“304 Dreams, We Will Remember.”.

• Spoken by Lee Jae-myung (President) at the 12th anniversary memorial for the Sewol ferry victims.
• “We will never forget the names of each of the 304 individuals, nor the 304 dreams they were unable to fulfill, as long as we continue to remember, document, honor, and reaffirm our commitment.”
• “We have all witnessed firsthand what happens when a state fails in its fundamental duty to protect the lives and safety of its people.”
• The People Power Party did not attend.

What Matters Now.

Israel-Lebanon Ceasefire for 10 Days.

• It was the first dialogue in 34 years. For now, they agreed to a 10-day ceasefire. Hezbollah, the Lebanese armed faction, has also expressed a tentative welcome.
• Under strong U.S. pressure, Benjamin Netanyahu (Israeli Prime Minister) has stepped back—at least for now.
• Related Link.

U.S. Proposes $250 Billion Support to Iran.

• The condition is the export of highly enriched uranium to the U.S. or Europe.
• Iran is demanding a larger scale. Iranian assets frozen overseas amount to up to $100 billion. The lifting of asset freezes is also a negotiation condition.
• The U.S. has launched an “economic fury” operation. It is threatening to impose strong sanctions on countries trading with Iran. There are observations that China is a target of the “fury.”
• Iran has proposed a plan to partially open the Strait of Hormuz. Trump may also step back a bit.
• As Israel-Lebanon entered a ceasefire, U.S.-Iran negotiations have accelerated. Trump said, “There is a possibility of negotiations with Iran this weekend.”
• Related Link.

Hormuz Conference Without the U.S.

• It is a conference co-hosted by Emmanuel Macron (French President) and Keir Starmer (UK Prime Minister). Lee Jae-myung (President) will also attend the virtual meeting.
• Participating in a U.S.-absent conference—while rebuffing Washington’s request to dispatch warships—is a high-stakes gamble for the South Korean government. However, the U.S. also needs to break the deadlock and find an exit strategy.

Government Debt to Reach 63.1% by 2031.

• IMF has warned that South Korea’s government debt (D2) is rising rapidly, but the Ministry of Economy and Finance insists it remains “within manageable levels.”
• IMF projects that Korea’s government debt-to-GDP ratio will grow from 49.7% in 2024 to 63.1% by 2031.
• The ministry disagrees. It argues that the GDP denominator is expanding, which naturally lowers the debt ratio. Indeed, IMF’s October 2023 forecast for 2030 was revised downward from 64.3% to 61.7%.
• Compared to other countries, the figure is not exceptionally high. The G7 average is projected at 132.9% for 2031, while the G20 average stands at 127.5%.
• The Korea Ilbo editorial cautioned, “The fatal limitations of fiscal omnipotence—solving all problems through government spending—must be heeded.”
• Related Link.

Trump Wasn’t Met.

• Jang Dong-hyeok (People Power Party Leader) returns empty-handed. “We had meaningful conversations with the U.S. Congress, think tanks, and the State Department,” but as an excuse for being away for nearly a week ahead of elections, it’s weak.
• Attempts to meet Paula White (pastor), known as Trump’s mentor, failed. Neither JD Vance (U.S. Vice President) nor Marco Rubio (U.S. Secretary of Commerce) were met.
• Jang Dong-hyeok said, “There are achievements, but security issues prevent disclosure.”

Deep Dive.

“God Does Not Hear the Prayers of Those Who Start Wars.”.

• “God does not bless any war.” These were the words of Leo XIV (Pope). Though not explicitly naming Trump, it was an indirect rebuke.
• Trump continues to provoke Catholics, saying, “Focus on being a good pope, not a politician.”
• Catholic voters account for 20% of all U.S. voters. In the last election, 56% of Catholic voters supported Trump, but a Fox News poll last month found 52% of Catholic voters now disapprove of his governance.

Property Holding Taxes to Surge by 1.2 Trillion Won.

• Combined property and comprehensive real estate taxes total 8.8 trillion won—nearly 15% higher than last year’s 7.6 trillion won.
• Publicly announced property values have risen sharply: 9.2% nationwide, 18.7% in Seoul.
• The comprehensive real estate tax—applied to homes valued over 1.2 billion won—has expanded by 53%, from 170,000 to 490,000 households. 80% of these taxable properties are concentrated in Seoul and Gyeonggi.

Public Sector Bans Subcontracting.

• Multi-tiered subcontracting creates middleman exploitation. The Ministry of Employment and Labor is starting with the public sector.
• Kim Young-hoon (Minister of Employment and Labor) said, “Starting with the public sector, we will expand fair subcontracting practices to the private sector, realizing workplace democracy where all workers are treated without discrimination.”
• Subcontracting will only be permitted for unavoidable cases: new technologies or specialized skills, or temporary and intermittent tasks.

Saudi Aramco Profits from War.

• 35 trillion won.
• Kuwait Petroleum earned an additional 17 trillion won, while ExxonMobil (U.S.) and Gazprom (Russia) each saw profits rise by 15 trillion won.
• According to The Guardian’s analysis, if oil prices remain above $100, the top 100 oil companies’ excess profits are projected to reach $234 billion.

Another Take.

“The Senior Prosecutor Said the Goal Is One.”.

• Nam Wook (Cheonhwa Dongin shareholder) said this during the National Assembly’s investigation. “Jeong Il-kwon (Seoul Central District Prosecutors’ Office senior prosecutor) could cut open the belly and remove all organs, or just excise the diseased part. Our goal is one. Think carefully.”
• It implies that Lee Jae-myung was the target.
• Jeong Il-kwon refuted, “I only asked for the substantive truth and to speak as it is.” He explained that showing the family photo was “intended to wish them strength during a difficult time,” but Nam Wook said, “I did not feel that way.”

Tightening Scrutiny on Dual Listings.

• In 2022, LG Chem’s value plummeted after it split off its battery division into LG Energy Solution (a spin-off) and listed it separately.
• LG Chem and LG Energy Solution have market caps of 27 trillion won and 97 trillion won, respectively. Since LG Chem holds 79% of LG Energy Solution, its stake alone is worth 77 trillion won—yet it remains significantly undervalued.
• Had LG Chem opted for a stock split instead of a spin-off, its shareholders would have retained LG Energy Solution shares. But the spin-off left them with nothing. LG Chem’s stock has been in freefall since LG Energy Solution’s exit.
• Dual listings have been criticized as a tool for controlling shareholders to raise funds while maintaining control.
• The Financial Services Commission has decided to ban dual listings in principle, with stricter reviews starting in July.
• The U.S. sees dual listings at 0.4% of the market; South Korea exceeds 18%.
• Lee Chang-hwan (Align Partners CEO) said, “Dual listings structurally sacrifice minority shareholders’ interests. They should be banned in principle, and even in exceptional cases, majority approval from parent company shareholders must be required.”
• Related Link.
• Related Link.

Should the Busan Buk-gap Election Be Scrapped?

• Han Dong-hoon (former People Power Party leader) has already moved his residence and is rushing to run as an independent.
• Jeon Jae-soo (former Minister of Oceans and Fisheries, nominated as Democratic Party’s Busan mayoral candidate) still retains his parliamentary seat. If he delays resigning until next month, the by-election cannot coincide with the local elections.
• By-elections are finalized by the end of this month. However, election law only requires resignation 30 days before the vote. If Jeon holds out until the deadline and resigns just in time, the election cannot proceed at all—postponed to April next year.
• Jeon claims, “The by-election will definitely happen.” He says, “I’ve been getting calls nonstop to resign in May.”
• Democratic Party leader Jung Chung-rae continues to persuade Ha Jung-woo (Blue House AI secretary) to run. Ha states, “My mind changes morning and night.”
• Related Link.

The Fix.

Let’s Use Their Names.

• On worksites with migrant laborers, it’s common to call them “Hey.” Some even say, “Hey, Vietnam,” or “Hey, Myanmar.”
• The Ministry of Employment and Labor has signed a business agreement with the Jeon Tae-il Foundation and others to launch a “name-calling initiative.” They plan to distribute safety helmets to migrant workers with their names printed on them.

1 Million Caregivers Short in 20 Years.

• Care demand will explode starting in 2030, when the baby boomer generation turns 75+.
• The number of caregivers is projected to rise from 710,000 in 2024 to 810,000 in 2034, then gradually decline.
• According to KDI analysis, additional required personnel will reach 330,000 by 2033, 630,000 by 2038, and 990,000 by 2043.
• Foreign caregivers make up 0.9% of all caregivers.
• Ninety percent of private caregivers are of Chinese heritage. Caregivers face a certification barrier and low wages, making the profession unpopular. While increasing caregiver visas is an option, fundamental wage improvements are a prerequisite.
• Related Link.

ICYMI.

“Why Should I Care How My Ex-Husband Lives?”.

• “Why didn’t you treat him better when you had him?” Hong Joon-pyo (former Daegu mayor) said this in response to criticism over his support for Kim Bu-gyeom (Democratic Party’s Daegu mayoral candidate).
• “Kim Bu-gyeom and I share a 30-year friendship,” he said, “and he’s the only one who can solve Daegu’s pressing issues.”
• He also criticized, “Daegu’s National Assembly members were elected because of their party, not their own merit.”
• Hong Joon-pyo’s meeting with Lee Jae-myung is also noteworthy. They will have a private lunch today at the Blue House’s invitation. Speculation suggests Hong may play a significant role in a Lee Jae-myong administration.
• Related Link.

ETF Era Surpasses 400 Trillion Won.

• Total net assets of listed index funds have exceeded 404 trillion won. Individual investor net purchases have doubled in 10 months.
• The tail is now wagging the dog: the proportion of ETF trading volume in the stock market rose from 26% in June last year to 45% last month. The phenomenon of KOSPI prices following ETF buying has also increased.
• Individual ETF net purchases reached 32 trillion won—three times the 11 trillion won net purchases in the stock market development sector.

KOSPI 6,226.

• Market capitalization has surpassed 5,100 trillion won. The all-time high was 6,307 on February 26.
• If U.S.-Iran negotiations show progress, recovery to pre-war levels is highly likely.
• U.S. stock markets also rose. The S&P 500, Dow, and Nasdaq indices gained 0.26%, 0.24%, and 0.36% respectively.

Seoul-Jincheon Expressway Freight Autonomous Driving Test.

• Covering 112km between Seoul’s southeast logistics complex and Lotte Parcel’s Jincheon terminal at a top speed of 90km/h.

Working on Labor Day? Wages Triple.

• An additional 50% holiday premium and 100% paid holiday rate apply. Failure to pay properly results in up to three years in prison or a fine of up to 30 million won.
• Labor Day cannot be substituted with an alternative holiday. Employers cannot force workers to work on Labor Day and take another day off instead.

Worth Reading.

Back to 2018?

• The Democratic Party is highly likely to dominate the local elections.
• Park Sung-min (political consultant) identifies three variables.
• First, is Democratic Party support being oversampled? Possibly, but there’s also the chance that the “new Lee Jae-myung” and moderates have coalesced.
• Second, are the candidates weak? It’s true there are no heavyweight figures, and that a former district chief is running for Seoul mayor. However, the election is more likely to be shaped by broader dynamics than individual candidates.
• Third, could the political framework shift? While the Democratic Party has crossed several lines, as long as Jang Dong-hyeok holds firm, the “insurrection” narrative may persist for some time.
• Park warned, “If they continue without restraint or control, they could cross the public’s threshold of tolerance,” but the Lee Jae-myung administration’s luck with the opposition is significant. It might surpass 2018—and even sweep Daegu.
• Related Link.

The Conservative Party’s Third Crisis.

• 2004, the first crisis followed the impeachment of Roh Moo-hyun (then-president). The second was the 2016 impeachment of Park Geun-hye (then-president). The Saenuri Party → Liberty Korea Party → Future United Party → People Power Party survived nonetheless.
• What about the third crisis?
• Nam Do-young (The Korea Daily columnist) identified three elements for conservative party reconstruction: leadership, policy shift, and the opposition’s missteps.
• The first crisis had Park Geun-hye, the second had Kim Chong-in (then-Future United Party emergency committee chief). Park Geun-hye championed economic democratization; Kim Chong-in visited Gwangju and knelt in apology.
• Now? No leader, the policy remains “Yoon Again,” and the Democratic Party’s approval ratings are double.
• Nam Do-young warned, “If People Power Party’s crisis continues, the Democratic Party’s dominance will only lengthen,” adding, “The endgame of politics without checks and balances has never been good.”
• Related Link.