Baht What up with Dat?????

[JimboPSM]

........ Baht is losing value WHY?

........... What do yuo think Jimbo cause this one really surprised me I was planning on 32.

Got to admit it's got to the stage now that there are far too many factors in play and I'm losing track; I'm now only really looking at the two major fundamentals of budget and trade deficits as ultimately it is the relative position of these combined with longer term relative real economic growth which will determine the exchange rate.

This is one of those times when all of the historical data and charts that I have may not really be all that much of a guide to the future - I'll still refer to them, but their value may be more questionable.

With the very high degree of volatility in both stock and currency markets all over the world it is almost impossible to tell which of the thousands of pieces of speculation and/or fact may be moving the markets up, down or sideways.

Even if a “crisis” package is both agreed and put into place this week it will take some time before markets fully understand both its economic and market effects; so there will be many upward and downward movements as the markets go through a long series of corrections; this is all going to be mixed up with the regular mix of reporting of market sensitive economic and company data.

There is now increasing talk of the Fed cutting rates, savers should note that the impact of this when netted off against the inflation rate means that they will effectively be getting an even bigger negative rate of return on their money than they get now – savers will lose money by saving it in a bank.

To complicate it just a little bit further, add in the complexities of the current political and economic situation both in Thailand and in other countries and then try and work out whether that puts the THB in a better, worse or the same position compared to where it was, always assuming that "where it was" was in a correct position to start with

Best just to tighten your seat belts and hang on to your hats; it’s going to continue to be a wild ride for quite some time to come

[bumper]

Ya no doubt about the wild ride, and certainly the best advice that can be given in today's climate. Me the goal is to clear all the debt house, car, not that much. Used to be about 15% of my net income now more like 25%. so a good thing not to have.

I wish I had saved the article about the countries who have done what is happening now for the US. There was a recovery but it took five years as I recall. But, the clock doesn't start until they actually begin with a plan.


I don't think we will see the true effect of all this in Thailand till 2009 probably in the second half of the year. Right now what I see here, is trying to look good. I think they ar relally countiing on China. Well if China isn't exporting a much to the states and europe. The Thailand won't be exporting to China. same applies to India.

Right now all I see coming from here we are Ok we don't have exposure. I don't beleive that for a minute. Creative acounting works well here too.

I agree with Stan we are not goign to get relief from the states, in my mind for at least five years. If it is going to come it will be from here. I think that will happen sometime in the next two years.

Yep buckle up for the ride.

[aznyron]

Git just my opinion but the USA is the biggest consumer of products so if they tighten there belt the whole east & china & s/e asia will suffer and there currency will drop also so with thailand smoke & mirrors
they will not be able to continue this phony image of a strong bot and we will not have to wait 5 years like Stan said it just might happen sooner they we expect and I pray every night for that to happen I am tired of being ROBBED every time I go to the bank to exchange currency just remember this if the bot is 40 to 1
more factories open more thais get jobs but the wealthy thais don't make wind fall profits on the exchange rate as well as the banks so it in the country best interest to weaken the bot not strengthen it
JMHO

[bumper]

Sorry I'm the guilty on five years and that was as to the states recovery . Thai effect 2 years

[cali4995]

Yes, I'm afraid it's time to start hoarding hard assets, gold, mobile phones,
handguns, etc., They're still trying to sort out that mess with the
financial markets. I don't think anything has passed through congress yet.
Looks like I'd better go get a part-time job or sell something on ebay.

Here's a link to the latest AP report on the salvage plan.
http://biz.yahoo.com/ap/080926/financial_meltdown.html

[bumper]

Well it sounds like they are getting along just about as well ss the Thai Goverment. It doen't sound real positive. But, on the other hand there may be a mid range agreement eventually.

If this had happened a year a ago, the good old boys network would have walked away with the cake. At the moment no one can let that happen and hope to gain election. So maybe now is the best time.

Honestly trying to push something like this through in one week is insanity.

What would anyone trust the Bush Administration at this point. It's the same FED and Treasury that is pushing it. Frankly their track record at the monet isn't the greatest. So not knwing a thing about economics I can see lots of reason's to question the plan.

[bumper]

Back to the Baht shortest honeymoon on record I think:

Asian Currencies Fall, Led by Philippine Peso, on Risk Aversion

By Aaron Pan

Sept. 26 (Bloomberg) -- Asian currencies declined, led by the Philippine peso, on concern investors will shun the region's assets as negotiations on a proposal to inject $700 billion into U.S. financial markets stalled.

Seven out of the 10 most-traded Asian currencies, including Malaysia's ringgit and Thailand's baht, fell after lawmakers splintered over a proposed rescue plan to alleviate the credit squeeze. U.S. Senate Banking Committee Chairman Christopher Dodd said an agreement he had reached earlier in the day with some Republicans was later undermined by a proposal offered by House Republicans led by Representative Eric Cantor.

``We've got some impact from a sudden turn of sentiment that the U.S. Congress may not have actually made some progress as markets had initially thought,'' said Vishnu Varathan, a regional economist at Forecast Singapore Pte. ``The side of the coin that Asians will look at is the risk aversion bit and that doesn't bode well for the peso.''

The local currency dropped 0.3 percent to 46.585 per dollar as of 11:50 a.m. in Manila, from 46.440 yesterday, according to Tullett Prebon Plc. The peso, which dropped 0.07 percent from a week ago, may decline to 46.65, Varathan said.

Malaysia's ringgit fell for a fourth day on concern export growth will slow as U.S. government reports showed new home sales and orders for durable goods declined in August and jobless claims rose. Malaysia shipped 13 percent of its total exports to the U.S. in the first seven months of this year, making it the second-biggest overseas market after Singapore.

`Markets Still Shaky'

``The chances of a recession have increased and that's affecting all the key export markets for Malaysia,'' said Wan Suhaimi Saidi, an economist at Kenanga Investment Bank Bhd. in Kuala Lumpur. ``Markets are still on shaky and volatile ground.''

The ringgit dropped 0.2 percent to 3.433 per dollar, according to data compiled by Bloomberg.

Taiwan's dollar declined for a third day after the central bank unexpectedly reduced interest rates yesterday for the first time since 2003, saying the global financial crisis has heightened the risk of an economic slowdown.

``In the near term, we could still see some weakness in the Taiwan dollar, mainly because risk aversion remains at very elevated levels,'' said Maya Pinto, an economist at IDEAglobal in Singapore. ``But in the medium to longer term, once the U.S. financial crisis blows over, among the regional currencies we'd expect the Taiwan dollar to outperform again.''

The island's currency fell as much as 0.2 percent to NT$32.068 against the U.S. dollar, according to Taipei Forex Inc. It last traded at NT$32.028, headed for its first weekly gain in 10 weeks.

Thai Baht Falls

Thailand's baht declined, paring the week's gain, on speculation global financial turmoil and doubts over how long the new prime minister will stay in office will deter investors.

The Thai government yesterday lowered its gross domestic product growth estimate for 2008 and warned that the economy may slow further next year. President George W. Bush warned this week that the U.S., one of Asia's biggest markets for exports, risks recession unless a $700 billion rescue plan for the banking sector is passed by Congress.

``Political uncertainty remains as no one knows if the new government will last more than three months,'' said Nicholas Bibby, an economist at Barclays Plc in Singapore. ``Inflation still lingers, the balance of payments deficit may worsen and it's an adverse backdrop for emerging markets.''

The baht dropped 0.1 percent to 33.96 against the dollar, according to data compiled by Bloomberg, cutting gains this week to 0.6 percent. The currency may weaken to 38 by the end of the first quarter of next year, said Bibby. Elsewhere, the Singapore dollar traded little changed at S$1.4223 against the U.S. currency after gaining 1 percent this week. The South Korean won was little changed at 1,158.70, slumping 1.6 percent in the week. Indonesia's rupiah added 0.2 percent today to 9,369 and Vietnam's dong rose 0.1 percent to 16,600.

To contact the reporters on this story: Aaron Pan in Hong Kong at apan8@bloomberg.net; Lilian Karunungan in Singapore at lkarunungan@bloomberg.net.

Last Updated: September 26, 2008 00:24 EDT

[trubrit]

Just looked at the Bangkok bank exchange rates on front page. They are being updated almost hourly. The dollar now 33.60 and the pound has dropped a whole baht in the last 24 hours. As at 13.10 today.Hell and my pensions due in next week.Back to the Lao Khow.

[aznyron]

Thai Baht Falls

Thailand's baht declined, paring the week's gain, on speculation global financial turmoil and doubts over how long the new prime minister will stay in office will deter investors.

The Thai government yesterday lowered its gross domestic product growth estimate for 2008 and warned that the economy may slow further next year. President George W. Bush warned this week that the U.S., one of Asia's biggest markets for exports, risks recession unless a $700 billion rescue plan for the banking sector is passed by Congress.

``Political uncertainty remains as no one knows if the new government will last more than three months,'' said Nicholas Bibby, an economist at Barclays Plc in Singapore. ``Inflation still lingers, the balance of payments deficit may worsen and it's an adverse backdrop for emerging markets.''

The baht dropped 0.1 percent to 33.96 against the dollar, according to data compiled by Bloomberg, cutting gains this week to 0.6 percent. The currency may weaken to 38 by the end of the first quarter of next year, said Bibby. Elsewhere, the Singapore dollar traded little changed at S$1.4223 against the U.S. currency after gaining 1 percent this week. The South Korean won was little changed at 1,158.70, slumping 1.6 percent in the week. Indonesia's rupiah added 0.2 percent today to 9,369 and Vietnam's dong rose 0.1 percent to 16,600.

well when are we going to see it at the ATM or Banks or is there more smoke & mirrors
they are predicting 38 to 1 next year in the first Quarter I will get on my knees tonight
and pray that happens and believe me it painful for me to kneel down since my M/B accident
I will not be greedy but I am looking at 40 to 1 hopefully it will happen and happen very soon

[bumper]

Tribrit, all bets are off, it has been going up and down like a yoyo for days now.

So it may well look better at the First, but no way of really telling.

Jimbo is right none of the convential school of thought that work's at the moment.

I'm planning on a two years basis, with the baht falling simply as it seems the safiest thought at the moment. Might be faster. The one thing I am sure of as at this point is it will happen.

What I see from the public announcement as to the economy by those who are supposed to know here in Thailand Mia Pben Rai, we are OK, if we look the othere way it will jsut go away. Not going to happen.

Must be catching, all the geniuses in America obvioulsy thought hey it will work itself out no problem. Nothing could have been further from the truth nor will it be here.


So Thailand is following the states, in that they won't deal with it until they have to and like what we see, now in the states. It is going to be a hard pill to swallow.

America has a government at eachothers throats in this now. but, at least they have a government
Thailand has a ways to go for that and they still have today to deal with Not a real good postion at the moment.

My guess a new election here close to the first of the year.

[aznyron]

git every other month they have election and they get the same results they buy votes and elect idiots
or corrupt leaders either way I do not see any change thank God that does not happen in the USA
we have our fair share of idiots GWB is one of them thank God he on his way out
now for the topic yes it a yo/yo but the string will break from to much activity and then we will have a wonderful holiday hope it last for about 10 years or more this way I can recover from what was stolen from me on lies and B/S did you ever notice when high season comes in the bot suddenly get strong
now how is that possible I guess they want there take before the bars & girls get there's as well as the hotels what a bunch of seedy greedy characters they are

[WBU ALUM]

GWB is one of them thank God he on his way out

It won't matter. After he's gone, you will blame him if a Congressman's kid gets the measles.

[aznyron]

GWB is one of them thank God he on his way out

It won't matter. After he's gone, you will blame him if a Congressman's kid gets the measles.

like they have been blaming WJC since he left office just like the melt down
it Clinton fault but GWB had 8 years to correct it just like it Clinton fault for not catching Bin laden but Bush had 8 years to find him but failed 6'6 inch skinny man who has to go on a kidney cleaning machine walks with a cane
but the Bush administration could not find him or is it they don't want to find him or maybe he is dead and has been since before 9/11 oh why are we fighting the taliban in Afghanistan and al queada in iraq which group is responsible for 9/11 ? btw it was under Bush watch 9/11 happen it was under bush watch the melt down happen it was under bush watch we invaded two countries but it all WJC fault because he got a B/J from monica and he did a terrible thing he lied to congress about it get the tar & feathers but both President & VP refused to go under OATH for the 9/11
investigation since when they get this right when WJC had to testify under OATH in the Paula Jones sexual harassment
law suit which was over 7 years old why did they wait so long to embarrass the President sorry readers I went off topic again please forgive me

[Fahlep Yai]

larry kudlow makes a compelling argument and shows again just how little the congress knows about what they did, what they are doing and what they will fail to do in the future.

http://www.cnbc.com/id/26890843

those who infected our markets are being allowed to cure them. it can't get any crazier or more disgusting than that.

[bumper]

larry kudlow makes a compelling argument and shows again just how little the congress knows about what they did, what they are doing and what they will fail to do in the future.

http://www.cnbc.com/id/26890843

those who infected our markets are being allowed to cure them. it can't get any crazier or more disgusting than that.

UPDATE: My latest information on executive pay-caps and government ownership warrants — which are now being called “equity protection” — is that they would apply to bond sellers, not buyers. I guess that makes it only half as bad. But I must say, it still is bad.

Why should a successful bank — whether large, medium, or small — give up ownership and allow pay-caps for executives?

Even the big guys like BofA and JPMorgan Chase are still solid banks. So is Goldman and Morgan Stanley. And Wells Fargo. And many others.

Why should they agree to this? It just makes the plan unworkable. Sources tell me the Treasury is opposed. Stay tuned for more.

Well now I really am confused, why would they buy out successful banks? I agree no successful bank should agree to this. Just the ones that have to save their butts. If a bank is successful doesn't need to use the government, then those executives earned their money, more power to them.

But if they take that money then they failed and deserve no bonus, or stick with it out till they do do derserve it.

This puts a completly new twist on it for me.

Somehow someway we have got to stop borrowing our current lifes, from our grandchildren.

If a bank is successful, it isn't broken why fix it?

You know this is what scares me, people are not borrowing to own a television, they are borrowing to buy the latest Plasma TV, when they already have a TV. They donlt need a TV they want the latest a cause their buddy across the street has one. Wants can wait until you can afford them.

People walking away from the most important purchase of thier lives, homes. Yep tghey are upside down in them, owe more then what they are worth, this is not the first time this has happened I have been in the same situtation. Price of housing does this, nothing new about that.

So whats the difference, variable rate loans, value goes down payment goes up. Creative financing. That makes it much more difficult to hang in there through the bad times. Why did we get those rates, so people could qaulify for the loans, that they otherwise could not afford.

My bet is that from the top down with lending institutions were pressured all the way down to appraiser and loan clerks were to sale this paper. Ok if some banks didn't do this then fine. But if the lower rank were l feeling like
they were goign to lose their job, if they didn't move the paper. That's a entire new ball game.

I see it every month here In Thailand when I go make my deposit, the assistant manager hits me up for a few mill to invest. Why she is afraid she will lose her job, if she does not meet her quota. Not a hard decesion for me ince it won't qaulify for immigration. Even been told hey take it out every nine months. Ok lets see risk my visa for a few % on interest. She is not a bad person, she wants to keep her job, she needs it. Forget that I'm really not a person that can qaulify for that. We will be creative and find a way. That is what go the entire world in trouble.

I understand the need for loaning money. But that has got to come back into reality, one way or another. Leveriging, borrowing money at one rate and buying stocks wth money Ect. you dont even have. NO!

Over the years I have owned several businesses, I tried to borrow 50K to get things started, I never got aa loan. If the buiness w succesful, then i made money, if it was not the only money at risk was mine and it was cash. So if it failed no one was hurt and there was a limit as to how bad I could be hurt. I always said if you really need money don't go to a bank, cause your not goign to get it, simple as that. Somewhere along the line tha changed, but not fo chump change like I was looking for.

Anyway here we are we are no going to fix it by doing the same thing we did before under the governments money. So respectfully disagree with this man, if the banks donlt need the money, donlt take it, if you do there will penalities, that sems to be how life works at my level. Good enough for me good enough for them.

We can not borrrow our way ou of this it's time to pay some bills.

If you dont think Thailand is in the same position look around you. It has not hit here yet but it will. A friedn wa recently hit by a hardd working Thai family her through his girlfriend for money. Why they could no longer obtain fiancing to deep in debt, two people woking and can pay the curretn bills. It's out there folks, just not coming to the surface yet. Well the anwer fo those people was to pay off some of the debt and stop using credit, for wants. It's no diferent for institutions.

My brother in law, can't qaulify for normal loans, so he hit the loan sharks, why to borrow money to get his niece through University . admorable but he ha tow kids of his own. Loan sharks being loan sharks, the interest on a weekly basis became more in one month them two people working could earn. I fronted the totlal loan amount not as much a you would think 18K put him in that position. I loaned it to him with no interest on the condition that he pay me back at 1K a month. Along with that came penalty, put ourself there again and yuo will get no help from me. He ha made every payment. Will he put himself there again I don't know, but if he does the penalty will stand. If he doesn't do that and makes his payments, I will help him anyway I can that's the reward.

That my friends is why the baht will decrease in value, in Thailand it's not waht yuo see. But, what you don't see.

What you do see is the number of cars sold in Thailand daily, what you don't see is how many repossesions there are daily. That creates a false picture of the economy here and sooner later the mirror will break and the smoke will clear. Thai's when Thailand will pay the same price we see in the states.

My apologies Gents, it took a bit to get back on topic which is the baht. We have one on the dollar as well, problem is they are in reality connected. They are also expanding now that the UK and EU have become a part of the picture now.

This topic started a very liong ime ago, when leveriging wa hitting the baht and Hedge funds were playing it like a casino. Things are very differnt in a short period of time since the thread was started. I bet you can go through all 115 pages of the thread and you will never find a hero wearing a white hat, from either country.

The one thing I do concur with is, going with the team that got you into mess, probably is not the best way to find a wokable solution. This did not happen in one week, that is insanity. Yes bank are goign to fail WAMU just did, but a strong bank bought them. That's life, they made mistakes and another was able to find a benefit in it. Isn't that free enterprise?

[bumper]

You just got to love it, she issues this staement when at the same time they are selling dollars to prop up the baht. Man they must have one hell of a lot money. Smoke and mirrors are expensive

BangkokPost.com) - Bank of Thailand (BoT) governor Tarisa Watanagase insisted that the financial crises in the United States will not significantly weaken Thailand’s financial liquidity, as Thailand has less non-performing loans (NPL).


According the Mrs Tarisa, the financial institutions in Thailand are strong. She said the country’s credit growth is at 13 percent, and the amount of NPL has a tendency to drop to three percent.


She said 13 percent of the borrowed money is from foreign countries at 13 percent, which is nearly at the same level of Thai investments abroad. Even though the problem has affected the whole financial system, its impact on Thailand is only one percent, according to the central bank chief.


However, she said the BoT will not take the US financial pridicament too lightly and it will monitor the situation continually.

[bumper]

Well just as Jimbp predicted the movement in the baht has been anything but stable. This morning looked at Bloomberg 33 wenn to tha bathroom came back to 34, in Min's. back in the 33 range now.

Heaven knows what is going to happen tomorrow with a yes vote.

a best I recall when they thougth they had yes vote dollar agined strength, but it's been up and down so much I'm really not clear on it.

[JimboPSM]

I’ve just been analysing trade data (which I haven’t done for a while) and need to correct a misperception that may have arisen from some of my previous posts

From previous data and reading reports in the “Bangkok Post” and “The Nation” over the last few months I was under the impression that Thailand was running a healthy trade surplus (I don’t think that I was on my own in coming to that conclusion).

According to my interpretation of the latest data (much of which is still provisional) that impression was fundamentally incorrect, the healthy trade surplus came to an end around the end of 2007.

Recent balance of trade history - There was a huge deficit in the trade balance back in the first half of 2005, this was followed by substantial improvements in the second half which, by and large, continued through 2006 to the end of 2007. In 2008 the improvements came to an abrupt end and by the end of the first half had all but been eliminated.

When I compare the balance of trade history with the THB/USD exchange rate it shows:

• 1. The huge deficit in the first half of 2005 followed hard on the heels on a rapid rise in the THB against the USD.
  
  2. The abrupt end that occurred in the first half of this year also occurred after a big rise in the THB against the USD.

It shows (as you would expect) that there is a good (but delayed) correlation between the exchange rate and the trade balance.

For info, this is a chart of the half yearly trade balance from 1991 to the end of June this year:

HY Trade Balance 1991 to date.JPG (98.52 KiB) Viewed 1812 times

[bumper]

Interesting hadn't noticed that, had seen that the imports had been higher then the exports, but knowing nothing of economies didnlt thinnk anything of it. Is this why they manipulating the baht?

IE to lower import costs.

If so this may be a long road, everything says exports will go down further.

[JimboPSM]

While it is difficult to be specific because the trade balance, while being an important factor, is not by any means the only factor in determining the exchange rate.

However, it certainly appears reasonable to assume that one of the objectives in managing the exchange rate is to try and keep the trade balance in surplus (or at worst neutral) so that foreign currencies received can pay for necessary imports such as oil.

While the relationships are really quite straightforward; they do cause a political dilemma as cheap imports and attractive priced exports are mutually incompatible. In a nutshell the following happens:

• If the THB strengthens:
  
  • 1. Imports become cheaper (e.g. oil)
    
    2. Exports (including tourism) become less attractive to foreign buyers.
  If the THB weakens:
  
  • 1. Imports become more expensive (e.g. oil)
    
    2. Exports (including tourism) become more attractive to foreign buyers

It should be remembered that there is a considerable time lag (at least six months) between exchange rate movements and major results being seen in the balance of trade figures.