Korean Job Discussion Forums

[Cthulhu]

I've heard about falling won jitters from foreigners, as well as some of my students mentioning "another IMF" possibly coming, and was wondering if anyone has anything concrete on the state of Korea's ecomony/currency. The won seems to have gone as high as the government will allow, and a drop (which seems to have begun) is more dillicult to contain than a rise.

I tend to take info from the English language dailies with a grain of salt, since the business sections seem truncated. I've tried finding info from on-line Asian business mags but haven't seen much (Japan still gets all the attention) but if anyone has heard or seen anything written by a knowledgable source I'd like to hear about it.

I worry more about a dive in the won that from anything brother Kim in the North is up to these days. Having a fair chunk of change put into an apartment (as junsae) doesn't help if it drops suddenly. Anyone have any reliable information?

[Tobacco Fiend]

As one of my colleagues said to me the other day, "There's no coward like capital." Investors will run like the dickens from what they see as an unsafe place to park their cash.

For current, up-to-the-minute exchange rates, go to this site: http://www.xe.com/ucc

Yes, the won is falling. It's falling against the US dollar, which, in turn, is falling catastrophically against the Euro.

Moody's downgraded SK's financial outlook the other day from "positive" to "negative." The impact on the currency markets was immediate. Commentators cited the looming uncertainty of the security situation in the region as reason for the downgrade.

The silver lining to this particular cloud, in my view anyway, is that Koreans may be shocked out of their pathetic little bubble into recognizing that the rest of the world DOES take North Korean threats seriously. We've all encountered these clueless Korean bozos who say "North Korean threatening to nuke everyone--so what??? They're just having a laugh!"

Guess again, kimchee brain. This is hurting your precious little pocketbooks. GET IT?

Tobacco Fiend

PS: Dear Dave Sperling, Why will you not allow me to say "Charles D-i-c-k-e-n-s"? When I previewed this post just now, the phrase "run like the [immortal novelist who we know to have run oh so fast]" appeared as "run like the *beep*."

Why, pray Heaven, why?

[Cthulhu]

Thanks for the info. I noticed the Moody's assessment too, and though it should be expected by anyone, Koreans seem to associate the economic downturn with unemployment more than with North Korea's threats hurting investment.

p.s.--I believe the bleeping of Mr. D.'s name in your post is part an automatic thing done by the board itself rather than the moderators. Though I wonder if the settings can be changed...

[Ralph]

Yes it is falling, but really if you look at it, it is still pretty strong against the dollar in terms of its value over the last year. It looks to me like a normal fluctuation. Its down against the Euro however. Its value now is about the same value as it had around october 14-15, which is the lowest it has been over the past year. Here though I dont see any sudden spikes or sharp drop offs in value that would suggest a crash is imminent.

[Captain Obvious 2.0]

[Tobacco Fiend]

[scot47]

Tell your employer you want paid in gold bullion !

[Tobacco Fiend]

[Manner of Speaking]

When I read in the JoongAng Ilbo that Moody's had downgraded Korea's financial outlook, I couldn't help but notice that their reasons for doing so were fundamentally political (i.e., the North Korean crisis), not economic. The downgrade came as a surprise partly because only a week earlier an important analyst -- I don't recall which organization he worked for -- publically commented on the soundness of the Korean economy. Maybe I am being a bit naive, but IF the political/military crisis in the region works itself out... ** whistling in the dark ** everything else will be okay...consumer credit card debt notwithstanding.

[Captain Obvious 2.0]

[4 months left]

Could fall more, the trade surplus fell to its lowest level in a long time in Jan. Korea is very dependent on the US economy which is on hold at the moment. I forsee a Japan like downturn to their economy. Factories are having to locate to other countries because they can't find domestic workers and the Korean limits the amount of foreign workers. This is due to the "over-educated" workforce. The people with degrees who drank and computer gamed their way through Univ don't want to take a job in a factory and think they deserve a cushy desk job just because they paid for their degree.

[phil]

gotta agree with the captain on this one....
but only short run cap. since your an economics major, i'm sure you know that as well... machine tools baby, all imported. still, i think all the big companies have their fingers crossed for some devaluation.

[richinkorea]

I'll play devils advocate with you CO.

The government controls the won in both directions my friend.

You are right about the consumer market in Korea not importing much, but the industrial base of Korea does. Everything from raw materials to tooling to high tech equipment and software.

A large drop in the won affects these guys who in turn produce products for export.

BOK - Blind From Kimchee ?????

[phil]

luckily, raw materials are bought on contract months ahead and hedged to boot.

and no govt with a floating exchange can fully control the rate. despite having the fourth largest forex reserves in the world, it'd be an incredibly expensive and ultimately futile expense to fight the trends of hot money. speculators can read govt purchases so easily and make a killing when the govt eventually loses.

[4 months left]