Thai banks strong, can weather economic uncertainty - central bank

[Brierley]

15 minutes ago, AlfHuy said:

I spoke last week with a lady, Masters agree, working as a teacher in a Government school.

She was more than depressed.

We spoke quite a while and she opened up a bit.

She was sucked into the quick money/quick rich scheme.

One of her friends made good money, trading Bitcoin.

She started the same and made some money. Her"ex-boyfriend gave her money and some of his friends too (to invest).

Initially all went fine. Later came the shock. She lost, tried to hedge the losses and lost everything.

Now, her ex and friends wanted the cash back, NOW.

One of the friend's father was a high ranking police officer.

Some people came around to threaten her. (as she told, 4 guys came with a gun to her flat).

 

She had to sell her land and was locked up. (Really?)

She came out of prison end last year because of Royal pardon.

 

I don't know if I can believe this story or not but she came across as telling the truth.

 

She had sold of her last piece of land and tried to recover some of her losses. Went again to "play" with Bitcoin.

We all know where this has gone over the last few weeks.

Now on heavy depression medication.

 

How many are out there, gambling, borrowing money they never can pay back.

How many want to impress the friends and neighbours with the new "fully funded" car.

How many are in the hands of the "loan mafia".

 

I know one girl who borrowed some cash from a shady Indian. She worked at a massage shop.

The guy turned up every day to get some money back.

She was just able to re-pay the interest.

Now, everything closed for ages, she has gone undercover.

 

There are 10s of thousands out there who do not appear in the statistics.

They have borrowed money from friends, family, colleagues, mafia.

Those are non-performing-loans and they run into Billions.

These will never appear anywhere in a statistic.

 

How many high rising buildings are just finished or just under construction. Who pays for it?

Banks are funding those projects and probably got already cold feet.

Prices are falling (negative equity).

Nobody buying off plan.

Nobody paying deposits which again would fund  to continue construction.

Half finished buildings doesn't help nor the banks nor the one, running the project.

 

They continue to build, hoping on a miracle.

Forget about. There are already too many empty buildings.

Many Thais were sucked into the "become rich" dream.

Buy a few apartments (no or very little own capital) and once finished, sell it with a profit (which profit and to whom?) or rent it out and the apartment pays itself through rental income.

There is nobody coming to rent. 

To be competitive, location must be right, nicely furnished and competitive price.

Many have not the funds to nicely furnish or lower the price because they are up to their throat in debt.

Half empty building: Not enough people to pay for the maintenance costs.

What will happen? No security, no cleaners, no maintenance, pool not cleaned etc.

Building quickly looking old and not attracting new potential buyers.

 

It's definitely a renters market and by far, we haven't seen the real pain yet.

 

Stay safe.

A few thoughts:

 

I never know what to believe when local people tell me their tales of woe. Certainly many of them are true but I never know how many are embellished for my benefit and how many are people looking for sympathy and handouts. Genuinely, I don't know.

 

If the loan shark industry were legal and regulated it could be reported upon, as things stand it's illegal so we all have to guess what those numbers might be. I wouldn't know where to begin with that.

 

It's easy to get overwhelmed by the doom and gloom of it all so it's important to remember the things that are going well or at least OK, as well as those that are not. Exports just had their best month ever, that is people and businesses making things and selling them overseas...best month ever. Officially, NPL's are 3.1%, that means there's 96.9% that are performing close to normally, that's business and people who are making and earning and paying their way.

 

 

[Logosone]

On 5/20/2021 at 5:58 AM, Brierley said:

A few thoughts:

 

I never know what to believe when local people tell me their tales of woe. Certainly many of them are true but I never know how many are embellished for my benefit and how many are people looking for sympathy and handouts. Genuinely, I don't know.

 

If the loan shark industry were legal and regulated it could be reported upon, as things stand it's illegal so we all have to guess what those numbers might be. I wouldn't know where to begin with that.

 

It's easy to get overwhelmed by the doom and gloom of it all so it's important to remember the things that are going well or at least OK, as well as those that are not. Exports just had their best month ever, that is people and businesses making things and selling them overseas...best month ever. Officially, NPL's are 3.1%, that means there's 96.9% that are performing close to normally, that's business and people who are making and earning and paying their way.

 

 

I think going overboard with positivity is just as dangerous as going overboard with doom and gloom.

 

The markets are always going to follow a trend of exuberance or fear at some point, bull or bear. However it is in the unexpected where you find certainty. It will always happen. Question is when.

 

The only thing that differentiates trading and investing from gambling is that the former two are based on knowledge, facts and insights, trends and other pieces of information that someone who bets on a roll of a dice does not have. 

 

And banks are masters in participating in these trading and investing activities on their own account. However, they too can get it badly wrong. We have seen this in the past everywhere in the world from Thailand to USA to UK.