The Baht Goes Crazy

[sonicdragon]

Dear Dr Naam,

I am sure you will disagree violently but the blame for the 1992 Black Wednesday debacle was and is still placed firmly and squarely on the shoulders of the Bundesdank.

Had support been forthcoming ...and remember the DM /Sterling peg at 2.90 was what it was all about , the pound would have survived intact. John Major to this very day believes that it was hostilty towards Britain that prevented any help. When the French Franc came under pressure the Bundesbank gladly assisted. The BOE received not a pfennig of help. Indeed frantic calls by John Major were not even answered !

Steady on there ! Maybe John Major does believe it to be the Bundesbank's fault, but then he wouldn't want to take the blame for entering the UK into a flawed system, would he ? It was he, then as chancellor, and Douglas Hurd the Home Secretary who pressured Mrs Thatcher to join, when the UK economy was in a very weak position. Many eminent economists of the time, in parcular Sir Alan Walters, argued strongly against joining partly on the grounds that it would weaken the economy even further.

[chiang mai]

Toppy . . . you really do get off on this stuff, don't you?

Do you have any other interests? Try origami. I hear it's very relaxing.

Maybe you're the one that should try origami given that your major interest seems to be significantly less constructive than Topfield's, posting unhelpful comments about the poster rather than contributing to the posters subject. Or maybe you simply can't contribute in which case you may wish to try to learn.

Edited March 27, 2007 by chiang mai

[topfield]

Dear Dr Naam,

I am sure you will disagree violently but the blame for the 1992 Black Wednesday debacle was and is still placed firmly and squarely on the shoulders of the Bundesdank.

Had support been forthcoming ...and remember the DM /Sterling peg at 2.90 was what it was all about , the pound would have survived intact. John Major to this very day believes that it was hostilty towards Britain that prevented any help. When the French Franc came under pressure the Bundesbank gladly assisted. The BOE received not a pfennig of help. Indeed frantic calls by John Major were not even answered !

Steady on there ! Maybe John Major does believe it to be the Bundesbank's fault, but then he wouldn't want to take the blame for entering the UK into a flawed system, would he ? It was he, then as chancellor, and Douglas Hurd the Home Secretary who pressured Mrs Thatcher to join, when the UK economy was in a very weak position. Many eminent economists of the time, in parcular Sir Alan Walters, argued strongly against joining partly on the grounds that it would weaken the economy even further.

OK EVEN IF I accept your argument it was not the Bundesbank to blame for refusing to help Britain out in her need, the weak financial position of the UK was ,if my memory serves me right, not ever mentioned as the cause....Economists believe it was that the rate pegged at 2.90 to the DM was too high.

Had 2.60 been chosen for the ERM then many believe the fiasco would not have occured . Had 2.50 have been chosen most believe it would never have happened. In order for us to join the ERM a precursor to the Euro a rate HAD to be chosen under the rules.

Edited March 27, 2007 by topfield

[sonicdragon]

From what I recall, labour and the lib-dems did their best to highlight the weak economy as a major factor. But they were themselves in disarray at the time, so maybe they didn't make the most of it ? Certainly the conservatives economic management was discredited, but to blame it all on the level of the pound in the ERM doesn't make any sense. Yes, you are right that there was a lot of debate about the best rate for the pound to enter the ERM, and at 2.60 the consequences would have been different, but there are so many other variables to consider - for instance a pound fixed 10% weaker would have added to the already significant inflationary pressures (which, I might add, were in large part caused by the tories fooling with artificially low interest in the 80's to try to manage the currency). Also, we should remember that, after exiting the ERM the UK experienced singificantly better economic performance than the ERM-block and the exchange rate rallied to 3.20 to the DM.

[soundman]

Toppy . . . you really do get off on this stuff, don't you?

Do you have any other interests? Try origami. I hear it's very relaxing.

Maybe you're the one that should try origami given that your major interest seems to be significantly less constructive than Topfield's, posting unhelpful comments about the poster rather than contributing to the posters subject. Or maybe you simply can't contribute in which case you may wish to try to learn.

There are some instances when a bit of light banter in a posted topic is, how shall i say, - uplifting...

This is one of them...

Mr Bendix has plenty of useful info. on a wide range of topics. You don't have to be serious all the time, do you??

Soundman.

[sonicdragon]

Nothing wrong with a bit of light banter IMHO - economics can get far too serious. After all, it is the "dismal science"

[topfield]

Nothing wrong with a bit of light banter IMHO - economics can get far too serious. After all, it is the "dismal science"

I humbly disagree ..the above posting was shere nastiness and vilification as chiangmai noted.

Was this recent posting of his more informative.....it is indeed humerous ?

"I'd also advise all pastry investors to go short on Bakewell Tarts, and long on Apple Strudel"

His dry humour resulted in this last week from a member called the Skipper :

...and maybe you (Bendix) should stop wasting bandwidth and stick to posting when you have somthing worthwhile to contribute. Agreed?

Another of his personalised postings last week :

My concern is about the baht. It's about wondering what on earth poor old Topfield is going to do with himself when this all blows over.

Why personalise ?

[sonicdragon]

Yes, you are right. I reviewed the posts in question, and I agree there is no need for that. I wasn't paying enough attention (since there weren't directed at me). It is I who should be humble.

[sonicdragon]

But continuing on the subject of the ERM, I didn't find it surprising, or out of place, for Germany to support France - they were politically very close - being the backbone of the EU, you might even say. For the Franc to exit the ERM in a similar fashion to the pound must have been unthinkable. I'm sure no such thinking prevailed when Major and Lamont asked for help - and why should it ? The UK was hardly fully committed to europe at the time.

[gummy]

I know you guys must think the ERM etc is interesting to talk about, but as I am a very old fart who has not lived in Europe for 20 years, and yes it may be me loosing my memory, but could any of you enlighten me as to which one of the EU countries adopted the Thai baht as it's currency which is what this topic is about ?

[sonicdragon]

I know you guys must think the ERM etc is interesting to talk about, but as I am a very old fart who has not lived in Europe for 20 years, and yes it may be me loosing my memory, but could any of you enlighten me as to which one of the EU countries adopted the Thai baht as it's currency which is what this topic is about ?

This thread was started by topfield, who has engaged in the ERM discussion actively, so I don't think you should really be complaining. Anyway, the ERM is relevent to the thai baht because very frequently people on this and other forums and in the thai media talk about pegging the thai baht to the US$; The experience of the UK in the ERM is a perfect example of why countries should not peg their currencies, or rather why there are only very limited circumstances when it will work

[Naam]

"I am sure you will disagree violently but the blame for the 1992 Black Wednesday debacle was and is still placed firmly and squarely on the shoulders of the Bundesdank.

Had support been forthcoming ...and remember the DM /Sterling peg at 2.90 was what it was all about , the pound would have survived intact."

------

i don't disagree violently Topfield but draw your attention to my expression "coup de grâce" which could be interpreted as "final blow" (not a correct translation but an equivalent meaning).

also, the downfall of Sterling did not start in 1972 (parallel with the Dollar) as "Dragon" mentioned but it started much earlier, in fact it started a few years after World War II ended in the early/mid fifties. i still remember some english lessons in school (i was a little boy then) when we were taught the confusing british currency denominations. one pound was twenty shillings, twelve pence made a shilling, there was tuppence, "haypenny", the "fart-thing" (most interesting for little boys) and we learned that Savile Row tailors did not charge a suit in Pounds but in Guineas, each Guinea equalling twenty-one shillings.

what i remember too is that one Pound was twenty Deutsche Mark. 15 years later in 1968 (i believe) one Pound was only EIGHT Deutsche Mark.

[topfield]

Nothing wrong with a bit of light banter IMHO - economics can get far too serious. After all, it is the "dismal science"

Yes Bendix can be rather sharp and nasty when he wants to be : ie

"And the Victor Meldrew Award for ThaiVisa's Most Consistently Miserable poster goes to . .. . .

Are you STILL in Thailand, Old Asia Hand? It must be so horrible to be so miserable here all the time. I pity you.

however having reviewed about a thousand of this 42 year old married British ex public school investment banker's two thousand postings I have come to the conclusion that the man is clearly extremely bright, amusing, well informed and intelligent . An IQ of 150 perhaps ? His postings unlike mine, cover every possible subject under the sun and are well written, amusing and informative.

I would recommend anyone to read his compendium of postings for both enjoyment and pleasure and suggest even that a collection of his postings over the last two years be published. In paperback form perhaps ?

If only he would tone down his sharp aggressive wit .....but that would perhaps be out of character.

[chiang mai]

Toppy . . . you really do get off on this stuff, don't you?

Do you have any other interests? Try origami. I hear it's very relaxing.

Maybe you're the one that should try origami given that your major interest seems to be significantly less constructive than Topfield's, posting unhelpful comments about the poster rather than contributing to the posters subject. Or maybe you simply can't contribute in which case you may wish to try to learn.

There are some instances when a bit of light banter in a posted topic is, how shall i say, - uplifting...

This is one of them...

Mr Bendix has plenty of useful info. on a wide range of topics. You don't have to be serious all the time, do you??

Soundman.

I do agree that a little light banter can be uplifting and I fully support its use during serious debates. But Bendix has a track record of personalized attacks on Topfield even though he refers to posters as cyber entities rather than people. However smart Bendix may be and how useful his knowledge is does not come through to me in this forum. I personally enjoy reading what Topfield has to say in this forum and I acknowledge him as an interested and enthusiastic source of useful information and views. Consequently I find it highly annoying to continually read negative criticism of the poster by the same person without any constructive input to the discussion.

Edited March 27, 2007 by chiang mai

[backflip]

"Was this recent posting of his more informative.....it is indeed humerous ?

'I'd also advise all pastry investors to go short on Bakewell Tarts, and long on Apple Strudel'"

Yes, it's very funny comment. Bendix has a sense of humor, something that seems to be sorely missing in most of these forums.

Bendix also speaks to the point directly, calling a spade a spade...rather than a hoe.

[sonicdragon]

also, the downfall of Sterling did not start in 1972 (parallel with the Dollar) as "Dragon" mentioned but it started much earlier, in fact it started a few years after World War II ended in the early/mid fifties.

I assume you referring to my post, not topfield's with that ? I didn't say that sterling downfall started in 1972. I said that the Sterling Area was dismantled in 1972. It was just one of many nails in the coffin for sterling.

You are absolutely right that Sterling's downfall began a lot earlier. but it was a lot earlier than you mention though. Several devaluations in the 1930's could be pointed to, but the real blow was the first world war. It actually began as a consequence of almost unchecked expansion of the british empire in the late 19th century. By the early 20th century the writing was on the wall, and the 1st world war almost bankrupted the nation and that's when the downfall really began. Successive devaluations in the 20s and 30s, along with the great depression, coming off and on (and tinkering with) the gold standard, the 2nd world war, bretton woods. the suez crisis, israel, end-of-bretton woods, end of sterling area, oil shock, 79-81 recession, ERM entry/exit, and then the process was (arguably) complete.

Edited March 28, 2007 by sonicdragon

[bendix]

however having reviewed about a thousand of this 42 year old married British ex public school investment banker's two thousand postings I have come to the conclusion that the man is clearly extremely bright, amusing, well informed and intelligent . An IQ of 150 perhaps ? His postings unlike mine, cover every possible subject under the sun and are well written, amusing and informative.

I would recommend anyone to read his compendium of postings for both enjoyment and pleasure and suggest even that a collection of his postings over the last two years be published. In paperback form perhaps ?

If only he would tone down his sharp aggressive wit .....but that would perhaps be out of character.

Well well well.

This is all very intriguing.

I'm surprised people see my banter with Toppy as 'personalised' . . perhaps my assessment of his hide's thickness is different to that of more sensitive folks like chiang mai. I neither know Toppy nor have any strong feelings about him, except an extreme fascination with - and admiration for - his single-minded focus on the Baht / Sterling exchange rate. I'm genuinely fascinated by it. No, really, I am.

Anyway, Topfield . . . it's nice to know you have carefully studied my posts. However, I would like to clear up a few points. I'm neither ex-public school, nor an investment banker. Sadly, I'm from rural working class origins and my days at a squalid comprehensive school in Great Yarmouth were neither happy, nor beneficial. My alma mater and I parted company on bad terms. And these days I'm forced to earn my living in a humble little law firm.

Now, back to the subject at hand. What's happening in the world of foreign exchange today? More volatility?

[LaoPo]

Now, back to the subject at hand. What's happening in the world of foreign exchange today? More volatility?

Right.

My 'Vista' currency valuta screen says:

US$ - Baht = 31.380

LaoPo

[Jet Gorgon]

This thread is more entertaining than the joke forum. I'll have to visit more often.

Lots of good economic history here, too, and I thank Dr Naam for the guinea and shilling lesson. The BOE/Bundesbank debate brings back lovely memories of my banker life in London in the early 90s. Thank you all for the contributions.

I would beg a gentle correction in your assumption on Bendix's IQ, Mr Topfield. Based on our calculations, it stands at 163.

Excuse my intrusion, and happy baht day!

Edited March 28, 2007 by Jet Gorgon

[Naam]

Now, back to the subject at hand. What's happening in the world of foreign exchange today? More volatility?

the skies are falling!

[topfield]

however having reviewed about a thousand of this 42 year old married British ex public school investment banker's two thousand postings I have come to the conclusion that the man is clearly extremely bright, amusing, well informed and intelligent . An IQ of 150 perhaps ? His postings unlike mine, cover every possible subject under the sun and are well written, amusing and informative.

I would recommend anyone to read his compendium of postings for both enjoyment and pleasure and suggest even that a collection of his postings over the last two years be published. In paperback form perhaps ?

If only he would tone down his sharp aggressive wit .....but that would perhaps be out of character.

Well well well.

This is all very intriguing.

I'm surprised people see my banter with Toppy as 'personalised' . . perhaps my assessment of his hide's thickness is different to that of more sensitive folks like chiang mai. I neither know Toppy nor have any strong feelings about him, except an extreme fascination with - and admiration for - his single-minded focus on the Baht / Sterling exchange rate. I'm genuinely fascinated by it. No, really, I am.

Anyway, Topfield . . . it's nice to know you have carefully studied my posts. However, I would like to clear up a few points. I'm neither ex-public school, nor an investment banker. Sadly, I'm from rural working class origins and my days at a squalid comprehensive school in Great Yarmouth were neither happy, nor beneficial. My alma mater and I parted company on bad terms. And these days I'm forced to earn my living in a humble little law firm.

Now, back to the subject at hand. What's happening in the world of foreign exchange today? More volatility?

Hold your horses , Bendix, I do in fact have the greatest admiration for you. Your postings are witty intelligent and amusing. As mentioned were they published in paperback form as a journal of life in Bangkok over the past two years , the book would be a complete sell out.

I honestly believe your vocation should have been as a writer.

You cover every imaginable topic under the sun so perhaps its now understandable after reading over one thousand of your postings you find my interests narrow and boring. You are probably right.

As for my mistakes about you I apologigise but surely I cannot be blamed when postings over the last few days under other topics include :

"I work for the biggest law firm in the world"

...contrast that with what you write above but that makes you even more interesting !

A true Walter Mitty perhaps ?

Any how ..back to the baht......

Edited March 28, 2007 by topfield

[bendix]

Hey, Toppy, enough of the tongue-in-cheek irony. That's MY domain.

No seriously, old boy . . . a law firm is a law firm. I think you'll find that investment bankers work in . well . . investment banks. A strange mistake for a chap devoted to the study of financial stuff to make, but there you go . . . . .

Perhaps the baht's antics are leaving you a little confused?

[Naam]

What's happening in the world of foreign exchange today?

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

[topfield]

Lesson for potential currency smugglers.

Rate for baht at Mustafa's today Baht 22.98 will buy Sing $ 1

Rate buy S$ 1 at Super Rich Baht 22. 95

Net loss : three satang per Sing dollar

As the onshore mid rate is currently 34.97 to the US dollar and the offshore rate currently 32.1 making a

nine percent difference, anyone know where the profit is going folks ?

Who is giving the incorrect rate/profiteering Super Rich or Mustafa ?

Edited March 28, 2007 by topfield

[bendix]

What's happening in the world of foreign exchange today?

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

Gotta say I'm heading in that direction myself but with a variation. I've just sold a house in NZ and am seriously opening a US dollar term deposit at my bank in NZ. With the US / Kiwi cross at around 0.715, I'm thinking the risk might be worth it.

[topfield]

What's happening in the world of foreign exchange today?

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

Really ! Implies MAYBE you actually hold offshore baht .

Since the Thai banks are not tt'ing baht offshore does this mean the baht were acquired prior to the current crisis ?

Or was this perhaps a non deliverable contract ie when you sell, you either make a profit or take a loss IN US DOLLARS on the rate difference.

The Bloomberg mid rate is currently 32 but my chart did show that it dropped to 31.70 around noon .

Saxobank informed me a few months ago that they have suspended baht trading. Which brokers do you know are still active in the offshore baht market ?

[Naam]

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

Really ! Implies MAYBE you actually hold offshore baht .

i hold substantial amounts of THB offshore and onshore.

Since the Thai banks are not tt'ing baht offshore does this mean the baht were acquired prior to the current crisis ?

bought in july last year.

Or was this perhaps a non deliverable contract ie when you sell, you either make a profit or take a loss IN US DOLLARS on the rate difference.

just plain cash. i don't think THB NDFs are available.

The Bloomberg mid rate is currently 32 but my chart did show that it dropped to 31.70 around noon .

i sold around 13.00hrs Singapore time.

Saxobank informed me a few months ago that they have suspended baht trading. Which brokers do you know are still active in the offshore baht market ?

have no idea about brokers but my bank in Singapore is still trading.

p.s. the reason why i hold that many THB is a quite silly one. it did not happen because i am a financial wizzard but due to a stupid "mistake" i made (which i am ashamed to publish). of course the "mistake" was profitable.

[Naam]

Topfield,

just called my banker and he confirmed that there are no limitations buying or selling THB and that ample liquidity exists BUT of course at offshore rates.

[Naam]

The Bloomberg mid rate is currently 32 but my chart did show that it dropped to 31.70 around noon .

here's my chart:

[samran]

What's happening in the world of foreign exchange today?

i couldn't resist and changed a substantial amount of offshore THB. paid 31,80 + 15bps for 1 USD. time will tell whether it was a mistake.

Gotta say I'm heading in that direction myself but with a variation. I've just sold a house in NZ and am seriously opening a US dollar term deposit at my bank in NZ. With the US / Kiwi cross at around 0.715, I'm thinking the risk might be worth it.

here's hoping. I get paid in USD...so I'm locked in no matter what. Lets hope it goes the other way.