Top De Tops

On the morning of December 8,1997, the government of Thailand announced that it was
closing 56 of the country's 58 top finance houses. Almostovernight, these private banks
had been bankrupted by the crash of the Thai currency, the baht. The finance houses had
borrowed heavily in U.S. dollars andlent those dollars out to Thai businesses for the
building of hotels, office blocks, luxury apartments and factories. The finance houses all
thoughtthey were safe because the Thai government was committed to keeping the Thai
baht at a fixed rate against the dollar. But when the government failedto do so, in the
wake of massive global speculation against the baht-triggered by a dawning awareness
that the Thai economy was not as strong aspreviously believed the Thai currency
plummeted by 30 percent. This meant that businesses that had borrowed dollars had to
come up with roughly one-thirdmore Thai baht to pay back each $1 of loans. Many
businesses couldn't pay the finance houses back, many finance houses couldn't repay their
foreignlenders and the whole system went into gridlock, putting 20,000 white-collar
employees out of work. The next day, I happened to be driving to anappointment in
Bangkok down Asoke Street, Thailand's equivalent of Wall Street, where most of the
bankrupt finance houses were located. As we slowly passedeach one of these fallen firms,
my cabdriver pointed them out, pronouncing at each one: "Dead! . . . dead! . . . dead! . . .
dead! . . . dead!"