Lusitania...

North Korea operating from the only rule-sets it knows. It is convenient that our Secretary of State is in China at the moment discussing "economic issues and Europe".

As I have stated before, China may surprise everyone by playing "peacekeeper" in this region and either invade North Korea or negotiate an armistace.

Asian stocks and the won plunged to the lowest in 10 months after a report that North Korean leader Kim Jong Il ordered his military to prepare for combat last week. The euro weakened and commodities declined on concern Europe’s debt crisis may spread.

The MSCI Asia Pacific Index dropped 2.2 percent to 109.82 as of 12:09 p.m. in Tokyo, set for its lowest close since July 30. Standard & Poor’s 500 stock index futures lost 1.3 percent. The won plunged to a 10-month low and the nation’s stock benchmark slumped 3.4 percent. The euro fell for a second day against the yen and the dollar. Crude oil slipped below $70 a barrel in New York and copper declined for the first day in four.

Tensions on the Korean peninsula ratcheted higher as the North’s military was placed on alert last week, the North Korea Intellectuals Solidarity group reported on its website, citing a person in the communist country. The U.S. yesterday announced plans to conduct joint anti-submarine exercises with South Korea after the March 26 sinking of one of the South’s warships cost 46 lives. Spain’s financial sector “remains under pressure,” the International Monetary Fund said yesterday in urging the nation to do more to overhaul its ailing banks.