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[NOKIA6969]

I'M PROPERTY AGENT ORIGINALLY FROM CENTRAL LONDON.
(I LEFT TO COME HERE AS THIS DEBT PROBLEM HAS BEEN ON THE CARDS (NO PUN INTENDED ) FOR SOME TIME, IN FACT IT'S AMAZING IT HASNT HAPPENED SOONER)
I DONT THINK THAILAND WILL BE AS AFFECTED AS MANY ON THIS SITE SEEM TO THINK.
THE PROBLEM IN THE WEST HAS BEEN EQUITY BACKED PERSONAL DEBT THAT HAS BEEN SOLD IN AN ALMOST CRIMINAL WAY. BANKS FROM THE WEST HAVE FORCE FED LOANS AND CREDIT CARDS AND HUGE MULTIPULS ON MORTGAGES FOR YEARS NOW. (CREDIT CARD DEBT HASENT EVEN STARTED TO UNWIND YET!)
YOUNG EARNERS GET THEMSELVES UNDER THE YOKE OF DEBT VERY QUICKLY INDEED, WITH THE SO CALLED SECURITY OF INSURANCE IN CASE OF THE UNFORSEEN!
THAILAND JUST DOSEN'T HAVE THE SAME ISSUES!
IF YOU LOOK ACROSS THE BANGKOK SKYLINE, WHAT PERSENTAGE OF RESIDENTIAL HOMES DO YOU THINK BELONG TO THE BANK?
(LETS FACE IT, IF YOU HAVE A MORTGAGE THE BANK OWNS YOUR PROPERTRY!
EG YOU HAVE A HOUSE WORTH 1,000,000 AND MORTGAGE FOR 600,000 - A YEAR DOWN THE LINE YOUR FORCED TO SELL AT 600,000, WHO DO YOU THINK GETS THE CASH?)
SO OF THE SMALL PROPORTION OF FINACED RESIDENTIAL PROPERTY HERE, WHAT DO YOU THINK IS THE RATIO OF BANK DEBT TO EQUITY?
I WOULD ARGUE THAT IN BOTH CASES THE FRACTIONS ARE TINY COMPARED TO THE WEST. 90% MORTGAGES ARE A VERY RESENT THING HERE. WITH 50% BEING THE NORM
THE RESIDENTIAL MARKET COULD DROP 50% AND AT LEAST 95% OF OWNERS WOULD BE ABLE TO SIT IT OUT. NOT THE CASE IN THE WEST AT ALL!
BASICLY THE BANKS HERE HAVE ACTED MORE LIKE PAWN SHOPS THAN BANKS SINCE 97. (QUOTE FROM A MEMBER OF LARGE BANKING FAMILY HERE)
I BELIVE THE BIGGEST PROBLEM WILL BE THE DROP OFF IN TOURISM AND EXPORTS.
WESTERN BANKS HAVE HAD IT COMING FOR AGES, ITS JUST A SHAME THAT WE ARE BEING HELD TO RANSOME BY THEM. BAILING THEM OUT WILL JUST DRAW OUT THE ENEVITABLE
THE CHINESE ARE THE SHREWEDEST, MOST INDUSTRIOUS NATION, THE NEXT CENTURY WILL BE THERE GROWTH STORY.
WHEN THEY START TO GO ON HOLIDAY , THEY WILL COME HERE, ITS LOGISTICALLY ENEVITABLE.
ADD THAT TO PRICES THAT HAVE BEEN HAMMERED BY POLITICAL UPHEAVAL AND ALREADY REPRESENT THE BEST VALUE IN ASIA. I THINK LONG TERM, YOU CANT GO WRONG HERE. BUT I WOULDN'T LIKE TO BE A DEVELOPER TRYING TO RAISE FINANCE TO BUILD A SKYSCRAPER AT THE MOMENT!
DOMINIC
AKANDO REAL ESTATE

[samuibeachcomber]

If you live and work in thailand,have a thai family.are retired here,then of course you care about thailand and its people.No one knows what really will happen next year,but it certainly does n't look good.Probably many thai's out of work,an increase in crime,robberies etc,and us farang will be soft targets.Tourist areas will suffer and locals working in resorts etc will find themselves unemployed.Yes probably the least affected areas will be the small villages in rural thailand "when you've got nothing you've got nothing to lose,and the strong family ties and commitments will see them through.

The worst to be hit may well be farangs here on work visa/permit and people on a shoe string.The real crazy thing that i do not understand is why western governments still believe that by reducing interest rates the can kick start a recovery.This times its gone too far,there is now a mindset of hunker down and ride this one out.Reducing interest rates this time will not encourage people to go out and spend.This time round it would be better to raise rates to encourage people to save,keep inflation lower,raise taxes to pay for the massive debts govts. have now got and in 2 years get economies in the black,then it will be time to manufacture again,increase employment,and people will feel like spending again.Zero interest rates by greenspan in the USA led to this mess,pools of money with nowhere to go,hence the creation of sub prime mortgage packages etc etc.Just my 2 cents worth...........its all i've got!

[rawbkk]

as for the guarantee for bank accounts, according to the government here there is a blanket guarantee for savings accounts here too, at least until 2011 - so it's the same as in europe.


...keep in mind this rules only for thais...farangs wont get back a single baht if the bank crashes!!!
...but this will tell you your bank only if you ask...either bangkokpost or other media will report about this fact!!!

cheers...

[TAWP]

Reading this thread made my eyes bleed...new members that flame to their hearts delight, people posting in all caps, nested quoting to 10 levels or more...

[lunchbox]

Have any of you seen 'Zeitgeist - Addendum'? If so, how would you compare it to the current situation...why bother bailing out financial institutions when it just leads us down a path to the current state of affairs?

[Huey]

Well I for one will be making several exporters MUCH more happy if the baht hits 38+ too the dollar, as I can afford to buy more from them at that rate.

Also I can take atvantage of the slide to pay off my condo. a Jump from 34 to 37 baht to the dollar saves me like $32,000 us on the total cost.

That buys allot of Kanoms ya know...
TANK TANK I SAY!!!!

[meelousee]

chrislarsson, on 2008-10-31 14:20:31, said:

It seems like the banking sector learned its lessons from the crisis in '97 and are in good shape.
Finances on a national level are also quite healthy. The foreign reserve is now greater than $100 billion, among the largest per capita in the world.

Thailand forigen reserve is just under $37 billion not 100
That is unless they just happened to make some $63 billion in the last 6 months

[rayw]

Martin, on 2008-10-31 11:17:37, said:

".......the government must attempt every possible concrete measure to drive the economy ahead in the remaining two months of this year."


This is a time when the Government should retrench. Cut back on public spending and stop any new costly developments.
Closed firms pay no profit taxes. Workers whose jobs have become redundant pay no income tax. The Government's income is on the way down.

What a government might do when going into a short recession of the variety that we have previously seen in our lifetimes would be the wrong response to what is coming now.

IMHO the worst thing you can do is cut back on Government spending at this time. This causes more unemployment and thus less buying power and thus less products are sold and more unemployment follows and so on like a chain reaction i.e. it FEEDS a recession. You need to keep public spending at its current level or even increase it a little as long as it does not increase imports of goods required for such public projects and adversely affect the country's balance of payments . So generally speaking road construction and general public construction will create jobs, create a hopefully better environment (better roads etc), not adversely affect the country's balance of payments and this not make the recession worse. Sensible and well thought out public spending should be a big yes right now and has shown to work in the past in many countries. The way I see it in my lifetime is that it is not a policy encouraged much in right wing corporate run countries where they are glad to bring the labour force to its knees to exploit cheaper labour which is despicable, immoral and anti-social. It is though often employed carefully and successfully in more intelligent politically centre run countries where they have no greed driven hidden agendas.

As to unemployment well my wife's Laundry and friends of mine who run restaurants etc have a job getting staff who are reliable and worth employing. It seems that there must be full employment down here in Chonburi and Rayong as nobody seems concerned at keeping relatively well paid jobs as most of my friends pay higher than standard wages too and give more days off than the norm generally. When Thai staff just suddenly do not turn up at work saying they have taken a few days holiday without even asking beforehand then they of course should lose their jobs and rightly so. We need to see a lot more loyalty and respect for jobs (okay I have always agreed that family comes first but your job a close second) and for employers to ensure in return their staff are looked after well, paid at least the going rate for the job or more, with at least one day off per week and improved working conditions. Any staff who turn up just when they want to and take unauthorised leave need sacking immediately IMHO as they would be in the west AND a lot of Asia too. Maybe some good will come of a bad bad thing in that rising unemployment may make Thai staff more responsible in their jobs as long as it does not make Employers bad in their role by under paying and exploiting the situation, I hate folk who do that to other people, treating them as a resource rather than living breathing human beings. Sorry for rant but I hate extreme capitalism and greed (and extreme Socialism and over the top control) which has led to the situation we now all find ourselves in, and mostly being very sadly suffered by those who were innocent of the greed and incompetence that has caused it. What the World really needs now is more caring and thoughtfulness about it's citizens, and controls and restrictions on those who do not care about anyone other than themselves. Until we do we will continue to have these unnecessary problems causing so much suffering in this blatantly sick selfish World we now live in where Money is now the God.

Edited by rayw, 2008-10-31 15:11:12.

[lovinglife]

Samui,

The problem with your suggestion that interest rates should be raised is the fact that you would drive most small businesses straight into bankruptcy. They rely heavily on their overdraft facility, especially in hard times when their customers take longer and longer to pay their bills. I agree that reducing rates alone will have little effect now on the recession, but used in conjunction with other stimulus methods we can effect a recovery relatively quickly, next summer all will be starting to look good IMHO.

[thailandpeter2]

rawbkk, on 2008-10-31 14:33:31, said:

as for the guarantee for bank accounts, according to the government here there is a blanket guarantee for savings accounts here too, at least until 2011 - so it's the same as in europe.


...keep in mind this rules only for thais...farangs wont get back a single baht if the bank crashes!!!
...but this will tell you your bank only if you ask...either bangkokpost or other media will report about this fact!!!

cheers...

doesn't really matter, as i believe that in the end nobody will get back any money anyway if it comes to that....maybe some influental customers, but not the majority...call me a cynic...

[PeaceBlondie]

TAWP, on 2008-10-31 14:33:32, said:

Reading this thread made my eyes bleed...new members that flame to their hearts delight, people posting in all caps, nested quoting to 10 levels or more...

Just because they are all caps does not mean they have to be regular size.

[peekint]

Martin, on 2008-10-31 11:17:37, said:

".......the government must attempt every possible concrete measure to drive the economy ahead in the remaining two months of this year."

That could well make matters worse.

If I am driving in 2-wheel drive down a little 'fair-weather short cut' unpaved track ( such as we have around her), and the heavens open and it pisses down like a cow onto a flat rock (as happens round here) and then I see a puddly patch ahead, I do not drive ahead. I stop and engage 4-wheel drive and move into the puddly patch carefully. Then, if it starts getting worse, I back out and leave the short cut and take the long, tarmacced way round.

This is not going to be a temporary recession. America is not going to be back to importing things it doesn't need (like more Isuzu pickups, built in Thailand) in a couple of quarters. So it is no time to "attempt every possible concrete measure to drive the economy ahead..............."


This is a time when the Government should retrench. Cut back on public spending and stop any new costly developments.
Closed firms pay no profit taxes. Workers whose jobs have become redundant pay no income tax. The Government's income is on the way down.

What a government might do when going into a short recession of the variety that we have previously seen in our lifetimes would be the wrong response to what is coming now.

I believe the above is a quote from Herbert Hoover c 1929

[samuibeachcomber]

lovinglife, on 2008-10-31 15:02:55, said:

Samui,

The problem with your suggestion that interest rates should be raised is the fact that you would drive most small businesses straight into bankruptcy. They rely heavily on their overdraft facility, especially in hard times when their customers take longer and longer to pay their bills. I agree that reducing rates alone will have little effect now on the recession, but used in conjunction with other stimulus methods we can effect a recovery relatively quickly, next summer all will be starting to look good IMHO.

ok so what other things could be done to help small business(if interest rates could be kept higher and i must admit i have a vested interest for higher rates)? and i admit the likelyhood of rates going higher are zilch.

[gbswales]

I am appalled and ashamed of many of the comments being made here - such as "why should I care". It is this attitude which is the root cause of the economic downturn - selfishness and greed. My late father, who only dabbled in the stock market late in life, was appalled to find out that people only invested money to make as much quick profit as they could. They didn't care about the company they were investing in, or have any thought for the long term good of it - just invest, divest and try to get rich. There is only so much real "wealth" in the world and natural laws dictate that if people take more for themselves then others get poorer. In modern times we have been building cities on sand by allowing the banks and governments to generate non-existant wealth to buy their way out of problems. Anyone who has ever really been in debt knows that there are only two ways to get out of it (1) take the pain yourself and work out ways to repay it or (2) pass the pain onto others by going bankrupt - I dont need statistics to prove what most people do nowadays.

People who complain about corrupt, self-interested politicians are just being hypocrytical - Politicians are not the creators of society but a reflection of it. PAD can arugue the morality of Thaksin but not question their own? The poor people in the country are doing exactly what the rich people in the city do - thinking only about themselves.

A kind elderly person I once knew said this about how you should measure yourself in life - by believing that "The person I stand closest to, at any moment in time, is always more important than me"

[ericjt]

I'd suggest that if there are people or groups who pull the strings from behind the curtain, then they are hosing us all over, one group at a time. And if there are no Illuminati or other shadow groups in control, then it's the market, but one way or another, we're all getting hosed. First it was the USD holders. Now it's the people holding every other major currency, with AUD leading the way. And let's not forget people trying to preserve their savings in non-currency assets like oil, precious metals, real estate, businesses, commodities, and other non-currency stores of value. We're all getting our turn in the barrel.

I'd also like to suggest that we all do whatever we can to help the situation here in Thailand and elsewhere. When business is good, life is generally better for everyone. And when business is bad and people are suffering, almost everyone's quality of life eventually gets hurt. The temporary gains or advantages enjoyed by people with savings who are able to buy things more cheaply for a while are eventually overshadowed (in many? or most? cases) by blowback from the suffering of millions of their neighbors.

I'm not a saint and I'm not above shopping for good deals if they're out there, but I doubt that many of us will come out ahead in the long run if the worldwide depression that seems to be coming actually arrives.

I'd appreciate any comments or suggestions.

[ray23]

Zorro nailed it this is not forever.

Me I would rather ride this out here after six years I know I could cut back a lot and still be OK.

Thais surviving nothing personal folks if things get tough I would much rather rely on my wife here then anyone I know. That girl can climb a tree and come back with food

I have had to tighten the belt now for three years, to be honest I still have a good life and plenty of more room to go if I have to.

As for us if we can might be chance to help. Going to be a lot more craftsman around with nothing to do. Got some projects that need o be done. Now might be the time.

I have tried to do that with the housekeepers village when people lose work and need to earn few baht. Pay them the same dailey wage they get from the contractors, buy the material myself. The work is done at the same qaulity for less, but the worker gets the same.


Takes a bit of patience though, I have always told them if their boss calls go work for him, mine will wait till they have time. Took three guys and a month to get the interior of the hosue painted room by room. Cost for labor was around 1,000 baht.

But this is Udon not a tourist area, things there may be very different. My point being if you can help now would be a good time. If you can't, you can't The one thing I normally don't do is give money, for the sake of giving money. But, thats me.

There is nothing we can do for the government but we might able to help a neighbor or two.

Theft being up probably what would you do to feed your children?


Where Issan will feel it will be in two ways. no money come from whatever the family member was doing that let them send it home. Secondly there will be more mouths to feed on the farm.

The rice farmers, corn farmers and rubber farmers are already after the government for money. They will probably ge on pape anyway they usually do. The rubber farmers are talking about pulling out trees. I hope they are talking about trees that are no longer productive. To destroy a rubber planatation because the price will be down for a few years is insane. All to drive the price up in a marke that is shrinking.

How soon people forget it wasn't that long ago that the cost of these items were sky high because oil was high. It will be high agian. I don't like pay cuts either but I have done some awfully low paying jobs in my simple becaue some income is better then no income.

You know we could argue about this and that but the reality is the entire world is in this mess. There will be difficult times ahead for many people. Who was right or wrong or it could have been done better if, really doesn't matter much anymore.

[chrislarsson]

meelousee, on 2008-10-31 14:55:26, said:

chrislarsson, on 2008-10-31 14:20:31, said:

It seems like the banking sector learned its lessons from the crisis in '97 and are in good shape.
Finances on a national level are also quite healthy. The foreign reserve is now greater than $100 billion, among the largest per capita in the world.

Thailand forigen reserve is just under $37 billion not 100
That is unless they just happened to make some $63 billion in the last 6 months

What is your source to this number?

According to Wikipedia it was 103,500 $ in Oct.
http://en.wikipedia.org/wiki/List_of_count...change_reserves

[Leethom]

The advantage of a strong baht is that it allows wealthy Thais to invest in depressed foreign markets for substantial profit.When the baht weakens (which it will), it allows the wealthy to return foreign currencies for higher profits in Thailand.Of course, with a strong baht exports and tourism slow down, and Thai people lose their jobs and businesses close.About a month ago I was told the Bank of Thailand had 100 billion US dollars to keep the baht strong.I was also told the Minister of Finance advocated letting the baht go to 38 baht to the US dollar, to make exports more attractive, but was overruled.Wealthy Thais have the power to protect their interests.

[Felt 35]

Quote

I am appalled and ashamed of many of the comments being made here - such as "why should I care". It is this attitude which is the root cause of the economic downturn - selfishness and greed. My late father, who only dabbled in the stock market late in life, was appalled to find out that people only invested money to make as much quick profit as they could. They didn't care about the company they were investing in, or have any thought for the long term good of it - just invest, divest and try to get rich. There is only so much real "wealth" in the world and natural laws dictate that if people take more for themselves then others get poorer. In modern times we have been building cities on sand by allowing the banks and governments to generate non-existant wealth to buy their way out of problems. Anyone who has ever really been in debt knows that there are only two ways to get out of it (1) take the pain yourself and work out ways to repay it or (2) pass the pain onto others by going bankrupt - I dont need statistics to prove what most people do nowadays.

People who complain about corrupt, self-interested politicians are just being hypocrytical - Politicians are not the creators of society but a reflection of it. PAD can arugue the morality of Thaksin but not question their own? The poor people in the country are doing exactly what the rich people in the city do - thinking only about themselves.

A kind elderly person I once knew said this about how you should measure yourself in life - by believing that "The person I stand closest to, at any moment in time, is always more important than me"

Very well said.

[chrislarsson]

Leethom, on 2008-10-31 16:22:48, said:

The advantage of a strong baht is that it allows wealthy Thais to invest in depressed foreign markets for substantial profit.When the baht weakens (which it will), it allows the wealthy to return foreign currencies for higher profits in Thailand.Of course, with a strong baht exports and tourism slow down, and Thai people lose their jobs and businesses close.About a month ago I was told the Bank of Thailand had 100 billion US dollars to keep the baht strong.I was also told the Minister of Finance advocated letting the baht go to 38 baht to the US dollar, to make exports more attractive, but was overruled.Wealthy Thais have the power to protect their interests.

The reason Thailand and many other Asian countries have such large foreign reserves is too keep their currencies low...not the opposite. To lower the baht Bank of Thailand would have to buy more dollars...which is probably not a good idea as the reserve is too large already and the dollar is likely to slide in the long term.

Btw, many wealthy Thais are in the export industry and benefit from a low baht.

Naturally the Ministry of Finance desire a lower valued baht, as it makes their life easier. But this may not be in the interest of the country at large. That is why it is believed that central banks and governments should be kept independent.

[eastlight]

mrjohn, on 2008-10-31 12:38:51, said:

I am no expert but it seems to me that the UK and European economies rapidly caught the cold from the US because their financial and lending institutions were interdependent and overstretched.
If Thailand, as we are so often told, is an export driven economy it stands to reason that the effects of what looks like being a deeper than average recession will only start to bite when the markets for those exports dry up. This will inevitably take a little longer to filter through. In this context the statement:

"in the fourth quarter of this year found that the US economic crisis had not adversely affected the Thai economy."
is utterly ridiculous

To lamely chase the US dollar and thus make exports uncompetitive seems fairly typical of the "stick our heads in the sand" mentality of many members of the Thai establishment.
Quite simply Thai products including tourism will be too expensive to customers in the outside world whose spending power is threatened by unemployment and falling property prices.
Something has got to change here.

I'm always surprised that comments regarding the tourist industry are few and far between at the moment. In the past, and particularly during the 1997 crisis when I believe the 'Amazing Thailand' promotion was put into full swing, the tourist industry was the saviour of the country.

The Thais appear to be completely oblivious to the fact that unemployment and the fear of unenemployment is increasing in the countries from which the tourists originate / airfares are increasing / and above all, especially in the case of us Brits, the exchange rate has tumbled.

I predict that this year's 'High Season' is likely to be a disaster as the reduced number of tourists stay for shorter periods and spend less when they are here.

[cclub75]

chrislarsson, on 2008-10-31 15:20:31, said:

Finances on a national level are also quite healthy. The foreign reserve is now greater than $100 billion, among the largest per capita in the world.
Much of Thailand's exports are in commodities like food. Demands for these are unlikely to go down in a global downturn. People still need to eat, and food is not where their spending will be cut.
Oil prices are going down, which will help save the tourism sector from expensive air tickets.

Why people do not check their facts ?!!!!

No, commodities are not "much" of thai exports.

Agriculture + mining + fishing + forestry = roughly 15 % of total value of thai exports !

http://www.bot.or.th/English/Statistics/Ec...ges/Index.aspx#

table EC_XT_007

Okay ? So now you understand better why such article is bull shit ? Sure thai people will not starve to death... But if exports (manufacturing) are going down, the damages will be terrible.

Exports is the ONLY GROWTH engine for the thai economy (GDP). The only one.

It's not rice that is going to save the thai economy for buddha's sake.... Rice = 513 millions USD for a total exports of 15,8 billions USD (september figures).

[marc288888]

well for sure the thais not give a crap about us

[lovinglife]

It isn't a case of avoiding a crisis now it's how best to manage it. The UK is already a few months into recession in reality and the US and Eurozone isn't far behind, but thats good. Actions have been taken and once the money markets loosen up and banks start to lend again then we will all start to come out the other side. There is no major damage, so the banks took a pasting because they engaged in bad business, restructuring of banks will be a good thing in the long run.

Oil is at a fair price, food and water are in ample supply, manufacturing is in sound shape and ready to respond once demand returns.

From what I have read it looks like Thailand is doing the right thing right now, watching and waiting. You cannot beat the speculators at the moment with regard to the value of your currency, you could spend a lot of reserves and make no real difference.

Those suffering recession first will also be the first to show signs of recovery and when that happens those currencies will rise against the baht. And stability will be restored against $ and Yen.

Yes its going to be a tough 6 months but if we sit tight the good times will return. Thailand knows its main revenue comes from exports and tourism and the baht has to be at a realistic rate to stimulate that.

[natmcalpine]

Maverell, on 2008-10-31 01:34:48, said:

Wow, Thai officialdom actually admitting that Thailand ( along with the rest of the world ) has a problem !! I am not sure if the Government cares too hoots.