Asian markets are being roiled by fear of North Korean aggression after it sent a guided missile straight over Japan. Meanwhile, AsiaTimes, a website, today published an article by Bill Gertz in which he argues that “the two recent collisions between US Navy warships and commercial ships have raised the specter that China was behind the ‘accidents’, using electronic means to disrupt or fool radar or navigation systmes into creating deliberate collisions.” He cites unnamed military experts and adds “there are signs the People’s Liberation Army is preparing to use exotic electronic attacks in a further conflict.” Gertz is an author (of a half dozen books, the most recent of which is The China Threat) and national security columnist for the conservative Washington Times.

Right now stock markets are digesting the Houston hurricane and there are moves that one might not have anticipated. The latest horror from the post-hurricane deluge is that two reservoirs

19 miles from downtown burst banks and the levee south of the city has been breached by floodwaters. Six 

?more Houston suburbs are now in the flood zone and their residents are being told to evacuate their homes.

Of course the insurance, energy, and aviation industries are taking a hit. But so is Mexico. Its peso is down more than 1% against the US dollar, the biggest drop in several months, a reaction to lower crude oil prices, according to Eduardo Garcia, writing from Mexico City. Of course new Trump threats to make Mexico pay for El Muro (despite his having told his Mexican counterpart that he would settle for a fake payment) hardly helps.

The other threatened Nafta country, Canada, a major energy producer, is also suffering stock market drops—except for gold miners.

One exception to the Asian selloff is Thailand whose SET rocketed up nearly 2% today with the 2^ndhighest volume ever recorded, writes Paul Renaud from Phuket. The Thai baht also rose. He attributes the move to the long-term destabilization of Thai politics by populists having ended “with Ms Yungluck fleeting the country as did her brother Thaksin Shinawatra.” He adds: “political factions will be tamer and more humble now”, predicting a “more stable era and a more confident stock market.”

Eduardo edits sentidocomun.com.mx and Paul edits thaistocks.com. We exchange news and ideas with them both.

More today from around the globe including two corporate results and news from Brazil, Colombia, Canada, Mexico,India, South Africa, Kenya, Israel, Australia, Spain, Finalnd, Hong Kong, Britain, Ireland, and Switzerland.

Banking and Finance

*Bank of Nova Scotia reported its results today and as anticipated by Stefan Redlich, who lets readers of seekingalpha.com know his name, it has raised its dividend. However, because of worries about Hurricane Harvey, Nafta and North Korea, the BNS shares fell 1% in Canada. It reported net income under IFRS of C$2.103 mn, or 1.66/sh up from C$1,959 bn or 1.54/sh a year ago, a gain in loonies of 12%.. Both beat consensus analyst forecasts. Its YTD net hit $6.173 bn vs 2016 level of $5.357 mn. Its EPS YTD came to $4.85 vs 4.20. Its quarterly return on equity was flat at 14.8% but its YTD level was 14.7% , up from only 13.6% in the 2017 9 mos.

Domestic business in Q3 grew by 12% to $1.05 bn and its international side (why we own Scotiabank) by 16% to $614 mn. Its largest markets in Latin America, Mexico, Chile, Peru, and Colombia did less well partly because of higher taxes than smaller markets where its cost-cutting was more efficient, and where it booked investments from associated companies. Colombia also saw a drop in retail business. Its global banking business grew only 5% as revenues fell, hitting C$441 mn, off sharply from Q4 2016, and Q1-2 this year. This part of the accounts is for investment banking around the world from corporate loans. Its investment securities business produced a loss.