Korea ( South & North ) 01 (May 08 - Nov 10)

[millionairemind]

Now's the time to get that Korean star look

Economy Blunts Korea’s Appetite for Plastic Surgery

By MARTIN FACKLER
Published: January 1, 2009

SEOUL — A grim frugality has settled over this export powerhouse that once burst with optimism — and silicone.

Park Hyun, a plastic surgeon, offering guidance to a patient at his clinic in Seoul. Fewer people are getting facelifts.

A counselor on the phone with a patient at Park Hyun Plastic Surgery Clinic in Seoul.

Cosmetic surgery took off here after South Korea’s spectacular recovery from its currency crisis a decade ago. Rising living standards allowed ever-growing numbers of men and women to get the wider eyes, whiter skin and higher nose bridges that define beauty for many here. Improved looks were even seen as providing an edge in this high-pressure society’s intense competition for jobs, education and marriage partners.

But turmoil coursing through the financial world and then into the global economy has hit South Korea hard, as it has many middle-income countries. The downturn drove down the stock market and the currency by a third or more last year, and the resulting anxiety forced many South Koreans to change their habits.

A particular chill has seeped into the plastic surgery industry, emptying waiting rooms and driving clinics out of business.

[winston]

Do you know that the parents start having a Plastic Surgery Fund as soon as the daughter is born ? They save for plastic surgery like some of us save in an Education Fund. I did not believe how widespread it is when I first heard about it.

[millionairemind]

Do you know that the parents start having a Plastic Surgery Fund as soon as the daughter is born ? They save for plastic surgery like some of us save in an Education Fund. I did not believe how widespread it is when I first heard about it.

W - This is interesting news. First time I have heard of it... I wonder is it because they expect their daughters to conform to a "certain standard"? I don't really think that there is anything wrong with plastic surgery, if it helps to improve their confidence. I do remember that korean women spend alot of time dolling up and their makeup is flawless and pretty.

[kennynah]

i believe almost everything is acceptable if done in moderation...including plastic surgery... difficult to quantify what is "moderate" amount...
by the way...i dont condone to drug abuse, even in moderation...this is one clear exception to the "everything in moderation" rule.

[millionairemind]

South Korea cuts interest rate to record low
By Chris Oliver, MarketWatch
Last update: 12:41 a.m. EST Jan. 9, 2009
Comments: 48

HONG KONG (MarketWatch) -- The Bank of Korea slashed interest rates by half a percentage point Friday, bringing its key rate to record low 2.5% in an effort to prop up an economy suffering from a collapse in exports.
The rate cut adds to the four other reductions in the past three months, bringing the cumulative easing since October by the central bank to 275 basis points.
The rate cut was widely expected and inline with analysts polled by Dow Jones Newswires.
"The local economy is slowing very rapidly as export growth and domestic demand continues to decline," the central bank said in a statement Friday.
The central bank warned of more slowing in the months ahead as the U.S. and euro zone economies fall further into recession.
The rate cut follows data showing South Korean exports contracted 17.4% in December from a year earlier. Industrial production also was weaker in November, marking it fifth straight month of deceleration.

[winston]

This Developed Country Is Trading at Emerging-Market Prices By Tom Dyson

I jumped in the taxi and told the driver to take me to my hotel. He waved at me and told me to be patient. He was watching television.

The flat-screen TV was on the passenger side of his cab, near the glove compartment. The Olympics was on. He was watching a ping-pong game. I sat back and watched the final points with him. The South Korean team won. He clapped his hands in celebration and then pulled away from the curb...

South Korea is the most "wired" country in the world. It has Internet on trains, on buses, and in taxis. It's always free. Hotels put computers in every room. And 93% of South Korean households receive broadband... the highest penetration in the world. I visited South Korea this summer. I saw people watching the Olympics on their cell phones.

Infrastructure in South Korea is excellent. The trains and buses run so frequently, you never have to wait. The roads are smooth and fast. Buildings are modern. The streets are clean.

South Korea is already the world leader in semiconductors, digital displays, and consumer electronics. Now it wants to rule the robotics industry. I took a tour of a massive planned city near Seoul. It's the largest continuous real estate development in the world. Robot Land is one of the large "neighborhoods" the developers are building in this city. They want to entice robotics factories to locate there.

South Korea is a developed country. Thirty years ago, South Korea was poor. Newsletter writer Marc Faber tells the story of his early career in Asia in the most recent issue of the Gloom Boom & Doom Report. South Korea was one of his first investments. "In the 1970s, South Korea was still ruled by the military and was extremely poor. Curfews were in place and there were no foreign investors."

South Korea's economy has come a long way since the 1970s. The average South Korean has more wealth, freedom, and education. But what about South Korea's stock market? The South Korean headline stock index is called the KOSPI. The KOSPI was at 1,000 in April 1989. It was still at 1,000 in November 2008... before falling below 900.

I prefer to look at long-term charts that have been adjusted for inflation. When you adjust for inflation, you strip out the general rise in prices and see the true returns attributable to the stock market. When you adjust South Korea's stock market for inflation, you see that an investor who bought stocks in the 1970s still hasn't made a penny of return today.

It's the same way with Japan and Taiwan. Taiwan's stock market recently touched 1987 levels. And Japan's stock market recently touched 1981 levels. These countries are all far richer, more developed, and more sophisticated... But their stock markets haven't made any money for investors in over 30 years.

I don't like most mainstream U.S. stock market investments. They don't pay big enough dividend yields. And with all the regulation and government intervention, America's productivity will decline. The "Obama rally" could last a year or more, but sooner or later, we're going to break 800 on the S&P again.

If I had to invest in stocks, I'd buy Taiwan and South Korean stocks. Their economies may be in recession and they may depend on the rest of the world to buy their technology, but at least their stock markets are wickedly cheap.

What Happens When There's No One Left to Sell...

The South Korean stock market sells for 11 times earnings and trades at a discount to book value. The Taiwan stock market sells for nine times earnings and trades for only 1.3 times book. Plus, the Korean won has depreciated by 35% in the last six months and the Taiwan dollar by 10%... so American investors get an even better deal.

I particularly like Taiwan stocks. They pay an 8% dividend yield, and all the top Taiwanese companies have billions in cash and no net debt. The next bull market in Asian stocks may take a few years to materialize, but at least you'll be paid while you wait...

The easiest way to invest in South Korea and Taiwan is through the exchange-traded funds (ETFs). The South Korea Index ETF symbol is EWY. The Taiwan Index ETF symbol is EWT.

[millionairemind]

Published January 23, 2009

S Korea's economy shrinks 5.6%

(SEOUL) South Korea's economy shrank a larger-than-expected 5.6 per cent last quarter, the biggest decline since the Asian financial crisis a decade ago as exports tumbled and consumer spending fell.
Growing poor: Low-income South Koreans having a free lunch offered by a college in Busan

The contraction followed growth of 0.5 per cent in the third quarter and was more than twice as much the 2.1 per cent decline forecast in a Bloomberg News survey of 10 economists. The economy shrank 3.4 per cent from a year earlier, the central bank said in Seoul yesterday.

Signs of looming recession add pressure on President Lee Myung Bak to expand his 51 trillion won (S$55.33 billion) stimulus programme and on the central bank to further cut interest rates, already at a record low. Mr Lee, whose popularity has declined by more than half since he took office early in 2008, this week replaced four top members of his economic team as he works to revive confidence and combat the deepest slump since 1998.

'The economy is cooling at an alarming rate,' said Chun Chong Woo, an economist at Standard Chartered First Bank Korea Ltd in Seoul. 'The question is how much policy makers can cushion the economy from the global shocks.'

The 10-year expansion has floundered as China's slowdown exacerbates a plunge in European and US demand for Korean-made cars, electronics, ships and semiconductors Goods exports tumbled 11.9 per cent last quarter from the previous three months, the biggest decline since 1979, yesterday's report showed. Overseas shipments are equivalent to about 50 per cent of gross domestic product. 'The region's high vulnerability to the ongoing external-demand shock calls for further decisive policy action,' Michael Buchanan and Eva Yi, economists at Goldman Sachs Group Inc, wrote in a report. 'Korea is in a recession and further contraction is likely ahead.'

To revive the economy, South Korea has allocated about 140 trillion won, or 15 per cent of GDP, in extra liquidity, tax cuts and stimulus spending. The central bank this month cut its key interest rate to a record low of 2.5 per cent, the fifth reduction since October.

Domestic demand, which includes private and corporate spending, dropped 5 per cent. Construction investment fell 4 per cent, while investment on factories plunged 16.1 per cent. Household spending declined 4.8 per cent. Corporate bankruptcies climbed to their highest level in almost four years in December, according to central bank figures.

Ssangyong Motor Co, 51 per cent owned by China's SAIC Motor Corp, applied for bankruptcy protection on Jan 9. Korean consumers, struggling with record debt and rising unemployment, are losing confidence and curtailing spending as the economy falters. Falling stock and property prices have weighed on spending as they reduce the wealth of households. - Bloomberg

[winston]

Kim Jong-il says wants denuclearization of peninsula

Kim meets Chinese dignitary: report
By Lucy Hornby and Jack Kim

BEIJING/SEOUL (Reuters) - North Korea is committed to removing nuclear weapons from the Korean peninsula and wants to co-exist peacefully, leader Kim Jong-il said on Friday in his first meeting with a foreign envoy since his suspected stroke in August.

China's state Xinhua news agency said Kim made the comments during a visit to Pyongyang by a senior Chinese official.

Analysts have said a meeting with a foreign visitor would offer evidence that Kim, who U.S. and South Korean officials said fell seriously ill in August, was well enough to run Asia's only communist dynasty and make decisions about its nuclear program.

"The North Korean side will commit itself to the denuclearization of the North Korean peninsula, and hopes to co-exist peacefully with other involved parties," Xinhua news agency quoted Kim as saying.

"North Korea is not willing to see tensions emerge in the peninsula, and is willing to strengthen consultation and cooperation with China to push forward the six-party talks," Kim added, referring to multilateral talks aimed at having destitute North Korea scrap its nuclear programme in return for aid.

Xinhua and the North's KCNA news agency said Kim met Wang Jiarui, visiting head of the Chinese Communist Party's International Department, on Friday.

It is rare for Kim to be quoted directly

His comments came after the North hinted in a New Year's message that it was willing to work with new U.S. President Barack Obama by saying it wanted good relations with countries that treated it in an amicable manner.

The North, which has dragged its heels in the six-way talks, has also said it can scrap nuclear weapons when it feels Washington has dropped its "hostile policy" toward it.

North Korea has "weaponised" enough declared plutonium stocks to produce four to five nuclear weapons, a U.S. expert said last week after returning from talks with officials in Pyongyang.

TOUGH RHETORIC ALSO

Kim's reported comments -- which were not carried by North Korean media -- were a sharp contrast to the tough rhetoric its state media has fired off at South Korea and its president, who has taken a tough line toward Pyongyang.

South Korea last weekend placed its military -- backed by some 28,000 U.S. troops in the South -- after Pyongyang said it would wipe out its neighbor and warned of possible conflict in disputed waters off the peninsula's west coast, which has been the scene of deadly naval conflicts.

Xinhua said Kim also "warmly accepted" an invitation to visit China, the North's biggest benefactor, that was proffered in a letter from Chinese President Hu Jintao on the occasion of the Lunar New Year.

North Korea's state KRT television showed 15 still pictures of Wang and Kim, whose trademark paunch looked smaller than a year ago, sitting down for discussions and sharing a toast at a luncheon. Kim's left hand appeared severely swollen in photographs carried on Xinhua.

The last high-profile reception given by Kim was in June when Chinese Vice President Xi Jinping visited Pyongyang, South Korea's Unification Ministry said.

North Korea's state media have issued numerous reports in recent months saying Kim has visited army units, factories and farms. But there has been no proof of when the visits took place.

In undated photos released by North Korea, Kim has been swaddled in padded coats, ski gloves and dark sunglasses. The North has not released video of Kim since the suspected illness leading to speculation in the South that he may still show the lingering effects of the stroke.

Analysts said the meeting with Wang was part of efforts to highlight Kim's firm grip on power as the state heads into a March 8 election of its rubber stamp parliament when he is expected to be reaffirmed as its supreme military leader.

"That's a major public event he must attend," said Cho Min of the Korea Institute for National Unification, an expert on the inner workings of Pyongyang. "These things are coming because the North is confident about his health."

Kim has been conspicuously absent from major events in the past several months that he has attended before.

[kennynah]

it could be a very wise and smart move on part of North Korea to de-nuclearize... giving lesser reasons for South Korea to continue supporting a US military presence...

i find it humiliating to have a foreign force on one's soil, to give it protection... besides, a US presence in south korea/philippines/japan is a threat to all of Asia

[winston]

On Wednesday morning, I saw that Korea was up 6% but the Lyxor Korea Fund was up only 2%, from 2.19 to 2.24. I hesitated. Thereafter, Lyxor Korea Fund jumped to 2.28 and it was 2.32 yesterday.

AAR:-
1) Why did I hesitate ? Is it because that I dont know Korea that well ?
2) Or was I concerned about their exports? However, I'm not a long term investor so I could have easily made 4% before getting out. Nothing has changed in that two days.
3) Or was it "kiasu" where I always want to buy at the bottom ?
4) Or was it because that I have made some very wrong bets in the past and am now afraid to bet eventhough it was quite a sure thing ?