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In Latest Sign Of EM Chaos, Turkey's FX Reserves Fall Below Key Threshold Ahead Of Pivotal Elections
One of the key things to understand about the veritable meltdown that’s unfolded across emerging markets is that there’s more to the story than the headline risk factors.
That is, while the list of proximate causes that includes a decelerating China, collapsing commodity prices, and uncertainty over when or even if the Fed will hike goes a long way towards explaining the carnage that’s unfolded across EM, each country has its own set of unique circumstances to grapple with. Indeed, the idiosyncratic political risks playing out across emerging economies have taken center stage as Brazil attempts to navigate congressional gridlock, Malaysia struggles with the 1MDB scandal, and Turkey faces new elections in November.
While there’s no question that the political situation in Brazil is particularly troubling, it would be difficult to imagine a more precarious scenario than that which exists in Turkey, where President Recep Tayyip Erdogan has managed to subvert the democratic process by starting a civil war, and thanks to the strategic significance of Incirlik, the effort is co-sponsored by the US and NATO.
Of course extreme political uncertainty, a bloody civil war, and an unfolding proxy war just across the border do not inspire much confidence, which helps to explain the fact that Turkey’s FX reserves have now fallen below $100 billion for the first time since 2012:
And here’s an updated look at the lira which is in the midst of a rather epic decline (which threatens to destabilize inflation) thanks to everything noted above combined with a central bank that either i) doesn’t understand the gravity of the situation, or ii) is loathe to hike rates going into the election:
If you think it’s bad now, just wait until November. If AKP doesn’t secure an absolute majority there’s no telling how Erdogan will react and if Ankara moves to nullify yet another democratic election by intentionally stirring up the PKK, you can expect outright chaos. We close by noting that data out today shows Turkey's manufacturing PMI fell for a second straight month in September and we also think it's worth highlighting the following excerpt from The Guardian which provides a bit of insight into what's in store going forward if Erdogan doesn't get his way:
Ahmet Hakan, a columnist for Turkey’s leading secular Hürriyet newspaper and a presenter on broadcaster CNN Turk, was followed home from the television station by four men in a black car late on Wednesday, before being assaulted near his residence, according to the Hürriyet editor-in-chief, Sedat Ergin.
“We see that it was an organised, planned attack,” Ergin was quoted as saying. Hakan was treated for a broken nose and ribs, the newspaper said.
The attack comes just weeks after prosecutors launched an investigation into the paper’s owner, Do?an Media Group, for alleged “terrorism propaganda“.
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Fuck Turkey and the fucking faggot donkey it rode in on (no disrespect to gays or donkeys). No love lost for these bastards.
yeah but they apparently have all of DC in their back pocket, just keep that in mind as we fuck them all.
Erdogone
Erdogan is probably the most hated f*ck in all of Europe, Russia, Syria and the USA.
He is why the Europeans are being invaded. He also lives in a 1500 room palace.
This f**ker really deserve a nail gun AND a wood chipper plus a guillotine.
ErrDOGman is a shoe-in the Face. The FX Reserves he's spent on training his ISIL ( Acronym for Waheebeegeebees ) Rentagades is flummoxing.
Just as Erdogan was finally exhibiting >95% of the physiological and psychological traits associated with dick-tators.
Would've been fun to watch another super-military-regalia-wearing sociopath strut around for a bit, before he's drone-stuck, of course.
I'd like to say I give a shit, but I am certain I do not!
Tough shit! Bitches!
Well, at least my FXCM account wasn't hacked. Although, they reset every user's pass-word. Scared the shit out of me at lunch when I went to log-in. Should have read my personal email first. To celebrate, I shall go long 1 µlot USDTRY; just to get a littel skin in that game.
The news of late leads me to suspect that Erdogan has been deliberately increasing the chaos in Turkey, pushing civil war with the Kurdish population in Turkey, and employing the ongoing war in Syria, to stampede the voters of Turkey into voting for him as the strongman who will stabilize matters. Crude, and extremely cynical politics.
Hitler was a gentleman in comparison to the SWINE that is ErDoGman.
The illegal brutal murder of Ghadaffi would be 100 times more befitting of the PIG BASTARD Erdogan.