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Kim Jung Un is a brutal leader. Few would dispute that he rules one of the most repressive and inhumane regimes on the planet. But is he mentally unstable? Or just ruthless? The US seems to have decided the former is true, but the latter could be more likely. Judging by his actions over the past year, Mr Kim knows exactly what he is doing.

Philip Stephens argues in his column that the louder Donald Trump shouts about the North Korean leader’s instability, the more plausible his claims that a nuclear programme is a necessary insurance policy. The two presidents have traded petty insults but Philip argues that Mr Kim now has everything he wants. He has outsmarted Mr Trump at almost every turn.

There is not, however, any good ending to this stand-off and the risks of conflict remain high. North Korea could easily overplay its hand. The US could launch a pre-emptive attack. But there are no good military options. China will not want to risk the collapse of the regime through sanctions. So for now, it looks as if Pyongyang will get its missiles and all of the geopolitical risks that entails.

Regime change at the Fed
Gillian Tett says Jay Powell, the new chair of the US Federal Reserve, does not seem like a natural dove and may not ride to the rescue if equities tumble. As Mr Powell once put it, it’s “not the Fed’s job to stop people from losing money.”

The republic of Australia
I argue that instead of building closer ties with Brexit Britain, Oz is more likely to become a republic — particularly after the Queen exits the world stage. But the Commonwealth is looking for a new leader and salvation may be at hand if Prince William steps in.

Productivity in the bedroom 
Marco Hafner argues that the UK needs to get more sleep in order to improve its productivity. Research shows that thousands of working days are lost due to insufficient sleep. More than six hours of sleep might be what the country is dreaming of.

Best of the rest

The Truth About the Florida School Shooting — David Leonhardt in The New York Times

How to understand market volatility — Thomas Philippon in Les Echos

The DUP is a party that loves power but hates responsibility — Katy Hayward in The Guardian

Trump’s Style Is His Substance — Bobby Jindal in the Wall Street Journal

Why we shouldn’t try the jihadi ‘Beatles’ in Britain — The Spectator editorial

What you’ve been saying

Universal basic income would enhance freedom and cut poverty— letter from Guy Standing:

Most believe the BI should be clawed back from the rich in tax. This is administratively easier, more equitable and efficient than targeting by means-testing. The latter has high exclusion and inclusion errors, low take-up and poverty traps, inducing bureaucrats to use intrusive behaviour tests. Mr Goldin claims that a BI is “unaffordable and leads to ballooning deficits”, adding it would be paid by “reallocation of resources from other areas such as health and education”. You cannot have it both ways. Anyhow, BI could be paid by cutting regressive subsidies, including the 1,156 tax reliefs that cost the exchequer £400bn a year.

Comment from rm on It is time the UK proposed a post-Brexit trade relationship:

What reforms and regulations can she possibly mean that will make such a dramatic improvement in UK competitiveness? It seems we are back to the Labour market, presumably by abandoning restrictions on the working week and the ability to hire and fire. Again, we look to the Germans. Are their, more restrictive, labour markets really stopping them from trading across the world? I think not. What can it be then that is allowing them to grasp these opportunities while we in the UK apparently can not?

Planetary techno-fixes will not solve all our problems— letter from Robin Russell-Jones:

Richard Branson is another entrepreneur whose obsession with space travel is combined with concern about climate change; but not every problem is amenable to planetary techno-fixes. The solution to climate change is closer to home and requires a huge investment in renewables and energy conservation, combined with a carbon tax that reflects the damage that fossil fuels impose on human health and our environment. Virgin Galactic or building colonies on Mars are vainglorious projects with little purpose and a huge carbon footprint.

Today’s opinion

Can anyone halt Australia’s march towards a republic? British perceptions of the Commonwealth country are hopelessly outdated

How to read the regime change at the US Federal Reserve It would be a mistake to presume the bank will ride to the rescue if equities tumble

Eurozone members must be serious about risk-sharing This is the only way to address the imbalances inside the single currency

Britain’s productivity problem begins in the bedroom If workers slept at least six or seven hours a night, it could add £24bn to economy

FT Alphaville: Guest post: Moneyness and Term Premia

EM Squared: EM bond buying ‘sows the seeds for future developed world crises’ Voracious appetite for fixed income ‘increases risk of debt binges’

Kim Jong Un gives Donald Trump a lesson in diplomacy Strip out the noise, and the North Korean leader has outsmarted his opponent at every turn

Instant Insight: Jacob Zuma’s luck has finally run out in South Africa Tenure as president has done untold damage to party and nation

FT View

FT View: Kuroda deserves another term as head of the Bank of Japan Inflation remains elusive, but monetary easing was the right policy

FT View: For South Africa, the hard work begins now Ramaphosa needs to act swiftly to set the country back on course

The Big Read

The Big Read: German military: combat ready? Its troops are now fighting and dying across the world, but they lack resources

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