Prescient Young Blogger Did What S. Korea Couldn't -- Foresee Global Financial Crisis

By Blaine Harden
Washington Post Foreign Service
Saturday, January 24, 2009


As a financial blogger named Minerva, Park Dae-sung was the dark prophet of market decline in South Korea.

In this education-obsessed country, where academic credentials are often taken as a measure of human value, he was also something of an idiot savant. He had no degree in economics. He had no professional experience in finance. He was not a wealthy investor.

He had been a so-so student who studied communications at a so-so junior college in a backwater town south of Seoul. Thirty-one years old and single, he spent much of his time alone in his room. As his father noted, "He can't even get a job."

But he knew a global economic smack-down when he saw one.

Minerva saw it coming last fall, far earlier and with far more acuity than the South Korean government, which his blog has humiliated and angered.

Besides getting mad, the government got even. In a move widely perceived by the public as a chilling echo of the 1970s, when a military dictatorship ruled South Korea, the government detained Park this month, invoking a seldom-used telecommunications law that charges him with harming the public by spreading "false rumors."

Yet Minerva (no one knew him as Park until police raided his house Jan. 7) made his reputation by spreading rumors that turned out to be all too true.

He predicted the collapse of Lehman Brothers five days before it happened. He predicted a sharp decline in the value of South Korea's currency a few days before the won imploded against the dollar.

By the time he was taken away from his computer in handcuffs, he was a cyber-sensation. His blog had garnered more than 40 million page views (there are 48 million people in this well-wired country). He was lionized in the South Korean news media as the "online oracle" and the "Internet president of the economy."

Although Park has told authorities he is Minerva, claims have emerged here that Minerva might be a few people. Several economic and financial experts have said they wrote online postings under the name. Prosecutors, though, have declined to investigate, saying they have irrefutable electronic evidence that Minerva is Park.

Before police sniffed him out in his bedroom, then-Finance Minister Kang Man-soo publicly demanded that Minerva step out of the shadows for a "face-to-face, down-to-earth talk" with him. (Kang was fired this week, another victim of the lousy economy.)

While Minerva was forecasting doom, government officials spent much of the early autumn inaccurately forecasting moderate market disruption and continued growth. They groused a lot about unpatriotic market speculators.

President Lee Myung-bak, whom Minerva's blog mocked and insulted, warned in early October that currency traders must stop "greedily pursuing private interests" when their nation is in trouble.

Lee, who marks his first anniversary in office next month, has had a memorably awful year.

Before the economy tanked in the fall, his leadership was weakened by months of street protests against his decision to import U.S. beef. The public was, for a time, thrown into a panic by media and online reports that American beef would spread mad cow disease.

The detention of Park has further undermined Lee's popularity, according to Hwang Sang-min, a professor of psychology at Yonsei University in Seoul. In recent weeks, Lee's approval ratings have fallen into the mid-teens, according to newspaper polls.

"Legal niceties aside, the public thinks Minerva was arrested by the president because he could not tolerate a challenge to this authority," said Hwang, author of several books on South Korean popular culture. "The arrest weakens the authority of the government."

Even the legal niceties of Park's arrest seem shaky.

Prosecutors claim that one of his postings is clearly false. The government issued an emergency order Dec. 29, Minerva wrote, urging top banks to stop buying dollars. The government has denied issuing the order, but a number of currency traders have told the South Korean media that the government did urge banks that day to refrain from buying dollars.

Park's detention has also upset civil liberties groups. They say it is a worrisome symptom of an immature democratic culture.

"His crime was to have a large following and to make the government look bad," said Song Ho-chang, an attorney with Lawyers for a Democratic Society. "If a court does find Minerva guilty, everyone will be afraid to express an opinion online."

Lee's government tried last year to use the "false rumors" communications law against anti-U.S. beef activists who had used cellphone messages to recruit protesters for street demonstrations. A judge dismissed the charges.

Park is expected to face trial within a month or two. He has told his attorney, Park Chan-jong, that he is bewildered by his sudden celebrity and frightened by the prospect of imprisonment.

"I feel quite lost right now," his attorney quoted Park as saying. "It is scary that I can only talk to you with my handcuffs on."

Special correspondent Stella Kim contributed to this report.

View all comments that have been posted about this article.

© 2009 The Washington Post Company