5, comes after China posted a 19% jump in M2 money supply in May from the year-ago month.” — Robin Blumenthal

“It’s nearly a foregone conclusion that the FOMC will hike its key short-term target rate a quarter of a percentage point for a 17th consecutive time when it ends its two-day meeting June 29. Federal-fund futures are now priced for a 5.25% funds rate. But last week, the market began laying odds of better than a 60% chance of another 25 basis-point boost in August.” — Tom Sullivan

“Barclays launched a series of iPath exchange-traded notes, pegging the first two to a pair of well-known commodity-basket indexes. The iPath GSCI Total Return Index ETN (GSP) tracks the Goldman Sachs Commodity Index. The other is the iPath Dow Jones-AIG Commodity Total Return Index ETN (DJP).” — Allen Sykora

“French regulators say that EADS CEO Noel Forgeard, his three children, and several directors sold millions of euros worth of EADS shares in March. Forgeard has termed the sales ‘an unfortunate coincidence.’” — Howard Wheeldon

“On Thursday, nearly 95% of volume came in stocks that were higher on the day, an extraordinary figure that follows four days in June when 90% of the volume was in decliners.” — Michael Santoli

“In discussing the behavioral-finance strategy, Silvio Tarca, who started at JPMorgan in 2000, says investors tend to sell winners too quickly, to validate what they consider their decision to buy the stocks in the first place. On the other hand, they often hold losers too long in the hope of breaking even. Many are overly optimistic about past winners and overly pessimistic about past losers, creating prices that are unrealistically high or low. The key is identifying situations where investors overreact or underreact. Spotting an overreaction can unearth value stocks, while locating an underreaction can lead to the discovery of a stock affected by momentum investing. Tarca adds that analysts tend to underreact to new information when revising their forecasts, initially making only modest changes, because they’re still wedded to their original view.” — Christopher Williams

“Ctrip, which is up 56% this year, is still a favorite way to play travel bookings in China over the long term. The company does most of its hotel and airline bookings through traditional call centers, but it has also made innovative use of cellphones, reaching the Chinese masses that don’t have home Internet connections.” — Tiernan Ray

“Dividends have been paid without interruption since Caterpillar’s formation in 1925, via the merger of a pair of companies dating back to 1890.” — Shirley Lazo

“Abe Briloff, likes to describe certain stealth accounting practices as comparable to a bikini: what they reveal is interesting, what they conceal is vital.” — Alan Abelson

“In 2005 China accounted for 50% of the growth in aluminum consumption, 84% of the rise in demand for iron ore, 108% of the increase in consumption of steel, and 115%, 120% and 307% in the growth of worldwide demand for cement, zinc and copper, respectively. How do you say ‘wow!’ in Chinese?” — Alan Abelson

“Despite the fact that the Fed has raised interest rates 16 times, by a total of 400 basis points, and now appears to be on the verge of a 17th rate increase, the BOJ hasn’t even started. It has kept interest rates at zero for a long, long time, allowing the world to borrow at zero percent and invest in anything else with a return or yield higher than zero … the BOJ has provided literally a trillion dollars worth of credit to the world through their zero-interest-rate policies.” — Bill Gross

“We are running a $700 billion trade deficit and a fiscal deficit of over $400 billion. More than half of the $9 trillion accumulated deficit is owned by foreigners. If they demand higher rates, we’re in trouble. The underpinnings of this economy are terrible. We’re still getting a free lunch on interest rates. With an average interest cost of 5%, you’re looking at $450 billion in annual interest expense alone. When Bill Clinton left office, we had a surplus as far as the eye could see. Today we’re paying for the sins of the Bush administration’s fiscal policy.” — Scott Black

“Through quantitative easing, the BOJ at the margin has been the biggest liquidity generator for the credit system and financial markets of the world. In late March it announced the end of quantitative easing and said it was targeting a neutral bank-reserve position, with reserves of about six trillion yen. At that time reserves were ¥30 trillion. Now they’re ¥13 trillion. In dollar terms, the BOJ withdrew $200 billion.” — Felix Zulauf

“Valuation models are not timing devices.” — Abby Cohen

Copyright © 2006 Dow Jones & Company, Inc.