The last straw on camel’s back
February 13, 2001
“Most fools are harmless. Harmless fools are stupid and most of damages they do are to themselves. However, there is another type of fool and unlike other, this one is very dangerous.
He is very smart, though not very wise and havoc he creates is always at someone else’s expense. DJ Kim is a dangerous fool.”
As DJ Kim, soi-disant people’s president of the South Korea, is rapidly approaching his nadir year of lame-duck presidency, he appears to be getting stoned in dealing with national affairs, especially in financial restructuring programs, and becoming desperate like a heroin addict who has no money to buy the white powder for the instant ecstasy and has no choice but to grab his last straw on people’s back taking the pension funds for the stock market gambling.
A few days ago, DJ Kim has summoned 120 executives from the local brokerage houses and told them that the government would pour 25 trillion won from four state affiliated pension funds into the stock market in next two to three years, because the South Korean ratio for investment with pension funds is too low in comparison with other industrial countries.
DJ’s gambling with the pension funds in the stock market is not new… he already poured more than 30 trillion won out of 170 trillion won in pension money and state-run funds in stock investment that has plunged half in its price index.
DJ also noted that the Korean stock markets are undervalued, citing foreign experts saying that 36 percent capitalization of GDP is far lower than that in other big countries.
First of all, it seems quite bizarre why the head of the state called in a clutch of local brokerage barons to announce the financial policy…he believes that market is such a synonym with democracy, government leaves the market alone on its own functions, and the market will self-adjust itself under the principle of supply and demand, therefore restructuring program is based upon the privatization and deregulation of whole economic structures.
Now instead of leaving the market on its own, he instructed his financial princelings to pump-prime the stock investment in order to artificially prop up and maintain the KOSPI index above 500 points, that every financial experts have great doubt on its effectiveness.
Secondly, DJ should have at least decency to announce his intention to his people who paid into the pension funds, not in the luncheon meeting with brokerage managers, because he takes no funds from his Nobel peace prize reward ($940,000US) for gambling at the stock market, but other guys money that were deducted from monthly pay checks or funded through contributions by average Joes.
DJ has conveniently forgotten what he said in his New Year press conference that he is sorry 7.5 million Korean stock investors have lost 100 trillion won last year alone.
He has been encouraging the individual investors to put their nest eggs into the venture capital companies that have no earning records, suggesting that IT industries are under-valued in the bourse, while totally ignoring NASDAQ’s plunge in stock prices is due to the bubble effects caused by the speculative and predatory investments by the international hedge funds companies and currency speculators.
Since his presidency, DJ Kim has been in bed with the Wall Street financial barons, placing every saleable and valuable national enterprises on the international auction bloc under the name of privatization and structural adjustment programs (SAP) and robbing Peter to pay Paul when the loans mature or injecting tax payers money into the bottomless pits of bankrupt financial institutions with abandon.
While the government blames the accounting irregularities among the big businesses of the country, DJ’s financial czars blatantly engaged in the opaque accounting practices that transferred bad loans to the balance sheet of Korea Asset Management Corp (KAMCO) and sold its insolvent debts with half prices to the foreign financiers like GE Capital, Goldman Sachs, and Morgan Stanley Dean Witter.
According to Korean Stock Exchange, about 60 major listed companies in KOSPI are under the control of foreign investors…the foreigners own 54 percent of Shinhan Bank stocks, while the government holds only a 14.5 percent stake in Housing and Commercial Bank compared with 65,31 percent by foreigners.
No Korean Chaebols control major industries in the South Korea any more…Samsung Electronics are under the foreigners stakes over 57 percent while the largest shareholder, Lee Kun-hee only keeps 12 percent.
Pohang Iron and Steel Co., SK Telecom, are already dominated by foreign investors.
Foreign investors and financial institutions like AIG, hedge funds companies in Wall Street, Salomon Brother, and Morgan Stanley control more stakes than domestic shareholders in the stock ownership of Hyundai Motors, Hyundai Electronics Industries, L.G Chemical, Shinsegae Department Store and like.
The bottom line is that DJ and his financial mandarins are not at the helms of the Korean economy any more, no matter how cantankerously they cry out they work for their people…the total market valuation of shares held by foreign investors in the Seoul bourse account for over 40 percent compared to 20 percent in 1998.
When the New York stock market fluctuates to adjust its over-valued and speculative stock prices, the South Korean bourse is sucked to the tailspin of the whirlwind gyration and DJ’s financial high priests have absolutely no recourse to arrest the turmoil in the market.
In addition, DJ government has already lost about 70 trillion won out of 150 trillion won they spent to bolster the weak financial institutions in the stock market that plunged in half price index.
DJ has no money left in his pocket except his meager $940,000US from Nobel Peace Prize, and he would in no way gamble with his hard-earned money in volatile market.
Therefore, he dips as usual in Joe Blow’s cookie jar to ante up in the stock market casino.
He has been a professional and reckless political gambler…he’s never been employed in his whole adult life except working briefly at the local fish market, he’s been well off on his wife’s back in 60s, on political donation from the General Association of Korean Residents in Japan in 70s, and on largess from Rockefeller Foundation in 80s, and on the slush funds from the Korean Chaebols and General Roh in the early 90s.
Even in the United States, the social security funds are too sacrosanct to manipulate with and no politicians dare to gamble with the senior’s pension money, because they know that it is too risky to gamble in the stock market and they do not want to place them on the chopping block in next election.
Then why our Papa dips into the piggybank of his people?
Our Papa has been a Machiavellian in his whole political life…all the time rationalizing, fantasizing or just refusing to think about what the consequences of his gambling with other’s money would bring forth to the poor and old John and Jane Does.
When he was desperate winning the Presidency, he lied to the perennial sucker, JP Kim, with a gift of heirdom.
Last year, the sucker was hooked again with a gift of leased three deputies and DJ has become more bold to hook his people with a gift of bubbles.
He is a dangerous fool who will eventually be hoisted with his own petard.