This morning’s key headlines from GenerationalDynamics.com

John Kerry says that North Korea’s rhetoric is ‘unacceptable’


South Korean President Park Geun-Hye shakes hands with John Kerry on Friday (Reuters)

Here’s what American Secretary of State John Kerry said onFriday during a visit to Seoul, Korea: 

We are all united in the fact that North Korea willnot be accepted as a nuclear power. The rhetoric that we’rehearing from North Korea is simply unacceptable.

What is this supposed to mean? North Korea is already a nuclearpower, and has been for several years. So if that’s not going to “beaccepted,” does that mean that we’re going to bomb North Korea’snuclear facilities? What else could it possibly mean? 

And what does it mean that the rhetoric “is simply unacceptable”?Does that mean that we’re going to bomb North Korea’s child dictatorKim Jong-un the next time he opens his mouth? What else could itmean? 

The U.S. has been calling North Korea’s actions and rhetoricjoke. It’s the same thing as in Syria — the U.S. has said over andover again for two years that president Bashar al-Assad’s bloodyslaughter of innocent Syrian women and children is “unacceptable,” but hejust keeps going on slaughtering innocent women and children. Onceagain, these statements are silly jokes. 

Kerry added the following: 

If Kim Jong-un decides to launch a missile, whetherit’s across the Sea of Japan or some other direction, he will bechoosing willfully to ignore the entire international community.And it will be a provocation and unwanted act that will raisepeople’s temperatures. 

I would say ahead of time that it is a huge mistake for him tochoose to do that because it will further isolate his country andfurther isolate his people, who frankly are desperate for food,not missile launches.

So, why would a missile test be a “huge mistake”? Does anyonereally believe that the North Koreans care if they’re

It’s thought to be likely that the North Koreans will conducta missile test on Monday, April 15, the birthday of NorthKorea’s founder, Kim Il-sung. The assumption is furtherthat the missile test will not target Japan, South Korea, orthe U.S., but will land in the ocean. 

Question: In that scenario, should the U.S. try to shoot it down,given that Kerry is saying that a missile test would be a “hugemistake”? 

CBS News

Cyprus residents in shock over new bailout terms

Residents of Cyprus are wondering how things could possibly get anyworse, now that the size of the bailout has risen from 17.5 billioneuros to 23 billion, as well as requiring Cyprus itself to contribute 13 billioneuros, rather than 7.5 billion. The government of Cyprus is blamingthe increase on the number of people who withdrew billions of euros inadvance of the bailout agreement because they foresaw what mighthappen (or, as some have said, because they were warned). 

Of course,those people are thanking their lucky stars that they got their moneyout before the 60% confiscation was imposed. But now the Cypriots aretrying to figure out where they’re going to get the additional 5.5billion euro contribution that they have to make to the bailout.Supposedly it will be done by raising taxes and selling off stateassets, but things are still up in the air. 

Meanwhile, the Germans are showing no sympathy at all and arecertainly not willing to increase their own contribution to the Cyprusbailout. In fact, just the opposite is true — some Germanpoliticians are saying that the 5.5 billion euro increase proves thatthere’s no point in bailing out Cyprus at all, since the money wouldjust go to waste. 

Germany’s parliament, the Bundestag, will vote nextweek whether to approve the terms of the Cyprus bailout; theproposal is expected to pass, provided that Cyprus can prove that itwill be able to come up with the extra 5.5 billion. Cyprus Mail and Spiegel

Morgan Stanley’s Mary Deatherage lies on CNBC


Mary Deatherage on Friday (CNBC)

I never cease to be absolutely astonished at how “experts” come on toCNBC and tell open-mouthed lies to support their sales pitch, with nocorrections from the anchors. They simply make up any numbers theywant, and nobody says a word. 

On Friday morning, I listened to Morgan Stanley’s Mary Deatherage,head of The Deatherage Group and described as a Wealth Advisor and SeniorInvestment Management Consultant, as she responded to a question asking whether the stock market would go up from here: 

Well look, under no circumstances could we ever saythat the market’s frothy. The trailing price/earnings for the S&Pare 14.9 with a 2% yield… So nobody could say that it’sovervalued. So the question is: Does it go strong fromhere?

No, the trailing S&P 500 price/earnings ratio is not 14.9. She simplymade that number up out of thin air. The S&P 500 P/E ratio is 18.28as of April 12 according to the Wall Street Journal. (See the figure at the bottom of the tables, on the left.)And 18.28 is astronomically “frothy.” 

So Deatherage simply lied, presumably because she wants you to buy stocks throughher so she can make a lot of your money from commissions. One could argue, at worst, she’sdefrauding her clients. Or maybe you’d prefer to believe that shedidn’t know the actual numbers. In that case, she’s incompetent, since knowing the S&P500 P/E ratio is the most basic part of her job. Either way, you’rethe fool if you trust even a penny of your money to Deatherageor to Morgan Stanley. 

As was reported in January, arecent court case has caused the release of hundreds of pages ofinternal Morgan Stanley documents that show that, during the mid-2000s, Morgan Stanley employees knowingly lied to clients by sellingthem worthless securities while claiming they were rated “AAA.” As I’vesaid many times, the same people are in the same jobs in the financialindustry, still looking for new ways to defraud people. 

As I wrote in my 2013 Forecast,the S&P 500 price/earnings ratio has been way above average since1995, and by the Law of Mean Reversion, this bubble will burst. The resulting panic will push stock prices below the Dow 3000 level. Ifyou don’t believe that, then ask yourself why one stock brokerafter another goes onto CNBC and lies about stock valuations. 

KEYS: Generational Dynamics, John Kerry, North Korea, South Korea,Park Geun-Hye, Kim Jong-un, Kim Il-sung, Japan,Cyprus, Germany,Morgan Stanley, Mary Deatherage, CNBC 

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