TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

Bernie Sanders, the non-Clinton Democratic primary candidate, told an audience that he wants to raise income taxes for the very rich to "the levels they were under that Socialist, Pres. Eisenhower." Taxes are not the only part of government regulation which were once part of Republican platforms before any trace of liberalism was removed in the intervening years.

Bribery was the way US and foreign multinational corporations won contracts before 1975 when Pres Carter signed the foreign corrupt practices law. Now it has been adopted by other developed countries in the Organisation of Economic Cooperation and Development--if not by Putin's Russia.

One major scandal which generated the new law was the Lockheed bribery connection. Officials of aerospace companies like Lockheed and its competitors paid foreign government defense officials to favor one company's planes. Lockheed was investigated by the Senate Foreign Relations committee Subcommittee on Multinational Corporations for which I was minority (Republican) senior staff member, on behalf of Clifford Case R-NJ. The Democrats were headed by Frank Church. The two senators drafted the law which Pres. Carter late signed.

The Lockheed investigation found egregious bribery of foreign officials, from the consort of Queen Juliana of the Netherlands to a respected French air force officer who threw himself under a bus. The tale included lurid Mafiosi and friends of Uncle Sam in European countries. In Paris, from a disgusted civil servant, I discovered that the French taxman allowed a bribery level of 10% on any contracts local companies won, deductible from profits.

It was not the only case of bribery we investigated. There were also shady deals byITT fostered by the CIA in Chile when Allende became President.

Back then, even with Richard Nixon as president, ethical standards were high among the liberal and Rockefeller Republicans: my boss Case, my state's Sen. Jack Javits, Chuck Percy, even Prescott Bush, who had been a Senator from Connecticut.

Now I have had my moment of fame as the daughter of an amateur soccer goalie, my father. US law was used to crack down on FIFA soccer bribe recipients. As American laws tend to be extra-territorial in impact (since the first Marines sailed against the pirates on the shores of Tripoli, now in Libya) the soccer world got a needed cleanup from a country where the beautiful game is hardly played (except by foreign-born soccer-players like my dad.)

And my little bit of liberal Republican politicking helped make this possible. Putin has defended the FIFA chiefs claimed American “overreach” had led to their conviction.

Cuba has been removed from the US list of terrorist countries, another step toward normalizing relations. We have a stock for that.

The US is facing an increase in its misery index, first a higher rate of inflation for April, at 0.3% the highest in 2 years. Now we got a confirmation of a drop in gross national product in Q1. The US economy shrank 0.7% in the 3-mo period, a new, higher estimate, rather than meeting forecasts of a 2% growth rate (both annualized). The trade deficit also rose.

A key element in negative growth (apart from snow and a West Coast longshoreman's strike) was the high dollar hurts US exports against cheaper competitors while also cutting the value of sales abroad in US corporate accounts.

I was again quoted by earlier's issue of Investor's Digest of Canada, which however described me as Mr. Lewis. If you are up north check on page 219 of the prize-winning publication and write to its editor to complain that I have not had a sex-change operation.

Banks

*Bank of Nova Scotia is an outrider among Canadian banks with a key business providing financial and banking services to Latin America accounting for nearly half of revenues and profits. Most Canadian banks operate at home and in the USA.

However in the last quarter its Canadian bank was more important. It beat with an adjusted Q2 profit of C$1.7970 bn or C$1.43/sh, up two loony cents from last year and and 4 cents over the Dow-Jones consensus forecast. The level was adjusted for the divestiture of CI Financial. The figure was up 11% from Q1 which already excluded CIFAF.

This was mostly thanks to Canadian banking profits up 9% thanks to higher interest spreads and fees y/y while global banking profits only grew 3%.

Lower Canada tax bills also helped. However, overall return on equity fell y/y to 15.1% from 16.3%. The main generator of gains was a 12 basis point increase in the net interest margin, the difference between what it pays depositors and what it charges borrowers, to

It announced a buyback of 24 mn shares (~2% of shares out) starting in Juen. But it kept its dividend flat at 68 loony cents. Canadian banks report for Q2 for the Feb-April months because of winter cold.

*Shinhan Bank was rated A- stable by Fitch after Moody's upgraded the South Korean bank to Aa3 from A1. The stock is up 2.7% on the news. Also helping the share is Jeremy Schwartz, director of research at WisdomTree, who expects new dovish policies by the Korean CB in the wake of interest rate cuts in Japan and Europe.

*Royal Bank of Scotland, whose preferred shares we own, was upgraded by Moody's to A3 from Baa1 and the gossip is that more RBS assets will be floated off in the sale of its private banking arm.

*Validus Holdings was tipped by Adam Brown who follows our writer Amb. Harry Geisel into VR of Bermuda. Mr Brown cited its 3% dividend and ability to raise it plus a $750 mn program to buy back another 20% or so of shars out, following an earlier $1.25 bn program. He called it “a very well-run company” but seems to be just learned about insurers. Our Harry dotes on the sector..

Phones

*Nokia and its competitors Siemens and Thales together were awarded a 10-yr euros 340 mn contract to modernize and maintain the Spanish railway network for high-speed trains. I would like to see something similar from Amtrak!

NOK is reportedly looking into another major deal, “something big” after bids to buy out Alcatel-Lucent and Eden Rock. This from Chairman Risto Siilasmaa as quoted in a Finnish business publication, Talousalama, picked up by Dow-Jones.

*OIBR is down but Portugal Telecom is up. PTGCY. I am not commenting because I have decided normal rules do not apply to Lusitanian crooked bankers, Brazilian Viscounts, and Luxembourg phone magnates. I got this one so wrong I am ashamed of myself. When I go to the Algarve in July to speak about investing and retiring there in July I will apologize profusely to my local reader there, Luis A.F.G., who warned me last summer to get out of what was then PT.

*Jefferies upped its target price for Vodafone Group to 230 pence/sh from 226, but kept VOD a hold.

Drugs

*Alkermes presents phase I data on its ALKS 8700 mono-methyl fumarate multiple sclerosis drug at the Indianapolis MS conference which ends tomorrow and the stock is up, presumbaly because the participants liked what they were told.

*The new drug eventually will be a threat to Teva. TEVA launched a generic of Lomedia oral birth control tablets which had US sales of $32 mn last year.

*Bavarian Nordic CEO Paul Chaplin told Reuters it is not for sale in the current biotech buying frenzy. But he admitted “you can't stop interest if there is interest.” BAVA-Copenhagen or BVNKF is one of our holdings.

*GlaxoSmithKline was placed on negative watch by Moody's for its bonds, currently rated A2. However Standard & Poor's affirmed the GSK rating of A+ long-term A- short-term, arguing that enough of the proceeds from it sale of oncology assets to Novartisremains in the UK firm's coffers. GSK returned £1 bn to shareholders with a special divvie but kept £3 bn for R&D and new products to replace its failing respiratory franchise.

*Compugen will present at the Jefferies Global Healthcare June 4 here. It will also have a shareholder day here on June 9. This is enough to boost the share price.

*WallStreet Scope published (via Google) a note on Galapagos stating that before the recent IPO and capital increase, GLPG “shares had no history.” Nonsense. We have owned pink sheet version of the Belgian shares since 2008 when our biotech maven joined the company and left Italy for Belgium. He also could not write about Galapagos but we opted to follow his lead, as he had been a good stock picker. I have no idea who is behind this ill-informed Texan publication or why Google alerts uses its stuff rather than mine. GLPG went up 8.2% yesterday not on this twaddle but because it reported that 3 US fund groups had bought its shares: Fidelity, Capital Group, and Federated Equity Management of PA.

Commodities

*The mystery of why Allana Potash has been rising steadily has been resolved, no thanks to my broker who never told me anything. Israel Chemical, sold, proposes to buy most traded shares of the Canadian developer of a huge Ethiopian potash mine and the related infrastructure to export its output for what in Hebrew is called bupkas, 50 loony cents/sh, about 40 cents US. ISCHF already owns a minority stake in AAA (Toronto) or ALLRF (pink sheets), for which we paid 32 cents (US). The takeover bid requires that 2/3 of the independent shareholders vote to accept the offer.

ALLRF has had difficulty raising money to build out the site, despite support from the World Bank and the Addis government. Assuming the June 15 vote is yes, the takeover can take place the following week. It will add to the ICL shares traded on the NYSE because minority owner Liberty Metals & Mining, will get shares rather than cash. I will look into whether we should buy ICL ourselves; it is diversifying internationally not just in Ethiopia because its Dead Sea Works are under an environmental ban in Israel.Potash of Saskatchewan, which operates the legal cartel, specifically ruled out buying ICL but is buying the Jordanian producers across the water, who do not have the same constraints. We sold ICL to switch to ALLRF.

*Schlumberger won upgrade to overweight by JP Morgan, called “a standout in battered oil services.”

SLB announced that its jv with Cameron, OneSubSea, landed a $330 mn contract for offshore North African development of 13 sub-sea wells. The country where the drilling will be done starting in 15 months was unnamed, but follows an earlier OneSubSea deal in wherever. SLB owns 40% of the jv.

*Cosan is down on news that the US Environmental Protection Agency, while raising ethanol quotas, failed to raise them as high as mandated by Congress, at 10% rather than 15% for the coming fiscal year, using a waiver Congess wrote into the law. CZZ has price edge against US corn-based ethanol because it makes the fuel from begasse, Brazilian sugarcane waste. Now the EPA will set different ethanol blend levels at E15 and E85 for different vehicle target fuels next week. This is a political hot potato in Iowa, a corn state which has early primaries and gets candidates to accept protectionist limits on foreign ethanol which also makes high-ethanol blends cheaper than low for autos which can burn it.

*Oops. I overstated the gain to Delek Group from the resignation of Israeli Antitrust Authority head David Gilo. DGRLY will have to sell its stake in Tamar, the currently operating offshore field, and Noble Energy will have to cut its stake to a quarter from 36% now, to prevent a monopoly. Israel has approved sale of Tamar gas to the Jordanian Dead Sea potash and bromine companies. Also, the eventual output of the future Leviathan field with which the two firms are now proceeding may only be sold outside the Jewish State. There are pending deals to sell future gas to Jordan Electric Power Co and BG's gas liquefaction plans in the Nile Delta. This depends on reversing the flow of the trans-Sinai pipeline which is in focus even for Tamar gas, because a deal with Union Fenosa to supply it with gas for LNG conversion also depends on a Biblical reversal, crossing the Sinai desert to ship gas to Egypt.

Funds

*Zoetis (spun off by Pfizer), a maker of animal and pet medicines, is one of the top holdings in our Pershing Square Fund. Zoetis is rumored to be a target for a takeover bid by Bayer AG of Germany. PSHQF NAV on Tuesday hit $28.10/sh

*According to Xinhua, a wire service, China is allowing the launch of $16 bn (US) Hong Kong fund allowing its citizens to own gold. It is not linked to the World Gold Council ETFs like our SPDR GLD.

*Aberdeen Asia-Pacific Income Fund only earned 14% of its distribution for May, and 86% was return of capital. FAX follows the house taste for steady dividends even if they are not for real. It will pay .035 cents/sh.

*Meanwhile Aberdeen Global Income Fund is paying 7 cents/sh and only 46% of that sum is return of capital, which is not taxes. 54% was investment income at FCO.

*Oops. It was not Dick Davis Dividend Digest but Forbes-Lehman Income Securities Investor which tipped Macquarie First Trust Global Infrastructure-Utilities Fund (MFD) yesterday. The FLISI note was reprinted in DDDD. Its top holdings are: National Grid plc(5.5%, UK); GDF-Suez (5%, France); Centrica plc (3.95%, UK); Hutchison Port Hldgs (3.86%, Hong Kong) and Veresen (3.63%, Canada.) We own FCGYF which is developing an LNG facility in Oregon.