Armageddon or Salvation

TURKEY - In Brief 07 Aug 2018 by Atilla Yesilada

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The basic scenario we have outlined in our recent Quarterly, i.e. Silver Linings Playbook, is playing out much faster with the crunch-time having arrived a lot sooner than we had imagined. Punished mercilessly by markets, Ankara has 24 hours to make a life-or-death decision. President Erdogan is dispatching a nine-member delegation to Washington DC to bargain with the US.If the team comes back with a concrete statement from the White House that no more sanctions will be levied on Turkey, we’ll get some breathing room, but our baptism by fire will by no means be over. No matter what happens at the political scene, the economy’s backbone is broken by the rapid currency devaluation and wide-spread distress in construction and other locomotive sectors of the economy.The deal with the US will determine whether Turkey tumbles into the Armageddon of balance of payments crisis or gets a reprieve to mull over the next rate hike. Delegation sent to DC to plead, or threaten? A nine-member delegation consisting of representatives from Energy, Justice and Foreign Affairs ministries is (reportedly, because we have no confirmation from White House or American press sources) on its way to Washington DC as we write these lines. The first meetings will be held on Wednesday, which we presume will take start around 2-3 pm Turkish time. We don’t know how long these meetings last or what will be negotiated but we are 100% certain of what could bring salvation to Turkey:A firm statement from White House that Pastor Brunson crisis is over, and Turkey shall no longer invite new sanctions.Frankly, we don’t care how it is done, or what will have been promised to the US in return for forgiveness....