Crash, Return, and Negotiations
On the morning of August 3, the KOSPI opened with a 3.6% decline and widened its loss to as much as 4.5% during the morning session. Samsung Electronics and SK Hynix each crashed by about 7%. The market, which had already plunged 5.98% at the end of last week, collapsed again on Monday. The Korean won is being defended by joint intervention by South Korea, the US, and Japan, and the yen is the same. Monetary authorities diagnose that the market is "not functioning normally," but in fact, the market is functioning all too precisely. The structural vulnerabilities of the Korean stock market — AI semiconductor concentration, reliance on foreign capital, and the amplification effect of single-stock leveraged ETFs — have exploded all at once.
In the midst of this, President Lee Jae-myung returned home after an 11-day, 7-night tour of the United States and South America. According to reports, he went straight to Cheongwadae upon his return and presided over a closed-door review meeting on the real estate and stock markets. He touted large-scale business agreements with big tech and strengthened resource cooperation with South America as achievements of the tour, but what he faced on the day of his return was a stock market that had crashed throughout his entire trip and a jittery real estate market. Skipping his summer vacation and immediately returning to work was not a choice but a compulsion. For the president of a comprador-monopoly capitalist country, the dazzling achievements of an overseas tour become scraps of paper before the judgment of the domestic market. The structure in which the national economy collapses when chaebol semiconductor stocks collapse was merely waiting for him.
Internationally, the imperialist theater of Trump canceling airstrikes on Iran and beginning negotiations is continuing. According to reports, US-Iran negotiations begin on August 3. The agenda is the reopening of the Strait of Hormuz and the denuclearization of Iran. Simultaneously with the announcement of the cancellation of airstrikes, 10 US Air Force aerial refueling aircraft are being additionally deployed to Israel, and there are observations that Brent crude plunged more than 6% in a single day, falling to the $80-per-barrel level. This is the standard grammar of imperialist diplomacy. On the negotiation table lies a document called peace, and beneath the table bombers wait. The plunge in oil prices is not market optimism about the negotiations but a confirmation of the structural fact that oversupply continues even amid a six-month-long war. OPEC+ production increases, record UAE output, and price responses from non-OPEC producers — supply is expanding while ignoring the war.
The crash of the Korean market and the Iran negotiations are not separate events. Both reveal the instability of the imperialist order. The Korean stock market is a terminal directly exposed to the imperialist contradictions of US-China AI hegemony competition and semiconductor supply chain reorganization, while the Iran negotiations are an administrative act by imperialist headquarters attempting to temporarily suture the military contradictions in the Middle East. The difference between the two is only the intensity of the contradictions and the method of management; they are different symptoms of the same world system.
In the midst of this, President Lee Jae-myung returned home after an 11-day, 7-night tour of the United States and South America. According to reports, he went straight to Cheongwadae upon his return and presided over a closed-door review meeting on the real estate and stock markets. He touted large-scale business agreements with big tech and strengthened resource cooperation with South America as achievements of the tour, but what he faced on the day of his return was a stock market that had crashed throughout his entire trip and a jittery real estate market. Skipping his summer vacation and immediately returning to work was not a choice but a compulsion. For the president of a comprador-monopoly capitalist country, the dazzling achievements of an overseas tour become scraps of paper before the judgment of the domestic market. The structure in which the national economy collapses when chaebol semiconductor stocks collapse was merely waiting for him.
Internationally, the imperialist theater of Trump canceling airstrikes on Iran and beginning negotiations is continuing. According to reports, US-Iran negotiations begin on August 3. The agenda is the reopening of the Strait of Hormuz and the denuclearization of Iran. Simultaneously with the announcement of the cancellation of airstrikes, 10 US Air Force aerial refueling aircraft are being additionally deployed to Israel, and there are observations that Brent crude plunged more than 6% in a single day, falling to the $80-per-barrel level. This is the standard grammar of imperialist diplomacy. On the negotiation table lies a document called peace, and beneath the table bombers wait. The plunge in oil prices is not market optimism about the negotiations but a confirmation of the structural fact that oversupply continues even amid a six-month-long war. OPEC+ production increases, record UAE output, and price responses from non-OPEC producers — supply is expanding while ignoring the war.
The crash of the Korean market and the Iran negotiations are not separate events. Both reveal the instability of the imperialist order. The Korean stock market is a terminal directly exposed to the imperialist contradictions of US-China AI hegemony competition and semiconductor supply chain reorganization, while the Iran negotiations are an administrative act by imperialist headquarters attempting to temporarily suture the military contradictions in the Middle East. The difference between the two is only the intensity of the contradictions and the method of management; they are different symptoms of the same world system.