Archive for the 'All Charts' Category

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 ! πŸ˜‰

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)Β  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. πŸ˜‰ 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. πŸ˜‰

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. πŸ˜‰

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. πŸ˜‰

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…Β  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).

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). πŸ˜‰

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.

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. πŸ˜‰

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 : β€œForeign 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.

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.

Chart, exports, december : strong growth from China

(source Bank Of Thailand)

They did it. The group China+HK+SK+Taiwan managed to order more from Thailand in december, compared to the “Thai Peak Exports” that is to say july 2008 : +3 % at 109,88 billions THB.

China alone went from 55,1 billions to 61,8 billions THB.

Here is the chart.

In december, thai exports reached a total of 482,16 billions THB, versus 459 billions in november, and 404,31 in december 2008.

That’s a +19,2 % growth, year on year.

The percentage is impressive, but it’s the base effect. December 2008 was the “hell hole” of the crisis.

As we can see on the following chart, we are still 10 % off from the Thai Peak Exports (july 2008). But the gap is closing quickly.

Now the view per areas/groups.

The picture is very clear : Thailand is pulled by… Asia : Asean and China…

e could even say : China alone, because part of the demand for thai good originating from Asean is directly linked to trade with China (raw materials are processed, then reprocessed, etc.).

Sustainable ? We’ll see.

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.