Market Morning: Kim, Trump Getting Chummy, Seattle Backs off Head Tax, Iraq Balks at Saudis

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Kim, Trump Now BFF as Trump Shows Kim Something in His Limo

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How could we not start off with this? In a stunning reversal to what started as a White House administration bent on antagonizing North Korea and its leader Kim Jong Un by referring to him as “Rocket Man” and both sides threatening war, Kim and US President Donald Trump shook hands today and flattered each other at a historic summit in Singapore. Kim and Trump first met alone, with only their interpreters in the room, and then invited senior staff. The meeting reportedly culminated in a document aimed at the denuclearization of the entire Korean peninsula.

SEE: Crypto Daily Roundup: June 11

Trump said he feels a “very special bond” with Kim, and in characteristic Trumpesque style, he used the word “very” a very lot in describing how very well the very good meeting went. He said he would even invite Kim to the White House, using the word “absolutely” about his intention to invite him. Then, being a couple of guys, Trump showed Kim something in his car. Speculation abounds as to what that might have been, but it was probably “tremendous”.

As for Kim, without whose insistence and humility post Trump cancelation this meeting would never have happened, he was reportedly beaming. “I think the entire world is watching this moment. Many people in the world will think of this as a scene from a fantasy…science fiction movie,” he said through a translator. Indeed. Maybe they will sit down together and watch The Interview starring Randall Park as Kim Jong Un, with some popcorn.

What to do: Find a way to invest in North Korea. If this summit is more than just a show, the last bastion of communism in the world is about to see some capitalism accompanied with a very big boom. South Korea is a good proxy for now, since many of their companies will likely invest there if Kim follows through on his peaceful intentions. Related tickers: (NYSEARCA:EWY) (NYSE:LPL) (NYSE:KB) (NYSE:KT)

Also In Asia, US Unveils Taiwan Embassy, Angering China

Things aren’t going as well regarding US-Chinese relations however. A $256 million US representative office was opened in Taiwan’s capital Taipei yesterday. “The friendship between Taiwan and the U.S. has never been more promising. The great story of Taiwan-U.S. relations remains to be filled with the efforts of those that will one day occupy this building,” said Taiwan president Tsai Ing-wen. The Chinese authorities in Beijing, who consider Taiwan property of China, are not happy about this. “The mainland must continue to build up its deterrence against Taiwanese authorities, making them know that the U.S. cannot be their savior,” said an editorial in the Chinese Global Times about the opening of the new office.

What to do: Chinese/US relations have been on the downswing lately, which probably means more trade tensions in the near future at the very least. This means rising consumer prices and plummeting US retail stocks if Chinese imports get cut or tariffed further.

Amazon, Starbucks, Successfully Fend Off $275 Head Tax On Employees?

The Seattle born-and-bred big boys Amazon (NASDAQ:AMZN) and Starbucks (NASDAQ:SBUX) may have successfully fended off a tax on employing people. Despite unanimous passage of the tax a few months back, the Mayor of Seattle Jenny Durkan released a characteristically vague statement about coming together as a city, and as importantly, as a state, and region to solve the homelessness problem instead of taking the money from Amazon and Starbucks, and her intention to repeal the tax. “It is clear that the ordinance will lead to a prolonged, expensive political fight over the next five months that will do nothing to tackle our urgent housing and homelessness crisis. These challenges can only be addressed together as a city, and as importantly, as a state and a region.”

Critics say the tax would have hurt low-skilled workers most in danger of becoming homeless the most, as employing them at $275 a head would not be worth the bother, aggravating the homelessness crisis politicians claim the tax will solve. Somehow.

Tesla the Flamethrower Hits eBay, Prices Soar with the Flames

Like a scene straight out of Spaceballs, Tesla CEO Elon Musk’s flamethrower, manufactured by the Boring Company, hit eBay (NASDAQ:EBAY) at sky high resale prices. Clearly the retail price for the coveted flamethrower was set way below the market clearing price, creating a shortage, and now the market is raising it to equilibrium. Meanwhile, Tesla (NASDAQ:TSLA) is struggling to make quota on Model 3 manufacturing targets and 25% of Model 3 preorders have reportedly been refunded. If Musk needs to do another capital raise however, he can probably just sell a million or two autographed flamethrowers on eBay. Incredibly, the government hasn’t gotten around to regulating flamethrowers just yet, but the window is probably a small one. Watch out for Flamethrower Control legislative initiatives or a flamethrower tax, possibly pioneered by Seattle to alleviate its homelessness problem.

Iraq Upset About Saudi Arabia’s Intention to Increase Oil Output

Iraq doesn’t agree with Saudi Arabia’s stated intention to increase oil output (NYSEARCA:USO). Iraq now joins Iranian and Venezuelan opposition to the output increase, Iran probably because they are sanctioned, and Venezuela because they are collapsing entirely and can’t increase output even if they wanted to. Iraq, meanwhile, is having serious problems with its elections, with votes getting mysteriously burned before they are counted and other such shenanigans. It’s democracy, Middle East style.




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