Brazil: New Phase of ‘Car Wash’ Corruption Probe

August 23, 2017

RIO DE JANEIRO — Brazil’s federal police said on Wednesday they launched a new phase of the “Car Wash” corruption probe, targeting individuals who allegedly favored a private contractor to win business from state-run oil company Petroleo Brasileiro SA.

The police served four search warrants in two states and the federal district, a statement said. There was evidence that two individuals allegedly paid bribes to help an unnamed U.S.-based company obtain Petrobras contracts, police said.

Last week, Brazilian authorities carried out two new phases of “Car Wash,” ensnaring U.S. asphalt maker Sargeant Marine, six Greek shipping companies and a former Brazilian congressman in the wide-ranging graft probe.

The phase announced Wednesday targets two lawyers who allegedly participated in the scheme, and received commissions related to the hiring of an unnamed U.S. company, according to the statement.

It is not clear if the U.S. firm implicated last week is the same as the one this week, but the police said the latest operation extends the work of recent prior phases.

The police are holding a news conference at 10 a.m. local time (1300 GMT).

Separately, late Tuesday Brazil’s Supreme Court agreed to put former president and current Senator Fernando Collor on trial on corruption charges.

Collor allegedly took millions of dollars in bribes between 2010 and 2014 to help UTC Engenharia and other firms win contracts with BR Distribuidora SA, the fuel distribution unit of Petrobras, according to prosecutors.

Collor’s office did not immediately respond to a request for comment.

Collor is the second former Brazilian president to face trial on corruption charges. Earlier this month former leader Luiz Inacio Lula da Silva was found guilty on graft charges. He is free, pending an appeal.

(Reporting by Pedro Fonseca; Editing by W Simon and JS Benkoe)

Iran opposition leaders ‘protected’ under house arrest: court

August 23, 2017

AFP

© AFP/File | Iranian opposition leader Mir Hossein Mousavi was put under house arrest in 2011

TEHRAN (AFP) – Iranian opposition leaders have been “protected” under house arrest for six years and would regret facing trial, a court chief said Wednesday, amid calls for them to be allowed to face justice.

“A trial will bring regret for these people… because the court and the system do not joke around with anyone and do their legal duty with determination, power and precision,” said Mousa Ghazanfarabadi, the head of Tehran’s Revolutionary Court.

Quoted by the Dana news website, he was responding to renewed demands that former presidential candidates Mir Hossein Mousavi and Mehdi Karroubi finally face trial for their part in the Green Movement protests of 2009.

The protests — known as “the sedition” by hardliners — followed allegations of rigging in that year’s election, which they lost to hardliner Mahmoud Ahmadinejad.

They were put under house arrest in early 2011 but have never been charged with a crime.

“Under house arrest, the heads of the sedition are protected and cared for,” said Ghazanfarabadi.

He suggested that if Mousavi and Karroubi were set free, they may be harmed by someone trying to delegitimise the regime.

The demands of reformists to put them on trial “are not the words of sympathisers of the revolution,” he added.

“Those saying it may not be aware, but these are the words of foreigners.”

Karroubi went on a brief hunger strike this month to demand a trial and the removal of intelligence agents recently posted inside his home.

Although his family said there had been assurances the intelligence officers would be removed, this was later denied by the conservative-dominated judiciary.

President Hassan Rouhani has repeatedly said he would work for the release of Mousavi and Karroubi, and thousands chanted their names during his re-election rallies in May, but the judiciary has reiterated that he has no jurisdiction over the case.

Netanyahu denounces Iran ‘threat’ in Putin talks

August 23, 2017

AFP

© SPUTNIK/AFP | Russian President Vladimir Putin (right) meets with Israeli Prime Minister Benjamin Netanyahu at the Bocharov Ruchei state residence in Sochi on August 23, 2017

MOSCOW (AFP) – Israeli Prime Minister Benjamin Netanyahu on Wednesday said Iran wielded growing influence In Syria that was a “threat” to his country as he met with Russian President Vladimir Putin, a figure in the Syrian crisis.”Iran is putting in great efforts to fortify its presence in Syria. This is a threat for Israel, for the Middle East and, I believe, for the whole world,” Netanyahu said in remarks translated into Russian posted on the Kremlin’s website.

“Iran has furthered its control and influence on Iraq, on Yemen. In practice, it in many ways has real control over Lebanon,” he said as the two met in Russia’s Black Sea resort of Sochi.

“Where we overcome ISIL and it disappears, Iran comes in,” Putin said, referring to an acronym for the Islamic State jihadist group, also known as ISIS and Daesh.

“We cannot forget for a minute that Iran continues to threaten to destroy Israel on a daily basis,” Netanyahu said, accusing Tehran of “arming terrorist organisations.”

Putin supports the regime of Bashar al-Assad, which is also strongly backed by Iran.

Since Syria’s civil war erupted in 2011, Israel has maintained a policy of attacking arms convoys intended for its Lebanese arch-foe Hezbollah, which backs the Syrian regime and fought a devastating war against the Jewish state in 2006.

Netanyahu had also opposed a ceasefire agreed by Russia and the US in southwest Syria last month over Iranian presence there.

Israel seized 1,200 square kilometres (460 square miles) of the Golan Heights from Syria in the Six-Day War of 1967 and later annexed it in a move never recognised by the international community.

Around 510 sq. km. remain under Syrian control.

Israel and Iran regularly accuse each other of being a threat to stability in the region.

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© Saudi Royal Palace/AFP/File / by Ali Choukeir | A handout picture provided by the Saudi Royal Palace on July 30, 2017 shows Crown Prince Mohammed bin Salman (R) receiving prominent Iraqi Shiite cleric Moqtada al-Sadr in Jeddah

Philippine Leader Tells Police to Kill Only if Necessary in War on Drugs — Death of Kian Loyd Delos Santos May Change the Course… After 12,500 Wrongful Deaths: HOPE! — Time to Return to Rule of Law and Due Process

August 23, 2017

MANILA — Philippine President Rodrigo Duterte on Thursday backed police on the front lines of a war on drugs that he said would not cease, but warned officers their duty was to arrest suspects and kill only if their lives were in danger.

The firebrand leader, now facing the most intense scrutiny so far in his controversial but popular crackdown, said he could not justify last week’s high-profile killing of a high school student, and police responsible had not followed instructions and would face justice.

Though Duterte stood firmly behind a campaign that has killed thousands of mostly urban poor Filipinos, his remarks were a departure from the bellicose rhetoric that critics say has created a culture of impunity and emboldened police to execute suspects. Police reject that.

“You are not allowed to kill a person that is kneeling down begging for his life. That is murder,” Duterte said in a speech.

“When I say you get him, it includes doing the arresting and then if there is a violent resistance, they (police) have to defend themselves.”

Kian Loyd Delos Santos, 17, was among more than 90 people killed in three days of intensified police operations last week that marked the bloodiest chapter of a campaign that has alarmed the international community.

Security camera footage showed a man matching the victim’s description being dragged by plain-clothes police to an alley where he was found dead. Police said he was a drug courier, but his family insisted he was unarmed, innocent, and murdered.

His death has attracted huge domestic attention, with political opponents demanding the killings stop and some churches opposing the bloodshed and ringing bells at night in protest. Demonstrations have taken place, the latest a small rally outside police headquarters on Wednesday.

Duterte has repeatedly vowed to pardon police convicted of abuses during his anti-drug campaign, but on Wednesday he said there would be no protection for those who broke the rules of engagement.

“Let us be clear on this. I said I will protect those who are doing their duty. I never promised to protect those who are supposedly engaged in doing their duty but committing a crime in the process,” he said, adding that abuses “cannot be done”.

Condemnation of Duterte’s 14-month-old war on drugs has come mainly from human rights groups, political opponents and foreign critics, with Filipinos largely supportive of the campaign, echoing the government view that the suppression of drugs use is making the streets safer.

Critics say that Duterte is turning a blind eye to systematic abuses and cover-ups with an unquestioning acceptance of an official police line that typically says those killed were drug dealers who had violently resisted arrest.

“I will not change my policy, there will be war on against drugs because I have to protect the people,” he said. “I have that sworn duty to defend the people and protect the republic.”

(For graphic on one time, big time” IMG, click http://tmsnrt.rs/2fO2d3k)

(Reporting by Martin Petty and Enrico dela Cruz; Editing by Nick Macfie)

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Duterte: I never said cops should shoot suspects on their knees

President Rodrigo Roa Duterte, in an interview with the Malacañang Press Corps (MPC) at the Malago Clubhouse, Malacañang Park in Manila on August 21, 2017, announces that he is searching for a competent secretary who will replace former Social Welfare and Development Secretary Judy Taguiwalo. ROBINSON NIÑAL JR/PRESIDENTIAL PHOTO

MANILA, Philippines — As he faces one of the stiffest criticisms to date yet of his war on drugs, President Rodrigo Duterte on Wednesday clarified that he did not order security personnel to kill suspects already on their knees and begging for their lives.

The president said that police and soldiers should shoot suspects only if the criminals violently resisted and threatened their lives.

“What I reminded again the military and the police is that it should be in the performance of your duty. You are not allowed to kill a person who is kneeling down begging for his life. That is murder,” Duterte said during the inauguration of a solar cell factory in Batangas.

Duterte’s comments stand in stark contrast to his previous statements to security forces in dealing with drug suspects.

In December last year, Duterte seemingly gave his go signal for police to plant evidence against drug suspects.

Duterte indicated in a speech last December that he had told police either to plant guns in crime scenes or to give suspects guns so they can shoot it out with arresting officers.

In July, Duterte said that cops and soldiers should make suspects fight back to justify the use of violence. He also bragged in a speech before jail personnel that he was the only president to have ordered the killing of criminals, especially of drug traders.

The Palace has regularly denied that Duterte had issued such orders, usually dismissing them as mere jokes, hyperbole or just expressions of frustration. It is not clear, however, if this was how security personnel understood the president’s statements.

The chief executive has said that he will protect cops who do their duty and warned those who abuse their authority.

Kian’s death ‘not performance of duty’

Duterte also called the death of 17-year-old Kian Loyd Delos Santos as “bad” and “not performance of duty,” warning policemen against committing crimes.

“I’m not justifying yung sa Caloocan. It was really bad. Hindi naman performance of duty yung ganun,” he said.

He said that the main duty of police officers is to arrest suspects, and resistance to arrest must be overcome by security officers.

“In resisting, lumaban ka, the police is just doing his duty, and he is not supposed to die doing his duty. Kaya pag mag-resist ka, he must overcome the resistance. If you have a gun, he just has to shoot you,” the president explained.

The PNP Operations Manual justifies the use of firearms “if the offender poses imminent danger of causing death or injury to the police officer or other persons.” According to regulations, “the use of firearm is also justified under the doctrines of self-defense, defense of a relative, and defense of a stranger,”

The same manual cautions, however, that “unlawful aggression should be present for self-defense to be considered as a justifying circumstance.”

‘Abuses, that cannot be done’

The chief executive reiterated his pledge to protect police officers performing their duty and vowed to make abusive cops accountable.

“I never promised to protect those who are supposedly engaged in doing their duty but committing a crime in the process. Abuses, that cannot be done,” he said.

The death of Delos Santos sparked widespread public outrage as a video and witnesses said that the boy was dragged by arresting cops to the alley where he was later found lifeless.

The police Internal Affairs Service has said that two police officers involved in the operation have admitted to being the men seen in the security footage. The PNP Crime Laboratory also found no traces of gunpowder on Delos Santos’ hands.

Police said that the teenager was a drug courier and his family was into the trade of illegal drugs. The Delos Santoses have denied this.

Kian is among the scores killed in drug operations in Bulacan and Metro Manila last week. This was described as one of the bloodiest since Duterte started his brutal campaign against narcotics in July last year.

http://www.philstar.com/headlines/2017/08/23/1731980/duterte-i-never-said-cops-should-shoot-suspects-their-knees

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Egypt criticises US decision to cut aid

August 23, 2017

AFP

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© AFP/File | US President Donald Trump’s arrival in office initially saw an improvement in relations with Egypt, after Barack Obama had given President Abdel Fattah al-Sisi the cold shoulder over rights issues
CAIRO (AFP) – Egypt on Wednesday criticised a US decision to reduce financial aid and withhold some military assistance as a “misjudgment” of strategic ties between the two allies.The foreign ministry said it “regrets the decision” to reduce some funds allocated under a US assistance programme and withhold the disbursement of other military aid.

It provided no details of the cuts, but US media reports said Washington on Tuesday denied Egypt $96 million in aid and delayed $195 million in military funding because of concerns over its human rights record.

“Egypt considers this step as a misjudgment of the nature of the strategic relations that binds the two countries over decades,” the foreign ministry said in a statement.

The move “reflects the lack of understanding of the importance of supporting the stability and success of Egypt” and “implies a mixing of cards that may have negative repercussions,” it said.

The New York Times quoted the State Department as saying the move followed a lack progress on human rights and a new law restricting activities of nongovernmental organisations.

US President Donald Trump’s arrival in office earlier this year initially saw an improvement in relations with Egypt, after his predecessor Barack Obama had given President Abdel Fattah al-Sisi the cold shoulder over rights issues.

Obama temporarily suspended military aid to Egypt after the July 2013 overthrow of Islamist president Mohamed Morsi and a bloody crackdown on Morsi’s supporters that followed.

Sisi in May ratified the NGO law, which critics say will severely restrict the work of civil society, including by banning the carrying out and publishing of studies without prior permission from the state, with large fines for violating the law.

Trump set aside criticism of Sisi’s rights record while pledging to maintain support for the key US ally, which receives an annual $1.3 billion in military aid.

Egyptian authorities have been fighting an insurgency based in the north of the Sinai Peninsula, where an Islamic State group affiliate has killed hundreds of soldiers and policemen.

The Pentagon is also concerned with preventing jihadists from crossing Libya’s porous border with Egypt.

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Stocks steady with markets hopeful on US tax plan — But if U.S. Congress fails to act, Banks warn of trouble ahead

August 23, 2017

AFP

    23 August 2017 – 13H00
© AFP | Markets steadied after a rebound based on renewed optimism over chances President Donald Trump may succeed in reforming the US tax system.

LONDON (AFP) – European and Asian stock markets steadied Wednesday after a global equities rally driven by optimism over a US tax reform plan, but President Donald Trump’s comments about terminating a key trade agreement capped gains.The euro gained against the dollar following well-received eurozone data, analysts said.

“Manufacturing and services PMIs from the eurozone, Germany and France were all very strong and well above the level that separates growth from contraction, suggesting that the recovery is continuing to gain traction,” said Craig Erlam, senior market analyst at Oanda trading group.

In London, British advertising giant WPP saw its share price slump almost 12 percent to 1,405 pence after the company cut its full-year revenue forecast.

“WPP is very much seen as the bellwether of the advertising industry and as such is widely regarded as a global economic barometer and so it is unsurprising the shares have reacted,” Graham Spooner, investment research analyst at The Share Centre, said in a client note.

Provident Financial won 1.1 percent to 596 pence, a day after the ailing UK lender’s share price had crashed 66 percent.

Overall, stock markets had chalked up a comeback Tuesday after struggling in recent weeks owing to a standoff between the US and North Korea, which had been compounded by last week’s terror attack in Barcelona.

The US president’s woes have fuelled speculation he will struggle to push through his market-friendly economy-boosting policies that fanned a global market rally in the months after his November election.

Despite ongoing chaos at the White House, markets have been heartened by reports suggesting that the Trump administration was making headway on a tax reform plan.

“Some of the US political uncertainty may have been removed by a report on the Trump administration making progress on tax reform, but a wait-and-see mood is strong ahead of Jackson Hole and tensions in North Korea still in place,” said Tsutomu Nakamura, strategist at Ueda Harlow Corp., referring to a central bankers meeting on Friday.

The yen rose as investors pushed into safer investments after Trump said in a US speech that he may end the North American Free Trade Agreement, and vowed to pressure Congress to fund a border wall with Mexico that was at the centre of his election campaign.

The stronger yen pared some gains in Tokyo where the benchmark Nikkei 225 index ended 0.3-percent higher Wednesday, while Seoul and Taipei edged up 0.1 percent and Singapore was flat.

But Shanghai ended 0.1-percent lower and Sydney slipped 0.2 percent.

Hong Kong’s stock market was closed as powerful Typhoon Hato brought the southern Chinese city to a standstill.

All eyes are on the Jackson Hole symposium in Wyoming at the end of the week, which brings together the world’s top central bank chiefs.

Much of the attention will be on Federal Reserve boss Janet Yellen, with hopes for some clues about the bank’s plans to wind in its huge bond holdings.

European Central Bank chief Mario Draghi’s speech will also be closely watched as Frankfurt-based policymakers consider cutting back their bond purchases.

– Key figures around 1015 GMT –

London – FTSE 100: FLAT at 7,379.18 points

Frankfurt – DAX 30: DOWN 0.1 percent at 12,223.04

Paris – CAC 40: FLAT at 5,132.31

EURO STOXX 50: FLAT at 3,454.63

Tokyo – Nikkei 225: UP 0.3 percent at 19,434.64 (close)

Hong Kong – Hang Seng: closed

Shanghai – Composite: DOWN 0.1 percent at 3,287.71

Euro/dollar: UP at $1.1781 from $1.1764 2100 GMT

Pound/dollar: DOWN at $1.2796 from $1.2821

Dollar/yen: DOWN at 109.33 yen from 109.56 yen

Oil – Brent North Sea: DOWN 30 cents at $51.57 per barrel

Oil – West Texas Intermediate: DOWN 18 cents at $47.65

burs-bcp/rl

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Saudis Open Iraqi Border and Forge Ties to Counter Iran

August 23, 2017

Backed by U.S., kingdom pursues influence as neighbor emerges from ISIS battle

A picture provided by the Saudi Royal Palace shows Saudi King Salman, right, meeting with Iraqi Prime Minister Haider al-Abadi in Mecca in June.
A picture provided by the Saudi Royal Palace shows Saudi King Salman, right, meeting with Iraqi Prime Minister Haider al-Abadi in Mecca in June. PHOTO: BANDAR AL-JALOUD/AGENCE FRANCE-PRESSE/GETTY IMAGES

Aug. 23, 2017 5:30 a.m. ET

ARAR, at the Saudi Arabia-Iraq Border—Saudi Arabia, with U.S. assistance, is pushing aside years of rancor with its neighbor Iraq and mounting a broad effort to win Baghdad’s allegiance and dilute Iran’s influence over the pivotal U.S. ally.

Saudi authorities are courting Iraq’s Shiite leaders, expanding the kingdom’s diplomatic presence, opening direct flights and reopening crossings closed for decades on the heavily fortified, 600-mile border.

“We share historical, cultural and social links with Iraq,” Thamer al-Sabhan, minister of state for Gulf affairs said after stopping at the newly reopened Arar border crossing. “If anything, I think we should be moving even faster.”

The shift provides a political and economic lift to the Iraqi government as it drives Islamic State from the country and moves to rebuild.

For Washington, it is part of a push to align Iraq “a little more toward the Saudi Arabias and Turkeys of the world—and to blunt a little bit the Iranian influence,” said a U.S. official, who described Saudi-Iraqi friendship as a priority for the Trump administration. “It’s never too late.”

The U.S.-led coalition against Islamic State, which includes Saudi forces, has fought on the same side as Iran against the Sunni extremist group. Success in largely vanquishing the group, also known as Daesh, creates an opportunity for the coalition allies to gain leverage in Iraq.

“We have been focused over the last three years not only on defeating Daesh, but on what comes after Daesh,” Brett McGurk, the U.S. envoy to the coalition fighting Islamic State, said at the border with Mr. Sabhan. “We will do everything we possibly can to support your effort,” he told Iraqi and Saudi officials gathered there.

Relations, and the Saudi-Iraqi border, were shut down in 1990 with Iraqi leader Saddam Hussein’s invasion of Kuwait. The Saudi monarchy kept its back turned on its northern neighbor in the years of war and instability that followed Saddam’s fall in 2003, leaving Iran to expand its sway through Iraq’s government, the powerful militias and the economy.

A new Saudi leadership is driving the shift, an example of the intensified efforts by King Salman and Crown Prince Mohammed bin Salman to counter Iranian influence across the region, including a war against rebels in Yemen aligned with Iran.

Iraq Prime Minister Haider al-Abadi has welcomed the counterweight to Iran. The Saudi outreach comes as he battles a political rival who is close to Tehran, former Prime Minister Nouri al-Maliki, ahead of parliamentary elections next year.

Iraqis arrive at pilgrimage lodgings in Saudi Arabia on their way to the annual hajj this month.
Iraqis arrive at pilgrimage lodgings in Saudi Arabia on their way to the annual hajj this month. PHOTO: SAUDI PRESS AGENCY/DPA/ZUMA PRESS

The first of around 140 flights connecting Baghdad, Riyadh and other cities each month are set to start in the coming weeks, Saudi and Iraqi officials said.

The border crossing at Arar was reopened this month for trade and travelers, just in time for Iraqis to make the annual hajj pilgrimage to Mecca, now under way. Officials have agreed to open a second crossing next year.

Saudi efforts to rebuild relations got off to a rocky start. Soon after Saudi Arabia reopened its embassy in Baghdad in late 2015, Mr. Sabhan, the ambassador at the time, was expelled for criticizing Iraq’s Shiite militias and their ties to Iran.

But when he showed up on the Iraqi side of this desert outpost last week, Iraqi pilgrims lined up for selfies.

Saudi Crown Prince Mohammed bin Salman, right, receives Iraqi Shiite cleric Moqtada al-Sadr in Jeddah, Saudi Arabia on July 31.
Saudi Crown Prince Mohammed bin Salman, right, receives Iraqi Shiite cleric Moqtada al-Sadr in Jeddah, Saudi Arabia on July 31. PHOTO:SAUDI PRESS AGENCY/ASSOCIATED PRESS

“We are finally returning to the fold of our Arab brothers,” said Abed al-Maliki, one of the thousands of mostly Shiite Iraqi pilgrims who have crossed the border at Arar recently. A billboard of King Salman and Crown Prince Mohammed bin Salman greeted the pilgrims as they entered the kingdom.

The U.S. has been a broker in the rapprochement. Soon after the start of his tenure in February, Secretary of State Rex Tillerson sought to persuade his Saudi counterpart, Adel al-Jubeir, that the kingdom should carve out a bigger role for itself in Iraq, a U.S. official said.

Days later, on Feb. 25, Mr. Jubeir flew to Baghdad, the first by a Saudi foreign minister in decades. The trip marked a turning point. In June, Mr. Abadi traveled to the kingdom on an official visit, during which the two sides agreed to set up a joint council to upgrade ties in areas from security to trade.

Then, at the end of July, Iraqi cleric and Shiite leader Moqtada al-Sadr met with Crown Prince Mohammed in Saudi Arabia.

Until recently that encounter would have been unthinkable: The Iraqi cleric had repeatedly railed against the Sunni kingdom, and condemned its execution of prominent Saudi Shiite cleric Nimr al-Nimr in early 2016.

An Iraqi pilgrim, far right, poses for a photo with Saudi minister Thamer al-Sabhan at the newly reopened Arar border crossing last week.
An Iraqi pilgrim, far right, poses for a photo with Saudi minister Thamer al-Sabhan at the newly reopened Arar border crossing last week. PHOTO: MARGHERITA STANCATI/THE WALL STREET JOURNAL

Iranian officials didn’t respond to a request for comment and Iran hasn’t commented publicly about the renewed Saudi-Iraqi ties.

Saudi Arabia is now seeking to expand its diplomatic presence across the country. The first new consulate, in Najaf, the spiritual and academic heartland of Shiite Islam, is likely to open in the next two months, Saudi and Iraqi officials said. More are set to open, in the southern city of Basra and in Mosul, the second-largest city in Iraq.

But the Saudi push faces resistance. Many Iraqis blame Saudi Arabia for the rise of Sunni extremism in their country, saying the Saudis fueled its appeal through its strict interpretation of the faith.

Some Iraqis equate Saudi Arabia with Islamic State, pointing to the thousands of Saudis who have joined the group.

“The Saudis are fighting us only because we are Shiite, and now they want to be present in Najaf?” Ali Faza Mahdi, a 25-year-old member of a Shiite militia, said during a visit to Najaf’s shrine to Imam Ali, the venerable Shiite figure. “If they open a consulate here, we will attack them, just like we fought them at the front” near Mosul.

In Najaf, Shiite clerics aligned with Iran oppose rapprochement with Saudi Arabia, people close to the religious establishment said. Others—among them Grand Ayatollah Ali al-Sistani, the spiritual leader of Iraq’s Shiites—favor it as way to offset Iranian influence and to defuse Sunni-Shiite tensions in the region.

“Those who say: ‘We want nothing to do with Saudi Arabia’ are wrong,” said Dhiya al-Assadi, who is close to Mr. Sadr, the Iraqi cleric. “Iraq cannot ignore its surroundings.”

Saudi companies, including oil giant Aramco, are eyeing opportunities for investment in Iraq in areas including petrochemicals and agriculture. The Saudi dairy Almarai is considering producing animal feed in the impoverished border province of Muthanna, Saudi and Iraqi officials said.

Muthanna stands to benefit significantly from improved ties. Before the province’s Jumaima border crossing was closed 27 years ago, Muthanna thrived on trade between the two countries. Saudi Arabia exported goods ranging from cars to cigarettes to processed food to Iraq through the province, which in turn could sell dates and cement from its factory in the Saudi market. Shepherds and camel herders crossed the frontier freely.

Local officials in Muthanna estimated it would cost some $50 million to repair the dilapidated border crossing and the road leading to it.

“We lost all our prosperity when ties with Saudi were cut,” said Reesan Mutasher al-Zayad, a sheikh whose tribe straddles the border. “People have high hopes,” he said. “We look forward to having good relations with our Saudi brothers.”

Write to Margherita Stancati at margherita.stancati@wsj.com

https://www.wsj.com/articles/saudis-open-iraqi-border-and-forge-ties-to-counter-iran-1503480601

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Wall Street Banks Warn Winter Is Coming as Business Cycle Peaks

August 23, 2017

Bloomberg

By Sid Verma and  Cecile Gutscher

August 22, 2017, 12:47 PM EDT August 23, 2017, 4:48 AM EDT
  • HSBC, Citigroup, Morgan Stanley say end of market boom is nigh
  • Breakdown in trading patterns is signal to get out soon
 Image result for Morgan Stanley, signage, photos

Gallo Says Investors Are Looking for Next Piece of Sugar

HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle.

Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.

“Equities have become less correlated with FX, FX has become less correlated with rates, and everything has become less sensitive to oil,” Andrew Sheets, Morgan Stanley’s chief cross-asset strategist, wrote in a note published Tuesday.

His bank’s model shows assets across the world are the least correlated in almost a decade, even after U.S. stocks joined high-yield credit in a selloff triggered this month by President Donald Trump’s political standoff with North Korea and racial violence in Virginia.

Morgan Stanley

Just like they did in the run-up to the 2007 crisis, investors are pricing assets based on the risks specific to an individual security and industry, and shrugging off broader drivers, such as the latest release of manufacturing data, the model shows. As traders look for excuses to stay bullish, traditional relationships within and between asset classes tend to break down.

“These low macro and micro correlations confirm the idea that we’re in a late-cycle environment, and it’s no accident that the last time we saw readings this low was 2005-07,” Sheets wrote. He recommends boosting allocations to U.S. stocks while reducing holdings of corporate debt, where consumer consumption and energy is more heavily represented.

That dynamic is also helping to keep volatility in stocks, bonds and currencies at bay, feeding risk appetite globally, according to Morgan Stanley. Despite the turbulent past two weeks, the CBOE Volatility Index remains on track to post a third year of declines.

Morgan Stanley

For Savita Subramanian, Bank of America Merrill Lynch’s head of U.S. equity and quantitative strategy, signals that investors aren’t paying much attention to earnings is another sign that the global rally may soon run out of steam. For the first time since the mid-2000s, companies that outperformed analysts’ profit and sales estimates across 11 sectors saw no reward from investors, according to her research.

“This lack of a reaction could be another late-cycle signal, suggesting expectations and positioning already more than reflect good results/guidance,” Subramanian wrote in a note earlier this month.

Zero Alpha Beats – Bank of America Corp

Oxford Economics Ltd. macro strategist Gaurav Saroliya points to another red flag for U.S. equity bulls. The gross value-added of non-financial companies after inflation — a measure of the value of goods after adjusting for the costs of production — is now negative on a year-on-year basis.

“The cycle of real corporate profits has turned enough to be a potential source of concern in the next four quarters,” he said in an interview. “That, along with the most expensive equity valuations among major markets, should worry investors in U.S. stocks.”

The thinking goes that a classic late-cycle expansion — an economy with full employment and slowing momentum — tends to see a decline in corporate profit margins. The U.S. is in the mature stage of the cycle — 80 percent of completion since the last trough — based on margin patterns going back to the 1950s, according to Societe Generale SA.

Societe Generale SA

After concluding credit markets are overheated, HSBC’s global head of fixed-income research, Steven Major, told clients to cut holdings of European corporate bonds earlier this month. Premiums fail to compensate investors for the prospect of capital losses, liquidity risks and an increase in volatility, according to Major.

HSBC Holdings Plc

Citigroup analysts also say markets are on the cusp of entering a late-cycle peak before a recession that pushes stocks and bonds into a bear market.

Spreads may widen in the coming months thanks to declining central-bank stimulus and as investors fret over elevated corporate leverage, they write. But, equities are likely to rally further partly due to buybacks, the strategists conclude.

“Bubbles are common in these aging equity bull markets,” Citigroup analysts led by Robert Buckland said in a note Friday.

— With assistance by Cecile Vannucci

https://www.bloomberg.com/news/articles/2017-08-22/wall-street-banks-warn-winter-is-coming-as-business-cycle-peaks

Yemen: Pro-Houthi Fighters Call Powerful Ally ‘Evil’, Escalating Feud — Ex-president Ali Abdullah Saleh “transgressed a red line” — Part of Yemen’s self-made human catastrophe

August 23, 2017

DUBAI — Fighters loyal to the armed Houthi movement on Wednesday decried as “evil” the group’s main ally in Yemen’s civil war, ex-president Ali Abdullah Saleh, widening an unusual public rift as they fight a Saudi-led coalition for control of the country.

The “Popular Committees”, a body of rank and file pro-Houthi combatants, condemned Saleh’s description of them in a speech as a “militia,” criticizing the former leader who remains one of Yemen’s most powerful politicians and military figures.

“What (Saleh) said transgressed a red line and he could have only fallen into this because he’s evil and void of every good, patriotic or religious characteristic,” the collection of tribal and volunteer fighters said in a statement.

The tactical alliance between Saleh and the Houthis has often appeared fragile, with both groups suspicious of each other’s ultimate motives and sharing little ideological ground.

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An internally displaced woman and her daughter look over the city of Sana’a, Yemen, from the roof of this dilapidated building they call their new home. Photo: Giles Clarke/UN OCHA

While president, Saleh waged six wars against the Houthis from 2002 to 2009 and was for many years an ally of convenience for Saudi Arabia.

Big switches of loyalty are a feature of Yemen’s byzantine political landscape, particularly since 2011 “Arab Spring” unrest which led to Saleh’s fall in 2012.

A war of words has escalated in recent days between the Iran-allied Houthis and Saleh, who together run northern Yemen.

The two factions have traded barbs on responsibility for challenges such as unemployment and mounting hunger after 2-1/2 years of fighting the internationally recognized government, based in the south and backed by the Saudi-led coalition.

The alliance intervened in the civil war in 2015 to restore the government to power in the capital Sanaa. But the conflict, which has killed at least 10,000 people, is in stalemate.

At least 30 people were killed in an air strike that hit a small hotel north of Sanaa on Wednesday, the Houthis said. The Saudi-led coalition has controlled Yemeni air space since the war began.

Based in the southern port city of Aden, the government struggles to impose its writ over militias and armed groups there, but strife now looms for its northern foes.

In a speech on Sunday, Saleh summoned party supporters to hold a mass rally in Sanaa on Aug. 24, a planned show of force that has deeply irritated the Houthis.

Their leadership convened on Wednesday and recommended the announcement of a state of emergency and suspension of all “party activity”, telling Saleh’s supporters any mass gatherings should be made on battlefronts, not in public squares.

In comments that may deepen Houthi suspicions, the United Arab Emirates Minister of State for Foreign Affairs, Anwar Gargash, spoke approvingly of the rift, saying it “may represent an opportunity to break (Yemen’s) political deadlock.”

(Reporting by Noah Browning; editing by William Maclean and Mark Heinrich)

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Yemen’s self-made human catastrophe

18 August 2017 – Warning about escalating suffering in Yemen’s man-made catastrophe, senior United Nations officials today addressed the Security Council, calling on the international community to push for a political solution to the more than two-year-old conflict.

“Death looms for Yemenis by air, land and sea,” Special Envoy of the Secretary-General to Yemen, Ismail Ould Cheikh Ahmed told the 15-member Council in New York.

Reiterating one of the key points from Under-Secretary-General for Humanitarian Affairs and Relief Coordinator, Stephen O’Brien, who addressed the Council just moment earlier, Mr. Ould Cheikh Ahmed said that that diseases and epidemics are at unprecedented levels in Yemen.

“Those who survived cholera will continue to suffer the consequences of ‘political cholera’ that infects Yemen and continues to obstruct the road towards peace,” added Mr. Ould Cheikh Ahmed.

He noted that while the international community is united in its support of a peaceful solution, certain parties to the conflict take advantage of internal divisions and focus on personal interests.

“What is missing at this point is for the parties to the conflict, without any delays, excuses or procrastination, to demonstrate their intention to end the war and put the national interest above ay personal gains,” the UN envoy said.

Every day without serious action means more destruction and death, as well as the spread of terrorist groupsUN envoy for Yemen

Every day spent without serious action means more destruction and death, he said, as well as the spread of terrorist groups – such as the Al Qaeda in the Arabian Peninsula – and “uncontrolled migration” through the Gulf of Aden to Yemen, where more than 41 migrants died in early August after being forced to abandon their boats and jump.

Before the conflict, Yemen had been making progress, with fewer people hungry and rising school enrolment, Mr. O’Brien said in his statement.

“All of his has not been sharply reversed,” he said, noting that 17 million Yemenis are hungry, nearly 7 million facing famine, and about 16 million lack access to water or sanitation.

Mr. O’Brien highlighted several key challenges, including a funding shortage – the $2.3 billion Yemen Humanitarian Response Plan is only 39 per cent funded.

He also underscored the interference to movement of critical commercial and humanitarian supplies and staff.

“De facto authorities in Sana’a or local officials in areas under their control block, delay or otherwise interfere with humanitarian action,” said Mr. O’Brien.

The humanitarian official urged the international community to ensure that all ports are open to civilian, including to commercial traffic.

He called for those Governments and individuals with influence to influence the fighting parties to respect the international humanitarian and human rights law and to strengthen accountability.

With 1.2 million public employees not paid regularly for months, he also urged that civil servant salaries be paid so that the basic services in the country do not collapse.

“This human tragedy is deliberate and wanton – it is political and, with will and with courage which are both in short supply, it is stoppable,” he said, reiterating the UN’s ongoing calls for a political solution to the conflict.

http://www.un.org/apps/news/story.asp?NewsID=57380#.WZ1h-iiGOUk

Iraqi forces advance towards heart of IS-held bastion

August 23, 2017

AFP

© AFP / by Ahmad al-Rubaye | Detailed map of Tal Afar showing positions of forces in the area.
TAL AFAR (IRAQ) (AFP) – Iraqi forces advanced Wednesday towards central Tal Afar, one of the Islamic State group’s last strongholds in the country, as aid workers braced for an exodus of civilians fleeing the fighting.Armoured personnel carriers full of soldiers and fighters of the Hashed al-Shaabi paramilitary coalition moved into Al-Nur district early in the morning as warplanes flew overhead, said an AFP photographer on the ground.

They encountered trucks parked across roads with earthen embankments aimed at stopping them, as well as sniper fire and mortar shelling.

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 FILE PHOTO — A member of the Hashed al-Shaabi (Popular Mobilization Units) patrols in the village of Ayn Nasir, south of Mosul, on October 29, 2016. (Photos by AFP)

Six weeks after routing the jihadists from Iraq’s second city Mosul, the Iraqi forces launched an assault Sunday on Tal Afar, where an estimated 1,000 jihadists are holed up.

They retook three first districts of the city on Tuesday, but as with the gruelling nine-month campaign to recapture Mosul, their convoys face an onslaught of suicide and car bomb attacks.

On Wednesday they “entered the neighbourhood of Al-Kifah North… and headed towards the centre of the city,” said Ahmed al-Assadi, spokesman for the Hashed al-Shaabi paramilitary coalition fighting IS alongside the army and police.

“All the lines of IS defence outside the city have been broken and the troops are advancing from all directions towards the inner quarters of the city,” he added.

As they advanced, troops said they discovered a network of underground tunnels used by the jihadists to launch attacks behind lines of already conquered territory, or to escape.

– Leaflet drop –

In a bid to counter these surprise attacks, the Iraqis dropped leaflets overnight calling on civilians to help by marking houses where the jihadists are located.

The International Organization for Migration said “thousands of civilians” had fled Tal Afar since the offensive began.

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But around 30,000 civilians are trapped in the fighting, according to the United Nations.

Caught between the two sides, those still inside the city have been pounded by Iraqi and US-led coalition aircraft for weeks, as well as intense artillery fire since Sunday.

The UN refugee agency (UNHCR) fears they could be “used as human shields” and that “attempts to flee could result in executions and shootings,” said the spokesman for UN Secretary General Antonio Guterres.

The United Nations and aid agencies are working to establish shelters for the displaced.

Those who flee through desert areas face temperatures of up to 43 degrees Celsius (109 Fahrenheit), sometimes for periods of more than 10 hours, putting them at risk of dehydration, said Viren Falcao of the Danish Refugee Council.

Tal Afar was once a key supply hub for IS between Mosul — which lies around 70 kilometres (45 miles) to the east — and the Syrian border.

The Iraqi forces massed around Tal Afar on Tuesday before the jihadists responded with artillery fire.

Army, police and of the Hashed al-Shaabi paramilitary coalition later took “full control” of the Al-Kifah, Al-Nur and Al-Askari districts, the Hashed said

The Iraqi forces had encircled the city despite what Hashed spokesman Assadi called “intense” fighting. He said the battle for the city would probably last weeks, in contrast to the months-long battle for Mosul.

– ‘On the run’ –

After meeting Iraqi Prime Minister Haider al-Abadi in Baghdad on Tuesday, US Defence Secretary Jim Mattis said the jihadists were “on the run”.

“Cities have been liberated, people freed from ISIS, from Daesh,” Mattis said, using alternative names for IS.

The jihadists had not been able “to stand up to our team in combat, and they have not retaken one inch of ground that they lost,” he said.

Mattis declined to make any predictions about the battle.

“ISIS’s days are certainly numbered, but it’s not over yet and it’s not going to be over anytime soon,” he said.

IS jihadists in June 2014 overran Tal Afar, a Shiite enclave in the predominantly Sunni province of Nineveh.

At the time, its population of around 200,000 was overwhelmingly Turkmen, one of Iraq’s largest ethnic minorities.

Tal Afar’s Shiites were directly targeted by IS, while some members of its Sunni minority joined the jihadists and went on to form a contingent with a particularly brutal reputation.

by Ahmad al-Rubaye