What's with the Baht? ???

[theguyfromanotherforum]

22 minutes ago, blazes said:

We all peer into the future and confidently predict that the Thai baht can only get stronger.

 

What never gets discussed is the possibility that the impoverished working class will one day rise up and throw off the chains of the low wage economy.  Then all bets will be off.

 

 

 

True. But I come from a country that was destroyed by civil war and thought the same would happen in Thailand.....yet the elite seem to have a very good "understanding" on how to handle any civil disobedience.

 

To be honest, I wouldn't want Thailand to become like Yugoslavia, so in my opinion any massacre avoided is good for the country.

[natway09]

If you could just stop thinking about you you you for a minute & look around

you will see exports are strong in all areas incl agriculture, The big 5 banks have very strong equity 

ratios (in spite of the farang soothsayers) the country (right now ) is stable, the UK will be in a mess for 10 +

years if (or when) Brexit happens,  Donald is acting like a duck, China rules  & Thailand is getting some help from that, India  & Europe are  happy to do business in Thailand, Oz & NZ just go with the wind.

Japan is & will remain a big investor  & trader in the country.

So there you have it in simple terms , will it change,??? the whole thing could implode next year because

of this silly thing called elections which is supposed to be allied to this western idea of democracy which is a lot of rubbish & will not work here now or in the next 30 years

 

[Brunolem]

48 minutes ago, blazes said:

 

Actually, it would be bad all round, but the contagion is probably likely to start in Asia, more particularly China, where the mountain of debt can not be ignored for much longer.  China, with its centralised government and power to print money, can pretend that its system is clean and transparent.  But the snowflake that begins the avalanche is not too far away (I am guessing).

It's possible...

China's official stats are as reliable as were the soviet stats...we don't really know what's under the hood, even though it's probably not pretty.

 

[flyingdoc]

The baht has weakened slightly recently, against the pound, anyway !

[ExpatOilWorker]

3 hours ago, Brunolem said:

It's possible...

China's official stats are as reliable as were the soviet stats...we don't really know what's under the hood, even though it's probably not pretty.

 

Some of the rot under the hood is start to smell in the main cabin. The state have about 100,000 SOE and half of them are losing money. Even one of the national oil companies, a classic cash cow for most governments, PetroChina have lost $800 billion in market value.

Anbang with $300 billion in debt has been taken over by the state and HNA with $103 bilion in debt is on its last leg.

Fuson and Wanda could be next.

When China sneezes, Thailand could get a cold. They are close trading partners.

 

https://financialtribune.com/articles/world-economy/75267/petrochina-suffers-800b-in-market-value-loss

Edited March 7, 2018 by ExpatOilWorker

[timendres]

22 hours ago, theguyfromanotherforum said:

Thing is Canadians like to whine about Toronto and Vancouver real estate. But, Canada isn't just these 2 cities.

 

Find me a major country or even developing country where their financial city center is cheaper per square meter.

As always with real estate - location, location, location. When the 2008 crisis hit the US, I saw people in California and Nevada get wiped out. Some of those locations saw 40% drops in real estate values. My place, being one of the most expensive houses in my area, did not lose any value. Because house prices in my area were not pushed by the bubble that was unfolding.

 

Quote

 

I can buy Ritz Carlton or Shangri La at 50% discount in Toronto comparing to the same unit in Bangkok.

 

And before some guy inevitably quotes numbeo or some other crap site..... no you can not compare the average real estate prices in Bangkok to Toronto as 70% of real estate in Bangkok doesn't have a working Western toilet, so the average can be pretty skewed.

 

Your point here is very important. While more and more condos being developed in Bangkok are of a very high standard, the overall inventory covers a very wide range of build quality, fit outs, and area desirability.

[Brunolem]

45 minutes ago, ExpatOilWorker said:

Some of the rot under the hood is start to smell in the main cabin. The state have about 100,000 SOE and half of them are losing money. Even one of the national oil companies, a classic cash cow for most governments, PetroChina have lost $800 billion in market value.

Anbang with $300 billion in debt has been taken over by the state and HNA with $103 bilion in debt is on its last leg.

Fuson and Wanda could be next.

When China sneezes, Thailand could get a cold. They are close trading partners.

 

https://financialtribune.com/articles/world-economy/75267/petrochina-suffers-800b-in-market-value-loss

No question about it.

China is the worldwide economic engine (let's pray).

Its BRI gigantic project generates a lot of economic heat, especially in neighboring countries...the high speed train will soon reach Vientiane, and then...Korat?

Yet, not only all this is financed with more debt, but this orgy of debt leads to a lot of malinvestment in (65 million empty apartment, anyone?) and out of China

Chinese corporations are mismanaged...not a real surprise since communists are hardly the ideal choice to run capitalist tools!

Having said that, China also has some strong points, one of them being the huge gold reserves it has built while the West was getting rid of its own reserves.

Thus, in case of major currency collapse, China could introduce a new currency backed by gold (the ultimate guarantee) while the West would be left with oceans of worthless paper.

[simoh1490]

"Chinese corporations are mismanaged...not a real surprise since communists are hardly the ideal choice to run capitalist tools!"

 

I'd argue that many Chinese companies are more capitalist-oriented than Western companies and also many do a much better job of growing their businesses, case in point, the trade war the West has just unleashed on China, is it really their fault that they can make things cheaper. 

[Brunolem]

1 hour ago, simoh1490 said:

Case in point, the trade war the West has just unleashed on China, is it really their fault that they can make things cheaper. 

Two main reasons why they make things cheaper:

 

1. Slave labor

2. Horrendous quality

[simoh1490]

13 minutes ago, Brunolem said:

Two main reasons why they make things cheaper:

 

1. Slave labor

2. Horrendous quality

Silly boy, of course it's not slave labour, that's just the picture you have in your mind from reading all the wrong articles.

 

China is modernising very very rapidly, large parts of the population are becoming really quite wealthy and cities such as Beijing and Shanghai are as cosmopolitan as any in the West. Large parts of the population are also travelling quite extensively and taking what they see on their travels back home as lessons learned. I lived in Beijing and then Shanghai for two years in the mid 1990's and I travelled the country quite extensively, I went back again in 2012 and my god, the differences twenty or so years made were amazing.

 

Yes, Chinese wages are nowhere near as high as in the West but there again, neither is the standard of living but it's far removed from anything like slave labour, a large available workforce in a competitive environment might be a better way to put things.

 

And yes, China has some way to go to get their quality standards up to an acceptable level, in some areas but that is happening slowly but surely. I remember when China Eastern bought Boeing and then two years later cancelled the maintenance and spares contract because of the high cost, plus they'd managed to copy the parts and make them themselves. Unfortunately the quality wasn't what it should have been and they crashed a few planes quite publically before reinstating the Boeing maintenance contract, that was over 20 years ago. Today they build their own planes which are competitive globally. So whilst the plastic dog turds manufactured in Shenzhen and shipped to the West for a few pence each are cheap and nasty little things, the depth and breadth of their engineering and manufacturing is much broader than just those plastic novelties.

[ExpatOilWorker]

37 minutes ago, Brunolem said:

Two main reasons why they make things cheaper:

 

1. Slave labor

2. Horrendous quality

3. Stolen IP, hence no need for R&D

4. No respect for the environment

5. State subsidized steel and coal

Edited March 7, 2018 by ExpatOilWorker

[ExpatOilWorker]

12 minutes ago, simoh1490 said:

Silly boy, of course it's not slave labour, that's just the picture you have in your mind from reading all the wrong articles.

 

China is modernising very very rapidly, large parts of the population are becoming really quite wealthy and cities such as Beijing and Shanghai are as cosmopolitan as any in the West. Large parts of the population are also travelling quite extensively and taking what they see on their travels back home as lessons learned. I lived in Beijing and then Shanghai for two years in the mid 1990's and I travelled the country quite extensively, I went back again in 2012 and my god, the differences twenty or so years made were amazing.

 

Yes, Chinese wages are nowhere near as high as in the West but there again, neither is the standard of living but it's far removed from anything like slave labour, a large available workforce in a competitive environment might be a better way to put things.

 

And yes, China has some way to go to get their quality standards up to an acceptable level, in some areas but that is happening slowly but surely. I remember when China Eastern bought Boeing and then two years later cancelled the maintenance and spares contract because of the high cost, plus they'd managed to copy the parts and make them themselves. Unfortunately the quality wasn't what it should have been and they crashed a few planes quite publically before reinstating the Boeing maintenance contract, that was over 20 years ago. Today they build their own planes which are competitive globally. So whilst the plastic dog turds manufactured in Shenzhen and shipped to the West for a few pence each are cheap and nasty little things, the depth and breadth of their engineering and manufacturing is much broader than just those plastic novelties.

 A big chunk of the C919 is made in the west and they are still decades away from getting it FAA certified.

 

https://www.ft.com/content/b7f26c06-349d-11e7-99bd-13beb0903fa3

[simoh1490]

For posters who can't access FT: https://www.reuters.com/article/us-china-aviation-comac/chinas-c919-jet-completes-first-long-distance-flight-idUSKBN1DA0N4

[simoh1490]

This piece is a couple of years old but it's a useful read because it helps put the scale of China's manufacturing into persepctive. https://www.economist.com/news/leaders/21646204-asias-dominance-manufacturing-will-endure-will-make-development-harder-others-made

 

Chances are that your mobile phone, the clothes you wear, your shoes and your aircon. unit were made in China.

[eggers]

On 06/03/2018 at 1:56 PM, MaeJoMTB said:

A banana republic, crop prices at all time low, big companies fleeing and the people up to their eyes in debt ........ strong.

Not in any reality I live in.

 You're still living here?? How come? If so bad why stay?? .... Where is lifestyle better?? 

 

[Brunolem]

13 hours ago, simoh1490 said:

Silly boy, of course it's not slave labour, that's just the picture you have in your mind from reading all the wrong articles.

Did they remove those nets below the windows at Foxconn (Apple) factories, in order to keep workers from jumping?

[Brunolem]

13 hours ago, ExpatOilWorker said:

3. Stolen IP, hence no need for R&D

4. No respect for the environment

5. State subsidized steel and coal

Of course, otherwise why would Western corporations move their production there?

They don't do it because Chinese workers are so much better than Westerners.

And when they can find even better (worse for the rest of us) in another country, they don't hesitate to leave China!

[ExpatOilWorker]

3 hours ago, simoh1490 said:

This piece is a couple of years old but it's a useful read because it helps put the scale of China's manufacturing into persepctive. https://www.economist.com/news/leaders/21646204-asias-dominance-manufacturing-will-endure-will-make-development-harder-others-made

 

Chances are that your mobile phone, the clothes you wear, your shoes and your aircon. unit were made in China.

The tide may be turning.

It is about shoes:

According to the most recent data referring to 2016, China has reinforced the shares’ loss in production and global exports. On the level of exports, after increasing to a peak of 73.7% of shares concerning quantities exported, in 2012, China keeps declining in shares, reaching 67.3%, in 2016. Concerning manufacture, and after getting a share of 62.9%, in 2013, last year China was only responsible for 57.0% of global production.

 

https://www.portugueseshoes.pt/News/?id=2644

Edited March 8, 2018 by ExpatOilWorker

[simoh1490]

1 hour ago, Brunolem said:

Of course, otherwise why would Western corporations move their production there?

They don't do it because Chinese workers are so much better than Westerners.

And when they can find even better (worse for the rest of us) in another country, they don't hesitate to leave China!

Business is about making money, it's telling that one of the US's most profitable businesses has to move to China to become just that. And it's seriously doubtful that employment with Apple China constitutes slave labour, there are badly managed companies everywhere both at the macro and micro level.

 

"They don't do it because Chinese workers are so much better than Westerners". Some food for thought - Apple didn't move their R&D to China, neither did they move their senior management there. What they did was they moved their manufacturing processes there and given that entails electronic assembly on a production line, there's a fair chance the Chinese were at least better suited to that sort of work than domestic US based employees are.

[simoh1490]

1 hour ago, ExpatOilWorker said:

The tide may be turning.

It is about shoes:

According to the most recent data referring to 2016, China has reinforced the shares’ loss in production and global exports. On the level of exports, after increasing to a peak of 73.7% of shares concerning quantities exported, in 2012, China keeps declining in shares, reaching 67.3%, in 2016. Concerning manufacture, and after getting a share of 62.9%, in 2013, last year China was only responsible for 57.0% of global production.

 

https://www.portugueseshoes.pt/News/?id=2644

Who knows, maybe they've decided to get out of the shoe business and go more up market, sandals maybe! 

[WinterGael]

On 05/03/2018 at 2:23 PM, ostyan said:

I don't know. I just hear hotel managers, restaurants and others connected to tourism crying about their decreasing income.

This seems to be an 'all over' complaint from Thais.  I see it all over our village.  I hear it from friends and family.  Strong GDP growth means improved incomes and more jobs.  Except in Thailand.  Despite what I read and hear, the strengthening Baht is having a negative effect on peoples' lives. 

 

Need to go back to home country for a few months.  While I'm there, I'll be stocking up on a few things because I can buy them cheaper in Canada: ie good shoes and eyeglasses. 

???

[Brunolem]

1 hour ago, simoh1490 said:

Business is about making money, it's telling that one of the US's most profitable businesses has to move to China to become just that.

 

Indeed they had!

Here is how it works: they produce iphones at minimum cost in China, then ship them abroad while sending the invoice to an offshore company in some tax haven, who in turn invoice the real recipient of the goods and keep the non taxable profit.

Using (imaginary) numbers: China send an invoice at cost plus, say 50 + 10 = 60 dollars per iphone, to a shell company in the Carribeans...then the latter sends an invoice to Apple US for 460 dollars, and keeps 400 dollars.

After a few years and millions of iphones sold, Apple ends up with over 100 billions in cash stashed in the Carribeans, which it doesn't know what to do with!

 

Obviously, such a scheme wouldn't be possible if the production was made in the US.

 

These billions hidden in tax havens represent the sweat of underpaid Chinese workers,!

On top of that, the American taxpayers have to pay more taxes in order to compensate for the losses incured from tax evaders like Apple!

Edited March 8, 2018 by Brunolem

[WinterGael]

On 06/03/2018 at 10:28 AM, mstevens said:

Money is pouring in to Thailand from abroad and the prognosis for the Thai economy in the medium term is good, especially with so much money being spent on infrastructure (and then the subsequent benefits that infrastructure brings to an economy).

 

Just look at the skyline of Bangkok now compared with 20 years ago - at night it looks like a modern Asian metropolis (and it did NOT look like that in the late '90s).  Compare it with many major cities in the West over that time which look largely the same as they did 20 odd years ago.

 

I imagine that the baht is going to continue to increase in value against Western currencies.  It will be a slow increase, almost imperceptible at times, but I would not be surprised to see the baht at around 25 to the US dollar in the not too distant future.  When?  5 years time?  Maybe but probably not?  10 years time?  Quite possibly.

 

Expect the Thai economy to continue to to grow faster than the West.  I see the Thai baht continuing to increase in value against most major currencies.  If you're living in Thailand using money you earned / invested in the West then you might need to adjust your budget.

The Bangkok skyline?  Yes, it has changed immensely in the last 20 years.  I've seen the same change in Vancouver over the past 20 years.  The big difference I see between the two cities?  Vancouver's high rise apartments are full of people with lights on on every floor.  

 

When in Bangkok over the past few months I've been amazed at how 'black'  many high rise condos are after dark, no matter what day or what time.  How can developers afford to build all these and not fill them with people?

 

I've also seen quotes about how the Thai government's debt is negligible. Yet I read this week it is seeking financial backing from Chinese banks to fund its new railroads.  

 

Yes, tourism is up, and that puts money in the government coffers, but little into the empty restraunts and vacant hotels.  Oh, and did you hear that the third largest group of foreign tourists are from Laos:  shopping trips across the Mekong? 

 

Exports are up, 80% or more to go China, especially food.  That works well with a rising baht and keeping export prices down by paying less to the producers. The farmers in my wife's family are not happy. And what about the export companies that have started to petition the government for financial relief due to increasingly slowing exports.  They've been laying off. 

 

Yes! The value of the dollar has been falling against the baht, but so has the value of working thai incomes. This means rising household debt that is increasingly hard to pay down. Six homes in our village are bank sales because their owners could no longer pay their mortgages. 

 

Perhaps I read to much, but I see things that don't add up. 

 

 

[simoh1490]

Sheer genius, it gives me goose pimples just to think about it.

[ExpatOilWorker]

7 minutes ago, WinterGael said:

The Bangkok skyline?  Yes, it has changed immensely in the last 20 years.  I've seen the same change in Vancouver over the past 20 years.  The big difference I see between the two cities?  Vancouver's high rise apartments are full of people with lights on on every floor.  

 

When in Bangkok over the past few months I've been amazed at how 'black'  many high rise condos are after dark, no matter what day or what time.  How can developers afford to build all these and not fill them with people?

 

Many condos have dark tinted reflective windows and light are often sunk into the sealing. When I look at my own condo from outside to see if the wife is at home, it always appears dark, but when I enter all light are on and the music is playing.

I would assume most condos in Vancouver have clear windows.

[ExpatOilWorker]

2 hours ago, simoh1490 said:

Who knows, maybe they've decided to get out of the shoe business and go more up market, sandals maybe! 

Nothing upsets a chinaman more than to lose a dollar. They are not giving market share away without tears.

Edited March 8, 2018 by ExpatOilWorker

[The manic]

On 06/03/2018 at 3:35 PM, simoh1490 said:

Once again, the profile of tourism in Thailand changes from time to time, usually as one region of tourists stops coming and a new one starts. That means new destinations, new hotels, different restaurant types, different style of entertainment etc etc. Chinese tourists aren't too interested in Pattaya and the go-go's, they also don't want to sit in bars and drink all day - Chiang Mai and the North benefits from such tourists but Pattaya and Phuket suffer. When it changes again next time, perhaps the pendulum will swing the other way, who knows. I remember around 2008 when western tourists were in decline, all the bar owners kept saying how Pattaya was about to die, the smart ones transformed their business to keep up with the changes.

Pattaya is flooded with Chinese visitors.  50 tour buses every day to Pratumnak Hill. Hundreds walking up and down WS.  Dozens of  large restaurants springing up to cater to Chinese tourists. Chinese style Karaoke bar bars being set up. Chinese outnumber Russian tourists around Pratumnak many small businesses are rammed with Chinese customers. 

[simoh1490]

28 minutes ago, The manic said:

Pattaya is flooded with Chinese visitors.  50 tour buses every day to Pratumnak Hill. Hundreds walking up and down WS.  Dozens of  large restaurants springing up to cater to Chinese tourists. Chinese style Karaoke bar bars being set up. Chinese outnumber Russian tourists around Pratumnak many small businesses are rammed with Chinese customers. 

Well great, your view seems to confirm that indeed there are lots of tourists around in Pattaya, despite others saying there aren't. I still suspect though that there aren't that many Chinese in the beer bars and in the go go's at night, again supporting the notion that they do different things from what western tourists do.

[Brunolem]

2 hours ago, WinterGael said:

The Bangkok skyline?  Yes, it has changed immensely in the last 20 years.  I've seen the same change in Vancouver over the past 20 years.  The big difference I see between the two cities?  Vancouver's high rise apartments are full of people with lights on on every floor.  

 

When in Bangkok over the past few months I've been amazed at how 'black'  many high rise condos are after dark, no matter what day or what time.  How can developers afford to build all these and not fill them with people?

 

I've also seen quotes about how the Thai government's debt is negligible. Yet I read this week it is seeking financial backing from Chinese banks to fund its new railroads.  

 

Yes, tourism is up, and that puts money in the government coffers, but little into the empty restraunts and vacant hotels.  Oh, and did you hear that the third largest group of foreign tourists are from Laos:  shopping trips across the Mekong? 

 

Exports are up, 80% or more to go China, especially food.  That works well with a rising baht and keeping export prices down by paying less to the producers. The farmers in my wife's family are not happy. And what about the export companies that have started to petition the government for financial relief due to increasingly slowing exports.  They've been laying off. 

 

Yes! The value of the dollar has been falling against the baht, but so has the value of working thai incomes. This means rising household debt that is increasingly hard to pay down. Six homes in our village are bank sales because their owners could no longer pay their mortgages. 

 

Perhaps I read to much, but I see things that don't add up. 

 

 

GDP up, more tourism, booming construction, you name it...and yet it feels the same as far as the average guy is concerned.

 

Why is that?

Because most if not all developed and developing countries have become oligarchies!

 

An overwhelming part (80 to 90%) of the new wealth created goes into very few pockets, those of the infamous 1%, who are even less than that, while the rest struggles to make ends meet.

 

 

[simoh1490]

2 hours ago, WinterGael said:

The Bangkok skyline?  Yes, it has changed immensely in the last 20 years.  I've seen the same change in Vancouver over the past 20 years.  The big difference I see between the two cities?  Vancouver's high rise apartments are full of people with lights on on every floor.  

 

When in Bangkok over the past few months I've been amazed at how 'black'  many high rise condos are after dark, no matter what day or what time.  How can developers afford to build all these and not fill them with people?

 

I've also seen quotes about how the Thai government's debt is negligible. Yet I read this week it is seeking financial backing from Chinese banks to fund its new railroads.  

 

Yes, tourism is up, and that puts money in the government coffers, but little into the empty restraunts and vacant hotels.  Oh, and did you hear that the third largest group of foreign tourists are from Laos:  shopping trips across the Mekong? 

 

Exports are up, 80% or more to go China, especially food.  That works well with a rising baht and keeping export prices down by paying less to the producers. The farmers in my wife's family are not happy. And what about the export companies that have started to petition the government for financial relief due to increasingly slowing exports.  They've been laying off. 

 

Yes! The value of the dollar has been falling against the baht, but so has the value of working thai incomes. This means rising household debt that is increasingly hard to pay down. Six homes in our village are bank sales because their owners could no longer pay their mortgages. 

 

Perhaps I read to much, but I see things that don't add up. 

 

 

Your comment regarding Thai exports are not correct:

 

Only 12% of Thai exports go to China, not 80%  here's a list of their top export destinations:

1. China: US$29.4 billion (12.4% of total Thai exports)
2. United States: $26.5 billion (11.2%)
3. Japan: $22.3 billion (9.4%)
4. Hong Kong: $12.3 billion (5.2%)
5. Vietnam: $11.6 billion (4.9%)
6. Australia: $10.5 billion (4.4%)
7. Malaysia: $10.3 billion (4.4%)
8. Indonesia: $8.8 billion (3.7%)
9. Singapore: $8.2 billion (3.5%)

http://www.worldstopexports.com/thailands-top-import-partners/

 

And....tourism receipts do not go into the state coffers, tourism receipts primarily go into the pockets of the airlines, the hotels, the restaurant, the tour operators etc etc. 

 

Finally, with external debt representing less than 45% of GDP there are a number of ways that Thailand can finance the infrastructure build out such as the high speed rail road, including bond issuance. Issuing bonds historically has been very successful with much of the offer snapped up by overseas investors but that in itself causes problems. The first being that sale of the bnds to overseas investors causes the Baht to get stornger and secondly, the coupon price needed at a time of rising interest rates would make it a costly affair. A less expensive way to manage things however might be to persuade the Chinese to joint venture in the project using Chinese firms, materials and cheap financing.