Archive for December, 2009

Chart, businesses : number of dissolutions explodes in Q3 (+347 %)

Let’s burry 2009… A year that lot of people would like to forget.

All my best wishes for you and all the Thailand-lovers. And remember the 2 main mantras of 2009 :

-On going Recovery
-Change Yes We Can(‘t)


And be prepared for a very interesting 2010, during wich the bulk of the deception (all the stimulus and bailout plans around the world, cheap money, artificially low interest rates, etc.) is going to blow off.

They tried to sell us a collective hallucination… To some extend, it worked (at least for the balance sheets of banks and the bonuses of their employees). But the Reality is going to catch up… with ugliness : mountains of debts, deficits, depressed purchase power because of unavoidable higher taxes, higher unemployement, currencies disorders etc.

For my last 2009 post, let’s have a look on the latest data published by the  Department of Business Development.

Unprecedented. The Big Crisis has ravaged businesses. It was forecasted. No surprise at all. But it’s interesting to  hear the government talking about “recovery” and “lower unemployment”…

A total of 24 592 companies have been dissolved during Q3. That’s a whooping increase of 347 % compared to Q3 2008…

Companies = Limited Company + Limited Partnership + Ordinary Partnership (Public Limited companies are excluded)

Dissolution = Dissolved Defunct and Bankrupt

Now a look per month.

Santa (Abhisit) Claus : the never ending subsidies and more holidays

Rome had panem et circense (bred and games)…

The Kingdom of Thailand has free water, free electricity and more holidays.

That’s the Wonderland of Abhisit.

Poor Thais to benefit from measures to curb water, power, bus, train, gas fees

The Cabinet yesterday agreed to keep the five cost-of-living mitigation measures going for three more months, as well as giving the green light for recurring borrowing of Bt35 billion for this fiscal year.

The five measures, extended three times already, were set to expire at year-end
. (Nation)

And :

Cabinet Tuesday approved one additional holiday for the Songkran holidays and the National Mother’s Day period. As a result, Songkran would be for six days from April 13-18, and Mother’s Day would be for four days from August 12-15. (Nation)

The point is : Samak (PM of Thaksin’s party) did it. It was in july 2008. At that time, people were hammered by high inflation (yes I know it sounds like a century ago). The oil prices crisis.

Then Somchai (brother in law of Thaksin) continued the same policy. And of course, Abhisit jumped into the same wagon ! Happy like the Monty Python Flying Circus having intercourse with Benny Hill.

Eventually, the idea is exactly the same : buy with money( you don’t have) some political and popular support.

So the clowns who were waiting for a “Change” with Abhisit are… well… clowns indeed.

Different side, different people, different color, but the same breed actually : dirty, corrupted, neuronless politicians.

The government is broke ? Mai pen rai, more subsidies. The recession should command more effort, more work ? Mai mi pen ha, more holidays.

Anyway. In january 2009, Abhisit extended this package.

Thaiwonderland : Abhisit extends the “Samak Package”, but changes its name

What will he do in 3 months ?

Good. Now you start to understand (thai) politics. 😉

Chart, credit, october : +3,8 % year on year… but down for businesses

(Source Bank Of Thailand, table FI_CB_015_S3).

The growth of total outstanding credit for businesses recorded a drop of 7% in october (-6,4 % in september), compared to october 2008.

Overall, we still have a growth of 3,8 % year on year, at 7 623 billions THB.

Slowely, but surely (?) the credit belt is tightening. Sure, it could be worse. But the trend is not really euphoric for businesses.

By the way it’s interesting to look at the weight of each group :

In % of the total amount of outstanding credit, the part for businesses went from 60 % in 2006 to 47 % in october 2009.

And the part of “domestic banks and financial institutions” is catching up.

Anyway. It doesn’t prevent the Bank Of Thailand to make comments, coming out from outer space.

Commercial bank lending was likely to increase by five to nine per cent in 2010, the Bank of Thailand forecast on Thursday. Central bank deputy governor Bandit Nijthaworn said bank loans should rise next year as loan figures in October rose 0.2 per cent year-on-year and 0.4 per cent from September. Lending declined in the first nine months of this year due to the sluggish economy.

Mr Bandit said loans should move positively next year because the actual liquidity was five-times more than the required amount
. The amount available would be adequate for commercial banks to support the business sector.
(Bangkok Post)

9 % ? And why not 25 % ? ! It’s laughable. And as usual we can admire the perfectly non sensical and twisted inference made by thai officials. Let me highlight the key point : loans will go up because… there are liquidities !

This guy is so dumb, it’s scary.

The rule is : credit = solvent demand + means (liquidities).

It means : even if there are tons of cash, but NO (SOLVENT) DEMAND BECAUSE… for instance… an economic crisis (hello, you remember ?) then there will be no loans. I repeat : banks won’t lend.

Banks won’t lend to please the BOT, Korn (the alleged Finance Minister), Wall Street, the panda in Chiang Mai’s Zoo or Santa Claus.

Businesses won’t ask loans to invest if there is no demand for more goods, more production. However, they might looking for money… just to survive. And in this case, the banks won’t lend. Too risky. Vicious circle.

Credit is not, should not be like a living creature. Credit is a mean. Not an end.

And this is precisely what was forgotten by all the clowns around the world. And this is precisely the cause of the Big Crisis : free money pushed into the throats of millions of people and businesses, in the name of “economic growth”, when in facts the proper name was : Ponzi Scheme.

Why the King is kept in hospital ?

The question might appears as provocative. But let’s review some hypothesis.

First the fact : the King is in hospital since… september 19. Almost 3 months !

Second : at the beginning, the state apparatus spent a lot of energy to try to divert attention, to water down the reality of the King’s ailment. That was achieved through surreal “daily official statements” (read a few of my previous articles here and there).

Third : the King made 3 public appearances… 2 at the hospital. And the last one was for a very brief address, for his birthday last week (read here).

On december 5, as soon as the speech was over, the convoy of official cars (a VW van for the King) went… back to the hospital. Live on TV.

Now,  let’s go deeper.

1-We can assume without any risk that the King of Thailand would be able to get all doctors and equipments money and modern science can buy. When he wants. And where he wants.

2-It would be rational to assume that the King would prefer to be in his palace,  home, while being treated, rather than in a hospital room.

3-And we can assume, due to past events (the attempts to water down the reality of the health situation), that it would be  in the interest of the state apparatus to continue the same policy. AKA : stability. We could even say : it’s in the public interest. For that matter, It would be perfectly logic to try, as far as possible, to shorten and/or to hide the most visible proof of abnormality, AKA the King’s hospitalization.

Normality = King in his palace (even if very hill). Abnormality = King in hospital.

It’s basic common sense.

So let’s recap… 1+2+3 = ?

Why do they keep the King in the hospital ? Why did they show to the world this convoy of official cars… travelling back from the palace directly to the hospital, right after the royal speech ?

Why such an ostentatious hurry ? Live on all thai TV channels ?

Why they didn’t even try to… pretend ?

It doesn’t make any sense.

Until… well… it makes perfectly sense… AKA = this is exactly what they want to show.

Let’s assume that the whole situation is designed.

What would be their motives ? Who would benefit from this operation ?

The answer seems then obvious : while the King is in the hospital, AKA in a position of weakness, the struggle with the opposition can not resume. The thai people is compelled, in a way, to unite behind its monarch.

To summarize : in order to prevent (political) abnormality, a group of people (?) could paradoxically gamble and play on a… a real abnormality.

What do you think ? Far stretched ?

Chart, exports, october : -4 % year on year… and -14 % from the Peak

Back to business (I took a few days off).

Bank Of Thailand has published data for exports in october.

Total : 495,33 billions THB, that’s lower than the previous month (503,63) and it’s -4 % compared to october 2008.

As forecasted, the Green Shoots start to… well… vanish (have they ever existed ?). The effects of the massive, ultra massive bail out and stimulus plans worldwide… start to fade away. It’s obvious in the US, in Japan, in Europe… But we are still in a X Files Episode : I Want To Believe. 😉

From a macro economic point of view, the situation is worsening.  And in a few months, we will merely see those few months as an illusion… Anyway.

Now the chart per zone.

And the chart with the values compared to Thai Peak Exports (july 2008).

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.