Por:Dennis Falvy  

COREA DEL NORTE LANZA SU TERCER MISIL DE PRUEBA EN TRES SEMANAS

La Redacción BBC Mundo, nos informa que Corea lanzó hoy  el misil  scud el que voló alrededor de 450 Kms antes de caer en el mar de Japón.

Derechos de autor de la imagenAFPImage caption.

Este país presentó una protesta contra este último lanzamiento, ya que según dijo, cayó en su zona económica exclusiva. 

Corea del Norte tiene una gran reserva de misiles Scud de corto alcance desarrollados por la Unión Soviética. Las versiones modificadas de estas armas pueden tener un alcance de 1.000 km.

El régimen de Kim Jong-un ha desafiado repetidamente una resolución de la ONU que prohíbe toda actividad nuclear y de misiles.

Los dos lanzamientos anteriores fueron de misiles de mediano a largo alcance.

El primero fue descrito por Pyongyang como un nuevo tipo de cohete capaz de transportar una ojiva nuclear. Fue la demostración del arma de mayor alcance hasta ahora.

Pyongyang ha estado probando sus misiles a un ritmo sin precedentes y los expertos creen que está avanzando en el desarrollo de un misil balístico intercontinental capaz de llegar a Estados Unidos.

Corea del Norte dice que su programa de armas es necesario para contrarrestar la agresión estadounidense.

HOW JAPAN IS PREPARING FOR A NUCLEAR ATTACK

‘Few US voters realise that American troops in Japan or even California might be a target for a missile strike’

By: Gillian Tett

Earlier this month, I travelled to Tokyo, where I caught up with some Japanese friends. As we chatted about global affairs, one of them, Michiyo, revealed that her doctor husband had recently given her anti-radiation pills to carry in her handbag.

The reason? Not the leak of radioactive material that occurred at the Fukushima nuclear plant after it was hit by a tsunami six years ago. Instead, what worries Michiyo’s husband is North Korea.

In recent months, the secretive country has conducted an escalating series of missile tests, including one just last week. This has sparked fears among western intelligence services that Pyongyang could be close to acquiring an inter-continental ballistic missile with the ability to deliver nuclear warheads to places such as Japan, Guam, Hawaii or even California.

There are reports that North Korea has mastered several of the crucial stages for creating an ICBM: the ability to launch and guide a missile, create a nuclear warhead and then miniaturise it. Meanwhile tensions have risen between the unpredictable regime of Kim Jong-un and the (sometimes equally unpredictable) US president Donald Trump, prompting speculation that North Korea might try to direct a missile at a US base in Japan.

The Japanese government has responded by issuing guidelines for what to do in the event of a missile strike. Suggestions include sheltering in an underground shopping arcade, basement, concrete building or, if all else fails, under a table or in a cupboard in the centre of the house, for at least two days, presumably to let any fallout from an attack settle down.

Many Japanese households have duly been stocking up on food, water, batteries, nappies (which might be needed to stand in for toilets, my friends solemnly told me) and those anti-radiation tablets. Company executives have prepared backup offices, financial institutions have spread money in different locations and utility services and schools have conducted drills. Indeed, while I was in Tokyo the trains briefly shut down following one of North Korea’s missile tests.

I hope that in a few years’ time these drills will simply look like an overreaction, a quaint historical curiosity, comparable to moves that the US government took to prepare for a Soviet nuclear attack during the cold war (back then people were also told to hide in a cupboard).

Nobody has a clue whether Pyongyang could or would ever dare fire a missile, or whether the Americans possess the ability to intercept it. Foreign policy observers still think an attack is very unlikely. But what is striking about all these preparations in Japan is not that they are occurring but that so few people in the US or Europe know about them. That is partly because the North Korean threat has largely stayed below the surface, at least in the public consciousness. 

One of the US’s biggest business groups, for example, polls its members each quarter about how company executives perceive geopolitical risks. Until very recently, a minute proportion of companies considered North Korea to be the most serious threat; instead, the dominant focus for concern was so-called Islamic State.  

Yet the pattern is changing. In the most recent survey, compiled this month, North Korea is ranked as the number one threat, above Isis. But most voters still know little about the country, and few realise that American troops in Japan or California might be a target.

A second reason why the preparations are not better known is that the Japanese public are themselves notably stoic. If the White House had told voters to buy supplies for a possible missile attack, the news would have ricocheted around the world. But most Japanese have simply acquired supplies as suggested and got on with their lives with a minimum of fuss.

That might seem peculiar to Americans. But Japanese people have lived with the knowledge that North Korea could fire a missile towards them for many years. And, of course, they have also weathered earthquakes. Confronting a possible missile threat looks scary but it’s not necessarily any more frightening than the knowledge that more than 33,000 people are killed by gunfire each year in the US. Cultural perceptions of danger vary.

But the next time I see Trump talk or tweet about North Korea, I will think about my friend’s anti-radiation pills. The fact that she is now carrying them in her wallet is a tragic sign of how peculiar the world has become. I just hope that she will never even have to think about using them.

NORTH KOREA STARES INTO THE ABYSS

By : George Friedman

The U.S. Navy has announced that the USS Nimitz will leave Bremerton, Washington, on June 1, for the Western Pacific. This is the third carrier battle group to be sent to the region – enough to support a broader military mission – and it will take roughly a week to get to its station, after which it will integrate with the fleet.

So here’s the situation: Soon the United States will have its naval force in waters near North Korea. It already has strategic bombers in Guam, and it already has fighter aircraft in Japan and South Korea.

The United States is preparing for war, which is still several weeks away – if indeed war actually breaks out. Between now and then, diplomacy will intensify. The international community will demand that North Korea abandon its nuclear program and allow inspectors to monitor the destruction of missiles, fissile material and reactors. And after Pyongyang refuses to heed those calls – which it probably will – the United States will have to decide whether it will strike.

Importantly, the United States doesn’t want to strike North Korea. (It hasn’t even wanted to meddle in peninsular affairs all that much since the Korean War.) All wars are complicated – and only those who ignore the history of war would think otherwise – but striking North Korea would require a particularly long and complicated air campaign, not to mention some potential ground operations.

And yet the United States is under pressure to strike. The pressure comes from the thought of a world in which North Korea has deliverable nuclear weapons. Pyongyang may not intend to use them or sell them right now, since its ultimate goal is survival, and having nuclear weapons deters attacks. But no one knows what North Korea will do in a decade or two. What North Korea does then may be determined by a person no one yet knows and whose behavior cannot be predicted. The U.S. government is thinking about what North Korean leaders intend to do later as much as it is thinking about what they might do now.

This picture released by North Korea’s official Korean Central News Agency shows a test launch of the ground-to-ground medium long-range strategic ballistic rocket Hwasong-12. STR/AFP/Getty Images

Not knowing what it might do later is what really scares the U.S. North Korea has been willing to sell technologies to third parties in the past. Perhaps its program will be used only for deterrence for generations. But what’s to stop Pyongyang from selling technologies to third parties, even if North Korea itself never intends to launch an attack against the United States? The United States can try to detect such sales, but detecting all of them is very difficult; there are plenty of ways to deliver these weapons, and there are plenty of people who would be willing to buy them.

The United States may be convinced, therefore, that the next few weeks will be its last opportunity to keep any of this from happening. More broadly, Washington may be convinced that this is a turning point for U.S. policy, shifting from a strategy in which it knows North Korea has no nuclear weapons to one in which it struggles to make sure North Korea doesn’t do something to hurt U.S. interests.

However uncertain war can be, an unmolested North Korean nuclear program may be even more uncertain. Alternatively, the United States is also more likely to make economic concessions and political guarantees to North Korea than perhaps it once was. Either way, Washington can’t allow nuclear weapons to exist, and it can’t allow Pyongyang to determine what happens.

But, ironically, it is to some degree up to Pyongyang to see what happens next. The North Koreans calculated that now was the moment to make the rush from an advanced program to deliverable weapons. Their reasons for doing so are unclear. Perhaps it is because of the turmoil in Washington.

Perhaps they knew they would inevitably cross the red line and decided to go for broke. Whatever the reason, they are now in a position where they probably can’t capitulate even if they wanted to. Kim Jong Un has made the nuclear program the foundation of his – and therefore the government’s – legitimacy. The country has little else to offer other than this symbol of power. If he were to capitulate, Kim would appear weak, and that is something he simply cannot afford.

If the goal of acquiring nuclear weapons is to inoculate the government against foreign threats, then abandoning the goal necessarily invites internal threats. Kim sits on top of a complex bureaucracy, which is terrified of him but also terrified of instability. Kim has to believe that even if the regime survives, he might be removed from power. And for all that is said about North Korea’s reclusion, Kim could not give in to the United States without his people knowing. Some news does filter into the North from South Korea, and even if the U.S. agreed to keep the capitulation secret, keeping political secrets in Washington is difficult, and never harder than today.

Kim has only bad choices, but for a few reasons, the least bad choice for him is war. First, it’s possible that the U.S. is bluffing and that nothing will come from this episode. Second, it’s possible that China or Russia will intervene to save him, though neither country is up to the task of fighting a conventional war with the U.S. (Neither country is all that interested in saving the Kim government either.) It’s possible that South Korea, afraid for Seoul, will block the attack. It’s possible that Japan will get involved. It’s possible that the U.S. attack will fail. It’s possible that the nuclear program is further along than everyone thinks and that that will deter an attack.

Barring this last scenario, it seems to me that the U.S. cannot refuse to go to war unless North Korea capitulates. North Korea cannot capitulate. Neither country wants to go to war, but neither can accept what is happening without war. My best guess is that North Korea currently does not have a weapon that could be readily delivered by stealth, and it would have to be demonstrated before an attack began, not after. I think we are looking at the prospect of a few weeks of quiet diplomacy and noisy public threats that will lead to war.

The signs are all there. The United States does not deploy the force it has deployed unless it’s serious.

Such was the case in Desert Storm, in Kosovo, and in the 2003 invasion of Iraq. By sending the USS Nimitz, the U.S. is telling North Korea, in no uncertain terms, that war is approaching. Now, it is North Korea’s move. Pyongyang had been quiet for a few days until firing a missile on May 28, which landed in the Sea of Japan. Still, you have to consider that North Korea is staring down into the abyss.

QUANTS AND THE QUIRKS

IS EFFICIENT-MARKET THEORY BECOMING MORE EFFICIENT?

Theory is changing traders’ behaviour. And vice versa

By : The Economist

Build a better mousetrap, the saying goes, and the world will beat a path to your door. Find a way to beat the stockmarket and they will construct a high-speed railway. As investors try to achieve this goal, they draw on the work of academics. But in doing so, they are both changing the markets and the way academics understand them.

The idea that financial markets are “efficient” became widespread among academics in the 1960s and 1970s. The hypothesis stated that all information relevant to an asset’s value would instantly be reflected in the price; little point, therefore, in trading on the basis of such data.

What would move the price would be future information (news) which, by definition, could not be known in advance. Share prices would follow a “random walk”. Indeed, a book called “A Random Walk Down Wall Street” became a bestseller.

The idea helped inspire the creation of index-trackers—funds that simply buy all the shares in a benchmark like the S&P 500. From small beginnings in the 1970s, trackers have been steadily gaining market share. They command around 20% of all assets under management today.

But the efficient-market hypothesis has repeatedly been challenged. When the American stockmarket fell by 23% in a single day in October 1987, it was hard to find a reason why investors should have changed their assumptions so rapidly and substantially about the fair value of equities. Robert Shiller of Yale won a Nobel prize in economics for work showing that the overall stockmarket was far more volatile than it should be if traders were adequately forecasting the fundamental data: the cashflows received by investors.

Another example of theory and practice parting company is in the foreign-exchange market.

When Sushil Wadhwani left a hedge fund to join the Bank of England’s monetary policy committee (MPC) in 1999, he was taken aback by the way the bank forecast currency movements. The bank relied on a theory called “uncovered-interest parity”, which states that the interest-rate differential between two countries reflects the expected change in exchange rates. In effect, this meant that the forward rate in the currency market was the best predictor of exchange-rate movements.

Mr Wadhwani was surprised by this approach, since he knew many people who used the “carry trade”, ie, borrowing money in a low-yielding currency and investing in a higher-yielding one. If the bank was right, such a trade should be unprofitable. After some debate, the bank agreed on a classic British compromise: it forecast the currency would move half the distance implied by forward rates.

Many who work in finance still believe they can beat the market. After all, there was a potential flaw at the heart of the efficient-market theory.

For information to be reflected in prices, there had to be trading. But why would people trade if their efforts were doomed to be unprofitable?

One notion, says Antti Ilmanen, a former academic who now works for AQR, a fund-management company, is that markets are “efficiently inefficient”. In other words, the average Joe has no hope of beating the market. But if you devote enough capital and computer power to the effort, you can succeed.

That helps explain the rise of the quantitative investors, or “quants”, who attempt to exploit anomalies—quirks that cannot be explained by the efficient-market hypothesis. One example is the momentum effect: shares that have outperformed the market in the recent past continue to do so. Another is the “low-volatility” effect: shares that move less violently than the market produce better risk-adjusted returns than theory predicts.

A new breed of funds, known in the jargon as “smart beta”, have emerged to exploit these anomalies.

In a sense these funds are simply trying to mimic, in a systematic way, the methods used by traditional fund managers who interview executives and pore over balance-sheets in an attempt to pick outperforming stocks.

Whether these funds will prosper depends on why the anomalies have been profitable in the past.

There are three possibilities. The first is that the anomalies are statistical quirks; interrogate the data for long enough and you may find that stocks outperform on wet Mondays in April.

That does not mean they will continue to do so.

The second possibility is that the excess returns are compensation for risk. Smaller companies can deliver outsize returns but their shares are less liquid, and thus more difficult to sell when you need to; the firms are also more likely to go bust. Two academics, Eugene Fama and Kenneth French, have argued that most anomalies can be explained by three factors: a company’s size; its price relative to its assets (the value effect); and its volatility.

The third possibility is that the returns reflect some quirk of behaviour. The outsize returns of momentum stocks may have been because investors were slow to realise that a company’s fortunes had improved. But behaviour can change; Mr Wadhwani says share prices are moving more on the day of earnings announcements, relative to subsequent days, than they were 20 years ago. In other words, investors are reacting faster. The carry trade is also less profitable than it used to be. Mr Ilmanen says it is likely that returns from smart-beta factors will be lower, now that the strategies are more popular.

If markets are changing, so too are the academics who study them. Many modern research papers focus on anomalies or on behavioural quirks that might cause investors to make apparently irrational decisions. The adaptive-markets hypothesis, devised by Andrew Lo of the Massachusetts Institute of Technology, suggests that the market develops in a manner akin to evolution. Traders and fund managers pursue strategies they believe will be profitable; those that are successful keep going; those that lose money, drop out..

The results can be dramatic. In August 2007 there was a “quant quake” as computerised strategies briefly stopped working; the suspicion was that one manager was offloading his positions after taking losses in the mortgage market. The episode hinted at a danger of the quant approach: if computers are all churning over the same data, they may be buying the same shares. At the moment American growth stocks, such as technology companies, are as expensive, relative to global value stocks, as they were during the dotcom bubble (see chart).

What if the trend changes? No mathematical formula, however clever, can find a buyer for a trader’s positions when everyone is panicking.