World markets seem they don’t like at all what they see what’s going on in and with Turkey.

Turkey’s worsening currency crisis, once again, caused investors to dump equities and emerging markets assets and seek safety in government bonds and the dollar.

Overnight, the Turkish lira made a new record low of 7.24 per dollar while the yield on the Turkish 10-year bond reached a new record high of more than 23 percent and is still rising.

The Turkish lire has in the meantime somewhat eased and is at this moment at 6:00 a.m. NYT trading around 7.02 TRY per dollar while there is no relief whatsoever for the Turkish bonds.

It is evident that as long Turkey doesn’t let (yes, there is indirect government involvement) the National Bank raise its interest rates in a really substantially manner, which, by the way, opposes the Turkish President vehemently, there will be no relief in sight and the real risks of a Turkish contagion will spread further.

It’s clear that the promise made by the Turkish Central Bank to provide liquidity and cut lira and foreign currency reserve requirements for Turkish banks didn’t help at all, at least certainly not for the moment.

Besides all that, President Trump’s latest move against Turkey on Friday with doubling tariffs on Turkish steel and aluminum will cause further damage to the Turkish economy.

President Erdogan published on Friday an enlightening op-ed in the New York Times under the title “How Turkey Sees the Crisis With the U.S.”

Herein he states among other things: “… In recent weeks, the United States has taken a series of steps to escalate tensions with Turkey, citing the arrest by the Turkish police of an American citizen, Andrew Brunson, on charges of aiding a terrorist organization. Instead of respecting the judicial process …  Turkey does not respond to threats, we retaliated by sanctioning multiple American officials … Washington must give up the misguided notion that our relationship can be asymmetrical and come to terms with the fact that Turkey has alternatives. Failure to reverse this trend of unilateralism and disrespect will require us to start looking for new friends and allies.”

It could be that President Erdogan may have overestimated his personal value in President Trump’s eyes.

It’s also a fact that relations between the U.S. and Turkey have been deteriorating for years with finally beginning to spiral downward in recent weeks because of Turkey’s detention of a Christian evangelical pastor, Andrew Brunson, who’s facing espionage and terrorism allegations related to the failed 2016 coup.

The whole event of the Turkish crisis is and remains a very serious event.

When one looks at it, especially when one looks at the charts, there is no risk of making an overstatement saying that it’s worse than the Lehman crisis in 1998, which also implies a serious risk of contamination, which includes of course many emerging markets, but not all.

For example, as the Turkish lira melts down, the costs to trade the currency have soared. The bid-ask spread, or the difference between the price dealers are willing to buy and sell the lira at, has widened beyond the gap seen at the depth of the global financial crisis in 2008, following Lehman Brothers’ collapse. Although it hasn’t quite reached the 2015 records.

And last but not least, the poor liquidity points to a dysfunctional market.

So, how that all could play out in the end, it’s still too early to tell.

In the meantime, for investors I think it’s better to stay away from Turkish assets and certainly from the Turkish lira (TRY) until the storm has passed over.

Related to the Turkish further developing situation, I personally would try to keep in mind what Baron Rothschild, an 18th century British nobleman and member of the Rothschild banking family said: “the time to buy is when there's blood in the streets.”

For the rest, there are no important events scheduled for today.

Etienne "Hans" Parisis is a bank economist who has advised investors on financial markets and international investments.