Monday, June 29, 2009

Morning Fun

I try not to pick on anyone with the blog or the weekly columns, but I just couldn't pass the opportunity this time around. Here is an excerpt from an bank's Turkey preview:
Q1 GDP will probably see the sharpest contraction since the beginning of the current data series in 1998. Back in Q4 2001 GDP shrunk by 10% y/y but we expect an even worse reading of -11.89% y/y in Q1 (consensus: 11.9% y/y).
I wonder where the 0.01% difference from the consensus comes from. The report continues with inflation:
We anticipate June consumer prices to increase by0.07% m/m and 5.7% y/y. We expect that the weak HUF vis-à-vis the EUR is passing through to inflation with a lag but that weak domestic demand, lower oil and food prices will have a negative effect.
This puts all the existing passthrough theories to the garbage can: I had no idea EURHUF had an impact on Turkish inflation. Joking aside, this proves that copy pasting is not a good idea.

This also reminds me a famous Economics urban legend: During the height of the Asian crisis, Fund's Korea review had supposedly written Thailand all over it- the authors had obviously been inspired by the earlier report, but obviously forgotten to control+H, i.e. find and replace, Thailand with Korea's that is. While that story is probably not true, there is a widely-held suspicion that the Fund has a one-size jacket, as illustrated by RBS analyst Tim Ash's comments this morning. If you are interested, I can refer you to an interesting paper written by two economists, one of them an Econ. minister now (Hint: I have never been in any government under any capacity):)...

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