00:00What did you make of what happened in Korea overnight?
00:04It was certainly dramatic. I think it shows a couple of things. I think one is it shows just
00:10how vulnerable this market is in terms of herding and volatility. We saw 7.2% move in 97 minutes
00:17in the KOSPI. That's $300 billion worth on essentially a misunderstood kind of statement.
00:24It was the idea they were going to tax excess profits. What the minister actually meant was
00:29that the extra tax revenues they're already making from AI should maybe be redistributed.
00:34It was not about any tax on AI, but you suddenly saw $300 billion wiped out just from the KOSPI.
00:39Of course, the KOSDAQ fell as well. Other markets started falling. You saw hundreds of billions
00:42of paper wealth just kind of disappear, vanish quite quickly on a slight misunderstanding.
00:47That shows the kind of market we're in, but it's really, really important to emphasize.
00:50We're about to go into a load of risk events. I think short term, there's going to be more
00:53volatility, more damage. All these dips will be bought, and we will see much higher levels
00:59until there's genuinely an AI negative catalyst, and I just don't see that on the horizon.
01:04So I think in the short term, it reflects, hey, get prepared for even more volatility.
01:09KOSPI could drop 20% from this morning's high and still be higher than any level seen in history
01:14up until three weeks ago. So that's pretty scary. That shows the pace of these moves.
01:17So expect even more volatility. Expect even more big swings, but it's not the end of the market.
01:21It's not the end of this incredible, bubblish bull market that's going to go absolutely crazy
01:26before it ends in tears.
01:28OK, the dips will be bought. Mark, as you cast your eye across to Japan then, from South Korea,
01:34Scott Besson coordinating more closely, it seems, with the Japanese. Maybe he's pushing for the
01:39BOJ to do more. Maybe he's pushing for the government to give the BOJ space to do that.
01:44What is your take of what is happening in terms of the relationship between Scott Besson and his
01:47Japanese counterparts, and what that means for the Japanese yen that's been choppy in the session?
01:52Yeah, I think there's probably two takeaways. One is we seem to have survived the visit. I'm not
01:57sure whether we're still going to get more headlines or takeaways, but I think there hasn't
02:03been too much dramatic apart from that close coordination. But yet we saw the dollar yen
02:06really move quite dramatically, which shows how jittery traders were about that meeting.
02:11So I actually think that's one of the risk events that seems to be out of the way as we
02:15move
02:15on to the China events next. Okay. And before that, the gills are open, Mark. I know you're
02:21geographically a long way away from this, but this volatility in UK politics falls into a market
02:26where yields are already on the rise, which perhaps something we need to keep in mind.
02:31Yeah, I actually think this could become globally relevant because, you know, we have that a lot of
02:36concern about globally about long end yields. That's a long term story. It's not a short term story,
02:40but gilts might suddenly make it a short term story. So it might make it another risk event in the
02:44short term. I think there will be contagion if gilts really kind of sell off again.
02:48What is interesting probably on that story is gilts have seen quite a large reaction so far.
02:52Sterling is only just starting to get in the move. So if this gets worse, you'd expect that
02:55sterling is where there's probably more catch up to be done and then spill over into the rates
02:59markets. I don't think gilts itself is where the risk reward is.
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