The United States is planning
joint military exercises with South Korea, while Kim Jong-Il has told
the North to prepare for war. The markets are responding negatively to
of tensions, which follows the sinking
of a South Korean warship. Tricky as it may be to predict how this will
play out politically, commentators think they have a handle on how the crisis is hitting stocks and Treasury notes.
- Asia Down, Everywhere Else Down Too Mike Shedlock
notes a "sea of red in Asia," but points out that "close inspection of
the futures market shows it is a sea of red everywhere ... right now
the stock market," he concludes, "does not seem too excited by war
prospects. The beneficiary should be easy to guess. US treasuries are
- 'The Market Is Freaked Out' Business Insider's Joe Weisenthal is less mild.
- 'Buckle Your Seat Belts,' suggests Randall Forsyth
at Barron's. He, like many, blames the North Korea-South Korea tensions
for the sell-off yesterday. He also adds that "once again, the winners
are U.S. Treasuries and gold as safe havens. In other words, more of
- 'Not Exactly the Best Time to Escalate a Fight,' comments Yves Smith at Naked Capitalism, eyeing the sinking euro. "In case you managed to miss it, it's ugly out there."
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