Economic bubbles and miracles

[parryhandy]

The budget deficit is roughly the same as Germany's. And Thailand does not have the heavy burden of social security and pensions like the European countries  

so where does all the money go then?they have the same budget defecit as germany without giving a toss and spending nothing on the poor, sick and elderly.

[Butterfly]

i beleive that over 80 percent of the population of thailand arent even invovled in the economy.the real economy has no bearing on their lives whatsover.the thing which saddens me , because i have a thai daughter is the basic lack of opportunity for the majority of thais.the real economy is owned by a few people in which competiton is virtually outlawed. theres is no wealth creation or disribution of wealth.how wealthy do certain familys have to get before they start giving back something to the people they supposedly represent.

You are absolutely correct.

[Vorranuch]

I am interested to know the background of those who think doomsday is for tomorrow. Were you here before the 1997/1998 crisis and what experience do you have of developing countries?

If you expect Thailand to be like Switzerland I understand you are a little worried!  ::

Also interested to know how you define a crisis? A GDP at minus 10% like in 1998 is no doubt an economic crisis.

But the burst of stock market or property bubbles do not constitute major economic crisis. They happen all the time in every country, without affecting too much the overall economy.

Combined with other factors this can lead to a broader crisis. Today I don’t see these other factors, no potential chain reaction.

[Butterfly]

I am interested to know the background of those who think doomsday is for tomorrow. Were you here before the 1997/1998 crisis and what experience do you have of developing countries?

If you expect Thailand to be like Switzerland I understand you are a little worried!  ::

Also interested to know how you define a crisis? A GDP at minus 10% like in 1998 is no doubt an economic crisis.

But the burst of stock market or property bubbles do not constitute major economic crisis. They happen all the time in every country, without affecting too much the overall economy.

Combined with other factors this can lead to a broader crisis. Today I don’t see these other factors, no potential chain reaction.

Who said it was tomorrow ? we are just saying that there are similar "patterns" between now and pre-1997

Also, where have you been ? stock market crash DOES have an impact on real economy. Have you ever seen a REAL crash ?

All large stock market crashes have been followed by long years of recession/depression

We just had one in March 2000

Where do you think money grows ? on tree ? when you lose your lifesaving or can't make a mortgage payment because your holdings can't be liquidated, how do you think this has an impact on the REAL economy ? the stock market is not a "mirror" of the economy, but a "leading" indicator. As much as long term interest rates (reverse yield, positive yield, U shapped yield) are "indicators" of the economy to come and have an impact on the real economy through monetary policies, stock markets have now ALMOST the same role. Also, a "bear" market is not a crash and this is not 1940

[plachon]

Vorranuch, please at least read Butterfly and my posts. We never once said it would come "tomorrow" and never once made any comparisons with Switzerland or other European countries. If any comparisons are to be made it is with certain S. American economies. These crashes do not happen in a vaccuum and the West is equally to blame for them (esp. the uncontrolled free flow of vast sums of capital across continents in seconds and the faliure of Bretton Woods institutions to actually help "developing nations"), but Thailand set itself up as a sitting duck for the last one, and it's doing it again. Go and read some of the references I've given in earlier posts from beginning to end, if you want to get some background.

The old cracks about short memories and ostriches are looking more accurate as this line goes on, eh 'Fly?

[Vorranuch]

If I understand you well: one day there will be a new crisis, we don't know when and how but there is one coming "in the future". What is the point?

We all agree that the economy is not linear; every country goes trough cycles of growth and crisis, what's new?

If you cannot give and indicative time frame (1 year, 2 years, 5 years ?) this debate is useless.

My opinion is there will not be a major crisis in Thailand at least within the next 5 years. I would be comfortable investing in Thailand (not the stocks market) for that duration.

What is your guess?

(Note : If nothing happens in the next 5 years Plachon and Butterfly owe me a lunch in the 5* hotel of my choice !  :cool: )

[mrentoul]

The old cracks about short memories and ostriches are looking more accurate as this line goes on, eh 'Fly?

Hey, you can't have things your own way all the time. I find your posts unconvincing. You and Butterfly seem to be waging this campaign alone.

You seem unable to settle on what a crisis is and how soon it's likely to come. Simply sticking a few links on the board to background articles doesn't make your case.

Who said it was tomorrow ? we are just saying that there are similar "patterns" between now and pre-1997

What patterns? Let me guess: a sharemarket and property market that are doing well. Well, as more than a few posters have told you, a booming share/property market does not a crisis make.

But the burst of stock market or property bubbles do not constitute major economic crisis. They happen all the time in every country, without affecting too much the overall economy.

Combined with other factors this can lead to a broader crisis. Today I don’t see these other factors, no potential chain reaction.

Where's the explosion in credit you were boasting about, Butterfly? People driving around in cars they cannot afford does not a crisis make.

waste water treatment projects built at mega millions of dollars sitting idle around the country

Maintenance bills (as you put it, plachon) for any number of big-asset projects sitting idle around the country does not a crisis make.

I suspect you guys have no confidence in the people running the economy, probably because they are Thais. I suspect this is a political grievance, not an economic argument.

If you cannot give and indicative time frame (1 year, 2 years, 5 years ?) this debate is useless.

Well put. Next?

[plachon]

Maybe it's my imagination, but I think a check back would confirm it is not, that I have at least twice given a rough time frame of 2 - 5 years for the next Big One. Like earthquakes, it's impossible to be anymore precise, but the stresses and strains in the strata, are starting to give off warning signals, and it's down to each of us to interpret them as you will. Some may not see them at all, others may discount them as "normal", & others may feel a bit like deja vu. However, like a quake there's nothing to stop it happening tomorrow or the next day, but the probability is v. low. However, all things being equal (which they rarely are granted - who could have predicted the SARS impacts 8 months ago?), then i would say that the Red Alert zone will start in about a couple of years time. Can't be any more specific than that, sorry Voranuch. I'll happily treat you to a slap-up meal in 5 years time, if there's been no crash, but I doubt v. much it will be in Thailand. Will you reciprocate if the shoe's on the other foot?? Yes, it has everything to do with politics, Mrentoul, but nothing to do with any specific nationality. Greed is universal, but checks and balances on this base instinct vary from country to country.

[Butterfly]

If I understand you well: one day there will be a new crisis, we don't know when and how but there is one coming "in the future". What is the point?

We all agree that the economy is not linear; every country goes trough cycles of growth and crisis, what's new?

If you cannot give and indicative time frame (1 year, 2 years, 5 years ?) this debate is useless.

My opinion is there will not be a major crisis in Thailand at least within the next 5 years. I would be comfortable investing in Thailand (not the stocks market) for that duration.

What is your guess?

(Note : If nothing happens in the next 5 years Plachon and Butterfly owe me a lunch in the 5* hotel of my choice !  :cool: )

Cute.

Again you did not read any of my posts. Business cycle is natural, crashes are not. What we are saying is that Thailand is in a "bubble" cycle, nothing else. What is a "bubble" you ask ? it's when the "growth" in certain sectors outpace the "reality" of certain "fundamental" parameters. Would you find it "normal" if secretaries in your home country would buy 100,000 Euros car and 1 million Euros houses ? where do you think that money comes from ? trees again ?

[Butterfly]

Hey, you can't have things your own way all the time. I find your posts unconvincing. You and Butterfly seem to be waging this campaign alone.

The greater fool theory.

I have a bridge to sell ? are you a buyer ?

Actually, it's people like you who re-inforce my assumptions of things to come will not be pretty for long.

At least you are not making "financial" recommendations for a corporation and your predictions are only limited to your personal experience as a journalist in a local Newspaper. That's a relief.

[plachon]

I think the point is Butterfly, that he (Vorannuch) doesn't really understand what we've been attempting to put across, 'cos he doesn't take the time to read our posts, let alone read between the lines. If you want a nice formula proving (or disproving in the case of BoT) the coming crash, then I'm afraid you won't get it. The "numbers" and "facts" in this economy are very suspect, to say the least, and you would be a (greater) fool to believe them. And I concur on the comment about eventual outcomes being reinforced by current attitudes to the seismic rumblings around us.

[Butterfly]

I think the point is Butterfly, that he (Vorannuch) doesn't really understand what we've been attempting to put across, 'cos he doesn't take the time to read our posts, let alone read between the lines. If you want a nice formula proving (or disproving in the case of BoT) the coming crash, then I'm afraid you won't get it. The "numbers" and "facts" in this economy are very suspect, to say the least, and you would be a (greater) fool to believe them. And I concur on the comment about eventual outcomes being reinforced by current attitudes to the seismic rumblings around us.

Journalists are always the last to know about anything so I guess we have here a good measure how "naive" and "uniformed" people can be. You will know when to get out of Thailand when those characters will keep saying "everything is fine, it's just temporary adjustment" when the bubble burst. Gotta love them.

[mrentoul]

The "numbers" and "facts" in this economy are very suspect, to say the least, and you would be a (greater) fool to believe them.

Butterfly, for one, doesn't mind investing here, despite the ''suspect numbers''. What does that tell you?

[Butterfly]

The "numbers" and "facts" in this economy are very suspect, to say the least, and you would be a (greater) fool to believe them.

Butterfly, for one, doesn't mind investing here, despite the ''suspect numbers''. What does that tell you?

Read my posts again... if you can read

[mrentoul]

I'm withdrawing from this conversation. Butterfly, you're getting close the point again where your posts will be axed.

On the subject of reading, I suggest you take a look at the posting rules and consider whether yours meet the criteria, or are likely to result in parts of this debate being knocked out.

[Butterfly]

I'm withdrawing from this conversation. Butterfly, you're getting close the point again where your posts will be axed.

On the subject of reading, I suggest you take a look at the posting rules and consider whether yours meet the criteria, or are likely to result in parts of this debate being knocked out.

you keep baiting me with your "replies"

Read my posts and make an intelligent reply for once. And stop whinning to the mods like a 2 year old

[plachon]

Pity it's stuttered to a halt again, just when it was starting to get interesting. Guess we're all agreed then: There's  nothing to worry about, things are going swimmingly with the Thai economy and there's absolutely no chance of an economic crash sullying the pristine waters we're sailing on, coz Captain Tox is in control of this Ship of...............

But stop throwing your toys about, ummmm, lads!

[en184]

NO STORM IN SITE CAPTAIN.  Calm waters as far as the eye can see.

The SET has done well.  While valuations have risen somewhat, and made alot of happy investors, valuations on the thai stock market are still low compared to the USA.

Plus, with the thai bhat appreciation, this adds extra $ return to thai investments.

[davidm]

For what it's worth, I lived in Bangkok through the previous boom and bust, and history is in the process of repeating itself. The key problems are a complete lack of transparency in official circles and the refusal to acknowledge or publish bad news unless it's so widely known that a cover up is impossible.

There are no accurate figures for most key economic indicators. If you don't believe me, visit a major government agency, such as the DEP and ask for the latest export figures for, say, automotive parts.

It wouldn't make a whole lot of difference if you did obtain figures as they are ususally made up. I've even contributed to this malaise in the past by making up figures because no one in a responsible position would give them to me. Notice how Thaksin announced the GDP growth figures very early this year, and after a stifled murmur of criticism, lo and behold his "forecast" is spot on.

The bottom line is another crash is on its way, but there's probably plenty of life left in this latest pump and dump as the feeding frenzy has only just begun.

[Butterfly]

There are no accurate figures for most key economic indicators. If you don't believe me, visit a major government agency, such as the DEP and ask for the latest export figures for, say, automotive parts.

It wouldn't make a whole lot of difference if you did obtain figures as they are ususally made up. I've even contributed to this malaise in the past by making up figures because no one in a responsible position would give them to me. Notice how Thaksin announced the GDP growth figures very early this year, and after a stifled murmur of criticism, lo and behold his "forecast" is spot on.

yeah, I love that part about GDP estimates. Since there are no real official agencies to give such estimates, the government is free to give any stupid numbers for the public to swallow. Of course, brokers and international institutions might have internal GDP figures they estimate, but the quality of data is such an issue in Thailand, that guessing GDP estimate is more a talent and a sport than science and statistics.

[parryhandy]

if me and my friends were the powerful wealthy rulers of a country and we had invested money in the ruthless pursuit of power in that country the only thing on the agenda is getting our return on the investment.so how do we do this ?

we wack up the budget which is spent on industries we own and loan people easy money knowing full well that money will come back to us "clean". everything else is just smoke and mirrors.if the economy goes tits up so what we are still rich and furthermore can have the pick of anything decent left in  the aftermath that we dont already own.win win situation.

as for foreigners you have your uses but this is our playground.

over simplistic but you get my gist.

[KenUdon]

if me and my friends were the powerful wealthy rulers of a country and we had invested money in the ruthless pursuit of power in that country the only thing on the agenda is getting our return on the investment.so how do we do this ?

we wack up the budget which is spent on industries we own and loan people easy money knowing full well that money will come back to us "clean". everything else is just smoke and mirrors.if the economy goes tits up so what we are still rich and furthermore can have the pick of anything decent left in  the aftermath that we dont already own.win win situation.

as for foreigners you have your uses but this is our playground.

over simplistic but you get my gist

Says it all I think!

[Butterfly]

if me and my friends were the powerful wealthy rulers of a country and we had invested money in the ruthless pursuit of power in that country the only thing on the agenda is getting our return on the investment.so how do we do this ?

we wack up the budget which is spent on industries we own and loan people easy money knowing full well that money will come back to us "clean". everything else is just smoke and mirrors.if the economy goes tits up so what we are still rich and furthermore can have the pick of anything decent left in  the aftermath that we dont already own.win win situation.

as for foreigners you have your uses but this is our playground.

over simplistic but you get my gist.

I don't agree. This might be good for the rich and the farangs but the level of humiliation for the Thais will be even greater and you can be sure as shit that they will blame it all on us again. That will just feed the anti-farang feelings that the Thais have been hidding since the IMF crisis. Another lunatic like Toxin could seize power and kick us all for good then.

[mowlem]

The Far East Economic Review wrote about Thailand a couple of weeks ago, and is worried.

In large part, that's because Thailand's heady expansion hasn't improved the fortunes of its beleaguered banks, where nonperforming-loan levels remain high six years after Asia's 1997 financial crisis. That's raising new concerns about the durability of Thailand's rebound, which has not been accompanied by corresponding increases in domestic or foreign investment.

Also...

There are also fresh concerns about the quality of recent loans made by state-owned banks, which are now often lending on government orders rather than independent credit criteria, analysts say. Many of those loans have gone to finance the government's populist spending programmes, including village development and helping out indebted farmers. But the money may do the opposite of what was intended: Analysts worry that most of the cash has gone toward one-off consumer purchases rather than self-sustaining investment projects, and that this could in future add to the state's bad-loan pile.

Not good...not good...

[parryhandy]

if me and my friends were the powerful wealthy rulers of a country and we had invested money in the ruthless pursuit of power in that country the only thing on the agenda is getting our return on the investment.so how do we do this ?

we wack up the budget which is spent on industries we own and loan people easy money knowing full well that money will come back to us "clean". everything else is just smoke and mirrors.if the economy goes tits up so what we are still rich and furthermore can have the pick of anything decent left in  the aftermath that we dont already own.win win situation.

as for foreigners you have your uses but this is our playground.

over simplistic but you get my gist.

I don't agree. This might be good for the rich and the farangs but the level of humiliation for the Thais will be even greater and you can be sure as shit that they will blame it all on us again. That will just feed the anti-farang feelings that the Thais have been hidding since the IMF crisis. Another lunatic like Toxin could seize power and kick us all for good then.

agree or disagree this is what is going down.the 1997 crash occured because like or not they were playing with the big boys.someone posted a link up the other day in another post to an article about the crash regarding the west ie soros. enforcing why the thais blame soros etc.. but if you read the second page of that article deals were offered to minimalise and stop soros and other people invovled attacking the baht.but the thai govn try to play hardball and lost.i just think everything they do is all tailored to fit in with their plan of lets get as rich as possible., rather than sorting systems out first and getting  rich as a nation rather than just certain families.

as for the face thing well thats just stupid."pride comes before a fall" as the saying goes.we all make mistakes but if you continue to blame others and refuse to admit that you are even partly to blame then nothing has been learnt.

also were is the humiliation about poverty and human rights.

even now thaskin and many thais feel the imf restrictions and guidelines were terrible and wrong and too harsh etc..well they couldnt of been that bad could they or they wouldnt of paid the loan off so quick.the imf or the west get no credit for that.

agree though they will blame it on farangs.

[plachon]

Mr("why aren't I reading about it")entoul's  gone awful quiet......................................, but his Editor did give a good letter prime space yesterday. Nice one Amy!

[Spellbound]

Crime `dispels govt claims on economy'

Victims say no point in reporting muggings

Post reporters    ==   Snippet from Bangkok Post 17sept 03

http://www.bangkokpost.com/News/17Sep2003_news10.html

The rise in crime in broad daylight indicates the economy is not as healthy as the government claims, says opposition chief whip Jurin Laksanavisit.

He said yesterday that offences had increased by 40% since the government took office two-and-a-half years ago. Much of it was now occurring during the day, he added.

The opposition would file a motion in the House of Representatives this week demanding the government explain why the fight against crime was failing, Mr Jurin said.

The government spoke only half-truths when talking of vast economic growth.

``It is not a `quality' growth. It happens simply because people borrow heavily and use the money largely for things that may not be necessities, but luxuries,'' he said.

Heavy borrowing had landed every Thai household an average 87,000-baht debt, while credit card debt was also growing, he said.

A survey by a television station found that 80 percent of respondents did not think their wallets had become fatter in the past nine months, Mr Jurin said.

Democrat list MP Sansern Samalapa urged the government to review its measures to stimulate spending. Credit card debt stood at 63 billion baht in the second quarter of this year.

_

Toxin will blame it on the west, when it all goes wrong

(The kettle's on, it take a while for the heat to take effect but when it BOILS OVER every one gets hurt )

The BRAIN HAS GONE

[parryhandy]

Crime `dispels govt claims on economy'

Victims say no point in reporting muggings

Post reporters    ==   Snippet from Bangkok Post 17sept 03

http://www.bangkokpost.com/News/17Sep2003_news10.html

The rise in crime in broad daylight indicates the economy is not as healthy as the government claims, says opposition chief whip Jurin Laksanavisit.

He said yesterday that offences had increased by 40% since the government took office two-and-a-half years ago. Much of it was now occurring during the day, he added.

The opposition would file a motion in the House of Representatives this week demanding the government explain why the fight against crime was failing, Mr Jurin said.

The government spoke only half-truths when talking of vast economic growth.

``It is not a `quality' growth. It happens simply because people borrow heavily and use the money largely for things that may not be necessities, but luxuries,'' he said.

Heavy borrowing had landed every Thai household an average 87,000-baht debt, while credit card debt was also growing, he said.

A survey by a television station found that 80 percent of respondents did not think their wallets had become fatter in the past nine months, Mr Jurin said.

Democrat list MP Sansern Samalapa urged the government to review its measures to stimulate spending. Credit card debt stood at 63 billion baht in the second quarter of this year.

_

Toxin will blame it on the west, when it all goes wrong

(The kettle's on, it take a while for the heat to take effect but when it BOILS OVER every one gets hurt )

The BRAIN HAS GONE

taskins clampdowns will also be causing this . no drugs , no vice , no pirate goods etc.(less "low class foreigners in the future) i would say a massive percent of the population is invovled somewhere in one of these activities. you cant just stop these things without creating jobs for these people to fill. remember there is NO welfare.

thailand has rapidly developed over the last 2 decades but a large proportion of the population has not been included in this. the west realised that when a country developes and economies grow people get left behind. hence social welfare.

you can clampdown all you like but the root problems will not go away , people will just move to another avenue thats not being as closely watched. the majority do these illegal activities to survive.

[parryhandy]

Bangkok governor Samak Sundaravej, not at the seminar, said the media was focusing too much on robberies and unfairly blaming authorities for not protecting people. Robberies could happen anytime and were normal in cities in every country, he said. Public safety in Bangkok was still satisfactory as there had been only 27 robberies this year, according to police records, he said.

police obviously doing a slendid job. only 27 robberies in a city the size of bangkok in 9 months. must be all robocops.

why cant they make stats up with just a little credibility ? for christs sake.

[Butterfly]

Got a few interesting news from my broker. Apparently some local "investors" have been trying to play casinos with the SET and have manipulated a number stocks that have increased by as much as 90% in less than a few weeks. The SET average PE went from 5 to  10 in just a few months. Still cheap, but if the growth does not follow, it will be bad news for everybody. Time to run already ? maybe not yet.

Also, I have found the city to be less safe than before. Even during the crisis, things were not that bad in terms of security. Maybe the economy is not doing so great for everyone.