A War Without an Easy End, Markets in Panic.

• “We expected four to five weeks, but it could last longer.” Markets reacted nervously to Donald Trump’s (U.S. President) single remark.
• Stock prices plummeted while oil prices rose.
• LNG prices surged 40% before settling. Brent crude futures closed at $81.4 per barrel after hitting $85. Some forecasts suggest prices could exceed $100.
• Yesterday, the KOSPI index crashed 7.2%, falling to 5,791.9.
• The won-dollar exchange rate rose 26.4 won, closing at 1,466.1 won.
• Samsung Electronics, SK Hynix, and Hyundai Motor fell 9.9%, 11.5%, and 11.7%, respectively.
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Exchange Rate Tops 1,500 Won.

• Peaked at 1,506 won at 12:20 AM today before retreating.
• The first time since March 2009—17 years ago.
• Gold prices are rising, and the dollar remains strong.
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U.S. Stock Market Plunges Then Rebounds.

• Dow Jones Industrial Average plummeted over 1,200 points before closing down 404 points.
• London’s FTSE 100 and Germany’s DAX indices also fell over 2.5%.
• Financial Times assessed that recovery is underway. Trump’s pledge to “escort and insure tankers passing through the Strait of Hormuz” had some effect, but caution remains warranted.
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The Lifeline of Global Energy: The Strait of Hormuz.

• The strait handles 20% of global shipping volume—and it’s now completely blocked.
• At its narrowest, it’s just 33 km wide. Iran possesses over 5,000 mines—enough to halt maritime traffic entirely if deployed.
• Iran’s Revolutionary Guard vows, “Not a single drop of oil will pass.”

Trump’s Dilemma.

• Trade wars are unraveling, and approval ratings are cratering. He’d likely want to end the attack quickly and declare victory, but Iranian counterattacks persist. Concerns also grow that weapons caches are hidden underground and missiles may not be fully neutralized.
• U.S. military fatalities have risen to six.
• Rather than “Make America Great Again,” he’s inflaming problems and being dragged deeper.
• Though he claimed “no hesitation about deploying ground forces,” some analysts argue it’s becoming unavoidable.
• Thomas Friedman (New York Times columnist) noted, “Trump threw a lifeline to a collapsing Iranian regime.” Regime collapse is unlikely. What began as war may end in negotiations.
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Why Global Oil Prices Are Still Holding Steady.

• Compared to past conflicts, the volatility remains relatively muted.
• The Financial Times noted that the world has changed: global oil dependence has declined, and the Middle East no longer dominates market dynamics.
• Trump’s confidence rests on U.S. oil exports. Once the world’s largest crude importer, America is now the top producer and exporter. The assumption is that even if Middle Eastern oil flows halt, the U.S. can stabilize prices.
• Global crude inventories stand at 2 billion barrels—enough to buffer supply disruptions for several months, given the region’s daily output of 16 million barrels.
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China’s Silence.

• China has only issued a statement that “infringement on sovereign states cannot be tolerated” and taken no further action.
• If the Strait of Hormuz is blocked, China will suffer the most.
• China buys 90% of Iran’s oil exports, which accounts for about 12% of its own imports. While Iran is heavily dependent on Beijing, the reverse is not true. Beijing has also heavily invested in Saudi Arabia and the UAE.
• From Beijing’s perspective, it’s not bad for the U.S. to exhaust missiles on Iran—those could be missiles aimed at Taiwan in a future conflict.
• China also stayed silent when Venezuela was attacked. Venezuela accounted for about 5% of Beijing’s oil imports, all of which have now been cut off.
• Trump was originally scheduled to visit Beijing on the 31st, but the trip is likely to be postponed.
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The Real Reason America Entered the War.

• MAGA factions are also fracturing.
• Marco Rubio (U.S. Secretary of State) told reporters, “We knew Israel would attack Iran,” adding, “If Iran was going to attack us, we needed to strike first.”
• It’s a twisted logic: since Israel couldn’t be stopped, the U.S. had to join Israel in attacking Iran.
• MAGA factions are rebelling, accusing Marco Rubio of luring Trump into the war.
• Axios noted, “It’s highly unlikely Benjamin Netanyahu (Israeli Prime Minister) would attack Iran without Trump’s approval.”
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What Matters Now.

Iran’s Mixed Barrage.

• Pete Hegseth (U.S. Secretary of Defense) said, “A missile that rarely penetrates is called a ‘squirter.’”
• It’s usually called a “leaker,” but using “squirter” implies an exceptional breach of air defenses—though breached they are. U.S. bases across the Middle East are within range.
• A 90% interception rate is considered excellent, but when 100 missiles are fired, 10 get through. If 1,000 are launched, 100 will hit.

A $50,000 Suicide Drone.

• Cheaper and easier to build than ballistic missiles. Maximum range 2,000 km, undetectable by radar.
• To shoot down a $50,000 drone, a $4 million interceptor missile must be launched—hitting it is hardly guaranteed.
• Some analysts suggest both the U.S. and Iran could run out of missiles within days.

Screwflation Ahead.

• “Economic recovery could be delayed for a considerable period,” according to Hyundai Economic Research Institute.
• A portmanteau of “squeeze” and “inflation.” It forecasts a prolonged economic slump as rising prices and shrinking consumption collide.
• If oil prices exceed $100, growth rates drop by 0.3 percentage points while inflation rises by 1.1 percentage points.

Kang Sun-woo and Kim Kyung Arrested.

• They are accused of exchanging 100 million won in exchange for local election nominations. Kang Sun-woo (Independent MP) and Kim Kyung (former Seoul City Council member) have been arrested.
• The court stated, “There is a risk of evidence destruction.”
• Kang Sun-woo had allegedly destroyed evidence in preparation for a search and seizure. Kim Kyung was found to have traveled to the U.S. after the investigation began and deleted messenger records.
• Some assessments suggest the police have only now salvaged their reputation.
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Deep Dive.

Why the Daegu-Gyeongbuk Merger Is Unraveling.

• The People Power Party hasn’t even sorted out its internal traffic.
• Daegu-Gyeongbuk PPP lawmakers have aligned toward unification, but the heads of eight Gyeongbuk city councils oppose it.
• Han Byung-do (Democratic Party floor leader) said, “The PPP requested we set a party line.”
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“Courts Are Not Untrusted,” Cho Hee-dae’s Defense.

• Cho Hee-dae (Chief Justice) claimed to reporters during his commute, “According to World Bank surveys, South Korea ranks among the top.” A carefully prepared remark.
• He argued, “Foreigners come to learn from us,” but this hardly proves the absence of judicial distrust.
• “No system is perfect, and we respect the legislature’s work,” he said, “but we urge careful consideration until the end.”
• In an editorial, Kyunghyang Shinmun criticized, “The primary responsibility for the peak of judicial distrust lies with Cho Hee-dae’s judiciary.” It added, “Citing ‘objective indicators’ treats citizens who distrust the judiciary as ignorant masses.”
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Another Take.

Special Long-Term Holding Deduction Is the Culprit Behind Rising Home Prices.

• This refers to the long-term holding special deduction.
• According to the Citizens’ Coalition for Economic Justice, a 60-pyeong (196.84㎡) Hyundai Apartment in Apgujeong-dong rose from 2.5 billion won 10 years ago to 12.7 billion won last year. The capital gain was 10.2 billion won, but if held and occupied for 10 years, the transfer tax rate drops to 7%.
• The special long-term holding deduction for transfer taxes was capped at 30% in 1988, increased to 45% in 2005, and 80% in 2008.
• The Citizens’ Coalition for Economic Justice pointed out, “The special deduction has undermined tax equity and fueled speculative concentration on prime properties.”
• Lee Jae-myung has also criticized, “It’s absurd to reduce taxes simply because a property was held long-term if it’s for investment or speculation rather than residential use.”
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Capping Crypto Exchange Stakes? Who’s Pushing and Why.

• The Financial Services Commission plans to propose a “Digital Asset Basic Act” limiting major shareholders’ stakes in crypto exchanges.
• Korea’s crypto exchanges are dominated by Upbit (Dunamu) at 69% and Bithumb at 28%.
• The FSC views crypto exchanges as public financial infrastructure and insists major shareholders’ stakes should be capped at 15–20%. It argues risks from specific shareholders could spill over to the entire market.
• If passed, Song Chi-hyung (Dunamu Chairman), who holds 26% of Dunamu, would need to sell over 1 trillion won in shares.
• Industry backlash centers on three points.
• First, such regulation doesn’t exist abroad.
• Second, while stock exchanges are state-licensed, crypto exchanges operate under a registration system. Retroactively limiting private startups’ stakes infringes property rights.
• Third, weak major shareholder stakes could hinder M&A, capital expansion, and expose exchanges to hostile takeovers.
• The crypto market is a global single market, not a state-regulated one. Last year, Korean users paid 4.8 trillion won in fees to overseas exchanges—while Korea’s top five exchanges generated only 1.8 trillion won. The nature of “monopoly” differs fundamentally.
• Industry observers widely believe Kim Yong-beom (Blue House Policy Chief) is spearheading crypto regulation. The FSC seems uneasy, and Democratic Party lawmakers are divided.
• Hyun Ji-hye (Changcheon Law Firm attorney) proposed three alternatives:
• First, resolve issues through major shareholder suitability reviews instead of stake caps.
• Second, introduce prior approval for changes in controlling shareholders.
• Third, strengthen disclosure requirements to let market participants monitor exchanges.
• Related Link.
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Is the World Cup Only on JTBC?

• JTBC has purchased exclusive broadcasting rights. During the Milan Winter Olympics, negotiations with terrestrial broadcasters failed—it demanded twice the amount offered by the three major networks.
• From the start, JTBC inflated the rights fees to secure exclusive access, making resale difficult.
• Criticism arises that national sports events should ensure broader accessibility. The Korea Communications Commission currently lacks clear tools to intervene.

The Fix.

Public Rental Housing Like Singapore? Can 20% of Income Cover Housing Pensions?

• Singapore is a country with almost no real estate speculation. Public housing accounts for 80%, and 90% of citizens own homes.
• Lee Jae-myung (President) visiting Singapore said, “It shows that anything is possible if the government has the will,” but the situation here is very different.
• First, the government nationalized land and supplied public housing.
• Second, it aggressively enforced a strict one-household-one-home policy.
• Third, a system of land-lease housing—where the state owns the land and individuals own the buildings—became established.
• Fourth, a portion of mandatory central pension contributions is used for housing funds. Workers and employers each contribute 20% and 17% of salaries.
• Choi Kyung-ho (Auditor, Tantan Housing Cooperative) pointed out, “The fund jointly contributed by companies and workers (CPF) provides loans, but in Korea, loans are difficult without land collateral.”
• Related Link.

Why Aren’t Abortion Pills Available?

• “I don’t know how many more years of deliberation are needed,” said Lee Jae-myung (President) at a State Council meeting.
• The Constitutional Court ruled that the abortion ban was unconstitutional in 2019. Seven years later, the legislative vacuum persists—and it remains illegal.
• Nam In-soon (Democratic Party lawmaker) criticized, “Approval is possible under the Pharmaceutical Affairs Act,” adding, “Denying it is an abuse of the MFDS’s discretionary power.”

Expanding Top-Tier Visas.

• It decided to attract overseas talent. Justice Minister Jeong Seong-ho (Minister of Justice) said, “We judged that immigration policies, which have focused on low-skilled, low-wage foreign workers, need to be redefined.”
• The top-tier visa, previously limited to high-tech industries like semiconductors, artificial intelligence, and robotics, will now expand to include professors and researchers. Since its introduction last year, only 20 people have received it; the plan is to increase this to 350 by 2030.
• Foreigners currently make up 5% of the population, around 3 million people. By 2030, this is expected to rise to 8%, or 3.5 million.
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3.38 Million Seniors Fall Short of Minimum Living Costs.

• Basic pension: 349,700 KRW. National pension: 100,000 KRW. Not enough to live on.
• Government-supported senior job programs: 290,000 KRW for 10 days of 3-hour workdays.
• Combined total: 740,000 KRW.
• Falls short of the 820,000 KRW basic livelihood security benefit.
• 3.38 million seniors earn less than the minimum living cost of 1.36 million KRW.
• Critics argue the basic pension should target fewer recipients with higher payouts.
• Currently, the bottom 70% of earners qualify—those earning under 2.47 million KRW.
• 70% of seniors were included in the 2012 basic pension rollout as a political compromise.
• 27 trillion KRW is distributed to 7 million seniors, but proposals suggest narrowing eligibility to increase payouts for the poorest.
• Shin Sung-sik (JoongAng Ilbo reporter) noted, “Aligning with median income standards would be appropriate.”

ICYMI.

This Winter’s Ski Season Ended 30 Days Early.

• Some resorts can barely operate without artificial snow.
• Operating days have dropped from 120–130 to 80–100, perpetuating a high-cost, low-profit structure.
• Pyeongchang’s average December temperature rose from -6.7°C in 2014 to -4.0°C in 2024.
• Icheon’s rose from -4.1°C to -0.5°C.
• Visitor numbers fell from 6.86 million in 2011 to 4.34 million last year.
• Calls to revise peak electricity pricing persist. Rising national forest lease fees add pressure.
• Some suggest reframing ski resorts as “winter sports hubs,” not just playgrounds for the wealthy.
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Foreigners Are Now the Lifeblood of Department Stores.

• Last year, 18.94 million foreign tourists visited. Projections suggest this will exceed 30 million by 2030.
• The combined sales of the three major department stores grew by 4.3% last year.
• Foreign customer spending rose from 1.5569 trillion KRW in 2024 to 2.0343 trillion KRW last year.

South Korea’s Top 2% Researchers: 2,633.

• Chosun Ilbo analysis. The U.S. leads with 87,860, the U.K. follows with 25,073, and China ranks third with 12,374.
• Japan is sixth with 9,830, while South Korea places 15th.
• Kang Seung-gu (Sungkyunkwan University professor) noted, “Collaborative research is active in applied fields where immediate results are visible, but foundational science—which requires consistent funding—lacks such support, making high-impact papers difficult to produce.”
• Related Link.

Melania Chairs UN Security Council Meeting.

• This is the first time a presidential spouse has presided over a session.
• The meeting addressed children in conflict zones, held shortly after 165 schoolchildren died in U.S.-Israeli airstrikes on Iran.
• Melania Trump (U.S. President’s spouse) stated, “The United States stands with every child around the world” and “I hope peace will soon be yours.” A surreal spectacle.
• Related Link.

Why Ice Cream Isn’t Selling.

• Sales dropped from 2 trillion KRW in 2015 to 1.4 trillion KRW last year. Major companies’ operating profits also fell by nearly 30%.
• The distribution paradigm has shifted to delivery. Iced Americano (Aa) may have taken its place.
• The population aged 5–14 also decreased by 1 million over a decade.
• Related Link.

Worth Reading.

The Final 1km That Defines Quality of Life.

• The last 1km from subway stations to homes determines quality of life. Exercise by choice and movement for survival are fundamentally different.
• Kim Young-bae (Democratic Party lawmaker) pointed out, “Inequality doesn’t start in bank accounts—it starts in bed.”
• Kim proposed three solutions.
• First, public bike-sharing (Ttareungi) must transition to electric bikes. Replacing 9,000 units annually would cost 97.2 billion KRW over five years—half the price of Han River buses.
• Second, village buses should be made free. Unpopular routes could be prioritized for purchase, gradually transitioning to public ownership.
• Third, light rail projects must resume. Seoul could become a 10-minute station zone citywide. The claim is that cutting Mayor Oh Se-hoon’s (Seoul mayor) showy infrastructure budgets would make it feasible.
• Related Link.

This Time Is Different.

• Kim Won-jang (Economics Jeon Representative) believes Lee Jae-myung’s real estate strategy is working. “The nature of the contagion has completely changed,” he analyzed.
• First, interest rates are high. Even real estate tycoons have limits to how long they can hold out.
• Second, property tax hikes are also highly likely.
• Third, the belief that prices have risen so much they can’t rise further is spreading. Public sentiment has shifted significantly.
• In regional areas, auction listings have increased. The situation now requires preventing polarization.
• “Demand is concentrated in Seoul, so building apartments there is a corporate responsibility, not a government one. Demand must be dispersed. It’s the public sector’s role to expand urban infrastructure in provinces to rival Gangnam, Seoul.”
• Related Link.

“Seized Coins, Taken Like Discarded Scrap.”.

• The Korea Customs Service announced the seizure of delinquent taxpayers’ cryptocurrency, releasing a USB photo with the code blatantly written on its cover. The next day, a hacker drained the coins before returning them—only for another hacker to steal them again. The haul was worth 6.9 billion KRW.
• The Gwangju District Prosecutors’ Office lost 40 billion KRW after accessing a phishing site while checking balances.
• Gangnam Police Station remained unaware that 2 billion KRW worth of Bitcoin had vanished for four years.
• Jang Won-je (The Dong-A Ilbo columnist) assessed, “The National Tax Service left seized assets unattended in broad daylight and had them stolen, the prosecutors fell for phishing and handed over funds themselves, and the police lost track after entrusting them to civilians.” He added, “Urgent educational training to improve virtual asset literacy among law enforcement officials seems necessary.”
• Related Link.