Turkish executives take home one of the highest real pay levels worldwide, surpassing their American counterparts among many others, according to an annual report by the Hay Group, a global management consulting firm.
Turkey ranks fifth on the list of managers' spending power, according to the World Pay Report. When compared, a Turkish executive brings home $1.90 to every $1 of an American executive.
“The ranking appears striking at first glance, however, the survey results in Turkey within the last six to seven years have revealed this uptrend,” said Ayşın Argüden, of Hay Group Turkey. “The research is based on 621 professionals working in 132 medium and large scale private sector firms in Turkey.”
The World Pay Report examines the average salary of a management-level employee – Hay Reference Level 20. It is roughly equivalent to a head of department or function in a large multinational company. The report applies the relevant tax rate for that salary and subtracts a generic “cost of living” measure to reach a ranking of the relative spending power of managers in 51 countries around the world.
Managers in the fast-growth economies of the Middle East, Asia, and Eastern Europe tend to have the highest spending capacity, according to the report. The demand for management talent far outstrips supply in these markets, meaning companies need to compete with developed economies for the talent they need. At the same time, the cost of living is determined more by local factors, keeping the relative value of management salaries high. (more)
Maybe I should consider moving back to Turkey!! Considering that US is printing money faster than Zimbabwe, it may not be a bad move.
Wednesday, September 17, 2008
Wednesday, September 10, 2008
Q2 Growth Rates
Turkish economy grew by a dismal 1.9% in Q2 of 2008. Q1 growth rate revised up to 6.7%, hence the GDP growth rate in the first half of 2008 was 4.2%.
This is the result of AK Party's idiotic actions as much as it is the result of global developments. They were the ones who were taking credit when the economy was growing at high rates, now they should own up to their failure. The picture will probably get better during the second half compared to Q2, and 2008 growth rate will be around 4%. This might be a good number for a developed economy but this is no panacea for Turkey's high unemployment problem.
This is the result of AK Party's idiotic actions as much as it is the result of global developments. They were the ones who were taking credit when the economy was growing at high rates, now they should own up to their failure. The picture will probably get better during the second half compared to Q2, and 2008 growth rate will be around 4%. This might be a good number for a developed economy but this is no panacea for Turkey's high unemployment problem.
Wednesday, September 03, 2008
Turkish Inflation Peaks
It seems like Turkish CPI peaked in July at 12.1% and went down to 11.8% in August. In the next three months it is very likely that inflation rate will go below 10% and stay in single digits in 2009. The sharp decline is supporting the decline in inflation rates. Last year in September m-o-m CPI was 1%, in October it was 1.8%, and in November it was 2%. This year, we might experience a higher inflation in September because of Ramadan effect, but I don't think it is very likely.
I mentioned at Ekonomi Turk in July that oil prices will decline towards the $100 mark. I don't think we will see a significant increase in oil prices for the remainder of the year. Thus, it is now very likely that we will see single digit inflation rates at the end of the year.
I mentioned at Ekonomi Turk in July that oil prices will decline towards the $100 mark. I don't think we will see a significant increase in oil prices for the remainder of the year. Thus, it is now very likely that we will see single digit inflation rates at the end of the year.
Thursday, August 28, 2008
Inflation and Growth Rates in Turkey
Bloomberg has an article about recent developments in Turkey and the direction of the country. It is mostly accurate but a tad pessimistic about the effects of inflation on the growth rate. Namely it says "Higher inflation will likely lead to the shuttering of more businesses such as those along Hosdere Street, dragging the economy down even further. "
They talked about a bakery on Hosdere Street in Ankara and its problems. That bakery's problem is the high food prices which was partly the result of enourmous increases in oil prices. I don't think the inflation rate will stay above 10% level for too long in Turkey. I predict that oil prices will decline below $100 next year and this will bring down global inflation.
They are claiming that high inflation rates in Turkey will drag the economy down. Not true. What is important is not high inflation but high interest rates. Normally high inflation entails high interest rates and slower growth. However interest rates in Turkey is currently below 19% compared to 18% last year this time. This means that people are also expecting interest rates to go down to about 8% next year. So, current inflation is not a problem.
Considering that government will increase spending significantly for the rest of the year, this will also translate into better growth rates than pessimistic forecasts of the Bloomberg writers.
On the other hand they were quite accurate when they talk about the Central Bank:
"Yilmaz, the 61-year-old central bank governor, has stumbled in trying to check inflation. The bank won its independence from government control in 2001 as a prelude to the IMF accord. Yilmaz, a City University, London- trained economist, worked at the bank for 26 years before he was promoted to the top spot in April 2006.
He wasn't the government's first choice: one AKP candidate, who was rejected by then President Ahmet Necdet Sezer, was the head of an Islamic bank that follows instructions from the Koran to avoid interest payments.
Within a month of becoming governor, Yilmaz reversed three years of steady cuts that had taken the benchmark overnight borrowing rate to a low of 13.25 percent from 80 percent in 2001. The governor, in moving to boost the slumping lira, added 4.25 percentage points to the rate in the space of two months. The currency rebounded 6 percent in July 2006 after the rate hike to 17.5 percent.
Yilmaz Under Pressure
The following year, government ministers and industrialists, concerned about an economic slowdown, began publicly attacking the higher rates. Although Yilmaz ratcheted down the rate to 16.75 percent in August, arguing that inflation was slowing toward his 4 percent target for 2008, that wasn't low enough for exporters and labor unions, which placed full-page ads in national newspapers.
``Don't let employment and production die,'' the Turkish Exporters Assembly and the country's largest unions said in their Oct. 16 ads. ``Don't just act like you're cutting interest rates, really cut them.''
Yilmaz's series of four more cuts to 15.25 percent by February 2008 prompted economists and investors to question the bank's independence from political pressure. ``The central bank is still maturing into its autonomy,'' Isbank's Ozince says. ``Even central banks can make mistakes, but it's hard to steer the right path, because unknown factors can dominate, especially in shallow waters like Turkey's.''
Missing Targets
Only three months later, in May, as it became clear that the governor would miss his inflation target for the third straight year, Yilmaz began hiking rates again, to 16.75 percent. He also set a higher inflation target of 7.5 percent for 2009.
``They've been missing inflation targets for too long,'' says Jean-Dominique Butikofer, who helps manage about $725 million as head of emerging-market debt at Union Bancaire Privee in Zurich.
``They should have reacted much earlier on rates. The jury is still out to decide if inflation is being tackled or not.'' "
I have one thing to say about Central Bank. Some of the blame rests on the shoulders of the government, because they have been forcing and intimidating the CB for too long to reduce interest rates significantly. They got what they wanted and market interest rates jumped above 22%. After CB started tightening, market rates went down again.
They talked about a bakery on Hosdere Street in Ankara and its problems. That bakery's problem is the high food prices which was partly the result of enourmous increases in oil prices. I don't think the inflation rate will stay above 10% level for too long in Turkey. I predict that oil prices will decline below $100 next year and this will bring down global inflation.
They are claiming that high inflation rates in Turkey will drag the economy down. Not true. What is important is not high inflation but high interest rates. Normally high inflation entails high interest rates and slower growth. However interest rates in Turkey is currently below 19% compared to 18% last year this time. This means that people are also expecting interest rates to go down to about 8% next year. So, current inflation is not a problem.
Considering that government will increase spending significantly for the rest of the year, this will also translate into better growth rates than pessimistic forecasts of the Bloomberg writers.
On the other hand they were quite accurate when they talk about the Central Bank:
"Yilmaz, the 61-year-old central bank governor, has stumbled in trying to check inflation. The bank won its independence from government control in 2001 as a prelude to the IMF accord. Yilmaz, a City University, London- trained economist, worked at the bank for 26 years before he was promoted to the top spot in April 2006.
He wasn't the government's first choice: one AKP candidate, who was rejected by then President Ahmet Necdet Sezer, was the head of an Islamic bank that follows instructions from the Koran to avoid interest payments.
Within a month of becoming governor, Yilmaz reversed three years of steady cuts that had taken the benchmark overnight borrowing rate to a low of 13.25 percent from 80 percent in 2001. The governor, in moving to boost the slumping lira, added 4.25 percentage points to the rate in the space of two months. The currency rebounded 6 percent in July 2006 after the rate hike to 17.5 percent.
Yilmaz Under Pressure
The following year, government ministers and industrialists, concerned about an economic slowdown, began publicly attacking the higher rates. Although Yilmaz ratcheted down the rate to 16.75 percent in August, arguing that inflation was slowing toward his 4 percent target for 2008, that wasn't low enough for exporters and labor unions, which placed full-page ads in national newspapers.
``Don't let employment and production die,'' the Turkish Exporters Assembly and the country's largest unions said in their Oct. 16 ads. ``Don't just act like you're cutting interest rates, really cut them.''
Yilmaz's series of four more cuts to 15.25 percent by February 2008 prompted economists and investors to question the bank's independence from political pressure. ``The central bank is still maturing into its autonomy,'' Isbank's Ozince says. ``Even central banks can make mistakes, but it's hard to steer the right path, because unknown factors can dominate, especially in shallow waters like Turkey's.''
Missing Targets
Only three months later, in May, as it became clear that the governor would miss his inflation target for the third straight year, Yilmaz began hiking rates again, to 16.75 percent. He also set a higher inflation target of 7.5 percent for 2009.
``They've been missing inflation targets for too long,'' says Jean-Dominique Butikofer, who helps manage about $725 million as head of emerging-market debt at Union Bancaire Privee in Zurich.
``They should have reacted much earlier on rates. The jury is still out to decide if inflation is being tackled or not.'' "
I have one thing to say about Central Bank. Some of the blame rests on the shoulders of the government, because they have been forcing and intimidating the CB for too long to reduce interest rates significantly. They got what they wanted and market interest rates jumped above 22%. After CB started tightening, market rates went down again.
Tuesday, August 26, 2008
Şölen Çikolata and Walmart
Şölen Çikolata is one of the fastest growing chocolate companies in Turkey. They broke into Walmart and as a result experienced a dramatic increase in their sales (and exports). Here is the story:
Turkish chocolate company Şölen Çikolata, based in Gaziantep, 682 kilometers southeast of the capital, has been grabbing attention from global giants with its exports to 120 countries around the globe and high growth in the domestic market.
“We have received some partnership offers from foreigners. Almost all the big chocolate firms around the world sent in their offers. We cannot know what the time will show, however we currently are not interested in those offers,” said Elif Çoban, member of the company's executive board, who did not reveal the names of the foreign firms. “Our priority is to become a global brand as a Turkish firm. We believe in ourselves,” she added.
Şölen Çikolata, which grew 35 percent in exports and 40 percent in the domestic market in the first part of the year, expects to implement exports worth $135 million to $140 million by the end of the year. The company is also aiming for YTL 280 million in turnover. Meanwhile, the chocolate sector in the country grew only 4 percent since the beginning of the year, said Çoban.
“Last year we were exporting to 100 countries. This year that number rose to 120,” said Çoban. Within the framework of the support received by the Turquality Project, launched in 2003 to provide financial and managerial support for Turkish companies working on establishing global brands, Şölen designated 25 new countries to export to, she added.
Şölen managed to enter Brazil, Argentinia and Latin America, as Wal-Mart, a U.S.-based discount department store, began to sell the chocolate firm's products on its shelves in 2007. (more)
Turkish chocolate company Şölen Çikolata, based in Gaziantep, 682 kilometers southeast of the capital, has been grabbing attention from global giants with its exports to 120 countries around the globe and high growth in the domestic market.
“We have received some partnership offers from foreigners. Almost all the big chocolate firms around the world sent in their offers. We cannot know what the time will show, however we currently are not interested in those offers,” said Elif Çoban, member of the company's executive board, who did not reveal the names of the foreign firms. “Our priority is to become a global brand as a Turkish firm. We believe in ourselves,” she added.
Şölen Çikolata, which grew 35 percent in exports and 40 percent in the domestic market in the first part of the year, expects to implement exports worth $135 million to $140 million by the end of the year. The company is also aiming for YTL 280 million in turnover. Meanwhile, the chocolate sector in the country grew only 4 percent since the beginning of the year, said Çoban.
“Last year we were exporting to 100 countries. This year that number rose to 120,” said Çoban. Within the framework of the support received by the Turquality Project, launched in 2003 to provide financial and managerial support for Turkish companies working on establishing global brands, Şölen designated 25 new countries to export to, she added.
Şölen managed to enter Brazil, Argentinia and Latin America, as Wal-Mart, a U.S.-based discount department store, began to sell the chocolate firm's products on its shelves in 2007. (more)
Monday, August 25, 2008
Turkey's Mining Potential
Turkey has a lot of potential for mining but in terms number of mining companies operating in the country and the total production it is well behind other countries.
The country has 0.4 percent share in total global metal reserves, while it upholds a 2.5 percent share in the global industrial raw materials reserve. Turkey also has a 1 percent share in global coal reserves and 0.8 percent in global geothermal potential. Turkey is especially rich when it comes to boron. The country has a 72 percent share in the global boron reserves, with estimated reserves of just over 3 billion tons of boron.
...Turkey's gold potential is estimated at 6,500 tons. With this figure, Turkey ranks second in the world in terms of potential. Studies undertaken up to this point have revealed 600 tons of gold assets, which constitute only 10 percent of the existing potential. So far 50 tons of gold have been extracted from gold fields around the country.
...Turkey ranks seventh in the global list of countries with geothermal energy potential. The county ranks at the top in a similar list gathered just for European countries. Turkey is also among the global top five with its current geothermal energy direct utilization capacity, which is 229 thermal megawatts.
...Turkey's coal reserve, which has stood at 8.3 billion tons for the past 20 to 25 years, has been expanded by 28 percent via drillings implemented in the past three years. The country's coal reserve increased by 2.3 million tons, after the 300,000-meter-deep drillings yielded good results. Meanwhile, Turkey's total lignite reserve also increased to 10.6 billion tons. (more)
The country has 0.4 percent share in total global metal reserves, while it upholds a 2.5 percent share in the global industrial raw materials reserve. Turkey also has a 1 percent share in global coal reserves and 0.8 percent in global geothermal potential. Turkey is especially rich when it comes to boron. The country has a 72 percent share in the global boron reserves, with estimated reserves of just over 3 billion tons of boron.
...Turkey's gold potential is estimated at 6,500 tons. With this figure, Turkey ranks second in the world in terms of potential. Studies undertaken up to this point have revealed 600 tons of gold assets, which constitute only 10 percent of the existing potential. So far 50 tons of gold have been extracted from gold fields around the country.
...Turkey ranks seventh in the global list of countries with geothermal energy potential. The county ranks at the top in a similar list gathered just for European countries. Turkey is also among the global top five with its current geothermal energy direct utilization capacity, which is 229 thermal megawatts.
...Turkey's coal reserve, which has stood at 8.3 billion tons for the past 20 to 25 years, has been expanded by 28 percent via drillings implemented in the past three years. The country's coal reserve increased by 2.3 million tons, after the 300,000-meter-deep drillings yielded good results. Meanwhile, Turkey's total lignite reserve also increased to 10.6 billion tons. (more)
Friday, August 22, 2008
Turkish Politics
Former Prime minister Erbakan pardoned by his protege (current President Abdullah Gul) and now seeking to escape fines totaling YTL 12 million. He is claiming that he has no assets which is a total lie. Read the story:
Former Prime Minister Necmettin Erbakan, whose house arrest was lifted Monday, is now trying to avoid paying a crippling fine.
The Islamist leader was found guilty of complicity in the disappearance of the Treasury funds given to the Welfare Party, or RP, after the Constitutional Court shut down the party. After years of trials, on Dec. 2, 2003 a court sentenced him to two years and four months in prison. The ruling Justice and Development Party, or AKP, then amended the criminal law to allow Erbakan to serve his punishment under house arrest rather than in jail.
Erbakan was serving his sentence at his summer home in the Altınoluk region on the coast of the Marmara Sea when President Abdullah Gül pardoned him.
Both Gül and Prime Minister Recep Tayyip Erdoğan were senior figures in the RP when it was closed and Gül himself was among the party executives investigated for the missing funds.
In a statement the president released yesterday, Gül said some media reports about Erbakan's pardon were far from well intentioned, noting that all such cases were reviewed by the prosecutor's office before they were submitted to president's assessment. “There is no double standards,” the statement said, adding that Gül was not a suspect in the trial where Erbakan was prosecuted. It said charges against the president were dropped before he was elected the president because he had no links to the financial affairs of the party.
The pardon does not, however, cover the fine imposed on Erbakan and the RP's chief accountant, Rıza Ulucak, for the missing Treasury funds.
Erbakan was required to pay YTL 2.6 million in fines, which now stands at YTL 12 million after interest and other expenses.
The Finance Ministry had seized three homes, including a summerhouse of Erbakan and confiscated part of his wages in an effort to retrieve the lost money.
Erbakan's lawyer, Yaşar Gürkan, has now filed an appeal against the seizures, noting that the confiscation of part of the salary was annulled three days after the decision was taken.
While the assets that Erbakan declared in 1995 make up a long list worth many millions of lira, his lawyer said the Finance Ministry had begun an inquiry into the matter and had discovered that Erbakan had only YTL 60,000 in his bank account rather than the huge wealth he was estimated to have, which the media reported included 148 kilograms of gold.
Former Prime Minister Necmettin Erbakan, whose house arrest was lifted Monday, is now trying to avoid paying a crippling fine.
The Islamist leader was found guilty of complicity in the disappearance of the Treasury funds given to the Welfare Party, or RP, after the Constitutional Court shut down the party. After years of trials, on Dec. 2, 2003 a court sentenced him to two years and four months in prison. The ruling Justice and Development Party, or AKP, then amended the criminal law to allow Erbakan to serve his punishment under house arrest rather than in jail.
Erbakan was serving his sentence at his summer home in the Altınoluk region on the coast of the Marmara Sea when President Abdullah Gül pardoned him.
Both Gül and Prime Minister Recep Tayyip Erdoğan were senior figures in the RP when it was closed and Gül himself was among the party executives investigated for the missing funds.
In a statement the president released yesterday, Gül said some media reports about Erbakan's pardon were far from well intentioned, noting that all such cases were reviewed by the prosecutor's office before they were submitted to president's assessment. “There is no double standards,” the statement said, adding that Gül was not a suspect in the trial where Erbakan was prosecuted. It said charges against the president were dropped before he was elected the president because he had no links to the financial affairs of the party.
The pardon does not, however, cover the fine imposed on Erbakan and the RP's chief accountant, Rıza Ulucak, for the missing Treasury funds.
Erbakan was required to pay YTL 2.6 million in fines, which now stands at YTL 12 million after interest and other expenses.
The Finance Ministry had seized three homes, including a summerhouse of Erbakan and confiscated part of his wages in an effort to retrieve the lost money.
Erbakan's lawyer, Yaşar Gürkan, has now filed an appeal against the seizures, noting that the confiscation of part of the salary was annulled three days after the decision was taken.
While the assets that Erbakan declared in 1995 make up a long list worth many millions of lira, his lawyer said the Finance Ministry had begun an inquiry into the matter and had discovered that Erbakan had only YTL 60,000 in his bank account rather than the huge wealth he was estimated to have, which the media reported included 148 kilograms of gold.
Thursday, August 21, 2008
2008 Q4 Oil Price Prediction
I am quite contrarion compared to rest of the Wall Street. I expect oil prices close at $105 at the end of 2008 because of lower demand in US and Europe. Check out the image for an estimate of Wall Street firms.
Turkish finance sector
Turkey's finance sector's assets, including the Central Bank's, had climbed 21 percent as of March, compared to the same period last year, according to official figures.
The sector's asset size reached YTL 844.6 billion in March, the Banking Regulation and Supervision Agency, or BDDK, revealed Tuesday in its ninth three-monthly Financial Markets Report.
The proportion of total assets of the financial sector to gross domestic product was 95 percent, according to the report, which shows the figure at 71.3 percent for banks.
In terms of structural indicators, the banking sector kept on growing in the first quarter of this year, just as the same period of last year. The banks had 8,378 branches, 173,075 staff and 19,500 ATMs as of March, the BDDK said in the report.
The total assets of the banks amounted to YTL 634 billion, according to the report. The share of loans in total assets rose, while the decline in the share of securities continued. (more)
The sector's asset size reached YTL 844.6 billion in March, the Banking Regulation and Supervision Agency, or BDDK, revealed Tuesday in its ninth three-monthly Financial Markets Report.
The proportion of total assets of the financial sector to gross domestic product was 95 percent, according to the report, which shows the figure at 71.3 percent for banks.
In terms of structural indicators, the banking sector kept on growing in the first quarter of this year, just as the same period of last year. The banks had 8,378 branches, 173,075 staff and 19,500 ATMs as of March, the BDDK said in the report.
The total assets of the banks amounted to YTL 634 billion, according to the report. The share of loans in total assets rose, while the decline in the share of securities continued. (more)
Real estate in İzmit Turkey
In İzmit's Bahçecik area, the price for a 450-square-meter triplex villa in the Skala İnşaat's Sirius Konakları project range from YTL 530,000 and YTL 645,000. The project, slated for completion in June 2009, is comprised of 24 villas featuring 4+1 plans and sits on 7.3 hectares. (more)
These prices are not that bad. Izmit is very close to Istanbul.
These prices are not that bad. Izmit is very close to Istanbul.
Wednesday, August 20, 2008
New Reforms on the Way?
The Justice and Development Party, or AKP, has drafted a new national program regarding European Union accession, in a sign that the government plans to reinvigorate EU-backed reforms. The plan includes 120 to 130 legal amendments and 342 secondary regulations. Following the first wave of speedy reforms between 2002 and 2004, the government's performance paradoxically slowed, despite the formal launch of accession negotiations with the EU in October 2005.
Content of the 2008 national program
* The government pledges to establish a new immigration and asylum center under the Interior Ministry to align with the EU's Amsterdam Treaty.
• Turkey's visa regime and types -- single/multiple entry -- will be aligned with the EU.
• Under the bill on DNA data and the Turkish National DNA Data Bank, a balance will be created between the storage of personal data on blood and blood samples and the protection of privacy.
• A fingerprint data base will be created for alignment with the EU's Dublin Convention.
• A professional border security organization will be set up under the Interior Ministry.
• To enhance international and regional cooperation in the fight against terrorism, a Europe-Middle East explosives and bomb inspection and training center will be set up.
• After the creation of a law on data protection, further steps will be taken in the fight against international crime, in cooperation with Europol at the operational level.
• A strategy will be set for customs cooperation and border security.
• The new integrated border management action plan will be detailed, and technical needs of border units will be determined.
• An action plan will be drafted to fight drug trafficking in rural areas. (source)
I would not call this reform at all. None of these issues are serious problems for Turkey. There is no freedom of speech in Turkey, social security system has huge deficits, AKP just survived another round of judicial activism which must be curtailed significantly. Why would you ever want to give a higher priority to changing visa regime and types over freedom of speech?
Content of the 2008 national program
* The government pledges to establish a new immigration and asylum center under the Interior Ministry to align with the EU's Amsterdam Treaty.
• Turkey's visa regime and types -- single/multiple entry -- will be aligned with the EU.
• Under the bill on DNA data and the Turkish National DNA Data Bank, a balance will be created between the storage of personal data on blood and blood samples and the protection of privacy.
• A fingerprint data base will be created for alignment with the EU's Dublin Convention.
• A professional border security organization will be set up under the Interior Ministry.
• To enhance international and regional cooperation in the fight against terrorism, a Europe-Middle East explosives and bomb inspection and training center will be set up.
• After the creation of a law on data protection, further steps will be taken in the fight against international crime, in cooperation with Europol at the operational level.
• A strategy will be set for customs cooperation and border security.
• The new integrated border management action plan will be detailed, and technical needs of border units will be determined.
• An action plan will be drafted to fight drug trafficking in rural areas. (source)
I would not call this reform at all. None of these issues are serious problems for Turkey. There is no freedom of speech in Turkey, social security system has huge deficits, AKP just survived another round of judicial activism which must be curtailed significantly. Why would you ever want to give a higher priority to changing visa regime and types over freedom of speech?
Monday, August 18, 2008
Is Turkish Lira Overvalued?
According to the Big Mac Index, Turkish Lira appears to be 25% overvalued against the US dollar. However, the Big Macs I had in Turkey were much better than the Big Macs I had in US; also the Turkish restaurants were much cleaner and had a positive image compared to the US restaurants.
I don't know whether the Turkish lira is really overvalued or not. If Turkish lira is overvalued, then Turkish companies should be acquiring US companies because of the discount provided by the "overvalued" Turkish currency. I don't see many signs of that though. Considering that Turkish companies do not invest much in R&D, this provides a perfect opportunity for Turkish companies to acquire high tech US companies cheaply.
When we take a look at Turkey's exports, we would notice that it has been increasing by leaps and bounds in the past 6 years. You would not see 20+% increases in export performance if your currency is overvalued and appreciates even further. We are exposed to "Turkish lira overvaluation" statements not because Turkey in general has a real problem with the currency's valuation but because the textile industry has significant problems. Textile industry had been the top exporter of the countyr until recently but they have been experiencing significant competition from more competitive countries such as China. The appreciation of Turkish lira also did not help much either. That's why textile industry lobbyists have been pushing the government to appreciate the currency to alleviate (or postpone) their problems for a couple of years. This is the real issue here. So far, the government was not willing to depreciate the currency mostly because they don't want to pay higher prices for energy imports and they want to fight inflation.
Textile industry is preparing for another push in the coming days though. We will see how this will effect the exchange rate policy.
I don't know whether the Turkish lira is really overvalued or not. If Turkish lira is overvalued, then Turkish companies should be acquiring US companies because of the discount provided by the "overvalued" Turkish currency. I don't see many signs of that though. Considering that Turkish companies do not invest much in R&D, this provides a perfect opportunity for Turkish companies to acquire high tech US companies cheaply.
When we take a look at Turkey's exports, we would notice that it has been increasing by leaps and bounds in the past 6 years. You would not see 20+% increases in export performance if your currency is overvalued and appreciates even further. We are exposed to "Turkish lira overvaluation" statements not because Turkey in general has a real problem with the currency's valuation but because the textile industry has significant problems. Textile industry had been the top exporter of the countyr until recently but they have been experiencing significant competition from more competitive countries such as China. The appreciation of Turkish lira also did not help much either. That's why textile industry lobbyists have been pushing the government to appreciate the currency to alleviate (or postpone) their problems for a couple of years. This is the real issue here. So far, the government was not willing to depreciate the currency mostly because they don't want to pay higher prices for energy imports and they want to fight inflation.
Textile industry is preparing for another push in the coming days though. We will see how this will effect the exchange rate policy.
Friday, August 15, 2008
Morgan Stanley Downgrades Turkish Equities
Actually I have downgraded Turkish equities (when ISE-100 was 43000) and sold my AKBNK shares at YTL6.85 last week. Since then ISE-100 dropped to 42000 and AKBNK trades at YTL6.40. Today Morgan Stanley decided that ISE-100 run its course too (Source:Bloomberg)
Morgan Stanley, the second biggest U.S. securities firm, also downgraded Turkish and Indian stocks to ``underweight'' from ``equal-weight'' after a one-month rally.
``India and Turkey's downgrades follow more than 24 percent outperformance since last month,'' Garner wrote. ``This has led to a reversal of their technically oversold position and a deterioration in valuation rankings.''
Morgan Stanley, the second biggest U.S. securities firm, also downgraded Turkish and Indian stocks to ``underweight'' from ``equal-weight'' after a one-month rally.
``India and Turkey's downgrades follow more than 24 percent outperformance since last month,'' Garner wrote. ``This has led to a reversal of their technically oversold position and a deterioration in valuation rankings.''
Museum Card for Tourists
There are more than 300 museums in Turkey and entrance fees range between 1 and 20 YTL. However, Ministry of Culture introduced a museum card (muzekart) this year and it costs 20 YTL. This card lets you visit any museum free for a year. So, if you plan to visit Istanbul, buying this card will save you a bunch in museum entrance fees.
Thursday, August 14, 2008
Turkey among the cheapest for energy prices
Turkey ranks 10th for cheapest household energy and fourth among OECD nations, according to an energy price index released last month. Due to recent price increases in electricity last year, Turkey dropped two places from the International Energy Agency, or IEA, 2007 rankings. The IEA report included a meticulous inquiry into energy prices among OECD countries. Real energy prices, including both electric and natural gas were calculated by multiplying nominal prices, based on the index of producer prices by that of consumer prices for households. While Turkey was the most expensive energy user in 2002, with an index value of 116.1 over the last five years, due to a lack of price increases in 2004, it became the 19th cheapest country, with a value of 102.9. After placing 18th in 2005 and 14th in 2006, Turkey increased its rank to eighth last year. Turkey, whose index value rose to the level of 112.2 this year, became the 10th cheapest country due to recent increases in electric prices in 2008. Considering that the OECD European index value has been set at 117.2 and the total OECD as 130.8, Turkey surpassed both these averages in the second quarter of 2008.
Bureaucrats, Media Bosses and the Takeover of a Failed Bank
Does this add up to corruption? You decide:
One of the transcripts that was seized from an Ergenekon suspect's home is the record of a phone conversation between then BDDK Deputy President Ali Vural and Veli Dural, a board member of Doğan Holding, a Çukurova rival, and also owner of the biggest media group in Turkey. The call occurred at 5:30 p.m. precisely two days before June 18, 2002, the day the bank was taken over. The BDDK bureaucrat asks for media support to shift public opinion in favor of the takeover during the phone conversation.
The BDDK's Vural also calls a man he refers to as Mr. Anderson, the deputy chief consultant of Citibank at the time, on the morning of June 18, 2002, the day of the takeover. Mr. Anderson stated that the business group he represents is irritated by the Çukurova Group, noting that Turkey's economy will improve again with the help of Kemal Dervi?, the economy minister during the post-economic crisis period in Turkey. It is not clear why Mr. Anderson's bosses were uneasy about Çukurova.
Aydın and Yılmaz arrange the deal
In response to a question on the Pamukbank deal, Vural tells the Citibank chief consultant: "Sir, do not worry at all about that deal. Everything was handled personally by Mr. [then Deputy Prime Minister Mesut] Yılmaz and Mr. Doğan [Aydın Doğan, head of the Doğan group]."
In the same conversation, Mr. Anderson says: "This holding has grown so big it now spells trouble for us. The people I represent are very unhappy about this. The company will be distributed as we have planned."
'I will teach Engin a lesson'
In a conversation between Yılmaz and Vural on the morning of June 18, Yılmaz tells Vural that he will remove BDDK chief Engin Akçakoca from office. Yılmaz asks Vural: "Why hasn't Engin called me? Why isn't he calling me about this?" and Vural replies, "I don't know, sir." Yılmaz then states: "Tell me the truth, where is Engin? He is finished. I will replace him. I am thinking of you instead of him, what do you say to this?" Vural replies: "As you deem fit, sir. He told me to call you. He says he gets sick of your questions." Yılmaz replies: "So that's how it is. The prince needs to learn his lesson. I will teach him his lesson once he gets this over with."
One of the transcripts that was seized from an Ergenekon suspect's home is the record of a phone conversation between then BDDK Deputy President Ali Vural and Veli Dural, a board member of Doğan Holding, a Çukurova rival, and also owner of the biggest media group in Turkey. The call occurred at 5:30 p.m. precisely two days before June 18, 2002, the day the bank was taken over. The BDDK bureaucrat asks for media support to shift public opinion in favor of the takeover during the phone conversation.
The BDDK's Vural also calls a man he refers to as Mr. Anderson, the deputy chief consultant of Citibank at the time, on the morning of June 18, 2002, the day of the takeover. Mr. Anderson stated that the business group he represents is irritated by the Çukurova Group, noting that Turkey's economy will improve again with the help of Kemal Dervi?, the economy minister during the post-economic crisis period in Turkey. It is not clear why Mr. Anderson's bosses were uneasy about Çukurova.
Aydın and Yılmaz arrange the deal
In response to a question on the Pamukbank deal, Vural tells the Citibank chief consultant: "Sir, do not worry at all about that deal. Everything was handled personally by Mr. [then Deputy Prime Minister Mesut] Yılmaz and Mr. Doğan [Aydın Doğan, head of the Doğan group]."
In the same conversation, Mr. Anderson says: "This holding has grown so big it now spells trouble for us. The people I represent are very unhappy about this. The company will be distributed as we have planned."
'I will teach Engin a lesson'
In a conversation between Yılmaz and Vural on the morning of June 18, Yılmaz tells Vural that he will remove BDDK chief Engin Akçakoca from office. Yılmaz asks Vural: "Why hasn't Engin called me? Why isn't he calling me about this?" and Vural replies, "I don't know, sir." Yılmaz then states: "Tell me the truth, where is Engin? He is finished. I will replace him. I am thinking of you instead of him, what do you say to this?" Vural replies: "As you deem fit, sir. He told me to call you. He says he gets sick of your questions." Yılmaz replies: "So that's how it is. The prince needs to learn his lesson. I will teach him his lesson once he gets this over with."
Wednesday, August 13, 2008
Truth About Olympic Records
I have been thinking about this too. I don't think Michael Phelps deserves a lot of credit for breaking several world records, he owes these records to technological innovation. Here is an article from Slate explaining the records:
A new record means that an athlete using today's equipment outperformed an athlete using yesterday's equipment. It's not a fair fight.
In swimming alone, today's advantages include:
1. LZR Racer suit. It reduces friction (compared with skin) and is structurally designed to compress and streamline the body for maximum speed. Estimated drag reduction: 5 percent to 10 percent. Estimated average improvement in top swimmers' best times: 2 percent. Designed by NASA scientists and computers, among others. Cost: $500.
2. Pool depth. This is the deepest pool ever used in the Olympics. Depth disperses turbulence, reducing resistance.
3. Pool width and gutters. Two extra lanes at the margins disperse waves to gutters, reducing ricochet and resistance.
4. Lane dividers. The plastic ones in Beijing deflect turbulence down instead of sideways, reducing resistance.
5. Starting blocks. Nonskid versions have replaced the old wooden ones, boosting dive propulsion.
6. Video. Recordings and analysis identify target variables such as stroke distance and turns.
7. Medical tests. Swimmers are blood-tested after each race to measure lactic-acid buildup.
8. Sports scientists. They run the monitoring and analysis. The U.S. swim team has four.
And here's a partial list of advances in other sports:
1. Lighter shoes. The latest material is carbon nanotubes.
2. Asymmetric shoes. Stronger carbon base in the right shoe tilts you to the left to increase speed as you round the track. Left shoe is designed to stabilize you.
3. Ice vest. It lowers your temperature before the race so you can delay overheating for better performance.
4. Hypoxic tents. Sleeping in low-oxygen chambers increases red blood-cell levels.
5. Aluminum javelins. They reduce vibration compared with the old carbon ones.
6. Bicycle wheels. Front wheels with fewer spokes (eight instead of 32) reduce weight and air resistance. So do composite one-piece rear wheels. All frames are carbon.
Michael Phelps' coach says the LZR suit is fair. "Everybody is in the suit so it's across the board," he argues. That may be true of today's top swimmers. But it's not true of yesterday's. So comparing today's performances to the performances of 20, eight, or even four years ago—which is what "new Olympic record" means—is generally unfair.
A new record means that an athlete using today's equipment outperformed an athlete using yesterday's equipment. It's not a fair fight.
In swimming alone, today's advantages include:
1. LZR Racer suit. It reduces friction (compared with skin) and is structurally designed to compress and streamline the body for maximum speed. Estimated drag reduction: 5 percent to 10 percent. Estimated average improvement in top swimmers' best times: 2 percent. Designed by NASA scientists and computers, among others. Cost: $500.
2. Pool depth. This is the deepest pool ever used in the Olympics. Depth disperses turbulence, reducing resistance.
3. Pool width and gutters. Two extra lanes at the margins disperse waves to gutters, reducing ricochet and resistance.
4. Lane dividers. The plastic ones in Beijing deflect turbulence down instead of sideways, reducing resistance.
5. Starting blocks. Nonskid versions have replaced the old wooden ones, boosting dive propulsion.
6. Video. Recordings and analysis identify target variables such as stroke distance and turns.
7. Medical tests. Swimmers are blood-tested after each race to measure lactic-acid buildup.
8. Sports scientists. They run the monitoring and analysis. The U.S. swim team has four.
And here's a partial list of advances in other sports:
1. Lighter shoes. The latest material is carbon nanotubes.
2. Asymmetric shoes. Stronger carbon base in the right shoe tilts you to the left to increase speed as you round the track. Left shoe is designed to stabilize you.
3. Ice vest. It lowers your temperature before the race so you can delay overheating for better performance.
4. Hypoxic tents. Sleeping in low-oxygen chambers increases red blood-cell levels.
5. Aluminum javelins. They reduce vibration compared with the old carbon ones.
6. Bicycle wheels. Front wheels with fewer spokes (eight instead of 32) reduce weight and air resistance. So do composite one-piece rear wheels. All frames are carbon.
Michael Phelps' coach says the LZR suit is fair. "Everybody is in the suit so it's across the board," he argues. That may be true of today's top swimmers. But it's not true of yesterday's. So comparing today's performances to the performances of 20, eight, or even four years ago—which is what "new Olympic record" means—is generally unfair.
Tuesday, August 12, 2008
Turkish Wind Market
Turkish Daily News:
Model Enerji, Turkey's first megawatt-class wind turbine manufacturer, has acquired a licence for the WT1650 wind turbine design from a leading American energy technology company.
Under the terms of the contract, Model Enerji has exclusive rights to manufacture, sell, install, operate and maintain the WT1650 in Turkey and has non-exclusive rights for surrounding Mediterranean and Eastern European countries. The license deal was announced last week by the American Superconductor Corporation, or AMSC.
Istanbul-based Model Enerji plans to manufacture the 1.65 megawatt (MW) turbines, which utilize a doubly-fed induction generator drive train, in the Ankara industrial zone. The company plans to have its first prototype installed and commissioned in mid-2009 and begin producing the turbines by the end of 2009. Subject to achieving certain volume production levels with the WT1650, Model Enerji also has a right of first refusal to license a proprietary 2 or 2.5 MW wind turbine design from AMSC Windtec that will utilize a full-conversion permanent magnet generator drive train.
“Because of its vast wind resources, open terrain and industrial infrastructure, Turkey is predicted to be among the world's fastest growing wind energy markets,” said M. Celal Keki, managing director of Model Enerji. "Our highly experienced management team has extensive expertise in Turkey's energy industry. Utilizing AMSC Windtec's designs and expertise, our company will be the first wind turbine manufacturer in Turkey and is ideally positioned to capitalize on this advancing market.” (more)
Model Enerji, Turkey's first megawatt-class wind turbine manufacturer, has acquired a licence for the WT1650 wind turbine design from a leading American energy technology company.
Under the terms of the contract, Model Enerji has exclusive rights to manufacture, sell, install, operate and maintain the WT1650 in Turkey and has non-exclusive rights for surrounding Mediterranean and Eastern European countries. The license deal was announced last week by the American Superconductor Corporation, or AMSC.
Istanbul-based Model Enerji plans to manufacture the 1.65 megawatt (MW) turbines, which utilize a doubly-fed induction generator drive train, in the Ankara industrial zone. The company plans to have its first prototype installed and commissioned in mid-2009 and begin producing the turbines by the end of 2009. Subject to achieving certain volume production levels with the WT1650, Model Enerji also has a right of first refusal to license a proprietary 2 or 2.5 MW wind turbine design from AMSC Windtec that will utilize a full-conversion permanent magnet generator drive train.
“Because of its vast wind resources, open terrain and industrial infrastructure, Turkey is predicted to be among the world's fastest growing wind energy markets,” said M. Celal Keki, managing director of Model Enerji. "Our highly experienced management team has extensive expertise in Turkey's energy industry. Utilizing AMSC Windtec's designs and expertise, our company will be the first wind turbine manufacturer in Turkey and is ideally positioned to capitalize on this advancing market.” (more)
Monday, August 11, 2008
Inflation, Industrial Production and Current Account Deficit
Turkey is not invincible (contrary to the economy ministers' "bize bisey olmaz" comments at the beginning of the year).
Turkish industrial output grew at the slowest pace this year in June, signaling the $660 billion economy is cooling as rising fuel, food and credit costs weaken consumer confidence, reported Bloomberg.
Production rose 0.8 percent from a year earlier, compared with a 2.4 percent pace in May, The Turkish Statistical Institute, or TÜİK, said on its Web site Friday. Output was expected to rise by 2.5 percent, according to the median estimate of 11 economists surveyed by Bloomberg.
Latest Inflation Expectations:
Turkey's inflation rate will probably fall to 8.68 percent in 12 months time, according to the Central Bank's latest survey of businesses and economists.The forecast rose from 8.61 percent two weeks ago, the Ankara-based bank said on its Web site Friday. The estimate for inflation in 24 months increased to 7.30 percent from 7.21 percent, and the year-end forecast rose to 11.01 percent from 10.76 percent, it said.Inflation in July accelerated to 12.1 percent, the highest in more than four years, from 10.6 percent a month earlier.
Current Account Deficit was not a problem 2 years ago, the government had some time to implement micro (structural) reforms to rectify the problem. Not much was done. Sooner or later the market will correct itself. Here are the latest numbers:
Turkey's current account deficit widened for a 13th straight month in June as energy prices rose, increasing the likelihood the lira will weaken. The gap expanded to $5.6 billion from $3.1 billion in the same month a year earlier, the Central Bank in Ankara said on its Web site Friday. The gap was forecast at $5 billion, according to the median estimate of 15 economists surveyed by Bloomberg. Higher energy prices are pushing up the import bill, while the global credit crunch cuts the foreign investment Turkey needsto finance the current account deficit. The gap is likely to reach a record $50 billion this year and the financing situation is”worrying,” Moody's Investors Service said July 9.
Turkish industrial output grew at the slowest pace this year in June, signaling the $660 billion economy is cooling as rising fuel, food and credit costs weaken consumer confidence, reported Bloomberg.
Production rose 0.8 percent from a year earlier, compared with a 2.4 percent pace in May, The Turkish Statistical Institute, or TÜİK, said on its Web site Friday. Output was expected to rise by 2.5 percent, according to the median estimate of 11 economists surveyed by Bloomberg.
Latest Inflation Expectations:
Turkey's inflation rate will probably fall to 8.68 percent in 12 months time, according to the Central Bank's latest survey of businesses and economists.The forecast rose from 8.61 percent two weeks ago, the Ankara-based bank said on its Web site Friday. The estimate for inflation in 24 months increased to 7.30 percent from 7.21 percent, and the year-end forecast rose to 11.01 percent from 10.76 percent, it said.Inflation in July accelerated to 12.1 percent, the highest in more than four years, from 10.6 percent a month earlier.
Current Account Deficit was not a problem 2 years ago, the government had some time to implement micro (structural) reforms to rectify the problem. Not much was done. Sooner or later the market will correct itself. Here are the latest numbers:
Turkey's current account deficit widened for a 13th straight month in June as energy prices rose, increasing the likelihood the lira will weaken. The gap expanded to $5.6 billion from $3.1 billion in the same month a year earlier, the Central Bank in Ankara said on its Web site Friday. The gap was forecast at $5 billion, according to the median estimate of 15 economists surveyed by Bloomberg. Higher energy prices are pushing up the import bill, while the global credit crunch cuts the foreign investment Turkey needsto finance the current account deficit. The gap is likely to reach a record $50 billion this year and the financing situation is”worrying,” Moody's Investors Service said July 9.
Turkish Derivatives Exchange
Turkish Derivatives Exchange is located in Izmir and mostly owned by a group of banks. The trading volume increased by more than 10 fold since 2006 but it is still very light compared to western counterparts. Here is a recent article about their expansion plans:
...the exchange now plans to have a number of promotion campaigns in an effort to introduce itself more and more investors in Turkey. And we definitely need support of our media in achieving this goal. At the Turkish Derivatives Exchange, we have futures exchanges (dollar & euro), index futures, gold futures, cotton futures and wheat futures. In my opinion, the most significant characteristic of the Turkish Derivatives Exchange is that it plays a crucial role in reflecting investors' expectations for the future of prices; therefore, paving the way for some economic and financial parameters to become more transparent. In doing so, it asks some caution money from all parties involved in transactions and monitor it everyday. In this way, it prevents any risks that stem from any parties to negatively affect other parties.
...the exchange now plans to have a number of promotion campaigns in an effort to introduce itself more and more investors in Turkey. And we definitely need support of our media in achieving this goal. At the Turkish Derivatives Exchange, we have futures exchanges (dollar & euro), index futures, gold futures, cotton futures and wheat futures. In my opinion, the most significant characteristic of the Turkish Derivatives Exchange is that it plays a crucial role in reflecting investors' expectations for the future of prices; therefore, paving the way for some economic and financial parameters to become more transparent. In doing so, it asks some caution money from all parties involved in transactions and monitor it everyday. In this way, it prevents any risks that stem from any parties to negatively affect other parties.
The Best and Worst Thing About Turkey
Its People. Here is the source:
While many (but not all) of my male Turkish neighbors, friends and students like blond hair and a Russian background, I can't imagine a more beautiful woman than a Turkish woman.
I like that the women here are not afraid to be attractive. And I like that beneath the beauty there is a strength that is foreign to me.
Life has not been equal or easy for women in Turkey, but they have a power and attitude that I find impressive.
I love the traditional foods that can still be found around the city. Not just kebabs, but the old, old things that might seem to only exist in cookbooks. If you look hard enough you'll find some great restaurants making them.
I like the way that Turkey is very much like the United States in the 1940s to1970s. I was born in 1974 and I missed what happened after the two world wars.
I missed the social problems of the civil rights movement, the liberation movements, the sexual revolution in the 1960s and the explosion of credit and buying power of the 1980s.
It all seems to be happening here in Turkey at the same time. I now have a better idea of where my family came from, what they lived through, how far we have come and how much of ourselves and our traditions we have lost.
I don't enjoy the outside marketplace customs in Istanbul. I don't enjoy the chaos that passes for a queue and the people who will not wait.
It's perhaps this lack of respect for each other outside the house that I dislike the most.
Inside someone's home, you will not find better hospitality in the world, and I think for foreigners this paradox is confusing.
This is Turkey. A Turkish friend working for one of the municipal works told me, "The best thing about Turkey is the people."
"What's the worst thing?" I asked. "The people," he said.
While many (but not all) of my male Turkish neighbors, friends and students like blond hair and a Russian background, I can't imagine a more beautiful woman than a Turkish woman.
I like that the women here are not afraid to be attractive. And I like that beneath the beauty there is a strength that is foreign to me.
Life has not been equal or easy for women in Turkey, but they have a power and attitude that I find impressive.
I love the traditional foods that can still be found around the city. Not just kebabs, but the old, old things that might seem to only exist in cookbooks. If you look hard enough you'll find some great restaurants making them.
I like the way that Turkey is very much like the United States in the 1940s to1970s. I was born in 1974 and I missed what happened after the two world wars.
I missed the social problems of the civil rights movement, the liberation movements, the sexual revolution in the 1960s and the explosion of credit and buying power of the 1980s.
It all seems to be happening here in Turkey at the same time. I now have a better idea of where my family came from, what they lived through, how far we have come and how much of ourselves and our traditions we have lost.
I don't enjoy the outside marketplace customs in Istanbul. I don't enjoy the chaos that passes for a queue and the people who will not wait.
It's perhaps this lack of respect for each other outside the house that I dislike the most.
Inside someone's home, you will not find better hospitality in the world, and I think for foreigners this paradox is confusing.
This is Turkey. A Turkish friend working for one of the municipal works told me, "The best thing about Turkey is the people."
"What's the worst thing?" I asked. "The people," he said.
Friday, August 08, 2008
IMF and Turkey
The International Monetary Fund said Wednesday that it was ready to continue to play an effective role in supporting Turkey's efforts to stabilize the economy, amid a tough global financial environment that has seen soaring commodity prices threaten the nation's economic gains in recent years.
"The fund can continue to play an effective role in supporting Turkey'sefforts to entrench economic stability and tackle its remainingvulnerabilities," said the IMF in a statement Wednesday.
The statement came after the executive board, the fund's decision-makingbody, completed an evaluation of Turkey's three successive IMF-backed stand-by arrangements between 1999 and 2005, the last of which ended in May.The board's members include more than 20 directors representing the IMF's 184member nations. (more)
I don't there is a need for strong IMF support, the mission is accomplished. The only case for IMF support would be a global financial crisis where investors aggresively pulling their funds away from emerging markets, and in that case I don't think IMF will have enough ammunition to help Turkey.
"The fund can continue to play an effective role in supporting Turkey'sefforts to entrench economic stability and tackle its remainingvulnerabilities," said the IMF in a statement Wednesday.
The statement came after the executive board, the fund's decision-makingbody, completed an evaluation of Turkey's three successive IMF-backed stand-by arrangements between 1999 and 2005, the last of which ended in May.The board's members include more than 20 directors representing the IMF's 184member nations. (more)
I don't there is a need for strong IMF support, the mission is accomplished. The only case for IMF support would be a global financial crisis where investors aggresively pulling their funds away from emerging markets, and in that case I don't think IMF will have enough ammunition to help Turkey.
Cheap Hotels in Turkey
Turkey is becoming a destination for low-class tourists.
European tourism company TUI AG announced last week that it would organize weekly tours to Turkey at a price of 13 pounds (YTL 31) in the October-November period, causing discontent among Turkish tourism professionals. Representatives of tour operators in the popular Aegean holiday resorts Marmaris and Kuşadası claim the company is trying to advertise Turkey as a cheap holiday resort and that this will cause a decrease in the quality of tourists coming to the country.
This tour by TUI AG will make Turkey a country for low-class travelers, said the Turkish Travel Agencies Union, or TÜRSAB, Kuşadası executive board chairman, Bülent İlkbahar, adding that the facilities that had agreed to take part were one- or two-star establishments.
“The price of such hotels is already 4 to 5 pounds. They think that extra spending of tourists will bring money. There are hotels like this in Kuşadası. They hope that tourists will spend money for extras like alcohol. Such tourists, who prefer cheap tours, will leave 8 to 10 pounds at most. But if they sell rooms in normal prices, high-quality tourists will come and they will earn money.” (more)
European tourism company TUI AG announced last week that it would organize weekly tours to Turkey at a price of 13 pounds (YTL 31) in the October-November period, causing discontent among Turkish tourism professionals. Representatives of tour operators in the popular Aegean holiday resorts Marmaris and Kuşadası claim the company is trying to advertise Turkey as a cheap holiday resort and that this will cause a decrease in the quality of tourists coming to the country.
This tour by TUI AG will make Turkey a country for low-class travelers, said the Turkish Travel Agencies Union, or TÜRSAB, Kuşadası executive board chairman, Bülent İlkbahar, adding that the facilities that had agreed to take part were one- or two-star establishments.
“The price of such hotels is already 4 to 5 pounds. They think that extra spending of tourists will bring money. There are hotels like this in Kuşadası. They hope that tourists will spend money for extras like alcohol. Such tourists, who prefer cheap tours, will leave 8 to 10 pounds at most. But if they sell rooms in normal prices, high-quality tourists will come and they will earn money.” (more)
Life in Turkey II
My name is Amer and I'm originally from Palestine, but I lived all my life in Damascus, Syria. I've been living in Istanbul for five years and go to university here.
I thought I'd write about the funny little things to try to convey the simple differences between Turkey and home. So here it goes:
Lemons: The Turks put lemon juice on just about everything!
Food: The waiters take the food away before you've even put the last bite on your plate in your mouth. I've had to slap their hands as they reach for my dinner before I'm done with it. I don't know if it's a sign of good service or they just want me to leave. The same thing goes for drinks. I had many drinks disappear mysteriously before I'd even finished half of them. (more)
By the way, his comments about Turkish waiters are true even in Turkisj restaurants in New York City.
I thought I'd write about the funny little things to try to convey the simple differences between Turkey and home. So here it goes:
Lemons: The Turks put lemon juice on just about everything!
Food: The waiters take the food away before you've even put the last bite on your plate in your mouth. I've had to slap their hands as they reach for my dinner before I'm done with it. I don't know if it's a sign of good service or they just want me to leave. The same thing goes for drinks. I had many drinks disappear mysteriously before I'd even finished half of them. (more)
By the way, his comments about Turkish waiters are true even in Turkisj restaurants in New York City.
Thursday, August 07, 2008
Is Turkey a Tiger?
According to Wall Street Journal, Turkey joined the ranks of tigers. Here is an excerpt from a lengthy article:
"Since the AK Party took over at the end of 2002, exports have more than tripled, foreign investment has jumped from under $1 billion a year to more than $20 billion, and the number of tourists has more than doubled. Inflation, out of control for three decades, remains a problem but has fallen sharply to around 10%. Growth in GDP this year is expected to be around 4.5%, way down from over 9% in 2004, but still robust.
Guided by the IMF, the AK Party has imposed fiscal discipline that eluded its predecessors, accelerated privatization and trimmed bureaucracy. Recently abolished, for example, was a requirement that any company with 50 or more employees must hire an ex-convict and a terrorism victim, among various others.
The AK Party has also reactivated a long-stalled drive to join the European Union, pushing through regulatory and other changes designed to bring Turkey more into line with European norms."
"Since the AK Party took over at the end of 2002, exports have more than tripled, foreign investment has jumped from under $1 billion a year to more than $20 billion, and the number of tourists has more than doubled. Inflation, out of control for three decades, remains a problem but has fallen sharply to around 10%. Growth in GDP this year is expected to be around 4.5%, way down from over 9% in 2004, but still robust.
Guided by the IMF, the AK Party has imposed fiscal discipline that eluded its predecessors, accelerated privatization and trimmed bureaucracy. Recently abolished, for example, was a requirement that any company with 50 or more employees must hire an ex-convict and a terrorism victim, among various others.
The AK Party has also reactivated a long-stalled drive to join the European Union, pushing through regulatory and other changes designed to bring Turkey more into line with European norms."
Foreigners Beware!!
Interesting article explaining Turks' attitude against foreigners.
...The population exchanges in the early days of the Republic and the anti-Greek riots in Istanbul in 1955 that reduced the Greek population from over 150,000 to today's population of around 5,000, as well as the tensions with the Syrian Orthodox in the Southeast, were consistent with the prevailing mood and what became an unspoken “foreigner policy.” In fact, the state appears to have employed a consistent “homogenization” policy that seeks to coax the religious, ethnic and linguistic “wrinkles” out of the fabric of Turkish society.
Today’s diplomats and policymakers clearly consult the “rearview mirror” of recent history as they ply the waters of present-day policy and foreigners are consequently viewed with suspicion. The miniscule number of foreign workers allowed to operate businesses in the country over the last 25 years is further proof of the unspoken “foreigner policy.”
As someone who has experienced the incredible generosity and hospitality of Turks first-hand for over 11 years in many different parts of Anatolia, I do not make this statement lightly, but the fact remains and it has been described to me on numerous occasions how foreigners living and working in the country are almost always suspected of being foreign spies with a sinister agenda to undermine Turkish sovereignty. (more)
...The population exchanges in the early days of the Republic and the anti-Greek riots in Istanbul in 1955 that reduced the Greek population from over 150,000 to today's population of around 5,000, as well as the tensions with the Syrian Orthodox in the Southeast, were consistent with the prevailing mood and what became an unspoken “foreigner policy.” In fact, the state appears to have employed a consistent “homogenization” policy that seeks to coax the religious, ethnic and linguistic “wrinkles” out of the fabric of Turkish society.
Today’s diplomats and policymakers clearly consult the “rearview mirror” of recent history as they ply the waters of present-day policy and foreigners are consequently viewed with suspicion. The miniscule number of foreign workers allowed to operate businesses in the country over the last 25 years is further proof of the unspoken “foreigner policy.”
As someone who has experienced the incredible generosity and hospitality of Turks first-hand for over 11 years in many different parts of Anatolia, I do not make this statement lightly, but the fact remains and it has been described to me on numerous occasions how foreigners living and working in the country are almost always suspected of being foreign spies with a sinister agenda to undermine Turkish sovereignty. (more)
Life in Turkey
If you ever wondered how life is in Turkey, here is a bit from Turkish Daily News:
These are the thoughts of MaryAnne, 33, an assistant director of studies from Canada:
"I have been in Turkey for six years. I started in Kayseri, teaching in a 'kolej,' then moved to Istanbul after two years.
I feel like I have lived in two different Turkeys. For me, living in Kayseri was very different from living in Istanbul, for good and bad reasons.
In Kayseri, I experienced amazing hospitality and generosity from the people I met. I was invited into people's homes and fed wonderful Turkish food and treated kindly.
Unfortunately, because it is very traditional, it wasn't easy to make close friends: women my age (early 30s) were all married and usually at home with their children so I rarely met them.
There were a lot of men, but they couldn't understand that a man and woman could be friends so often when I talked to men; they thought I wanted to be their girlfriend (even the married ones!). Living in Kayseri was fascinating but lonely for me.
My life in Istanbul is very different. It doesn't feel much different from living in London or Cape Town or Vancouver.
I have a lot of foreign friends and colleagues, my flat is modern (no Turkish toilet like in Kayseri, and no bare concrete floors covered in kilims!), and I can easily drink cappuccinos or order pizza or Chinese food.
All of these things were impossible in Kayseri when I was there. These things make life easier here, but I miss living in a place that is very different.
These are the thoughts of MaryAnne, 33, an assistant director of studies from Canada:
"I have been in Turkey for six years. I started in Kayseri, teaching in a 'kolej,' then moved to Istanbul after two years.
I feel like I have lived in two different Turkeys. For me, living in Kayseri was very different from living in Istanbul, for good and bad reasons.
In Kayseri, I experienced amazing hospitality and generosity from the people I met. I was invited into people's homes and fed wonderful Turkish food and treated kindly.
Unfortunately, because it is very traditional, it wasn't easy to make close friends: women my age (early 30s) were all married and usually at home with their children so I rarely met them.
There were a lot of men, but they couldn't understand that a man and woman could be friends so often when I talked to men; they thought I wanted to be their girlfriend (even the married ones!). Living in Kayseri was fascinating but lonely for me.
My life in Istanbul is very different. It doesn't feel much different from living in London or Cape Town or Vancouver.
I have a lot of foreign friends and colleagues, my flat is modern (no Turkish toilet like in Kayseri, and no bare concrete floors covered in kilims!), and I can easily drink cappuccinos or order pizza or Chinese food.
All of these things were impossible in Kayseri when I was there. These things make life easier here, but I miss living in a place that is very different.
Cancer Cures Find Biology-Physics Convergence
The engine of growth is innovation and US is the prime location for innovation. This story is from Bloomberg:
Biologists at MIT, in Cambridge, helped discover the genes that have led to a new generation of so-called targeted cancer medicines. MIT -- like Stanford University in California and Emory University in Atlanta -- now is deploying engineers for the first time to build on those successes. The approach is spurring interest from biotechnology company backers, said Terry McGuire, co-founder of Polaris Venture Partners, an investment company in nearby Waltham, Massachusetts.
``Investors are realizing that a combination of engineering and biology is going to yield greater products,'' McGuire said a telephone interview on July 28.
...The U.S. government will spend $4.8 billion on cancer studies in the year ending Sept. 30, almost twice the $2.5 billion a decade earlier, according to the National Cancer Institute in Bethesda, Maryland. About 75 percent of the Koch Institute's $50 million annual science budget comes from federal grants, said the center's director, Tyler Jacks, in a July 15 interview.
MIT biologists were involved in the original gene discoveries that led to the cancer drug Herceptin, made by South San Francisco-based Genentech Inc., and Gleevec, from Novartis AG in Basel, Switzerland. Herceptin, for breast cancer, generated $4.6 billion in revenue, according to Roche Holding AG, the Basel-based drugmaker that also markets the medicine.
The Koch Institute has an even split of biologists and engineers among the 24 faculty members. By comparison, no more than 5 percent of the 28,000 members of the American Association for Cancer Research, based in Philadelphia, specialize in the physical sciences, said Margaret A. Foti, the group's chief executive officer, in a telephone interview.
Biologists at MIT, in Cambridge, helped discover the genes that have led to a new generation of so-called targeted cancer medicines. MIT -- like Stanford University in California and Emory University in Atlanta -- now is deploying engineers for the first time to build on those successes. The approach is spurring interest from biotechnology company backers, said Terry McGuire, co-founder of Polaris Venture Partners, an investment company in nearby Waltham, Massachusetts.
``Investors are realizing that a combination of engineering and biology is going to yield greater products,'' McGuire said a telephone interview on July 28.
...The U.S. government will spend $4.8 billion on cancer studies in the year ending Sept. 30, almost twice the $2.5 billion a decade earlier, according to the National Cancer Institute in Bethesda, Maryland. About 75 percent of the Koch Institute's $50 million annual science budget comes from federal grants, said the center's director, Tyler Jacks, in a July 15 interview.
MIT biologists were involved in the original gene discoveries that led to the cancer drug Herceptin, made by South San Francisco-based Genentech Inc., and Gleevec, from Novartis AG in Basel, Switzerland. Herceptin, for breast cancer, generated $4.6 billion in revenue, according to Roche Holding AG, the Basel-based drugmaker that also markets the medicine.
The Koch Institute has an even split of biologists and engineers among the 24 faculty members. By comparison, no more than 5 percent of the 28,000 members of the American Association for Cancer Research, based in Philadelphia, specialize in the physical sciences, said Margaret A. Foti, the group's chief executive officer, in a telephone interview.
Tuesday, August 05, 2008
Garanti Q2 profit
Garanti Bankası, the Turkish bank partly owned by General Electric Co., may report that their second-quarter net income fell, after gains from sales of insurance units were not repeated. Garanti may report a profit of YTL 500 million ($434 million) for the same period, according to the average of nine estimates compiled by Bloomberg. (Source)
Garanti is one of the best managed banks in Turkey and trying to catch Akbank for the first place. However, they are exposed to the same risks as the rest of the banking system. That's why their P/E ratio is only 9 and it was below 6 last month.
Garanti is one of the best managed banks in Turkey and trying to catch Akbank for the first place. However, they are exposed to the same risks as the rest of the banking system. That's why their P/E ratio is only 9 and it was below 6 last month.
Monday, August 04, 2008
Story of a Meat Plant in Eastern Turkey
An integrated meat facility in the eastern city of Erzurum, which was opened around 18 years ago with a $70 million investment and a ceremony by late President Turgut Özal, now faces the threat of closure, leading many to believe that with current policies Turkey has no chance of bridging the country's economic east-west divide.
...My patriotism has cost me a lot. I would be a king if I had invested this money in the west or abroad. (more here)
...My patriotism has cost me a lot. I would be a king if I had invested this money in the west or abroad. (more here)
Friday, August 01, 2008
Businessweek Article
In case you missed it, there was a Businessweek article on Turkey and recent developments.
Two Promising Discoveries
First, 'Major discovery' from MIT primed to unleash solar revolution:
Inspired by the photosynthesis performed by plants, Nocera and Matthew Kanan, a postdoctoral fellow in Nocera's lab, have developed an unprecedented process that will allow the sun's energy to be used to split water into hydrogen and oxygen gases. Later, the oxygen and hydrogen may be recombined inside a fuel cell, creating carbon-free electricity to power your house or your electric car, day or night.
The key component in Nocera and Kanan's new process is a new catalyst that produces oxygen gas from water; another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity -- whether from a photovoltaic cell, a wind turbine or any other source -- runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced.
Combined with another catalyst, such as platinum, that can produce hydrogen gas from water, the system can duplicate the water splitting reaction that occurs during photosynthesis.
The new catalyst works at room temperature, in neutral pH water, and it's easy to set up, Nocera said. "That's why I know this is going to work. It's so easy to implement," he said.
Second, Test of Mars Soil Sample Confirms Presence of Ice:
Heated to 32 degrees Fahrenheit, a sample of soil being analyzed by NASA’s Phoenix Mars lander let out a puff of vapor, providing final confirmation that the lander is sitting over a large chunk of ice.
I think we can put a man on Mars in 30 years by generating oxygen and energy using MIT's discovery!!!
Inspired by the photosynthesis performed by plants, Nocera and Matthew Kanan, a postdoctoral fellow in Nocera's lab, have developed an unprecedented process that will allow the sun's energy to be used to split water into hydrogen and oxygen gases. Later, the oxygen and hydrogen may be recombined inside a fuel cell, creating carbon-free electricity to power your house or your electric car, day or night.
The key component in Nocera and Kanan's new process is a new catalyst that produces oxygen gas from water; another catalyst produces valuable hydrogen gas. The new catalyst consists of cobalt metal, phosphate and an electrode, placed in water. When electricity -- whether from a photovoltaic cell, a wind turbine or any other source -- runs through the electrode, the cobalt and phosphate form a thin film on the electrode, and oxygen gas is produced.
Combined with another catalyst, such as platinum, that can produce hydrogen gas from water, the system can duplicate the water splitting reaction that occurs during photosynthesis.
The new catalyst works at room temperature, in neutral pH water, and it's easy to set up, Nocera said. "That's why I know this is going to work. It's so easy to implement," he said.
Second, Test of Mars Soil Sample Confirms Presence of Ice:
Heated to 32 degrees Fahrenheit, a sample of soil being analyzed by NASA’s Phoenix Mars lander let out a puff of vapor, providing final confirmation that the lander is sitting over a large chunk of ice.
I think we can put a man on Mars in 30 years by generating oxygen and energy using MIT's discovery!!!
Thursday, July 31, 2008
Stock Market Over-reaction
Bloomberg writes:
"Erdogan's party escaped a ban when the country's high court rejected charges that he sought to introduce Islamic law in violation of a constitutional mandate for a secular government. The win gives Erdogan a chance to pursue democratic reforms and European Union membership.
To succeed, he may need to abandon policies favored by his Islamist power-base, such as ending curbs on Muslim-style headscarves.
``Now Erdogan has to decide if he's going to behave,'' said Bulent Aliriza, head of the Turkey program at the Center for Strategic and International Studies in Washington. ``There will be pressure from hardliners in his party to be firmer on the Islamist agenda.''
...Yields on lira bonds fell as much as 89 basis points, the most since July 2006. The benchmark stock index gained 2.8 percent at midday in Istanbul and the lira rose to a six-month high of 1.164 per dollar. "
ISE-100 index opened above 43000 level today. This is a gross over-reaction in my opinion. AKP had great accomplishments in the past but they have not been performing well until the announcement of the lawsuit. Since then they erased the budget deficit and inflation went down unexpectedly in July due to a decline in food prices. These are temporary factors though. Now that they are cleared, they will continue their populist policies and inflation will resume in August and September. Bond yields will increase towards 21% and stock market will plunge at least 10% from current levels.
"Erdogan's party escaped a ban when the country's high court rejected charges that he sought to introduce Islamic law in violation of a constitutional mandate for a secular government. The win gives Erdogan a chance to pursue democratic reforms and European Union membership.
To succeed, he may need to abandon policies favored by his Islamist power-base, such as ending curbs on Muslim-style headscarves.
``Now Erdogan has to decide if he's going to behave,'' said Bulent Aliriza, head of the Turkey program at the Center for Strategic and International Studies in Washington. ``There will be pressure from hardliners in his party to be firmer on the Islamist agenda.''
...Yields on lira bonds fell as much as 89 basis points, the most since July 2006. The benchmark stock index gained 2.8 percent at midday in Istanbul and the lira rose to a six-month high of 1.164 per dollar. "
ISE-100 index opened above 43000 level today. This is a gross over-reaction in my opinion. AKP had great accomplishments in the past but they have not been performing well until the announcement of the lawsuit. Since then they erased the budget deficit and inflation went down unexpectedly in July due to a decline in food prices. These are temporary factors though. Now that they are cleared, they will continue their populist policies and inflation will resume in August and September. Bond yields will increase towards 21% and stock market will plunge at least 10% from current levels.
Wednesday, July 30, 2008
Turkey among 2050's top 10 economies
Goldman is gone crazy. According to a research report by Goldman Sachs,
By 2024, Turkey's per capita income will climb to $20,000-25,000, claims the report. Turkey's per capita national income is expected to surpass $30,000 in 2033, and $40,000 in 2040, reaching the $60-65,000 level by 2050, adds Goldman Sachs.
The growth rates of the E7 bloc of emerging economies, which includes Turkey, China, India, Brazil, Russia, Indonesia and Mexico, will surpass those of the United States, European Union, G7 and the Organization for Economic Co-operation and Development, or OECD by 2050, the data revealed.
The countries including Turkey will catch up with the industrialized countries in 2025 and start to surpass them in 2030. The national currencies of the emerging markets, including Turkey, are also expected to gain 2 to 2.5 percent in value annually.
There is no way in hell that Turkey's curreny will apperciate by 2% annually for 40 years. It is already fairly valued. Did you go shopping in Turkey recently? It is more expensive than New York!!
By 2024, Turkey's per capita income will climb to $20,000-25,000, claims the report. Turkey's per capita national income is expected to surpass $30,000 in 2033, and $40,000 in 2040, reaching the $60-65,000 level by 2050, adds Goldman Sachs.
The growth rates of the E7 bloc of emerging economies, which includes Turkey, China, India, Brazil, Russia, Indonesia and Mexico, will surpass those of the United States, European Union, G7 and the Organization for Economic Co-operation and Development, or OECD by 2050, the data revealed.
The countries including Turkey will catch up with the industrialized countries in 2025 and start to surpass them in 2030. The national currencies of the emerging markets, including Turkey, are also expected to gain 2 to 2.5 percent in value annually.
There is no way in hell that Turkey's curreny will apperciate by 2% annually for 40 years. It is already fairly valued. Did you go shopping in Turkey recently? It is more expensive than New York!!
Is Bayburt a City or a Village?
According to Turkish Daily News 80% of the tax collected in Turkey originates from 4 cities: Istanbul (43%), Kocaeli (15%), Ankara (12%), and Izmir (10%). Here is the rest of the article:
Meanwhile Bayburt, located approximately 781 kilometers northeast of Ankara, made the lowest tax payment in the first half of the year. By paying YTL 8.89 million, Bayburt had only 0.01 percent share in the country's total tax revenue.
While the government foresees collecting YTL 171.21 billion in taxes, the tax revenue for the first six months of the year added up to YTL 82.75 billion.
The biggest portion of the tax revenue was obtained through motor vehicle taxes, or MTV. Some YTL 2.16 billion in taxes was collected just from motor vehicle users.
Some YTL 19.78 billion was collected from private consumption taxes, or ÖTV, while YTL 8.44 billion was collected in value added tax.
Ekonomix here. The total tax collected from Bayburt is only $7 million!!! Are you kidding me? This is one of the peculiarities of Turkey. Is Bayburt a city or a village?
Meanwhile Bayburt, located approximately 781 kilometers northeast of Ankara, made the lowest tax payment in the first half of the year. By paying YTL 8.89 million, Bayburt had only 0.01 percent share in the country's total tax revenue.
While the government foresees collecting YTL 171.21 billion in taxes, the tax revenue for the first six months of the year added up to YTL 82.75 billion.
The biggest portion of the tax revenue was obtained through motor vehicle taxes, or MTV. Some YTL 2.16 billion in taxes was collected just from motor vehicle users.
Some YTL 19.78 billion was collected from private consumption taxes, or ÖTV, while YTL 8.44 billion was collected in value added tax.
Ekonomix here. The total tax collected from Bayburt is only $7 million!!! Are you kidding me? This is one of the peculiarities of Turkey. Is Bayburt a city or a village?
Tuesday, July 29, 2008
Erin Burnett on Investing in Turkey
Erin Burnett spent a couple of days in Istanbul and reporting. Here is the link for the video. She also interviews with a Citibank analyst who is pessimistic about Turkish markets and suggests "selling" Turkish equities. At that time Istanbul Stock Exchange was around 35000 and today it closed over 39000.
Even though I expect a decline from current levels in the very short term (1.5 months), I don't think it is a bad idea to have some exposure to Turkish equities.
Even though I expect a decline from current levels in the very short term (1.5 months), I don't think it is a bad idea to have some exposure to Turkish equities.
Central Bank's 2008 Inflation Estimate
Central Bank finally caught up with the markets and updated its end-2008 inflation estimate to 10.6% from 9.3%. Despite the surprise decline in July inflation, CB determined that oil prices will average $140 for the rest of the year and this warranted an increase in inflation estimate.
Even though i don't think oil prices will be as high as CB estimates, considering that they have been behind the curve since August 2007, I welcome this revision as a step in the right direction. I still suspect that inflation will be above 11% by the end of the year. CB lost considerable credibility since CB president Durmus Yilmaz appointed in 2006. As a result, it is too early to comment on the 2009-2011 inflation estimates. It looks almost certain that Turkey will be one of the countries that will experience double digit inflation rates in 2008.
Even though i don't think oil prices will be as high as CB estimates, considering that they have been behind the curve since August 2007, I welcome this revision as a step in the right direction. I still suspect that inflation will be above 11% by the end of the year. CB lost considerable credibility since CB president Durmus Yilmaz appointed in 2006. As a result, it is too early to comment on the 2009-2011 inflation estimates. It looks almost certain that Turkey will be one of the countries that will experience double digit inflation rates in 2008.
Fannie and Freddie Rescue
Bush Plan to Save Fannie, Freddie Stirs Confidence
...“This just proves that American capitalism works,” said an unnamed analyst from Bear Stearns. “The self-correcting mechanism of free markets still happens as if guided by an invisible hand. This week we caught another glimpse at that hand. Too bad Adam Smith wasn’t alive to see it.”
...“The true measure of strength is one’s willingness to seek help in time of need,” said one investor. “When Freddie Mac and Fannie Mae came crawling to the U.S. taxpayer to bail them out, their executives boldly showed that they’re not afraid to be vulnerable.”
Confidence also swelled because the two mortgage giants will get rescued using OPM — other people’s money — another signal to investors of the stability and integrity of these firms.
A well put article. They also have several other satirical articles.
...“This just proves that American capitalism works,” said an unnamed analyst from Bear Stearns. “The self-correcting mechanism of free markets still happens as if guided by an invisible hand. This week we caught another glimpse at that hand. Too bad Adam Smith wasn’t alive to see it.”
...“The true measure of strength is one’s willingness to seek help in time of need,” said one investor. “When Freddie Mac and Fannie Mae came crawling to the U.S. taxpayer to bail them out, their executives boldly showed that they’re not afraid to be vulnerable.”
Confidence also swelled because the two mortgage giants will get rescued using OPM — other people’s money — another signal to investors of the stability and integrity of these firms.
A well put article. They also have several other satirical articles.
L.E.D.
This is from NY Times:
When the Sentry Equipment Corporation in Oconomowoc, Wis., was considering how to light its new factory last year, the company’s president, Michael Farrell, decided to try something new: light emitting diodes, or L.E.D.’s.
“I knew L.E.D.’s were used in stoplights. I wondered why they can’t be used in buildings,” Mr. Farrell said. “So I went on a mission.”
What Mr. Farrell found was a light source that many of the biggest bulb manufacturers are now convinced will supplant incandescent bulbs and compact fluorescent bulbs.
By lighting all of the building’s exterior and most of its interior with L.E.D.’s, Sentry spent $12,000 more than the $6,000 needed to light the facility with a mixture of incandescent and fluorescent bulbs. But using L.E.D.’s, the company is saving $7,000 a year in energy costs, will not need to change a bulb for 20 years and will recoup its additional investment in less than two years.
“I’d do it again,” Mr. Farrell said. “It was a no-brainer.”
L.E.D. bulbs, with their brighter light and longer life, have already replaced standard bulbs in many of the nation’s traffic lights. Indeed, the red, green and yellow signals are — aside from the tiny blinking red light on a DVD player, a cellphone or another electronic device — probably the most familiar application of the technology.
Read the rest here.
When the Sentry Equipment Corporation in Oconomowoc, Wis., was considering how to light its new factory last year, the company’s president, Michael Farrell, decided to try something new: light emitting diodes, or L.E.D.’s.
“I knew L.E.D.’s were used in stoplights. I wondered why they can’t be used in buildings,” Mr. Farrell said. “So I went on a mission.”
What Mr. Farrell found was a light source that many of the biggest bulb manufacturers are now convinced will supplant incandescent bulbs and compact fluorescent bulbs.
By lighting all of the building’s exterior and most of its interior with L.E.D.’s, Sentry spent $12,000 more than the $6,000 needed to light the facility with a mixture of incandescent and fluorescent bulbs. But using L.E.D.’s, the company is saving $7,000 a year in energy costs, will not need to change a bulb for 20 years and will recoup its additional investment in less than two years.
“I’d do it again,” Mr. Farrell said. “It was a no-brainer.”
L.E.D. bulbs, with their brighter light and longer life, have already replaced standard bulbs in many of the nation’s traffic lights. Indeed, the red, green and yellow signals are — aside from the tiny blinking red light on a DVD player, a cellphone or another electronic device — probably the most familiar application of the technology.
Read the rest here.
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