Why TMB (and maybe other banks) limits cash withdrawals to 5,000 THB with foreign cards ?

Published 26 December 2008 Bank watch , Economy 2 Comments

A thread on ThaiVisa Forum catched my attention. Some people report that “something is wrong” with their foreign credit cards… Cash withdrawals seem limited to 5,000 THB with ATM in Thailand.

One individual took even a picture of an ATM from TMB (Thai Military Bank) with a very explicit sign.

atmtmb2

I can confirm this with TMB (one of my business contacts called his TMB branch manager).

There is no clear reason given, excepted that “it’s BOT regulations“… And of course, there is no official announcement on BOT’s website.

So I repeat, I confirm the report of a limit of 5,000 THB per withdrawal with ATM from TMB. It means, you can take 2 x 5,000 THB for instance, during the same day.

But other banks (according to people on ThaiVisa) seem affected too.

The question now is : why ?

I’m baffled. I don’t see any logic in such regulation (since you can take several times 5 000 THB).

Is it just to count more… fees ? And why this opacity ? And if it was a regulation, why it doesn’t affect all the banks, and all the ATMs ?

A rather strange story.

[we would need more details on the type of cards too... Debit, credit cards]

Abhisit Santa Claus : the rescue package could reach 300 billions (or 200, or 180)

Published 26 December 2008 Economy , Politics 4 Comments

Santa Claus ? The new Prime Minister says now that the rescue package for the thai economy would reach 200 billions THB… or 300 billions… Last week, it was 180 billions.

Anyway, no one really knows, and probably even Abhisit himself doesn’t know. And it’s not relevant.

The thai politicians are just catching up with the global hysteria of “bailouts” and other “stimulus packages”…

Abhisit felt compelled to have his own… Even though the Bank Of Thailand, under heavy psychedelic drugs, sees that “economic sentiment and confidence in Thailand have begun to revive after the new government has been installed and is beginning to take action“. ;-)

This whole story is turning like a (bad) Benny Hill Show. With Abhisit in the leading role.

Thailand’s new government plans to spend 200 billion baht ($5.8 billion) early next year to boost the sagging economy and prop up falling commodities prices, Prime Minister Abhisit Vejjajiva said on Tuesday.

“Our economic measures will come out after our speech to parliament,” he told reporters after his first cabinet meeting.

“They will cover all sectors — agriculture, employment, tourism and business. They are all urgent tasks,” he said, without giving details.

Abhisit is due to deliver his maiden speech to parliament on Dec. 29, and is constitutionally barred from revealing details of his policies before then. (Rehttp://in.reuters.com/article/asiaCompanyAndMarkets/idINBKK7815220081223uters)

And the last version :

Abhisit said the government would expand its planned stimulus package to 300 billion baht ($8.6 billion) as it aims to boost its economy teetering on the brink of recession.

The spending will come from additional budget increases, loans from state banks to shore up commodities prices and re-allocation of unspent funds from local governments. (Reuters)

re-allocation of unspent funds ? It’s grotesque.

This “plan” is an absurd and lilliputian version of all the other plans in the US, Europe etc.

The BOT needs “more data” but sees an improvement of the confidence…

Published 25 December 2008 Economy 4 Comments

It’s only Christmas Day. Not April Fools’ Day. But we could wonder…

The economic sentiment and confidence in Thailand have begun to revive after the new government has been installed and is beginning to take action, according to the central bank.

Bank of Thailand (BoT) senior director for the domestic economy Amara Sripayak said the central bank continues to gather data on various segments of the economy to assess economic conditions in the fourth quarter of this year again because economic figures are so volatile.

However, many factors had begun to improve as could be witnessed by the lower interest rate, the oil price decline, and accelerated budget disbursements.

Given these factors, she said, domestic local economic performance might turn positive in the following period while the global economy would continue to slow.

Mrs. Amara viewed the budget disbursement would continue accelerating in a clearer manner.
Regarding export figures, the bank still needs more data from the Ministry of Commerce for consideration in due course.

She said the Fiscal Policy Office has projected that the economy in fourth quarter of this year would contract in comparison to the same quarter of 2007. (TNA)

They need “more data“. ;-) It’s really laughable.

And as usual, the wishful thinking… We have a new government (of very… high quality by the way), so it’s magic, confidence is back… It’s like a winning lottery ticket.

Sure oil could be soon cheaper than water… But many other indicators show that the thai’s economy is already suffering. And a contraction of GDP on Q4 seems already booked…

Property market : the Boiler Room announces a recovery in… 2011

Published 23 December 2008 Economy , Real Estate 9 Comments

From “everything is fine” to “we are in deep shit 1997 style”… in a snap of a finger.

Impressive.

But wait, there is more : the Boiler Room announces us the… date of the recovery !

Ladies and gentlemen, not 2009, not 2010… but 2011. ;-)

I feel like in a fish market.

Thailand’s property market cannot be expected to recover from the present slump until 2011, according to Aliwassa Pathnadabutr, managing director of international property agency CB Richard Ellis (Thailand).

She said the slump began in the final quarter of this year with demand in Thailand’s property market plummeting under the shadow of the global economic crisis.

“When we saw demand in the property market dropping, we suggested to our customers that they wait and see [what happens]. As a result our customers suspended investments of between Bt4 billion and Bt5 billion in the last quarter of this year,” Aliwassa said last week.

The company’s research shows that transactions have fallen in all property segments in the current quarter, some of them significantly, others slightly. This is a sign that the property market may fall by 10 to 20 per cent next year, the steepest tumฌble since the financial crisis in 1997, she said. (Nation)

That sounds great and quite reasonable.

Even more when we remember what the same company, CB Richard Elli, was saying exactly 2 months ago :

Thailand’s property market is well insulated from the global financial crisis as it is far less dependent on debt than most property markets, said real estate firm CB Richard Ellis Thailand.

I know, it’s tasty. I know, you love it, like I do. ;-)

I told them that this statement would be their curse. Like “our banking system is sound ” from Bush, Bernanke and Paulson last august…

And you can count on me : I will repeat it, over and over.

Anyway, let’s be fair. Only fools and stupid people are unable to change their mind. And CB Richard Ellis is certainly not stupid.

But, you know… it’s difficult to change. I mean really. Aliwassa did start on a good foot. But soon after, she… lost it.

“We believe that this recovery cycle will be faster than that after the 1997 financial crisis because global leaders such as the US, UK, Europe, Japan and China have launched measures to solve the problem. Meanwhile, Thailand’s property developers and finance firms are healthier, financially, than they were in 1997,” she said.

You see… It’s pathologic. The magic of the words, the force of the incantations, the power of the verb… But nothing substantial behind. Emptiness.

There is another expression to describe this devastating bias : wishful thinking.

See you in 2011…

Okay… Aliwassa is not paid to say “I don’t know”. But that would be refreshing.

“We don’t know. The crisis is so severe, so global, so pervasive, so… We have no clue. The historical points of reference don’t apply anymore. It’s impossible to foresee the future. Be patient. Stay on alert. Collect data. Take time to analyse all the differents views. And more importantly : stay humble.”

This is what I would like to hear from the Boiler Room.

[I wish you a happy Christmas. Time for a few days of rest. See you soon. Crisisfully Yours.]

Thunderstorm : thai exports crashed in november (historic drop of -18,6 % !)

Published 22 December 2008 Economy , Exports/Imports 17 Comments

It was a certainty. I wrote it (here and there). The only questions were the scale. And the timing. It has begun.

Thailand’s exports fell 18.6 percent from a year earlier to $11.87 billion in November, the first drop in five years, after a 5.2 percent rise in October, a Commerce Ministry official said on Monday. (Forbes)

The last negative value… was in march 2002. So it’s more than 5 years…

Furthermore, such a drop is historic. I’ve looked back at 1997… The previous largest drop was -15 %, recorded in december 2001.

The guys at the ministry are probably too shy to tell the truth. Look at the chart (source BOT) !

exportdrop

They can try to cover their arse, by saying that “the closure of Bangkok’s two main airports for five days in late November cost $1.3 billion in lost exports.“, that’s not the point and it should not blind us.

The party is over : trade is crashing in the world. The crisis is acute.

This morning, Japan released also some very bad figures for exports in november (a plunge of 26,7 % !).

Meanwhile, imports continued to rose… Consequence : the trade deficit explodes.

Imports rose 2.0 percent from a year earlier to $13.07 billion in November following a 21.7 percent rise to $15.82 billion in October.

- The November trade account showed a $1.2 billion deficit after a $558 million deficit in October.

Two weeks ago, the clowns of the Commerce Ministry were talking about cutting the export-growth target for 2009 to +5 %… Instead, they are going to have a freaking negative growth.

Two months ago, the BOT was talking about an export growth of +7 to 10 % for 2009… Fools.

Now the forecast for the coming months is very easy : we are going to see horrible declines in percentage (year on year). Because of the base effect.

And fundamentally, the situation won’t improve on the short term (on the contrary, the crisis is deepening).

So now the BOT and the government are on the front line.

They have only one solution to ease the pressure : to let the THB going down versus the dollar (read this article).

Fasten your seatbelts.

[the BOT will publish the details on december 31. I will update all my exports/imports and trade balance related charts beginning of january]

Chart, BOT’s reserves, the case of the forward positions : the coal mine canary

Published 21 December 2008 All Charts , Bank watch , Currency , Economy 14 Comments

I can hear you : what ? ! Another chart about the foreign currency reserves of the Bank Of Thailand, 2 weeks after the previous one ? ;-)

Yes. And believe me : it’s not over.

People are puzzled with the exchange rates. Some currencies are falling at light speed but… the THB is not moving a lot, particularly versus the USD (read here). Or more precisely : the THB is moving, but slowly, compared to other currencies.

So why is it important to study the reserves and to understand what the BOT is doing ?

The THB issue is linked to the foreign currency reserves. These reserves are a consequences of the BOT’s currency policy but also the tool to achieve or help to achieve (more or less) this policy. How come ? Simple. By selling and buying.

(Yes, it’s called “interventions”. Sorry, “currency management”. ;-) The BOT did it. And continues to do so, despite pathetic denials.)

For instance, if the BOT buys a lot of US Dollars (= by selling THB) the USD will go up, and the THB will go down. Offer and demand.

So overall, the reserves are an indicator, like a thermometer.

To summarize quickly the situation :

-the BOT was buying USD… until beginning march 2008… when the BOT removed capital controls. And when the USD stopped its free fall.

-until march 2008, the reserves and the forward positions were increasing together (the second adding more fuel to the first). Logic.

-the “peak reserves” was reached end of march, with a total of 110 billions USD. Since then, we are flat. 107 billions USD in december. So apparently, there is no pressure, no big movements.

botres1n1

(Source BOT)

But something has changed. A lot. The amount of the net forward positions. From 25 billions in march to 7 billions now.

What does it mean ? Official definition :

Forward positions = Bank of Thailand’s forward obligations to buy (long) or sell (short) foreign currency against Thai Baht.

For that matter, they are like a “peek” at how the reserves will behave in the future.

Here the future = between less than 1 month to 1 year maximum (the maturity). The website of the IMF gives us the details.

botdetail

Here (BOT’s figures for october), we see that 50 % have a maturity up to 1 month. Only 25 % of are up to 1 year.

Let’s take an example : in january you have 100 billions USD in you reserves. Plus a net forward positions of 10 billions with a maturity of 3 months. Let’s assume you don’t touch your reserves… In april, the new total will be 100 billions + 10 billions (obligations you took in january) = 110 billions.

This is why we can speak about “peek” into the future.

In order to study those positions, we will take the net amount (= buying - selling). It’s easier. And anyway, the BOT doesn’t have -yet- a lot in short positions.

So to summarize : the net forward positions = the net amount of foreign currencies the BOT will buy in the future (against THB).

Here is a chart.

botres2n

We see again the “peak” (march 2008) of the net forward positions. Since then, I think the picture is clear : we have a fall of the amount of net foward positions, and a fall of the percentage of those positions compared to the total of foreign currency reserves.

In other words, from the peak of 24 billions USD (25 % of the total reserve at that time), we are now at 7,2 billions USD (6,9 % of the total).

What does it mean ? The Bank Of Thailand reduces, almost week after week, its future positions, its commitments to buy foreign currencies (probably USD) against THB.

Let’s now have a look on the details per maturity (source IMF).

botres3n

But, we shall be cautious :

TRAP NUMBER 1
-we don’t know which foreign currency the BOT is buying (for the forward positions).

TRAP NUMBER 2
-we dont’ know the composition of the foreign currency reserves (it’s a secret). Tarisa, BOT’s governor, said last may “about 60 %” were in USD. We don’t have to believe her.

TRAP NUMBER 3
-all the figures given by the BOT are converted in USD. Mark to market. Therefore, for the weekly reports, all figures are accounted with the exchange rates of the current week…

TRAP NUMBER 4
-beware of optical illusions : since the BOT said that the reserves are “about” 60 % in USD… And if we assume that the other 40 % are in Euro, and if the exchange rate USD-EUR is going down (which is the case right now), then the part in Euros of the reserve (accounted in USD) will of course increase.

We could see therefore an increase of the total reserves accounted in USD… but it doesn’t mean mechanically that the BOT is buying more USD.

We had a perfect example of this between week 05/12 and 12/12, when the total foreign currency reserves went up from 103,4 to 104,8 billions. It was probably just because the Euro went up against the USD.

TRAP NUMBER 5
-Beware of the… context (global and local). This is not a perfect and unchanging world, like any central bank would wish it was. For instance : after a dramatic fall, the USD started an upward trend last summer. Globally.

On the local front : foreigners are leaving the Stock Market (SET, read here). This is not supportive for the THB (you sell your stocks, in THB, then you exchange those THB into foreign currencies, and then you get out the country). etc. etc.

THE QUESTION
Okay, that’s very nice, you could think, but what the hell is going to happen to the THB ?

Due to the forward positions, due to the fact that since the peak in march, the reserves didn’t increase… I would say that the BOT has been a seller of USD during the previous months… To support the THB (versus USD).

But the BOT is like all the other central banks : they are surprised (horrified I would say) by the speed of the economic downturn. And its scale.

Therefore, I’m not sure we should take the actions of the BOT until now as a sign of what they would do tomorrow. I believe they could change their mind quickly.

Until now, the BOT was very adamant to control the movement of its currency. And refused to cut interest rates like crazy, despite several calls from the previous governments and even calls for devaluation.

The keyword, the motto was : stability. It’s their obsession. Was.

But we know now that the political pressure (new government) + the speed of the economic crisis + the fact that the thai exports are going to suffer… all this leads to one solution : ease the pressure by allowing the THB to go down.

It’s the asian bias. China, Japan… they have all started to intervene… They want to stop (and reverse) the appreciation of their currency versus the USD. Because it’s killing their exports (very true for Japan).

And to kill exports in an export oriented economy doesn’t sound very good, right ? ;-)

I think the BOT will -at one point- follow the same path.

Therefore, I think the THB will go down versus USD.

THE JOKER
-But hey ! And this is the true frightening part… USA are doing exactly the same (but for different reasons, not exports). The USD is condemned to loose value. It’s inescapable (zero interest rates, massive printing of money, mountains of debts, etc.)

So you start to understand the problem : we have a freaking race toward zero, a race toward the bottom. What could happen if all the countries in the world see their currencies going down ? At the same time ? It’s insane.

TO SUMMARIZE
-the foreign currency reserves shall be observed closely. Because they are the result of a currency policy, and one of the tools to achieve this policy (despite the denials of the BOT).

-the forward positions play the role of the coal mine canary.

-we know for a fact : the BOT has stopped last march to buy foreign currency (USD) on a massive scale. The continuous drop of the net forward positions is the proof.

-it means that one (among many others) technical support for the USD versus THB is weakening. But it’s only 1 factor of the equation. And it could change.

[ You want to know more ? I wrote an article a few weeks ago to explain the tie between THB and USD, and why the THB doesn't move a lot, compared to other currencies, why it seems insulated from the big deleverage, from the current tornadoes on the market... read here and there ]

Abhisit government : list of the Frankenstein ministers and first critics

Published 20 December 2008 Politics 13 Comments

abhisitgvt

Nation has the official list, with the name of the party for each minister. Very enlightening.

Here are the positions given to Newin Friends (the MPs who betrayed the ex-PPP and changed allegiance).

-Deputy Agriculture Minister : Chartchai Pukkayaporn

-Transport Minister : Sophon Saram
-Deputy Transport Minister : Prajak Kaewklahan

-Interior Minister : Chaovarat Chanweerakul
-Deputy Interior Minister : Boonjong Wongtrairat

Very, very substantial payout for 25 MPs… Those are not ministerial portfolios anymore, but slot machines ! ;-) Well done Abhisit.

As someone said : “Many ministers were MPs that the Democrats voted to expel “. Indeed.

But there is more. Abhisit said that he would take “outsiders“, like the best and the brightest Kennedy (sorry Obama) style… At the end, we have only… two ! On a total of 36 Cabinet’s members.

And among them a former Army C-in-C , close to the 2006 coup makers, nominated… Defense Minister.

Talk about “outsiders” !

But there is more. The Foreign Affairs Ministry goes to Kasit Piromya… an ex-supporter and speech-maker of the PAD. You know what this guy said about the blockade of the airport ? That it was a “new innovation for public protests“. ;-)

Well done Abhisit. So much for the idea of boosting tourism and restoring Thailand’s image and confidence after the Suvarnabhumi nightmare.

Last but not least : the problem of private… business interests. Here it hurts too. Some people start to complain…

Dr Lertchai Sirichai, a lecturer at Walailak University, praised Democrat Party Phattalung MP Nipit Intarasombat for his public disclosure of the financial support given to the party by business tycoon Virachai Virameteekul, who is tipped to join the Abhisit Cabinet.

Virachai Virameteekul has been nominated minister of the Prime Minister’s Office… Virachai is an executive of the… Charoen Pokphand Group.

CP is the largest business conglomerate in Thailand. Apparently, CP group was a financial “contributor” for… the PAD. ;-)

So to summarize : Abhisit is a joke. And a liar. And a prisoner.

Prisoner from his shameful Frankenstein Coalition…

UPDATE
-Information and Communications Technology Minister : Miss Ranongruk Suwanchawee. Another very good joke from Abhisit. She was Deputy Finance Minister under… Samak. She’s a fan of the VAT and Google (but she was… a nurse in a previous life).

I even had an article about her (march 2008, read here). Here is a quote.

To a question regarding VAT and its impact on the poors, she said :

“I think the VAT is quite fair. It’s just the tourists who pay, don’t they ? Other people don’t have any problem”…

“I am trying to learn everything that is under my responsability. As soon as I learned about my appointment, I did a search on the Internet to see what the Finance Ministry actually does”. (Bangkok Post)

Do you see the level ? I mean do you see the FREAKING LEVEL ?

(But it could have been much worse : first, her party wanted to give her the… Industry Ministry !)

So there is no doubt : Abhisit is a clown. He has to be a pathetic clown to give a Ministry to this woman.

Beyond the quota system, beyond the fact that the Democrat Party has to pay a heavy price for the defectors (despite repeated Abhisit’s lies)… there must be limits to black humor.

Ranongruk as the ICT Minister is the proof that Abhisit doesn’t really understand those limits.

I hope that our new Prime Minister will quickly join his peers… Thaksin, Surayud, Samak, Somchai and all the clowns, into the History’s garbage bin.

UPDATE 2
But there is more.

-Commerce Minister : Miss Pornthiva Nakasai. Here, I would be tempted to say : “respect”. She is indeed in the trade. I mean linked to commerce. Because… she was running the Poseidon massage parlour in Bangkok. Do you know what is Poseidon ?

Next time, drop over. You’ll receive a lesson… in commerce. You’ll have to choose between the “super”, the “sideline” or the “models”. Hard life. ;-)

And like AbBKK said : we can already feel the… bubbles. And the soap.

Political reminder : New government = 2 bombs in the south

Published 20 December 2008 Politics , Terror In South 0 Comments

A crual political reminder. Just before the government composition was officially announced, 2 bomb attacks occured in the South. 1 killed and 11 wounded.

YALA

Four were injured when a bomb exploded in front a hotel in this southern border province Saturday evening.

Police said the explosion occurred at 6:30 pm in front of the Park View Hotel in Yala downtown.

Police said a homemade bomb hidden inside a pick-up truck exploded partially apparently because part of the circuit failed to be ignited. (Nation)

PATTANI

A bomb exploded in front of a department store in this southern border province at 6:10 pm Saturday, killing one person and injuring seven others.

Police said insurgents hid a five-kilogramme homemade bomb inside a motorcycle and parked it in front of the Pattani Supermarket and detonated it with a mobile phone. (Nation)

It can’t be a coincidence. Even though the level of violence has been reduced, the conflict in the South is still a burning political issue. Another one that the new Prime Minister Abhisit will have to handle.

He did it : the first nonsensical statement from Abhisit

Published 20 December 2008 Politics 8 Comments

I apologize  : I just can’t keep my promise to stop criticizing the new Prime Minister before next week (before the official nomination of the Cabinet’s members).

I just can’t.

You were hoping for “change” ? A new style in thai politics ?

Prime Minister Abhisit Vejjajiva disclosed Saturday that Democrat Party chief advisor Chuan Leekpai declined to tell him details about his dissatisfaction over the Cabinet lineup of the Democrat quota. [...]

Speaking to a meeting of Democrat MPs at a seminar on Koh Samui, Surat Thani, Abhisit urged Democrat MPs to tell him of their dissatisfaction instead of talking to reporters. [...]

“I whispered to him why he was angry at me but he has not yet answered my question,” Abhisit said. (Nation)

What the hell is he talking about ? Can you imagine a more nonsensical statement ? Democrat MPs can’t speak to Abhisit ? Give me a break.

Such idiotic statement proves 2 things :

-In addition to -inevitable- problems with the Frankenstein coalition members, Abhisit faces also issues with his own troops.

-Despite his promises, despite his appearances, Abhisit is nothing but a classic thai politician, who uses lies (see his interviews to CNN and BBC) and regular cheap rethoric with a pinch of zen bullshit.

Instead of saying : yes some of my troops are unhappy (so what ?)… he says that he asked, and they didn’t answer him, therefore the problem doesn’t exist.

Cheap, cheap, 3 satangs rethoric for god’s sake !

What a bad start.

In order to convince us, Abhisit will have to find more substance, real one, instead of nice haircut, sending… SMS to voters and nice smiles on TV…

“Once upon a time” : a short story to frighten the children and enlighten their parents

Published 20 December 2008 Politics , Press 0 Comments

You should read “Planning a coup ? Here’s how”, an article from Philip Golingai. He’s a journalist working for a malaysian newspaper.

I like very much this piece. Having the head into thai politics almost on a daily basis, it’s actually quite difficult to keep the broad picture in mind.

We have such a weak and short memory… It’s our curse.

Short stories are a very good mean to refresh it and to put the common sense back into its boots.

From the “happy military coup” in september 2006 to the Frankenstein coup 2 weeks ago, it’s a striking summary of Thailand’s history.

At the end, you’ll feel the “invisible hand”.

You might even be able to touch it.

;-)

“Without them, we wouldn’t have become the government”

Published 18 December 2008 Politics 21 Comments

Suthep [Democrat Party secretary-general] explained to the disappointed Democrat executives that it was one of the conditions sought by the Newin faction in exchange for their support for Abhisit, a party source said. Suthep was quoted as saying that, “Without them, we wouldn’t have become the government.” [...]

Many Democrat MPs at the meeting expressed displeasure with certain appointees. (Nation)

“Without them, we wouldn’t have become the government.” This sentence shall be repeated again and over again. Other keywords are “disappointed” and “displeasure”… We will probably hear them again in the future.

The government composition is not official yet, but Transports (blank check on a very fat bank account) and Interior (power) will go to Newin’s friends (the defectors, ex friends of Thaksin).

Abhisit can smile, can give as many interviews as he wishes on CNN, he can speak about “unity” and play the Obama Style, he will not erase this stain. This shameful stain.

He’s the Prime Minister thanks to a Frankenstein Coalition.

Next Page »

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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