Thai Baht May Hit 30 To The Us Dollar

[VegasVic]

What is it with American extreme right-wingers?

Why do they call everybody who is politicly left of them (including centrists) liberals, and what is it about this kool-aid drink. Maybe fellow US citizens understand this jibe, but, nobody else does. Please explain this obsession of conecting non-right wing people with kool-aid.

It's a Jonestown reference.

Guyana grape juice to be absolutely correct! I just got back from a dinner party and thought I would check in to see if there were any replies, WOW! I don't know if I should start buying all the canned goods I can find and immediatly grab a shovel and start digging in the backyard for a fallout shelter. One thing is for sure I do need another box of kleenex because I haven't been able to stop laughing since I started reading some of these posts, my eyes are watering something fierce. Anyway my wife invited some friends home from the party and she broke out the good merlot, so I'm off to enjoy a couple of glasses of vino and get back here a little later. I was warned that a good portion of the thaivisa regulars were, shall we say a little left of center and their hatered of G. Bush was blinding, but this is really special. As Arnold says, I vill be baaaack!

So Vic, when do you think that the current economic depression in the US will end? Do you think that Hillary will be able to reverse it?

I Can't reply on the political question, but the dollar seems to be getting weaker almost every day and the depression in the U.S. right along with it, I mean just look at how decimated the U.S. stock market averages were today (Thursday), its almost too painful to even mention here. The baht and SET will likely continue its climb and I wouldn't be surprised to see the baht at 25/dollar by years end and the SET at 12,000, after going back and reading some insighful articles by variuos posters (mostly by Lao Po) I can see that I had the Thai economy all wrong. The export sector is apparently growing by around 16% so far this year alone and with the new jobs created in the export sector and many jobs apparently created in cottage industries, I can now see that the Thai economy is really in a boom phase. In reading the real estate forum on thaivisa I can see that I was also wrong about the real estate market in Thailand, apparently most of the projects in Bankok, Phuket, Hua Hin, Ko Samui and Pattaya are sold out before they even finish building them, I would imagine that the stronger that the baht gets the more the growth will continue (seeems to make sense, strong currency-strong economy). I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region. Well I have to say that this topic certainly seems to have died in the last two days, I guess the fact that the baht will hit 30 soon is obvious, anyway I will likely be off to the Chiangmai forum as they have an very insightful discussion on the best pizza in Chiang Mai (my favorite is the Dukes). Always good reading your posts kdvsn!

[Jai Dee]

PM is still positive that fluctuation of baht will not serious affect economy

Prime Minister Surayud Chulanont is still convinced that the current fluctuation of Thai baht will not seriously impair Thailand’s economy like the economic crisis in 1997. However, he admits that he is concerned for the textile industry and has assigned relevant units to take care of the affected industrial operators.

Gen. Surayud held preliminary talks with Finance Minister Chalongphob Sussangkarn and Bank of Thailand Governor Tarisa Watanagase, and says the currency fluctuation should not be too immediate as relevant units may not be able to adapt accordingly. Besides, the baht situation at the moment is different from the currency situation ten years ago, and the government has already prepared measures to address this problem.

The Prime Minister says the Social Security Office has reported that a number of factories will close down, resulting in more unemployed workers. Gen. Surayud says he had a discussion with Labor Minister Abhai Chanthanachulaka on this issue, and affirms that all sides are working together to help the affected industries, especially the textile industry.

At present, Thailand’s textile industry is not as competitive as the textile industries in China and Vietnam. However, other industries, such as gems and jewelry industry, have not been greatly affected by the fluctuation of Thai baht, and they would be able to cope with the changes in terms of technological innovations and labor skills.

Source: Thai National News Bureau Public Relations Department - 13 July 2007

[cclub75]

I can now see that the Thai economy is really in a boom phase.

Are you serious or is it sarcastic ?

Because THB, SET and exports are surging, you think that the thai economy is booming ?

You're making the same mistake than many other : THB is not going up because the Thai economy is good. It's a mechanical effect due to the fall of the USD. It affects more the thai currency because it's a tiny economy, with less means to "cheat" with its currency (unlike China and Japan).

As for the exports, fair enough. They went up. Strongly. But what is important is not the past, it's the future trend. Export growth is on a plateau in USD since Q3 of 2006 (and going down in THB). The THB of course is not going to help. Therefore, it's rationnal to say that the engine for export has been pushed at its maximum. No growth potential anymore.

Other standard mistake : exports seen as the alpha and omega of any economy. To export rice, textile, and small electronics is not from my point of view a certificate of good health. Even cars.

We all know that that the japanese manufacturers in Thailand import parts (with low or even zero customs taxes), and make the assembly in Thailand, and then export (no VAT). And because they are BOI, they don't even pay (for a period of time) taxes on profits !

And because they are large groups they know very well how to reduce/optimize their taxes bill by playing with prices and invoicing (they are buying parts from... themselves in Japan for instance...).

To sum'up : exports are surging and "thai economy is booming" as you say, but taxes revenues of the government are going down... Strange, isn't it ?

Add to this the liability of oil price for instance (Thailand's weak point)... plus the delicious political game (but "don't worry, after the elections everything will be okay") And you'll understand why the thai people on the ground are suffering (reflected in private consumption, still depressed).

As for the SET, it's the same. Foreigners invest on blue chip in Asia, to flee USD, to diversify the risks. Big deal. 4 billions USD since january, said the BOT. And you call that impressive ?

They don't buy the SET because the thai economy is "booming". I mean : this money could go away as quickly at it arrived...

Last but not least, have a look at this nice chart about corporate investments in Thailand...

Yes, booming indeed.

Edited July 13, 2007 by cclub75

[koheesti]

I can now see that the Thai economy is really in a boom phase.

Are you serious or is it sarcastic ?

I think it's the latter.

[LaoPo]

I Can't reply on the political question, but the dollar seems to be getting weaker almost every day and the depression in the U.S. right along with it, I mean just look at how decimated the U.S. stock market averages were today (Thursday), its almost too painful to even mention here. The baht and SET will likely continue its climb and I wouldn't be surprised to see the baht at 25/dollar by years end and the SET at 12,000, after going back and reading some insighful articles by variuos posters (mostly by Lao Po)

1. I can see that I had the Thai economy all wrong. The export sector is apparently growing by around 16% so far this year alone and with the new jobs created in the export sector and many jobs apparently created in cottage industries,

2. I can now see that the Thai economy is really in a boom phase. In reading the real estate forum on thaivisa I can see that

3. I was also wrong about the real estate market in Thailand, apparently most of the projects in Bankok, Phuket, Hua Hin, Ko Samui and Pattaya are sold out before they even finish building them, I would imagine that the stronger that the baht gets the more the growth will continue (seeems to make sense, strong currency-strong economy).

4. I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) ,

5. I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region. Well I have to say that this topic certainly seems to have died in the last two days, I guess the fact that the baht will hit 30 soon is obvious, anyway I will likely be off to the Chiangmai forum as they have an very insightful discussion on the best pizza in Chiang Mai (my favorite is the Dukes). Always good reading your posts kdvsn!

I agree -for the most part- with cclub75- and you're indeed very wrong on many subjects regarding Thailand, VegasVic; sorry for that.

1. Exports were indeed growing but for 64% High Tech related, read: (mostly) Japanese companies importing parts, assemble them and re-export them (read cclub75's comments); the US$'s versus Baht are in control by the same Japanese companies and thus they control their own in- and outflow. The figures by the BOT looks nice but they aren't. Japanese companies are also 'famous' for their financial controls, meaning THEY decide where the profits are going.....NOT Thailand, I assure you; just the necessary % of profits.

2. Thailand is NOT in a booming phase. On the contrary; Yes, they have growth but it's all a 'fake' figure, mainly to the above mentioned.

3. Thai Real Estate; I can't comment on that but I fear the Real Estate market, both for Farang (small part of the total Real Estate market) and local housing is not prosperous at the moment, also because Banks are tougher with giving out new loans/mortgages and THAT is also due to the meager income for the majority of Thai.

4. Be careful here about Chinese stock markets going up. It's fragile at the moment and very nervous. The P/E's of the major Shanghai index are around 40 or more; only a minority of companies have lower P/E's. Yes, the economy is still booming with a growth this year -projected- of around 10.9% (first quarter was arounf 11.1% (!) BUT:

5. I don't see the stock markets double or even triple before the Olympics with the present high P/E's.

The Chinese government is doing the utmost to try and cool down the economy [AND stock markets] for many obvious reasons and they are -for a part- succeeding; for instance, the number of Chinese, registering for new stock accounts [betting with their money] in on the way back but still high in numbers; there are now around 107.8 Million (!) registered stock accounts/investors. This figure is from last tuesday!

60% of them are private investors versus some 5% in the USA....

The positive news is that just 5% of total Chinese HUGE savings is in the stock markets.

Your predictions of 25/30 Baht to the dollar....that's possible but I don't hope so.

With 25 or even 30 Baht to the US$ it would devastating for Thailand, it's economy, exports and even incoming tourism.

The VERY bad news is that Thailand is on the brink of a black -NON democratic- period ...and I'm afraid most TV members don't even see that...yet.

But that's another matter.

LaoPo

[j_cheung]

... I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region.

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

[PeaceBlondie]

VegasVic may be doing a great tongue-in-cheek on his last post. If so, very clever. The British have no copyright on sarcasm.

[cclub75]

VegasVic may be doing a great tongue-in-cheek on his last post. If so, very clever. The British have no copyright on sarcasm.

Fair enough. But please, if so, a smiley should do the trick... I mean, if we need to check the posts history of every TV members before posting a reply... Well, that could time consuming.

And yes, I'm sarcastic on this last comment.

[Prakanong]

VegasVic may be doing a great tongue-in-cheek on his last post. If so, very clever. The British have no copyright on sarcasm.

But we patented irony!

Edited July 13, 2007 by Prakanong

[midas]

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Yes but China's economy is booming while Thailands export growth is looking less rosy so how

god knows how these " punters " are able to measure what a reasonable PE Ratio is ?

[VegasVic]

... I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region.

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Wait just a second, I've been having an epiphany here and now you are telling me that PE ratios may really matter. So are your saying that perhaps all those negative articles about China that I have been reading over the last few months, like the excessive polution they are releasing over there, the dog food and human food exports that have dangerous toxins and carcinigins and have are making people sick and have actually killed dogs and humans, and the shoddy product that fall apart so easily, and the dangerous toys that have been injuring children all over the world, that this could cause a backlash against chinese exports and have an impact on the chinese equity markets? So if I understand you correctly, then the current average PE of say 55 might be a correct figure, but the forward PE of 45 might not be an accurate prediction, if like chinese exports were to say "fall a bit" due to some of these things that I have been reading about or a drop off in U.S. demand, or a confluence of both, then the forwrd PE might actually turn out to be more like say 75 or 85? Wow that could cause a serious devaluation of chinese equities, but this really can't happen can it? I bet you are pulling my leg, the next thing you will try to get me to believe is that there actually may be a serious Yen carry trade crisis coming down the pike! Nice try! I know that the chinese stock market is super solid and will grow for years to come because I read it here on many of the forums, now that U.S. market on the other hand, now there is a house of cards just look at what happened yesterday. I have to admit that this stuff is all kind of new to me, I guess I'll just have to wait and see who is correct, but thanks on the heads up that PE ratios may actually matter!

[VegasVic]

VegasVic may be doing a great tongue-in-cheek on his last post. If so, very clever. The British have no copyright on sarcasm.

Personally I would say facetious, but in a pinch I'll take sarcastic!

[Old Man River]

1. Exports were indeed growing but for 64% High Tech related, read: (mostly) Japanese companies importing parts, assemble them and re-export them (read cclub75's comments); the US$'s versus Baht are in control by the same Japanese companies and thus they control their own in- and outflow. The figures by the BOT looks nice but they aren't. Japanese companies are also 'famous' for their financial controls, meaning THEY decide where the profits are going.....NOT Thailand, I assure you; just the necessary % of profits.

The above comments should not be limited solely to Japanese companies as this is a common strategy for MNC's from other countries as well.

Your conclusion is spot on. MNC's normally not only buy from group companies in other countries, but also sell to group companies in other countries. Currency losses in one country are netted against currency gains in another. The currency value is often more important to the local MD who needs to hit local performance targets.

[j_cheung]

... I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region.

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Wait just a second, I've been having an epiphany here and now you are telling me that PE ratios may really matter. So are your saying that perhaps all those negative articles about China that I have been reading over the last few months, like the excessive polution they are releasing over there, the dog food and human food exports that have dangerous toxins and carcinigins and have are making people sick and have actually killed dogs and humans, and the shoddy product that fall apart so easily, and the dangerous toys that have been injuring children all over the world, that this could cause a backlash against chinese exports and have an impact on the chinese equity markets? So if I understand you correctly, then the current average PE of say 55 might be a correct figure, but the forward PE of 45 might not be an accurate prediction, if like chinese exports were to say "fall a bit" due to some of these things that I have been reading about or a drop off in U.S. demand, or a confluence of both, then the forwrd PE might actually turn out to be more like say 75 or 85? Wow that could cause a serious devaluation of chinese equities, but this really can't happen can it? I bet you are pulling my leg, the next thing you will try to get me to believe is that there actually may be a serious Yen carry trade crisis coming down the pike! Nice try! I know that the chinese stock market is super solid and will grow for years to come because I read it here on many of the forums, now that U.S. market on the other hand, now there is a house of cards just look at what happened yesterday. I have to admit that this stuff is all kind of new to me, I guess I'll just have to wait and see who is correct, but thanks on the heads up that PE ratios may actually matter!

Vic,

The last great bull market on Chinese equities was back in '93 & '97 with the provinical and/or municipal investment trusts and the famed "Red-chips". Beijing Enterprises & Shanghai Industrials had PEs of over 50+. The people in HK were queuing in huge long lines to just grab a stock subscription form for these state-owned companies at the New World Building. Even laggard shares of the grand-daddy of Chinese department stores Wing On skyrocketed when the Kwok family had hinted in putting serious money back into Shanghai's Nanjing Road. At the time, I put a little money in a Chinese shipping conglomerate called China Merchants - the first incorporated company in China dating back to the Qing dynasty. Little did I knew back then that it would take almost a decade of waiting to see that stock reach the same price I purchased just before the onslaught of the Asian Economic Crisis!

I don't know if the indexes of the SSE or SZSE bourses will double or triple in time for the Olympics & beyond. What I do know is that whenever a bunch of "professionals" (including one of my idols - Jimmy Rogers) start fantasizing that we're on a "new paradim" or that "this time it's different", I'm gonna start looking for the exit.

[j_cheung]

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Yes but China's economy is booming while Thailands export growth is looking less rosy so how

god knows how these " punters " are able to measure what a reasonable PE Ratio is ?

Very true. I don't know how the punters in Thailand gauge an appropriate PE. Having said that, using PEs, book values & dividend yields as a rough guide, could lead one to dig a little deeper into the fundamental aspects and upcoming aspirations of the company and compare that against similar benchmark companies across the region. The chances of finding better bargains seem higher that way ...

[ray23]

You guys can stop worrying this should do the trick.

"TBA; Banks to cooperate to stem baht speculation

BANGKOK, July 13 (TNA) – Thai Bankers' Association chairman Apisak Tantivorawong on Thursday affirmed that commercial banks were instructed to ask exporters neither to speculate in the baht nor dump the US dollar in business transactions.

The instruction was made following the Bank of Thailand's call for cooperation from commercial banks to tighten foreign currency business transactions with exporters.

He said the commercial banks had previously advised exporters not to speculate on the baht because they faced more risk of losses than gains.

Thailand's banks have warned exporters not to make forward contracts unless they shipped their product overseas.

However, exporters had been advised to hedge against foreign exchange risks as soon as they confirmed purchase orders so that they could know their costs and profits.

Mr. Apisak said the stronger baht stemmed from a large foreign capital inflow. The central bank must manage such funds with caution, he said, and should initiate any action against the market mechanism.

The government has advised the private sector to take advantage of the baht rise as an opportunity import capital development machinery and to extend overseas investment, while the public has been urged to deposit money in US dollar terms rather than unloading dollars.

Should businesses and private investors follow the advice being given, Mr. Apisak said, the demand for the US currency would increase again, which could ease the baht appreciation. (TNA)-E005"

[Old Man River]

You guys can stop worrying this should do the trick.

"TBA; Banks to cooperate to stem baht speculation

BANGKOK, July 13 (TNA) – Thai Bankers' Association chairman Apisak Tantivorawong on Thursday affirmed that commercial banks were instructed to ask exporters neither to speculate in the baht nor dump the US dollar in business transactions.

The instruction was made following the Bank of Thailand's call for cooperation from commercial banks to tighten foreign currency business transactions with exporters.

He said the commercial banks had previously advised exporters not to speculate on the baht because they faced more risk of losses than gains.

Thailand's banks have warned exporters not to make forward contracts unless they shipped their product overseas.

However, exporters had been advised to hedge against foreign exchange risks as soon as they confirmed purchase orders so that they could know their costs and profits.

Mr. Apisak said the stronger baht stemmed from a large foreign capital inflow. The central bank must manage such funds with caution, he said, and should initiate any action against the market mechanism.

The government has advised the private sector to take advantage of the baht rise as an opportunity import capital development machinery and to extend overseas investment, while the public has been urged to deposit money in US dollar terms rather than unloading dollars.

Should businesses and private investors follow the advice being given, Mr. Apisak said, the demand for the US currency would increase again, which could ease the baht appreciation. (TNA)-E005"

I thought what an exporter did was ship their product overseas. Looks like another bad translation to me.

[ray23]

I wouldn't bet on it.

[tijnebijn]

The thing is that who will an can get the baht down again , will have a good chance to win the elections .

With a too much appreciation the thai working force of 300.000 people will soon loose their jobs , in the garment industry alone work 1000.000 poeple , I wonder how many families will suffer . Its not only good for us expats when the baht gets weaker but also for the Thais themselves , the working class I mean .

[LaoPo]

1. Exports were indeed growing but for 64% High Tech related, read: (mostly) Japanese companies importing parts, assemble them and re-export them (read cclub75's comments); the US$'s versus Baht are in control by the same Japanese companies and thus they control their own in- and outflow. The figures by the BOT looks nice but they aren't. Japanese companies are also 'famous' for their financial controls, meaning THEY decide where the profits are going.....NOT Thailand, I assure you; just the necessary % of profits.

The above comments should not be limited solely to Japanese companies as this is a common strategy for MNC's from other countries as well.

Your conclusion is spot on. MNC's normally not only buy from group companies in other countries, but also sell to group companies in other countries. Currency losses in one country are netted against currency gains in another. The currency value is often more important to the local MD who needs to hit local performance targets.

I agree. I set an example but should have been more specific.

ps: read my signature

LaoPo

[soundman]

Easy to fix the baht appreciation problem - print more money! I'm surprised the monkeys in charge of the BOT haven't given it serious consideration....

[tijnebijn]

Easy to fix the baht appreciation problem - print more money! I'm surprised the monkeys in charge of the BOT haven't given it serious consideration....

Would be a good move . But it costs money to print them .........thats why slowly .

[VegasVic]

... I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region.

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Wait just a second, I've been having an epiphany here and now you are telling me that PE ratios may really matter. So are your saying that perhaps all those negative articles about China that I have been reading over the last few months, like the excessive polution they are releasing over there, the dog food and human food exports that have dangerous toxins and carcinigins and have are making people sick and have actually killed dogs and humans, and the shoddy product that fall apart so easily, and the dangerous toys that have been injuring children all over the world, that this could cause a backlash against chinese exports and have an impact on the chinese equity markets? So if I understand you correctly, then the current average PE of say 55 might be a correct figure, but the forward PE of 45 might not be an accurate prediction, if like chinese exports were to say "fall a bit" due to some of these things that I have been reading about or a drop off in U.S. demand, or a confluence of both, then the forwrd PE might actually turn out to be more like say 75 or 85? Wow that could cause a serious devaluation of chinese equities, but this really can't happen can it? I bet you are pulling my leg, the next thing you will try to get me to believe is that there actually may be a serious Yen carry trade crisis coming down the pike! Nice try! I know that the chinese stock market is super solid and will grow for years to come because I read it here on many of the forums, now that U.S. market on the other hand, now there is a house of cards just look at what happened yesterday. I have to admit that this stuff is all kind of new to me, I guess I'll just have to wait and see who is correct, but thanks on the heads up that PE ratios may actually matter!

Vic,

The last great bull market on Chinese equities was back in '93 & '97 with the provinical and/or municipal investment trusts and the famed "Red-chips". Beijing Enterprises & Shanghai Industrials had PEs of over 50+. The people in HK were queuing in huge long lines to just grab a stock subscription form for these state-owned companies at the New World Building. Even laggard shares of the grand-daddy of Chinese department stores Wing On skyrocketed when the Kwok family had hinted in putting serious money back into Shanghai's Nanjing Road. At the time, I put a little money in a Chinese shipping conglomerate called China Merchants - the first incorporated company in China dating back to the Qing dynasty. Little did I knew back then that it would take almost a decade of waiting to see that stock reach the same price I purchased just before the onslaught of the Asian Economic Crisis!

I don't know if the indexes of the SSE or SZSE bourses will double or triple in time for the Olympics & beyond. What I do know is that whenever a bunch of "professionals" (including one of my idols - Jimmy Rogers) start fantasizing that we're on a "new paradim" or that "this time it's different", I'm gonna start looking for the exit.

Well I certainly understand about people fantasizing (including one of my idols-Lao Po) about this chinese market being in a "new paradigm" and how you can't compare the current unreal valuations in China to say the NASDAQ in late 1999, however you and I both know that this time is no different than any other bubble. I have been investing since the early 70's and the one thing I have found to be consistant in all that time is that the sheep (despite multiple warnings ) are always most bullish right before the crash, it happens every time and that same mantra "but this time its different" is also used at the top of nearly every bubble I have ever seen. I do admit that there is a lot of very cheap money all around the world these days to keep some of these bubbles inflated a while longer (and this cheap money is usually highly leveraged which means that the downturn will be exagerated), but in the end bubbles do what they do best and that is burst! When the chinese market finally bursts it will likely loose half its value in a very short period of time, and all kidding aside I think that this is likely to happen well before the olympics next summer. When economic historians look back on this "post 9/11" era one of the things that will stand out will be the sheer genious of the weak U.S. dollar, and how the U.S. Treasury dept. was able to achieve this behind the scenes.

[VegasVic]

VegasVic may be doing a great tongue-in-cheek on his last post. If so, very clever. The British have no copyright on sarcasm.

Fair enough. But please, if so, a smiley should do the trick... I mean, if we need to check the posts history of every TV members before posting a reply... Well, that could time consuming.

And yes, I'm sarcastic on this last comment.

cclub, It wouldn't be very time consuming to check my prior posts (there aren't many left)

[Freddyrocks]

... I see the chinese markets are also still going up and up and Lao Po was correct here as well(PE ratios really don't matter in china because it is growing so fast) , I think that chinese equities could very well double (or perhaps triple) again by next summers olympics, and that can only help Thailand and the entire region.

China's overall economy remains highly dependant on export growth to the world's largest consumer market i.e. the US. If that goes down over a noticable period of time, so will China's red-hot growth. Eventually, PEs do matter ...

Fortunately, the SET's PEs had been hovering at the lower end of the region's averages (high single to low double digits) so the downside wouldn't be as severe so far ...

Wait just a second, I've been having an epiphany here and now you are telling me that PE ratios may really matter. So are your saying that perhaps all those negative articles about China that I have been reading over the last few months, like the excessive polution they are releasing over there, the dog food and human food exports that have dangerous toxins and carcinigins and have are making people sick and have actually killed dogs and humans, and the shoddy product that fall apart so easily, and the dangerous toys that have been injuring children all over the world, that this could cause a backlash against chinese exports and have an impact on the chinese equity markets? So if I understand you correctly, then the current average PE of say 55 might be a correct figure, but the forward PE of 45 might not be an accurate prediction, if like chinese exports were to say "fall a bit" due to some of these things that I have been reading about or a drop off in U.S. demand, or a confluence of both, then the forwrd PE might actually turn out to be more like say 75 or 85? Wow that could cause a serious devaluation of chinese equities, but this really can't happen can it? I bet you are pulling my leg, the next thing you will try to get me to believe is that there actually may be a serious Yen carry trade crisis coming down the pike! Nice try! I know that the chinese stock market is super solid and will grow for years to come because I read it here on many of the forums, now that U.S. market on the other hand, now there is a house of cards just look at what happened yesterday. I have to admit that this stuff is all kind of new to me, I guess I'll just have to wait and see who is correct, but thanks on the heads up that PE ratios may actually matter!

Vic,

The last great bull market on Chinese equities was back in '93 & '97 with the provinical and/or municipal investment trusts and the famed "Red-chips". Beijing Enterprises & Shanghai Industrials had PEs of over 50+. The people in HK were queuing in huge long lines to just grab a stock subscription form for these state-owned companies at the New World Building. Even laggard shares of the grand-daddy of Chinese department stores Wing On skyrocketed when the Kwok family had hinted in putting serious money back into Shanghai's Nanjing Road. At the time, I put a little money in a Chinese shipping conglomerate called China Merchants - the first incorporated company in China dating back to the Qing dynasty. Little did I knew back then that it would take almost a decade of waiting to see that stock reach the same price I purchased just before the onslaught of the Asian Economic Crisis!

I don't know if the indexes of the SSE or SZSE bourses will double or triple in time for the Olympics & beyond. What I do know is that whenever a bunch of "professionals" (including one of my idols - Jimmy Rogers) start fantasizing that we're on a "new paradim" or that "this time it's different", I'm gonna start looking for the exit.

Well I certainly understand about people fantasizing (including one of my idols-Lao Po) about this chinese market being in a "new paradigm" and how you can't compare the current unreal valuations in China to say the NASDAQ in late 1999, however you and I both know that this time is no different than any other bubble. I have been investing since the early 70's and the one thing I have found to be consistant in all that time is that the sheep (despite multiple warnings ) are always most bullish right before the crash, it happens every time and that same mantra "but this time its different" is also used at the top of nearly every bubble I have ever seen. I do admit that there is a lot of very cheap money all around the world these days to keep some of these bubbles inflated a while longer (and this cheap money is usually highly leveraged which means that the downturn will be exagerated), but in the end bubbles do what they do best and that is burst! When the chinese market finally bursts it will likely loose half its value in a very short period of time, and all kidding aside I think that this is likely to happen well before the olympics next summer. When economic historians look back on this "post 9/11" era one of the things that will stand out will be the sheer genious of the weak U.S. dollar, and how the U.S. Treasury dept. was able to achieve this behind the scenes.

VV-In your opinion, how and why will the Chinese bubble burst?

[LaoPo]

Well I certainly understand about people fantasizing (including one of my idols-Lao Po) about this chinese market being in a "new paradigm" and how you can't compare the current unreal valuations in China to say the NASDAQ in late 1999, however you and I both know that this time is no different than any other bubble. I have been investing since the early 70's and the one thing I have found to be consistant in all that time is that the sheep (despite multiple warnings ) are always most bullish right before the crash, it happens every time and that same mantra "but this time its different" is also used at the top of nearly every bubble I have ever seen. I do admit that there is a lot of very cheap money all around the world these days to keep some of these bubbles inflated a while longer (and this cheap money is usually highly leveraged which means that the downturn will be exagerated), but in the end bubbles do what they do best and that is burst! When the chinese market finally bursts it will likely loose half its value in a very short period of time, and all kidding aside I think that this is likely to happen well before the olympics next summer. When economic historians look back on this "post 9/11" era one of the things that will stand out will be the sheer genious of the weak U.S. dollar, and how the U.S. Treasury dept. was able to achieve this behind the scenes.

Thanks for the compliment, VegasVic, but I'm not fantasizing about a new paradigm; I'm a realist and look into the Chinese stockmarkets on a daily basis, online and realtime. I see what's happening....and happened.

I said before it would be healthy if the hype would soften, and it's going that way already.

It's not so dramatic as it looks because 60% of the total of 107,8 million investors are private people (US just 5% private investors) but the money which is in the stock markets is a mere 5% of the total of Chinese private savings.

People who do not pay attention enough [about their stocks] will lose money, yes, but it will not affect the total Chinese economy.

However, the government is doing the utmost to cool down the overheated economy but in such a huge country with 1,3 Billion people it's not so easy.

LaoPo

[bkkandrew]

Back to OP...

Live rates at 2007.07.13 22:37:33 UTC

1.00 GBP = 2.03451 USD

United Kingdom Pounds United States Dollars

1 GBP = 2.03451 USD 1 USD = 0.491520 GBP

1.00 GBP = 62.0178 THB

United Kingdom Pounds Thailand Baht

1 GBP = 62.0178 THB 1 THB = 0.0161244 GBP

1.00 USD = 30.4830 THB

United States Dollars Thailand Baht

1 USD = 30.4830 THB 1 THB = 0.0328052 USD

Friday the 13th!!!

Source: xe.com

[Zpete]

THAI Baht is strong, causing export problems.

Sheeeeeeeesh, New Zealand's biggest whiteware company "Fisher and Paykel" has just closed their washing machine production line, due to the HIGH NZ dollar, US dollar rate. Highest in 25 years.

Gues what, they have relocated overseas, and where??????????.

Thailand...... PMPL.

I was given high 22 Baht for $NZ in March.

BOT rate today..........

NEW ZEALAND DOLLAR = Baht 25.7433 - 25.8358 - 26.2776

Maybe I should relocate too.

Catcherz

Kiwi Pete

Edited July 13, 2007 by Zpete

[VegasVic]

THAI Baht is strong, causing export problems.

Sheeeeeeeesh, New Zealand's biggest whiteware company "Fisher and Paykel" has just closed their washing machine production line, due to the HIGH NZ dollar, US dollar rate. Highest in 25 years.

Gues what, they have relocated overseas, and where??????????.

Thailand...... PMPL.

I was given high 22 Baht for $NZ in March.

BOT rate today..........

NEW ZEALAND DOLLAR = Baht 25.7433 - 25.8358 - 26.2776

Maybe I should relocate too.

Catcherz

Kiwi Pete

This same situation has been playing itself out in Germany, France, Brittan, Austrailia and now in New Zealand, and that is why unemployment is rising and will continue to rise in these countries. It is a simple matter of economics, unless industries are subsidised by the government (as some are in Europe) the strong currency makes it impossible for these companies to compete, so they relocate to China, India, Indonesia, Maylaysia,Thailand, Ecuador, Belize, Costa Rica ect. ect. ect.. The U.S. went through this in the 90's when the dollar was much stronger and unemployment was much higher. Now the dollar is weak in the U.S. and unemployment is basically non existant. Once again the folks that think a strong currency is a good thing just don't get it, if the Thai baht continues its rise then Thailand will find itself in the same perdicament as these other countries and will also be a net exporter of jobs. The sad thing for the citizens of the countries that are losing these jobs is that this is not a temporary loss, these jobs are gone for ever. Econ 101 guys, it just doesn't get much more basic than this!

[palm]

THAI Baht is strong, causing export problems.

Sheeeeeeeesh, New Zealand's biggest whiteware company "Fisher and Paykel" has just closed their washing machine production line, due to the HIGH NZ dollar, US dollar rate. Highest in 25 years.

Gues what, they have relocated overseas, and where??????????.

Thailand...... PMPL.

I was given high 22 Baht for $NZ in March.

BOT rate today..........

NEW ZEALAND DOLLAR = Baht 25.7433 - 25.8358 - 26.2776

Maybe I should relocate too.

Catcherz

Kiwi Pete

This same situation has been playing itself out in Germany, France, Brittan, Austrailia and now in New Zealand, and that is why unemployment is rising and will continue to rise in these countries. It is a simple matter of economics, unless industries are subsidised by the government (as some are in Europe) the strong currency makes it impossible for these companies to compete, so they relocate to China, India, Indonesia, Maylaysia,Thailand, Ecuador, Belize, Costa Rica ect. ect. ect.. The U.S. went through this in the 90's when the dollar was much stronger and unemployment was much higher. Now the dollar is weak in the U.S. and unemployment is basically non existant. Once again the folks that think a strong currency is a good thing just don't get it, if the Thai baht continues its rise then Thailand will find itself in the same perdicament as these other countries and will also be a net exporter of jobs. The sad thing for the citizens of the countries that are losing these jobs is that this is not a temporary loss, these jobs are gone for ever. Econ 101 guys, it just doesn't get much more basic than this!

>>Unemployment rising in Britain??? (or is your spelling Brittan some made-up fantasyland)

>>Companies moving manufacturing operations to Belize??

>.Once again the folks that think a strong currency is a good thing just don't get it

Where do you get your fuzzyfacts from?