Economy (5)

"Textiles, apparel, gold, marble and steel are the leading export goods from Turkey into the U.S. Key members of these industries told Turk of America about the competitive environment. Where does the Turkish-American trade stand today, and what are our competitors doing?"

Turkish-American Logistics Company Executives in the U.S.: The Distress Persists

The Turkish-American logistics companies that provide services in the U.S. explained to Bloomberg HT Journalist AliCinar the problems experienced in the supply chain that began with the COVID-19 pandemic and continue to this day. Executives stressed that logistics costs are at an all-time high and are guessing that the distress in the sector will continue.

"We are at the top of logistic costs."

Barsan Global Logistics CEO Uğur Aksu stated that one of the reasons for the downward trend in retail figures is the lockdown in China. Aksu expressed that supply was higher than demand due to trouble accumulating goods, loadings, and services.

Aksu stated that demand has decreased in many retail consumptions—especially in food, construction, and house decoration—emphasizing that despite the low demand, shipowners are keeping the prices high. Aksu said another 2008 crisis was not expected and added, "The logistic costs are at an all-time high, but we expect a downward trend."

Aksu stated that companies' portfolios are strong and that he does not expect a massive economic recession in the U.S. economy. Aksu expressed that FED raised interest rates to decrease the demand by startling the market. Aksu said it would be a big mistake if the Biden administration removed Chinese tariffs on certain products, saying: "This situation will make China much stronger."

Having said that quotas applied to China in Trump's term of office worked for Turkey and particularly Vietnam, Aksu asserted that even if tariffs for China were removed, the consumer product prices quoted by China for the U.S. would not change.


"The distress in the sector may continue."

Behçet Tuysuzoğlu, the CEO of Mega Shipping and Forwarding, said that with the pandemic, there had been a severe change in the balance of supply and demand. Tuysuzoğlu expressed that the transportation sector was not ready for supply and demand. Tuysuzoğlu mentioned that some ships from the ports, like Los Angeles and Savannah, are still offshore, highlighting that more ships are coming to New York, but ports on the east coast cannot handle the big ships.

Stating that he does not believe the trouble in the logistics sector will end neither this year nor the following year, he said that he believes President Biden's signing of the Ocean Shipping Reform Act this month will have even a positive contribution to the sector and prefabricated storehouses behind the ports may be a temporary solution. Tuysuzoğlu said, "The Biden administration lowering the tariffs on some Chinese products will implicitly affect us as well."

There are approximately 50 Turkish-owned logistics companies In the U.S., 

MicroStrategy CEO Saylor: Of the tokens, 99% will fail, excluding Bitcoin.

Bloomberg HT Journalist Ali Cinar interviewed Michael Saylor, the CEO of Microstrategy. Saylor said that he thinks Bitcoin will survive, unlike most other digital assets.

CEO of Microstrategy Michael Saylor evaluated the decline in cryptocurrencies and the future of digital assets to Bloomberg HT. Having stated that, he thinks Bitcoin will survive. Still, most of the remaining assets will not be able to survive. Saylor also said, "There are almost 20 thousand cryptocurrencies other than Bitcoin. The failure rate for tokens, except for Bitcoin, will be 99%."

"Bitcoin is a truly well-engineered decentralized asset, so it will survive," he said. Saylor also emphasized that regulations are required for the cryptocurrency stock exchange, saying, "There is extreme leverage, and with these regulations, they will be further reduced. Besides, it is important for regulators to provide crypto education."

"If you would like to hedge yourself weekly or monthly against inflation monthly or weekly, I have to say that it does not have a safe port strategy in the short term. A thing to do would be to develop a long-lasting strategy. You need to have a strategy that covers four years or more. As for a long-term strategy, different instruments in the basket is a requirement," he added.

Regarding the long-term performance of Bitcoin, Saylor made the following remark: "Considering the periods of two, four or eight years, we can state that Bitcoin has a five to ten times better performance compared to the other alternatives. It showed a better performance than Nasdaq shares, real estate or gold."

Saylor also touched on the regulations issue, commenting, "Bitcoin is actually one of the digital commodities. All of the other 20 thousand cryptocurrency assets are securities. Everything must be explained in these assets as in the other listed companies." They refuse to do this, and problems occur at this point. More transparency will be in question in the next few years because the regulatory authorities have started to work more actively. There is such a transformation, but there are also lots of uncertainties within this transformation. This means if you buy cryptocurrency other than Bitcoin, you take a huge risk.

Asserting that Bitcoin is the best of all digital commodities, Saylor stated that the strategy of Microstrategy is to retain Bitcoin for the long term (longer than ten years). Emphasizing that Microstrategy is already a very profitable company, Saylor also said, "We declared that we bought Bitcoin for an amount of 10 million dollars. We also did this at very different times when we had cash. We are not trying to buy at the bottom and sell at the top. "If you focus on which days will be good or bad, you will fail 98 percent of the time."

Is the U.S. Headed for a Recession?

With inflation rising to 8.6% and 6 million Americans unemployed, the debate about a possible economic recession has begun in the United States of America. Democrat members of Congress voiced support for the decision of the Fed to hike interest rates by 75 base points, whereas the Republicans said that the Fed should have hiked rates sooner.

Fed chair Jerome Powell said inflation data would be the decisive factor in determining the percentage of further rate hikes in the coming policy meetings. President Biden announced that his first economic priority was to "combat inflation." Secretary of the Treasury Yellen acknowledged the possibility of recession.

The Biden administration reiterated that inflation has been increasing globally due to the pandemic, Russia's invasion of Ukraine, and global supply chain problems. The Fed had to revise its growth, unemployment, and inflation forecasts.

Powell Will Testify Before Congress

Fed Chair Powell will testify in the open session of the House of Representatives and the Senate's twice-a-year monetary policy session on June 22–23.

President Biden will head over to Germany for the G7 summit on June 25, while Secretary of Energy Jennifer Granholm is expected to meet with the executives of seven oil companies this week.

In an interview given to the Associated Press, Presiden Biden acknowledged that public morale is low because of the pandemic, the current economic situation, and the increasing gas prices that strain the wallets. However, he emphasized that a recession is not inevitable and was optimistic about the country's future. Biden also underlined, "If you want a direct barometer of what people are going to talk about at the kitchen table and the dining room table and whether things are going well, it's the cost of food and the cost of gasoline. At the pump."

Headlines from U.S. Media:

Wall Street Journal: Recession Probability Soars as Inflation Worsens

NY Times; Inflation Expected to Remain High Even as Economy Slows and Layoffs Rise

Washington Post: A recession may be looming. Here's what to do.

Yahoo Finance; Deutsche Bank now expects 'an earlier and somewhat more severe recession'

CNBC: The recession will hit in the first half of 2023 and the Dow is headed lower: CNBC CFO survey

Future of Cryptocurrency

Turk of America Journalist Ali Cinar interview Perianne Boring ,President and Jackie Price, CMO at Chamber of Digital Commerce. They have shared positive messages for the digital currency market.

-What does the future for Cryptocurrency?

Digital assets and cryptocurrencies are going to play a critical role in the financial system for generations to come. Already we see more and more companies like MicroStrategy, MassMutual, Tesla and others adding these assets to their balance sheets and payment platforms like PayPal, Square and MasterCard entering the market. We are still in early days, but the adoption and expansion of cryptocurrencies and digital assets is going to continue. Millennials and Gen Z citizens around the world are particularly eager to invest in and use digital assets, partly because they appreciate the speed and efficiency and because they are the digital-native generations that are well suited for these platforms.

-Do you think that Speculation Isn't the Sole Driver of Bitcoin Prices? Especially, are Elon Musk statements healthy for the market ?

Bitcoin has emerged as its own asset class and the case for bitcoin as a true store-of-value has been made. Much of the current buying demand is from corporate and institutional investors that are looking to diversify their portfolios into uncorrelated assets. The macroeconomic landscape where the war on COVID has turned into the war on currencies has left many investors looking to hedge against the hidden tax on inflation from expansionary monetary policies.

-What would be the expectation regarding digital currencies (bitcoin) from Biden Admin?

There are many things to consider and numerous discussions among policymakers, regulators and the industry right now that are important steps toward a clear, transparent, and growth-oriented framework for innovation in the industry. The Chamber of Digital Commerce is working with Congress and the Biden administration to accelerate the adoption of a National Plan of Action for Blockchain and Digital Assets, which is urgently needed to maintain a U.S. leadership position during this transformative moment on global financial history.

***Ali Cinar's interviews were published on CNNTurk and Milliyet Newspaper.

President-Elect Biden: A First-Class Economic Team

At Biden-Harris  transition headquarters in Wilmington, Delaware, President-Elect Joe Biden  introduced his new economic team as he called  "a 'First-Class' team who will bring America out of the financial crisis.

In his speech, Biden renewed his call to Congress to immediately pass the coronavirus economic aid package and stated that any potential aid package to be passed before January, when he takes over the Presidency, would only be the beginning. Biden added that his team had started working on the Coronavirus aid package and that the package would be announced immediately after he takes office.

"No one is more qualified than Yellen."

Biden officially announced Janet Yellen, the former President of the Federal Reserve (FED), as his nominee as the Secretary of Treasury. Yellen will be the first woman to take this role if she is approved by the Senate. Biden said, "No one is more qualified to deal with this crisis than Yellen."

Biden announced that he would be appointing Neera Tanden, the President of the Center for American Progress, a center for political and public research, as the head of the White House Office of Management and Budget. Tanden will be the first American woman of South Asian descent to take this role. 

When talking about Tanden, Biden said, "She understands the struggles that Americans are facing."

Biden picks Wally Adeyemo as Deputy Secretary of Treasury. Adeyemo will be the African American who has been given the highest role at the Treasury to date.

Biden has announced Cecilia Rouse, the Dean of the Princeton University School of Public and International Affairs, as the Economic Advisor to the White House. Rouse will be the fourth woman, but the first black American, to take this role.

Biden also officially announced that Jared Bernstein and Heather Boushey would be among the names on the economic council.

Biden said that he hoped his candidates would be approved swiftly by the Senate.

Yellen calls for swift action.

On the other hand, Yellen, who has been announced as the Secretary of Treasury by Biden, said, "We are experiencing a historic crisis due to the pandemic and the economic consequences it has brought with it." She underlined that the pandemic had affected the poorest in a disproportional manner and essential to take urgent action. She stated that it was of critical importance that economic recovery includes everyone.

Mitch McConnell, the leader of the Republicans in the Senate, has proposed that the new economic aid package be merged with the budget proposal.

McConnell, who announced to the press after having discussions with Republican senators, stated that he had held talks with the White House and shared the summary of a proposal, which would be acceptable to President Donald Trump, with Republican senators.

However, according to a Republican source from the Senate, the said proposal is very close to one that McConnell has been talking about for months and rejected by the Democrats. According to a document obtained by Reuters, the said plan foresees the setting aside of 332.7 billion dollars for small businesses, in the form of loans or grants.

Treasury Secretary Steven Mnuchin and Nancy Pelosi, the Speaker of the House of Representatives, had met on Tuesday to discuss the matter.


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