Dong devaluation and Dubai’s debacle : “no worries but… we are going to talk about it”

Korn was the first to show his gun : “no alarm” he said.

The alleged Finance Minister was reacting at the vietnamese currency devaluation and the Dubai’s debacle.

You have to understand that the first duty of any thai official is to come on TV after any kind of intrinsic negative event (terrorist attack, bad news for the economy, Michael Jackson death,  new hair style of a famous singer etc.) to say that this event will have no or minimal impact (on Thailand that is to say).

The Prime Minister had to follow the rule too.

Mr Abhisit said he believed their impacts on the Thai economy would be minimal. (Bangkok Post)

So no worries, however…

The economic ministers will meet on Monday to discuss the debt crisis in Dubai and the devaluation on Vietnam’s dong currency, Prime Minister Abhisit Vejjajiva said in his weekly broadcast on Sunday.

He said the government will continue monitoring the global economic situation closely, and the Council of Economic Ministers will discuss the details of the Dubai World’s debt and dong’s devaluation on Monday.

… however they are going to talk about it. 😉

A perfect summary of the (reversed) way thai politician’s brain is working :

-first : talking
-second : thinking (or trying to)

25 Responses to “Dong devaluation and Dubai’s debacle : “no worries but… we are going to talk about it””


  1. 1 fall 29 November 2009 at 7:04 pm

    Korn either possess a nerve of steel or an ignorant buffoon.

    I can just picture Korn and Abhisit smiling on a podium and reiterating their “No impact” while a 2012 film-style disasters roaring around them.

  2. 2 Bob 29 November 2009 at 7:44 pm

    TC, What is your own opinion on the whole Dubai situation? Why did they drop this bomb shell just after the market closed for a long Muslim holiday?
    Is it anything, but a local isolated little default with no real effect, except a few red numbers in some remote board room?
    Could it burst a wider real-estate bubble in, say China?

  3. 3 ThaiCrisis 29 November 2009 at 8:03 pm

    Isolated ? You must be kidding.

    Banks and financial institutions are playing the same game since several years : hide and not seek.

    Dubai is just the visible tip of the iceberg. It blowed off. Bad luck. It was too “visible”. Talk about it : stupid huge towers, empty, planted onto the desert along with shopping malls.

    The bottom line is simple : no one, with common sense, would be willing to live in Dubai ! This place is a shithole, in gold, in a freaking desert with inane temperatures.

    Dubai has only one purpose : transit point between West and the East. Fair enough. Emirates and the airport are a real achievement. The rest is illusion.

    If there is a conspirary, it has to be seen at the way stock markets have been “managed” friday… The half session in New York was a cas d’ecole.

    Like always : “no panic”.

    It’s not a motto anymore, it’s a raison de vivre… 😉 And soon : a reason to die for.

    Going back to Dubai : globalization. We know that HSBC is exposed for instance. What will happen ? More write off and more bailouts. Like waves.

    Momentum : at one point the waves will form… a tsunami.

    Hide and not seek… How long it will last ? No one knows. But everyday that passes, playing this stupid game, is compounding the problem.

    What are they waiting for ? Why the situation would be any better in 2 years for instance ? ETs ? UFO ? An army of angels coming on earth to pay back our debts ? Magical thinking.

    We are confronted to pure human behavior here. Read the latest piece of Gary North. Quintessence.

    “Everybody wants to go to heaven, but nobody wants to die.” (Loretta Lynn)

    Everybody wants to go to heaven: stable money, rising employment, and economic growth. But nobody wants to walk through the valley of the shadow of death: Great Depression 2.

    That’s the key. Magical thinking. “Tomorrow will be different”.

    We learn (Reuters) that Dubai was adamant and refused in the previous months to sale at discount some of their “assets” (ah ah ah ah sand).

    Why ? Human behavior.

    They were thinking : “bailout is coming. Tomorrow will be different. Our empty condos will be sold.”

    To who ? That’s not the point. “Tomorrow will be better”.

    Instead of trying to take back 50 on 100… they refused.

    Too bad for them : now it’s over. And instead of taking 50, they will get 30.

    Clowns.

    And this circus is spead all over the god damned world. That’s the scary part.

    So Iceland and a shitload of banks yesterday ? Dubai today ? And tomorrow, “same same and no different”. More defaults, more debts, more waves….

    You know China, Bob : I mean look at the numbers… the credit… It’s insane. It’s a dozen of Dubai. Thousands of towers. Borrowed money going into stock market, going into concrete, more concrete… And a panicked government who is playing with explosives with this stupid RMB/USD exchange rate issue.
    Frenzy. Mania. The whole thing is going to blow off.

    Bottom line Bob : look at Europe. And look at the only figures that matter. In France, unemployment numbers were HORRIBLE in october. In september we had a small statistical erection… 😉 They tried to sale us the “september spring green shoots”.
    Fiction of course. Too bad.
    Viagra could’nt help us.

    Jobs are destroyed. Over and over. Same in the US, despite a huge propaganda effort through the medias.

    LESS JOBS, LESS INCOME, MORE DEBTS, SINKING CURRENCIES….

    How do you want to solve this deadly equation ?

    Again, the only solution would be a “wildcard” : ETs, UFOS, angels, free energy. Or Obama in pink underwear dancing disco in front of the White House. 😉

    More probably : it will end in a good old fashion way. So human : war, destruction and pain.

  4. 5 ThaiCrisis 29 November 2009 at 10:04 pm

    Oh… it’s coming… it’s coming. 😉

  5. 6 Chris 29 November 2009 at 10:38 pm

    While it is true that Dubai is in the “middle of no where”, there is a semblance of logic to the gigantic infra-structure which has been built there and that is that Dubai serves as HQ and base for all the flight capital and a lot of the business brain power from Iraq, Iran and Pakistan.

    Plus most of the billions of USD from the U.S. government that never hit the ground for the “re-building” of Iraq, an undefined amount of “flight” billions from Mumbai, Saudi Arabia, Kuwait, Oman, Egypt, Jordon and the many billions from the too numerous to count corrupt thug running most of Africa….

  6. 7 fall 29 November 2009 at 10:46 pm

    Silenced

    LOL, that news is priceless! “unnecessary competition”, what the hell does that means?

    Well, why should Thai products compete with foreign imports? Let’s all raise the tariff!

  7. 8 ThaiCrisis 29 November 2009 at 11:18 pm

    Chris : sure. No problem to make a “hub”, tax free, to harbour dirty -and less dirty- billions USD, in the middle of the desert. I like this idea, and I like the idea of an “oasis” of freedom in the middle of an ocean of socialists government obsessed control freaks.

    But…. once you’ve said that… the next question is : who, with sanity, would be willing to buy at super high prices a luxury condos or a luxury villas for holiday in Dubai or to live there ?

    Dubai has been promoted like a mirage. A mirage in the desert.

    That’s the frontier (thin) between sanity, a good idea, and a total perversion.
    😉

  8. 9 Chris 30 November 2009 at 5:31 am

    Well, as I understand it, most of the residential development in Dubai is owned by and sold to the rich and powerful in Iran, Pakistan, Iraq, Egypt, Jordon, Saudi Arabia, Africa, some India, etc. as their “escape hatch” for the day when their governments, networks and relationships are switched or overthrown or in chaos. Kind of like Switzerland in the 1930’s and 40’s in the context of European collapse, chaos and war.

    The publicity about the Beckhams and a few tennis stars owning condos or houses is just the frou-frou or PR/marketing. The bread and butter market is “clever” and “succesful” and “powerful” people and families in the region looking for and having the need for a 2nd or 3rd option to ensure their own and their families stability and longevity.

    The flight distance to Tehran, Karachi, Baghdad, Jeddah, Mumbai, Aman, the East Africa capitals is very short and there are frequent non-stops every day. There are also non-stop daily flights to Peshwar, Kabul and the Central Asia countries.

  9. 10 Bob 30 November 2009 at 9:18 am

    More probably : it will end in a good old fashion way. So human : war, destruction and pain.”

    Sadly, you might very well be spot on with the prediction, the only real question remains as to where and when.
    The mostly likely candidate to test is new found military power is of course China. They are not ready to use it externally (yet!), but they sure have a history of hard handing their own population.
    Anyway it falls, it will be brutal.

  10. 11 antipadshist 30 November 2009 at 12:15 pm

    TC

    I also had a similar impression: that this whole “mirage in the desert” from the very start was PLANNED as nothing else than mirage – sort of international mega-project, which wasn’t meant to become a reality, but rather a tool for money laundering, then to be abandoned (default). and it has played out precisely according to that plan. it would have been rather surprising IF it was completed and someone actually bought all those condos and other properties. but this present outcome – not surprising at all, it was ANTICIPATED.

  11. 12 antipadshist 30 November 2009 at 1:05 pm

    Oil price rises today …

    Oil rises in Asia as fears over Dubai’s debts ease

    “Fears about the Dubai World debt default have eased. Asian financial markets have reversed course this morning and with the dollar weakening against the euro, oil is inching up toward $77,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

    But Shum said worries lingered about other countries with similar large debts that could trigger another financial crisis but this is likely to also prompt central banks worldwide to maintain ample liquidity and keep interest rates low.

    “The long-term prospect for commodities including oil looks strong amid expectations that the value of the dollar will remain weak,” he said, predicting oil to remain within a tight trading range of the mid 70s to the low 80s.”

  12. 13 ThaiCrisis 30 November 2009 at 2:16 pm

    Bob : you probably heard the new -astonishing- provocation or Iran yesterday. “Hello. We want to build 10 more factories to enrich uranium” !

    I mean : they want their war. They want their holly war. It’s now totally obvious.

    From a strategic point of view : better for them to stay quiet, to keep working, saving time in order to achieve their goals (the bomb). Especially since october with the meeting of IEAE and the “release” of the news about their secret factory.

    But no : instead, the iranians are litteraly having a blast. Climax. They love to provoke the west (and China, and Russia too eventually).

    They want the war.

    And good luck ! What a striking coincidence : the west (the US) needs badly a war.

    Why ? Destruction of overcapacities.

    WWII ended the Great Depression. Why on earth it would be different this time ? What ? Oh yes sure, people have evolved since 60 years. The world is more calm. More educated. Sure.

  13. 14 ThaiCrisis 30 November 2009 at 2:19 pm

    Chris : i doubt people with serious financial means…. would consider Dubai as a perfect hideout, as an escape plan… Like you say : it’s way too close from the Cauldron Hell ! And way too exposed (no natural protections).

  14. 15 ray 30 November 2009 at 7:26 pm

    hello thaicrisis.

    glad to be able to log on yr site (u were censored
    ?). i agree with u that the super depression is coming sooner than we would like. 2008 was when big companies failed( lehman, bear sterns goldman sachs etc)..

    2010 will be sovergn debts( countries goin bankrupt). dubai is indeed tip of iceberg. pls dont forget greece, italy, spain( 20% plus unemploymnt).. what about the baltic states…

    also the fall out from dubai will affect the eu banks esp swedish banks. it might affect banks in the usa but the fed will just print more money to make up the difference.

    the dollar collaspe has started. first indians bought the reserve gold from imf and then it was srilankans.while thailand sells gold and buys usa debt. why ? because our leaders are oxford educated.

    both obama and eu bank prisident was in china to beg the chinese to revalue the yuan. never gonna happen because there are millions of chinese out of work. for the west the problem is economics but for the chinese its political.

  15. 16 Bob 30 November 2009 at 9:15 pm

    “So Iceland and a shitload of banks yesterday ? Dubai today ? And tomorrow ?”

    Looks like Greek of all places could be the next domino to fall…

  16. 17 fall 30 November 2009 at 10:39 pm

    ThaiCrisis

    I doubt a war with Iran would help contribute to “war is peace” motto. In WWII, US have roughly 16 million troops serve in conflict. In Gulf War, about 500,000. And in 2003 Iraq invasion, about 250,000.

    Modern warfare evolved and use less people. Sure, employment would rise in armament industry, but only so much. Unless, war with Iran could trigger a WWIII, or something that require lots of man power and grunt on the field.

  17. 19 ThaiCrisis 30 November 2009 at 11:58 pm

    Very good article indeed.

  18. 20 ThaiCrisis 30 November 2009 at 11:59 pm

    Fall : maybe in term of labor force… But in term of destruction ?

  19. 22 fall 1 December 2009 at 8:20 pm

    ThaiCrisis,

    Naa, IMHO(speculation), US benefited from pend up demand of services men and resource re-allocation, not rebuilding. The country have the advantage of fighting abroad, with little to non domestic collateral damage.

    A destruction to the extend of significant infrastructure rebuilding would not be consider a benefit, think Japan economy after the A-bomb or Iraq as of current.

  20. 23 ikl00 2 December 2009 at 8:03 pm

    not a very reliable reporter, but an interesting link of the situation in Dubai to Thaksin

    http://www.nationmultimedia.com/worldhotnews/30117678/Dubai-financial-debacle-will-make-Thaksin-more-desperate

  21. 24 Insanity 15 December 2009 at 12:18 am

    THE PROBLEM AIN’T DUBAI: IT’S LONDON!

    The “Dubai crisis,” as it is being mis-reported, is actually the breakdown of the London-centered global monetary system. Far from being a mere backwater, Dubai occupies a key place in the dope-running, dirty money, criminal organization which is the empire.

    The public portion of the crisis began when Dubai World, a corporate front for the royal family of the tiny nation, announced that it was requesting a six-month moratorium on its debt payments. The move sent European stock markets plunging on Thanksgiving Day, followed by Asian and U.S. markets the next day, as fears of a new round of losses spread around the world.

    Bank stocks were hit the hardest. Dubai World has some $60 billion of debts, about half of which is reportedly owed to European banks. The company went deep into debt to fund one of the craziest fantasies we’ve seen in a while, the turning of Dubai into a tourist destination and pleasure center. It created a series of opulent man-made residential islands, shopping malls, luxury hotels, and high-rise towers, filled with nearly every amenity possible, except maybe good taste. The game worked for a while, but then the financial system blew, and real estate values fell by 50%.

    The bank debt and the real estate values are trivial, however, compared to the subterranean money flows which form the real economy of Dubai. The tiny emirate is the central black market for the empire’s black-market system, the financial capital of the world’s dope and hot money trade. Dubai today plays a role similar to that of Hong Kong in the earlier days of the British Empire, its high-rises home to some of Afghanistan’s most powerful drug lords, among other narcotrafficking kingpins. This is the real reason for Dubai’s emergence as a financial center.

    Dubai is run top-down by the British, built largely with British money, and by British-linked construction firms. Most government agencies have a member of the Dubai royal family as the titular head, with a Brit second in command and actually running the operation. It should come as no surprise that Sheikh Mohammed, the ruler of Dubai, went to London to visit Queen Elizabeth, Prime Minister Gordon Brown, and others, in the days immediately preceding the Dubai World announcement. As the Sheikh himself said, the whole thing had been “carefully planned in advance.”

    What’s Next?
    The crash is on. Nothing has been solved, not by all the criminal bailout schemes, not by the so-called stimulus plans, not by the “recovery” lies of the clueless cheerleaders. Through it all, the financial losses have grown, and the physical economy has collapsed. This is reality, and it is getting worse.

    Rather than moving to help their people, governments are turning openly to fascism. Trillions of dollars for the bankers, but nothing for the people. They know the current system is finished, and they are working feverishly to keep us preoccupied while they dismantle what few protections we have left. Much of this is being done under the false flag of reform—financial reform, health-care reform, tax reform, energy-policy reform, and others—austerity, and further concentration of power in oligarchic hands, sold by the behaviorist psychos as progress. The “new and improved” version of the same old fascism.

    Rather than propping up the casino, we shut it down, writing off all derivatives, putting the mountains of speculative debt in the freezer, and reorganizing the banks under strict regulations. No more derivatives, no more casino. Finance becomes what it should be, the servant of real economic activity. Real bankers will love it, and the gamblers—well, who really cares!

  22. 25 ThaiCrisis 15 December 2009 at 3:46 am

    Alas Bob… difficult to disagree with your views.

    Before, we were heading toward the Big Concrete Wall… But now we are increasing our speed… relative to the Big Concrete Wall.
    😉

    The Wall or the Rabbit Hole. Or both.


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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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