South Korean Financial Blogger Faces 18 Months of Prison 177
eldavojohn writes "A South Korean blogger named Park Dae-sung has been arrested and charged with destabilizing foreign markets by blogging about declining companies. This is the same blogger who predicted the economic downturn that has been experienced the world over. The Korean Times offers more information on the community college graduate and the accusations levied against him."
Several readers have also sent in news that Omidreza Mirsayafi, an Iranian blogger arrested and imprisoned for his writings earlier this year, has now died in custody.
Yay, we have a culprit! (Score:5, Interesting)
It's not managers driving their companies to the ground, it's not politics failing to watch over the markets. It's a blogger that warned people about it.
Glad we found someone nobody misses when he disappears. Though, personally, I'd have missed a few managers and politicians less.
Re:News from the future (Score:5, Interesting)
OK he hasn't been threatened with prison, but its clear from incidents like this the world over that those that run the economy and especially the stock market traders actually have no idea what they are doing. For example the same man can apparently cause bank shares to fall [dailymail.co.uk] just with his morning report on BBC news.
Yes, you can make the economy plunge ... (Score:5, Interesting)
Anyone remember the UA debacle [domain-b.com] last September? If the markets are sufficiently hysterical, you can make them plunge with a single headline, regardless whether it's correct or not. The wrong reporting about UA was corrected immediately, yet it sent the markets into a nose dive from which they haven't recovered yet. Regardless of whether the blogger is correct with his statements or not, I would call the reaction of the south korean gov't alarming and telling of the economic troubles soon to emerge there.
So what this incident with the south korean blogger tells me:
Re:South Korea is a tribal democracy (Score:4, Interesting)
the above statement is clearly unqualified. and no, i am not a korean nationalist.
i would agree that the korean justice system is not as established as it is in the united states. however, to simply state that it's "reason" is emotional response cannot be substantiated in ANY way whatsoever. no justice system can operate on such a weak foundation.
furthermore, simply using a western paradigm to judge an eastern paradigm is also simply wrong.
in all seriousness, though, a statement this ignorant and misleading in most context might even make me believe that this is trolling at its worst. but i think the parent is serious about this though.
Re:Believe It. (Score:5, Interesting)
I don't know what planet you anti-government/free market extremist types live on
I live on the planet UK. Here on planet UK our central bank has been measuring inflation based on CPI [wikipedia.org], and using this to set interest rates. This index excludes housing costs, unlike the previous RPI, in an era where house prices were the major inflationary pressure. In addition, though RPI has historically been about 1% higher than CPI, Gordon Brown reduced the target by 0.5%, giving more room for inflation.
Your claim that corporate loan rates are at fault doesn't stack up; low interest rate loans from the Bank of England kept the cost of corporate lending low, and market forces kept price for corporate lending low. Effectively the BoE applied a price ceiling to the wholesale money markets.
I remember years of being told we had only 2% inflation when the inflation we experienced was closer to 5%. Now we have a situation where the BoE has been forced to print money because the banks have so much of their capital tied up in inflated assets that nobody now wants to touch with a barge-pole. The LIBOR has decoupled from the BoE base rate because the BoE is simply not able to provide enough capital to service existing bank debts, let alone allow them to start loaning on more favourable terms.*
All the while we're being told that it's ok to print money because RPI is currently zero, even though CPI is still above target.
Finally, a warning for UK /.ers. Deflation is a myth! CPI will stay high, partly caused by the fall in the pound. If it does, Mr. King will have to raise interest rates, which will cause RPI to shoot through the roof, as the previously negative housing component turns positive. If you don't believe me, look at what the central bankers themselves think [order-order.com] when they're forced to put their own money at risk.
Actually, one more thing. This diatribe could be taken to be a criticism of the Bank of England. I think that the Bank and its staff have behaved with decency and competence. The criticisms I make are general criticisms of a central bank model, which may still be a least-bad one, and a criticism of the brief they were given.
*The LIBOR also contains banks' mutual assessment of their reliability i.e. a risk premium. This is enlightening to see.
Re:News from the future (Score:3, Interesting)
As much I as I do like Free Speech. And I really do, there is one thing that is happening to the blogging world that does need control.
Slander!
Yes Slander! I see it all too often in the financial blogging world (I work there) where people will say things without having any evidence.
Here is what he supposedly said:
The 31-year-old blogger's crime: falsely reporting that South Korea had barred banks from purchasing U.S. currency. The authorities said the blogger, Park Dae-sung, will find out his sentence on April 20 for posting the inaccurate story that prosecutors said undermined the county's credibility
That piece of inaccurate blogging is slander! He said something without having proof, and I for one think he should go to jail.
The blogging world is a good world, but bloggers should think hard before posting things like, "oh the DOW will reach 3000" There are people who actually believe this crap.
I could just as easily say the DOW will reach 20 gazillion, but it is a false statement and should not be said.
I hope more bloggers become more careful about what they say. And if bloggers are silenced for posting the truth then I for one will be the first in line to defend the truth...
Re:Believe It. (Score:3, Interesting)
20 years? How quaint.
This is nowhere NEAR the first time the government has created policies which created a property boom supported by easy credit.
The government spent too much money in 1812, expanding the money supply and artificially making credit easy to get. European governments artificially induced a state where US food producers were doing very good by fighting the Napoleonic wars and destroying a lot of food production capacity, which created a speculative bubble in US farming. When the bubble collapsed, a huge number of people couldn't pay their debts back, causing a defaults, bank closures, and a recession.
In 1837, the government began forcing people to pay for government land with gold or silver. Andrew Jackson had eliminated the central bank during his presidency, with the intent of removing cheap debt from the economy. The banks responded by printing paper currency, which meant debt was artificially easy to get(Why was this legal?). The restriction on buying government land drove up land prices, which led to a speculative bubble in which people took out paper debt to buy gold or silver. When the bubble collapsed, a huge number of people couldn't pay their debts back, causing a defaults, bank closures, and a recession.
In 1857, the California gold rush caused a huge influx of gold into the economy. This had two effects: First, a speculative bubble in railroads, and second, easy access to credit. When the bubble collapsed, a huge number of people couldn't pay their debts back, causing a defaults, bank closures, and a recession.
In 1873, following the end of the civil war, a huge number of people were released from military service, and the money supply was massively increased by federal spending. This created a speculative bubble in railway industries, and provided easy access to credit. When the bubble collapsed, a huge number of people couldn't pay their debts back, causing a defaults, bank closures, and a recession.
In 1893, the Sherman Silver Purchase act remonetized silver, causing inflation which led to an easy supply of credit. Unlike other recessions, this one was caused by massive protective tarrifs of the McKinley tarrif act, which instead of causing an artificial bubble, instead collapsed the value of healthy markets by forcing a heavy tax burden on manufacturers and farms who relied on imported parts.
In 1907, J. P. Morgan stopped a recession from happening by providing capital during a period that saw many central banks around the world, which led to the creation of the New York federal reserve bank.
European governments once again destroyed their agricultural output with the onset of World War I. Further, the creation of the New York federal reserve bank made credit easily available by eliminating the risk of bank runs. The Homesteader's act was altered to allow land that couldn't be irrigated to be sold. The combination of Europe's war and America's deregulation created a massive speculative bubble, which was supported by a few unusually wet seasons. The unusually wet seasons ended causing a collapse of the speculative market, one of the worst environmental catastrophes of American history. When the bubble collapsed, a huge number of people couldn't pay their debts back AND suddenly had farms they couldn't even farm on, causing a defaults, bank closures, and a recession.
The Y2k bubble was one of the few bubbles fueled by non-government interference. A simple mathematics issue caused every industry on the planet to spend money ensuring their businesses would continue functioning during the year 2000, causing the incredible speculative bubble in tech. This speculative bubble was fueled by record low interest rates, leading to easy credit. When the bubble collapsed, a huge number of people couldn't pay their debts back, but a new speculative bubble in housing was brewed and interest rates were brought even lower.
That brings us to today. Housing prices were artificially driven up by reducing legislation regulating lending standards