Baht Moving Beyond Fundamentals: Bank Of Thailand

[chiang mai]

NS: It's just occured to me that you didn't know that the creation of the Thai central bank (BOT) was a recommendation (actually more of a demand) that came as a result of IMF involvement in 1997, the IMF wouldn't make the necessary loans unless an independent BOT was created. So your question about why did the IMF have to close down xx number of Thai banks/finance houses, the answer is because there was no regulatory body in place to oversee them.

Ditto your question about the IMF demanding taxes be raised and general austerity etc, they wouldn't bail out the government unless those things were done.

[samran]

It would be a mistake to confuse the events and the environment of 1997 with that of today, the two are not even closely similar. It would also be a mistake to assume that what happened in the the US banking system six years ago will automatically happen here. And in answer to your question, yes, I do believe the numbers produced by the BOT and given a choice between those numbers and Mr Gambles numbers, the latter doesn't get a look in.

Thai banks have 40% of their loans as real estate loans. I believe there is a real estate bubble and this overbuilding is going to bite the builders and the banks. You don't have to agree of course. I said let's talk about it again in 5 years.

Yes, the one single thing that contributed most to bringing the Thai economy down in 97 was a real estate bubble bursting. It popped the banks and Thailand had to borrow billions from the IMF to bail them out. Some of those loans are still on the books and some of the buildings are either still empty or have been torn down.

So no, I don't trust any Thai numbers.

My BIGGEST problem with Thailand is corruption. I don't believe a thing they say. My second biggest is what I see with my own two eyes.

OK we have to end our little chat there because we've just gone cyclical again, as we have discussed previously the 1997 crash resulted from the currency peg and not from real estate (think cause and effect) but if it suits you to think in different terms, go for it, other readers may however want to do their own research on this point.

Geez. You just keep coming back.

If what you're saying is true, and with NO explanation as to what caused Thailand to uncouple the baht from the dollar, then tell me why this problem in Thailand on August 5, 1997 resulted in Thailand having to borrow 17 billion dollars from the IMF to bail its banks out of their bad loans?

Why did Thailand then have to close 42 of its suddenly defunct banks and "finance companies" at the insistence of the IMF?

What gave the IMF the power to make Thailand raise taxes and adopt a general austerity program?

Why did the IMF think that Thailand needed an austerity program? Because the baht was coupled to the dollar? Gimme a break!!! There's no possible correlation.

Do you not see the crashing real estate market in any way coupled with the crashing Thai economy and then the crashing banks and then the crashing baht?

If it was just the coupling of the baht with the dollar and a need (for some reason you don't explain) to decouple, then why did this poison immediately spread to South Korea, Hong Kong and China? ???? Were they 1. Also coupled with the dollar or 2. also overheated and inflated?

Question on the exam. How did this so mightily also affect Russia and Brazil, if it was all about the coupling of the baht, and that only?

You make a statement that it was about the coupling of the baht, but you have no idea what suddenly caused that to be a problem when it had worked OK for so many years. You don't get the fundamental, underlying cause(s).

Failure to see the underlying causes will be a failure to recognize it next time.

Thats cause the underlying causes first time around aren't present. Quite the opposite actually.

In the 90's, Thai investors were taking advantage of the fixed currency and borrowing offshore at low interest rates and using that to invest in all sorts of specultive and not so speculative investments in Thailand where interest rates for local borrowing were approaching 18% to 20%. This included, but was not limted to property.

Those high interest rates were necessary for the government at the time to defend the baht's fixed rate. Also needed was a hefty reserve of foriegn currency to buy baht to keep it strong if the high interest rates weren't enought.

As history (though you you seem to ignore this), Thailand ran out of foreign reserves to fix the baht, and couldn't defend it any more. The currency was floated and the IMF stepped in to help shore up Thailand's foregin reserves, led by a regional push from countries like Australia who contributed. Conditions of the loan were well known, but more about restoring banking confidence than any other thing.

Today, Thailand is drowning in foreign exchange and has one of the highest levels of forieng reserves from memory. The baht is being pushed to even greater heights, not by any government manipulation, but from those who see baht as some sort of safe-ish haven. No different to what Australia or NZ is experiencing at the moment.

There isnt any stupid levels of construction going on (beleive me, the mid 90's were crazy). People aren't taking out foreign loans to buy things.

In other words, what you see now is nothing like the mid 1990's.

[easybullet3]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

[Naam]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

The Right Honourable Nigel Lawson, Esq. paid me 14% about 30+ years ago. but then you Brits had the "Iron Lady" in Downing Street not a string of clowns

[thaibeachlovers]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

It goes to show how cowed and apathetic western society has become, that a scam like zero % is accepted without huge protests. What about all the retired people living off savings? Now they are using their capital to live off, and what will happen when that is gone?

BTW, recession, what recession? When millions of western tourists continue to flock abroad for a fun in the sun holiday, it proves that things are not as bad as the media would like to tell us. Is it the biggest scam ever.

Last night, a tv news item tried to tell us that a Spanish woman had been unemployed for 2 years with no benefits, yet had a new baby, lived in a nice place and looked well fed. Someone is telling porkies.

[Naam]

a scam like zero % is accepted without huge protests

only people without the slightest idea about economics call that a "scam".

[yoshiwara]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

Financial institutions do not exist to pay you an interest rate of your choosing. If you don't like it then invest elsewhere. Second point BTW, is that the government provides a very useful vehicle namely S+S ISA where one can invest in a number blue chip stocks paying 4+% dividends tax free, that's over 6% equivalent pre-tax. A fully invested ISA will have amassed a serious fund by now, but of course of no interest with our 'honest depositors' who demand perpetual high interest rates and no risk to boot. And end up frothing about on the letters page of the Daily Mail (and here.....) Edited May 1, 2013 by yoshiwara

[morrobay]

a scam like zero % is accepted without huge protests

only people without the slightest idea about economics call that a "scam".

What we have here is 12 members on the Fed deciding that interest rates shall be zero, to the benefit of traders who can borrow money overnight at 0%.

Scam is putting it mildly. May I refer the new book by David Stockmann to you : The Great Deformation - The Corruption Of Capitalism.

[yoshiwara]

a scam like zero % is accepted without huge protests

only people without the slightest idea about economics call that a "scam".

What we have here is 12 members on the Fed deciding that interest rates shall be zero, to the benefit of traders who can borrow money overnight at 0%.

Scam is putting it mildly. May I refer the new book by David Stockmann to you : The Great Deformation - The Corruption Of Capitalism.

Governments and central banks everywhere set interest rates. The only scam here is your attempt to wail a rise in interest rates to a level of your choosing and that is a dead duck from the off.

[easybullet3]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

Financial institutions do not exist to pay you an interest rate of your choosing. If you don't like it then invest elsewhere. Second point BTW, is that the government provides a very useful vehicle namely S+S ISA where one can invest in a number blue chip stocks paying 4+% dividends tax free, that's over 6% equivalent pre-tax. A fully invested ISA will have amassed a serious fund by now, but of course of no interest with our 'honest depositors' who demand perpetual high interest rates and no risk to boot. And end up frothing about on the letters page of the Daily Mail (and here.....)

duh! of course we (as consumers) know we can withdraw our money from the bank and do something else with our income.

THATS NOT THE POINT!

(and no idea why you are so protective of the banking system!)

Do you know what happens to a bank when ALL its unsatisfied customers withdraw their money??????

the bank hasnt got the money to pay them!!

The bank goes BANKRUPT!!

The banks customers can CRASH a bank to the ground.

They NEED our faith in them.

Putting your money in a Bank is similar to investing in a company or buying shares. it was always like that. But now since the crash, they have conveniently managed to keep a patheticly low interest pay-back for your money, and yes they manage to make billions on the money we lend them.

and when the shoe is on the other foot they charge you money for loans you take out.

Have you ever tried getting new phone line in a new home? or setting up your electricity and water?

have you ever tried joining major organisations? THEY WANT A COPY OF YOUR RECENT BANK STATEMENT!!!

its really hard (though not impossible) to open new accounts without first showing recent proof of your bank statement.

so,, its pretty much standard required that people have bank accounts.

how many jobs will pay your monthly salary into an ISA account???? NONE!!!!

they pay into a bank account.

so, please let me know when you come to realise that the Banks are justified in what they do.

of course, you can say: "if you dont like it, lump it"... or "vote with your feet and go elsewhere".

thats obvious. But it should NOT be like that with the banks.

They are completely taking advantage of fearful people.

if only people around the country would just withdraw all their money together on the same day. and demand better treatment.

power of the people does work... (theoretically). but its a shame that 95% of the population just happily takes it up the arse when they are fully aware they are getting shafted.

i seriously have no idea why you are protecting the Banking institutions!!

[Naam]

Have you ever tried getting new phone line in a new home? or setting up your electricity and water?

have you ever tried joining major organisations? THEY WANT A COPY OF YOUR RECENT BANK STATEMENT!!!

its really hard (though not impossible) to open new accounts without first showing recent proof of your bank statement.

none of these claims are correct in the real world. never in my whole life has anybody asked me for a bank statement, neither an old nor a recent one.

[Naam]

a scam like zero % is accepted without huge protests

only people without the slightest idea about economics call that a "scam".

What we have here is 12 members on the Fed deciding that interest rates shall be zero, to the benefit of traders who can borrow money overnight at 0%.

Scam is putting it mildly. May I refer the new book by David Stockmann to you : The Great Deformation - The Corruption Of Capitalism.

traders that can borrow at 0% exist only in your wild dreams. and no, you may not refer any new book to me. i will not allow it

[yoshiwara]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

Financial institutions do not exist to pay you an interest rate of your choosing. If you don't like it then invest elsewhere. Second point BTW, is that the government provides a very useful vehicle namely S+S ISA where one can invest in a number blue chip stocks paying 4+% dividends tax free, that's over 6% equivalent pre-tax. A fully invested ISA will have amassed a serious fund by now, but of course of no interest with our 'honest depositors' who demand perpetual high interest rates and no risk to boot. And end up frothing about on the letters page of the Daily Mail (and here.....)

duh! of course we (as consumers) know we can withdraw our money from the bank and do something else with our income.

THATS NOT THE POINT!

(and no idea why you are so protective of the banking system!)

Do you know what happens to a bank when ALL its unsatisfied customers withdraw their money??????

the bank hasnt got the money to pay them!!

The bank goes BANKRUPT!!

The banks customers can CRASH a bank to the ground.

They NEED our faith in them.

Putting your money in a Bank is similar to investing in a company or buying shares. it was always like that. But now since the crash, they have conveniently managed to keep a patheticly low interest pay-back for your money, and yes they manage to make billions on the money we lend them.

and when the shoe is on the other foot they charge you money for loans you take out.

Have you ever tried getting new phone line in a new home? or setting up your electricity and water?

have you ever tried joining major organisations? THEY WANT A COPY OF YOUR RECENT BANK STATEMENT!!!

its really hard (though not impossible) to open new accounts without first showing recent proof of your bank statement.

so,, its pretty much standard required that people have bank accounts.

how many jobs will pay your monthly salary into an ISA account???? NONE!!!!

they pay into a bank account.

so, please let me know when you come to realise that the Banks are justified in what they do.

of course, you can say: "if you dont like it, lump it"... or "vote with your feet and go elsewhere".

thats obvious. But it should NOT be like that with the banks.

They are completely taking advantage of fearful people.

if only people around the country would just withdraw all their money together on the same day. and demand better treatment.

power of the people does work... (theoretically). but its a shame that 95% of the population just happily takes it up the arse when they are fully aware they are getting shafted.

i seriously have no idea why you are protecting the Banking institutions!!

That was a speech sponsored by the Peoples' Piggy Bank Popular Front Party.

[thaibeachlovers]

<My latest Sterling import is now lower than in 1993, and I make ZERO interest on money in my UK a/c ( that is the biggest scam imaginable- once again the bankers rip off the honest depositor ).

Thats true!!!

ZERO % interest is indeed the BIGGEST SCAM EVER!!! its disgusting!!!

you give the bank your money and they invest it as they please and make profit,,, and they give you NOTHING BACK!!!!!

what a pathetic system we have!!!

I remember getting 10% from my post office account (25+ years ago!!!)

Financial institutions do not exist to pay you an interest rate of your choosing. If you don't like it then invest elsewhere. Second point BTW, is that the government provides a very useful vehicle namely S+S ISA where one can invest in a number blue chip stocks paying 4+% dividends tax free, that's over 6% equivalent pre-tax. A fully invested ISA will have amassed a serious fund by now, but of course of no interest with our 'honest depositors' who demand perpetual high interest rates and no risk to boot. And end up frothing about on the letters page of the Daily Mail (and here.....)

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

[yoshiwara]

That was a speech sponsored by the Peoples' Piggy Bank Popular Front Party.

Today's leading May Day Chants:

What Do We Want? Higher Interest Rates!

When Do We Want Them? Now!

Free The Piggy Banks!

Ho! Ho! 4% min!

[yoshiwara]

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

Well since my mortgage is about 1%, you are not going to get too much for your deposits. Happy me. Unhappy you.

Have you tried South American government bonds?

[thaibeachlovers]

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

Well since my mortgage is about 1%, you are not going to get too much for your deposits. Happy me. Unhappy you.

Have you tried South American government bonds?

I never said I wanted a high return on my bank savings. I'd be happy just to have a rate high enough not to lose their value to inflation.

In the days when savings banks couldn't speculate with my money, I used to get 3% and was happy with that. Unfortunately, bankers were able to fool the government into allowing them to speculate, which is when it all turned to poo for the ordinary saver. If I wanted high returns, I'd invest in a different institution, but I don't- I just want my money to be safe and not lose it's value.

[Thailand1977]

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

Well since my mortgage is about 1%, you are not going to get too much for your deposits. Happy me. Unhappy you.

Have you tried South American government bonds?

If everyone took your advice your interest rate would be a lot more than 1%.

Your interest rate is only this low as banks now get billions each month given to them via QE or some other taxpayer handout, meaning the banks no longer have to impress savers to get their money.

Its quite clear we don't live in a capitalist society but in nations where socialism for the rich is no longer hidden, and many of you rejoice at this.

[yoshiwara]

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

Well since my mortgage is about 1%, you are not going to get too much for your deposits. Happy me. Unhappy you.

Have you tried South American government bonds?

If everyone took your advice your interest rate would be a lot more than 1%.

Your interest rate is only this low as banks now get billions each month given to them via QE or some other taxpayer handout, meaning the banks no longer have to impress savers to get their money.

Its quite clear we don't live in a capitalist society but in nations where socialism for the rich is no longer hidden, and many of you rejoice at this.

Deal with the real world and take opportunities when they present themselves.

There was one small window of opportunity last year to take baht at 50 to the pound and several days at 49.

When such opportunities present themselves take them. Too many Brits (and others) want it permanently on a plate with a cherry on the top. Such an opportunity is present now at 45 after dropping below, but no, the Whiners Club prefer to spend their time bleating away.

[Thailand1977]

^^^

Yoshi

You constantly whine yet call everyone else a whiner... only Aussies have such lack of self awareness.

And why would i want to have taken a huge gamble by investing 10s of thousands of pounds into Thai Baht, to make about 8% once fees are taken into account, if this is your financial advice then clearly you aren't as bright as you like to think you are.

Anyway my way of making more money this year is to ask clients what theyre willing to pay, and it seems my day rate is now worth 20% more in USD. And id bet my day rate is more than you've ever earned for an honest days work!

Finally i don't know why i'm on this forum as im not planning to visit Thailand anytime soon, but then again its human nature to look at car crashes.

PS Im optimistic that the real world is just around the corner as nations and banks cant print forever and those that over leveraged (as its called these days) will end up on their backsides.

Edited May 1, 2013 by Thailand1977

[thaibeachlovers]

^^^

Yoshi

You constantly whine yet call everyone else a whiner... only Aussies have such lack of self awareness.

And why would i want to have taken a huge gamble by investing 10s of thousands of pounds into Thai Baht, to make about 8% once fees are taken into account, if this is your financial advice then clearly you aren't as bright as you like to think you are.

Anyway my way of making more money this year is to ask clients what theyre willing to pay, and it seems my day rate is now worth 20% more in USD. And id bet my day rate is more than you've ever earned for an honest days work!

Finally i don't know why i'm on this forum as im not planning to visit Thailand anytime soon, but then again its human nature to look at car crashes.

PS Im optimistic that the real world is just around the corner as nations and banks cant print forever and those that over leveraged (as its called these days) will end up on their backsides.

Probably true, but unfortunately when it all crashes due to printing ( or just inventing it with a computer ), it will take all the small people like myself down as well. Inflation affects all, but mostly those with limited assets and no way of earning more.

[mccw]

Financial institutions ( banks ) USED to take your money, give it out in loans to other people and give we the lenders interest as a "payment". Now, however, we are expected to loan our money to them for nothing. Of course it's a scam, allowed by collusion between crook bankers and politicians. IMO, it's officially sanctioned corruption.

What proves it is a scam allowed by the highest levels of government, is that no banker has yet gone on trial for corrupt practices related to the 2007 crash.

Well since my mortgage is about 1%, you are not going to get too much for your deposits. Happy me. Unhappy you.

Have you tried South American government bonds?

If everyone took your advice your interest rate would be a lot more than 1%.

Your interest rate is only this low as banks now get billions each month given to them via QE or some other taxpayer handout, meaning the banks no longer have to impress savers to get their money.

Its quite clear we don't live in a capitalist society but in nations where socialism for the rich is no longer hidden, and many of you rejoice at this.

Deal with the real world and take opportunities when they present themselves.

There was one small window of opportunity last year to take baht at 50 to the pound and several days at 49.

When such opportunities present themselves take them. Too many Brits (and others) want it permanently on a plate with a cherry on the top. Such an opportunity is present now at 45 after dropping below, but no, the Whiners Club prefer to spend their time bleating away.

Wahhh what is happening!!! I'm agreeing with you again

[mccw]

^ I agree to deal with the real world.

It doesn't mean one can't comment on what's going wrong with it or conjecture how it could be or changed in the future. See those things enables risk assetments and proper planning in the world of today.

[mccw]

Yoshi

You really get 1% mortgage? Can you tell me where and from whom? I'd love a piece of that.

Best I get is 3.69% on my residence and 4.99% on BTL (a little less under the initial fix)

[yoshiwara]

Yoshi

You really get 1% mortgage? Can you tell me where and from whom? I'd love a piece of that.

Best I get is 3.69% on my residence and 4.99% on BTL (a little less under the initial fix)

HSBC from 2008. BR+0.54% Not available now.

[yoshiwara]

^^^

Yoshi

You constantly whine yet call everyone else a whiner... only Aussies have such lack of self awareness.

And why would i want to have taken a huge gamble by investing 10s of thousands of pounds into Thai Baht, to make about 8% once fees are taken into account, if this is your financial advice then clearly you aren't as bright as you like to think you are.

I didn't but others did and it paid off for them.

I invested in Hong Kong assets.

[yoshiwara]

^^^

Anyway my way of making more money this year is to ask clients what theyre willing to pay, and it seems my day rate is now worth 20% more in USD. And id bet my day rate is more than you've ever earned for an honest days work!

Never had to do 'day rate'.

[Naam]

Yoshi

You really get 1% mortgage? Can you tell me where and from whom? I'd love a piece of that.

Best I get is 3.69% on my residence and 4.99% on BTL (a little less under the initial fix)

HSBC from 2008. BR+0.54% Not available now.

Germany mortgage 5 years fixed rate 1.38%, Singapore floating ~1.60%.

[yoshiwara]

Yoshi

You really get 1% mortgage? Can you tell me where and from whom? I'd love a piece of that.

Best I get is 3.69% on my residence and 4.99% on BTL (a little less under the initial fix)

HSBC from 2008. BR+0.54% Not available now.

Germany mortgage 5 years fixed rate 1.38%, Singapore floating ~1.60%.

If you recall a significant number of East Europeans took out uber-low mortgage rates in Swiss Francs and are suffering for it now. They didn't discount the exchange rate, they underestimated the risks. Probably a lot think they have been 'cheated'. The problem with low rates today is getting access to them. Low LTV and conservative valuations. However the question here is whether those low German rates would be available against central London property. Any knowledge? Or do we have to buy in nice East Kreuzberg?