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Why investors will look past Turkey's authoritarian rule

Turkey 10-year note spikes

The failed military coup and the Turkish government's sweeping crackdown makes Turkey a more difficult investment destination, but the global hunt for yield could lure investors who might otherwise have stayed away.

Turkish President Recep Tayyip Erdogan's government responded to Friday's attempted overthrow by arresting thousands in the military and judiciary. Nine thousand government employees were also fired from their jobs.

Turkish stocks plunged Monday, but the country's currency recovered some of the decline it saw during the short-lived coup effort Friday night. Turkish debt sold off, and its 10-year bond is yielding an attractive 9.5 percent, about 2.5 percentage points above U.S. high-yield debt.