영어 Through Entertainment: The Godfather Part III "They pull me back in..."

The Godfather Part III is a Terrible Movie
Generally speaking, The Godfather Part III is an awful movie.  It was a sad ending to one of the most storied cinema franchises ever.  Very rarely, if ever, does a sequel surpass an original.  Well, that occurred as The Godfather Part II won the Oscar award for Best Picture.

Nevertheless, This Single Line is Memorable
The main character of The Godfather trilogy is Michael Corleone.  As he grew older, he attempted to legitimize himself, and his ill-gotten gains.  Despite his effort to get out of illegitimate business, he failed.  Forces around him made quitting his illegal activities impossible.

"They pull me back in"Has Another Meaning
Of course, you can easily understand the language.  Corleone believed that he was going to become legitimate, but was unable.  The hidden meaning, however, is more subtle.  It has become to be an ironic statement, which implies that he never really meant to leave in the first place.  Furthermore, he is blaming some other force (the "they") for the his failure to become legitimate.  It is of course, not true. 

Examples:
(o)  I wanted to leave the nightclub, but they pulled me back in.
(o)  I wanted to stop watching reruns of Boys Over Flowers, but they pulled me back in.

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영어 Through Entertainment #7: The Jedi Mind Trick

A Long Time Ago, In a Galaxy Far, Far Away...
Star Wars (1977) is the most famous science fiction movie of all time. The brainchild of George Lucas, Star Wars still, incredibly, lives via cartoons, books, and movies. The original Star Wars is actually called Star Wars IV: A New Hope. While other movies have grossed more at the box office, George Lucas created an entire industry which began with Star Wars, including the creation of companies vital to film-making.

Star Wars Created the Phrase "Jedi mind trick"
There are many famous scenes in Star Wars, and one of them is here, which is the first time that we see evidence of the "Jedi mind trick."

What Does "Jedi mind trick" mean?
Obi-wan Kenobi, a Jedi knight, has used brain power to make the stormtroopers (the armed guards) believe what he (Obi-wan) wants them to believe. Today, the "Jedi mind trick" is another way of saying that you have fooled someone into believing what you want that person to believe. Today, you can still hear the phrase "Jedi mind trick" in movies or on TV.

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Ouch! Deutsche Bank Sanctioned by the Korea Exchange (KRX)

Deutsche Bank AG Fined by the Korea Exchange (KRX)
The Korea Exchange has levied a record KRW 1 Billion fine against Deutsche Bank AG, one of the world's leading global investment banks.  The reason?  Program trading during the last minutes of November 11, 2010, when the KOSPI sank by over 2.5% within the last 10 minutes of trading.  Why is that date important?  It is important because certain financial contracts (futures, options, and options on futures) all expired on that date.  The alleged misconduct was due to the fact that Deutsche Bank failed to report its activity within the allotted time near the market close.  It is alleged that Deustche Bank's proprietary trading group sold a great amount of equity which triggered a rapid, unexplained decline in the overall market, and Deutsche Bank profited for its own account during that time.  There are multiple lessons to be gleaned from the event, and the punishment.

Program Trading Exists in Every Large Equity Market
Large banks, hedge funds, and other money managers actively use program trading, which are computer-generated actions that result from a simultaneous scan of the entire market at once.  Every firm's program trading algorithm, or set of trading rules, uses a slightly different set of factors in making buy or sell decisions.  Some have suggested that program trading gives an unfair advantage to the firms that deploy such tactics.  Guess what?  That happens in every market, and in every business.  The most profitable grocery store is the one that has the best prices for the supply of goods that it sells.  It isn't program trading, per se, that is the culprit here.  However, as readers will see below, that is, in fact, what is being indicted.

Late Reporting of the Activity is the Cause of the Fine.  This Matters?
Now this is pretty flimsy.  It is said that the KRX has fined Deustche Bank for filing its disclosure of activity one minute late.  This leaves more questions than answers.  Does this mean that market participants are watching the disclosures themselves for information regarding whether or not there are these automated programs at work?  In other words, lets say you are an investor.  Are you looking to the KRX for the disclosures in order to get an advantage in the market?  Let's say now that the market begins to move in one direction or the other.  You ask the KRX for the information, and it says that there is no report of a large program trading execution in the market.  You as the investor have three choices.  Buy, sell, or hold.  But, those are the same three choices the investor had 10 minutes ago.   By the way, does anyone believe that Deustche Bank was the only active, competent participant in the market at that time?  There is zero chance that the answer is yes.  There is fierce competition all the time among market participants.  In other words, there are equally smart and qualified people at other companies, in Korea, that would have had the ability to buy what Deustche Bank was trying to sell.  Did Deutsche Bank break a rule by being one minute late in its report?  That is a matter of fact, so you would have to presume the answer is yes.  Did the one minute late report cause the market decline with no other buyers?  Not unless everyone in the Korean equity market only looks for program trading execution to get its clues, i.e. the short answer is no, it is highly improbable.

This Boils Down to Bad Rules and Illiquid Markets
When there are many buyers and sellers, and you can buy or sell securities rapidly in large amounts, it is called a liquid market.  It is most likely that the KRX is using the 1 minute violation to fine Deustche Bank for taking advantage of an illiquid market.  That is what they are supposed to do.  If you were a stockholder of Deutsche Bank, then you would have been happy to know that Deutsche Bank was smart and fast enough to do this.  You don't hear about Hyundai-Kia shareholders complaining about the fact that Hyundai has gained market share as Toyota is suffering from quality problems, do you?  Deustche Bank should have followed the rule of giving the information one minute earlier.  There is no doubt about that.  Is that what is being punished here?  No.  This is another rule on markets which is being used against a large bank when governmental officials discover a weakness in the market structure.  Again, that activity happens all the time in every financial market and every other type of market.  It is the fact that Korean regulators deemed it inappropriate activity, and found the loophole by which it justified the punishment.  One minute late.

The Punishment is Onerous, the Deterrent Hurts Who?
It is not the USD $1 million fine that matters in the least.  It IS the six months' time when Deustche Bank must cease proprietary activities in Korea.  Now that is a large problem.  That will clearly cost Deutsche Bank.  Their financial reports do not itemize the source of revenues, but the lost revenue will be many, many times the paltry $1MM fine.  The question that remains is whether or not there is a deterrent?  Well, certainly no firm will report one minute late to the KRX.  However, the real question is whether or not advanced financial firms will want to continue to pursue their activities which support the advancement of the financial industry in Korea.  It is suspiciously convenient that the KRX has used the "one minute late" reasoning to punish Deutsche Bank.  If there are position sizing limits that have been violated, then that is another matter.  However, that has not become public record as yet.  "Naked" or unhedged positions does not seem to part of KRX' charges.  Let's put this another way:  if the market went up by 2.5% during those 10 minutes, would there be this type of charge?
The Seoul Gyopo Guide has been created to pursue the central theme that as Korea matures, the rules and the effects will be different, and Korea must adjust to a larger world with competent, global competition.  In this case, the KRX has proven that it can hand down harsh punishment.  The question is whether or not it can prove that it is a justified punishment.  "The market went down" isn't a defensible reason, so this story is nowhere near being completed.  It will be very interesting to see how the facts get told and how the fines get justified.

Blame Foreign Speculators? They HELP Korea, Not Hurt It

Koreans Love to Blame Foreign Speculators
You can easily find that Koreans based in Korea often blame foreign speculators for the volatility of Korean markets and assets in general. In the Korean press, you will be able to find not-so-subtle articles which suggest that foreigners are responsible wild gyrations in asset prices.  Sometimes, the blame rises to a fever pitch, and political decisions get made which are totally unjustified when you apply internationally accepted norms.  Not norms only accepted by the U.S., but by the global community as well.  As Korea matures into a first-world country, these political decisions are not favorably received by the global community.  The Seoul Gyopo Guide has pointed out, on multiple occasions, that the KEB debacle was completely unjustified, and motivated by political whim only.  The reality is that over the past few years, Korea has benefited greatly from foreign speculators' movement of money around the world.

Korea Has Benefited a Great Deal Because the Yen is Strong
For those that have read the Seoul Gyopo Guide in the past, this headline is no surprise.  Korea has feasted on one simple fact:  the Japanese Yen is very strong, for a number of reasons, and that has made Japanese products too expensive in the international marketplace, and in many cases, has severely hurt Japanese company profitability.  Toyota, Sony, you name it, they have been hurt by Japanese Yen strength.  Who has benefited?  Hyundai-Kia and Samsung Electronics (and others).  We can debate this or that feature but the fact is that these products by Japanese and Korean companies are very competitive with each other.  The reason that has occurred is because Korean companies have used their gains in the international marketplace to improve the quality of products produced.  Those gains were the result of the fact that Korea's products were cheaper compared to Japanese products due to the JPY/KRW exchange rate.  Twenty years ago, no one would compare a Sonata with an Accord.  Today, that is very much the case.  Korea has the strong Yen, in no small part, to thank for that.

Why is the Yen So Strong If Its Economy is in Decline?
There are a large number of reasons for this and too numerous to completely analyze here.  However, here are a few.  First, Japan has an economy where its debt, though very large, is largely owned by the Japanese.  As a result, you don't have foreign investors selling Yen-denominated securities every time it is more clear that the Japanese debt burden is large.  The ratings agencies have downgraded Japan recently.  The Japanese Yen didn't move appreciably.  Second, the stability of the debt, coupled with the stagnant Japanese economy, has led to the "Yen carry trade."  It has allowed foreigners to convert into Yen, and then pay back the Japanese interest rate, which has remained close to zero because of the stagnant Japanese economy. So, when there is increased risk around the world, investors convert their currency into Yen.  That is exactly what has occurred over the past week, and over much of the past few years, as governments around the world have borrowed money from foreign investors.  Where has that not occurred?  Japan.  The result, the Yen, which should otherwise be weak, has remained strong relative to other global currencies, and the Korean Won.


The Korean Won / Japanese Yen FX Rate Hasn't Moved
In fact, the rate as of this writing is approximately 13.6.  Before the financial crisis hit, that rate was around 8.0.  Amazingly, the Korean Won has actually weakened compared to the Japanese Yen since the beginning of 2010.  That has been to Korea's corporate benefit.  The reason that there are so many more Japanese and Chinese tourists around Myung-Dong?  Korea is cheap compared to their own markets.
Now, part of this is explained by the Bank of Korea's intentional policy.  The BOK has a difficult task, because a weak Korean Won has caused increased inflation.  For example a Korean Won can buy fewer imports because the import is priced in its own currency.  It isn't all good news that the Korean Won has not strengthened greatly against foreign currencies. Nevertheless, the idea that foreign speculators are to blame is a misguided notion.

Conclusion
The Lost Seoul is qualified to write in-depth posts around this topic but is more interested in the central theme: Korea will have to deal with the effects of joining the elite nations of the world.  Critics of the government and policy makers will need to take this into account before throwing out inaccurate statements and criticisms  which no longer apply.  The rules of competing on a global playing field, with and against competent, global competitors are not easy to manage, nor should they be.  Old-fashioned thoughts and criticisms applied when Korean companies did not make world-class products.  Old-fashioned criticism against the government don't work because while Korean products are world-class, the restraints of small population, small geographic size, and lack of natural resources are unique to Korea when compared to Germany, Japan, and the U.S.  As a result, policy must take this into account, and critics must as well.
These are "high-quality" problems.  A "high-quality" problem is one that occurs because Korea has successfully used the past few decades to make unprecedented progress on the global economic stage.  Other "emerging market" countries have not had to deal with the same restraints that Korea has faced and overcome.  Brazil?  Enormous amounts of natural resources.  China?  1.4 Billion people.  India?  1.1 Billion people.  Foreign speculators are not the root of the problem:  the issue is that Korea faces unique challenges as it stares down Toyota, Siemens, and Ford on the global stage.  Blaming foreign investors as wild speculators have actually created Yen appreciation, which has, and continues, to benefit Korea.

영어 Hint of the Day #35: "Plan" vs. "Scheme" (미국영어 vs 영국영어)

The words "plan" and "scheme" are similar.  Kinda.
The word plan isn't difficult to understand when it means to prepare or a preparation.  It can both be a noun or a verb, and translates most simply to 준비 in Korean.  In Korean also, 준비 is the root of either a noun or a verb.  In English and in Korean, the word is basic and simple.

"Scheme" Has A Slightly Different Meaning in British English
When someone has a specific plan to save money in a fund, or a bank, with a plan to withdraw that money at a later date, that is frequently called a scheme. A scheme would, in that case would be very similar to the word plan. The British would not consider it to be anything which may be illegal or one party taking advantage of another.

"Scheme" Has A Negative Implication in American English
To Americans, the word scheme has a slightly different implication. When a con man has a plan to take money from the unsuspecting victim, then the con man has a scheme, or is scheming something. While this is not always the case, the scheme is not frequently used in everyday language. The word plan, however, can be heard or read daily.

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Economics is a "Con" Game: A Matter of "Con"fidence and Koreans' Lack of It

No Way to Put Lipstick on This Pig:  Korean Consumer Confidence at 21-Month Low
Today, even cnbc.com reported that Korean consumer confidence hit a 21-month low.  Literally, a few moments ago, the Seoul Gyopo Guide pointed this out as a large problem for the Korean economy.  Simply put, if you are not confident in your financial situation, you are less likely to spend.  Less spending means less profits for Korean corporations.  Less profits means lower bonuses and more unemployment.  In other words, confidence is very important because it can begin or end a vicious circle.  That is why consumers' confidence is measured and watched very carefully by the press, and policy-making officials.

The Middle East Situation Isn't Helping
Not only are the revolutions in the Middle East increasing the cost of oil, but there are other more direct effects as well.  Korean engineering and construction (E&C or 건설) companies have turned to foreign construction projects as a large source of revenues.  In the most recent protests in Libya, Korean constructions projects were targeted.  While the individual project losses may be limited due to insurance, the chance that there will be additional projects in the region is limited at best.  Given the state of the Korean real estate market, Korean E&C companies will be adversely affected from the potential loss of these vital sources of revenues.  Maybe the Hyundai E&C fiasco will calm down as a result, which is perhaps the only good effect of the rising tensions in the Middle East.


Give the Bank of Korea Credit For Resisting Criticism
The Seoul Gyopo Guide has been defending the Bank of Korea's position regarding interest rates:  hopefully, the recent events prove that the Bank of Korea has proved to be a steady hand.  Most of the criticism of the Bank of Korea's most recent policy decision to maintain the current level of interest rates has proven to be one sided at best, and grandstanding at worst.  This criticism has come from bloggers to portfolio managers.  What has been stated here will be repeated:  Korea's economy is fragile because it is not in control of important factors that affect its economy, and as such, the Bank of Korea must be given maximum flexibility.  One aspect of that flexibility is the element of surprise.  Another is the right to ignore the popular press and critics, especially those that do not know or understand the complicated picture.

 

Korean Government Tries to Prevent Further Savings Bank Panic

Another Article About Savings Banks Problems in Korea
The Wall Street Journal's Live Korea Blog pointed out that Korean government officials were trying to 
prevent a bank run, i.e. large withdrawls from savings banks.  As explained here at the Seoul Gyopo Guide, in this earlier article, panic would lead to more panic among investors, thereby creating a self-fulfilling prophecy.

The Savings Banks Problems Is Just a Symptom of a Potentially Larger Problem
The point made in the previous post here at the Seoul Gyopo Guide is still true, and it is more important that the actual facts that are being reported bby the Wall Street Journal.  The underlying causes for this situation are the real issue at hand.  The issue is that the underlying assets own by banks, i.e. mortgages or loans made to small-mid sized companies, are struggling, and at the same time, consumers have to use more of their savings due to increased inflation caused by a variety of reasons.  When there is an imbalance between the amount of deposits in the bank, and the fair value of the assets of a bank, like loans, then banking regulators seize or close banks. 
This is not the first time that these issues have affected Korea.  The consumer borrows heavily when credit is available for multiple reasons, one of which is the consumer income tax deduction which is allowed when credit cards are used.  In each of the instances that consumers became over-stretched, financial institutions struggled and had to divert their attention to repairing themselves, and away from other activities. 

The List of Challenges is Getting Longer, and the KOSPI is Taking Notice
Over the past month, the KOSPI is down by over 5% from its highest level last month.  From a longer-term perspective, this is no big deal.  However, should the selling continue, as it has in India which is down 11% for the year, and Asian growth is perceived to be slower, then more shocks to consumer confidence are sure to follow.  While Korean brands have retained their high posts amongst the global elite, some cracks tot he economy are beginning to appear.

Pathetic, really: Korean Nabbed in Manila for Operating Sex Tours

Isn't This Available in Korea?  Anyone? Anyone?  Bueller?  Bueller?
This is irony at its height.  Korea is now indeed scaling upwards and onwards, as one of its citizens has now been convicted of trying to imitate Germans by organizing sex tours to the Philippines.

What a Joke (Minus the Humor)
Korea has an enormous black market economy, estimated at something like 15% of the total Gross National Product.  Native Korean adults accept this is as fact.  If this is really something that a Korean-based Korean wants to pursue, he has to walk all of 1km, at most, almost anywhere in Seoul.

So now you need to spend the extra time and money to go all the way to the Philippines?  I don't get it.  Other than wanting to prove that Korea has advanced to the level of Europeans (who arrange trips to the Philippines and Thailand for this purpose), I have no idea why oh why this occurs.

Someone please enlighten me.

KPOP on Bloomberg: The Beginning of the End?

Being Featured in the Popular Press Often Signals the Beginning of the End
Some people believe that when the popular press begins to mention a trend/fad, then it is the beginning of the end of its popularity.  There is good reason for this.  The reason is that the popular press in the West is slow to report new trends.  As such, by the time that such news is actually reported, it is the absolute height of popularity, and subsequently, a decline in popularity begins.  If you agree with this idea, then the following report on Bloomberg regarding KPOP isn't welcome news at all.

Here's the link:
http://www.bloomberg.com/video/66834590

Justin Bieber Has Nothing on KPOP in Korea
Are you stunned at the amazing popularity of Justin Bieber around the world?  Well, the best way to compare the group of KPOP stars is to Justin Bieber.  When SNSD, Super Junior, or other groups go to a department store, they are mobbed.  They can forget about going out in public undetected.  Even in Manhattan, a public figure can go and visit places without being mobbed by hundreds of people.  Not possible for a KPOP star.  Starbucks?  Well, there will be a crowd of fans across the street.  Anytime that you go to a coffee shop in Seoul, and you see a crowd?  You can assume, safely, that it is a KPOP celebrity.  It is a pop culture enthusiast's wildest fantasies all coming true at the same time.  The most popular blogs in Korea?  All about KPop.  It's not even close.  You can check for yourself: search for SNSD in Facebook and see what happens.  OMG LOL.    
As Bloomberg accurately reports, KPOP is an enormous export industry.  I wouldn't go as far as Bloomberg:  I would maintain that Samsung Electronics and Hyundai-Kia Motors are still more powerful economic forces. 

It's Not All Great News, Of Course
Inside Korea, of course, there is controversy which surrounds these groups of young singers.  Mostly, they are all below the age of 30.  The girl groups wear skimpy outfits, and great deal has been written about the (s)exploitation of these singers.  For the most part, the members of these groups were assembled by management companies, and not through friendships.  There are ongoing auditions for parts in these groups.   JYP, SM Entertainment, etc: these are household names in Korea, and they are names of entertainment management companies.

Is this the top of the market?
It remains an open question, but for now, the answer is clearly no.  In fact, you might say that there is ongoing, sustainable strength in the export of Korean entertainment.  Korean movies and dramas are actively, and successfully being exported outside Korea.  To Asia, this is not new.  Korean entertainers have been famous in Japan for well over 20 years.  Of course, all groups dream of becoming famous in the US and the Western Hemisphere.  Korean dramas have been translated into Spanish. 
While the genre will most likely survive, it is highly doubtful that any of the individual groups will know long-lasting fame.  A few names have made it:  BoA and Rain remain to be those names that have endured for the longest period of time.  Whether the Wonder Girls, SNSD, Super Junior, KARA, T-ara (and many, many others) will be household names in five years remains a question to be answered. 

영어 Slang of the Day #18: "Speak for yourself," I think otherwise. What?

You can say "Speak for yourself" when you have a different opinion
Sometimes, another person states an opinion, and you do not agree.  When that occurs, you can use the phrase, "Speak for yourself."  My guess is that the full sentence would be, "You are speaking for yourself only."  It means that you are telling someone that the opinion that he stated is his, and not yours.  It is, in a way, a relatively neutral way of saying that you think/feel differently.

Examples
A.  Everyone knows that actors on Boys Over Flowers are all cute.
B.  Speak for yourself.  I think they all look too feminine, even though they are male.

A.  Jazz music is the most soothing for the soul.
B.  Speak for yourself.  I think that the Wonder Girls have the most meaningful songs. (?!?)

Notes
The point of using "speak for yourself" is that it is a more subtle, and maybe polite, way of saying that you do not agree.  However, the language is still slang, and therefore, informal by nature.  The examples above wouldn't be used in a business setting or a debate in a formal setting.  Of course, if the tone used was more harsh, then "speak for yourself" could be seen as an insult.

영어 Through Entertainment #6: Anyone? Anyone? Buehler?

Ferris Buehler's Day Off is Hilarious, Even Today
Ferris Buehler's Day Off  (1986), a movie set in suburban Chicago, is about a high school student (played by Matthew Broderick), who skips school for a day.  While taking attendance, the teacher calls out Ferris' name.  Here is the clip.

The point is that this economics teacher, a very boring teacher, called attendance in a very boring tone, and he also taught in that same tone.  He asked his class questions by saying "Anyone, anyone?" in the same way he asked "Bueller, Bueller?"  The teacher received the same response: silence.

Today, if you say "Bueller, Bueller?" then you are looking for a response, but aren't getting one.  In fact, your audience may be absent (like Ferris Bueller), or totally uninterested (like the students), or don't have the answer. 

Note:  This movie is pretty old (25 years), and so adults are probably the only ones that will understand the reference.
Extra:  One famous scene featured the The Beatles' famous song, Twist and Shout.  Here is another clip from the movie, Ferris Bueller's Day Off.

Extra:  The Beatles' famous song Twist and Shout figured prominently in the movie.

Does a Bank Run Loom in Korea? Probably Not, But....

The Largest Savings Bank in Korea Has Closed
The Wall Street Journal has reported what Koreans already know: savings banks in Korea are in trouble.  This past week, 4 savings banks, including the nation's largest, were seized by the government.  The reason?  People who had their savings in those banks have withdrawn their money, and that has led to greater fear by the remaining depositors.  The result?  More people withdraw their money, and a vicious cycle begins.  This is known as a "run on the bank."  On Sunday, February 20th, the Korea Herald published this story regarding fear of a bank run (after the Seoul Gyopo Guide's original post yesterday).

Run on the Bank is a Comment on Koreans' Confidence in Government
Much like the United States, Korea has a deposit guarantee corporation, called KDIC.  It insures peoples' deposits in banks (for normal savings accounts).  The fact that this didn't matter, and depositors wanted to withdraw their money is a partial reflection of people's fear and lack of confidence not only in the bank itself, but it also points out that people have little confidence in the government who is insuring the deposits.  In Korea's case, this is a symptom of a systematic problem.  That problem is that everyday Koreans are largely distrustful of large, authoritarian entities.  This is quite interesting.  On one hand, democracy is quite young in Korea, and the legacy of mistrust from authoritarian regimes is understandable.  On the other hand, many Koreans' wealth is due, in large part, to the performance of the largest corporations, otherwise known as chaebol.  If you observed that this is also the case in other developed democracies, you may very well be right, which would suggest that Korea is quite developed indeed.

Savings Banks' Problems Now, Credit Card Problems Redux?
The underlying problem is implied in the Wall Street Journal article.

The suspensions come as the government tries to head off risks of systemic shocks caused by distressed savings banks, which are suffering from their exposure to the weak South Korean real estate market.

The fact is that the residential real estate market is suffering.  Inflation, on the other hand, is rising.  That has pressured Korean consumers.  In 2003, many Korean credit card companies were forced to be merged into their parent companies.  In addition, some credit card companies failed.  Part of the reason for the extensive use of credit cards in Korea is the tax benefit of using credit cards.  If you go to an apartment complex, there is usually a board for announcements and advertisements.  They are littered with home equity loan advertisements from finance companies.  With the cost of living rising, and the value of the largest asset, the home, declining, it is worrying that the savings bank industry is also under duress.  Whether or not the savings banks' difficulties will spread to the finance companies or another credit card crisis is yet to be seen.
Project finance is another area of concern to the savings banks in Korea.  Given that the largest corporations borrow from the largest banks (and international banks), that leaves construction loans, etc for the savings banks which are more locally-based.  The identical thing has occurred in the United States.  The safest borrowers borrow from the largest lenders, and the smaller, weaker borrowers go to the smaller, weaker lenders.  In addition, these weaker lenders are regionally based; therefore, loans made by these lenders is more concentrated than their larger competitors.  Continuing economics malaise outside Seoul continues to pressure the underlying projects, and the lenders to these projects.  Who are these lenders?  Savings banks.
 
Conclusions...Is Korea the Next Spain?  No, but...
The savings banks' asset size is relatively small in Korea.  Korea's financial services industry, as in most other developed economies, is dominated by the largest institutions.  However, the rising cost of living, when coupled with declining real estate values, is a dangerous combination.  If the savings banks' difficulties threaten overall consumer confidence in Korea, then that would represent a major problem.  As stated here, the Bank of Korea's job has been difficult, and will remain so.  A brief summary of some of the challenges facing the Bank of Korea has been posted here.  The latest difficulties at the savings banks is another important factor that must be taken into account.  There has been criticism of the Bank of Korea's most recent decision to keep interest rates steady.  In addition, the Bank of Korea has been criticized as being tied too directly to the Lee administration.  That is a gross oversimplification of the situation.
Before anyone believes that it is that simple, he/she should consider the Spanish example, where the banking system is in peril, and is part of the cause of the Spanish economic malaise.  Real estate problems led to banking sector problems in Spain.  Of course, South Korea's economy is more diverse than Spain's where real estate and tourism dominate.  Nevertheless, when real estate prices affect banks, then the analogy deserves thought.  Add rising energy prices and increasing overall inflation, and it isn't obvious at all that the Bank of Korea has done anything wrong. 

영어 Hint of the Day #34: "To be honest with you..." the word "Candidly" is better

"To be honest with you..." is a frequently used phrase
Admittedly, this has always been a strange phrase.  It is quite common.  When you are talking about a topic in which there may be a difference in opinion, or when the facts may be unknown, then people frequently use the phrase "to be honest with you."

Examples:
A.  To be honest with you, I think that black doesn't look good on you.
B.  To be honest with you, I think that the KARA is better than SNSD.

Actually, I try to avoid this phrase.  Why?  The reason that I do not use this phrase is because then there may still be doubts about my sincerity.  For example, if I said "To be honest with you, this option is best."  Well, does that mean that there was even the possibility that I would not have advised you of this option otherwise?  When someone else says this phrase, I wonder to myself, "Was he not being honest earlier?"

Instead, I prefer to say "candidly," or "frankly."  You can use either word instead of the phrase "to be honest with you."
(o)  Candidly, I think that black doesn't look good on you.
(o)  Frankly, I think that KARA is better than SNSD.
 
Notes:
This could have been a phrase in "Slang of the Day," but it is now established as a phrase which cannot be called slang.  Most native English speakers will know the meaning of this phrase.  That said, the phrase isn't appropriate for formal writing.  It could be said that it shouldn't be used in formal speaking, like a presentation, but the fact is that listeners probably will not be affected.

영어 Slang of the Day #17: Well, "that's on you." What does "that's on you" mean?

The phrase "that's on you" is used to say that the responsibility is yours, and yours alone.

This is a relatively new phrase, i.e. it didn't really exist 10 years ago.  It is used when one person decides something by his/herself, or chooses an action by his/herself.  When that occurs, the results, or the effects of the choice or decision are the responsibility of the person that made the choice or decision.

Examples:
A.  I chose rock music as the theme of the dance.
B.  Well, the dance isn't going well.  That's on you.

A.  I've decided on a new strategy for the company.
B.  The strategy isn't working.  That's on you.

Notes:
Generally speaking, the phrase "that's on you" isn't used in a complimentary fashion.  Instead, it is usually the case that it is used when the consequences are negative.  It is possible that the phrase is used when the outcome remains to be seen, but the person using the phrase "that's on you" is usually expressing skepticism, and not optimism.

You can also say "that's on you."

This phrase would definitely not be used in formal settings.  It is a phrase to be used in casual settings only.

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Not News, and No Analysis: Bloomberg Reports on N Korea-China Trade

Bloomberg Reports What Seoul Gyopo Guide's Readers Already Know
Today, Bloomberg, one of the world's most influential business news sources, reported that China has increased trade with North Korea. There is little doubt that increased trade between North Korea and China is a welcome development for North Korea.  Readers of the Seoul Gyopo Guide have known that not only is the news welcome, but has also pointed out that increasing trade poses challenges to other countries, including South Korea. 

What Conditions and What Price?
The eventual impact of these developments to all parties involved largely rests on two issues.  The terms and conditions of these agreements, of course, is confidential.  Most likely, it is the case that China has agreed to help develop North Korea's infrastructure necessary in order to extract the materials.  As a result, the total benefits to North Korea may be multiple times larger than reported.  Second, the question how is the price determined for the raw materials that China has purchased from North Korea?  It has been rumored that China has extracted very favorable price terms from North Korea.  Below market prices could potentially lead to competitive advantages for Chinese companies when compared to foreign competitors.  Those competitors, increasingly, will be South Korean companies. 

Conclusions
The Seoul Gyopo Guide has frequently stated that too often South Korea is subject to changes beyond its control.  This is one of them.  The notion of South Korea being a low-cost producer of almost anything is now virtually non-existent.  Domestically, the cost of labor is uncompetitive on the world stage.  In addition, the input prices of the products made by Korean companies is universally rising.  Only by producing the world's best products will South Korea be able to survive over time.  While this will not occur overnight, China's emergence and influence is making this a more urgent matter.

Criticism of the BOK's Decision is (Largely) Unfounded

The Bank of Korea Has Taken Criticism for its Recent Decision
 The other day, the Bank of Korea (BOK) kept its target interest stable, which was different from market expectations.  Market participants widely believed that another rate increase would occur. In the Wall Street Journal's Korea Blog, it was reported that the Bank of Korea has received a great deal of criticism about this most recent decision.  The Seoul Gyopo Guide believes that over time, interest rates must increase in Korea.  However, the criticism for the most recent, one-time decision, is unfounded because the situation is far more difficult than has been reported.  The Seoul Gyopo Guide has described the Bank of Korea's difficult position here, three weeks ago.  This difficult balancing act is one that the Bank of Korea will need to perform for the immediate future.
  
Demand Pull Inflation?  Not So Fast. 
Some economists would suggest that Korea has faced something called "demand-pull inflation," which is that everyday Koreans are trying to buy more items, such as food, clothing, entertainment, and durable goods like appliances.  Really?  Anecdotal evidence doesn't suggest that.  While department store sales have increased, the fact is that there isn't a shortage of items for sale in the stores.  In fact, popular imported items have increased in price due to the relative weakness of the Korean Won compared to its counterparts, such as the Euro.   That said, it is undoubtedly true that credit card companies have loosened their standards of lending considerably, which has added liquidity to the domestic Korean economy.
Much of the reason that everyday Koreans may be more confident is because they know that Korean companies are prospering in the international marketplace.  It is the case that the weak Won relative to other currencies, especially the Japanese Yen, has contributed greatly to this.  The Seoul Gyopo Guide has written about this a number of times.  A reversal of this will make Korean products less competitive from a price perspective, which would, in turn, cause lower Korean corporate profits.  Korean consumer confidence would fall, and the current optimism would fade.  A sharply higher interest rate would make the Won rise.

The Real Estate Problem
The elephant in the room is the fact that the Korean real estate market is in trouble. In Gangnam, the district of Seoul of the most expensive apartments in Seoul, the price of only the most expensive apartments is stable.  Apartments in the USD 1,000,000-3,000,000 range have dropped during the past two years.  Lower real estate prices are especially damaging to Koreans, because Koreans have a larger percentage of their entire net worth invested in their homes.  The number one factor in real estate prices?  Interest rates.  A rate increase by the BOK would only serve to worsen the situation.  In the United States, the US Federal Reserve has fought very, very hard, to keep interest rates lower to slow the rate of price declines of real estate.  It can be argued that this will not end well, but it shows just how important that the US Fed believes that the value of real estate is the US economy.  In Korea, where the percentage of overall wealth spent on real estate ownership is higher than in the US, can the economic logic be much different?  No. 

The BOK Needs To Maintain Its Right to Be Unpredictable
If you knew for sure that the price (of anything) would be higher tomorrow, then the price would be higher today.  You don't need an economics degree in order to understand this.  Interest rates can be defined as the price of money.  So, if the Bank of Korea was entirely predictable in the direction and timing of its interest rate moves, than that, in itself, would be self-defeating.  The BOK needs to have the element of surprise in its decisions.  The reasons?  First, it must maintain its ability to intentionally shock the markets.  Gradual interest rate changes do not accomplish this.  The reason for the need to shock the markets is that the BOK needs to be able to communicate to the domestic and international marketplace that there is an urgent need for interest rate changes.  Second, the BOK needs to be able to move in large increments should conditions warrant.  Why?  The world remains unstable in the fallout of the financial crisis.  The huge amount of governmental stimulus has created imbalances around the world.  That has made different locations (Greece, Ireland, Middle East) subject to wild changes in fortune.  Due its small size, small population, and very dense concentration in profits among a very few industries, the BOK must maintain all its options to the fullest extent possible.  The element of surprise is one of those options.

Opinions
One of the reasons for creating the Seoul Gyopo Guide was to educate those unfamiliar with the Korean economy about Korea.  Along with that, native Koreans themselves must understand how Korea fits within the global market, where capital moves rapidly.  In some ways, Korea is very prepared for that.  Its end products are world-class in many industries.  However, in other ways, Korea has not found the proper balance between openness to capital flows and its pursuit of economic independence.  Complete economic independence is not possible unless Korea annexes larger, more heavily populated countries, which are rich in natural resources, in a peaceful manner.  In other words, it is virtually impossible.  The Bank of Korea is reacting properly to this by maintaining its maximum flexibility.  Criticisms of being a "tool of the administration" may be, in part, true.  However, given Korea's small size and inherent vulnerability, the BOK can accept that misguided criticism in favor of its pursuit of a combination of economic growth and price stability.  Displacements in the Korean economy have a much larger effect than those that occur in larger countries like the US, or regions like the EU.  As a result, applying the same type of logic that works in those areas don't necessarily work for Korea.  Nevertheless, every decision that the Bank of Korea is, by its nature, controversial, and there will be Monday morning quarterbacks giving their opinion after each decision.  Undoubtedly, the Bank of Korea is ready to accept that consequence.

Rare Earths Trade War is a Potential Korean Disaster

Rare Earths Are Important to Korea's Economy
Rare earths are a group of rare elements.  They are used in the manufacturing of technology products including smart phones and earphones.  In the article, this very interesting table was included, which points out the uses of rare earths in the production of products.

United States Usage (2008 data)
Metallurgy & alloys	29%
Electronics	18%
Chemical Catalysts	14%
Phosphors for monitors, television, lighting	12%
Catalytic converters	9%
Glass polishing	6%
Permanent magnets	5%
Petroleum refining	4%
Other	3%

Source: geology.com

If you look at the list, perhaps you will notice electronics, TVs/monitors, and catalytic converters.  Did you ever hear of Samsung Electronics or Hyundai-Kia Motors?  In other words, rare earths are important to some of the most important Korean industries.
Earlier, the Seoul Gyopo Guide pointed out that North Korean-Chinese cooperation on rare earths was a troubling development.   Today, on Bloomberg.com, it was revealed that Australia blocked the Chinese takeover of an Australian company because Australia was concerned over the Chinese gaining further control of rare earths.

Conclusions
This issue will require constant attention.  It is certainly on the radar screen of all of the largest Korean companies.  Korea must secure rare earths sources, and given that China controls approximately 95% of these, it will make the South Korean-Chinese economic relationship more complex than ever.  Already, China is challenging Korea in another important industry, shipbuilding.   
You can easily conclude that a rare earths trade war has already broken out between the U.S. and China.  Korea's economy is not as large nor as diverse as the U.S.', and as such, it must avoid the economic warfare and secure sources of rare earths critical to Korean industries.  Not addressing this issue would be shortsighted at best, and a disaster at worst.

What's a "gyopo" anyways?

For those who are not Korean, "gyopo" is a strange sounding word
Simply put, gyopo is someone of Korean descent that originates outside of Korea.  This LA Times article, written almost exactly a year ago, describes a writer's view of what being a gyopo in Korea is like.  Personally, I found the article very different from my own experiences.  Here is what I found.

Native Koreans Aren't Angry That Gyopos Aren't Fluent in Korean
In the LA Times article, this quote appeared.

Kang said many South Koreans expect gyopo to possess considerable cultural and linguistic competency. As a result, he said, "the number of culture clashes and number of taxi drivers yelling at these kids is legendary."

I never found this to be the case in many years while living in Korea.  Instead, I simply said, in broken Korean, something that translates to "I am sorry but my Korean is not good.  I am an American, and studied Korean."  Most frequently, the answer I received was "Your Korean is good.  (It isn't)"  The notion that taxicab drivers in Korea are more rude than in other nations is a strange one:  Korean cab drivers are the same as any other countries' cab drivers.  Some are nice, some are not.  Uh, that sounds like Korean cab drivers are humans.

Certain Natives Are Jealous Which Looks Like Anger
Native Koreans less confident in themselves may seem condescending to gyopos.  In this respect, the article is quite true.  However, I would suggest that it is really due to the fact that many Koreans, especially Korean ajummas, are particularly sensitive due to the fact that a gyopo has lived outside of Korea, which is where they want to send their children.   I have been talked about (in Korean) by certain people in Korea, who mocked my broken Korean, with comments like "I have a degree from the U.S. also."  Those people are in the minority.

Gyopos Are Unfairly Treated By Hagwons/English Education Providers
Now this, I cannot understand.  The article is correct:  gyopos are disqualified from many English teaching roles.  My post regarding this topic is here.  It merely points out one thing:  Korea still has a long way to go to be a true meritocracy.  While no nation is perfect, this is a societal issue, in my view. 

Why Does Any of This Matter?
Korea is small geographically, and has a relatively small population.  Therein lies the problem.  As many people know, Jewish people around the world influence a great amount of financial capital throughout the world.  One day, I was asked by a Jewish friend of mine, "How many Jews in the world do you think there are?"  Embarrassingly, I believed the number was approximately 50,000,000, similar to the population of South Korea.  WRONG.  At that time, there were 7,000,000.  Do you think that this amount of clout was earned by 7,000,000 people all acting independently?  WRONG AGAIN.  Does this mean that all 7,000,000 are friends?  Most definitely not.
Why would I make a comparison to the Jewish population?  Well, the Jewish population is under constant threat of extinction and has survived many threats throughout history.  Holocaust survivors (yes, there was such a thing) are still living today.  Jews have been subjected to prison based on race, and lived through war. Does this sound like any other group of people?  You bet:  Koreans.
Of course, there is competition among individuals.  That is natural.  However, the fact that there is this stigma of being a gyopo, and that it would potentially prevent cooperation amongst a people that are already small in population, is another example of how Korea still hasn't reached its full capacity.

Conclusions
The debate about the quality of a gyopo's life in Korea isn't going to end anytime soon.  For each anecdote, there will be another, contradictory one.  To stereotype however, is dangerous, and limits Korea's progress. Surprisingly, I get asked the question "What is it like to be a gyopo in Korea?"  If you look on the internet, you will find that same question.  That it is an issue should tell readers that some gyopos have felt unfairly treated.  Even though I have not felt, overall, that this is the case. Unfortunately, it is clear that some gyopos have.

영어 Slang of the Day #16: "This just in:" Is it really news?

"This just in:" What does that supposed to mean?

If you watch a news broadcast in America, the broadcaster may use the phrase, "This just in" when there is new, or "breaking" news.  However, these days, the phrase "This just in" is used when someone knowingly is repeating something that is already well-known.

It is used differently than the phrase "command of the obvious."  The phrase "This just in" is used at the beginning of a spoken or written sentence and is not meant as an insult.

Examples:
1.  This just in:  Rain (비) is a popular singer.
2.  This just in:  Lebron James is good at basketball.

Notes:  
1.  After the phrase "this just in," the phrase is usually understated.  In the examples above, Rain is more than just "popular."  In fact, you may state that he is VERY popular.  In addition, Lebron James is more than just "good at basketball."  He may be the best in the world.
2.  The phrase "this just in" is relatively new, and while there is nothing wrong with its use, it is generally not used in formal settings.  In addition, it is a phrase which is somewhat sarcastic, and should be said to an audience that will understand sarcasm.

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영어 Hint of the Day #1: What is an "Ugly American?" (Update 1)

Only in America, does someone get her own National Anthem WRONG

Last night, in front of 111,000,000 fellow Americans, Christina Aguilera sang the wrong words to the Star Spangled Banner, the national anthem of the U.S.A.  Now THAT is UGLY (and I am a fan).

Another example of why there exists a phrase called an "ugly American."
Question:  Do you think that Rain knows the words to the Korean national anthem?  My guess is YES.

Note:  The original post of "What is an 'ugly American'" is here.

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