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After Death of North Korea’s Leader, Sell This: Kelly

Monday, 19 Dec 2011 | 1:57 PM ET

A sudden turn of events usually presents opportunities for traders, and on Monday North Korea’s Kim Jong-il died very suddenly.

As you may know the 69 year old autocrat, who was also called ‘Dear Leader’ suffered a heart attack while on a train trip reviewing his nation’s factories farms and military bases.

Kim Jong un, Kim Jong il's youngest son, was named by North Korea's official news agency KCNA as the "great successor" to his father, which lauded him as "the outstanding leader of our party, army and people".

BK Looks to Short South Korea
Sharing perspective on how the death of North Korea's Kim Jong-Il will impact the markets, with Brian Kelly, Shelter Harbor Capital co-founder.

South Korea, still technically at war with the North, placed its troops and all government workers on emergency alert but Seoul's Defense Ministry said there were no signs of any unusual North Korean troop movements and President Lee Myung-bak called for people to carry on with their normal lives.

As we mentioned above, unrest of this magnitude often presents opportunity, and trader Brian Kelly says the play is sell the EWY – the ETF that tracks South Korea.

“The death of Kim Jong-il presents an element of uncertainty into South Korea’s economy,” he says. “Because South Korea is an export oriented economy any uncertainty is a problem."

Also "South Korea had been doing very, very well," which suggests the ETF was commanding a premium. But now investors will be less willing to pay as much of a premium.

All told, it should cause this ETF to go down.





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Trader disclosure: On Dec. 19, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Adami owns AGU; Adami owns MSFT; Adami owns NUE; Adami owns BTU; Adami owns C; Adami owns GS; Adami owns INTC; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU

For Steve Grasso
Stuart Frankel & Co and its partners own
Stuart Frankel & Co and its partners own ABX
Stuart Frankel & Co and its partners own APC
Stuart Frankel & Co and its partners own CSCO
Stuart Frankel & Co and its partners own CUBA
Stuart Frankel & Co and its partners own DVN
Stuart Frankel & Co and its partners own GERN
Stuart Frankel & Co and its partners own GM
Stuart Frankel & Co and its partners own HPQ
Stuart Frankel & Co and its partners own HSP
Stuart Frankel & Co and its partners own HSPO
Stuart Frankel & Co and its partners own MSFT
Stuart Frankel & Co and its partners own MU
Stuart Frankel & Co and its partners own NEM
Stuart Frankel & Co and its partners own NYX
Stuart Frankel & Co and its partners own PRST
Stuart Frankel & Co and its partners own RDC
Stuart Frankel & Co and its partners own UAL
Stuart Frankel & Co and its partners own XRX

For Brian Kelly
Shelter Harbor Capital is short UBS
Shelter Harbor Capital is short CS

Gregory Badishkanian
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of Polaris Industries, Carnival Corp.. This position reflects information available as of the prior business day.

Within the past 12 months, Citigroup Global Markets Inc. or its affiliates has acted as manager or co-manager of an offering of securities of Harley-Davidson Inc, Mattel Inc.

Citigroup Global Markets Inc. or its affiliates has received compensation for investment banking services provided within the past 12 months from Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp.

Citigroup Global Markets Inc. or its affiliates expects to receive or intends to seek, within the next three months, compensation for investment banking services from Harley-Davidson Inc.

Citigroup Global Markets Inc. or an affiliate received compensation for products and services other than investment banking services from Harley-Davidson Inc, Polaris Industries, Mattel Inc, Hasbro Inc, Carnival Corp. in the past 12 months.

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as investment banking client(s): Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp..

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, securities-related: Hain Celestial Group Inc, Harley-Davidson Inc, Mattel Inc, Hasbro Inc, Carnival Corp..

Citigroup Global Markets Inc. currently has, or had within the past 12 months, the following as clients, and the services provided were non-investment-banking, non-securities-related: Harley-Davidson Inc, Polaris Industries, Mattel Inc, Hasbro Inc, Carnival Corp..Analysts' compensation is determined based upon activities and services intended to benefit the investor clients of Citigroup Global Markets Inc. and its affiliates ("the Firm"). Like all Firm employees, analysts receive compensation that is impacted by overall firm profitability which includes investment banking revenues.

The Firm is a market maker in the publicly traded equity securities of Hain Celestial Group Inc, Whole Foods Market Inc, Mattel Inc, Hasbro Inc.

For Rajesh Ghai
ThinkEquity LLC makes a market in VMware, Inc., EMC Corporation and Microsoft Corporation securities; and/or associated persons may sell to or buy from customers on a principal basis.


For Peter Misek

Ticonderoga Securities LLC makes a market in JEF security. Ticonderoga Securities LLC, in its market making capacity, sells to or buys from customers the securities of this company on a principal basis.

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Dan Dicker
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Jeff Hirsch
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