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george

The Thai Economy Is In Crisis

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I am realy concerned with the US economy as the indicators are that they have a housing recession, an auto recession, a manufacturing recession, and a real investment recession already present. the domino effect is building up..

Sorry for sounding so doomsday but I am realy worried about this.

the impact on thailand will be felt when those export to us and europe will go down and forign investors hungry for cash will try and liquidate at the same time.

I share your fears. To see the DJ over 13 000 points is surreal... Anyway.

As for Thailand, the coming US recession will have some effects.

My main fear is the perfect storm : recession in US + crisis in Thailand because of internal factors.

A recession in the US will remove a lot of gas from the main engine of thai economy : exports.

A that point, a -good- government can make a difference... Or at least, try.

The problem is that with the current string of bozos that pretend to "run" Thailand... well they would probably make the situation even worse.

I should add that we have in Thailand a very specific... political issue on the horizon. This is why I do believe that the military will stay in power until this specific political issue is settled. And I'm not speaking about Thaksin.

This process could last a long time...

Only the dreamers can believe that we will have -free- elections by the end of 2007... And that everything will go back to normal.

Edited by cclub75

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the above is definatly a sign of financial crisis ready too boom.but its reasons are far from thailand.

the USA and the europeans are reporting the same problems in real estate and those indicators are just building up.

the US is the larges consumer market in the world and if they go down everyone else will follow.

I am realy concerned with the US economy as the indicators are that they have a housing recession, an auto recession, a manufacturing recession, and a real investment recession already present. the domino effect is building up..

Sorry for sounding so doomsday but I am realy worried about this.

the impact on thailand will be felt when those export to us and europe will go down and forign investors hungry for cash will try and liquidate at the same time.

Yes and as the Dow keeps on raging ahead and the Thai market breaks through the 700 again -

we should bear in mind.......................................................:-

The Dow Jones Industrials Average features prominently in the mainstream financial press because it is the principal tool used by wholesale vendors of stock to sucker the ordinary retail investor into buying at market tops. On a 10-year chart for the DJIA it broke new highs last year, an event that was accompanied by great fanfare in the media, who have since been trumpeting the glorious achievements of the "bull market" ever since. The problem is that the Dow Jones Industrials is not a true representation of the state of the market as a whole, being made up as it is of a narrow basket of very high cap stocks.

The real stock market is shown much more accurately and faithfully by the relatively neglected S&500 index, the chart for which tells a very different story. On its 10-year chart we can see that it has definitely not broken out to new highs, and is instead buckling beneath the heavy resistance approaching its 2000 highs, with which it is danger of forming a Double Top.

If you factor in the decline of the dollar over the past 4 years, the gains during this period look nowhere near as impressive. The 10-year chart of the S&P500 chart plotted against the Euro exposes the ugly and sordid reality that the so-called bull market of the past 4 years is nothing more than an anemic bear market rally, that has taken the form of a bearish Rising Wedge - and some mighty unpleasant stuff is likely to hit the fan once it breaks down from this pattern, which it is now close to doing........................

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well to those that maybe interested in this issue, Im aware of a seminar that you might want to look at:

Seminar: Rule of Law and Economic Freedom

Judge Vichai Ariyanuntaka of the Supreme Court will speak on Rethinking Intellectual Property Rights Enforcement at a seminar on The Importance of Rule of Law in Economic Freedom on May 21st at the Arnoma Hotel, Bangkok. The Keynote address will be followed by a panel discussion with prominent panellists from United Kingdom, India and Thailand. The session will be moderated by Dr. Thitinan Pongsudhirak.

This seminar will look at the role of Rule of Law in safeguarding the proper and efficient functioning of market economies. The seminar will be in English with Thai interpretation. Seats are limited. For reservations call Ms. Kaweeworn on 02 365 0570.

theres also a website, but I think Im not suppose to post URL :o .... the programme can be requested through that phone number I believe.....

Its free of charge......and open to public...but i think mainly those invited are corporates, government and media people.

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the above is definatly a sign of financial crisis ready too boom.but its reasons are far from thailand.

the USA and the europeans are reporting the same problems in real estate and those indicators are just building up.

the US is the larges consumer market in the world and if they go down everyone else will follow.

I am realy concerned with the US economy as the indicators are that they have a housing recession, an auto recession, a manufacturing recession, and a real investment recession already present. the domino effect is building up..

Sorry for sounding so doomsday but I am realy worried about this.

the impact on thailand will be felt when those export to us and europe will go down and forign investors hungry for cash will try and liquidate at the same time.

Yes and as the Dow keeps on raging ahead and the Thai market breaks through the 700 again -

we should bear in mind.......................................................:-

The Dow Jones Industrials Average features prominently in the mainstream financial press because it is the principal tool used by wholesale vendors of stock to sucker the ordinary retail investor into buying at market tops. On a 10-year chart for the DJIA it broke new highs last year, an event that was accompanied by great fanfare in the media, who have since been trumpeting the glorious achievements of the "bull market" ever since. The problem is that the Dow Jones Industrials is not a true representation of the state of the market as a whole, being made up as it is of a narrow basket of very high cap stocks.

The real stock market is shown much more accurately and faithfully by the relatively neglected S&500 index, the chart for which tells a very different story. On its 10-year chart we can see that it has definitely not broken out to new highs, and is instead buckling beneath the heavy resistance approaching its 2000 highs, with which it is danger of forming a Double Top.

If you factor in the decline of the dollar over the past 4 years, the gains during this period look nowhere near as impressive. The 10-year chart of the S&P500 chart plotted against the Euro exposes the ugly and sordid reality that the so-called bull market of the past 4 years is nothing more than an anemic bear market rally, that has taken the form of a bearish Rising Wedge - and some mighty unpleasant stuff is likely to hit the fan once it breaks down from this pattern, which it is now close to doing........................

Phew! You must be reading the same books as me. I also find the Baht's strength surprising given matters parochial and expect a hedge fund inspired collapse at some point. :o:D

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Govt's revenue collection missed target

May 9, 2007 : Last updated 03:37 pm (Thai local time)

The Nation

The government's net revenue collection from October to April missed its target by Bt6.93 billion, or 1 percent, due partly to delays in revenue expected from state enterprises in April, the Finance Ministry said Wednesday.

as if further proof is necessary .......................

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The "little dirty music of the crisis" is becoming louder.

Here is the daily harvest :

-Tax revenues lower than expected : in 7 month (fiscal year) -1 % compare to target.

But the 2 points interesting : the trend is much worse. In april , it's -9 %...

And VAT collection : -3.5 % compare to target. VAT is one of the best indicator regarding the "health" of the economy.

However, and like always, the gvt is in denial. The spokeman said that for the whole year (september, end of current fiscal year), the "government might miss that target by 1-1.5 per cent. But he said it would not be a serious issue matter."

Again, it's a gross mistake. The first semester was still okay. But the second will take the "hard landing" in full face.

To think that the situation of the economy could improve until september is not even whisfull thinking : it's just plain moon thinking.

So the budget deficit is likely to be higher than the forecast.

http://www.nationmultimedia.com/2007/05/10...ss_30033817.php

-CPF plunges to Bt1.14-bn loss in Q1

Compare to profit of 550 million in last year's first quarter.

CPF is an "emblematic" thai company. And a very good "thermometer" of the economic situation. The one on the ground, for the day to day life of thai people (69 % of turn over is made on the domestic market).

http://www.nationmultimedia.com/2007/05/10...ss_30033833.php

See you tomorrow for the next bad news... :o

Edited by cclub75

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this won't help.....nothing like newly minted graduates going nowhere.......

Jobs to get scarce as industrial activity dips

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About 700,000 new graduates face bleak prospects in finding jobs as the worst economic conditions in 10 years force many manufacturers to reduce output.

A survey by the University of the Thai Chamber of Commerce (UTCC) released yesterday shows that the industrial sector's revenue is projected to slump by 34 per cent in the second quarter this year, due to negative factors including rising oil prices, political instability and an economic downwards trend expected to trigger an unemployment problem.

http://www.nationmultimedia.com/2007/05/04...es_30033359.php

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An important one today.

Central bank may end capital controls

(dpa) - The Bank of Thaliand may lift its controversial capital controls after acknowledging that they have failed to slow the appreciation of the baht currency against the dollar, BoT governor Tarisa Watanagase said Thursday.

Ms Tarisa acknowledged that huge capital inflows into Asia had caused the baht to appreciate 4.3 per cent against the dollar already this year, after appreciating more than 8 per cent against the greenback in 2006.

http://www.bangkokpost.com/breaking_news/b...s.php?id=118658

Why ? First, BOT told us that a THB under 35 would be the end of the thai exportations.

Then, they told us it was the fault of :

-foreign speculators

-then the thai exporters themselves

-and the final straw : some thai commercial banks (that were selling their USD) !

Miss Doctor Tarisa was standing, against the wind, with pride (but without prejudice). It was beautifull.

Of course, in real life, we had some casualties and secondary effects : THB continues to increase despite the capital control, panic in stock exchange, fear among foreign investors, an hilarious dual rates for currency exchange (on and off shore), global confusions, and eventually less money coming in and some disorders in the economy.

So basically, Tarisa tells us today... that she was 100 % wrong, all the way, right from the begining. It's astonishing.

And, I believe, this is a serious sign of weakness : they aknowledge that the capital control was like a brake on foreign investments and for the whole thai economy. And because the situation is getting bad, they have to make this U-turn.

Poor Miss Tarisa. Must be really painfull... :o

Edited by cclub75

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An important one today.

Central bank may end capital controls

(dpa) - The Bank of Thaliand may lift its controversial capital controls after acknowledging that they have failed to slow the appreciation of the baht currency against the dollar, BoT governor Tarisa Watanagase said Thursday.

Ms Tarisa acknowledged that huge capital inflows into Asia had caused the baht to appreciate 4.3 per cent against the dollar already this year, after appreciating more than 8 per cent against the greenback in 2006.

http://www.bangkokpost.com/breaking_news/b...s.php?id=118658

Why ? First, BOT told us that a THB under 35 would be the end of the thai exportations.

Then, they told us it was the fault of :

-foreign speculators

-then the thai exporters themselves

-and the final straw : some thai commercial banks (that were selling their USD) !

Miss Doctor Tarisa was standing, against the wind, with pride (but without prejudice). It was beautifull.

Of course, in real life, we had some casualties and secondary effects : THB continues to increase despite the capital control, panic in stock exchange, fear among foreign investors, an hilarious dual rates for currency exchange (on and off shore), global confusions, and eventually less money coming in and some disorders in the economy.

So basically, Tarisa tells us today... that she was 100 % wrong, all the way, right from the begining. It's astonishing.

And, I believe, this is a serious sign of weakness : they aknowledge that the capital control was like a brake on foreign investments and for the whole thai economy. And because the situation is getting bad, they have to make this U-turn.

Poor Miss Tarisa. Must be really painfull... :o

I most welcome this news. The comedy dual rates had many side effects. First it meant that anyone taking say 1 million Baht to Singapore could convert the money there have a holiday fly back and convert the money back into Baht having a free holiday to boot - (I would add that the stress of doing this made it not worth the bother and serial flyers would soon have attracted attention from customs). Secondly the sort of foreign money they wanted probably dried up to a degree replaced by hedge fund speculators who could afford to play the long game until exchange controls were lifted .

So having admitted trying to keep a lid on the Baht had failed what does Miss Tarisa think will happen when controls are lifted? Maybe perhaps that the Baht may rise a bit but foreign investment would help prop up a faltering economy? I suspect that speculators will seize on this as a sign that the economy is about to hit the buffers and sell Baht like it's going out of fashion. For us mere mortals at least the end of the capital controls will mean that we can hedge Baht assets again by spread betting on it's depreciation (Something not possible with the Capital controls in place).

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Thai car sales drop 7.3 percent in April

Thai car sales continued to slide in April, falling 7.3 percent from the same month last year, but automakers were hopeful of a boost as new models are released, the industry said in a statement Friday.

Total vehicle sales in April registered at 49,658 units, dropping in every category from last year, Toyota Motor's Thai unit said in a statement.

Sales of passenger cars dropped 8.2 percent, one-tonne pickups fell 5.6 percent, and commercial vehicles were down 2.5 percent.

"Although April car sales dropped for the fourth consecutive month, the fall is likely to improve as new models enter the market and lower interest rates stimulate consumer spending," the statement said.

However, Toyota predicted that sales would drop again in May, which is the back-to-school period in Thailand when families spend money on tuition for the new academic year. May also marks the start of the rainy season, when sales are typically slow.

For the first four months of the year, vehicle sales totaled 187,928 units, down 15.9 percent from same period last year.

Japanese auto giants Toyota, Isuzu, and Honda accounted for 74.2 percent of the market, the statement said.

Toyota said it still expects sales this year to reach 700,000 units, up 3.0 percent from 2006.

Source: The Nation - 11 May 2007

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Thai car sales drop 7.3 percent in April

Thai car sales continued to slide in April, falling 7.3 percent from the same month last year, but automakers were hopeful of a boost as new models are released, the industry said in a statement Friday.

"Although April car sales dropped for the fourth consecutive month, the fall is likely to improve as new models enter the market and lower interest rates stimulate consumer spending," the statement said.

In march, we had the glorious 28th Bangkok International Motor Show... No effect.

Now, what a spine chill, we are going to have "new models". Combined to interest rates (no big change in MLR, despite the decrease of BOT), that should lift up the market.

When they will understand that it's not a matter of color or design of cars : it's a problem of solvability.

Every thai would like to buy a BMW : they just can't afford it.

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An important one today.

Central bank may end capital controls

(dpa) - The Bank of Thaliand may lift its controversial capital controls after acknowledging that they have failed to slow the appreciation of the baht currency against the dollar, BoT governor Tarisa Watanagase said Thursday.

Ms Tarisa acknowledged that huge capital inflows into Asia had caused the baht to appreciate 4.3 per cent against the dollar already this year, after appreciating more than 8 per cent against the greenback in 2006.

http://www.bangkokpost.com/breaking_news/b...s.php?id=118658

Why ? First, BOT told us that a THB under 35 would be the end of the thai exportations.

Then, they told us it was the fault of :

-foreign speculators

-then the thai exporters themselves

-and the final straw : some thai commercial banks (that were selling their USD) !

Miss Doctor Tarisa was standing, against the wind, with pride (but without prejudice). It was beautifull.

Of course, in real life, we had some casualties and secondary effects : THB continues to increase despite the capital control, panic in stock exchange, fear among foreign investors, an hilarious dual rates for currency exchange (on and off shore), global confusions, and eventually less money coming in and some disorders in the economy.

So basically, Tarisa tells us today... that she was 100 % wrong, all the way, right from the begining. It's astonishing.

And, I believe, this is a serious sign of weakness : they aknowledge that the capital control was like a brake on foreign investments and for the whole thai economy. And because the situation is getting bad, they have to make this U-turn.

Poor Miss Tarisa. Must be really painfull... :o

Well, actually, it was foreign speculators and then it was exporters themselves (both foreign and Thai) and then it was a some of the Thai banks. The capital controls closed down opportunities for speculators in the debt markets, but opened up arbitrage opportunities for others via the offshore/onshore markets. As opportunities arose, different groups that could benefit, did. Now, with the 100% hedge requirement in place, the capital controls are no longer needed.

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I got confused. ..so, does that mean the baht will get stronger or will it get weaker?

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Finance Minister says Thai economy will rebound after the general election

Minister of Finance says the Thai economy will rebound in the next 2-3 months due to the general election at the end of the year in addtion to the government’s mega-projects, including the electric train route-extension project.

Minister of Finance Chalongphob Susangkarn (ฉลองภพ สุสังกร์กาญจน์) delivered a special lecture on next year’s economic policy, saying that investor confidence will rise again after the general election and the overall economic situation will be improved. However, the export of garments is expected to decrease by 19%.

As for the government’s financial policy, the minister says the Ministry is able to relax its policies so as to bolster the economy. Both the relaxed financial policy and the continuously decreased inflation rate will help strengthen the economy.

The minister adds that this year's fiscal deficit and the state's collection of taxes which is lower than expected might make the government consider launching more measures to stimulate the economy.

Source: Thai National News Bureau Public Relations Department - 11 May 2007

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