Dec 06 (1/3): Turkey at Home

Things in Turkey are going predictably, which is to say, under the conditions Erdogan has placed it, badly.

Let’s start with a snap shot of the economy and then work though to where Erdogan is at.

Ahval: Turkey interest rates negative after inflation accelerates – columnist

Interest rates in Turkey have turned negative after inflation accelerated last month, according to Alaattin Aktaş, a columnist for financial daily Dünya.

Interest rates on lira savings offered by the nation’s banks vary between 8.9 percent and 10.39 percent, averaging out at 9.92 percent, net of taxes, Aktaş said on Thursday. Meanwhile, consumer price inflation has climbed to 10.6 percent from 8.6 percent in November, giving savers a negative real return, he said.

Turkey’s government has pressured banks to lower the interest rates they charge consumers and businesses for loans as it seeks to lift the economy out of a painful recession. That has forced banks to lower rates they pay on deposits – their main source of financing for lending.

So finance is in bad shape. That’s bad for lending which is bad for business owners large and small, it increases economics uncertainty, etc.

It’s not good.

One might think that, given his extensive power in Turkey, Erdogan could lean on the banks to alleviate problems here.

Except that finance doesn’t actually work that way.

Ahval: Turkey’s Halkbank losing support as U.S. sanctions loom 

Turkey’s Halkbank is struggling to find funding following its indictment by U.S. federal prosecutors last month, since international banks are wary of lending to the majority state-owned Turkish bank as it may be hit by U.S. sanctions, an S&P Global report said.

The report said that Halkbank had not put any funds aside for the potentially large U.S. fines.

“The bank thinks the case is politically motivated and there isn’t any wrongdoing in its banking operations, and so hasn’t taken provisions,” S&P Global quoted Recep Demir, an analyst at Istanbul’s Garanti Securities, as saying.

Halkbank was unable to carry out a semi-annual rollover of syndicated foreign-currency loan facilities in September, the report quoted analysts as saying.

“International banks don’t want to lend through international syndications for fear of there being potential problems,” said Demir.

This affects Halbank’s profitability and is bad news for the Turkish government, which is pushing its state-owned banks to lend more in an effort to boost the struggling economy.

There’s a reason finance people use terms like “good faith” and “trust” and “confidence.”

Probably not surprising this system isn’t working out for Erdogan right now.

Bloomberg: Turkey Working on Bad Debt Roadmap to Boost Lending, Growth

Turkey is working on a plan to rid banks of their non-performing loans as policy makers step up attempts to boost lending and growth.

The banking regulator, known as BDDK, will soon ask the nation’s lenders to slash the bad-debt ratio in their balance sheets so that credit to industrialists starts flowing again, according to people with direct knowledge of the matter.

As part of a plan that’s been approved by the Ministry of Treasury and Finance, the regulator will ask commercial banks to develop their own roadmaps to lower NPL ratios, one of the people said, asking not to be identified because the discussions have yet to be made public.

Lenders will either have to sell bad debt to investors or increase the size of their loan books to push down NPL ratios. Banks will have until the end of 2020 to meet bad-debt targets, and the regulator will check progress monthly. Both the ministry and the banking regulator declined to comment.

I haven’t reviewed this kind of finance stuff in years. But I do know that if it was easy to get rid of or otherwise deal with bad loans, banking would be far less interesting and far, far less lucrative.

Picking bets under conditions of uncertainty is the game. If we could just decide which would be good and which would be bad, there’d be no money in it.

So if anyone was sniffing that this might be some bullhockey, it probably won’t surprise you that Erdogan, despite all of Turkey’s bad news, economic and otherwise, has gone ahead and raised the national growth estimates substantially.

President Recep Tayyip Erdogan’s government dramatically increased its 2020-2022 economic growth target to 5%, arguing it can be achieved without stoking inflation and generating the yawning current-account gap that dogged previous upswings. Success will hinge on the strength of the private sector, investment and exports.

Because that’s how that works. If only.

He must be very used to things happening just because he says so. I wonder how he feels about the impertinence of weather.


Turkey’s banking regulator in September told lenders to reclassify 46 billion liras ($8 billion) of loans as non-performing by the end of the year. Bloomberg reported on Thursday that it later decided to let lenders determine which company loans need to be reclassified as non-performing, and revised how banks classify credit to once-troubled companies, potentially helping them avoid adding more problem loans to their books.

So it looks like Erdogan at least might let the banks work stuff out for themselves so as not to take the whole thing down with him, I guess.

There’s not a lot to suggest that the forces of public opinion are going to shift in Turkey’s direction on this to help alleviate the problems, either—especially as things like the existing boycott of Turkish goods could always pick up too.

Plus there’s that increasing number of protests happening around the world too. So, if anything, there could be more pressure coming. (See below.)

So while things can always change, financial and economics expectations can be expected to be baked in for awhile.

Which continues the state of not good.

That certainly doesn’t help Erdogan who, between all this finance stuff and his ridiculous domestic plans, still wants to fight a war and build his uber palace

But yeah: He’s a mega-maniacal wanna-be tinpot messiah dictator jerkwad.

I get it. These guys get disconnected from reality—I watch movies.

As might be expected, political pressure is rising and the locals are feeling restless.

Bloomberg: Turkey Turned Into ‘Middle-Earth’ Under Erdogan, Opposition Says

Turkish politics is having another run-in with the inhabitants of “Middle-earth.”

Meral Aksener, leader of the opposition Iyi Party, has invoked British author J.R.R. Tolkien and his epic fantasy novel “the Lord of the Rings” in rounding on President Recep Tayyip Erdogan’s almost absolute grip on power.

“The Ring is the executive presidency,” Anadolu Agency cited Aksener as saying on Tuesday in Ankara, referring to Turkey’s presidential system of governance that’s been widely criticized for weakening the state’s separation of powers since it was introduced last year


And don’t forget: Dem’s fightin’ words with Erdogan!!

In 2016, a court found a family doctor guilty of insulting Erdogan via a social media post that appeared to compare him to Gollum. The Lord of the Rings director Peter Jackson weighed in on that case, saying that the pictures posted were rather those of the character’s alter-ego, Sméagol.

What an impossible jerk. How thin skinned can he be?

I wonder if it’s occurred to anyone to tell him that Lord of the Rings is a Christian allegory for the Messiah. And if he would even understand it if they did.

By the way, you heard it here first: Bloomberg News is getting feisty about totalitarianism lately. All over Russia and China and stuff too.

Ahval: Istanbul’s İmamoğlu among Bloomberg’s top people of 2019

Bloomberg has chosen Istanbul’s new mayor Ekrem İmamoğlu, who was elected this year after a rerun vote on June 23, as one of the top 50 people of 2019.

İmamoğlu declared victory with a narrow margin of 14,000 votes in the local elections in March, in which Turkey’s ruling Justice and Development Party (AKP) also faced a defeat in the capital Ankara and several other major provinces.

Citing suspicions of electoral fraud, the AKP appealed against the results and the country’s Supreme Election Board (YSK) scheduled a rerun in June. İmamoğlu this time won the mayors’ seat decisively with more than 800,000 thousand votes more than his rival, Binali Yıldırım, a former prime minister for the ruling party.

İmamoğlu’s victory was important both politically and economically. Turkish President Recep Tayyip Erdoğan’s rise to power started when he was elected as Istanbul’s mayor in 1994.

Meanwhile, a defeat in Turkey’s financial powerhouse also meant losing control of the municipality’s budget, which under AKP municipal administrations was often funelled to charitable foundations and pro-government companies.

report compiled by the Istanbul municipality in January showed that 848 million liras ($145.6 million) had been transferred to a list of foundations during the previous two years of the AKP-led administration.

And Bloomberg News chose this guy as one of their people of the year? Ooh! Ooh! Lemme see! Lemme see!

Bloomberg: Ekrem Imamoglu, Istanbul’s Oppo-Party Mayor

His election victory was a stinging indictment of President Erdogan’s economic policies.


Erdogan’s party had already lost Turkey’s capital, Ankara, and other big cities in March balloting as inflation, unemployment, and a plunging lira took their toll. But he refused to concede defeat in Istanbul, crying voter fraud after Imamoglu won by 14,000 votes. After Turkey’s top election board made the controversial decision to rerun the race, Imamoglu increased his margin of victory to 800,000 votes.

The president’s detractors in the city erupted in celebration at their first big political win since Erdogan became Turkey’s leader 16 years ago. Building on his reputation as someone who works across political lines, Imamoglu ran on a message of unity, with the campaign slogan “Everything Is Going to Be Great.” He also promised to tackle waste and debt.

OK, so his slogan sounds like an unholy marriage between MAGA and the Lego Movie song.

But successful political dissent in a regime like Erdogan’s is something in and of itself, yeah?

We can only hope. Because right now Erdogan represents bad economics and stupid war.

And all the related bad stuff too, of course. I mean, Erdogan is basically playing this by the book.

So, in that vein, the bad guy play book calls for pointing to Turkey’s enemies abroad—those who would fight him and sanction him as the source of all problems.


So, what’s the next step to propping up bad guy power?

gladiator maximus savior of rome.gif

Right. Identify enemies at home and oppress them in the name of the good of the nation/country to convince the people you alone can help them.

So, oppression of marginalized groups in the name of national greatness?


Intensify process to the point of abject ignorance?

Ahval: University students face terror charges for singing in Kurdish

Turkish authorities have accused 12 university students of being member of a terrorist organisation for singing a song in Kurdish during celebrations for Newroz, the Kurdish new year, in the southern province of Antalya, the Kurdish news agency Mezopotamya reported on Tuesday.

The students are accused of being members of the youth wing of the outlawed Kurdistan Workers’ Party (PKK), which has waged a 35-year insurgency for Kurdish self-rule in Turkey, Mezopotamya said.

The evidence against the students includes video footage of them singing a song in Kurdish called Mervano, the news agency reported.

It also includes the presence on one of the students’ phones of a picture of Hacı Osman Birlik, a Kurdish man who was killed while breaking a curfew in 2015 in the southeastern province of Şırnak during a Turkish military operation against the PKK. Police filmed themselves tying Birlik’s corpse to an armoured vehicle and dragging it through the streets after they killed him.





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