25 June 2017

Qatar Saudi Arabia Rift: Will MBS and Trump Escalate it to a Regional War?

As you probably know, on 5 June 2017, Saudi Arabia, United Arab Emirates, Egypt and Bahrain severed all economic and diplomatic ties with Qatar.

Saudi Arabia closed its borders with its tiny neighbor, yanked flight permits for Qatar Airways and banned Qatari ships from navigating in Saudi waters. Food trucks were stopped at the border and Qatari nationals were given two weeks to leave Saudi Arabia and all the other Gulf countries.


Because Saudi Arabia accuses Qatar of being a major sponsor of extremist forms of Islam and funding Islamist terrorists.

Coming from Salman the Senile, a man who spent most of his adult life raising money for all the recent Jihads, this is supremely rich.

This is like Nazi Germany taking punitive action against the Vichy government because of its anti-Semitism.

The question then, if the official justification is too stupid to warrant any discussion, what could be the reasons behind these drastic measures?

The main problem is Qatar's need to have good relations with Iran is incompatible with the need of its Sunni neighbors which are convinced that Iran is the Great Satan.

It is a complicated balancing act and it might even be an impossible proposition.

Qatar: Appeasing Saudi Arabia and Hedging its Bets

Qatar is a tiny country (less than 300,000 citizens) that share a land border and a religious identity (Wahhabism) with its much more powerful neighbor.

Qatar always assumed that Saudi Arabia wanted to turn it into a vassal state. And for good reason.

Consequently, Qatar's ruling family has always looked beyond their borders and hedged their bets and strategized to have more power and more protection.

Hedging their bets involve funding or befriending both sides of any regional rivalry.

Qatar provided troops to Saudi Arabia in its foolish war with Yemen's Houthis but they also propped up Houthis behind the scenes.

They are Sunni Wahhabis but they maintain good relations with Shia Iran.

They give a lot of money to Hamas and hosted Khaled Meshal for years but they favor friendly relations with Israel.

When Wahhabi Saudi Arabia asked the US to close its military bases and withdraw its troops on religious grounds, Wahhabi Qatar built the largest US military base in the region (Al Udeid) to host them.
In 1999, the then Emir of QatarSheikh Hamad told U.S. officials that he would like to see as many as 10,000 U.S. servicemen permanently stationed at Al Udeid. [currently there are 11,000 troops]
The House of Wahhab is like the medieval Papacy in their relations with the House of Saud. Whereas Muslim Brotherhood rejects that separation of Church and State. Yet Qatar, the world's only other Wahhabi state, had been sponsoring the Brotherhood and harboring its most important preacher Yousef Qaradawi.

In fact, despite their Wahhabi roots, early on they turned to Muslim Brotherhood to take over education, which was an interesting choice given the bitter rivalry between Wahhabis and the Brotherhood.

The other insurance policy of Qatar's ruling family was to help dissidents to keep its neighbors on their toes.

From Hamas to Muslim Brotherhood to Al-Nusra Front to Taliban any group could find safe haven in Qatar and maintain their activities freely and often with Qatari funds.

This was why Al Jazeera was created and maintained even though it never made any money. The TV outlet gave a voice to all dissident groups in the region and made their respective governments nervous and insecure.

The only rule for these groups was to refrain from extending their activities to Qatar. So Hamas, Taliban, Muslim Brotherhood and others never undertook any actions in Qatar and Al Jazeera never criticized the Emir and the ruling family.

If this was the extent of the problem it would have been manageable. But these complex relations are overdetermined by the mother of all religious schisms.

Shia Sunni Rivalry

Saudis and other Gulf countries see Iran as an existential threat for two reasons.

One, they each have sizeable Shia minorities and they had been persecuting them gleefully for centuries. 75 percent of Bahrain's population are Shia. In Lebanon, they represent half of the Muslims.

In Iraq, they are roughly 60 percent.

In Saudi Arabia the government claims about 20 percent but some estimates go as high as 45 percent. And they are largely concentrated in the oil-rich Eastern Province.

So Gulf Sunnis are worried that a wealthy Iran could ignite civil wars in these Sunni dominated Emirates. To them the situation in Yemen is an incontrovertible evidence that their fears are well founded.

The second reason for their fears is the rise of the so-called Shia Crescent. Besides Iran, Shia Muslims came to power in Iraq after Saddam's fall. As I noted above, Iraq has always had a Shia majority but they were kept in check just like in other Arab countries. Now they are ruling the country and the Sunnis are pushed to the sidelines.

If Al-Assad (who is Alawite, which is an offshoot of Shia Islam) remains in power then the Shia Crescent will be in place ready to destroy the Sunnis. Or so they believe.

If you wonder why the Sunni Muslims are so convinced that Shia Muslims want to wipe them off the map, it goes back to the beginning of Islam.

The profound hatred  between the two main branches of Islam are not well know in the West.
Ever since Muhammad's cousin and son-in-law and the last of the Rashidun caliphs Ali was assassinated and the Caliphate was grabbed by Muawiyah, there has been a deep divide between these two denominations of Islam. 
In fact, contrary to what you might have heard, before modern times, Muslims had no real animosity towards Christians and Jews, as they are People of the Book. But almost since the beginning, Sunnis considered Shias kuffar and Shias, because of what they did to Ali and his two sons Hassan and Hussein, viewed Sunnis as usurpers of Allah's will and cheaters and murderers.
This historical animosity is not the cause of the current situation but it makes it impossible to solve it because both sides are convinced that the other side want them destroyed.

Given this background, Saudi Arabia and most of the Sunni governments in the region are livid that Qatar, instead of blocking Iran's path, is helping the Islamic Republic gain more power.

The problem is that Qatar has no choice in the matter as it had already tried to screw Iran once and it cannot afford to try it again.

Qatar and Iran: North Dome and South Pars  

If you are one of my regular readers, you already know that Iran and Qatar share the world's largest natural gas field.

Iran's side is known as South Pars and Qatar's is North Dome.

Because of crippling sanctions, Iran was unable to develop South Pars and Qatar was pumping off furiously and liquefying and selling them everywhere.

They became the biggest exporter of natural gas in no time. But they wanted to sell more.

So they proposed a gigantic pipeline project through Saudi Arabia, Syria and Turkey to carry their natural gas to Europe. Saudis were happy, as Iran would be the loser. And Turkey was happy, as it would, at long last, become an energy hub.

But, on Russia's urging, Syrian President Bashar al-Assad said no.

Even worse, he signed off on the so-called Shia pipeline to move Iran's gas from the same shared field to Europe bypassing Turkey.

You can see the two competing pipeline projects on the right.

Since Iran was unable to do much because of the sanctions and the stakes were enormous, Qatar's Emir decided to go all in and to remove Syria from the pipeline's path.

Which marks the launch of the Syrian civil war and the birth of Al-Nusra Front and then of course ISIS.

To create ISIS, Qatar put up the money, Turkey offered the supply route, Saddam's intelligence officers created the organizational structure, the Naqshbandi Army provided the military muscle and Pipelineistan, also known as Islamic State, was born.

Without Qatar's need for a pipeline, ISIS would never have established a state: for a terrorist organization it is an open invitation to be bombed incessantly.

The problem with Qatar's solution was the unpredictability of ISIS. Instead of claiming statehood and running the place, they continued to commit and publicize atrocities, attracting unwanted attention to themselves.

They also didn't take into account that Putin would not take this lying down. He had no intention of allowing a competing pipeline into Europe. He intervened and Al-Assad recovered and ISIS got into trouble. Plus the Syrian Kurds occupied the northern Pipelineistan blocking the passage to Turkey.

The final development that shattered Qatar's pipe dreams was the US rapprochement with Iran. When Kerry and Zarif got together to lift the sanctions, Qatar knew that the jig was up and that it could no longer safely work against Iran.

In fact, I believe that this was the main reason why Hamad bin Khalifa Al-Thani abdicated at the tender age of 61 when all Gulf rulers stay on until they are ready to visit with 72 virgins on the other side.

And that is also why the new Emir did not keep his father's consigliere, Prime Minister and Foreign Minister Sheikh Hamad bin Jassim Al-Thani, known as HBJ, which, at the time, raised a few eyebrows.

The old Emir realized that the setup he and HBJ devised was in deep trouble and, with the thaw in US-Iran relations, he knew that a Fresh Prince of Qatar was needed to assuage Iran.

The new Emir Tamim bin Hamad Al-Thani promptly went back to Qatar's policy of hedging its bets and made two significant decisions.

One was to establish very close relations with Turkey's President Tayyip Erdogan and to sign a military cooperation agreement. As part of that deal Turkey was given a military base in Qatar. The Emir also generously injected billions in short term capital whenever Erdogan got into economic trouble.

Secondly, he announced his country's support for the lifting of Iranian sanctions and in 2014 he signed an agreement with Iran to help them to develop their South Pars field.

Indeed, Qatar actually went to help its direct competitor, the world's second largest exporter of natural gas to produce and sell more. It was an effort to fix their Pipelineistan adventure and to establish good relations with Iran.

This is how Saudi Arabia responded.
Saudi Arabia was considering closing the Qatari-Saudi land border, Saudi airspace to Qatar, and scuppering the imminent Qatar Airways deal to operate flights in the kingdom. Scurrilous social media exchanges also indicated the possible excommunication of Qatar from the GCC.
Ostensibly, the Saudi reaction was for centered around Muslim Brotherhood and support for Houthis but the real reason was Qatar's deal with Iran.

In other words, ever since Pipelineistan flopped, Saudi Arabia has been desperate to stop Qatar from helping Iran.

Why Now?

Two reasons or actually two guys. MBS and The Donald.

Muhammad bin Salman who goes by MBS is King Salman's son and his Minister of Defense. He is the architect of the disastrous civil war in Yemen.

Until a few days ago he was the Deputy Crown Prince. But he was also the de facto ruler of Saudi Arabia as Salman suffers from dementia. Right after the embargo was announced, Salman demoted the Crown Prince Muhammad bin Nayef and replaced him with MBS.

MBS is an arrogant and dangerous man who likes to play with fire.
At the end of last year the BND, the German intelligence agency, published a remarkable one-and-a-half-page memo saying that Saudi Arabia had adopted “an impulsive policy of intervention”. It portrayed Saudi defence minister and Deputy Crown Prince Mohammed bin Salman – the powerful 29-year-old favourite son of the ageing King Salman, who is suffering from dementia – as a political gambler who is destabilising the Arab world through proxy wars in Yemen and Syria.
Iran is his bĂȘte noire. And he has been itching to start a conflict that could engulf the Islamic Republic.

Before he launched the embargo against Qatar, he cleverly engineered a rapprochement with Israel to cooperate against Iran. Tellingly, Israel backed Saudi Arabia in its confrontation with Qatar.

Israel is as fearful of the Shia Crescent as the Sunni countries in the region. And it is no coincidence that one of the Saudi demands was for Qatar to stop funding Hamas.

Trump's visit to Saudi Arabia was the turning point for MBS. He then announced a $110 billion arms sale which will be worth over $350 billion in ten years fully knowing that this would please immensely the author of the Art of the Deal.

That deal also ensured that Trump would denounce Tehran as the biggest supporter of Islamist terrorism and take Saudi side when they pushed Qatar to reduce its ties with Iran.

Predictably, when the embargo was announced Trump tweeted that Qatar was the biggest sponsor of terrorism and took credit for the move against the tiny emirate.

As a side note, Naomi Klein believes that US oil companies might be egging him on in an effort to push oil prices up. I am not sure but the muted response of the former CEO of Exxonmobil Rex Tillerson makes her claim somewhat plausible.

What's Next?

Saudi demands are designed to be humiliating and there is no way for Qatar to comply with them without becoming a vassal state.

In fact, besides reducing ties with Iran, shuttering Al Jazeera and closing the Turkish military base, one of the demands is to "align itself politically, economically and otherwise with the Gulf Co-operation Council."

Qatar's response was to reject them and to go to the Sunni regional power for protection.

The Turkish military base in Qatar was designed to house 5,000 troops but before the spat, there were only 200 soldiers there. Erdogan convened an extraordinary session of Parliament to get authorization to deploy a greater number of troops in Qatar.

The first batch of Turkish troops arrived five days ago.

Now, a few thousand troops would not be able to stop a Saudi invasion. But their presence is a serious deterrent and this is why closing the Turkish base was one of the main Saudi demands.

As for Iran, while they offered to send food and supplies they maintained a low key approach for fear of provoking Sunni hotheads. They are fully aware that the whole crisis was designed to get them involved.

If MBS decides to escalate this conflict it has the potential of turning into something catastrophic.

That is because this whole situation is not just a Sunni-Shia rivalry, Russia, Israel, Turkey and the US are in it as well. Their leaders are as unpredictable and mercurial as MBS himself.
In the last month, for the first time since the civil war in Syria began in 2011, the United States has directly attacked Syrian government forces or proxies — not just once, but at least four times. The urgent question now is less about Syria than Russia, which in response to the latest of these incidents, in which a U.S. fighter plane shot down a Syrian jet, threatened to target any U.S.-led coalition aircraft flying over Syria.
Something tells me that this is not going to end well.

17 June 2017

Theresa May's Katrina Moment

58 people were burned alive in the Grenfell Tower inferno.

You know why?

When the building was refurbished just a year ago at a cost of £8.6m, the company acting on behalf of the richest borough in the UK did not install a fire-resistant cladding because it would cost £2 more per square metre.
Installing fire-resistant cladding at Grenfell Tower would have cost just £5,000 extra, it has been claimed, after the spotlight fell on the building's facade as a factor in Wednesday's devastating fire.
And in case you think it was just an unfortunate decision to install a product that is illegal even in the US (and that tells you something), this was not a one-off choice. It was part of a larger trend.
Precise blame comes later in the public inquiry: we are all overnight experts in cladding and sprinklers now. But political blame spreads right through the Conservative party, with no escape on offer. This goes far beyond the precise shockers – the Tory MPs who mockingly rejected housing regulation; the cuts to funding to councils responsible for retro-fitting fire suppressants; the disregard of coroner’s instructions after the 2009 Lakanal House tragedy; and even the plan to opt out of EU safety regulations. Conservative Kensington and Chelsea council allegedly blocking its ears to tenants’ well-founded anxiety is just the immediate 
As Polly Toynbee put it, "that tower is austerity in ruins."

For years, every sane economist decried their useless cruelty and massive human cost.

But conservatives pursued them relentlessly because they wanted to destroy the safety net for the poor and the vulnerable.

Like the GOP trying to take away healthcare from millions of people.

The burning of Grenfell and the death of 58 people and the lack of any help for the hundreds of destitute and now homeless people perfectly summed up the conservative mind set.

Kensington Council saved £5,000, who cares if poor people's lives were put in danger.

And this picture juxtaposition made it crystal clear.

Theresa May is surrounded by police officers or fire fighters looking at the building from a distance.

Jeremy Corbyn hugging a survivor.

I don't think she will be able to survive this.

And she may even take the Tories down with her.


London fire: 'Outrageous' lack of help for Grenfell tower victims
Twenty-four hours after the 2010 Haitian earthquake, I arrived to find no international response to speak of. 
But within another 24 hours that response was arriving and was significant there three days after the disaster - teams from around the world flying in, crisis centres and the United Nations in control of feeding points and housing solutions. 
Yes, there were problems. There always are. But the centralised and visible response was in place days later in a relatively remote area. 
That is what appears to be missing in the richest borough in one of the world's leading cities. 
Kensington vs Haiti?

She is history.



This gets worse every day.
Police are expected to announce an increase in that number on Monday.
The BBC understands about 70 may have died. Eighteen people remain in hospital, nine in critical care.
But there is adequate compensation for those who lost loved ones.
The government says all those who lost their homes are to receive £5,500.
Each household will receive at least £500 in cash and £5,000 paid into an account as part of a £5m emergency fund first announced on Friday.
That is the same amount Kensington and Chelsea saved on cladding.

12 June 2017

Theresa May: A Bloody Difficult Woman in a Bloody Mess

Theresa May is screwed.

The proper adverb would have been royally but in this instance strongly and stably might be more apt.

A month ago, the Tories looked like they were set to destroy the Labour Party for at least a generation.

Pundits were lamenting "Joseph Stalin Lenin Marx Corbyn" and his disastrously radical policies, you know, commie stuff, like free tuition and publicly owned railways and post office.

Things that existed in the UK a few years back.

Then the proudly "bloody difficult woman" came up with the "dementia tax" which would force older people to give up their homes to pay for their long term care and her lead simply evaporated within a few weeks.

All of this you already know.

Her conundrum is that she is now really cornered with no room of maneuver.

And she desperately wants to hang on to power.

But she may not be able to do so.

Problem Number 1: Hard Brexit vs Soft Brexit?

I have to say that this distinction has always baffled me.

I did a year of graduate studies on the European Union and taught on the topic for a few years so I am reasonably familiar with how things work.

The EU's legal system is largely based on the German and French jurisprudence and neither is remotely flexible. You cannot pick and choose what part of EU legal system you might adhere to.

She and her supporters believe that Hard Brexit means no immigrants (especially swarthy ones), no meddling from EU institution, no payment to them and full access to the common market and full rights to UK citizens in Europe.

The whole thing actually makes sense if you are from the British Isles.

That is because American exceptionalism was built upon British exceptionalism.

You know, the empire on which sun never sets.

From the EU perspective, Brexit has two components.

The first one is Brexit pure and simple, whereby Britain would pay what it owes under its current obligations and vacate the EU institutions. No free movement of goods, labor, services and capital.

They could stop there and World Trade Organization rules would govern the EU-UK trade relations.

The second component will come after the first one is over and it is properly called a trade agreement: it would set new terms for the movement of services, goods and capital.

Both sides could also negotiate new terms for EU citizens in the UK and Brits in EU countries.

In that sense, Theresa May's Hard vs Soft distinction is rubbish. EU will insist on kicking Britain out first and talking about access later.

And don't tell me that the UK does not have to accept those terms.

Without Britain, the EU is composed of 27 member states. We are talking about roughly 450 million people vs 65 million in the UK.

44 percent of UK exports go to the EU and 8 percent of EU exports go to the UK.

Think about it for a minute as a Brexit proponent.

What incentives do they have to treat you according to your idea of British exceptionalism?

Why should they give you access to their market if you offer them nothing?

And why should they allow your citizens to remain in continental Europe when you are free to kick theirs off your islands?

Both Paris and Frankfurt are salivating at the idea of getting those financial institutions out of London, why should France or Germany go easy on Britain?

As you know, service sector represents 80 percent of the British economy. If the banksters go, good luck with everything. Especially the real estate.

What is worse for Theresa May, since the second part of the deal is a trade agreement, any one of the members can simply scuttle the deal.

You see, each member state has a veto power over trade agreements. You know, a country like Bulgaria or Romania or Hungary could say, sorry we don't like it and that would be that.

If I were Tsipras, I would make my vote conditional upon some debt relief. The banksters will get it.

I am just saying.

Problem Number 2: How Do You Negotiate When They Know Your Cards?

Theresa May had a 17 seat majority before the elections, now she has a deficit of 8.

To form a minority government, she needs the support of the Democratic Unionist Party (DUP) which won 10 seats.

In case you are not familiar with them, the DUP was founded by Ian Paisley and it is a hard core evangelical movement. They oppose abortion, same sex marriage, they are climate change deniers, they want creationism taught in school.

The works.

And they have uncomfortably close links to loyalist paramilitaries who murdered quite a few Catholics in their days.

If you are old enough to remember who Ian Paisley was, none of this should surprise you.

Now, the DUP is opposed to any deal that would establish an actual border with the Republic of Ireland, an EU member. The BBC calls it the "Hardest Border" because it cuts through villages and fields and sometimes homes.

Which puts Theresa May in a bind.

How do you negotiate a so-called Hard Brexit, i.e. no swarthy immigration, for which your base supported you, when you have an open border with Europe?

There is more.

The Scottish Tories did exceptionally well this time around and ended up with 13 seats. Scotland overwhelming voted for Remain in the referendum and Ruth Davidson, their leader, made it clear that between access to EU market and Hard Brexit, she and her colleagues are firmly in favor of the former.

Reportedly, Davidson was planning to take her Scottish Tory party away from English control. She later denied that this was her intention.

Now if you were the negotiating team for the EU, how would you react to this picture?

Your opponent has a minority government which stays in power thanks to the support of a regional party. But that party is rabidly anti-immigration yet it does not want an actual border with Ireland.

The same government has another regional faction which is opposed to any form of Hard Brexit and between access to market and anything else, including immigration, they would pick access to market every time.

You go this way, this one pulls out and you go that way and that one pulls out.

How do you negotiate when the whole world knows that you do not have a unified team and any shift in either direction could bring your government down?

In fact, May's position is so precarious that even a simple disagreement on LGBT rights between the DUP and Ruth Davidson could spell trouble.

You see, Davidson is an openly gay woman and she wants to marry her partner in the near future. Same sex marriage is something the DUP is categorically against.

You can see how even such an unrelated issue could bring May's minority government down.

Incidentally, the issue was important enough that Davidson sought and received firm assurances in that regard.

If I were the head of the EU negotiating team I would be so happy to face such a weak opponent.

Problem Number 3: Donald Trump

There used to be a time where the UK would be the pilgrimage site for the newly elected US presidents to go to toast the special relationship between their two countries.

Curtsy opportunities for the first ladies before the Queen and imperial photo ops for successive presidents.

The subtext was always, hey, we are closer than you think.

The UK always played the Atlantic card against the EU, as in I don't need you, my big brother will take care of me.

And ever since the UK was admitted into the EU, member states always suspected of a hidden Atlantic agenda.

In fact, this is why Charles De Gaulle was opposed to the UK membership.

So with George Herbert Walker Bush or George Walker Bush or even with Barack Obama, this would have worked.

But the Orange Man is an America Firster.

Sure, when you surrender your hand to a short-fingered vulgarian he will grab it, as he does most things.

But does that mean that he will come to your rescue after the breakup with Europe?

Not really.

And if you were to claim that in your negotiations you might be screwed.

Strongly and stably.

Because the other side knows who the Orange Man is.



See what I mean?

The European Union has revealed a draft law to give it the power to move the lucrative euro clearing business out of London and keep it in the EU after Britain leaves the Union in 2019.

London currently processes three-quarters of the trade in this financial sector, providing thousands of jobs.

But European Commission vice-president Valdis Dombrovskis said Brexit needed "certain adjustments to our rules".

The law will decide if London will have the right to host the work post-Brexit.

London is currently the world leader for the clearing of all types of currency-denominated derivatives including the euro.

04 June 2017

Why Did Trump Withdraw From the Paris Agreement?

Despite the universal outcry, Trump pulling out of the Paris Agreement is a non-event from a climate change perspective.

But I believe that it is likely to become a Rubicon of sorts for Trump and the GOP.

Let me explain why this was a stupid decision.

And why it won't change much for the planet.

Why Withdraw?

Pulling out was a stupid decision because, first, Paris Agreement is a non-binding arrangement. If you don't stay within your limits, there is nothing anyone can do. You want to pollute more because you like Loretta Lynn, go ahead and do it.

You don't need to withdraw from the Agreement.

Second, by withdrawing you unnecessarily alienate big business.
Spoiler alert, the coal industry is pretty happy. But apart from that, there has been almost universal criticism from big business. 
Tesla chief executive Elon Musk and Walt Disney boss Robert Iger have quit their advisory positions in the White House as a result.
We are not just talking about the tech giants like Google, Apple, Facebook or Tesla. Take energy companies:
US giants ExxonMobil and Chevron had urged President Trump to stay in the Paris deal. And a tweet from Anglo-Dutch giant Shell said: "Our support for the #ParisAgreement is well known. We will continue to do our part providing more & cleaner energy."
Well, the former CEO of ExxonMobil, Rex Tillerson is the US Secretary of State.

And you know what:
The secretary of state was, by all accounts, a member of the "Remain Campaign" lobbying against a US withdrawal from the Paris Agreement. 
So President Trump's "Climate Brexit" was a blow to him - in an ironic twist the fossil fuel company he used to head supports the accord while the government he now represents does not.
Third, it simultaneously diminishes America's stature and turns China into the global leader of the fight against global warming.

This is especially stupid for someone who has been trying to re-assert the super power status of the US vis-a-vis China.

Finally, there is no real public support for the move.

According to a November 2016 poll 7 out of 10 Americans want to stay in the Agreement.

And Sierra Club says that, in every state, the majority of the population is in favor of the Agreement.

That's the map on the right.

Even when you look at party lines the emerging picture is not very good for Trump.
An overwhelming majority of Democrats, 86 per cent, are fans of the deal, while only about 51 per cent of Republicans say the US should take part in the accord, the programme reported. 
So, even the Republicans disagree with the decision.

Will It Change Anything?

Not really.

First of all, the Agreement is structured in such a way that it will take exactly four years to get out of it.

Which means it will take place during the mandate of the next president and I am pretty sure this will not be the Orange Man.

Secondly, large US cities and regions already declared that they will continue to abide by the Paris Agreement. Who cares what Idaho does if California, the world's sixth largest economy, stays within the limits of the Agreement.

Thirdly, Trump's withdrawal will not mean a sudden shift to more coal consumption.

Coal consumption has steadily been declining in recent years because natural gas is cheaper.
Coal as a means of making electricity is declining around the world. In the US, natural gas has overtaken it as a power station fuel, partly due to fracking bringing the prices down .
And renewable energy sources like solar and wind power are tumbling in price, meaning coal is not likely to become a major player again. 
It hasn't been a major source of heat for people's homes for years, either, having been largely overtaken by gas.
Finally, the rest of the world seemed determined to do more with or without the US.
China peaked its coal use in 2013. Since then, they have become the world’s biggest solar market and have been poised to adopt America’s climate leadership role in the event of them pulling out of Paris.
Similarly, India has recently announced it won’t build any new coal plants after 2022 and forecasts that renewables will generate 57% of their power by 2027, far exceeding their Paris pledge.
India's PM Narendra Modi and French President Macron just pledged to go above and beyond the Paris deal.

Germany and EU strongly criticized the withdrawal and declared that they will bypass Washington and work with US companies, cities and regions directly.

And of course, the increasingly cheeky President Macron did this:

Trolling Trump with a clever slogan was also a prefect way of establishing France as a relevant country and emphasizing his status as a young politician who speaks the social media language of the millennials.

Apparently, this was the most retweeted message in France's history.

Incidentally, even Trump's buddy, Vladimir Putin, came out in favor of the Agreement.

What Are the Risks for Trump?

Short term risks are obvious.

Another Katrina or Sandy and you can kiss your presidency goodbye, not to mention any Kanye West endorsements.

Medium term, and by that, I mean next three to eight years, he has an Alaska issue which will soon blossom into a big problem with a finger pointed to him.
Scientists like Prof Walsh say the effects of a warming climate are being felt particularly keenly here in the Arctic - with sea ice and glaciers melting, permafrost thawing and coastal communities at threat from erosion. 
Not only that but the process appears to be accelerating thanks to a so-called feedback loop - the more ice melts, the darker the surface of the planet becomes, with both land and sea reflecting less sunlight and absorbing more heat, and the warmer the world becomes.
Longer term?

This the global map. Take a look at it.

If, as they suggest, the sea level rise is around 7m, a lot of The Donald's New York properties and the Southern White House will be under water.

And scuba golfing will be an Olympic event.

The Donald might be gone by then, but the Barron will be there cursing daddy.

And now the obvious question.

Why Did He Do It?

Ever since Donald Trump was elected, the corporate media has been running stories about how he broke his campaign promises and how he changed his positions.

They periodically run clips interviewing Trump supporters who seem to assert that, despite all the lies and inconsistencies and massive instances conflict of interest, their candidate is doing a fabulous job.

And they seem puzzled by this apparent contradiction. The guy is an unprincipled liar, a buffoon, a bully, and yet every time they expose him, his voters love him even more.

As Atrios explained there is nothing contradictory about this:
For confused reporters, I'll explain it very simply: Trump voters don't care about most of the issues Trump claimed to care about in the campaign. They were just applause lines. If Fox and Breitbart had spent 3 months going on about the "Zipperhead Protocol" they'd have screamed in delight every time Trump mentioned it, without caring what it meant. [...]
Trump supporters have legitimate economic grievances like the rest of us, but they don't really see politics as a way to solve that. They see politics as a reality show in which their guy is winning and stomping on the face of the losing team, a team which includes blah people. Keep the racism going, keep pissing off the loser liberals, keep sticking it to the blah people. That's what will keep them happy. It was never about the ex-im bank or Chinese currency manipulation or whatever the hell, it was about kicking the shit out of loser liberals.
You can add global warming to that list.

It is tribal politics. If your leader does something that is considered outrageous by the people you dislike, you are giddy regardless of the effects of his actions on you and your loved ones.

The push to repeal Obamacare perfectly illustrates this irrational phenomenon: Trump voters will be hit harder than most but they don't care. As long as blacks and other minorities lose their covfefe Trumpistas are happy.

In that sense, pulling out of Paris was Trump's gift to his supporters and they love him for it.
In interviews with Trump supporters and Republicans across the country, the Paris climate agreement news looked far different than it did in Washington, a fact that Bannon reminded the president of, according to a senior White House aide. 
Jenny Beth Martin, the head of the Tea Party Patriots, enthusiastically supported the move. She said her group viewed leaving the Paris agreement as a “part of a larger ‘make America Great Again’ platform that necessitates putting America first.”
Why This One Might Be a Problem?

The problem with this one, it carries the risk of gelling the opposition.

The GOP had a good run because progressives do not have a unified front. They fight each other over nuances and they are unable to let go of minor differences.

The case in point was Bernie voters not being able to bring themselves to voting for Clinton.

But the Orange Man was a horrific wake up call.

They didn't think this was possible: a grifter in charge of the public purse; a racist and sexist as the ultimate arbiter of equality, a climate change denier making environmental rules.

Pulling out of the Paris Agreement might just be the turning point for the progressives.

They might finally say, forget our differences, instead of fighting Elizabeth Warren, we will first fight this guy.

And if that were to happen, it could become a yuge problem for the GOP.

One that no gerrymandering would be able to fix.

01 June 2017

Jaredgate Is Not About Russia It Is About Money

The drip-drip revelations continues as predicted.

This time it was a piece in the Washington Post (which has lately been eating the New York Times' lunch) which placed the president's son-in-law in the epicenter of the Trump-Russia investigation..
Jared Kushner and Russia’s ambassador to Washington discussed the possibility of setting up a secret and secure communications channel between Trump’s transition team and the Kremlin, using Russian diplomatic facilities in an apparent move to shield their pre-inauguration discussions from monitoring, according to U.S. officials briefed on intelligence reports.
The meeting took place in the Trump Tower in NYC in early December with ambassador Sergey Kislyak and Michael Flynn in attendance.
Ambassador Sergey Kislyak reported to his superiors in Moscow that Kushner, son-in-law and confidant to then-President-elect Trump, made the proposal during a meeting on Dec. 1 or 2 at Trump Tower, according to intercepts of Russian communications that were reviewed by U.S. officials.
In case it didn't sink in, The Bezos Daily is alleging that the presidential son-in-law asked the Russians to give him access to the embassy's secure communication apparatus so that he could discuss things freely with the Kremlin without risking interception by US intelligence agencies.

Well, this is rather remarkable, don't you think? And not for the obvious reasons.

First thing to note, how did the US intelligence folks know about the content of the meeting?

Clearly, the implication is that the person who leaked it to the Washington Post had access to Kislyak's "secure" channel. "He reported to his superiors," says the piece. The one, according the the same piece, Kushner was asking to use to evade US interception.

In that case, would the US intelligence agencies leak this and risk jeopardizing their access to what the Russians and Kushner believe to be a bulletproof channel?

So my money on intelligence agencies listening in on Trump transition team.

Two, how would that work? I mean, Jared going into the Russian embassy to discuss stuff with Putin?

Would he knock on the door wearing a Zuckerberg hoodie?

Pigeons flying into Russian embassy need code word security clearance or else they are waterboarded on their way out.

Are they kidding us?

Third, why would the Russian agree to that? If you were Sergey Kislyak would you show the president's son-in-law your state of the art encryption facility in the bowels of your embassy?

Don't get me wrong. I am not suggesting that there is no there, there.

There is. But not the "there" they imply.

To me, as the old pinko who always follows the money ("ne cherchez pas la femme, cherchez l'argent" Hercules Poirot fans) the relevant part of the story is the Trump Tower meeting between Jared Kushner and the CEO of Vnesheconombank Sergey Gordov right after Kislyak get together.

Which, incidentally, was also arranged by Kislyak.

Do you know why the bank's name rings a bell?

Just a week ago, I listed all the conflict of interest Trump projects and at the top of the list was Trump's Toronto Towers financed by, you guessed it, Vnesheconombank.

It is a bank controlled by the Kremlin and its CEO is a graduate of the FSB spy school and the bank has been doing some shady work on behalf of the Kremlin.
Between 2012 and 2014, Vnesheconombank was used as cover for Russian spy Evgeny Buryakov as he attempted to recruit New York City residents as intelligence sources for Moscow, according to the Department of Justice. Before that, Buryakov used Vnesheconombank as a cover to spy and recruit assets in South Africa.
What Gorkov needed was the lifting of sanctions as Vnesheconombank was very successful until sanctions killed its business.

For his part, Kushner needed serious financing to renovate his money loosing Fifth Avenue building.

From the Russian perspective:
Kushner was also the rare presidential-transition functionary whose family company was searching for hundreds of millions of dollars in loans to redevelop a struggling Manhattan skyscraper it owns. 
Hence the meeting with Gorkov.

My guess is that Kushner wanted a secure line to the Kremlin to discuss the lifting of sanctions. But in the end, his request was turned down by Moscow. Why would they do that if, as implied in the reporting, he was asking for a secure channel to pass on information to Russia?

It was about the money and the deal didn't go through because Vnesheconombank simply did not have the exorbitant sums Kushner was asking.

We know how much we was trying to get from his subsequent negotiations with another Eurasian power.

As a prelude to that, do you remember how China moved carefully in the early days of Trump presidency. They reached out to Ivanka who showed up for the Chinese New Year celebration at the Washington embassy.

Alibaba's Jack Ma met with Trump to promise to create one million US jobs.

Beijing leaned on Chinese courts to accelerate the approval of 38 Trump trademarks.

Instead of open confrontation, Xi Ping worked with Defense Secretary Mattis and Secretary of State Tillerson to get Trump to confirm the One china policy.

So in late March a shadowy Chinese company moved to save the Kushner building on Fifth Avenue with a "sweetheart deal."

The investor in question was the Anbang Insurance Group founded in 2004 and it now claims to have assets over $300 billion. Its financing sources are unknown and its CEO Wu Xiaohui (who married Deng Xiaopeng's grand daughter) is very politically connected.
Company records have also shown members of the board to include the son of a top military commander under former leader Mao Zedong and the son of China's former prime minister Zhu Rongji
666 Fifth Avenue is a building Jared purchased in 2007 for $1.8 billion, a record for a Manhattan property. When the 2008 crisis hit the building became the proverbial albatross around his neck. So much so that in 2011, a Trump partner, Vornado Realty Trust  acquired %49.5 of the office space for a capital injection of just $80 million. A year later Vornado purchased any available ground floor retail spaces for $707 million.

What is a "sweetheart deal" you might ask.
 The deal would value the 41-story tower at $2.85 billion, the most ever for a single Manhattan building: $1.6 billion for the office section and $1.25 billion for the retail section. The new partnership will refinance $1.15 billion in existing mortgage debt.
"This is a huge, huge exit strategy for an office building," said Joshua Stein, a New York real estate lawyer. "It does sound like a home run of a transaction for Kushner and his group.”
This is not all.
The deal would allow Vornado Realty Trust -- which is partnered with Trump in his two most valuable properties -- to exit a troubled asset with a 10-fold payout on its stake in the building’s offices and a doubling of its investment in its stores. 
There is also this:
An unusual consideration in the refinancing plan is the proposal to pay off a part of the mortgage known as a "hope note," which was for $115 million when Kushner Cos refinanced its debt in 2011. The loan, which was made by Barclays Plc and has since been sold off to investors, is now valued at more than $250 million because of compounded interest. But according to the deal documents, the Kushners will settle the debt for just $50 million. 
The deal would also give $400 million to Kushner and one fifth equity in the new building.

This was such an obvious conflict of interest situation that the outcry that followed the Bloomberg reporting killed the deal immediately.

But they are still looking as the building is losing money and a mortgage payment of $1.2 billion is due in two years.

And China is at the top of the Kushners list.

A couple of weeks ago, Nicole Meyer Kushner was in China looking to raise $150 million for another real estate deal. Just like the previous deal, this one also involved EB-5 visa scheme for the investors.

For its part, China is happy to oblige the Trump klan.

An undercover activist who worked China Labor Watch (CLW) was arrested while checking Ivanka Trump's shoe supplier.
In 17 years of investigating Chinese factories it was "the first time any our investigators have been detained under a criminal process," Mr Li said.
It is their way of saying that they will look after Trump family interests.

So the search for another sweetheart deal continues and either China or Russia will step up.

As I mentioned recently, grift is at the heart of the Trump Administration.

And everything, including American foreign policy, is subservient to that.