Bix Weir Alert: Could the “Turkey Explosion” Be a Financial One?
News that Turkey is about to have their credit downgraded to Junk after the failed pseudo-coup has me thinking that the prophesy of a “Turkish Explosion” in August may be a financial one…
Investors Await Moody’s Turkey Verdict to Move Billions in Funds
http://www.bloomberg.com/news/articles/2016-08-04/investors-await-moody-s-turkey-verdict-to-move-billions-in-funds
“The fate of billions of dollars in investments in Turkish bonds hangs in the balance as Moody’s Investors Service prepares to reveal whether it’s handing the country a second junk rating on its debt.”
“Moody’s, which put Turkey on review for a downgrade immediately after a failed military plot to oust the government last month, currently ranks the nation’s debt at Baa3, its lowest rung within investment grade. A rating review is scheduled for Friday and derivatives traders are already treating it as speculative, with the score implied by credit default swaps at Ba3, three steps into high-yield territory, according to Moody’s Analytics.”
“While JPMorgan Chase & Co. said a downgrade may drive forced selling of as much as $8.7 billion of Turkish bonds, even a decision to keep the rating unchanged will not assuage all investors if the outlook remains negative.”
My take is this:
All of the European Banks are very, very weak and a downgrade of $8.7B in Turkish Bonds means a payout of 100x that in the derivatives world which will NOT be good for those companies already reeling from the BREXIT derivative chaos.
Be that as it may, the looming Explosion may be a financial one or it may be a REAL one if President Erdogan gets pissed off enough at the US Credit Agencies for destroying Turkey’s economic aspirations. I don’t trust the guy and he’s liable to do something stupid just to show how MACHO he is – something crazy like lobbing a bomb into the Incerlik Air Force Base and scaring the shit out of the entire world as the 266 nuclear warheads lay there like sitting ducks.
That’s the kind of crazy world to expect going forward.
May the Road you choose be the Right Road.
Bix Weir
www.RoadtoRoota.com
Source: http://blogdogcicle.blogspot.com/2016/08/bix-weir-alert-could-turkey-explosion.html
Thank You,
Clear, and Extremely Accurate.
The easily possible “Worst Case Scenario”,
would be a real “Eye Opener”.
While it would not be immediate, the effects
would be Global.
RR
once in a great while bin has a article that is accurate!