Egyptian Court Rejects Transfer Of Two Red Sea Islands To Saudi Arabia, Setting Stage For "Iran Pivot"

via by Tyler Durden on Mon, 16 Jan 2017 21:03:41 GMT

Last April, in a move that led to widespread public outrage, the Egyptian government revealed that it had signed maritime demarcation accords that put the islands of Tiran and Sanafir in Saudi waters, in the process handing over the two islands to the Saudi kingdom, a transfer that was widely perceived as a behind the scenes gift from the Egyptian president to the Saudi regime. As Reuters reported at the time, "Egypt's announcement during a five-day visit by King Salman that it would transfer two Red Sea islands to its Saudi ally has outraged Egyptians, who took to social media to criticize the move, which now faces a legal challenge."

Back then, Saudi and Egyptian officials said the islands belong to the kingdom and were only under Egyptian control because Saudi Arabia's founder, Abdulaziz Al Saud, asked Egypt in 1950 to protect them. But the accord, which still needs ratification by Egypt's parliament, caused consternation among Egyptians, many who said they were taught in school the islands were theirs.

As anger spread, various complains were filed in administration court, such as one by veteran lawyer Khaled Ali, arguing that according to a 1906 maritime treaty between Egypt and the Ottoman Empire, the islands are Egyptian and the move amounts to a transfer of sovereignty. The treaty precedes the founding of Saudi Arabia in 1932. Ali alleged that the accord violates article 151 of Egypt's constitution, which requires all treaties related to sovereignty to be approved by referendum.

The contested disputed ownership of the islands, similar to comparable naval disputes most notably in the South and East China sea, became a source of tension between Egypt and Saudi Arabia, which had showered its ally with tens of billions of dollars in aid in recent years but suspended petroleum supplies in September amid growing differences between the two nations. As we reported at the time, while Egyptian officials said since that the contract with Saudi Arabia's state oil firm Aramco remains valid and had appeared to expect that oil would resume flowing, Egyptian Oil Minister Tarek El Molla confirmed the Saudis had stopped shipments indefinitely.  "They did not give us a reason," an oil ministry official had told Reuters. "They only informed the authority about halting shipments of petroleum products until further notice."

Since then, tension between the two countries have escalated, and culminated on Monday when an Egyptian court rejected the government plan to transfer the two uninhabited Red Sea islands to Saudi Arabia, in a final ruling that prompted cheers in the courtroom but could deepen tensions with the country's erstwhile financial backer.

According to Reuters, the court's decision was based on "irrefutable evidence" as well as local and international practices which removed any doubt that the islands' sovereignty belonged to Egypt alone, state news agency MENA said.

The abovementioned Khaled Ali called Monday's verdict a "decisive" ruling. "So it is not permissible for the president, or prime minister or parliament or cabinet or a referendum to give up this land," Ali told Reuters. "It is Egyptian land and cannot be given up according to the Egyptian constitution." The lawyers won an initial ruling in June, but the government appealed, sending the case to the Higher Administrative Court which sits on atop the administrative judicial ladder.

Celebrations erupted as the judge read out the ruling, with jubilant supporters carrying Ali and his colleague Malek Adly out of the courtroom. Hundreds of people outside waved Egyptian flags chanted "Egyptian, Egyptian" and "Bread, Freedom, the islands are Egyptian".

"This verdict is a victory for Egypt," Adly said. Perhaps, but it also means the relations between Egypt and Saudi Arabia will turn even more frigid, with Saudi Arabia likely to maintain its oil supply embargo to Egypt.

So where will Egypt get its oil? We hinted at the answer in November, when we reported that oil minister El Molla said that he in negotiations with Iran, Saudi Arabia's sworn political rival, to try to strike new oil deals, hinting that Egypt may be the latest to join a fledgling mid-east axis which includes Iran, Syria, Russia and perhaps, Turkey.

Egypt and Iran's diplomatic relations have been strained since the 1970s, and is why according to Reuters, "an Egyptian official visiting Iran would cement a break in its alliance with Saudi Arabia and mark a seismic shift in the regional political order." It has yet to be confirmed if, indeed, Egypt - whose Suez Canal has critical geopolitical importance - has pivoted away from a Saudi sphere of influence (and oil supplies), and into that of Iran.

'Bikers For Trump' Vow To Form A "Wall Of Meat" To Protect Inauguration From Protesters

via by Tyler Durden on Mon, 16 Jan 2017 20:55:00 GMT

In 2001, disaffected, Gore-supporting snowflakes shut down various parts of the Bush inauguration after increasingly violent crowds pelted his motorcade with eggs during his procession down Pennsylvania Avenue.  And while many have predicted a similar fate for the Trump administration this Friday with protesters already descending upon D.C. amid vows to "paralyze the city", Trump has one advantage that Bush did not, namely 5,000 "Bikers for Trump" who have said they will form a "wall of meat" to guard against any protesters looking to disrupt the festivities.

Chris Cox, the founder of the pro-Trump group, has said that roughly 5,000 of the club's 200,000 members will ride to Washington, D.C., and attend President-elect Donald Trump’s inauguration on Friday.  Appearing on Fox Friends, Cox said that attendees will be prepared to "form a wall of meat" and go "toe-to-toe with anyone that is going to break through any police barriers."

"The bikers are certainly used to being outnumbered and we are prepared to form a wall of meat.  We're anticipating a celebration here. We don't anticipate any problems. We have a strict code of conduct where we don't condone violence. But again in the event that we're needed, you can certainly count on the Bikers for Trump."

 

"We'll be shoulder-to-shoulder with our brothers and we'll be toe-to-toe with anyone that is going to break through any police barriers, that's going to be assaulting women, spitting on them, throwing things at them.  We are anticipating a peaceful transition of power."

 

"The backbone of the biker community is the veteran.  So these are guys that aren't really used to backing down. You certainly won't see bikers out there screaming, calling for destruction of private property or the death of police officers."

As we pointed out last week, Trump's inauguration is expected to attract up to 750,000 protesters, some of whom have vowed to "paralyze the city",  from anti-Trump groups including DisruptJ20 and RefuseFacism.org.

Several protest groups planning large-scale demonstrations have permits in place and have already held organizational meetings, among them the collaborative DisruptJ20.

 

“We’re planning a series of massive, direct actions that will shut down the inauguration ceremonies and any related celebrations,” the group says. “We’re also planning to paralyze the city.”

 

Organizers say they are targeting everything from the parade to the balls and plan to use blockades and protesters to stop traffic, public transit and parties.

 

The group RefuseFacism.org is planning a small-scale protest Saturday in the city’s McPherson Square, just blocks from the White House, that organizers hope will grow into larger inauguration-weekend protests.

 

The group burned U.S. flags this summer at the Democratic and Republican national conventions and this week tried to disrupt the Senate confirmation hearing for Alabama GOP Sen. Jeff Sessions to become Trump’s attorney general.

 

“I wouldn’t want to meet with [Trump], but I would say to him, ‘You’re a fascist. Your regime is illegitimate.’ And it must not be allowed to take power,” the group’s Carl Dix told Fox on Wednesday on Capitol Hill. Dix acknowledged the group doesn’t have a federal or city permit to protest but still intends to “stop the regime.”

We wish all the protesters the best of luck, we're sure your efforts will truly make a positive difference in the world.

Canadian Military's Second-In-Command Has Been Relieved Of Duty For Leaking Highly Classified Information

via by Tyler Durden on Mon, 16 Jan 2017 20:24:20 GMT

It appears the US Democratic party and Clinton campaign are not alone when it comes to problems preserving highly sensitive information. According to the Globe and Mail, Canada's Vice-Admiral Mark Norman has been relieved of his duties as the Canadian military's second-highest-ranking officer over alleged leaks of highly classified information.

Vice-Admiral Mark Norman, commander of the Royal Canadian Navy, Rear Admiral
Dave Gardam, Rear Admiral John Newton, and Lt.-Gen Stuart Beare, left to right

The G&M reports that General Jonathan Vance, chief of the defense staff, ordered Mr. Norman's removal after an investigation of "pretty high-level secret documents" that had allegedly been leaked. The source would not provide further information on the nature of the sensitive leaks.

It is unknown whether the alleged leaks were to journalists, business interests or another country. For now, the Canadian military is offering no explanation for this extreme measure which took place Monday morning.

Vice-Adm. Norman has served in the Forces for 36 years and was previously in charge of the Royal Canadian Navy. He commanded the Royal Canadian Navy for more than four-and-a-half years until General Vance appointed him as vice-chief in January 2016.

The role of vice-chief of the defense staff is an extremely powerful position, similar to that of a chief operating officer at a company. The VCDS is the leader for corporate strategies in the Forces and is supposed to promote security inside the military. Gen. Vance signed an order for Vice-Adm. Norman's removal Friday and the change took effect Monday. Gen. Vance is in Europe this week on "military business," according to the Forces.

"The Chief of the Defense Staff has temporarily relieved the VCDS, Vice-Admiral Mark Norman, from the performance of military duty," Lieutenant-Colonel Jason Proulx, spokesman for Gen. Vance, said. "For the time being, he will not be carrying out the functions of VCDS."

Vice-Admiral Ron Lloyd, currently the commander of the Navy, has been appointed as the interim vice-chief of the defense staff. Lt.-Col. Proulx declined to explain why the military is using the word "temporarily" to describe Vice-Adm. Norman's removal.

From "Promise" To "Payback" - Here Are The Five Stages of The "Trump Trade"

via by Tyler Durden on Mon, 16 Jan 2017 20:02:04 GMT

As Deutsche Bank's Alan Ruskin puts it, without getting too cute about it, "there are probably five defining stages for the “Trump trade”: Trading i) ‘the promise’; ii) the deal-making; iii) the enactment; iv) the economic impact, and, v) the payback."

Here are the details as market pscyhology shifts from phase 1 to stage 2, which DB says took place during last week's Trump press conference, and what markets can expect going forward.

The five stages of the Trump trade

Trump’s press conference last Wednesday has probably drawn the line between ‘the promise’ phase, and, the stage where deliverables will become progressively more important. The ‘promise’ stage was never seen extending beyond Trump’s inauguration, since it was always expected that the market would start responding to actual President/Congress initiatives in what is likely to be a very active first 100-day agenda.

To get to the enactment stage it is usually important for the President to use political capital wisely, not least because 9 of the last 12 Presidents saw their popularity near peak and leak within months of their inauguration, making it progressively more difficult to get things done. However, in current circumstances, much of the impetus and detail on fiscal reforms, including ‘market hot buttons’ like the border tax adjustment, already have considerable Congressional impetus, not least from the Ryan - Brady tax plan.

One difficult assessment, is the trade-off between the ambitions of a fiscal package and its likely legislative progress. The more complex the fiscal package, the more far-reaching the implications, the less chance it becomes law, for any far-reaching tax reform is inherently disruptive to entrenched interests, and these interests then work to undermine Congressional support for change. There is little doubt that the more complex aspects of a comprehensive tax plan could, and probably will, push the deal-making phase into the 3rd quarter. The phase of deal-making may then prove much more frustrating for markets, unless factors that can set off new outlook for inflation, the trade balance, and the Fed - like the border adjustment tax - look likely to gain passage.

Once plans are turned into law, the market will have a clearer sense on the timing and reach of the main growth impulse. We would expect that asset markets will at least partly ‘front-run’ the growth impulse, with the extent of the ‘discounting’ dependent on the confidence over timing and scale of the growth implications.

So what does this mean for the 5 stages of the Trump trades?

• i) The promise stage is done. It has been powerful, precisely because it has involved a possible paradigm shift in cyclical stimulus and because the expected US policy mix is seen as so differentiated from the rest of the world.
• ii) The deal-making phase will take shape over the next 100 days. Here we will start to get a better feel for the scale of fiscal stimulus, and therefore the spillover onto monetary policy. The complexity of far-reaching changes could stretch this phase, making for more frustrating trade conditions, especially since the Fed is not under too much pressure to front-load their actions, without more clarity on fiscal policy.
• iii) For the enactment phase where deals are signed off on in H2, the market will be particularly responsive to issues that relate to timing of impact; multiplier effects; the breakdown not least as it relates to far reaching corporate tax reform that will impact trade patterns, FDI, equity and bond flows; and, protectionist elements where retaliation is a real threat. Not to be forgotten in this phase is the overlap with changes in key Fed personnel, including the Fed Chair appointment. The talk of a more rules based Fed, or at least having the Fed Chair explain departures in policy from a rules based system, is apt to be seen as hawkish, especially given how accommodative policy is now (fed funds is tracking 100 – 125bps below a Taylor Rule signal).
• iv) The economic impact phase. The growth impulse will likely be felt mostly in 2018, with questions on how much the upturn is accelerated and elongated into say 2019. The inflation impulse could have even longer lags, unless there is a border adjustment tax that hits import prices quickly. This will be a phase where we better understand how much the Fed will tighten in this cycle and whether the peak in the USD is in 2018 or even beyond. If there is a genuine acceleration in growth, the market could make sizable adjustments in Fed expectations, and this may well prove another important period for trending markets.
• v).The payback phase. Fiscal stimulus often brings growth forward, usually with a payback in the form of slower growth as the stimulus wears thin. Similarly, there is a reversal in financial prices. Think of this as the equivalent of what we saw for the USD in the 1982–84, where the rally gave way to ‘the payback’ of a much weaker USD in 1985-87. In current circumstances payback is more relevant for 2019 and beyond.

While each of these five stages is likely to have its own defined characteristics, there is apt to be plenty of overlap. Importantly for USD bulls, fiscal initiatives should be seen as the ‘icing on the cake’. The Fed was lining up to be the only G10 Central Bank to tighten in 2017, whoever was elected. Even a moderate net fiscal stimulus of say 1% of GDP without far-reaching tax reform or border adjustment taxes can justify modest USD strength (~5% on the TWI). Border adjustment taxes with its impact on trade, inflation and Fed policy, would simply make the story overwhelming.

Obama Sends 10 More Guantanamo Detainees To Oman

via by Tyler Durden on Mon, 16 Jan 2017 19:45:00 GMT

Reconfirming that he has much left to accomplish in his final week in office, Obama has released another 10 Gitmo detainees that have just confirmed their safe arrival in Oman.  Meanwhile, the Omani Foreign Ministry released a statement confirming their 'favor' to the United States "out of consideration for [our] humanitarian situation."  Per the Washington Post:

The statement by the Omani Foreign Ministry said that the men released from Guantanamo would “temporarily reside” in the country.

 

The move was in response to a request by the U.S. government and “out of consideration for their humanitarian situation.”

 

The statement did not identify the prisoners names or nationalities.

Yes, we presume they will "temporarily reside" within the country until they can find safe passage back to the battlefield.

This latest transfer is part of an 11th hour effort by the Obama administration to resettle as many as 19 inmates to Saudi Arabia, Oman, United Arab Emirates and even Italy before the end of its term which would leave approximately 40 detainees in the facility when the White House is turned over to the Trump administration this Friday.

Of course, the fact that Gitmo will remain open with ~40 prisoners when he exits the White House marks yet another failed campaign promise of a man who repeatedly vowed to close the facility in 2009 arguing that such an effort was necessary to "to regain America's moral stature in the world."

Meanwhile, Trump's vision for Gitmo varies 'slightly' from Obama's after repeatedly promising to "load it up with bad dudes" during the 2016 campaign.

In conclusion:

"Losers Who Won't Lose" - John Lewis Versus Donald Trump

via by Tyler Durden on Mon, 16 Jan 2017 19:23:00 GMT

Submitted by Salil Mehta via Statistical Ideas blog,

This is an enormous week in the United States: opening today with the Martin Luther King holiday, and culminating with the Presidential Inauguration.  So it’s perhaps interesting to see a small spar between two individuals who are close to each event. 

• Congressman John Lewis, a prominent figure from the Civil Rights Movement era, told NBC that he somehow didn’t see President-elect Trump as legitimate and -concurrently- was boycotting the inauguration attended by current and former presidents Obama, Bush, Clinton, and Carter. 
• And Donald Trump rejoins on twitter that Congressman Lewis “should spend more time fixing and helping his district, which is in horrible shape … not to mention crime infested”. 

Now the assertion that Russian President Putin hacked the election is one that has been discussed already on this site (here, here).  So instead this article will (perhaps too narrowly for some) focus on the crime statistics in Congressman Lewis’ district, which has been the new curiosity though for many following this recent diminutive squabble.

Congressman Lewis represents Georgia’s 5^th congressional district, permeating from the heart of Metro Atlanta (also the capital of Georgia).  See this map below to get an idea of the district.  One familiar with Atlanta will notice that the region covers downtown Atlanta, as well as the more affluent and among the nation's most habitable  spots of Buckhead and Decatur.  These are definitely fun areas, where I personally have spent plenty of weekends enjoying the shopping, dining, and nightlife.  But the district also includes sketchier cities southwest of Atlanta.  These include areas surrounding East Point, College Park, and Morrow.

What’s more important than the heterogeneity of crime in Congressman Lewis’ district, is a basic sense of how the overall crime rate looks relative to other places.  So let’s start with the murder rate (and we’ll use Atlanta itself as a proxy).  The murder rate in Atlanta is over 20 (all homicide statistics are quoted in murders per 100,000 people), which anyway is 3 times the murder rate in Georgia and 5 times the murder rate nationally (and the murder rate nationally is already higher than the global average rate!)  We should note, perhaps related, that there is sometimes enhanced fear among Black Georgians (a state that had record hundreds of lynchings of Blacks up through the Civil Rights Movement).

So now let’s look at Atlanta’s murder rate relative to other large cities nationally.  Atlanta has a population of just over 450,000, implying it is the 39^th largest city in the U.S. and the median city of the 80 U.S. cities with a population of over a ¼ million.

This chart shows a lot of contextual mortality statistics information.  The average homicide rate among a composite of the 80 cities is 9 (per 100,000 people).  And the standard error about this is 8.  Hence we see a red horizontal line on the chart indicating the just over 17 violence rate (for 1 standard error above average).

We show all of the 80 cities plotted in the chart, with Atlanta and most of the cities labelled for convenience.  What we see is that there a dozen cities that have murder rates higher than 1 standard deviation, which is also about what is expected from a Gaussian distribution (though the distribution we can see is empirically closer to a lognormal).

In this sense President-elect is only somewhat correct in pointing out that Congressman Lewis’ district is crime ridden, though there are 8 cities with even higher murder rates on the chart above.  And it is also worth noting the oft-cited Atlanta Journal-Constitution came out with an article titled “Atlanta named one of America’s top ‘murder capital’”.  While we can argue about how bad the violent crime is in Atlanta, no one argues it is instead one of the America’s safest cities.  Factoring demographics however (age, race, longevity, etc.), the conclusions do become slightly foggier, as noted below.

Now look at another city, with 6 times the population, and yet a little lower murder rate: Chicago.

 

That’s right, Chicago which we are all frightened about after last week's radical criminal-justice report from DOJ Attorney General Lynch. 

 

The demographics are different (with Chicago far closer to the country's diverse profile on age and racial mix), but on face value Chicago has a lower murder rate than Atlanta!  Now some pundits of this analysis might state that geographic relative comparisons are less useful than noting the murder rate has come down over the years to a safe absolute level.  Though Congressman Lewis has been in office for decades, through waves of homicides during that time, and murder rates have come down everywhere (all cities, and globally).  There is still no denying -particularly among police makers- that for the "bad section" of his district, as well as for the same in Chicago and other "above 1-sigma cities", there is obviously no comfort in time series analysis because they live in justifiable fear.

And with these statistics ideas under our belt, it is with sincere hope that this week all Americans get a chance to remember the life of Martin Luther King.  And also celebrate a key event in our free democracy: the inauguration of our 45^th U.S. President.

British Pol Claims Trump Marked for Assassination

via by TDB on Mon, 16 Jan 2017 18:55:21 GMT

British Politician Warns Trump ‘CIA Is Plotting Assassination’ – British politician George Galloway has warned Donald Trump the American deep state is engaged in a “soft coup d’etat” and the CIA is planning to assassinate him. “There is a clear and present danger on his life."

George Galloway is a somewhat popular but wildly leftist, English politician who says thing that other pols avoid. That's why it's no surprise that he is behind this assassination story.

Galloway has been involved in the Iraq-oil-for-food controversy along with numerous other controversies and has been kicked out of the Labor party years ago for making statements against the Iraq war.

His statements regarding a potential Trump assassination are similarly incendiary but like some other statements are, nonetheless, surely agreed to by some other British politicians and mainstream voters as well.

If I were him, I wouldn’t be going near any grassy knolls. I wouldn’t be on any motorcades in Dallas. I wouldn’t be traveling in an open-top car. “I’d be very careful if I was Donald Trump about my personal security. I think I’d have to employ guards to guard the guards.“

Galloway, who has served 31 years as an elected British Member of Parliament, also dismissed claims that Russia was interfering in US politics – and instead pointed the finger at British intelligence services.

“It turns out it was Britain that was interfering in the US presidential elections – not Russia. At least I’ve seen no evidence the Russians were, but there is plenty of evidence emerging about the British role.

Galloway's remarks regarding a potential British role in any assassination is part of a large position that he has taken in the past regarding Britain. He makes no secret of this position that hold England in particular has a long history of smearing other governments.

“In 1925 something called the Zinoviev letter helped to bring down the first ever Labour government in Britain. It purported to be a letter from the head of the Comintern, Gregory Zinoviev, to his lieutenants in British politics ... It had been produced by, you guessed it, British intelligence services. That bought down the Prime Ministership of Ramsey MacDonald – and this one is aimed at another Donald. Donald Trump."

Galloway also says the coalition assembling in Washington against Trump is unusual because of its large size. In addition to the usual overt military industrial constituencies, it includes the Democratic opposition.

Galloway says the newly enlarged coalition has mixed Democrats in with Republicans they'd previously not had contact with such individuals such as John McCain. They have embraced the CIA as well, even though they know its communiques are often propagandistic and pro war.

It is the pro war element that Galloway is the most emphatic about. He claims that ultimately the entire coalition is pro-war because that's how the groups involved make  money.

Galloway says that Trump wants to make money in ways that don't involve war but that the top American outfits have found war to be the easiest way to make massive profits. For this reason, he says, Trump has been targeted.

Trump himself is aware of the bad blood between him and the CIA but may not believe it runs as deep as Galloway thinks it does. But, it is true, he is now proposing that the CIA is directly involved in leaking in various Tweets.

Conclusion: He may hope that his selection for the new CIA boss, presumably happening next week, will make a difference and bring the CIA under control. But many elements of the CIA are not directly under the control of the new head. Trump may be miscalculating.

New Video Exposes Anti-Trump Groups Plotting Criminal Acts To Disrupt Inauguration

via by Tyler Durden on Mon, 16 Jan 2017 18:15:24 GMT

In the latest undercover video from Project Veritas, investigators uncovered a group of protesters known as the DC Anti-fascist Coalition plotting to disrupt President-Elect Donald Trump’s inauguration by deploying butyric acid (aka "stink bombs") at the National Press Club during the Deploraball event scheduled for January 19th.  In a dose of irony, the planning meeting for the attack was held at Comet Ping Pong, the DC pizza restaurant that recently gained infamy as the location of the Pizzagate controversy.

Apparently "Plan A" of the disaffected agitators was to set off "stink bombs" in the ventilation systems of the building hosting the "Deploraball."

"I was thinking of things that ruin, that would ruin the evening, ruin their outfits or otherwise make it impossible to continue with their plans.  Make sure they get nothing accomplished."

 

"Yeah, if you had...a pint of butyric acid, I don't care how big the building is, it's closing...And this stuff is very efficient, it's very very smelly, lasts a long time a little of it goes a long way."

 

"If you get it into the HVAC system it will get into the whole building."

Meanwhile, "Plan B" entailed an effort to simultaneously set off the sprinkler systems throughout the building which had the "added benefit" of sending party goers "outside in the freezing cold."

"I'm trying to think through how to get all the sprinklers to go off at once.  There's usually a piece of like fusible metal or a piece of glass with liquid in it that will blow"

 

"And the added benefit, everybody is going to walk outside in the freezing cold."

Because of the nature of the threats, Project Veritas notes that they notified the FBI, Secret Service
and DC Metro Police of the content of this video prior to its release.

With that, here is the full video:

I HaVe A DRoNe...

via by williambanzai7 on Mon, 16 Jan 2017 18:00:58 GMT

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