Case in point, the present situation, particular individuals were given tremendous latitude to place bet’s with (OPM) other people’s money. When you board a commercial aircraft and go on vacation or a business trip you expect that the airline carefully selected and trained the pilot’s flying a plane full of 300 plus human beings.

It’s comes down to risk volatility– If you want better odds checkout Vegas, at least what happens in Vegas stay’s in Vegas. We’re taught to believe mutual fund managers seek our best interest’s, but seriously– when an ETF gives back returns of 30-50% I would imagine no one had complained. First you get the money, then you get the power, then you get the woman. . .

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It would be interesting to establish what percentage of value-added in the economy is attributable to listed companies, but I don’t believe one could obtain a reliable figure given that so much of Thailand’s economy is black/grey which is not picked up in GDP figures.

I should add that for companies it’s rather difficult to switch money, at will, from business to personal accounts.

I mean we do have some rules to follow, right ?

Here is my theory, with one reminder : exchange rates are not absolute. Everything is relative.

-since the coup, Thailand is “on the side”. The hot money was careful to avoid the THB. Small country, small currency, inane gvt, lunatic generals, capital controls in december 2006… so why taking risks to play with THB when you could play with AUD, NZD with a 100 % success rate ?

-meanwhile, AUD, NZD, EUR went to the roof (for different reasons).

-Those were sure bets… But THB was a no bet at all.

-So now, the situation is changing because we have entered into deleveraging times, bubbles are exploding.

-So mechanically, we see AUD, NZD, EUR falling versus THB.

-but we shall remember : it’s not a sign of love and confidence for the THB.

The industry will not loose any money, the professional gamblers from the banking industry will be payed with tax money and the middle class in Europe and USA (n absolute minority compared to the worlds population) will suffer.

I think, this crisis ight speed up the the switch from Euro-American dominance of the market to an asian dominated economy.

Here are two more figures to drive anyone to the zeroes-insanity asylum:

Total derivatives contracts outstanding according to the IMF is US$1.125 guadrillion. Quadrillion! (we will need all the toes and fingers of the whole world to figure out how many zeroes Quadrillion means!)

Total world GDP however is only US$54 trillion.

Bill Gross at PIMCO did a simple calculation in January 2008 at his famous article “Pyramid Crumbling”. The total amount of CDS (credit default swaps of today’s notoriety) contracts was at $45 trillion (at that time). The historical default rate is 1.25%, or $500B CDS contracts will be in default. Assuming a recovery rate of 50%, the resulting loss is $250B alone. (VERY OPTIMISTIC loss and recovery estimates at that time when housing/financial market were not so wobbly yet).

One financial editor named Bill Lindo wrote: “Putting a number to the size of the derivatives market is virtually impossible, but putting a number to the value of the derivatives market is easy — ZERO!”

(During the 1930’s depression lots of bankers and Wall Street speculators were jumping from skyscrapers to cure their stress. It is not very unlikely that we will see a repeat . . . not of the depression but of the jumpers.)