Thai Baht: Tempers Rise Over B O T Rate Policy

[Naam]

one of my posting seems to have gone galactic. so here we go again:

Oh, you thought the Thai government had a balanced budget, lots of
money, and wasn't borrowing its azz off already? You thought it was
solvent? Mercy me.

now you overdo in NeverSure! Thailand's deficit spending is well in line with those of a bunch of industrial nations. take off the socialist Yingluck BS and the deficit for a developing nation looks very much acceptable.

but even with the "Rice BS" Thailand's deficit of ~4.5-5.0% compares favourably with that of the Unighted States of America which presently runs a deficit of 31% (THIRTY-ONE PERCENT) and is indeed borrowing the àss off its next generations citizens or default by means of hyperinflation.

your multiple reference to the two dwarf banks is superfluous. their required capital injection is peanuts.

Edited April 28, 2013 by metisdead

[chiang mai]

Here's two links for you to study:

http://www2.bot.or.th/statistics/BOTWEBSTAT.aspx?reportID=94&language=ENG

http://en.wikipedia.org/wiki/List_of_countries_by_foreign-exchange_reserves

Who'd have thunk it, Thailand has greater FOREX reserves than the US!

Dude, you're making a fool of yourself. You don't know what FOREX is, or that it's offset by liabilities.

You also don't know the US banking system which has an independent Federal Reserve which bought 3 trillion dollars worth of Euros not long ago to help Europe have dollars they could use to trade. See, to trade internationally, they need US Dollars.

What is your deal with always bringing up the US? It has nothing to do with this conversation, and you don't understand the conversation anyway.

You have an emotional thing about winning something here with no knowledge of the subject.

You're still not discussing the two Thai banks that just went tits up, and the clear fact that the Thai government has to come up with 2/3 of a billion dollars to bail them out, for now. You also aren't thinking "oops, what if there are more banks?"

Thailand doesn't have all of that money you think they have. Try to think. If they did, would the PM be running around the world trying to borrow a measly 2 tril baht to build a high speed rail system?

Huh???

"I can always tell when someone knows he losing a debate, because he goes off topic and starts attacking other people".

http://www.thaivisa.com/forum/topic/635688-thailands-booming-banks-wary-of-credit-bubble/page-2

Discuss the two small failing Thai banks, I don't think there's really much to discuss there, really. And honestly, in just reading through again the link to the other thread I posted above, you're having the same discussions on the same subjects but with different people in parallell threads and you're being consistently told the same things, but you're just not listening!

[Naam]

A post using an intentional misspelling of the Prime Minister's name has been removed. If you don’t want your post to be removed, spell people’s names correctly.

sorry! i just realised it must have been my "lost" post. and now i committed the faux pas again. please snip the misspelling. thanks!

[chiang mai]

Another poster in a separate thread points out:

"The SME and Islamic Banks are classified by the Ministry of Finance as Specialised Financial Institutions. The are not regulated by the BOT but
directly by MOF through the Fiscal Policy Office. The operate under different financial criteria because they act as policy instruments of
the government. They cannot be compared with standard commercial banks". Tep.

http://www.thaivisa.com/forum/topic/635688-thailands-booming-banks-wary-of-credit-bubble/page-3

[NeverSure]

one of my posting seems to have gone galactic. so here we go again:

Oh, you thought the Thai government had a balanced budget, lots of

money, and wasn't borrowing its azz off already? You thought it was

solvent? Mercy me.

now you overdo in NeverSure! Thailand's deficit spending is well in line with those of a bunch of industrial nations. take off the socialist "Ying-Rice-Luck" BS and the deficit for a developing nation looks very much acceptable.

but even with the "Rice BS" Thailand's deficit of ~4.5-5.0% compares favourably with that of the Yewnighted States of America which presently runs a deficit of 31% (THIRTY-ONE PERCENT) and is indeed borrowing the àss off its next generations citizens or default by means of hyperinflation.

your multiple reference to the two dwarf banks is superfluous. their required capital injection is peanuts.

First Mr. Naam, this thread is NOT about the US. Normally a mod would step in and point that out but so far, no avail. This thread is about BoT policy, and Thai banks, and the baht. I will from now on skip, as I do now, replying to specific points about the US.

Bringing it up is ignorance of this topic in itself. It shows a propensity to put one irrelevant thing down to falsely bolster the real target.

You are smarter than that.

Thailand has a deficit and borrows (issues bonds) to cover it. That is important because it appears that many on here believe that Thailand is awash in money, including this phantom amount of dollars. They are badly mistaken about what such foreign exchange is, and what it means.

If Thailand was awash in money, it wouldn't have to borrow anything to pay its bills. So we are correcting the error of some that Thailand is a rich country.

In that context, the percentage is irrelevant. Thailand can't pay it's bills without borrowing, which is news apparently to many posters who claim that Thailand is awash in surplus money.

Next, two Thai banks, one owned by the government have collapsed, eliciting runs on those banks. This is a terrible sign and runs contrary to the mistaken belief of many that you can't lose in Thailand. If that was true, why did the underlying collateral for so many loans collapse?

There is an old saying in banking. "No loans is ever bad when you make it or you wouldn't make it. It turns bad after you make it." This is so true, and proves that investments in Thailand are not bullet proof.

Now since you spent most of your time talking about irrelevant percentages and the US, wasting time, this is all the time you get.

[NeverSure]

Another poster in a separate thread points out:

"The SME and Islamic Banks are classified by the Ministry of Finance as Specialised Financial Institutions. The are not regulated by the BOT but

directly by MOF through the Fiscal Policy Office. The operate under different financial criteria because they act as policy instruments of

the government. They cannot be compared with standard commercial banks". Tep.

http://www.thaivisa.com/forum/topic/635688-thailands-booming-banks-wary-of-credit-bubble/page-3

Another TV poster!! OH, am I impressed. No links, not substance just a paragraph and you latch onto it as if you were drowning. And drowning you are.

Those are full blown, rated banks, one owned by the government, and they went bust trying to accommodate what? The government itself? And the government did this intentionally so it could be in a position to have to come up with another 2/3 of a billion USD to bail them out?

The spin would say that was just an experience or some other excuse? No, two banks went tits up in this fabulous economy where no one can lose.

[chiang mai]

I do not recall reading anywhere in any of these threads that anyone has said (or even implied) that Thailand is awash with money, if you are then perhaps you would post a link or a reference?

Secondly, if you accept that every government in every country borrows money and that is the standard and accepted practise, the only question remaining is, how much is it OK for a governemt to borrow - in the case of Thailand it seems that number is forecast to be 45% of GDP and given that the loans are for infrastructure projects, that would not seem to be an unreasonable figure, today.

Now, tell us what your problem is with that level of borrowing - ah wait, you've already told us previously in another thread, you don't believe the numbers from the BOT and you think (or rather Gambles thinks) it's closer to 60%.

[NeverSure]

I do not recall reading anywhere in any of these threads that anyone has said (or even implied) that Thailand is awash with money, if you are then perhaps you would post a link or a reference?

Secondly, if you accept that every government in every country borrows money and that is the standard and accepted practise, the only question remaining is, how much is it OK for a governemt to borrow - in the case of Thailand it seems that number is forecast to be 45% of GDP and given that the loans are for infrastructure projects, that would not seem to be an unreasonable figure, today.

Now, tell us what your problem is with that level of borrowing - ah wait, you've already told us previously in another thread, you don't believe the numbers from the BOT and you think (or rather Gambles thinks) it's closer to 60%.

First, I'm opposed to any borrowing by anyone. I don't do it myself. Think about this. If I made a financial statement, showing all of my liabilities which would boil down to what I owe my gardener and my electric bill which came today, and then in the other column listed my assets, I would have a strong net worth with a couple of small bills I will pay tomorrow.

On the other hand, it Thailand did the same, it would show a negative net worth. It owes more than it has, just like many people do.

Think about this. On paper, I have a higher net worth than most nations. Yes I do. So does Naam.

Now, I don't remember who, and if it wasn't you forgive me, but someone boasted that Thailand has something like 150 billion in foreign reserves in dollars, so it has no financial problems. If I didn't quote that quite right I apologize, but the gist is there and the point of the poster was that Thailand has lots of money.

That is false. Thailand doesn't own those dollars outright. That's not how foreign exchange works. it is a trade, to be paid back some day. At best it is a wash depending on exchange rates.

If Thailand is doing so very well then it would not need to borrow a dime to operate. Not one satang. But it does which puts to rest any false notion that it is rich, or that it is awash in money. In fact it is a debtor nation which continues to borrow more and more just to pay it's bills.

And, how anyone from you to Naam to anyone else can say that needing to come up with US 2/3 of a billion dollars to bail out two failed banks is "low as a percentage" is nuts. To the contrary it is a ton of money for Thailand which already has deficits and already has to borrow just for daily expenses.

Now, if people would just get their heads out of the sand and see that this is a very dangerous scenario, and could be followed by other banks, and even if not the sum needed is staggering.

I don't accept people shrugging it off as if it isn't a big deal. It is. it shows that you can lose big in Thailand, and it shows that Thailand is vulnerable to a sudden need for cash it doesn't have. it shows that you don't always win in Thailand, not even in banking.

It shows that what we don't know could be worse than what we do know. A corrupt government is telling what they want us to hear and it is impossible to know if they are telling the whole truth.

Edited April 28, 2013 by Rimmer
Flame

[Naam]

"bringing up" comparisons to highlight a situation is usually well accepted Sir NeverSure. your irrelevant objections are noted but that does not change the situation that you are overdoing it with your unwarranted criticism of Thailand and its economic situation by concentrating on two dwarf banks and extrapolating the results by insinuating "all Thai banks = same same!"

it is also completely wrong to completely negate a countries accumulated reserves. reserves are one of several useful factors to judge a country's economy.

i am neither a banker nor an economist but in more than three decades of successful investing (nearly exclusively in emerging/developing countries) i have collected, based on that experience, a wealth of knowledge enabling me to make rather sound and reasonable evaluations/judgments. of course Thailand, like any other country that runs a deficit, resorts to borrowing. deficit spending has been and is the basis for growth as long as it is in line with growth and if expenditure does not exceed revenue by an extraordinary high factor.

[chiang mai]

I do not recall reading anywhere in any of these threads that anyone has said (or even implied) that Thailand is awash with money, if you are then perhaps you would post a link or a reference?

Secondly, if you accept that every government in every country borrows money and that is the standard and accepted practise, the only question remaining is, how much is it OK for a governemt to borrow - in the case of Thailand it seems that number is forecast to be 45% of GDP and given that the loans are for infrastructure projects, that would not seem to be an unreasonable figure, today.

Now, tell us what your problem is with that level of borrowing - ah wait, you've already told us previously in another thread, you don't believe the numbers from the BOT and you think (or rather Gambles thinks) it's closer to 60%.

First, I'm opposed to any borrowing by anyone. I don't do it myself. Think about this. If I made a financial statement, showing all of my liabilities which would boil down to what I owe my gardener and my electric bill which came today, and then in the other column listed my assets, I would have a strong net worth with a couple of small bills I will pay tomorrow.

On the other hand, it Thailand did the same, it would show a negative net worth. It owes more than it has, just like many people do.

Think about this. On paper, I have a higher net worth than most nations. Yes I do. So does Naam.

Now, I don't remember who, and if it wasn't you forgive me, but someone boasted that Thailand has something like 150 billion in foreign reserves in dollars, so it has no financial problems. If I didn't quote that quite right I apologize, but the gist is there and the point of the poster was that Thailand has lots of money.

That is false. Thailand doesn't own those dollars outright. That's not how foreign exchange works. it is a trade, to be paid back some day. At best it is a wash depending on exchange rates.

If Thailand is doing so very well then it would not need to borrow a dime to operate. Not one satang. But it does which puts to rest any false notion that it is rich, or that it is awash in money. In fact it is a debtor nation which continues to borrow more and more just to pay it's bills.

And, how anyone from you to Naam to anyone else can say that needing to come up with US 2/3 of a billion dollars to bail out two failed banks is "low as a percentage" is nuts. To the contrary it is a ton of money for Thailand which already has deficits and already has to borrow just for daily expenses.

Now, if people would just get their heads out of the sand and see that this is a very dangerous scenario, and could be followed by other banks, and even if not the sum needed is staggering.

I don't accept people shrugging it off as if it isn't a big deal. It is. it shows that you can lose big in Thailand, and it shows that Thailand is vulnerable to a sudden need for cash it doesn't have. it shows that you don't always win in Thailand, not even in banking.

It shows that what we don't know could be worse than what we do know. A corrupt government is telling what they want us to hear and it is impossible to know if they are telling the whole truth.

My sincere apologies for cluttering up this thread with my presence, I realise I am not worthy to discuss these things in your company but I feel certain you wont me mind if I just hover here and try to pick up a few crumbs from under your table, sir.

Now, back to reality: so your basic problem is that you are against borrowing and you're against Thailand borrowing anything, is that actually relaistic in this day and age, I don't think so.

BTW it was 2/3 of a billion not 2/3 of a trillion!

[samran]

Unfortunately for you NS, I know of 'Tep', and his qualifications and experience in this area mean that his comments shouldn't be ignored.

[NeverSure]

I do not recall reading anywhere in any of these threads that anyone has said (or even implied) that Thailand is awash with money, if you are then perhaps you would post a link or a reference?

Secondly, if you accept that every government in every country borrows money and that is the standard and accepted practise, the only question remaining is, how much is it OK for a governemt to borrow - in the case of Thailand it seems that number is forecast to be 45% of GDP and given that the loans are for infrastructure projects, that would not seem to be an unreasonable figure, today.

Now, tell us what your problem is with that level of borrowing - ah wait, you've already told us previously in another thread, you don't believe the numbers from the BOT and you think (or rather Gambles thinks) it's closer to 60%.

First, I'm opposed to any borrowing by anyone. I don't do it myself. Think about this. If I made a financial statement, showing all of my liabilities which would boil down to what I owe my gardener and my electric bill which came today, and then in the other column listed my assets, I would have a strong net worth with a couple of small bills I will pay tomorrow.

On the other hand, it Thailand did the same, it would show a negative net worth. It owes more than it has, just like many people do.

Think about this. On paper, I have a higher net worth than most nations. Yes I do. So does Naam.

Now, I don't remember who, and if it wasn't you forgive me, but someone boasted that Thailand has something like 150 billion in foreign reserves in dollars, so it has no financial problems. If I didn't quote that quite right I apologize, but the gist is there and the point of the poster was that Thailand has lots of money.

That is false. Thailand doesn't own those dollars outright. That's not how foreign exchange works. it is a trade, to be paid back some day. At best it is a wash depending on exchange rates.

If Thailand is doing so very well then it would not need to borrow a dime to operate. Not one satang. But it does which puts to rest any false notion that it is rich, or that it is awash in money. In fact it is a debtor nation which continues to borrow more and more just to pay it's bills.

And, how anyone from you to Naam to anyone else can say that needing to come up with US 2/3 of a billion dollars to bail out two failed banks is "low as a percentage" is nuts. To the contrary it is a ton of money for Thailand which already has deficits and already has to borrow just for daily expenses.

Now, if people would just get their heads out of the sand and see that this is a very dangerous scenario, and could be followed by other banks, and even if not the sum needed is staggering.

I don't accept people shrugging it off as if it isn't a big deal. It is. it shows that you can lose big in Thailand, and it shows that Thailand is vulnerable to a sudden need for cash it doesn't have. it shows that you don't always win in Thailand, not even in banking.

It shows that what we don't know could be worse than what we do know. A corrupt government is telling what they want us to hear and it is impossible to know if they are telling the whole truth.

My sincere apologies for cluttering up this thread with my presence, I realise I am not worthy to discuss these things in your company but I feel certain you wont me mind if I just hover here and try to pick up a few crumbs from under your table, sir.

Now, back to reality: so your basic problem is that you are against borrowing and you're against Thailand borrowing anything, is that actually relaistic in this day and age, I don't think so.

BTW it was 2/3 of a billion not 2/3 of a trillion!

My point, which you miss, is that if Thailand is doing so well, is so rich, and is sitting on so much cash, it wouldn't need to borrow just to pay its bills.

I am correcting the mistaken opinion of some here who think Thailand is sitting on so much money that nothing can phase it. Can you grasp that? People and governments who are in the best financial shape don't need to borrow money for daily expenses.

I don't see 2/3 of a trillion, but I am capable of making a typo.

YOU are wasting my time for the last time.

[NeverSure]

Unfortunately for you NS, I know of 'Tep', and his qualifications and experience in this area mean that his comments shouldn't be ignored.

Then why doesn't this "Tep" show up and make some correct and intelligent debate points?

[NeverSure]

"bringing up" comparisons to highlight a situation is usually well accepted Sir NeverSure. your irrelevant objections are noted but that does not change the situation that you are overdoing it with your unwarranted criticism of Thailand and its economic situation by concentrating on two dwarf banks and extrapolating the results by insinuating "all Thai banks = same same!"

it is also completely wrong to completely negate a countries accumulated reserves. reserves are one of several useful factors to judge a country's economy.

i am neither a banker nor an economist but in more than three decades of successful investing (nearly exclusively in emerging/developing countries) i have collected, based on that experience, a wealth of knowledge enabling me to make rather sound and reasonable evaluations/judgments. of course Thailand, like any other country that runs a deficit, resorts to borrowing. deficit spending has been and is the basis for growth as long as it is in line with growth and if expenditure does not exceed revenue by an extraordinary high factor.

Simply explain to me how Thailand has something like US$150 billion in money, and where that fits on its financial statement. Show me the line. Tell me for a fact what the offset is on the other side of the ledger. When you can answer that question, you will have the truth.

As another old banker statement goes, "You can have 1 years experience 30 times, or you can have 30 different years of experience."

Edited April 28, 2013 by NeverSure

[samran]

Probably cause he doesn't suffer fools.

[chiang mai]

I do not recall reading anywhere in any of these threads that anyone has said (or even implied) that Thailand is awash with money, if you are then perhaps you would post a link or a reference?

Secondly, if you accept that every government in every country borrows money and that is the standard and accepted practise, the only question remaining is, how much is it OK for a governemt to borrow - in the case of Thailand it seems that number is forecast to be 45% of GDP and given that the loans are for infrastructure projects, that would not seem to be an unreasonable figure, today.

Now, tell us what your problem is with that level of borrowing - ah wait, you've already told us previously in another thread, you don't believe the numbers from the BOT and you think (or rather Gambles thinks) it's closer to 60%.

First, I'm opposed to any borrowing by anyone. I don't do it myself. Think about this. If I made a financial statement, showing all of my liabilities which would boil down to what I owe my gardener and my electric bill which came today, and then in the other column listed my assets, I would have a strong net worth with a couple of small bills I will pay tomorrow.

On the other hand, it Thailand did the same, it would show a negative net worth. It owes more than it has, just like many people do.

Think about this. On paper, I have a higher net worth than most nations. Yes I do. So does Naam.

Now, I don't remember who, and if it wasn't you forgive me, but someone boasted that Thailand has something like 150 billion in foreign reserves in dollars, so it has no financial problems. If I didn't quote that quite right I apologize, but the gist is there and the point of the poster was that Thailand has lots of money.

That is false. Thailand doesn't own those dollars outright. That's not how foreign exchange works. it is a trade, to be paid back some day. At best it is a wash depending on exchange rates.

If Thailand is doing so very well then it would not need to borrow a dime to operate. Not one satang. But it does which puts to rest any false notion that it is rich, or that it is awash in money. In fact it is a debtor nation which continues to borrow more and more just to pay it's bills.

And, how anyone from you to Naam to anyone else can say that needing to come up with US 2/3 of a billion dollars to bail out two failed banks is "low as a percentage" is nuts. To the contrary it is a ton of money for Thailand which already has deficits and already has to borrow just for daily expenses.

Now, if people would just get their heads out of the sand and see that this is a very dangerous scenario, and could be followed by other banks, and even if not the sum needed is staggering.

I don't accept people shrugging it off as if it isn't a big deal. It is. it shows that you can lose big in Thailand, and it shows that Thailand is vulnerable to a sudden need for cash it doesn't have. it shows that you don't always win in Thailand, not even in banking.

It shows that what we don't know could be worse than what we do know. A corrupt government is telling what they want us to hear and it is impossible to know if they are telling the whole truth.

My sincere apologies for cluttering up this thread with my presence, I realise I am not worthy to discuss these things in your company but I feel certain you wont me mind if I just hover here and try to pick up a few crumbs from under your table, sir.

Now, back to reality: so your basic problem is that you are against borrowing and you're against Thailand borrowing anything, is that actually relaistic in this day and age, I don't think so.

BTW it was 2/3 of a billion not 2/3 of a trillion!

YOU are wasting my time for the last time.

Oh we're not nearly done yet, not by a long way, your arrogance deserves as much.

[chiang mai]

"bringing up" comparisons to highlight a situation is usually well accepted Sir NeverSure. your irrelevant objections are noted but that does not change the situation that you are overdoing it with your unwarranted criticism of Thailand and its economic situation by concentrating on two dwarf banks and extrapolating the results by insinuating "all Thai banks = same same!"

it is also completely wrong to completely negate a countries accumulated reserves. reserves are one of several useful factors to judge a country's economy.

i am neither a banker nor an economist but in more than three decades of successful investing (nearly exclusively in emerging/developing countries) i have collected, based on that experience, a wealth of knowledge enabling me to make rather sound and reasonable evaluations/judgments. of course Thailand, like any other country that runs a deficit, resorts to borrowing. deficit spending has been and is the basis for growth as long as it is in line with growth and if expenditure does not exceed revenue by an extraordinary high factor.

Simply explain to me how Thailand has something like US$150 billion in money, and where that fits on its financial statement. Show me the line. Tell me for a fact what the offset is on the other side of the ledger. When you can answer that question, you will have the truth.

As another old banker statement goes, "You can have 1 years experience 30 times, or you can have 30 different years of experience."

So BOT wants to weaken the Baht thus it spends Baht and buys USD, over time that amounts to something close to USD176 billion accumulated.

Where does that fit on the financial statement: those funds are owned by BOT and not the Finance Department.

[Naam]

Simply explain to me how Thailand has something like US$150 billion in
money, and where that fits on its financial statement. Show me the line.
Tell me for a fact what the offset is on the other side of the ledger.
When you can answer that question, you will have the truth.

for the first part of your question google "International Monetary Fund, Thailand".

the "other side of the ledger" i leave to you because you seem to have indepth

knowledge of all BoT ledgers.

but of course anything positive is (according to you) fraud whereas all negative

assumptions, drawn out of thin air, must be true. well in line with the resident poor

boys who have problems to make end meets and who never go to bed without their

daily prayer "LORD, let this xxxxx country fall into the economic abyss and devalue

the Baht as well. every day noodle soup and a single Chang on the stairs in front

of 7/11 is unbearable. YOU HEAR ME LORD!?"

[farang000999]

Thailand has a printing press and can print Thai baht so why would paying their bills denominated in Thai baht ever be a problem?

Also, what would be the catalyst to cause a loss of confidence in the baht when the rest of the world is in such terrible shape and there is so much investment opportunity in Thailand?

The Thai baht crashed in 1997 because the IMF/Soros raped Thailand and created a classic bank run. Then Hong Kong handed Soros his ass if I recall correctly. It would appear that Thailand is much better prepared for such a scenario today and that the global enviroment has changed as well. I doubt that creating another Asian Financial Crisis is on the IMF "Things to Do List"...

Also, in 97' the Thai baht was pegged to the dollar... these dollar pegs have caused problems for countries all over the world, same thing in Argentina and Latin America.

They no longer need to worry about that... they also have much larger foreign reserves of 171 billion.

All you have said so far is that

"Two tiny banks failed so that means all the other banks will fail and that the Thai gov has to borrow to pay it's bills like every other country therefore the baht will crash and the Thai economy will crumble"

which makes no sense whatsoever and seems like more a pipe dream than a financial prediction.

Edited April 28, 2013 by farang000999

[Tep]

Unfortunately for you NS, I know of 'Tep', and his qualifications and experience in this area mean that his comments shouldn't be ignored.

Then why doesn't this "Tep" show up and make some correct and intelligent debate points?

You can download and read the 2011 review of all nine SFI's at http://www.sepo.go.th/2553-sfis-annual-reviews-2010/209/category.htm these include the SME Bank and Islamic Bank.

I assume you read Thai. Please take particular note of the Statement of Direction for each.

[Tep]

If Thailand was awash in money, it wouldn't have to borrow anything to pay its bills. So we are correcting the error of some that Thailand is a rich country.

In that context, the percentage is irrelevant. Thailand can't pay it's bills without borrowing, which is news apparently to many posters who claim that Thailand is awash in surplus money.

Thailand borrows primarily to invest in infrastructure. Public Debt levels are way under those at the time of the 97 crisis. Please familiarise yourself with the Public Debt Management Office. Their website even has information and figures in English.

[NeverSure]

Simply explain to me how Thailand has something like US$150 billion in

money, and where that fits on its financial statement. Show me the line.

Tell me for a fact what the offset is on the other side of the ledger.

When you can answer that question, you will have the truth.

for the first part of your question google "International Monetary Fund, Thailand".

the "other side of the ledger" i leave to you because you seem to have indepth

knowledge of all BoT ledgers.

but of course anything positive is (according to you) fraud whereas all negative

assumptions, drawn out of thin air, must be true. well in line with the resident poor

boys who have problems to make end meets and who never go to bed without their

daily prayer "LORD, let this xxxxx country fall into the economic abyss and devalue

the Baht as well. every day noodle soup and a single Chang on the stairs in front

of 7/11 is unbearable. YOU HEAR ME LORD!?"

Naam, it's easy to take pot shots from the peanut gallery, but you don't know what the hell you're talking about, nor would anyone else reading that.

Let's get serious and debate the issues, if you can.

[NeverSure]

"bringing up" comparisons to highlight a situation is usually well accepted Sir NeverSure. your irrelevant objections are noted but that does not change the situation that you are overdoing it with your unwarranted criticism of Thailand and its economic situation by concentrating on two dwarf banks and extrapolating the results by insinuating "all Thai banks = same same!"

it is also completely wrong to completely negate a countries accumulated reserves. reserves are one of several useful factors to judge a country's economy.

i am neither a banker nor an economist but in more than three decades of successful investing (nearly exclusively in emerging/developing countries) i have collected, based on that experience, a wealth of knowledge enabling me to make rather sound and reasonable evaluations/judgments. of course Thailand, like any other country that runs a deficit, resorts to borrowing. deficit spending has been and is the basis for growth as long as it is in line with growth and if expenditure does not exceed revenue by an extraordinary high factor.

Simply explain to me how Thailand has something like US$150 billion in money, and where that fits on its financial statement. Show me the line. Tell me for a fact what the offset is on the other side of the ledger. When you can answer that question, you will have the truth.

As another old banker statement goes, "You can have 1 years experience 30 times, or you can have 30 different years of experience."

So BOT wants to weaken the Baht thus it spends Baht and buys USD, over time that amounts to something close to USD176 billion accumulated.

Where does that fit on the financial statement: those funds are owned by BOT and not the Finance Department.

Do you not know the difference between a financial statement, or a bank, a central bank, and a government all of whom have financial statements.?

No, it's obvious you don't.

[NeverSure]

Thailand has a printing press and can print Thai baht so why would paying their bills denominated in Thai baht ever be a problem?

Also, what would be the catalyst to cause a loss of confidence in the baht when the rest of the world is in such terrible shape and there is so much investment opportunity in Thailand?

The Thai baht crashed in 1997 because the IMF/Soros raped Thailand and created a classic bank run. Then Hong Kong handed Soros his ass if I recall correctly. It would appear that Thailand is much better prepared for such a scenario today and that the global enviroment has changed as well. I doubt that creating another Asian Financial Crisis is on the IMF "Things to Do List"...

Also, in 97' the Thai baht was pegged to the dollar... these dollar pegs have caused problems for countries all over the world, same thing in Argentina and Latin America.

They no longer need to worry about that... they also have much larger foreign reserves of 171 billion.

All you have said so far is that

"Two tiny banks failed so that means all the other banks will fail and that the Thai gov has to borrow to pay it's bills like every other country therefore the baht will crash and the Thai economy will crumble"

which makes no sense whatsoever and seems like more a pipe dream than a financial prediction.

If you reach a point where you can actually understand what I said, and make accurate comments about what I said, get back to me.

[samran]

Thailand has a printing press and can print Thai baht so why would paying their bills denominated in Thai baht ever be a problem?

Also, what would be the catalyst to cause a loss of confidence in the baht when the rest of the world is in such terrible shape and there is so much investment opportunity in Thailand?

The Thai baht crashed in 1997 because the IMF/Soros raped Thailand and created a classic bank run. Then Hong Kong handed Soros his ass if I recall correctly. It would appear that Thailand is much better prepared for such a scenario today and that the global enviroment has changed as well. I doubt that creating another Asian Financial Crisis is on the IMF "Things to Do List"...

Also, in 97' the Thai baht was pegged to the dollar... these dollar pegs have caused problems for countries all over the world, same thing in Argentina and Latin America.

They no longer need to worry about that... they also have much larger foreign reserves of 171 billion.

All you have said so far is that

"Two tiny banks failed so that means all the other banks will fail and that the Thai gov has to borrow to pay it's bills like every other country therefore the baht will crash and the Thai economy will crumble"

which makes no sense whatsoever and seems like more a pipe dream than a financial prediction.

If you reach a point where you can actually understand what I said, and make accurate comments about what I said, get back to me.

Your first condition is going to be the killer for most of us....

[NeverSure]

Thailand has a printing press and can print Thai baht so why would paying their bills denominated in Thai baht ever be a problem?

Also, what would be the catalyst to cause a loss of confidence in the baht when the rest of the world is in such terrible shape and there is so much investment opportunity in Thailand?

The Thai baht crashed in 1997 because the IMF/Soros raped Thailand and created a classic bank run. Then Hong Kong handed Soros his ass if I recall correctly. It would appear that Thailand is much better prepared for such a scenario today and that the global enviroment has changed as well. I doubt that creating another Asian Financial Crisis is on the IMF "Things to Do List"...

Also, in 97' the Thai baht was pegged to the dollar... these dollar pegs have caused problems for countries all over the world, same thing in Argentina and Latin America.

They no longer need to worry about that... they also have much larger foreign reserves of 171 billion.

All you have said so far is that

"Two tiny banks failed so that means all the other banks will fail and that the Thai gov has to borrow to pay it's bills like every other country therefore the baht will crash and the Thai economy will crumble"

which makes no sense whatsoever and seems like more a pipe dream than a financial prediction.

If you reach a point where you can actually understand what I said, and make accurate comments about what I said, get back to me.

Your first condition is going to be the killer for most of us....

The condition for most here of understanding what's really happening is a little to much too ask.

Now, not aimed at you, someone said:

"Two tiny banks failed so that means all the other banks will fail and that the Thai gov has to borrow to pay it's bills like every other country therefore the baht will crash and the Thai economy will crumble"

Now, this is a gross misunderstanding, and a gross contradiction of what many are saying, because someone also said:

"Also, what would be the catalyst to cause a loss of confidence in the baht when the rest of the world is in such terrible shape and there is so much investment opportunity in Thailand?"

As I said earlier, these two banks are like a canary in mine. Yes they are small but:

If investment opportunities in Thailand are so great, which investments went sour and broke these banks?

Obviously the banks made loans. Obviously the collateral went sour. It is stated that the banks have as much as 40% of their assets (loans) in real estate.

So all we can conclude is that some real estate "investments" went sour. Now, these had to be big loans. Banks don't go broke making car loans because the loans are not only small, but the risk is spread across so many borrowers. This is reason #1 why banks love to make car loans. The loan is big enough to be worthwhile, but not big enough the break the bank. The bank makes lots of car loans. Some will go sour, but most won't and the spread of the risk keeps the bank safe.

But, if that bank instead shoots for the moon and starts backing condo developers, it puts all of its eggs in one basket. If the condos don't sell and the borrower therefore can't pay the loan, the single loss is huge. If the bank has more than just a couple such loans, it can break it.

To a bank, a loan is an asset. To the rest of us, a loan on our financial statement would be a liability. But the money is owed to the bank, so to the bank it is like an account receivable - an asset.

Now, if the loan becomes "non performing" meaning the payments aren't being made, the bank has to charge it off as a loss. It has to remove it from the balance sheet as an asset. In order now to balance the ledger, the bank must take its own capital, the stockholders' money, and replace that lost asset. So the banks own capital is disappearing.

If enough of this happens that the bank's capital (its own money) is gone, it is broke. This is why these two banks are asking the Thai government to recapitalize them with US$666 million dollars. That is the size of their claimed losses in capital. That is huge for two small banks.

Why are two small banks so important? Because they are proof that these "investments" in Thailand which so many here tell me are bullet proof, and "can't lose" deals, have lost.

It is proof that you can lose your ass in Thai real estate investments today even if you are a bank.

They are small banks, but which of us is as big as even the smallest of them? Should we not then have pause and ask ourselves, "If those banks can go tits up investing in Thai real estate today, what makes us exempt?"

Also, I don't believe for one second that two banks went broke, but no other banks are having the same problem. With all of the empty condos, and massive starts in real estate development, and with all Thai banks on average having 40% of their loans in real estate, how can they be exempt but just on a larger scale?

A larger bank can hide it longer, but we already have the proof that big investments in Thai real estate can even break banks today.

Now, after all of that work, I stand back and wait for the usual subjects to do their thing.

Edited April 28, 2013 by NeverSure

[Tep]

I do not believe you have any evidence to support your assertion that the Islamic Bank and SME Bank are investors in real estate or that you have any knowledge of their loan portfolios. I provided links as you requested to demonstrate that these SFI's are policy instruments if the government. They receive funding from the government to meet policy commitments which are known as Public Service Agreements. If you read the Statements of Direction for the SFI's, you will understand the policy directed lending priorities which I would guarantee does not include investing in real estate. I repeat my earlier statement that you cannot compare the SFI's to standard commercial retail banks. Even ratings agencies and investment analyses will factor this into their analysis.

The issues concerning these SFI's are caused by circumstances particular to their role, structure and status and are not indicative of wider concerns with the financial sector or the general economy.

[Tep]

$666million in subsidy to policy directed activities by state enterprises is not significant. The annual subsidy to PEA to maintain the national uniform tariff for electricity is around $90million. I worked on the previous pay down of the SRT debt that grew from 48 billion to 64 billion baht in the 5 years it took to structure the agreement that included the transfer of all SRT land holdings except Chatuchak to the Treasury Department.

Thailand's state enterprises and state companies play a significant role in the economy and in achieving the government's policy objectives. They are also a significant player in domestic and international debt markets. Their assets are in the trillions. It is too late for me to dig out numbers from my computer but the numbers dwarf the numbers you seem concerned about.

If you wish to regain any credibility in your argument, I would urge you to stop using the two examples you have chosen and find more relevant cases to support your position.

[NeverSure]

I do not believe you have any evidence to support your assertion that the Islamic Bank and SME Bank are investors in real estate or that you have any knowledge of their loan portfolios. I provided links as you requested to demonstrate that these SFI's are policy instruments if the government. They receive funding from the government to meet policy commitments which are known as Public Service Agreements. If you read the Statements of Direction for the SFI's, you will understand the policy directed lending priorities which I would guarantee does not include investing in real estate. I repeat my earlier statement that you cannot compare the SFI's to standard commercial retail banks. Even ratings agencies and investment analyses will factor this into their analysis. The issues concerning these SFI's are caused by circumstances particular to their role, structure and status and are not indicative of wider concerns with the financial sector or the general economy.

Everyone has a right to post here, including you. As the saying goes however, you are not entitle to your own facts.

I simply can't believe the pompousness with which some display their complete ignorance, when a pro is trying to explain something. Now listen up:

"...The state-owned (Ibank) bank admitted on February 12 that it suffers from non-performing loans that amount to 39 billion baht ($1.3 billion), or about 30 per cent of its outstanding loans.

Ninety per cent of the non-performing loans are represented by just about 100 accounts of corporate borrowers, the bank said. The bulk of the bad loans represent property and construction loans offered to borrowers in Bangkok, with the highest-value account being one borrower in default of 2 billion baht ($66 million)." Link

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

Now, if you want to just argue, and present no verifiable facts, then get a towel and wipe the egg off your face.

On the other hand, if you want to research, post links, and make some coherent comments, I'd be happy to listen.

There is almost no way a bank can lose all of its capital, other than by making too many speculative real estate loans, unless there is fraud. In the case of Thailand and a state owned bank, I don't doubt there could be some fraud, but even so it is in real estate loans.

Edited April 28, 2013 by NeverSure

[NeverSure]

$666million in subsidy to policy directed activities by state enterprises is not significant. The annual subsidy to PEA to maintain the national uniform tariff for electricity is around $90million. I worked on the previous pay down of the SRT debt that grew from 48 billion to 64 billion baht in the 5 years it took to structure the agreement that included the transfer of all SRT land holdings except Chatuchak to the Treasury Department. Thailand's state enterprises and state companies play a significant role in the economy and in achieving the government's policy objectives. They are also a significant player in domestic and international debt markets. Their assets are in the trillions. It is too late for me to dig out numbers from my computer but the numbers dwarf the numbers you seem concerned about. If you wish to regain any credibility in your argument, I would urge you to stop using the two examples you have chosen and find more relevant cases to support your position.

You already lost all credibility with your last post which I just blew out of the water. Why don't you do what most humiliated people do, and go hide somewhere?

You don't post links, you don't research, you provide no evidence, and then I come back with a link and a quote and burst your bubble.

I'm tired of it and you.