Having trotted around the city collecting insights from the wise I will share them with my readers.

Last night Qaffafew, the quant club, was addressed by Chris McHeffey of Reality Shares for which he has developed a system for isolating dividend growth (initially on the S&P 500) using puts and calls on this very liquid part of the market.

Isolated dividend growth backtested to 1999 shows 150% growth, McHeffey explained. This compares to a 119% in dividends, and a 50% rise in the stock prices of the index. You probably will not have to construct this portfolio by yourself as there will be an ETF soon, I believe.

Here's how to isolate dividend growth. Buy a 1-year call on the S&P 500 and sell a 1-year put. Then sell a 3-yr call and buy a 3-yr put. So you are long the index over 1 year and short over 3. The position is market neutral and you will have to do similar 1-year operations going forward.

This is about a pure USA play so I am sharing it with the world, as McHeffey spoke without requiring me to keep his secret in a public forum (an Irish bar near Grand Central.)

*Insight number two comes from David Woo, the chief forex and rates strategist who spoke at the Bank of America-Merrill Lynch. Dr Woo spoke at the brokerage's mid-year press conference.

That insight is for paid subscribers only along with a company report and some hot news from Australia, Canada, The Netherlands, Portugal, Argentina, Brazil, China, Belgium, Ireland, Israel, and Ethiopia.

*David Woo explained that “increased foreign official buying of US Treasuries offset fed tapering” which started in Q4 2013 and continued into Q1 of this year. Over the 6 months to Mar. 1, there was a $520 bn US government deficit and a $500 bn offsetting purchase of US T-bills by Belgium. Belgium!

Dr Woo explained the Belgium is the home of Euroclear, the outfit that acts for foreign central bank custodians increasing their holdings of T-bonds. While it is impossible to prove who was the ultimate buyer because the US Treasury does not have access to information on non-US custodians, he thinks the ultimate buyer was the People's Republic of China.

Here's what he thinks happened. Seeking to kill shadow banking, the PRC raised the cost of borrowing the national currency (the Renminbi or Yuan). But rather than pay more for RMB, shadow bankers bought US$ bonds instead. Then the Bank of China intervened to weaken the RMB by buying US$s to cut Chinese reserves. This filled the Fed gap. But it also undermined the program of cutting shadow banking as it cut the cost of RMB.

Dr Woo thinks this Chinese winter move is “not sustainable” and probably has already come to an end, although the numbers aren't out yet, mainly because US rates are inching higher.

Switching hats from Sinologist to meteorolgist, Dr Woo also said that the drop in Q1 GNP being weather related will also not repeat.

*GlaxoSmithKline yesterday was warned by the FDA to review its flu vaccine production after finding that quality controls were lax at its Canada sub.

GSK also moved to phase 3 trials of its eltrombopag (promacta) for thrombocytopenia, low platelet count, related to chemotherapy. The drug is already FDA-approved when used against hepatitis C-related low platelet count. It also starting phase 2-3 trials for Isis Pharma's antisense drug against rare disease transthyretin polyneuropathy having paid SISI a $1 mn milestone.

*Despite the hoopla over Vertex, Galapagos, our Belgian drug development play, is also in the running still to find a genetic cure for the most common version of cystic fibrosis, according to sources at GLPYY. Galapagos's potentiator-corrector combinations restore up to 60% of lung function when used in vitro (in the test tube) to treat double F508deleted mutated cells. This is the same target as Vertex addressed in its phase 3 trials of Lumacaftor in drug trials. So as a proof of concept for GLPYY's approach, the VRTX results are positive.

*Schlumberger Ltd is sharply higher today (+5.42% to a new high of $109.8 so far) not only because of its likely deal with Bayat Group sub Bayat Energy to supply oilfield equipment for BE to drill in Afghanistan, but also because of presentations SLB made yesterday and today in Europe. I could not get details from either Reuters or Bloomberg but the FT writes that SLB predicted EPS would grow at a compound annual rate of 17% to 20% long term, vs analyst expectations of merely 15% growth. SLB says it can get $9 to $10 more in earnings per share by revenue growth, margin expansion, and share buybacks, according to RBC analyst Kurt Hallead whose forecast was $8, and not till 2016. The oil service sector was waiting for an excuse to rise because of Iraq uncertainties.

*Separately, Chinese drillers have evacuated their staffers in Southern Iraq, presumably including those working for Anton Oil Services, ATONY, the Hong Kong firm in which SLB owns 30%.

*Allana Potash reported to investors that its Danakhil potash project in northeast Ethiopia won Addis Ababa approvals for extracting up to 30 mn cu m of groundwater for its solution extraction plans, well above the 1 mn cu m need under current plans. It has rehoused Afar tribe villagers in Mororo and Alia Lai and opened a medical clinic for the locals in cooperation with the regional govt.

Most importantly, it is working with a core lending group to get financing for the new potash mine, a 216-km railway and 120 km of roads, and construction of a new port, Tadjoura (in Djibouti, a former French colony) to go live in a year, until a new port is built. The core lenders have been assembled by Israel Chemicals and the International Finance Corp (the free-market arm of the World Bank) and the debt financing is expected to be in place by the end of this year. ALLRF here; AAA in Canada.

*UBS has exited about 1% of the shares it bought last week in Paddy Power plc according to a report for the Dublin Stock Exchange today. It now owns 6.3% of PDYPF.

*Delek Group (via 2 subs holding 30%) is in talks with CNOOC over a part sale of Cyprus's Aphrodite offshore gas site which is adjacent to its own Pelagic license north of Leviathan fields. Noble Energy owns 70%. China looks like replacing Woodside in being the designated builder of a floating liquefied natural gas platform to offtake Aphrodite and maybe some Leviathan gas for Pacific Rim markets. CNOOC is reported by Globes Israel to plan to buy 30% to 40% of the Cypriot field.

*Portugal Telecom international bonds have been uprated by S&P because of the weight of Oi after its merger with the Brazilian telco. The new rating is BBB- and it has been removed from credit watch. PT is up 2.4% on the news.

*Banco Santander is suffering for bailing out GE from Scandinavian consumer credit lending.

*Brokers Leerink Swann Partners cut Covidien to market perform from outperform. COV is suing a sub of Johnson & Johnson, Ethicon Endo-Surgery for patent violations over its new Harmonic ultrasonic vessel sealing device for surgeons. COV and JNJ have a history as the 2 firms still haven't resolved an earlier dispute over a different ultrasonic device for cutting and coagulation which violated its patents. The federal court ruling favored COV which was supposed to get proxy royalties of $176.5 mn but JNJ is appealing. JNJ risks having even more to pay under the old appeal by launching another suspect device.

*Chicago Bridge & Iron, under attack from short-sellers for fiddling its accounts by moving delayed Shaw deals into the backlog (which is where they are supposed to go, legally) has just added to its backlog a different way: with a deal. CBI won a 5-yr $800 mn contract from Exelon Generation Co to

add 5 more nuclear plants (bringing the total to 22 Exelon power stations.) CBI will provide long-term maintenance and do modifications and construction if required for the 5 plants in New York and Maryland. The nuclear business was acquired by CBI by buying SHAW, a nuclear specialist we bought to be taken over by the Dutch firm. Shaw was always a bit on the wild side with its accounts, furthermore whacked by the Fukushima disaster which made its power company clients pickier about safety. CBI of The Hague is up 2.5% today despite the short-seller.

*The expected US barrier to imports of solar cells can impact the prices received in China by makers of the basic photovoltaic cells but could actually help sales inside and outside China of more complex solar equipment for utility-scale solar electricity production. Cheaper cells aid China aiming to upgrade its production and also will help Canadian Solar which will be producing high-conversion premium solar modules for power plants. This will come from a recent jv with GCL-Poly Solar System Integration of Funing. CSIQ will gain from higher US duty on simpler cells.

*Teva has won a court decision to not pursue it over allegations of “pay to delay” bought by drug wholesalers. This was over Provigil, the sleep disorder drug, brought against Cephalon, now a TEVA sub. The Philly judge said that a conspiracy to delay generics “cannot be established.”

*Orocobre, Australian miner of lithium, borax, and potash in Argentina, is up 5.4% to $2.18 today. No idea why. It may be the theory that Buenos Aires will deal with the hold-out owners of its govt bonds.

*Reckitt Benckier is down 3.4% today maybe because of fears it will not be a takeover target. RBGLY.

*I am trying to persuade Dr KSS, the www.stockgumshoe expert on Benitec Biopharma (whose ADR, BTEBY has not yet begun to trade) to seek a board position at the Australian firm because of his cogent critique of its management's communication and patent protection failures. Dr KSS writes for stockgumshoe.com(at great length but with great elegance and knowledge as well.) My readers are advised to pay up for the service and then follow through on my attempt to lure the doctor onto the board. Don't be a free-booter on stock gumshoe.