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Thai businesses rue political gridlock as economy falters

Bangkok's middle classes have been at the heart of a three-month protest movement to topple Thailand's government, but as the strife drags on and the economy wilts the capital's business owners are starting to feel the pain. While the most committed say they are prepared to swallow the losses for as long as it takes, others say it is time for the protests to stop. No one is willing to bet on negotiations to end the political stalemate any time soon."I just want these protests to end," said Pornthep Chaisri, manager of Indie's Kitchen restaurant in the Silom business district near one big protest camp, which has seen customer numbers fall by around 80 percent."It's not good for business, or for the safety of those of us working in this zone. Some of my employees have to walk 5 km to get to work because buses can't get in here."The protesters want Prime Minister Yingluck Shinawatra to step down and an unelected "people's council" to push through unspecified political reforms. To achieve that they have blockaded big intersections in the capital and forced ministries and state agencies to close. Yingluck called a snap election but voting was disrupted on February 2 and she looks likely to head a caretaker administration for many weeks yet, unable to take policy decisions and needing permission from the Election Commission for much spending."We're trying to find a channel for dialogue but we're not talking to the protesters or the government," said Payungsak Chartsutthipol, head of the Federation of Thai Industries, one of several business groups that have tried to mediate.

He said his organization might appeal directly to the Election Commission to get certain budgets approved."The impact on business is not just in the protest areas now. It has spread much further. Merchants are being affected, and people can't sell ... Whether it's hotels or small vendors, everyone is affected," Payungsak said. A university survey released on Thursday showed consumer confidence, which reflects views on the economy, jobs and future income, fell to a 26-month low in January. Thailand's central bank slashed its growth forecast for this year to 3 percent last month and warned it could be lower as the unrest, which began in November, had affected consumption and investment.

"SHUTDOWN" In those areas where traffic has been blocked since a "shutdown" began on January 13, shops and restaurants have lost from 50 to 80 percent of their business. Chai Srivikorn, president of the Ratchaprasong Square Trade Association, home to upmarket malls and hotels, said daily retail sales in the area had fallen by 60 percent and hotel occupancy had dropped to 20 percent from 85-90 percent.

Protest leader Suthep Thaugsuban is popular in Silom, drawing cheering workers from their offices whenever his supporters march through, and some local business people back him."If my business fails and the government falls, too, then I'm willing to make the sacrifice," said the owner of a tea shop in the posh Dusit Thani hotel right opposite the protest camp, declining to be named. His business was empty and he was enjoying a smoke in the cigar shop next door. Customers had dropped by almost three-quarters, but he shrugged off the losses. "It's not such a huge impact that it would affect my business so much. This is just a hobby," he said, waving his hand through the air dismissively. In a nearby women's clothing boutique, where sales have dropped by a half, Tanawan Khontanarak fumed at such indifference."Those people are rich, but we're not rich. If my store is ruined, then I'll die - not just me, my entire family," she said bitterly, pointing towards the protest stage."My suppliers tell me the same thing: 'Be patient.' But if I don't have the money to pay them, will they be so patient with me? I don't think so. They say, 'When the government quits, things will be better,' but I don't think they will be." nL3N0LC31M

Update 2 sec commissioners dig in over money fund reforms

* Republicans Gallagher, Paredes offer "discretionary gating"* Analysts: commissioners aim to fend off further FSOC actionBy Ross KerberAug 28 The two Republican members of the U.S. Securities and Exchange Commission said they were "dismayed" by the agency chairman's comments in her push to reform money market funds, and called for new ideas such as giving funds more discretion to limit withdrawals in times of crisis. In a statement issued Tuesday, commissioners Daniel Gallagher and Troy Paredes also said they "do not intend to abdicate our responsibility to regulate money market funds." Analysts said that could make it harder for other bodies like the Financial Stability Oversight Council to tackle the issue, as SEC Chairman Mary Schapiro had suggested last week. The comments also showed the logjam at SEC over what to do about the funds, one of the most sensitive questions coming out of the financial crisis. Joan Ohlbaum Swirsky, a Philadelphia attorney who specializes in money funds, said she could not recall such a fierce debate at the financial regulator."I haven't seen them come to this kind of a gridlock," she said. On Aug. 22 Schapiro acknowledged that she lacked the votes on the five-member SEC to move forward with a proposal she said would strengthen the $2.5 trillion industry, which plays a key role in the financial system as a major buyer of corporate and government debt.

Schapiro - an Independent - had sought changes like requiring the funds to build up capital buffers or to move away from their policy of maintaining $1 per share net asset value. On Tuesday, in response to the SEC dissidents, Schapiro defended her process and said in a statement that she and her staff had in fact aimed to seek public comments on the very idea of withdrawal limits."Other regulators are now in a position to consider the Commissioners' views as they evaluate additional steps to be taken," she said. Schapiro's concepts had won backing from officials at the U.S. Treasury Department and the Federal Reserve, but the fund industry has fiercely opposed new reforms. It is unclear what moves other regulators might make, and November's elections could change the political landscape.

Schapiro has had an ally on money fund reforms in SEC Commissioner Elisse Walter, a Democrat. But the other Democrat on the body and the swing vote, Luis Aguilar, last week made clear he did not want to act without a deeper study of the cash-management industry whose investors, he worried, could be spooked even by small money fund reform steps. Aguilar's dissent showed sharp divisions at the SEC, and in their statement on Tuesday -- their first extensive comments on the matter -- the two Republican commissioners made the disagreements seem even more forceful. Schapiro's statement on Aug. 22, they wrote, "creates the misimpression that three Commissioners -- a majority of the Commission -- are not concerned with, or are somehow dismissive of, the goal of strengthening money market funds. This is wholly inaccurate," they wrote. The pair continued that Schapiro's proposal "is flawed because it is premised on an incomplete perspective on the 2008 financial crisis."

At the time one of the industry's best-known funds, Reserve Primary Fund, failed to maintain the $1 per share value investors expect and "broke the buck," dragged down by heavy holdings in the collapsed Lehman Brothers. Another 21 funds would likely have done the same without support from their sponsors, the Federal Reserve found in a study this month, and several government backstops were rushed into place. Schapiro's SEC had already agreed on rule changes in 2010 to make the funds more liquid and transparent. Gallagher and Paredes wrote that the evidence so far suggests those reforms have been effective, as evidenced by the funds' performance through the ongoing euro zone crisis and the 2011 U.S. debt ceiling debate. They wrote they would consider further reforms and studies and asked for staff reviews. In particular, they said the agency should consider what they called "discretionary gating". That would allow fund boards to restrict redemptions without having to liquidate funds, as is now required, and not coupled with buffers."Regrettably, the Chairman dismissed this approach," they wrote, airing out what had been an internal, but long-running, disagreement. Jerry Klein, managing director of Treasury Partners, a New York investment adviser that invests assets in money funds for corporate clients, said the statement shows there is still room for the SEC to take further steps. But it also shows the opposition that other agencies would face if they tried to encroach on the SEC's oversight of the funds, Klein said. Of the two commissioners, Klein said, "They clearly see money funds as their jurisdiction, and people whose responsibility it is to regulate banks and other parts of the financial system should stay in those markets."