Posted at 6:19 a.m. EDT on Wednesday, Jan. 6, 2016
Markets, like the people who trade them, have always had a hard time factoring in potential nuclear catastrophes. That's why, when the futures cratered last night on seismic tremors that were later confirmed to be related to North Korea's first H-Bomb test, it didn't feel great to rush in and take the other side of the trade.
The combination of the unknown and inherently irrational North Korean government and thermo-nuclear weaponry isn't reassuring, except in the cold calculating way that the North Koreans have successfully used these existential nuclear threats to blackmail the West into feeding the people of that wretched nation.
It isn't like our nation's able to deal in any serious diplomatic way with the furtive, secret North Koreans. Dispatching Dennis Rodman to smooth things over isn't as dramatic or as effective as sending Henry Kissinger shuttling between Egypt and Israel to work out a definitive peace agreement.
Still, though, we have to ask, why are we freaking out about it even more than usual, when the South Korean market seems to be taking it in stride, dropping about 1% on the news or at least the tremors, before rallying hard to finish almost unchanged? The likelihood that Samsung's earnings prospects will be more likely crimped by the launch of North Korean missiles, than, say, Action Alerts PLUS charity portfolio name Apple's (AAPL) estimates, is pretty high -- although in this market an underground North Korean H-bomb test is as good as any reason to sell Apple. Maybe better. What's our model using for South Korean Apple sales this year anyway? Slash that!