The Kapali Carsi

More on the Turkish connected lending story

Let’s start with a summary of the Isbank/CHP controversy that led me to the small exercise in last week’s column, which was also posted here: I already linked the Daily News article on the issue in the column, but if you’d like another version, here is what Today’s Zaman has to say. They actually have more details on the allegations of connected lending. I would be particularly interested to see the “data” AKP’s Gedikli is referring to, as my own data reach the exactly opposite conclusion, as you can read in the column.

As for the Sabah attacks: The Turkish daily ran a daily series on the issue for almost two weeks. Here they are, in chronological order (but in Turkish): Sabah introduces the issue, saying that CHP should pay compensation for the Dersim killings of 1937-1938, which had become a headline item with the PM’s apology to the families of the victims. The daily continued with other justifications, noting that no political party should own shares in a bank (with which I wholeheartedly agree, but that wasn’t the topic of my column). When there is no response from the CHP, Karamuk resorts to what he knows best, i.e. threats: First to the CHP, claiming that the party had used its board presence in the bank to its advantage and had even lent to the Ergenekon gang; and then to the bank’s Chairman Ersin Ozince (after mocking with his responses to the allegations), threatening to sue him because the bank is allegedly brainwashing kids with its children’s books (if you’ll read just one of these journalism masterpieces, it should be this one!) Finally, he calls Economy tzar Babacan and the Capital Markets Board to action. But even when “his masters” do not take him seriously and don’t bother a response, he quiets down and returns to his kennel:)

But the story doesn’t quite end here: A week or so later, Hurriyet columnist Erdal Saglam calls the banking regulator into action, claiming the attacks to Sabah are illegal. So Karamuk goes on the offense again: Just like he had done it for Bloomberg’s Benjamin Harvey, he questions Saglam’s knowledge of economics. To prove his point, he writes the formula I mention in my column, stating that Erdam Saglam would not know it. When Saglam does not respond, he then challenges the “whole interest rate lobby”, and as a self-declared member of the lobby, I need to come out and confess that, despite having studied economics for a decade, and then practiced, in the academia, think-tanks, international institutions, consultants and banks for another decade, I have no idea what the formula stood for… Karamuk finally discloses that the formula is for calculating “compound interest rate“. Honestly, I still have no idea how one would go about calculating compound interest with that formula, and I doubt Karamuk knows, either. He probably has seen it somewhere and copied it:) And he dares to questions others’ knowledge of economics!  However, had he asked me or any member of “the lobby” with a couple of calculus/economics classes under her belt, he would have learned that the real compound interest rate formula has the initials of his favorite politician: A(t)=A(0)e^rt!:)

Joking aside, I really don’t mind such BS appearing every day in a Turkish paper. There are several Turkish tabloids like Sok, which I got introduced to during my short military service, which get their world news feeds from their British counterparts and run stories of people abducted by aliens and the like; Sabah’s economy pages are no less fictional than these.  On the contrary, I find those quite entertaining, and have recently added Sabah to my auto-delivery list Pressdisplay’s Pressreader, where I read my papers. However, the sad thing is that many Turks take the Sabah economy pages seriously…

Anyway, changing gears, I should say I wasn’t happy with the way the CHP and Isbank handled the situation. Isbank’s press office refused to provide me with the news clips of articles that had appeared in the Turkish press about the issue, let alone make any comments. I also did not get any response to my emails to Isbank’s chairman. As for the CHP, I managed to get in touch with their top econ. dog through a friend, who impatiently told me he wasn’t talking about the issue. He then led me to another top brass in the CHP,  but I decided not to contact him after seeing his press release on the issue. That document does not seem to be on the party’s web page, but basically all he was saying was that Isbank shares are a bequest of Ataturk and therefore sacred… which is incidentally how the CHP had responded five years ago when their Isbank shares were first criticized by the AKP.  In retrospect, I am glad I did not talk to Isbank or the CHP; otherwise, I would probably have written standard journalistic story reporting them rather than my little analytical play, but still: Sorry guys, but you all are making it way too easy for Sabah…

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