Thailand Escapes Financial Meltdown

[Hawaiian]

No aaaaaa the USD is not utterly f***ked. The dollar may be down, but it is not out. Right now demand for U.S. treasuries is strengthening the USD. The European economy is in far worse shape than the American economy. Believe or not many investors are dumping their euros. I am not saying this out of patriotism. It's just reality.

[albymush]

No aaaaaa the USD is not utterly f***ked. The dollar may be down, but it is not out. Right now demand for U.S. treasuries is strengthening the USD. The European economy is in far worse shape than the American economy. Believe or not many investors are dumping their euros. I am not saying this out of patriotism. It's just reality.

Your right, the dollar is still a rock in the currancy world !!!

The £pound to the $USD has collapsed, along with the Euro and a host of other currancies! And that is the problem with the £, and the $AUS for instance, to Thai Baht -- because the Thai's are holding the Baht to the $USD, hence the $USD still converts at 34 B

before this upheaval. when the £ was equal to $2 - the exchange rate was around 68 B = £1

However the Thai financial systems are not to blame for the weak £, it's has been caused by a whole raft of problems such as:- The soaring price of oil, that scared 50% of British industry into pulling back from any investments.

The credit crunch - that scuppered the investment plans of the other 50%.

The frightening sounds made by crashing financial institutions in Britain and around the world.

But I blame the greed of the oil producers that sat back smirking whilst the price of oil soared. they kicked off the whole lack of trust scene that escalated into the crisis that we now have.

Oil prices affect much more than the price of petrol. It affects most plastics (a by- product of oil). it affects Mineral oil - prices were raised to double, and more, to maintain parity as an alternative fuel for transport and heating. and basically everything else that is transported from "A" to "B" became more expensive because fuel costs and therefore transport costs rocketed.

Will Thailand be affected by this world crisis?? --- Without a single doubt.

Are Thailands banks safe?? -- Safe as the bank of England mate!

[zl1vette]

"I think 1997 made us very aware of the role that risk management has to play," said Kosit Panpiemras, executive chairman of Bangkok Bank, speaking of Thai banks in general. "I think we have also been very careful about liquidity, particularly here at Bangkok Bank. Our loan-to-deposit ratio is something like 90 percent -- only 90 percent of our deposits have been lent out."

Only 90 percent? Since when is 90 percent not much? Perhaps he meant to say "only 10 percent..."

Some of the morons running the banks in the U.S. had them leveraged 50:1. In other words, actual cash on hand accounted for only TWO PERCENT of deposits.

[SiriusBlack1]

Interesting story, while the PAD is melting down Thailand to such an extent that no freedom and no wealth is left (Except for their Chinese friends of course).

Thailand's economy will be virtually wiped out if 2% of the population will continue (with support of the highest people) to hold the country randsom. Therefore the comments are misplaced and thus absurd, Thailand will not escape a meltdown, the new tourist figures will speak for itself. The new investment figures will tell all of the story. Banks cannot even find customers for their credit nowadays that is even worse.

Yes. The stability of the banking system attracts worried money but not investment -- long-term investment won't come until a ragtag bunch of elitists stops serving as a figleaf for what is effectively a military coup. And this country will not become a developed economy in my lifetime.

For all his many, many, many faults, things were better under Thaksin.

[aaaaaa]

No aaaaaa the USD is not utterly f***ked. The dollar may be down, but it is not out. Right now demand for U.S. treasuries is strengthening the USD. The European economy is in far worse shape than the American economy. Believe or not many investors are dumping their euros. I am not saying this out of patriotism. It's just reality.

you just wait and see

whatever it looks like now - is merely a temporary thing. for a little while.

:

often when a major event is coming, you see market moves in one direction and then makes a bigger move in another direction....

the major move is coming in the dollar and gold - is way up in gold and way down in dollar...

you might watch other related videos, as well as read the comments

the good news - Asia (and Thailand) may be a better off. after all most of Asian countries have real solid economies with

real GDPs and real goods being produced - especially foods.

and they do take some steps already

ASEAN + 3 push expanded Chiang Mai Initiative

10/25/2008

... have agreed to expand an existing bilateral foreign currency swap framework that had been set up to assist to any of them that may experience liquidity problems, amid the spreading global financial crisis.

ASEAN "plus three" is studying ways to expand the $84-billion Chiang Mai Initiative, the deal that allows

these countries to borrow foreign currency from one another, via bilateral arrangements, in order to boost their reserves.

"They [ASEAN plus three] agreed to increase it but they will still discuss the details. A working group has been designated to discuss it," he said.

"According to [Finance] Sec. Margarito B. Teves, the fund seeks to assist the macroeconomic needs of countries. This will be a preparation for the effects of financial crisis...It is going to be an enhancement of the Chiang Mai Initiative," he added.

...the leaders have discussed the possibility of elevating the Chang Mai initiative from a bilateral swap arrangement into a multilateral scheme.

Thailand suggested that the fund be increased from $84 billion to $250 billion.

The leaders agreed to wait for the recommendations of the technical working group in December at the ASEAN Summit in Bangkok...

Under the Chiang Mai Initiative, a country experiencing conditions similar to the 1997 Asian financial crisis could borrow foreign currency from another country to augment its foreign reserves until the crisis is over. This would enable countries vulnerable to a financial crisis to access the funds in a foreign reserve pool without seeking assistance from lenders like the International Monetary Fund.

Focus on domestic economy, govt told

bot sets sights on inflation

[amarka]

I think Thai Baht will go to around 43 to USD during the next year. As soon as the Thai Central Bank stops supporting The Baht it will go pretty fast. Just look at the Korean currency.

Does anyone know how large deposit amount is insured in case the bank goes bankrupt.

I do not think there is any deposit insurance. Have 1.5 mill. Baht in a CD, will mature Dec. 23th have it with Siam Com.

Plan to build a house here in Chiang Rai. See some of newly build houses and business complexes finished here are still

sitting there empty. This world wide recession will hit LOS very hard. Baht is way to strong and exports drying up.

US $ 34.5 Baht ... Pound 53.1...Euro 43.1 ..Aussie 20.9 Tourism is almost gone. With those exchange rates no one will

invest here. I have the most loveliest Thai wife and the house is for her, we already have a beautiful piece of property

1 rai all walled in with a stainless steel gate. I am American and I do not like the exchange rate , I feel sorry for all of you

hi hardy...

according to the world bank, losses amongst ex pats that can be attributed to foreign wifes/girlfriends from asia, espacially thailand, contributed to more losses to ex pat males than the sub prime crises in the last 6 months

a worrying thought.... by the way steel has fallen by 50% in thailand in the last 2 months!

amarka

[amarka]

hi

if you add up the cost to the average income (U.E ) of the increase in the oil price we have the following;

fuel price = 100 euros a month

food prices = 100 euros month - higher raw materials and transport costs

other costs = 100 euros month - basically anything else you buy.....especially if you have a home to maintain...

take this money out of each persons pocket each month and you have the following scenario

take home pay 2,000 euros

rent/mortgage 600 euros

food /other 600 euros

utility bills 400 euros

car 200 euros

credit cards 200 euros

increases as above 300 euros

balance per month -300 euros = mortage not paid...... means banks not paid,means insurance companies pay defaults and banks run out of cash = credit crisis = higher % loan rates and so on.....

now the oil price has sunk the financial situation will cure faster than central bank intervention...

oil price decrease puts money in everyones pockets fast....

sorry for the simplicity of the equation.... but sometimes simple things are responsible for large movements in liquidity.

cash is king

amarka

The dollar may be down, but it is not out. Right now demand for U.S. treasuries is strengthening the USD. The European economy is in far worse shape than the American economy. Believe or not many investors are dumping their euros. I am not saying this out of patriotism. It's just reality

Your right, the dollar is still a rock in the currancy world !!!

The £pound to the $USD has collapsed, along with the Euro and a host of other currancies! And that is the problem with the £, and the $AUS for instance, to Thai Baht -- because the Thai's are holding the Baht to the $USD, hence the $USD still converts at 34 B

before this upheaval. when the £ was equal to $2 - the exchange rate was around 68 B = £1

However the Thai financial systems are not to blame for the weak £, it's has been caused by a whole raft of problems such as:- The soaring price of oil, that scared 50% of British industry into pulling back from any investments.

The credit crunch - that scuppered the investment plans of the other 50%.

The frightening sounds made by crashing financial institutions in Britain and around the world.

But I blame the greed of the oil producers that sat back smirking whilst the price of oil soared. they kicked off the whole lack of trust scene that escalated into the crisis that we now have.

Oil prices affect much more than the price of petrol. It affects most plastics (a by- product of oil). it affects Mineral oil - prices were raised to double, and more, to maintain parity as an alternative fuel for transport and heating. and basically everything else that is transported from "A" to "B" became more expensive because fuel costs and therefore transport costs rocketed.

Will Thailand be affected by this world crisis?? --- Without a single doubt.

Are Thailands banks safe?? -- Safe as the bank of England mate!

[MJP]

No aaaaaa the USD is not utterly f***ked. The dollar may be down, but it is not out. Right now demand for U.S. treasuries is strengthening the USD. The European economy is in far worse shape than the American economy. Believe or not many investors are dumping their euros. I am not saying this out of patriotism. It's just reality.

European economy is not too bad.

UK economy is far, far worse per capita than the US.

Still,

http://www.financialsense.com/fsu/editoria.../2008/1023.html

[aaaaaa]

Banker: Worst global financial crisis ever seen

The Star, Oct 25, 2008

I have been in banking for over 40 years and I have never seen this happen before.

Basically it is a lack of trust between banks and one financial system with another.

The only place that is stable is China. I think the capitalist system has got it a bit wrong.

I basically think we in Asia are luckier.

No matter what happens we will all be affected one way or another.

Malaysia and China will be less affected than elsewhere.

China will, however, be affected because its exports to America will be reduced.

There will be a fundamental change in banking and the financial services industry. I think we will all go back to basics.

[ray23]

New world currency, in a few weeks we have a new boss and Bush will be lucky to get a cup of coffee, much less something like this. Do yuo really think the world is going to listen to him or his Pops about economies? Jr. bankrupted businesses. far from the guy the world will trun to for economic advice?

I've been reading or three years now that the dollar will be toilet issue hasn't happened yet and I doubt it it will. Hugo not accepting dollars that has nothing to do with economics he hates America. Opec ha it's oqwn problem now with the oil prcie down. I read the articles about certain celebs only accepting Euros or pounds arrogant folk, wonder what they want to ba paid in today?

"or perhaps it is both: government ignorant and BS-ing people.

coz with all the PAD circus and almost war with Cambodia - the least thing they want is if people start to panic and pull out their money from the banks !"

found this aspect of the post interesting anyone noticing the run on gold last week, in a time that it is falling. To such an extent they won't sell the bars on the weekends. Now that money to make those purchases comes from somewhere and I don't think it's from under the mattress. They are taking it out of bank accounts. Is that panic?

In the end we may be very lucky we are not paid in Baht.

Yuo know if this country is not mired in violence, by years end I'm goign to be very surprised. My honest thoughts when the funeral rights for the Princess is done things are going to change drastically. I don't think any side want's to dishoner this lady. That's keeping a lid on things. A far as I know like the American election that is not to far away.

My hope is it does not go as far as civil war and it remain contained to certain areas as it is now. But there are no gurantees of that. This is a presure pot boiling away without a relief valve, it will explode.

When it be breaks out the cops are not going to contain this, even if they use the same tactics they did last time. Next tiem ther are going a lot more guns in those crowds. PAD wants an over throw of the governement. All they have to do is stay where they are and the outside factors will come to them. Whern they do it's going to be a battle the military will be called in. Thats exactly what PAD wants.

There never has been a time of talking in this and there won't be.

My guess is we will see something big in November, PM has already said he will not see his Asean meeting in Chaing Mai destroyed. He may be quiet but I think he meant that. He is not Mr. Samak, whose bark was only that. What's he got to lose it's obvious he not goign to be a long term PM and he knows that. It's strange I kind of like the guy, to bad his time wasn't under different circumstances. Maintains his cool in public, made his appearnces in adverse circumstances. I know one thing I would not want to be on his security team. But, you know that is only based on what I have seen who knows what goes on behind closed doors.

Mr. Taksin if he wants to come home he has to stir the pot. Just to many things happening for the country not to be affected and here the world economy is only a part of it.

Dr Tarisa may think tourist will offset exports losses I don't think so. I hope she stays centered on inflation my cost will be down an my income up.

But those are just my humble thoughts unlike Naam my hero, I'm really that sure of my thoughts

[Martin]

For 'aaaaaa':

OK, I now see that you were meaning that the short-term picture for the price received for exported rice is not what it appeared it would be a little while ago.

I (being basically a peasant farmer {and proud of it} and not so tied in to short-term swings) was just giving my opinion of the long-term fundamentals.

I forgot to mention that, as well as our rice-growing land, we have some land rented out that grows sugar cane. Quite a lot of years ago, rice was grown on it, but it was quickly converted to growing sugar when so many were drawn away from the village to go down to Bangkok or the Seaboard and earn cash, and also the price of sugar went up. We are going to convert that land back to rice when the present rental period ends. It will support two families for their own consumption and income from their surplus.

[DegenFarang]

Our loan-to-deposit ratio is something like 90 percent -- only 90 percent of our deposits have been lent out."

I don't know much about bankging, but isn't that a lot? Do most banks lend out over 100% of deposits by using leverage or something?

[Martin]

'albybush' finished post #92 with:

"However the Thai financial systems are not to blame for the weak £, it's has been caused by a whole raft of problems such as:- The soaring price of oil, that scared 50% of British industry into pulling back from any investments.

The credit crunch - that scuppered the investment plans of the other 50%.

The frightening sounds made by crashing financial institutions in Britain and around the world.

But I blame the greed of the oil producers that sat back smirking whilst the price of oil soared. they kicked off the whole lack of trust scene that escalated into the crisis that we now have.

Oil prices affect much more than the price of petrol. It affects most plastics (a by- product of oil). it affects Mineral oil - prices were raised to double, and more, to maintain parity as an alternative fuel for transport and heating. and basically everything else that is transported from "A" to "B" became more expensive because fuel costs and therefore transport costs rocketed.

Will Thailand be affected by this world crisis?? --- Without a single doubt.

Are Thailands banks safe?? -- Safe as the bank of England mate! "

That is a good overview, except for "oil producers....sat back smirking". The fact that the easy oil has now all gone means that the oil producers need about US$100 (at the purchasing power of the 2007 US$) per barrel to be able to pour in the money to keep production up. As wells decline, they no longer pour out the oil; it has to be pushed out by water injection etc. And, as big fields (called 'elephants') are no longer being discovered, a lot more exploratrion has to be done to make little finds, if any.

There is also another even more serious effect of declining natural gas and oil supplies than those mentioned.

Much food production now depends on chemical fertiliser, to produce which the feedstock is natural gas and the transportation and distribution of which depends on oil. Hence, we face rising prices and reducing quantities of food.

That's a nice dig in the last line. America and England have been belittled in the eyes of the world by the results of their bankers gambling frenzy.

[ray23]

This has got to effect tourism in Thailand, leisure money is the first thing to go in a budget. Thailand has held it's baht value. The combination has made this an expensive place to vacation. Thailand itself is recommended it's own people vaction here. Why woudl the ohre coutries be any different. As to the dollar it may be goign up, but people are still losing jobs. That tourist market has places where it can find things comparable to what Thailand offers without as much travel expense. I'm sure that Europe has the same thing.

"Dollar Gains Most Since 1992 on Concern Global Slump Deepening

By Ye Xie

Oct. 25 (Bloomberg) -- The dollar gained the most in 16 years against the currencies of six major U.S. trading partners as a global economic slowdown spurred demand for the greenback as a haven from losses in emerging markets.

``The foreign-exchange market is basically saying we are in a global recession and perhaps a very, very deep one,'' Richard Franulovich, a senior currency strategist at Westpac Banking Corp. in New York, said in an interview on Bloomberg Radio. ``Any sense of rationality and fundamentals is thrown out the window.''

Japan's yen also benefited as investors fled high-risk assets and used the proceeds to pay back low-cost loans taken out in the currency. The yen climbed to a 13-year high against the dollar this week and surged to its strongest level against the euro in six years. The pound fell below $1.53 in its biggest weekly drop since investor George Soros drove sterling out of Europe's system of linked exchange rates in 1992.

The dollar appreciated 6 percent to $1.2623 per euro this week, from $1.3410 on Oct. 17. The currency touched $1.2497 per euro yesterday, the strongest since October 2006. The yen rallied 7.8 percent to 94.32 per dollar from 101.69, and touched 90.93 yesterday, its highest level since August 1995. Against the euro, the yen climbed 12.7 percent to 118.96 from 136.21. It touched 113.81 yesterday, the strongest since May 2002.

This week's decline in the euro was its biggest against the dollar and the yen since the 15-nation currency's inception in January 1999. The yen's gain versus the dollar was the biggest since October 1998.

Dollar Index

ICE Futures' Dollar Index, which tracks the greenback against the euro, the yen, the pound, the Canadian dollar, the Swiss franc and the Swedish krona, rose 4.9 percent this week, the most since September 1992. It touched 86.97 yesterday, the highest level since October 2006.

``We are in a financial crisis,'' said Richard Clarida, a global strategist at Newport Beach, California-based Pacific Investment Management Co., which oversees $830 billion in assets, including the world's biggest bond fund. ``The flight to quality is boosting the dollar and the yen.''

Emerging-market currencies tumbled as Argentina seized private pension funds, and Belarus, Ukraine, Hungary and Iceland joined Pakistan in requesting at least $20 billion of emergency loans from the International Monetary Fund. Brazil's real dropped 8.2 percent to 2.3075 against the dollar, the South African rand decreased 10.4 percent to 11.18 and the Russian ruble fell 3.2 percent to 27.1991.

Weaker Pound

The pound depreciated 8 percent after the Office for National Statistics said U.K. gross domestic product contracted in the third quarter for the first time since 1992. Sterling's drop was its biggest since Black Wednesday in September 1992, when the U.K. was driven from Europe's exchange-rate mechanism. It reached $1.5269 yesterday, the lowest level since August 2002. Against the euro, the pound touched a record low of 81.96 pence.

The yen gained 19 percent this week to 58.72 against the Australian dollar and 19 percent to 52.47 versus the New Zealand currency on speculation a rout in global stocks will encourage investors to unwind trades in which they get funds in a country with low borrowing costs and buy assets where returns are higher. Japan's 0.5 percent target lending rate compares with 6 percent in Australia and 6.5 percent in New Zealand.

``I've never seen this before in terms of global financial market carnage,'' said Alan Ruskin, head of international currency strategy in North America at RBS Greenwich Capital Markets Inc. in Greenwich, Connecticut. ``Those who haven't got out of the yen carry trade will have to watch it collapse.''

Plunge in Stocks

The Standard & Poor's 500 Index dropped 6.8 percent this week, and the Dow Jones Industrial Average fell 5.4 percent. Trading in futures on the S&P 500 and the Dow was limited yesterday after declines in the contracts of more than 6 percent triggered a so-called limit-down restriction.

Volatility on one-month dollar-yen options, a measure of expectations for future price swings, surged to 41.79 percent yesterday, the highest since Bloomberg began compiling data in December 1995. Greater fluctuation may cut carry trade profits.

Abrupt moves in Japan's currency may hurt the world's second-largest economy, Vice Finance Minister Kazuyuki Sugimoto said yesterday. He told reporters in Tokyo that ``we'll carefully watch'' fluctuation in foreign exchange.

When the yen touched a post-World War II high of 79.75 against the dollar on April 19, 1995, the Group of Seven nations intervened by buying the greenback to stabilize currency markets. The G-7 comprises Canada, France, Germany, Italy, Japan, the U.K. and the U.S.

The dollar has ``little significant support'' versus the yen between today's and the postwar level, Kevin Edgeley, a technical analyst at Goldman Sachs Group Inc. in London, wrote in a research note.

The yen may appreciate to about 129 against the pound, a level not seen since 1995, wrote Edgeley, who uses charts of historical prices to predict currency moves.

To contact the reporters on this story: Ye Xie in New York at [email protected]; Agnes Lovasz in London at [email protected]

Last Updated: October 25, 2008 11:10 EDT "

[operator]

Europe on the brink of currency crisis meltdown

The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

By Ambrose Evans-Pritchard

Last Updated: 9:17PM BST 25 Oct 2008

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

Europe has already had its first foretaste of what this may mean. Iceland’s demise has left them nursing likely losses of $74bn (£47bn). The Germans have lost $22bn.

Stephen Jen, currency chief at Morgan Stanley, says the emerging market crash is a vastly underestimated risk. It threatens to become “the second epicentre of the global financial crisis”, this time unfolding in Europe rather than America.

Austria’s bank exposure to emerging markets is equal to 85pc of GDP – with a heavy concentration in Hungary, Ukraine, and Serbia – all now queuing up (with Belarus) for rescue packages from the International Monetary Fund.

Exposure is 50pc of GDP for Switzerland, 25pc for Sweden, 24pc for the UK, and 23pc for Spain. The US figure is just 4pc. America is the staid old lady in this drama.

Amazingly, Spanish banks alone have lent $316bn to Latin America, almost twice the lending by all US banks combined ($172bn) to what was once the US backyard. Hence the growing doubts about the health of Spain’s financial system – already under stress from its own property crash – as Argentina spirals towards another default, and Brazil’s currency, bonds and stocks all go into freefall.

Broadly speaking, the US and Japan sat out the emerging market credit boom. The lending spree has been a European play – often using dollar balance sheets, adding another ugly twist as global “deleveraging” causes the dollar to rocket. Nowhere has this been more extreme than in the ex-Soviet bloc.

The region has borrowed $1.6 trillion in dollars, euros, and Swiss francs. A few dare-devil homeowners in Hungary and Latvia took out mortgages in Japanese yen. They have just suffered a 40pc rise in their debt since July. Nobody warned them what happens when the Japanese carry trade goes into brutal reverse, as it does when the cycle turns.

The IMF’s experts drafted a report two years ago – Asia 1996 and Eastern Europe 2006 – Déjà vu all over again? – warning that the region exhibited the most dangerous excesses in the world.

Inexplicably, the text was never published, though underground copies circulated. Little was done to cool credit growth, or to halt the fatal reliance on foreign capital. Last week, the silent authors had their moment of vindication as Eastern Europe went haywire.

Hungary stunned the markets by raising rates 3pc to 11.5pc in a last-ditch attempt to defend the forint’s currency peg in the ERM.

It is just blood in the water for hedge funds sharks, eyeing a long line of currency kills. “The economy is not strong enough to take it, so you know it is unsustainable,” said Simon Derrick, currency strategist at the Bank of New York Mellon.

Romania raised its overnight lending to 900pc to stem capital flight, recalling the near-crazed gestures by Scandinavia’s central banks in the final days of the 1992 ERM crisis – political moves that turned the Nordic banking crisis into a disaster.

Russia too is in the eye of the storm, despite its energy wealth – or because of it. The cost of insuring Russian sovereign debt through credit default swaps (CDS) surged to 1,200 basis points last week, higher than Iceland’s debt before Götterdammerung struck Reykjavik.

The markets no longer believe that the spending structure of the Russian state is viable as oil threatens to plunge below $60 a barrel. The foreign debt of the oligarchs ($530bn) has surpassed the country’s foreign reserves. Some $47bn has to be repaid over the next two months.

Traders are paying close attention as contagion moves from the periphery of the eurozone into the core. They are tracking the yield spreads between Italian and German 10-year bonds, the stress barometer of monetary union.

The spreads reached a post-EMU high of 93 last week. Nobody knows where the snapping point is, but anything above 100 would be viewed as a red alarm. The market took careful note on Friday that Portugal’s biggest banks, Millenium, BPI, and Banco Espirito Santo are preparing to take up the state’s emergency credit guarantees.

Hans Redeker, currency chief at BNP Paribas, says there is an imminent danger that East Europe’s currency pegs will be smashed unless the EU authorities wake up to the full gravity of the threat, and that in turn will trigger a dangerous crisis for EMU itself.

“The system is paralysed, and it is starting to look like Black Wednesday in 1992. I’m afraid this is going to have a very deflationary effect on the economy of Western Europe. It is almost guaranteed that euroland money supply is about to implode,” he said.

A grain of comfort for British readers: UK banks have almost no exposure to the ex-Communist bloc, except in Poland – one of the less vulnerable states.

The threat to Britain lies in emerging Asia, where banks have lent $329bn, almost as much as the Americans and Japanese combined. Whether you realise it or not, your pension fund is sunk in Vietnamese bonds and loans to Indian steel magnates. Didn’t they tell you?

[Martin]

From post #104:

"The foreign-exchange market is basically saying we are in a global recession and perhaps a very, very deep one"

He is just whistling to keep his fears down, and his hopes up, with that 'perhaps'.

As 'recession' is measured at present (as lack of growth of economic activity) we are in permanent recession and definitely it will go deep.

But I am optimistic that the next generation (like my greatgrandchildren who are now arriving in quanity!) will re-invent the thrift, frugality and living-within-their-means of my forbears and will have more well-being thereby than most people have experienced in the recent decades of Peak Economic Activity.

[animatic]

'albybush' finished post #92 with:

"However the Thai financial systems are not to blame for the weak £, it's has been caused by a whole raft of problems such as:- The soaring price of oil, that scared 50% of British industry into pulling back from any investments.

The credit crunch - that scuppered the investment plans of the other 50%.............

Will Thailand be affected by this world crisis?? --- Without a single doubt.

Are Thailands banks safe?? -- Safe as the bank of England mate! "

That is a good overview, except for "oil producers....sat back smirking".

The fact that the easy oil has now all gone means that the oil producers need about US$100 (at the purchasing power of the 2007 US$) per barrel to be able to pour in the money to keep production up.

As wells decline, they no longer pour out the oil; it has to be pushed out by water injection etc. And, as big fields (called 'elephants') are no longer being discovered, a lot more exploratrion has to be done to make little finds, if any.

That's a nice dig in the last line. America and England have been belittled in the eyes of the world by the results of their bankers gambling frenzy.

And who does this exploration; Halliburton Dick Cheny's personal conglomerate.

I had seen this massive price surge comming at this time, since Bush was elected,

actually before he was elected, it was the logical last year payback for his presidency.

It is the quid pro quo for his time in the glory chair, to his daddy and friends who did it for him.

No doubt engineered by Cheney and the banking crisis is a side effect they expected,

and are profiting from handsomely no doubt also.

Daddy Bush has been TOTALLY hand in glove with Oil Producers for decades.

There was a tripling spike in prices and a slow settling till election day.

This was a 'perception tripling not anything like a VALUE tripling.

Yes oil is harder to get, but not as hard as you say YET.

9 years ago I predicted double or triple gas prices by March of Bush's last year in office,

ruin the summer, and finally settle before the election. But not all the way down.

This general avarice mirrors for me the same mindset, but greater smarts, as Thaksin here.

Which is why I am so set against him controlling the levers of power here.

He would, or has done, the same thing on a smaller scale, with no concern for the country.

[exexpat]

This ain't over yet. Financial crisis is just beginning to bite, this is a deep freeze and gonna last for YEARS, and Thailand thinks its got off scott free. Nope. For those of you who don't understand, basically all those currencies that went up against the dollar for 6 years, all that is coming down in a few months, because it was all "hot money", or loans in dollars from loans in yen that propped them up. Russia was sitting on $600 billion, that will prove it won't be enough to protect itself. So Thailand's measly $100 billion won't be enough either.

Those loans are unwinding now, so euros, aussies, loonies, baht, rinngit, even Chinese yuan, will all tumble.

China has so far resisted, but the pressure will soon be too great. China's well published $2 trillion isn't a pittance compared to the financial storm, it has built as many factories as all of Europe, suddenly half those factories will STOP. You can imagine the fallout with 1.3 billion hungry people to feed.

What people don't know is, the real reserve currency isn't the dollar. It's the Japanese yen, as it is what is being loaned to US to loan to the rest of the world. The dollar now is trumping everyone, but the yen is trumping the dollar when people flee to "QUALITY". This is proof that the Japanese yen is the ultimate currency, the US dollar the second, and so far the Chinese yuan the third, and the rest of the world is just flimsy paper that was being dressed up to make them look strong.

All of this actually stems from the source, not America, but Japan. Japan tried to loan its way out of deflation from a massive $20 trillion crash in the early 1990's. Japan thought if it made enough loans, it could prop up its economy, so the mad rush for cheap yen caused the whole world to party. Well, party over. Europe, US, China, Brazil, Russia and Middle East have all been partying with borrowed Japanese money, Japan effectively financed China's building boom, Middle East's skyscrapers, US's McMansions and massive SUV's, and London's expensive housing, and Russia's new billionaires. Ya, now Japan is recalling those loans, OMG says the world. Yen have come back to Japan, and the money loaned out isn't yours. What happened Friday was the interest rate on those loans spiked 10% in a day as the yen spiked 10% against loans repaid in dollars, nearly 20% against loans repaid in euros IN A DAY.

Edited October 26, 2008 by exexpat

[exexpat]

To put it one way, the entire world is so deep in debt to Tokyo that the only way out is to borrow more money from Japan and keep the system going. How do you think US can finance a trillion dollar war and $700 billion annual consumer deficit at the same time? Unlimited loans from Tokyo at falsely zero rates. The europeans got jealous that if US can borrow so much for seemingly "free", Europe can party on Japanese money too, so they borrowed to build up the Spanish coast with luxury homes, London with penthouses, etc. Not to be outdone, so did the Middle East and China. Suddenly, there is a mad rush to pay back Japanese as the yen soars (interest rates skyrocket), so the unwinding of the loans begins. But companies and countries are hurting so bad that they are now begging again for more loans from Tokyo.

Which means, financial crises will only get progressively worse as Tokyo own's more and more generations of your grandchildren's wealth.

Edited October 26, 2008 by exexpat

[Seneque]

Ya, now Japan is recalling those loans

Completely agree ... but beware if there is a global consensus to say : sorry no more cash, we will default ! then overnight the yen is worth nothing ... then where to turn to !!??

I still believe that countries (who suffer the most now, because they were providing high yielding assets and will be soon again) that have large mineral reserves (australia, south africa, canada, new zealand, brazil ... etc...) will come off this better than most (it will take a while though)... we still are a few billions people on earth that will need to live and for this we need to consume ...

The temporary collapse of most currencies against the USD, the Yen (the THB for us in thailand) is not sustainable when these new 'strong' currencies countries rely mainly on export ... (the US is a different story as they rely only on money borrowed ...)

[exexpat]

Of course, this has more serious implications. America's dollar is second "reserve currency" after yen because Japan will loan to the US as needed, a different reason as to why it was the reserve currency at the end of world war 2, because it was the largest creditor. (We are the largest debtor now) Which means, America can continue to mismanage as much money as it wants and overpower, trash, and rampage any other economy with borrowed Japanese money. That is how we bankrolled the bankruptcy of the Soviet Union, with Japanese funds. This funds the US military industrial complex, which allows Japan to be safe with a small but still powerful military. This keeps international order and the Pax Americana intact, and US's enemies (like China and Russia) always in debt and at the mercy of combined Tokyo's financial power and US military power. And if thats not enough, there is always Europe and minor allies.

Unfortunately for Thais, Thailand is the "third world" because you are third in line for help after 1). Japan and US, 2). Europe, then 3). the minor allies. Better than being a non-ally though.

Edited October 26, 2008 by exexpat

[swillowbee]

Pretty simplistic report, written by journalists ill-prepared to understand the subject. Emerging economies feel it last, and historically, the least. Perhaps not so in an increasingly globalized environment.

Three points need only be mentioned: [1] Thai export manufacturing generates 70% of total GDP; [2] tourism another 6-7% of total GDP; and, [3] Thais (across all sectors, government and private) are ill-prepared for what is about to hit them 1Q2009. Without foreigners, Thailand becomes Cambodia.

Then, expect a hard economic hit to the lower-income, less-educated classes, meaningful social dislocation, and even greater political morass.

[exexpat]

Pretty simplistic report, written by journalists ill-prepared to understand the subject. Emerging economies feel it last, and historically, the least. Perhaps not so in an increasingly globalized environment.

--I write so everyone can understand, and its a world overview, not fortune telling what is going to happen to a specific group. Nations with weaker currencies will benefit from more jobs in the long run. But in the short run, emerging economies if they have a good run-up and didn't prepare, will get hit hard. Since Thailand didn't boom much, so it's slide will be less as long as it can keep from default. (Sufficiency may be been a blessing, or perhaps even politicial crises) I also doubt that Thais will say they felt 1997 the "least".

Then, expect a hard economic hit to the lower-income, less-educated classes, meaningful social dislocation, and even greater political morass.

--Isn't that always the case? That will probably be true regardless what country you are talking about. Even Japan has got homeless. The poor and overextended in the US will no doubt have a tough time. Individuals suffer in places in countries that benefit, and individuals can benefit in countries that suffer.

If you are afraid of default, get out of the currencies that you think will default. If you don't have savings, then you are a guinea pig to whatever comes.

Edited October 26, 2008 by exexpat

[albymush]

Pretty simplistic report, written by journalists ill-prepared to understand the subject. Emerging economies feel it last, and historically, the least. Perhaps not so in an increasingly globalized environment.

Three points need only be mentioned: [1] Thai export manufacturing generates 70% of total GDP; [2] tourism another 6-7% of total GDP; and, [3] Thais (across all sectors, government and private) are ill-prepared for what is about to hit them 1Q2009. Without foreigners, Thailand becomes Cambodia.

Then, expect a hard economic hit to the lower-income, less-educated classes, meaningful social dislocation, and even greater political morass.

I Think you are forgetting that Thailand is the worlds biggest Rice exporter - which - combined with other foodstuffs and rubber - makes up a large slice of their 70% export capability.

Rice and rubber are essential goods and will always have a market!! Admittedly the Tourist market (6-7%GDP) will suffer, but in comparison to the worlds - non-essential goods exporters - Thailand is in a good position to survive the worst of this crisis

[ray23]

Things are nevre that crytsle clear here.

National News Bureau:

"Democrat MP calls for government to expedite aid to farmers

The Democrat party has called on the government to deal with falling agricultural produce prices, reiterating that measures for the rice mortgage to open on November 1st are still ambiguous.

Lop Buri MP of the Democrat party Phongsri Tharaphu (ผ่องศรี ธาราภู) said a recent survey found that agricultural produce prices are dropping throughout the country, especially the prices of rubber, palm and cassava. She stated that due to the previous government’s policy to promote bio-fuel crops, the crops have flooded the market, resulting in drops in prices while the farming costs have remained high. The MP also reminded that the approaching November 1st rice mortgage project still remains ambiguous as participating rice mills have not yet been revealed. The Bank for Agriculturalists and Cooperatives is still bogged down in dealing with the past mortgages, she said.

Mrs. Phongsri also asked that the government clarify its aid to corn farmers who recently rallied for assistance. She stated that agencies have not been selected to participate in the government's corn mortgaging system and a clear list of aided farmers has not been provided."

Thai Economic Growth May Be Slowest in Eight Years (Update2)

By Rattaphol Onsanit and Suttinee Yuvejwattana

"Oct. 17 (Bloomberg) -- Thailand's economy may expand at the slowest pace in eight years as political squabbling curtails domestic spending and exports cool amid waning global demand, the central bank said.

Southeast Asia's second-largest economy will grow between 3.8 percent and 5 percent in 2009, Assistant Governor Duangmanee Vongpradhip said in Bangkok today.

Demand for made-in-Asia exports is weakening as the economies of the region's biggest customers in the U.S., Europe and Japan slow. The International Monetary Fund last week forecast the world's advanced economies will expand next year at the weakest pace since 1982, stifling growth in emerging nations and strengthening the case for an interest-rate cut in Thailand.

``I'm surprised they've lowered the growth range into the 3 percent area,'' said Julia Goh, an economist at CIMB Securities Sdn. in Kuala Lumpur. ``If they have the feeling that growth will be worse than forecast, they are likely to cut the rate next year.''

Thailand's SET Index of stocks fell 0.2 percent to 477.03, reversing an earlier gain of as much as 2.3 percent. The baht gained 0.1 percent to 34.24 against the dollar, paring an earlier advance of as much as 0.3 percent.

`Cut Could Happen Soon'

The Bank of Thailand may need to buoy the economy by cutting its interest rate from 3.75 percent before its next scheduled meeting in December, Alvin Pontoh, an economist at Capital Economics Ltd. in London, said before today's report. Governor Tarisa Watanagase said Oct. 12 that the rate remains supportive of growth.

``We now anticipate a much weaker profile for global growth and that should hit Thai exports pretty hard next year,'' Pontoh said. ``A rate cut could happen soon.'' He predicts borrowing costs will fall to 2.5 percent by the end of next year.

Thailand's economy may expand as little as 4.3 percent this year, the central bank's Duangmanee said. That follows 4.8 percent growth in 2007.

``Demand from the private sector is slowing as consumer confidence is falling,'' Duangmanee said. ``This is happening as political uncertainty drags on and the global economy is in crisis.''

Fraud, Graft

Thai Prime Minister Somchai Wongsawat said he'd respond to army Chief Anupong Paojinda's call for him to quit as protesters marched through Bangkok today demanding his resignation. Somchai faces growing pressure to step down or call a fresh election 10 months after his party won the first contest since the military ousted his brother-in-law Thaksin Shinawatra in 2006.

His People Power Party faces a ban for election fraud and an anti-graft body accused him of misconduct when he was serving as a bureaucrat nine years ago. Anupong said yesterday that Somchai should resign to take responsibility for deadly clashes between police and protesters on Oct. 7 that left two dead and more than 400 injured.

Exports, which make up 70 percent of gross domestic product, may expand as little as 7 percent in 2009, slowing from this year's predicted pace of as much as 23 percent, the central bank said.

Slowing shipments and diminishing demand for Thai assets amid political squabbling and legal challenges against the government may erase the current-account surplus. The central bank predicted a 2009 surplus of as wide as $3 billion next year, following a forecast of an excess of as much as $4 billion in 2008.

The inflation rate may fall to as low as 3 percent next year amid lower prices of oil, rice and rubber after averaging 6 percent to 6.5 percent this year, the central bank said.

To contact the reporters on this story: Rattaphol Onsanit in Bangkok at [email protected] Yuvejwattana in Bangkok at [email protected]

Last Updated: October 17, 2008 04:47 EDT "

Edited October 26, 2008 by ray23

[laidback]

Interesting story, while the PAD is melting down Thailand to such an extent that no freedom and no wealth is left (Except for their Chinese friends of course).

Thailand's economy will be virtually wiped out if 2% of the population will continue (with support of the highest people) to hold the country randsom. Therefore the comments are misplaced and thus absurd, Thailand will not escape a meltdown, the new tourist figures will speak for itself. The new investment figures will tell all of the story. Banks cannot even find customers for their credit nowadays that is even worse.

The political situation in this country is in an awful mess. The people in this government have no idea whats going on. They make ridiculous comments and never tell the truth. They flip flop on every issue they confront. If this country has another coup they will be the laughing stock of the world. They got rid of the last prime minister because of a cooking show. How sad. The real criminals are the ones in the PAD. They won't serve any time in prison. Then you have General who is just itching to be the next prime minister just by his recent actions. They can fool the Thai's but not the Foreigner.

This country has not felt the financial problems yet like other countries have, and to have some MP say that Thailand has escaped the melt down is absurd. Just wait, its coming and it will hit hard.

[auserb]

Interesting story, while the PAD is melting down Thailand to such an extent that no freedom and no wealth is left (Except for their Chinese friends of course).

Thailand's economy will be virtually wiped out if 2% of the population will continue (with support of the highest people) to hold the country randsom. Therefore the comments are misplaced and thus absurd, Thailand will not escape a meltdown, the new tourist figures will speak for itself. The new investment figures will tell all of the story. Banks cannot even find customers for their credit nowadays that is even worse.

The political situation in this country is in an awful mess. The people in this government have no idea whats going on. They make ridiculous comments and never tell the truth. They flip flop on every issue they confront. If this country has another coup they will be the laughing stock of the world. They got rid of the last prime minister because of a cooking show. How sad. The real criminals are the ones in the PAD. They won't serve any time in prison. Then you have General who is just itching to be the next prime minister just by his recent actions. They can fool the Thai's but not the Foreigner.

This country has not felt the financial problems yet like other countries have, and to have some MP say that Thailand has escaped the melt down is absurd. Just wait, its coming and it will hit hard.

well said, I agree with you 100% ...

[animatic]

Interesting story, while the PAD is melting down Thailand to such an extent that no freedom and no wealth is left (Except for their Chinese friends of course).

Thailand's economy will be virtually wiped out if 2% of the population will continue (with support of the highest people) to hold the country randsom. Therefore the comments are misplaced and thus absurd, Thailand will not escape a meltdown, the new tourist figures will speak for itself. The new investment figures will tell all of the story. Banks cannot even find customers for their credit nowadays that is even worse.

The political situation in this country is in an awful mess. The people in this government have no idea whats going on. They make ridiculous comments and never tell the truth. They flip flop on every issue they confront. If this country has another coup they will be the laughing stock of the world. They got rid of the last prime minister because of a cooking show. How sad. The real criminals are the ones in the PAD. They won't serve any time in prison. Then you have General who is just itching to be the next prime minister just by his recent actions. They can fool the Thai's but not the Foreigner.

This country has not felt the financial problems yet like other countries have, and to have some MP say that Thailand has escaped the melt down is absurd. Just wait, its coming and it will hit hard.

well said, I agree with you 100% ...

Well this is clearly coming from questionable sources.

2% is holding the country hostage, ya think? Betcha can't identify that 2%.

But this is the cabinet hand picked by Thaksin to further his interests,

not by the people to further their's.

Certainly the people in this government are utterly incompetent

and not placed in positions they understand,

so they have no clue what to say, let alone do.

Solution : Get rid of the bums for good, and put in the competent.

Thailand's economy will not be wiped out by PPP incompetence nor by PAD protests.

Oil's future price and Import Export into the global market will far out trip short term

impressions of idiots at the wheel or protestors in the streets.

Protestors in the streets HAPPENS EVERYWHERE... end of story.

PAD protests encompass not even a small fraction of Bangkok realestate.

They just get press.

As for the good General A. he has talked more good common sense

than most ANYONE getting press lately. Hands down, the most steadying voice this fall.

And has resisted MANY, MANY calls for army action. So you can't lay this bad trip on him.

This is PPP /Thaksin puppets making a hash of it so they can get a chance of snouts at the trough,

and a counter group seeking to PREVENT that from being a long term thing.

THIS is bringing the country low, but not down and not out.

And by the way your line They can fool the Thai's but not the Foreigner.

scans so 'Thai' it's like looking at a transliteration book.

Did you mean to say:

Then you have a General who is clearly just itching to be the next prime minister

just by his recent actions".

So actions make him itchy? What actions? He hasn't moved.

He simply said if he were responsible for ordering the bloodbath of his own civilian population

he would resign. Stating a MORAL position publicly.

You don't sound western at all by the way. Let alone an actual native Ausi...mate!

Why do you bother.... Missing prepositions and qualifiers will out..

One man has the power to heal Thailand's rift ,

and he is too arrogant and greedy for power and a return of his lost face

to think of the people.

Dr. T. you can end this...

Think of it like bankrupcy, you get back a % of your wealth. But don't get hammered forever.

Right now long term power struggle is a BAD idea.

Edited October 26, 2008 by animatic

[marshbags]

Bangkok Post, Spectrum, Sunday, October 26, 2008

THE CRISIS CONTINUES

The president of SCB Asset Management says the worst of the nightmare may be over, but the bad news keeps coming

Nina Suebsukcharoen

While the global financial tsunami has lost some of its strength thanks to the UK's aggressive bailout moves and continuing US efforts, all the bad news is not yet out of the way, says Dr Sethaput Suthiwart-narueput, president of SCB Asset Management.

In a courageous move, the UK committed 37 billion of taxpayers' money to bail out major banks and become their major shareholder, while Washington has followed suit by recapitalising nine banks with $125 billion in equity investments.

Although this shows that things are improving and did in fact trigger a positive market reaction, Sethaput observed that it is only a response to the dispelling of the apocalypse scenario.

"I don't think all the earnings downgrades and the extent of recession risk, how bad it's going to be, have been fully priced in," he said. "It's going to be a bumpy ride but at least the doomsday kind of scenario is limited, which I think is a very good thing."

Ref url for the complete article :- http://www.bangkokpost.com/261008_Spectrum...008_spec007.php

marshbags

[animatic]

Seems all these 'BIG, DEMOCRATIC countries' have just succeded

in partially nationalizing most of their big banks...

Hopefully to make a profit during their tenure for the people.

More likely for their inner circles.