The Pained Trader: Turkey shoot

The Pained Trader has a ringside seat at the crisis of the day.

  • By The Pained Trader
  • 16 Aug 2018
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For many years I’ve been accustomed to paddling quietly solo around the sleepy and unfashionable backwaters of global equities, destined to navigate forever the bayous and creeks of emerging markets’ most unloved.

Then all of a sudden, everyone wants to talk Turkey! My view was from the cheap seats. Now I find myself ringside in the VIP enclosure. Punters want to know what is happening and what I think about it.

I can’t answer the first of their queries and I ought not to answer the second. But in a flash, I am relevant; a locution I never thought I’d utter.

Turkey has been basted, roasted and smoked over the past week and its president — whose economically illiterate and struthious refusal to acknowledge market realities has largely been responsible for provoking the crisis — has almost singlehandedly brought about the demise of satire with a demonstration of leadership exceeding my powers of parody.

Difficile est saturam non scribere but rather than trying to pastiche the Recep Tayyip Erdogan, far better to just let his own words speak for themselves:

For example: “I am asking you,” he said. “What possible reason could there be behind the lira, which was at 2.8 against the dollar on July 15, 2016, to slide below 6 yesterday?" Forever would not be long enough to replay adequately.

Then try this for size: "The country is neither crumbling, nor being destroyed, or bankrupt, or in a crisis," before adding that the way out of the "currency plot" is to drive up output and "minimise interest rates".

Somebody bring the medication and if you can't get close enough, fire a tranquiliser dart from a safe distance.

He's like a football manager in a sheepskin coat, arriving the dugout to rescue his relegation-imperilled team with a don't-worry-lads-just leave-it-to-me shrug, combining insouciance and nonchalance and lots of other words he would not understand.

Fret not currency traders or those concerned about contagion, the Turkish president has it all under control. “Don’t pay any attention to them. Don’t forget this: if they have got dollars, we have got our people, our right, our Allah”.

It's meant to be the ostrich which digs its head into the sand but the turkey also seems susceptible.


They say, and in fact I say, far too often, that if you can keep your head about you when all those around you are losing theirs, then the chances are you have failed to adequately grasp the gravity of the situation.

Erdogan should not be affecting the phlegmatic. He should be running around screaming "I'm on fire," and hopefully self-immolating so that someone else — and not his cretinous son-in-law — can take over and douse the flames with some conventional monetary policy and prudent geopolitical strategy. You burn if you want to, Erdogan is not for turning.

No, he shall not, he shall not be moved. Any remaining optimism investors might have nurtured, that the non-Nobel prize-winning economist would finally recant, demonstrate some humility and contrition, and promise to actually carry out that which is necessary, must now be dashed. Every time he is presented with a platform to address Turkey's economic crisis, he doubles down and makes it infinitely worse than it was before he started speaking.

I‘ll say this in his favour, he comes up with some great gags: “Turks will have doubled their wealth by 2023” (he did not specify the starting point); “Turkey has one of the world's soundest banking systems” (to quote former US president Richard Nixon's press secretary, "that statement is no longer operative"); “The Turkish economy is moving like clockwork” (like Clockwork Orange?) and my favourite one-liner, "There are issues that need resolving, like rates, etc."

"Rates, etc." is a wonderful insight into what passes for a mind, an airy dismissal of interest rates as just stuff, or a mere trifle when compared to the important issues, whatever they are. It ranks alongside his casual threat last week to sanction the US ministers for the interior and justice, “if they existed”. It’s the little details like this which reveal the greatest insight into the mind of a megalomaniac with a King Lear complex.

Growing up, there was a boy in my school who lived locally to me and I would often see him in John Lau's Chinese takeaway shop. His order, “sausage and chips” ignored the more exotic fare John Lau served up and never altered. I was in there one evening when an argument developed between this boy and the Chinese staff behind the counter, whom he accused of talking about him in unflattering terms in their native tongue. They promptly barred him from the establishment which was, in those days, given the dearth of alternatives, a real privation.

A few minutes afterwards, he walked back through the door, turned round, lowered his trousers, bent over, exposed his derrière and shouted "Put a sausage up that" to startled staff and customers. I've never seen anything like it.

Until last week, that is when Erdogan's asinine intransigence culminated in his demand that Turks observe their patriotic duty and go out to sell their forex in favour of a lira which, let's deploy euphemism here, doesn't look good on the charts. He was essentially imploring Turks to assume a submissive position and take one for the nation.

Human nature being what it is, idiotic for the most part, some people have followed his advice and some took to burning dollars in the street. The power of this dramatic gesture of pecuniary immolation was undermined somewhat when it became apparent this was toy currency they were setting alight.

I’m typing this column as I wait for the Turkish finance minister and sequacious son-in-law to the president, Dr Berat Albayrak, to host an investor call during which no questions will be allowed save for the ones from investors pre-approved by the Turks, making it more of a speech than a forum where investors might articulate their concerns. 

Albayrak translates from Turkish as red flag and some might argue this is appropriate because of his extremely patriotic allegiance to Turkey's red pennant and also because his nepotistic appointment as finance minister (the son-in-law also rises) should have been something of a red flag to anyone investing in Turkish assets.

When exchanging verbal punches during the recent election campaign, opposition leader, Muharrem Ince parried one blow from Erdogan which had made reference to Albayrak, by sneering, "Oh, don't get me started on the Lord of The Rings".

Not having ever seen those films, I didn't understand this at the time and assumed Albayrak merely bore a resemblance to one of the characters. After some amateur detective work, which fell some way short of Columbo, I can confirm that Ince was alluding to the Wikileaks release of a cache of 57,000 emails to and from Albayrak a few years back.

It transpires that one of those was an order confirmation for a quartet of adult toys ordered from Amazon, and item no.1 on that list was a "California Exotics Dual Clit Flicker Cock Ring."

He then seems to have gone back in a couple of days later for a "Hustler Novelties Twice The Love Double Vibrating Cock Ring Male Sex Toy Kit".

Unsurprisingly, this was not widely reported in the Turkish media and it makes one wonder just how often the eyes of father-in-law and son-in-law meet awkwardly. If the finance minister grows a pair and opens the floor to questions on the conference call, I have a few that I would like to ask.

  • By The Pained Trader
  • 16 Aug 2018

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 28,736.25 82 9.49%
2 JPMorgan 26,609.28 77 8.79%
3 Barclays 19,197.35 50 6.34%
4 HSBC 18,884.90 60 6.24%
5 BNP Paribas 18,849.94 38 6.23%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Bank of America Merrill Lynch 9,498.80 2 86.78%
2 Swedbank 160.81 1 1.47%
2 Sumitomo Mitsui Financial Group 160.81 1 1.47%
2 SEB 160.81 1 1.47%
2 Nordea 160.81 1 1.47%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 ING 220.22 2 15.39%
1 Bank of America Merrill Lynch 220.22 2 15.39%
1 ABN AMRO Bank 220.22 2 15.39%
4 Morgan Stanley 114.77 1 8.02%
4 BNP Paribas 114.77 1 8.02%