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The Republican Tax Plan Will Crush These Housing Markets

November 8, 2017 Tyler Durden 0

For the past few weeks, Chuck Schumer and Nancy Pelosi have screamed to anyone who would listen that the GOP tax plan is nothing more than a tax break for millionaires and an attack on middle class working families.  But, as the Wall Street Journa…

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Fourth Turning’s Neil Howe: Why Millennials Aren’t So Unique

November 8, 2017 Tyler Durden 0

Authored by Marianne Brunet via AdvisorPerspectives.com,
The conventional wisdom is that Millennials are a generation with unique needs and buying habits, but Neil Howe says that they are very similar to the Greatest Generation.
Howe, who coined the te…

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NSA Whistleblower Says Trump Pushed Meeting With Pompeo

November 8, 2017 Tyler Durden 0

As we reported yesterday, President Donald Trump is receiving flack from hysterical liberals for reportedly advising CIA Director Mike Pompeo to meet with former senior NSA official Bill Binney, whom the media has labeled a conspiracy theorist for his belief that Russia wasn’t responsible for hacking the DNC – or at least, if it was, it was the work of a deep-cover agent – because the files, according to Binney, were manually loaded onto a thumb drive, meaning the theft was likely the work of a disgruntled insider.

Binney discussed the meeting during an appearance on NBC, where he confirmed that Trump was probably made aware of his theory by watching one of his appearances on Fox News.

“He’s trying to find some factual evidence,” said Bill Binney, a former code-breaker at the National Security Agency.

Binney, a widely respected NSA whistleblower, left the agency in 2000 and has made claims that the NSA is capturing and storing nearly every US communication.

Binney told NBC News that Pompeo informed him that the CIA director took the meeting at the urging of the president.

Mike Pompeo

In a statement, a CIA spokeswoman did not dispute that, but declined to comment.

“The Director stands by and has always stood by the January 2017 intelligence community assessment,” on Russian election interference, spokeswoman Nicole de Haay said.

She added, “The director has been adamant that CIA officers have the time, space and resources to make sound and unbiased assessments that are delivered to policy makers without fear or favor.”

The intelligence community released a multilateral report in January 2017 concluding that Russia had sought to interfere in the 2016 election, which was won by Trump in a historic upset. One of the tactics, the intelligence community alleged, was the hack of the DNC, which was a massive public relations embarrassment for Clinton and eventually led to the resignation of former DNC Chairwoman Debbie Wasserman Schultz.

Trump has repeatedly criticized the intelligence community and claimed its conclusion is unfounded. And Pompeo, a former Army officer and Harvard Law School graduate who gives Trump his intelligence briefing nearly every day, is suspected of kowtowing to Trump in his tepid approach to the issue.

Last month, the CIA had to correct Pompeo’s erroneous statement that the intelligence assessment found that the Russian interference campaign did not alter the outcome of the election. No such conclusion was made.

NBC pointed out that it is extremely unusual for a CIA director to meet with someone like Binney, who for years has accused US intelligence agencies of subverting the constitution and violating the civil rights of Americans. However, Binney – while a controversial figure in the US – has been praised abroad as a whistle blower and truth teller.

However, the meeting to discuss the narrative that directly contravenes the findings of the US intelligence community was so productive that Pompeo is already arranging further meetings between NSA and FBI officials and Binney to discuss his analysis. Binney said two unnamed CIA analysts accompanied Pompeo during the meeting at CIA headquarters.

Binney reportedly also raised the death of DNC staffer Seth Rich as a suspicious, given its proximity to the release of the hacked documents. There has been speculation that Rich was the one who leaked the emails.

Binney said he did not discuss with Pompeo his longstanding allegations that U.S. intelligence agencies have been acting illegally. Binney said he voted for Trump, because he considered Democrat Hillary Clinton “a war monger.

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Banks Warn London Facing Brexit “Point Of No Return”

November 8, 2017 Tyler Durden 0

During his trip to London this week, US Commerce Secretary, Wilbur Ross, wasn’t only defending revelations in the Paradise Papers that he’d invested in a shipping company with ties to the Putin family. He also attended a “closed-door meeting” with executives from JPMorgan, Goldman, HSBC and other banks. The meeting took place over lunch in the exclusive St James’s District (hedge fund land these days) at Wiltons restaurant. Wiltons, if you’re not familiar with it, started as an oyster stand in 1742 before developing a clientele of English aristocrats and foreign dignitaries and latterly, bankers. Ian Fleming, creator of the James Bond novels and bon vivant,  listed it as one of his top 10 restaurants in the 1950s.

During lunch, the banks warned Ross that time is running out for the UK government. The failure to provide clarity on Brexit means that they will be forced to start moving jobs out of London. According to the FT:

A group of large financial institutions with big London operations, led by Wall Street’s pre-eminent banks, have told the US commerce secretary that Britain’s unstable government and slow progress in Brexit planning may force them to start moving thousands of jobs out of City in the near future. The warnings came on Friday during a closed-door meeting between executives from the banks, which included JPMorgan Chase, Goldman Sachs and HSBC, and Wilbur Ross during the US commerce secretary’s visit to London, according to people briefed on the discussions.

 

Those briefed on the talks, which were held over lunch at Wiltons restaurant in London’s exclusive St James’s district, said the banks were particularly concerned by the failure of Britain to provide clarity over whether it will secure a transition deal to smooth the changing regulatory regime after the UK leaves the EU. They warned they had even less clarity over what a final Brexit deal will look like. Absent clarity from the government about post-Brexit plans, the executives said jobs would move back to the US or to other European capitals as banks begin to enact their worst-case contingency plans, the sources said. ”There was broad discussion around the lack of progress in the Brexit talks and some discussion around various political scenarios,” one person briefed on the talks said.

Not surprisingly the banks declined to comment when contacted by the FT, which also discovered that Morgan Stanley failed to show up to the gathering. Shame on it. The FT’s anonymous sources emphasized that bank executives communicated a greater level of anxiety regarding Brexit negotiations than in the past. Decisions on job relocations are imminent, as FT explains:

US banks have been among the loudest critics of Britain’s decision to leave the EU since last year’s referendum, with Goldman boss Lloyd Blankfein recently tweeting he anticipated “spending a lot more time” in Frankfurt post-Brexit. But the recent warnings in private meetings with Mr Ross — as well as similar soundings taken by the City of London Corporation, the capital’s local government, on a fact-finding mission to Wall Street and Washington — included a level of urgency not seen in previous criticisms, those present said. The banks warned Mr Ross that a “point of no return” is fast approaching, when they must start moving jobs, capital and infrastructure in order to meet the March 2019 Brexit deadline if no transitional deal is secured.

In London’s City A.M. financial newspaper yesterday, the City of London’s policy head, Catherine McGuinness, highlighted rising nervousness in the US financial sector about Brexit.

City of London Corporation’s policy chief Catherine McGuinness was told the sector had moved beyond its initial “surprise” and “curiosity” at the events unfolding on this side of the Atlantic, with fear creeping in that no real movement had been made since last summer’s referendum. “The message was that this is taking too long and it may have implications beyond your borders,” McGuinness said. “[They] are becoming nervous,” she said. “It wasn’t just curiosity, it was concern at the lack of progress that we have been making, and nervousness that it had implications beyond Europe’s borders in terms of causing disruption to markets.”

 

While New York expects to benefit from some of the disruption, the overriding sense was that Brexit could cause global ripples if progress failed to materialise, she added. Fears that the UK would simply “crash out” were also growing. She was speaking after a three-day fact-finding mission, where she met US Treasury officials, as well as Commodity Futures Trading Commission (CFTC) chairman Chris Giancarlo, and representatives from the International Swaps and Derivatives Association (ISDA). McGuinness noted that the recent IRSG report, which set out a blueprint for how financial services might continue to do business after Brexit, had been welcomed in the States. But she acknowledged that progress on the matter back home was painfully slow, saying she had “very little sense” of when – or if – a financial services position paper could be expected from the government.

Back to the lunch between Ross and the bankers, the one positive note which emerged for the UK government is that the prospect of a Labour government headed by Jeremy Corbyn fills them with dread. That’s scant consolation, however, as the banks are believed to have drawn up contingency plans to shift 10,000 jobs out of London in the short-term. This number was confirmed by the Bank of England last week. However, the FT notes a much larger exodus is possible if the government fails to set up a transitional deal as part of Brexit.

Sam Woods, deputy governor (of the Bank of England), said that a longer-term 75,000 job-loss figure cited in a previous report by Oliver Wyman, the consultancy, was “plausible”. Mr Woods also said that a transitional deal was an asset whose value diminished through time, as banks scrambled to get in place for March 2019.

Still, we wonder how sympathetic to London’s Brexit challenges Ross was during the lunch. After all, this is the man who said last December that Brexit was a “God-given opportunity” for other countries to take business away from the UK. Finally, it also crossed our minds as to who picked up the bill? We doubt that it was Ross, or Deutsche Bank, if it was invited. Our guess is Goldman, but what was the catch?

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British Woman Faces Execution In Egypt For Bringing Painkillers For Her Husband’s Bad Back

November 8, 2017 Tyler Durden 0

Authored by Ian Miles Cheong via The Daily Caller,
A British woman has been arrested upon her arrival in Egypt for bringing a box of painkiller medication into the country for her husband’s back pain. Now she faces the possibility of execution.

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700 Years Of Data Suggests The Reversal In Rates Will Be Rapid

November 8, 2017 Tyler Durden 0

Have we been lulled into a false sense of security about the future path of rates by ZIRP/NIRP policies? Central banks’ misguided efforts to engineer inflation have undoubtedly been woefully feeble, so far. As the Federal Reserve “valiantly” raises short rates, markets ignore its dot plot and yield curves continue to flatten. And thanks to Larry Summers, the term “secular stagnation” has entered the lexicon.  While it sure doesn’t feel like it, could rates suddenly take off to the upside?

A guest post on the Bank of England’s staff blog, “Bank Underground”, answers the question with an unequivocal yes. Harvard University’s visiting scholar at the Bank, Paul Schmelzing, normally focuses on 20th century financial history. In his guest post (see here), he analyses real interest rates stretching back a further 600 years to 1311. Schmelzing describes his methodology as follows.

We trace the use of the dominant risk-free asset over time, starting with sovereign rates in the Italian city states in the 14th and 15th centuries, later switching to long-term rates in Spain, followed by the Province of Holland, since 1703 the UK, subsequently Germany, and finally the US.

Schmelzing calculates the 700-year average real rate at 4.78% and the average for the last two hundred years at 2.6%. As he notes “the current environment remains severely depressed”, no kidding. Looking back over seven centuries certainly provides plenty of context for our current situation, where rates have been trending downwards since the early 1980s. According to Schmelzing, we are in the ninth “real rate depression” since 1311 as shown in his chart below. We count more than nine, but let’s not be picky.

Furthermore, he believes that we are still locked into a 500-year downward trend.

Upon closer inspection, it can be shown that trend real rates have been following a downward path for close to five hundred years, on a variety of measures. The development since the 1980s does not constitute a fundamental break with these tendencies.

Now to the useful bit, Schmelzing looks at how these “real rates depressions” ended. The chart below shows the path of real interest rates in each reversal period following the trough.


He calculates that the average reversal has been 315 basis points within 24 months.

Most reversals to “real rate stagnation” periods have been rapid, non-linear, and took place on average after 26 years. Within 24-months after hitting their troughs in the rate depression cycle, rates gained on average 315 basis points, with two reversals showing real rate appreciations of more than 600 basis points within 2 years.

While we’d rather he ignored tainted “maestro”, Schmelzing states that there is “solid historical evidence” to support Greenspan’s view that real rates will rise “reasonably fast” once they turn. In Schmelzing’s opinion, and we would broadly agree, the best analogy in “recent” times for today’s situation is the Long Depression that followed the Panic of 1873.

Most of the eight previous cyclical “real rate depressions” were eventually disrupted by geopolitical events or catastrophes, with several – such as the Black Death, the Thirty Years War, or World War Two – combining both demographic, and geopolitical inflections. Most cyclical real rate depressions equally coincided with inflation outperformances. But for a minority of cycles, economic fundamentals were decisive, and exhibited both excess savings and subdued inflation. The prime example – and likely the closest historical analogy to today’s “secular stagnation” – is represented by the global “Long Depression” of the 1880s and 1890s. Following years of a global railroad investment frenzy, and global overcapacity indicators inflecting in the mid-1860s, the infamous “Panic of 1873” heralded the advent of two decades of low productivity growth, deflationary price dynamics, and a rise in global populism and protectionism.

Low rates in the wake of a financial crisis, lack of productivity growth, rising populism, etc, all strike a chord with our current circumstances, obviously. Going into more detail about the exit from the real rates depression of the 1880s-1890s, Schmelzing emphasises a rebound in productivity, stronger wage inflation and monetary expansion.

What ended the Long Depression? Labor productivity bottomed out in 1892-3, prior to the discovery of gold at the Klondike, and the associated monetary expansion. Wage inflation started outstripping productivity increases as early as 1885, leading the recovery in general inflation. And US equities finally bounced back from their 15-year lows with the Presidential election of William McKinley – a Republican pro-business protectionist – in November 1896. In other words, there is strong evidence suggesting that the last “secular stagnation cycle” started fading relatively autonomously after just over two decades following the key financial shock, not requiring the aid of decisive fiscal or monetary stimulus.

We find his conclusion, that a rapid, non-linear recovery in real rates can occur without any “decisive” events or policy, almost counter-intuitive. It doesn’t feel like it’s about to happen, but maybe it didn’t in the 1890s either. Indeed, maybe the best analogy for rates today is the proverbial beach ball held under water.

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Lebanon – The Next Front In The Great Gas War

November 8, 2017 Tyler Durden 0

Via Golem XIV’s blog,

The Great Gas War has already two distinct fronts: The now relatively quiet Northern Front in Ukraine and the Southern Front in Syria in which the Western empire has been losing. It looks to me that Lebanon is being targeted as the next front, where the West hopes its loses might be recouped.

Yesterday, November 6th,  Reuters reported,

Saudi Arabia said on Monday that Lebanon had declared war against it because of attacks against the Kingdom by the Lebanese Shi‘ite group Hezbollah.

This comes after Israel, Saudi’s long time though largely un-offical best friend in the region,  has been very publicly preparing to renew its own war with Lebanon – or more accurately with Hezbollah.  As the American news journal Newsweek put it recently,

ISRAEL PREPARES FOR ANOTHER WAR WITH HEZBOLLAH AS IDF PRACTICES LEBANON INVASION.

Why now and why Lebanon?  Well the rulers of Saudi, a Sunni dominated country, will tell us that it is because Hezbollah is a Shia terrorist organisation. “Hezbollah” literally means the “Party of Allah” or “Party of God”.  Saudi Gulf affairs minister Thamer al-Sabhan yesterday pointedly referred to Hezbollah as, “the Lebanese Party of the Devil”.  Saudi is not alone of course, Hezbollah has also been listed as a terrorist organisation by America, Israel, the Arab League, the UK and the EU. It is also, however, part of the popular government of Lebanon having seats in its parliament.

I suggest, however, a powerful reason that a new war with Hezbollah may be in the offing is because Lebanon is the next link in any gas pipeline that could potentially bring Iranian Gas to Europe. That was the reason the West decided to “liberate” the Syrian people and it will be why they decide to enforce the same salvation upon the people of Lebanon. Having failed to liberate the Syrians, Saudi, the West, its Sunni Gulf allies and Israel will now see if they can succeed in blocking any Iranian gas ambitions by liberating the Lebanese from their own government.  I would not be surprised to hear quite soon from opposition groups vocally denouncing the government or at least Hezbollah. I expect spokes people from those groups to suddenly get a global platform along-side American and regional supporters such as Saudi.

When I look at Saudi I can’t help but notice that it has , all in a short space of time, begun wars in neighbouring Yemen and Syria, and declared first Qatar and now Lebanon supporters of terror if not actually themselves terrorists. Saudi has gone from a nation surrounded by allies or at least states with whom it had basic diplomatic relations, to a nation surrounded by enemies.  It begins to remind me of Israel in that respect.

Gas of course is not the be all and end all. In many ways it is a surface marker, the means for regional and global struggles for political power and influence.  For Saudi it is the basis of its struggle for regional supremacy with Qatar. For America it is the regional marker for its proxy struggle with Russia for political dominance and for control over gas supplies to Europe.  America has sided with Saudi. Russia and China have sided with Qatar.  Qatar struck a decisive blow for dominance and for a new Qatar focussed power structure when it opened the region’s only clearing house for settlement of Gas contracts in Yuan.

I see the political turmoil inside Saudi as a struggle between those who see the House of Saud’s only hope for a future to be to remain firmly aligned with America and therefore by extension, with Israel, versus those who might consider switching or at least splitting their allegiance so as to move closer to Russia/China. A move which might be correct but which would concede to Qatar some large portion of what has been up till now Saudi’s pre-eminence.

Wars in Yemen, Syria and soon Lebanon make the divide between these two possible futures for The House of Saud, very sharp.

For Israel it will mean war and troops on the ground. America will certainly help in the air but Israel will shed blood on the ground.

What will Russia do? I doubt it will put troops into Lebanon. But I could very easily see it extending in to Lebanon the air support it has deployed in Syria. I could see Iran being tempted to send troops or at least ‘advisors’ or perhaps just ‘allow’ zealots who want to go, to do so. And that itself may be part of what some in America would like – tempt Iran into lending support and then declare anew that Iran is, pointing at new evidence,  a state sponsor of international terror.  America has desired a confrontation with Iran for a long time and want a new excuse.

The Great Gas War has not finished. I suggest it is about to open a new front. A front that could ignite a wider conflict.

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Goldman’s Asset Arm Takes Big Hit On Venezuelan Bond Bloodbath

November 7, 2017 Tyler Durden 0

The fallout from the Venezuelan bond restructuring has claimed a major victim in Goldman Sachs Asset Management, or rather some of the “muppets” who trusted Goldman to invest their money. However, the route which led Goldman to losing a chunk of client money wasn’t just a case of bad judgement, being riddled with the usual mixture of greed, questionable ethics and government intervention. As we detailed in “Goldman Accused Of Funding Maduro’s Dictatorship”.

Goldman controversially purchased $2.8 billion of 2022 bonds in May 2017 in the state-owned oil producer PDVSA, for about $865 million – or about 31 cents on the dollar. This prompted Julio Borges, President of the National Assembly and head of Venezuela’s opposition, to accuse Goldman of “aiding and abetting the country’s dictatorial regime.” Borges threatened that any future democratic government would not recognise or pay on the bonds. In true Goldman fashion, however, the deal was just too lucrative to pass up, or so it seemed at the time, as Goldman paid a then 30% discount to other Venezuelan bonds with a similar maturity.

 

Goldman’s ”defence” was that it did not buy the bonds directly from PDVSA, consequently it did not transfer funds directly to the Venezuelan regime.

To make matters worse, when the Trump White House extended sanctions against Venezuela over the Summer, including a ban on trading Venezuelan debt, Goldman’s bonds were mysteriously exempt. As we argued here.

“the logic is that if Goldman was forced to liquidate the bonds, or worse was stuck holding them as Venezuela went bankrupt, it would take a huge hit on the nearly $3 billion notional position. As such, Goldman’s advisors to Trump made it quite clear that any sanctions against Venezuela would have to be Goldman Sachs revenue neutral first and foremost. That’s precisely what happened.”

We have to acknowledge, however, that the next comment of ours was only half correct.

“Of course, Venezuela’s default is just a matter of time, but it won’t take place before Goldman dumps its bond holdings to some unwitting retail investor or some German widows and orphans.”

It turns out that Goldman had only dumped part of its holdings prior to the expected default, and is sitting on a sizeable loss, as the FT explains.

Ricardo Penfold, a senior portfolio manager at Goldman Sachs Asset Management, earlier this year swooped on a big slice of a bond issued by PDVSA, Venezuela’s state oil company, people familiar with the matter say. Mr Penfold paid $865m for bonds with a face value of $2.8bn — a price of just under 31 cents on the dollar — reflecting the elevated risks of a default even at the time. While GSAM has since sold off chunks of the bond, it was still listed as the single biggest overall owner of the PDVSA bond maturing in 2022, with a face value holding of $1.3bn at the end of the third quarter. But with Thursday’s announcement that Venezuela would seek to restructure all its foreign bonds, the bond is now trading at 25 cents on the dollar, down from 29 cents at the start of last week. That would translate into a paper loss of $54m in just five days if GSAM has not reduced its stake since the end of the third quarter…

 

GSAM is listed as the single biggest overall owner of PDVSA debts, according to Bloomberg data based on fund filings, with $1.8bn of face value holdings.

 

A Goldman spokesman said: “We are monitoring this situation closely.” The summer deal was particularly controversial, attracting condemnation from the Venezuelan opposition and US senator Marco Rubio, because it in effect constituted a cash infusion for the increasingly autocratic government led by Nicolás Maduro. GSAM bought the bond via an intermediary, but it was sold by the central bank.

As we said, and other analysts agree, Goldman should have seen it coming. From the FT article.

Many investors who had been betting that Venezuela would manage to avoid defaulting are nursing losses. Venezuelan bonds suffered a drubbing in the wake of Mr Maduro announcing plans to restructure the country’s $89bn debt pile. “This has been a well-telegraphed train wreck,” said Robert Koenigsberger, head of Gramercy, an emerging markets-focused asset manager.

 

“There are reasons to expect that prices will go even lower from here.” GSAM and other big Venezuelan bond investors — such as Fidelity, T Rowe Price and Ashmore — could still end up making money from their Venezuelan bond purchases, as analysts expect the ultimate “recovery value” on Venezuelan debt to be higher than where the bonds are trading at now.

While the article suggests the possibility of a more favourable exit for Goldman in due course, the restructuring of Venezuelan debt is not going to be a “plain vanilla” variety. Indeed, it might be more complicated than any previous sovereign debt restructuring. The irony for Goldman, as the FT explains, is that the extension of sanctions by the US Government will make it much harder for the bank to recover its losses.

Venezuela’s plans to restructure its debts are riddled with complications. The mess of bonds issued by the country and PDVSA are hard to disentangle, and oil exports — the country’s sole financial lifeline — are vulnerable to seizures from litigious creditors. However, the biggest wrinkle is the US government’s sanctions on Venezuela, unveiled in August after the GSAM deal. In practice, they prohibit any US institutions from involvement in any Venezuelan debt restructuring.

 

“Sanctions will prevent a conventional exchange offer,” said Lee Buchheit, a senior partner at Cleary Gottlieb, who has represented a series of countries when they restructure their debts. “It’s really not clear what Maduro has in mind, or whether he even has anything in mind.”

 

Venezuela owes about $750m in bond arrears and is facing a further $965m of interest payments over November and December, calculates Patrick Esteruelas, global head of research at Emso Asset Management. If Caracas has run out of money — and Russia or China decline to extend more loans to Venezuela — it will have to default. But as long as US sanctions remain in place, this will push Venezuela into financial purgatory of a protracted, unresolvable debt default. “In a world where you can’t pay and you can’t restructure, all you can do is default,” Mr Koenigsberger said. “Even without the sanction, this would have been an exceptionally tough debt restructuring. It will now be exponentially harder than anything we have seen before. And I don’t think that is priced in yet.”

It will be tragically amusing to watch what extraordinary measures the heavily Goldman-influenced White House takes to bail the bank out of its latest predicament.

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Making Sense Of Saudi’s ‘Game Of Thobes’

November 7, 2017 Tyler Durden 0

Authored by Jamal Elshayyal via Al-Jazeera,

Was Saturday a “Red Wedding” moment for the Kingdom of Saudi Arabia? As the plot thickens in Riyadh, here’s a roundup of the chatter on the streets…

It started off with the resignation of Lebanese Prime Minister Saad Hariri, a clearly orchestrated move produced and executed by his paymasters in Riyadh.

Hariri announced on a Saudi-owned channel from the Saudi capital that he was resigning his post in protest at foreign intervention in Lebanon‘s domestic affairs. The irony was lost on him. 

The ostensible reason he gave, as he invoked his late father’s name, was that he too is threatened with assassination. 

As the day turned into evening, there were reports of explosions being heard close to the King Khalid International Airport in Riyadh. It transpired that Houthi rebels (linked to Iran and allied with former President Ali Abdullah Saleh, who is partially linked to the United Arab Emirates) had fired at least one ballistic missile from Yemen towards Riyadh. It put an exclamation point on the fact that the war in Yemen is far from over – more than two years since Saudi Arabia launched operation “Decisive Storm”.

As the clock inched to midnight another bombshell was dropped, this time by the Saudis: A royal decree ordering the arrest of several princes, billionaires, and notable figures, as well as the sacking of senior government officials. Some were the sons of the late King Abdullah. One was the head of the Saudi National Guard. 

All three of these developments will have seismic implications, not just in Saudi Arabia, but in the region and beyond.

The resignation of Hariri, or sacking by his Saudi sponsors, should sound the alarm bells for any government that doesn’t want to see another war erupt in the region.

A lot of chatter involved Israel.

It’s no secret that Israel has been conducting military exercises on its northern front for several months now. While Hezbollah has been busy helping prop up the Assad regime in Damascus, Tel Aviv has been developing its missile defence systems. Sooner or later, it will want to test those in real-life scenarios, as the logic would have it. 

Forcing Hariri to quit the government would help Israel frame any aggression against Lebanon as an attack on Iranian proxies.

With Gaza politically neutralised for now, following Hamas‘ handover of power to the Palestinian Authority, Israel could very well see this as an optimal time to attack. Such an attack would also provide a perfect opportunity for the West to test the new Saudi leadership’s “moderate” credentials: Would it cheer Israel on?

In Yemen, the war has cost the Saudi economy hundreds of millions of dollars. This war, launched by Crown Prince Mohammed Bin Salman to restore Sanaa’s legitimate government and put Iran in check, has failed to do either. But it has succeeded in killing thousands of innocent people, displacing millions, and helping Tehran position itself as the defender of the oppressed in the Middle East.

The targeting of Riyadh could push the young prince to be even more reckless and destructive in his ongoing expedition in Yemen. 

What’s not so clear is the motive behind the mass arrests and sackings that took place in the wee hours of Sunday morning.

Removing the head of the National Guard and a one-time contender to the throne is an obvious play to consolidate power by Bin Salman.

However, what’s more puzzling is the detention of billionaire prince Alwaleed Bin Talal. On paper, Bin Talal and Bin Salman are a match made in heaven: Both want to transform Saudi Arabia into a “secular” society, both detest the idea of democracy and liberalism, and both are equally willing to hand over the Kingdom’s wealth and sovereignty to the United States

Earlier I spoke to a contact who used to work for the billionaire prince. He told me that a possible reason for his detention was Alwaleed’s refusal to put up money to help prop up Saudi’s staggering economy. The message from Bin Salman to the country’s wealthy elite is: Pay up or get locked up.

In the Saudi version of Game of Thobes, the 32-year-old Bin Salman shows that he is willing to throw the entire region into jeopardy to wear the royal gown. His actions have already all but destroyed the Gulf Cooperation Council (GCC); Yemen can no longer be referred to as a functioning state; Egypt is a ticking time bomb; and now Lebanon may erupt. There’s a lot to worry about.

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Air Force Reporting Error Allowed Texas Shooter To Buy Guns

November 7, 2017 Tyler Durden 0

As details slowly trickled out this morning about yesterday’s mass shooting at the First Baptist Church in Sutherland Springs, Texas, one glaring inconsistency quickly became clear: How did Devin Patrick Kelley – the deceased suspected shooter – manage to get his hands on the AR-556 rifle he used to murder 26 people (including up to 14 children) and and maim another 20?

Texas Gov. Greg Abbott said in a morning interview on Fox News that Kelley had been denied a Texas firearms permit because he had been dishonorably discharged from the military. However, a clerk at an Academy Sports & Outdoors store in San Antonio where Kelley had reportedly purchased the Ruger AR-556 rifle told reporters that Kelley had obtained the gun legally, and had checked off in his paperwork that he had no criminal history or history of mental illness that would disqualify him from obtaining a license for the firearm.

Since Kelley should’ve been prohibited from legally possessing a firearm because of his criminal history in the military, the question of just how Kelley came into possession of the firearm perplexed reporters, investigators and the public.

But in a stunning revelation, the Air Force cleared up any lingering confusion by admitting on Monday that it had failed to enter Kelley’s domestic violence court-martial into a federal database that could have blocked him from buying the rifle – something that could’ve potentially prevented the shooting.

The Air Force has reportedly launched a review into how the records were handled, according to the New York Times.

The conviction of the gunman, Devin P. Kelley, for domestic assault on his wife and infant stepson – he had cracked the child’s skull – should have stopped Mr. Kelley from legally purchasing the military-style rifle and three other guns he bought in the last four years. But that information was never entered by the Air Force into the federal database for background checks on gun purchasers, the service said.

 

“The Air Force has launched a review of how the service handled the criminal records of former Airman Devin P. Kelley following his 2012 domestic violence conviction,” the Air Force said in a statement. “Federal law prohibited him from buying or possessing firearms after this conviction.”

 

The statement said that Heather Wilson, the Air Force secretary, and Gen. David Goldfein, the Air Force chief of staff, had ordered the Air Force inspector general to work with the Pentagon’s inspector general to “conduct a complete review of the Kelley case and relevant policies and procedures.”

 

The Air Force also said that it was looking into whether other convictions had been improperly left unreported. “The service will also conduct a comprehensive review of Air Force databases to ensure records in other cases have been reported correctly,” the statement said.

Other details about the killings emerged on Monday, including clues about Kelley’s motive. Local law enforcement officials said that he may have been driven by anger toward his estranged wife’s family, a fitting end to a life punctuated by eruptions of domestic rage.

In addition to his court-martial, in which his previous wife was the victim, Kelley had been investigated on a rape complaint, though he was not charged and his relationship to the victim was unclear. His current wife’s mother attended First Baptist Church, investigators confirmed Monday.

The New York Post reported that Kelley was “a wannabe tough guy who worked dead-end jobs, dated underage girls – and beat his infant stepson so badly he broke the child’s skull.”

“He pled to intentionally doing it,” Don Christensen, a retired colonel and chief prosecutor for the Air Force.

Kelley also reportedly dated underage girls, whom he stalked and harassed.

One of his exes, Brittany Adcock, now 22, said Kelley dated her for two months around 2009 — when he was 18 and she was just 13.

“At the time I didn’t think much into it being so young but now I realize that there’s something off about someone who is 18 with someone who is 13,” she said.

Kelley became so desperate after the 13-year-old dumped him that he offered her money to get back together, she said.

He even crudely suggested the girl move in with him and his wife — an offer that came with a twisted string attached.

“One time he told me I should move in with him and his wife and that he would take care of me as long as I walked around topless,” Adcock said.

Kelley graduated from New Braunfels High School in 2009, according to a now-deleted LinkedIn page where he claimed to have attended the school for six years.

Also in 2012, he was charged with animal cruelty for beating a puppy while he lived in a Colorado trailer park.

Kelley died after sustaining three gunshot wounds, including one that was self-inflicted.
 

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