Here's What The Stragee-gerists Don't Tell You About Emerging Markets

Just a quick post I couldn't resist. Thailand's stock exchange crashed a few days ago. Well, I guess it wasn't a crash if you don't consider an equivalent one day loss on the Dow of nearly 2000 points a crash. The problem? Thailand's government tried to institute controls to keep its currency from appreciating. (They later recanted and said they were just kidding.) Remember, most emerging markets need and want a weak currency to support export growth. That way they keep their citizens from becoming restless and keep attempted coups to a minimum. You see, that way they don't need to worry about domestic reform. Not that Thailand needs any domestic reforms. I guess that Thailand coup de' etat earlier this year was just another day at the office. Pete said, "Hey John, what's new today?". John replies, "Oh, nothing. The government fell by force and we have a new leader." To which Pete replies, "Where do you want to go for lunch?".

At this phase of the expansionary cycle, it wouldn't be unusual to see more messy situations develop. Wanna buy a Baht? Not really. Wouldn't you rather own dollars? "Argh!", says the dollar bear.

Now, all of this brings up an interesting side bar discussion. From what I read, Thailand's entire stock exchange appears to have a market capitalization similar to Google's. I've mentioned before that Google's market cap is higher than many country's GDP. So, let's ponder deep thoughts with Jack Handy. If you were sitting on $150 billion in cash, would you rather own Google or would you rather own every public company in the world's 21st ranked economy of $600 billion? Well, that's really difficult, isn't it. People who say Google is fairly valued don't live on the same sanity plane I do. Maybe in the roaring 90's it was fairly valued until it would be no longer fairly valued in 2000. But today? Let me drain my savings and put it all in Google. Puuuhhleeeaasse!