RE:Re: heading towards default

[Sabri Oncu <soncu@xxxxxxxxxxx>]

Michael wrote:

>Is the optimism that a default could be contained within
>Argentina justified?  What about Turkey?

So far, Turkey is doing fine. With Turkish participation in the Afghan war,
hopes on the Turkish side are high with respect to securing additional
international loans. In addition, Turkey is the junior partner of the US
against Russia in the fight over the control of the Central Asia and the
Balkans. In view of these, lira bounced back from its lows and the Istanbul
Stock Excange Index soared (up 4.5%) yesterday. It will depend on what the
US and IMF will announce, assuming that the foreign holders of Turkish
equities and bonds will behave themselves. An IMF team will be in Turkey
this week, so we will hear the verdict soon I suppose.

At least for the time being, Turkey's delaying its default seems possible. I
just heard on a Turkish radio program here in the Bay Area that more troops,
after the initial 90, will be sent to Afghanistan. The more troops we send
the longer the delay will be in my view. But on some random day in the
future Turkey will default. There are so many fights that are going on among
the members of the so-called "political class", the military and capitalists
so that I don't think I can assign any meaningful values to the parameters
of my subjective probability distribution regarding this. So I better
refrain from any forecasts (especially after being about two years off with
the Argentinian default).

Sabri Oncu
soncu@xxxxxxxxxxx