saengd

You do understand what pandemic means!

1 minute ago, ravip said:

Does the fall of a business sector a reason to rejoice? Or for that matter the difficult situation in a country?It seems there is a more dangerous disease than the Coronavirus spreading around...

Right now I don't think there's anything more dangerous anywhere on the planet for everyone at the same time, experts are now saying the fatality rate is some 15 times higher than normal flu.

14 hours ago, Emdog said:

What orifice did they pull these magic numbers from?

Which part of an 8% drop across the entire sector did you not understand!

18 hours ago, AussieBob18 said:

8%??  Really??  The world's economies are crashing and the stock markets have crashed.  I just love how positive Thais are in the face of bad cirumstances.  Watch for this to be revised upwards - or never mentioned again.  Or are they only talking about the Hyatt restaurants and the Michelin rated ones? Certainly not those at Swampy airport !!

 

 

If you actually read the article in the OP and not just the headline you'll see it refers to the restaurant sector rather than individual restaurants, that means all restaurants on average. Averages are tricky beasts, it means some restaurants will suffer a 100% drop whilst other may suffer no drop at all!

10 hours ago, Iron Tongue said:

It's not over, if you think it's over, perhaps you should find a job working for the TAT.

Aside from China NOT getting back to normal beyond publicity events like Xi's, their factories are still far from getting into full operation as workers have not been convinced to travel back from their homes to the cities, and when they do get back to work, they won't have time for vacation as China is going to push production over leisure. 

Plus, if China is fired-up, why are oil prices going down?  (yeah, yeah Saudis & Russians, but their oil war was originally meant to raise prices)

Plus, covid-19 is at pandemic levels now and has affected the global economy.  Italy is shut down, so is most of South Korea, maybe soon Japan, France and the USA, remainder of EU.

Even if covid-19 ends (12-18 months for vaccine), nobody will have any money nor vacation time left to travel.

Regarding the FOREX market...there's a good all inclusive guide to how the system works here and it's quite comprehensive, if anyone wants to read a bottom up guide, this is a god read: 

https://www.investopedia.com/articles/forex/11/why-trade-forex.asp

The key point to remember with FOREX and Thailand is that the Baht is not fully convertible, it can't be exported as Baht and it can't be stored in any quantity outside Thailand.....THB is a restricted currency and many people don't appreciate this. The implications are that nobody can take a position against THB to force a change in it's value, people can deal in THB offshore but only on account, not for delivery of the actual currency. That means the supply side is strictly controlled, an extremely important consideration. The other consideration is that THB is a very small currency, it doesn't take much to move its value either way. Indeed there are times at the end of the month when US social security checks are cashed, USD is sold and THB is purchased, that the value of the Baht increases slightly before returning to the norm.

48 minutes ago, rickudon said:

Getting back to the original claim of 0.8% growth, that seems totally unrealistic. Tourism is 'about' 12% of GDP (a wide range of figures depending on who gives it!). so if we take that figure then every month tourism represents 1% of annual GDP. But since February, tourism is down 50% (and will probably fall further). So by end of March GDP will already have fallen 1% below annual expectation. Tisco seem to  be assuming that everything will be back to normal by April? Any even half cocked guesstimate will tell you that their will be no significant improvement before the second half of the year, and as Europe and USA will probably be deep into their covid-19 epidemics by then, probably tourism will be even worse. More likely is that tourism will still be well down until the end of the year - so i would say GDP will fall by 5%.  And that's just the effect of covid-19 on tourism, nothing else.

 

Those Tisco experts should be fired immediately!

It might be that Tisco is assuming GDP will fall in value as a result of reduced exports hence the 12% that is Tourism (which I agree) is already 12% of a reduced amount, make sense?

FWIW I think Tourism could recover fairly quickly or at least not be as bad for as long as people think. China is showing signs of recovery already and we're now into low season. By the time high season comes along we could easily see the Chinese tourist segment, the most important to Thai tourist numbers, fully recovered. The other aspect to consider is that the flu seems to have minimal impact on younger people, it's really only the over 50's who are threatened and at significant risk. I can see two quarters of really poor performance but then by September/October it could be BAU once again.

2 minutes ago, Vacuum said:

Who cares, this is Thailand.

Thailand cares because there is an impact on the Thai economy, as the article says:

"During 2015-16, the lowered oil price decreased tourists from Russia and the Middle East in Thailand. Also, the lower price would decrease revenue earnings from exports, as well as from agricultural products".

1 minute ago, Brickbat said:

On the contrary, it’s just a “ discussion” to me. But insults from you both , and hoping the baht stays strong. I suspect you both have invested locally.

socrates said that when arguments are lost, people resort to insults.

and btw, when the household debt bubble bursts, what do you think will happen to the economy? And it’s currency? 

I agree it's just a discussion, hopefully one where everybody can learn something. My apologies if you think I've insulted, that wasn't my intent, I accept I can be direct and sometimes dismissive but not intending to insult.

What happens when the consumer debt bursts.

Non Performing Loans (NPL's) are a guide to the state of consumer lending, NPL's are loans where the consumer is no longer making payments for more than three months (?). Last time I looked NPL's here were just above 3%, BOT reports them across all lenders every month.

The thing with NPL's is the banks in Thailand have very healthy balance sheets and whilst they don't really want to own distressed assets (repo's) they are in a financial position to do so. In a worst case scenario those assets sit on their books for a long time, are depreciated and then sold at a loss later. For NPL's to have an adverse effect on Thai bank s balance sheets they would have to be incredibly high and that has never happened before and seems improbable going forward. 

But assuming the banks did take a hit of an unimaginable propoortion, what sort of impact would that have on GDP or THB? Well I can imagine GDP being lower as a result because it would be indicative of a poorly performing economy but I can't see any reason why there would be a direct impact on the value of THB, why would there be?

2 minutes ago, Hank Gunn said:

Okay, I got to take off for a few hrs. but maybe I'll jump in and explain the differences between fiscal and monetary policy that governments and central banks, respectively use to tweak their economies (unless you want to take that one). ????

 

But I'd love to hear more about FX markets.

Go for it.....I'll see what I can do to oblige. :))

Just now, Hank Gunn said:

You might also explain to people that they are getting confused between private and public debt (i.e. private debt is debt in the private sector: consumer loans, business loans, etc.; whereas public debt is the debt a sovereign nation has in relation to their GDP, often incurred through the sale of govt. bonds and/or through trade deficits/surpluses). Public debt can be okay if it's not too big and is used to spur domestic economic growth.

Feel free to jump in and make whatever contributions and/or clarifications you feel like at any time, I don't have a monopoly on this subject (but it sometimes feels like I do), I can always learn too and am keen to do so. 

24 minutes ago, robblok said:

the guy has no clue what he is talking about. I wonder if he has any economic background. 

We have to be kind. This is a somewhat specialist area that not many people are interested in and even fewer people have knowledge about. The trick is to try and educate as many people as possible and explain these things in a such as way as to make it sound simple and straight forward which is not easy. The more people understand it the more they will be able to make better financial decisions and the less stressful life here will become for them in Thailand. I'm fortunate that I had a great teacher, (thanks Walter), hopefully I can pass some of this stuff along to others.

1 minute ago, Brickbat said:

80% was Tisco’s no. Here’s another

Looking forward, we estimate Households Debt To GDP in Thailand to stand at 76.80 in 12 months time. In the long-term, the ThailandHouseholds Debt To GDP is projected to trend around 76.80 percent of GDP in 2021, according to our econometric models.

https://tradingeconomics.com › hous...

Thailand Households Debt To GDP | 1991-2019 Data | 2020-2022 ...

Yes agreed. But consumer or household debt is a very different beast to government debt. Consumer debt is the money lent by banks and finance houses to citizens to buy houses and cars etc. Government debt is money owed by the country as a result of budget deficits, ie, over budget.

29 minutes ago, Ventenio said:

wow....so many economists here.

 

show me a post years ago where you predicted something correctly

 

 

Between 2007 and 2018 on TVF I said continuously that GBP/THB would fall to 40, +/- 5%, I started saying that when it was around 70 in 2007. Everyone thought I was a loon, a crazyman but I kept on saying....eventually people stopped saying anything. 

https://forum.thaivisa.com/topic/155648-gbp-sterling/?do=findComment&comment=1676612

Just now, Hank Gunn said:

Agree with most of what you say but wouldn’t the IMF had encouraged them to operate a budget deficit in order to build out infrastructure?

Hahaha. yes, thanks. Sorry, that's exactly what I should have written, I was testing you to see if you were paying attention....(joke)

OK so you get 10 points for spotting that one, stay tuned because there'll be more!

1 minute ago, Brickbat said:

Tisco is a USD 3.4 Billion bank. Not “ rubbish”

And....if the baht were to freely float, it would likely free fall

Tisco is not rubbish, your statement that government debt was 80% of GDP was! And also, only 4% of that debt is foreign debt, the rest of it arises in Thailand so there is nor currency or overseas implication.

And you don't understand how the FOREX system works either it seems! If the value of THB was being falsely declared by BOT every morning the FOREX market would catch sight of that and as a result a secondary market would develop offshore using a different rate. Dealers and brokers would not be willing to transact at an exchange rate that was not agreed. That secondary market has opened up in the past during times of stress, particularly when BOT imposed a withholding tax on short term FDI, to date the FOREX market has agreed with BOT every day.

1 minute ago, Brickbat said:

Whatever the reason, you have to agree that they must be able to have some control and that this current strength can only keep hurting the economy whilst benefitting the very few who are cash rich. 

BOT operates a managed float, it's called the dirty peg and the same is operated by loads of other countries. Instead of being hard pegged or allowed to float freely, a managed float means the currency is in a middle ground that is soft pegged to USD and allowed to be managed within a range. Remember that THB must also be managed against ASEAN currencies also hence the need for flexibility..

2 minutes ago, Brickbat said:

It’s closer to 80%. Acc to Tisco

“ 

Thailand’s Gross Domestic Product (GDP) would grow by only 0.8 per cent this year, with high risk of contraction if the Covid-19 situation, drought, and the falling oil price become more severe or prolonged for the estimated period.

Tisco Economic Strategy Unit (ESU) 

Rubbish.

https://countryeconomy.com/national-debt/thailand

https://www.ceicdata.com/en/indicator/thailand/government-debt--of-nominal-gdp

3 minutes ago, Brickbat said:

Really? In the last gfc, do you know how much mum n dad money was lost by these “ people who understand finance” ? Trillions! 

People shouldn't invest in things they don't understand, the banks knew what they were selling!

Just now, Brickbat said:

I seriously doubt they can manage the upcoming storm. Way too much debt and foreclosures will be rampant. The world dropping interest rates will add to this madness of borrowing like drunken sailors. 

42% of GDP is way too much debt is it....really? You should read up more on the subject, it's negligible, especially when it's backed by a years worth of GDP in the savings account!

7 minutes ago, spidermike007 said:

Yes. And they are bad.

 

Thailand's economy likely slowed in the last quarter of 2019 as exports were hit by trade tensions, while full-year growth may have eased to the weakest in five years, a Reuters poll showed.

The trade-reliant economy has been buffeted by the Sino-U.S. trade war, soft domestic demand, a delayed fiscal budget and drought. Tourism, which was a bright spot, is being hit by the coronavirus outbreak.

Southeast Asia's second-largest economy was forecast to have expanded 2.1% in the fourth quarter from a year earlier, according to the poll's median of 12 economists.

That would be the slowest pace since 2014's third quarter of 1.1%, and compared with the 2.4% rate in the previous quarter.

 

https://www.nasdaq.com/articles/poll-thai-q4-growth-to-slow-to-5-year-low-as-exports-drop-2020-outlook-tougher-2020-02-14

 

 

The link is to a poll, that's an opinion piece, I was referring to actual reporting of export values.

I'll save you the trouble of looking, January exports were up 3% because of gold shipments, February numbers will be reported in about another week, I was therefore wondering how exactly you thought that exports are falling off a cliff!

It's worth saying yet again that exports are down compared to the previous six months but also that they reached an all time high of USD 22.5 billion in July last year. The rate of export growth between 2015 and 2019 was a rate that couldn't be sustained in even a brilliant economic environment so a fall in the past few months is not unexpected, January's figures put us back at 2016 levels, not exactly the cliff that you describe.