N. Korea Weapons Seized
Research for Online Investors

by John Dalt

12/21/09

North Korea was caught with their hand in the cookie jar last week.  Authorities seized a cargo plane full of weapons in Thailand.  The final destination and buyers of the weapons are not known.  The crew told authorities the plane was supposed to stop in Bangkok, Sri Lanka, the UAE and Ukraine.  They believed the cargo was heavy equipment for oil operations.  The flight crew of five men were all former members of the Soviet Air Force.

The value of the cargo is estimated at $18 million, and consisted of 35 tonnes of crated weapons. The weapons included RPG’s, man portable surface-to-air missiles, and two mobile multiple-rocket launchers.   North Korea has long been suspected of supplying arms to Iran and other Middle Eastern countries. Analysts believe N. Korea exports up to $1 billion a year in weapons to rogue regimes to obtain foreign currency. Without this foreign currency, security analysts believe this seizure may force N. Korea back to the six-party talks on nuclear disarmament to win aid.

U.S. envoy Steven Bosworth was in N. Korea last week, just before this flight, on a mission to persuade Pyongyang to rejoin the talks. Asia Times has the story, “Weapons Seizure hits North Korea Hard.”  This is the third interdiction of N. Korean Weapons since U.N. Resolution 1874 gave member countries the right to inspect suspicious cargo and seize N. Korean Weapons.  We explained the intricacies of the U.N. sanctions on June 23 in "Profit in Treasuries, Iran and N. Korea."

Copenhagen ended with all going home in their private jets. Some are upset that they did not get money from developed countries to pay for their fuel. Others are upset because they spent too much political capital on a failed enterprise. Gordon Brown, Britain’s Prime Minister, is the biggest cheerleader for a climate change agreement. He went to the conference early to try to broker a deal. Some government officials just cannot wait to offer to spend their treasuries dry.

One would think that Britain was broke enough after bailing out their banks and spending money on stimulus programs in efforts to jump-start their economy.  The P.M. charged ahead looking for a signature victory to take to the electorate in upcoming elections.  He needs something to make his party seem relevant to the issues facing the country.  The Times Online has the story, “Selling a Low-Carbon Life Just Got Harder.”

One of the developments at the failed Copenhagen meetings was China being put on the hot seat by other ‘developing’ countries.  China likes to align themselves with the poorest countries, but the tables were turned on China, and they did not like it.  China was attacked by smaller developing countries for benefiting more than anyone else from carbon credit funding.

China has vowed to reduce carbon emissions per unit of GDP by 40% to 45% by 2020, but projected economic growth would result in a doubling of emissions compared to 2005 levels.  Many developing countries have called for mandatory caps on greenhouse gases by emerging economies by 2013, like China.  This was enough to make China’s negotiator spit out his tea!  Asia Times has the story, “China Reels under a Barrage of Criticism.”

To the Mailbag:

Friday’s letter on portfolio re-balancing was great and timely, thanks.---paid up subscriber D.J.

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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