Headlines:

• Trump to Be Impeached
• Global Recession
• Turkey’s Economic Plan

Trump to Be Impeached

It seems Donald Trump may finally have overplayed his hand. Last week House Speaker Nancy Pelosi announced impeachment proceedings against the President over a phone call made to the President of Ukraine. According to the White House record of the call, the President asked his Ukrainian counterpart to look into whether there was any evidence of Ukrainian meddling in the 2016 election and then mentioned that a lot of people were talking about how former US Vice President Joe Biden stopped the prosecution of his son who was under investigation for corruption in Ukraine. Trump has admitted as much, but reasoned he did so for national security purposes. America abroad and now at home is a complete mess, Trump’s term has been filled with its politicians turning on itself and many America is wondering what’s happened to their nation.

Global Recession

The US central bank has pumped more than $200 billion into the financial system on the past two weeks, the first time there’s been such an intervention since 2008. Banks, hedge funds and other players borrow money regularly on a short-term basis to ensure their books are in order, no matter what their daily activities. The borrowers typically offer government bonds or other high quality assets as collateral, which they repurchase, plus interest, when they repay the loan – often the next day. Those repurchase agreements are the repo market. This is a huge market, with some $3 trillion changing hands each day. But the cost of borrowing has shot up towards 10%, more than the normal interest rate. The US central bank has more than five times recently injected money into the market, offering to buy up to $75 billion in treasuries or other assets from banks in a bid to boost bank reserves and keep them lending. All of this really shows the effects of the global economic crisis 10 years ago are still not resolved, and all this takes place with a global recession on the horizon.

Turkey’s Economic Plan

Turkish Treasury and Finance Minister Berat Albayrak announced the country’s economic program for 2020-22, under the theme “Transformation Begins.” The plan revealed the aims of the government to reduce unemployment, increase GDP and its budget deficit. Turkey’s Treasury also announced plans to pay off $10 billion in debt by the end of 2019. Turkey’s gross external debt is $446 billion at the end of June, the equivalent of 61% of GDP. The feasibility of these goals is questionable, and it still faces the challenge of turning the plan into reality after years of borrowing.