Tids and Bits From Turkey
I was in Igneada for a short vacation Monday and Tuesday, and on Wednesday and Thursday, I spent the whole day at the IFS conference – if you saw me enjoying a bacon cheeseburger at the Hilton pool next to the conference center yesterday at lunch-time, that wasn’t me 
So I would like to use this opportunity to tie up some loose ends so that I can work on serious matters ASAP. By that, I mean that I have several posts lined up for the next few days, once I get the small details out of the way.
So here we go [why do I use so many "so"s, BTW; that's so unprofessional, I think, so....:):):)]:
Addendum to latest Daily News column:
Three important developments took place before the ink had dried on my column.
First, PM Erdogan unfortunately did not pay S&P in kind: Despite the ratings agency’s upgrade, he stated he was continuing to give it (and other agencies for that matter) a low rating because “they were so late in upgrading Turkey”:)
Second, it seems Istanbul Stock Exchange, or ISE, and Capital Markers Board, or CMB, are looking into the possibility of leaked info. regarding the upgrade. I am still urging CMB President Vedat Akgiray to give “the cloudy one” a phone call:)
But now rumors are circulating another ratings agency, most probably Moody’s, will upgrade soon. If I were Moody’s, I would have been rather moody (sorry, couldn’t help it) about such news and would have postponed the upgrade for a while precisely because of those rumors.
Turkish Data…
The latest data are unfortunately contradicting the Central Bank’s view about the slowdown. Take Real Sector Confidence Index, or RSCI, or Capacity Utilization Rate, or CUR, which come from the same survey:
No wonder Roubini’s in-house Turkey economist David was joking that the Central Bank probably regrets having seasonally-adjusted RSCI:)
Or the August trade balance, which was released this morning:
Make no mistake: I believe the economy will eventually slow down, as evident from the fact that export growth has finally surpassed import growth:
And you could argue that it made sense for the Central Bank to act so early because of the lags in monetary policy, but I think they are downplaying (for example, see the latest MPC summary) the fact that the adjustment is slower than they envisaged at the moment.
… and Monetary Policy & the IMF
Speaking of the Central Bank, Anne Sibert, usually known as Willem Buiter’s wife but quite an accomplished economist herself, was very critical of Turkish monetary policy at the IFS conference on Wednesday. Her main points were in line with the IMF’s, which were summarized by your friendly neighborhood economist last week.
Incidentally, that IMF report got quite a few several negative remarks from local economists, who claim the Fund does not know what it is talking about. However, I should tell you that the “sane economists” have been much more skeptical on claims such as monetary policy is working, fiscal policy is tight and the like. One of those sane economists is actually speaking at an ERF conference in 10 days.
I was planning to do a round-up monetary policy for one of the weekly Daily News columns, but I decided to wait for the conference. I would not expect the IMF resident rep., who is also speaking at the same conference, to be too critical, but I am really counting on Murat to represent the anti-consensus view.
But one thing I will say at the moment is this: Joe Stiglitz (no relation to Hugo) once called IMF economists as “third-rate economists from first-rate universities“. That may as well be the case, but it is much better (or at least marginally better) than being a “third-rate economist” from a “third-rate university”, especially one who swallows the Central Bank’s pills without question-YKB: Obviously, I am not talking about you, so please don’t bother to answer back in your next weekly.
Enough said; I am off to the British Consulate for some quality beer. Maybe. I’ll get nastier after a few pints…
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