The Thai Economy Is In Crisis

[soundman]

Very worrying signs that the economical situation is far worse than we thought.

What's frightening is that 50% of Thai Labor force is in agriculture/farming/communities and represents maybe some 60-70 % of the total Thai population...

It means there's a time-bomb ticking in rural Thailand and not a nice one...

The positive news, Thaigoon is feeding us all the time (nothing wrong with that btw...but not very realistic), delivers rosy pictures about the economical situation in Industrial and Commercial enterprises (which are still doing reasonably well) but, I fear, there's much more underlying negative news. The article above shows that...unfortunately.

I really wish Thailand was in better shape...it should be, if one looks to the other 'booming' Far Eastern countries...

But, IMHO, all of the above is caused by the BKK Elite, defending their personal interests/wealth/privileges, like crocs, defending their nests....forgetting and neglecting the needs of the majority of the -poor- Thai population

LaoPo

Headache from Taksinomics?

Cheers,

Soundman.

[LaoPo]

Headache from Taksinomics?

Cheers,

Soundman.

Not me Soundman...not me.

Millions of poor Thai have headaches...in their wallets

LaoPo

[soundman]

Headache from Taksinomics?

Cheers,

Soundman.

Not me Soundman...not me.

Millions of poor Thai have headaches...in their wallets

LaoPo

Same wavelength man..

But have to have pitty on those poor souls who are going broke & still rooting for TRT. They would probably still cheer Taksin if he took their souls & told them it was for their own good.

Cheers,

Soundman.

[LaoPo]

Headache from Taksinomics?

Cheers,

Soundman.

Not me Soundman...not me.

Millions of poor Thai have headaches...in their wallets

LaoPo

Same wavelength man..

But have to have pitty on those poor souls who are going broke & still rooting for TRT. They would probably still cheer Taksin if he took their souls & told them it was for their own good.

Cheers,

Soundman.

Agree, but since there's no other foothold to look forward to, I'm afraid the poor still 'long' for the Thaksin days....whether bad or good.

Since the CNS took over, their situation didn't really improve...on the contrary....

LaoPo

[VegasVic]

In the real sector, we are confronted with a number of difficulties. The farm sector is stricken with declining income and a corresponding fall in spending. In addition, it is saddled with a huge amount of household debt, a legacy from the consumption-driven growth policy of the previous administration which relied primarily on debt-creation, geared towards the farm sector and the lower middle class.

Aside from this, an increasing number of farm communities has been brought down to earth. They are becoming disillusioned; the realisation has gradually sunk in that they are being reduced to a poverty-stricken and debt-ridden class, in the wake of the departure of the previous administration along with its populist, giveaway policies. They are becoming distraught. All these factors can be seen as a potential incubator for widespread social unrest and political discontent, as already evidenced by the mounting incidence of protests by various local agriculture-related groups _ which can only add to foreign as well as local investment jitters.

The collateral damage associated with household debt has to do with salaried workers in the non-farm sectors, many of whom had previously overextended themselves financially by excessive borrowing and lavish spending.

This bad habit was made possible by the increasingly widespread use of bank and non-bank credit card facilities _ the number of credit cards jumped from 1.6 million to 8.2 million between 2000 and 2005 and to over 10 million in 2007.

These individuals are compelled to languish under constant pressure to meet their monthly interest servicing and partial loan repayments on time. The offshoot is that their workplace productivity and their employers' business performance suffers.

Some household debtors have turned to refinancing their outstanding debts by resorting to new sources of funds, usually at more restrictive terms. This practice is generally deemed undesirable and unsustainable, as there are limited sources of finance available and once these have become exhausted, refinancing must come to an end and the process will reverse itself, with legal proceedings and bankruptcies following suit.

In the manufacturing sector, numerous business units, especially the small and medium-sized, have already felt the impact of the declining overall economic activity and a sizeable number have gone belly up. Many more are expected to follow suit.

Only the large-scale industrial and commercial enterprises have so far managed to endure the currently unfavourable economic conditions and withstand the onslaught of foreign competition.

Very worrying signs that the economical situation is far worse than we thought.

What's frightening is that 50% of Thai Labor force is in agriculture/farming/communities and represents maybe some 60-70 % of the total Thai population...

It means there's a time-bomb ticking in rural Thailand and not a nice one...

The positive news, Thaigoon is feeding us all the time (nothing wrong with that btw...but not very realistic), delivers rosy pictures about the economical situation in Industrial and Commercial enterprises (which are still doing reasonably well) but, I fear, there's much more underlying negative news. The article above shows that...unfortunately.

I really wish Thailand was in better shape...it should be, if one looks to the other 'booming' Far Eastern countries...

But, IMHO, all of the above is caused by the BKK Elite, defending their personal interests/wealth/privileges, like crocs, defending their nests....forgetting and neglecting the needs of the majority of the -poor- Thai population

LaoPo

Once again you are "spot on" LaoPo. The folks in Issan, Rayong, Trat and the northern provinces are already feeling the downturn in the Thai economy, and as usual are the ones getting hit the hardest. As I have stated in previous posts the leading economic indicators will not show just how bad things really are in Thailand until sometime this fall, but the folks out there in the countryside already know. This latest ruling dismantling political parties is just one more sign that leads me to believe that there will not be real elections held this year and the possibility of a just constitution is in doubt as well. The real looming crisis for the Thai people and their economy is the crash of the equity markets in China, and from the looks of it this will occur before any constitution or elections will happen in Thailand. I pray nightly for those Thais in the countryside whose lives are being comprimised by the Thai elite who are only concerned about their own financial and political interests at this time and in putting on a good face on the Thai economy for the world to see. If there was ever an appropriate time for a true uprising of the working class in Thailand it is now, or at least in the coming months. May God bless the Thai people and lead them out of this abyss!

[ThaiGoon]

http://www.nationmultimedia.com/2007/06/08...ss_30036284.php

Business has more positive outlook

Negative factors affecting the economy have bottomed out with the clearer political situation, but for the remainder of the year the economy will be affected by five key factors including oil prices and exchange rates, according to a survey released yesterday.

The poll, conducted by the Business and Economic Forecasting Centre of the University of the Thai Chamber of Commerce, shows that business has a positive outlook towards overall economic growth this year in line with a clearer political situation. Respondents are optimistic that all negative factors have bottomed out.

Centre director Thanawat Phonwichai said yesterday that the private sector had expressed a positive view about the clearer political situation, although there were still worries about whether a national election would be held this year.

"It was the first time this year that business showed less concern for the political situation. Confidence about the country's politics had dropped gradually since November last year, but now it is getting better," he said.

About 54 per cent of respondents in March said political problems should be urgently solved by the government, but the figure dropped to 30 per cent this month.

The centre also sketched two economic scenarios. First, if a wide spectrum of political resolutions takes a long time, economic growth will drop continuously until the fourth quarter and early next year. Second, if the problems are cleared in a short period, economic and private-sector confidence will recover late in the third quarter.

The poll also showed that businesses expressed less concern about a downturn in consumption. Businesses said consumer spending slumped by 51 per cent in March, but the figure rose to 10 per cent this month.

[ThaiGoon]

http://www.nationmultimedia.com/2007/06/08...ss_30036292.php

IN BRIEF

Japanese makers up Thai capacity ahead of eco-car production

Japanese auto-makers are expanding their Thai bases to develop and manufacture low fuel-consumption cars that are easy on the environment, The Nikkei reported.

Honda is increasing production capacity - mainly for eco-cars - by 80 per cent over five years, while strengthening its Thai design and development capabilities.

Toyota, as part of its global strategy for fuel-efficient cars, will beef up its technical staff here by up to twofold.

Since the Thai government declared its policy for eco-cars, the auto-makers have been preparing to rapidly ramp up production of eco-cars by building up their Thai operations into their hub for developing and exporting products to emerging markets.

Nok to build ฅ3-bn auto rubber factory

Leading Japanese oil-seal maker Nok Corp plans to set up a 3-billion-yen (Bt855 million) factory in Thailand to begin full-scale production of anti-vibration rubber for cars.

Construction is slated to begin this year at its Thai unit's existing production site, with the new factory scheduled to start operating next spring, gradually ramping up capacity to 2 million units a year in fiscal year 2009.

Edited June 7, 2007 by ThaiGoon

[Prakanong]

"the Business and Economic Forecasting Centre of the University of the Thai Chamber of Commerce"

This mob are to economic forecasting what ABAC are to morality polls ;-))

[ThaiGoon]

http://www.bangkokpost.com/Business/08Jun2007_biz30.php

Growth to pick up in second half

Central bank sees signs of recovery

DARANA CHUDASRI

Economic growth should pick up in the second half of the year, thanks to recent interest-rate cuts and easing political tensions, according to Tarisa Watanagase, the governor of the Bank of Thailand.

''We have seen signs of recovery,''

Dr Tarisa noted that low unemployment, high foreign-currency reserves and low foreign-debt levels were also supportive factors for the economy.

Moves by the government to permit a fiscal budget deficit of up to 170 billion baht for the year to Sept 30 also would benefit growth trends in the second half.

The National Economic and Social Development Board reported earlier this week that first-quarter economic growth was 4.3%, on par with year-on-year growth in the previous quarter and surprising many analysts who had expected weaker results.

Construction is expected to start later this year on the first of several new mass-transit projects in Bangkok, potentially giving the construction and property sectors a boost. Authorities are also expected to approve a new framework for power-generation licences later this month to add 3,500 megawatts of generating capacity to the national grid.

[LaoPo]

Thaigoon: would appreciate it if you can post some positive news about the Agricultural industry,where 50% of the Thai Labor force is trying to survive and make a living, instead bringing news about wishful thinking of some poll by the Business and Economic Forecasting Centre of the University of the Thai Chamber of Commerce* or another Japanese investment.

It would help to bring my worries about the majority of Thai down...

Where is your concern about your fellow countrymen/women/children in the poor areas of Thailand ?

Why do you always bring news about industrial and commercial business and 'forget' the news about the bad situation in Agriculture ?

If you would be fair you wouldn't just post your rosy newspaper articles but the reality as well. We all live in a real world not a rosy world.

So let's have the growth and prosperous figures in Agriculture and make the farmers happy, ok?

*BTW isn't it strange there is a "University of the Thai Chamber of Commerce"...

LaoPo

[mumbu]

Yields are in inverse proportion to the price of bonds. In other words, investors wanted lower price and higher return on government bonds. Put it simply: investors are no longer interested in financing Thai government debt.

Thailand Scraps Bond Sale After Yields Surge, Central Bank Says

By David Yong

June 6 (Bloomberg) -- Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said.

The government scrapped the sale of debt maturing in 2024 after yields surged to 4.9 percent, Yanyong Damrongsiri, a central bank spokesman said in a phone interview from Bangkok. The securities yielded 4.555 percent at the previous sale on May 29 and 4.169 percent at an auction on May 23.

The central bank manages debt auctions on behalf of the government.

To contact the reporter on this story: David Yong in Kuala Lumpur at [email protected] .

Last Updated: June 6, 2007 03:02 EDT

What a load of crap. Pathetic attempt to spin things. The simple truth of the matter is that BoT is not willing to pay 4.9% in yields. That's all. What a load of spin BS.

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

[Dakhar]

How in the world do these experts determine & seperate economic down fall from "political causes/worries" to oil and other issues that also cause economic nose dives?

Fact finding about farmers I would imagine is a little more difficult. They are not really all that organized compared to other sectors.

Either way, Thialand is at the back of the bus, trouble is.... they like it there.

Could you imagine being in TG's shoes.... well I couldn't fit them size 6 too small.... but metaphorically, the guy is getting his degree in the US to go back to Thailand to earn his millions.... but there is no economy to support such dreams.

That has got to stink. It would be much like studying all about gasoline, graduate, only to discover gasoline has been replaced by hydrogen.

[Dakhar]

Yields are in inverse proportion to the price of bonds. In other words, investors wanted lower price and higher return on government bonds. Put it simply: investors are no longer interested in financing Thai government debt.

Thailand Scraps Bond Sale After Yields Surge, Central Bank Says

By David Yong

June 6 (Bloomberg) -- Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said.

The government scrapped the sale of debt maturing in 2024 after yields surged to 4.9 percent, Yanyong Damrongsiri, a central bank spokesman said in a phone interview from Bangkok. The securities yielded 4.555 percent at the previous sale on May 29 and 4.169 percent at an auction on May 23.

The central bank manages debt auctions on behalf of the government.

To contact the reporter on this story: David Yong in Kuala Lumpur at [email protected] .

Last Updated: June 6, 2007 03:02 EDT

What a load of crap. Pathetic attempt to spin things. The simple truth of the matter is that BoT is not willing to pay 4.9% in yields. That's all. What a load of spin BS.

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

I have to agree with you M. I know of a Thai proffesor, PhD, lived in the states over 15 years, married to a non-Thai, and she couldn't write a 4 word sentence without any mistakes. She is still in the states, and every once in a while I get one of her PPT presentations and she still dots them with English errors.

There is something fishy about this TG, metaphorically speaking. I do not mean he is smelly or slimey or would eat his own young or something.

[ThaiGoon]

Thaigoon: would appreciate it if you can post some positive news about the Agricultural industry,where 50% of the Thai Labor force is trying to survive and make a living, instead bringing news about wishful thinking of some poll by the Business and Economic Forecasting Centre of the University of the Thai Chamber of Commerce* or another Japanese investment.

It would help to bring my worries about the majority of Thai down...

Where is your concern about your fellow countrymen/women/children in the poor areas of Thailand ?

Why do you always bring news about industrial and commercial business and 'forget' the news about the bad situation in Agriculture ?

If you would be fair you wouldn't just post your rosy newspaper articles but the reality as well. We all live in a real world not a rosy world.

So let's have the growth and prosperous figures in Agriculture and make the farmers happy, ok?

*BTW isn't it strange there is a "University of the Thai Chamber of Commerce"...

LaoPo

LaoPo, I can only post what's being reported in English by the news media. And as far as the positive news in the agriculture industry is concerned, last I read, Thailand is well on its way to export more than 9 million tons of rice this year (which will be a new record.) Also the prices of rubber are also expected to remain high (in the 70-80 Baht/Kilo range) for the rest of the year, and that's very good news for Thai rubber tree planters. From what I understand, thanks to this, the consumer purchasing power in the South (except for the troubled areas of course) hasn't been changed much compared to last year.

Of course, there are still certain sectors in the Thai economy where people have been struggling, but obviously there are still other sectors where things have been quite all right as well. And from what I understand this topic is about the the Thai economy being in crisis, ie everything is in very bad shape which apparently is NOT what's really happening in the real reality. ;-)))

I think it would be fair if some farangs (who for some reason really really "care" about Thai economy) really look at all this with an open mind, instead of having to resort to their spin BS everytime there's good news about the Thai economy. ;-))))

As for the University of the Thai Chamber of Commerce's survey, it's actually the same monthly survey that previously reported all the bad news and the sentiments among Thai businessmen. And I didn't see any of you caring farangs bothered to ask what University of the Thai Chamber of Commerce was back then. You caring and loving farangs only began to notice it when it started to report good news. ;-))) And I think that's kind of interesting in itself. ;-)))))

Edited June 8, 2007 by ThaiGoon

[mumbu]

Yields are in inverse proportion to the price of bonds. In other words, investors wanted lower price and higher return on government bonds. Put it simply: investors are no longer interested in financing Thai government debt.

Thailand Scraps Bond Sale After Yields Surge, Central Bank Says

By David Yong

June 6 (Bloomberg) -- Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said.

The government scrapped the sale of debt maturing in 2024 after yields surged to 4.9 percent, Yanyong Damrongsiri, a central bank spokesman said in a phone interview from Bangkok. The securities yielded 4.555 percent at the previous sale on May 29 and 4.169 percent at an auction on May 23.

The central bank manages debt auctions on behalf of the government.

To contact the reporter on this story: David Yong in Kuala Lumpur at [email protected] .

Last Updated: June 6, 2007 03:02 EDT

What a load of crap. Pathetic attempt to spin things. The simple truth of the matter is that BoT is not willing to pay 4.9% in yields. That's all. What a load of spin BS.

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

Without acknowledging that the Thai economy is going to generate much lower tax revenues due to its precipitous decline caused by the coup and its aftermath, the Cabinet has approved raising the deficit for 2008 to 165 Billion baht, which is a whopping 45 Billion more than was budgeted just a few months ago in February.

According to the reports: "Government spending is expected to rise by Bt25 billion from the initial budget projection, to Bt1.660 trillion, while revenue collection is expected to fall short of the previous target by Bt20 billion to Bt1.495 trillion."

http://www.nationmultimedia.com/breakingne...newsid=30036093

It is not the question what BOT willing or not willing to pay. They need to cover the growing budget deficit and it is for market (through the action of investors) to decide what THEY NEED TO PAY. It would be a huge event if US treasurey needed to scrap the auction of US bonds due to lack of buyers.

[Prakanong]

Yields are in inverse proportion to the price of bonds. In other words, investors wanted lower price and higher return on government bonds. Put it simply: investors are no longer interested in financing Thai government debt.

Thailand Scraps Bond Sale After Yields Surge, Central Bank Says

By David Yong

June 6 (Bloomberg) -- Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said.

The government scrapped the sale of debt maturing in 2024 after yields surged to 4.9 percent, Yanyong Damrongsiri, a central bank spokesman said in a phone interview from Bangkok. The securities yielded 4.555 percent at the previous sale on May 29 and 4.169 percent at an auction on May 23.

The central bank manages debt auctions on behalf of the government.

To contact the reporter on this story: David Yong in Kuala Lumpur at [email protected] .

Last Updated: June 6, 2007 03:02 EDT

What a load of crap. Pathetic attempt to spin things. The simple truth of the matter is that BoT is not willing to pay 4.9% in yields. That's all. What a load of spin BS.

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

[ThaiGoon]

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

Mumbu, it's obvious in the article that the investors wanted to buy bonds with a 4.9% yield, and that was the demand that the BoT was not willing meet. You didn't really have to be a genius in economy to see this. To say that " investors are no longer interested in financing Thai government debt" was just absolutely absurd and it did go to show what kind of a pathetic life form (living in Thailand) you are.

And thanks for once again showing how ignorant you are to Thai people's ability to communicate in English. I thought there was no one else on here who's as dumb and ignorant as Dakhar.

As for me being anti-semitic, WHAT?

And mumbu, Bt20 billion short in tax revenues in a 1.66 trillion budget is not that much really. It's only about 1% of the total amount. Hardly a sign of a crisis. I hope you could do the math.

[LaoPo]

LaoPo, I can only post what's being reported in English by the news media. And as far as the positive news in the agriculture industry is concerned, last I read, Thailand is well on its way to export more than 9 million tons of rice this year (which will be a new record.) Also the prices of rubber are also expected to remain high (in the 70-80 Baht/Kilo range) for the rest of the year, and that's very good news for Thai rubber tree planters. From what I understand, thanks to this, the consumer purchasing power in the South (except for the troubled areas of course) hasn't been changed much compared to last year.

Of course, there are still certain sectors in the Thai economy where people have been struggling, but obviously there are still other sectors where things have been quite all right as well. And from what I understand this topic is about the the Thai economy being in crisis, ie everything is in very bad shape which apparently is NOT what's really happening in the real reality. ;-)))

I think it would be fair if some farangs (who for some reason really really "care" about Thai economy) really look at all this with an open mind, instead of having to resort to their spin BS everytime there's good news about the Thai economy. ;-))))

As for the University of the Thai Chamber of Commerce's survey, it's actually the same monthly survey that previously reported all the bad news and the sentiments among Thai businessmen. And I didn't see any of you caring farangs bothered to ask what University of the Thai Chamber of Commerce was back then. You caring and loving farangs only began to notice it when it started to report good news. ;-))) And I think that's kind of interesting in itself. ;-)))))

So, if the rice-export and rubber production are way up, why are the workers complaining ? Yes, it might be good news for the Thai rice- & rubber tree planters..but did the workers benefit...?

And, please, try to refrain from nasty descriptions like 'some farang' and 'You caring and loving farangs'.

It doesn't show much respect for the same farang in the country who welcomed you as a student, the USA. Or do you call your teachers and Professors at your University also 'some farang' ....?

LaoPo

[Prakanong]

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

Mumbu, it's obvious in the article that the investors wanted to buy bonds with a 4.9% yield, and that was the demand that the BoT was not willing meet. You didn't really have to be a genius in economy to see this. To say that " investors are no longer interested in financing Thai government debt" was just absolutely absurd and it did go to show what kind of a pathetic life form (living in Thailand) you are.

And thanks for once again showing how ignorant you are to Thai people's ability to communicate in English. I thought there was no one else on here who's as dumb and ignorant as Dakhar.

As for me being anti-semitic, WHAT?

And mumbu, Bt20 billion short in tax revenues in a 1.66 trillion budget is not that much really. It's only about 1% of the total amount. Hardly a sign of a crisis. I hope you could do the math.

No - it was the investors not willing to buy the bonds at a rate of less than 4.9% yield due to what they saw as risks in the Thai economy - why go for a less yield when possibly there are other markets with less risk involved?

The BOT made the offer and investors walked away - no spin.

Its a govt auction in bonds just like they have elsewhere in the world - a free market and the investors chose to walk away.

[ThaiGoon]

So, if the rice-export and rubber production are way up, why are the workers complaining ? Yes, it might be good news for the Thai rice- & rubber tree planters..but did the workers benefit...?

And, please, try to refrain from nasty descriptions like 'some farang' and 'You caring and loving farangs'.

It doesn't show much respect for the same farang in the country who welcomed you as a student, the USA. Or do you call your teachers and Professors at your University also 'some farang' ....?

LaoPo

LaoPo, my friends and advisor over here are good decent understanding people, why would I ever wanna say anything nasty to them? And what's wrong with calling you "caring and loving farang" when you youself have implied to be one (see your own posts)?

As for the workers benefiting for those, I'm not sure about the rice farmers, but the rubber tree planters, YES.

Prakanong, the yields on 10year bonds in the US have risen to more than 5% and simlar things are happening in Europe as well. So it's only natural that the investors would ask for a similar kind of yield from the BoT. Nothing to do with investors no longer wanting to finace Thai gov't debt. That's just BS.

[Prakanong]

"Prakanong, the yields on 10year bonds in the US have risen to more than 5% and simlar things are happening in Europe as well. So it's only natural that the investors would ask for a similar kind of yield from the BoT. Nothing to do with investors no longer wanting to finace Thai gov't debt. That's just BS. "

I am not reading their minds as to their reasons but they are actually acting rationally in the market if they can get higher yields at less risk somewhere else.

The BOT must be kidding themselves if they thought anybody would buy their bonds at a lower yield in a more volatile market currently.

Buying the bonds is financing Thai govt debt because that is exactly what Govt bonds are just as treasury bonds in the USA and UK are govt debt too - by walking away they are saying we do not want to buy any govt debt at that yield - better returns elsewhere at lower risks.

[LaoPo]

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

Mumbu, it's obvious in the article that the investors wanted to buy bonds with a 4.9% yield, and that was the demand that the BoT was not willing meet. You didn't really have to be a genius in economy to see this. To say that " investors are no longer interested in financing Thai government debt" was just absolutely absurd and it did go to show what kind of a pathetic life form (living in Thailand) you are.

And thanks for once again showing how ignorant you are to Thai people's ability to communicate in English. I thought there was no one else on here who's as dumb and ignorant as Dakhar.

As for me being anti-semitic, WHAT?

And mumbu, Bt20 billion short in tax revenues in a 1.66 trillion budget is not that much really. It's only about 1% of the total amount. Hardly a sign of a crisis. I hope you could do the math.

No - it was the investors not willing to buy the bonds at a rate of less than 4.9% yield due to what they saw as risks in the Thai economy - why go for a less yield when possibly there are other markets with less risk involved?

The BOT made the offer and investors walked away - no spin.

Its a govt auction in bonds just like they have elsewhere in the world - a free market and the investors chose to walk away.

Other markets with less risk involved?....like here:?

US STOCKS-Indexes sink as U.S. bond yields soar

"Shares of companies that pay high dividends, including telecommunications provider AT&T Inc. and utilities, fell as they faced stiffer competition from bonds."

http://today.reuters.com/news/articleinves...2-CompanyNews-3

I think the investors know their markets a little better than our friend Thaigoon...

Buying Thai debt bonds is financing Thai debt and it's up to the investors to buy or not, but the wording: "the Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said" is a nice way for the BoT to save face...

LaoPo

[ThaiGoon]

Didn't I just say the the US bond yields have risen to more than 5 percent?

[wolfmanjack]

OPINION / THAILAND'S ECONOMIC PROBLEMS _ PART II

The trouble with the strong baht phenomenon

This second of a three-part article on the Thai economy deals with the troubles in the financial system and the effects of a strong baht

By CHET CHAOVISIDHA

Continuing from the first instalment on the state of the Thai economy published yesterday, we carry on with our investigation of the causes for the current state of economic malaise: The large-scale industrial and commercial enterprises are primarily supported by their superior technical know-how, strong financial position and more efficient management and operations, in a spirit congruous with the modern, knowledge-based business world. The local retailing sector has virtually been clobbered by the foreign retailing chainstore giants, as witnessed by the disapperance of countless traditional local mom-and-pop stores all over the country.

While long-term merits and defects of this continuing displacement of the local small shops by the foreign retailing chainstore giants are still being debated, and further evidence is required to substantiate the claim that this situation will eventually lead to a long-term increase in efficiency in the retailing sector as a whole, with net positive benefits ultimately accruing to the economy _ the short-term prospect is quite clear, as evidenced by the loss of business, jobs and livelihood of a substantial proportion of the local retailing community previously engaged in this sector.

The tourism industry is also suffering a setback, as growth in this sector has not met earlier expectations, partly as a consequence of insurgency in the South, arson activities against schools in the Northeast and the threat of sporadic bombings in the central region and the capital.

Besides, this sector has also been most acutely plagued by the ''expansion without employment'' phenomenon, which ascribes expansion in output and income to increased productivity attributed to an advancement in technology and the utlisation of modern, labour-saving machinery and telecommunications equipment, especially in the high-technology service activities.

Hence the past several years have witnessed the expansion in service activities with correspondingly little or much less than a proportionate increase in employment in this sector _ a troublesome tendency, considering that this sector has traditionally been the most progressive and dynamic in its employment-creation capacity and ability to absorb new entrants into the labour force.

On top of all this, the real sector is also inflicted with the so-called ''household debt'' problem. Over the past several years, induced by the previous government's populist policies, household debts have increased tremendously.

On average, they exceed household income earnings by a staggering margin. Since most of these indebted households belong to the lower- and middle-income class and the grassroots echelon of society _ and their income-earning potential is well below the level required to meet their debt obligations _ the situation presents a serious problem for policy-makers.

Why? Because by its nature, this kind of problem becomes increasingly more difficult to deal with under recessionary conditions, as the current economic downturn tends to further aggravate the debtors' situation by putting their job security, income and livelihood at risk.

As an increasing number of households falls into this category, and as their debt burden accumulates with no prospect of improvement of income in sight, they will be likely to start calling upon the authorities to come up with the necessary funds to bail them out.

Unfortunately, such a policy action is unlikely to materialise, on account of the government's precarious fiscal and financial position.

Finally, there is also a genuine concern relating to the long-term growth of the Thai economy.

The growth in GDP is largely attributable to the quantity and quality of labour input and investment or capital accumulation. In the case of Thailand, the investment in new plants and more productive machnery and equipment is the chief contributor to our GDP growth. As reported by a government agency, contribution by a rise in productivity remains rather limited. In this respect, an additional important statistic can give a broader and more relevant perspective: the average rate of economic growth of the past years since 1997 has been consistently below that of the similar interval leading up to the 1997 crisis.

This suggests that the Thai private sector has become more conservative and cautious about over-investing in the same reckless fashion as it did during the years prior to the 1997 crisis.

In this day and age, various countries strive for a high rate of growth and lower cost of production through an increase in productivity. Raise their competitive edge, to be precise. They recognise that the innovation and investment to raise productivity and competitiveness are today's only answer to tomorrow's sustainable growth.

Thailand is an open economy with exports making up roughly 60% of the GDP.

As our competitive edge used to lie in cheap labour, a factor which no longer holds true today, the country's relatively low rate of investment plus slow rise in productivity under the existing, competitive global conditions almost translates to dying a slow economic death. Other emerging countries will soon sweep past Thailand in the economic race to world markets.

The financial sector has, over the past several years, assumed a new complexion in its structure, organisation, and operation.

Since the 1997 financial crisis and the tragedy that followed, a number of local commercial banks and major non-bank financial institutions have fallen into foreign ownership. These foreign majority-owned financial institutions tend to follow modern banking principles and, more often than not, lend on the bases of project feasibility, management ability and good corporate governance, as opposed to traditional banking practices which tend to extend loans to borrowers on the basis of personal relationship and collateral-asset availability.

As a result, the existing financial system is characterised by a situation in which most large-scale enterprises with superior technical know-how, efficient and prudent financial management and operations, a strong financial position and accurate perception of the current and future economic and business outlook, generally find themselves needing less credit from financial institutions. This is despite the latter's willingness to lend to them as they are attracted by their appearance of efficiency and superior performance.

On the contrary, medium- and small-sized business find themselves less able to obtain additional credit for their cash-strapped operations. Potential lenders, with the exception of government-owned financial institutions, look unfavourably on their traditional-style management and operation and are unwilling to extend additional credit, be it asset-based or otherwise.

Another aspect of the financial system is that although technically these foreign majority-owned financial institutions are subject to the same regulation and supervision of the central bank, in practice, they are obligated to attain the objectives and follow the policy guidelines of their overseas parent banks.

Hence the existence of several foreign majority-owned financial institutions signifies a tacit understanding that the existing financial system has become less amenable to the central bank's control. As a result, monetary policy actions have been rendered less effective than previously.

The public sector is currently plagued with a wobbling fiscal position, an inevitable outcome of a weakening economy and declining tax revenues. Additionally, most of the state-owned banks and so-called semi-financial institutions have been seriously weakened by the financial burden imposed upon them by the previous government's free spending and giveaway campaigns.

The upshot is that fiscal policy is subject to a rigid constraint, as a severe limitation has been imposed upon them by the relative scarcity of fiscal and financial resources available.

Inflation has not been a serious threat over the past years, in spite of soaring energy prices and rises in transport and distribution costs. The situation could have been worse had it not been for the working of the strong exchange rate of the baht, which operates to prevent domestic energy prices from going up as high as they could, and would, have. Against the generally unpromising economic backdrop, this could almost be regarded as a bright spot.

Lately though, inflation has begun to rear its ugly head once again. The external sector is at present undergoing a painful experience of the strong-baht phenomenon.

The trouble with the strong baht is that it tends to make for a decline in our exports of goods and services and a rise in imports. This has the effect of depressing our domestic income, production, output and employment.

The reduction, in turn, leads to a fall in consumption and investment expenditure as a result of lower household income and business profitability, thus setting off further rounds of decline in income, production, output, employment, and consumption and investment, until the process finally comes to an end through the income-expenditure interacting mechanism.

This situation has been the outcome of many complex circumstances and an interplay of a host of variables. In the first place, we are being squeezed by a weak dollar as well as a weak yen. Historically, the dollar and the yen moved in opposite directions. As a result, the adverse effect of the former on the performance of our external sector, in terms of exports and imports, was usually and, to a large extent, negated by the latter, and vice versa.

Strangely, the current situation is one in which dollar is weak against the baht and the yen is weak against the dollar and also against the baht. So, conceptually, our exports are supposed to be discouraged while imports encouraged.

Fortunately, Japan's economy has been recovering from its lengthy doldrums. Its increasingly more robust economy has prevented the growth of our exports from decelerating as much as they would have.

Chet Chaovisidha is an economist, a former MP for Bangkok and an economic adviser to several past governments.

The final instalment of this article will be published tomorrow.

Edited June 8, 2007 by wolfmanjack

[mumbu]

Yields are in inverse proportion to the price of bonds. In other words, investors wanted lower price and higher return on government bonds. Put it simply: investors are no longer interested in financing Thai government debt.

Thailand Scraps Bond Sale After Yields Surge, Central Bank Says

By David Yong

June 6 (Bloomberg) -- Bank of Thailand canceled a scheduled 5 billion baht ($152.4 million) bond sale today because investors demanded too high a yield at the auction, the bank said.

The government scrapped the sale of debt maturing in 2024 after yields surged to 4.9 percent, Yanyong Damrongsiri, a central bank spokesman said in a phone interview from Bangkok. The securities yielded 4.555 percent at the previous sale on May 29 and 4.169 percent at an auction on May 23.

The central bank manages debt auctions on behalf of the government.

To contact the reporter on this story: David Yong in Kuala Lumpur at [email protected] .

Last Updated: June 6, 2007 03:02 EDT

What a load of crap. Pathetic attempt to spin things. The simple truth of the matter is that BoT is not willing to pay 4.9% in yields. That's all. What a load of spin BS.

Are you for real? I already mentioned that you have no idea about economics. However, I can say now more. I do not believe that you are Thai. First of all, I know many Thai students and have my own doing Ph D under my supervision.

I do not believe that any of them ever use the language that you allow yourself. Secondly, very few Thais would be interested in participating in farang dominated message boards. Thirdly, you would be the first Thai I bumbed into who is open antisemite ( I refer to one of your previous posts) unless, of course, you are a kind of radical muslim.

In any case, just wacko with bizzare agenda. Case closed.

I have to agree with you M. I know of a Thai proffesor, PhD, lived in the states over 15 years, married to a non-Thai, and she couldn't write a 4 word sentence without any mistakes. She is still in the states, and every once in a while I get one of her PPT presentations and she still dots them with English errors.

There is something fishy about this TG, metaphorically speaking. I do not mean he is smelly or slimey or would eat his own young or something.

Dakhar,

What I mean here is that TG is not polite (to put it mildly) which is highly nontypical for Thais. Plenty of them (especially after staying for a long time in an English-speaking country) speak very good English. Interestingly, NONE of our Thai students want to go back (and especially the most patriotic ones). But if they are on Thai government scholarship,

they have to go back. I have over here regular conversations with a student from Hat Yai (South)and his views are somewhere between TG and Plus (minus their anti-semitism, of course). Otherwise, sweet Thai guy.He obviously was very upset about recent bombings in Hat Yai. We wanted to keep here for one more year (in fact, they can stay for two more years after getting Ph D if they are on Thai government scholarship) but, unfortunately, we do not have any visiting positions. Thus, he goes back to Hat Yai...

[ThaiGoon]

Mumbu, I'm sure they were polite to you because they haven't read what you said about Thailand on this forum. And please don't spread you lie about Thai students (especially the most patriotic ones?) don't wanna go back to Thailand. A bunch of my friends just went back over the last year or so. Typical BS.

The most patriotic Thai students in the US don't wanna go back to Thailand? What an oxymoron.

Edited June 8, 2007 by ThaiGoon

[quiksilva]

Hence the past several years have witnessed the expansion in service activities with correspondingly little or much less than a proportionate increase in employment in this sector _ a troublesome tendency, considering that this sector has traditionally been the most progressive and dynamic in its employment-creation capacity and ability to absorb new entrants into the labour force.

Hmm really? So how can demand for office space (the traditional accommodation for the service industry) has been so strong that market rents have had to increase by over 50% over the last 3 years?

What's more this increase has been witnessed despite almost 200,000 square meters of supply entering the market each year, yet vacancy rates have remained stable. So if all these firms have not been putting more bums on seats what on earth have all these companies been doing with all this extra office space?

Edited June 8, 2007 by quiksilva

[Dakhar]

TG is just plain rude, is there any moderators that care? Oh and TG, you may think I am dumb, and yes my writing skill are horrid, but the people I work around call me "Doctor," for a reason keep that in mind..... student.

M. I have seen the PhD students milk the disartation time as long as possible too. In fact my college hired an ABD, and finally the college fired her because she simply would not finish her disartation. Why, because if she would have finished, she would have finished her degree, and poof out of America she would go.

I have been told, and I do not know if it is a fact, but Thais of all foreing students, are most likely to return home after their education in the US. Now, it used to be that the Chinese would set up a tent and refuse to leave, but now because of the economy turn around.... they are showing a trend to go back home. (believe it or not, my father is a vice president of a college back home, so I have some inside views on this topic)

Oh back to TG, I would like to thank you in advance for returning back to your home country. America obviosly will be fine without you, and Thailand desparatley needs more educated folks just like you. So hurry up with your studies. Please.

[ThaiGoon]

the people I work around call me "Doctor,"

Sorry but ...

[JR Texas]

TG is just plain rude, is there any moderators that care? Oh and TG, you may think I am dumb, and yes my writing skill are horrid, but the people I work around call me "Doctor," for a reason keep that in mind..... student.

M. I have seen the PhD students milk the disartation time as long as possible too. In fact my college hired an ABD, and finally the college fired her because she simply would not finish her disartation. Why, because if she would have finished, she would have finished her degree, and poof out of America she would go.

I have been told, and I do not know if it is a fact, but Thais of all foreing students, are most likely to return home after their education in the US. Now, it used to be that the Chinese would set up a tent and refuse to leave, but now because of the economy turn around.... they are showing a trend to go back home. (believe it or not, my father is a vice president of a college back home, so I have some inside views on this topic)

Oh back to TG, I would like to thank you in advance for returning back to your home country. America obviosly will be fine without you, and Thailand desparatley needs more educated folks just like you. So hurry up with your studies. Please.

JR Texas to Dakhar: Don't worry about TG......he takes the same approach to virtually everything I post.