World View: U.N. Security Council Condemns North Korea Nuclear Test

World View: U.N. Security Council Condemns North Korea Nuclear Test

This morning’s key headlines from

  • 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 thirdunderground nuclear test at the site for underground nuclear testin the northern part of the DPRK on Tuesday. The test was carriedout as part of practical measures of counteraction to defend thecountry’s security and sovereignty in the face of the ferocioushostile act of the U.S. which wantonly violated the DPRK’slegitimate right to launch satellite for peaceful purposes.

The test was conducted in a safe and perfect way on a high levelwith the use of a smaller and light A-bomb unlike the previousones, yet with great explosive power. …

The nuclear test will greatly encourage the army and people of theDPRK in their efforts to build a thriving nation with the samespirit and mettle as displayed in conquering space, and offer animportant occasion in ensuring peace and stability in the KoreanPeninsula and the region.”

The significance of the phrase “smaller and light A-bomb” is that, iftrue, it means that they have tested a nuclear bomb that’s smallenough to fit into long-range missile. The North Koreans havepreviously said that the intended target of their nuclear missileweapons is the United States. AFP

U.N. Security Council condemns North Korea nuclear test

The United Nations Security Council held an emergency meetingon Tuesday, and came out of the meeting issuing strong condemnationsof the North Korean nuclear test. They backed up their condemnationswith an explicit threat: If North Korea doesn’t end its nucleartest program, then the United Nations Security Council will holdanother meeting.

It remains to be seen whether the Security Council will do anythingmore. China has repeatedly expressed strong disapproval of NorthKorea’s nuclear tests, and recently threatened trade sanctions if theNorth Koreans went ahead with the test. However, China has alwaysbacked down in the past, since their main fear is an unstable NorthKorea that will send potentially hundreds of thousands of refugeesacross 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 muchcash on its balance sheet, and Einhorn would like a piece ofthat cash. In an interview on CNBC last week, here’s whathe said (my transcription):

“Let me tell you what I think is going on here. Appleis 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 oftraumas in its history, they sometimes feel that they can justnever 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 machineso I could call her back, because she didn’t want to get chargedfor the phone call. And that’s kind of the way that people’sattitudes sometimes are, once they’ve been thru this.

So we’ve been thinking about Apple carefully. and we recognizethat the company wants to have a very large cash hoard, they wannahave it in case bad things happen, they wanna have it sothat they can be strategic, they wanna have it so that they can doacquisitions if they wanted to.

And this has been building up to a large number over quite sometime. And what we thought about is that we came up with what wethink is a solution, where Apple can maintain its cash, and itsstrategic flexibility and its comfort money and its war chest, andat the same, shareholders can receive the value that is embeddedwithin the balance sheet.”

This is amusing because a lot of people who read my GenerationalDynamics web site also have a “depression era mentality,” and many ofthose people wish that the federal government did so as well, and notspend the country into trillions more in debt.vWhatever Apple’s motivation for maintaining a “very large cash hoard,”Apple is doing the right thing. A financial crisis will leave Applein good shape to survive, while other companies will go bankrupt, andpeople like Einhorn will lose everything and end up jumping out ofwindows (alluding, again, to a depression era mentality).

This example is instructive. Gen-X hedge fund manager David Einhorndoesn’t give a sh-t about the shareholders whose interest he claims tobe representing, but he undoubtedly expects to make millions forhimself from this deal. Einhorn is contemptuous of his owngrandmother, and he’s contemptuous of Apple for wanting to preservecash at a time of financial crisis. He sees Apple as a juicy plumthat he can pluck and cripple for his own financial gain. Thisanecdote shows many of the dynamics that created the financial crisis,and are making the financial crisis worse every day. Anyone withmoney is a potential target in this culture of fraud and corruption.

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