Saturday, 20 October 2018

Weekend Update 20/10/2018. Saudi Crisis Explodes.


"I swear to tell the truth, the whole truth, and nothing but the truth, so help me God"

Saudi Arabia.

On Friday, Saudi Arabia finally gave in and all but admitted committing murder in Istanbul, proffering a cock and bull cover story that President Trump seems to have swallowed whole. Not so most of the Senators and Congressmen running for re-election in 17 days time.

On the global stage, the contrast between the west’s actions over Russia and China and their inaction over Saudi Arabia couldn’t be starker. President Trump, it seems, is easily rolled, especially where large arms sales to Saudi Arabia are involved.

Unhappily for President Trump, this game is mostly being played by Turkey’s President Erdogan and his secret service leaking against Trump and the Saudis. There’s little love or respect between any of them. I suspect that Turkey’s secret service has a lot more yet to leak against both.

But for now I’ll go along with President Trump’s naivety. So a few questions for President Trump and his Saudi friends. 

What happened to make a 57 year old man start a fist fight with 15 Saudi young turks from the Saudi security services?  Why were they there waiting for him at all?  What happened to his body and why?  When did diplomatic consulates become, jails, and interrogation centres? When did the UN ever sanction turning them into butcher shops? Why did everyone lie to President Trump and the rest of the world? Why would anyone want to do business with Crown Prince Mohammad in the future or rely on his word?

I suspect this Saudi problem to grow and grow, and if mishandled by President Trump and his gang of incompetent hooligans, to get thrust into the midst of some very unpredictable US elections.

One who deceives will always find those who allow themselves to be deceived.

Niccolo Machiavelli

Saudi Arabia admits Khashoggi died in consulate, Trump says Saudi account credible

October 19, 2018 / 11:37 AM
DUBAI/GLENDALE, Ariz./WASHINGTON (Reuters) - Saudi Arabia said on Saturday that journalist Jamal Khashoggi died in a fight inside its Istanbul consulate and that it fired two senior officials over his death, an account President Donald Trump said was credible but U.S. lawmakers found hard to believe.

Saudi Arabia’s acknowledgement that Khashoggi died in the consulate came after two weeks of denials that it had anything to do with his disappearance, and followed growing demands from Western allies for an explanation of what happened. 

His disappearance sparked a global outcry and prompted some U.S. lawmakers to call for harsh action against Riyadh.

Saudi state media said King Salman had ordered the dismissal of two senior officials: Saud al-Qahtani, a royal court advisor seen as the right-hand man to Crown Prince Mohammed bin Salman, and deputy intelligence chief Ahmed Asiri, a statement on state media said.

Saudi Arabia provided no evidence to support its account of the circumstances that led to Khashoggi’s death and it was unclear whether Western allies would be satisfied with the Saudi version of events.

“I think it’s a good first step, it’s a big step. It’s a lot of people, a lot of people involved, and I think it’s a great first step,” Trump, who has made close ties with Saudi Arabia a centrepiece of his foreign policy, told reporters in Arizona.

“Saudi Arabia has been a great ally. What happened is unacceptable,” he said, adding that he would speak with the crown prince.

Trump also emphasized Riyadh’s importance in countering regional rival Iran and the importance for American jobs of massive U.S. arms sales to Saudi Arabia.

---- “To say that I am skeptical of the new Saudi narrative about Mr. Khashoggi is an understatement,” said Republican U.S. Senator Lindsey Graham, a Trump ally who has been sharply critical of Saudi Arabia over the incident.

Trump said he would be working with Congress on next moves, but “I would prefer that we don’t use as retribution cancelling $110 billion worth of work, which means 600,000 jobs .... we need them as a counterbalance to Iran.”

---- In a separate statement on Saturday, the Saudi public prosecutor said a fight broke out between Khashoggi and people who met him in the consulate, leading to his death.

“The investigations are still underway and 18 Saudi nationals have been arrested,” the statement said.
Turkish sources have told Reuters the authorities have an audio recording purportedly documenting Khashoggi’s murder inside the consulate. Turkish pro-government newspaper Yeni Safak has published what it said were details from the audio. It said Khashoggi’s torturers cut off his fingers during an interrogation and later beheaded and dismembered him.

Before the Saudi announcements, Trump said he might consider sanctions, although he has also appeared unwilling to distance himself too much from the Saudi leadership.
More

As Khashoggi crisis grows, Saudi king asserts authority, checks son's power - sources

October 19, 2018 / 12:35 PM
DUBAI (Reuters) - So grave is the fallout from the disappearance of Saudi journalist Jamal Khashoggi that King Salman has felt compelled to intervene, five sources with links to the Saudi royal family said.
Last Thursday, Oct. 11, the king dispatched his most trusted aide, Prince Khaled al-Faisal, governor of Mecca, to Istanbul to try to defuse the crisis.
World leaders were demanding an explanation and concern was growing in parts of the royal court that the king’s son Crown Prince Mohammed bin Salman, to whom he has delegated vast powers, was struggling to contain the fallout, the sources said.
During Prince Khaled’s visit, Turkey and Saudi Arabia agreed to form a joint working group to investigate Khashoggi’s disappearance. The king subsequently ordered the Saudi public prosecutor to open an inquiry based on its findings.
“The selection of Khaled, a senior royal with high status, is telling as he is the king’s personal adviser, his right hand man and has had very strong ties and a friendship with (Turkish President) Erdogan,” said a Saudi source with links to government circles.
Since the meeting between Prince Khaled and Erdogan, King Salman has been “asserting himself” in managing the affair, according to a different source, a Saudi businessman who lives abroad but is close to royal circles.
Saudi officials did not immediately respond to Reuters questions about the king’s involvement in helping to supervise the crisis. A spokesman for Prince Khaled referred Reuters to government representatives in Riyadh.
---- Initially the king, who has handed the day-to-day running of Saudi Arabia to his son, commonly known as MbS, was unaware of the extent of the crisis, according to two of the sources with knowledge of the Saudi royal court. That was partly because MbS aides had been directing the king to glowing news about the country on Saudi TV channels, the sources said.
That changed as the crisis grew.
“Even if MbS wanted to keep this away from the king he couldn’t because the story about Khashoggi’s disappearance was on all the Arab and Saudi TV channels watched by the king,” one of the five sources said.
“The king started asking aides and MbS about it. MbS had to tell him and asked him to intervene when Khashoggi’s case became a global crisis,” this source said.
More

Saudi conference boycott over Khashoggi shows political threat to economy

October 19, 2018 / 1:32 PM
DUBAI (Reuters) - A Western boycott of a major business conference in Riyadh next week suggests rising political risks in Saudi Arabia could harm its ambitions to attract foreign capital and diversify its economy away from oil.

Rather than whipping up interest in Saudi investment opportunities, the event risks becoming a public relations debacle because of the disappearance of Saudi dissident Jamal Khashoggi, company executives and analysts say. 

Turkish officials have said Khashoggi was killed inside the Saudi consulate in Istanbul. Saudi Arabia denies this.

More than two dozen top officials and executives from the United States and Europe, including U.S. Treasury Secretary Steven Mnuchin and the chief executives of JP Morgan Chase and HSBC, have cancelled plans to attend the Future Investment Initiative due to unease over the Khashoggi affair.

That may not prevent the event from proceeding - over 150 speakers from more than 140 organisations originally signed up, organisers said. But it deprives the conference of much of its star power.

As Western companies fret over the risk to their reputations of doing deals and possible exposure to any sanctions imposed over the Khashoggi case, they are likely to put much new business in Saudi Arabia on hold for now.

The freeze may apply to both new Western contracts or investments in Saudi Arabia, and the Saudi government’s own programme of buying corporate assets abroad through its $250 billion Public Investment Fund (PIF).

----- But the freeze on new deals may start to ease within a few months. Many Western firms have too much at stake to abandon the Middle East’s biggest economy; privately, some told Reuters they would send lower-level executives to the conference.

BILLIONS AT STAKE

Larry Fink, chief executive of U.S. investment manager BlackRock, said he was pulling out of the conference but would not cut ties with Saudi Arabia as he wanted to “preserve the relationships that we’d worked so long for”.

Companies in China and Japan have shown little or no sign of withdrawing from the event, so U.S. and European firms may lose out on business if they stay cool towards Riyadh for too long.

“In the new year the impact may start to ease, particularly given that the U.S. seems to be helping Saudi Arabia sweep the incident under the carpet,” said Jason Tuvey, senior emerging markets economist at Capital Economics.
More

 



Politics have no relation to morals.

Niccolo Machiavelli

The monthly Coppock Indicators finished September.

DJIA: 26,458 +199 Down. NASDAQ: 8,046 +261 Down. SP500: 2,914 +166 Dow in August.
All three slow indicators moved down in March, but the S&P and NASDAQ  turned up in August.  September will be critical for confirmation of this change. All 3 slow indicators failed to confirm August’s positive change making October very vulnerable to a sell off.

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