​It is geo-politics, stupid

TURKEY - In Brief 22 Apr 2021 by Atilla Yesilada

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As I write these lines, dollar/TL had already skyrocketed to 8.28-30, and I’m willing to bet that short of a miracle the parity shall continue to climb through Friday evening. As Cosmo warned our readership in the last Weekly Tracker, Turkish markets are now marching to the drumbeat of political risks and Covid-19.This Market Brief focuses on Wall Street Journal and New York Times articles (not linked, since I’ not a subscriber) about Joe Biden contemplating to recognize the ethnic cleansing of Anatolian Armenians in 1915 by the Ottoman Empire as genocide. I’ll argue that while such a move by Biden is not a calamity by itself, it is the typical Pandora’s Box situation for Turkey. The analysis is brief and covers the other two risks, namely Russia getting more belligerent by the day about Ukraine and Canal Istanbul, as well as the raging Covid-19 epidemic, because even Bloomberg claims the latter is now a pricing focus. What is to say about what I call ethnic cleansing and Armenians genocide? No matter how I label this horrible war crime and atrocity, I’m going to catch flack from some of the members of our audience, so I’m going into this Market Brief, using President Erdogan’s favorite phrase ”we rode to this battle wearing our funeral shrouds as armor”. While numerous nations have recognized the said event as genocide, some Turkish diplomats argue that Biden’s recognition, in particular after coming the Congressional non-binding resolution in the same direction, would allow the Armenian Diaspora to lodge lawsuits for compensation running into tens of billions of dollars. I’m too uneducated in matters of law to assess these claims. Yet I know one thing: Recognition by...