Bill Blain: "North Korea Is Waving A Red Flag In The Bull’s Face. What Will Donald Do?"

Submitted by Bill Blain of Mint Partners

Mint - Blain’s Morning Porridge – August 23rd 2017

“Out on the road today, I saw a deadhead stick on a Cadillac.. A little voice inside my head said, “Don’t look back. You can never look back.””


Interesting start to the last week of summer: a nasty dose of considered North Korean provocation, disbelief at what Hurricane Harvey is doing to Texas, handbags betwixt UK and EU on “negotiating seriously” over Brexit, and all these before we even get a whiff of this week’s EU data and US payrolls on Friday. I won’t even bother about Jackson Hole last week – yawn – we’ll talk about Central banks come September.

The market reaction to the latest North Korean missile flight tells us everything we need to know: Risk Off. Equities wobble, gold up, bond yields down and gold higher. Markets understand the reality: the Trump Jump is now well and truly over – Treasury yields are right back down there, the dollar is down 10%, stock markets have gone short, yet the US populace. But if there was a snap election tomorrow….. Don’t even think about it..   

Deliberately firing a missile on a trajectory over Northern Japan sends clear messages from the Kim Jong Un regime: 1) we are able to do it, and 2) but, we didn’t fire it in the direction of US Guam. Although the ballistics would have been well understood (ie it wasn’t going to hit Japan), it ratcheted up the fear by triggering alerts. It demands a US response – which will keep markets on tenterhooks. Firing the rocket from a site near downtown Pyongyang’s airport also sends the US a clear challenge about limits on what a “measured” response might mean.

So much for the Northerners wanting to negotiate – as the Americans were telling us just last week. You’d almost think the N Koreans were trying to wind up Trump?

Exactly.

They are waving a red flag in the Bull’s face to force a reaction. The S Koreans have already sent a couple of bombers to aggressively practice bomb drops – calm and measured. What will Donald do? After last week’s “Fire and Fury” rant, the N Koreans are expecting him to fulminate, look stupid, make some further angry comments – in short more bluster. They will continue to goad him into doing something “angry”… at which point America gets the blame, and China can step in as peacemaker.

Exactly how this plays out is going to keep markets guessing. Add it to the general head-shaking re US market prospects.

Meanwhile, Tropical Storm Harvey is proving another difficult challenge for Donald.

The storm is circling back, powering up again over the warm Gulf waters, and could well prove a double whammy if/when it hits the coast again on Wednesday. $20 bln insurance hit. However, I’m told not to worry about oil supply disruption – ports, pipes and refineries are simple to fix and reopen, and there is plenty of oil in store. Houston is a big place – and much more than just an oil city – its probably the number one centre re Medicine. The costs and the dislocation to a major part of the US economy are bound to have a short-term impact on the economic data, and sting the insurers, but these Texans are a resilient bunch.

What’s potentially more interesting is what Donald now says about Global Warming. Historically big storms flatten the Gulf Coast on a predictable basis – Houston has been flattened before – but sea temperatures are rising, making storms more violent and difficult to predict and prepare for. Maybe it will take a big one hitting the White House South to persuade his Donaldness that Climate Change is a serious matter..? 

Back this side of the pond…

Having spent the weekend in France and getting less than 1 Euro to the pound out the cashline machine, I am increasingly worried about the outlook for the UK. The EU is “exasperated” by the UK approach to Brexit – which is triggering all kinds of doom and gloom. Meanwhile, the Labour Party has adopted a policy on Brexit… whatever it might be. They are making the assumption the Europeans would be willing to accept transitions agreements.. but, hey, if it makes Theresa look more isolated, its worth pursuing..

Meanwhile, Dodgy’s Brexit Team has presented Brussels with a whole series of position papers (ah, the persuasive power of Powerpoint), and proposals calling for flexibility and pragmatism and giving us what we ask for. The EU say the proposals are “light” on details and sequencing. Brussels has a clear agenda and isn’t prepared to accept any ambiguity in the process.

Either we Brits are being geniuses in our approach, or it’s another example of how we simply don’t understand Europe. If we were dealing with 27 individual countries, then sure; each one would come to mutually beneficial agreements on new trade arrangements.

But we aren’t dealing with 27 countries.

We are dealing with One.

We are dealing with the unelected, unrepresentative representative of these countries; the self-perpetuating nomenklatura of the EU. It would be a massive mistake for our negotiators to assume the will of the EU somehow represents the collective will of the member countries. (I really should have used the “One ring to bind them all” quote from LoTRs as my quote-line this morning…)    

I have a sneaking suspicion this won’t end well. While individual countries and leaders may be sympathetic to the UK, they won’t be in meeting where Sauron, sorry Junkers/Barnier, hold the floor and Macron is juggling for European hegemony with a French accent.

Finally, at last a crypto-currency I understand.

The Whoppercoin allows you to save and trade cyber tokens earned when you buy the burger (but only in Russia thus far). Forget Bitcoin mining or such nonsenses.. buy lunch, wallet the digital token, and expect the Whoppercoin to appreciate 500% by tea-time… isn’t that what all crypto-currencies do?

Back to the day job…

Comments

Muppet Aug 29, 2017 12:45 PM Permalink

If the worlds most reviled country cannot be stopped in gaining nuclear weapons...it indicates world leaders are in fact powerless.

moorewasthebestbond (not verified) Aug 29, 2017 8:08 AM Permalink

I want to see if these nuckular bombs and warheads really work. All I've seen thus far is grainy, 60+ year old government-produced films and shockumentaries.

overmedicatedu… Aug 29, 2017 7:48 AM Permalink

much like a 300 foot rusty cargo ship raming a sleek modern high powered war ship ..nobody saw it coming..8 yrs of obuma has had this impact on the whole .gov of the USA..much like the NWO has planned..expect many more fuck ups..ending in a world government and one world bank..THEY LIVE,

bluez Aug 29, 2017 7:32 AM Permalink

It is simply too late. North Korea has launchable nukes now. They can easily slaughter or just starve 20 million residents in Seoul, South Korea. They can turn Japan's 50 hot spent nuclear fuel pools into super-size Fukushimas in five minutes. They can totally incapacitate a couple of our (actual value) trillion dollar naval battle groups.The horse is far out of the barn. (Of course, the Chinese can always order the North Korean generals to stuff Kim into a wood chipper. So they have a great deal of influence.)

Harry Lightning bluez Aug 29, 2017 10:52 AM Permalink

Its better to keep your uniformed thought to yourself than show how much of a fool you are by disclosing them. If the US wants, this matter would be settled in 15 minutes, long before the Fat Korean would ever have a chance to even think what to do. The entire Norkville will not have any ability at all to send any electronic messages to anyone or any missile system, every electronic chip in the country will be fried. Their submarine fleet, which is half a dozen tin cans, will be destroyed before they know what happened on the mainland Please, go back to sleep. 

In reply to by bluez

gregga777 Aug 29, 2017 7:13 AM Permalink

How does the United States Missile Defense Command know in advance that North Korean rockets carry no nuclear payload, and, therefore, should not be intercepted?

(Almost) everyone is being played. This is all Anglo-Zionist FAKE NEWS Media war hysteria. They are getting richer off of deliberately created volatility.

Harry Lightning gregga777 Aug 29, 2017 10:55 AM Permalink

They won't have to intercept them, they will not be able to launch. If this is a nuclear war, rather than conventional and the only type of attack that will prevent massive casualties in Seoul, the entire mechanics of attack are totally changed The order of battle is determined by weaponry that eviscerate the ability of the enemy to do anything more than he would have been able to do in the Stone Age. Literally. Fry every computer chip in a country and that's what happens. That's modern nuclear war. 

In reply to by gregga777

Doom and Dust Aug 29, 2017 7:07 AM Permalink

I am increasingly worried about the outlook for the UK.

I on the other hand am increasingly enthusiastic about my sterling shorts. Will be buying well into parity too.Also I've been inundated by headhunters (IT finance) where I live, most likely to do with UK-based businesses setting up subsidiaries and even moving.Brexit is turning out an enormous blessing for us continentals. Should have campaigned for it really. And with a government AND opposition this incompetent, all that control taken back won't be doing them any good either.

dogismycopilot Aug 29, 2017 6:34 AM Permalink

Trump will do nothing, because he can do nothing.Fat Boy runs Barter Town.Fat Boy is backstopped by China, he's got a gun to the head of Seoul, Russia will sell him gas and food because they need the money (sanctions effect), Japan is gutless, and the Ukrainians will sell him rocket motors all day long. Fat Boy is holding the tiger by the tai.Touch a hair on his head and he lets the tiger go.GOD I LOVE THIS SHOW!

wisefool Aug 29, 2017 6:25 AM Permalink

The airports are not open in bushland (Texas) yet, but I bet they flew the Kim Jong-Un family out of there. Just like they did the bin ladens on 911.It makes the most sense when facing a disaster like this.

Last of the Mi… Aug 29, 2017 6:17 AM Permalink

but sea temperatures are rising, making storms more violent and difficult to predict and prepare for Tells you all you need to know about the article. Fake new, fake science, fake politics. Manufactured propaganda mill reading.

gregga777 Aug 29, 2017 6:11 AM Permalink

These filthy rich hedge fund parasites are all products of decades of Goldman Sachs Feral Reserve System money printing. They'd make their own mothers and daughters into prostitutes to keep their "2 and 20" skim going with the suckers, er, I mean muppets, uh, I mean marks. Why does anyone think that the American People give a rats ass what these parasites think about anything? It's all parties, hookers and blow to them.

Marcecamb Aug 29, 2017 6:11 AM Permalink

I got lost into the details of the "news".Let's step back and see the map. The last time I checked, USA location is a tad far from Korean peninsula. Whatever hapenned with the "No foreignentanglements"? My american friends please go home. You have an awfull lot of rebuilding to do back there. Peace.

wisefool Aug 29, 2017 6:09 AM Permalink

Best Korea Make huricane. Bin laden only make buildings fall in to their own footprints at free fall.Trump should be fired up today when he gets to Bushland. Lots of tax money gonna get spent this time too.