Profiting from the Crisis The Money Traders of Istanbul's Grand Bazaar

Istanbul's "pushcart stock market," located inside its legendary and labyrithian Grand Bazaar, has been the site of currency trading for hundreds of years. Its traders don't wear suits or ties, but they have proven adept at sensing the global economic climate.

Currency trader Osman Ataç: On Instanbul's "pushcart stock market," foreign currencies have names like the "noodle," "chocolate" or a "whole one."
Agata Skowronek

Currency trader Osman Ataç: On Instanbul's "pushcart stock market," foreign currencies have names like the "noodle," "chocolate" or a "whole one."

By in Istanbul

Osman Ataç, 48, a short and stocky man, isn't one for suits and ties. He prefers wearing a leather jacket, a sailor's sweater and a wool cap -- and certainly no shiny shoes. "Let those prigs from the trading floor wear what they want to," he says, clicking his tongue dismissively, "they don't stand outside all day."

It is early in the morning, and Ataç and 40 other men, all wearing warm clothing, have assembled in Gold Sellers' Alley on the eastern edge of Istanbul's Grand Bazaar, just behind the Swordmakers' Gate. The alley in the city's legendary marketplace is hardly more than two meters (about six feet) wide, dark and doesn't exactly inspire confidence. Some tourists start walking faster as they approach it.

But the men, in their dirty jackets, crowd into the alley as if liquid gold were dripping from its walls. They slap each other on the back and whip out their mobile phones, sometimes more than one at a time. In a few minutes, when their workday begins, they will be shouting into their phones, and the alley will be filled with a jumble of word fragments that only they can understand.

Ataç and his colleagues are foreign currency traders. They are members of a secretive community that calls itself a "pushcart stock market." The name stems from a different era. Because trading in foreign currencies was banned in Turkey until the 1980s, the money traders met illegally on the street. Whenever the police approached, they would flee into the labyrinths of the bazaar.

'Quarters,' 'Noodles' and 'Chocolate'

The code words for foreign currencies that they shout at each other also stem from that underground era. German marks used to be called "quarters," Italian liras were "noodles," dollars are still called "whole ones" today, while Swiss francs are known as "chocolate." In 2002, the traders came up with a nickname for the euro, which was still weak at the time: "Yumos," or "wimp." Foreign currency trading had already been legalized by that time.

"We are free people today," says Ataç, "and we love our freedom. That's why we still stand outside here, under the open sky."

And what place could be more appropriate for their pursuits than Istanbul's Grand Bazaar, which has survived earthquakes, fires, wars and dictators? Since Sultan Mehmet II erected a market hall on the Golden Horn to stimulate the economy in the conquered city of Constantinople, merchants here have bargained with Venetian ducats, Ottoman sultani and British pounds.

Nowadays, the average daily trading volume on the pushcart stock market amounts to $25 million (€18 million), says Ataç. He and the other traders work for exchange offices, which in turn trade on behalf of banks and companies. In their inconspicuous alley, the men buy and sell Turkish lira, dollars and euros, as well as Arab and Asian currencies. Although the Turkish central bank intervenes when there are large rate fluctuations, these open-air currency traders are the ones who normally set the prices for foreign currencies.

'We Have a Sense for Crises'

The men, in their parkas and leather jackets, are proud of the fact that their trade functions without high-tech and neckties. "We have a sense for crises. Anyone who wants to know how the economy is doing should ask us," says Ataç.

Ataç, a trained auto mechanic, has worked as a foreign currency trader for more than 20 years, although he would have preferred to become a professional billiards player. He has won prizes playing billiards, and once he almost qualified for the world championship. Hence his nickname, "Billiards Osman."

When asked how the Turkish economy is faring, Ataç responds, "We expect a slight rise in interest rates. The Turks will consume more cautiously again. But the markets are stable. For now."

It was during the major financial crisis of 2001 that the foreign currency traders at the Grand Bazaar earned a reputation for having a good nose for the state of the economy. At the time, corruption and political instability prompted investors to pull billions of dollars out of the country overnight. The economy collapsed, prices exploded and the lira plummeted. Those who could, fled into the dollar or German mark. "Hundreds of millions changed hands," says Ataç.

The country recovered after reaching an agreement with the International Monetary Fund (IMF). A financial services authority was established and the Turkish banking sector remained robust, or at least sufficiently robust to survive the shock waves of the most recent financial crisis. But Billiards Osman refuses to rule out anything. Besides, new turbulence would only benefit his exchange.

No Written Contracts or Laws

Everything is more or less above-board in Istanbul's Gold Sellers' Alley. Ataç and his fellow traders are no hustlers of the Madoff or Blankfein ilk. "Nevertheless, they do profit from the crisis," says Mehmet Ali Yildirimtürk, who owns a small jewelry shop nearby. An elderly man in a double-breasted suit, he has written a book about "our little Wall Street," in which he affectionately sketches the history of the centuries-old currency exchange and its denizens, with their inimitable soft spot for money.

"The pushcart stock market is very old-fashioned," says Yildirimtürk. "No one there needs a license, and there are no written contracts or laws. The traders have to trust each other, and that's their most important asset. Where else do you find something like that today?"

The shouts of the traders, which penetrate through the cracks in the walls of his shop, don't seem to bother the old man. The voice of Billiards Osman is part of the din. "Seven whole ones for tomorrow," he has just called out into the alley. Translation: $70,000. Ataç doesn't want to reveal who purchased the dollars from him, and at what price. That much professional secrecy needs to be preserved, he says.

Translated from the German by Christopher Sultan

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