The Fed has signalled three interest rate cuts in 2024, equities markets rallied sending the S&P to a record high, wheee, finally!

USD fell significantly to 102, expect THB to strengthen at the open.

Foreign investors sold the Thai SET in advance of Jerome's announcement sending the SET into a bear market, the smart money headed to Wall Street.

Merry Xmas!

And it did give some support too! USD went down to 101 but the BOE made no mention of rate cuts until one year hence, that means the UK interest rates will be the go to place. GBP/THB would otherwise have fallen but instead finished up. The BOE Gov finally did something useful, tosspot that he is.

At least nobody's voting for a cut, that's the good news.

Aging population and low birth rate =

www.bangkokpost.com/business/general/2706564/thailand-faces-20-years-of-low-growth

This is much less of an issue for Asian tourists but its a real problem for Western long haul tourists, which I think will see decline. The Baht implications? Western tourists spend more per person, 50k per visit vs 42k for Asians, allegedly.


Why holidays in the may soon be a thing of the past
Amid ‘flight shaming’ and climate catastrophe, long-haul flights are falling from favour and our lust for sunshine is apparently waning too

Rising sea levels pose an existential threat to low-lying islands like the Bahamas
The holiday is over – at least, it will be by 2050. Amid environmental catastrophes, ethical quandaries and economic turmoil, travel as we know it is “on the brink of extinction” – and if its trajectory continues, holidaymakers will be forced to embrace “virtual vacations” instead.

So begins a searing new report on the future of travel, published by leading adventure travel company Intrepid and foresight consultancy The Future Laboratory. It pulls no punches, citing climate data from NASA and the World Meteorological Organisation, hard examples of overtourism – Venice, Barcelona, Bali et al – and bleak tales aplenty from tourism’s front line.

Overtourism is a big issue in Venice CREDIT: Getty
By 2050, it says, low-lying islands such as the Maldives and Bahamas could become uninhabitable; by that same year, the Dead Sea’s popular spa resorts will overlook a dried-up crater. The likes of Miami, New Orleans and Bangkok are already threatened by rising oceans which, according to the US Global Change Research Programme, are set to swell “by a further 20-30cm” by 2050.

The dystopian thesis continues: last year, the island nation of Tuvalu announced that it would be the first “digitised nation in the metaverse”, creating VR versions of its landscapes and cultural rituals enabling people to “visit” if it is swallowed by rising tides. “The metaverse will be the only route to engage with places rendered inhospitable [by] climate change, where people will be able to interact with former iterations of these destinations,” predicts Intrepid, chillingly.

“The [travel] industry is faced with two potential roads ahead,” states Dr Susanne Etti, Intrepid’s global environmental impact manager, who was named a “climate pioneer” in this year’s BBC 100 Women – its annual list of inspiring and influential women.

“One where climate breakdown and tourism restrictions curb the pursuit of wanderlust, and one where regenerative breakthroughs change the future of travel – and the world – for the better.”

The island nation Tuvalu is creating VR versions of its landscapes in case they become destroyed by climate change CREDIT: Getty
Because yes, travel is an undeniable force for good, a global $7.71 trillion (£6.07 trillion) industry that bolsters whole economies, unshackles innovation and oils the wheels of diplomacy. But not all holidays are created equal – and when the talk turns to climate change, winter sun getaways are standing awkwardly in the corner, eyeing up the door. Sure, flying halfway across the world to flop on a beach can put the spring into your step, but is it “regenerative” in Intrepid’s sense?

By its very nature, this type of trip is frivolous and indulgent – not a do-gooder. So, though it has long been something to aspire to, will long-haul winter sun lose its lustre in the coming decades?

Entirely likely, says Douglas Quinby, CEO and co-founder of travel company Arival. “Two in three [young] Gen-Z and Millennial travellers are already making [holiday] choices based on the impact the activity has on the environment and local community,” he states. This message is echoed loudly across the industry, with the likes of Amex, Hilton and Marriott Bonvoy returning similar conclusions from their own recent research.

Gen Z, those currently aged between 11 and 26, are already pouring scorn on their elders’ holiday choices. In a Telegraph Travel panel earlier this month, under-30s branded all-inclusive holidays “depressing, lazy and narrow-minded” – but the next generation, known as Alpha (born between 2010 and 2025), may have even stronger opinions.

“By 2040, it will be unusual to see members of Generation Alpha without a carbon footprint tracker on their smartphones,” Intrepid muses. “Every Uber ride, plane journey and trip to the supermarket will be logged in their devices, noting their carbon footprint in real time.”

Before Covid-19 temporarily clipped our wings, one in five travellers were flying less due to “flight shaming”, according to a 2019 study by the Swiss bank UBS. Of 6,000 western travellers, around 20 per cent said that being “called out” for travelling by air was keeping them grounded – a trend that, UBS warned, could halve air passenger growth.

The pandemic derailed that of course, but the travel industry is bouncing back strong (in October, over seven million people travelled through Heathrow, more than in October 2019) – and shame is back in the discourse. “Flight Shaming Will Return In 2023”, predicted Forbes this year, and it wasn’t wrong: in May, France banned domestic flights where the journey could be taken by rail, and earlier this month Spain set out plans to do the same.

With the summer seeing vast areas of Europe devastated by forest fires, travellers may pick cooler destinations for their next holiday CREDIT: Getty
Our lust for sunshine may be waning, too. After a summer of extreme temperatures across Europe, which saw vast areas of Greece, Spain, Italy and southern France devastated by forest fires and drought, climate change is already affecting how we choose our holidays. Two in five Britons (43 per cent) say that as future temperatures rise in the UK, they will use holidays to “cool down” in colder destinations, according to a new report by Booking.com.

Moreover, almost half of us (42 per cent) say that climate change has already influenced our trip plans for 2024; “heat has officially had its holiday heyday”, quips Booking.com. Whether by trend or necessity, our pursuit of winter sun may, in fact, end far sooner than 2050.

Today's Post giving China another kicking based on similar figures.
Seems like all doom and gloom for them too.

Happy New Year!

For my first look at economics this year, I present, a sailing analogy:

The captain is stood on the bow looking ahead, his ship is making fair progress and the waters are calm enough. It wasn’t supposed to be this way, all the forecasts were for choppy waters and squalls, he’s mildly surprised. Earlier, on land, some had suggested storms, perhaps even powerful ones, but barometers, wind direction and temperature can only yield so many clues to the way things will actually be, on the day.

Looking towards the horizon, the sky is dark, almost black in some areas and it seems to stretch as far as the eye can see. But the horizon is five miles away and it will take time to get there. He’d been at sea for long enough to understand that storms can suddenly change direction, sometimes they can fade into nothing just as fast as they appeared. Maybe, just maybe, by the time the ship gets there it will be plain sailing. But the captain is no fool, he’s long enough in the tooth to understand that storm cells can form, even one mile hence and these can be powerful enough to swamp his ship and sink it, unless everyone remains vigilant.

What to do, hoist all sails and make the most speed possible? This runs the risk of having to take them down suddenly as the weather changes without warning and what if he can’t do it fast enough? No, as long as the horizon looks black he’ll remain at one third sails. Only when he sees fair skies will he hoist all sails and break out the rum. His first mate thinks he's a pussy, but that's why he's been a first mate for the past twenty years and his last boat is still being repaired after being blown onto rocks and nearly sunk, for the fifth time!

About those storm clouds:

US Equities Markets

Are over valued by between 32% and 50%

www.estimite.com/post/is-the-us-stock-market-overvalued/

US Debt

Government debt is the highest it’s ever been, USD 34 trillion, and climbing faster than it ever has.
www.pgpf.org/national-debt-clock#:~:text=The%20%2433%20trillion%20gross%20federal,that%20it%20owes%20to%20itself.

The Yield Curve

Is inverted. The 10 year and 3 month spread is a key recession indicator, it represents the relationship between long-term bonds and what’s often considered the risk-free interest rate. In late October, the 10 year-3 month spread turned negative for the first time since February 2020. It is now almost twice as negative as the 10-2 year spread.

get.ycharts.com/resources/blog/inverted-yield-curve-what-it-means-and-how-to-navigate-it/#:~:text=An%20inverted%20yield%20curve%20is,more%20than%20shorter%2Dterm%20ones.

Inflation

The war hasn’t been won yet and the need to reduce rates to stimulate economies is at odds with winning that war.
www.imf.org/external/datamapper/PCPIPCH@WEO/ECU

The Good News

Despite US markets representing 50% of the investable world, other markets offer opportunities and rays of light, contagion notwithstanding.