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Goldman's Take On Kim Jong-il's Demise

Tyler Durden's picture




 

Following the sudden and surprising death of North Korea's "Dear Leader", many are wondering what this means for risk, especially in the Pacific rim. In other words, was last night's selloff warranted? For what it's worth, here is Goldman's Goohoon Kwon with a take of how the institutional audience is trying to comfort itself that all shall be well, and that power vacuums are all inherently rational and perfectly predictable. Just ask Egypt. And Robespierre.

From Goldman Sachs.

North Korean TV reported earlier today (December 19) that Kim, Jong-il, the leader of North Korea, died in the morning of December 17. Details were not released but South Korean newspapers report that the death was sudden and was not known to the South Korean government.

We do not see much immediate impact on the economy of South Korea while political uncertainties are rising in the North. First, the poor health of the leader has been well known and both sides of the Korean peninsula have been in preparation for this contingency for several years. The North Korea regime has already selected Kim, Jung-un, the leaders’ third son, as the successor. The South Korean government has a contingency plan, entailing counter measures ranging from intensive monitoring to market interventions and possible support from allies and international financial institutions.

Second, economic linkages between South and North Korea are very limited with little contagion from possible regime change in the North Korea. Bilateral trade has been relatively stagnant since the sinking of the Chonan naval ship and the shelling of Yeonpyung Island, with total bilateral trade at around US$1 billion (see Rising North Korean risks do not alter our positive KRW view, Korea Views, April 23, 2010). The Kaesung Industrial Complex, the only remaining joint venture between the South and North, is operating normally.

Third, we think it is unlikely that there will be a lasting impact from the demise of Kim Jong-il on financial markets. Historically, the impact of events in North Korea on the KOSPI has not lasted more than a week (see Exhibit 1) and we do not see any reason why the situation would be  any different now.

Beyond the near term, North Korea is likely to enter into a transition to a succession arrangement, for which implications will depend on scenarios. While it is difficult to foresee how its political and economic systems will evolve, excluding the chance of military action, the process is unlikely to affect adversely the South Korean economy in our baseline scenario of gradual integration. We have been highlighting this as a most likely scenario, given the apparently strong political consensus in South Korea against a German-style unification. An alternative scenario, which is fairly unlikely now, is a rapid and subsidy-based unification, which would be prohibitively expensive in Korea due to the large gaps in the living standards and relatively small gap in population. The third scenario, of which the odds are substantial, is the status quo.

Under our baseline scenario, we see more upside in the medium and long-term outlooks, given the  potentially large synergies between the two Koreas, in terms of natural resources, technology, capital and demographics

 

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Mon, 12/19/2011 - 13:39 | 1994618 gojam
gojam's picture

" I told you I was il."

Mon, 12/19/2011 - 14:59 | 1994939 Rhone_Ranger
Rhone_Ranger's picture

So long to the vile, mass-murdering tyrant!

 

http://www.youtube.com/watch?feature=player_embedded&v=-hkAfd2vBOI#!

 

Mon, 12/19/2011 - 17:35 | 1995640 SAT 800
SAT 800's picture

Yes. May He rot in Hell. Nice try on the sensationalist journalism, but nothing could possibly be more insignificant than North Korea. Nobody gives a rat's ass, really.

Mon, 12/19/2011 - 13:41 | 1994624 pendragon
pendragon's picture

so btfdbz

Mon, 12/19/2011 - 13:42 | 1994626 homer8043
homer8043's picture

Honestly, they haven't been doing "Weekend at Bernies" for three years and just got caught?

Mon, 12/19/2011 - 13:44 | 1994635 s2man
s2man's picture

Oh good.  An unstable nuclear power probably won't affect S. Korea's economy.  That's comforting.

Tue, 12/20/2011 - 04:47 | 1996945 SevensGarlic
SevensGarlic's picture

Inside story from Ben Fulford

"North Korean dictator Kim Jong Il was murdered Saturday as part of a major power struggle in East Asia, according to Asian secret society sources and Japanese military intelligence. The murder of Kim was followed by a series of arrests of senior police officials in Japan linked to North Korea as well as the ouster of six CIA agents, the Japanese sources say. The death has left Yasuhiro Nakasone, the top North Korean and Rothschild agent in Japan, without a power base, Japanese underworld sources say. In North Korea, meanwhile, there is now a succession battle taking place between the Rothschild faction, who want to place their trained stooge Kim Jong Un in power and set up a Rothschild central bank versus a military clique that wants independence from Rothschild control, Rothschild and Japanese underworld sources say. The action is Asia is linked to a worldwide takedown of the satanic cabal that has been trying to create a global dictatorship.

According to a Rothschild source who was recently in Korea, the Rothschild’s like the Swiss educated Kim Jong Un, because he would allow North and South Korea to be unified and would permit the opening up of the North Korean economy to Rothschild interests. Several senior Asian, US and Rothschild sources have, on many occasions, said they expect about 1 million Khazarian Satanist refugees from the United States to settle in North Korea once the financial crisis reaches its final stage. These same sources also say the Korean peninsula would then experience boom times as a result of the influx.

In any case, the battle in Asia is expected to heat up behind the scenes over the coming weeks as Khazarian slave politicians are purged from power in Japan. The Rothschild faction headed by David Rothschild in Geneva is making a push in Japan using the sadistic murderer former Prime Minister Junichiro Koizumi, President of the Rothschild controlled World Court Hisashi Owada (father of princess Masako), former Finance Minister top bureaucrat Toyo Gyohten, Asian Development Bank President Haruhiko Kuroda and current top MOF bureaucrat Eijiro Katsu. They will find the usual thugs they relied on as enforcers no longer work for them but are now affiliated with the White Dragon Society or with Asian secret societies like the Black Dragon or the Red and Blue."

articles continues....http://lucas2012infos.wordpress.com/2011/12/19/ben-fulford-kim-jong-il-murdered-as-part-of-major-asian-power-battle-19-december-2011/

Mon, 12/19/2011 - 13:46 | 1994642 DaveyJones
DaveyJones's picture

I can see why they have insight, Goldman and North Korea have a lot in common 

Mon, 12/19/2011 - 14:02 | 1994712 Don Birnam
Don Birnam's picture

Classic.

+1

Mon, 12/19/2011 - 14:03 | 1994717 youLilQuantFuker
youLilQuantFuker's picture

I'll bet you dollars-to-dumplings that the Squid has a tentacle focused on enriching the life of Kim Sul-song. The backdoor.

Any takers?

Mon, 12/19/2011 - 14:14 | 1994755 Ruffcut
Ruffcut's picture

Does GS have an office in NK to stick another replacement in for the once Il, now dead. I betcha corzine would take the job. He would sell all the nukes to rogue muslims and make some coin to pay back MF clients. Or get goldman to IPO weapons to all the highest bidders.

No warhead left behind.

Mon, 12/19/2011 - 13:48 | 1994647 FranSix
FranSix's picture

I bet he's ronry now!

Mon, 12/19/2011 - 17:44 | 1995668 Uchtdorf
Uchtdorf's picture

Nah, he's getting wet kisses from Mao Tse Tung right about now.

Mon, 12/19/2011 - 13:48 | 1994648 vegas
vegas's picture

I wonder how many clients they have in N. Korea? Vampire Squid is everywhere.

 

http://vegasxau.blogspot.com

Mon, 12/19/2011 - 13:49 | 1994650 TheGardener
TheGardener's picture

Another dictator died in his bed.

Mon, 12/19/2011 - 13:51 | 1994657 lolmao500
lolmao500's picture

China will not let North Korea fall to a US puppet Unified Korea, bet on that.

Mon, 12/19/2011 - 13:55 | 1994678 Vergeltung
Vergeltung's picture

good point.

 

Mon, 12/19/2011 - 19:45 | 1996004 Paladin en passant
Paladin en passant's picture

Absolutely no one wants North Korea.  When the north collapses, the south will provide aid, but they will not go toward a German-style reunification.  The people living there have no value in normal economy. They are pigmies, literally and have no marketable skills. So North Korea "falling to a US puppet" is a total misunderstanding of the geopolitical reality now and for the next 100 years. 

Mon, 12/19/2011 - 13:58 | 1994687 Spitzer
Spitzer's picture

Japan and S Korea should be attacking now to catch this new chubby slant eyed douche off guard

Mon, 12/19/2011 - 14:00 | 1994701 chindit13
chindit13's picture

Third son, second of the Dear One's second wife.  All sons educated in Switzerland.  Eldest is somewhat estranged, living in Macau, dreams of spending his life in a fantasy world far from home.  Middle son is batshit crazy drug hound.  Third, now leader, is possible sociopath, packing all the social skills and ratrionality one would expect from the pampered spawn of an eccentric dictator.  This third son now has his finger on admittedly questionable missile delivery systems, albeit nuclear, and is surrounded by a group of generals whose first choices are to eat and live, so they might support him.  Might.  The new leader has no cult following, so his removal, for good or bad, is entirely possible, especially early on in his regime.  A betting man stands back and let's this breathe.

Goldman may be comfortable, but if this analyst is Korean and resident in Seoul, he's whistling passed the graveyard.

Mon, 12/19/2011 - 15:34 | 1995070 YHC-FTSE
YHC-FTSE's picture

+1 Informative and astute as usual. 

Just an addition: The upper echelons of the hierachy in NK are family members - it is a "family business" in the Sicilian meaning of the phrase, with the added spice of a personality cult. This monopoly is highly unlikely to change whoever they place in front of the crowds. 

I don't have a clue about this chubby young Swiss educated dictator, or how he might run things, but I expect it'll be whatever benefits his family's hold on power.

Mon, 12/19/2011 - 14:01 | 1994705 FubarNation
FubarNation's picture

You gotta admit that little fucker KJI had his shit together. 

Fooling all those people for all that time.

Propaganda God.

Now to see if his offspring fell far from the tree.

??? ?????

Mon, 12/19/2011 - 22:48 | 1996371 masterinchancery
masterinchancery's picture

Mr. Kim, he dead. But the new boss same as the old boss.

Mon, 12/19/2011 - 14:13 | 1994751 Joebloinvestor
Joebloinvestor's picture

Good riddance and may he fade into obscurity as fast as Barry will.

Kind of a shame they wasted a perfectly good train station trying to get the little asshole.

 

Mon, 12/19/2011 - 14:14 | 1994754 junkyardjack
Mon, 12/19/2011 - 14:14 | 1994756 Manthong
Manthong's picture

I miss the good old days when the death of a tyrant resulted in a violent power struggle.

Mon, 12/19/2011 - 14:21 | 1994779 pragmatic hobo
pragmatic hobo's picture

I would like to know what BANG DA HO thinks about this ...

Mon, 12/19/2011 - 14:21 | 1994780 lesterbegood
lesterbegood's picture

Posted by Benjamin Fulford today. Discernment advised.

North Korean dictator Kim Jong Il was murdered Saturday as part of a major power struggle in East Asia, according to Asian secret society sources and Japanese military intelligence. The murder of Kim was followed by a series of arrests of senior police officials in Japan linked to North Korea as well as the ouster of six CIA agents, the Japanese sources say. The death has left Yasuhiro Nakasone, the top North Korean and Rothschild agent in Japan, without a power base, Japanese underworld sources say. In North Korea, meanwhile, there is now a succession battle taking place between the Rothschild faction, who want to place their trained stooge Kim Jong Un in power and set up a Rothschild central bank versus a military clique that wants independence from Rothschild control, Rothschild and Japanese underworld sources say. The action is Asia is linked to a worldwide takedown of the satanic cabal that has been trying to create a global dictatorship.

Mon, 12/19/2011 - 14:36 | 1994853 NotApplicable
NotApplicable's picture

Fulford is a Rockefeller dis-info agent. He tries to spin the story that the Japanese underground is taking on the world's central banksters, yet cannot even create credible fiction of the tinfoil hat variety. How so? Well, a few years ago when he first started talking about the underground, he reported that they had cut a deal with the banksters and were going to remove W from the WH to replace them with a trusted outsider. Who was the outsider Fulford stated? Why Al Gore, of course! (just who you expected, huh?)

Mon, 12/19/2011 - 16:35 | 1995387 Goldilocks
Goldilocks's picture

I dunno… Benjamin Fulford seems to spout,
Regurgitated common knowledge & reactionary stuff
…not much we don’t already know.

BTW, Wasn’t there a rumor that Kim Jong Il died already and that the new guy was a body double (or clone)?
…so again, I dunno.

Al Gore? Well that’s dirty… ;-)

Mon, 12/19/2011 - 14:24 | 1994793 Whoa Dammit
Whoa Dammit's picture

The son looks a lot like Chastity Bono. Should we expect to see him/her on the next season of Dancing With The Stars doing the missile tango?

Mon, 12/19/2011 - 14:26 | 1994808 A Lunatic
A Lunatic's picture

All I got for Christmas was this stupid Dictatorship - Kim Jung-un

Mon, 12/19/2011 - 14:53 | 1994917 Eally Ucked
Eally Ucked's picture

At least  once I can agree with GS.

Mon, 12/19/2011 - 14:53 | 1994918 lolmao500
lolmao500's picture

Hopefully the next scumbag to die of a heart attack is Cheney or Bush or Bernanke or Merkel... or maybe even Kissinger or Rumsfeld or Rockefeller or Pelosi or... there's too many to name... so much scum, so little heart attacks to go around.

Mon, 12/19/2011 - 16:25 | 1995327 DaveyJones
DaveyJones's picture

funny, that was the first thought that entered my mind this morning as well. I guess it's another sign that something's wrong when you wish the same results befallen an evil dictator

Mon, 12/19/2011 - 15:38 | 1995094 crzyhun
crzyhun's picture

Mr Il is no more. He is dead. Praise Dearest Leader who has gone to the Great Commissariat. We moron his lose.

Mon, 12/19/2011 - 15:45 | 1995125 Pancho Villa
Pancho Villa's picture

A little known fact: Kim Jong-il is Korean for "bad hair day".

Mon, 12/19/2011 - 15:54 | 1995150 Peter K
Peter K's picture

I was intrigued by the shows of sorrow over the Dear Leaders death in North Korea. The only thing was missing was the loyal followers committing mass hari kari. But after a while, I thought to myself that this might be a good teachable moment. In the not to distant future, our own Dear Leader will be slaughtered by the ungrateful voters, and his loyal faithful in the Mass Media will no doubt react in a similar manner :)

Sat, 01/07/2012 - 13:51 | 2042279 dizzyfingers
dizzyfingers's picture

...isn't h.k. Japanese?

Mon, 12/19/2011 - 17:49 | 1995679 Uchtdorf
Uchtdorf's picture

Years ago, newspapers there mentioned that their Dear Leader had played a round of golf, 18 holes, mind you. His score? They gushingly reported that he entered the clubhouse with a 27. Yep, 3-4 holes-in-one. Bunch of eagles, no bogeys. I felt embarrassed that the peasants of North Korea would be subjected to such drivel. I mean, we know he's a worthless dictator. Why bother to print lies like that?

Tue, 12/20/2011 - 01:20 | 1996779 StychoKiller
StychoKiller's picture

Hmm, first "Eternal Leader", then "Dear Leader" -- time for "Fearless Leader!"  :>D

Mon, 12/19/2011 - 17:50 | 1995688 Darkness
Darkness's picture

I wonder who gets his porn collection?

"N. Korea's Porn Problem"- http://www.time.com/time/magazine/article/0,9171,449516,00.html

Mon, 12/19/2011 - 17:57 | 1995707 Joebloinvestor
Joebloinvestor's picture

The new guy should be careful of getting on airplanes (like his dad).

With two others to worry about, I would make them fly with me.

Might be wise to check under the bed before sleeping in it.

Mon, 12/19/2011 - 20:00 | 1996038 Mr_Wonderful
Mr_Wonderful's picture
North Korea under Kim Chong-il: Power, Politics, and Prospects for Change (Praeger Security International) 2011

http://thepiratebay.org/torrent/6899565/North_Korea_under_Kim_Chong-il__...
Mon, 12/19/2011 - 23:09 | 1996407 Shineola
Shineola's picture

The local newspaper headline read" KIM JUNG IL, DIED AT 69". Old rascal! :)

Tue, 12/20/2011 - 01:22 | 1996783 StychoKiller
StychoKiller's picture

"Jelly-roll blues" has kilt many a man (probably women too!) :>D

Tue, 12/20/2011 - 02:55 | 1996895 connda
connda's picture

This is a non-event.  I'm sure N. Korea had contingency plans to back-fill this moronic idiot's demise wayyyy before it happened.  I'm sure it's business as usual: continued stavation of the proletariat while the Party Members jockey for the next rung up the party ladder.

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