Dan Feidt's log on Minnesota, Information Operations, spinstorms and latent contradictions.
Rumors that the King overthrew the civilian government on CNN. Military seizes control of the capital while the Prime Minister is in New York to speak at the United Nations. Too much shit going on at UN headquarters today!
I liked this story because it's focused right on the money, which, as in most things, is the real interesting dimension to follow....
Bloomberg: Thai Baht Falls Most Since 2002 as Premier Declares Emergency By Aaron PanPosted by HongPong at September 19, 2006 02:02 PMSept. 19 (Bloomberg) -- The Thai baht fell the most in four years after the military seized control of Bangkok and Prime Minister Thaksin Shinawatra declared a state of emergency.
The currency dropped as tanks rolled into the capital and Thaksin fired the head of the army in a broadcast on state television that he made from New York where he is attending meetings at the United Nations. Thai bonds and a New York-traded fund of the nation's stocks declined.
``The baht will come under more pressure,'' said Marios Maratheftis, a currency strategist at Standard Chartered Plc in London.
The baht fell 1.3 percent to 37.79 per dollar at 2 p.m. in New York, from 37.29 late yesterday, the biggest decline since July 2002. Before the announcement the baht had been trading at its highest since 2000.
Shares of mutual funds that invest in Thailand dropped in U.S. trading. Thai Fund Inc. fell 3.8 percent to $8.35 as of 1:45 p.m. in New York after tumbling as much as 7.1 percent earlier. Thai Capital Fund Inc. lost 4.3 percent to $9.71.
The risk of owning Thai government bonds jumped to a two- year high, according to traders betting on the creditworthiness of countries in the credit-default swaps market.
The price of the contracts rose to more than $47,000 from $33,000 today, according to HSBC Holdings Plc. The contracts, which pay investors $10 million in exchange for the bonds should the government default in the next five years.
Yield premiums on Thailand's 7.75 percent bond due in April 2007 compared with benchmark Treasuries rose 2 basis points to 60 basis points, the highest in a month, HSBC prices show.
Tanks in the Streets
Thailand's military announced the coup after deploying tanks and troop carriers in downtown Bangkok. Two tanks blocked the main entrance to Government House, where Thaksin's offices are located and three more parked outside the United Nations building.
Coup leaders said they revoked the constitution, imposed martial law and appointed a new prime minister.
Army Chief Sondhi Boonyarataklin had earlier dismissed speculation of a possible coup and a defense spokesman said Thai military leaders had pledged not to interfere in politics, the Bangkok Post reported on Sept. 14.
Investors said the coup was unlikely to trigger declines in emerging market securities as Thailand's devaluation did in 1997. That event prompted bonds, stocks and currencies from South Korea to Indonesia to tumble.
``For now I don't see the risk of contagion or anything like that,'' said Luis Costa, an emerging markets strategist at ING Bank NV in London. ``This doesn't affect the fundamentals in emerging market debt.''
Currency Gains
The baht is still up 8.6 percent against the dollar so far this year, beating the Indonesian rupiah for the biggest advance among Asian currencies as record exports spurred a trade surplus.
``We don't have financial contagion of the irrational type anymore,'' said Jerome Booth, who helps manage $23 billion in emerging-market debt at Ashmore Investment Management in London. ``Emerging markets are dominated now by long institutional investors like pension funds and there is no massive short squeezing where problems occur.''
Thailand reported a $309 million current account surplus in July, following an excess of $65 million in the previous month, the central bank reported Aug. 31. Exports climbed to a record. For the full year, the country may post a current-account excess of $3.6 billion, or 1.8 percent of gross domestic product, according to Credit Suisse forecasts.
``It's going to be quite localized,'' said James Barrineau, an asset manager at Alliance Bernstein in New York who helps manage $9 billion in emerging-market bonds.