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 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
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
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.
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