After a long period of relative calm, the world has presented two power vacuums in one weekend.
The first is the uncertain status of South Korean’s president, who attempted to unilaterally impose martial law last week. (His defense minister claimed to have learned about it on TV.) I watch a lot of Korean TV. In the good ol’ days the unsuccessful president would have been tortured to reveal his accomplices followed by death by beheading, poisoning, being torn apart by a team of oxen, etc. Nowadays nobody seems to know what will happen.
https://www.nytimes.com/2024/12/08/world/asia/south-korea-martial-law-yoon.html
After Failed Martial Law, South Koreans Ask: Who’s in Charge?
President Yoon Suk Yeol’s ill-fated bid to impose martial law has created a power vacuum in his governing camp, pushing the country deeper into what analysts call a constitutional crisis.
By Choe Sang-Hun and Jin Yu Young, The New York Times, Reporting from Seoul, Dec. 8, 2024
South Korea’s government was paralyzed Sunday, mired in a new constitutional crisis after President Yoon Suk Yeol of South Korea clung to his office, but his own party’s leader suggested that he had already been ousted from power…
[end quote]
But the real stunner, the real cherry on the cake, is the deposition of one of the world’s nastiest dictators, Syrian President Bashar al-Assad. Once an opthalmologist, Assad took a page from his daddy’s book and poisoned his own people.
When an Islamist insurgency started sweeping cities in a south-moving blitzkrieg the writing was on the wall. Like Afghanistan and Iraq, the regular Syrian army simply melted away. Assad fled – now in Russia, granted asylum by his regime’s supporter. One U.S. analyst commented that the U.S. shouldn’t get involved since it was the “terrorist Super Bowl.” I don’t know why Russia granted asylum to Assad since he’s worthless without his power base. I doubt Assad will ever return but you never know.
(My internet keeps cutting out so I will have to create the topic and repeatedly edit it.)
South Korea is a major economy with its own stock market. It’s possible that the repercussions will impact the U.S. stock market but I think the South Koreans will get a handle on this pretty quickly because the North Koreans would take advantage of chaos PDQ.
Syria doesn’t have any Macroeconomic influence but they have had a central position in the fractious region since the days of the Neanderthals. It goes without saying that there are no good guys anywhere in the picture. How will Russia and Iran respond? Israel is already reinforcing the Golan Heights and seems to be saying, “Don’t blame us for this mess.”
In a less visible corner of the world, Georgia (yes, the original Georgia which was the birthplace of Josef Stalin), protests are breaking out since on Nov. 28, Prime Minister Irakli Kobakhidze announced that Georgia’s E.U. integration talks would be suspended until 2028, in a country where public support for joining the bloc has polled around 80 percent. I doubt that this will turn into another Ukraine but you never know. Heck, we didn’t know that Ukraine would turn into “another Ukraine” until Volodymyr Zelenskyy stood in front of a camera and announced that his government would defy the Russians even if it cost him his life. So anything could happen. Maybe classic Russian imperialism. Maybe chaos like the Arab Spring.
But I don’t think that Georgia will have a Macroeconomic impact on the U.S. markets even if they open another pesky front in Putin’s attempt to herd cats back into the Russian empire.
Will any of this have an impact on the U.S. markets? I don’t think so. It’s just entertainment for history buffs.
The Control Panel shows continued strength in the stock market. The bubble valuations are so extreme that MSM financial writers are commenting on how long can this go on.
The Treasury yield curve has dropped a bit but junk bonds are on a tear along with the stock market. The Fear & Greed Index is neutral.
The METAR for next week is sunny. The markets are more likely to pay attention to Washington, DC than obscure corners of the world. As always, the METAR is a short-term forecast. The bubble could burst at any time.
Wendy
