September 24, 2025 • 23 mins
Wall Street's torrid surge from April's meltdown is showing signs of exhaustion as stock traders await fresh catalysts amid risks stemming from a labor-market slowdown to sticky inflation.
While the S&P 500 has defied September's gloomy reputation as the worst month for equity returns, the gauge failed to gain traction on Wednesday. The market ebullience saw the index notching almost 30 records in 2025, eclipsing the average year-end analyst forecast and spurring calls for consolidation. For more, we turn to Rebecca Walser, President at Walser Wealth Management.
And, South Korea says investment projects in the US will remain in limbo until visa issues are resolved, in the wake of the Trump administration's immigration raid at a Hyundai-LG Energy battery plant in Georgia. South Korean Prime Minister Kim Min-seok sat down with Bloomberg's Shery Ahn in Seoul for an exclusive interview on the state of Korea-US relations, dealing with China & Japan, and the prospects of a Trump-Kim Jong Un meeting at next month's APEC summit in Gyeongju.
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Episode Transcript
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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Welcome to the Daybreak Asia Podcast. I'm Doug Krisner. The
US equity market was in retreat in the last session.
We had the Dow, the S and P, and the
Nasdaq each down roughly three tenths of one percent. Strategist
at Bank of America noted the S and P is
trading at statistically expensive levels. Even Fetchhair J. Powell said
this week that equity prices are fairly highly valued. Meantime,
(00:34):
in New York, US Treasury Secretary Scott Besant reportedly met
with South Korean President Lee j Jung. The Chosun Daily reports.
Lee explained to Besant that South Korea and Japan are
very different in terms of economic scale, foreign exchange markets,
and infrastructure, and Lee went on to express hope that
trade negotiations would take those aspects into account. In a moment,
(00:57):
we'll bring you our exclusive conversation with South Korean Prime
Minister Kim Minsook, but we begin here in the States,
and our guest, Rebecca Wallser of Walls or Wealth Management.
She joins us here in the studio. Always great to
see you, Thanks so much for stopping by. So you're
here for client meetings, you're going to do some media
appearance as well. And I'm curious about what you're hearing
from clients right now. What are they saying about the
(01:19):
way in which this market's been behaving. Are they nervous?
Speaker 3 (01:23):
You know, I think a lot of people are a
little past the nerves when all of the prognostications in
April that came out, when we had you know, obviously
Proclamation Day in the beginning of April, of what the
tariff's structure was going to look like, and really I
think the financial media kind of overkilled the message of Oh,
this is going to be absolutely horrific. The economy is
going to explode. Everything's going to go awful. It's going
(01:44):
to be massive inflation, you're going to lose jobs, you're
not going to get manufacturing to come back, You're going
to have all these problems. And so a lot of people,
Doug actually unfortunately not not our clients, because we weren't
saying that message, but a lot of people out there
actually went ahead and really took that advice to heart
and so and missed out, yes, missed out on some
of these big tech you know wins, these big IPO wins,
(02:06):
these things that we've been talking about all year that
are just phenomenal. They can participate because they listen to
the financial media. So I actually think my theory is
that I think there's some backlash against financial media. Some
people are If you look at the ratings numbers and
you see kind of what they've done over since April,
you'll see kind of a drifting down. I think that
they're upset and maybe going to podcasts and alternative media
(02:27):
and things like that.
Speaker 4 (02:28):
Not that Bloomberg's going to go anywhere.
Speaker 2 (02:29):
But Okay, so let's say that we've added about fifteen
trillion dollars from that April low. Is that a fair
estimate something around that? If you look at the broader
market and and a multiple on the S and P
right now of about twenty five times, Yeah, seems to
be a little expensive. Do you think people generally have
become a little complacent?
Speaker 3 (02:50):
I mean, I don't know if we're at the nineteen
ninety six irrational and zuber and stage that Alan Greenspan
talked about, and if you think about that, that's the
year that he said that that preceded the actual bubble crashing.
Speaker 4 (03:00):
You know, by about four years.
Speaker 3 (03:01):
So I don't know if the people are irrationally exuberant
or if really truly everyone is beginning to understand that
this is the end of normal.
Speaker 4 (03:11):
Ways of life as we've.
Speaker 3 (03:13):
Known them, that this technology is so far outpacing what
we can otherwise accomplish just with human capacity, like the
exponential GDP DOUG is.
Speaker 4 (03:25):
Going to be phenomenal.
Speaker 3 (03:26):
The problem is that how do you continue to make
the human actually contribute to positively to GDP Because if
you outsource all human beings and we're positively contributing.
Speaker 4 (03:36):
We don't have to.
Speaker 3 (03:38):
Well, that's all fine and good, but then how do
we work out the economics of what you're earning, what
you're making.
Speaker 4 (03:42):
Do we not have money anymore? Are we really going
to utopia?
Speaker 3 (03:45):
So I don't think there's a rational exuberance, but I
do think there's pre exuberance before we actually monetize. We're
in the process of monetizing.
Speaker 2 (03:55):
So tell me where you're finding opportunity then.
Speaker 3 (03:57):
I mean, I think there's lots of opportunities. You know,
we've had some great recent IPOs, we've had some great
developments on consumer lending on the blockchain, for example, Figure technologies.
It's basically able to do a home equity loan. They're
claiming on the blockchain within ten days, cutting the normal
forty two day cycle which is conventional.
Speaker 4 (04:16):
So there's a lot.
Speaker 3 (04:17):
Of things that are beginning to actually monetize. In other words,
we're actually going to use the blockchain. We're not just
doing AI chat GPT in our daily lives and trying
to find a faster router or a better way to
write a paragraph. We're actually seeing monetization. That's just the beginning.
It's the tip of the iceberg, and it's going to
begin in mass and I think what we'll really start
to see is stable coin coming to four bear, especially
(04:40):
since the Genius Act passed, which as you know, is
a one to one reserve ratio of reserves. In other words,
if I issue twenty billion of stable coin, I have
to have twenty billion of liquid reserves and either US
dollars or US short term treasury short treasury bills. So
this is basically the ability to have third parties enter
into a currency operation that is backed by the full
(05:04):
faith and credit of US dollar US Treasury, but operated
and regulated somehow.
Speaker 4 (05:09):
You'll see an entity coming.
Speaker 3 (05:10):
We have another act that's potentially going to go through Congress,
which will be a regulatory framework for stable coin. So
you're looking at the very early stages, Doug, of the
very beginning of a new currency system that would in
fact replace the use of the US dollar completely.
Speaker 2 (05:26):
Whether we're talking about AI technologies, data centers, or whether
we're talking about something that's related to the blockchain, we're
talking about a lot of power demand for electricity. Is
that something that you're playing right now. I know when
you and I have spoken about this in the past,
you've indicated that you're interested in taking some positions in
power companies, maybe utilities, even as that.
Speaker 3 (05:47):
Still absolutely absolutely specifically nuclear power. I think nuclear power
is really our only real, true scientific, mathematical probability of
success to have enough power. Additional coal out nowhere near
the capacity that we need, gas, natural everything else beyond
actual coal fired electricity is subpart. Right, So if electricity
(06:11):
is already, if coal fired electricity is already, we know
not enough power for what the AI checks that everyone's
writing on these pe ratios for all these tech companies,
the AI checks that are being written off of the
multiples they expect AI to come. We have to have
the power grid and we don't have it. Electricity coal
fired is not going to be enough mathematically not enough,
(06:31):
Gasoline oil not enough. We have got to have some
kind of nuclear presence, and so I would bet on
nuclear stocks where their companies are actually looking at building
nuclear power generators, power plants. There's one Osclow that's basically
projected to have an actual nuclear power plant operational between
twenty twenty seven and twenty twenty eight. It's based in Idaho.
Speaker 2 (06:53):
So if these hyperscalers are ramping up at a very
aggressive rate, is there the risk that they don't have
the power they need?
Speaker 4 (07:00):
There's not the risk.
Speaker 3 (07:01):
There is the absolute mathematical certainty that if we get
too much operational AI before the power has caught up,
we are sitting ducks.
Speaker 4 (07:10):
We will have to ration power. There's not enough.
Speaker 2 (07:14):
Well, that sounds inflationary too, which then takes me to
the It takes me to the FED. We heard from
Powell this week he said that the near term risk
to inflation are tilted to the upside. So there's the
tariff story. We're talking about the power story now, which
your outlook for inflation.
Speaker 3 (07:31):
I mean, unfortunately, as you know I've mentioned to you
multiple times, Doug, we really have entered the very beginning
stages of a debt spiral, like I know, and no
one's talking about it, but the fact that our interest
has gone from the fourth largest expense to the second
largest expense as fast as it has in the last
few years.
Speaker 4 (07:47):
We hit the second largest expense.
Speaker 3 (07:49):
It surpassed Medicare Medicaid last year in May of twenty
twenty four.
Speaker 4 (07:53):
Total debt service total.
Speaker 3 (07:55):
Amount paid on the federal budget for that year, we've
surpassed it.
Speaker 4 (07:59):
So now it's only second to our but mammoth.
Speaker 3 (08:02):
Social Security just under a trillialler, and we expect it
to be closer to one point two trillion next year.
And that's with them calculating the refinancing of so much
of it with lower interest rates because they are they
have to, like, we can't afford the interest that we
are now being charged on an ongoing basis.
Speaker 4 (08:22):
It's unsustainable.
Speaker 3 (08:24):
And unfortunately, because we keep borrowing and we're charging interests
on top of interest, that interest grows every single year.
And the only chance that we have that our GDP
actually outpaces our actual interest growth is AI is a
Fourth Industrial Revolution is the new frontier of productivity that
is just unmatched at the human level.
Speaker 2 (08:44):
Are you focused squarely on opportunities in the States or
are you looking offshore?
Speaker 3 (08:48):
I mean, I think that there's a lot of robotics
that you have to look outside of the United States.
You have to look at German manufacturing, you have to
look at Japanese manufacturing, you have to look at outside
opportunities in this world. The United States is soorled and
going to be a forethought and a four leader, But
I don't think we're going to be in this race alone,
and I don't think we'll finish number one in every category.
Speaker 2 (09:09):
So we started the conversation by talking about how far
the equity market is run from the April lows and
how expensive things are right now. Are you holding on
the cash or or when cash comes in, are you
deploying it immediately? Are you fully invested or is there
a little dry powder that Rebecca Wallser is keeping on
the sidelines.
Speaker 3 (09:27):
I mean, I do think that everyone should have a
little dry powder all times, just because there could be
something we want to capitalize on that it's not a huge,
obviously position or big part of the portfolio, but for
the most part, we're pretty fully deployed. We have, you know,
the dry powder that we normally have, which would we
would say at least a ten percent position in general.
And I would say that, you know, you're just looking
for opportunities. I do think there will be. What investors
(09:50):
need to understand, Doug, is that monetization of new technology
is always bumpy. It is always historically bumpy. It is
not a from point A straight to point B line
up to the right. It's not how it goes. It's bumpy.
And so as long as people are prepared for pullbacks,
you know, like we had like at one point this
year more than one time, we had people not.
Speaker 4 (10:11):
Really happy with Nvidia.
Speaker 3 (10:13):
I mean, you know that these things happen, and it's cyclical,
especially as we monetize, as we go from prognosticating value
to actual realize value, it gets bumpy.
Speaker 2 (10:23):
So you talked about a debt spiral being one of
the risks out there that you're focused on. I'm curious
about other risks that you see on the horizon.
Speaker 3 (10:31):
Well, of course, there's the biggest risk of all, and
that is that we are globally dedollarizing, which you and
I have talked about and we've talked about China's intent
and written papers one hundred year plans in place written
that they want to be the number one military and
economic superpower in the world, bar none, and that includes
taking down the United States of America. So clearly, I
(10:51):
think that China and what they've orchestrated economically with their
Built and Road initiative, what they've orchestrated with really being
taking over from the Bank of International Settlements the BIS.
They took over the project Mbridge, which was a central
bank cryptocurrency project about you know, central branks transacting on
the blockchain and you know, and their domestic currencies, central
(11:15):
bank digital currencies. I mean, they are just so advanced
from a perspective of being on the blockchain and being
the new center of kind of financial hub. I mean,
if you go to Dubai, you'd think they would be
the investment capital of the world. I've been there, and
it's insanity for us to be so arrogant that we
(11:35):
just think the United States is going to be on
the top because of the US dollars.
Speaker 2 (11:38):
Even so, the Chinese economy seems to still be struggling.
They have a problem with confidence the real estate market
is still not doing well. A year ago, the government
made a major pivot in applying a lot of stimulus
to different segments of the economy, that includes fiscal monetary
They targeted the housing market as well, and things still
(11:59):
have been somewhat like cluster. That doesn't concern you at all.
The fact that the animal spirits in China right now
don't seem to be rising to the occasion.
Speaker 3 (12:08):
Yeah, don't get me wrong. I don't want to China
to succeed. I just see them as a sincere threat.
But you know, of course they absolutely have some economic problems,
just like I would say to you, like Japan with
their debt to GDP which is over two hundred percent,
that's economically unheard of, not viable, can't work, and yet
it continues to work. So I feel like we are
(12:28):
globally very quickly approaching the end of fiat debt at
central bank fiat debt. We are going to go to
tokenization of hard assets, real reserves, and obviously to currency
on the blockchain, and it's going to be a complete
shift of currency.
Speaker 2 (12:45):
Well, we'll see where we go from here. Any comments
on gold, I know we pulled back a little bit today,
but we're very close to record highs. What do you
think is happening here? Is this all about central banks
and then the retail crowd that came in at the
last part of the rally that we had.
Speaker 3 (12:59):
Yeah, I'm I think absolutely it's central bank related. You
have Basso three that went into effect, which basically moved
Goal from a Tier three asset to a Tier one
asset and really made the central banks want to step
up and own it for all of the things that
that meant as far as reserves at their central bank.
But also Doug again, we are closing to closing in
to the end of the people's belief in fiat currency,
(13:22):
the fiat debt system, the fiat money multiplying system. I'm
on a fractional reserve system. I to give you one hundred,
you lend out ninety. Now we have fake money because
there's not really one hundred and ninety. There was one
hundred and it became one hundred and ninety. So the
money multiplier, fractional reserve, all of these things. When we
moved to the blockchain, and it's all publicly notable, traceable, seeable,
that's why you got like the staple Cooin Act that
(13:44):
requires the Genius Act, that requires these stable coins to
have a one to one reserve relationship so people can
trust it and it'll be on the blockchain'll be transparent.
So we are getting close to the end of fiat
currency and the government can issue whatever they want.
Speaker 2 (13:56):
All right, We'll leave it there. It's always a pleasure. Rebecca,
Thank you so very much. Rebecca wi As president of
walls Er Wealth Management, joining us here on the Daybreak
Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm
deg Krisner. The US and South Korea are still trying
(14:18):
to finalize a trade deal, and these negotiations have included
discussions around investment projects in the US. However, South Korea's
Prime minister says those projects will remain in limbo now
until visa issues are resolved. Prime Minister Kim Minsook spoke
exclusively to Bloomberg sherry On in Seoul. Here's part of
(14:38):
that conversation.
Speaker 4 (14:40):
I Bonhof Salmon.
Speaker 5 (14:41):
Dis negotiation wasn't initiated by us. We didn't start from
a position of advantage, nor did we raise the issues.
Isn't that the case for the entire world since the
whole world is negotiating under the new conditions presented by
the United States. Rather than insisting on specific conditions, the
correct answer would be that certain things are simply difficult
(15:04):
to achieve. Therefore, anything that exceeds the limits of what
the Republic of Korea can bear in terms of national interests, acceptability, capacity,
or public understanding will be quite difficult to undertake.
Speaker 1 (15:20):
Are the issues that need to be resolved around the
three hundred and fifty billion dollar investment fund into the US.
Speaker 5 (15:27):
That's generally the case since the framework for the large
amount is already said. The fact that the amount is
fixed means it started with the expectation that, depending on
how that amount is structured, it could potentially be mutually beneficial. However,
the structure itself, how the funds are raised, or how
the profits are distributed, these things need to be within
(15:48):
the bounds of what's considered normal, and when explaining to
our Korean citizens, it needs to be at a level
where they can understand and accept it. Above all, it
must be within the capacity of our Korean economy to handle.
Speaker 1 (16:02):
President E talked about the need for a currency swap
agreement in order to avoid any shocks to the Korean
economy when delivering these funds.
Speaker 6 (16:13):
What has Washington said so far?
Speaker 5 (16:18):
I haven't heard the exact details yet on how they've
responded so far, However, as the President has already stated
that amount currently represents seventy to eighty percent of Korea's
total foreign exchange reserves. Without measures like swaps or similar mechanisms,
the impact on the Korean economy will be too severe. Also,
as a nation that experienced a foreign exchange crisis, public
(16:41):
vigilance on this matter is high. I believe these factors
must be taken into consideration.
Speaker 1 (16:48):
When it comes to the tariffs themselves, we still have
to see the US actually louring car tariffs on South
Korea to the agree fifteen percent.
Speaker 6 (16:58):
And even if.
Speaker 1 (16:59):
The terriffs we're ignored the terriff advantage that South Korean
carmakers have over Japan, for example, twenty a half percent
before the Trump trade deal, that's going to disappear. How
painful is that for South Korean firms right now?
Speaker 5 (17:15):
Done? First, the FTA structure between US and the US
is changing, and that will create a burden. Naturally, if
tariffs drop from twenty five to fifteen percent, that will
be better, But it's still harder than before, and especially
at this point, there's the difficulty of having to bear
(17:35):
to twenty five percent until this negotiation concludes. So, in short,
there are difficulties. Yundimotor and others are facing particular challenges. However,
as far as we understand, Yndimot currently plans to navigate
this situation without changing its pricing policy for now, I
(17:56):
personally view this as a relatively wise approach. The government
is reviewing various policy options to see what can be
done to alleviate the burden on the automotive sector caused
by the ongoing negotiations.
Speaker 1 (18:12):
More problematic also for Korean companies has been the visa issue,
especially with the plant in Georgia.
Speaker 6 (18:19):
What sort of.
Speaker 1 (18:19):
Resolution can we expect on that front.
Speaker 5 (18:24):
Before discussing what kind of solution there is? Realistically, without
a solution, it's difficult to invest in the United States
and carry out the various joint projects currently planned between
South Korea and the US. We absolutely must find a solution.
Several projects are underway between South Korea and the US.
(18:45):
Without resolving the visa issue, meaningful progress remains virtually impossible.
The detention incident dealt a severe blow not only to
the general Korean public, but especially to the workers who
are actually detained and the absence of firm assurances regarding
their safety, both they and their families are understandably reluctant
(19:07):
to enter the US again. While this matter remains unresolved.
Speaker 1 (19:12):
Our investment projects right now halted until some resolution is
acquired on the resa issue.
Speaker 5 (19:19):
Although the projects have not been entirely halted or formally
placed on hold, it will be very difficult for a
large number of workers to enter or re enter the
US until this problem is resolved.
Speaker 1 (19:32):
South Korean firms are also seeing challenges, for example, in China,
especially when it comes to US CHIP restrictions for Beijing
Korean firms operating in China. How can South Korea manage
the growing tech rivalry between China and the United States.
Speaker 5 (19:53):
Well, that's a problem the whole world is grappling with.
It's a natural concern, especially for countries like Korea that
share significant economic ties with both the United States and China. Naturally,
we strive to maintain relations with all neighboring countries. However,
we understand that the overall plate we stand on has
(20:14):
tilted slightly compared to the.
Speaker 6 (20:16):
Past, in what way.
Speaker 5 (20:19):
The terrain itself has tilted towards strengthening our relationship with
the United States. I can answer it in that way,
what does.
Speaker 6 (20:27):
That mean for China Korea relations?
Speaker 5 (20:29):
Then, Kugos, I think China understands this too. If Korea,
standing on this larger terrain, demonstrates appropriate efforts to maintain
its relationship with China understanding the change terrain, then even
on that terrain, Korea can still strive to maintain its
relationship with China.
Speaker 1 (20:51):
But the US has had so many demands for South Korea, including,
for example, raising defense spending five percent.
Speaker 6 (21:00):
Of GDP as more NATO, for example.
Speaker 4 (21:03):
Kat Christen.
Speaker 5 (21:07):
With respect to defense spending, I do not believe it
must necessarily be considered in connection with our relations with
other countries. Rather, it is an area that can be
expanded as part of strengthening our independent national defense by
how much recently we've mentioned three point five percent and
we did so because we judge that this is a
(21:29):
level we are capable of sustaining.
Speaker 1 (21:32):
Are we expecting any contact between North Korean leader Kim
zongun and President Trunk during the upcoming EPIK summit.
Speaker 5 (21:39):
Tounta both of them are currently evaluating the relationship between
the two parties positively. Since unforeseen events can always occur,
I believe we should keep that possibility open. But so far,
North Korea and Chairman Kim Jong un are showing no
signs of changing their stance.
Speaker 6 (22:02):
President E.
Speaker 1 (22:05):
Created a positive foundation for South Korea Japan ties during
his last visit to Tokyo.
Speaker 6 (22:12):
We might see a leadership change in Japan.
Speaker 1 (22:15):
Could this have an impact on Korea Japan relations as well?
Speaker 4 (22:20):
We didn't go to town.
Speaker 5 (22:21):
We hope that won't be the case. We believe it
is undesirable for relations between nations to be significantly impacted
or altered by changes in leadership. While we also face
various challenges, we have prioritized diplomatic continuity and are working
to further improve relations with Japan. Regardless of who becomes
(22:42):
Japan's new prime minister, we expect and hope that they
will consider various factors to ensure that the current newly
formed friendly hemisphere is not adversely affected.
Speaker 2 (22:53):
That is South Korea Prime Minister Kim mins speaking to
Bloomberg's Sharing on in Seoul. Thanks for listening to today's
episode of The Bloomberg Daybreak Asia Edition podcast. Each weekday,
we look at the story shaping markets, finance, and geopolitics
in the Asia Pacific. You can find us on Apple, Spotify,
(23:13):
the Bloomberg Podcast YouTube channel, or anywhere else you listen.
Join us again tomorrow for insight on the market moves
from Hong Kong to Singapore and Australia. I'm Doug Prisoner
and this is Bloomberg
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:10):
Welcome to the Daybreak Asia Podcast. I'm Doug Krisner. The
US equity market was in retreat in the last session.
We had the Dow, the S and P, and the
Nasdaq each down roughly three tenths of one percent. Strategist
at Bank of America noted the S and P is
trading at statistically expensive levels. Even Fetchhair J. Powell said
this week that equity prices are fairly highly valued. Meantime,
(00:34):
in New York, US Treasury Secretary Scott Besant reportedly met
with South Korean President Lee j Jung. The Chosun Daily reports.
Lee explained to Besant that South Korea and Japan are
very different in terms of economic scale, foreign exchange markets,
and infrastructure, and Lee went on to express hope that
trade negotiations would take those aspects into account. In a moment,
(00:57):
we'll bring you our exclusive conversation with South Korean Prime
Minister Kim Minsook, but we begin here in the States,
and our guest, Rebecca Wallser of Walls or Wealth Management.
She joins us here in the studio. Always great to
see you, Thanks so much for stopping by. So you're
here for client meetings, you're going to do some media
appearance as well. And I'm curious about what you're hearing
from clients right now. What are they saying about the
(01:19):
way in which this market's been behaving. Are they nervous?
Speaker 3 (01:23):
You know, I think a lot of people are a
little past the nerves when all of the prognostications in
April that came out, when we had you know, obviously
Proclamation Day in the beginning of April, of what the
tariff's structure was going to look like, and really I
think the financial media kind of overkilled the message of Oh,
this is going to be absolutely horrific. The economy is
going to explode. Everything's going to go awful. It's going
(01:44):
to be massive inflation, you're going to lose jobs, you're
not going to get manufacturing to come back, You're going
to have all these problems. And so a lot of people,
Doug actually unfortunately not not our clients, because we weren't
saying that message, but a lot of people out there
actually went ahead and really took that advice to heart
and so and missed out, yes, missed out on some
of these big tech you know wins, these big IPO wins,
(02:06):
these things that we've been talking about all year that
are just phenomenal. They can participate because they listen to
the financial media. So I actually think my theory is
that I think there's some backlash against financial media. Some
people are If you look at the ratings numbers and
you see kind of what they've done over since April,
you'll see kind of a drifting down. I think that
they're upset and maybe going to podcasts and alternative media
(02:27):
and things like that.
Speaker 4 (02:28):
Not that Bloomberg's going to go anywhere.
Speaker 2 (02:29):
But Okay, so let's say that we've added about fifteen
trillion dollars from that April low. Is that a fair
estimate something around that? If you look at the broader
market and and a multiple on the S and P
right now of about twenty five times, Yeah, seems to
be a little expensive. Do you think people generally have
become a little complacent?
Speaker 3 (02:50):
I mean, I don't know if we're at the nineteen
ninety six irrational and zuber and stage that Alan Greenspan
talked about, and if you think about that, that's the
year that he said that that preceded the actual bubble crashing.
Speaker 4 (03:00):
You know, by about four years.
Speaker 3 (03:01):
So I don't know if the people are irrationally exuberant
or if really truly everyone is beginning to understand that
this is the end of normal.
Speaker 4 (03:11):
Ways of life as we've.
Speaker 3 (03:13):
Known them, that this technology is so far outpacing what
we can otherwise accomplish just with human capacity, like the
exponential GDP DOUG is.
Speaker 4 (03:25):
Going to be phenomenal.
Speaker 3 (03:26):
The problem is that how do you continue to make
the human actually contribute to positively to GDP Because if
you outsource all human beings and we're positively contributing.
Speaker 4 (03:36):
We don't have to.
Speaker 3 (03:38):
Well, that's all fine and good, but then how do
we work out the economics of what you're earning, what
you're making.
Speaker 4 (03:42):
Do we not have money anymore? Are we really going
to utopia?
Speaker 3 (03:45):
So I don't think there's a rational exuberance, but I
do think there's pre exuberance before we actually monetize. We're
in the process of monetizing.
Speaker 2 (03:55):
So tell me where you're finding opportunity then.
Speaker 3 (03:57):
I mean, I think there's lots of opportunities. You know,
we've had some great recent IPOs, we've had some great
developments on consumer lending on the blockchain, for example, Figure technologies.
It's basically able to do a home equity loan. They're
claiming on the blockchain within ten days, cutting the normal
forty two day cycle which is conventional.
Speaker 4 (04:16):
So there's a lot.
Speaker 3 (04:17):
Of things that are beginning to actually monetize. In other words,
we're actually going to use the blockchain. We're not just
doing AI chat GPT in our daily lives and trying
to find a faster router or a better way to
write a paragraph. We're actually seeing monetization. That's just the beginning.
It's the tip of the iceberg, and it's going to
begin in mass and I think what we'll really start
to see is stable coin coming to four bear, especially
(04:40):
since the Genius Act passed, which as you know, is
a one to one reserve ratio of reserves. In other words,
if I issue twenty billion of stable coin, I have
to have twenty billion of liquid reserves and either US
dollars or US short term treasury short treasury bills. So
this is basically the ability to have third parties enter
into a currency operation that is backed by the full
(05:04):
faith and credit of US dollar US Treasury, but operated
and regulated somehow.
Speaker 4 (05:09):
You'll see an entity coming.
Speaker 3 (05:10):
We have another act that's potentially going to go through Congress,
which will be a regulatory framework for stable coin. So
you're looking at the very early stages, Doug, of the
very beginning of a new currency system that would in
fact replace the use of the US dollar completely.
Speaker 2 (05:26):
Whether we're talking about AI technologies, data centers, or whether
we're talking about something that's related to the blockchain, we're
talking about a lot of power demand for electricity. Is
that something that you're playing right now. I know when
you and I have spoken about this in the past,
you've indicated that you're interested in taking some positions in
power companies, maybe utilities, even as that.
Speaker 3 (05:47):
Still absolutely absolutely specifically nuclear power. I think nuclear power
is really our only real, true scientific, mathematical probability of
success to have enough power. Additional coal out nowhere near
the capacity that we need, gas, natural everything else beyond
actual coal fired electricity is subpart. Right, So if electricity
(06:11):
is already, if coal fired electricity is already, we know
not enough power for what the AI checks that everyone's
writing on these pe ratios for all these tech companies,
the AI checks that are being written off of the
multiples they expect AI to come. We have to have
the power grid and we don't have it. Electricity coal
fired is not going to be enough mathematically not enough,
(06:31):
Gasoline oil not enough. We have got to have some
kind of nuclear presence, and so I would bet on
nuclear stocks where their companies are actually looking at building
nuclear power generators, power plants. There's one Osclow that's basically
projected to have an actual nuclear power plant operational between
twenty twenty seven and twenty twenty eight. It's based in Idaho.
Speaker 2 (06:53):
So if these hyperscalers are ramping up at a very
aggressive rate, is there the risk that they don't have
the power they need?
Speaker 4 (07:00):
There's not the risk.
Speaker 3 (07:01):
There is the absolute mathematical certainty that if we get
too much operational AI before the power has caught up,
we are sitting ducks.
Speaker 4 (07:10):
We will have to ration power. There's not enough.
Speaker 2 (07:14):
Well, that sounds inflationary too, which then takes me to
the It takes me to the FED. We heard from
Powell this week he said that the near term risk
to inflation are tilted to the upside. So there's the
tariff story. We're talking about the power story now, which
your outlook for inflation.
Speaker 3 (07:31):
I mean, unfortunately, as you know I've mentioned to you
multiple times, Doug, we really have entered the very beginning
stages of a debt spiral, like I know, and no
one's talking about it, but the fact that our interest
has gone from the fourth largest expense to the second
largest expense as fast as it has in the last
few years.
Speaker 4 (07:47):
We hit the second largest expense.
Speaker 3 (07:49):
It surpassed Medicare Medicaid last year in May of twenty
twenty four.
Speaker 4 (07:53):
Total debt service total.
Speaker 3 (07:55):
Amount paid on the federal budget for that year, we've
surpassed it.
Speaker 4 (07:59):
So now it's only second to our but mammoth.
Speaker 3 (08:02):
Social Security just under a trillialler, and we expect it
to be closer to one point two trillion next year.
And that's with them calculating the refinancing of so much
of it with lower interest rates because they are they
have to, like, we can't afford the interest that we
are now being charged on an ongoing basis.
Speaker 4 (08:22):
It's unsustainable.
Speaker 3 (08:24):
And unfortunately, because we keep borrowing and we're charging interests
on top of interest, that interest grows every single year.
And the only chance that we have that our GDP
actually outpaces our actual interest growth is AI is a
Fourth Industrial Revolution is the new frontier of productivity that
is just unmatched at the human level.
Speaker 2 (08:44):
Are you focused squarely on opportunities in the States or
are you looking offshore?
Speaker 3 (08:48):
I mean, I think that there's a lot of robotics
that you have to look outside of the United States.
You have to look at German manufacturing, you have to
look at Japanese manufacturing, you have to look at outside
opportunities in this world. The United States is soorled and
going to be a forethought and a four leader, But
I don't think we're going to be in this race alone,
and I don't think we'll finish number one in every category.
Speaker 2 (09:09):
So we started the conversation by talking about how far
the equity market is run from the April lows and
how expensive things are right now. Are you holding on
the cash or or when cash comes in, are you
deploying it immediately? Are you fully invested or is there
a little dry powder that Rebecca Wallser is keeping on
the sidelines.
Speaker 3 (09:27):
I mean, I do think that everyone should have a
little dry powder all times, just because there could be
something we want to capitalize on that it's not a huge,
obviously position or big part of the portfolio, but for
the most part, we're pretty fully deployed. We have, you know,
the dry powder that we normally have, which would we
would say at least a ten percent position in general.
And I would say that, you know, you're just looking
for opportunities. I do think there will be. What investors
(09:50):
need to understand, Doug, is that monetization of new technology
is always bumpy. It is always historically bumpy. It is
not a from point A straight to point B line
up to the right. It's not how it goes. It's bumpy.
And so as long as people are prepared for pullbacks,
you know, like we had like at one point this
year more than one time, we had people not.
Speaker 4 (10:11):
Really happy with Nvidia.
Speaker 3 (10:13):
I mean, you know that these things happen, and it's cyclical,
especially as we monetize, as we go from prognosticating value
to actual realize value, it gets bumpy.
Speaker 2 (10:23):
So you talked about a debt spiral being one of
the risks out there that you're focused on. I'm curious
about other risks that you see on the horizon.
Speaker 3 (10:31):
Well, of course, there's the biggest risk of all, and
that is that we are globally dedollarizing, which you and
I have talked about and we've talked about China's intent
and written papers one hundred year plans in place written
that they want to be the number one military and
economic superpower in the world, bar none, and that includes
taking down the United States of America. So clearly, I
(10:51):
think that China and what they've orchestrated economically with their
Built and Road initiative, what they've orchestrated with really being
taking over from the Bank of International Settlements the BIS.
They took over the project Mbridge, which was a central
bank cryptocurrency project about you know, central branks transacting on
the blockchain and you know, and their domestic currencies, central
(11:15):
bank digital currencies. I mean, they are just so advanced
from a perspective of being on the blockchain and being
the new center of kind of financial hub. I mean,
if you go to Dubai, you'd think they would be
the investment capital of the world. I've been there, and
it's insanity for us to be so arrogant that we
(11:35):
just think the United States is going to be on
the top because of the US dollars.
Speaker 2 (11:38):
Even so, the Chinese economy seems to still be struggling.
They have a problem with confidence the real estate market
is still not doing well. A year ago, the government
made a major pivot in applying a lot of stimulus
to different segments of the economy, that includes fiscal monetary
They targeted the housing market as well, and things still
(11:59):
have been somewhat like cluster. That doesn't concern you at all.
The fact that the animal spirits in China right now
don't seem to be rising to the occasion.
Speaker 3 (12:08):
Yeah, don't get me wrong. I don't want to China
to succeed. I just see them as a sincere threat.
But you know, of course they absolutely have some economic problems,
just like I would say to you, like Japan with
their debt to GDP which is over two hundred percent,
that's economically unheard of, not viable, can't work, and yet
it continues to work. So I feel like we are
(12:28):
globally very quickly approaching the end of fiat debt at
central bank fiat debt. We are going to go to
tokenization of hard assets, real reserves, and obviously to currency
on the blockchain, and it's going to be a complete
shift of currency.
Speaker 2 (12:45):
Well, we'll see where we go from here. Any comments
on gold, I know we pulled back a little bit today,
but we're very close to record highs. What do you
think is happening here? Is this all about central banks
and then the retail crowd that came in at the
last part of the rally that we had.
Speaker 3 (12:59):
Yeah, I'm I think absolutely it's central bank related. You
have Basso three that went into effect, which basically moved
Goal from a Tier three asset to a Tier one
asset and really made the central banks want to step
up and own it for all of the things that
that meant as far as reserves at their central bank.
But also Doug again, we are closing to closing in
to the end of the people's belief in fiat currency,
(13:22):
the fiat debt system, the fiat money multiplying system. I'm
on a fractional reserve system. I to give you one hundred,
you lend out ninety. Now we have fake money because
there's not really one hundred and ninety. There was one
hundred and it became one hundred and ninety. So the
money multiplier, fractional reserve, all of these things. When we
moved to the blockchain, and it's all publicly notable, traceable, seeable,
that's why you got like the staple Cooin Act that
(13:44):
requires the Genius Act, that requires these stable coins to
have a one to one reserve relationship so people can
trust it and it'll be on the blockchain'll be transparent.
So we are getting close to the end of fiat
currency and the government can issue whatever they want.
Speaker 2 (13:56):
All right, We'll leave it there. It's always a pleasure. Rebecca,
Thank you so very much. Rebecca wi As president of
walls Er Wealth Management, joining us here on the Daybreak
Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm
deg Krisner. The US and South Korea are still trying
(14:18):
to finalize a trade deal, and these negotiations have included
discussions around investment projects in the US. However, South Korea's
Prime minister says those projects will remain in limbo now
until visa issues are resolved. Prime Minister Kim Minsook spoke
exclusively to Bloomberg sherry On in Seoul. Here's part of
(14:38):
that conversation.
Speaker 4 (14:40):
I Bonhof Salmon.
Speaker 5 (14:41):
Dis negotiation wasn't initiated by us. We didn't start from
a position of advantage, nor did we raise the issues.
Isn't that the case for the entire world since the
whole world is negotiating under the new conditions presented by
the United States. Rather than insisting on specific conditions, the
correct answer would be that certain things are simply difficult
(15:04):
to achieve. Therefore, anything that exceeds the limits of what
the Republic of Korea can bear in terms of national interests, acceptability, capacity,
or public understanding will be quite difficult to undertake.
Speaker 1 (15:20):
Are the issues that need to be resolved around the
three hundred and fifty billion dollar investment fund into the US.
Speaker 5 (15:27):
That's generally the case since the framework for the large
amount is already said. The fact that the amount is
fixed means it started with the expectation that, depending on
how that amount is structured, it could potentially be mutually beneficial. However,
the structure itself, how the funds are raised, or how
the profits are distributed, these things need to be within
(15:48):
the bounds of what's considered normal, and when explaining to
our Korean citizens, it needs to be at a level
where they can understand and accept it. Above all, it
must be within the capacity of our Korean economy to handle.
Speaker 1 (16:02):
President E talked about the need for a currency swap
agreement in order to avoid any shocks to the Korean
economy when delivering these funds.
Speaker 6 (16:13):
What has Washington said so far?
Speaker 5 (16:18):
I haven't heard the exact details yet on how they've
responded so far, However, as the President has already stated
that amount currently represents seventy to eighty percent of Korea's
total foreign exchange reserves. Without measures like swaps or similar mechanisms,
the impact on the Korean economy will be too severe. Also,
as a nation that experienced a foreign exchange crisis, public
(16:41):
vigilance on this matter is high. I believe these factors
must be taken into consideration.
Speaker 1 (16:48):
When it comes to the tariffs themselves, we still have
to see the US actually louring car tariffs on South
Korea to the agree fifteen percent.
Speaker 6 (16:58):
And even if.
Speaker 1 (16:59):
The terriffs we're ignored the terriff advantage that South Korean
carmakers have over Japan, for example, twenty a half percent
before the Trump trade deal, that's going to disappear. How
painful is that for South Korean firms right now?
Speaker 5 (17:15):
Done? First, the FTA structure between US and the US
is changing, and that will create a burden. Naturally, if
tariffs drop from twenty five to fifteen percent, that will
be better, But it's still harder than before, and especially
at this point, there's the difficulty of having to bear
(17:35):
to twenty five percent until this negotiation concludes. So, in short,
there are difficulties. Yundimotor and others are facing particular challenges. However,
as far as we understand, Yndimot currently plans to navigate
this situation without changing its pricing policy for now, I
(17:56):
personally view this as a relatively wise approach. The government
is reviewing various policy options to see what can be
done to alleviate the burden on the automotive sector caused
by the ongoing negotiations.
Speaker 1 (18:12):
More problematic also for Korean companies has been the visa issue,
especially with the plant in Georgia.
Speaker 6 (18:19):
What sort of.
Speaker 1 (18:19):
Resolution can we expect on that front.
Speaker 5 (18:24):
Before discussing what kind of solution there is? Realistically, without
a solution, it's difficult to invest in the United States
and carry out the various joint projects currently planned between
South Korea and the US. We absolutely must find a solution.
Several projects are underway between South Korea and the US.
(18:45):
Without resolving the visa issue, meaningful progress remains virtually impossible.
The detention incident dealt a severe blow not only to
the general Korean public, but especially to the workers who
are actually detained and the absence of firm assurances regarding
their safety, both they and their families are understandably reluctant
(19:07):
to enter the US again. While this matter remains unresolved.
Speaker 1 (19:12):
Our investment projects right now halted until some resolution is
acquired on the resa issue.
Speaker 5 (19:19):
Although the projects have not been entirely halted or formally
placed on hold, it will be very difficult for a
large number of workers to enter or re enter the
US until this problem is resolved.
Speaker 1 (19:32):
South Korean firms are also seeing challenges, for example, in China,
especially when it comes to US CHIP restrictions for Beijing
Korean firms operating in China. How can South Korea manage
the growing tech rivalry between China and the United States.
Speaker 5 (19:53):
Well, that's a problem the whole world is grappling with.
It's a natural concern, especially for countries like Korea that
share significant economic ties with both the United States and China. Naturally,
we strive to maintain relations with all neighboring countries. However,
we understand that the overall plate we stand on has
(20:14):
tilted slightly compared to the.
Speaker 6 (20:16):
Past, in what way.
Speaker 5 (20:19):
The terrain itself has tilted towards strengthening our relationship with
the United States. I can answer it in that way,
what does.
Speaker 6 (20:27):
That mean for China Korea relations?
Speaker 5 (20:29):
Then, Kugos, I think China understands this too. If Korea,
standing on this larger terrain, demonstrates appropriate efforts to maintain
its relationship with China understanding the change terrain, then even
on that terrain, Korea can still strive to maintain its
relationship with China.
Speaker 1 (20:51):
But the US has had so many demands for South Korea, including,
for example, raising defense spending five percent.
Speaker 6 (21:00):
Of GDP as more NATO, for example.
Speaker 4 (21:03):
Kat Christen.
Speaker 5 (21:07):
With respect to defense spending, I do not believe it
must necessarily be considered in connection with our relations with
other countries. Rather, it is an area that can be
expanded as part of strengthening our independent national defense by
how much recently we've mentioned three point five percent and
we did so because we judge that this is a
(21:29):
level we are capable of sustaining.
Speaker 1 (21:32):
Are we expecting any contact between North Korean leader Kim
zongun and President Trunk during the upcoming EPIK summit.
Speaker 5 (21:39):
Tounta both of them are currently evaluating the relationship between
the two parties positively. Since unforeseen events can always occur,
I believe we should keep that possibility open. But so far,
North Korea and Chairman Kim Jong un are showing no
signs of changing their stance.
Speaker 6 (22:02):
President E.
Speaker 1 (22:05):
Created a positive foundation for South Korea Japan ties during
his last visit to Tokyo.
Speaker 6 (22:12):
We might see a leadership change in Japan.
Speaker 1 (22:15):
Could this have an impact on Korea Japan relations as well?
Speaker 4 (22:20):
We didn't go to town.
Speaker 5 (22:21):
We hope that won't be the case. We believe it
is undesirable for relations between nations to be significantly impacted
or altered by changes in leadership. While we also face
various challenges, we have prioritized diplomatic continuity and are working
to further improve relations with Japan. Regardless of who becomes
(22:42):
Japan's new prime minister, we expect and hope that they
will consider various factors to ensure that the current newly
formed friendly hemisphere is not adversely affected.
Speaker 2 (22:53):
That is South Korea Prime Minister Kim mins speaking to
Bloomberg's Sharing on in Seoul. Thanks for listening to today's
episode of The Bloomberg Daybreak Asia Edition podcast. Each weekday,
we look at the story shaping markets, finance, and geopolitics
in the Asia Pacific. You can find us on Apple, Spotify,
(23:13):
the Bloomberg Podcast YouTube channel, or anywhere else you listen.
Join us again tomorrow for insight on the market moves
from Hong Kong to Singapore and Australia. I'm Doug Prisoner
and this is Bloomberg
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