Just what we didn't need
Update: Team Macro Man has a good take on this as well, from a erm market/humorous side, and points to the true fact that financial analysts tend to become geopolitical analysts overnight when events suddenly take a turn for the worse in one of the world's hot spots.
Now of course, that would never apply to me, nope, not a chance! So, I do agree when TMM makes the following observation;
Do we know what will happen in Korea? No. To be frank we don't, and our expertise on the subject is so low that it is insulting to offer it up for consumption. All we know is that there are e few outcomes ranging from "all out war" to "will be forgotten about in a few days". And our limited experience would suggest that if we had to make a choice we would plump for the latter.
Now, I am tempted to talk about the backs of camels, straws and all that, but I reckon that I will stick with TMM for now.
Stefan Wagstyl has the goods and analysis on today's military skirmish between South Korea and North Korea which has caused at least a couple of fatalities on the latter's side. I am sure this is all war mongering from a North Korea with a new leader in spe destined to show that he has the cojones to stand up to the devil in the South (or whatever). I am no geopolitical analyst, but I reckon that it shows North Korean desperation more than strength.
Here is Stefan;
North and South Korea have exchanged artillery fire in the worst border incident in years, with two South Korean marines killed and about 20 other people injured. Markets in the region were plunged into turmoil, with the South Korean won leading other Asian currencies down and shares falling.
The firing, which began when North Korea shelled a populated South Korean island and lasted about an hour, started on Tuesday after Seoul’s financial markets closed. But one-month won forwards plunged 4 per cent in minutes and central bank and finance ministry are considering announcing market-stabilising measures before trading starts in Seoul on Wednesday.
Bloomberg reported that South Korean President Lee Myung Bak called on government officials to respond sternly after North Korea fired shells into the South’s territory, his office said. Lee also warned officials against aggravating the situation, according to a statement. The authorities confirmed that a S Korean marine died in the attack on Yeonpyeong island, another died later of his injuried, and around 16 other were hurt, as well as three civilians.
China urged calm. According to Reuters a spokesman for the Chinese Foreign Ministry, Hong Lei, said both sides of the divided Korean peninsula should “do more to contribute to peace”.
The White House condemned the North Korean artillery attack and demanded the action cease. “The United States strongly condemns this attack and callson North Korea to halt its belligerent action,” the White House
said in a statement.
The crisis has erupted just after news has emerged of a big new North Korean atomic plant and suggestions from Seoul that it might once again host US nuclear weapons, even though Washington is against such a n idea. Earlier this year, Seoul blamed Pyongyang for the sinking of a warship in March with the loss of 46 lives.