Rob beat me to most of these on the news. However I want to give my spin, and seeing I have the power to post, you’re at my mercy until Rob puts a stop to it.
Shot 1:
On Monday, Hanwha’s shares plummeted by its daily limit down to 14,450 won, suffering a 15-percent fall for a second straight day. Most major stocks rose on the same day.
Wow, I would hate to be a stock analyst confronted by Hanwha CEO Kim Seung-youn when he stops by to “explain” why I should only say positive things about his company.
Shot 2:
Speaking of putting a positive spin on the news, we have the Blue House getting involved, as mentioned previously today:
Prime Minister Han Seung-soo said yesterday that he is considering forming an investor relations team to properly inform the world about the condition of Korea’s economy.
In a meeting to discuss the economic situation, Han said, “We briefed the foreign press on the state of our economy. We were able to make them understand that the Korean economy is not in bad condition.”
The comments came after a series of negative reports by foreign press.
He must mean headlines and stories like these:
Hynix Sees DRAM Prices Down 30%
When Will Foreign Investors Come Back?
Chaebol Face Risk in Crisis-Stricken Countries
Recession Fears Chill Consumers
Korean Consumer Sentiment Dips Amid Financial Turmoil
Confidence Crisis Spawns Financial Panic
More Offices Going Vacant Amid Economic Slowdown
Is There Need for Korea to Seek IMF Help?
Oh wait I am sorry! Those are recent headline in the English Korea Times, not foreigners. PM Han must mean headlines and rampant speculation like this:
Mirae Asset falters amid market turmoil
Industrial output predictions sliding
Won drops to 10-year low vs. dollar
The end of the road for the Kosdaq?
Half of the workforce fears job loss
U.S. slowdown hits local real economy
Economic growth falls to the lowest in three years
Samsung sees 3Q earnings halve
Oh sorry again! That’s the English version of the Joongang Ilbo, not a bunch for ignorant foreign reporters.
I could continue the routine, but you get the idea. Han’s statements can only mean two things:
1. We only care if the foreign press reports the truth of the economy. Local media, and the citizens that rely on it, can continue to speculate wildly on the economy.
2. Foreign reporters are a bunch of fools who like smoke blown up their ass. We figure they are so dumb they won’t even think of looking in the local paper where the real truth is.
Shot 3:
According to today’s Joongang:
A committee of around 120 small- and medium-sized companies are set to file a class action suit against 13 lenders early next week to demand nullification of KIKO contracts, as the currency risk-hedging derivatives have recently caused enormous financial losses.
Now wait a second! 13 lenders have been selling these KIKO contracts that are now biting local firms in the ass (and of course ignoring how they likely profited from them in the past)! That does not make sense! After none other than bold Korean leader Rep. Lee Sung-nam said it was the handful of evil foreign banks engaging in these horrible activities to harm poor defenseless Korean firms. How can this be!
Shot 4:
This just goes to show you how real life can funnier than anything a person can imagine in his head. Lets take a short tour of some of the news of the past year:
Korea Unpopular Tour Destination in Asia – South Korea ranked 10th among 14 Asian nations in the category of the most favored places to travel in the near future. – Korea Times, April 29, 2007
The Seoul Central Prosecutors’ Office has launched a breach of trust and embezzlement probe into two state-owned casinos run for foreigners… They also raided the office of casino operator Grand Korea Leisure and the home of its chairman, Park Jung-sam. Park became a chairman of GKL, a subsidiary of the Korea Tourism Organization, in September 2005. He resigned from that position last month.
Prosecutors say they are investigating whether GKL falsified its total sales and embezzled company funds to create slush funds to influence public officials. – Joongang Ilbo, May 29, 2008
Korea ranked seventh among eight Asian countries in the ranking of attractive tourist spots, according to an opinion survey conducted by the Korea Tourism Organization. — Korea Times September 30, 2008
Meanwhile you also have the Seoul City government strong-arming a publisher for what it thinks is “unfair” reviews of the town. You also have this rather stark picture of Korean tourism in a local paper. Lastly the Korea Times has been filed with articles like this the past few weeks on how poorly Korea promotes itself to the world.
So we have declining popularity among other Asian desitations, Corruption in the KTO via casino slush funds, strong-arming publishers, problems so major and apparent that locals discuss them, and finally world opinion basically giving Korea a big thumbs down on its efforts to promote itself.
And yet what to we get today?:
The head of the nation’s tourism body said that Korea will be able to help underdeveloped countries improve their tourism industry based on Korea’s experience, if he becomes the chief of the United Nations World Tourism Organization (UNWTO).
This guy? The guy who has lead over all the above is going to “help underdeveloped countries improve their tourism industry”. Seriously? Reminds me of an old observation, to paraphrase, “Those who can do, those who can’t lead the UNWTO”.
Well I guess he is reliable in one thing in relation to past performance and his bid… Only in Korea!
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Not all examples need to be positive. It could work!
Wow… so long… too much to read… it’s posting tyranny!
Rob, put a stop to it!..
Cheap shots. The KRW was not in freefall because of people worried about job losses or things like that. Something is at work beyond regular bad economic news that is affecting other countries, too.
As a person later involved in said incident, I’m not sure if “strong-arm” is how I would describe what took place. Aggressively offering unsolicited help would probably be better.
And that’s all I’m going to say about it.
Meh, I’m not an economics expert by any means, but it seems to me that Korea is reaping 10 years of arrogance on their part. Did they really think that Korea would *always* be the first place that people ran to when they needed “cheap export X”? Did they really think that their blatant disregard for contracts, mafia-like corporate culture, and low productivity would escape the world eye forever?
I find the whole tourism thing lawl-worthy because Koreans themselves seem to have no clue as to how much the world is actually paying attention to them now.
Did they really think that Korea would *always* be the first place that people ran to when they needed “cheap export X”?
No they didn’t. That’s why you see companies like Hyundai and Samsung working on quality and safety issues.
Did they really think that their blatant disregard for contracts, mafia-like corporate culture, and low productivity would escape the world eye forever?
Korea has these things and needs to work on them, but contract issues are much more universal than you seem to think, mafia-like corporate culture is also found elsewhere including in Japan, and low productivity (which Korea suffers an hourly basis more than a per employee basis I think) is a serious problem in many of the places that absorb so much foreign investment.
Many of Korea’s real problems don’t stand out to the rest of the world as much as K-blog commenters seem to think they do because they’re not so uncommon in other places too.
@4 Fair enough. How about “Shrilly complaining about somebody’s opinion”
@6 I agree that many have the same problems (even the US at times), however I refuse to let that be justification or an excuse. I hope you do not fall into that trap either.
@6 I agree that many have the same problems (even the US at times), however I refuse to let that be justification or an excuse.
Nor do I. But if these problems are common among many other countries facing problems then they do not explain the KRW’s freefall.
I hope you do not fall into that trap either.
I don’t. Korea has lots of problems but that doesn’t mean Korea alone has those problems, no matter what we read in the MH comments.
OTOH other countries having those problems is not a reason for Korea not to work on them.
Great post. So much effort though! I often write tirades about life in Korea and then I think, what a waste of time! Being irritated at life here takes up enough of my time, but when I write about it, it takes up even more.
Nevertheless, I enjoyed the meticulous effort of the entry.
josesiem looks like “Ace” on Survivor Gabon.
http://llnw.image.cbslocal.com.....78/ace.jpg
“Many of Korea’s real problems don’t stand out to the rest of the world as much as K-blog commenters seem to think they do because they’re not so uncommon in other places too.”
Certainly.
The Won and the Kosdaq have suffered some loses, but this certainly isn’t the Asian Economic Crisis of 1997-1998. As far as I can tell, the economy is still quite solid. Sure, Hyundai might sell fewer cars. But, all seems well for small and medium-sized businesses, the real backbone of the Korean economy. It certainly hasn’t affected our business.
“He must mean headlines and stories like these:”
To be fair though, those headlines are just stating the news as they happen. It’s different for example, when you start predicting a “Black September for Korea” on September 1.
The series of sell offs began right after that report on the same day when the KOSPI sank 4.1%
So there’s the old chicken or the egg question. Did the bad economy cause the pessimistic report, or did the pessimistic report cause the bad economy?
And I saw this in the news today that illustrates the disagreement between the Korean government and some foreign press.
A big chunk of the 420 billion dollar foreign debt, or 36% of them, were incurred by Korean ship building companies who have raked in 60% of the global market share. As you know, it takes 3-4 years to finish a ship and get it delivered to the customers, after which the ship builders get paid in full. In the meantime, Korean ship builders have to take out loans of their own to pay for the construction of the ships. The disagreement is whether this should be counted as “foreign debt”, or not.
The Korean government says it’s foreign debt but not really a foreign debt or a problem because inevitably, the money will be there when the ships are delivered. But foreign investors and the media say otherwise and they are concerned. And I can understand why because they have a good point.
In normal times, Korean ship builders would have no worries that they will be paid back once the ships are finished. But we know these aren’t normal times. Many countries are financially collapsing, and many companies around the world are going bust. What makes anyone sure that once the ships are completed that the Korean ship builders will see all their investments returned? How many customers will back out of the contracts and how many will simply be unable to pay the bills?
Sorry, every time I post a link, the post just dissappears into thin air.
I wanted to post the links but couldn’t.
The articles are from Financial Times September 1 “Black September for Korea”, “Korean Stock Down 4.1%” September 1 IHT, and the Yonhap news “한국경제, 비합리적 채무가 문제”, Oct.30.
To be fair though, those headlines are just stating the news as they happen. It’s different for example, when you start predicting a “Black September for Korea” on September 1.
Instead of “we report the news as it happens” we have “we create the news to make it happen”.
Good comment cm. You get a hat tip from me.
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