Expand chart
Data: FactSet; Chart: Andrew Witherspoon/Axios

The two major market horror stories in 2018 were Turkey and Argentina, with both economies sputtering toward recession and on the verge of currency crises.

The big picture: The two countries' policies to address the crises have played out like a strip from Goofus and Gallant, except that Goofus has emphatically triumphed.

Background: Investors have long urged countries to fight economic instability and currency falls by increasing interest rates, assuring central bank independence and relying on the IMF and international organizations for goodwill loans.

On one side: On Aug. 29, Argentina as Gallant asked the IMF to speed up payments of the $50 billion bailout package it had agreed to with the country. On the same day, its central bank, led by technocrat Nicolas Dujovne, raised benchmark interest rates to a stupefying 60%. (Interest rates had been as low as 22.75% just 4 months earlier.)

  • The Argentine peso fell that day to nearly 40 pesos per dollar, its lowest level on record and has not bounced back.

On the other side: Turkey as Goofus has defied economic experts and raised its interest rates only once since the lira fell to the weakest level in its history. The country hiked rates 6.25% to bring its policy rate to 24%.

The results: The lira has strengthened more than 20% from its Aug. 28 level. Argentina's peso has fallen more than 15%.

  • Turkey's annual inflation rate also has fallen, topping out in October at 25%, while Argentina's climbed to 47% in December.

The bottom line: "I'm puzzled because I don’t think anything has really changed in Turkey," Win Thin, head of global currency strategy at Brown Brothers Harriman, tells Axios. "Part of it I think is just that quest for yield, though I'm not sure why people would pick Turkey over Argentina. It's frustrating if you're following fundamentals."

Go deeper: The meltdown of emerging market currencies

Go deeper

1 hour ago - Health

Ex-FDA head: U.S. will "definitely" see 200,000 to 300,000 virus deaths in 2020

Former FDA commissioner Scott Gottlieb said on CBS News' "Face the Nation" that the coronavirus death toll in the U.S. will be "definitely" somewhere between 200,000 and 300,000 by the end of 2020.

Why it matters: "Whether we're closer to 200,000 or closer to 300,000 depends on what we do now and how it evolves," Gottlieb warned on Sunday as the U.S. surpassed five million confirmed coronavirus cases.

Mnuchin says Trump executive orders were cleared by Justice Department

Treasury Secretary Steven Mnuchin insisted on "Fox News Sunday" that President Trump's executive orders on coronavirus aid were cleared by the Justice Department's Office of Legal Counsel, and said that Democrats are going to "have a lot of explaining to do" if they choose to challenge them in court.

Why it matters: Democrats and even some Republicans have criticized Trump's decision to circumvent Congress to extend unemployment benefits as executive overreach, given that the Constitution gives Congress power to appropriate spending.

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 11 a.m. ET: 19,680,042 — Total deaths: 727,777 — Total recoveries — 11,962,565Map.
  2. U.S.: Total confirmed cases as of 11 a.m. ET: 5,002,523 — Total deaths: 162,455 — Total recoveries: 1,643,118 — Total tests: 61,080,587Map.
  3. Politics: Nancy Pelosi says states don't have the funds to comply with Trump's executive order on employment — Trump adviser Larry Kudlow says he regrets suggesting the benefits could only be extended by Congress.
  4. Public health: Fauci says chances are "not great" that COVID-19 vaccine will be 98% effective — Poll: 1 in 3 Americans would decline COVID-19 vaccine.
  5. Schools: Nine test positive at Georgia school where photo showing packed hallway went viral — How back-to-school is playing out in the South as coronavirus rages on — Princeton, Johns Hopkins, Howard to hold fall classes online.