Writes Adam Carr of ICAP, an Austalian brokerage:
China worries are overdone and without something to support them, they will die out. Major Chinese export markets have bounced backed and there is still, as I highlighted many months ago, a long way to run on the domestic development. Actions by Chinese authorities are less about slowing growth and more about absorbing excess liquidity. Seeing the Shanghai composite off 20% over the last month shows us these actions are working. But the growth story remains intact. Indeed the actions by the Chinese government make it more likely a sustainable recovery is underway.
Don’t get confused by stories of excess capacity either – when you’re an economy growing at 10% or more that excess is easily filled. So with growth data still showing a robust recovery underway, China pessimism is very easy to dismiss.
From cousin Simon in Bangkok (Monday):
Central BKK ( where the red shirts are camped out) is now cut off, the skytrain, and subway trains are no longer stopping there. If my dental appointment had been today I wouldn’t have been able to get to it. From the TV pictures it resembles a war zone, more like Kabul or Beirut or somewhere, running battles between the troops and protesters, burning buses and rubber tires,and shocking pictures of soldiers firing their guns through the railings of our dragon park (poor old dragons, not fair on them I think!).
A lot of schools, colleges here were due to open tomorrow, but now can’t because of the violence. However, Rainbow’s school is not affected and she’s been going every day. [In-laws] Pook and Yut would be unable to come to see us because so many of the roads are now blocked and out of bounds. This afternoon I took a bus a few stops down from the supermarket, and from a sky walk was able to look down at one of the roads that’s been cut off by the red shirts (May would kill me if she knew I’d ventured that far!!) At the far end there were burning tires in the middle of the road, during lunch today from our sitting room window we could see a huge column of black smoke probably also from burning tires.
There has been less violence and shooting on the streets today, but still no sign of an end to it. The government has apparently now changed its mind about imposing a curfew in Bangkok, but introduced a state of emergency in 5 more provinces in the north. [Our friend] Adrian who returns here from Ireland tomorrow, lives almost next to the main red shirt encampment, he’s been phoning me the last few days to get up to date news, May thinks I should have advised him to delay his return for a few days, so I’m now feeling bad that I didn’t! However, he’s aware of the violence and shooting, and will have seen the dramatic pictures (as you have) on TV. Also I think he was here when the red shirts first camped out near his apartment.
Sorry to go on and on! The govt have given a deadline of 3.pm today for the elderly and children to move out of the camps. The soldiers will then move in and try to clear the camps. If there’s a confrontation between soldiers and hard-line red shirts it could surely result in a bloodbath. My fear is that IF that happens the millions of red shirt supporters in other parts of the country might rise up in anger, and there’ll be real civil war– hopefully just a bad dream in my head!
Simon’s worries seem to be shared by the government which is aiming to again schedule the elections the red shirts are demanding. One of my readers in Thailand called my cousin a red shirt sympathizer; he is not. His wife May is firmly for the yellow shirts, but he does think for himself. And not being in specialized retailing he is closer to real trends in sales and tourism in Bangkok than some investment pros.
No newsletter tomorrow because of the Jewish Pentecost holiday. My daughter-in-law has flown to London via Shannon, Ireland, and by now is at her conference in Nottingham. Her plane was delayed taking off from Boston not by strike or volcanic ash, but because on of the booked in passengers failed to get on the plane, causing a security alert. She flew Aer Lingus, not BA, perhaps because her PhD program is at Boston College, with links to the Auld Sod.
More for paid subscribers from England, Switzerland, Rwanda, Uganda, Israel, and France follows. Rwanda and Uganda for real. Read on.
