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.
Thursday, July 31, 2008
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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