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The purpose of this paper is to examine the relationship between the US and China stock markets between 2000 and 2007. This study attempts to categorize the event on February 27, 2007, i.e. 9 per cent plunge in Shanghai stock market followed by the $1.5 trillion global market shake out, as irrational, i.e. herd mentality.

To test for this relationship, the Morgan Stanley Capital International daily price index data was collected from April 15, 2002 to April 12, 2007. Daily Dow Jones Industrial Average (DJIA), Nikkei 225 (Nikkei), Hang Seng Index, and the Shanghai Stock Exchange Composite Index (SSECI) were collected from finance.yahoo.com from January 1, 2000 until April 3, 2007. The running beta and correlation coefficients, defined as the cumulative coefficients, are used to determine the co‐movement of the SSECI and DJIA.

The strength of the relationship between the US and China stock markets has significantly increased since 2005, maybe attributed to China's policy change in 2005 to move toward a more free market economy. Because of the unique characteristics of China's stock market, it is hard to conclude that the $1.5 trillion global market shake out was ignited by the 9 per cent plunge in the Shanghai stock market on February 27, 2007.

China's economic reform is unique since the country followed no blue print for the economic institutions to model after and policies were adopted through experimentation. Fueled by its fast growing economy (10.4 per cent in 2005 and 10.7 per cent in 2006), using past patterns or trends to predict the future of China's financial market requires further research as its stock market emerges. Research in this area requires more observations as China's stock market grows and becomes more transparent.

Results here suggest that the strength of the relationship between the US and China stock markets has significantly increased since 2005 and that China's 2005 policy moves toward a more free market economy are most likely responsible.

A better understanding of the influence of China's emerging stock market on the global stock market offers significant value to portfolio managers worldwide.

We have reprinted the powerful letter addressed to the Daily Mail by MR. H. W. WILSON, the author of “Ironclads in Action,” advocating the immediate adoption of a policy of reprisals for the Zeppelin murder raids. In our view it is the duty of every journal, whatever may be its raison d'être, to assist in keeping the attention of the public fixed upon this matter, to aid in preventing the general feeling of disgust and indignation from cooling down, and to support those who have the brains to understand the nature of the Hun in their efforts to compel the Government to adopt the most effective means at present available to put an end to the murderous excursions of the German vermin into this country. As MR. WILSON points out, the deliberate Hun policy of slaying women, children and non‐combatants is either permitted by the laws of war recognised by civilised nations or it is not permitted by those laws. If it is permitted, “then clearly the Power which refrains from making similar attacks on the enemy's towns, villages, and residential districts, loses greatly from the military standpoint.” If it is not permitted then the only course— “the force behind the laws of War”—is a policy of drastic reprisals. Moreover, it is the only course that the Hun can understand. The methods of “frightfulness” are definitely laid down in the German military system as methods to be ruthlessly followed whenever this can be done with impunity and the fear of reprisals is also definitely laid down as the only consideration which is to be allowed to operate as a check upn “frightfulness.” “The Power which fails to take reprisals when a great offence is committed is as the negligent judge or the faithless jury that acquits a murderer. It sins against humanity … it encourages the criminal in his crime.”

The Milk (Amendment) Order, 1917, which came into force on December 31st, provides that milk shall be sold retail only by Imperial measure; that no colouring matter shall be added to milk or cream intended for sale; that no milk to which any water has been added shall knowingly be sold or offered for sale; that no person may use for the purpose of his trade any milk can or milk bottle which bears the name, trade name, trade mark, or trade device of some person other than himself or his employer, except with the consent of such person. The Order contains a new clause, in substitution for Clauses 4 and 6 of the Milk Order, 1917 (which are revoked), providing that where milk is sold wholesale by or on behalf of any person other than the producer the maximum prices chargeable shall, unless otherwise determined, pursuant to the Order, be as follows:—

Presents the scientific methodology from the enlarged cybernetical perspective that recognizes the anisotropy of time, the probabilistic character of natural laws, and the entry that the incomplete determinism in Nature opens to the occurrence of innovation, growth, organization, teleology communication, control, contest and freedom. The new tier to the methodological edifice that cybernetics provides stands on the earlier tiers, which go back to the Ionians (c. 500 BC). However, the new insights reveal flaws in the earlier tiers, and their removal strengthens the entire edifice. The new concepts of teleological activity and contest allow the clear demarcation of the military sciences as those whose subject matter is teleological activity involving contest. The paramount question “what ought to be done”, outside the empirical realm, is embraced by the scientific methodology. It also embraces the cognitive sciences that ask how the human mind is able to discover, and how the sequence of discoveries might converge to a true description of reality.

At a recent meeting of the Glasgow Grocers' and Provision Merchants' Association, it was alleged that there are provision merchants in Glasgow who are doing a large business in selling margarine as butter at 1s. 2d. per pound. In commenting upon this statement The Grocer very properly urges that the officials of the Association referred to should take prompt steps to place the facts in their possession before the Glasgow authorities and their officers, and observes that in certain cities and towns—Birmingham, for example—the grocers' associations have co‐operated with the authorities in their efforts to suppress illegal trading, particularly in regard to the sale of margarine as butter. It appears that one of the members of the Glasgow Association expressed the opinion that the Margarine Act has been a failure and that shopkeepers who sell margarine as butter should be charged with obtaining money under false pretences.

This issue is a selected bibliography covering the subject of leadership.

In a recent issue of the Municipal Journal there appeared a short but apparently inspired article on the subject of London Government, in which is foreshadowed another drastic and apparently imminent alteration of the system of local administration at present in operation in the Metropolis.

It was stated by a philosopher of very early days that the Gods sell their choicest goods in the cheapest market; and, it may be added, if it is necessary to impress such an obvious truism, that the greatest poverty may often be found in the midst of riches. The herring well illustrates the truths of the above paragraph.

Sir Watson Cheyne, M.P., recently introduced a deputation to Mr. Balfour to urge upon the Government a proposal for the granting of awards or pensions to persons making medical or other scientific discoveries of general benefit to humanity. The method suggested is the annual voting of £20,000, to be distributed in pensions, some of £1,000 a year, others of £500. In commenting upon the matter the Daily Telegraph observes that the public is more concerned with the adoption of the principle than of any cut‐and‐dried scheme, but it may be pointed out how essentially moderate this proposal is, considering the priceless value of the services which it is desired to reward, and how our credit as a nation stands in this respect. It has been pointed out by foreign writers at least as often as by our own that Great Britain stands above all other countries in respect of the number of original and world‐important ideas and discoveries contributed to science, and that reputation is well maintained to this hour. But what material form does the nation's gratitude, and its pride in the possession of such citizens, take? The answer is that they are not rewarded to the extent of one penny of public money, and we believe that ours is the one leading country in the world of which this can be said. Let us note the case of Sir Ronald Ross, for example, whose work in connection with the cause and prevention of malaria is a landmark in the progress of medical science, and has already been the means of saving tens of thousands of lives. If we considered only the direct benefit done to his own countrymen, and left out of account the honour that he has reflected upon the British name, Sir Ronald's work might still be regarded as equally worthy of recognition with that of a distinguished soldier let us say. But it has brought him nothing, so far as his own country is concerned, in recompense for the years of devoted and often dangerous labour which his discovery represents. Sir Ronald Ross has himself remarked that a doctor who gave to the world the long‐sought cure for cancer would get nothing for his pains from his own people; yet of those people alone, we have seen it stated on high medical authority, 35,000 die of cancer every year upon the average. For any material reward, such a British discoverer would have to look outside his own country. He might receive a small prize from the French Academy; he might receive—as Sir Ronald Ross, we are proud to remember, has received—a large prize from the Nobel trustees, in Sweden. That is not a very gratifying reflection; and even if it were consistent with our self‐respect that such services should be rewarded at other than British expense, the fact would remain that not one in fifty of our pioneers of science could receive such recognition. The matter is thrown into an especially strong light just now, when large sums of public money are being awarded—and most justly and properly awarded—to officers and others who have assisted Britain's military effort by inventions found serviceable by the Army and Navy. A great innovation in healing science will preserve to the world incalculably more lives than the most deadly device of war could destroy; but only the latter service is thought worthy of recompense. Yet consider the circumstances in which by far the greater part of British research, leading to ultimate discovery, is carried on. Much of the most valuable work in medicine, for example, has been done by men who, at the expense of health and strength, were carrying on medical practice at the same time, and not always making ends meet without difficulty. Even the researcher who draws a salary from public or private funds has no more than a pittance in most cases. Some of the greatest names in the history of British science are associated with melancholy stories of poverty and struggle, continued over many years. For such triumphs are not achieved without the devotion of a great part of a man's life. Koch's discovery of the tubercule bacillus was the fruit of eleven years of patient seeking. The wonderful drug salvarsan was only given to the world after years of monotonous labour. Any scale of reward which Parliament could reasonably be expected to sanction would have been earned a dozen times over by sheer hard work and perseverance alone in every case which was held to deserve such recognition. Mr. Balfour, we can be quite sure, would be personally well‐disposed towards the appeal that has been made. As Lord President of the Council, he has the national organisation of research which Great Britain at last possesses—such as it is—under his Ministerial care. The Medical Research Committee expends an annual sum of £60,000 of public money, which represents, we should say, infinitely the cheapest national investment on record. The sum which it is now proposed to lay out stands upon a similar footing. A great stimulus would unquestionably be given to research of every kind, if a reasonable prospect of such recognition were opened to the scientific worker; and a man possessing the definite talent for such service would, once adequately pensioned, be able to carry on without distraction the task of extending still further the boundaries of knowledge. That science should continue to be starved because men can be found to undertake unrewarded labour for their fellow‐creatures is not only a reproach to us as a nation, but bad from the point of view of tangible results; and we trust that the case submitted by Sir Watson Cheyne and his colleagues will be admitted and acted upon without delay.