Forum Archive Index - February 2003

[Robin Benson <rob@hammerheadmedia.co.uk>]

Hi Jefley

You make some interesting points ... might I add a few ...

The current lot in Pakistan is there as the result of a coup, and know 
that it's in their interests to restrict popular democracy as much as 
possible. Coincidentally, given the current general attitude in 
Pakistan, this happens to align quite nicely with the economic and 
strategic interests of the West. I'm more concerned about North Korea, 
but even then, that looks like a game of hardball between North Korea 
and everybody else to me.

I think the White House does realise a lot more than they appear to. 
They also understand that in "democracies" like the UK, people marching 
for peace or holding anti-war views is one thing, but when it actually 
comes to the crunch and voting against a government, other issues seem 
to become more important.

Here in the UK, the housing market is well up. Some areas are slowing 
down, with prices steady or even falling slightly (especially in the 
south-east). Other areas are still moving higher. It appears that a lot 
of money has moved out of equities and into property in the past few 
years, but it appears that this trend has slowed significantly. Of 
course, for the last two years, Brits have agonised over whether the 
property market here will crash again, or whether the price rises can 
be sustained as long as they level off. Of course, you can find 
"professional" advisers on both sides of the coin, swearing that they 
know best. Unemployment in the UK just dropped to a record low. 
However, so did manufacturing output, with quite a surprising (for 
many) move this month by the Bank of England monetary committee 
lowering the base-rate of lending 0.25% to 3.75%. I don't think the 
current state of equities in the UK, and the economy as a whole, have 
too much to do with Middle Eastern money flowing out of the UK. OK, 
I'll get to the point :O) ... there are bigger forces at work.

And what about the NZ dollar? If you take profits now, or in a surge 
just following a successful military campaign, would you be keeping 
your capital in NZ$, or do you think other currencies offer more 
stability (or upside)? The A$ is said by some to be quite a bit 
undervalued in general.

Best wishes

Robin

On Thursday, Feb 20, 2003, at 20:57 Europe/London, Jefley Aitken wrote:

> Hello Michael and Robin
> The idea of cashing up at least something is a good one in face of US
> invasion/bombing threats, imho.  But I don't think the war will be the
> major factor in market drops -- there has traditionally been a fairly 
> quick
> recovery after the onset of war.
>
> But the reactions of Islamic fanatics will cause major chaos if even 
> small
> individual terrorist strikes occur in the US.  The White House doesn't 
> seem
> to realise that its plans are considered unjustified by many (was it 
> 70% of
> NZers?) in the West, and that if terrorism is an issue, they are 
> barking up
> the wrong tree -- which must totally infuriate most Arabs/Moslems.
>
> I reckon Pakistan with its boasted about nuclear arsenal is extremely
> unstable, the current government thoroughly unloved, and the 
> possibility of
> a coup/civil war quite likely when its extremely numerous anti-US
> fundamentalists react against the war.  The US has a record of getting
> involved and being unable to extricate itself in a timely manner with 
> the
> job well concluded.  Dragged out conflicts are not good for markets, 
> except
> for stocks directly relevant to the war effort.
>
> Further, the US /UK markets have not been thriving lately.  I don't 
> know
> whether this is because of their own mismanagement and transgressions, 
> or
> whether Arab/Islamic money is being pulled out.  Either way, a little
> judicious profit-taking/cash accumulating seems a good thing.
>
> Should all turn to custard, you'll have money on hand to take new
> opportunities, and if the US backs off and no sharp drops are prompted,
> you'll have had some easier sleeps knowing that your capital is safe 
> (ish).
>
> All imho, Jefley.


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