Turkey Deploys "Fifth Batch" Of Troops To Qatar

While Rex Tillerson was actively seeking to resolve the Qatar crisis with his "shuttle diplomacy" tour across the Gulf, signing a memorandum of understanding with Qatar on fighting terrorism in Doha on Tuesday  after spending Monday in Turkey and Kuwait, Qatar said more Turkish troops had arrived at a Turkish military base in Doha after Ankara fast-tracked legislation in June expanding the troop deployment to Qatar.

According to Gulf Times, the Directorate of Moral Guidance at the Ministry of Defence has announced the arrival of the fifth batch of Turkish troops in Qatar.

According to the directorate, the batch is joining the Turkish forces currently in Doha (Tariq Bin Ziyad battalion camp). Arrival of the batch will boost training tasks within the framework of military co-operation between Qatar and Turkey and to activate the terms of defence agreements between the two countries.

The latest "training" exercise at the Qatari base - which houses Turkish soldiers under an agreement signed in 2014 - has been ongoing since June 19, with the continued base existence one of the key demands in the recently rejected Saudi ultimatum. As a reminder, at the end of June, Riyadh laid down a list of 13 demands for Qatar, including the closure of Al-Jazeera television, a downgrade of diplomatic ties with Iran and the the closure of the Turkish military base in the emirate. The UAE warned that Qatar should take the demands seriously or face a "divorce" from its Gulf neighbors. Ten days later, Qatar denied the accusations, calling the move "unjustified."

Even as the diplomatic crisis escalated, Turkey has been trying to do its best to mediate. Ankara displayed its support to Qatar as Parliament approved two deals to deploy troops to an air base in Qatar. Ankara"s latest troop deployment to Qatar is meant to increase stability and help Turkish peacemaking efforts function better according to Reuters. The deal to deploy troops to Qatari soil, which is expected to improve the country"s army and boost military cooperation, was signed in April 2016 in the Gulf country"s capital Doha. The deal was approved by Parliament after a period of one year.

"This defense cooperation between Doha and Ankara is part of their common defense vision to support anti-terrorism efforts and maintain security and stability in the region," a statement by Qatar"s Armed Forces said. The statement did not give the number of Turkish troops at the base or how many had just joined to bolster the deployment.

Arab States Issue 13 Demands To Qatar - Include Unfriending Iran, Shutting Down Al-Jazeera And Nixing Turkish Base

Content originally published at iBankCoin.com

Two days after the US State Department formally inquired about WTF is going on between Arab States and Qatar, the countries of Egypt, Saudi Arabia, Baahrain, and the UAE sent a list of 13 demands to the tiny Gulf nation to be met within 10 days in order to lift their total blockade of the country. Among them - reducing diplomatic ties with Iran, shutting down broadcaster Al Jazeera (and affiliates), and immediately cease working to open a Turkish military base announced in May of 2016. Also interesting is the demand that Qatar give up their intel on terrorist groups they have supported and "provide all databases related to oppositionists..." (Scroll down for full list of demands)

This formal list comes on the heels of a June 6th rumor that Arab States issued a list of 10 demands to be fulfilled within 24 hours, however Qatar said they never received them according to Al Jazeera journalists who are now dusting off their resumes.

Embargo

On June 5th, news broke that Bahrain, the UAE, Saudi Arabia, and Egypt had cut off diplomatic ties with Qatar over accusations of "spreading chaos" by "funding terrorism and supporting Iran" - shutting down all land, sea, and air crossings with the tiny energy-rich nation that has the highest per capita income in the world. Qatari visitors and residents were given two weeks to leave - while diplomats had just 48 hours.

 While Qatar has been friendly with Iran for years, the prelude to the embargo began after a broadcast which showed Qatari Emir Tamim bin Hamad Al Thani speaking with no audio - and scrolling text at the bottom of the screen which stated his support for Iran and terrorist groups. Qatar claims the broadcast was "hacked."

After the broadcast, Saudi Arabia and the UAE blocked Qatari news organization Al-Jazeera.

Amid Qatar’s denials, Saudi-owned satellite television networks immediately began airing repeated stories about the disputed comments. By early Wednesday morning, those living in the UAE and subscribers to local cable providers couldn’t access the channels of Al-Jazeera, the pan-Arab satellite broadcaster based in the Qatari capital, Doha.

Attempts to reach its websites brought up a warning from the UAE’s Telecommunications Regulatory Authority saying the site “contains content that is prohibited.”

In Saudi Arabia, internet users also found Al-Jazeera websites blocked with a warning from the kingdom’s Culture and Information Ministry.

-WaPo

Full List of demands (translated by @hxhassan)

1. Qatar must reduce diplomatic representation with Iran

2. Qatar must immoderately shut down the Turkish military base that is being established

3. Qatar must announce severance of ties with terrorist, ideological & sectarian orgs: MB, ISIS, AQ, HTS, Hizbollah

4. Qatar must cease any funding activities to extremist and terrorist individuals

5. Qatar must hand over all designated terrorists

6. Qatar must shut down Al Jazeera and all affiliated channels

7. Qatar must stop interference in these countries" domestic andforeign affairs; stop naturalisation of their citizens; extradite such citizens

8. Qatar must provide reparations to these countries for any opportunity costs incurred over the past few years because of Qatari policies. (How do they even begin to comply with this in 10 days?)

9. Qatar must become in sync with its Gulf and Arab neighbourhood on all levels, and to activate Riyadh Agreement 2013/2014

10. Qatar must provide all databases related to oppositionists that it provided support to & clarify what help was provided.

11. Qatar must all media outlets backed by it directly or indirectly, like Arabi21, Rasd, New Arab, Middle East Eye, Mkamlin, Sharq etc

12. These demands must be agreed within 10 days, otherwise they would be invalidated.

13. Agreement will involve clear goals and mechanism, monthly reports in the first year, every three months the next & annually for 10 years

If these demands are not met - it may only be a matter of time before Qatar catches a case of regime change...

  

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CNN Caught Faking News Again: Qatar Says News Agency Hacking Linked To Middle East, Not Russia

A couple of weeks ago we expressed some level of "amazement" at just how sophisticated, efficient and pervasive the "Russian hacking" community had become after CNN reported that they had managed to hack into a Qatari News Agency and post a "fake" news story all in an apparent attempt to drive a wedge between the U.S., Qatar and some of it"s Gulf Arab neighbors.

Think about that for a minute.  Set aside, if you will, the hacking event itself for just a moment and imagine how good the Russians had to be to know exactly what news story needed to be planted inside the Qatari news agency to provoke an immediate severing of diplomatic ties by numerous Arab neighboring states...it truly is mind boggling how it all played out exactly the way the Russians planned...these "Russian hackers" are certainly not a bunch of amateurs.

And while that may sound like a joke, it is, quite unfortunately, not...at least it wasn"t at CNN anyway.  Here are the details, as they were previously reported by CNN:

The FBI recently sent a team of investigators to Doha to help the Qatari government investigate the alleged hacking incident, Qatari and US government officials say.

Intelligence gathered by the US security agencies indicates that Russian hackers were behind the intrusion first reported by the Qatari government two weeks ago, US officials say. Qatar hosts one of the largest US military bases in the region.

The alleged involvement of Russian hackers intensifies concerns by US intelligence and law enforcement agencies that Russia continues to try some of the same cyber-hacking measures on US allies that intelligence agencies believe it used to meddle in the 2016 elections.

The Russian goal appears to be to cause rifts among the US and its allies. In recent months, suspected Russian cyber activities, including the use of fake news stories, have turned up amid elections in France, Germany and other countries.

As it turns out, it"s somewhat ironic that CNN accused Russia of spreading "fake news stories" that "have turned up amid elections in France, Germany and other countries" because, as Reuters reports today, their entire Qatari hacking narrative was all fake news.

According to reports from Qatar"s attorney general, it was an Arab neighbor state that severed ties with Doha (i.e. Saudi Arabia, Egypt, Bahrain and/or the United Arab Emirates) that was responsible for the hacking of Qatar"s state news agency and not the Russians. 

Qatar"s attorney general said on Tuesday his country has evidence that the hacking of Qatar"s state news agency was linked to countries that have severed ties with Doha.

Saudi Arabia, Egypt, Bahrain and the United Arab Emirates cut their ties with Doha earlier this month over comments alleged to have been made by the Emir Sheikh Tamim bin Hamad al-Thani and posted briefly on the Qatar News Agency"s website on May 23 which Doha said had been hacked.

"Qatar has evidence that certain iPhones originating from countries laying siege to Qatar were used in the hack," the Qatari Attorney General Ali Bin Fetais al-Marri told reporters in Doha.

Of course, just like the last time CNN got caught faking news, we are quite confident they will promptly retract their erroneous reporting and offer yet another apology to their readers for the unfortunate mistake created by their increasingly misinformed anonymous sources.

* * *

For those who missed it, below is our original post detailing the events leading up to the hacking of Qatar"s state news agency.

In an opportune coincidence, when discussing the Qatar crisis earlier today, we laid out the "official narrative" behind the dramatic fallout in diplomacy between Qatar and Saudi Arabia.

According to the official narrative, the reason for the latest Gulf crisis in which a coalition of Saudi-led states cut off diplomatic and economic ties with Qatar, is because - to everyone"s "stunned amazement" - Qatar was funding terrorists, and after Trump"s recent visit to Saudi Arabia in which he urged a crackdown on financial support of terrorism, and also following the FT"s report that Qatar has directly provided $1 billion in funding to Iran and al-Qaeda spinoffs, Saudi Arabia finally had had enough of its "rogue" neighbor, which in recent years had made ideologically unacceptable overtures toward both Shia Iran and Russia.

There was another detail that we should have mentioned: on May 23, a news report from the Qatari News Agency attributed to the the country"s ruler Sheikh Tamim bin Hamad al-Thani, criticized US foreign policy in the wake of U.S. President Donald Trump"s visit to Saudi Arabia, questioned whether the US President would last in office, and also appeared friendly to Iran.  Following the publication of the report which infuriated Qatar"s anti-Iranian friends and GCC members, Qatar said its state news agency had been hacked, although the report continued to be carried by media in some other Gulf Arab states, which as Reuters said at the time "suggested renewed strains between Qatar and some of its Gulf Arab neighbors."

"The Qatar News Agency (QNA) website has been hacked by an unknown entity. A false statement attributed to His Highness has been published," the Gulf Arab state"s government communications office said. "An ongoing investigation will be put in place to look into this matter. The statement published has no basis whatsoever, and the competent authorities in the State of Qatar will hold all those (involved) accountable." The incident took place four days after Qatar complained publicly that it was the target of "an orchestrated barrage" of criticism by unknown parties in the run-up to Trump"s visit alleging the Gulf state supported terrorist groups in the Middle East.

That said, the hacking did not figure anywhere in the "official narrative" because it was not part of the list of grievances voiced by Saudi Arabia and various nation states when they cut ties with Qatar on Tuesday, which they did not for the allegedly hacked statement, but because the small nation was supposedly funding terrorists. In fact, as we reported earlier today, in an ultimatum issued by Saudi Arabia, the oil-rich Kingdom demanded that Qatar cut all ties with the Muslim Brotherhood and Hamas, organizations which Saudi Arabia, its Arab allies and the current Egyptian regime, consider terrorist groups.

However, the reason we bring it up, is because it now appears that not only did Russians hack the US election, they also precipitated the Qatar crisis.

At least according to CNN, which citing "briefed US officials" says that US investigators believe it was Russian hackers who breached Qatar"s state news agency and planted the abovementioned fake news report that "contributed to a crisis among the US" closest Gulf allies." Which is ironic because, again going back to the "official narrative", it was Qatar"s support for terrorism, not a "hacked statement", that precipitated the crisis, but whatever: there was an alleged hacking, and who better to fill the void of hacker than, guess who, the Russians.

Here are the details, according to CNN:

The FBI recently sent a team of investigators to Doha to help the Qatari government investigate the alleged hacking incident, Qatari and US government officials say.

Intelligence gathered by the US security agencies indicates that Russian hackers were behind the intrusion first reported by the Qatari government two weeks ago, US officials say. Qatar hosts one of the largest US military bases in the region.

The alleged involvement of Russian hackers intensifies concerns by US intelligence and law enforcement agencies that Russia continues to try some of the same cyber-hacking measures on US allies that intelligence agencies believe it used to meddle in the 2016 elections.

Why would Russia hack Qatar? Because according to the US officials CNN spoke to "the Russian goal appears to be to cause rifts among the US and its allies. In recent months, suspected Russian cyber activities, including the use of fake news stories, have turned up amid elections in France, Germany and other countries"

Let"s ignore for now that France already confirmed that there were no traces of Russian hackers in the French election (it would have been a different story if Macron had lost).

Let"s algo ignore that just yesterday the FT reported that the trigger behind the crisis was a "hunting party of 26 Qataris in southern Iraq" who were ambushed and captured by the Iranian-backed Iraqi Shia militia Kata’eb Hizbollah, a hostage situation which Qatar eventually used as a pretext to give Iran $700 million in cash and another $200m-$300m to Islamist groups in Syria, mostly to Tahrir al-Sham, also known as al-Qaeda.

Let"s certainly ignore that none other than Bloomberg mused this morning that the long-running conflict between Qatar and the Saudis is the result of the true reason for the tension between the two nations: natural gas, and specifically Qatar"s dominance in the production and export of LNG, which affords the small nation political independence from Saudi Arabia. Because upon reflection, and after "intelligence gathered by US security agencies" somewhere in Qatar, it was a Russian-hacked press statement in the Qatar media that was the reason for the crisis.

So please ignore all you have read so far about the reasons behind the Qatar crisis: about Qatar funding terrorists, about Doha having ties with the Muslim Brotherhood and Hamas, about Qatari hunting parties in Iraq, and about natural gas.

It was the Russians.

For those who need to take a deep breath after all that, now is a good time because it only get more farcical. Back to CNN:

It"s not yet clear whether the US has tracked the hackers in the Qatar incident to Russian criminal organizations or to the Russian security services blamed for the US election hacks. One official noted that based on past intelligence, "not much happens in that country without the blessing of the government."

That"s the old "if anything happens in Russia, Putin knows all about it" gambit, which was used early on during the Russian election hacking scandal, and which appears to have faded somewhat, so now is a great time to bring it back to the surface.

Speaking to CNN, Qatar"s Foreign Minister Sheikh Mohammed Bin Abdulrahman al-Thani said the FBI has confirmed the hack and the planting of fake news.

"Whatever has been thrown as an accusation is all based on misinformation and we think that the entire crisis being based on misinformation," the foreign minister told CNN"s Becky Anderson. "Because it was started based on fabricated news, being wedged and being inserted in our national news agency which was hacked and proved by the FBI."

Sheikh Saif Bin Ahmed Al-Thani, director of the Qatari Government Communications Office, confirmed that Qatar"s Ministry of Interior is working with the FBI and the United Kingdom"s National Crime Agency on the ongoing hacking investigation of the Qatar News Agency.

"The Ministry of Interior will reveal the findings of the investigation when completed," he told CNN.

The above was already known, the only missing link was the identity of the alleged hackers. And that"s where the FBI and the CIA stepped in, because just days after the Qatari hacking, US intel services, who are supposed to be tracking down Russian hacking leads in the US election hacking scandal, had some free time, flew to Doha and were quick to uncover the missing Russian trace.

Ironically, the latest "Russian connection" emerged just hours after Trump - supposedly the recipient of Russian hacking generosity himself - slammed Qatar for financing terrorism. He did not address the false news report.

"So good to see the Saudi Arabia visit with the King and 50 countries already paying off," Trump said in a series of tweets. "They said they would take a hard line on funding extremism, and all reference was pointing to Qatar. Perhaps this will be the beginning of the end to the horror of terrorism!"

Well, no, because according to CNN it wasn"t terrorism that sparked this whole thing. It was... Russian hackers. Meanwhile, the real sponsors of terrorism in the region, Saudi Arabia which recently signed US weapons deals amounting to over a hundred billion dollars got a clean pass, now that Qatar emerged as the Middle eastern bogeyman. incidentally, 15 of 19 9/11 hijackers were Saudi citizens and last year, Congress passed a bill allowing US citizens to sue Saudi Arabia for its involvement in Sept 11.

CNN said that neither the FBI nor the CIA would comment. A spokeswoman for the Qatari embassy in Washington said the investigation is ongoing and its results would be released publicly soon, but not soon enough, and certainly not before CNN managed to break yet another geopolitical crisis being blamed on Russia.

* * *

Sarcasm aside, if indeed this is the story Qatar is going with, it should provide the country with an "out" from the 24 hour ultimatum that Saudi Arabia gave to Qatar as reported earlier, even if Saudi demands had nothing to do with a "hacked statement", and instead the two main demands by Saudi Arabia are that Qatar end all ties Muslim Brotherhood and Hamas.

Even more amusing, moments ago the Muslim country of Mauritania located in the African Maghreb joined the Saudi alliance, and also cut diplomatic ties with Qatar, saying that Qatar propagated "extremist ideas and spread anarchy and tensions in many Arab countries causing big humanitarian disasters in these countries, in Europe and in the world." 

Wait for it... it was the Russians. 

* * *

The silver lining to all of the above is that the Comey hearing, which earlier today lost some of its pay-per-view appeal after it was reported that the former FBI director would not accuse Trump of obstructing justice, just got interesting again.

Qatar Is Running Out Of Dollars

While the Saudi-led campaign to starve Qatar"s citizens may end up short of the target, with both Turkey and Iran volunteering to provide needed staples to the isolated Gulf nation while local entrepreneurs have started a cow paradropping campaign to offset the decline in milk imports, a more pressing problem has emerged: Qatar"s financial system is running out of dollars. As Bloomberg reports, several Qatari banks have boosted interest rates on dollar deposits to shore up liquidity as the Saudi-led campaign to isolate the gas-rich Arab state intensifies.

To boost their hard currency reserves, Qatar banks are now offering a premium of as much as 100 basis points over LIBOR to attract dollars from regional banks, some 80 bps higher compared to the rate they offered prior to last week"s crisis. A similar picture is visible on the 3-Month QIBOR, or Qatar Interbank Rate, which has surged to 2.3% as of Tuesday.

According to the central bank, at the end of April, Qatar"s banks held 21.4% of their customer deposits in foreign currency. Non-resident deposits made up 24% of the overall deposits of 781 billion riyals ($213 billion). A separate estimate from SICO Bahrain, Qatari banks have around 60 billion riyals ($16.5 billion) in funding in the form of customer and interbank deposits from other Gulf states. Most of this could eventually be withdrawn if the crisis continues.

Adding to concerns of a monetary blockade, Bloomberg also reports that some banks in neighboring countries have been cutting their exposure to Qatar amid concerns of a widening of the blockade.

In a Tuesday report, Capital Economics" Jason Tuvey wrote that while banks are unlikely “to be thrust into a crisis,” borrowing costs “look set to rise and banks are likely to become more cautious with their lending,”  “If local banks struggle to rollover their external debts, they could be forced to shrink their balance sheets and tighten credit conditions." For now the local central bank has said that Qatar"s banking system is functioning without disruption, although market indicators suggest liquidity stress is rising. Likewise, Qatar National Bank, the biggest lender in the Middle East, said it didn’t see any “significant” rate increases since the standoff began, according to statement emailed to Bloomberg on Tuesday.

The good news for Qatar - the world"s wealthiest nation on a GDP/capita basis - is that it has enough financial firepower to withstand a prolonged financial siege, and defend its currency and economy, Finance Minister Ali Shareef Al Emadi told CNBC in an interview broadcast Monday. Al Emadi played down the impact of the crisis on the country, saying the plunge in Qatari assets last week was a “normal” reaction to the standoff.

While so far there has been no suggestion that Qatar would commence liquidating its reserves, investors have already begun selling Qatari assets and speculating against the riyal, concerned how long Qatar can weather the crisis without having to devalue its currency or sell any of its global holdings. Qatar’s 12-month riyal forwards closed at 588 basis points against the dollar on Monday, the highest level since at least 2001, according to data compiled by Bloomberg. Rates eased slightly to about 500 basis points on Tuesday.

Despite the spike in interbank rates, S&P is confident that Qatari banks are strong enough to survive the pullout of all Gulf money and then some. The ratings agency ran two hypothetical scenarios of capital flight, and concluded that Qatar’s lenders could survive the withdrawal of all Gulf deposits plus a quarter of the remaining foreign funds the banks keep. Still, that did not prevent S&P from lowering Qatar’s long-term rating by one level to AA- last week.

Separately, Reuters reports, that the dollar shortage has also spread over to money exchange houses in Qatar on Sunday, making it harder for worried foreign workers to send money home.  

"We have no dollars because there is no shipment or transportation from the United Arab Emirates. There is no stock," said a dealer at the Qatar-UAE Exchange House in Doha"s City Center mall. "The shipment is blocked from the UAE" the dealer added, although it was not quite clear if it was physical cash that was being transported.

Other exchange houses in Doha also told Reuters they had no supplies of dollars. At Qatar-UAE Exchange, dozens of people - some of the foreigners who comprise nearly 90 percent of the population of 2.6 million - waited quietly in line to change money or make remittances to their home countries.

"I spoke with my wife this morning. She said, "Send your savings to me now." I am not panicked but my family are scared," said John Vincent, an air-conditioning repairman from the Philippines.

"I sent 2,000 riyals ($550) home but I have some more savings left here in Qatar. I will see what the situation is in coming days before I decide what to do."

Sudhir Kumar Shetty, president of UAE Exchange, which has eight branches in Qatar, said his firm was continuing to handle remittances and currency buying as usual in that country. He said the firm hadn"t seen any major change in remittance volumes due to the diplomatic tension.

But he added that dollar supply was not meeting demand in Qatar and attributed this partly to flows of the U.S. currency from other Gulf countries being disrupted.

"Everywhere, all the banks and exchange houses, there are no dollars. All the exchange houses are trying to get currencies from other countries," the dealer at Qatar-UAE Exchange said, adding that his firm was hoping for a shipment from Hong Kong.

For now most Western banks with a presence in Qatar have continued business as normal, partly because they did not want to lose out on billions of dollars of building projects which Qatar plans before it hosts the soccer World Cup in 2022.  But other Western banks have halted new Qatar business including interbank and syndicated lending, while continuing to service existing business, banking sources said, declining to be named because of political sensitivities.

"Everybody is shocked - they"re not worried about Qatar"s credit, they"re worried about compliance and the risk that the local sanctions could be escalated to an international level," said one foreign banker in the region.

In a worst case scenario, bankers expect Qatari banks to borrow from the central bank"s repo facility if they become short of funds. However, central bank rules limit the size of the repos to 2% of each bank"s private sector deposits. Bankers speculate the central bank may lift this cap although the central bank did not respond to Reuters requests for comment.

To Bypass Food Embargo, Qatar Will Pay $8 Million To Airlift 4,000 Cows

Yesterday we reported that as the Qatar crisis continues with no resolution in sight, in an act of generosity toward its distressed Gulf neighbor, Iran dispatched four cargo planes of food to Qatar and plans to provide 100 tonnes of fruit and vegetable every day. Qatar has also been holding talks with Iran and Turkey to secure food and water supplies after Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut links, accusing Doha of supporting terrorism.

However, any stopgap measures implemented so far are not nearly enough to compensate for all the food imports lost as a result of the gulf blockade. So, for the nation with the highest GDP/capita in the world, where money is largely not an object, an ingenious solution has emerged.

Call it the biggest bovine airlift in history, as Bloomberg puts it. Because while the "showdown between Qatar and its neighbors has disrupted trade, split families and threatened to alter long-standing geopolitical alliances", it has prompted one enterprising Qatari businessman to fly 4,000 cows to the Gulf desert in an act of resistance and opportunity to fill the void left by a collapse in the supply of fresh milk.

The reason for the dramatic "solution" to the millk embargo is that most of Qatar"s fresh milk and dairy products, meant for Doha’s more than 1 million residents, came from Saudi Arabia up until a week ago. That supply was cut off after the kingdom and its allies cut transport links with "a country that spends $500 million a week to prepare stadiums and a metro before the soccer World Cup in 2022."

According to Bloomberg"s calculations, it will take as many as 60 flights for Qatar Airways to deliver the 590-kilogram beasts that Moutaz Al Khayyat, chairman of Power International Holding, bought in Australia and the U.S. “This is the time to work for Qatar,” he said. In addition to the abovementioned airlifted Turkish dairy goods and Iranian fruit and vegetables, there’s also a campaign to buy home-grown produce. Signs with colors of the Qatari flag have been placed next to dairy products in stores. One sign dangling from the ceiling said: “Together for the support of local products.”

“Our government has made sure we have no shortages and we are grateful for that. We have no fear. No one will die of hunger.”

“It’s a message of defiance, that we don’t need others,” said Umm Issa, 40, a government employee perusing the shelves of a supermarket before taking a carton of Turkish milk to try.

Only you do, and those who provide the much needed milk will get even richer than they already are.

For Al Khayaat, whose main business is a construction firm that built Qatar’s biggest mall, the cow-a-drop may be a slam dunk business decision. He has been expanding the company"s agricultural business at a farm 50 kilometers north of Doha. Food security is part of Qatar’s government strategy to steer the economy away from petrodollars, known, like in Saudi Arabia, as “Vision 2030.” And what better way to aggressively grow that business than at a time when it is your countrymen"s patriotic duty to buy your goods.

On a site covering the equivalent of almost 70 soccer fields, new grey sheds line two strips of verdant grass in the desert with a road running through the middle up to a small mosque. It produces sheep milk and meat and there were already plans to import the cows by sea. Then Qatar was ostracized, so the project was expedited.

Fresh milk production will start by the end of the month rather than September and will eventually cover a third of Qatar’s demand by mid-July, Al Khayyat told Bloomberg at his office in Doha. Facilities for the Holstein cows are ready, though the company will take a hit on the shipping cost for the animals, which increased more than five times to $8 million.

Which amounts to $2,000 per cow. At that price, it was not immediately clear if the cows would fly business or first class.

Qatar Puts Military On Highest State Of Alert Over Fears Of Imminent Incursion

Yesterday"s news that Saudi Arabia has issued an ultimatum to Qatar, listing ten demands among which that Qatar end all ties with the Muslim Brotherhood and Hamas, has prompted a dramatic response by the small Gulf nation, and according to a just released report by Arabic CNN (and confirmed locally) US officials have said they have observed increased Qatari military activity as the country placed its forces "on the highest state of alert" over fears of an imminent military incursion.

The sources add that the Qatari military has brought up 16 Leopard tanks out of storage in Doha in preparation for a potential military incursion by surrounding Gulf states. Furthermore, the Qatari Ministry of Defense reportedly also sent a letter to Saudi, UAE and Bahraini governments, saying they would fire on any naval ships from those countries that enter into its waters, a US official said. US officials have said the situation in Qatar has not affected US military operations and security in Qatar.

The escalation comes at the same time as president Donald Trump allegedly changed course on Qatar, a day after praising a move by other Gulf nations to sever diplomatic relations with Doha, which hosts a US military base crucial to the fight against ISIS. CNN reports that in a phone call with the Qatari Emir, Trump "extended an olive branch," offering to help the parties resolve their differences by inviting them to a White House meeting if necessary.

In a description of the Wednesday call, the White House said Trump "emphasized the importance of all countries in the region working together to prevent the financing of terrorist organizations and stop the promotion of extremist ideology."

Trump"s latest flip flop echoed that of his secretaries of Defense and State, who emphasized Tuesday the need for Gulf unity and the importance of the US partnership with Qatar, home to the Al Udeid Air Base, the main regional center for air missions against ISIS. 

Separately, the WSJ validated yesterday"s reports about a Saudi ultimatum, reporting late on Wednesday that leading Arab states are drawing up a list of demands that Qatar must meet to return to normal diplomatic and economic relations, including steps to significantly scale back the Al Jazeera media network. Oddly enough, there was no mention of "Russian hackers."

Saudi Arabia, the United Arab Emirates, Egypt and their allies are also seeking guarantees that Qatar’s government will stop its alleged financing of Middle East extremist groups and sever relations with the political leadership of the Muslim Brotherhood, a global Islamist movement, according to these officials.

Senior U.S. officials said Mr. Trump told the Arab monarchs he is prepared to mediate the dispute between the Arab states, some of whom host major American military installations. But the Trump administration stressed it needed a clear list of grievances to pass on to Qatar’s leadership, and that Washington wouldn’t necessarily endorse them.

These Arab and U.S. officials said this official list of demands is being compiled and could be completed in the coming days. Qatar’s ambassador to Washington, Meshal bin Hamad Al Thani, said in an interview on Wednesday that his government still didn’t know the specifics behind these Arab states’ decision to sever ties. He stressed that Doha is open to the Trump administration trying to mediate a diplomatic resolution.

“Until now, there have been no clear requests,” said Mr. Al Thani, a member of Qatar’s ruling family. “We are working toward de-escalation.” Saudi and Emirati officials have publicly accused Qatar of channeling funds to al Qaeda-linked groups in Syria and Yemen and providing a diplomatic safe-haven for the Muslim Brotherhood. Ambassador Al Thani denied Qatar knowingly has provided funding to any terrorist organizations. He said Doha is willing to take additional actions.

The reports come hours after Turkey, a government friendly to Qatar, approved a bill allowing expedited troop deployment to its base in Qatar. As reported earlier, the bill"s passage would allow Turkish troops to be deployed in Qatar and approve an accord between the two countries on military training cooperation.

* * *

As we reported last night, speaking to Al Jazeera, analyst Giorgio Cafiero of Gulf State Analytics, a geopolitical risk consultancy based in Washington, DC, said: "I think the Kuwaitis as well as Omanis ... fear the prospects of these tensions escalating in ways which could undermine the interest of all six members of the GCC.

"There are many analysts who believe that a potential break-up of the GCC has to be considered right now. If these countries fail to resolve their issues and such tensions reaches new heights, we have to be very open to the possibility of these six Arab countries no longer being able to unite under the banner of one council," said Cafiero.

He added that if tension escalates, there could be a "military confrontation".

It is this contingency that Qatar is now preparing for.

US Intelligence Says Russian Hackers Are To Blame For Qatar Crisis: CNN

It"s official: there is nothing in this world that Russian hackers can"t do.

* * *

In an opportune coincidence, when discussing the Qatar crisis earlier today, we laid out the "official narrative" behind the dramatic fallout in diplomacy between Qatar and Saudi Arabia.

According to the official narrative, the reason for the latest Gulf crisis in which a coalition of Saudi-led states cut off diplomatic and economic ties with Qatar, is because - to everyone"s "stunned amazement" - Qatar was funding terrorists, and after Trump"s recent visit to Saudi Arabia in which he urged a crackdown on financial support of terrorism, and also following the FT"s report that Qatar has directly provided $1 billion in funding to Iran and al-Qaeda spinoffs, Saudi Arabia finally had had enough of its "rogue" neighbor, which in recent years had made ideologically unacceptable overtures toward both Shia Iran and Russia.

There was another detail that we should have mentioned: on May 23, a news report from the Qatari News Agency attributed to the the country"s ruler Sheikh Tamim bin Hamad al-Thani, criticized US foreign policy in the wake of U.S. President Donald Trump"s visit to Saudi Arabia, questioned whether the US President would last in office, and also appeared friendly to Iran.  Following the publication of the report which infuriated Qatar"s anti-Iranian friends and GCC members, Qatar said its state news agency had been hacked, although the report continued to be carried by media in some other Gulf Arab states, which as Reuters said at the time "suggested renewed strains between Qatar and some of its Gulf Arab neighbors."

"The Qatar News Agency (QNA) website has been hacked by an unknown entity. A false statement attributed to His Highness has been published," the Gulf Arab state"s government communications office said. "An ongoing investigation will be put in place to look into this matter. The statement published has no basis whatsoever, and the competent authorities in the State of Qatar will hold all those (involved) accountable." The incident took place four days after Qatar complained publicly that it was the target of "an orchestrated barrage" of criticism by unknown parties in the run-up to Trump"s visit alleging the Gulf state supported terrorist groups in the Middle East.

That said, the hacking did not figure anywhere in the "official narrative" because it was not part of the list of grievances voiced by Saudi Arabia and various nation states when they cut ties with Qatar on Tuesday, which they did not for the allegedly hacked statement, but because the small nation was supposedly funding terrorists. In fact, as we reported earlier today, in an ultimatum issued by Saudi Arabia, the oil-rich Kingdom demanded that Qatar cut all ties with the Muslim Brotherhood and Hamas, organizations which Saudi Arabia, its Arab allies and the current Egyptian regime, consider terrorist groups.

However, the reason we bring it up, is because it now appears that not only did Russians hack the US election, they also precipitated the Qatar crisis.

At least according to CNN, which citing "briefed US officials" says that US investigators believe it was Russian hackers who breached Qatar"s state news agency and planted the abovementioned fake news report that "contributed to a crisis among the US" closest Gulf allies." Which is ironic because, again going back to the "official narrative", it was Qatar"s support for terrorism, not a "hacked statement", that precipitated the crisis, but whatever: there was an alleged hacking, and who better to fill the void of hacker than, guess who, the Russians.

Here are the details, according to CNN:

The FBI recently sent a team of investigators to Doha to help the Qatari government investigate the alleged hacking incident, Qatari and US government officials say.

Intelligence gathered by the US security agencies indicates that Russian hackers were behind the intrusion first reported by the Qatari government two weeks ago, US officials say. Qatar hosts one of the largest US military bases in the region.

The alleged involvement of Russian hackers intensifies concerns by US intelligence and law enforcement agencies that Russia continues to try some of the same cyber-hacking measures on US allies that intelligence agencies believe it used to meddle in the 2016 elections.

Why would Russia hack Qatar? Because according to the US officials CNN spoke to "the Russian goal appears to be to cause rifts among the US and its allies. In recent months, suspected Russian cyber activities, including the use of fake news stories, have turned up amid elections in France, Germany and other countries"

Let"s ignore for now that France already confirmed that there were no traces of Russian hackers in the French election (it would have been a different story if Macron had lost).

Let"s algo ignore that just yesterday the FT reported that the trigger behind the crisis was a "hunting party of 26 Qataris in southern Iraq" who were ambushed and captured by the Iranian-backed Iraqi Shia militia Kata’eb Hizbollah, a hostage situation which Qatar eventually used as a pretext to give Iran $700 million in cash and another $200m-$300m to Islamist groups in Syria, mostly to Tahrir al-Sham, also known as al-Qaeda.

Let"s certainly ignore that none other than Bloomberg mused this morning that the long-running conflict between Qatar and the Saudis is the result of the true reason for the tension between the two nations: natural gas, and specifically Qatar"s dominance in the production and export of LNG, which affords the small nation political independence from Saudi Arabia. Because upon reflection, and after "intelligence gathered by US security agencies" somewhere in Qatar, it was a Russian-hacked press statement in the Qatar media that was the reason for the crisis.

So please ignore all you have read so far about the reasons behind the Qatar crisis: about Qatar funding terrorists, about Doha having ties with the Muslim Brotherhood and Hamas, about Qatari hunting parties in Iraq, and about natural gas.

It was the Russians.

For those who need to take a deep breath after all that, now is a good time because it only get more farcical. Back to CNN:

It"s not yet clear whether the US has tracked the hackers in the Qatar incident to Russian criminal organizations or to the Russian security services blamed for the US election hacks. One official noted that based on past intelligence, "not much happens in that country without the blessing of the government."

That"s the old "if anything happens in Russia, Putin knows all about it" gambit, which was used early on during the Russian election hacking scandal, and which appears to have faded somewhat, so now is a great time to bring it back to the surface.

Speaking to CNN, Qatar"s Foreign Minister Sheikh Mohammed Bin Abdulrahman al-Thani said the FBI has confirmed the hack and the planting of fake news.

"Whatever has been thrown as an accusation is all based on misinformation and we think that the entire crisis being based on misinformation," the foreign minister told CNN"s Becky Anderson. "Because it was started based on fabricated news, being wedged and being inserted in our national news agency which was hacked and proved by the FBI."

Sheikh Saif Bin Ahmed Al-Thani, director of the Qatari Government Communications Office, confirmed that Qatar"s Ministry of Interior is working with the FBI and the United Kingdom"s National Crime Agency on the ongoing hacking investigation of the Qatar News Agency.

"The Ministry of Interior will reveal the findings of the investigation when completed," he told CNN.

The above was already known, the only missing link was the identity of the alleged hackers. And that"s where the FBI and the CIA stepped in, because just days after the Qatari hacking, US intel services, who are supposed to be tracking down Russian hacking leads in the US election hacking scandal, had some free time, flew to Doha and were quick to uncover the missing Russian trace.

Ironically, the latest "Russian connection" emerged just hours after Trump - supposedly the recipient of Russian hacking generosity himself - slammed Qatar for financing terrorism. He did not address the false news report.

"So good to see the Saudi Arabia visit with the King and 50 countries already paying off," Trump said in a series of tweets. "They said they would take a hard line on funding extremism, and all reference was pointing to Qatar. Perhaps this will be the beginning of the end to the horror of terrorism!"

Well, no, because according to CNN it wasn"t terrorism that sparked this whole thing. It was... Russian hackers. Meanwhile, the real sponsors of terrorism in the region, Saudi Arabia which recently signed US weapons deals amounting to over a hundred billion dollars got a clean pass, now that Qatar emerged as the Middle eastern bogeyman. incidentally, 15 of 19 9/11 hijackers were Saudi citizens and last year, Congress passed a bill allowing US citizens to sue Saudi Arabia for its involvement in Sept 11.

CNN said that neither the FBI nor the CIA would comment. A spokeswoman for the Qatari embassy in Washington said the investigation is ongoing and its results would be released publicly soon, but not soon enough, and certainly not before CNN managed to break yet another geopolitical crisis being blamed on Russia.

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Sarcasm aside, if indeed this is the story Qatar is going with, it should provide the country with an "out" from the 24 hour ultimatum that Saudi Arabia gave to Qatar as reported earlier, even if Saudi demands had nothing to do with a "hacked statement", and instead the two main demands by Saudi Arabia are that Qatar end all ties Muslim Brotherhood and Hamas.

Even more amusing, moments ago the Muslim country of Mauritania located in the African Maghreb joined the Saudi alliance, and also cut diplomatic ties with Qatar, saying that Qatar propagated "extremist ideas and spread anarchy and tensions in many Arab countries causing big humanitarian disasters in these countries, in Europe and in the world." 

Wait for it... it was the Russians. 

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The silver lining to all of the above is that the Comey hearing, which earlier today lost some of its pay-per-view appeal after it was reported that the former FBI director would not accuse Trump of obstructing justice, just got interesting again.