Korean Poker
Research for Online Investors

by John Dalt

11/24/10

A little over 36 hours ago, N. Korea fired approximately 200 artillery shells at Yeonpyeong Island, S. Korea. The island is recognized as part of S. Korea according to the U.N. The U.S. is sending the U.S.S. George Washington to participate in military exercises in Korean waters.  Is this a bluff, or is N. Korea playing from a strong hand?

Two marines were reported dead. The George Washington carries 75 warplanes and a crew of over 6,000. The aircraft carrier was at a naval base at Japan and will be off the coast of Korea for the ‘scheduled’ exercises Sunday through Wednesday.

N. Korea accused the South of driving the peninsula closer to war by withholding humanitarian supplies and “reckless military provocation.”  S. Korean politicians grilled Defense Minister Kim Tae-young.  They were upset their military did not mount a quick and strong retaliation in response to the shelling.

Reuters reports that Kim Jang-soo, a retired S. Korean defense minister and present lawmaker, told the public “I am sorry that the government has not carried out ruthless bombing through jet fighters during the North’s second round of shelling.”  He wants to call the North's bluff.

S. Korea warned that any future attack would trigger “massive retaliation.”  The Global Times of China reports that N. Korea accuses the South of firing shells into the water about 90 minutes before the North returned fire.  S. Korea is conducting military exercises with 70,000 troops.  These exercises are scheduled to run through Sunday.  Chinese foreign ministry spokesman Hong Lei urged both sides to ‘do things conducive to peace and stability on the Korean Peninsula.’

China holds the "hole cards."

This weekend marks the 60th anniversary of 8,000 Marines fighting their way to safety after being surrounded by 120,000 Chinese troops at the Chosin Reservoir, N. Korea. They not only fought enemy troops but the coldest winter in over 100 years. Minus 54 degrees was recorded at one outpost! Survivors call themselves “The Frozen Chosin.” At your Thanksgiving dinner tomorrow, remember the Frozen Chosin, and others who have volunteered throughout our history.

When asked what he wanted for Christmas, he replied “Give Me Tomorrow.”  Our wish, may your family have many peaceful tomorrows, because of men like the soldier pictured above.  Here is a short video about the Frozen Chosin.  One commander was asked if the Marines were retreating, he replied "No, we are attacking in a different direction."  You can read about the events of November 1950.

We hope the present belligerence does not spiral out of control.  But, one should not minimize the possibilities.  It is best to be defensive in the market.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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