Chart, credit in may : how do you say “credit crunch” in thai ?

How do you say “credit crunch” in thai ? Well, you should start to learn, quick quick, leo leo, chop chop.

CREDITMAY1

Nice, huh ?

(Source Bank Of Thailand, table FI_CB_015_S3).

If you’re new on this blog, or if you want to refresh your memory, read my article… about the data for april.

Credit : the party is over, growth is decelerating

I don’t want to bother people by repeating myself ad nauseam.

But I think the charts are easy to read.

CREDITMAY2

CREDITMAY3

The game is over…

Businesses are bleeding… since several months… Another proof : the explosion of bankruptcies (read my article)… This trend is going to continue… therefore banks will be less and less willing to lend. Too risky. And it makes no sense to lend in order to increase capacities during a recession.

Therefore, in a few months (as soon as next month for businesses ?), we will see a negative growth of total credit year on year.

It’s Economy 101. It’s basic. It’s simple.

And there is nothing Abhisit and all the other clowns can do about it.

This remark applies to virtually the whole world and to all our so called “leaders”… They’re all calling, with hysterical tone in their voice, for more lendings… as a way to solve a crisis created by reckless lendings and cheap money.

It’s of course totally absurd. Even a highschooler could tell. But it’s apparently too complicated to understand for the politicians.

It’s interesting to note that the total outstanding credit to the government… has increased by 57 % in may y-o-y (compared to may 2008), at 134 billions THB. Sounds impressive ?

It’s of course totally derisory compared to credit to businesses (total = 3 768 billions) and to invididuals (total = 2 173 billions)…

In other words, the government can’t fill the holes.… And the holes are just getting bigger and bigger.

Then after, you have to factor in… the negative feedback loop dynamic… less credit will cut the life support for many other companies… will lead to more defaults, unemployment will rise, leading to more defaults, less consumption, less taxes collections, creating more imbalances.

Again, it’s astonishing to see so many people living in Laland and who still believe that everything will be fine, that the crisis is going to disappear, thanks to some magic wand or invisible hand, thanks to Buddha (Jesus, Allah etc.) like it never happened, like if it was just a bad dream…

5 Responses to “Chart, credit in may : how do you say “credit crunch” in thai ?”


  1. 1 Balance 11 July 2009 at 12:50 pm

    It’s too easy to make projections based on a rear-view fixation. You seem to portray yourself as a guru (mostly of negativity) but surely any guru would also offer SOLUTIONS? What may your solutions be in this case? Could be very insightful…

  2. 2 ThaiCrisis 11 July 2009 at 1:58 pm

    Balance, I’m eating people like you on this blog every week, since 2007.

    So let me rephrase it, one more time : to criticize something doesn’t IMPLY that you have a solution, that you have a proposition to make.

    Eventually, I’m not a politician. And I’m certainly not a guru.

    Okay ?

    But to try to discard my right to criticize because I don’t make propositions is just very cheap rethoric. And believe me I’m totally immune to such trick.

    Don’t try to Socratese me. It can’t work. I’m talking facts, on the ground, you are talking “balance” and “lack of solutions”, it’s a very common (and again so cheap) evasion technique.

    I’m talking about credit, facts and figures, so if you want to argue, stay on the same level.

    Now to answer you : I don’t make projections on rear view data. It’s not because credit growth was slowing last month that it will continue to slow the next month.

    I’m a fan of the Black Swan from Taleb. So you won’t find such mistake on my blog.

    If you understand that way it shows that you understand nothing. Credit growth is going to go red BECAUSE of many factors, past, current and future, all linked together. I don’t want to repeat my self, but let’s go another time :

    Banks are going (note : the future) to lend less. Not because they lent less yesterday, but because tomorrow more companies will default, more people will lose their job, less taxes will be collected, because the crisis is going to deepen etc. etc. etc. And because eventually, IT MAKES NO SENSE TO LEND MONEY TO INCREASE CAPACITIES DURING A RECESSION.

    Would you dare to say that I’m wrong on this very simple truth ? Make my day.

    You want to take a credit to build a new factory, a new office bulding now ? Go for it. Good luck.

    And to continue my answer : NO I DON’T HAVE ANY SOLUTIONS.

    It’s not my job.

    But what I do know is that the current policies won’t solve the crisis.

  3. 3 observer 12 July 2009 at 12:53 pm

    But today you can read in the BkP that >70% of the people is satisfied with Abby boy and his clowns. So why bother? everything is OK! These figures couldn´t even a popular and caretaking government reach in western democracies.
    Would have been interesting to know how they put the questions.

  4. 4 George P Tuckeer 12 July 2009 at 9:52 pm

    “70% of the people is satisfied with Abby boy and his clowns”

    Let Abby put that to an election test and we’ll see.

  5. 5 Tarrin 13 July 2009 at 8:16 am

    The 70% approval should be test today, according to the survey Abhsit should win a landslide with at least 60% seat in the house


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Thailand Crisis

Coup, Economic slowdown, Terror In the South... The situation is worsening in Thailand. Bumpy road like often before.

But this time, it's different.

The key to understand the present turmoil is the inevitable... succession of King Bhumibol.


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