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Generational Dynamics Web Log for 4-Dec-2010
4-Dec-10 News -- South Korea threatens military action against North Korea

Web Log - December, 2010

4-Dec-10 News -- South Korea threatens military action against North Korea

Jobs shock fails to dampen investors' bubbly holiday spirit

South Korea threatens military action against North Korea

Kim Kwan-jin (JoongAng)

Kim Kwan-jin (JoongAng)

Kim Kwan-jin, who is a 61-year-old Boomer who will become South Korea's Defense Minister, says he will not show the same weakness as his predecessor. Kim Tae-young was fired last week because he didn't react strongly enough to the recent North Korean artillery attacks on Yeonpyeong Island, killing civilians for the first time since the 1950s Korean War. JoongAng quotes Kim Kwan-jin as saying:

"We would definitely use the Air Force to strike back.
Rules of engagement are valid as guidelines to prevent accidental clashes from escalating. However, when [a country is suddenly] attacked, that’s a matter of self-defense. The enemy must be punished thoroughly until the source of hostility is eliminated.
Up until now, North Korea has made provocations in ways that were difficult to foresee, and the provocations are getting larger in scale as they occur. There is a possibility that they will attack [again] in an unexpected way. Including the five western border islands, I believe our entire country is a possible target for provocations. Attacks can be focused in one area, or they can happen at once in different regions. Preparations will be made for all possibilities."

These remarks come at a time when the North Koreans are strengthening their military in preparation for another attack.

South Korea's government has been thrown into chaos by the North Korean attack, according to the BBC.

If they don't retaliate for North Korean attacks, they look like fools; if they do retaliate, they risk full scale war.

So far, the South Korean public appears to have been almost completely oblivious to the danger from the North. But the mood of the public is changing, as people are beginning to talk about such questions as where they would go in the case of full scale war.

As I've said many times, my belief is that the North Koreans would welcome a full scale war, which means that trying to compromise with they or accommodate them is useless. This is not a radical concept, as many societies and countries throughout history have welcomed war, thinking that nothing could be as bad as their lives now. Once the war starts, they learn to their shock and horror how very wrong they were.

Jobs shock fails to dampen investors' bubbly holiday spirit

Friday's disastrous jobs report failed to dampen investors' bubbly enthusiasm on Friday, as the stock market continued to rise.

Employers added 39,000 jobs during the month of November, when analysts had predicted 150,000 to 200,000. The unemployment rate rose to 9.8%, according to Associated Press. Analysts on TV were devastated, and many said that their hopes of a quick recovery had been ruined. Some of them, who had been very optimistic just yesterday, were predicting a "double dip" recession now.

But, as usual, that didn't affect the stock market on its rising binge.

This amazes me because it's just like 2006 and 2007. At that time, I was writing that the stock market was in a huge and growing bubble, and I kept expressing astonishment that it could keep going up when price/earnings ratios were so high, and are still high. (See "Updating the 'real value' of the stock market.") The Law of Mean Reversion still applies today, just as it did before.

Is it all going to happen again? Will the Dow Industrials index reach 14,000 before it collapses again?

Additional links

S&P Ratings Service has warned Greece that it may further downgrade the country's bonds, which it already rates as junk. Reuters. The reason is that new interpretations by the EU of its bailout agreement imply that bond purchases by the European Central Bank (ECB) are senior to bond purchases by ordinary investors. This means that if Greece defaults, then the ECB loans will be paid first, before the investors' loans. The same considerations apply to the other countries that have been or will be bailed out. Euro Intelligence

Israeli Jew xenophobia toward Israeli Arabs is growing. A poll finds that 33% of Israeli Jews think Israeli Arabs should be placed in internment camps in the event of war, and 53% support encouraging Arabs to emigrate. Hardline Israeli foreign minister Avigdor Lieberman blames Arab leaders for the rising racism among Israeli Jews. Haaretz

A Jew who takes pride in Israel discovers that there were major atrocities on both sides of the 1948 Arab/Israeli war. This is consistent with the Generational Dynamics view of a generational crisis war. Palestine Note

Last year's UN climate talks in Copenhagen collapsed in humiliation, and the same thing may happen with this year's talks in Cancun. A group of Latin American, Arab and African countries are threatening to walk out if the "rich countries" did not commit to emissions cuts. Guardian

Asia is in a tailspin because 2010 has seen such aggressive hostility by the Chinese toward any country that takes steps contrary to China's foreign policy. South Asia Analysis Group

(Comments: For reader comments, questions and discussion, see the 4-Dec-10 News -- South Korea threatens military action against North Korea thread of the Generational Dynamics forum. Comments may be posted anonymously.) (4-Dec-2010) Permanent Link
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Generational Dynamics Web Log for 4-Dec-2010 4-Dec-10 News -- South Korea threatens military action against North Korea

South Korea threatens military action against North Korea

Jobs shock fails to dampen investors' bubbly holiday spirit

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Generational Dynamics Web Log for 4-Dec-2010
4-Dec-10 News -- South Korea threatens military action against North Korea