Stock Market Buzzes with 'Lee Jae-myung Put' Expectation

The term 'Lee Jae-myung Put' is circulating among stock investors, reflecting expectations of government or central bank intervention in the stock market. 'Lee Jae-myung Put' is a term coined by likening it to the 'Bernanke Put' by former US Federal Reserve Chairman Ben Bernanke, who defended against stock price declines through interest rate cuts and liquidity supply during the 2008 financial crisis. A put option is a derivative product that hedges losses during stock price drops, carrying a critical implication that the central bank acts as a rescuer during a market downturn. 'Lee Jae-myung Put' signifies investors' expectations or blind faith that President Lee Jae-myung will not let stock prices fall, raising concerns that this could deepen investor moral hazard, leading to market bubbles and national economic risks.

The Lee Jae-myung administration recently intervened in the performance bonus negotiations between Samsung Electronics labor and management, leading to a tentative agreement. In this process, President Lee Jae-myung repeatedly stated the possibility of invoking emergency adjustment rights in case of a strike. It is possible that the administration judged it disadvantageous to tolerate stock price drops and shareholder opposition ahead of local elections, and thus considered invoking emergency adjustment rights just before the elections, weighing political gains and losses. Invoking emergency adjustment rights for a strike in a core industry could set a bad precedent for other key industries in the future, and past governments have exercised it cautiously, only four times in over 60 years.

While Prime Minister Kim Boo-kyum mentioned economic damage potentially reaching up to 100 trillion won, academics and market observers estimate daily losses at around 1 trillion won, totaling 20 to 30 trillion won, deeming the higher figure exaggerated. Semiconductor expert Lee Bong-ryeol criticized the focus on the scale of losses from the Samsung Electronics union strike on social media, pointing out that vested interests are treating workers' constitutionally guaranteed right to collective action as taboo.

The Lee Jae-myung administration has previously processed the 'Yellow Envelope Bill' to prevent the nullification of union strike actions, having designated the realization of labor respect and basic labor rights as national tasks. If emergency adjustment rights had been invoked within the first year of its term, it would have become a historical mockery.