The Thai Economy Is In Crisis

[LaoPo]

Gents, it's not a US sub prime mortgage crisis anymore (although it started there); it's effecting world wide markets, Financials and Banks (and SET) which is worrying.

Bank CEO warns of German crisis

LONDON (MarketWatch) -- The chief executive of one of Germany's largest state-backed banks warned that foreigners were increasingly loath to extend credit to financial institutions in Europe's largest economy, which could spark a crisis.

"We sense reluctance on the part of foreign partners to extend credit to German banks," WestLB CEO Alexander Stuhlmann told journalists on the sidelines of a bank event, according to wire service reports.

"If we have a banking crisis in Germany with other countries cutting us off, then other banks will also face difficulties."

His comments come days after a German lender, SachsenLB, said it required a credit line of 17.3 billion euros ($23.2 billion) because of the investments it had made in securities affected by the U.S. subprime mortgage crisis. IKB Deutsche Industriebank required a similar bailout.

Both SachsenLB and IKB operated companies called conduits that issued short-term paper and then reinvested the proceeds in higher-yield, longer-term debt -- such as the residential mortgage-backed securities that have declined in value as poorer Americans default on risky mortgages.

A U.K. fund on Monday disclosed a similar problem.

But unlike the U.K. fund, SachsenLB and IKB were all or partly under government control, and that's one of the problems in Germany.

Germany is widely perceived as an "overbanked" country: there are more banks in Germany than in the U.K., France and Italy combined.

From: http://www.marketwatch.com/news/story/bank...6E087AB1D5EE%7D

Note: if there would be a banking crisis in Germany, one of the engines of Europe, we're in deep <deleted> and the rest of world will notice.

Apart from that, Central Banks are facing difficult decisions to make. Will the ECB, as expected, raise the interest...? Will Japan raise the rate from 0.50% to 0.75%, as predicted (and MUST!)....?......difficult times ahead

LaoPo

[highdiver]

midas you seem to have got it right this time even though your sarcasm

the fall of last week was not a mirror and i have never used that term. the fall was the reaction of forign investors pulling out and the whole world was doing the same thing... what i said was that it has nothing to do with thailand but more with the subprime crisis.

after the closure yesterday it has come apparen that this crisis is not over and the markets in Asia have reacted accordingly

the stock markets today in asia are all down and they are in europe as well, the us unless some big development from the Feds will probebly go down as well.

the main reason is that the little people who dont know whats going on and are fed by fear are withdrawing and running to cash.

this is wat is creating the crisis ... every one wants the cash and they want it now.

As for the effect of the referndum... welll it just proves once and for all that politics have nothing to do with decisions of investors.

The Asian markets are not all down today ? As LaoPo mentioned Japan, Hong Kong, China, S Korea, Australia, NZ were up ? May be I used the incorrect terminology when I said " mirrored " but if you look back at your posts last week

you will see you insisted that there was only one reason the market was going down in Thailand ( last week ) and that

was due to the downward market in US - but you can't use that argument today ?

Thailand -3.15%, Indonesia -2.38%, India -3.22%, Singapore -2.82%, Malaysia -0.96%, Taiwan -0.43%

apart from thailand no one ellse is having political influence, and the July exports have actualy risen not fell.

I say again it is the subprime panic.

thailand is reletively a small economy and the exit of investors is very rapid as they try and head for cash or redeeming in developing countries to take positions in devoped cuntries.

Vegas Vic and I discussed this long way back that this exit will have an impact on samller economies such as thailand.

smart invesotrs will now wait for the bottom slump ,and then buy sucesfull companies stocks for a lot cheaper.

then again ...if you prefer you can ask your guru to explain this.

[highdiver]

Gents, it's not a US sub prime mortgage crisis anymore (although it started there); it's effecting world wide markets, Financials and Banks (and SET) which is worrying.

Bank CEO warns of German crisis

LONDON (MarketWatch) -- The chief executive of one of Germany's largest state-backed banks warned that foreigners were increasingly loath to extend credit to financial institutions in Europe's largest economy, which could spark a crisis.

"We sense reluctance on the part of foreign partners to extend credit to German banks," WestLB CEO Alexander Stuhlmann told journalists on the sidelines of a bank event, according to wire service reports.

"If we have a banking crisis in Germany with other countries cutting us off, then other banks will also face difficulties."

His comments come days after a German lender, SachsenLB, said it required a credit line of 17.3 billion euros ($23.2 billion) because of the investments it had made in securities affected by the U.S. subprime mortgage crisis. IKB Deutsche Industriebank required a similar bailout.

Both SachsenLB and IKB operated companies called conduits that issued short-term paper and then reinvested the proceeds in higher-yield, longer-term debt -- such as the residential mortgage-backed securities that have declined in value as poorer Americans default on risky mortgages.

A U.K. fund on Monday disclosed a similar problem.

But unlike the U.K. fund, SachsenLB and IKB were all or partly under government control, and that's one of the problems in Germany.

Germany is widely perceived as an "overbanked" country: there are more banks in Germany than in the U.K., France and Italy combined.

From: http://www.marketwatch.com/news/story/bank...6E087AB1D5EE%7D

Note: if there would be a banking crisis in Germany, one of the engines of Europe, we're in deep <deleted> and the rest of world will notice.

Apart from that, Central Banks are facing difficult decisions to make. Will the ECB, as expected, raise the interest...? Will Japan raise the rate from 0.50% to 0.75%, as predicted (and MUST!)....?......difficult times ahead

LaoPo

I agee with you.

and this does not make it better

U.S. FINANCE BOSSES MEET

Tue Aug 21, 2007 5:24 AM ET

U.S. policymakers will hold centre stage on Tuesday -- Paulson, Federal Reserve Chairman Ben Bernanke and Senate Banking Committee Chairman Chris Dodd are due to meet later to discuss conditions in financial markets.

The closed-door meeting is to take place at 1400 GMT and Dodd, a Democrat from Connecticut, is expected to hold a news conference afterwards. [nN20297492]

Speculation is feverish that the Federal Reserve may cut the federal funds rate, its key policy rate, from 5.25 percent at its Sept. 18 meeting or even earlier. [nT287686]

On Friday, it cut the discount rate that governs Fed loans to banks by half a percentage point to 5.75 percent, a move which helped bloodied stock markets claw back lost ground.

Other central banks remained watchful as doubts about the health of financial markets lingered. Australia's central bank again pumped sizeable amounts of cash into its banking system to help meet short-term mismatches in liquidity.

The New Zealand Debt Management Office said it would offer an extra NZ$100 million ($70 million) in short-term bonds this week to satisfy a surge in demand amid liquidity concerns.

Stock markets continued to trade with uncertainty. European shares edged lower in early trade on Tuesday, ending a two-session rally, with financial institutions leading the way down on renewed worries over the credit markets.

and the UK has not yet taken position altough its sub prime crisis is maybe greater then in US.

[LaoPo]

And, if it's not enough, yet:

U.S. Home Foreclosures Almost Doubled in July

Aug. 21 (Bloomberg) -- U.S. homes in the foreclosure process almost doubled in July from a year earlier as variable-rate mortgages reset higher, leaving more homeowners unable to make their payments, according to RealtyTrac Inc., a seller of foreclosure data.

Lenders sent 179,599 notices of default, scheduled auctions or bank repossessions last month, a 93 percent increase, with the highest rates per household in Nevada, Georgia and Michigan. California, Florida and Michigan had the most homes caught in the foreclosure process, Irvine, California-based RealtyTrac said today in a statement.

U.S. home sales dropped to a four-year low in the second quarter and prices fell in a third of U.S. cities, according to the National Association of Realtors. Foreclosure rates are one indication of how many more homes may flood the falling market as banks sell those they take over. In June, a nearly nine-month supply of houses were on the market, up from a four-and-a half- month supply two years ago.

``We are estimating that we will see about 2 million foreclosure filings this year,'' said Rick Sharga, RealtyTrac's executive vice president for marketing. ``We honestly don't see it getting much better before it gets a little bit worse.''

California foreclosure filings totaled 39,013 in July, about triple the previous year. The state led the nation in foreclosure for the seventh consecutive month.

Florida ranked second with a 78 percent increase to 19,179 foreclosure filings. Michigan replaced Ohio as the state with the third highest number foreclosures: 13,979.

Rest here:

http://www.bloomberg.com/apps/news?pid=206...id=asWpGbNLfpJc

Note:

Estimating about 2 million foreclosures in 2007

LaoPo

[midas]

Note: if there would be a banking crisis in Germany, one of the engines of Europe, we're in deep <deleted> and the rest of world will notice.

Apart from that, Central Banks are facing difficult decisions to make. Will the ECB, as expected, raise the interest...? Will Japan raise the rate from 0.50% to 0.75%, as predicted (and MUST!)....?......difficult times ahead

LaoPo

And thing are not looking rosy in Spain :-

Spanish Real Estate Market Shares Collapse

news date: Wednesday, June 25, 2007

The Financial Times reports that Spain's overpriced property stock market came crashing down yesterday, with panic selling of real estate stocks signalling the end of a 10-year-old construction boom.

The sell-off dragged down related industries such as construction and banking and caused a 2.7 per cent drop in the Ibex 35 index of leading shares. The fall also rippled through other European markets as investors worried about its knock-on effects. Meanwhile, the heavy debt load of some real estate groups and worries about oversupply - with 800,000 new housing starts approved for this year, - also contributed to the sell-off, traders said.

[LaoPo]

Note: if there would be a banking crisis in Germany, one of the engines of Europe, we're in deep <deleted> and the rest of world will notice.

Apart from that, Central Banks are facing difficult decisions to make. Will the ECB, as expected, raise the interest...? Will Japan raise the rate from 0.50% to 0.75%, as predicted (and MUST!)....?......difficult times ahead

LaoPo

And thing are not looking rosy in Spain :-

Spanish Real Estate Market Shares Collapse

news date: Wednesday, June 25, 2007

The Financial Times reports that Spain's overpriced property stock market came crashing down yesterday, with panic selling of real estate stocks signalling the end of a 10-year-old construction boom.

The sell-off dragged down related industries such as construction and banking and caused a 2.7 per cent drop in the Ibex 35 index of leading shares. The fall also rippled through other European markets as investors worried about its knock-on effects. Meanwhile, the heavy debt load of some real estate groups and worries about oversupply - with 800,000 new housing starts approved for this year, - also contributed to the sell-off, traders said.

Can you post the link please ?

LaoPo

[LaoPo]

U.S. Stock-Index Futures Gain on Rate-Cut, Takeover Speculation

Aug. 21 (Bloomberg) -- U.S. stock-index futures rose on speculation the Federal Reserve will cut interest rates and Warren Buffett may buy Countrywide Financial Corp.

Countrywide, the largest U.S. mortgage lender whose shares have lost 30 percent this month amid a liquidity crisis, climbed after the Wall Street Journal said it may be a target for Buffett's Berkshire Hathaway Inc.

Countrywide added $1.19, or 6 percent, to $21. Berkshire, [Warren Buffett] which is sitting on almost $50 billion of cash, is seen as one of the few buyers in the market as the subprime and credit-market crises force asset sales, the Wall Street Journal said in its ``Heard on the Street'' column.

http://www.bloomberg.com/apps/news?pid=206...&refer=news

Note:

That would ease the markets a bit, if true...

LaoPo

[A_Traveller]

Re FT article on Spain,

Spanish property boom ends

By Leslie Crawford in Madrid

Published: April 24 2007 21:32 | Last updated: April 24 2007 21:32

Article is subscriber only, however look likes a site re-published it.

Spanish property Site

HTH

Regards

[xbusman]

midas you seem to have got it right this time even though your sarcasm

the fall of last week was not a mirror and i have never used that term. the fall was the reaction of forign investors pulling out and the whole world was doing the same thing... what i said was that it has nothing to do with thailand but more with the subprime crisis.

after the closure yesterday it has come apparen that this crisis is not over and the markets in Asia have reacted accordingly

the stock markets today in asia are all down and they are in europe as well, the us unless some big development from the Feds will probebly go down as well.

the main reason is that the little people who dont know whats going on and are fed by fear are withdrawing and running to cash.

this is wat is creating the crisis ... every one wants the cash and they want it now.

As for the effect of the referndum... welll it just proves once and for all that politics have nothing to do with decisions of investors.

The Asian markets are not all down today ? As LaoPo mentioned Japan, Hong Kong, China, S Korea, Australia, NZ were up ? May be I used the incorrect terminology when I said " mirrored " but if you look back at your posts last week

you will see you insisted that there was only one reason the market was going down in Thailand ( last week ) and that

was due to the downward market in US - but you can't use that argument today ?

Thailand -3.15%, Indonesia -2.38%, India -3.22%, Singapore -2.82%, Malaysia -0.96%, Taiwan -0.43%

apart from thailand no one ellse is having political influence, and the July exports have actualy risen not fell.

I say again it is the subprime panic.

thailand is reletively a small economy and the exit of investors is very rapid as they try and head for cash or redeeming in developing countries to take positions in devoped cuntries.

Vegas Vic and I discussed this long way back that this exit will have an impact on samller economies such as thailand.

smart invesotrs will now wait for the bottom slump ,and then buy sucesfull companies stocks for a lot cheaper.

then again ...if you prefer you can ask your guru to explain this.

Would you like to start the conversation about measuring exports in some bogus foreign currency again???? The only real measure of Thai exports in relation to economic trends is by consistently measuring them in local currency, in this case thai baht. If we measured exports in Zimbabwe dollars, we would have a lovely 200000% gain and feel lots better. However, when you adjust for currency and inflation, I think we can all agree that exports have shrunk this month. Now... that may be an anomaly. We wont know until we get a few more months data. However, I am guessing that if they are projecting a 12.5% increase in exports measured in US dollars that have depreciated around 20% year on year, that they too are forcasting a major shrinkage of exports.

So for once and for all, can we please keep Thai exports, Thai SET returns, and property prices in Thai Baht, for Gods sake we are in Thailand. Any other type of reporting is purely a sham.

So there.

[Mid]

meanwhile .......................

BoT says Thai exports will decrease in last half of 2007

Sunday 19 August 2007 03:58:34 PM (GMT+7:00)

BANGKOK, Aug 19 (TNA) - Thailand's exports during the second half of 2007 have been projected to retreat from the first half due to the sluggish economies of the country's trading partners, according to a senior official of the Bank of Thailand (BoT) speaking on Sunday.

Suchada Kirakul, assistant governor of BoT's Monetary Policy Group, said that a central bank report on inflation in July projected Thailand's exports during the second half of this year would be lower than during the first half and that this was in line with the general economies of the country's trading partners.

snip

MCOT Public Company Limited

well that's the engine of the economy according to the pundits , now what ????

>>'tis the best of my limited knowledge that the application fee is non-refundable and further costs will be incurred if successful ...........................

>>my hand is up as being unable to afford to gamble 95 k .

So, are we supposed to take your financial expertise seriously?

You just posted in the 'Why Do So Few Get Residency?' thread that 95,000 baht is too much for you to loose? Seems like you should get your own financial affairs in order before worrying about Thailand's!

No wonder there are so many posts from disgruntled and bitter people on here.

here's your chance , join in .........................

as if .............................

[Carmine6]

U.S. Stock-Index Futures Gain on Rate-Cut, Takeover Speculation

Aug. 21 (Bloomberg) -- U.S. stock-index futures rose on speculation the Federal Reserve will cut interest rates and Warren Buffett may buy Countrywide Financial Corp.

Countrywide, the largest U.S. mortgage lender whose shares have lost 30 percent this month amid a liquidity crisis, climbed after the Wall Street Journal said it may be a target for Buffett's Berkshire Hathaway Inc.

Countrywide added $1.19, or 6 percent, to $21. Berkshire, [Warren Buffett] which is sitting on almost $50 billion of cash, is seen as one of the few buyers in the market as the subprime and credit-market crises force asset sales, the Wall Street Journal said in its ``Heard on the Street'' column.

http://www.bloomberg.com/apps/news?pid=206...&refer=news

Note:

That would ease the markets a bit, if true...

LaoPo

Someone on either Bloomberg or CNBC World last night pointed out that the issues for European banks are a little different than the US banks. European banks are basically affected by their losses on holdings in the CDO's and bonds.

In the US, the banks were actually losing out the last several years as borrowers went to the Countrywides and other non-banking lenders. Since the banks actually have access to liquidity, they can continue lending while others are frozen (Countrywide being an exception.) In addition, as companies have to turn to the banks through creditlines instead of being able to issue cheap paper, the banks will benefit.

So the thought is that plain Jane regional US banks are worth looking at. Warren bought a bit of B of A, although it's not disclosed whether that was before or after the big decline. Now, I'm pretty sure he'll add to that. He bought his holdings in Wells Fargo Bank starting in the last housing crisis back in the early 90's.

[Carmine6]

meanwhile .......................

BoT says Thai exports will decrease in last half of 2007

Sunday 19 August 2007 03:58:34 PM (GMT+7:00)

BANGKOK, Aug 19 (TNA) - Thailand's exports during the second half of 2007 have been projected to retreat from the first half due to the sluggish economies of the country's trading partners, according to a senior official of the Bank of Thailand (BoT) speaking on Sunday.

Suchada Kirakul, assistant governor of BoT's Monetary Policy Group, said that a central bank report on inflation in July projected Thailand's exports during the second half of this year would be lower than during the first half and that this was in line with the general economies of the country's trading partners.

snip

MCOT Public Company Limited

well that's the engine of the economy according to the pundits , now what ????

>>'tis the best of my limited knowledge that the application fee is non-refundable and further costs will be incurred if successful ...........................

>>my hand is up as being unable to afford to gamble 95 k .

So, are we supposed to take your financial expertise seriously?

You just posted in the 'Why Do So Few Get Residency?' thread that 95,000 baht is too much for you to loose? Seems like you should get your own financial affairs in order before worrying about Thailand's!

No wonder there are so many posts from disgruntled and bitter people on here.

here's your chance , join in .........................

as if .............................

Discuss the thread topic instead of unrelated topics? What's become of TV?

I wonder how they came to the original conclusion which I think is right. Was it some economists sitting around a table? Did they call exporters and get their opinions? Do they have access to purchase order and other data?

Since the original report, we've got the reverse in the baht exchange rate trend, financial market issues around the world, and Chinese product safety issues. For those outside the US, the media is hyping recent health and safety issues with Chinese goods. First it was the poisoned pet food, then toothpaste, tires, seafood, and now toys. China is trying to fix that, but the train has left the station. Most recently, the owner of the factory responsible for lead paint in toys "committed suicide." Since the government executed the guy they blamed the pet food on, you have to wonder about that.

Thailand should hopefully pick up some of the agricultural/fishing fallout. Lowest price isn't going to matter if you can't sell the product. People have started asking if the fish came from China in restaurants. So I'd guess buyers are starting to look elsewhere.

I wonder if the Bank of Thailand has a different outlook now. Maybe overall flat instead of decline? Or a decline then recovery later in the year?

[VegasVic]

meanwhile .......................

BoT says Thai exports will decrease in last half of 2007

Sunday 19 August 2007 03:58:34 PM (GMT+7:00)

BANGKOK, Aug 19 (TNA) - Thailand's exports during the second half of 2007 have been projected to retreat from the first half due to the sluggish economies of the country's trading partners, according to a senior official of the Bank of Thailand (BoT) speaking on Sunday.

Suchada Kirakul, assistant governor of BoT's Monetary Policy Group, said that a central bank report on inflation in July projected Thailand's exports during the second half of this year would be lower than during the first half and that this was in line with the general economies of the country's trading partners.

snip

MCOT Public Company Limited

well that's the engine of the economy according to the pundits , now what ????

>>'tis the best of my limited knowledge that the application fee is non-refundable and further costs will be incurred if successful ...........................

>>my hand is up as being unable to afford to gamble 95 k .

So, are we supposed to take your financial expertise seriously?

You just posted in the 'Why Do So Few Get Residency?' thread that 95,000 baht is too much for you to loose? Seems like you should get your own financial affairs in order before worrying about Thailand's!

No wonder there are so many posts from disgruntled and bitter people on here.

here's your chance , join in .........................

as if .............................

Discuss the thread topic instead of unrelated topics? What's become of TV?

I wonder how they came to the original conclusion which I think is right. Was it some economists sitting around a table? Did they call exporters and get their opinions? Do they have access to purchase order and other data?

Since the original report, we've got the reverse in the baht exchange rate trend, financial market issues around the world, and Chinese product safety issues. For those outside the US, the media is hyping recent health and safety issues with Chinese goods. First it was the poisoned pet food, then toothpaste, tires, seafood, and now toys. China is trying to fix that, but the train has left the station. Most recently, the owner of the factory responsible for lead paint in toys "committed suicide." Since the government executed the guy they blamed the pet food on, you have to wonder about that.

Thailand should hopefully pick up some of the agricultural/fishing fallout. Lowest price isn't going to matter if you can't sell the product. People have started asking if the fish came from China in restaurants. So I'd guess buyers are starting to look elsewhere.

I wonder if the Bank of Thailand has a different outlook now. Maybe overall flat instead of decline? Or a decline then recovery later in the year?

In addition to a slowing world economy, China will indeed have all of the aformentioned issues to deal with along with the U.S. consumer becoming suspect of anything coming from China from this point on. The net result will be a substantial decrease in exports from China to the U.S., weather or not this translates into a boon for thai exorts to the U.S. has yet to be seen. Even though the baht has reversed its strengthening move recently, it is still too strong to give Thailand any competitive edge over Vietnam, Phillipines, Brazil,Ecuodor, ect.. As it stands right now, many thai exporters have squeezd profit margins just to maintain market share and even then market share is slipping away. If the baht returns to levels above 36/Dollar then the thai exporters might be able to take advantage of this situation, lets hope for the best as Thailand could use the shot in the arm right now.

[LaoPo]

In addition to a slowing world economy, China will indeed have all of the aformentioned issues to deal with along with the U.S. consumer becoming suspect of anything coming from China from this point on. The net result will be a substantial decrease in exports from China to the U.S., weather or not this translates into a boon for thai exorts to the U.S. has yet to be seen.

The ongoing 'issues' between the US & China are vice versa and there is a long list which could be mentioned of complaints about products from both countries, although I agree that the attention to 'bad' products is mainly focused on China now.

China fear over 'tainted' US[A] soya

http://news.bbc.co.uk/2/hi/asia-pacific/6958492.stm

and:

China warns on U.S. soy as Chinese goods under scrutiny

http://www.washingtonpost.com/wp-dyn/conte...7082200538.html

I think you agree that a 'substantial' decrease in exports will benefit nobody or no country; however, your quote 'substantial' is an overstatement.

But, maybe Thailand can pick up some of the exports, who knows, it's just a matter of time.

If the US sub prime crisis gets worse, people will buy less products anyway, where ever from.

LaoPo

[highdiver]

In addition to a slowing world economy, China will indeed have all of the aformentioned issues to deal with along with the U.S. consumer becoming suspect of anything coming from China from this point on. The net result will be a substantial decrease in exports from China to the U.S., weather or not this translates into a boon for thai exorts to the U.S. has yet to be seen.

The ongoing 'issues' between the US & China are vice versa and there is a long list which could be mentioned of complaints about products from both countries, although I agree that the attention to 'bad' products is mainly focused on China now.

China fear over 'tainted' US[A] soya

http://news.bbc.co.uk/2/hi/asia-pacific/6958492.stm

and:

China warns on U.S. soy as Chinese goods under scrutiny

http://www.washingtonpost.com/wp-dyn/conte...7082200538.html

I think you agree that a 'substantial' decrease in exports will benefit nobody or no country; however, your quote 'substantial' is an overstatement.

But, maybe Thailand can pick up some of the exports, who knows, it's just a matter of time.

If the US sub prime crisis gets worse, people will buy less products anyway, where ever from.

LaoPo

dont forget that thailand is still doing very well with exports even tough the baht has apreciated.

even with a sub prime crisis thailand will still do well in the long run as it exports food and basics and the world even if in a crisis will still need them.

[bingobongo]

it is confirmed, somchai will have to walk everywhere..........at least there will be less traffic....lol

Uncertainties drive motorcycle sales down 16 per cent

http://www.nationmultimedia.com/2007/08/23/business/business_30046139.php

[Carmine6]

In addition to a slowing world economy, China will indeed have all of the aformentioned issues to deal with along with the U.S. consumer becoming suspect of anything coming from China from this point on. The net result will be a substantial decrease in exports from China to the U.S., weather or not this translates into a boon for thai exorts to the U.S. has yet to be seen.

The ongoing 'issues' between the US & China are vice versa and there is a long list which could be mentioned of complaints about products from both countries, although I agree that the attention to 'bad' products is mainly focused on China now.

China fear over 'tainted' US[A] soya

http://news.bbc.co.uk/2/hi/asia-pacific/6958492.stm

and:

China warns on U.S. soy as Chinese goods under scrutiny

http://www.washingtonpost.com/wp-dyn/conte...7082200538.html

I think you agree that a 'substantial' decrease in exports will benefit nobody or no country; however, your quote 'substantial' is an overstatement.

But, maybe Thailand can pick up some of the exports, who knows, it's just a matter of time.

If the US sub prime crisis gets worse, people will buy less products anyway, where ever from.

LaoPo

I don't know, even normally level headed friends have mentioned concerns about Chinese goods lately. I think toys was the breaking point. If it hadn't been Mattel and products like Dora the Explorer, I think it would still be just a story, with no real impact on imports. But with the toys, the media gets to do all kinds of cut shots of the toys affected. Mattel's second recall was actually due to a design problem, not a product quality problem, but the media keeps lumping it together with the lead paint problem.

Here's a typical toy recall story from the AP and you'll see how deceptive it is:

http://www.msnbc.msn.com/id/20254745/

Nowhere does it note that the magnet issue was a design issue. It is implied that is the fault of the Chinese manufacturers when those products were built as designed by Mattel. Note the political angle:

“Another week, another recall of Chinese-made toys,” said Sen. Dick Durbin, D-Ill., who suggested detaining and inspecting all Chinese toy imports for lead paint. “We can’t wait any longer for China to crack down on its lax safety standards. This needs to stop now before more children and more families are put at risk.”

Now that US companies are going to take a closer look at their outsourced or sourced products, there's bound to be more recalls. Thai manufacturers and exporters will hopefully use this opportunity to benefit.

[Carmine6]

snip

So for once and for all, can we please keep Thai exports, Thai SET returns, and property prices in Thai Baht, for Gods sake we are in Thailand. Any other type of reporting is purely a sham.

So there.

http://www.nationmultimedia.com/2007/08/22...ss_30045975.php

July figures out:

Export growth falls in July

US problems contribute to worst figures in more than two years

"In the first half of the year, Thailand's exports rose at an average pace of 18 per cent, a remarkable performance in light of the baht's 7-per-cent appreciation against the dollar. But the country's exports in baht terms fell 4.6 per cent to Bt406 billion last month, the lowest figure for five years."

"Exports to the US fell 13.6 per cent year on year last month. Moreover, they fell 2 per cent in the first seven months of the year. "

"Exports of agricultural goods showed slowing growth last month, while exports of industrial goods continued to grow, with the exception of garments and steel.

Rice exports fell 21.6 per cent in volume and 10.9 per cent in value last month, while tapioca exports fell 35.1 per cent in volume and 10.3 per cent in value.

Exports of processed fruit and vegetables decreased 14.1 per cent in volume and 4.9 per cent in value."

Edit, forgot the headline.

Edited August 22, 2007 by Carmine6

[LaoPo]

I don't know, even normally level headed friends have mentioned concerns about Chinese goods lately. I think toys was the breaking point. If it hadn't been Mattel and products like Dora the Explorer, I think it would still be just a story, with no real impact on imports. But with the toys, the media gets to do all kinds of cut shots of the toys affected. Mattel's second recall was actually due to a design problem, not a product quality problem, but the media keeps lumping it together with the lead paint problem.

Here's a typical toy recall story from the AP and you'll see how deceptive it is:

http://www.msnbc.msn.com/id/20254745/

Nowhere does it note that the magnet issue was a design issue. It is implied that is the fault of the Chinese manufacturers when those products were built as designed by Mattel. Note the political angle:

“Another week, another recall of Chinese-made toys,” said Sen. Dick Durbin, D-Ill., who suggested detaining and inspecting all Chinese toy imports for lead paint. “We can’t wait any longer for China to crack down on its lax safety standards. This needs to stop now before more children and more families are put at risk.”

Now that US companies are going to take a closer look at their outsourced or sourced products, there's bound to be more recalls. Thai manufacturers and exporters will hopefully use this opportunity to benefit.

Good post, Carmine6 and spot on.

I'm the first to say it's a very bad sign that China products attract so much negative attention and it should, since it's unheard of that dangerous materials are found in toys and other consumer products. Maybe I should say: a good sign.

However, the hypocritical attitude by Mattel and others is disgusting since it's their own responsibility -also- to check, check and improve quality control, over-and-over again.

It is absolutely unheard of that a company like Mattel calls back millions of products just because they 'found' dangerous materials...unbelievable.

Giants like Mattel know they have to have their own quality control people inside the factories, day-in-day out and not just design, order, squeeze the prices and leave their 5* hotels, back to their offices.

It just doesn't work like that and I am absolutely convinced that inside Mattel a lot of heads are rolling!

The above also counts for other -than China- producing countries and I am also absolutely convinced that Japanese buyers in Thailand have a perfect set-up quality control for all the products they order,assemble, produce or co-produce in cooperation with manufacturers.

Without that, you're lost, not just in China.

I fully agree with your note on the political angle:

I watched a disgusting, almost hysterical speech by Hillary Clinton (about the Chinese products), screaming: WE WILL STOP THEM.

It's not so easy as she says/shouts and just politically motivated.

That of course doesn't mean some Chinese companies can go on, deceiving their clients; on the contrary.

The government knows this and publish a blacklist of, even very large, companies and withdraw their export licenses !

And, yes, Thai companies should take advantage, if they're able to compete, but that's another subject.

LaoPo

[VegasVic]

snip

So for once and for all, can we please keep Thai exports, Thai SET returns, and property prices in Thai Baht, for Gods sake we are in Thailand. Any other type of reporting is purely a sham.

So there.

http://www.nationmultimedia.com/2007/08/22...ss_30045975.php

July figures out:

Export growth falls in July

US problems contribute to worst figures in more than two years

"In the first half of the year, Thailand's exports rose at an average pace of 18 per cent, a remarkable performance in light of the baht's 7-per-cent appreciation against the dollar. But the country's exports in baht terms fell 4.6 per cent to Bt406 billion last month, the lowest figure for five years."

"Exports to the US fell 13.6 per cent year on year last month. Moreover, they fell 2 per cent in the first seven months of the year. "

"Exports of agricultural goods showed slowing growth last month, while exports of industrial goods continued to grow, with the exception of garments and steel.

Rice exports fell 21.6 per cent in volume and 10.9 per cent in value last month, while tapioca exports fell 35.1 per cent in volume and 10.3 per cent in value.

Exports of processed fruit and vegetables decreased 14.1 per cent in volume and 4.9 per cent in value."

Edit, forgot the headline.

Another great post Carmine! I know there are cerain posters here that no matter what figures are made public about the Thai export sector they will tell you things are rosy, but this article captures a much more accurate portrayal as to what is occuring in Thai exports. Sadly I think the worst news is yet to come, due to the fact that export contracts are usually 6-12 months out and the further strentgthening of the baht since earlier this year will come home to roost in the number we see 3-6 months from now. If any good can come out of this liquidity crisis, then perhaps it will be that the baht will be able to weaken to a degree (36-38/Dollar) that will give Thailand a much better opportunity to be competitive and actually grow its export sector. Lets hope for the best

[xbusman]

These exports numbers for July are the result of the business environment last year. Like I have said before, exports are a ongoing and long term process. The subprime mess and consumer retrenchment wont effect our export numbers for another six months, the fact they even bring this up at this time means that they are scrambling for excuses. In fact, the liquidity crunch is still coming our way. If our exports have shrunk 2% this year, and look to shrink farther, and our consumer spending has shrunk something, and looks to shrink more, that leaves government spending to pick up that 4% GDP growth. Since we know VAT revenues are way down, excise is down, and corporate earnings are down, that is going to make skinny picking for the government to get things on track. Honestly, it may be too late for the government to pick up the slack anyway, there is a fairly big lag in that as well. On top of that, they have an election to schedule and pull off.

Knowing that the agricultural segment of Thailand is getting hit the hardest and will see even harder times shortly, and seeing their discontent through the rejection of the new charter, for the first time I am a little nervous about the near term future. I think that in fact GDP could start to shrink and that always makes for social unrest in any country.

These kids in power would do well to spread the coffers quickly and hand this mess to professional apologizers duly elected and easily removed.

A random thought as I drive through Bangkok. Having recently returned from LA and slightly familiar with the real estate market there, I reflected on whats going on in America with the subprime mess. The capital credit machine is ruthlessly paying for past sins of both borrower and creditor, foreclosing property that was overprice and sold to someone who had no business buying if it were under priced. The machine is in force, notifying, evicting, auctioning, and moving on. Lots of investors who forgot risk = returns are being educated in this ancient rule again. This 1.5% of loans is going to be a bitter pill but the US economy has taken much worse in the past, hubris has a price.

As I drive through Bangkok though, and look at property to buy or lease. I am constantly amazed at how many buildings, offices and houses are stone empty. The ones with tenants have "bank troubles". Entire developments where the contractor and the banks have a "small dispute". I know its not true, but sometimes I get the feeling that all of Thailand is a subprime mess. A large portion of the property I see still have problems from the crash in 97. I always wonder, how can these thousands of properties sit empty for a whole decade. The losses were huge back then, but it still costs to keep a depreciating asset even if property prices return to those levels some day. I wonder about the whole NPL game in Thailand and their ability to continue to manage that realistically, particularly with a slowing or shrinking GDP and expanding population. I think this has to play out in the next few years, its still a terrible burden on their economy.

Lots of tough choices for the new government, lets hope elections take place quickly and peacefully.

[VegasVic]

These exports numbers for July are the result of the business environment last year. Like I have said before, exports are a ongoing and long term process. The subprime mess and consumer retrenchment wont effect our export numbers for another six months, the fact they even bring this up at this time means that they are scrambling for excuses. In fact, the liquidity crunch is still coming our way. If our exports have shrunk 2% this year, and look to shrink farther, and our consumer spending has shrunk something, and looks to shrink more, that leaves government spending to pick up that 4% GDP growth. Since we know VAT revenues are way down, excise is down, and corporate earnings are down, that is going to make skinny picking for the government to get things on track. Honestly, it may be too late for the government to pick up the slack anyway, there is a fairly big lag in that as well. On top of that, they have an election to schedule and pull off.

Knowing that the agricultural segment of Thailand is getting hit the hardest and will see even harder times shortly, and seeing their discontent through the rejection of the new charter, for the first time I am a little nervous about the near term future. I think that in fact GDP could start to shrink and that always makes for social unrest in any country.

These kids in power would do well to spread the coffers quickly and hand this mess to professional apologizers duly elected and easily removed.

A random thought as I drive through Bangkok. Having recently returned from LA and slightly familiar with the real estate market there, I reflected on whats going on in America with the subprime mess. The capital credit machine is ruthlessly paying for past sins of both borrower and creditor, foreclosing property that was overprice and sold to someone who had no business buying if it were under priced. The machine is in force, notifying, evicting, auctioning, and moving on. Lots of investors who forgot risk = returns are being educated in this ancient rule again. This 1.5% of loans is going to be a bitter pill but the US economy has taken much worse in the past, hubris has a price.

As I drive through Bangkok though, and look at property to buy or lease. I am constantly amazed at how many buildings, offices and houses are stone empty. The ones with tenants have "bank troubles". Entire developments where the contractor and the banks have a "small dispute". I know its not true, but sometimes I get the feeling that all of Thailand is a subprime mess. A large portion of the property I see still have problems from the crash in 97. I always wonder, how can these thousands of properties sit empty for a whole decade. The losses were huge back then, but it still costs to keep a depreciating asset even if property prices return to those levels some day. I wonder about the whole NPL game in Thailand and their ability to continue to manage that realistically, particularly with a slowing or shrinking GDP and expanding population. I think this has to play out in the next few years, its still a terrible burden on their economy.

Lots of tough choices for the new government, lets hope elections take place quickly and peacefully.

Spot on xbusman! I have to thank you and carmine both for your facts, figures and insight in your posts tonight. This last post of yours in particular gives great insight as to what is actually happening in Thailand. Indeed lets hope fair elections are held soon and lets also hope that those who are elected are competent and prepared to take whatever action is necessary for the best interest of the Thai people in the long run.

[palm]

meanwhile .......................

BoT says Thai exports will decrease in last half of 2007

Sunday 19 August 2007 03:58:34 PM (GMT+7:00)

BANGKOK, Aug 19 (TNA) - Thailand's exports during the second half of 2007 have been projected to retreat from the first half due to the sluggish economies of the country's trading partners, according to a senior official of the Bank of Thailand (BoT) speaking on Sunday.

Suchada Kirakul, assistant governor of BoT's Monetary Policy Group, said that a central bank report on inflation in July projected Thailand's exports during the second half of this year would be lower than during the first half and that this was in line with the general economies of the country's trading partners.

snip

MCOT Public Company Limited

well that's the engine of the economy according to the pundits , now what ????

>>'tis the best of my limited knowledge that the application fee is non-refundable and further costs will be incurred if successful ...........................

>>my hand is up as being unable to afford to gamble 95 k .

So, are we supposed to take your financial expertise seriously?

You just posted in the 'Why Do So Few Get Residency?' thread that 95,000 baht is too much for you to loose? Seems like you should get your own financial affairs in order before worrying about Thailand's!

No wonder there are so many posts from disgruntled and bitter people on here.

here's your chance , join in .........................

as if .............................

<snip>

Thai exports are way up in 2007 over 2006, despite the baht's rise. Even if exports doubled, you'd still moan about it. Its great entertainment reading the posts from the 'great-unwashed'.

Edited August 23, 2007 by Jai Dee
Flame comments deleted

[xbusman]

Interesting post Palm. Do you think you might be able to come up with some math to support your allegations? I would be greatly interested.

Here is the specific information in the post you refer to.

Suchada Kirakul, assistant governor of BoT's Monetary Policy Group, said that a central bank report on inflation in July projected Thailand's exports during the second half of this year would be lower than during the first half and that this was in line with the general economies of the country's trading partners.

I would guess Suchada Kirakul is kohn Thai. I would also guess that he has better information than us armchair economists. I dont see any whining in his report, just a bland cautionary assessment of what the business community already knows.

Maybe this is what you refer to:

well that's the engine of the economy according to the pundits , now what ????

I dont really see any whining in that as well. A bit smart arse, terse, and rather obvious when in an economy that is based somewhere over 60% on exports.

I would be interested in your math regarding exports. It is a subject I follow with great interest. You may be on to something that no one else can see. To survive in difficult times, and for exporters these are more than difficult times, it pays to keep eyes and ears open. Perhaps there is some hidden fast growing segment of the market I have not seen. In fact, recently I had a chance to explore the fiberglass industry in Thailand and found it vibrant and running near full capacity. Low skill, high labor industry well established with a better access to raw materials than China, ingredients to survive the storm. I am finding though, those examples few and far between.

Again, it is pure stupidity to measure Thai exports in US dollars. I really wish they would use Zimbabwe dollars and shoot for 2000% growth.

[cclub75]

Interesting post Palm. Do you think you might be able to come up with some math to support your allegations? I would be greatly interested.

It's useless. State of denial.

Here are 2 news (of the same coin). It's getting uglier and uglier. And a third one for the finishing varnish.

Household debt historic high in August

Thailand's household debt increased to a historic record high of 31.23 per cent in August, following the economic slowdown, which prompted people to borrow more. Nation

Savings rate down

ECONOMY :Household savings fell by 37 billion baht in the second quarter from the previous quarter, a clear reflection of the weak economy and poor consumer confidence, according to the Bank of Thailand. Bangkok Post

Industrial confidence index lowest in 4 years

July's industrial confidence index fell from 80.9 in the previous month to 72.7, which was the lowest index during the past four years, due to fewer orders, lower sales and less production capacity, according to the Federation of Thai Industries. Nation

Shake thoroughly and drink cold. Cheers.

But of course, we shall remain confident : "everything will get better after the general elections". Right ?

Edited August 23, 2007 by cclub75

[LaoPo]

Thailand's auto exports up 38 percent in July

BANGKOK (Thomson Financial) - Thailand's vehicle exports were 38 percent higher in July than a year before because of robust demand in Australia and the Middle East, the Automotive Industry Club said Thursday.

The number of vehicles exported rose to 56,042. The value of vehicle exports was up 34 percent at 24 billion baht.

Automotive Industry Club spokesman Suraphong Phaisitpattanapgong said the demand in Australia and the Middle East helped offset pressure from the strength of the baht.

The baht traded near 10-year highs against the US dollar in July. A strong baht puts pressure on exports, the key driver of the Thai economy, because it makes Thai goods less competitive abroad and cuts the value of repatriated profits.

Exports in the first seven months of 2007 were 17.5 percent higher than a year before at 363,315 vehicles.

The Automotive Industry Club said it will keep its target for exports in 2007 at 631,000 vehicles.

Thailand has no domestic auto makers but is a major production and export base for Japanese companies such as Toyota Motor Corp, Nissan Motor Co and Honda Motor Co and for General Motors Corp and Ford Motor Co.

Source:

http://www.forbes.com/markets/feeds/afx/20...afx4046592.html

LaoPo

[cclub75]

Thailand's vehicle exports were 38 percent higher in July than a year before because of robust demand in Australia and the Middle East, the Automotive Industry Club said Thursday.

Thanks for the info LaoPo.

I don't want to be too "contrarian", but from my point of view, this data shows that... the performances of other sectors of exports in july were really really bad (agriculture and textile for instance) !

We all know that cars exports are a real potential for the country (with the car mania around the world). But, it won't solve the problem of employement, of people on the ground.

Intensive labor sectors are suffering... The car industry won't be able to offset.

Anyway, we will have a more clear view when BOT will publish the detailed datas for exports in july.

See, here.

Edited August 23, 2007 by cclub75

[LaoPo]

Thailand's vehicle exports were 38 percent higher in July than a year before because of robust demand in Australia and the Middle East, the Automotive Industry Club said Thursday.

Thanks for the info LaoPo.

I don't want to be too "contrarian", but from my point of view, this data shows that... the performances of other sectors of exports in july were really really bad (agriculture and textile for instance) !

We all know that cars exports are a real potential for the country (with the car mania around the world). But, it won't solve the problem of employement, of people on the ground.

Intensive labor sectors are suffering... The car industry won't be able to offset.

Anyway, we will have a more clear view when BOT will publish the detailed datas for exports in july.

See, here.

Thanks.

I think not everything is bad OR good news in Thailand. Some sectors are doing fine, others not so fine.

It's difficult to determine the OVERALL economical situation in Thailand.

If car exports are up, other sectors are down so people -and us on TV- are confused what the real situation is.

People who read, in haste, headlines like this are confused:

Export growth falls in July

But it says: Export Growth...and main exports are still up although this is an example:

"Exports of agricultural goods showed slowing growth last month, while exports of industrial goods continued to grow, with the exception of garments and steel.

Rice exports fell 21.6 per cent in volume and 10.9 per cent in value last month, while tapioca exports fell 35.1 per cent in volume and 10.3 per cent in value.

Exports of processed fruit and vegetables decreased 14.1 per cent in volume and 4.9 per cent in value."

http://www.nationmultimedia.com/2007/08/22...ss_30045975.php

All in all: confusing.

LaoPo

[Carmine6]

Confused LaoPo? This article clears up everything :

http://www.nationmultimedia.com/2007/08/23...ss_30046128.php

I'd think customs would have better figures since they're levying duties. Hope they go back and tally everything up again.

Anomalies in July export stats

The Commerce Ministry will soon hold discussions with the Customs Department after finding anomalies last month's export figures. Published on August 23, 2007

The ministry found figures for some products were different from reports by industry associations. Somjin Plengkhum, deputy director-general of the Export Promotion Department, yesterday said the department was checking export reports for many products. In particular, it found exports of rice reported by the Customs Department were totally different from the association reports.

According to the Rice Exporters' Association, the export volume was 621,746 tonnes last month, up 12.9 per cent year on year. However, the Customs Department reported exports had dropped 10.9 per cent last month.

In addition, the association reported that export value had risen 23 per cent to US$233 million

(Bt8 billion) in July, but Customs Department figures showed it had dropped 10.9 per cent.

Chookiat Ophaswongse, president of the Rice Exporters Association, said he was very surprised with the report of the Customs Department.

"It must be some mistake, as Thai rice exports have increased significantly since the beginning of the year. Thai rice is in high demand in the world market because major rice export rivals have lower supply," he said.

Duangjai Koosrivini, president of the Thai Toy Industry Association, said exports of toys could not have dropped 6.1 per cent as the Customs Department reported, because of increased orders - apart from the United States, which ordered slightly less last month.

She added that the ministry had recorded incorrect export figures for toys in February, when exports were said to have jumped 7,000 per cent year on year.

Petchanet Pratruangkrai

The Nation

[xbusman]

Okay, having worked in the automotive industry for a few decades I want to discuss the massive increase in auto exports.

Having been involved in running automotive assembly lines, here are a few facts that should be known.

When you design and build a car assembly factory, they are engineered to run within certain parameters of production capacity. While auto builders are good at this, the Japanese are pure masters. Their level of planning and efficiency is head and shoulders above the rest of the world.

So you build a factory that can make between 350,000 and 450,000 cars a year. Outside those parameters and it quickly becomes so inefficient that you either have to close it (low) or change the physical structure by adding on or building a new plant. Brilliant minds go into forcasting demand to the nth degree and again, hats off to the Japanese because if you think they are masters at planning and building production, they are sublime when it comes to forecasting demand and growth.

Okay, you have a big brick box with lots of overhead. Remember, and this is critical, the Japanese taught us this lesson in bloody detail, we are a car assembler, not a manufacturer. We assemble bits into a finished product. Our job is quality and efficiency. So we create a huge network of support companies, hence the "detroit of asia" moniker that Thaksin loved to claim but was designed and built by the Japanese. We set them up, give them our projections, lock them in with long term contracts, and gear our factory to assemble. Now, assembly is everything to us. If you want to assemble 3000 cars in September, you ###### well better have firm fixed contracts in place by the end of January. The Japanese have perfected the just in time inventory system to a razor sharp edge. To do that, you have to plan to perfection and commit early.

So once your assembly line gets going, its very hard and painful to increase or decrease production. Takes a long time and costs money, damaging efficiency in short run.

So what do you do if demand starts cooling off way outside of forecasts.

In the US, they load up the dealers, then they load up the storage lots, then they start giving them away to the rental companies. By that time, they are able to slow production but the losses are staggering in process.

So what does Toyota do in Thailand when dealers cant buy them, there are no storage lots (or they dont think that anything put on a storage lot will ever sell)? Yes, thats right, they export them. They will continue to do that until they can right size their production capacity, hopefully, within the parameters of the infrastructure they built. I would bet heavily that they can and will not be forced to shut down. They do however, have a painful year ahead of them.

Yes they were able to export to the middle east. Lots of fresh money there, probably plenty of demand. There is no indication however as to the price the trucks were sold at. Could be like the rental companies in the US, at fire sale prices. A good solution for Toyota, keeps the factory running without damaging the home market. The beauty of being the big guy with resources and a global reach.

I have spoken with a few Japanese managers from the car companies, this is essentially what is actually happening but I have no idea how well or profitable the exports have been, none of my business really. The auto companies have been desperately slowing production since September last year, this increase in exports means that even they underestimated the slowdown by Thai consumers. Like I said, its hard to beat their accuracy in most cases.

Believe me when I tell you that it is not their intention at this time to export from Thailand with the Baht so terrifically strong. They would much rather be exporting from other places in the world with weaker currencies, perhaps even Japan and America with the dollar and yen so weak. I could discuss the costs of assembling a car but just take it from me that labor is a very very small part of the pie, and as the Japanese have driven efficiencies to incredible level, labor has become almost negligent. Currency however, effects everything they do from paying taxes to buying foam to shipping. You could double the wage rate of the hourly labor pool assembling cars and it would cost less then a single baht in currency appreciation.

I believe this anomaly in the increase in car exports has more to do with the rigidity of assembly operations than any amazing new competitive pricing or technological advance from the auto industry. We can only know toward the end of the year as the factories begin to right themselves at new production rates. I would love to see their forecasts.