Korean Job Discussion Forums

[sulperman]

From the Korea Herald.........

Awesome!!!

http://www.koreaherald.co.kr/NEWKHSITE/data/html_dir/2009/09/23/200909230028.asp

[Jack Manworth]

From the article in question:

[xCustomx]

I love this:

[Jack Manworth]

[Epicurus]

this really isn't "news".

I've been buying everything I could last year with my American credit card in dollars, knowing that this year I would be repleneshing those USD accounts with won from here... for less won

maybe Samsung Research should hire me.. that might be an interesting gig actually - maybe I should look into that

(though I will be setting up my own trading account within the next 2 years)

fact is the US dollar is in the midst of a major downleg. I have no idea when it will stop - well actually I know against the Euro it looks like it's headed back toward 1.60.. we're at 1.48 now.

the question with the won is more difficult. I can chart and forecast real major currencies fairly well, the won isn't one of those.

for all the crowing about its "strength" this year, people still forget the only thing crappier than this crappy currency last year was Robert Mugabe's monopoly money in Uganda.
so the question is.. will the won recover more of its still shit in comparison with others exchange rate as the dollar plummets?

or will it gain more slowly than the others?

frankly, I don't know. Thus far it has recovered less. its recovery off its lows has been more impressive but that's merely because its lows were so much worse than anyone else's.

at any rate.. a return to 1100 is almost a given at this point barring something completely unexpected.. or a Kim Jung Il rocket attack.

let's look at some comparative currency rates

euro at peak in 07 was 1.6, now 1.48 - 92.5 of its value (it's actually dollars to euros)

brazilian real was 1.6 to 1 USD at its peak, now 1.8 - 88.9% of its previous values

colombian peso .. 1700 to 1 now 1915 - 88.8%

thai baht - 32.5 to 1 - now 33.6 - 96.7%

indonesian rupiah - 9000 to 1, now 9700 - 92.8%

now.. Korean won

was let's be generous and say 950 to 1... now 1205 to 1.

78.8%

I'm rounding off a bit and using super basic oversimplistic math, but you DO see the picture, don't you???

basically, the won right now is 10% UNDERVALUED compared to where it SHOULD be (where most other currencies are that have rebounded from selloffs)

the only currencies where this also takes place are the Brit Pound, which was preposterously overpriced to begin with and its "economy" based on people selling other people things they didn't need and a housing bubble

hence - 2.08 vs 1.63 = 78.4% - pretty much in line with the won, proving once again how super CRAPPY the won is in the first place.

another one.. Mexican peso - they got whacked with drug violence and swine flu in a major way...

so they're now at 13.3 vs what was I think around 9.7 (don't quite remember) which would make it - 72.9%

not that much behind the won..

the Korean won.

SPARKLING!!!!!!!!


NOT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

(p.s. I'm also sure the govt - aka central bank was intervening in the local fx market the last several days - this is actually fact) to help lessen the won's fall. If it weren't for this intervention the won may have been closer to 1175 or so right now.. if not even 1150 if one were to be super optimistic.

After all, they want to keep their dear chaebol profits as high as they can

[never_easy1]

Last summer the Korean won went from the mid 900s to above 1000 (USD.) The central bank of Korea used its foreign reserve fund to bring it back below 1000. Then all hell broke loose in the global economy and the central bank couldn't keep wasting its reserves to support the won. It rode in a choppy motion and peeked at just over 1600 intraday in March.

The central bank realized two things:

1) Korean exports (TVs, cars, computers, etc.) are now cheaper for western consumers than exports from Japan and China (they are realizing a huge trade advantage)
2) They can make money on the demand for the won. Foreign stock purchases in the Korean stock markets have pushed the KOSPI to 1718 as of September 22nd. The last time the KOSPI was this high was June 20th 2008. On June 20th 2008, the won closed at 1031.

The Korean central bank is smart. In this economic climate it is better to support Korean exporters rather than see the won go to 1000 for the benefit of companies that settle in dollars (shipmakers, military, importers, etc.) Without the intervention of the central bank, the won should be close to that 1031 level right now.

In the end though, the U.S. Dollar will continue to slide. You can't just keep printing more money to solve your problems without ramifications. I think the won will continue to rise for the rest of this year because the central bank can't keeping fighting the fair market value (they will lose money by doing this.)

[Samurai Blur]

[grunden]

[jhuntingtonus]