Steve Jobs reveals why Japanese companies dominate quality without ever marketing it: "The group of people that do not use quality in their marketing are the Japanese. You never see them using quality in their marketing" "It's only the American companies that do. And yet if you ask people on the street which products have the best reputation for quality they will tell you the Japanese products" "Customers don't form their opinions on quality from marketing. They form their opinions on quality from their own experience with the products or the services"

⚡️NEW: The Iranian Delegation has made it to Japan to Participate in the Asian Games The Delegation includes Several World Wrestling Champions, who are expected to Dominate the Wrestling Competitions

China went from virtually no presence in Europe to over one million cars exported in a single year. Michael Dunne says anyone expecting Chinese automakers to follow the slow, patient path taken by Japanese and Korean brands decades ago is misreading the situation entirely. Dunne says China's strategy is to dominate, not compete. (@dunne_insights)

2026, day 261 Good morning from Australia - and a REALLY 2026 day so far today…more war - but when(?), AI warfare, energy in focus,…. and ‘First newts, now bats: Piddington migrant camp dealt another blow’. GEOPOLITICS: 🌍🔥 ‘The era of AI warfare has arrived’ (FT); ‘OpenAI discloses new ‘concerning’ model behaviour’ (FT); ‘Trump tells Axios he's approaching major crossroads in Iran war’ (Axios) - “I have a big decision coming up. Do I want to go in and annihilate them [the Iranian regime] or do I not? It's a big decision. Anything could happen with me."; ‘Iranian Revolutionary Guards Navy says it struck oil tanker in Strait of Hormuz’ (ToI); ‘Trump administration approves $24bn sale of F-35 jets to Saudi Arabia’ (FT); ‘The New Offensive Raising Oil Prices and Complicating Trump’s Iran War’ (WSJ); ‘US investigating Iran ties to cyberattack on energy tankers bound for American ports’ (WSJ); ‘China presses Iran to help rein in Houthis after Saudi appeal, sources say’ (Reuters); ‘Russia and China veto US proposal for UN experts to keep monitoring sanctions on Iran’ (AP); ‘Iran war puts future US military presence in Middle East in question’ (The Hill); ‘Ghalibaf’s maths missile at Trump decoded: Is Iran fixing US interest rates?’ (AJ); ‘Trump’s pressure on NATO is reshaping Europe’s defenses. Will it break the alliance?’ (Reuters); ‘Is NATO ready to fight? The Ukraine war is raising doubts among military analysts’ (Reuters); ‘Russian plans include strikes against Ukraine’s allies: Tusk’ (AFP); ‘Russia says new US sanctions, if signed by Trump, would make Ukraine peace deal harder’ (Reuters); ‘Trump says progress made toward establishing US Army base in Poland’ (Reuters); ‘Carney lays out case for deeper alliance between Canada and the EU’ (Globe & Mail); ‘A European alliance deserves more seriousness than Carney's treated it with’ (National Post); ‘Carney’s ‘meaningless’ EU offer unravels’ (Telegraph); ‘Canada applies to join Europe-led military partnership for Northern Seas’ (Euractiv); ‘China, US may unveil measures to boost military ties when Xi visits Washington’ (SCMP); GEOECONOMICS: 🌍 ✈️ ⛴️ 🚛 ‘China Stockpiled Oil, and Now It Could Dominate the Energy Landscape’ (NYT); ‘European leaders rush to counter looming diesel price surge as Saudi pipeline attacked’ (Euronews); ‘Is Fuel-Export Ban Trump’s Last Option to Ease Prices? How It Could Work’ (WSJ); ‘While Canada fights Trump, Mexico is preparing to eat our lunch’ (National Post); ‘US trade chief pressed Brazil to review Anglo American nickel sale to China’ (SCMP); ‘US Said to Delay Excess Capacity Tariffs Until After Xi Summit’ (BBG); ‘Japan, US in talks to build chip factory as part of tariff deal’ (Nikkei Asia) - “Total value of project could reach $19bn; GlobalFoundries to operate new plant”; POLITICS: 🗳️ ‘Farage’s mega-donors mask the wider threats to British democracy’ (FT); ‘Ten shades of Putin: Russia votes in first Duma election since Ukraine invasion’ (Ynet); MARKETS: 📈 ‘Turkish authorities rush to stem fallout from stock market scandal’ (FT); ‘Trump Says He Backs Warsh After Central Bank Raised Interest Rates’ (WSJ); ‘Yen's BOJ Day Comes With Many Lines-in-the-Sand’ (BBG); ‘Britain is now a global outlier on interest rates’ (Telegraph); ‘Wall Street warns trading boom is losing steam’ (FT); ‘Rising Rates Will Make Private Equity’s Bad Year a Lot Worse’ (WSJ); ‘Crypto shifts focus to Trump regulators after coming up short in Senate’ (The Hill)

🦔A Bloomberg analysis out today shows leveraged ETFs have piled into a tiny group of AI chip stocks, and their forced daily trading now makes those stocks swing harder. These funds use borrowed money to double or triple a stock's daily move, so they buy more as it rises and sell as it falls. Bullish leveraged ETF exposure to AI names jumped from 26% to 58% since 2022. In Korea, funds tracking SK Hynix and Samsung helped drive the Kospi down about 35% in a month, and one popular SK Hynix fund fell more than 80% from its peak. My Take Most people reading this have never bought a leveraged ETF and never will. That's the problem. These funds now trade in enough size that their mechanical buying and selling moves the underlying stocks, and those stocks, Nvidia, Micron, SK Hynix, Broadcom, are the same names inside the index funds and 401ks that regular people do own. Nomura, the Japanese investment bank, figured that at the June peak, every 1% move in these stocks forced the funds to buy or sell around $10 billion to rebalance. The formula behind them buys as prices rise and sells as they fall, with no regard for what any company is worth. Korea already ran the experiment. Leveraged funds on two chip stocks came to dominate the market's daily volume, and when the mood turned, Goldman found the forced selling hit 62% of all local institutional selling on the worst day. That pressure reached well past the people who bought the funds. It hit ordinary investors who never placed the bet and hold the same chip stocks in their retirement accounts. I don't think this breaks the market by itself. But it makes the AI names more fragile than they look, and most people who hold that risk through a 401k don't know it exists. Hedgie🤗

Bank of Korea created a dedicated Asset Tokenization unit under its Digital Currency Department, moving treasury bond tokenization from experimental work into a formal organizational line, the clearest signal yet that this is heading toward actual implementation, not just research. This is the final piece of what BOK Governor Shin Hyun-song has called a "trilogy," a framework he's pushed since his BIS days: CBDC, deposit tokens (already tested via Project Han River), and now asset tokenization, specifically government bonds as the most important national asset. The new unit isn't tasked with more research, it's built to execute a "unified ledger" strategy where central bank money, deposit tokens, and asset tokens all move on the same platform. The technical upside BOK is describing: settlement, clearing, and payment collapse into a single simultaneous process instead of separate steps, enabling programmable conditional payments and automatic collateral settlement. Practically, that means things like EV charging subsidies or government expense accounts could be disbursed as tokenized deposits programmed to only work for specific purposes and locations. It also enables atomic settlement, money and asset transfer simultaneously, eliminating the delivery-versus-payment risk where one side sends first and waits for the other. BOK's own framing was pointed: the US, UK, and Japan have already reached commercialization stage or finished design work on digital treasury bonds, and this new unit exists so Korea doesn't fall behind in that global race. A BOK official added that asset tokenization is where finance is headed regardless in the AI era, and that the unit, currently smaller than a full team, is expected to grow given its strategic priority. The other organizational change worth noting: BOK's North Korea Economic Research office got renamed to Economic Security office, reflecting the rising importance of geoeconomics as countries increasingly weaponize trade controls and resources. Both changes came in Shin's first reorganization since taking office, and line up with a newly formed director-level strategy group BOK just convened last week specifically to coordinate Korea's position on BIS agenda items, deposit and treasury tokenization being flagged as a core topic expected to dominate future BIS-level discussion.

HOW THE WORLD’S BIGGEST SEMICONDUCTOR COMPANIES CHANGED OVER 3 DECADES It’s wild to see how completely Japanese giants dominated semiconductors in 1990 before $INTC took the crown and held it for nearly two decades. Now $NVDA sits at the top alongside $TSM as AI redistributes industry value toward the companies controlling the hardest bottlenecks across compute and manufacturing.

High-end drill bits manufacturing are more difficult than you think. In the past, this was something that was dominated by the Japanese, and EU. China has cracked the market just several years ago, and have been expanding aggressively since. Coincidentally, one of the key ingredients to manufacture this drill bit here is Tungsten - specifically Tungsten powder. China has choked off Japan's APT & Tungsten powder supply since early 2026. In the event where Japanese carbide manufacturers cannot fulfill all customers' orders, semiconductor customers are moving across to China to diversify its supply chain. That's not to say that the Chinese supplies will flood the market. Just like any semiconductor supply chain, the verification process takes 6-12 months. So there's the lead time. Reviewing all the half-yearlies of the Chinese PCB/AI drill bits manufacturers, they have all said that the demand is exploding, and supply can no longer keep up with demand. They have also shown 0 concern on future prices because they expect the selling price will be higher for the foreseeable future. Whatever is produced, will be sold. Combined with the "depressed" Tungsten price in China vs ex-China, you can be sure their margins are expected to increase in 2H26 vs 1H26.

Japan once tried to create its own operating system that could have become a global standard. The project, called TRON, started in the 1980s and was backed by Japanese companies and the government. They wanted to create an operating system that could be used across everything from computers to everyday electronics. In 1989, the US government raised concerns that TRON could give Japanese companies an unfair advantage and restrict US software companies from the Japanese market. TRON never became the global PC standard, Microsoft and Intel eventually dominated that market