It's enough to make Aussie cockies cry into their beer. While Australia suffers a debilitating drought, the effects of which have already been estimated to reduce economic growth this year significantly, Bangkok this morning was in chaos as flooding inundated low lying areas in central and outlying areas.

As per government warnings, floodwaters that have already flooded rural areas were due to run off into Bangkok at this time, and this first flood (which seems to be receding around noon at least in my part of town), has brought out the sand bags in downtown Sukhumvit 22. It was a circuitous route I had to ply to my paper shop and Vila supermarket this morning. Let's just say, a canoe would have come in handy...

Expect many missed appointments in Bangkok today...

Old political wine in new bottles: Thai PM Thaksin Shinawatra shuffled his cabinet last week, and the response has been ho-hum. To be fair, Thaksin's Thai Rak Thai party shook-up traditional Thai politics in it's few years of existence. In the first general election it contested, it decimated the ruling Democrats with a hastily populated team recruited from Democrat opposition parties (the same group that led Thailand into financial turmoil just a few years ago), seasoned with a masterful mix of spin, money, and a tiny sprinkling of new blood.

The new cabinet, according to many Thais however, is based on far less ground-breaking principles. Thaksin himself has admitted that the cabinet is "the best he can do". The key principle seems to be the repaying of favours to "king makers" and Thaksin associates, based on options far too limited for a ruling government that was given the biggest mandate of recent Thai political history. Suddenly, everything that is new is old again, in Thaksin's new Thailand... Thaksin must eventually pay the "recruitment fee" to the power bases of old power élites from old political power bases in East and North Thailand, and it's just now that this is becoming apparent. ...Inevitably, rebottling old wine in new bottles leads to some sorry hangovers...

The smarties in Singapore have always been good at contingency analysis. Last night, a friend of the Rat passed on info from 2 high ranking Singapore government types that they have already calculated the impact of a war in Iraq on Singapore economic growth... and it's .06%.

As documented in numerous columns and analysis in the Asian Business Strategy and Street Intelligence Ezine, Asian economies and stock markets significantly outperformed all other regions in the first half of this year. However the third quarter has not been so kind. Only in the last quarter did the blood letting in the US and Europe start to have a major effect on Asia as export markets in the West extended their "wobbliness". No doubt if this continues, the darling of international marketers at the moment - China - will be affected as new and planned export-oriented manufacturing bases are re-evaluated in the light of medium term international industrial and consumer demand growth prospects. Substantial domestic consumer demand however will mean that ventures dependent on that will be less affected and lessen the hit for China.

There are bright spots in Asia. Penang, the Malaysian tourist island turned factory due to investments in the electronics industry in the past couple of decades, has seem some massive new development projects signed off recently. Their competitive advantage? Labour rates that have been kept relatively competitive and a substantial electronics manufacturing workforce with high levels of skill and training due to a longer history than other newer manufacturing centres.