Second round : shootings, attempt of target killing, US and UK embassies close

After the grotesque “Road Map” blew off… reality is coming back with a vengeance.

The first round was on april 10 (26 deads). The second round started today with a string of events.

–shooting and incidents at Lumpini : at least 1 dead, 10 wounded

-target assassination (attempt) of Seh Daeng (the “military” red leader). He was shot in the head by a snipper at Rajprasong tonight (CNN video here).
I guess it’s going to be difficult this time to accuse him of being the leader of the “men in black”, the famous “terrorists” who shot at protesters last month… I’m sure we can trust Abhisit to find a decent and logic explanation….

–state of emergency extended to 15 provinces (while the security apparatus crushes the protesters in Bangkok, it’s important to prevent their “komrades” based up country to react)

-the US and the UK close their embassies.

-… foreign journalist reports more shooting tonight…

Overall, It could be the “final” round…

Red as blood.

But the important point is to think about the “rule of law”, the “democracy” etc. The key words used over and over again by the government. And to trust the orwellian “Centre for Resolution of Emergency Situation”.

Educated in the UK, Abhisit was a very good learner… “Road map”, Orwell, the Newspeak, thoughtcrime, the Ministry of Peace, Ministry of Plenty, Ministry of Love, and the Ministry of Truth… He knows the whole set…

It’s just -another- sad, and even tragic day for Thailand.

thoughtcrime,

Chart, exchange-rate and holding of US Treasuries : more for more

In august 2009, here what I wrote on the chart with USD-THB exchange rate and thai holdings of US Treasuries.

The BOT fantasy : buying more and more USD (via US debts) in order to maintain the exchange rate USD-THB.

Well, 5 months later, where are we ?

Higher US Treasuries holdings… and higher THB. Well done guys ! 😉

But I agree, you could also see the half full glass here : It means, if the BOT haven’t piled up USD, the THB would have been even stronger.

I remind you the obsession of virtually every asian central banks : weaken their local currencies versus the US Dollar, in order to boost, stimulate their dear exports.

Each countries use different tools, but with the same cheap short term obsession : the Beggar thy neighbour policy. China for instance sets the exchange-rate (It’s much more convenient) because China is an authorian (to use the word “communist” would be an insult to Karl Marx…) state and because they don’t give a rat shit about what other countries and other people think.

For that matter, it’s a shame to see Geithner the slave to bow in front of the Chinese, and to delay the report on… (the alleged as they say !) currency manipulation by China (read here).

Even the Euro Zone is doing the same. The Great Greek Drachma Drama (copyrighted myself)  is… very convenient to say the least (on the short term, eventhough It’s a catastrophy on the medium term) to create a little bit of distrust… and to lower the Euro versus the Dollar. Enough to “boost” the famous german exports…

Boost. Stimulation.Throught debts and cheap (depressed) currencies. It’s the Dildo Economy on Prozac.

The whole freaking planet is running toward the Zero (as far as exchange rates are concerned). Happy and Stimulated. 😉 Have a Viagra, please.

Voila. Thailand is happy with a (small) recovery in exports… in order to please the clowns Korn and Abhisit so they can use the words “GDP growth” and “recovery”, leading to surplus. And those surplus are used to buy… US debts… allowing to keep a relative control on the USD-THB exchange rate. But meanwhile, those surplus and this fake “GDP growth” excite foreign money, oceans of liquidities… Leading to inflows (buy buy buy thai stocks !)… leading to a higher THB… leading to the need to further depress the THB if they want to continue to boost exports… with surplus… etc. etc.

It’s not even a vicious circle anymore. It’s a clown circle. A bozo circle.

Last but not least : the view with % of change year on year. I agree : the BOT seems to slowdown. But it’s too early to say.

(Source Bank Of Thailand, and US Treasury).

Chart, credit : total up… but down for businesses

Time to update our charts about… credit.

You know the motto : credit is the Grand Master Flash. The blood that flows into the veins of the Green Shoots’s Economy.

No credit = no money = no honey. 😉

This is why the clowns all the over the world are so totally obsessed with credit. They want you and the businesses to eat, to swallow, to digest credits, the more is the better.

Credit is the super charged drug for an inane and twisted economic system.

Anyway, enough of the big words. Let’s go back to our study : Thailand.

Total outstanding credit (at commercial banks) is going up. Total in january 2010 : 7 926 billions THB.

Party time Miam Miam !

But… credit for businesses is going down. I mean it’s obvious : the recovery is so strong, the Green Shoots are so Green that companies don’t need credit. They don’t have to invest. 😉

Individuals ? Going up very slightly. The big question mark is the group “Domestic Banks and Financial Institutions” that is responsible for the growth of total credit.

Let’s have a look inside this group.

60 % of the total outstanding credit amount of the group “Domestic Banks and Financial Institutions” = “Specialized Financial Institutions”, according to the BOT. Great. I mean, it’s very clear. 😉

What are they ? Who are they ? I don’t have a clue.

If we look at the weight of each group. Businesses represent now 45 % of the total outstanding credit at commercial banks (versus 60 % 4 years ago). Individuals, flat at 29 %. And we see the strong growth of the group “Domestic Banks and Financial Institutions” (20 % in february).

So let’s recap and what we should think about this ?

-commercial banks and “financials institutions” are borrowing from…  commercial banks.

-is it a way to blurr the situation, to prevent a honest assessment, or to makeup the statistics ?

-or is the proof that the system is perverted : banks are reluctant to give loans to businesses (too dangerous, because of the crisis)… they prefer to fuel the money into weird financial black boxes ? We don’t have indication on how the money is used after by those “Domestic Banks and Financial Institutions”.

-or is it the illustration of an evolution of the thai financial system : commercial banks are stepping back, and they let “specialized institutions” to deal with customers ?

I don’t have the answer.

I could just say : being old school, I still believe that a bank that doesn”t give a credit (because it can’t or because it refuses) to a business… is not a healthy sign.

A last one, before to hit the road :

(I didn’t represent the % of growth year on year of the group “Domestic Banks and Financial Institutions” on this chart, because It would be way too high). Businesses are still down 7,7 %, compared to january 2009.

(Source Bank Of Thailand, table FI_CB_015_S3).

Thai Airways : raising capital won’t be enough… 50 billions needed

Thai Airways International’s board of directors approved the Bt10 billion capital increase, which needs shareholders’ approval at the April 28 meeting.

THAI President Piyasvasti Amranand said that proceeds from the share offering will be used for general corporate purposes, including to manage its liquidity, finance future aircraft investments, strengthen THAI’s capital base, and repay its debts. (Nation)

And then a few days later:

Thai Airways International must raise Bt50 billion this year and next to repay debts and finance business expansion, president Piyasvasti Amranand said yesterday.

Funding will come from a share offering planned for later this year, bank loans and debenture issues.

Once the debt-to-equity ratio is halved from 4 at present, whatever is left over will be used for business expansion. […]

THAI recently won board approval to issue up to 1 billion shares, pending shareholder approval on April 28. The airline is now capitalised at Bt16.99 billion. […]

THAI is due to retire Bt29 billion worth of debts this year. Earlier, it was reported that debentures worth no more than Bt11 billion would be issued, to roll over maturing bonds. (Nation)

10 billions ? 50 billions ? Different tools but only one reality : Thai Airways needs money. Badly.

Not to expand the business (“whatever left…” like says the president) put to face its obligations : to roll over debts.

Healthy ? Of course not.

And don’t be fooled by the so called return to profit in 2009… It’s an illusion. Most of the airlines in the world are badly hurt.

The double dip recession is going to create a terrible cisor effect.

Apparently, the thai government (as main shareholder) has accepted to pay. The thai tax payers will pay.

Taxes : VAT up but corporate and personal income taxes down

knock knock…

The Finance Ministry has published data for february.

VAT collection was up by 23 %, compared to february 2009, at 39,05 billions THB.

Impressive ? It’s the base effect… What is interesting is that VAT was… down compared to the previous month (42,51). And to december (41,38). And to november (40,51). And to october (39,41). And to september (39,15). 😉

Seen under this angle… the message is therefore slightly different.

And what about corporate taxes ? Bingo. Down. Again. Ouch. And down on a year on year basis. -5,17 % at 14,17 billions THB.

If you believe that businesses should pay more taxes during a vivid and strong recovery, then you’re a dangerous terrorist. Or a very bad cook : you can’t obviously distinguish a Green Shoot Salad from a Green Shoot Goulash.

And, what about personal income taxes ? Recovery = more jobs = higher taxable income = higher taxes collections ? Again you’re wrong. Minus 1,76 % compared to february 2009, at 16,63 billions THB.

Amid the Red Sea, Internal Security Law, soon state of emergency… Abhisit praises the “recovery of the economy”

Thailand’s economy is steadily recovering as indicated by higher employment, Prime Minister Abhisit Vejjajiva said on Sunday.

“The Thai economy is clearly in a sustainable recovery after the Board of Investment last week revealed that foreign firms in the country have hired more employees in comparison to last year,” Mr Abhisit said.

[…] “The current political uncertainty in the country will have a short-term effect on the economy.

“But if the government can manage the problem, the international community will be able to see progress in the country’s democratic system,” the prime minister said. (Bangkok Post)

Short term ? 😉

Voluntarism ? At that point, it looks more like a pathetic black magic ritual… You know, after the Green Shoots Salad, we are experiencing the Voodoo Economy.

Amid a major anti government rallye, after imposing the Internal Security Act, after even talking about state of emergency, after taking refuge at the 11th infantery regiment… Abhisit continues, like a TV anchor, to read the teleprompter on which the magical word is screened : “recovery”.

The alleged Prime Minister should wake up a little bit and stop running amok like a headless chicken.

Or is It a ploy to appear zen ? Calm ? “My government is a puppet one, supported in parliament only by a group of MP who have betrayed Thaksin after being bought, and I’m in the middle of a sea of Red protesters… but I’m really cool. Life is sweet.”  😉

Beyond the classic thai arrogance (the frontier between arrogance and plain stupidity is usually very thin), there is a much more severe factor that Abhisit should take in account : the effects of bailouts and stimulus packages around the world are already losing steam.

Growth in China is on credit speed, and elsewhere the comedians are coming back after a pause (bought on credit too) : the tragedy of the recession starts again. It will be obvious in the second half of 2010.

Adding 1 (super deep politicial crisis in the country) to 2 (double dip recession worldwide)… that should lead Abhisit to remain cautious.

But no, never, it’s too much asked for a thai politician.

Chart : FDI (balance of payments) until Q4 2009

I woud like to bother you a bit. You’ re waiting for news about the Red Shirts Rallye ? Let’s talk instead about foreign direct investments. 😉

Here is an update of my chart about FDI with datas for the last quarter of 2009.

(Source Bank Of Tailand, table EC_XT_012)

A quick reminder : “Foreign Direct investment reflects the lasting interest of a
non-resident of an economy in a resident entity.”

There are 2 flows : inward (money coming into Thailand) and outward.

It’s easy to follow these flows, with the balance of payments.

Here is a document (PDF), from the Bank Of Thailand, explaining the statistics of FDI

How to read it ? On Q4, FDI reached 70 billions THB, a 18 % increase compared to Q4 2008.

Since mid 2007, there is a clear negative trend. It’s not surprising : why foreigners would invest amid such a political circus ? Military coup, bozo coup, Thaksin and the royal succession : all thoses words can be summarized : uncertainty.

And investors are afraid of uncertainty.

Q4 showed a strong push. But 2 things to remember : FDI data are always revised. And that could be a catch up effect, on dope, with the bailouts and other stimulus plans around the world (it won’t last).

So we should remain cautious.

Subsidies for agriculture cost 70 billions per year

The government may reduce subsidies for sugar and cane farmers later this year in a bid to curb public spending, Prime Minister Abhisit Vejjajiva says. […]

The study showed that subsidising the sugar industry had resulted in significant costs to the public purse.

The study also examined the impact of subsidising products such as rice, tapioca, longan, rubber and dairy goods.

The combined subsidies cost the government about 70 billion baht a year. The sugar and cane sector accounted for about 12-16 billion baht per year.

The cane and sugar industry has not followed market demand for three decades as the government developed a quota system to allocate supply for the domestic and export markets. (Bangkok Post)

Let’s be clear : to stop a system that… runs since 30 years is going to be difficult. That’s the problem with all those Lalapolicies and feel-good subsidies… they create deep market distorsions which are not sustainable on the long run, and very strong habits.

It’s like opium…

By the way It’s rather tasty to hear our dashing Prime Minister speaking about budget discipline and cut in public spendings… when the same PM decided to extend “the free electricity bill, bus and train rides for another three months” (Nation)… That means end of june (march + 3 months).

Total cost ? 4,5 billions THB.

😉

The same people talk to us about impressive GDP growth, recovery, Green Shoots… and meanwhile vow to continue the stimulus policy, the subsidy policy, the “don’t be afraid… everything will be fine tomorrow” policy.

Change ? Yes We Can (But Later).

And the worst is : virtually all the clowns in the world are doing exactly the same… Obama, Sarkozy, Trichet, Bernanke, Merckel, Brown you name them…

It’s not a club anymore : it’s a herd.

But guess what ? Reality dies hard : “unexpected” unemployment figures in the US, “unexpected” bad figures for the house market (new homes and existing homes as well), “unexpected” low figures for equipement demand, “unexpected” revision (up) of unemployment figures in France, “unexpected” budget disaster in Greece, “unexpected” grotesque “austerity” plan that will never be implemented, “unexpected” strikes in Greece, “unexpected” lies…

Eventually : “unexpected stupidity“.

An abundant commodity on this planet.

[I’ll back on line on march 8]

Chart, oil net imports, december : going down

A few days ago, we learned that :

Oil consumption in January dropped almost 10% compared to the same period last year and a month earlier, due to consumers’ lack of confidence, according to the Department of Energy Business. (my article here).

The EPPO (Energy Policy and Planning Office, Ministry of Energy) has published data for november and december. And indeed we can see a nasty trend at the end of the year, after a “Green Shoot” in september.

As I wrote (many times) : oil, energy if you prefer, doesn’t lie. Particularly for countries like Thailand.

When you see that diesel consumption is going down, then it’s a serious red alarm. Because, the internal and external trade (from agriculture to industry) is based mainly on trucks, and sea freight.

Let’s start with imports of oil :

Next, the most important : net imports (Thailand does export oil, so we look at imports minus exports to get the real domestic demand)

In december, net imports were at 400 000 barrels per day. Look at the yellow line… It’s a low level.

[next chart, we’ll look at diesel, gasoline and LPG consumption]

Chart, businesses creations and dissolutions for january : a pause

New company registrations increased last month by 40.5 per cent year on year to 4,644 firms, the highest figure in almost a century, thanks to the government’s stimulus measures and clearer signs of an economic recovery.

Moreover, the number of companies shutting down operations dropped by 5.35 per cent to just 1,238 firms, the lowest in nine years. (Nation)

Difficult to be dumber than Nation. It’s amazing. How they can write such a mountain of crap ?

The fact :
– a century ? In march 2006, a total of 4945 businesses were created. Is it a “century” ?
– nine years ? in august 2008 a total of 1012 businesses were dissolved. Nine years ?

Dumb as dumbass. And those guys are paid. It’s amazing. They’re even unable to go to see the figures published on the website of the Business Development Department.

Here are the charts.

As you can see, the damages were so high in 2009… that a little pause is perfectly normal. It can not be a sign of a change of the trend.

“The rising number of new firms and the drop in collapsed businesses shows the country’s economy is on the rise. More new firms should be seen in the next period, and that will help promote strong economic growth,” Banyong Limprayoonwong, director-general of the Business Development Department, said yesterday.

He forgets that the dissolution of a company can be… a long process. Therefore, we are going to continue to see corpses… Assuming that there won’t be a double-dip recession that would add to the massacre.

Thai Airways : Finances Minister wants to decrease state’s stake… or maybe not

Korn, the alleged Finances Minister, in Bangkok Post on february 15:

Korn: Ministry weighs reducing 50.1% stake
Finance Minister Korn Chatikavanij said the ministry was considering allowing private investors to hold a greater stake in THAI to help transform its status as a state enterprise, as well as reduce the government’s financial obligations.

And then Korn, still alleged Finances Minister, in Nation on february 16 :

Finance Minister Korn Chatikavanij said his ministry was ready to contribute more capital to Thai Airways International, to maintain its shareholding at 51 per cent.

I know… everything is perfectly normal. 😉

If you understand a little bit the “thai (air) ways”… then you know very well what happened… It’s very simple actually. Korn has been forced to eat his hat and to change his tune… in less than a day.

It’s enough to read the reaction of the Transport Minister (member of Newin’s gang, ex friends of Thaksin, who were bought by the Democrat Party and the Army in order to nominate Abhisit as Prime Minister in december 2008…) :

Transport Minister Sohpon Zarum on Monday voice opposition to Finance Minister Korn Chatikavanij’s plan to allow private investors larger equity stake in the national airline, Thai Airways International (THAI), which is a state enterprise.

As a national airline, Thai is a vital part of Thailand’s image, and is already listed on the Thai stocks exchange, Sophon said.

Vital part of Thailand’s image ? Ah ah ah. It’s huge.

Thai Airways is vital for all the crooks who use the company as a large honey pot. And they don’t want to share… with other –private- investors.

Korn is a little player… Too young… By advocating what would be actually an excellent idea (to let the private sector managing Thai Airways) Korn has obviously walked onto somebody’s grass… Much more powerful.

Therefore, a pathetic retreat “thai style” was the only way out. 😉

Poor Korn. It’s not because he was given this position that he should forget who are the real masters… His real masters.

In a word, he thought for one moment that he was really the real Finances Minister of Thailand. 😉

Poor Korn.