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Turkey is blocking NATO’s expansion. It could backfire and hand Putin a propaganda coup | CNN

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Turkey is blocking NATO’s expansion. It could backfire and hand Putin a propaganda coup | CNN



CNN
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When Sweden and Finland declared their intention to affix NATO final Might, it was seen by many as a poke within the eye for Russia and proof of a shift in European considering. Traditionally, each nations had dedicated to non-alignment with NATO as a method of avoiding scary Moscow. The invasion of Ukraine modified that. 

Each Finland and Sweden – together with the overwhelming majority of NATO allies – wish to see the nations formally be part of the alliance at a NATO summit on July 11. Nonetheless, a major hurdle stands in the way in which of this turning into a actuality: Turkey has but to present the plan its formal and official blessing. 

Turkey just isn’t the one nation blocking the transfer: Hungary has additionally did not ratify the Nordics’ accession which additional muddies the waters. Nonetheless, proper now getting Turkey on facet is taken into account the precedence. 

Sadly for the pro-NATO gang, Western officers are more and more pessimistic that Turkey will budge.

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Formally, Turkish President Recep Tayyip Erdoğan objects to Sweden and Finland’s membership on what he claims are safety grounds. Turkey claims that each nations, although significantly Sweden, are harboring militants from the banned Kurdistan Employees Celebration (PKK), a chosen terror group in Turkey, Sweden, america and Europe. Erdogan says he would love these people to be extradited; Sweden has made clear this received’t occur. 

NATO diplomats are break up on whether or not they assume Turkey will budge earlier than the July summit. Central to each faculties of thought is this 12 months’s Turkish election, perceived as the largest political menace Erdogan has confronted in years. 

“The picture he has created of a strongman who will get outcomes for the Turkish individuals has been shattered,” explains Gonul Tol of the Center East Institute’s Turkey program. “There may be loads of anti-West and anti-Kurd sentiment in Turkey in the intervening time. It is a good matter for him to bang his drum and a dramatic U-turn would solely make him look weaker.”

Tol believes there are different causes that Erdogan doesn’t wish to upset Russia’s President Vladimir Putin. 

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“Russia has been a lifeline economically for Turkey after different nations imposed sanctions for his or her actions in Syria, their cooperation militarily with Russia and different hostile exercise,” Tol explains. “With out Russian cash, Erdogan wouldn’t have been in a position to elevate wages or present monetary help to college students. He’s now promising mass rebuilding, post-earthquake. So Russia remains to be a beautiful companion for Erdogan.” 

Like many Western officers, Tol believes the Turkish claims about Sweden and Finland harboring terrorists present good cowl for Erdogan to not interact at a politically inconvenient time on the NATO query.

Whereas nothing might come from the talks due between the three events on Thursday, a dialog is happening about how a lot political capital Erdogan may need to spend after the election, ought to he win. 

First, the optimists. 

This group contains Sweden, Finland and a few of the states that border Russia or used to reside below the Soviet sphere. They consider that Turkey, which advantages vastly from being a part of NATO, will finally do what’s in its finest curiosity and drop objections.

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For this to occur, officers are bracing for Turkey to make extra practical calls for than the handing over of people it deems to be terrorists, such because the lifting of sanctions or the US permitting Turkey to purchase the fighter jets that the nation badly must hold its air drive updated.

In the end, the optimists consider there’s a compromise that vastly favors NATO. The alliance, Sweden and Finland have made their case and NATO has an open-door coverage for any nation wanting to affix. Sweden and Finland have greater than met the standards, so not becoming a member of makes a mockery of the alliance – an alliance that Turkey advantages from being a member. One NATO official instructed CNN that they assumed Erdogan would anticipate the summit earlier than conceding in order that he can bask within the “reward of all his Western allies.” 

The far bigger group amongst officers who spoke with CNN are pessimists. They assume the probabilities of Erdogan shifting his place earlier than July 11 are pretty much as good as zero and are already considering past that summit. 

“I believe it’s more and more doubtless that Finland breaks from Sweden and goes for membership alone,” one NATO diplomat instructed CNN. 

Different members of the alliance nonetheless see an actual prospect of each nations being blocked and are contemplating how finest NATO can deal with such a situation. 

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A number of NATO officers and diplomats instructed CNN that the hazard right here is Turkey’s block feeding the Kremlin narrative that the West and NATO are divided. The alliance’s job at that time shall be to clarify that even when they don’t seem to be members, Finland and Sweden are actually successfully in lockstep with NATO. They may not be members, however they’re as shut companions because it’s doable to be – and they don’t seem to be impartial any extra. 

Hungarian Prime Minister Viktor Orban is considered to be the EU leader closest to Russian President Vladimir Putin.

Even when Turkey may be squared off, there may be the separate, albeit simpler subject of Hungary. 

Prime Minister Viktor Orban has publicly indicated he isn’t against the Nordic nations becoming a member of, however retains discovering methods to stall a choice turning into official. 

There are just a few causes Orban would wish to drag his ft. Finland and Sweden have each criticized Hungary for its rule of regulation document. He addressed this in a current interview, asking how “can anybody wish to be our ally in a army system whereas they’re shamelessly spreading lies about Hungary?” 

Orban is taken into account to be the EU chief closest to Putin. Katalin Cseh, a Hungarian Member of the European Parliament, describes Orban’s blocking of the Sweden and Finland bids as “fairly merely, one other favor to Vladimir Putin.” She believes that Orban, who has been accused of drifting in the direction of autocratic management, has “invested over a decade to repeat his insurance policies and construct up a Putinist mannequin,” and that any perceived NATO victory over Putin “places his complete regime in jeopardy.”

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It’s doable that Orban is hanging on in an effort to get concessions from different EU member states, the place Hungary has been accused of violating all method of EU legal guidelines. The end result has been withholding of EU funds and scorn from the bloc. Whereas NATO and the EU are separate entities, they share many members and it’s believable that bilateral diplomacy may see some give-and-take between Hungary and its EU counterparts. 

For all Orban’s foot-dragging, although, it’s broadly assumed that if Turkey may be squared off, Hungary will drop its opposition to Finland and Sweden becoming a member of NATO. 

The irony isn’t misplaced on many who one of many important causes Putin gave for invading Ukraine was to place a cease to what he claimed was NATO enlargement. The truth that his aggression may need pushed a traditionally unaligned nation into NATO remains to be seen by most within the West as an enormous personal aim by the Kremlin.

Till an settlement is reached, nonetheless, the way forward for the alliance stays considerably up within the air. Finland and Sweden have successfully picked a facet because the begin of the Ukraine battle. It appears unlikely that they may return to a place of neutrality if the struggle had been to out of the blue finish. 

The danger for NATO and the broader Western alliance comes in the event that they fail to affix the alliance in any respect and the Kremlin can use it for propaganda functions. If that occurs, even when the struggle out of the blue ends, the narrative of a divided West will proceed to be the drum that NATO’s opponents can bang. 

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Investors only have themselves to blame as Jay Powell steals Christmas

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Investors only have themselves to blame as Jay Powell steals Christmas

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For markets, US Federal Reserve chief Jay Powell is the Grinch who stole Christmas. But the festive shakeout in bonds, currencies and stocks now under way in the wake of the US central bank’s latest pronouncements is a mini-crisis of investors’ own making.

Fed meetings, and the minutiae of its public statements, are always marquee events for investors, setting the tone across all major asset classes. Wednesday’s meeting, the last of 2024, always came with the potential for greater punch, given the timing — right on the cusp of Donald Trump’s second stint in the White House. 

The decision on rates itself — a quarter-point chop off the benchmark — was in line with expectations. But it went downhill from there, as the central bank’s apparent cooling on further cuts next year — an allusion to the potentially inflationary impact of Trump’s economic policies — has gone down like a mouldy mince pie.

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US stocks nosedived, wiping out almost all of the gains in the S&P 500 benchmark index since Trump’s re-election day. The following morning brought a similar sea of red across Asian and European stocks too. The dollar popped higher, sending the euro and yen tumbling awkwardly hard, and US government bonds weakened, sending the yield on 10-year Treasuries forcefully above 4.5 per cent.

The Fed chair is facing some flak here. His comment in the post-meeting press conference that the year-end projection for inflation has “kind of fallen apart” is not the sort of self-assertion that investors seek in a Fed chair, and the pick-up in some inflation measures comfortably predates the reinauguration of Trump.

But markets are going through the wringer in no small part because the consensus among investors about the next steps for markets had become so intense — curdling hard around the themes of American exceptionalism in stocks and the vanquishing of inflation keeping bonds well supported. The path to an easy run in markets in 2025 had become exceptionally narrow and extremely crowded with like-minded views, and it has taken only a gentle push from the Fed to tip that out of balance.

The annual spectacle of year-ahead market outlooks from the big banks and asset managers demonstrated a near-unanimous set of views. Deutsche Bank is towards the top of the pack with its assessment that the benchmark S&P 500 index of heavyweight US stocks will ascend to 7,000 by the end of next year. After the overnight shock, that projection is 20 per cent above where we are now. It is punchy, but not wildly out of line. Core fundamental differences of opinion are hard to find. “The degree of uniformity in year-ahead projections has broken all previous records,” notes TS Lombard’s Dario Perkins.

The trouble with that was two-fold. First, it meant much, if not all, of the narrative was already baked in. Second, crowding around core themes tends to exaggerate the scale of market reactions when stuff goes wrong. Enter Powell stage left.

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“Everyone’s portfolio is pointed towards US exceptionalism,” said Mike Riddell, a portfolio manager on Fidelity’s Strategic Bond Fund, speaking with some foresight the week before the Fed decision. “The consensus can be right, and we don’t see much to derail it. But if you see anything to move the narrative, you can get really violent market moves.”

We have been here before, in a range of different markets, but that does not prevent investors from making the same mistake over and over again. This time last year, Powell caught the market off guard in the opposite direction, dropping a hint of interest rate cuts that investors went on to exaggerate hugely out of proportion.

Crowded bets among investors also stung in early August, when a downbeat US labour market report blasted in to several popular and correlated market bets. In late September, deeply unloved Chinese stocks rocketed higher after Beijing unleashed stimulus measures to try and turn the hobbled economy and markets around. Investors had given China such a wide berth that stocks leapt 40 per cent in just a few days as funds piled in to a narrow entrance.

The latest ructions are a useful reminder that despite the disarming simplicity of the American exceptionalism theme, rakes are scattered all over markets for investors next year.

The assumption that the US economy will sail through the first year of Trump 2.0 is brave. Ignoring the (actually pretty obvious) banana skins, particularly around inflation, is “the ultimate ‘trust me’ trade” says Greg Peters, co-chief investment officer for PGIM Fixed Income. “It seems off to me.”

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Now, investors should not assume that the Christmas holiday season will put all this angst to bed. As the final days of 2018 showed, portfolios can and do shake around wildly even when a lot of core markets are shut, on half-days, or on the go-slow. If anything, thinned-out trading volumes at this time of year can make matters worse. 

Some fund managers will be feeling sore about this year-end beating. But Powell has done us all a favour in reminding us that next year will not be for the faint of heart, and the wisdom of crowds is not always your friend.

katie.martin@ft.com

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Wisconsin school shooting victims named as teacher Erin West and student Rubi Vergara

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Wisconsin school shooting victims named as teacher Erin West and student Rubi Vergara

Tributes have been paid to the two victims who died in the shooting at the Abundant Life Christian School in Madison, Wisconsin, on Monday, who have been named as 42-year-old teacher Erin M. West and 14-year-old student Rubi P. Vergara.

The Dane County Medical Examiner’s office confirmed their identities in a press release Wednesday night, while in a separate statement, the school said, “our hearts are heavy with these losses.”

The suspected shooter, 15-year-old Natalie Rupnow, a freshman at the school who was also known as Samantha, died on the way to hospital on Monday from an apparent self-inflicted gunshot wound, police said.

“ALCS is a better school for the work of Erin West. She brought her love of Jesus and love of people to our staff and school family all wrapped in a hug and topped with a smile,” the school’s statement said.

Erin West.Empire Photography

The school said West worked as a substitute teacher for three years before taking a full-time staff role as an in-house substitute teacher and coordinator, “a role tailor made for her abundant skills and breadth of knowledge.”

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“She served our teachers and students with grace, humor, wisdom, and — most importantly — with the love of Jesus. Her loss is a painful and deep one and she will be greatly missed not just among our staff, but our entire ALCS family,” the statement added.

Rubi Vergara, a 9th grade student, had been at the school since kindergarten and was described as popular and a keen volunteer.

“Her gentle, loving, and kind heart was reflected in her smile. Rubi was a blessing to her class and our school. She was not only a good friend, but a great big sister,” the school said.

“Often seen with a book in hand, she had a gift for art and music. Yet, it was Rubi’s love for Jesus that shined brightest and she shared His love with others by volunteering faithfully. She will be missed deeply by her teachers and fellow students,” the statement added.

An online obituary uploaded to a local funeral home website said Vergara loved art, singing and playing keyboard in her family’s worship band. “She shared a special bond with her beloved pets, Ginger (cat) and Coco (dog),” the obituary said.

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Wisconsin school shooting victims named as teacher Erin West and student Rubi Vergara
Rubi Patricia Vergara.Jenn Vergara

The funeral home said a service for Vergara would be held on Saturday at 11 a.m. CST (12 a.m. ET) and would be livestreamed online.

The police investigation into the shooting continues. Authorities said Wednesday night that the two unidentified students who received life-threatening injuries remain in a local hospital, while the four people who were treated in hospital for minor injuries sustained in the shooting have been discharged.

Police said that the shooter opened fire in a second-floor classroom “during a study hall for mixed graders.”

Two guns were found at the school, but only one was used in the shooting, police said.

Police said they were working to establish a motive and said they were aware of the suspect’s alleged social media activity and “documents and photos circulating the internet,” that have yet to be verified.

Detectives want to speak to any who may have interacted with Rupnow in the days or weeks before the shooting — they can contact police anonymously through Madison Area Crime Stoppers at p3tips.com or by calling 608-266-6014. 

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Perplexity’s value triples to $9bn in latest funding round for AI search engine

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Perplexity’s value triples to bn in latest funding round for AI search engine

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Perplexity, an artificial intelligence-driven search engine, has closed its fourth funding round this year, tripling its valuation to $9bn as it seeks to compete with offerings from Google and OpenAI.

The $500mn round was led by Institutional Venture Partners, with involvement from Nvidia, New Enterprise Associates, B Capital and T Rowe Price, according to multiple people with knowledge of the deal. Previous investors have included SoftBank’s Vision Fund 2, Nvidia and Amazon founder Jeff Bezos, as well as several prominent names from the AI industry such as OpenAI co-founder Andrej Karpathy and Meta’s chief AI scientist Yann LeCun.

The San Francisco-based group has grown rapidly this year, with its product receiving hundreds of millions of queries a month. It has 15mn monthly active users with most of that traffic coming from the US.

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The new funding will help Perplexity compete with west coast rivals in an increasingly fierce fight for engineers. “The talent war for AI is like no other time before,” according to Ali Ghodsi, co-founder and chief executive of Databricks, the AI and data analytics company that announced a $10bn fundraising round on Tuesday.

Perplexity is seeking to capitalise and improve on the search advertising system pioneered by Google, in which marketers bid to have a sponsored link placed against search queries. It is in talks with major brands to pilot advertising on its platform.  

In a sign of growing competition in the space, AI companies have recently targeted the search market by linking up chatbots to the internet. This week, OpenAI rolled out web searching for its popular ChatGPT product, while Anthropic’s Claude can perform searches through a feature called “computer use”.

Google and Microsoft, which are leaders in the $300bn digital advertising world, have also recently incorporated large language models, which power AI chatbots and make results more conversational, into their search offerings.

The latest round has pushed Perplexity’s valuation higher by nine-fold since the start of the year, in another sign of how hot start-ups developing new AI tools can draw in hundreds of millions or even billions of dollars in investment. 

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After OpenAI’s $6.6bn fundraising in October — one of the largest in Silicon Valley — one person close to the company said Perplexity was inundated with unsolicited interest from new investors.

Run by former Google intern Aravind Srinivas, Perplexity raised $250mn this summer, on top of previous funding rounds in January and April.

Perplexity makes money through subscriptions. It says its annualised revenues — a projection of full-year revenues based on extrapolating the most recent month’s sales — have grown from $5mn in January to $35mn in August.

The spate of deals for lossmaking AI start-ups has stoked concern among some investors that rising valuations in the sector show all the hallmarks of a bubble, however. But even those who argue most AI valuations are increasingly detached from reality are willing to stake bets on companies they believe could be winners.

Perplexity and T Rowe Price declined to comment. IVP, B Capital, NEA and Nvidia did not immediately respond to a request for comment. The closing of the round was first reported by Bloomberg.

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