CaptHaddock

Why is it that such seemingly small changes in GDP (perhaps just 3% in UK) can result in massive recessions, with perhaps an additional million or more jobs being lost in the UK for instance. Is it because economies are so highly leveraged.

Idiot's guide type answer would be appreciated.

I don't know much about the UK economy, but it's probably not so different from the US economy in this respect. First, 3% is a lot, not a little. Huge, actually. The US econonmy will probably be down 2% or 3% for 2008. And we lost 1.8 million jobs. The US work force is about 154,000,000. So, the loss of jobs is about 1.1% which is probably a little bit less than the loss of GDP. However, both the decline in GDP and loss of jobs accelerated a lot in the last quarter. In addition to jobs actually lost, there is a loss of earned income due to both reduced hours, reduced wages per hour, and reduced benefits.

Actual losses of these kinds have destructive effects on the economy in a variety of ways. Those whose income has been reduced or eliminated certainly spend less. But the vast majority who continue to work and receive the same income spend less too, because they fear losing their jobs in the near future. This negative consumer effect is especially important in consumption-based economies, such as the US, where it accounts for 71% of the economy. By contrast, I think domestic consumption accounts for less than 50% in export-driven China.

Businesses that earn less, spend less and sooner or later cut costs by reducing head-count. Banks and other lenders as less willing to lend to either businesses or households. Now you've got a vicious circle of reinforcing effects.

In the current recession by contrast with others in the postwar period, there is another huge effect at the same time, the credit crisis. As a result of the bursting of the housing bubble, there have been huge losses to lenders. When the stock market blew up from 2000 to 2002 the effect on the economy was not so large because most of the losses were not borrowings that had to be repaid. Also, a relatively small percentage of households owned stocks as a significant percentage of their net worth. It's a very different picture for houses, where almost 70% of US households owned their house at the peak of the bubble. And about 65% of those households owed money on the house. The lending of money for the housing bubble was accomplished to a large degree by entities other than regulated banks. These largely unregulated lenders did not have sufficient reserves for the scale of the losses that have emerged. So the losses cascade to the lenders' lenders. Because of globalization of financial services in recent years the losses have spread very widely, affecting villages in Norway and banks in Germany and many others. This leveraging by the unregulated lending sector is much bigger than the actual banking sector. So, you are correct that the recent high level of leveraging will have a strongly aggravating effect. This is the basis for the frequent comparisons to the Great Depression, which was a routine recession (panic) made very severe by the runs on the then unregulated banking sector.

If the company goes under I still should get at least some of my back pay / severance pay, although it would probably take a while and require lodging a complaint with the Labour Department and probably also hiring a lawyer to follow it up, especially if I'm not continuously in country.

If the company goes under, who would pay your back wages?

has anybody an Information about where to buy old Thai-Goldcoims?

by the Way: I was told, there will be a new Goldcoin available to commemorate the Sister of the King of Thailand

I thought no Asian country had ever issued gold coinage. Are they only commemoratives?

The company I work for has not paid October's salary to anyone yet. For the past several months they have been paying late, but usually within a few days after end of month. Now, however, I have heard unofficially (no one is saying anything officially) that salaries for October will be paid at the end of November, and no one knows when November salary will be paid.

Are there any laws/regulations as to how long a company can delay paying wages until they are considering in breach of contract ?

Any suggestions on how to handle this ? (Constructive comments only please)

I am not in Thailand, but here in the US I have always found that when a company stops paying you should stop working immediately, that very minute. Once they get far behind they put you in the position of working as a speculation to recover back wages. If they can take advantage of you in their hour of need, why wouldn't they?

Instead of quitting, why don't you just stop going in to work until they become current? If they don't need you, they won't pay, but they probably wouldn't have paid anyway. If they do need you, they'll pay. Encourage your co-workers to do the same.

I don't know if in Thailand they can fire you for a no-show when they are not paying you. Even if they can, that may be better than being further victimized by the scoundrels.

I think that, like other bubbles of late, is likely to work its way thru the real estate market in the coming months.

I am continually reading forecasts of a bottom in the US housing bust coming in a few months or late next year. I think that people just can't grasp the scope of this problem, which is hardly surprising since there has never been such an economic event in US history before. The nearest example is the Japanese housing bubble. Houses in Japan peaked around 1989 and are now down 65% to 75% from the peak values. Those peak values will never return. Because Japan went through credit, equities. and housing bubbles that burst, just as the US now has, Japan is the best available, though an imperfect, indicator of what to expect here in the US.

Therefore, I expect US housing to bottom out in the period 2012 to 2020. Houses will never regain their peaks of 2005/2006. Those homeowners who wish to sell, but are unwilling to accept the current market value will be holding a house worth much less five years from now.

I woudl think that if Social Security is your only retirement I beleive that is a good thought. However if yo haev an addtional retirement as I do in my cae a retired cop, good retirment with a 3% cola. Could I wait till 70 yes I could, but on the average cop has led a very stressful life an the chances of making it to 80 are pretty slim.

Beleive me Social Security is betting yuo won't make it that far. Now they used accutaries (spelling?) to make their calculations. If yuo have to you have to. But your going against the odds.

So if your say retired military not tha clear cut of a decesion.

Each peson really has to take a look at their own situtaion and decide what is best. If I was still in the work world I woudl wait it out.

It is not so much that SS is betting you won't make it to 80 as it is that those who don't will pay for those who do. This benefit is called the mortality credit and it's an important benefit for us. It is a big mistake for people to think that the game is to beat the SS Administration out of their money and to base the decision on when to take SS benefits on whether we expect to break even or not. That doesn't actually matter to us. When you die your financial problems are over--you don't need your SS benefits then because you are dead. The tough financial problem to solve is to avoid outliving our money which would be a catastrophe without a solution. The only methods available to us are: to save more during our working life, to reduce our standard of living, to make riskier bets in our investments and to win those bets, or to buy a lifetime annuity. Of these buying more lifetime annuity from the most reliable agent in town, the US govt, is the safest and cheapest. The way to buy more SS annuity is to delay taking benefits.

Now if you already have a sufficient solution in a civil service pension with a COLA then maybe defering SS is not necessary for you. Most retirees however do not have COLA-adjusted pensions.

On the SS website that was listed above is a new calculator that is very simple. It will tell you the difference if you quit working before 62 and also let's you look at the benefits at different ages. One size doesn't fit all but I am like most of you, I will take it as soon as can. In my humble opinion now is a great time to invest your monthly checks in the market, for intsance if you are 62 and invest your checks for the next 8 years I think you will be way ahead of the game (dollar cost averaging).

ACMike

By delaying benefits you get a 7 - 8% REAL return GUARANTEED for each year you delay. (75% of full retirement age benefit at age 62 versus 132% of FRA at 70.5.) Do you expect to pick that up in the stock market? If you can afford to delay until age 70.5 and then live past 80 you come out ahead in dollars. But, of course, you don't actually know how long you have to live. Even so, it is worth it to wait because you are, in effect, buying a larger lifetime annuity that is adjusted for inflation. If you try to buy that privately you will have a hard time finding one and it will be much more expensive.

You don't know if you will live until 80, but then you don't know if you will live until 95. The big risk financially is outliving your money. The best way to address that risk is with an inflation-adjusted lifetime annuity. The safest and lowest cost inflation-adjusted lifetime annuity is Social Security.

Hi,

I'm a U.S. citizen and I need to make a will in a hurry that will cover my U.S. assets. It is possible to do this in Thailand? If I have a will made here and notarized at the U.S. embassy, can that then be used to pass on assets to a Thai national?

Also, do I have to appoint someone in the U.S. as executor or could I name her as executor? Would she be able to handle the probate from Thailand or would it be too expensive? Moreover, if I don't have a state residency, how does probate work anyway?

And what about transfer on death registrations? Can I list a Thai national for a U.S. account? It seems it would have to be a U..S. citizen?

Can anyone recommend a good lawyer who can sort out these issues. Any advice appreciated!

I don't know the answer to your questions, but I am researching them now as we may move to Thailand in a few years. I think you need a US lawyer. I have been told by a wills and estates lawyer here in New York, that the will can be probated anywhere, but you should confirm this. Assuming that is true, you can use a lawyer in the jurisdiction where you want the will to be probated. As for executor, you would need to have someone who has access to the US court system. That means a US citizen or resident alien.

"I think 1997 made us very aware of the role that risk management has to play," said Kosit Panpiemras, executive chairman of Bangkok Bank, speaking of Thai banks in general. "I think we have also been very careful about liquidity, particularly here at Bangkok Bank. Our loan-to-deposit ratio is something like 90 percent -- only 90 percent of our deposits have been lent out."

Only 90 percent? Since when is 90 percent not much? Perhaps he meant to say "only 10 percent..."

From BOT:

Commercial banks are required to maintain liquid assets no less than 6% of the reserve base (deposits, foreign borrowing maturing within 1 year, other borrowing with index linked returns or embedded financial derivatives.)

The current required reserves ratio in the US is 10%.

Since the early 90's reserve requirements for US banks were dropped except for checking accounts. Those checking reserves amount to about USD 45 billion, if memory serves. Not much when compared to the banking system as a whole.

Open an account at Bangkok Bank. BB has a branch in New York with an American ABA number. You can then wire from Citibank to BB using the "domestic transfers" screen on Citi's website. You enter your account info at BB and in the "special instructions" area you identify your BB branch location. Citi charges the domestic wire fee of USD 18.75 instead of the international fee and they wire dollars. Money gets there overnight.

Hi,

Is the fee of USD 18.75 representing an ACH Tranfer fee ? How do they charge ?

Thanks.

ACH transfers are free as far as I know. So I don't think this is ACH. Citi calls this a domestic wire transfer and the USD 18.75 appears to be a flat rate, not a percentage. They deduct it from my account. Is that what you were asking?

By the way, FYI other posters here eventually had problems with this method. I haven't yet.

Capt.

Our government is trying to tell us that in an off-the-wall way, if you to believe the smokes.

Well one thing for sure if it's not there, then the 1st thing that would happen would be our entire Congress would be out of jobs. The Senators and Representatives would not let this happen. But for sure, it's in serious financial trouble.

Have you notice how the age of retirement is going up and up? Many people will die before they ever get to collect their pittance, because it is mathematically impossible that social security will be there for me when I retire, or if there - the benefits will be diluted to the point where I can only hope it will pay my cable bill!!!!!

That said, I would still plan for my own future--even with social security I'm going to want more than that. So between now and then I will just go out and buy the self-help "the financial for DUMMIES books" and just learn to manage my own money!!!……not to worry be happy!!!

Hope...... I really hope I'm quite good managing my nest eggs --got maaany decades to go

Just me

No, it's not the "government" that is trying to tell you that SS won't be there for you--it's the Republicans. They constantly lump SS together with Medicare as crises that need to be solved, mostly by abandoning them. But SS is not in a crisis. SS will be fine. Medicare will not. Unless there is health care reform.

The age of retirement has to go up because life spans have gone up. Dramatically. During the 20th century the American lifespan went from 47 years to 79! The demographics have changed profoundly since SS became law in 1935. The New Dealers weren't in a position to forsee such change.

Yes, you should read everything you can and become competent to plan for your retirement. Few people are capable of managing it. But SS will be there for you. Particularly if you fight for it. If not, well, have you run a retirement calculator to see how much you have to save to provide for living 30 or 40 years without working?

That's why many of us (I + uni friends) we are very aggressive in putting into the ROTH and among other things - and managing our own funds and portfolio

Actually to be exact

6.2% = SSA + same amount of employer matching of 6.2%

1.45% = Medicare

So that whoopping almost 8% off our paycheck and plus income tax too of course

I have heard we're paying out around 40% in all the taxes combined

Income tax +Ssa+ medicare + sale tax + gas tax + property tax , ects =======OUCHHH!!!!

Teacup,

You certainly should max out your savings and take full advantage of Roth especially. However, your belief that SS will fail is not correct and comes from a disinformation campaign by the Republicans intended to destroy it. There is no government program that is as well-funded as Social Security. Using the least favorable growth estimate of the three estimates that the SS Administration prepares, the fund will make full payments until 2044 or so when the Trust Fund is exhausted and payments will depend only on contributions. Using the highest estimate of growth (2.9% annual which is below the actual post-war average growth rate of 3.4%), the Trust Fund is never exhausted.

It is important for you and your uni friends to understand why SS is so important to you and why you cannot fully replace it with your own savings and investment. SS, like other insurance vehicles, works by because the mortality rates of the population are known statistically. So SS taxes you assuming that you will live to the average life span of, let's say, 78 for a woman. They know how many recipients will be collecting at age 65, age 80, age 90, etc. So the biggest benefit they provide is the "mortality credit", which means that if you are still alive they can pay your benefit from the contributions of the many payers who have died earlier in their lives. While you plan your individual retirement you don't know how long you will live. So, you have to plan for the longest, most expensive life to avoid the horrible outcome of being both old and poor. BIG OUCH!! That savings plan will cost you a whole lot more than the 6+% you are currently paying into SS. You could buy an annuity and benefit from a similar mortality credit, but then you have to worry about the credit worthiness of the private insurance company and accept that they will skim a profit while SS does not.

What would life look like without SS? We can see by looking at the Chinese, who lack both health insurance and any SS-type retirement income plan. Chinese families save up to 48% of their income. They do this because they lack such a govt safety net and, moreover, in 50% of the cases their single child is not a son who can be expected to take care of them in their old age. If the Republicans were to succeed in destroying both employer-provided health insurance (McCain's stated policy) and SS, American families would have to start to achieve savings rates approaching the Chinese. Of course, this would wreak havoc with the consumer economy. Interestingly, the Chinese govt has announced their intention to create a social safety net specifically for the economic purpose of relieving families of the necessity of saving so much of their income so that the economy can develop domestic demand in addition to export demand. It doesn't make sense to force everyone to save for a life-span of 95 years when most will die by 75. Destroying SS and employer-provided health insurance would be a major step in reducing the American standard of living to that of the Chinese.

Insurance structures that pool risk are one of the truly great advances of modern civilization. Without them you might do fine if you happen to be lucky enough to avoid an adverse outcome such as expensive illness, forced early retirement due to health or economic considerations, or a very long and costly lifespan (which is unlucky only in the financial sense, of course.) But if you do have bad luck you are much more likely to face bankruptcy and poverty. Indeed, bankruptcy rates have been increasing dramatically in the US for two groups: families with children and senior citizens.

SS needs to be reformed to reflect the changes in American society since the 30's, e.g. women in the workplace and longer lifespans. The biggest change is that the FICA tax should be on 100% of income and not be capped at $102,000 of income as it is now allowing Warren Buffet to pay a lower percentage of his income for FICA than you do. This would make it less regressive and also ensure payments even in the case of lower than expected economic growth.

Capt Haddock

I have a few questions to ask some Americans here..

But what is VP Cheney doing in Georgia? And why is China's Tibet such an issue among some of you?

What makes that bad and the US occupation in Iraq and Afghanistan okay?

I know many Americans do not agree with the war either but for those who do (at least support the Republican candidate who supports the war), may I ask?

A timely question. My opinion is that Bush and Co. are ratcheting up the level of conflict around the world to sway the election to McCain. Consider:

1. Bush described McCain as the best president for a time of danger

2. US forces have now crossed into Pakistan for the first time. Is this an invasion?

3. war in Afghanistan is ratcheting up again. US forces are being moved from Iraq to Afghanistan.

4. rumors persist of a US and/or Israeli attack on Iran. The latest is that Dutch secret forces are now quitting Iran because of an expected attack by the US within 3 weeks.

5. the US has provoked Georgia into attacking South Ossetia which has effectively been independent since 1991. Cheney was there this week giving the Georgians USD 1 billion of "aid" and trying to get them admitted to Georgia.

Since McCain is trailing Obama and felt the need to make a desperation play in picking Palin as the VP candidate, the Republicans will resort to military attacks. In US opinion polls the Republicans routinely come out higher than Democrats on national security issues. Bush & Co have demonstrated that they will stop at nothing in pursuing power.

There is no reason not to vote. There are many ways to cast your ballot so if you have never voted the fault is your's and not circumstance.

There is an excellent reason for an expat not to vote. Apparently, you can only vote if you register to vote in a state, even though expats do not live in a state. Doing so may expose you to liability for state income tax.

Only if you make over $80k per year (according to current tax laws).

That exclusion ($87k, I think) applies only to earned income. Expat retirees, for example. may have 401k, pension, capital gains, dividend or interest income that could thereby be exposed to state income tax.

It's obvious to me that Thailand is simply not ready for democracy yet. As stated earlier, for democracy to succeed it requires a free press and a well educated populace. Until improving the educational system leading to a well informed and thoughtful population, which values its votes rather than "selling" them, I'm not optimistic about the formation of a stable government here.

But Thailand is ready for military dictatorship?

There is no reason not to vote. There are many ways to cast your ballot so if you have never voted the fault is your's and not circumstance.

There is an excellent reason for an expat not to vote. Apparently, you can only vote if you register to vote in a state, even though expats do not live in a state. Doing so may expose you to liability for state income tax.

The gap between rural thailand and the economic elite means that simple majority vote doesn't work in the best interests of the nation; it's one of the reasons the US adopted the electoral college system.

Hard to read this ignorant, anti-democracy tirade. For your information, the electoral college system in the US constitution is an effect of slavery. The purpose of the EC was to allocate to the South an unfair degree of representation in deciding who would be president. The constitution already gave the South disproportionate representation in the House of Representatives via the "three fifths" compromise. For the purpose of counting citizens to determine how many representatives each state was entitled to, a (completely disenfranchised) slave was counted as 60% of a free citizen. So this inflated the number of representatives each southern state would get. But the Northern states would still decide the presidential elections because of their greater population. So, the EC appears as a means of transferring the overrepresentation in the House to the presidential election by allocating electoral college votes to each state in the number of their senators (always two) and their representatives It had nothing to do with distrusting the popular votes and everything to do with jiggering the system to give the slave-holding South excessive representation in both Congress and the presidency. It worked. The first president chosen without Southern votes was Lincoln, whose election caused the South to secede. The pity is that Lincoln didn't simply let them go. But that's another story.

As for Thailand, the problem is that the royalists are pursuing a restoration. Not hard to find adherents when you that USD 35 billion to spend, is it? Too bad it isn't ever used genuinely to help the people.

During my recent trip, I couldn't help but noticed that the 2 shops over at the Cambodian border were overwhelmed with "Spanish fly", "Viagra" and "Ciallis"

I've always thought Spanish fly was something like a myth. Cambodia ? That's strange.

Spanish Fly is actually used by horse breeders, it stimulates the reproductive organs, but is not called "Spanish Fly" per say, not sure of the chemical name.

Cantharides. It apparently works, but is dose-sensitive and dangerous for humans.

I don't know Capt., in the typical American office environment it is a big big taboo for people to know exactly what everyone is making. It pisses people off to know someone they think isn't as good as them makes more money, so the cultural bias is to keep this all very secret. Strangers will sooner tell you their sexual habits than their salary. Thais seem rude to us in their directness about money. I think usually they don't intend to be rude because they don't see that behavior as rude.

No contradiction there. I wouldn't dream of revealing to my colleagues how much I make, but I pay attention when someone lets something slip about himself. The other day, for instance, in a conversation about life insurance, I asked a colleague why he bothered with whole life insurance instead of just relying on the term insurance available from our employer. Well, he said the limit of $X thousands of dollars was too low to provide for his family if he croaked. I realized right then that I earn more than he does because the upper limit to the life insurance I can buy is about five times what he quoted, a possibility of which he is unaware. Of course, I never let on.

The reason it is a big taboo, and indeed, a firing offense in some offices, is because people want to know so much.

It's different here in the USA, but I am not sure how different it is. Common topics of conversation are: occupation, real estate market, stock market, home renovations, job, overseas vacation plans, make/model of car, cost of college for the kid, wine, restaurants, vacation/retirement home, wedding preparations, etc. All of these items can be translated more or less directly into dollar values and people certainly do make the translations.

What stands out is that in both Thai and US cultures there are acceptable ways to talk about money and ways that are less so. When I am in Thailand I find Thais are always asking outright what I paid for this or that. Now that seems to me too crude a question to pose so baldly, but I admit that I sometimes try to figure out how well off the members of my wife's family are, which ones will have a pension, and so on.

So, I think Americans and Thais are, more or less, always sizing each other up as to relative economic and social standing.

When I transfer from Fidelity to Bangkok Bank NY I don't do a wire transfer (using SWIFT) - I do an electronic funds transfer using their ABA and Routing number just like any other US bank. Then the money automagicly ends up in my Bangkok account. I just did one and there was no charge.

This method will work at Fidelity, but only if your name is on the target account. If you try to transfer to someone else's account, it will get rejected.

People, even smart ones, tend to get superstitious about events over which they have insufficient control. The classic example, for those acquainted with American baseball, is the difference between hitters and fielders. Hitting a baseball is very hard even for the pros, who can manage it much less than a third of the times they are "at bat." Therefore, we can expect a high degree of supersitition and we find it. Batters are known to have many superstitions, swinging their favorite bat a certain number of times before coming to the plate, touching their helmets in a certain way, wearing lucky socks, etc. etc. Fielding, i.e. catching the ball, is not so hard for the pros. A competent pro catches the ball almost every time he gets the chance. Fielders are not known for displaying supersititious behavior. They don't need to, competence is enough.

The behaviorist psychologist, B. F. Skinner, did an interesting experiment with pigeons. He put them in a cage with buttons to press and a chute for the delivery of food items. He would then release food to the pigeons when they discovered pre-determined sequences of button-presses, such as the left button twice and then the right button. The pigeons discovered the sequences pretty well. Then he did a really interesting thing. He started delivering the food items at random. So there was no unknown sequence of button presses for the pigeon to discover, the food would just come at random intervals no matter what the pigeon did. The result was:

"He discovered that the pigeons associated the delivery of the food with whatever chance actions they had been performing as it was delivered, and that they subsequently continued to perform these same actions. " One bird was conditioned to turn counter-clockwise about the cage, making two or three turns between reinforcements. Another repeatedly thrust its head into one of the upper corners of the cage. A third developed a 'tossing' response, as if placing its head beneath an invisible bar and lifting it repeatedly. Two birds developed a pendulum motion of the head and body, in which the head was extended forward and swung from right to left with a sharp movement followed by a somewhat slower return.

In other words, superstitious pigeons.

Consequently, one would expect superstition to be more common in third world societies, such as Thailand, where people have less control over their lives than in the first world.

My wife arrived in New York City in January. After a few days she mentioned that she was afraid of the electricity in the toilet. I was alarmed. How did a live current get into the plumbing. I didn't know that could happen, but it sounded deadly. However, when I checked the toilet there wasn't any electricity. Then a few days later she said it happened again. The toilet handle gave her an electric shock. Then I realized what had happened. She had discovered static electricity, which is apparently unknown in humid Thailand.

I find it amusing when farangs take a superior attitude toward the poor road safety record in Thailand. As though we individually were responsible for the lower accident rates back in our corner of farangland. Hmm... Could it possibly be that decades of campaigns promoting safe driving habits paid for by the rich governments in the West had any effect? I remember, "Buckle Up for Safey", "Don't Drink and Drive" among others being driven relentlessly into my brain by paid advertisements. As well as free driver-ed classes in high school. And the result of all fhis taxpayer funding for safety is that I thought of it all by myself?

Rather than a sympton of the moral superiority of us farangs, road safety turns out to be just another luxury common in rich countries. You know, like lower air pollution.

But fact is a fact, ladyboy's a not female, no matter how you cut it. (or tuck it)

They think they are women. You should respect that. The world isn't about RIGID LINEs of gay versus straight. There is room for lots of ambiguity, but clearly not in your brain.

When did this tripe about their having a woman's brain become politically correct? Soundes like a delusion to me and since when do we have an obligation to respect other people's delusions? Are we obliged to respect all delusions, including the "I am Jesus" variety or just this one because it is special?