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Saturday, October 14, 2017

week ending Oct 14

FOMC Minutes: "Many participants thought" December Rate Hike "likely to be warranted" -- From the Fed: Minutes of the Federal Open Market Committee, September 19-20, 2017. Excerpts: In their discussion of monetary policy, all participants agreed that the economy had evolved broadly as they had anticipated at the time of the June meeting and that the incoming data had not materially altered the medium-term economic outlook. Consistent with those assessments, participants saw it as appropriate, at this meeting, to announce implementation of the plan for reducing the Federal Reserve's securities holdings that the Committee released in June. Many underscored that the reduction in securities holdings would be gradual and that financial market participants appeared to have a clear understanding of the Committee's planned approach for a gradual normalization of the size of the Federal Reserve's balance sheet. Consequently, participants generally expected that any reaction in financial markets to the start of balance sheet normalization would likely be limited. ... Consistent with the expectation that a gradual rise in the federal funds rate would be appropriate, many participants thought that another increase in the target range later this year was likely to be warranted if the medium-term outlook remained broadly unchanged. Several others noted that, in light of the uncertainty around their outlook for inflation, their decision on whether to take such a policy action would depend importantly on whether the economic data in coming months increased their confidence that inflation was moving up toward the Committee's objective. A few participants thought that additional increases in the federal funds rate should be deferred until incoming information confirmed that the low readings on inflation this year were not likely to persist and that inflation was clearly on a path toward the Committee's symmetric 2 percent objective over the medium term. All agreed that they would closely monitor and assess incoming data before making any further adjustment to the federal funds rate.

FOMC Minutes Show Schizophrenic Fed Fears Low Inflation Is Here To Stay But Push For Another Rate Hike In 2017 -- The yield curve has collapsed since The Fed's hawkish September statement (but bank stocks have soared) as rate-hike odds hit 80% and balance sheet normalization is believed to be like watching paint dry. All eyes going into the FOMC Minutes were on just how transitory The Fed believed inflation's dip was - "many Fed officials concerned low inflation is not transitory," but schizophrenically "many Fed officials saw another rate hike warranted this year." Additional highlights include:

  • All participants thought it would be appropriate for the Committee to maintain the current target range for the federal funds rate
  • Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors
  • Overall, the available information suggested that, although the storms would likely affect the quarterly pattern of changes in real GDP at least through the second half of the year:
  • Members judged that storm-related disruptions and rebuilding would affect economic activity in the near term, but past experience suggested that the hurricanes were unlikely to materially alter the course of the national economy over the medium term
  • Higher prices for gasoline and some other items in the aftermath of the hurricanes would likely boost inflation temporarily
  • Interpreting the next few inflation reports would likely be complicated by the temporary run-up in energy costs and in the prices of other items affected by storm-related disruptions and rebuilding
  • A few participants thought that additional increases in the federal funds rate should be deferred until incoming information confirmed that the low readings on inflation this year were not likely to persist
  • A couple of those participants expressed concern that the persistence of highly accommodative financial conditions could, over time, pose risks to financial stability.
  • It was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted
  • All agreed that they would closely monitor and assess incoming data before making any further adjustment to the federal funds rate
  • Many participants continued to believe that the cyclical pressures associated with a tightening labor market or an economy operating above its potential were likely to show through to higher inflation over the medium term
  • Most participants had not assumed enactment of a fiscal stimulus package in their economic projections or had marked down the expected magnitude of any stimulus

'Hawkish' Fed Minutes Crush Yield Curve To Flattest Since Start Of Last Recession - The persistent flattening of the Treasury yield curve appears to still have legs, and that may be a sign of economic trouble ahead.As Bloomberg details, on Wednesday, the minutes of the Federal Reserve’s September meeting revealed policy makers’ resolve to stick to their tightening path.The yield curve's reaction to that un-data-dependent hawkishness is very evident...(worsened by today's strong 30Y auction) The difference between five- and 30-year yields fell below 92 basis points, near the lowest since the start of the last recession. Policy Error?   Five-year Treasury notes are among the most sensitive to Fed policy.Who needs an inverted curve for a recession after all? Furthermore, banks don't seem to need a steeper curve either...

On Track For a December Rate Hike -- The headline figure on nonfarm payrolls report came in well below already withered expectations, but the disappointment was more than compensated for in the details of both the establishment and household survey. The Fed is looking for data that allows them to overlook the weak inflation data. This was just that sort of data  Nonfarm payrolls sank by 33k, and prior months were revised down. The three-month average is just 91k, which would put the job growth in-line with the range Fed officials believe is consistent with a steady unemployment rate. But there was little doubt that Hurricanes Harvey and Irma distorted the data, with a particularly large impact on leisure and hospitality numbers. That sector lost 111k employees during the month and looks to have borne the brunt of the impact. Interestingly, non-farm payrolls excluding leisure and hospitality remain in the range of recent trends. Like overall nonfarm payrolls, the pace of growth entered a gradual slowing phase in 2015. This behavior looks consistent with what would be expected as the economy approach full employment and labor becomes more difficult to find.   Speaking of full employment, the unemployment rate fell to 4.2%. Recall that in the Fed’s latest Summary of Economic Projections, policymakers projected the unemployment rate to fall to 4.3% by the end of the year. We are a little ahead of schedule, it seems. Note that according to the Bureau of Labor Statistics, the hurricanes did not impact the estimate of unemployment rate. 

Nominating Kevin Warsh as Fed Chair would be the latest way Trump reneged on promises to put workers’ interests over financial elites - EPI Blog - A consistent drumbeat in Donald Trump’s campaign for the presidency was a promise that he would stand up for the American working class against financial elites who had rigged policy to enrich themselves, a message that clearly resonated with some voters. He has reneged on this commitment in virtually every area of public policy, including providing better health care coverage than Obamacare, crafting better trade agreements, making sure tax cuts go to the middle class, and standing up for workers’ rights at work.This month, workers who supported Trump may see another betrayal. It has been reported that Trump may pick Kevin Warsh, who married into a billionaire family, to replace Janet Yellen as the next Chair of the Federal Reserve Board of Governors (BOG). Decisions made by the Fed’s BOG are extraordinarily important for American workers. In recent years, pressure has built for the Fed to begin applying the brake to America’s economic recovery by raising interest rates. The rationale for this is that the Fed must slow growth to tamp down inflationary pressures. Warsh has consistently been on the side advocating for slowing growth to fight inflation. But these inflationary pressures appear nowhere in either wage or price data. And if the Fed hits the brake prematurely, millions of Americans could lose opportunities to work, and tens of millions could see smaller wage increases.One underappreciated aspect of raising interest rates is that they will put upward pressure on the value of the U.S. dollar, and this stronger dollar will make U.S. exports less competitive on world markets while making foreign imports cheaper to American consumers. This will in turn lead to rising trade deficits which stunt growth in manufacturing employment. Warsh knows about this argument, but he just doesn’t really care.

 Powell Fed Chair Odds Surge After Politico Doubles Down On "Mnuchin Support" Report --  It was exactly one week ago when just as Bloomberg reported that Yellen was most likely out of consideration as next Fed chair, and as the WSJ reported that Trump was meeting with Kevin Warsh, that Politico reported, for the first time, that discussions with people close to the Fed Chair selection process "confirmed Kevin Warsh and Jerome Powell as the current front-runners with Treasury Secretary Steven Mnuchin said to be favoring Powell. That’s something of a head scratcher to outside observers of the process who did not have Powell on short-lists before the process began. Warsh was always viewed as a top contender though he does not really know President Trump."Well, since algos have short memories (and humans dont care about news at all), Politico doubled down on what it reported one week ago, and shortly after 3pm ET today, wrote that "Treasury Secretary Steven Mnuchin is strongly pushing for the White House to name Jerome Powell as the next chair of the Federal Reserve – the most powerful economic job in the U.S. government, according to three people close to the selection process." Mnuchin has privately recommended Powell to President Donald Trump, according to one adviser close to the administration. Why does the former hedge fund manager and Goldman employee like Power? According to Politico's sources, "Mnuchin, who knows Powell well, feels comfortable with him and feels like Powell is a safe pick over whom he can exert some measure of influence."Repeating something else we already knew, Politico also adds that the White House list has been whittled down to four candidates:  Powell, a current Federal Reserve governor; Yellen, who was confirmed to the position under President Barack Obama in 2014 and is eligible to be reappointed; Gary Cohn, Director of the National Economic Council and former top banker at Goldman Sachs; and Kevin Warsh, a former Fed governor and fellow at the Hoover Institution who spent years as an investment banker at Morgan Stanley

Stocks Spooked By News Trump Interviewed John Taylor For Fed Chair Job -- Many years ago, when it was still unclear who would replace then outgoing Fed chair Ben Bernanke, Zero Hedge endorsed John Taylor for the role of Fed chair: a futile endorsement as it had no chance of ever coming true due to Taylor's famous and long-running feud with the Fed over what the true Fed Funds rate should be, and the various pro forma adjustments the Fed imposed upon Taylor's own "Taylor Rule." Well, maybe not, because with the market convinced that the next Fed chair will be either hawk Kevin Warsh or dove Jay Powell, moments ago the WSJ reported that, out of the blue, President Trump also interviewed the iconic Stanford University economist, the namesake of the eponymous Taylor Rule, on Wednesday to discuss his potential nomination to become Federal Reserve chairman.  Citing a White House official, the WSJ reported that Treasury Secretary Steven Mnuchin and Vice President Mike Pence also attended the meeting. The news is surprising, and may have been the catalyst for the market's poor close, asTaylor has been a frequent critic of Fed policy in the years since the crisis, arguing that officials should have raised interest rates sooner and testifying on Capitol Hill on the benefits of following a mathematical formula to help guide interest-rate decisions.

Core CPI Stays Below Fed Mandate For 6th Straight Month - Core CPI has now been below the Fed's 2% mandate for 6 straight months, printing a 1.7% YoY gain in September (weaker than the expected 1.8% rise).Headline CPI bounced back above 2% however, led by a 6.1% surge in Energy costs... The index for all items less food and energy increased 0.1 percent in September following a 0.2-percent rise in August. The shelter index rose 0.3 percent in September following a 0.5-percent increase in August. The indexes for rent and owners' equivalent rent both rose 0.2 percent, while the index for lodging away from home increased 1.5 percent. This is the lowest shelter inflation since April 2016... The motor vehicle insurance index rose 0.5 percent in September; it has declined only once in the last 23 months. The education index increased 0.3 percent, and the index for recreation rose 0.2 percent. The indexes for alcoholic beverages, personal care, and tobacco also increased in September. The index for new vehicles, which was unchanged in August, fell 0.4 percent in September. The index for household furnishings and operations declined 0.3 percent, and the index for used cars and trucks continued to fall, declining 0.2 percent. The medical care index fell slightly in September, declining 0.1 percent as declines in the indexes for prescription and nonprescription drugs outweighed increases in medical care service indexes. The apparel index declined 0.1 percent in September. The index for wireless telephone services rose 0.4 percent in September, ending a streak of 14 consecutive declines.

Key Measures Show Inflation mostly below 2% in September - The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.2% (2.5% annualized rate) in September. The 16% trimmed-mean Consumer Price Index rose 0.1% (1.8% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report.Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.5% (6.8% annualized rate) in September. The CPI less food and energy rose 0.1% (1.5% annualized rate) on a seasonally adjusted basis.  Note: The Cleveland Fed released the median CPI details for September here. Motor fuel increased 335% in September, annualized.

US deficit spending reached $668 billion in fiscal 2017 | TheHill: The federal government's deficit spending was $668 billion in fiscal 2017, an $82 billion increase over the previous year, according to the Congressional Budget Office. The deficit rose to 3.5 percent of the nation's gross domestic product for the fiscal year, up from 3.2 percent of GDP a year earlier. Typically, deficits that are higher than economic growth add to a country's overall debt burden, which can lead to higher borrowing costs and, in extreme cases, an inability to pay debts. U.S. debt surpassed $20 trillion for the first time in September.The deficit has become a major sticking point in the debate over a Republican tax-reform plan, with some, such as Sen. Bob Corker (R-Tenn.), raising concern that the U.S. would have to borrow vast sums to finance a tax cut. According to CBO, deficit spending in 2017 was about $25 billion less than anticipated as a result of unexpectedly scaled-back spending. Overall federal revenues were up 1 percent, driven by increased wages and salaries. Revenue growth was held back by declines in corporate income tax payments and nonwithheld payments of income and payroll taxes. Analysts have speculated that such revenues were declining because some taxpayers were deferring certain payments in hopes that a successful tax-reform plan would lower their rate. Federal spending rose $130 billion in fiscal 2017, largely driven by a handful of agencies. Spending for Social Security rose $29 billion, and Medicare spending increased $22 billion. Upward revisions for cost estimates of loan subsidies and guarantees drove increased outlays of $35 billion at the Department of eEucation and $31 billion at the Department of Housing and Urban Development. Similar downward revisions helped reduce Department of Agriculture spending by $10 billion. 

The GOP doesn’t have a budget plan - AEI -House and Senate Republicans are moving forward with competing versions of the congressional budget resolution for fiscal year 2018. Last week, the House approved its version by a vote of 219–206, and the Senate Budget Committee put out its version as well. The Senate will consider the committee’s recommended resolution in the coming days.  These resolutions are viewed correctly as the first steps toward enactment of tax reform. They would authorize consideration of the GOP’s planned tax legislation under the rules of budget reconciliation. Reconciliation bills can be approved in the Senate with a simple majority vote. With 52 Republicans now in the Senate, the GOP could, in theory at least, pass a tax bill without needing any votes from Senate Democrats. But an important question about tax reform remains: Can it be passed within a responsible overall fiscal plan? Unfortunately, the GOP’s emerging budget framework is a major cause for concern from this perspective. The Republican sponsors of these resolutions claim they would lead to (or at least make progress toward reaching) a balanced budget at the end of 10 years. It’s important to a lot of Republicans to be able to say they voted for a balanced budget.But Republicans really don’t have a plan to balance the budget; in fact, they don’t have a budget plan at all. What they have is an agreement to move forward on tax reform, which is important. But tax reform could stall if it isn’t pursued within a sensible overall fiscal policy. The House and Senate budget resolutions can’t be taken seriously because they vastly overstate the GOP’s commitment to real spending restraint. Both the House and Senate versions assume deep spending cuts over the next decade — spending cuts that Republicans have no intention of putting into actual legislation. In fact, the GOP’s legislative priorities are likely to increase future deficits rather than reduce them.

Nearly Half the Pentagon Budget Goes To Contractors --  Hawks on Capitol Hill and in the U.S. military routinely justify increases in the Defense Department’s already munificent budget by arguing that yet more money is needed to “support the troops.” If you’re already nodding in agreement, let me explain just where a huge chunk of the Pentagon budget—hundreds of billions of dollars—really goes. Keep in mind that it’s your money we’re talking about. The answer couldn’t be more straightforward: it goes directly to private corporations and much of it is then wasted on useless overhead, fat executive salaries, and startling (yet commonplace) cost overruns on weapons systems and other military hardware that, in the end, won’t even perform as promised. Too often the result is weapons that aren’t needed at prices we can’t afford. If anyone truly wanted to help the troops, loosening the corporate grip on the Pentagon budget would be an excellent place to start. The numbers are staggering. In fiscal year 2016, the Pentagon issued $304 billion in contract awards to corporations—nearly half of the department’s $600 billion-plus budget for that year.  And keep in mind that not all contractors are created equal. According to the Federal Procurement Data System’s top 100 contractors report for 2016, the biggest beneficiaries by a country mile were Lockheed Martin ($36.2 billion), Boeing ($24.3 billion), Raytheon ($12.8 billion), General Dynamics ($12.7 billion), and Northrop Grumman ($10.7 billion). Together, these five firms gobbled up nearly $100 billion of your tax dollars, about one-third of all the Pentagon’s contract awards in 2016. And remember: the Pentagon buys more than just weapons. Health care companies like Humana ($3.6 billion), UnitedHealth Group ($2.9 billion), and Health Net ($2.6 billion) cash in as well, and they’re joined by, among others, pharmaceutical companies like McKesson ($2.7 billion) and universities deeply involved in military-industrial complex research like MIT ($1 billion) and Johns Hopkins ($902 million). The real question is: How much of this money actually promotes the defense of the country and how much is essentially a subsidy to weapons makers and other corporations more focused on their bottom lines than giving the taxpayers value for their money?

 Trump Hints At War With North Korea: "Only One Thing Will Work" - When we commented on this morning's Trump tweetstorm, in which he covered everything from the fake (and not so fake) media, to RNC donors, to reaching out to Democrats on Obamacare repeal, to "late night" comedians and their "one-sided coverage" of Trump, we said that Trump has yet to make a comment on the most cryptic topic of the last week,  his repeated suggestions that the current situation is a "calm before the storm." Moments ago, he may have done just that, when in his latest pair of tweets, Trump ominously suggested that following 25 years of failed diplomacy with North Korea, there is "only one thing that will work." "Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid hasn't worked, agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work!" Presidents and their administrations have been talking to North Korea for 25 years, agreements made and massive amounts of money paid...... ...hasn't worked, agreements violated before the ink was dry, makings fools of U.S. negotiators. Sorry, but only one thing will work! — Donald J. Trump (@realDonaldTrump) October 7, 2017 While Trump did not specify what that "one thing" is (at least not yet), it stands to reason that the president is referring to some sort of military intervention, i.e. war, which of course would most likely prompt a retaliation by North Korea, one which according to the 38 North website could result in over 2 million fatalities and nearly 8 million injuries.

U.S. flies bombers over Korea as Trump discusses options (Reuters) - The U.S. military flew two strategic bombers over the Korean peninsula in a show of force late on Tuesday, as President Donald Trump met top defense officials to discuss how to respond to any threat from North Korea. Tensions have soared between the United States and North Korea following a series of weapons tests by Pyongyang and a string of increasingly bellicose exchanges between Trump and North Korean leader Kim Jong Un. North Korea has launched two missiles over Japan and conducted its sixth nuclear test in recent weeks as it fast advances toward its goal of developing a nuclear-tipped missile capable of hitting the U.S. mainland. The two U.S. Air Force B-1B bombers were joined by two F-15K fighters from the South Korean military after leaving their base in Guam, South Korea’s Joint Chiefs of Staff said in a statement on Wednesday. After entering South Korean airspace, the two bombers carried out air-to-ground missile drills in waters off the east coast of South Korea, then flew over the South to waters between it and China to repeat the drill, the release said. The U.S. military said in a separate statement it conducted drills with Japanese fighters after the exercise with South Korea, making it the first time U.S. bombers have conducted training with fighters from both Japan and South Korea at night.

What would a U.S.-North Korea war look like? - With tensions running high, what would a military confrontation with Kim Jong Un's North Korea actually involve? Here's everything you need to know:

  • Is a limited war possible? - Probably not. Trump administration officials recently said they were working on four or five military options that would not involve the total destruction of North Korea. One such option might be an air or drone "decapitation" strike to take out Kim himself. But assassinating the Hermit Kingdom's paranoid dictator would be extremely difficult; to avoid just such a strike, he reportedly has 30 residences, each with its own underground bunker, takes elaborate precautions to hide his location, and moves around only at night. All other military scenarios would lead to a catastrophic number of casualties, according to war games staged by the Pentagon and various think tanks. Kim has one of the world's largest artillery arsenals, and would likely respond to any attack by unleashing a blistering retaliatory assault on Seoul's 10 million people, killing up to 100,000 residents in a day. The region could then spiral into an all-out, months-long war costing $1 trillion in damage and a million lives, according to one Pentagon estimate. It "would probably be the worst kind of fighting in most people's lifetimes," Defense Secretary James Mattis has said.
  • How would a hot war begin? - If either Kim or the Trump administration misread each other's belligerent rhetoric or aggressive actions as a signal of an imminent attack, it could trigger the other to launch a pre-emptive strike. But many of North Korea's nuclear devices are hidden in the mountains or buried deep underground, and it would take the U.S. four or five days to destroy even Kim's conventional artillery, according to the Nautilus Institute, a think tank. The megalomaniacal tyrant would likely go into "use or lose" mode and try to inflict as much damage on his enemies as possible while he still had weapons. Even if he didn't launch some of his 20 or so nuclear warheads, Kim would still have some 8,000 conventional rocket launchers and artillery cannons dug into the mountains on his side of the demilitarized zone (DMZ). They include 240-mm and 300-mm rocket launchers that can reach Seoul, located just 25 miles from the border. Some of these shells could be loaded with nerve gas or other chemical weapons, and if they "start plopping down in the middle of the city," says Joseph Bermudez, an analyst for the U.S.-Korea Institute, "there would be panic like you would not believe."

Jimmy Carter offers to meet with North Korean leader Kim Jong Un -- Former President Jimmy Carter (D) reportedly offered to meet with North Korea’s Kim Jong Un in an attempt at peace talks. A University of Georgia professor detailed Carter’s offer to Korea JoongAng Daily, a South Korean newspaper. “Carter wants to meet with the North Korean leader and play a constructive role for peace on the Korean Peninsula as he did in 1994,” Park Han-shik told the newspaper. Park, who met with Carter, is the professor emeritus at the university's School of Public & International Affairs. “Should former President Carter be able to visit North Korea, he would like to meet with North Korean leader Kim Jong-un and discuss a peace treaty between the United States and the North and a complete denuclearization of North Korea,” Park told the paper. Park said Carter wants “to prevent a second Korean War.” The offer from the 39th president comes amid heightened tensions between Pyongyang and Washington. Pyongyang in early September claimed it successfully tested a miniaturized hydrogen bomb that can be placed on an intercontinental ballistic missile. The Trump administration at the end of the month slapped new sanctions on several North Koreans banks and nationals abroad.

U.S. warship sails near islands Beijing claims in South China Sea - U.S. officials (Reuters) - A U.S. Navy destroyer sailed near islands claimed by China in the South China Sea on Tuesday, three U.S. officials told Reuters, prompting anger in Beijing, even as President Donald Trump’s administration seeks Chinese cooperation in reining in North Korea’s missile and nuclear programs. The operation was the latest attempt to counter what Washington sees as Beijing’s efforts to limit freedom of navigation in the strategic waters. But it was not as provocative as previous ones carried out since Trump took office in January. The officials, speaking on condition of anonymity, said the Chafee, a guided-missile destroyer, carried out normal maneuvering operations that challenged “excessive maritime claims” near the Paracel Islands, among a string of islets, reefs and shoals over which China has territorial disputes with its neighbors. China’s Defense Ministry said on Wednesday that a warship, two fighter jets and a helicopter had scrambled to warn the U.S. ship away, adding it had infringed upon China’s sovereignty and security with its “provocation”. China would further strengthen its naval and air defenses, the ministry said. “We demand the U.S. side earnestly take steps to correct its mistakes,” it added. 

Iran president: 10 Trumps can't roll back nuke deal benefits - ABC News: Iran's president defended the 2015 nuclear deal with world powers on Saturday, saying not even 10 Donald Trumps can roll back its benefits to his country, state TV reported. Hassan Rouhani's comments came as President Donald Trump appears to be stepping back from his campaign pledge to tear up the deal, instead aiming to take other measures against Iran and its affiliates. State TV broadcast Rouhani while addressing students at Tehran University, marking the beginning of the educational year. "We have achieved benefits that are irreversible. Nobody can roll them back, neither Trump, nor 10 other Trumps," he said. Rouhani warned the U.S. not to violate the deal. "If the United States violates (the nuclear deal), the entire world will condemn America, not Iran," he said. Iran accepted curbs on its contested nuclear program as part of the agreement. In return, Iran has benefited from the lifting of sanctions against its oil exports among others. Trump is expected to take new action against Iran's Revolutionary Guard and the Iranian backed Shiite militant group Hezbollah.

Iran Vows "Decisive, Crushing" Response If Trump Designates Its Elite Guards As Terrorists - On Sunday, in its most explicit warning to Donald Trump not to revise the terms of the Nuclear Deal - something the US president is expected to do over the coming days - Iran warned the United States that U.S. regional military bases "would be at risk" if further sanctions were passed. "The Americans should know that the Trump government’s stupid behavior with the nuclear deal will be used by the Islamic Republic as an opportunity to move ahead with its missile, regional and conventional defense program," Iran Revolutionary Guards’ commander Mohammad Ali Jafari said, quoted by Reuters. He then threatened US presence in the region, warning that “if America’s new law for sanctions is passed, this country will have to move their regional bases outside the 2,000 km range of Iran’s missiles."Then, one day later, Iran vowed on Monday to give a "firm and crushing" response should Washington decide to also include the elite wing of its army, the Islamic Revolutionary Guard Corps (IRGC), on its list of terrorist organizations, according to the country’s foreign ministry.  "We are hopeful that the United States does not make this strategic mistake,” Iranian Foreign Ministry spokesman Bahram Qasemi stated during a news conference according to Reuters. “If they do, Iran’s reaction would be firm, decisive and crushing and the United States should bear all its consequences."

Trump resists pressure to soften stance on Iran nuclear deal (Reuters) - President Donald Trump finds himself under immense pressure as he considers de-certifying the international nuclear deal with Iran, a move that would ignore warnings from inside and outside his administration that to do so would risk undermining U.S. credibility. Trump is expected to unveil a broad strategy on confronting Iran this week, likely on Friday. There was always the chance he could still have a last-minute change of heart and certify Iran’s compliance with the 2015 accord, which he has called an “embarrassment” and the “worst deal ever negotiated.” Senior U.S. officials, European allies and prominent U.S. lawmakers have told Trump that refusing to certify the deal would leave the U.S. isolated, concede the diplomatic high ground to Tehran, and ultimately risk the unraveling of the agreement. Signed by the United States, Britain, France, Germany, Russia, China, the European Union and Iran, the deal relieved sanctions on Tehran in exchange for curbing its disputed nuclear program. The International Atomic Energy Agency (IAEA) concluded that Iran secretly researched a nuclear warhead until 2009, which Tehran denies. Iran has always insisted that its nuclear program is for peaceful purposes and denies it has aimed to build an atomic bomb. After Trump made clear three months ago he would not certify Iran’s compliance with the deal, his advisers moved to give him options to consider, a senior administration official said. “They came up with a plan that protects the things they are concerned about but doesn’t recertify, which the president made clear he was not going to do. That ship has sailed,”

Trump decertifies Iran nuclear deal, slaps sanctions on IRGC in broadside at ‘radical regime’ | Fox News: President Trump announced Friday he will decertify the 2015 Iran nuclear deal, saying he believes the “radical regime” has committed multiple violations of the agreement as he kicked a decision over whether to restore sanctions back to Congress. “I am announcing today that we cannot and will not make this certification,” Trump said during a speech at the White House. “We will not continue down a path whose predictable conclusion is more violence, more terror, and the very real threat of Iran's nuclear breakthrough.” Friday's announcement does not withdraw the United States from the Iran deal, which the president called “one of the worst and most one-sided transactions the United States has ever entered into.” But the president threatened that he could still ultimately pull out of the deal. “In the event we are not able to reach a solution working with Congress and our allies, the agreement will be terminated,” he said. “It is under continuous review and our participation can be canceled by me as president at any time.” Speaking to reporters ahead of Trump’s speech, Secretary of State Rex Tillerson said the president will use the Congressional Iran Nuclear Agreement Review Act to decertify the agreement, which was negotiated over 18 months by the Obama administration. Congress could then decide to restore sanctions, do nothing or make changes to the law. Trump is pressing Congress to work to fix the deal's "flaws." 

Iran nuclear deal: Trump’s speech in full BBC

European Leaders Criticize Trump's Disavowal of Iran Deal -- Iran, Russia and European leaders roundly condemned President Trump’s decision on Friday to disavow the Iran nuclear deal, saying that it reflected the growing isolation of the United States, threatened to destabilize the Middle East and could make it harder to resolve the growing tensions on the Korean penninsula. The reaction was far from panicked, as Mr. Trump’s decision punts to Congress the critical decision of whether the United States will reimpose sanctions on Iran — a step that would effectively sink the deal. But Mr. Trump also warned that unless the nuclear agreement was altered and made permanent — to prohibit Iran from ever developing nuclear weapons — he would terminate the agreement, an ultimatum that threw the future of the accord into question. Though they avoided direct criticism of Mr. Trump, Prime Minister Theresa May of Britain, Chancellor Angela Merkel of Germany and President Emmanuel Macron of France said in a rare joint statement that they “stand committed” to the 2015 nuclear deal and that preserving it was “in our shared national security interest.” “The nuclear deal was the culmination of 13 years of diplomacy and was a major step towards ensuring that Iran’s nuclear program is not diverted for military purposes,” they added. Sigmar Gabriel, Germany’s foreign minister, said that Mr. Trump was sending “a difficult and also from our point of view dangerous signal.” He said that the Iran deal, and other diplomatic achievements, were necessary “to convince countries like North Korea, and maybe also others, that it is possible to create security without acquiring nuclear weapons.” “Destroying this agreement would, worldwide, mean that others could no longer rely on such agreements — that’s why it is a danger that goes further than Iran,” he added. 

Donald Trump’s Lies About the Iran Deal Reveal He Is Dangerously Out of Touch with Reality‬ - Donald Trump was expected to refuse to recertify the Iran nuclear deal. He did that on Friday.  But the president did much more than signal his personal disapproval of Tehran’s compliance with an agreement that the Obama administration and international allies reached in 2015 to avert the development of nuclear weapons by the Iranians. In a bombastic address, Trump pointed toward a dramatic ramping up of hostility toward a country that international observers and even his own aides indicate has been in compliance with the nuclear deal.  The president’s pronouncements on Friday were not merely at odds with the facts regarding the agreement. They steered the United States away from diplomacy and toward a more charged—and potentially far more dangerous—relationship with Iran. They also distanced the United States from its allies. As former vice president Joe Biden explained on Friday, “Unilaterally putting the Iran deal at risk does not isolate Iran. It isolates us.”  Trump did not seem to recognize that prospect, let alone to understand the consequences of a go-it-alone strategy that will make the United States an international outlier.  In his televised speech to the nation Friday, the president said he wanted Congress to set new benchmarks that Iran would be required to meet in order to avoid nuclear-related sanctions. He bluntly declared that the deal “will be terminated” if no plan is reached to radically alter the agreement.  The president’s over-heated language was decried by serious observers of the deal and of US relations with Iran. “Make no mistake: With his announcement today, President Trump is putting America at risk,” announced Senator Jeff Merkley (D-OR), who explained that:  Most immediately, this reckless decision could give Iran a path to back out of the nuclear deal and resume its race to a nuclear bomb. A nuclear-armed Iran could become the single greatest national security threat we face and would be an immediate existential threat to Israel. At a time when our own intelligence agencies and every international monitor says that Iran is in compliance with the strict limits and monitoring of the JCPOA (Joint Comprehensive Plan of Action), blowing up this agreement is the definition of a self-inflicted wound.

Trump risks making US rogue actor as he condemns Iran nuclear deal - The content, tone and style of Donald Trump’s speech about Iran on Friday was a reminder of how much the current president of the United States relishes conflict.With his domestic legislative agenda stalled and a federal investigation scrutinising his finances and his relations with Moscow, Trump has taken to finding enemies to rail against, including the press and black football players who kneel during the national anthem. The tactic galvanises his core supporters and seems to rejuvenate him. He appeared similarly energised excoriating Iran on Friday. But taken into foreign policy, Trump’s visceral drive for confrontation threatens to add a second nuclear crisis to the one Trump has already escalated in the Pacific with North Korea.The 2015 nuclear agreement with Iran, the Joint Comprehensive Programme of Action (JCPOA), was aimed at ensuring that nearly 40-year feud between the US and revolutionary Iran did not mutate into a confrontation between two nuclear states. In return for sanctions relief from six major powers and the international community as a whole, Iran accepted very deep constraints on its nuclear programme. Its current stockpile of enriched uranium, for example, is just over 1% of what it was before the deal. But in his speech, Trump completely ignored the non-proliferation gains represented by the JCPOA, and portrayed the repatriation of Iran’s previously frozen assets as money for nothing. He made the false claim that Iran had been on the point of “total collapse” when the agreement was signed. His claims that “the Iranian regime has committed multiple violations of the agreement” were also misleading at best. On two occasions, Iran’s stockpile of heavy water flowed over the ceiling imposed by the deal, but the situation was quickly rectified and Iran’s reserve is now below the limit.  Nor is heavy water a direct proliferation threat. It is used in certain reactors that produce plutonium as a by-product. However, under the deal, Iran has destroyed the only reactor of that type.

 Nikki Haley was Trump’s Iran whisperer - POLITICO: At a mid-day meeting in the Oval Office in late July, U.N. ambassador Nikki Haley came to President Donald Trump with an offer. Trump had grudgingly declared Tehran in compliance with the 2015 Iran nuclear deal earlier in the month, at the urging of Secretary of State Rex Tillerson and Secretary of Defense James Mattis. Trump hated the deal. But the two men pushed him to certify it, arguing in part that he lacked a strong case for declaring Iran in violation. A refusal to do so would have looked rash, they said, convincing Trump sign off for another 90 days.Haley, in that July meeting, which also included National Security Adviser H.R. McMaster and Vice President Mike Pence, asked the president to let her make the case for decertification “Let me lay a foundation for it,” she said, according a source familiar with the proceedings. The president agreed. Haley would become the administration’s most vocal public proponent of decertification—and Trump’s favorite internal voice on Iran—further boosting her standing with the president at a time when she is seen as a potential successor to Tillerson, whose tense relationship with Trump has burst into the open in recent days. A month after her talk with Trump, Haley flew to Vienna to visit the headquarters of the International Atomic Energy Association, where she pressed officials about Iranian compliance with the deal. Soon after, she delivered a speech at the American Enterprise Institute in Washington, D.C., airing her “doubts and concerns” about the agreement. Haley’s role was described by a half-dozen administration officials who took part in the Iran policy review. While many of the president’s cabinet members, aides, and advisers work to restrain his impulses, when it came to Iran deal Haley did the opposite—channeling what many Democrats and even some Republicans consider the president’s destructive instincts into policy. 

Iranian General Responds To Trump: "We'll Bury You" -- At the same time as the US Treasury's declared Iran's powerful Islamic Revolutionary Guards Corps (IRGC) a terrorist organization as part of Trump's crackdown on the Joint Comprehensive Plan of Action, also known as Iran Nuclear Deal, a senior commander in Iran's Quds Force, the elite overseas arm of the IRGC said that his forces have "buried many" like Donald Trump, and the US President's threats against Iran will "damage" America.“We are not a war-mongering country. But any military action against Iran will be regretted ... Trump's threats against Iran will damage America ... We have buried many ... like Trump and know how to fight against America,” deputy Quds commander Brigadier-General Esmail Ghaani said, cited by Tasnim news agency. The IRGC is Iran's most powerful security entity and wields control over large swathes of Iran's economy as well as considerable influence within its political system.

Trump Once Asked The Pentagon For A 'Tenfold' Increase In US's Nuclear Arsenal --Apparently, possessing the largest nuclear arsenal in the world isn’t enough for President Donald Trump. To wit, NBC News is reporting that Trump had asked for a nearly tenfold increase in the US’s nuclear arsenal during a Pentagon defense briefing in July involving several of the administration's most-senior officials.According to the officials present at the meeting, Trump’s advisers, among them the Joint Chiefs of Staff and Secretary of State Rex Tillerson, were surprised by Trump's request, and quickly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the build-up. In interviews.The president reportedly relented, and no such expansion is planned. The revelation comes as the US and South Korea are bracing for North Korea to test more short-range rockets around the opening of the Chinese Communist Party’s twice-a-decade congress on Oct. 18. Trump also recently revealed that his administration wouldn’t certify the Iran deal, leaving it to Congress to decide if the country has complied with the terms of the 2015 multilateral Iranian nuclear deal. 

Pelosi Wants ‘Urgent’ Update on President’s Nuclear Weapons Authority - Urgent.That’s how House Minority Leader Nancy Pelosi is categorizing the need to update the law guiding when the president of the United States can use nuclear weapons.“The law under which the president has authority to exercise ‘first use’ is one that is ancient,” the California Democrat told reporters Thursday. “It is from 1946. It was in a different world. And now I think it is necessary for us to address it.”Pelosi’s “urgent” interest in updating the law on nuclear first use comes at a time when President Donald Trump is plotting the best strategy for responding to North Korea’s continuing buildup of its nuclear arsenal and tests of its intercontinental ballistic missiles.But the minority leader said the proposal is not about Trump; it’s about presidential powers.“I believe that if we go forward on that, it has to be in a bipartisan way, because it’s about all presidents,” she said. As to what an update would look like, Pelosi said, “There are all kinds of proposals out there, one … declaring the United States of America will not engage in first use of a nuclear weapon. I like that one the best.”

"This Is A Racket" Kucinich Warns "We Must Challenge The 'Two-Party Duopoly' Committed To War --In a new interview with host Jesse Ventura at RT, former United States presidential candidate and House of Representatives Member Dennis Kucinich stressed the importance of the American people challenging the “two-party duopoly that’s committed to war.” In the interview, Kucinich discusses his work to expose the misinformation used to argue for US government interventions overseas before and during the Iraq War and, later, concerning the US effort to assist in the overthrow of the Syria government. Regarding the Iraq War, Kucinich, who is an Advisory Board member for the Ron Paul Institute for Peace and Prosperity, explains that his research showed that “Iraq had nothing to do with 9/11, nothing to do with al-Qaeda’s role in 9/11, didn’t have any connection to the anthrax attack, didn’t have the intention or the capability of attacking the United States, and didn’t have the weapons of mass destruction that were being claimed.”This information, Kucinich relates, he provided to US Congress members in an October 2, 2002 report showing “there was no cause for war.”Despite Kucinich and other individuals’ efforts to stop the march toward war, Congress passed an authorization for use of military force (AUMF) against Iraq later in October, and the invasion of Iraq commenced in March of 2003. Kucinich, in the interview, places the Iraq War, with its costs including trillions in US government spending and the death of over a million Iraqis, in the context of “this American imperium, this idea that somehow we have the right to establish ourselves anywhere we want” including with “over 800 bases in 132 countries” and to go around the world “looking for dragons to slay while we ignore our own problems here at home.”Why are we “wasting the blood of our nation, the treasure of our nation, our young people” on these overseas activities that are “causing catastrophes among families in other countries?” Kucinich asks. He answers as follows: This is a racket. This is a way for people who make arms to cash in or have government contracts to cash in.

America’s Permanent Wars as Mere Background Noise - By Andrew J. Bacevich - Consider, if you will, these two indisputable facts.  First, the United States is today more or less permanently engaged in hostilities in not one faraway place, but at least seven.  Second, the vast majority of the American people could not care less.  Nor can it be said that we don’t care because we don’t know.  True, government authorities withhold certain aspects of ongoing military operations or release only details that they find convenient.  Yet information describing what U.S. forces are doing (and where) is readily available, even if buried in recent months by barrages of presidential tweets.   Ever since the United States launched its war on terror, oceans of military press releases have poured forth.  And those are just for starters.  To provide updates on the U.S. military’s various ongoing campaigns, generals, admirals, and high-ranking defense officials regularly testify before congressional committees or brief members of the press.  From the field, journalists offer updates that fill in at least some of the details — on civilian casualties, for example — that government authorities prefer not to disclose.  Contributors to newspaper op-ed pages and “experts” booked by network and cable TV news shows, including passels of retired military officers, provide analysis.  Trailing behind come books and documentaries that put things in a broader perspective. But here’s the truth of it.  None of it matters. Like traffic jams or robocalls, war has fallen into the category of things that Americans may not welcome, but have learned to live with.  In twenty-first-century America, war is not that big a deal.   Why do Americans today show so little interest in the wars waged in their name and at least nominally on their behalf?  Why, as our wars drag on and on, doesn’t the disparity between effort expended and benefits accrued arouse more than passing curiosity or mild expressions of dismay? Why, in short, don’t we give a [expletive deleted]?  Perhaps just posing such a question propels us instantly into the realm of the unanswerable, like trying to figure out why people idolize Justin Bieber, shoot birds, or watch golf on television. 

This Is What Americans Heard During The Mysterious Cuban Sonic Attacks, And Why Experts Don't Buy It --Multiple neurologists and experts have told The Guardian that the mysterious 'sonic attacks' upon US diplomats in Cuba are likely just a case of mass hysteria. The extensive Guardian report is based on research and interviews with top neurologists and medical experts explaining that the likeliest explanation for the strange and inexplicable symptoms reported by US embassy staff in Cuba which have led to a breakdown in relations between the two countries has nothing to do with some kind of Cuban sonic device or high tech conspiracy.The neurologists say that the most plausible explanation is that the diplomats' high stress environment is leading to neurological abnormalities and disorders which are causing psychosomatic (or self-induced) symptoms. If true it would be a shocking revelation that such a "natural cause" phenomenon could result in the US removing most of its embassy staff from Havana. The Guardian report was issued on the very day that the Associated Press published what it purports to be an audio recording of high pitched undulating sounds which some embassy workers in Havana claim made them sick. Reports indicate that 22 US victims have suffered mysterious ailments after working at the embassy, including hearing, visual, cognitive, balance, sleep and other problems.

After 78 Killings, a Honduran Drug Lord Partners With the U.S. - The number of murders the Honduran drug lord admitted to orchestrating over 10 years was stunning. The dead included people he described as killers, rapists and gang members. Then there were the innocents: a lawyer, two journalists, a Honduran refugee in Canada, an official who was serving as Honduras’s antidrug czar and a politician who became his adviser; there were even two children caught in a shootout. In all, the drug lord, Devis Leonel Rivera Maradiaga, said that, working in concert with drug traffickers and others, he had “caused” the deaths of 78 people — a number that posed a dilemma for United States officials when Mr. Rivera came to them offering to expose high-level corruption in this Central American nation of some nine million people.Knowing that he was already in the sights of United States investigators, Mr. Rivera sought to help the Drug Enforcement Administration root out corrupt Honduran politicians and other elites who had made Honduras a gateway for massive amounts of cocaine headed for the United States through Mexico. The offer came at a time when United States officials were deeply concerned by Honduras’s slide into anarchy. A stalwart ally and home to a United States military base, Honduras was plagued by drug traffickers and gangs and had one of the world’s highest homicide rates. It is the first landing point for about 80 percent of suspected drug flights departing from South America, the State Department has said. But to sign Mr. Rivera to a formal cooperation agreement meant the government would most likely have to do something for him: seek leniency on his behalf, which could spare him a long prison sentence and leave the families of the Honduran victims believing that Mr. Rivera got away with murder.

Turkey urges U.S. to review visa suspension as lira, stocks tumble (Reuters) - Turkey urged the United States on Monday to review its suspension of visa services after the arrest of a U.S. consulate employee sharply escalated tensions between the two NATO allies and drove Turkey’s currency and stocks lower. Relations between Ankara and Washington have been plagued by disputes over U.S. support for Kurdish fighters in Syria, Turkey’s calls for the extradition of a U.S.-based cleric and the indictment of a Turkish former minister in a U.S. court. But last week’s arrest of a Turkish employee of the U.S. consulate in Istanbul marked a fresh low. Turkey said the employee had links to U.S.-based Muslim cleric Fethullah Gulen, blamed by Ankara for a failed military coup in July 2016. The U.S. embassy in Ankara condemned those charges as baseless and announced on Sunday night it was halting all non-immigrant visa services in Turkey while it reassessed Turkey’s commitment to the security of its missions and staff. Within hours, Ankara announced it was taking the same measures against U.S. citizens seeking visas for Turkey. On Monday the Turkish foreign ministry summoned a U.S. diplomat to urge the United States to lift the visa suspension, saying it was causing “unnecessary tensions”. Justice Minister Abdulhamit Gul said that if Washington had serious security concerns about its missions in Turkey, steps would be taken to address them. “But if it’s an issue regarding the arrest of the consulate employee, then this is a decision the Turkish judiciary has made,” Gul told A Haber television. “Trying a Turkish citizen for a crime committed in Turkey is our right.” 

Turkey Digs in Heels Over Diplomatic Fight With U.S. - Turkey arrested a locally hired employee of the U.S. consulate in Istanbul last week, sparking a fierce diplomatic spat between the two countries that came to a head over the weekend when each country suspended consular services in the other. But the spat isn’t over, and now Turkey is digging in its heels.On Monday, Turkish authorities summoned a second U.S. consulate worker to testify as a suspect in a terror case, Turkish state media reported.“An employee at the U.S. Consulate Istanbul … who does not have diplomatic immunity, has been summoned to our chief public prosecutor’s office [in Istanbul] for his testimony,” Istanbul’s Chief Prosecutor’s Office said in a statement on Monday. The statement also said the employee’s wife and child were detained on terror charges, as Turkish state news Anadolu Agency reported. It’s the latest example of a growing rift between Washington and Ankara, which are (at least on paper) close allies. Critics fear the local hires at the embassy, who don’t have U.S. citizenship nor diplomatic immunity, could become pawns in Turkey’s larger geopolitical game and bilateral showdown with Western countries bristling at its backslide toward authoritarian rule.On Oct. 4, Turkish authorities arrested Metin Topuz, a local employee at the U.S. consulate in Istanbul, amid accusations of espionage and terrorism over alleged ties to U.S.-based cleric Fethullah Gulen. Turkish President Recep Tayyip Erdogan blames Gulen, once a political ally, for a botched coup attempt in July 2016. The U.S. embassy in Ankara issued a statement saying the U.S. government was “deeply disturbed” by the arrest and the charges rested on “baseless, anonymous allegations.”  The State Department slapped back, effectively cutting off Turks from traveling to the United States by suspending indefinitely nonimmigrant visa services. Turkey took the same action in response.

Turkey Sentences Wall Street Journal Reporter To Jail For Terrorist Propaganda - A Turkish court has just fanned the flames of an incipient diplomatic crisis between the US and NATO's most problematic member, when it found a Wall Street Journal reporter guilty of engaging in "terrorist propaganda" in support of a banned Kurdish organization. Ayla Albayrak was sentenced to more than two years in prison for writing a 2015 story about clashes between Turkish security forces and Kurdish separatists in the country’s restive southeast.While charges have been pending against the reporter - who presently resides in New York and was convicted in absentia – for more than a year, the decision will promptly be interpreted by the US as the latest recrimination in a spat that began last week when Turkey arrested a local employee at the US consulate in Istanbul on terrorism-related charges, alleging he was a supporter of Fehtullah Gulen, an Turkish cleric living in self-imposed exile in the US who Turkish President Recep Tayyip Erdogan has blamed for last year’s coup attempt. The arrest prompted the US to suspend visa issuance for Turkish citizens, a move that was swiftly reciprocated by the Turkish government. On Monday, Turkey announced charges against another US embassy employee, sending the Turkish lira crashing the most since the July 2016 failed "coup", while local stocks and bonds tumbled in sympathy. WSJ Editor in Chief Gerry Baker slammed the Turkish court’s decision" “This was an unfounded criminal charge and wildly inappropriate conviction that wrongly singled out a balanced Wall Street Journal report,” said Baker. “The sole purpose of the article was to provide objective and independent reporting on events in Turkey, and it succeeded.”

Erdogan Tells US "We Don't Need You" -- Amid the escalating visa and arrest crisis between Ankara and Washington, President Recep Tayyip Erdogan decided to pour some more gasoline on the fire, and said on Thursday that if the U.S. does not accept Turkey the way it is "then we do not need you", and blamed the ongoing diplomatic dispute on a US ambassador "who doesn't know his place." "We are not a tribal state. We are the state of the Republic of Turkey and you will accept it. If you don’t, then sorry but we do not need you,” Erdogan said quoted by Hurriyet, addressing a meeting of provincial governors in the capital Ankara. Calling on Washington to “return to reason,” Erdogan repeated his claim that it was U.S. Ambassador to Ankara John Bass who prompted the current crisis. "Let me be very clear, the person who caused this is the ambassador here. It is unacceptable for the United States to sacrifice a strategic partner to an ambassador who doesn't know his place," Erdogan said as quoted by Reuters. “What a shame if the great United States of America is being governed by an ambassador in Ankara. Because this is the position they are holding. They should have said, ‘You cannot treat my strategic ally this way, you cannot act this way.’ But they couldn't say this," he said, as quoted by Anadolu Agency. Erdogan’s comments came a day after Ambassador Bass stated that the decision for visa suspension was taken by the U.S. government, which also confirmed that the decision was taken in coordination with the State Department, the White House and the National Security Council. “Our ambassadors tend not to do things unilaterally,”  Nevertheless, the Turkish president again claimed that it was Bass who prompted the current visa suspension crisis.

Inside Trump’s Head: An Exclusive Interview With the President, And The Single Theory That Explains Everything - Forbes - He boasts, with a dose of hyperbole that any student of FDR or even Barack Obama could undercut: "I've had just about the most legislation passed of any president, in a nine-month period, that's ever served. We had over 50 bills passed. I'm not talking about executive orders only, which are very important. I'm talking about bills."He counterpunches, in this case firing a shot at Secretary of State Rex Tillerson, who reportedly called his boss a moron: "I think it's fake news, but if he did that, I guess we'll have to compare IQ tests. And I can tell you who is going to win."And above all, he sells: "I also have another bill... an economic-development bill, which I think will be fantastic. Which nobody knows about. Which you are hearing about for the first time... Economic-development incentives for companies. Incentives for companies to be here." Companies that keep jobs in America get rewarded; those that send operations offshore "get penalized severely." "It's both a carrot and a stick," says the president. "It is an incentive to stay. But it is perhaps even more so—if you leave, it's going to be very tough for you to think that you're going to be able to sell your product back into our country." And so here we are, the first president to come solely from the private sector, representing the party that for more than a century championed laissez-faire capitalism and free trade, proposing that government punish and reward companies based on where they choose to locate factories and offices. Is the president comfortable with that idea? "Very comfortable," he replies. "What I want to do is reciprocal. See, I think the concept of reciprocal is a very nice concept. If somebody is charging us 50%, we should charge them 50%. Right now they charge us 50%, and we charge them nothing. That doesn't work with me."

Trump challenges Rex Tillerson to IQ test - BBC News: US President Donald Trump has challenged his Secretary of State, Rex Tillerson, to an IQ test, in the latest sign of discord between the two. He made the remark in a magazine interview when asked about reports that Mr Tillerson had called him a moron. "I think it's fake news," Mr Trump told Forbes, "but if he did that, I guess we'll have to compare IQ tests. And I can tell you who is going to win." Mr Trump is having lunch on Tuesday with Mr Tillerson.Reports have swirled of a schism in the Trump administration between the commander-in-chief and his top diplomat, as the US faces a host of vexatious foreign policy conundrums, from North Korea to Iran.Last week Mr Tillerson called a news conference to deny reports that he was considering quitting.Rex Tillerson says he never wanted to quit as Secretary of StateBut the former ExxonMobil chief executive did not refute an NBC News report that he had called his boss a moron after a July meeting at the Pentagon.Earlier this month, Mr Trump publicly undercut the former Texas oilman by tweeting that he was "wasting his time" trying to negotiate with nuclear-armed North Korea.Last week the New York Times reported that Mr Tillerson was astonished at how little Mr Trump grasps the basics of foreign policy.According to the newspaper, quoting sources close to the secretary of state, Mr Trump has been irritated by Mr Tillerson's body language during meetings.Mr Tillerson is said to roll his eyes or slouch when he disagrees with the decisions of his boss.

Mensa offers to host IQ test for Trump and Tillerson | TheHill: Bring on the IQ test — Mensa says it’s willing to host President Trump and secretary of State Rex Tillerson in a battle of the brains. In an interview with Forbes published Tuesday, Trump suggested he and Tillerson — who allegedly once called the commander in chief a “moron” — go head-to-head in an intelligence quotient showdown. The State Department has denied Tillerson ever made the comments. “I think it's fake news,” Trump told the magazine of Tillerson’s “moron” remark, “but if he did that, I guess we'll have to compare IQ tests. And I can tell you who is going to win." ITK reached out to the geniuses at Mensa — which describes itself as “an international society whose only qualification for membership is a score in the top two percent of the general population on a standardized intelligence test” — and asked if they’d be willing to take Trump’s suggestion. “American Mensa would be happy to hold a testing session for President Trump and Secretary Tillerson,” said Charles Brown, the group’s communications director. When asked if any American president or Cabinet member has ever taken a Mensa admissions test before, Brown pointed out that while the group can confirm membership, it doesn’t release who’s actually taken the brain-busting exam. 

Trump is falling apart, and nobody knows what to do about it - From the moment Donald Trump went down that golden escalator back in June of 2015 to announce his candidacy, people have been predicting that his improbable foray into politics was on the verge of imploding. There were a dozen disqualifying moments during the campaign, and since he's been president, we've careened from one disaster to another, each time wondering if he's going to survive. The smart money says he does, because he always has. Having said that, there's a shift taking place in Washington. It may just be the realization setting in that the man we saw on the campaign trail was the real, authentic Donald Trump and he's not going to change. There are too many reports coming from inside the administration on Capitol Hill expressing concern at his behavior to write this off as just another Trump storm that will soon pass. There are alarms going off all over Washington, and it feels different this time. First there are the reports of Trump having to be handled like a small child because of his moodiness and irrational demands. This part does not surprise me. He showed his puerile temperament on the campaign trail from the beginning. The infantile nicknames, his rage tweets, his narcissism all pointed to someone who was emotionally immature and intellectually in over his head. Here's one example from early in the primary season:  Trump's childish combativeness hasn't changed since he's been president and led to his greatest self-inflicted wound, the firing of FBI Director James Comey and the naming of special counsel Robert Mueller to oversee the Russia investigation. There is also a growing acknowledgement that Trump doesn't understand the job and isn't able to learn it. This too was obvious before the election. He was up-front about how he does business, admitting that he never bothered with market research or consultants of any kind.  No one should have expected that he would be willing or able to learn anything new as president, and he isn't. He believes he is omniscient.

American Kakistocracy - Kakistocracy is a term that was first used in the 17th century; derived from a Greek word, it means, literally, government by the worst and most unscrupulous people among us. More broadly, it can mean the most inept and cringeworthy kind of government. As I wrote my new book with E.J. Dionne and Tom Mann, One Nation Under Trump, I kept returning to the term. Kakistocracy is back, and we are experiencing it firsthand in America. The unscrupulous element has come into sharp focus in recent weeks as a string of Trump Cabinet members and White House staffers have been caught spending staggering sums of taxpayer dollars to charter jets…  … Awful as the grifterish mentality and behavior may be, worse is the other part of kakistocracy—inept, corrupt, and disruptive governance. Impulsive, stream-of-consciousness communications from the president by tweet are one thing. Examples like a budget that aims to knock out our weather satellites and cut our ability to respond to a pandemic, along with the Federal Emergency Management Administration (FEMA) removing from its website information about the disastrous conditions in Puerto Rico while pumping up the good news, are another. More troublesome still is the danger to world stability reflected in the embarrassing contretemps-triangle involving Secretary of State Tillerson, Secretary of Defense Mattis, and Trump. Within the last week, Trump undercut Tillerson via tweet, taking diplomatic talks with North Korea off the table while his secretary of state was in China (after undercutting our vital ally South Korea by attempting to blow up our joint free-trade agreement). Then NBC reported that Tillerson had privately called the president a “moron.” Mattis then told the Senate that America should continue to certify the Iran-nuclear deal, as it is in our national-security interest—after which the president threatened to decertify the deal, undercutting the credibility of his defense secretary.* While we have seen many instances in the past of presidents and Cabinet members at odds—remember Gerald Ford and James Schlesinger; Ronald Reagan and Alexander Haig—we have had nothing like these public disputes and contradictory signals involving the most sensitive trouble spots on earth.

The Infantilization of the President -- As every toddler knows, bigger is better, whether that’s two scoops of ice cream (versus one for everyone else), a border wall, or a nuclear arsenal. And that was President Trump’s reaction during a July meeting with military and national-security leaders about the nuclear arsenal, too, according to NBC News. In total, he sought a tenfold increase in the U.S. store of nukes: Trump’s comments, the officials said, came in response to a briefing slide he was shown that charted the steady reduction of U.S. nuclear weapons since the late 1960s. Trump indicated he wanted a bigger stockpile, not the bottom position on that downward-sloping curve. Trump’s aides were taken aback: “Officials briefly explained the legal and practical impediments to a nuclear buildup and how the current military posture is stronger than it was at the height of the buildup.” Officials said there’s currently no plan for a massive buildup. If Trump’s approach to nukes and ice cream alike is childlike, this story is the latest example of how Trump’s aides treat him like a child too. In the case of the nuclear weapons, advisers seem to have taken Trump’s outburst as bizarre and dangerous and quietly moved to suppress it. In the past, aides have disagreed with presidents’ judgments as unwise, worried that their drinking would on occasion render them dangerous, or expressed concern that they were suffering from senility.  What is different in the Trump administration is that it’s the president’s own loyalists who view, speak about, and treat him as a child.  This is apparent in  Secretary of State Rex Tillerson’s description of the president, following this meeting, as a “moron”—suggesting that Trump is simply not cognitively or emotionally up to the job. There is of course Senator Bob Corker’s remark that the White House functions as “an adult day care” and his follow-up to The New York Times: “He doesn’t realize that, you know, that we could be heading towards World War III with the kinds of comments that he’s making.” Corker also complained, like a weary parent, “I don’t know why the president tweets out things that are not true. You know he does it, everyone knows he does it, but he does.”  Other aides spoke about Trump this week like an under-napped toddler on the verge of a tantrum. The Washington Post reports: “One Trump confidant likened the president to a whistling teapot, saying that when he does not blow off steam, he can turn into a pressure cooker and explode. ‘I think we are in pressure-cooker territory,’ said this person, who spoke on the condition of anonymity to talk candidly.”

How Rand Paul became the Trump Whisperer - Donald Trump should hate Rand Paul.  The Kentucky senator has opposed the president on just about everything; from the first GOP budget to tax reform to Syria strikes to Trump's Saudi Arabian arms deal to his Afghanistan policy to the debt ceiling and hurricane funding to multiple attempts to repeal and replace the Affordable Care Act. They could hardly disagree more. And Paul has stymied Trump's agenda at every turn — voting against the president's ACA replacement and fighting his beloved CIA director.  But the two men have cemented one of the stranger relationships of the Trump reign. Based on a half dozen sources with front row seats to the odd couple, the enemy (Paul) of a bigger enemy (McConnell) can become one of Trump's few Senate friends. That, by the way, is a big problem for GOP leadership. Top Hill Republicans — as well as senior administration officials — are frustrated and concerned. It wasn't always this way. On the campaign trail, Trump tweeted that Paul was "truly weird" and "without a properly functioning brain." Paul, meanwhile, once called Trump an "orange-faced windbag." Despite all this, Trump calls Paul "my friend" — and it's mutual. Paul's spokesman Sergio Gor told Axios that the senator "considers the president a personal friend," noted that they speak several times a week and said Trump recently invited him for another round of golf. A source close to Trump puts it this way: "They'll talk on the phone and Trump will go on about Bedminster and golf and whatever else is going on; and Rand will drop in his libertarian ideas. And Trump will laugh and say, 'This guy's crazy. He doesn't care about anything. Doesn't care about Mitch. Doesn't care about anybody.' They won't even argue. He'll let him speak his mind." Of all 52 Senate Republicans, Paul gives leadership the most heartburn. But this doesn't seem to bother Trump, who actually relishes in Paul's antagonizing of the Majority Leader.

NAFTA Negotiators Report Progress, Warn of Challenging Road Ahead - Ministers from Canada, Mexico, and the United States announced last week that they have made steady progress in their latest negotiating round on modernising the North American Free Trade Agreement (NAFTA), and are set to reconvene next week in Washington to continue negotiating.  The 11-15 October round will come just one fortnight after officials wrapped up their third negotiating round in Ottawa, Canada. At that gathering, ministers announced that the three parties have now effectively wrapped up the chapter on small and medium-sized enterprises (SMEs), with just a few items remaining.They also confirmed that they plan to finish up talks on the competition policy chapter before they meet in Washington.“Negotiators are now working from consolidated texts in most areas, demonstrating a commitment from all parties to advance discussions in the near term,” said a trilateral statement from the three countries.They also confirmed that there had been a first exchange of market access offers in public procurement, along with citing progress in various areas, including customs and trade facilitation, digital trade, and good regulatory practices. Ministers did not specify what those chapters entail in detail.Canadian Foreign Minister Chrystia Freeland also said that discussions were held on her country’s proposal for a chapter on gender and trade, as well as a concept paper on an indigenous people’s chapter – both of which she had announced previously as key areas of interest for Ottawa.

Canada's Trudeau to tell Trump: we're not your problem at NAFTA | Reuters: (Reuters) - When Canadian Prime Minister Justin Trudeau meets President Donald Trump on Wednesday, he will try to persuade the U.S. leader to focus on Mexico as a source of potential problems at talks to update NAFTA. Although Trudeau officials were confident Trump would mostly target Mexico as the three nations started to renegotiate the North American Free Trade Agreement, Washington has slapped duties on Canadian Bombardier airliners and lumber exports in recent months and talked tough on dairy and wine. Foreign Minister Chrystia Freeland said Trudeau would “explain really clearly to the President ... that Canada is not America’s problem”. Freeland, who says Canada buys more from the United States than China, Britain and Japan combined, told CTV television on Sunday that Trudeau’s message to Trump at their White House meeting would be “We are your biggest client.” Trump has threatened to scrap the 1994 pact unless changes are made to address issues such as a $64 billion deficit with Mexico. Negotiators start the fourth of seven planned rounds of talks near Washington on Wednesday. Freeland describes the U.S. administration as the most protectionist since the 1930s while noting the United States runs a surplus in the trade of goods and services with Canada.Canada has so far shunned confrontation with Washington, stressing instead the merits of NAFTA and free trade. By no means everyone south of the border is convinced. 

The NAFTA round to end all NAFTA rounds? -- It’s the first day of what could be a defining round of NAFTA talks. Negotiators from the U.S., Canada and Mexico will converge on a Pentagon City, Va., hotel, but the real fireworks may be seen north of the Potomac as Canadian Prime Minister Justin Trudeau discusses the pact with President Donald Trump and House Ways and Means Committee members. ..Even before Trudeau landed in Washington on Tuesday, Trump’s latest views on NAFTA emerged in a Forbes Magazine interview:“I happen to think that NAFTA will have to be terminated if we’re going to make it good,” he said. “Otherwise, I believe you can’t negotiate a good deal.” Agriculture Secretary Sonny Perdue, seeking to soothe nerves on Tuesday, interpreted Trump’s statement to mean the president wants “to redefine and renegotiate NAFTA in a free and fair trade deal. We support him in that.” But on a more substantive level, the talks could see some of the thorniest U.S. proposals thrown onto the negotiating table, including on automotive rules of origin, investor-state dispute settlement, a five-year “sunset” provision and a bid to rid the agreement of its trade remedy dispute provisions. Still unclear is whether those proposals are merely starting points for negotiations or red lines that will send the talks into free fall. “This is absolutely headed for a disaster,” one worried business lobbyist told Morning Trade. “This is an absolute crisis. I am pretty damn pessimistic about where NAFTA is headed.” The talks this week could also be the longest round yet, having been extended by two days. Canadian Foreign Minister Chrystia Freeland will return to Washington on Oct. 17 to meet with her U.S. and Mexican counterparts and close the talks, a spokesman for her office told Morning Trade. Freeland is in Washington this week with Trudeau and will accompany him to Mexico for the second leg of his trip. 

US Proposes "Sunset Clause" That Would Kill NAFTA After 5 Years - After President Donald Trump said Wednesday that the US would be open to striking bilateral trade agreements with Mexico and Canada if the three neighbors can’t come to an agreement on Nafta, Bloomberg is reporting the administration's negotiators have proposed a “sunset clause” that would see the North American Free Trade Agreement expire after five years unless the parties agree to extend it.According to Bloomberg’s sources, the proposal was presented to a small group of negotiators, and is the latest sign that the talks – the fourth round of which began Wednesday – remain at an impasse with the self-imposed soft year-end deadline rapidly approaches.  To be sure, the Trump administration insists that real progress is being made. US Trade Representative Robert Lighthizer kicked off the fourth round of talks on Wednesday by announcing an agreement on a chapter on competition.Specifically, Lighthizer said the countries have agreed to increase “procedural fairness in competition law enforcement.” Previously, the parties agreed to revise a chapter on small and medium-sized businesses. Canada and Mexico rejected the idea of a sunset clause after Commerce Secretary Wilbur Ross floated the idea last month, saying they wouldn’t be able to tolerate the uncertainty it would create for businesses seeking to make long-term investments. Besides, Nafta already has an exit provision allowing members to withdraw after giving six months of notice.

Revolt of the business groups - Business groups like the U.S. Chamber of Commerce and the Business Roundtable that have long provided the bulk of the support to get trade agreements through Congress are increasingly alarmed about the Trump administration’s plans for revamping NAFTA.  “The companies represented at the Business Roundtable are very concerned with reports that the Trump administration will weaken NAFTA with drastic changes that would disrupt supply chains that have greatly benefited U.S. businesses, workers, and consumers over the last two decades,” Josh Bolten, president and CEO of the group, said on BRT’s website, as the fourth round of renegotiations got underway Wednesday. “Even worse, withdrawal from NAFTA would put at stake millions of American jobs in every sector of the U.S. economy, the competitiveness of U.S.-produced goods and services, and our country’s standing as a global economic leader,” Bolten continued, referring to the possibility that President Donald Trump will pull the U.S. out of the pact if Mexico and Canada balk at the administration’s proposals and the talks break down. In addition, an ad hoc coalition of business groups that includes National Association of Manufacturers, the National Foreign Trade Council, the Coalition of Services Industries, the American Farm Bureau Federation and the National Pork Producers Council hit Capitol Hill on Wednesday to enlist lawmakers in their campaign against the Trump administration’s new approach to trade policy. “This is really a massive negative reaction to where the administration is trying to take trade agreements and trade policy generally from what I would describe as the overwhelming majority of manufacturers, agricultural groups and services industries,” one industry official involved in the effort said. “We’re asking members of Congress to contact the White House and Commerce and Ag and to voice their opposition to withdrawal from NAFTA; opposition to changes that go in the direction of restricting trade, rather than improving the agreement and improving trade; and to really suggest to the administration that they step back and do a better job of consulting with a wide, wide, wide range of groups that have these concerns,” the official added, speaking on condition of anonymity. 

Did Boeing Pick Fight With Bombardier to Appease Trump? -  In a podcast at Aviation Week’s website, Teal Group vice president and long-time aerospace industry analyst, Richard Aboulafia, replied to a question about Boeing Co.’s  motivation for seeking a tariff on the Canadian planes after losing out on the Delta contract. Q: Did Boeing pick this fight with Bombardier to appease or impress the President of the United States? Aboulafia: I think that’s a big part of it. … I think [Boeing] saw an opportunity and it was a tactically clever move to turn a threat into an alliance and it’s been going pretty well, but I think with this [tariff], I think they’re going too far with it. Let’s look at [Boeing’s] motivation. First thing that happened when Trump took office was he tweeted at them. It was an attack. He went after Air Force One to “cancel order.” Simultaneously he threatened to impose a 45% tariff on Chinese imports which would have closed off [Boeing’s] biggest single export market by way of retaliation. At the same time he criticized the Super Hornet effectively as a piece of junk. If I were Boeing management, I would be scared stupid. And frankly I think [Boeing] reacted by doing everything they can to help [Trump] pander to his economic nationalist base. That’s what’s going on here because, frankly, the only thing worse than being best friends with the school bully is being on the receiving end of the school bully’s bullying.  

Delta has no intention of paying 300% Bombardier jet tariff in Boeing dispute - Oct. 11, 2017: One way or another, Delta Air Lines (DAL) won't be paying the tariff the U.S. Department of Commerce wants to put on the delivery of each of its Canadian Bombardier C Series jetliners. "We do not expect to pay the tariffs and we do expect to take the planes," said Delta Chief Executive Ed Bastian on Wednesday morning on the company's earnings call. "We will not pay tariffs that are being discussed and debated." Bastian cautioned that there may be a delay in starting delivery of the first jets from Bombardier, which are due to arrive in spring of 2018. But he anticipated there would be a conclusion to the trade dispute between Bombardier and Boeing over the next 12 months.Delta in 2016 ordered as many as 125 new CS100 jets from the Canadian aerospace company, Bombardier. The deal sparked allegations by Boeing (BA)that the plane maker had sold the C Series to Delta at "absurdly low prices." Boeing took its case to the U.S. Department of Commerce, claiming the sale had harmed the U.S. manufacturer and its single-aisle 737 products. The Commerce Department preliminarily ruled in two separate cases the C Series should be subject to import tariffs as much as 300%. Early next year the International Trade Commission, a quasi-judicial body of the U.S. government, will determine if harm was done to Boeing by the deal. Bastian emphasized that he does not believe Boeing suffered harm. "In our opinion it is very difficult for Boeing or any U.S. manufacturer to claim harm with a product that we purchased that [Boeing] did not offer and they don't produce."  Boeing stopped producing jets the size the Delta wanted to purchase in 2006. As part of Delta's competition between manufacturers to supply it small airliners, Bombardier offered the CS100, while Boeing offered used Brazilian regional jets, not all-new airplanes.

USTR holds dual China, Russia hearings today --If USTR was expecting scores of business leaders to bear their souls in public about the challenges of operating in China, that doesn’t seem to be on the agenda for today. A total of 14 witnesses, including several from Chinese trade organizations, are scheduled to testify at a hearing today as part of USTR’s “Section 301” investigation into whether China’s technology and intellectual policy and practices violate its World Trade Organization commitments — or that they are “unreasonable or discriminatory” actions that harm U.S. exporters, service providers or intellectual property rights holders.  But only three companies — SolarWorld Americas, American Superconductor Corp. and ABRO Industries — will be on hand to share their perspectives. Others appearing include witnesses from the Commission on the Theft of American Intellectual Property, the Information Technology and Innovation Foundation and the International Association of Machinists and Aerospace Workers. Several groups that filed comments — such as the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Foreign Trade Council, the U.S. Council for International Business and the Pharmaceutical Research and Manufacturers of America — decided against testifying.  USTR is also holding its annual hearing today on Russia’s compliance with World Trade Organization rules. Only three groups — the US-Russia Business Council, International Intellectual Property Alliance and The App Association — have asked to testify. USTR uses the hearing to gather information for a report due out in December, which this year marks the fifth anniversary of Moscow’s entry in the WTO.

First Solar wades into solar trade case fight, supports Suniva, SolarWorld - Thin film developer First Solar filed a statement with the U.S. International Trade Commission Tuesday night in support of Suniva and SolarWorld's quest for import relief from imported solar equipment, but stopped short of offering up a solution. First Solar, a member of the Solar Energy Industries Association (SEIA), urged the ITC to "reject the notion that the [U.S. crystalline silicon photovoltaic cells] industry must be left to die so that the downstream solar industry may live." Company CEO Mark Widmar wrote that he believes the commission "can design an effective remedy that allows solar demand to flourish." First Solar is one of the few solar developers that stands to benefit if Suniva and SolarWorld's remedy proposals are approved. The company said it manufactured crystalline silicon photovoltaic (CSPV) cells until 2016, when the hefty competition from imports shifted its focus to thin cells.Until Tuesday, Arizona-based First Solar now had not directly commented on the contentious hearings at the ITC to impose trade protections for domestic solar manufacturers. A member of SEIA, which opposes the tariff petition, the company said its past experience as a CSPV manufacturer could shed light on potential remedies. In its statement, First Solar noted incurred operating losses of $502.59 million in 2016, the same year it decided to exit the CSPV manufacturing business in favor of the more "cost effective" thin film modules in development. 

Mnuchin Calls for World Bank to Wean Itself Off Public Funds - U.S. Treasury Secretary Steven Mnuchin rejected the idea of a capital increase for the World Bank and urged the development lender to put forward a plan to become financially self-sufficient.“More capital is not the solution when existing capital is not allocated effectively,” Mnuchin said Friday in a statement at the annual meetings of the IMF and World Bank in Washington. “Demand for cheap capital will invariably exceed its supply -- the key is to ensure that these resources are deployed where they are needed most and can achieve effective and sustainable results.”World Bank President Jim Yong Kim this week said the Washington-based lender needs its member countries to contribute more capital in response to surging demand for the institution’s loans from emerging markets and developing economies. Mnuchin not only shot down that idea, he called on the bank to “put forward a framework that can create a financially self-sustaining World Bank in which organic capital accumulation is sufficient to support future lending targets.”  Mnuchin is adopting a tougher tone than his predecessors toward the World Bank and the IMF, both conceived during the Second World War to combat global financial instability and promote open markets.The U.S. contributed to $2.8 billion to the World Bank’s main fund last year, and $569 million to the bank’s arm that lends to the private sector, according to Treasury records. In a separate statement, the Treasury secretary urged the IMF to find ways to save money, including by looking at how much it pays its employees.

The State of U.S. Infrastructure - CFR - The $18 trillion U.S. economy relies on a vast network of infrastructure from roads and bridges to freight rail and ports to electrical grids and internet provision. But the systems currently in place were built decades ago, and economists say that delays and rising maintenance costs are holding economic performance back. Civil engineers raise safety concerns as well, warning that many bridges are structurally deficient and that antiquated drinking-water and wastewater systems pose risks to public health. Meanwhile, Americans’ international peers enjoy more efficient and reliable services, and their public investment in infrastructure is on average nearly double that of the United States. As President Donald J. Trump enters his first budget negotiations with Congress, debate has intensified over how to improve the nation’s infrastructure. Skeptics of federal spending have pushed for new models of private sector involvement, arguing that it is more efficient and cost-effective. Others argue that increased public spending will be necessary to meet the country’s growing needs and ensure that development is in the public interest. As engineer and historian Henry Petroski explains in his book The Road Taken: The History and Future of America’s Infrastructure, poor infrastructure can impose large costs on the U.S. economy. According to Petrosky, the delays caused by traffic congestion alone cost the economy over $120 billion per year. Airports are another choke point: international tourism supports 1.2 million U.S. jobs and brings in hundreds of billions of dollars of tax revenue. But some studies have found that delays and avoided trips due to the poor state of the nation’s aiports cost the economy over $35 billion per year. Many analysts say that investing in both new infrastructure and current maintenance would positively impact the economy in a number of ways. By increasing efficiency and reliability and lowering transportation costs, it would boost long-term U.S. competitiveness and insulate the economy from shocks. It would also directly add demand and employment, as some fourteen million workers, or 11 percent of the total U.S. labor force, are currently employed in infrastructure-related sectors, according to the Brookings Institution. Economists generally see infrastructure spending as having a significant “multiplier effect,” though estimates differ. A 2014 University of Maryland study found that infrastructure investments added as much as $3 [PDF] to GDP growth for every dollar spent, with a bigger effect during a recession. Global consulting firm McKinsey estimates that increasing U.S. infrastructure spending by 1 percent of GDP would add 1.5 million jobs to the economy.

Public officials risk national security by using cellphones - It’s recently been disclosed that White House Chief of Staff John Kelly’s personal cellphone was compromised last December, a period of nine to 10 months in which he likely carried the device around with him. What does this mean? Kelly’s personal calls and data were hacked and his private life would be exposed to foreign hackers who could use the information in many different ways.It also means that wherever Kelly carried the phone, his location would be known to hackers. If he was with the President, a major part of Kelly’s job, then the President’s location could be pinpointed within a few meters, thanks to GPS.It’s highly significant because reports suggest the malware on Kelly’s phone was even functional when the phone was turned off. This is a characteristic of professional spyware known as a “spyphone.” Basically, the phone is capable of being activated remotely even when it is switched off. And the best spyphone malware does not activate the cellphone’s screen when it is turned on this way. Sometimes activation is timed to coincide with certain events. It can not only record conversations or turn the camera on, but it can also transmit immediately or wait until the early hours of the morning when the user is unlikely to detect the activity.Spyphone malware can also record conversations in a room whether the device is on or off, meaning sensitive conversations can be picked up unknown to the user. World leaders use cellphones and there are many cases in which they have been compromised. Included in this list are current or former world leaders such as Angela Merkel, Nicolas Sarkozy, Recep Tayyip Erdogan, Silvio Berlusconi and John Kerry. Victoria Nuland, a former State Department official, had her phone hacked, revealing a sensitive Ukrainian conversation. Even President Trump flirts with danger when he uses an old Samsung III for tweeting. Is this phone in his office or his bedroom?

A closer look at who does (and doesn’t) pay U.S. income tax - Pew Research --As Congress and the White House pivot from trying to repeal the Affordable Care Act to overhauling the U.S. tax code, it’s helpful to take a closer look at how the tax system works presently in the context of its recent history.Individual income taxes are the federal government’s single biggest revenue source. In fiscal year 2017, which ended Sept. 30, the individual income tax was expected to bring in nearly $1.66 trillion, or about 48% of all federal revenues, according to the Office of Management and Budget. The corporate income tax was estimated to raise another $324 billion, or 9% of total federal revenue.The rest of the federal government’s revenue comes from a mix of sources, including Social Security and Medicare payroll taxes, excise taxes such as those on alcohol and gasoline, unemployment-insurance taxes, customs duties and estate taxes. Spending that’s not covered by taxes is paid for by borrowing.The individual income tax is designed to be progressive – those with higher incomes pay at higher rates. A Pew Research Center analysis of IRS data from 2015, the most recent available, shows that taxpayers with incomes of $200,000 or more paid well over half (58.8%) of federal income taxes, though they accounted for only 4.5% of all returns filed (6.8% of all taxable returns).By contrast, taxpayers with incomes below $30,000 filed nearly 44% of all returns but paid just 1.4% of all federal income tax – in fact, two-thirds of the nearly 66 million returns filed by people in that lowest income tier owed no tax at all. (The IRS tax data used here are estimates based on a stratified probability sample of all returns.) Nearly all income tiers above $100,000 paid higher shares of total income tax in 2015 than they did in 2000 (though the shares for many high-income groups fell in the early 2000s, following enactment of major tax cuts in 2001 and 2003). For example, the $2 million-and-higher group paid 20.4% of all tax in 2015, up from 17.2% in 2000. The share for the $200,000-to-under-$500,000 group rose to 20.6% from 14.9%. Some of those shifts may be due to changes in the tax laws or to what’s known as “bracket creep” – the phenomenon in which inflation pushes people into higher tax brackets.

Republicans Worry About Keeping Trump’s Middle-Class Tax Promise -  Republican lawmakers in red and blue states are expressing unease over the limited details about middle-class relief in the tax framework their leaders released last month, which has raised difficult questions about how to prevent some middle-income Americans from paying more due to fewer tax breaks.As one example, the lack of specifics on how much to raise the child tax credit by has led to "frustration" among GOP lawmakers, said Representative Chris Collins, a New York Republican and ally of President Donald Trump. The early concern previews the political arguments that will surround tax legislation as Congress focuses in on it.Collins said more specifics about GOP plans to increase the child tax credit would make the benefit for middle-income families clearer. Instead, Republican lawmakers are fending off attacks that some middle-income families would be hurt because the plan calls for eliminating dependent exemptions and the state and local tax deduction.“We are committed, the Republicans are committed -- middle-income earners and even upper middle-income earners are not going to pay more in taxes, whether you live in Alabama, or whether you live in New York or New Jersey,” Collins said during a Bloomberg TV interview on Friday. Trump has repeated similar lines -- that the middle class will be the plan’s main beneficiaries. But the rhetoric so far doesn’t match up with the few details released on Sept. 27 -- and some recent analyses by Washington policy groups have used specifics from earlier GOP tax proposals in combination with the latest framework to find that some middle-income taxpayers might pay more.

The Trump administration’s tax plan is an atrocity - Larry Summers -- The Trump administration’s tax plan is not a plan. It is a melange of ideas put forth without precision or arithmetic. It is not clear enough to permit the kind of careful quantitative analysis of its expected budget costs, economic effects and distributional implications that precedes such legislation in a serious country. It is clear enough, however, to demonstrate that the claims of Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn and Council of Economic Advisers Chair Kevin Hassett are some combination of ignorant, disingenuous and dishonest. Hassett, whose job is to stand up for rigorous apolitical economic analysis, had the temerity last week to accuse the Tax Policy Center — staffed by many of the most distinguished tax analysts in the country — of issuing “scientifically indefensible” “fictions.” He and his colleagues should look in the mirror.     I have strong disagreements on tax policy with Republican economists such as Greg Mankiw, Glenn Hubbard and Martin Feldstein and with Treasury alumni such as Nick Brady, John Snow and Hank Paulson. Nothing I have ever heard or read from them seems absurd or dishonest in the way that almost everything coming out of this administration does.  We know enough to say that a tax-reform plan along the lines of the administration’s sketch would not substantially increase economic growth, would blow out the budget deficit and would make the United States an even more unequal place.  The administration pushes the idea that somehow cutting the corporate tax rate will be a huge spur to investment. It is certainly possible that with a lower tax rate accountants will locate more corporate income in the United States, but a big spur to investment seems unlikely. With after-tax long-term interest rates well below 2 percent, the stock market sky-high and businesses able to write off investments immediately, capital costs have never been lower. True, there is much cash parked overseas. But almost all the companies that have done so also have cash hoards in the United States that they have chosen not to invest.

Why Corporate Tax Cuts Won’t Create Jobs - I am what certain politicians call a “job creator.” Two recessions ago, in 2001, five partners and I founded a software company in Silicon Valley. After great difficulty and great good fortune, that company grew to serve customers in over 30 countries, generating over $500 million in annual revenue and employing more than 2,000 professionals in high-skilled, high-paying jobs — a large majority of them in the United States. Today I am the chief executive of that company, Guidewire Software, valued on the New York Stock Exchange at over $5 billion.  As an entrepreneur myself and a friend to many others, I know that lower tax rates will not motivate more people to start companies. People start companies for many reasons: a compelling idea, ambition for fame and fortune, a desire to be one’s own boss, frustration with one’s employer. I have never heard someone say, “I would have started a company, but tax rates were too high” or “I wouldn’t have started this company, but then George W. Bush cut tax rates, so I did.”  While I can imagine tax regimes that would create disincentives for entrepreneurship, we don’t have that situation today in America, where tax rates on capital gains (the primary way that founders of successful start-ups make money) are already far lower than rates on ordinary income. Indeed, some of the most admired entrepreneurs — Bill Gates, Steve Jobs, Jeff Bezos — started their companies under significantly higher tax regimes. This is consistent with empirical research; the economists Robert Moffitt and Mark Wilhelm, for example, found that the large cuts in marginal tax rates in 1986 did not induce high-income men to work longer hours.

The Tax-Cut Framework Won't Create Jobs and Digs the Inequality Ditch even Deeper – Linda Beale - Marcus Ryu, a self-described Silicon Valley entrepreneur who created, with others, a company now worth $5 billion on the New York Stock Exchange, argues in today's Op-Ed section of the New York Times that "Tax Cuts Won't Create Jobs", NY Times (Oct. 9, 2017), at A23 (the title in the digital edition is different from the print title:  Why Corporate Tax Cuts Won't Create Jobs).  He is right. The tax cuts proposed in the framework set out by the Trump administration and Republican leaders in Congress claims to be pursuing economic growth that will benefit ordinary people (Trump's purported base).  These claims are based in part on claims that  U.S. taxpayers (individual, corporate and individual who owns businesses through partnerships) are much more heavily taxed than taxpayers in other advanced countries.  Trump often points to the statutory tax rate for corporations (35%), which is higher than the statutory rate in most other advanced countries. But Trump usually ignores the fact that the vast majority of corporations (including very profitable U.S. multinationals) pay no or much lower taxes, in part because of the many loopholes and deductions that reduce the income that is taxed.  When one considers the nation's GDP and the percentage of GDP paid in taxes, it is quite clear that the U.S. is actually one of the lowest taxed of developed countries, which often have income taxes, corproate income taxes and value-added taxes (which the U.S. does not have), as well as specialty taxes such as financial transaction taxes (which the U.S. does not have).  See, e.g., Business Insider, Is the U.S. the highest taxed country? (Sept. 6, 2017). "[T]he most comprehensive measure by which to judge Trump's claim, combining corporate and individual taxes paid, is tax burden as a percentage of gross domestic product. It compares how much money in a country is put toward taxes with the economic output of the country.  By this measure, the US has the fourth-lowest tax burden of any OECD country, with only South Korea, Chile, and Mexico ranking lower."

After "Surreal" Feud Between Trump And Corker, "Tax Reform Is Dead. Full Stop": Cowen -- While Wall Street appears to have ignored the latest political spat within the Republican party over the weekend, in which Donald Trump lashed out at outgoing Senator Bob Corker, while the latter compared the White House to "daycare for adults", and later warned Trump may launch World War III`, this particular feud involving the president may have dire consequences for the market, which in recent weeks has repriced a more than 60% probability (according to Goldman) that Trump's tax reform will pass.Well, according to Cowen analyst Chris Krueger, not so fast. In a note released this morning, Krueger writes that "tax euphoria may break this week, with the Senate budget back to zero-margin on vote as President Trump, Sen. Bob Corker feud." And without a budget, "tax is dead. Full stop," Krueger writes.Cowen now sees the margin for passing a budget in the Senate as more challenging than in the House, plus "radically different" documents will have to be merged and passed again.Passing FY 2018 Senate budget has "some eerie parallels" to health care, as no Democrats will vote for the budget; Sen. Rand Paul is expected to vote no because it doesn’t cut spending fast enough; Sen. John McCain also sounds like a no as it doesn’t repeal sequester, which disproportionately hits the Pentagon.  That means GOP can only afford one more defection, with Corker, a deficit hawk, engaging in "one of the more surreal public correspondence exchanges in recent memory"days after saying Secretary of State Rex Tillerson, Defense Secretary Jim Mattis and White House Chief of Staff John Kelly help keep U.S. from chaos.

Trump’s Tax Plan Helps Wall Street Not Main Street - A general consensus is emerging that Trump’s tax plan, which he presented last Wednesday will benefit mostly the country’s upper classes and corporations. In fact the only people that got a tax increase are the poorest taxpayers. A quick scan of even business press headlines will reinforce what I’m saying. For example, Bloomberg writes, “Tax reform could open a huge loophole for wealthy Americans”, and the conservative magazines National Review has a headline that reads, “Congressional Republicans tax plan isn’t great for Trump suburbanites.” However, Trump himself promised on Wednesday that he and the rich generally would not benefit from this plan. Here’s what the President said.Our framework includes our explicit commitment, that tax reform will protect low income and middle income households, not the wealthy and well-connected. They can call me all they want, it’s not gonna help. I’m doing the right thing, and it’s not good for me, believe me. Joining us to analyze what Trump’s tax plan would mean for us is Michael Hudson. Michael is a distinguished research professor of economics at the University of Missouri, Kansas City. He’s the author of several books, and the most recent among them is J is For Junk Economics

The Times Handles the Trump Tax Cut Framework with Kid Gloves  – Linda Beale - There's been a good bit written about the Trump tax cut framework released just over a week ago.  Most of it points out, as I have here and here, the absurdity of the claims by Trump and GOP spokespeople that this isn't a tax cut aimed at benefiting the ultra wealthy.  After all, even with few details and no attempt to deal with the really tough issues that would face real tax reform considerations, it is awfully clear that almost everything in the package is designed to make the wealthy even wealthier.  Just a quick review of the way the proposed tax cuts exclusively or primarily benefit the ultra wealthy:

  • elimination of the estate tax, which taxes fewer than 2% of the estates, those that have in excess of $11 million (the couples' exempt amount) and haven't used the various trusts and family partnerships to let even more estate value escape tax through valuation gimmicks
  • elimination of the AMT, which imposes tax when the taxpayer would otherwise benefit from a surfeit of regular income tax subsidies (loopholes, tax expenditures, deductions, credits).  For a thorough analysis of the AMT, see A Taxing Matter series of 6 posts, beginning here.
  • reduction of the statutory corporate tax rate for the largest corporations from 35% to 20%, which benefits primarily the highly compensated managers (who receive substantial amounts of stock options as part of their compensation) and big shareholders (who tend to be mainly the ultra wealthy who own most of the financial assets) and does little or nothing to help small businesses, that already pay tax rates of 25% or less
  • creation of a single 25% rate for recipients of all business pass-through income (i.e., from partnerships), which benefits almost exclusively the ultra rich, since small business income is already taxed at 25% or less, while wealthy partners in real estate firms would be taxed at the highest individual rate under current law on their pass-through income, and
  • creation of full, upfront expensing, resulting in a non-economic windfall to businesses that will, again, mainly just increase profits passed on to their wealthy owners. (Although this is purportedly a five-year provision, everybody knows that is just a gimmick to pretend that its impact on the deficit is less than would be admitted if it were permanent.  Everybody also knows that the intent is to make it permanent.)

But there are always journalists who try a little too hard to give obviously bad tax ideas a surface claim to reasonableness.  Apparently, even James Stewart, who writes "common sense" entries for the business section of the New York Times, suffers this vulnerability.  See, for example, his "Tax Cuts are Easy, but a Tax Overhaul?  Three Proposals to Make the Math Work," New York Times (Oct. 6, 2017), at B1 (digitally titled "Tax Reform that doesn't bust the budget? I've got a Few Ideas, Oct 5, 2017).

Trump Tax Plan On Verge Of Disaster Amid Corker Feud, Paul Rejection --  Now that President Trump’s simmering feud with Tennessee Senator Bob Corker has exploded into the open, it appears that Republicans’ odds of passing tax reform before the White House’s self-imposed year-end deadline are growing slimmer by the day, and according to Cowen analyst Chris Krueger, "tax reform is dead, full stop." And with the administration increasingly staking its credibly on the process, Politico is reporting that White House Legislative Director Marc Short has - on the order's of the president - embarked on what’s probably a fool’s errand: coaxing Kentucky Sen. Rand Paul – one of the most vocal opponents of the administration’s agenda – to vote “yes” on the bill. The Republican bill hasn’t yet been written, but Paul has already lashed out at the administration’s nine-page tax-reform proposal for appearing to offset tax cuts for corporations and the rich by raising taxes on the middle class. Indeed, as discussed previously, a review of the preliminary proposal by the nonpartisan Tax Policy Center suggested that middle-class taxpayers could wind up paying more if certain deductions, such as eliminating the deduction for state and local taxes, are eliminated. Paul said in an interview that he’s undecided on both the budget and the tax plan blueprint but unleashed a torrent of criticism at the tax proposal nonetheless. The danger for this bill right now is the pay-for may be a middle-class tax hike. And if that’s that, it’s going to be a real problem,” Paul said. “If you lower the taxes on the rich and lower the taxes on the poor and then say, ‘Oh it’s going to be revenue neutral,’ we’ve got to raise somebody’s taxes to pay for it.”To be sure, the administration has reportedly backed away from eliminating the SALT deduction following an outpouring of criticism from both Republicans and Democrats. Still, Politico reports that Paul – who like Corker is wary of blowing out the budget deficit - is starting off in the “no” column and planning to vote against the Republican budget which has already passed the House and is working its way through the Senate.

These Are the Tax Issues Threatening to Divide Republicans -- President Donald Trump and Republican congressional leaders unveiled a framework in September for far-reaching changes to the U.S. tax code. Now it’s up to the House and Senate tax-writing committees to turn the framework into legislation that can pass both houses. They can do that without Democratic support because of a Senate procedure that lets them avoid a filibuster on bills related to taxing and spending. But first they have to reach agreement within their own ranks. With Republicans holding 52 seats in the 100-member Senate, only a few defections could sink a bill -- as happened to their failed efforts to repeal Obamacare. Here are issues that might divide Republicans.

  • 1. Will tax cuts add to the deficit? Some Republicans in the Senate, most notably Bob Corker of Tennessee, are opposed to tax cuts that aren’t paid for. Corker -- who at the moment isn’t on the best terms with the Trump White House -- estimates that the bill would need to find, or raise, $4 trillion to keep from increasing the deficit. Others, like Pat Toomey of Pennsylvania, Rand Paul of Kentucky and Ted Cruz of Texas, say a bill that’s revenue-neutral wouldn’t do enough to promote economic growth.
  • 2. How will the tax cuts be paid for? The framework gave few details, other than suggesting abolishing the state and local tax deduction. That would raise an estimated $1.3 trillion over a decade but faces headwinds from Republican lawmakers in districts that use the deduction heavily; National Economic Council Director Gary Cohn said ending it was negotiable while Republican leaders have been part of discussions about capping rather than killing it. House leaders have proposed abolishing the corporate interest deduction, a move opposed by debt-reliant industries like private equity and commercial real estate.
  • 3. Should the cuts be permanent or temporary? The Senate rule that allows passage by a simple majority requires that the bill not add to the deficit beyond 10 years. Tax cuts passed in 2001 and 2003 under President George W. Bush made some measures temporary specifically to avoid that vote-counting problem. Some Republicans arguing for offsetting tax increases say cuts have to be permanent to be effective in boosting growth. Toomey has called for changing the rule to extend the window to 30 years.
  • 4. Should the estate tax be repealed? A long-sought goal of Republican leaders is to end the estate tax. But Senator Mike Rounds of South Dakota said he doesn’t want to eliminate it, and Senator Susan Collins has opposed repeal of the estate tax in the past.
  • 5. How much benefit goes to the wealthy? Trump has insisted the legislation won’t cut taxes for the rich, but the framework includes provisions that would benefit the wealthiest, including rate cuts, repeal of the Alternative Minimum Tax, and cutting the tax rate substantially for closely-held businesses. It did, however, leave open the possibility of a new top individual income tax rate above the stated 35 percent. But it’s unclear that’ll happen, Orrin Hatch of Utah, the chairman of the Senate Finance Committee, and House Ways and Means Chairman Kevin Brady have said.
  • 6. Will some middle-income households pay more? Some Republicans are uneasy about gaps in the framework’s details about middle-class tax relief. A study by the nonpartisan Urban-Brookings Tax Policy Center found that most middle-income families would enjoy after-tax gains, but that taxes would go up for almost 30 percent of people making $50,000 to $150,000 because of new limits on tax breaks. .

Koch Group says Realtors among those 'jeopardizing' tax bill - A group backed by billionaire industrialists Charles and David Koch unveiled a television and digital campaign Wednesday that argues "corporate welfare" threatens Republican efforts to dramatically alter the U.S. tax code.The Freedom Partners Chamber of Commerce is targeting the politically powerful National Association of Realtors for opposing a proposal by the White House and Republican lawmakers to double the standard deduction, as well as several entities that represent renewable energy interests defending other tax credits. The groups are "jeopardizing tax reform," the Koch-backed group said in a statement.The effort is part of what the political network has described as a multimillion-dollar campaign to build public support for a streamlined federal tax system. In addition to paid advertising, the group has created a website it says will "spotlight efforts to promote and protect corporate welfare."The website says "millions of dollars are being spent to mobilize an army of lobbyists in Washington to protect industry-specific carve outs not explicitly addressed" in the tax framework presented by President Trump and Republicans. "If lawmakers cave to this pressure and start picking certain preferences to keep, it could jeopardize the entire effort," it says.NAR is opposed to doubling the standard deduction because the group says it would reduce the value of the mortgage deduction, curbing the incentive to purchase a home and leading to a "de facto tax increase on homeowners." White House advisers have said their tax framework would simplify the tax code and eliminate deductions and special breaks for the wealthy and well-connected. The plan, released Sept. 27, proposes the elimination of state and local tax deductions and personal dependent exemptions, cuts also opposed by the real estate association. The plan calls for keeping deductions for mortgage interest and charitable contributions.

 Trump to Tout $4,000 Worker Benefit in Tax Sales Pitch  - President Donald Trump will try to make the case that corporate tax breaks would benefit middle-class wage earners Wednesday evening -- and an excerpt of his speech suggests he’ll use a measure of salesmanship. Trump is expected to say the typical American household would get “a $4,000 pay raise” from facets of the planned legislation that would cut the corporate tax rate and end the current U.S. practice of taxing corporations’ foreign earnings, according to part of the speech released by the White House.Economists disagree on just how much individuals benefit from corporate tax breaks, but even Trump’s own economic advisers have said that the $4,000 benefit he plans to highlight would only materialize over eight years. On an annual basis, it’s closer to $500.Trump has often repeatedly pitched the tax plan that he and congressional leaders released last month as a boon for middle-class families. But until now, he hasn’t offered many specific numbers to back that claim -- and the plan itself contains too few details to determine its precise effects across individual income levels. In citing the $4,000 figure, the White House chose the low end of a range of estimates provided by Trump’s Council of Economic Advisers, a senior White House official said. On Wednesday, during a speech in Harrisburg, Pennsylvania, Trump is expected to tell a crowd of truckers how they’d be “major beneficiaries” of the plan, according to another senior administration official who spoke on condition of anonymity. The outreach is aimed at having appeal beyond Pennsylvania -- “truck driver” is the most common job in 29 states, including Pennsylvania, according to Census data. The president may try to reinforce his message during an interview with Fox News Channel host Sean Hannity that’s also part of his Harrisburg schedule.  Trump’s remarks are part of an effort to counter independent policy groups’ studies that say the Republican tax blueprint would benefit the highest earners -- and that it might mean higher taxes for at least some middle-income taxpayers. One study, which used details from previous Republican plans, found that about 30 percent of Americans making from $50,000 to $150,000 per year would ultimately pay more.

Trump Administration Picks Bizarre Fight With IMF Over Report Backing Taxing the Rich -  Yves Smith - The Trump Administration just did the IMF a favor by calling attention to a new report that supported the idea of taxing the wealthy more heavily. And in picking this fight, the Administration also tacitly admitted that its very sketchy tax “reform” plan is going to favor the rich, despite repeated denials.  Even though the IMF report some attention in the financial and business press, it’s not the sort of thing that has much impact in the halls of Congress. Admittedly, the report also took a fiscally orthodox line, urging that US tax “reform” not lead to bigger deficits. But the fiercely hawkish CBO is likely to give the Administration plenty of grief if its tax cuts aren’t matched by spending cuts or tax increases elsewhere, and the CBO has vastly more sway in Washington than the IMF on budget sausage-making. So getting upset about the IMF report elevated it when it would have been wiser for the Administration to have shrugged it off.  And the Administration was upset. Look at the whining: Mick Mulvaney, head of the Office of Management and Budget, told the Financial Times that sceptics of the plan were “heavily invested in it not working out”.  While the Trump Administration’s hostility made for some good headlines, the new IMF paper is significant even though its endorsement of using government policy to reduce inequality is measured. We’ve embedded the section on inequality at the end of the post. Bear in mind that this document is part of the, The Fiscal Monitor, which the IMF publishes periodically. It has more political importance than its typical research pieces and hews more carefully to official positions. By contrast, the research side of the IMF has been putting out articles for years that often buck economic orthodoxy. If you’ve been paying attention to economic research, it has become more and more widely accepted that high levels of inequality lead to lower levels of growth. Some economists argue that the impact on demand is a big culprit (rich people don’t spend as much as lower income people); others contend that it lowers productivity (cheap workers reduce the incentive to invest in labor-saving equipment and methods). And there are plenty of other theories.

Trump "Angry" After Learning What State And Local Tax Repeal Really Means --In what may be the final nail in President Trump's tax reform proposal, months after the White House proposed ending a tax break for people in high-tax states - which would suggest Trump had more than enough time familiarize himself with how it all works - Trump reportedly "grew angry" when he learned that the change would hurt some middle-income taxpayers, Bloomberg reports citing people familiar with his thinking.As Bloomberg amusingly adds, "It’s not clear why the president didn’t know the implications of the SALT deduction for middle-class taxpayers when the plan was released."Trump's confusion appears to have led to even more confusion everywhere else: according to Bloomberg, Trump’s concerns led him to say this week that “we’ll be adjusting” the tax-overhaul framework, but it’s not clear how he and congressional leaders would make up for the $1+ trillion in revenue that would be lost without ballooning the deficit or torpedoing support for the plan among hard-line conservative Republicans. Meanwhile, Trump’s top economic adviser Gary Cohn said Thursday morning that the president "is not rethinking his position on repealing the state and local tax deduction" contradicting what Trump himself said previously.In any case, while the plan to eliminate State and Local tax deductions may have been prompted by an initial assumption that such a move would mostly hit blue states as shown below...

Ryan Threatens to Keep Members in for Christmas to Finish Tax Overhaul - Nothing seems to push lawmakers to get their jobs done and pass legislation more than the threat of having to be in Washington over the holidays. Knowing this, House Speaker Paul D. Ryan made it clear Thursday that Congress staying in session over Christmas is an option if they have not advanced a tax overhaul bill by then. “We’re going to keep people here for Christmas if we have to,” the Wisconsin Republican said at a Heritage Foundation event in Washington. “I don’t care. We have to get this done.”However, that won’t be necessary if all goes according to plan.  The goal is for the Senate to pass a budget resolution next week and go to conference with the House to quickly resolve the differences between their budgets. Once both chambers have adopted a reconciled budget with a common reconciliation instructions for the tax overhaul, the House Ways and Means Committee will release the tax legislation and go to markup. The House will then take up the measure on the floor with the goal of getting it passed and over to the Senate in November, Ryan said. “We are actually on track timeline-wise,” he said.  If the House does get a bill to the Senate in November, the timing would then be out of Ryan’s control until the other side acts. But the Christmas threat is not an empty one as the two chambers are expected to pass different bills and a conference committee will likely be needed to close the gaps.

Trump reaches out to Democrats in bid for ‘great’ health law (AP) — Trying to revive health care talks, President Donald Trump said Saturday that he had spoken to the Senate's Democratic leader to gauge whether the minority party was interested in helping pass "great" health legislation.  The answer back: Democrats are willing to hear his ideas, but scrapping the Obama health law is a nonstarter.Trump's latest overture to Democrats followed GOP failures so far to fulfill the party's yearslong promise to repeal and replace the Affordable Care Act. In spite of controlling the White House and Congress since January, Republicans have not passed the legislation. The president tweeted that he called New York Sen. Chuck Schumer on Friday to discuss the 2010 law known as "Obamacare," which Trump said "is badly broken, big premiums. Who knows!" Trump said he wanted "to see if the Dems want to do a great HealthCare Bill." In remarks Saturday evening on the South Lawn before a trip to North Carolina, Trump said he was willing to consider "a temporary deal." What that might involve was not clear, but Trump referred to a popular GOP proposal that would have the federal government turn over money for health care directly to states in the form of block grants.Schumer said through a spokesman Saturday that Trump "wanted to make another run at repeal and replace and I told the president that's off the table." Schumer said if Trump "wants to work together to improve the existing health care system, we Democrats are open to his suggestions."Trump has suggested before that he would be open to negotiating with Democrats on health care, but there have been no clear signs of a compromise between Republicans who have sought to scrap President Barack Obama's law and Democrats who want to protect it.Schumer said a starting point could be negotiations led by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., who have been discussing a limited bipartisan deal to stabilize state-level markets for individual health insurance policies. People covered under the health law represent about half of those who purchase individual policies.

Trump To Sign Executive Order Rolling Back Obamacare Regulations -- It appears another 'chat with Chuck' may result in a deal 'win' for President Trump.  I called Chuck Schumer yesterday to see if the Dems want to do a great HealthCare Bill. ObamaCare is badly broken, big premiums. Who knows!— Donald J. Trump (@realDonaldTrump) October 7, 2017 In a brief comment to reporters at The White House, Trump said this afternoon that he would be open to a one- or two-year deal as a way to reform the nation's healthcare system..."So if we could do a one-year deal or two-year deal as a temporary measure, you’ll have block granting ultimately to the states, which is what Republicans want."With Republican efforts to repeal, replace, or re-anything Obamacare falling short numerous times, Trump is looking for a 'win' and it appears he may get one. The Hill reports that Trump will sign an executive order next week aimed at rolling back health insurance regulations put in place by former President Obama in an effort to undo his predecessor's signature health care law, according to The Wall Street Journal. The order will direct the Departments of Health and Human Services (HHS), Labor, and Treasury to make it easier for individuals to group together and purchase insurance through "association health plans," according to the report. The president also directs the agencies in the order to roll back the Obama administration regulations of “short-term medical insurance,” which is a cheap limited protection option that the former administration claimed was did not provide adequate coverage for individuals.The regulation requiring insurance plans to cover a set of package benefits will also be rolled back, according to The Journal.The order is seen as an effort from the president to roll back parts of ObamaCare after his administration and Republicans failed to fulfill their seven-year campaign promise to repeal and replace the law. While the move has been anticipated by industry officials and political observers in the days since the GOP repeal effort crashed, the move is most likely to unsettle Republicans, who have already watched Trump partner with congressional Democrats on a debt ceiling deal.

Trump Administration Doubles Down on Efforts to Crapify the Entire Health Care System (Unless You’re Rich, of Course) -  Lambert Strether - After the failure of Cassidy-Graham, the Republican Party’s fourth (!) attempt to repeal and replace ObamaCare, the Republicans appear to be doubling down and assaulting the entire heatlh care system, including not only ObamaCare, but Medicaid, and in fact all private health insurance, for which you’ve got to give them credit. I mean, at least they’re not weak[1]. I don’t pretend to be an expert on the internal dynamics of the Republican Party, but the Republicans did promise to repeal and replace ObamaCare, and if you as a voter bought into that, it’s entirely reasonable to experience righteous fury and demand they deliver. (I’ll make a brief comment on ideology at the end.) This emerging Republican strategy of crapification has three parts (first outlined in a tweetstorm by Andy Slavitt starting here):

  1. Administratively, send ObamaCare into a death spiral by sabotaging it
  2. Legislatively, gut Medicaid as part of the “tax refom” package in Congress
  3. Through executive order, eliminate “essential health benefits” through “association health plans”

As a sidebar, it’s interesting to see that although this do-list is strategically and ideologically coherent — basically, your ability to access health care will be directly dependent on your ability to pay — it’s institutionally incoherent, a bizarre contraption screwed together out of legislation, regulations, and an Executive order. Of course, this incoherence mirrors to Rube Goldberg structure of ObamaCare itself, itself a bizarre contraption, especially when compared to the simple, rugged, and proven single payer system. (Everything Obama did with regulations and executive orders, Trump can undo, with new regulations and new executive orders. We might compare ObamaCare to a child born with no immune system, that could only have survived within the liberal bubble within which it was created; in the real world, it’s not surprising that it’s succumbing to opportunistic infections.[2]) Let’s look at each of the three parts of this Republican strategy in turn.

Trump Signs Executive Order To Begin Unwinding Obamacare --Having failed to repeal (or replace) Obamacare in the Congress on three separate occasions, on Thursday morning Trump took matters into his own hands, when as previewed last night, the President signed an executive order to begin the process of unwinding Obamacare, paving the way for sweeping changes to health-insurance regulations that would allow an expansion of less-comprehensive health plans.  “We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”  He then said that the order is "starting that process" to repeal ObamaCare. It will be the "first steps to providing millions of Americans with ObamaCare relief." The order will direct federal agencies to take actions aimed at providing lower-cost options and fostering competition in the individual insurance markets, according to the Wall Street Journal. The specific steps included in the order will represent only the first moves in his White House’s effort to strike parts of the law, the officials said adding that the order is just the beginning of the administration’s actions related to the health law. Furthermore, it will be months, rather than weeks, for even the most simple changes in the executive order to take effect, and the order leaves key details to the Labor Department, in particular, to determine after a formal rule-making process, including the solicitation of public comment.

 Trump healthcare order could face strong legal objections (Reuters) - U.S. President Donald Trump’s expected plan to let Americans buy insurance across state lines could violate federal law governing employee benefit plans and will almost certainly be challenged in court, several legal experts said. Trump said on Tuesday he would likely sign an executive order this week allowing people to cross state lines to obtain “great, competitive healthcare” that would cost the United States “nothing.” The Republican president offered no specifics, but several sources familiar with the order said it was expected to be in the form of guidance to the U.S. Health and Human Services, Labor and Treasury Departments, which would be asked to look at ways that individuals and small businesses can band together to form “associations” that would buy large group health plans from states with the fewest regulations. If the plan were to come to fruition, some healthcare analysts said it would undermine former President Barack Obama’s signature Affordable Care Act, popularly known as Obamacare, by making it easier for Americans to buy stripped-down health insurance policies on the cheap. Supporters say more people could gain health insurance at a lower cost. Despite controlling the White House and Congress, Republicans have failed in efforts this year to fulfill their campaign promise to repeal and replace Obamacare, which they say is intrusive and ineffective. Democrats defend the law, saying it has extended health insurance to some 20 million Americans. Several experts in healthcare and employment law said Trump’s plan could violate the U.S. Employee Retirement Income Security Act (ERISA), a federal law that governs large group plans that must be provided or maintained by employers or employee organizations.

With Signature, Trump Tries to Chip Away at Obamacare: President Donald Trump continued chipping away at his predecessor’s legacy when he signed an executive order Thursday that spells major changes for President Barack Obama’s 2010 health care law. But the order merely directs agencies to craft new rules that one senior official would only say could “possibly” help millions of Americans despite Trump’s bold promises. Trump called the order a “historic announcement” and promised it would come at zero cost to federal coffers. During a signing ceremony at the White House, he also promised it would bring more affordable coverage to “millions,” and said plans would be available “all across state lines” with competition among providers that he promised will be “staggering.” “Once and for all, we will have great health care in our country,” he said of the order and his expectation that Republican lawmakers will eventually pass a bill repealing and replacing the 2010 law. The order, however, does not contain language that would make those things happen quickly — or even at all. It directs three federal agencies to craft rules aimed at making more individuals eligible for insurance plans that White House and administration officials hope will lower costs for “tens of millions” of Americans, Andrew Bremberg, director of the president’s Domestic Policy Council, told reporters Thursday.

Trump Executive Order Expands Opportunities For Healthier People To Exit ACA -- On October 12, 2017, President Donald Trump issued an executive order concerning health care coverage. The White House also posted two summaries of the order. If carried into action, the provisions of the executive order would likely siphon healthy people from of the Affordable Care Act-compliant market, continuing a pattern of regulatory actions under the Trump administration that have undermined the ACA.The executive order has several main components. First, it calls generally for expanding competition and choice in health care markets and for improving the information available to consumers while reducing reporting burdens (that would presumably be needed to make that information available). Second, it directs the Department of Health and Human Services, in cooperation with the Secretaries of Treasury and Labor and the Federal Trade Commission, to report to the President within 180 days and every 2 years thereafter on steps that could be taken to accomplish these goals.The primary operative parts of the executive order, however, are provisions that direct the Departments of Treasury, Labor, and Health and Human Services to consider making changes in current regulations and guidance governing health care coverage in three specific areas. First, the executive order directs the Department of Labor to consider within 60 days new rules and guidance “to expand access to health coverage by allowing more employers to form AHPs [association health plans].” Second, the order directs the three departments to consider within 60 days regulations to expand the maximum length of short-term, limited-duration coverage and to make it renewable by the consumer.  Third, it directs the Departments of Treasury, Labor, and Health and Human Services to within 120 days consider revising rule and guidance “to increase the usability of HRAs, to expand employers’ ability to offer HRAs to their employees, and to allow HRAs to be used in conjunction with nongroup coverage.”

Trump To Scrap Crucial Obamacare Insurer Subsidy -- Just hours after signing an executive order that implicitly begins unwinding ObamaCare, Politco reports, citing two people familiar with the matter, that President Trump plans to cut off critical subsidy payments to insurers selling Obamacare coverage. Earlier today, Trump signed an executive order expanding access to more loosely regulated insurance options with low premiums, a move that could undermine the ACA insurance markets.“We’ve been hearing about the disaster of Obamacare for so long,” Trump said in signing the order at a White House ceremony. “For a long time, I’ve been hearing repeal, replace, repeal, replace.”He then said that the order is "starting that process" to repeal ObamaCare.It will be the "first steps to providing millions of Americans with ObamaCare relief."And now, as Politico reports, the process appears to accelerating as Trump's decision to end the payments, estimated at $7 billion this year, marks the president's most aggressive move yet to dismantle Obamacare after months of failed GOP repeal efforts on Capitol Hill.As Reuters notes, Trump has repeatedly threatened to stop the payments, which are made directly to insurance companies to help cover out-of-pocket medical expenses for low-income Americans enrolled in individual healthcare plans under Obamacare.The move is likely to draw lawsuits and may put pressure on Congress to appropriate funding for the subsidies. This latest move is likely to throw healthcare markets into chaos, and will infuriate Democrats - effectively closing the 'Chuck and Nancy' channel of communications - leaving a deal to avert government shutdown on or after Dec 8th (when the current extension deal runs out) increasingly doubtful.

Trump scraps Obamacare subsidies in surprise late-night announcement - Donald Trump has planted a timebomb under Obamacare, issuing a notice late on Thursday night that scraps vital federal subsidies underpinning the current healthcare system. The late-night move caught critics off guard and brought immediate accusations that Trump was unilaterally destroying his predecessor’s signature legislation, the Affordable Care Act, after the Republican-controlled Congress failed to secure changes. The announcement stops federal support of up to $7bn (£5.27bn) to insurance companies to help them cover the medical needs of low-income Americans. The Trump administration sought to lay the blame for the current crisis in healthcare on former president Barack Obama, claiming the federal subsidies, known as “cost-sharing reduction payments”, were unlawful and “yet another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system”. On Friday morning Trump claimed in a tweet that “the Democrats [sic] ObamaCare is imploding” and appeared to call on the Democrats to negotiate with him over healthcare legislation. “Massive subsidy payments to their pet insurance companies has stopped,” he wrote. “Dems should call me to fix! ... ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!”Reaction from Democratic politicians and other Trump opponents was swift. Top officials on both coasts leapt to denounce the White House move and threaten legal action to stop the subsidies being revoked.In California, the state attorney general Xavier Becerra said he was prepared to sue the Trump administration to protect the subsidies. Eric Schneiderman, the attorney general of New York state, followed suit, declaring he would “not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost”. The attack on the federal subsidies came as a double blow to Obamacare, just hours after Trump had already lashed out at his predecessor’s healthcare reforms by issuing an executive order unilaterally weakening the system. In that order, the president opened the door to cheaper and less comprehensive insurance, which experts predict will result in health plans for the sick becoming more expensive. Thursday night’s second blow could prove the more deadly of the two as it is targeted at the very foundations of the insurance structures created under Obamacare. A study by the Congressional Budget Office two months ago suggested that terminating the cost-sharing subsidies would lead to a dramatic 20% rise in the average cost of the most popular plans offered by the Affordable Care Act, as well as worsening the federal deficit by almost $200m.

Trump Ends CSR Payments Immediately -- According to Modern Healthcare: “In a brash move likely to roil insurance markets, President Donald Trump will ‘immediately’ halt payments to insurers under the Affordable Care Act.  Before sunrise Friday morning, Trump went on Twitter to urge Democrats to make a deal: ‘The Democrats ObamaCare is imploding,” he wrote. “Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!’  The Department of Health and Human Services had made the announcement in a statement late Thursday. ‘We will discontinue these payments immediately’ said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Sign-up season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered.” This will be devastating to those with incomes less than 250% of the Federal Poverty Limit. It is a direct attack on US citizens by a president who can not get his way politically and is meant to punish citizens and politicians alike for not following his dictates.    Trump asserted: “Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves.” The only thing broken today is the Presidency as it is occupied by a madman. At this time, I have no polite words I can print on AB.

Trump’s salvo on Obamacare unlikely to result in quick changes - POLITICO: President Donald Trump may be eager to dismantle the Affordable Care Act after months of failed GOP repeal efforts, but his promise to provide millions of Americans "with Obamacare relief" with the executive order he signed Thursday is sure to collide with the slow grind of the federal bureaucracy. Trump’s order directs a trio of federal agencies to rewrite regulations to encourage the rise of a raft of cheap, loosely regulated health insurance plans that don't have to comply with certain Obamacare consumer protections and benefit rules. They're expected to attract younger and healthier people — leaving older and sicker ones in the Obamacare markets facing higher and higher costs. "I just keep hearing repeal, replace, repeal, replace," the president said as he announced what he vowed would be the first of a series of initiatives to put his own free-market stamp on the health care system. "Well, we're starting that process." But despite the high-flown rhetoric, nothing will change immediately. “This is only an executive order,” said Tim Jost, professor emeritus at the Washington and Lee University School of Law. “It is not a change in the law or even in regulations. It is a direction to draft rules.” As a result, there's likely to be little effect on the Obamacare markets set to open their fifth enrollment period in several weeks — and that Trump has repeatedly trashed for sticking Americans with skyrocketing premiums and dwindling competitions. “There’s not an immediate change,” said Anne Phelps, U.S. health care regulatory leader at Deloitte. “This is going to need to go through the regulatory process. There’s some time here.” 

California-Led Group Asks Court to Keep Obamacare Subsidies - With the health insurance of millions at stake, California Attorney General Xavier Becerra and New York Attorney General Eric Schneiderman, leading 18 states and the District of Columbia, asked a U.S. court for an order compelling the Trump administration to continue making Obamacare subsidy payments while their states and others fight to save them. The filing by the attorneys general in San Francisco comes just a day after the White House announced it was ending those Affordable Care Act payments immediately. The next monthly installment is due Oct. 18, leaving a federal judge there only days to act on the request if the payments are to continue uninterrupted. The loss of funds and financial uncertainty caused by Trump’s decision “will lead to higher health insurance costs for consumers and to insurers abandoning the individual health insurance market,” the states say in the complaint. “The number of uninsured Americans will increase once again, hurting vulnerable individuals and directly burdening the states.” The case is one the highest-profile legal showdowns of Donald Trump’s presidency. After Congress failed to deliver a replacement for Obamacare, the president on Friday tweeted that his decision to end subsidies should force Democrats to “call me to fix” health care. Millions who bought insurance through the Affordable Care Act marketplaces may be unable to afford coverage if his move drives up premiums further, and insurers may seek to pull out of the market. The White House called the payments a “bailout of insurance companies” and “another example of how the previous administration abused taxpayer dollars and skirted the law to prop up a broken system.” “As the only federal court to address this question found, Obamacare usurped Congress’s spending power under the Constitution,” Justice Department spokesman Devin O’Malley said in a statement. “The Department of Justice looks forward to defending the president’s authority to return that power back to Congress." 

The Insufficiency Of Medicaid Block Grants: The Example Of Puerto Rico - Medicaid block grants have been a centerpiece of Republican health proposals for more than a decade. But one need look no further than the growing health crisis in Puerto Rico to understand why capped federal money and state flexibility will not solve serious health care issues. Unlike states, Puerto Rico’s federal Medicaid funding is provided through a lump sum of federal funds: a block grant. Over the years, this approach has proven insufficient to address the island’s significant health needs. Even before Hurricanes Maria and Irma, Puerto Rico faced significantly higher rates of chronic diseases such as coronary heart disease and asthma, as well as higher rates of premature births and infant mortality, compared to rates in the mainland United States. The supply of available providers, particularly for specialist services, is below average. Access to treatment that meets the standards of care generally lags national averages. And to get care, Puerto Rico residents must wait significantly longer and travel further than their peers in the mainland United States. The average emergency department wait time, for example, is 13 hours, far above the US national average of 4.5 hours. Moreover, access to care was likely to become more difficult even before the hurricanes hit. Doctors have been leaving Puerto Rico for the US mainland: In 2015 alone, approximately 500 physicians left. We speak from experience. In 2016, we worked at the Department of Health and Human Services (HHS), where we tried to help the Commonwealth address the urgent threat caused by the Zika virus. Throughout the year, we and other local and federal officials nervously tracked the spread of the disease. But as Zika spread to more mothers, and babies continued to be born with microcephaly, Puerto Rico’s fiscal crisis grew and the territory came dangerously close to hitting its cap on federal Medicaid funding and cutting people off of coverage. We wanted to help, but the block grant left us with few options. We considered many different possibilities to little avail. Adding funding to the block grant was a legal non-starter—it required an act of Congress. “State flexibility” was not the panacea that block grant advocates describe it as.  The considerable flexibility under a block grant was of little help in addressing Zika nor is it likely to help the Commonwealth address its current recovery needs.

After Missing Deadline For Children’s Insurance, Congress Now Mired In Funding Disputes - Lawmakers in both the Senate and House have bills to renew the Children's Health Insurance Program, but Democrats and Republicans have very different ideas about how to fund that.  The Senate Finance and House Energy and Commerce committees both approved their versions of bills to renew funding for the Children’s Health Insurance Program Wednesday, but questions remain about what offsets, if any, will make it into law. The House markup Wednesday night was contentious, with all the Democrats there voting against the bill due to issues with offsets. The House GOP bill would pay for the funding by making changes to Medicaid third-party liability, lottery winning calculations and Medicare premium adjustments for higher-income persons. Democrats offered an amendment, which was rejected 22-28, that included their alternatives for funding the CHIP bill (HR 3921). (Raman, 10/5)  With the U.S. Senate distracted last month by another Hail Mary attempt by Republicans to repeal and replace the Affordable Care Act, Congress didn’t get around to reauthorizing CHIP by the Sept. 30 deadline. And that has left states contemplating how to keep the program running when the federal funding runs out — if they can keep it going at all. “The clock is ticking,” Joan Alker, executive director of the Center for Children and Families at Georgetown University, said. “The longer this goes on, the bigger troubles states are in and more consequences we will see.”

White House Reveals What It Wants In Exchange For Keeping "Dreamers" -- On Sunday night, the White House revealed that it is seeking more funds from Congress to fund Trump's wall along the U.S.-Mexico border, more resources to hire thousands more immigration officers, cutting the number of new legal immigrants and generally demanding a steep price for legislation under consideration to help so-called Dreamers. According to the WSJ, "the White House documents, sent to congressional leaders in both parties on Sunday, amount to a lengthy wish list of longstanding conservative immigration goals." While White House officials told reporters that they want these to be included in any immigration deal, they stopped short of saying the White House will insist on them. As The Hill adds, Trump's new "immigration principles and policies" call for a crackdown on border security, more resources to catch individuals residing in the country illegally, as well as a merit-based system that limits chain migration to spouses and children. Claiming that in order to properly protect the nation's borders, the White House said Congress must also approve of the construction of a border wall to deter human trafficking, drug trafficking and other cartels. "Success of border walls are undeniable from the perspective of their operators," U.S. Customs and Border Protection Acting Deputy Commissioner Ronald Vitiello said Sunday. The plan also takes a hardline stance against unaccompanied minors who enter the country. Trump also went after sanctuary cities, calling on Congress to cut funding from certain grants and agreements to punish the "states and localities that refuse to cooperate with Federal authorities."   Additionally, the administration is advocating for a "refugee ceiling" that caps how many are let into the country to an unspecified "appropriate level."

Trump links border wall, green-card overhaul to DACA (AP) — President Donald Trump told congressional leaders on Sunday that his hard-line immigration priorities must be enacted in exchange for extending protection from deportation to hundreds of thousands of young immigrants, many of whom were brought to the U.S. illegally as children.Trump's list of demands included overhauling the country's green-card system, a crackdown on unaccompanied minors entering the country, and building his promised wall along the southern border.Many were policies Democrats have said explicitly are off the table and threaten to derail ongoing negotiations over legislation protecting young immigrants known as "Dreamers." They had been given a reprieve from deportation and the ability to work legally in the country under President Barack Obama's Deferred Action for Childhood Arrivals, or DACA, program, which Trump ended last month.In a letter to House and Senate leaders released by the White House, Trump said the priorities were the product of a "a bottom-up review of all immigration policies" that he had ordered "to determine what legislative reforms are essential for America's economic and national security."These findings outline reforms that must be included as part of any legislation addressing the status of Deferred Action for Childhood Arrivals (DACA) recipients," he wrote, adding that: "Without these reforms, illegal immigration and chain migration, which severely and unfairly burden American workers and taxpayers, will continue without end."

Harris calls for Congress to pass ‘clean’ DACA bill | TheHill: Sen. Kamala Harris(D-Calif.) on Thursday called on Congress to pass a "clean" bill on Deferred Action for Childhood Arrivals (DACA) as Democrats slam the Trump administration's recently announced immigration principals. “This is about a fight for the future of this country, believing in the values upon which this country was founded,” Harris said at the University of California-Irvine, according to The Orange County Register. “The path right now is rocky. It is difficult. It is hard." “We are witnessing things that we can only describe as awful and wrong, and mean-spirited. But that’s OK … Because we know this is about doing the right thing. We know this is about all the young people, who were brought here, some before they could walk or talk," she said. Harris' comments come after the Trump administration announced a list of hard-line security measures aimed at closing off the nation’s borders and cracking down on undocumented immigrants. The list of principals included construction for President Trump's proposed border wall and whether Republicans and Democrats can bridge their differences and reach a compromise on protecting so-called Dreamers. Trump announced last month he would move to end DACA with a six-month delay to allow Congress a window to broker a legislative solution. Senate Minority Leader Charles (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) met with Trump last month at the White House, where the three forged a tentative deal to couple legal protections for young, undocumented immigrants with tougher security measures — excluding Trump’s promised border wall. But Democrats blasted the administration's immigration principles released this week, with Pelosi calling them garbage. 

Fed’s Dudley Sent Puerto Rico a Cash-Filled Jet as Money Ran Low -  Less than a week into the massive blackout that followed Hurricane Maria and essentially turned Puerto Rico into a cash-only economy, one top local banker became so concerned about the supply of bills that he called the Federal Reserve. William Dudley, the New York Fed president, put the word out within minutes, and ultimately a jet loaded with an undisclosed amount of cash landed on the stricken island, according to Richard Carrion, the Popular Inc. executive chairman who made the call. He and Chief Executive Officer Ignacio Alvarez reflected on the chaotic early days of the crisis in an interview Friday at their office in San Juan’s Hato Rey financial district.  “We thought the cash was going to be a problem,” said Carrion, 64, whose bank is the biggest in Puerto Rico by deposits. “The magnitude of this is something we haven’t experienced.” Suzanne Elio, a New York Fed spokeswoman, declined to comment on the money shipment. The executives described corporate clients’ urgent requests for hundreds of thousands in cash to meet payrolls, and the challenge of finding enough armored cars to satisfy endless demand at ATMs. Such were the days after Maria devastated the U.S. territory last month, killing 39 people, crushing buildings and wiping out the island’s energy grid. As early as the day after the storm, the Fed began working to get money onto the island, according to a person with knowledge of the matter, who asked not to be named discussing the Fed’s preparations.

Wall Street Firms Gambled on Puerto Rico. They’re Losing - A few days after Hurricane Maria leveled Puerto Rico, John A. Paulson, the billionaire hedge fund manager, boarded his company’s 23-seat Bombardier jet and flew to San Juan.  Mr. Paulson wanted to check personally on several resorts and a large office building that he and his firm own, two people familiar with the trip said. He traveled when commercial air traffic to the devastated island was limited and most private jets landing in San Juan were required to bring badly needed emergency supplies.  Mr. Paulson’s quick trip is an indication of just how much big investors have riding on the future of the Caribbean island. Mr. Paulson and his firm, Paulson & Company, have invested hundreds of millions of dollars there as he, along with many of the best-known names on Wall Street, bet big on taking advantage of a long period of depressed prices for luxury properties and other real estate. Their wagers are looking increasingly unlucky, especially after the storm. Moody’s Analytics, an economic forecasting firm, estimates that the hurricane could cost Puerto Rico up to $95 billion in damage and lost economic output.  Mr. Paulson, who served as an economic adviser to Donald J. Trump during the presidential campaign, has been particularly outspoken in his support of the island as an investment opportunity. Other companies that went to Puerto Rico in search of bargains included the Blackstone Group, the Och-Ziff Capital Management Group, the D. E. Shaw Group, Fundamental Advisors, Goldman Sachs, Lone Star Funds and Monarch Alternative Capital. The main attractions have been hotels, condominiums, office buildings and distressed real estate loans.

The Case For Wiping Out Puerto Rico's Debt  -- President Trump, who knows a thing or two about bankruptcy, says Puerto Rico’s public debt should be wiped out. We agree. The commonwealth owes bondholders somewhere on the order of $70 billion, with most of that debt tied to general-obligation bonds, revenue bonds and bonds issued by the Puerto Rico Electric Power Authority (PREPA).Ahead of the wide devastation wrought by Hurricanes Irma and Maria, we were of the viewthat the commonwealth could manage perhaps 20 to 30 percent of its general-obligation and revenue-bond debt and that PREPA could pay off perhaps 30 percent of its debt.Now, as the island and its economy reel from the carnage of the hurricanes, we see the only viable way forward as a zeroing-out of the bonds in question and an immediate cessation of interest payments. Puerto Rico’s badly-crippled economy must rebuild, and the only way for that to happen is for legacy governmental debt to be handled in a way that won’t impair the restoration of markets and physical development. This is a necessary remedy that will affect three sets of bondholders. First, the large investment houses like Franklin Templeton, Oppenheimer, Citi and JP Morgan, which own large chunks of bonds. These investment houses, however, have vast and diverse holdings in the trillions of dollars that are hedged against just about every eventuality.Second, a host of hedge funds that bought into the Puerto Rico bond market at a discount. These hedge funds have made extraordinary gains on this debt by way of interest-rate payments on the face value of the discounted bonds.Third, small investors who live in Puerto Rico and elsewhere who stand to suffer the most. These investors have no hedges against these losses, and (unlike hedge funds) have not reaped extraordinary gains on Puerto Rican debt. The way out of this is not pretty but there is ample precedent.

Puerto Rico, Transfer Pricing, and Kevin Hassett - Scott Greenberg provided a nice summary of what section 936 was and how its expiration had contributed to Puerto Rico’s economic and fiscal difficulties: beginning in 1976, section 936 of the tax code granted U.S. corporations a tax exemption from income originating from U.S. territories. In addition to section 936, the Puerto Rican corporate tax code gave significant incentives for U.S. corporations to locate subsidiaries on the island. Puerto Rican tax law allowed a subsidiary more the 80% owned by a foreign entity to deduct 100% of the dividends paid to its parent. As such, subsidiaries in Puerto Rico had no corporate income tax liability as long as their profits are distributed as dividends.. Because of these generous tax incentives for business, Puerto Rico grew rapidly throughout the 20th century and developed a substantial manufacturing sector, though it remained relatively poor compared to the U.S. mainland. However, because section 936 made foreign investment in Puerto Rico artificially attractive – creating, in effect, an economic bubble – it left the island vulnerable to a crash if the tax provisions were ever to be repealed.  When section 936 was repealed in 2006, foreign investment began to flee. Without a strong domestic corporate presence to fill the void, the economy began to contract, along with tax revenues. Brad Setser has been examining certain trade data finding something that might seem surprising: The largest supplier of imports to Puerto Rico? Ireland. The second largest? Singapore. Tax trumps gravity, it seems. Incidentally, Switzerland jumped into third place in the 2016 league table, leaping past other exporters of chemicals and Puerto Rico’s suppliers of fuel oil, diesel, and the like. It isn’t exactly hard to figure out what is going on here. Puerto Rico’s imports tend to be specialty organic chemicals and pharmaceutical products, and, well, they tend to be supplied from countries that are known to specialize in helping multinationals optimize their global tax bill. And, setting aside trade with the fifty states for the moment, where are Puerto Rico’s biggest export markets? Belgium and the Netherlands. The big ports and distribution centers in northwest Europe. Europe is almost certainly buying packaged pharmaceuticals—Puerto Rico’s biggest export to the world translates from trade jargon to “medicine, in measured doses, packaged for retail.”

Ryan leading bipartisan delegation to Puerto Rico - Speaker Paul Ryan (R-Wis.) will lead a bipartisan delegation to Puerto Rico on Friday to view the damage from Hurricane Maria, his office said. Ryan’s visit is expected to follow a vote in the House this week to approve at least $29 billion in aid for communities affected by recent hurricanes and wildfires. Puerto Rico had been hit by Hurricane Irma last month before Hurricane Maria subsequently ravaged the U.S. territory. Most of the island remains without power, and many residents lack adequate food or water supplies. Ryan will travel to Puerto Rico with House Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.) and the panel’s top Democrat, Rep. Nita Lowey (N.Y.). Puerto Rico’s nonvoting representative in Congress, Jenniffer González-Colón (R), and House GOP Conference Chairwoman Cathy McMorris (Wash.) are also expected to attend. Ryan is expected to hold a news conference while in Puerto Rico and meet with local officials and emergency personnel. The Trump administration requested $29 billion for disaster relief last week, which includes $12.8 billion for the Federal Emergency Management Agency’s disaster relief fund, $16 billion for debt relief for the federal flood insurance program and $576.5 for wildfire recovery. The House is expected to vote on legislation this week that meets that request. Puerto Rico Gov. Ricardo Rosselló is also asking Congress for an additional $4.6 billion in federal grant and loan programs. 

Puerto Rico stands ‘on the brink of a massive liquidity crisis that will intensify’ -  Puerto Rico Gov. Ricardo Rosselló appears to have changed his tune on the magnitude of the emergency facing the island, sending a desperate letter to Congress outlining the dire straits still plaguing the 3.4 million Americans who are considering whether they can rebuild a future in the devastated territory. The call for help from Rosselló is certainly justified. But it comes three weeks after Hurricane Maria and on the heels of a clownish, gaffe-filled visit from President Donald Trump in which the governor had only good things to say about the federal response. That was in sharp contrast to San Juan Mayor Carmen Yulin Cruz, who was outspoken about the inadequate federal disaster response and became the target of cyberbullying by the president, who called her "nasty" — a term he previously used to describe the first-ever US female presidential candidate Hillary Clinton during a televised debate. Rosselló, apparently trying to stay in Trump’s good graces even though he is a Democrat and the president has treated his territory with disdain, downplayed Trump’s statement on Twitter that Puerto Ricans "wanted everything done for them." Yet Rosselló's letter indicates Cruz’s account of conditions on the ground was much more accurate than the governor or the president’s rosy spin. 

White House requests $5B to ease Puerto Rico fiscal crisis (AP) — The White House on Tuesday asked Congress for $5 billion to ease a fiscal crisis striking the government of Puerto Rico in the wake of Hurricane Maria. Puerto Rico's central government and various municipalities and other local governments are suffering unsustainable cash shortfalls as Maria has choked off revenues and strained resources. The administration's request, so far delivered informally, would provide $4.9 billion for Puerto Rico and its local jurisdictions. The White House also requested $150 million to help Puerto Rico with the 10 percent match required for Federal Emergency Management Agency disaster relief. A senior administration official confirmed the request, requiring anonymity because it is not yet official. The official stressed that jurisdictions other than Puerto Rico are eligible, but acknowledged the cash-strapped territory is sure to receive the bulk of the money. On Saturday, Puerto Rico Gov. Ricardo Rossello sent a letter to lawmakers asking for $500 million for the community disaster loan program, which is designed to help local governments deal with tax revenue shortfalls caused by disasters. He requested almost $4 billion in other aid. "In addition to the immediate humanitarian crisis, Puerto Rico is on the brink of a massive liquidity crisis that will intensify in the immediate future," Rossello wrote. Hours after the request, the House Appropriations Committee unveiled a $36.5 billion emergency spending bill that merged Tuesday's request with a proposal that the White House sent to Capitol Hill last week to replenish disaster funds and ease a cash crunch in the federal flood insurance program. A Thursday vote is expected. 

Trump defends throwing 'beautiful, soft' paper towel rolls into crowd of hurricane victims in Puerto Rico: President Donald Trump in an interview broadcast on Saturday defended his decision to throw rolls of paper towels into a crowd filled with people affected by Hurricane Maria in Puerto Rico on Tuesday.  He told former Arkansas Gov. Mike Huckabee, on the new Trinity Broadcasting Network show "Huckabee," that the crowd was "having fun" and urging him to throw the paper towels. Trump added that the media had not covered the incident fairly.   "They had these beautiful, soft towels. Very good towels," Trump said. "And I came in and there was a crowd of a lot of people. And they were screaming and they were loving everything. I was having fun, they were having fun. They said, 'Throw 'em to me! Throw 'em to me Mr. President!'"  He continued: "The next day they said, 'Oh, it was so disrespectful to the people.' It was just a made-up thing."  Trump also defended his administration's response to Puerto Rico's crisis following Hurricane Maria, which many had criticized as slower and more disorganized than the effort to assist Texas after Hurricane Harvey and Florida after Hurricane Irma.

On-the-Ground Reports Destroy Trump’s Sunny Portrayal of Puerto Rico Recovery - According to numerous accounts of the recovery and a website set up by the Puerto Rican government, there is still a dire food and water shortage on the island. Only about ten percent of the island has electricity, and only a third of cell phone towers are in working order.  Yet in a White House's video posted on Twitter this week, Trump was shown shaking hands with hurricane survivors while triumphant music played and footage and on-screen text assured viewers that generator fuel is being delivered to hospitals, roads are quickly being cleared, and water is rapidly being brought to families in need. In both tweets and repeated public statements over recent days, Trump has shown he is far more concerned with garnering praise for his response to the disaster than with addressing the struggles Puerto Ricans continue to face. On Tuesday, National Nurses United shared some of what the group's 50 volunteer nurses have observed—noting that 21 days after Maria swept through the U.S. territory, many federal workers on the island are still assessing damage rather than handing out supplies. Bonnie Castillo, director of NNU's Registered Nurses Relief Network program, spoke out about the government's paltry efforts on the island. "What our nurses witness daily is the harsh reality of a woefully inadequate government response and the brutal, inhumane impact on the Puerto Rican people," said Castillo in a statement. "People are still without food and water. That poses an enormous humanitarian threat in terms of disease, life, and death and who succumbs first. No more disgraceful delays. The Trump administration, FEMA, and Congress must act immediately."

The Growing Puerto Rico Disaster -- The number of people without power on the Island is increasing, not decreasing, up 6% from yesterday, to 90%.  A third of the island doesn’t have running water. Half the people don’t have cell phone coverage.Aid has been slow and largely ineffective. There is reason to be worried about disease outbreaks, and medical care is severely handicapped.Meanwhile Puerto Rico has a massive debt overhang, and is crippled by it. Trump has suggested a 4.9 billion dollar bridging loan to help them over. The people who actually hold Puerto Rico’s debts, of course, have not been forgiving. They weren’t forgiving to Argentina, or to the Congo, they aren’t going to be forgiving to Puerto Rico. The disaster relief has been bungled. It shouldn’t primarily be a matter of money in any case, the island should be flooded by work crews from all over the US with the materials they need to do the repairs, and the necessary heavy equipment to clear blockages, while large airlift is used to get to areas that are more remote.This is a logistical exercise, the US has the capacity, and the US has chosen not to use the capacity, it is that simple. As for the debt, most of it should simply be forgiven. The US government has the ability to do that.

House passes $36.5 billion disaster relief package | TheHill: The House easily passed legislation on Thursday to provide $36.5 billion in aid for communities affected by recent hurricanes and wildfires, despite concerns from some conservatives about the growing cost of disaster aid. All of the votes in opposition were from Republicans in the 353-69 vote. The package includes $18.7 billion for the Federal Emergency Management Agency’s (FEMA) disaster relief fund — including $4.9 billion for a disaster relief loan account — $16 billion to address national flood insurance program debt and $576.5 million for wildfire recovery efforts. It also provided $1.27 billion for disaster food assistance for Puerto Rico. The bill advanced as wildfires that are expected to become the costliest in California history continue to rage in the state's wine country. More than 80 percent of Puerto Rico also remains without power in the aftermath of Hurricane Maria while major cities in Texas, Florida and other gulf states continue rebuilding efforts following Hurricanes Harvey and Irma. Congress is likely to approve billions of dollars in additional disaster aid in the months to come. Many of the Republicans who voted against the bill on Thursday were protesting the increasing fiscal effects of disaster relief legislation. Rep. Mark Walker (R-N.C.), the head of the Republican Study Committee, said that supplemental disaster relief should be offset with spending cuts. “It is only a matter of time before the U.S. faces the next catastrophe. But for some reason, the government does not budget with this in mind. Instead, Congress waits for a crisis to happen and then hurries to pass an aid package afterward,” he wrote in an op-ed in The Wall Street Journal. Rep. Mark Sanford (R-S.C.) said the debts would add up regardless of how good the cause of disaster relief was. 

House passes big disaster aid bill but there’s political trouble ahead -- The $36.5 billion relief package the House passed Thursday, 353-69, won’t be the last time Congress considers significant spending to address the natural disasters that ravaged parts of California, Florida, Puerto Rico, Texas and elsewhere.Thursday’s debate was also a preview of some serious political griping that lies ahead on both sides of the aisle, and the complaints have the potential to interfere with future efforts to get aid to areas in desperate need of assistance.Texas and Florida officials sought additional funds for rebuilding efforts in their states that were not specifically included in this round of funding. Conservatives on Capitol Hill issued new calls for spending cuts to help pay for the assistance as well as more transparency about how the money is spent. And Democrats had their own set of grievances, calling for more money faster.Thursday’s package, which the Senate could take up when it returns next week, includes money for Federal Emergency Management Agency’s nearly empty Disaster Relief Fund and for the financially-struggling National Flood Insurance Program. It also provided $576.5 million to fight wildfires in California and other western states.It did not include the $18.7 billion and $27 billion requests made by Texas and Florida lawmakers, respectively, for rebuilding efforts from hurricane damage. About $15 billion in the bill could go toward Texas, including $11 billion for flood insurance claims and about $4 billion for the FEMA disaster relief fund, according to the office of Rep. Kay Granger, R-Texas. House Appropriations Committee Chairman Rodney Frelinghuysen, R-N.J., urged patience during the bill’s floor debate, reminding lawmakers this was just the second of many funding bills Congress will take up for an array of natural disasters in recent months. The White House has suggested there could be at least two more bills.

Trump Warns Storm-Ravaged Puerto Rico That Aid Won’t Last ‘Forever’ - NYT — The message was as stark as it was startling. Three weeks after a killer hurricane ravaged Puerto Rico, President Trump indicated on Thursday that he was losing patience. At least some of the blame for the continuing crisis is yours, he told the island territory, and the federal government will not stay “forever.” While most residents endured another day without power and many without water or other basic services, Mr. Trump upbraided Puerto Rico’s leadership for mismanagement that predated the storm and said troops and emergency workers would eventually leave. Caught off guard, his advisers scrambled to reassure Puerto Rico that Washington was not abandoning it.The president’s warning came on the same day the House approved $36.5 billion in aid for natural disasters, including in Puerto Rico, with the tab rising weekly. Federal agencies expect to spend years helping the island rebuild. But Mr. Trump, who has been criticized for a slow and not always empathetic response to the storms that devastated Puerto Rico, sought to refocus responsibility to where he believes it belongs.“ ‘Puerto Rico survived the Hurricanes, now a financial crisis looms largely of their own making.’ says Sharyl Attkisson,” he wrote on Twitter, citing the host of a public affairs show on Sinclair Broadcast Group television stations. “A total lack of accountability say the Governor. Electric and all infrastructure was disaster before hurricanes. Congress to decide how much to spend. We cannot keep FEMA, the Military & the First Responders, who have been amazing (under the most difficult circumstances) in P.R. forever!” The tweets set off alarms in San Juan, the Puerto Rican capital, where Ricardo A. Rosselló, the governor, anxiously called John F. Kelly, the White House chief of staff, to seek an explanation. Mr. Kelly reassured him that no federal resources were being withdrawn anytime soon and then made an unannounced visit to the White House briefing room to repeat the message for the news media. “Our country will stand with those American citizens in Puerto Rico until the job is done,” Mr. Kelly said. The president, he asserted, merely meant that eventually the federal government would complete its mission. “The whole point is to start to work yourself out of a job,” he said.

Democrats, Puerto Ricans decry Trump’s threatened pullback of federal help for the battered island - President Trump drew a sharp and dismayed backlash Thursday from Democratic lawmakers, activists and many Puerto Ricans with his threat to limit federal and military help in the hurricane-battered U.S. territory, where aid workers are warning of a looming humanitarian catastrophe. More than three weeks after Hurricane Maria raked the island, some 85% of the people remain without power, with nearly half of its 3.4 million residents lacking running water. Food and basic supplies remain scarce in the mountainous interior, waterborne diseases pose a growing threat, and many hospitals are in dire circumstances. Deaths attributed to the storm stand at 45, but the number is expected to rise.The Environmental Protection Agency this week advised against “tampering with sealed or locked wells or drinking from these wells” after reports of Puerto Rico residents trying to get water from wells at “Superfund” hazardous-waste sites.In a series of tweets early Thursday, Trump implied that Puerto Rico was to blame for its problems, and suggested he would not endorse the type of years-long, multibillion-dollar federal recovery effort that typically follows a storm of such magnitude, or another large-scale disaster, striking a U.S. locale."We cannot keep FEMA, the Military & the First Responders, who have been amazing (under the most difficult circumstances) in P.R. forever!" Trump said in one tweet. He also cited what he called a “total lack of accountability” on Puerto Rico’s part, and quoted a conservative journalist who characterized the island's financial crisis as a problem "of their own making."

Trump, the Chaos President, Adds Cruelty to His Brand --Pam Martens -- Donald Trump, the President of the United States, who took his companies through bankruptcy six times, picked the three-week anniversary of Hurricane Maria delivering an epic humanitarian crisis to Puerto Rico to shame the U.S. territory for its financial troubles and to traumatize the struggling residents by suggesting he may yank Federal workers from Puerto Rico.The President, whose key job is to rally people in the time of crisis, posted the following, insanely cruel Tweet yesterday to a region where 84 percent of the residents still lack electrical power; one-third lack clean running water; and only 8 percent of the roads are passable according to government statistics: “We cannot keep FEMA, the Military & First Responders, who have been amazing (under the most difficult circumstances) in P.R. forever!” Trump posted to his Twitter page. That post came shortly after Trump retweeted a statement suggesting that Puerto Rico’s “financial crisis looms largely from their own making.”The three-week time frame for Trump’s patience to be running out in the midst of a humanitarian crisis contrasts with the three-year time frame, from 2007 to 2010, in which the Federal government’s patience and money were lavished on Wall Street to the tune of $16 trillion. Wall Street’s crisis was not the product of Mother Nature but a thundering herd of greed-obsessed banksters hell bent on looting the investing public and the public purse. (See Puerto Rico Relief Efforts Pale to that for Just One Wall Street Bank.)Trump’s most recent tone deaf remarks on Puerto Rico follow those he made while visiting the Island on October 3, when he said the situation in Puerto Rico isn’t “a real catastrophe” like that of Hurricane Katrina in New Orleans and actually blamed Puerto Rico for “throwing our budget a little out of whack.”Just two weeks after Hurricane Maria made landfall in Puerto Rico as a Category 4 hurricane with sustained winds of 155 miles per hour, President Trump Tweeted that “They want everything to be done for them…” while lavishing praise on “10,000 Federal workers” who he said are “doing a fantastic job.”

They are monsters  - The President and his GOP majorities in Congress are monsters. As one commentator on NPR put it yesterday afternoon, the President's default mode is to toss an armed hand grenade into a room in order to create chaos.  He can then pick out the most vulnerable, and use that leverage to enter into a win-lose deal.Meanwhile, having been emboldened by the 2011 Debt Ceiling Debacle, the Congressional GOP majorities, who haven't been able to legislate affirmatively, have become specialists in taking hostages and threatening to shoot them unless their agenda is enacted.Trump and the GOP Congress combined have, as of this morning taken at least four hostages:DREAMers - the DACA program is being terminated. After an initial claim that a deal had been made to protect young people who had been brought to the US as children and know of no other home, the malAdministration is now taking a hard line, refusing to protect the nearly 1 million enrollees from deportation unless it gets its entire immigration policy enacted.SChip recipients - this program, which provides medical insurance coverage for over 8 million  lower income children, was allowed to expire on September 30.  Despite assurances from the Congressional GOP that it would be re instituted promptly, nothing has been done.Puerto Ricans - Unlike Texas, Louisiana, and Florida, which are GOP majority states, the malAdministration never provided prompt aid to the over 3 million Puerto Ricans, and is threatening to withdraw the aid before basic services are restored.Recipients of Obamacare subsidies - the malAdministration is refusing to make subsidy payments under the ACA to insurers who enroll those who have less than 2.5 times the income of the Federal poverty level, which includes about 7.5 million people who have enrolled under Obamacare.That's a total of close to 19,000,000 hostages. All four groups are not GOP constituencies.  Further, three of the four groups of hostages have in common that they aren't presently able to vote, although SChip children do grow up and Puerto Ricans can move to the mainland, and SChip children have parents and Puerto Ricans already have lots of relatives on the US mainland, all of whom can vote. They are monsters. Real harm is being inflicted on a significant share of the US populace, out of little more than spite. People will die as a result.

Capital Hill's Personal Pharmacist Admits Alzheimer Drugs Are Being Delivered To Members Of Congress -- When it comes time to place your support behind a public representative who will have power in the legislative chambers of Congress, it is safe to say that most people would like to place their support behind an individual who is clear-headed, cognitively healthy, and can withstand the physical necessities needed to fulfill the travel and long work day commitments of a congressman. A healthy democracy surely needs a healthy body of representatives, right? It turns out that those who represent the public on Capitol Hill are not the most healthy individuals as on any given day hundreds of big pharma drugs are delivered to members of the legislative body, with some drugs being delivered to treat serious illnesses such as Alzheimer’s disease.STAT News reports:Nearly every day for at least two decades pharmaceutical drugs have been brought by the carload to the Capitol - an arrangement so under the radar that even pharmacy lobbyists who regularly pitch Congress on their industry aren’t aware of it.The deliveries arrive at the secretive Office of the Attending Physician, an elaborate medical clinic where Navy doctors triage medical emergencies and provide basic health care for lawmakers who pay an annual fee of just over $600. Every one comes from Washington’s oldest community pharmacy, Grubb’s.Mike Kim, the reserved pharmacist-turned-owner of the pharmacy, said he has gotten used to knowing the most sensitive details about some of the most famous people in Washington.“At first it’s cool, and then you realize, I’m filling some drugs that are for some pretty serious health problems as well. And these are the people that are running the country,” Kim said, listing treatments for conditions like diabetes and Alzheimer’s.“It makes you kind of sit back and say, ‘Wow, they’re making the highest laws of the land and they might not even remember what happened yesterday.’”

Costs for DeVos's security detail could top $6M in next year: report | TheHill: Security costs for Education Secretary Betsy DeVos could reportedly reach $6.54 million over the next year. DeVos's security detail since February has cost $5.28 million, an Education Department official told Politico — about $2.5 million less than the projected cost. A spokesman for the U.S. Marshals Service, which provides DeVos's personal detail, told POLITICO that he could not disclose the nature of security threats against her or the size of her security detail.Education secretaries are typically protected by department security employees. The marshals service began providing DeVos’s security detail in February after protesters blocked her from entering a D.C. public school. A deal covering DeVos's detail was just renewed for fiscal 2018. Environmental Protection Agency Administrator Scott Pruitt maintains a 24-hour security detail that has drawn criticism. 

Trump Pours Millions Into Money-Losing Scottish Golf Course -- From the 300-plus crystal chandeliers to the gold-plated taps in the bathrooms, Donald Trump has transformed a hotel overlooking one of the world’s most legendary golf courses into an eponymous glittering palace. Members gathering for their tee times on a recent cloudy Wednesday say they love many of the changes at the Trump Turnberry resort in Scotland, but they doubt the president will ever make his money back. “It’s a personal investment in aggrandizement,” says Mervyn Caplan, a member for the past 17 years, sipping tea in the clubhouse. “He’ll never get a return on the capital he’s invested.” So far, that looks like a sound prediction. Financial reports made public in the U.K. over the weekend show Trump last year faced mounting losses at Turnberry and his other Scottish golf resort, forcing him to inject more cash to cover shortfalls. Losses at Trump Turnberry, his biggest investment outside of the U.S., more than doubled to 17.6 million pounds ($23 million) in 2016, while revenue fell 21 percent to 9 million pounds. Trump’s other course north of Aberdeen also posted widening losses of 1.4 million pounds, an increase of 28 percent, while revenue fell 12 percent.  Beyond last year’s losses, however, the latest disclosures show Trump has now poured a combined 152 million pounds, or nearly $200 million, into the ventures without either one turning a profit under his ownership. The results, among the few made public anywhere in the world for Trump’s private businesses, may add to questions about whether his brand of divisive politics is starting to take some of the luster off of his businesses.

Hoping to Have Trump Cleared, Legal Team Eases Resistance to Inquiry — White House officials once debated a scorched-earth strategy of publicly criticizing and undercutting Robert S. Mueller III, the special counsel investigating Russian efforts to disrupt last year’s election. Now, President Trump’s lawyers are pursuing a different course: cooperating with the special counsel in the hope that Mr. Mueller will declare in the coming months that Mr. Trump is not a target of the Russia inquiry.Mr. Trump has long sought such a public declaration. He fired his F.B.I. director, James B. Comey, in May after Mr. Comey refused to say openly that Mr. Trump was not under investigation.The president’s legal team is working swiftly to respond to requests from Mr. Mueller for emails, documents and memos, and will make White House officials available for interviews. Once Mr. Mueller has combed through the evidence, Mr. Trump’s lawyers plan to ask him to affirm that Mr. Trump is not under investigation, either for colluding with Russian operatives or for trying to obstruct justice.More than a half dozen White House officials, witnesses and outside lawyers connected to the Russia inquiry have described the approach, which is as much a public relations strategy as a legal one. The president’s legal team aims to argue that the White House has nothing to hide, hoping to shift the burden to Mr. Mueller to move quickly to wrap up an investigation that has consumed the Trump administration’s first year.“The White House believes the special counsel shares its interest in concluding this matter with all deliberate speed for the benefit of the country,” said Ty Cobb, the White House lawyer handling the response to Mr. Mueller’s investigation. He said the administration was cooperating “with hope of bringing the matter to a prompt and decisive end.”  Any public declaration by Mr. Mueller about the president’s innocence would also be a clear sign that the special counsel’s investigation has not broadened significantly beyond last year’s presidential campaign to include a close scrutiny of any of Mr. Trump’s past business dealings with Russians. Whether the strategy will work is another matter. The plan rests on the premise that Mr. Trump has done nothing wrong — something the president has repeatedly told his lawyers and said publicly — and some lawyers connected to the investigation say that Mr. Cobb has been too willing to take the president at his word. If the White House moves too hastily, they argue, materials could end up in Mr. Mueller’s hands that might damage the president and other administration officials.

 House Intelligence Committee Subpoenas Firm Behind "Trump Dossier" --House Intelligence Committee Chairman Devin Nunes has been repeatedly stymied in his efforts to compel the FBI to turn over documents that would help him ascertain how much of the Trump dossier has been verified by the intelligence community, and what role that information played in launching the DOJ’s investigation into possible collusion between the Trump campaign and the Russian government.   But the FBI has resisted Nunes’ subpoenas despite his threats to compel AG Jeff Sessions and FBI Director Christopher Wray to deliver public testimony before the committee if the FBI continues to withhold the documents. So now, it appears he’s trying a different tack. CNN reports that Nunes earlier this month issued subpoenas to the founders of Fusion GPS, the Washington opposition research firm that originally helped procure the dossier, demanding that they participate in public hearings before the House Intelligence Committee, and turn over all pertinent documents.Earlier this year, Nunes announced that he was stepping aside from directing the committee's Russia inquiry when he became the subject of an ethics investigation into his handling of classified information after he informed the White House about the possibility that members of the Trump campaign were legally surveilled during the race before informing his own committee.But more recently, Nunes has made clear that he is still playing an influential role in the committee’s inquiry, despite announcing that he had delegated authority on the Russia matter to Republican Rep. Mike Conaway of Texas.

After Nine Months, Only Stale Crumbs in Russia Inquiry - -- The co-chairmen of the Senate Select Committee on Intelligence held a press briefing Thursday on the status of their ongoing investigation into Russian meddling in the American electoral process. Content-wise, the press briefing and the question and answer session were an exercise in information futility—they provided little substance and nothing new. The investigation was still ongoing, the senators explained, and there was still work to be done.  Nine months into the Committee’s work, the best Sens. Richard Burr (R-N.C.) and Mark Warner (D-Va.), could offer was that there was “general consensus” among committee members and their staff that they trust the findings of the Intelligence Community Assessment (ICA) of January 2017, which gave high confidence to the charge that Russia meddled in the 2016 presidential election. The issue of possible collusion between Russia and members of the campaign of Donald Trump, however, “is still open.”   Frankly speaking, this isn’t good enough.  The 2017 ICA on Russia was conceived in an atmosphere of despair and denial, birthed by Democrats and Republicans alike who were stunned by Trump’s surprise electoral victory in November 2016. To say that this issue was a political event would be a gross understatement; the 2017 Russian ICA will go down in history as one of the most politicized intelligence documents ever, regardless of the degree of accuracy eventually afforded its contents. The very fact that the document is given the sobriquet “Intelligence Community” is itself a political act, designed to impart a degree of scrutiny and community consensus that simply did not exist when it came to the production of that document, or the classified reports that it was derived from.

Google uncovers Russian-bought ads on YouTube, Gmail and other platforms - WaPo — Google for the first time has uncovered evidence that Russian operatives exploited the company’s platforms in an attempt to interfere in the 2016 election, according to people familiar with the company's investigation. The Silicon Valley giant has found that tens of thousands of dollars were spent on ads by Russian agents who aimed to spread disinformation across Google’s many products, which include YouTube, as well as advertising associated with Google search, Gmail, and the company’s DoubleClick ad network, the people said, speaking on condition of anonymity to discuss matters that have not been made public. Google runs the world’s largest online advertising business, and YouTube is the world’s largest online video site. The discovery by Google is also significant because the ads do not appear to be from the same Kremlin-affiliated troll farm that bought ads on Facebook -- a sign that the Russian effort to spread disinformation online may be a much broader problem than Silicon Valley companies have unearthed so far. Google previously downplayed the problem of Russian meddling on its platforms. Last month, Google spokeswoman Andrea Faville told The Washington Post that the company is "always monitoring for abuse or violations of our policies and we've seen no evidence this type of ad campaign was run on our platforms." Nevertheless, Google launched an investigation into the matter, as Congress pressed technology companies to determine how Russian operatives used social media, online advertising, and other digital tools to influence the 2016 presidential contest and foment discord in U.S. society. 

How Russia Harvested American Rage to Reshape U.S. Politics - NYT - YouTube videos of police beatings on American streets. A widely circulated internet hoax about Muslim men in Michigan collecting welfare for multiple wives. A local news story about two veterans brutally mugged on a freezing winter night. All of these were recorded, posted or written by Americans. Yet all ended up becoming grist for a network of Facebook pages linked to a shadowy Russian company that has carried out propaganda campaigns for the Kremlin, and which is now believed to be at the center of a far-reaching Russian program to influence the 2016 presidential election.  A New York Times examination of hundreds of those posts shows that one of the most powerful weapons that Russian agents used to reshape American politics was the anger, passion and misinformation that real Americans were broadcasting across social media platforms. The Russian pages — with names like “Being Patriotic,” “Secured Borders” and “Blacktivist” — cribbed complaints about federal agents from one conservative website, and a gauzy article about a veteran who became an entrepreneur from People magazine. They took descriptions and videos of police beatings from genuine YouTube and Facebook accounts and reposted them, sometimes lightly edited for maximum effect. Other posts on the Russian pages used stilted language or phrases rarely found in American English. Yet their use of borrowed ideas and arguments from Americans, which were already resonating among conservatives and liberals, demonstrated a deft understanding of the political terrain. The Russians also paid Facebook to promote their posts in the feeds of American Facebook users, helping them test what content would circulate most widely, and among which audiences. “This is cultural hacking,” said Jonathan Albright, research director at Columbia University’s Tow Center for Digital Journalism. “They are using systems that were already set up by these platforms to increase engagement. They’re feeding outrage — and it’s easy to do, because outrage and emotion is how people share.”

Facebook and Twitter have to stop Russians and others from sharing racist content, black U.S. lawmakers insist - Black lawmakers in Congress are increasing pressure on Facebook and Twitter to prevent Russian malefactors — or anyone else — from spreading racist messages on social media in a bid to fuel political unrest in the United States.During the 2016 presidential election, Kremlin-aligned forces purchased thousands of ads on Facebook, many of which sought to stir trouble by riling supporters and opponents alike on both sides of contentious issues — including causes like immigration and Black Lives Matter, sources have said. Given the tech industry’s well-documented troubles addressing issues of diversity, three U.S. lawmakers — Reps. Robin Kelly, Bonnie Watson Coleman, and Emanuel Cleaver — are now pushing the two tech giants anew to police their platforms more aggressively. In a letter sent Friday, obtained by Recode, they urge Facebook and Twitter to appoint people of color to their boards of directors, while commissioning new audits of ads at each company to ensure they aren’t spreading “fake news.” And the three lawmakers — all members of the Congressional Black Caucus, or CBC — further press the tech giants to take down ads that are “aimed at inciting racial discontent” or “voter suppression.”  With it, they ask Facebook and Twitter to commit to sharing copies of the ads purchased by Russian sources during the presidential election with all members of Congress by December 1, 2017. So far, Facebook has found about 3,000 ads bought by Kremlin sources, while Twitter has found about 200 accounts tied to Russia. But the two companies have only shared that information with the three congressional committees investigating Kremlin meddling in the election.

People are hyperventilating over a study of Russian propaganda on Facebook. Just breathe deeply - In the past month, we learned that Russian operatives spent at least $100,000 on Facebook advertisements. We also learned that Russian actors used Facebook to organize offline anti-immigration protests. Just last week, a study estimated that political posts by a Russian troll factory (the Internet Research Agency) had an “organic reach” of between 340 million and several billion views. This study has received enormous attention, including an article at The Washington Post’s Switch blog.These are big numbers. But it can be easy to misinterpret them. The $100,000 in advertisements was a drop in the bucket compared to the $70 million directly spent by the Trump campaign. Barely anyone actually showed up to the anti-immigration protests. It turns out that the widely cited metrics for organic reach have a botnet problem.  The study arguing that Russian posts got billions of views comes from Jonathan Albright, research director at Columbia University’s Tow Center for Digital Journalism. Albright relied on CrowdTangle, a popular social media analytics tool for monitoring Facebook interactions and surfacing viral content. This is a novel and creative application of the CrowdTangle toolset, and not the purpose that CrowdTangle was designed for. Unfortunately, that may have led to problems in the analysis. I studied CrowdTangle in my 2016 book, “Analytic Activism.” Here’s how the tool works:“The logic of CrowdTangle’s model is relatively simple (even if the underlying math and software code gets complicated). CrowdTangle tracks clusters of Facebook pages and specific keywords. It gathers historical data on how stories, posts and images tend to perform on these sites, and then highlights the stories, posts and images that are doing best against their own expected baseline performance rate. [The] company then packages this information into a daily email, alerting [its] clients to the content which is likely to perform best on a day-to-day basis.” CrowdTangle plays a crucial behind-the-scenes role in the social sharing optimization strategies of digital media producers like Upworthy, Vox and Buzzfeed. CrowdTangle was not designed to combat, weed out or even study botnets. It was designed to identify stories and content that performs better-than-average within a company’s peer network..

Blaming Russia for Major U.S. Problems Raises Risk of Not Seeing Enemy Within – Pam Martens - The U.S. House and Senate Intelligence Committees have asked executives from Google, Facebook and Twitter to appear at their respective public hearings on November 1. The hearings will seek testimony on evidence already turned over to the Committees by the companies on how Russia used social media accounts, bots, trolls and advertising to influence the outcome of the 2016 Presidential election.  The New York Times reported yesterday that “On Facebook, fake Russia-linked accounts — in which fictional people posed as American activists — promoted inflammatory messages on divisive issues. Those accounts bought advertising to promote those messages and reach a bigger audience within the Facebook universe, while promoting the incendiary posts to different locations or people with established political leanings for maximum impact.” Facebook has turned over information on 3,000 Russia-linked ads that appeared on its network in the leadup to the 2016 presidential election. Google this week disclosed that Russia-linked ads had also appeared on its platforms during the presidential campaign. Twitter has provided evidence to the Committees that RT, a Russian, state-funded television network previously known as Russia Today, had advertised on its network during the presidential campaign period. These are substantive issues that must be addressed by engaged Americans to put the country back on the right track. A sure sign that something is skewed in this report is the phrase “alleged Wall Street greed.” No one in the know, particularly in the intelligence community, could sanely be asserting at this point in time that the obscene greed on Wall Street is simply an unsupported allegation — not after Wall Street execs caused the greatest financial collapse since the Great Depression, then paid themselves tens of billions of dollars in bonuses out of taxpayer bailout funds; not after regulators have produced evidence showing these firms looted men and women serving in the military; utility customers; municipalities; and struggling homeowners across America.

New York Times Reveals That "Russia Ads" Were Mostly Made By Americans - The more details that emerge about Russia’s “sophisticated” efforts to sway the November election in favor of President Donald Trump, the more ridiculous Sen. Mark Warner’s aggressive rhetoric sounds. But instead of fading away, upcoming testimony from Facebook, Twitter and maybe Google will likely keep the story on life support for the foreseeable future, especially now that Congress has succeeded in browbeating all three of the tech giants mentioned above to admit that Russian agents were buying advertising or otherwise disseminating targeted propaganda on their platforms.In its latest piece exploring the innerworkings of the Russia-led Facebook campaign to “sow discord” in the American electorate, the New York Times makes a stunning revelation - though its implications are clearly lost on America’s paper of record.Almost all of the content promoted by the Russia-backed Facebook groups was created by Americans, much of it by conservative news websites like the Conservative Tribune.To wit…“A New York Times examination of hundreds of those posts shows that one of the most powerful weapons that Russian agents used to reshape American politics was the anger, passion and misinformation that real Americans were broadcasting across social media platforms.In other words, the Russia groups did little more than amplify political messages that were already deafeningly broadcast by the grassroots movement that emerged to support President Donald Trump during his quest for the Republican nomination, and later, the presidency.Given the small dollar a mounts spent on these campaigns, it’s difficult to imagine that these pages had a measurable impact on public opinion. In fact, most of the original sources of content that was repurposed by the Russians garnered far more views on their own platforms.

Facebook scrubbed potentially damning Russia data before researchers could analyze it further - Facebook removed thousands of posts shared during the 2016 election by accounts linked to Russia after a Columbia University social-media researcher, Jonathan Albright, used the company's data-analytics tool to examine the reach of the Russian accounts. Albright, who discovered the content had reached a far broader audience than Facebook had initially acknowledged, told The Washington Post on Wednesday that the data had allowed him "to at least reconstruct some of the pieces of the puzzle" of Russia's election interference. "Not everything, but it allowed us to make sense of some of this thing," he said. Facebook confirmed that the posts had been removed. But a spokesman said it was because the company had fixed a glitch in the analytics tool — called CrowdTangle — that Albright had used which provided "an unintended way to access information about deleted content.""Facebook is cooperating fully with federal investigations and are providing info to the relevant authorities," the spokesman said in a statement.“We identified and fixed a bug in CrowdTangle that allowed users to see cached information from inactive Facebook Pages. Across all our platforms we have privacy commitments to make inactive content, that is no longer available, inaccessible. With this fix, the information from all Inactive Pages will now not be available on CrowdTangle."  Facebook's decision to remove the inactive pages' content from public view raised questions about whether the company could be held liable for suppressing potential evidence, given its role in the wide-ranging investigation of Russia's election interference.

Mueller's investigative team interviews Priebus | TheHill: Special counsel Robert Mueller's team interviewed former White House chief of staff Reince Priebus on Friday, signaling that the special counsel's Russia probe is reaching into the top levels of President Trump's team. “Mr. Priebus was voluntarily interviewed by Special Counsel Mueller’s team today. He was happy to answer all of their questions," Priebus' lawyer William Burck told The Hill. Politico was the first to report on the interview. Trump dismissed Priebus from his White House post in July as part of a major staff shakeup, replacing him with retired Gen. John Kelly. Mueller's probe into ties between Trump campaign associates and Russia during last year's election is thought to have expanded to current and former White House officials. Politico reported on Thursday that Trump lawyers were mulling a potential interview between Mueller and Trump. Fox News reported last month that the special counsel had begun interviewing White House staffers, while CNN reported last week that Mueller’s investigative team met earlier this summer with former British intelligence agent Christopher Steele, who authored the controversial, unverified dossier on alleged ties between Trump and Russia.

".Obliterated File" Reveals That Imran Awan Wiped His Phone Just Hours Before His Arrest -- Assistant U.S. Attorney Michael Mirando revealed in a court hearing Friday that embattled Congressional IT staffer Imran Awan apparently wiped his cell phone clean just hours before being arrested by the FBI at Dulles airport while attempting to flee to Pakistan.  AsForbes points out this morning, this new information came out in a hearing in which Awan's attorney argued that his curfew should be lifted and his ankle bracelet removed. Imran Awan, the IT professional Rep. Debbie Wasserman Schultz (D-FL) kept on her congressional payroll long after it became known he was under investigation by the Capitol Police, wiped his phone hours before he was arrested last July. But we are just starting to learn about this case. This is new revelation that Awan wiped his phone just before he attempted to fly away to Pakistan came out last Friday when Awan appeared in court.  Awan’s attorney, Chris Gowen, argued that Awan should have his curfew lifted and that the tracking device on his ankle should be removed.  This prompted Assistant U.S. Attorney Michael Mirando to say that when Imran was arrested at Dulles International Airport a cellphone found on him “had been wiped clean just a few hours before.” Awan's attorney Chris Gowen tried to argue that Awan's phone was blank because he had just purchased it while seemingly hoping that the FBI had simply overlooked the ".obliterate file" that was created when the phone was intentionally wiped clean.

Wife Of Indicted IT Staffer Imran Awan Turns: "My Husband Committed Fraud Along With Polygamy" - Much of what you thought you knew about the events leading up to the arrest of Debbie Wasserman Schultz's former, and now indicted, IT staffer Imran Awan just got upended by a new revelation from the Daily Caller which reported that his wife, Hina Alvi, filed a lawsuit against her husband in Pakistan accusing him of fraud.  If true, of course, this would raise questions of whether Alvi might seek, or already has, an immunity deal with the FBI in return for additional evidence and/or testimony related to her husband's misdeeds. As you may recall, Alvi reportedly fled the U.S. to Pakistan back in March and was temporarily detained by U.S. Customs officials when they discovered $12,000 in unreported cash in her luggage.  While moving that amount of cash is technically a felony, Alvi to was ultimately allowed to leave the country, presumably to never return. That said, Alvi stirred rumors that she may have 'flipped' last month when she struck a deal with the FBI to return to the U.S. to appear at an arraignment...rumors that have seemingly now been confirmed by the Daily Caller. The indicted husband-and-wife team of former IT aides to Democratic Rep. Debbie Wasserman Schultz sat directly across from each other at the defendants’ table in federal court Friday in Washington, D.C., but refused to look at each other. Even as they are co-defendants in a U.S. case, Imran Awan’s own wife, Hina Alvi, has become the latest person to accuse him of fraud, filing papers against him in Pakistani court on Sept. 13, records obtained by The Daily Caller News Foundation show. Alvi said Awan “threatened the complainant of dire consequences, he also threatened to harm the lives of family of the complainant if she intervenes.” Yet the couple entered and left the court separately, have different lawyers, and Awan’s lawyer told the judge that the husband and wife are staying “in a one-bedroom apartment and then also a house.” The Pakistani legal papers say they live in separate towns there, too.“My husband Imran Awan son of Muhammad Ashraf Awan, committed fraud along with offence of polygamy,” she charges in the papers.

The FBI’s New U.S. Terrorist Threat: ‘Black Identity Extremists’ - As white supremacists prepared to descend on Charlottesville, Virginia, in August, the FBI warned about a new movement that was violent, growing, and racially motivated. Only it wasn’t white supremacists; it was “black identity extremists.”  Amid a rancorous debate over whether the Trump administration has downplayed the threat posed by white supremacist groups, the FBI’s counterterrorism division has declared that black identity extremists pose a growing threat of premeditated violence against law enforcement.  “The FBI assesses it is very likely Black Identity Extremist (BIE) perceptions of police brutality against African Americans spurred an increase in premeditated, retaliatory lethal violence against law enforcement and will very likely serve as justification for such violence,” reads the report, marked for official use only and obtained by Foreign Policy. The August 2014 shooting of Michael Brown in Ferguson, Missouri, was the catalyst for widespread anger and violence, the FBI report says, concluding that continued “alleged” police abuses have fueled more violence. “The FBI assesses it is very likely incidents of alleged police abuse against African Americans since then have continued to feed the resurgence in ideologically motivated, violent criminal activity within the BIE movement,” the report states.Some 748 people have been shot and killed by police so far in 2017, including at least 168 African-Americans. The report, dated Aug. 3 — just nine days before the white supremacist rally in Charlottesville turned deadly — appears to be the first known reference to “black identity extremists” as a movement. But former government officials and legal experts said no such movement exists, and some expressed concern that the term is part of a politically motivated effort to find an equivalent threat to white supremacists.

 Our Protected, Predatory Oligarchy: Dirty Secrets, Dirty Lies - The revelations coming to light about Hollywood Oligarch Harvey Weinstein perfectly capture the true nature of our status quo: a rotten-to-the-core, predatory, exploitive oligarchy of dirty secrets and dirty lies protected by an army of self-serving sycophants, servile toadies on the make and well-paid legal mercenaries. Predators aren't an aberration of the Establishment; they are the perfection of the Establishment, which protects abusive, exploitive predator-oligarchs lest the feudal injustices of life in America be revealed for all to see. The predators reckon their aristocratic status in Hollywood/D.C. grants them a feudal-era droit du seigneur (rights of the lord) to take whatever gratifications they desire from any female who has the grave misfortune to enter their malefic orbit. Anyone who protests or makes efforts to go public is threatened by the oligarch's thugs and discredited/smeared by the oligarch's take-no-prisoners legal mercenaries. (Recall the Clintons' Crisis Management Team tasked with crushing any Bimbo Eruptions, i.e. any eruptions of the truth about Bill's well-known-to-insiders predation of the peasantry.) The dirty secret is that the oh-so-hypocritical power elites of Hollywood and Washington D.C. circle the wagons to protect One of Their Own from being unmasked. The first weapons of choice in this defense are (as noted above) threats from thugs, discrediting the exploited via the oligarchy's paid goons and lackeys in the mainstream media and dirty lies about what a great and good fellow the oligarch predator is. The last line of defense is a hefty bribe to silence any peasant still standing after the oligarchs' onslaught of threats, smears and lies. Should the worst happen and some sliver of the truth emerge despite the best efforts of the thugs, corporate media, legal mercenaries and PR handlers, then the playbook follows the script of any well-managed Communist dictatorship: the oligarch predator is thrown to the wolves to protect the oligarchs' systemic predation and exploitation of the peasantry/debt-serfs. What's truly noteworthy here is not the sordid allegations and history of payoffs--it's the 27 years of intense protection the Hollywood/ media /D.C. status quo provided, despite hundreds of insiders knowing the truth. Why are we not surprised that Hollywood, the corporate media and Washington D.C. lack even one courageous insider? 

Treasury Report Calls for Sweeping Changes to Financial Rules - NYT - The Trump administration is again taking aim at the Dodd-Frank Act, releasing a Treasury Department report on Friday that recommended a vast reworking of Wall Street rules adopted in response to the financial crisis. Some of the proposed overhauls would do away with a requirement for companies to divulge the pay ratio of chief executives to workers, streamline derivatives rules, and give companies more access to capital and investors more places to put their money. The ideas were welcomed on Wall Street, where banks complain that Dodd-Frank rules have needlessly hobbled growth. But they attracted skepticism from consumer groups and others, who consider the suggestions a dangerous relaxation of checks against a cavalier financial system. The report offers a guide to agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, which police activity relating to stocks, bonds and derivatives. But the detailed 220-page document also serves as a gauge of the administration’s attitude toward Wall Street — namely, that market restraints should be loosened. The proposals follow a report on banking rules released by Treasury officials in June. That report sought to weaken the Consumer Financial Protection Bureau, lighten regulatory scrutiny of small community banks and allow greater exemptions from the so-called Volcker Rule, which bars banks from making speculative bets for their own gain. Both the June report and the one released on Friday — as well as two more expected in the coming months — originated from an executive order that President Trump signed in February asking Treasury Secretary Steven Mnuchin to reposition financial rules to better match the administration’s aims. “The U.S. has experienced slow economic growth for far too long,” Mr. Mnuchin said in a statement Friday. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.” Rob Nichols, chief executive of the American Bankers Association, called the Treasury recommendations “practical, reasonable and achievable.” “Many of the recommendations in the report would make it easier to raise capital, meet the needs of bank customers operating domestically and abroad, and focus regulatory processes on effective supervision without harming the economy,” Mr. Nichols said in a statement.

How the Trump administration wants to dial back capital market regs — The Treasury Department is expanding its calls for overhauling regulation of the financial services sector, this time focusing on changes to the most significant rules surrounding securitization and derivatives enacted since the crisis. In a report quietly released on Friday, the second in a series requested by President Trump in a February executive order, calls primarily on market and banking regulators to dial back their post-crisis regulations in an effort to help economic growth. “The U.S. has experienced slow economic growth for far too long,” Treasury Secretary Steven Mnuchin said in a press release. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow.” Treasury acknowledges that in some areas closer scrutiny of capital markets was warranted following the crisis, but maintains that in many areas it went too far.“There are significant challenges with regulatory harmonization and efficiency, driven by a variety of factors including joint rulemaking responsibilities, overlapping mandates, and jurisdictional friction,” the report said. “In order to help maintain the strength of our capital markets, we need to constantly evaluate the financial regulatory system to consider how it should evolve.”But critics said the report represents an unmitigated rollback of rules targeted at the precise kinds of instruments and tactics that contributed to the financial crisis. “This is almost uniformly deregulatory,” said Marcus Stanley, policy director for Americans for Financial Reform. “There’s no surprise there. It’s clearly very deliberately focused on things that can be done through regulatory action without needing Congress, which from our standpoint raises the threat level.”Many of the report’s recommendations are directed at market regulations — for example, cutting various policies in order to make it easier for a company to go public and loosening rules for crowdfunding and private equity investment. But other rules call for reducing the amount of capital required for banks or other entities bundling receivables into tradable securities. Those activities have been prevalent for decades but were also central to the 2008 crash, when banks and other firms bundled subprime mortgages into mortgage-backed securities and then sold them off with little concern for their long-term viability. In response, regulators require securities originators to hold capital against their securities in case they do not perform as expected.

House panel approves bill to raise SIFI threshold, 20 other relief measures - The House Financial Services Committee passed more than twenty bills on Thursday, some of which could end up as part of a Senate regulatory relief package.  After the House passed a mammoth relief bill in June, the Financial Choice Act, it has pushed forward on passing individual measures that enjoy bipartisan support. The bills were individual pieces of the larger Financial Choice Act, including measures to raise the systemic threshold for banks and raise the threshold for banks subject to CFPB supervision.

Committee Advances 22 Bills Forward for House Consideration – The Financial Services Committee on Thursday approved 22 bills, largely bipartisan and largely aimed at helping smaller banks, credit unions, and emerging growth companies.  Chairman Hensarling (R-TX) told committee members the bills will promote access to capital, reduce the regulatory burden “that slows our economy and makes it harder for people on Main Street to get ahead,” and provide community financial institutions “with desperately needed regulatory relief as we know we are still regrettably losing one a day in America.” In addition, the committee approved legislation “to thwart North Korea’s nuclear weapons program with the most far-reaching financial sanctions ever aimed at that tyrannical and regressive regime,” said Chairman Hensarling. Below is a list of the bills the committee reported favorably to the House for further consideration:

 EPI comment to the SEC regarding the fiduciary rule -- While we recognize that the SEC has an important role in setting the standards that apply to broker-dealers and investment advisers, many of the questions you ask were satisfactorily answered by the Department of Labor (DOL), the Council of Economic Advisors (CEA), consumer advocates, and other experts representing the interests of retirement savers who submitted comments and testified in the process of crafting the DOL fiduciary rule. Our comments below reflect what we believe to be widely-shared views among consumer advocates.We urge the SEC to build on the DOL rule addressing conflicts of interest that harm retirement savers to extend protections to other investors. DOL has already made changes to its rule in response to concerns raised by the financial industry. Industry groups have had more than ample opportunity to voice their objections, including filing lawsuits around the country, and their claims have been appropriately rejected. That rule resulting from that robust public comment process can and should serve as the starting point for SEC action.The administration should not use the SEC’s oversight in other markets as an excuse to weaken or delay the DOL rule’s protections for retirement savers. While we encourage the SEC to strengthen investor protections for non-retirement accounts, this should be done by leveling up the standards to match the DOL rule requirements rather than by leveling standards down to reflect the lowest common denominator. An incremental approach, in this case, does not create confusion, since there is no ambiguity about who is protected by the DOL rule: all people saving in tax-qualified retirement accounts, regardless of who advises them or what investment products they recommend. To the extent that there are spillover effects from the DOL rule on products and services marketed to other investors in non-retirement accounts, these will only be beneficial…

US Intelligence Unit Accused Of Illegally Spying On Americans’ Financial Records  -- The intelligence division at the Treasury Department has repeatedly and systematically violated domestic surveillance laws by snooping on the private financial records of US citizens and companies, according to government sources.Over the past year, at least a dozen employees in another branch of the Treasury Department, the Financial Crimes Enforcement Network, have warned officials and Congress that US citizens’ and residents’ banking and financial data has been illegally searched and stored. And the breach, some sources said, extended to other intelligence agencies, such as the National Security Agency, whose officers used the Treasury’s intelligence division as an illegal back door to gain access to American citizens’ financial records. The NSA said that any allegations that it “is operating outside of its authorities and knowingly violating U.S. persons’ privacy and civil liberties is categorically false.”In response to detailed questions, the Treasury Department at first issued a one-sentence reply stating that its various branches “operate in a manner consistent with applicable legal authorities.” Several hours after this story published, the department issued a more forceful denial: “The BuzzFeed story is flat out wrong. An unsourced suggestion that an office within Treasury is engaged in illegal spying on Americans is unfounded and completely off-base.” It added that “OIA and FinCEN share important information and operate within the bounds of statute.”Still, the Treasury Department’s Office of the Inspector General said it has launched a review of the issue. Rich Delmar, a lawyer in that office, offered no further comment.But a senior Treasury official, who is not authorized to speak on t he matter so requested anonymity, did not mince words: “This is domestic spying.”

Equifax hackers took driver's license info on 10M Americans - In the Equifax breach, hackers stole the driver's license information of more than 10 million Americans, The Wall Street Journal reported Tuesday. That's in addition to the Social Security numbers and other personal details about 145.5 million Americans hackers took from Equifax's systems. The company said the stolen data included driver's license information, but it didn't say for how many people. What's more, Equifax said Tuesday that 15.2 million records on more than nearly 700,000 UK consumers were also compromised. Information from a driver's license includes a home address and the driver's height and weight, not to mention the driver's license number. These pieces of data would make a potential identity thief's job easier. The richly detailed consumer records were stolen between May and the end of July this year by hackers who cracked into Equifax's systems by taking advantage of an unpatched software bug, the company said. Equifax didn't immediately respond to a request for comment on the number of US driver's license records or UK consumer records the hackers stole. The company announced last week that the total number of Americans affected was 145.5 million, not 143 million as it first announced. It also said it was notifying an unspecified number of UK residents by mail that they were affected in some way by the breach.

Is the Trump Administration Causing a Reduction in Corruption in Public Companies? -- Credit Slips  --In theory it is possible, I guess.  The Trump Administration comes in, promising to clean or drain or pump the swamp in Washington, and CEOs of public companies become scared and decide to reform themselves.  If so, one would expect to see fewer corruption prosecutions because, of course, there is less corruption to prosecute.My dear friend and co author, Steve Choi, constructed a graph of the actions filed against US public companies and subsidiaries in the first fiscal year since the Trump Administration took office (that is, month by month data of filings, until September 30, 2017).  If you are interested, the graph is here (along with details about our data collection process, caveats blah blah).Bottom line:  At first cut, the SEC, at least under the FCPA, seems to be bringing a lot fewer actions under the Trump Administration than they were bringing under the Obama Administration.Is it because there is a lot less corruption now?  Because CEOs are running scared? Hmmmm . . .  Maybe, and one of my knowledgeable colleagues mentioned this, it is because the Trump Administration has been unduly slow in appointing the department heads who would need to sign off on public company investigations.  Maybe so.  If so, we should see an explosion in prosecutions after the appointments are made.  We will keep collecting the data and see how this explosion hypothesis does.

Google, Larry Page and Sergey Brin accused of racketeering: — In an explosive new allegation, a renowned architect has accused Google of racketeering, saying in a lawsuit the company has a pattern of stealing trade secrets from people it first invites to collaborate. Architect Eli Attia spent 50 years developing what his lawsuit calls “game-changing new technology” for building construction. Google in 2010 struck a deal to work with him on commercializing it as software, and Attia moved with his family from New York to Palo Alto to focus on the initiative, code-named “Project Genie.” The project was undertaken in Google’s secretive “Google X” unit for experimental “moonshots.” But then Google and its co-founders Larry Page and Sergey Brin “plotted to squeeze Attia out of the project” and pretended to kill it but used Attia’s technology to “surreptitiously” spin off Project Genie into a new company, according to the lawsuit. “The real adding-insult-to-injury was Google telling him the project had been canceled and they weren’t going forward with it when in fact they were going full blast on it,” Attia’s lawyer Eric Buether said in an interview Friday. Also named as defendants are Google X founder Sebastian Thrun and Eric “Astro” Teller, the head of Google X, who are alleged to have negotiated with Attia over his technology.

Dow Jones said that Google was buying Apple, and the bots bought it -- This morning Dow Jones shot some fake news out over the wires announcing that Google was acquiring Apple for $9 billion. For a brief second, the news sent Apple’s stock up about $2 to $158 per share. To the benefit of everyone’s morning, both stock prices quickly returned to normal.The story went something like this. Larry Page and Steve Jobs started discussing an acquisition back in 2010. Jobs outlined the plans in his will which dictated the sale to close tomorrow. Google would get nine Apple shares for each Google share at a deal value of $9 billion. Insane to a human, logical to a bot.Dow Jones issued a statement to 9to5Mac, who first reported the drama. The company asserted that the calamity was the product of a technical error and all erroneous headlines would be stripped from the newswire.But the human reaction wasn’t fast enough for the algos. We can only admire the poorly written rules from a distance. It’s irritating, as it always is, when the curtains get pulled back for a brief moment and we all realize that our financial markets are being run by bots with the intelligence of infants. Keyword search, sentiment analysis, trend identification (certainly caused by other bots) and whatever other magic was at play really don’t cut it when long tail events like this happen. I went ahead and pulled some time series data from the moment the news went live and you can easily see the price getting pushed up. There’s a volume spike near the end when the system realizes what is going on and everything instantly returns back to normal.

How Amazon’s Accounting Makes Rich People’s Income Invisible – Steve Roth - Image you’re Jeff Bezos, circa 1998. You’re building a company (Amazon) that stands to make you and your compatriots vastly rich. But looking forward, you see a problem: if your company makes profits, it will have to pay taxes on them. (At least nominally, in theory, 35%!) Then you and your investors will have to pay taxes on them again when they’re distributed to you as dividends. (Though yes, at a far lower 20% rate than what high earners pay on earned income.) Add those two up over many years, and you’re talking tens, hundreds of billions of dollars in taxes. You’re a very smart guy. How are you going to avoid that? Simple: don’t show any profits (or, hence, distribute them as dividends). Consistently set prices so you constantly break even. This has at least three effects:

  • 1. You undercut all your competitors’ prices, driving them out of business. Nobody who’s trying to make a profit can possibly compete.
  • 2. You control more and more market share.
  • 3. You build a bigger and bigger business.

Number 3 is how you monetize this, personally. The value of the company (its share price/market cap) rises steadily. Obviously, a business with $136 billion in revenues (2016) is going to be worth more than one with $10 or $50 billion in revenues — even if it never shows a “profit.” You take your profits in capital gains.Half a trillion dollars in revenues.Essentially zero profits. Ever. Dollars delivered onto investors’ balance sheets? Somewhere north of 300 billion. And instead of being double-taxed on profits for all that time, investors’ income is taxed once, at the low 20% capital gains rate. And that, only when those gains are “realized” through sale of the stock. In the meantime it’s all tax-deferred — yet another huge effective-tax-rate win for shareholders. The longer they hold, the bigger the win. If they pass the stock on to their heirs, those gains are never taxed at all.

Consumer credit casts cloud over JPMorgan and Citi (Reuters) - JPMorgan Chase & Co and Citigroup on Thursday said they had set aside more money for credit card lending losses in the third quarter, stoking concerns about consumer indebtedness and overshadowing profits that topped analyst estimates. Wall Street has ramped up credit card lending amid a slump in bond trading, once a growth engine for many banks, but the higher provisions for bad debts fueled worries about the future profitability of an already costly business and sent shares in both banks lower. Provisions for credit losses across JPMorgan rose 14 percent, with the bank attributing much of that to its credit card business, and 15 percent at Citi in the quarter compared to a year ago. Both banks said that the increases were a normal part of the credit cycle and did not point to evidence of consumers under stress, but that explanation did not reassure analysts. “Investors are taking exception to both companies adding to their credit card loan reserves,” said Jason Goldberg, analyst at Barclays. Citi shares were down 3 percent and JPMorgan was off 0.8 percent in afternoon trade. U.S. banks have spent hundreds of millions of dollars attracting consumers to their credit cards with offers of cash-back on spending, plane tickets and free borrowing on balances transferred from other cards. Analysts on Citi’s earnings call questioned when the incentives would end and investors would start to see a return. “In general, the promotional balances, while a range of offers vary, they do go up to 21 months ... Don’t freak out. It doesn’t mean it’s going to be 21 months before we see growth in anything,” Chief Financial Officer John Gersprach told analysts.

"Worse Than Anticipated": JPM, Citi Just Boosted Their Loan Loss Reserves By The Most In 4 Years - Four months ago, when looking at the latest S&P/Bankcard data, we first reported that credit card defaults had surged the most since June 2013, a troubling development which ran fully counter to the narrative that the economy was recovering and the US consumer's balance sheet was improving. The troubling deterioration prompted Moody's to pen its own report titled "Spike in Charge-off Rates Indicates a Slide in Underwriting Standards" and as Moody's analyst Warren Kornfelf wrote, the steep increase in credit card charge-off rates in 1Q’17 and 4Q’16 was the largest since 2009, and indicates that "strong underwriting standards in place since the financial crisis have deteriorated, potentially rapidly." Then, following JPM's results earlier today, we showed that this concerning trend had persisted, with JPM reporting the second highest net credit card chargoffs in Q3 since the summer of 2013, and only a modest decline since the previous quarter. It wasn't just the charge offs however: there was another red flag in JPM's results this morning in addition to the sharp 27% drop in the bank's FICC revenues: with charge-offs spiking, it was only a matter of time before both JPM and its peers was forced to provision substantially greater credit losses ahead of potential pain in the future, and as we showed first thing this morning, JPM did just that when it hiked its credit loss provision from $1.2 billion in Q2 to $1.45 billion in Q3.

FACTBOX-Insurers and reinsurers count the costs of recent hurricanes, quakes  (Reuters) - Losses from Hurricane Maria and other recent natural disasters, including hurricanes Irma and Harvey, the Mexico City earthquake and other events, have led global insurers and reinsurers to issue profit warnings. Below are statements from insurers and reinsurers in the wake of the catastrophes (in alphabetical order): AIG American International Group Inc said it expected to book pre-tax catastrophe losses of about $3 billion in the third quarter mainly related to hurricanes Harvey, Irma and Maria. The company estimated pre-tax losses of about $1 billion each from Harvey and Irma, up to $700 million from Maria and additional catastrophe losses, including earthquakes in Mexico, of about $150 million. ALLSTATE Allstate Corp, the second-largest U.S. homeowners’ insurer based on premiums collected, estimated pre-tax catastrophe losses of $593 million, net of reinsurance recoveries, for August. BEAZLEY Lloyd’s of London insurer Beazley said losses from hurricanes Harvey, Irma and Maria and a series of earthquakes in Mexico would reduce its 2017 earnings by about $150 million. CHUBB U.S. property and casualty insurer Chubb Ltd estimated after-tax losses of up to $1.28 billion from hurricanes Harvey and Irma. It expects insured losses of about $520 million from Harvey and $640 million to $760 million from Irma after tax. The world’s largest listed property and casualty insurer estimated the maximum net insurance and net reinsurance losses related to Hurricane Maria would be about $200 million after tax for the third quarter. HANNOVER RE German reinsurer Hannover Re said it could miss its 2017 profit target because of claims from the natural disasters, its first such warning since the 2008 financial crisis. (list of ~ 20 insurers follows)

FDIC's Hoenig warns of deposit insurance downside: Moral hazard --The Federal Deposit Insurance Corp.’s second-highest official warned Wednesday that the deposit insurance system, while providing customers with "a sense of security," still poses moral hazard risk that can result in riskier behavior on the part of banks. “Deposit insurance, like any insurance system, inherently invites its own abuse,” FDIC Vice Chairman Thomas Hoenig said in a speech Wednesday in Quebec City at an annual meeting of the International Association of Deposit Insurers. “That can cause unintended serious destabilizing effects on an economic system.”

GOP sharpens focus on credit bureau fixes  -- The bipartisan congressional response to the Equifax breach took another step forward Thursday when two key Republicans sharpened their focus on regulatory gaps in the oversight of credit bureaus.  Senate Banking Committee Chairman Mike Crapo sent a letter to the heads of the federal bank regulators asking whether they should be further authorized to supervise the credit reporting agencies. Meanwhile, Rep. Patrick McHenry, R-N.C., vice chairman of the Financial Services Committee, introduced legislation that would create uniform federal cybersecurity standards for credit bureaus.

Should CFPB have more power over credit reporting agencies? - While Republicans have argued that the Consumer Financial Protection Bureau's oversight is too broad and needs to be dialed back, Director Richard Cordray is using the Equifax data breach to float the idea of expanded agency authority over the credit reporting bureaus. The CFPB is the only regulator with supervisory examination authority over Equifax, Experian and TransUnion, which were designated in 2012 as "larger participants" in the credit reporting market. But the primary regulator in charge of enforcing cybersecurity standards of nonbanks is the Federal Trade Commission, which lacks direct supervisory authority. Cordray has suggested that Congress needs to address that regulatory gap."We are going to have to work with Congress to put in place a better framework on data security," Cordray told CNBC in a recent interview "It's not enough to have enforcement come after the fact. There has to be preventive supervision authority in place and there has to be more robust standards to be met by these companies."That could be done two ways, either giving the CFPB the power to examine the credit reporting agencies for cyber and data security or giving such authority to the FTC, which currently lacks any infrastructure to conduct supervisory exams. In the interview, Cordray signaled that his agency should handle it. When asked about having CFPB examiners embedded inside the credit bureaus, Cordray said, "That is exactly what I'm suggesting has to be the case, and the companies should welcome it."

  OCC's Noreika urges Senate to vacate CFPB arbitration rule - Acting Comptroller of the Currency Keith Noreika urged senators on Friday to overturn the Consumer Financial Protection Bureau's arbitration rule, arguing in an op-ed column that allowing consumers to sue financial institutions in class actions would raise credit costs and harm small banks.In an editorial in The Hill newspaper, Noreika wrote that the rule should not go into effect unless a ban on arbitration clauses results in better treatment for consumers. "Senators must ask whether the rule achieves its intended purpose of increasing compliance with consumer protection laws and improving the treatment of consumers without creating other significant harm and increasing costs," Noreika wrote. "In my view, the CFPB has failed to provide the data to support that case and failed to disclose the costs to consumers that will likely result from the rule's implementation."The CFPB rule would prohibit financial firms from requiring that consumers use arbitration to settle disputes, freeing them to band together in class-action suits. The arbitration rule,released July 10, is scheduled to go into effect in March.Republicans in Congress have threatened to kill the arbitration rule using the Congressional Review Act, an obscure law that allows Congress to reject an agency's regulation by a majority vote within 60 legislative days of its release. But the Senate has yet to vote on a repeal. Noreika has waged an unusual public fight against the arbitration rule and CFPB Director Richard Cordray, essentially pitting the heads of two regulatory agencies against each other.

  CFPB Issues Payday Lending Rule: Will it Hold, as the Empire Will Strike Back --  Jerri-Lynn Scofield - The Consumer Financial Protection Bureau (CFPB) issued its long-awaited payday lending rule on Thursday, requiring a lender to do an ability to repay test before awarding a loan, and making it more difficult for borrowers to rollover these typically short term, high interest loans. The new rule is the first comprehensive attempt at federal regulation in this area, and would replace the current state-based regulatory patchwork under which some states already have controls on payday lending in place. The payday lending industry preys on the poorest financial consumers. One factor that has allowed it to flourish is current banking system’s inability to provide access to basic financial services to a shocking number of Americans. Approximately 38 million households are un or underbanked– roughly 28% of the population. Now, a sane and humane political system would long ago have responded with direct measures to address that core problem, such as a Post Office Bank (which Yves previously discussed in this post, Mirabile Dictu! Post Office Bank Concept Gets Big Boost and which have long existed in other countries.) Regular readers are well aware of who benefits from the current US system, and why the lack of institutions that cater to the basic needs of financial consumers rather than focusing on extracting their pound(s) of flesh is not a bug, but a feature. So, instead, the United States has a wide-ranging payday lending system. Which charges borrowers up to 400% interest rates for short-term loans, many of which are rolled over so that the borrower becomes a prisoner of the debt incurred.  The New York Times reported on Thursday: The payday-lending industry is vast. There are now more payday loan stores in the United States than there are McDonald’s restaurants. The operators of those stores make around $46 billion a year in loans, collecting $7 billion in fees. Some 12 million people, many of whom lack other access to credit, take out the short-term loans each year, researchers estimate. Well, few regular Naked Capitalism readers will be surprised to find some of the sleaziest of swamp creatures: our old private equity friends.  The biggest companies in the payday industry are nearly all owned by private equity firms. Mainstream banks and publicly traded companies, scared off by a regulatory crackdown and bad publicity, have left the market in recent years. The largest remaining chain, Advance America, which has 2,100 locations in 28 states, is owned by Grupo Salinas, a Mexican conglomerate.

CFPB Finalizes Payday Lending Rule | The National Law Review - On October 5, 2017, the CFPB finalized its long-awaited rule on payday, vehicle title, and certain high-cost installment loans, commonly referred to as the “payday lending rule.” The final rule places ability-to-repay requirements on lenders making covered short-term loans and covered longer-term balloon-payment loans. For all covered loans, and for certain longer-term installment loans, the final rule also restricts attempts by lenders to withdraw funds from borrowers’ checking, savings, and prepaid accounts using a “leveraged payment mechanism.” In general, the ability-to-repay provisions of the rule cover loans that require repayment of all or most of a debt at once, such as payday loans, vehicle title loans, deposit advances, and longer-term balloon-payment loans. The rule defines the latter as including loans with a single payment of all or most of the debt or with a payment that is more than twice as large as any other payment. The payment provisions restricting withdrawal attempts from consumer accounts apply to the loans covered by the ability-to-repay provisions as well as to longer-term loans that have both an annual percentage rate (“APR”) greater than 36%, using the Truth-in-Lending Act (“TILA”) calculation methodology, and the presence of a leveraged payment mechanism that gives the lender permission to withdraw payments from the borrower’s account. The rule’s ability-to-repay test requires lenders to evaluate the consumer’s income, debt obligations, and housing costs, to obtain verification of certain consumer-supplied data, and to estimate the consumer’s basic living expenses, in order to determine whether the consumer will be able to repay the requested loan while meeting those existing obligations. As part of verifying a potential borrower’s information, lenders must obtain a consumer report from a nationwide consumer reporting agency and from CFPB-registered information systems. Lenders will be required to provide information regarding covered loans to each registered information system. In addition, after three successive loans within 30 days of each other, the rule requires a 30-day “cooling off” period after the third loan is paid before a consumer may take out another covered loan.

CFPB Payday Loan Rule Hurts Consumers in Urgent Need: Statement by CEI expert -- The Consumer Financial Protection Bureau today unveiled its long-awaited rule against short term "payday" loans. CEI Senior Fellow John Berlau criticized the new rule, warning it will do more harm than good."The CFPB's new rule against short-term lending, including 'payday loans,' will do more to stop people from getting urgently needed funds than it will to help consumers avoid prolonged debt. Imposing a new 'ability to repay' standard is wholly inappropriate for small-dollar loans, because if borrowers truly had an immediate 'ability to repay,' they would most likely use a credit card instead of getting a loan."The CFPB says it will provide some exemptions for short-term loans provided by credit unions​ and community banks, but it remains to be seen if those exemptions will be workable given the rule's other restrictions." Consumers have said in multiple surveys that they were satisfied with their loan products, and they reported repayment difficulties only in a small minority of cases. We have argued that the CFPB could simply have issued rules improving disclosure instead of limiting options for lower-income consumers and people who need cash in emergency circumstances.

Payday lending rule may lure in lurking loan sharks | TheHill: The Consumer Financial Protection Bureau (CFPB) published its final rule addressing so-called payday loans as well as certain other extensions of credit to consumers on Thursday. These loans are usually small, very short-term (often just a few weeks) and carry a very high effective interest rate after all fees are taken into account. Troubles can arise for those borrowers who pay off a payday loan and the related interest and fees by taking out a subsequent loan for an even larger amount, trapping the borrower in a debt cycle they often can escape only through a personal bankruptcy. The stated purpose of the CFPB rule, quite simply, is to protect consumers against falling into these debt traps.  Whether the rule will be effective, though, is an open question. The rule applies to three types of “covered short-term loans:”

  • Short-term loans maturing in 45 days or less
  • Longer-term (more than 45 days) balloon-payment loans; that is, the loan is paid in full when it comes due or the loan agreement requires at least one substantial down payment of the loan.
  • Longer-term loans with a cost of credit exceeding 36 percent that either have a balloon-payment feature or the lender is authorized to obtain repayment by initiating a transfer of funds from the borrower’s bank account.

An essential feature of the new rule is a complex “ability-to-repay” requirement. That is, it will be “an unfair and abusive practice” for banks and other types of lenders to make a covered short-term loan without the lender first making a reasonable determination that the borrower has the ability to repay the loan. The rule sets out the steps the lender must follow to make this determination. Portions of the rule will become effective 60 days after it is published in the Federal Register; other provisions will take effect 21 months after publication. Given its complexity, full implementation of the rule is likely to be delayed and subject to numerous interpretations.

Payday lenders are finding ways around Google’s ad ban -- The payday loan chain ACE Cash Express had a brief moment of notoriety in 2014, when an ill-advised illustration from an internal training manual slipped into public view. Surprisingly forthright, the graphic depicted the cycle of debt for which payday lenders frequently get criticized. It suggested that Irving, Texas-based ACE was seeking to trap its customers on a borrowing treadmill. Almost two years later, when Google banned ads for U.S. loans with annual percentage rates above 36%, the tech giant cited the payday lending debt cycle as a key reason. Google’s 2016 ban drew praise from consumer advocates and civil rights groups, along with jeers from one then-executive at ACE Cash Express.  “Extremely disappointed,” wrote Manjush Varghese, who was then the vice president of e-commerce at ACE. “I have been a long-standing, responsible advertiser on Google.” But as it turned out, there was less to the Google ban than initially met the eye. A year after it took effect, American Banker found numerous ads on Google from ACE Cash Express and other payday lenders, often on the first page of search results. Some of the ads appeared to be clear violations of the search engine’s policy. Other ads appeared to be exploiting a loophole in Google’s ad ban, which has not been previously reported. This loophole enabled payday lenders to continue advertising on the site as long as both the ad itself and the specific page where the user landed after clicking on the ad did not mention high-cost loans.

Regulatory playing field for banks, nonbanks is anything but level -  The Consumer Financial Protection Bureau was given authority to examine both bank and nonbank mortgage lenders, the idea being that nonbanks should not escape federal supervision because they were not FDIC-insured. But the fact is that 99% of banks (those with assets of less than $10 billion) are exempt from CFPB supervision. The same cannot be said about small, independently operated nonbanks. It is time for officials to pursue policies that truly make the playing field level so that all mortgage providers — nonbanks and banks — can continue to drive the housing recovery. That is the central conclusion of a report the Community Home Lenders Association released last month on “independent mortgage bankers” (also known as IMBs). First, it is important to understand the definition of “independent mortgage bankers.” Paradoxically, they are not banks at all, in the sense we normally think of banks, since IMBs are not FDIC-insured depository institutions. Instead, IMBs are nonbanks that typically fund their operations through a combination of warehouse loans and putting their own personal capital at risk.  IMBs are generally small businesses, with mortgage lending and servicing being their sole or primary business. But they are referred to as “mortgage bankers” because, unlike mortgage brokers, they fund their own mortgage loan originations — and then typically they sell off their loans into the secondary market. In 2016, IMBs originated 85% of Federal Housing Administration mortgages, up from 50% in 2010. The CHLA report also includes data showing that the share of Ginnie Mae loans originated by IMBs exploded from 12% in 2010 to 73% last year. These statistics are reinforced by a recent Urban Institute report that highlights the “growing importance of nonbanks in the Mortgage Market” and states that “they have also played an important role in easing access to mortgage credit.”

B of A beefs up rep and warrant reserves ahead of mortgage settlement -- Bank of America set aside $100 million in its reserves for representation and warranty claims ahead of a pending settlement to resolve legacy mortgage issues. B of A has approximately $2 billion in reserves set aside for various rep and warrant claims and the additional $100 million is part of $200 million of new reserves added during the third quarter. The "reps and warranty provision…was the result of advanced negotiations with certain counterparties to resolve several outstanding legacy issues," Chief Financial Officer Paul Donofrio said Friday during a conference call with analysts. Donofrio declined to specify the entity B of A is negotiating the settlement with. But his wording suggests the settlement is being negotiated with another mortgage market participant, rather than a regulator, and likely involves loans and mortgage-backed securities from the Countrywide business B of A acquired in 2008. Mortgage activities in Bank of America's consumer banking division reported income of $142 million during the third quarter, down 52% from a year ago primarily due to lower loan production income and a drop in the valuation of its mortgage servicing rights. B of A originated nearly $13.2 billion in first mortgages during the quarter, down 22% from a year ago. About 80% of first mortgage originations will be held on balance sheet, continuing a strategy of holding onto most of its loan production.

How Trump's health care moves could impact lenders - The Trump administration on Thursday delivered two powerful blows to the Affordable Care Act, announcing that it would end controversial cost-sharing reduction (CSR) payments to health insurers even as the president signed an executive order meant to eliminate many of the requirements that the ACA imposed on health insurance policies.While the obvious impact of these moves is likely to be on consumers in the nongroup insurance market, they also have the potential to carry very real consequences for anybody in the business of extending credit to consumers. First, a little background.  In the best-case scenario, eliminating the CSR payments, which were designed to compensate insurers for providing discounts to their lowest-income customers, will cause premiums to spike. In the worst case, insurance companies will simply withdraw from the ACA exchanges entirely, leaving many consumers without any options at all for policies purchased with federal subsidies.  Some federal agencies, including the Congressional Budget Office and the Congressional Joint Committee on Taxation have questioned whether an insurance policy that doesn’t protect a consumer from catastrophic medical bills can rightly be called “insurance” at all.And it’s more than just a debate over semantics, because there is good evidence for what happens to people when they get sick and don’t have that kind of protection: They go bankrupt. This is where lenders come in. When people start facing serious financial straits, the pattern is well known. They max out their available credit, then they stop making payments on it. Then comes default on the car loan. Finally, the mortgage payments stop. At that point, the lenders find themselves in court, trying to salvage whatever they can of assets that are no longer performing.

 Trump wants to curtail flood insurance in flood-prone areas -  President Donald Trump proposed ending federal flood insurance for new homes in areas most at risk of flooding, a change that could curtail new construction in vast parts of Florida, Louisiana and along the Eastern Seaboard.   Trump’s plan would radically overhaul the program created in 1968 to help protect homeowners who live along coasts or near rivers. The idea, sent by the White House to Congress, created an unlikely set of responses: Home builders warned it could stifle the economy while climate activists, who have battled Trump, called the idea smart.  On Wednesday Mick Mulvaney, the director of White House Office of Management and Budget, sent a letter to Congress calling for changes to the taxpayer-subsidized National Flood Insurance Program, which is $25 billion in debt thanks to ever-worsening storms. Mulvaney’s proposals included preventing homes built in flood plains after 2020 from obtaining insurance under the program. Those homes could instead seek private coverage, which is often prohibitively expensive -- if it’s available at all. The National Association of Home Builders said it strongly opposed the idea, arguing it would "harm local communities and impair economic growth." "It would simply prevent home builders from being able to provide safe and affordable housing," the association’s chairman, Granger MacDonald, said in a statement. "Why does OMB needlessly propose to penalize new construction?" The federal government provides flood insurance to those at risk through a program that’s drawn criticism for subsidizing construction of homes vulnerable to damage or destruction. The White House plan would continue the insurance for existing homes within the 100-year flood plain, but discontinue it for any new homes in those zones. The proposal requires action by Congress, which have struggled to make radical changes to the program.

House approves disaster relief bill without contentious construction ban - — The House approved a $36.5 billion emergency funding bill on Thursday to provide disaster relief for areas hard hit by hurricanes and wildfires, including providing $16 billion in debt relief for the National Flood Insurance Program so it can continue to pay claims for flood damage.The Trump administration had initially called for restrictions on new construction in flood zones as part of the aid package, but that provision was stripped from the bill before it was approved by a 353-69 vote.Office of Management and Budget Director Mick Mulvaney initially suggested that the flood insurance program would stop insuring newly constructed homes and commercial properties in flood-prone areas starting Jan. 1, 2021, but the provision ran into resistance from the real estate lobby. "We strongly oppose the new proposal by OMB Director Mulvaney to phase out new NFIP policies for newly-constructed homes," the National Association of Home Builders said in a statement last week. The House Financial Services Committee considered similar restrictions on new construction during the summer but they were also scuttled. The homebuilder group said it remains concerned that such a plan will come up again.

FHA lenders may soon be on the hook for more water quality tests - Lenders could be responsible for water quality issues affecting borrowers and properties if the Federal Housing Administration follows through with its response to an inspector general's report. "Single-family will leverage its strong training program for both lenders and appraisers to ensure the topic of safe and potable water is given appropriate attention in FHA-related lender and appraiser training," said Gisele Roget, deputy assistant secretary for single-family housing, in a written response to the Office of Inspector General's report. The Department of Housing and Urban Development OIG reviewed a sample of loans for properties where public water utilities had issued notices of lead contamination to the water supply. None of the appraisals accompanying the loan files disclosed the contamination risk or contained evidence of water testing, despite existing HUD policy that lenders ensure properties have access to safe water supplies to qualify for FHA mortgage insurance. The OIG had called for more drastic retroactive measures in the report. "We recommend that HUD direct the applicable lenders to provide evidence that the properties for 1,383 FHA-insured loans had a safe and potable water source, or that the appraisers had not notified them of the water quality issue on their appraisals," said regional IG David Kasperowicz in the report.

FHA still weighing premium cuts: Carson - — The Federal Housing Administration forward mortgage program is "doing extremely well," and recent changes to its reverse mortgage program “will stop the bleeding” in losses to the agency, Housing and Urban Development Secretary Ben Carson said Thursday.Speaking at a House Financial Services Committee hearing, Carson said the FHA fund is “very close” to its statutory 2% minimum but performing adequately. He said the agency has delayed making any major changes to the program while it waits for the nomination and confirmation of key appointments.  "It has been a real ordeal getting people into place," Carson said. President Trump recently nominated Brian Montgomery to serve as the new FHA commissioner, a post he held during the George W. Bush administration.But HUD is still waiting for the White House to send his nomination papers up to the Senate Banking Committee.  One of the big questions likely to fall to Montgomery is whether to cut FHA premiums. Shortly before President Obama's term ended, HUD proposed to cut the FHA's annual insurance premium by 25 basis points to 60 basis points. But the Trump administration put that cut on hold so it could study that issue.

Credit availability increasing most outside the government sector - Slightly looser underwriting outside the government sector is primarily responsible for the latest increase in credit availability.Credit availability increased to 181.4 in September from 108.2 in August and 167 a year ago, according to the Mortgage Credit Availability Index, which is based on the Mortgage Bankers Association's analysis of data from mortgage technology provider Ellie Mae."Mortgage credit availability increased in September due to continuing updates to conforming loan programs as well as agency jumbo programs that have been phased in over the last few months," Lynn Fisher, the MBA's vice president of research and economics, said in a press release. The components of the index that measure loan programs outside the government sector generated the strongest consecutive-month gains of around 1.4% or 1.5% in September.Underwriting loosening in the jumbo sector was on the low end of that range in the past month but over the course of the year it's been the sector where credit availability has increased the most. "For the year to date, the supply of credit has increased only modestly in the non-jumbo space while it has expanded significantly among jumbo programs," said Fisher.

4 Harvey-hit neighborhoods that need the most help rebuilding -- Of the 39 counties included in the Hurricane Harvey presidential-declared disaster areas, property damage varied across the different neighborhoods, with some experiencing much heavier destruction.Significant property damage, where the majority of buildings were destroyed or showed signs of major damage, was concentrated to 2% of neighborhoods, or 26 tracts, according to research conducted by SP Group.  Bryants Marsh, Plum Grove, Sheldon-Channelview and Wharton-Hungerford were among the Texas neighborhoods hit hardest by Harvey, and represent the areas in most need of federal, state and local assistance for property repair and rehabilitation costs, such as the U.S. Department of Housing and Urban Development's Community Development Grant Assistance Disaster Recovery. These areas were considered most in distress in terms of higher unemployment and poverty, and lower income and educational attainment levels.Harvey flooded low-, middle- and high-income areas, so communities with better resources, such as Houston, will likely recover more quickly overall. The same can't be said for lower-income families."The storm will have a long-lasting impact on low-income families, particularly new homeowners who were just beginning to build home equity or those who were not protected with flood insurance and won't have the financial means to rebuild or repair. Homeowners face rebuilding costs and, in many instances, the cost of temporary relocation," according to the Urban Institute.Flood insurance may also strengthen the burden on lower-income households, as properties not previously listed in the floodplain are deemed high-risk, adding more to monthly bills and paving the way for possible mortgage delinquencies.Since Harvey didn't just affect low-income areas, its neighborhoods in most need of assistance are not confined to a specific region. "Unlike other research that was done on Katrina, where you could see that where people were hardest hit there were concentrations of poverty and distress, from Harvey, it was more spread out, and this may be due to how Texas plans its land use ultimately,"

After Hurricanes, Public Housing May Never Get Rebuilt: After Hurricanes Irma and Maria, local officials in the U.S. Virgin Islands are scrambling to provide shelter and housing to displaced residents. If history is any indication, the poorest people will wait the longest -- and maybe forever -- for a new place to call home on the islands. Parts of the islands look like “a napalm bomb landscape,” says Myron D. Jackson, president of the U.S. Virgin Islands Senate. “It’s almost like Irma and Maria were personal bandits that really invaded homes and threw the contents out windows and doors," he says. About 90 percent of the Virgin Islands' buildings have sustained damages, including several public housing complexes, according to the office of U.S. Virgin Islands Congresswoman Stacey Plaskett. About 13,000 structures are roofless. Although the back-to-back Category 5 storms affected residents of all income levels, officials are particularly worried about the damage to Estate Tutu, a high-rise apartment building on St. Thomas with roughly 300 public housing tenants. In the past, when powerful storms destroyed public housing in other parts of the United States, it took years -- if ever -- before the government replaced those units. “There’s a lot of anecdotal evidence that after disasters happen, some of the affordable housing stock just never gets replaced,” says Sarah Mickelson, director of policy for the National Low Income Housing Coalition. “We saw this happen in Louisiana and Mississippi after Katrina, and we saw it in Texas after Ike.” Those storms made some public housing complexes uninhabitable, forcing cities to raze what remained. It took years for Galveston, Texas, and New Orleans to replace their public housing, and in the process, they lost large shares of their low-income residents. In Galveston, Texas, some elected officials resisted rebuilding hundreds of public housing units at all because, they said, it would lower real estate values, breed crime and attract people who wouldn't be able to find work. 

Over 172,000 homes at risk from wildfires in Napa and Santa Rosa - A total of 172,117 homes with a combined reconstruction cost value of over $65 billion are at some level of risk from the California wildfires blazing through the metropolitan areas of Napa and Santa Rosa, according to CoreLogic's hazard risk analysis. Statewide, about 9.1 million homes with a combined reconstruction cost value of $3.1 trillion are at some level of risk from wildfires within California. About 11,000 homes, or 6% of the total at risk in Napa and Santa Rosa with a projected reconstruction cost value of over $5 billion, could suffer significant damage, falling in "high" and "extreme" risk categories, according to CoreLogic's Wildfire Risk Score data. But, the majority of homes in these areas, totaling 161,059, or 94%, fall in "low" or "moderate" risk categories  Notably, wildfire can expand to adjacent properties and cause heavy damage even when the property in question may not be considered high risk, according to CoreLogic. In Santa Rosa, 2,705 homes, with a reconstruction cost value of over $1.2 billion, are in extreme risk of susceptibility to wildfire damage, while 1,564 homes, totaling over $742 million in reconstruction cost value are at risk of extreme damage.About 1,436 properties in Napa, and 8,355 homes in Santa Rosa, are considered in moderate or high risk of damage from the wildfires.CoreLogic's analysis was calculated based on California homes within two core based statistical areas and on five active fires. Three are in Napa: Patrick, Atlas and Tubbs, and two are in Santa Rosa: Nuns and Pocket.

Foreclosure activity reaches lowest point in over 11 years -- U.S. foreclosure activity dropped to a low not seen since 2006, according to Attom Data Solutions. There were 191,824 properties with foreclosure filings during the third quarter, down 35% year-over-year and down 13% from the previous quarter. The active filings include default notices, scheduled auctions or bank repossessions and are at the lowest level seen since the second quarter of 2006. The third quarter marked the fourth consecutive quarter where foreclosure activity has tracked below the prerecession average of 278,912.  "Legacy foreclosures from the high-risk loans originated between 2004 and 2008 have largely been cleared out of the distressed market pipeline," said Daren Blomquist, senior vice president at Attom, in a press release. "Meanwhile, loans originated during the housing boom of the last five years are posting foreclosure rates below historic averages, with the notable exception of FHA loans originated in 2014, which have the highest foreclosure rate of any FHA loan vintage since 2009 — 29% above the historic average for FHA loans although still 55% below the peak in 2007." In the third quarter, lenders initiated the foreclosure process for 93,724 properties, signifying that foreclosure starts are down 7% from the previous quarter and 16% from a year ago. Foreclosure originations hit their lowest level since the second quarter of 2005, the earliest data was collected. Opposite of the national trend, 51 of 217 analyzed metropolitan areas saw increases in foreclosure starts, including Cleveland with a 29% increase, Columbus, Ohio, with a rise of 23%, and Denver, where they were up 12%.

 Mortgage defaults increase in oil-patch cities: CoreLogic - Mortgage delinquencies in cities where the economy is dependent upon the oil industry are on the upswing, even as nationwide default rates remain near 10-year lows, CoreLogic said.For July, 4.6% of all mortgages were at least 30 days or more late on their payment,compared with 4.5% in June and 5.5% in July 2016, according to CoreLogic's Loan Performance Insight Report.Seriously delinquent mortgages, defined as at least 90 or more days late, were 1.9% of all outstanding loans in July, unchanged from June and down from 2.5% in June 2016."Even though delinquency rates are lower in most markets compared with a year ago, there are some worrying trends," said CoreLogic President and CEO Frank Martell in a press release."For example, markets affected by the decline in oil production or anemic job creation have seen an increase in defaults. We see this in markets such as Anchorage, Baton Rouge and Lafayette, La., where the serious delinquency rate rose over the last year."Alaska was the only state where the seriously delinquent rate increased year-over-year, to 1.1% from 1%. North Dakota was flat at 0.9%, while for Louisiana, it fell to 3.4% from 3.5%.The 30-days-or-more delinquency rate in Anchorage increased to 3.5% from 3.1% last July, while the seriously delinquent rate increased to 1.2% from 1%.Baton Rouge's seriously delinquent rate increased to 3 .6% from 3.1%, while Lafayette's seriously delinquent rate increased to 3.2% from 2.9%. The seriously delinquent rate for Hammond, La., increased to 3.2% from 3%.The other two cities with year-over-year increases in borrowers 90 days or more late with their payments were Victoria, Texas, at 2%, up 20 basis points, and Casper, Wyo., at 1.8%, up 10 basis points.

Leading Index for Commercial Real Estate Declines in September --Note: This index is possibly a leading indicator for new non-residential Commercial Real Estate (CRE) investment, except manufacturing.  From Dodge Data Analytics: Dodge Momentum Index Declines In September: The Dodge Momentum Index fell in September, moving 8.4% lower to 116.4 (2000=100) from the revised August reading of 127.1. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. Both components of the Momentum Index declined in September. The institutional building component fell 11.5% from August, while the commercial building component fell 6.1%. While the overall Momentum Index has lost ground for four consecutive months, this should not be seen, in and of itself, as a predictor of a turn in building markets. Prior to the previous peak of the Momentum Index in January 2008 it had suffered similar significant declines, only to rebound and post strong gains in subsequent months in line with overall economic growth. Similarly, the Momentum Index posted healthy gains from late-2016 through early 2017. Economic growth remains solid, and building market fundamentals are supportive of further growth in construction activity.

Opinion: How lenders can help borrowers with student loans buy homes -- Student debt has risen steadily in recent years, and totals $1.4 trillion in 2017. That's nearly three times what was owed in 2006, making student loan debt the largest non-housing debt class today. Not surprisingly, paying hundreds of dollars a month toward student loan debt puts enormous financial pressure on graduates. This debt burden is one of the reasons that millennials are delaying life choices such as marriage, parenthood, and buying their first home. In fact, millennials have one of the lowest homeownership rates for their age group of any in history. But it's not just millennials. Anyone with student loan debt could be affected. While student debt may burden graduates for many years, obtaining a college degree still increases one's earning potential and the likelihood of owning a home, according to Fannie Mae's National Housing Survey. A bachelor's degree is still a good investment, even when financing that education requires student loans. Given these facts, how can the mortgage industry ease the burden of student debt while also helping graduates safely achieve homeownership?To address this challenge, one area of opportunity is home equity. There is $8.4 trillion in home equity in the U.S. That's a resource that homeowners can leverage to pay off student loan debt — either their own or debt they've co-signed. Fannie Mae introduced a Student Debt Cash-Out Refinance in 2016, which allows homeowners with 20% equity to refinance their mortgage and use the proceeds to pay down or pay off a student loan.  Now in 2017, building on what we've learned, some additional updates went into effect this year.

Why more millennials with student debt are qualifying for mortgages - A recent push by Fannie Mae to enable more millennials who are burdened by student debt to buy homes appears to be having its intended effect. Bankers said that they are finding it easier to qualify young homebuyers as a result of the policy changes.Fannie announced the new rules back in April. Perhaps the most consequential change was a revision to the formula that banks use to calculate a borrower’s debt-to-income ratio, which is a gauge of the person’s ability to make monthly payments.Under the previous guidance, a lender would consider the higher of either a borrower’s amortizing student loan payment, or 1% of their student loan. A borrower whose monthly payment was reduced from $500 to $100 on an income-based repayment plan might be rejected under those rules because the lender had to use a more conservative measure than the actual monthly payment.Under the revised rules, the lender can use the borrower’s actual monthly student loan payment for the purpose of calculating the debt-to-income ratio. Fannie also expanded a cash-out refinance option, which may enable some existing homeowners to pay off their student loans. In addition, the government-sponsored enterprise allowed mortgage lenders to take into account the fact that borrowers’ parents sometimes cover certain nonmortgage debt payments.

MBA: Mortgage Applications Decrease in Latest Weekly Survey - From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey Mortgage applications decreased 2.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 6, 2017. .. The Refinance Index decreased 4 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 0.1 percent compared with the previous week and was 7 percent higher than the same week one year ago. ...  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) increased to 4.16 percent from 4.12 percent, with points decreasing to 0.44 from 0.45 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.  The first graph shows the refinance index since 1990.

CoreLogic: House Prices up 6.9% Year-over-year in August --   The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic US Home Price Report Shows Prices Up 6.9 Percent in August 2017 August National Home Prices Home prices nationwide, including distressed sales, increased year over year by 6.9 percent in August 2017 compared with August 2016 and increased month over month by 0.9 percent in August 2017 compared with July 2017. ...The CoreLogic HPI Forecast indicates that home prices will increase by 4.7 percent on a year-over-year basis from August 2017 to August 2018, and on a month-over-month basis home prices are expected to increase by 0.1 percent from August 2017 to September 2017. CR Note: The YoY increase has been in the 5% to 7% range for the last couple of years. The year-over-year comparison has been positive for over five consecutive years since turning positive year-over-year in February 2012.

Michigan Consumer Sentiment: October Preliminary Surges, Highest Since '04 -  The University of Michigan Preliminary Consumer Sentiment for October came in at 101.1, up 6.0 from the September Final reading of 95.1 and its highest since 2004. Investing.com had forecast 95.1.  Surveys of Consumers chief economist, Richard Curtin, makes the following comments: Consumer sentiment surged in early October, reaching its highest level since the start of 2004. The October gain was broadly shared, occurring among all age and income subgroups and across all partisan viewpoints. The data indicate a robust outlook for consumer spending that extends the current expansion to at least mid 2018, which would mark the 2nd longest expansion since the mid 1800's. While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected. This "as good as it gets" outlook is supported by a moderation in the expected pace of growth in both personal finances and the overall economy, accompanied by a growing sense that, even with this moderation, it would still mean the continuation of good economic times. Although such an outlook is typically recorded in the late phase of an expansion, its occurrence is independent of the ultimate length of an expansion. Indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon - which contrarians may consider a clear warning sign of trouble ahead. Nonetheless, consumers anticipate low unemployment, low inflation, small increases in interest rates, and most importantly, modest income gains in the year ahead. It is this acceptance of lackluster growth rates in personal income and in the overall economy that signifies that consumers have accepted, however reluctantly, limits on the pace of improving prospects for living standards. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

  UMich Consumer Sentiment Spikes Above 100 For The First Time Since 2004 --  Despite storms, wildfires, quakes, higher gas prices, and failed Washington policies,Americans are - according to The University of Michigan - their most confident since January 2004. But we think it's clear what is driving the optimism... Americans have never been more confident that that stock market will rally further in the next 12 months... As UMich notes, consumer sentiment surged in early October, reaching its highest level since the start of 2004. The October gain was broadly shared, occurring among all age and income subgroups and across all partisan viewpoints. The data indicate a robust outlook for consumer spending that extends the current expansion to at least mid 2018, which would mark the 2nd longest expansion since the mid 1800's.

Retail Sales increased 1.6% in September -- On a monthly basis, retail sales increased 1.6 percent from August to September(seasonally adjusted), and sales were up 4.4 percent from September 2016. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for September 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $483.9 billion, an increase of 1.6 percent from the previous month, and 4.4 percent above September 2016. ... The July 2017 to August 2017 percent change was revised from down 0.2 percent to down 0.1 percent.This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).Retail sales ex-gasoline were up 1.2% in September.The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 3.8% on a YoY basis. The increase in September was slightly below expectations, however sales in July and August were revised up.

September Retail Sales: Up 1.6% MoM - The Census Bureau's Advance Retail Sales Report for September released this morning showed a slight increase over the August figures. Headline sales came in at 1.6% month-over-month to one decimal. Today's headline number was slightly below the Investing.com consensus of 1.7%. Core sales (ex Autos) came in at 1.0% MoM. Figures were revised going back to August 2016.  Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for September 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $483.9 billion, an increase of 1.6 percent (±0.5 percent) from the previous month, and 4.4 percent (±0.7 percent) above September 2016. Total sales for the July 2017 through September 2017 period were up 3.9 percent (±0.5 percent) from the same period a year ago. The July 2017 to August 2017 percent change was revised from down 0.2 percent (±0.5 percent)* to down 0.1 percent (±0.1 percent)*.Retail trade sales were up 1.7 percent (±0.5 percent) from August 2017, and up 4.7 percent (±0.7 percent) from last year. Gasoline Stations were up 11.4 percent (±1.4 percent) from September 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 10.7 percent (±2.1 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

 Storm-Impacted Retail Sales Disappoint Despite Biggest Spike Since March 2015 - Following August's slump (worst since Jan '16), September's retail sales data was expected to surge 1.7% MoM (thanks in large part to the spike in auto sales) but it disappointed with a 1.6% spike (still the most since March 2015). U.S. retail sales jumped last month by the most in more than two years as motor vehicles lost to hurricanes were quickly replaced and higher prices lifted receipts at gasoline stations, Commerce Department figures showed Friday. The main drivers (as expected) were a surge in gas prices (biggest gain in 4 years) and auto sales (biggest since March 2015). 8 of 13 major retail categories showed a gain. As Bloomberg reports, vehicle sales helped to drive the overall gain at retailers in September. Demand recovered after auto dealerships around Houston, among the top markets for new-vehicle sales, took a hit from Hurricane Harvey a month earlier. Industry figures released last week showed cars and light trucks sold in September at the fastest annualized rate since 2005. The September report also showed the biggest monthly advance in sales at service stations since February 2013, reflecting a spike in gasoline prices as Houston-area refiners were forced to suspend operations in the wake of Harvey. The Commerce Department figures aren’t adjusted for price changes. Excluding motor vehicles and gasoline, September sales increased a more moderate 0.5 percent. While analysts expect tropical storm-related distortions will continue for several months, underlying demand is expected to keep growing. Steady hiring and limited inflation are helping to sustain household spending, the biggest part of the economy.

Consumer Price Index: September Headline at 2.2% - The Bureau of Labor Statistics released the September Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.23%, up from 1.94% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.69%, up fractionally from the previous month's 1.68%.Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.5 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.2 percent. The gasoline index increased 13.1 percent in September and accounted for about three-fourths of the seasonally adjusted all items increase. Other major energy component indexes were mixed, and the food index rose slightly.The index for all items less food and energy increased 0.1 percent in September. The shelter index continued to increase, and the indexes for motor vehicle insurance, recreation, education, and wireless telephone services also rose. These increases more than offset declines in the indexes for new vehicles, household furnishings and operations, medical care, and used cars and trucks.Hurricane Irma had a small impact on data collection in September. Data collection was affected in some areas in Florida.[More…]  Investing.com was looking for a 0.6% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 2.3% for Headline and 1.8% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.

Americans Prove They Don't Give A Cluck About "Cage-Free"; They Just Want Cheap Eggs --"Cage-free" eggs were supposed to be the next big thing in America.  Over the past several years everyone from McDonalds to Wal-Mart has promised to convert to cage-free eggs on the premise that millennial consumers would demand at least 144 square inches of space for the layers of their morning omelettes to frolic in freedom. As it turns out, Americans couldn't seem to care less whether chickens have 144 square inches of freedom or the hisotrical 67 square inches...they just want cheap eggs, hold the bullshit. As Bloomberg points out this morning, egg producers all over the country are scrapping plans for cage-free projects as people simply don't seem to be interested in paying 7.5x more for their "humane" products compared to the same ole eggs they've purchased their whole life.A dozen cage-free large browns cost as much as $2.99 in the Midwest last week, for example, while a carton of Grade AA white conventionals went for as little as 39 cents, according to the U.S. Department of Agriculture.

U.S. household spending for gasoline is expected to remain below $2,000 in 2017 --  The average U.S. household expenditure on gasoline in 2017 is expected to total $1,977, or approximately 2.4% of mean incomes of households, according to projections in EIA’s most recent Short-Term Energy Outlook (STEO). The most recent peak for household gasoline expenditures was $2,715, or 4.0% of household income, in 2008. More recently, average household gasoline expenditures in 2015 and 2016 were near or below $2,000, or 2.5% of total household income. Household gasoline expenditures have fluctuated over the past 10 years as a result of changes in gasoline prices and consumption. When gasoline prices are relatively high, more of a household’s income is devoted to gasoline expenditures, leading to lower gasoline consumption and efforts to improve vehicle fuel economy. Declines in gasoline prices since 2012, however, have led to increases in vehicle travel and increases in gasoline consumption. Based on EIA’s latest STEO projections, continued low gasoline prices are expected to lead to record-high gasoline consumption of 9.3 million barrels per day for 2017.  Lower gasoline prices have contributed to decreasing household gasoline expenditures since 2012, as gasoline consumption has generally increased. STEO estimates that gasoline prices will average $2.48 per gallon in 2017, which is 33% lower than the price in 2012.

 Winter heating costs likely to be higher this winter than last winter -- Most U.S. households can expect higher heating expenditures this winter (October through March) than the last two winters according to EIA's Winter Fuels Outlook. Higher expected winter heating expenditures are the result of both more heating demand because of relatively colder weather and, to a lesser extent, higher fuel prices.  EIA’s projections of heating demand are based on the most recent temperature forecasts from the National Oceanic and Atmospheric Administration (NOAA). NOAA’s forecast anticipates that winter weather will be 13% colder than last winter and closer to the average of the previous 10 winters.  Because weather patterns present great uncertainty to winter energy forecasts, EIA's Winter Fuels Outlook includes projections for 10% colder and 10% warmer scenarios. In the past 10 winters, actual temperatures have been more than 10% colder than NOAA’s September forecast once and warmer than the forecast twice.  The average household winter heating fuel expenditures in EIA’s forecast provide a broad guide to expected heating expenditures. Fuel expenditures for any household also depend on the size and energy efficiency of the home and its heating equipment, indoor temperature preferences, and local weather conditions.  The choice of primary heating fuel varies considerably by region, resulting in regional differences in total expenditures. Natural gas is the most common space heating fuel in every region except the South, where electric heating is more prevalent. Heating oil is much more common in the Northeast than in other regions, while propane is more common in the Midwest.

September Producer Price Index: Final Demand Up 0.4% MoM - Today's release of the September Producer Price Index (PPI) for Final Demand came in at 0.4% month-over-month seasonally adjusted, up from last month's 0.2%. It is at 2.6% year-over-year, up from 2.4% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) came in at 0.4% MoM, up from 0.1% the previous month and is up 2.2% YoY. Investing.com MoM consensus forecasts were for 0.4% headline and 0.2% core. Here is the summary of the news release on Final Demand:The Producer Price Index for final demand advanced 0.4 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.2 percent in August and edged down 0.1 percent in July. (See table A.) On an unadjusted basis, the final demand index increased 2.6 percent for the 12 months ended in September, the largest rise since an advance of 2.8 percent for the 12 months ended February 2012.Within final demand in September, prices for final demand services rose 0.4 percent, and the index for final demand goods climbed 0.7 percent.Prices for final demand less foods, energy, and trade services increased 0.2 percent in September, the same as in August. For the 12 months ended in September, the index for final demand less foods, energy, and trade services advanced 2.1 percent.Hurricanes Harvey and Irma had virtually no impact on data collection efforts or survey response rates, and no changes in estimation procedures were necessary. More…  Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.

Producer Prices Surge At Fastest Rate In Over 5 Years (Thanks To Hurricane Harvey) - Great news America - your standard of living just dropped little more as producer prices rose by 2.6% YoY in September, the fastest rate of increase since Feb 2012 - driven by a surge in energy prices.Some highlights:

  • Final demand producer prices rose 0.4% in September (as expected)
  • Final demand ex food, energy rose 0.4% m/m vs est. up 0.2%
  • Final demand rose 2.6% y/y, matching estimate
  • Final demand ex food, energy rose 2.2% y/y vs est. up 2%
  • Final demand ex food, energy and trade services rose 0.2% m/m
  • Final demand personal consumption rose 0.5% m/m
  • Final demand personal consumption rose 2.3% y/y
  • Health care services (NSA) rose 1.4% y/y; unchanged m/m

However, Energy prices seem to be the biggest driver...The index for final demand services increased 0.4 percent in September, the largest rise since moving up 0.5 percent in April. Over 60 percent of the September advance can be traced to a 0.8-percent increase in margins for final demand trade services. (Trade indexes measure changes in margins received by wholesalers and retailers.) Prices for final demand goods rose 0.7 percent in September, the largest increase since moving up 1.0 percent in January. Over 80 percent of the September advance can be traced to the index for final demand energy, which climbed 3.4 percent. (Higher energy prices were likely the result of  reduced refining capacity in the Gulf Coast area due to Hurricane Harvey.)

US box imports remain buoyant - US box import levels are continuing at “unusually” high levels this month after setting new volume records in July and August, according to the latest Global Port Tracker report produced by the National Retail Federation (NRF) and Hackett Associates. “When imports break records two months in a row, it’s hard to see that as anything other than a good sign about what retailers expect in consumer demand,” said Jonathan Gold, NRF Vice President for Supply Chain and Customs Policy. “Consumers are buying more, and everybody from dockworkers to truck drivers is trying to keep up. We hope this is a sign of a strong holiday season for retailers, shoppers, and our nation’s economy.” Ports covered by Global Port Tracker handled 1.8 million TEU in August, the latest month for which after-the-fact numbers are available. The total was the highest recorded since NRF began tracking imports in 2000, topping the previous record of 1.78 million TEU set just one month earlier in July. “The record before that had been 1.73 million TEU in March 2015,” said the report. “August was up 1.4% over July and 5.6% over August 2016.” September was estimated at 1.65 million TEU, up 3.7% from last year, and October is forecast at 1.72 million TEU, up 2.8%. “While not a record, the October number would be one of only six times in the report’s history that the monthly total has hit 1.7 million TEU or higher,” said the report. November is forecast at 1.62 million TEU, down 1.7% from last year, and December is forecast at 1.59 million TEU, up 1.3%, year on year. “Growth has slowed from the first half of the year, but 2017 is expected to total 19.8 million TEU, topping last year’s previous record of 18.8 million TEU by 5.4%,” said the report.

Port of Long Beach: Record Month, "Looks like retailers are optimistic about the holiday season"  --From the Port of Long Beach: Port of Long Beach Sets Record for SeptemberCargo volume continues to break records at the Port of Long Beach, which moved more containers last month than any September in its history.The 701,619 twenty-foot equivalent units (TEUs) processed in Long Beach for September — up 28.3 percent — also resulted in the Port’s best quarter ever. In the third quarter (July, August and September), the Port of Long Beach handled 2,114,306 TEUs, as volumes swelled 15.9 percent over the same period last year. “Simply put, we are having the best trade months in Port history,” said Harbor Commission President Lou Anne Bynum. “Back-to-school merchandise was strong for us, and it looks like retailers are optimistic about the holiday season.”

LA area Port Traffic: Imports increased, Exports decreased in September --Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).  To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average.  On a rolling 12 month basis, inbound traffic was up 1.0% compared to the rolling 12 months ending in August.   Outbound traffic was down 0.3% compared to the rolling 12 months ending in August. The 2nd graph is the monthly data (with a strong seasonal pattern for imports).Usually imports peak in the July to October period as retailers import goods for the Christmas holiday, and then decline sharply and bottom in February or March depending on the timing of the Chinese New Year.   This was the highest level of imports ever for the month of September - following record imports in July and August - suggesting the retailers are optimistic about the Christmas Holiday shopping season.

Bigger is proving better at the Panama Canal - More than a year after completing the $5.4 billion, nine-year project to expand locks to meet the maritime world’s drive toward mega-ships, the canal is helping reshape trade flows and supply chains. The WSJ’s Costas Paris writes the bigger Panama Canal has handled more than 2,000 vessels that couldn’t fit through the older canal, adding tens of millions of dollars in new tolls and triggering a trading boom at U.S. East Coast ports. The first year of operations has allayed some fears that investments at those ports to cater to the bigger vessels wouldn’t pay off. The bigger Panama Canal instead appears to be drawing business away from the Suez Canal, where weekly capacity on Asia-North America lanes has fallen sharply since the new locks opened. It’s also appears to be drawing some container volume away from the West Coast, a diversion that’s likely to draw more investment beyond the gateways as railroads, truckers and other logistics operators follow the shifting trade.

 The U.S. scrap exporting boom may be going down the tubes. The giant trade surplus that the U.S. enjoys in, well, trash is in a heap of trouble since China imposed new restrictions on “foreign waste” and cracked down on the use of old newspapers, crumpled boxes and empty soda bottles in industrial operations. WSJ Logistics Report’s Erica E. Phillips writes the shift has cut into the outbound volume of an enormous yet little seen U.S export commodity and left recycled materials piling up at the warehouses of American scrap traders. The U.S. exported $16.5 billion in scrap last year, and paper and plastic scrap exports to mainland China topped $2.2 billion. The trash gains new life in China, and sometimes comes back to America reincarnated at factories as new boxes, toys and other goods. Global prices have tanked since the biggest customer effectively withdrew from the market. Traders are looking for new customers, but none can make or trash a market like China.

Balance of trade data is not what you think -- Tyler Cowen directed me to a post by Brad Setser, with this very interesting observation:  I feel I am at risk of becoming a bit shrill on the topic of tax and trade, but it is very hard--in my view--to understand a lot of the trade data without understanding how heavily a lot of trade is influenced by what might be termed chains of tax arbitrage that have nothing to do with conventional tariffs. The trade flows linked to such tax arbitrage are in my view why the U.S. runs a large trade deficit in pharmaceuticals overall, and why most of the deficit is with places like Ireland and Switzerland. And the U.S. would technically run a trade deficit with Puerto Rico if Puerto Rico were disaggregated from the U.S.--even though the ships that sail from the U.S. to Puerto Rico sail to Puerto Rico full and come back almost empty. Welcome to the world of transfer pricing!  Puerto Rico's economy was a disaster area even before Maria, but at least they almost always run trade surpluses:  Seriously, trade data is so misleading that I sometimes wonder if we would be better off not even collecting it, just as we don't waste time calculating the trade balance between North and South Dakota.

Why You Should Care About An Aluminum Supply Scandal In Japan - The scandal concerns a Japanese company, Kobe Steel. Kobe recently announced that for at least a year, it had shipped products to its customers that did not actually meet the agreed-upon strength and durability specifications.“At this time,” tens of thousands of tons of aluminum and copper products shipped between Sept. 1, 2016 and Aug. 31, 2017 have been discovered that “do not comply” with the consumer agreements, the company said. It’s not just that the metal had some kind of undiscovered defect in it, though. Workers inside the company apparently knew some of the metal wasn’t up to spec — but falsified their data.“Data in inspection certifications had been improperly rewritten,” the company’s statement says, an issue that came to light “following self-inspections and emergency quality audits” of the products in question.An executive for the company said that the fabrication was found in all four of the company’s Kobe-area plants, in conduct that was “systematic” and had been going on for up to a decade, Bloomberg reports. Kobe Steel is in the business of selling materials and components to the more than 200 companies that use Kobe Steel in their products every day. As Bloomberg points out, just about every major automaker in the country is on that list. General Motors and Ford are both Kobe customers, as are pretty much all of the Japanese automakers: Honda, Mazda, Mitsubishi, Nissan, Subaru, and Toyota are all on the list, among others. When carmakers order metal of a certain type, durability, thickness, and composition, they do so because it’s going to serve a specific purpose in their vehicles. And all those companies now say they’re digging deep to find out what vehicles the faulty products went into, and trying to suss out what, if anything, needs to be done. Kobe Steel products are also used directly or through partnerships in the manufacture of some Hitachi trains, certain Boeing jets, and even rockets used by Japan’s space agency.

The Coming Software Apocalypse --There were six hours during the night of April 10, 2014, when the entire population of Washington State had no 911 service. People who called for help got a busy signal. One Seattle woman dialed 911 at least 37 times while a stranger was trying to break into her house. The 911 outage, at the time the largest ever reported, was traced to software running on a server in Englewood, Colorado. Operated by a systems provider named Intrado, the server kept a running counter of how many calls it had routed to 911 dispatchers around the country. Intrado programmers had set a threshold for how high the counter could go. They picked a number in the millions.  Shortly before midnight on April 10, the counter exceeded that number, resulting in chaos. Because the counter was used to generate a unique identifier for each call, new calls were rejected. And because the programmers hadn’t anticipated the problem, they hadn’t created alarms to call attention to it. Nobody knew what was happening. Dispatch centers in Washington, California, Florida, the Carolinas, and Minnesota, serving 11 million Americans, struggled to make sense of reports that callers were getting busy signals. It took until morning to realize that Intrado’s software in Englewood was responsible, and that the fix was to change a single number. Not long ago, emergency calls were handled locally. Outages were small and easily diagnosed and fixed. The rise of cellphones and the promise of new capabilities—what if you could text 911? or send videos to the dispatcher?—drove the development of a more complex system that relied on the internet. For the first time, there could be such a thing as a national 911 outage. There have now been four in as many years.

NFIB: Small Business Optimism Index decreased in September - From the National Federation of Independent Business (NFIB): Small Business Optimism Slides in September, Expected business conditions tumble in NFIB Optimism Index The NFIB Index of Small Business Optimism tumbled in September from 105.3 to 103 led by a steep drop in sales expectations, not just in hurricane-affected states, but across the country.“The temptation is to blame the decline on the hurricanes in Texas and Florida, but that is not consistent with our data,” said Juanita Duggan, NFIB President and CEO. “Small business owners across the country were measurably less enthusiastic last month.” .. Job creation weakened in the small business sector as business owners reported an adjusted average employment change per firm of -0.17 workers. Decreases were reported by owners in six of the nine Census regions, so it wasn’t just a hurricane effect. ... Nineteen percent of owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem (unchanged), second only to taxes. This is the top ranked problem for those in construction (30 percent) and manufacturing (28 percent), getting more votes than taxes and regulations.

Weekly Initial Unemployment Claims decrease to 243,000 -- The DOL reported: In the week ending October 7, the advance figure for seasonally adjusted initial claims was 243,000, a decrease of 15,000 from the previous week's revised level. The previous week's level was revised down by 2,000 from 260,000 to 258,000. The 4-week moving average was 257,500, a decrease of 9,500 from the previous week's revised average. The previous week's average was revised down by 1,250 from 268,250 to 267,000.
Hurricanes Harvey, Irma, and Maria impacted this week's claims.
The previous week was revised down. The following graph shows the 4-week moving average of weekly claims since 1971.

BLS: Job Openings Decreased Slightly in August - From the BLS: Job Openings and Labor Turnover Summary: The number of job openings was little changed at 6.1 million on the last business day of August, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and separations were also little changed at 5.4 million and 5.2 million, respectively. Within separations, the quits rate and the layoffs and discharges rate were little changed at 2.1 percent and 1.2 percent, respectively. ...  The number of quits was little changed at 3.1 million in August. The quits rate was 2.1 percent. The number of quits was little changed for total private and for government. Quits decreased in information (-14,000) and mining and logging (-6,000). In the regions, the number of quits increased in the West but decreased in the South. The following graph shows job openings (yellow line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS. Note that hires (dark blue) and total separations (red and light blue columns stacked) are pretty close each month. This is a measure of labor market turnover.  When the blue line is above the two stacked columns, the economy is adding net jobs - when it is below the columns, the economy is losing jobs.Jobs openings decreased in August to 6.082 million from 6.140 in July.  Note: July had the highest number of job openings since this series started in December 2000.The number of job openings (yellow) are up 11% year-over-year. Quits are up 2% year-over-year. These are voluntary separations. (see light blue columns at bottom of graph for trend for "quits"). Job openings are mostly moving sideways at a high level, and quits are increasing year-over-year.  This is another strong report.

US Job Openings Pull Back From All Time High --After two consecutive months of record high job openings, today's August JOLTS report  - Janet Yellen's favorite labor market indicator - showed a modest pullback across most categories, with the total number of job openings falling in august from 6.140MM to 6.082MM, below the 6.125MM consensus estimate, resulting in an unchanged Oct. job opening rate of 4%. Still, after nearly two years of being rangebound between 5.5 and 6 million, the latest job openings number confirms that there may be a "breakout" about what was the previous resistance level, as increasingly more jobs remain unfilled in a labor market where skill shortages and labor imbalances are becoming structural.The number of total job openings declined modestly by 58,000, increasing in health care and social assistance (+71,000) and in durable goods manufacturing (+31,000), while job openings decreased in other services (-95,000), educational services (-51,000), and non-durable goods manufacturing (-48,000). The number of job openings increased in the Midwest region. Now if only employers could find potential employees that can pass their drug test... The rest of the report was just as subdued, with the pace of hiring reversing last month's increase, declining by 91,000 to 5.430 million...... pressuring the pace of hiring lower from 3.8% in July to 3.7% in August. According to the BLS, the number of hires was little changed for total private and for government. The number of hires was little changed in all industries. Hires decreased in the Northeast region. On an annual basis, the pace of hiring slowed down modestly, declining to 2.7% Y/Y in August, down from 3.6% in July. The other closely watched category, the level of quits - which indicates workers' confidence they can leverage their existing skills and find a better paying job - also reversed last month's increase, and in  declined from 3.194MM to 3.124MM, suggesting workers are feeling less confident about their job skills than the previous month. The number of quits was little changed for total private and for government. Quits decreased in information (-14,000) and mining and logging (-6,000). In the regions, the number of quits increased in the West but decreased in the South.

 Trump tries to weaken federal unions, but membership grows in reaction to GOP actions - President Trump and Capitol Hill Republicans have been good for federal unions, even as they attempt to undermine the labor organizations and the public servants they represent. With the GOP running the White House and Congress, membership in federal unions is on the rise, fed by an administration and legislature that leaves the workforce anxious about budget cuts, layoffs and an erosion of civil service protections. The American Federation of Government Employees (AFGE), the biggest federal employee union, had a net increase of 1,022 members last month alone, part of almost 5,000 new members since January. Three of the four other major unions also reported growth — the National Treasury Employees Union (NTEU) did not provide membership information — with the National Federation of Federal Employees on pace to achieve 7 percent growth this year. While membership has grown previously, important factors currently are White House and congressional proposals that would cut government contributions to federal employee benefits, significantly devaluing the 1.9 percent pay raise that staffers are slated to get in January. The union growth occurred even before Thursday’s House approval of a budget proposal that would reduce subsidies to the Federal Employees Health Benefits Program. The budget plan calls for $32 billion in cuts targeted at feds over 10 years. While unspecified in the House budget resolution, those hits could include damaging retirement proposals previously offered by Trump. At the same time AFGE recorded impressive growth in September, Trump was doing his best to weaken federal unions through his executive order revoking the labor/management forums created by predecessor President Barack Obama. 

How conservative states and liberal cities vie for control -The Economist --AT FIRST glance, they seem unrelated: a fracking ban in Denton, Texas; a minimum-wage increase in St Louis, Missouri; and an anti-discrimination ordinance in Charlotte, North Carolina. Yet each was passed in a city then later overturned by a Republican-controlled state legislature. Legal observers see a trend in the rollbacks. Grassroots Change, a nonprofit organisation, counts 140 state bills introduced this year specifically to block municipal laws. These laws vary, but reflect the generally progressive bent of America’s cities. They include measures for public health (nutrition labelling and gun control), the environment (bans on fracking and plastic bags), workers (paid family leave) and immigrants (sanctuary-city designations). Conservative legislators respond by passing laws to invalidate them at the state level. Using a tactic known as pre-emption, states can nullify local measures and thus ensure statewide uniformity. It is a tactic that cuts both ways, politically. Lawmakers in Democratic-controlled states ignore the preferences of rural, conservative voters too (as in California, where conservative counties that may have wanted to co-operate fully with federal immigration authorities will be restricted in their capacity to do so by the decision to make it a sanctuary state). The result is growing rancour between state lawmakers and local lawmakers, who feel under siege. Rural-urban power contests in America are not new. But they are strikingly partisan today. A century ago, rural-controlled state legislatures used their authority to weaken cities through “ripper bills”. These were voting requirements and literacy tests designed to disenfranchise city dwellers. Still, political expediency tempered hostility towards cities. Both parties counted on rural and urban votes. Class was more important than geography in shaping political affiliation. United in opposition to business-friendly Republicans, Democrats were mainly working-class voters in northern cities and rural populists in the west and south. That coalition has unravelled over the last half-century.

Billions in Illinois bills not sent for payment - llinois is chasing a moving target as it tries to dig out of the nation's worst budget crises, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills — as much as half the total — hadn't been sent to the official who writes the checks by the end of June. Although many of those IOUs have since been paid, a similar amount in unprocessed bills has replaced them in the last three months, Comptroller Susana Mendoza's office said Monday. That's in addition to $9 billion worth of checks that are at the office but being delayed because the state lacks the money to pay them. The mound of past-due bills tripled over the two years Republican Gov. Bruce Rauner and Democrats who control the General Assembly were locked in a budget stalemate, which ended in July when lawmakers hiked income taxes over Rauner's vetoes. In some cases, agencies were waiting to send their receipts to Mendoza because lawmakers haven't approved the spending. For example, the Department of Corrections had $471 million in unpaid bills on hand as of June 30 largely for that reason.

Illinois Debt Crisis Deepens As Comptroller Admits No Idea What True Balance Of Outstanding Bills Is -- Back in July, the state of Illinois narrowly avoided a junk bond rating with a last minute budget deal that included a 32% in hike in income taxes.  Republican Governor Bruce Rauner vetoed the budget and called it a "disaster," but both houses of the state legislature voted to override his veto.  Meanwhile, S&P and Moody's were apparently both convinced that the budget deal was sufficient for the state to remain an investment grade credit and all lived happily ever after, if just for a few months.But, with the state's past due payables hovering around a record $16 billion......which is a 3-fold increase over the past two years.....one has to wonder, as we have on many occasions, just how solid Illinois' credit rating really is.But as staggering as Illinois' $16 billion in unpaid contractor bills is, per a report from theAssociated Press today, it may not even fully reflect the true extent to which the state has stiffed its vendors. Illinois is chasing a moving target as it tries to dig out of the nation's worst budget crisis, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills — as much as half the total — hadn't been sent to the official who writes the checks by the end of June.

Former New Mexico education official recounts the secrecy behind the state’s anti-science standards -- New Mexico’s top education official is misleading the public about how his agency crafted a series of controversial changes to the state’s science standards, according to a former state employee who worked on the standards and later quit in protest.The proposed standards deleted language from the NGSS referencing the “4.6-billion-year”history of the Earth, omitted entirelyone mention of evolution, andeliminated references to human-caused global warming. In one case, the proposed standards would replacelanguage about the “rise in global temperatures” with a reference to the supposed “fluctuation” in global temperatures. News of the anti-science language sparked a backlash in a state that is home to such renowned institutions as Los Alamos National Laboratory and the Sandia National Laboratories. New Mexico’s two US senators wrote that they were “disturbed” at their state’s actions. Glenn Branch, the deputy director of the National Center for Science Education, said the changes were “evidently intended to placate creationists and climate change deniers.” Christopher Ruszkowski, the head of New Mexico’s Public Education Department,shot back at critics by saying that his agency’s proposed changes—including those that fly in the face of peer-reviewed science and long-accepted facts—resulted from input by “a bunch of different groups,” among them “business groups, civic groups, teacher groups, superintendents.”   But that’s not how it happened, according to Lesley Galyas, a former state employee who was in charge of PED’s efforts to revamp its outdated science standards until late last year, when she resigned. Galyas, who served four years as the math and science bureau chief at the department, said her job in part entailed overseeing teachers’ groups, focus groups, and a math and science advisory committee, all with the aim of bringing New Mexico’s standards in line with the latest research on science and teaching. In an interview with Mother Jones, Galyas described an attempt by “one or two people” working “behind closed doors” to politicize how science is taught in the state. She was reluctant to speak about her time at PED, but she said the directive to alter the standards came from her superiors. One of the officials involved, she says, was Ruszkowski, who was then a deputy secretary.

The Hedge Funder Who Secretly Bought $1 Billion in Puerto Rican Debt Is Also a Secret Backer of Charter Schools -- Billionaire hedge funder Seth Klarman is having a rough quarter. The media averse Klarman, often likened to Warren Buffet for his safe bets and low profile, has been dragged into the spotlight twice in less than a month.  First, when officials in Massachusetts forced a secretive political organization to reveal its donors, Klarman’s name topped the list. Of the more than $15 million Families for Excellent Schools spent pushing last November’s failed ballot initiative to increase the number of the state’s charter schools, $3.3 million came from Klarman, the most from any single individual. Partners at Klarman’s hedge fund the Baupost Group chipped in another $376,000, joining a who’s who of billionaires and private investors, including Alice Walton of Walmart fame and multiple partners from Mitt Romney’s former firm Bain Capital. Then, earlier this week, The Intercept unmasked Klarman's Baupost Group as one of the largest holders of Puerto Rico’s skyrocketing public debt. The U.S. territory is reeling from a recent one-two punch of Hurricanes Irma and Maria, but its residents—who are U.S. citizens—have long suffered as the island’s government has struggled to pay off over $70 billion in bonds. For over a decade, infrastructure has been neglected and privatized, government employees have been laid off, and public services have been drastically cut—in May, 184 public schools were put on the chopping block. Even Congress gave decision-making power over the territory to an unelected board. Why? To pay back bondholders like Klarman. So what do we make of Klarman's sudden notoriety? Nothing in particular—he’s one of many investors not only profiting from Puerto Rico’s debt crisis but also perpetuating it. But that’s just it. The lesson here is that the growing crisis caused by charter schools  in school districts nationwide is very much a manufactured one. It’s Naomi Klein’s “disaster capitalism” at a slower pace.

U.S. Sheriff, Deputies Indicted After Body Searches of 900 High School Students - The sound system squawked at 8 a.m., just as the school day was revving up at Worth County High School. The campus was now on lockdown, the announcement said. Neither the teachers nor students at the south Georgia school knew what was going on.For the next four hours, 40 uniformed officers — the entire staff of the Worth County Sheriff’s Office — fanned through the school in Sylvester, ordering students against the walls of classrooms and hallways, demanding the students hand over their cellphones. All 900 students were searched, part of a drug sweep ordered by Sheriff Jeff Hobby, according to court documents.He did not have a warrant. He had a “target list” of 12 suspected drug users. Only three of the names were in school that day, April 14.  By noon, when cellphones were handed back and classes resumed, no drugs had been found. The sheriff’s full-court press, however, would yield legal consequences — for Hobby and his office. In the days following the sweep, students came forward charging they had been inappropriately groped and manhandled by deputies. A class-action federal civil suit followed. And now, this week a grand jury indicted Hobby and two deputies for their part in the high school raid. Hobby faces charges of sexual battery, false imprisonment, and violation of oath of office, according to the Atlanta Journal-Constitution.

Into the wilderness: Secretive South Carolina camps come under scrutiny following teen’s death - As Shadeana Seagers hugged the phone to her ear that night in November 2015, her son lay dying on the concrete floor of a cabin about 140 miles from their Ladson home. Before she could reach him, Del’Quan Seagers was gone. Just five weeks had passed since a probation violation had landed him at a remote wilderness camp for small-time juvenile offenders. His original crime: stealing candy from a Kmart. The episode led to a stinging rebuke of the agency for failing to thoroughly investigate claims that foul play was involved in the death of a teen in its custody. Del'Quan's death also exposed a web of secrecy that surrounds such tragedies, making it almost impossible for the public to get answers about teen fatalities that occur on the state’s watch. And it contributed to mounting concerns about DJJ’s ability to monitor the private companies that run most of the camps. Juvenile justice officials defend the camps as a vital tool for helping wayward teens get back on track. They maintain that the facilities are well-run and that critics have latched onto technicalities and misconceptions. A Post and Courier investigation, however, found DJJ doesn’t have a clear, reliable system for documenting problems at its camps. The agency doesn’t track assaults at the facilities. It has basic numbers on deaths and escapes, but detailed reports on the incidents are scattered about the agency and unavailable for immediate review, an agency lawyer told the newspaper. The Legislative Audit Council released a review of the state Department of Juvenile Justice earlier this year that found DJJ did not properly … A state audit released this year found similar problems, along with “a significant lack of oversight of juveniles” at DJJ facilities, including the nine camps. What’s more, the Florida-based company that runs most of the camps — including the one where Del’Quan Seagers died — has faced well-publicized problems at its programs in other states, including a riot and various assaults. Some states have moved away from using the programs.

Home Depot Panics Over Millennials; Forced To Host Tutorials On Using Tape Measures, Hammering Nails --As wall street analysts celebrate the coming of age of the millennial generation, a group of young people who were supposed to lead another revolutionary wave of consumerism if only they could work long enough to escape their parents' basement, retailers like Home Depot are panicked about selling into what will soon be America's largest demographic...but not for the reasons you might think. While avocado resellers like Whole Foods only have to worry about creating a catchy advertising campaign to attract millennials, Home Depot is in full-on panic mode after realizing that an entire generation of Americans have absolutely no clue how to use their products.  As the Wall Street Journal points out, the company has been forced to spend millions to create video tutorials and host in-store classes on how to do everything from using a tape measure to mopping a floor and hammering a nail. Home Depot's VP of marketing admits she was originally hesitant because she thought some of their videos might be a bit too "condescending" but she quickly learned they were very necessary for our pampered millennials. In June the company introduced a series of online workshops, including videos on how to use a tape measure and how to hide cords, that were so basic some executives worried they were condescending. “You have to start somewhere,” Mr. Decker says. And just in case you think we're joking and/or exaggerating, here is Home Depot's tape measure tutorial in all its glory: Meanwhile, Scotts Miracle-Gro has been forced to start training classes to remind frustrated millennials, who can't seem to keep their flowers alive, that plants need sunlight to grow.

 The Lost US Lead in Education - In the middle of the 20th century, the US economy had the enormous advantage that its workforce was by far the most skilled in the world. That advantage has largely dissipated. Alexander Monge-Naranjo of the St. Louis Fed provides some basic facts in the short article "Workers Abroad Are Catching Up to U.S. Skill Levels" (Regional Economist, Third Quarter 2017, pp. 6-7). The underlying data here is from Robert Barro and Jong-Wha Lee, "A New Data Set of Educational Attainment in the World, 1950-2010," Journal of Development Economics, 2013, Vol. 104, pp.184-98.  Here's a comparison for 1950, showing what share of the workers in each country are in a given education group. The US is the light blue bars on the right of each cluster. Notice that the light blue bars are typically lower in the lower education categories, but higher in the higher education categories. Also, if you do a bit of mental addition, you see that countries like France, Germany, Japan, and South Korea had two-thirds or more of their population in the broader category of "primary school education or less" circa 1950. The next comparison is different in two ways. It looks at data for 2010, and it focuses only on workers in  the 25-35 age bracket. By leaving out older workers, the focus is on what education level workers are likely to have in decades ahead. The light blue bars showing the US levels of education have clearly risen, but the other countries are now much more similar. Even in cases where a country like Germany looks lower in college degrees, it's worth remembering that Germany has an aggressive and far-reaching apprenticeship program that help to provide future workers with job-related training. One can of course raise the possibility that those South Korean college degrees might not be equal in quality, on average, to US college degrees. But the size of the changes is so enormous that quibbling over quality is not going to alter the main pattern. The catch-up in education levels is also apparent, if not as pronounced, in emerging market economies. Here's a similar figure, for workers age 25-35 in 2010, comparing the US to emerging market economies of Brazil, China, India, Mexico and Russia.  I suppose there are a few themes to draw from this…

Apple CEO Tim Cook: Learning To Code Is 'More Important' Than English  -- Apple Chief Executive Tim Cook says he thinks learning how to computer code is a more valuable communication tool than learning the English language.“If I were a French student and I were 10 years old, I think it would be more important to learn coding than English,” Cook told French news outlet Konbini.“I’m not telling people not to learn English—but this is a language that you can [use to] express yourself to 7 billion people in the world. I think coding should be required in every public school in the world,” Cook said."It's the language that everyone needs, and not just for the computer scientists. It's for all of us," says Cook. He explained that programming encourages students of all disciplines to be inventive and experimental: “It’s not just for the computer scientists. Creativity is in the front seat; technology is in the backseat. It is sort of the blend with both of these that you can do such powerful things now," he said.

 What College-Bound Seniors Don’t Know About College Does Hurt Them - Given the time, money and stress the college application process requires, choosing where and what to study is important. Conventional wisdom holds that college applicants rely a good deal on formal sources such as guidance counselors or websites about colleges for information on what to study. However, reality confirms that applicants rely more on other sources of information and that this choice has a lasting impact on the student’s future prospects. A recent survey of 22,000 Americans conducted by Gallup and Strada Education Network finds that the majority of college-bound students consult informal sources of information such as family and friends when deciding what to study. This is especially true for students with college-educated parents. Nearly two-thirds of students whose parents have a graduate degree cite family and friends as their main source of advice. While students whose parents did not go to college are much less likely to rely on family and friends for advice, they still consult them more than formal sources such as guidance counselors and official college data websites. The survey also found that roughly one-third of all respondents rely on informal sources in high school, such as a coach or teacher, and one in five on average rely on informal sources at work such as a coworker. It is somewhat surprising, then, that survey respondents said informal work-based and school-based sources of information were the most helpful, followed by family and friends. Least helpful were formal sources such as guidance counselors and online college information. Research by Stanford’s Caroline Hoxby and Harvard’s Christopher Avery has shown that low-income, high-achieving high school students often do not apply to selective colleges in part because they are less likely to interact with high-achieving peers and teachers who have been exposed to selective colleges. They have the scores to get into selective schools. They just don’t have the same networks as their higher-income peers.

For-Profit Schools Get State Dollars For Dropouts Who Rarely Drop In — Last school year, Ohio’s cash-strapped education department paid Capital High $1.4 million in taxpayer dollars to teach students on the verge of dropping out. But on a Thursday in May, students’ workstations resembled place settings for a dinner party where most guests never arrived.  In one room, empty chairs faced 25 blank computer monitors. Just three students sat in a science lab down the hall, and nine more in an unlit classroom, including one youth who sprawled out, head down, sleeping.Only three of the more than 170 students on Capital’s rolls attended class the required five hours that day, records obtained by ProPublica show. Almost two-thirds of the school’s students never showed up; others left early. Nearly a third of the roster failed to attend class all week.Some stay away even longer. ProPublica reviewed 38 days of Capital High’s records from late March to late May and found six students skipped 22 or more days straight with no excused absences. Two were gone the entire 38-day period. Under state rules, Capital should have unenrolled them after 21 consecutive unexcused absences.Though the school is largely funded on a per-student basis, the no-shows didn’t hurt the school’s revenue stream. Capital billed and received payment from the state for teaching the equivalent of 171 students full time in May.U.S. Secretary of Education Betsy DeVos has championed charters and for-profit education, contending in congressional testimony that school choice can lower absenteeism and dropout rates. But at schools like Capital, a ProPublica-USA Today investigation found, the drop-outs rarely drop in — and if they do, they don’t stay long. Such schools aggressively recruit as many students as possible, and sometimes count them even after they stop showing up, a practice that can generate hundreds of thousands of dollars in taxpayer-paid revenue for empty desks. Auditors have accused for-profit dropout recovery schools in Ohio, Illinois and Florida of improperly collecting public money for vanished students. State officials in Ohio have twice chided Capital over indications of inflated enrollment numbers.

A hiccup in Purdue’s acquisition of for-profit Kaplan University - WaPo -- The U.S. Education Department wants Purdue University to absorb the debts and liabilities of Kaplan University as a condition for approving the state school’s controversial purchase of the for-profit college, a request that critics say could place Indiana taxpayers at risk. Purdue, a renowned public university in Indiana, acquired Kaplan’s 15 campuses and learning centers in April to form a new online college, dubbed NewU. The deal was met with swift resistance from some Purdue faculty, consumer groups and liberal lawmakers because of the for-profit company’s continued involvement in the new public university. Foes of the deal asked whether NewU would require public funding.But Purdue president Mitch Daniels, the former governor of Indiana, said the new venture would not receive or require taxpayer dollars. Those assurances are now in question as details of an Education Department review of the acquisition have emerged.In a letter obtained by The Washington Post, Michael Frola, a senior official at the Education Department, takes issue with Purdue’s unwillingness to cover all liabilities arising out of Kaplan’s participation in the federal student aid program. The state university said it would take responsibility only for liabilities tied to NewU, not those that Kaplan may have accrued before the closing of the deal. Those liabilities can include tuition refunds to students or reimbursing the department for the canceled loans of former students. Frola said the department will not approve the change of ownership unless Purdue will “assume responsibility for liabilities resulting from the operation of Kaplan University as an educational institution, whether they are known or unknown, and whether they accrue prior to, or after the closing of the transaction.”The debts and liabilities backed by Purdue “constitute an instrumentality of the state of Indiana for the purpose of the department’s regulations,” he said. In other words, the department ultimately holds Purdue and the state of Indiana responsible for liabilities resulting from the operation of Kaplan University.

U of Hawaii sends email titled 'in the event of a nuclear attack' - - Students at the Aloha State school received an email Monday with the subject line "in the event of a nuclear attack."  The message sent Cold War-style shivers down the spines of those not accustomed to the "duck and cover" drills of the 1950s, though the current threat is from the isolated regime of Kim Jong Un."In light of concerns about North Korea missile tests, state and federal agencies are providing information about nuclear threats and what to do in the unlikely event of a nuclear attack and radiation emergency," says the email procured by Hawaii News Now.  It adds that the university follows the Hawaii Emergency Management Agency siren system and the agency's instructions for "sheltering-in-place."The 50th state began a campaign to tell residents about prepping for a potential nuclear attack this summer, after North Korea tested a missile believed to be capable of reaching the islands.Experts believe that the hermit kingdom has also made progress on miniaturizing a warhead that could fit onto an intercontinental ballistic missile, which could reach Hawaii in about 20 minutes. The American military has recently practiced missile defense tests both off of Hawaii and the West Coast.Despite international efforts for a peaceful solution, Kim and President Trump recently taken to firing insults at each other, with the commander-in-chief's jabs suggesting that words could soon be replaced by "fire and fury." Kim responded to Trump’s hints at military action on the peninsula by saying that his weapons of mass destruction were a "powerful deterrent" against a U.S. strike.

Congrats, College Grads. Now Good Luck Paying Off All That Debt -  As more Americans graduate from college with huge amounts of student-loan debt, they’re taking jobs that haven’t been as rewarding.The latest Federal Reserve Survey of Consumer Finances shows the median income for heads of households who have college degrees grew just 2.1 percent between 2013 and 2016. That compares with a 6.1 percent increase in tuition, fees and room and board on average at four-year public universities over a similar period, according to College Board data. Inflation-adjusted median earnings for this group still haven’t reached their pre-recession high, and the increases in costs of attending college have outpaced gains in earnings for the better part of the past two decades. “While college is generally a good investment, it has become increasingly expensive over the last several decades to attend a four-year program, as costs have risen considerably faster than wages, especially wages for all but the very top of the income distribution,” New York Fed President William Dudley said in a speech Friday. “This means that college has become increasingly unaffordable for those families who need it most, if we are to increase social and economic mobility.”  The Fed’s data also point to a lopsided distribution of income for families with college-degree holders. The average income for these households was almost $190,000, more than double the median.    “You can charge an awful lot for college, and it’ll still have very high net value over a career.”

Why Colleges Are Borrowing Billions -  While public attention has been focused on runaway student loan amounts, colleges and universities themselves are also borrowing heavily — often in the hope of shoring up enrollments, but in many cases leaving them financially weaker, analysts say. Colleges and universities collectively owe $240 billion, the Moody’s bond-rating service reports. That debt rose 18 percent, to $145 billion, in the last five years at public universities, Moody’s says. At privates, it went up 3 percent, to $95 billion.Last year alone, colleges and universities borrowed a record $41.3 billion through municipal bonds, their principal source of debt funding, the financial information firm Thomson Reuters reports. That’s up from $28.7 billion a decade ago.“When you spend more on X, you have to bring in more money from Y, and that Y is usually student tuition.”The annual cost of servicing this accumulated debt more than doubled, from $21 billion in 2003 to $48 billion in 2012, the most recent year for which it has been calculated by researchers at the University of California, Berkeley.This means 9 percent of college and university budgets, on average, now goes to servicing debt, a cost that has been rising faster than enrollments.  Just the interest payments come to the equivalent of $750 per student per year at public universities, the Berkeley researchers found, and $1,289 at private colleges.

California To Have Harsher Penalty For Pronoun Violations Than For Knowingly Spreading HIV -- Beginning in 2018, California law will have harsher penalties for health care workers who address a senior transgender patient with the “wrong” pronouns than for people who knowingly infect others with HIV. California Gov. Jerry Brown signed legislation on Friday lowering the maximum penalty for knowingly infecting or exposing a person to HIV to six months in prison - down from a maximum of eight years.  Also last week, Brown signed legislation allowing for penalties of up to one year in jail for health care workers who “willfully and repeatedly” use the “wrong” pronouns to refer to a senior transgender patient.  Democratic state Sen. Scott Weiner sponsored both pieces of legislation.“The most effective way to reduce HIV infections is to destigmatize HIV,”Weiner told CNN.“To make people comfortable talking about their infection, get tested, get into treatment.”Weiner has also dismissed concerns about religious freedom regarding the criminal punishments for health care workers who don’t use transgender pronouns.“Everyone is entitled to their religious view,” he said.“But when you enter the public space, when you are running an institution, you are in a workplace, you are in a civil setting, and you have to follow the law.”  Opponents of the legislation disagreed.“How can you believe in free speech, but think the government can compel people to use certain pronouns when talking to others?” Greg Burt of the California Family Council testified in July. “This is not tolerance. This is not love. This is not mutual respect. True tolerance tolerates people with different views. We need to treat each other with respect, but respect is a two-way street. It is not respectful to threaten people with punishment for having sincerely held beliefs that differ from your own.”

Cost of Living Adjustment increases 2.0% in 2018, Contribution Base increased to $128,700 -- With the release of the CPI report this morning, we now know the Cost of Living Adjustment (COLA), and the contribution base for 2018. From Social Security: Social Security Announces 2.0 Percent Benefit Increase for 2018 Monthly Social Security and Supplemental Security Income (SSI) benefits for more than 66 million Americans will increase 2.0 percent in 2018, the Social Security Administration announced today. The 2.0 percent cost-of-living adjustment (COLA) will begin with benefits payable to more than 61 million Social Security beneficiaries in January 2018. Increased payments to more than 8 million SSI beneficiaries will begin on December 29, 2017. (Note: some people receive both Social Security and SSI benefits) The Social Security Act ties the annual COLA to the increase in the Consumer Price Index as determined by the Department of Labor’s Bureau of Labor Statistics.Some other adjustments that take effect in January of each year are based on the increase in average wages. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $128,700 from $127,200. Of the estimated 175 million workers who will pay Social Security taxes in 2018, about 12 million will pay more because of the increase in the taxable maximum.Currently CPI-W is the index that is used to calculate the Cost-Of-Living Adjustments (COLA). Here is a discussion from Social Security on the current calculation (2.0% increase) and a list of previous Cost-of-Living Adjustments. The contribution and benefit base will be $128,700 in 2018. The National Average Wage Index increased to $48,664.73 in 2016, up 1.2% from $48,098.63 in 2015 (used to calculate contribution base).

Puerto Rico faces looming Medicaid crisis | TheHill: Puerto Rico is facing an imminent Medicaid funding crisis, putting nearly one million people at risk of losing their health-care coverage. Even before Hurricane Maria caused major damage to the island’s struggling health-care system, the U.S. territory’s Medicaid program barely had enough money left to last through the next year.Now, if Puerto Rico’s federal Medicaid funding runs out, up to 900,000 people would likely be cut from Medicaid — more than half of total enrollment, according to federal estimates. Hurricane Maria made things substantially worse. Experts predict that unless Congress acts, the federal funding will be exhausted in a matter of months. If that happens, Puerto Rico will be responsible for covering all its costs going forward. “Unless there’s an assurance of stable and sufficient funding … [the health system] is headed toward a collapse,” said Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities (CBPP). Barbara Lyons, a senior vice president at the Kaiser Family Foundation, said this would mean major coverage reductions, increased problems for patients in accessing treatment and delays in payments to health-care providers. A massive influx of Puerto Ricans could also migrate to the mainland, which would put a strain on the Medicaid programs of the states they move to. Nearly half of Puerto Rico's 3.4 million residents participate in Medicaid. 

Obamacare insurance rates to rise 36 percent in Wisconsin next year - Health insurance premiums on the Affordable Care Act exchange will go up an average of 36 percent in Wisconsin next year, but government subsidies will offset the increases for most people, a state official said Thursday. A major reason for the stiff hikes is that President Donald Trump’s administration hasn’t said if it will continue certain payments to insurers, said J.P. Wieske, deputy commissioner of insurance.The increases — and the loss of three national insurers in the state from healthcare.gov, affecting more than a third of the 216,000 residents who get insurance that way — also reflect instability in the market, Wieske said. Too few young and healthy people are signing up for insurance on the exchange, part of what is known by some as Obamacare, making it risky for insurers who have lost $400 million from the business in the state over three years, he said. “There’s some concern that we’re in a death spiral,” Wieske said. “The increases we’re seeing reflect the increased amount of risk that a smaller number of carriers are going to have to take on.” Gov. Scott Walker added: “Obamacare is collapsing, and these huge premium increases show the law failed on its promise to deliver affordable healthcare.” Enrollment for individual coverage at healthcare.gov runs Nov. 1 to Dec. 15. The vast majority of people get insurance instead through their employer or the government programs Medicaid or Medicare. Molina Healthcare, Anthem Blue Cross Blue Shield in Wisconsin and Health Tradition Health Plan said earlier this year they are leaving the exchange next year. About 75,000 people on those plans will need to select other insurance, Wieske said. 

Employer-Sponsored Healthcare Deductibles Surge 400% In Past Decade; 13x More Than Wages - We spend fair amount of time discussing the soaring costs of Obamacare, but, as the Kaiser Family Foundation points out in a new study, employer sponsored plans, while not as bad as Obamacare, are also gradually pushing more healthcare costs onto their employees through surging deductibles and co-insurance payments all while wages remain fairly stagnant.  As Kaiser notes, the average deductible for an employer sponsored plan increased 400% between 2006 and 2017, actual deductible payments covered by employees increased 229% and co-insurance payments rose 89% all while wages only rose 31%.Rising cost-sharing for people with health insurance has drawn a good deal of public attention in recent years.  For example, the average deductible for people with employer-provided health coverage rose from $303 to $1,505 between 2006 and 2017.While we can get a sense of employees’ potential exposure to out-of-pocket costs by looking at trends in deductibles, many employees will never reach their deductibles and other employees may have costs that far exceed their deductibles.  In addition to deductible payments, some employees also have copayments (set dollar amounts for a given service) or coinsurance payments (a percentage of the allowed amount for the service).  To look at what workers and their families actually spend out-of-pocket for services covered by their employer-sponsored plan, we analyzed a sample of health benefit claims from the Truven MarketScan Commercial Claims and Encounters Database to calculate the average amounts paid toward deductibles, copayments and coinsurance.We find that, between 2005 and 2015, average payments for deductibles and coinsurance rose considerably faster than the overall cost for covered benefits, while the average payments for copayments fell.  As can be seen in the chart below, over this time period, patient cost-sharing rose substantially faster than payments for care by health plans as insurance coverage became a little less generous. From 2005 to 2015, the average payments by enrollees towards deductibles rose 229% from $117 to $386, and the average payments towards coinsurance rose 89%, from $134 to $253, while average payments for copays fell by 36%, from $218 to $139.  Overall, patient cost-sharing rose by 66%, from an average of $469 in 2005 to $778 in 2015. During that period, average payments by health plans rose 56%, from $2,932 to $4,563. This reflects a modest decline in the average generosity of insurance – large employer plans covered 86.2% of covered medical expenses on average in 2005, decreasing to 85.4% in 2015.  Wages, meanwhile, rose by 31% from 2005 to 2015.

Overlooked by Obamacare: Many people paying full price for insurance ‘getting slammed’ - Orlando Sentinel: Millions of people have gained health insurance because of the federal health law. Millions more have seen their existing coverage improved. But one small slice of the population including Melquist and Goodrich are unquestionably worse off. They are healthy people who buy their own coverage but earn too much to qualify for help paying their premiums. And the premium hikes that are being announced as enrollment looms for next year in some states, increases topping 50 percent will make their situations more miserable. Exactly how big is this group? According to Mark Farrah Associates, a health care analysis firm, as of 2017 there were 17.6 million people in the individual market, 5.4 million of whom bought policies outside the health exchanges, where premium help is not available. Combine that with the percentage of people who bought insurance on the exchanges but earned too much (more than four times the federal poverty level, or about $48,000 for an individual) to get premium subsidies, and the estimate is 7.5 million, or 43 percent of the total individual market purchasers, according to insurance industry consultant Robert Laszewski. "They're early retirees," said Laszewski. "They're people working part time who have substantial outside income. They're people who are self-employed of any age, people who are small employers." 

Most hospitals tie doctor pay to productivity; new research examines how that impacts academic medicine - Six years ago, a committee of six professors and three division chiefs at the University of Florida sat down to discuss how doctors employed by the university's academic medical center should be paid. The existing compensation plan wasn't universally popular. According to new research published in Academic Medicine in August, junior doctors at University of Florida Health were "subsidizing less productive but more senior faculty, which resulted in dissatisfaction with and distrust of leadership."The committee proposed a new plan, which would tie a percentage of each doctor's salary to the amount of work each doctor does. Moving forward, their productivity would be measured in "relative value units," or RVUs. More patients, more tests and more procedures generate more RVUs. But RVU targets aren't universally popular, either.Some patients argue that RVU goals force physicians to work more quickly, thereby spending less time with each patient and opening a window for mistakes. Doctors, particularly those employed by academic medical centers, worry that productivity targets offer no incentive for physicians to teach or to conduct research if they're not generating RVUs in the classroom or lab. The authors of the new study noted that "faculty e ngaged in research and education become disenchanted without productivity-based incentives for those activities. Thus, productivity-based comprehensive compensation plans can place each of academic medicine’s missions in competition with the others."

The little red pill being pushed on the elderly -- The maker of a little red pill intended to treat a rare condition is raking in hundreds of millions of dollars a year as it aggressively targets frail and elderly nursing home residents for whom the drug may be unnecessary or even unsafe, a CNN investigation has found. And much of the money is coming straight from the federal government. The pill, called Nuedexta, is approved to treat a disorder marked by sudden and uncontrollable laughing or crying -- known as pseudobulbar affect, or PBA. This condition afflicts less than 1% of all Americans, based on a calculation using the drugmaker's own figures, and it is most commonly associated with people who have multiple sclerosis (MS) or ALS, also known as Lou Gehrig's disease. Nuedexta's financial success, however, is being propelled by a sales force focused on expanding the drug's use among elderly patients suffering from dementia and Alzheimer's disease, and high-volume prescribing and advocacy efforts by doctors receiving payments from the company, CNN found. Since 2012, more than half of all Nuedexta pills have gone to long-term care facilities. The number of pills rose to roughly 14 million in 2016, a jump of nearly 400% in just four years, according to data obtained from QuintilesIMS, which tracks pharmaceutical sales. Total sales of Nuedexta reached almost $300 million that year. Nuedexta is being increasingly prescribed in nursing homes even though drugmaker Avanir Pharmaceuticals acknowledges in prescribing information that the drug has not been extensively studied in elderly patients -- prompting critics to liken its use to an uncontrolled experiment. The one study the company conducted solely on patients with Alzheimer's (a type of dementia) had 194 subjects and found that those on Nuedexta experienced falls at more than twice the rate as those on a placebo.

How the VA Fueled the National Opioid Crisis and Is Killing Thousands of Veterans – Kevin Keller was a U.S. Navy vet wracked with constant pain, and because his right arm had been crippled by a stroke, he had to use his left hand to scrawl a note of apology to his buddy: “Marty, Sorry I broke into your house and took your gun to end the pain! FU VA!!! Can’t take it anymore.”  Grieving friends told The Roanoke Times that Keller couldn’t handle how the VA was weaning him off painkillers. His doctors had told him cutting back would extend his life, but Marty Austin, whose gun Keller stole that night, told the paper, “He did not want a longer life if he was going to be miserable and couldn’t do anything because of the pain.” Suicides like Keller’s and the widespread despair behind them are yet another tragic element of a national opioid crisis blamed for most of the 64,000 fatal drug overdoses a year. Opioids, mostly illegally obtained counterfeit pills and heroin, now account for 63 percent of all drug deaths in the U.S., with fatalities climbing at an astounding rate of nearly 20 percent a year. In fact, the estimated number of drug deaths in 2016 topped the total number of soldiers killed in the Iraq and Vietnam wars. There’s a grim irony in that statistic, because the Department of Veterans Affairs has played a little-discussed role in fueling the opioid epidemic that is killing civilians and veterans alike. In 2011, veterans were twice as likely to die from accidental opioid overdoses as non-veterans. One reason, as an exhaustive Newsweek investigation—based on this reporter's book, Mental Health, Inc.—found, is that for over a decade, the VA recklessly overprescribed opiates and psychiatric medications. Since mid-2012, though, it has swung dangerously in the other direction, ordering a drastic cutback of opioids for chronic pain patients, but it is bungling that program and again putting veterans at risk.

CDC Says Americans Are Fatter Than Ever Before; 40% Of Adults Now Considered Obese -- Despite the best efforts of our political elites to ban sodas, among other products deemed unhealthy by our growing nanny state, Americans just continue to grow ever fatter.  According to a new study from the Centers for Disease Control, 40% of Americans are now obese, a new all-time record high, and over 70% are overweight.  Per NBC:A troubling new report released Friday by the Centers for Disease Control and Prevention shows that almost 40 percent of American adults and nearly 20 percent of adolescents are obese — the highest rates ever recorded for the U.S."It's difficult to be optimistic at this point," said Dr. Frank Hu, chair of the Department of Nutrition at the Harvard School of Public Health. "The trend of obesity has been steadily increasing in both children and adults despite many public health efforts to improve nutrition and physical activity."Overall, 70.7 percent of Americans are either overweight or obese,meaning that an unhealthy weight has become the norm, with normal weight Americans — a BMI of less than 25 — now in the minority. So which states are harboring the largest Americans?  As it turns out, the fried delicacies of the American South aren't so great for the waistline...

Knowingly exposing others to HIV will no longer be a felony in California - LA Times: Gov. Jerry Brown signed a bill Friday that lowers from a felony to a misdemeanor the crime of knowingly exposing a sexual partner to HIV without disclosing the infection.The measure also applies to those who give blood without telling the blood bank that they are HIV-positive.Modern medicine allows those with HIV to live longer lives and nearly eliminates the possibility of transmission, according to state Sen. Scott Wiener (D-San Francisco) and Assemblyman Todd Gloria (D-San Diego), authors of the bill.“Today California took a major step toward treating HIV as a public health issue, instead of treating people living with HIV as criminals,” Wiener said in a statement. “HIV should be treated like all other serious infectious diseases, and that’s what SB 239 does.”Supporters of the change said the current law requires an intent to transmit HIV to justify a felony, but others noted cases have been prosecuted where there was no physical contact, so there was an argument intent was lacking.Brown declined to comment on his action.HIV has been the only communicable disease for which exposure is a felony under California law. The current law, Wiener argued, may convince people not to be tested for HIV, because without a test they cannot be charged with a felony if they expose a partner to the infection.

Magic mushrooms ‘reboot’ brain in depressed people – study - Magic mushrooms may effectively “reset” the activity of key brain circuits known to play a role in depression, the latest study to highlight the therapeutic benefits of psychedelics suggests.  Psychedelics have shown promising results in the treatment of depression and addictions in a number of clinical trials over the last decade. Imperial College London researchers used psilocybin – the psychoactive compound that occurs naturally in magic mushrooms – to treat a small number of patients with depression, monitoring their brain function, before and after. Images of patients’ brains revealed changes in brain activity that were associated with marked and lasting reductions in depressive symptoms and participants in the trial reported benefits lasting up to five weeks after treatment.Dr Robin Carhart-Harris, head of psychedelic research at Imperial, who led the study, said: “We have shown for the first time clear changes in brain activity in depressed people treated with psilocybin after failing to respond to conventional treatments.“Several of our patients described feeling ‘reset’ after the treatment and often used computer analogies. For example, one said he felt like his brain had been ‘defragged’ like a computer hard drive, and another said he felt ‘rebooted’.“Psilocybin may be giving these individuals the temporary ‘kick start’ they need to break out of their depressive states and these imaging results do tentatively support a ‘reset’ analogy. Similar brain effects to these have been seen with electroconvulsive therapy.”

24% Of American Men Would Have Sex With A Robot -- Sex machine is going to take on a whole new meaning in years to come.As Statista's Niall McCarthy notes, once the realm of science fiction fantasies, the technology behind anthropomorphic sex robots is advancing at a rapid pace. Some observers believe the technology will become widespread in the near future and that sex with robots could even eclipse human love-making by 2050. It is highly controversial, however, with many feeling that the development of sex robots cannot be morally justified. That begs the question: would you have sex with a robot? YouGov conducted a survey in an attempt to find out how Americans feel about the possibility of having a wild night with an actual sex machine. They found that while the vast majority of U.S. adults would turn down the chance of having sex with a robot, men are more likely to accept the offer than women.

CRISPR Critters - Mike Kimel  -The first applications of gene editing are (will be?) to fix deleterious mutations. Nobody, or almost nobody, will complain when previously horrible diseases get fixed before a child is born. But the practice won’t stop there. There will be a progression of editing services from muscular dystrophy to hairlip to more ahtleticism, and eventually, more hair or a more attractive nose. The last two may take a while.But what will be really interesting will be the tweaking of genes that fix cognitive issues. Again, its a matter of progression. Nobody – OK, almost nobody – will complain in a decade or three when Downs’ Syndrome is edited out of a fetus. From there, bringing a mildly retarded child to normal is a barely an ethical step at all. After that, well, perhaps someone destined to be of normal intelligence can be made smarter than average, or even a borderline genius along one or another dimension.The timing of this whole process of enhancement will depend on its complexity and difficulty, and the difficulty of dealing with trade-offs that might exist. It is possible, but unlikely, that a single tweak of the genome will bring a noticeable leap in IQ. But it is more likely to require making a lot of small changes to the genome. Timing also matters in and of itself. An evolutionary process may cause less social upheaval than a revolutionary process. Its one thing to go from cohorts with today’s intelligence to something we’d call a genius today over a period of a century or more. Its another to achieve that over half of a generation.  But regardless of details, its all coming. At some point there will be generations with large numbers of genetically edited young people. And they will be different. On average, they may have some combination of trait we deem desirable. These include athleticism, beauty, creativity, perseverance and intelligence. But those genetically edited people, however different, will also be the same as the rest of us in a few key ways. They will simply be individuals, trying to make their way through life as well as they can. They won’t be a single monolithic entity, and they won’t behave or think the same. They won’t have the same life trajectories. But like the rest of us, they will all be trying to make a living, and for some of them, their inborn traits will make it that much easier for them to outdistance the competition.

Made in America -- The New Hope Fertility Center occupies two floors in a sleek office building across from Central Park, a block from the Trump International Hotel. Because paying someone to work as a surrogate is illegal in New York, many of the carriers come from poorer parts of the United States: Kentucky, Ohio, Tennessee, Pennsylvania, Alabama, North Carolina. Reproductive labor is a growth industry, and the workers downstairs are lining up to apply for the job. Upstairs, by contrast, the wealthy couples who will employ them often come from China, one of the fastest-growing markets for surrogate pregnancies. No one knows precisely how many Chinese citizens travel to the United States each year for surrogacy, but fertility specialists say the demand is skyrocketing. “I’ve never seen anything like it,” John Weltman, the founder of Circle Surrogacy, told CNN. “It’s like an explosion.” Fertility Source, a California agency, has hired a full-time employee to handle Chinese travel and translation. “Everyone is doing that,” says Gail Sexton Anderson, who runsDonor Concierge, an organization in California that connects carriers and families. The influx of Chinese citizens seeking surrogates in the United States reflects, in part, the growing wealth and mobility of urban professionals in China. It has also been spurred by China’s decision to rescind its One Family One Child policy last year, allowing straight, married couples to pursue larger families. But it can take months to get into a fertility clinic in China, and both egg donation and surrogacy remain illegal. At the same time, countries like Thailand and India began to prohibit foreigners from hiring surrogates or outlawed the practice altogether. So Chinese couples in search of a surrogate followed the inexorable logic of globalization: They went looking for a ready supply of labor overseas. With surrogacy banned throughout the EU and heavily regulated in the U.K., Canada, and Australia, the best source of “carriers” became the United States. Agencies sprang up across China promising to help Chinese parents find blonde, blue-eyed American women to bear their children.

“Worse Than Big Tobacco”: How Big Pharma Fuels the Opioid Epidemic -- Over a 40-year career, Philadelphia attorney Daniel Berger has obtained millions in settlements for investors and consumers hurt by a rogues’ gallery of corporate wrongdoers, from Exxon to R.J. Reynolds Tobacco. But when it comes to what America’s prescription drug makers have done to drive one of the ghastliest addiction crises in the country’s history, he confesses amazement. “I used to think that there was nothing more reprehensible than what the tobacco industry did in suppressing what it knew about the adverse effects of an addictive and dangerous product,” says Berger. “But I was wrong. The drug makers are worse than Big Tobacco.” The U.S. prescription drug industry has opened a new frontier in public havoc, manipulating markets and deceptively marketing opioid drugs that are known to addict and even kill. It’s a national emergency that claims 90 lives per day. Berger lays much of the blame at the feet of companies that have played every dirty trick imaginable to convince doctors to overprescribe medication that can transform fresh-faced teens and mild-mannered adults into zombified junkies. So how have they gotten away with it? The prescription drug industry is a strange beast, born of perverse thinking about markets and economics, explains Berger. In a normal market, you shop around to find the best price and quality on something you want or need—a toaster, a new car. Businesses then compete to supply what you’re looking for. You’ve got choices: If the price is too high, you refuse to buy, or you wait until the market offers something better. It’s the supposed beauty of supply and demand. But the prescription drug “market” operates nothing like that. Drug makers game the patent and regulatory systems to create monopolies over every single one of their products. Berger explains that when drug makers get patent approval for brand-name pharmaceuticals, the patents create market exclusivity for those products—protecting them from competition from both generics and brand-name drugs that treat the same condition. The manufacturers can now exploit their monopoly positions, created by the patents, by marketing their drugs for conditions for which they never got regulatory approval. This dramatically increases sales. They can also charge very high prices because if you’re in pain or dying, you’ll pay virtually anything.

“Cooking Them to Death”: The Lethal Toll of Hot Prisons -- Most Americans have felt the effects of an increasingly hotter planet. In recent decades, changes in climate have brought higher average temperatures and longer heat waves. But few are as vulnerable to weather trends as incarcerated people, a point underscored in August when thousands were evacuated from Texas prisons ahead of Hurricane Harvey. While some state prison systems — plus federal prisons and military detention facilities, including Guantanamo Bay — keep temperatures within a liveable range, many do not, according to a 2015 Columbia Law School report. Prisoners often live without air-conditioning in areas where temperatures exceed 100 degrees for days at a time and the heat index, which records how hot it feels with humidity, has hit 150 degrees. The human body is built to cool itself by sweating and dilating blood vessels, but those self-cooling mechanisms can break down. “When the humidity is really high, the sweat can’t evaporate,” said Susi Vassallo, M.D., a New York University professor in emergency medicine who studies thermoregulation. “It just rolls off your body, without cooling it.” Heat stroke victims may become delirious and start seizing and convulsing. “The cells of the body start to cook and fall apart,” said Vassallo, who has testified against prison agencies in lawsuits over heat conditions. Although there are no national figures on how many prisoners die of heat illness, horror stories emerge every summer: inmates screaming “Help us!” out of the windows of a St. Louis jail; New Hampshire men flooding their scorching cells to cool them down; Arizona prisoners whose shoes melt in the sun. A growing segment of the incarcerated population is especially heat-sensitive. Jails and prisons house an increasing number of people with mental illness; as many as one in five Texas prisoners are prescribed psychotropic medications, which make the body more vulnerable to heat. A similar number receive blood pressure drugs, which can cause the same problem. And the rise of longer sentences in the 1980s and 90s has produced a surge of older prisoners, who are particularly susceptible to heat illnesses.

San Diego's Deadly Hepatitis A Outbreak Turns "Statewide Epidemic" As "Outbreak Could Last Years"  -- A few weeks ago we highlighted the staggering outbreak of Hepatitis A in San Diego that had infected 400 people and killed more than a dozen.  The outbreak was first identified in early March, according to the county, and declared a public health emergency in September.But, as the LA Times points out, the hepatitis A outbreak that started in San Diego is now on the verge of reaching statewide epidemic status, as cases have spread through homeless tent cities all the way north to Sacramento. California’s outbreak of hepatitis A, already the nation’s second largest in the last 20 years, could continue for many months, even years, health officials said Thursday.At least 569 people have been infected and 17 have died of the virus since November in San Diego, Santa Cruz and Los Angeles counties,where local outbreaks have been declared.Dr. Monique Foster, a medical epidemiologist with the Division of Viral Hepatitis at the U.S. Centers for Disease Control and Prevention, told reporters Thursday that California’s outbreak could linger even with the right prevention efforts.  “It’s not unusual for them to last quite some time — usually over a year, one to two years,” Foster said.  Hepatitis A is commonly transmitted through contaminated food. The only outbreak in the last 20 years bigger than California’s occurred in Pennsylvania in 2003, when more than 900 people were infected after eating contaminated green onions at a restaurant.  California’s outbreak, however, is spreading from person to person, mostly among the homeless community.  The virus is transmitted from feces to mouth, so unsanitary conditions make it more likely to spread. The city of San Diego has installed dozens of handwashing stations and begun cleaning streets with bleach-spiked water in recent weeks. Meanwhile, the outbreak has made its way to Santa Cruz and L.A. counties, where 70 and 12 people have already been diagnosed, respectively, as public health officials warn that the worst is likely far from over.

Fearsome Plague Epidemic Strikes Madagascar - NYT - Madagascar has been struck by a fast-spreading outbreak of plague, creating panic and prompting the World Health Organization to send 1.2 million doses of antibiotics to the island nation.  Since August, the country has reported over 200 infections and 33 deaths. The outbreak is beginning to resemble the early stages of the West African Ebola crisis in 2014: a lethal disease normally confined to sparsely populated rural areas has reached crowded cities and is spreading in a highly transmissible form.Schools, universities and other public buildings have closed so they can be sprayed to kill fleas, which may carry the infection. The government has forbidden large public gatherings, including sporting events and concerts.Fears that the outbreak could spread to other countries are rising.Late last month, plague struck a basketball tournament for teams from Indian Ocean countries, killing a coach from the Seychelles and infecting another from South Africa. The players are being monitored, Malagasy health authorities told the W.H.O. Madagascar typically has about 400 cases of plague each year between September and April, but they are usually focused in the nation’s central highlands and spread by fleas living on rats in rice-growing areas. This outbreak is unusually worrying because most new cases are in cities and are pneumonic plague, the form transmitted by coughing. Pneumonic plague kills even faster than the better-known bubonic form, which is transmitted by flea bites and gets its name from the infected lymph nodes that form large, swollen “buboes” in the groin, armpits and neck. Both forms caused the infamous Black Death of the mid-14th century, which is thought to have killed a third of Europe and caused major social upheavals.

Yemen’s cholera outbreak now the worst in history as millionth case looms - The cholera epidemic in Yemen has become the largest and fastest-spreading outbreak of the disease in modern history, with a million cases expected by the end of the year and at least 600,000 children likely to be affected.The World Health Organization has reported more than 815,000 suspected cases of the disease in Yemen and 2,156 deaths. About 4,000 suspected cases are being reported daily, more than half of which are among children under 18. Children under five account for a quarter of all cases. The spread of the outbreak, which has quickly surpassed Haiti as the biggest since modern records began in 1949, has been exacerbated by hunger and malnutrition. While there were 815,000 cases of cholera in Haiti between 2010 and 2017, Yemen has exceeded that number in just six months.Save the Children has warned that, at the current rate of infection, the number of cases will reach seven figures before the turn of the year, 60% of which will be among children. In July, the International Committee of the Red Cross predicted there would be 600,000 suspected cholera cases in the country by the end of the year.Tamer Kirolos, Save the Children’s country director for Yemen, said an outbreak of this scale and speed is “what you get when a country is brought to its knees by conflict, when a healthcare system is on the brink of collapse, when its children are starving, and when its people are blocked from getting the medical treatment they need”.Kirolos said: “There’s no doubt this is a man-made crisis. Cholera only rears its head when there’s a complete and total breakdown in sanitation. All parties to the conflict must take responsibility for the health emergency we find ourselves in.” More than two years of fighting between the Saudi-led coalition and Houthi rebels has crippled the country, causing widespread internal displacement, the collapse of the public health system, and leaving millions on the brink of famine.

‘Antibiotic apocalypse’: doctors sound alarm over drug resistance -- Scientists attending a recent meeting of the American Society for Microbiology reported they had uncovered a highly disturbing trend. They revealed that bacteria containing a gene known as mcr-1 – which confers resistance to the antibiotic colistin – had spread round the world at an alarming rate since its original discovery 18 months earlier. In one area of China, it was found that 25% of hospital patients now carried the gene.Colistin is known as the “antibiotic of last resort”. In many parts of the world doctors have turned to its use because patients were no longer responding to any other antimicrobial agent. Now resistance to its use is spreading across the globe. In the words of England’s chief medical officer, Sally Davies: “The world is facing an antibiotic apocalypse.” Unless action is taken to halt the practices that have allowed antimicrobial resistance to spread and ways are found to develop new types of antibiotics, we could return to the days when routine operations, simple wounds or straightforward infections could pose real threats to life, she warns. That terrifying prospect will be the focus of a major international conference to be held in Berlin this week. Organised by the UK government, the Wellcome Trust, the UN and several other national governments, the meeting will be attended by scientists, health officers, pharmaceutical chiefs and politicians. Its task is to try to accelerate measures to halt the spread of drug resistance, which now threatens to remove many of the major weapons currently deployed by doctors in their war against disease. The arithmetic is stark and disturbing, as the conference organisers make clear. At present about 700,000 people a year die from drug-resistant infections. However, this global figure is growing relentlessly and could reach 10 million a year by 2050.   The danger, say scientists, is one of the greatest that humanity has faced in recent times. In a drug-resistant world, many aspects of modern medicine would simply become impossible.   Without antibiotics to protect them during surgery, people will die of peritonitis or other infections. The world will face the same risks as it did before Alexander Fleming discovered penicillin in 1928.

How Tyson’s Chicken Plant Became a $320 Million Turkey -- On Sept. 5, executives from Tyson Foods Inc., the nation’s largest meat processor, traveled to the east Kansas town of Tonganoxie with what they figured would be welcome news for the locals. Joined by Governor Sam Brownback and other political leaders, Doug Ramsey, Tyson’s group president for poultry, unveiled plans to build a huge chicken complex outside of town. The $320 million project, Tyson’s first new plant in 20 years, would be home to a hatchery, feed mill, and processing plant—employing about 1,600 workers to package 1.25 million birds a week.  To many small communities, that would have been cause for celebration. But for residents of Tonganoxie (population 5,195), the news—which many locals complain had been kept from them because of nondisclosure agreements that officials had signed during Tyson’s site search—drew a far different response.  “I have a daughter in the elementary school, and I don’t want her basically playing in the backyard of a slaughterhouse,” White-and-red signs demanding “No Tyson in Tongie” sprouted up on lawns. A mid-September rally organized by some Kansas legislators drew thousands of locals, many concerned about the lack of transparency leading up to the Tyson deal. Not long after, Leavenworth County’s board of commissioners—which five days before Tyson’s announcement approved the intent to issue about $500 million in industrial revenue bonds for facilities, without naming an operator—revoked its decision. Tyson then said it was putting its plans on hold while it investigates other plant locations. The backlash serves as the latest example of grassroots opposition to industrialized food plants, which stoke concern among residents about everything from environmental impact to animal welfare issues and fears of a potential influx of new workers.

Total Health Costs of Industrial Food Systems Are 'Staggering' - A new report by international experts draws significant linkages between industrial food and farming practices and many of the "severest health conditions afflicting populations around the world," from respiratory diseases to a range of cancers and systematic livelihood stresses.  The report was released on Oct. 9 and is titled, Unravelling the Food-Health Nexus: Addressing Practices, Political Economy, and Power Relations to Build Healthier Food Systems . It was produced by the International Panel of Experts on Sustainable Food Systems (IPES-Food) and commissioned by the Global Alliance for the Future of Food .  The report aims to estimate the global aggregate human and economic costs of the various ways industrial food and farming systems are making people sick. Ruth Richardson, the executive director of the Global Alliance for the Future of Food, called the report's conclusions "staggering" and "difficult to ignore."  To underpin their calculations, IPES-food reviewed the available evidence in five key areas of impact: occupational hazards to food and farm workers; environmental contamination; contaminated, unsafe and altered foods; unhealthy dietary patterns; and food insecurity.  They found that malnutrition costs the world US$3.5 trillion per year, while obesity alone will cost US$760 billion per year by 2025. They found that combined European Union and U.S. losses from exposure to endocrine disrupting chemicals amount to US$557 billion per year, while antimicrobial-resistant infections are already thought to be incurring US$20 billion to US$34 billion of annual costs in the U.S.

Here’s How the Trump Administration Is Quietly Undermining Food Safety  --  For a guy who likes eating fast food because it’s “very clean,” President Trump sure is blasé about making America’s food safer. (With so many important executive matters to tend to, he can’t find time?) After just nine months of controlling policy, he’s already gotten angry letters from almost every influential watchdog group — the Center for Science in the Public Interest, the Center for Food Safety, the Center for Foodborne Illness Research & Prevention, Food & Water Watch, STOP Foodborne Illness, Food Policy Action, and even the nonprofit that publishes Consumer Reports. The latest controversy? Politico reported yesterday on a “little-noticed” plan by Trump’s USDA to shift international food safety from an office where oversight makes sense (the Food Safety and Inspection Service) to a brand-new undersecretary post where it arguably does not. Ted McKinney, the guy who was given this post, which involves foreign trade, is the former head of a giant animal-drug company called Elanco, and effectively knows squat about international food safety. Critics don’t trust Big Pharma hack with America’s involvement in a joint U.N.-WHO food-safety panel known as the Codex Alimentarius Commission. A fight’s currently underway over whether to ban a cattle-feed additive called zilpaterol that Tyson refuses to use, and the European Union, China, and other countries insist is unsafe for humans. Unsurprisingly, McKinney has much more positive feelings about the drug, and food-safety officials from both the Obama and Bush administrations worry what will happen if he’s put in charge of the “food code.” But, again, this is merely the latest example of experts getting alarmed at ways the president’s administration is chipping away at food safety. Here’s a quick primer on six others:

Regulatory Approval Ignores Possible Dangers Of GE Potatoes -- Food Standards Australia New Zealand (FSANZ), a trans-Tasman regulatory body, has approved 6 lines of GE potatoes (A1139) carrying genes from viruses and bacteria to stop discoloration and alter vital nutritional components. The NZ Minister for Food Safety has let down NZ consumers yet again by failing to carry out a thorough public safety evaluation. The joint submission from GE-Free NZ and Soil and Health highlighted many studies that show harm from eating GE foods, which FSANZ has dismissed and ignored. The FSANZ decision states, “No public health and safety concerns have been identified in relation to food derived from the potatoes developed by the Applicant.” This statement is highly misleading and contravenes a “duty of care” to the consumer. FSANZ openly acknowledges it does not require feeding trials or genomics testing. “How can FSANZ give consumers an assurance of safety when they do not require any animal or human feeding studies? There is no evidence that the potatoes are safe to eat,” said Claire Bleakley, president of GE-Free NZ. Consumers are forced to accept that FSANZ can approve anything regardless of its dangers.   “The goodness in potatoes has been corrupted and now harbours unknown dangers,” . “Consumers are also vulnerable, as the GE potatoes escape the labelling laws.” These potatoes are aimed at fast food outlets and the frozen chip and crisps market. Any imports would include processed foods such as par-cooked frozen potato chips, crisps, flour, starch and alcohol. There is as yet no approval to grow GE potatoes in Australasia.

Ben & Jerry's to Introduce Glyphosate-Free Ice Cream -- Ben & Jerry's announced it will stop using ingredients made with crops that are chemically dried with glyphosate —the primary ingredient in Monsanto's widely used Roundup weedkiller—and will source 100 percent organic dairy following reports that several of its flavors tested positive for the controversial chemical. In a statement, the company said it was "disappointed" to learn of the test results even though only very low and "safe levels" were detected. "We were disappointed to learn that recent testing in the United States and Europe revealed trace levels of the commonly-used herbicide glyphosate in several of our flavors. Disappointed, but not totally surprised," the company said. "Glyphosate is one of the most widely used herbicides in agriculture and is everywhere—from mainstream food, to natural and organic food, and even rainwater—and that's the issue." Glyphosate, the most widely applied herbicide worldwide, has been found in everyday foods such as cookies, crackers, popular cold cereals and chips.  The chemical caught the world's attention back in 2015 when the World Health Organization's cancer assessment arm classified glyphosate as "probably carcinogenic to humans."

Beneficial soil bacteria face a weed-killing threat from above - Cornell - As farmers battle in their above-ground war on weeds, they may inadvertently create underground casualties – unintentionally attacking the beneficial bacteria that help crops guard against enemy fungus. Cornell researchers have found an agricultural conflict: negative consequences of the weed-killing herbicide glyphosate on Pseudomonas, a soil-friendly bacteria. “Beneficial Pseudomonas in the soil can help crops thrive. They can produce plant-stimulating hormones to promote plant growth and antifungals to defeat problematic fungi – such as Pythium and Fusarium – found in agricultural soil, but previous studies reported that the abundance of beneficial bacteria decreased when the herbicide glyphosate seeps underground,” said Ludmilla Aristilde, assistant professor of biological and environmental engineering. “Our study seeks to understand why this happens.” Soil bacteria require their proteins – composed of amino acids – and their metabolism to support cellular growth and the production of important metabolites to sustain their underground fight. But glyphosate applied to crops can drain into the soil and disrupt the molecular factories in the bacterial cells in some species, interfering with their metabolic and amino acid machinery.

Have Monsanto and the Biotech Industry Turned Natural Pesticides Into GMO "Super Toxins"? - According to biotech lore, the Bt pesticides introduced into many GMO food crops are natural proteins whose toxic activity extends only to narrow groups of insect species. Therefore, says the industry, these pesticides can all be safely eaten, e.g. by humans.This is not the interpretation we arrived at after our analysis of the documents accompanying the commercial approval of 23 typical Bt-containing GMO crops, however (see Latham et al., 2017, just published in the journal Biotechnology and Genetic Engineering Reviews). In our publication, we show that commercial GMO Bt toxins differ greatly from their natural precursors. These differences are important. They typically cause GMO Bt proteins to be more toxic. Worse, they also cause them to be active against many more species than natural forms of Bt toxins.  The vast majority of these GMO insecticidal crops, which include GMO corn, GMO soybeans, and GMO cotton, are engineered to contain a family of protein pesticides called Bt toxins. Such crops may contain up to six different Bt transgenes. Bt toxins get their name from the bacterial species from which they are originally derived, Bacillus thuringiensis. Biotech seed companies and government officials commonly refer to GMO Bt toxins (which are also called Cry toxins) as "natural". Commonly also, they state that GMO versions are identical to the Bt toxins used in organic agriculture or in forestry. But, as we found, GMO Bt toxins are clearly distinct from natural Bt toxins and those used in more traditional farming methods:

  • 1. Whereas natural Bt toxins are insoluble crystals with complex structures built around a DNA molecule (see illustration), all GMO Bt toxins are soluble proteins (with no DNA).
  • 2. Many GMO Bt toxins are truncated proteins.
  • 3. Parts of Bt toxins are often combined to make hybrid GMO molecules that don’t exist in nature.
  • 4. GMO Bt toxins often have added to them synthetic or unrelated protein molecules.
  • 5. Some are mutated to replace specific amino acids.
  • 6. And far from least, all GMO Bt proteins studied by us were additionally altered inside plant cells. It seems that the GMO crop plant itself invariably creates changes in Bt toxins.

Thus, not a single one of the 23 Bt commercial lines that we analyzed was identical to natural or historically used versions of Bt toxins. All had at least two of the above categories of alterations, but most had many more. To call GMO Bt proteins natural, as biotech companies standardly do, is therefore misleading and scientifically wrong.

Monsanto Stole Everything, Innovated Nothing - GMOs are economically and politically totalitarian. The GMO cartel is leader of the corporate agricultural onslaught dedicated to driving all people off the land. The cartel is escalating what’s already a non-competitive monopoly concentration in the seed sector. It aggressively uses this position to build horizontal and vertical monopoly power, enforce its dictates up and down the food production and distribution chains, drive non-GM seed varieties out of the market and out of existence, greatly jack up seed prices, force obscenely lopsided “contracts” upon farmers, persecute farmers with harassment, thuggery, and lawsuits, and get governments to enact repressive seed laws designed to escalate and accelerate this whole process. Pesticides/GMOs also present a clear and present danger to our health. All independent studies, as well as almost all the corporations’ own rigged studies, find reason for concern or alarm. The genetic engineering process itself, and the massive pesticide residues in our food and water, wreck our microbiome (our internal gastrointestinal microbial community which with our bodies comprises as symbiotic joint organism cooperating for mutual health), cause gastrointestinal inflammation which leads to every kind of disease, trigger escalations in allergies, asthma, autism, and every other kind of autoimmune disease, cause cancer, organ damage, infertility, miscarriages, and birth defects. These are just the best documented effects. Glyphosate-tolerant crops also are nutritionally denuded. To ingest the processed foods made from these merely adds to the nutritional deficiency already inherent in diets centered on such “foods” and adds to the many diseases this can cause or aggravate. Another big hoax is that Monsanto and other agrochemical corporations have accomplished any of this so-called “innovation”. In reality, the existence of GMOs, for worse or worst, has been the work of not-for-profit operatives who then had their work stolen or otherwise lifted by the big corporation. I’ll list some examples which include all the big milestones in the development of the main GMO types. My main source is the pro-Monsanto corporate history, Lords of the Harvest by NPR corporate-liberal columnist Dan Charles (page numbers will be tagged DC), with some additional information from The World According to Monsanto by French investigative journalist Marie-Monique Robin (MMR).

 Pesticide poisoning kills 20 farmers in Indian state: Twenty Indian farmers have died and hundreds of others are in hospital after inhaling poisonous pesticides while spraying crops, officials said Monday, highlighting lax safety standards in the country. The farmers in the western state of Maharashtra, one of India's most important agricultural regions, died after using the dangerous pesticides without wearing protective gear. "Twenty farmers are dead and hundreds are undergoing medical treatment. Fifty are critical with damage to their eyesight," Kishore Tewari, the spokesman for a state government task force that helps farmers in distress, told AFP. The first death was reported in August and the number of fatalities increased throughout September, according to local news reports. They occurred in the Yavatmal region, around 670 kilometres (416 miles) from the financial capital Mumbai. Activists blame a lack of regulations covering pesticides and a failure to provide poor farmers with proper safety equipment. Tewari said the victims had not worn boots, masks or gloves. Victims reported experiencing blurred vision and excruciating headaches, he added. "I don't have the money to buy protective gear and we spray pesticides without any safety kits," broadcaster NDTV quoted one farmer as saying. Last week the Bombay High Court called on the Maharashtra government to ban the sale of pesticides in the affected areas. Yavatmal police superintendent M Rajkumar told AFP that several cases had been filed against a local agricultural centre which sells pesticides to farmers. 

Congress Aims Killing Blow at Public Lands -  Rep. Rob Bishop is moving legislation that would radically cut down the scope of the Antiquities Act, effectively blocking new protections of national monument lands . Bishop's bill—in an Orwellian flourish, titled the "National Monument Creation and Protection Act"—would bar the Antiquities Act from being used to protect landmarks, prehistoric structures and objects of "scientific interest," switching the law's scope to the vague term "object or objects of antiquity." Court rulings and more than a century of presidential practice have established that the Antiquities Act is broad and can protect large natural landscapes. Reducing its scope to the narrow yet vague and infinitely litigable terms Bishop proposes would fulfill a longstanding goal of the anti-public lands fringe and severely undermine the law.  Among other things, Bishop is infamous for remarking about Native American rock art at Nevada's Basin and Range National Monument, " Ah, bullcrap. That's not an antiquity ." It's not hard to see the potential damage done by reshaping a bedrock conservation law in this man's image. If thousand-year-old art—not to mention the Grand Canyon itself, whose onetime monument status led to a legal ruling that the Antiquities Act could be applied to large natural landscapes—isn't an "antiquity," then what would he deem worth saving? Bishop's bill would also outlaw monuments beyond a certain acreage, allow future presidents to slash existing monuments down to a fraction of their size, and completely end the practice of setting aside marine habitat under monument status. "On the heels of [Interior] Secretary [Ryan] Zinke's secret report to illegally roll back national monument protections across the country, [House Natural Resources Committee] Chairman Bishop has one-upped him by trying once again to gut the law that protected these treasures in the first place," said Dan Hartinger, deputy director for parks & public lands defense at The Wilderness Society . "It seems as though they're in some perverse contest to see who can author the most radical proposal to sell out our public lands to development."

Manslaughter charge sought against top Michigan medical executive in Flint water crisis | WZZM13.com: - New charges of involuntary manslaughter and misconduct in office are being sought against the state’s top medical executive, Dr. Eden Wells, in connection with the Flint water crisis. Todd Flood, the special counsel handing the case for Michigan Attorney General Bill Schuette's office, made the announcement today in a Flint courtroom. After the brief hearing, Flood said he is seeking the new charges now “based on new review of other documents and testimony that came out last week.” He said “some revelations came up … that assisted us” during the preliminary examination of Nick Lyon, the director of Michigan Department of Health and Human Services. Flood declined to elaborate and said he can’t get into details. Wells, who already faces two charges – obstruction of justice, a felony punishable by up to 5 years in prison, and lying to a peace officer, a misdemeanor – appeared in court today for her preliminary examination. The hearing, which determines if the case proceeds to trial, was pushed back after Flood announced that he plans to seek the new charges.In June, prosecutors accused Wells of knowingly giving false testimony to an investigator and threatening to withhold funding from the Flint Area Community Health and Environment Partnership if it did not stop investigating the source of outbreak of Legionnaires' disease in the Flint area. She is also accused of willfully making a false statement about the date she knew about the outbreak in Genesee County. The disease, a severe type of pneumonia, started after Flint changed its water supply source to the Flint River in April 2014. It is linked to at least a dozen deaths in 2014 and 2015. The source hasn’t been definitely linked to the water change, but some experts have blamed the water on increased cases. 

U.S. secretly tested carcinogen in Western Canada during the Cold War, researcher finds - The U.S. Army secretly dumped a carcinogen on unknowing Canadians in Winnipeg and Alberta during the Cold War in testing linked to weaponry involving radioactive components meant to attack the Soviet Union, according to classified documents revealed in a new book. Between July 9, 1953 and Aug 1, 1953, six kilograms of zinc cadmium sulfide was sprayed onto unsuspecting citizens of Winnipeg from U.S. Army planes. The Army returned 11 years later and repeated the experiments in Suffield, Alta. and Medicine Hat, Alta., according to Lisa Martino-Taylor. Local governments had no knowledge of these experiments, according to documents obtained by Martino-Taylor, a professor of sociology at St. Louis Community College and author of “Behind the Fog: How the U.S. Cold War Radiological Weapons Program Exposed Innocent Americans.” Instead, they were fed a cover story by the Pentagon. “In Winnipeg, they said they were testing what they characterized as a chemical fog to protect Winnipeg in the event of a Russian attack,” Martino-Taylor said. “They characterized it as a defensive study when it was actually an offensive study.”Even in Canadian and U.S. documents, the tests were referred to as biological and chemical, when documents suggest they actually involved combining the two with radiological components to form combination weapons. The zinc cadmium sulfide acted as a fluorescent tracer which would help the U.S. Army determine how radioactive fallout from a weapon used on the Soviets would travel through wind currents, Martino-Taylor said. Canada participated in the open-air experiments as part of a tripartite agreement it held with the U.S. and England. The Pentagon, however, never informed the federal government that it would be spraying a carcinogen (cadmium) on Winnipeg, a city with approximately 300,000 people in 1950 

Packs of radioactive wild boar are making farmers in Sweden nervous  - Fears are growing in Sweden over packs of radioactive wild boar moving north, ravaging forests and farmland One animal shot by hunters had more than 10 times the safe level of radiation, said to have been caused by a cloud of radioactive dust that blew in after the Chernobyl disaster 31 years ago, depositing caesium-137 in the ground. Ulf Frykman, an environmental consultant, has warned hunters in Gavle, 100 miles north of Stockholm, of “extremely high” radiation levels among local boar. “This is the highest level we’ve ever measured,” he told The Daily Telegraph, after testing a beast in nearby Tarnsjo. As the soil in some areas north of Tarnsjo is more contaminated than other areas, radiation levels among boar are expected to rise. Wild boar feeding habits mean they have a greater exposure to the caesium than other game animals. “Wild boar root around in the earth searching for food and all the caesium stays in the ground,” Mr Frykman explained. “Deer and elk eat up in the bushes and you do not have not so much caesium there.” The local farmers’ association fears the high radiation in the animals will stop hunters shooting them, causing the population to spiral with more of them damaging forests and crops.

Namibia says anthrax could be to blame for deaths of more than 100 hippos - More than 100 hippos have died in Namibia in a remote national park in the past week, the country’s environment minister said on Monday, warning that anthrax could be to blame.Images from the Bwabwata national park in north-east Namibia showed dozens of lifeless hippos, some flat on their backs, others with just their heads visible above murky water.“Over 100 hippos died in the past week. The cause of death is unknown but the signs so far show that it could be anthrax,” Pohamba Shifeta told AFP.He said the toll could be higher as crocodiles might have eaten some of the carcasses. “Our veterinary services are currently working at the area to determine the cause of death. Once we have the results of the cause of death than we can decide on the way forward,” Shifeta said.Anthrax is a bacterial disease commonly associated with arid climates like the African savannah, where it kills game, cattle and sometimes humans. Government officials estimated that Namibia’s hippo population was around 1,300 before the mass death.

'Sooty birds' reveal hidden US air pollution - BBC News: Soot trapped in the feathers of songbirds over the past 100 years is causing scientists to revise their records of air pollution. US researchers measured the black carbon found on 1,300 larks, woodpeckers and sparrows over the past century. They've produced the most complete picture to date of historic air quality over industrial parts of the US. The study also boosts our understanding of historic climate change. Black carbon, a major component of soot, is created through the incomplete burning of fossil fuels such as coal. The dirty air generated as a result became a major problem as industrialisation expanded across Europe and the US at the end of the 19th century. Cities were soon coated in sooty air thanks to the unregulated burning of coal in homes and factories. While the huge impact of black carbon on the health of people living in urban centres has been recognised for decades, it is only in recent years that scientists have understood the role it plays climate change. When it is suspended in the air, the substance absorbs sunlight and increases warming in the atmosphere. When it hits the ground it increases melting of snow and ice, and has been linked to the loss of ice in the Arctic region. US researchers have struggled to find accurate records of the amount of black carbon that was emitted in the manufacturing belt of the US, around Chicago, Detroit and Pittsburgh at the end of the 19th century.The researchers were able to accurately estimate the amount of soot on each bird by photographing them and measuring the amount of light reflected off them. "We went into natural history collections and saw that birds from 100 years ago that were soiled, they were covered in soot," "We saw that birds from the present were cleaner and we knew that at some point through time the birds cleaned up - when we did our first pass of analysis using reflectance we were like wow, we have some incredible precision." 

Only Two Penguin Chicks Survive in Catastrophic Antarctic Breeding Season - Thousands of Adélie penguin chicks in Terre Adélie, Antarctica died of starvation at the start of 2017 due to unusually thick sea ice that forced their parents to travel an extra 100 kilometers (62 miles) to find food, according to French scientists.The colony of over 18,000 pairs of Adélie penguins suffered a "catastrophic breeding failure" that left with only two chicks surviving at the beginning of the year.The World Wildlife Fund (WWF) has been supporting the penguin researchers from the French National Center for Scientific Research who have been working in the region since 2010.WWF said in a news release :"Surviving mostly on a diet of krill, a small shrimp like crustacean, Adélie penguins are generally faring well in East Antarctica, but declining in the Antarctic peninsula region where climate change is well established. However, this significant breeding failure at this particular colony in East Antarctica has been linked to unusually extensive sea ice late in the summer, meaning the adult penguins had to travel further to forage for food for their chicks. As a result the chicks starved." The Guardian reported that scientists found thousands of starved chicks and unhatched eggs in the region. As the Guardian noted, Antarctica as a whole has experienced a record low amount of summer sea ice but the area around the penguin colony has been an exception.

After 350 Million Piñons Die, Scientists Fear For This Forest’s Future -- The piñon pine thrives in the arid climate of the Southwest U.S., producing a copious amount of delicately flavored seeds prized by wildlife and humans alike. It isn’t a fast-growing tree, often taking decades to reach just 6 feet (2 meters) in height. But it’s a tough tree, bursting from dry, steep and rocky soils inhospitable to many other species. And piñons can be extremely long-lived, taking 75 to 200 years to reach maturity and at times living to be 1,000 years old. Three major species of piñon are native to the region and, along with junipers, cover nearly 100 million acres (40 million hectares) reaching from Texas to California. Numerous plant and animal species, including turkeys, black bears, squirrels and chipmunks, depend on the environmental conditions created by the tree, and piñon-juniper woodlands help to moderate watershed functions by slowing rainfall and snowmelt, allowing it to soak into the soil. Native Americans collected piñon nuts for eons before Europeans arrived. For them it remains an important tree used for food, fuel, medicines and building materials.. Scientists consider the piñon to beone of the most important trees in the American West. So many wildlife and plant species depend on the piñon that its loss would have drastic impacts. In other words, “the piñon is a keystone species in the Southwest,” Ubelaker says. As climate changes, however, heat, drought, wildfire and insects threaten this tree, in turn threatening the wildlife, people and ecosystems that depend on it.  A prolonged drought that began in the 1990s brought home the threat climate change poses to the piñon. By the early 2000s some 350 million piñons were dead, with some areas in New Mexico reporting nearly 100 percent mortality.

Death by 1,000 Cuts: Why the Forest Carbon Sink Is Disappearing - The clear-cutting of giant swathes from the globe's tropical forests has long been understood to be a major force behind global warming, but new research finds that smaller-scale forest loss—from minor logging and fires—is an even more powerful driver of climate change.On Thursday, scientists at the Woods Hole Research Center and Boston University published a study in the journal Science that says the planet's tropical forests are releasing more carbon dioxide than they can store, mostly due to "fine scale" degradation and disturbance that previous studies haven't captured.The finding means tropical forests may not act as carbon "sinks" unless both deforestation writ large and this more subtle degradation is stopped or slowed.The researchers looked at tropical forests across Asia, Africa and Latin America using a trio of tools—remote sensing, field observations and satellite imagery—that gave them a more comprehensive and detailed picture over a period of years, from 2003 to 2014.This approach allowed them to measure not just large-scale deforestation, largely from agriculture, but smaller-scale degradation and disturbances that have, until now, been especially difficult to gauge. "Collectively, these fine-scale losses have been very difficult to quantify," said Wayne Walker, an associate scientist at Woods Hole and one of the report's authors. "While they don't seem like much in any given place, when you add them up across an areas as big as the tropics, they can be huge."

Wildfires Engulf Napa, Sonoma And 6 Other California Counties; More Than 20,000 Forced To Flee -- Wine country is burning. Thousands of residents of Napa Valley, Sonoma and six other counties have been forced from their homes – and thousands more are preparing to flee – as 14 wildfires tear through Northern California, resisting fire fighters’ efforts to contain them. California’s fire chief says at least 1,500 homes and commercial buildings have been destroyed – and officials said that estimate was probably conservative. While no deaths have been confirmed, fire officials say numerous residents have been injured and a number of people are also missing. California Department of Forestry and Fire Protection Director Ken Pimlott say an estimated 20,000 people have been evacuated.Gov. Jerry Brown has declared a state of emergency for Sonoma, Napa and Yuba counties, revealing that FEMA had approved emergency grants to help the state combat the fires. More than 20,000 people have been forced to evacuate, state officials said. As the LA Times reported, fire-friendly weather conditions converged prior to the outbreak of fires, which originated primarily in Sonoma and Napa. The Santa Ana winds - strong, extremely dry down-slope winds that occur mainly in the fall and originate inland in desert regions – were one factor in helping the fires spread. Warm temperatures also create the dry conditions that have helped the blazes spread like…well…wildfire. “This is really serious, it’s moving fast. The heat, the lack of humidity and the winds are all driving a very dangerous situation and making it worse,” the governor said at a morning press conference. “It’s not under control by any means. But we’re on it in the best way we know how.”  In Santa Rosa, the capital of Sonoma county, whole neighborhoods have been evacuated and 200 patients have been moved from area hospitals, the Associated Press reported. Smoke plumes from the fires showed up on the NWS radar…  Smoke plume from #AtlasFire showing up on radar. #cawx #cafirepic.twitter.com/QWhsv2RAGg — NWS Bay Area (@NWSBayArea) October 9, 2017  …and were also detected by satellite imaging… Striking satellite images show smoke, heat from California wildfireshttps://t.co/w824rGAeRk pic.twitter.com/BgQBmRk7MT < www.lividu… — #SeenByLivi (@Lividul) October 9, 2017

Trump approves disaster declaration for California wildfires | TheHill: The Trump administration on Tuesday approved a federal disaster declaration for California in response to wildfires that have swept across the state. Vice President Pence announced the decision during a meeting in the state capital of Sacramento with emergency responders. California Gov. Jerry Brown (D) had requested federal assistance to combat the deadly fires. Thirteen people have been killed and more than 100 are missing after multiple fires scorched as many as 100,000 acres in the Golden State, according to the Los Angeles Times. The disaster declaration allows the federal government to provide funding to state, local and tribal governments to help fight the fires and rebuild. Over the past month, Trump has been forced to respond to multiple natural disasters across the country, including hurricanes in Texas, Florida and Puerto Rico.

Wildfires Sweep Across Northern California; 15 Are Dead - — Wine country was shrouded in a thick layer of smoky haze here on Tuesday as firefighters continued to battle wildfires that have left at least 15 people dead and have damaged or destroyed about 2,000 structures, including wineries, homes and resorts. State fire officials estimated that 17 separate fires, the first group of which began Sunday night, had burned about 115,000 acres over eight counties. More than 100 people had been taken to hospitals by Tuesday morning, and officials said that the tallies of the dead and injured were likely to rise as many people were still missing or unaccounted for. About 20,000 people were forced to evacuate, some of them fleeing on foot and by car as the fires quickly overtook their towns, the authorities said. Dozens of shelters opened across Northern California.Vice President Mike Pence on Tuesday visited California’s office of emergency services to announce that President Trump had approved Gov. Jerry Brown’s request for a major disaster declaration and ordered federal aid to help the state in recovery efforts.“The Federal Emergency Management Agency has responded promptly to assist California in fighting these terrible fires,” Mr. Brown said in a statement. “I appreciate the fast response from the president.” The California Department of Forestry and Fire Protection said early Tuesday that firefighters were expected to make some progress. Officials were encouraged by improved weather conditions. The winds, which had pushed the flames rapidly and in an unpredictable manner, had died down significantly, said Daniel Berlant, an assistant deputy director with the department. But all 17 fires remained active, and several of the largest had not been contained on Tuesday morning. Ken Pimlott, the director of the Department of Forestry and Fire Protection, said at a news conference that there were still several days of battling the fires to come, cautioning, “We are far from out of the woods.”

Deadly fires ravage California's wine country, leaving at least 15 dead, more than 180 missing   — The massive, fast-moving California wildfires that have killed at least 15 people came with hardly any warning, spreading into neighborhoods when residents had gone to bed, unaware that they would have to flee for safety. Many of them, officials said, have nothing left to come back to. Officials expect the death toll to rise and high winds in coming days could complicate efforts to contain fires that have already torched 115,000 acres of land, mostly in Northern California’s wine country. Seventeen wildfires, some fanned by up to 50 mph wind gusts whipping across parched terrain loaded with tinder, have forced about 25,000 residents to evacuate and destroyed at least 2,000 homes and commercial buildings. “These folks have lost everything. When you look at the destruction, it’s literally like it exploded,” Cal Fire Director Ken Pimlott said at a news conference Tuesday. He added: “Some of these folks were literally just sleeping at home in bed and had no idea.” Residents will be allowed back to their homes once authorities are sure the neighborhoods are safe, Pimlott said. But that could take days, perhaps even weeks for some. “This is pure devastation,” he said, “and it’s going to take us a while to get out and comb through all of this.” 

‘Everything Was Incinerated’: Scenes From One Community Wrecked by the Santa Rosa Fire -- Coffey Park was one of a number of neighborhoods in Northern California’s wine country devastated by wildfires on Monday. The flames were fueled by intense winds and months of dry weather. At least 15 people were killed and up to 20,000 were forced to evacuate in one of the most destructive fire emergencies in this fire-prone state’s history. Fires tore through the hills around Glen Ellen in Sonoma County. A Hilton hotel about a mile from Coffey Park was destroyed, as was a retirement trailer park called Journey’s End. These were among the more than 2,000 structures that the authorities say were destroyed by the fires. Evidence of the fire’s intensity was everywhere in Coffey Park, which residents described as an apocalyptic scene. The aluminum wheels on cars melted and dripped down driveways like tiny rivers of mercury before hardening. A pile of bottles melded together into a tangle so contorted it looked like a Picasso. Plastic garbage bins were reduced to mere stains on the pavement. The destruction of the neighborhood was so complete that Lisa Layman, who has lived in Coffey Park for more than two decades and raised a son there, had trouble finding which patch of rubble was her house. “We couldn’t even find the street,” she said. “I didn’t recognize anything. It all just looked like junk.”  “It doesn’t look like anything,” Mr. Green said. “Everything was incinerated.”

NorCal Wildfires Death Toll Climbs To 23 As "Destructive" Winds Fan Flames --After slackening earlier in the week, the dry, nearly hurricane-force winds that have been fanning the flames in Northern California picked up again overnight, revitalizing what some are already describing as the most devastating wildfires in the state’s modern history.As of Thursday morning, 23 people have been confirmed dead in Sonoma, Napa, Mendocino and Yuba counties. Another 200 are missing. Fires have swallowed more than 3,500 homes and businesses over more than 170,000 acres. And the state’s emergency shelters are rapidly approaching their limits as more than 25,000 people have fled with more than 4,000 staying in the shelters, according to the Washington Post. The death toll is expected to rise significantly as officers reenter the “hot zones” that were totally destroyed by the fires.“We can’t even get into most of the areas,” Sonoma County Sheriff Robert Giordano said. “When we start doing searches, I expect that number to go up.” Though the official cause of the fires has yet to be determined, California utility PG&E has acknowledged that the extreme winds late Sunday and early Monday had knocked trees into power lines, potentially causing dry foliage and grass to ignite.  

Why many didn’t get cellphone warnings before Northern California wildfires swept through -- As fast-moving fires invaded neighborhoods across Northern California this week, residents in Napa and Sonoma counties said they were alerted to the approaching disaster by frantic shouts from neighbors, honking horns, blaring smoke alarms and even the noise of an American flag whipping in the intense winds.But it’s becoming increasingly clear that at least some residents did not receive warnings on their cellphones similar to an Amber Alert. The so-called Wireless Emergency Alert sends loud, screeching alarms or vibrations to all cellphones in a geographic area unless a user specifically opts out.On Wednesday, officials faced questions about why authorities could not reach more people as the fires barreled toward homes late Sunday night and early Monday morning.Sonoma County Sheriff Rob Giordano said Wednesday that the county sent out warnings through its SoCoAlert service and Nixle, both systems that require residents to register in advance in order to receive messages. The county also sent out reverse 911 calls to landlines in unincorporated areas. Santa Rosa, where block after block of suburban homes was destroyed, sent out alerts through SoCoAlert, Nixle and on social media.Sonoma County is among dozens of California jurisdictions that applied for and received authority from the federal government to issue Wireless Emergency Alerts. It’s unclear whether the county tried to use the system this week and, if so, why it didn’t reach some people. The death toll from the fires rose Wednesday to at least 23, with some victims simply unable to outrun the flames. An estimated 3,500 homes, businesses and other structures were burned.  In the devastated Coffey Park neighborhood of Santa Rosa, some residents of scorched homes said they were surprised they didn’t get an alert on their phones.

Shocking Aerial Footage Shows Devastating Aftermath Of "California's Deadliest Wildfire Disaster" -  With at least 29 dead, and over 3500 houses destroyed, the devastating series of fires that has ravaged Northern California's Wine Country has to be seen to be believed. As smoke clogs the air up to 100 miles away and with schools and sports programs shut down across the entire NorCal region, this disaster is already being called states deadliest wildfire in history. “These fires are a long way from being contained, so we’re doing the best we can for people that have been displaced and help them to hopefully rebuild their lives”said Barry Dugan, a Sonoma County spokesman. Have already burned more than 191,000 acres - an area nearly the size of New York City. Entire neighborhoods have been lost... But the park survived... But Kmart was not so lucky... As the following shocking aerial footage shows, there is nothing left of some of the states (and country's) most beautiful places to live... Aerial footage shows the devastating aftermath of the wildfires in California: whole neighborhoods razed to the ground. At least 29 dead.   pic.twitter.com/LpFgHxDgrq — BNO News (@BNONews) October 12, 2017  But, as Michael Snyder notes, the true extent of the devastation will not be known until the crisis is over, and it looks like the worst chapters may still be ahead. USA Today is reporting that no rain is in the forecast, and strong winds are going to continue to push wildfires very rapidly across the region… “No rainfall is forecast for ongoing fires in California,” the weather service said. “Strong winds behind the front will bring elevated-to-critical fire weather threats to active fires across northern California today.” Normally, it is one of the most beautiful areas on the entire planet, but now it is literally being transformed into a complete and total nightmare.

Death toll from Northern California fires jumps to at least 34; 5,700 structures destroyed - LA Times: The grim toll from the Northern California wildfires continued to rise Friday as officials said an estimated 5,700 structures were destroyed and that at least 34 people died. Firefighters continued to gain control of some fires scorching wine country, thanks in part to continued calm winds in some parts of the region. Officials expect the death toll to rise as search efforts continue in neighborhoods from Santa Rosa to the hills of Napa County.In Mendocino County, where at least nine people have died, officials identified three victims from the Redwood Valley: Kai Logan Shepherd, 14; Roy Howard Bowman, 87; and his wife, Irma Elsie Bowman, 88.The teenager was found near his family’s house on the 11300 block of West Road. Authorities believe he was trying to escape the fire when he was overtaken by flames, according to a Mendocino County Sheriff’s Department statement.The Bowmans were found in their home on the 4000 block of Fisher Lake Drive. “The residence was completely destroyed by the fire,” according to the Mendocino County Sheriff’s Department statement.The Redwood Valley fire in Mendocino County has burned 34,000 acres and was 10% contained as of Friday. Between that fire and the 2,500-acre Sulphur fire, about 8,000 people have been evacuated, according to the California Department of Forestry and Fire Protection. “Steep inaccessible terrain coupled with critical fuel moistures, and northwest winds will provide challenges for crews working on the fire,” a Cal Fire incident report read Thursday night.

California fire cause mystery: PG&E lines fell in winds that weren’t ‘hurricane strength’ --On Tuesday, the Bay Area News Group reported that Sonoma County emergency dispatchers sent fire crews to at least 10 reports of downed power lines and exploding transformers as the North Bay fires were starting around 9:22 p.m.  In response, PG&E said that “hurricane strength winds in excess of 75 mph in some cases” had damaged their equipment, but they said it was too early to speculate about what started the fires. However, wind speeds were only about half that level, as the lines started to come down, the weather station records show. At a weather station in north Santa Rosa where the Tubbs fire started, the peak wind gusts at 9:29 p.m. hit 30 mph. An hour later, they were 41 mph. Similarly, at another weather station east of the city of Napa, on Atlas Peak, where the Atlas fire started, wind gusts at 9:29 p.m. peaked at 32 mph. An hour later they were 30 mph. Both speeds were substantially under the speed that power lines must be able to withstand winds under state law: at least 56 mph. “This is classic PG&E — trying to spin things without first taking a look at the hard facts,” said Burlingame attorney Frank Pitre. “The winds were well within the threshold of design standards. If they failed, this was a failure in their system.” Investigators are looking at power line failures as a possible cause of the historic fires. PG&E officials did not respond to specific questions about the wind speeds and whether their power lines were in compliance with state safety laws.

The Deadliest Fires in California History Aren’t Over Yet - The forecast is grim: Another round of dry, windy, fire-stoking weather is set to sweep across California from late Friday into the weekend. As of 10 am PDT Friday, fire weather conditions are predicted by the NOAA/NWS Storm Prediction Center to be in the “critical” range (the second highest alert level) from Friday through Saturday across two areas: the hard-hit North San Francisco Bay region and the coastal mountain ranges and foothills north of the Los Angeles Basin. In SPC’s Day 2 outlook issued Friday afternoon, a new area of critical conditions was predicted for Saturday in the Colorado River valley near Las Vegas. This weekend’s pattern appears nearly as dangerous as the one that pushed gale-force winds and parched air into California’s wine country late Sunday night, triggering a deadly swarm of fires—many of which were still less than 25% contained on Friday. As was the case on Sunday night, an upper-level trough sweeping through the western U.S. will push a strong surface high into the Great Basin. The flow around that high will force arid air westward, into and over the coastal ranges of California. As this already-dry air descends, it heats up through compression, and the relative humidity drops. Winds could gust as high as 50-60 mph on higher terrain from late Friday into early Saturday across the North Bay Mountains, East Bay Hills, and the Diablo Range, and relative humidities as low as 10% are possible. The highest threat areas noted by NWS/San Francisco included the Napa County hills, the Mount Saint Helena area, the hills of eastern Sonoma County, and the hills of Marin County around Mount Tamalpais. Across the south slopes of the L.A. and Ventura County mountains, wind gusts are expected to peak in the 30-45-mph range from Saturday into early Sunday, with relative humidities dropping as low as 5%. Conditions should begin to improve in the North Bay late Saturday and over the L.A. region on Sunday.

Brazil’s worst month ever for forest fires blamed on human activity --  Brazil has seen more forest fires in September than in any single month since records began, and authorities have warned that 2017 could surpass the worst year on record if action is not taken soon. Experts say that the blazes are almost exclusively due to human activity, and they attribute the uptick to the expansion of agriculture and a reduction of oversight and surveillance. Lower than average rainfall in this year’s dry season is also an exacerbating factor. The National Institute of Space Research (INPE) has detected 106,000 fires destroying natural vegetation so far this month — the highest number in a single month since records began in 1998, said Alberto Setzer, coordinator of INPE’s fire monitoring satellite program. “It is fundamental to understand that these are not natural fires. They are manmade,” Setzer said. Fires are commonly used during Brazil’s dry period to deforest land and clear it for raising cattle or other agricultural or extraction purposes. The total number of blazes since 1 January was 196,000, and Seltzer expressed concern that — with the dry season continuing in Brazil’s Amazon — 2017 could surpass the worst year on record, 2004, when there were 270,000 fires. According to INPE, deforestation has risen continuously since 2012, when a new forest code that gave amnesty to deforesters was introduced. The last available data for 2016 showed a 29 percent rise since the previous year. Burning is illegal and carries heavy fines, but fire is often used to clear land for pasture or crops and hunting or results from land conflicts.

Winds, floods and fire: US ties record for costly weather - (AP) — Howling winds, deadly floods, fire and ice so far this year have pushed the U.S. into a tie for weather disasters that topped $1 billion in damages. There have been 15 costly disasters through September, tying 2011 for the most billion-dollar weather disasters for the first nine months of a year. The record for a year is 16, and the hurricane season is not over yet. The figures released Friday by the National Oceanic and Atmospheric Administration include three hurricanes, three tornado outbreaks, four severe storms, two floods, a drought, a freeze and wildfires. NOAA climate scientist Adam Smith said 2017 is shaping up to be an unprecedented year. It is likely to tie or break the record for billion-dollar weather disasters that was set in 2005, the year of Hurricane Katrina and other deadly storms. NOAA hasn't calculated the costs from hurricanes Harvey, Irma and Maria, but an outside disaster risk company estimates the U.S. damage from the three hurricanes to be around $150 billion. The remaining disasters so far this year have cost more than $21.7 billion and killed 282 people, according to NOAA. Damage figures are adjusted for inflation; records for billion-dollar disasters go back to 1980. Between 1980 and 2007, the U.S. averaged only four billion-dollar disasters per year. In the decade since, the country has averaged 11 per year. Experts blame a combination of factors.

Trump Taps AccuWeather CEO to Head NOAA -- President Donald Trump announced his nomination of Barry Myers, the CEO of private weather company AccuWeather, to lead the U.S. National Oceanic and Atmospheric Administration ( NOAA ), the country's foremost scientific agency for oceanic and climate research. The White House praised Myers and his company for its "highest grossing years, and its largest global web and mobile audience growth. He is one of the world's leading authorities on the use of weather information." But critics worry about the wealthy businessman's potential conflicts of interest, especially his support of a highly criticized bill that would have shifted taxpayer-funded National Weather Service data to for-profit companies. Companies such as AccuWeather and The Weather Channel. The bill was ultimately unsuccessful. Former NOAA scientist and manager Andrew A. Rosenberg, who is currently the director of the Center for Science and Democracy at the Union of Concerned Scientists , wrote :  Basically, [AccuWeather's] business model is to take NOAA data and products on weather, developed with taxpayer dollars, and deliver them to the public in a proprietary form that customers want. [Myers] has been a strong advocate against NOAA having the capability to provide such products directly to the public, hence the rather boring form of NOAA forecasts which is interpreted and commoditized by companies like AccuWeather and many others.  AccuWeather has been active in efforts to undercut the role of NOAA. In 2005, AccuWeather, under the leadership of Myers' brother Dr. Joel Myers, worked with Senator Rick Santorum on a bill to severely restrict the National Weather Service's ability to provide weather forecasts to the public.

World Meteorological Organization predicts upcoming weak La Nina conditions (Xinhua) — Large parts of the world may expect, for the second consecutive year, weak La Nina conditions that will influence the local weather in the next few months, according to an update from the World Meteorological Organization (WMO) on Friday. The WMO says the upcoming La Nina conditions may develop with a probability of 50 to 55 percent in the final quarter of 2017, and that the La Nina event, if it does occur, will likely remain weak and conditions are expected to return to ENSO-neutral in the first quarter of 2018. For a typical La Nina event to occur, it is essential for both ocean and atmosphere to display the associated characteristic features. The WMO says since August, sea surface temperatures in the eastern tropical Pacific have cooled rapidly, approaching La Nina levels, while atmospheric patterns have, however, largely remained ENSO-neutral. La Nina, also known as a "cold event," refers to the large-scale cooling of the ocean surface temperatures in the central and eastern equatorial Pacific along with changes in the tropical atmospheric circulation.  Areas which receive below average rainfall during an El Nino tend to receive above average rainfall during a La Nina and vice versa.

La Niña is expected this winter. What will that mean for our weather? - La Niña, the cooler sibling of El Niño, is likely to form over the next few months, federal government forecasters said Thursday. Specifically, there's a 55 to 65% chance that a La Niña will develop during the fall and winter of 2017-18, the Climate Prediction Center said. The La Niña climate pattern — a natural cycle marked by cooler-than-average ocean water in the central Pacific Ocean — is one of the main drivers of weather in the U.S. and around the world, especially during the late fall, winter and early spring.A typical La Niña winter in the U.S. brings cold and snow to the Northwest and unusually dry conditions to most of the southern tier of the U.S., according to the prediction center. The Southeast and Mid-Atlantic also tend to see warmer-than-average temperatures during a La Niña winter. However, the Upper Midwest into New York and New England tend to see colder-than-average temperatures, the Weather Channel said. Globally, La Niña often brings heavy rainfall to Indonesia, the Philippines, northern Australia and southern Africa.The prediction center said we are now under a "La Niña watch," which means the pattern is likely to form within the next few months. The entire natural climate cycle is officially known as the El Niño – Southern Oscillation (ENSO), a see-saw dance of warmer and cooler seawater in the Pacific Ocean.

Massive October king tide gives Miami another taste of climate change -- A month after Hurricane Irma, the Atlantic Ocean is back in the streets of South Florida. This time it’s thanks to a king tide, the “sunny-day” flooding that offers American beach communities from Virginia to Florida an annual preview of sea level rise.  The dire, city-sinking-into-Atlantis warnings that countless scientists and major magazines have predicted is not coming in the future — it’s already here, and city officials are struggling to react. The same areas of the county that flooded today were also inundated when the remnants of Tropical Storm Emily hit in August. King tides are determined by the orbits and alignments of the Earth, moon and sun. In South Florida, they occur each fall, but in recent years they’ve gotten increasingly dramatic. In Miami Beach, flooding from high tides soared 400 percent between 2006 and 2016, University of Miami researchers found.Earlier this year, Miami Beach initiated $100 million in spending to raise roads, redesign sewers and install pumps to keep the tidal impact in check. Across Biscayne Bay, Miami will vote in November on whether to approve Mayor Tomás Regalado’s “Miami Forever” bond issue, a $400-million tax increase that includes nearly $200 million for seawalls and drainage pumps, in addition to money for housing and economic development.

10 weeks, 10 hurricanes, and a 124-year-old record is matched - With Tropical Storm Ophelia’s transition to Hurricane Ophelia on Wednesday, 2017 became the first year in more than a century — and only the fourth on record — in which 10 Atlantic storms in a row reached hurricane strength.Franklin. Gert. Harvey. Irma. Jose. Katia. Lee. Maria. Nate. Ophelia.Ophelia, far out in the Atlantic, does not pose a threat to the United States, though it may affect Ireland. But it puts this year in the history books by at least one measure. The last time 10 consecutive Atlantic storms became hurricanes was in 1893 — and because tracking technology was far more primitive then, meteorologists say, some weak tropical storms or tropical depressions may have gone undetected within that streak.There were also 10-hurricane runs in 1878 and 1886, said Bob Henson, a meteorologist for Weather Underground. But since modern records began in 1851, there has never been an 11-hurricane stretch. Since Hurricane Franklin formed on Aug. 7, Mr. Henson said, there has been “maybe a week total without a named storm roaming the Atlantic somewhere.” Two of the 10 hurricanes in that period, Irma and Maria, reached the highest level, Category 5. Two others, Harvey and Jose, reached Category 4. Within a single month from mid-August to mid-September, six hurricanes developed. The number of named storms — 10 hurricanes and five tropical storms, for a total of 15 — has already made the 2017 Atlantic hurricane season one of the busiest on record, and there is still more than a month and a half to go before it officially ends.

Florida's Farmers Produce Smallest Orange Harvest Since WWII After Irma Wiped Out Half Of Crops -- Hurricane Irma wiped out nearly 50% of Florida’s iconic orange crop when it buffeted the state with 160 mph winds and a massive storm surge last month, sending orange concentrate futures rocketing higher and stoking speculation that the state’s embattled orange growers – already struggling to fend off a worsening “greening” epidemic that’s constrained production over the past decade – might never recover. And in a development that confirmed traders fears that this year’s crop could be the smallest in decades, which in turn increases the likelihood that prices will remain elevated for the time being (no doubt conferring some small boost to headline CPI), Bloomberg is reporting that the state’s 2017 orange crop was its smallest since 1942, with 31 million boxes harvested. Oranges are also grown in California, but the drop in Florida orange stocks was largely responsible for the smallest national yield since 1964. In the season that ended Sept. 30, orange output was 68.7 million boxes, according to US Department of Agriculture data. The record low was 4 million boxes in 1918. The data go back to 1913.

A Month After Hurricane Irma, Florida Cities Are Still Struggling to Clean Up - It’s been nearly a month since Hurricane Irma battered Florida, but localities there are still struggling with one of the most basic tasks of recovery: the clean-up.Companies that cities contracted with before hurricane season have struggled to meet the huge demand in Florida, where two-thirds of the counties in the state are covered by disaster declarations. With high demand and short supply for debris haulers, local governments often find themselves competing with each other for service. Big players including Miami-Dade County and the Florida Department of Transportation raised the rates they’re paying waste haulers, which siphoned off workers who might otherwise have helped clean-up efforts in the rest of the state.That puts other governments in a tight spot: Do they raise their rates, too? And, if they do, can they afford to compete with bigger agencies, especially when they don’t know whether the federal government will reimburse them for the higher rates?  Daniel Stermer, the mayor of Weston, a wealthy suburb near Fort Lauderdale, says the wide swath of damage makes it harder for anyone to attract enough workers. The debris haulers often come from out of state, and travel across the country in the wake of disasters. Many of them went to Texas to clean up after Hurricane Harvey a week before Irma pummeled Florida and Georgia. Irma’s huge trail of destruction further spread out the people and equipment that responded.   But there’s not much cities can do about it, says Stermer, who is the Broward County League of Cities' point person on debris removal. “What are we going to do? Go to court?” he says. “That’s not going to fix the problem today. Everybody wants it done, and they want it done yesterday.”

Texas Official After Harvey: The ‘Red Cross Was Not There’ -- Pro Publica -- Once again, there were appeals for donations to the Red Cross. And once again, local officials are saying the charity hasn’t delivered. The Red Cross’ anemic response to Hurricane Harvey left officials in several Texas counties seething, emails obtained by ProPublica show. In some cases, the Red Cross simply failed to show up as it promised it would. In DeWitt, a county of 20,000 where Harvey ripped apart the roof of a hotel, Emergency Management Coordinator Cyndi Smith upbraided a Red Cross official in a Sept. 9 email: “Red Cross was not there as they were suppose[d] to be with the shelter and again no communication to what this is actually about and that you have been in DeWitt County doing anything.” With fewer than 24 hours’ notice, Micah Dyer, a school superintendent in DeWitt County, was forced to run a shelter on his own in an unused district building that would eventually house 400 people. For the first three days the shelter was opened, only two Red Cross volunteers were there — neither had any experience running a shelter, Dyer said in an interview. “Every hot meal came from us,” Dyer said. “[School district employees] had to go to our pantries and walk-in coolers and get whatever we could get so people would have food.” Dyer says the Red Cross didn’t appear with supplies until the fourth day of the storm, and didn’t bring enough cots or food for those housed in the shelter, he said. A significant portion of the Meals-Ready-to-Eat the charity did bring had gone bad, he said. We have only a partial picture of the Red Cross’ response to the massive storm. ProPublica received emails through public records requests from several counties, large and small. But they don’t cover the full swath of the state affected by the storm. Still, the frustration many authorities felt with the Red Cross was striking. Officials in Jefferson County, which contains Beaumont, were so fed up with the Red Cross that they kicked out a charity employee assigned to work with government officials from the headquarters for the storm response.

US Virgin Islands: The American citizens battered by hurricane Maria - and forgotten - Power lines droop over the main roads in Charlotte Amalie, the territory’s capital. More than half of the roof of St Thomas’s commercial airport no longer exists, replaced with sky blue tarps that ripple in the breeze. All the territory’s schools remain closed, with hopes to reopen on Tuesday. Around 90% of the territory is without power and the vast majority of the population are still without potable water. While the plight of neighbouring Puerto Rico, hit hard by Maria over two weeks ago, has prompted a national outcry in the face of a slow federal recovery effort, the continuing crisis on the US Virgin Islands, home to 100,000 US citizens, has received less focus.  The White House blamed “difficult logistics” for preventing Donald Trump from stopping here during his trip to Puerto Rico earlier in the week. But on Friday vice-president Mike Pence flew into the American territory’s second island of St Croix, where Maria hit the hardest. He vowed that the administration “will be with you every day until the US Virgin Islands comes all the way back”.  . “There is no country that responds to disasters like the United States of America,”  At around the same time the politicians were speaking, 32-year-old Tamika Francis was sifting through detritus at the Tutu Hi-Rise public housing buildings just outside of Charlotte Amalie, where she lives. Entire facades were blown out – front to back – by Irma. A 38-year-old woman was killed after falling from the building during the winds, one of five fatalities in the territories. When Maria hit, two weeks later, it dumped heavy rainfall on to the partially skeletal building, flooding it once again.  What is left looks like a bombsite. The remnants of residents’ lives – refrigerators, mattresses, pots, pans, toilet seats, books – are strewn in piles on the hilltop.

FEMA restores deleted Puerto Rico stats after uproar | TheHill: The Federal Emergency Management Agency (FEMA) has restored statistics on its website on Puerto Rico's access to water and electricity following outrage over their removal, The Washington Post reports. The agency posted the updated statistics on Puerto Rico's recovery on Friday after drawing criticism for inexplicably removing them on Thursday morning. FEMA's website now reports that 9.2 percent of Puerto Ricans have access to power, after Hurricane Maria wiped out the island's entire electrical grid. More than half of Puerto Ricans now have access to clean drinking water through the territory's sewer authority, at 55.5 percent. A FEMA spokesperson originally pointed the Post to the listing of the statistics on a web page run by the Puerto Rico governor's office, which was entirely in Spanish, but did not explain why the statistics had been removed. The Trump administration has faced criticism over its handling of the humanitarian crisis following Hurricane Maria in Puerto Rico. The president visited the island on Tuesday and has said that the trip was "lovely." He added, "We only heard thank-yous from the people of Puerto Rico” on the response to his administration's hurricane relief efforts. Access to power and water has been at the center of the federal effort to aid in the island's recovery, which is being led by FEMA, the Department of Defense and a number of military teams focused on delivering life-saving resources to remote parts of the island.

Google Is Using Hot Air Balloons To Restore Cell Service In Puerto Rico --- Alphabet Inc., Google’s corporate parent, received permission on Friday from the FCC to begin providing emergency cellular service to hurricane-ravaged Puerto Rico using balloons. The effort appears to be a dry run for Google X’s “Project Loon” moonshot program, which ultimately aims to beam internet across the world using high-altitude balloons. 2) We've granted an experimental license to Project Loon; it could help Puerto Ricans access cellular service. https://t.co/VJPbZ0ipYopic.twitter.com/31IrPhDW00 — Ajit Pai (@AjitPaiFCC) October 7, 2017  Pai is also waiving regulations on telecom providers operating in Puerto Rico for six months to allow them to focus on the recovery effort.4) We've also extended deadlines for telecom providers, allowing them to focus on restoring networks over paperwork. https://t.co/mo2fj4FELMpic.twitter.com/VvMtg1g9oO — Ajit Pai (@AjitPaiFCC) October 7, 2017  Pai said on Friday he was launching a Hurricane Recovery Task Force focused on providing aid to Puerto Rico and the U.S. Virgin Islands. The agency has also reportedly been working with private companies since the storm to devise ways to more quickly restore the island’s downed communications infrastructure, the Hill reported. Eight-three percent of the island's cellular sites remain out of commission, making communication on and off the island difficult, according to the agency.

Tesla to send more battery installers to Puerto Rico to restore power | Reuters: - U.S. electric car and battery maker Tesla Inc’s CEO Elon Musk said on Friday the company will send more battery installers to Puerto Rico to help restore power after Hurricane Maria knocked out all power on the island over two weeks ago. Musk also said in a tweet that he looked forward to talking to Puerto Rico Governor Ricardo Rossello on Friday about what Tesla could do to help restore power. “The internal Tesla Powerwall install team in (Puerto Rico) is very small right now. Sending experienced installers from continental U.S. to hire and train local team as fast as possible,” Elon Musk said in a tweet, referring to the company’s Powerwall battery system. Tesla declined to comment further. In late September, Tesla said it was sending hundreds of batteries that can store power generated by solar panels to Puerto Rico to provide emergency help in the wake of Hurricane Maria. Maria struck Puerto Rico on Sept. 20 as a very dangerous Category 4 hurricane with winds up to 155 miles per hour (249 km per hour), cutting off power to all 3.4 million residents on the island. As of Thursday, Puerto Rico’s power company, the Puerto Rico Electric Power Authority (PREPA), had restored power to only about 9 percent of the island’s electric customers.

Most of Puerto Rico remains dark nearly three weeks after storm - It’s been almost three weeks since Hurricane Maria slammed into Puerto Rico and most of the island is still without electricity. The U.S. Department of Energy said Monday that 85 percent of customers lack power. Some portions of feeder lines have been restored and about 30 percent of the island’s substations are back online, the agency said. Crews are trickling in to help the Puerto Rico Electric Power Authority restore service, which could be out for months. The slow pace of the recovery has prodded Puerto Rico Governor Ricardo Rossello to ask Tesla Inc.’s Elon Musk for help rebuilding the grid with solar and batteries. The U.S. solar industry is also airlifting gear to the island as part of a humanitarian effort and to show how its technology can help keep the lights on after a natural disaster. 

Minus electrical grid, Puerto Rico becomes generator island -  María Aguilera, 57, a teacher, was waiting in the line that had formed outside the Planet Honda showroom Thursday morning, with Puerto Ricans waiting to buy the most essential machines on the post-hurricane landscape: portable generators, to light their powerless homes. When the sun sets these days, she said, she relies on candles for light. And like everyone else in Puerto Rico — including Gov. Ricardo A. Rosselló — Ms. Aguilera said she had no idea when the power grid might be restored. “From the things I’ve seen with the infrastructure,” she said, “it could be months.” Hurricane Maria’s near total destruction of the commonwealth’s electric power grid has transformed Puerto Rico into Generator Island. Running on gas or diesel, and ranging from lawn mower to moving-truck size, the generators are the only option for the roughly 90 percent of the island that has no access to the decimated grid. Generators now power big-box stores, high-rise apartment buildings, auto shops, fast-food restaurants, wastewater treatment plants and little country homes. And their low, incessant groan is the new drone note in the discordant symphony of post-storm Puerto Rican life. The generators are a temporary fix that is raising health and safety concerns and highlighting the stark divisions of class in a place with a 45 percent poverty rate. They are also the only option for most Puerto Ricans for now, as the island struggles with restoring its electrical system — by far the most important and complex challenge the storm has presented. In a news conference on Friday, Mr. Rosselló could not say when the system, which was infamously fragile before the storm, would be fully restored. 

Puerto Rico’s $74 Billion Burden Left It Helpless When Maria Hit - Year after year, as Puerto Rico’s government drew ever closer to ruin, it cut hundreds of millions of dollars from roads, schools and other public works.It neglected the electricity system, leaving it dilapidated and prone to prolonged outages. The water utility, which was leaking untreated sewage, put a $1.4 billion construction plan on hold. At least 5,800 police and firefighting jobs were cut. Unable to cover its share, Puerto Rico lost federal funds for work on its 4,800 miles (7,700 kilometers) of roads. Long before Hurricane Maria struck Sept. 20, a man-made disaster left the bankrupt U.S. commonwealth vulnerable, according to a review of the territory’s finances and $74 billion debt.While Puerto Rico’s political leaders almost doubled the debt since 2006, proceeds were often used to keep the bureaucracy afloat, paper over deficits or finance projects that did little to pull the economy from recession. After investors stopped buying the U.S. territory’s bonds, agencies warned that the electricity and water systems were falling into decay. Investments in roads, schools, utilities and other public projects slid to $906 million last year from $2.4 billion in 2012, according to the Government Development Bank.“This devastation is the byproduct of a long-standing set of decisions,” Governor Ricardo Rossello, who took office in January, said in an interview, referring to the crippled power grid. “It is something we knew was going to happen.” Almost three weeks after Maria pounded Puerto Rico with 155 mile-per-hour winds, only 15 percent of the 3.4 million residents have electricity, nearly half the phone service is out and about 40 percent of customers still wait for clean water. The cyclone caused an estimated $95 billion of damage, more than a year’s economic output, according to figures cited by the island’s federal oversight board.   “The decades-long failure to provide much-needed maintenance to key infrastructure in Puerto Rico means that the electric grid, principal roads, and water treatment and distribution plants were in an already weakened state,” Sergio Marxuach, policy director for the Center for a New Economy, a San Juan nonprofit. “As a result, the already devastating power of the storms was magnified.”

Number of people without electricity in Puerto Rico still rising - The number of residents of the U.S. territory of Puerto Rico without power is still increasing as the island recovers from major hurricanes that left millions of people without electricity and clean drinking water. Puerto Rico's government says that roughly 10 percent of the island's 3.4 million U.S. citizens have electricity as of Tuesday morning, a decrease of about six percentage points from Monday. The island's electrical grid was almost completely destroyed by storm damage from Hurricane Maria last month.  Yesterday, 84% of people in Puerto Rico had no power (per govt stats on status.pr).Today, it's gone up, to 90% without power. pic.twitter.com/5WnCA8mrhf — Jennifer Bendery (@jbendery) October 11, 2017   The news comes just one day after Puerto Rico's Gov. Ricardo Rosselló asked the federal government for an additional $4.6 billion in funding beyond the Trump administration’s request last week for $29 billion from Congress for relief efforts. “Puerto Rico has experienced a natural disaster of a magnitude not seen in over a century, and we are doing everything possible to address the needs of the American citizens of Puerto Rico during this time of crisis,” Rosselló wrote. “However, the unprecedented level of destruction, coupled with the almost complete shut-down of business in Puerto Rico, have made it impossible for us to meet the considerable human needs without the measures proposed above.” The White House also announced Monday that it would allow a 10-day waiver temporarily blocking the Jones Act to expire, meaning foreign ships can no longer bring aid to the hurricane-ravaged island from U.S. ports.

PREPA forgoes mutual aid, opting for little-known contractor | Utility Dive: The Puerto Rico Electric Power Authority (PREPA) declined to ask for help from mainland electric utilities in the days after Hurricane Maria, instead turning to a small Montana-based contractor to carry out grid restoration practices. Earlier this week, PREPA CEO Ricardo Ramos told E&E News that his bankrupt utility did not reach out to munis on the continental U.S. because he was unsure it could pay them back for assistance. About 90% of the island remains without power weeks after the storm hit. The American Public Power Association (APPA), the trade group for U.S. munis, confirmed that mutual assistance programs were not activated, but said PREPA had already contracted with Whitefish Energy by the time the trade group convened a conference call to coordinate aid. PREPA did not respond to requests for comment. Headlines out of Puerto Rico left many power sector observers on the mainland scratching their heads this week. With more than 90% of his customers without power, E&E reported PREPA declined to reach out to mainland utilities standing by to offer assistance in Puerto Rico over cost concerns. "The day that the [Army] Corps of Engineers showed up and offered the assistance, we immediately accepted because we knew that financially it was a better model," Ramos told the outlet. The Army Corps of Engineers is overseeing grid restoration on the island and on Monday awarded its first contract — $35 million for a 50 MW generator at a San Juan power plant. But an APPA official told Utility Dive that PREPA had already signed a contract for grid restoration with Whitefish Energy by the time the municipal utility trade group convened its first conference call with the utility on mutual assistance. 

Puerto Rico: US officials privately acknowledge serious food shortage -- Federal officials privately admit there is a massive shortage of meals in Puerto Rico three weeks after Hurricane Maria devastated the island.  Officials at the Federal Emergency Management Agency (Fema) say that the government and its partners are only providing 200,000 meals a day to meet the needs of more than 2 million people. That is a daily shortfall of between 1.8m and 5.8m meals.   “We are 1.8 million meals short,” said one senior Fema official. “That is why we need the urgency. And it’s not going away. We’re doing this much today, but it has to be sustained over several months.”   The scale of the food crisis dwarfs the more widely publicized challenges of restoring power and communications. More than a third of Puerto Ricans are still struggling to live without drinking water.However, Fema provides no details on food deliveries, keeping its public statements to the most general terms. On its website, Fema says it has provided “millions of meals and millions of liters of water”.In fact many of those meals are military ready-to-eat meals that civilians find hard to digest if consumed for more than a few days. Now the biggest provider of cooked meals says Fema is putting its operations at risk of closure.World Central Kitchen, founded by chef José Andrés, cooks and distributes 90,000 meals a day through a network of local chefs and kitchens.   Its Fema contract, to provide just 20,000 meals a day, ended on Tuesday. Fema insists it is bound by federal rules that mean it will take several weeks for a new contract to emerge to feed more Americans. “There is no urgency in the government response to this humanitarian crisis,” Andrés said. “They have all the officials and armed guards at headquarters, but they have no information about the island. They don’t even have a map they can share about who needs food. Fema is over-paying and it is under-delivering.”

Puerto Ricans face growing threat from disease after Maria, experts fear -Three weeks after Hurricane Maria devastated Puerto Rico, the 3.4 million U.S. citizens living on the island are now facing a growing public health threat – disease brought about by the conditions after the storm ravaged the island. And experts fear that this situation could get worse before it gets better. The storm, which officials already blame for 44 deaths, has left nearly 90 percent of the island still without power, and a third of potential water sources undrinkable. While 97 percent (65 of 67) of hospitals are now open, only 43 of these hospitals have electricity, and even those with electricity may be running at limited capacity.  “The hurricane has left us in a critical situation with regards to medical infrastructure needed to save lives,” said Dr. Rajeev Fernando, chief of infectious diseases at Stony Brook Southampton Hospital in New York, in an email to ABC News. Fernando is joining a team of doctors in Puerto Rico in order to help treat patients and protect them from disease-related threats to their health. And he says that he expects that the number of sick Puerto Ricans could climb, since many infections take two to three weeks to manifest. “Acute diarrheal diseases are a big concern and are commonly seen after flooding,” he said, adding that mosquito-borne diseases may also pose a threat due to the abundance of standing water from floods.  But he also noted that another threat – a life-threatening infection known as leptospirosis – could also put the lives of many at risk.  In fact, Puerto Rico Governor Ricardo A. Rossello said on Wednesday that health officials at the CDC have already begun investigating four recent deaths to determine whether the disease, which is rare in the United States, might be behind them. Leptospirosis is a bacterial disease that can be transmitted from animals to humans. And while people can get it from livestock and domestic pets, rats and other rodents can also spread it. Direct contact with these animals or contact with their urine – through contaminated food or water, or through cuts and scrapes – can lead to infection.

Puerto Rico's hurricane death toll rises to 45 - Nearly three weeks after Hurricane Maria pummeled Puerto Rico, the vast majority of the island remains without power and the death toll from the storm has risen to 45, authorities said.At least 113 people remain unaccounted for, according to Karixia Ortiz, a spokeswoman for Puerto Rico's Department of Public Safety.The recovery has moved slowly since Maria struck the US territory on September 20, leaving most of the island without basic services such as power and running water, according to residents, relief workers and local elected officials.  Acting US Department of Homeland Security Elaine Duke will make her second trip to the island on Thursday, DHS spokesman David Lapan said Wednesday.The visit comes as hospitals throughout the cash-strapped island of 3.4 million people have been running low on medicine and fuel. Some residents and local elected officials have said they expect the death toll to rise.  In the town of Caguas, in the central mountain range, some patients -- including one breathing with the aid of a ventilator -- had to be evacuated to the Navy hospital ship USNS Comfort near San Juan after a generator failed, Dr. Christian Rodriguez said this week.At least two people have died from leptospirosis, which spreads when the urine of infected animals gets into drinking water, San Juan Mayor Carmen Yulín Cruz told CNN Wednesday. People have been drinking water from creeks contaminated by dead animals, she said.  "We're not out of the woods yet," she said. "We are now starting to see a lot of health issues. ... So we are in a great effort, a great humanitarian effort." As of Wednesday 89% of the island was without electricity and almost 47% had no phone service, according to a website set up by the Puerto Rican government. Some 43% of the island's 313 bank branches remained closed, it said.

Florida Faces 3 Toxic Crises Triggered by Flooding - Decades of booming development in Florida—all of it built in the path of Atlantic hurricanes —have brought to a head some toxic problems the state still struggles to solve. Every major flooding event, like the one following this year's Hurricane Irma , leaches toxic waste into people's homes and drinking water .

  • Threat #1: Superfund Sites - The U.S. Environmental Protection Agency's ( EPA 's) "Superfund" program oversees the cleanup of hazardous waste sites. Ahead of Hurricane Irma, the EPA worked to secure about 80 sites ranked at the highest priority for cleanup from Miami to North Carolina—but Florida alone contains more than 50 Superfund sites at this priority level, with approximately 500 hazardous waste sites in total. Superfund sites in Florida have been linked to increased cancer risk, and experts worry that these sites are vulnerable to flooding and spreading toxic pollution .
  • Threat #2: Radioactive Waste - Florida is a unique host to two phenomena: phosphate mining, which produces radioactive waste, and sinkholes. Much of the state's land is vulnerable to giving way under the weight of soaking water—in fact, Hurricane Irma brought an increase in sinkhole activity to at least eight communities . When sinkholes form below stores of phosphate mining wastewater , that radioactive material empties into the Floridan aquifer.
  • Threat #3: Livestock Sewage - Overflowing raw sewage—84 million gallons of it—flooded homes and claimed life and limb in Florida following Hurricane Irma. And that's just sewage from cities and other communities. While human sewage is only a problem if sanitation facilities fail, livestock sewage remains unregulated and vulnerable to flooding. Florida produces millions of tons of livestock manure every year, which is either stored or use to irrigate fields in its raw, untreated form.

 Puerto Ricans desperate for water are drinking from Superfund sites   - More than three weeks since Hurricane Maria, more than a third of Puerto Ricans still don’t have access to drinking water. So some are turning to wells at Superfund sites on the island—areas designated the most toxic in US territory.  The Environmental Protection Agency, in an email Thursday (Oct 12) to reporters about its relief efforts, notes that it has received reports of people trying to drink potentially dangerous Superfund water, from wells that were sealed to avoid human exposure to toxins: “There are reports of residents obtaining, or trying to obtain, drinking water from wells at hazardous waste ‘Superfund’ sites in Puerto Rico. EPA advises against tampering with sealed and locked wells or drinking from these wells, as it may be dangerous to people’s health.” Superfund sites contain toxins typically left over from polluting industries. Even long after a site is granted Superfund status, designating it a priority for the federal government, cleanup can take decades—and even then efforts are rarely able to eliminate all toxins. The EPA says it is assessing “Superfund sites, oil sites, and chemical facilities” inundated by the storm. The agency also warned that no one should drink water from rivers or streams unless it can be boiled for longer than one minute. With 60 percent of wastewater-treatment plants out of service, “raw sewage continues to be released into waterways and is expected to continue until repairs can be made and power is restored,” the EPA wrote. “Water contaminated with livestock waste, human sewage, chemicals, and other contaminants can lead to illness when used for drinking, bathing, and other hygiene activities.” Meanwhile, 84% of the island is still without electricity, and roughly half of Puerto Ricans have no cell phone service, according to the Washington Post.

Finding water in Puerto Rico: an endless game of cat and mouse - Three weeks after Hurricane Maria tore through Puerto Rico, the challenge of finding enough water to drink and cook with remains enormous across the island, even in its largest city. People here engage in a perpetual game of cat and mouse, scouring the city for any hints of places with water to sell.  People are so desperate that on Wednesday the Environmental Protection Agency cited reports of residents trying to obtain drinking water from wells at hazardous Superfund sites. “E.P.A. advises against tampering with sealed and locked wells or drinking from these wells, as it may be dangerous to people’s health,’’ the agency said.The demand has skyrocketed, according to grocery store managers, distributors and supply companies, because safe, drinkable tap water is still largely unavailable, and deliveries of water from the outside have not kept up with demand. Even Puerto Ricans who have been told that their local water is safe to drink are avoiding it because of reports that infectious diseases are spreading on the island. The sight of water delivery trucks outside stores is prompting long lines to form. Crushes of customers snatch up new shipments even before store employees can restock empty shelves. Of 10 stores in San Juan that were visited on Tuesday and Wednesday, only one had bottled water: a Walmart store where two brawny men were loading cases of water directly off a shipping pallet into the shopping carts of people who had lined up in the back of the store. Signs posted on the walls declared a limit of one case per group.

Puerto Rico, by the numbers - Axios - The latest on what we know from Puerto Rico, per FEMA and the PR government site:

  • Boots on the ground: More than 20,000 federal civilian personnel and military service members, including more than 1,600 FEMA personnel, are on the ground in Puerto Rico and the U.S. Virgin Islands.
  • State help: 26 U.S. states are helping in PR, and 18 in the U.S. Virgin Islands.
  • Electricity: 9% of the island has power, down from 17% Thursday. Roughly 36% of cell towers have been restored.
  • Food: Approximately 87% of grocery stores are open (396 of 456).
  • Gas: Roughly 79% of retail gas stations are operational (872 of 1,100).
  • Shelter: 5,602 people remain in shelters across the island, down from 5,742 Wednesday. 107 shelters are open and operating.
  • Transportation: Only 392 miles of Puerto Rico's 5,073 miles of roads are open. All commercial airports and federally maintained ports are open, some with restrictions.
  • Education: PR's Secretary of Education told NPR Wednesday that, of the nation's 1,113 public schools, 22 reopened last week and another 145 this week.
  • Water and waste: Approximately 63% of Puerto Rico Aqueduct and Sewer Authority (PRASA) customers have potable water, down from 64% Thursday. 56% of waste water treatment plants are working on generator power, down from 60% Thursday.
  • Medical care: 97% (65/67) hospitals are open, down from 100% Tuesday. Many remain on backup power systems, and are without air conditioning. 95% (46/48) of Dialysis Centers are open, up from 91% Thursday.
  • Banks: 62% of bank branches (195 of 313) are open and operating.

Yes, The US Government Has Experimented With Controlling Hurricanes - The 2017 hurricane season has wrought more damage on the Caribbean and the Gulf Coast of the United States than any season in the last decade. Tropical Storm Harvey smashed into the Gulf, temporarily swallowing Houston and other low lying areas. Meanwhile, Hurricane Irma caused millions of dollars in damage to Florida, Puerto Rico, and other Caribbean islands, leaving millions without power and water. Along with the gusts of wind, property damage, and loss of life, this hurricane season also sparked a wide range of conspiracy theories regarding the possibility that the U.S. government or some other government could be manipulating the weather to strengthen hurricanes. These theories range from the idea that planes were spraying before and during the storms in order to help them grow and/or direct them at specific targets to others who believe the High Frequency Active Auroral Research Program (HAARP), or a similar device, was used to heat up the ionosphere and “charge” the storms to cause more destruction. There are dozens of YouTube channels where individuals focus specifically on weather manipulation and modification. They claim to have the expertise to study radar images and determine whether artificial elements were added to developing hurricanes. If you are interested in that type of research, see this. However, I will not be addressing the issue of whether or not the U.S. is currently manipulating hurricanes. I do not have the technical background to accurately report in that area. Instead, I will focus on the history of weather modification as it pertains to hurricanes. If you have limited knowledge on weather modification — or, perhaps, you even think it is a hoax — I encourage you to read on. If you are familiar with the history or science of weather modification, I also encourage you to read on, as I have included details I have not seen covered elsewhere.

Baltic Sea clams 'giving off as much gas as 20,000 cows' - BBC News: Scientists have found clams and worms in the Baltic Sea are giving off as much gas as 20,000 dairy cows. They are worried because large amounts of methane and nitrous oxides are being released from the bacteria in their guts. The discovery of these greenhouse gases means they will need to be taken into account when tackling global warming. A Cardiff and Stockholm universities' study found 10% of methane emissions from the Baltic Sea came from clams. The study's co-author Dr Ernest Chi Fru, from Cardiff University's School of Earth and Ocean Sciences, said: "What is puzzling is that the Baltic Sea makes up only about 0.1% of Earth's oceans, implying that globally, apparently harmless bivalve animals at the bottom of the world's oceans may in fact be contributing ridiculous amounts of greenhouse gases to the atmosphere that is unaccounted for." And Dr Stefano Bonaglia, from Stockholm University, added: "It sounds funny but small animals in the seafloor may act like cows in a stable, both groups being important contributors of methane due to the bacteria in their gut. The findings have also led to a warning about any plans by other scientists to farm oysters, mussels and clams and releasing them into the seas. The idea behind that move is to counter algae which is growing because of fertilisers which are washed off land by rain water into rivers and lakes. But given the amount of gases produced, the authors have warned that the potential impacts need to be considered before deciding whether to promote shellfish farming to large areas of the ocean. 

A Giant, Mysterious Hole Has Opened Up in Antarctica -- A hole as large as Lake Superior or the state of Maine has opened up in Antarctica, and scientists aren't sure why it's there. The gigantic, mysterious hole "is quite remarkable," atmospheric physicist Kent Moore, a professor at the University of Toronto's Mississauga campus, told me over the phone. "It looks like you just punched a hole in the ice." Areas of open water surrounded by sea ice, such as this one, are known as polynias. They form in coastal regions of Antarctica, Moore told me. What's strange here, though, is that this polynia is "deep in the ice pack," he said, and must have formed through other processes that aren't understood. "This is hundreds of kilometres from the ice edge. If we didn't have a satellite, we wouldn't know it was there." (It measured 80,000 k㎡ at its peak.) A polynia was observed in the same location, in Antarctica's Weddell Sea, in the 1970s, according to Moore, who's been working with the Southern Ocean Carbon and Climate Observations and Modelling (SOCCOM) group, based at Princeton University, to analyze what's going on. Back then, scientists' observation tools weren't nearly as good, so that hole remained largely unstudied. Then it went away for four decades, until last year, when it reopened for a few weeks. Now it's back again. "This is now the second year in a row it's opened after 40 years of not being there," Moore said. (It opened around September 9.) "We're still trying to figure out what's going on."

Worrying new research finds that the ocean is cutting through a key Antarctic ice shelf - A new scientific study published Tuesday has found that warm ocean water is carving an enormous channel into the underside of one of the key floating ice shelves of West Antarctica, the most vulnerable sector of the enormous ice continent. The Dotson ice shelf, which holds back two separate large glaciers, is about 1,350 square miles in area and between 1,000 and 1,600 feet thick. But on its western side, it is now only about half that thickness, said Noel Gourmelen, a researcher at the University of Edinburgh in Scotland and the lead author of the research, which was just published in Geophysical Research Letters. The reason is the same one that is believed to be shrinking glaciers and pouring ice into the ocean across West Antarctica — warm ocean water located offshore is now reaching the ice from below. In Dotson’s case, it appears the water is first flowing into the deep cavity beneath the shelf far below it, but then being turned by the Earth’s rotation and streaming upward toward the floating ice as it mixes with buoyant meltwater. The result is that the warm water continually melts one part of the shelf in particular, creating the channel. “We think that this channel is actually being carved for the last 25 years,” said Gourmelen, whose research team detected the channel using satellite observations. “It’s been thinning and melting at the base for at least 25 years, and that’s where we are now.” The work was conducted by researchers at the University of Edinburgh along with colleagues at other institutions in France, Norway, the United Kingdom and the Netherlands. The newly discovered channel is three miles wide and 37 miles long, and the scalloped region at the base of the floating ice shelf is mirrored by a long depression on its surface. Dotson ice shelf as a whole has been thinning at an average rate of more than eight feet per year since 1994, even as the speed of ice flowing outward through the shelf has increased by 180 percent. But the thinning in the channel has been far greater. The research calculates that 45 feet of ice thickness is being subtracted annually from the channel. 

Scientist Warns of Mass Marine Extinction -  Mass marine extinction may be inevitable. If humans go on burning fossil fuels under the notorious "business as usual" scenario, then by 2100 they will have added so much carbon to the world's oceans that a sixth mass extinction of marine species will follow, inexorably.  And even if the 197 nations that agreed in Paris in 2015 to take steps to limit global warming in fact do so, then by 2100 humans will have added 300 billion tons of carbon to the seas. And a U.S. scientist has calculated that the critical threshold for mass extinction stands at 310 billion tons. So in either case, the world will be condemned to, or at imminent risk of, a "great dying" of the kind that characterized the end of the geological period called the Permian, in which 95 percent of marine species vanished, or the Cretaceous era that witnessed the last of the dinosaurs.  Daniel Rothman , a geophysicist at the Massachusetts Institute of Technology, reported in the journal Science Advances that he worked through hundreds of scientific studies to identify 31 occasions of significant change in 542 million years in the planet's carbon cycle—in which plants draw down carbon from the atmosphere and cycle it through the animal community and back into the atmosphere.  For each event, including the five great mass extinctions in the geological record, he estimated the record of carbon preserved in the rocks, to find a predictable threshold at which catastrophe might be an outcome. Four of the five great extinction events lay beyond this threshold. He then considered the timescales of such extinction events to arrive at his modern-day danger zone figure of 310 billion tons.  And by 2100, unconstrained fossil fuel combustion may have tipped the planet into "unknown territory," he said.  In effect, Rothman has used a mathematical technique to predict an event many biologists believe is already happening. Pollution, the clearing of the wilderness and the disruption of habitat have already placed many species at risk . Global warming as a consequence of the combustion of fossil fuels will, they have repeatedly said, make a bad situation worse.

Earth May Be Close to 'Threshold of Catastrophe - The amount of carbon dioxide that humans will have released into the atmosphere by 2100 may be enough to trigger a sixth mass extinction, a new study suggests.  The huge spike in CO2 levels over the past century may put the world dangerously close to a "threshold of catastrophe," after which environmental instability and mass die-offs become inevitable, the new mathematical analysis finds. Even if a mass extinction is in the cards, however, it likely wouldn't be evident immediately. Rather, the process could take 10,000 years to play out, said study co-author Daniel Rothman, a geophysicist at the Massachusetts Institute of Technology.  Over Earth's 4.5-billion-year history, life has seen a lot of boom and bust times. In the past half-billion years alone, five major extinctions have wiped out huge swaths of life: the Ordovician-Silurian mass extinction, the Late Devonian mass extinction, the Permian mass extinction, the Triassic-Jurassic mass extinction and the Cretaceous-Tertiary mass extinction that wiped out the dinosaurs. The most severe was the Permian extinction, or "The Great Dying," when over 95 percent of marine life and 70 percent of land-based life died off. All these major extinctions have one similarity. "Every time there's been a major mass extinction — one of the big five — there's been a serious disruption of the global carbon cycle," Rothman said. It could be a direct link between CO2 and death due ocean acidification or an indirect link, as carbon dioxide emissions can warm a planet to unlivable temperatures and have even been linked with volcanic eruptions and the related cooling of the atmosphere. 

Conservationists take nine flights a year, despite knowing danger to environment - Conservationists may preach about the importance of going green to save the planet, but most have a carbon footprint which is virtually no different to anyone else, a new study has shown.Scientists as Cambridge University were keen to find out whether being fully informed about global warming, plastic in the ocean or the environmental impact of eating meat, triggers more ethical behaviour.But when they examined the lifestyles of conservation scientists they discovered most still flew frequently – an average of nine flights a year – ate meat or fish approximately five times a week and rarely purchased carbon offsets for their own emissions.They were also less green in travelling to work than medics, and kept more dogs and cats. A recent study suggested pets are a hefty ecological burden. It takes more than two acres of grazing pasture to keep a medium-sized dog fed with meat, while the eco-footprint of a cat is similar to a Volkswagen Golf.Even the study’s four authors - all conservation scientists - admitted that between them they took 31 flights in 2016 and had each eaten two meat dinners in the week before submitting the research.“As conservationists we must do a great deal more to lead by example,”  said lead author Dr Andrew Balmford, Professor of Conservation Science at Cambridge.“Obvious starting points include changing the ways we interact, so that attending frequent international meetings is no longer regarded as essential to making scientific progress. For many of us flying is probably the largest contributor to our personal emissions.  “While it may be hard to accept, we have to start acknowledging that increased education alone is perhaps not the panacea we would hope.”   “Our results show that conservationists pick and choose from a buffet of pro-environmental behaviours the same as everyone else.“We might eat less meat and compost more, but we fly more – and many of us still commute significant distances in gas cars.” Overall footprint scores were higher for males, US nationals, and people with higher degrees and larger incomes, but were unrelated to environmental knowledge.

Analysis: How well have climate models projected global warming? - Scientists have been making projections of future global warming using climate models of increasing complexity for the past four decades.These models, driven by atmospheric physics and biogeochemistry, play an important role in our understanding of the Earth’s climate and how it will likely change in the future. Carbon Brief has collected prominent climate model projections since 1973 to see how well they project both past and future global temperatures, as shown in the animation below. (Click the play button to start.) While some models projected less warming than we’ve experienced and some projected more, all showed surface temperature increases between 1970 and 2016 that were not too far off from what actually occurred, particularly when differences in assumed future emissions are taken into account. While climate model projections of the past benefit from knowledge of atmospheric greenhouse gas concentrations, volcanic eruptions and other radiative forcings affecting the Earth’s climate, casting forward into the future is understandably more uncertain. Climate models can be evaluated both on their ability to hindcast past temperatures and forecast future ones.Hindcasts – testing models against past temperatures – are useful because they can control for radiative forcings. Forecasts are useful because models cannot be implicitly tuned to be similar to observations. Climate models are not fit to historical temperatures, but modellers do have some knowledge of observations that can inform their choice of model parameterisations, such as cloud physics and aerosol effects. In the examples below, climate model projections published between 1973 and 2013 are compared with observed temperatures from five different organizations. The models used in the projections vary in complexity, from simple energy balance models to fully-coupled Earth System Models.

Trump administration to roll back Obama clean power rule - BBC News: The Trump administration has confirmed plans to repeal an Obama administration rule to reduce greenhouse gas emissions. Environmental Protection Agency (EPA) Administrator Scott Pruitt, who has voiced doubt of climate change, called the Clean Power Plan an overreach. President Donald Trump ordered the EPA to rewrite the rule in March. The Clean Power Plan requires states to meet carbon emission reduction targets based on their energy consumption. Mr Pruitt said he would sign the proposed rule to begin withdrawing from the plan on Tuesday. "The war on coal is over," he told a crowd in Hazard, Kentucky, on Monday. He continued: "That rule really was about picking winners and losers. "Regulatory power should not be used by any regulatory body to pick winners and losers." Mr Pruitt has previously argued that the Clean Power Plan would force states to favour renewable energy in the electricity-generation market. As Oklahoma's attorney general, he took part in a lawsuit by 27 US states against the rule. A Supreme Court ruling in February 2016 left the regulation in limbo.

Trump administration to sign climate rule repeal proposal Tuesday - EPA Administrator Scott Pruitt said Monday he will formally sign a proposal to withdraw the Obama administration's Clean Power Plan on Tuesday in Washington. "That rule really was about picking winners and losers. Regulatory power should not be used by any power to pick winners and losers," Pruitt said an event in Kentucky's coal country with Senate Majority Leader Mitch McConnell. "The last administration just simply made it up," he continued, referring to the regulation that was designed to curb carbon emissions from power plants. "When you think about the Clean Power Plan, it was not about regulating to make things regular. It was truly about regulating to pick winners and losers."  Text obtained by POLITICO on Friday shows EPA will argue that the Clean Power Plan exceeded EPA's regulatory authority by requiring fuel shifting. Pruitt reiterated that point in his remarks today. "They really interpreted that 'best system of emission reduction' as generating electricity in ways that they didn't want to use fossil fuels, so they used authority to do otherwise," he said.

International concern as US moves to end clean power plan -News that the Trump administration will move to repeal and replace the clean power plan (CPP) – a major initiative to cut emissions from the US electricity sector – has been met with concern overseas. On Wednesday, the Reuters news agency reported on a document leaked from the Environment Protection Agency (EPA) outlining a plan to scrap the Obama-era measure. It also called for input on a replacement policy that would reduce carbon emissions in fossil fuel power plants. Industry is reportedly lobbying for a weaker rule. The policy underpinned the US commitment to the Paris Agreement, which Donald Trump says he wants to leave. It would also have had a real impact on the amount of carbon dioxide going into the atmosphere. By 2030, the clean power plan would have reduced power plant emissions in the world’s second biggest polluter by 32% below 2005 levels. The CPP was the key US commitment that convinced the Chinese to enjoin a bipartisan agreement with the US on cutting emissions. That deal, between the world’s number one and two polluters, provided a platform on which the Paris climate deal was struck a year later. Rescinding the plan, said Li Shuo, climate policy advisor at Greenpeace East Asia, would be seen as a breach of the agreement in China. “This is indeed unfortunate.”

E.P.A. Announces Repeal of Major Obama-Era Carbon Emission’s Rule -- The Trump administration announced Monday that it would take formal steps to repeal President Barack Obama’s signature policy to curb greenhouse gas emissions from power plants, setting up a bitter fight over the future of America’s efforts to tackle global warming.  At an event in eastern Kentucky, Scott Pruitt, the head of the Environmental Protection Agency, said that his predecessors had departed from regulatory norms in crafting the Clean Power Plan, which was finalized in 2015 and would have pushed states to move away from coal in favor of sources of electricity that produce fewer carbon emissions. “The war on coal is over,” Mr. Pruitt said. “Tomorrow in Washington, D.C., I will be signing a proposed rule to roll back the Clean Power Plan. No better place to make that announcement than Hazard, Kentucky.” The repeal proposal, which will be filed in the Federal Register on Tuesday, fulfills a promise President Trump made to eradicate his predecessor’s environmental legacy. Eliminating the Clean Power Plan makes it less likely the United States can fulfill its promise as part of the Paris climate agreement to ratchet down emissions that are warming the planet and contributing to heat waves and sea-level rise. Mr. Trump has vowed to abandon that international accord. It also is a personal triumph for Mr. Pruitt, who as Oklahoma attorney general helped lead more than two dozen states in challenging the rule in the courts. In announcing the repeal, Mr. Pruitt made many of the same arguments that he had made for years to Congress and in lawsuits: that the Obama administration exceeded its legal authority in an effort to limit greenhouse gas emissions from power plants. A leaked draft of the repeal proposal asserts that the country would save $33 billion by not complying with the regulation and rejects the health benefits the Obama administration had calculated from the original rule.  Coal- and natural-gas-fired power plants are responsible for about one-third of America’s carbon dioxide emissions. When the Clean Power Plan was unveiled in 2015, it was expected to cut power sector emissions 32 percent by 2030, relative to 2005. While many states are already shifting away from coal power for economic reasons, experts say scrapping the rule could slow that transition.

It's Official: Trump Administration to Repeal Clean Power Plan --The Trump administration will scrap the Clean Power Plan (CPP), President Obama's signature environmental policy aimed at fighting climate change , confirming earlier reports of such a move. Environmental Protection Agency ( EPA ) Administrator Scott Pruitt said at an event in Kentucky he will sign a proposed rule on Tuesday "to withdraw the so-called clean power plan of the past administration." The Clean Power Plan, which focused on cutting emissions from coal-burning power plants, was a major target of the current administration's regulatory rollbacks. In March , President Trump signed the Executive Order on Energy Independence that called for a review of the CPP, which he considers a "war on coal." And in June, Trump infamously announced plans to withdraw the U.S. from the Paris climate agreement , a global action plan to limit temperature rise to well below 2°C to avoid dangerous climate change. Without the CPP, the U.S. will not live up to its pledge made in Paris. Pruitt, as Oklahoma's attorney general, made a career fighting EPA safeguards and was part of a coalition of state attorneys general that sued the Obama administration to block the implementation of the CPP. The Supreme Court has since put the regulation on hold until the legal challenge is completed.  "The EPA and no federal agency should ever use its authority to say to you we are going to declare war on any sector of our economy," Pruitt said Monday.

Mr. Trump Nails Shut the Coffin on Climate Relief - NY Times editorial -The Trump administration formally proposed on Tuesday to roll back yet another of President Barack Obama’s efforts to position the United States as a global leader in the fight against climate change. The move, though widely anticipated, was deeply disheartening. In March Mr. Trump ordered Scott Pruitt, the administrator of the Environmental Protection Agency, to repeal the Clean Power Plan, which was aimed at reducing carbon dioxide emissions from coal-fired power plants. Mr. Pruitt, a climate denier closely tied to the fossil fuel industry, was only too happy to oblige — boasting to an audience of Kentucky coal miners on Monday that the plan was dead and that “the war on coal is over.”All this is infuriating on several levels.It repeated the same false narrative that congressional Republicans have been peddling for years and that Mr. Trump’s minions are peddling now — that environmental regulations are job killers, that restraining greenhouse gas emissions will damage the economy, that the way forward lies in digging more coal and punching more holes in the ground in the search for oil.  It reaffirmed the administration’s blind loyalty to dirtier energy sources, ignoring the pleas of corporate leaders who know that economic momentum and new investment lie with cleaner sources of energy, and fear that without innovation their costs will rise and their competitive edge over foreign countries will be lost. It repudiated the rock-solid scientific consensus that without swift action the consequences of climate change — widespread species extinction, more devastating droughts, more Harveys and Irmas and wildfires like those now raging in Northern California — will become more likely. It offered, on a human level, more empty promises to the frightened miners who keep showing up to hear Mr. Pruitt say that coal is coming back, when any comeback is unlikely not because of regulation but because of powerful market forces favoring natural gas and renewables.

Pruitt axes Clean Power Plan, asks industry to shape replacement  - Pruitt, who challenged the CPP during his tenure as Oklahoma's Attorney General, formally moved to rescind the regulatory package on Tuesday, saying the Obama EPA had overstepped its bounds. "The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule, preventing its devastating effects to be imposed on the American people while the rule is being challenged in court," Pruitt said in signing the rule. "We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate." Pruitt's agency did not propose a replacement for the CPP, instead asking industry to help shape the next carbon rule. "Any replacement rule will be done carefully, properly, and with humility, by listening to all those affected by the rule," he said. Pruitt himself drafted an "inside of the fence" alternative to the Clean Power Plan in 2014. The narrower rule would focus on obtaining efficiency improvements through better heat rates at coal plants — an "inside the fenceline" regulation, rather than a sweeping change to the national power mix. The Clean Power Plan reached beyond individual plant upgrades by allowing generators unable to meet its emission standards to offset their power from lower carbon-emitting resources, such as renewables. Generators argued at the D.C. Circuit Court last year that amounts to forcing coal plants to subsidize their competitors or shut down. The Obama EPA and supporters of the rule said this so-called "generation shifting" merely underscores how utilities would have sought to comply with the CPP.  Even so, outside lawyers told Utility Dive that the provisions represented new or expanded interpretation of the agency's regulatory power and be the lynchpin for future legal fights.   The Clean Power Plan, finalized in 2015, never went into effect due to a freeze from the Supreme Court in early 2016 until legal challenges concluded. The D.C. Circuit put a 60-day hold on the case in April, but has since remained silent about it since that timeframe expired June 27.

Dem AG vows to sue over Clean Power Plan repeal | TheHill: New York Attorney General Eric Schneiderman (D) said Monday he will sue the Trump administration over its decision to repeal the Clean Power Plan climate regulation. “By seeking to repeal the Clean Power Plan — especially without any credible commitment to replacing it — the Trump administration’s campaign of climate change denial continues, once again putting industry special interests ahead of New Yorkers’ and all Americans’ safety, health, and the environment,” Schneiderman said in a statement. “The Trump administration’s persistent and indefensible denial of climate change — and their continued assault on actions essential to stemming its increasing devastation — is reprehensible, and I will use every available legal tool to fight their dangerous agenda,” he said. Environmental Protection Agency (EPA) Administrator Scott Pruitt Edward (Scott) Scott PruittZinke under federal investigation for speech to NHL team: report Overnight Regulation: Senate panel approves driverless car bill | House bill to change joint-employer rule advances | Treasury to withdraw proposed estate tax rule | Feds delaying Obama methane leak rule Overnight Energy: Dems take on Trump's chemical safety pick MORE said Monday that he will sign paperwork this week aiming to end the Clean Power Plan, an Obama-era rule designed to cut greenhouse gas emissions from the power sector. The agency will seek public comments on its decision to end the rule, arguing the Obama administration overstepped its legal authority when it issued the 2015 regulation. “It’s Congress that passes legislation that gives us direction, that gives us our orders as far as how we administer the statute,” Pruitt said Monday. “The last administration simply made it up.” The rule is the centerpiece of the Obama administration’s climate change work. A coalition of states, led by Schneiderman and others, defended the rule against GOP and industry lawsuits, though the Supreme Court stayed implementation of the rule in 2016 and the D.C. Circuit Court of Appeals has not decided the rule’s validity. Other attorneys general and environmentalists have indicated they’re prepared to challenge the EPA’s decision to rescind the rule. 

EPA chief: I’d ‘do away with’ wind, solar tax credits | TheHill: Environmental Protection Agency Administrator Scott Pruittsaid on Monday that the federal tax credits for the wind and solar power industries should be eliminated. Pruitt told a crowd at a Kentucky Farm Bureau event that the credits stand in the way of utility companies making the best decisions about power generation. “I would do away with these incentives that we give to wind and solar,” he said, referring to wind’s production tax credit and solar’s investment tax credit. “I’d let them stand on their own and compete against coal and natural gas and other sources, and let utilities make real-time market decisions on those types of things as opposed to being propped up by tax incentives and other types of credits that occur, both in the federal level and state level," he continued. Pruitt conceded that any move to end the credits would be a “policy decision” for Congress, “not an EPA decision.” Wind power's tax credit starts phasing out this year before it expires completely in 2020. Producers currently can get a tax credit of 2.3 cents per kilowatt-hour produced. The solar credit expires completely in 2022. It lets companies that build solar power systems get credits for 30 percent of their investments. 

EPA's 4-year strategic plan does not mention 'climate change:' report | TheHill: A four-year plan for President Trump’s EPA contains no mention of the words “climate change.” The 38-page document, released for public comment last week, does not include the phrases “climate change,” “carbon dioxide” or “greenhouse gas emissions,” according to CNN.This is in stark contract to President Obama’s 80-page plan, which listed “Addressing Climate Change and Improving Air Quality” as one of its central goals, and referenced climate change more than 40 times. "Climate change is one of the most pressing challenges of our time and it doesn't even appear in the strategic plan for this agency – that's stunning," Rachel Cleetus, lead economist and climate policy manger with the Union Of Concerned Scientists, told CNN. "This wasn't an oversight; this is a deliberate strategy by this administration." The EPA’s three core goals in this strategic plan are to focus on clean air, land and water; shift more environmental regulation responsibility to states; and enforce laws “as Congress intended,” according to CNN.On Tuesday, EPA chief Scott Pruitt signed a proposal to repeal the Clean Power Plan, Obama’s landmark emissions regulations intended to fight climate change which were a key part of the nation’s dedication to the Paris Accord international agreement on climate change.  Trump pulled the U.S. out of the agreement at the start of his term, and has referred to climate change as a Chinese “hoax.”

New Mexico's Largest Utility Will Stop Burning Coal, Despite Trump's Clean Power Plan Rollback -- U.S. Environmental Protection Agency chief Scott Pruitt announced Monday that the Trump administration is rolling back the Clean Power Plan to end the previous administration's "war on coal " but there's a big problem: Obama didn't kill the coal industry—the market for cheap natural gas and increasingly affordable renewable energy did. Case in point, The Santa Fe New Mexican reported that New Mexico 's largest utility still plans to phase out coal as a power source in 2031. The Public Service Company of New Mexico (PNM) currently uses coal for 56 percent of its energy generation but wants drop use to 12 percent by 2025. "The actions we have planned represent the most cost-effective ways to serve our customers with reliable, affordable and environmentally responsible energy," Ray Sandoval, a company spokesman, explained to the publication. In April, Pat Vincent-Collawn, CEO of PNM Resources, said moving toward renewables and natural gas is "the best, most economical path to a strong energy future for New Mexico." PNM's move is part of a larger trend of utilities around the country that are turning away from coal. According to The Santa Fe New Mexican, "In April, a survey by the Institute for Energy Economics and Financial Analysis found that 46 coal-burning units at 25 power plants across 16 states will close or significantly reduce production by 2018." PNM isn't alone in sticking with the Clean Power Plan. Milwaukee-based WEC Energy Group also plans reduce carbon dioxide emissions to the levels set by Obama regulation despite Trump's plans to nix it. "This is much more driven by fundamental economics as opposed to what is or isn't going on in Washington," president and CEO Allen Leverett told shareholders five months ago.

 West Virginia top court blocks order for replacement water (AP) — West Virginia's highest court has blocked a judge's order requiring a mining company provide replacement drinking water to residents who said its wastewater impoundment contaminated their wells. Supreme Court Chief Justice Allen Loughry writes that the judge lacked the authority to make such an order in 2016 under the federal Surface Mining Control and Reclamation Act. The state Department of Environmental Protection had investigated, concluding Eastern Associated Coal's impoundment wasn't the cause. Wyoming County residents filed their initial complaint with the state in 2011. Loughry writes that their lawsuit was based on the theory the DEP failed to do its duty. He says that would be upheld "only if the DEP had failed to issue a notice of violation in the face of unmistakable evidence."

Trump tries to save coal, but probably in vain: Kemp (Reuters) - For political reasons, the Trump administration has become obsessed by saving old and inefficient coal-fired power plants rather than preparing the electricity industry to face the challenges of the future. At the Department of Energy, Secretary Rick Perry has proposed a grid resiliency rule which would increase payments to coal-fired power producers that can promise secure on-site fuel supplies. And Environmental Protection Administration chief Scott Pruitt has announced his intention to repeal the Obama administration's Clean Power Plan to try to keep coal-fired power plants running longer. The Trump administration blames its predecessor for waging a war on coal and pushing hundreds of coal-fired power plants into premature retirement. Trump officials have pledged to reverse the anti-coal drive, drawing predictable outrage from Democrats, climate campaigners and renewables advocates, as well as allies of convenience in the natural gas and power industries. But protecting the coal industry has assumed enormous symbolism out of all proportion to its economic importance.Fewer than 100,000 people are now employed in coal mining, down from 250,000 in 1979 and around 1 million in 1920 ("Historical Statistics of the United States", Census Bureau, 1975). Coal miners make up under 0.04 percent of non-farm employees in the United States ("Current employment situation", Bureau of Labor Statistics, September 2017). And coal mining accounted for less than 0.3 percent of value added and domestic production in 2016, down from 0.7 percent in 1979 and 1.3 percent in 1949.   Coal accounted for 30-35 percent of U.S. electricity generation in 2015/16 down from a peak of 57 percent in 1988.  Trump administration officials complain the war on coal has forced early closure of hundreds of coal-fired power plants, and jeopardised the future of many more, but nearly all of these plants would have closed anyway.

UK Government unveils Clean Growth Strategy - The UK Government has set out its Clean Growth Strategy to boost national income and output whilst simultaneously cutting greenhouse gas emissions.The plan aims to ensure an affordable energy supply for businesses and consumers, increase productivity, create jobs and help protect the climate and environment.An investment of £2.5 billion will support low carbon innovation from 2015 to 2021, as part of the largest increase in public spending on science, research and innovation in more than three decades.The spending will focus on low carbon energy, transport, agriculture and waste.The government says its Green Finance Taskforce will leverage public and private investment, develop a set of sustainable finance standards and provide up to £20 million to support a new early stage investment fund for clean technologies. It aims to support businesses across a range of industries improve their energy productivity by at least 20% by 2030 and build and extend heat networks across the country.The UK will also spend £3.6 billion to upgrade around a million homes through the Energy Company Obligation (ECO) and extend the scheme until 2028. The Clean Growth Strategy heralds the end of an era for conventional petrol and diesel vehicles and coal generation, which will be phased out by 2040 and 2025 respectively. The government plans to spend £1 billion supporting the take-up of ultra low emission vehicles (ULEV) and around £900 million in smart, nuclear and renewable technologies to fill this gap. It also says targeting a total carbon price in the power sector will give businesses greater clarity on the total price they must pay for each tonne of emissions. Prime Minister Theresa May said: “This Government is determined to leave our natural environment in a better condition than we found it. “Clean growth is not an option but a duty we owe to the next generation and economic growth has to go hand-in-hand with greater protection for our forests and beaches, clean air and places of outstanding natural beauty.”

World Bank Continues to Fund Climate Chaos, Despite Recognizing the Threat - In the last year alone, vulnerable populations have suffered massive damage from the impacts of a changing climate. " Super hurricanes " have torn through the Caribbean—turbocharged by abnormally warm waters— making islands uninhabitable . Flooding , mudslides, wildfires , and avalanches have hit nearly every continent , killing thousands. These extreme weather events decimated basic infrastructure and destroyed livelihoods and economies. While not all of these individual events can be unequivocally linked to climate change , many are strengthened by it, and they are a harbinger of things to come in a world of climate disruption. In keeping with their mission to end poverty, multilateral development banks (MDBs) have been vocal about the climate challenge. The World Bank has called climate change an "acute threat to global development that increases instability and contributes to poverty, fragility, and migration," and has noted that their client countries "recognize the threat and the opportunity: that the transition to a low-carbon, climate resilient economy can drive innovation, jobs, and growth."  Despite these words, a new briefing released Thursday shows that about a quarter of these banks' investments between fiscal years 2014 and 2016 flowed to fossil fuel infrastructure—$28 billion in total—directly at odds with efforts to fight climate change. In the 2016 fiscal year alone, multilateral development banks provided $9 billion in public finance to fossil fuel projects—a form of public subsidy. The majority of this $9 billion in finance actually occurred after the Paris agreement had already been reached in late 2015.

Bloomberg Donates $64 Million to Shut Down Coal Power Plants - Former New York City mayor Michael Bloomberg's charity will give $64 million to help accelerate the retirement of coal plants in the U.S., Bloomberg announced yesterday following the Trump administration's move to kill the Clean Power Plan . Bloomberg Philanthropies has already given $110 million to the Sierra Club 's Beyond Coal campaign, which aims to help shutter two-thirds of U.S. coal-fired power plants by 2020. Despite Scott Pruitt 's proclamation earlier this week that the CPP rollback means the "war on coal is over," market forces don't seem to have gotten the memo. This week, major utilities across the country affirmed that they would continue to move away from coal-fired power; a Texas utility confirmed plans to shutter a San Antonio coal-fired power plant; a coal operator announced it would idle a western Kentucky mine; and the government gave hundreds of thousands of dollars to the Navajo and Hopi tribes in preparation for the likely closure of the coal-fired Navajo Generating Station. As reported by The Hill : "Bloomberg declared his actions Wednesday as a 'war on coal,' embracing a term Republicans use to attack clean-energy advocates, saying that the Trump administration and Environmental Protection Agency ( EPA ) chief Scott Pruitt are wrong to say that the war is being fought mainly in Washington, D.C. 'These are the groups that are fighting the war on coal, and it's happening all across America, and they are winning,' Bloomberg said of the groups receiving funds from his Bloomberg Philanthropies organization.  'The war on coal is a fight for America's health, for our economy and our environment, and our competitive place in the world. And it's a fight we're going to win, no matter what anybody in Washington says,' he said.

China to boost energy storage capacity to fuel renewable power use (Reuters) - China aims to boost its large-scale energy storage capacity over the next decade, the government’s central planner said, in a major push to solve the problem of stranded power in the west of the country as Beijing promotes the use of more renewable power. While China has led the globe in pushing for greater reliance on wind and solar power in recent years, getting clean energy from western regions to urban users in the world’s top energy consumer has been a major headache. China generated a total of 5.9 trillion kilowatt hours (kWh) of power in 2016, of which 25.6 percent came from hydro, wind, nuclear and solar power stations. Storage technology like batteries can help preserve renewable power when demand is low and save it for distribution when consumption picks up. Sufficient storage would prevent power generation being curtailed due to surplus supplies. A key part of the plan is to issue subsidies to energy storage companies to spur the construction of new power-saving facilities, according to a statement issued by the National Development and Reform Commission (NDRC) on Wednesday. Details of the subsidy were not disclosed. The government will also launch some pilot projects to test advances in energy storage technology, such as pumped hydro storage, compressed air energy storage, superconducting magnetic energy storage and bulk storage with batteries using substances like lead-acid lithium-ion, the statement said. Those programmes are expected to be completed by the end of 2020, with the aim of putting the projects into large-scale production five years after that, it said.

Oil giant Shell buys leading operator of electric vehicle charging stations | TheHill: Royal Dutch Shell, a leading global oil and natural gas producer, will purchase a top European operator of electric vehicle charging stations in a push to roll out the technology at its service stations. Shell said Thursday that it would buy Netherlands-based NewMotion, which has produced more than 30,000 private charging stations and 50,000 public ones throughout Europe. Shell said it would use the acquisition to help roll out electric vehicle charging stations at many of its 45,000 service stations around the world, the Financial Times reports. “Today’s announcement is an early step towards ensuring customers can access a range of refueling choices over the coming decades, as new technologies evolve to co-exist with traditional transport fuels,” Matthew Tipper, Shell’s Vice President for New Fuels, said in a statement. “This move provides customers the flexibility to charge their electric vehicles at home, work and on the go. When you add this customer offer to our current roll out of fast charging points on Shell forecourts, we believe we are developing the full raft of charge solutions required to support the future of EVs,” the statement continued. 

Saudi solar plant attracts lowest offers ever recorded - The Kingdom of Saudi Arabia’s Sakaka solar power plant has received offers to supply the electricity from the facility at record low prices.The plant is the first of many under a $50bn plan to expand renewable energy in the kingdom, as it looks to diversify away from fossil fuels. The energy ministry said Abu Dhabi’s Masdar and Electricite de France SA bid to supply power from the 300 MW solar photovoltaic plant for as little as 6.69736 halalas a kilowatt hour, or 1.79 cents. If awarded, that would beat the previous record for a solar project in Abu Dhabi for 2.42 cents a kilowatt-hour. While the offers submitted are remarkably low, the actual cost of power coming from the projects may be inflated by terms within the contracts that aren’t yet published. The price may reflect a “base rate” paid at periods of peak demand or a price that applies only for part of the project’s life. It also could include a payment to the winning developer, land grants or other incentives to get the solar industry started in Saudi Arabia. Despite some disagreement on those costs, it is a big milestone for Saudi Arabia, as it represents a big expansion from its current base of 1 per cent renewable power.

Germany’s shift to green power stalls, despite huge investments - Germany has spent an estimated 189 billion euros, or about $222 billion, since 2000 on renewable energy subsidies. But emissions have been stuck at roughly 2009 levels, and rose last year, as coal-fired plants fill a void left by Germany’s decision to abandon nuclear power. That has raised questions — and anger — over a program meant to make the country’s power sector greener. This lack of progress is an “illustration of the partial failure of the energy transition,” said Artur Lenkowski, an energy analyst at IHS Markit, a research firm. “The whole point of the energy transition was to lower greenhouse gas emissions.” Now, Energiewende is at a crossroads. Chancellor Angela Merkel may have won a fourth term as Germany’s leader after elections last month, but her party lost sway. She must form a coalition with the left-leaning Greens and the pro-business Free Liberals, parties that have diametrically opposing views, including on environmental policies. How such a diverse group comes together will affect whether Germany reaches its goal for carbon emissions. It wants a cut of 40 percent, compared to 1990 levels, by 2020, and of 95 percent by 2050. 

Paris to ban gas-powered cars by 2030 - : (Reuters) - Paris authorities plan to banish all petrol- and diesel-fueled cars from the world's most visited city by 2030, Paris City Hall said on Thursday. The move marks an acceleration in plans to wean the country off gas-guzzlers and switch to electric vehicles in a city often obliged to impose temporary bans due to surges in particle pollution in the air. Paris City Hall said in a statement France had already set a target date of 2040 for an end to cars dependent on fossil fuels and that this required speedier phase-outs in large cities. "This is about planning for the long term with a strategy that will reduce greenhouse gases," said Christophe Najdovski, an official responsible for transport policy at the office of Mayor Anne Hidalgo. "Transport is one of the main greenhouse gas producers...so we are planning an exit from combustion engine vehicles, or fossil-energy vehicles, by 2030," he told France Info radio. The French capital, which will host the Olympic Games in the summer of 2024 and was host city for the latest worldwide pact on policies to tame global warming, had already been eyeing an end to diesel cars in the city by the time of the Olympics. Paris City Hall, already under attack over the establishment of no-car zones, car-free days and fines for drivers who enter the city in cars that are more than 20 years old, said it was not using the word "ban" but rather introducing a feasible deadline by which combustion-engine cars would be phased out. There are about 32 million household cars in France, where the population is about 66 million, according to 2016 data from the Argus, an automobile industry publication. Many Parisians do not own cars, relying on extensive public transport systems and, increasingly, fast-burgeoning networks offering bikes, scooters and low-pollution hybrid engine cars for short-term rental.

Vehicle to grid scheme allows EV owners to drive for free -- Ovo, the UK electricity supplier, is to offer a ‘vehicle-to-grid’ service to buyers of the Nissan Leaf from next year, allowing electric car owners’ to drive for free by letting energy firms use their vehicle’s batteries. Savings from the scheme will cover the £350-£400 annual cost of charging a Nissan Leaf, the electricity supplier told the Guardian. After installing a special charger in a customer’s home, the supplier will take over the management of the car’s battery, with owners able to set a minimum amount of charge they want for driving the next day. Ovo will then automatically trade electricity from the battery, topping it up during off-peak periods when power costs about 4p per kilowatt hour (kWh), and selling it at peak times for about four times as much. Ovo chief executive, Stephen Fitzpatrick, said, “Being able to feed back into the grid will mean that customers will be able to drive for free.”

Biofuels and Biofools - European politicians are enthralled to the biofuels lobby - they are living a fantasy and it’s time to wake up to the reality of an industry driving deforestation, land grabbing and poverty - In the Wizard of Oz, Dorothy happily skips along the yellow brick road believing that she is on a path of discovery and progress. She eventually discovers of course that the wizard is a small, powerless man on a high stool and the whole thing has been a dream. While Dorothy came to her senses, many MEPs deciding on biofuel policyare still seeking out the mythical Emerald City when it comes to renewables, stubbornly clinging to the idea that biofuels are a viable and ethical alternative to fossil fuels.The reality is that as long as the EU encourages the growth of the biofuel industry, a resulting shortage of land for food will drive more deforestation and leave many of the world’s poorest in Asia, Africa and Latin America hungry. According to research carried out in 2010, an area of 445,000km2 (the size of Sweden) of cropland and forest is needed to meet the EU’s biofuel demands. Renewables policy in the EU has massive global reach, driving land grabbing and deforestation; leaving people hungry and destroying our last chance to save our climate.In 2017 with the recast of the Renewable Energy Directive (REDII), there is a real opportunity to reduce the negative impacts of biofuel demand and reduce CO2 emissions by preserving forests and wetlands that soak up carbon dioxide from the atmosphere. But the review is being hijacked by an extremely powerful biofuel industry lobby, who spent over €14m and hired nearly 400 lobbyists at EU level between 2015 and 2016 alone. This lobby are currently pushing to maintain the destructive 7% target for biofuels in the transport sector until 2030. With current biofuel usage at around 4%, this target would dramatically boost biofuel production. And if that wasn’t enough, they are even pushing to add new targets that would dramatically increase destructive crop-based biofuels.

New airplane biofuels plan would 'destroy rainforests', warn campaigners -- A new plan to accelerate production of biofuels for passenger planes has drawn stinging criticism from environmentalists who argue that most of the world’s rainforests might have to be cleared to produce the necessary crops.Aviation is one of the fastest growing sources of greenhouse gas emissions, with an 8% leap reported in Europe last year and a global fourfold increase in CO2 pollution expected by 2050.To rein this back, the industry has promised carbon neutral growth by 2020 – to be met by biofuels, if a blueprint is approved at an International Civil Aviation Organisation (Icao) conference in Mexico City tomorrow.The “green jet fuel” plan would ramp up the use of aviation biofuels to 5m tonnes a year by 2025, and 285m tonnes by 2050 – enough to cover half of overall demand for international aviation fuel.But this is also three times more biofuels than the world currently produces, and advanced biofuels are still at too early a stage of development to make up the difference. Environmentalists say that the most credible alternative fuel source would be hydrotreated vegetable oil (HVO), even though this would probably trigger a boom in palm oil plantations and a corresponding spike in deforestation. Klaus Schenk of Rainforest Rescue said: “Citizens around the world are very concerned about burning palm oil in planes. The vast use of palm oil for aviation biofuels would destroy the world’s rainforests, the basis of life for local people and the habitats of endangered species such as orangutans. We urge Icao to scrap its misguided biofuels plan.”

BNP Paribas stops funding shale energy firms, boosts green projects | Reuters: - BNP Paribas SA, France’s biggest listed bank, said on Wednesday it would no longer work with oil and natural gas companies that primarily do business in shale or oil sands because it plans to boost support for renewable energy projects. The bank also said it would no longer finance new projects that are primarily involved in the transportation or export of oil and gas from shale or oil sands. “We’re a long-standing partner to the energy sector and we’re determined to support the transition to a more sustainable world,” BNP Paribas Chief Executive Jean-Laurent Bonnafe said in a statement. The bank will also stop trading on behalf of exploration, production, marketing and distribution companies where shale or Canadian oil accounts for more than 30 percent of the business, a spokeswoman said. The transition will take place gradually, and oil refiners are not included. The bank previously said it planned to spend 15 billion euros ($17.72 billion) to finance renewable energy projects by 2020 and invest 100 million euros in start-ups specializing in energy storage and efficiency. The lender has already stopped financing coal mines and coal-fired power plants, and no longer supports coal companies that are not planning to diversify their energy sources. BNP Paribas’s smaller rival, Societe Generale SA, said in October last year that it would quit financing coal-powered electricity plants beginning in January and increase its support for renewable energy projects.

Australia only wealthy nation still breaking energy emissions records - Australia prides itself on punching above its weight on the global stage, but a recent achievement received less-than-usual attention in the halls of parliament and the country’s parochial rightwing press.According to a think-tank analysis, it is the sole wealthy nation where greenhouse gas emissions from energy combustion are at a record high.Among what are known as Annex 1 countries, only Turkey – which straddles a grey zone between developed and developing status – joins Australia in having energy combustion emissions higher in 2017 than at any point since 1990, the baseline year under the United Nations Framework Convention on Climate Change.The analysis by progressive think-tank the Australia Institute found the country’s energy emissions kicked up sharply this southern winter due to increased sales of petroleum products – particularly diesel, but also petrol. “The rise now is due to increased use of petroleum, but a distinctive feature about Australia compared with other Annex 1 countries is that it continues to have a heavy reliance on coal,” he said. “We’re not doing enough quickly enough to reduce that heavy reliance.”

Interior Department worked behind the scenes with energy industry to reverse royalties rule -- Top Interior Department officials worked privately with energy industry representatives during the first weeks of the Trump administration to suspend a new accounting system that would have forced companies to pay millions of dollars more in royalties to the government, documents show.  The push to suspend the Obama-era rule, which is the subject of three federal lawsuits in Wyoming, took on a sense of urgency after an attorney for the coal company Cloud Peak Energy first suggested the move in late January. In email exchanges contained in more than 1,000 pages, obtained by the environmental group Natural Resources Defense Council under the Freedom of Information Act, top Interior officials raced to address industry concerns by halting a system that had just taken effect Jan. 1.Under Secretary Ryan Zinke, the department has launched a broad reassessment of what to charge firms extracting oil, natural gas, coal and other minerals from federal lands and waters, with an eye toward boosting domestic energy production. Interior on Wednesday held the inaugural meeting of a new Royalty Policy Committee, with Zinke’s energy counselor, Vincent DeVito, saying President Trump’s desire for “energy dominance” will help guide royalty rules as well as other aspects of department decision-making. “This committee has a job unlike any other in the past,” DeVito said of the industry-heavy panel. It “has an agenda and authorization to pursue” energy development, he added.

Coal war games: how Pruitt and Perry are working the system to save dirty energy - In two important policy moves, Scott Pruitt and Rick Perry are both seeking to defend the same fiefdom: coal's dwindling domain as the ruling fuel for electric utility companies.They're on the same crusade, but with rather different strategies. Pruitt, the head of the Environmental Protection Agency, chose a war of attrition, while Perry, the energy secretary, mounted a blitzkreig.Pruitt's order on Monday to revoke the Clean Power Plan and its controls on carbon dioxide emissions from the nation's coal-fired power plants displayed no rush to replace the rule. That would have to wait—it's not clear how long—for a review of whether any such regulation was even needed, let alone how it would work.In contrast, Perry's order last month telling federal regulators to help rescue coal-fired power plants from the crippling competition of natural gas and renewables was framed as such an emergency that an arcane set of new rules ought to be rushed into effect, with only the briefest review and public comment.Hurry up and wait, as soldiers call this dichotomy. But either way, critics say coal's last stand is a lost cause. "The problem of climate change isn't going away, and all they are buying now is some delay," said David Doniger of the Natural Resources Defense Council. He says the Clean Air Act is here to stay, as is the Supreme Court's repeated conclusion that the law requires EPA to regulate emissions of dangerous greenhouse gases from power plants and other big sources. Like others, his group plans to sue. New York's energy czar, Richard Kauffman, suggested the state would oppose both Perry and Pruitt and press forward with its clean energy goals. Kauffman, who is in the midst of restructuring New York's grid, said the state should be "building the new grid and not rebuilding the old grid."

Trump’s plan to bail out failing fossil fuels with taxpayer subsidies is perverse -- The conservative philosophy of allowing an unregulated free market to operate unfettered often seems to fall by the wayside when the Republican Party’s industry allies are failing to compete in the marketplace. Trump’s Energy Secretary Rick Perry recently provided a stark example of this philosophical flexibility when he proposed to effectively pull the failing coal industry out of the marketplace and instead prop it up with taxpayer-funded subsidies. The coal industry has been losing badly in the free market, due largely to its inability to compete with cheaper natural gas and renewables. That was in fact the finding of Perry’s own Energy Department’s report, published just 3 months ago. The report also concluded: Most of the common metrics for grid reliability suggest that the grid is in good shape despite the retirement of many baseload power plants … The power system is more reliable today due to better planning, market discipline, and better operating rules and standards Perry’s new proposed rules directly contradict his department’s report, claiming “the resiliency of the electric grid is threatened by the premature retirements of these fuel-secure traditional baseload resources.” Perry tried to shift the goalposts from reliability to “resiliency” of the electric grid, essentially arguing that we need power plants that can store 90 days’ worth of fuel (i.e. huge piles of coal) to ensure that the grid remains “resilient.” However, Perry also made the mistake of referencing the 2014 Polar Vortex to try and support this argument. The cold temperatures associated with that weather pattern caused electricity demand to spike, but as experts have noted, while wind energy produced above expectations during the Polar Vortex, coal power failed (emphasis added): However, [Perry’s proposal] conveniently fails to mention that nearly 14 gigawatts (GW) of coal capacity was forced offline during the Polar Vortex, roughly 25 percent of all coal capacity in [the region]. 1.4 GW of nuclear was forced offline as well. Most of these generator outages were due to temperatures below the operating limit of power plant equipment ... Additional coal capacity was unavailable due to frozen coal piles. nPerry’s argument is so ludicrous that it bears repeating. He claims that we need to subsidize huge coal piles to ensure grid resiliency to extreme events like the Polar Vortex. But during the Polar Vortex, coal plants were shut down because they couldn’t operate at such low temperatures, and because their big coal piles were frozen. And this isn’t the only example of grid resiliency without coal – during Hurricane Harvey, coal piles were too wet to be transported to power plant boilers.

Energy Secretary Perry faces grilling over plan for coal and nuclear subsidies -- Facing questions on Capitol Hill over his proposal to subsidize coal and nuclear power plants, Energy Secretary Rick Perry said the notion of a free market in energy generation is a "fallacy." The hearing before the House Energy Subcommittee contained some noteworthy moments, including when Perry was unable to answer a basic question about his controversial proposal and implied the regulators who are considering it do not take a long-term view of energy markets. The proposal in question asks the Federal Energy Regulatory Commission to consider, on an expedited timetable, a rule to compensate coal-fired plants and nuclear power stations for the reliability they bring to the nation's electricity supply. Perry's proposal has gotten pushback from power industry groups, environmentalists and even one of the FERC commissioners. "We will not destroy the marketplace," FERC Commissioner Robert Powelson told an audience last week when asked about the proposal. The Energy Department's request that FERC make a final decision within 60 days has drawn criticism in particular, given that the Energy Department and the North American Electric Reliability Corporation have both determined the nation's power system remains reliable. Some contend the department is rushing the process to rescue distressed coal and nuclear plants. The share of the nation's power generated from coal and nuclear energy has slipped due to cheap, abundant natural gas and the rapid growth of solar and wind farms. President Donald Trump has vowed to revive the coal industry. Perry faced an early grilling from Rep. Frank Pallone in his opening statement. The New Jersey Democrat accused the Trump administration of hypocrisy, noting Environmental Protection Agency Administrator Scott Pruitt earlier this week criticized the Obama administration for favoring renewable energy in its bid to regulate carbon emissions from power plants. "It's an ironic proposal considering that EPA Administrator Pruitt stated as part of his announcement in rolling back the Clean Power Plan — and again I'm quoting — that 'regulatory power should not be used by any regulatory body to pick winners and losers,'" Pallone said. "But Mr. Secretary, that's exactly what you're doing here. You're distorting the market, damaging the environment and delivering preferential treatment to favored industries, and at the end of the day, killing off competitive electricity markets just to save generation assets that are no longer economical," he said. 

Perry on DOE NOPR pricetag: 'What's the cost of freedom?' | Utility Dive: Secretary of Energy Rick Perry defended his department's plan to provide cost recovery for coal and nuclear plants at a House Energy and Commerce Subcommittee hearing Thursday, telling members that cost impacts of the proposal should be "secondary" to ensuring grid resilience in emergency situations. Perry's testimony before the House E&C energy subcommittee on Thursday was his first public appearance since DOE finalized its Notice of Proposed Rulemaking (NOPR) on Sept. 29. The rule would provide full cost recovery for merchant coal and nuclear plants with 90 days of fuel supply onsite. Asked if the Department of Energy had evaluated consumer costs of the proposal, Perry declined to answer directly, saying "I think you take costs into account, but what's the cost of freedom? What is the cost to build a system to keep America free?" Perry repeatedly expressed a lack of confidence in existing grid reliability assessments, saying they assume "everyday, blue-sky" scenarios, and said he "doesn't have a problem" with generation subsidies because “the idea that there is a free market in the energy industry is a fallacy.”  The NOPR rule sparked widespread anxiety in the power sector, with a broad array of energy and industry interests announcing their opposition. Former FERC regulators warned the proposal could "blow up" wholesale power markets. Last week, IHS estimated the proposal could cost consumers nearly $4 billion annually. Rep. Paul Tonko (D-NY) seized on those numbers in his questions for Perry."What factors did you consider that said it would be more cost effective to support specific types of generation to enhance reliability rather than shooting right at improving [grid infrastructure]?" Tonko asked. "I think the cost effective argument on this is secondary to whether the lights are going to come on," Perry said.

 How Vulnerable Is The Electrical Grid? - Kurt Cobb -- When the electricity stops in modern civilization, pretty much everything else stops. Not even gasoline-powered vehicles can get far before they are obliged to seek a fill-up - which they cannot get because gas pumps rely on electricity to operate. When I wrote "The storms are only going to get worse" three weeks ago, I thought the world would have to wait quite a while for a storm more devastating than hurricanes Harvey and Irma. But instead, Hurricane Maria followed right after them and shut down electricity on the entire island of Puerto Rico except for those buildings with on-site generators. Another casualty was drinking water because, of course, in almost every location, it must be moved using pumps powered by electricity. In addition, the reason we remain uncertain of the full scope of the damage and danger on the island is that the communications system (powered by electricity, of course) failed almost completely. The Associated Press reported that as of September 30, 10 days after Maria's landfall, about 30 percent of telecommunications had been restored, 60 percent of the gas stations were able to dispense fuel and half of the supermarkets were open.   Part of the question the United States and the world will be answering when deciding on how and what to rebuild in Puerto Rico is how much are we willing to spend on making infrastructure climate-change proof when climate change is a moving target. We do not now know how "hard" we will have to make any rebuilt infrastructure in Puerto Rico because we do not know for certain the ultimate severity of climate change through the lifetime of the infrastructure being built. It would be foolish to rebuild infrastructure that will simply blow down or flood out in the next major hurricane or one just 10 years from now. While contemplating such dangers, the world remains largely oblivious to an unparalleled danger to the electric grid, one that dwarfs what climate change is ever likely to threaten: electromagnetic pulse or EMP.

The Cardiff Bay Tidal Lagoon – can it power 1.3 million Welsh homes? -- Cardiff Tidal Lagoon is now being developed as the first full-scale lagoon in our programme. With a potential installed capacity of around 3GW, this project could provide enough green, clean home-grown power for every home in Wales.” Mark Shorrock, Chief Executive, Tidal Lagoon Power. In this post we investigate this claim. The results, as usual, are predictable.The Cardiff Bay tidal project has yet to get the go-ahead from the government, but planning is obviously well along, with the project reportedly in its “twelfth design iteration”. In addition, a lengthy environmental impact scoping report has been completed and the project has just received approval to connect to the national grid. According to the schedule the project will generate its first power in 2022. And Cardiff Bay is big. It will have a nominal capacity of around 3GW – the official number is 3.24GW – and is estimated to cost around £8 billion. Production will be approximately 5.5TWh per year (giving a capacity factor of around 20%). The lagoon covers 70 sq km and is enclosed by a sea wall 20.5 kilometers long. In short, it’s Swansea Bay times ten. Figure 1 shows the project layout. The lagoon takes up half the width of the Bristol Channel:   The thing to remember about tidal power is that while it’s 100% predictable it’s also non-dispatchable, meaning that we can predict exactly when we won’t be able to dispatch it. And the reason it’s non-dispatchable is that the tide in the UK comes in and goes out twice a day and the lagoon generates power when the tide is ebbing or flowing, but no power at all when the tide turns. The result is four daily power spikes, separated by periods of zero generation, that bear no relation to fluctuations in demand. Figure 1 shows broadly what these spikes will look like.  Another problem is the large difference in generation between spring and neap tides. Figure 3 shows Cardiff tide heights for October 2017. As discussed in the Swansea Bay post generation is a function of somewhere between the square and cube of the tide range, and as a result the Cardiff lagoon, were it in operation, would generate roughly ten times as much electricity per day during the spring tides around the 8th and 21st as it would during the neap tides around the 1st, 15th and 29th:

Burning wood criticized as 'absurd' as EU mulls clean-energy law -  Europe must prevent using trees and crops as a way to meet renewable-energy requirements or it will risk further increases in food prices, deforestation and land grabs, environmental groups said. The warning comes as the European Union’s governments and the European Parliament are discussing a draft law that aims to accelerate the shift to clean energy by 2030. The proposal upholds the current rules under which power from burning biomass such as wood pellets counts toward green-energy goals and can be subsidized by governments. Companies across Europe, including the U.K.’s Drax Group Plc and Poland’s PGE SA, benefit from aid to use biomass in order to reduce greenhouse-gas emissions produced from coal. Governments have no obligation to report how much is spent on subsidies for the so-called co-firing, which amount to “burning taxpayers’ money,” lobbies including WWF Europe, Oxfam, BirdLife Europe and Transport & Environment said. “EU policies are absurd from a resource-efficiency point of view,” Linde Zuidema, campaigner at the FERN forest-protection lobby, told reporters in Brussels on Thursday. Wood is the single biggest source of renewable energy in the EU and the bloc’s policies have led to growing forest harvest, she said. 

Fossil fuels win billions in public money after Paris climate deal, angry campaigners claim -   Billions of dollars of public money was sunk in new fossil fuel projects by the world’s major development banks in the year after the Paris climate change deal was agreed, according to campaigners who are calling for the banks to halt their financing of coal, oil and gas.The new analysis also reveals that some of the taxpayers’ money given to coal and gas projects was counted as “climate” finance. Funding for fossil fuel projects from the six main international development banks totalled at least $5bn in 2016, according to a report from researchers at Oil Change International (OCI).In particular, OCI estimate the funding for exploration for new oil and gas more than doubled in 2016, to $2.1bn. Funding for clean energy also grew by more than a third, to $11.4bn. A second report from analysts at E3G suggests that in recent years the World Bank and European Bank for Development and Reconstruction (EBRD) have given similar levels of funding to fossil fuels as to climate-friendly energy projects. “Despite the Paris Agreement being reached, multilateral development banks that say all the right things on climate are still financing billions of dollars in oil, gas, and coal projects,” said Alex Doukas at Oil Change International. “They are using relatively scarce public resources that need to be used as strategically as possible if we have a hope of meeting the agreement’s aims. If they really want to help lift people out of poverty, taxpayer-funded banks can no longer finance climate destruction. They must stop funding fossil fuels.” Helena Wright at E3G said: “Development banks must do more to green their investments. As a first step, the banks should commit to ending finance for fossil fuel exploration. Obviously exploration for new resources is not in line with the Paris goals – we have got enough fossil fuels already to go over 2C of warming.”

Bloomberg's charity donates $64 million to 'war on coal'  (Reuters) - Former New York mayor Michael Bloomberg’s charity gave another $64 million to a campaign that aims to slash the number of U.S. coal-fired plants by two thirds by 2020, he said on Wednesday. Bloomberg Philanthropies made the donation to the Beyond Coal campaign run by non-profit Sierra Club, and other organizations fighting the burning of coal. Including this latest donation, the charity has given $110 million to Beyond Coal since 2011. The pledge was made a day after President Donald Trump’s environmental regulator announced a move to scrap former president Barack Obama’s Clean Power Plan that would have reduced carbon emissions from coal plants. The Trump administration labeled the Clean Power Plan part of a “war on coal” by Obama. But Bloomberg said that since the plan has been tied up by the courts and never came into effect, the real threat to coal comes from competing power sources, such as cheap natural gas, solar, and wind power, as well as communities, local governments and companies concerned about public health. “These are the groups that are fighting the war on coal and it’s happening all across America and they are winning,” Bloomberg said at an event at the Sierra Club in Washington. Since 2011 nearly half of the country’s coal-fired power plants, or nearly 260 plants, have been closed. Beyond Coal wants to push communities to fight coal plants which emit carbon and particulates blamed for lung and heart problems. It aims to increase closures to some two-thirds of the U.S. coal fleet by 2020.

Chinese companies to build 700 coal plants in and outside China -- Coal is dead. Coal mining is a sunset industry. Donald Trump is crazy if he thinks he can revive Big Coal. While all these statements have become part of global consciousness when it comes to the future of the much-maligned fossil fuel, a report by Urgewald, a Berlin-based environmental group, casts doubt on at least the first two assertions. Citing data gleaned from the world's biggest developers of coal-fired power plants, Urgewald found that of all the new coal generation expected to go online over the next decade, Chinese companies will build nearly half of it. Specifically, that means 700 new coal plants, with most to be built in China, and about a fifth outside the country, according to figures provided by Urgewald and reported by the New York Times:  Overall, 1,600 coal plants are planned or under construction in 62 countries, said Urgewald, which uses data from the Global Coal Plant Tracker portal. The new plants would expand the world's coal-fired power capacity by 43 per cent.The fleet of new coal plants would make it virtually impossible to meet the goals set in the Paris climate accord. Electricity generated from fossil fuels such as coal is the biggest single contributor globally to the rise in carbon emissions, which scientists agree is causing the earth's temperatures to rise.Shanghai Electric Group, one of the country's largest electrical equipment makers, has announced plans to build coal power plants in Egypt, Pakistan and Iran with a total capacity of 6,285MW – almost 10 times the 660MW of coal power it has planned in China. The astounding numbers go against the trend that has been happening throughout the year in China, where dangerously high pollution levels have forced the closure of hundreds of coal mines and a curtailment of steel mill output.

Why energy-rich Australia suffers the world’s priciest power - A bungled transition from coal to clean energy has left resource-rich Australia with an unwanted crown: the highest power prices in the world. New Yorkers pay half as much as Sydneysiders to keep the lights on, despite Australia boasting among the world’s largest coal and natural gas reserves, as well as ideal conditions for clean power generation. A decade of political dithering and climate policy missteps have set its patchwork power system adrift, ratcheting up manufacturing costs and hurting consumers with a doubling in electricity prices since last year and rising risks of blackouts. Natural gas was meant to bridge the electricity supply gap left by the shutdown of decaying coal-fired stations and the gradual shift to solar and wind energy. But rising exports of the fuel to higher-paying overseas buyers created a local shortage. With no long-term solution in sight, Prime Minister Malcolm Turnbull threatened gas producers with export restrictions unless they plugged the domestic shortfall. The government is also trying to convince power generators to patch up old and dilapidated coal-run stations, prolonging dependence on a fossil fuel the rest of the developed world is spurning. “It takes a while to cause a train-wreck this bad,” said Tony Wood, energy program director at the Grattan Institute, a Melbourne-based think tank. “And it also takes a while for a government to think about how they get out of it.” The nation’s largest power generators are urging Australia to ditch coal and join the renewables revolution. Turnbull, whose harbor-side mansion is powered by solar panels, is reluctant to remove the fossil fuel from the energy mix lest it boosts power costs further.

Australian government poised to abandon clean energy target - The energy minister, Josh Frydenberg, says Australia’s electricity sector is looking for stability, “not necessarily” for handouts, in a signal the Turnbull government is poised to abandon the clean energy target. In comments to an energy summit on Monday, Frydenberg pointed to the falling costs of renewable energy as one of the calculations in the government’s consideration of the clean energy target recommended by the chief scientist, Alan Finkel.Asking whether the falling costs of renewables meant Australia no longer need a clean energy target, which subsidises renewables, Frydenberg said: “Industry is looking for stability, they’re not necessarily looking for a handout.“What they’re looking for is a settled bipartisan investment climate whether there are subsidies or not.” The Turnbull government is finalising its new investment framework for energy policy, which it wants to settle during the remaining parliamentary sitting weeks before the summer recess.Given it faces considerable internal opposition, it has been clear for some time the government would not adopt the clean energy target modelled in the Finkel review, and would look to rule changes in the national electricity market as one of the foundations of the overhaul.Frydenberg’s comments to the Australian Financial Review summit on Monday suggest the government is not convinced renewable energy requires ongoing subsidies once the current renewable energy target winds down after 2020.But asked by reporters in Sydney whether the government had abandoned the Finkel recommendation, Malcolm Turnbull hedged.“What we are determined to do is to ensure that energy is reliable, affordable and that we meet our emissions reduction commitments that we have made through the Paris agreement,” the prime minister said.Speaking to the AFR summit, the chief scientist dismissed the point that the falling cost for renewables meant a clean energy target was no longer required.

Electricity consumers ‘to fund nuclear weapons through Hinkley Point C’ - Prof Andy Stirling and Dr Phil Johnstone from the Science Policy Research Unit at the university write that the £19.6bn Hinkley Point project will “maintain a large-scale national base of nuclear-specific skills” without which there is concern “that the costs of UK nuclear submarine capabilities could be insupportable.” Their evidence suggests that changes in the government’s policy on nuclear power in recent years will effectively allow Britain’s military nuclear industry to be supported by payments from electricity consumers. Last June, MPs passed a motion in favour of replacing four submarines carrying Trident missiles at a cost of £40bn. “What our research suggests is that British low-carbon energy strategies are more expensive than they need to be, in order to maintain UK military nuclear infrastructures,” said Stirling. “And without assuming the continuation of an extremely expensive UK civil nuclear industry, it is likely that the costs of Trident would be significantly greater.” The Hinkley Point project has been criticised for its huge cost. The French electricity company EDF is currently in the early stages of constructing the plant near Bridgwater, Somerset, in partnership with the China General Nuclear Power Group. The government has agreed a minimum price of £92.50 per megawatt hour (MWh) for electricity produced by Hinkley Point, the first new-build nuclear power plant in the UK since 1995. Under this agreement, if the usual wholesale price is lower, the consumer pays the difference in price. The current wholesale electricity price is around £42 per MWh, so the electricity consumer would pay EDF an extra £50 per MWh. 

Greenpeace activists set off fireworks inside French nuclear plant - Greenpeace activists set off fireworks inside a nuclear plant in eastern France early Thursday after breaking into the facility to underline its vulnerability to attack. The anti-nuclear group said the fireworks were set off at the foot of a spent-fuel pool — where nuclear plants store highly radioactive fuel rods that are removed from reactors after their use. “Our activists launched a firework in the perimeter of a French nuclear plant. These installations are vulnerable,” the group said on Twitter, along with a video of the stunt at the plant in Cattenom, near the border with Luxembourg. The tiny duchy’s environment minister, Carole Dieschbourg, was “very worried over the huge security shortcomings” at the plant, her ministry said in a statement. Operator EDF, France’s state-owned energy giant, said police stopped the protesters eight minutes after the predawn intrusion and that the plant’s safety was not threatened. Police said eight Greenpeace activists were in custody, and a local prosecutor said they faced five years in jail and €75,000 ($89,000) in fines.

 Fukushima court rules Tepco, government liable over 2011 disaster – media  (Reuters) - A district court in Fukushima prefecture on Tuesday ruled that Tokyo Electric Power (9501.T) and the Japanese government were liable for damages totalling about 500 million yen (£3.3 million) in the largest class action lawsuit brought over the 2011 nuclear disaster, Kyodo news agency said. A group of about 3,800 people, mostly in Fukushima prefecture, filed the class action suit, marking the biggest number of plaintiffs out of about 30 similar class action lawsuits filed across the nation. This is the second court ruling that fixed the government’s responsibility after a Maebashi district court decision in March. All the three district court decisions so far have ordered Tepco to pay damages. Only the Chiba court decision last month did not find the government liable for compensation. The plaintiffs in Fukushima case have called on defendants for reinstating the levels of radioactivity at their homes before the disaster, but the court rejected the request, Kyodo said. Tepco has long been criticised for ignoring the threat posed by natural disasters to the Fukushima plant and the company and the government were lambasted for their handling of the crisis.

Ohio siting board approves 2 gas-fired projects -- The Ohio Power Siting Board last week approved construction of two natural gas-fired, combined-cycle projects totaling 1,950 MW in Guernsey and Trumbull counties. The 1,100 MW Guernsey Power Station is being developed by jointly developed by Apex Power Group and Caithness Energy in Valley Township. The 940 MW Trumbull Energy Center in Lordstown is being developed by privately owned Clean Energy Future-Trumbull. The announcement comes after the Trump administration is pushing for cost recovery for coal and nuclear plants. While coal and nuclear interests generally back the effort, gas industry stakeholders oppose the proposal, and are asking the Federal Energy Regulatory Commission to extend the evaluation period. Particularly in the MidAtlantic region, gas-fired generation has done well without any government intervention, aided by low-cost fuel from the Marcellus and Utica shale plays. Part of the Guernsey project calls for the construction of a gas pipeline to connect the plant to the Tallgrass Energy Partners Rockies Express Pipeline. The plant is scheduled to begin construction in December and begin commercial operation by October 31, 2020. The Trumbull Energy Center will be supplied with natural gas from a Dominion East Ohio pipeline and is scheduled to begin construction in November 2017 and come online by June 2020. Ohio also has been the center of contentious proposals by FirstEnergy and American Energy Power to bail out struggling coal and nuclear fleets. Both utilities are urging partial re-regulation of the state's markets as well. The approval of these gas-plants shows appetite for this cleaner source of energy despite the DOE's proposal.

Attempt to ban fracking in Youngstown derailed - Youngstown Vindicator --Youngstown voters won’t have to contend with the pesky anti-fracking issue in next month’s general election. The Ohio Supreme Court made sure of that with a 4-3 ruling handed down last week.The ruling upheld a decision by the Mahoning County Board of Elections not to place two charter amendments, including the fracking ban, on the Nov. 7 ballot. Proponents of the amendments had filed an appeal with the high court.The elections board is made up of two Republicans and two Democrats.  Had the proponents been successful in their appeal, Youngstown voters would have been asked for a seventh time to approve a misguided, self-aggrandizing ban on hydraulic fracturing in the city.We have been consistent in our opposition to this effort for the simple reason that the so-called Community Bill of Rights would not have given city government many of the rights envisioned in the proposed charter amendment.We have argued that the ban would have been unenforceable under current state statutes. Indeed, the Ohio Constitution gives the Ohio Department of Natural Resources exclusive authority to oversee the hydraulic fracturing process used to extract oil and gas from beneath the earth’s surface.  Organized opposition from the business and labor communities has centered on the practical aspect of the Bill of Rights. Jobs tied to the drilling industry in the city, including hundreds at Vallourec Star, would have been threatened. Finally, the amendment has been pulled out of thin air because there are no companies with serious plans to drill for oil and gas within city limits. That is why we characterized the effort as self-aggrandizing.

Legal Protest Targets New Fracking in Ohio's Wayne National Forest - Center for Biological Diversity (press release) — Seven conservation groups today challenged a Bureau of Land Management decision approving a December auction of 350 acres in the Wayne National Forest for oil and gas fracking leases near the controversial Rover Pipeline. The administrative protest challenges the BLM’s complete failure to assess any social or environmental impacts connected to the fracking in Ohio’s only national forest. Despite fracking threats to public health, water, forests, wildlife and endangered species, the agency approved the auction without conducting a new environmental review as required under the National Environmental Policy Act and Endangered Species Act.   “Ohioans love the Wayne for its beauty and its wildlife, and because it's a great place to play outdoors. Fracking threatens all of these important values,” “We filed today's appeal to protect both the forest and the public's interest.” The fracking industry has so far nominated about 18,000 acres of the Wayne National Forest’s Marietta Unit to be auctioned for oil and gas leasing. The BLM has leased 1,937 acres of the national forest to the fracking industry since December and plans to continue holding quarterly auctions until all 18,000 acres are leased.   “Fracking would transform watersheds in Ohio’s only national forest into polluted industrial zones,”  “These precious forests provide clean water, wildlife refuges and quiet recreation. They should be entirely off limits to polluting wells, pipelines and heavy truck traffic.”    The Rover pipeline route cuts through the northeast corner of the Marietta Unit, within four miles of the lands to be auctioned. Gas from fracked wells in the national forest could feed into the pipeline, where construction has been plagued with numerous mishaps and spills, including a 2 million-gallon spill of drilling mud laced with diesel. Conservation groups have protested every fracking lease sale on the Wayne National Forest. Earlier this year the groups sued the BLM and other federal agencies in U.S. District Court for the agencies’ failure to analyze threats to public health, water, endangered species and the climate before opening 40,000 acres of the Wayne to fracking.

Insurer Can't Compel Arbitration In $12M Halliburton Row – Law360  -- An insurer can’t force Halliburton Energy Services Inc. to arbitrate a dispute over whether it's liable for about $12 million the insurer paid Statoil ASA for an explosion at an Ohio oil and gas site where Halliburton was conducting fracking operations, a Texas federal judge held Tuesday.   Ironshore Speciality Insurance Co. had issued a site pollution legal liability select policy to Statoil — with Halliburton contends names it as an additional insured — for a crude petroleum and natural gas facility in Ohio.

Ground broken on Atlantic Sunrise pipeline in Lancaster County, protesters block work entrance -- Earthmoving has begun on the Atlantic Sunrise gas pipeline in Lancaster County. So have protests to disrupt the project, which will cut through 37 miles in western and southern parts of the county. At daybreak Monday, about 35 people participated in an 18-vehicle blockade of an access road being built by contractors for pipeline builder Williams Partners in Manor Township.  The protest was organized by Lancaster Against Pipelines. Williams spokesman Christopher Stockton said no work was done at the site Monday because of the weather.  Police were called to the scene, but there were no citations or arrests and protesters stopped blocking the road when ordered to by authorities.  The site is the first actual moving of dirt in Lancaster County since the Federal Energy Regulatory Commission gave the controversial 197-mile project the green light for construction on Sept. 15. The work site, off Witmer Road near Safe Harbor, is one of two sites where the pipeline will be drilled under the Conestoga River. The slow drilling under the river is expected to take several months so it is the first pipeline work to begin in the county. Work to lay the pipeline should begin across the county in another week or two, Stockton said. Williams has set up a staging area in a field near Marietta for contractors working on the project. And 42-inch-diameter steel pipes for the pipeline, made in Turkey, are being stored at a former industrial plant outside of Lebanon city. The $3 billion pipeline, scheduled to be in operation by the end of July, will run from Susquehanna County in the midst of Marcellus Shale gas drilling to Williams’ interstate Transco pipeline near Holtwood. The gas will be distributed up and down the East Coast and some will be exported.

Bridging Marcellus/Utica Gas Supply With Sabine Pass LNG Exports - Cheniere Energy’s Sabine Pass LNG liquefaction and export facility in Louisiana last week received federal approval to begin operating its fourth 650-MMcf/d liquefaction train, bringing the total export capacity at the terminal to 2.6 Bcf/d. Natural gas supply delivered to the terminal for export has averaged 2.0 Bcf/d in recent months, with flows jumping as high as 2.9 Bcf/d on some days last month as the operator readied Train 4 for operations. There are several supply regions targeting this new demand, including the fastest growing producing region, the Marcellus/Utica Shale in the U.S. Northeast. While there isn’t yet a direct beeline from the Marcellus/Utica to Sabine Pass, there are early indications that recent pipeline takeaway and reversal projects from the producing region and the resulting connectivity are indirectly bridging the divide. In today’s blog, we examine pipeline flow data to understand recent changes in flows and what they can tell us about future flow patterns as export demand continues to grow. LNG export demand from Cheniere’s Sabine Pass terminal — the first and, for a little while longer, the only export facility in the contiguous U.S. —  has been growing like gangbusters over the past two years. The facility has quickly increased from its first 650-MMcf/d operational liquefaction train starting in early 2016 to now four trains as of last week, in less than two years. The fourth train loaded its first commissioning cargo in August 2017 and just last week received federal approval to begin liquefaction and export activities.

The Old, Hidden Pipeline at the Bottom of the Great Lakes -  Here, in northern Michigan's Straits of Mackinac, Great Lakes Michigan and Huron meet like the middle of an hourglass. To the east, the rounded form of Mackinac Island is the centerpiece of an archipelago in Lake Huron.  I'm paddling south, dwarfed by the Mackinac Bridge, a monolithic five-mile-long ribbon of green steel and gray concrete that connects Michigan's upper and lower peninsulas. Lake Michigan sprawls westward. Its watery horizon shows the telltale dance of rising winds just as a wave splashes over my deck, reminding me to put away my camera. This isn't a place to multitask.   Almost directly beneath my kayak runs Enbridge Line 5, twin 64-year-old pipelines at the bottom of the lakebed. Line 5 transports 23 million gallons of oil and natural gas liquids daily for 645 miles through Wisconsin and Michigan to Canada. Enbridge, the Canadian oil transportation giant, operated Line 5 inconspicuously until 2010; that's when its sister pipeline, Line 6B, ruptured, pouring a million gallons of tar sands bitumen into the Kalamazoo River near Marshall, Michigan. It was the largest land-based oil spill in U.S. history. Suddenly, the peril posed by vintage infrastructure carrying petrochemicals through the heart of North America's greatest supply of freshwater loomed very large.  University of Michigan hydrologist Dave Schwab has concluded that the Straits of Mackinac is "the worst possible place for an oil spill in the Great Lakes." At any given time, one million gallons of petroleum products are contained in the 20-inch pipes that run along the lakebed. If one ruptured, oil would disperse with the currents that slosh back and forth through the straits. In Schwab's worst-case scenario, 720 miles of lakeshore would be devastated.  The U.S. Environmental Protection Agency predicts that in the event of a spill, no more than 40 percent of the oil could be recovered by deploying booms and "in-situ burning"—lighting surface slicks on fire, a technique used in the 2010 Deepwater Horizon disaster in the Gulf of Mexico. The success rate would plummet in the winter, when the Straits of Mackinac are sheathed in feet of ice. This apocalyptic vision was enough to convince more than 60 municipalities and all 12 of Michigan's Native American tribes that Line 5 should be decommissioned. Even Republican state attorney general Bill Schuette called for a timeline to shut down the pipeline.

Controversial Sunoco Pipeline Spills Drilling Fluid Three Times in Same Area -  Sunoco 's controversial Mariner East 2 pipeline project has racked up even more spills.  Pennsylvania's Daily Local News reported that horizontal directional drilling triggered three releases of drilling fluid around the same site in East Goshen over the span of three days.  The "small inadvertent returns"—an industry term for spills—happened twice on Monday and another on Saturday, Sunoco communications manager Jeff Shields said in the report. He added that drilling stopped, the fluid has been contained, and no water resources were affected.  The latest spills add to a track record of leaks and other incidents surrounding the $2.5 billion pipeline project that's designed to carry 275,000 barrels a day of butane, propane and other liquid fossil fuels from Ohio and West Virginia, across Pennsylvania, to the Atlantic coast.  In July, a judge ordered Sunoco to temporarily halt horizontal directional drilling for installation of its Mariner East 2 pipeline, siding with environmental groups that the process caused dozens of drilling fluid spills and other accidents between April and mid-June, including leaks into wetlands and waterways. The order expired Aug. 7. Sam Rubin, organizer with Food & Water Watch, gave the following statement to the Daily Local News: "Sunoco is a dangerous operator. The one person who can take immediate action to keep our community safe is Gov. Tom Wolf. Gov. Wolf has not lived up to his statutory responsibility to prepare the state of Pennsylvania for the risks of a high pressure ethane pipeline in densely populated areas. We need a full, publicly available and comprehensive safety and preparedness analysis done. Gov. Wolf needs to halt this pipeline until one is complete. Today's leak adds to the proof, which was already abundantly clear, that Sunoco cannot be trusted to operate in a safe manner. There have already been over 100 reported spills and other drilling accidents linked to the construction of the Mariner East 2 pipeline. We don't need any more evidence."

Too Much Gas On My Hands! - Impact Of New Supplies On Infrastructure, LNG And Prices -- The U.S. natural gas market tightened considerably in 2016, with a pull-back in production volumes leaving total gas supply, including imports, within a hair’s breadth of total demand (including exports) on an annual average basis. In 2017, however, gas production has climbed again. And it’s not just from the Marcellus/Utica, which grew through even the downturn over the past few years, but also from other basins, particularly ones focused on crude oil. Current production economics and drilling activity suggest continued growth over at least the next five years. Could it be too much? Will demand expand fast enough and will all the growing supply regions be able to access that demand? Or, are producers headed for another contraction before they’re barely out of the last one? In today’s blog, we begin a series unpacking RBN’s five-year natural gas supply-demand outlook. A look at the Lower-48 natural gas supply-demand balance since 2010 illustrates just how precarious market conditions have been in the last few years. The bars in Figure 1 below show the difference between total gas supply (including imports) and total demand (including exports) for the first nine months of 2017 compared to the same nine-month period in the previous seven years.

Governors vote for fracking ban in Delaware River Basin - - Governors of Pennsylvania, Delaware and New York, comprising a majority of the Delaware River Basin Commission, have voted in favor of a resolution put forward by the commission to issue draft regulations to permanently ban hydraulic fracturing for oil and gas in the Delaware River Basin. The DRBC vote was three to one with one abstention in passing the resolution for promulgating regulations that would prohibit any water project in the Delaware River Basin proposed for developing oil and gas resources by high-volume hydraulic fracturing. Delaware Gov. John Carney said that the resolution is consistent with the Delaware River Basin Conservation Act, a bill introduced by Carney and passed by Congress in 2016, by helping to ensure that the water resources of the basin will be protected for present and future generations. “Fracking could diminish water resources in the Delaware River Basin, both through consumption and degraded water quality,” said Carney. “We are pleased to join both New York and Pennsylvania in voting in favor of this resolution, which will protect public health and a precious water supply. This action will guarantee that fracking for oil and gas will not threaten water resources in the basin.” New York Gov. Andrew Cuomo said, “Protecting and preserving our water resources is paramount to ensuring the health and wellbeing of New Yorkers and of all residents living within the Delaware River Basin. With this resolution, the DRBC builds on New York’s leadership to protect the environment and public health from hydraulic fracturing, while protecting this vital water source that millions of people depend on every day. ‎I am proud to stand with my colleagues from Delaware and Pennsylvania in approving this critical resolution, and we will continue to work on developing the necessary regulations to codify this commonsense resolution.”” Pennsylvania Gov. Tom Wolf said he was pleased to see the DRBC take a step forward after years of study. “Today, we are acting to protect a watershed that supplies drinking water to more than 15 million people in one of the most densely populated areas of the country,” he said. “I believe this resolution preserves water quality and water supply for the residents of the watershed, and will protect this precious resource for generations to come. 

North Carolina officials reject environmental plan for Atlantic Coast Pipeline --  Gov. Roy Cooper’s administration has rejected environmental plans by Duke Energy and three other energy companies to build an interstate pipeline to carry natural gas from West Virginia into North Carolina. The letter of disapproval from the N.C. Department of Environmental Quality is the first decision on the proposed Atlantic Coast Pipeline from any state or federal government agency in the three states the project would traverse. Duke Energy is also expecting a decision this month from the Federal Energy Regulatory Commission as to whether the $5 billion pipeline project is necessary. The N.C. Department of Environmental Quality said the 600-mile underground pipeline, which would travel through eight North Carolina counties, including Johnston and Nash, does not meet the state’s standards for erosion and sediment control. The agency has asked Charlotte-based Duke and its business partners to resubmit the application with additional information within 15 days, or to contest the agency’s disapproval and request a hearing within 60 days.The erosion plan is one of several hurdles the Atlantic Coast Pipeline needs to clear in North Carolina. The project also needs an air-quality permit for a compressor, a machine that pushes the gas through the pipeline. And it needs a water-quality permit allowing developers to drill through streams and wetlands, as well as several storm water control permits for multiple locations along the proposed route.  Duke issued a statement Monday saying it will submit the information requested for the erosion and sedimentation permit. The company has said the pipeline is expected to start moving natural gas in late 2019.

Factbox: Agency says 78% of gas, 93% of US Gulf oil output shut in due to Nate - About 78% of gas production and almost 93% of the oil output from the offshore US Gulf of Mexico remained shut in Sunday in the wake of Hurricane Nate, which careened through producing regions in the central Gulf before making landfall late Saturday in eastern Louisiana and then Mississippi, the US Bureau of Safety and Environmental Enforcement said.  More than 2.5 Bcf/d of natural gas production was shut in, while 1.62 million b/d of oilproduction was down as a result of operators being forced to evacuate production platforms in the path of the storm. Based on data reported as of 11:30 am CDT, BSEE reported that a total of 14 rigs, representing 70% of rigs operating in the Gulf, and 298 platforms, representing 40% of operating platforms, were evacuated.  Ten dynamically positioned rigs were moved out of the hurricane's path as a precaution; that's 55.6% of the 18 such rigs currently operating in the Gulf.  Garden Banks Pipeline said it planned to return personnel to the South Marsh Island 76 platform Sunday afternoon. Garden Banks has been able to remain in service throughout the event, the pipeline said.Nautilus Pipeline is planning to return personnel to the Ship Shoal 207 platform Sunday afternoon, the pipeline said. The evacuation constitutes a point-specific force majeure for Anaconda at SS207 (992203) and Cleopatra/Walker Ridge at SS207 (992202), Nautilus said. Manta Ray pipeline said it is planning to return personnel to the Ship Shoal 207 and Ship Shoal 332A platforms Sunday afternoon.

Over 1 mil b/d of Gulf of Mexico crude output still shut-in after Nate: BSEE -- More than 1 million b/d of crude remains shut-in in the US Gulf of Mexico Tuesday after Hurricane Nate passed through the region over the weekend, although a couple of companies have publicly said they have begun to restart production. Shut-in production of 1.024 million b/d represents nearly 59% of the US Gulf's crude output, the US Bureau of Safety and Environmental Enforcement said Tuesday. In addition, 1.485 Bcf/d of natural gas output is also still shut-in, which is 46% of the US Gulf's gas output, BSEE said. Also, 66 platforms and one rig remain evacuated, which are 9% of the total platforms and 5% of the total rigs in the Gulf, respectively. Earlier Tuesday, ExxonMobil said it had restored production at its Julia and Hadrian South deepwater platforms, and was working to restore its shallow-water Mobile Bay production. Late Monday, Murphy Oil said it was restoring the output of Front Runner and Medusa, two deepwater production facilities it operates. Nate, a fast-moving storm, made landfall late Saturday as a Category 1 hurricane and raced east across Louisiana, Mississippi and Alabama on Sunday. So far it appears to have caused little or no damage to oil infrastructure. 

Offshore US operators continue restarting shut-in Gulf of Mexico output: BSEE - Offshore operators in the Gulf of Mexico continued to restart production on Thursday after as much as a week of shut-ins from Hurricane Nate last weekend, the US Bureau of Safety and Environmental Enforcement said. By noon CDT (1700 GMT) Thursday, 343,539 b/d of oil was still shut in, or about 20% of all Gulf of Mexico production, as well as 399,920 Mcf/d of natural gas, or 12% of all gas produced in the Gulf. By contrast, on Wednesday, 571,854 b/d of oil, or 33% of the US Gulf's total, and 660,550 Mcf/d of gas, or 21%, was shut in. Late Wednesday, Chevron said it had resumed normal operations in all its Gulf of Mexico fields that had been shut in prior to Nate's approach. That included the company's Jack/St. Malo, Tahiti, Petronius, Genesis and Blind Faith fields, spokeswoman Veronica Flores-Paniagua said. Nate, a fast-moving hurricane, moved ashore late Saturday as a Category 1 storm. 

Apache scouts out more drilling locations in Alpine High - Houston Chronicle: Apache Corp. has scouted out Alpine High, a region in West Texas where it discovered a large bounty of oil last year, and found thousands more drilling locations. The Houston oil producer said it has boosted the number of potential drilling spots in the area from between 2,000 and 3,000 up to 5,000. More than half of those spots, around 3,500, are in a so-called wet gas window, with 1,000 in a dry gas region and another 500 in the oil-rich Wolfcamp and Bone Springs play. "Each of these plays is highly economic at current commodity prices," Apache CEO John Christmann said in a statement.

Oil, gas executives see reduced US rig deployment in 2018: Deloitte survey -- A majority of oil and natural gas company executives polled in a survey released Wednesday expect a net decrease in rig deployment next year compared with 2016 levels, as spending by operators slides amid a forecast that US commodity prices will remain cheap.The survey by consulting firm Deloitte of over 250 industry professionals highlights the uncertainty producers, processors, pipelines and exporters see in the energy sector heading into 2018, even as the Trump administration promises new opportunities for projects.Half of upstream oil and gas executives surveyed expect up to a 10% decline in capital expenditures next year versus last year, including 4 in 10 expecting exploration spending to fall, Deloitte said. Some 58% expect a net decrease in rig deployment. On the midstream side, 56% of executives expect a decrease in capital expenditures in 2018 versus 2016, while only one in eight expect an increase over the next year, the survey found. Pipelines are seen as the best opportunity for growth in 2018, with the Gulf Coast seen as the most enticing region. Top prospects include expanding into new markets such as LNG.  Still, executives surveyed expressed concerns about environmental issues, controlling costs and existing regulations.  "The protracted holding pattern we've been in for the last two years seems to have shaken executives' confidence in every sector -- upstream, midstream and downstream," said John England, a Deloitte vice chairman and leader in the firm's US energy and resources unit, in a statement. "As the industry hunkers down to focus on cost reduction and productivity, one silver lining may be a drive to the next wave of digital technology adoption to uncover new efficiencies important to success." Other findings of the survey include:
* Almost half of respondents expect Henry Hub natural gas to be between $2.50-$3/MMBtu in 2017, with price increases expected for 2018, and into 2020, up to $3.50/MMBtu.
* Oilfield services is seen as the sector with the greatest potential for increased mergers and acquisition activity, followed by upstream exploration and production, integrated oil and midstream.

Oil storage tanks explode, burn in Brighton, for the second time in three weeks - Great Western Oil and Gas storage tanks on the north side of Brighton exploded and burned Thursday — the second time in three weeks that crews were called to fight a blaze at the site. Two workers unloading materials at 821 Weld County Road 27 reported an explosion at 2:12 p.m., Brighton Fire Department spokeswoman Natalie Ridderbos said. The tanks are just southwest of the Vestas factory where blades for wind-power systems are built. The oil workers weren’t hurt, she said. Great Western officials “had to turn off the natural gas lines before we could fight the fire,” Ridderbos said. “It is for our safety.” Nearby homes were not evacuated. Stan Hiller, 61, whose farm is about 200 yards north of tanks, said Thursday’s fire wasn’t as big as the one on Sept. 20. “But it makes you nervous,” said Hiller, who has oil and gas operations on his property. “I thought those tanks would start blowing up in sequence … just part of the business.” Crews from Brighton, North Metro, South Adams and Fort Lupton fire departments responded and will manage the fire until the oil burns out, Ridderbos said. “The last time this happened, it was a few hours.” There was an investigation of the previous fire, but officials couldn’t say what the outcome of that probe was. “We are working with the operator to find out why this happened again,” Ridderbos said.

Montana pipeline proposed to transport CO2 for oil recovery   (AP) — An energy company is seeking federal approval to build a pipeline in eastern Montana that would transport the greenhouse gas carbon dioxide for use in oil production along the North Dakota border. The $150 million pipeline would begin near the Wyoming border and stretch 110 miles to the Cedar Creek Anticline, an aging oil field near Baker, Montana, Denbury Resources spokesman John Mayer said. Carbon dioxide is considered a prime contributor to climate change, but it also can be used to breathe life into old oil fields. Companies pump the gas deep underground to push out more oil from tapped-out reserves. Cedar Creek Anticline has potential reserves of 260 million to 290 million barrels of oil, Mayer said. Denbury, based in Plano, Texas, specializes in using carbon dioxide for oil recovery with projects completed or pending in Texas, Alabama, Wyoming, Mississippi and Louisiana. A second Denbury pipeline proposal would link the Shute Creek site to an existing pipeline network that extends into Montana. The 250-mile line would cost about $400 million, according to the company. 

Feds push back deadline for new Dakota Access review | TheHill: Federal lawyers said Friday that the government’s court-ordered environmental review of the Dakota Access pipeline will be complete by next spring, not this year, as previously expected. In a court filing, the Army Corps of Engineers said it was pushing back its review schedule while it waits for new oil spill modeling from the developers of Dakota Access. “The Corps’ original estimate that its review and analysis of the remand issues would conclude between late November and early December 2017 was based in part upon the Corps’ understanding that it would take Dakota Access approximately thirty days to provide the requested information,” lawyers wrote in their filing. “Given the current expected time frame for the receipt of additional information, the Corps now anticipates that its review and analysis of the remand issues will not conclude until approximately April 2, 2018. The Corps is actively working on ways to shorten this timeline,” they wrote. District Court Judge James Boasberg, in June, ordered the Army Corps to conduct a more thorough environmental review of the Dakota Access pipeline after tribes said the project’s route through North Dakota posed environmental and cultural threats. The pipeline is operational and oil is flowing through it, and Boasberg is currently considering whether to shut it down during the Army Corps’ new review.

Dakota Access Pipeline to Remain Operational During Environmental Impact Study -  On Wednesday, a federal judge ruled that the Dakota Access Pipeline (DAPL) can continue operating pending an environmental review by the U.S. Army Corps of Engineers.  The Standing Rock Sioux Tribe sued the Corps in July 2016 , arguing that the pipeline destroyed sacred sites and threatens the water quality of the Standing Rock Indian Reservation that sits downstream of the site where the pipeline crosses the Missouri River in North Dakota.  In the ruling , the court found that shutting down the pipeline would not cause major economic disruption, as DAPL claimed. However, the court found a possibility that the Army Corps would be able to justify its decision not to do a full environmental review, and hence refused to shut down the pipeline while that process was underway. The Corps estimated that the new environmental review will be completed by April 2018.   "This pipeline represents a threat to the livelihoods and health of our Nation every day it is operational," said Standing Rock Sioux Chairman Mike Faith. "It only makes sense to shut down the pipeline while the Army Corps addresses the risks that this court found it did not adequately study. From the very beginning of our lawsuit, what we have wanted is for the threat this pipeline poses to the people of Standing Rock Indian reservation to be acknowledged. Today, our concerns have not been heard and the threat persists."

North Dakota landowners’ lawsuit against pipeline dismissed  (AP) — A federal judge has dismissed a lawsuit filed by nearly two dozen North Dakota landowners who alleged the developer of the Dakota Access oil pipeline and a consultant used deceit and fraud to acquire private land easements for the project. But a court case in Iowa involving the pipeline and landowners is expected to linger into next year. In North Dakota, U.S. District Judge Daniel Hovland in a ruling dated Tuesday sided with a subsidiary of Texas-based Energy Transfer Partners and Contract Land Staff, a land acquisition consulting business also based in that state. The two companies disputed that the landowners had any valid claims, and Hovland also found their arguments lacking. “The court finds that the plaintiffs have clearly failed to specifically allege who made the fraudulent statements, when the statements were made, and to whom the statements were made,” the judge wrote. The $3.8 billion pipeline began moving North Dakota oil through South Dakota and Iowa to a distribution point in Illinois on June 1. The 21 North Dakota landowners sued in January, seeking more than $4 million in damages for what they called “misrepresentations, deception or other unfair tactics.” They alleged the Texas companies engaged in fraud while negotiating to lay pipeline on private land, resulting in compensation that was as much as nine times lower than what other landowners got. They also alleged they were told that if they didn’t agree to the offered amount, they faced losing money or getting nothing either because their land would be condemned through eminent domain or the pipeline would be moved elsewhere.

 Enbridge Energy defends plan to replace Line 3 oil pipeline (AP) — Enbridge Energy disputed a state agency's recommendation against the company's proposal for replacing its aging Line 3 oil pipeline across northern Minnesota, insisting in filings Wednesday that the project is needed to ensure adequate crude supplies for Minnesota and other Midwestern refineries for decades to come. The Minnesota Public Utilities Commission is considering whether to grant a certificate of need for the project, which has aroused opposition from environmental and tribal groups because of the potential impacts on climate change and pristine waters where Native Americans harvest wild rice. The state Commerce Department surprised both sides last month when it concluded that the project isn't needed and that it won't benefit Minnesota enough to justify the risks. Enbridge officials asserted in rebuttal filings with the PUC that the $7.5 billion project is necessary and that Minnesota will benefit because it will make its pipeline network safer across the state and more reliable, and because the state is part of a broader regional market in which products from refineries in nearby states flow back to Minnesota.  Calgary, Alberta-based Enbridge wants to replace Line 3, which was built in the 1960s, because it now runs at just over half its original capacity of 760,000 barrels per day and the costs of maintaining it are growing. The pipeline runs from Hardisty, Alberta, through the northeast corner of North Dakota, and crosses Minnesota on its way to Enbridge's terminal in Superior, Wisconsin. Construction is already underway in Canada and Wisconsin. 

 Energy East Death Pins Oil Sands Hopes on Two Troubled Pipelines --- TransCanada Corp's cancellation of the Energy East pipeline leaves Canadian oil producers more dependent than ever on the Keystone XL and Trans Mountain proposals, two projects facing ardent opposition in their own right.Energy East would have given oil producers in Alberta and Saskatchewan, who are heavily dependent on buyers in the U.S., another market for their crude by carrying about 1.1 million barrels a day to refineries and a marine-shipping terminal in eastern Canada. TransCanada cancelled that project on Thursday amid regulatory hurdles and weaker oil prices.With Energy East scrapped, Western Canada's producers are now counting on Kinder Morgan Inc's project to carry crude to the Pacific Coast, and TransCanada's Keystone XL to connect with U.S. Gulf Coast refineries. Both face significant hurdles: Keystone XL needs approval in Nebraska, and Trans Mountain is hampered by a legal challenge in British Columbia. "It definitely puts the leverage on the pipes that are on the docket to get through,". Keystone XL and Trans Mountain must be built "or you are looking at an industrywide problem in a very short amount of time." Pipelines in Western Canada, which holds the world's third-largest crude reserves largely in Alberta's oil sands, can carry about 3.3 million barrels of crude a day, according the the Canadian Association of Petroleum Producers, or CAPP. Meanwhile, the area is expected to produce 3.92 million barrels a day this year and 4.2 million next year as a number of large oil-sands projects come online. The pipeline pinch already had producers shipping more of their crude by rail, which can cost as much as three times more to get oil from Alberta to the U.S. Gulf Coast. Should Keystone XL and Trans Mountain fail to be built, oil producers could end up shipping more than 300,000 barrels a day via rail for at least five years, and some producers could shut in operations, Evans said. Evans said it's probable that Trans Mountain will be built and that Enbridge Inc. will be able to proceed with the replacement and expansion of its Line 3, which carries Western Canadian crude to Wisconsin.

Sick of lawsuit limbo, protester tells fracking company: 'Put up or shut up' -  - CBC News: Some anti-fracking activists are still dealing with the legal repercussions of protests four years ago that successfully halted shale gas exploration by Houston-based SWN Resources Canada. Kent County was the scene of explosive protests throughout the summer and fall of 2013 as SWN attempted to conduct seismic testing to determine the extent and viability of shale gas deposits in the area. Mi'kmaq groups joined forces with non-Indigenous allies to halt the work, which they feared could lead to an environmental disaster.According to court filings, SWN alleged that those 10, among others, engaged in trespass, false imprisonment, conspiracy and intimidation to prevent the company from completing work it was legally allowed to do. SWN said the months of protests cost the company $5,000 an hour in lost work, and it demanded an unspecified amount in damages as well as a permanent injunction prohibiting the defendants from further protests. Ann Pohl of Bass River, one of the defendants named in the suit, was a familiar face at the roadside protests and describes herself a non-violent activist. Pohl filed a statement of defence within the allotted time frame and waited to see what would happen. After years of waiting she had enough. "For the rest of my life, I intend to be a person who is incredibly active on these issues, so having this lawsuit sitting around hanging over my head was going to get in the way of things," Pohl said. "I should either get them to put up or shut up." She said she was afraid to do it but, after getting legal advice of her own, she contacted SWN's lawyer to ask that the company move the case along. "Then six months later I get a letter from them. They decided to discontinue." 

Canadian oil & gas exploration suffers as independents struggle to find financing - Smaller Canadian independent energy companies are having trouble obtaining financing and, as a result, exploration is on a downward trend in the country.  Considerable reductions in capital for exploration and the number of smaller explorers are raising questions about the Canadian oil and gas industry’s ability to ramp up production when oil prices rebound. According to Bloomberg, Canadian oil and gas explorers suffered a 39% drop in the amount of capital raised during the first eight months of 2017 compared to the same period a year earlier. Canadian oil and gas explorers, predominantly small independents, announced 73 primary or secondary share offerings of US$100 million or less for total proceeds of US$535 million. By comparison, a total of US$881 million was raised during the same period of 2016, but even this amount was less than half of the US$1.34 billion generated in the first eight months of 2012, when oil prices averaged more than US$95 per barrel.

Tapestry spans two city blocks, nine years of one artist's life and several million years of oil - Calgary - CBC News - When it comes to creating two-block-long pieces of art that take nine years to complete, medieval European craftsmen have nothing on Calgary artist and filmmaker Sandra Sawatzky.That's because Sawatzky turned back the clock for her latest project, the Black Gold Tapestry, to around the 15th century, where she took inspiration from the Bayeux Tapestry, a 67-metre (220-foot), hand-embroidered narrative of the Battle of Hastings in the 11th century. For Sawatzky, the notion of using the format of the Bayeux Tapestry to tell a Calgary story that's also a global one was appealing — even if it was going to have to chew up a sizeable chunk of her life to get done. "I thought wouldn't it be neat to do something like a story — a film on cloth? And so that's what I did," Sawatzky said on the Calgary Eyeopener on Monday.

 EIA's Monthly Short-Term Energy Outlook And Winter Fuels Outlook -- October 11, 2017 -- After last year’s relatively warm winter, our forecast assumes this winter heating season will be more normal and see increased spending on heating oil, propane, and natural gas because of higher fuel consumption and prices. Expenditures are expected to be relatively in-line with an average winter. We forecast that homes that depend on natural gas for heating will experience a 12% increase in their heating costs compared to last winter. Despite the late summer’s hurricane disruptions, petroleum markets have largely returned to normal operations. Gulf Coast refineries reached 86% utilization by the last week in September, which was only 5 percentage points below average utilization for this time of year.” Consumers should expect to see retail gasoline prices continue to decrease from the two-year high of $2.69 per gallon, following Hurricane Harvey. We are forecasting average prices at the pump will fall to $2.33 per gallon by December.” Crude oil production in the Gulf recovered following Harvey, with production increasing by about 70,000 barrels per day in September, putting that month’s average production at 1.7 million barrels per day.”  Based on our observations of current drilling and our price expectations, the forecast continues to project that U.S. crude oil production in 2018 will top the 1970 annual production record of 9.6 million barrels per day, with the current output forecast at 9.9 million barrels per day next year.   We expect that natural gas inventories will reach 3.8 trillion cubic feet by the beginning of the heating season at the end of this month, in-line with average levels from the past five years.  U.S. natural gas exports are expected to grow this winter and mark the first winter the United States will be a net exporter of natural gas. U.S. homes that depend on electricity for heating are forecast to see their bills increase by 8% this winter compared with last winter.  Coal exports were up 62% from January to July 2017 compared to the same period in 2016, based on strong global demand.. For 2017, electricity generation from utility-scale solar power is expected to increase by 40% and small-scale solar is estimated to climb by 28%.

North Sea Oil Squeezed as U.S. Ships Crude Like Never Before -- As crude oil gushes out of the U.S. like never before, it looks increasingly like North Sea oil will suffer collateral damage. America exported a record high 1.98 million barrels a day of crude in the week ended Sept. 29, equal to the crude that normally gets shipped every day in the North Sea. Much of the U.S. outflow is going to Asia, which has become increasingly important in recent years in determining North Sea oil prices, effectively sandwiching Brent crude between bearish forces. “It’s direct competition to North Sea production on many different fronts,” said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. Where U.S. exports go to Asia, “it will be more difficult for the North Sea to push some of its barrels outside of the region. It creates competition. It’s going to be a bearish factor for the North Sea market.” The impact of rising American oil shipments on Brent -- for many in the industry the most important crude benchmark -- shows the increasingly disruptive force of U.S. crude in international markets. Washington in late 2015 lifted a 40-year ban on most oil exports, in the process reshaping the world’s energy map with U.S. crude being sent by trading houses such as Vitol Group and Trafigura Group to faraway locations including Switzerland, China and Israel. The U.S. export restrictions were imposed in the aftermath of the 1973-74 oil crisis. U.S. producers ship barrels directly to refineries in Europe, placing the cargoes in competition with North Sea supply. At the same time, they’re sending a growing share to the prized Asian market. Refineries in China and South Korea in particular have become a critical source of demand for North Sea oil in recent years, helping to clear any oversupply out of the European market. Of the flood of crude exported by the U.S. late last month, more than half went to East Asia and nearly a third was shipped to Northwest Europe and the Mediterranean region, according to a trader who’s monitoring the region’s exports. The remainder was shipped to the Caribbean and Latin America, the trader said. That’s in line with exports so far this year, according to data from the U.S. Energy Information Administration and Kpler, a company that monitors ship movements. The size of the U.S. exports -- which has jumped from 25,000 barrels a day a decade ago to nearly 2 million barrels a day now -- is now rivaling those from the North Sea.

Fracking Questions – how not to conduct a consultation - The SNP led minority Scottish Government has announced that it will ban fracking for tight shale oil and gas in Scotland. A party that once drooled over North Sea oil and gas revenues and lamented the riches lost to the Sassenachs south of the border now appears to have lost its appetite for what could be a second oil and gas bonanza. This decision is nothing short of astonishing and shows how we have all become hostages of The Green Menace. A consultation on fracking was hijacked by Green lobby groups who managed to muster around 60,000 negative responses from those emotionally against all forms of fossil fuels. 5,235,000 Scots did not respond and presumably do not hold strong views on fracking. What we can say is that around 1.1% of the Scottish population are strongly opposed to fracking which is hardly a mandate for the ban. Let me begin by laying out my own stall on fracking policy. I am less gung ho than many for a number of reasons. First, shale oil and gas is often described as cheap, which it is not. What Is the Real Cost of Shale Gas is one of the most read posts on this blog (29,941 reads). To be sure, the cost of developing shale has come down, but from drilling patterns, it is clear that US shale oil still needs >>$50 / barrel to turn a profit. The shale revolution in the USA has been funded by Wall Street and not by profits made. The productivity of different shale plays in the USA varies enormously, as do the costs. How productive will Scottish shale be? There is only one way to find out and that is to drill and test it. Second, the environmental impact of drilling could be substantial. Drilling a long horizontal well has a footprint not unlike a conventional well and land-based drilling of this sort has taken place across the UK for many decades. But at the fracking stage, large numbers of trucks are required to move fracking fluids and proppants to and from the well site. And in a successful development, several hundreds of fracked wells are required. I have sympathy for those who don’t want this going on in their backyard. The UK government has opened the door to direct compensation for those adversely affected by shale developments and the Scottish Government could do the same.

Offshore Rig Firms See End To Worst Downturn In History -- (Reuters) - Demand for offshore rig rental globally is starting to recover from its worst ever downturn, led by oil firms' growing demand for harsh-environment exploration and triggering multi-billion dollar tie-ups among drillers hoping to profit, executives said. While the 2014-2016 oil price crash caused firms to cut exploration budgets, ending a boom in rig demand and bankrupting many owners, energy companies are now seeking to replenish their hydrocarbon reserves. The nascent demand for harsh-environment rigs, particularly for North Sea drilling, could lead to increased rates for these units as soon as 2018, and other categories may follow in 2019 or 2020, companies and analysts say. Transocean Chief Executive Jeremy Thighpen told UBS analysts he would not be surprised to see next fixtures for such rigs to rise to $300,000 from current levels of around $200,000. Oslo-based Pareto Securities also said it expected day rates for modern harsh-environment rigs to rise to $250,000-$300,000 in contracts awarded in 2018, with other segments rising later. Nordea bank said it saw the rig market in the North Sea tightening in 2018, particularly for high-end rigs, with Odfjell Drilling signing in August a nine-month contract with Aker BP at a day rate of $250,000. However, Simen Lieungh, chief executive of Odfjell Drilling, told Reuters he did not expect day rates rising significantly to $350,000-400,000 until late 2019. Historically, the percentage of the global fleet that has being utilised had to rise to 85 percent or more for day rates to increase significantly. Today they are around 60-70 percent, depending on the rig segment. Some, however, pointing to a large supply overhang in the jack-up market, with total supply counting more than 500 units, while current demand is around 300. Nordea says some 100-200 jack-up rigs may need to be scrapped before day rates improve.

Norway Takes Hard Look at Impact of Climate Change on its Oil Riches - What is 47 billion barrels in oil and gas really worth in an age where renewable sources are increasingly filling the world’s energy needs?That’s what Norway, western Europe’s biggest oil and gas producer, is asking itself as it prepares to take a hard look at the risks climate change poses to its economy and its petroleum resources even as it moves exploration and production farther into the Arctic. After being re-elected last month, the Conservative-led government is now setting up a commission to study climate-related risks, ranging from physical threats to the impact of changes in energy consumption on the value of its oil and gas resources, Climate and Environment Minister Vidar Helgesen said. “We’re seeing both accelerating climate change that can lead to large costs as a consequence of infrastructure destruction, and accelerating technology changes, especially in energy and transportation. That’s coming very fast, and that has an impact on the value of fossil resources over time.” Petroleum production, led by Statoil ASA, has made Norway one of the richest countries in the world, helping it amass a 8 trillion-krone ($1 trillion) sovereign wealth fund. But Norwegians are now increasingly questioning whether it makes financial or moral sense to invest in more exploration and output as energy sources such as solar and wind become cheaper.

France’s Biggest Bank Becomes The First To Cut Off Funding For Natural Gas Fracking -- BNP Paribas on Wednesday became the first big bank to pledge to stop financing natural gas fracking projects as part of a new policy cheered by environmentalists as having the greatest impact of any financial giant yet. Under the new policy, France’s largest bank will refuse to lend to companies who generate more than half their revenue from fracked oil, gas or liquefied natural gas export terminals. The rules also apply to tar sands, considered one of the dirtiest sources of oil. Multinational banks, including BNP Paribas, began putting strict limits on funding for coal projects in 2015. At that point, coal was becoming an unprofitable investment, and banks faced mounting pressure from environmentalists to stop supporting the dirtiest fuels in the lead up the Paris climate agreement. Last month, JPMorgan Chase became the target of a new campaign urging it to end financing for companies that drill tar sands, a particularly dirty source of oil that forms the backbone of Canada’s industry. Until now, no financial giant has clamped down on natural gas, which produces far less carbon dioxide than oil or coal. The fuel now provides most of the United States’ electricity and is credited with reducing emissions by weaning the country off coal. That has allowed advocates to tout the gas as a critical tool in the transition from heavily-polluting fuels to renewable energy. Natural gas also has critical geopolitical significance, as President Donald Trump moves to increase pipelines and build up export infrastructure to start selling the fuel to overseas buyers, including energy-hungry China.

BP expands its LNG Carrier Fleet - BP will soon take delivery of six new, state-of-the-art liquefied natural gas (LNG) dual-fuel tankers to support its expanding global LNG portfolio and to respond to growing demand for lower-carbon energy sources around the world. The company says the expansion will support the group’s broader shift to natural gas. BP’s finance partners KMarin and ICBC Leasing are investing over $1 billion in the tankers, which will join existing tankers in BP Shipping’s fleet in 2018 and 2019. The vessels will help service a 20-year liquefaction contract with the Freeport LNG facility in Texas, as well as other international LNG projects in BP’s global portfolio. “These vessels will significantly increase BP’s ability to safely transport LNG to anywhere in the world, directly supporting BP’s global natural gas strategy,” said BP Shipping CEO Susan Dio. “They also will be among the most fuel-efficient and technically advanced LNG tankers ever built.”  The LNG vessels will have state-of-the-art ‘slow speed’ dual-fuel engines – powered by liquid as usual or pressurised 300bar gas – which are widely recognised as the most efficient around. The new ships are designed to be about 25 percent more fuel efficient than their predecessors. They also will be fitted with a reliquefaction plant, meaning evaporated natural gas in the cargo tanks can be returned to the tanks as LNG, allowing the ships to deliver more LNG to the market.

Water Contamination and Cancer: The Other Impact of Oil Drilling - Access to drinking water is not a new problem in the Gulf of St. George; in some cases it is the birthmark that the populations carry in the Southern Patagonia. A very widespread version – and equally questioned – adjudges the discovery of oil in Comodoro Rivadavia, in December 1907, in the search for water to supply the people born of the agricultural development of Ideal colony called the Sarmiento colony.   Fable or not, from that moment the incipient port town became the cradle of the Argentine oil industry and, over the years, became National Capital of the Oil.  As in other communities in the country where certain extractive activities or industrial processes are carried out, the population of Comodoro Rivadavia and Caleta Olivia affirms that some diseases are more prevalent than in the rest of Argentina. The lack of statistics and research that give or take to that perception, transform these societies into territories of uncertainty. “There are no statistics either private or government but there are a very striking number of patients with different types of cancers. We do not know why there is so much prevalence, if the prevalence has really increased, “says Néstor Sosa, surgeon at the Zonal Hospital in Caleta Olivia. “If there are no statistics you do not know what the problem is, you do not know how big the problem is, and you will not be able to solve it”, he warns, and completes the reflection: “In fact there is a policy almost of negation, does not see important gestures. For example, the Northern area [of the province of Santa Cruz] has an oncologist, so the ability to solve the problem is very limited. “ “I know there are a lot of breast, lung and especially rectal and colon cancers, which is what you see frequently when you go through oncology rooms,” says Sosa, who is also Assistant Secretary of the branch local of the Association of Workers of the State. “Factors in common may be many, but the one that is most blamed, without having a scientific handle, is water. There is no serious study that denies or confirms it. “

Brazil to ramp up oil production before ‘renewable era’ hits (Reuters) - Brazil plans to boost oil exploration and production to seize on its reserves before the world enters the “renewable era” and other technologies hurt demand for the fossil fuel, Deputy Energy Minister Paulo Pedrosa told Reuters on Wednesday. “The stone age did not end for lack of stone, and the oil age will not end for lack of oil,” Pedrosa said in an interview. “A race has begun to take advantage of the resource, because in the future it might not have value.” Since 2006, Brazil has discovered potentially massive stores of oil and gas trapped below a layer of salt under the ocean floor off its coast, but slumping global oil prices have complicated efforts to exploit these reserves. Pedrosa said the Organization of Petroleum Exporting Countries (OPEC), which has cut output to reduce a global crude glut and support prices, should not expect Brazil to help control the global oil supply. OPEC’s chief said Tuesday the cartel was meeting with the United States and reaching out to other countries in an effort to restrict global supplies and combat low prices. “There was a time when there was concern in the sense that this wealth must be exploited carefully, so that the next generation could take advantage of it,” he said. “Increasingly, it’s the opposite, we need to accelerate the use of this wealth.”

Fracking in the NT: Indigenous community 'pushed' to consider benefits because industry 'not going away'  - Australian Broadcasting Corporation - Consultants working for the Northern Territory's independent fracking inquiry have been accused of suggesting Indigenous communities exploit the opportunity and ask for benefits, because a gas-extraction industry is inevitable.The consultants surveyed remote communities in August as part of a social impact report that was commissioned by the inquiry, which will make recommendations on whether or not to lift the ban on fracking in December. One of the remote communities was Elliot, which is 700 kilometres south of Darwin. Residents there recorded a consultation session in which they were repeatedly asked to consider asking for new houses, a cattle station, cultural centre and supermarket. Elliot resident Eleanor Dixon believes the social impact study has been compromised because of the consultation by Darwin company Cross Cultural Consultants. "I thought it was really disgusting. The consultant was really, really pushing. He was suggesting a lot of ways for us to use the benefit," she said. In the consultation recording provided to the ABC, senior consultant Philip Elsegood told residents to prepare for fracking.Mr Elsegood repeatedly suggested they should ask for benefits if fracking goes ahead. "I mean, if you mob lose the battle and they're going to do it anyway, how do you get benefit from it? What is it that you would see as benefit? So in Elliot they said we need housing, but nobody wants to pay rent," he told the residents. "Start to think, how do we benefit? How do we build culture? Do we get a cultural centre built at Elliot?"

 NT Indigenous leaders tell Prime Minister to back off over fracking --  Indigenous leaders from across the Northern Territory are calling on the Gunner Government to not give in to pressure from the Prime Minister by overturning its fracking moratorium.The leaders are holding demonstrations and strategy meetings throughout the weekend in the remote town of Elliot, in the heart of the Beetaloo Basin, which gas companies including Origin Energy want to target for fracking.At a rally in Elliot's main street, Indigenous residents from Elliot, Tennant Creek, Yuendumu, Katherine and Borroloola called on the Territory Government to ban fracking permanently."Do we want to drink contaminated water? No! This will affect us mentally, socially, culturally, and our health, if fracking goes ahead," Elliot Indigenous resident Mary James said.Borroloola resident Nicolas Fitzpatrick was among the group who travelled from Borroloola."We came 600 kilometres here to stand in solidarity with these mob from Marlinja and Elliot, because if they drill here and mess up the water here it can affect us all across the Territory. So it's very important that we stand together," he said. Yuendumu community leader Ned Hargraves called on the NT Government to prioritise environmental concerns over the threat of losing GST money.

Libyan Oil Output Set to Rebound -- Libya’s oil output, hampered by sporadic shutdowns at fields and ports, is on track to resume its recovery as the OPEC nation’s biggest crude deposit started pumping after a three-day forced halt. The Sharara field re-opened on Wednesday and is restoring production, the state producer National Oil Corp. said on its website. NOC lifted force majeure at the field as of Wednesday and is able to resume delivering Sharara crude to customers, it said in an emailed statement. NOC Chairman Mustafa Sanalla said Monday on Libya TV that the nation’s daily output will reach 1 million barrels within days of the field’s re-opening. Sharara, in western Libya, pumped about 234,000 barrels a day before gunmen on Sunday forced workers to halt production. The armed group was demanding back pay, the release of some members who were under detention, and supplies of fuel. It wasn’t immediately clear if Libyan authorities had met the group’s demands. The three-day halt highlights the hurdles for Libya as it tries to reboot oil production after years of political division and internal conflict. The country with Africa’s largest crude reserves was pumping 1.05 million barrels a day in August just before armed men closed a pipeline linking Sharara to a port and caused the field to stop pumping for more than two weeks. Increasing production from Libya may complicate OPEC’s push to re-balance the oil market by urging producers to limit output.

Iraq and Iran Boost Oil Exports in Sales Battle With Saudis - Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from rival Saudi Arabia to win buyers in key markets like China and the U.S. Iraq shipped 3.98 million barrels of crude a day, the highest since December, while Iran’s exports rose to 2.28 million barrels a day, the most since February, according to ship-tracking data compiled by Bloomberg. Saudi Arabia’s exports were 6.68 million barrels a day, the second-lowest for this year, the data show.  Iran and Iraq’s moves to grab market share cast a light on internal tensions within OPEC as Saudi Arabia, the group’s de facto leader and world’s top oil exporter, works to re-balance the global market. State-run Saudi Arabian Oil Co., known as Aramco, will make the deepest cuts in supplies to customers in its history in November, the energy ministry said Monday.  “Iraq and Iran are both very opportunistic in selling into markets where buyers are no longer getting the same Saudi volumes,”  . “We’ve seen Saudi Arabia’s exports lower over the last several months, which is consistent with their focus on the re-balancing process.”Saudi Arabia’s Energy Minister Khalid Al-Falih promised in May that the country would “markedly” reduce exports to the U.S. in an effort to curb swollen crude inventories. Shipments to the U.S. dropped from March through August, when they reached the lowest this year, according to the tanker data. Overall Saudi exports plunged to the lowest in 34 months in July and were about 1 million less than a year earlier, according to the Joint Organisations Data Initiative. Riyadh-based JODI collects data including production and exports directly from countries.Iraq exported 871,000 barrels of crude a day to the U.S. in September, exceeding Saudi Arabia for a second straight month, according to tanker tracking data. Iraq shipped almost twice as much crude as the Saudis did to the U.S. in August, the data show. Iraq has also edged out Saudi Arabia as the biggest supplier to India, selling more crude to the world’s second-most-populous country for seven months this year, according to tanker tracking data. Iraq’s average sales to India are 794,000 barrels a day in 2017 so far compared with 738,000 barrels a day for the Saudis. Aramco Chief Executive Amin Nasser opened an office in India this week to market crude and refined products and to target investment plans for the world’s fastest-growing oil market.

Feature: Nigerian producers eye India's new-found appetite for US crude - The competition that Nigerian crude oil cargoes has faced from US crude oil grades in Northwest Europe over the past two years has begun to expand into other regions, according to trading sources. Since the US crude export ban was lifted in December 2015, there has been a gradual increase in shipments of US barrels to Northwest European and Mediterranean refiners, with the flow increasing sharply in recent weeks due to a wider Brent/WTI futures spread. As Northwest Europe is a major demand center for Nigerian light sweet barrels, this could be a rather bearish development for Nigerian differentials. In recent weeks, this competition has also extended east, with India increasingly looking to the US for its crude oil buy tenders. India is the largest buyer of Nigerian crude and as such plays a crucial role in the direction of Nigerian crude differentials. The Association of Southeast Asian Nations is set to have a significant impact on energy and commodities in the coming decades, as the region’s demand climbs due to favorable geography and demographics. Download our latest special report to read about the challenges and opportunities in ASEAN's commodity landscape While the quantity of US crude being purchased by India companies hasn't yet impacted Nigerian differentials, West African crude traders said that it is another form of competition for Nigerian sellers to be aware of. "There is competition from the US in India, but it's not big competition yet," said one WAF crude trader. "US crude is quite variable in quality and the Indians want to be certain about the quality they are getting. Some US cargoes are better than others." 

Saudi Aramco Plans ‘Mega Investment’ in World's Top Oil Market  - Saudi Arabia’s state-owned oil giant has “mega investment” plans for the world’s fastest growing oil market. Saudi Arabian Oil Co. aims to create a fully integrated business in India and is interested in partnering on a planned refinery project on the country’s west coast, Chief Executive Officer Amin Nasser said Monday in New Delhi. Investing in the plant, which is slated to be among the world’s largest, follows efforts by the producer known as Saudi Aramco to bulk up on refining assets ahead of what could be the biggest-ever initial public offering.  “India has all the signs of a prosperous economy that is on the move. This is a market of investment priority and not a choice anymore,” Nasser said at the Indian Energy Forum by CERAWeek. “We have a number of partners with whom we are going to have serious discussions.”Saudi Arabia has been edged out as the top oil supplier to India amid an intensifying race among producers to retain their most-prized markets. India, which imports about 80 percent of its crude requirement, has been diversifying its sources of oil supply and is seeking more favorable terms from producers in the Middle East. It received its first oil cargo from the U.S. this month. Saudi Aramco held talks with India’s state-owned oil companies led by Indian Oil Corp. to discuss participation in the 60 million ton a year refinery being set up in the state of Maharashtra on India’s west coast, Oil Minister Dharmendra Pradhan said on Monday at the same event.

 India 'investment priority' for Saudi Aramco on surging crude oil, LPG growth -- Saudi Aramco said Sunday India was a priority destination for investment and that it was keen to play a bigger role as a crude and LPG supplier to feed an anticipated rise in demand. "Today, India is an investment priority," President and CEO Amin H. Nasser said while inaugurating Aramco India's new office in Gurugram, a suburb of the capital New Delhi. "As reliable suppliers of oil and LPG for decades, we are committed to providing those additional supplies that India will need," he added. India's Oil and Skills Development Minister Dharmendra Pradhan, who attended the event, said that establishing a stronger presence in India would help boost ties with Saudi Arabia. The Association of Southeast Asian Nations is set to have a significant impact on energy and commodities in the coming decades, as the region’s demand climbs due to favorable geography and demographics. Download our latest special report to read about the challenges and opportunities in ASEAN's commodity landscape "Aramco is a key partner for Indian refiners and there's great potential to take our partnership to a higher level beyond the supply of crude oil, refined products and LPG to new areas of research and development, engineering and technology. In return, India can offer competitive cost and capacity advantages," Pradhan said. Saudi Arabia is India's second-largest supplier of crude oil after Iraq, accounting for about 19% of the its imports. It also accounts for 29% of India's LPG imports. During fiscal 2016-17 (April-March), India imported about 39.5 million mt of crude oil from Saudi Arabia, according to the oil ministry. "Last year, India's oil consumption grew by over 8% compared with global growth of 1.5%, making it the third largest consumer of oil," Nasser said.

China’s shale oil reserves now rank third in the world - China’s shale oil reserves have reached 764.3 billion cubic meters, ranking third in the world after the United States and Canada, the 21st Century Business Herald reported, citing Zhang Dawei, Director of the Reserves Evaluation Center of China’s Ministry of Land and Mineral Resources.Despite the rapid development, Zhang also expressed worry over the performance of central, local and private enterprises.  “Some of the areas don’t create high economic value — many projects have seen losses,” he said at a shale gas forum in Shanghai on Wednesday.Zhang Yousheng, Deputy Director of the Energy Research Institute at National Development and Reform Commission, expressed similar concerns.“Many private enterprises have just entered the shale gas industry and the cost will be high, as will the need for a suitable market environment for further development,” he said. “But the country hopes to lower natural gas prices, so that more enterprises and residents can enjoy the results of the reform.”The current oversupply situation may also exist for a long period in the international gas market, he said, leading to  possible decline in China’s domestic oil prices. “This is a very difficult choice for local and private enterprises who wish to enter the shale oil industry,” Zhang said.

IEA: China's Crude Oil Buying Spree Looks Set To Continue (Reuters) - China has built its crude oil stockpiles at a record pace in 2017 and while its purchases could tail off towards the year-end, inventories could hit the billion-barrel mark in six months, the International Energy Agency said. China has spent around $24 billion on building its crude reserves since 2015, at an average of $50 a barrel, and now holds around 850 million barrels of oil in inventory. While China's spending on "excess" crude is tiny, given its $680 billion current account surplus since early 2015, its inventories are now equal to those of Japan and South Korea together, the Paris-based IEA said. Those countries' combined demand is half that of China. "Our calculations imply that the country’s import cover stands at about 90 days, while total demand cover is about 60 days," the agency added. Chinese oil stocks are opaque and data on them has been hard to come by or unreliable. Using figures from China's National Bureau of Statistics, along with cargo tracking, refinery throughput and crude output, the IEA crunched the numbers. "China has played a major role in global crude oil markets by helping to clear most of the excess seen in the last two to three years, which puts an even greater importance on understanding better, but also scrutinising the Chinese data," the IEA said in its monthly oil market report. The IEA said that in Europe's richest nations, total commercial oil inventories are around 1.47 billion barrels, 70 percent larger than China's, but with demand only 15 percent higher. China's efforts to beef up its strategic reserves of crude have accounted for a significant amount of demand for Atlantic Basin oil, which hit record highs this year. In the fourth quarter of this year, the IEA said it does not forecast any Chinese stockbuilding as demand should remain strong, although consumption is expected to slow in 2018.

North Asia's Saudi crude buyers receive up to 10% cut in November allocations - A number of Saudi crude oil buyers in North Asia have received up to a 10% reduction from their term volumes for November loadings, market sources said Tuesday, a day after Saudi Arabia announced it was preparing to keep its supply allocations for that month a record 560,000 b/d below its customers' requests. Saudi Aramco fielded demand for 7.711 million b/d in November loadings but would only allocate 7.150 million b/d, the Saudi energy ministry had said, as the kingdom aims to keep the OPEC/non-OPEC production cut agreement on track in its efforts to rebalance the market. That is far below its exports in November 2016 of 8.258 million b/d, according to the Joint Organizations Data Initiative. Sources with North Asian refiners said the allocation shortfall was massive, and would add to the tightness in Saudi crude supplies into Asia, given their difficulties in receiving any extra supplies from Saudi Aramco across its exported grades. "Our incremental supply requests for lighter grades have not gone through since September onwards," a North Asian refiner source said, adding that was in addition to previously unavailable incremental heavier grade supplies. China, the biggest oil consumer in Asia, is also receiving a cut for November loadings but below 10%, according a Beijing-based source familiar with the matter, to meet demand from the new 200,000 b/d CNOOC Huizhou phase 2 refinery project and PetroChina's 260,000 b/d Yunnan refinery.

OPEC Sep crude oil output up slightly from Aug on more from Libya, Iraq: Platts survey - OPEC oil output in September rose marginally by 10,000 b/d, as production increases in Libya and Iraq were largely offset by declines in Venezuela and Angola, an S&P Global Platts survey of OPEC and oil industry officials and analysts showed October 6.OPEC's 14 members saw their collective September output rise to 32.66 million b/d from 32.65 million b/d in August.That is some 740,000 b/d above its declared ceiling of about 31.92 million b/d, when Equatorial Guinea, which joined in May, is added in and Indonesia, which suspended its membership in December, is subtracted.OPEC announced the ceiling as part of a production cut agreement with 10 non-OPEC members, led by Russia, that calls on the entire group to lower output by 1.8 million b/d.Libyan oil output rose in September by 80,000 b/d to 910,000 b/d, as the key Sharara field, which has a full capacity of 300,000 b/d, was producing about 200,000 b/d for most of the month after the field was down from August 19 to September 5. But the North African country's output recovery remains fraught with challenges as the security of many fields remains volatile due to threats from a militant group. Iraqi compliance with its quota under the production cut deal remains among the weakest of the OPEC members, with production averaging 4.50 million b/d in September, still 149,000 b/d above its output quota.  Iraqi production rose 40,000 b/d from August on increased exports from the southern terminals on the Persian Gulf and increased refinery consumption. Venezuelan production fell 40,000 b/d to 1.86 million b/d in September, the survey found, as the country's crude exports dipped and its imports of diluents to blend with its heavy crude were also curtailed due to Hurricane Harvey.  The decline in Venezuela's output has accelerated in the past several months as various refinery units and heavy crude upgraders have been shut down, exacerbated by the country's deepening economic crisis.  Angolan output fell 30,000 b/d to 1.64 million b/d as exports and production of grades such as Pazflor, Dalia, and Plutonio were down, according to the survey. Nigerian production, meanwhile, fell 20,000 b/d to 1.84 million b/d in the month, as key grade Bonny Light has been on force majeure since September 16 following the shutdown of the Nembe Creek Trunk Line. Output in OPEC's largest producer Saudi Arabia was down 10,000 b/d to 10 million b/d, as despite a slight rise in exports, the end of summer resulted in lower direct crude burn, survey participants said.

 The Geopolitical Consequences Of U.S. Oil Exports - Two crucial things happened last week. The first you may have noticed – oil prices moved back up briefly. As for the second, most so-called “experts” seemed to have missed.See, the environment we’re seeing in energy markets is very different from what we saw only a week ago, when oil prices were also rising.Because last week also saw – for the first time in world history – a reigning Saudi Arabian monarch in Moscow for talks with Russia’s head of state.Historically, Russia has been much closer to Iran – Saudi Arabia’s main regional enemy.Now, King Salman and President Putin are expected to endorse the plan to extend the OPEC-Russia deal to cut oil production and boost prices beyond the current end date of March 2018. But that’s not all they’re going to talk about…  Other, more far-ranging matters will also be on the agenda, including the war in Syria.And the catalyst for this huge shift in global geopolitics is surprisingly simple. It’s all about America’s record-breaking oil exports… Now, there’s no indication that Russia and Saudi Arabia are on the road to an alliance on anything beyond oil prices. Even then, that accord remains only as long as it is in the subjective interest of the parties. Nonetheless, it is disquieting to Washington that any such prospects may be on the horizon… or that U.S. oil exports may be introducing a range of foreign policy concerns.  From an energy perspective, the main issue at hand is the OPEC-Russian deal to cap oil production, which is now almost certain to continue further than the agreed-on end date of March next year. And after some concerns had been raised over individual OPEC members exceeding the quotas the deal assigned them, evidence is now emerging that the restraint is holding. The major global sources of oil need to allow the worldwide market to rebalance.

Is This The Geopolitical Shift Of The Century? | OilPrice.com - The geopolitical reality in the Middle East is changing dramatically. The impact of the Arab Spring, the retraction of the U.S. military, and diminishing economic influence on the Arab world—as displayed during the Obama Administration—are facts. The emergence of a Russian-Iranian-Turkish triangle is the new reality. The Western hegemony in the MENA region has ended, and not in a shy way, but with a long list of military conflicts and destabilization. The first visit of a Saudi king to Russia shows the growing power of Russia in the Middle East. It also shows that not only Arab countries such as Saudi Arabia and the UAE, but also Egypt and Libya, are more likely to consider Moscow as a strategic ally. King Salman’s visit to Moscow could herald not only several multibillion business deals, but could be the first real step towards a new regional geopolitical and military alliance between OPEC leader Saudi Arabia and Russia. This cooperation will not only have severe consequences for Western interests but also could partly undermine or reshape the position of OPEC at the same time. Russian president Vladimir Putin is currently hosting a large Saudi delegation, led by King Salman and supported by Saudi minister of energy Khalid Al Falih. Moscow’s open attitude to Saudi Arabia—a lifetime Washington ally and strong opponent of the growing Iran power projections in the Arab world—show that Putin understands the current pivotal changes in the Middle East. U.S. allies Saudi Arabia, Egypt, Turkey and even the UAE, have shown an increased eagerness to develop military and economic relations with Moscow, even if this means dealing with a global power currently supporting their archenemy Iran. Analysts wonder where the current visit of King Salman will really lead to, but all signs are on green for a straightforward Arab-Saudi support for a bigger Russian role in the region, and more in-depth cooperation in oil and gas markets. 

OPEC's Barkindo admits "extraordinary measures" needed to sustain oil rebalancing -- OPEC has signalled to the market that it could further broaden its OPEC/non-OPEC alliance, ramping up the rhetoric over the possibility of expanding its membership and trying to deepen its dialogue with US shale in order to rebalance the market. Speaking at the India Energy Forum in New Delhi, OPEC's secretary general Mohammed Barkindo admitted that OPEC and non-OPEC producers will require "some extraordinary measures" to sustain the rebalancing of the oil markets. "Emerging from this most vicious of all oil cycles, the need to sustain the rebalanced market in the medium to long term, some extraordinary measures could be considered by countries participating in [the current deal]... including expanding the membership," said Barkindo. In his speech, Barkindo also indicated that besides the 24 countries participating in the accord, other producers needed to be included. He specifically mentioned US shale oil producers, whose oil production has grown this year. "We urge our friends in the shale basins of North America to take this shared responsibility with all the seriousness it deserves, as one of the key lessons learnt from the current, unique supply-driven cycle," he said. In mid-July, Barkindo said OPEC planned to hold additional consultations later this year with US shale producers on the state of the market, as it deems it necessary to combine the efforts of all major contributors to the current crude supply crunch.

OPEC Secretary General urges U.S. shale oil producers to help cap global supply  (Reuters) - OPEC’s Secretary General Mohammed Barkindo on Tuesday called on U.S. shale oil producers to help curtail global oil supply, warning extraordinary measures might be needed next year to sustain the rebalanced market in the medium to long term. “We urge our friends, in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle,” said Barkindo. The comments by the Organization of the Petroleum Exporting Countries official came during a speech delivered at the India Energy Forum organized by CERAWeek in New Delhi. “At the moment we (OPEC and independent U.S. producers) both agreed that we have a shared responsibility in maintaining stability because they are also not insulated from the impact of this downturn,” Barkindo said, referring to a slide in oil prices that spurred OPEC to agree production cuts late last year.

Feast or famine? Oil market in 2018: Kemp - Just as Pharaoh’s kingdom experienced a cycle of feast and famine, depending on the Nile inundation, the oil market swings between periods of undersupply and oversupply.  The natural state of the oil market is not just enough, any more than the natural state of Pharaoh’s food supply was just enough.  OPEC and other commentators, including myself, characterise the process of restricting oil production and reducing excess stocks as one of market “rebalancing”. But while rebalancing is useful shorthand for a complicated set of adjustments to production, consumption and stocks, it does not imply the process ends with a “balanced” oil market.The oil market is rarely balanced, and never for very long.In the past, periods of oversupply and contango were swiftly followed by a return to undersupply and backwardation (http://tmsnrt.rs/2zcg3BC).Something similar appears to be underway at present, with Brent and other international crude grades moving into backwardation over the last three months, after trading in contango since the middle of 2014.Most analysts have expressed concern about the re-emergence of oversupply, a renewed rise in crude stocks, and how OPEC and its allies will exit from their current production deal in 2018.  But it is at least possible the market is moving towards a period of undersupply, when demand will be growing strongly, supply will be lagging, and stocks will feel uncomfortably tight.

Fund managers turn cautious on oil as prices fall (Reuters) - Hedge fund bullishness towards crude oil and refined products including gasoline and diesel appears to have peaked for now, according to an analysis of regulatory and exchange records.Few long positions in crude and products were added by hedge funds and other money managers in the week to Oct.3, with some increasing short positions for the first time since August.Hedge funds cut their combined net long position in the three major crude oil futures and options contracts linked to Brent and WTI by 1 million barrels to 793 million (http://tmsnrt.rs/2zaCBCS).While the reduction was tiny, it came after portfolio managers had increased their net long exposure by 212 million barrels over the previous four weeks and indicated a potential turning point.For the first time since August, hedge funds increased short positions in NYMEX WTI by 4 million barrels over the week.Fund managers trimmed their exceptionally bullish positioning in U.S. gasoline by 6 million barrels to 65 million barrels, which was also the first significant reduction since August.Funds continued to add to their record net longs in U.S. heating oil and European gasoil by 220,000 barrels and 440,000 tonnes respectively, but the rate of accumulation slowed markedly.The probable peak in hedge funds’ net long positions comes as no surprise.Both the accumulation and liquidation of hedge fund positions and the rise and fall in prices show a strong cyclical element in the short run.Speculative traders’ positioning across crude and especially refined fuels had looked increasingly lopsided in recent weeks as fund managers turned from very bearish in June to super-bullish by the end of September.Brent prices have been drifting lower since Sept. 25 amid concerns that they had risen too far too fast and risked getting ahead of fundamentals. The concentration of hedge fund positions had itself become an additional source of downside risk, with the likelihood that prices would fall when portfolio managers attempted to realise some of their profits.

Even US shale may not be able to save markets from an oil supply crunch - (podcast) Investment cycles can give clues about future oil market shifts, and recent slow investments are pointing toward a global crude shortage and price upticks, Jonathan Chanis tells senior oil editors Brian Scheid and Meghan Gordon.Chanis is senior vice president for policy at Securing America’s Future Energy and formerly was a senior trader at Caxton Associates and a vice president at Goldman Sach’s commodities division. He tells Capitol Crude that OPEC policies have disrupted investments and a lack of spending has set the world up for a supply crunch that even US shale cannot fix.  (See excerpts of the conversation with Chanis in this story.)

Oil prices stable after OPEC signals possible further action (Reuters) - Oil prices stabilized on Monday after one of the most bearish weeks in months, propped up by OPEC comments signaling the possibility of continued action to restore market balance in the long term. Oil production platforms in the Gulf of Mexico started returning to service after Hurricane Nate forced the shutdown of more than 90 percent of crude output in the area. The prospective restarts kept price gains in check. Former hurricane Nate has become a post-tropical cyclone that continues to pack heavy rain and gusty winds, the U.S. National Hurricane Center (NHC) said on Monday. “Quiet market overall this morning though (refined) products are weaker as it looks like Nate was a non-event for refining,” said Scott Shelton, broker at ICAP in Durham, North Carolina. “I think that without the support of products and Brent, the market may get dragged lower in the near term as its apparent that the market doesn’t care much about OPEC already jawboning about an extension of the deal.” The Organization of the Petroleum Exporting Countries is due to meet in Vienna on Nov. 30, when it will discuss its pact to reduce output in order to prop up the market. OPEC Secretary-General Mohammad Barkindo said on Sunday that consultations were under way for an extension of the agreement beyond March 2018 and that more oil-producing nations may join the pact, possibly at the November meeting. He also said OPEC members and other producers may have to take some “extraordinary measures” to ensure the market is in balance in the long term.

Oil ends higher as OPEC hints at extended output curbs -Oil futures ended slightly higher Monday, finding some support after OPEC’s secretary-general said the cartel and other oil producers might need to take additional measures in 2018 to rebalance the oil market.December Brent crude, the global oil benchmark LCOZ7, +0.11% rose 17 cents, or 0.3%, to close at $55.79 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate crude for November delivery CLX7, +0.22% added 29 cents, or 0.6%, to settle at $49.58 a barrel. Mohammad Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, on Sunday said there was a “growing consensus” that a rebalancing process was under way. To sustain that process into next year, “some extraordinary measures may have to be taken,” he told reporters at an oil industry forum in New Delhi, according to Reuters.Those remarks, which implied extending, or deepening, the curbs agreed by OPEC and non-OPEC producers, appear “to have provided support for th e markets to open this week’s trading,” said analysts at Tradition, in a note.Otherwise, traders were largely in wait-and-see mode ahead of the release of oil market data from OPEC on Wednesday and the International Energy Agency on Thursday.Crude prices stabilized after falling more than 2% on Friday, as around 90% of U.S. oil infrastructure was shut down in the Gulf of Mexico in preparation for Hurricane Nate, which ended up having little effect on the U.S. oil market. Some U.S. export terminals have already reopened, according to analysts. But the closures will distort U.S. inventory data, making it more difficult to assess the American oil market, analysts said.

Aggressive OPEC Pushes Oil Prices Up - Oil prices firmed up just a bit on the very aggressive comments from OPEC’s top official, although the bull run from September does not appear to be set to return.   The latest hurricane to hit the U.S. forced an estimated 93 percent of the Gulf of Mexico’s offshore oil production to go offline. The preemptive moves by the industry led to evacuations and shut ins, but the hurricane ended up being much milder than expected. There was no significant damage to the energy industry to report, and supplies should come back online relatively quickly. The Gulf’s oil and gas production “should fully recover by the end of the week, if not sooner,” Andy Lipow, president of Lipow Oil Associates in Houston, told Bloomberg.  OPEC’s Secretary-General hinted at much more aggressive action, telling reporters that the cartel might need to take “extraordinary measures” to rebalance the market. However, he also stated that there has been tangible progress, citing falling inventories. . While OPEC’s Secretary-General Mohammad Barkindo hinted at “extraordinary measures,” he also urged U.S. shale to limit its production. “We urge our friends in the shale basins of North America to take this shared responsibility with all seriousness it deserves, as one of the key lessons learnt from the current unique supply-driven cycle,” said Barkindo. The plea is almost certainly going to fall on deaf ears. . Saudi Aramco said it would take “unprecedented” action to lower exports in November, cutting allocations to customers by 560,000 bpd, the largest reduction ever. The move is intended to accelerate the rebalancing in the oil market, but as Bloomberg reports, the void leftover is being partially filled by rival OPEC members. Iraq and Iran ratcheted up exports in September, winning market share in China and the U.S. Iraq’s oil sales hit nearly 4 mb/d, the most in nearly a year, while Saudi Arabia’s dropped to 6.68 mb/d, the second-lowest for 2017. The dynamic illustrates the difficulty OPEC has in keeping all members on board with the coordinated cuts without trying to undermine the deal or each other.

The “Amazon Effect” Is Coming To Oil Markets -- While OPEC mulls over further steps to once again support falling oil prices, tech startups are quietly ushering in a new era in oil and gas: the era of the digital oil field.Much talk has revolved around how software can completely transform the energy industry, but until recently, it was just talk. Now, things are beginning to change, and some observers, such as Cottonwood Venture Partners’ Mark P. Mills, believe we are on the verge of an oil industry transformation of proportions identical to the transformation that Amazon prompted in retail.According to Mills, the three technological factors that actualized what he calls “the Amazon effect”, which changed the face of retail forever, are evidenced in oil and gas right now. These are cheap computing with industrial-application capabilities; ubiquitous communication networks; and, of course, cloud tech.The Internet of Things is entering oil and gas, and so are analytics and artificial intelligence. These, Mills believes, will be among the main drivers of a second shale revolution, reinforcing the efficiency push prompted by the latest oil price crisis. It seems that shale operators have been paying attention to what growing choirs of voices, including Oilprice, have been saying: they are talking more and more about the benefits that software solutions can bring to their business, potentially leveling the playing field for independents, a field that has been tipped in favor of Big Oil for decades.Long-standing mistrust of technology is now dwindling as the benefits—including streamlining operations, maximizing the success rate of exploration, and optimizing production—make themselves increasingly evident, not least thanks to a trove of tech startups specifically targeting the oil and gas industry. In a story for Forbes, Mills notes several examples of such startups that are already disrupting the industry with cognitive software for horizontal drilling, an on-demand contractor network, and an AI-driven software platform for well planning, among many others. The common feature among them all is they are narrowly specializing in various segments of the oil industry to deliver solutions that promise to substantially reduce times, labor, and costs, while improving outcomes. What’s not to like?

Interview: Lack of oil investment could bring shortage, price spike by 2020s - An oil supply shortage and price spikes of $80-$100/b could hit the global oil market by the 2020s if producers do not fund major projects soon, and rising US tight oil supply will not be able to stop this trend, said Jonathan Chanis, vice president of policy at Securing America's Future Energy."We're at a very perilous point because we've had two years of a really, really marked decline in investment," Chanis said on Monday's episode of the S&P Global Platts Capitol Crude podcast."If we don't start seeing some large-scale final investment decisions on mega-projects -- projects over $10 billion-$15 billion apiece -- if we don't start seeing them now and next year or shortly thereafter, by the time we get around to the 2020s, we are going to be short oil," Chanis said.Chanis is a former senior trader at Caxton Associates, a hedge fund, and a former vice president at Goldman Sach's commodities division. He thinks that OPEC policies have disrupted global investment cycles, causing spending on future projects to plummet and setting the world up for a massive supply crunch.  Investment declined 40% in 2015 and 2016 and has been flat so far this year, he said. The number of mega-projects approved in the next year to two years will determine if that shortage arrives."That's not to minimize the role of tight oil and shale because it's terribly important," he said. "But the takeaway on that is it's just not going to be enough." Chanis said the investment cycle since the rise of OPEC in the 1970s has been "extremely volatile" with periods of excessive investment followed by excessive underinvestment that lead to extreme price swings for consumers.

OPEC To Take Drastic Action Despite Shale Slowdown -- WTI recently dipped below $50 per barrel for the first time in a month, erasing the strong September rally. It’s no coincidence that after two weeks of price declines, OPEC has tried to talk up the oil market again, hinting that more drastic action could be forthcoming. Echoing the world’s top central bankers, OPEC’s Secretary General said that the oil cartel might need to take “extraordinary” measures to balance the oil market next year. “There is a growing consensus that, number one, the re-balancing process is underway,” OPEC’s Mohammad Barkindo told reporters on Sunday in New Delhi. “Number two, to sustain this into next year, some extraordinary measures may have to be taken in order to restore this stability on a sustainable basis going forward.”As always, OPEC is vague on the specifics, but the working assumption is that the group will agree to an extension of the cuts until at least mid-2018, or perhaps even as late as through the end of the year. There’s been some discussion about deeper production cuts, but there aren’t a ton of analysts who see OPEC going that far, despite Barkindo’s cryptic language.Meanwhile, Saudi Arabia engaged in a bit of its own psy-ops with the oil market on Monday, saying that it was taking “unprecedented” steps to cut its oil exports. Saudi Aramco said it would lower exports by 560,000 bpd next month, “the deepest customer allocation cuts in its history.”The comments are consistent with the country’s longstanding pattern of trying to jawbone the market when it wants higher prices. Based on Monday’s activity, the effort didn’t work.“The fact that we did not get any significant strength from the Saudi news is rather disheartening for the bulls,” Stephen Schork, an analyst and author of the Schork Report, told the WSJ. “The market is very skeptical of this.” With rising production levels and no definitive word from OPEC and the Russians that they are going to extend the cut or deepen it, the rally seems to have lost its momentum,”

OPEC considers second meeting with U.S. independent oil firms (Reuters) - The Organization of the Petroleum Exporting Countries is seeking to hold a second meeting with U.S. independent oil firms as well as hedge funds, OPEC’s Secretary General told Reuters, adding that no oil producer could afford to live in isolation. The United States is not a member of OPEC and U.S. anti-trust legislation prohibits any collective action to influence prices - precisely what OPEC has been doing for the past decades. He said the meeting could take place later this year or early in the next one. “Both groups - independents and hedge funds - have become increasingly important in the energy markets,” Mohammed Barkindo told Reuters. “What we are trying to do is to reach out to these companies who also operate in these markets, who also feel the pinch of volatility from time to time and the downturn,” said Barkindo who held the first meeting in Houston earlier this year. “We cannot continue to live and operate in isolation. The world of energy is undergoing a massive structural transformation, energy transition is real.”

Oil rises 2 percent on signs rebalancing underway (Reuters) - Oil prices rose about 2 percent on Tuesday, supported by Saudi Arabian export cuts in November and comments from OPEC and trading companies that the market is rebalancing after years of oversupply. Saudi Arabia has cut November allocations by 560,000 barrels per day (bpd), in line with its commitment to an OPEC-led supply reduction pact. The Organization of the Petroleum Exporting Countries is seeking to hold a second meeting with U.S. independent oil firms as well as hedge funds, OPEC’s Secretary General told Reuters, adding that no oil producer could afford to live in isolation. Brent crude LCOc1 settled up 82 cents, or 1.5 percent, at $56.61 a barrel while U.S. crude rose $1.34, or 2.7 percent, to settle at $50.92. From a technical standpoint, U.S. crude has staged an impressive rebound from the $49.08 level and a decisive breakout above $51 should encourage a further incline towards $52.40 a barrel, said Lukman Otunuga, research analyst at FXTM. “In an alternative scenario, sustained weakness below $49, which is also under the 50 (day) daily simple moving average, may open a path towards $47.80.” OPEC, Russia and other non-member producers are cutting output by about 1.8 million barrels per day (bpd) until next March to get rid of a price-sapping supply glut. The group is increasingly confident that the market is rebalancing fast, helped by the cutback as well as by stronger-than-expected growth in global demand. The deal is working, keeping oil prices within “a reasonable range”, the RIA news agency cited Russian Prime Minister Dmitry Medvedev as saying.

Oil prices settle up on demand forecasts, Kurdistan tensions | Reuters: (Reuters) - Oil prices rose for the third day on Wednesday as OPEC forecast higher demand for 2018 and heightened tensions in Kurdistan supported prices. Brent crude futures LCOc1 rose 33 cents, or 0.6 percent, to settle at $56.94 per barrel. Brent rose 2 percent the previous day. U.S. West Texas Intermediate (WTI) crude futures CLc1 rose 38 cents, or 0.8 percent, to $51.30 a barrel. The Organization of the Petroleum Exporting Countries forecast stronger demand for its oil in 2018 and said production cuts by producing nations were clearing the global crude glut. U.S. oil exports are pouring into the market at a record pace, but the world’s second largest crude trader Glencore (GLEN.L) said the market can absorb the volumes along with those from the North Sea and West Africa. “I think the market is able to absorb that 2 million bpd of U.S. exports easily,” Glencore’s head of oil trading Alex Beard told the Reuters Global Commodities Summit. “I don’t think there are many losers out there.” Saudi Arabia said it pumped 9.97 million barrels per day in September, up from August, but still below target. OPEC and other producers, including Russia, agreed to cut output by 1.8 million barrels per day (bpd). The United States is not party to the deal, and its crude output has risen 10 percent this year to more than 9.5 million bpd.After settlement, crude prices pared gains when the industry group the American Petroleum Institute said its data showed U.S. crude stocks rose unexpectedly last week, while gasoline inventories decreased and distillate stocks built. API said crude inventories rose 3.1 million barrels in the week to Oct. 6. Analysts had expected a draw of 2 million barrels. The U.S. Department of Energy reports official data on Thursday. 

WTI/RBOB Slide After Surprise Crude Build -- WTI/RBOB had bounced back modestly today (on OPEC jawboning) ahead of the API data with bulls hoping the trend of gasoline builds stalls. With the effects of Harvey beginning to fade (and exports at record highs), we are getting a cleaner picture of the state of the energy complex and it's no so pretty for the record-long-specs. Crude inventories saw a surprise 3.1mm build (expectations for a 2.4mm draw), Cushing saw the 7th straight week of restocking and while gasoline inventories dropped, distillates saw a big build. API

  • Crude +3.1mm (-2.4mm exp)
  • Cushing +1.216mm - 8th weekly build in a row
  • Gasoline -1.575mm (+200k exp)
  • Distillates +2.029mm - biggest in 5 months

Cushing continues to be restocked but the crude build is the biggest surprise and while gasoline saw a draw, the distillates build offsets that excitement... WTI/RBOB had rallied on the day into the API print...But the initial reaction was selling after theprint

Oil supply overhang looms in Q1 despite stock fall, IEA warns - Global oil stocks are likely to fall by 300,000 b/d on average this year, but a likely global oversupply in the first quarter of 2018 underlines the need for continued OPEC discipline on supply cuts, the International Energy Agency said Thursday. The IEA's latest monthly oil market report pointed to a likely increase in global oil stocks in Q1 2018 of up to 800,000 b/d, assuming stable OPEC production and normal weather, following continued reductions in stocks and volumes in transit both in the OECD and elsewhere in 2017. Underlining its point, it estimated the "call" on OPEC, or the likely need for OPEC crude, will drop by 1.1 million b/d in Q1 next year compared with Q4 2017 to just 31.9 million b/d. However, despite the expected Q1 oversupply, globally for 2018 as a whole, "crude and product markets look broadly balanced," it said. As for this year, "detailed analysis of the global balance shows that in 2017 each quarter will show a deficit, other than a tiny build in Q1 2017. For the year as a whole, stocks will fall by 300,000 b/d," the IEA said. The IEA closely monitors oil stocks in the OECD countries, while the numbers for the rest of the world are less clear estimates. Besides OECD stocks, "we can now clearly see a major reduction in floating storage, oil in transit, and stocks held in some independent areas," the IEA said. The report said OECD oil stocks had continued falling against the five-year average in August, to reach 170 million barrels above the five-year average, although the total remained above the 3 billion mark, at 3.015 billion barrels. Global oil stocks are likely to have fallen in Q3 for just the second time since oil prices started collapsing in 2014, it added.

RBOB Sinks After Surprise Build, WTI Bounces On Biggest Production Drop In 2 Years --WTI/RBOB have extended their post-API (crude build) losses overnight (not helped by IEA forecasts indicating the oil-inventory decline will halt in 2018). However, DOE data perfectly contradicted the API data with a big crude draw and big gasoline build. WTI bounced a little (helped by the biggest production cut since September 2015) and RBOB slumped. DOE:

  • Crude -2.75mm (-2.4mm exp)
  • Cushing +1.322mm - 8th weekly build in a row
  • Gasoline +2.49mm  (+200k exp)
  • Distillates -1.48mm

Perfectly contradicting what API said last night, DOE seees a big crude draw and gasoline build... Distillates inventories tumbled below their 5y average as exports soared to a record high... Production in the Lower 48 tumbled...This was the biggest production drop since September 2015 (ex the Hurricane plunge)

Crude Oil Price Stems Losses as Inventories Shrink - The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, showing that U.S. commercial crude inventories decreased by 2.8 million barrels last week, maintaining a total U.S. commercial crude inventory of 462.2 million barrels. The commercial crude inventory remained near the upper limit of the average range for this time of year. Wednesday evening the American Petroleum Institute (API) reported that crude inventories rose by 3.1 million barrels in the week ending October 6. API also reported gasoline supplies fell by 1.6 million barrels and distillate inventories rose by 2.04 million barrels. For the same period, analysts surveyed by S&P Global Platts had consensus estimates for a decrease of 400,000 barrels in crude inventories, a decrease of 1.4 million barrels in gasoline inventories, and a drop of 1.64 million barrels in distillate stockpiles. Total gasoline inventories rose by 2.5 million barrels last week, according to the EIA, and remain in the upper half of the five-year average range. U.S. refineries produced over 10 million barrels of gasoline a day last week, up about 100,000 barrels a day compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged over 9.4 million barrels a day for the past four weeks, down by about 100,000 barrels a day compared with the prior week. Before the EIA report, benchmark West Texas Intermediate (WTI) crude for November delivery traded down about 2% at around $50.25 a barrel, and it traded at $50.44 shortly after the report’s release. WTI settled at $51.30 on Wednesday and opened at $51.00 Thursday morning. The 52-week range on November futures is $42.84 to $58.37. Distillate inventories decreased by 1.5 million barrels last week and remain in the lower half of the average range for this time of year. Distillate product supplied averaged over 3.9 million barrels a day over the past four weeks, up by 2.1% compared with the same period last year. Distillate production averaged over 4.9 million barrels a day last week, flat compared to the prior week’s production.

Oil slips, despite larger draw in U.S. stocks (Reuters) - Oil prices rebounded from earlier losses, although they were still down on the session, after the Energy Department reported a larger-than-expected decline in U.S. inventories and a falloff in weekly production on Thursday. The market was still under pressure, though, from a bearish outlook by the International Energy Agency, which lowered its forecast for oil demand for 2018. Oil has strengthened in recent weeks due to a sharp drawdown in distillates feeding expectations for renewed demand, but it is unclear whether U.S. crude prices will regain the high of nearly $53 a barrel reached in late September.    Brent crude oil was down 62 cents at $56.32 a barrel by 1:43 p.m. ET.  U.S. light crude was down 67 cents to $50.63 a barrel. Both benchmarks have risen more than 20 percent from their lows in June as world oil markets tightened. Crude inventories fell by 2.7 million barrels in the week to Oct. 6, compared with analysts’ expectations for a decrease of 2 million barrels. Distillate stocks fell by 1.5 million barrels, short of expectations for a drop of 2.2 million barrels. The International Energy Agency said on Thursday demand for OPEC oil would be 32.5 million bpd next year - around 150,000 bpd lower than the group pumped last month. Carsten Fritsch, commodities analyst at Commerzbank in Frankfurt, said the tone of the IEA report was bearish because it suggested that demand for OPEC crude next year would not be sufficient to absorb all the available supplies. “This means OPEC must deepen its production cuts to finish its job of bringing oil stocks back to the five-year average,” Fritsch said. 

Oil heads higher on strong Chinese crude imports and Iran uncertainty - Oil prices climbed Friday, buoyed by a mix of factors, including bullish Chinese data and geopolitical risks from oil-rich regions in the Middle East. November West Texas Intermediate crude, the U.S. price gauge, rose 57 cents, or 1.1%, to $51.17 a barrel on the New York Mercantile Exchange. For the week, it was up around 3.8%. December Brent crude, the global benchmark, rose 41 cents, or 0.7%, to $56.66 a barrel on ICE Futures Europe, trading around 1.9% higher on the week. “Oil prices are on the rise as China imports hit the second highest on record and President Trump looks to decertify the Iran nuclear deal,” said Phil Flynn, senior market analyst at Price Futures Group. Chinese crude imports rose by roughly 1 million barrels a day in September, on the month, to 9 million barrels a day, according to government data released Friday. The news alleviated investor concern that demand in the world’s largest crude importer might be waning amid faltering economic growth. The September “bounce back” was the highest import volume in China since May, according to analysts at ING Groep. Prices were also supported Friday by concerns that political developments in Iran and Iraq could reduce the global oil supply.

Factbox: Trump urges Congress to keep Iran sanctions frozen for now -- US President Donald Trump will essentially kick the fate of the Iran nuclear deal to Congress, urging lawmakers to stay in the agreement but to impose new triggers that would automatically snap US sanctions back into place based on Tehran's actions. For now, that means joint US/EU sanctions that stopped more than 1 million b/d of Iranian oil flows into Europe and Asia remain frozen.The White House is also calling on Congress to hold off on reimposing sanctions, for now. Instead, it wants Congress to amend oversight legislation to include new trigger points that will cause the sanctions to snap back based on Iran's activities.Trump certified Iranian compliance twice before, reportedly under duress, despite repeatedly bashing the Obama administration accomplishment as an "embarrassment" and the "worst deal ever negotiated."Several top advisers urged Trump to certify compliance a third time to protect US national security. Sanctions on oil flows into Europe and Asia, largely suspended under the JCPOA, do not snap back into place as a result of Trump's decertification decision. In addition, sanctions on US imports of Iranian crude remain in place, as they have for the past 40 years.The fate of the sanctions freeze appears to now rests with Congress.An oversight law passed after the nuclear deal was reached gives Congress a way to fast-track legislation to reimpose the frozen US sanctions. Congressional leaders must introduce the legislation, and it would not be subject to a filibuster in the Senate. Such a bill would receive easy approval in Congress, given the political liability of casting a vote that could be construed as supporting Iran.

OilPrice Intelligence Report: Oil Prices Rise Over Middle East Tensions - >Oil prices rose on Friday on bullish data from China showing an uptick in oil imports by 1 million barrels per day in September, from a month earlier. On top of that, anxiety over President Trump’s decision to decertify the Iran nuclear deal, plus simmering tension in Iraq likely added a bit of upward pressure on crude prices. WTI and Brent gained more than 2 percent in early trading on Friday.. President Trump has confirmed his plan to decertify the Iran nuclear deal on Friday, a move that could ratchet up tensions between the two nations. However, he will stop short of calling for new sanctions. Instead, he will ask the U.S. Congress to hold off until the administration tries a new strategy to tighten the screws on Tehran. Iran promised a “crushing” response if the U.S. declared the Revolutionary Guard a terrorist organization. As of now, the ramifications for the oil market are unclear, but probably not that significant in the near-term. The key European nations party to the agreement are still supporting the original deal.Kurdish authorities have sent thousands of troops to the key oil region of Kirkuk to defend the region, after the Iraqi government mobilized troops and tanks south of the city. The military movements raised concerns of a possible clash between the central government in Baghdad and Kurdish forces, a development that some fear could lead to civil war.  OPEC increased its demand forecast for its oil in 2018, and also said that the oil market could flip into deficit next year. The group said that the world would need 33.06 million barrels per day (mb/d) from OPEC, an upward revision of 230,000 bpd from its last forecast. That is the third consecutive month that OPEC has increased its demand projection for 2018 and it underscores the growing confidence in the impact of the collective cuts. Separately, a top OPEC official estimated that the crude inventory surplus would be eliminated next year. Meanwhile, the IEA warned that while progress is being made, the inventory gains will stall next year as non-OPEC supply picks up pace. The Paris-based energy agency said that OPEC will probably need to take more dramatic action to accelerate the tightening underway.

Oil Prices Rise Amid Falling U.S. Rig Count - The number of active oil and gas rigs in the United States decreased this week by 8 rigs. The total oil and gas rig count in the United States now stands at 928 rigs, up 389 rigs from the year prior, with the number of oil rigs in the United States decreasing by 5 this week and the number of natural gas rigs decreasing by 2. Miscellaneous rigs decreased by a single rig. The oil rig count now stands 311 above the count one year ago, shedding a total of 20 oil rigs in the last eight weeks. The spot price for WTI rose earlier on Friday as reports surfaced on Thursday that China’s oil imports hit a new high in the month of September, and that its thirst for oil imports would be robust for at least the short term, and the uncertainty around the US sanctions on Iran. Reports from earlier in the week regarding OPEC’s increased production for the month of September is doing its part in keeping prices from rising beyond its normal range as of late.At 12:09pm EST on Friday, WTI is trading up $0.75 (1.48%) at $51.35—$2 over last week’s price, and almost exactly where it was two weeks ago. Brent crude was trading up today $0.87 (1.55%) on the day at $57.12—almost $2 over last week.Oil rigs in the United States now number 743—311 rigs above this time last year.  The biggest losers this week by basin were the Eagle Ford (-6) and Barnett (-4). US crude oil production slipped a bit for the week ending October 06, standing at 9.480 million barrels per day—down from the week’s prior 9.561 million barrels per day. At 10 minutes after the hour, WTI had fallen further and was trading at $51.43. Brent crude was trading at $57.16.

Oil ends at 2-week high, with U.S. prices up over 4% on week - Oil prices settled at a two-week high Friday, with the U.S. benchmark up more than 4% for the week—the largest such gain in a month. Futures got a boost from a mix of factors, including bullish Chinese data and geopolitical risks from oil-rich regions in the Middle East, particularly in the wake of President Donald Trump’s refusal to certify Iran’s compliance with the nuclear deal. “Trump put the Iran deal back in Congress’s hands,” said Phil Flynn, senior market analyst at Price Futures Group. But “by kicking the can to Congress, fear of an immediate response from Iran or more sanctions on their oil were reduced” for now.Oil had briefly trimmed gains after a report that Saudi Arabia may shelve their Saudi Aramco IPO, he said. The Financial Times reported that Saudi Aramco may instead opt for a private share sale.“Some feared that they may not have the same incentive to raise oil prices because of it but, really, if they have to go private with the share sale, they will still need high oil prices to get a good price,” said Flynn. November West Texas Intermediate crude, the U.S. price gauge, rose 85 cents, or 1.7%, to settle at $51.45 a barrel on the New York Mercantile Exchange. For the week, it was up around 4.4%. December Brent crude, the global benchmark, rose 92 cents, or 1.6%, to $57.17 a barrel on ICE Futures Europe—around 2.8% higher on the week. Both WTI and Brent marked the highest settlements since Sept. 29 and their strongest weekly percentage gains since the week ended Sept. 15, according to FactSet data.

 OPEC Boosts Oil Demand Estimates, Admits Oil Prices Can't Rise Above $55 - In its latest OPEC Monthly Oil Market Report (October) the oil cartel has increased its oil demand estimates for 2017, 2018 on strengthening world economy, and weaker outlook for supplies from its rivals.Specifically, OPEC forecasts that based on the current global oil supply/demand balance, demand for OPEC crude in 2017 is estimated at 32.8 mb/d, around 0.6 mb/d higher than in 2016. Similarly, OPEC crude in 2018 is projected at 33.1 mb/d, 350k b/d higher than September production, and ~200k b/d higher than the group estimated last month.  Global oil demand seen rising +1.38m b/d, or 1.4% in 2018 to 98.19m b/d.  Meanwhile, OPEC claims that oil inventories in developed nations continued to decline, -24.7m bbl to 2.996b bbl in August, curbing surplus relative to a 5-year average to 171m bbl.Here are the key highlights from the report: The OPEC Reference Basket rose to $53.44/b in September, its highest value since July 2015. Crude futures prices also saw gains, with ICE Brent averaging above the $55/b, supported by increasing evidence that the oil market is heading toward rebalancing. World oil demand growth in 2017 is now expected to increase by 1.5 mb/d, representing an upward revision of around 30 tb/d from last previous report, mainly reflecting recent data showing an improvement in economic activities. Positive revisions were primarily a result of higher-than-expected oil demand from the OECD region and China. In 2018, world oil demand is anticipated to grow by 1.4 mb/d, following an upward adjustment of 30 tb/d over the previous report, due to the improving economic outlook in the world economy, particularly China and Russia. Non-OPEC oil supply is expected to grow by 0.7 mb/d in 2017, following a downward revision of 0.1 m/bd from the previous report. In 2018, the growth in non-OPEC oil supply saw a downward revision of 60 tb/d to stand at 0.9 mb/d. OPEC NGLs and non-conventional liquids production are seen averaging 6.5 mb/d in 2018, representing an increase of 0.2 mb/d, broadly in line with growth in the current year. In September, OPEC crude oil production increased by 88 tb/d, according to secondary sources, to average 32.75 mb/d. Separately, according to secondary source data, OPEC output in September rose +88.5k b/d to 32.748m b/d; the increase was mostly driven by higher output from Libya +54k b/d, Nigeria +51k, who are exempt from cuts, as well as gains in Iraq production. Saudi Arabian output was unchanged at 9.975m b/d, lowest since May, although based on self-reported data, Saudi production rose by 21.7k b/d to 9.973m b/d.

OPEC Sees Oil Inventory Glut Finally Gone in One Year - OPEC expects its efforts to clear the surplus in oil inventories to finally succeed by the end of the third quarter of next year, said people familiar with the group’s internal forecasts. They hope to end an unprecedented build-up that sent prices plunging from above $100 a barrel in 2014 to around $50 currently, but the process has taken longer than expected and the deal has already been extended beyond its initial June expiry.  OPEC estimated that stockpiles in developed nations were still about 171 million barrels above that average in August, but expected trends in supply and demand will eliminate the surplus in about a year, the people said, asking not to be identified because the information isn’t public. The forecasts assume that Libya and Nigeria’s production will remain at current levels and U.S. shale output will expand by no more than 500,000 barrels a day next year, two of the people said. Although the current production curbs are due to expire at the end of March, OPEC’s estimates suggest producers will have to extend them to achieve their long-stated objective. They would need to maintain output around current levels in order to create a supply deficit next year big enough to erode stockpiles, according to Bloomberg calculations based on data published in the group’s monthly market report.

Saudi Aramco considers shelving international IPO - Saudi Aramco is considering to sell shares privately rather than list them publicly, the Financial Times reported Friday, citing five sources familiar with the matter.Talks between the Saudi state oil giant and the world's largest sovereign wealth funds and institutional investors have picked up in the last few weeks, the sources told the newspaper. A Saudi Aramco spokesperson told CNBC that "a range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track."The world's major financial centers have vied to host Saudi Aramco's public stock offering, which could raise an estimated $100 billion.Even if Saudi Aramco decided to sell shares privately, the company would still plan to list shares on the kingdom's Tadawul exchange next year, the FT said, citing sources. An international listing could also follow, although likely not until 2019 or later, the newspaper said. The Chinese government is close to playing a key role in any new plan for offering shares, the FT report said, citing a person working for Saudi Aramco.

Saudi Aramco denies it is shelving IPO but sources say it could make sense - Saudi Aramco said it remains on track to offer shares to the public, after a newspaper report said the company was considering shelving its IPO."A range of options, for the public listing of Saudi Aramco, continue to be held under active review. No decision has been made and the IPO process remains on track," a spokesman said. The comment echoes public statements made in the past week by both Khalid Al-Falih, Saudi energy minister, and Saudi Aramco President Amin Nasser.But the report in the Financial Times echoed speculation that has been circulating as Saudi Aramco officials debate how and when to issue shares. The report is also the latest in a series to cast doubt on the massive IPO which would be five percent of what would be the world's largest listed oil company.One source close to the IPO told CNBC that one thing under review is whether to list on the Saudi market first and then list on an international exchange at a later date. The source said the debate is understood to be between a London or New York listing, given the need for substantial capital market to raise such large sums.The newspaper report quoted five unidentified sources saying that talks about a sale to a foreign government, including China, and other investors have picked up in recent weeks, amid concerns about the feasibility of a foreign listing.An energy market source said talks with Asian sovereign wealth funds and western institutions have been ongoing since the idea of the IPO was first floated."The definition of an IPO could also mean private placement with Asian sovereign wealth funds," the source said. "They've been in discussions with them about the IPO from the beginning."The source added that the difficulties of a listing , including the transparency requirements are certainly a consideration for Aramco, which is government owned and intertwined with the bureaucracy of the kingdom. "Saudi Aramco thinks by years, if not decades and financial markets think quarter by quarter," said the source.

 Saudi Arabia in huge military arms deal with the United States and Russia -- SAUDI Arabia has been quietly planning to build its own military empire and over the last week, it’s announced how it plans to do so. With Donald Trump and Vladimir Putin’s help. Despite increasing criticism over the United States’ military sales to Saudi Arabia, the US State Department has paved the way for the potential purchase of controversial — and expensive — military equipment.On Saturday, the US State Department announced the approval to sell Saudi Arabia 44 THAAD anti-missile defence systems, 360 interceptor missiles, 16 mobile fire-control and communication stations and seven THAAD radars at an estimated price tag of $US15 billion, according to a press release from the Pentagon’s Defence Security Cooperation Agency.The sale, supplied by Lockheed Martin and Raytheon — also includes 43 trucks, generators, electrical power units, communications equipment, tools, test and maintenance equipment and “personnel training and training equipment”.The department said the sale of the equipment to the Saudi people would help provide a balance to a relatively unstable environment in the Gulf and to help the US forces enlarge its allied grip on the region.“THAAD’s exo-atmospheric, hit-to-kill capability will add an upper-tier to Saudi Arabia’s layered missile defence architecture.”  Meanwhile, King Salman of Saudi Arabia has entered into a preliminary agreement to purchase Russia’s S-400 surface-to-air missile defence system, he announced in Moscow last week.

 The House of Saud bows to the House of Putin - What a difference a year – an eternity in geopolitics – makes. No one could see this coming; the ideological matrix of all strands of Salafi-jihadi terror – which Russia fights no holds barred, from ISIS/Daesh to the Caucasus Emirate – beating a path to the Kremlin and about to embrace Russia as a strategic ally.The House of Saud was horrified by Russia’s successful campaign to prevent regime change in Syria. Moscow was solidifying its alliance with Tehran. Hawks in the Obama administration were imposing on Saudi Arabia a strategy of keeping oil prices down to hurt the Russian economy.  Now, losing all its battles from Syria to Yemen, losing regional influence to both Iran and Turkey, indebted, vulnerable and paranoid, the House of Saud has also to confront the ghost of a possible coup in Riyadh against Crown Prince Mohammad bin Salman, a.k.a. MBS, as Asia Times reported. Under so much pressure, who’re you gonna call?The ultimate ghostbuster; Russian President Vladimir Putin.  Essentially, the House of Saud is obsessed by three main vectors; low oil prices; Iran and Shi’ism; and what to make of US foreign policy under Trump. Let’s take them one by one.

UAE Official Urges Qatar to Give Up World Cup to End Crisis (AP) -- A top Emirati security official has said the only way for "Qatar’s crisis" to end is if Doha gave up hosting the 2022 FIFA World Cup, his comments coming amid the ongoing diplomatic dispute between the energy-rich nation and four Arab countries. Dubai security Lt. Gen. Dhahi Khalfan, known for being outspoken on Twitter, later wrote Monday his "personal analysis" of what he described as the financial pressure Doha faces in hosting the games had been misunderstood. But his remarks came as lobbying firms backed by the four nations opposing Qatar in the diplomatic dispute increasingly target the upcoming soccer competition in their criticism. The tournament has not come up in the demands previously made by the boycotting countries, though losing the World Cup would represent a bitter defeat for the tiny peninsular nation that&apos;s pushed itself onto the world stage with its bid and its Al-Jazeera satellite news network.Qatari officials did not respond to requests for comment on Monday. However, the 2022 tournament&apos;s head in Qatar told The Associated Press on Friday the boycott poses "no risk" to the competition being held.Bahrain, Egypt, Saudi Arabia and the United Arab Emirates all cut diplomatic ties and began a boycott of Qatar on June 5 , in part over allegations that Doha supports extremists and has overly warm ties to Iran.Qatar has long denied funding extremists and restored full diplomatic ties to Iran amid the dispute. Doha shares a massive offshore natural gas field with Iran that makes its citizens incredibly wealthy.On Sunday night, Khalfan targeted the FIFA tournament in his tweets.  "If the World Cup leaves Qatar, Qatar’s crisis will be over ... because the crisis is created to get away from it," he wrote.

Iraq imposes new measures on Kurdistan over independence push - Baghdad launched a legal barrage against Kurdish officials on Monday as tensions between the two sides escalated over Kurdistan's independence push. President of Iraqi Kurdistan Masoud Barzani held a non-binding vote on independence two weeks ago, despite strong objections from Baghdad, Ankara, and Tehran, enraging leaders in the international community. The central government responded by banning international flights out of the region and threatening to suspend Kurdish representatives from the national parliament. While Turkey and Iran have threatened to close their borders to oil exports. On Monday, Baghdad's national security council announced that an investigation has been launched into Kurdistan's lucrative oil revenues and officials in the region who might have illegally monopolised the market. The council, headed by Iraqi prime minister Haider Al Abadi, said: "The corrupt will be exposed and the funds recovered" adding that "a list of names" of Kurdish officials who helped organised the referendum had been compiled and "judicial measures have been taken against them," without giving further details. Baghdad's central government is also looking to reclaim control over mobile phone companies in the region, including two of the largest providers in Iraq, the statement said. The statement did not identify the networks concerned, but it is believed to be directed at Korek and Asiacell, respectively based in the Kurdistan capital Erbil and Kurdish city of Sulaimaniya. Iraq's third operator, Zain, is based in Baghdad. "The government committee for national security issued a decision that all mobile phone networks must be under federal control and should be moved to Baghdad," the statement said. Meanwhile, Iraqi vice president Osama Al Nujafi said the Kurdish president has agreed not to act on the results of the referendum if Baghdad ensures the rights of the autonomous Kurdish region. 

Afghan president, U.S. general vow ambitious air war to defeat Taliban - WaPo  — With a just-delivered Black Hawk helicopter sitting on a military runway behind him, Gen. John W. Nicholson Jr., the top U.S. military commander in Afghanistan, vowed Saturday that “a tidal wave of air power is on the horizon” in the war against Taliban insurgents and that “this is the beginning of the end for the Taliban.” Moments later, a second new Black Hawk descended and hovered over the runway as Afghan President Ashraf Ghani praised the nation’s air force pilots as “the real champions” of the 16-year conflict. Now that a new Afghan-U. S. military effort will triple the country’s air force capacity and double its special operations forces, he declared, “terrorists will not triumph here.” The elaborately staged ceremony at Kandahar Air Base marked the formal launch of an ambitious plan to modernize and expand the Afghan air force over the next five years. A variety of U.S. military aircraft including 159 UH-60 Black Hawks are being supplied by the United States, and a new cohort of Afghan combat pilots are being trained — or retrained after years of flying Soviet-era choppers — by American military and civilian advisers. The event was also aimed at reinforcing public support for the ongoing U.S. and NATO military mission here, following President Trump’s announcement in August of a new, open-ended policy that would add several thousand U.S. troops, focus on ending the war rather than nation-building, and follow the plan designed by Ghani and Nicholson to enable Afghanistan to defend itself within the next five years. “We are with you in this fight, and we will stay with you,” Nicholson said, calling the war against terrorism “the most important fight in the world.” Brig. Gen. Phillip A. Stewart, commander of the U.S. air advisory mission, called the Black Hawks and other U.S.-supplied military aircraft on display “a physical manifestation”of international commitment to the war." 

China faces looming energy crisis, warns state-funded study -- A new scientific study led by the China University of Petroleum in Beijing, funded by the Chinese government, concludes that China is about to experience a peak in its total oil production as early as next year.  Without finding an alternative source of “new abundant energy resources”, the study warns, the 2018 peak in China’s combined conventional and unconventional oil will undermine continuing economic growth and “challenge the sustainable development of Chinese society.” This also has major implications for the prospect of a 2018 oil squeeze — as China scales its domestic oil peak, rising demand will impact world oil markets in a way most forecasters aren’t anticipating, contributing to a potential supply squeeze. That could happen in 2018 proper, or in the early years that follow. There are various scenarios that follow from here — China could: shift to reducing its massive demand for energy, a tall order in itself given population growth projections and rising consumption; accelerate a renewable energy transition; or militarise the South China Sea for more deepwater oil and gas. Right now, China appears to be incoherently pursuing all three strategies, with varying rates of success. But one thing is clear — China’s decisions on how it addresses its coming post-peak future will impact regional and global political and energy security for the foreseeable future.

A new front opens in Asia’s water wars - China has long regarded freshwater as a strategic weapon – one that the country’s leaders have no compunction about wielding to advance their foreign-policy goals. After years of using its chokehold on almost every major transnational river system in Asia to manipulate water flows themselves, China is now withholding data on upstream flows to put pressure on downstream countries, particularly India. For decades, China has been dragging its neighbors into high-stakes games of geopolitical poker over water-related issues. Thanks to its forcible annexation of Tibet and other non-Han Chinese ethnic homelands – territories that comprise some 60% of its landmass – China is the world’s unrivaled hydro-hegemon. It is the source of cross-border riparian flows to more countries than any other state. In recent years, China has worked hard to exploit that status to increase its leverage over its neighbors, relentlessly building upstream dams on international rivers. China is now home to more dams than the rest of the world combined, and the construction continues, leaving downstream neighbors – especially the vulnerable lower Mekong basin states, Nepal, and Kazakhstan – essentially at China’s mercy. So far, China has refused to enter into a water-sharing treaty with a single country. It does, however, share some hydrological and meteorological data – essential to enable downstream countries to foresee and plan for floods, thereby protecting lives and reducing material losses. Yet, this year, China decided to withhold such data from India, undermining the efficacy of India’s flood early-warning systems – during Asia’s summer monsoon season, no less. As a result, despite below-normal monsoon rains this year in India’s northeast, through which the Brahmaputra River flows after leaving Tibet and before entering Bangladesh, the region faced unprecedented flooding, with devastating consequences, especially in Assam state. 

China survey puts services growth at 21-month low, blurs picture of resilient economy (Reuters) - Activity in China’s services sector grew at its slowest pace in 21 months in September as new orders cooled, a private survey showed, blurring the picture of how the economy is performing heading into a key Communist Party Congress. The findings of the Caixin/Markit survey reinforce views that China’s smaller companies are continuing to struggle, while large state-owned giants are apparently reaping most of the benefits from a year-long, government-led construction boom. However, many analysts believe China’s robust industrial rally cannot be sustained much longer, putting pressure on policymakers to finds ways to energize the lackluster private sector, which accounts for over half of the country’s investment and jobs. The central bank threw a fresh lifeline to smaller firms on Sept. 30 in an attempt to redress that deep structural imbalance, offering an earnings booster to banks if they ramp up lending to more vulnerable sectors of the economy. China is counting on growth in services, particularly high value-added services in finance and technology, to reduce the economy’s traditional reliance on heavy industry and investment. But Monday’s private survey suggested many services firms are facing a bumpy ride. The Caixin/Markit services purchasing managers’ index (PMI) fell to 50.6 in September, the lowest reading since December 2015 and one of the weakest since the survey began in 2005. A reading above 50 indicates growth, and any lower signals contraction. The index had hit a three-month high in August. 

China’s richest 2,130 people have as much money as the world’s fifth-largest economy | South China Morning Post: Chinese President Xi Jinping may have launched a war on poverty in China, but the wealth effects of the nation’s growth have had profound effects among the upper echelon, as a group of 2,130 individuals now have fortunes equivalent to the economy of the UK, according to the Hurun Report’s 2017 rich list. At least 74 individuals joined the group with fortunes of more than US$300 million in this year’s list, adding to the 2,056 who made last year’s list, bringing their combined assets to US$2.6 trillion, roughly the same size as the GDP of the UK, the world’s fifth largest economy. There was also substantial change at the top of the rich list. Xu Jiayin, chairman of real estate developer Evergrande Group, has emerged as China’s richest man with assets worth US$43 billion. Last year’s leader, Wang Jianlin, dropped to fifth after declines in the share price of his embattled Wanda Group saw his family’s net worth slump 28 per cent to US$23 billion. “Overall, the Hurun Rich List has grown faster than any year since 2007, with the possible exception of 2015,” said Rupert Hoogewerf, Hurun Report chairman and chief researcher. Evergrande is China’s largest property group by sales, and since the start of this year, the price of its shares in Hong Kong has risen by 465 per cent. Pony Ma Huateng, founder and chief executive of Tencent took the No 2 spot on the rich list with a net worth of US$37 billion, overtaking Alibaba executive chairman Jack Ma at US$30 billion, who ranked third.

China Launches Yuan-Ruble Payment System -- The monetary regimes of China and Russia, two of the world's most resource-rich nations, are drawing closer with every passing day. In the latest push for convergence, China has established a payment versus payment (PVP) system for Chinese yuan and Russian ruble transactions in a move to reduce risks and improve the efficiency of its foreign exchange transactions. The PVP system for yuan and ruble transactions, designed to streamline commerce and curency transactions between the two nations, was launched on Monday after receiving approval from China’s central bank, according to a statement by the country’s foreign exchange trading system.It marks the first time a PVP system has been established for trading the yuan and foreign currencies, said the statement, which was posted on Wednesday on the website of the China Foreign Exchange Trade System (CFETS). PVP systems allow simultaneous settlement of transactions in two different currencies.According to CFETS, the system would reduce settlement risk as well as the risk of transactions taking place in different time zones, and improve foreign exchange market efficiency. Of course, if the two countries had a blockchain-based settlement system, they would already have all this and much more.CFETS said it plans to introduce PVP systems for yuan transactions with other currencies based on China’s Belt and Road initiative, and complying with the process of renminbi internationalization. Russia, however, is a top priority: the world's biggest oil producer recently became the largest source of oil for China, the world’s top energy consumer.To be sure, the monetary convergence between Beijing and Moscow is hardly new. The most notable recent development took place in April, when the Russian central bank opened its first overseas office in Beijing on March 14, marking a step forward in forging a Beijing-Moscow alliance to bypass the US dollar in the global monetary system, and to phase-in a gold-backed standard of trade. As the South China Morning Post reported at the time, the new office was part of agreements made between the two neighbours "to seek stronger economic ties" since the West brought in sanctions against Russia over the Ukraine crisis and the oil-price slump hit the Russian economy.

US Sends Nuclear Submarine To Korean Peninsula For More Military Drills --As US forces prepare to join their South Korean partners for yet another round of the military exercises that North Korean Leader Kim Jong Un is so fond of, the US has sent a nuclear-powered sub to participate.The nuclear-powered submarine Michigan will arrive in the Korean port city of Busan, situated in the southern part of the country, by the end of the week,according to Bloomberg, which cited local media reports. The sub will conduct joint drills with the US aircraft carrier USS Ronald Reagan in the waters off the peninsula next week. With North Korea celebrating the founding of the country's ruling Communist Party on Oct. 10, US and South Korean defense officials are anticipating that the country could launch another provocative missile test as soon as tonight.The US dispatched the USS Ronald Reagan to South Korea last month after North Korea twice fired IRBMs over the northern Japanese island of Hokkaido. According to a map showing the locations of US Naval assets (the ones that've been publicly, at least) created by Stratfor, the USS Ronald Reagan is presently making a scheduled refueling stop in Hong Kong but is expected to return to the peninsula shortly.

South Korea developing graphite ‘blackout bombs’ to paralyse North’s electrical grid - South Korea is ready to deploy graphite bombs - also known as "blackout bombs" - that will paralyse North Korea's electrical power plants in the event of war breaking out on the peninsula.Blackout bombs were first used by the United States in Iraq in the 1990 Gulf War and work by releasing a cloud of extremely fine, chemically treated carbon filaments over electrical components. The filaments are so fine that they act like a cloud, but cause short circuits in electrical equipment.South Korea is actively looking to increase its defensive capabilities against the North and has been keen to develop graphite bombs because they are not lethal to civilians in surrounding areas. The weapons have been developed by South Korea's Agency for Defence Development, Yonhap news agency reported, as one element of the Kill Chain pre-emptive strike programme. "All technologies for the development of a graphite bomb led by the ADD have been secured", a military official said. "It is at the stage where we can build the bombs at any time".South Korea is bringing forward the deployment of its "three pillars" of national defence by as much as three years as a result of the growing threat posed by Pyongyang's nuclear and missile development programmes.The three-pronged strategy was originally scheduled to be in place by the mid-2020s, but North Korea's increasingly aggressive and unpredictable behaviour has forced Seoul to revise that timeline.The Kill Chain programme is designed to detect, identify and intercept incoming missiles in the shortest possible time and operates in conjunction with the Korea Air and Missile Defence system for lower-tier defence against inbound missiles.The final component of the strategy is the Korea Massive Punishment & Retaliation plan, under which Seoul will launch attacks against leadership targets in North Korea if it detects signs that the regime is planning to use nuclear weapons. Graphite bombs worked well against targets in Iraq, knocking out around 85 percent of the electrical supply across the country. NATO used similar weapons against targets in Serbia in May 1999, damaging around 70 percent of the country's electrical supply. Analysts believe the weapons would work well against targets in North Korea, which are likely to be obsolete and not insulated.

South Korea's New "Blackout Bomb" Can Paralyze The North's Power Grid -- US and South Korean officials are nervously watching to see if North Korea follows through with its threats to carry out another nuclear test – or to fire a rumored long-range missile capable of accurately striking the west coast of the US into the Pacific – in celebration of the Oct. 10 anniversary of the Communist Party’s creation. Meanwhile, the Telegraph reports that South Korea has developed a new weapon to hobble the North’s infrastructure should an armed conflict erupt on the peninsula. Given that it's almost daybreak in North Korea, such a test could happen as soon as Monday night, Eastern Time.  The weapon is a graphite bomb – otherwise known as a “blackout bomb” - which South Korean officials say will be capable of shutting down North Korea’s entire power grid. Blackout bombs were first used by the US in Iraq in the 1990 Gulf War and work by releasing a cloud of extremely fine, chemically treated carbon filaments over electrical components. The filaments are so fine that they act like a cloud, but cause short circuits in electrical equipment.   The Telegraph reports that the South developed the bomb to minimize civilian casualties in the North should a conflict erupt. In a statement to Yonhap, a military official said the South Korean army could assemble a blackout bomb at any time. The weapon was reportedly developed by South Korea's Agency for Defense Development.  “All technologies for the development of a graphite bomb led by the ADD have been secured. It is in the stage where we can build the bombs anytime,” a military official told Yonhap. The bomb is often referred to as a “soft bomb” because it only affects targeted electrical power systems.

 North Korea 'hackers steal US-South Korea war plans' - BBC News: Hackers from North Korea are reported to have stolen a large cache of military documents from South Korea, including a plan to assassinate North Korea's leader Kim Jong-un. Rhee Cheol-hee, a South Korean lawmaker, said the information was from his country's defence ministry. The compromised documents include wartime contingency plans drawn up by the US and South Korea. They also include reports to the allies' senior commanders. The South Korean defence ministry has so far refused to comment about the allegation. Plans for the South's special forces were reportedly accessed, along with information on significant power plants and military facilities in the South. Mr Rhee belongs to South Korea's ruling party, and sits on its parliament's defence committee. He said some 235 gigabytes of military documents had been stolen from the Defence Integrated Data Centre, and that 80% of them have yet to be identified. The hack took place in September last year. In May, South Korea said a large amount of data had been stolen and that North Korea may have instigated the cyber attack - but gave no details of what was taken.

Britain ‘draws up battle plan for war with North Korea’ - Britain is reportedly preparing for the possibility of war breaking out with North Korea as concerns rise that another provocative missile test could trigger a military response by the US. North Korea is being closely watched amid fears it could launch another long-range missile test on Tuesday to mark the anniversary of the founding of its ruling party. Bellicose rhetoric from Donald Trump has heightened tensions in the region in recent months, prompting British officials to draw up military plans for a response to a break out of hostilities, it was reported.  Among the plans disclosed by the Daily Mail is the deployment of the Navy's newest aircraft carrier, HMS Queen Elizabeth, before it has undergone flight trials.  "We have plenty of ships to send… the Type-45 destroyers, the Type-23 frigates. Britain’s new aircraft carrier could be pressed into service early if things turn south," a senior Whitehall source told the newspaper. HMS Queen Elizabeth, which arrived at its home in Portsmouth in August after extensive sea trials, is not due to enter service until 2020.  The possible move to deploy it ahead of schedule drew comparisons with the start of the Falklands War.  "In the Falklands we had to react to an event and HMS Illustrious was accelerated to respond," a Navy source told the Mail.  The US president hinted on Saturday at taking military action against Kim Jong-un's regime, saying "only one thing will work" in dealing with the country. The president has previously said the United States would "totally destroy" North Korea if necessary to protect itself and its allies from Pyongyang's nuclear threats. Sir Michael Fallon, the Defence Secretary, said last week that the UK should increase its military spending in the face of growing threats from states such as North Korea. Last month, Sir Michael told the BBC that Britain was at risk from Pyongyang'’s long-range nuclear missile programme. “The US is fully entitled to defend its own territory, to defend its bases and to look after its people, but this involves us, London is closer to North Korea and its missiles than Los Angeles," he said.

Nouriel Roubini's "Good, Bad, & Ugly" Scenarios For The Global Economy -- by Nouriel Roubini via Project Syndicate - One can envision three possible scenarios for the global economy in the next three years or so.  In the bullish scenario, the world’s four largest, systemically important economies – China, the eurozone, Japan, and the United States – implement structural reforms that boost potential growth and address financial vulnerabilities. By ensuring that the cyclical upswing is associated with stronger potential and actual growth, such efforts would produce robust GDP growth, low but moderately rising inflation, and relative financial stability for many more years. US and global equity markets would reach new heights, justified by stronger fundamentals. In the bearish scenario, the opposite happens: the world’s major economies fail to implement structural reforms that boost potential growth. Rather than using this month’s National Congress of the Communist Party as a catalyst for reform, China kicks the can down the road, continuing on a path of excessive leverage and overcapacity. The eurozone fails to achieve greater integration, while political constraints limit national policymakers’ ability to implement growth-enhancing structural reforms. And Japan remains stuck on its low-growth trajectory, as supplyside reforms and trade liberalization – the third “arrow” of Prime Minister Shinzo Abe’s economic strategy – fizzle out. The third – and, in my view, most likely – scenario lies somewhere between the first two. The cyclical upswing, in both growth and equity markets, continues for a while, driven by the remaining tailwinds. Yet, while major economies pursue some structural reforms to improve potential growth, the pace of change is much slower, and its scope more modest, than is needed to maximize potential.  But the risks of muddling through extend far beyond mediocre economic performance. This scenario represents not a stable equilibrium, but an unstable disequilibrium, vulnerable to economic, financial, and geopolitical shocks. When such shocks eventually emerge, the economy will be tipped into a slowdown or, if the shock is large enough, even recession and financial crisis. In other words, if the world does simply muddle through, as seems likely, it could, within three or four years, face a more bearish outlook.

Global Economy’s Stubborn Reality: Plenty of Work, Not Enough Pay - NYT - In the United States, the jobless rate fell to 4.2 percent in September, less than half the 10 percent seen during the worst of the Great Recession. Still, for the average American worker, wages had risen by only 2.9 percent over the previous year. That was an improvement compared with recent months, but a decade ago, when the unemployment rate was higher, wages were growing at a rate of better than 4 percent a year.In Britain, the unemployment rate ticked down to 4.3 percent in August, its lowest level since 1975. Yet wages had grown only 2.1 percent in the past year. That was below the rate of inflation, meaning workers’ costs were rising faster than their pay.In Japan, weak wage growth is both a symptom of an economy dogged by worries, and a force that could keep the future lean, depriving workers of spending power.In Norway, as in Germany, modest pay raises are a result of coordination between labor unions and employers to keep costs low to bolster industry. That has put pressure on Italy, Spain and other European nations to keep wages low so as not to lose orders. But the trend also reflects an influx of dubious companies staffed by immigrants who receive wages well below prevailing rates, undermining union power. That this is happening even in Norway — whose famed Nordic model places a premium on social harmony — underscores the global forces that are at work. Jobs that require specialized, advanced skills are growing. So are low-paying, low-skill jobs. Positions in between are under perpetual threat.

Wolfgang Schäuble: World economy at risk of new financial crisis -  Global debt and unstable loans could throw the world into another financial crisis, outgoing German Finance Minister Wolfgang Schäuble said in an interview with the Financial Times published Sunday. “Economists all over the world are concerned about the increased risks arising from the accumulation of more and more liquidity and the growth of public and private debt,” Schäuble said. “I myself am concerned about this, too.” Schäuble, who is slated to become speaker of the Bundestag in Germany’s new government, warned of new market bubbles forming, fueled by money pumped into the economy from central banks. He also raise caution about potential weaknesses in the eurozone as banks struggle to deal with underperforming loans. Schäuble will attend his last Eurogroup gathering of finance ministers on Monday.

 Nearly 1 mln people evacuated across Russia amid bomb threats since September 11 - More than 950,000 people have been evacuated across Russia since September 11 after a wave of anonymous hoax bomb threats, law enforcement agencies told TASS on Monday. "Between September 11 and October 9, in 144 cities the attacks of ‘phone terrorists’ targeted more than 2,300 facilities, including shopping centers, schools, stations, airports, cinemas, night clubs and state buildings. Over 950,000 people were evacuated," a source said. The law enforcement agencies checked each call. "All of them turned out to be a hoax," he said. On Sunday, bomb alerts targeted 37 facilities in Moscow, St. Petersburg, Yoshkar-Ola, Nizhny Novgorod and Dybenko (Leningrad region), according to the source. The most massive attack by ‘phone terrorists’ was reported on Friday in Moscow when more than 250 buildings were hit by the wave of bomb alerts. Director of the Federal Security Service (FSB) Alexander Bortnikov said earlier four Russians who used IP telephony for putting through false bomb threat calls in 50 regions of Russia had been identified. All of them are outside the country, but they have accomplices inside Russia. According to Bortnikov, the damage from the first several days of threat calls is estimated at 300 million rubles ($5.2 million).

ECB made €7.8bn profits from Greek bond holdings - The European Central Bank has made nearly €8bn in profits from its holdings of Greek government debt.In a written response to a request from a Greek MEP, the ECB said holdings of Greek sovereign bonds acquired under its Securities and Markets bond-buying programme (SMP) had resulted in €7.8bn of net income interest between 2012-2016. These profits – as with others made from national bond holdings – are then redistributed to across all 19-country central banks in the eurozone. The SMP programme was launched at the start of the eurozone’s debt crisis in 2010 and ramped up to include Italian and Spanish government debt in 2011. It was designed to ease market pressure on the borrowing costs of the eurozone’s member states and preceded the central bank’s more ambitious quantitative easing programme, which launched in 2015.

Catalonia and the Spanish banking system -- The recent turmoil in Catalonia is raising concern across Europe. Foremost is, of course, the desire for a peaceful solution to the dispute. But there are also major worries around the Spanish banking industry. The two largest banks headquartered in Catalonia, CaixaBank and Banco de Sabadell, have are already making plans to move their headquarters to the Balearic Islands and Madrid respectively. So, how are banks based in Catalonia affected by this crisis? In this blog post, I present a statistical overview of the Spanish banking system. To get a better idea of how big the Catalonian banking sector is compared to the rest of Spain, we use data provided by SNL. This covers 87 financial enterprises, including different types of banks, credit cooperatives and public financial institutions. The balance sheet size in terms of the total assets owned by the top 20 banks in Spain can be found on the table below. Among 85 Spanish banking industry institutions (for which SNL provides data on total assets), 6 are headquartered in Catalonia. Their share in assets of the Spanish banking system is about 14% (Figure 1). The Catalonia-based financial institutions include the two largest Catalonian lenders: CaixaBank and Banco de Sabadell. Then come Institut Català de Finances, which is a public financial institution owned by the government of Catalonia, Banco Mediolanum SA, which offers personal banking services, Caja de Arquitectos S. Coop. and Caja Rural de Guissona SCC. CaixaBank and Banco Sabadell have already been heavily affected by the political risks, as their stock prices lost some 5% recently. These two banks’ total assets represent a relatively significant proportion of the total assets of banks in Spain: 13.8%. However, non-Catalan banks are also caught up in the Catalonian drama. In fact, many of the large Spanish banks have significant activities, including offices and lending, in Catalonia. Moving headquarters out of Catalonia may help Catalonian bank preserve access to the ECB liquidity window if the situation escalates. But the exposure of all Spanish banks through their business with Catalonia will remain significant. 

Thousands protest in Barcelona against Catalan independence (Reuters) - Hundreds of thousands of people took to the streets of Catalonia’s capital Barcelona on Sunday to express their opposition to declaring independence from Spain, showing how divided the region is on the issue. A crowd estimated by local police to number 350,000 waved Spanish and Catalan flags and carried banners saying “Catalonia is Spain” and “Together we are stronger”. They poured into the city center after politicians on both sides hardened their positions in the country’s worst political crisis for decades. Two more Catalonia-based companies set board meetings for Monday to decide whether to shift their head offices out of the region, adding to the intense pressure Catalan leader Carles Puigdemont is under to back away from declaring independence when he addresses the regional parliament on Tuesday. Spanish Prime Minister Mariano Rajoy said on Saturday he would not rule out removing Catalonia’s government and calling a fresh local election if it claimed independence, as well as suspending the wealthy region’s existing autonomous status. Catalonia, which has its own language and culture and is led by a pro-independence regional government, held a referendum on Oct. 1 over secession, in defiance of Spain’s constitutional court which had declared the vote illegal. The Catalan authorities say the referendum showed voters overwhelmingly support independence. More than 90 percent of those who voted backed secession, but opinion polls on the issue suggest the region is more closely divided. Turn-out for the referendum was 43 percent, with most residents who wish to remain in Spain staying home. 

Catalan separatists under pressure after unity rallies -- Pressure mounted on Monday against Catalan plans to declare independence after hundreds of thousands of protesters rallied to defend Spanish unity. The protests followed days of soaring tensions after police cracked down on voters during a banned October 1st Catalan independence referendum, prompting separatist leaders to warn they would unilaterally break away from Spain in days. Catalan leader Carles Puigdemont, who has yet to decide whether to declare independence in defiance of Spanish authorities, is set to address the regional parliament on Tuesday evening.Hundreds of thousands of flag-waving demonstrators, calling themselves a "silent majority", packed central Barcelona on Sunday to protest against the plan, which has sparked the country's worst political crisis in a generation. Around 350,000 people attended the rally, municipal police said, while organizers put turnout at between 930,000 and 950,000. Some protesters called for Puigdemont to go to jail for holding the independence vote. Others called for dialogue. The slogan for the demonstration -- organized by the Societat Civil Catalana, the main anti-independence group in Catalonia -- was: "Enough, let's recover good sense!"

Catalonia’s Drive for Independence and the Emergence of Global Cities - Yves Smith - Yves here. Tuesday night, we will have a much better idea of whether Catalonia’s separatists will execute their threat to declare independence, or will try to find a way to back down. But even if the separatist leaders decide to retreat, the secession movement is not going away any time soon. While the idea that a major, if not the main, driver of the Catalonia independence movement is that the Spanish government is greatly favoring Madrid over Barcelona, sounds intriguing, I’d very much like to get a reaction from our readers in Spain. The most consistent grievance stated in comments has been that the central government is corrupt. Another big one is that its austerity policies have hurt the country. In other words, this sounds as if a driver is that Catalonia is upset about what they see as distant and not sufficiently accountable government, that Madrid doesn’t care much/enough about Catalonia, and that may go deeper than just the budget issues.A strong thread in the zeitgeist is for more relocalization of power, economically and politically. Some of this is a reaction to the way globalization has created an economic elite that lives apart from the overwhelming majority of people and almost without exception, makes it far too clear that it not only fails to share their interests but even holds them in contempt. Another reason is the pragmatic recognition that globalization combined with the push both by businesses and government for greater efficiencies (as in cost savings), save for obvious exercises in pork like the F-35, is that systems built for high efficiency are very fragile. Formula One cars run only one race. Cheetahs are far more injury-prone than other high-level predators. So the interest in relocalization is on many levels defensive, based on concern that those extended supply chains, Federal disaster rescue efforts, and other important but distant supply sources might not be there when you need them. This article argues for yet anther set of drivers: competition by two world cities for one national budget.

Catalonia’s president to bring crisis to head in parliament - Spain’s worst political crisis in four decades is expected to come to a head on Tuesday when the Catalan president, Carles Puigdemont, reveals his plans for independence as he addresses the regional parliament for the first time since the referendum that provoked the standoff with the Spanish government. Although Puigdemont had originally promised to make a unilateral declaration of independence within 48 hours of a victory for the secessionist campaign, he has so far held off from doing so, calling instead for mediated negotiations with the Madrid government. It is unclear whether Puigdemont will push ahead with a formal declaration of independence or choose a less drastic option in the hope of avoiding a further escalation of tensions. He is due to appear before parliament at 6pm.The Spanish government has repeatedly argued that the referendum was illegal and unconstitutional and has said it will use all the legal means at its disposal to prevent Catalonia from splitting from the rest of the country.Spain’s prime minister, Mariano Rajoy, has threatened to impose direct rule on Catalonia, and a series of banks and businesses have announced plans to relocate from the region amid the enduring uncertainty.Police are stationed outside government buildings in Barcelona and have closed off the Ciutadella park around the regional parliament on security grounds.

Spanish PM ready to use all legal means to stop Catalan independence - El Pais  - Spain’s central government on Monday issued a message of firmness just hours before Catalan lawmakers convene for a session that could theoretically end in a unilateral declaration of independence.The Mariano Rajoy administration is promising “a firm hand against secessionism,” according to the Popular Party (PP)’s vice-secretary for communications, Pablo Casado. Rajoy and his team are hardening their tone ahead of a session in which Catalan premier Carles Puigdemont could declare independence, even if it ends up being a “symbolic” breakaway, as some sources in his Democratic Party of Catalonia (PDdeCat) are now suggesting.“History shows that Catalan declarations of independence have ended very badly,” noted Casado, alluding to a declaration of Catalan statehood on October 6, 1934. At that time, the Spanish government arrested all members of the Catalan government and suspended home rule. Between 1936 and 1939, Spain went through a civil war, followed by four decades of dictatorship.Fast-forwarding to today, the government has made it clear that it is keeping all options open to prevent secession in Catalonia, including a suspension of home rule using a constitutional provision that has never been invoked since the Constitution was signed in 1978. “We are going to prevent independence in Catalonia,” said Casado, quoting Rajoy. “We will take all necessary measures to prevent it. A separation of Catalonia is not going to happen. The government will do whatever it takes to ensure it.”

Spanish Police Set To Arrest Catalan Leader "Immediately" If He Declares Independence - Spain's D-Day is here: the country's biggest political crisis since an attempted military coup in 1981 is about to get a resolution - one way or another - and as Bloomberg reports, Spanish police are ready to arrest Catalan President Carles Puigdemont "immediately" if he declares independence in the regional parliament, according to two people familiar with the government’s plans.In what may be a preview of a possible upcoming civil war should today's event be handled incorrectly, Bloomberg writes that while a final decision on whether to act has not yet been taken, Spain’s National Police force has elite officers deployed in Catalonia who are prepared to join a raid if Catalan police try to shield Puigdemont. If Puigdemont makes a statement that falls short of immediate independence, the government in Madrid may stay its hand. Puigdemont has called a press conference for 1 p.m. in Barcelona.The National Police and the Civil Guard "have sufficient officers in place to overcome any resistance they might meet" Bloomberg's sources note. A government press officer declined to comment other than to say that any such decision would have to be ordered by a judge.Also today, Puigdemont is due to address the regional legislature at 6 p.m on Tuesday with many of his supporters looking for him to announce a new republic to follow through on the makeshift referendum held on Oct. 1. With his core supporters demanding he make good on the illegal vote for independence and officials in Madrid urging Rajoy to finally crack down on the separatist campaign, Puigdemont’s rebellion may be running out of road. Meanwhile, Spain's Prime Minister Mariano Rajoy has held a firm line, refusing to negotiate with the Catalan separatists and insisting all along that he’ll use only proportionate force in relation to the separatist government in Barcelona. Even so, prosecutors have been exploring charges of sedition against other separatist leaders including Jordi Sanchez, head of the biggest pro-independence campaign group. Sedition carries a jail term of up to 15 years.

The Basque: Spain’s effective but expensive antidote to secession (Reuters) - As Spain and Catalonia head toward a constitutional collision over the region’s claim to independence, lawmakers on both sides of the crisis are pointing to a way out: north, to Basque Country. Among the verdant mountains of Basque Country, which borders France, a once-violent campaign for independence has petered out, with generous fiscal autonomy from Madrid helping to keep popular agitation for independence in check. “We don’t have that economic resentment,” Aitor Esteban, organizer for the Basque National Party in Spain’s parliament, told Reuters in an interview at party headquarters in Bilbao. “People don’t feel that need to act upon a grievance about money; that makes a big difference.” The Catalan government is not calling for a Basque-style deal, insisting instead on independence after declaring overwhelming support for secession in an Oct. 1 referendum banned by Madrid. But the most moderate lawmakers in the region’s ruling coalition privately say they could drop independence claims if they were given the tax autonomy that Basque Country enjoys. In Madrid, some socialists have suggested it could serve as a model for a compromise that would defuse Spain’s biggest political crisis since a failed coup in 1981, although the cost to the central government would be significant.  Basque staged modest protests over Madrid’s violent crackdown on Catalonia’s referendum, but the crisis has failed to rekindle secessionist fervor on the streets of Bilbao, the Basque capital nestled on the banks of the Nervion.  Catalan flags hang from balconies alongside the Basque flag in a sign of solidarity, but Bilbao is prosperous and peaceful.

France leads EU pressure on Catalonia | Euronews: Capitals across the European Union are looking on with concern at events in Catalonia. In Paris the French government has said it wont recognise an independent Catalonia France’s European Affairs Minister Nathalie Loiseau Minister has said it would mean expulsion from the bloc. “If independence was to be declared the first consequence would be that Catalonia would have to leave the European Union,” Nathalie Loiseau said on French television. In London British Prime Minister Theresa May who has been facing mounting calls to speak out against the scenes of police brutality in Catalonia, stuck steadfastly to the legal position. “I want to see and I am sure all honorable members want to see this situation being resolved peacefully, but we are very clear as a government that the Spanish government has the right to uphold the Spanish constitution, and also that all parties should be operating under the rule of law.” Meanwhile Scotland’s First Minister Nicola Sturgeon offered a more conciliatory voice raising the possibility of the EU playing a mediation role between Spain and Catalonia: “It’s not for Scotland to decide whether Catalonia becomes independent or not – I think it must be for the people of Catalonia to decide that. Spain says last Sunday’s referendum was illegal. I respect their position, but if that’s the case surely the discussion now must be how do the people of Catalonia legally and legitimately express a view about the future.”

Spain Catalan crisis: Puigdemont seeks independence talks - BBC News: Catalan leader Carles Puigdemont has said his people voted for independence from Spain - but that he wants a negotiated solution with Madrid. He asked the regional parliament in Barcelona to suspend the effect of the vote so talks could begin - rather than breaking away immediately. A vote on 1 October resulted in almost 90% of voters backing independence, Catalan officials say. Madrid said it was illegal and Spain's Constitutional Court suspended it. Anti-independence voters largely boycotted the referendum ballot - which had a reported turnout of 43% - and there were several reports of irregularities. National police were involved in violent scenes as they manhandled voters.Mr Puigdemont told the regional parliament on Tuesday evening that the "people's will" was to break away from Madrid, but he also said he wanted to "de-escalate" the tension around the issue. He hailed the referendum process and condemned the actions of the Spanish government, but acknowledged that people on all sides were worried about what would happen next. "We are all part of the same community and we need to go forward together. The only way forward is democracy and peace," he told deputies. But he also said Catalonia was being denied the right to self-determination, and paying too much in taxes to the central government in Madrid. Catalan police have been posted outside the parliament in Barcelona, sealing off the grounds to the public. A large pro-independence rally was held in the area as the parliament met. 

 A Declaration of Independence, Sort of, for Catalonia - — The Catalan secession crisis took a confusing new turn on Tuesday night, after the leader of Catalonia made a perplexing speech in which he appeared to declare independence from Spain, before immediately suspending that decision to allow for more “dialogue” with leaders in Madrid.  For days, anticipation had been building that Carles Puigdemont, the Catalan leader, would use his address before the Catalan regional Parliament to officially proclaim independence from Spain, after a week of informal suggestions that Catalonia had the right to secede following an Oct. 1 referendum.  Instead, Mr. Puigdemont’s speech only deepened the confusion, perhaps deliberately so. By restating Catalonia’s right to independence, he continued to anger the opponents of secession. But by refusing to begin the secession process immediately, he frustrated some of his allies in the independence movement, who felt he had not taken a decisive enough stance.  “I assume the mandate of the people for Catalonia to become an independent state in the shape of a republic,” Mr. Puigdemont said, before adding, seconds later, that he and his government would “ask Parliament to suspend the effects of the declaration of independence so that in the coming weeks we can undertake a dialogue.”  The careful distinctions Mr. Puigdemont was trying to draw left many Catalans confused. Miquel Iceta, the leader of the Catalan branch of the Socialist party, expressed bemusement at the “complex” wording used by Mr. Puigdemont. “Let’s see if I’ve understood this well,” Mr. Iceta told Mr. Puigdemont during the parliamentary session. “You’re taking on a mandate that I’m questioning and at the same time you’re proposing to suspend a declaration that hasn’t been made.”

Catalonia Declares Independence but Hits Hold Button; Spain Sets Emergency Meeting; Good Outcomes Seem Unlikely – Yves Smith - Tuesday evening, Catalonia’s President Carles Puigdemont tried to come up with a Solomonic compromise between his separatist movement and the Spanish government. With other senior officials in the region, he signed a declaration of independence, but said he was suspending it for several weeks to pursue negotiations with Spain.Spain’s leaders reacted quickly, scheduling an emergency Cabinet meeting for Wednesday morning. Prime Minister Rajoy was mum, but central government officials kept up their drumbeat of disapproval. For instance, the BBC reported:Spain’s Deputy Prime Minister Soraya Saenz de Santamaria responded to Tuesday’s developments by saying: “Neither Mr Puigdemont nor anybody else can claim… to impose mediation.“Any dialogue between democrats has to take place within the law.” Puigdemont’s gambit was consistent with his initial move after the contested independence referendum: he said Catalonia would secede shortly but called for negotiations. As we pointed out then: Yet after having threatened to declare independence within 48 hours of a favorable referendum vote (and press reports indicated that the total number of voted lodged favoring departure was higher than the threshold Catalonian separatists had set), officials in Catalonia are now retreating from their threat of a speedy exodus. Instead they want to negotiate and have the EU moderate. But you can’t have talks unless the other side wants to talk too.In the intervening days, Spain has made it even clearer than it did in the referendum crackdown that it has no intention of indulging Catalonia’s secessionists. The only open question is how harsh its next moves will be.Let us consider the moves Spain has already taken against the separatists:Spain issued a decree allowing companies to move headquarters more readily. One well-regarded company,  Oryzon Genomics, announced plans to move even before the Spanish government intervened to facilitate a corporate exodus. Some US companies with units based in Catalonia claimed they could withdraw overnight. CNBC provided a roundup yesterday of the companies who said they were making plans to relocate or giving it serious study. The Constitutional court suspended a scheduled Catalonia parliamentary session. As we described, the Constitutional court blocked the meeting of Catalonia’s parliament at which the referendum results were set to be presented and where the legislators were expected to approve a declaration of independence. Moreover, as the Guardian pointed out:The court warned that any session carried out in defiance of its ban would be “null”, and added that the parliament’s leaders could face criminal action if they ignored the court order.

Madrid scorns Catalan leader's independence statement - BBC News: The Spanish government has rejected a statement of independence signed by Catalan leader Carles Puigdemont and dismissed calls for mediation. Spain's deputy prime minister described Mr Puigdemont as someone "who does not know where he is, where he's going". Prime Minister Mariano Rajoy is holding an emergency cabinet meeting to discuss the government's next steps. Mr Puigdemont signed a declaration of independence on Tuesday, but halted implementation to allow negotiations. There had been speculation that the Catalan president might declare independence and put the move into effect, plunging Spain into an even deeper political crisis.Spain has been in turmoil since a disputed referendum on 1 October which was declared invalid by the country's Constitutional Court. Addressing the Catalan parliament in Barcelona on Tuesday evening, Mr Puigdemont said the autonomous region had won the right to be independent as a result of the vote. "We call on international states and organisations to recognise the Catalan republic as an independent and sovereign state," he said. He said the "people's will" was to break away from Madrid, but he also said he wanted to "de-escalate" the tension around the issue. "I propose suspending the effects of the declaration of independence to undertake talks in the coming weeks without which it is not possible to reach an agreed solution," Mr Puigdemont told MPs. 

Catalan referendum stirs up Balkan nationalists’ hopes – Catalonia’s drive to secede from Spain is rekindling dreams of independence in ethnic pockets across the Balkans, a potentially dangerous ambition in a region where nationalist violence claimed tens of thousands of lives in the 1990s. From ethnic Albanians in southern Serbia to the Serbs of Republika Srpska, separatist leaders are asking the same question in the wake of the banned Catalan referendum: Why don’t we do the same? On election day, graffiti of Catalan flags appeared in Novi Sad and several other towns in the northern Serbian province of Vojvodina, along with the claim that “Vojvodina = Catalonia.” Meanwhile, in the southern Bosnian town of Mostar, a giant banner appeared near the cathedral showing the flags of Catalonia and Herceg-Bosna, the self-styled Croat entity, reading: “Good luck. We are the next,” according to local media. The fact that one region — Kosovo — managed to secure its independence has emboldened many like-minded leaders in the region, while infuriating many others. Brussels’ argument that it considers Catalonia’s referendum illegal, while backing Kosovo’s independence as a “special case,” infuriated Serbia, which denounced the EU’s “double standard.” Belgrade has fiercely rejected Kosovo’s unilateral declaration of secession in 2008, which carved off the southern Serbian province into a country in which 90 percent are ethnic Albanians The move came a decade after the bloody 1998-1999 war which claimed 13,000 lives, ending only after an 11-week NATO bombing campaign which kicked Serbian armed forces, controlled by Slobodan Milosevic, out of the breakaway territory.

Spain gives Catalan leader eight days to drop independence (Reuters) - Spanish Prime Minister Mariano Rajoy on Wednesday gave the Catalan government eight days to drop an independence bid, failing which he would suspend Catalonia’s political autonomy and rule the region directly. His move could deepen the confrontation between Madrid and the northeastern region but also signals a way out of Spain’s biggest political crisis since a failed military coup in 1981. Rajoy would probably call a snap regional election after activating Article 155 of the constitution that would allow him to sack the Catalan regional government. Catalan leader Carles Puigdemont issued a symbolic declaration of independence from Spain on Tuesday night but then immediately suspended it and called for negotiations with the Madrid government. “The cabinet has agreed this morning to formally request the Catalan government to confirm whether it has declared the independence of Catalonia, regardless of the deliberate confusion created over its implementation,” Rajoy said in a televised address after a cabinet meeting called to consider the government’s response. He later told Spain’s parliament the Catalan government had until Monday, Oct. 16 at 0800 GMT to answer. If Puigdemont was to confirm he did declare independence, he would be given an additional three days to rectify it, until Thursday, Oct. 19 at 0800 GMT. Failing this, Article 155 would be triggered.   It is not yet clear if the Catalan government will answer the requirement but it now faces a conundrum, analysts say.  If Puigdemont says he did proclaim independence, the central government will step in. If he says he did not declare it, then far-left party CUP would probably withdraw its support for his minority government. “Rajoy has two objectives: if Puigdemont remains ambiguous, the pro-independence movement will get more fragmented; if Puigdemont insists on defending independence then Rajoy will be able to apply Article 155,” said Antonio Barroso, deputy director of the London-based research firm Teneo Intelligence.  “Either way, Rajoy’s aim would be to first restore the rule of law in Catalonia and this could at some point lead to early elections in the region.”  The stakes are high - losing Catalonia, which has its own language and culture, would deprive Spain of a fifth of its economic output and more than a quarter of exports.

Spain Constitutional Reform Trial Balloon: Bona Fide or Headfake to Split Catalonia? - Yves Smith - The Financial Times reports tonight that some members of the Popular Party and its opposition, the PSOE, the Socialists, are trying to find a more durable solution to the standoff in Catalonia via constitutional reform. But is this just a ploy to discredit the separatists if they continue with their plan to declare independence?The current state of play is that the leader of Catalonia’s movement, Carles Puigdemont and other members of parliament signed a declaration of independence, which was then suspended in the hope that Spain’s government would be willing to entertain negotiations. But this gambit was never likely to succeed. Spain has repeatedly acted to check the separatists, first via obtaining a Constitutional court ruling declaring an independence referendum to be illegal, then using that as the basis for a crackdown. The King’s fierce denunciation of the separatists was another sign that Madrid would cut them no slack. Prime Minister Rajoy has kept the pressure on by demanding that the separatists either follow through with their threat or retreat by insisting that the need to take a position on whether they are independent or not by next Monday, again making clear he has no interest in negotiating.While the press has focused on the physical steps to prevent the election, such as seizing ballots and having the Guardia Civil rough up citizens trying to vote and make arrests, even more significant was that Spain intervened in Catalonia’s accounts. Spain used the banks that handle Catalonia’s accounts to prevent payments to be made to support the election. That was one reason why more ballots were not printed. Having Spain insert itself in what Catalonia can and cannot pay for is a significant infringement upon its autonomy. It was arguably kosher because the action was taken pursuant to enforcing the Constitutional court ruling. But with this precedent having been set, and the mechanism for control already in place, it would appear that Catalonia’s wings have already been clipped. So why, if the Spanish government has held to a hard line on the separatist movement in Catalonia, and Rajoy has made clear that he will invoke Article 155 and assert control over Catalonia if it decides to act on its declaration of independence, are some members of the Spanish government making conciliatory noises?

Spanish Defence Minister: “Almost” Completely Certain Armed Forces Won’t Be Needed In Catalonia - The Minister of Defence, María Dolores de Cospedal, caused controversy before Spain's national day celebrations on Thursday by telling a television show she was "almost" certain the central government would not have to use the Armed Forces as part of the Catalan crisis. Asked about the government's plan for applying Article 155 of the Spanish Constitution to suspend home rule, she replied it was acting with "proportionality" and "firmness". Pressed further on Article 8, which defines the main constitutional role of the Armed Forces, Mrs. De Cospedal replied: "I am almost completely certain it is not going to be necessary to use them". "We have they duty, and they have the duty", she added: "they know they do, to be ready, the men and women who make up the the armed forces, to defend their country, either at home or abroad". "I believe it is not going to be necessary but there are still many things and actions they can carry out." "The armed forces have the role of defending the constitutional order, the national sovereignty and the territorial integrity of our country and they are ready to do whatever is needed on the orders of the government of their country, which is the constitutional government." On October 5, Mrs. De Cospedal warned against tyranny and said: "Everything outside of democracy is a threat to our nation".

EU Spain: Juncker does not want Catalonian independence - BBC News: European Commission President Jean-Claude Juncker has said he does not back Catalan independence, fearing others may follow the same path. Mr Juncker, speaking at a students forum in Luxembourg, warned it could result in a region too complicated for the European Union (EU) to govern. Spain has been in turmoil since the separatist government in Catalonia held a disputed referendum on 1 October. The vote, declared invalid by Spain's top court, had a 43% turnout. Almost 90% of voters backed independence, Catalan officials say, resulting in Catalan leader Carles Puigdemont signing a symbolic declaration of independence on Tuesday.However, he then suspended its implementation to allow several weeks for talks with Madrid.Madrid, in turn, has issued its own ultimatum, with Spanish Prime Minister Mariano Rajoy giving Mr Puigdemont five days to explain whether or not he has declared independence.If Mr Puigdemont confirms by Monday that he has, he will be given a further three days to withdraw the declaration. If this does not work, Madrid has threatened to invoke Article 155 of the constitution, allowing Spain to suspend Catalan autonomy and impose direct rule. Speaking at Luxembourg University on Friday, Mr Juncker urged Mr Rajoy - who has described the current situation as the most serious threat to Spain's democracy in its 40-year history - to bring the situation under control.

Spain and Europe are proposing a solution that will solve nothing - Predictably, the reactions from Spain and Europe have helped us to understand where we stand at the moment. This is it, in a nutshell: Europe espouses a reform of the Spanish Constitution as a means to resolve the Catalan feud and, apparently, PM Mariano Rajoy agrees and obliges but, more importantly, he gains some time. Someone in Brussels might believe that this is the key to solving the Catalan conundrum, but they —and us— have a problem: they are proposing a solution that will solve nothing. Two details stand out, in particular. Firstly, how keen everyone in the UE was to come together and uphold the Spanish constitution. This support came after an unprecedented address by Donald Tusk on Tuesday —an hour before Puigdemont was due to speak in parliament— asking the Catalan president to exercise restraint and seek dialogue, whilst effectively treating the Spanish government and its Catalan counterpart as equals. Here lies the difference: when faced with a credible threat of a proclamation of independence, Europe spoke with a tone that distilled institutional respect, which it then went on to abandon right away. There is a lesson to be learnt here: only the proclamation of independence and its unilateral enforcement will prompt a change in the perception of what we are. Either we become an active subject in the negotiation or we will remain a mere object. The second detail that stands out is the fact that, rather than PM Rajoy, it was PSOE leader Pedro Sánchez who announced the alleged new effort to reform the constitution. For Rajoy admitting that he must reform the constitution is a bitter pill to swallow after all these years staunchly refusing to do precisely that. However, allowing Sánchez to make the formal announcement means that the endeavour has zero credibility. If it were true, an announcement of such magnitude would merit a solemn declaration by the Spanish Prime Minister. And this is the key issue. Europe is putting pressure to come up with a solution that, eventually, will boil down to a promise to amend the constitution. Rajoy has agreed to it, but only because he has no other choice. Yet he gets Sánchez to announce it, while he threatens to end Catalonia’s home rule by invoking Article 155. 

  Thousands join French public sector strike against Macron - Thousands of French public sector workers angered by Emmanuel Macron's plans to freeze their pay and eliminate 120,000 jobs went on strike Tuesday, amplifying opposition to the president's cost-cutting, pro-business agenda. Nine unions representing 5.4 million public workers joined together to call for a day of nationwide strikes and demonstrations to show their "profound disagreement" with Macron's bid to transform the gargantuan public service. The protests are the fourth round of demonstrations in France since September aimed at forcing the 39-year-old president to row back on his reforms, with the government's response being closely watched by European allies and investors. There has been vocal criticism of Macron's policies from his opponents, but so far fewer have taken to the streets than against previous governments forced into major U-turns by crippling industrial action and protests. "There are a lot of people mobilised... we need to hear these worries," government spokesman Christophe Castaner told France 2 television on Tuesday in conciliatory comments toward the demonstrators. But Prime Minister Edouard Philippe signalled on Monday that the government had no plans to change course, though telling public sector workers they were "not at all unappreciated". Tuesday's day of action was the first time in a decade that all nine public sector unions have issued a joint strike call, but there appeared to be limited disruption on the national railways or in schools. 

Draghi: ECB's negative rates have been a success - -- European Central Bank President Mario Draghi said Thursday the central bank's negative interest-rate policies haven't hurt bank profitability as critics suggested they would. Mr. Draghi also reiterated the ECB's guidance that asset purchases would continue until officials see a sustained improvement in the outlook for inflation, and that interest rates would remain at current levels "well past" the time it stops buying assets. In June 2014, the ECB moved the interest rate it pays to banks that park money with it into negative territory, effectively charging banks to leave cash on deposit. It subsequently cut it three more times, to its current level of minus 0.4%. Critics have called the move counterproductive as it could squeeze bank profits, but Mr. Draghi said Thursday the profitability of European banks has been increasing and is forecast to increase further as the eurozone's economic recovery continues. "By and large our negative interest-rate policies have been a success," Mr. Draghi said at the Peterson Institute for International Economics. "We haven't seen the distortions that people were foreseeing. We haven't seen bank profitability going down; in fact it is going up." He added the policy hasn't hurt money market-funds either, another predicted consequence. The money flowing into such funds, which park investors' money in cash and short-term debt securities, has been increasing, Mr. Draghi said. Mr. Draghi signaled in September that the bank probably would announce plans for the future of its asset-purchase program after its next policy meeting Oct. 26.

Make Germany Great Again -- The Financial Times columnist Gideon Rachman commented at the beginning of the year that it was unlikely that any German party would ever be successful with a slogan “Make Germany Great Again”. The stunning electoral success of the hard right Alternative for Germany party in the federal elections has shattered that assumption among the European chattering classes.  The nationalist right-wing Alternative for Germany (“AfD”) party surged to 12.6% of the vote and will send almost 100 MPs to the German Bundestag on the back of widespread anger about Angela Merkel’s decision to open the borders to over a million predominately Muslim refugees in 2015/2016. In contrast, the traditional establishment parties gained the smallest share of the vote since the war. Angela Merkel’s Christian Democratic led coalition gaining only 33% of the vote and the Social Democrats did even worse, only 20%, one of their worst ever performances in their history. The same liberal commentariat who were crowing only a few months ago that the populist threat had peaked on the Continent after the crushing victory of Emmanuel Macron in the French elections have gone very quiet now. Populism has arrived in the most powerful country in the EU with a dark history of genocide, totalitarianism and imperialism.

Merkel agrees to limit on refugees entering Germany - France 24:  Two weeks after winning elections with a reduced majority, Chancellor Angela Merkel agreed on Sunday to limit Germany's refugee intake in a bid to unite her conservative camp ahead of tough coalition talks to form a new government. Merkel's team huddled with her Bavarian CSU allies led by Horst Seehofer, who has angrily blamed her decision to allow in over one million asylum seekers since 2015 for the rise of the far-right Alternative for Germany (AfD) party. After 10 hours of closed-door talks, Merkel's CDU and the CSU agreed they would aim to cap refugees coming to Europe's top economy at 200,000 a year, according to a draft paper -- a formulation close to a long-time Seehofer demand that Merkel had repeatedly rejected. Merkel agrees to 'refugee cap' of 200,000 in concession to CSU, reports FRANCE 24's Jessica Saltz The goal of the meeting was to settle bitter squabbles so the estranged conservative sister parties can again present a united front in upcoming coalition talks with two smaller parties -- the pro-business Free Democrats (FDP) and the left-leaning and ecologist Greens. The CSU's beleaguered Seehofer -- who after a vote drubbing faces internal challengers, and state elections next year -- had vowed to close his party's exposed "right flank" and win back AfD voters, crucially by taking a harder line on refugees and immigration. In an opening salvo Sunday, the CSU had published a list of demands, including capping refugee numbers, a committment to a "healthy patriotism" and an acknowledgement that "conservatism is sexy again". "We must fight the AfD head-on -- and fight to get their voters back," said its ten-point list published in mass-circulation Bild am Sonntag. 

Germany rejects May’s Brexit transition hopes - Germany and France have dashed British hopes of fast-tracking talks on a two-year post-Brexit transition deal, insisting that the UK’s EU divorce bill be resolved first. British officials had hoped that EU leaders would jump-start negotiations at a high-profile Brussels summit in two weeks by approving the opening of talks on a transition period after Britain’s exit in 2019, which Prime Minister Theresa May proposed in her Florence address last month. But according to European diplomats, a Germany-led group of EU countries has demanded more clarity on the long-term financial commitments Britain will honour. The UK insists it will only do this once the shape of its future relationship with the EU is clear, including a transition period. Berlin’s tough stance will be of particular concern to London, coming just a week after Angela Merkel, the German chancellor, met Mrs May to discuss Brexit and her Florence speech, which offered to use transition payments to cover an EU budget shortfall of at least €20bn. The setback comes amid further signs that post-Florence hopes of smoother Brexit sailing are beginning to fade. 

Brexit Becomes More Unhinged as Tory Cage Match Intensifies While May Tries (Again) to Blame EU -  Yves Smith - As the Tory party descends into open warfare, Theresa May is attempting to pull off a bizarre face saving exercise. In a speech scheduled for 3:30 PM today, the Prime Minister will attempt to shift blame in advance of the widely anticipated refusal of the EU to approve having Brexit negotiations start to address trade-related matters. In Brexit-speak, that phase is referred to as “the future relationship”. Aside from the fact that she’s been unable to tamp down infighting (more on that shortly), this week Brexit negotiations resume, with the EU to decide formally whether enough progress has been made for them to move on the “future relationship”. Recall that this was an ambitious timetable given the complexity of the issues already at hand, assuming something resembling actual negotiations were actually happening. Press reports suggest that the only topic on which meaningful headway has been made is on the legal transition issues, such as the role ECJ decisions will play post Brexit. May’s speechwriters have grabbed onto a fetching cliche, which many of the press barons have dutifully picked up: that the ball is (supposedly) in the EU’s court. The reality, as anyone who has dimly paid attention knows, is that the Tories have lost the ball and are too busy squabbling even to go looking for it.  The intensified bickering, and the continued lack of agreement as to what sort of Brexit even the Tories want, gives vivid confirmation to a major EU complaint: they have no one to negotiate with. Worse, May’s team is flogging a new canard: that the Brits are making realistic plans for Brexit. This is laughable, but even worse, the Government may actually believe this new garbage barge they are trying to foist on the soon-to-be-suffering public (save the top rich and technocrats, who will find a way to save their hides and maybe even prosper). From the Financial Times: In the meantime, Dominic Raab, a minister at the Department of Justice, claimed that the UK was making more extensive plans than previously understood to prepare for the possibility it might leave the EU in March 2019 without agreement on a future relationship. Such an outcome could require the country to set up customs posts, air traffic control systems and other new, independent institutions far more quickly than if a deal is reached for an orderly transition.

Theresa May sets out proposals for new deal with the EU - BBC News: In her first address to parliament since last month's speech in Italy, in which she said the UK would honour its financial obligations to the EU budget, Mrs May described the government's ambition for a "new, deep and special partnership between a sovereign United Kingdom and a strong and successful European Union". "Achieving that partnership will require leadership and flexibility, not just from us but from our friends, the 27 nations of the EU," she said. "And as we look forward to the next stage, the ball is in their court. But I am optimistic we will receive a positive response." She rejected existing models for economic cooperation, such as membership of the European Economic Area or the Canadian model, calling instead for a "creative" solution that would be "unique" to the UK. But she said the UK was "preparing for all eventualities" - a reference to the prospect of leaving the EU with no deal. On Northern Ireland, she said: "We have now begun drafting joint principles on preserving the Common Travel Area, and associated rights and we have both stated explicitly we will not accept any physical infrastructure at the border. "We owe it to the people of Northern Ireland and indeed to everyone on the island of Ireland to get this right."

EU hits back at Theresa May: 'Brexit negotiations are not a ball game' | The Independent: The European Commission has hit back at Theresa May’s comments on Brexit negotiations, admonishing the Prime Minister and warning Britain it still has more work to do before a deal can be struck. In a statement released to the media the night before the start of the fifth round of negotiations Ms May had argued that her Florence speech meant EU had to give ground and that “the ball’s in their court”. But speaking to reporters in Brussels on Monday the EU seemed unimpressed by the Prime Minister’s approach and comments.“This is not exactly a ball game,” Margaritis Schinas, the Commission’s chief spokesperson told reporters in Brussels. “We do not provide comment on comments. What I can remind you of is that there is a clear sequencing to these talks. “There has been, so far, no solution found on step one, which is the divorce proceedings, so the ball is entirely in the UK’s court for the rest to happen.” The spokesperson said this sentiment been clearly express “by most if not all political groups” in the European Parliament. British officials confirmed on Monday that David Davis would not be travelling to Brussels today for the start of the talks, as he has done for the previous four rounds. As a result the customary joint press conference with Brtish and EU officials – sometimes used in the past to snipe at the other side – has also not been scheduled this time. Asked about Mr Davis’s absence – which is apparently for parliamentary duties -the European Commission spokesperson said the pace of talks would depend on the availability of British negotiators. “The European Commission article 50 team is available 24/7, the timing of talks depends on the availability of our UK partners. We are always here and we are ready,” he said. “As far as the Secretary of State’s agenda is concerned you may like to check directly with him.” 

Boris Johnson will 'just say no' if Theresa May tries to sack him amid calls for 'miserable' Philip Hammond to face axe - Boris Johnson will "just say no" if Theresa May tries to demote him, his allies have said as they warned sacking him as Foreign Secretary would undermine Brexit and destabilise the Government. The Prime Minister is instead being urged by members of her Cabinet to sack Philip Hammond, the Chancellor, for "making Brexit hard" and being "miserable".Mrs May indicated that Mr Johnson could be moved into another Cabinet role in a reshuffle at the end of the month, saying that she would not "hide from a challenge". Her comments prompted a furious response from Mr Johnson's backers, with one Tory minister saying that there is a "stench of death" emanating from Downing Street. They warned that the Prime Minister lacks the authority to demote Mr Johnson in the wake of her disastrous General Election performance and chaotic conference speech.

Theresa May Tries to Pass Off Handwaves as Meaningful Planning in Case of Disorderly Brexit -  Yves Smith - Preppers should find that they will have a great business opportunity in the UK once the great unwashed citizenry realizes how utterly unprepared the UK is for a disorderly Brexit. That outcome that looks more likely with every passing day.The latest proof comes via two papers released by the Government that describe how the UK plans to handle trade in the event that Brexit talks fail. They apparently have the joint aim of reassuring businesses and the public and strengthening the UK’s negotiating position with the EU. To any discerning reader, these documents are a monster own goal. They demonstrate how the officialdom hasn’t even begun to grapple with the enormous operational challenges that Brexit presents. The papers are so threadbare in terms of their discussion of “rubber hits the road” issues like what will happen at borders generally and with the Irish border specifically that they fall short of even qualifying as plans to come up with a plan. Those would at least would define issues to be tackled with deadlines, allocation of work, staffing levels, and clear end products. If I were a businessman in the UK whose business had any meaningful exposure to imports and exports, I’d be hitting the panic button. And EU officials may be getting a form of double vision. On the one hand, the spectacle of the Brits unable to get past the analysis paralysis stage will only reconfirm that they have the upper hand and can hold firm to the positions they have already staked out. On the other hand, they have to be getting even more frustrated with dealing with the UK’s bizarre combination of arrogance and gross ineptitude.  Normally, I’d make at an effort to give the two documents a careful reading, particularly since neither one is very long. But both are such obvious handwaves that they aren’t worth any more than a quick look.  It’s obvious even on a mere flip through that they natter on about principles or presen data that might have a place in a much longer treatise but isn’t on point for the task at hand, figuring out how to handle the movement of goods if the UK has no exit deal as of March 2019. In keeping, it sketches the types of things a Customs Bill ought to include, as opposed to making recommendations or offering alternatives.  For those who are brave enough to have a look, it’s not hard to see that the first paper, Preparing for our future UK trade policy, is hot air with a few charts to give it an air of substance.

RBS Head Says Banks Need Brexit Transition Details by Early 2018 - Royal Bank of Scotland Group Plc Chairman Howard Davies said details of a post-Brexit transitional deal with the European Union need to be outlined in the next five months to stop more financial-services jobs from leaving London. “If there are no details by the first quarter of next year, the number of moves of people out of London will accelerate,” Davies said on Sky News Sunday. If nothing is certain by then, “I think people will trigger those contingency plans” requested by the Bank of England for the U.K. exit from the EU. A “relatively small” number of RBS’s employees will leave Britain’s capital and financial hub after the U.K. quits the EU in March 2019, Davies said, with a “re-balancing” of financial activity in Europe. The bank is setting up a subsidiary in Amsterdam, to which 150 jobs will be moved. The U.K.’s financial services sector may be among the hardest hit by Brexit, as London is a key financial hub, undertaking activities such as euro-denominated clearing. London could lose around 10,000 banking jobs and 20,000 positions in financial services as 1.8 trillion euros ($2.1 trillion) of assets are moved out of Britain after Brexit, according to a report from the Bruegel think tank, based in Brussels. Businesses are concerned that May’s government is taking a long time to get to the “nitty-gritty” of what a new trading relationship with the EU would look like, Davies said. Last week, Chancellor of the Exchequer Philip Hammond described a transition period as a “wasting asset,” suggesting that the longer it takes to nail down, the less it’s worth to the U.K. “Certainly some time I think has been wasted up until now in negotiations, which haven’t really got anywhere,” Davies said. When asked whether the government recognizes that banks are already beginning to suffer, he said: “I hope so, because we keep telling them.”

Michel Barnier Pushing EU to Discuss Trade Relations with UK; Germany and France Opposed --Yves Smith - Last week, we highlighted the fact that the EU’s Brexit negotiator, Michel Barnier, was pressing the EU to approve having the Brexit talks move to include the consideration of the so-called “future relationship,” meaning trade. This is important because it is what we call a “shape of the table” issue, in this case, the order in which issues will be negotiated.  We had seen Barnier’s move as bona fide, since a big job of a negotiator is to try to move his side towards a deal. Readers rejected this idea. It now appears that our interpretation was correct, and Barnier is continuing to push the EU to relent. However, as we’ll discuss, he appears very unlikely to succeed.  The short version is that the UK is certain to suffer at best a “hard Brexit” and at worst, a disorderly Brexit if the Brexit negotiations don’t proceed according to the original tentative plan. That was to start discussing “the future relationship,” meaning trade and/or a transition phase after this October round. The 27 remaining members of the EU need to approve having the negotiations move on to these new issues.Frankly, I think a hard Brexit is inevitable. The UK side lacks a unified negotiating position, meaning it can’t credibly commit to anything. Even though the UK is so utterly unprepared for any kind of Brexit that it desperately needs a standstill of some sort, the hard Brexiters go to war and whip up the press any time that idea rears its head. They’ve had a go at Phillip Hammond at Treasury who is trying to steer a more moderate course, plus Boris Johnson has threatened a leadership challenge. No one seriously wants him as PM but Johnson has his use as a means of keeping the weak Theresa May in line. If you read Article 50, Section 2 says:In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. The European Council published the guidelines at the end of April. They included a section that said the negotiations would be phased, what would be in the first phase, and that the European Council would determine if the negotiations had made enough progress to move to the next phase. This document didn’t set a timetable for the first phase but the hope was that the European Council would approve starting to discuss “the future relationship” issues after the October round.

Theresa May won't say if she'd vote for Brexit now - BBC News: Theresa May has refused to say how she would vote if there was another EU referendum. The prime minister, who backed Remain in last year's vote, was repeatedly asked if she would now vote for Brexit. She told LBC radio: "I don't answer hypothetical questions." The PM, who said during the general election campaign that the UK had a "brighter future" after Brexit, added: "I voted Remain for good reasons at the time but circumstances move on." Downing Street sources suggested it would be ridiculous to say the prime minister's comments raise doubts about whether she will deliver Brexit, as some such as ex-UKIP leader Nigel Farage have said. Conservative MP Bernard Jenkin, who was a leading campaigner for Brexit, said: "She is entirely right to avoid being divisive. "She is seeking to unite the country, not to perpetuate referendum divisions."Presenter Iain Dale told Mrs May that Health Secretary Jeremy Hunt had switched from Remain to Leave because former Chancellor George Osborne's gloomy economic predictions about the latter had failed to come true. He asked Mrs May why she could not say she had changed her mind, given that she was leading the country into Brexit. "Yes and I'm prime minister ensuring I'm going to deliver Brexit for the British people," she replied. Pressed again, Mrs May said: "I could say I would still vote Remain or I would vote Leave just to give you an answer to that question. "I am being open and honest with you. What I did last time round was I looked at everything and I came to a judgement and I would do exactly the same this time round. "But we are not having another referendum and that's absolutely crucial." 

Chancellor Philip Hammond says it would be irresponsible to budget for no deal Brexit now - The chancellor has said it will not be responsible to spend in preparation for a "no deal" scenario from the European Union now, and that the government is working to remove uncertainty troubling businesses. Writing in the Times, Philip Hammond said he needs to ensure "that we are prepared for all outcomes, including a no deal scenario". He added: The government and the Treasury are prepared. We are planning for every outcome and we will find any necessary funding and we will only spend it when it's responsible to do so. Hammond noted uncertainty as the main challenge "impacting businesses up and down the country" with investment slowing as firms wait for detail about access to markets, goods, labour and services. The chancellor said the immediate priority was to remove the uncertainty through "securing agreement on a time-limited implementation period" and "by reaching a deal on the terms of our future long-term relationship with the EU". 

Deadlock over UK's Brexit bill, says EU's Michel Barnier - BBC News: The EU's chief negotiator Michel Barnier says there has not been enough progress to move to the next stage of Brexit talks as the UK wants. He said there was "new momentum" in the process but there was still "deadlock" over how much the UK pays when it leaves, which he called "disturbing". Mr Davis said the UK still wanted to be given the green light for trade talks when EU leaders meet next week. The pair were speaking after the fifth round of Brexit talks in Brussels. Mr Barnier said: "I am not able in the current circumstances to propose next week to the European Council that we should start discussions on the future relationship." The UK's Brexit Secretary David Davis urged EU leaders at the summit, on 19 and 20 October, to give Mr Barnier a mandate to start trade talks and to "build on the spirit of cooperation we now have". He said there had been progress on the area of citizens' rights that had moved the two sides "even closer to a deal". Mr Barnier said he hoped for "decisive progress" by the time of the December summit of the European Council. He said Theresa May's announcement that Britain would honour financial commitments entered into as an EU member was "important". But he said there had been no negotiations on the issue this week because the UK was not ready to spell out what it would pay. "On this question we have reached a state of deadlock which is very disturbing for thousands of project promoters in Europe and it's disturbing also for taxpayers."

 UK logistics sector cautions over ‘no-deal Brexit’ --The UK logistics sector is urging caution to ensure that UK trade and industry can continue to operate seamlessly post-Brexit after the UK government yesterday published White Papers on trading and customs agreements to be implemented in the event of a “No Deal” outcome to the ongoing EU talks.James Hookham, the Freight Transport Association (FTA)’s deputy chief executive said that so far businesses had no details of what is expected of them beyond the broad statements in yesterday’s White Paper. “Business cannot be expected to sort it all out at the last minute,” he commented. “It is not just about the Government being ready.”Hookham continued: “The customs White Paper is also silent on the need to agree a quota with the EU over the number of trucks that will be permitted to travel between the UK and the EU after Brexit. This is currently unlimited, but the automatic right to send a truck abroad will end upon Brexit.” There is also a need to agree to continue to recognise the licences and qualifications of the drivers driving them, Hookham noted.  “But by far the bigger issue, given the balance of trade, is with imports and the White Paper says very little about how the UK will impose Customs tariffs and border checks on freight flows from the Continent and Ireland. Disruption to imports will be felt far quicker by businesses and consumers than will a disruption to exports. “None of these issues need be showstoppers, but it is urgent that the Government commences detailed discussions with the logistics and supply chain sector immediately. FTA and its members await their call.”

Brexit Stalls: Talks Deadlocked, Repeal Bill Postponed; Beginning of the End of No Deal Denialism? -- Yves Smith - Progress toward the fantasy of an orderly Brexit came to a dead halt yesterday. Even though it was no surprise to anyone paying attention, the EU’s negotiator Michel Barnier pronounced the talks to be in a “state of deadlock” over the critical issue of the so-called exit bill. That means, as was widely anticipated, that the EU will not approve letting the UK start to address trade-related issues (included in “the future relationship”) next month, with the next window for possible approval after the December session. It can’t be said often enough that even if the negotiations had gone swimmingly, there is no way for the UK to have an orderly Brexit. There are simply too many things that have to be addressed and even a very competent, deeply staffed government would find it well nigh impossible to execute. It would take a war-level mobilization of resources and nothing remotely like that is happening. Even though Barnier and the UK’s David Davis tried to put the best face possible on this sorry situation, the fact is that virtually no progress was made in the August round of negotiations, and the September sessions appeared to manage the difficult feat of accomplishing even less. An overview from the Financial TimesOfficials familiar with the talks said there had been some minor technical advances but no progress had been made on more substantial issues.By far the most substantial progress in talks over recent months has been made on the post-Brexit rights of around 3m EU citizens in the UK and 1m British nationals in Europe.This week’s discussions, however, made no dent on the biggest outstanding issues, including the role of European courts, the family rights of EU nationals, some benefits issues and the administrative processes that will be used…A possible deal over the “free movement” rights also did not gel this round.Similarly, the intra-Tory cage match shows no sign of letting up. Hard core Brexiters demanded that May abandon the talks, as if that would accomplish anything. Pressure from business interests may eventually give the moderates the upper hand, but it seems unlikely to resolve the impasse any time soon.1 From the Independent:

Hammond forced to apologise after branding EU the enemy - Philip Hammond was forced to apologise yesterday for calling the European Union “the enemy”.The chancellor faced immediate criticism for his pugnacious rhetoric and said he regretted his “poor choice of words”. Stressing that EU member states were “friends and partners” of the UK, he tweeted: “No enemies here.”Labour heaped criticism on Mr Hammond for his “foolish remarks”, which it said were reminiscent of “Basil Fawlty on holiday”. Peter Dowd, shadow chief secretary to the Treasury, said: “The tone of this rhetoric will obviously not unblock negotiations or help protect our economic interests.”Mr Hammond had sought to defend himself against his domestic critics, who have expressed concern that he could be derailing Brexit by refusing to release funds to prepare for a messy separation from the bloc and by talking down the economy.He faced a backlash this week after he wrote in an article in The Times that he would not release cash needed to plan for the consequences of tumbling out of the EU without a deal until the “very last moment”.Responding to calls from Conservative Brexiteers for him to leave the cabinet, he said that he had no intention of stepping down, dismissing the attacks as the actions of a “group of people with a very clear view of the outcome they want”.Calling his depiction by critics as a gloomy “Eeyore” bizarre and absurd, he stressed that he was “very optimistic” about the UK, adding: “The underlying economy remains robust.”The prime minister, who has been under growing pressure to sack Mr Hammond, weighed in to reassure the government benches that he would commit £250 million to help with Brexit preparations.Speaking on the fringes of the International Monetary Fund’s annual meeting in Washington yesterday, Mr Hammond tried to play down the row and stressed that he was on the same side as his Tory colleagues, characterising the party as against the EU. “I understand that passions are high, I understand that people have very strong views about this, but we are all going to the same place,” he told Sky News. “We all have the same agenda, we all signed up to the prime minister’s Lancaster House speech, we’re all signed up to the Article 50 letter, we’re all behind the speech that she made in Florence.

Reveal Secret Brexit Reports or We’ll Sue You, U.K. Is Warned - Opponents of Brexit said they would sue the British government if it fails to release internal reports into the impact of leaving the European Union on different parts of the economy.The Good Law Project, run by tax attorney Jolyon Maugham, and Molly Scott Cato, a member of the European Parliament, have written to the Department for Exiting the EU asking for the studies to be released within 14 days. “It is not right that they be hidden from public view,” said Maugham, a vocal opponent of Brexit who has already filed lawsuits over the government’s plans for quitting the 28-nation bloc. “We must be able to see what Brexit means.”The U.K.’s talks with the EU have reached a deadlock, increasing the risk of a no-deal, which may cost as much as $15,000 per worker, according to estimates by Rabobank. Meanwhile, ministers in Theresa May’s government have tried to sound upbeat about both the negotiations and the country’s economic prospects outside of the EU.While the EU has held fast to its position that the ball is in the U.K.’s court, May’s government is pinning hopes on European leaders at a summit in Brussels next week making concessions that would break the deadlock.For the EU, the U.K. still hasn’t clarified sufficiently enough how it plans to protect EU citizens’ rights in the U.K. and what future role the bloc’s top court will play. These remain key stumbling blocks and EU officials already dashed any hopes the U.K. may have had that European leaders next week would give her approval to start negotiating the two sides’ future relationship.

Britain Reportedly Considering Joining NAFTA Right as Trump Hopes to Burn It Down -- As the future of the North American Free Trade Agreement hangs in the balance, British ministers have decided now would be a great time to consider the possibility of joining the embattled pact, according to a report in the U.K. newspaper the Daily Telegraph. That’s an indication of how desperate the British government may be as it spirals ever closer to Brexit without any free trade deals lined up to replace what it would lose with Europe.Renegotiation talks among NAFTA members are set to restart this week, but President Donald Trump recently threw cold water on hopes for a happy resolution. The U.S. administration has made several demands that Mexican senators and Canadian analysts have deemed “red lines” that would end their participation in the renegotiations. Those demands increase the possibility that Trump would follow through on his threats to withdraw the United States from the almost quarter-century-old agreement.The idea of Britain joining NAFTA, in theory at least, is understandably attractive. NAFTA would open up an economic market of $16.2 trillion, the combined GDPs of the three member countries, to replace the $16.3 trillion GDP of the European Union.Joining NAFTA is one of the British government’s “no deal” scenarios, according to the Telegraph, meaning a sort of contingency plan in case Brussels refuses to meet British demands and the United Kingdom must leave the economic union without any kind of trade agreement.

Bombardier faces proposed 300% duty on plane exports to US – BelfastTelegraph - One of Northern Ireland's largest employers is facing a proposed 300% duty on its exports of planes to the US amid an international trade dispute, the US government said on Friday. A second preliminary levy of 80% has been loaded on the sales of aerospace manufacturer Bombardier. The Canadian-owned multinational is already facing a planned 220% tariff on its aircraft as part of a separate investigation, the US Department of Commerce confirmed. Bombardier employs more than 4,000 people at its Belfast factories and is due to begin delivering a blockbuster order for up to 125 new jets to Atlanta-based Delta Airlines next year. US commerce secretary Wilbur Ross said: "The United States is committed to free, fair and reciprocal trade with Canada, but this is not our idea of a properly functioning trading relationship. "We will continue to verify the accuracy of this decision, while doing everything in our power to stand up for American companies and their workers." Prime Minister Theresa May had lobbied President Donald Trump over the dispute sparked by complaints from rival Boeing that Bombardier received unfair state subsidies from the UK and Canada, allowing the sale of airliners at below cost prices in the US. Unions have warned thousands of jobs could be in jeopardy. The US government said its intervention was prompted by concern to prevent "injurious dumping" of imports into the country, "establishing an opportunity to compete on a level playing field".

Boeing a ‘Subsidy Junkie,’ U.K.’s Labour Says in Bombardier Spat  - Boeing Co. is the “king of corporate welfare,” the U.K.’s main opposition Labour Party said, accusing the U.S. aerospace giant of “egregious hypocrisy” in pursuing an illegal-subsidies claim against Bombardier Inc. that threatens thousands of jobs in Northern Ireland.The U.S. slapped 300 percent of duties on Bombardier’s C Series aircraft after upholding Boeing’s contention that the Canadian company benefited from state support, allowing it to sell the model more cheaply. Labour’s trade spokesman Barry Gardiner said Wednesday that “no aircraft these days comes to market without support from government,” including those produced by Boeing.“Boeing has absolutely been sucking at the milk of corporate welfare in America for far too long,” Gardiner said on Bloomberg TV. “They need to understand that the way in which they are playing this does not sit well with U.K. parliamentarians.” The dispute has caused a headache for U.K. Prime Minister Theresa May, who wants to strike a trade deal with the U.S. as Britain leaves the European Union. At the same time, she needs to protect more than 4,000 Bombardier jobs in Northern Ireland, where she depends on the support of 10 lawmakers from the Democratic Unionist Party to get legislation through Parliament. Gardiner didn’t mince his words on Boeing, suggesting that the company is itself a “subsidy junkie” and accusing it of bringing the Bombardier case to “crush a competitor” and get hold of “superior technology” -- including wings that are made in Belfast -- by driving down its share price “so that they can try and do a hostile takeover."  A spokesman for Boeing in the U.K. said the U.S. action is about conforming with trade law and that “Boeing complies.” He declined to comment on whether the company was trying to hurt Montreal-based Bombardier’s share price in preparation for a takeover attempt.