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Generational Dynamics Web Log for 13-Feb-2013
13-Feb-13 World View -- North Korea announces successful nuclear test

Web Log - February, 2013

13-Feb-13 World View -- North Korea announces successful nuclear test

David Einhorn seeks to undermine Apple Computer

This morning's key headlines from GenerationalDynamics.com

North Korea announces successful nuclear test
U.N. Security Council condemns North Korea nuclear test
David Einhorn seeks to undermine Apple Computer

North Korea announces successful nuclear test

North Koreans celebrate rocket launch on Dec. 12, 2012 (AP)

North Koreans celebrate rocket launch on Dec. 12, 2012 (AP)

North Korea's official Korean Central News Agency (KCNA) issued he following English language statement on Tuesday:

"The scientific field for national defense of the DPRK [Democratic People’s Republic of Korea] succeeded in the third underground nuclear test at the site for underground nuclear test in the northern part of the DPRK on Tuesday. The test was carried out as part of practical measures of counteraction to defend the country’s security and sovereignty in the face of the ferocious hostile act of the U.S. which wantonly violated the DPRK’s legitimate right to launch satellite for peaceful purposes.
The test was conducted in a safe and perfect way on a high level with the use of a smaller and light A-bomb unlike the previous ones, yet with great explosive power. ...
The nuclear test will greatly encourage the army and people of the DPRK in their efforts to build a thriving nation with the same spirit and mettle as displayed in conquering space, and offer an important occasion in ensuring peace and stability in the Korean Peninsula and the region."

The significance of the phrase "smaller and light A-bomb" is that, if true, it means that they have tested a nuclear bomb that's small enough to fit into long-range missile. The North Koreans have previously said that the intended target of their nuclear missile weapons is the United States. AFP

U.N. Security Council condemns North Korea nuclear test

The United Nations Security Council held an emergency meeting on Tuesday, and came out of the meeting issuing strong condemnations of the North Korean nuclear test. They backed up their condemnations with an explicit threat: If North Korea doesn't end its nuclear test program, then the United Nations Security Council will hold another meeting.

It remains to be seen whether the Security Council will do anything more. China has repeatedly expressed strong disapproval of North Korea's nuclear tests, and recently threatened trade sanctions if the North Koreans went ahead with the test. However, China has always backed down in the past, since their main fear is an unstable North Korea that will send potentially hundreds of thousands of refugees across the border into China. CS Monitor

David Einhorn seeks to undermine Apple Computer

David Einhorn being interviewed on CNBC on Feb. 7

David Einhorn being interviewed on CNBC on Feb. 7

Hedge fund manager David Einhorn, president of Greenlight Capital, is suing Apple Computer because Apple Computer has too much cash on its balance sheet, and Einhorn would like a piece of that cash. In an interview on CNBC last week, here's what he said (my transcription):

"Let me tell you what I think is going on here. Apple is a phenomenal company, it's filled with talented people, creating iconic products that consumers around the world love. But Apple has a problem, which is, it has a cash problem.
It has sort of a mentality of a depression. In other words, people who've gone thru traumas, and Apple's gone thru a couple of traumas in its history, they sometimes feel that they can just never have enough cash.
I remember my grandma, she was depression era for her childhood, and she wouldn't even leave me a message on my answering machine so I could call her back, because she didn't want to get charged for the phone call. And that's kind of the way that people's attitudes sometimes are, once they've been thru this.
So we've been thinking about Apple carefully. and we recognize that the company wants to have a very large cash hoard, they wanna have it in case bad things happen, they wanna have it so that they can be strategic, they wanna have it so that they can do acquisitions if they wanted to.
And this has been building up to a large number over quite some time. And what we thought about is that we came up with what we think is a solution, where Apple can maintain its cash, and its strategic flexibility and its comfort money and its war chest, and at the same, shareholders can receive the value that is embedded within the balance sheet."

This is amusing because a lot of people who read my Generational Dynamics web site also have a "depression era mentality," and many of those people wish that the federal government did so as well, and not spend the country into trillions more in debt.

Whatever Apple's motivation for maintaining a "very large cash hoard," Apple is doing the right thing. A financial crisis will leave Apple in good shape to survive, while other companies will go bankrupt, and people like Einhorn will lose everything and end up jumping out of windows (alluding, again, to a depression era mentality).

This example is instructive. Gen-X hedge fund manager David Einhorn doesn't give a sh-t about the shareholders whose interest he claims to be representing, but he undoubtedly expects to make millions for himself from this deal. Einhorn is contemptuous of his own grandmother, and he's contemptuous of Apple for wanting to preserve cash at a time of financial crisis. He sees Apple as a juicy plum that he can pluck and cripple for his own financial gain. This anecdote shows many of the dynamics that created the financial crisis, and are making the financial crisis worse every day. Anyone with money is a potential target in this culture of fraud and corruption.

(Comments: For reader comments, questions and discussion, see the 13-Feb-13 World View -- North Korea announces successful nuclear test thread of the Generational Dynamics forum. Comments may be posted anonymously.) (13-Feb-2013) Permanent Link
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North Korea announces successful nuclear test

U.N. Security Council condemns North Korea nuclear test

David Einhorn seeks to undermine Apple Computer

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Generational Dynamics Web Log for 13-Feb-2013
13-Feb-13 World View -- North Korea announces successful nuclear test