Korea launched ETFs nine weeks ago. Today the finance minister apologized for them in parliament, and the KOSPI got halted for the second day in a row.

The trigger is almost absurd. S**K Hynix posted the most profitable quarter in Korean corporate history - 60.5 trillion won in operating profit, up over 550%** (Bloomberg) - and it still missed estimates. The stock fell about 10%, the index dropped 8%, and Korea got its first back-to-back circuit breakers ever. July is now the worst month in KOSPI history. But the earnings aren't the real story. The leverage is. Retail investors lost about $1.5 billion in those nine-week-old ETFs, and over 320,000 accounts were force-liquidated (IBTimes). The 2x SK Hynix product is down 80% from June while the stock itself is down far less. That's daily-reset decay: the underlying can recover, the 2x holder doesn't. Nobody cut AI demand forecasts today. A company growing revenue 257% got sold anyway. The US lists the exact same product structure. **And Microsoft and Meta report tonight into this exact mood....** **Is Seoul just a leverage flush, or the first crack in the AI trade?** Source: [https://www.bloomberg.com/news/articles/2026-07-29/korean-stocks-tumble-a-second-day-as-sk-hynix-results-disappoint](https://www.bloomberg.com/news/articles/2026-07-29/korean-stocks-tumble-a-second-day-as-sk-hynix-results-disappoint)