“Impeach The Mother-F**ker” – On First Day In Office, Muslim Congresswoman Slams Trump

One of America’s first two Muslim congresswomen has explained in succinct and direct words exactly what the new “most diverse ever” Congress’ goals are in the next session.

Just hours after being sworn in, Democratic Michigan Rep. Rashida Tlaib promised to go after President Trump, telling a group of left-wing supporters at a rally held by MoveOn near Capitol Hill, she would help Democrats “impeach the motherfucker.”

Interestingly, as The Daily Caller reported, new speaker Pelosi said in an interview on Thursday that she will withhold a decision on impeachment plans until special counsel Robert Mueller issues his report in the Russia investigation:

“Well we have to wait and see what happens with the Mueller report. We shouldn’t be impeaching for a political reason, and we shouldn’t avoid impeachment for a political reason. We just have to see how it comes.” 

But, that did not stop her underlings from starting to ramp up the rhetoric, as Tlaib’s remarks came just after Democrats officially took over the House with Democratic California Rep. Brad Sherman already reintroducing articles of impeachment against Trump.

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The “Stock Market Crash Of 2018” Is Rapidly Transforming Into “The Financial Crisis Of 2019”

Authored by Michael Snyder via The Economic Collapse blog,

Stock markets are crashing all over the world, we are seeing extremely violent “flash crashes” in the forex marketplace, economic conditions are slowing down all over the globe, and fear is causing many investors to become extremely trigger happy.  The stock market crash of 2018 wiped out approximately 12 trillion dollars in global stock market wealth, but things were supposed to calm down once we got into 2019. 

But clearly that is not happening.  After Apple announced that their sales during the first quarter are going to be much, much lower than previously anticipated, Apple’s stock price started shooting down like a rocket and by the end of the session on Wednesday the company had lost 75 billion dollars in market capitalization.  Meanwhile, “flash crashes” caused some of the most violent swings that we have ever seen in the foreign exchange markets…

It took seven minutes for the yen to surge through levels that have held through almost a decade.

In those wild minutes from about 9:30 a.m. Sydney, the yen jumped almost 8 percent against the Australian dollar to its strongest since 2009, and surged 10 percent versus the Turkish lira. The Japanese currency rose at least 1 percent versus all its Group-of-10 peers, bursting through the 72 per Aussie level that has held through a trade war, a stock rout, Italy’s budget dispute and Federal Reserve rate hikes.

This is the kind of chaos that we only see during a financial crisis.

Investors are also being rattled by the fact that China just experienced its first factory activity contraction in over two years

The People’s Bank of China said on Wednesday evening it had relaxed its conditions on targeted reserve requirement cuts to benefit more small firms.

The move came after China reported its first factory activity contraction in over two years in December. A long-term Chinese slowdown would cause global havoc.

But of course the biggest news of the day was what happened to Apple.  The Dow Jones Industrial Average was down 660 points on Wednesday, and the huge hit that Apple took was the biggest reason for that decline.

Including the 75 billion dollars that was just wiped out, the value of Apple has now fallen by 452 billion dollars since October 3rd…

In only three months, Apple has lost $452 billion in market capitalization, including tens of billions on Thursday as the tech giant’s stock sank further.

Apple shares have fallen by 39.1 percent since Oct. 3, when the stock hit a 52-week high of $233.47 a share. With its market cap down to about $674 billion, those losses are larger than individual value of 496 members of the S&P 500 — including Facebook and J.P. Morgan.

Ironically, the truth is that Apple is actually one of the strongest companies on Wall Street financially.  It is just that the company was priced well beyond perfection, and so any hint of bad news was likely to cause a decline of this magnitude.

The amount of paper wealth that stock market investors have just lost is absolutely staggering.  To put this in the proper perspective, here are some more facts about the money that Apple investors have lost that come from CNBC

At this point U.S. financial markets are hypersensitive to any piece of bad news, and the fact that Apple sales are way down in China is definitely bad news.

One analyst said that this was “Apple’s darkest day in the iPhone era” and he expressed his opinion that “the magnitude of the miss with China demand …was jaw-dropping.”

Of course Apple is far from alone.  Economic activity is slowing down substantially all over the planet, and on Wednesday we learned that U.S. factory activity just declined by the most since the last recession

Beyond Apple, investors were also rattled by the biggest one-month decline in US factory activity since the Great Recession. The closely-watched ISM manufacturing index tumbled to a two-year low, providing further evidence of slowing growth and pain from the US-China trade war.

In addition, both of Bloomberg’s economic surprise indexes have “turned negative for the first time since Trump was elected”.

The hits just keep on coming, and it is becoming quite clear that this is going to be a very tough year.

As this crisis continues to escalate, keep an eye on our big financial institutions.  Italy’s tenth largest bank just imploded, and it is likely that we will see more financial dominoes start to topple as the losses mount.

Over the past decade, there have been other times when Wall Street has been rattled, but those episodes only lasted for a few weeks at the most.

It has now been three months, and this new crisis shows no signs of abating any time soon.

What that means is that we are in a heap of trouble.  Because once this giant financial avalanche fully gets going, it is going to be impossible to stop.

For the moment, I think that this current wave of panic selling is subsiding and that Friday will be better for investors.  Of course the markets are so jittery at this point that a single piece of bad news could instantly send them tumbling once again.  But barring any bad news, hopefully things will be calmer on Friday.

There will be good days and there will be bad days in 2019.

There will be ups and there will be downs.

But it has become exceedingly clear that the downturn that so many have been anticipating has finally arrived, and the financial crisis of 2019 looks like it is going to be a doozy.

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China Announces RRR Cut Plans To Cover Lunar New Year Liquidity

US equity futures extended gains in a kneejerk reaction to headlines proclaiming China cutting the reserve requirement ratio.

The headline looks impressive…

  • CHINA CUTS BANK RESERVE RATIO BY 1 PERCENTAGE POINT

And the algos liked it…

However, two points make this less exciting “stimulus” news than we suspect the narrative will proclaim.

First is that, according to a statement from the central bank, the RRR cuts of 0.5 percentage point each will occur on Jan. 15 and Jan. 25 in a move to offset liquidity fluctuations ahead of Chinese Lunar New Year.

  • PBOC says the RRR cuts to replace medium-term lending facilities maturing in 1Q

  • PBOC says it will continue prudent monetary policy and won’t flood economy with liquidity

  • PBOC says move to boost financial support for small and private companies

  • PBOC to ensure reasonable growth of credit and aggregate financing

  • PBOC to stabilize macro leverage ratio

In other words this is ‘business as usual’ monetary injection to cover an increasingly panicked financial system dry of liquidity.

And second is that, recent previous monetary and fiscal easing efforts have utterly failed to generate any material economic activity pick up. As we noted previously, since June 2018, China has been loosening monetary and fiscal policies in an attempt to refloat the sinking red ponzi amid the shadow banking system’s deflation.

As the following chart from Goldman Sachs shows, it is not working as the Current Activity Indicator continues to slump…

It seems no matter what China throws at it, the economy (or the market) won’t behave as the text-books say it should.

As Goldman previously concluded: There are reasons to be concerned [that easing is becoming less effective]...”

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Eurozone PMI Plunges To Four Year Lows

US, China, and now European composite PMIs have all tumbled in December with Eurozone PMI slipping to 51.1 – its weakest in four years

Growth in manufacturing and services slowed more than initially reported in December – weighed down by public protests in France, Germany’s continued struggles in the car industry, and renewed weakness in Italy. Composite gauges for output expectations and new orders were the worst since late 2014.

Under the hood, the European nations are highly varied (from best to worst):

  • Ireland: 55.5 (9-month low)

  • Spain: 53.4 (3-month low)

  • Germany: 51.6 (66-month low)

  • Italy: 50.0 (3-month low)

  • France: 48.7 (49-month low)

Chris Williamson, Chief Business Economist at IHS Markit said:

The eurozone economy moved down another gear at the end of 2018, with growth down considerably from the elevated rates at the start of the year. December saw business activity grow at the weakest rate since late-2014 as inflows of new work barely rose. Levels of unfinished business are now falling for the first time in nearly four years as previously-received orders are not being fully replaced with new work.

“While a drop in business activity in France could be partly blamed on the ‘yellow vest’ protests, the rest of the region lacks any such mitigating factors, albeit with the recent weakness of the autos sector hopefully a temporary set-back.

Importantly, with expectations of output dropping to the lowest for over four years, companies are not anticipating any imminent revival in demand. Worries reflect multiple headwinds from trade wars, Brexit, heightened political uncertainty, financial market volatility and slower global economic growth.

“Employment growth has already taken a knock as companies take a more cautious approach to hiring in the face of weaker order books. Jobs growth has hit a two-year low.

Better news came in the form of an easing in price pressures to the lowest for over a year, which should provide some breathing space for the European Central Bank to review its policy guidance.”

Finally, Williamson confirms this survey signals weakness ahead…

“The data are consistent with eurozone GDP rising by just under 0.3% in the fourth quarter, but with quarterly growth momentum slowing to 0.15% in December.

How long before Draghi reverses to easing again?

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British Embassy In Syria Quietly Under Construction As UK Concedes Assad To Stay

Syria’s President Assad is fast “coming in from the cold” a recent AFP headline concluded. This not unlike the history of Libya’s Gaddafi, suddenly going from international pariah status to being courted by the Bush administration starting in 2004, culminating in Condoleezza Rice sharing a late night dinner with the late Libyan dictator during an official visit in September 2008 (though later returning to “pariah” in 2011, leading to a bloody field execution). But for Assad, who’s long long promised to “liberate every inch” of natural Syria — now a greater possibility given US plans to pull all troops out of the country likely within months — things could be moving faster than anyone expected.

An exclusive report by Middle East news site, Al Masdar, suggests the UK could be the next to reestablish official diplomatic relations with Assad, as the British Embassy in Damascus appears to be undergoing construction after being shuttered for most of the conflict following the suspension of all services in 2012. Could Britain be readying to reopen its embassy in Syria following similar preparations by a spate of Arab nations, most notably the UAE?

 

Al Masdar News was able to confirm the following by visiting the British embassy location in Damascus

The British Embassy in Damascus is undergoing construction, despite the fact that it was closed at the start of the Syrian conflict.

According to an Al-Masdar field correspondent who visited the site, the British Embassy in Damascus was indeed under construction, marking the first time since its closure that any work has been done to the building.

Syrian government officials, who would be kept apprised of any impending plans or construction works, declined to comment:

Al-Masdar reached out to the Syrian government about the mysterious construction; however, the official in Damascus declined to comment on the project.

The project reportedly began earlier this week and the construction focused on the front entrance of the building.

Iranian media is also currently circulating reports of renovations underway on the UK’s embassy to Syria, via Fars News:

The Arabic-language Rai al-Youm quoted informed sources as saying that the renovation process of the UK embassy in Damascus has begun on Thursday.

The sources pointed to the presence of an interior renovation team in Damascus, and said that the embassy is preparing for reopening in the near future.

In a relevant development in late December, as Arab states had rushed to resume ties with Damascus, former Britain’s Ambassador to Syria Peter Ford said “Washington is not powerful enough to block restoration of Arab states’ diplomatic relations” with Syria.

Crucially, news of construction on the embassy building comes the same day UK’s Foreign Ministry has announced it’s officially given up on hoped-for regime change in Syria. From the start of the war UK intelligence has been at the forefront, alongside the CIA, of regime change efforts including funding, arming, and training opposition forces in Syria. 

Britain’s Foreign Secretary Jeremy Hunt speaks during a press conference at Ministry of Foreign Affair in Putrajaya, Malaysia, Thursday, Jan. 3, 2019. via the AP

According to The Telegraph, citing official statements

Jeremy Hunt, Foreign Minister, has conceded that President Bashar al-Assad will remain in place for “a while”, reversing Britain’s long-held position to reflect the new reality on the ground in Syria.

“The British long-standing position is that we won’t have lasting peace in Syria with that (Assad-led) regime,” Mr Hunt said. “But regretfully we do think he’s going to be around for a while and that is because of the support that he’s had from Russia.”

The foreign minister further said in a television interview with Sky News, “Russia may think that it’s gained a sphere of influence. What we would say to them is: Yes – and you’ve also gained a responsibility.”

Hunt called on Russia to ensure no chemical weapons are used, something the West has long accused Assad of: “If you’re going to be involved in Syria then you need to make sure that there really is peace in Syria,” Hunt said. “And that means making sure that President Assad does not use chemical weapons on his own people.”

Thus it appears Assad’s “normalization” with both Arab and increasingly even Western countries who were a short time ago enemies is moving fast.

The UAE Embassy in Damascus reopened last Thursday, Dec. 27. via Syrian Digital Media

First, a week ago the embassy of the United Arab Emirates was formally re-opened in a ceremony in Damascus – the first time a Gulf country re-established official relations with the Assad government since all GCC states first shuttered their embassies there in 2012. And more significant, following this Gulf nations are now reportedly leading efforts to readmit Syria into the Arab League after the organization expelled Damascus eight years ago when the conflict first began. 

Should the British embassy in Damascus indeed announce that it will open in the coming months, this will mark the beginning of Assad’s acceptance once again by the West, and would further likely green light a Syrian and Russian attack on Idlib which is the last large al-Qaeda bastion in the country. 

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Brickbat: Not My Cross to Bear

BibleThe Chinese has stepped up its efforts against Christians and Muslims and other religious believers, and according to one officer, they have even instituted a point system and quotas for arrests of religious believers. Each police station is evaluated quarterly. They get points for the number of believers arrested, their faith and for any leadership positions the people they arrest hold. They get the most points for members of the Falun Gong and the Church of the Almighty Gong. A station chief who doesn’t meet his quota can be fired.

from Hit & Run http://bit.ly/2CNpueP
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Is The End Of The Brutal War In Yemen Finally At Hand?

Authored by Gareth Porter via TruthDig.com,

When the new Congress convenes Jan. 3, it is expected to pass a House resolution upholding congressional war powers and ending all direct U.S. involvement in the Saudi coalition’s war in Yemen. But hopes remain high that H. Con. Res. 138 will help to end the Yemen war itself. Congressional strategists and activists who have been working on the issue believe passage of the war powers measure will force Saudi Crown Prince Mohammed bin Salman to the negotiating table.

Together, they are challenging the position of some former Obama administration officials who have warned the war powers resolution alone cannot bring the conflict to a close. Those former officials, led by Brookings Institution fellow Bruce Riedel, say that cutting off the Saudi pipeline of spare parts is the only way to prevent further airstrikes, which have been central to the Saudi war strategy.

Proponents of the war powers resolution, sponsored by Democratic Rep. Ro Khanna of California, argue the Saudis will not be able to continue the war without the political-diplomatic support of the United States, and the Yemen resolution will make dramatically clear the Saudis can no longer count on U.S. support. How the Senate came to pass a version of the Yemen resolution, co-sponsored by Sen. Bernie Sanders, I-Vt., Sen. Chris Murphy, D-Conn., and Sen. Mike Lee, R-Utah, and ratified in December by a vote of 56 to 41, would appear to lend support to their argument.

The Khashoggi Effect

Until 2018, the Obama and Trump administrations had successfully avoided any congressional move to block U.S. support of the Saudi-Emirati bombing of civilian targets in Yemen, or the country’s air and naval blockade. That success was possible, at least in part, because the U.S. media largely ignored the mass starvation of the Yemeni people and unprecedented cholera epidemic these acts of aggression had wrought.

The media also failed to report on the United States’ direct role in that conflict.  From mid-2017 to mid-2018, MSNBC ran only a single story that mentioned the United States’ in-flight refueling of Saudi planes and its provision of intelligence for Yemeni bombing targets.

Nevertheless, some key members of Congress were well informed about the United States’ complicity in the Saudi coalition’s crimes. As early as March 2018, when Sens. Sanders and Lee first introduced the Yemen war powers resolution, a head count by the office of co-sponsor Chris Murphy indicated it would pass the Senate with a narrow majority.

Several of those votes were lost in May to legislation by Sen. Todd Young, R-Ind., and Sen. Jeanne Shaheen, D-N.H., which required the secretary of state to “certify” that Saudi Arabia was making efforts to end the war, increase access to humanitarian goods and “reduce harm to civilians.”

But this fall, a tragic event and dramatic revelations created new impetus for a Yemen war powers resolution: Washington Post journalist Jamal Khashoggi was killed and hard evidence emerged that Crown Prince Mohammed bin Salman and the Saudi government had ordered his murder and dismemberment over his critical coverage. The political impact of that story can hardly be exaggerated.  Whereas before the media had been reluctant to report on the war, they were suddenly eager to document its myriad atrocities, including the ongoing starvation of Yemeni children.

The pressure on President Donald Trump to abandon his unflinching support of the Saudi regime intensified. Administration officials knew full well the Saudi coalition was already planning to capture the key Yemeni port of Hodeida—the country’s lifeline for food imports and humanitarian goods. That assault was scheduled to begin on Nov. 3, and it would have further weakened the administration’s case against a war powers resolution if one were brought to the Senate floor. The administration also knew by late October that Democrats likely would be taking control of the House of Representatives, where Republican leadership had successfully employed legislative tactics to prevent even a congressional debate on the Saudi-led war efforts.

The Administration Adjusts Its Yemen Policy

Between Kushner’s personal ties to Crown Prince Mohammed and the lure of tens of billions of dollars in arms sales, the Trump administration remained wedded to the Saudi regime. But it was now forced to make adjustments in its policy to try to shore up the collapsing congressional support for the war. So Secretary of Defense James Mattis and Secretary of State Mike Pompeo issued a call on Oct.  30 for a cease-fire in Yemen and peace negotiations within 30 days.

A careful reading of Pompeo’s statement, however, reveals two key giveaways to the Saudi regime: It did not require the Saudis to halt their bombing until after the Houthis had halted missile strikes on Saudi and United Arab Emirates targets, and the Saudi coalition was only required to cease bombing “populated areas,” evidently leaving it free to hit targets outside urban concentrations.

There would be more to come. After discussions with the Trump administration, the Saudi government officially requested on Nov. 9 that the U.S. end the refueling of the coalition’s aircraft for its Yemen operations. The Saudi statement said the coalition had “increased its capability to independently conduct in-flight refueling in Yemen,” and had therefore requested, “in consultation with the United States,” the “cessation of in-flight refueling support.”

Experts maintained the Trump administration had compelled the Saudis and their UAE allies to accept less capability—especially as it pertained to longer-range strikes by UAE aircraft—for domestic U.S. political reasons.  Former National Security Council official Riedel, for one, commented that giving up U.S. refueling would make it harder for the Saudi coalition to “carry out strikes deep into Yemeni territory.”

All that elaborate maneuvering with the Saudis failed to influence the Senate, which voted, 63-37, in November to advance the Yemen war powers joint resolution. Prior to that vote, Pompeo and Mattis had briefed the Senate in an attempt to tamp down anger over the Khashoggi murder, attempting to sell the idea that American interests required U.S. support for the Saudi coalition’s war in Yemen. But senators who attended the briefing told reporters their arguments—especially regarding the crown prince and Khashoggi—had not been credible. If anything, Pompeo and Mattis had strengthened their determination to support the resolution.

In December, seven Republicans joined 49 Democrats in approving the Sanders-Lee resolution, 56-41, in a major rebuff to the entire foreign policy establishment. That vote was followed moments later with the unanimous approval of a separate resolution condemning the Saudi crown prince by name for Khashoggi’s grisly murder.

In a clear indication the Trump administration aimed to hold the line against a Yemen resolution, the Saudi coalition abruptly halted the Hodeida offensive it had begun 12 days earlier, almost certainly under U.S. pressure. The Saudis also agreed to participate in U.N.-brokered “consultation” that began in Sweden on Dec. 6 led by the United Nations special envoy to Yemen, Martin Griffiths.

Even before the conference had officially begun, Griffiths negotiated a swap of  2,000 to 3,000 prisoners held by the two sides. And on Dec. 13, Saudi Arabia and Yemen agreed to a cease-fire in Hodeida, where the fighting had been concentrated, although it soon broke down with mutual recriminations.

The Key to Yemen Peace?

The Trump administration’s official position, based on the notion that “limited support to member countries of the Emirati and Saudi-led coalition, including intelligence sharing, logistics, and, until recently, aerial refueling” did not constitute being “engaged in hostilities,” was that the resolution had no legal effect. But the activists and congressional staff who worked on the resolution are convinced that the administration’s frantic efforts to prevent its passage reveal just how powerful it will prove.

One Democratic congressional strategist involved in promoting the resolution acknowledged as much in an interview with Truthdig. “At the same time the Pentagon and the Trump administration were saying it would have no impact, they were scrambling to change the facts on the ground by unilaterally suspending air refueling,” the strategist said.

The strategist also admitted this “first assertion of war authorities by Congress” would “force the administration to retreat, and when the U.S. is no longer the steadfast patron of the Saudi coalition campaign, the Saudi coalition will be compelled to seek an urgent and immediate peace settlement.”

Robert Naiman, policy director at Just Foreign Policy, an activist membership organization that has been working to support the eventual passage of the Yemen resolution in both houses of Congress, agrees the resolution is bound to push the Saudis toward ending the war.  “I’ve always believed any kind of congressional vote that says no in a toothy way like the war powers resolution would be enough to force the administration and the Saudis to change policy,” he told Truthdig.

Naiman called the administration’s gambit to head off passage of the resolution “a political signal the whole world sees.” He said he believes “the political-diplomatic signal is even more important than direct military participation.”

The war’s swift conclusion appears all but inevitable. While Crown Prince Mohammed may be committed to final victory, the Saudi regime remains heavily dependent on U.S. political-diplomatic cover, as it has since the beginning of the bombing campaign in Yemen. Ironically, that political reality could now tip the balance toward peace.

via RSS http://bit.ly/2CO1k3D Tyler Durden

Is The End Of The Brutal War In Yemen Finally At Hand?

Authored by Gareth Porter via TruthDig.com,

When the new Congress convenes Jan. 3, it is expected to pass a House resolution upholding congressional war powers and ending all direct U.S. involvement in the Saudi coalition’s war in Yemen. But hopes remain high that H. Con. Res. 138 will help to end the Yemen war itself. Congressional strategists and activists who have been working on the issue believe passage of the war powers measure will force Saudi Crown Prince Mohammed bin Salman to the negotiating table.

Together, they are challenging the position of some former Obama administration officials who have warned the war powers resolution alone cannot bring the conflict to a close. Those former officials, led by Brookings Institution fellow Bruce Riedel, say that cutting off the Saudi pipeline of spare parts is the only way to prevent further airstrikes, which have been central to the Saudi war strategy.

Proponents of the war powers resolution, sponsored by Democratic Rep. Ro Khanna of California, argue the Saudis will not be able to continue the war without the political-diplomatic support of the United States, and the Yemen resolution will make dramatically clear the Saudis can no longer count on U.S. support. How the Senate came to pass a version of the Yemen resolution, co-sponsored by Sen. Bernie Sanders, I-Vt., Sen. Chris Murphy, D-Conn., and Sen. Mike Lee, R-Utah, and ratified in December by a vote of 56 to 41, would appear to lend support to their argument.

The Khashoggi Effect

Until 2018, the Obama and Trump administrations had successfully avoided any congressional move to block U.S. support of the Saudi-Emirati bombing of civilian targets in Yemen, or the country’s air and naval blockade. That success was possible, at least in part, because the U.S. media largely ignored the mass starvation of the Yemeni people and unprecedented cholera epidemic these acts of aggression had wrought.

The media also failed to report on the United States’ direct role in that conflict.  From mid-2017 to mid-2018, MSNBC ran only a single story that mentioned the United States’ in-flight refueling of Saudi planes and its provision of intelligence for Yemeni bombing targets.

Nevertheless, some key members of Congress were well informed about the United States’ complicity in the Saudi coalition’s crimes. As early as March 2018, when Sens. Sanders and Lee first introduced the Yemen war powers resolution, a head count by the office of co-sponsor Chris Murphy indicated it would pass the Senate with a narrow majority.

Several of those votes were lost in May to legislation by Sen. Todd Young, R-Ind., and Sen. Jeanne Shaheen, D-N.H., which required the secretary of state to “certify” that Saudi Arabia was making efforts to end the war, increase access to humanitarian goods and “reduce harm to civilians.”

But this fall, a tragic event and dramatic revelations created new impetus for a Yemen war powers resolution: Washington Post journalist Jamal Khashoggi was killed and hard evidence emerged that Crown Prince Mohammed bin Salman and the Saudi government had ordered his murder and dismemberment over his critical coverage. The political impact of that story can hardly be exaggerated.  Whereas before the media had been reluctant to report on the war, they were suddenly eager to document its myriad atrocities, including the ongoing starvation of Yemeni children.

The pressure on President Donald Trump to abandon his unflinching support of the Saudi regime intensified. Administration officials knew full well the Saudi coalition was already planning to capture the key Yemeni port of Hodeida—the country’s lifeline for food imports and humanitarian goods. That assault was scheduled to begin on Nov. 3, and it would have further weakened the administration’s case against a war powers resolution if one were brought to the Senate floor. The administration also knew by late October that Democrats likely would be taking control of the House of Representatives, where Republican leadership had successfully employed legislative tactics to prevent even a congressional debate on the Saudi-led war efforts.

The Administration Adjusts Its Yemen Policy

Between Kushner’s personal ties to Crown Prince Mohammed and the lure of tens of billions of dollars in arms sales, the Trump administration remained wedded to the Saudi regime. But it was now forced to make adjustments in its policy to try to shore up the collapsing congressional support for the war. So Secretary of Defense James Mattis and Secretary of State Mike Pompeo issued a call on Oct.  30 for a cease-fire in Yemen and peace negotiations within 30 days.

A careful reading of Pompeo’s statement, however, reveals two key giveaways to the Saudi regime: It did not require the Saudis to halt their bombing until after the Houthis had halted missile strikes on Saudi and United Arab Emirates targets, and the Saudi coalition was only required to cease bombing “populated areas,” evidently leaving it free to hit targets outside urban concentrations.

There would be more to come. After discussions with the Trump administration, the Saudi government officially requested on Nov. 9 that the U.S. end the refueling of the coalition’s aircraft for its Yemen operations. The Saudi statement said the coalition had “increased its capability to independently conduct in-flight refueling in Yemen,” and had therefore requested, “in consultation with the United States,” the “cessation of in-flight refueling support.”

Experts maintained the Trump administration had compelled the Saudis and their UAE allies to accept less capability—especially as it pertained to longer-range strikes by UAE aircraft—for domestic U.S. political reasons.  Former National Security Council official Riedel, for one, commented that giving up U.S. refueling would make it harder for the Saudi coalition to “carry out strikes deep into Yemeni territory.”

All that elaborate maneuvering with the Saudis failed to influence the Senate, which voted, 63-37, in November to advance the Yemen war powers joint resolution. Prior to that vote, Pompeo and Mattis had briefed the Senate in an attempt to tamp down anger over the Khashoggi murder, attempting to sell the idea that American interests required U.S. support for the Saudi coalition’s war in Yemen. But senators who attended the briefing told reporters their arguments—especially regarding the crown prince and Khashoggi—had not been credible. If anything, Pompeo and Mattis had strengthened their determination to support the resolution.

In December, seven Republicans joined 49 Democrats in approving the Sanders-Lee resolution, 56-41, in a major rebuff to the entire foreign policy establishment. That vote was followed moments later with the unanimous approval of a separate resolution condemning the Saudi crown prince by name for Khashoggi’s grisly murder.

In a clear indication the Trump administration aimed to hold the line against a Yemen resolution, the Saudi coalition abruptly halted the Hodeida offensive it had begun 12 days earlier, almost certainly under U.S. pressure. The Saudis also agreed to participate in U.N.-brokered “consultation” that began in Sweden on Dec. 6 led by the United Nations special envoy to Yemen, Martin Griffiths.

Even before the conference had officially begun, Griffiths negotiated a swap of  2,000 to 3,000 prisoners held by the two sides. And on Dec. 13, Saudi Arabia and Yemen agreed to a cease-fire in Hodeida, where the fighting had been concentrated, although it soon broke down with mutual recriminations.

The Key to Yemen Peace?

The Trump administration’s official position, based on the notion that “limited support to member countries of the Emirati and Saudi-led coalition, including intelligence sharing, logistics, and, until recently, aerial refueling” did not constitute being “engaged in hostilities,” was that the resolution had no legal effect. But the activists and congressional staff who worked on the resolution are convinced that the administration’s frantic efforts to prevent its passage reveal just how powerful it will prove.

One Democratic congressional strategist involved in promoting the resolution acknowledged as much in an interview with Truthdig. “At the same time the Pentagon and the Trump administration were saying it would have no impact, they were scrambling to change the facts on the ground by unilaterally suspending air refueling,” the strategist said.

The strategist also admitted this “first assertion of war authorities by Congress” would “force the administration to retreat, and when the U.S. is no longer the steadfast patron of the Saudi coalition campaign, the Saudi coalition will be compelled to seek an urgent and immediate peace settlement.”

Robert Naiman, policy director at Just Foreign Policy, an activist membership organization that has been working to support the eventual passage of the Yemen resolution in both houses of Congress, agrees the resolution is bound to push the Saudis toward ending the war.  “I’ve always believed any kind of congressional vote that says no in a toothy way like the war powers resolution would be enough to force the administration and the Saudis to change policy,” he told Truthdig.

Naiman called the administration’s gambit to head off passage of the resolution “a political signal the whole world sees.” He said he believes “the political-diplomatic signal is even more important than direct military participation.”

The war’s swift conclusion appears all but inevitable. While Crown Prince Mohammed may be committed to final victory, the Saudi regime remains heavily dependent on U.S. political-diplomatic cover, as it has since the beginning of the bombing campaign in Yemen. Ironically, that political reality could now tip the balance toward peace.

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Iran’s Navy Plans To Upgrade Speedboats With Stealth Technology To Counter US Navy

Iran’s Islamic Revolutionary Guard Corps (IRGC) navy commander on Monday criticized the presence of US Navy warships patrolling the Persian Gulf and said the IRGC is preparing to upgrade its speedboats with stealth technologies and new missile launchers as tensions increase between Tehran and Washington near the Strait of Hormuz.

“The IRGC’s navy attaches great importance to high speed and maneuverability of its boats in the missions,” Alireza Tangsiri, the top IRGC Navy Commander, was quoted as saying by Press TV.

“We are planning to equip the IRGC’s speedboats with radar-evading stealth technology while increasing their speed in order to conduct their missions,” he said, adding that “new missiles moving at very high speed are being installed on the IRGC’s naval vessels.”

According to the Xinhua News Agency, the IRGC has some of the fastest speedboats in the world. Tangsiri said, “we are working on speedboats with the speed of 80 knots (148.16 km) (per hour) and beyond that.”

The IRGC commander pointed out that the arrival (Dec. 21) of the USS John C. Stennis, a nuclear-powered supercarrier, through the Strait of Hormuz of the Persian Gulf, was met with IRGC vessels shadowing the strike group. 

Tangsiri said, “we are constantly monitoring them [US Navy] and have full command on these foreign forces” as they move through the Gulf.  “The presence of foreign forces in the region disturbs security, noting that regional countries are capable of guaranteeing their security through staging joint military maneuvers and boosting cooperation,” he added.

On Sunday, Chairman of the Chiefs of Staff of the Iranian Armed Forces Mohammad Baqeri said that the US is inciting new fears in the Gulf through its presence in the region.

“The Americans have always sowed insecurity wherever they had a presence,” Baqeri told reporters. 

He stressed that the Gulf countries are capable of ensuring security on their own and the US presence in the region is creating more uncertainties.

Earlier in the weekend, Iran’s Foreign Minister Mohammad Javad Zarif said that US warships in the Gulf are “illegal.”

“Increased presence of Americans in the Gulf has always posed threats to the regional states,” he said.

The aircraft carrier arrived in the Gulf after Washington re-imposed sanctions on Iran’s oil exports in November and pulled out of the 2015 Iranian nuclear deal earlier in the year.

To make matters worse, the IRGC recently held a significant war drill in the Gulf, launching an “offensive” maneuvers against enemy forces for the first time.

During that drills, Deputy Chief of Iran’s Army for Coordination Habibollah Sayyari said that Iran would never allow US warships to sail near its territorial waters.

Besides, “they cannot take any measure against us, because we are so prepared and have enough capabilities to stand up to such a publicity stunt,” Sayyari said.

The Strait of Hormuz is the leading maritime route through which Persian Gulf exporters— Bahrain, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates—ship their oil to international markets. The strait is roughly 21 miles across at its narrowest point, bordered by Iran and Oman.

The Energy Information Administration estimates that roughly 17 million barrels of oil per day, 35% of global oil exports, flows through the strait. 

While crude has crashed more than 38% from the early October highs of 75, the probability of a geopolitical event in the Gulf has been elevated with not just the US Navy sailing warships through, but the idea that Iran is upgrading its speedboats with the intentions of starting a conflict with the US.

Perhaps, the new instabilities in the Gulf and around the Strait of Hormuz are all that is needed to have oil traders worry about the global oil choke point, and possibly lead to a bottoming in oil prices.

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Alhambra: Nothing To See Here, It’s Just Everything

Authored by Jeffrey Snider via Alhambra Investment Partners,

The politics of oil are complicated, to say the least. There’s any number of important players, from OPEC to North American shale to sanctions. Relating to that last one, the US government has sought to impose serious restrictions upon the Iranian regime. Choking off a major piece of that country’s revenue, and source for dollars, has been a stated US goal.

In May, the Trump administration formally withdrew from the Joint Comprehensive Plan of Action, known otherwise as President Obama’s “Iran deal.” It was widely expected that pulling out would lead to harsh sanctions against any country continuing to trade using Iranian crude oil.

At the beginning of November, the US government formally re-instated those sanctions. In a surprising compromise, it did issue a number of waivers to countries like South Korea, Greece, Japan, and even China (among several others). That meant a good bit of Iran supply would remain available on global markets as a substitute source.

It is becoming 2018’s version of the 2014 “supply glut”, a benign or nearly so excuse for oil’s otherwise shocking crash. From Bloomberg only last week:

Just in late September, some traders were predicting that global oil prices would hit $100 a barrel over the following months. Their forecasts were based on the prospect of a supply crunch due to U.S. sanctions on Iran that went into effect in November. However, America’s surprise decision to grant waivers from its restrictions to some nations sparked a collapse in crude.

On the surface, the story does seem to check out; the US government did, in fact, keep Iran open for a little while longer. That additional future supply would have to have been factored into the ongoing oil price, further pressure to the downside.

But did it “spark a collapse in crude?” Nope, a demonstrable fallacy.

Oil prices peaked on October 3 and by the end of that month the curve was already weeks in contango. You could argue that global oil traders were counting on waivers and already factoring Iran into the equation, but again they were a “surprise decision.”

The drop in WTI and the chaos in oil markets (benchmark spreads) was more than a month old by then, and it’s been a straight line (almost) from the start of the crash.

In other words, Iran came along long after the market had viciously turned. Why is it so hard for people to accept that the problem could be rethinking demand worldwide?

It is, for many, impossible to believe that central bankers have it all wrong therefore the constant appeal of these sorts of ridiculous excuses. Mario Draghi says Europe is booming, or was, and if it isn’t now it’s only because of “transitory” factors to be cleared up soon enough. Jerome Powell can’t use the word “strong” frequently and emphatically enough in his commentary.

What do these guys know? A disorderly oil crash is uniformly associated with the opposite economic (and market) case. There is nothing benign about such open and obvious disorder.

It’s not just the oil warning, though; there has been a predictable proliferation of denial, in my estimation just a bit more intense than the last outbreak only a few years ago. This is related to 2017’s inflation hysteria, the very flipside to it.

The idea of “globally synchronized growth” was deeply emotional. So many just wanted to believe that the upturn was actual recovery, and that the global economy had finally hit a growth patch after a decade without any. People still cling to the idea that central bankers are the “best and brightest” and therefore all that was missing was sufficient time.

The technocracy could never be denied its success. One full decade seemed to be the max allowable, therefore 2018 just had to be the one.

Except, trading last year produced one big warning after another, these accelerating and growing noticeably in the last half particularly the last two months. Rather than take account for them all, the excuses are always limited to trying to discount each warning individually. That’s a big clue about what’s behind them; emotion not rational analysis.

These are pure rationalizations based on pure denial. The oil crash must be a supply glut, but what about that ungodly repo rate spike? Well that’s just 2a7 year-end window dressing (yes, thanks L. Bower, some are actually trying to dismiss a nearly 300 bps spread in GC repo as no big deal, mere technicals).

So, why does that repo spike oddly connect to exactly what eurodollar futures are saying?

Or inflation expectations?

Swap and credit spreads?

UST futures (above) and the “strong worldwide demand for safe assets” that has intensified despite every major media outlet on earth declaring for more than a year how UST’s and German bunds are poised right on the precipice for a BOND ROUT!!!! of biblical proportions?

This is very comprehensive parade of deep, crucial markets all saying the same thing together – they really don’t know what they are doing. The world turned the wrong way (again), a surprise only to central bankers and those who still somehow believe in them.

That’s what always gets left out. Even if the repo spike, for example, was actually a product of 2a7, it still doesn’t get you to 300 bps. That level is alarming even in isolation. But it’s not in isolation, is it? You can’t (honestly) look at a market, even stocks, without appreciating corroboration and consensus for only darker and darker interpretations – all starting with liquidity meaning global money (including collateral flow).

If it was one thing you might listen about supply gluts or 2a7; when it’s everything, you can only ask yourself what’s the point? An unbiased review of all these markets (and more) paints a very grim view of where things already stand today. From this perspective, repo and WTI contango make perfect sense, neither really needing much explanation.

An oil crash or repo rate spike is intuitively self-explanatory, especially to these levels.

But Jay Powell is unshakable in his confidence. Therefore, Iran and supply glut. Or 2a7. Mixed signals. Etc. etc. etc. Nothing bad can ever happen, even all the bad things that keep happening.

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