Wash Shock Breaks Kospi 5,000 Barrier.

• It’s the Kevin Wash (Federal Reserve Chair nominee) effect. Originally a hawk, speculation grows he’s turned into a “hawk-dove” (hawk + dove). As forecasts emerge that rate cuts might be delayed, the dollar surged. The won-dollar exchange rate jumped to 1,464 won.
• Kospi and Kosdaq plummeted 5.3% and 4.4%, respectively. A sell-side circuit breaker was triggered. Samsung Electronics and SK Hynix fell 7.3% and 8.7%.
• Foreign investors sold over 2.5 trillion won in stocks, while retail investors net-bought 4.5 trillion won.
• Analysis points to hedge funds as the culprit. As gold and silver—traditional safe havens—crashed, margin calls flooded in. The quickest assets to liquidate were Asian equities, the theory goes. The claim is it’s a temporary liquidity issue unrelated to Korea’s market fundamentals.
• Related Link.

What Matters Now.

No Extension for Multiple Homeowners’ Tax Surcharge Delay.

• “How about stopping both the pro-real-estate speculation rhetoric and the anachronistic ‘pro-North’ framing?” Lee Jae-myung (President) posted again on X. His language grows increasingly sharp.
• Chosun Ilbo pointed out that of the 23 bills—including the LH Corporation Act revision to support the September 7 measures—only four have passed the National Assembly. A clear sign of supply policy stagnation.
• There were also reports that the average value of apartments owned by Blue House senior secretaries and advisors rose by 236.98 million won. Lee Yeon-hee (Democratic Party lawmaker) criticized it as “a classic frame-up: preconceived conclusion to sabotage the government, then cherry-picked data.”

Framing a “Moon Jae-in Season Two.”.

• Jang Dong-hyeok (People Power Party Leader) said, “It seems anger management is failing because housing prices aren’t under control—before blaming the public, perhaps look inward.” Song Eun-seok (People Power Party Floor Leader) called it “a threat to the market.”
• From the People Power Party’s perspective, the president’s repeated focus on real estate issues is unexpectedly welcome. The “do as I say, not as I did” card has surfaced: during Moon Jae-in’s five-year term, Seoul apartment prices rose 119%.
• Kim Jo-won (then-Chief of Staff to the President for Civil Affairs) also faced backlash for owning apartments in Gangnam and Songpa—he resigned after ignoring recommendations to sell one.
• Kang Yu-jeong (Blue House Spokesperson) stated, “The Blue House has no specific stance to share on its staff’s multiple-home ownership issues.”
• Related Link.

To Sell or Not to Sell: The Dilemma of 2.38 Million Multiple Homeowners.

• Hankyoreh analyzed, “No signs yet of a surge in panic selling.” The assessment is that they will wait to see the government’s move before making final decisions.
• If the capital gains tax surcharge deferral ends, they will have to pay 6–45% of their profits as taxes.
• Calls to open an exit route are also emerging. Park Won-gap (KB Kookmin Bank Senior Research Fellow) suggested, “When signing a contract to sell to a non-homeowner tenant, the deferral period could be extended until year-end, and exceptions to loan regulations for tenants could also be considered.” The idea is that this could become a win-win transaction: homeowners avoid the tax surcharge, and tenants secure their own homes.

Deep Dive.

“Merger Is Treason” — The Words Have Been Spoken.

• Lee Eun-ju (Democratic Party Supreme Council Member) said this to Jung Chung-rae (Democratic Party Leader). She also remarked, “There cannot be two suns under one sky.”
• “The political essence of this issue is that in the early days of a presidency with strong executive power, the number two has attempted to shift the narrative and frame the game—expressing a desire to seize party leadership and presidential ambitions.”
• The Hankyoreh assessed, “They have started a civil war.”
• Hwang Myeong-seon (Democratic Party Supreme Council Member) said, “I break into a cold sweat wondering if only the president is sprinting forward while the party leaves him isolated.” All are pro-Myung (Moon Jae-in) faction members.
• Jung Chung-rae stated, “If party members tell me to go, I will go; if they tell me to stop, I will stop.”
• In an editorial, the Kyunghyang Shinmun pointed out, “They must seriously reflect on whether they are descending into a power struggle of their own making.”
• Related Link.
• Related Link.

Kim Min-seok: “The Merger Process Must Be Democratic.”.

• Kim Min-seok (Prime Minister), rumored to be eyeing the Democratic Party leadership, held a press conference.
• Amid a barrage of questions about his conflict with Jung Chung-rae, he obliquely responded, “We must adhere to principles and processes—procedures are as important as outcomes.”
• He repeatedly emphasized he would not run for Seoul mayor. When asked if he would run for party leader in August, he only said, “As someone who grew up in the Democratic Party, I mentioned it as a politician’s romantic ideal.”
• Related Link.

“You, Come Out,” “You Came Out, So What?”.

• This occurred during the People Power Party general meeting.
• The pro-friendship and pro-Yoon factions clashed intensely.
• When Kim Yong-tae (People Power Party lawmaker) suggested a vote of confidence in the party leader, other lawmakers shouted, “Put your seat on the line.”
• One claim even emerged: “The Han Dong-hoon bulletin board incident destabilized Yoon Suk-yeol’s government operations, influencing the declaration of martial law.”
• Jang Dong-hyeok (People Power Party Leader) stated, “We will investigate and resolve this.” He emphasized, “The issue isn’t merely inappropriate comments—it’s the manipulation of party members’ opinions that’s critical.”
• Oh Se-hoon (Seoul Mayor) remarked, “Concerns that the ‘Jang Dong-hyeok risk’ could overshadow the local elections are very significant.”
• Related Link.
• Related Link.

People Power Party’s Recruitment Chief: Cho Jung-hoon.

• He is from the Transition Korea Party, a satellite party, and switched to People Power Party during the last general election.
• Cho Jung-hoon (People Power Party lawmaker) clashed with Han Dong-hoon (former People Power Party leader) and even argued, “Rejecting the impeachment is the best option.”
• Appearing on Ko Sung-kuk TV, he also said, “Since Ko Sung-kuk is a ‘special-special-special’ party member, I will serve him well.”

Is the Public Land Concept Justified?

• Cho Kuk (Revolutionary Party Leader) emphasized, “The public land concept is the fundamental remedy to dismantle the real estate republic.” He also formed a legislative task force. Pro-Roh and pro-Moon figures such as Lee Jeong-woo (former Blue House Policy Chief) and Kim Yeon-myeong (Chung-Ang University Professor) joined.
• Within the Democratic Party, voices claim, “Without implementing the public land concept, merger discussions are impossible.” Lee Eun-ju (Democratic Party Supreme Council Member) even remarked, “Are we proposing socialism?”
• Related Link.

Another Take.

“Touch Koreans and Perish,” Post Deleted.

• Lee Jae-myung (President) posted in Khmer on X: “Does it sound empty? South Korea does! Until the end.”
• Cambodian media criticized, “The South Korean president has stigmatized all of Cambodia as a den of criminal groups,” and the Cambodian government summoned their ambassador to protest.
• After receiving the report, Lee deleted the post.
• Kang Yu-jeong (Blue House spokesperson) said, “It’s presumed to have been deleted because it was deemed sufficiently publicized.”
• Related Link.

‘Breadflation’: 10 Trillion Won Collusion Exposed.

• Why are Korean bread prices so high? A longstanding question has been partially answered.
• Prosecutors indicted 31 executives from flour producers like Daehan Flour Milling and Samyang Corporation, as well as sugar manufacturers including CJ CheilJedang.
• They are accused of colluding on flour price fluctuations from 2020 for six years.
• Flour prices rose 42%, and sugar prices surged 67%.
• A recording obtained by prosecutors included remarks like, “We must avoid contact to prevent detection by Gongseonsaeng (Fair Trade Commission).”

The Fix.

Can Startups Be the Breakthrough?

• The official unemployment rate is 2.8%. A near-full-employment state continues.
• But the reality? Unemployment is low, yet young people have no work.
• The expanded unemployment rate stands at 16.7%, revealing a stark gap. It includes job seekers who aren’t actively searching but have the ability and willingness to work, such as those preparing for employment or working part-time to sustain their job hunt—closer to the felt unemployment rate.
• Lee Jae-myung (President) said, “We must quickly transition to a startup-centered society and align our mindset accordingly.”
• Kim Jong-jin (Director of the Working Citizens Research Institute) warned, “In the current structure, increasing the proportion of startups could instead push young people into ruin.” Kim Yu-bin (Head of the Korea Labor Institute) noted, “Without accumulated skills or capabilities, the likelihood of failure is high, and pathways for restarting or switching careers after failure remain narrow.”
• Related Link.

Use Sugar Levy for Care and Healthcare.

• Levies are not taxes. Though similar, they can be collected and used effectively.
• Hong Seung-kwon (Seoul National University Professor) emphasized, “Levies are not punishment but investment,” calling it “a time for decisive action.”
• First, while there are concerns about regressive taxation, redirecting funds to support low-income health care can address health inequality.
• Second, though criticized for infringing on consumer choice, price distortion is more influenced by marketing than levies.
• Third, there is no need to fear industry contraction. Voluntary innovation is required.
• Fourth, actual significant reductions in consumption have been confirmed.
• Related Link.

ICYMI.

One Sheet of Kim Now Costs 155 Won.

• Two years ago, it was 103 won. Compared to 30 years ago, the price has more than tripled.
• The K-food boom has pushed kim exports past $1.1 billion. Global demand for kim has surged.
• Related Link.

All Three Battery Firms in the Red.

• LG Energy Solution, Samsung SDI, and SK On recorded operating losses of 122 billion won, 299.2 billion won, and 441.4 billion won, respectively, last year.
• As the U.S. ends electric vehicle subsidies, more battery supply contracts are falling through. In the secondary battery market, seven Chinese firms—CATL, Hi-Tium, EVE, and others—now hold a combined 75% market share.
• There are also forecasts that the energy storage system (ESS) market will boom. If the U.S. continues to shun Chinese products, there’s hope Korean companies might gain opportunities.

Texas Sentiment Flips.

• Texas has long been called the heartland of the Republican Party. It was where Donald Trump (U.S. President) won by a 17-point margin in the last election.
• Yet in a state Senate special election, the Democratic candidate won by a 14-point margin. A historic 31-point swing in voter sentiment within a year.
• Trump said, “I wasn’t involved, it’s a Texas local issue.”
• Related Link.

AI-Generated Books Rejected for Deposit.

• Books published in South Korea must obligatorily deposit two copies with the National Assembly Library and the National Library of Korea. However, the National Library of Korea rejected the deposit of 395 publications applied by Luminari Books—works suspected of being AI-generated.
• Since the National Library began accepting e-book deposits in 2016, compensation for e-book deposits was 12.13 million won over five months. By 2021, this increased to 234.92 million won annually. Last year, it reached 262.76 million won.
• A representative from the Korea Publishing Culture Association stated, “Under copyright law, works are defined as containing human emotion or thought. Can AI-generated content truly be considered such?”
• Related Link.

“30 Minutes. If You Beat ChatGPT, You’re Hired.”.

• It reportedly happened during a new attorney hiring interview at a law firm. They were given case records and told to draft a complaint as a test.
• A lawyer who experienced it said, “I’d heard new attorneys have to compete with AI, but I was taken aback to see it actually enforced.”
• “It’s not just employment—even practical training is tough to secure.” The saying goes, “When there’s nowhere else to go, even the Korean Bar Association’s training sees more lawyers.” There are rumors of some “paying small firms for training.”
• A lawyer from a top-10 firm said, “Though unspoken, reduced hiring is already reality—we have no choice but to prioritize experienced hires over newcomers.”
• Related Link.

Jensen Huang’s Five-Layer Cake Theory.

• Bubble or not? Jensen Huang (NVIDIA CEO) sees it as “the largest infrastructure buildout in human history.” Huang’s five-layer cake theory is as follows:
• Huang’s five-layer cake theory is as follows:
• Layer 1: Energy and power (the grid).
• Layer 2: Computing and chips (accelerators, memory, servers, etc.).
• Layer 3: Networks and data centers (switches, optical communications, racks, buildings, cooling included).
• Layer 4: Platforms and cloud stacks (software environments that run models).
• Layer 5: Applications and services (end products used by businesses and consumers).
• The market watches whether profits emerge in Layer 5 and warns of bubbles, but Huang argues that bottlenecks occur in Layers 1 and 2—a stage where infrastructure shortages hinder the development of applications and services. Demand elasticity exceeds 1.
• He claims $1 trillion will be invested annually for a decade, totaling $10 trillion, and the cycle won’t end until AI replaces human labor in an $110 trillion market. When will the bubble burst? Watch for slowing supply—it hasn’t happened yet.
• Related Link.

Worth Reading.

Can Atlas Support People?

• Atlas from Greek mythology was punished to hold up the sky. Atlas, made by Hyundai Motor’s subsidiary Boston Dynamics, raises concerns about stealing workers’ jobs.
• Lee Jae-myung (President) warned, “We cannot avoid the massive cart rolling in.”
• Kim Min-a (Khan Columnist) pointed out, “The speed of the rolling cart can and should be controlled.”
• Lee Sang-heon (ILO Director) emphasized, “19th-century British workers didn’t destroy machines simply over jobs—it was a distress signal demanding society protect those left behind.”
• Daron Acemoğlu (MIT Professor) noted, “Technology leads to widespread prosperity not through automation itself, but through the economic, social, and political choices societies make.”
• Related Link.

Is Han Dong-hoon Jang Dong-hyeok’s Only Alternative?

• It’s a common-sense question. Jang Dong-hyeok (People Power Party Leader) is set to step down after the local elections.
• But is Han Dong-hoon (former People Power Party Leader) really the alternative?
• Kwon Tae-ho (Hankyoreh Columnist) pointed out, “Han Dong-hoon wasn’t ousted for trying to overthrow Yoon Suk-yeol—he failed to protect Yoon and was pushed out.”
• Don’t forget that three days after the emergency martial law declaration, he opposed the president’s impeachment.
• He even stepped forward to propose a co-leadership with Han Duck-soo (then Prime Minister).
• Kwon Tae-ho emphasized, “The conservative camp has many people.”
• The implication: Han Dong-hoon isn’t the only option.
• Related Link.

Death Penalty or Life Imprisonment?

• Lee Young-tae (The Korea Herald Columnist) pointed out, “More important than that is Yoon Suk-yeol’s unrepentant return.” Yoon has never apologized once. He might even think he’ll be released in a few years anyway.
• The law banning pardons for rebellion charges hasn’t even been properly discussed. Lee added, “Yoon himself probably doesn’t take the question of death penalty or life imprisonment very seriously,” and vented, “That’s what’s truly frightening and infuriating.”
• Related Link.