Today’s Likelihood of Interest Rate Hike.

• The Bank of Korea’s Monetary Policy Committee meets. In a survey of 100 bond market professionals, 66% predicted a hike.
• A 0.25 percentage point increase from 2.50% is likely. The U.S. rate is 3.50–3.75%.
• Citibank Korea forecasts two 0.25% hikes, reaching 3.00%.
• A 0.5% rate increase would add 590,000 won annually to per-person interest burdens.
• Housing-related loan balances were 1,179 trillion won as of end-March, with 35.6% variable-rate. Household debt remains precarious.

What Matters Now.

Homeplus Gets Emergency 200 Billion Won Lifeline.

• Meritz Financial Group, the largest creditor, will lend 200 billion won with MBK and Kim Byung-joo (MBK Chairman) providing joint guarantees.
• Homeplus has suspended operations at all 67 stores since the 13th.
• 200 billion won remains insufficient—without product supply, the path to normalization is long.

Youth Employment Rate at 43.5%.

• Lowest since the COVID-19 pandemic. A result of compounded factors: manufacturing slump and demographic shifts.
• The number of employed individuals aged 15–29 has decreased for 44 consecutive months.
• Framing differs slightly. The Dong-A Ilbo headlined, “Employment rebounds… but employment rate falls for third straight month.” The Hankyoreh ran, “Job numbers drop by 40,000, then rebound in June.” The Kyunghyang Shinmun focused on, “Amid semiconductor boom, youth face ‘employment poverty.’”
• Lee Jong-hoon (Myongji University professor) pointed out, “The root causes are the low job-creation power of manufacturing-centric growth, job polarization, and AI-driven job displacement.”
• Related Link.
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Deep Dive.

“How Did This Atmosphere Suddenly Emerge?”.

• Park Ji-won (Democratic Party lawmaker), who had demanded complete abolition, backtracked: “Supplementary investigative authority should be exercised only to assist the vulnerable.”
• Jeong Cheong-rae posted on Facebook, “I’m depressed by how this atmosphere suddenly emerged.” Lee Seong-yoon (Democratic Party lawmaker) argued, “Retaining prosecutorial investigative power signifies the failure of prosecutorial reform.”
• Kim Nam-hee (Democratic Party lawmaker) claimed, “Some lawmakers seek to exploit supplementary investigative authority as a political tool.” Lee So-young (Democratic Party lawmaker) stated, “If we cannot clearly explain why complete abolition of supplementary investigative authority is the culmination of prosecutorial reform, that is demagoguery.”
• Han Byung-do (Democratic Party floor leader) said, “We will pursue both deliberation and timely legislation.”
• Related Link.
• Related Link.

Backlash Over Opposition to Abolishing Supplementary Investigative Authority: Deluge of Text-Bombs and Primary Challenges.

• Pressure from hardline Democratic Party members is intensifying. A staff member in one lawmaker’s office said, “Calls are coming in so relentlessly that we’ve had to silence our phones.”
• Ko Min-jung (Democratic Party lawmaker), who participated in the supplementary legislation, noted, “We’re being flooded with vicious messages” and criticized, “A public discourse where even raising issues is impossible is meaningless.”
• A Democratic Party lawmaker interviewed by the Kyunghyang Shinmun remarked, “Many are hesitant to voice their opinions for fear of text-bombs from hardline members.” “The problem is that only fragments of information are spread to oversimplify the issue. That’s how fanbases are built.”

Why Jang Dong-hyeok Is Going Solo.

• Jang Dong-hyeok has been attending ballot-signature rallies across the country, but few lawmakers join him.
• A People Power Party lawmaker interviewed by the Kyunghyang Shinmun said, “Even Jeong Jeong-sik (People Power Party floor leader) attends events with around 10 colleagues, but Jang Dong-hyeok only has his chief of staff—it’s pitiful.”
• Jang emphasizes a “party-member-centric party.” Unable to secure legislative support, he’s banking on fandom. Another party insider remarked, “Isn’t he just copying Jeong Cheong-rae’s (former Democratic Party leader) playbook?”
• Related Link.

Song Young-gil’s Sole Target: Jeong Cheong-rae.

• “Jeong Cheong-rae seems to slightly look down on the president,” he remarked.
• “‘Shouting ‘Lee Jae-myung’ a few times won’t erase the ‘Myung-Cheong rivalry,’” he declared, adding, “In the past, such a situation would have warranted decapitating traitors to suppress rebellion”—a barrage of unusually harsh criticism.

Another Take.

Yoo Si-min: “Lee Jae-myung Government Is Headed for Inevitable Failure.”.

• On Mae-bul Show, he claimed, “The reason prosecutorial reform has stalled for over a year is that the president does not want a complete separation of investigative and prosecutorial powers.”
• Yoo Si-min (author) warned, “The Democratic Party must not accept presidential domination,” adding, “The moment the party submits to a president’s power, it will collapse.” He unleashed sharp criticism: “There is a high likelihood of a horrific outcome where the president is wounded, the Democratic Party becomes a mess, and the entire camp explodes.”
• Chosun Ilbo analyzed, “Since Lee Jae-myung’s election, the newly dominant ‘New Lee Jae-myung’ faction and the traditional pro-Roh-Moon loyalists have begun a full-scale civil war over the abolition of supplementary prosecutorial authority and the party convention.”
• Related Link.
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“Structural Majorities Do Not Materialize.”.

• Lee Jae-myung (president) once said to Moon Jae-in (former president), “We must constantly expand our reach, strive to build a structural majority, and continuously produce results to sustain it.”
• Yoo Si-min pointed out, “In democratic elections where presidents are elected every five years and lawmakers every four, creating a structural majority is fundamentally impossible.”
• “There is likely an unannounced reconstruction or redevelopment plan the president has not yet disclosed, backed by a team below. The planning level of this team is abysmal—too low. Hence, they are heading down a path fraught with immense risk and high failure probability.”

“The Kim Yong Verdict Defies Understanding.”.

• Kim Yong (former vice president of the Democratic Research Institute) was sentenced to five years in prison in both the first and second trials for allegedly receiving 670 million won in illegal political funds from developers involved in the Daejang-dong case.
• Lee Jae-myung shared a post by Lee Geon-tae (Democratic Party lawmaker) on X, writing, “It is truly hard to understand how a prosecution and guilty verdict can occur even when Google Timeline proves an alibi.”
• “Evidence of guilt must meet far stricter standards of admissibility and credibility than evidence of innocence. Proof of a crime must leave no room for reasonable doubt, and when in doubt, judgment must favor the defendant. Even if ten criminals go free, not a single innocent person should be punished. This is the most basic and important principle taught first in criminal procedure law.”
• Chosun Ilbo noted, “Some within the Democratic Party have interpreted this as a message to party members urging them to vote for Kim Yong.”
• Related Link.

Is Profiting from Reporting Corruption Wrong?

• A citizen once documented 3,000 instances of cigarette butt littering from an overpass using a telephoto lens. A case occurred where a reward of 6,000 won per report—totaling 18 million won—was withheld as being “too excessive.”
• Lee Jae-myung (president) remarked, “Making a livelihood by uncovering and reporting corruption is not inherently wrong.”
• He emphasized, “The government’s policy is to pay approximately 30% of recovered funds to the reporter or contributor when criminal proceeds are confiscated,” adding, “There is no need to prohibit individuals from specializing in reporting and earning money through it.”
• Related Link.

“Will My Term End Before Deciding the Number of Weeks?”.

• Deciding how many weeks of pregnancy abortion should be permitted is pending. The Constitutional Court ruled that the abortion ban was unconstitutional seven years ago, and the five-year legislative replacement deadline has passed.
• The issue of allowing mifepristone was raised at a State Council meeting. Mifepristone is an oral abortion medication. It is listed as an essential medicine by the WHO and used in 100 countries, but South Korea has yet to approve it.
• The Ministry of Food and Drug Safety insists legal revisions are needed, while the Ministry of Government Legislation passed the buck to the National Assembly. There are arguments that the Ministry of Food and Drug Safety could approve it independently. Han Seong-sook (Prime Minister) called it “a highly sensitive issue.”
• The key debate is the permitted number of weeks, and Lee Jae-myung (president) repeatedly pointed out, “We can’t proceed like this.”
• “My term might end before we decide the number of weeks. Why not allow doctors to exercise discretion even before the issue is resolved, or permit sales of the medication beforehand?”
• The Korean Society of Obstetrics and Gynecology issued a statement condemning it as “a highly dangerous and irresponsible idea.” They argued, “Letting doctors prescribe without legal boundaries plunges medical sites into a cauldron of legal risks and disputes—an irresponsible act.”
• Related Link.

Clash Between Kim Young-hoon and Kim Jeong-gwan.

• Kim Young-hoon (Minister of Employment and Labor) argued, “Fair distribution is a surer reinvestment.” Kim Jeong-gwan (Minister of Trade, Industry and Energy) noted, “Wealth never lasts if a windfall of one era fails to become the competitive edge of the next.”
• Kim Young-hoon emphasizes profit-sharing, while Kim Jeong-gwan stresses reinvestment.
• Chosun Ilbo is inflaming the debate, calling it “the third bill.” The first bill was N% performance bonuses, the second was mega-projects. (It treats corporate investment as government extortion.) The third, they say, is the redistribution debate.
• JoongAng Ilbo is also weighing in. In an editorial, it stated, “Given that major competitors are waging all-out national-level investment battles over semiconductor dominance, the trade minister’s emphasis on productive reinvestment is correct.”
• Related Link.
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“Only the President Fired a Good Gun,” Chosun Ilbo Reports.

• Lee Jae-myung (president) countered, “This is not reporting based on facts but a political attack based on fabrication.”
• Chosun Ilbo ran a front-page headline on the 13th featuring a photo of Lee Jae-myung firing live ammunition at Yeonpyeong Unit, with an article claiming, “Soldiers have never seen it.” Of the 820,000 K2 rifles supplied to the military, 570,000 have exceeded their 25-year durability limit. The rifle Lee fired that day was a K2C1.
• The facts? It is a nearly universal firearm already issued to 170,000 troops. The Ministry of National Defense refuted, “Reporting it as if the president fired a rifle soldiers have never seen is a clear distortion.”
• Lee Jae-myung added, “It seems systemically possible to immediately analyze such influential articles and respond based on facts.”
• Related Link.

“The Coupang Issue Lingers.”.

• Kang Kyung-wha (Ambassador to the U.S.) said this upon her temporary return to Korea.
• “We are continuing consultations at various levels to make progress on the agreed-upon joint fact sheet while managing the issue as it is,” she stated.
• The $350 billion U.S. investment has yet to finalize even the first project. Reports indicate the U.S. is conveying discontent through multiple channels.
• Related Link.

The Fix.

War on Industrial Accidents: Did It Work?

• First-half fatalities this year are the lowest since records began. Last year’s annual total was 605; this year’s first half saw only 253. Fewer than the 287 in the first half of last year.
• Construction deaths fell by 33, while manufacturing deaths rose by 25.
• Accidents in workplaces with fewer than five employees dropped sharply: 88 in last year’s first half, 67 this year.

Expensive, Scarce, and Leaking: The Gas Problem.

• Last year, 110 billion cubic meters (bcm) of gas passed through the Strait of Hormuz, while 100 bcm of gas leaks annually during oil and gas production.
• Methane leaks incur two costs: first, economic losses from lost sellable fuel, and second, social costs from warming and air pollution. Methane is energy when contained, but a potent greenhouse gas when released. It’s a commodity when sold, a climate cost when leaked.
• The IPCC 6th Assessment Report states that methane’s warming effect from fossil fuels is 82.5 times that of CO2 over 20 years and 29.8 times over 100 years.
• According to Climate Solutions, methane emissions from the production stage of fossil fuels imported by South Korea in 2023 amounted to 1.77 million tons. Converted to a 100-year warming index, this equals 50 million CO2e tons—112% of Seoul’s annual household city gas consumption.
• Methane’s atmospheric lifespan is 12 years, shorter than CO2’s 50–200 years. Even with equal reductions, methane cuts slow near-term warming faster.
• The UNEP analysis suggests that a 45% reduction in methane emissions by 2030 could avoid approximately 0.3°C of warming by 2045.
• According to the IEA, South Korea’s imported oil and gas have an average upstream methane intensity of 0.6%, three times the IEA’s 0.2% benchmark.
• The IEA estimates that if major importers jointly adopt the 0.2% standard, global methane emissions could be reduced by over 12 million tons—nearly 20%.
• What’s needed first is a procedure for South Korea to accurately measure and disclose how much methane is emitted during the production of its imported fossil fuels. Voluntary agreements lack effectiveness, and this isn’t a problem solved by trading certificates. It requires data tracking and global solidarity.
• Axel Rehm (Climate Solutions researcher) emphasized, “As the world re-examines energy supply chains, now is the time to revisit the previously overlooked gaps in greenhouse gas emissions.”
• Related Link.
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Direct Renewable Energy Trading Market Opens.

• PPA (Power Purchase Agreement) brokerage platform pilot project begins.
• The PPA system was introduced in 2022 but faced challenges connecting demand-side companies. With the brokerage platform, expectations grow for increased transactions and price stabilization.
• Average PPA prices range between 175–185 won per kWh.

ICYMI.

KOSPI Surges 6.2%.

• Buying-side circuit breakers triggered after two consecutive days of selling-side circuit breakers.
• Samsung Electronics and SK Hynix rose 6.3% and 8.8%, respectively.
• SK Hynix ADS, listed on Nasdaq, fell 9.0% yesterday. The S&P 500, Dow, and Nasdaq indices gained 0.38%, 0.29%, and 0.62%, respectively.
• Simon Coles (Barclays analyst) set a $330 target price for SK Hynix ADS. “DRAM supply shortages will intensify further in 2027 and remain difficult to resolve quickly even in 2028,” he forecasted.
• Related Link.

Electricity Bill Bomb Halts New York Data Center Construction.

• No permits will be accepted for data centers over 50MW for one year.
• 12GW of data center construction applications are pending in New York alone—equivalent to Portugal’s peak electricity demand.

3-Service Integrated Academy at Daejeon’s Jaundae Road.

• Students receive foundational training through the second year, then select Army, Air Force, or Navy for specialized military training from the third year.
• It’s a 2+2=4-year system.
• Jaundae is not a university. It’s a colloquial name derived from the neighborhood, where 17 military education facilities—including the Army, Navy, and Air Force colleges—are clustered in Yuseong-gu, Daejeon.
• Creating a 4-year university with 330 Army, 230 Air Force, and 170 Navy cadets would require space for over 3,000 students. Rumors circulated about relocating to Jangseong, South Jeolla. Critics question whether a Navy without a sea and an Air Force without a runway could become reality.
• Related Link.

Worth Reading.

Feet for Party Members, Eyes on the Public.

• Jeong Cheong-rae and Jang Dong-hyeok’s mirror image. Jung Jae-hyeok (Kyeonghyang Shinmun columnist) noted, “Politicians are not—and must not be—neighborhood bosses.”
• “The Jeong Cheong-rae–Jang Dong-hyeok line seeks to rally our side first, but expanding influence beyond that is difficult. Aligning with our side’s code inevitably distances us from the average public sentiment.”

What Has Changed?

• Samsung Electronics and SK Hynix are shattering records, with talk of a KOSPI “full-speed rally,” yet unemployment is soaring and real wages are falling. Over one million small business owners have closed shop.
• The government is not unaware of the problem. Miryu (activist at Sarangbang for Human Rights) pointed out, “The widening gap stems from structural frameworks that have always been sidelined.”
• “Mega-projects don’t feed people, and democracy won’t be compensated with semiconductors. Democracy is about deciding how we cook our rice. We must not let our land, water, electricity, and labor be swept away by reckless winds.”
• Related Link.