15.75% return on turkey government notes?

Discussion in 'Economics' started by jjk2, Feb 4, 2008.

  1. jjk2


    how can i buy turkish bonds. current interest rate is this crazy, would it be reflected into the bonds.

    why isn't everyone buying it then .

    thank you.
  2. well, what are you going to do it they decide to stop paying on them?
  3. Inflation/currency risk is high... perhaps default risk, too.
  4. Mvic


    Keep in mind that before the mad heat seeking carry trade money pushed rates of EM notes lower than some corporates these EMs notes were giving off 25%+

    If we see any kind of real global recession I wouldn't want my money in Turkish notes for any price.
  5. jjk2


    have they ever defaulted ?

    what about iceland? indias not bad either.
  6. Mvic


    Safest way to play these things is via an international or EM bond fund, unless you really know what you are doing there are too many risks involved that are cumbersome for a retail trader to hedge.

    An old article but covers the basics:


    Going back to Turkey, if an Islamic fundamentalist government came to power there they could simply cancel all government obligations and you would have no recourse. Unlikely I know but what with the currency and inflation risk 15% isn't much compensation for a country like Turkey as far as I am concerned. I not a bond guy but spreads are still too tight according to people I know who work in this area.
  7. H*Pi


    Buy the leveraged carry trade. Long USDJPY, short USDTRY is synthetic long TRYJPY. I would be very careful and to trade it small.
  8. Saxo bank told me three months ago that they have or will introduce the TRY/JPY. I am also considering the Island Krona (ISK?) Does anyone know how to play the ISK vs. US or JPY.
    Yen is getting strong though which is another issue.

    I would love to buy the Turkish bond (with leverage). Europe domographics have no choice but to accept Turkey. If you know of any fund that buys high yielding bonds and short low yield let us know.
  9. Mvic


  10. What is fine Turkish long cut tobacco made out of?
    If they defaulted, would they tell you to put that in your pipe and smoke it?
    #10     Feb 5, 2008