So I just thought of something / realized something rather basic. There have been a lot of comparison between Turkey and Greece recently with both countries experiencing some huge currency issues. Both countries at similar points are looking towards hard landings, yet Greece was helped by being “bailed out” by the EU. While this was far from an ideal bailout, it at least was able to put a stopgap on further contagion.
But we’re completely overlooking the basic fact that Greece had a backer to bail them out when they got in trouble. Who in the world is going to bail out Turkey? Qatar gave them 15 billion recently, but that’s not going to be enough to make any major difference in the long run, and I have to imagine the very difficult political situation Erdogan has placed himself in along with threatening US sanctions may make things far worse in finding a suitor capable of a full on bail-out.
I’m not saying that Turkey can’t be bailed out or won’t, but I think it’s at least worth considering the effects of a true hard landing vs. a bail-out soft landing like Greece. Additionally, S&P recently just stated that they foresee a hard landing for Turkey, so I think this is a pretty important item that is getting overlooked here.