Integrity Legal

Posts Tagged ‘S&P’

7th August 2011

It recently came to this blogger’s attention that financial and economic analysts in China are rather pessimistic regarding the prospects of the American financial system in its present form. In order to provide further insight into these developments it is necessary to quote directly from the CNBC website, CNBC.com:

The man who leads one of China’s top rating agencies says the greenback’s status as the world’s reserve currency is set to wane as the world’s most powerful policy makers convene to examine the implication of S&P’s decision to strip the United States of its triple “A” rating. In comments emailed to CNBC, Guan Jianzhong, chairman of Dagong Global Credit Rating, said the currency is “gradually discarded by the world,” and the “process will be irreversible.” Dagong made headlines last week when it became the first rating agency to cut its U.S. credit rating from “A+” to “A” after policymakers in Washington failed to act in a timely manner to lift its debt celing…[sic]

The administration of this web log strongly encourages readers to click upon the hyperlinks noted above to read this article in detail.

It is this blogger’s opinion that although the American economy is in a rather precarious position as of the time of this writing, the one attribute most notable about said economy is her ability to recover and thrive even after a significant downturn. How the American economy and the United States dollar will fare moving forward remains to be seen, but it is clear that many in Asia monitor such developments closely as economic conditions in the United States can have implications for the Asia-Pacific region, the so-called BRICS countries, and the Association of Southeast Asian Nations (ASEAN).

In news directly pertaining to the Kingdom of Thailand and the Association of Southeast Asian Nations (ASEAN), it recently came to this blogger’s attention that officials in Thailand are attempting to provide ASEAN exposure to Thai small and medium sized businesses. To provide further information it is necessary to quote directly from the official website of the Bangkok Post, BangkokPost.com

The Thailand Plaza programme to help local small businesses gain exposure abroad needs a fresh focus with more showrooms in Asean countries, according to the Office of Small and Medium Enterprises Promotion (Osmep). The programme that originated during the Thaksin Shinawatra government focused on developed Western countries but the results were poor. The first plaza in the United States folded as the cost of maintaining the office was too high. Thailand Plazas, with a budget of 100 billion baht, are seen as having potential to become a key marketing channel for Thai small and medium enterprises (SMEs) to gain access to Asean countries. Yuthasak Supasorn, the Osmep director-general, said partners of Thai SMEs could also order products via Thailand Plaza outlets in each country.

This blogger asks readers to click upon the relevant hyperlinks noted above to read this article in detail.

As the jurisdictions which comprise the ASEAN community continue to expand economically it stands to reason that intra-ASEAN trade will be facilitated by programs like the aforementioned one noted in the quotation above. How the scheme above will ultimately be implemented remains to be seen, but clearly there is reason to believe that a program such as this could be beneficial for both ASEAN jurisdictions outside of Thailand and the overall Thai business community.

For information related to legal services in Southeast Asia please see: Legal.

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18th April 2011

It recently came to this blogger’s attention that there are important events occurring in the realm of finance as the United States recently appears to have had its sovereign debt rating outlook lowered by Standard & Poor’s. To quote directly from an article written by Robin Harding, James Politi, and Michael Mackenzie on the official website of the Financial Times at FT.com:

Standard & Poor’s issued a stark warning to Washington on Monday, cutting its outlook on US sovereign debt for the first time and throwing more fuel on the raging debate over America’s swollen deficits.

The agency kept America’s credit rating at triple A but for the first time since it started rating US debt 70 years ago, cut its outlook from “stable” to “negative”. A negative outlook means there is a one-third chance of a downgrade in the next two years.

The administration of this blog strongly encourages readers to click on the hyperlinks above to view this story in detail as further insight can be derived therein.

The ramifications of this announcement are likely to reverberate around the globe, but in the United States there appears to have already been at least a market reaction to this information. To quote directly from an article written by Larry Elliot posted on the official website of The Guardian at Guardian.co.uk:

US budget deficit has moved from a surplus at the turn of the millennium to a deficit of 11% by 2009. Shares fell sharply on Wall Street today after the ratings agency S&P issued a warning to the US government about its soaring budget deficit. In a move that surprised and rattled the financial markets, S&P said it was cutting its long-term outlook on America from stable to negative…In early trading in New York, the Dow Jones industrial average had lost nearly 250 points – 2% – with the dollar weaker on the foreign exchanges and yields rising on US Treasury bills. The FTSE 100 in London was also down 2% or 126 points at 5869.

Again, this blogger strongly encourages readers to click on the hyperlinks above to read further and gain greater insight.

Hopefully, the consequences of the S&P downgrade will be short lived for America and her People, but there are some who argue that further turbulence may be ahead as countries around the world are economically re-aligning in ways which are unprecedented.  To quote directly from an article written by David Marsh on the website Yahoo.com:

China and four other leading high-growth economies have taken landmark steps toward lowering the importance of the dollar in international financial transactions — part of a seminal shift in the move towards a multicurrency reserve and trading system…Addition of South Africa to the former BRICS format seems to have galvanized the grouping. The five countries agreed to expand use of their own currencies in trade with each other — an important step toward putting the dollar into a new downsized place. One key influence is the annual expansion of China’s trade volume with other core countries by 40% in 2010 — and the buoyancy looks set to continue. The BRICS’ state development banks, including the China Development Bank, agreed to use their own currencies instead of the dollar in issuing credit or grants to each other — and they will also phase out the dollar in overall settlements and lending among each other.

In the recent past, it seemed as though many were discussing an “alternative” reserve currency to take the place of the dollar in an international context. However, from the information which can be gathered above, it would appear as though the so-called BRICS countries (Brazil, Russia, India, China, and newly added South Africa) are moving towards something of a multicurrency system which, presumably, would incorporate the currencies, to one degree or another, of the member states noted above.

It is difficult to comment upon these events in detail at the time of this writing as the full ramifications of S&P’s downgrade, in conjunction with the BRICS announcements, could substantially impact the United States, Thailand, and the Association of Southeast Asian Nations (ASEAN) as a whole; since all of these entities have economic and political ties to the BRICS nations.

Concurrently, it would appear as though the Kingdom of Thailand remains something of an oasis of economic stability amidst the events unfolding above as tourism in Thailand along with the business of Thai Companies would appear to be steady. Currently, Thailand maintains thriving economic ties with the United States pursuant to agreements such as the US-Thai Treaty of Amity.

For related information please see: Thai business visa or US Company Registration.

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