• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

This Is What A Central Bank Losing Control Looks Like

Tyler Durden's picture




 

With chatter that over $3 billion has been thrown into the FX market to buy Turkish Lira, it appears the central bank is losing control quickly and Turkish stocks are tumbling. The Turkish Lira collapse almost 400 pips this morning to around 2.30 to the USD - an all-time record low as the combination of corruption, social unrest, and Fed taper are seeing hot money outflows faster than the Turkish Central bank can keep control. This is the biggest tumble in the Lira in almost 5 months as the Istanbul 100 (stocks) drops 2.9% - its biggest drop in a month; and Turkish bond yields are backing up to 2-year highs.

  • *TURKEY FX SALES TODAY REACHED $3B: HSBC CITES `MARKET PLAYERS'
  • *TURKISH LIRA WEAKENS PAST 3.15 AGAINST EURO IN ISTANBUL
  • *TURKISH LIRA WEAKENS TO NEW RECORD 2.3029 PER DOLLAR
  • *BORSA ISTANBUL 100 INDEX FALLS 2.9% TO 65,429.29 AT THE CLOSE
  • *TURKEY 2YR BOND YIELDS RISE TO 10.50%, HIGHEST SINCE JAN. 2012

 

Green arrows show central bank efforts to control the chaos...

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Thu, 01/23/2014 - 11:43 | 4358914 OldPhart
OldPhart's picture

Buy the plucking dip!

Thu, 01/23/2014 - 11:47 | 4358937 InjectTheVenom
InjectTheVenom's picture

I love the smell of central bank turmoil in the morning !

Thu, 01/23/2014 - 11:48 | 4358947 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The CBs around the world are like the Dutch boy putting his finger in the North Sea dike. The problem is there are holes everywhere and not enough fingers.

Thu, 01/23/2014 - 11:54 | 4358969 joego1
joego1's picture

The Fed has a secret plan to use Christies ass to plug our holes.

Thu, 01/23/2014 - 12:00 | 4358999 DoChenRollingBearing
DoChenRollingBearing's picture

But, so many holes...  Granted, they could plug ONE BIG ONE w/ Christie!

Thu, 01/23/2014 - 12:07 | 4359029 Pure Evil
Pure Evil's picture

Soro's must be in there whipsawing the ass raping to such a degree that I'm not sure we'll be able to save the victim this time.

Thu, 01/23/2014 - 12:16 | 4359061 NoDebt
NoDebt's picture

Dow off 200, gold up 20+ and still no ZH article declaring "This is it, boys!  This is the big one!  We're going over!  Everyone hold on!"

Disappointing.  Almost like the Tylers have lost to will to live or something.  Doncha know that's the stuff I come here for?

Thu, 01/23/2014 - 12:24 | 4359092 kliguy38
kliguy38's picture

That's because it ISN'T the end.......its been over for several years now and this is just an illusion for the sheep..........you're livin' on air......don't look down

Thu, 01/23/2014 - 12:32 | 4359116 Pure Evil
Pure Evil's picture

Jeeze, first ZH is accused of being doom and gloomer keeping the little people out of the market and denying them of a chance to reap the whirlwind, and now they're being accused of not be doomy and gloomy enough.

You're damned if you fuck her in the ass, and sent to prison if she's under sixteen if you don't, there's no catch 22 here folks, just move along.

Thu, 01/23/2014 - 13:50 | 4359459 BigJim
BigJim's picture

You must admit the 'And so it begins:' headlines have been a bit thin of late.

I always liked those. Even when 'it' never actually began.

Thu, 01/23/2014 - 16:36 | 4360097 Manthong
Manthong's picture

..does the well roasted Turkey come with gravy?

Thu, 01/23/2014 - 13:49 | 4359458 El Vaquero
El Vaquero's picture

Long Turkish Pinksocks. 

Thu, 01/23/2014 - 12:06 | 4359030 ParkAveFlasher
ParkAveFlasher's picture

He'll clog the pipes like Augustus Gloop in the Chocolate Factory.

Thu, 01/23/2014 - 12:23 | 4359083 Renewable Life
Renewable Life's picture

That's a big hole!!

What's even more exciting, is the prospect of all these global elites who have been made to think they were supermen by Benny Big Bucks, are about to feel some fear again!!

Watch out, there is no honor among thieves, they will turn on each other in minutes, if TSHTF!!!!

Thu, 01/23/2014 - 14:47 | 4359704 Boris Alatovkrap
Boris Alatovkrap's picture

BTFBLT!

Thu, 01/23/2014 - 16:40 | 4360105 Manthong
Manthong's picture

?? f'n BLT?

what does bacon have in common with turkey.. outside of some possible consensual barnyard encounters?

Thu, 01/23/2014 - 19:03 | 4360585 Boris Alatovkrap
Boris Alatovkrap's picture

"BLT" is popular sandwich in America, no? Bacon, Lettuce, Turkey, yes? Is Boris make of epicurean faux pas acronymn?

Sun, 01/26/2014 - 13:09 | 4368453 Jonas Parker
Jonas Parker's picture

Well done Boris! You'll fit right in here!

Thu, 01/23/2014 - 11:58 | 4358990 Headbanger
Headbanger's picture

If you like your central bank, you can keep your central bank! 

But seriously, this is a bad thing for Middle East tensions with Turkey getting moar stressed out economically they won't take any shit from their whacko neighbors just to their south!

Turkey is heavily armed with some of the most modern military gear. They also manufacture munitions for many foreign nations. And they are long time allies with Germany.

So watch out if Turkey goes on the march into Syria if there's any border attacks against them.

Thu, 01/23/2014 - 12:07 | 4359031 Canucklehead
Canucklehead's picture

If you look at logistics, Turkey is a paper tiger.  They may go into Syria, but they won't be able to do much in there.  Germany, Russia, et al would back Syria and the US would sit on the fence.

If you think Turdogan has problems now, wait until he starts a war he can't finish...

Thu, 01/23/2014 - 12:33 | 4359136 TBT or not TBT
TBT or not TBT's picture

As long as there's no endless corrupt UN mission, or NATO thing created out of this there's some hope.

Thu, 01/23/2014 - 11:58 | 4358996 Sudden Debt
Sudden Debt's picture

Like any priest would say: IF YOU SEE A HOLE, PUT YOUR DICK INTO IT!

Thu, 01/23/2014 - 12:00 | 4359009 DoChenRollingBearing
DoChenRollingBearing's picture

Stop giving them ideas!

:)

Thu, 01/23/2014 - 12:10 | 4359042 Pure Evil
Pure Evil's picture

As the famous line goes, "Never let a pre-pubesant rectumory go to waste!"

Thu, 01/23/2014 - 16:44 | 4360125 Manthong
Manthong's picture

stop giving them ideas ( :-) ...  we are all Jesuits now.

Thu, 01/23/2014 - 14:21 | 4359605 PTR
PTR's picture

Travelling salesman walks into a bar in a rural town, sits down and orders a beer.  

As he's nursing his frothy friend after a long, hard day, he see a machine at the end of the bar with a sign that says "Let me be your wife- $.50" with a hole underneath the sign.  

He looks around at the other few patrons, then asks the bartender, "Do guys really use that machine?"

Barteneder replies, "Yeah, from time to time," and goes about his work.

So the salesman sits and contemplates for a moment, then decides what the hell.

He goes to the machine, unzips his fly, sticks his dick in, and deposits $.50.

Suddenly, there's a blood-curdling yell resonating in the bar.  The bartender rushes over to the salesman and the machine and asks, "You alright pal?  The machine break on you or something?"

The salesman replies, "No, the machine works fine, but I didn't realize it was going to sew a goddamn button to my cock!"

Thu, 01/23/2014 - 14:13 | 4359577 Bangin7GramRocks
Bangin7GramRocks's picture

"So many little holes, so few fingers." -Bill Conlin

Thu, 01/23/2014 - 11:50 | 4358957 LukeWorm
LukeWorm's picture

I love the smell of smoked Turkey in the morning ;-)

Thu, 01/23/2014 - 12:08 | 4359035 Crash Overide
Crash Overide's picture

Turkey has been around for a while, even before central banking. They will be fine...

Thu, 01/23/2014 - 12:38 | 4359153 TBT or not TBT
TBT or not TBT's picture

Well there are two turkeys. One is dying out. The secular westernized state of Kemal Atataturk. The ascendant one is backward and Islamic. They've been outbreeding the western secular educated bunch for a long time and that's what is doing Turkey in socially and economically. It is redescending into tyranny. Has redescended. It's not coming back out either. The momentum downward is all in the demographics.

Thu, 01/23/2014 - 12:37 | 4359150 Kirk2NCC1701
Kirk2NCC1701's picture

Wait & see.  The Turkish stock exchange is well known (by the informed) that it is volatile. 

It can have tremendous gains in a year, and almost equally tremendous drops.  Hedge/invest accordingly.

Thu, 01/23/2014 - 11:50 | 4358958 Bearwagon
Bearwagon's picture

Thar she blows!

Thu, 01/23/2014 - 11:52 | 4358964 kralizec
kralizec's picture

Yes you can!

Thu, 01/23/2014 - 11:55 | 4358978 onewayticket2
onewayticket2's picture

"if you like your exchange rate, you can keep it!"

Thu, 01/23/2014 - 11:57 | 4358989 Mesquite
Mesquite's picture

Hey, any excuse to get the mkt off the ceiling will do...

Thu, 01/23/2014 - 12:36 | 4359149 mclant004
mclant004's picture

Does Turkey have an economy and a debt position to recover from this or is it another Greece?

Dont know much about the country except it has a big army and its in a dangerous part of the world!

Thu, 01/23/2014 - 15:25 | 4359859 americanspirit
americanspirit's picture

Hi mclant004 - good questions. Turkey will not be another Greece. Lots of reasons. There is a huge and viable middle class - extraordinary literacy rates, huge small business community, lots of very strong towns with their own financial resources ( eg tax base). The army is professional,and by and large respects the constitution - not a bunch of thugs in uniforms. They sit on top of huge mineral resource reserves, and they contrl vast fresh water resources. Their agricultural sector is very strong. They control a hugely strategic waterway - international trade. And they have lots of gold. Those are just a few points in Turkey's favor. Of course, a really determined set of central bankers with assistance from the likes of JPM and GS can destroy any country.

Thu, 01/23/2014 - 11:43 | 4358916 ParkAveFlasher
ParkAveFlasher's picture

Gold, bitchez!

Thu, 01/23/2014 - 11:56 | 4358986 DoChenRollingBearing
DoChenRollingBearing's picture

Yes, + $20 or so today alone.

So many great places NOT to invest (China, Turkey)!

Thu, 01/23/2014 - 11:43 | 4358919 wisehiney
wisehiney's picture

They had better go hide out in the "strong" dollar and "safe" US treasuries.

Thu, 01/23/2014 - 13:54 | 4359483 BigJim
BigJim's picture

Loves me some of that green paper. You can't go wrong with a piece of paper adorned with a dead President!

OT - isn't having Andrew Jackson's visage on central bank derived currency just the bestest bit of monetary  irony? Of all the presidents to choose, I'll bet that gave the Rothschilds the most pleasure. Take that, killer of the 2nd National Bank of the US!

Thu, 01/23/2014 - 11:45 | 4358926 Cursive
Cursive's picture

The last 12 years have been a slow motion train wreck.  It looks like the horizon is approaching faster now, though....

Thu, 01/23/2014 - 11:54 | 4358971 Save_America1st
Save_America1st's picture

and the deepest mother F'er of all cliffs is on the other side of that fast approaching horizon. 

Me thinks Hell is waiting at the bottom of that pit.

Thu, 01/23/2014 - 11:59 | 4358994 teolawki
teolawki's picture

Nah. Hell is just a pit stop on the way down.

Thu, 01/23/2014 - 11:45 | 4358927 firstdivision
firstdivision's picture

Its time to buy SPY and sell USO, though someday soon it'll be sell both.

Thu, 01/23/2014 - 11:45 | 4358931 youngman
youngman's picture

Its that word ....FAITH....its all these paper money economies have left..lose that and you lose it all

Thu, 01/23/2014 - 11:56 | 4358983 eclectic syncretist
eclectic syncretist's picture

Amen to that brother.  When people start to wonder if this shell game is being played without a ball, which it is, the game is worthless.

Thu, 01/23/2014 - 11:45 | 4358932 Calculus99
Calculus99's picture

Corruption folks, this is what happens when the curtain is finally pulled back.

The sad thing is that EVERYONE knew there was monkey business being carried out behin the curtain but as things were ok at  that moment there was no need to look.

Sound familiar?

 

Thu, 01/23/2014 - 11:45 | 4358936 cliffynator
cliffynator's picture

Didn't the last two World Wars start in Turkey?

Just sayin'...

Thu, 01/23/2014 - 11:56 | 4358979 LukeWorm
LukeWorm's picture

WW One : "immediate trigger for war was the 28 June 1914 assassination of Archduke Franz Ferdinand of Austria, heir to the throne of Austria-Hungary, by Yugoslav nationalist Gavrilo Princip in Sarajevo."

WW Two : " is generally said to have begun on 1 September 1939 with the invasion of Poland by Germany and subsequent declarations of war on Germany by France and the United Kingdom."

Just checking  (Wikipedia) ...

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