“Governments Are Short-Lived,” Jeong Cheong-rae’s Lingering Grudge.

• They decided to adopt the controversial one-member-one-vote system. Jeong Cheong-rae (Democratic Party leader) convened a party affairs committee to pass the party regulation amendment. It will apply from the August convention, favoring Jeong, who has strong grassroots support.
• At the Supreme Council meeting, he remarked, “No government can defeat the people. The people are eternal, but governments are short-lived.”
• On a Ddanzi Ilbo forum, he posted, “I spend many nights in anguish and regret,” adding, “The conclusion is always a vow and resolve for the success of the Lee Jae-myung administration.”
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“Is This How Yoon Does Things?”.

• Lee Ji-eun (Democratic Party spokesperson) sparked controversy by appearing on Park Si-young TV and saying, “I criticized Yoon Suk-yeol so much for handpicking party leaders, and now I wonder if the president is doing the same thing.”
• Lee Ji-eun eventually resigned.
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What Matters Now.

“Sorry to the People” as Approval Ratings Fall.

• In a Korea Society and Opinion Institute (KSOI) survey, Lee Jae-myung (President)’s approval rating for state affairs recorded 50.4%—a significant drop from 59.8% before the election.
• Lee Jae-myung shared the related article on X, stating, “We humbly accept the public’s sober evaluation.”
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“A President’s Crucible: I’m Likely Next in Line for Sacrifice.”.

• Lee Jae-myung (President) told the UK’s Economist in an interview, “The investigations and indictments I’m facing are politically motivated.”
• The Economist assessed, “Lee Jae-myung’s trial has been suspended during his term but will almost certainly resume after he leaves office,” adding, “His legacy may hinge on whether he can partially break the ‘Blue House curse.’”
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8% Plunge-8% Surge-4% Plunge.

• Even a 4% drop is a plunge. Stock prices have swung wildly for three consecutive days.
• This year alone, circuit breakers have been triggered 24 times—the record high was 26 times in 2008.
• Individuals’ margin account deficits have nearly reached 43 trillion won as of the 8th.
• Forced liquidations have also surged. On the 5th, the ratio of reverse trades to unsettled balances exceeded 9%—meaning investors who borrowed to trade were forced to liquidate as prices fell.
• Today’s mood is grim. Yesterday, all three major U.S. stock indices fell: the S&P 500, Dow, and Nasdaq dropped -1.62%, -1.87%, and -1.98%, respectively.

U.S. Inflation Jumps to 4.2% in May.

• Some might ask why we should care about another country’s inflation, but this is the highest rate since April 2023.
• If U.S. inflation remains severe, not only will rate cuts be off the table, but hikes could gain traction. Pressure to end the war would also intensify.
• While U.S. corporations appear to be thriving, public suffering is growing. Hourly wages adjusted for inflation fell 0.3% in April and 0.7% in May.
• Donald Trump (U.S. President) said, “I like it.” “Why?” he added. “Because once the war ends, prices will plummet like a rock.” Such remarks from Trump are only adding to market jitters.
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Deep Dive.

People Power Party Floor Leader: Jung Kum-sik.

• Jung Kum-sik (People Power Party Floor Leader) is classified as pro-Yoon. He said, “We accept the criticism that we’ve become a ‘roadside pro-Yoon party’ with acute pain.”
• If Jung Kum-sik is elected, there are concerns that Jang Dong-hyeok (People Power Party Leader) might not survive.
• Jung Kum-sik’s challenges are twofold: He must resolve the calls for Jang Dong-hyeok’s resignation and handle the reinstatement issue of Han Dong-hoon (Independent MP). Jang Dong-hyeok attended a rally at Olympic Park, holding a handmade sign reading “Election Fraud—Reelection” and chanting slogans. Even within the People Power Party, cold remarks emerge: “He’s no different from Hwang Kyo-ahn (Freedom and Innovation Leader).”
• In an interview with Chosun Ilbo, Han Dong-hoon said, “I will align with the public’s timeline.” This implies he won’t rush to rejoin. Han Dong-hoon also claimed, “If the special prosecution bill on fabricated indictments leads to dropped charges, it would be grounds for impeachment.”
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Ballot Shortage Crisis and Student Political Declaration.

• “The right to vote is not a favor granted by the state or an administrative service that can be delayed if unprepared.”
• Eighteen university student councils led the initiative. They criticized, “It was a moment when the most basic right of the people was halted by the incompetence and irresponsibility of state institutions.”
• “This is not a simple administrative error—it must be recognized as a violation of fundamental rights by the state,” they warned.
• They distanced themselves from far-right groups and election fraud conspiracy theories.

Angry 2030s’ Target: The Hypocrisy of 4050s.

• JoongAng Ilbo featured it as a front-page lead, but the survey sample was only 107 people. The conclusion: “The Olympic Park protest is the 2030s’ declaration of war.”
• 92% responded that Korean society is unfair.
• 86% said they’ve voted for different parties. The analysis: “No loyalty to any party,” yet they draw the line at becoming conservative.
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Dismantling the Agency That Orchestrated Sedition.

• Originally established as the Military Security Command in 1977, the Defense Counterintelligence Command retained its formidable authority despite name changes to the Defense Security Command and Military Security Support Command.
• The government has decided to dissolve the agency and redistribute its counterintelligence and security investigation functions across multiple institutions. Comprehensive surveillance, personnel intelligence gathering, and reputation monitoring will be abolished entirely.

38th Time, “End of War Imminent.”.

• Few now believe Trump’s words. A war that was supposed to take 4–5 weeks is now in its fourth month.
• CNN tallied 38 instances of claims like “almost over,” “nearing agreement,” or “only final confirmation remains”—yet nothing has changed.
• After Iran downed a $100 million Apache helicopter with a $30,000 drone, Trump’s volatility worsened.
• Attacks resumed at 5:00 PM U.S. time on the 10th.
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Another Take.

SpaceX’s Dilemma.

• U.S. institutional investors are in a bind. They must track index movements, and with SpaceX included in the index, they have no choice but to buy. If they don’t and the stock soars, they’ll have to explain themselves to clients.
• This is unrelated to the company’s valuation or prospects. The moment it lists, institutional investors will be forced to buy $14.2 billion worth of SpaceX shares.
• At least the burden is lighter since the S&P 500 decided not to include SpaceX.
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SpaceX Bonuses: 400 New Billionaires.

• SpaceX’s valuation is projected to reach five times that of GE.
• 4,400 current and former employees are expected to earn over $1 million each. Among them, 400 will surpass $100 million.
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Stock Supply Is Rising.

• This isn’t about stock prices—it’s about the number of shares. The Financial Times analyzed that “the U.S. stock market has stopped shrinking.”
• For years, U.S. companies kept buying back and canceling shares, reducing the total stock count more than new listings added. But this year is different: Big Tech companies have issued more equity, and mega-IPOs like SpaceX, Anthropic, and OpenAI are on the horizon.
• According to Goldman Sachs, the number of shares in U.S.-listed companies began declining in 2003. Yet this year, IPO fundraising is projected to reach $225 billion. Net supply could hit zero this year and turn positive next year.
• Concerns are growing that the supply-demand balance could collapse. To participate in SpaceX’s IPO, investors might have to sell other stocks. In fact, after SpaceX filed for listing last month, the market cap of the Magnificent 7 fell by over $1 trillion.
• Warnings of a bubble are emerging. The New York Times projected that AI infrastructure investments will total $7 trillion by 2031.
• Steven Kaplan (University of Chicago professor) said, “It’s very similar to the late 1990s,” noting that “the market is highly risk-tolerant, and investors are wildly enthusiastic about a new technology.”
• Counterarguments insist the overall market size remains far from dangerous levels.
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Humans Are the Ultimate General-Purpose Technology.

• The Wall Street Journal polled 16 economists. Five responded that AI will eliminate more jobs than it creates, while two said it will increase employment.
• White-collar workers are more at risk. David Autor (MIT professor) noted, “Replacing drivers requires scrapping massive physical capital like trucks, but call centers can be replaced with a single software update.” Nick Bloom (Stanford professor) predicted, “Offshoring will be hit hardest.” He analyzed that companies already outsourcing coding, call centers, and payroll to India or the Philippines are now switching to AI.
• David Deming (Harvard professor) observed, “Humans are the ultimate general-purpose technology (GPT).” He pointed out that while telephone operators seem to have disappeared, they became stenographers, secretaries, and service workers. They’ll find new roles, but these are likely to be far more precarious.
• Daron Acemoğlu (MIT professor) warned, “Inequality will grow even more.” Rebecca Henderson (Harvard professor) forecasted, “Angry workers will reshape politics.”
• Ajay Agrawal (University of Toronto) advised, “If a machine can learn it from past data, your skill becomes a commodity.” He stressed, “You must be the one deciding what to do.”
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“Large Mart Regulations Saved Coupang and Market Kurly.”.

• Park Yong-jin (Vice Chairman of the Regulatory Rationalization Committee) pointed out, “Coupang and Market Kurly operate 24/7, 365 days a year, while large marts close twice a month—it was an uneven playing field from the start.” The argument is that “the regulations did not save traditional markets but instead boosted online platforms and dawn-delivery companies that existed in regulatory blind spots.”
• The Korea Development Institute (KDI) previously proposed shifting mandatory closure days from weekends to weekdays. “There was no evidence that traditional market sales declined in areas where mandatory closure days were moved to weekdays,” according to their analysis.
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The Fix.

“Even a Two-Year Pilot Has This Effect.”.

• Okcheon County, which provides a rural basic income, has seen its population grow significantly.
• From 25,801 in November last year, it added 1,192 residents in a month, and has increased by nearly 100 each month this year, reaching 26,550 in May.
• Lee Jae-myung (former presidential candidate) posted on X, “Permanent implementation with increased amounts would have a much greater effect.”
• He emphasized, “Considering that per capita budgets in rural counties exceed 20 million won, it ultimately comes down to political will, policy resolve, and budgetary prioritization.” The rural basic income is 40% federally funded, with local governments covering the remaining 60%.
• Speculation arises that surplus tax revenue could be redirected to expand the basic income. In a recent interview with The Economist, he also stated, “New mechanisms like a basic income grant are necessary.”
• According to the National Tax Service, credit card spending increased by 16% in the 10 counties piloting the rural basic income program.
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Cattle Manure as Solid Fuel.

• Gimje Resource Circulation Center mixes cow manure with sawdust and rice husks to create solid fuel. Its calorific value is 3,000 kcal per kg, about half that of anthracite coal.
• Jeollabuk-do plans to invest 198.8 billion won to expand facilities capable of producing 810 tons of solid fuel. It expects annual import substitution effects worth 150 billion won.
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Seocho’s Green Space 15 Times That of Dongdaemun.

• Analysis by Greenpeace Seoul office.
• Seoul’s total green space is 176.4 km², with 18.3 m² per capita.
• Seocho District (19.6 km²) has 15 times the green space of Dongdaemun (1.3 km²), and 20 times the per capita green space.
• Dongdaemun (3.61 m²) and Yeongdeungpo (4.69 m²) have the least, while Jongno (75.61 m²) and Seocho (48.64 m²) have the most.
• Every 1 km² increase in green space lowers surface temperature by 0.23–0.25°C.
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Over 2.16 Million Workers Aged 70+.

• Up sharply from 1.22 million in 2018.
• Their share of total employment also rose from 4.5% to 7.5%.
• During the same period, the population aged 70+ grew 36% from 5.03 million to 6.82 million.
• The elderly poverty rate for those aged 66+ stands at 39.7%—more than double the OECD average of 14.8%.

ICYMI.

Changsin+Yangtze Memory IPOs Ahead.

• CXMT (Changsin Memory) and YMTC (Yangtze Memory) produce DRAM and NAND flash, respectively. Their technology still lags far behind South Korea’s, but their catch-up speed is rapid. For HBM, the consensus is that the technology gap remains around three years.
• CXMT will list on the Shanghai Stock Exchange within this month at a valuation of 29.5 billion yuan. YMTC also plans to list within this year.
• As the U.S. government has designated both companies as military enterprises, their exports are currently blocked—meaning they pose no immediate threat to Samsung Electronics or SK Hynix.
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Worth Reading.

Not the Typical “Smart and Industrious” Leader Style.

• Lee Jae-myung (President) is the classic “smart and industrious” boss type. Colleagues reportedly joke that working with him makes your teeth fall out and hair thin.
• Yet Kim Seung-hyun (JoongAng Ilbo columnist) assessed that the first-year press conference was different—relatively subdued, lacking the sharp-edged remarks seen in Cabinet meetings.
• His statement that “we should simply follow the law and common sense” regarding the dismissal of charges was criticized as merely echoing public frustration: “If the law and common sense are so clear, why aren’t you following them?”
• Kim Seung-hyun noted, “Silencing suspicions of unfairness in one’s own affairs—while previously acting as if ready to chase wrongdoers to the ends of the Earth—is not the ‘smart and industrious’ style.”
• Related Link.

Let Go of the Obsession with Dropping Charges.

• Sung Han-yong (senior Hankyoreh reporter) said this at a National Assembly forum. Sung Han-yong believes the Democratic Party faced electoral difficulties due to its fixation on dropping charges.
• “How many of the prosecutors or senior prosecutors who investigated Lee Jae-myung have been charged? Not many. If so-called ‘fabricated indictments’ are proven, dropped charges would follow naturally. But pushing for a special prosecutor with dropped charges as the priority is illogical. It was a major misstep by the Democratic Party.”
• Sung Han-yong emphasized, “The natural order is for charges to be dropped after a special prosecutor’s investigation reveals the truth, those responsible are convicted, and prosecutors at the prosecution office act accordingly.”
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A Government of Historic Polarization?

• Real estate and stocks soar while incomes for SMEs, self-employed workers, and platform laborers stagnate. Ahn Sun-hee (Hankyoreh columnist) warned, “The semiconductor boom could be a double-edged sword for the Lee Jae-myung government.”
• Ahn proposed two tasks.
• First, the short-term task: overhaul real estate taxation and introduce a financial investment income tax.
• Second, the long-term task: use the surging tax revenue from the semiconductor boom to mitigate polarization.
• “If AI-generated profits fail to recirculate into society, causing only job destruction and deepening inequality, resistance to AI technology itself will grow. We must learn from the reality where globalization’s benefits concentrated among the few, fueling the anger of ‘losers’ like Rust Belt workers, which brought Trump to power and ultimately dismantled globalization.”
• Related Link.

Must We Really Hold a Presidential Send-Off Ceremony?

• Much was said about whether Rep. Chung Cheong-rae (Democratic Party leader) attended or not, but Jung Woo-sang (Chosun Ilbo columnist) dismissed it as a “relic of authoritarian-era culture.”
• No country—whether the U.S., Japan, or the UK—has ministers lining up for ceremonial protocol.
• This overseas trip spans nine nights and ten days.
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