Tag: Goldman Sachs

  • Turkey: “unstoppable” for long?

    Turkey: “unstoppable” for long?

    by Daniel Dombey

    Whatever criticisms you can make of what one analyst labels Turkey’s “unstoppable” economy, there’s one thing the country’s economic boom is thankfully free of. It’s not an American style jobless recovery.

    Istanbul Getty

    Quite the contrary. In the last year Turkey has created some 1.8m new jobs. Figures released on Thursday showed unemployment fell to 8.8 per cent to September, the lowest level since 2005 and down from a 2009 peak of more than 16 per cent.. On a seasonally adjusted basis, unemployment fell to 9.2 per cent, also the lowest level of recent times. But analysts are almost universal in predicting that things won’t stay quite this sweet for long.

    Unstoppable it may be for the moment, but just about no one expects Turkey to keep up its current hectic pace of economic expansion – 9.6 per cent for the first nine months of this year compared with the same period in 2010.

    Indeed, on Thursday Merrill Lynch added its voice to Goldman Sachs’ in warning of the risk of an imminent recession.

    “With the complexity of central bank policy and the need for corporates to absorb their foreign exchange mismatches, the result could manifest itself in a recession which we do not believe is fully appreciated by the market,” Merrill said, in an apparent reference to the central bank’s sensationally complicated interest rate corridor policy and the $59bn of dollars in short term obligations held by Turkish corporates, much of which come due in the next few months.

    The interest rate corridor policy involves rationing how much the central bank lends commercial banks at the benchmark rate of 5.75 per cent rather than more expensive rates of 12 and 12.5 per cent. It allows the central bank a huge amount of flexibility over rates, but has led to widespread calls, particularly from abroad, for greater transparency and predictability.

    Indeed, so great is the confusion about what interest rates actually are that some bankers say it has become hard to perform an old-fashioned carry trade, and that many portfolio investors are just waiting until the benchmark rate is increased to deal with Turkey’s bloated current account deficit and rising inflation.

    Still, that’s not to say there isn’t any foreign investment. Just this week, the Malaysian sovereign wealth fund Khazanah Nasional moved closer to completing a deal whereby it would take a majority stake of Acibadem, a big Turkish hospital chain, through direct and indirect holdings. Since Acibadem, which runs 11 hospitals and other medical facilities, has market capitalisation of about TL2.5bn ($1.3bn), it is not a trivial deal.

    So while Turkey may be headed for tougher times in coming months – and the jobs bonanza seems set to slow – its longer term growth story is still bringing investors in.

    via Turkey: “unstoppable” for long? | beyondbrics | News and views on emerging markets from the Financial Times – FT.com.

  • A Letter from Goldman Sachs

    A Letter from Goldman Sachs

    A Letter from Goldman Sachs

    Concerning Occupy Wall Street

    NEW YORK (The Borowitz Report)– The following is a letter released today by Lloyd Blankfein, the chairman of banking giant Goldman Sachs:

    goldman

    Dear Investor:

    Up until now, Goldman Sachs has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests. And we have asked ourselves this question:

    How can we make money off them?

    The answer is the newly launched Goldman Sachs Global Rage Fund, whose investment objective is to monetize the Occupy Wall Street protests as they spread around the world. At Goldman, we recognize that the capitalist system as we know it is circling the drain – but there’s plenty of money to be made on the way down.

    The Rage Fund will seek out opportunities to invest in products that are poised to benefit from the spreading protests, from police batons and barricades to stun guns and forehead bandages. Furthermore, as clashes between police and protesters turn ever more violent, we are making significant bets on companies that manufacture replacements for broken windows and overturned cars, as well as the raw materials necessary for the construction and incineration of effigies.

    It would be tempting, at a time like this, to say “Let them eat cake.” But at Goldman, we are actively seeking to corner the market in cake futures. We project that through our aggressive market manipulation, the price of a piece of cake will quadruple by the end of 2011.

    Please contact your Goldman representative for a full prospectus. As the world descends into a Darwinian free-for-all, the Goldman Sachs Rage Fund is a great way to tell the protesters, “Occupy this.” We haven’t felt so good about something we’ve sold since our souls.

    Sincerely,

    Lloyd Blankfein

    Chairman, Goldman Sachs

    via A Letter from Goldman Sachs « Borowitz Report.