Fascinating Article Re: Tycoon Debt

[aTomsLife]

There's been no shortage of discussion on this forum concerning Thailand's apparent debt bubble. I've seen many threads discussing both the government's and personal household debt, but this is the first I've seen written about the debt on the books of the country's tycoons.

It really is an insightful read for those interested in the direction Thailand's finances are headed. It seems all facets of Thai society are increasing their debt loads exponentially -- even the most business savvy -- and now have the attention of many of the world's financial players.

http://www.reuters.com/article/2013/06/10/thai-tycoons-idUSL3N0E811220130610?feedType=RSS&feedName=bondsNews&rpc=43

Hope you enjoy.

[farang000999]

I am sure they watched in the USA as one firm after another went to the government with their hand out when (if) it ever hits the fan.

Edited June 10, 2013 by farang000999

[benalibina]

Critical thinking ?

[aTomsLife]

I am watched in the USA as one firm after another went to the government with their hand out when (if) it ever hits the fan.

I don't exactly follow what you're saying here. Are you referencing the U.S.'s bailout of its banks? If so, I don't think Thailand could afford to do the same thing.

[aTomsLife]

Critical thinking ?

I wouldn't accuse the players this article cites of lacking critical thinking skills, as idiots tend not to become billionaires -- Donald Trump excepted, of course.

I think this will prove a case of excessively easy credit leading Thailand's big-shots into making gambler's wagers. It's hard to blame them, too. If it's not the tycoons that'll suffer; it's Thailand's banks. The businessmen didn't use their personal assets to make these purchases, and could simply declare bankruptcy -- though I don't feign to know Thailand's laws concerning such matters. However, I'd wager a guess these people are pretty much untouchable, much like the financial and business elite in western countries.

The real story here is the banks' behavior.

Edited June 10, 2013 by aTomsLife

[Thereisnoif]

Critical thinking ?

I wouldn't accuse the players this article cites of lacking critical thinking skills, as idiots tend not to become billionaires -- Donald Trump excepted, of course.

I think this will prove a case of excessively easy credit leading Thailand's big-shots into making gambler's wagers. It's hard to blame them, too. If it's not the tycoons that'll suffer; it's Thailand's banks. The businessmen didn't use their personal assets to make these purchases, and could simply declare bankruptcy -- though I don't feign to know Thailand's laws concerning such matters. However, I'd wager a guess these people are pretty much untouchable, much like the financial and business elite in western countries.

The real story here is the banks' behavior.

Both of these so called tycoons made their money in overprotected environments in a corrupt patronage society where blind obedience and absence of challenge of the elder is the rule.

[aTomsLife]

Critical thinking ?

I wouldn't accuse the players this article cites of lacking critical thinking skills, as idiots tend not to become billionaires -- Donald Trump excepted, of course.

I think this will prove a case of excessively easy credit leading Thailand's big-shots into making gambler's wagers. It's hard to blame them, too. If it's not the tycoons that'll suffer; it's Thailand's banks. The businessmen didn't use their personal assets to make these purchases, and could simply declare bankruptcy -- though I don't feign to know Thailand's laws concerning such matters. However, I'd wager a guess these people are pretty much untouchable, much like the financial and business elite in western countries.

The real story here is the banks' behavior.

Both of these so called tycoons made their money in overprotected environments in a corrupt patronage society where blind obedience and absence of challenge of the elder is the rule.

Okay then, now that we've got that out of the way -- do you care to discuss the topic?

Edited June 10, 2013 by aTomsLife

[lomatopo]

The real story here is the banks' behavior.

Possibly.

It always seems like the successful, savvy investors make risky investments just when most think it is the wrong time to do it.

[aTomsLife]

The real story here is the banks' behavior.

Possibly.

It always seems like the successful, savvy investors make risky investments just when most think it is the wrong time to do it.

I agree with your sentiment, but are you saying the banks are making a savvy investment or the business men, or both? If it's the businessmen only, I see your point: money is cheap and there's an abundance of it, so why not get all that can be had.

But who is protecting the banks here?

[Loptr]

The real story here is the banks' behavior.

Possibly.

It always seems like the successful, savvy investors make risky investments just when most think it is the wrong time to do it.

There is truth in the statement that successful traders buy when there is blood in the streets. There is profit to be found in anarchy.

[aTomsLife]

The real story here is the banks' behavior.

Possibly.

It always seems like the successful, savvy investors make risky investments just when most think it is the wrong time to do it.

There is truth in the statement that successful traders buy when there is blood in the streets. There is profit to be found in anarchy.

You're misapplying the quote, I think. Sure, it does go: 'Be fearful when others are greedy, and greedy when others are fearful.' But I'm of the perspective the current situation falls into the former group. Am I mistaken?

Edited June 10, 2013 by aTomsLife

[lomatopo]

Both.

I think one really has to respect both Khun Dhanin and Khun Charoen, maybe more so than the Oracle of Omaha? These guys have a very long history, and a long view on history and are not going to risk their descendants good fortune.

I confess I haven't even remotely reviewed any of their activities, other than the Foster & Neave acquisition which is typical of the global drinks consolidation over the past few years.

[impulse]

The real story here is the banks' behavior.

Possibly.

It always seems like the successful, savvy investors make risky investments just when most think it is the wrong time to do it.

No, the lucky ones do that. Then they go on the speaking circuit about how their bet on Red, 31 was a stroke of genius.

[lomatopo]

CP was in the hunt for Smithfield but (I'm guessing) bowed out/deferred respectfully to Shuanghui, again (perhaps) with a long view?

[Thereisnoif]

Critical thinking ?

I wouldn't accuse the players this article cites of lacking critical thinking skills, as idiots tend not to become billionaires -- Donald Trump excepted, of course.

I think this will prove a case of excessively easy credit leading Thailand's big-shots into making gambler's wagers. It's hard to blame them, too. If it's not the tycoons that'll suffer; it's Thailand's banks. The businessmen didn't use their personal assets to make these purchases, and could simply declare bankruptcy -- though I don't feign to know Thailand's laws concerning such matters. However, I'd wager a guess these people are pretty much untouchable, much like the financial and business elite in western countries.

The real story here is the banks' behavior.

Both of these so called tycoons made their money in overprotected environments in a corrupt patronage society where blind obedience and absence of challenge of the elder is the rule.

Okay then, now that we've got that out of the way -- do you care to discuss the topic?

Sure, what if any foreign company were to launch an hostile take over bid for any of these "tycoons" empire.

Wouldn't you be jumping on the nationalistic bandwagon and start crying foul as to how much disrespect foreigners have for thainess and that national security concerns should bar them from doing that ?

Mind you they never will because they know this is the land of the corrupt .

[soi41]

Strange thing was, when Mr Dhanin signed the papers to take over Makro, the loans needed to pay for the deal, was not even secured. But ofcourse the banks were tripping over eachother to have the honour of doing business with Mr BIG after the deal was signed!

Following the stockexchange here, IMO he paid about double the price of, what a normal valuation would have priced Makro at. Should things go south here, I think Mr Dhanin will survive, but I am not sure about the retailshareholders in CPF, TCC and the banks.

The Dutch sellers must be laughing all the way to the bank!!

[aTomsLife]

Strange thing was, when Mr Dhanin signed the papers to take over Makro, the loans needed to pay for the deal, was not even secured. But ofcourse the banks were tripping over eachother to have the honour of doing business with Mr BIG after the deal was signed!

Following the stockexchange here, IMO he paid about double the price of, what a normal valuation would have priced Makro at. Should things go south here, I think Mr Dhanin will survive, but I am not sure about the retailshareholders in CPF, TCC and the banks.

The Dutch sellers must be laughing all the way to the bank!!

Thank you, this is exactly what I was getting at, but couldn't formulate as cogently as you did. My takeaway from the article was that the banks were fawning over these tycoons, failing to consider the inherent risks at this stage in the markets. I think the article said something along the lines of closing a 6 billion deal in a week!

[aTomsLife]

Sure, what if any foreign company were to launch an hostile take over bid for any of these "tycoons" empire.

Wouldn't you be jumping on the nationalistic bandwagon and start crying foul as to how much disrespect foreigners have for thainess and that national security concerns should bar them from doing that ?

Mind you they never will because they know this is the land of the corrupt .

You must have me confused for someone else. If another multinational came looking for a takeover, I'd just shrug my shoulders. And I may be shrugging sooner rather than later, as it seems the Asian markets are running out of steam.

[benalibina]

Dutch economy on the rise again, i know now why !!

[Spoonman]

So far, Dhanin and Charoen look to be digesting their spoils

without issue, but some warning bells are ringing about the high

prices paid and the heavy debt load taken on - loans that are

tied to real estate and a skittish Bangkok stock market that can

swing sharply even when interest rates rise, let alone if

there's a credit crunch or steep economic slowdown.

Bangkok has it's own stock market these days ?

Did the rich finally distance themselves from the rest of Thailand?

Edited June 10, 2013 by Spoonman

[Cluey]

In Thailand it's the banks that come to the rescue of the government not the other way around.

It's not a "non-performing loan" until they say it is, can carry it on the books forever as long as petty nitpickers like the IMF aren't allowed to step in.

I think those running the Thai financial system have a lot more intelligence and skill at such matters, and concern for the welfare of the country as a whole than those running ours back home.

[aTomsLife]

In Thailand it's the banks that come to the rescue of the government not the other way around.

It's not a "non-performing loan" until they say it is, can carry it on the books forever as long as petty nitpickers like the IMF aren't allowed to step in.

I think those running the Thai financial system have a lot more intelligence and skill at such matters, and concern for the welfare of the country as a whole than those running ours back home.

I wouldn't go so far as to say they have more skill, but certainly their unwillingness to kowtow to the IMF, and its auditors, can be seen as an intelligent move. Thailand doesn't seem to play by the rules in global affairs, especially with regard to transparency, yet they expect continued foreign investment and an increase in their credit rating. They've gotten their way over the years more or less, but it seems those days might be numbered.

Ultimately, the only way to penalize Thailand is to withdraw investment from its shores. That is happening at the moment, whether it's a long-term trend, or we're just seeing a correction of sorts, time will tell.

[Berkshire]

Critical thinking ?

I wouldn't accuse the players this article cites of lacking critical thinking skills, as idiots tend not to become billionaires -- Donald Trump excepted, of course.

I think this will prove a case of excessively easy credit leading Thailand's big-shots into making gambler's wagers. It's hard to blame them, too. If it's not the tycoons that'll suffer; it's Thailand's banks. The businessmen didn't use their personal assets to make these purchases, and could simply declare bankruptcy -- though I don't feign to know Thailand's laws concerning such matters. However, I'd wager a guess these people are pretty much untouchable, much like the financial and business elite in western countries.

The real story here is the banks' behavior.

Both of these so called tycoons made their money in overprotected environments in a corrupt patronage society where blind obedience and absence of challenge of the elder is the rule.

Yet another jealous farang loser.

[kblaze]

CP was in the hunt for Smithfield but (I'm guessing) bowed out/deferred respectfully to Shuanghui, again (perhaps) with a long view?

Yeah it was, but in the end it would have pushed debt levels up too high

[Cluey]

Thailand doesn't seem to play by the rules in global affairs, especially with regard to transparency, yet they expect continued foreign investment and an increase in their credit rating. They've gotten their way over the years more or less, but it seems those days might be numbered.

Ultimately, the only way to penalize Thailand is to withdraw investment from its shores. That is happening at the moment, whether it's a long-term trend, or we're just seeing a correction of sorts, time will tell.

-

You think playing by "the rules" set by the TPTB in international finance is a good thing and Thailand should be "penalized" to force that compliance???

IMO those jokers are a much greater threat to humanity than any terrorists or drug cartels, I sure hope Thailand can hold out as long as possible.

When it's all "one world" do you think things will be better or worse than they are on average now?

Much rather have a bit of chaos crime and poverty than let the banksters and arms merchants run the whole world like they're doing back home, right into the ground.

[aTomsLife]

Thailand doesn't seem to play by the rules in global affairs, especially with regard to transparency, yet they expect continued foreign investment and an increase in their credit rating. They've gotten their way over the years more or less, but it seems those days might be numbered.

Ultimately, the only way to penalize Thailand is to withdraw investment from its shores. That is happening at the moment, whether it's a long-term trend, or we're just seeing a correction of sorts, time will tell.

-

You think playing by "the rules" set by the TPTB in international finance is a good thing and Thailand should be "penalized" to force that compliance???

IMO those jokers are a much greater threat to humanity than any terrorists or drug cartels, I sure hope Thailand can hold out as long as possible.

When it's all "one world" do you think things will be better or worse than they are on average now?

Much rather have a bit of chaos crime and poverty than let the banksters and arms merchants run the whole world like they're doing back home, right into the ground.

Pointing out that Thailand doesn't play by the banksters' rules was a neutral comment. Said observation is pertinent because Thailand wants international investment and its credit rating increased. At this point, Thailand's cooperation with the international community, or lack thereof, doesn't concern whether they'll be actively penalized; if they fail to abide by the global standards of doing business, they'll be passively penalized, mostly through the withholding of investment capital. How you or I feel about said "standards" is irrelevant in the given context.

Thailand can't have it both ways, as they may soon discover. They can either play the global game, or tell the TPTB to go screw themselves. Up to them.

As for your question... Isn't it one world already?