#Turkey doesn’t matter like Thailand didn’t matter in 1998 pic.twitter.com/raewm1BHCX
— OW (@OccupyWisdom) August 11, 2018
Is Turkey in 2018 similar to Thailand in 1997? Thailand’s external debt was $109 bn (65% of GDP), triggered by a currency crisis and sudden loss of investor confidence. This hit the entire EM complex and found its way to the US. Turkey’s external debt is $450 bn, or 56% of GDP
— David Rosenberg (@EconguyRosie) August 10, 2018
Turkey’s loans in US dollars account for around 30% of GDP according to the Washington Post, but loans in euro could be as much as another 20%. pic.twitter.com/dFAvOuW9yC
— Jose Luis Cava (@jluiscava) August 11, 2018
#Subprime is contained t.co/NNELwGxkGA
— OW (@OccupyWisdom) August 11, 2018
A couple of banks mentioned above that are being affected by the Lira devaluation:
France– BNP Paribas -2.9%
Italian–UniCredit -5.8%
Spain –BBVA -6.4%
German –DB -5.4%
German –CS -2.8%
American –C -2.7%
The Turkish Lira is down 16% just today – a truly massive move for a pretty important country. This has dragged the Euro down -1.14%, while gold is flat (rallying strongly in Euros), and silver is off -0.85%.
I’m not sure what the knock-on effects of this currency move will be, but I’m sure it will blow someone up, somewhere. Nobody really expects a semi-major currency to blow out like this; any institutions on the wrong side of derivatives on this currency are going to take enormous losses.
Dragging the Euro down more than 1% is an indication of just how serious this currency move is.
What happens over the weekend? That’s the question.
As #Turkey crisis deepens, bankers to review impact of shocks. Biggest currency shock for lira since 2001 rattles investors. Turkish market plunge has started to stoke fears of contagion.t.co/8uR2gVfuvI pic.twitter.com/vVtbnF39dG
— Holger Zschaepitz (@Schuldensuehner) August 11, 2018
h/t Dave