Chart, credit, june : after the Green Shoots… the credit crunch ?

(Source Bank Of Thailand, table FI_CB_015_S3).

The total credit (outstanding) at commercial banks was at 7 483 billions THB in june. That’s 131 billions less than may. But it’s still increasing by 7,5 % year on year (compared to june 2008).

Sounds good ? Well… look at the details.

CREDITJUNE1

Yes… Growth of credit for business is in negative territory (-1,3 %)... And it’s still decreasing for individuals.

Businesses are under pressure because of the recession.. and for some their cash bloodline is getting dry. And It makes perfectly sense : banks are not willing to increase lendings. Because risks are increasing. And because it’s absurd to add capacities during a recession.

At least, this is how It works in a “normal” system. In China for instance, when the politicians order the banks to increase lendings… the banks comply. And in a hurry (it would be so bad to end up in jail…)

That’s the beauty of communism if I may say. πŸ˜‰ But of course It’s just another bubble (“property sales surge 60 %“), ready to burst. Anyway.

Now let’s look at the amounts.

CREDITJUNE2
And the differences per month.

CREDITJUNE3

Our dashing Prime Minister, Abhisit, told us that Green Shoots are to be seen everywhere, that the bottom is reached, that recovery is under way blablabla…

Looking at the figures provided by the BOT, his statements are just wishful thinking…

The credit party is over.

And the clowns should explain us how a system based on credit can continue to grow if the credit is drying up ? This basic question is a burning one in the US (read this striking article about the severe US consumer credit crunch).

But it’s much more entertaining and convenient to talk about Green Shoots Soup and Recovery Salad.

Bon appetit. And sleep good.

[ I’m taking holidays. See you last week of august. Until then, may the Crisis be with you and be ready for an exciting september πŸ˜‰ ]

3 Responses to “Chart, credit, june : after the Green Shoots… the credit crunch ?”


  1. 1 Pricilla 12 August 2009 at 5:31 pm

    Regarding the US Credit article, consumers have to hit the wall eventually, this deleveraging is long overdue. Unlike governments that refuse to deleverage consumers don’t have the luxury of just printing extra money.

    I wonder if the Thai government also has the printing presses running on borrowed time.

  2. 2 Lothar 13 August 2009 at 7:25 pm

    Maybe you have overseen this but china is dramatically cutting back there credit lines too. They realize that the build a bubble that can be there doomsday. Medias aren’t talking about it a lot

    but i expect a lot of hot air in the china recovery. Why is energy consumption still 10% lower then in last year if everything is fine?

    But have you seen

    http://bangkokpost.com/business/economics/21887/industry-sees-ray-of-hope-at-year-end

    i don’t know what this guy is talking about but which hotel has ever seen 90-95% occupancy rates in the past? And know there are a lot more of them.

    Well politicans and economists everywhere in the world are currently optimistic up to insane levels. But believe me it will not work for you and me and billions of all the simple working people out there who live on main street.

  3. 3 RockderktheGreat 19 August 2009 at 4:13 pm

    Don’t worry TC. Everything’s going to be ok. Hell, the Thai Military is so confident that they’ve just bought 4 Embraer Business jets at 25 million-odd dollars a piece. I guess they need them for when the Generals’ families need to go shopping. In Hong Kong.


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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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