Korean Border Clash

On High Alert

North and South Korea exchanged fire this morning on their disputed Yellow Sea border. As tensions remain high on mutual threats of escalation, Wall Street Greek Global Affairs Columnist Daniel Padovano offers our readers his critical insights.

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Korean Border Clash

South Korea reported that North Korean artillery attacks began at 2:30 PN local time. The border clash occurred on Yeonpyeong Island located about 80km west of the port of Inchon. Early reports indicate that over 200 artillery shells have landed on the island, killing two South Korean marines and wounding about 20 more people.

The attack comes in the middle of a nine-day military exercise involving all branches of South Korea's military and the United States. North Korea has issued notices to South Korea to halt this aggressive posturing. (North Korean requests like this precede most South Korean military exercises). In this instance, North Korea claims that this exercise is designed to mask an attack against the North's nuclear facilities.

Today's artillery attack has escalated quickly. South Korea's Joint Chiefs are in session and earlier today, the South Korean air force was scrambled. South Korea's military remains at its highest alert level. The main concern is North Korea's artillery batteries surrounding Seoul, just 50km away.

As of yet, fighting has not spread, although North Korea claims that it will continue attacks.

Yeonpyeong Island has about 1,300 residents. Most of the residents are South Korean military personnel. Civilians residents are largely fishermen. The island is part of a chain of islands off both Korea's western coasts. The islands are in the disputed border area between the Northern Limit Line (DMZ). Previous incidents on or near Yeonpyeong include a 1999 incident resulting in the deaths of 6 North Korean soldiers. In March 2010, the South Korean warship Cheonan was sunk by an alleged North Korean torpedo. 46 South Korean sailors died in that attack.

The current spate of attacks come on the heels of the South Korean admission that the "Sunshine Policy" aimed at reuniting the two countries has failed, increasing tension over North Korea's expanding nuclear program and the elevation of Kim Jong Un (the son of Kim Jon Il) to high rank. King Jong Un is rumored to be Kim Jong Il's successor.

North Korea may be striking out to remind the South, China, the U.S. and Russia that it is not to be trifled with or ignored. North Korea may feel itself vulnerable, as it faces increasing pressure from the international community regarding its nuclear program and possible domestic famine.



Article Interests: Korea Fund (NYSE: KF), Korea Electric Power (NYSE: KEP), Korea Equity Fund (NYSE: KEF), The Korea Fund (Nasdaq: XKFDX), iShares MSCI South Korea Index (NYSE: EWY), Samsung (Korea: 005930.KS), Posco (NYSE: PKX), Hyundai Motor (OTC: HYMTF.PK), Shinhan Financial (NYSE: SHG), Lg Chem (OTC: LGCEY.PK), LG Electronics (OTC: LGERF.PK), Hynix Semiconductor (Korea: 000660.KS), Northrop Grumman (NYSE: NOC), Raytheon (NYSE: RTN), Alliant Techsystems (NYSE: ATK), Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NYSE: IWM, NYSE: TWM, NYSE: IWD, Honeywell (NYSE: HON), General Dynamics (NYSE: GD), Rockwell Collins (NYSE: COL), Goodrich (NYSE: GR), L-3 Communications (NYSE: LLL), SAIC (NYSE: SAI), FLIR Systems (Nasdaq: FLIR), EMBRAER (NYSE: ERJ), Spirit Aerosystems (NYSE: SPR), BE Aerospace (Nasdaq: BEAV), TransDigm Group (NYSE: TDG), CAE (NYSE: CAE), Hexcel (NYSE: HXL), Esterline Technologies (NYSE: ESL), Teledyne Technologies (NYSE: TDY), Curtiss-Wright (NYSE: CW), HEICO (NYSE: HEI), Triumph Group (NYSE: TGI), Orbital Sciences (NYSE: ORB), AAR Corp. (NYSE: AIR), Kaman Corp. (Nasdaq: KAMN), AeroVironment (Nasdaq: AVAV), Smith & Wesson (Nasdaq: SWHC), DigitalGlobe (NYSE: DGI), GenCorp (NYSE: GY), Hawk (AMEX: HWK), LMI Aerospace (Nasdaq: LMIA).

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