The formula was something to the effect that given expected returns of 5 per cent in interest plus 15 per cent in exchange rate gains, it was reasonable for foreign investors to deposit 30 per cent of their inflows for a year because this represented only a 1.5 per cent opportunity cost.

I am sure a lot of detailed modelling and back testing was done to come up with the formula but the premises were simply not realistic.

Among other things they assumed that all foreign investors are US-dollar based and didn't take the stock or property markets into account at all.

Tarisa also still seems to believe that it was irrational panic that caused the record drop in the Stock Exchange of Thailand index not the capital control measures.

By now it should be obvious that all senior central bankers need to do a stint on a trading desk as part of their training to get a taste of the real world of capital markets in addition to their extensive theoretical learning.

Part of Finance Minister MR Pridiyathorn Devakula's contribution to the attempt at damage limitation was to suggest that only foreign investors got hurt and that retail investors will recover very quickly from the one-off hit. The reality is that Thailand is not more than about 2 per cent of a global fund's portfolio, which means that the damage inflicted to the average fund would have been very slight.

In fact most would not really care if Thailand closed down its capital markets to foreign investors through capital controls.

Thai retail investors, however, can only invest in Thailand and have suffered much more in relative terms. In fact black Tuesday wiped out entirely many local investors who were investing in stocks or futures.

Their brokers force sold their portfolios on the Tuesday, so they could not enjoy the rebound on the Wednesday after the flip-flop on capital controls. Black Tuesday represented a "fat tail" distribution probability in statistical terms, ie, an extremely unlikely event that can be devastating if it does occur, like a tsunami.

There was no way that retail investors could have prepared for this man-made financial tsunami that swept away their savings and they would be perfectly justified in initiating a class action against the financial decision makers to recover damages. Perhaps the next government will set up its own commission to deal with this issue.

Tech Analyst

Bangkok

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Positive implications of a stronger baht are ignored

A major news story recently has been the strengthening of the baht and the negative effect that will have on exports.

I have not seen any mention of potential benefits of the strong baht.

Imports should be cheaper. In particular oil imports should become cheaper which should have a flow-on effect throughout the economy with cheaper transport and fuel costs.

There was a big fuss earlier on about the rise in world oil prices with fuel and energy industries appealing for price increases on the basis of it. Logically we should be seeing the removal of those price increases now that the strong baht has reduced the baht price of oil products, but I am not holding my breath.

Gareth Clayton

Bangkok

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Rules for written Thai account for transliteration difficulties

Re: "'Suwannaphom' one of many transliteration complexities", Letters, December 26.

Surely John Arnone has been here long enough to understand the reasons for apparently misspelling place names and the like in the process of transliteration?

Both "Ubol - Ubon" and "Chon Buri - Cholburi" are simply representations of the same word, one being a conversion based on pronunciation, the other being a conversion based on the written spelling of the word.

To clarify, the equivalent to a written English "L", "Lor Ling", is pronounced "L" when at the beginning of a syllable (note that I write syllable not word) and pronounced "N" when placed at the end of a syllable. Hence the difference between the written Chol and spoken Chon as in Chonburi.

No doubt someone will comment how ludicrous this may appear but consider the English use of, for example, "gh" at the beginning of a word, as in "ghost" and at the end of a word, as in "cough, bough, dough".

This obviously explains why many words change in the process of transliteration, such as "sawasdee" to "sawaddee" where the second written "S", at the end of the syllable, is pronounced as a "T".

The list is endless and can only be remedied by someone making the decision about who should undertake the transliteration and what standard to use.

I do agree though that the name of the airport should, for international purposes, be written in such a way as to be readable by anyone familiar with Roman script so that it is correctly pronounced. In Thai script of course it will be read correctly by Thais.

Bernard Walker

Bangkok

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Iran has the right to peaceful use of nuclear technology

Re: "Iran should show some responsibility," Editorial, December 26.

Every religion demands self respect along with missionary zeal, integrity and chivalry from its adherents.

But it is amazing to see the followers of Islam (easily the most humane, progressive and modern religion) suffer unjustified humiliation all over the world.

The latest being the sanctions imposed on December 23 by the United Nations Security Council on Iran in the backdrop of its nuclear programme.

Nuclear energy for war purposes cannot be justified, supported or condoned.

On the other hand, nuclear energy for peaceful purposes ought to be supported. One of the main reasons this support is required is the economic benefit this technology  provides to the majority of countries that are underdeveloped or are in the process of developing.

Iran, or any other country for that matter, has the right to follow a civilian nuclear programme.

It is politically and legally absurd to believe that the rest of the world should be submissive and acquiesce to the UN on this when it is a matter of life and death to them.

It has fallen on Iran, the country which is presently in the eye of the storm, to call the UN's bluff and mobilise the international community to ensure that nuclear energy can be used for peaceful purposes and that nuclear weapons are not only not produced in the future but that existing weapons are destroyed in a timely manner.

Hem Raj Jain

New Delhi

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US exploits overseas pale in comparison to Hizbollah aims

To start with allow me to congratulate you on the editorial of the December 23 issue of The Nation ("Little seasonal cheer in Mideast", Editorial). It openly and candidly describes the situation not only in the correct light, but very importantly so, in a manner which any reader, even one not too familiar with the situation in the Mideast, can easily comprehend.

Normally I am not in the habit of arguing with other readers reacting to my views, as this may have no end.

I believe that every thinking person is entitled to express his own view. However, in the case of Richard's letter ("Iran only talks; Israel and the US have a history of doing", Letters, December 23), I have to deviate from this rule, as I feel that what is stated there cannot stand unanswered, or uncorrected.

I agree that the US has overtly, or covertly, overthrown a number of regimes which were not to its liking.

I agree that the US had no right to do this, other than in exceptional circumstances (example: the overthrowing of the Nazi regime in World War II and similar cases).

However, how can such actions be compared to the destruction of a state and the deportation, or "elimination" of its population, as called for by the Iranian president?

What the US is being blamed for doing by Richard, is being tried in Lebanon right now. Who is behind Hizbollah, trying to overthrow the legitimate government of Lebanon?

In reply to "Iran's right to question historical facts", may I suggest that Richard refer to the BBC website and read an article by the BBC correspondent in Iran on the conference he was referring to and its attendants.

One may or may not agree with Israel's actions and policies, but to try and deny the existence or the dimensions of the most evil crime in recent history, the Holocaust, is both vicious and a defamation of millions of victims.

May I also draw the attention of Richard to the fact that a state for the Jewish people in what was then an area called Palestine was contemplated and promised long before the Holocaust - see Lord Balfour's declaration of 1917. I wonder whose memory is short.

It seems to me that not only the Iranian president, but also Richard, should study some historical facts before making statements that are not only misleading, but also dangerous.

If Richard would like to really learn the history of the Middle East, I could suggest to him a number of scientific books dealing with this complicated subject.

I think the editorial could contribute to the understanding of the unfortunate situation in the Middle East.

Dr Abraham Z Simhony

Khon Kaen