turkish default

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Bounced from Sabri

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).



--

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx