Investors are betting political turmoil will weaken Turkey’s lira more than any other currency as the arrest of more than 40 army officers over an alleged coup plot raises tension between the government and the military. Turkey’s stocks, bonds and currency slumped this week as the detention of serving and retired officers reignited clashes between the government and an army that has ousted four governments since 1960. The selloff reversed a trend in which its stocks and bonds outperformed every European market during the height of the global credit crisis.
The global recession was made in America. The recovery is being made in Asia. China led the way, demonstrating that one advantage of an authoritarian government is that it can inject massive doses of stimulus quickly and order banks to lend. Among Asian economies, those more tightly linked to China—such as Taiwan, Malaysia, Singapore—have been growing fastest. But Asian consumers are doing their part, too.