The Butterfly Effect of the National Pension Service's Rebalancing Failure

The National Pension Service (NPS) primarily invests in

1. 1. Stocks and 2. Bonds.
   By the end of June, the NPS only bought domestic stocks and did not sell them.
   As a result, the NPS's domestic stock holding ratio
   hit an all-time high.
   Because they held excessive domestic stocks,
   the bond investment ratio decreased.
   As the NPS's bond purchasing volume decreased,
   bond sales volume also dropped.
   To sell bonds,
   they had no choice but to raise bond interest rates.
   Ultimately, this led to an increase in bond interest rates
   (interest rate hikes).
   One of the most famous sayings in economics is:
   "There is no such thing as a free lunch."
   The result of artificially boosting the KOSPI
   using the public's retirement funds
   is starting to return as an expensive bill...
   As interest rates rise:

2. The interest burden on citizens' collateral loans has increased,
   and as much as the interest expenses grew,
   household consumption has decreased.
   Naturally, the decline in consumption leads to a domestic economic recession.
   When companies invest, they often do so
   using borrowed money.
   Since interest rates have risen,
   corporate investment has decreased accordingly.
   While they say the stock market is in a great boom,
3. Households are decreasing consumption and
4. Companies are reducing investment.
   As bond interest rates rose,
   bond yields also increased.
   Consequently, funds that were intended to buy stocks
   began to flock back to bonds,
   becoming a factor that drives the KOSPI down...
   As a result of the NPS failing to rebalance,
   the KOSPI rose, but
   as a reaction, interest rates rose,
   household consumption decreased,
   corporate investment shrank,
   and the real economy ended up worsening instead.
   The evaporation of 181 trillion won from the NPS is an added bonus...
   Who exactly is this stock market stimulus for?
   If principles change depending on mood or situation,
   it is no longer a principle.
   The public's retirement funds are currently
   on the wrong path.