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    Immediate cost of not signing an agreement with the IMF is reflected in unemployment figures
    Güven Sak, PhD 03 September 2009
    Have you read the news analysis on Turkey recently published in New York Times (NYT)? The analysis emphasized that Turkish government, who made a bet by not signing an agreement with the IMF, so far seemed to win. The emphasis was put on "so far"; but the news hit the headlines in particular in certain media. As the news analysis suggested, exchange rate did not jump as high as expected; interest rates decreased and the Istanbul Stock Exchange has risen to record-high levels. Thus, the government has won the bet.  NYT's analysis also reflected successfully the fact that economic paradigm change was acknowledged completely not only in Turkey but also in the rest of the world. Remember all the commentaries we wrote with the "concepts are not the same anymore" focus. In 2008, we said several [More]
    Change of era in Japan
    Güven Sak, PhD 01 September 2009
    What is expected happened. Liberal Democrats that have been ruling the country for almost five decades lost the elections in Japan. Now, Democratic Party of Japan will rule the country. In 2005, Liberal Democrats headed by former Prime Minister Junichiro Koizumi won the victory. Now, Democratic Party of Japan achieved a huge success: it took 308 out of 480 seats. In fact, expiry date of Liberal Democrat Party (LDP) had long passed. But it took a decade for the known one to become true. Why? When in the United States of America (USA) the office was taken over from Republicans to Democrats, we did not interpret the issue as "the economic crisis is shaking ruling parties". Republicans had more than one reasons to leave the office. So, can we put forth the same argument in the case of Japan? I [More]
    We are definitely among the top ten in Facebook
    Güven Sak, PhD 29 August 2009
    The people of this region have an endless passion for being at top. It is always important to be THE first, at least to be among the top five or in the worst case among the top ten. I do not know the reason, but this is correct. The 'we have the seventeenth biggest economy of the world' talks also originate from this passion. We are the sixth biggest economy among European economies. We would like to present a ranking for those who like to ask "So, how do we rank?" we have to say that Turkey seems to rank very well in the popular website Facebook. We are definitely in the top ten. Today, let us think through what this means. Is it something good or bad? [More]
    What is the milieu while Bernanke is re-assigned
    Güven Sak, PhD 27 August 2009
    FED Chairman Bernanke will pursue his duty for another period. Bernanke was an academic that studied on Great Depression period of 1930s. Now in the period of a new economic recession emerging eight decades after the Great Depression, he plays a key role in the design and implementation of economic policies. What can we say? Such is life. A fortunate person is that who undertakes responsibilities on an issue he/she get prepared for throughout his/her life, is not he/she? Therefore, Ben Bernanke is a fortunate person. Given that the issue he has been elaborating on for years have recently begun to affect our lives adversely, he holds the position to carry into affect what he has been thinking on for years and to lead us. How happy! But, what should the re-assigning of Bernanke make us think [More]
    Do not banks’ shareholders have any fault in this?
    Güven Sak, PhD 22 August 2009
    Federal Reserve (FED) brings together twelve regional central banks. Among these, Kansas City Central Bank has been organizing a professional conference in Jackson Hole for thirty one years and convenes economists and central bank officials. Last week, various people from FED Chairman Bernanke to European Central Bank Chairman Trichet started to convene in this holiday resort in the Wyoming province.  Kansas City Central Bank Chairman Hoenig, inaugurating the meeting, mainly put the question at the title on the agenda: Are not banks' shareholders among the convicts of the economic crisis that led to extensive use of the financial resources of taxpayers? And did not they have to pay a price for this? This is the topic we will deal with this weekend. If you are interested; please proceed. [More]
    Eximbank is more important than the Central Bank
    Güven Sak, PhD 20 August 2009
    Central Bank of Republic of Turkey (CBRT) goes on to cut interest rates.  But, does the Bank do this because things are on track? No, it does not. On the contrary, CBRT goes on to cut interest rates because things are not on track considering the real sector. What else would it do? It has only one instrument; so it uses that instruments whether or not it works. We believe that, for the going period, Eximbank (Export Credit Bank of Turkey) is more important than the CBRT in terms of the recent period growth of the real sector. Or, to put it differently, we believe that the CBRT is not as important as Eximbank. Let us show why. [More]
    Have you visited Sankopark?
    Güven Sak, PhD 15 August 2009
    Have you recently gone to Gaziantep? And if you have, have you also visited Sankopark? I have. Sankopark seemed to me as a sign that the efforts to spread industrial activities around Anatolia are paying. It stood up as an indicator that Turgut Ozal reforms have taken root around the region. When I saw Sankopark, I understood once more the Smart Industry Project of the Chamber of Industry of Gaziantep. [More]
    Chickens have come home to roost
    Güven Sak, PhD 13 August 2009
    We are going through complicated times. Interesting things happen. In June, we say "Oh! Thank God the economy contracted only by 10 percent" and cheer up. On the one hand, "Masallah! You are doing very very well" propaganda goes around whereas on the other hand prevails a "we are ruined, we are done" climate. In such an environment, it is of importance to decide what to do. However, the information pollution prevents not only making a decision but even thinking on one. Therefore it becomes impossible to set priorities. Today, let us examine why protecting export markets is the priority for Turkey and reach a conclusion: Turkey needs an intensive export incentive system. What matters today is protecting the already existent. It is not time to leap forward. Let us see why. [More]
    Concepts are not the same anymore
    Güven Sak, PhD 11 August 2009
    Last week we started to emphasize that in the going period of economic depression, the meaning of concepts is not the same anymore. In the past, we lived in a world we know. The meaning of a fall in inflation was definite. We would know what happens if interest rates go down. Even appreciation of Turkish lira had a specific meaning about stability. Each tool and/or indicator has a meaning within a generally accepted conceptual framework. But it was yesterday; and now it ended. [More]
    What brings Erdogan, Putin and Berlusconi together?
    Güven Sak, PhD 08 August 2009
    Putin who until today responded to those saying 'Nabucco' as 'With what they are planning to fill it?' or 'what the hell is that?' has talked about Ankara as an alternative route. Well said, we think. [More]