Sub-prime Meltdown Hits Thailand With Force

[Martin]

Well, that is a new twist on: "If you owe the Bank a little, you have a problem: but if you owe the Bank a lot, then the Bank has a problem."!

When a lot were going to owe the Banks a fair bit, then the stability of fiat money worldwide became a problem.

So a new method had to be invented to smooth what would have been a sharp correction in an over-heated housing market into a longer, less-sharp correction.

Will this be followed by making the offering of 'teaser' rates, and commission-based mortgage brokers, illegal?

It should be, now that they have shown themselves to be such a toxic mixture.

[Abrak]

People who lived in Thailand during 1997 to 2000 should have some idea of what will happen next regarding the sub-prime debt crisis.

We are currently 3/4 of the way through the first stage. For years when it was obvious that there was a bad debt problem, the banks denied it, then when they admitted to the problem, they underestimated it and only now is the full extent of the problem fairly clear.

Markets will initially be reassured that the banks have admitted their losses and 'the worst is over'. However little thought has actually been given to the consequences to the banking system of these losses.

(1) If we assume losses of the order of US$300bn and bank lending of 10x capital - then these losses could potentially lead to a reduction in bank lending of the order of US$3trillion (isnt that 20% of US GDP). Remember how difficult it was to get a loan in Thailand after the 1997 banking crisis?

(2) Of course this really reflects the fact that with several US$100bn of losses the US banking industry needs to be recapitalised rather like the Thai banking industry post crisis - that is going to mean severe dilution for investors.

Until we see the recapitalisation of the banking industry either by the government or private investors this crisis will not be over.....

[LaoPo]

Sub-Prime crisis far from over. America's largest mortgage lender:

Countrywide Denies Bankruptcy Rumors

By ALEX VEIGA 01.08.08, 1:55 PM ET

Shocking that such a large company came down from a 52 week high of US $ 45,00+ and fell as much to less than $ 6,00 today to an all time low of $5,76 (still trading as I write)

LOS ANGELES -

Shares of Countrywide Financial Corp., the nation's largest mortgage lender, partially recovered from a midday plunge Tuesday after the company denied rumors that it was planning to file for bankruptcy protection.

In a prepared statement, the company said there was "no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company."

Countrywide stock dipped as low as $5.76 before the New York Stock Exchange temporarily halted trading in advance of the company's statement. The decline sent stocks overall lower.

When trading resumed, the shares rebounded somewhat and were down $1.07, or 14 percent, to $6.57 in afternoon trading.

The stock fell early in the day following a report in The New York Times that said court records show the lender fabricated documents related to a bankruptcy case of a borrower in Pennsylvania.

Investors have been anxious about Countrywide in recent days. Its stock is well below its 52-week high of $45.26.

Countrywide, like many in the mortgage industry, has suffered as more customers have defaulted on home loans, particularly on those made to borrowers with questionable repayment histories.

http://www.forbes.com/feeds/ap/2008/01/08/ap4507559.html

LaoPo

[LaoPo]

Countrywide Loses Most Since 1987 on Funding Wagers

Jan. 8 (Bloomberg) -- Countrywide Financial Corp. dropped the most in two decades in New York trading on speculation that it needs cash to continue operating its mortgage business.

The country's largest home-loan lender pared its loss after denying speculation it will file for bankruptcy.

Countrywide shares declined the most since October 1987, losing $1.03, or 13 percent, to $6.61 in 1:46 p.m. New York Stock Exchange composite trading. Earlier, they tumbled 25 percent.

Investors drove Countrywide shares down 79 percent last year on concern the company was suffering from a cash shortage. The company tapped emergency credit lines and got a bailout from Bank of America Corp. as the worst housing slump in 16 years fueled bets that Countrywide might seek bankruptcy court protection.

Traders said Countrywide shares declined today on the prospect that tighter credit restrictions will drive the Calabasas, California-based company into Chapter 11.

``There is no substance to the rumor that Countrywide is planning to file for bankruptcy,'' spokesman Rick Simon said in a statement. Countrywide has said it has adequate liquidity to run its business and predicted in October that it will be profitable this year. The company posted its first loss in 25 years during the third quarter.

Credit-default swaps tied to Countrywide's debt soared to a record as investors demanded as much as 30 percent upfront and 5 percent a year to protect from a Countrywide default for five years, according to broker Phoenix Partners Group in New York.

Yesterday, investors were demanding 20 percent upfront and 5 percent a year. Contracts trade on upfront payments when the market sees a high risk of default.

Bank of America, based in Charlotte, North Carolina, slumped 2.5 percent to $38.92, the lowest since December 2003. It made a $2 billion preferred-stock investment in Countrywide in August, and has the right to convert those shares into common stock at $18 each.

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

LaoPo

[LaoPo]

CFC - Countrywide closed -28.40% on Tuesday January 8th, 2008

Countrywide lost $2.17, or 28 percent, to $5.47. ``There is no substance to the rumor that Countrywide is planning to file for bankruptcy,'' said an e-mailed statement from spokesman Rick Simon.

The 92-member S&P 500 Financials index dropped 3.7 percent, extending its decline over the past year to 28 percent.

It seems that the Financial(s) bottom is still not in sight....

http://www.bloomberg.com/apps/news?pid=206...s8&refer=us

LaoPo

[cclub75]

Countrywide lost $2.17, or 28 percent, to $5.47. ``There is no substance to the rumor that Countrywide is planning to file for bankruptcy,'' said an e-mailed statement from spokesman Rick Simon.

The 92-member S&P 500 Financials index dropped 3.7 percent, extending its decline over the past year to 28 percent.

It seems that the Financial(s) bottom is still not in sight....

It's good to see the events unfolding exactly like the scenarii...

You remember the discussions we had here with the rozy brigade about Bear Stearn, Northern Rock, Countrywide, Bank of America, Citigroup etc. ?

But the best is to come : they are probably going to say the magic word "bottom out", "opportunities", "recovery", blablabla.

And Thailand in this great power play ? Like always, borders are made of concrete, and the recession won't affect Thailand... Because this time it's different, right ?

Anyway. We will be saved by Samak. Or by some general in his shiny uniform...

Edited January 8, 2008 by cclub75

[bingobongo]

i distinctly remember someone on this board (I won't name names) telling me that Countrywide (aka countryfried/countryslide) could not possibly go bankrupt when I was short at $30/share (see my post #176 on this thread)......and now as Countryslide circles the bowl, i have no need to cover my short position........dam_n i am good

anyway, go short on Washington Mutual (WM), Citigroup, and Wells Fargo, this will get worse and asia (including the SET) will feel the pain

china (shanghai) bourses will experience a nice haircut this year (which will accelerate after the olympics)as chinese banks have purcashed a lot of these worhtless CDOs....the housing bust will go global quite soon

Edited January 9, 2008 by bingobongo

[jumnien]

i distinctly remember someone on this board (I won't name names) telling me that Countrywide (aka countryfried/countryslide) could not possibly go bankrupt when I was short at $30/share (see my post #176 on this thread)......and now as Countryslide circles the bowl, i have no need to cover my short position........dam_n i am good

anyway, go short on Washington Mutual (WM), Citigroup, and Wells Fargo, this will get worse and asia (including the SET) will feel the pain

china (shanghai) bourses will experience a nice haircut this year (which will accelerate after the olympics)as chinese banks have purcashed a lot of these worhtless CDOs....the housing bust will go global quite soon

Uh oh, this time I find myself agreeing with you! I think lenders, speculators and builders will be having a tough time for a few years. The housing market has seen a positive move in the past year (from the buyers perspective, that is) and I expect these conditions to improve for sometime. After years of bad news for working class folk trying to afford houses we can only hope this positive trend (more affordable prices) continues for a long, long time!

[LaoPo]

Thursday Jan. 10th: Countrywide up +51.56% to $ 7.76 from 5.12 on rumors Bank of America* is talking to buy CFC.

http://www.reuters.com/article/businessNew...sinessafternoon

* BoA invested already $ 2 Billion in Countrywide, a few months ago at $ 19/share if I'm not mistaken....ouch.

LaoPo

Edited January 10, 2008 by LaoPo

[LaoPo]

Countrywide stock soars on BofA sale talk

News of Bank of America's interest is the first ray of hope in months for shareholders of the mortgage lender.

By Roddy Boyd, writer

NEW YORK (Fortune) -- Bank of America is in advanced talks to purchase struggling home lending giant Countrywide Financial Corp., according to The Wall Street Journal.

The news represented the first ray of hope in months for Countrywide shareholders, who saw their stock bid up to $7.69 in late afternoon trading, a $2.34 spike that amounted to a more than 45 percent one-day gain. In the past year, Countrywide has shed almost $20.3 billion in market capitalization.

If the deal occurs - and that is a remarkably big "If" given Countrywide's rapidly deteriorating loan and servicing portfolios - Bank of America would utterly dominate U.S. residential real estate finance. The newly combined Bank of America, based on MortgageDaily.com 2007 third quarter origination numbers, would have originated $142 billion in mortgage and home-equity financings. The next closest: Wells Fargo at $68 billion.

Practically speaking, the deal represents very different things for each company.

For Countrywide (CFC, Fortune 500), it is likely the best chance it has of staving off a nearly intractable liquidity crisis brought on from its multi-year residential lending binge. The lender has run through an $11.5 billion multi-bank lending facility, been shut out of the commercial paper and corporate credit markets and has been forced to borrow extensively from the Federal Home Loan Bank system.

For Bank of America (BAC, Fortune 500), the cost savings inherent in combining Countrywide's market-leading residential lending platform with its own fourth-place effort are no doubt tempting. The bank would also pick up millions of customers - as well as thousands of depositors from Countrywide's own bank - to peddle a variety of higher-margin personal finance offerings. It would also, presumably, bail out the $2 billion investment Bank of America made in the lender in August. Prior to the news, the bank was out a cool $1.4 billion on the trade.

That said, the deal could fall apart at a moments notice.

If it does fall apart, a likely culprit would be the rapidly deteriorating credit quality of Countrywide's mortgage and mortgage servicing portfolios.

http://money.cnn.com/2008/01/10/news/compa...rtune/index.htm

LaoPo

[quiksilva]

I think I understand the basic principals behind the economic linkages between countries today because of globalisation. But how, specifically, does this affect Thailand in today's world?

For instance, what sort of exposure do Thai banks have to this problem?

I can see how USA and Europe will have economic problems this year, and how this could affect consumer demand for exports bound for these countries, but by how much? (I see that they saw house price recovery mentioned in some part of the UK again last quarter, the first time it stopped falling for three quarters)

What about demand from China / Japan / ASEAN / India? Will it be sufficient to offset (or at least soften) the impact of the decline in demand from the West?

[LaoPo]

The Roller Coaster called "ÇOUNTRYWIDE" comes to a halt:

UPDATE: Bank of America agrees to acquire Countrywide Financial for $4B in stock

January 11, 2008: 07:51 AM EST

NEW YORK, Jan. 11, 2008 (Thomson Financial delivered by Newstex) -- Bank of America (NYSE:BAC) Corp. Friday agreed to acquire struggling mortgage lender Countrywide Financial (NYSE:CFC) Corp. for roughly $4 billion in stock.

The deal calls for Bank of America to swap .1822 of a share for each share of Countrywide stock. The transaction values Countrywide shares at roughly $7.16 each, based on Thursday's close. This is roughly a 7.6% discount to the Countrywide's closing price of $7.75 on Thursday.

Shares of Countrywide, based in Calabasas, Calif., were off roughly 16% to $6.50 in premarket action.

Reports of talks between the companies surfaced during Thursday's session, sending Countrywide's stock up more than 50%. Earlier in the week, the stock had sunk to levels unseen in roughly eight years, going as low as $4.43 on Tuesday. A number of factors were at work, including another round of market rumors of bankruptcy that led to a flat company denial on Tuesday and a rise in delinquencies in December operational statistics reported early Wednesday.

Bank of America, based in Charlotte, N.C., anticipates the deal will close in the third quarter and be neutral to earnings in 2008 before adding to earnings in 2009. This view excludes merger and restructuring costs.

B of A sees after-tax cost savings of $670 million from the transaction, a figure that represents 11% of the expense base of the company's mortgage operations.

'We believe this is the right decision for our shareholders, customers and employees,' said Angelo Mozilo, Countrywide's chief executive officer and chairman. 'Bank of America is one of the largest financial institutions in the U.S. and internationally, and we are confident that the combination of Countrywide and Bank of America will create one of the most powerful mortgage franchises in the world.'

The combined company doesn't plan to originate subprime loans, B of A said, adding that it will expand efforts in credit counseling programs as well as 'internal capacity and flexibility' for the modifications of loans once it purchases Countrywide.

On Wednesday, Countrywide said its mortgage loan servicing portfolio was approaching $1.5 trillion, reflecting roughly 9 million loans. As of Dec. 31, the company's banking operations' assets stood at $113 billion. Delinquencies, however, had reached 7.2% for December as a percentage of unpaid principal balances, up from 4.6% for the year-ago period.

B of A shares were off almost 3% to $38.15 in premarket action after closing at $39.30 on Thursday.

LaoPo

[LaoPo]

Bank of America to Acquire Countrywide for $4 Billion

Jan. 11 (Bloomberg) -- Bank of America Corp., the biggest U.S. bank by market value, agreed to buy Countrywide Financial Corp. for about $4 billion, five months after making a money- losing $2 billion investment in the unprofitable mortgage lender.

Bank of America will acquire Countrywide for approximately $7.16 a share in stock, the Charlotte, North Carolina-based company said in a statement today. The offer is 7.6 percent below Countrywide's closing share price on the New York Stock Exchange.

``I hope Bank of America isn't throwing good money after bad,'' said Eric Schopf, a fund manager at Baltimore-based Hardesty Capital Management LLC, which owns 216,000 Bank of America shares, before the takeover announcement. ``They struck a deal that wasn't very attractive. Hopefully they can get it right the second time around.''

Countrywide, the largest independent U.S. mortgage company, gives Bank of America about 9 million borrowers and fees from servicing $1.5 trillion of mortgages. Countrywide's market value plummeted 82 percent to $4.5 billion during the past 12 months as the Calabasas, California-based lender reported its first quarterly loss in 25 years.

Bank of America, led by Chief Executive Officer Ken Lewis, was sitting on a potential loss of about $1.3 billion from its stake in Countrywide before yesterday, when the company rose 51 percent to $7.75 in New York Stock Exchange composite trading on optimism about a potential bid.

Preferred Stock

Countrywide, founded in 1969 by CEO Angelo Mozilo, sold $2 billion of preferred stock to Bank of America in August to bolster its finances amid what Mozilo called the worst housing slump since the Great Depression. The stock offers a yield of 7.25 percent and is convertible into common shares at a price of $18, 57 percent above yesterday's closing price.

Rising defaults among subprime borrowers, those considered at the highest risk of missing their payments, blocked Countrywide from its traditional sources of capital in the credit markets. More than 100 mortgage companies halted loans, closed or sold themselves last year. Credit losses and writedowns tied to the collapse of U.S. mortgage markets at the world's biggest financial companies total about $100 billion, according to Bloomberg data.

The combined company won't make subprime loans, said Bank of America, which was advised in the transaction by Banc of America Securities and the law firms of Cleary, Gottlieb, Steen & Hamilton LLP and K&L Gates.

`Aware of the Issues'

``We are aware of the issues within the housing and mortgage industries,'' Lewis said in the statement. ``The transaction reflects those challenges.''

The risk of Countrywide defaulting plummeted after the deal was announced. Credit-default swaps on the company plunged to 325 basis points, according to Phoenix Partners Group. Investors yesterday sought 7.25 percentage points upfront and 500 basis points a year for five years to protect Countrywide bonds. Contracts on Bank of America fell 5 basis points to 75.

The purchase, expected to close in the third quarter, will add to earnings beginning in 2009, Bank of America said. Savings resulting from the combination will be about $670 million, with about a third of that coming next year, the bank said.

The takeover of Countrywide is a fraction the size of previous deals engineered by Lewis, including the $48 billion purchase of FleetBoston Financial Corp. in 2004 and $35 billion acquisition of credit-card lender MBNA Corp. in 2006.

Stock Reaction

Bank of America rose 56 cents, or 1.5 percent, to $39.30 yesterday in NYSE trading. The stock has declined 26 percent during the past 12 months, compared with the 28 percent drop of the 24-member KBW Bank Index. Countrywide, which was advised by Sandler O'Neill & Partners LP and Goldman Sachs Group Inc., plummeted 82 percent. Wachtell Lipton Rosen & Katz was Countrywide's legal adviser.

Lewis is still grappling with fallout from the 93 percent drop in third-quarter profit at the company's investment-banking unit. He cut 500 jobs, ousted the head of the unit and vowed to scale back risk. Lewis said last month he wanted to expand home lending without an acquisition. Consumer banking accounts for about half of Bank of America's earnings.

Countrywide's market value fell below $3 billion this week for the first time in a decade amid renewed concern that the company was going bankrupt, a rumor the company denied. The speculation may have driven Countrywide's price down to an attractive level, said Robert Pardes, the former head of OceanFirst Financial Corp.'s Columbia Home Loans unit in New Jersey, which closed last year.

`Great Technology'

``It is an absolute opportunity for Bank of America to acquire an infrastructure they admire, including Countrywide's great technology, and, at these levels, it's mitigating most of the asset issues,'' he said.

Countrywide traded as high as $45.26 last January and the workforce peaked at 61,586 in July before declining 18 percent to 50,600 at the end of 2007. Monthly loans, which set a record at $53 billion in August 2005, have averaged about half that amount for the past four months and totaled $416 billion last year.

Speculation about bankruptcy surfaced last year after investors balked at buying Countrywide's short-term debt and concern about rising defaults brought markets where the company sold its mortgages to a standstill. The lender tapped emergency credit lines and arranged a bailout from Bank of America.

At the end of 2007, more than 7 percent of payments in the company's $1.5 trillion servicing portfolio were more than 60 days overdue.

LaoPo

[cclub75]

The Roller Coaster called "ÇOUNTRYWIDE" comes to a halt:

I hope you're joking.... the Roller Coaster has just got BIGGER ! Scarier. And uglier.

Between the banks who sell themselves like doped whores (i mean cheap) to asian and middle east countries... because they need huge fix of capital.

And the other who are being nationalized... The crisis is there, in front of our eyes.

"It is an absolute opportunity for Bank of America to acquire an infrastructure they admire, including Countrywide's great technology" really those guys have no shame !

Bottom line is : Countrywide mixed with BOA... won't change the fact that more and more people in the US can't pay back their loans. The business of Countrywide is fundamentally fxxxed up. BOA is acting like the arm of the US government. They are just buying a little bit of time.

RIP to all the bozos who were claiming here that "no problem, things are contained".

Edited January 11, 2008 by cclub75

[Kimera]

I think I understand the basic principals behind the economic linkages between countries today because of globalisation. But how, specifically, does this affect Thailand in today's world?

For instance, what sort of exposure do Thai banks have to this problem?

I can see how USA and Europe will have economic problems this year, and how this could affect consumer demand for exports bound for these countries, but by how much? (I see that they saw house price recovery mentioned in some part of the UK again last quarter, the first time it stopped falling for three quarters)

What about demand from China / Japan / ASEAN / India? Will it be sufficient to offset (or at least soften) the impact of the decline in demand from the West?

A good question. Any of you big boys want to answer

Edited January 11, 2008 by Kimera

[bingobongo]

i didnt quite get all of the meat on the Countryslide bone, but being short since the $30s and out in the $6s....i'll take it

next up to short will be Bank of America, as this contagion is spreading, support on the Thai SET is 780, and when that doesnt hold it is on to 750....with sellable bounces along the way

Bank of America Credit Risk Increases on Countrywide Purchase

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

Edited January 11, 2008 by bingobongo

[aaaaaa]

sub-prime isn't over yet

Stocks slammed by bad credit fears

Wall Street plunged again Friday amid renewed fears that the financial sector's troubles with bad credit won't soon end and that some consumers are buckling under the effects of a slowing economy. The Dow Jones industrials finished down nearly 250 points.

The arrival of earnings season has investors worried about how banks and brokerages have fared after suffering losses in the collapse of the subprime mortgage market.

Federal Reserve Governor Frederic Mishkin said the Fed will act decisively to counter risks to the economy and added that swift rate cuts can hasten the economy's return to normal. But Mishkin also said the financial markets are overly focused on the central bank's actions.

[plachon]

i distinctly remember someone on this board (I won't name names) telling me that Countrywide (aka countryfried/countryslide) could not possibly go bankrupt when I was short at $30/share (see my post #176 on this thread)......and now as Countryslide circles the bowl, i have no need to cover my short position........dam_n i am good

anyway, go short on Washington Mutual (WM), Citigroup, and Wells Fargo, this will get worse and asia (including the SET) will feel the pain

china (shanghai) bourses will experience a nice haircut this year (which will accelerate after the olympics)as chinese banks have purcashed a lot of these worhtless CDOs....the housing bust will go global quite soon

Uh oh, this time I find myself agreeing with you! I think lenders, speculators and builders will be having a tough time for a few years. The housing market has seen a positive move in the past year (from the buyers perspective, that is) and I expect these conditions to improve for sometime. After years of bad news for working class folk trying to afford houses we can only hope this positive trend (more affordable prices) continues for a long, long time!

And the people getting way too big mortgages in the sub-prime sector weren't "working class folk". I'd say declining house prices will be bad news for house owners (most of whom "work" I'd imagine) for as long as it continues. However, for young people trying to get on the housing ladder, a downward correction in house prices may be a good thing, so long as it's accompanied by affordable mortgages. Since the sub-prime crash, there are going to be a tightening up of rules and fewer people will be eligible for mortgages. Therefore, not good news for the "working class" (do you mean low wage earners?) especially, if I understand the situation at all.

[bingobongo]

does not matter as long as there is som tham................

Exports suffer on two fronts in US market

Many Thai exporters to the United States are beginning to feel the impact of a double blow from the baht's appreciation and the sub-prime mortgage crisis, which has hurt US demand.

Thai furniture exporters, on the other hand, have been hard hit by the deteriorating US property market.

http://www.bangkokpost.com/120108_Business...n2008_biz30.php

Edited January 12, 2008 by bingobongo

[wilko]

Back in the early years the last century we had crashes....we have learned from these and now we have kind of "slithers"...by this time next year we will all be ensconced in a recession....it just takes longer to happen these days....

[bingobongo]

i guess there will be less need for teak wood furniture from LOS.........buh bye......

Construction of New Homes Falls 24.8 Percent in 2007, the Largest Amount in 27 Years

http://biz.yahoo.com/ap/080117/economy.html

Edited January 17, 2008 by bingobongo

[cclub75]

i guess there will be less need for teak wood furniture from LOS.........buh bye......

Construction of New Homes Falls 24.8 Percent in 2007, the Largest Amount in 27 Years

Bingobongo I think it's time to reactivate the Mother Of All Threads : "Thai Economy In Crisis".

What do you think ?

[bingobongo]

i guess there will be less need for teak wood furniture from LOS.........buh bye......

Construction of New Homes Falls 24.8 Percent in 2007, the Largest Amount in 27 Years

Bingobongo I think it's time to reactivate the Mother Of All Threads : "Thai Economy In Crisis".

What do you think ?

oh you know how that teases me when you mention my favorite thread, but i'd rather wait until the PPP is dissolved (or Samak drives it into the ground if not dissolved )and the SET tanks below support of 780 again, but like a 1976 mustang and a cold woman, i'll start warming up the Thai Economy In Crisis thread, because the storm is coming

Edited January 17, 2008 by bingobongo

[moldy]

I think a moment of being curmudgeonly is called for. Even for the most idiotic and drooling fool of an investor or economist learns on day one that return is based on risk. More return absolutely must mean more risk. Less return does not always mean less risk but three minutes of due diligence will out it.

These CDOs were all high return, high risk. In the words of the immortal philosopher Homer Simpson, DUHHHHH! I really dont see what the fuss is all about. After all, what is the definition of high risk, I think its the possibility of losing your investment capitol. Emerging markets are another code word for high risk. Amazing what sheeple will do with their money and then bleet to high heaven when the wolves sweep in.

Let em fail I say, lets all relearn one of the few hard and fast rules of investing.

As an event it's more or less old news. The stock markets have already built in the losses probably more than necessary. I cite the example of RBS UK, which has seen it's price go from 640 to 390, even though it has minimal losses and is set to make record profits.

The problem now is the real threat of recession. I don't think the slow down has been caused by the credit crunch rather the other way round.

Regarding Thailand, I should imagine it's much less exposed than most other economies and wouldn't foresee a liquidity crisis. It might in fact lessen the damaging effects of an overly strong bt, as there is little to suggest the bt should be so high considering rather poor economic performance relative to it's neighbours.

[BigSnake]

Yes, and it is doing nothing to help this strong baht. Hang on a pray for the best my friends.

[highdiver]

i guess there will be less need for teak wood furniture from LOS.........buh bye......

Construction of New Homes Falls 24.8 Percent in 2007, the Largest Amount in 27 Years

Bingobongo I think it's time to reactivate the Mother Of All Threads : "Thai Economy In Crisis".

What do you think ?

oh you know how that teases me when you mention my favorite thread, but i'd rather wait until the PPP is dissolved (or Samak drives it into the ground if not dissolved )and the SET tanks below support of 780 again, but like a 1976 mustang and a cold woman, i'll start warming up the Thai Economy In Crisis thread, because the storm is coming

bring it on!!!

2007 in thailand was a real Crisis. the stock market went up from 700 to 800 the exports grow. the baht is stronger and realestate prices are flying through the roof. and this is in a year where most of the world is suffering from subprime crisis.

so now that you made so much money you will finally be able to buy a new condo instead of the one you sold in 2006...

As for Som Tam its still 20 baht...

[cclub75]

2007 in thailand was a real Crisis. the stock market went up from 700 to 800 the exports grow. the baht is stronger and realestate prices are flying through the roof. and this is in a year where most of the world is suffering from subprime crisis.

You see ! Even Highdiver misses us ! He needs us !

Edited January 20, 2008 by cclub75

[Jai Dee]

TDRI believes Bush’s tax relief measures may not work

Director of Thailand Development Research Institute (TDRI), Mr. Somchai Jitsuchon (สมชัย จิตสุชน) expresses doubts that US President George W Bush’s tax relief measures will help salvage the sub-prime mortgage crisis.

He adds that although many central banks in the European countries have rolled out measures including setting aside a high reserve fund, damages contributed by sub-prime crisis will still remain severe. Mr Somchai further added that many financial institutions in Europe and US have experienced loss in revenue. Therefore, Thailand should be aware of the imminent loss and keep an eye on possible factors that may inflict on the Thai economy.

Mr. Somchai says at the mean time, some of the Thai financial institutions which have invested their money in fixed incomes have been hit by the fluctuating economy, adding that exports may get hurt most. For instance, once market demand from the US and the EU drops, there will be less Purchase Order (PO) from Thai exporters. The TDRI director suggests that Thailand should motivate domestic consumption and investments to expand the domestic economy in the long run.

Source: Thai National News Bureau Public Relations Department - 21 January 2008

[Jai Dee]

BOT : not proper time to remove capital control

Suchada Kirakul, Bank of Thailand's assistant governor, said on Monday that it is not the right time to remove the capital controls.

She said current short-term inflows are still needed to be controlled as the sub-prime crisis will curb down US dollar value. The baht will be continually boosted by the country's trade surpluses and capital inflows, she said.

Source: The Nation - 21 Janauary 2008

[cclub75]

She said current short-term inflows are still needed to be controlled as the sub-prime crisis will curb down US dollar value. The baht will be continually boosted by the country's trade surpluses and capital inflows, she said.

First time, she says something that makes sense (and that is the truth).

So to summarize : the BOT thinks officially that the USD will continue to go down versus THB. But meanwhile, asks the thai exporters to not dump their USD... And meanwhile, continues to buy USD on the local market, to manipulate the exchange rate, (sorry to "intervene"), and increasing strongly its foreign currency reserve.

Well done Tarisa. You are a winner.

It's the perfect thai "coherence" at work.

Edited January 21, 2008 by cclub75