it seems you can also fool all people all the time. At least that's what I have got the latest IMF rumors.
Following Econ tzar Babacan's comments on the possibility of a deal with the IMF, where the tzar actually did not say anything we did not already know, rumors spread that PM Erdogan had disclosed the government and the Fund had come to an agreement at an internal AKP meeting last night.
The tax hikes announced today only spiced things up, as they were seen as the government's efforts to bring the fiscal books agreeable to the Fund, even though it was clear from the 2010 budget figures that tax rises were on the way, as I had argued in this week's Hurriyet column.
To sum up, developments of the past 24 hours, did not add much new to our information sphere on the IMF front. But Turkish assets surged nevertheless, with the benchmark rallying 75bp in the course of about 24 hours, before settling at (and closing the year at) 8.9%.
By stating boldly that the markets are being fooled again, I realize that I might be able to eat my words. But followers of the never-ending IMF-Turkey saga have seen this exact ploy play out at least a dozen times in the past couple of years.
If there is indeed a deal this time around, fine. In fact, I'll be happier than most, as I have one of the gloomiest scenarios for 2010 and believe that an agreement will be extremely beneficial for the Turkish economy.
But all I'm saying is that we have been fooled before many times, especially when Turkish assets don't seem to be performing well. I don't want throw baseless accusations and causation is not correlation, but if you just take the statistician's point of view the negative correlation between IMF-deal rumors and negative Turkish asset correlation in the previous two weeks will be jaw-dropping. I promise I'll provide some numbers if I decide to take this issue in my Hurriyet column next week.
Following Econ tzar Babacan's comments on the possibility of a deal with the IMF, where the tzar actually did not say anything we did not already know, rumors spread that PM Erdogan had disclosed the government and the Fund had come to an agreement at an internal AKP meeting last night.
The tax hikes announced today only spiced things up, as they were seen as the government's efforts to bring the fiscal books agreeable to the Fund, even though it was clear from the 2010 budget figures that tax rises were on the way, as I had argued in this week's Hurriyet column.
To sum up, developments of the past 24 hours, did not add much new to our information sphere on the IMF front. But Turkish assets surged nevertheless, with the benchmark rallying 75bp in the course of about 24 hours, before settling at (and closing the year at) 8.9%.
By stating boldly that the markets are being fooled again, I realize that I might be able to eat my words. But followers of the never-ending IMF-Turkey saga have seen this exact ploy play out at least a dozen times in the past couple of years.
If there is indeed a deal this time around, fine. In fact, I'll be happier than most, as I have one of the gloomiest scenarios for 2010 and believe that an agreement will be extremely beneficial for the Turkish economy.
But all I'm saying is that we have been fooled before many times, especially when Turkish assets don't seem to be performing well. I don't want throw baseless accusations and causation is not correlation, but if you just take the statistician's point of view the negative correlation between IMF-deal rumors and negative Turkish asset correlation in the previous two weeks will be jaw-dropping. I promise I'll provide some numbers if I decide to take this issue in my Hurriyet column next week.
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