Top Thai Banker Warns Of Severe Impact From Global Economic Crisis

[george]

Top private banker warns of severe impact from global economic crisis

BANGKOK: -- The Thai economy is expected to feel the pinch of the global economic crisis late this year and experience a real impact from the turmoil next year, according to a top banker.

Siam Commercial Bank president Kannikar Chalit-arporn said the US financial meltdown will cause the world economy to slow down and definitely have an effect on the Thai economy.

Thailand is likely to be affected late this year and have a more severe impact from the global economic meltdown next year.

The repercussions would be clearer in 2010 as product sales in the business sector are set to decline and exports to grow at a slower pace because economies of key export destinations including the United States, Europe, and Japan will have slowed down.

Simultaneously, the local consumption would continue slowing, resulting in the debt repayment problem and an increase in non-performing loans.

So, she said the bank had closely monitored and suggested its customers to expand investment with caution.

It also told its customers to postpone loan applications and warned them of impacts from the global economic crisis, which would cause incalculable damage.

He said the bank had prepared enough cash for entrepreneurs, who are expected to seek onshore loans instead of offshore ones.

Regarding the domestic interest rate trend, she said the rate is likely to decline in tandem with global interest rates.

However, any interest change depends on Bank of Thailand decisions, she said.

-- TNA 2008-10-14

[george]

Central bank mull increased disposal of position in swap market

BANGKOK: -- Bank of Thailand (BoT) Assistant Governor Suchada Kirakul on Monday revealed the central bank is considering the increased disposal of the central bank's US dollar-denominated holdings in the swap market to ensure that the interest rate in Thai baht terms does not deviate greatly from its real cost.

Speaking after a meeting with local and international bankers to discuss the current global financial volatility, Mrs. Suchada said that irregularity had begun to emerge in the swap market as a result of the US dollar-terms liquidity crunch overseas.

Since the global financial crisis broke out 1-2 months ago, the Thai baht-term lending rate in the swap market had dropped significantly.

In addition, the number of foreign currency-based swap market transactions had dropped sharply.

"The Thai baht-denominated interest rate has declined since it is linked with the future dollar-term interest rate in Singapore and London."

She said that while the US dollar-term liquidity is low, local and foreign banks with liquidity on hand are reluctant to sell the greenback in advance because they are uncertain about the dollar's liquidity in the world market.

As well, they are unsure about the currency exchange volatility and the different cost of the dollar holding by each commercial bank.

It resulted in a demand for the baht selling outpacing that for the greenback.

Mrs. Suchada said that both baht and dollar liquidity remains ample in Thailand's domestic financial market.

However, many investors are reluctant to conduct any business transactions due to global financial uncertainties. So, it seemed the market had closed.

Under the circumstances, importers and exporters might bear higher costs of hedging against Thai baht-denominated risks.

-- TNA 2008-10-14

[toptuan]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily mistinterpreted and downright manipulated. Not enough of them get out of their air-conditioned offices to rub shoulders with their customers to find out what's really going on with the real world.

The people we should be consulting are exporters/importers who have a better handle on what's happening with the immediate business climate.

Currently I have two friends working in import/export in BKK. Since a huge portion of Thailand's trade is with the USA, they are NOW experiencing dramatic cut-backs in import/export activity to the USA. One friend describes 60 staff sitting around on their hands, right now, with nothing to do. Their state-side and European customers cannot get credit for operating capital needs, and are hesitant to dip into any cash reserves which may be left. Thus, orders are quickly drying up.

Medium to smaller export/import companies cannot bear that kind of strain too much longer. If the economy fails at this level, it will quickly filter back to export suppliers and import retailers right here in LOS. Bankers will be interpreting the crisis after the fact, and begging the government for bailouts to stem the flood of business loan defaults.

Talk to people who are in the trenches, not those who would try to direct the economy and business climate from their ivory towers. The latter are hardly the miner's canary we should be paying attention to.

Edited October 14, 2008 by toptuan

[unforgiven]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily mistinterpreted and downright manipulated.

The people we should be consulting are exporters/importers who have a better handle on what's happening with the immediate business climate.

Currently I have two friends working in import/export in BKK. Since a huge portion of Thailand's trade is with the USA, they are NOW experiencing dramatic cut-backs in import/export activity to the USA. One friend describes 60 staff sitting around on their hands, right now, with nothing to do. Their state-side and European customers cannot get credit for operating capital needs, and are hesitant to dip into any cash reserves which may be left. Thus, orders are quickly drying up.

Medium to smaller export/import companies cannot bear that kind of strain too much longer. If the economy fails at this level, it will quickly filter back to export suppliers and import retailers right here in LOS.

Talk to people who are in the trenches, not those who would try to direct the economy and business climate from their ivory towers.

you are so correct!!!!!!!!!!!!!!

[Seneque]

To all economic wizards :

What does that mean for the Thai Baht ? .... strenght in the short term due to dollar sell and then heavy dip or ...?

i'll be interested to hear from you all

[toptuan]

To all economic wizards :

What does that mean for the Thai Baht ? .... strenght in the short term due to dollar sell and then heavy dip or ...?

i'll be interested to hear from you all

Get a crystal ball. Just don't ask a banker.

[Scott]

Toptuan: You mentioned that bankers are the last ones that should be consulted. I am not an expert in economics at all, but I am wondering if what the OP says seems to be correct or not. My guess is that sometimes even a banker might be right once in a while!

I am not trying to flame or challenge you at all--your way more knowledgeable in this area than I am--just wondering if you agree with the assessment.

Thanks

[toptuan]

Toptuan: You mentioned that bankers are the last ones that should be consulted. I am not an expert in economics at all, but I am wondering if what the OP says seems to be correct or not. My guess is that sometimes even a banker might be right once in a while!

I am not trying to flame or challenge you at all--your way more knowledgeable in this area than I am--just wondering if you agree with the assessment.

Thanks

I respect your point. Having been both a banker and an exporter, the import of my post is to simply treat a banker's prognostications with a grain of salt.

Who would be a better source about the health of an Isaan river? The local fisherman who's just lost 5,000 fry in his fish farm due to chemical poisoning by the factories upriver, or the Ministry of the Environment that continually paints a rosy picture of Thailand's pollution problems? I submit this as a similar analogy.

[Samuian]

Toptuan: You mentioned that bankers are the last ones that should be consulted. I am not an expert in economics at all, but I am wondering if what the OP says seems to be correct or not. My guess is that sometimes even a banker might be right once in a while!

I am not trying to flame or challenge you at all--your way more knowledgeable in this area than I am--just wondering if you agree with the assessment.

Thanks

Looking back to what happened in the wage of the financial crisis in 1997.... well, those bankers including the finance ministry kept saying that everything will be alright and the media had drawn very unbalanced picture.

If nobody really knows what is going to happen, who will/can tell?

Nobody knows for sure, until we all experienced it.

Paul Krugman has but pointed at this coming crisis, in regards to the measures to be taken, and /or a re-occurrence of it, starting in the US with the property/home loan market, in 1998 and triggering a new crisis which will be much, much more survire than the one in 1998!

But even the Economic czars and gurus, are not necessarily always right!

[Scott]

Thanks Toptuan, I see what your saying and your point is well made. I'll keep that in mind when reading threads such as this one.

[geriatrickid]

Uhh forgive me, but the banker merely stated the obvious. Thailand depends heavily on exports and Tourism. If the customers don't have the money to buy or to visit, then for sure there will be a ripple effect. People have been stating the obvious in the forums since April when the wall street folks started panicing.

What I would have like to have heard is a definitive statement as to how much of the mortgage backed securities are being held by the Thai banks and the government. I have yet to see a clearcut statement from any Thai financial services company along the lines of what was done elsewhere. (e.g. Allianz stated in its annual report the exposure it had through Dresdner Bank.)

[Seneque]

Uhh forgive me, but the banker merely stated the obvious. Thailand depends heavily on exports and Tourism. If the customers don't have the money to buy or to visit, then for sure there will be a ripple effect. People have been stating the obvious in the forums since April when the wall street folks started panicing.

What I would have like to have heard is a definitive statement as to how much of the mortgage backed securities are being held by the Thai banks and the government. I have yet to see a clearcut statement from any Thai financial services company along the lines of what was done elsewhere. (e.g. Allianz stated in its annual report the exposure it had through Dresdner Bank.)

I guess that is where the problem lies ... total lack of transparency from thai banks (the family owners would not appreciate if anyone knew how they handle funds ...), hence what it their exposure to this global mess is total assumption, plus the never ending Bank of Thailand reassurance that everything is fine ... which makes Thailand as the only country in the world in that position !

I hope they are right but the picture looks too good not have been photoshopped ...

Of course a crystal ball would help tremendously but the firmness of the Baht since Mr. T has his assets frozen here, is rather suspicious to me ... no offence.

[Martin]

There is nothing whatsoever surprising in what the SCB lady says.

It is a best-case prediction derived from a blindingly-obvious scenario that has been foreseen for some years. I remember a Will Hutton article in mid-2006 entitled "Hope for the best; prepare for the worst" on the subject, and we have had several threads on here about various aspects.

However, the lady is right to spell it out, in case anybody hasn't been looking thata'way and, so, has not seen the obvious.

She is also right to put that most-optimistic slant on it at this stage, if she thinks that there are those who are becoming aware for the first time. When they have had a little time to absorb that best-case outlook, they'll likely not be paniced by the more likely mid-case or worse-and-worser-case possibilities.

[khunjamespittman]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily mistinterpreted and downright manipulated. Not enough of them get out of their air-conditioned offices to rub shoulders with their customers to find out what's really going on with the real world.

The people we should be consulting are exporters/importers who have a better handle on what's happening with the immediate business climate.

Currently I have two friends working in import/export in BKK. Since a huge portion of Thailand's trade is with the USA, they are NOW experiencing dramatic cut-backs in import/export activity to the USA. One friend describes 60 staff sitting around on their hands, right now, with nothing to do. Their state-side and European customers cannot get credit for operating capital needs, and are hesitant to dip into any cash reserves which may be left. Thus, orders are quickly drying up.

Medium to smaller export/import companies cannot bear that kind of strain too much longer. If the economy fails at this level, it will quickly filter back to export suppliers and import retailers right here in LOS. Bankers will be interpreting the crisis after the fact, and begging the government for bailouts to stem the flood of business loan defaults.

Talk to people who are in the trenches, not those who would try to direct the economy and business climate from their ivory towers. The latter are hardly the miner's canary we should be paying attention to.

Refer to your own post for the problem, liguidity in the credit market is the problem. It appears to me that most of the world's finance ministers are focused on the credit market. I agree with your assessment of the US stock. It's less than 5% of GDP and an poor indicator. Likewise import/export is only one segment and is only important in terms of its balance. Focusing on volume there would be a huge mistake if trade balance continues to get worse.

Right now the focus is where it should be and I expect the housing market to improve over time and reduce the volatility of the world wide markets as banks are better able to handle all their short term credit requirements at a reasonable interest rate. The import/export market problems will remain regional because of productivity, raw materials, and labor costs.

By the end of 2009, this whole crisis will likely be just a footnote with few remaining affects.

[jkinbkk]

Good lord, these top Thai banker guys are inspirational with their foresight and vision.

Their predictions and statement warning of a 'severe impact from global economic crisis' is genius!

The Thai Nations people can sleep soundly in there beds in the knowledge that these guys are clear 'on the case'.

Edited October 14, 2008 by jkinbkk

[steveromagnino]

What I would have like to have heard is a definitive statement as to how much of the mortgage backed securities are being held by the Thai banks and the government. I have yet to see a clearcut statement from any Thai financial services company along the lines of what was done elsewhere. (e.g. Allianz stated in its annual report the exposure it had through Dresdner Bank.)

There was an article in the Thai press a while back that stated something like 2.5% of BBL's total asset book was foreign debt that could be affected by mortgage backing; I think that was the highest; SCIB had something like 1.5% and some had almost none.

Since most of the banks AFAIK are required to hold a lot of their loan book locally and in local currency (but could be totally wrong about this) plus given the fingers burnt in the past as well as the ample number of deals available locally, I am not sure many ventured out to invest abroad.

Can't remember KTT or something about 2-3 weeks ago.

[Thai at Heart]

Well now that that the pooyai has spoken, they can get on and do something about it.

[Johpa]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily misinterpreted and downright manipulated. Not enough of them get out of their air-conditioned offices to rub shoulders with their customers to find out what's really going on with the real world.

You are spot on here. I work on the front line of the economy, retail. Twenty years ago I always had a close relationship not only with the manager of my local branch but also with my "personal" banker. They kept their fingers on the pulse of the local economy. These days the local branch manager runs a turnkey operation, who she might as well be managing a shop in the mall and my "personal" banker is some kid a thousand miles away at a toll free number. In the US, banks no longer serve as the focal point of investment, they are retailers, just like their mall counterparts, and what they sell is debt and make their profits on fees. Those who run these chain stores isolate themselves in their high-rise palaces and suffer from the exact same short comings from that isolation that caused the exile of Acaan Sulak over lese majeste charges decades ago.

For me, if I want to know what is happening with my general local economy, I call my friend who owns the local laundry that caters to the restaurant trade and ask him about the trend of the napkin count, a number that does not lend itself to misinterpretation nor a number that can be manipulated.

[jfchandler]

It's late...and I don't have my economics hat on right now...

But...if I'm translating things correctly here...the major difference between what the SCB gal was saying...and what Toptuan responded about...was the bank gal was saying the problems were likely to hit Thailand late this year and more into next near... whereas Toptuan was saying ...WAKE UP.... it's already hitting here now.

The difference...as I understood both...was pretty much a question of timing... already happening now...or off on the horizon...

At least, Thailand is doing better than the USA... My government for recent years and months kept insisting everything was FINE.... right up until the stock market tanked, banks started failing and someone decided a $700 billion public bailout on the finance industry was required.

[Ricardo]

Regarding the domestic interest rate trend, she said the rate is likely to decline in tandem with global interest rates.

However, any interest change depends on Bank of Thailand decisions, she said.

-- TNA 2008-10-14

My FT (11th October) tells me that last week "Australia cut interest rates by one percentage point on Tuesday and China, Hong Kong, South Korea, and Taiwan joined counterparts in the US and Europe by co-ordinating monetary loosening later in the week", whatever that means.

I don't recall the BoT doing anything much ... perhaps they're not on the mailing-list ?

Anything which were to weaken the Baht, currently strong, would surely assist exporters & tourism. But might affect adversely any poo-yai currently rushing to transfer assets out of Thailand, in the direction of the Bahamas or B.V.I.

Interesting that local banks always wait for BoT decisions, when they might make their own minds up, based upon their own businesses & customers & view of the market. In some other countries, banks have been known to anticipate their central-bank on rises in lending-rates, or delay cuts following government decisions, in the interests of profits.

[Martin]

"Anything which were to weaken the Baht, currently strong, would surely assist exporters & tourism."

IMO, that would have been right. up until recently. But now, I think it would have no more effect than "pushing on a string".

Manufacturers aren't going to be getting orders from retailers who have far less customers buying their stock until their stock has gone down considerably.

Similarly, people are deciding to do without a holiday, no matter how far their money would go if they came here for their holiday rather than going to one of Thailand's competitor destinations.

It is the like that with houses in the UK now. Even with prices down 40% in some cases, there are no buyers. I remember that happening about fifteen years ago, too.

My mother died and we had her house to sell. There was nothing wrong with the house. In fact, we had a few people amongst our aquaintances tell us that they would like the house, but couldn't find a buyer for their present one. But the agents took three years to get an offer; and, in the meantime, that agency had gone down from six people in the office to just one.

[johnwills]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily mistinterpreted and downright manipulated. Not enough of them get out of their air-conditioned offices to rub shoulders with their customers to find out what's really going on with the real world.

The people we should be consulting are exporters/importers who have a better handle on what's happening with the immediate business climate.

Currently I have two friends working in import/export in BKK. Since a huge portion of Thailand's trade is with the USA, they are NOW experiencing dramatic cut-backs in import/export activity to the USA. One friend describes 60 staff sitting around on their hands, right now, with nothing to do. Their state-side and European customers cannot get credit for operating capital needs, and are hesitant to dip into any cash reserves which may be left. Thus, orders are quickly drying up.

Medium to smaller export/import companies cannot bear that kind of strain too much longer. If the economy fails at this level, it will quickly filter back to export suppliers and import retailers right here in LOS. Bankers will be interpreting the crisis after the fact, and begging the government for bailouts to stem the flood of business loan defaults.

Talk to people who are in the trenches, not those who would try to direct the economy and business climate from their ivory towers. The latter are hardly the miner's canary we should be paying attention to.

Refer to your own post for the problem, liguidity in the credit market is the problem. It appears to me that most of the world's finance ministers are focused on the credit market. I agree with your assessment of the US stock. It's less than 5% of GDP and an poor indicator. Likewise import/export is only one segment and is only important in terms of its balance. Focusing on volume there would be a huge mistake if trade balance continues to get worse.

Right now the focus is where it should be and I expect the housing market to improve over time and reduce the volatility of the world wide markets as banks are better able to handle all their short term credit requirements at a reasonable interest rate. The import/export market problems will remain regional because of productivity, raw materials, and labor costs.

By the end of 2009, this whole crisis will likely be just a footnote with few remaining affects.

You are assuming the the 513 trillion dollar derivatives bubble doesn't burst, I wouldn't be so sure.

[unforgiven]

To all economic wizards :

What does that mean for the Thai Baht ? .... strenght in the short term due to dollar sell and then heavy dip or ...?

i'll be interested to hear from you all

I'll bet short term strenght for the baht then depending on oil(which I believe is going to keep going down) I think they be flight back to the USD.............the subprime clusterfuc_k will be delt with and the american tax payer is going to take it deep in the brown=buying less shrimp and other Thai exports.I hope I'm wrong!

[PeaceBlondie]

I suggest the shoe-shine boys and the massage ladies trade places with the bankers.

[Ricardo]

"Anything which were to weaken the Baht, currently strong, would surely assist exporters & tourism."

IMO, that would have been right. up until recently. But now, I think it would have no more effect than "pushing on a string".

Manufacturers aren't going to be getting orders from retailers who have far less customers buying their stock until their stock has gone down considerably.

Similarly, people are deciding to do without a holiday, no matter how far their money would go if they came here for their holiday rather than going to one of Thailand's competitor destinations.

It is the like that with houses in the UK now. Even with prices down 40% in some cases, there are no buyers. I remember that happening about fifteen years ago, too.

My mother died and we had her house to sell. There was nothing wrong with the house. In fact, we had a few people amongst our aquaintances tell us that they would like the house, but couldn't find a buyer for their present one. But the agents took three years to get an offer; and, in the meantime, that agency had gone down from six people in the office to just one.

Good point, but as a born-again optimist, I believe there are still some potential visitors-to-Thailand out there, and would like to see the BoT encouraging them.

My Economist (11th October) tells me that the Fed, Bank of England, European Central Bank, Canada, Sweden & Switzerland, all joined-in for this co-ordinated cut in rates. So the good old BoT may eventually respond, once the local political problems are over, one hopes.

[ratcatcher]

With most of the gloomy financial news coming from the United States, it is interesting to see how other countries are faring under these difficult economic conditions.

I was watching the BBC article on the Chinese toy factory closures where the workers haven't been paid and since they are poor and work long hours, their accommodation was on the factory premises. This means now they are jobless and in many cases homeless.

It will be interesting to see how manufacturing countries like China, with huge cheap labor pools, deal with the fact that companies like Wal-Mart will be ordering less of everything as consumers buckle down to less spending.

On the surface, Thailand seems to have been impervious to the goings on over the last few days, but I am sure that in the coming months we'll see things take a different heading..............down. Tourists.......down, exports...........down etc etc.

With oil prices hovering around $70-$75, it will be interesting to see how much this affects the average Thai.

Also can anyone reasonably predict where the baht will be against the $US by the end of 2008? about the same or around B36=$1.00?

I wonder how much the Gulf Arab states are contributing to the solution of this world crisis?

[toptuan]

It's late...and I don't have my economics hat on right now...

But...if I'm translating things correctly here...the major difference between what the SCB gal was saying...and what Toptuan responded about...was the bank gal was saying the problems were likely to hit Thailand late this year and more into next near... whereas Toptuan was saying ...WAKE UP.... it's already hitting here now.

The difference...as I understood both...was pretty much a question of timing... already happening now...or off on the horizon...

At least, Thailand is doing better than the USA... My government for recent years and months kept insisting everything was FINE.... right up until the stock market tanked, banks started failing and someone decided a $700 billion public bailout on the finance industry was required.

Exactly my point (above).

And now the <deleted> hits the fan Report in today's news....

Export falls 30pct; 1 mln could be unemployed

(BangkokPost.com) - The Federation of Thai Industries (FTI) warned that Thailand’s export output had plunged 30 percent and the slump could prolong till the beginning of 2009, which could leave up to one million people unemployed in the industrial sector.

FTI deputy chairman Thaveekij Jaturajarernkul said after the meeting with FTI provincial chiefs nationwide that the industrial sector may cut 10 to 15percent of employees, or approximately 900,000 to one million people out of about six million in total. Around 700,000 new graduates would also have more difficulties in finding jobs each year, he noted.

This is due to the global economic recession, and many industrial segments of the country have experienced lower sale orders by about 30 percent from the United States, the European Union and Japan.

“Many factories have lifted their overtime (OT) and reduced the number of workdays from six to five. Some factories have to lay off 10 percent of their staff, and the consequences should be more apparent by January 2009,” Mr Thaveekij said.

He urged the government and the private sector to jointly seek plans to cope with the economic crisis because there are no direct solutions at the moment.

Another FTI deputy chairman Thanit Sorat said the export output, particularly from clothing, furniture, ceramics and electrical appliance industries, have dived by about 20 to 30 percent.

“Thailand is now facing both economic and political crises while other countries have to deal with the global economic downturn, and he could not see the answers to the problems,” Mr Thanit stated.

FTI deputy chairman Dusit Nontanakorn said the economic breakdown is a global problem and the country could not put it under control.

Edited October 28, 2008 by toptuan

[Samuian]

Good point, but as a born-again optimist, I believe there are still some potential visitors-to-Thailand out there, and would like to see the BoT encouraging them.

Our House is booked out, for the coming season!

It might be a poor performing 2009 all together, but I dare to make predictions.

Compared to pre-Euro times the Baht is still weak and Thailand cheap, the US$ ratio to the Baht is 33 = 1 US$, pre 1997/8 it was 24=1US$ so I dont get the hype!

Maybe there is still people out there who think there is a free lunch out there somewhere!

Besides things can be "talked down", it's the "fear factor" people talking about.

That people, especially in England have made some breathtaking money on real estate, that the Pound reached 70 Baht in Exchange rates is forgotten!

Economies worldwide are facing cycles, after red hot it tends, to go lukewarm, to ice cold.... there is no continuing genuine growth and for sure no everlasting Boom!

It's simple as that!

Concerning 1 mil. unemployed, and the closure of Chinese toy factories, it these "surplus" industries, if economies facing a boom time people have extra spending power to spend on cheap stuff, that is what they have been churning out and the tidal wave they have been riding on, has brought them on to dry grounds.

Forgotten when cheap Chinese knitwear was swamping the European and us markets and threatening the industries in those countries?

I am NOT an Economist, but think that things will adjust itself, always did.

Edited October 28, 2008 by Samuian

[NanaFoods]

Seems the stock price of my previous place of employment in Thailand and listed on the SET is now about 1/3 what it was when I resigned. All I can say is, I am fortunate to have left when I did, and I am fortunate to come to Thailand when I did, otherwise I'd surely be hit by the crashing housing market in the US. Whew.

[dumball]

Bankers are the last to consult about an impending financial crisis (witness USA, Europe, Iceland, etc.) I've been a banker. They deal at the esoteric level of government data, stock market trends, etc. all of which can be so easily mistinterpreted and downright manipulated. Not enough of them get out of their air-conditioned offices to rub shoulders with their customers to find out what's really going on with the real world.

The people we should be consulting are exporters/importers who have a better handle on what's happening with the immediate business climate.

Currently I have two friends working in import/export in BKK. Since a huge portion of Thailand's trade is with the USA, they are NOW experiencing dramatic cut-backs in import/export activity to the USA. One friend describes 60 staff sitting around on their hands, right now, with nothing to do. Their state-side and European customers cannot get credit for operating capital needs, and are hesitant to dip into any cash reserves which may be left. Thus, orders are quickly drying up.

Medium to smaller export/import companies cannot bear that kind of strain too much longer. If the economy fails at this level, it will quickly filter back to export suppliers and import retailers right here in LOS. Bankers will be interpreting the crisis after the fact, and begging the government for bailouts to stem the flood of business loan defaults.

Talk to people who are in the trenches, not those who would try to direct the economy and business climate from their ivory towers. The latter are hardly the miner's canary we should be paying attention to.

What was the tinmans complaint in 'The wizard of oz ' "If i only had a brain " How long do people wait before they admit the inevitable ? Too long it seems .