By Micah Halpern
I've Been Thinking:
Standard and Poor's is the most influential rating agency in the world. They rate countries and they rate their credit.
This week Turkey was dropped from "positive" to "stable." And if you had asked me, I would have said that
I was surprised it was not dropped even lower. Turkey would have dropped even more had it not been for some very dynamic economic legislation.
This will certainly drop the credit rating of Turkey and that drop in credit rating will immediately impact on their interest which means that the cost of their loans will skyrocket.
The Turks are livid - on the same day the S&P dropped their rating, they improved the rating on Greece.
Turkey is claiming bias and the president of Turkey has announced that Turkey no longer relies on the S&P.
The reality is that Turkey only had minimal growth of 4% in 2011 and expect only 2% this year. Exports are only 24% of their economy and prices increased 11% in April. China holds most of their debt and the debt is in the form of a short term loan.
Turkey can be as angry as they want but they are in bad economic shape and it ony looks worse in the short term future.
Standard and Poor's is the most influential rating agency in the world. They rate countries and they rate their credit.
This week Turkey was dropped from "positive" to "stable." And if you had asked me, I would have said that
I was surprised it was not dropped even lower. Turkey would have dropped even more had it not been for some very dynamic economic legislation.
This will certainly drop the credit rating of Turkey and that drop in credit rating will immediately impact on their interest which means that the cost of their loans will skyrocket.
The Turks are livid - on the same day the S&P dropped their rating, they improved the rating on Greece.
Turkey is claiming bias and the president of Turkey has announced that Turkey no longer relies on the S&P.
The reality is that Turkey only had minimal growth of 4% in 2011 and expect only 2% this year. Exports are only 24% of their economy and prices increased 11% in April. China holds most of their debt and the debt is in the form of a short term loan.
Turkey can be as angry as they want but they are in bad economic shape and it ony looks worse in the short term future.
Micah@MicahHalpern.com
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