by ilene - December 23rd, 2010 11:50 am
HONG KONG — North Korea, breaking from the restraint it showed this week during military exercises by the South, said Thursday that it was prepared to use its nuclear weapons if it was attacked.
The North is “fully prepared to launch a sacred war,” Minister of the People’s Armed Forces Kim Young-chun said in comments carried by the North’s official Korean Central News Agency and quoted by Western news media. North Korea’s comments are typically bellicose, but they had been low-key this week as South Korea staged military exercises across its territory.
On Monday, the South staged live-fire artillery drills on Yeonpyeong Island, which was shelled by the North’s artillery on Nov. 23. Four South Koreans were killed. North Korea claims the waters around Yeonpyeong and disputes the maritime border known as the Northern Limit Line.
Continue reading here: North Korea Resumes War Threats as South Stages Drills – NYTimes.com.
by ilene - September 28th, 2010 2:19 am
By David DeGraw (h/t ZH)
The following is Part I to David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the second installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction to the book here. To be notified via email of new postings from this series, subscribe here.
Editor’s Note: The following is Part I to David DeGraw’s new book, “The Road Through 2012: Revolution or World War III.” This is the second installment to a new seven-part series that we will be posting throughout the next few weeks. You can read the introduction to the book here. To be notified via email of new postings from this series, subscribe here.
I: Economic Imperial Operations
When we analyze our current crisis, focusing on the past few years of economic activity blinds us to the history and context that are vital to understanding the root cause. What we have been experiencing is not the result of an unforeseen economic crash that appeared out of the blue with the collapse of the housing market. It was certainly not brought on by people who bought homes they couldn’t afford. To frame this crisis around a debate on economic theory misses the point entirely. To even blame it on greedy bankers,…
by ilene - May 25th, 2010 1:37 pm
Courtesy of Mish
The 30-year long bond is sitting just 3 basis points away from hitting a 3-handle and the yield on 5-year treasuries is 1.94 after hitting 2.60 in April. That is quite a reversal.
Yield on the 10-year note is at 3.13% a price last seen a year ago.
Meanwhile, Libor Shows Strain, Sales Dwindle, Spreads Soar
Corporate bond sales are poised for their worst month in a decade, while relative yields are rising the most since Lehman Brothers Holdings Inc.’s collapse, as the response by lawmakers to Europe’s sovereign debt crisis fails to inspire investor confidence.
Companies have issued $47 billion of debt in May, down from $183 billion in April and the least since December 1999, data compiled by Bloomberg show. The extra yield investors demand to hold company debt rather than benchmark government securities is headed for the biggest monthly increase since October 2008, Bank of America Merrill Lynch’s Global Broad Market index shows.
Junk bonds issued in the U.S. have been especially hard hit, with spreads expanding 141 basis points this month to 702, contributing to a loss of 3.78 percent. Leveraged loans, or those rated speculative grade, have also tumbled. The S&P/LSTA U.S. Leveraged Loan 100 Index ended last week at 89.23 cents on the dollar, from 92.90 cents on April 26.
Question of Solvency
“This is a quintessential liquidity crisis,” said William Cunningham, head of credit strategies and fixed-income research at Boston-based State Street Corp.’s investment unit, which oversees almost $2 trillion.
I disagree. This is a return, and rightfully so, to questions of solvency. Many corporations were given a new lease on life in May of 2009 by once again securing funding at cheap levels.
Now, huge cracks are appearing in the corporate bond market. At least seven junk bond deals have been pulled. This environment is not good for equities.
JNK – Lehman High Yield Bond ETF
click on chart for sharper image
Is this another scare like we saw in January and February or is this the real deal? I think the latter, but I thought so in February as well.
Notice how the top in junk bonds coincided with the top in equities. I cautioned many
by ilene - May 25th, 2010 1:00 pm
Courtesy of Mish
Smack in the midst of a "global recovery" tensions are heating up in Asia. Please consider Kim Jong II Orders Military to Get Ready for Combat
North Korean leader Kim Jong II ordered the country’s military to get ready for combat in a message televised nationwide last week following South Korea’s announcement that North Korea torpedoed the South’s warship.
South Korea’s President Lee Myung Bak said yesterday the country will push for United Nations censure against North Korea for the March 26 sinking of a naval ship, which killed 46 sailors. A multinational team concluded on May 20 that North Korea fired a torpedo to split apart the 1,200-ton Cheonan.
Tensions are rising in the Korean peninsula following the report, with both sides threatening counter-measures should they come under attack. South Korea plans to define North Korea as its “main enemy” when it maps out military strategy, Yonhap reported today, citing a government official it didn’t identify.
South Korea’s Won Sinks to 8-Month Low
Inquiring minds may be interested to note South Korea’s Won Sinks to 8-Month Low on Tensions With North.
South Korea’s won slumped to an eight-month low on growing hostilities with the North over the sinking of one of the South’s warships with the loss of 46 lives.
The U.S. yesterday announced plans to conduct joint anti- submarine exercises with South Korea as “a result of the findings of this recent incident.” Japan will consider imposing financial sanctions on North Korea, Finance Minister Naoto Kan said at a news conference in Tokyo today.
“We won’t see the bottom of this fall until we hear some good news on North Korea,” said Cho Hyun Seok, a currency dealer at Kookmin Bank in Seoul. “The won’s exchange rate can go as high as 1,260 won per dollar.”
The military exercises are among steps the U.S. and South Korea are pursuing, including possible further United Nations sanctions, in response to the March sinking of the 1,200-ton Cheonan. The U.S. and South Korea say evidence shows the explosion was caused by a North Korean torpedo.
Asian Stocks Fall to 10-Month Low, Won Dives, Commodities Drop
Please consider Asian Stocks Fall to 10-Month Low, Won Dives, Commodities Drop
The MSCI Asia Pacific Index
by ilene - May 14th, 2010 11:25 am
Courtesy of Marla Singer, Zero Hedge
On the 5th of March in 1946, in Fulton Missouri, at Westminster College, Winston Churchill delivered an address (since christened the "Sinews of Peace") lamenting the burgeoning power and influence being slowly but surely gathered up by the Soviet Union. Perhaps the address will be familiar to some of you owing to its most famous passage:
From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe. Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and Sofia, all these famous cities and the populations around them lie in what I must call the Soviet sphere, and all are subject in one form or another, not only to Soviet influence but to a very high and, in many cases, increasing measure of control from Moscow. Athens alone — Greece with its immortal glories — is free to decide its future at an election under British, American and French observation.
Ironic, as I will address, that he should mention Greece.
Much less well known perhaps is this later passage:
Our difficulties and dangers will not be removed by closing our eyes to them. They will not be removed by mere waiting to see what happens; nor will they be removed by a policy of appeasement. What is needed is a settlement, and the longer this is delayed, the more difficult it will be and the greater our dangers will become.
The "Iron Curtain" came, of course, to signify the cavernous ideological, and eventually concretely physical, divide between East and West. It took some 43 years before it was lifted once more, first and haltingly, in the form of the removal of Hungary’s border fence in mid-1989 and then, of course, finally via the fall of the Berlin Wall in November that same year.
Not to be compared with a production of Italian Opera, the Iron Curtain did not describe a sudden, smooth, abrupt descent over the stages of Eastern Europe. Quite the contrary, its drop was in stutters of discrete, fractional lowerings, such that it was a full fifteen years after Churchill used the term before its ultimate expression, the Berlin Wall, was finally…
by Zero Hedge - May 27th, 2009 5:00 am
Courtesy of Zero Hedge
Developing story: Per BNO, Bloomberg, and WSJ, North Korea has said it will "use its military" to respond to South Korean decision.
Update from BNO: NORTH KOREA ABANDONS KOREAN WAR ARMISTICE.
Update 2: NK Statement: "Any hostile act against our vessels, including search and seizure, [..] we will immediate respond with a powerful military strike"
Update 3: NK Statement: "THE PENINSULA WILL SOON BE RETURNED TO "THE STATE OF WAR."
Update 4: Yonhap Statement here
by phil - May 26th, 2009 8:22 am
Welcome back everyone!
I hope you all had a nice holiday weekend. PSW provided the Kindle crowd with some great beach reading with and update of our now $104,340 Virtual Portfolio, a 3-part series called "Hedging Your Way To Healthy Dividends" and our very timely "How To Vacation-Proof Your Virtual Portfolio" with an on-line lesson from Option Sage's Market Tamers. All this sudden interest in North Korea's nuclear test didn't catch us unaware as Tyler reported on this Sunday night!. Hey, the markets never sleep and neither do we!
36 hours later, the North Korea nuclear test is still the top story and global markets are down and the dollar is bouncing as a flight to safety BUT IT'S NOT NEWS… Come on people – this has been going on for more than 15 years with these guys, are we really going to freak out every single time we hear that North Korea has nuclear capabilities? REALLY??? Hey, I can write tomorrow's fear headlines today: Iran doesn't like us, the Middle East may erupt in violence, the Taliban are still a threat. Oops, looks like I got scooped on that last one by Defense Secretary Robert Gates, who decided that this weekend would be a good time to inform us that "the momentum in Afghanistan is with the Taliban, who are inflicting heavy U.S. casualties and hold de facto control of swaths of the country.
At the suggestion of some of his staff, Mr. Gates has begun referring to himself as the "secretary of war," saying that shows he and his department have no higher priority than the conflicts in Iraq and Afghanistan. "If people begin to absorb the fact that we've got several dozen very dangerous terrorists in our jails right now…maybe a little greater perspective would be brought to the issue," he said. Do not make the mistake of assuming anything Gates says is not carefully planned and coordinated – he was previously the director of the CIA, just like Poppa Bush (who he served under)!
We have been playing for the dollar bounce over the weekend so this is just great for our oil shorts as well as our overall market posture, as we were looking for another catalyst to push us to a lower level test and last week's Cheney/Obama virtual debate was…
by Zero Hedge - May 26th, 2009 4:07 am
- Must Read: Henry Paulson – "I didn’t understand the retail [mortgage] market, I just wasn’t close to it" (Newsweek)
- Dallas Fed’s Fisher: "Don’t monetize the debt" [too late Dick] (WSJ)
- Cushman & Wakefield exec says CRE is doomed due to lack of securitization (NYPost)
- Euro falls on renewed concern over European banking system (Bloomberg)
- Deripaska nears deal to retain empire (Reuters)
- China warns Fed over "printing money" (Telegraph)
- Yuan drops by most in 2 months on signs China gains halted (Bloomberg)
- Libor’s plunge could trap banks (Telegraph)
- South Korea won, stocks drop on concern over more North Korean nuclear test (Bloomberg)
- ECB to buy bonds in June, to seek quick exit [mm hmm] (Bloomberg)
- 50% of employers suspend college recruitment (Guardian)
- Geithner dismisses Republican socialism charge as ridiculous