Don’t waste too much time on this question. Recep Tayyip Erdogan has not thrown in the towel. This conjuror, this polariser, who has made life in Turkey miserable for so many Turks since 2002—first as PM, then as president, and next as the nearly all-powerful executive president—will be back for another round.

When Erdogan loses an election, he typically appears lost for around a week but subsequently reappears with some new plans.

Erdogan was last seen around noon on June 23 casting his vote in the Istanbul re-run.

After Erdogan’s candidate, ex-PM Binali Yildirim, lost the original Istanbul mayoral election on March 31, the populist authoritarian was not seen for roughly a week, but then, in an airport press conference which he gave while on his way to see Uncle Vladimir Putin he launched the push for an Istanbul re-vote (the election watchdog met his wishes, agreeing there were “irregularities” that invalidated Imamoglu’s shock victory).

On the evening of June 23, following Imamoglu’s astonishing trouncing of Yildirim in the re-run election, Erdogan cancelled his scheduled press call. He was seen around lunchtime casting his vote at a polling station together with Turkey’s first lady and his son-in-law and finance minister Berat Albayrak.

In the wake of this second humiliation, Erdogan tweeted three times.

In the first tweet, he congratulated Imamoglu in very plain fashion, and indirectly said he would not challenge the result this time around.

In the second tweet, Erdogan pledged support to the People’s Alliance made up of his Justice and Development Party (AKP) and the ultra-nationalist Nationalist Movement Party (MHP) led by Devlet Bahceli. He also served a reminder that he was pursuing his 2023 centenary of the republic goals. He indirectly said that his alliance with junior partner MHP still endured and that he still has a mandate to rule Turkey until the scheduled elections four years from now.

In the third tweet, Erdogan pointed to the G20 summit to be held at the end of this month in Osaka, where he aims to head off any threat of US sanctions by shooting the breeze with his big American pal, Donald Trump.

Who's to pay the price for the Istanbul double humiliation?
It seems the bill will be delivered to the AKP’s provincial head in Istanbul.

There are also rumours of a cabinet reshuffle ahead but it will only amount to a relatively meaningless shifting of chairs to deceive foreign investors that real reform is in the pipeline, since under Erdogan ministers in the executive presidential system are mere secretaries.

Even if Erdogan gives Albayrak the heave-ho, he will continue to rule the country based on his revolutionary economy theories.

Turks also want Interior Minister Suleyman Soysuz to be axed. If that happens it could signal that Erdogan is going for a more humanistic rhetoric by eliminating his number one hitman.

Early elections
Analysts should now be pondering when early elections will be called and who will trigger the polls.

Bahceli’s ‘Turkish-type presidential system’ with no prime minister and a diminished parliament, meanwhile, may be threatened.

The division of Erdogan’s party is on the horizon, even if new parties born of the disunity will only help erode Erdogan’s support and clear the way for another Imamoglu wave.

"Under the light of a pair of blue eyes." Imamoglu reminded Kemalists that founder of the Republic Mustafa Kemal Ataturk did not resort to directing rhetorical fury at the manipulations of imperialist-backed Islamists but still managed to gain the support of the Anatolians.

The usual suspect for calling snap polls in Turkey is Bahceli. He has initiated all early elections in the country since 2001.

All Turks, including members of the MHP, always keep an eye on what Bahceli is up to.

No one can understand how Bahceli took over full control of the MHP and, in essential ways, full control of Turkey since the end of the 1990s.

‘Bahcelogs’ currently think that the MHP leader will bide his time for a while and then he will let ruling coalition partner Erdogan sink further into his economic and foreign policy woes.

Erdogan, of course, has the right to call a snap poll himself.

However, ‘Erdoganologs’, think that he might test the waters for getting rid of Bahceli while, at the same time, concluding his deal with the Kurds, whom in jejune fashion he mishandled prior to the Istanbul revote as he sought to shift a substantial Kurdish vote Yildirim’s way.

Getting rid of Bahceli and striking a deal with the Kurds would help Erdogan improve his image in the eyes of the old, but now somewhat detached, allies in the West.

However, Erdogan’s invisible partners in the Turkish state are also exerting influence that is hard to deflect, and they seem determined to keep Erdogan closer to the Russian orbit, even since Erdogan’s manoeuvres that cynics described as something like adding jailed PKK leader Abdullah Ocalan to his coalition (Bahceli’s discomfort at this ‘needs must’ strategy ahead of the revote was a sight to behold).

Erdogan’s alternative option, according to the Erdoganologs, may be to call a snap poll very quickly to get ahead of the AKP’s perilous divisions.

Even if all the main opposition forces again come together tactically, as they did for the March 31 local elections, they do not have the required two-thirds majority in parliament to themselves call early elections.

However, although the opposition currently has the moral advantage and the popular support to push Erdogan to pencil in an early date with the ballot box, initial leaks from CHP officials suggest they aim to wait and let Erdogan sink deeper into the crisis which is all of his making

Yes, this is the CHP. Even if its new generation has won the major municipalities thanks to Erdogan’s consecutive mistakes, this CHP is the same CHP which is so far removed from ordinary people. The party simply waits on Erdogan to hand over the government to it.

All in all, it looks like snap polls will not be called within something like a few days, with all the parties waiting for the recipe to stew.

In the horse racing analogy, Bahceli is always the favourite horse for sparking snap elections, but he dashes into the lead at a time when no one expects it. The odds on Erdogan deciding to go to the people are that much longer.

Geopolitical cliffhanger
On the foreign politics front, Erdogan is contending with a July 31 deadline set by Washington. An ultimatum sent in a letter by the US defence department calls on Turkey to scrap its order for Russian S-400 missile defence units by that date. If Turkey fails to do so, it seems in all probability to be denied F-35 stealth fighter jets, the security of which would be jeopardised by S-400 systems, according to Nato. Sanctions could also be triggered if the missile defence purchase is confirmed. Is Erdogan prepared to pay that price? One supposes that when he meets Trump in Osaka at the G20, he hopes that as two wheeler-dealers, with little regard for established conventions, they can wangle an arrangement.

Erdogan media claim Trump has the right to delay the Countering America’s Adversaries Through Sanctions Act (CAATSA) sanctions for 180 days and that when Trump has no more wiggle rooom, the Turkish president will ask him to levy the least damaging five of the 12 CAATSA sanctions listed by the US Congress.

Economic crunch-time
Turkey’s economy is fundamentally loused up in so many ways, but Erdogan & Co have so far not brought forward anything like a fundamental fix. Instead, they have been pouring in Treasury-backed credit to achieve a few short-term economic spurts to persuade voters to stick with them, first in the local elections, then in the Istanbul revote. As you may have read, it hasn’t worked. And Turkey’s economy is still pretty much screwed, possibly set to experience a double-dip recession.

The economic collapse is, however, the main factor behind Erdogan’s worsening woes, and he won’t want things to deteriorate any further. Thus, it’s possible that finance minister Albayrak could find himself out of the saddle, despite his family connections, as Erdogan tries to signal that he is at last going to take the economic bull by the horns. But there’s no sign of a real bailout plan for the economy in the works. Known as a “bitter recipe” by Turks, who are accustomed to paying the price of the damage wrought by idiot politicians, such a plan would make Erdogan more vulnerable to those sharpening the knives, hoping he meets a wretched end.

Market talk and market drivel

How is it, some observers ask, that despite its truly dire economic state, debt-loaded Turkey stays afloat on the global capital markets? It’s a peculiarity of the Erdogan administration that while it spends so much time scapegoating foreign media for many of its woes, the fact that Turkey manages to breathe relatively freely on those markets is very much down to the international financial press maintaining coverage founded on the erroneous idea that the financial markets in Turkey are functioning normally.

There were reports on June 24, for instance, suggesting a “Turkish assets rally” was upon us because the election uncertainty caused by the revote was now out of the way.

Rally? Turkish assets? The lira gained 1%, the BIST-100 was up 1.5%, eurobonds gained a cent... and this is a rally in Turkish assets? Aren’t these figures rather, and merely, daily volatilities in Turkish assets? That’s not a rally. That’s a spurt. There is nothing there which can yet be seen as sustained.

If you are a trader dealing with thousands of financial instruments, you may jump on such heady headlines. But the reporters behind the articles must be entirely aware that they are talking out of their hat, drawing in some readers, perhaps pointing to a short-term market play profitable for some, but in the end offering nothing more than sensationalism.

The Turkish lira fell from the 5.78s against the USD to the 5.71s and was trading at weaker than 5.80 as of 22:15 local time on June 23.

Fine. But if you are aware that it weakened into the 6.23s in May from the 5.17s seen at the end of January—despite all the manipulative interventions orchestrated by officials, the burning up of central bank reserves, the audacious, but in the end self-defeating, attempt of the Erdogan administration to shut down the offshore lira swap market in London prior to the local elections, and so forth—then you should know full well that the global financial media, day by day, is providing a flawed picture. And that’s putting it politely.

“The rerun of the Istanbul mayoral elections yesterday has lifted major uncertainty, with consequent appreciation of the TRY, and we may observe reactionary buying and a slightly positive opening at the BIST today. Market participants will this week focus on President Erdogan and his US counterpart’s meeting on the sidelines of the G-20 summit,” Seker Invest said on June 24 in its rather more sober daily bulletin.

Seker expects trading on the Borsa Istanbul to remain cautious ahead of that meeting in Japan, with further upturns in the index at times there to be utilised for profit taking. “That said, the world’s leading central banks’ resumption of accommodative monetary policies is expected to reflect positively on the performance of TRY-based assets. Duly, as long as global risk appetite remains elevated, any downturn at the index could also be exploited as a buying opportunity. SUPPORT: 93,600-92,600 - RESISTANCE: 94,400 – 95,400.”

Until Erdogan, Bahceli, the CHP and other key actors make it clear how they’re going to play their new hands, let’s leave it at that.