US Federal Rate Hike.

• 0.25 percentage points up to 3.75–4.00%. All 12 Federal Open Market Committee members agreed on the rate increase.
• The dot plot suggests another hike is likely before year’s end.
• Kevin Warsh (Federal Reserve Chair) emphasized prices: “Inflation has been too high for too long,” he noted.
• The rate hike was anticipated. The 10-year Treasury yield touched the psychological resistance level of 5%, and the consumer price index exceeded expectations.
• All three major US indices fell. The S&P 500, Dow, and Nasdaq dropped -0.45%, -1.21%, and -0.01%, respectively.

Trump Demands: “Below 1%.”.

• Trump (U.S. President) claimed on Truth Social, “America is unequivocally the world’s most creditworthy nation, and its economy is booming as new investments pour in.”
• In all caps, he wrote, “LOWER THE INTEREST RATES FOR THE UNITED STATES OF AMERICA, AND FAST.”
• He argued, “If the U.S. halted trade with all countries running deficits against it, it could earn at least $1.5 trillion,” though this is entirely unrealistic.
• Conflict between Trump and Warsh (Federal Reserve Chair) is now unavoidable.
• Related Link.

What Matters Now.

52% Oppose Kim Seung-won’s Appointment.

• Results from a Korean Social Opinion Research Institute survey. Opposition to Kim Seung-won (nominee for Minister of Justice) exceeds twice the approval rate (25%).
• The Democratic Party has decided to push for Kim’s appointment. They argue that the controversial request to the Food and Drug Administration was merely a civil petition and that no compensation was received.
• Chosun Ilbo emphasized, “No government can defy public sentiment.” They added, “What use is a press conference held against the people’s will?”
• The Participation Union’s commentary declaring Kim “unqualified” also drew attention. Under the Lee Jae-myung administration, all officials deemed unqualified by the group have been ousted.
• Kim Chang-gyun (Chosun Ilbo columnist) noted, “There is a sentiment that even if approval ratings drop by several percentage points, they cannot let Han Dong-hoon succeed.” If Kim steps down, Han Dong-hoon (independent lawmaker) would gain greater prominence.
• The Democratic Party may unilaterally adopt the confirmation report. The final decision rests with Lee Jae-myung (President). The Blue House maintains, “No verified suspicions exist.”
• Related Link.
• Related Link.
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Abortion Pill Approval for Under 9 Weeks.

• Hyundai Pharm’s Mifegest is under review by the Ministry of Food and Drug Safety. It has a 95% success rate. The goal is to introduce it in the first quarter of next year.
• For two years after introduction, it will be dispensed via in-hospital prescription, with doctors directly prescribing and compounding. Kwak Soon-heon (Healthcare Policy Director, Ministry of Health and Welfare) explained, “Though the abortion law was ruled unconstitutional, there remains an authoritative interpretation that pharmacists could still face criminal penalties.”
• Related Link.

Negotiation Bloc: 15 Seats? 10 Seats?

• It’s currently 20 seats. The Democratic Party insists on 15. Kim Min-seok (Democratic Party Leader) said, “Watching the controversy over Yoo Hye-in (Minister of Gender Equality and Family nominee) made me see the vulnerability of progressive forces.” The proposal is that if the Justice Party, Progressive Party, Social Democratic Party, and Basic Income Party unite, they could reach 15 seats—12, 4, 1, and 1 respectively.
• The Justice Party argues for lowering it to 10. Cho Kuk (Director of the Justice Party’s Innovation Policy Research Institute) criticized, “Presenting numbers without basis and framing them as compromise or concession shows a misunderstanding of Korean democratic history.”
• The Hankyoreh also noted in an editorial, “If the Democratic Party is willing to revise the National Assembly Act not for immediate political needs but for the greater cause of political reform, there’s no reason to insist on 15 seats.”
• Related Link.
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Kim Min-seok and Cho Kuk.

• One Justice Party lawmaker told Hankook Ilbo, “Kim Min-seok recently had lunch with representatives from the Progressive Party, Basic Income Party, and Social Democratic Party, but we weren’t even contacted.”
• Speculation arises: while advocating for a “progressive grand coalition,” is he actually sidelining the Justice Party?
• Related Link.

Deep Dive.

“The President Does What Ministers Should.”.

• Jeong Kyu-jae (adviser to the Korea Economic Daily) said this after meeting Lee Jae-myung (President). It was an event titled “National Unity, Dialogue Needed.”
• Jeong pointed out, “Ministers should announce policies and engage in debate, but the president is doing it.” He explained, “Even with properly distributed authority and responsibility, the president has many tasks, yet they are too deeply involved in matters the executive branch should handle.”
• “The failure to organize energy to democratically control the judiciary’s monopoly and abuse of power” also strikes a nerve.
• Related Link.

Tomorrow’s Press Conference: Can Approval Ratings Rebound?

• Lee Myung-bak (former president) repeatedly stepped back, saying, “If the public opposes it, we won’t proceed.” He shelved beef imports and the Grand Canal project. Though later exposed as lies, his approval ratings rebounded at the time.
• Roh Moo-hyun (former president) appealed, “This was a decision made despite political costs” after the Korea-U.S. FTA, and his approval ratings rebounded.
• Park Geun-hye (former president) announced the dissolution of the Coast Guard 34 days after the Sewol disaster, and her approval ratings fell further.
• Yoon Suk-yeol (former president) vaguely explained, “I was too hasty” regarding the Dior bag controversy, and his approval ratings plummeted.
• Kyeonghyang Shinmun emphasized, “In a presidential press conference, the attitude and sincerity in delivering the message are as important as the content.”
• Yoo Seung-chan (CEO of Story Dot) said, “The best way to console the public is a sincere presidential apology. He should apologize for the real estate policy chaos, the leveraged ETF crisis, and repeated personnel failures—and promise not to pursue the prosecution’s case withdrawal or constitutional revision for extended terms.”
• The press conference tomorrow will display the slogan, “We will pay closer attention to the people’s will and lives.”
• The keywords are genuine apology and clear change. JoongAng Ilbo warned in an editorial, “If he’s going to talk nonsense, the press conference is pointless.”
• Related Link.
• Related Link.

“Is This Even an Investigation?”.

• Clashes erupted over the follow-up bill to abolish prosecutorial investigative authority. While prosecutors or police are required to participate in investigations involving sexual violence victims, some Democratic Party lawmakers insist prosecutors must be excluded.
• Kim Yong-min (Democratic Party lawmaker) argued, “Granting evidentiary value to prosecutors’ recordings would make this an investigation.” When Kim Nam-hee (Democratic Party lawmaker) retorted, “Is this even an investigation?” Kim Yong-min snapped back, “Don’t interrupt.”
• Kim Nam-hee asserted, “How does protecting sexual violence victims relate to prosecutorial reform?”
• Park Eun-jung (Justice Reform Party lawmaker) noted, “While I agree with the intent, the principle is abolishing investigative authority. Since prosecutorial investigative power has been abolished, video recordings should proceed by requesting supplementary investigations from police or others.”
• Related Link.

North Korea Ordered to Pay South Korea 35.7 Million Dollars in Damages.

• The South Korean government won a damages lawsuit against North Korea. The lawsuit demanded compensation for the 2020 destruction of the Kaesong liaison office.
• The summons was never formally delivered, and the trial proceeded without the defendant. Though victorious, there is no way to collect the funds.
• Related Link.

Another Take.

The Paradox of the Memory Boom.

• Hiro Ohta (Kioxia CEO) instructed restraint in raising NAND flash prices. Prices have already surged over 70% in the second quarter. In a Bloomberg interview, Ohta stated, “Excessive price hikes could erode customers’ investment capacity, ultimately harming the long-term growth of the memory market.”
• DRAM follows the same pattern. Smartphone prices have jumped, and laptops with downgraded specifications have proliferated.
• Chey Tae-won (SK Chairman) also remarked, “We must prioritize expanding supply and protecting the market—even if it means lowering profit margins—to grow together.”

Cognitive Surrender.

• Research shows students using AI tend to abandon the thinking process.
• An MIT survey on student usage found a learning illusion: students felt they had learned material even when they didn’t understand it.
• Beyond hallucinations, sycophancy (flattery) is also problematic—AI often reverses correct answers to align with users’ persistent incorrect claims.
• A CEPR study found homework scores rose 18% after AI adoption, but exam scores dropped 20%.

Will South Korea Invest in Alaska LNG?

• The U.S. pressure is intensifying. While the South Korean government aims to leave the MOU with a vague “exploring investment possibilities,” the U.S. insists on including “promoting investment.”
• The Alaska LNG project is widely deemed unprofitable. Kim Jeong-gwan (Minister of Trade, Industry and Energy) previously called it a “high-risk venture,” adding, “Alaskan gas fields are unlikely to meet our criteria.”
• Trump is eyeing Alaska ahead of the midterms.
• Investors 1 and 2 have already committed to an LNG plant and eight nuclear reactors, potentially exceeding $200 billion. South Korea has requested pre-purchase agreements, but the U.S. government refuses.
• Related Link.

Westinghouse Stake Investment: The Royalty Problem.

• If investing in U.S. nuclear power, the royalty issue with Westinghouse must be resolved. Currently, South Korea pays Westinghouse approximately 1 trillion won in royalties per reactor.
• The South Korean government insists on securing at least 15% of Westinghouse’s shares and a board seat, but the U.S. government opposes, offering less than 10%.
• Westinghouse’s corporate value ranges from $15–20 billion; 15% would cost around 4 trillion won.
• Even if 4 trillion won is spent to secure a board seat, the royalty issue remains separate. Without resolving royalties, constructing eight reactors could result in net losses.
• The situation is complicated on all fronts.
• Related Link.

Blue Whale Probability Was 0.0002%.

• Audit results are out. In May 2024, six months before Yoon Suk-yeol’s emergency martial law, the Ministry of Trade, Industry and Energy reported, “Geological success probability is uncertain at under 20%, so external promotion should be restrained,” but Yoon insisted, “Political judgment is my responsibility,” and forced the announcement.
• The Hankyoreh analyzed, “Yoon Suk-yeol, cornered by political crisis, desperately needed a narrative-shifting breakthrough.”
• In an editorial, the Dong-A Ilbo criticized, “Over 120 billion won in taxpayer money was wasted, and those responsible even held a performance bonus party,” adding, “At this point, criticism that it was a national fraud would be hard to refute.”
• Related Link.
• Related Link.
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The Fix.

After the Rats, What Next?

• On Marado Island, 526 rats were caught at a cost of 237.75 million won. After relocating all cats from the island to protect the endangered horned grebe, the rat population surged.
• Yet disposing of the captured rats proved problematic. As rodents, they fall under the Animal Protection Act.
• Han Jae-eon (Lawyer, Animal Liberation Solidarity Legal Support Center), interviewed by The Korea Times, stated, “Even if pest control is justified, whether the killing process constitutes animal cruelty must be separately assessed.”
• “If specific actions and intent are proven, punishment is possible,” he added.
• Related Link.

Is the Minister-Legislator Dual Role Acceptable?

• Yoon Hye-in sparked the debate.
• It is true that proportional-representation lawmakers have traditionally resigned when appointed as ministers. However, when a district-based lawmaker becomes a minister, the norm has been to retain the seat while leaving the office vacant.
• Staff salaries remain unchanged: 560 million won for personnel costs and over 100 million won in additional support expenses.
• Lee Young-tae (Korea Ilbo columnist) criticized, “If lawmakers’ appointments to ministerial roles are not blocked, the legislative oversight system will collapse.” “A minister with no time to spare will inevitably neglect legislative duties. They’re simply holding two treats in their hands.”
• Related Link.

ICYMI.

Japan Has Over 100,000 Centenarians.

• 107,677 individuals, of which 88% are women.
• A 114-year-old is the oldest.
• Japan’s population peaked at 128 million in 2008 and is projected to shrink to 87 million by 2070.
• Related Link.

SK Hynix to Lease Intel’s Unfinished Fab.

• It’s a factory Intel left incomplete. For SK Hynix, this appears to accommodate U.S. pressure to expand domestic production while reducing tariff burdens. Reuters reported this.
• SK Hynix currently only operates back-end processing lines in the U.S. DRAM is designated as a national core technology, requiring government review for overseas fabrication.
• Related Link.

Korean Air Signs $44.8 Billion Boeing Aircraft Deal.

• 20 Boeing 777-9s, 25 787-10s, 50 737-10s, and 8 777-8F cargo planes. The total value is $44.8 billion.
• Current fleet: Korean Air operates 166 aircraft, Asiana Airlines 67. The merger is set for December 17th.

KT Breakup Sponsorship: Compensation Ruling for Minor Shareholders.

• Hwang Chang-gyu (former KT chairman) and Koo Hyun-mo (former KT CEO) were accused of creating slush funds during their tenures to funnel political donations to lawmakers. Hwang received a non-prosecution disposition, while Koo was fined 7 million won.
• Minority shareholders filed a damages lawsuit; the first and appellate courts ruled no liability, but the Supreme Court overturned and remanded. Yesterday’s ruling ordered compensation.
• The court ordered Hwang to pay KT 459.76 million won, with Koo jointly liable for 88.28 million won alongside Hwang.
• Related Link.

Worth Reading.

Too Late to Contain.

• Thomas Friedman (New York Times columnist) argues, “It’s already beyond recall.”
• The debate over slowing AI development is over—what’s needed now is to start blocking proven threats. A global system to control AI is essential. The sooner it begins, the better.
• Related Link.

If Slowing Down Is Impossible?

• Accelerating might actually be the right choice. Bret Stephens (New York Times columnist) pointed out, “It’s meaningless unless there’s a guaranteed global slowdown, not just in the U.S.”
• The 1946 Atomic Energy Commission dealt with technology contained in a bottle, but now we must handle one that burst out the moment it was born. We all know there’s no way to put it back in.
• The only way to confront AI’s risks is by using AI itself.
• Related Link.

“I Told You So” May Come Too Late.

• Martin Wolf (Financial Times columnist) is pessimistic. There is no means to halt the competition, and the U.S. government is likely to remain passive. The story goes that we may only realize it’s too late when the worst scenario unfolds.
• There are three scenarios post-singularity.
• First, one where fears prove exaggerated and life continues as usual,
• Second, one where urgent regulations narrowly avert catastrophe,
• Third, one where the feared disaster materializes. AI could evolve autonomously and turn hostile, or humans could weaponize it. By then, declaring “I warned this would happen” would be futile.
• Related Link.

The Psychology of Investing in a Human Extinction Project.

• “It’s like an IPO for the Manhattan Project,” goes the joke, but critics argue the goal is inherently impossible.
• Spencer Jakab (Wall Street Journal columnist) noted, “The hyperscalers’ plans are beginning to hit limits.”
• First, data centers will consume 12% of U.S. power demand by 2030. Calculations suggest 30–60 additional nuclear reactors will be needed.
• Second, some argue it’s impossible due to copper shortages. What will they make all those wires from? By 2040, copper supply will fall 25% short—and new large copper mines take 15–20 years to bring online.
• Third, funding is far from guaranteed.
• Fourth, profitability remains uncertain. The slowdown debate might be a cartel-like move, but it also reflects the market’s lack of conviction.
• Jakab warned, “This could be bad news for the companies selling shovels and picks in the gold rush.” That’s also why Samsung + Nicks shares aren’t rising.
• Related Link.

This Is No Time for Cost-Benefit Analysis.

• “A tariff war must not escalate into a war of bloodshed. Trump’s bill comes in dollars, but the price we pay will never be settled in dollars.”
• Han Sung-hee (Seoul National University professor) advised, “If you start putting every issue on the same bargaining table, there’s no end to it.”
• “The war is not a matter of cost-benefit analysis but one of ‘principle’ and ‘legitimacy,’ and stricter standards must apply than in any other issue.”
• Related Link.

What We Expect from Lee Jae-myung.

• Kwon Tae-ho (editor-in-chief of The Hankyoreh) warned, “Repeated reversals of statements are shaking trust in his capabilities.”
• “This is not what we expect from Lee Jae-myung. What remains is the barrenness of ‘constitutional revision for extended terms’ and ‘dismissal of charges.’”
• Kwon noted, “There are aspects of hitting rock bottom, but also of glimpsing it.” Will tomorrow’s press conference be the real bottom?
• Everyone knows Lee Jae-myung feels wronged. But if public reasons are suspected of private motives, everything collapses. Private motives differ from private gain, and this case is closer to self-defense. Still, the argument is that setting aside grievances is the only way to regain trust.
• Related Link.