Half way through a tree would really be pushing it - For one thing you'd be halving the bark's circumference at that point, which means only half the capacity for nutrients to reach the part of the tree above the cut.
A better idea, (which is untested, and still might not work!) would be to offset smaller cuts, small wedge cuts on the compression side (inside of the bend), with small straight cuts on the tensile side (outside). By doing this you could effectively ensure that the amount of bark cut at any point doesn't exceed 1/3 of the circumference. By using multiple cuts you can spread the bend out across a longer section of the trunk, which should be easier with less stress on the core of the trunk. (Think of bending a plank - if you try to enforce a 45 degree bend right at the center the plank is likely to snap, but if you try to bend if so that the 45 degree bend is spread across it's length, you're more likely to be successful.)
But still, with a 12" diameter tree, that would still leave a lot ot thickness to bend. What kind of tree is it? I'd imagine that is relevant.
Another thing you need to consider - how will you fix the tree in position. I imagine that it will take many months for the tree to heal to the point where it's happy to grow with the bend. A metal stake in the ground would have potential to shift over that long a timeframe, so you'd need to make sure it was secure. Securing the tether to the tree might also pose a problem. Tying a cable around the trunk leads to the risk of cutting into the bark at that point, especially with the size of tree and forces involved, and I'm not sure that protecting the bark with hessian is going to work for such force and time. It might be preferable to use a nice big eye screw on the inside of the trunk.
And don't forget the risks with tensile ropes/cables. The last thing you need is for a storm to cause the rope or cable to snap and whip someones arm off.
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