U.S. Midterm Butterfly Effect: Kospi Collapses.

• Concerns that reduced data center investment would shrink semiconductor demand.
• Closed at 5,383.8, down 5.3%. Foreign investors net-sold 3.4 trillion won.
• While Samsung Electronics and SK Hynix have long-term supply contracts—suggesting no immediate earnings impact—it failed to calm investor jitters.
• Nicholas Yeo (Abradin investment strategist) said, “Korea and Taiwan are far more exposed to uncertain U.S. capital expenditure.”
• Lee Chae-won (Life Asset Management chairman) said, “It amplified fears of delayed data center construction,” adding, “Delays could further reduce memory chip demand.”
• Hana Securities analyzed, “A Kospi rebound and foreign buying revival are unlikely until at least three months later.”
• A sharper drop is likely today.
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AI Skepticism Triggers Tech Stock Plunge.

• U.S. stocks rose the day after the election, then crashed the next day. Yesterday, the S&P 500, Dow, and Nasdaq fell -4.35%, -3.44%, and -5.52% respectively.
• The New York Times called it “the worst day in nearly two years.”
• The Nasdaq’s market cap shrank by $2.5 trillion in a single day. It has fallen 10% from its monthly high.
• The Financial Times analyzed that Wall Street’s total market cap dropped by $3.2 trillion.
• The Philadelphia Semiconductor Index plummeted 12.25%.
• Micron -17.46%, AMD -17.26%, Marvell -16.43%, Broadcom -10.43%, Qualcomm -9.49%, Nvidia -9.26%. Tesla also dropped 10.77%.
• Charlie McElligott (Nomura strategist) said, “They’re shooting the generals.”
• Matt Lowe (Man Group portfolio manager) said, “If you invest in a project thinking it will generate returns in 6–12 months, but it actually takes 2–3 years, that creates multiple problems.”
• Mike Bell (RBC BlueBay Asset Management head of strategy) explained, “Sometimes the market drops because people are selling, and sometimes people sell because the market is dropping.”
• The volatility index VIX surged nearly 70% to 28.18. It measures expected market volatility over the next 30 days. A reading above 20 signals heightened caution.
• CNN’s Fear & Greed Index hit 20. Below 25 indicates extreme fear.
• Bitcoin plummeted 5.3%.
• Oil prices, which fell the day after the election, rebounded again.
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What Matters Now.

Did the War Lose It?

• JD Vance (U.S. Vice President) claimed, “We lost because of the war.”
• Axios analyzed it as a statement mindful of the next election—suggesting he must distance himself from Trump to survive.
• The only time JD Vance, often treated as Trump’s avatar, openly opposed Trump was over the war. Even during meetings with Netanyahu, Vance voiced dissent.
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What’s Next for the War?

• Trump has repeatedly emphasized ending the war after the election. Axios analyzed three possibilities.
• First, he could strike again. His approval ratings would drop further, oil prices would rise, and he’d have no chance of winning.
• Second, he could negotiate—but the current situation favors Iran far more. They’ll likely exploit Trump’s weakness and raise demands.
• Third, he could go for a strangle strategy: blockading sea routes and tightening economic sanctions. If Iran holds out? The situation worsens. And there’s no budget for it.
• A former White House aide said, “He doesn’t want to be seen as a loser twice—first in the election, then in the war.”
• Trump is about to visit Vietnam and China. He’ll want to project strength, but none of these options are easy.
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Deploying Near Hormuz, but Not Troops?

• Cheonghae Unit’s operational zone will be expanded to near Duqm Port, Oman. The plan is to submit an extension request to the National Assembly after a State Council meeting. The Strait of Hormuz is 650 km away.
• The stated rationale is an increase in pirates in the Gulf of Aden.
• Jeong Bit-na (Ministry of National Defense spokesperson) said, “We will not engage or intervene in the war,” but added, “If attacked, we will respond according to engagement rules under self-defense.”
• JoongAng Ilbo analyzed, “U.S. pressure has continued behind the scenes.” Whether the U.S. will accept this as sufficient contribution remains uncertain.
• Kim Joon-hyung (floor leader of the Nation Innovation Party) said, “We cannot send a unit deployed to combat pirates into a war zone.”
• The Progressive Party argued, “The southern Oman Sea, the Gulf of Oman, and the Strait of Hormuz are a single interconnected battlefield.”
• The People’s Participation Network warned, “This will drag Korea into the U.S.’s war of aggression.”
• With midterm elections over, the appeasement effect on Trump is limited. A Blue House official met by Dong-A Ilbo called it “a token gesture considering ROK-U.S. relations.”
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Election Confirms Data Center Backlash.

• Candidates opposing data centers were elected. Of 47 local referendums on data centers, 46 voted against them.
• Anirban Basu (ABC economist) projected, “The data center construction boom could slow over the next few years.”
• Pat Grady (Sequoia Capital partner) said, “Even already-scheduled projects are likely to be delayed.” Goldman Sachs analyzed that short-term construction pauses could affect approximately 45% of planned new U.S. capacity.
• The South China Morning Post analyzed, “The framing that the U.S. must not fall behind in competition with China did not resonate.”
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Deep Dive.

Everything Has Changed.

• Donga Ilbo noted, “The record-breaking performance of Korean semiconductor firms was more influenced by price hikes than increased sales volume.” There are warnings that America’s blue tsunami could sweep over the Korean economy.
• For a time, prices were set by name alone, but as competition cools, price adjustments seem inevitable.
• In an editorial, The Hankyoreh pointed out, “There is a need to re-examine tax revenue projections and fiscal management plans premised on the semiconductor boom.”
• The Texas thermal power plant, America’s flagship investment project, may face inaccurate demand forecasts.
• There are also arguments that there is no urgency to rush the Alaska LNG project.
• The trade war has also shifted in nature. Lee Si-wook (Korea Chamber of Commerce and Industry, Head of Economic Research) said, “Legally restricting tariffs is virtually impossible.”
• Chinese NAND flash manufacturer YMTC (Yangtze Memory Technologies) has temporarily suspended its IPO.
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Warnings Were Not Unheard.

• Karl Rove (former White House Deputy Chief of Staff) claimed, “If Trump had spent less time as campaign chief and more time working as president, the Republican losses would have been smaller.”
• There were warnings since summer that a 10+ percentage point gap in support between Democrats and Republicans could cost the Senate. In reality, Democrats led by 13 points.
• Trump dismissed polls as fake, convinced he was the most popular Republican president in history.
• Trump called the $400 million campaign fund “my money.” He delayed approval for spending until late summer, and costs soared as ad bookings lagged.
• In Anchorage local news ads, Democrats paid $2,700 for a slot while Republicans paid $30,000 for the same time.
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It Was All Too Clear.

• They promised to end the war, then started a new one.
• They vowed to lower prices, but gasoline costs soared.
• James Blair (Republican election strategy chief) remarked, “The enemy is us—I have seen the enemy.”

Every Texas County Shifted.

• Democratic support rose in every county.
• Trump prioritized loyalty over competitiveness. He silenced dissent and installed Kenneth Paxton (Texas Attorney General) as candidate, pouring in $300 million.
• The Democrats expanded their competitive map. Julie Musz (Democratic campaign strategist) said, “Our job was to hand out as many surfboards as possible.”
• According to the Wall Street Journal, Democratic support rose in nearly every county.
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The Democrats Didn’t Win Because They Did Well.

• “One minute is enough to celebrate victory.” Sherry Bustos (former Democratic congresswoman) warned, “The majority status should not be squandered on divisive rhetoric.”
• Fifty-two percent of voters still viewed the Democrats negatively—only slightly better than the Republicans’ 60% unfavorable rating.
• The Democrats did not resolve the clash between moderates and progressives. Their success lay in focusing relentlessly on the common issue of living costs.
• The Wall Street Journal noted, “While it was a historic victory, it was less a choice for the Democratic agenda than a judgment on Trump.”
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Cryptocurrency Taxation Delayed Another Two Years.

• Lee Hyung-il (Minister of Economy and Finance) said, “I take seriously the need to announce another tax delay.”
• It was originally scheduled to take effect in 2022 after the 2020 Income Tax Act revision, but has been postponed three times—to 2023, 2025, and 2027. This is the fourth delay.
• According to the Financial Supervisory Service, as of June, 44.1% of virtual asset account holders were under 30.
• Kim Woo-cheol (professor at the University of Seoul) said, “Trust in tax policy is being shaken.”
• The People’s Solidarity for Participatory Democracy issued a statement: “If the government is truly for the youth, it should tax investment income and use the revenue to support housing stability and asset formation for young people.”
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Another Take.

“Not Trapped in an Algorithm Prison.”.

• President Lee Jae-myung’s first episode of “The President’s Y” has been released.
• It rebuts Kim Eo-jun (CEO of Ddanzi Ilbo)’s warning that “you are trapped in an algorithm prison.”
• He said, “Asking me to refrain from social media sounds the same as asking why the president should go to the field to meet people.”
• He added,
• “My belief is that real people live on SNS.”
• “There’s a lot not in the reports. I get many ideas from SNS.”
• “I’m not trapped (by algorithms). I see curses and criticism—I’ve developed thick skin, so there’s no need to worry.”
• “Controversy arises because something has value. The more rational debate and discussion, the better.”
• “I sleep about six hours a day.”
• “If Yoon Suk-yeol had broadcasted Cabinet meetings live, could a martial law declaration have been possible? I plan to continue live-streaming Cabinet meetings.”
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Democrats’ Seoul Seats Could Be Halved.

• “If this continues, we’ll be halved from 37 seats—won’t we?” Kim Young-bae (Democratic Party lawmaker) said in a BBS interview.
• A Democratic Party lawmaker met by Chosun Ilbo said, “There are even concerns we might not secure even 10 seats, not just half.”
• Democratic Party lawmakers representing Seoul constituencies held a meeting, where opinions emerged to ease comprehensive real estate taxes for non-resident single-homeowners.
• Seoul apartment sale prices have risen for 91 consecutive weeks. Nam Hyuk-woo (Woori Bank researcher) said, “We must wait to see if this leads to a structural decline.” He added, “There’s also a significant possibility that the jeonse crisis could spread to non-apartments over 25 pyeong.”
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Will the Special Prosecutor Bill for Manipulated Indictments Pass Today?

• Speed is the name of the game. The bill was sent to the plenary session the day after passing the Legislation and Judiciary Committee, and the People Power Party has begun a filibuster. It will likely be forced to end after 24 hours, with a vote expected around 4 PM today.
• The special prosecutor investigation includes up to 20 dispatched prosecutors, totaling a maximum of 309 personnel, with a probe period of up to 200 days including 20 days of preparation. It is the largest single special prosecutor case in history.
• Han Byung-do (Democratic Party floor leader) said, “We have completely removed the controversial indictment cancellation clause,” adding, “The opposition has no more grounds for opposition.”
• Hong Ik-pyo (Blue House Political Affairs Chief) stated, “This is not about protecting the president, but investigating the prosecutorial power that abused its authority in the past.”
• Jang Dong-hyuk (People Power Party leader) claimed, “This is not a special prosecutor for indictment cancellation, but for regime cancellation.”
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Prosecutors Can’t Investigate, but Special Prosecutors Can?

• Kyunghyang Shinmun criticized in an editorial, “Blocking prosecutors from investigating while assigning investigation and prosecution to a special counsel inevitably invites accusations of double standards and hypocrisy.”
• Kyunghyang Shinmun pointed out, “If President Lee Jae-myung appoints a candidate recommended by the Democratic Party, it would mean he is recommending and appointing a special counsel to investigate his own case,” adding, “Alternative measures should be considered to prevent the appearance of fairness from being compromised.”
• The Hankyoreh suggested, “It is worth considering that the National Assembly agree on and jointly recommend one candidate.”
• JoongAng Ilbo headlined on its front page, “’Dead law’ revived for the manipulated indictment special probe.” A supplementary clause in the special prosecutor bill states, “Prosecutors’ investigative and command authority shall follow pre-amendment Criminal Procedure Law provisions.”
• Lee Geun-woo (Gachon University professor) said, “Any defense attorney in this case would inevitably challenge prosecutors’ participation in the investigation.”
• Kim Han-gyu (Democratic Party lawmaker) countered, “Similar clauses existed in previous special prosecutor bills for the National Election Commission.”
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The Fix.

KTX+SRT Integration Boosts Passenger Numbers.

• Daily average passengers in September and October rose to 322,000, a 12.6% increase.
• The fare discount and mileage benefits reduced transportation costs by 51.5 billion won.

ICYMI.

Sell for 20,000 Won, Receive 8,440 Won.

• 79% of restaurant owners surveyed by Participatory Democracy (참여연대) reported reduced settlement payments after using promotions on delivery platforms like Baedal Minjok (배달의민족) and Coupang Eats (쿠팡이츠).
• For a 20,000 won order, applying a 7.8% commission fee, 3% payment fee, 3,400 won delivery cost, and 6,000 won discount leaves the owner with 11,560 won in deductions—and a settlement of 8,440 won.
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Korea-Japan Marriages on the Rise.

• Marriages between Korean husbands and Japanese wives increased by 26% to 1,494 cases.
• Marriages between Japanese husbands and Korean wives increased by 28% to 199 cases.
• Multicultural marriages decreased by 0.2% to 21,399 cases, and multicultural births decreased by 0.5% to 13,347 cases.
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Is Trump’s Mental State Intact?

• Whether due to shock or not, he spoke in a rambling, incoherent manner. “I think the Democratic Party will be destroyed if they pursue impeachment,” he said, adding, “Is it because the country is doing well? Our country has never been more prosperous.”
• Midway through discussing elections, he suddenly remarked, “Imagine a chandelier hanging in a ballroom.”
• A White House official met by The New York Times said, “Trump is still dazed.”
• Chris Christie (former New Jersey governor) remarked, “Just as most people need oxygen, Trump needs attention.”
• Concerns are growing that he may act far more erratically, becoming increasingly chaotic and dangerous.
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Pacific Saury Turns to Gold.

• Pacific saury prefer cold waters, but rising sea temperatures have reduced catches by 44%.
• Korean dried saury (gwamegi) prices have risen from 26,000 won for 10 pieces last year to 33,000 won this year.
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Worth Reading.

Lexicographic Preference.

• Open a dictionary and you start with ‘가’. Lexicographic preference means fixing one priority and ordering the rest accordingly.
• Jang Deok-jin (Seoul National University professor) believes Lee Jae-myung (president) has fallen into the trap of lexicographic preference.
• Jang Deok-jin pointed out, “A rational choice made while avoiding something will inevitably yield lower results than a choice made when no such avoidance is necessary.”
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Is a Silent Ministry Necessary?

• Lee Jae-myung (president) frequently uses the saying, “To a Buddha, only Buddhas are visible; to a pig, only pigs are visible.”
• Park Yong (Donga Ilbo editorial writer) warned, “One must always guard against the risk of groupthink if surrounded by aides or supporters who chant ‘To a Buddha, only Buddhas’ and focus on pleasing words and appearances.”
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Capturing the Center Raises Approval Ratings.

• Unlike Yu Si-min (author) and Kim Eo-jun (CEO of Ddanzi Ilbo), who warned, “We must not lose our core group,” Jeong Han-ul (director of the Korean People Research Institute) analyzed, “Strengthening ideological clarity is more likely to worsen declining approval ratings.”
• Jeong Han-ul emphasized, “The more the Democratic Party is perceived as ideologically centrist, the higher its favorability,” adding, “The latent power of a centrist+prudent approach is clear.”
• “The issue is not the centrist line itself, but the failure to make its presence felt,” according to the analysis.
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