In the last week of July, we take a look at the people at the center of the week’s news. From the head of the financial authorities who made an official apology after the stock market faltered significantly after the introduction of the single-stock leveraged exchange-traded fund, to Korean politicians who threaten the mainstream of the Democratic Party in the U.S. and the world’s richest people who once became mankind’s first “tough man” and lost half of their assets in more than a month. Let’s take a look at this week’s main scenes through people who are at the center of controversy and change.
“Samjeonics Loss of Leverage”…Heads of Financial Services Department Bows
Financial Services Commission Chairman Lee billion won officially apologized for the significant increase in stock market volatility since the introduction of single-stock leverage ETFs. With side cars and circuit breakers activated in the KOSPI and KOSDAQ markets for two consecutive days, he bowed his head as the financial authorities intensified their responsibility.
Chairman Lee said in a report to the National Assembly’s political affairs committee on the 29th of last month, “I am sorry for the failure to live up to the public’s trust properly.”
A single-stock leveraged product is a high-risk product designed to follow the daily fluctuation rate of a particular stock. You can maximize your profits when your stock price goes up, but when it goes down, your losses also grow quickly. In particular, concerns have been raised that a sharp drop in stock prices in stocks that attract investors could lead to a flood of mechanical selling, further increasing market volatility.
Responding to criticism that the situation was a “talent” caused by the Financial Services Commission and the Financial Supervisory Service, Lee said, “I take the greatly expanded volatility of the market very seriously.” “As the final head of the financial market, the responsibility is also heavy,” he said, adding that he will boldly pursue additional supplementary measures.
Lee Chan-jin, head of the Financial Supervisory Service, also said, “I am sorry,” and added, “We will do our best to minimize volatility.” However, as to whether the Financial Supervisory Service officially opposed the introduction of single-stock leverage, he said, “I have never said it officially,” explaining that the policy was decided after consultation with related ministries.
The KOSPI closed at 5663.24, down 5.98% from the previous trading day, when the heads of financial authorities apologized at the same time. The KOSDAQ also fell 6.12 percent. Selling sidecars and circuit breakers were activated in both markets for the second day in a row.
In the National Assembly, additional measures were also proposed to strengthen investor protection. They include increasing deposits that investors have to leave, lowering leverage ratios depending on market conditions, or limiting new purchases to professional investors.
Yonhap News
“I’m a wage worker and tenant” …Francesca Hong rocking the mainstream of the U.S. Democratic Party
In Wisconsin, a representative contending state in the Midwest, a Korean-American democratic socialist candidate is making a splash. The main character is Wisconsin Representative Francesca Hong. My Korean name is Hong Yoon-jung, and I am 37 years old this year.
Hong is leading in recent polls with a 26% approval rating ahead of the Democratic gubernatorial primary on August 11. However, it is too early to predict the final outcome as more than 40% of respondents have not yet decided on a candidate to support.
Hong, the second-generation Korean-American, was elected as the first Asian state representative in Wisconsin’s history in 2020. I’ve been running a restaurant for the past seven years, but I’ve had financial difficulties after closing down due to labor costs and rising prices. I’m still working as a bartender periodically.
He introduces himself as “the only wage worker among the candidates in this race, a daughter of a Korean immigrant family, a single mother, and a tenant.” It is not a professional politician or elite, but a worker in the living field.
The pledge is unconventional. It insists on free childcare and public grocery store operations, full cancellation of college student loans, state-level health insurance integration, a 32-hour workweek, and the establishment of a state development bank. In order to raise funds, we proposed the abolition of tax increases for the wealthy and corporate tax credits.
I also support the abolition of the U.S. Immigration and Customs Enforcement, the restoration of criminal voting rights, and the long-term reduction of police and prisons. With President Donald Trump and the Republican Party attacking democratic socialists as “communists,” Hong’s clear policies are drawing national attention.
The Democratic leadership’s eyes are complicated. This is due to concerns that candidate Hong may be supported by hard-line progressive voters in the primary election, but may be less competitive in the main election, where the votes of the middle class are important.
Wisconsin is also a representative contender in the 2024 presidential election. If Hong is elected as the Democratic nominee, he will likely face Republican Congressman Tom Tiffany.
David Axelrod, a former aide to former U.S. President Barack Obama, likened the Wisconsin Democratic primary to a “car running slowly toward the cliff.” The former chairman of the Wisconsin Democratic Party also called Hong “an extreme left-wing candidate who can work in the primaries but is difficult in the main election.”
Rather, the Republican Party is expected to spend a large amount of money on advertising to raise Hong’s profile. Analysts say they are trying to float Hong from the Democratic Party’s primary stage, judging that he is an easy candidate to deal with in the general election.
Hong dismissed concerns within the party. “Voters want bold solutions that will reduce the cost burden on the working class and disperse money and control concentrated in the privileged class,” he argued.
“I’ve become a former Cho Man-jaer”…Musk halved in assets in a month
Tesla Inc TSLA and SpaceX CEO Elon Musk has stepped down from his once-human first-ever “tribalist” position. Shares of SpaceX and Tesla plunged at the same time, halving their assets in more than a month.
According to Forbes, a U.S. business magazine, Musk’s assets were 695.7 billion dollars as of the 27th of last month, and about 1,019 trillion won in our money. It’s still astronomical, but less than half the $1.45 trillion peak it hit on June 16.
It is the first time in about seven months that Musk’s assets have fallen below $700 billion since December last year. He recently posted a self-help post on his social media X that he owns: “Former Joe Manjaer.”
The biggest reason for the decline in assets is the plunge in SpaceX shares. SpaceX shares fell to $108.66 per share during the intraday session on the 27th of last month, their lowest level since going public. It’s about 20% below its offering price of $135, and down 52% from its intraday high of $225.64 in June.
Some problems in the test flight of the super-large space launch vehicle Starship were bad news. During the 13th test flight on the 24th of last month, a first-stage Super Heavy booster fell strongly into the sea after having difficulty reigniting the engine.
It is predicted that the first earnings announcement since listing and the lifting of protection of insider-held stocks could also weigh on stock prices. Investors were also concerned that SpaceX is currently skewed towards satellite communications service Starlink, although it presents huge future businesses such as Mars colonies and space data centers.
Tesla’s slump also fueled Musk’s decline in assets. Tesla shares plunged 15% after the company reported second-quarter earnings and continued their downward trend since then. Compared to the beginning of the year, it is down about 30%, returning virtually all of the gains over the past year.
Tesla’s vehicle sales rose, but net profit fell 5% from a year earlier to $1.114 billion due to lower prices and higher operating costs. It fell far short of the market forecast of $1.3 billion. Deutsche Bank also lowered Tesla’s price target from $465 to $420.
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