Thailand, Malaysia and China have biggest rise in household debt

[webfact]

Malaysia, Thailand, China have biggest rise in household debt
The Star

LONDON: An estimated US$6.2 trillion jump in emerging market household debt should stir regulators into action, given the red flags raised by rising problem loans and slowing economic growth, the Institute of International Finance said in a report.

The IIF estimated that combined global household debt was now more than 44 trillion and that $6.2 trillion of a $7.7 trillion rise in the amount since 2007 - prior to the global financial crisis - was in emerging markets.

That equated to a rise in those regions of more than 120 percent to around $3,000 per adult, according to latest data.

These increases in the context of slowing growth in emerging economies and combined with a sharp rise in corporate debt, has contributed to an increase in the level of problem loans in many EM banks, most notably in Asia, the IIF said.

Full story: http://www.thestar.com.my/Business/Business-News/2015/11/11/Malaysia-Thailand-Indonesia-have-biggest-rise-in-household-debt/

-- The Star 2015-11-11

[Hawk]

These increases in the context of slowing growth in emerging economies.....

So Thailand really has a submerging economy, drowning in a sea of debt.

[slipperylobster]

These increases in the context of slowing growth in emerging economies.....

So Thailand really has a submerging economy, drowning in a sea of debt.

a sub-hub?

[trogers]

They have just discovered this problem? It was in the making just after recovery from the Asian Financial Crisis... when the logic was that taxes was used to bailout corporates, and so, why not give the poor and the struggling access to govt backed banks.

Thus, the start of using taxes to fund populist policies to sway voters...

[retarius]

I wonder how much of the Thai debt is related to the tax credit scheme for first time car buyers. Don't know about you all, but where I live every square inch of open space has been commandeered by folks selling 2 year old used cars...presumably owned by banks. One would think there may be a bargain or two given the huge supply and minimal demand, but no. And they won't take cash because they want to get a commission from the bank for signing you up to a loan!

I suspect that these "assets" which are rapidly declining in value, are on the banks' balance sheets valued at far more than they will ever realize from sales, and that the banks don't want to write them down. Crony capitalism sometimes makes you do really stupid things.

[elgordo38]

I wonder how much of the Thai debt is related to the tax credit scheme for first time car buyers. Don't know about you all, but where I live every square inch of open space has been commandeered by folks selling 2 year old used cars...presumably owned by banks. One would think there may be a bargain or two given the huge supply and minimal demand, but no. And they won't take cash because they want to get a commission from the bank for signing you up to a loan!

I suspect that these "assets" which are rapidly declining in value, are on the banks' balance sheets valued at far more than they will ever realize from sales, and that the banks don't want to write them down. Crony capitalism sometimes makes you do really stupid things.

Lets say vehicles are on the banks books and that is just for starters.

[elgordo38]

And China wants to change over from an exporting country to a consumer driven economy? Is everyone there named Wimpy?. Clear the monopoly board here come the players. I guess QE will come to China with much fanfare and happy days will ensue well for the banks anyways. People can only borrow what the banks will allow and it looks like their going to open the vaults and everyone bring their own shovel and wheelbarrow. What the heck its only paper.

Edited November 11, 2015 by elgordo38

[kiwikeith]

A good place to start in Thailand would be regulating power prices as they are to expensive and gouge the pockets.

Then take some of the taxes off so called luxury items, bring in transaction charges for share traders.

Stop handing out credit like lolly scambles.

The banks and finance companies are sitting on thousands of reposesed propertys and mountains of cars.

World wide the banks are handing out credit cards which force more debt onto people while corporates steal our assets and gouge our pockets.

[metisdead]

A post in violation of fair use violation has been removed:

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[Nobb]

These are the countries that China is trying to wow with a lot of promises, China has to many poor people already but does not care about them or list them when it comes to list there wealth. Thailand has one steady country to support them prior to the junta. USA always supported Thailand prior to the junta. New PM thinks China is a good idea. China looks down on the Thai people and government. China does not respect Thailand but just wants to use them. And the new PM just wants to hear the best deal. Do you go with history as which country has helped you most. Or because the USA supported Thailand during the prior Democratic government and with the junta you are not in compliance with the other government standards for Democracy. Just like the rest of the China tourist coming to Thailand. Do not take China because you want to stay in power and become like the government in China were no one has no rights. Does this sound like a China government?

[Usernames]

Three pigs in a poke.

[ExpatOilWorker]

And China wants to change over from an exporting country to a consumer driven economy? Is everyone there named Wimpy?. Clear the monopoly board here come the players. I guess QE will come to China with much fanfare and happy days will ensue well for the banks anyways. People can only borrow what the banks will allow and it looks like their going to open the vaults and everyone bring their own shovel and wheelbarrow. What the heck its only paper.

Chinese banks are short of $400 billion.

http://www.cnbc.com/2015/11/10/too-big-to-fail-chinese-banks-face-400-billion-capital-call.html

China's four biggest banks may have to raise up to $400 billion to meet new global capital rules, an onerous task that could pressure them to slow down lending at a time when Beijing wants them to help prop up economic growth.

The Financial Stability Board (FSB) this week finalized rules for ensuring banks do not become "too big to fail", a pledge made by the G20 after governments spent more than $1.5 trillion rescuing financial firms in the 2008 financial crisis.

[Asiantravel]

I wonder how much of the Thai debt is related to the tax credit scheme for first time car buyers. Don't know about you all, but where I live every square inch of open space has been commandeered by folks selling 2 year old used cars...presumably owned by banks. One would think there may be a bargain or two given the huge supply and minimal demand, but no. And they won't take cash because they want to get a commission from the bank for signing you up to a loan!

I suspect that these "assets" which are rapidly declining in value, are on the banks' balance sheets valued at far more than they will ever realize from sales, and that the banks don't want to write them down. Crony capitalism sometimes makes you do really stupid things.

"And they won't take cash because they want to get a commission from the bank for signing you up to a loan! "

tell me you are joking

[farangmick]

I wonder how much of the Thai debt is related to the tax credit scheme for first time car buyers. Don't know about you all, but where I live every square inch of open space has been commandeered by folks selling 2 year old used cars...presumably owned by banks. One would think there may be a bargain or two given the huge supply and minimal demand, but no. And they won't take cash because they want to get a commission from the bank for signing you up to a loan!

I suspect that these "assets" which are rapidly declining in value, are on the banks' balance sheets valued at far more than they will ever realize from sales, and that the banks don't want to write them down. Crony capitalism sometimes makes you do really stupid things.

It always seemed a stupid scheme, especially for a red shirt government. Growing up in the UK, many of my friends were from fairly prosperous families. Not one got a brand new car as their first set of wheels, Great for a Scottish friend who saved 94,000 baht buying a truck in his wife's name, or for rich folk buying a car for the kids as they start uni, but a cruel temptation to Yingluck's traditional Issan supporters, who appear to have the financial acumen of a goldfish.