Financial Guru Faber Knocks Thai 'cronyism', Pledging Scheme

[webfact]

CRONYISM

Financial guru Faber knocks Thai 'cronyism', pledging scheme

PRAJYA AURA-EK,

PICHAYA CHANGSORN

THE NATION

Chiang Mai

BANGKOK: -- World-renowned investment guru Marc Faber says cronyism is a concern for an investor like himself as the Thai government has appointed people connected to former prime minister Thaksin Shinawatra.

"I think that, to be quite honest. I as an investor, it concerns me that, for instance, the government appoints principally people connected to Mr Thaksin for, say, Thai [Airways] International," he said.

"As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them. There is |still a lot of so-called cronyism. |In other words, I have political power and you're a businessman or you are someone who was at the party before and I give you a good job and the position of power," he said.

The Swiss investor and publisher of the "Gloom Boom & Doom Report" newsletter was speaking at his home in Chiang Mai in an exclusive interview with The Nation Group. Faber also criticised the Yingluck Shinawatra administration's multibillion-baht rice-pledging scheme, saying any price-support mechanism could basically distort the free market and lead to unintended consequences.

"Rice is not endemic to Thailand. Rice is a commodity traded all over the world. If the price should be fixed, it should be fixed all over the world," he said.

Nonetheless, Faber said he was "reasonably positive" about the future of Thailand, where he has resided since 2000 and has invested in some properties and Thai stocks.

"Thailand is unlikely to be a dynamic economy. It's not going to be like South Korea or Taiwan. In the long run, it could easily grow at 4-5 [per cent] per annum for the next 10-20 years unless the whole global economy collapses.

"It's like in the US ... tension between the Democrats and the Republicans are very high ... they just can't agree on anything. In Thailand, I don't know ... the red shirts, the yellow shirts ... both have probably some good and bad points. There is still too much corruption," he said.

Regarding his view on the global economy, Faber said he believed the Chinese economy was currently growing at a maximum of 4 per cent annually and the world economy overall was decelerating dramatically.

Nonetheless, Faber said the stock, gold, bond, currency and real-estate markets were different stories from the official economic figures since central banks would keep printing out money. This money has largely flowed to rich people while the lower middle class and poor have suffered from a higher cost of living.

Faber suggested that the average investor split his or her portfolio equally among stocks, property, gold, and corporate bonds.

"The purchasing power of money has depreciated a lot, and maybe the gold is still cheap. I will never sell my gold," he said.

Faber said the entire financial sector was vulnerable to a setback and a "systemic failure" would occur sooner or later.

"Now I happen to believe if you have money on deposit in Thai banks, it's much safer than if you have deposits with Citigroup, UBS, Royal Bank of Scotland and so on, because Thai banks don't have huge derivative portfolios. JPMorgan, they have trillions of dollars in derivatives. Nobody knows how to value this 'garbage'."

Faber said Thai property was still reasonably priced when compared with real estate in other parts of the world. He said he had invested in some Thai stocks including Bumrungrad International Hospital, Bangkok Dusit Medical Services, CP All, Charoen Pokphand Food, and some companies related to telecommunications and real estate.

Watch the full interview on Krungthep Turakij TV at 8pm tonight.

-- The Nation 2012-10-01

[asiawatcher]

At least at this point the Thai banks are not involved with all the Western Banks smoke and mirrors. If Thailand can remain isolated from the major Western Banks influence, Thailand should remain okay. The Baht has held up quite well against those just printing money to meet debt - thus in real terms Thailand has a far stronger currency.

He also makes the valid points, Reds, Yellows and corruption which is the major factor stifling business, investment and trust in Thailands economy. Enough said.

[Pib]

As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them.

And that don't happen in every country!? A new president, prime minister, political party comes into power and what do they do: they appoint/put into positions of power people who are supportive of them. But the real difference is the level of corruption and law enforcement that occurs between different countries.

Edited October 1, 2012 by Pib

[Roadman]

As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them.

And that don't happen in every country!? A new president, prime minister, political party comes into power and what do they do: they appoint/put into positions of power people who are supportive of them.

No, it does not happen in every country, and especially more to the point 'in large companies.'

[Buchholz]

Marc Faber Explains Why He Likes Living In Thailand

Read more: http://articles.busi...d#ixzz280yzUnfR

Marc Faber: In Thailand we grow good stuff

Marc Faber when asked about investing in farmland said that they have a farmland in New Zealand and they don't grow hashish, but in northern Thailand they grow good stuff.

Disclaimer: I think he's kidding.

[Pib]

I guess Faber's comments are focused towards those companies which are really semi-governmental companies and companies that have large number of shares owned by the government which gives the government a big say in how the company is run.

[cheeryble]

Marc Faber Explains Why He Likes Living In Thailand

Read more: http://articles.busi...d#ixzz280yzUnfR

Marc Faber: In Thailand we grow good stuff

Marc Faber when asked about investing in farmland said that they have a farmland in New Zealand and they don't grow hashish, but in northern Thailand they grow good stuff.

Disclaimer: I think he's kidding.

Surprise surprise Faber will never sell gold. Wonder If he bought gold in 1980 and spent 30 years underwater waiting for it to be worth what he paid for it....

As for the printed money flowing to the rich.....where did that come from? When the money supply is increased it's in effect a wealth tax which affects those with money the most.

As for "hashish". They used to grow the famous sticks 30 or 40 years ago but even those were full of seeds.....they never made the basic discovery that if you stop fertilisation by removing male plants you get buds that just grow and grow.....

But I'll say one thing for Marc Faber.......he's not as depressing as Nouriel ...and hats off for this latest cronyism comment, though it's a bit like commenting on the earth going round the sun every day.

Edited October 1, 2012 by cheeryble

[KRS1]

As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them.

And that don't happen in every country!? A new president, prime minister, political party comes into power and what do they do: they appoint/put into positions of power people who are supportive of them.

No, it does not happen in every country, and especially more to the point 'in large companies.'

Dick Cheney use to work for Halliburton.

Dick was vice president and Halliburton are major contactors in Iraq.

The most corrupt election in history was probably W Bush Jr's reelection and the issue with them dangling chads in Florida where his cousin was governor...corruption is world wide, but they just call them fines and donations overseas.

[gl555]

It's the same in Singapore. I mean the CEOs of many major companies are ex ministers. Not to mention Temasek Corp which is run by the PM's wife.

[Roadman]

As an investor, to me it sounds very strange that people who run large companies are appointed by the government and that the government then favours people that are supportive of them.

And that don't happen in every country!? A new president, prime minister, political party comes into power and what do they do: they appoint/put into positions of power people who are supportive of them.

No, it does not happen in every country, and especially more to the point 'in large companies.'

Dick Cheney use to work for Halliburton.

Dick was vice president and Halliburton are major contactors in Iraq.

The most corrupt election in history was probably W Bush Jr's reelection and the issue with them dangling chads in Florida where his cousin was governor...corruption is world wide, but they just call them fines and donations overseas.

Haha. I note when people make that claim then the examples of where it occurs are mostly always American.

[xkmasada]

> "I think that, to be quite honest. I as an investor, it concerns me that, for instance, the government appoints principally people connected to Mr Thaksin for, say, Thai [Airways] International," he said.

Of course, it was fine and dandy when the Democrat Party appointed the husband of a Democrat MP to be the head Thai Airways International... that wasn't cronyism! That was just pragmatism

[Chads]

Yes there is cronyism in our countries as well. But some more than others.

Someone cited Bush and his cronies, and they did get voted out no?

[WAERTH]

Wanna make a bet he will have problems on his next visumrun for criticising the sister of big brother

[ags83]

As for the printed money flowing to the rich.....where did that come from? When the money supply is increased it's in effect a wealth tax which affects those with money the most.

Look at the US, the money that is printed goes straight into the hands of those well connected (the big banks ), before filtering down to the little people. Prices don't suddenly just rise when the money is printed, it takes time, those who can spend it first get the best deal as the new money has not affected inflation yet.

And yes there is massive corruption worldwide (especially the Bush family ...). I think in Thailand they just don't even try to conceal it..... mai ben rai

[Bagwan]

I've always thought that the big American companies were the US Government.

[lounger]

The Baht has held up quite well against those just printing money to meet debt - thus in real terms Thailand has a far stronger currency.

My advice to you is "maybe you should stop commenting on financial matters"!

If the thai baht is printed it will lose value against other currencies.

If Other countries print more money than Thailand then the baht will gain in strength

If the Thai government thinks the baht is overvalued then the can use means to reduce its value.

Marc faber says Thailand is less involved with the derivative markets and so is not needing to bail out its banks. What he is not quoted as saying is that the Thai Govt is printing money to pay for the cost of past govt borrowing and current flood reparations.

[Colabamumbai]

Marc Faber Explains Why He Likes Living In Thailand

Read more: http://articles.busi...d#ixzz280yzUnfR

Marc Faber: In Thailand we grow good stuff

Marc Faber when asked about investing in farmland said that they have a farmland in New Zealand and they don't grow hashish, but in northern Thailand they grow good stuff.

Disclaimer: I think he's kidding.

Surprise surprise Faber will never sell gold. Wonder If he bought gold in 1980 and spent 30 years underwater waiting for it to be worth what he paid for it....

As for the printed money flowing to the rich.....where did that come from? When the money supply is increased it's in effect a wealth tax which affects those with money the most.

As for "hashish". They used to grow the famous sticks 30 or 40 years ago but even those were full of seeds.....they never made the basic discovery that if you stop fertilisation by removing male plants you get buds that just grow and grow.....

But I'll say one thing for Marc Faber.......he's not as depressing as Nouriel ...and hats off for this latest cronyism comment, though it's a bit like commenting on the earth going round the sun every day.

Mine never had seeds....1972 --1979 Cannot seem to find any anywhere now.

Edited October 1, 2012 by Colabamumbai

[lounger]

Marc Faber Explains Why He Likes Living In Thailand

Read more: http://articles.busi...d#ixzz280yzUnfR

Marc Faber:

Disclaimer: I think he's kidding.

Surprise surprise Faber will never sell gold. Wonder If he bought gold in 1980 and spent 30 years underwater waiting for it to be worth what he paid for it....

oooh wow, I wonder if he bought Enron or Marconi........... lets see if we can discredit him.

if you are not surprised Marc Faber will keep his gold why do you wonder if he spent 30 years underwater.....perverse you are.

Anyway I suggest he got it right because he is a financial guru and posts openly on twitter and is not writing carp posts under a pseudonym

[hyperdimension]

I thought he was based in Singapore. Has anyone seen him around in Thailand?

[Thai at Heart]

It's the same in Singapore. I mean the CEOs of many major companies are ex ministers. Not to mention Temasek Corp which is run by the PM's wife.

Well, Temasak isn't quite the same in essence as Thai Airways or PTT. The point of Temasak is to generate returns, not safeguard Singaporean control and management of a company. The Board is made up of some massive heavy weights from IInternational business, and as a rule it makes an awful lot of return for the Singaporean government.

Now it would be better of course if the PM's missus wasn't involved, but when you have competent and impartial decision making from a board stuff tends to work. When you have Thai Airways being pulled this way and that depending on the political will of the day, you get the mess that Thai Airways is in today, as opposed to Singapore Airlines that is a very good airline with good reputation and good returns.

[Arkady]

I thought he was based in Singapore. Has anyone seen him around in Thailand?

He used to live mainly in HK but now calls home a house in CM owned by his Thai wife. He is on the road about 3 weeks a month and the fourth week is for writing his GD&F news letter which is a good read if you can ignore the puffs for various funds he is on the boards of.

Edited October 1, 2012 by Arkady

[khunken]

The Baht has held up quite well against those just printing money to meet debt - thus in real terms Thailand has a far stronger currency.

My advice to you is "maybe you should stop commenting on financial matters"!

If the thai baht is printed it will lose value against other currencies.

If Other countries print more money than Thailand then the baht will gain in strength

If the Thai government thinks the baht is overvalued then the can use means to reduce its value.

Marc faber says Thailand is less involved with the derivative markets and so is not needing to bail out its banks. What he is not quoted as saying is that the Thai Govt is printing money to pay for the cost of past govt borrowing and current flood reparations.

My advice to you is to read what the other person is saying, & post a comment only if you understand it.

The current is not printing money to pay for the cost of past borrowing, it is printing money to pay for current borrowing & to line the pockets of its cronies.

[Chads]

It's the same in Singapore. I mean the CEOs of many major companies are ex ministers. Not to mention Temasek Corp which is run by the PM's wife.

Well, Temasak isn't quite the same in essence as Thai Airways or PTT. The point of Temasak is to generate returns, not safeguard Singaporean control and management of a company. The Board is made up of some massive heavy weights from IInternational business, and as a rule it makes an awful lot of return for the Singaporean government.

Now it would be better of course if the PM's missus wasn't involved, but when you have competent and impartial decision making from a board stuff tends to work. When you have Thai Airways being pulled this way and that depending on the political will of the day, you get the mess that Thai Airways is in today, as opposed to Singapore Airlines that is a very good airline with good reputation and good returns.

Temasek has actually in recent years lost so much of the Singaporean people's money in bad investments. This article will highlight the tip of the iceberg: http://theonlinecitizen.com/2009/02/58-billion-loss-by-temasek/

This also contributed to one of the reasons an average of 40% of the population voted against the Government in the recent elections. Didn't help that the Singapore PM's wife was in charge

[luckyman]

Marc Faber Explains Why He Likes Living In Thailand

Read more: http://articles.busi...d#ixzz280yzUnfR

Marc Faber: In Thailand we grow good stuff

Marc Faber when asked about investing in farmland said that they have a farmland in New Zealand and they don't grow hashish, but in northern Thailand they grow good stuff.

Disclaimer: I think he's kidding.

Surprise surprise Faber will never sell gold. Wonder If he bought gold in 1980 and spent 30 years underwater waiting for it to be worth what he paid for it....

As for the printed money flowing to the rich.....where did that come from? When the money supply is increased it's in effect a wealth tax which affects those with money the most.

As for "hashish". They used to grow the famous sticks 30 or 40 years ago but even those were full of seeds.....they never made the basic discovery that if you stop fertilisation by removing male plants you get buds that just grow and grow.....

But I'll say one thing for Marc Faber.......he's not as depressing as Nouriel ...and hats off for this latest cronyism comment, though it's a bit like commenting on the earth going round the sun every day.

Excellent post, thanks for sharing!!!

[osiboy]

As for the printed money flowing to the rich.....where did that come from? When the money supply is increased it's in effect a wealth tax which affects those with money the most.

Look at the US, the money that is printed goes straight into the hands of those well connected (the big banks ), before filtering down to the little people. Prices don't suddenly just rise when the money is printed, it takes time, those who can spend it first get the best deal as the new money has not affected inflation yet.

And yes there is massive corruption worldwide (especially the Bush family ...). I think in Thailand they just don't even try to conceal it..... mai ben rai

your right,....except it still has'nt got to the "little people" yet, and never will , thatcher always said money from the rich will trickle thru to the poor ,..........i've yet to see a drip !!

[osiboy]

The Baht has held up quite well against those just printing money to meet debt - thus in real terms Thailand has a far stronger currency.

My advice to you is "maybe you should stop commenting on financial matters"!

If the thai baht is printed it will lose value against other currencies.

If Other countries print more money than Thailand then the baht will gain in strength

If the Thai government thinks the baht is overvalued then the can use means to reduce its value.

Marc faber says Thailand is less involved with the derivative markets and so is not needing to bail out its banks. What he is not quoted as saying is that the Thai Govt is printing money to pay for the cost of past govt borrowing and current flood reparations.

i thoght thats what asiawatcher was saying too ..............was'nt it ??

[Thai at Heart]

It's the same in Singapore. I mean the CEOs of many major companies are ex ministers. Not to mention Temasek Corp which is run by the PM's wife.

Well, Temasak isn't quite the same in essence as Thai Airways or PTT. The point of Temasak is to generate returns, not safeguard Singaporean control and management of a company. The Board is made up of some massive heavy weights from IInternational business, and as a rule it makes an awful lot of return for the Singaporean government.

Now it would be better of course if the PM's missus wasn't involved, but when you have competent and impartial decision making from a board stuff tends to work. When you have Thai Airways being pulled this way and that depending on the political will of the day, you get the mess that Thai Airways is in today, as opposed to Singapore Airlines that is a very good airline with good reputation and good returns.

Temasek has actually in recent years lost so much of the Singaporean people's money in bad investments. This article will highlight the tip of the iceberg: http://theonlinecitizen.com/2009/02/58-billion-loss-by-temasek/

This also contributed to one of the reasons an average of 40% of the population voted against the Government in the recent elections. Didn't help that the Singapore PM's wife was in charge

Yes that's true, but they have made decent investments over the years, and the Singaporeans are smart enough to understand when someone is promoted above their pay scale.

Losing money in this market recently is hardly limited to temasak, but they will honestly try to insure they have competent people irrespective of where they come from.

Competence only goes as far as the bottom line.

Edited October 1, 2012 by Thai at Heart

[yoshiwara]

Interesting how Faber picked up on the stink of how the Thai Airways CEO was replaced in a Thaksin cronyist purge.

How this was illustrative of how things were working in the current environment.

[Chads]

It's the same in Singapore. I mean the CEOs of many major companies are ex ministers. Not to mention Temasek Corp which is run by the PM's wife.

Well, Temasak isn't quite the same in essence as Thai Airways or PTT. The point of Temasak is to generate returns, not safeguard Singaporean control and management of a company. The Board is made up of some massive heavy weights from IInternational business, and as a rule it makes an awful lot of return for the Singaporean government.

Now it would be better of course if the PM's missus wasn't involved, but when you have competent and impartial decision making from a board stuff tends to work. When you have Thai Airways being pulled this way and that depending on the political will of the day, you get the mess that Thai Airways is in today, as opposed to Singapore Airlines that is a very good airline with good reputation and good returns.

Temasek has actually in recent years lost so much of the Singaporean people's money in bad investments. This article will highlight the tip of the iceberg: http://theonlineciti...oss-by-temasek/

This also contributed to one of the reasons an average of 40% of the population voted against the Government in the recent elections. Didn't help that the Singapore PM's wife was in charge

Yes that's true, but they have made decent investments over the years, and the Singaporeans are smart enough to understand when someone is promoted above their pay scale.

Losing money in this market recently is hardly limited to temasak, but they will honestly try to insure they have competent people irrespective of where they come from.

Competence only goes as far as the bottom line.

And while we're at it, let's also remember that Singapore's current Prime Minister is the son of the previous Prime Minister

[DeepInTheForest]

c

And that don't happen in every country!? A new president, prime minister, political party comes into power and what do they do: they appoint/put into positions of power people who are supportive of them.

---------------------------

No, it does not happen in every country, and especially more to the point 'in large companies.'

Dick Cheney use to work for Halliburton.

Dick was vice president and Halliburton are major contactors in Iraq.

The most corrupt election in history was probably W Bush Jr's reelection and the issue with them dangling chads in Florida where his cousin was governor...corruption is world wide, but they just call them fines and donations overseas.

Haha. I note when people make that claim then the examples of where it occurs are mostly always American.

Oh really?

The Reserve Bank of Australia is facing a corruption scandal involving a subsidiary company, Securency, which allegedly paid bribes to secure overseas contracts for its banknote-printing business. The whistleblower in the case has also alleged that senior officials in the RBA itself were aware of the affair but failed to act.

The case has strong parallels to the AWB scandal. The monopoly wheat exporter, previously the Australian Wheat Board, made illegal payments to Saddam Hussein's regime in Iraq to circumvent United Nations sanctions. The payments were in the form of ''trucking fees'' to companies that never trucked any wheat.

http://www.smh.com.a...l#ixzz289l9ZBHq

Corruption in Britain is more prevalent than is currently recognised with potentially damaging consequences for the economy, Transparency International warned. The anti-corruption watchdog said in a report: “In the UK there seems to be a lack of awareness regarding the extent of corruption.

“Politicians, government, business and institutions throughout the UK urgently need to understand and accept that corruption is a problem in key sectors in the UK and must be tackled consistently and coherently.”

http://www.telegraph...port-warns.html

The above cases are not off-topic. We tend to think that corruption is largely a foreign affair, something that is more invidious in third-world countries, which are demonstrably more rotten than our well-run, civilized societies. Current Western dilemmas demonstrate the dangers of this kind of thinking. Western economies are teetering on the brink-- does anyone think this is not the result of mismanagement and corruption? It is a global problem, not just in Thailand, my friends. And in some regards, the Thai economy has been better managed than most-- its budget deficit is something that many European countries would envy-- although corruption, as in the West, is indeed a serious problem.

Edited October 2, 2012 by DeepInTheForest