Lee's Approval Breaks 30% in Seoul as Choo Enters Race, Party Leadership Direction Uncertain

This is lower than his overall national average and points in particular to a shift in capital-region public opinion. Seoul has historically been a stronghold of support for the Democratic Party, so this decline is likely to have a considerable impact on Lee's political standing.

Reporter Park Sang-gyu said, "In Seoul, the approval rating is no longer in the 30% range; it has collapsed below 30%, to 29.5%, into the 20% range." This could prompt concern within the party and will be a test of Lee's leadership going forward. Since the capital region decides outcomes in national elections, the erosion of Seoul's support is expected to affect the Democratic Party's overall strategy as well.

This is interpreted as evidence that, alongside Lee's falling approval, public sentiment in the capital region is deteriorating. If a by-election materializes, it will inevitably become another major political test for the Democratic Party.

Reporter Park Sang-gyu said, "Actually, the chance of a Seoul mayoral by-election next April is somewhat significant right now. In my view, it's not just somewhat; it's converging on nearly 100%." This analysis, which weighs the current political situation and the flow of public opinion together, suggests that the sentiment in Seoul will become even more important ahead of next year's general election.

This is interpreted as reflecting an intraparty perception that Lee's approval is falling short of expectations. Jung's remark shows that concern within the party over Lee's sluggish approval is spreading.

Reporter Park Sang-gyu explained, "Jung Chung-rae has been saying that if he becomes Democratic Party leader, Lee's approval will go up by at least 10%... It means Lee's approval has dropped more than 10% below where it should be." The remark indirectly reveals intraparty dissatisfaction with Lee's leadership and can also be seen as hinting at a possible shift in the internal balance of power.

She appears to have judged that Jung is more advantageous for achieving her goals under the current political situation.

Reporter Park Sang-gyu said, "Choo Mi-ae suddenly started writing posts attacking Lee and cheering on Jung Chung-rae. Choo has a dream now; in my view, she's eyeing the presidency. Who does she need for that? Should she join hands with Kim Min-seok, or with Jung Chung-rae? She judged that it's Jung Chung-rae." Choo's strategic choice adds a new variable to the Democratic Party leadership race and is expected to affect Lee's standing as well.

This is interpreted as a move to win over Honam public opinion. Lee also reportedly instructed that the relocation of Gwangju's military airbase be pursued by next year, and that if that is not possible, at least a temporary airport be built, alongside an investment package worth 800 trillion won.

Reporter Park Sang-gyu said, "Voting in the Honam region started today. So yesterday Lee made a swift push on the 800 trillion won Honam semiconductor cluster in Gwangju and Jeonnam. Move the Gwangju military airbase by next year, 2008, and if that doesn't work, at least do a temporary airport. Swift push." Lee's instruction is widely read as reflecting a strong intent to consolidate Honam support ahead of the party leadership election.

Reporter Park Sang-gyu said, "To the voters in Honam, especially Gwangju and Jeonnam, where voting has begun today, you have to vote for Kim Min-seok so that the 800 trillion won money shower reaches you through the swift push." He added, "Yesterday and today, Lee went down to Sejong, and while presiding over a cabinet meeting he said, 'Stop talking about the Honam mega project not working and talk about how it can be done,' and then went home." Such remarks are read as part of a strategy to strengthen Lee's political standing through Kim Min-seok's victory.

Party member voting in the Gyeonggi region begins tomorrow, and Choo's endorsement could have a major influence on the formidable Democratic Party rights-holding members there.

Reporter Park Sang-gyu explained, "So why has Choo Mi-ae suddenly become so important? Party member voting in the Gyeonggi region starts again tomorrow. So when she dropped the 'Conservative Mother' line and said 'Please help me, Mother,' the point is that if Choo effectively endorses in that way, the Gyeonggi Democratic Party rights-holding members will be a formidable force." Choo's influence is expected to play an important role not only in the outcome of the member vote but also in the overall dynamics of the leadership race.

When first- and second-choice votes are split, voters who chose Kim were almost all likely to also pick Song Young-gil, whereas voters who chose Jung were less likely to pick Song. In the simulation, if the gap between the two was 4%, Kim could come from behind under preference voting; but if Jung won by 5% or more, he would win regardless of the preference system.

Reporter Park Sang-gyu said, "They split it by first and second place. Then the people who chose Kim Min-seok would almost all choose Song Young-gil, and those who chose Jung Chung-rae would be less likely to choose Song Young-gil. If you split it roughly 80-20, when Kim and Jung differ by 4%, Kim could overturn it through preference voting even if Jung wins. If Jung wins by 5% or more, the result comes out that Jung wins regardless of the preference system." These simulation results are expected to serve as an important predictor of the final outcome of the leadership race.

The analysis holds that if Kim Min-seok wins, Lee's power would remain intact, but if Jung becomes leader, Lee would face a political crisis from that day forward. Based on this, speculation has even risen that pro-Lee lawmakers could form a new party.

Reporter Park Sang-gyu said, "If Kim Min-seok wins, Lee's power doesn't die. But if Jung Chung-rae becomes party leader, from that day Lee's lame-duck period begins." Conservative camps say they will either watch this tag-team continue or see the party thrown into turmoil with Jung's victory. He added, "If he wins, Lee and Kim's people might take their pro-Lee lawmakers and talk about founding a new party." Such speculation suggests the outcome of the leadership race could have a major impact on the Democratic Party's future realignment.

In a recent real-estate tax overhaul, about 60% of the public judged it to be a mistake, with residents of Seoul especially dissatisfied. There is widespread perception in Seoul that the tax reform will inflict heavy damage.

Reporter Park Sang-gyu said, "The biggest cause of Lee's falling approval is, as we've said many times, the failure of real-estate policy." He added, "Last week they carried out a real-estate tax overhaul, and when our outlet conducted a poll, 56.8%, close to 60% of the public, said it was really wrong and asked, 'How can they do it this way?' Especially residents of Seoul, who will inevitably suffer significant damage from this, said they were very wrong about it." Because real-estate issues directly affect people's daily lives, the analysis is that policy failure dealt a major blow to approval ratings.

With lending thresholds also raised and housing insecurity deepening, strong criticism has emerged that supporting Lee could be a "crazy thing" for them.

Reporter Park Sang-gyu said, "The difference between the 40s-50s and the 20s-30s is only whether the government made large real-estate loans available or restrained them. Moreover, not only did they tighten lending, but during the Moon era home prices rose 8.3% in one year, and under Lee they rose 11% in one year. In the first year alone, the two together pushed Seoul home prices up 20%. Aren't the 20s and 30s bearing this damage in full? Even if they want to get married, they have no way to secure a home, and loans don't even come through. For the 20s and 30s, supporting Lee becomes a crazy thing." This shows that the housing insecurity of younger generations had a decisive effect on the drop in Lee's approval.

The expression arose because people born and raised in Seoul face being forced to relocate to the countryside due to tax burdens. The capital gains tax burden is so heavy that they can neither sell their homes nor keep them, leaving them stuck with nowhere to turn.

Reporter Park Sang-gyu criticized, "Lee's position is that they should pay it all in taxes to the state, or go to the countryside. Where do people who were born and raised in Seoul go if told to go to the countryside suddenly? The state is about to take back nearly all the capital gains tax, so they're in a position where they can't go forward or back, and that's why it's called Goryeojang." Such harsh tax policy restricts citizens' choices about where to live and shakes the foundations of their lives, drawing strong backlash.

Strong criticism has been raised against tax laws that treat jointly owned single homes held by married couples as multiple-home ownership. Lawmaker Na Kyung-won questioned, "A jointly owned single home by a married couple counts as multiple homes? Is the state encouraging divorce?" arguing that this amounts to the state effectively forcing divorce. Under current tax law, owners of jointly titled homes could face tax bills ranging from hundreds of millions of won to tens of millions, leading some to consider divorce on paper.

Reporter Park Sang-gyu said, "Lawmaker Na Kyung-won says it: 'A jointly owned single home by a married couple is multiple homes? Is the state encouraging divorce?' That's coercion. It's not encouragement; it's effectively telling people to divorce. If they push this through as is, paper divorces will become common. What will people do? If someone faces an extra hundreds of millions in taxes, or tens of millions in taxes, they'll have to get divorced on paper." Such a tax law carries the risk of breaking up families, which is pointed to as a serious problem.

The criticism points to this tendency in several policies, including the Yellow Envelope Act and the Honam semiconductor mega project. Critics argue this approach erodes trust in state policy and throws citizens who followed those policies into confusion.

Reporter Park Sang-gyu said, "The policy of the Lee government is to charge first and patch later. Charge ahead first; when problems come up, patch, reverse, and mend. The Yellow Envelope policy was like that, and so is the Honam semiconductor mega project, I suppose. How dangerous is it to just charge ahead? It stabs the citizens who followed state policy in the back, makes fools of them, and wrecks their lives." Such a policy approach is seen as reducing predictability and raising concern that it will have a negative impact on people's lives.

Investors must now pass tighter requirements, including completing five days of paper trading and raising the minimum investment from 10 million won to 30 million won. Such tougher regulations are lowering retail investors' access, leading to a decline in trading volume.

Reporter Park Sang-gyu explained, "If you want to invest in single-stock leveraged ETFs, you have to pass five days of paper trading. The basic investment amount has also been raised from 10 million won to 30 million won. As these policies took effect, people started pulling money out. The trading volume of single-stock leveraged ETFs has been falling at a tremendous pace." As regulations tighten, vigor in the single-stock leveraged ETF market is fading, and investors' capital outflows are speeding up.

Leveraged ETFs double gains when prices rise, but double losses when they fall, causing capital losses to occur very rapidly. While ordinary stocks may recover over time if held through a decline, a leveraged ETF that falls does not recover in the same way and melts away like wax.

Reporter Park Sang-gyu warned, "Leveraged ETFs double whether they rise or fall, but think of chon-nong: when they fall, they melt away like wax. With regular stocks, even if they fall, if you hold them, they can recover when they rise again. With leveraged ETFs, once they fall, they're gone. The next day there's no recovery; you start from a melted state. And that product has another trait: sideways movement. It neither rises nor falls, it just moves horizontally. Then the compounding effect kicks in, and the wax melts again." He particularly cautioned that even in sideways markets, losses can accumulate due to compounding, so investors must be especially careful.