Thai Economic Crash

[Naam]

Boum. Once again Naam spoke too fast. Do your homework. The BOT, right now, is buying USD.

i refuse to argue with people who are not able to differentiate between "buying US-debt" and "buying dollars". the BOT is SPENDING dollars to buy US-debt!

moreover, buying or spending dollars was used in context with the "strength of THB, alleged freefall of THB and [last not least] making vast amounts of money for its [the BOT's] investors.

BURP... next!

[Lasic1]

Hard to evaluate when you're back here in the states. We're not out of the woods yet here either. Earnings for most companies are still poor and credit markets are still locked down. I'll know better after I visit Thailand in May. My G/F works in BKK and tells me economic signs are not good. However I don't know the specifics. My guess unless tourism picks up and they spend a lot of money, a lack of profits and currency revenues will lead to lay-offs and decreased purchasing power for the consumers. Several other factors like the over-built housing market could also contribute. How bad this will get is anybody's guess. Once one of these Tiger economies falls, several others will go down like dominoes. I'm thinking of Malaysia leading the way like they did during the IMF crisis. Indonesia is another likely suspect to collapse.

[Naam]

apologies to those who are reading impaired. unfortunately no youtube clip available

Thailand by the Numbers

13 May 2009

Stabilisation and stimulus

At face value the theme in the Thai dataflow remains one of stabilisation in the manufacturing and export

sectors. However, a further theme is developing in regards to policy stimulus. Bank of Thailand policy rate

reductions are pulling down the level of interest rates facing retail borrowers and lenders. Meanwhile, more

spectacularly, a combination of lower revenue and higher spending suggests the government’s stimulus efforts

may be providing meaningful lift for the economy.

Further signs of stabilising activity

Export volumes (seasonally adjusted) fell back in March to their lowest level since December 2005, reversing

the gains since November (page 10-11). Manufacturing production volume, on the other hand rose 2.6% on the

month seasonally adjusted after a 1.9% rise in February (page 12-13). In short the manufacturing and export

sectors of the economy stabilised during Q1 after precipitous falls in Q4 and Q3 2008. Unfortunately investors

should still expect a sharp contraction in Q1 2009 GDP, both on the quarter and year because the level at

which stabilisation occurred was below the average level of activity in Q4. However, the stage is being set for

a better outcome in Q2 2009 and in H2 2009.

We believe that the economy will see positive growth in the second half of 2009 followed by patchy growth in

2010. This growth turnaround will be in the context of significant excess capacity and so will have to be driven

primarily by the domestic and global inventory cycle along with domestic and global policy stimulus. We do

not expect the recovery to be characterised by high levels of corporate confidence or enthusiasm for investing

in new capacity. The latest data is consistent with these themes (see pages 32 and 33 for more detail on our

forecast).

Stimulus and markets

Regional and Thai equity markets have already rallied on evidence of a turning point economic activity and the

considerable liquidity made available by central banks globally. Consistent with this net foreign buying of Thai

equities turned positive in March and more so in April (page 29).

However, as noted above, we also expect domestic policy setting to play a role. With the bank of Thailand

continuing to cut policy rates (we look for rates to fall from 1.25% to 1% or a little below) and resisting

currency appreciation domestic liquidity conditions are easing. Indeed, the average commercial bank minimum

lending rate was 6.25% in April; it’s lowest since September 2005 (page 27).

Moreover, sharp declines in revenue along with rapid increases in expenditure mean the government is putting

more money to work in the economy. Gross revenue was down 10% on the year in March while expenditure

figures from the cash budget accounts showed a 41% rise in outlays on the year in Q1 2009. The government’s

cash budget deficit in Q1 2009 was, at 80bn (1%of GDP) was more than twice that recorded in Q1 2008 and

close to twice the deficit recorded Q1 2007.

Consistent with this, the level of government debt outstanding rose 160bn baht in January and February

compared to an increase of 100bn in the year to December 2008 (page 24 and 25). The government bond

market has largely taken the increased issuance in its stride with 10 year government bonds yielding 3.7% at

the time of writing, compared to an average of 3.6% year to date and 4.6% in 2008.

With the near term risks of crowding out from government borrowing limited, the benefits of increased

domestic liquidity and fiscal stimulus will add to the global dynamics supporting risk assets at present.

Moreover, we anticipate no change in direction in terms of the policy effort globally or in Thailand during the

remainder of this year. With this in mind, a just published note by Thai banks analyst Butsakon Khoosuwan

argues that Thailand is one of the cheapest markets in Asia and has been an underperformer since its October

lows. As such Thai equities could benefit if investors rotate out of more expensive North Asia markets towards

ASEAN. For more detail on how to play this view please see Butsakon’s note on Thai banks, dated 11 May

2009.

Gross Domestic Product

What the numbers say: Real GDP growth slowed much more than expected to -4.3% on the year in Q4 2008

(consensus -2.8%). On the quarter, the economy contracted 6.1% - a sharper contraction than in any single quarter

during the Asian crisis. The decline in activity was primarily export related, but the impact was felt across the

sectors of the economy.

What they mean: Part of the collapse in growth will be a function of the political disruption that led to the

closure of Bangkok’s airports from 25 November to 4 December. However, much of the slowdown is merely a

function of the deterioration in global demand and the knock on effects of the financial crisis on Thailand’s

domestic economy.

12-month outlook: We now expect -5% real GDP growth for 2009 as a whole. Positive quarterly growth should

return in H2 2009 due to the inventory cycle as well as global and local policy stimulus.

Private consumption expenditure

What the numbers say: Thai real private consumption stagnated in Q4. On the year consumption growth

moderated to 2.2% from 2.7%. Nominal consumption growth slowed much more sharply than real consumption,

to 7.2% from 11.5%, suggesting that real consumption was supported by sharply lower inflation. In early 2009,

growth in the Bank of Thailand’s Private Consumption Indicator (PCI) fell sharply into negative territory.

What they mean: Thai consumers’ real incomes were adversely impact by higher food and energy prices over the

middle of 2008. This effect appears to be unwinding with lower prices, but the impact on consumer expenditure

of lower confidence in the economy appears to be taking over.

12-month outlook: Consumer confidence and incomes are at risk from higher unemployment. The support from

solid farm income growth may also wane. We expect negative real consumption growth in 2009.

Investment expenditure

What the numbers say: Real investment expenditure growth slowed to -3.3% yoy in Q4 from 0.6% in Q3. The

decline in equipment investment growth was driven by the private sector, while the decline in construction

investment growth was a function of a weaker public sector. The smoothed average growth rate of the Bank of

Thailand’s Private Investment Indicator is deeply negative, but value of approvals from the Board of Investment

has jumped sharply from a low level.

What they mean: The private sector is reducing investment activities quickly, especially in the manufacturing

sector where there has been a sharp fall in export demand and large rise in excess capacity.

12-month outlook: Government policy should imply a pickup in construction investment, though the strength

may be limited before 2010. Private sector investment will almost certainly decline, driven by the considerable

excess capacity implied by the 19% decline in manufacturing production from its high through to March 2009.

We look for a marked, 10% plus, decline in whole economy fixed investment in 2009.

Government consumption expenditure

What the numbers say: Government consumption expenditure fell in real terms in Q4 2007, was flat in H1 2008

but expanded sharply in H2 2008. The rapid expansion in expenditure appears to have continued in Q1.

What they mean: The winding down of the Military Junta, the political difficulties surrounding the PPP

government, and the focus of that government on tax breaks and handouts rather than spending, has adversely

effected government consumption. Latest data has been much more positive in spite of political disruption in Q4.

12-month outlook: Government expenditure is rising rapidly and the new government has every interest in

ensuring lively disbursement into H2 2009. The success of large scare infrastructure plans for 2010 and beyond

remains an open question.

Trade

What the numbers say: After sequential improvement in the three months to February, export volumes fell back

in March to a new low. Nominal USD export growth was -22.7% in March after growing 19% in September and

44% in July. Consistent with lower investment and an effort to reduce inventory, import growth slumped to -

35.1% in March, pushing the trade and current account balance to a very robust surplus in Q1.

What they mean: The slowdown in export growth is delivering a substantial shock to the Thai economy.

12-month outlook: We expect export volume growth to be double digit negative on average in 2009. The rise in

excess capacity, decline in production activity in the manufacturing sector and slower consumption should ensure

a collapse in import growth such that Thailand runs a current account surplus in 2009.

Industrial sector output

What the numbers say: Manufacturing output stabilisation continued in March with a monthly rise in production

of 2.5%. This followed declines of 7.7% in November and a further 12% in December but a rise of 1.9% in

February. The decline in activity in the six months to December surpassed the decline in production seen in 18

months during the Asian crisis and has yet to be meaningfully reversed. Inventories actually rose in March.

What they mean: The precipitous decline in November and December means that even with manufacturing

production stabilising in Q1 2009 it will subtract 3-4ppts from GDP in that quarter, similar to the drag in Q4. The

sequential outlook for Q2 is much better, however, following rises in output in February and March.

12-month outlook: Unless there is a very sudden turn-around, manufacturing production is going to be lower in

2009 than in 2008. Importantly for markets, we expect the rate of deterioration is to lessen during 2009 as

inventories are brought under control. At present inventory to sales ratios are still elevated, however.

Construction sector output

What the numbers say: The construction sector was recessionary in 2008. Private sector construction contracted

over 10% yoy in Q4 2008. Cement consumption growth could be supported by public investment, politics willing,

but was still negative in March.

What they mean: More public construction investment, if the government is able to act on its intentions, should

help support the sector. Unfortunately, private sector demand may get worse in coming quarters.

12-month outlook: We do not expect a strong dynamic from the construction sector in aggregate in 2009.

Government policy will be key for 2010 and here the precedent in terms of Q1 spending growth is hopeful.

Service sector output

What the numbers say: The service sector contracted sharply in Q4 2008. The particularly weak outcome in the

transportation and hotel sectors suggest the airport shutdown and its impact on tourism and trade was an

important driver of the weakness. However, the decline in transportation related to surface shipping as well, so the

weakness cannot entirely be blamed on political turbulence. Retail and media expenditure remained subdued in

March, but growth in tourist arrivals posted one of the least negative outcomes in recent months.

What they mean: The high frequency data suggests weakness in service sector activity will be ongoing.

12-month outlook: It is increasingly difficult to see an expansion in the service sector on average this year.

Up country activity (agriculture)

What the numbers say: Agriculture is a small part of the economy (11% of GDP in 2007). But while growth has

been strong, it is now slowing. In nominal terms the BoT calculation of farm income was slightly negative in

March, down from 70% in July. Nominal agricultural value added was still up on the year in Q4 2008, but this is

backward looking data.

What they mean: Higher agricultural prices have been driving farm incomes up. The spike in agricultural prices

that is now unwinding means that during 2009, year over year income growth will (temporarily) turn negative.

12-month outlook: Agricultural prices (including rice) have fallen. The decline had been arrested in early 2009,

but rice prices are again slipping. It remains to be seen if the transfer of income from agri-consuming to agriproducing

sector during 2008 is entirely reversed by lower rice prices.

Labor market

What the numbers say: The unemployment rate has begun to adjust higher. In February the unemployment rate

jumped to 1.9% from 1.4% in the closing months of 2008, while employment growth has shown signs of slowing

in the last few months. The rise in agricultural employment that was offsetting the decline in manufacturing

employment is petering out. More positively (for workers), real wages are being flatter by falling prices.

What they mean: Uncertain measurement of the rural sector labour force means the unemployment numbers

usually cannot be trusted. The slack in the economy will be meaningfully understated by the official

unemployment rate data.

12-month outlook: Real wage growth should improve as consumer price inflation declines. As real economic

growth slows, however, the labour market should quickly shed any tightness it exhibited in early 2008. Indeed,

our calculations suggest a rise in the unemployment rate to 4% may be on the cards in the coming quarters.

Inflation

What the numbers say: Inflation rose to 9.2% in July, a decade high. But fell to -1% in April on lower food

prices, gasoline prices and administered price reductions. The official measure of core inflation was 1.0% in

March, within the Bank of Thailand’s proposed new target range of 0.5-3.0%. The official core inflation measure

includes processed food; excluding this and the administered price changes to water and public transport, inflation

was sub 1% in March. Imported price inflation excluding fuel and lubricant is positive and accelerating however.

What they mean: Thailand now has negative inflation. This is not broad based deflation; it is a function of

commodity price declines. However, the excess capacity being generated globally and in Thailand means that the

potential for deflation in Thailand cannot be idly dismissed. This said, the weaker currency is supporting

accelerating imported goods price inflation.

12-month outlook: Lower commodity prices suggest much softer CPI inflation in 2009 than in 2008; we expect

CPI inflation to average below zero in 2009. Medium term inflation risks are rapidly diminishing given real

growth prospects and weaker commodity prices.

Money & Debt

What the numbers say: Broad money growth and deposit growth slowed in March. Credit growth to the private

sector remains lively in nominal terms but is slowing – particularly to the business sector. The Bank of Thailand’s

efforts to sterilise FX intervention has picked up again.

What they mean: The acceleration in credit growth was a function of loose monetary conditions and an increased

demand for working capital loans on the part of businesses. The demand for working capital is probably partly a

function of commodity prices, which is now reversing.

12-month outlook: Credit growth should ease with commodity price inflation and reduced investment intentions

as growth prospects dim.

Balance of Payments

What the numbers say: The current account surplus soared to is highest ever dollar level in Q1 2009. The scale of

the surplus has already begun to be reduced in March as the import-export gap narrowed but remains substantial.

The rise in the current account was a function of sharp declines in imports- disproportionately driven by lower

energy and raw material imports. Capital goods imports are also falling but FDI inflows, while at the low end of

recent years, are still positive.

What they mean: Thailand’s external accounts are being buffeted by large swings in trade and portfolio flows.

The BoT’s efforts to smooth the flows are visible in the monetary data (above).

12-month outlook: Currency weakness suggests the portfolio flows left as quickly as they came on news of

higher inflation and subsequently because of global de-leveraging/de-risking. Rising reserves suggest the balance

of flows actually favoured the baht in the tail end of 2008, however. The positive swing in the current account

will favour also favour the baht in early 2009.

Household and corporate finances

What the numbers say: Corporates have been de-leveraging over the last decade. Households have been

leveraging up.

What they mean: Corporates have the lowest debt burden (assuming earnings are broadly proportional to GDP)

since 1990. Households’ debt burden has risen but does not appear excessive.

12-month outlook: High frequency credit data suggest the end to corporate de-leveraging will prove temporary.

But ongoing household leveraging is possible. Low policy rates in nominal and real terms could help this trend.

Unfortunately, the more powerful force may be slower economic growth and weak confidence levels presaging

ongoing retrenchment in overall credit to GDP.

Fiscal policy

What the numbers say: The public and central government debt burden is low but also rising quickly. 2008’s

fiscal policy tightness is being reversed quickly as expenditure rises quickly and revenue falls with weak income

growth in the economy.

What they mean: The last government’s efforts to distribute fiscal stimulus to the voters did not bear a great deal

of fruit. Public sector efforts to increase expenditure in late 2008 and Q1 2009 appear to be bearing fruit.

12-month outlook: We expect the fiscal deficit to widen in into 2009 and 2010. The new government is

promising fiscal stimulus of 300bn baht or 3% of GDP, 180bn of which was defined in January with 2010

infrastructure spending spelt out in more detail in March. We expect the stimulus effect to be spread out into 2010

but for there to be a positive impulse to the economy during 2009 (politics permitting). For more detail please

refer to Southeast Asian Focus: Visiting Notes; Ed Teather; 26 February 2009.

Monetary policy

What the numbers say: The Bank of Thailand targets inflation within a range of 0.0% to 3.5%. This will change

to a target range of 0.5-3.0% subject to cabinet approval of a BoT proposal. Pursuing this target, the BoT more

than reversed the tightening of policy in the summer of 2008 with a 100bp policy rate cut in December 2008, a

75bp cut in January 2009 and a 50bp cut in February. Policy rates were cut 25bps to 1.25% in April.

What they mean: Given the sharp decline in inflation, inflation expectations and growth the BoT every reason to

keep reducing policy rates.

12-month outlook: We expect reduced inflation risks and slower growth than expected by the authorities will lead

to an easing of monetary policy. We look for 25bps of policy rate cuts in coming months, taking policy rates from

the current 1.25% to 1.00%. Rates could fall further after that.

Interest Rates

What the numbers say: The yield curve steepened as inflation accelerated, but has since flattened with the decline

in growth prospects and the price of energy and other commodities. It is now steepening again as short term

policy rates are reduced.

What they mean: Financial market inflation concerns have declined. Policy rate expectations are no longer

pricing a great deal in terms of rate cuts. Government bonds have probably been benefiting from the risk aversion

trend away from equities, but supply concerns are now having an impact.

12-month outlook: Fixed income markets should continue to look for more aggressive policy rate cuts. Long term

government bond yields will depend on slowing inflation, greater fiscal expenditure and the level of risk aversion.

Exchange Rate

What the numbers say: The nominal trade weighted thai baht fell for most of 2008 as financial market risk

aversion mounted and inflation accelerated. Limited reliance on international capital flows has helped shore up

the baht more recently.

What they mean: The rise in USDTHB overstates the weakness of the THB, but the THB has weakened

meaningfully in real and nominal terms since the beginning of 2008. More recently the trade weighted currency

has stabilised, with some help from the BoT and despite ongoing political concerns.

12-month outlook: The recent strength of the baht has been a positive surprise to us. And we hesitate to chase

recent strength. Nonetheless, longer term, lower inflation, an improved trade balance and less adverse capital

flows should limit the downside to the trade weighted baht. We look for USDTHB 36 at year end 2009.

Asset Markets

What the numbers say: After a considerable period of selling, foreigners have turned net buyers of the equity

market.

What they mean: The reduction of risk aversion is helping to re-rate Thai risk markets.

12-month outlook: Thailand’s equity market will continue to be buffeted by international shifts in risk aversion.

Thailand in Context

What the numbers say: Against our expectations earlier in 2008, Thailand is proving to have one of the weakest

growth rates in ASEAN. This appears to be because of limited domestic growth to offset the weakness in the

export sector. Inflation in Thailand is also one of the lowest in Asia.

What they mean: Thailand’s economy remains a cyclical laggard.

12-month outlook: We expect Thai sequential qoq growth to trough over Q4 2008/Q1 2009 alongside Singapore,

Malaysia and the Philippines. The most negative implications of begin exposed to the global trade cycle may be

behind us. Thailand was geared to the global trade down cycle and could now benefit on the upside; we suspect

the upswing in Thai growth will under perform that of Singapore, however.

[Time Traveller]

Boum. Once again Naam spoke too fast. Do your homework. The BOT, right now, is buying USD.

i refuse to argue with people who are not able to differentiate between "buying US-debt" and "buying dollars". the BOT is SPENDING dollars to buy US-debt!

moreover, buying or spending dollars was used in context with the "strength of THB, alleged freefall of THB and [last not least] making vast amounts of money for its [the BOT's] investors.

BURP... next!

Naam, oh honored warrior. If we look at the trend for Thailand's international reserves (denominated in US dollars) we can see in the last several years that they have been increasing every month and continue to do so.

So, if the BoT are not buying dollars as you claim, then where are these dollars coming from? Are they magically appearing from the Holodeck?

Secondly, buying US debt is the same as buying dollars. They are both denominated in USD and guaranteed by the US Treasury. Perhaps what you're referring to is cash v. treasuries, and for international reserves reporting there's not a lot of difference.

Edited May 14, 2009 by Time Traveller

[MJP]

Boum. Once again Naam spoke too fast. Do your homework. The BOT, right now, is buying USD.

i refuse to argue with people who are not able to differentiate between "buying US-debt" and "buying dollars". the BOT is SPENDING dollars to buy US-debt!

moreover, buying or spending dollars was used in context with the "strength of THB, alleged freefall of THB and [last not least] making vast amounts of money for its [the BOT's] investors.

BURP... next!

Naam, oh honored warrior. If we look at the trend for Thailand's international reserves (denominated in US dollars) we can see in the last several years that they have been increasing every month and continue to do so.

So, if the BoT are not buying dollars as you claim, then where are these dollars coming from? Are they magically appearing from the Holodeck?

Secondly, buying US debt is the same as buying dollars. They are both denominated in USD and guaranteed by the US Treasury. Perhaps what you're referring to is cash v. treasuries, and for international reserves reporting there's not a lot of difference.

I can't help but read Naam's posts in the voice of . . . ah I forget the things name now . . . that thing in his picture there off Star Wars or whatever it was.

[chiangmaibruce]

Thailand by the Numbers

13 May 2009

Stabilisation and stimulus

<snip>

Thailand's economy remains a cyclical laggard.

Good overview. From your previous posts I think this is an extract from one of your broker's newsletters. Would be interested to know which company

- CB

[midas]

I wasn't living in Thailand in 1997 but I visited regularly

and I certainly don't remember hearing such negative statements from people involved in

such an important part of the economy :-

BANGKOK: - More than 100 hotels and resorts are reportedly up for sale in Thailand as hotel occupancy plunges to historic lows on the back of the worldwide recession and the country's political turmoil.

Two cases of H1N1 influenza found in Thailand now pose yet another threat to tourism.

'This year is the worst for our hotel industry in 20 years,' Mr Chanin Donavanik, chief executive officer of the Dusit International chain, told The Nation daily this week.

The hotels for sale or auction range from five-star properties to small basic establishments, the paper reported. They are concentrated largely in Bangkok, Phuket, Koh Samui, Hua Hin, Pattaya and Chiang Mai.

'Business is very, very bad, and the future looks absolutely bleak,' the outgoing general manager of the Mandarin Oriental, Mr Kurt Wachtveitl, told foreign journalists on Tuesday. He estimated that hotel occupancy rates were just 20 per cent across the board. The 72-year-old, Thailand's most senior hotelier and an industry legend, plans to retire next month.

'This is the perfect storm, for Thailand in particular - but wherever we (the Mandarin Oriental group) have hotels, in the first three to four months of the year, business is 20 per cent down,' he said.

'Nowadays, nobody is booking ahead. Now is the time when bookings come in for July-August, but everybody is waiting to see what the world will look like - and waiting until the last minute.'

The Oriental - consistently rated one of the world's best hotels - has 45 suites which are usually highly sought after, he said. But not one has been booked.

http://www.straitstimes.com/Breaking%2BNew...ory_376550.html

[Time Traveller]

I wasn't living in Thailand in 1997 but I visited regularly

and I certainly don't remember hearing such negative statements from people involved in

such an important part of the economy :-

BANGKOK: - More than 100 hotels and resorts are reportedly up for sale in Thailand as hotel occupancy plunges to historic lows on the back of the worldwide recession and the country's political turmoil.

Two cases of H1N1 influenza found in Thailand now pose yet another threat to tourism.

'This year is the worst for our hotel industry in 20 years,' Mr Chanin Donavanik, chief executive officer of the Dusit International chain, told The Nation daily this week.

The hotels for sale or auction range from five-star properties to small basic establishments, the paper reported. They are concentrated largely in Bangkok, Phuket, Koh Samui, Hua Hin, Pattaya and Chiang Mai.

'Business is very, very bad, and the future looks absolutely bleak,' the outgoing general manager of the Mandarin Oriental, Mr Kurt Wachtveitl, told foreign journalists on Tuesday. He estimated that hotel occupancy rates were just 20 per cent across the board. The 72-year-old, Thailand's most senior hotelier and an industry legend, plans to retire next month.

'This is the perfect storm, for Thailand in particular - but wherever we (the Mandarin Oriental group) have hotels, in the first three to four months of the year, business is 20 per cent down,' he said.

'Nowadays, nobody is booking ahead. Now is the time when bookings come in for July-August, but everybody is waiting to see what the world will look like - and waiting until the last minute.'

The Oriental - consistently rated one of the world's best hotels - has 45 suites which are usually highly sought after, he said. But not one has been booked.

http://www.straitstimes.com/Breaking%2BNew...ory_376550.html

In 1997 the problems mostly revolved around over investment in the property market. It wasn't until the economy really hit lows that the government aggressively promoted tourism to help the economy and international visitors number have surged in the last 10 years as a result. The problem now in the hotel industry is partly related to over investment in the tourism sector of the economy. Particularly at the high end of the market and still large number of surplus 4 and 5 star hotel rooms yet to come onto the market in the next 1 to 2 years. They really need to cut room prices, otherwise they're going to lose business to these newer hotels.

And naturally these guys are always complain the loudest when it comes to their own interests.

Edited May 14, 2009 by Time Traveller

[midas]

They really need to cut room prices, otherwise they're going to lose business to these newer hotels.

You must be joking ! hel_l would freeze over before they ever cut prices here.

They will arrogantly believe this is just temporary and short-lived blip

and ride it out.

[Naam]

Thailand by the Numbers

13 May 2009

Stabilisation and stimulus

<snip>

Thailand's economy remains a cyclical laggard.

Good overview. From your previous posts I think this is an extract from one of your broker's newsletters. Would be interested to know which company

- CB

i have never used a broker in my life and i don't think a broker exists who has the capability or can afford to churn out that type of extensive research (different topics of course) on a daily basis. the above research is the result a cooperation of several big banks, namely CS, JPM and UBS (i am banking with CS and UBS).

[tmth]

Thailand economy is going down, how far nobody knows, as mentioned before here they got food, but still rely on the kid's income working in the "big cities", here in Rayong they start to get rid of people as we speak.

Another sign is that the Real estate market is going down, look at all the fire sales, now is a good time to buy property, nevertheless we need to wait for the second half of this year brings to us joy or disaster.

I'm quite concerned since I'm a employee at Rayong, as more people loose their job as higher crime will go up, worst case scenario you are not safe on the roads anymore especially as foreigner, may we all pray that it don't come so far

[midas]

Thailand economy is going down, how far nobody knows, as mentioned before here they got food, but still rely on the kid's income working in the "big cities", here in Rayong they start to get rid of people as we speak.

Another sign is that the Real estate market is going down, look at all the fire sales, now is a good time to buy property, nevertheless we need to wait for the second half of this year brings to us joy or disaster.

I'm quite concerned since I'm a employee at Rayong, as more people loose their job as higher crime will go up, worst case scenario you are not safe on the roads anymore especially as foreigner, may we all pray that it don't come so far

I agree with most of what you say except for this part " Real estate market is going down, look at all the fire sales "

where is this happening ?

Edited May 15, 2009 by midas

[tmth]

Thailand economy is going down, how far nobody knows, as mentioned before here they got food, but still rely on the kid's income working in the "big cities", here in Rayong they start to get rid of people as we speak.

Another sign is that the Real estate market is going down, look at all the fire sales, now is a good time to buy property, nevertheless we need to wait for the second half of this year brings to us joy or disaster.

I'm quite concerned since I'm a employee at Rayong, as more people loose their job as higher crime will go up, worst case scenario you are not safe on the roads anymore especially as foreigner, may we all pray that it don't come so far

I agree with most of what you say except for this part " Real estate market is going down, look at all the fire sales "

where is this happening ?

In Pattaya, fire sales are starting and most of the big Condo projects (The Loft's Southshore, WTower etc.) frozen

[JR Texas]

Nam

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

But if the retiree/expat is living off or suplementing his pension with income from interest or stock market funds I guess they may be feeling the pinch.. I'm still working and my industry hasn't shown any signs of a downturn.. However my stirling based saving are now worth 30% less against the Baht and whereas previously I was earning 7% on my savings I'm now getting 1.8% .. No real affect on my standard of living cos I'm still at work.. But had I been already retired it would have been a big blow to my income.

that's not an answer to the question i asked! please read again. is my wife perhaps right when she claims my english is poor?

They could lose their pensions or see their pensions decline if the shit hits the fan.........might also see tax increases to pay for measures designed to clean up the entire mess........more economic decline will mean more ethnic violence/war/crime.....who is going to pay for it? They do not live in isolation behind golden bars..........they too will be increasingly exposed to the possibility of crime.......the sanuk factor will be greatly diminished (psychological impact). Xenophobia is increasing in Thailand.......I really think foreigners will become a scapegoat........"they are the problem." Good luck if you are in business and I suspect that you are.

[midas]

Nam

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

But if the retiree/expat is living off or suplementing his pension with income from interest or stock market funds I guess they may be feeling the pinch.. I'm still working and my industry hasn't shown any signs of a downturn.. However my stirling based saving are now worth 30% less against the Baht and whereas previously I was earning 7% on my savings I'm now getting 1.8% .. No real affect on my standard of living cos I'm still at work.. But had I been already retired it would have been a big blow to my income.

that's not an answer to the question i asked! please read again. is my wife perhaps right when she claims my english is poor?

They could lose their pensions or see their pensions decline if the shit hits the fan.........might also see tax increases to pay for measures designed to clean up the entire mess........more economic decline will mean more ethnic violence/war/crime.....who is going to pay for it? They do not live in isolation behind golden bars..........they too will be increasingly exposed to the possibility of crime.......the sanuk factor will be greatly diminished (psychological impact). Xenophobia is increasing in Thailand.......I really think foreigners will become a scapegoat........"they are the problem." Good luck if you are in business and I suspect that you are.

No JR................even though Naam claims to be a scientist.........I have never met anyone ( scientist or otherwise ) who is so

oblivious to what is happening outside his own cocoon .............its astonishing !

Maybe his science course didnt include the study of cause and effect ?

" Almost all writing about science and nature is concerned with cause and effect ".

[Naam]

i have never experienced an old, stubborn and frightened man who shits in his pants because because he interpretes each and any sign as future chaos, skies falling and the end of the world. that personalities like him cannot argue rationally but resort to presentation of irrelevant assumptions is of course quite normal

[Naam]

Nam

would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore? will less exports and less tourists affect the lifestyle of expat retirees? will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY? i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

But if the retiree/expat is living off or suplementing his pension with income from interest or stock market funds I guess they may be feeling the pinch.. I'm still working and my industry hasn't shown any signs of a downturn.. However my stirling based saving are now worth 30% less against the Baht and whereas previously I was earning 7% on my savings I'm now getting 1.8% .. No real affect on my standard of living cos I'm still at work.. But had I been already retired it would have been a big blow to my income.

that's not an answer to the question i asked! please read again. is my wife perhaps right when she claims my english is poor?

They could lose their pensions or see their pensions decline if the shit hits the fan.........might also see tax increases to pay for measures designed to clean up the entire mess........more economic decline will mean more ethnic violence/war/crime.....who is going to pay for it? They do not live in isolation behind golden bars..........they too will be increasingly exposed to the possibility of crime.......the sanuk factor will be greatly diminished (psychological impact). Xenophobia is increasing in Thailand.......I really think foreigners will become a scapegoat........"they are the problem." Good luck if you are in business and I suspect that you are.

JR, Pdaz;

my comments were posted in the context with "economic slump in Thailand"

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

Edited May 15, 2009 by Naam

[JR Texas]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

It is not easy to talk about the economy of Thailand as if it is totally isolated from the global economy. I think I was simply trying to put some global perspective on things......in the global economy and event in one part of the world can trigger an event in another. But you know that. Good luck.

[midas]

i have never experienced an old, stubborn and frightened man who shits in his pants because because he interpretes each and any sign as future chaos, skies falling and the end of the world. that personalities like him cannot argue rationally but resort to presentation of irrelevant assumptions is of course quite normal

And yet again .........a very unscientific response. ............. where did you get your " Dr " designation?

I would love to argue rationally with you..........but you never present facts .........everything to you is justr a wet dream

[MJP]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

It is not easy to talk about the economy of Thailand as if it is totally isolated from the global economy. I think I was simply trying to put some global perspective on things......in the global economy and event in one part of the world can trigger an event in another. But you know that. Good luck.

When we talk about economy, what do we actually mean?

Do we mean the (now defunct) Western model of ever increasing consumption of luxury goods and services?

Or do we mean the ability of a society to function. The provision of clean water, food, transportation, housing, schooling, health care etc?

Think of economy in terms of Maslow's hierarchy of human needs. The Western example has 'self-actualisation' at the top, whereas the Eastern (poor eastern) has food, shelter, basic human needs.

Thailand may have 'come a long way' into the western model. But does it still have the society and culture to go back to a self-sufficiency economy?

[Merangue]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

Thailand may have 'come a long way' into the western model. But does it still have the society and culture to go back to a self-sufficiency economy?

Does it still have the ability to go back to a self-sufficiency economy?

Possibly...... but not without a great deal of pain and misery for a lot of people.

The less affluent population has had a taste of western goods and services. If only the likes of a TV in every house, a wider variety of foods/drinks and the ability to buy Ice Cream for the kids when the Ice cream man pulls up outside the village.

Whilst they can live without them, would they now be happy to do so?

Prime example. How many kids in the local village school have Mobile phones? If the economy is squeezed, so to are the teens who have these status symbols. This in turn impacts on the parents who are asked to provide such niceties and like it or not this can and will effect the lifestyles of the families involved.

Yes thailand can survive and can probably; with a lot of work; return to a mostly agricultural, self sufficient society but the fact remains that human nature does not like having its luxuries curtailed.

Will resent anyone who removes those luxuries and will actively oppose anyone who tells them they cannot have them.

Pandora's box has been opened and it will be hard to close it again without severe acts.

[MJP]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

Thailand may have 'come a long way' into the western model. But does it still have the society and culture to go back to a self-sufficiency economy?

Does it still have the ability to go back to a self-sufficiency economy?

Possibly...... but not without a great deal of pain and misery for a lot of people.

The less affluent population has had a taste of western goods and services. If only the likes of a TV in every house, a wider variety of foods/drinks and the ability to buy Ice Cream for the kids when the Ice cream man pulls up outside the village.

Whilst they can live without them, would they now be happy to do so?

Prime example. How many kids in the local village school have Mobile phones? If the economy is squeezed, so to are the teens who have these status symbols. This in turn impacts on the parents who are asked to provide such niceties and like it or not this can and will effect the lifestyles of the families involved.

Yes thailand can survive and can probably; with a lot of work; return to a mostly agricultural, self sufficient society but the fact remains that human nature does not like having its luxuries curtailed.

Will resent anyone who removes those luxuries and will actively oppose anyone who tells them they cannot have them.

Pandora's box has been opened and it will be hard to close it again without severe acts.

Excellent post and thanks for replying.

Yes indeed it will be painful. I just hope they manage to strike a balance. Insatiable material demand in the UK, especially for the intangible status symbols, I think has brought psychological pain and suffering to many.

Even though I earned well in the UK, I drove an old Xantia diesel when I could have driven a Porsche. I just never wanted that 'got to have the best thing' treadmill of dissatisfaction.

When we speak of economies today, I hope at least basic services and trade will survive, because the rest, to be honest is top dressing.

[Naam]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

It is not easy to talk about the economy of Thailand as if it is totally isolated from the global economy. I think I was simply trying to put some global perspective on things......in the global economy and event in one part of the world can trigger an event in another. But you know that. Good luck.

JR, within the topic of this thread i asked the questions (see quote below) why specific expats should worry in case of a severe economic downturn of Thailand's economy. i still haven't received any answers and actually i don't expect one as the resident doom&gloomers can't come up with something of substance.

(Naam @ 2009-01-23 19:04:08)

-would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore?

-will less exports and less tourists affect the lifestyle of expat retirees?

-will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY?

i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

[flying]

(Naam @ 2009-01-23 19:04:08)

-would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore?

-will less exports and less tourists affect the lifestyle of expat retirees?

Yes well of course as the economy drops so will the costs of multi mia noi's

the temptation for the average joe will be more than he can bare. Not to mention the increase in V drug costs alone. This in turn will increase the threat of unrequested castration once the panraya finds out. Stress will mount till expats start jumping from windows to escape.

-will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY?

Well because the truth is they were pushed by the angry wife...who recently found out about the high volume of inexpensive Mia Noi's

Edited May 15, 2009 by flying

[JR Texas]

friendly reminder: this thread is called "Thai Economic Crash" not british pensions, not NY stock exchange, not riots in Guadeloupe...

It is not easy to talk about the economy of Thailand as if it is totally isolated from the global economy. I think I was simply trying to put some global perspective on things......in the global economy and event in one part of the world can trigger an event in another. But you know that. Good luck.

JR, within the topic of this thread i asked the questions (see quote below) why specific expats should worry in case of a severe economic downturn of Thailand's economy. i still haven't received any answers and actually i don't expect one as the resident doom&gloomers can't come up with something of substance.

(Naam @ 2009-01-23 19:04:08)

-would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore?

-will less exports and less tourists affect the lifestyle of expat retirees?

-will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY?

i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

If I had asked the same questions, how would you answer them?

When you say affect.......I get the feeling you mean only financially. And because the income generation is offshore, you assume no affect at all.

The only thing I know for sure is that social disintegration within a society can have a major impact on resident expats, and not just a financial impact.

The genocidal catastrophe in Cambodia is a good example..........resident expats were forced to flee to avoid being killed. They left houses and businesses behind.

A similar situation took place in Zimbabwe.......resident expats (white minorities) had their property/farms/ranches/homes seized.....many died.

Xenophobia coupled with a declining economy can have terrible consequences for expats........the outsiders.

I see xenophobia increasing in Thailand.

And the data show a declining economy, especially in relationship to Thailand's neighbors. Cambodia's annual economic growth rate is double Thailand's........and that was last year.

[midas]

-would anybody therefore explain why an economic slump would affect expats (who are, i assume, the majority) living on their income generated offshore?

-will less exports and less tourists affect the lifestyle of expat retirees?

-will expats who own property be homeless or jump from their balconies if property prices fall? if yes WHY?

i have asked that question several times before but instead an answer i read the daily boring prophecies of future horror which are without being backed by conclusive reasons nothing but empty blah-blah.

If I had asked the same questions, how would you answer them?

When you say affect.......I get the feeling you mean only financially. And because the income generation is offshore, you assume no affect at all.

The only thing I know for sure is that social disintegration within a society can have a major impact on resident expats, and not just a financial impact.

The genocidal catastrophe in Cambodia is a good example..........resident expats were forced to flee to avoid being killed. They left houses and businesses behind.

A similar situation took place in Zimbabwe.......resident expats (white minorities) had their property/farms/ranches/homes seized.....many died.

Xenophobia coupled with a declining economy can have terrible consequences for expats........the outsiders.

I see xenophobia increasing in Thailand.

And the data show a declining economy, especially in relationship to Thailand's neighbors. Cambodia's annual economic growth rate is double Thailand's........and that was last year.

" .......I get the feeling you mean only financially. " - agreed and people like him who only think in terms

of their so called ' financial security ' are the ones who will be most ill prepared when services they take for granted

will no longer be there. There is indeed a social disintegration occurring everywhere particularly in America

and even places like Russia and to say this will not spread to other parts of the world is naive.

In California, they are talking about not even having enough money to pay the police. The only way Naam could be unaffected

by what could happen in the worst-case scenario as things continue to unravel is if he can grow all his food, provide all his own water, generate all his own

electricity and employ his own private security guards to protect his safety and property. On top of that as you correctly stated, would the Thai's be less

xenophobic than they already are? i dont think so.

[3zie]

I do think right now is the quiet before the storm in 6 months the Great Depression will be here. Economic upheaval the likes of which Thailand has never seen. No jobs, no money coming in no savings overpriced Baht!

I don't know where you guys are from but there is no such thing as an overpriced Baht. I assume you are UK citizen and so I do understand your point... But it's not due to the Baht but due to the GBP which is EXTREMLY weak at this moment (and the last 12months). The value of GBP:Baht and EUR:Baht before a year1/2 ago used to be 1:+70 and 1:+45 while at the moment 1GBP:52Baht 1EUR:46Baht. Ok, last year (June-August) the Baht has been very weak but has recovered to his old value (compared to EUR and Dollar)

[BEENTHEREDONETHAT]

Naam

In response to your question. There is both a upside and a downside for some of us retired expats.

On the upside there will be less traffic and the shopping mall will not be as crowded.

On the downside one or two of our favorite restaurants could close due to lack of business.

Worse case for us as we may not take some holidays we might have otherwise.

[Naam]

as i think it does not make sense to discuss the assumptions which are presented here ad nauseam i take a break and discuss for a while quantum physics with my dog. he seems to be quite interested when i lecture him about this topic... as long as the supply of bavarian weisswurst lasts.

[JR Texas]

as i think it does not make sense to discuss the assumptions which are presented here ad nauseam i take a break and discuss for a while quantum physics with my dog. he seems to be quite interested when i lecture him about this topic... as long as the supply of bavarian weisswurst lasts.

:D OK.......I am out of here......quantum physics is too much for me.