The President of the United States just tweeted this as soon as he woke up this morning, assuming he sleeps at all:
“Military solutions are now fully in place, locked and loaded, should North Korea act unwisely. Hopefully Kim Jong Un will find another path!”
What a breath of fresh air.
Stocks decided to pay attention to the back and forth nuclear rhetoric between North Korea and Donald Trump this week.
Reuters has the price tag:
The damage inflicted on world stocks this week by the escalating war of words over North Korea topped $1 trillion on Friday, as investors again took cover in the yen, the Swiss franc, gold and government bonds.
The sudden burst of concern came on the heels of a Washington Post story that said US intelligence believes NK now has the capability to put a nuclear warhead on an ICBM and hit something far away – say Japan or even the west coast of the United States. The Vix, which had been slumbering for months, went berserk to the upside.
This coincided nicely with the ratcheting up of the Mueller investigation and the winding down of earnings season. After ten or eleven consecutive days of quietly grinding higher with virtually no volatility, the markets needed a reason and the headlines gave them one.
Yesterday was only the second day of 2017 in which the S&P 500 dropped 1%. The average daily change for the US stock market this year was so small you had to go back more than 50 years to 1965 in order to find a more tranquil year. It’s worth noting that we had also hit the top ten starts to the year with the smallest amount of positive 1% days.
So maybe that environment is now behind us and stocks are going to start acting like stocks today.
It’s worth remembering that North Korea has been testing nuclear weapons almost biannually since 2006, eleven years ago. It’s also worth realizing that the “locked and loaded” commentary is not serious, it’s senility or mental illness or some combination. North Korea knows this and isn’t going to be goaded into doing something that results in the regime’s destruction. Kim Jong-Un is already getting what he wants by getting to play this game on the world’s stage. He doesn’t want to go further.
Never forget that running these asshole countries is the family business for these people. Rule number one is don’t lose the business. There’s no religious nuttery involved with this particular “conflict.” What happened to Gaddafi (I’d check the spelling but who cares) essentially amounts to a Chapter 7 (liquidation) viewed through this lens. Nobody wants to be Gaddafi. Or JC Penney, apparently.
And now, in some personal news, I am taking my first day off this summer. I’m setting my autoresponders, getting on a boat and sailing away. It’s already the middle of August and I realized I haven’t chilled out at all. Been too busy with the business to even notice. The kids are coming home from camp on Sunday and the nights have already begun to arrive earlier, the mornings later.
It’s amazing how time flies when you love your work and there are so many exciting projects to keep you occupied.
Today’s project is to take a break. See you later.