Monday, May 31, 2010

Inaugural Memoir Post: The PM's Temper

I notified my loyal readers yesterday on my intentions to write short memoirs a la Gungor Uras. To make sure that deed does indeed follow word, I am starting up today. I am referring to this story in today's Hurriyet Daily News column as well, so that was an added incentive to get this done. Enjoy this one and the rest and please note that I operate in the style of a friendly Midwestern diner: Comments are never required, always appreciated, and I always respond to comments... Suggestions on making these memoirs more interesting would be especially appreciated, as it is a totally new writing style for me.

The eve of the 2007 election. I am at Citi as an economist in the Treasury. All the investors have one question in their minds: The result of the 2007 elections. Everyone knows AKP will get the most votes, but what everyone is wondering is the possibility of a coalition. At this time, the two small right-wing parties had decided to merge, and polls were showing that the sum would be more than the parts.

There were various polls floating around,but even with the polls, it was tough to know how many deputies each party would get because of the peculiarities of the Turkish election system. So I and my boss decided to form a simple deputy-distributing model. Making use of a paper by Zafer Yukseler (I could not find it on the web, I think it is an unpublished manuscript), I divided the country into seven provinces based on voting behavior in the past. Then, assuming that the voting behavior would be the same as the past in each province and using the average of the latest polls, I devised a simple Excel sheet that would distribute votes into deputies in each region.

The results were pointing to a coalition. This was only natural, as the new right-wing party was seen as getting 10-15% of the votes. Anyway, right after we published our report, the media got a hold of it, with the business channels headlining it as "Citi predicts coalition government". Actually, we were not predicting anything; we were merely saying that IF the polls were right, a coalition would be inevitable.

The business channels were quick to invite my boss for an interview, but he, not being fond of becoming a media monkey, politely declined, which, in retrospect, turned out to be a bad strategy, as the channels were quick to find others such as economists, political scientists, academics and the like, to discuss a report which many of them had not read.

And most of them were quite critical: One was saying that foreign economists write these reports in the 64th floor of a bank in New York without knowing anything about the country, which drew quite a laugh in the Treasury floor, where I was based. Our bond trader actually suggested that we call our reports "The 64th Floor" from now on. Joking aside, had that gentleman looked at the cover of our report, let alone read it, he would have seen that we were based on the third floor of a skyscraper in Levent rather than the 64th floor of a skyscraper in New York.

Anyway, the excitement died down in a day, I was away cruising the Greek islands (another wonderful story there) during the elections, and I had all but forgotten about all this, until Steve, Citi Istanbul's CEO, came to visit me and my boss one day: "I was in Ankara over the weekend", he said, and then added with a grin: "The PM told me to fire you"...

It turns out Steve had led Citi top brass to Ankara for a visit to the new AKP government, which had, by the way, won the elections in a landslide after the right-wing merger fell at the last minute. So they meet the PM, shake hands, and the first thing the PM says is: "You should fire your analysts". 

The Citi team is in shock, as they are not sure if the guy is serious or just joking, but RTE goes on: "Your analysts are not doing a good job. They were predicting a coalition, but we won with a landslide. So you should fire them." Obviously, the fault was with his advisers for misinforming him on the report, but it was funny he brought it up so abruptly.

The Citi team tactfully switched to another topic, and while we did not get fired, I do not know to this day how serious RTE was...

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