Turkey Claims US ‘Working On’ Extraditing Muslim Cleric

Turkey’s foreign minister says U.S. President Donald Trump recently assured Turkish President Recep Tayyip Erdogan that Washington is considering extraditing a Muslim cleric that Ankara accuses of orchestrating a failed 2016 military coup.

Turkish Foreign Minister Mevlut Cavusoglu told the U.S. television network CNBC that when Trump and Erdogan recently met at the G-20 summit in Argentina, the American leader said the United States is “working on extraditing” Fethullah Gulen “and other people.”

The 77-year-old Gulen, a one-time ally of Erdogan, has lived in self-imposed exile in the eastern U.S. state of Pennsylvania for nearly two decades, but Washington has resisted Erdogan’s demand he be returned to his homeland to face charges that he directed the coup attempt from across the Atlantic.

In the failed attempt to oust Erdogan, soldiers in tanks and helicopters attacked the Turkish parliament and shot at unarmed civilians.  About 300 people were killed in the fighting, but troops loyal to Erdogan prevailed.

Erdogan subsequently ordered the arrest of thousands of people, including academics, journalists and government workers, that he believed were supportive of the attempted putsch.  In the two years since the aborted coup, 77,000 people have been arrested and more than 160,000 fired from their jobs.

The United States, including under former President Barack Obama, has said information Turkey has handed it supporting Ankara’s claim Gulen orchestrated the coup has not been sufficient to extradite him.

Cavusoglu told a conference in Doha, “I have recently seen a credible probe by the FBI on how the Gulen organization avoids taxes,” referring to the top U.S. law enforcement agency, the Federal Bureau of Investigation.

Gulen has often denied involvement in the failed coup.  Erdogan said last week the government would make new efforts to target the financing of Gulen’s supporters.

 

 

 

 

 

Turkey Claims US ‘Working On’ Extraditing Muslim Cleric

Turkey’s foreign minister says U.S. President Donald Trump recently assured Turkish President Recep Tayyip Erdogan that Washington is considering extraditing a Muslim cleric that Ankara accuses of orchestrating a failed 2016 military coup.

Turkish Foreign Minister Mevlut Cavusoglu told the U.S. television network CNBC that when Trump and Erdogan recently met at the G-20 summit in Argentina, the American leader said the United States is “working on extraditing” Fethullah Gulen “and other people.”

The 77-year-old Gulen, a one-time ally of Erdogan, has lived in self-imposed exile in the eastern U.S. state of Pennsylvania for nearly two decades, but Washington has resisted Erdogan’s demand he be returned to his homeland to face charges that he directed the coup attempt from across the Atlantic.

In the failed attempt to oust Erdogan, soldiers in tanks and helicopters attacked the Turkish parliament and shot at unarmed civilians.  About 300 people were killed in the fighting, but troops loyal to Erdogan prevailed.

Erdogan subsequently ordered the arrest of thousands of people, including academics, journalists and government workers, that he believed were supportive of the attempted putsch.  In the two years since the aborted coup, 77,000 people have been arrested and more than 160,000 fired from their jobs.

The United States, including under former President Barack Obama, has said information Turkey has handed it supporting Ankara’s claim Gulen orchestrated the coup has not been sufficient to extradite him.

Cavusoglu told a conference in Doha, “I have recently seen a credible probe by the FBI on how the Gulen organization avoids taxes,” referring to the top U.S. law enforcement agency, the Federal Bureau of Investigation.

Gulen has often denied involvement in the failed coup.  Erdogan said last week the government would make new efforts to target the financing of Gulen’s supporters.

 

 

 

 

 

Debt Threat: Business Debt, Worries About it, Are up

Homeowners appear to have learned the lesson of the Great Recession about not taking on too much debt. There is some concern that Corporate America didn’t get the message.

 

For much of the past decade, companies have borrowed at super-low interest rates and used the money to buy back stock, acquire other businesses and refinance old debt. The vast majority of companies are paying their bills on time, thanks in large part to profits that have surged since the economy emerged from the Great Recession nine and a half years ago.

 

But with interest rates rising and U.S. economic growth expected to slow next year, worries are building from Washington to Wall Street that corporate debt is approaching potentially dangerous levels. U.S. corporate debt has grown by nearly two-thirds since 2008 to more than $9 trillion and, along with government debt, has ballooned much faster than other parts of the bond market. Investors are most concerned about companies at the weaker end of the financial-strength scale _ those considered most likely to default or to get downgraded to “junk” status should a recession hit.

 

“I’ve been more worried about the bond market than the equity market,” said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. “I think at some point, all the leverage in the system is going to rear its ugly head.”

 

Consider General Electric, which said in early October it would record a big charge related to its struggling power unit, one that ended up totaling $22 billion. Both Moody’s and Standard & Poor’s subsequently downgraded GE’s credit rating to three notches above “speculative” grade, which indicates a higher risk of default.

 

GE, with about $115 billion in total borrowings, is part of a growing group of companies concentrated at the lower end of investment-grade. Other high-profile names in this area within a few notches of junk grade include General Motors and Verizon Communications. They make up nearly 45 percent of the Bloomberg Barclays Credit index, more than quadruple their proportion during the early 1970s.

 

Credit-rating agencies say downgrades for GE, GM or Verizon aren’t imminent. But the concern for them, and broadly for this swelling group of businesses, is if profits start falling or the economy hits a recession.

 

If those companies do drop below investment grade, they’d be what investors call “fallen angels,” and they can trigger waves of selling. Many mutual funds and other investors are required to own only high-quality, investment-grade bonds — so they would have to sell any bonds that get cut to junk.

 

The forced selling would lead to a drop in bond prices, which could result in higher borrowing costs for companies, which hurts their ability to repay their debts, which could lead to even more selling.

 

Even the chairman of the Federal Reserve has taken notice of the rise in corporate debt. Jerome Powell said in a recent speech that business borrowing usually rises when the economy is growing. But he said it’s concerning that, over the last year, the companies increasing their borrowing the most are those already with high debt and interest burdens.

 

To be sure, many bond fund managers say companies were smart to borrow hefty sums at low rates. And at the moment, there are no outward signs of danger. The default rate for junk-rated corporate bonds was 2.6 percent last month, which is lower than the historical average, and S&P Global Fixed Income Research expects it to fall in upcoming months.

 

Even if the economy does fall into a recession, fund managers say losses won’t be to the same scale as 2008 when the financial crisis sent the S&P 500 to a drop of nearly 37 percent and the most popular category of bond funds to an average loss of 4.7 percent.

 

In his speech, Powell said he doesn’t see the weaker parts of the corporate debt market undermining the financial system in the event of an economic downturn, at least “for now.”

 

Other investors see the market’s growing worries as premature. Companies are still making record profits, which allow them to repay their debts, and consumer confidence is still high.

 

“There is a story out there that there’s a recession coming very soon, and you had better head for the hills,” said Warren Pierson, deputy chief investment officer at Baird Advisors. “We think that’s a pretty early call. We don’t see recession on the horizon.”

 

That’s why he and Mary Ellen Stanek, who run bond mutual funds at Baird, haven’t given up on corporate bonds, even if they’ve moderated how much they own.

 

But critics see some echoes of the financial crisis in today’s loosening lending standards. Consider leveraged loans, a section of the market that makes loans to companies with lots of debt or relatively weak finances. These loans have been popular with investors in recent years because they often have what are called floating rates, so they pay more in interest when rates are rising.

 

Paul Massaro, portfolio manager for floating-rate strategies at T. Rowe Price, says he’s still positive about this market in general. But his team of analysts has been finding more warning flags in offerings, where the terms of the deal may be overly friendly to borrowers and allow them to amass more debt than they should.

 

It’s gotten to the point where Massaro is participating in about 15 percent of all offerings today, down from 30 percent a few years ago.

 

Investors have largely been willing to stomach higher risk because they’ve been starved for income following years of very low interest rates.

 

As a result, some bonds that by many accounts look like risky junk bonds are trading at prices and yields that should be reserved for higher-quality bonds, say Tom McCauley and Yoav Sharon, who run the $976.3 million Driehaus Active Income fund. To take advantage, they’re increasingly “shorting” corporate bonds, which are trades that pay off if the bonds’ prices fall.

 

They recently began shorting bonds of a packaged goods company with a “BBB” rating that borrowed to help pay for a large acquisition, for example. A “BBB” rating is at the lower end of investment grade, and a drop to “BB” would send it into junk status.

 

With so much debt, McCauley and Sharon believe that it’s at risk of getting downgraded to junk and is not paying enough in yield to compensate for its risk.

 

“As we get into the later stages of the cycle, the sins of the early stages of the cycle tend to start showing up,” said Sharon. “We think that’s where we are today.”

 

Debt Threat: Business Debt, Worries About it, Are up

Homeowners appear to have learned the lesson of the Great Recession about not taking on too much debt. There is some concern that Corporate America didn’t get the message.

 

For much of the past decade, companies have borrowed at super-low interest rates and used the money to buy back stock, acquire other businesses and refinance old debt. The vast majority of companies are paying their bills on time, thanks in large part to profits that have surged since the economy emerged from the Great Recession nine and a half years ago.

 

But with interest rates rising and U.S. economic growth expected to slow next year, worries are building from Washington to Wall Street that corporate debt is approaching potentially dangerous levels. U.S. corporate debt has grown by nearly two-thirds since 2008 to more than $9 trillion and, along with government debt, has ballooned much faster than other parts of the bond market. Investors are most concerned about companies at the weaker end of the financial-strength scale _ those considered most likely to default or to get downgraded to “junk” status should a recession hit.

 

“I’ve been more worried about the bond market than the equity market,” said Kirk Hartman, global chief investment officer at Wells Fargo Asset Management. “I think at some point, all the leverage in the system is going to rear its ugly head.”

 

Consider General Electric, which said in early October it would record a big charge related to its struggling power unit, one that ended up totaling $22 billion. Both Moody’s and Standard & Poor’s subsequently downgraded GE’s credit rating to three notches above “speculative” grade, which indicates a higher risk of default.

 

GE, with about $115 billion in total borrowings, is part of a growing group of companies concentrated at the lower end of investment-grade. Other high-profile names in this area within a few notches of junk grade include General Motors and Verizon Communications. They make up nearly 45 percent of the Bloomberg Barclays Credit index, more than quadruple their proportion during the early 1970s.

 

Credit-rating agencies say downgrades for GE, GM or Verizon aren’t imminent. But the concern for them, and broadly for this swelling group of businesses, is if profits start falling or the economy hits a recession.

 

If those companies do drop below investment grade, they’d be what investors call “fallen angels,” and they can trigger waves of selling. Many mutual funds and other investors are required to own only high-quality, investment-grade bonds — so they would have to sell any bonds that get cut to junk.

 

The forced selling would lead to a drop in bond prices, which could result in higher borrowing costs for companies, which hurts their ability to repay their debts, which could lead to even more selling.

 

Even the chairman of the Federal Reserve has taken notice of the rise in corporate debt. Jerome Powell said in a recent speech that business borrowing usually rises when the economy is growing. But he said it’s concerning that, over the last year, the companies increasing their borrowing the most are those already with high debt and interest burdens.

 

To be sure, many bond fund managers say companies were smart to borrow hefty sums at low rates. And at the moment, there are no outward signs of danger. The default rate for junk-rated corporate bonds was 2.6 percent last month, which is lower than the historical average, and S&P Global Fixed Income Research expects it to fall in upcoming months.

 

Even if the economy does fall into a recession, fund managers say losses won’t be to the same scale as 2008 when the financial crisis sent the S&P 500 to a drop of nearly 37 percent and the most popular category of bond funds to an average loss of 4.7 percent.

 

In his speech, Powell said he doesn’t see the weaker parts of the corporate debt market undermining the financial system in the event of an economic downturn, at least “for now.”

 

Other investors see the market’s growing worries as premature. Companies are still making record profits, which allow them to repay their debts, and consumer confidence is still high.

 

“There is a story out there that there’s a recession coming very soon, and you had better head for the hills,” said Warren Pierson, deputy chief investment officer at Baird Advisors. “We think that’s a pretty early call. We don’t see recession on the horizon.”

 

That’s why he and Mary Ellen Stanek, who run bond mutual funds at Baird, haven’t given up on corporate bonds, even if they’ve moderated how much they own.

 

But critics see some echoes of the financial crisis in today’s loosening lending standards. Consider leveraged loans, a section of the market that makes loans to companies with lots of debt or relatively weak finances. These loans have been popular with investors in recent years because they often have what are called floating rates, so they pay more in interest when rates are rising.

 

Paul Massaro, portfolio manager for floating-rate strategies at T. Rowe Price, says he’s still positive about this market in general. But his team of analysts has been finding more warning flags in offerings, where the terms of the deal may be overly friendly to borrowers and allow them to amass more debt than they should.

 

It’s gotten to the point where Massaro is participating in about 15 percent of all offerings today, down from 30 percent a few years ago.

 

Investors have largely been willing to stomach higher risk because they’ve been starved for income following years of very low interest rates.

 

As a result, some bonds that by many accounts look like risky junk bonds are trading at prices and yields that should be reserved for higher-quality bonds, say Tom McCauley and Yoav Sharon, who run the $976.3 million Driehaus Active Income fund. To take advantage, they’re increasingly “shorting” corporate bonds, which are trades that pay off if the bonds’ prices fall.

 

They recently began shorting bonds of a packaged goods company with a “BBB” rating that borrowed to help pay for a large acquisition, for example. A “BBB” rating is at the lower end of investment grade, and a drop to “BB” would send it into junk status.

 

With so much debt, McCauley and Sharon believe that it’s at risk of getting downgraded to junk and is not paying enough in yield to compensate for its risk.

 

“As we get into the later stages of the cycle, the sins of the early stages of the cycle tend to start showing up,” said Sharon. “We think that’s where we are today.”

 

Pistol-Packing Teachers Becoming More Common in Arkansas

Dale Cresswell keeps his gun on his hip at all times: in his classroom, at sporting events, whenever he’s at school.

Cresswell, head coach to the senior boys’ track and cross-country teams, is one of a small, but growing group of teachers around the United States who are volunteering to carry a weapon. His employer, Heber Springs School District, just came online this semester.

“It was a no-brainer. I have a daughter still in school,” said Cresswell of his decision, acknowledging that he might know any potential shooter. “I see it as, I’m protecting more than one person. I’m protecting all the other students.”

Tests and training

In order to qualify, Cresswell and other faculty, including administrators and IT professionals who can move around more easily, underwent background checks and psychological tests. They continue to go through rigorous training.

“I know that last summer there was a big movement here. We were fortunate that we had made the decision early, and we were able to secure trainers and get our time slot locked in,” said Heber Springs School District Superintendent Alan Stauffacher, noting that some other schools are “struggling” to get set up.

A semester in, the novelty of Cresswell carrying a weapon has worn off. He said that when asked, the students tell him they don’t even notice his gun anymore.

​Sandy Hook 

While there appears to have been no law prohibiting it, guns were rarely carried by teachers in Arkansas schools before a 20-year-old gunman killed 20 young children and six adults at Sandy Hook Elementary School in the northeastern U.S. state of Connecticut in 2012.

That incident prompted David Hopkins, superintendent of the Clarksville Public Schools in Clarksville, Arkansas, to begin searching for more effective ways to protect his students.

“It was just so terrible. Something like that, it makes you really pause,” Hopkins said. “I started getting calls from parents and grandparents asking, ‘What are you doing to protect our kids?’”

At that time, Hopkins wondered whether what he had in mind — arming faculty across each school in the district — was even legal. Since then, he has counseled other Arkansan schools as they follow suit.

“It’s not like we want to be cowboys, but if you stop and think about the reality of someone coming into your business or your school, don’t you want to be prepared?” he asked.

Protecting schools, students

Protecting schools from future shootings has increasingly occupied administrators and lawmakers’ time. Just this year, 113 people were killed or injured in school shootings in the U.S.

After the Parkland, Florida, school shooting in February, Arkansas Governor Asa Hutchinson tasked a committee with studying how to prevent future school shootings.

Their report, released earlier this month, stressed that individual schools need to make decisions for themselves, but recommended that “no campus should ever be without an armed presence when staff and children are attending class or a major extracurricular activity.”

A study published by Vice News in March found that at least 14 of the 50 states arm teachers and another 16 allow local school boards to decide on the issue.

But while Cresswell and Hopkins believe arming teachers serves as a deterrent for gun violence, not everyone agrees.

Following the Safety Commission report, Moms Demand Action stated that “putting guns in the hands of teachers is not the answer…” and that “research indicates that arming teachers will make children less safe.”

“As a general rule, I don’t think anyone believes that it is preventative. I think that most thoughtful individuals know that if a person sets out to do harm to themselves or someone else, they’re not gonna stop and think ‘Oh, there might be someone armed,’” said Cathy Koehler, president of the Arkansas Education Association.

Koehler stopped short of saying that faculty shouldn’t be armed, recognizing that it can take 20 minutes for police in some rural counties to respond to a situation. She stressed that schools should gain community buy-in, which superintendents in both Clarksville and Heber Springs said they did.

“Our preference is always going to be that the investment is made in the mental health services that are so desperately needed and are underfunded,” Koehler said.

Scott Gauntt, a member of the Safety Commission and superintendent of Westside Consolidated School District, said he has received no pressure to arm teachers.

Westside was the site of a deadly shooting 20 years ago, so it is often invoked in conversations about school safety. Like other superintendents interviewed, Gauntt takes his role as protector of students very seriously.

“Just about every time we hear of another shooting, we look at how that took place. How would we have combated that? Could we fix that?” Gauntt asked.

Over the years, the school has installed dozens of surveillance cameras and stronger classroom locks. Teachers undergo survival training to apply a tourniquet, for example, in order to prevent kids from bleeding out from bullet wounds. Students as young as those in elementary school are taught to be a “partner in [their] own survival.” Instead of hiding quietly under their desks, they are now taught to make loud noises and throw things.

“It’s mind boggling that I’ve gotta go down and tell a kindergartener that if a man comes in and tries to shoot you, that you need to run around and scream,” Gauntt said. “That’s not why I got into education.”

When it comes to arming teachers inside the classroom, he’s reluctant to take a hard stance but admits that he worries about guns getting loose.

Ultimately, most parties agree that despite all precautions, a motivated shooter will find a way to do harm.

“School safety is an illusion,” Gauntt said.

Pistol-Packing Teachers Becoming More Common in Arkansas

Dale Cresswell keeps his gun on his hip at all times: in his classroom, at sporting events, whenever he’s at school.

Cresswell, head coach to the senior boys’ track and cross-country teams, is one of a small, but growing group of teachers around the United States who are volunteering to carry a weapon. His employer, Heber Springs School District, just came online this semester.

“It was a no-brainer. I have a daughter still in school,” said Cresswell of his decision, acknowledging that he might know any potential shooter. “I see it as, I’m protecting more than one person. I’m protecting all the other students.”

Tests and training

In order to qualify, Cresswell and other faculty, including administrators and IT professionals who can move around more easily, underwent background checks and psychological tests. They continue to go through rigorous training.

“I know that last summer there was a big movement here. We were fortunate that we had made the decision early, and we were able to secure trainers and get our time slot locked in,” said Heber Springs School District Superintendent Alan Stauffacher, noting that some other schools are “struggling” to get set up.

A semester in, the novelty of Cresswell carrying a weapon has worn off. He said that when asked, the students tell him they don’t even notice his gun anymore.

​Sandy Hook 

While there appears to have been no law prohibiting it, guns were rarely carried by teachers in Arkansas schools before a 20-year-old gunman killed 20 young children and six adults at Sandy Hook Elementary School in the northeastern U.S. state of Connecticut in 2012.

That incident prompted David Hopkins, superintendent of the Clarksville Public Schools in Clarksville, Arkansas, to begin searching for more effective ways to protect his students.

“It was just so terrible. Something like that, it makes you really pause,” Hopkins said. “I started getting calls from parents and grandparents asking, ‘What are you doing to protect our kids?’”

At that time, Hopkins wondered whether what he had in mind — arming faculty across each school in the district — was even legal. Since then, he has counseled other Arkansan schools as they follow suit.

“It’s not like we want to be cowboys, but if you stop and think about the reality of someone coming into your business or your school, don’t you want to be prepared?” he asked.

Protecting schools, students

Protecting schools from future shootings has increasingly occupied administrators and lawmakers’ time. Just this year, 113 people were killed or injured in school shootings in the U.S.

After the Parkland, Florida, school shooting in February, Arkansas Governor Asa Hutchinson tasked a committee with studying how to prevent future school shootings.

Their report, released earlier this month, stressed that individual schools need to make decisions for themselves, but recommended that “no campus should ever be without an armed presence when staff and children are attending class or a major extracurricular activity.”

A study published by Vice News in March found that at least 14 of the 50 states arm teachers and another 16 allow local school boards to decide on the issue.

But while Cresswell and Hopkins believe arming teachers serves as a deterrent for gun violence, not everyone agrees.

Following the Safety Commission report, Moms Demand Action stated that “putting guns in the hands of teachers is not the answer…” and that “research indicates that arming teachers will make children less safe.”

“As a general rule, I don’t think anyone believes that it is preventative. I think that most thoughtful individuals know that if a person sets out to do harm to themselves or someone else, they’re not gonna stop and think ‘Oh, there might be someone armed,’” said Cathy Koehler, president of the Arkansas Education Association.

Koehler stopped short of saying that faculty shouldn’t be armed, recognizing that it can take 20 minutes for police in some rural counties to respond to a situation. She stressed that schools should gain community buy-in, which superintendents in both Clarksville and Heber Springs said they did.

“Our preference is always going to be that the investment is made in the mental health services that are so desperately needed and are underfunded,” Koehler said.

Scott Gauntt, a member of the Safety Commission and superintendent of Westside Consolidated School District, said he has received no pressure to arm teachers.

Westside was the site of a deadly shooting 20 years ago, so it is often invoked in conversations about school safety. Like other superintendents interviewed, Gauntt takes his role as protector of students very seriously.

“Just about every time we hear of another shooting, we look at how that took place. How would we have combated that? Could we fix that?” Gauntt asked.

Over the years, the school has installed dozens of surveillance cameras and stronger classroom locks. Teachers undergo survival training to apply a tourniquet, for example, in order to prevent kids from bleeding out from bullet wounds. Students as young as those in elementary school are taught to be a “partner in [their] own survival.” Instead of hiding quietly under their desks, they are now taught to make loud noises and throw things.

“It’s mind boggling that I’ve gotta go down and tell a kindergartener that if a man comes in and tries to shoot you, that you need to run around and scream,” Gauntt said. “That’s not why I got into education.”

When it comes to arming teachers inside the classroom, he’s reluctant to take a hard stance but admits that he worries about guns getting loose.

Ultimately, most parties agree that despite all precautions, a motivated shooter will find a way to do harm.

“School safety is an illusion,” Gauntt said.

The Historic Place Where Literary, Political Worlds Intersect

A relatively modest, independently owned bookstore in Washington has become a standout on the cultural scene in the U.S. capital. It’s called Politics and Prose. Since opening in 1984, it’s managed to survive the age of online book buying and thrive as a magnet for some of the world’s highest profile authors, from former Presidents Clinton and Obama, to J.K. Rowling, Salman Rushdie and photographer Annie Leibovitz. Ani Chkhikvadze stopped by Politics and Prose to learn more about its success.

The Historic Place Where Literary, Political Worlds Intersect

A relatively modest, independently owned bookstore in Washington has become a standout on the cultural scene in the U.S. capital. It’s called Politics and Prose. Since opening in 1984, it’s managed to survive the age of online book buying and thrive as a magnet for some of the world’s highest profile authors, from former Presidents Clinton and Obama, to J.K. Rowling, Salman Rushdie and photographer Annie Leibovitz. Ani Chkhikvadze stopped by Politics and Prose to learn more about its success.