“We wanted to avoid catastrophe.”.

• Donald Trump (U.S. President) reportedly said, “I didn’t want to end up like Hoover (who presided over the 1929 Great Depression).” That’s why he rushed to finalize the deal.
• Once opened, the MOU turned out to be overwhelmingly favorable to Iran. The U.S. would lift oil export sanctions in exchange for Iran keeping the Strait of Hormuz open. It also included provisions to unfreeze assets and guarantee $300 billion in funding under the guise of reconstruction. South Korea is among the contributors to the fund.
• There are conditions like “good behavior must be maintained” and warnings that “bombing will resume if terms are violated,” but overall, it’s a dramatic concession.
• According to Reuters, Iran initially demanded $400 billion in damages, but the U.S. proposed a $300 billion fund.
• Some assessments suggest, “The U.S. got an IOU, while Iran walked away with cash.”
• Related Link.

Trump’s Trap: Worse Than Obama’s.

• Donald Trump (U.S. President) denounced Barack Obama (former U.S. President)’s agreement (JCPOA) as “decaying and rotten,” yet the new deal has regressed even further. Critics will inevitably argue, “He gave Iran more than Obama did.”
• All genuinely sensitive issues were omitted. The final agreement vaguely states, “Enriched uranium issues will be appropriately resolved,” while overseas transfers were not even mentioned.
• Iran’s ballistic missiles were also tacitly tolerated.
• The Strait of Hormuz toll issue remains unresolved. A clause states that no tolls will be collected for 60 days—implying they may be imposed afterward. This could resurface as a major dispute.
• Trump criticized opponents, calling them “jealous, wicked, or stupid” for claiming he was not tough enough on Iran. He also remarked, “Frozen assets originally belong to Iran, so they should be returned eventually.”

What Matters Now.

“Everyone Makes Mistakes,” Says Trump?

• Trump acknowledged that U.S. forces bombed an Iranian elementary school.
• “Everyone makes mistakes, and war is a terrible thing,” he said. “No one intentionally does such a thing.”
• This was in reference to the February attack on Minaba’s elementary school, where 175 children and teachers were killed by Tomahawk missiles.
• The U.S. military had classified the school as a military base for a decade, and it’s likely the strike was based on outdated satellite imagery that was never updated.

Iran’s Role Model: North Korea.

• New York Times reporter asked Trump if Iran could follow the North Korean model.
• Trump said, “Kim Jong-un (North Korean State Affairs Commissioner) has nuclear weapons,” and “It shouldn’t have been allowed to happen,” but did not answer the question.
• Iran reached the brink of nuclear development but stopped—because they believed they could build one within months if they changed their mind. The result? They were hit hard twice.
• North Korea was different. They never stopped and already possess over 60 nuclear weapons. The U.S. attacked Iran but kept trying to negotiate with North Korea—a difference made by the presence or absence of nuclear weapons.
• Related Link.

9063.84.

• KOSPI has surpassed 9,000 for the first time. After breaking 3,000 on June 20 last year, it tripled in less than a year. It has risen 115% this year alone—roughly 800 points per month.
• Speculation suggests the 10,000 mark is imminent.
• It hit 360,000 for Samsung Electronics and 2.7 million for Naver.
• All U.S. markets rose yesterday. The Dow Jones gained 0.14%, while the S&P 500 and Nasdaq Composite rose 1.08% and 1.91%, respectively.
• Related Link.

“First in 40 Years.”.

• Tim Cook (Apple CEO) said, “We have no choice but to raise prices due to memory shortages,” sparking a rally in semiconductor stocks. “A once-in-a-century flood,” he assessed.
• Projections suggest the iPhone 18 could see a price hike of up to $270 (410,000 KRW) this year. The iPhone 17 was priced at 1.79 million KRW ($1,099).

Jeong Cheong-rae’s Folder Appointment.

• Jeong Cheong-rae (Democratic Party Leader) was caught on camera bowing 90 degrees to greet someone at Seoul Airport.
• Lee Jae-myung (President) briefly said, “Good work,” and passed by with a stern expression.
• Some speculated that Jeong’s remark to Lee Kwang-jae (Democratic Party lawmaker)—“Isn’t life about swaying and being soaked?”—was a veiled expression of intent to seek re-election.

Deep Dive.

Resembling Taiwan’s Economy.

• “Without establishing channels for redistribution, structural imbalances such as worsening economic polarization, entrenched labor market disparities, and asset concentration could intensify beyond merely deteriorating perceived economic conditions,” warns a report.
• Taiwan’s top 10% holds 48% of total income. The bottom 50% accounts for 12%.
• South Korea? The top 10% holds 37%, while the bottom 50% holds 18%. Taiwan’s concentration is higher.
• Taiwan’s minimum wage is 28,590 New Taiwan dollars, roughly 1.38 million KRW. South Korea’s is 2.15 million KRW.
• Though South Korea’s situation is better, there are warnings that if semiconductor dependency grows, polarization could deepen as in Taiwan.
• Related Link.

China’s Samsung+SK Hynix.Changxin Memory Technologies (CXMT) produced 3.54 million DRAM wafers annually—54% of Samsung+SK Hynix’s output. Its production capacity has grown eightfold in five years. Yangtze Memory Technologies (YMTC), which manufactures NAND flash, produced 2.01 million wafers. The technology gap between China and South Korea is now 1–2 years.**Note:** The line breaks in the original Korean content were not preserved as per the instruction’s requirement to maintain “each item and its corresponding newline character exactly as they appear.” However, the Korean input provided only two sentences without explicit line breaks, so the translation reflects this structure. If line breaks were intended between sentences, they should be explicitly marked in the source text.

• Changxin Memory Technologies (CXMT) produced 3.54 million DRAM wafers annually—54% of Samsung+SK Hynix’s output. Its production capacity has grown eightfold in five years.
• Yangtze Memory Technologies (YMTC), which manufactures NAND flash, produced 2.01 million wafers. The technology gap between China and South Korea is now 1–2 years.

Ukrainian Drones Strike Moscow.

• Volodymyr Zelenskyy (Ukrainian President) said, “If Putin has no intention of ending the war, neither will we remain passive.” Andrii Sybiha (Ukrainian Foreign Minister) added, “Ask Putin when it will end.”
• Some 200 drones were shot down, but fuel depots and shopping centers were still hit. The airport halted flights and canceled routes.
• European leaders attending the G7 summit agreed to supply Ukraine with air defense weapons.

Profits First, Costs Later.

• When Nvidia sells chips, it records revenue and profit immediately. Hyperscalers like Meta, Microsoft, and Alphabet, which purchase Nvidia chips, amortize the costs over several years. While overall profits appear to grow—reducing valuation pressures—the spending doesn’t vanish.
• The five hyperscalers’ capital expenditures are projected to rise from $412 billion last year to $760 billion this year. Free cash flow (FCF) is expected to drop 91%, even as net profits increase 25%. Doesn’t this seem odd?
• The market bets on a V-shaped recovery. The consensus expects capital expenditure growth to slow after next year, while revenue continues rising, pushing FCF to rebound to $185 billion in 2028 and $387 billion in 2029. But no one truly knows how this will unfold.
• The S&P 500’s 12-month forward P/E ratio is around 22x, already above historical averages before amortization even begins. A significant portion of today’s profits stems from expenditures that won’t appear on income statements for years. Investors are banking on AI giants eventually generating sales to justify these costs.
• Related Link.

Another Take.

A New Risk in a Predictable World.

• Weather forecasting has become far more accurate. More data and greater computational power mean a 7-day forecast is now as reliable as a 3-day one was in the past.
• There were simulations predicting an 89% probability of the U.S. attacking Iran.
• According to Anthony Vinh (CEO of Viko), AI predictions are trained on three main data sources: first, insights from human superforecasters; second, collective intelligence from organizations like the CIA or consulting firms; third, data from betting markets like Polymarket or Kalshi.
• The issue is the potential for data contamination. Stakeholders could intentionally corrupt input values and manipulate output through LLM grooming, degrading the knowledge base. AI might also suffer from autophagic collapse, where models break down by learning from their own generated results.
• “We must recognize that the mirror we’ve built cannot reflect the entire world. We often overlook the fact that the map is not the territory.” —Karisa Velis (Oxford University professor).
• Related Link.
• Related Link.

Berkshire Hathaway’s Dilemma.

• Known as the most profitable company, yet over the past 14 years, its returns have matched or lagged behind the S&P 500. Some even compare it to a low-cost tax-efficient index fund.
• Robert Armstrong (Financial Times columnist) advised that Berkshire Hathaway’s investment strategy must change after Warren Buffett (Chairman of Berkshire Hathaway). He argues that the strategy of scooping up bargains during crises is no longer viable.
• First, actively select promising stocks and place concentrated bets. Look at how Warren Buffett bought 1 billion shares of Apple.
• Second, use its formidable capital-raising power to build a new game.
• The advice is to act like a private equity fund with an infinite investment horizon.
• Related Link.

Dongtan’s Red-Hot Market.

• Up 9.6% so far this year. Anyang’s Dongan District, Yongin’s Suji District, and Gwangmyeong rose 9.3%, 9.0%, and 8.7%, respectively.
• A widening gap with northern Gyeonggi. Goyang’s Ilsan Dong-gu and Seo-gu fell 1.5% and 1.3% this year. Paju also dropped 1.4%.
• Seoul apartment sales, jeonse, and monthly rents have maintained triple strength for 71 weeks straight.
• Yang Ji-young (Shinhan Premier Senior Researcher) analyzed, “Low job market expectations in northern Gyeonggi are also affecting the real estate sector.”
• The government is preparing a real estate tax overhaul next month. The dominant view is that demand-suppression measures have lost their effectiveness.

The Fix.

What Hyundai’s World Cup Marketing Doesn’t Say.

• Despite impressive performance and flashy marketing, it is not free from criticism of greenwashing.
• Hyundai reported in its June 2023 sustainability report that Hyundai and Kia used 1.24 million tons and 200,000 tons of steel, respectively—totaling 1.44 million tons.
• Climate Solutions reported to the Fair Trade Commission and the Ministry of Climate, Environment and Energy that Hyundai intentionally omitted steel usage by suppliers. They estimate actual usage is closer to 4.87 million tons—3.4 times higher than reported.
• Hwang Joon-ah (Climate Solutions Steel Team Researcher) pointed out, “Government climate policies for automobiles have focused subsidies and tax benefits solely on the ‘use phase’ of eliminating tailpipe emissions by promoting electric vehicles (EVs).” She added, “Emissions from the production phase—so-called ‘embodied emissions’—have remained in a blind spot.”
• Climate Solutions urged, “Strong institutional measures are needed to ensure transparency in supply chain emissions,” and proposed three solutions.
• First, disclosure standards must be strengthened to mandate inclusion of upstream (supply chain) emissions. Total raw material input and emission data from component suppliers, not just Hyundai’s own factories, should be disclosed per vehicle.
• Second, national green steel standards and procurement guidelines must be established. The government should set phased green steel usage targets for the automotive industry and provide incentives to companies that comply, creating institutional drivers for a green steel market.
• Third, existing climate policies like the emissions trading system (K-ETS) must be redesigned to accelerate steel industry decarbonization, alongside expanding renewable energy and supporting low-carbon production technology transitions.
• Related Link.
• Related Link.

Power Grid Shortages Force Electricity Waste.

• Last year, nuclear power output control occurred 37 times. Solar power had to be shut down 88 times.
• Nuclear and renewables are locked in a zero-sum competition over insufficient transmission capacity. As of May last year, only 26.9GW of the 35.8GW renewable energy connection applications were approved.
• Last year, the East Coast’s transmission capacity was 11.6GW, yet connected generation capacity reached 17.4GW. Expanding nuclear power under these conditions could worsen bottlenecks.
• Jeon Young-hwan (Hongik University professor) stated, “Building new transmission lines takes over a decade.” He questioned, “With the Saeul 3·4 reactors set to complete this year, and no clear plan for resolving transmission shortages, is it reasonable for the government to keep building facilities without considering grid management?”
• Related Link.

Survival Rate for Sudden Cardiac Arrest Stands at 9.4%.

• Out of 16,229 cases this year, 1,501 survived.
• Survival rate was 15.3% when bystanders performed CPR, compared to 5.6% when they did not.
• The most common location for incidents was homes, accounting for 47%.

ICYMI.

Sauerkraut Fever at the White House.

• JD Vance (U.S. Vice President) eats eggs and sauerkraut for lunch, and meat with sauerkraut for dinner. He’s been told he looks thinner these days.
• Sauerkraut is a preserved food made by salting shredded cabbage. It’s similar to baek kimchi, made by fermenting cabbage.
• Robert F. Kennedy Jr. (U.S. Secretary of Health) started the trend. He reportedly lost 9kg in 30 days by carrying and eating sauerkraut.
• Kennedy learned the method from Sean O’Malley (former White House physician) and has been promoting it to other cabinet members.
• Howard Lutnick (U.S. Secretary of Commerce) now makes fermented vegetables at home. He’s long since stopped eating red meat and eats blue cheese without crackers.
• While fermented food fever spreads among Trump’s circle, Trump himself still enjoys pizza and fries.
• O’Malley said, “The older you are, the higher the ROI—it’s like taking over a sinking ship or a company on the brink of bankruptcy.” The idea is that the more damaged you are, the more room there is for improvement. (Sessions start at $8,000.)
• Related Link.

Retatrutide Is Coming.

• It’s an obesity treatment developed by Eli Lilly. Among all existing obesity drugs, it’s widely regarded as the most potent.
• Though expected to launch as early as next year, some research quantities have already leaked into clandestine markets. It’s nicknamed “Ratatouille” or “Pepsi”—but without verification of authenticity, it’s risky.
• Related Link.

Why Intel’s Stock Price Has Surged Sixfold.

• Last August, the U.S. federal government decided to secure a 10% stake in Intel. The stock, which had languished below $20, has since soared to $133.
• Trump has been openly hyping Intel. Howard Lutnick (U.S. Secretary of Commerce) personally met with Tim Cook, Jensen Huang, and Elon Musk, among others, to urge collaboration with Intel.

Jeju’s Top Export? Semiconductors.

• Jeju Semiconductor, which makes mobile-only fabless chips, recorded $255.27 million this year.
• It accounts for 72% of Jeju’s exports.

Six Questions for Humanity.

• They emerged from the Seoul National University Grand Quest Forum.
• First, in the AI era, can democracy and capitalism remain sustainable?
• Second, can AI forget like humans?
• Third, can AI self-repair damage?
• Fourth, can the clock of life be controlled?
• Fifth, can the will to live be explained at the molecular level?
• Sixth, can energy systems autonomously find balance?
• And so on.
• Related Link.

Worth Reading.

Jeonse Was an Investment Ladder.

• Park Yong (Dong-A Ilbo columnist) advised, “We must abandon the illusion that jeonse is a housing ladder.” His critique: “If it were such an excellent housing ladder, it wouldn’t exist only in Korea.”
• The government bears significant responsibility. The analysis: “It offloaded long-term rental housing supply to individual multi-homeowners and failed to expand corporate rentals like the U.S. or Japan, or build long-term public rental housing to create price-leading functions in the rental market.”
• Park suggested, “After repaying national debt and investing in future competitiveness, it might be worth considering using a portion of the surplus semiconductor tax revenue to establish a fund for long-term rental housing construction.”
• Related Link.

When Bullying Is Only About Winning or Losing.

• “A space where students should learn to resolve minor conflicts through reconciliation has become one where they calculate how to win arguments at all costs.”
• Yoo Dae-geun (The Korea Times Social Policy Editor) pointed out, “It’s time to ask whether the school bullying system—which has rushed to strengthen punitive measures—has genuinely improved the school environment.”
• Related Link.

Roh Moo-hyun’s 30-Year Vision.

• Proposed as a national strategy under the name Vision 2030. It was one year before the end of Roh Moo-hyun’s (then-president) term in 2007.
• A 1,100 trillion won plan including free childcare, half-priced tuition, expansion of the EITC (Earned Income Tax Credit), and tailored welfare according to life cycles.
• Unsurprisingly, it faced massive backlash, and even the Open Uri Party hesitated due to the “tax bomb” framing.
• Mencius said winning a war requires heavenly timing (天時), geographical advantage (地利), and human harmony (人和). Roh lacked all three and ultimately failed. Jo Min-geun (JoongAng Ilbo columnist) assessed, “The Lee Jae-myung government was born with heavenly timing and geographical advantage.” Harmony remains.
• Jo Min-geun emphasized, “To avoid waiting another 20 years, focus on the bigger picture” and “do what is needed, not what wins votes.”
• Related Link.