Turkish snap election, June 2018

[jaichind]

I assume AKP will run in an alliance with MHP.  If so as long as İYİ  cannot run I cannot see how AKP-MHP does not get a majority.  Both CHP and HDP have their caps in terms of support.

[jaichind]

TRY did go up 2% on the news of snap election.  It seems market expects a AKP victory which will consolidate Erdogan's power for several years.

[jaichind]

According to The Guardian, tomorrow opposition parties will announce that they join forces for June's elections.
Will this make a difference at all (eg, Hungarian elections)?

When they say opposition parties I assume they mean CHP İYİ and HDP.  Not sure this is that relevant.  It seems to beat AKP it is key that CHP İYİ and HDP all cross 10% in the parliamentary vote.  It seems all three are in a position to do that with the exception of HDP.  So I guess a CHP-İYİ-HDP joint list could ensure that.  Not sure these 3 parties base would accept this. 

Of course this could be about the Prez election.  It seems likely that it is unlikely Erdoğan would lose but a opposition goal is to force a second round.  If so a joint candidate makes it more likely that Erdoğan would win on the first round due to defections when every party running their own candidate would give a fair chance to assess which opposition candidate is actually the most popular.

[jaichind]

Turkey Heads Toward a Currency Crisis as Lira Goes Into Freefall

https://www.bloomberg.com/news/articles/2018-05-23/turkey-heads-toward-a-currency-crisis-as-lira-goes-into-freefall

The Central bank refuses to raise rates fearing that it would hurt the economy before the election but might have no choice to head off a major crisis which would dramatically increase the debt burden of Turkish companies. 

[jaichind]

Turkey central bank did an emergency rate hike which stemmed the TRY rout .  Most likely will not last long with US Fed more likely to raise rates in the future.  Another big reason is the market has pretty much priced in an Erdogan victory both in Pres and Legislative elections which implies more policy uncertainty with an  Erdogan bias toward  lower interest rates.

[jaichind]

Bloomberg sponsored a poll which has Erdoğan-AKP in a strong position

https://www.bloomberg.com/news/articles/2018-06-13/erdogan-fights-to-keep-power-as-bloomberg-poll-shows-tight-votes?utm_content=business&utm_campaign=socialflow-organic&cmpid=socialflow-twitter-business&utm_source=twitter&utm_medium=social

Prez
Erdoğan    50.8%
İnce          30.1%
Demirtaş   10.5%
Akşener      8.0%

Looks like Akşener dropped a lot during the campaign.

Parliament
AKP         46.0%
CHP         27.5%
HDP         11.7%
İYİ            9.0%
MHP          4.8% (in alliance with AKP)

Looks like AKP-MHP in a strong position to get a solid majority with HDP and İYİ at risk of falling below 10% threshold.  The new election law that allows alliances was built to help MHP which is unlikely to cross 10% but now will get seats since it will be on a join AKP-MHP list.

[jaichind]

I think a major risk to Erdoğan-AKP would be the AKP alliance with MHP would turn off Kurdish voters.  If Erdoğan-AKP have an below average election night this factor could make the difference between victory and defeat for Erdoğan-AKP.

[jaichind]

Aren't İYİ and the Felicity Party in an alliance with the CHP, so that they would benefit from the new law as well, in the same way the MHP would?

In any case case İnce seems to be a strong candidate who can attract many voters, mainly from İYİ of course.

Good point.  I forgot about that.  So no risk of İYİ falling below 10%.  So the party at risk is really HDP.  It seems the opposition alliance is CHP-İYİ-SP-DP with the later two having a fairly small voting base. 

[jaichind]

In many ways Erdoğan calling an early election is a genius move.  There are all sorts of economic storm clouds on the horizon but currently the labor market is still robust.  But it is clear when the Turkey central bank raised interest rates from 8% to 13.6% earlier this month that 2019 will see a very significant economic slowdown.  And that is not all as TRY started falling again this week which means more action might be needed.  So to have the election in late 2019 would be a disaster for Erdoğan and AKP given the likely economic circumstances.  A early election avoids this problem while the average voter are still experiencing a fairly positive economic environment. 

[jaichind]

In many ways Erdoğan calling an early election is a genius move.  There are all sorts of economic storm clouds on the horizon but currently the labor market is still robust.  But it is clear when the Turkey central bank raised interest rates from 8% to 13.6% earlier this month that 2019 will see a very significant economic slowdown.  And that is not all as TRY started falling again this week which means more action might be needed.  So to have the election in late 2019 would be a disaster for Erdoğan and AKP given the likely economic circumstances.  A early election avoids this problem while the average voter are still experiencing a fairly positive economic environment. 

Despite all of this, there could still be some kind of Erdogan-fatigue right now - which is strong enough this time to keep him below 50% in a runoff. A bit unlikely, but not totally out of question.

Anyway, I'd applaud the Turkish voters if they have the balls to vote him out.

Totally true.  I agree that whereas a couple of months ago it seemed  Erdoğan was going to win for show I can now see how he can lose.   My point is that no matter what he will do better in June 2018 vs Nov 2019 when the economic situation will be for sure a lot worse than today.

[jaichind]

Erdogan is promising to push down interest rates if he is re-elected which has sent TRY falling last few days.  Erdogan is also promising to end the state of emergency if he wins.  All this seems to indicate that his campaign is in trouble and that some sort of setback  6/24 is possible even likely. When an incumbent says "re-elected me and I will do X" it is usually a sign of desperation because "if X is so great why not do it now?"

[jaichind]

https://ahvalnews.com/2018-elections/turkish-electoral-authorities-remove-key-vote-security-measure

YSK permits unstamped ballots just days before the first round of elections.

I think they did that for the 2017 referendum vote as well.

[jaichind]

Another thing that is different about this year's election is that Erdogan has rewritten the rules to allow authorities to appoint government officials to run polling stations or relocate them on security grounds and  let law-enforcement officials monitor voting.  This plus the counting of unverified, unstamped ballots from 2017 gives  Erdogan an extra advantage at the vote casting and counting level.   Erdogan said those changes are necessary to secure the vote in Turkey’s southeast from the influence of Kurdish separatists.

[jaichind]

It will be pretty interesting to see his vote in the region with thse thing. I suspect that even Erdogan isn't shameless enough to that Turkish Kurdistan will deliver a majority to him. Because in my experience the Kurds I deal with daily have gone from being neutral to positive toward him to hating him with the fury of a thousand suns.

I think AKP is mostly written off the Kurdish vote, especially with MHP as an ally.  AKP can still get to a majority even if HDP sweeps all the Kurdish region seats but it will depend on a bunch of things going right for AKP-MHP.  Of course there is an outside chance that HDP falls below 10% and then AKP will sweep all the Kurdish region seats.

[jaichind]

The TRY implied vol reaches the highest levels since 2008 which means the market expects Erdogan to win on the first round but if he does not the the chances of Erdogan losing is much higher than what the market currently expects.  So the market expected distribution of outcomes is bimodel ergo a very high TRY implied vol.

[jaichind]

There is no official word on turnout but when Erdogan voted around 2pm he said that turnout seems high and had already reached 50%.

[jaichind]

My feeling is eerily similar to before the last Israeli election, when we though there was hope and Bibi won decisively. I hope it won't be the same here- if Erdogan is somehow defeated in the end, it'll be an amazing day.

On the other hand its almost like seeing Malaysia 2018 on repeat - at least pre-election. All the ground hope and 'gut knowledge' seemed to be with the opposition, but practical statistics pointed to a close BN win. The main difference I feel is the Erdogan has many more authoritarian tools at his disposal then Najib did, so its even easier to see him winning.

You might be right.  But a key person in the Malaysia upset, PKR de facto leader Anwar, hopes that is not true as he has endorsed Erdogan as ""the most popular leader among Muslims of Malaysia and outside Malaysia because of his position on Palestine and on what happened to the Middle East."   Until yesterday he was in Turkey to show his support for Erdogan.

[jaichind]

Sabah TV is still doing this party 1 party 2 .... Candidate 1 candidate 2 candidate 3 ... business.

[jaichind]

The count tends to have an early bias toward Erdogan/AKP.  So when earlier results comes out and Erdogan/AKP does not have large lead then they are in clear trouble.

[jaichind]

The count tends to have an early bias toward Erdogan/AKP.  So when earlier results comes out and Erdogan/AKP does not have large lead then they are in clear trouble.

I assume this is because rural areas come in first.

Correct

[jaichind]

What a ballot looks like



It shows the party alliances fairly clearly

[jaichind]

So they have a full 4 hours to rig the results before anyone can have a look at them. Wonderful.

They have embargo every election and results starts coming out in less than an hour every time ..

[jaichind]

Interesting ballot pictures, jaichind ... a bullet for Demirtas and the Kurds.

I found it in tweet somewhere.  No idea what the context was ... it seems it is either pro- or anti- HDP

[jaichind]

CNN Turk quotes  Erdogan "It is too early to say something, We are good"

[jaichind]

This picture is making its rounds on twitter.  Shows ballots for HDP thrown in the garbage ..