Nah, it could never happen here...
BANGKOK, Thailand (AP) -- Thai stocks plummeted almost 20 percent at one point Tuesday in the most dramatic turmoil to hit financial markets here since the 1997 Asian financial crisis, rattling markets in the region.
Investors dumped stocks in Hong Kong, India, Indonesia and Malaysia amid contagion concerns that the plunge might to spread through the region and trigger the kind of slump that wracked Asia nearly ten years ago.
December 19, 2006
FLASH: Thai Stocks Plunge Nearly 15 Percent As Central Bank Curbs Foreign Inflows
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7 comments:
How does that saying go...a butterfly flapping wings...
Hmmmmmmmmmmm....
won't be long now.
IMPOSSIBLE! stocks always go up!
all kidding aside, we have Paulson and the Plunge Protection team to prevent a collapse such as that. Than again, they are meeting every 2 weeks now (as opposed to every few months before Paulson). What better way to bring the American Dumbass over to support the North American Union and the Amero?
A systematic collapse of the stock market - destroying EVERYONES 401k and at the same time destroying the dollar. With over 50 Trillion in debt, a worthless dollar and worthless stock in KBH or TOL the AMERO will save us all!
Oh and it looks like the NYSE is going to buy some european exchange. Hmmm, collapse the entire world's stock markets and make a fortune.
Crisis Over, go back to bed
Thailand Abandons Lockup on Foreign Stock Investments (Update3)
By Suttinee Yuvejwattana and Margo Towie
Dec. 19 (Bloomberg) -- Thailand's government scrapped currency controls on international investors one day after the central bank imposed them and sent the stock market plunging by the most in 16 years.
The government is removing a requirement that banks lock up 30 percent of new foreign-currency deposits for a year, Finance Minister Pridiyathorn Devakula said in Bangkok.
``The stock market has fallen too much today,'' Pridiyathorn told reporters at a press conference. ``This is the side effect of the central bank's measure, but we have fixed it already.''
Thai stocks erased $23 billion of their market value today after the central bank said international investors must pay a 10 percent penalty unless they keep funds in the country for a year. The currency controls triggered declines in other emerging stock markets by highlighting the risks of investing in developing economies.
The rules would have limited international investors to using 70 percent of their funds to buy Thai stocks. The requirements stay in effect on other investments, including bonds and property, Pridiyathorn said
Thailand's SET Index tumbled 15 percent to its lowest since Oct. 29, 2004. The index sank 108.41 to 622.14. Morgan Stanley Capital International's Emerging Markets Index fell 1.6 percent to 881.31 as of 2:33 p.m. in London.
Restoring Confidence
``It's very untimely, it's unwarranted and it's badly thought-through,'' said Teng Ngiek Lian, who oversees $1.6 billion in Asian stocks at Singapore-based Target Asset Management in Singapore, before the measures were rolled back. ``If they don't quickly restore confidence, the damage can be quite bad.''
The currency measures came after the baht appreciated to the strongest in nine years, even though the central bank this month introduced steps to limit gains. The monetary authority on Dec. 4 asked companies and commercial lenders not to sell baht short-term debt securities to overseas investors.
The baht had the biggest two-day decline since April 2005 on yesterday's measures.
A military coup on Sept. 19 ousted prime Minister Thaksin Shinawatra and ended seven months of political turmoil. Prime Minister Surayud Chulanont, installed by the military junta after the coup, is planning record spending on roads, subways and other infrastructure projects.
International investors sold 25.1 billion baht ($699 million) more of Thai stocks than they bought today, the largest net sales since at least Jan. 4, 1999, according to data compiled by Bloomberg.
To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at Suttinee1@bloomberg.net
Last Updated: December 19, 2006 09:39 EST
show's you how paralyzed the US fed will be - raise rates to protect the dollar and they crash the market. lower rates to save the economy and they crash the dollar
Wait, it gets better.
The, ahem, female finance minister has now reneged on the ruling.
After crashing the market, she found out the color of the Thai big board didn't match her shoes, so she "returned" the law for a refund.
source: Center for Responsible Lending conference call and
report, "Losing Ground," 19 December 2006]
REPORT SEES 2.2 MILLION FAMILIES FACING FORECLOSURE. In a
report that still understates the damage to be wrought by the
popping of the Greenspan housing bubble, the Center for
Responsible Lending (CRL) forecasts:
"As this year ends, 2.2 million households in the subprime
market either have lost their homes to foreclosure, or hold
subprime mortgages that will fail over the next several years."
The study also shows that the worst failure rates (21-24%) will
occur in the states which experienced the highest rates of
apreciation, such as California, New York, Maryland, and
Virginia.
A humanitarian disaster, "worse than Katrina" in the words
of one speaker on a Wednesday telephone conference call about the
new report, is about to hit.
Subprime loans, primarily made to black and Hispanic buyers,
made up nearly one quarter (in dollar value) of all mortgages
originated this year. The majority of these loans are not for an
initial home purchase, but for a refinancing of a mortgage
already gone bad. Prior to the recent housing market crash, many
subprime borrowers were able to hang on by refinancing on the
basis of appreciating equity paying their loans "in distress."
With the general collapse in real estate values, many of these
will now go into default.
But even without the collapse in values, the subprime market
was designed with a built-in time bomb. In testimony to the
Senate Banking Committee in September, Michael Calhoun, the
President of the CRL, showed an example of the most typical
subprime loan, known as a 2/28, with an "exploding ARM"
(adjustable rate mortgage). Buyers can qualify for this type of
loan if the original ("teaser") monthly payment is not higher
than 61% of their after-tax income. At the end of two years, even
without a rise in interest rates, the payment will typically rise
to 96% of the purchasers monthly income! No wonder then, that the
study conservatively forecasts that one-third of families who
received a subprime loan in 2005 and 2006 will ultimately lose
their homes!
The collapse of this market is already creating anger in the
black and Hispanic community which was sucker-punched into the
scam. A reporter from a Hispanic news serice asked on the
teleconference: "Will you now go back to those minority
organizations who were told `Hey, it's great to buy homes,' and
take responsibility for what's happened?"
Subprime borrowers are not protected by the same laws which
protect prime borrowers. Their position in litigation becomes
complicated and weakened because they are often not facing the
seller or even the first mortgage holder. Mortgages are packaged
and resold multiple times; the subprime mortgage broker has no
responsibility for the ultimate repayment of the loan. The Center
for Responsible Lending (CRL) and the Leadership Council on Civil
Rights are promoting legislation, sponsored by Reps. Barney Frank
and Chris Dodd, titled the Federal Anti-Predatory Lending
Statute, which aims to prevent some of the worst abuses occurring
at the time of sale, and to give more legal power to people in
foreclosure.
The threat of 2.2 million families (probably 10 million
people) facing foreclosure already puts the looming crisis on a
par with the Great Depression. Obviously emergency national
action against sheriff's sales and eviction, as proposed by
LaRouche, will be required of the next Congress. But millions of
higher-income families who qualified for standard mortgage
financing will soon also be facing catastrophe, as the collapse
of housing values puts them into what the President of the
National Association of Realtors called an "upside down"
(negative equity) position.
Keith-
Give the whole story on this one:
the Thai Gov't. was going to ask for huge taxes on profits from the Thai market. So people naturally pulled their money out.
Very quickly, the Gov't. said "Sorry, my bad, we won't do that after all."
Things will be fine and now every emerging market knows not to do that again!
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