Gap Investment
A rising market.
Most investors rejoice.
Ironically, not everyone does.
"Professor, the recent rebound in the stock market has been rather steep, hasn't it? Isn't this unfolding differently from your scenario?"
"……."
For Doctor Doom, it was nothing short of agony.
The market was bouncing back without any real foundation.
Having preached collapse, he now looked like a dog that had chased a chicken only to come up empty.
That much he could live with.
The KOSPI.
Contrary to every expectation, it had not fallen far.
Not even while the Nasdaq was plunging nearly −30%.
I was certain it would at least break the previous low…
That had been the reasonable call.
Korea takes the impact of America and China head-on.
If the Nasdaq crashes, the KOSPI should drop in kind.
The forecast had missed—not by a little, but by a mile.
Resentment from his followers was inevitable.
"The scenario itself has not changed."
"Oh, is that so?"
"We are at the end of a bear-market rally."
That did not mean his standing had collapsed.
His market call might have been wrong.
But I did achieve what I set out to achieve.
Number one on the booking lists of every economic channel.
Lecture after lecture, and his books had sold remarkably well in the short term.
Lately, though, the momentum had stalled.
The rebound was shaking people's faith.
That was only part of the picture.
Stocks were not the whole of the economy.
Real estate was another critical indicator.
"Ah, you're the viewer who put your jeonse money into inverse products last time!"
"Just think of it as play money and sit easy."
Real estate prices had begun to turn down.
Economic slowdown.
Rate hikes.
Of course it would feel the impact.
The stock market thrashing around claiming everything was already pre-reflected was the abnormal one.
Recession was only a matter of time.
As an economist, his forecast had not been wrong.
Wait long enough and the crash would come.
…
…
…
People who believed exactly that.
Among real estate investors, he was still worshipped.
Because prices really were falling.
Korean real estate had been on a daily downward slide.
The analyst who had called it in advance.
Doctor Doom's solid footing was only natural.
The ones who bought the top in 2007
didn't escape until 2012.
Anyone who bought real estate this year gets their principal back in 2023.
Real estate.
Prices rise and fall.
Just like stocks, you can trade the spread.
For those investors, one question mattered above all:
Was the current market a bull or a bear?
and only sale prices fall,
so the ratio climbs
and you get a bottom.
Right now jeonse is falling harder than sales,
so the ratio is dropping even further lmaooooooo
The fact that it was a bear market hit harder.
No one was buying real estate.
Raising that kind of lump sum was simply too hard.
Interest rates were too high.
The real economy was circling the drain.
What people felt on the ground was nothing like the stock market.
either doesn't watch the news
or is just plain stupid??
Politics hit it directly.
Unlike the stock market, Korean policy decided everything.
If the government said prices would fall?
In a country with strong state control, zero impact was impossible.
Heh heh. "Only a matter of time" is exactly the phrase for a situation like this.
The picture Doctor Doom was painting.
Stocks might be uncertain, but real estate would hit for sure.
An entirely reasonable assumption.
Of course that was how it would go—or so everyone thought.
The real economy.
"Kim!"
"Park, what's the occasion?"
"When have I ever needed a reason to come by~ I come when I feel like coming."
America's various shocks were rattling the financial markets.
And those shocks reached the real economy as well.
All the way to a little real-estate office in Seoul.
Park Il-sung, visiting his old friend after a long while, sensed it the moment he stepped inside.
"Business going well?"
"Same as always."
"A man whose business is 'same as always' doesn't usually look like that."
"I'm ugly enough already—you adding to it?!"
Dead quiet.
If it were only a lack of customers, that would be one thing.
This wasn't a neighborhood supermarket doing volume on thin margins.
One look and you can tell he's dying inside. Tsk tsk.
Not a single stack of papers on the desk.
Kim didn't look like he was working at all.
In other words: no work to do.
Given the recent economy, there was nothing left to guess at.
"Who's even looking at houses these days."
"At the start of the year you were saying you couldn't sell fast enough, weren't you?"
"That was then. This guy—have you been living with your ears closed?!"
The real estate market.
It had entered its worst phase.
And the prevailing view was that this was only the beginning.
Of course a brokerage office would be gathering dust.
The owner, Kim Isu, knew it.
The economy these days is truly something else.
And a great many other things besides.
The more news he watched, the clearer it became that real estate was in trouble.
"America's raising rates or whatever and making a whole fuss."
"What's that even mean?"
"What else? Interest goes up~"
"Kim, you're sharp! College man after all—something different about you."
No, he couldn't not know.
A man who brokered real estate deals.
Someone with a licensed realtor's sign hanging over the door.
Looks like another five years of swatting flies.
This kind of experience.
Not the first time.
It had been the same during the IMF crisis, and again in 2008.
Something called the "sub-whatever" had blown up, they said.
At seventy, Kim had lived long enough to know these things happened.
Clack!
This was probably just another one of those times.
Best to brace for a while—no, for a few years at least.
"Well, not the first or second time, is it?"
"Easy for you to say when it's not your livelihood."
"Hey now~ is there any other friend who drops by like this for me?"
That was why they were playing Go at the glass table meant for clients.
In complete leisure.
I'll have to get used to it.
That was the nature of real-estate brokerage.
Land one good contract and you could clear millions of won.
In a boom.
When everyone was scrambling to buy property, the money poured in.
"The government says it's going to rein in real estate!"
"It's only us ordinary folks who get reined in~."
"Guess we'll just have to play Go till we drop dead of boredom. Right?"
The opposite situation.
Simply keeping the shop open put them in the red.
You still had to secure listings, so quitting halfway wasn't an option either.
By the time the next boom rolls around I'll have my third-dan rank for sure.
Life had those stretches.
Ordinary people couldn't possibly understand what the government was doing or how the economy turned.
Creak—!
Just play dead for the next few years and it would pass.
Kim thought so. His friend Park thought so too.
But there were investors who thought the opposite.
"I came because there's a property I want to look at."
Opportunity.
It wasn't something you could find only in the stock market.
Especially not in Korea.
People who traded stocks were a minority.
The vast majority of the population had thrown themselves into real estate.
Whether they realized it or not.
Society was structured that way.
"Then we'll consider it under contract."
"Ahem! Ahem! Young man."
"Yes?"
"It'll be a problem if you change your mind later. Kids these days really have no grit…"
"Grit, you say."
Adults would shout that stocks would ruin your family!
Yet they never said a word against real estate. There was a reason.
They tell you to buy a house first, don't they.
The myth of invincible real estate.
It had become something close to a religion.
And that was no accident.
He was going to cut that origin point.
Korea's real estate market had one critical flaw.
And he knew exactly what it was.
"You don't need to worry about that."
"Hmm! Not the kind of talk you hear from kids these days."
"And there's one more favor I'd like to ask."
"?"
"Once the contract is done, I'd like to put it out on jeonse right away."
"Jeonse?"
This was the first step of the real estate bubble that would later be called the great national scam.