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Finance: Drop in oil prices can be a good thing

Legacy Phuket Gazette

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Finance: Drop in oil prices can be a good thing | The Thaiger

PHUKET: When it comes to investing, many make it more complicated than it actually is. What I try to do is use common sense and simplify the process.

The two big factors driving global markets right now are central banks and the drop in oil prices. Banks have been pumping trillions of dollars into the global financial system ever since the financial crisis of 2008 and 2009. This flood of money has caused the ‘bull run’ in stock prices over the past few years.

A lot of people were worried that all the printing by central banks was going to create inflation. This is what the gold bugs have been saying for the past few years. However, inflation has remained low and that’s why gold has dropped from more than US$1,900 an ounce to under US$1,300.

With oil prices now dropping from more than US$100 a barrel to less than US$50, that will further keep inflation in check. This is all good news for the stock market because inflation and stocks do not like one another. Inflation makes things more expensive and takes a bite out of corporate profits.

But the biggest beneficiary from the oil price drop is the consumer. Whether it’s the consumer in America, Europe or right here in Thailand, everyone benefits. By having to spend less on gas, the consumer now has extra money left over from their weekly paychecks.

It is estimated that the economies of North America, Europe and Asia will save anywhere between US$350 billion and US$500 billion due to the drop in oil prices. Last month in California, USA, one gallon of gasoline was US$2.50 a gallon down from US$4.25 in 2012. Even in Thailand to fill my tank costs one-third less.

This new-found money will go to fuel purchases of items such as cars, washing machines, TVs and other luxury items. Car companies will particularly benefit because consumers will buy more SUVs because of the lower gas prices. SUVs have higher profit margins than cars. This will boost profits at Ford and General Motors and take their share prices higher.

The one area short term where you don’t want to invest is in the oil companies. While no one can predict the price of oil, the fact remains that this price drop came about because of more supply than demand.

For the past six years, oil prices have averaged US$93 per barrel. This made every oil exploration project economically feasible. This included everything from oil sands to offshore drilling to Arctic exploration to shale exploration in the US. Oil companies and their investment bankers pumped billions of dollars into these projects. Now with oil below US$50, many of these investments are now underwater and that’s not good for oil stocks in general. Some companies will thrive and find ways to be more efficient and generate profit.

But even with this being the case, there are no signs that anyone is willing to slow down on pumping oil. OPEC is pumping at full throttle. So is Russia, Exxon Mobil, Chevron and every other major producer. They all need money and US$50 is better than nothing. The only way for prices to go back higher quickly would be for them to turn off the taps. I don’t see anyone willing to do that.

So, the question then becomes: how are investors to play this? There are several things investors can do.

One, investors want to stick with solid growth stocks like Apple and Facebook. Second, investors can play Ford and General Motors. Both stocks underperformed the S&P 500 last year and I look for a rebound this year. Third, as my readers and clients know, I like the Alerian MLP Index. With the increase in the supply of oil, the pipelines that transport oil will continue to benefit. Pipelines make money based on volume and not on the price of oil. This ETF also has a 6.48% dividend yield and pays a lot more than any of us are getting at Bangkok Bank.

Right now the best place for investors is the stock market. The average consumer is spending. I saw that on my last visit to the US where car dealers like AutoNation and CarMax reported strong sales. This is great news for the US economy. The drop in oil prices will only help keep this momentum going.

I know many are scared that they missed the boat, but it’s never too late. Take control of your finances and give me a call. I can help design a program that’s right for you based on your goals and requirement needs. Don’t wait another year and miss the opportunity of adding to your nest egg.

Don Freeman is president of Freeman Capital Management, a Registered Investment Advisor with the US Securities Exchange Commission (SEC), based in Phuket, Thailand. He has more than 15 years experience and provides personal financial planning and wealth management to expatriates. Specializing in UK and US pension transfers. Call 089-970-5795 or email: freemancapital@gmail.com

— Don Freeman

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Archiving articles from the Phuket Gazette circa 1998 - 2017. View the Phuket Gazette online archive and Digital Gazette PDF Prints.

Thailand

Facebook removes “information-influencing” pages linked to Thai military

Maya Taylor

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Facebook removes “information-influencing” pages linked to Thai military | The Thaiger
PHOTO: Facebook

Facebook has confirmed the removal of 185 accounts run by the Thai military and allegedly involved in information-influencing. The social media giant says the accounts were deleted for engaging in what it calls, “coordinated inauthentic behaviour”. In total, 77 accounts, 72 pages, and 18 groups have been removed from the platform, in addition to 18 Instagram accounts. It’s the first time Facebook has taken such action against accounts linked to the Thai government.

The accounts were associated with the Thai military and were targeting people in the southern provinces, Facebook said its regular report on coordinated inauthentic behavior. The south of the country has been the scene of decades-long conflict, with insurgent groups in the majority-Muslim, Malay-speaking region calling for independence. To date, around 7,000 people have died in the ongoing struggle.

Facebook says the deleted accounts were most active last year and used both fake and real accounts to manage pages and groups, both openly military pages and pages that hid their links to the military. Some of the fake profiles pretended to be people from the southern provinces.

The report mentioned a post by the now-removed account named “comprehending the operation” in Thai. The page posted the logo for Amnesty International Thailand and wrote “The NGO never cares about ordinary citizens because they have no role in society. Normal people are not famous. Any case is not big news. They are not worth the investment of foreigners so they will not do anything to help. This is why we don’t see anything from the NGO.”

Facebook removes “information-influencing” pages linked to Thai military | News by The Thaiger

Image overlay translates to “The NGO never cares about ordinary citizens because they have no role nor money.”

On another now-removed account, named “truth about my home Pattani” in Thai, a post said “Muslim leader declares southern border is a peace zone. The southern separatists started a movement by spreading the idea that Thailand is under control by different believers so that people would come and fight for their religion. This was declared that the action clearly violates Islam faith.”

Facebook removes “information-influencing” pages linked to Thai military | News by The Thaiger

Image overlay translates to “Southern border is not Jihad zone.”

When contacted by Reuters, the military had no comment on the removal of the Facebook accounts, with a spokesman saying the organisation does not comment outside of official press conferences.

The head of Cybersecurity Policy at Facebook, Nathaniel Gleicher, has confirmed the reasons behind the platform’s decision.

“This is the first time that we’ve attributed one of our takedowns to links to the Thai military. We found clear links between this operation and the Internal Security Operations Command. We can see that all of these accounts and groups are tied together as part of this operation.”

He adds that the accounts had spent around US$350 on advertising on both Facebook and Instagram. One or more of the pages had about 700,000 followers and at least one of the groups had 100,000 members. Gleicher says the accounts were removed because of their misleading behaviour and not because of the content being posted. The content included support for the military and the monarchy, with allegations of violence and criticism of insurgent groups in the south.

It’s not the first time accounts linked to the Thai military have been removed by a social media platform. In October, Twitter removed 926 accounts it says had links to the army and posted pro-military and pro-government content. The Thai army has denied any involvement with the accounts in question. In November, Twitter also suspended an account posting pro-monarchy content that was found to have links to the palace and to thousands of other accounts posting similar content.

To read the February 2021 Coordinated Inauthentic Behavior Report, click HERE.

SOURCES: Reuters| Facebook

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Central Thailand

Airline executive arrested for failure to pay wages of 150 workers

Maya Taylor

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Airline executive arrested for failure to pay wages of 150 workers | The Thaiger
PHOTO: Wikimedia

An airline executive has been arrested in the central province of Samut Songkhram, after complaints from150 employees that they had not been paid. Chawengsak Noiprasan, who had a court warrant issued against him in October, was taken to Don Muang police station from a property in the Bang Khan Take sub-district. He is a board member of Siam Air Transport.

The airline began operations in October 2014 with services out of Don Mueang to Hong Kong, using 2 Boeing 737-300s. 2 Boeing 737-800s were added to its fleet in late 2015. It expanded by adding Zhengzhou and Guangzhou in China to its network in early 2015. In late 2015, the airline launched flights to Macau and Singapore. In 2017, the airline ceased all operations.

But according to an article in the Bangkok Post, the carrier operates a number of scheduled and charter flights from Bangkok’s Don Mueang Airport. The Post reports that, as Chawengsak signs the company’s legal paperwork, all legal matters concerning the airline fall to him.

The Metropolitan Police Bureau says the executive has admitted to ignoring a 30 day notice issued by the labour inspector and ordering the payment of wages to 150 workers. It’s understood he is also wanted in relation to 7 other cases.

The authorities sought Chawengsak’s arrest following complaints from employees who say they haven’t received their wages for 2 months. It’s understood the airline had previously deferred salary payments for over 8 months. 150 workers filed an official complaint with Don Mueang police and also approached media outlets, asking them to pressure the airline into paying the money owed.

SOURCE: Bangkok Post

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Business

Governments & old media versus social media – who will win? | VIDEO

The Thaiger

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Governments & old media versus social media – who will win? | VIDEO | The Thaiger

We look at the recent changes made by the Australian and Indian governments to except control over the world’s biggest social media platforms. India has issued strict new rules for Facebook, Twitter and other social media platforms just weeks after the Indian government attempted to pressure Twitter to take down social media accounts it deemed, well, anti social. There is now an open battle between the rise of social media platforms and the governments and ‘old’ media that have been able to maintain a certain level of control over the ‘message’ for the last century. Who will win?

The rules require any social media company to create three roles within India… a “compliance officer” who ensures they follow local laws; a “grievance officer” who addresses complaints from Indian social media users; and a “contact person” who can actually be contacted by lawyers and other aggrieved Indian parties… 24/7.

The democratisation of the news model, with social media as its catalyst, will continue to baffle traditional media and governments who used to enjoy a level of control over what stories get told. The battles of Google and Facebook, with the governments of India and Australia will be followed in plenty of other countries as well.

At the root of all discussions will be the difference between what governments THINK social media is all about and the reality about how quickly the media landscape has changed. You’ll get to read about it first, on a social media platform… probably on the screen you’re watching this news story right now.

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