N. Korea Pissing Everyone Off, Stocks Give Back Yesterday's Rebound

Source: The Week

Kim Jong-Il pissed off the world again last night as North Korea fired 100 rounds of artillery at Yeonpyeong Island in the Yellow Sea killing two soldiers and wounding 16 soldiers, three civilians. South Korea responded by shooting 80 rounds back. This sort of provocation always seems to lead me to some sort of existential exasperation where I think: "Why does this guy still exist? Can't he just not be anymore?" His people live in desolate poverty yet he remains committed to living far outside developed society. Even Castro has admitted to making mistakes in his communist path and has endorsed his brother's reforms.

Coupled with the increasing uncertainty and fears of contagion surrounding the Irish bailout, the escalation in the Korean Peninsula has the market giving back yesterday's afternoon rebound. Easily overshadowed was the positive news of a GDP reading revised higher showing 2.5% for the third quarter instead of the advance report of 2%. Sure there's plenty to be pessimistic about but are consistently seeing slow and steady improvement across most metrics.

One positive is a look at the new economy as TechBook put out a post stating that recent sales in shares of privately-held Facebook value the company at $35 billion. Remember, Facebook was founded in 2004 and has received $836 million in funding. Assume all the funding came up front (which it didn't) and the return works out to a 70% annual growth rate. The quick-minded using the rule of 70 will see that the company has been roughly doubling every year. Amazing how these stories of truly life-changing innovations and unprecedented adoption rates get lost in the shuffle of macroeconomic fears.


Brandon R. Rowley
"Chance favors the prepared mind."

*DISCLOSURE: I wish I was long Facebook.