tv Bloomberg Markets Balance of Power Bloomberg August 10, 2018 12:00pm-1:00pm EDT
westin. welcome to bloomberg balance of power. turmoil, the in lira plunges as president trump announces he is doubling tariffs on turkish steel and aluminum. turkey says there is an economic war. prosecutors expect to rest their case in the financial fraud trial of president trump's former campaign manager. a wave of primaries are on deck next week. democrats look to close in on republican held districts while the gop looks to get on the same message. turkey takes another hit. tensions with the u.s. are escalating while the euro -- lira surpasses the argentinian currency as the worst performer.
earlier,listic speech telling the people of turkey to trust in god and exchange their foreign exchange reserves. his message failed to stop the bleeding. president trump piled it on with a tweet -- i have just authorized tariffs against turkey. aluminum will now be 20%, steel 50%. our relations with turkey are not good at this time. for more on how this could shake out, we welcome jacob kierkegaard from the peterson institute for international economics. seemed -- erdogan seemed pretty defiant. jacob: i do not think that we should be under any illusions that this strategy, which is a nationalistic one to blame the
ongoing becoming economic hardship in turkey will buy him more time. ultimately, i believe he ends up at the imf but it could be quite a few months from now. kevin: this is literally the castro playbook. he is trying to double down an appeal to his base. he has the worst performing currency of the year. numbers do not lie. data does not lie. what is his end goal? jacob: i don't think he has a strategy. if you go out at this point and ask your political supporters to donate their hard currency and gold for the national treasury, which is essentially what he is doing, you do not have a strategy. when you say the markets might have dollars, we have our faith, you are basically hoping that something will happen. you do not know quite what it is: -- what it is. donating a foreign
exchange reserve is reminding me of the asian financial crisis and the late 1990's and how they had to go to the imf. jacob: korea 1997. shery: that is such an interesting point. how bad does it need to get for turkey to go to the fund? jacob: i think given that you have are seen an overall decline of the currency by over one third, we know what that does to inflation. i think you will be looking at further declines in the exchange rate. you could soon be talking about potential capital controls, which is another time-tested policy of the asian financial crisis and afterwards. it only buys you time and it doesn't necessarily starve off basically a significant slowdown in the economy. the mystically in turkey, i think you will see the banking
sector come under tremendous strain and with private and state owned so it does not avoid a crisis. for someone who has just been elected and his own mind, probably president for life, it is not a great ticket. shery: turkish and russian media right now are talking about erd ogan conferring with vladimir putin on their ties. this will definitely put the two together closer. enemy'sou know, your enemy is your friend, right? the reality is that turkey has among the lowest foreign-exchange reserves of any major emerging market, quite in 2014ladimir putin when he was facing significant international sanctions. putin does not have the money to deal erdogan a sweetheart and even if he did, there is no
guarantee the geo conditionality he would ask for turkey, for instance, a departure from nato. it would be difficult for erdogan to honor. kevin: there is no question at all that with the president announcing sanctions against russia and turkey on the same day, they are watching turkish-russian relations. int has to do with syria terms of the foreign policy of russia and syria. jacob: no doubt about that. the joker in syria is what happens in italy? if you have a full-blown economic meltdown in turkey, which i would not rule out, combining that with what appears to be in imminent attack by the syrian government of president assad on the province, right on the border with turkey, you could have hundreds of thousands of refugees fleeing toward the turkish border very soon.
what does president erdogan do? does he take in another half a million, a million, or does he block them at the border? if he takes them in does he "let them pass" to greece in europe? it is certainly one to watch. shery: thank you so much for your time. the deepening crisis in turkey leading investors to question whether this is an isolated event or it could spread. let's get of the check -- a check of the markets. bit of it has a little impact on u.s. markets, just the negative sentiment pushing the s&p off about one half of 1%. these small caps up almost 2/10 of 1% in part because of the stronger dollar story. small caps are a bright spot. to the small caps
before i talk about the other major indices. coming from a lot of other things other than earnings, earnings applauded by investors. analysts are saying stay in, do not get out with overstock, you are getting a bull case scenario from an analyst saying they are on much further -- firmer footing. planet fitness up 7% on earnings. it is so hot outside, people are signing up for gym memberships. i want to look where we are for is week, given that it friday. on the s&p 500 we were looking for our fifth straight week of gains. now, looking at a loss of about 1/10 of 1%. the nasdaq up for a second week in a row. with the s&p 500, you are seeing losses coming from a broad array
of companies. starting with exxon mobil, they lost the fight, down 1.3% for a tax refund. intel got a downgrade from goldman to a sell on concerns about their competitive position and margin. citigroup, we got headlines in the past hour from the federal reserve saying improper practices occurred in 2015 regarding mortgage document finds. .hose have been corrected they were fined about $8.6 million. shery: breaking news right how, soybean futures falling as much as 3.1% after we got u.s. da showingusda data soybean yields coming in at 51.6 buscher's -- bushels per acre. , soybean ending stocks 116 million tons.
the u.s. is cutting e.u. we output estimates as well for for, 137.5 million tons 2018 to 2019. ,oybean futures falling 2.6% falling as much as 3.1% earlier on the data. trade tensions aching these commodity markets very anxious right now. usda cutting e.u. e-sports estimates and futures falling by as much is 1.6%. kevin: fascinating to see in real time how the trade tensions are impacting the agricultural sector. we have much more coming up, because the next wave of primaries are on deck for next week. we will look at some of the key contests with our all-star political panel. this is bloomberg. ♪
♪ shery: this is bloomberg markets, balance of power. i am shery ahn. kevin: i am kevin cirilli. mark: in virginia, prosecutors expect to rest their case in the financial fraud trial of president trump's former campaign manager paul manafort. they have been trying to show that he obtained millions in bank loans fraudulently. two prosecution witnesses have been granted immunity. recesss ellis called a until 1:45 without explanation and warned jurors not to ask -- discussed the case with anyone. international community is expressing outrage after
yesterday's saudi led airstrike in northern yemen. it killed at least 50 people, more than half of them children. the you and children's fund called for an end to a recent spate of violence targeting civilians. >> the single worst attacks since 2015. no such number of children have been involved before. >> every day children are starving, children are dying because of the violence and its consequences. mark: the un's secretary-general investigation"" into the incident. miami dolphins players kenny stills and albert wilson are seen here kneeling during the anthem. nfl and the players union have yet to announce a policy for the
season regarding demonstrations during the star-spangled banner. global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: thank you. the midterm primary calendar marches on with key contests tomorrow in hawaii, and next week voters head to the polls in connecticut, minnesota, for montt, and wisconsin. in kansas, the race for governor remains too close to call with kris kobach recusing himself against the vote. let's bring in basil smikle and jen kearns. the gopart with gubernatorial primary. we could get even a recount after the extended counting progress -- process your it does
this give a leg up to the democrats if other candidates can use that time to go out and campaign? jen: they could. what this shows us is exactly how close these races are in these 2018 midterm elections. in the case of kris kobach, the important lesson shows the power of the endorsement of president donald trump. my understanding is the co-block campaign did not ask for that until the 11th hour. it helped him in this case. what the white house and gop is figuring out is where does donald trump's endorsement help and where does it hurt? that is the biggest challenge for the -- gop. shery: looking at all the elections this week, what is your take away for the democratic strategy? basil: the strategy is first and foremost, to contend in every seat in every district. that is something the party has
sometimes not done. the lessons from this week is that we can contest it and we can be strong in districts where we may have thought we otherwise would not have been. we actually forced the republicans to spend money in these districts. shery: like ohio. basil: exactly like ohio. it is also a referendum, quite frankly, on the president. if we can keep him from campaigning or push him to do it in other areas where we can bring back some voters like suburban voters. jen: the gop can afford to spend money. i am down here in d.c. and i'm peeking out over this list of primaries coming up next week. i am interested to see what happens in wisconsin and the gop senate primary. the first-time candidate kevin
nicholson, this tape has emerged of the state senator completely bashing then candidate donald trump. i am reading this is a test of whether or not the anti-trumpers versus the diehard trumpers. jen: no doubt there is still a never trump coalition, and there is room for disagreement and debate within the republican party. i do not think the gop is having the identity crisis and civil war as much as the democrats. kevin: fair. jen: if you look at maxine waters' statements, you have a lot of problems on the democrat side. look at the hawaii race. this is a person who stood up for bernie sanders against the hillary clinton machine and has continued to be punished, including recently when the hawaii teachers association revoked their endorsement from her.
we have a lot of problems internally in the democratic party that i think will show. kevin: with regards to the senate primary republican in wisconsin, folks will make a lot out of this. what can we read from this primary next week? whileook, it has been a since a presidential candidate has one in wisconsin. you have speaker paul ryan retiring. this is a process that i would agree with some of the left-wing analysts saying that republicans will keep that paul ryan seat. i think it will be a safe bet. kevin: you mentioned the independent voters, women voters, huge suburban voters. we have seen ivanka trump hit the campaign trail. i think you would argue these are the key constituency for the next cycle as well as the midterms, these college educated women suburbanites. basil: that is correct.
the suburbs have actually become far more diverse. that is true nationally. you have what i call sort of a political osmosis that you have with a lot of suburban voters who care deeply about taxation and governance, but they are also starting to voice their concerns and opinions about social justice issues. -- ivankaanka trunk trump being able to go out and campaign on behalf of the president or republicans, i do think the ways in which this -- in which this president has engaged with women will resonate with many voters. shery: a civil war brewing within the democratic party. , hernolulu this week endorsements have not played out. is that a good thing for the democratic party? basil: i do not think there is a civil war in our party. we are actually mature enough to handle our differences within the party and handle our debates.
we are a party of social economic justice and i like the fact that cortez is campaigning and raising money for candidates. she is actually helping us gain attention for our candidates. their speaker is retiring. our minority leader is staying put. shery: we will be back with basil smikle and jen kearns to discuss more. this is bloomberg. ♪
how galvanizing will the appointment of judges to the supreme court be for the republicans? jen: that will be significant. the republican base rallied around judge gorsuch. of the supreme court is important to the republican base. i think the midterms may have already been won and lost in terms of messaging. democrats went out pretty early and said there will be a big blue wave. i think the democrats have artie lost the midterms, regardless of what will happen. shery: the management of expectations. basil: that is important to me, because even if we do make substantial gains, if they are not at the expectations we set than the perception is we will have lost. i think we have some really good messaging and republicans could have it, but they have sort of been kept from talking about the gdp and growth of the economy. they have not been able to go
out and talk about tax cuts in the way they thought they would be able to. it provides an opening for us to provide alternatives and we are doing that district i district. jen: republicans do not have to talk about it when the actions speak larger. record low unemployment for african-americans, record low unemployment for women, we don't have to talk about it. i think the american people feel it and that is what they will be voting on. kevin: i was struck to see these headlines that michael of a naughty will be in iowa. stranger things have happened. i am eager to get back on the presidential campaign trail. let me ask you this -- do you think this issue of impeachment, russia, should that be the driving message coming from democrats or should they play up other economic messages? basil: i am of the believe that we should be playing up the economic issues because i think that russia is actually built into the vote now.
there is no reason for us to keep it in. early on as learned if you see a boulder rolling down the road, do not get in its way. the truth is, with respect to impeachment, i think the average voter is not thinking about that. they do not like what they see but we still have to provide the alternative. we cannot put all of our hopes on getting a democratic congress just so we can impeach the president. it has to be more than that. kevin: i think you would agree. common ground. jen: that is why it was a great question and that is why basil is very smart. a poll out about a month ago show the popularity of the special counsel is down about 12 points. you have that at the same time that the president's popularity is up about five points. that is why you see democrat saying, better not talk about the special counsel as much.
even robert mueller who is legendarily respected, his personal opinion polling is down as well. of alled the popularity special counsel and that is where we are today. shery: thank you so much today. jen kearns and basil smikle. thank you both for this discussion today. we have plenty more coming up. if you missed out on any of the interviews, tv is your function. if you have any questions for guests, do not forget to send them through. live from new york and d.c. today, this is bloomberg. ♪
falling for the third consecutive session. we have geopolitics playing into the markets. tariffst trump with the on turkish metals, escalating the economic crisis in the country. defensive utilities are the only sector that is rising at the moment. curbin 8q down .4%, sessions of gains. let's get to the headlines with global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. let's get to headlines with "first word" news and mark crumpton. mark: turkish headlines have the country on a full-blown meltdown. president trump has vented his anger that turkey refuses to detainedt attained-- a anchor. u.s. trade ministry says that the duties break rules. president erdogan urged turks to
buy the currency with gold and foreign exchange. declining toted by another record low. former female employees have suited 90 for sex discrimination. sued nike for sex discrimination. the suit claims they were passed over for promotions and pay less than their male counterparts. they're calling for unspecified monetary damages and a court order requiring nike to pay employees fairly without regard to gender. nike has not commented. in southern france, heavy rains have transformed rivers and streams into torrents. local officials say 1600 people were evacuated in the region, many of them from campsites. the french interior ministry said 400 firefighters and police are helping to perform rescue operations. the former malaysian prime
minister has failed to win a court order barring the media from discussing the merits of corruption charges against him. a high court judge of said any gag on the press would be "a major incursion on freedom of speech and expression." his lawyers plan to appeal, say that public sentiment favoring conviction led to many articles inferring his guilt which could deny him a fair trial. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. shery: mark, thank you. cardio.the gas on a the u.s. and mexico are wrapping up the third week of talks. canada will be joined the negotiations once the bilateral
talks between the u.s. and mexico conclude. for more, let's welcome a bloomberg news reported. we're hearing from the minister that the talks could continue into next week. how far are we from a breakthrough? to thear, according economy minister, there actually is a lot of work that has already been done in these three weeks in d.c. there is optimism that the agreement come whatever it ends up being, is quite far a lot, and as you said, the issues on the minimum wage. what percentage of a car being made when it is imported to the u.s. is made from higher wage labor -- in other words, that would limit the need for companies to go to mexico to create these automobiles. this is something being discussed right now and as you said, talks are going to continue. once i have the issue figured out -- once as they have not even mentioned canada, who are
not in the talks right now, but hopefully they will rejoin the conversation. kevin: let's talk about candida. what are they making of all of this? when you go to states like wisconsin, they have a big primary. michigan, another example. quite frankly republicans in the progress alike disagree if republicans and democrats alike disagree -- quite frankly, republicans and democrats alike disagree with the nafta talks. how does that work out? katia: very good question, especially because we have seen canada taking this back seat in the current negotiations also both mexico and canada, interestingly enough, see the same issues at play. the sunset clause, for example. they don't want to have to keep renegotiating every five years going back to the table after making significant progress.
after we see the economy minister from mexico leaving, it is going to be the same issue with canada. that is going to play into the midterms which are coming soon after the holidays. shery: not to mention the dispute settlement panels. when it comes to canada, the u.s. is adamant that it wants to see it's very market opened up. market -- its dairy market opened up. katia: from the most recent negotiations it is focus on the auto issue and the components. one thing that will come up is when we have canada coming back in -- as you remember, this was a big issue coming from canada with -- although under nafta there was a lot of these factors that were moved. there has been trade between candidate and the u.s. when it comes to -- there has been trade between canada and the u.s. when it comes to dairy.
we have a very strong dairy lobby in canada, and that is something that canadian officials are quite proud of, especially in the prairie provinces. looking from the u.s. perspective, it is negative, especially with all the other tariffs coming in on trade from other countries. they want to get there dairy products into canada. kevin: and the billions in aid coming from the usda, but for canada, i get the intense rhetorical environment we are living in, but is canada overplaying their hand? katia: in what sense? kevin: just in terms of how the nafta negotiations are doing. if they are gearing trump to get out of the deal, look no further than turkey to see how that turns out. katia: absolutely. we are entering this environment where tariffs are becoming so easily imposed. if you have an issue -- it started with longer. -- lumber.
lumber issues with something going out for the kids. kevin: congressman collins' district. katia: washing machines, solar panels. iry andre talking da these other items. if there is an issue, it is tariffs. it is playing well for republicans in certain districts for certain voters. what does that mean for them? jobs. shery: katia, thank you so much. let's turn to immigration. on june 20, president trump publicly retreated from his administration's policy of family separations at the border which led to 3000 migrant children being taken from their parents. bloomberg has learned that the negative order not prevent all separations. on the same day, a woman found herself separated from her children by ice because of murky
allegations. , we thought that the zero tolerance policy was over with. now we are hearing that there could have been more separations even after the policy was ended. tell us what is happening at the border. jennifer: this situation -- i spoke to a woman named raquel who came to alsop -- came from el salvador and was separated from her two sons aged nine and 13 on june 30 -- it is about the government taking a small piece of information it had that it seemed like she might be a gang member, but did not have a lot of evidence to back that up, and using that as a reason to separate her children pretty forcibly when they were in a family detention center much further down the immigration process than where the separations were happening
during that zero-tolerance period. lawyers have been spending the past month trying to figure out how to convince the government that she is not a gang member, she is not a threat, and if anything, she is the one who is in danger. she says she came here and has sworn to the government in an asylum interview after being the victim of police violence that she showed me a big scar she has on her left arm. and she felt like she was still threatened, she was getting text message, she felt like she had to leave her country and had to apply for asylum, the process is taking too long, so she decided to come here. it just shows that the things that were happening before this
period where 3000 separations happened are continuing to happen and there is a certain level of arbitrariness about it from and it is difficult for lawyers to get information and fight any claim that the government makes. shery: it is also about the deportations, because we're hearing that a federal judge may call attorney general sessions nielsen in front of him if a mother and her child who were deported while the asylum seeking process was happening -- if that is not solved, because they were deported before, and he rolled in that case. jennifer: this happened yesterday. the government was not supposed to be able to deport this mother p.m.hild until 11:59 yesterday. while they were in court yesterday morning, the aclu found out that the mother and child were being brought to the airport at that very moment to leave the u.s.
it was too late to stop the process comes of the judge, while the plane was in the air, basically ordered the plane to turn around. they ended up flying to central america and then flying back. said the the judge government agreed to not deport until the end of the day at the earliest. they moved ahead and violated that agreement -- kevin: sounds like a mess. i mean, jen, not to cut you off, but it sounds like a mess. we have little more than a minute left. break this down for me. the administration said they change the policy and try to do alleviate this version. you are on the ground and you tell me that the problems are still occurring. my second part of the question is is this what the impact the midterm elections at all? it increasingly looks like a polarizing issue if you are a republican for a democrat. jennifer: the polarization has
happy to vary substantially in the last month or so. you had people voicing horror that the families were being separated in part because some on the left had gone to this abolished ice message just because the president had railed against illegal immigration yet again. you have seen this polarization happening, and there is not much of a middle ground, and i don't know that it is going to end up being a key issue in congressional horses because it is another place where people have hardened into their positions. kevin: thanks so much for your great reporting from literally at the border. pstein, thank you for coming on. u.s. prosecutors plan to wrap up their case against paul manafort today, for the $16 million kicker. this is bloomberg. ♪
kevin: this is "bloomberg markets: balance of power." i am kevin cirilli. shery: i'm shery ahn. headline inflation held that 2.9% for the second month. let's welcome carl riccadonna. we had the gop strategist earlier talking about how a solid economy is going to help the republican party. that seems to be the key messaging right now. at the same time you get these youation numbers and realize wages are getting eroded. people are having to pay more, so are they really going to feel the boost in the economy? carl: great question, and
certainly relevant as we head into the midterms. if you look at what households , householdsing are in a very good spot at the moment. they are not necessarily optimistic about the future, but the assessment of present conditions is very high, and typically when those assessments are at levels like this, it does favor the incumbents, regardless of party. i don't think that this inflation sentiment really is factoring into their overall assessment at this point in time. that could change, but not at the moment. shery: what about the corporate in cpr --for reasons you got? carl: thiscarl: resulted from it rounding up 2%. i suspect this is the high water mark. my team's it is that we are reaching a midyear inflation plateau, whether it is 2.3 or
2.4% is not necessarily material. as we look at the shorter rates of change like the annualized rate of change can we see it rolling over. whether we look at the headline or the court, that tells us we are going to see some inflation moderation in the back half of the room especially if we don't see more pronounced wage pressures. kevin: we hear all the time about how political uncertainty is the result of trade negotiations and impacting u.s. businesses. have you noticed anything in the hard data from how the political uncertainty is starting to influence the numbers? carl: sure, we are hearing from fed policymakers about concerns from business contacts and we are seeing it in sentiment data. we are not yet seeing a material hardt in what you call the economic data. the non-sentiment data, the actual measure of orders and shipments and those types of flows. it is possible that maybe it is
too soon to see that. i suspect that as dramatic as all of these stories sound, when we calculate the price tag and factor that into a $20 trillion economy, it is not that big, at least not yet. shery: carl riccadonna, thanks so much for that. bloomberg economics. let's turn to another trial happening right now. prosecutors are expected to wrap up their case against paul manafort president trump's one-time campaign manager, after nine days of testimony with more than 20 witnesses including man-of-war's longtime -- manafort's longtime deputy rick gates. he is in court for tax fraud charges. it's welcome -- let's welcome former u.s. attorney guy lewis. where does it go from here? they have taken a 20-minute unexpected recess. what is next? guy: something very dramatic is
ining on right now federal court, as you say. they have taken a short recess, which is very unusual for this judge. as we've seen over the past couple of weeks, the past nine days certainly, he has indicated over and over, let's go, move it , speak up, speed up, speak up. well, yesterday, late in the afternoon, the government, mueller's team, filed a motion that said, look judge, you messed up again full to you told the jury something that is not true. it is detrimental to the government. we want you to clear up something you said, which was, hey, let's move on to a bank fraud count that was -- actually resulted in a bank loan. the government doesn't like it. they didn'thery, like a few days ago when the judge admonished one of the prosecutors. they've taken a break. very unusual.
i'm anxious to see what has transpired in is going to transpire after the break. kevin: i think the word "unusual" is the best word for this entire thing, and i don't the weeknd underscore that enough. this don't think we can underscore that enough. think we can don't underscore that enough. but i have this question, which is for folks who are watching, and representing foreign governments as mr. manafort was and not disclosing it as he is accused with something known as the foreign agents registration act. that is so crucially important. y, toestion to you, gu think that this case will set a precedent in the coming election cycles as well as other disclosure incidents for when a bank or big business hires a lobbyist or foreign government that they will now properly disclose to whom they are working for? boy, great question,
kevin. you better believe that the phone lines are heating up between the lobbyists in washington and their lawyers. look, the truth is that the government has not been super aggressive in enforcing this particular law. there is only a handful of these kinds of prosecutions that are out there. andin terms of this case even putting aside all the politics, all these lobbyists who are doing work for foreign governments, foreign entities, that are walking into congress day in and day out, you better believe that they are calling their lawyers and meeting with their lawyers and saying, hey, make sure all our t's are crossed and i's are dotted. shery: this week the star witness for the government was rick gates. he was the star witness. the defense has been trying to undermine his credibility. how successful do you think they have been?
guy: shery, it is so interesting to watch this. the government put on four days document after document, witness after witness, accountants, everything that corroborates gates, because they knew that the defense was going to rip him apart. they are going to prove up and down the line that he has lied, has misled, he has got a motive. and they put him on the stand, and all that happened. and now they are trying to corroborate gates a little more. i'm not so sure that the entire , but youes on gates better believe the defense is going to get out there and argue that this case is not really about matt forte, it is about -- not about manafort, it is not the case. shery: thank you so much for that, guy lewis. we have plenty more coming up. this is bloomberg. ♪
shery: this is "bloomberg markets: balance of power." i am shery ahn. kevin: i am kevin cirilli. shery: tariffs weighing on the stock of the hour. microchip technology falling. should shares fall back to the level microchip would be on course for its first gain in 18 years. here with more. they had a strong quarter, but that is not helping. emma: it was a forecast error that have a number of investors concerned. they had excess inventory. it shows inventory turnover slowing to a record low. you can see the inventory get the mic for you -- [laughter] emma: they also worried about
the impact of tariffs. there's a tariff talk that made companies nervous. let me bring you into the aerminal to look at the f function for microchip technology. the biggest revenue source, the green bar asia, full of by europe and the americas. shery: thank you for that. bloomberg business politics.com o -- bloombergpolitics.com or bloomberg.com/politics. charts, tved our is your function. this is bloomberg. ♪
jonathan: [inaudible] from new york city for our viewers worldwide, i'm jonathan ferro with 30 minutes dedicated to fixed income. this is "bloomberg real yield." coming up, turkey edging towards financial met one. -- meltdown. sanctions begin to rival trade tariffs for the biggest risk in emerging markets. treasury markets rallying, sucking up a record-breaking week. we begin with a big issue, a meltdown in turkey. longer about policy, it is about credibility. the central as