UK Pound Collapse 47.99 against the Baht

[chiang mai]

Hmmm, let me guess, Miliband takes over, Clegg agrees, CM has to make a sudden business trip to, well, anywhere really!

Edit: PS: just read the anouncement that Brown will make a statement at 12:40 GMT followed by, "sources confirm that he will not be resigning", phew.

Edited May 7, 2010 by chiang mai

[roamer]

Gordon Brown is speaking now, offering immediate legislation on electoral reform. That is it. I think that's the one thing that the Conservatives cannot offer, not least because there are lots of entrenched Conservative MPs that could be big losers under any form of proportional representation. I also think that there are a lot of Liberal Democrat MPs, that would be immensely unhappy at the prospect of climbing into bed with the Conservatives. Still all to play for.

Correction.not immediate legislation on electoral reform, but a referendum, that's a huge carrot to dangle.

Edited May 7, 2010 by roamer

[Gambles]

Yes, as it unfolds, it seems that it's not so much the baht is strong as the others extremely weak, the Euro in particular appears to be nosediving. According to the figures, tourism is relatively small beer, and yes exports to the west will be trashed, but perhaps Thailand sees China, Japan, and the Asean countries as more than offsetting this problem.

Quite!

Edited May 7, 2010 by Gambles

[Gambles]

the sterling will remain strong and the dollar will fall along with the euro, the thai baht will be revalued lower within the next 6 months

You've given me some great ideas for shorts - have you got any stock or sector recs too ??

[Gambles]

From yesterday's Nation (I'm fully expecting to need to put my tin helmet on....)

ECONOMICS AND POLITICS: A MARRIAGE MADE IN hel_l PAUL GAMBLES SPECIAL TO THE NATION

I NEVER talk about politics because I try to limit myself to rational topics of which I have some understanding. In the past I’ve only ever commented on politics or politicians when they’ve impinged on my chosen field of economics. Sadly this seems to happen more and more frequently. I prefer the old-fashioned idea that economics was something which existed very much outside the political realm. The spectre of politicians getting involved in fiscal and monetary policy is a bizarre nightmare that haunted much of the 20th century but happily, independent central banks have in many cases now once again attained some level of independent power and responsibility.

In particular, I never comment on Thai politics because I really don’t feel qualified to add anything to the debate, having only lived here for 16 years. But I do recognise that Thailand might fail to capitalise on the opportunities presenting themselves to Asian investment markets if political risk continues to affect the country’s economy.

Last week, Scott Campbell, CEO MitonOptimal Guernsey, MBMG Group’s S&P award-winning affiliated portfolio manager, spoke to investors here in Bangkok about the great divergence between Western markets which in many cases are still significantly below the levels of 10 years ago, and regional stocks which have increased three-to-fourfold since the Asian crisis. Local valuations remain reasonable and a number of structural factors, such as the growth in domestic consumption and markets, the rapid expansion of intra-regional trade, and favourable demographics, will continue to offer an advantage to the East over the West, and to developing markets rather than developed markets for perhaps the next 30 to 40 years. Asian population distribution looks similar to that of the United States in the Baby Boom era:

“The region is exporting within itself. This has shown that Asia is much less dependent on the West which is very positive. ... An economy that has a higher proportion of population in younger age groups is in much better shape than economies that have an ageing population. India, for example, will progress through the baby boom stage and isn’t projected to reach the top heavy state that is now starting to impact on the growth of the US today until 2050. In long term trends this theme is very supportive of emerging markets’ growth for another 40 years or so.”

Scott Campbell also noted that other shifts have occurred from West to East:

“In the past, a high-risk portfolio was emerging market bonds, Japanese equities and developing market property. At the same time a low-risk one contained US government bonds, German blue-chip companies and UK property. Now, the situation is completely reversed.”

Asian commercial property is particularly attractive with low gearing ratios and good yield carry in many cases, unlike western commercial property markets where higher leverage and low or negative real yields make asset prices extremely vulnerable. While Thailand’s economic fundamentals are attractive, political risk is currently a major obstacle. Scott highlighted the relative underperformance of the baht during a period which has seen a significant rebound in Asean currencies (other than the Vietnamese Dong):

“Currency is a barometer of political risk and the baht has been pretty much flat since last year [on a trade-weighted basis] ... If the political risk gets sorted out, then you may see the baht appreciate just to catch up with the other regional currencies which it has lagged during this time.”

Long term observers such as Dr Mark Mobius have noted that Thailand started to under-perform in 2004, when political tensions first began to affect the economy. If so, it may well account for much of the relative under-performance identified in research by John Sheehan of Global Market Asia which shows that Thailand’s economy has significantly lagged over the last few years in terms of economic growth rates, FX rates and stock market valuations relative to those Asean neighbours which have not only caught up with but have overtaken Thailand. If you take the superior GDP growth rate of the Philippines and apply this higher rate to Thailand’s growth from 2005, it can be seen that by the end of 2008 Thailand’s GDP would have been somewhere between US$30 billion and $40 billion (Bt970 billion-Bt1.29 trillion) higher than it actually was. Hopefully the political stalemate in Thailand is closer to a resolution, and any under-valuation that this has caused in local assets and/or currency now represents a buying opportunity.

OVER IN THE UK…

All three candidates in this week’s UK election are fighting hard over the middle ground, and that should be comforting news. However, having so little to choose between them makes us glad we don’t follow politics. Alexis De Tocqueville said that in a democracy we get the government we deserve. You might feel that this is a harsh way to look at the choices facing voters in Thailand and the UK where politics seem to have descended into Hobson’s choice (ie, no choice at all). In both cases the incumbent Prime Ministers may have a lot going against them, but a widespread view is that maybe they have limitations as politicians just because they’re decent, honest and sincere people. Maybe the depressing, universal truth is that good people make bad politicians and vice versa.

Whether in Thailand or the UK, let’s just hope that not only is De Tocqueville right but also that our karma yields good political results and I can go back to fretting about what I know best – the less tangled web of the investment world ... did anyone see the Goldman hearings last week?

[tw25rw]

Indeed. And I'm sure that unlike the politico's we will stick with it. Brown just hinting he is prepared to step down.

Would it be possible to have anothe Lib-Lab pact with Clegg as PM? Hard to see a Con-Lib pact working and Brown doesn't have an obvious successor. Brown has to go and it's only he that doesn't see it as his survival instincts are so strong.

[thaibeachlovers]

Indeed. And I'm sure that unlike the politico's we will stick with it. Brown just hinting he is prepared to step down.

Would it be possible to have anothe Lib-Lab pact with Clegg as PM? Hard to see a Con-Lib pact working and Brown doesn't have an obvious successor. Brown has to go and it's only he that doesn't see it as his survival instincts are so strong.

Having suffered his economic mismanagement for 10 years, I think I can safely say Brown is the problem. Whenever he came on tv saying he had a plan to save the economy I felt like puking! Gordon, you caused the problem!

Also, people just DON'T LIKE him.

I know a couple of labour polies have gone public saying he should stand down, but I bet there's a lot more saying that in private.

His desperation to stay in power is becoming a sick joke. How he can stay on knowing that the public have given him the boot, I just don't know.

[mommysboy]

Indeed. And I'm sure that unlike the politico's we will stick with it. Brown just hinting he is prepared to step down.

Would it be possible to have anothe Lib-Lab pact with Clegg as PM? Hard to see a Con-Lib pact working and Brown doesn't have an obvious successor. Brown has to go and it's only he that doesn't see it as his survival instincts are so strong.

Having suffered his economic mismanagement for 10 years, I think I can safely say Brown is the problem. Whenever he came on tv saying he had a plan to save the economy I felt like puking! Gordon, you caused the problem!

Also, people just DON'T LIKE him.

I know a couple of labour polies have gone public saying he should stand down, but I bet there's a lot more saying that in private.

His desperation to stay in power is becoming a sick joke. How he can stay on knowing that the public have given him the boot, I just don't know.

It is a bit puzzling, but a real stalemate. I'm not happy that the Tories couldn't win a majortity, what does that say of their calibre ?, and I'm certainly unhappy with the absolute losers seemingly holding the country to ransom. That's why he's still there!

I don't blame Brown as you do, and in all honesty you sound rather immature on this one, really! all his fault is it?

Regrettably, he must go. But there goes the only true statesman and political heavyweight we currently have, and many would say he's doing a good job in the crisis.

[ChiangMaiFun]

Indeed. And I'm sure that unlike the politico's we will stick with it. Brown just hinting he is prepared to step down.

Would it be possible to have anothe Lib-Lab pact with Clegg as PM? Hard to see a Con-Lib pact working and Brown doesn't have an obvious successor. Brown has to go and it's only he that doesn't see it as his survival instincts are so strong.

Having suffered his economic mismanagement for 10 years, I think I can safely say Brown is the problem. Whenever he came on tv saying he had a plan to save the economy I felt like puking! Gordon, you caused the problem!

Also, people just DON'T LIKE him.

I know a couple of labour polies have gone public saying he should stand down, but I bet there's a lot more saying that in private.

His desperation to stay in power is becoming a sick joke. How he can stay on knowing that the public have given him the boot, I just don't know.

It is a bit puzzling, but a real stalemate. I'm not happy that the Tories couldn't win a majortity, what does that say of their calibre ?, and I'm certainly unhappy with the absolute losers seemingly holding the country to ransom. That's why he's still there!

I don't blame Brown as you do, and in all honesty you sound rather immature on this one, really! all his fault is it?

Regrettably, he must go. But there goes the only true statesman and political heavyweight we currently have, and many would say he's doing a good job in the crisis.

That's not true - Ken Clark, in my view, would make an excellent PM and is, indeed, a 'heavy weight'

[yoshiwara]

That's not true - Ken Clark, in my view, would make an excellent PM and is, indeed, a 'heavy weight'

A complete non-starter. Too old and completely isolated on the pro-Euro wing of the Tory party.

Useful only as respectable ballast and counter-weight to the idiot George Osborne.

[ChiangMaiFun]

That's not true - Ken Clark, in my view, would make an excellent PM and is, indeed, a 'heavy weight'

A complete non-starter. Too old and completely isolated on the pro-Euro wing of the Tory party.

Useful only as respectable ballast and counter-weight to the idiot George Osborne.

I know it's a non-starter - but the poster said there were 'no' heavy weights - Ken Clark was the best Leader the Tories never had and an excellent Chancellor - with a bit of luck he might be Chancellor again.

[churchill]

Lib/Lab pact coming ?

[ChiangMaiFun]

Lib/Lab pact coming ?

Maybe now Gordon Browns resigned

[yoshiwara]

Lib/Lab pact coming ?

Maybe now Gordon Browns resigned

The maths are against a Glib-Lab pact.

It only needs a few Lab MPs to vote against STV and the whole lot falls apart immediately.

If the Libs cannot deliver their MPs for a coalition with the Tories, then Tory minority govt. the only viable option

ie the Libs abstain on confidence motion.

...or maybe The Lib Dems should follow the Thai reds example and occupy Brent Cross IKEA until their demands for an STV+ True Democracy demands are met.

[Mobi]

General Election 2010: Pound strengthens as David Cameron's coalition takes charge

The pound broke through the $1.50 mark as David Cameron’s coalition Government took charge, vowing to provide “strong and stable” leadership.

full story:

http://www.telegraph.co.uk/news/election-2...kes-charge.html

[ChiangMaiFun]

General Election 2010: Pound strengthens as David Cameron's coalition takes charge

The pound broke through the $1.50 mark as David Cameron's coalition Government took charge, vowing to provide "strong and stable" leadership.

full story:

http://www.telegraph.co.uk/news/election-2...kes-charge.html

will it get back to 1.60 now there is some stability?

[thaibeachlovers]

Indeed. And I'm sure that unlike the politico's we will stick with it. Brown just hinting he is prepared to step down.

Would it be possible to have anothe Lib-Lab pact with Clegg as PM? Hard to see a Con-Lib pact working and Brown doesn't have an obvious successor. Brown has to go and it's only he that doesn't see it as his survival instincts are so strong.

Having suffered his economic mismanagement for 10 years, I think I can safely say Brown is the problem. Whenever he came on tv saying he had a plan to save the economy I felt like puking! Gordon, you caused the problem!

Also, people just DON'T LIKE him.

I know a couple of labour polies have gone public saying he should stand down, but I bet there's a lot more saying that in private.

His desperation to stay in power is becoming a sick joke. How he can stay on knowing that the public have given him the boot, I just don't know.

It is a bit puzzling, but a real stalemate. I'm not happy that the Tories couldn't win a majortity, what does that say of their calibre ?, and I'm certainly unhappy with the absolute losers seemingly holding the country to ransom. That's why he's still there!

I don't blame Brown as you do, and in all honesty you sound rather immature on this one, really! all his fault is it?

Regrettably, he must go. But there goes the only true statesman and political heavyweight we currently have, and many would say he's doing a good job in the crisis.

Well even he had to admit defeat now. Ding dong brown's gone, hurrah.

Labour probably only stopped the Tories getting a majority because the dependancy class they fostered are terrified they might have to actually go and work, under the Tories.

Yes, it is mainly gordon's fault that the economy went south. He made so many serious mistakes, and if you do some research they are not hard to find. During his time as Chancellor he had total control over economic policy, as Tone was too scared to take him on, so what happened in the UK was his responsibility. The worldwide economic crisis did not cause the UK's economic problems, just exposed them, as stated on the BBC.

During my 10 years in the UK I knew it was all going to end in tears; banks throwing money around, over 100% mortgages, loans to anyone. It was pretty obvious, but gordon loved it being the "big man". In the end though, exposed for the incompetent ( IMO ) he is!

PS, I doubt that the word "statesman" applies to any of the politicians that are currently assembled around the trough.

[churchill]

Lib-Lab / CON !

[phutoie2]

During my 10 years in the UK I knew it was all going to end in tears; banks throwing money around, over 100% mortgages, loans to anyone. It was pretty obvious, but gordon loved it being the "big man". In the end though, exposed for the incompetent ( IMO ) he is!

A touch too harsh me thinks. You cannot blame Gord for the actions of Northern Rock/RBS/LLoyds.

When Lehmans went into tailspin even GWB thanked the dour Scot for "saving the world" ha ha!.

[mommysboy]

During my 10 years in the UK I knew it was all going to end in tears; banks throwing money around, over 100% mortgages, loans to anyone. It was pretty obvious, but gordon loved it being the "big man". In the end though, exposed for the incompetent ( IMO ) he is!

A touch too harsh me thinks. You cannot blame Gord for the actions of Northern Rock/RBS/LLoyds.

When Lehmans went into tailspin even GWB thanked the dour Scot for "saving the world" ha ha!.

He can and does?

By the sound of it he's out for a bit of poor bashing too.

But actually the welfare bill is shocking. Somehow, over the next few years, a government effectively needs to really reduce peoples' standard of living across the board, because in truth there is and never was enough money to pay for the whole show.

Moreover to recover UK needs to compete with some of Europe's lesser lights, it can't do that shackled with high wage bills, and every man and his dog on welfare benefits, and gold clock-tower pension payments.

Glad I'm not there at present!

[phutoie2]

Now that the Brown/Darling show has been terminated; Merv the Swerve (BOE) has been making some interesting comments on the UK deficit.

A thread on the general section has just been closed (not Thai related!), the sub heading was "Sterling to soar now Dave gets the keys to No 10"

Sterling closed last night around the 1.48 Dollar to 1 GBP.

Not ready for take off just yet.

Personally I am looking forward to the Osbourne/Cable scenario with the banks

[ChiangMaiFun]

Now that the Brown/Darling show has been terminated; Merv the Swerve (BOE) has been making some interesting comments on the UK deficit.

A thread on the general section has just been closed (not Thai related!), the sub heading was "Sterling to soar now Dave gets the keys to No 10"

Sterling closed last night around the 1.48 Dollar to 1 GBP.

Not ready for take off just yet.

Personally I am looking forward to the Osbourne/Cable scenario with the banks

so general feeling is UP for sterling? any ideas?

[phutoie2]

so general feeling is UP for sterling? any ideas?

Hmmm, not really, I am suffering financially here just like many Brits, my own austerity measures have been in place for some time now!.

The new goverment have only just taken over but already the new runways at Heathrow/Stansted have been cancelled along with national ID cards. Early days.

Ploughing ceromony now on Thai TV - live, a must watch!, in this house anyway!

[mommysboy]

so general feeling is UP for sterling? any ideas?

Against the Euro- quite probably.

The baht- good chance it will stabilise, may gain a little.

The dollar- same,same.

[roamer]

Now that the Brown/Darling show has been terminated; Merv the Swerve (BOE) has been making some interesting comments on the UK deficit.

A thread on the general section has just been closed (not Thai related!), the sub heading was "Sterling to soar now Dave gets the keys to No 10"

Sterling closed last night around the 1.48 Dollar to 1 GBP.

Not ready for take off just yet.

Personally I am looking forward to the Osbourne/Cable scenario with the banks

so general feeling is UP for sterling? any ideas?

Whilst I was responsible for that now closed post I must point that I did go on to say it was more likely to hop like a pregnant turkey rather than soar!! The post was actually an update on the Con/Lib deal and the heading/sub-heading was designed in a bid to keep it Thailand related and therefore hopefully open.

Possible it may get a bit of a bounce on the rushed budget to come but I still feel sterling/baht rates are more likely to be affected eventually by events in Bangkok than London.

I think the European media, who had a much more cynical reaction to the deal than UK or US media probably got it right. La Stampa. "...a coalition so unusual as to be unnatural " So a relationship more akin to s*d**y than intercourse then.

[GAS]

Looks like the pound is going the way of the Euro...and I think the dollar will soon suffer the same fate!

[FarangryBirds]

The pound climbed a whole baht the day of the Coalition going into power to something around 48.70 but sloped off badly yesterday back to 47.27 baht.

In the words of Jack Bauer - "Damnit!"

[mommysboy]

The pound climbed a whole baht the day of the Coalition going into power to something around 48.70 but sloped off badly yesterday back to 47.27 baht.

In the words of Jack Bauer - "Damnit!"

Merv the Swerv talking it down again, as if it needs much encouragement.

I'm truly shocked to see it dip so much.

If there wasn't a civil war in Thailand, who knows how low it would be.

[MB1]

The pound climbed a whole baht the day of the Coalition going into power to something around 48.70 but sloped off badly yesterday back to 47.27 baht.

In the words of Jack Bauer - "Damnit!"

Merv the Swerv talking it down again, as if it needs much encouragement.

I'm truly shocked to see it dip so much.

If there wasn't a civil war in Thailand, who knows how low it would be.

What civil war?.post a link as proof of civil war or stop posting crap, there's enough of that crap in the political threads..

[yoshiwara]

Looks like the pound is going the way of the Euro...and I think the dollar will soon suffer the same fate!

They can't really all drop against each other ... at the same time

Edited May 14, 2010 by yoshiwara