Daily Archives: October 13, 2019

Putin offers to help ease Gulf tensions before Saudi trip | One America News Network

October 13, 2019

By Olesya Astakhova and Stephen Kalin

RIYADH (Reuters) – Russia can play a positive role in easing tensions in the Gulf following a spate of attacks in the region, President Vladimir Putin said in comments published on Sunday before his first visit to Saudi Arabia in over a decade.

He cited good Russian ties with Gulf Arab states and Iran in an interview with Arab broadcasters, but said he had no reliable information about who was behind attacks on Saudi oil facilities on Sept. 14 which stoked tension and rattled oil markets.

Yemen’s Houthi movement said it was behind the drone and missile strikes, but Riyadh and Washington blamed Tehran, which denied responsibility.

The attack exposed big gaps in Saudi air defenses, prompting the United States to send around 3,000 more troops to the kingdom.

“It is wrong to determine who is guilty before it is known reliably and clearly who is behind this act,” Putin said, adding that he had agreed to help investigate.

“Imagine, we don’t know. The next day, I asked the head of the foreign intelligence service and the defense minister. ‘No, we don’t know’,” he said according to an Arabic-language transcript provided by Saudi-owned Al Arabiya television.

Putin is due to arrive in Saudi Arabia on Monday and will hold talks with King Salman and Crown Prince Mohammed bin Salman before leaving for the United Arab Emirates on Tuesday. Russia and Saudi Arabia are two of the world’s biggest oil producers.

Tensions in the Gulf have risen to new highs since May 2018, when the United States withdrew from a 2015 international nuclear accord with Tehran that put limits on its nuclear program in exchange for the easing of sanctions.

President Donald Trump has reinstated U.S. sanctions, increasing pressure on Iran’s economy, and there have been attacks on Saudi Arabia and in Gulf waters that Washington and close allies have blamed on Iran. Tehran denies responsibility.

Putin said such attacks strengthened cooperation between oil producers inside and outside OPEC, an alliance known as OPEC+, and that Russia – which is not in OPEC – would work with its partners to reduce attempts to destabilize markets.

Saudi Minister of State for Foreign Affairs Adel al-Jubeir, in a media briefing, said Riyadh was not behind a suspected strike against an Iranian-owned oil tanker in the Red Sea on Friday.

IRAN DEAL, SYRIA

Pakistan’s prime minister is visiting Tehran and Riyadh this week to try to facilitate talks.

Putin said the region’s rival leaders did not need advice and mediation.

“You can only talk to them out of friendship,” he said. “I know that they, being smart, will listen and analyze what they are told. In this context we can play a positive role.”

He said he had “very friendly personal relations” with Prince Mohammed, the de facto Saudi ruler.

Asked whether Moscow supported a return to negotiations with Iran to limit its missile program as Trump has called for or enforcing the nuclear deal first, Putin said the two issues should be dealt with separately.

“Most likely it (the missiles) can and should be discussed … The missile program is one thing and the nuclear program is another thing,” he said. “Of course, this is necessary, but there is no need to merge one with the other…”

On Syria, where Russia and Iran have been key allies of President Bashar al-Assad during the country’s civil war, Putin said any new constitution that is drawn up should guarantee the rights of all ethnic and religions groups.

A congress convened by Russia last year tasked the United Nations envoy for Syria with forming a committee to draft a new constitution, after many rounds of talks to end the war failed.

U.N. officials say forming a constitutional committee is key to political reforms and new elections meant to unify Syria and end the civil war.

Putin said Syrians “interact positively” with Russian military police and military stationed in the country.

Defense Secretary Mark Esper said Washington was poised to evacuate about 1,000 troops from northern Syria after Turkey began an offensive against Kurdish forces in the border area. He told CBS the Kurds were looking to cut a deal with the Syrians and Russians to counterattack against the Kurds.

Turkey says it aims to set up a “safe zone” to resettle Syrian refugees but the offensive has raised international alarm over the possibility of Islamic State militants escaping from Kurdish-run prisons.

Putin said Moscow did not blame Trump for not improving U.S.-Russian relations, blaming the lack of progress on the “internal political agenda”.

(Additional reporting by Aziz El Yaakoubi in Dubai, Writing by Stephen Kalin, Editing by Edmund Blair and Timothy Heritage)

Source: Putin offers to help ease Gulf tensions before Saudi trip

White House to send military equipment & 3 thousand new soldiers to Saudi Arabia | RT

Donald Trump is claiming Saudi Arabia has agreed to pay for the deployment of additional U.S. troops to the region. The addition troops dispatched by the White House will bring the total deployment of U.S. forces to the kingdom to 3,000 since mid-September.

Donald Trump Taunts Hunter Biden as He Leaves Board of Chinese Investment Firm | Breitbart News

President Donald Trump continued taunting former Vice President Joe Biden’s son on Sunday after Hunter Biden announced he was stepping down from a Chinese investment firm.

Source: Donald Trump Taunts Hunter Biden as He Leaves Board of Chinese Investment Firm

Rashida Tlaib: We’re Considering Jailing The President’s Allies If They Don’t Comply With Impeachment Inquiry | The Daily Wire

Rep. Rashida Tlaib (D-MI), one of the key members of the progressive Congressional “squad,” reiterated a claim Sunday that Democrats are quietly considering jailing allies of President Donald Trump if they do not comply with the House’s impeachment inquiry.

Source: Rashida Tlaib: We’re Considering Jailing The President’s Allies If They Don’t Comply With Impeachment Inquiry

Kimberly Strassel: Media wage relentless crusade to destroy Trump | FOX news

The press has embraced its bias, joined the anti-Trump Resistance and declared its allegiance to one side of a partisan war. It now openly declares those who offer any fair defense of this administration as Trump “enablers.”

Since Donald Trump’s election in 2016, the mainstream media has shed its once-noble mission — the pursuit of the truth — and instead adopted a new purpose: to take down the president. In an excerpt from her new book, “Resistance at All Costs: How Trump Haters are Breaking America,” out Tuesday, Kimberly Strassel of the Wall Street Journal examines how far the press will go in its relentless crusade.

Last week The Washington Post revealed the alarming news that House Democrats were considering having their anonymous “whistleblower” testify from a remote location, and in disguise. Just as shocking as the details of this plan was the justification the Post ladled on this Democratic effort to hide impeachment information from the public.

It explained, high up in the story, that the cloak-and-dagger approach was merely Democrats expressing “distrust of their GOP colleagues, whom they see as fully invested in defending a president who has attacked the whistleblower’s credibility and demanded absolute loyalty from Republicans.”

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This, from a newspaper with a tagline of “Democracy Dies in Darkness.” Maybe the better journalistic epitaph is: Democracy dies in bias. How did journalism get here?

I’ve never engaged much in media criticism, because it’s almost too obvious. Yes, the mainstream media is liberal and biased. But at least in the past, that bias was largely a function of insularity. Most reporters weren’t even fully aware they were prejudiced politically; everyone they worked and socialized with held the same left-of-center views.

That’s changed in the age of Trump. The press has embraced its bias, joined the Resistance and declared its allegiance to one side of a partisan war. It now openly declares those who offer any fair defense of this administration as Trump “enablers.” It writes off those who question the FBI or Department of Justice actions in 2016 as “conspiracy” theorists. It acts as willing scribes for Democrats and former Obama officials; peddles evidence-free accusations; sources stories from people with clear political axes to grind; and closes its eyes to clear evidence of government abuse.

This media war is extraordinary, overt and increasingly damaging to the country.

CLICK HERE TO READ THE REST OF THIS PIECE IN THE NEW YORK POST

Source: Kimberly Strassel: Media wage relentless crusade to destroy Trump

Rand Paul: Troops in Saudi Arabia create ‘magnet for all the crazy jihadists around the world’ | FOX news

An increased American military presence in Saudi Arabia creates a “magnet” for Islamic extremism in the region, and presents an open target for radical Jihadists, said Sen. Rand Paul, R-Ky., during a Sunday television interview.

Source: Rand Paul: Troops in Saudi Arabia create ‘magnet for all the crazy jihadists around the world’

Iraq War Whistleblower Hopes Her Film Won’t Let Bush and Blair Get Away With Malfeasance | Sputnik International

Katharine Gun is now in the spotlight again, but this time not for exposing classified information. A film discussing illegal US activities prior to the 2003 invasion of Iraq premiered in London this week.

Source: Iraq War Whistleblower Hopes Her Film Won’t Let Bush and Blair Get Away With Malfeasance

Trade Deal Done? Is 3300 The Next Stop For The Market? | ZeroHedge News

Authored by Lance Roberts via RealInvestmentAdvice.com,

Trade Deal Done

On Thursday and Friday, the market surged on hopes that a “trade deal” was coming to fruition. This was not a surprise to us, as we detailed this outcome two weeks ago:

‘For Trump, he can spin a limited deal as a ‘win’ saying ‘China is caving to his tariffs’ and that he ‘will continue working to get the rest of the deal done.’ He will then quietly move on to another fight, which is the upcoming election, and never mention China again. His base will quickly forget the ‘trade war’ ever existed.

Kind of like that ‘Denuclearization deal’ with North Korea.’”

As we discussed in that missive, a limited “trade deal” would potentially set the markets up for a run to 3300. To wit:

Assuming we are correct, and Trump does indeed ‘cave’ into China in mid-October to get a ‘small deal’ done, what does this mean for the market. 

The most obvious impact, assuming all ‘tariffs’ are removed, would be a psychological ‘pop’ to the markets which, given that markets are already hovering near all-time highs, would suggest a rally into the end of the year.”

This is not the first time we presented our analysis for a “bull run” to 3300.

Every week, we review the major markets, sectors, portfolio positions specifically for our RIA PRO subscribers (You can check it out FREE for 30-days)Here was our note for the S&P 500 previously.

  • We are still maintaining our core S&P 500 position as the market has not technically violated any support levels as of yet. However, it hasn’t been able to advance to new highs either.
  • There is likely a tradeable opportunity approaching for a reflexive bounce given the depth of selling over the last couple of weeks.

This is the outcome we expected.

  • There is no “actual” deal.
  • The “excuse” will be this deal lays the groundwork for a future deal.
  • No one will discuss a trade deal ever again.

It is almost as if Bloomberg read our work:

“The U.S. and China reached a partial agreement Friday that would broker a truce in the trade war and lay the groundwork for a broader deal that Presidents Donald Trump and Xi Jinping could sign later this year.

As part of the deal, China would agree to some agricultural concessions and the U.S. would provide some tariff relief. The deal under discussion, which is subject to Trump’s approval, would suspend a planned tariff increase for Oct. 15. It also may delay — or call off — levies scheduled to take effect in mid-December.”

So, who won?

China.

  • China gets to buy agricultural and pork products they badly need.
  • The U.S. gets to suspend tariffs.

Who will like the deal?

  • The markets:  the deal removes a potential escalation in tariffs.
  • Trump supporters: Fox News will “spin” the “no deal” into a Trump “win” for the 2020 election. 
  • The Fed: It removes one of their concerns potentially impacting the economy.

By getting the “trade deal” out of the headlines, this clears the way for the market to rally potentially into the end of the year. Importantly, it isn’t just the trade deal providing support for higher asset prices short term:

  • There now seems to be a pathway forward for “Brexit”
  • The Fed is injecting $60 billion a month in liquidity into 2020 (More on this below)
  • The Fed has cut rates and is expected to cut again by year end.
  • ECB back into easing mode and running negative rates
  • Fed and ECB loosening capital requirements for banks (Because they are so healthy after all.)

This is also a MAJOR point of concern.

Despite all of this liquidity and support, the market remains currently confined to a downtrend from the September highs. The good news is there is a series of rising lows from June. With a “risk-on” signal approaching and the market not back to egregiously overbought, there is room for the market to rally from here.

Let me repeat what we wrote back in July:

“As we face down the last half of 2019, we can once again run some projections on the bull and bear case going into 2021, as shown in the chart below:”

The Bull Case For 3300

  • Momentum
  • Stock Buybacks
  • Fed Rate Cuts
  • Stoppage of QT
  • Trade Deal

However, while the case for a push higher is likely, the risk/reward still isn’t great for investors over the intermediate term. A failure of the market to make new highs, given the amount of monetary support, will be a very bearish signal.

The Fed’s “Not QE”, “QE”

Sure thing, Brian.

As I noted previously:

“Then there are the tail-risks of a credit-related event caused by a dollar funding shortage, a banking crisis (Deutsche Bank), or a geopolitical event, or a surge in defaults on “leveraged loans” which are twice the size of the “sub-prime” bonds linked to the “financial crisis.”  (Read more here)

Just remember, bull-runs are a one-way trip. 

Most likely, this is the final run-up before the next bear market sets in. However, where the “top” is eventually found is the big unknown question. We can only make calculated guesses.”

Think about this logically for a moment.

  1. The yield curve inverts which puts pressure on bank loans and funding.
  2. The Fed cuts rates, which puts pressure on banks net interest margins.
  3. The banks are chock full of leverage loans, risky energy-related debt, subprime auto loans, etc. 
  4. The Fed begins reducing excess reserves.
  5. All of a sudden, banks have a problem with overnight funding.
  6. Fed reduces liquidity regulations (put in place after Lehman to protect the financial system)
  7. Fed now has to commit to $60 billion in funding through January 2020 to increase reserves.

The last point was detailed in a recent FOMC release:

“In light of recent and expected increases in the Federal Reserve’s non-reserve liabilities, the Federal Open Market Committee (FOMC) directed the Desk, effective October 15, 2019, to purchase Treasury bills at least into the second quarter of next year to maintain over time ample reserve balances at or above the level that prevailed in early September 2019. The Committee also directed the Desk to conduct term and overnight repurchase agreement operations (repos) at least through January of next year to ensure that the supply of reserves remains ample even during periods of sharp increases in non-reserve liabilities, and to mitigate the risk of money market pressures that could adversely affect policy implementation.

In accordance with this directive, the Desk plans to purchase Treasury bills at an initial pace of approximately $60 billion per month, starting with the period from mid-October to mid-November.”

NOTE: If you don’t understand what has been happening with overnight lending between banks – READ THIS.

The Fed is in QE mode because there is a problem with liquidity in the system. Given the Fed was caught “flat-footed” with the Lehman bankruptcy in 2008, they are trying to make sure they are in front of the next crisis.

The reality is the financial system is NOT healthy. 

If it was, then we would:

  1. Not still be using “emergency measures” to support banks for the last decade. (QE, LTRO, Etc.)
  2. Not be pushing $17 trillion in negative interest rates on a global basis.
  3. Have reinstated FASB Rule 157 in 2012-2013 requiring banks to mark-to-market the assets on their books. (A defaulted asset can be marked at 100% of value which makes the bank look healthy.)
  4. Not be needing to reduce liquidity requirements.
  5. Not be needing $60 billion a month in QE.

Oh, but that’s right, Jerome Powell denies this is “QE.”

“I want to emphasize that growth of our balance sheet for reserve management purposes should in no way be confused with the large-scale asset purchase programs that we deployed after the financial crisis. Neither the recent technical issues nor the purchases of Treasury bills we are contemplating to resolve them should materially affect the stance of monetary policy. In no sense, is this QE,” – Jerome Powell

It’s QE.

Just so you can understand the magnitude of the balance sheet increase over the last couple of weeks, the largest single week increase from 2009 to September 20th, 2019 was $39.97 billion.

The last two weeks were $58.2 and $83.87 billion respectively. 

But, it’s not Q.E.

So, what was it then?

This was not about covering unexpected cash draws to pay quarterly taxes, which was one of the initial excuses for the funding shortfalls.

Nope.

This was bailing out a bank that is in serious financial trouble. It started with the ECB a month ago loosening requirements on banks, then proceeded to the Fed reducing capital reserve requirements and flooding the system with reserves. 

Who was the biggest beneficiary of all of these actions? Deutsche Bank.

Which is about 4x as large as Lehman was in 2008 and is currently following the same price path as well. Let me repeat, the Fed is terrified of another “Lehman Crisis” as they do not have the tools to deal with it this time.

(Courtesy of ZeroHedge)

The problem for the Fed, is that while they insist recent rate cuts are “mid-cycle” adjustments, as was seen in 1995 to counter the risk of the Orange County bankruptcy, the reality is the “mid-cycle” has long been past us.

With the Fed cutting rates, injecting weekly records of liquidity into the system, at a time where economic data has clearly taken a turn for the worse, the situation may “not be in as good of a place” as we have been told. 

Being a little more cautious, taking in some profits, and rebalancing risks continues to be our recipe for navigating the markets currently.

Source: Trade Deal Done? Is 3300 The Next Stop For The Market?

Syrian Army To Enter Turkish-Besieged Cities “Within 48 Hours” As US Exits | ZeroHedge News

A huge development after earlier in the day Sunday Defense Secretary Mark Esper announced Trump has ordered a “deliberate withdrawal” of 1,000 US troops in northeast Syria amid the advancing Turkish incursion: sources close to the Syrian government have announced  the Syrian Army will move in to assist Kurdish militias in Kobani and Manbij.

This after shocking statements over the weekend by the head of the US-backed Syrian Democratic Forces (SDF), Mazlum Abdi, who told CNN, “I’ve been holding myself for two days from going to the press and saying that America abandoned us and that I would like you to get out of our areas now so that I can invite Russian and [Syrian] regime planes to take over this airspace.”

Syrian Army, via AFP/Getty

Reuters now reports on the significant development which could see the Turkish and Syrian armies enter into direct confrontation: “The Lebanese broadcaster al-Mayadeen said on Sunday the Syrian army would deploy within 48 hours to the town of Kobani which is held by the Kurdish-led Syrian Democratic Forces and the nearby town of Manbij which is controlled by SDF-aligned forces.”

“The Syrian Governmental Forces (SAA) are preparing to enter the region of Kobani today, based on an agreement with the Syrian Democratic Forces,” Syrian official Mohammed Shaheen, was cited as saying.

As early as last week the SDF was reportedly engaged in intensifying talks with Damascus over assistance from the Syrian Army, after the US withdrew its air support for the Kurdish-led group amid the Turkish assault.

On Monday the commander of the US trained and armed SDF, Mazlum Abdi, indicated just that in a bombshell statement: “We are considering a partnership with Syrian President Bashar al-Assad, with the aim of fighting Turkish forces.” 

Though Damascus has yet to confirm an official deal with YPG/SDF forces, state-run SANA did say on Sunday that national forces were moving north to “confront” Turkish forces and its “aggression”.

Military analysis site, The Defense Post, reports on the potential direct cooperation between the Syrian Army and SDF to push out the Turks:

Kobani official General Ismet Sheikh Hasan said that Russian and Syrian government troops could enter Kobani and Manbij by Sunday night to help secure the cities from a Turkish incursion.

“We did everything we could,” he said. “We have called upon the West [and] the Arab Union but no one is coming to help, so we have no one other than ourselves to defend [Kobani]. Kurdish youth should come and defend their homes, and people should not abandon their homes – this is our land. It looks like this is the fate of the Kurds, to go through this each time.”

Damascus officials had subsequently denied that it was engaged in a wide-ranging deal, however, Sunday’s reported development of Syrian Army forces to the north could be the beginning of more significant deal making.

The United States has blocked such talks and cooperation for years, but the White House appears ready to washing its hands of the matter.

.

Source: Syrian Army To Enter Turkish-Besieged Cities “Within 48 Hours” As US Exits

Democrat Rep. Tulsi Gabbard Takes Swing at Biden Over Ukraine Scandal — The Gateway Pundit

Democrat presidential candidate Rep. Tulsi Gabbard took a swing at former Vice President Joe Biden over the Ukraine scandal during an interview on Friday.

Biden has been facing scrutiny over his son’s position at Ukrainian energy company Burisma Holdings and the firing of a prosecutor who says that he was investigating them for corruption. The prosecutor claims the government was pressured to get rid of him by the then-vice president.

Appearing on Hill.TV’s “Rising” on Friday morning, Gabbard was asked by host Krystal Ball if she would allow her vice president’s son to sit on the board of a Ukrainian energy company if she wins.

“I think that would be a poor decision to make,” Gabbard said.

Rising co-host Saagar Enjeti asserted that many of the Democrat candidates have been “very reluctant to call this out as evidence of corruption” and asked if she was going to.

“I think the perception is certainly a concern,” Gabbard said. “I think we have to look at how we can root out the corruption of the abuse of power and influence within our government, and I think that there’s a lot of examples of it.”

Gabbard also reaffirmed that she is considering boycotting the fourth Democratic presidential debate in protest of the DNC rigging the primaries.

via Democrat Rep. Tulsi Gabbard Takes Swing at Biden Over Ukraine Scandal — The Gateway Pundit