[Vnbiz] Inflation tests Vietnam's growth

[Tran Dinh Hoanh]

Dear brother Phong,

I have stated my position and will not repeat it.  I am simply annoyed by
smart mouths that love to spit out negativism without sufficient
understanding and proofs.  Why don't we stop talking for now and wait for a
while.  The Vietnamese government has been doing lots of intelligent moves.
I am willing to bet that Vietnam will fare this hard time better any country
in Asia.

Keep this message for future reference.

Have a great day!

Hoanh
______________


On Wed, Mar 19, 2008 at 7:23 PM, <Hong-Phong_Pho at ita.doc.gov> wrote:

> [ Vietnam Business Forum ]
>
>
>
> Dear anh Hoanh:
>
> I beg to differ with many of your critique of the Symon piece.  While not
> extra ordinary, it did a decent job of presenting the picture.
> Some of your hurried reactions had to do with your imprecise reading of
> the writer's words, and/or careless use/insertion of your own words.
>
> On the stock market and inflation; Mr. Symon wrote the stock market is
> "hit" by inflation, he did not say that the stock crash was "created" by
> inflation, as you implied.  If your hypothetical stock broker works on Wall
> Street, his environment is vastly different from the HOSE floor, where the
> majority are retail investors who are much more sensitive to speculative
> pressure or irrational depression, to borrow from Mr. Greenspan's phrase.
>  Can hyperinflation "create" a stock market crash?  You bet it can.  In
> Vietnam's case, if an investor took the risk in investing in stocks that are
> now yielding or growing less than 15% a year (inflation), he will quickly
> shift it out to other investments be it realestate, non-dollar foreign
> currency, or gold.  That's how inflation hit the stock market; a reasonable
> scenario.  If all investors decided to do the same, the market will indeed
> crash.  In a bear market, there will be those with either internale
> fortitute strong enough or pockets deep enough to buy up stocks at good
> value when others a fire-saling that will keep the market from crashing.
>
> On inflation and strikes;  Mr. Symon wrote "discontent over increased
> inflation is on the rise", a simple statement that can be verified with just
> about any wage earner.  Although you hedged with the conditional "may", your
> statement that "The labor strike in February may has nothing to do with
> February inflation." is not supported by the many articles already out
> there interviewing workers.  Every last one of them raised the high cost of
> living as a main factor.
>
> Cancelling a major international conference at the last minute is not a
> wise move; people have made arrangements and paid money to attend.  It shows
> a diffidence in the leadership.  That Vietnam is experiencing macroeconomic
> instability is not  exactly  unknown to the global investors.   Most
> financial managers/leaders would want to know exactly how bad things are and
> what the GVN is planning to do about it.  No news is the worse news.  This
> is not a time to circle the wagon, but to actively bring in and listen to
> investors who can help decide the most competitive sectors/opportunities in
> Vietnam.
>
> The ability to exchange currency quickly as needed is important to any
> companies that deals with foreign trade.  Not being able to convert your
> dollar earning from exporting into local VND to pay your workers and local
> raw materials certainly affects any company's opperation.  There are press
> reports of banks charging a fee to buy dollars, or to buy at all.
>
> Lastly, Mr. Symon wrote about the "isolationist communist era shell" that
> the GVN appears to be retreating into.  Please, please read carefully to see
> that the word "communist" here simply modify the word "era", and together
> they describe the word "shell".  Nothing here to get excited about.
>  Remember Vietnam is an economy in transition from a command model to a
> market model.  Any steps backward will be read as a retreat.
>
> To handle this storm well, the leadership of Vietnam must take the bull by
> the horn and show the world its determination to succeed.  It's no use to
> hide the fact that it (VN) lacks the technocratic expertise to tackle the
> very challenging market calculus that even the Greenspans and the Bernanke
> of this world, with all the tool and skill sets at their disposal have a
> hard time tackling.  If the PM listens to the same advisors who advocated
> circling the wagon and cancelling the Euromoney conference, and decided to
> stay in the safety of his shell rather than coming to visit the U.S. this
> year, it will be an opportunity missed.
>
> HPP
>
>
>
>   *"Tran Dinh Hoanh" <tdhoanh at gmail.com>*
> Sent by: vnbiz-bounces at mail.saigon.com
>
> 03/19/2008 12:26 PM   Please respond to
> vnbiz at vietlinks.net
>
>    To
> vnbiz at vietlinks.net  cc
>   Subject
> Re: [Vnbiz] Inflation tests Vietnam's growth
>
>
>
>
> [ Vietnam Business Forum ]
>
> Dear CACC,
>
> I have done a series on inflation issue so I am not going to go over them
> again.  Just want to say that Andrew Symon did a very poor job on
> "analyzing" the situation.  Ex:  He said the stock market is hit by
> inflation.  Sorry that is dead wrong  (Ask any stock broker whether he
> thinks that the stock crash was created by inflation, he will die laughing).
>  The stock crash create more inflation pressure.  Andrew got things
> backward.
>
> The labor strike in February may has nothing to do with February
> inflation.  Strikes have been there for a couple of years, and that is very
> healthy sign of labor sophistication.  It may indicate the wages have not
> been keeping up with inflationary prices, but the primary cause could be
> that employers are too cheap, not that inflation is too high.
>
> The cancellation of the EU investment conference was wise move.  You are
> in the middle of a bunch of issues (stock crash, inflation higher than
> normal) and you are trying to do some quick fix, what would investors meet
> in the middle of all that mess for.  It is much better fro everyone to wait
> several months to see how things settle, better or worse.  Wouldn't it
> better for both the government and the investors that way?
>
> And "foreign businesses in the export sector have been most adversely
> affected by the SBV's recent interventions. That includes the central bank's
> efforts to tighten the local money supply, which have made it increasingly
> difficult for firms to exchange foreign currency, primarily US dollars, for
> the local currency, the dong."  Is any firm already in any kind of trouble
> because they don't have enough dong?   That is unreal.   Actually these
> foreign firms in export sector should benefit from the SBV's action to keep
> the dong value relatively low (when they use the dong to pay for employee
> wages and other things) and from increasing demand for export.
>
> And what the crap is this: "Now the government appears to be crawling at
> least partially back into its isolationist communist era shell as it avoids
> a possible platform for criticism of its new, more restrictive policy
> settings."? Is there anything here to say communist or capitalist or
> catholic or Buddhist?  Crazy!
>
> I am confident that Vietnam will handle this current situation well.
>
> Have a great day!
>
> Hoanh
>


-- 
Tran Dinh Hoanh, Esq., LLB, JD
Washington DC
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