The WSJ Chimes in: Korea’s Economy Going Through a Double Whammy

Excellent article in yesterday’s WSJ by their Seoul correspondent Evan Ramstad summarizing the economic pickle Korea is in and how it got there. True, one Journal article isn’t going to tell you everything you may want to know about how the won is up shit’s creek or every damn detail about the fissures in the economy, but it’s an excellent primer nonetheless.

Per the article:

After the mid-September collapse of Lehman Brothers raised risk aversion to new levels, many investors and analysts felt South Korea’s debts no longer looked reasonable, particularly since they were larger than those of most Asian countries.

Government officials have stressed that the debts pose little challenge, noting that the country’s central bank sits on the world’s sixth-largest pile of foreign currency — $240 billion. But the global liquidity crunch has roiled South Korea anyway. And the likely onset of recession in the U.S. and Europe, which together consume more than one-fourth of South Korea’s exports, is quickly putting the brakes on the country’s growth. That double whammy has fueled a selloff of South Korean stocks and devaluation of its currency, the won.

The upshot is that despite its sometimes flawed economic policies, Korea has also made a lot of good decisions since the economic crisis of 1997-98. However, a mix of circumstances, not always under Korea’s control, is currently putting the nation in a tough spot.

Read the rest on your own.