Bill Gross

Bill Gross is out with his latest paper and he continues on his negative viewpoint on the world today with these keypoints

How policymakers plan to solve a long-term global debt crisis:
1. As in Japan, the Eurozone, the U.S., and the UK, central banks bought/buy increasing amounts of government debt (QE), then rebate all interest to their Treasuries and eventually extend bond maturities. Someday they might even “forgive” the debt. Poof! It’s gone.

2. Keep interest rates artificially low to raise asset prices and bail out over-indebted zombie corporations and individuals. Extend and pretend.

3. Talk about “normalization” to maintain as steep a yield curve as possible to help financial institutions with long-term liabilities, but normalize very, very slowly using financial repression.

4. Liberalize accounting rules to make some potentially “bankrupt” insurance companies and pension funds appear solvent. Puerto Rico, anyone?

5. Downgrade or never mention the low interest rate burden on household savers. Suggest

6. Begin to emphasize “fiscal” as opposed to “monetary” policy, but never mention Keynes or significant increases in government deficit spending. Use the buzzwords of “infrastructure” spending and “lower taxes”. Everyone wants those potholes fixed, don’t they? Everyone wants lower taxes too! 

7. Promote capitalism – even though government controlled, near zero percent interest rates distort markets and ultimately corrupt capitalism as we once understood it. Reintroduce Laffer Curve logic to significantly lower corporate taxes. Foster hope. Discourage acknowledgement of abysmal productivity trends which are a critical test of an economic system’s effectiveness.

8. If you are a policymaker or politician, plan to eventually retire from the Fed/Congress/Executive Wing and claim it’ll be up to the Millennials now. If you are an active as opposed to passive investment manager, fight the developing trend of low fee ETFs and index funds. But expect to retire with a nest egg.it is a problem that eventually will be resolved by the “market”.

Source: Janus Capital

 

Changes in FTSE:

These are the changes in the FTSE Indices for Thailand

FTSE SET Large Cap index

Inclusions: BJC

Exclusions: SCCC
Reserve : BEM / IRPC / DELTA / BLA / BANPU
FTSE SET Mid Cap index
Inclusions: SCCC / TFG/ BCPG / BAFS

Exclusions: BJC

FTSE SET Small-Cap index
Inclusions: VNT / TIP / ALT / RJH / ASEFA / EKH

Exclusions: TFG / CPTGF / GVREIT / TGCI

 

New Privy Council members

The new King Maha Vaijiralongkorn Bodindradebayavarangkun has appointed 3 new members of the Privy Council including 3 new names – Gen Dapong Satanasuwan (Education Minister), Gen Teerachai Nakwanich (the recently retired army commander-in-chief) and Gen Paiboon Koomchaya (Justice Minister) — from the Cabinet and reappointed 7 others, including Gen Prem Tinsulanonda remaining as Privy Council president. Cabinet reshuffle is expected after the appointments in order to replace the 2 positions. Those 3 new names  associated with the junta’s National Council for Peace and Order (NCPO) should somewhat indicate good relation between the army-gov’t and the King and again re-iterate smooth transition.

 

New train lines are a go!

BTS wins bids for two electric train lines worth more than THB100b.

Figure 1. Mass-transit routes in Greater Bangkok
  Yellow Line (Lat Phrao-Samrong)

A straddle-type monorail line

Pink Line (Khae Rai-Min Buri)

A straddle-type monorail line

Amount

 

THB51.9b THB53.5b
Domestic borrowing will be the main source of funding for almost all of the electric trains.
Status ·        BTS (with RATCH and STEC) wins bids.

·        Mass Rapid Transit Authority of Thailand (MRTA) will negotiate with BTS before seeking cabinet approval in Mar.

·        Contracts are expected to be signed by Apr.

Target completion date 2019 2019
Length 29.1km 34.5km

 

Last email for the year

It’s been a long 12 months, and I’m exhausted so this will be the last email sent out for the year,  there may be intermittent postings but no emails. So everyone, thanks for reading, have a great upcoming holiday season.

  1. Thank you for your insights and information over the last year. I know you are not allowed to comment on the sudden fall in equities prior to the recent event but it is a warning to long term SET investors like me. At present I am out. That said there is plenty wrong with the financial systems worldwide. I have been making money on the LSE with careful stock selection and light feet. I do not know how much longer I can do this, but if I could find a commentator in London with similar detachment and background as yours I would be a happy chap..
    Happy Xmas and a prosperous New Year to you Pon.

  2. In a word – thanks, Pon. You have been very generous in sharing your insights this past year and I wish you a Happy Christmas, good health and a positive mind for the upcoming New Year – one which is sure to be full of surprises. Not least, I anticipate that US/China trade negotiations will enter a new era. We live in interesting times.!

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