reality is only those delusions that we have in common...

Saturday, June 24, 2017

week ending Jun 24

Fed Raises Rates — Will Other Central Banks Follow? -- Last week, the Federal Reserve announced an increase in the Federal Funds rate to 1.25 percent. The last time the target rate reached so high was in September of 2008, when the rate was 2.0 percent. In October of that year, the target rate fell to 1.0 percent, and was moved down to 0.25 percent in December. It remained at 0.25 percent for the next 83 months.  This week's rate increase was the third increase since December 2016, when the Fed increased the rate from 0.5 percent to 0.75 percent.  Compared to the last seven years, this policy looks hawkish by comparison. On the other hand, compared to the 1990s — which were at the time seen as an era of low rates — current policy remains remarkably accommodative. Other central banks, however, continue to take no action. For example, the Bank of England recent voted to keep rates at a record low 0.25 percent. Meanwhile, the Bank of Japan is making no change and keeping rates near zero. Last week, the European Central Bank kept is target rate at negative 0.4 percent. In the wake of this week's Fed decision, the People's Bank of China elected to take no action either. If we look at all these central banks together, the Fed does appear to be the odd man out:  Perhaps the most notably development is the Fed's announcement of plans to "normalize" its balance sheet and reduce in size the huge $4.4 trillion balance sheet it has accumulated since 2009. According to CNBC: "The committee currently expects to begin implementing a balance sheet normalization process this year, provided the economy evolves broadly as anticipated," the post-meeting statement said.According to information released Wednesday, the roll-off cap level will start at $6 billion a month for the level of principal payment proceeds from Treasurys it will let run off without reinvesting. The remainder will be reinvested.The Fed will increase that cap level at a pace of $6 billion each quarter over 12 months until the cap reaches $30 billion a month.For agency and mortgage debt, the cap will be $4 billion a month initially, with quarterly increases of $4 billion until the level reaches $20 billion a month.Once both targets are met, the total runoff per month will be $50 billion. Several Fed officials have said publicly they expect the runoff program to continue until the balance sheet declines to about $2 trillion to $2.5 trillion.If the Fed manages to implement this plan, we're still only looking at a reduction to 2010 levels, and 2010 was not exactly an age of tight money at the Fed.  Moreover, it's rather unlikely we'll ever see this actually happen. Bill Gross, for example, remains doubtful: I think that the Fed can't follow through with their ... plan and I think that the Fed can't follow through with what they're suggesting in terms of the sell-backs in the Treasury market."

 Some Trump Aides Want a New Leader at the Fed --Federal Reserve Chair Janet Yellen’s candidacy for another term is encountering resistance from some Trump administration advisers who want a new leader at the U.S. central bank, according to two administration officials, even as the Treasury secretary indicated she may still be in the running. While White House officials are aware that Fed chiefs in the past have been asked to stay regardless of party affiliation, some advisers are keen to install their own pick in the coveted seat, two officials said on the condition of anonymity to discuss private deliberations. The selection process is in the early stages. Publicly, Yellen hasn’t been ruled out. “We haven’t made any decisions yet on the Fed chair, whether we’re going to have a new one or not going to have a new one,” Treasury Secretary Steven Mnuchin said in a Bloomberg Television interview June 20. President Donald Trump has until the fall of this year to make a decision on a central bank chief and hasn’t given much thought yet to the qualities he’d like to see in potential contenders, according to another administration official, who like the others spoke about the matter on condition of anonymity. 

Balance of Power: The Yellen Wild Card -- Janet Yellen's path toward a second term as Federal Reserve chair has hit some turbulence. While President Donald Trump said in April that he likes Yellen, Bloomberg's Washington bureau reports today that the idea of her staying beyond February is encountering resistance from some advisers. Short of lifetime Supreme Court picks, there's hardly a juicier nomination than for the Fed chief, and the selection process gives Trump's aides an opportunity to install their own person who will steer the economy for years to come. One recent strain of Republican thinking says that the Fed has become too independent and unorthodox. Loyalty may be another important factor for Trump's circle. A recent Bloomberg survey showed possible successors include Fed veteran Kevin Warsh, Stanford economics professor John Taylor and Trump adviser Gary Cohn. True, Yellen is still in the running and Treasury says that the selection process is in the early stages. But any move to dump Yellen would underscore Trump's indifference to Washington tradition -- Reagan, Clinton and Obama all kept on Fed chairs named by predecessors from the other party. With the Fed prepping for an unprecedented wind-down of its balance sheet, the appointment is another wild card for markets.

The Blockchain Is Going to Revolutionize Central Banking and Monetary Policy  - In January, NYU professor David Yermack taught a mini-course of three stand-alone lectures at the Stigler Center on the potential implications of blockchain technology for the future of finance. Yermack, the Albert Fingerhut Professor of Finance and Business Transformation at New York University Stern School of Business, has researched blockchain technology extensively in recent years. His Stigler lectures touched on the potential implications of blockchains for the future of finance, as well as for managers, institutional investors, small shareholders, auditors, central banks, and other groups in the financial world. As a service to the readers of ProMarket, we have posted the videos and full transcripts of the lectures. You can find the first and second lectures here and here. Below, you’ll find a video and transcript of the third and final lecture, condensed and slightly edited for clarity:

Q2 GDP Forecasts being Revised Down ---From Merrill Lynch:  Housing starts were a big disappointment in May, plunging 5.5% to 1,092k saar from 1,156k in April. ... Feeding the data into our tracking model sliced 0.1pp from our 2Q estimate, leaving us at 2.2% qoq saarFrom the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.9 percent on June 16, down from 3.2 percent on June 14. The forecast for second-quarter real residential investment growth decreased from 1.8 percent to 0.4 percent after this morning's housing starts release from the U.S. Census Bureau. From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 1.9% for 2017:Q2 and 1.5% for 2017:Q3.

"The Hope Trade" Is Over: BofA Slashes Its 2017 GDP Forecast To Just 2.1%  --First they came for the Trump Trade... then they came for the hope. And, as a result, BofA has thrown in the towel on its economic rebound for this year.  As BofA's Michelle Meyer writes, "Hopes for a big fiscal stimulus have faded, prompting us to revise our 2018 GDP growth forecast to 2.1%, down from 2.5%. While growth will be slower, it is important to remember that the economy does not "need" stimulus to expand." Unless it does of course, because as Citi showed recently, all central bank liquidity injections are fungible, and prop up not only stocks but also economies.In any case, here is BofA's explanation why it, like the rest of Wall Street not to mention the Fed, were all wrong.  Back in November when we released our Year Ahead piece, we argued that growth would be a trend-like 2% this year but would rise to 2.5% next year amid fiscal stimulus. We feel generally comfortable with our forecast for this year but now believe growth will end up being slower next year. We are therefore revising our forecast to 2.1% for 2018, implying that the economy will continue to grow modestly above trend . There are three main reasons for our downward revision to growth next year:

  1. The prospects of tax reform have dimmed. While it is still possible that legislation is passed, it seems that it would be later and smaller than previously speculated.
  2. Policy uncertainty is high and threatens to remain elevated into next year given tensions in Washington and controversies in the Trump administration. This has contributed to a "wait and see" mode among businesses and consumers.
  3. The auto sector is shifting from a tailwind to a headwind next year. This means that auto output should go from adding a few tenths to annual GDP growth to slicing a tenth or two.

Keep in mind that our downward revision in growth next year simply returns our forecast to the post-recession average of 2.1%. The US does not need fiscal easing to enjoy slightly above-trend growth. There are plenty of reasons to feel confident that the expansion will persist into 2018 without stimulus. The labor market is still adding workers in excess of what is necessary to keep up with population growth. The housing recovery is slow but steady. Financial conditions are supportive with low rates, recent softening in the dollar and appreciating equity markets. Household balance sheets appear robust with strong gains in net worth and low leverage.

Conference Board Leading Economic Index: Continued Growth in May --The Latest Conference Board Leading Economic Index (LEI) for May increased to 127.0 from a revised 126.6 in April and is currently at an all-time high. The 0.3 percent month-over-month gain was better than the 0.2% increase forecast by Conference Board LEI for the U.S. continued to increase in May with positive contributions from all of its components except for building permits, which dropped sharply, and weekly manufacturing hours. In the six-month period ending May 2017, the LEI increased 2.3 percent (about a 4.7 percent annual rate), faster than the growth of 1.1 percent (about a 2.3 percent annual rate) during the previous six months. Also, the strengths among the leading indicators have remained more widespread than weaknesses. [Full notes in PDF] Here is a log-scale chart of the LEI series with documented recessions as identified by the NBER. The use of a log scale gives us a better sense of the relative sizes of peaks and troughs than a more conventional linear scale

These policies will make the next recession both more likely and worse - by Jared Bernstein - In case you were thinking I’ve been too upbeat lately, let’s talk about recessions. Economists can’t tell you when the next downturn is coming, but we can tell you if we’re ready for it.  We’re not. Moreover, at least by one standard measure, even as the current expansion enters its ninth year, which is pretty old for a recovery, we still haven’t fully made up the damage from the last recession. And if President Trump and congressional conservatives have their way, the government’s “countercyclical function” — the temporary, automatic ramp-up in spending to offset recessions — will do much less to help those whacked by the next downturn. Meanwhile, conservatives’ financial deregulation agenda makes another economic shampoo cycle — bubble/bust/repeat — more likely.  In other words, Congress is undermining recession-readiness at the same time they’re proposing actions that make the next downturn more likely to occur. Start with the figure below. The two lines are real and potential GDP per person, the latter being what GDP would be, according to the Congressional Budget Office, if the economy were operating at full strength. Thus, the difference between the two lines gives you an estimate of the per-person cost of recession.Just eyeballing the figure, it’s clear that the current gap is larger than previous ones. Accumulating the losses over the full recovery amounts to a loss of $12,000 per person, a far greater loss than any other shown in the figure. That’s three times the loss in the second biggest gap in the figure, the one after the early 1980s recession. There’s another, more subtle observation allowed by the figure. The slope of the red line (potential GDP) has flattened of late. For several reasons, including scarring effects from the last recession, our aging demographics, and slower productivity growth, per-capita GDP growth even at full employment is slower than it used to be. And yet actual GDP still hasn’t caught up. It’s like a runner having trouble crossing a goal line that’s moving toward her! With the costs of recessions/weak recoveries so high, it’s imperative that we arm ourselves with the tools to fight them. My big worry, again, isn’t that a big recession is around the corner but that we’re not ready for it when it inevitably arrives.

The flattening yield curve - This is a great article from Josh Brown.   He basically says to calm down about the flattening yield curve.  Economies can have years of healthy growth with flat yield curves, even if inverted yield curves are a sign of a coming correction.  This is an excellent point, and normally I'm more than happy to fight the perma-bears and the bubble-mongers.  But, at the risk of being shown a fool, "This time it's different."  (Maybe it's safe to use that phrase in defense of being a bear.) First, the most significant reason long term rates are low is because we have constructed barriers to long term residential investment.  This is why GDP growth has been anemic, why the labor recovery was somewhat weak, and why there have been headwinds for consumption and balance sheet recovery.  Especially in working class neighborhoods, home prices are still 20% or 30% too low because we have destroyed owner-occupier demand in those neighborhoods, which creates real losses and introduces agency costs to tenancy while also harming working class balance sheets.So, the reason for the flat curve is a lack of investment, and its already putting both real and nominal economic growth on crutches.Second, real bank lending is already stagnant.  It has been for about 3 quarters.  This is usually a lagging effect and it points to my third point.Third, the yield level may have a significant effect on the slope of the yield curve.  The zero lower bound creates non-normal distributions for expected future interest rates, which prevents the long end of the curve from flattening as much as it normally would.  In other words, there is option value in long term interest rates.  I know I am certainly much more willing to take speculative short positions on bonds when rates are very low.  There is a lot of skew here. Notice how inverted the yield curve became in the late 1970s, when rates were high.  1990 and 2000 were pretty shallow recessions and in both the inversion was also pretty shallow.  But, the 2008 recession was more akin to the 1980-82 recessions, yet the yield curve inversion was much more shallow. 

The Last 2 Times The Yield Curve Was This Flat, The US Economy Entered Recession --The difference in yield between Treasuries due in five years and those maturing in three decades tumbled Tuesday to as low as 96 basis points this morning, the narrowest since December 2007. The last two times the US yield curve was this 'flat' (Mar 01, Dec 07), the US economy officially entered a recession.  As Bloomberg notes, shorter-term U.S. debt has underperformed this week as Federal Reserve officials reiterated plans to stick to their path of rate hikes, even as market-based measures of inflation expectations fall. Five-year Treasury notes are among the most sensitive to the Fed policy outlook, but it appears the yield curve is just not falling for The Fed's growth hype pitch......but, but, but, it's different this time...

Introducing the Revised Broad Treasuries Financing Rate -- NY Fed -- The Federal Reserve Bank of New York, in cooperation with the Office of Financial Research, is proposing to publish three new overnight Treasury repurchase (repo) benchmark rates. Recently, the Federal Reserve decided to modify the construction of the broadest proposed benchmark rate (the other two proposed rates are expected to remain unchanged; see the Bank’s announcement on May 24). In this post, we describe the changes to this rate in further detail. We compare this revised rate to the originally proposed benchmark rate and show that, in the post-liftoff period, it trades higher, on average.  The previously proposed benchmark rates were based on repo transactions that settle on the tri-party repo settlement platform. The first rate would only include transactions in the tri-party repo market, excluding both General Collateral Finance Repo Service, or GCF Repo®, transactions and Federal Reserve transactions. The second rate would build on the first by including GCF Repo trading activity while still excluding Federal Reserve transactions. Finally, the third rate would have built on the second by including Federal Reserve transactions.  The revised third benchmark rate discussed in this blog post, which is a broad Treasuries financing rate, uses the data included in the second rate—which excludes Federal Reserve transactions— but also includes bilaterally settled Treasury repo transactions cleared by the Fixed Income Clearing Corporation (FICC). The FICC-cleared bilateral market is a subset of the broader bilateral market, consisting of bilateral repo transactions collateralized by Treasury securities for which both parties to the trade are FICC netting members. The majority of netting members are broker-dealers, so the FICC-cleared bilateral market mostly consists of trades among dealers, as opposed to trades between dealers and their clients. The inclusion of these cleared bilateral repo data in the broad Treasuries financing rate should make the rate more robust to potential market changes and will increase the overall volume of transactions underlying the rate.

Bernie Sanders and Rand Paul Buck Party Consensus on Russia and Iran Sanctions Real News Network (video & transcript) With the exception of a Republican Senator Rand Paul and Independent Senator Bernie Sanders, the US Senate voted 98 to 2 to impose new sanctions on Russia, Iran, and a few other countries and to force President Donald Trump to get Congress approval before easing any existing sanctions. Secretary of State Rex Tillerson advised against such measure on Tuesday when he spoke to a Senate panel saying it would impede the hands of the administration, particularly in relation to Russia.  With us to discuss this is Max Blumenthal. Max Blumenthal is an award-winning author, journalist, and senior editor for AlterNet Grayzone Project. Thanks for joining us, Max.

When Generals Make Policies – From Tactics To Strategy To Political Decision - June 13, 2017 - Mattis promises new Afghanistan strategy by mid-July.  June 15, 2017 - About 4,000 more US troops to go to Afghanistan The Pentagon will send almost 4,000 additional American forces to Afghanistan, a Trump administration official said Thursday, hoping to break a stalemate in a war that has now passed to a third U.S. commander in chief. [...]  The decision by Defense Secretary Jim Mattis could be announced as early as next week, the official said. It follows Trump's move to give Mattis the authority to set troop levels ...The U.S. has a problem with the former Marine General Mattis as Secretary of Defense. Mattis thinks tactics, not strategy.It makes little sense to send additional troops when one does not what strategy they will have to serve. There is so far no other way to end the war in Afghanistan other than to simply pull out of it. The racket that the war has become can only be stopped by such a grand strategic decision. Sending troops before deciding on the strategy practically guarantees that the choice of a pull-out will be excluded from the evaluated possibilities. The tactical decision of sending more troops will drive the strategy. Mattis already screwed up by allowing the U.S. Central Command to loudly stump around the al-Tanf border crossing between Syria and Iraq. The small al-Tanf garrison is legally very dubious and now surrounded on three sides. The only choices left are to pull out to Jordan or to start a big war with Syria, Russia and Iran. A much bigger war is likely not what the Trump administration wants or needs. But to pull out will now be an acknowledgement that the tactical decision of deploying to al-Tanf was wrong and become a loss of face. Here again the tactics are driving the strategy:

White House Officials Push for Widening War in Syria Over Pentagon Objections -- A pair of top White House officials is pushing to broaden the war in Syria, viewing it as an opportunity to confront Iran and its proxy forces on the ground there, according to two sources familiar with the debate inside the Donald Trump administration.Ezra Cohen-Watnick, the senior director for intelligence on the National Security Council, and Derek Harvey, the NSC’s top Middle East advisor, want the United States to start going on the offensive in southern Syria, where, in recent weeks, the U.S. military has taken a handful of defensive actions against Iranian-backed forces fighting in support of Syrian President Bashar al-Assad. Their plans are making even traditional Iran hawks nervous, including Defense Secretary James Mattis, who has personally shot down their proposals more than once, the two sources said. The situation in southern Syria has escalated in recent weeks, after a U.S. warplane shot down an Iranian-made drone that had attacked U.S. forces on patrol with Syrian allies near an American outpost at al-Tanf. The drone attack came after two U.S. airstrikes on Iranian-backed Shiite militias, which had moved too close to the Americans’ garrison. Despite the more aggressive stance pushed by some White House officials, Mattis, military commanders, and top U.S. diplomats all oppose opening up a broader front against Iran and its proxies in southeastern Syria, viewing it as a risky move that could draw the United States into a dangerous confrontation with Iran, defense officials said. Such a clash could trigger retaliation against U.S. troops deployed in Iraq and Syria, where Tehran has armed thousands of Shiite militia fighters and deployed hundreds of Revolutionary Guard officers. Mattis, Gen. Joseph Dunford, the chairman of the Joint Chiefs, and Brett McGurk, the U.S. diplomat overseeing the anti-Islamic State coalition, all favor keeping the focus on pushing the Islamic State out of its remaining strongholds, including the southern Syrian city of Raqqa, officials said. “That’s the strategy they’ve signed off on and that’s where the effort is,” said one defense official.

U.S. warplane downs Syrian army jet in Raqqa province | Reuters: A U.S. warplane shot down a Syrian army jet on Sunday in the southern Raqqa countryside, with Washington saying the jet had dropped bombs near U.S.-backed forces and Damascus saying the plane was downed while flying a mission against Islamic State militants. A Syrian army statement released on Syrian state television said the plane crashed and the pilot was missing in the first such downing of a Syrian jet by the United States since the start of the conflict in 2011. The army statement said it took place on Sunday afternoon near a village called Rasafah. The "flagrant attack was an attempt to undermine the efforts of the army as the only effective force capable with its allies ... in fighting terrorism across its territory," the Syrian army said. "This comes at a time when the Syrian army and its allies were making clear advances in fighting the Daesh (Islamic State) terrorist group," it added. The U.S. Central Command later issued a statement saying the Syrian plane was downed "in collective self-defense of Coalition-partnered forces," identified as fighters of the Syrian Democratic Forces (SDF) near Tabqah. Before it downed the plane, the coalition had "contacted its Russian counterparts by telephone via an established "de-confliction line" to de-escalate the situation and stop the firing." The coalition does "not seek to fight the Syrian regime, Russian or pro-regime forces" but would not "hesitate to defend itself or its "partnered forces from any threat," the statement said. 

Russia vows to shoot down all ‘flying objects’ in Syria after US guns down first regime warplane -  --Russia has said it will treat US warplanes operating in parts of Syria where its air forces are also present as “targets” amid a diplomatic row caused by the downing of a Syrian jet.The country’s defence ministry said it would track US-led coalition aircraft with missile systems and military aircraft, but stopped short of saying it would shoot them down.A hotline set up between Russia and the US to prevent mid-air collisions will also be suspended.  “All kinds of airborne vehicles, including aircraft and UAVs of the international coalition detected to the west of the Euphrates River will be tracked by the Russian SAM systems as air targets,” the Russian Defence Ministry said in a statement.The warning comes after a US F-18 Super Hornet shot down a Syrian army SU-22 jet on Sunday in the countryside southwest of Raqqa – the first such downing of a Syrian jet by the US since the start of the country’s civil war in 2011. Washington said the jet had dropped bombs near US-backed forces but Damascus said the plane was downed while flying a mission against Isis militants.Russia’s defence ministry said the suspension of its communication line with the Americans would begin immediately. The US did not use its hotline with Russia ahead of the downing of the Syrian government warplane, said the ministry, which accused the US of a “deliberate failure to make good on its commitments” under the deconfliction deal.

Pentagon Responds: "US Pilots Will Defend Themselves If Attacked By Russians" -- One wouldn't know it by looking at the market, but the biggest developing story today was Russia's threat to intercept any aircraft - including US - flying in the area of operations of the Russian Aerospace Forces in Syria, and "be followed as targets" after yesterday's downing by a US F-18 of a Syrian Su-22 fighter jet. Moments ago the US responded to this unmistakable deterioration in relations between the two nations, when a Pentagon spokesman said U.S. pilots over Syria will defend themselves if attacked by Russians."We are aware of the Russian statements," Navy Capt. Jeff Davis, a Pentagon spokesman, said Monday morning quoted by WashEx. "We do not seek conflict with any party in Syria other than ISIS, but we will not hesitate to defend ourselves or our partners if threatened," Davis said, seemingly unaware that shooting down a sovereign nation's plane above its own territory is exactly what "seeking a conflict" looks like. In a follow up statement this afternoon, White House spokesman Sean Spicer said the US will "retain the right of self-defense in Syria."Separately, Col. Ryan Dillon, chief U.S. military spokesman in Baghdad said "coalition aircraft continue to conduct operations throughout Syria, targeting ISIS forces and providing air support for coalition partner forces on the ground."Unlike Davis, Dillon appeared to indicate the U.S. will avoid the parts of Syria where Russia said U.S. planes would be tracked as potential targets or providing additional airpower to counter threats. "As a result of recent encounters involving pro-Syrian regime and Russian forces, we have taken prudent measures to reposition aircraft over Syria so as to continue targeting ISIS forces while ensuring the safety of our aircrews given known threats in the battlespace," Dillon said. He added that coalition aircraft will continue operations against Islamic State targets “while ensuring the safety of our aircrew given known threats in the battlespace,” he said.

Russia Announces It Will Target US Planes Over Syria: UN Investigates US War Crimes for 300 Civilian Deaths -- Over the weekend, the US shot down a Syrian Jet, Iran launched missiles into Syria, and the US killed large numbers of Syrian civilians in a raid in Raqqa. With tensions escalating, Russia Warns US its Fighter Jets are Now Potential Targets in Syria. The threat of direct Russian-American confrontation in Syria escalated on Monday after Moscow said it will treat any plane from the US-led coalition flying west of the Euphrates river as a potential target. Russia said it was responding to US planes shooting down a Syrian air force jet on Sunday. The US said its planes had acted to defend US-backed forces seeking to capture the Islamic State capital of Raqqa in north-east Syria. Russia’s deputy foreign minister, Sergei Ryabkov, said the US strike “has to be seen as a continuation of America’s line to disregard the norms of international law. The Russian ministry also said it would respond to the attack by suspending its communications channel with Washington, which is designed to prevent collisions and dangerous incidents in Syrian airspace. The growing risk of a direct confrontation between the US and Russia follows a decision by US president Donald Trump to grant his military chiefs untrammelled control of he US military strategy in Syria. When the US is responsible for civilian deaths, even huge numbers of them, the US press responds with mass silence and US generals pooh-pooh everything as acceptable collateral damage. US disregard for civilians is now so bad the UN in investigating. Please consider ‘Staggering’ loss of civilian life from US-led airstrikes in Raqqa, says UN. UN war crimes investigators have denounced a “staggering loss of civilian life” caused by the US-backed campaign to reclaim Raqqa, the de facto capital of Islamic State. The independent commission of inquiry tasked with investigating violations of international law, war crimes and crimes against humanity in Syria said the intensification of airstrikes by the US-led coalition had led to the deaths of at least 300 civilians in the city. “We note in particular that the intensification of airstrikes, which have paved the ground for an SDF advance in Raqqa, has resulted not only in staggering loss of civilian life, but has also led to 160,000 civilians fleeing their homes and becoming internally displaced,” Paulo Pinheiro, the chairman of the UN commission of inquiry, told the human rights council in Geneva. Karen Abuzayd, an American commissioner on the independent panel, said: “We have documented the deaths caused by the coalition airstrikes only and we have about 300 deaths – 200 in one place, in al-Mansoura, one village.” The civilian cost of the campaign was highlighted last week when footage emerged of coalition planes deploying white phosphorus in the city, which is home to tens of thousands of civilians, prisoners of war, enslaved Yazidi women, and a few thousand Isis militants. Somehow it is OK for the US to use phosphorous bombs but no one else can use any other chemicals. What a sorry joke. The US is the biggest user and seller of weapons of mass destruction on the planet.

Syria and Our Illegal Acts of War -- American Conservative -- I mentioned the illegality of U.S. actions in Syria in an earlier post, but I wanted to say a bit more on that point. There has never been a Congressional vote authorizing U.S. military operations in Syria against anyone, and there has been scant debate over any of the goals that the U.S. claims to be pursuing there. The U.S. launches attacks inside Syria with no legal authority from the U.N. or Congress, and it strains credulity that any of these operations have anything to do with individual or collective self-defense. The U.S. wages war in Syria simply because it can. Obama expanded the war on ISIS into Syria over two years ago, and the U.S. was arming the opposition for at least more than a year before that. The U.S. has been a party to the war in Syria in one form or another for more than four years, but the underlying assumption that it is in our interest to take part in this war has not been seriously questioned by most members of Congress. The president had no authority to take the U.S. to war in Syria, and the current president still has no such authority. We are so accustomed to illegal warfare that we barely notice that the policy has never really been up for debate and has never been put to a vote. If this illegal warfare eventually leads us into a larger conflict, we will finally notice, but by then it will be too late.The latest episode with the Syrian jet shows the dangers that come from conducting a foreign policy unmoored from both the national interest and representative government. The Syrian jet was shot down because it was threatening rebels opposed to the Syrian government, and the U.S. is supporting those rebels up to and including destroying regime forces that attack them. The U.S. has no business supporting those rebels, and it has no right to have its military forces operating inside Syria. Shooting down a Syrian plane inside its own country under these circumstances is nothing less than an unprovoked act of war against another state.

This Is How Great-Power Wars Get Started -- In the last month, for the first time since the civil war in Syria began in 2011, the United States has directly attacked Syrian government forces or proxies — not just once, but at least four times. The urgent question now is less about Syria than Russia, which in response to the latest of these incidents, in which a U.S. fighter plane shot down a Syrian jet, threatened to target any U.S.-led coalition aircraft flying over Syria.Are the U.S. and Russia being sucked into war in the Middle East, and if so, how can escalation be averted?The present political dynamics in the Middle East are unsettled and kaleidoscopic. But in the interests of brevity, leaving aside smaller players, and before we think about the role of the United States and Russia, the basic configurations of power in the region since the 2011 Arab Spring can be simplified in terms of five loose groupings.

  • First, a grouping of Sunni monarchies (Saudi Arabia, the United Arab Emirates, Jordan, and Bahrain); Arab secular nationalists (Egypt since President Abdel Fatteh el-Sisi took over in 2013, Algeria, Morocco, and Tunisia); and Gen. Khalifa Haftar’s faction in eastern Libya.
  • Second, a grouping of Turkey; Qatar; and Muslim Brotherhood affiliates such as Hamas in Gaza, Egypt under President Morsi before 2013, and the internationally-recognized Libyan government based in the western part of that country.
  • Third, a grouping of Iran and its Shiite allies, including Iraq (at least among key factions of the Baghdad government), the Assad regime in Syria, and Hezbollah in Lebanon.
  • Fourth, the collection of various Sunni jihadi networks, including the Islamic State, various al Qaeda affiliates, and any number of smaller factions.
  • Fifth, there is Israel, which does not fit into any of the above, but is most closely aligned with members of the first grouping.

 We Are Inches From A New World War, And Clintonists Are To Blame -- This is your fault, Clinton Democrats. You created this, and if our species is plunged into a new world war or extinction via nuclear holocaust, it will be your fault. You knuckle-dragging, vagina hat-wearing McCarthyite morons made this happen. American military provocations against the pro-Assad coalition in Syria are fast becoming a daily occurrence. In response to the US air force’s gunning down of a Syrian military plane on Sunday, Russia has cut off its hotline with which it was coordinating operations with America to avoid aerial collisions, and has warned that all US aircraft west of the Euphrates river will now be tracked and treated as potential targets. Today, 25 miles northwest of the Russian enclave of Kaliningrad, a US reconnaissance plane was intercepted by an armed Russian aircraft which came within five feet of the plane’s wingtip. This on the same day that the US shot down yet another Iranian military drone in Syria. Clintonists have been working tirelessly since the election to manufacture these new Cold War tensions. Stephen Cohen, easily America’s foremost authority on US-Russia relations, has warned again and again that the political pressures being placed on the Trump administration to maintain escalations with Russia without conceding an inch has placed our species in a situation that is in some ways even more dangerous than those we faced at the height of the Cuban Missile Crisis. If Kennedy had had to negotiate that crisis while being pressured by his entire country to keep escalating tensions with the USSR without yielding an inch, there is no way any terrestrial life would have existed beyond 1962. The Clintonists (along with their neocon buddies on the other side of the aisle) are responsible for creating those pressures.

Jared Kushner Is About to Plunge Into Middle East Diplomacy— Jared Kushner, the presidential adviser who oversees a bulging policy portfolio but operates mainly behind the scenes in his father-in-law’s White House, is stepping out this week, meeting with technology executives on Monday and making a foray into Middle East diplomacy days later. Mr. Kushner will travel to Israel on Wednesday and join Jason D. Greenblatt, President Trump’s chief negotiator in the conflict between the Israelis and Palestinians, for meetings with Prime Minister Benjamin Netanyahu of Israel. He is also scheduled to go to the West Bank for a meeting with Mahmoud Abbas, the president of the Palestinian Authority. White House officials played down the likelihood of a breakthrough during Mr. Kushner’s trip. But his participation is a potent reminder of the importance Mr. Trump has attached to achieving an elusive peace agreement between Israel and the Palestinians. It also demonstrates Mr. Kushner’s determination not to let investigations into the Trump campaign’s alleged ties with Russia, or his own business dealings, distract him from his day-to-day work. A senior administration official said Mr. Kushner’s trip to the Mideast had been planned for several weeks as a way to build on the president’s visit to Jerusalem last month. Several officials said this could be the first trip in which Mr. Kushner and Mr. Greenblatt delved into the nitty-gritty of a possible peace agreement — borders, security and other questions that have bedeviled American peacemakers for decades — by asking both sides to list their priorities for negotiations.

Trump’s Afghanistan Policy Is Clever and Unwise - President Donald Trump’s Afghanistan policy thus far consists of authorizing Defense Secretary James Mattis to send thousands more troops at his discretion, which Mattis intends to do. Politically, outsourcing the decision to the former general is clever, even brilliant -- in the short run. It insulates Trump from criticism if the move fails, and allows him to take credit if by some chance the troops bring greater stability. In the long run, however, there’s a serious flaw in putting the Pentagon in charge of troop numbers. The military establishment has almost no incentive to draw back from fighting a war in progress, and tremendous incentive to step up engagement and efforts. The probable result is mission creep, a particularly grave risk in Afghanistan, where the U.S. is propping up a shaky regime that would probably collapse if U.S. troops were to withdraw.  Before starting to worry about the dangers of a prolonged U.S. engagement in Afghanistan, you have to face a truly shocking fact: We are coming up on 16 years of U.S. presence there. In the near future, the U.S. will be deploying soldiers to Afghanistan who weren’t yet born in the fall of 2001, when the U.S. first invaded.  For purposes of comparison, the Soviet invasion of Afghanistan took place in late 1979, and the Soviets left in 1989. The disaster of the first Anglo-Afghan war lasted from 1839 to 1842, and the second such war, more successful from British perspective, was from 1878 to 1880 -- after which the British withdrew essentially all their troops, exercising their influence indirectly. (A third conflict in 1919, sparked by Afghanistan’s declaration of independence, lasted just a month.) That raises the obvious question: Why is the U.S. still there? Once it became clear during the George W. Bush administration that the U.S. lacked the capacity to transform Afghanistan into a functioning state, democratic or otherwise, why didn’t the U.S. give up its efforts?

Afghanistan: It’s Too Late - When Donald Trump’s secretary of defense, James Mattis, was called before the Senate Armed Services Committee this week to testify about the conflict in Afghanistan, he was unusually blunt: “We are not winning in Afghanistan right now,” he said. The Taliban have been on a dramatic offensive, he acknowledged, the security situation continues to deteriorate, and the Afghan government holds considerably less territory than it did a year ago. In other words, prospects for any sort of positive outcome are as remote as they have been in this sixteen-year war—the longest war in American history.Yet Trump—and Mattis’s—solution to this unwinnable war seems to be once again to send more troops. On Tuesday, Trump announced that the military itself would be given full authority to decide how many troops it needs. (By leaving all decisions in the hands of the military, he has abandoned the usual inter-agency consultations, especially with the State Department.) And Mattis is talking about a review to be completed in July that could add as many as 5,000 troops. It may be too late.  Afghanistan now faces a far deeper crisis than many seem to understand. Warlords and politicians—including cabinet members—are calling for the resignation of President Ashraf Ghani and his security ministers, accusing them of incompetence, arrogance, and stirring up ethnic hatred. There are as many as ten public demonstrations a day in the streets of Kabul, carried out by young people and by relatives of those killed in recent bomb attacks. In early June multiple suicide bombings in Kabul killed over 170 people and wounded some 500. Terrorists managed to get a massive truck bomb into the heavily guarded diplomatic quarter, where it exploded, killing mainly civilians—a clear indication of collusion with security officers. Neither the Taliban nor the Islamic State claimed responsibility. The Taliban have now launched ground offensives to take more territory and to capture the northern city of Kunduz, a city of almost 300,000 that they tried twice last year to seize. If it falls now to the Taliban it would be the first major city they have re-occupied.

Exclusive: Trump administration eyes hardening line toward Pakistan | Reuters: President Donald Trump's administration is exploring hardening its approach toward Pakistan to crack down on Pakistan-based militants launching attacks in neighboring Afghanistan, two U.S. officials tell Reuters. Potential Trump administration responses being discussed include expanding U.S. drone strikes, redirecting or withholding some aid to Pakistan and perhaps eventually downgrading Pakistan's status as a major non-NATO ally, the two officials said, speaking on condition of anonymity. Other U.S. officials are skeptical of the prospects for success, arguing that years of previous U.S. efforts to curb Pakistan's support for militant groups have failed, and that already strengthening U.S. ties to India, Pakistan's arch-enemy, undermine chances of a breakthrough with Islamabad. U.S. officials say generally they seek greater cooperation with Pakistan, not a rupture in ties, once the administration finishes a regional review, due by mid-July, of the strategy guiding the 16-year-old war in Afghanistan. The discussions include officials from across the Trump administration, including the White House and the Defense Department, both of which declined comment on the review before its completion.Precise actions have yet to be decided. But Pakistan's embassy in Washington warned against "scapegoating" Pakistan to explain the stalemate in Afghanistan, pointing instead to Afghanistan's own troubled internal dynamics. It also noted past Pakistani efforts to battle militants and expressed willingness to work with the United States and Afghanistan on border management. "Singling out Pakistan and pinning the entire blame on Pakistan for the situation in Afghanistan is neither fair nor accurate, nor is it borne out by the ground realities," said Abid Saeed, press minister at the embassy. 

Turkey's President Is Furious the US Wants to Arrest His Security Agents -- US authorities on Thursday announced arrest warrants had been issued for 12 members of Turkish President Recep Tayyip Erdogan's security detail for assaulting protesters in Washington last month, sparking a furious response from the Turkish leader. Erdogan said the United States had no right to arrest his guards, who he said were protecting him from "terrorists." The Turkish foreign ministry officially "invited" the US ambassador in for discussions after the announcement. But Washington held that Erdogan's security detail had no justification to attack the small group of Kurdish and Armenian protesters outside the Turkish ambassador's residence on May 16, just after Erdogan met with President Donald Trump at the White House. Nine people were injured, with several going to the hospital for treatment of head injuries, broken teeth, deep cuts and bruises. The charges against the 12, along with six other Turkish-Americans and Turkish-Canadians who joined the melee, "send a clear message that the United States does not tolerate individuals who use intimidation and violence to stifle freedom of speech and legitimate political expression," said State Department spokeswoman Heather Nauert. Erdogan lashed back, accusing US police of having allowed "terrorists" to protest "50 meters from me" during his US visit. "Why would I bring my guards with me to the United States, if not to protect me?" he said in a speech in Ankara, adding that US police "did nothing."

US, China reaffirm alliance on North Korea: report | TheHill: The United States and China have reaffirmed their commitment to a "complete, verifiable and irreversible" denuclearization of the Korean Peninsula, Reuters reported Saturday. President Trump's Secretary of State Rex Tillerson and Defense Secretary James Mattis hosted Chinese officials at the State Department on Wednesday. Tillerson said earlier in the week that he planned to press China on resolving the North Korean crisis. On Saturday, Chinese state media reported that the talks reached consensus. "Both sides reaffirm that they will strive for the complete, verifiable and irreversible denuclearization of the Korean Peninsula," the official Xinhua news agency said. According to Reuters, Trump is expected to meet with China's President Xi Jinping in Hamburg at the G20 summit next month. On Tuesday, Trump tweeted that China’s efforts to halt the North Korean threat have been unsuccessful. “While I greatly appreciate the efforts of President Xi & China to help with North Korea, it has not worked out," Trump said. "At least I know China tried!”

Senators ask administration to probe possible Russian takeover of Citgo | TheHill: Six senators are calling on the secretaries of State and Treasury to review whether a potential Russian takeover of petroleum company Citgo could threaten national security and violate economic sanctions. Citgo, owned by the government of Venezuela, risks defaulting on a loan from Rosneft, a Russian state-owned energy company. Rosneft could take control of Citgo upon default, giving a company with close ties to Russian President Vladimir Putin command of United States infrastructure. The senators, including Senate Finance Committee ranking Democrat Ron Wyden, expressed national security concerns in a Monday letter to Secretary of State Rex Tillerson and Treasury Secretary Steven Mnuchin. “Citgo operates across 19 states, with 48 terminals, interstate oil and gas pipelines, and refineries,” the senators wrote. “Serious questions have been raised regarding the national security risk of Rosneft — a company with close ties to President Putin — assuming control of U.S. energy infrastructure.” The senators also asked Tillerson and Mnuchin to report on whether Rosneft’s acquisition of Citgo’s U.S.-based assets would violate economic sanctions against Russia. 

Inside the West Wing Tug-of-War Over Russia and Ukraine - Vice President Mike Pence and other national-security leaders are dragging President Donald Trump along in a growing effort to hold Russia accountable for illegal actions in Ukraine. For evidence of that just look at how two very different people interpreted Tuesday’s meeting in the Oval Office.As Trump sat for his first photo-op with Ukrainian President Petro Poroshenko, the U.S. Treasury Department unveiled new sanctions aimed at Russian citizens, banks, and other entities that support the Russian soldiers who are – unofficially – attacking the government of Ukraine. After the meeting, a reporter asked Poroshenko whether Trump had discussed the future of the U.S. Russian-sanctions policy. “I think it is obvious. To date, the U.S. adopts additional sanctions almost every day. I consider the position of the United States as a solid, reliable and strategic partner of Ukraine,” said Poroshenko, avoiding any mention of the U.S. president, according to an official readout from his office.Trump, too, declined the opportunity to take credit for the Treasury Department’s decision. The White House readout of the meeting says only that the two leaders discussed “the peaceful resolution to the conflict in eastern Ukraine and President Poroshenko’s reform agenda and anti-corruption efforts.”That fits with a pattern. In a now-infamous May 10 meeting in the Oval Office, Trump told Russian Foreign Minister Sergey Lavrov and Ambassador Sergey Kislyak that his “critics cared about the issue” of Ukraine. Trump then asked “the Russians to help resolve the dispute,” an unnamed official told the New York Times.

Trump Cuba Policy Reversal: More Sound and Fury, Signifying…. No Mucho -- naked capitalism by Jerri-lynn Scofield -- By now, regular readers should be familiar with Trump’s drill. First off, there’s a splashy announcement of a policy change: this time, it’s rolling back his predecessor’s Cuba initiative. This change is often made by a legally dubious executive order,  or in a speech, or in some other non-binding form– certainly not by initiating– let alone completing– the often messy legislative process. And then, when the dust is settled and  the rhetoric is parsed, the muted changes end up signifying– well, while I may not go quite as far as the Bard, but I will say: no mucho. So, first off, what has Trump done? On Friday,  Trump made a speech in Miami to an audience of Cuban exiles, Remarks by President Trump on the Policy of the United States Towards Cuba. The takeaway from that speech were policy changes Trump announced that reversed his predecessor’s detente policy first launched in 2014, and cemented during a presidential visit to the island in 2016. From the White House’s June 16 Fact Sheet on Cuba Policy :  Most significantly, “the policy reaffirms the United States statutory embargo of Cuba and opposes calls in the United Nations and other international forums for its termination. The policy also mandates regular reporting on Cuba’s progress—if any—toward greater political and economic freedom”   What does this mean? Well, first off, some accounts suggest that the Trump policy will backfire, and instead of improving protection for human rights and promoting Cuban policy and leadership changes that the US might applaud, has actually “dismayed moderates who were working with pro-engagement Americans but now fear association with a policy of open hostility toward the communist system could make them targets for repression”, as reported in this New York Times account, Tougher Trump Line Toward Cuba Delights Hardliners on Island.

Who Holds the DEA Accountable When Its Missions Cost Lives? -An agent in Dallas had persuaded the cartel’s leading cocaine distributor in East Texas to hand over trackable cellphone identification numbers for the group’s most wanted kingpins, in particular Miguel and Omar Treviño, a murderous pair of brothers whose viciousness had earned them top spots among the DEA’s most-wanted.It was an intelligence coup, the kind of information that comes along once in a very lucky career. With those numbers, authorities could track the brothers’ movements and ultimately capture them. But the DEA made a decision with fatal consequences. Against the wishes of the lead agent on the case — whose informant specifically warned of the potential for bloodshed — the DEA told a Mexican federal police unit with a long history of leaking to traffickers that it had the information.  Within days, the Zetas were, in turn, told that the DEA was onto their leaders. The Treviño brothers guessed immediately which of the cells in their organization had betrayed them and began hunting for the snitches. When the suspected traitors couldn’t be found, the traffickers went after anyone connected to them.Dozens, possibly hundreds, of people were killed and kidnapped in and around Allende, a quiet ranching town in the northern Mexican state of Coahuila, about 40 minutes from the U.S. border. Zetas gunmen grabbed a 15-year-old high school football player, who was hanging out with friends whose parents ran a health club where one of the suspected snitches lifted weights. They took an 81-year-old woman, as well as her 6-month-old great-grandson. One family lost nearly 20 members.Black clouds spewed from a local ranch where the cartel turned one building into a makeshift crematorium to burn the bodies of those they had killed.

US in trade talks with Asian nations to replace TPP, commerce secretary says | South China Morning Post: The US has started trade talks with multiple countries in Asia to find an alternative to the failed Trans-Pacific Partnership, US Commerce Secretary Wilbur Ross said. “We expressed a willingness on the US’ part to indulge in bilateral talks with Japan” on a trade agreement, Ross told reporters at the annual SelectUSA investment conference in Washington, organised by the Commerce Department. “We’ve also had some very, very preliminary scoping sessions with some of the other individual nations.”Ross declined to specify with which other countries the US has resumed talks, saying: “We like to announce things when it’s agreeable to the other nation. The Japanese have acknowledged our overture. So far, I don’t think other nations have.”US President Donald Trump signed an executive order withdrawing the US from TPP on his first day in office, following through on a campaign pledge he said would help stem job losses. That move was at odds with the wishes of most US state leaders, Scott Pattison, CEO of the National Governors Association, said in a separate press briefing at SelectUSA. “Most governors were very pro-TPP, Republicans and Democrats,” Pattison said. “They’re not going to get directly involved in the negotiations because they know their role and it’s not appropriate.“On the other hand, though, what they’d like to push, because most of them were for TPP, they want to ensure there’s as much trade and investment activity between the states and other countries as possible.” The other 11 members of the regional trade pact, which doesn’t include China, agreed to continue talks aimed at keeping TPP intact, even without the US.

Double Time to Trade War? -  Menzie Chinn - From Politico’s Morning TradeSome Democratic lawmakers could soon press the administration over concerns that a potential Trump decision to restrict steel imports to protect national security could be challenged at the World Trade Organization if the Commerce Department does not provide a convincing basis for any action, Morning Trade has learned.  The United States last used the Section 232 law to consider restricting imports in 2001, at the request of two congressmen. In that investigation, the Bush administration held two public hearings and took eight months to complete that inquiry. It also sent surveys to about 175 U.S. iron ore and semi-finished steel producers and potential consumers, and conducted site visits at places associated with the production, shipment, and consumption of iron ore and semi-finished steel. The Trump administration has held one hearing in the current investigation looking at the possibility of restricting all steel imports and has been striving to complete the probe in less than three months.   So, as I discussed in this post, the use of Section 232 is not your plain vanilla brand of protection. As Chad Bown has characterized it, it’s the “nuclear option” of protectionist trade measures, likely to spur retaliation. From Bloomberg: [EU Trade Commissioner] Malmstrom said any general U.S. measure to limit steel imports would affect Europe dramatically, potentially threatening numerous jobs in the EU. A European response could entail a complaint to the World Trade Organization and “other things,” she said. “We will retaliate, of course,” said Malmstrom, who declined to elaborate.  Are the national security concerns valid? Not really, as discussed in this post. And will the measures hit China? Or will it primarily harm our allies? From WaPo: Trump administration officials have argued that a spike in production by China has hammered the U.S. steel industry. They allege that China floods global markets with cheap steel, making it harder for U.S. producers to compete. However, since the United States already imposes restrictions on Chinese imports of steel, any new barriers are likely to have more of an effect on close U.S. allies, such as Canada, South Korea, Mexico, Japan and Germany, So, our current allies will be most affected (well, in my interpretation; I suspect President Trump ranks Russia as a closer ally than Canada.)

Paul Ryan: We will get tax reform done in 2017 - House Speaker Paul D. Ryan vowed Tuesday that Congress will approve a broad-based overhaul of the federal tax code this year, laying down a firm deadline for Republicans as he tries to smooth over intraparty differences that have plagued the effort thus far.The White House on Tuesday also endorsed an aggressive timetable. Vice President Mike Pence said Americans can expect the largest tax cut since the Reagan administration by the end of the year.However, Mr. Ryan said the reform package must be permanent, which could force Republicans to obey parliamentary rules that would constrain the size and scope of the overhaul.Setting an optimistic tone, Mr. Ryan said neither policy spats nor controversies involving President Trump will derail Republican objectives. Speaking to the National Association of Manufacturers, Mr. Ryan didn’t try to solve the policy disputes, but instead looked to infuse fresh energy into the process and to reassure corporate leaders who have begun to doubt Republicans’ ability to deliver on major campaign promises.“We are going to get this done in 2017,” the Wisconsin Republican said in what his office billed as his first major speech on the issue. “We have to get this done in 2017. We cannot let this once-in-a-generation moment slip by.”Mr. Ryan said “defenders of the status quo” are counting on lawmakers to lose their nerve or delay the effort to lower individual and corporate income tax rates.He said one reason to make the reform permanent is to avoid the experience of the Bush-era tax cuts, which expired after a decade.“Businesses need to have confidence that we won’t pull the rug out from under them,” he said.But significant disputes remain. One of them is a trillion-dollar border tax favored by Mr. Ryan that has met a cool reception from the White House, Senate Republicans and even some in the House Republican conference. Mr. Ryan said in a CNBC interview after his speech that the “border adjustment” tax isn’t dead, but he acknowledged that a full, immediate 20 percent tax on imports wouldn’t work.

Richest Americans Will Control 70% Of Country's Wealth By 2021, BCG Says - With US stock benchmarks trading just below record highs, and Treasury yields not too far from the all-time lows reached last summer, the gulf between the world’s wealthy elite – those 18 million households worldwide with more than $1 million in assets – and everybody else is rapidly widening.  According to a new study by Boston Consulting Group via Bloomberg, these households - with a total head count of roughly 70 million people, or about 1% of the world’s population - control 45 percent of the $166.5 trillion in wealth. By 2021, they will control more than half, suggesting that, while wealth inequality in the rest of the world is simply accelerating, in America, it’s gone into overdrive. Right now, 63 percent of America’s private wealth in the hands of U.S. millionaires and billionaires, BCG said. By 2021, their share of the nation’s wealth will rise to an estimated 70 percent. “The share of income going to the top 1 percent in the U.S. has more than doubled in the last 35 years, after dropping in the decades after World War II (when the rich were taxed at high double-digit rates). The tide shifted in the 1980s under Republican President Ronald Reagan, a decade when “trickle-down economics” saw tax rates for the rich fall, union membership shrink, and stock markets spike.” In its report, BCG puts the global rate of wealth creation in 2015 and 2016 at 5.3 percent, though the consulting firm expects it to accelerate to about 6 percent annually for the next five years. Those gains will accrue almost exclusively to the wealthiest Americans, while wealth held by everyone else is just barely growing. Of course, there’s a caveat: In America, most of these gains exist only on paper. More than 70% of new wealth creation is derived from the rising value of rich investors’ portfolios. The rest is what BGC describes as “new wealth creation” aka real money earned by workers and entrepreneurs.

 Trump says he doesn't want a 'poor person' handling economy --Donald Trump has said he doesn’t want “a poor person” to hold economic roles in his administration as he used an Iowa rally to defend his decision to appoint the wealthy to his cabinet. The US president told a crowd on Wednesday night: “Somebody said why did you appoint a rich person to be in charge of the economy? No it’s true. And Wilbur’s [commerce secretary Wilbur Ross] a very rich person in charge of commerce. I said: ‘Because that’s the kind of thinking we want.’” The president explained that Ross and his economic adviser Gary Cohn “had to give up a lot to take these jobs” and that Cohn in particular, a former president of Goldman Sachs, “went from massive pay days to peanuts”.  Trump added: “And I love all people, rich or poor, but in those particular positions I just don’t want a poor person. Does that make sense?” He made the comments as he toured the state with agriculture secretary Sonny Perdue and Ross partly to celebrate a Republican congressional victory in Georgia being seen as an early referendum on his presidency. “We’re 5-0 in special elections,” said Trump in front of a boisterous crowd that packed a downtown arena. “The truth is, people love us ... they haven’t figured it out yet.”

Dems threaten to gum up Senate over 'secret' ObamaCare bill | TheHill: Senate Democrats are threatening to grind the Senate to a halt in protest of Republicans crafting their bill to repeal and replace ObamaCare behind closed doors. "If Republicans won’t relent and debate their healthcare bill in the open for the American people to see, then they shouldn’t expect business as usual in the Senate," said Senate Minority Leader Charles Schumer (D-N.Y.). Schumer said Republicans are "drafting this bill in secret because they’re ashamed of it, plain and simple." A senior Senate Democratic aide said that starting on Monday evening, Democrats will object to "all unanimous consent requests in the Senate," though there could be a narrow exception for honorary resolutions." If Democrats stick to the tactics, they will be able to block any committees from meeting after the Senate has been in session for more than two hours. Democrats are also holding a late-night talkathon from the Senate floor on Monday night, with senators scheduled to give speeches against the GOP effort until at least midnight. Democrats are expected to make a series of unanimous consent requests on Monday evening on the House-passed ObamaCare repeal and replacement bill, including trying to send it to a Senate committee and "forcing Republicans to publicly defend their 'no hearings strategy,' " according to the senior Senate Democratic aide. They have hounded Republicans over their legislation, which is still being hashed out in a series of closed-door meetings. "These are merely the first steps we’re prepared to take in order to shine a light on this shameful TrumpCare bill and reveal to the public the GOP’s true intentions: to give the uber-wealthy a tax break while making middle class Americans pay more for less healthcare coverage," Schumer said. 

GOP considers canceling August recess to salvage agenda | TheHill: Alarmed by the stalemate on healthcare reform, lack of progress on tax reform and appropriations bills that are far behind schedule, Republican lawmakers across Congress are increasingly willing to consider canceling the month-long August recess. Senate Republican negotiators reported that they are not close to a deal on healthcare reform and that scheduling a vote by July 4, which Senate Majority Leader Mitch McConnell (R-Ky.) has pushed, is likely unrealistic. That impasse has held up work on a budget resolution, which is necessary to move tax reform and the annual appropriations bills. Once Republicans vote on a budget resolution for 2018, it will wipe out the special vehicle they plan to use to pass healthcare reform with a simple majority vote — a vehicle that was set up by the budget resolution for 2017. Lawmakers calculate there are only 45 legislative days until the end of the fiscal year, on Sept. 30. With the party still sharply divided on healthcare and tax reform, it looks increasingly possible that Republican lawmakers will leave town in July for a monthlong break without any major accomplishments under their belts. “I think there’s a majority that probably supports being here,” said Sen. David Perdue (R-Ga.), referring to the possibility of canceling or cutting short the August recess. He said GOP lawmakers need to make progress on the budget and spending bills to avoid a government shutdown scenario in September, as well as progressing on tax reform. “I don’t want to wait until the last week to be forced into a [continuing resolution]. That’s ridiculous,” 

New study says House GOP healthcare bill would lead to the loss of almost 1 million jobs in 10 years - A new study from the Commonwealth Fund and George Washington University presented some unflattering potential effects from the enacting of the American Health Care Act.  According to the study, the US economy would see a short-term boost from the repeal of the Affordable Care Act's taxes. But the decrease of federal spending on healthcare under the GOP's American Health Care Act would cause harm in the long-run.  From the report:  "It initially raises the federal deficit when taxes are repealed, leading to 864,000 more jobs in 2018. In later years, reductions in support for health insurance cause negative economic effects. By 2026, 924,000 jobs would be lost, gross state products would be $93 billion lower, and business output would be $148 billion less. About three-quarters of jobs lost (725,000) would be in the health care sector." Put another way, there would be two primary effects: Aggregate employment would decrease, leading to a drag on economic activity. Currently, the number of people working in the healthcare sector has steadily increased due to a combination of the lower uninsured rate (people are more likely to seek care if they have coverage) and the aging Baby Boomer population. With more people seeking care, healthcare providers have boosted employment and the segment has been one of the biggest gainers since the financial crisis. Under the AHCA, the study said, cuts to Medicaid and federal subsidies for people to access health insurance would lead to a curtailing of the employment growth as federal funds dried up and fewer people utilized care services.  "Healthcare has been one of the main areas of job growth in recent years," the report said. " Under the AHCA, the sector would lose jobs immediately, with a loss of 24,000 jobs in 2018. By 2026, 725,000 fewer health sector jobs would exist. This would be a major reversal from current trends."

GOP Health Bill Kept Secret From Senators Assigned to Write It -- One of the Senate Republicans charged with negotiating an Obamacare replacement expressed frustration Tuesday with the secret process, saying that even he hasn’t seen the proposal set to be released in two days for a possible floor vote next week. “I haven’t seen it yet, either,” said Senator Mike Lee of Utah amid complaints by other Republicans that they don’t know what’s in the health-care measure being drafted by their own party’s leaders. Majority Leader Mitch McConnell said he plans to release a "discussion draft" Thursday and that it will go to the Senate floor for a vote "likely next week." A week or so to examine the bill isn’t enough, said Lee in a video posted on his Facebook page. As one of about a dozen members of a health-care working group, he criticized the closely held process of drafting the measure. "Even though we thought we were going to be in charge of writing a bill within this working group, it’s not being written by us," Lee said. "It’s apparently being written by a small handful of staffers for members of the Republican leadership in the Senate. So if you’re frustrated by the lack of transparency in this process, I share your frustration. I share it wholeheartedly.” At least half a dozen Senate Republicans say they’re not sure they can support the measure. “I’m very eager to see the language,” Senator Susan Collins of Maine told reporters in Washington, adding that she’s concerned about the possibility of a vote on the Obamacare repeal measure next week. “I don’t think it gives enough time to thoroughly analyze the bill, but we’ll see when it comes out.” Senators Jeff Flake of Arizona and Pat Toomey of Pennsylvania also said they’re withholding judgment. Arizona Republican John McCain, asked whether he’s seen the bill, said, "No, nor have I met any American that has. I’m sure the Russians have been able to hack in and gotten most of it." 

In an Aging Nation, Single-Payer Is the Alternative to Dying Under Austerity -- Every day about 10,000 people turn 65 in the United States, and the number of people over the age of 85 will more than triple by 2050. As a result, the demand for long-term health care services and end-of-life care will surge in the coming decades, increasing pressure on a system that is already suffering from high costs and workforce shortages. Unless policymakers make serious changes to how we fund and operate the health care system, the process of confronting chronic illness and death in the United States could become increasingly expensive and difficult for everyone but the very wealthy. This isn't just bad news for the aging baby boomer generation, which is expected to increase the number of people over the age of 65 in the US from 48 million to 88 million by 2050. In the decades to come, many millennials may find themselves navigating the current health care system's complicated mix of government benefits, out-of-pocket costs and private insurance offerings with their elderly parents. Meanwhile, the Republican plan to repeal the Affordable Care Act (ACA) that passed the House last month would gut ACA provisions that kept insurance companies from gouging older customers and cut $839 billion from Medicaid over the next decade. The bill would increase private insurance rates for older people with lower incomes and leave 5.1 million people between the ages of 50 and 65 without insurance by 2026, according to the Kaiser Family Foundation. Despite the popular misconception that Medicare covers all of seniors' health care needs, millions of Americans over 65 are also enrolled in Medicaid.  The proposed cuts to Medicaid are generally unpopular, and the Republican House bill has slumped in the polls. The repeal effort has recently stalled in the Senate due to deep divisions among Republicans. Amid this crucial resistance, a renewed push has also emerged for the creation of something different: a single-payer system. A House bill for a "Medicare for All" health plan has more co-sponsors than ever among progressive Democrats, and grassroots activists are rolling out campaigns across the country. When it comes to the issue of how to best serve elderly patients, advocates say guaranteeing health coverage for everyone would help prepare the system for an aging nation.

After weeks of secrecy, Senate to unveil healthcare bill | Reuters: U.S. Senate Republicans plan to unveil the text of their draft healthcare bill on Thursday as senators struggle over issues such as the future of the Medicaid program for the poor and bringing down insurance costs. Republicans in the chamber have been working for weeks behind closed doors on legislation aimed at repealing and replacing major portions of the Affordable Care Act, former Democratic President Barack Obama's signature healthcare law, popularly known as Obamacare. The effort has been plagued from the start by tensions between moderates and conservatives, which surfaced again on Tuesday. Democrats have also criticized the behind-the-scenes meetings, staging a protest on the Senate floor on Monday. "Republicans are writing their healthcare bill under the cover of darkness because they are ashamed of it," Senate Democratic leader Chuck Schumer charged. President Donald Trump campaigned on a promise to repeal Obamacare. The 2010 law extended insurance coverage to millions of Americans through both subsidized private insurance and an expansion of Medicaid. The Republican-controlled House of Representatives narrowly approved its version of repeal last month. Trump has urged the Republican-led Senate to pass a more "generous" bill than that approved by the House, whose version he privately called "mean," according to congressional sources. An estimated 23 million people could lose their healthcare under the House plan, according to the non-partisan Congressional Budget Office. Senate Majority Leader Mitch McConnell said on Tuesday the Senate healthcare bill would be different from the House version, but he did not elaborate.

White House officials to be briefed on Senate ObamaCare plan | TheHill: A group of White House officials are heading to Capitol Hill Wednesday night for a briefing on the Senate Republicans' healthcare plan. Senate leaderships staffers plan to walk President Trump's representatives through the proposal, according to a White House official. The meeting comes a day before Senate GOP leaders are set to unveil the plan, which was crafted behind closed doors. The conversation could also touch on what role, if any, senators want Trump to play in selling the bill or whipping votes. Thus far, senators have held the measure very close to the vest. White House press secretary Sean Spicer on Tuesday couldn't say whether Trump or his staff had seen the proposal. But on Wednesday, Trump spokesperson Lindsay Walters said that "the appropriate individuals have seen the bill." "The president’s legislative team has been working with the Senate leadership team as well as members on the Senate side. And the president has received a full brief from his legislative team," she told reporters aboard Air Force One.

Abortion Adds Obstacle as Republicans Plan to Unveil Health Bill -- NYT  Abortion flared up Wednesday as the latest hot-button issue to complicate passage of a bill to repeal and replace the Affordable Care Act, which Senate Republican leaders hope to unveil on Thursday and pass next week. The repeal bill approved last month by the House would bar the use of federal tax credits to help purchase insurance plans that include coverage of abortion. But senators said that provision might have to be jettisoned from their version because of complicated Senate rules that Republicans are using to expedite passage of the bill and avoid a filibuster.If that provision is dropped, a bill that has already elicited deep misgivings among moderate Republicans — and stiff resistance from Democrats, health care providers and patient advocacy groups — could also generate concern among abortion opponents, as well as conservative lawmakers.Further complicating the measure’s prospects, insurance companies, which took a leading role in the health care fights of 1993-94 and 2009-10 but have been conspicuously quiet this year, released a blistering letter objecting to Republican plans to remake Medicaid and cut its funding. The changes being considered in Congress could “amount to a 25 percent shortfall in covering the actual cost of providing care to our nation’s neediest citizens,” the top executives of 10 insurance companies wrote this week. “These amounts spell deep cuts, not state flexibilities, in Medicaid.” As senators struggle to develop a health care bill, their handiwork appears to be too moderate for some Senate conservatives and too conservative for some Senate moderates. The latest version, without the abortion-coverage prohibition and with steep Medicaid cuts, may prove unacceptable to some in both camps.

Ivanka Trump to meet with GOP senators on paid family leave: report | TheHill: Ivanka Trump will reportedly meet with Sens. Deb Fischer(R-Neb.) and Marco Rubio (R-Fla.) Tuesday to talk about paid family leave policy. Politico reported that Ivanka Trump, who serves as a senior advisor to President Trump, will meet with the senators to discuss the policy issue that she has pressed inside her father’s White House. Fischer and Rubio have also been leading voices within the GOP on the issue. The Trump White House has included in its budget proposal six weeks of paid family leave as part of unemployment benefits. Ivanka Trump reportedly pushed to include lines about paid family leave in the president’s joint address to Congress in February. Trump in the speech said his administration wants to “help ensure new parents have paid family leave.”

Senate finally unveils secret health care bill -- The closely guarded Senate health care bill written entirely behind closed doors finallybecame public Thursday in a do-or-die moment for the Republican Party's winding efforts to repeal Obamacare. The unveiling of the 142-page bill marks the first time that the majority of senators get a look at the plan to overhaul America's health care system. With Majority Leader Mitch McConnell pressing ahead for a vote next week, senators now only a handful of days to decide whether to support or vote against the bill.Four conservative Republican senators -- Rand Paul, Ted Cruz, Ron Johnson and Mike Lee -- said they opposed the current version. And key votes such as Sens. Dean Heller and Susan Collins have also withheld support."As currently drafted, this bill draft does not do nearly enough to lower premiums," Cruz said in a statement obtained by CNN. "That should be the central issue for Republicans -- repealing Obamacare and making health care more affordable. Because of this, I cannot support it as currently drafted, and I do not believe it has the votes to pass the Senate.The bill would repeal Obamacare's individual mandate, drastically cut back federal support of Medicaid, and eliminate Obamacare's taxes on the wealthy, insurers and others.President Donald Trump praised the bill Thursday -- though he acknowledged that changes were likely coming. "It's going to very good," Trump said at the White House "A little negotiation but it's going to be very good." With the exception of some key changes -- notably keeping Obamacare's subsidies to help people pay for individual coverage -- the bill is similar to the version of the House measure that passed last month which Trump has since called "mean" despite having a Rose Garden celebration with House Republicans.Democrats blasted the bill, using Trump's "mean" judgment of the House bill."The Senate bill needed heart, the way this bill cuts health care is heartless," said Minority Leader Chuck Schumer. "This is a nasty bill and they're trying to cover it up with little things here and there."

McConnell’s AHCA Bill - I have not had a chance to read through this; but, I thought I would put this out here for all of us to read, Senate Version AHCA McConnell

The Senate health-care bill is even worse than the House version - by Jared Bernstein - The Senate Republicans just released their version of repeal-and-replace Obamacare. I can see why they negotiated in secret. While I fear there’s enough camouflage in the bill to give alleged “moderate” Republicans the cover they need to support the bill, this legislation is even worse for affordable, quality health-care coverage than the House bill.  For a quick rundown, check out this side-by-side comparing the Affordable Care Act to the House and Senate bills. The big picture remains the same: large cuts in subsidies and especially in Medicaid that partially pay for big, regressive tax cuts, as tax expert Chye-Ching Huang shows here. For a bit of perspective, Brandon DeBot (our colleague at the Center on Budget and Policy Priorities) points out that $33 billion of the tax cuts that accrue to the 400 richest households happens to equal the total of the Medicaid cuts from four states.   Compared with the ACA, the new bill both cuts the premium subsidies for those who purchase coverage in the non-group market, and lowers the eligibility threshold for such assistance. As Sarah Kliff from Vox puts it: “The Senate bill will tether the size of its tax credits to what it takes to purchase a skimpier health insurance plan than the type of plans Affordable Care Act subsidies were meant to buy. Essentially, these tax credits buy less health insurance.” Like the House bill, private insurers can charge older customers as much as five times more than they charge younger customers, up from three times under the ACA. But my headline point — this bill is worse than the House bill — is in regard to Medicaid.  Medicaid is much more important: It covers 20 percent of the population, almost three times that of the non-group market.  Medicaid covers just under 50 percent of all births (!), about two-thirds of all nursing home residents, 40 percent of all poor adults — 74 million benefit from Medicaid or CHIP (kids’ version). And the Senate bill cuts Medicaid more deeply than the House bill. Over the long term, a lot more deeply. Both the House and Senate bills roll back the ACA’s Medicaid expansion, though the Senate bill pushes this back a couple of years to placate some Republican governors in states that took the expansion. But it’s what comes next that makes the Senate bill especially cruel. Starting in 2021, Medicaid goes from a federal-state financing partnership that expands with need, to a block grant that doesn’t. Funding would be capped at a set amount per Medicaid recipient, and starting in 2025 — that year is very important, as I’ll show in a moment — the cap would grow much more slowly than current projections for Medicaid spending per beneficiary, and considerably more slowly than the House bill.

Senate Health Care Bill Includes Deep Cuts to Medicaid -- Senate Republicans, who have promised a repeal of the Affordable Care Act for seven years, took a major step on Thursday toward that goal, unveiling a bill to make deep cuts in Medicaid and end the law’s mandate that most Americans have health insurance. The 142-page bill would create a new system of federal tax credits to help people buy health insurance, while offering states the ability to drop many of the benefits required by the Affordable Care Act, like maternity care, emergency services and mental health treatment. But the measure landed in rough seas ahead of a vote that Senator Mitch McConnell of Kentucky, the majority leader, wants next week. Four conservative senators, Rand Paul of Kentucky, Ted Cruz of Texas, Mike Lee of Utah and Ron Johnson of Wisconsin, announced that they would oppose it without changes — more than enough to bring it down. “It does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs,” the four wrote in a joint statement. More moderate Republican senators, such as Dean Heller of Nevada, expressed their own qualms, as did the American Hospital Association, the American Cancer Society Cancer Action Network and the Association of American Medical Colleges. “We are extremely disappointed by the Senate bill released today,” the medical school association wrote. “Despite promises to the contrary, it will leave millions of people without health coverage, and others with only bare bones plans that will be insufficient to properly address their needs.” Once promised as a top-to-bottom revamp of the health bill passed by the House last month, the Senate bill instead maintains its structure, with modest adjustments. The Senate version is, in some respects, more moderate than the House bill, offering more financial assistance to some lower-income people to help them defray the rapidly rising cost of private health insurance. 

Senate Health Care Bill Gets Lukewarm White House Reaction: President Donald Trump and his top aides responded to the health care overhaul bill crafted by Senate Republican leaders with striking silence, even after Vice President Mike Pence said a final vote must happen in the next few weeks. The White House did not issue any paper statement about the bill, either under Trump’s name or that of any senior official. And when Principal Deputy Press Secretary Sarah Huckabee Sanders briefed reporters a few hours after the bill was made public, she declined to discuss any of its contents. In fact, she said there are no plans — for now, at least — for the president to comment on any provision in the Senate bill. She did say Trump is “pleased to see the process moving forward” — and the “process” is the only thing she would discuss as reporters tried again and again to glean clarity on the president’s views of the legislation. Sanders described the president as mostly focused on “the final product,” which, should the Senate pass an amended version of the bill unveiled Thursday, would be the product of a House-Senate conference committee’s work to hammer out differences in their bills. “We’re looking for the best bill possible, and we’re going to continue being part of technical assistance, providing that with both House and Senate members,” she said.

G.O.P. Health Plan Is Really a Rollback of Medicaid -- NYT --Tucked inside the Republican bill to replace Obamacare is a plan to impose a radical diet on a 52-year-old program that insures nearly one in five Americans.The bill, of course, would modify changes to the health system brought by the Affordable Care Act. But it would also permanently restructure Medicaid, which covers tens of millions of poor or disabled Americans, including millions who are living in nursing homes with conditions like Alzheimer’s or the aftereffects of a stroke.“This is the most consequential change in 50 years for low-income people’s health care,” said Joan Alker, the executive director of the Center for Children and Families at Georgetown University. “This is a massive change that has hardly been discussed.”Since its founding, Medicaid has operated as a partnership between the federal government and the states. Each pays a share of patients’ medical bills, with no overall limit on spending. The American Health Care Act would try to slim down the federal share of that spending, by limiting how much the federal government would pay for each person enrolled in the program. The Senate version of the legislation, expected this week, is likely to make the payments still leaner in later years.The results, according to independent analyses, would be major reductions in federal spending on Medicaid over time. States would be left deciding whether to raise more money to make up the difference, or to cut back on medical coverage for people using the program. The Congressional Budget Office estimates that the changes would lead to a reduction in spending on Medicaid of more than $800 billion over a decade. (That figure also includes additional cuts to the Obamacare Medicaid expansion.) Medicaid is the country’s largest government health care program, covering more Americans than its better-known sibling, Medicare.

Medicaid cuts in the Senate healthcare bill are going to hit some states hard – here’s who will feel it -- Senate Republicans have released their version of a plan to repeal and replace Obamacare. The Senate's plan, like one passed by the  House of Representatives, rolls back many of the provisions of Obamacare, including taking deep cuts from Medicaid program. Under Obamacare, formally known as the Affordable Care Act, states were eligible to expand their Medicaid programs — providing health insurance to low-income people. For states that opted into the expansion, people whose household incomes were up to 138% of the federal poverty level could qualify for coverage.  Under the Senate's bill, titled the Better Care Reconciliation Act, that expansion would be phased out, meaning those who gained coverage through the expansion would be without once again, though they could access coverage through the individual insurance market.  To get a better sense of what that would mean on a state-by-state basis — and who might be hardest-hit by a rollback — we charted out some of the key aspects of Medicaid and the expansion under the ACA.  As of 2017, 31 states and Washington, D.C. adopted the Medicaid expansion.   Through that expansion, millions have gained coverage. Here's a look at the rate of enrollment per 100,000 people of adults in each state who gained coverage under the expansion in the first quarter of 2016 alone. Under the Senate bill, these enrollees would no longer be covered after 2023.    The bill also scales back federal funding for Medicaid — which is more than half the spending for the program at the state level.  That would leave states — which also fund the program — with fewer resources. Here's a breakdown of the percentage of federal funding each state receives, with those in dark blue receiving the most support. Ultimately it's these dark blue states that are most likely to feel the cuts being proposed by Republicans.

Senate health bill could leave millions uninsured, increase costs for sick, seniors - The Senate health care bill to replace the Affordable Care Act would likely cause millions of Americans to lose their Medicaid and private insurance marketplace coverage. It also could make coverage more expensive for many sicker, older and low-income individuals. The closely guarded draft of the Senate legislation was released Thursday morning, revealing some significant revisions to the widely panned American Health Care Act that narrowly passed the House of Representatives in May – but staying in line with the Republican push to cut taxes and phase out Medicaid expansion.Negotiated in secret by a hand-picked group of 13 male senators with little input from patient advocacy groups, hospitals and care providers, the legislation hews closely to the AHCA by cutting subsidies that help purchase marketplace insurance, phasing out the Medicaid expansion and proposing even deeper cuts to Medicaid than the ten-year, $834 billion reduction sought in the House legislation. The legislation, named the Better Care Reconciliation Act, also would abolish most of the taxes that funded the Affordable Care Act’s coverage expansion. The hits to lower-income, sick and older Americans, coupled with the secrecy, haste and lack of debate that surrounded the Senate bill’s creation, will make it hard for moderate Republicans to vote for the measure in a possible floor vote next Thursday. Senate Majority Leader Mitch McConnell can afford to lose just two Republican votes, and quite a few already are skeptics. Even if the legislation does eventually pass the Senate, it will face tough sledding in the House, where a more conservative version barely passed in May. A Congressional Budget Office analysis of the Senate bill’s cost and impact is expected next week. The repeal legislation that passed the House of Representatives, the American Health Care Act, would leave 23 million people without health coverage and slash Medicaid’s budget by $834 billion over ten years, the CBO found.   Working with researchers from Harvard University, the liberal Center for American Progress estimates that 18,000 to 27,700 more people will die by 2026 because of coverage reductions under the Senate bill.

Moving in the Wrong Direction — Health Care under the AHCA - NEJM - The AHCA would change the health care system in five major ways. Two would primarily affect Medicaid. The legislation would substantially reduce federal support to states that expanded Medicaid under the Affordable Care Act (ACA) to nonelderly individuals with incomes up to 138% of the federal poverty level. The AHCA would not only roll back the ACA’s Medicaid expansion, but would also cap the amount of federal funding that states could receive per Medicaid enrollee. The cap would be updated annually on the basis of a health care price index that would not accurately capture either national trends in per capita health costs or trends in any particular state, resulting in large reductions in federal funding for many states, particularly in the long run.2The other three major provisions would primarily affect private insurance. The AHCA would immediately repeal the ACA’s requirement that individuals who do not qualify for specified exemptions show that they have health insurance or pay a penalty. It would also repeal the ACA’s premium tax credit and cost-sharing reductions for people purchasing coverage on the individual insurance market. These subsidies would be replaced with a new tax credit that would be less generous overall and that, unlike the ACA’s subsidies, would not adjust for differences in the local cost of coverage, would not fully adjust for differences in premiums based on age, and would not vary with income (except for phasing out at high income levels). Many lower-income people, older people, and people living in high-cost areas would receive much less assistance, while some higher-income people, younger people, and people in low-cost areas would receive more assistance.3 Finally, the AHCA would allow states to waive the ACA’s requirement that individual and small-group plans cover a basic set of “essential health benefits” and its individual-market community-rating provisions, which bar insurers from varying premiums on the basis of health status. The AHCA community-rating provision would ostensibly apply only to people with a recent gap in coverage, but both the CBO and a prior Brookings Institution analysis concluded that states could use such waivers to unravel community-rating protections marketwide, including for people with no gap in coverage.4

The Senate GOP's backdoor Obamacare rollback: Buried deep in the 142 pages of the Senate’s new health care bill is an immense reform that could pave the way for a new rollback of parts of the Affordable Care Act—one that takes place state by state, rather than in Washington. Although the bill preserves most of the consumer protections written into the 2010 law, it also contains a provision that allows states effectively to waive many of them, and gives them a financial incentive to do so. The bill dramatically expands a policy built into Obamacare that lets states apply for waivers to loosen the law's insurance requirements. And although it will likely receive less attention than the bill's Medicaid reforms or tax cuts, the new bill loosens the waiver rules in way that could completely reshape the individual insurance market, allowing states to drop almost every major Obamacare insurance regulation as long as it doesn’t increase the federal deficit—with almost zero oversight from the federal government. Everything from the requirement that insurers cover maternity care to protections for people with pre-existing conditions could be at stake. The waivers are technically known as “Section 1332 waivers,” for the section of the Affordable Care Act that allowed states to request exemptions from a long list of ACA rules. These include the requirement that individuals buy insurance; the tax credits to help buy insurance on state exchanges; the “essential health benefits” that insurers must cover; and limits on how much consumers must pay out-of-pocket each year. The waiver program was intended to let states experiment with different designs of their insurance markets—changing the structure of the subsidies, or requiring insurers to cover different benefits—within the basic parameters of the law. But Section 1332 wasn’t originally designed as a loophole for states to ignore the law’s regulations. Instead, the law contained four so-called “guardrails” to ensure every American had access to quality insurance. A waiver proposal had to provide coverage as comprehensive as that under the ACA; provide protection against out-of-pocket costs as under the ACA; cover a comparable number of people as the ACA; and not increase the federal deficit. 

The waivers in the Senate health bill are crazy --From my latest at Vox, on the Better Care Reconciliation Act of 2017: The Senate bill retains [the ACA’s] waiver provision—but removes the guardrails that ensured state-based alternatives would offer strong coverage. Under the Senate bill, to get a waiver a state doesn’t have to demonstrate anything about coverage. Instead, it just has to show that the plan won’t “increase the Federal deficit.” Once a state makes that showing, the bill is explicit: the Secretary of Health and Human Services “shall” approve the plan.. The Supreme Court has squarely held that this sort of mandatory language means what it says: if the condition is satisfied, the Secretary has no choice but to give his approval. That could lead to some bizarre consequences. What’s stopping a state from submitting a half-baked plan for a high-risk pool that will lead millions of people to lose coverage? Or, for that matter, from using Obamacare money to fund public schools or affordable housing? According to the Senate bill as written, the Secretary would have to approve plans like that so long as they don’t increase the federal deficit. … And once a waiver is granted, the Senate bill says that the federal government cannot terminate the waiver, no matter what. It is hard to overstate how unusual—even unique—this is. The cut-off threat is essential to prevent state abuse of federal funds. The Senate bill removes that threat. It says that a waiver “may not be cancelled” before the waiver’s expiration. If state officials blow the Obamacare money on cocaine and hookers, there’s apparently nothing the federal government can do about it.  Believe it or not, that’s not even the craziest thing about the new waiver rule. Read the whole thing!

How Many People Will Obamacare and AHCA Kill? - Matt Bruenig: Five separate people were bylined on a Center for American Progress post about how many people AHCA will kill. The post is quite long, but all the authors really do is take the CBO estimates of how many people will lose coverage under AHCA and then divide that number by 830. They do this because there is a study that shows that 1 person dies unnecessarily for every 830 people who lack health insurance. I have duplicated CAP’s efforts here, but rather than focus only on the AHCA, I have also included Obamacare and single payer into the mix. One other difference is that I track cumulative deaths between 2017 to 2026 rather than reporting an annual figure for each year. Under AHCA, nearly 540,000 people will die in the next decade because of lack of health insurance coverage. For Obamacare, it is a more respectable 320,000 deaths.

Pure Class Warfare, With Extra Contempt - Paul Krugman - The Senate version of Trumpcare – the Better Care Reconciliation Act – is out. The substance is terrible: tens of millions of people will experience financial distress if this passes, and tens if not hundreds of thousands will die premature deaths, all for the sake of tax cuts for a handful of wealthy people. What’s even more amazing is that Republicans are making almost no effort to justify this massive upward redistribution of income. They’re doing it because they can, because they believe that the tribalism of their voters is strong enough that they will continue to support politicians who are ruining their lives.In this sense – and in only this sense – what we’re seeing now is a departure from previous Republican practice. In the past, laws that would take from the poor and working class while giving to the rich came with excuses. Tax cuts, their sponsors declared, would unleash market dynamism and make everyone more prosperous. Deregulation would increase efficiency and lower prices. It was all voodoo; the promises never came true. But at least there was some pretense of working for the common good.Now we have none of this. This bill does nothing to reduce health care costs. It does nothing to improve the functioning of health insurance markets – in fact, it will send them into death spirals by reducing subsidies and eliminating the individual mandate. There is nothing at all in the bill that will make health care more affordable for those currently having trouble paying for it. And it will gradually squeeze Medicaid, eventually destroying any possibility of insurance for millions. ...  But Republican leaders believe that their voters are tribal enough, sufficiently walled off from information, that they’ll ignore the attack on their lives and keep voting R – indeed, that as they lose health care, get hit with crushing out-of-pocket bills, see their friends and neighbors face ruin, they’ll blame it on Democrats. I wish I were sure that this belief was false.

Four Senate conservatives say they oppose ObamaCare repeal bill -- Four Senate conservatives have announced their opposition to the Senate GOP bill repealing ObamaCare, a power move intended to give them leverage going forward. Sens. Rand Paul (R-Ky.), Mike Lee (Utah), Ted Cruz (Texas) and Ron Johnson (Wis.) all said they are not ready to vote for the bill in a joint statement. While the statement was not scathing, it said the current bill would not lower healthcare costs enough to win their support. “Currently, for a variety of reasons, we are not ready to vote for this bill, but we are open to negotiation and obtaining more information before it is brought to the floor," the statement said. "There are provisions in this draft that represent an improvement to our current healthcare system but it does not appear this draft as written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their healthcare costs.” The early opposition of Senate conservatives is a blow to the bill but doesn’t mean it’s dead yet, even though Republicans control only 52 seats and can afford no more than two defections and still pass the measure. Conservatives want to pressure Senate Majority Leader Mitch McConnell (R-Ky.) to revise the legislation and move it further to the right. McConnell is also under pressure from GOP centrists, creating a difficult balancing act for the leader. Each move he makes to one of the two sides risks losing support from the other. 

Ted Cruz Reveals Details Of His Amendment Proposal To Senate Healthcare Bill --Earlier today, Senators Rand Paul (KY), Ted Cruz (TX), Ron Johnson (WI) and Mike Lee (UT) issued a joint statement announcing their opposition to McConnell's healthcare bill on the basis that it did not fulfill a promise made to the American public to "repeal Obamacare and lower their health care costs."  Here was the full statement:"Currently, for a variety of reasons, we are not ready to vote for this bill, but we are open to negotiation and obtaining more information before it is brought to the floor.  There are provisions in this draft that represent an improvement to our current health care system, but it does not appear this draft as a written will accomplish the most important promise that we made to Americans: to repeal Obamacare and lower their health care costs."Ironically, these conservative Senators, for once, offered some hope to the mainstream media which quickly latched onto their comments as a sign that TrumpCare was potentially 'DOA.' Alas, in light of a new statement that Cruz has just posted to his facebook account, it seems as though his prior 'joint opposition' announcement may have been nothing more than a signal that he's ready to begin negotiations to extract some 'holdup value' in return for his vote.  Here's an excerpt: But it is important to remember that what was released today was only a draft. I am hopeful that as we openly debate this legislation, real improvements will be made prior to floor consideration so that we can pass a bill that provides the relief from Obamacare that Republicans have repeatedly promised the last seven years. I want to get to yes, but this first draft doesn't get the job done. Over the next week and beyond, I will continue working to bring Republicans together to honor our promise, repeal Obamacare, and adopt common-sense, consensus reforms that can actually be passed into law.

Rand Paul: Insurance should be available for $1 a day | TheHill: Sen. Rand Paul (R-Ky.) slammed Senate Republicans' healthcare overhaul bill on Friday, saying that it's grounded in "propping up" insurance companies. He also called for the creation of a healthcare law that would reduce insurance costs to as little as $1 a day for at least some consumers. "What I'd like to do is legalize inexpensive insurance, and you should be able to get insurance for $1 a day. I mean, you really should," Paul said on MSNBC's "Morning Joe." "The insurance companies make all the money; all of this is predicated upon still propping up the insurance companies." Paul's comments came a day after Republican leaders in the Senate unveiled their highly anticipated plan to repeal and replace large parts of the Affordable Care Act. Paul is one of four conservative senators to announce their opposition to the bill. Paul and the three other lawmakers largely object because they believe the Senate bill would not do enough to lower premium costs and that it would leave much of ObamaCare in place. Senate GOP leaders can only afford to lose two votes with their 52-member majority and still pass the bill. They also face pressure from senators who are worried the legislation cuts too deeply into Medicaid. Paul said Friday that the Senate bill fails to address ObamaCare's subsidies to insurance companies, arguing that it continues a trend of "bailing out" insurers. "I want the bill to look more like a repeal bill. I promised people I was going to repeal it; I didn't promise people that I was going to replace it with a federal program of bailing out insurance companies," he said.

Senate Republicans want to get to yes on the health care bill -- Much of the concern that Republican senators expressed yesterday about the draft health-care bill felt more like political posturing than genuine threats to torpedo the effort.There are not currently the 50 votes necessary to advance the legislation that Mitch McConnell unveiled Thursday. There will need to be concessions and compromises, and there are several ways the push could still fall apart in the coming days.But pretty much every Republican, including the current holdouts, wants to pass something. And no GOP senator wants to bear the brunt of the blame from the base for inaction. That factor must not be discounted.-- President Trump, who endorsed the Senate bill last night, also badly wants to get something done, and he’s made clear that he’ll sign whatever makes it through Congress.

GOP Might Buck Senate Rules to Pass Health Care Overhaul: Republicans appear ready to make a small, but significant change to historic Senate procedure in order to advance their legislation to rework the U.S. health insurance system, a move that could have notable impact on the future of the chamber’s operations. GOP leaders are sending signals that, if necessary, they plan to invoke a seldom-used rule included in the Congressional Budget Act that would allow Senate Budget Chairman Michael B. Enzi to skirt a decision from the chamber’s parliamentarian, a key gate-keeper for the budget maneuver known as reconciliation that Republicans are using to advance their health insurance measure. Such a decision would have ripple effects far beyond the tenure of Senate Majority Leader Mitch McConnell, a careful practitioner of the chamber's procedural rules, and open the door for future leaders to more easily advance legislation under a 51-vote threshold. “It is the Parliamentarian’s office that determines whether or not a reconciliation bill is in compliance with the rules of the Senate. This is not a function of the chairman of the Budget Committee,” Sen. Bernie Sanders, the ranking member on the Budget panel, said in a floor speech this month. “I am extremely concerned that the chairman of the Budget Committee, in an unprecedented manner, appears to have made that determination himself with regard to the Trump-Ryan health care bill.”

Trump making calls to senators on healthcare bill | TheHill: President Trump spent Thursday and Friday calling senators to mobilize support for GOP healthcare legislation. Trump called Sen. Majority Leader Mitch McConnell (R-Ky.) on Friday, Sen. Ted Cruz (R-Tx.) on Thursday, and has been in contact with several other senators, Reuters reported Saturday. Cruz was one of four conservative senators who announced their opposition to the bill in a statement Thursday. “Currently, for a variety of reasons, we are not ready to vote for this bill, but we are open to negotiation and obtaining more information before it is brought to the floor," the statement said. Trump is expected to be in contact with more senators in the coming days. On Friday, Press Secretary Sean Spicer said Trump is optimistic about getting the bill passed. "We're pleasantly surprised with a lot of the support that's already come out and I think we'll continue to work through (it), in particular the four individuals who have expressed some ideas and concerns," Spicer told reporters.So far, five Republican senators have said they will oppose the bill. Sen. Dean Heller (R-Nev.) became the fifth GOP defection on Friday shortly after Spicer's comments. "I’m announcing today that in this form I will not support it," Heller said Friday during a press conference. "It’s going to be very difficult to get me to a yes," Heller said. "You have to protect Medicaid expansion states. That’s what I want." 

Rain Dance --  Kunstler - Think of the ObamaCare reform debate now playing in the US Senate as the final gurglings of polity that knows it is whirling around the drain. They’re pretending to attempt to fix a racket that comprises one-eighth of the American economy. Yikes! How did that happen? At the beginning of the 20th century it was one-quarter of one percent (.25 percent) of the economy.  The standard explanation is that, first, Medicare jacked up overall healthcare activity in the 1960s, hauling in a customer-base of old folks who previously received no special treatment and were, generally, less well than non-old folk. Secondarily, technological innovation opened up so many new methods of disease control for everybody, young and old, that we’re able to treat more sickness in more complicated ways — and that drove costs up way further. The greater part of the story remains neatly concealed within the matrix of rackets erected around the money-flows since the big cost bump-up in the 1960s, and these involve insurance companies, Big Pharma, corporatized doctors’ practices, hospital monopolies, and, of course, politicians on-the-take dividing amongst each other a colossal pool of grift that exists mainly for one simple reason: the cost of everything is hidden from public view. Nobody has any idea what anything costs. Certainly not the patients, sometimes called “customers” or “consumers” — but really hostages. If you go into the hospital for a stent in the left descending coronary artery, nobody will tell you what it costs, starting with the doctors who have performed the procedure a thousand times. They can’t even estimate the cost (or won’t), though they could probably give you a pretty good ballpark number for the cost-and-installation of a new fuel pump on their BMW-28i. Any bill in congress that affects to reform the gross financial malfeasance in healthcare ought to start with the absolute requirement to publicly post the cost of everything that doctors and hospitals do, and require the “service providers” to pay only those publicly posted costs — obviating the lucrative rain-dance for dividing up the ransoms paid by hostage-patients who come to the “providers,” after all, in extremis. Notice that this crucial feature of the crisis is missing not only from the political debate but also from the supposedly public-interest-minded pages of The New York Times and other organs of the news media. Perhaps this facet of the problem never entered the editors’ minds — in which case you really have to ask: how dumb are they?

The Real Healthcare Crisis: Retiring Seniors Need $500k To Cover Premiums Even With Obamacare --As Congress spends the next week and a half, if everything goes well, wrestling over how they can screw up healthcare in America even more, perhaps they should take notice of a new study from HealthView Services which highlights the fact that the real source of the healthcare crisis in this country is rising costs.As Bloomberg notes, healthcare cost inflation is expected eclipse overall inflation and Social Security COLAs over the next decade.U.S. retiree health-care costs are likely to increase at an average annual rate of 5.5 percent over the next decade. That's nearly triple the 1.9 percent average annual inflation rate in the U.S. from 2012 to 2016 and more than double the projected cost-of-living adjustment (COLA) on Social Security benefits.The premiums on supplemental insurance, also known as Medigap, that many people buy to cover costs that Medicare doesn't, such as co-payments; on Medicare Part B, which covers payments for doctors, tests, and other medical services; and on Part D, prescription drug coverage. Here's how your Social Security benefits are likely to stack up against some of those costs. Shockingly, the reality is that a couple retiring today can expect to pay nearly a half million dollars in just insurance premiums over the course of the remainder of their lives.For a healthy 65-year-old couple retiring this year with a future adjusted gross annual income of less than $170,000 after adding in any tax-exempt income,projected lifetime health-care premiums add up to $321,994 in today's dollars.Take a moment to appreciate that figure. It includes premium payments for Medicare Parts B and D, supplemental insurance premiums, and dental premiums. (The supplemental premium figure used is a national average, and premiums can vary greatly from state to state.) Sadly, and shockingly, that doesn't reflect the full range of likely expenses. Add in deductibles, co-pays, and costs for hearing, vision, and dental care, and the total rises to $404,253 in today's dollars.

CBC Declines Meeting With Trump: Our Concerns ‘Fell on Deaf Ears’ -NBC - The Congressional Black Caucus rejected an invitation for a second meeting with President Trump on Wednesday.  Citing frustration with the administration’s lack of action on the objectives presented at their March meeting, CBC Chairman Rep. Cedric Richmond, D-LA, wrote a letter to the president stating that another meeting “would not be entirely productive.” “Through an objective assessment, we have seen no evidence that your Administration acted on our calls for action, and we have in fact witnessed steps that will affirmatively hurt Black communities,” Rep. Richmond wrote. While we agreed to explore possible future discussions when we first met, it has become abundantly clear that a conversation with the entire CBC would not be entirely productive, given the actions taken by your Administration since our first meeting.” Earlier this month, the 49-member caucus was invited by Omarosa Manigault, an assistant to the president and director of communications for the Office of Public Liaison, for a follow-up meeting.  The lawmakers have been proactive in engaging with the president on key concerns of their constituents. In March, CBC leadership presented Trump and cabinet members with their 130-page policy dossier, We Have A Lot To Lose: Solutions to Advance Black Families in the 21st Century. The report included notes on African American history and proposed solutions to issues affecting minority communities including funding for HBCU’s, voting rights, and medicaid expansion.

Prominent Democratic Fundraisers Realign to Lobby for Trump's Agenda - After President Donald Trump’s upset election victory, Democratic insiders who worked on Hillary Clinton’s failed presidential bid weren’t necessarily relegated to the sidelines. Many, in fact, are cashing in as lobbyists — by working to advance Trump’s agenda.Lobbying records show that some Democratic fundraisers, who raised record amounts of campaign cash for Clinton, are now retained by top telecom interests to help repeal the strong net neutrality protections established during the Obama administration.Others are working on behalf of for-profit prisons on detention issues, while others still are paid to help corporate interests pushing alongside Trump to weaken financial regulations. At least one prominent Clinton backer is working for a health insurance company on a provision that was included in the House Republican bill to gut the Affordable Care Act.While Republican lobbyists are more in demand, liberal lobbyists are doing brisk business that has them reaching out to fellow Democrats to endorse — or at least tamp down vocal opposition to — Trump agenda items.“These cases are clear, disturbing examples of the gulf between the interests of many of the Democratic Party’s big-money donors and those of the party’s progressive base and America’s working families,” said Kai Newkirk, co-founder of Democracy Spring, a progressive coalition. The net neutrality debate is a case in point. The biggest fundraisers for the Clinton campaign — Democratic lobbyists such as Ingrid Duran, Vincent Roberti, Steve Elmendorf, Al Mottur, and Arshi Siddiqui — are now lobbying on behalf of AT&T, Verizon, or Comcast on net neutrality. These companies dominate the telecom industry, which is working with the Trump administration to unwind one of President Barack Obama’s biggest accomplishments.

Jeff Sessions' Reefer Madness -- US Attorney General Jeff Sessions recently penned an opinion article in the Washington Post. He wrote that the illegal drug business generates violence and violent crime. True enough. He further noted that violent crime is down by half since the War on Drugs peaked in 1991. Again, this is true. Then he noted that as marijuana laws and federal sentencing guidelines have been relaxed, violent crime rates have increased. He noted that “In 2015, the United States suffered the largest single-year increase in the overall violent crime rate since 1991.” That is also true, but it is highly misleading, to say the least. It is like claiming that you have never dealt with the Russians only to find out that you have dealt with the Russians on several occasions and then used a semantic trick to prevent yourself from going to jail. The violent crime rate in 1996 was 637 per 100,000 of population. In 2015, the violent crime rate was 373, a decrease of over 40%. Over this period there were a few years of small increases, but most years saw noteworthy declines. In 2014 there were 1.15 million violent crimes and in 2015 there were 1.20 million violent crimes in the United States. That moved the violent crime rate from 361.6 in 2014 to 372.6 in 2015, or an increase of 11 violent crimes per 100,000 population, or an increase of 3% in the violent crime rate. With crime statistics, as with many social indicators, there is more revealing information below the national aggregate statistics. Many academic and professional criminologists have noted that the recent increase in violent crime occurs mainly in very large cities. According to the numbers, from January to June 2015–2016 the murder rate increased by 9.7% in cites with a population of more than one million people and the murder rate increased by 21.6%. The murder rate increased by 10.9% in metropolitan areas and decreased by 14.7% in non-metropolitan areas over the same period. During the same period in the city of Denver — where recreational marijuana has been legal since late 2012 — violent crime was virtually unchanged. The homicide rate did not increase at all. In the state of Colorado overall the homicide rate fell from 2013 to 2015, decreasing from 3.3 to 3.2 per 100,000.1In San Francisco, one of California’s most crime prone cities, the rate of violent crime actually decreased from 2014 to 2015. Attorney General Sessions’s argument really does not make any sense. Legalized marijuana greatly reduces the size of the illegal drug market and the violence it causes, both by eliminating the illegal marijuana market and by encouraging producers and consumers to switch from hard drugs such as heroin, cocaine, and crystal meth to marijuana/cannabis which is non-addictive and non-lethal.

Sessions backs LGBT Pride Month event | TheHill: President Trump's Attorney General Jeff Sessions on Thursday spoke in support of an LGBT Pride Month event that the Justice Department will hold next week that will honor Gavin Grimm, the transgender teen at the heart of the transgender bathroom debate. Sessions was asked by an intern about the White House's lack of recognition for LGBT Pride Month, and responded that the Justice Department would "celebrate" LGBT pride next week. "We are going to have a pride group in this very room, I think next week I believe it is, and so that's perfectly appropriate and we will protect and defend and celebrate that — and protect the rights of all transgender persons, Sessions said Thursday.Sessions also spoke about ordering a review about recent killings of transgender individuals. "I received a letter expressing concern about the sudden transgender persons who had been killed... and so I, first thing, directed the civil rights division to look into those ... to see if there was any uniform attack, or if there was just a uniform hostility that would result in these murders, and to review each one of those cases that were sent to me," Sessions said. "And they have done that, and I think it's possible that they're going to re-open one and solve it, as a result of that." 

U.S. arrests nearly 200 Iraqis in deportation sweep | Reuters: U.S. immigration authorities have arrested and moved to deport 199 Iraqi immigrants, mostly from the Detroit area, in the last three weeks after Iraq agreed to accept deportees as part of a deal removing it from President Donald Trump's travel ban, officials said on Wednesday. In the Detroit area, 114 Iraqi nationals were arrested over the weekend, and 85 throughout the rest of the country over the past several weeks, Gillian Christensen, a U.S. Immigration and Customs Enforcement spokeswoman, said in a statement. The actions came as part of the Trump administration's push to increase immigration enforcement and make countries, which have resisted in the past, take back nationals ordered deported from the United States. The crackdown on Iraqi immigrants followed the U.S. government's decision to drop Iraq from a list of Muslim-majority nations targeted by a revised version of Trump's temporary travel ban issued in March. The overwhelming majority of those arrested had criminal convictions for crimes including murder, rape, assault, kidnapping, burglary, drug trafficking, weapons violations and other offenses, Christensen said. As of April 17, 2017, there were 1,444 Iraqi nationals with final orders for removal, she said. Since the March 12 agreement with Iraq regarding deportees, eight Iraqi nationals have been removed to Iraq.

Trump Blamed For Slumping Gasoline Demand As Illegal Immigrants Stay Home - At a time of year when gasoline demand should be soaring and inventories tumbling, neither is happening and economists, policy-makers, and politicians are perplexed. However, Barclays Capital has an idea - it's because undocumented immigrants are scared to get behind the wheel.   As Bloomberg reports, since President Donald Trump took office in January, the government is increasingly using routine traffic stops by local police to find and deport people without valid papers. While there’s no data tracking the group’s driving habits, some say they are staying out of their cars to avoid detection. “Immigration policy has struck tremendous fear into the undocumented immigrant communities,” Paul Cheng, an equities research analyst at Barclays Capital Inc. in New York, said in an email. That alone may have reduced gasoline use on the West Coast, where most of the undocumented immigrants reside, by as much as 0.8 percent in the first four months, the bank estimated in May. Just how much gasoline is used by undocumented workers isn’t known. But the populations are significant. The total for the U.S. is around 11 million. Some immigrants say it’s just too risky now to get behind the wheel because U.S. Immigration and Customs Enforcement agents are targeting undocumented people identified through routine traffic stops or waiting for a bus. “Whether it’s driving to work and school or being picked up by ICE by the corner of the house, people are just scared to pick up and leave,”   And so there you have it - the US economy is so fragile that unless it allows illegal immigrants to drive, the energy sector will collapse and drag the nation into recession?

Number of refugees entering US drops by half under Trump --  The number of refugees coming into the U.S. was cut nearly in half in the first three months of the Trump administration compared to the final months of the Obama administration, according to data released Friday. Data released by the Department of Homeland Security showed 13,000 refugees entering the U.S. during the first three months of Trump’s presidency, compared to the 25,000 admitted at the end of the Obama administration. The number of refugees admitted in the final months before President Trump entered office was a major increase – up 86 percent – compared to the previous year. Meanwhile, the number of arrivals admitted in the initial months of the Trump administration was down 12 percent compared to the same period last year.The nationalities of refugees entering the U.S. during both administrations did not change. Two thirds of refugees came from Syria, Iraq, Somalia, Myanmar the Dominican Republic and the Congo. The number of arrivals coming from Syria and Somalia would have been much lower if federal courts allowed Trump’s proposed travel ban. Trump has pushed to take a hardline stance on allowing refugees into the U.S. The president is looking to limit the number of refugees coming into the U.S. to 50,000 in 2017. 

UN Report Reveals Nations Producing Most Refugees Were Targets Of US Intervention -A UN report has shown that more than 65 million people were forced to leave their home countries last year, becoming refugees due to deadly conflict. The top nations from which refugees fled have one thing in common, they were all targets of US intervention.A United Nations report has shed light on the world’s burgeoning crisis of displaced peoples, finding that a record 65.6 million were forced to vacate their homes in 2016 alone. More than half of them were minors.The Office of the UN High Commissioner for Refugees (UNHCR), which drafted the report, put the figure into perspective, stating that increasing conflict and persecution worldwide have led to “one person being displaced every three seconds – less than the time it takes to read this sentence.”UN High Commissioner Filippo Grandi called the figure “unacceptable” and called for “solidarity and a common purpose in preventing and resolving the crisis.”However, what the UN report failed to mention was the role of U.S. foreign intervention, indirect or direct, in fomenting the conflicts responsible for producing most of the world’s refugees.According to the report, three of the nations producing the highest number of refugees are Syria (12 million refugees created in 2016), Afghanistan (4.7 million) and Iraq (4.2 million).Watch the UNHCR’s New Global Trends Report:

California Expands Civil Servant Travel Ban To 8 States --As 'The Left' rages about President Trump's so-called "travel ban" from 'mostly-Muslim' nations for its dreadful discrimination, the liberal-ist of liberal states has decided that California civil servants should be banned from traveling to eight US states because "we will not spend taxpayer dollars in states that discriminate." Having unilaterally trotted over to sign a climate accord with China, secessionistCalifornia is restricting publicly funded travel to four more states because of recent laws that leaders here view as discriminatory against gay and transgender people.As reports, all totaled, California now bans most state-funded travel to eight states. The new additions to California’s restricted travel list are Texas, Alabama, Kentucky and South Dakota. They join Kansas, Mississippi, North Carolina and Tennessee as states already subjected to the ban.California Attorney Xavier Becerra announced the new states at a Thursday press conference, where he was joined by representatives from ACLU Northern California and Equality California.“We will not spend taxpayer dollars in states that discriminate,” Becerra said.California’s Legislature last year voted to restrict state-funded travel to states with laws that allow businesses to deny services to gay and transgender people. So, it appears that travel bans TO discriminatory states is ok, but travel bans FROM discriminatory states (as Ben Carson noted there is not "one of the Muslim nations" that doesn't have "discrimination against women, discrimination against gays, subjugation of other religious beliefs") is horrirfic. How long before California bans visiotrs from these 8 states?

On the progressive double standard when it comes to women’s rights, gender equality and Islam…. Ayaan Hirsi Ali and Asra Q. Nomani write in the New York Times today about their experience testifying last week before the Senate Committee on Homeland Security and Governmental Affairs last week on “Ideology and Terror: Understanding the Tools, Tactics, and Techniques of Violent Extremism,” and being completely ignored and treated with cold indifference by the female Democratic senators on that committee:   The Democrats on the panel, including Senator Kamala Harris and three other Democratic female senators — North Dakota’s Heidi Heitkamp, New Hampshire’s Maggie Hassan and Missouri’s Claire McCaskill — did not ask either of us a single question. Just as we are invisible to the mullahs at the mosque, we were invisible to the Democratic women in the Senate.How to explain this experience? Perhaps Senators Heitkamp, Harris, Hassan and McCaskill are simply uninterested in sexism and misogyny. But obviously, given their outspoken support of critical women’s issues, such as the kidnapping of girls in Nigeria and campus sexual assault, that’s far from the case. No, what happened was emblematic of a deeply troubling trend among progressives when it comes to confronting the brutal reality of Islamist extremism and what it means for women in many Muslim communities here at home and around the world. When it comes to the pay gap, abortion access and workplace discrimination, progressives have much to say. But we’re still waiting for a march against honor killings, child marriages, polygamy, sex slavery or female genital mutilation.

Capitol Hill's hypocrisy on intern pay | TheHill: It's intern season in the nation’s capital, where hundreds of young adults decamp to D.C. for the summer to learn the legislative process. Who knew they'd also get an object lesson in Capitol Hill hypocrisy? The recently-introduced Raise the Wage Act of 2017 would increase the federal minimum wage by 107 percent, to $15 an hour from $7.25. A new Employment Policies Institute analysis shows that 95 percent of the House and Senate sponsors and co-sponsors hire interns for $0 an hour.This “do as I say, not as I do” approach to the minimum wage is not new for Democrats in Congress. A previous analysis conducted two years ago by EPI found that 94 percent of the House and Senate co-sponsors of the 2015 bill to raise the minimum wage to $12 an hour did not pay their interns. (Ditto for 96 percent of the co-sponsors of the 2013 “Fair Minimum Wage Act.")  Ten members from both chambers offer some form of a stipend; the bill's primary sponsor, Sen. Bernie Sanders (I-Vt.), is the only member who pays an hourly wage. However, Sanders' office pays interns $12 an hour, short of his $15 demand from the private sector. (The full list of cosponsors and the compensation details of their internship programs are available here.)Many senators and representatives who are co-sponsors of the "Raise the Wage Act" note on their websites that participants will benefit in other ways besides a paycheck. Senate Minority Leader Chuck Schumer's (D-N.Y.) website states the internship provides, "a unique learning experience" and "an inside look at the political process." Meanwhile, House Minority Leader Nancy Pelosi's (D-Calif.) website states the internship will provide, "A unique opportunity to learn about the functions of the U.S. House of Representatives..."

 Unpaid congressional internships: bad for students, bad for policy – EPI - Summer has officially arrived, and with it an influx of interns has come to the nation’s capital. Many of these young men and women will spend the summer working in congressional offices for no pay. While information on the use of unpaid interns is not available for every congressional office, EPI conducted an informal survey and found that at least three-quarters of all House offices use unpaid interns. More than half of all Senate offices, meanwhile, have unpaid interns, according to a survey by the advocacy group Pay Our Interns.Congress is not alone in its practice of offering unpaid internships—in fact, far from it. Unpaid internships are common in every sector, and have come to be considered a necessary prerequisite for getting a job—despite the fact that most unpaid internships are actually against the law. The Fair Labor Standards Act (FLSA)—the foundation of modern labor law in the United States—requires that anyone doing work for an employer, including interns, be paid at least the minimum wage.The Department of Labor (DOL) is tasked with enforcing the FLSA and has developed a six-point test to determine whether an internship must be paid as employment covered by the FLSA or is, instead, training or education. In recent years, in a number of high-profile cases courts have upheld and applied the DOL’s test, and determined that an e mployer had violated the FLSA when it failed to pay its interns for their work. While Congress is exempted from the laws protecting interns, it sets a powerful example by not paying its interns, and the practice has a far-reaching impact on society as well as public policy.

"Someone's Going To Jail" Gingrich Warns Mueller's Russia 'Witch Hunt' Too Big To Fail Now -- After the Washington Post-New York Times-CNN axis got the public worked into a lather by effectively trying President Donald Trump and his administration in the court of public opinion, Americans are desperate to see somebody held accountable for…wait…what is it again? Collusion? Obstruction? The narrative changes so quickly, it's difficult keeping track. Enter Former Speaker Newt Gingrich, who told Fox’s Sean Hannity on Friday that the investigators who’ve been hired by Special Counsel Robert Mueller won’t quit until they’ve found their own Scooter Libby-type figure to play the role of political pariah. "Somebody" will likely go to jail following the FBI's investigation into Russian election meddling, but said it won't be President Trump. “There are too many lawyers who are high powered to go home without a scalp. They're going to get somebody. I don't think they're going to get the president, but they're going to get somebody, and they're going to get him for something. And they're probably going to go to jail," Gingrich told Fox News's Sean Hannity. Investigators smell blood in the water, Gingrich said. And it’s making them desperately hungry for what will likely be a historic bust. "This is like watching an old-fashioned Western movie. This is an Indian hunting party," Gingrich said. "They're out looking for a couple scalps, and they're not going to go home until they get some." The hypocrisy of the investigation into Trump’s inner circle is staggering, as Gingrich rightfully pointed out. Even high-ranking Democrats are now questioning whether one of their own, former Attorney General Loretta Lynch, illegally tried to influence the outcome of the FBI’s investigation into Hillary Clinton’s mishandling of classified information. Former FBI Director James Comey admitted as much during his testimony before the Senate Judiciary Committee in May that the suspicious “impromptu” meeting inspired him to unilaterally announce the end of the Clinton investigation because he was worried about the optics

The Obscure Lawyer Who Might Become the Most Powerful Woman in Washington - For someone on the job barely a month, Associate Attorney General Rachel Brand was already facing plenty of incoming fire from her critics. Her big problem now: Her ultimate boss, President Donald Trump, could soon be among them. Senate Democrats who opposed her nomination to the No. 3 job at the Justice Department said her legal career reflected a tendency always to support Big Business against the little guy, and they questioned her commitment to civil liberties during her years in the department under President George W. Bush. She has a “heavily skewed pro-corporate agenda,” said Senator Patrick Leahy, the Vermont Democrat. The 44-year-old Brand was confirmed to her job on a party-line Senate vote of 52 to 46. Compare that to the overwhelmingly bipartisan 94 to 6 vote for the No. 2 official in the department, Deputy Attorney General Rod Rosenstein. Suddenly under attack himself by Trump, Rosenstein has suggested he is on the verge of recusing himself from supervision of the investigation led by former FBI Director Robert Mueller, whose pursuit of allegations of collusion between Russia and Trump’s 2016 campaign has apparently enraged the president. On Friday, Trump suggested his relationship with Rosenstein—who named Mueller to the special counsel job—was at a breaking point. “I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director!” Trump tweeted. “Witch Hunt.” The tweet came the morning after Rosenstein released a cryptic statement urging Americans to be skeptical of reports sourced to anonymous officials.

Trump Lawyer: "The President Is Not Under Investigation For Obstruction" -- On Friday morning, when Trump lashed out at what appeared to be Rod Rosenstein on Twitter, many took his statement as confirmation of last week's WaPo report that Trump is under investigation for obstruction of justice by Special Prosecutor Robert Mueller: "I am being investigated for firing the FBI Director by the man who told me to fire the FBI Director! Witch Hunt."On Sunday, however, Trump's personal lawyer Jay Sekulow made the media rounds to explain that Trump's tweet was not an admission, and that Trump is not under investigation in the probe into alleged Russian meddling in the 2016 U.S. presidential race, adding that the president has not received any notification that he is being investigated.Speaking on NBC's Meet The Press, Sekulow said "the president is not under investigation by the special counsel. The tweet from the president was in response to the five anonymous sources that were purportedly leaking information to The Washington Post about a potential investigation of the president. But the president, as James Comey said in his testimony and as we know as of today, the president has not been and is not under investigation... let me be very clear here: the president is not and has not been under investigation for obstruction."Todd then asked "if the president is innocent, why is he afraid of this investigation?" to which Sekulow's response: "he's not afraid of the investigation. There is no investigation."

Trump allies hit Mueller on relationship with Comey | TheHill: President Trump’s legal team is zeroing-in on the relationship between former FBI directors Robert Mueller and James Comey to argue that their long professional partnership represents a conflict of interest that compromises Mueller’s integrity as special counsel. The effort to make the case about a conflict of interest around Mueller’s investigative body comes amid reports that Mueller is looking into whether Trump is guilty of obstruction of justice for allegedly asking Comey to drop an investigation into former national security adviser Michael Flynn. Trump later fired Comey. The president tweeted Friday that he is under investigation for firing Comey — proceedings Trump ripped as a “witch hunt.” Those making the case that Mueller is compromised because of his relationship with Comey point to a Justice Department statute that says recusal is necessary when there is the “appearance” of a “personal” conflict of interest. “Mueller is compromised by the close professional — and I would sure think personal — relationship with Comey,” said Bill Otis, the former special counsel for President George H.W. Bush. “That is an encompassing standard…that should be interpreted broadly so that the public will have maximum confidence in the outcome of the special counsel's work, however it winds up.” That is not the view of many others in the legal community, who are irate that some would seek to cast doubt on the veracity of Mueller’s special counsel by alleging that he is incapable of conducting a fair investigation. Mueller, a decorated Marine Corps veteran, has a sterling reputation as an independent investigator.

Franken: Impeaching Trump could lead to ‘zealot’ Pence | TheHill: Sen. Al Franken (D-Minn.) is cautioning his Democratic colleagues that if President Trump is impeached, Vice President Pence would become president and he “would be worse” on domestic issues. “He’s ideological, I consider him a zealot,” Franken told International Business Times in an interview published Monday. “And I think that in terms of a lot of domestic policy, [Pence] certainly would be worse than Trump.” Franken said Pence, who ran Trump's transition team, was behind some of the “very worst” White House Cabinet nominees, including Environmental Protection Agency Administrator Scott Pruitt, Education Secretary Betsy DeVos, Health and Human Services Secretary Tom Price and Office of Management and Budget Director Mick Mulvaney. Franken did say he'd feel better about having Pence as commander in chief rather than Trump.“If you’re talking about how we handle North Korea or something like that, I’d probably be more comfortable with Pence ultimately making those decisions than Trump, because of Trump’s personality and character,” Franken said. Franken said Trump’s behavior concerns him because it’s “so outside the norm,” adding that he is worried what Trump would do in the event that he was impeached. “I don’t know what he will do if he looks like he’s going to be impeached and he wants to deflect,” Franken continued. “I don’t know what he’s capable of, and that really does concern me.”

Flynn Didn’t Disclose Middle East Meetings, House Democrats Say - Former National Security Adviser Michael Flynn may have violated the law by failing to make required disclosure of contacts with Saudi government officials and a trip to the Middle East on his January 2016 application for a renewed security clearance, two congressional Democrats said Monday. Flynn, a retired U.S. Army lieutenant general who briefly served as President Donald Trump’s national security adviser, had disclosed an October 2015 trip to Saudi Arabia but didn’t detail any official contacts in his application, according to a letter written by Representatives Eliot Engel and Elijah Cummings. The letter seeks documents related to Flynn’s work “regarding Saudi Arabia, Russia and other countries.” Newsweek magazine reported earlier this month that Flynn traveled to the Middle East in June 2015 to pursue a U.S.-Russian business venture to develop nuclear plants in Saudi Arabia. “It does not appear that General Flynn disclosed this trip or any foreign contacts as part of his security clearance renewal process,” Engel and Cummings wrote in their letter. A lawyer for Flynn didn’t immediately respond to a request for comment. Flynn, a former director of the Defense Intelligence Agency, was a top adviser to Trump’s presidential campaign. He was forced to resign from his position as Trump’s national security adviser just weeks into the presidency after administration officials said Flynn misled Vice President Mike Pence about the content of his calls with the Russian ambassador during the transition. He has since become a focus of an FBI investigation, and Democrats have previously raised questions about Flynn’s contacts with the Russian government before the election. Flynn is said to have provided documents to the House and Senate investigations into allegations that Russia meddled in the U.S. elections. 

Exclusive: U.S. investigators in Russia probe look at role of Flynn partner | Reuters: Federal investigators probing the lobbying work of ousted national security adviser Michael Flynn are focused in part on the role of Bijan Kian, Flynn’s former business partner, according to a person interviewed by the FBI. Investigators are also looking at whether payments from foreign clients to Flynn and his company, the now-inactive Flynn Intel Group, were lawful, according to two separate sources with knowledge of the broad inquiry into Flynn's business activities. That includes payments by three Russian companies and a Netherlands-based company, Inovo, controlled by Turkish businessman Ekim Alptekin, they said. The FBI's interest in Kian has not been previously reported. Kian played a central role in securing and overseeing the Inovo contract, two people with knowledge of that project said. It is not clear whether Kian is a target of the criminal investigation or whether investigators are trying to build a fuller understanding of how Flynn's company operated. A person recently interviewed by the FBI in connection with the Flynn investigation said agents from the bureau's criminal division had asked as much about Kian and his work on the project with Alptekin as they had about Flynn. Kian did not respond to repeated requests for comment, nor did the lawyer he recently hired, Robert Trout. The FBI declined to comment. Flynn's lawyer, Robert Kelner, did not respond to requests for comment. Alptekin declined to comment for this story but last month told Reuters that he was satisfied with the work done by Flynn Intel Group and denied any wrongdoing.

Sen. Sheldon Whitehouse: Tons Of Evidence Mike Flynn Is Cooperating With FBI; “Who Knows What Trump Said To Him?” - Sen. Sheldon Whitehouse of Rhode Island suggests that fired national security Mike Flynn has made a deal with the FBI and will testify against President Trump. There is no evidence for this, but Whitehouse says he has 'connected dots' of unrelated evidence to deduce this conclusion. "All the signals are suggesting [Flynn] is already cooperating with the FBI, and may have been for some time. First of all, they had him dead to rights on a felony false statement, on the statement they took from him at the White House on the Kislyak conversations. Second, Comey reported that one of the things the FBI does with cooperators is get them to go back and clean up areas of non-compliance. Flynn, who will never be hired by a foreign government again, went back and cleaned up his foreign agent filings. Third, all of the reporting of the Eastern District of VA on subpoenas is one hop away from Flynn. He is the hole in a donut of subpoenas," he sad. He continued: "One of the most talkative people in Trumpland [Flynn] has gone absolutely silent. That is exactly what a prosecutor would strongly encourage a cooperating witness to do... in order to avoid lengthy imprisonment." "It could be a huge deal. Who knows what Trump has said to him?" Whitehouse speculated. "Both during the campaign and the early days of the presidency." "And apparently, Trump has been in touch with him after his firing from the White House to tell him to 'Stay strong.' Which in some circumstances could be looked at as manipulation of a witness, or obstruction of justice." "The tea leaves all read that way," Whitehouse said. 

Trump, Russia and a Shadowy Business Partnership -- Robert Mueller is examining whether President Donald Trump obstructed justice when he fired James Comey as director of the Federal Bureau of Investigation, the Washington Post recently reported. As we've heard for months now, there is also a probe of possible collusion between Trump's campaign team and the Kremlin to tilt the 2016 election in the president's favor. But the Justice Department inquiry led by Mueller now has added flavors. The Post noted that the investigation also includes "suspicious financial activity" involving "Russian operatives." The New York Times was more specific in its account, saying that Mueller is looking at whether Trump associates laundered financial payoffs from Russian officials by channeling them through offshore accounts.Trump has repeatedly labeled Comey's and Mueller's investigations "witch hunts," and his lawyers have said that the last decade of his tax returns (which the president hasdeclined to release) would show that he had no income or loans from Russian sources. In May, Trump told NBC that he has no property or investments in Russia. "I am not involved in Russia," he said.But that doesn't address national security and other problems that might arise for the president if Russia is involved in Trump, either through potentially compromising U.S. business relationships or through funds that flowed into his wallet years ago. In that context, a troubling history of Trump's dealings with Russians exists outside of Russia: in a dormant real-estate development firm, the Bayrock Group, which once operated just two floors beneath the president's own office in Trump Tower.Bayrock partnered with the future president and his two eldest children, Donald Jr. and Ivanka, on a series of real-estate deals between 2002 and about 2011, the most prominent being the troubled Trump Soho hotel and condominium in Manhattan.

Donald Trump’s New Lawyer Tied to a Shadowy Web of Nonprofits – Pam Martens Four years ago we published an investigative report with the headline: “Jay Sekulow: The Man Pumping the IRS Scandal on Network TV Sits at the Center of a Web of Nonprofits That Have Paid Him, His Family and Related Businesses $40 Million Since 1998.” Add millions of dollars more to the above figure and you have an updated account of the man the President of the United States just added to his white collar criminal defense legal team. Oh yes, there’s one more update, Jay Sekulow has no white collar criminal defense legal experience.  Sekulow also appears to be the new spokesperson for Trump’s legal team.  His tenure in that position may be short-lived given his recent roasting by comedian Stephen Colbert. (See video clip below.) This past Sunday, June 18, Sekulow made the rounds of the Sunday talk shows, which included getting into a heated argument with Chris Wallace on Fox News Sunday on whether Sekulow had just flip-flopped on whether Trump is under investigation by the Justice Department’s Special Counsel, Robert Mueller. Colbert had this take on Sekulow’s performance on Fox News: “Sekulow is saying Trump is not under investigation, is under investigation, and he has no idea if he’s under investigation. A good lawyer covers his bases. That way, when the judge asks ‘How does your client plead, guilty or innocent,’ he could answer, ‘All of the above.’ ”One sentence during Sekulow’s appearance on Fox News Sunday might provide some insight into where this lawyer plans to go with the Trump case. At one point Sekulow told Wallace: “I just gave you the legal theory, Chris, of how the constitution works….” A great deal of Sekulow’s past has been advancing right-wing cases to the U.S. Supreme Court.

Trump Made Calls to Two High Law Enforcement Officials with Jurisdiction to Investigate Him -- Former FBI Director James Comey has testified to Congress that he was uncomfortable with the multiple contacts by the President. Comey was fired by Trump after declining to give a pledge of loyalty to the President. Now, official government emails have been released documenting that another top law enforcement official with jurisdiction to investigate Donald Trump and his business associates received “uncomfortable” contacts by the President and was then fired after declining to return a phone call.  Yesterday evening, Jason Leopold and Claudia Koerner, reporters for Buzzfeed, released emails they had obtained under a Freedom of Information Act (FOIA) request to the U.S. Justice Department. The emails documented concerns raised to Justice Department officials by Preet Bharara, at the time the top Federal prosecutor in the U.S. Attorney’s office for the Southern District of New York, over a voice mail left by President Trump’s secretary, Madeline Westerhout, on March 9, seeking a call back to the President. This would have been the fourth contact by Trump to Bharara since Trump’s election win, the prior three having occurred while Trump was President-elect.  Bharara, after consulting with the Justice Department regarding the March 9 contact, called the President’s secretary back and informed her that it was the Justice Department’s advice that he not “speak directly to the President at this time.” Bharara was fired two days later by Trump after refusing a request to resign. On June 11, Bharara appeared on ABC’s This Week and was interviewed by host George Stephanopoulos. The following was part of the interview according to the official transcript: BHARARA: So he called me in December, ostensibly just to shoot the breeze and asked me how I was doing and wanted to make sure I was okay. It was similar to what Jim Comey testified to with respect to a call he got when he was getting on the helicopter. I didn’t say anything at the time to him. It was a little bit uncomfortable, but he was not the President, he was only the President-elect. He called me again two days before the inauguration, again seemingly to check in and shoot the breeze and then he called me a third time when he — after he became President and I refused to return the call. Wall Street has been highly successful in cultivating a “relationship” with law enforcement. Perhaps that’s where President Trump got the idea he could do the same.

Senate GOP shifts focus to Lynch | TheHill: Senate Republicans are clamoring to hear from Loretta Lynch after former FBI Director James Comey raised concerns about her involvement in the Hillary Clinton email investigation. Republicans on the Senate Judiciary Committee are seizing on Comey’s testimony earlier this month that he was concerned over the former attorney general telling the FBI to refer to the Clinton investigation as a "matter," which resembled the Clinton campaign line. The move could allow Republicans to attempt to pivot away from the investigation into Russia's election meddling — which top GOP lawmakers have signaled belongs to the Intelligence Committee — and focus on Lynch, who has long been a target of Republicans.Sen. John Cornyn (Texas), the No. 2 Senate Republican who is a member of both the Intelligence and Judiciary committees, said it “would be very helpful” for Lynch to testify before the Judiciary panel, which oversees the Justice Department.“Frankly, a lot of what Hillary Clinton was exposed to by Director Comey’s misconduct and the way he handled that was apparently in response to his lack of confidence in the attorney general, and I think there is a lot we could learn from that,” Cornyn said.Sen. Lindsey Graham (R-S.C.) also wants to hear from Lynch and is pushing for the Judiciary Committee to “get more involved.” “The accusations now that ... the current and former attorney general were political — that has nothing to do with Russia as much as it has to do with how the Department of Justice is being run,” he said. “I want to find out all about that.”

Senate announces probe of Loretta Lynch behavior in 2016 election - The Senate Judiciary Committee has opened a probe into former Attorney General Loretta Lynch’s efforts to shape the FBI’s investigation into 2016 Democratic presidential nominee Hillary Clinton, the committee’s chairman announced Friday. In a letter to Ms. Lynch, the committee asks her to detail the depths of her involvement in the FBI’s investigation, including whether she ever assured Clinton confidantes that the probe wouldn’t “push too deeply into the matter.” Fired FBI Director James B. Comey has said publicly that Ms. Lynch tried to shape the way he talked about the investigation into Mrs. Clinton’s emails, and he also hinted at other behavior “which I cannot talk about yet” that made him worried about Ms. Lynch’s ability to make impartial decisions. Mr. Comey said that was one reason why he took it upon himself to buck Justice Department tradition and reveal his findings about Mrs. Clinton last year.The probe into Ms. Lynch comes as the Judiciary Committee is already looking at President Trump’s firing of Mr. Comey. Sen. Charles E. Grassley, chairman of the committee, said the investigation is bipartisan. The letter to Ms. Lynch is signed by ranking Democratic Sen. Dianne Feinstein and also by Sens. Lindsey Graham and Sheldon Whitehouse, the chairman and ranking member of the key investigative subcommittee.

FOIA Request On Susan Rice's Unmaskings Rejected Because "Records Were Moved To Obama Library" - Back in April, Judicial Watch filed a FOIA request for documents related to the unmasking of“the identities of any U.S. citizens associated with the Trump presidential campaign or transition team” by Obama's National Security Advisor Susan Rice.  Unfortunately, and quite conveniently for members of the Obama administration, Judicial Watch has been informed by the National Security Council that records related to their request can not be shared because they " have been transferred to the Barack Obama Presidential Library" and will "remain closed to the public for five years."  Here is the full letter received from the National Secruity Council:  "Documents from the Obama administration have been transferred to the Barack Obama Presidential Library.  You may send your request to the Obama Library.  However, you should be aware that under the Presidential Records Act, Presidential records remain closed to the public for five years after an administration has left office."

Hillary Clinton Told FBI's Mueller To Deliver Uranium To Russians In 2009 "Secret Plane-Side Tarmac Meeting" -- Former Secretary of State Hillary Clinton facilitated the transfer a highly enriched uranium (HEU) previously confiscated by the U.S. Department of Energy (DOE) during a 2006 “nuclear smuggling sting operation involving one Russian national and several Georgian accomplices,” a newly leaked classified cable shows. So-called “background” information was provided in the cable which gave vague details on a 2006 nuclear smuggling sting operation in which the U.S. government took possession of some HEU previously owned by the Russians."Over two years ago Russia requested a ten-gram sample of highly enriched uranium (HEU) seized in early 2006 in Georgia during a nuclear smuggling sting operation involving one Russian national and several Georgian accomplices.  The seized HEU was transferred to U.S. custody and is being held at a secure DOE facility."The secret “action request,” dated Aug. 17, 2009, was sent out by Secretary of State Clinton and was addressed to the United States Ambassador to Georgia Embassy Tbilisi, the Russian Embassy, and Ambassador John Beyrle. It proposed that FBI Director Robert Mueller be the one that personally conduct the transfer a 10-gram sample of HEU to Russian law enforcement sources during a secret “plane-side” meeting on a “tarmac” in the early fall of 2009.

House Dems pressure Deutsche Bank over Russia AML investigation - — House Democrats are notching up pressure on Deutsche Bank’s outside legal counsel, asking again for details of internal investigations into charges that the bank laundered more than $10 billion out of Russia.  Rep. Maxine Waters of California, the top Democrat on the House Financial Services Committee, and other members of the panel initially sent a request for more information on May 23 but were rebuffed by lawyers from Akin Gump Strauss Hauer & Feld. The firm said federal law prevented the bank and Akin Gump from disclosing customer information.

Trump Owes at Least $130 Million to Deutsche Bank --- US President Donald Trump has released his financial disclosure for 2016, providing the first snapshot of his finances since becoming present. The document reveals that Trump owes at least $130 million to Deutsche Bank.The US president on Friday voluntarily submitted his latest financial disclosure to the Office of Government Ethics, revealing the earnings and liabilities of his business empire from January 2016 to this spring. The disclosure showed that Trump reported an income of at least $594 million (530.5 million euros) for 2016 and assets worth at least $1.4 billion. The White House said in a statement that "President Trump welcomed the opportunity to voluntarily file his personal financial disclosure form," adding that the form was "certified by the Office of Government Ethics pursuant to its normal procedures." Overall, Trump held officer positions in 565 corporations or other entities before he took office. When he became president, Trump turned over the reins of his business empire to his two sons and a senior executive and placed his assets in a trust controlled by the executive and Donald Trump Jr. The disclosure has added importance because Trump has broken with presidential tradition by refusing to release his tax returns, which would provide a more complete breakdown of his finances.

Trump Says He Did Not Tape Comey Conversations — President Trump cleared up one of the capital’s least suspenseful mysteries on Thursday, acknowledging that he did not record conversations with James B. Comey, the F.B.I. director he fired in anger over an investigation into his campaign’s possible ties to Russia. Meeting a self-imposed deadline of this week to resolve questions he himself raised by implying that he had taped Mr. Comey, Mr. Trump said on Twitter that he had not made tapes of what Mr. Comey has testified were attempts by the president to derail the Justice Department’s investigation. But if few people believed that Mr. Trump actually possessed recordings, his motives in warning Mr. Comey that he might have taped him remain a mystery, particularly since it set off a chain of events that accelerated, rather than slowed, the investigation into Mr. Trump and Russia. Mr. Comey testified that it was Mr. Trump’s veiled threat of tapes that led him to authorize the disclosure of memos of his conversations with the president — the details of which prompted the Justice Department to appoint a special counsel to look into the case. The timing of the announcement — after an internal debate in which Mr. Trump was at first reluctant to come clean quickly — seemed calculated to change the subject. Hours earlier, Senate Republicans released their heath care bill, which drew immediate opposition from four Republican senators and fanned fresh doubts about the president’s legislative agenda.“With all of the recently reported electronic surveillance, intercepts, unmasking and illegal leaking of information,” Mr. Trump said in a pair of tweets posted around 1 p.m., he has no idea “whether there are ‘tapes’ or recordings of my conversations with James Comey, but I did not make, and do not have, any such recordings.”

A Great Big Coup Is On The Way – David Stockman - So let’s start with an obvious point about the whole Russia fiasco… Namely, there is no “there, there.” First off, the president has the power to declassify secret documents at will. But in this instance he could also do that without compromising intelligence community (IC) “sources and methods” in the slightest.That’s because after Edward Snowden’s revelations in 2013, the whole world was put on notice — and most especially Washington’s adversaries — that it collects every single electronic digit that passes through the worldwide web and related communications grids.Washington essentially has universal and omniscient SIGINT (signals intelligence). Acknowledging that fact by publishing the Russia-Trump intercepts would provide new knowledge to exactly no one.Nor would it jeopardize the lives of any American spy or agent (HUMINT). It would just document the unconstitutional interference in the election process that had been committed by the U.S. intelligence agencies and political operatives in the Obama White House.That pales compared to whatever noise comes out of Langley (CIA) and Ft. Meade (NSA). And I do mean noise.Yes, I can hear the boxes on the CNN screen harrumphing that declassifying the “evidence” would amount to obstruction of justice! That is, since Trump’s “crime” is a given (i.e. his occupancy of the Oval Office), anything that gets in the way of his conviction and removal therefrom amounts to “obstruction.”Given that he is up against a Deep State/Democratic/Neoconservative/mainstream media prosecution, the Donald has no chance of survival short of an aggressive offensive of the type I just described.  But that’s not happening because the man is clueless about what he is doing in the White House. And he’s being   advised by a cacophonous coterie of amateurs and nincompoops. So he has no action plan except to impulsively reach for his Twitter account.

Ron Paul Interviews Snowden On The "Rise Of The Deep State" - In a discussion with Edward Snowden on his weekly “Liberty Report," Ron Paul and the former NSA contractor trace the genesis of the so-called Deep State, and discuss how the US intelligence community uses covert programs like those exposed by Snowden in 2013 to trample individual freedoms.  The most sinister quality of the Deep State, Snowden says, is its ability to mask its very existence from the public, allowing it to undermine President Donald Trump while remaining largely hidden from scrutiny.  “Generally, when we’re talking about the Deep State, what we’re talking about is a mass of government that survives beyond administrations, but that is not responding to the politics of the people. This belongs not to a particular political party, but it serves across parties. Across administrations.”The Deep State’s culture of secrecy convinces employees that they won’t ever be  held accountable for their actions, Snowden said, since even routine communications between employees at the CIA and NSA are classified.  Though he says he favors small government and opposes widespread surveillance, Snowden balked at being branded a libertarian by Paul, arguing that labels like “libertarian” or “liberal” are often reductive and don’t allow for enough nuance to accurately represent his views. “We’re more than tribes or labels. It is true that I think we have challenges that are derived from governments reaching a new scale that they haven’t previously occupied historically, allowing for the rise of these sort of ‘Super States.’” “Small government tends to be more respecting of individuals’ rights than large governments. And the question we need to ask, is why?” Rejecting the idea that he’s a leader in the fight against deep-state overreach, Snowden assured his viewers that he’s “not a politician” and that he isn’t comfortable in the role of spokesman. Rather, he prefers to focus on engineering methods of protecting individuals’ privacy.“[Some people] want me to sort of be a frontman for these issues like civil liberty and peoples’ rights but I’m not a politician, I’m an engineer. Last year I gave a presentation…at MIT on how we can make phones safer by understanding what’s happening inside of them. When we start looking at all of the problems we’re facing today, there’s sort of two tracks. There’s the political track where the government is passing laws that don’t protect citizens’ rights…the other problem is how is it that so many governments are spying on so many people?”

Penetrated: Today’s Senate Intelligence Committee Hearing on Russian Interference in the 2016 U.S. Elections   -- If you didn’t catch the Senate Intelligence Committee hearing on Russian influence on 2016 U.S. election on live stream, you should try to catch a replay online. I missed the first panel but caught the second when University of Michigan Prof. J. Alex Halderman began his testimony with his opening statement. When asked if it was possible Russia could change votes, Halderman told the SIC that he and a team of students demonstrated they were able to hack DC’s voting system, change votes, and do so undetected in under 48 hours. Conveniently, Fox News interviewed Halderman last September; Halderman explained the DC hack demonstration at that time (see embedded video); the interview fit well with Trump’s months-long narrative that the election was ‘rigged’. If you aren’t at least mildly panicked after watching the second panel’s testimony and reading Halderman’s statement, you’re asleep or dead, or you just plain don’t care about the U.S.’ democratic system. Contrast and compare this Senate hearing to the House Intelligence Committee’s hearing with former DHS Secretary Jeh Johnson as a witness. Johnson sent out numerous messages last year expressing his concerns about election integrity, but after listening to the second Senate panel, Johnson should have been hair-on-fire (it’s figure of speech, go with it). But the Obama administration erred out of some twisted sense of heightened sensibility about appropriateness (which would have been better suited to its policies on drone use and domestic surveillance). The excess of caution feels more like foot dragging when viewed through the lens of time and Johnson’s testimony.

Frustrated Dems say Obama botched Russia response | TheHill: The Obama administration is under fresh scrutiny for its response to Russian meddling in the election after new details emerged this week about how the White House weighed its actions against the 2016 political environment. Then-President Obama was too cautious in the months leading up to the election, frustrated Democratic lawmakers and strategists say. “It was inadequate. I think they could have done a better job informing the American people of the extent of the attack,” said Rep. Eric Swalwell (D-Calif.), a member of the House Intelligence Committee who co-chairs the Democratic Steering and Policy Committee. And even after the election was over, they say, the penalties Obama levied were too mild to appropriately punish what by all accounts was an unprecedented attack on a U.S. election. Rep. Jim Himes (D-Conn.), another House Intelligence member, called the penalties “barely a slap on the wrist.” Sen. John McCain (R-Ariz.), who supports tougher sanctions Russia, said in a statement Friday that the administration “abjectly failed to deter Russian aggression” and “failed to impose any meaningful costs on Russia.” Some Republicans argue the Obama administration only started to take the Russia threat seriously after President Trump had won the election. “By the way, if Russia was working so hard on the 2016 Election, it all took place during the Obama Admin. Why didn't they stop them?” Trump tweeted Thursday. The Obama administration announced on Oct. 7 that the theft and release of the Democratic National Committee (DNC) emails was part of a widespread campaign “intended to interfere with the U.S. election process.” But it was not until January that it issued a separate declassified intelligence report that assessed Moscow was attempting to tip the election in t Trump’s favor — and only in December did Obama approve a modest package of retaliatory sanctions and expel a compound of Russian diplomats. 

Russia Hacking Allegations Driven By a Serial Liar -- Today’s lengthy Washington Post’s story makes it clear that former CIA boss John Brennan is largely responsible for driving the claim that Russia hacked the election. But Brennan is a proven, documented liar.  He was busted for lying to Congress and the American public by claiming  that the CIA wasn’t spying on the Congressional investigation into torture … when it was. Indeed, the Washington Post called on Brennan to be fired for lying. And Brennan lied when – as Obama’s counter-terrorism advisor – he said that in the past year there had not been a single collateral death from drone strikes. (He later changed that that slightly to say there was no “credible evidence” of such deaths.)   But there was abundant and credible evidence of collateral deaths from drone strikes.  As just one example among many, a March 2011 CIA drone attack in Pakistan killed some 50 people, including tribal elders who were gathered for a tribal conclave.)  Trevor Timm pointed out at the Guardian: Internal intelligence documents leaked to McClatchy later confirmed Brennan to have lied at the time …. Brennan also fed the public wildly inaccurate details about the Osama bin Laden raid in 2011, and despite condemning leaks of classified information from others, he has often leaks classified information himself to suit his own needs.  This is the type of spy … who lies because he doesn’t like to tell the truth.  Why is the media taking Brennan’s claims at face value?  Especially when some of the other claims of Russian hacking have officially been debunked? As Pulitzer-prize winning reporter Seymour Hersch said in January in a story questioning the whole Russian hacking story:: [If I had been covering the story,] I would have made [John] Brennan into a buffoon. A yapping buffoon in the last few days. Instead, everything is reported seriously. Postscript: The other intelligence official behind many of the Russian hacking claims – James Clapper – is also a confirmed liar. And see this and this.

President Trump’s Lies, the Definitive List - New York Times -  Many Americans have become accustomed to President Trump’s lies. But as regular as they have become, the country should not allow itself to become numb to them. So we have catalogued nearly every outright lie he has told publicly since taking the oath of office.

Data on 198M voters exposed by GOP contractor | TheHill: A data analytics contractor employed by the Republican National Committee (RNC) left databases containing information on nearly 200 million potential voters exposed to the internet without security, allowing anyone who knew where to look to download it without a password. "We take full responsibility for this situation," said the contractor, Deep Root Analytics, in a statement. The databases were part of 25 terabytes of files contained in an Amazon cloud account that could be browsed without logging in. The account was discovered by researcher Chris Vickery of the security firm UpGuard. The files have since been secured.Vickery is a prominent researcher in uncovering improperly secured files online. But, he said, this exposure is of a magnitude he has never seen before "In terms of the disc space used, this is the biggest exposure I've found. In terms of the scope and depth, this is the biggest one I've found,"

Congressman to push bill that lets lawmakers carry guns — A Republican congressman who survived the horrific baseball shooting will offer legislation this week to allow lawmakers to carry guns throughout the nation’s capital.“I’m going to be introducing legislation this week … to allow congressmen to carry a sidearm, should they so desire,” Rep. Mo Brooks (R-Ala.) told Fox News’ “Sunday Morning Futures.” Members of Congress are “high-profile targets, but we have absolutely no way to defend ourselves because of Washington, DC’s rather restrictive gun laws.”Brooks said the legislation would allow members of Congress to be armed in places throughout Washington where average citizens typically cannot carry guns. “I want congressmen to be treated as if they were law enforcement,” Brooks said, “given that we are high-profile targets for the bad guys, the lone wolves, the terrorists.”

Republican Lawmaker Wants To Make It Legal To Carry A Gun In DC... But Only For Congressmen -- When it comes to gun control, no one is more hypocritical than liberal celebrities and politicians. While these people promote the end of gun rights for ordinary Americans, it’s often the case that they are protected in public and in their homes, by cadres of highly trained and armed bodyguards. They reap the benefits of the Second Amendment, while treating the rest of us like children who can’t be trusted with a gun.However, it’s not just prominent liberals who are hypocritical when it comes to gun rights.Republican Congressman Mo Brooks, who survived the recent shooting in Virginia that left Congressman Steve Scalise severely injured, has been promoting a new bill that will allow lawmakers to carry a gun anywhere in the country, including Washington D.C., regardless of local laws. The only exceptions, are when lawmakers are in the US Capital building, or in the presence of the President or Vice President.“I’m going to be introducing legislation this week … to allow congressmen to carry a sidearm, should they so desire,” Rep. Mo Brooks said in an interview with Maria Bartiromo on Fox News’ “Sunday Morning Futures.” Members of Congress are “high-profile targets,” the congressman said, adding that they have “absolutely no way to defend ourselves because of Washington, D.C.’s rather restrictive gun laws,” the Alabama congressman said.

Jared Kushner speaks and Twitter goes wild - Jared Kushner has spoken. And that's a big deal why? President Trump's son-in-law, the man married to first daughter Ivanka Trump, rarely speaks and seems to never be at the microphone. So when Kushner addressed tech leaders gathered for the inaugural American Technology Council meeting Monday, Twitter went nuts about his first remarks in his role as senior adviser to the president. Is Kushner's voice more James Earl Jones or "Bar Mitzvah Boy" from SNL? You be the judge. Here's a sampling from the Twitterverse:

After pressure campaign, Maddow loses major sponsor – Upon hearing that has decided to pull their ads from MSNBC’s Rachel Maddow Show, Melanie Morgan, Co-founder of the Media Equality Project, thanked the thousands of volunteers who have been calling, emailing, writing letters and cancelling their accounts. “We’re fighting fire with fire and we’re winning! It’s so gratifying to hear understands how Rachel Maddow’s dishonest and biased reporting doesn’t resonate with their customers. Thank you to all the Stop the Scalpings volunteers who made their voices heard,” said Morgan. Stop the Scalpings has posted the contact information for every advertiser on MSNBC’s flagship show on their Facebook page (now 103,000 strong) and on the website. Every day, volunteers focus their efforts on a different company and share their feedback. Co-founder Brian Maloney added, “When left-wing smear organizations attempted to remove opposing voices from the airwaves, they should have known it would compel a strong response. While we’re not for censorship, we do believe moderates, conservatives and independents can choose to patronize businesses that correspond to their own values. LegalZoom has recognized this new environment.” The Stop the Scalpings (STS) online effort launched in April 26th to counter the Media Matters campaign against Fox News host Sean Hannity’s advertisers. In a matter of days, tens of thousands of volunteers coalesced around the effort, persuading some of Hannity’s advertisers to rejoin him. Using social media to disseminate advertiser contact information, volunteers have turned their efforts to include corporate supporters of MSNBC’s Rachel Maddow; CNN’s Kathy Griffin and Don Lemon; and the Public Theater in NYC. STS has been successful in persuading sponsors of the mock assassination of President Donald Trump during the ‘Shakespeare in the Park’ series not to fund the production. Delta, Amex and Bank of America pulled their sponsorship after the campaign began.

 McCain Institute Donors Look Disturbingly Similar To Clinton Foundation --Last fall, we spent a fair amount of time reading through John Podesta's emails, courtesy of Wikileaks, and grew increasingly astonished with each passing day at the number of apparent conflicts of interest created by the Clinton Foundation which seemed to be nothing more than a front created for the Clintons to peddle their influence around the world in return for staggering "charitable" donations. Now, an exclusive report on the "McCain Institute" published earlier today from the Daily Caller(DC) has us wondering who else in Congress might just be running miniature Clinton Foundation-ish organizations and enriching their personal families in the process. As the DC points out, the McCain Institute's donor list looks eerily similar to that of the Clinton Foundation In addition to the 'who's who' of massive corporate donors (Chevron, Cisco, FedEx, Wal-Mart...), many of which were also large contributors to the Clinton Foundation, the McCain Institute counts many other more 'questionable' donors, including Saudi Arabia, Teneo (Doug Band's firm) and George Soros, among its largest. As the DC points out, one such 'questionable' donor that took interest in the McCain Institute was OCP, S.A., a Moroccan state-owned phosphate company.  Ironically, OCP just happened to also be a "major sponsor" of the Clinton Global Initiative where Bill was a featured speaker.

Pence meets with Koch brother in Colorado | TheHill: Vice President Pence held an unannounced meeting with conservative political activist Charles Koch on Friday, the day before the Koch brothers network kicks off a donor meeting in Colorado Springs. Pence, in town to headline a banquet celebrating the 40th anniversary of the Christian conservative group Focus on the Family, sat down with the chairman and chief executive of Koch Industries, along with key members of the Koch team. The meeting was not on the vice president's schedule released by the White House late Thursday.A spokesman for the vice president's office denied to The Hill earlier Friday that Pence would be meeting with the Koch brothers' network. The spokesman did not respond to requests for comments late Friday. James Davis, a spokesman for the Koch brothers' network, said Pence and Charles Koch discussed issues ranging from tax reform to a measure reforming the U.S. Department of Veterans Affairs. While President Trump had an almost non-existent relationship with the libertarian billionaire Koch brothers, Pence has a much longer history with both Charles and David Koch. Americans for Prosperity touted Pence's record as governor of Indiana. His former pollster Kellyanne Conway, now a senior adviser in the Trump White House, worked for a Koch network group. And Short, the White House's top lobbyist and former Pence chief of staff, once ran the Freedom Partners Chamber of Commerce, a key wing of the Koch brothers network. 

Why The Koch Brothers Have So Much Influence On Trump: It Starts With PenceBillionaire oil and gas magnates Charles and David Koch may not have supported President Donald Trump on the campaign trail, but the reality-star-turned-commander-in-chief is filling his senior White House official positions with people linked in some way to the brothers’ network: 70 percent of his filled senior White House official positions, to be exact. That’s according to a new report from the Checks & Balances Project, which scrutinized the backgrounds of the 23 senior White House officials with “direct policy influence,” according to C&BP Executive Director Scott Peterson, and found that 16 of them have some link to the Koch brothers. Some of the connections are tenuous, such as that of Chief of Staff Reince Priebus, who, in his previous capacity as Republican National Committee chairman, has worked closely with Wisconsin Governor Scott Walker and House Speaker Paul Ryan, both of whom have long histories of Koch support. Others with stronger ties, such as Senior Adviser Kellyanne Conway, who sat on the board of the Koch-funded conservative group Independent Women’s Forum, are more familiar. And other longtime Koch associates in the White House have received somewhat less attention. Asked why the Koch brothers might have so many alumni in the White House, despite their early aversion to a Trump presidency, Peterson, C&PB’s executive director, pointed to the man who's first in the line of succession. “I think the results of the 2016 election were surprising to everyone, including the Koch brothers,” he told International Business Times. “Luckily, they had someone in place, with Mike Pence.”

White House seeking good listeners for top regulatory spots: Official  — President Trump plans to tap nominees to head the independent financial regulators who will be more willing to listen to industry than past heads, a senior White House official said Thursday.  “One thing that we saw of the last administration, some of the problems was regulators not doing a very good job of listening and doing good outreach to make sure that before they moved on a regulation they knew it’s impact and particularly its unintended consequences,” said the official, who spoke to reporters on condition of anonymity.

Trump selects former House GOP staffer for top bank regulator - President Trump is poaching from House Republicans for his top bank regulator.The White House announced Friday evening that Trump intends to nominate James Clinger, counsel of the House Financial Services Committee, to chair the Federal Deposit Insurance Corporation, the agency tasked with insuring banks' deposits and protecting them in the case of a bank failure.Clinger would first be nominated to be a member of the FDIC, and then to replace current chairman, Martin Gruenberg, when his five-year term runs out in November. As chair of the FDIC, Clinger would be responsible for regulating banks to prevent failures that could result in taxpayers having to ensure that depositors did not lose insured money. The agency also takes over banks that do fail, speedily reorganizing them to make sure that depositors have access to their cash. In the case of a megabank failure, the FDIC, under the 2010 Dodd-Frank financial reform law, would take the lead if the government chose to step in and take over the firm to prevent a panic.Clinger has served as the general counsel to the Financial Services Committee since 2007, and before that was the acting assistant attorney general for legislative affairs at the Department of Justice. Previously, he had worked as a staffer on what was then called the House Banking Committee, starting in 1995. As counsel to the committee, Clinger has worked for Rep. Jeb Hensarling, the fiscally conservative Texan who this month passed legislation in the House of Representatives that would dramatically scale back the post-crisis banking rules and replace them with a more free-market approach to overseeing finance.

Trump's Banking Deregulation Team Takes Shape With FDIC Pick - On Monday, Trump nominated James Clinger, the former chief counsel of the House Financial Services Committee, to replace Martin Gruenberg as chairman of the Federal Deposit Insurance Corp. Clinger would fill a vacant seat at the agency until Gruenberg’s term ends in November.  The selection means that most of the president’s bank watchdogs are now known. To Wall Street’s relief, they are candidates who will probably focus on dialing back regulations, instead of pursuing policies -- such as breaking up big lenders -- that Trump threatened on the campaign trail. The administration previously nominated Joseph Otting, a former lieutenant of Treasury Secretary Steven Mnuchin’s at OneWest Bank, to lead the Office of the Comptroller of the Currency. And for several months, the White House has signaled that it intends to nominate Randal Quarles, a senior Treasury official in the George W. Bush administration, to handle regulatory duties at the Federal Reserve.Once Trump’s picks are confirmed by the Senate, Janet Yellen will probably be the last holdover from Barack Obama’s presidency who can stand in the way of efforts to bring relief to banks. Yellen’s term as Fed chair expires in February 2018. Clinger has spent most of his career on Capitol Hill, where he’s worked on legislation that deregulated the finance industry. He helped write the 1999 Gramm-Leach Bliley Act, which overturned much of a Depression-era law that had separated consumer and investment banking for more than 60 years. More recently, Clinger worked for House Financial Services Committee Chairman Jeb Hensarling, who sponsored legislation that would rip up much of the 2010 Dodd-Frank Act.

Trump bank regulatory pick liked by banks -- Banks are pleased with President Trump's selection of House Republican staffer James Clinger to oversee banks, seeing him as a "pro's pro" and experienced policy hand. The pick could also excite conservatives seeking to limit the government's ability to rescue banks. Clinger, previously counsel for the Republican-led House Financial Services Committee, was officially nominated Monday night to chair the Federal Deposit Insurance Corporation, the agency charged with administering the system of insurance for bank deposits and overseeing banks. Clinger, the son of a former Republican congressman, doesn't have much of a public profile. But lobbyists and former staffers describe him as a deeply experienced staffer who has worked on every major piece of financial legislation over the past two decades, serving under four Republican heads of the Financial Services Committee. And when it comes to carrying out one of the FDIC's major new responsibilities, namely leading the government mechanism for taking over and safely liquidating a failing megabank, one former co-staffer described Clinger as the perfect candidate. The 2010 Dodd-Frank reform law empowered the government to appoint the FDIC to carry out the liquidation of teetering bank under what is known as Orderly Liquidation Authority, a process that also can include an infusion of Treasury funds to temporarily prevent a collapse. In April, Trump signed a memo requiring a Treasury review of orderly liquidation authority to determine whether it might hurt the economy. Congressional Republicans have argued that it amounts to a promise to bail out failing megabanks, and have sought to repeal it, including in a legislative package the House of Representatives passed this month authored by Jeb Hensarling, the committee's conservative chairman.

Trump Has A Solution, But It’s Not Clear That There’s A Problem - President Trump’s tax plan turned out to be a one-page outline, and his infrastructure plan doesn’t yet exist at all. So it was notable this week when the administration’s plan for reforming banking regulation turned out to be a real, substantive document that, as Bloomberg’s Matt Levine put it, “generally seems to have been written by professionals who are familiar with bank regulation.”  The nearly 150-page Treasury Department plan — the first of several expected reports on financial regulation — laid out the Trump administration’s approach for dealing with what it sees as a fundamental roadblock to its goal of faster economic growth: burdensome rules that discourage banks from lending to people and businesses. Much of the administration’s ire is directed at the Dodd-Frank Act, the 2010 law that increased regulation of banks and other institutions in the wake of the financial crisis.  But many of the Treasury Department’s proposals are comparatively moderate. Many Republicans, for example, want to repeal the “Volcker rule,” which bans banks from placing financial bets with their own money; the Treasury report, however, proposes only to limit the rule’s scope, not eliminate it entirely. Similarly, the administration wants to limit the power and independence of the Consumer Financial Protection Bureau but not shut it down, as some Republicans have proposed. Most of the Treasury report is dedicated to relatively esoteric proposals that, though significant (and controversial), are unlikely to reshape the financial system in a fundamental way. It isn’t clear, however, that the core problem that the Treasury’s plan sets out to solve actually exists. Dodd-Frank is a complex, unwieldy law that almost no one loves — even former Congressman Barney Frank, one of the bill’s authors, has said parts of the law need fixing. But it’s less clear that the law has significantly constrained lending, or that those constraints are, in turn, holding back the economy. Total commercial and industrial lending is at an all-time high, according to data from the Federal Reserve, and household debt recently surpassed pre-financial-crisis levels.

Dodd-Frank's "Abusive" Standard: The Dog that Didn't Bark – Adam Levitin, Credit Slips -  There's a whole bunch of blog posts that one could write about the Treasury report, but I want to limit myself here to one item that has long been on the GOP/industry complaint list about the CFPB:  that its power to proscribe "abusive" acts and practices is a problem because the term "abusive" is novel and undefined and that this creates uncertainty that is chilling economic growth.  Total hooey.   It's a shame that some commentators are buying into it.  Here's the story of the "abusive" power in a nutshell:  it's the dog that didn't bark.  The CFPB's critics have been complaining about the vagueness of the "abusive" power ever since the Dodd-Frank Act was in the legislative process.  Those arguments didn't hold a lot of water then because the term is defined by statute and has a history (namely HOEPA, the FDCPA, the Telemarketing Sales Rule, and the FTC's interpretation of "unfair" from 1962 to 1980), and the codification of "unconscionability" in the Uniform Consumer Credit Code.  But we now have the advantage of six years of CFPB enforcement activity to understand how the agency has used this power and what it means. Unfortunately, it seems that no one at Treasury bothered to look through the CFPB's enforcement actions to see how the agency has actually used its power to prosecute "abusive" acts and practices.  I did.  Here's the two things that stand out.   First, the CFPB has been very sparing in alleging that acts and practices are "abusive".  The CFPB has brought around 185 enforcement actions to date.  Only 22 of these (less than 12% of all enforcement actions) have included counts alleging "abusive" acts and practices.  In all but one instance in these 22 cases, the very same behavior alleged to be "abusive" was also alleged to be "unfair" and/or "deceptive."  Unfair and deceptive are not new standards.  They have been around in the FTC Act since 1935. […]   Second, the behaviors alleged to be abusive are almost all in the context of pre-existing customer relationships.  (I include in this things like private student loans through the student's school.)  This is the angle about consumer finance that is almost always ignored. The real problems in consumer finance are less about consumers getting snookered into a product in the first place than by financial institutions taking advantage of existing consumers by changing terms, applying undisclosed fees, or, my favorite, Citizens Bank's "[we] keep the change" policy.  In other words, "abusive" is getting applied to function as a publicly enforceable duty of good faith and fair dealing, an implied term in all contracts.

 Treasury wants to weaken a crucial post-crisis capital requirement --A proposal by the Treasury Department that would allow large banks to exclude certain assets in calculating the leverage ratio is not only a misguided recommendation that would undermine post-crisis capital requirements for Wall Street. The recommendation also appears to be in direct contradiction with the leverage ratio principles outlined in the Treasury report’s own appendices.  On June 12, the Treasury released the first in a series of financial regulatory reports in accordance with an executive order signed by President Trump in February. Among the report’s worrisome recommendations is to modify the denominator in the Supplementary Leverage Ratio, or SLR. Specifically, Treasury recommends removing certain assets — cash held at central banks, U.S. Treasury securities and initial margin for centrally cleared derivatives — from what top-tier holding companies must include in maintaining a 5% SLR. This essentially makes it easier to meet the SLR requirement. Here’s why that’s a problem. The 2007-8 financial crisis demonstrated that the banking system was highly leveraged and severely undercapitalized. Banks were funding themselves with too much debt and too little equity capital. Responding to this lesson, the Basel Committee and Dodd-Frank Act capital regimes put an emphasis on increasing the loss-absorbing capacity of the banking sector by increasing bank capital requirements.   The SLR is an important new capital requirement for banks over $250 billion in assets that takes into consideration all on-balance-sheet assets and off-balance-sheet exposures without any regard to the riskiness of the assets. The leverage ratio stands in contrast to risk-based capital requirements, which do treat assets differently based on their risk profile. Many academics, policymakers and regulators have discussed the importance for financial stability of having both risk-based capital and leverage requirements. They point to the fact that different assets have distinct risk profiles, but a risk-based system alone can enable banks to undercut the required thresholds.

Regulators find common ground with lawmakers on reg relief — Federal regulators supported several changes the banking industry has been seeking in a hearing at the Senate Banking Committee on Thursday, acknowledging the need to limit the Volcker Rule and better define systemically important banks. Yet there was little sign that sweeping changes will clear the panel, as Democrats continued to raise concerns that changes meant to help small banks would instead benefit larger institutions. Sen. Sherrod Brown, D-Ohio, blasted a Treasury Department report last week that outlined regulatory relief, calling it "misguided" and noting that the department sought banking industry advice versus consumer group input by a count of 17 to 1.

Fed's Fischer says more to be done to prevent future crises | Reuters: Federal Reserve Board Vice Chair Stanley Fischer on Tuesday warned that while the U.S. and other countries have taken steps to make their housing finance systems stronger, more needs to be done to prevent a future crisis. Fischer did not address the outlook for U.S. monetary policy or the economy in remarks prepared for delivery to the DNB-Riksbank Macroprudential Conference Series in Amsterdam. Instead he focused on preventing financial instability, arguing that since the 2007-2009 financial crisis in the United States, "the core of the financial system is much stronger, the worst lending practices have been curtailed, much progress has been made in processes to reduce unnecessary foreclosures," and a 2008 law helped clarify the status of government support for housing agencies Fannie Mae and Freddie Mac. But to prevent a new crisis, he said, governments ought to do more, including stress tests for banks on their resilience should house prices decline dramatically, and making it easier to avoid foreclosures, which hurt both lenders and borrowers. "(T)here is more to be done, and much improvement to be preserved and built on, for the world as we know it cannot afford another pair of crises of the magnitude of the Great Recession and the Global Financial Crisis," he said.

How Trump's financial cop on the block should prioritize the job | TheHill: The newly appointed chairman of the U.S. Securities and Exchange Commission (SEC), Jay Clayton, has a lot on his plate. As the new financial cop on the block, he is picking up where his predecessor, Mary Jo White, left off. From the record number of enforcement actions during her tenure, to the rules written under her aegis, White was laser-focused on modernizing and improving the asset management industry. But the markets are asking questions. What can we expect from Clayton? How will he manage all the proposals and policies vying for his attention? And equally important, what happens if the agency doesn’t secure the requisite appropriations, and finds itself unable to invest in the right people and technology to protect U.S. investors? As a long-time proponent of investor interests, I’ve been paying close attention to both the needs of investors and the professionals who help make their financial objectives a reality. As such, I recommend that Clayton prioritize the following six policy areas given their likely effectiveness in protecting and serving the needs of investors.To preserve trust in our industry, it’s critical to have an unshakeable fiduciary standard for professionals who provide personalized investment advice to retail investors. While drafting a uniform standard for providing investment advice is no simple undertaking, the most intelligent approach would be to regulate the actual titles used by investment professionals. For example, anyone who describes their title or job as an “adviser” must be bound by the fiduciary obligations enshrined in the Investment Advisers Act. But it can’t stop there. Commissioned brokers who provide investment ideas or execute trades should also be required to refer to their roles as “salespersons.” The industry needs far more transparency so investors understand that the role of brokers includes selling investment ideas to generate commission-based transactions, as compared to investment advisers, who advise clients on investment strategies and tactics to achieve their financial goals. 

Bad Ideas - Global Finance - interview with Jamie Galbraith. Renowned economist James K. Galbraith, one of our expert panelists, pulls no punches in talking about the damage wrought by financial innovation. Global Finance: You are very negative about recent financial innovations. Are there any you see as beneficial?
James K. Galbraith: I could point to the Consumer Financial Protection Bureau. It provides at least one place in the government that is supposed to be looking at financial innovations with a skeptical eye. In my view, innovation in the financial sector is designed to get around public purpose.

One Nomura trader convicted, one cleared at bond fraud trial - A former Nomura Holdings Inc. trader was found guilty of conspiring to lie to clients about mortgage-bond prices, while another was cleared of all charges in a verdict that highlights the challenge of policing fraud in the market.Michael Gramins was convicted of conspiracy and cleared of six fraud counts, while the jury was hung on two other charges. Tyler Peters was acquitted on all nine charges. Jurors cleared a third trader, Ross Shapiro, of eight counts of fraud, but deadlocked on one. Prosecutors must decide whether to retry Shapiro on one count and Gramins on two.Thursday’s mixed verdict in Hartford, Conn., supports the government’s claim that lying to even the most-sophisticated customers can amount to securities fraud — a widespread practice among bond traders until prosecutors launched their crackdown 4.5 years ago. But the outcome also underscores how difficult it is for prosecutors to prove their case.“I don’t think it undermines the strategy as a matter of law, but it might at least suggest the government might want to have a really compelling cache of evidence," said Robert C. Hockett, a professor at Cornell Law School in Ithaca, N.Y. Prosecutors need "a very compelling bunch of testifiers, emails, messages and recordings what have you,” he said.In January, jurors convicted Jesse Litvak, a former Jefferies LLC managing director, of lying about prices, although he was found guilty on just one of 10 counts. Since his indictment in 2013, another half-dozen traders have been charged and dozens more have left their jobs. Litvak, who is appealing, was sentenced to two years behind bars.Prosecutors and defense lawyers didn’t have immediate comments after the verdict, and jurors weren’t available to speak. Jennifer Will, a Nomura spokeswoman, declined to comment.The crackdown has largely focused on the roughly $10 trillion U.S. structured finance market where bonds fund everything from mortgages on homes, skyscrapers and office parks to loans propping up distressed companies. Criminal and civil cases are still reverberating through the industry.Several have agreed to cooperate with prosecutors in bids for leniency, including former Royal Bank of Scotland Group Plc traders Adam Siegel and Matthew Katke and ex-Nomura vice president Frank DiNucci Jr. A former Cantor Fitzgerald & Co. t rader, David Demos, was arrested in December and is scheduled to go to trial in April.

Barclays, Four Former Executives Charged Over Qatar Fundraising -- Barclays Plc and four former executives were charged with conspiracy to commit fraud during the bank’s 2008 capital raising from Qatar as it sought to avoid a bailout amid one of the most turbulent periods in financial history. The Serious Fraud Office said Tuesday former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-wealth chief Thomas Kalaris, and Richard Boath, the former European head of the bank’s financial institutions group, face charges along with Barclays. The four men are the most senior U.K. banking executives charged since the financial crisis, which sent banks across the globe scrambling to raise funds to cover billions in losses. The case relates to the nature of 322 million pounds ($408 million) in fees Barclays paid to the Qatar Investment Authority and a $3 billion loan facility it made available to the nation as part of side deals to the 12 billion-pound fundraising from Qatari and other investors. The five-year investigation is one of a number of lingering probes over the bank’s behavior dating back nearly a decade. Since the financial crisis, Barclays has faced issues ranging from the rigging of key benchmark rates to more recent scandals related to how executives dealt with whistle-blowers. The London-based bank said it is “considering its position” in relation to the allegations. Barclays said that one of its main subsidiaries may face additional charges in the case. Varley and Jenkins face three counts of conspiracy to commit fraud by false representation and unlawful financial assistance. Boath and Kalaris each face one fraud count. A London court hearing is scheduled for July 3.The charges relate to Barclays’s capital arrangements with Qatar Holding LLC, a subsidiary of the emirate’s QIA sovereign wealth fund, and Challenger Universal Ltd., an investment vehicle of the country’s then prime minister. In addition to the SFO, the Qatar deals are being reviewed by the Financial Conduct Authority, which re-opened its probe earlier this year after more documents came to light. The regulator had previously fined the bank 50 million pounds in relation to how it disclosed the fees paid to the Qataris. The FCA said that it was working closely with the SFO.

Sen. Elizabeth Warren calls for removal of all 12 Wells Fargo board members: Sen. Elizabeth Warren is calling for the ouster of 12 board members at Wells Fargo due to the fake accounts scandal that has rocked the bank. In a letter sent Monday to Federal Reserve Chair Janet Yellen, the Massachusetts Democrat said the scandal has "revealed severe problems with the bank's risk management practices." Warren said the central bank has the authority under federal statute to remove the members who were on the board as the matter transpired. "We have received the letter and plan to respond," a Fed spokesman told CNBC. In an agreement with multiple authorities last September, Wells agreed to pay a $185 million fine in conjunction with a scandal in which some 2 million client accounts were created without the customers' knowledge. More accounts may be involved, according to subsequent allegations. Even after paying the fine, Wells has continued to undergo reputational damage amid congressional inquiries and additional disclosures Warren, who has been a harsh critic, pointed out in the letter multiple instances where she believes the board at Wells failed customers. "The fake accounts scandal cost Wells Fargo customers millions of dollars in unauthorized fees and damaged many of their credit scores," the senator wrote. "The scandal also revealed severe problems with the bank's risk management practices — problems that justify the Federal Reserve's removal of all responsible Board members."

The Wrong Kind of Entrepreneurs Flourish in America -When most people use the word “rent,” they mean the price paid to live in a house or apartment. But when economists say “rent,” they mean money that one person extracts from another without producing anything of value. When the government taxes people to give subsidies to companies, those subsidies are a form of rent. A monopoly generates rents from being able to jack up prices without being threatened by competition. Sometimes the government allows companies to get a certain amount of rent -- for example, the royalties from patents, which we protect in an attempt to encourage innovation.Because it’s just a transfer from one person to another, rent doesn’t necessarily make an economy less efficient -- it’s just often unfair. But Robert Litan and Ian Hathaway, writing in Harvard Business Review, have a more dire hypothesis. They surmised that many American entrepreneurs are no longer looking for ways to produce more useful stuff, and are instead looking for new techniques for extracting money from each other and from the government. In other words, crony capitalism may be slowly cannibalizing productive capitalism.  Litan and Hathaway draw on an argument by the late economist William Baumol, who warned of the possibility that entrepreneurs could turn their energies toward useless rent-seeking. As examples, Baumol cited historical cases of businesspeople who found novel ways to sue their competitors out of existence. Litan and Hathaway, noting a slowdown in U.S. entrepreneurship, fear that something similar might be happening  today. If big companies are using new and creative ways to crush the competition, it’s bad news for economic dynamism -- it means fewer new products will be brought to market, and fewer hidebound old industries will be disrupted. It could also mean that U.S. industries have been getting more concentrated across the board:

 Key player in Operation Choke Point leaves DOJ, joins law firm -- A Department of Justice lawyer who played a key role in the Operation Choke Point saga has moved into private law practice. Michael Blume, the former head of the DOJ’s consumer protection branch, joined the New York office of Venable LLP as a partner. He oversaw the controversial effort to crack down on consumer fraud by pressuring banks to cut off certain merchants’ access to the U.S. payment syst. 

Two big names turn to blockchain in digital ID chase -  Microsoft and Accenture are partnering on a blockchain-powered digital-identification prototype as part of a public-private initiative that seeks to bring identity services to the 1.1 billion people around the world who lack any form of ID.The prototype — which uses Accenture’s capabilities in blockchain and large-scale biometric systems and runs on the Microsoft Azure cloud system — was unveiled Monday at the ID2020 Summit at the United Nations building in New York. The prototype does not store any personally identifiable information, instead tapping into existing “off-chain” systems when individual users grant access, the companies said. Banks have become deeply involved in digital-identity efforts. USAA, BBVA Compass, Capital One Financial, Deutsche Bank and other financial institutions have launched digital-identity projects. “People without a documented identity suffer by being excluded from modern society,” David Treat, a managing director in Accenture’s global blockchain business, said in a news release. “Our prototype is personal, private and portable, empowering individuals to access and share appropriate information when convenient and without the worry of using or losing paper documentation.” 

Fintech: Capturing the Benefits, Avoiding the Risks - Christine Lagarde, IMF -  Financial technology, or Fintech, is already touching consumers and businesses everywhere, from a local merchant seeking a loan, to the family planning for retirement, to the foreign worker sending remittances home.But can we harness the potential while preparing for the changes? That is the purpose of the paper published today by IMF staff, Fintech and Financial Services: Initial Considerations.What is Fintech precisely? Put simply, it is the collection of new technologies whose applications may affect financial services, including artificial intelligence, big data, biometrics, and distributed ledger technologies such as blockchains. While we encourage innovation, we also need to ensure new technologies do not become tools for fraud, money laundering and terrorist financing, and that they do not risk unsettling financial stability.Although technological revolutions are unpredictable, there are steps we can take today to prepare.The new IMF research looks at the potential impact of innovative technologies on the types of services that financial firms offer, on the structure and interaction among these firms, and on how regulators might respond.As our paper shows, Fintech offers the promise of faster, cheaper, more transparent and more user-friendly financial services for millions around the world.

Bitcoin firm's $40M round signals confidence in digital currency -- Blockchain, a long-running digital currency startup that offers one of the world's most popular bitcoin wallets, has raised $40 million. The funds will be used to make "big, bold bets in research and development," release new products and expand further internationally, the company's CEO, Peter Smith, said in a blog post on Thursday. Led by Lakestar and GV (formerly Google Ventures), the Series B funding round appears to be a sign of renewed interest in digital currency among investors. A bull market this spring saw bitcoin triple in price from about $1,000 to just over $3,000, while the total cryptocurrency market has increased by more than six times since the beginning of the year. Founded in 2011, Blockchain survived a period marked by scandals and shutdowns for bitcoin companies to become one of the market leaders. More than 14 million Blockchain wallets have been created, and the startup's technology has powered more than 100 million transactions, according to its website. The company's name refers to the groundbreaking technology underlying bitcoin and other cryptocurrencies. But to be clear, Blockchain is a bitcoin startup focused on digital currency applications, not a company building enterprise blockchain software.

 How liability stands in way of banks’ digital ID ambitions -- Like many bankers on both sides of the Atlantic, HSBC’s Dan Johnson sees great benefit in digital identity systems for financial institutions and their customers. But he also sees a big obstacle.  In a word: liability.“When things go wrong — not if, when things go wrong — who’s culpable?” Johnson, the head of digital identity at HSBC, said Monday, during a presentation at the Cloud Identity Summit in Chicago. “How is it going to work? What happens when bad actors get introduced into the system?”  Banks such as Capital One and U.S. Bank have been looking at ways to monetize the considerable work they do vetting customers by selling identity verification services to other businesses. An electrical utility wouldn’t have to ask a new customer to upload a driver’s license, for example, if her bank could just zap the data over; a site that sells wine online wouldn’t need to collect a user’s birthdate if the bank vouched that he was over 21. Banks in Canada and Europe already provide services along these lines. Conversely, if banks were allowed to rely on the work other organizations have done to identify customers they could eliminate redundant paperwork and spare the customer a branch visit to open another account. “All of that maintenance, all of that effort costs the bank a lot of money to do, but also it’s a horrible user experience,” said Johnson, who is based in London and joined HSBC in October 2014.In so-called federated identity systems, a user can log in to one website (say, Google or Facebook) and then access others without having to create another profile or type another username and password each time. The other sites trust that the identity provider has authenticated the user to a certain standard. Of course, using Facebook to connect to Candy Crush is decidedly lower stakes than using your Chase credentials to open a Wells Fargo account.

Alert: There are too many cybersecurity alerts | American Banker - Security alert overload, a source of frustration for bank security departments for some time, appears to have careened out of control. A survey of bank security chiefs by the research firm Ovum documents how high the daily volume of messages about possible security incidents has grown. A third of the respondents were from banks in North America. Over a third (37%) of banks, it turns out, receive more than 200,000 security alerts a day. In the research report, released Thursday, Ovum analyst Rik Turner called this a “signal-to-noise ratio” problem. It’s too much for humans to cope with, even at banks with the largest security teams. Adding more operators isn’t the solution, the problem needs to be solved through automation, Rich Baich, chief information security officer at Wells Fargo, said in an interview. “Volumes of alerts will continue to climb until organizations implement the appropriate technology and overlay them with operational innovations that allow the organization to rapidly sift through the mountains of data to find the actionable alerts,” Baich said. Raj Samani, chief technology officer of the security software firm McAfee, also sees these volumes as unmanageable. “There’s no way any organization can do the necessary analysis on 200,000 events a day,” he said in an interview. “Even if we take it back a touch, 61% of organizations receive in excess of 100,000 events a day. It’s far too much to deal with in a practical fashion. A number of those events will simply be ignored.”

Credit scores will change in July — what lenders can expect - Next month, the credit bureaus will have to drop information about tax liens and civil judgments from credit scores unless they can independently verify the data. Eva Wolkowitz, manager of the Center for Financial Services Innovation, and Sarah Davies, senior vice president of VantageScore, share their take on what this means for the credit scores lenders use.

Biggest online lenders don't always check key borrower details - Two of the biggest online consumer lenders don't always check whether borrowers are lying to them, and if they find errors in an application, they may still approve the loan. Prosper Marketplace doesn't verify key information like income and employment for around a quarter of the loans it makes, according to documents tied to bonds that Prosper sold last month. LendingClub Corp. said it only verified income about a third of the time for one of the most popular loans it made in 2016, according to company data seen by Bloomberg. If either lender finds mistakes in a borrower's application, such as overstated income, they may still go ahead with the loan, according to disclosures linked to bond sales from the companies, including documents for securities that LendingClub is offering now.Prosper may choose not to validate borrower information because the loan is relatively small, or the borrower is a repeat customer, said a person with knowledge of the matter, who wasn't authorized to speak on the record. Sarah Cain, a company spokeswoman, said in a statement that Prosper has "developed some of the industry's leading risk-mitigation controls" to find and prevent fraud. For 100 percent of its loans, the company verifies borrowers' identities and the existence of their U.S. bank accounts, Cain said. Alia Dudum, a LendingClub representative, said the company uses "machine learning and other techniques to build robust models that segment which borrower applications need verification and which do not." The disclosures shed new light on the risks that investors in online loans are taking in their pursuit of higher returns. Loans made on platforms including Prosper and LendingClub have gone bad faster than security underwriters had expected, according to data from Morgan Stanley, and most of the startups have seen their funding costs rise over the last year. These hiccups have come before any real broader sign of economic trouble. The startups are finding that disrupting banks isn't always easy.

What's next for CFPB's debt collection plan | American Banker --The Consumer Financial Protection Bureau's decision to drop a requirement that third parties would be on the hook for the accuracy of consumer debts they purchase is likely to speed the agency's often-delayed efforts to write new rules in the area.  The agency initially suggested it would subject third parties that purchased consumer debt to a requirement that they verify the information, but Director Richard Cordray signaled last week that the agency has changed course. By dropping that requirement, it paves the way for the agency to issue a new proposal governing third-party debt collectors by the end of the year.

Nine banks that have fallen short on the Fed's stress tests – (American Banker slideshow) - Following are notable cases where banks were tripped up by the Fed's stress tests either by flunking the numbers (or quantitative) part of the test or raising red flags on a qualitative basis.

Biggest U.S. banks clear first hurdle in Fed’s annual stress tests -  The 34 largest U.S. banks have all cleared the first stage of an annual stress test, showing they would be able to maintain enough capital in an extreme recession to meet regulatory requirements, the Federal Reserve said on Thursday. Although the banks, including household names like JPMorgan Chase & Co and Bank of America Corp, would suffer $383 billion in loan losses in the Fed's most severe scenario, their level of high-quality capital would be substantially higher than the threshold that regulators demand, and an improvement over last year's level. "This year's results show that, even during a severe recession, our large banks would remain well capitalized," said Fed Governor Jerome Powell, who leads banking regulation for the central bank. "This would allow them to lend throughout the economic cycle, and support households and businesses when times are tough." The Fed introduced the stress tests in the wake of the financial crisis to ensure the health of the banking industry, whose ability to lend is considered crucial to the health of the economy. Since the first test was conducted in 2009, big banks have seen losses abate, loan portfolios improve and profits grow. The banks that now undergo the exam have also strengthened their balance sheets by adding more than $750 billion in top-notch capital, the Fed said. Banks and their investors have been hoping the improvements would prompt the Fed to allow them to use more capital for stock buybacks and dividends, especially as the Trump administration is seeking to relax financial regulations. Wall Street analysts and trade groups quickly cheered the results on Thursday, saying regulators should feel comfortable easing tough rules put in place since the financial crisis.

Fed "Stress Test" Results Are Out: Every Bank Passes For Third Year In A Row --Moments ago the Fed released the first phase of its annual stress test which, once again, found that all thirty-four of the US largest banks "passed", exceeding minimum projected capital and leverage ratios under severely adverse scenarios, based on their projected ability to withstand economic shocks, which  as Bloomberg notes, shows that "firms are getting the hang of the once-dreaded reviews." The result marks the third straight year all firms cleared the minimum requirements in the exams’ first phase, begging the question just how "stressful" this test truly is.  Of the participant banks, every single one exceeded minimum thresholds, although Morgan Stanley trailed the rest of Wall Street on a key measure of leverage, the second year it performed worse than peers on this key metrics. During the second phase of last year's stress test the bank was forced to resubmit its plan to address a “material weakness”, before it was allowed to pay out capital to shareholders. Results from that round are due next week.

Successful disruptors want brick-and-mortar. Why don’t banks -  Digitally driven companies like AHAlife, The Arrivals and Amazon — which recently announced it is buying Whole Foods — are making headlines for creating innovative in-store experiences. By rethinking the retail store from the ground up, these brands are solving problems and gaining sales.This strategy is in marked contrast to banks, which are increasingly closing offices — and alienating customers. The idea of brick-and-mortar expansion in banking flies in the face of conventional wisdom. To up their digital game in the face of competition from nonbanks, banks are more likely to invest in mobile and online technology and close more of their underutilized branches. The numbers continue to support this trend. Wells Fargo, for instance, plans to close more than 400 bank branches by the end of 2018. That's on top of the 84 locations it pulled the plug on in 2016. Bank of America, meanwhile, closed 88 bank branches in 2015 and 171 in 2014. Over the next decade, as many as half of all U.S. bank branches could disappear, according to Keefe, Bruyette & Woods. In other words, banking — said to be at the greatest risk of major market disruption — is taking an opposite approach than some of the most admired online retailing disruptors. The contrast illustrates the moribund thinking that permeates the financial industry. Banks seem to be caught in the proverbial box, incapable of seeing branches as anything more than a sales channel. Large banks, the supposed digital leaders, are locked into the same mentality of seeing branches from a sales perspective: If sales are falling, cut branches. If return on investment is slipping, eliminate excess real estate.

Small banks could be erased from mortgage market thanks to Choice Act – Bank Think - The proposed Financial Choice Act recently passed by the House contains many positive reforms that are likely to help community banks and nondepository mortgage lenders. Yet one specific provision poses a major risk to small lenders. Ironically, legislation that supporters say is meant to hold Wall Street accountable could ultimately lead to a market in which smaller lenders cannot compete.In Title V, the bill contains a provision entitled “Safe Harbor for Certain Loans Held on Portfolio.” This particular section would essentially eliminate the regulatory requirement that lenders evaluate and document borrowers’ “ability to repay” in cases where a bank holds the loan on its books.  Once a borrower has made payments for two to three years, it is already somewhat self-evident that the borrower can afford the loan, and the ATR risks become negligible.Practically speaking, the effect of such a law would be devastating to smaller lenders incapable of supporting large portfolios. Larger lenders would have the ability to offer all types of loans — interest-only, stated-income, higher debt-to-income ratios, etc. — that are severely limited by the Dodd-Frank Act. However, the remainder of the market would not be able to compete. The reality is that larger banks could literally corner certain markets of borrowers and be able to offer a more diversified product mix to all borrowers of all sorts. Meanwhile, smaller lenders would legally not be able to compete unless and to the extent the big banks wanted it. The large banks would offer borrowers the ability to consider a variety of loan programs and change those programs during the loan process — something community lenders would not be able to offer. It is not so much that large banks would have a competitive advantage over community lenders as it is that they would face no competition whatsoever.

Policymakers forget duty to protect taxpayers from financial failures | TheHill: Amid the wreckage of the 2008 financial crisis and the ensuing “Great Recession,” there was one conclusion that everybody could seemingly agree upon: Taxpayers should never again be forced to cover the failed bets of the nation’s biggest banks. Nine years later, the steady campaign of lobbying and influence-peddling by those same "too-big-to-fail" institutions has had a powerful effect. In fact, it appears to have given policymakers who once spoke loudly about protecting taxpayers from future bailouts a serious case of amnesia.Consider several of the mortgage market “reform” proposals that legislators and some former government bureaucrats have offered in recent years. Surprisingly, almost all of them would require that taxpayers shoulder the costs of any future mortgage market crisis by providing an explicit government guarantee to trillions of dollars in qualified residential mortgage-backed securities. One such proposal was co-authored by two former Obama administration officials who now represent large financial institutions, Jim Parrott and Gene Sperling, along with Mark Zandi of Moody Analytics, who serves on the board of directors of a private mortgage insurer that suffered massive losses in the crisis. Michael Bright, a former Countrywide, Wachovia, BlackRock and PennyMac employee and former staffer to Senator Bob Corker (R-Tenn.), who was also a director of the Mortgage Bankers Association, put forward another proposal. Bright co-authored his plan with Ed DeMarco, the former acting director of the Federal Housing Finance Agency who currently works at the Financial Service Roundtable. Similar proposals from BlackRock, the Mortgage Bankers Association and two senators — Corker and Mark Warner (D-Va.) — also primarily represent the interests of large financial institutions. While all of these proposals purport to “protect the taxpayer,” in reality, they create a full and explicit government guarantee behind all qualifying mortgage-backed securities and employ gimmicks that falsely claim to hold investors responsible for a portion of losses — ahead of the taxpayer. As we witnessed during the 2008 crisis, during periods of economic distress, private investors withdraw liquidity and walk away from markets.

Buffett Stuns Market After Berkshire Acquires 38.4% Of Home Capital Group, Provides C$2 Billion Loan - In a stunning development involving Canada's largest alternative lender which as recently as a month ago was facing virtually certain insolvency after a furious depositor run drained it of liquidity, overnight Home Capital Group said billionaire Warren Buffett's Berkshire Hathaway will indirectly acquire C$400 million ($300 million) of the firm’s shares in a private placement through its Columbia Insurance unit, for about a 38.4% stake, and will aso provide a new C$2 billion ($1.50 billion) line of credit to its unit Home Trust Co, ending the Canadian lender's strategic review process. "Home Capital's strong assets, its ability to originate and underwrite well-performing mortgages, and its leading position in a growing market sector make this a very attractive investment," said Warren Buffett, Berkshire chairman and CEO. Aside from the rescue loan, Berkshire will make an initial investment of C$153.2 million to buy 16 million common shares and an additional investment of C$246.8 million to purchase 24 million shares through a private placement.  In total, Berkshire will hold an about 38.39% equity stake in Home Capital after buying 40 million shares at an average price of about C$10.00 per common share, a 33% discount compared with yesterday’s closing price of C$14.94.

Buffett follows Goldman, B of A model in bailout for Home Capital  - Warren Buffett has become the lender of last resort for Home Capital Group. The billionaire investor agreed to buy shares at a deep discount and provide a fresh credit line for the Canadian mortgage company, tapping a formula he used to prop up lenders from Goldman Sachs Group to Bank of America.Buffett’s Berkshire Hathaway will buy a 38% stake for about C$400 million ($300 million) and provide a C$2 billion credit line with an interest rate of 9% to backstop the embattled Toronto-based lender, Home Capital said late Wednesday. The interest on the one-year loan would net Berkshire at least C$180 million if it’s fully tapped.  “While the terms of the new credit line with Berkshire Hathaway remain harsh, we believe the purpose of this loan is to motivate Home Capital’s management to bolster their own funding sources," said Hugo Chan, chief investment officer at Kingsferry Capital in Shanghai, which owns shares in Home Capital. “This again shows Mr. Buffett’s masterful capital allocation skills," said Chan, citing his investment motto: “Be greedy when others are fearful.”Home Capital directors said on a conference call Thursday that the focus on the deal with Buffett's company was to restore investor and capital markets confidence. The financial backing from Buffett sent the stock higher Thursday, though it comes at a cost, in keeping with his past bailouts of financial firms. Buffett has buoyed some of the biggest U.S. corporations in times of trouble, including a combined $8 billion injection to prop up Goldman Sachs and General Electric when credit markets froze during the 2008 financial crisis.Berkshire’s purchase of $5 billion of Goldman Sachs preferred stock paid Buffett’s company an annual dividend of 10%, and the billionaire also got warrants he later used to get more than $2 billion of the bank’s shares in a cashless transaction. In the Home Capital deal, Buffett’s firm agreed to pay an average price of C$10 a share, a 33% discount to Wednesday’s closing price of C$14.94. Berkshire would become the largest shareholder in Home Capital, which has a market value of about C$1 billion.

Policymakers feel something new on housing finance reform – Optimism — Housing finance reform discussions are heating up and a plan to wind down Fannie Mae and Freddie Mac could become law sooner than many anticipate, according to a key senator involved in the discussions. “I think the stars may align … where you could actually see housing finance reform happen ahead of some of the Dodd-Frank reforms, because I think there is more consensus here,” Sen. Mark Warner, D-Va., said during a Mortgage Bankers Association conference this week.

5 ways Fannie and Freddie differ on rep and warrant relief - To ease buyback concerns and open up the credit box, Fannie Mae and Freddie Mac have begun offering upfront representation and warranty waivers when lenders run automated validations on crucial pieces of loan data. As time-sensitive purchase mortgages gain market share — and repurchases have waned — these tools provide the added benefit of making originations more efficient. Plus, differences in approach have created new competition between the GSEs. From vendor choice to valuations, here's a look at the key differences between Fannie and Freddie's upfront rep and warrant relief strategies. (slides)

Bond market worry could scuttle Paulson Fannie-Freddie plan -- A hedge fund proposal for freeing Fannie Mae and Freddie Mac from U.S. control is poised to face stiff opposition from investors who say it risks wrecking the mortgage-bond market. The Moelis & Co. blueprint, which firms including Paulson & Co. and Blackstone Group sponsored, calls for raising tens of billions of dollars in capital for the mortgage-finance companies. The plan, released earlier this month, would also limit the amount of federal money available to offset any Fannie and Freddie losses to $150 billion. Fannie and Freddie package mortgages into debt securities that most investors treat as being fully guaranteed by the U.S. government, in part because the companies are currently under federal control. Some investors argue that capping taxpayer rescue funds, while releasing Fannie and Freddie to private shareholders like Paulson could upend the $5 trillion market for the bonds they issue. By extension, that tumult might hurt homebuyers, whose low interest rates hinge on demand for the mortgage securities. “I don’t think you could sell virtually any of this debt overseas if it wasn’t government-guaranteed,” said Scott Simon, who until 2013 managed billions of dollars in mortgage-backed securities for Pacific Investment Management Co. Some of his former foreign clients would have reacted to a limited backstop by asking him to “sell it all,” he said. Fannie and Freddie play a pivotal role in the housing market by providing liquidity. They do so by purchasing mortgages from lenders and wrapping the loans into debt with assurances that investors will be made whole if borrowers default. U.S. regulators seized Fannie and Freddie during the financial crisis and bailed them out at least partly because of bond investors’ concerns over what would happen to their holdings if the companies collapsed. Paulson and the other investors hope the Trump administration will see the plan as meeting its housing-finance objectives. “The key to protecting taxpayers and limiting the amount of a government backstop is to build sufficient private capital,” the company said in a statement. “This is what the Moelis blueprint does.”

HUD releases $219M for affordable housing trust fund — The Department of Housing and Urban Development released $219 million in funds this week to provide housing for the country's lowest-income families. It marks the second year that the Housing Trust Fund, which was created by Congress in 2008, has distributed funds to the states to provide housing for the poor and homeless.

Fed's Fischer Says Prices 'High and Rising' Amid Low Rates -- Federal Reserve Vice Chairman Stanley Fischer said a long period of low interest rates may have contributed to "high and rising" home prices in several countries, cautioning against forgetting the lessons of the 2007-09 housing crisis."There is more to be done, and much improvement to be preserved and built on," Fischer said, speaking at an event in Amsterdam on Tuesday that was closed to the press. "The world as we know it cannot afford another pair of crises of the magnitude of the Great Recession and the Global Financial Crisis."Fischer emphasized that much has been achieved to shore up the global financial system since the last recession. His remarks struck a cautionary tone at a time when the value of residential real estate is climbing from Canada and the U.K. to Australia."House prices are now high and rising in several countries, perhaps as a result of extended periods of low interest rates," Fischer said in the prepared remarks, without specifying any particular frothy markets. He also noted that in the U.S., Fannie Mae, Freddie Mac and the Federal Housing Administration are "now the dominant providers of mortgage funding."Government support for housing should be explicit where it exists, he said, and its costs should be balanced against its benefits. Likewise, rules and expectations for mortgage modifications and foreclosure "should be clear and workable."In the U.S. and around the world, "much has been done," he said. "The core of the financial system is much stronger, the worst lending practices have been curtailed, much progress has been made in processes to reduce unnecessary foreclosures." Fischer made no mention of the path forward for monetary policy or the economic outlook in his speech.

Black Knight: Mortgage Delinquencies Decreased in May, Foreclosures at 10-Year Lows --From Black Knight: Prepayments (historically a good indicator of refinance activity) jumped 23 percent month-over-month, reaching their highest point so far in 2017

• Prepayments (historically a good indicator of refinance activity) jumped 23 percent month-over-month, reaching their highest point so far in 2017
• Delinquencies reversed course after calendar driven increase in April, falling 7.13 percent month-over-month
• April’s delinquency rate increase was primarily calendar-driven (due to both the month ending on a Sunday and March being the typical calendar-year low) and largely isolated to early-stage delinquencies
• Inventory of loans either seriously delinquent (90 or more days past due) or in active foreclosure continues to improve, with both hitting 10-year lows in May
According to Black Knight's First Look report for May, the percent of loans delinquent decreased 7.1% in May compared to April, and declined 10.8% year-over-year. The percent of loans in the foreclosure process declined 3.0% in May and were down 26.9% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 3.79% in May, down from 4.08% in April.The percent of loans in the foreclosure process declined in May to 0.83%. The number of  delinquent properties, but not in foreclosure, is down 226,000 properties year-over-year, and the number of properties in the foreclosure process is down 153,000 properties year-over-year.

New York City Mortgage Delinquencies “Elevated”: What’s the Likely Real Cause?  - Yves Smith - I normally don’t like criticizing a financial analyst who has worked hard to unearth some important data, but Keith Jurow has made the mistake of suggesting that a high level of mortgage delinquencies in the New York City means that the housing market may similarly not be as healthy as it appears to be in the rest of the US. The problem is that Jurow has failed to consider two distinctive features of the foreclosure process in New York. The first is that it is a judicial foreclosure state. A house cannot be taken from an owner without court approval. Second is that during the robosiging crisis, New York courts implemented a requirement to make sure that lawyers representing banks and mortgage servicers were submitting valid documents to the court. The effect of that procedural change was to slow the initiation and processing of foreclosures to a near halt. This confirmed what critics, including your humble blogger, had been saying for some time. In the years running up to the crisis, mortgage originators and packagers stopped adhering to the very strict procedures stipulated for conveying mortgages to securitization trust. For American lawyers, this would seem to be no biggie, since contractual screw ups happen all the time. You write a waiver, or negotiate some sort of fix with the other side (which might entail paying money if one party screwed up particularly badly) and life goes on. But for a whole host of reasons, mortgage securitization contracts, which govern how the mortgage securitizations are formed and then managed, are rigid, or in the words of Adam Levitin, “immutable”. If you didn’t get the mortgage into the securitization trust by a time certain, you couldn’t get it in later. That meant among other things that the servicer representing the trust would not have the right to foreclose because the trust didn’t have the mortgage. And exposing that trillions of dollars of mortgage securitizations might be empty bags, or had never been formed due to contract formation failure was something no one in any position of authority wanted exposed, since the consequences for banks and investors would be cataclysmic.

MBA: Mortgage Applications Increase in Latest Weekly Survey - From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 0.6 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending June 16, 2017.... The Refinance Index increased 2 percent from the previous week to its highest level since November 2016. The seasonally adjusted Purchase Index decreased 1 percent from one week earlier. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 9 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) decreased to 4.13 percent from 4.14 percent, with points increasing to 0.35 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Louisiana programs aim to rebuild thousands of flooded rentals -- Louisiana landlords with rental houses walloped by 2005's Hurricanes Katrina and Rita were eventually promised state help to rebuild: If they could get loans to rehab their properties, the state government would later reimburse them.This program was touted as key to reviving New Orleans' rental market. But not long after it got going, the 2008 financial crisis intervened. Banks simply wouldn't extend construction financing to those landlords, even with the state's repayment pledge.It was a major wake-up call for those running the state's "small rental" rebuilding program in 2008 and 2009. And although the country's financial climate has improved, the lessons learned after Katrina continue to guide Louisiana leaders as they again look to help landlords rebuild after a disaster, this time the 2016 floods. Baton Rouge saw 12,643 rental properties swamped last August, while 28,000 rentals statewide flooded.State officials say working with banks and landlords has become a major emphasis of Restore Louisiana's programs to help rebuild rentals. Three banks — Investar Bank, Whitney Bank and Woodforest National Bank — are already on board, all agreeing to extend financing to landlords who are successful applicants to the state's programs.The state is offering two large-scale programs. One is focused on neighborhood landlords who own a few rental properties, and the other is geared toward big apartment complexes. Whether the financial help is considered a loan or a grant depends on the applicant, and some of the loans are fully forgivable. In East Baton Rouge Parish, the city-parish government is also offering one small program for landlords who own just a few rentals. In order to apply for the state money, though, landlords need to have a bank willing to agree to extend construction financing to them. They can use one that has agreed to partner, or ask other banks if they are willing to participate as well. The programs will be run by the Louisiana Housing Corporation, which is another shift from contractor-run Road Home program.

FHFA House Price Index: Another Post-Recession High -- The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for April. Here is the opening of the report: U.S. house prices rose in April according to the FHFA seasonally adjusted monthly House Price Index (HPI). From April 2016 to April 2017, house prices were up 6.8 percent. For the nine census divisions, seasonally adjusted monthly price changes from March 2017 to April 2017 ranged from -0.1 percent in the East South Central division to +1.6 percent in the West South Central division. The 12-month changes were all positive, ranging from +4.7 percent in the West North Central division to +8.9 percent in the Mountain division. [Link to report] The chart below illustrates the monthly HPI series, which is not adjusted for inflation, along with a real (inflation-adjusted) series using the Consumer Price Index: All Items Less Shelter.

Report: Housing's Back, But Affordability is a Big Concern -- The U.S. housing market has largely returned to normal ten years after the housing crash, but shortages of homes for sale and rent are pushing costs higher for potential owners and tenants, according to the latest State of the Nation’s Housing report from the Joint Center for Housing Studies (JCHS) at Harvard University.“While the recovery in home prices reflects a welcome pickup in demand, it is also being driven by very tight supply,” said Chris Herbert,  managing director of the JCHS. The U.S. has added just nine million new units during the last decade, more than four million units less than the next-worst ten-year period in the late 1970s. “Any excess housing that may have been built during the boom years has been absorbed, and a stronger supply response is going to be needed to keep pace with demand—particularly for moderately priced homes.”Because fewer entry-level homes are being built, conditions are especially tight at the lower end of the market. Between 2004 and 2015, completions of smaller single-family homes (under 1,800 square feet) fell from nearly 500,000 units to just 136,000. At the same time, the number of townhouses started in 2016 (98,000) was less than half the number started in 2005. Labor shortages are a major reason for lower rates of new-home construction. Additionally, regulatory requirements have limited the supply of land available for both single- and multifamily housing. Those two factors work together to raise development costs and home prices.

Millennial homeownership to increase as gaps in education close --The young adult homeownership rate should increase by 1.5 percentage points over the next two decades as education levels among racial and ethnic minorities continues to rise. "Because education levels of racial and ethnic minorities have been rising steadily, and because income and wealth tend to increase with higher education levels, we would expect the probability of homeownership to go up for these groups," wrote researchers from the University of Southern California in a report sponsored by Fannie Mae. Education level is one indicator for the likelihood of a young adult to purchase a home, a previous research paper concluded.

NAR: "Existing-Home Sales Rise 1.1 Percent in May" - From the NAR: Existing-Home Sales Rise 1.1 Percent in May; Median Sales Price Ascends to New HighExisting-home sales rebounded in May following a notable decline in April, and low inventory levels helped propel the median sales price to a new high while pushing down the median days a home is on the market to a new low, according to the National Association of Realtors®. All major regions except for the Midwest saw an increase in sales last month. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, climbed 1.1 percent to a seasonally adjusted annual rate of 5.62 million in May from a downwardly revised 5.56 million in April. Last month's sales pace is 2.7 percent above a year ago and is the third highest over the past year.    ..Total housing inventory at the end of May rose 2.1 percent to 1.96 million existing homes available for sale, but is still 8.4 percent lower than a year ago (2.14 million) and has fallen year-over-year for 24 consecutive months. Unsold inventory is at a 4.2-month supply at the current sales pace, which is down from 4.7 months a year ago. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in May (5.63 million SAAR) were 1.1% higher than last month, and were 2.7% above the May 2016 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory increased to 1.96 million in May from 1.92 million in April.   Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

A Few Comments on May Existing Home Sales --Inventory is still very low and falling year-over-year (down 8.4% year-over-year in May).  I started the year expecting inventory would be increasing year-over-year by the end of 2017. That now seems unlikely, but still possible. More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases. The following graph shows existing home sales Not Seasonally Adjusted (NSA).Sales NSA in May (red column) were above May2016. (NSA) - and the highest for May since 2006. Note that sales NSA are now in the seasonally strong period (March through September).

May's existing-home sales fall 4% short of their potential -- The market for existing-home sales underperformed its potential by 3.8% because of the inventory shortage, according to First American Financial Corp. There could have been an additional 218,000 sales on a seasonally adjusted annualized rate during the month if the demand had been able to meet the supply, the First American Potential Home Sales Index determined.

Lawler: Single-Family Housing Production ‘Shortfall” All In Modestly Sized, Modestly Price Segment --A short note from housing economist Tom Lawler: The number of US single-family homes completed last year that had at least 3,000 square feet of floor area (222,000). was higher than any year in the 20th Century save for the year 2000, when 224,000 of such really large homes were completed. (graph)  LEHC Estimates Based on Latest and Historical Census “Annual Characteristics of Housing”

New Home Sales increase to 610,000 Annual Rate in May --The Census Bureau reports New Home Sales in May were at a seasonally adjusted annual rate (SAAR) of 610 thousand.
The previous three months combined were revised up. "Sales of new single-family houses in May 2017 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.9 percent above the revised April rate of 593,000 and is 8.9 percent above the May 2016 estimate of 560,000." The first graph shows New Home Sales vs. recessions since 1963. The dashed line is the current sales rate. Even with the increase in sales over the last several years, new home sales are still somewhat low historically. The second graph shows New Home Months of Supply. The months of supply was unchanged in May at 5.3 months. The all time record was 12.1 months of supply in January 2009. This is in the normal range (less than 6 months supply is normal). "The seasonally-adjusted estimate of new houses for sale at the end of May was 268,000. This represents a supply of 5.3 months at the current sales rate." On inventory, according to the Census Bureau: Starting in 1973 the Census Bureau broke inventory down into three categories: Not Started, Under Construction, and Completed. The third graph shows the three categories of inventory starting in 1973. The inventory of completed homes for sale is still low, and the combined total of completed and under construction is also low.  The last graph shows sales NSA (monthly sales, not seasonally adjusted annual rate).

May New Home Sales Beat Expectations --- This morning's release of the May New Home Sales from the Census Bureau came in at 610K, up 2.9% month-over-month from a revised 593K in April. Seasonally adjusted estimates back to February were also revised. The forecast was for 597K.  Here is the opening from the report:Sales of new single-family houses in May 2017 were at a seasonally adjusted annual rate of 610,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.9 percent (±13.0 percent)* above the revised April rate of 593,000 and is 8.9 percent (±21.9 percent)* above the May 2016 estimate of 560,000. The median sales price of new houses sold in May 2017 was $345,800. The average sales price was $406,400. [Full Report] For a longer-term perspective, here is a snapshot of the data series, which is produced in conjunction with the Department of Housing and Urban Development. The data since January 1963 is available in the St. Louis Fed's FRED repository here. We've included a six-month moving average to highlight the trend in this highly volatile series.

A few Comments on May New Home Sales - Bill Mcbride - New home sales for May were reported at 610,000 on a seasonally adjusted annual rate basis (SAAR). This was above the consensus forecast, and the three previous months combined were revised up. Overall this was a solid report. Sales were up 8.9% year-over-year in May.This graph shows new home sales for 2016 and 2017 by month (Seasonally Adjusted Annual Rate).  Sales were up 8.9% year-over-year in May.For the first five months of 2017, new home sales are up 12.2% compared to the same period in 2016.This was a strong year-over-year increase through May, however sales were weak in Q1 last year, so this was a somewhat easy comparison.And here is another update to the "distressing gap" graph that I first started posting a number of years ago to show the emerging gap caused by distressed sales.  Now I'm looking for the gap to close over the next several years.  The "distressing gap" graph shows existing home sales (left axis) and new home sales (right axis) through May 2017. This graph starts in 1994, but the relationship had been fairly steady back to the '60s.  Following the housing bubble and bust, the "distressing gap" appeared mostly because of distressed sales.   The gap has persisted even though distressed sales are down significantly, since new home builders focused on more expensive homes.

AIA: Architecture Billings Index positive in May - Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From the AIA: Design billings maintain solid footing, with strong momentum reflected in both project inquiries and design contracts Design services at architecture firms continue to project a healthy disposition on the construction industry as the Architecture Billings Index (ABI) recorded the fourth consecutive month of growth. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the May ABI score was 53.0, up from a score of 50.9 in the previous month. This score reflects an increase in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 62.4, up from a reading of 60.2 the previous month, while the new design contracts index increased from 53.2 to 54.8. “The fact that the data surrounding both new project inquiries and design contracts have remained positive every month this year, while reaching their highest scores for the year, is a good indication that both the architecture and construction sectors will remain healthy for the foreseeable future,” . “This growth hasn’t been an overnight escalation, but rather a steady, stable increase.”
• Regional averages: South (56.1), West (52.3), Midwest (50.4), Northeast (46.5)
• Sector index breakdown: mixed practice (55.8), multi-family residential (51.3), commercial / industrial (51.2), institutional (51.2)

Hotels: Hotel Occupancy down Year-over-Year --From STR: US hotel results for week ending 10 June The U.S. hotel industry reported mixed year-over-year results in the three key performance metrics during the week of 4-10 June 2017, according to data from STR.
In comparison with the week of 5-11 June 2016, the industry recorded the following:
• Occupancy: -0.8% to 73.0%
• Average daily rate (ADR): +1.5% to US$128.37
• Revenue per available room (RevPAR): +0.7% to US$93.73
The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.

S&P/Experian Consumer Credit Default Indices Show Composite Default Rate Drop To Five-month Low In May 2017 -- S&P Dow Jones Indices and Experian released today data through May 2017 for the S&P/Experian Consumer Credit Default Indices. The indices represent a comprehensive measure of changes in consumer credit defaults and show that the composite rate dropped four basis points from last month to 0.86%. In addition, the bank card default rate increased 18 basis points from April to 3.53%, auto loan defaults decreased five basis points from the previous month to 0.85%, and the first mortgage default rate dropped five basis points from April to 0.64%. Four of the five major cities saw their default rates decrease in the month of May. New York experienced the largest decrease, down nine basis points from April to 1.01%. Los Angeles reported 0.66% for May, dropping three basis points from the previous month. Dallas came in at 0.67%, down two basis points from April. Miami was down one basis point from April to 1.29%. At 0.97%, Chicago was the only city reporting a default rate increase of three basis points from the previous month. The National bank card default rate of 3.53% in May set a 48-month high. When comparing the bank card default rate among the four census divisions, the default rate in the South is considerably higher than the other three census divisions. The East South Central Census Region – comprised of Kentucky, Tennessee, Alabama, and Mississippi – has the highest bank card default rate. As per the Bureau of Labor Statistics, these states have some of the lowest median household income.

With New Patent, Amazon Will Collect As Much Customer Data As Google - A day after Amazon announced it would jump head-long into the bricks-and-mortar grocery business by agreeing to buy Whole Foods Market for $13.4 billion, reports from earlier this week about a new patent issued to the company are starting to make more sense. The patent, which was first reported by the Verge, is for wireless technology that can effectively block customers in Whole Food’s retail locations from “showrooming." "Showrooming" is the practice of using retail locations to test out products before buying them online - a practice that Amazon, by making it easy to comparison shop on a smartphone, helped pioneer.In its report, the Verge focuses on how the technology will help the company solve a problem that Amazon itself helped create – a problem that has plagued virtually every other traditional retailer. "Systems and methods for controlling online shopping within a physical store or retailer location are provided. A wireless network connection may be provided to a consumer device at a retailer location on behalf of a retailer, and content requested by the consumer device via the wireless network connection may be identified. Based upon an evaluation of the identified content, a determination may be made that the consumer device is attempting to access information associated with a competitor of the retailer or an item offered for sale by the retailer. At least one control action may then be directed based upon the determination.” But the technology described in the patent also raises serious concerns about the company’s plans for vastly expanding its capacity to collect and store customers' data. As MarketWatch’s Theresa Poletti reports, with this added capability, Amazon may soon be gathering as much data on its consumers now as Alphabet’s Google Inc.

May Real Median Household Income Little Changed from April, Last Report - The Sentier Research median household income data for May, released this morning, came in at $59,345. The nominal median dropped just $16 month-over-month and is up $479 year-over-year. In percentages, the latest month is down 0.03% MoM and up 4.4% YoY. Adjusted for inflation, the latest month is up $60 MoM and $1,414 YoY. The real numbers equate to changes of 0.1% MoM and 2.4% YoY.In real dollar terms, the median annual income is 0.3% higher ($154) than its interim high in January 2008. As we've pointed out in previous updates, the absence of real income growth in 2016 was undoubtedly a key contributor to the rise in populism that has become a major focus of contemporary journalism. The first chart below is an overlay of the nominal values and real monthly values chained in the dollar value as of the latest month. The red line illustrates the history of nominal median household, and the blue line shows the real (inflation-adjusted value). Callouts show specific nominal and real monthly values for the January 2000 start date and the peak and post-peak troughs.

U.S. Demographics: The Millennials Take Over --From the Census Bureau The Nation’s Older Population Is Still Growing, Census Bureau ReportsNew detailed estimates show the nation’s median age — the age where half of the population is younger and the other half older — rose from 35.3 years on April 1, 2000, to 37.9 years on July 1, 2016. “The baby-boom generation is largely responsible for this trend,” said Peter Borsella, a demographer in the Population Division. “Baby boomers began turning 65 in 2011 and will continue to do so for many years to come.” Residents age 65 and over grew from 35.0 million in 2000, to 49.2 million in 2016, accounting for 12.4 percent and 15.2 percent of the total population, respectively. This graph uses the data in the July 1, 2016 estimate released today. Using the Census data, here is a table showing the ten most common ages in 2010 and 2016. Note the younger baby boom generation dominated in 2010. By 2016 the millennials have taken over. The six largest groups, by age, are in their 20s - and eight of the top ten are in their 20s. My view is this is positive for both housing and the economy.

Whites Are The Slowest Growing US Group; Will Lose Majority Around 2040 -- The median age in most areas of the US is rising, while the population is growing more diverse, according to Census Bureau data released Thursday. America’s median age - the age where half of the population is half younger and half older - rose from 35.3 years on April 1, 2000, to 37.9 years on July 1, 2016, according to the data. Meanwhile, the population of White Americans is growing at a much slower rate than most minority groups: The number of whites living in the US increased by 0.5% last year to 256 million. By comparison, the Asian population grew 3% to 21.4 million, the black or African American population grew by 1.2% to 46.8 million and the Hispanic population grew 2% to 57.5 million. The US isn’t the only country struggling with an aging population. With average marriage ages rising, and economic circumstances making it more difficult for couples in developed economies like the US, Japan and Europe to afford children, many countries are facing a demographic crunch in social welfare programs. But nowhere is this more of an immediate problem than China, where – thanks to its decades-long one-child policy – the working-age population will soon fall off a cliff.

Millennials' Savings Rate Climbs For First Time In A Decade - America’s beleaguered millennials received a rare gift on Tuesday: A scrap of good news. Even with the aggregate student debt burden eclipsing the $1 trillion mark, and wages pressures across the US among the 18-26 demographic. Indeed, after almost a decade, Americans may finally be turning the corner on saving money. More than 30 percent of them say they have enough tucked away to cover six months’ worth of expenses—a seven-year high for this measure of financial calamity preparedness, a financial planning favorite, according to a Bloomberg report on the data. “Ever since the recession, we’ve noticed in surveys that people realize how important it is to have emergency savings, but for so many years post-recession they just weren’t making any progress,” said Greg McBride, chief financial analyst at, which released the survey on Tuesday. Now a broader swath of people are finally making headway, he said.

Chemical Activity Barometer "flat" in June -- Note: This appears to be a leading indicator for industrial production. From the American Chemistry Council: Chemical Activity Barometer Remains Steady.  The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), was flat in June following a 0.2 percent gain in May, and a 0.3 percent gain in April. This marks a slowing from the average 0.5 percent first quarter monthly gain.  Compared to a year earlier, the CAB is up 4.3 percent year-over-year, a modest yet continued slowing. All data is measured on a three-month moving average (3MMA). ...Applying the CAB back to 1912, it has been shown to provide a lead of two to fourteen months, with an average lead of eight months at cycle peaks as determined by the National Bureau of Economic Research. The median lead was also eight months. At business cycle troughs, the CAB leads by one to seven months, with an average lead of four months. The median lead was three months. The CAB is rebased to the average lead (in months) of an average 100 in the base year (the year 2012 was used) of a reference time series. The latter is the Federal Reserve’s Industrial Production Index.

Kansas City Fed Survey: Faster Growth in June --The Kansas City Fed Manufacturing Survey business conditions indicator measures activity in the following states: Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri, and northern New Mexico.Quarterly data for this indicator dates back to 1995, but monthly data is only available from 2001. New seasonal adjustment factors were introduced in January 2017 and slight revisions were made to previous data as a result.Here is an excerpt from the latest report: –The Federal Reserve Bank of Kansas City released the June Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity expanded further with strong expectations for future activity.“Firms reported faster growth in June than earlier in the second quarter,” said Wilkerson. “The share of factories planning to add workers over the next six months also rose solidly.” [Full PDF release here] Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.

Kansas City Fed: Regional Manufacturing Activity "Expanded Further" in June --From the Kansas City Fed: Tenth District Manufacturing Activity Expanded Further The Federal Reserve Bank of Kansas City released the June Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity expanded further with strong expectations for future activity. “Firms reported faster growth in June than earlier in the second quarter,” said Wilkerson.  “The share of factories planning to add workers over the next six months also rose solidly.” ..The month-over-month composite index was 11 in June, up from 8 in May and 7 in April. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. ... The Kansas City region was hit hard by the sharp decline in oil prices, but activity has been expanding as oil prices increased. It is too early to tell if the recent decline in oil prices will impact the Kansas City region again.

US PMIs Tumble To 9-Month Lows, Catching Down To Collapse In 'Hard' Data -- Following disappointment from China last week, and Europe this morning, US PMIs (both manufacturing and services) dropped and disappointed as it appears the lagged impact of China's slumping credit impulse are finally hitting the world's economies. With 'hard' data collapsing to 13 month lows, it is not surprising that 'soft' survey data is finally catching down with Manufacturing at 9-month lows.  Who could have seen this tumble in 'soft' data coming? Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said: “The economy ended the second quarter on a softer note. The June PMI surveys showed some pay-back after a strong May, indicating the second weakest expansion of business activity since last September. “The average expansion seen in the second quarter is down on that seen in the first three months of the year, indicating a slowing in the underlying pace of economic growth. While official GDP data are expected to turn higher in the second quarter after an especially weak start to the year (our recent GDP tracker based on various official and survey data points to 3.0% growth), the relatively subdued PMI readings suggest there are some downside risks to the extent to which GDP will rebound.“There are signs, however, that growth could pick up again: new orders showed the largest monthly rise since January, business optimism about the year ahead perked up and hiring remained encouragingly resilient. The survey is indicative of non-farm payroll growth of approximately 170,000. “Average prices charged for goods and services meanwhile showed one of the largest rises in the past two years, pointing to improved pricing power amid healthy demand.”

Exclusive: Lockheed nears $37 billion-plus deal to sell F-35 jet to 11 countries - Lockheed Martin Corp is in the final stages of negotiating a deal worth more than $37 billion to sell a record 440 F-35 fighter jets to a group of 11 nations including the United States, two people familiar with the talks said. This would be the biggest deal yet for the stealthy F-35 jet, set to make its Paris Airshow debut this week. The sale represents a major shift in sales practices from annual purchases to more economic multi-year deals that lower the cost of each jet. The pricing of the jets was still not final, although the average price of the 440 jets was expected to be $85 million, the people said on condition of anonymity because they were not authorized to discuss the negotiations publicly. The multi-year deal for the fighters will consist of three tranches over fiscal years 2018-2020. A Lockheed representative said the U.S. company does not discuss negotiations on contracts and said any deal involving a "block buy" would be announced by the U.S. government. A representative for the customers including the United States did not immediately respond to a request for comment on Sunday. Last week, representatives from 11 F-35 customer nations met in Baltimore, Maryland to discuss terms and toured a Northrop Grumman Corp facility in Maryland that provides equipment for the jet. Those nations included Australia, Denmark, Israel, Italy, Japan, the Netherlands, Norway, Turkey, South Korea, Britain and the United States.The memorandum of understanding being negotiated between Lockheed and the customers aims to procure 135 or more jets in fiscal year 2018 for delivery in 2020 for about $88 million per jet, the people said. In the subsequent fiscal years, 2019 and 2020, procurement would ramp up to 150 or more jets per year. 

Leaked recording: Inside Apple’s global war on leakers -- A recording of an internal briefing at Apple earlier this month obtained by The Outline sheds new light on how far the most valuable company in the world will go to prevent leaks about new products. The briefing, titled “Stopping Leakers - Keeping Confidential at Apple,” was led by Director of Global Security David Rice, Director of Worldwide Investigations Lee Freedman, and Jenny Hubbert, who works on the Global Security communications and training team. According to the hour-long presentation, Apple’s Global Security team employs an undisclosed number of investigators around the world to prevent information from reaching competitors, counterfeiters, and the press, as well as hunt down the source when leaks do occur. Some of these investigators have previously worked at U.S. intelligence agencies like the National Security Agency (NSA), law enforcement agencies like the FBI and the U.S. Secret Service, and in the U.S. military. The briefing, which offers a revealing window into the company’s obsession with secrecy, was the first of many Apple is planning to host for employees. In it, Rice and Freedman speak candidly about Apple’s efforts to prevent leaks, discuss how previous leakers got caught, and take questions from the approximately 100 attendees. The presentation starts and ends with videos, spliced with shots of Tim Cook presenting a new product at one of Apple’s keynotes, that stress the primacy of secrecy at Apple. “When I see a leak in the press, for me, it’s gut-wrenching,” an Apple employee says in the first video. “It really makes me sick to my stomach.” Another employee adds, “When you leak this information, you’re letting all of us down. It’s our company, the reputation of the company, the hard work of the different teams that work on this stuff.” 

Remember When Ford 'Cancelled' That Plant In Mexico? Well, They've Just Moved It To China - Back in January, Trump took a very public victory lap when Ford decided to scrap plans to build a $1.6 billion manufacturing facility in Mexico and invest in its Michigan facilities instead (we discussed it here: Trump Takes Victory Lap After Ford Cancels $1.6 Billion Mexican Expansion Plan As "Vote Of Confidence" In President-Elect).  As Ford announced at the time, the decision was sold to the public and the United Auto Workers as an opportunity to permanently shift production capacity, that would have otherwise been built in Mexico, back to Wayne, Michigan.  But, as Ford points out today, Trump's victory lap may have been premature as one of the first strategic actions taken by the company's new CEO, Jim Hackett, will be to relocate the company's 'Focus' production to China rather than Mexico. Exciting new Ford Focus on the way for North American customers beginning in 2019 with more technology, more space and a number of new Focus models. Next-generation Focus for North America will be globally sourced primarily from China – rather than Hermosillo, Mexico – with production starting in the second half of 2019. Current model production ends in mid-2018This manufacturing plan allows the company to further grow its leadership as an exporter and deliver world-class Focus to North American customers in a way that makes business sense – with no U.S. employees out of a jobFord is saving $1 billion in investment costs versus its original Focus production plan, improving the financial health of its Focus business and further improving manufacturing scale in China – all helping create a more operationally fit companyAnd while Ford has suggested that the move will not cost a single UAW worker his/her job here in the United States, we have our doubts as manufacturing capacity, much like cash, is somewhat unless Ford plans to massively grow market share and/or permanently increase overall demand, shifting production to China must mean th at production will decline somewhere else...we suspect that 'somewhere else' will be somewhere in the U.S.

Ford’s Big Bet: Americans, and Trump, Are Ready for Chinese Cars --Americans buy millions of dollars of stuff made in China every day.So why not add the Ford Focus to the mix? To hear Joe Hinrichs, Ford Motor Co.’s president of global operations, talk about the plan to move the car’s production to a factory in Chongqing, it’s no big deal. “Consumers care a lot more about the quality and the value than they do about the sourcing location,” Hinrichs said. “iPhones are produced in China and people don’t really talk about it.”Maybe so, but the Apple Inc. product has been manufactured there from the start, while Ford has never before made any of its vehicles in China for American buyers. In fact, the gambit by Jim Hackett, Ford’s new chief executive officer, will make the Focus the biggest automotive export ever from that country to the U.S.It’s a risk because “this is a big shift with a vehicle name that has been associated with the U.S. market,” said Jeff Schuster, an analyst with LMC Automotive. “But if the vehicle meets the needs of the buyer, I think it’s less of an issue than it used to be.” One American who might be displeased: President Donald Trump. He excoriated Ford last year when the company said it would start making its second-best selling U.S. car in Mexico. During the campaign, Trump also blasted China as a currency manipulator and for what he complained were its unfair trade practices. For now, Trump’s secretary of commerce, Wilbur Ross, seemed to give Ford a pass, saying in a statement that its Chongqing plan “shows how flexible multinational companies are in terms of geography.” Ross added, though, that the administration expected the flexibility to go both ways.

For thousands of U.S. auto workers, downturn is already here | Reuters: Wall Street is fretting that the U.S. auto industry is heading for a downturn, but for thousands of workers at General Motors Co factories in the United States, the hard times are already here. Matt Streb, 36, was one of 1,200 workers laid off on Jan. 20 - inauguration day for Republican U.S. President Donald Trump - when GM canceled the third shift at its Lordstown small-car factory here. Sales of the Chevrolet Cruze sedan, the only vehicle the plant makes, have nosedived as U.S. consumers switch to SUVs and pickup trucks. Streb is looking for another job, but employers are wary because they assume he will quit whenever GM calls him back.Layoffs at Lordstown and other auto plants point to a broader challenge for the economy in Midwestern manufacturing states and for the Trump administration. The U.S. auto industry's boom from 2010 through last year was a major driver for manufacturing job creation. The fading of that boom threatens prospects for U.S. industrial output and job creation that were central to President Trump's victory in Ohio and other manufacturing states. Last week the Federal Reserve said U.S. factory output fell 0.4 percent in May, the second decline in three months, due partly to a 2-percent drop in motor vehicles and parts production. Mark Muro, a senior fellow at the Brookings Institution, has compiled data from government sources that show the auto industry punching higher than its weight in job creation in recent years - accounting for between 60 percent and 80 percent of all U.S. manufacturing jobs added in 2015 and 2016. 

Weekly Initial Unemployment Claims increase to 241,000 --The DOL reported: In the week ending June 17, the advance figure for seasonally adjusted initial claims was 241,000, an increase of 3,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 237,000 to 238,000. The 4-week moving average was 244,750, an increase of 1,500 from the previous week's revised average. The previous week's average was revised up by 250 from 243,000 to 243,250.   The previous week was revised up.  The following graph shows the 4-week moving average of weekly claims since 1971.

Philly Fed: State Coincident Indexes increased in 36 states in May -- From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for May 2017. Over the past three months, the indexes increased in 44 states, decreased in five, and remained stable in one, for a three-month diffusion index of 78. In the past month, the indexes increased in 36 states, decreased in seven, and remai ned stable in seven, for a one-month diffusion index of 58. This is a graph is of the number of states with one month increasing activity according to the Philly Fed. This graph includes states with minor increases (the Philly Fed lists as unchanged). In May, 43 states had increasing activity (including minor increases).The downturn in 2015 and 2016, in the number of states increasing, was mostly related to the decline in oil prices.   The reason for the recent decrease in the number of states with increasing activity is unclear - and might be revised away. Here is a map of the three month change in the Philly Fed state coincident indicators. This map was all red during the worst of the recession, and almost all green now.

Amazon to Slash Jobs at Whole Foods, Dump Cashiers, Switch to Cheaper Products in Price War with Wal-Mart - Wolf Richter - Amazon expects to slash jobs and other costs at Whole Foods, “a person with knowledge of the company’s grocery plans” told Bloomberg. The ink isn’t even dry on the proposed deal, but synergies and efficiencies are already being trotted out.Amazon agreed to acquire Whole Foods for $13.7 billion, a 27% premium over the stock price on Thursday at close, and now intends to push down prices to slough off Whole Food’s nickname “Whole Paycheck,” and go after Wal-Mart Stores, Target, the German discounters Aldi and Lidl that are expanding in the US, Costco, and grocery store chains, such as Kroger and the private-equity owned chains Safeway and Albertson’s.The jobs to be cut include cashiers, who’d be replaced by Amazon’s own “Just Walk Out Technology,” now being tested at its Amazon Go convenience store in Seattle. When customers with the Amazon Go app on their smartphones walk into the store, the system logs them into the store’s network and establishes the connection to their Amazon account.The system uses “computer vision, sensor fusion, and deep learning,” Amazon says, to track everything customers pull off the shelf. If customers put an item back, the system removes it from the virtual cart in their app. When done, customers can just walk out without having to go through a check-out line. The system will automatically charge the customer’s account and send out a receipt.This system would replace the cashiers at Whole Foods, “according to the person familiar with the matter, who asked not to be named because the plans are private,” Bloomberg reported. So not the cumbersome self-check-out machines we’ve been grappling with for years, but something that would allow Amazon to differentiate itself. However, the main advantage would be a radical reduction in labor costs at Whole Foods stores. The “employees remaining would help improve the shopping experience, the person said,” according to Bloomberg. Amazon also expects to make a number of other changes, including to the merchandise the store carries, all in order to push down prices. Amazon would introduce private-label products – in addition to Whole Foods’ existing private-label products – to replace products that it considers too expensive. So get ready for Amazon’s food brands. These changes won’t take place until after the transaction has closed, which is expected to be later this year

Amazon CEO Jeff Bezos may be single-handedly killing inflation: Amazon CEO Jeff Bezos has changed the way the retail world operates. He may be about to exert a similar level of pressure on the economy and expectations for future price trends at the supermarket. At a time when central banks are starting to gird against an expected rise in inflation ahead, Bezos' move to acquire Whole Foods looks to be a significant counterweight. Analysts expect Amazon to rein in the famously high prices of the upscale grocery chain — "Whole Paycheck," as it is often called — which then could have a ripple effect through the industry. "Now Amazon is going to reshape the entire food retailing industry and it is highly deflationary — and this is an $800 billion grocery market we're talking about," David Rosenberg, senior economist and strategist at Gluskin Sheff, said in his daily note Monday. Rosenberg sees "a supermarket war of historic proportions" that will have a significant effect on an industry "that had already been confronted with escalating competitive pressures from the Web as well as foreign entrants." While some economists disagree that the merger's ramifications will be that dire, it certainly raises questions about how truly disruptive Amazon can be. Should the move put pressure on other chains, Wal-Mart and Target in particular, to lower their prices, it's hard to say where it all could end. If nothing else, it certainly adds a new wrinkle to the policy debate faced by the Fed and Washington lawmakers. 

The Wheels Come Off Uber - Yves Smith - Not surprisingly, the financial press has been all agog about the drama of Travis Kalanick’s forced departure from Uber’s CEO position yesterday, fixated on salacious insider details.That means journalists largely have ignored what ought to be the real story, which is whether Uber has any future. I anticipate that Hubert Horan will offer a longer-form treatment of this topic. Hubert had already documented, in considerable detail in his ten-part series, how Uber has no conceivable path to profitability. Its business model has been based on a massive internal contradiction: using a ginormous war chest to try to achieve a near-monopoly position in a low-margin, mature business that is fragmented geographically and locally.  Monopolies and oligopolies are sustainable only when certain factors are operative: the ability to attain a superior cost position through scale economies, which include network effects, or barriers to entry, such as regulations, very high skill levels, or high minimum investment requirements. Neither of these apply in the local car ride business. Even if Uber were able to drive literally every competing cab operator in the world out of business due to its ability to continue its predatory pricing, once Uber raised prices to a level where it achieved profits, new entrants (or revived old entrants) would come in. Uber will thus never be able to charge the premium prices (in excess of the level for a traditional taxi operator to be profitable) for the very long period necessary for Uber to merely be able to recoup the billions of dollars it had burned, mainly in subsidizing the cost of rides, let alone to achieve an adequate return on capital. And that’s before you get to the fact that systematically much higher prices would mean fewer fares and thus lower revenues and profit potential at the new pricing level.

Uber Can’t Be Fixed — It’s Time for Regulators to Shut It Down -- From many passengers’ perspective, Uber is a godsend — lower fares than taxis, clean vehicles, courteous drivers, easy electronic payments. Yet the company’s mounting scandals reveal something seriously amiss, culminating in last week’s stern report from former U.S. Attorney General Eric Holder. Some people attribute the company’s missteps to the personal failings of founder-CEO Travis Kalanick. These have certainly contributed to the company’s problems, and his resignation is probably appropriate. Kalanick and other top executives signal by example what is and is not acceptable behavior, and they are clearly responsible for the company’s ethically and legally questionable decisions and practices. But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules. Uber brought some important improvements to the taxi business, which are at this point well known. But by the company’s launch, in 2010, most urban taxi fleets used modern dispatch with GPS, plus custom hardware and software. In those respects, Uber was much like what incumbents had and where they were headed. Nor was Uber alone in realizing that expensive taxi medallions were unnecessary for prebooked trips — a tactic already used by other entrepreneurs in many cities. Uber was wise to use smartphone apps (not telephone calls) to let passengers request vehicles, and it found major cost savings in equipping drivers with standard phones (not specialized hardware). But others did this, too. Ultimately, most of Uber’s technical advances were ideas that competitors would have devised in short order. With regular noncommercial cars, Uber and its drivers avoided commercial insurance, commercial registration, commercial plates, special driver’s licenses, background checks, rigorous commercial vehicle inspections, and countless other expenses. With these savings, Uber seized a huge cost advantage over taxis and traditional car services. Uber’s lower costs brought lower prices to consumers, with resulting popularity and growth. But this use of noncommercial cars was unlawful from the start. In most jurisdictions, longstanding rules required all the protections described above, and no exception allowed what Uber envisioned.

Uber Spinning Out of Control: Employees Eyeing Exits as Press (Finally) Starts to Question Business Model -- Yves Smith - The lead story at the Wall Street Journal describes how Uber, with its top ranks decimated and the company now run by an unwieldy 14 member committee, is begging employees to stay. From the Journal: Months of unflattering headlines and an investigation into allegations of sexual harassment and sexism at Uber have taken a toll. In interviews, some employees expressed sadness over the company’s now-tainted reputation, while others said they were upset with management for allowing its dirty laundry to be aired. Some said they were hopeful Uber could restore its reputation after adopting nearly 50 changes to improve its culture that resulted from an internal investigation into workplace conduct by former U.S. Attorney General Eric Holder’s law firm…Some employees said the uncertainty has made it hard to work, especially as they have watched co-workers pack up their desks. Others said they are considering leaving, fearful that Uber could face a struggle to raise new funds. On the other hand, some worry about missing on out a big payday if they leave before their stock options fully vest, which takes four years, or before a reinvention of the company culture. The Wall Street Journal pointed out that waiting for stock options to vest could lead some workers to stay on, but that Uber made them less juicy as its valuation skyrocketed. From a New York Times story earlier this month: In general, employees who have worked at the company four years and have been granted stock options meaning the ability to buy a certain number of shares from the company at a low price — may sell part of those options back to Uber at a locked-in price. Uber pays the employee for those options over several months. The idea behind the program is that employees can turn some of their paper wealth into cash while still working at Uber. If they quit before the entire amount is paid, the payments stop. Uber now has about 14,000 employees. As Lambert demonstrated this week in Links, none of the initial stories on Kalanick’s ouster as CEO questioned Uber’s business model or lack of a credible path to profits. That’s starting to change. From a Financial Times story, Can Uber ever make money?:…the challenge now will be to shift Uber’s model from one that has been very successful at revenue growth, to one that is more financially sustainable and, eventually, profitable.Some economists say there was no obvious way to do that…

I learned the hard way why non-competes are bad for journalists -- There’s a silent scourge creeping around newsrooms, one with origins in trade publications and tech-led new media: non-compete agreements. In their most typical form, these agreements bar reporters and editorial staff members from working at competing publications for a period of six months to a year after they leave. Publications that use them argue they need non-competes to cover the cost of the training they provide employees. Some even argue their reporters are privy to trade secrets. This is absurd. For the media companies that wield them, non-compete agreements are a risk-free insurance policy against a competitive labor market. For the reporters who sign them, they’re just another barrier to job mobility in an increasingly precarious industry. These contracts keep beat reporters from the few jobs they are most qualified for and have the best chance of getting. They effectively ask reporters to commit to six months of unemployment to change jobs within their profession. I know this because a non-compete I signed on my first day at legal news website Law360 in 2013 later derailed my career. After two years and a promotion at Law360, during which time colleagues left for a variety of competing publications, I accepted an offer in the fall of 2015 to join the Reuters legal news team covering the business of law. I considered the move to be a step up in my career. During my second week at the new job, a lawyer from Law360 wrote in a letter to the general counsel of Reuters that I was at risk of violating my non-compete and nondisclosure agreement. He asked that Reuters “take immediate steps to ensure” I did not use the “critical and sensitive proprietary information” I obtained at Law360. I never found out what Law360 meant by that: There’s no secret sauce to scouring court filings in search of a good story. Reuters fired me two days later, citing my lack of disclosure of the non-compete. Today as a freelancer, I’m making about 40 percent less than my starting salary at Reuters, which included generous overtime and health insurance, among other benefits. 

One Ohio Town’s Immigration Clash, Down in the Actual Muck — Migrant workers arrive here every spring to work in the “muck,” which is what everybody calls the fertile soil that makes this part of Ohio the perfect place to grow radishes, peppers, cucumbers and leafy greens. The temporary workers can be seen planting, weeding and, later in the season, harvesting crops that will be sold at national supermarket chains.But there’s trouble in the muck this growing season.   But after a local newspaper published an article about the event in March, a far less welcoming response emerged, one rooted in the vigorous national debate over illegal immigration that brought President Trump to office. Some Willard residents complained that Hispanic workers did not deserve any special treatment, and that those without papers ought to be met not with open arms, but rather with handcuffs.  For decades, the farmers have relied on migrant labor from spring to fall. Depending on how quickly they work, field workers can earn up to $18 an hour, compared with Ohio’s $8.15 minimum hourly wage. Many return year after year to do the strenuous seasonal work, sometimes in temperatures that soar to 100 degrees. (Local residents largely steer clear.)Seven in 10 field workers nationwide are undocumented, according to estimates by the American Farm Bureau Federation. In Willard, it is probably no different.“Without the Hispanic labor force, we wouldn’t be able to grow crops,” said Ben Wiers, a great-grandson of the pioneer Henry Wiers, who bought five acres here in 1896, noting that he considers many workers at Wiers Farms, which cultivates more than 1,000 acres of produce under the Dutch Maid label, to be friends. But beefed-up border enforcement has slowed the flow of workers who enter the country illegally. Last year, a shortage forced Mr. Wiers and the other growers to leave millions of dollars’ worth of produce in the fields.

Rigged. Forced into debt. Worked past exhaustion. Left with nothing.-- A yearlong investigation by the USA TODAY Network found that port trucking companies in southern California have spent the past decade forcing drivers to finance their own trucks by taking on debt they could not afford. Companies then used that debt as leverage to extract forced labor and trap drivers in jobs that left them destitute.If a driver quit, the company seized his truck and kept everything he had paid towards owning it.If drivers missed payments, or if they got sick or became too exhausted to go on, their companies fired them and kept everything. Then they turned around and leased the trucks to someone else.Drivers who manage to hang on to their jobs sometimes end up owing money to their employers – essentially working for free. Reporters identified seven different companies that have told their employees they owe money at week’s end.The USA TODAY Network pieced together accounts from more than 300 drivers, listened to hundreds of hours of sworn labor dispute testimony and reviewed contracts that have never been seen by the public.Using the contracts, submitted as evidence in labor complaints, and shipping manifests, reporters matched the trucking companies with the most labor violations to dozens of retail brands, including Target, Hewlett-Packard, Home Depot, Hasbro, J.Crew, UPS, Goodyear, Costco, Ralph Lauren and more. Among the findings:

  • Trucking companies force drivers to work against their will – up to 20 hours a day – by threatening to take their trucks and keep the money they paid toward buying them. Bosses create a culture of fear by firing drivers, suspending them without pay or reassigning them the lowest-paying routes.
  • To keep drivers working, managers at a few companies have physically barred them from going home. More than once, Marvin Figueroa returned from a full day’s work to find the gate to the parking lot locked and a manager ordering drivers back to work.
  • Employers charge not just for truck leases but for a host of other expenses, including hundreds of dollars a month for insurance and diesel fuel. Some charge truckers a parking fee to use the company lot. One company, Fargo Trucking, charged $2 per week for the office toilet paper and other supplies.
  • Drivers at many companies say they had no choice but to break federal safety laws that limit truckers to 11 hours on the road each day. Drivers at Pacific 9 Transportation testified that their managers dispatched truckers up to 20 hours a day, then wouldn’t pay them until drivers falsified inspection reports that track hours. Hundreds of California port truckers have gotten into accidents, leading to more than 20 fatalities from 2013 to 2015.
  • Many drivers thought they were paying into their truck like a mortgage. Instead, when they lost their job, they discovered they also lost their truck, along with everything they’d paid toward it. Ho Lee was charged more than $1,600 a month for a truck lease. When he got ill and missed a week of work, he lost the truck and everything he’d paid.

 Truck-driving is a modern form of indentured slavery -- USA Today undertook a year-long investigation into southern California truckers, so-called "independent contractors" who form a critical link from America's busiest port to the rest of the country, and found that drivers are sunk into deep pits of debt due to predatory contracts they signed under duress, debts that are used to force them to work unsafe hours, falsify their work records, and sometimes bring home literal pennies a week after working 80+ hours (some drivers even finish the week in deeper debt, owing money to the companies they "contract" for). . The companies whose goods these truckers move include some of America's biggest brands, like J Crew, Ralph Lauren, LG, Home Depot, and Target, and these companies wash their hands of any responsibility for ensuring that their shipping contractors are not engaged in criminal, exploitative, systematic theft of wages and unsafe working conditions. The current situation stems from a California rule that banned out-of-date, polluting diesel trucks from its ports. Trucking companies bought all-new trucks with better emissions profiles, then forced their workers to sign contracts through which they assumed all debt for this new fleet, with payments to be taken from their paychecks. The workers were made to sign on pain of immediate termination, without access to a lawyer or advisor, and many didn't speak or read English well enough to understand the contracts. The contracts allow the company to terminate the truckers' employment at will, or to deny them shifts. Workers who miss any work, or a single payment, lose all the payments they've put into their trucks, and many report watching years' worth of wages disappear at the stroke of a pen because they refused to go out on the road for 20 hour shifts, or took a few days off work for a parent's funeral. Desperate drivers take out second mortgages on their homes and borrow from relatives to make payments on their trucks, but a driver who falls out of favor with a boss can be "starved" out of his rig if the boss just refuses to give him any shifts -- eventually, the driver will simply run out of places to borrow money for payments on the truck (and the drivers are contractually forbidden from driving for other companies, even if the company they work for won't give them any hours).

Seattle woman killed by police while children were home after reporting theft - Seattle police shot and killed a mother of four inside her apartment in the presence of her young children after she called law enforcement to report a burglary. The death of 30-year-old Charleena Lyles, who police say was carrying a knife, has sparked outrage across the country, with critics decrying the shooting as another example of US law enforcement using excessive force against black Americans.  Two officers fired at Lyles shortly after arriving to investigate a burglary on Sunday morning, and the mother was pronounced dead before she could be taken to a hospital, according to police. Law enforcement on Monday released a four-minute audio recording of the fatal encounter, which captures an officers saying, “We need help” and “Get back! Get back!” before they fired a stream of bullets. The Seattle Times identified the woman killed as Lyles and said she was pregnant and that t hree children, ages one, four and 11, were at home during the shooting. Police said the youth were not injured, and that other family members are taking care of them. Police called Lyles a “suspect” in an initial statement, though the Times reported that Lyles was the one who had made the call to report a burglary.  “They didn’t only take one life – they took two lives,” Wanda Cockerhern, a cousin who helped raise Lyles, told the Guardian on Monday. “And they destroyed the four lives of her children.”

Pew: 44 percent of Americans know someone who has been shot | TheHill: Almost half of Americans know someone who has been shot, according to a survey released Thursday by the Pew Research Group. The report found that 44 percent of U.S. adults know someone personally who has been shot either accidentally or on purpose. An additional 25 percent said they or their family had been threatened with a gun at least once. According to the study, there's broad support among American adults for stricter gun laws. Eighty-nine percent say people with mental illnesses should be banned from buying guns, and 83 percent support banning guns for those on federal watchlists. In addition, 84 percent support requiring background checks for private gun sales and firearms shows. Seventy-one percent support a federal registry to track gun sales, while 68 percent support a ban on assault weapons. Fifty percent of Americans said gun violence was "a very big problem," while an additional 33 percent said it was a "moderately big problem." Those numbers are deeply divided between gun owners and people who don't own firearms. Just 33 percent of gun owners see gun violence as "a very big problem," while that number spikes to 59 percent among non-owners. Overall, the public is deeply divided over the effect of guns on crime. About 35 percent said more gun ownership would lead to higher crime rates, while 33 percent said it would lead to less crime. Thirty-two percent said it would have little effect.

Guns kill 1,300 US children every year, study finds - BBC - About 1,300 US children under the age of 17 die from gun-related injuries per year, a government study has found. Researchers at the US Centers for Disease Control and Prevention (CDC) also found that guns seriously wounded about 5,800 children each year.Boys accounted for 82% of all child firearm deaths while black children were 10 times more likely to be killed by a gun, according to the study.More than half of these deaths were homicides while 38% were ruled suicide.The study, published in Pediatrics on Monday, also found 6% of firearm-related deaths were fatalities from accidental gun injuries.  "Firearm injuries are a leading cause of death among US children aged one to 17 years and contribute substantially each year to premature death, illness and disability of children," said CDC's Katherine Fowler, who led the study."About 19 children a day die or are medically treated in an emergency department for a gunshot wound in the US," she told Reuters.CDC researchers examined national data in what they describe as "the most comprehensive examination of current firearm-related deaths and injuries among children in the United States to date".  The study found a 60% increase in gun suicides from 2007-15, according an analysis of national injury records. Suicide was most likely to occur when children were dealing with stressful circumstances or relationship problems with a boyfriend, girlfriend or family member, the study revealed. White children and Native American children were four to five times more likely to die by firearm suicide. Accidental gun deaths appeared to happen most frequently among children playing with firearms.

Is American Childhood Creating an Authoritarian Society? - American childhood has taken an authoritarian turn. An array of trends in American society are conspiring to produce unprecedented levels of supervision and control over children’s lives. Tracing the effects of childrearing on broad social outcomes is an exercise in speculation. But if social scientists are correct to posit a connection between childrearing and long-term political outcomes, today’s restrictive childhood norms may portend a broader regression in our country’s democratic consensus. Since the early 1980s, American childhood has been marked by a turn toward stringent adult control. Support for “free range” childhood has given way to a “flight to safety” characterized by unprecedented dictates over children’s routines.More so than any other generation, parents and educators have instilled in millennials the idea that, as Greg Lukianoff and Jonathan Haidt put it, “life is dangerous, but adults will do everything in their power to protect you from harm.” Indeed, strong social pressures have so hardened against parents who believe in the value of a free, unsupervised childhood that psychologist Peter Gray likens them to past Chinese norms on foot binding.  Hard numbers illustrate these trends:

  • The amount of free time school-aged children enjoyed plummeted from 40 percent in the early 1980s to 25 percent by the mid 1990s.
  • The time young children spend in school jumped from 5-6 hours in the early 1980s to almost 7 hours beginning in the early 2000s.
  • By 2006, some 40 percent of schools had either eliminated recess or were considering doing so.

So too, do more qualitative indicators. Recent studies supported by the Alliance for Childhood found that kindergartens have “changed radically in the last two decades.” Exploration, exercise, and imagination are being deemphasized and play has “dwindled to the vanishing point.” Instead, kindergartens are introducing “lengthy lessons” and “highly prescriptive curricula geared to new state standards and linked to standardized tests”—curricula often taught by teachers who “must follow scripts from which they may not deviate.” Even the toys parents are choosing to buy for their kids betray a skepticism of childhood independence. As the National PTA observes, parents since the mid-1980s have purchased fewer multi-purpose, unstructured toys like clay and blocks that “encourage play that children can control and shape to meet their individual needs over time.”

I moved my kids out of America. It was the best parenting decision I’ve ever made. -- "I really wish you'd reconsider your decision," my neighbor Steve said. He strode over, hands on hips, and added, "I hear it's dangerous down there. I'm really worried about your kids." The decision he was referring to was the radical idea that my husband and I had settled on. We were moving, along with our two young sons — at age 7 and 9 — from small town U.S.A. to a modest mountain village in Ecuador. Steve wasn't the only one with concerns. My brother, who normally lauded my parenting choices, was ominously silent on this one, afraid that talking about it would make it real, give it life and validation. Some of our friends turned on us, calling us terrible parents, or saying we were unpatriotic. Why would we want to leave the land of the free and the home of the brave? And where was Ecuador, anyway? Somewhere near Mexico? Africa? We were taking our children to a country that most Americans can't even point to on a map. What were we thinking? Well, we were thinking a lot of things, and taking a number of factors into consideration. In America, it seemed every third child was taking pharmaceuticals to treat behavioral issues, anxiety, or depression. High school students were unloading automatic weapons into their classmates. Opioid use was reaching all new highs. Bank executives were defrauding their customers and Wall Street was walking an increasingly thin tight rope. It felt like The American Dream as we knew it was all but gone, having transformed into a shadowy unknown. We fretted about what the future would hold for our family. We thought maybe, just maybe, a simpler lifestyle somewhere else was the answer. And so, in 2011, our family walked up to the edge of the unknown, took a deep breath, and jumped.

Illinois owes more than $1 billion to schools --Republican Gov. Bruce Rauner often points out that despite the state budget impasse, elementary and high schools are better off than when he took office, thanks to a $750 million surge in state funding.  Left unsaid: The record-setting budget stalemate means the state is more than $1 billion behind in paying school districts the money it promised for the school year that ends this month.Rauner twice signed into law spending bills for schools in the hopes of shielding students, parents and teachers from the budget fight at the Capitol. But 2 years of budget-free spending has created a $15 billion pile of unpaid bills, with the money owed to schools caught up in the mix. Now district superintendents say the state’s financial troubles are spilling over into their books – and could have consequences in the classroom.The complaint from schools – a key constituency courted by Rauner as he’s billed himself Illinois’ education governor – is one of the few developments that’s changed the dynamics of the budget stalemate since last June, when Rauner and lawmakers settled on a stopgap spending plan that boosted school funding but failed to address the state’s larger taxing-and-spending imbalance.Superintendents say they’re now acting as creditors for the state: They spent money that was promised to them, for things like bilingual education and transportation, but the dollars to pay for them never came. To keep from going into the red themselves, they’ve had to trim expenses elsewhere, by holding off on buying supplies, computers and other items they aren’t sure they’ll have the money to pay for.

Rauner, schools play blame game as CPS takes out costly $275M loan -  Chicago Public Schools closed an expensive deal on Monday to borrow some of the cash officials said the district needs to scrape through June and pay the bulk of a massive contribution to teacher pensions. Schools officials turned to JPMorgan to purchase $275 million in "grant anticipation notes," a short-term loan meant to be repaid with hundreds of millions of dollars worth of state education aid that's been jammed up by the state's continued lack of a budget.Officials planned to borrow closer to roughly $400 million. Additionally, the district said it would pursue another $112 million loan to make up the difference. The district said the $275 million "creates sufficient cash" for CPS to meet its obligations to the Chicago Teachers' Pension Fund, but did not explain how that was possible. Instead, CPS' top financial officer blamed Republican Gov. Bruce Rauner for an enormous state budget backlog that's held up more than $1 billion in promised aid for school districts.

No buyers for Chicago school bonds causes rates to hit 9% —Chicago's school system is paying bond-market penalties similar to those seen during last decade's credit crisis.The junk-rated district, reeling from escalating pension costs and fallout from the Illinois budget gridlock, has been stuck paying punitive interest rates on $167.5 million of adjustable-rate bonds after PNC Capital Markets failed in March to resell the securities once previous owners sold them. The rate on the bonds, which are supposed to stay extremely low because investors can resell them to banks periodically, jumped to a maximum 9 percent on March 1 from 4.64 percent the week before and has stayed there ever since, according to data compiled by Bloomberg.  In Chicago's case it reflects how skittish investors have become about holding the debt of the cash-strapped school system. "Chicago Public Schools has been unable to crate a fiscally responsible budget and it relies on outside sources that, as we see, sometimes comes through and sometimes don't," said Matt Dalton, chief executive officer of Rye Brook, which manages $6 billion of municipal bonds, including about $3 million of insured Chicago school debt. "That's unsettling investors." The school district agreed this week to pay a rate of 6.39 percent -- subject to adjustment -- for a short-term $275 million loan from JPMorgan Chase & Co. to help make a pension payment and cover the cost of staying open through the end of the school year. The schools didn't receive $215 million more in state aid to make the retirement-fund contribution after a measure was vetoed by Governor Bruce Rauner. Illinois has failed to pass a budget for more than two years as the Republican governor and Democrat-led legislature battle over how to close the state's chronic budget deficits.

What happened to promises of ‘local control’ over education? | TheHill: When the Every Student Succeeds Act (ESSA) was enacted to replace the hated No Child Left Behind, the new legislation’s supporters trumpeted that henceforth, control over education would reside with the states. “With this bill,” Speaker Paul Ryan promised, “we are sending power back to the people.” President Donald Trump ran his campaign on the issue of local control, and as president has directed Education Secretary Betsy DeVos to restore it. She has promised to do so: “Let us continue to move power away from Washington, D.C, and into the hands of parents and state and local leaders.” But the warning signs on the horizon are beginning to obscure the view of all this local control. First came news that the U.S. Department of Education (USED) may deny Alabama’s request to replace a student assessment that even USED admitted is problematic. Now Education Week reports that USED has told three other states (Delaware, Nevada, and New Mexico) that they must provide a raft of additional information before their mandatory ESSA state plans can be approved. Much more of this local control, and USED will have to hire new bureaucrats just to keep up. Grassroots activists warned for months when ESSA was under construction that it didn’t restore state autonomy as its proponents claimed. The most glaring example of continuing federal control was ESSA’s mandate that each state submit a “state plan” (actually a federal plan) describing in detail how the state planned to comply with all the federal requirements that supposedly would no longer be there. The grassroots weren’t comforted by Secretary Betsy DeVos’s early pronouncement that approving state plans was “a good and important role for the federal government.” Now we’re seeing how that’s playing out. As Alabama, Delaware, Nevada, and New Mexico can attest, the new sheriff looks a whole lot like the old sheriff. 

Why Is PBS Airing Right-Wing-Sponsored School Privatization Propaganda? -- Secretary of Education Betsy DeVos and her department have pushed for an expansion of privatized school choice programs in the proposed budget for fiscal year 2018, particularly in the form of private school vouchers. Now a propagandistic three-part documentary series called School Inc. will help DeVos in her efforts to gain public support for expanded private school choice options.   . Vouchers are problematic for many reasons, including their history of allowing for discrimination against LGBTQ, disabled, and special education students, their impact on reducing public education funding, and their ineffectiveness in boosting academic achievement. Despite these problems, private school vouchers are a long-standing priority of the corporations and right-wing funders backing the education privatization movement. The late Andrew Coulson, long-time head of the Cato Institute’s Center for Educational Freedom, was the driving force behind School Inc. In addition to School Inc.’s roots in the radical, libertarian Cato Institute, education historian and former U.S. Assistant Secretary of Education Diane Ravitch found that the film was funded by a number of arch-conservative foundations with ties to the “dark money ATM” DonorsTrust and the Ayn Rand Institute. Ravitch has prescreened School Inc. and provided this scathing review to The Washington Post: This program is paid propaganda. It does not search for the truth. It does not present opposing points of view. It is an advertisement for the demolition of public education and for an unregulated free market in education. PBS might have aired a program that debates these issues, but “School Inc.” does not. Why would a public broadcast channel air a documentary that is produced by a right-wing think tank and funded by ultra-conservative donors, and that presents a single point of view without meaningful critique, all the while denigrating public education?  Ravitch notes, when a documentary fails to objectively present information about a topic that may not be well understood by the general public, the result is unlikely to “promote civic dialogue.” And when major media outlets uncritically provide a platform to right-wing ideologues, they further misinform and polarize the debate around important issues such as public education.

Blue Dogs in NY State Legislature. - Diane Ravitch points to the New York State legislature in her blog this week. NY is a Blue State having gone Dem in presidential elections; however, the state legislature is divided with the Dems controlling the Assembly and Repubs the Senate. What makes the New York state legislature interesting is the emergence of a Blue Dog Democrat segment of the State Assembly, which sides with the Senate Republicans on various issues. Blue Dogs (which I kind of like as a descriptor for them) conjures up thoughts of when the US Senate version were negotiating special deals before the ACA was finally passed.   The Senate Independence Campaign Committee (SICC) was formed by the Independence Party and is chaired by IDC chair Senator Jeff Klein. The SICC is a formal party campaign committee. The SICC as a party campaign committee allows donors to circumvent the stricter limits on direct donations to candidates as donations limits to party committees are much higher and the same as the limits on how much party committees can give to candidates. Calling themselves the IDC or the Independent Democratic Caucus, they move to the influence of special interest groups.  Being the independent swing group in the NY State legislature, the IDC has power to dispense for the right donation regardless of its majority constituency. They could go with Republicans or Democrats based upon interest group influence or ideology. One would hope they would be swayed by the needs and the interests of an entire school population rather than a minority. While it is not mystery to find it out, the Alliance for Quality Education (AQE) shed some light upon the IDC’s source of funding. In its report Pay to Play,” the Alliance reveals how the IDC played off Democrats in both the Assembly and the Senate with funding schools, the funding it receives from individuals, foundations, and Pacs, and who the donations went to over a six year period. From 2011 to 2016, the IDC received $676,850 from charter school political interest groups and individuals which was spread amongst multiple recipients. The detail of who donated and to whom it went to can be found in the first table.

Top Private High Schools Declare War on Academic Merit -  National Review - Recently the online trade publication Inside Higher Ed had an article titled “A Plan to Kill High School Transcripts . . . and Transform College Admissions.” The plan — by the Mastery Transcript Consortium, which counts over 100 top private schools as members — would have its participants stop reporting grades to college admissions offices and instead provide a new model for transcripts and portfolios. The consortium’s proposal would serve as one more step in a trend going back a century toward introducing vagueness and, by extension, discretionary power into college admissions. The new transcript model is still in development but will follow the principles of “no standardization of content” between schools, “no grades,” and, in obvious tension with the first two principles, “consistent transcript format.” A sample transcript on the consortium’s website lists competencies in eight areas, only two or three of which even remotely resemble traditional academic subjects and most of which can be described charitably as character traits or accurately as self-actualization gibberish. Each of these eight areas is explained with half a dozen or so bullet points that seem to be cribbed from a personal ad at Davos (e.g., “develop flexibility, agility, and adaptability”). To understand the deep logic of the proposal, it helps to ignore the pleasant-sounding rhetoric about personalization and focus on who and whom. One thing that jumps out of the IHE article is that this proposal is a creature of elite prep schools. Most American high schools have, at most, a handful of students who are realistically competitive at elite universities, but elite prep schools aspire to place a substantial fraction of their students there. Alas, that college admissions offices expect to see grades puts elite high schools in the embarrassing situation of implicitly comparing their students to one another.

Connecticut Professor Calls Whites "Inhuman A$$holes", Says "Let Them F**king Die" --A professor at Connecticut's Trinity College seemingly endorsed the idea that first responders to last week’s congressional shooting should have let the victims "fucking die” because they are white. “It is past time for the racially oppressed to do what people who believe themselves to be ‘white’ will not do, put end to the vectors of their destructive mythology of whiteness and their white supremacy system. #LetThemFuckingDie,” Trinity College Professor Johnny Eric Williams wrote in a June 18 Facebook post. Two days prior, Williams had shared a Medium article titled “Let Them Fucking Die” in which the anonymous author suggests that “bigots,” such as those numbered among the victims of the congressional shooting, should be left for dead.“What does it mean, in general, when victims of bigotry save the lives of bigots?” the author begins by asking, later saying that his black peers “imagine...that by becoming a shining example of this ‘righteous’ behavior, we might, somehow, guide these cannibals into becoming upright beings capable of following the very rules they enforce upon us.”The author goes on to offer a litany of life-ending situations the aforementioned “bigots” could find themselves in, advising his readers to “do nothing” in the way of helping.“If you see them drowning. If you see them in a burning building. If they are bleeding out in an emergency room. If the ground is crumbling beneath them. If they are in a park and they turn their weapons on each other: do nothing,” the article instructs readers. “Least of all put your life on the line for theirs, and do not dare think doing so, putting your life on the line for theirs, gives you reason to feel celestial. Save the life of those that would kill you is the opposite of virtuous. Let. Them. Fucking. Die. And smile a bit when you do,”

Connecticut Campus Shut As Professor Flees Following "Let Them F**king Die" Tweet --A professor at a Connecticut college said he was forced to flee the state after he received death threats for appearing to endorse the idea that first responders to last week’s congressional shooting should have let the victims "f**king die” instead of treating them, according to the Hartford Courant.Trinity College Professor Johnny Eric Williams shared a link to a medium post which suggested that “bigots” should be left to die in life threatening situations. The medium article was accompanied by a photo of House Majority Whip Steve Scalise, who was wounded in the shooting, along with the title “Let Them F**ing Die,” which Williams later used as a hashtag in his ill-conceived posts. In the post, the author describes a list of disturbing situations in which “bigots” should be left to die, while also encouraging readers to “smile a bit” as these figurative deaths unfold.“If you see them drowning. If you see them in a burning building. If they are bleeding out in an emergency room. If the ground is crumbling beneath them. If they are in a park and they turn their weapons on each other: do nothing,” the article instructs readers."“Least of all put your life on the line for theirs, and do not dare think doing so,putting your life on the line for theirs, gives you reason to feel celestial. Save the life of those that would kill you is the opposite of virtuous. Let. Them. Fucking. Die. And smile a bit when you do.”As a result of the posts, which gained national attention, Williams said he has received more than 1,000 threats. The situation briefly forced the closure of Trinity College’s campus in downtown Hartford Thursday morning. The campus had reopened by late morning, though Hartford police provided heightened security.

Silicon Valley to Liberal Arts Majors: We Want You -- If you are a student of the liberal arts, is there a place for you in our increasingly-digital world? Not really, according to many. Bill Gates thinks your programs should be cut in favor of STEM subjects, his fellow tech-billionaire Vinod Khosla says “little of the material taught in liberal arts programs today is relevant to the future,” and Marc Andreesen says you will end up working in a shoe store. Maybe you should just learn to code. Tech billionaires claim that fuzzies—students of the liberal arts and social sciences—are doomed to working in shoe stores, but two new books pin the future of tech on them. Or maybe not. Two new books make a case that the technology industry can no longer be driven purely by software engineer hackers, and that you have a critical role to play in guiding it in more ethical and humane directions. That said, their authors differ dramatically about what that role is. Scott Hartley wants you to bring your skills and insights to the world of technology startups, to unlock the full potential of technological innovation. Ed Finn, on the other hand, seeks to hold the technology industry to account: he believes we need “more readers, more critics,” posing questions about who technology serves, and to what ends.

U.S. Student Loan Explosion -- The U.S. government passed a unique milestone in May 2017, where it has now cumulatively borrowed more than $1 trillion from the public since President Obama was sworn into office in January 2009, just so it can loan the money back out to Americans who need to borrow money to go to college in the form of Federal Direct Student Loans.  President Obama is directly responsible for this state of affairs. After being sworn into office on 20 January 2009, his first major domestic policy act was to sign the American Recovery and Reinvestment Act of 2009 into law on 17 February 2009 in an attempt to jump start a U.S. economy that had fallen into deep recession. Better known as the "Stimulus Bill", the act boosted the subsidy amount and quantity of Pell Grants paid to low and middle income-earning Americans attending college, but not by enough to cover more than one-third of the average annual cost of a university education, where American students who received these grants would then have to make up the difference through taking out student loans that are subsidized by the U.S. government. Then, on 30 March 2010, President Obama signed the Health Care and Education Reconciliation Act of 2010, which resulted in the U.S. government taking over the student loan industry from the private sector. President Barack Obama signed a law Tuesday that he said will end subsidies for banks that guarantee federal student loans, saving $68 billion over 11 years by making loans directly through the U.S. Department of Education.  According to the White House, starting July 1 all federal student loans will be direct loans administered through private companies that have performance-based contracts with the DOE. At present, the law appears set to fail on delivering these promised savings to U.S. taxpayers.

CFPB Lambastes Student Loan Servicers for Thwarting Public Servant Debt Relief - naked capitalism by Jerri-lynn Scofield - The Consumer Financial Protection Bureau (CFPB) has today released a report on how student loan servicer failures could deprive borrowers who’ve pursued public service careers from debt relief to which they’d otherwise be entitled.The report itself could serve as yet another case study of what’s wrong with the neo-liberal playbook.Congress created the Public Service Loan Forgiveness (PSLF) program in 2007 to forgive (some) student debt incurred by those who choose public service careers. These include members of the military; teachers; social workers; prosecutors and public defenders; police, firefighters, and other first responders; Peace Corps volunteers and members of AmeriCorps; nurses and doctors, according to the text of  prepared remarks CFPB director Richard Cordray is scheduled to make today in Richmond.The CFPB estimates that one-quarter of the U.S. workforce is currently employed by a public service employer. Part of the problem– as the report recognizes– arises from new credentialing requirements for many public service positions (report, pp. 1-3). This leaves many aspirants  “caught in the crossfire of two economic trends – the need to earn an advanced degree for a career in these fields, and the rising costs involved in securing those credentials”, according to Cordray’s remarks.The PSLP program forgives some student loan debt for qualifying borrowers after they’ve made  120 timely payments– e.g., ten years of payments. Eligibility provisions are tightly drawn– and only apply to direct student loans. Various gotcha provisions seem designed to knock out rather than draw in borrowers (I know, I know, that’s a bug, not a feature). These include being enrolled in a qualifying repayment plan– e.g., an income-driven repayment plan– and making 120 timely payments while employed full time by a qualified public service employer. And, guess what: who administers these complex requirements? Why, the student loan servicers!

 Projection: Chicago's police pension fund will be broke in 2021 - Without a taxpayer bailout, Chicago’s police pension fund won’t have enough money to pay benefits to retirees in 2021, according to a projection by Local Government Information Services (LGIS), which publishes Chicago City Wire. At the end of 2020, LGIS estimates that the Policemen’s Annuity and Benefit Fund of Chicago will have less than $150 million in assets to pay $928 million promised to 14,133 retirees the following year. Fund assets will fall from $3.2 billion at the end of 2015 to $1.4 billion at the end of 2018, $751 million at the end of 2019, and $143 million at the end of 2020, according to LGIS. LGIS analyzed 12 years of the fund’s mandated financial filings with the Illinois Department of Insurance (DOI), which regulates public pension funds. It found that-- without taxpayer subsidies and the ability to use active employee contributions to pay current retirees, a practice that is illegal in the private sector-- the fund would have already run completely dry, in 2015. The Chicago police pension fund held $3.2 billion in assets in 2003. It shelled out $3.8 billion more in benefits to retired police officers than it generated in investment returns between 2003 and 2015. Over that span, the fund paid out $6.9 billion and earned $3.0 billion, paying an additional $134 million in fees to investment managers. Even assuming Chicago taxpayers and active Chicago police officers continue subsidizing the fund at traditional levels, and that the fund manages to generate investment returns consistent with the last 12 years-- 5.19 percent per year, on average-- its assets will still race to zero, outpaced by faster-growing benefit payments. 

Copyright Infringement; Potential Damages Eight Figures for Times and WSJ Each; Theft Extends to Virtually Every News Publication in US -- Yves Smith - In the early morning on June 9, we reported that CalPERS had engaged in systematic copyright infringement by operating a daily news site that had published the full text of news stories from many publications for years. Because CalPERS refused to take down its website even after it was caught out, we set out to determine the full extent of the misconduct.   From the inception of the site on August 2, 2009 through June 9, 2017, CalPERS has published the full text of over 50,000 articles. These articles were on an internet address open to any member of the public. All the articles were in a standardized format. None had any indicators that the CalPERS had paid the license fees to allow it to present them to its roughly 2,700 employees and board members, such as notices of copyright that publishers typically require for authorized republication.  To perform our analysis, we downloaded and archived all of the articles from the CalPERS site. At the end of this post, we have embedded a page from one of them, along with a second document with full list of publication names and the number of articles per name.1  Here are the sources from which CalPERS heisted the most articles:

“Heads Should Roll at CalPERS”: Who Should Be Held Accountable for Massive Copyright Infringement? -  Yves Smith - As we wrote in a companion post today, CalPERS has engaged in systemic, massive copyright infringement for the better part of a decade. Based on the scale and the willfulness of the theft, the two biggest victims, Dow Jones and the New York Times, are each likely to secure eight-figure settlements were they to pursue their claims. Other publications have the potential to win large settlements. Given how starved newsrooms are for revenue and how flagrant CalPERS’ misconduct has been, it is hard to image that CalPERS will not have to write some very large checks.1 CalPERS seems to have relied on the idea that no one would discover its intellectual property theft. This is a remarkable and reckless justification for misappropriation from publishers. CalPERS did not password protect its Daily News Summary site, so anyone who had the address could view it, as we have since at least 2015. CalPERS should have recognized that former employees and others familiar with the site could pass on the address. In other words, not only was CalPERS a brazen and large-scale crook, it was a stupid one as well.  This incident provides yet another example of failed governance at CalPERS, both at the executive and board level. Given how many employees CalPERS has, and the importance of intellectual property rights, it is inconceivable that professionals at CalPERS, particularly lawyers and information technology specialists, could not have noticed that articles were being reproduced in full with no evidence that CalPERS had any right to do so.

 Medicare Advantage Associated With More Racial Disparity Than Traditional Medicare For Hospital Readmissions — Abstract: We compared racial disparities in thirty-day readmissions between traditional Medicare and Medicare Advantage beneficiaries who underwent one of six major surgeries in New York State in 2013. We found that Medicare Advantage was associated with greater racial disparity, compared to traditional Medicare. After controlling for patient, hospital, and geographic characteristics in a propensity score based approach, we found that in traditional Medicare, black patients were 33 percent more likely than white patients to be readmitted, whereas in Medicare Advantage, black patients were 64 percent more likely than white patients to be readmitted. Our findings suggest that the risk-reduction strategies adopted by Medicare Advantage plans have not been successful in lowering the markedly higher rate of readmission among black patients, compared to white patients.  Racial disparities in surgical outcomes, such as postoperative complications, mortality, and thirty-day rehospitalizations, have been well documented.16 Excess readmissions within thirty days of surgical discharge reduce both patient quality of life and the efficiency of health care. Evidence suggests that thirty-day surgical readmission rates vary substantially across hospitals and geographic areas, and that such variations are largely attributable to patient factors such as sociodemographic characteristics, preexisting comorbidities, and postoperative complications.35,7,8 A recent study by Ryan Merkow and colleagues further reveals that surgical complications that developed after discharge, in contrast to exacerbations of complications that developed during the initial hospital stay, are important predictors of thirty-day readmissions.7 Two studies on traditional (or fee-for-service) Medicare beneficiaries who underwent common surgical procedures found that black race was independently associated with higher thirty-day readmission rates, even after important patient and hospital risk factors were controlled for.3,4

Illinois Medicaid talks to blow past judge's deadline (Reuters)—Talks over boosting Illinois' lagging payments to Medicaid providers amid the state's budget impasse will continue past a deadline of today initially set by a federal judge, an attorney said yesterday.Earlier this month, U.S. District Court Judge Joan Lefkow directed both sides to file motions today if they failed to reach a negotiated solution that would put Illinois in substantial compliance with federal consent decrees on Medicaid, the health care program for the poor and disabled. "We're still talking to the state," said Tom Yates, executive director of Legal Council for Health Justice, who is representing the state's 3 million Medicaid recipients.Yates added that while he could not divulge details of the talks, no motion will be filed today on behalf the recipients, some of whom could lose their access to medical services because Illinois owes Medicaid providers $2 billion. Eileen Boyce, a spokeswoman for the Illinois Attorney General's office, confirmed that talks were ongoing and said the office did not plan to file a motion on behalf of the state today.

Six resign from presidential HIV/AIDS council because Trump 'doesn't care' | TheHill: Six members of the Presidential Advisory Council on HIV/AIDS have angrily resigned, saying that President Trump doesn’t care about HIV. Scott Schoettes, Lucy Bradley-Springer, Gina Brown, Ulysses Burley III, Michelle Ogle and Grissel Granados publicly announced their resignations in a joint letter published in Newsweek titled, “Trump doesn’t care about HIV. We’re outta here.” The group said that the administration “has no strategy” to address HIV/AIDS, doesn’t consult experts when working on policy and “pushes legislation that will harm people living with HIV and halt or reverse important gains made in the fight against this disease.” “As advocates for people living with HIV, we have dedicated our lives to combating this disease and no longer feel we can do so effectively within the confines of an advisory body to a president who simply does not care,” they wrote. The group noted that Trump took down the Office of National AIDS Policy website when he took office and hasn’t appointed anyone to lead the White House Office of National AIDS Policy. They also said that the GOP’s ObamaCare repeal bill will dramatically hurt those with HIV/AIDS, making it the “final straw for us — more like a two-by-four than a straw” in deciding to leave the council. “We will be more effective from the outside, advocating for change and protesting policies that will hurt the health of the communities we serve and the country as a whole if this administration continues down the current path,” they wrote. 

New Mexico Health Insurer Seeks 80% Premium Increase As Senate Ramps Up Repeal Efforts - As Democrats continue their efforts to 'Resist 45,' which apparently includes throwing their unwavering support behind Obamacare, we get yet another sign of just how broken the healthcare exchanges around the country are.  According to the Associated Press, New Mexico Health Connections will seek an 80% increase in premiums for the 2018 plan year:All four health insurance providers on New Mexico's state-run exchange have submitted rate proposals for the coming year, despite uncertainty about key federal subsidies.New Mexico Health Connections CEO Martin Hickey said Thursday his cooperative is proposing a nearly 80 percent premium increase for individuals. The proposal may be lowered in July.Health Widler of the Office of the Superintendent of Insurance says detailed descriptions of proposed rate increases will be made public later this month.Of course, as we pointed out last month (see "Two Simple Charts Explain The Devastating Consequences Of Obamacare"), New Mexico's O bamacare premiums had already increased nearly 100% between 2013 and 2017.  Therefore, adding an incremental 80% to the 2017 rates would imply an over 250% increase in just 5 years.

Health insurers request 22 percent premium increases in Washington for 2018 - Health insurance premiums on the state’s individual market could soar in 2018 if rate hikes requested by insurers are approved.Insurers requested an average premium increase of 22.3 percent, according to a news release Monday from the Washington Office of the Insurance Commissioner. That’s significantly more than the average request of 13.5 percent last year and 5.4 percent in 2015.Most Washingtonians get health insurance through employer-sponsored plans, which would not be impacted directly by these increases. In Spokane County, 12,567 people enrolled in the Washington exchange for 2017, according to a report from the Washington Health Benefit Exchange.Insurance Commissioner Mike Kreidler said uncertainly over the future of the Affordable Care Act is likely contributing to higher rate increases. The Trump administration has said it will not enforce the mandate requiring people to buy health insurance, which could mean healthy people opt out of coverage, driving up average costs.Ongoing federal funding for the subsidies offered to people buying plans on the exchange is also up in the air. Kreidler’s office has asked insurers to clarify whether those issues factored into the requests and expects to receive answers by the end of the week. Kreidler told the House Health Care and Wellness Committee on Monday the increases were “higher than we certainly anticipated” and his office will give them a thorough review to make sure they reflect the actual cost of providing services and “not a fear about what might happen in the future.”

Anthem, MDwise pulling out of Indiana health insurance exchanges -- Two health insurers are pulling out of Indiana’s insurance exchanges next year, citing growing uncertainty over the future of the Affordable Care Act. Together, they represent about 77,000 members who must now find other health plans.Anthem Inc. and MDwise Marketplace, both based in Indianapolis, said Wednesday they would not offer individual plans next year on the Obamacare exchanges.“The individual market remains volatile, making planning and pricing for ACA-compliant health plans increasingly difficult due to a shrinking and deteriorating market as well as continual changes and uncertainty in federal operations, rules and guidance, including cost-sharing reduction subsidies and the restoration of taxes on fully insured coverage,” Anthem said in a written statement.It said about 46,000 people would be affected by the decision.The move would not affect the vast majority of the 4 million members in its Indiana Blue Cross Blue Shield plans. Nor would it affect those who have employer-provided insurance, those with Medicare Advantage, Medicare Supplement, Medicaid or those enrolled in “grandfathered” plans purchased before March 2010.MDwise Marketplace said its decision was influenced by the growing uncertainty over the future of the federally subsidized exchange. The company said it lost $21 million last year on the exchanges. Its exit will affect about 30,800 membersInsurers are finalizing their plans for next year. The Indiana Department of Insurance plans to release information Thursday on which companies are offering plans on the exchanges, and the proposed rates the companies are seeking.

Medica intends to stay in Iowa's health-insurance market, at 43% higher price -- The last carrier standing in Iowa’s individual health-insurance market said Monday that it intends to keep selling such policies here next year, but it would need to charge much higher premiums than it's collecting now. Even after Monday's announcement, Medica still could pull out of the Iowa market, as many experts feared. That could leave no options for up to 72,000 Iowans who now buy their own insurance instead of obtaining it via an employer or government program, such as Medicare or Medicaid. The relatively small, Minnesota-based carrier told Iowa regulators Monday that in order to stay in the market, they would need to increase premiums by an average of 43.5 percent. Many Iowans who buy individual insurance would be protected from much of that increase by subsidies they receive under the Affordable Care Act. But others would bear the full cost. Monday was the deadline for carriers to file proposed rates for individual health-insurance policies in Iowa for 2018. Medica was the only carrier to file, state regulators said. The other two major carriers in Iowa, Aetna and Wellmark Blue Cross & Blue Shield, had said this spring that they didn't intend to continue selling individual health insurance in Iowa next year. Wellmark said last week that it would re-enter if the federal government approved a "stopgap" plan Iowa Insurance Commissioner Doug Ommen proposed to shore up the market for 2018.  Medica had indicated in May that it probably would leave Iowa's individual health-insurance market, after Aetna and Wellmark said they would stop selling such policies here. That put Iowa on the verge of becoming the first state to lose all individual health-insurance options amid carriers' complaints of an unstable market full of unpredictable costs. If no carriers sell individual insurance here, moderate-income Iowans would be unable to use premium subsidies they qualify for under the Affordable Care Act. But the problem is broader than that. Even Iowans with higher incomes, who could pay full price, would be unable to buy full-fledged health insurance on the individual market.

The disappearing ACA insurance market - We've all heard about the insurers that are pulling out of Affordable Care Act marketplaces, but sometimes you have to see it to really get it. This map is based on data from the Kaiser Family Foundation for the first four years of the ACA marketplaces. You can really see the difference in 2017, when high-profile insurance exits left 21 percent of all ACA customers with only one insurer in their area.  For context: This doesn't even count 2018, when there could be as many as 47 counties with no insurer at all. We'll have a better idea after this week's filing deadline, of course. Why it matters: There are definite signs that the Trump administration's opposition to the ACA is hurting the marketplace for next year, as we wrote on Friday. But it's important to remember what was happening before the administration ever took office.  As tech royalty converges on the White House today for an American Technology Council meeting, the darlings of Silicon Valley are in danger of becoming the devils of Trumpism's nationalist wing. This won't happen overnight, but danger signs are  everywhere.   Axios Tech Editor Kim Hart wrote last week that the giants, with their "enormous concentrations of wealth and data," are "drawing the attention of economists and academics who warn they're growing too powerful." Turns out it's government, too. The Bannon wing of the White House would like to take on the lords of the Valley now over outsourcing, the concentration of wealth and their control over our data and lives. But this fight is on hold for a later date, officials tell us.

Rethinking Rural Hospitals – I’m fortunate that my local hospital, Margaretville Hospital, is in the top 100 “critical access hospitals” ranked by the National Rural Health Association. But other rural communities, home to nearly 20% of the US population, are not so fortunate. Since 2010, 78 of the more than 2150 rural nonspecialty US hospitals have closed. While the closure rate has recently declined, the proportion of financially struggling rural hospitals has increased. When a rural hospital closes, the economic losses can devastate an already stressed community through loss of health care workers, emergency services, and primary care capacity, as well as higher unemployment and lower per-capita income, a drop in housing values, poorer health, and increasing health disparities. An urgent look at how to prevent these closures is merited, but it may also be time to rethink what a rural hospital should be. Why are rural hospitals at higher risk of closure than urban hospitals? George Pink, PhD, Deputy Director of the North Carolina Rural Health Research Program, sees 3 main contributors:

  • Market factors. Rural areas tend to have poorer population health, higher unemployment rates, and stiffer competition from other hospitals
  • Hospital factors. These include low occupancy rates, lack of physician coverage, deteriorating facilities, and patient safety concerns
  • Financial factors. From 2012 to 2014, for example, rural hospitals averaged a 2% operating margin, compared with 5.9% for urban hospitals

States Launch New Joint Probe into Company Sales and Marketing Practices for Opioids -- Last Thursday, four state attorneys general (AGs)– from Illinois, Massachusetts, Pennsylvania, and Texas– announced an ongoing joint investigation to assess whether pharma companies have engaged in any unlawful practices in the marketing and sale of opoids.  Exactly how many states are involved in this probe is unclear. Jurist, in its account, mentions these four states only, State attorneys general announce joint investigation into opioid manufacturer practices. The Wall Street Journal’s account, States Launch Bipartisan Probe of Opioid Marketing and Addiction, notes that the investigation includes a majority of US states–  an assertion also echoed in the New York Times report, State Attorneys General Probe Opioid Drug Companies:It was unclear exactly how many states are involved in the probe, though officials said a majority of attorneys general are part of the coalition. Among those leading the probe is Tennessee Attorney General Herbert Slatery, a Republican.Officials did not specify which companies were under investigation. What, exactly, the states are looking into is similarly vague. From the press release issued by Massachusetts AG Maura Healey: “The opioid epidemic is a public health crisis that is claiming lives in our state and across the country, and we want to assure our residents that we are doing all that we can to combat it,” said AG Healey. “I am working with my colleagues in actively investigating whether manufacturers used illegal practices in the marketing and sale of opioids and worsened this deadly crisis.” It appears from this press release that it’s early days yet for this particular joint investigation.  What this uncovers, and how assiduously any illegalities will be pursued, is also not clear from Healey’s press release. One state AG who appears not to be a complete couch potato is that of Ohio, Mike DeWine, who filed suit against five leading prescription opioid manufacturers companies last month, alleging “that the drug companies engaged in fraudulent marketing regarding the risks and benefits of prescription opioids which fueled Ohio’s opioid epidemic”, according to this press release, Attorney General DeWine Files Lawsuit Against Opioid Manufacturers for Fraudulent Marketing; Fueling Opioid Epidemic.

Americans Are Dying With An Average Of $61,500 In Debt --According to a recent study, the average total household debt in America is just over $132,500, broken down as per the chart below...  .. and thanks to the Fed's recent and ongoing rate increases, the repayment of said debt will become increasingly more difficult. So difficult, in fact, that most Americans will be saddled with a sizable chunk of it at the time of their death.  Actually, most already are. According to December 2016 data from credit bureau Experian provided to, 73% of American consumers had outstanding debt when they were reported as dead. Those consumers carried an average total balance of $61,554, including mortgage debt.Without home loans, the average balance was $12,875. As reports, the data is based on Experian’s FileOne database, which includes 220 million consumers. (There are about 242 million adults in the U.S., according to 2015 estimates from the Census Bureau.) To determine the average debt people have when they die, Experian looked at consumers who, as of October 2016, were not deceased, but then showed as deceased as of December 2016.Among the 73% of consumers who had debt when they died, about 68% had credit card balances. The next most common kind of debt was mortgage debt (37%), followed by auto loans (25%), personal loans (12%) and student loans (6%).The breakdown of unpaid balances was as follows: credit cards, $4,531; auto loans, $17,111; personal loans, $14,793; and student loans, $25,391. And, as a reminder, debt doesn’t just disappear when someone dies.

Elon Musk wants to link computers to our brains to prevent an existential threat to humanity -- Given Musk's ambitiousness, it's not totally surprising that he is also launching a company that will look into ways to link human brains to computers. Musk reportedly plans to spend 3-5% of his work time on Neuralink, which will develop technology to integrate brains and computers as a way to fix medical problems and eventually supercharge human cognition.  Existing brain-computer interfaces, which are relatively simple compared to Musks's goals, can connect to a few hundred brain cells at a time. Those are already helping the deaf hear, the blind see, and the paralyzed move robotic arms. Once researcher are able to understanding and connect interfaces to the 100 billion neurons in the brain, these linkages could essentially give people superpowers.  That potential has clearly captured Musk's interest, but this new project also seems to stem from his concerns about super-intelligent artificial intelligence (AI).

Neurologists Discover Fully Intact 15th Century Brain In Ohio Congressman — Marveling at how well preserved the archaic opinions were, a team of archaeologists from the Smithsonian Institution and neurologists from Johns Hopkins announced Thursday the discovery of a fully intact 15th-century belief system in Ohio congressman Jim Jordan (R-OH). “It’s just extraordinary to come across a perspective that dates back to the early to mid-1500s and shows absolutely no signs of decay,” said Dr. Claire Goedde, explaining that while it’s not uncommon to encounter partial remains of convictions from that era, it’s exceedingly rare to recover a specimen this pristine. “All the 600-year-old viewpoints remain almost completely untouched, from religion’s place in society to the rights of women to the some basic scientific concepts, particularly concerning the 1st and 2nd Laws of Thermodynamics. Things the rest of the species have known for centuries.” The researcher noted -“I can only imagine the insights this single sample will provide as to how people who lived centuries ago saw the world around them.” Goedde added, however, that the congressman’s belief system was fragile even in near-perfect condition and could deteriorate rapidly if examined too much.

‘There Was No Escaping It’: Iraq Vets Are Becoming Terminally Ill And Burn Pits May Be To Blame - The Iraq War killed former Minnesota Air National Guard Tech Sgt. Amie Muller. It just took a decade to do it. That, at least, is how Muller’s family and friends see it. The 36-year-old’s pancreatic cancer, they believe, was caused by exposure to the massive burn pit used to dispose of waste at Joint Base Balad, 40 miles north of Baghdad. Her doctors said there was a strong possibility the burn pit was to blame, but no way to definitively prove a link with the available evidence. Regardless, a young mother of three died in February from a disease that typically is diagnosed at age 71. “It makes me really mad,” Muller told the Minneapolis Star-Tribune in June 2016, a month after learning she had Stage III pancreatic cancer. “I inhaled that stuff all day, all night. Everything that they burned there is illegal to burn in America. That tells you something.”  Even as her life came to an end, Muller sought to prevent others from suffering a similar fate. Despite being in physical pain from the cancer, and agonizing over the thought of leaving her children without a mom, she became a voice for veterans who believe that the modern battlefield, with its burn pits, fine dust, and metal-laden soil, is an environmental killer. “Amie Muller served this country with distinction, and we owe her our gratitude,” Sen. Amy Klobuchar, a Democrat from Minnesota, said in a statement following Muller’s death on Feb. 18.  Klobuchar had gotten to know Muller during her illness, and just 10 days before Muller died, the senator teamed up with Republican Sen. Thom Tillis of North Carolina to sponsor legislation that would require the VA to establish a center of excellence to study and improve the diagnosis and treatment of burn pit-related illnesses.To date, 34 members of the House and Senate have added their names to the Senate bill, S. 319, Helping Veterans Exposed to Burn Pits, and its companion House bill, H.R. 1279, in support.Veterans have long reported health issues thought to be related to combat deployments, and Congress has discussed the associated health risks at 30 hearings since 2009. In 2013, the legislators even ordered the VA to establish a registry to track veterans who believe they are sick as a result of exposure to burn pits or other environmental factors in Iraq and Afghanistan.

Teflon Toxin Found in North Carolina Drinking Water - A persistent and toxic industrial chemical known as GenX has been detected in the drinking water in Wilmington, North Carolina, and in surface waters in Ohio and West Virginia. DuPont introduced GenX in 2009 to replace PFOA, a compound it used to manufacture Teflon and coatings for stain-resistant carpeting, waterproof clothing, and many other consumer products. PFOA, also known as C8, was phased out after DuPont was hit with a class-action suit over health and environmental concerns. Yet as The Intercept reported last year, GenX is associated with some of the same health problems as PFOA, including cancer and reproductive issues. Levels of GenX in the drinking water of one North Carolina water utility, the Cape Fear Public Utility Authority, averaged 631 ppt (parts per trillion), according to a study published in Environmental Science & Technology Letters in 2016. Although researchers didn’t test the water of two other drinking water providers that also draw water from that area of the Cape Fear River, the entire watershed downstream of the Chemours discharge, which is a source of drinking water for some 250,000 people, is likely to be contaminated, according to Detlef Knappe, one of the authors of the study. Research presented at a conference this week at Northeastern University detailed the presence of GenX in water in North Carolina and Ohio. In both cases, the chemical was found in water near plants that were owned by DuPont and since 2015 have been operated by DuPont’s spinoff company, Chemours. Both GenX and PFOA belong to a larger group of chemicals known as PFAS, which are structurally similar and believed to persist indefinitely in nature.

New Claims Against Monsanto in Consumer Lawsuit Over Roundup Herbicide - Another day, another lawsuit against global seed and chemical giant Monsanto Co. In a complaint filed Tuesday in federal court in Wisconsin, six consumers alleged that the company's top-selling Roundup herbicide has been falsely promoted as uniquely safe when it actually can have profound harmful impacts on human gut bacteria critical to good health. The lawsuit, which also names Roundup distributor Scotts Miracle-Gro Co . as a defendant, specifically alleges that consumers are being deceived by inaccurate and misleading statements made by Monsanto regarding glyphosate , the active weed-killing ingredient in Roundup . Plaintiffs include residents of Wisconsin, Illinois, California, New York, New Jersey and Florida. Glyphosate, which Monsanto introduced as an herbicide in 1974 and is widely used in growing food crops, has been promoted for years as a chemical that kills plants by targeting an enzyme that is not found in people or pets. The lawsuit claims that assertion is false, however, and argues that research shows glyphosate can target an enzyme found in gut bacteria in people and animals, disrupting the immune system, digestion and "even brain function."  "Defendants repeat these false and misleading representations throughout their marketing, including in video advertisements produced for their websites and YouTube Channel," states the lawsuit, which is filed in U.S. District Court for the Western District of Wisconsin.  Monsanto is currently defending itself against nationwide claims that Roundup has caused hundreds of people to suffer from a type of blood cancer called non-Hodgkin lymphoma. More than 1,100 plaintiffs have lawsuits pending in state and federal courts with many of the lawsuits combined in multi-district litigation in federal court in San Francisco.

California Scientists: Safe Level of Roundup Is 100x Lower Than EPA Allowance -- In a landmark rule with global repercussions, California state scientists are preparing to issue the world's first health guideline for Monsanto's glyphosate herbicide based on its cancer risk. The state's proposed safe level is more than 100 times lower than the U.S. Environmental Protection Agency's ( EPA ) legal allowance for the average-sized American.  Glyphosate is the key ingredient in Roundup , the most heavily applied weed killer in the history of chemical agriculture. Use of glyphosate has exploded in the last 15 years, as Monsanto has promoted genetically modified Roundup Ready seeds to grow crops that aren't harmed by the herbicide. In the U.S. alone, more than 200 million pounds of Roundup are sprayed each year, mostly on soybeans and corn.  In March 2015, the International Agency for Research on Cancer—part of the World Health Organization, with no regulatory authority— reviewed human cancer studies and determined that glyphosate is "probably carcinogenic" to people. Based on that finding, the California Office of Environmental Health Hazard Assessment (OEHHA) announced its intention to add glyphosate to the state's Proposition 65 list of chemicals known to cause cancer. By itself, that listing would be a big blow to Monsanto, because it would require cancer warning labels on containers of Roundup and on foods that have high residues of glyphosate. Monsanto is appealing the decision in state court, but in the meantime the OEHHA has moved forward in setting a so-called No Significant Risk Level of the amount of glyphosate people could safely consume each day.

The WHO's cancer agency left in the dark over glyphosate evidence: A large study of pesticides in the United States produced new information about glyphosate, a common weedkiller. But the data was not considered by the International Agency for Research on Cancer in 2015 when it assessed whether glyphosate causes cancer. Previously unreported court documents reviewed by Reuters from an ongoing U.S. legal case against Monsanto show that Blair knew the unpublished research found no evidence of a link between glyphosate and cancer. In a sworn deposition given in March this year in connection with the case, Blair also said the data would have altered IARC’s analysis. He said it would have made it less likely that glyphosate would meet the agency’s criteria for being classed as “probably carcinogenic.” But IARC, a semi-autonomous part of the World Health Organization, never got to consider the data. The agency’s rules on assessing substances for carcinogenicity say it can consider only published research – and this new data, which came from a large American study on which Blair was a senior researcher, had not been published.The lack of publication has sparked debate and contention. A leading U.S. epidemiologist and a leading UK statistician – both independent of Monsanto – told Reuters the data was strong and relevant and they could see no reason why it had not surfaced. Monsanto told Reuters that the fresh data on glyphosate could and should have been published in time to be considered by IARC, and that the failure to publish it undermined IARC’s classification of glyphosate. The legal case against Monsanto, taking place in California, involves 184 individual plaintiffs who cite the IARC assessment and claim exposure to RoundUp gave them cancer. They allege Monsanto failed to warn consumers of the risks. Monsanto denies the allegations. The absence of the data from IARC’s assessment was important. IARC ended its meeting in 2015 by concluding that glyphosate is a “probable human carcinogen.” It based its finding on “limited evidence” of carcinogenicity in humans and “sufficient evidence” in experimental animals. It said, among other things, that there was a “positive association” between glyphosate and blood cancers called non-Hodgkin lymphoma. IARC told Reuters that, despite the existence of fresh data about glyphosate, it was sticking with its findings. #160;

Monsanto's Dicamba Problems Are Far From Over. Farmers File Another Lawsuit Over Drift Damage - Arkansas farmers filed a class-action lawsuit last week against Monsanto and German chemical company BASF , alleging that the companies' dicamba -based herbicides caused damage to their properties. The plaintiffs claim that Monsanto and BASF implemented and controlled the dicamba crop system, releasing seed technology without a corresponding, safe and approved herbicide. According to Hoosier Ag : "The farmers allege that Monsanto and BASF sold the dicamba crop system while knowing it could wipe out crops, fruits, and trees that are not dicamba tolerant. The farmers claim that those who do not plant dicamba tolerant crops are left with no protection from the herbicide." To date , Arkansas' agriculture department has received 135 dicamba misuse complaints across 17 counties. The lawsuit comes as the Arkansas State Plant Board considers an in-crop dicamba ban that was proposed by the state's pesticide committee. The controversy behind the pesticide started last year when Monsanto decided to sell its new dicamba-tolerant cotton and soybean seeds several growing seasons before getting federal approval for the corresponding herbicide. Without having the proper herbicide, cotton and soybean growers were suspected of illegally spraying older versions of the highly toxic and drift-prone chemical onto the seeds and inadvertently damaged nearby non-target crops due to drift.  The spraying triggered widespread reports of crop damage across thousands of acres in 10 states and several lawsuits against pesticide makers. In October, a drift dispute between Arkansas farmers resulted in one farmer being shot to death.

African Farmers Facing Heavy Prison Sentences if They Continue Their Traditional Seed Exchange | Earth First! Newswire: In order to get developmental assistance, Tanzania amended its legislation, which should give commercial investors faster and better access to agricultural land as well as a very strong protection of intellectual property rights. ‘If you buy seeds from Syngenta or Monsanto under the new legislation, they will retain the intellectual property rights. If you save seeds from your first harvest, you can use them only on your own piece of land for non-commercial purposes. You’re not allowed to share them with your neighbors or with your sister-in-law in a different village, and you cannot sell them for sure. But that’s the entire foundation of the seed system in Africa’, says Michael Farrelly. Under the new law, Tanzanian farmers risk a prison sentence of at least 12 years or a fine of over €205,300, or both, if they sell seeds that are not certified. ‘That’s an amount that a Tanzanian farmer cannot even start to imagine. The average wage is still less than 2 US dollars a day’, says Janet Maro, head of Sustainable Agriculture Tanzania (SAT). Tanzania applied the legislation concerning intellectual property rights on seeds as a condition for receiving development assistance through the New Alliance for Food Security and Nutrition (NAFSN). The NAFSN was launched in 2012 by the G8 with the goal to help 50 million people out of poverty and hunger in the ten African partner countries through a public-private partnership. The initiative receives the support of the EU, the US, the UK, the World Bank and the Bill & Melinda Gates Foundation. 

Southeast Is Ground Zero for Genetically Engineered Trees (see infographics) ArborGen Corporation , a multinational conglomerate and leading supplier of seedlings for commercial forestry applications, has submitted an approval request to the U.S. Department of Agriculture, Animal and Plant Health Inspection Service to deregulate and widely distribute a eucalyptus tree genetically engineered (GE) to be freeze tolerant. This modification will allow this GE variety to be grown in the U.S. Southeast. The reason this non-native and highly invasive tree has been artificially created to grow outside of its tropical environment is to greatly expand production capacity for the highly controversial woody biomass industry. For almost two decades, and under the radar from widespread awareness and public scrutiny, government, academia, biotech and the commercial forestry industries have invested millions of dollars into research and development (R&D) of GE trees. The few reports published about the R&D cite a major goal of many of these projects as providing a sustainable alternative for fossil fuels in the manufacture of consumer products and energy production.   Eucalyptus trees grow faster, are highly combustible, and require more water than other species. Although some assurances have been given that this GE variety won't spread unintentionally, there are no guarantees this won't happen. . Some of the non-GE eucalyptus trees, planted in California years ago have proven a huge problem for native species. Efforts to eradicate them have been largely ineffective and are recently the leading cause of wildfires burning hotter and causing more damage in areas where they have grown unchecked.   If the draft environmental impact statement (DEIS) is accepted and this GE tree is deregulated , it will make it possible for these trees to be grown in industrial-sized "tree farms" from South Carolina to Texas.  More than 1 million acres of pine plantations, grasslands, pastures and once forested land could be forever altered by row after row of GE eucalyptus trees. Few other living things can survive on these plantations because all vegetation has been stripped from the land, soaked with herbicides and chemical fertilizers, and planted with row after row with thousands of unnaturally altered seedlings. Every five to seven years the trees are cut like hay and loaded on to giant tractor trailers headed to energy or feedstock processing facilities and the process from start to finish is repeated.

Norway warns Brazil that funds to safeguard rainforests at risk | Reuters: Norway has warned Brazil that funds to help protect the Amazon rainforest under a billion-dollar program are in jeopardy because more forests are being destroyed, a Norwegian government letter showed on Wednesday. Brazil's President Michel Temer will meet Norway's Prime Minister Erna Solberg in Oslo on Friday to discuss cooperation including Norway's program to help Brazil's efforts to restrict logging and the clearance of forests by farmers. Wealthy from producing oil and gas, Norway is the biggest foreign donor to protect tropical forests from Brazil to Indonesia, partly because they are big natural stores of greenhouse gases and help to slow climate change. The Amazon is suffering a "worrying upward trend" in deforestation since 2015 after "impressive achievements" over the previous decade, Norway's Environment Minister Vidar Helgesen wrote to his Brazilian counterpart Jose Sarney Filho this month. Norway's annual contributions to an Amazon Fund, to which it has paid $1.1 billion since 2008 based on Brazil's progress in slowing deforestation, were now set to fall, he wrote in the letter seen by Reuters.

British forest pumped full of CO2 to test tree absorption | Reuters: Researchers at a British University have embarked on a decade-long experiment that will pump a forest full of carbon dioxide to measure how it copes with rising levels of the gas - a key driver of climate change. The Free Air Carbon Dioxide Enrichment (FACE) experiment at the University of Birmingham's Institute of Forest Research (BIFoR) will expose a fenced-off section of mature woodland - in Norbury Park in Staffordshire, West Midlands - to levels of CO2 that experts predict will be prevalent in 2050. Scientists aim to measure the forest's capacity to capture carbon released by fossil fuel burning, and answer questions about their capacity to absorb carbon pollution long-term. "(Forests) happily take a bit more CO2 because that's their main nutrient. But we don't know how much more and whether they can do that indefinitely", BIFoR co-director Michael Tausz told Reuters. The apparatus for the experiment consists a series of masts built into six 30-metre wide sections of woodland, reaching up about 25 meters into the forest canopy. Concentrated CO2 is fed through pipes to the top of the masts where it is pumped into the foliage. Last year the U.N World Meteorological Organization (WMO) announced that the global average of carbon dioxide, the main man-made greenhouse gas, reached 400 parts per million (ppm) in the atmosphere for the first time on record. "The forest here sees nearly 40 percent more CO2 than it sees normally, because that's what it will be globally in about 2050; a value of 550 parts per million, compared to 400 parts per million now," Tausz said.

The botanists’ last stand: The daring work of saving the last samples of dying species -- Steve Perlman doesn’t take Prozac, like some of the other rare-plant botanists he knows. Instead, he writes poetry. Either way, you have to do something when a plant you’ve long known goes extinct. Let’s say for 20 years you’ve been observing a tree on a fern-covered crag thousands of feet above sea level on an island in the Pacific. Then one day you hike up to check on the plant and find it dying. You know it’s the last one of its species, and that you’re the only witness to the end of hundreds of thousands of years of evolution, the snuffing out of a line of completely unique genetic material. You might have to sit down and write a poem. Or at least bring a bit of the dead plant to a bar and raise a beer to its life. (Perlman has done both.) You might even need an antidepressant.  “I’ve already witnessed about 20 species go extinct in the wild,” Perlman says. “It can be like you’re dealing with your friends or your family, and then they die.”  Perlman gestures towards a Wilkesia gymnoxiphium in bloom. Better known as iliau, it’s a rare species of flowering plant in the sunflower family found only on the island of Kauai in Hawaii. Perlman tells me this as we drive up a winding road on the northwestern edge of Kauai, the geologically oldest Hawaiian island.  The stakes are always high: As the top botanist at Hawaii’s Plant Extinction Prevention Program (PEPP), Perlman deals exclusively in plants with 50 or fewer individuals left—in many cases, much fewer, maybe two or three. Of the 238 species currently on that list, 82 are on Kauai; Perlman literally hangs off cliffs and jumps from helicopters to reach them. Without him, rare Hawaiian plants die out forever. With him, they at least have a shot. Though now, due to forces beyond Perlman’s control, even that slim hope of survival is in jeopardy. Looming budget cuts threaten to make this the final chapter not only in the history of many native Hawaiian species, but in the program designed to keep them alive.

Invasive Asian carp (the kind that jump) found beyond barrier to Great Lakes -- -- The discovery of an invasive silver carp beyond a waterway barrier in Chicago that is designed to keep the fish from entering Lake Michigan is causing alarm among advocates for the Great Lakes. The carp was caught nine miles from Lake Michigan by a fisherman below the T.J. O'Brien Lock and Dam, according to an Associated Press article in the Chicago Tribune. The silver carp is perhaps the most notorious of four Asian carp that officials are trying to keep from entering the Great Lakes. It's the one that jumps out of the water and has been frequently photographed above the Illinois and Mississippi rivers, said Jeff Reutter, former director of Ohio State University's Sea Grant office at Stone Lab on Put-in-Bay in Lake Erie. "Anytime you find one beyond the barrier it's not a good sign," Reutter said, but one fish does not mean there's a spawning population. A bighead carp was found beyond the barrier in Lake Calumet in 2010, according to the Associated Press. The good thing that came from the silver carp's discovery is that it automatically calls for an intense two-week sampling of the waterway to see if more of this fish can be found, Reutter said. The discovery of the silver carp has increased the concerns of several members of Congress from the Great Lakes region. "The fishing industry in the Great Lakes is a $7-billion-a-year economic engine and it would be severely threatened if Asian Carp are allowed into the Great Lakes.," stated Republican U.S. Sen. Rob Portman of Ohio in a written release. "The Administration should release its proposed plan they have drafted so there is no delay in protecting the Great Lakes from Asian Carp."

Oh, Lovely: The Tick That Gives People Meat Allergies Is Spreading -- First comes the unscratchable itching, and the angry blossoming of hives. Then stomach cramping, and—for the unluckiest few—difficulty breathing, passing out, and even death. In the last decade and a half, thousands of previously protein-loving Americans have developed a dangerous allergy to meat. And they all have one thing in common: the lone star tick.  Red meat, you might be surprised to know, isn’t totally sugar-free. It contains a few protein-linked saccharides, including one called galactose-alpha-1,3-galactose, or alpha-gal, for short. More and more people are learning this the hard way, when they suddenly develop a life-threatening allergy to that pesky sugar molecule after a tick bite. Yep, one bite from the lone star tick—which gets its name from the Texas-shaped splash of white on its back—is enough to reprogram your immune system to forever reject even the smallest nibble of perfectly crisped bacon. For years, physicians and researchers only reported the allergy in places the lone star tick calls home, namely the southeastern United States. But recently it’s started to spread. The newest hot spots? Duluth, Minnesota, Hanover, New Hampshire, and the eastern tip of Long Island, where at least 100 cases have been reported in the last year. Scientists are racing to trace its spread, to understand if the lone star tick is expanding into new territories, or if other species of ticks are now causing the allergy.

American Chipmakers Had a Toxic Problem. Then They Outsourced It --Making computer chips involved hundreds of chemicals. The women on the production line worked in so-called cleanrooms and wore protective suits, but that was for the chips’ protection, not theirs. The women were exposed to, and in some cases directly touched, chemicals that included reproductive toxins, mutagens, and carcinogens. Reproductive dangers are among the most serious concerns in occupational health, because workers’ unborn children can suffer birth defects or childhood diseases, and also because reproductive issues can be sentinels for disorders, especially cancer, that don’t show up in the workers themselves until long after exposure.  Digital Equipment agreed to pay for a study, and Pastides, an expert in disease clusters, designed and conducted it. Data collection was finished in late 1986, and the results were shocking: Women at the plant had miscarriages at twice the expected rate. In November, the company disclosed the findings to employees and the Semiconductor Industry Association, a trade group, and then went public. Pastides and his colleagues were heralded as heroes by some and vilified by others, especially in the industry.  By December 1992, three follow-up studies—all paid for by the industry—showed similar results: roughly a doubling of the rate of miscarriages for thousands of potentially exposed women. This time the industry reacted quickly. SIA pointed to a family of toxic chemicals widely used in chipmaking as the likely cause and declared that its companies would accelerate efforts to phase them out. IBM went further: It pledged to rid its global chip production of them by 1995.  Two decades later, the ending to the story looks like a different kind of tale. As semiconductor production shifted to less expensive countries, the industry’s promised fixes do not appear to have made the same journey, at least not in full. Confidential data reviewed by Bloomberg show that thousands of women and their unborn children continued to face potential exposure to the same toxins until at least 2015. The risks are exacerbated by secrecy—the industry may be using toxins that still haven’t been disclosed. This is the price paid by generations of women making the devices at the heart of the global economy.

WATCH: Uncontacted Tribes Face Disaster Unless Land is Protected (video) - Tribal peoples are the best guardians of the natural world, and evidence proves that tribal territories are the best barrier to deforestation. This photograph shows the land of an uncontacted tribe as an island of green forest in a sea of deforestation (the orange line is the territory’s border). It is home to the “Last of his Tribe”, a lone man and the last survivor of his people, who were probably massacred by cattle ranchers occupying their land. The best way to prevent the destruction of the Amazon rainforest is to campaign for the land rights of uncontacted tribes.

Trump removes protections for Yellowstone grizzly bear | TheHill: The Trump administration is removing protections for the Yellowstone grizzly bear under the Endangered Species Act after more than four decades on the threatened list. The Interior Department’s Fish and Wildlife Service announced the delisting decision Thursday, which immediately drew rebukes from conservationists and Democrats. Officials said the conservation efforts for the bear that lives in and around Yellowstone National Park in Montana, Wyoming and Idaho show the delisting is warranted, along with the more than fourfold increase in its population and state policies designed to protect it in the future. “This achievement stands as one of America’s great conservation successes; the culmination of decades of hard work and dedication on the part of state, tribal, federal and private partners,” Interior Secretary Ryan Zinke, who represented Montana in Congress until earlier this year, said in a statement. “As a Montanan, I am proud of what we’ve achieved together.” Other segments of the grizzly bear population are not affected by Thursday’s regulation, and will continue to be protected as before. The bear’s population is now around 700, compared with 150 when it was listed. Its range is 22,500 square miles, more than double the range of the mid-1970s. Republicans applauded the Trump administration’s decision, saying the bear has long warranted an end to protections. 

Yellowstone Supervolcano Hit by a Swarm of Earthquakes: Yellowstone supervolcano has been hit by a series of earthquakes, with more 30 recorded since June 12. The latest was recorded on Monday, June 19, with a magnitude 3 earthquake striking 8.6 miles north north-east of West Yellowstone, Montana. The swarm began last week, and on June 15 saw a magnitude 4.5 earthquake take place in Yellowstone National Park. “The epicenter of the shock was located in Yellowstone National Park, eight miles north-northeast of the town of West Yellowstone, Montana,” scientists from the University of Utah, which monitors Yellowstone Volcano, said in a statement. “The earthquake was [reportedly] felt in the towns of West Yellowstone and Gardiner, Montana, in Yellowstone National Park, and elsewhere in the surrounding region.” This earthquake was the largest to have hit Yellowstone since March 30, 2014, when a magnitude 4.8 earthquake was recorded 18 miles to the east, near the Norris Geyser Basin. “[The 4.5] earthquake is part of an energetic sequence of earthquakes in the same area that began on June 12,” the statement continued. “This sequence has included approximately thirty earthquakes of magnitude 2 and larger and four earthquakes of magnitude 3 and larger, including today's magnitude 4.5 event.” As of June 16, 235 events had been recorded. Most of these ranged in the magnitude of 0 to 1, with five less than zero. The University of Utah is part of the Yellowstone Volcano Observatory (YVO), which monitors volcanic and earthquake activity in Yellowstone National Park. Seismic activity at volcanoes can signal an eruption is due to take place, although predicting exactly when a volcano will erupt is, at present, impossible. 

Robot Journalist Accidentally Reports on Earthquake from 1925 - Yesterday, the Los Angeles Times reported on a 6.8 earthquake that struck Santa Barbara at 4:51pm. Which might be surprising to the people of Santa Barbara who didn’t feel anything. The big problem with the story? The earthquake happened in 1925.How could reporters get something so wrong? Well, the “reporter” who wrote yesterday’s news article about the 6.8 quake was actually a robot. The L.A. Times deleted its automated tweet as well as the automatically published article and explained what happened in a subsequent tweet:The newspaper’s algorithm, called Quakebot, scrapes data from the US Geological Survey’s website. A USGS staffer at Caltech mistakenly sent out the alert when updating historical earthquake data to make it more precise.  Seismologists have reportedly complained about some of the historical data being off by as much as 6 miles, and this staffer was simply updating the location of the old quake from 1925. But it shows how quickly misinformation can spread with just a few clicks. An earthquake registering 6.8 is a big deal, so people were pretty relieved to see that it was a false alarm. The 1925 earthquake killed 13 people and caused over $8 million in damage. With so many more people living in the area today it would no doubt be much more deadly.  The Los Angeles Times has employed Quakebot since 2014 and has reported on hundreds of earthquakes, big and small, over the years. But this is the first known major screw up since it was first put online. And it certainly won’t be the last as journalism on everything from homicides to baseball scores becomes more automated.

Starbucks cups are not recyclable, which means 4 billion go to landfill each year --Even the best paper mills in the world cannot recycle coffee cups because the plastic lining clogs machinery. Starbucks should stop ignoring this problem. Starbucks has a very big problem with disposable cups. Every year, the coffee giant distributes more than 4 billion single-use cups to customers needing a caffeine fix, which means that 1 million trees are cut down to provide the paper. Most people think that these cups are recyclable – they’re paper, after all – but that’s not true. According to, whose latest report examines Starbucks’ empty commitments to developing a better cup, the vast majority of coffee cups ends up in landfills. Why is this?“In order to be able to hold liquids safely, Starbucks paper cups are lined with a thin layer of 100% oil-based polyethylene plastic made by companies like Dow and Chevron. This plastic lining makes the cups impossible to recycle because it clogs most recycled paper mills’ machinery…Because of the polyethylene plastic coating, much of this material ends up as a byproduct of the paper-making process and is ultimately sent to the landfill anyway. This is particularly wasteful since paper cups are made from a very high quality paper and, if recycled, could be reused multiple times.” The report outlines how rare it is to find cup recycling facilities. Only 18 of the largest 100 cities in the United States provide residential pickup of coffee cups for recycling, and only three paper recycling mills in the U.S. (out of 450 in total) can process plastic-coated paper such as cartons and coffee cups. In the United Kingdom, there are only two facilities that can do it, which again means everything else goes to landfill. Even where facilities exist, the process is still fraught. The Seattle Times explains that many of Starbucks’ old cups are shipped to China for recycling as “mixed paper,” only to end up as residue from the recycling process and head to a Chinese landfill instead.

Plastic Pollution in Antarctica 5 Times Worse Than Expected - Not only have microplastic particles infiltrated the pristine Antarctic , the problem is much worse than anyone thought. Scientists from the University of Hull and the British Antarctic Survey have determined that the levels of microplastics are five times higher than previous estimates. The results were published in the journal Science of the Total Environment. These tiny beads of plastic come from cosmetics or shred off of larger plastic items such as clothing or bottles. Research shows that microplastics can turn up in ice cores , across the seafloor, throughout the ocean and on every beach worldwide. According to UN News , "as many as 51 trillion microplastic particles—500 times more than stars in our galaxy—litter our seas, seriously threatening marine wildlife." Microplastics enter the oceans via wastewater. However, as the researchers report, more than half of the research stations in the Antarctic have no wastewater treatment systems. The scientists suggest that the plastic may be getting across the Antarctic Circumpolar Current, which was thought to be nearly impenetrable. "Antarctica is thought to be a highly isolated, pristine wilderness. The ecosystem is very fragile with whales, seals and penguins consuming krill and other zooplankton as a major component of their diet," said the study's lead author, Dr. Catherine Waller, an expert in ecology and marine biology at University of Hull. "Our research highlights the urgent need for a co-ordinated effort to monitor and assess the levels of microplastics around the Antarctic continent and Southern Ocean." A press release notes that the Southern Ocean, which covers approximately 8.5 million square miles and represents 5.4 percent of the world's oceans, is under increasing threat from fishing, pollution and the introduction of non-native species. Climate change , which leads to rising sea temperatures and ocean acidification, is also a threat.  The effects of microplastics on marine life in this region are currently unclear.

Peatlands, already dwindling, could face further losses - MIT News -- Tropical peat swamp forests, which once occupied large swaths of Southeast Asia and other areas, provided a significant “sink” that helped remove carbon dioxide from the atmosphere. But such forests have been disappearing fast due to clear-cutting and drainage projects making way for plantations. Now, research shows peatlands face another threat, as climate change alters rainfall patterns, potentially destroying even forested peatlands that remain undrained. The net result is that these former carbon sinks, which have taken greenhouse gases out of the atmosphere, are now net carbon sources, instead accelerating the planet’s warming. The findings are described this week in the journal Proceedings of the National Academy of Sciences, in a paper by MIT Professor Charles Harvey, research scientist Alexander Cobb, and seven others at MIT and other institutions. “There is a tremendous amount of peatland in Southeast Asia, but almost all of it has been deforested,” says Harvey, who is a professor of civil and environmental engineering and has been doing research on that region for several years. Once deforested and drained, the peatland dries out, and the organic (carbon-containing) soil oxidizes and returns to the atmosphere. Sometimes the exposed peat can actually catch fire and burn for extended periods, causing massive clouds of air pollution. Tropical peatlands may contain as much carbon as the amount consumed in nearly a decade of global fossil fuel use, and raging peat fires in Indonesia alone have been estimated in some years to contribute 10 to 40 percent as much greenhouse gas to the atmosphere as all the world’s fossil fuel burning. Tropical peatlands, unlike those in temperate zones that are dominated by sphagnum moss, are forested with trees that can tower to 150 feet, and peat fires can sometimes ignite forest fires that consume these as well. (Peat that gets buried and compressed underground is the material that ultimately turns to coal). 

Wildfires used to be rare in the Great Plains. They’ve more than tripled in 30 years  -The grasslands of U.S. Great Plains have seen one of the sharpest increases in large and dangerous wildfires in the past three decades, with their numbers more than tripling between 1985 and 2014, according to new research. The new study, published in the journal Geophysical Research Letters, found that the average number of large Great Plains wildfires each year grew from about 33 to 117 over that time period, even as the area of land burned in these wildfires increased by 400 percent. “This is undocumented and unexpected for this region,” said Victoria Donovan, the lead author of the study and a researcher at the University of Nebraska at Lincoln. “Most studies do document these shifts in large wildfires in forested areas, and this is one of the first that documents a shift, at this scale, in an area characterized as a grassland.” Donovan published the study with two university colleagues. The research looked at large wildfires, defined as fires around 1,000 acres or more in size. In other parts of the globe, such as Africa’s savannas, grassland fires are extremely common — and that used to be true for the Great Plains as well. But in the past century or more, Donovan explained, wildfire suppression techniques — such as rapidly catching fires and putting them out — had largely eradicated them from the region. However, they’ve begun to come back, a trend that has been consistent with not only climate change but also an incursion of more invasive plant species that could be providing additional fuel, Donovan said. However, the study merely documented the trend toward increased large wildfires, without formally attributing its cause. 

India’s wells are running dry, fast -- Over the past three years, the monsoon – the rainy season that runs from June through September, depending on the region – has been weak or delayed across much of India, causing widespread water shortages.  With the onset of summer this year, southern India, particularly Karnataka, Kerala and Tamil Nadu states, are already wilting under a blistering sun and repeated heatwaves. Drought is expected to affect at least eight states in 2017, which is a devastating possibility in a country where agriculture accounted for 17.5% of GDP in 2015 and provides the livelihood for nearly half the population.  Across rural India, water bodies, including man-made lakes and reservoirs, are fast disappearing after decades of neglect and pollution. It wasn’t always this way. For the past 2,500 years, India has managed its water needs by increasing supply.  Prior to industrialisation and the accompanying global “green revolution” in the 1960s, which saw the development of high-yield variety crops using new technologies, India’s water availability was plentiful. Households, industries and farmers freely extracted groundwater and dumped untreated waste into waterways without a second thought. But such practices are now increasingly untenable in this rapidly growing country. Per capita availability of water has been steadily falling for over a decade, dropping from 1,816 cubic metres per person in 2001 to 1,545 cubic metres in 2011. The decline is projected to deepen in coming years as the population grows. India, which currently has 1.3 billion people, is set to overtake China by 2022 and reach 1.7 billion in 2050. Water scarcity is also exacerbated by a growth in water-intensive industries, such as thermal power production, extraction and mining, as India seeks to feed and power its growing population. In addition to affecting biodiversity, these activities also alter natural water systems.  Still, successive governments have pursued the same old supply-centric policies, paying little heed to the country’s waning clean water supplies.

3-year global coral bleaching event easing, but still bad (AP) — A mass bleaching of coral reefs worldwide is finally easing after three years, U.S. scientists announced Monday. About three-quarters of the world’s delicate coral reefs were damaged or killed by hot water in what scientists say was the largest coral catastrophe. The National Oceanic and Atmospheric Administration announced a global bleaching event in May 2014. It was worse than previous global bleaching events in 1998 and 2010. The forecast damage doesn’t look widespread in the Indian Ocean, so the event loses its global scope. Bleaching will still be bad in the Caribbean and Pacific, but it’ll be less severe than recent years, said NOAA coral reef watch coordinator C. Mark Eakin. Places like Australia’s Great Barrier Reef, northwest Hawaii, Guam and parts of the Caribbean have been hit with back-to-back-to-back destruction, Eakin said. University of Victoria, British Columbia, coral reef scientist Julia Baum plans to travel to Christmas Island in the Pacific where the coral reefs have looked like ghost towns in recent years. “This is really good news,” Baum said. “We’ve been totally focused on coming out of the carnage of the 2015-2016 El Nino.” While conditions are improving, it’s too early to celebrate, said Eakin, adding that the world may be at a new normal where reefs are barely able to survive during good conditions. 

How Dead Is the Great Barrier Reef? -- Worried about the future of the Great Barrier Reef ? If so, you're not alone. Many publications have already written obituaries for the reef, despite the fact that it is not completely dead. Thanks to this video via Vox for sounding the alarm on this critical issue, before it's too late. According to water quality expert Jon Brodie, the Great Barrier Reef is now in a " terminal stage ." Warming oceans are causing large bleaching events in the Great Barrier Reef for the second year in a row, new aerial surveys have shown. Climate Nexus reports that reef scientists are worried that the "shocking" back-to-back bleaching gives the reef little chance to recover and that increasing frequency of bleaching events could be ultimately devastating.  "The significance of bleaching this year is that it's back to back, so there's been zero time for recovery," Professor Terry Hughes, who led the surveys, told the Guardian. "It's too early yet to tell what the full death toll will be from this year's bleaching, but clearly it will extend 500km south of last year's bleaching."

Climate change may negatively impact the sea turtle population, warn scientists -- Climate change may negatively impact the sea turtle population, as warmer temperatures could lead to higher numbers of females and increased nest failure, scientists have warned. The temperature at which sea turtle embryos incubate determines the sex of an individual, which is known as Temperature-Dependent Sex Determination (TSD). The pivotal temperature for TSD is 29 degrees Celsius as both males and females are produced in equal proportions above 29 degrees Celsius mainly females are produced while below 29 degrees Celsius more males are born. "Up to a certain point, warmer incubation temperatures benefit sea turtles because they increase the natural growth rate of the population: more females are produced because of TSD, which leads to more eggs being laid on the beaches," said Jacques-Olivier Laloe from Swansea University in the UK. However, beyond a critical temperature, the natural growth rate of the population decreases because of an increase of temperature-linked in-nest mortality, researchers said. "Temperatures are too high and the developing embryos do not survive. This threatens the long-term survival of this sea turtle population," Laloe said. Within the context of climate change and warming temperatures, all else being equal, sea turtle populations are expected to be more female-biased in the future. While it is known that males can mate with more than one female during the breeding season, if there are too few males in the population this could threaten population viability, researchers said. Sea turtle eggs only develop successfully in a relatively narrow thermal range of about 25-35 degrees Celsius, so if incubation temperatures are too low the embryo does not develop but if they are too high then development fails, they said. This means that if incubation temperatures increase in the future as part of climate warming, then more sea turtle nests will fail.

Seismic Blasting Devastates Ocean's Most Vital Organisms -- Seismic airguns exploding in the ocean in search for oil and gas have devastating impacts on zooplankton, which are critical food sources for marine mammals, according to a new study in Nature . The blasting decimates one of the ocean's most vital groups of organisms over huge areas and may disrupt entire ecosystems.  And this devastating news comes on the heels of the National Marine Fisheries Service's proposal to authorize more than 90,000 miles of active seismic blasting. Based on the results of this study, the affected area would be approximately 135,000 square miles. In the study, scientists found that the blasts from a single seismic airgun caused a statistically significant decrease in zooplankton 24 hours after exposure. Abundance fell by at least 50 percent in more than half (58 percent) of the species observed. The scientists also found two to three times more dead zooplankton following airgun exposure compared to controls and, shockingly, krill larvae were completely wiped out.  Listen to the sound of a seismic airgun blast: seismic_blast.mp4   The scientists used sonar backscatter, a method that reveals where animals are in the water column using sound, to detect zooplankton. They describe witnessing a large "hole" opening up in the backscatter as zooplankton were killed. Food chains are surprisingly simple in the ocean and zooplankton help form the basis of them, underpinning the ocean's productivity. Significant damage to zooplankton will have cascading effects on animals higher up. That includes fish and marine predators such as sharks, marine mammals and even seabirds. Adult krill provide an important food source for our largest marine animals: the great whales .

Study: Persistent, Highly Acidified Water All Along US West Coast; Some Hot Spots With pH As Low As Any Oceanic Surface Waters In World -- There are now persistent, highly acidified stretches of water found all throughout the California Current System along the West Coast of the US, a 3-year survey of the region has found.Some of the hot spots found during the survey were apparently home to pH levels as low as any ever recorded in any oceanic surface waters anywhere around the world. These hot spots will continue becoming more acidified and more prevalent during the coming years, the researchers note, because atmospheric carbon dioxide levels continue to rise rapidly. Despite this fact, the researchers also note that there are refuges of moderate pH environments that are prevalent enough that it seems to be possible that they could serve as safe havens over the coming decades and possibly centuries. “The West Coast is very vulnerable. Ten years ago, we were focusing on the tropics with their coral reefs as the place most likely affected by ocean acidification. But the California Current System is getting hit with acidification earlier and more drastically than other locations around the world,” commented lead author Francis Chan, a marine ecologist at Oregon State University. The press release provides more: The team observed near-shore pH levels that fell well below the global mean pH of 8.1 for the surface ocean, and reached as low as 7.4 at the most acidified sites, which is among the lowest recorded values ever observed in surface waters. “The lower the pH level, the higher the acidity.. Like the Richter scale, the pH scale is logarithmic, so that a 0.11 pH unit decrease represents an increase in acidity of approximately 30%. “Highly acidified ocean water is potentially dangerous because many organisms are very sensitive to changes in pH. Chan said negative impacts already are occurring in the California Current System, where planktonic pteropods — or small swimming snails — were documented with severe shell dissolution.”  

Gangs of aggressive killer whales are shaking down Alaska fishing boats for their fish: report - The orcas will wait all day for a fisher to accumulate a catch of halibut, and then deftly rob them blind. They will relentlessly stalk individual fishing boats, sometimes forcing them back into port. Most chilling of all, this is new: After decades of relatively peaceful coexistence with cod and halibut fishers off the coast of Alaska, the region’s orcas appear to be turning on them in greater numbers. “We’ve been chased out of the Bering Sea,” said Paul Clampitt, Washington State-based co-owner of the F/V Augustine. Like many boats, the Augustine has tried electronic noisemakers to ward off the animals, but the orcas simply got used to them. “It became a dinner bell,” said Clampitt. John McHenry, owner of the F/V Seymour, described orca pods near Alaska’s Aleutian Islands as being like a “motorcycle gang.” “You’d see two of them show up, and that’s the end of the trip. Pretty soon all 40 of them would be around you,” he said. A report this week in the Alaska Dispatch News outlined instances of aggressive orcas harassing boats relentlessly — even refusing to leave after a desperate skipper cut the engine and drifted silently for 18 hours.“It’s gotten completely out of control,” Alaska fisherman Jay Hebert told the paper.  Fishing lines are also being pillaged by sperm whales, the large square-headed whale best known as the white whale in Moby Dick.. A remarkable 2006 video by the Avoidance Project captured one of the 50,000 kg whales delicately shaking fish loose from a line. After a particularly heavy assault by sperm whales, fishers are known to pull up lines in which up to 90 per cent of the catch has disappeared or been mangled.  This is not the first time that Alaskan waters have been suddenly thrown into disorder by the changing appetites of killer whales. In the 1990s, researchers found that orca predation was responsible for a sudden collapse in Pacific sea otter populations not seen since the animals were driven to near-extinction by the fur trade.  Orcas have remarkably complex social structures, with regionally distinct languages and hunting strategies. They’re also innovative; orcas have frequently been observed inventing new hunting tactics and then teaching them to others.

In a Bering Sea battle of killer whales vs. fishermen, the whales are winning - In the Bering Sea, near the edge the continental shelf, fishermen are trying to escape a predator that seems to outwit them at every turn, stripping their fishing lines and lurking behind their vessels.The predators are pods of killer whales chasing down the halibut and black cod caught by longline fishermen. Fishermen say the whales are becoming a common sight — and problem — in recent years, as they've gone from an occasional pest to apparently targeting the fishermen's lines.Fishermen say they can harvest 20,000 to 30,000 pounds of halibut in a single day, only to harvest next to nothing the next when a pod of killer whales recognizes their boat. The hooks will be stripped clean, longtime Bering Sea longliner Jay Hebert said in a phone interview this week. Sometimes there will be just halibut "lips" still attached to hooks — if anything at all."It's kind of like a primordial struggle," fisherman Buck Laukitis said about the orcas last week. "It comes at a real cost."The whales seem to be targeting specific boats, fisherman Jeff Kauffman said in a phone interview. FV Oracle Captain Robert Hanson said juvenile whales are starting to show up, and he thinks the mothers are teaching the young to go for the halibut and black cod the fishermen are trying to catch.Hanson, a fisherman who's worked in the Bering Sea since 1992, said the orca problem has become "systemic" in recent years. There are more pods present, he said, and the animals are getting more aggressive. Killer whales targeting fishing vessels happens all over Alaska, including in the western Gulf of Alaska and Aleutian Islands. But it's more common on the Bering Sea's continental shelf, where a higher density of whales overlaps with halibut and black cod fishing grounds. Killer whales are skilled hunters, NOAA fisheries biologist John Moran said. He said they can tell the sounds of different boats and even learn the sounds of the hydraulic system that lowers the fishing gear into the water.

A third of the world now faces deadly heatwaves as result of climate change - Nearly a third of the world’s population is now exposed to climatic conditions that produce deadly heatwaves, as the accumulation of greenhouse gases in the atmosphere makes it “almost inevitable” that vast areas of the planet will face rising fatalities from high temperatures, new research has found.  Climate change has escalated the heatwave risk across the globe, the study states, with nearly half of the world’s population set to suffer periods of deadly heat by the end of the century even if greenhouse gases are radically cut. High temperatures are currently baking large swaths of the south-western US, with the National Weather Service (NWS) issuing an excessive heat warning for Phoenix, Arizona, which is set to reach 119F (48.3C) on Monday. The heat warning extends across much of Arizona and up through the heart of California, with Palm Springs forecast a toasty 116F (46.6C) on Monday and Sacramento set to reach 107F (41.6C). The NWS warned the abnormal warmth would “significantly increase the potential for heat-related illness” and advised residents to drink more water, seek shade and recognize the early symptoms of heat stroke, such as nausea and a racing pulse.  Mora’s research shows that the overall risk of heat-related illness or death has climbed steadily since 1980, with around 30% of the world’s population now living in climatic conditions that deliver deadly temperatures at least 20 days a year. The proportion of people at risk worldwide will grow to 48% by 2100 even if emissions are drastically reduced, while around three-quarters of the global population will be under threat by then if greenhouse gases are not curbed at all. “Dying in a heatwave is like being slowly cooked, it’s pure torture. The young and elderly are at particular risk, but we found that this heat can kill soldiers, athletes, everyone.”

Kuwait swelters in 54C heat – what could be the highest temperature ever recorded on earth - If you're feeling flustered by the mini-heathwave over parts of the UK and Europe at the moment, then you'll want to avoid the Middle East right now. On Thursday a blistering temperature of 54C (129.3F) was recorded in Kuwait, firmly putting our hot spell into context. It is the highest temperature ever recorded in the eastern hemisphere and almost certainly the highest temperature ever recorded on earth.  A weather station in Mitribah, a remote featureless area of north-west Kuwait, took the temperature last week during an intense heatwave that continues in parts of the Middle East. The mercury in neighbouring Iraq on the same day soared to 53.9C (129F) in the ancient city of Basra.  If verified by the World Meteorological Organisation, they will almost certainly be the two highest temperatures ever recorded on the planet. Until now the official record for the highest temperature was 56.7C (134.1F) on 10 July 1913 at Furnace Creek Ranch in Death Valley, California. But many modern meteorologists are sceptical of the record, arguing that the equipment used at the time was prone to error and not as reliable as modern recording methods.

Heat wave hits Southwest on 1st day of summer - The first day of summer brought some of the worst heat the southwestern U.S. region has seen in years.Meteorologists said Tuesday’s temperature in Phoenix topped out at 119 degrees, a mark that’s only been matched or surpassed four other times in the city’s recorded history. The all-time high was 122 degrees on June 26, 1990.Death Valley, California, reached 127 Tuesday and Palm Springs hit 122, tying the degree for the same day last year.The heat wave comes amid new research findings that nearly 1 in 3 people now experience 20 days a year when the heat reaches deadly levels. Arizona Public Service Company, the state’s largest electricity provider, says customers set a record peak usage Tuesday as temperatures in Phoenix soared to nearly 120 degrees.Over 7,300 megawatts of energy were consumed between 5 and 6 p.m., topping the prior 11-year record set in 2006.In the Southwest U.S., this week’s heat has caused a handful of problems.In addition to grounding more than 40 flights of smaller planes, airlines have been taking other measures on larger jets to reduce their weight. American Airlines spokesman Ross Feinstein said the carrier began limiting sales on some flights to prevent the planes from exceeding maximum weight for safe takeoff in the hot conditions.

Trump’s “Make America Hot Again” Rally Canceled – Too Hot to Fly - As temperatures climb in Phoenix, Arizona, more than 40 flights have been cancelled – because it is too hot for the planes to fly.The weather forecast for the US city suggests temperatures could reach 120F (49C) on Tuesday.That is higher than the operating temperature of some planes.American Airlines announced it was cancelling dozens of flights scheduled to take off from Sky Harbor airport during the hottest part of the day.The local Fox News affiliate in Phoenix said the cancellations mostly affected regional flights on the smaller Bombardier CRJ airliners, which have a maximum operating temperature of about 118F (48C).The all-time record for temperatures in Phoenix is just slightly higher, at 122F, which hit on 26 June 1990.The cancelled flights were scheduled to take off between 15:00 and 18:00 local time.Why can’t planes fly? At higher temperatures, air has a lower density – it is thinner. That lower air density reduces how much lift is generated on an aircraft’s wings – a core principle in aeronautics.That, in turn, means the aircraft’s engines need to generate more thrust to get airborne. It’s a well-known problem – a 2016 report from the International Civil Aviation Organization (ICAO) even warned that higher temperatures caused by climate change could “have severe consequences for aircraft take-off performance, where high altitudes or short runways limit the payload or even the fuel-carrying capacity”.Those problems are why many countries in the Middle East, and some high-altitude airports in South America, tend to schedule long flights for the evening or night, when it is cooler.

It's So Hot in Arizona, Meteorologists Need New Weather Map Colors - It's so hot in the American Southwest that meteorologists are using unusual colors for their temperature maps. As reported by MLive 's Mark Torregrossa, with temperatures forecast to hit 120 degrees Fahrenheit in the Phoenix area, the folks at had to use green for its Wednesday map because the other shades were already used. "I've tweaked color banks on weather graphics for almost 30 years," Torregrossa wrote. "The trick is to get the colors to match the temperatures, as we have come to expect them. So cold temperatures are usually blue and purples, and hot temperatures are varying levels of red." "But sometimes extreme weather can make a graphic color bank hard to develop," he added. Not only that, Gizmodo pointed out that the National Weather Service's weather map usually shows a mix of green, yellow and orange this time of year. However, for its Tuesday map for Phoenix, the agency had to use magenta to represent "rare, dangerous, and very possibly deadly" heat. There have been a slew of heat-related incidents around the area due to the ongoing heatwave. Earlier this week, as temperatures hit 119 degrees Fahrenheit around Phoenix, flights were canceled for safety reasons. Dogs have burned their paws during walks on 160-degree asphalt. A local news team even successfully baked a frozen pizza outdoors during Tuesday's triple-digit scorcher.

Atlantic faces the rare prospect of two active tropical storms in June - Although the Atlantic hurricane season begins June 1, the bulk of the tropical activity typically clusters during the middle months of August, September, and October when the seas reach their peak temperatures. This year has already been unusual, however, with the formation of a highly rare tropical storm in April—Arlene, which meandered around the open Atlantic Ocean for a few days. Now, the tropics are becoming active again. For several days the National Hurricane Center has been calling attention to two systems, one near the southern Gulf of Mexico, and the other to the northeast of Venezuela in the Atlantic. Both systems have a 90 percent chance of becoming a tropical depression or storm, according to hurricane forecasters at the Miami-based center. From a climatic standpoint, the development of two more tropical storms in June this year would be intriguing. During a normal year, the Atlantic basin—which includes the Atlantic Ocean, Caribbean Sea and Gulf of Mexico—typically doesn't produce its third named storm until mid-August.  Additionally, a storm only forms about once every other June in the Atlantic. This year the Atlantic basin may see two active storms concurrently. According to hurricane scientist Phil Klotzbach, this has happened just three times in history, during the years 1909, 1959 and 1968. Somewhat reassuringly, he adds that 1909 ended up as an active season, 1959 a slightly below normal season, and 1968 a very quiet season. We might hope for the latter.

U.S. Coastal Cities Will Flood More Often and More Severely, Study Warns - Cities lining the U.S. coasts should brace for a lot more flooding — from "nuisance" floods that shut down streets during high tides to deluges that take lives and wipe out infrastructure.In a new study published Wednesday, researchers from Princeton and Rutgers universities warn that the current flooding predictions, including those widely used by policy makers, don't accurately reflect the frequency and types of floods that are likely to challenge American cities in the coming decades as global temperatures and sea levels rise.Their research found that major coastal flooding—expected to occur only once every 100 years—will inundate coastal cities an average of 40 times more often by 2050, likely overwhelming the cities' abilities to protect themselves.After 2050, the picture looks worse. Major flooding could slosh through the streets of New York City every other month by the end of the century, while major floods could sweep into Seattle nearly every week. "U.S. cities and infrastructure, on the coasts — East, Gulf or West — better wake up, because there are some very large frequencies coming," said Michael Oppenheimer, a Princeton professor who has researched sea-level rise for 20 years and is a co-author of the new study, published in Environmental Research Letters. "That's assuming we don't curtail greenhouse gas emissions."

Houston fears climate change will cause catastrophic flooding: 'It's not if, it's when' -- Sam Brody is a flood impact expert in Houston – and he has plenty of work to keep him busy.  The Texas metropolis has more casualties and property loss from floods than any other locality in the US, according to data stretching back to 1960 that Brody researched with colleagues. And, he said: “Where the built environment is a main force exacerbating the impacts of urban flooding, Houston is number one and it’s not even close.” Near the Gulf coast, Houston is also at annual risk from hurricanes: it is now into the start of the 2017 season, which runs from June to November. Ike, the last hurricane to hit the Houston region, caused $34bn in damage and killed 112 people across several states in September 2008.  There is little hope the situation is going to get better any time soon. Brody, a professor in the department of marine sciences at Texas A&M University’s Galveston campus, said the requests for help in Houston from people moving homes inspired him to create a forthcoming web tool so that people can type in an address and get a risk score. “If you can see your crime statistics, shouldn’t you be able to see your flood risk also? And other risks as well, human-induced risks?” he said. The site will be named Buyers Be-Where.  In May 2015, eight people, many of them motorists, died in Harris County when a storm dropped 11in of rain in parts of the city in 10 hours. Last year, another six lost their lives in an April storm that hurled 240bn gallons of water at the Houston area. An inch of rain fell over the county in only five minutes, with a peak of 16.7in in 12 hours. The events damaged thousands of homes, turning major freeways into canals and piling up vehicles as if they were in a junkyard. The 2016 flood cost an estimated $2.7bn in losses and prompted more than 1,800 high water rescues.

House panel passes flood insurance overhaul bills | TheHill: The House Financial Services Committee on Wednesday passed four bills intended to reduce the National Flood Insurance Program’s (NFIP) financial burdens and assist homeowners struggling to get claims approved by the federal insurance agency. The legislation will head to the House floor as part of a broader flood insurance reform initiative. Committee lawmakers have worked on revamping the debt-riddled NFIP since January 2016, weeks after holiday season floods devastated the Midwest and South. The program offers flood policies to residents of flood-prone areas where insurance is required. It runs out of funding on Sept. 30. Lawmakers are using the deadline as a push to cut the NFIP’s $24 billion debt and shift more flood insurance customers to a burgeoning private market. Private flood insurance was largely non-existent when the NFIP was established in 1968, and Republicans are eager to reduce taxpayer exposure to risky homes by easing federal policy holders into private plans.The committee passed a bill offered by Rep. Blaine Luetkemeyer (R-Mo.) that mandates the NFIP to send a percentage of its riskiest policies over to private insurers each year, waives the insurance coverage mandate for commercial buildings and allows state and local governments to submit their own flood maps to the NFIP to replace federal ones. The bill passed 36 to 24, largely along party lines. 

Thin ice: Vanishing ice only exacerbates a bad, climate change-fueled situation - Ice is also an active player in the Earth's climate—it doesn’t only respond to warming by melting. Changes in our planet’s ice are capable of feeding back on the climate system, creating further consequences for the globe. The regions of our planet where temperatures fall below the freezing point are characterized by ice and snow, lots of ice and snow. But now, in response to the warming of our planet, that entire system is changing.  On land, this includes the giant ice sheets on Greenland and Antarctica, the ice in mountain glaciers, snow on mountain tops, and frozen soil in boreal and tundra regions of the Northern Hemisphere—including large parts of Canada and Russia. The system is dynamic. In the world's polar regions, sea ice grows in winter and recedes in summer.   The cryosphere is the global story of ice, and it’s a highly active and important component in our Earth's climate system. But, again, the behavior of the cryosphere is changing. That is primarily because ice responds to rising temperatures, melting with increasing heat.   Across the continents, mountain glaciers and the ice sheets of Greenland and Antarctica are melting. Cryosphere changes like these are having profound impacts on our planet. Albedo is a measure of how reflective a surface is, and the Earth's albedo influences the climate by determining how much sunlight is absorbed. Ice and snow have very high albedos, meaning they reflect a lot of sunlight. According to Dr. Johannes Sutter, a climatologist at the Alfred Wegener Institute in Bremerhaven, Germany, “the cryosphere is the planet's air conditioner. Its white surface—snow and ice—reflect much of the incoming sunlight, cooling the environment.” Thus, changes in ice coverage can modulate the temperatures of nearby regions. This is especially true with respect to sea ice, which is currently undergoing a massive decline in the Arctic. These areas are experiencing a phenomenon known as polar amplification, warming at a much higher rate than the rest of the planet.

 Warm Waters in West Antarctica - The vast Antarctic ice sheet contains about 30 million cubic kilometers of ice, which is 90% of the Earth’s freshwater ice. If it were all to melt, it would increase sea level by about 70 meters. Fortunately, surface temperatures across most of the continent stay well below freezing all year round so there is virtually no ice loss through surface melt. Instead, most of the ice loss is through iceberg calving and ocean-induced melting from the under-side of ice shelves.  One area that scientists are keeping a close eye on is the Amundsen Sea Embayment to the west of the Antarctic Peninsula. Here the ice is being melted from below by warm ocean waters at a greater rate than ice is added through snow accumulation, and this region is currently contributing about a tenth of current global sea level rise. A review article recently published in Reviews of Geophysics examined the complex atmospheric and oceanic factors that control the delivery of warm waters to the sub-ice region of West Antarctica and considered the potential for ice loss in the future. The editors asked two of the authors to give an overview of scientific research in this area. Most of the ice across the East Antarctic rests on rock that is above sea level and is therefore relatively stable. However, the West Antarctic Ice Sheet is a marine-based ice sheet where much of the ice sits on bedrock that is below sea level. This makes it vulnerable to relatively warm waters melting the ice from below, especially in the areas where the ice floats on the ocean as ice shelves. The melting, retreat and thinning of the glaciers around the Amundsen Sea Embayment over recent decades is of great concern because the ice shelves buttress the ice in the interior of West Antarctica and there is a fear that loss of the ice shelves will accelerate the loss of ice in the future. Delivery of warm water to below the ice shelves of the Amundsen Sea Embayment is strongly influenced by the winds over the Southern Ocean just to the north of the region and therefore the weather systems in this area. Storm activity here is more variable than anywhere else on Earth as a result of being affected by tropical climate variability, such as the El Niño Southern Oscillation, and the Antarctic ozone hole. Melting of the ice is therefore very variable on a year to year basis.

Melting and cracking – is Antarctica falling apart? - Antarctica boasts a great many superlatives: it is the driest continent, the coldest, the remotest, the windiest and the highest on average. Right now, during midwinter, it is also the darkest. As a rift on the continent’s Larsen C ice shelf lengthens and gets closer to the ice front, we are anticipating the detachment of a large tabular iceberg within the next few weeks. This comes after observations of a waterfall on another ice shelf last summer, reports of extensive surface melting on several ice shelves and, in a report last week, indications of a widespread surface-melting event, which included rainfall as far as 82° south, during the 2015-16 El Niño. Are glaciologists shocked by any of this? Is Antarctica going to melt away? Is Larsen C about to collapse? The answer to these questions is no. Glaciologists are not alarmed about most of these processes; they are examples of Antarctica simply doing what we know Antarctica has done for thousands of years. But because there is a potential link between the ice sheet and climate change, glaciologists are suddenly faced with a situation where the spotlight is on our science on a seemingly daily basis, and every time a crack grows, or a meltstream forms, it becomes news. The situation is a conundrum: we want people to be aware of Antarctica and concerned about what might happen there in the near future as climate changes. But hyping research results to sound like climate change, when they are just improved understanding of natural behaviour, is misleading. To understand all of this, we need to think about how Antarctica works. The ice sheet stores 90% of Earth’s freshwater, which would translate to about 60m of sea-level rise around the globe if it all melted.  The ice gets there through snowfall, just like the ski slopes at Chamonix, but, in Antarctica, with annual average temperatures ranging from -5C to -60C, most of the snow that falls over winter remains at the end of each summer. Over millions of years, snowfall has been added, buried and compacted by new snowfall, and an ice sheet has grown. Once the ice is thick enough, it flows downhill towards the ocean, where it lifts off the ground and floats, forming an ice shelf. In contact with the ocean below and the atmosphere above, this is where the “rubber hits the road”: to maintain its size, the ice sheet must shed the extra ice it gains through snowfall, which it does through two processes that both occur at the ice shelves – calving of icebergs at the front, and melting underneath. If shedding from ice shelves exceeds the gains from snowfall, they will shrink, and then glaciers feeding them will feel less resistance to flow and speed up, and sea level will rise.

 The latest threat to Antarctica: an insect and plant invasion-  Antarctica’s pristine ice-white environment is going green and facing an unexpected threat – from the common house fly. Scientists say that as temperatures soar in the polar region, invading plants and insects, including the fly, pose a major conservation threat. More and more of these invaders, in the form of larvae or seeds, are surviving in coastal areas around the south pole, where temperatures have risen by more than 3C over the past three decades. Glaciers have retreated, exposing more land which has been colonised by mosses that have been found to be growing more quickly and thickly than ever before – providing potential homes for invaders. The process is particularly noticeable in the Antarctic peninsula, which has been shown to be the region of the continent that is most vulnerable to global warming. “The common house fly is a perfect example of the problem the Antarctic now faces from invading species,” said Dominic Hodgson of the British Antarctic Survey. “It comes in on ships, where it thrives in kitchens and then at bases on the continent. It now has an increasing chance of surviving in the Antarctic as it warms up, and that is a worry. Insects like the fly carry pathogens that could have a devastating effect on indigenous lifeforms.” The Antarctic has several native species of insects. Together with its indigenous mosses and lichens, these are now coming under increased threat from three major sources: visiting scientists; swelling numbers of tourists; and global warming. In 2015-6, more than 38,000 tourists visited Antarctica while around 43,000 were expected for the following season. “Camera bags are a particular problem. People take them from one continent to the next and rarely clean them. They put them on the ground and seeds picked up elsewhere get shaken loose. It is a real issue.” 

37 of the World's Biggest Banks Fueling Climate Change -- A report released Wednesday by Rainforest Action Network, BankTrack, Sierra Club and Oil Change International, in partnership with 28 organizations around the world, revealed that the world's biggest banks are continuing to fuel climate change through the financing of extreme fossil fuels. The report found that 2016 actually saw a steep fall in bank funding for extreme fossil fuels. However, despite this overall reduction, banks are still funding extreme fossil fuel projects at a rate that will push us beyond the 1.5 degrees climate change limit determined by the Paris climate agreement. In 2014, the banks analyzed in the report funneled $92 billion to extreme fossil fuels. In 2015, that number rose to $111 billion. 2016 was the first full calendar year to be studied since the signing of the Paris climate agreement—and the $87 billion figure represents a 22 percent drop from the previous year. While the drop-off is a move in the right direction, it is vital that this become an accelerating trend and not a blip. The findings showed that if we are to have any chance of halting catastrophic climate change and reaching the Paris goal of limiting climate change to 1.5 degrees, there must be a complete phaseout of these dangerous energy sources and banks must implement policies against extreme fossil fuel funding. "Right now, the biggest Wall Street funder of extreme fossil fuels is JPMorgan Chase," said Lindsey Allen, executive director of Rainforest Action Network. "In 2016 alone they poured $6.9 billion into the dirtiest fossil fuels on the planet. On Wall Street they are number one in tar sands oil, Arctic oil, ultra-deepwater oil, coal power and LNG export. "Even in this bellwether year when overall funding has declined, Chase is funneling more and more cash into extreme fossil fuels. For a company that issues statements in favor of the Paris climate accord, they are failing to meet their publicly stated ambitions."

Bank of England to probe banks’ exposure to climate change (FT ) The Bank of England will probe banks’ exposure to climate change as it steps up efforts to tackle what it says are “significant” financial threats posed by global warming. Climate change experts said the BoE’s decision to do an internal review of the banking sector, which the central bank revealed on its website on Friday, marked a first. The BoE did not spell out exactly what its new investigation would entail or if it would result in a public report, saying only that it was “initiating a review of climate-related risks in the UK banking sector”. However, the central bank said the work would be carried out in a similar way to an assessment of insurance companies it launched in 2014. That effort included a mix of internal research, surveys and meetings with selected companies.

Exxon Mobil Lends Its Support to a Carbon Tax Proposal -- Exxon Mobil, other oil companies and a number of other corporate giants announced on Tuesday that they are supporting a plan to tax carbon emissions that was put forth this year by a group of Republican elder statesmen. The group, the Climate Leadership Council, unveiled a “conservative climate solution” in February that would fight global warming by taxing greenhouse gas emissions and returning the money to taxpayers as a “climate dividend.” The underlying idea is that, by making energy derived from fossil fuels more expensive, the free market will move more quickly and effectively toward renewable energy and other low-carbon solutions. Exxon Mobil, BP, Royal Dutch Shell and Total S.A. publicly backed the plan on Tuesday, and they have a number of reasons to lend their support. The plan calls for scrapping Obama-era regulations intended to fight climate change, arguing that a market-driven approach will have the same effect in reducing emissions as the regulations would.  The oil giants could simply pass the cost of new taxes on to customers. And to protect American companies, the plan would introduce so-called border adjustments, intended to increase the cost of goods coming from nations that do not have a similar carbon tax. The proposal also says companies that emit greenhouse gases should be protected from lawsuits over their contribution to climate change.

Finding the Greater Fool — The Elite Logic Behind “Going Over the Climate Cliff” -- Gaius Publius - The “Seneca Cliff” is the point at which a system that grew large slowly, starts to collapse rapidly. (image source). Any complex system can go over the Seneca Cliff, says climate scientist Ugo Bardi. (Can you guess why he’s studying it?) The basic idea is this: Climate people — activists, scientists, concerned citizens, “woke” politicians — think that the elite drive to march human civilization over the climate cliff is, to put it frankly, “nuts.” Irrational. Or “insufficiently self-interested,” to put it much too mildly. I’ve begun to think differently though. I’ve begun to think that elites who are driving us over the cliff are not at all irrational. Someone who’s had that same thought as well is climate scientist Ugo Bardi, who offers a lay person’s view of much of his current work at The Seneca Effect. Bardi’s goal is to study, in his words, “why complex systems fail,” and further, why they often fail rapidly.   Now to my own point. In a recent post, Dr. Bardi looked at the Maldive Islands, one of the most seriously threatened inhabited places in the world when it comes to climate change. According to the IPCC, 75% of the Maldive Islands could be under water by 2100. Yet here’s what the rulers of the Maldives plan to do — stimulate development:  Full Guardian article here. Boggles the mind, doesn’t it? Actually it doesn’t. Dr. Bardi: Is this an epidemics of brain disease? Or do the Gods really drive crazy those whom they want to destroy? Maybe. But there is also a perfectly rational explanation for what’s happening. Imagine that you are part of the elite of the Maldives. And imagine that you are smart enough to understand what’s going on with the Earth’s climate. As things stand today, it is clear that it is too late to stop a burst of global warming that will push temperatures so high that nothing will save the Maldives islands. So, given the situation, what is the rational thing for you to do? Of course, it is to sell what you can sell as long as you can find a sucker who will buy. Then you can say good riddance to those who remain. In the case of the Maldives, Dr. Bardi concludes (emphasis mine): “What we are seeing, therefore, is a game in which someone will be left holding the short end of the dynamite stick. When the elites of the Maldives will have left for higher grounds, the poor will be stuck there. For them, the Seneca Cliff ends underwater.” Can you guess where this logic leads us with respect to the planet? Not interstellar travel for the elites, but something else. If you still haven’t figured out what “then leave” means for them, stay tuned.

California’s climate change priority to challenge its ports - When California governor Jerry Brown responded to President Trump’s June 1 decision to withdraw from the Paris climate change agreement by flying to Beijing and signing a “bilateral” accord with Xi Jinping, it underscored CNN’s comment that “if there is an issue about which Brown is most passionate, it is climate change.”For users of California’s seaports, that is relevant information regarding the priorities of the largest US state. It appears the state’s all-out commitment to mitigating climate change is taking priority over maintaining the competitiveness of the state’s seaports, particularly the critical Los Angeles-Long Beach gateway. This comes at a time when the Southern California ports’ hold on discretionary cargo is as tenuous as ever. The state revealed its ambitions in March when the California Air Resources Board (CARB) secretly adopted resolutions that would, in the name of reducing air emissions, place physical limits on business activity at distribution centers, railyards, and other logistics facilities. From a port and supply chain point of view, the rules would constitute “a state-imposed cargo diversion mandate,” Pacific Merchant Shipping Association president John McLaurin told the California Retailers Association on May 31.The agency also mandated development of regulations for California marine terminals that would require the use of 100 percent zero emission equipment and shoreside electrical power by 2030 for all ships, including oil tankers, while at berth. Port engineering firm Moffatt and Nichol estimates the cost to implement the mandate at between $23 billion and $36 billion. At that price, state support would be a requirement, but the mandate is already proving politically problematic with the West Coast d ockworker union; the International Longshore and Warehouse Union has gone on record as opposing the use of public funds for investments that could end up advancing automation at ports and thus displace dockworkers. “No public discussion was allowed, (and) the resolution was not available to the public prior to the vote,” McLaurin told the retailer group.

Lawmakers say GOP reining in DNR scientists who rebelled on climate change - Deep in Gov. Scott Walker’s budget proposal is a seemingly benign item formalizing the transfer of 15 scientists within the Wisconsin Department of Natural Resources. Two years ago, Walker and lawmakers enacted a budget that cut 18 DNR science service bureau researchers amid complaints that their research related to climate change, pollution and wildlife habitat were controversial and unneeded. Now the science services bureau is being dissolved and its remaining scientists moved to program offices that use their research.A frequent critic of the DNR said the move will give more control to DNR Secretary Cathy Stepp, who was appointed by Walker in 2011 to make the department friendlier to business. “I think it’s a more disciplined approach where the leadership of the Department of Natural Resources really directs that research,” said Sen. Tom Tiffany, a Hazelhurst Republican and part of the GOP majority on the Legislature’s budget committee. Stepp should be able to ensure that research benefits sportsmen and the DNR should be better able to prevent further research that takes climate change into account, Tiffany said. 

Energy Secty Rick Perry: CO2 is not the main driver of climate change: Energy Secretary Rick Perry told CNBC on Monday he does not believe carbon dioxide emissions from human activity are the main driver of climate change, joining the EPA administrator in casting doubt on the conclusion of some of the government's top scientists. Asked whether CO2 emissions are primarily responsible for climate change, Perry told CNBC's "Squawk Box": "No, most likely the primary control knob is the ocean waters and this environment that we live in." "The fact is this shouldn't be a debate about, 'Is the climate changing, is man having an effect on it?' Yeah, we are. The question should be just how much, and what are the policy changes that we need to make to effect that?" he said. In March, Environmental Protection Agency Administrator Scott Pruitt told "Squawk Box" he does not believe carbon dioxide is a primary contributor to global warming. Those statements contradict the public stance of the Environmental Protection Agency, at least until recently. The EPA's webpage on the causes of climate change used to state, "Carbon dioxide is the primary greenhouse gas that is contributing to recent climate change." The EPA recently took down the web page containing that statement. Perry and Pruitt's views are also at odds with the conclusion of NASA and the National Oceanic and Atmospheric Administration. Despite those conclusions, Perry said, "This idea that science is just absolutely settled and if you don't believe it's settled then somehow you're another neanderthal, that is so inappropriate from my perspective." 

Senate confirms new FEMA administrator - The Senate voted 95-4 on Tuesday to confirm Brock Long as the next head of the Federal Emergency Management Agency. His confirmation comes at a time when Congress is considering several bills to reform and re-authorize the National Flood Insurance Program, which is run by FEMA.

EPA Gives Notice to Dozens of Scientific Advisory Board Members, Plans to Offer Buyout to 1,200 Employees -  Dozens of scientists on the U.S. Environmental Protection Agency's (EPA) Board of Scientific Counselors and board subcommittees have been informed that they will not be renewed for their roles advising the agency, the Washington Post reported.  The move, which would dismiss 38 of the 49 remaining subcommittee members, "effectively wipes out [the board] and leaves it free for a complete reappointment," board executive committee chair Deborah Swackhamer told the Post. Advisory board members aren't the only ones facing the end of their time at EPA: the agency also announced Tuesday plans to buy out more than 1,200 employees this summer. This signals a troubling attitude toward the EPA's scientific work, according to Ken Kimmell, president of the Union of Concerned Scientists . "By sacking dozens of scientific counselors, [EPA Administrator Scott] Pruitt is showing that he doesn't value scientific input and the benefits it offers the public," Kimmell said.  "The administrator has an important job to do—and this includes listening to the best independent science and to make decisions that protect our health, our safety and our environment. Instead, he's delaying important public protections, denying the facts of climate change , and now, dismissing expert researchers who could help EPA do its best work. It's appalling to see an administrator so directly attack the effectiveness of his own agency."

Scott Pruitt vows to speed the nation’s Superfund cleanups. Communities wonder how.— Dawn Chapman had listened with surprise and skepticism as the new head of the Environmental Protection Agency vowed to clean up West Lake, the nuclear waste dump that has filled her days and nights with worry.   “The past administration honestly just didn’t pay attention to [it],” Scott Pruitt stressed on a local radio show in April. “We’re going to get things done at West Lake. The days of talking are over.” The next month, Pruitt took to television to say a plan for the site was coming “very soon” as part of his push to prioritize Superfund cleanups across the country. “Why our site? Why now? Can he keep those promises?” the mother of three wondered. Her family lives only a couple of miles from West Lake, a contaminated landfill that contains thousands of tons of waste from the World War II-era Manhattan Project. “My biggest fear is he’s just going to put a Band-Aid on it.”  In Bridgeton and elsewhere, others are asking similar questions with various degrees of hope and hesi­ta­tion. In his previous role as Oklahoma’s attorney general, Pruitt had long-standing ties to oil and gas companies and a litigious history fighting the EPA. And although he has called the federal Superfund program “vital” and a “cornerstone” of the EPA’s mission, the Trump administration has proposed slashing its funding by 30 percent. With more than 1,300 Superfund sites nationwide — some of which have lingered for decades on the EPA’s ever-growing “priorities list” — it’s unclear how Pruitt will back up his professed commitment in an age of scorched-earth budgets. Critics worry that a single-minded focus on speeding up the process could lead to inadequate cleanups. (The Washington Post) Pruitt has largely dismissed such issues. He argues that the program is beset more by bloated administrative costs and a shortage of initiative than by budget woes, and he notes that, at most sites, “private funding” is available from firms deemed responsible for cleanups. “This agency has not responded to Superfund with the type of urgency and commitment that the people of this country deserve,” Pruitt reiterated. “This agency has failed them. . . . They have a right to be skeptical.” That they are. Residents in the shadow of Superfund sites remain wary of his pronouncements. 

Donald Trump claims attaching solar panels to Mexico border wall will ensure fortification 'pays for itself' -  US President Donald Trump said he’s proposed building a “solar wall” on the Mexican border that would pay for itself by generating electricity. “We’re thinking of something that’s unique, we’re talking about the southern border. Lots of sun, lots of heat,” Mr Trump said at a campaign rally in Cedar Rapids, Iowa. “We’re thinking about building the wall as a solar wall, so it creates energy, and pays for itself. And this way Mexico will have to pay much less money, and that’s good. Is that good?” Mr Trump ran for the presidency on an oft-repeated promise to construct a wall across the 1,933-mile Mexican border to stop undocumented immigration. His speech in Iowa was the first time he has publicly described his proposal to build the wall as a solar power plant, though Politico previously reported that he privately floated the idea to Republican members of Congress in a White House meeting on 6 June. “Think about it, the higher it goes, the more valuable it is. Pretty good imagination, right, good?” Trump said in Iowa. “My idea.” Mr Trump’s first full-year budget, released in May, proposes a $1.6bn (£1.3bn) down payment for new and replacement sections of a border wall. 

Senators: Trump’s Interior budget is going nowhere --  Senators of both parties on Tuesday poked holes in President Trump’s budget request for the Interior Department, which cuts funding for the agency by 11 percent. During a Tuesday hearing, Sen. Lisa Murkowski (R-Alaska) told Interior Secretary Ryan Zinke that the budget is “better than what we have seen in the last few years,” but that it’s still not going anywhere on Capitol hill. "I don't expect many of [the cuts] to become a reality, especially those that target popular programs," Murkowski, the chair of the Energy and Natural Resources Committee, said. Murkowski singled out proposed cuts to a royalty-sharing program for offshore oil drilling, though other senators raised concerns about funding for conservation and outdoor efforts like the Land and Water Conservation Fund and the operations budget at the National Park Service. “I find the budget so focused on the oil and natural gas aspect of revenue that I think that you are neglecting the fact that the outdoor economy generates $887 billion a year,” Sen. Maria Cantwell Maria Cantwell (D-Wash.), the ranking member, said. "I want to make sure that we are putting pedal to the metal as it relates to the outdoor economy ” Zinke told the committee that the $11.7 billion budget prioritizes spending for maintenance while cutting funding for other Interior efforts, including land acquisition. “This is what a balanced budget looks like,” he said. “There’s tough decisions throughout, but if we want to balance the budget, this is the starting point for what that looks like.” 

Analysis: Fact-checking President Trump's energy policy claims – Platts - US President Donald Trump Wednesday night broadly outlined his administration's energy policy in a speech that touched on oil pipelines, ethanol production and the Paris climate accord. The speech, at a rally in Cedar Rapids, Iowa, also included a number of false and misleading statements on the administration's policy positions and their impact on energy markets. Here's a fact-check of some of Trump's energy-related quotes: TRUMP: "We've eliminated restrictions on the production of American energy." VERDICT: Mostly false. The Trump administration has prioritized the repeal of numerous Obama-era regulations on oil, natural gas and coal production, including limits on methane emissions from oil and gasoperations and new regulations for hydraulic fracturing on federal lands. But the regulations the administration has worked to roll back were not even in effect and some were only proposed rules.  TRUMP: "Under our feet we have great wealth. Not only in the form of your kind of wealth, which is beautiful, fertile soil, but also in other locations in the form of energy. They wanted to take that power and that wealth away from us." VERDICT: Likely false. The question is who is Trump referring to here? Some OPEC ministers wanted US oil producers to lose market share amid the shale boom and numerous environmental groups had pushed the Obama administration to dramatically curtail fossil production and focus on renewable energy sources, a position some in the previous administration likely viewed favorably. But the Obama administration never seriously pushed a plan to curb US production. In fact, the opposite occurred. US oil production.TRUMP: "And 33,000 mining jobs have been added since my inauguration."VERDICT: False. There were 51,402 coal mining jobs in the fourth quarter of 2016 and 52,282 coal mining jobs in the first quarter of 2018, an increase of 880 jobs, according to the Department of Labor's Mine Safety and Health Administration. TRUMP: "In fact, you read about it, last week a brand, new coal mine just opened in the state of Pennsylvania, first time in decades, decades."VERDICT: False. It hasn't even been a decade, let alone decades, even if only considering mines in Pennsylvania.  TRUMP: "We've approved, first day, the Keystone XL Pipeline and the Dakota Access Pipeline. First thing. Day one."  VERDICT: False. Trump's first day in office was January 20. On January 24, Trump signed executive memos aimed at speeding the approvals of the stalled Keystone XL and Dakota Access pipelines, but these memos were not formal approvals.

Ernest Moniz Is Back - While President Donald Trump’s Energy Department is studying how to save coal plants, veterans from the administration of President Barack Obama’s Energy Department announced a new effort to figure out how to curtail carbon in the U.S. energy system. Ernest Moniz, who was Obama’s Energy secretary, said Wednesday that there is a “leadership void” under Trump, and his new group would pursue much of the research and analysis that was begun in the federal government under his tenure. Given Trump’s budget proposal to cut energy spending by $3.2 billion, Moniz said this nonprofit, called the Energy Futures Initiative, is necessary. The budget "just across the board doesn’t do the job," Moniz said at the National Press Club. "There is not a credible way to say the budget supports the kind of activities that we were pursuing." Moniz, a nuclear physicist who has taught at the Massachusetts Institute of Technology, already began a study of the U.S. electrical grid that could rival a similar one initiated by his successor, Rick Perry, at the Energy Department. Moniz has gathered a number of former Energy Department employees, including Joseph Hezir, its former chief financial officer, and Melanie Kenderdine, his energy counselor who also served as director of the department’s Office of Energy Policy and Systems Analysis. In addition to the group’s study of the grid -- expected out later this year -- Moniz said the venture will focus on areas such as energy security like the Strategic Petroleum Reserve, global gas markets, nuclear power and technological breakthroughs. Much of that is work the Energy Department was doing under Obama, work that Moniz said would likely grind to a halt under Trump’s budget proposal. 

Fisticuffs Over the Route to a Clean-Energy Future - Could the entire American economy run on renewable energy alone?  Democrats in both the United States Senate and in the California Assembly have proposed legislation this year calling for a full transition to renewable energy sources.They are relying on what looks like a watertight scholarly analysis to support their call: the work of a prominent energy systems engineer from Stanford University, Mark Z. Jacobson. With three co-authors, he published a widely heralded article two years ago asserting that it would be eminently feasible to power the American economy by midcentury almost entirely with energy from the wind, the sun and water. What’s more, it would be cheaper than running it on fossil fuels.And yet the proposition is hardly as solid as Professor Jacobson asserts.In a long-awaited article published this week in The Proceedings of the National Academy of Sciences — the same journal in which Professor Jacobson’s manifesto appeared — a group of 21 prominent scholars, including physicists and engineers, climate scientists and sociologists, took a fine comb to the Jacobson paper and dismantled its conclusions bit by bit. The conclusion of the critique is damning: Professor Jacobson relied on “invalid modeling tools,” committed “modeling errors” and made “implausible and inadequately supported assumptions,” the scholars wrote. “The experts are not opposed to aggressive investments in renewable energy. But they argue, as does most of the scientific community represented on the Intergovernmental Panel on Climate Change, that other energy sources — atomic power, say, or natural gas coupled with technologies to remove carbon from the atmosphere — are likely to prove indispensable in the global effort to combat climate change. Ignoring them risks derailing the effort to combat climate change.  But with the stakes so high, the gloves are clearly off. Professor Jacobson is punching back hard. In an article published in the same issue of the Proceedings and in a related blog post, he argues that his critics’ analysis “is riddled with errors and has no impact” on his conclusions. In a conversation over the weekend, he accused his critics of being shills for the fossil fuel and nuclear industries, without the standing to review his work. “Their paper is really a dangerous paper,” he told me.

How Do We Get to 100% Renewable Energy? Could be Storage - Union of Concerned Scientists - As communities, companies, and even entire Midwestern utility companies move to supply 100% of electricity needs from renewable energy, the question presents itself: is this even possible? The answer, it turns out, is yes—and it’s made possible by the technical capabilities of advanced energy technologies (and especially storage). This is UCS, so let’s talk about how to get the hard stuff done. To replace conventional generation with renewables, eventually all the services from fossil-fuel power plants have to be supplied by adding wind, solar, smart consumer appliances and electric vehicles, and storage. As ] renewable energy is added by businesses and utilities, here are 5 great building blocks for a future that is 100% renewable energy. […]  New energy storage deployments demonstrate just how quickly we can overcome the limit that the sunset creates for solar. Long-duration storage is already being paired with variable renewable generation (solar now, look soon for wind), making it able to satisfy market, reliability, and regulatory requirements. With the introduction of inverters and better energy storage, decision-makers are, for the first time, facing the reality that renewables and storage may be able to replace what’s currently used.

The quest for 100% renewables – can curtailment replace storage? –Previous Energy Matters posts have highlighted the prohibitive amounts of energy storage that are needed to make 100% intermittent renewables work. In this post I give the problem one last shot. Can storage requirements be reduced to manageable levels by producing more renewable energy than is needed to fill demand and curtailing the surpluses? The answer is no. Curtailment does indeed reduce storage requirements, but not to manageable levels. This would appear to eliminate the possibility of developing a grid powered 100% by intermittent renewables. Backup fossil fuel generation will always be needed to fill demand when the sun doesn’t shine and the wind doesn’t blow.

America’s hungriest wind and solar power users: big companies | Reuters: Major U.S. corporations such as Wal-Mart Stores Inc and General Motors have become some of America’s biggest buyers of renewable energy, driving growth in an industry seen as key to helping the United States cut carbon emissions. Last year nearly 40 percent of U.S. wind contracts were signed by corporate power users, along with university and military customers. That's up from just 5 percent in 2013, according to the American Wind Energy Association trade group. These users also accounted for an unprecedented 10% of the market for large-scale solar projects in 2016, figures from research firm GTM Research show. Just two years earlier there were none. The big reason: lower energy bills. Costs for solar and wind are plunging thanks to technological advances and increased global production of panels and turbines. Coupled with tax breaks and other incentives, big energy users such as GM are finding renewables to be competitive with, and often cheaper than, conventional sources of electricity. The automaker has struck deals with two Texas wind farms that will soon provide enough energy to power over a dozen GM facilities, including the U.S. sport utility vehicle assembly plant in Arlington, Texas that produces the Chevrolet Tahoe, Cadillac Escalade and GMC Yukon. The company is already saving $5 million a year worldwide, according to Rob Threlkeld, GM's global manager of renewable energy, and has committed to obtaining 100% of its power from clean sources by 2050. "It's been primarily all driven off economics," Threlkeld said. "Wind and solar costs are coming down so fast that it made it feasible."

FEMA Is Preparing For A Solar Storm That Would Take Out The Grid --FEMA (Federal Emergency Management Administration) is planning for a massive solar storm that would be so strong, it would take down the power grid.Noting that the rare, yet “high-consequence” scenario has “the potential for catastrophic impact on our nation and FEMA’s ability to respond.”According to unpublished FEMA documents obtained by Government Attic, a FOIA (Freedom of Information Act) database and non-profit organization, the Department of Homeland Securityagency once mapped out a disaster plan for the occurrence of another geomagnetic “super storm” like the one the occurred in 1859. Back then, the sun flung a giant plume of magnetized plasma out into space. The coronal mass ejection (CME), the sibling of a massive solar flare, traveled the 93 million miles between the Sun and Earth in only 17.6 hours. Today, it’s known as the Carrington Event and is remembered by the largest geomagnetic storm in the history of recorded space weather. Sparks leaped from the telegraph infrastructure, and machinery was so inundated with electric currents that operators were able to transmit messages while disconnected from battery power. But that doesn’t mean the ill-equipped government isn’t preparing for the inevitability, in fact, they are. Despite our superior ability to predict these events, the stakes are exponentially higher in a modern, hyper-connected world.  FEMA predicts that a geomagnetic storm of this intensity would be “a catastrophe in slow motion.” Space weather events happen all the time, and many are harmless. For example, an event causing radio blackouts, solar radiation storms, and geomagnetic storms would be abnormal, yet the ripple effects on the power grid and communications would severely limit FEMA’s ability to respond to a nationwide crisis.

Watch Hackers Take Over the Mouse of a Power-Grid Computer in Ukraine - The best work of hackers tends to remain invisible. But when sophisticated intruders broke into the computer networks of regional energy firms in Ukraine in 2015 and cut power to roughly a quarter million people, their tampering didn't go unnoticed. In this rare instance, the staff of one of those electric utilities managed to capture the hackers' handiwork on video, which you can watch above. Two days before Christmas in 2015, engineers at the Prykkarpatyaoblenergo regional energy company in Western Ukraine found themselves locked out of their PCs. More troubling still, their mouse cursors moved of their own accord. The workers watched as hackers methodically clicked on circuit breakers in their grid operation software, each time opening the breakers and cutting power to another swath of the region. In the process of reporting our cover story on those blackouts— and the larger cyberwar affecting Ukraine—WIRED obtained a video that one of those engineers shot with his iPhone, recording a "phantom mouse" attack as it happened. The PC shown in the video was a test unit, not actually connected to Prykkarpatyaoblenergo's grid equipment. But hackers used the same attack on every other networked computer connected to the company's live electric-control systems, spurring six-hours of blackouts that extended to the Ukrainian city of Ivano-Frankivsk. In WIRED's investigation of that breach and another blackout that occurred in Ukraine a year later, we've tracked the evolution of those hackers: How they've graduated to using a digital weapon known as CrashOverride that can trigger Stuxnet-style automated attacks on infrastructure, and how those attacks may just be tests for future operations—perhaps against the United States. Read the full story here.

Renewable Energy Enables EU Climate Target Achievement At Lower Cost -- Renewable energy can be developed in Europe at significantly lower cost than assumed in the modelling assessments accompanying the “Clean Energy for All Europeans” Package. Since wind and solar energy are by far the cheapest energy sources for the low-carbon production of energy, the EU climate targets — 40% lower greenhouse gas emissions by 2030 compared to 1990 levels — can be achieved at lowest cost by combining the deployment of renewable energy with energy savings. The EU renewable energy target — currently to achieve a 27% share of renewable energy in final energy consumption by 2030 — can be considerably raised without additional cost. These are key conclusions of a new Discussion Paper by the think-tank Agora Energiewende, which analyses the assumptions underlying the European Commission’s impact assessment.

Saudis accelerate plans for renewable energy — The Saudi government is making good on its pledge to introduce solar and wind power into the kingdom’s energy mix so that renewable energy becomes a growing part of the feedstock for the country’s electricity genera­tion. This will free up more of the Gulf country’s crude products and natural gas for export sales. In April, Riyadh announced the names of 51 companies, primarily foreign, that have been shortlisted for two renewable energy projects: 27 firms were selected to bid on a 300 megawatt solar project to be developed in the northern part of the kingdom and 24 firms were chosen to vie for a 400 MW wind farm project in the country’s northwest. The projects are the first of up to 30 ventures the Saudi govern­ment is planning as part of a $30 billion-$50 billion investment in renewable energy by 2023, the year by which Riyadh intends to produce around 10 gigawatts of electricity from solar, wind and geothermal power. Speaking at the start of the Saudi Arabia Renewable Energy Invest­ment Forum in April, Saudi Oil Min­ister Khalid al-Falih said 10 percent of the kingdom’s total electricity genera­tion will be from renewable energy by 2023. Falih noted: “The market re­sponse to the kingdom’s invita­tion to its first renewable energy projects has been overwhelmingly positive, demonstrating market confidence in our vast renewable energy potential and investment environment.” 

Domestic appliances guzzle far more energy than advertised – EU survey  -- TVs, dishwashers and fridge freezers have been found to guzzle up to twice as much energy as advertised on their energy labels, in a wide-ranging EU product survey.When tested under real-world conditions, the €400,000, 18-month investigation found widespread overshooting of the goods’ colour-coded A-G energy classes, due to the outmoded and selective test formats on which these have been based.Switching on modern TV features such as “ultra-high definition” and “high-dynamic range” in real-world test cycles boosted energy use in four out of seven televisions surveyed – one by more than 100%.In an echo of past “defeat device” scandals, another TV set increased its energy consumption by 47% when tested in a cycle based on real-world viewing, instead of the European standard measurement. “This model stands out as potentially detecting and adjusting its behaviour to reduce average power consumption when measured with the EN 62087:2016 test video clip,” the report says.The video clip is a standard test sequence introduced a decade ago by the International Electrotechnical Commission (IEC) to measure home viewing patterns. Regulators in the UK and Sweden have already complained to the European commission about TV sets that seem to cut their energy use when they recognise the IEC clip being played.

Study: Tesla car battery production releases as much CO2 as 8 years of driving on petrol -- Huge hopes tied to electric cars as the solution to automotive climate problem. But the electric car batteries are eco-villains in the production. Several tons of carbon dioxide has been placed, even before the batteries leave the factory. IVL Swedish Environmental Research Institute was commissioned by the Swedish Transport Administration and the Swedish Energy Agency investigated litiumjon batteries climate impact from a life cycle perspective. There are batteries designed for electric vehicles included in the study. The two authors Lisbeth Dahllöf and Mia Romare has done a meta-study that is reviewed and compiled existing studies. The report shows that the battery manufacturing leads to high emissions. For every kilowatt hour of storage capacity in the battery generated emissions of 150 to 200 kilos of carbon dioxide already in the factory. The researchers did not study individual bilmärkens batteries, how these produced or the electricity mix they use. But if we understand the great importance of play battery take an example: Two common electric cars on the market, the Nissan Leaf and the Tesla Model S, the batteries about 30 kWh and 100 kWh. Even when buying the car has thus emissions occurred, corresponding to approximately 5.3 tons and 17.5 tons, the batteries of these sizes. The numbers can be difficult to relate to. As a comparison, a trip for one person round trip from Stockholm to New York by air causes the release of more than 600 kilograms of carbon dioxide, according to the UN organization ICAO calculation. Another conclusion of the study is that about half the emissions arising from the production of raw materials and half the production of the battery factory. The mining accounts for only a small proportion of between 10-20 percent.

The BP Statistical Review of World Energy 2017 -- The BP 2017 stat review was published last week. Global Energy Graphed has hundreds of charts based on the BP data and these have now all been updated to include 2016 from the 2017 review. This is effectively an open thread where readers are invited to post their observations from the BP data. I will in turn produce a post on the main energy trends in a week or so. There are 9 summary charts below the fold.  Below I post a selection of some of the main summary graphs. Note that each year BP revise data from past reviews and our graphs use all the revised data as reported by BP 2017. The best way to navigate is via the drop down menu as illustrated above. The live charts are generated using Google Sheets. While we are eternally grateful to Google for providing this service, we are less grateful for them recently changing the formats, which means the charts are not as functional as they used to be. Hover the cursor over the chart to read the underlying data. The charts cannot be grabbed like png and jpg files, but you can make a copy using screen capture which on a Mac is cmd_shift_4. By way of a brief summary for 2016:

  • Oil (C+C+NGL) was static
  • Gas was static
  • Coal continues to decline
  • Nuclear continues to recover
  • Hydroelectric continues to rise
  • Wind, solar and other renewables are all up
  • CO2 is trending sideways

 Global banks reduce lending to dirtiest fossil fuel companies by billions in 2016 --The world’s biggest banks have reduced their lending to some of the most carbon-intensive sectors of the fossil fuel industry by billions of dollars, marking a potentially seismic shift against coal investment, a new study says. The report commissioned by environmental groups tracked the lending decisions of 37 banks across Australia, the US, Europe, Canada, China and Japan in the first calendar year since the signing of the Paris climate agreement. It shows the world’s largest banks – including Commonwealth Bank, Westpac, ANZ, and NAB – lent a collective $87bn to companies involved in the extraction, processing, and burning of “extreme fossil fuels” in 2016. The $87bn figure marks a sharp decline from bank funding for extreme fossil fuel companies in 2015 ($111bn) – representing a 22% drop – and is also lower than 2014 ($92bn). The report, entitled Banking on Climate Change: Fossil Fuel Finance Report Card 2017, defines extreme fossil fuels as: oil (tar sands, Arctic drilling, and ultra-deepwater oil), coal mining, coal-fired power, and liquefied natural gas (LNG) export terminals. However, the report warns that despite the 22% decline in funding, banks are still funding fossil fuel projects at a rate that will push the world beyond the 1.5 degrees climate change limit determined by the Paris Climate Agreement. It says they have still contributed $290bn of direct and indirect financing for extreme fossil fuel projects over the last three years, representing new investment “in the exact sub-sectors whose expansion is most at odds with reaching climate targets, respecting human rights, and preserving ecosystems.” “While this steep drop in funding is encouraging, it is vital that this be not just a temporary decline, but the start of a rapid phaseout,” the report says. 

West Virginians are realistic about coal’s demise, even if politicians aren’t  -- A West Virginia congressman on Thursday praised Environmental Protection Agency Administrator Scott Pruitt for supporting the state’s coal industry and helping to bring a sense of optimism back to the state, even as the Trump administration plans major cuts to programs that help West Virginians.U.S. Rep. Evan Jenkins (R-WV), in comments at a House Appropriations Committee hearing on President Donald Trump’s proposed fiscal year 2018 budget for the EPA, accused former President Barack Obama of putting “so many people on the unemployment line” in his state.With Trump as president, coal jobs are returning to West Virginia, Jenkins said. “We have got people going back to work to create a sense of hope and opportunity in their lives. So, I want to thank you for that,” he told Pruitt.The coal industry nationwide accounted for a total of 51,000 jobs through May, up about 400 jobs from the month before. In the Central Appalachian region, which includes West Virginia’s southern coalfields, the number of coal mining jobs grew from slightly below 15,000 to slightly above that number from January to March.West Virginian historian Chuck Keeney, who has written extensively on the state’s coal industry and its miners, said he has not seen a noticeable change in the mood of the state’s residents since Trump became president. “A lot of West Virginians understood that they were rolling the dice with Trump,” explained Keeney, a professor of history at Southern West Virginia Community and Technical College in Logan County, West Virginia.“I don’t see this sense of hope that Jenkins is talking about. I see it as hyperbole,” Keeney said. Most West Virginians realize “there is not going to be a gigantic return of coal,”  

Investors plan $80 million coal enhancement facility for the Powder River Basin - A year ago, tempting investment in Wyoming coal was little more than a dream. Now, a group of investors plans to raise $80 million to build a coal treatment facility in the Powder River Basin that they say would increase the value of local coal. The idea to treat and dry Powder River Basin coal so that it burns hotter and increases in value has been around for years, but the developers of Clean Coal Technologies claim to have perfected the method so that the coal doesn’t spontaneously combust or immediately reabsorb moisture from the air. The Wyoming facility would be the first commercial plant employing Clean Coal’s technology, which was modeled and tested at a site in Oklahoma. Details such as location and number of jobs were not available by press time Monday. Wyoming New Energy Corp. signed an agreement to raise $80 million in debt financing with investment bank Piper Jaffray to build the 2 million-ton plant.Wyoming coal is some of the cheapest in the country, one of its key selling points in the electricity market. Its downside, however, is that it burns cooler than its counterpart from places like Appalachia. The treatment would allow producers to increase the value of their coal, potentially making it enticing to foreign markets, leaders from Clean Coal Technologies have said in early interviews with the Star-Tribune. 

A First-of-Its-Kind Clean Coal Plant May Not Burn Coal At All - A first-of-its-kind “clean coal” power plant that utility owner Southern Co. spent years constructing in Mississippi may end up burning no coal at all -- and instead just run like a natural gas generator. After years of delays and billions of dollars in cost overruns, Mississippi regulators on Wednesday called on Southern to work up a deal that would have the Kemper plant fueled only by gas. The state Public Service Commission said in a statement that it’s looking for a solution that eliminates the risk to ratepayers “for unproven technology,” which involved converting coal into gas that could then be used to generate electricity -- all while capturing emissions. Settling for gas only at Southern’s Kemper plant threatens to undermine the business rationale for the kind of clean-coal technology the Trump administration has hailed as a way to save jobs at mines. It would mark the end of a very costly venture that has company investors demanding pay cuts for executives. The utility owner is also grappling with its long-delayed, over-budget Vogtle nuclear project in Georgia. “Clean coal was a very uncertain prospect after all the cost overruns, and difficulty getting the gasifiers to work just makes it worse,” Kit Konolige, a New York-based utilities analyst for Bloomberg Intelligence, said by phone Wednesday. “But gas is so cheap it would have been an uphill battle even if this plant had been finished on time and on budget.” The utility commission still needs to vote on a formal order encouraging Southern to work on a settlement. It’s scheduled to take one up at a July 6 meeting. 

How China, Not Obama, Waged The War On Coal - Global coal production is down record amounts thanks largely to China, BP’s chief economist said Thursday, and coal’s probably not coming back. Chinese coal production has declined for three consecutive years, coinciding with the slowing of industrial growth, but according to BP's Statistical Review of World Energy 2017, released this week, it has never declined more than it did in 2016. At the beginning of 2016 China enacted a series of policies designed to reduce a supply glut, includingclosing 1,000 mines and restricting mining days to improve the profitability of the ones that remained open.  “Coal production in China fell dramatically, by far the biggest fall we’ve ever seen in coal production in China. And coal prices increased very sharply as production was pulled off, increasing by more than 60 percent during the course of 2016.” Those higher prices not only crushed coal consumption in China, they affected coal consumption worldwide."The nature of the global coal markets meant that global prices then took their cue from what was happening in China," Dale said, "with coal prices around the world all following a similar trend. And that fed through to squeezing coal demand around the world, where we saw the second consecutive fall in global coal production and the largest ever fall in our records in terms of global coal production." While China's policy may be temporary, coal is unlikely to recover from it because of the long-term changes that are happening simultaneously, such as declines in the cost of natural gas and renewables and the growing preference for renewables in developing countries such as India.

China’s coal output in May grows fastest in years -- BEIJING: China's coal production rose 12 percent in May from a year ago, its fastest pace of growth in years, as miners ramped up output ahead of an expected summer pick-up in demand, official data showed on Wednesday.Output rose to 297.8 million tonnes in May, the National Bureau of Statistics data showed, also slightly above April's 295 million tonnes.For the year to date, coal production rose 4.3 percent to 1.4 billion tonnes.Anticipation of a hot summer and higher consumption has buoyed sentiment from miners who have enjoyed more relaxed regulations on production.  Thermal coal prices have risen more than 16 percent this year reaching record highs on Wednesday of high of 570.6 yuan ($83.94) per tonne. Open interest hit a record on Tuesday, showing more bullish sentiment in market. Inventory at Qinhuangdao port, China's largest coal transportation hub, fell to 5.3 million tonnes by June 12, down from 6 million tonnes month ago.  As many of China's major cities in north and southern regions brace for a warmer-than-usual June, coal consumption from largest the coal-fired power plants has picked up to provide power for air conditioners.

     South Korea's President Moon says plans to exit nuclear power | Reuters: South Korea's new President Moon Jae-in said on Monday the country will halt plans to build new nuclear power plants and will not extend the lifespan of existing plants, in a bid to phase out nuclear power. Moon campaigned on a program of cutting South Korea's traditional reliance on coal and nuclear for the bulk of its power, but has not previously commented on the commitment to end nuclear power since being elected in early May. "We will end the nuclear-oriented power generation plan and pave the way for a nuclear-free era," Moon said at an event marking the closure of the Kori No.1 nuclear reactor in Busan, some 300 kms (186 miles) southeast of Seoul. "We will withdraw existing plans to build new nuclear power plants and not extend the lifespan of nuclear power plants." South Korea's oldest nuclear reactor Kori No.1 was permanently shut down at midnight on Sunday after reaching the end of its 40-year-lifespan, the first South Korean nuclear power plants to be closed permanently. South Korea has 25 nuclear reactors, supplying about a third of the country's total electricity. During his campaign, Moon vowed to review plans to add new eight nuclear reactors, including the part-completed Shin Kori No.5 and Kori No.6. Moon said he will soon reach a consensus on the Shin Kori No.5 and Shin Kori No.6 reactors after fully considering their construction costs, safety and the potential costs of paying compensation. He also said the government will seek to shut down the country's second-oldest nuclear reactor, the Wolsong No.1, as soon as possible depending on the country's power supply conditions.

    U.S. Nuclear Plants Losing $2.9 Billion Annually -- Increased use of less-expensive natural gas and renewable sources of energy for power generation is putting financial pressure on U.S. nuclear power plants, according to an analysis of electricity costs from Bloomberg New Energy Finance (BNEF). Nicholas Steckler, an analyst for BNEF, in a June 14 report said nuclear operators are losing about $2.9 billion a year. Steckler said nuclear plants are being paid $20/MWh to $30/MWh for their electricity, while their generation costs an average of $35/MWh. The report says 34 of 61 U.S. nuclear plants are in the red. Steckler specifically cited merchant nuclear plants owned by FirstEnergy Corp., Entergy Corp., and Exelon.  FirstEnergy, which has two nuclear plants in its home state of Ohio and one in Pennsylvania, reiterated previous public statements that its “competitive subsidiaries are not profitable, which includes all of our competitive generating plants.” The company has continued to say it may leave competitive power markets by the middle of 2018. Some nuclear operators are looking for government subsidies to level the field with renewables, but the legislation faces legal hurdles. New York and Illinois have passed legislation to subsidize the industry but a group of non-nuclear operators has sued to block its implementation. A Connecticut bill that would have supported the industry also was recently blocked.

    Rapid nuclear decommissioning threatens climate targets, says IEA | Reuters: Decommissioning nuclear plants in Europe and North America from 2020 threatens global plans to cut carbon emissions unless governments build new nuclear plants or expand the use of renewables, a top International Energy Agency official said. Nuclear is now the largest low-carbon power source in Europe and the United States, about three times bigger than wind and solar combined, according to IEA data. But most reactors were built in the 1970s and early 80s, and will reach the end of their life around 2020. With the average nuclear plant running for 8,000 hours a year versus 1,500-2,000 hours for a solar plant, governments must expand renewable investments to replace old nuclear plants if they are to meet decarbonisation targets, IEA Chief Economist Laszlo Varro told Reuters. "The ageing of the nuclear fleet is a considerable challenge for energy security and decarbonisation objectives," he said on the sidelines of the Eurelectric utilities conference in Portugal. Renewables have grown rapidly in the past decade but about 20 percent of new low-carbon capacity has been lost from the decommissioning of nuclear plants in the same period, he said. "This is just a taste of thing to come," Varro said. Russia and India were building new plants, while China was bringing a new plant online every quarter, Varro said.

    The Company Behind the Dakota Pipeline Is Spilling Toxic Fluid in Ohio -- Energy Transfer Partners LP is making a mess of its biggest project since the Dakota Access pipeline.Construction of the $4.2 billion Rover natural gas line has caused seven industrial spills, polluted fragile Ohio wetlands and angered local farmers. The company owes $1.5 million in restitution after demolishing an historic house. The Ohio Environmental Protection Agency is furious and a federal energy regulator has launched a rare public investigation that threatens to delay the pipeline’s scheduled Nov. 1 completion. “We’ve not seen a project in Ohio with spills at this size and scale, and if we can’t even trust Rover to construct this pipeline, how can we trust them to operate it when it’s complete?” said Heather Taylor-Miesle, executive director of the Ohio Environmental Council.Energy Transfer, the Dallas-based company led by billionaire Kelcy Warren, promised part of the 713-mile (1,147-kilometer) pipeline would open in July, but work is stalled on key segments until the company’s responsibility for the spills can be assessed by the Federal Energy Regulatory Commission, or FERC. “We are working with FERC and the OEPA to resolve these issues in a manner that is satisfactory to everyone involved, and most importantly ensures the complete remediation of these areas,” said Energy Transfer spokeswoman Alexis Daniel. Recent developments have not affected the project’s timeline, Daniel said. Any delay would pinch natural gas producers that contracted to ship on the line, which will bring resources from the Marcellus shale to the Midwest. Seven companies havebooked 2.9 billion cubic feet a day, enough to power 51,000 homes for an entire winter, once Rover is completed. The company stands to lose more than $10 million a week if it misses the deadline, according to Bloomberg Intelligence analyst Michael Kay. Gas traders, too, are on alert for work interruptions. When FERC ordered Energy Transfer to halt new construction after the Ohio spills, natural gas futures hit a 14-week high.

    Analyst: “Nearly Impossible” for Rover to Get Done on Schedule -- Rover Pipeline, Energy Transfer’s $3.7 billion, 711-mile Marcellus/Utica natural gas pipeline that will run from PA, WV and eastern OH through OH into Michigan and eventually into Canada, will almost certainly not go online in July as originally planned–at least according to an article on The Street evaluating the project and its builder, Energy Transfer. At the heart of the delay is a series of spills that have occurred while drilling underground, horizontally, under rivers and creeks (and other structures) in which drilling mud has spilled. The largest such spill, to date, happened on April 13 when around 2 million gallons of drilling mud spilled close to the Tuscarawas River (see Rover Pipeline Accident Spills ~2M Gal. Drilling Mud in OH Swamp). That spill, plus the others, set off a chain reaction and ongoing fight with the Ohio Environmental Protection Agency (OEPA), who lobbied the Federal Energy Regulatory Commission (FERC) to investigate. Which is now happening (see OH EPA Says Diesel Fuel Found in Rover 2M Gal Drilling Mud Spill). The FERC investigation has stalled forward progress in some (not all) areas. According to an analyst from Genscape quoted in the article, Energy Transfer “seems to have an approach where they stick to the minimum requirements instead of exceeding them” when it comes to drilling and laying pipelines. Energy Transfer strongly disagrees that statement. Regardless, the company’s stock has taken a hit and the article (below) raises concerns about the future of the company’s stock for shareholders…

    Drilling Costs Rise in Marcellus/Utica; Workforce Becomes Issue -- The petrochemical conference in Pittsburgh earlier this week wasn’t the only event in town. The DUG (Developing Unconventional Gas) East conference and exposition took place at the David L. Lawrence Convention Center, several blocks from the petchem event. The reporting from one session in particular caught our attention. A panel of drillers and service companies (upstream focus) talked about the prices that service companies (that is, oilfield service companies, like Halliburton and Baker Hughes) charge has gone up 10-15% over rates from last year, when service companies had to slash prices. While that’s good for service companies, but not so good for drillers and may, yet again, lead to a decline in active rig counts. The panel also discussed the increasingly critical shortage of workers in the Marcellus/Utica industry…

    EQT to pay $6.7 billion for Rice, creating biggest U.S. natgas producer - U.S. oil and gas company EQT Corp said on Monday it would buy Rice Energy for $6.7 billion, a deal that would create the biggest natural gas producer in the United States. This would be the biggest deal ever for EQT as it looks to expand its natural gas business. Rice Energy's shares surged almost 27 percent to $24.95 in afternoon trading, but below the $27.05 per share offered by EQT. EQT's shares were down 7.6 percent. The deal would put the combined EQT-Rice ahead of Exxon Mobil Corp as the nation's biggest gas producer. U.S. energy firms are pumping money into gas-rich states like Pennsylvania, West Virginia and Ohio. The United States should soon become the world's top natural gas exporter. "EQT appears to be empire building," analysts at Mizuho said in a report, noting they expect EQT to begin monetizing Rice's midstream assets by dropping them down to EQT Midstream Partners (EQM.N), which could raise $1.3 billion. EQT said it would be able to drill longer horizontal wells in Pennsylvania after the deal as most of the acquired acreage is next to where EQT already drills or owns land. "EQT is a decade behind in fracking technology used by industry leaders in Marcellus/Utica," said Dallas Salazar, CEO of energy consulting firm Atlas Consulting. "EQT needs a lot, and Rice offers a lot of what it needs." EQT has been buying acreage in the Marcellus shale field, with some of the cheapest gas in the country. Most recently it picked up 53,400 acres in the field from Stone Energy Corp. EQT said the acquisition would increase its 2017 average sales volume by 1.3 billion cubic feet equivalent per day (bcfe/d) and core acres in the Marcellus field by 187,000 to 670,000. The deal would also give the company access to Rice Energy's midstream assets, including a 92 percent interest in Rice Midstream GP Holdings. EQT will take on about $1.5 billion in debt. 

    EQT to create biggest U.S. natgas producer with $6.7 bln Rice deal -  - EQT Corp was set to leapfrog Exxon Mobil as the largest U.S. natural gas producer after saying on Monday it agreed to a deal to buy fellow Appalachian gas and oil firm Rice Energy for $6.7 billion. The tie-up would join two of the largest players in the Marcellus and Utica Shale formations, which stretch across much of Pennsylvania and Ohio and are ideally situated to supply gas throughout the U.S. Northeast. Rice Energy also provides technological expertise to EQT, which has operated in the Marcellus since 2009. "EQT is a decade behind in fracking technology used by industry leaders in the Marcellus/Utica," said Dallas Salazar, CEO of energy consulting firm Atlas Consulting. "EQT needs a lot, and Rice offers a lot of what it needs." Technology improvements allow companies to drill sideways over a longer distance, making adjacent land with gas deposits more attractive. On average, the acquisition will increase EQT's sideways drilling capacity by 50 percent in two Pennsylvania counties. Controlling production costs is important when U.S. natural gas prices remain low due to abundant supply. The Henry Hub U.S. benchmark's average price of $3.02 per million British thermal units so far in 2017 is well below the 10-year average of $4.42. EQT has identified $2.5 billion of cost savings from the proposed merger, as well as benefits from moving some of Rice's midstream assets into its pipeline business, EQT Midstream Partners . Analysts at Mizuho have estimated those assets to be worth $1.3 billion.The proposed transaction, scheduled to close in the fourth quarter, would be the biggest ever for EQT, increasing its 2017 average sales volume by 1.3 billion cubic feet equivalent per day (bcfe/d) and core acres in the Marcellus field by 187,000 to 670,000.  In a later filing, EQT said Citigroup, its financial adviser, had commited to back the deal with bridge loans worth $1.4 billion. Should the deal collapse, Rice would pay a termination fee of up to $255 million. 

     EQT sees $6.7 billion Rice deal boosting production, efficiencies: EQT CEO - EQT's announced $6.7 billion deal for Rice Energy allows the combined US Appalachian Basin shale gas companies to grow production and meet increasing demand, but at a lower cost, EQT CEO Steve Schlotterbeck said Monday. "We can achieve the same growth rate with roughly 7% less capital with the combination than we could as separate companies," Schlotterbeck said in a conference call with analysts after the stock-and-cash deal was disclosed. The deal between EQT and Rice will create the US' largest natural gas producer, they said, and comes as significant new takeaway capacity is being added to move Marcellus and Utica shale production to markets where the power plant and home heating fuel is in increasing demand. It also gives EQT the ability to increase returns through longer laterals on the two companies' contiguous acreage while maintaining moderate overall production growth, the company said. No change to either company's development plans is expected for the balance of 2017; more specifics on 2018 production plans will be released in December, Schlotterbeck said. Even then, production growth is only expected to be moderate, he said. "It is my belief we are in the second phase of the shale gas revolution, and the high growth models of the first phase I don't think are going to work in phase 2," Schlotterbeck said. Schlotterbeck noted that the real value from the deal is in boosting returns by taking advantage of operational efficiencies from the overlap of the two companies' footprints. Assuming a $3/MMBtu NYMEX price and a $2.50/MMBtu local price, returns per well would jump to 70% from 52% in Pennsylvania alone, he said.

    Many U.S. underground natural gas storage wells at risk for leaks -- More than one in five of the 15,000 active underground natural gas storage wells in the U.S. appear to be at risk for serious leaks due to obsolete well designs, according to a study by Harvard T.H. Chan School of Public Health researchers. The wells are similar in design to that of the Aliso Canyon gas storage facility in California that leaked for about four months in 2015-16 and is considered the largest single accidental release of greenhouse gases in U.S. history.The study was published May 24, 2017 in Environmental Research Letters.  The study, led by Drew Michanowicz, postdoctoral research fellow in the Department of Environmental Health, and senior author Aaron Bernstein, associate director of the Center for Health and Global Environment at Harvard Chan School, identified more than 2,700 largely unregulated underground storage wells across 19 states with the same design as Aliso Canyon and that were not originally designed for gas storage. These repurposed production wells have a median age of 74 years, and some were constructed more than 100 years ago.“Underground storage of natural gas is a critical part of the U.S. supply chain, and many portions of the country rely on this infrastructure for heating and increasingly for e lectricity generation. As Aliso Canyon and other incidents have demonstrated, the vulnerability of a single well presents a major risk to energy security, greenhouse gas emissions, and to the safety and health of people who live near it,” Michanowicz said in a press release.

    Fracking seems to poison groundwater within one kilometer - For almost a decade, residents of some Pennsylvania counties have complained that the natural gas prospectors nearby have contaminated their water. Locals say that after the fracking for gas began, the water made them sick, that it turned brown, even that it became flammable. The industry fought back. Nevertheless, in 2016 the Agency for Toxic Substances and Disease Registry, part of the U.S. Department of Health and Human Services, found related heavy metals and chemicals in quantities high enough to pose health risks. And in December 2016, the Environmental Protection Agency concluded that there is indeed a connection between prospecting for shale gas and contaminated groundwater. But there has been little research on the distance gas drillers should keep from sources of drinking water.  A new paper addresses this research gap. It is also relevant to people living in urban areas, as gas drillers perfect horizontal drilling techniques — boring down and over to reach deposits — allowing them to operate in more densely populated areas. They ended up looking at 54,809 water samples taken over five years, all within 10 kilometers of one well pad. Controlling for temperature and rainfall around the locations where water is sampled, water-intake locations (where water enters the drinking supply), for time of day when the sample was collected, and for the laboratory where the sample was analyzed, Hill and Ma look for traces of chemicals linked to the fracking process. Key takeaways:

    • Adding a well pad within 0.5 kilometers of a water-intake location is associated with a 2.7 percent increase in fracking-related contaminants.
    • Contaminants fall as the distance increases. A well pad within 1 kilometer is associated with a 1.5 percent increase in contaminants.
    • Beyond 1 kilometer, the results are no longer statistically significant.
    • A well placed uphill from a water source poses a slightly greater threat, providing “evidence that, unsurprisingly, it is the uphill threats that are disproportionately affecting drinking water quality.”
    • An important caveat the authors note is that only 14 percent of Pennsylvania residents are served by groundwater systems, but the potential health effects for this population is “large.” (See this 2013 paper, for example.)

     Syfy's 'Blood Drive' Blames Fracking for Its Dystopian America -- Syfy’s new show, Blood Drive, centers itself on a dystopian world destroyed by climate change. As a result, anyone who wants a decent life must partake in a gruesome race using cars powered by human blood. Syfy's description of the show is: “The Future: where water is a scarce as oil, and climate change keeps the temperature at a cool 115 in the shade. It’s a place where crime is so rampant that only the worst violence is punished.”  Wednesday night’s episode, “Welcome to Pixie Swallow,” revealed that fracking is what led to the violent, depraved world that exists in the show. A cyborg that works for the evil corporation that controls every business shows an abducted police officer a video detailing the past horrors that resulted from fracking and how Heart Corporation was able to take over amidst the chaos.

    'Rent-a-spy' firm TigerSwan used Standing Rock intel to infiltrate other activist groups - TigerSwan — a private surveillance and intelligence gathering firm with roots in the military conflicts in the Middle East — continued to track and spy on activists from the Standing Rock Anti-Dakota Access Pipeline (DAPL) protests well after they returned home and went about their normal lives. The Intercept reported Wednesday that a number of leaked documents from TigerSwan show that the company compared the protesters who gathered at Standing Rock Reservation to the “jihadist post-insurgency” movement that formed after the Soviet occupation of Afghanistan and gave rise to the Taliban and Osama bin Laden. Surveillance targets included the Answer Coalition in Chicago, anti-Trump protest movements and climate change activists. TigerSwan expanded its spying net to include locations in Arkansas, Florida, Iowa and New York. “They’re trying to make connections where they aren’t. It’s almost like they’re trying to cast conspiracy theories across the entire progressive movement because they’re sympathetic to the NoDAPL movement,” said Answer’s John Beacham to the Intercept. A leaked document calls the dispersing Standing Rock protesters an “anti-DAPL diaspora” and makes the case for tracking individual activists, embedding spies within protest groups and developing sources within progressive groups to enable monitoring and reporting of their plans and movements.A document from February details TigerSwan’s plan to infiltrate the community organizing group Lifted Voices: “This would be a good opportunity for us to get someone inside, become known and gather the most current direct action [tactics, techniques, and procedures]. While Lifted Voices is not a #NoDAPL organization, Kelly Hayes has influenced organizing protest events and has spoken at the last two events in Chicago.” The documents also detail the vast array of spying techniques aimed at protesters during the Standing Rock protests including radio spying, infrared heat tracking, drone flyovers, distance microphones and other military spying techniques. 

    Dakota Access-Style Policing Moves to Pennsylvania's Mariner East 2 Pipeline - The Intercept - After months of employing military-style counterinsurgency tactics to subvert opposition to the Dakota Access Pipeline in North Dakota, Iowa, Illinois, and South Dakota, the private security firm TigerSwan is monitoring resistance to another project — the controversial Mariner East 2 pipeline.Like DAPL, Mariner East 2 is owned by Energy Transfer Partners. The pipeline is slated to run for 350 miles, transporting ethane, butane, and propane through Ohio, Pennsylvania, and West Virginia to a hub near Philadelphia for shipment to both domestic and international markets. Internal TigerSwan documents reviewed by The Intercept suggest the company has had a presence in Pennsylvania since at least April. On April 1, the Mariner East 1 pipeline, which runs parallel to the proposed path of ME2, spilled 20 barrels of ethane and propane near Morgantown, Pennsylvania. On the day of the incident, an email provided to The Intercept by a TigerSwan contractor shows the firm was watching social media for signs the spill would become a rallying point for pipeline opponents. “At this time the incident has NOT gained any public interest,” a TigerSwan operative wrote in the email. TigerSwan founder James Reese replied, “We nees [sic] to monitor social media for blow baxk [sic] on the leak.” The company had been monitoring Dakota Access opponents’ social media for months and analyzing press coverage related to that pipeline fight, according to more than 100 internal situation reports leaked to The Intercept. The documents routinely referenced counterinformation efforts to produce and distribute propaganda favorable to the pipeline. TigerSwan apparently carried at least some of these practices to Pennsylvania. It would be weeks before the public learned of the leak of highly explosive natural gas liquids. According to a source with direct knowledge of TigerSwan’s operation, making sure nobody found out about the incident was part of TigerSwan’s mission on the project. Nearby residents were kept in the dark until April 20, when Sunoco, which recently completed a merger with Energy Transfer Partners, confirmed to a local media outlet that the leak had occurred.

      FERC Releases 'Utterly Insufficient Review' for Mountain Valley Pipeline - The Federal Energy Regulatory Commission (FERC) released its Final Environmental Impact Statement Friday for the Mountain Valley Pipeline, a controversial 303-mile pipeline that would carry two billion cubic feet of fracked gas per day from West Virginia through Virginia.As has been the pattern at FERC, the review fails to adequately assess whether the pipeline is needed in the first place, while sweeping aside the project's serious threats to water resources, the safety of communities and the climate .Oil Change International research analyst Kelly Trout had the following response to FERC's deeply flawed climate assessment:In this utterly insufficient review, FERC ignores both science and economics to sweep aside the Mountain Valley Pipeline's significant climate impact. FERC severely undercounts climate pollution by ignoring methaneleakage across the gas supply chain, which makes gas as dirty or dirtier than coal , and by omitting emissions from upstream fracking . FERC also wrongly assumes that gas supplied by the project is likely to replace coal, when it's just as likely to lock out the clean energy and efficiency alternatives we urgently need.If FERC was doing its job, it would find the Mountain Valley Pipeline will cause an unacceptable increase in climate pollution and reject this dirty project. A proper analysis shows that this pipeline will cause as much climate pollution as 26 coal plants per year. This project is the last thing we need in the face of worsening heatwaves and flooding , and when clean alternatives are readily available now.Concerned residents continue to fight this dirty pipeline because it's a clear threat to local livelihoods, clean water and our climate. It's time for FERC to completely overhaul its pipeline review process to prioritize the safety of communities and our climate, not the profits of corporate polluters.

    PADD 1 refiners fight to keep Laurel Pipeline flowing west. - Refiners in the Midwest and in the Mid-Atlantic states have each experienced good times and bad, both before the Shale Era and more recently. Lately, though, fortune has been smiling on the owners of midwestern refineries, a number of which have been expanded and reconfigured to run cheaper heavy crude from western Canada — changes that have put them at a competitive advantage to East Coast refineries running more expensive light crudes. Now, a proposed refined products pipeline reversal in Pennsylvania would allow more motor fuels to flow east from Petroleum Administration for Defense District (PADD) 2 into markets traditionally dominated by PADD 1 refineries. Today we look at recent developments in Midwest and Mid-Atlantic refining, and at the consequential battle for turf that’s just starting to flare. Over the years we have blogged extensively about the ups and downs experienced by refiners in PADD 1 (the East Coast) and PADD 2 (the Midwest). In Back to Red, which focused on East Coast refineries, we recounted that they can supply only a small portion of PADD 1’s total demand, and that for years they relied almost exclusively on waterborne imported crude for feedstock and therefore had little or no competitive advantage over their European refined-product rivals. Then, when the Great Recession of 2008 whacked East Coast demand for motor fuels, PADD 1 refining margins suffered and a number of refineries there were shut down. Then there was shale, and at first it was a godsend — midstream companies and some PADD 1 refineries developed supply networks to move then relatively cheap Bakken crude by rail to the East Coast, giving them a feedstock-price edge over their international competitors. But by 2015-16, several factors (among them, the build-out of pipeline infrastructure to relieve Midwest congestion, the oil price crash and the end of the ban on most U.S. oil exports) combined to make most crude-by-rail deliveries uneconomic and put PADD 1 refineries back where they were pre-shale — or worse.

      Demand To Ship Gasoline On Top US Pipeline At 6-Year Low (Reuters) - The operator of the biggest U.S. fuel pipeline system said on Thursday demand to transport gasoline to the country's populous northeast is the weakest in six years, the latest symptom of a global oil market grappling with oversupply. Summer is typically when gasoline demand peaks in the world's biggest oil consuming country as motorists hit the road for vacation, and keeping their gas tanks full strains the capacity of U.S. refiners and pipelines. This year, so much fuel is stored in tanks in the Northeast that Colonial Pipeline Co said in a notice to customers that demand from refiners and fuel traders to bring gasoline through its pipeline to the region from refining hubs in the South was the worst in six years. For the first time since 2011, demand for the pipeline was below capacity for a five-day period starting early next week, Colonial said on Thursday. The news pushed down gasoline prices in the Gulf region, where the pipeline begins. Benchmark U.S. gasoline prices led the energy complex higher and were up about 2.1 percent shortly after midday, partly boosted by expectations that fewer barrels flowing into the East Coast would alleviate a glut. Typically, demand exceeds the pipeline's space, forcing refiners and traders to supplement delivery with tanker shipments or imports. "The only reason they wouldn't be full is clearly that inventory levels are high enough that there is no incentive to move product to New York," 

     Michigan scraps Straits of Mackinac oil pipeline safety study after conflict discovered - The State of Michigan today scrapped an almost-complete risk analysis on the Line 5 oil pipeline below the Straits of Mackinac after discovering an analyst who worked on the study later did work for the pipeline's owner. Det Norske Veritas, or DNV GL, was preparing the safety analysis of Enbridge's 64-year-old, twin, 20-inch pipes under the Straits where Lakes Michigan and Huron meet. The report was to look at financial liabilities from a worst-case-scenario spill in the Straits from the pipelines, which move 23 million gallons of crude oil and natural gas liquids through the Upper and Lower Peninsulas daily. State officials learned within the past month that an employee for DNV who had a "significant" role in the Line 5 risk analysis subsequently worked on another project for Enbridge. That violates conflict-of-interest prohibitions in the company's contract with the state. “The evaluations of Line 5 were supposed to be independent, not tainted by outside opinions or information, but that’s not what happened," Michigan Attorney General Bill Schuette said in a statement. "Instead, our trust was violated, and we now find ourselves without a key piece needed to fully evaluate the financial risks associated with the pipeline that runs through our Great Lakes. This is unacceptable." 

    Zinke Targets New England Coral Canyons as Next National Monument to Open Up for Drilling -- Interior Sec. Ryan Zinke , who recently recommended a reduction in the size of the 1.35 million acre Bears Ears National Monument to President Trump , is advocating for more drilling and mining on public lands and waters. Zinke signaled to Reuters that he is likely to make a similar recommendation for the Northeast Canyons and Seamounts Marine National Monument —the first marine national monument in the Atlantic Ocean. . "Energy dominance gives us the ability to supply our allies with energy, as well as to leverage our aggressors, or in some cases our enemies, like Iran."  The monument, which consists of 4,913 square miles of underwater canyons and mountains off the New England coast, was designated by President Obama last September to protect critical ecological resources and marine species, including deep-sea corals, whales, sea turtles and deep-sea fish.  After touring the Canyons monument at the New England Aquarium, Zinke told Reuters he believed "there are legitimate scientific endeavors and research that are recognized and important (around the site), but there are also recognized livelihoods, fishing jobs that are also important." Zinke added he wants to redirect revenue from offshore to fund repairs around America's national parks.

    The hunt for offshore oil is killing tiny sea creatures that are key for healthy oceans --A widely used method to find oil and gas for offshore drilling can kill tiny sea creatures that are key for feeding many marine animals like shellfish, fish, and even whales. And the impacts on these tiny, drifting creatures — called zooplankton — are seen in an area much larger than previously thought. The study, published in the journal Nature Ecology and Evolution, adds to the body of evidence that the loud noises produced during oil and gas exploration can disrupt marine life — including whales that use sound to communicate and look for food. It also comes just a few months after President Donald Trump has signed an executive order looking to expand offshore gas and oil drilling in the Atlantic and Arctic oceans.  Oil and gas companies looking for offshore natural resources use seismic airguns to blast compressed air through the water and into the seafloor. The noise produced by these airguns is louder than a Saturn V rocket during launch, according to Nature. So researchers wanted to see what the effects are on the sea’s base of the food chain, the zooplankton. The researchers blasted airguns in the ocean off southern Tasmania, and checked zooplankton populations before and after by using sonar and nets. The abundance of these tiny creatures dropped by 64 percent within one hour of the blast, the study says. Two to three times as many zooplankton were also found dead — and the impacts were recorded as far away as 0.7 miles. Scientists previously estimated that impacts would occur only within 33 feet from the blast. It’s not 100 percent clear how the airguns are causing the die-offs, but it’s possible the blast throws off the receptors the animals use to navigate, disorienting them and causing them to die, according to Nature. Because zooplankton is key for feeding larger marine animals, the die-offs could have serious cascading effects.

    US offshore gas production falls at Tropical Storm Cindy nears landfall - Offshore US natural gas production contracted for a second consecutive day Wednesday, though no impact on Gulf Coast hub prices was apparent as Tropical Storm Cindy edged closer to landfall near the Texas-Louisiana border. Production receipts from Louisiana, Mississippi and Alabama were estimated Wednesday at 2.23 Bcf after falling Tuesday to 2.49 Bcf. From the start of this week, storm-related declines have cut offshore output by about 640 MMcf/d or just over 22% compared to the prior five-day average at 2.87 Bcf/d, data compiled by Platts Analytics show. Prices at ANR Louisiana and Trunkline ELA -- two hubs that reflect offshore supply and Southeast regional demand -- edged up just 2 cents/MMBtu Wednesday, trading at $2.79/MMBtu and $2.80/MMBtu, respectively, according to data from the Intercontinental Exchange. At 1 pm CDT (1800 GMT) Cindy was located about 160 miles southeast of Galveston Island, Texas. The storm is expected hit to southeastern Louisiana, southern Mississippi and southern Alabama hardest, making landfall late Wednesday and into Thursday morning. The storm is will bring projected maximum sustained wind speeds of 50mph and rainfall totals of up to 12 inches, according to the National Hurricane Center.

    Storm Cindy Bears Down on Gulf Coast After Curbing Oil, Gas - Tropical Storm Cindy, which has already curbed energy production in the Gulf of Mexico, disrupted shipping and forced workers off oil and gas platforms, is now dumping rain on the Gulf Coast. With top winds of 50 miles (80 kilometers) an hour, the system is moving northwest toward the coast and was about 105 miles south of Lake Charles, Louisiana, the U.S. National Hurricane Center said in a 11 p.m. New York time advisory. While Cindy wasn’t forecast to move across southeastern Texas or southwestern Louisiana until early Thursday, heavy rainfall was already affecting the northern Gulf Coast. The storm has shut one-sixth of the oil production in the Gulf of Mexico, halted vessel unloadings at a major oil-import terminal and triggered a force majeure on a system that collects natural gas from offshore platforms. Once Cindy makes landfall, it could threaten to disrupt even more energy operations in a region that accounts for about half of the nation’s oil-refining capacity. “The biggest impact would be on shipping activity which will remain suspended through Friday,” said Andy Lipow, president of Lipow Oil Associates in Houston. “Storm sets off high winds and waves that will impact ability of ships to go through open water.”

    Analysis: Haynesville slowdown highlights bearish natural gas outlook - Often considered a bellwether for natural gas producer confidence, drilling activity in the Haynesville Shale last week witnessed the biggest slowdown in nearly 11 months as weakening prices over the last four weeks have continued to weigh on internal rates of return.   On Friday, the rig count in the Louisiana-Texas-Arkansas play fell by two, the largest decline since late-July 2016, data compiled by Baker Hughes show. At 39 though, the rig count in the Haynesville still remains at its highest since February 2015. The recent slowdown in drilling comes as the futures market at the Henry Hub, often used by producers to hedge future production, continues to weaken.The 12-month forward curve, assessed Thursday at $3.11/MMBtu, has fallen by 25 cents, or more than 7%, in the last month.With an estimated breakeven Henry Hub gas price of $3.14/MMBtu according to Platts' Well Economics Analyzer, current market conditions are leaving producers in the Haynesville unenthusiastic about new drilling initiatives. Recent drilling trends in other dry gas plays have been characterized by a similar kind of inertia. Over the last two weeks, rig counts in the Marcellus, Utica, Barnett and the Fayetteville have been unchanged. With benchmark forward prices beyond first-quarter 2018 already below the $3/MMBtu level, dry plays outside of the Northeast may soon become unprofitable.

    U.S. refineries are running at record-high levels – EIA - Gross inputs to U.S. petroleum refineries, also referred to as refinery runs, averaged a record high 17.7 million barrels per day (b/d) for the week ending May 26, before dropping slightly to 17.5 million b/d for the week ending June 2 and 17.6 million b/d for the week ending June 9. Product supplied to the U.S. market as well as inventories and exports are also at relatively high levels.Weekly U.S. refinery runs have exceeded 17 million b/d only 24 times since EIA began publishing the data series in 1990, and all of those instances have occurred since July 2015. Despite record-high inputs, refinery utilization did not reach a new record, because refinery capacity has increased in recent years. Refinery utilization reached 95% for the week ending May 26, slightly lower than the levels reached in mid-July through mid-August 2015.U.S. refinery capacity has increased by 659,000 barrels per calendar day (b/cd) since mid-August 2015. Refinery capacity—measured in barrels per calendar day (b/cd)—represents the amount of input that a crude oil distillation unit can process in a 24-hour period under usual operating conditions (averaged over the entire year), accounting for both planned and unplanned maintenance. U.S. refineries have three primary outlets for their products: they can be placed in inventory, provided to end-users to satisfy domestic demand, or exported. Recently, petroleum product inventories, product supplied, and exports have all been higher than previous five-year averages. Total product inventories for the first week of June 2017 were nearly 83 million barrels higher than the five-year average, although they are almost 3 million barrels lower than at the same time last year.   Similarly, product supplied, a proxy for demand, was greater than the five-year average by nearly 600,000 b/d during the first week of June 2017 but 400,000 b/d lower than at the same time last year. Petroleum product exports were also higher than previous levels. EIA has been publishing weekly petroleum product exports based on near-real-time export data provided by U.S. Customs and Border Protection since August 31, 2016. Previously, weekly export estimates were developed from monthly official export data published by the U.S. Census Bureau, roughly six weeks following the end of each reporting month. Petroleum product exports for the first week of June 2017 were 831,000 b/d greater than the June 2016 average.

    Why the Wall Street Journal Is Wrong About the US Oil Export Boom – Art Berman - The lead editorial in Friday’s Wall Street Journal was pure energy nonsense.’ “Lessons of the Energy Export Boom” proclaimed that the United States is becoming the oil and gas superpower of the world. This despite the uncomfortable fact that it is also the world’s biggest importer of crude oil.The Journal uses statistical sleight-of-hand to argue that the U.S. only imports 25% of its oil but the average is 47% for 2017. Saudi Arabia and Russia–the real oil superpowers–import no oil.The piece includes the standard claptrap about how the fracking revolution has pushed break-even prices to absurdly low levels. But another article in the same newspaper on the same day described how producers are losing $0.33 on every dollar in the red hot Permian basin shale plays. Oops. The main point of the editorial, however, is to celebrate a surge in U.S. oil exports to almost 1 million barrels per day in recent weeks. The Journal calls lifting the crude oil export ban that made this possible “a policy triumph.” What the editorial fails to mention is that exports actually fell after the ban was lifted, and only increased because of Nigerian production outages (Figure 1).Tight oil is ultra-light and can only be used in special refineries, most of which are in the U.S. It must be deeply discounted in order to be processed overseas in the relatively few niche refineries designed for light oil. That’s why Brent price is higher than WTI. It must also displace other light oil such as Nigerian Bonny Light. Civil unrest in the Niger Delta region interrupted oil output and provided a temporary opening for U.S. ultra-light to fill. Nigerian production is now increasing so look for U.S. crude exports to decline. Friday’s editorial goes on to also rejoice in the rising tide of potential U.S. natural gas exports. This is taken by the editors as further evidence that free markets do the right thing. Perhaps they haven’t noticed that international LNG prices crashed along with oil prices, and that U.S. gas prices have almost doubled in the last year. Asian gas demand is saturated and the price for LNG in Europe is only $4.80/mmBtu. The Journal extols Energy Secretary Rick Perry’s approval of more U.S. LNG projects in April but a Wood Mackenzie analysis concluded that “the numbers proposed far exceed what the world realistically needs.” The newspaper has fallen into the trap of mistaking production volumes for profit.  The Wall Street Journal believes that the expansion of U.S. oil and gas exports demonstrates the wisdom of free markets. I think it shows just the opposite.

    Study: Oil, gas drilling connected to pollution, earthquakes - Brownsville Herald (AP) — A new study by a nonprofit science organization says oil and gas drilling in Texas is linked to pollution and earthquakes. The Academy of Medicine, Engineering and Science of Texas study found drilling for oil and gas in shale rock pollutes the air, erodes soil and contaminates water, while the disposal of millions of gallons of wastewater causes earthquakes, the Houston Chronicle ( ) reported. The study also found that the shale oil boom has degraded natural resources, overwhelmed small communities and increased the frequency and severity of traffic collisions as workers rush to oil fields with their equipment. The group began its analysis of the environmental and social impacts of drilling and hydraulic fracturing two years ago. It created a task force of attorneys, geologists, seismologists and engineers, including representatives from oil companies and an environmental group. The group reviewed and analyzed hundreds of academic studies, many about Texas oil and gas operations. The study found fracking is spreading rapidly across Texas. The technique is used by the energy industry to extract oil and gas from rock by injecting high-pressure mixtures of water, sand or gravel and chemicals. The report calls for the state to improve monitoring and collecting data about the environmental impacts of shale drilling and fracking.

    Fracking Study Links Pollution, Earthquakes to Drilling in Texas Shale - A new analysis of Texas' oil and gas development underscores how there really are two sides to the energy debate. We know that drilling has brought the state billions in wealth, but its vast impacts on the environment cannot be ignored. The Academy of Medicine, Engineering and Science of Texas ( TAMEST )—the state's top scientific community—has released a comprehensive, peer-reviewed report today analyzing the wide-ranging environmental, economic and social impacts of shale oil and gas production in the Lone Star State. "This study aims to help us better understand what is and is not known about the impacts of shale oil and gas development in Texas and it offers recommendations for future research priorities," the report states. The 204-page Shale Task Force report was compiled by representatives from academia, environmental organizations, the oil and gas industry, and state agencies with a focus on six key areas: seismicity , land , air , water , transportation and economic and social impacts . Citing the report, the Houston Chronicle noted that the shale boom has contributed to the state's economic gains but has also "degraded natural resources, overwhelmed small communities and even boosted the frequency and severity of traffic collisions as workers and equipment rush to oil fields." The report also reveals that people living in shale communities feel conflicted over the oil and gas industry. They like its benefits to local, regional and state economies but dislike the impacts on traffic, public safety, environmental concerns and noise. For instance, the report calculated that rural crashes involving commercial vehicles have increased more than 75 percent in some drilling regions in Texas. Also, road damage from oil and gas operations in Texas costs an estimated $1.5 to $2 billion a year Although Texas has not experienced as many human-induced-earthquakes as Oklahoma , according to the report, Texas recorded only two earthquakes a year before 2008. Since then, there have been 12-15 a year. Some of the earthquakes have been linked to wastewater disposal from oil and gas operations.  As for water usage, the report's authors found that while hydraulic fracturing, or fracking , uses 1-5 million gallons of water per well on average, accounting for less than 1 percent of total statewide water use, it could still account for 90 percent of total water use in some rural counties.

    Fracking impact? Here's what we need to know, says elite Texas shale task force --A task force set up by the Academy of Medicine, Engineering and Science of Texas released a 204-page report Monday that found both great economic benefits and areas of concern about the latest drilling boom. Despite the uncertainty, study organizers said they hoped the two-year effort would cut through some of the confusion around fracking and how it impacts Texans and the environment.  The report was written by experts in oil and gas, engineering, transportation, medicine, economics and the law. The task force included oil executives, academics, an oil and gas regulator and a representative from an environmental group.Fears about the consequences of drilling, particularly air and water quality, have escalated since Barnett Shale natural gas drillers near Fort Worth started the fracking revolution in the early 2000s.  Texas now leads the nation in oil production and is one of the world's largest producers. The exploration of shale fields — thanks to fracking, other technology and the increasingly important Permian Basin — has contributed to a 50 percent decrease in gasoline prices, provided local governments with billions of dollars and is responsible for nearly 3.8 million Texas jobs, according to the report, titled "Environmental and Community Impacts of Shale Development in Texas." At the same time, drilling and related activities have led to earthquakes, contributed to the increase and severity of traffic accidents near drilling areas and left questions about the long-term health effects of emissions. An industry group pointed to the lack of evidence of groundwater contamination as good news."If fracking were a credible risk to groundwater, we would know about it in Texas, which produces more oil and natural gas than any other state," said Steve Everley, a spokesman for Texans for Natural Gas, in a written statement. "The fact that such an incident hasn't been observed here is further confirmation that fracking is safe and well-regulated." The study also highlighted that power plant emissions statewide have decreased as natural gas replaces more and more coal as the fuel of choice to produce electricity. The report proposes 25 recommendations that include investigating whether Texas needs a law to protect surface owners who don't own mineral rights and more research to better understand the benefits and risk of using brackish or salty water for fracking. Air emissions was also a worrisome area since there was limited information about their health effects, according to one of the authors.

    Elite shale task force says fracking adds $2 billion to Texas road repair costs - A task force set up by the Academy of Medicine, Engineering and Science of Texas released a 204-page report Monday that found both great economic benefits and areas of concern about the latest drilling boom. Despite the uncertainty, study organizers said they hoped the two-year effort would cut through some of the confusion around fracking and how it impacts Texans and the environment."In an era of alternative facts, this report is bringing together much or most of the scientific evidence about the actual impacts of shale development," said task force chairwoman Christine Ehlig-Economides, who teaches petroleum engineering at the University of Houston. "There's a lot of misinformation about hydraulic fracturing in particular." The report was written by experts in oil and gas, engineering, transportation, medicine, economics and law, who analyzed existing research rather than conduct new, original research. The task force included oil executives, academics, an oil and gas regulator and a representative from an environmental group.Among other things, the report highlighted a study that looked into the impact of increased use of roads close to drilling sites, especially by trucks. Researchers found that the cost of road repair -- mainly on rural roads not built for such heavy loads -- increased by $1.5 billion to $2 billion annually. And, there was an increase in serious and fatal crashes involving commercial vehicles near drilling areas such as the Eagle Ford Shale and Permian Basin.  The exploration of shale fields — thanks to fracking, other technology and the increasingly important Permian Basin — has contributed to a 50 percent decrease in gasoline prices, provided local governments with billions of dollars and is responsible for nearly 3.8 million Texas jobs, according to the report, titled "Environmental and Community Impacts of Shale Development in Texas." At the same time, drilling and related activities have led to earthquakes, contributed to the increase and severity of traffic accidents near drilling areas and left questions about the long-term health effects of emissions.

    Fix shale oil production pollution before it gets worse, study leader says - Scientists, regulators and leaders of Texas' energy industry must identify and understand the environmental risks of shale oil and gas drilling before air pollution or water contamination leads to tighter restrictions that could ultimately derail the rebounding industry, the leader of a broad new study said Monday."We really do thrive on the availability of energy in the United States," said the University of Houston's Christine Ehlig-Economides, a former Schlumberger petroleum engineer and chairman of a shale task force convened by The Academy of Medicine, Engineering and Science of Texas. "Where there are things that could threaten the future for this kind of development, those are the things we really must address." The study, conducted by some the state's top scientists and released Monday, concluded that the shale oil boom, while enriching companies, residents and state coffers, has also caused earthquakes, degraded natural resources, overwhelmed small communities and even boosted the frequency and severity of traffic collisions as oversized trucks rushed to and from the oil field. But oil and gas industry representatives found things to like about the report, pointing to sections that said there was little evidence to tie hydraulic fracturing itself - as distinguished from the other parts of shale operations, such as wastewater disposal - to drinking water pollution or the exponential rise in Texas earthquakes."This study is yet another indication that the campaign to shut down fracking is based on politics, not science," Steve Everley, spokesman for Texans for Natural Gas, said in a statement. "If fracking were a credible risk to groundwater, we would know about it in Texas, which produces more oil and natural gas than any other state." Todd Staples, president of the Texas Oil & Gas Association, acknowledged that oil and gas production, taken as a whole, does cause some pollution. But he lauded the report for identifying which parts of the process were more troublesome - such as surface spills, which contaminate drinking water, methane leaks, which pollute the air, and wastewater injection wells, which can cause earthquakes - and which weren't.  "Fracking is a small part of the process. Yet it's been used loosely and incorrectly by those seeking to stop energy production," he said. "Far and away, oil and gas is having a positive influence on the state."

    The most overlooked finding in groundbreaking shale study --One of the most important discoveries from this week’s groundbreaking Texas shale oil and gas report has gone missing from public discussion.The study, by the state’s top scientists, highlighted a litany of findings, some positive — such as the annual gross product from Texas shale drilling of more than $470 billion — and others alarming, such as the unknown effect of air pollution and the marked increase in traffic deaths from oil field trucks.But a key point, the researchers said, was buried in the report’s last chapter:The environmental and social effects of shale oil and gas production in Texas are interconnected. Scientists, regulators and the industry itself cannot continue to consider them independently, and must instead look at how they impact each other. Michael Young, a University of Texas hydrogeologist, associate director at the state Bureau of Economic Geology and member of the research task force, said that’s what makes this report unique.Most studies on oil and gas production focus on one problem, perhaps air pollution, species habitat destruction, water contamination or roadway deterioration. “But these are all connected,” Young said.. Many consider pipelines safer than trucking. What if, however, those pipelines would have to be built through sensitive species habitats? To build a pipeline, companies have to clear-cut a wide right-of-way, dividing animal habitat, disrupting species’ travel and separating animals from food sources, nesting, and each other. “That's known as fragmentation,” Young said.Roadways, on the other hand, are already built.The pipeline may still be better, Young noted. But companies, scientists and regulators should consider all effects before making such such decisions.“All of these things have upsides and downsides,” Young said. “We wanted to have an appreciation for how all those are connected. That to me, is where the report is unique.” For more information, see Table 6-2 in the report, on page 120, and Chapter 9, which starts on page 165.

    Industry group to enviros: End fracking rhetoric - -- A top Texas energy official urged anti-fracking activists this week to drop the rhetoric and work with industry to reduce the environmental impact of shale oil and gas development. It doesn’t solve any problems to blame hydraulic fracturing for every spill, earthquake or leak, said Todd Staples, president of the Texas Oil & Gas Association. Scientists, industry and regulators must instead pinpoint problems and work to solve each individually. “Words matter,” Staples said. “Fracking is a small part of the process. Yet it's been used loosely and incorrectly by those seeking to stop energy production."   If methane leaks are polluting the air, then the solution must address those leaks, he suggested. Surface spills that contaminate water, and earthquakes caused by wastewater injection are rare, the association said. But when they happen, they need to be addressed individually, not by simply blaming fracking.“In order to diagnose a problem, you need to know the specifics,” Staples said. “A surface spill is totally different than the concern about groundwater contamination.” A study released earlier this week by some of the state’s top scientists reported that shale development pollutes the air, contaminates water and causes earthquakes. At the same time, the report distinguished fracking — the act of pumping chemicals, sand and millions of gallons of water into well holes under high pressure until the rock cracks, releasing the oil and gas trapped within — from other elements of shale development, like well drilling, production and wastewater disposal. The scientists did not say that fracking can’t contaminate water, nor that it doesn’t cause earthquakes. But they found little to no evidence that it had.

    Understanding Gas Takeaway Capacity at the Permian's Waha Hub -- Rising volumes of associated natural gas production from accelerating oil-directed drilling in the Permian, along with growing demand downstream in Mexico and along the Texas Gulf Coast, are placing renewed importance on a key West Texas trading hub and pricing point — Waha. Permian gas production climbed almost 900 million cubic feet/day (MMcf/d) during 2016 to nearly 6.0 billion cubic feet (Bcf/d), and is up another 400 MMcf/d since then. Moreover, the pace of growth shows no signs of slowing. Much of this incremental supply will rely on the pipeline interconnects and takeaway capacity available at the Waha trading hub to get to desirable markets. The questions that arise, then, are, will the capacity at Waha be sufficient and at what point will more be needed? Today we begin a series diving into the infrastructure, gas flows and capacity at Waha.

    After Hess Pulls Out, OXY Is Now Dominant US Producer Of Oil Via Carbon Injection -- Reuters -- June 21, 2017 -- Data points:

    • Hess will sell its stake in EOR projects in the Permian Basin of West Texas and New Mexico to Occidental Petroleum for $600 million in cash
    • the deal cements OXY's status as the dominant US producer of oil via carbon injection
    • carbon injection: favored by faux environmentalists and oil producers alike
    • carbon injection: could grow if Congress expands tax credits this summer
    • OXY also gets complete control of naturally occurring sources of underground CO2
    • this naturally occurring source: boosts OXY's bottom line 
    • cost of carbon is generally the largest expense in EOR projects

    Dallas Fed: Energy indicators see continued increase -- The most recent report from the Federal Reserve Bank of Dallas for June 2017 shows that many indicators for the oil and gas sector continued to increase in May. While WTI crude dropped slightly, production growth continues to stay strong, especially in the Permian basin. Below is a summary of the report from the Dallas Fed. For more details and graphs, be sure to visit their website. The Dallas Fed reported that despite early hopes that production cuts from the Organization of Petroleum Exporting Countries (OPEC) would mean lower global crude inventories, lack of confidence led to a decrease in the average WTI spot price to $48.48 in May from $51.06 in April. Natural gas prices increased by two pennies to $3.10 per MMBtu. The oil and gas industry is gaining new jobs. U.S. employment rose by 3,800 jobs in April. Guess which state accounted for 55 percent? You got it–Texas. Texas oil and gas extraction employed 92,100 jobs with another 122,000 in support activities for mining. Why is this number important? Because it shows that production in the Permian Basin rose in May–again. It’s no surprise to anyone that the number continues to climb. The EIA showed an increase of 53,400 barrels per day to 1.29 million. In the Eagle Ford, production continues to rise as well, although not as much as in the Permian. The Eagle Ford showed an increase of 33,000 barrels per day. The two areas together account for approximately 3.6 million b/d. That’s a heckuva lot of oil. Anyone watching the weekly Baker Hughes rig count knows that the Permian basin consistently adds rigs. Texas, too, is usually leading the reports, despite a small drop last week (June 9). Horizontal rigs account for much of these totals, and the Dallas Fed reported that vertical and directional rig counts in Texas fell by 2 in May. Most expect the rig count in Texas to continue to climb over the next six months.Since the crude export ban was lifted in 2015, the Dallas Fed report shows that it wasn’t until this year that we saw a significant increase in exports. Exports increased from 733,000 b/d in April to 926,800 b/d in May. The Fed attributes some of this to the Ingleside Energy Center Terminal at the Port of Corpus Christi. Partly due to the Mexican government’s energy reform program, the demand for imported gasoline has decreased. PEMEX saw recovery of refined products’ prices in addition to completed refinery maintenance. This mean that there was less need to buy from the United States. The Dallas Fed report showed a substantial low of U.S. exports to Mexico at 273,000 b/d in March, which was almost half of what was exported in December of 2016.

    Interior head says public lands can make U.S. a 'dominant' oil power | Reuters: Boosting drilling and mining on America's protected federal lands can help the United States become not just independent, but "dominant" as a global energy force, according to Interior Secretary Ryan Zinke, whose agency manages about one-fifth of U.S. territory. In an interview with Reuters, Zinke outlined his approach to development and conservation in America's wildest spaces, and discussed how that philosophy was guiding his review of which national monuments created by past presidents should be rescinded or resized to make way for more business. "There is a social cost of not having jobs," the former Montana Congressman and Navy Seal said in the interview on Friday. "Energy dominance gives us the ability to supply our allies with energy, as well as to leverage our aggressors, or in some cases our enemies, like Iran," he said. Former President Barack Obama, who oversaw a huge increase in domestic energy production during his tenure while strengthening environmental protections, had advocated reducing U.S. dependence on foreign oil. Obama had also adopted a policy to factor in a "social cost of carbon" emissions from burning fossil fuels - which scientists believe drive global climate change - in making decisions about regulation and land protection. While total U.S. oil production has risen to near records in the past decade, the share produced on federal land has dropped to a fifth in 2015 from more than a third in 2010, according to federal data from the Department of the Interior.

    Zinke pledges to enforce Obama-era methane rule amid rewrite — The Trump administration will enforce an Obama-era regulation aimed at restricting harmful methane emissions from oil and gas production, even as it seeks to rewrite the rule to be more industry-friendly, Interior Secretary Ryan Zinke said Tuesday. Zinke told the Senate Energy Committee that Interior will enforce those parts of the methane regulation that have taken effect. The promise comes despite an announcement last week that Interior is postponing parts of the rule that take effect next year. Under questioning from Democratic Sen. Maria Cantwell of Washington state, Zinke said he agreed that burning off, or “flaring,” of excess methane gas at drill sites is wasteful. He said he hopes to design a rule that ensures taxpayers get fair value for the gas while not punishing industry.Asked by Cantwell if he would promise not to “spend the next six months dragging your feet” on a new rule, Zinke replied: “Ma’am, I do not drag my feet.” The methane rule, finalized last November, forces energy companies to capture methane that’s flared at drilling sites on public lands because it earns less money than oil. An estimated $330 million a year in methane is wasted through leaks or intentional releases on federal lands, enough to power about 5 million homes a year, officials say. Methane, the primary component of natural gas, is about 25 times more potent at trapping heat than carbon dioxide, although it does not stay in the air as long. Methane emissions make up about 9 percent of U.S. greenhouse gas emissions that contribute to climate change, according to government estimates.A bid by Senate Republicans to overturn the methane rule failed unexpectedly last month, prompting Interior officials to promise to suspend, revise or rescind the regulation as part of a wider effort by the Trump administration to unravel what it considers burdensome regulations imposed by former President Barack Obama. 

    Judge's DAPL Ruling, Reckless Spill Record Pushes Pipeline Company's Shares Below $20 for First Time - Energy Transfer Partners, the company behind the controversial Dakota Access Pipeline and the fracked gas Rover Pipeline, has quite the extensive spill history, a new analysis shows.After crunching the numbers from the Pipeline and Hazardous Materials Safety Administration (PHMSA), TheStreet revealed that the Dallas-based company spilled hazardous liquids near water crossings more than twice the frequency of any other U.S. pipeline company this decade. According to the report: "The company has spilled hazardous liquids five times near water crossings since 2010 when PHMSA started collecting detailed data. The company's spills account for almost 20% of all hazardous liquid spills near water crossings since 2010, primarily because of a 55,000-gallon gasoline spill in 2016 near the Susquehanna River in Lycoming County, Pennsylvania. TheStreet only included onshore spills in its analysis, and included subsidiary companies."Since 2010, the company has spilled hazardous liquids 204 times in all, ranking only behind Enterprise Products Partners LP (EPD) and Magellan Midstream Partners, LP MMP, according to TheStreet's tally."Energy Transfer owns about 71,000 miles of natural gas, natural gas liquids, refined products and crude oil pipelines across the country.Alexis Daniel, an Energy Transfer spokesperson, defended the company's safety record.   "Not only does Energy Transfer Partners adhere to the approved regulatory standards, but it is always Energy Transfer Partners' priority to go above and beyond when building pipelines and is a common practice on all projects," she told TheStreet. "For example on Rover, the pipeline route will be flown every ten days, weather permitting, versus every 14 days which is the current requirement, for visual inspection of the pipeline."

    Judge won't allow Trump to be added to pipeline lawsuit   (AP) — A judge says he's inclined to let a group of individual members of American Indian tribes join a lawsuit over the Dakota Access oil pipeline, but only if they agree to not add President Donald Trump as a defendant.Any action against the president whose administration pushed through the pipeline's completion would need to come in a separate lawsuit, U.S. District Judge James Boasberg said. The group's lead attorney said that's still a possibility. The pipeline began shipping oil to customers on June 1.The White House said the administration is confident that federal analysis of the pipeline's environmental impacts "is legally sound."Four Sioux tribes in the Dakotas are suing Texas-based pipeline developer Energy Transfer Partners and the Army Corps of Engineers, which permitted the $3.8 billion project to move North Dakota oil through South Dakota and Iowa to a distribution point in Illinois where it can be shipped to Gulf Coast refineries. The tribes fear environmental and cultural harm, which ETP denies.The lawsuit in federal court in Washington, D.C., has lingered nearly a year. In late February, 13 members of the Standing Rock, Cheyenne River and Oglala Sioux tribes asked to join as individual plaintiffs. They maintain they might be better suited than the tribes as a whole to make some claims against the pipeline because they're personally affected. Boasberg ruled this week that the Corps didn't adequately consider how an oil spill might affect tribal fishing and hunting rights, or whether it might disproportionately affect the tribal community. "Ultimately, this case is about whether individual Native American people are to be subjected to environmental harm," plaintiffs' attorney Bruce Afran said.

    Oil to keep flowing in Dakota line while legal battle continues --Oil will continue to flow through the Dakota Access Pipeline through the summer while authorities conduct additional review of the environmental impact, after a judge on Wednesday ordered more hearings in coming months. Last week, U.S. District Court Judge James Boasberg in Washington ruled in favor of Standing Rock Sioux and Cheyenne River Sioux tribes, who said more environmental analysis of the Dakota Access line should have been carried out. The tribes had said the 1,170-mile (1,880 km) line violates their hunting, fishing and environmental rights. On Wednesday, Boasberg set out a schedule of hearings that will decide what will happen to the line while additional review is completed. A lawyer for the U.S. Army Corps of Engineers, which is responsible for environmental review, would not estimate when asked by Boasberg how long additional review would take. The judge could still order the line to be shut at a later date following a series of hearings scheduled through the summer. "Our view has been that the pipeline should be shut down," said Jan Hasselmann, attorney for the tribes. Energy Transfer Partners LP (ETP.N) built the $3.8 billion pipeline to move crude from the Northern Plains to the Midwest and then on to the Gulf of Mexico. The line runs from western North Dakota into Patoka, Illinois, where it hooks up with another line to refiners in the Gulf of Mexico. ETP said on Wednesday it was "pleased with the judge's decision" for pipeline operations to continue while the process "unfolds." 

    Dallas Goldtooth: The Fight Against DAPL Is Not Over -- Oil will continue to flow through the Dakota Access Pipeline this summer and into the fall, despite the ruling from a federal judge last week that the Trump administration must conduct additional environmental review of the project. A U.S. Army Corps of Engineers lawyer told Washington, DC District Court Judge James Boasberg Wednesday that the Corps had "no timeframe" for the newly-ordered environmental review. Lawyers for the tribes bringing suit against the project told press they anticipate a decision by September, and expressed anxiety that the tribes will not be allowed to comment on the new environmental review. As the DAPL project moves through court, the pipeline's owner, Energy Transfer Partners (ETP), has been keeping busy: a new investigation from The Intercept shows that a private security firm employed by ETP to use "military-style counterterrorism measures" against NoDAPL protesters is now monitoring another ETP pipeline project in Pennsylvania. "The fight against Energy Transfer Partners and its Dakota Access pipeline is not over, nor is it an easy fight ahead," said Dallas Goldtooth, lead national organizer for the Indigenous Environmental Network . "We know that we face an uphill legal battle to victory, but we remain committed to the protection of the water and the power of our movement to keep fossil fuels in the ground."  A rally was held Wednesday at U.S. District Courthouse to support the Standing Rock Sioux and Cheyenne Sioux tribes. "Their battle is on behalf of all of us who share this planet," said Rising Hearts founder Jordan Marie Daniel. "The fight against placing corporate interests above the health, safety and well-being of entire communities and the quest to end the assault against the earth we share moves forward."

    West Coast alternatives for exporting LPG to Asian markets.  The Pacific Northwest will never be a Houston or even a Marcus Hook when it comes to liquefied petroleum gas (LPG) export volumes, but the region — British Columbia, Washington State and Oregon — is finally poised to get a second marine terminal dedicated to loading propane and butane, the two LPG family members. When AltaGas and Royal Vopak’s planned 40-Mb/d LPG export terminal on BC’s Ridley Island comes online in the first quarter of 2019, it will join Petrogas’s 30-Mb/d terminal in Ferndale, WA, in offering time-saving, straight-shot LPG deliveries to Asia, which has emerged as a leading destination for North American-sourced propane and butane. Other LPG export terminals in the Pacific Northwest have been proposed. Today we begin a blog series on propane and butane exports from Ferndale and the prospects for regional export growth. Propane and butane — the two natural gas liquids (NGL) products generally referenced as LPG  — are produced by the processing of natural gas yielding mixed NGLs and the fractionation of those NGLs into purity products (see Talkin’ ‘Bout My F-f-fractionation for more). Refineries also produce LPG. U.S. production of propane and butane has skyrocketed during the Shale Era, largely because of rising production of wet natural gas, which contains significant volumes of NGLs. As result (and as we said in Come on Down to My Boat), the U.S. five years ago flipped from its long-time status as a net LPG importer to a net exporter. By 2016, net U.S. exports had risen to an average of 855 Mb/d, more than 15 times the exporting pace in 2012, and in the first six months of this year, LPG exports averaged just above 1.0 MMb/d, according to the June 20 (2017) issue of RBN’s NGL Voyager Report, which analyzes ship-tracking data to determine how much LPG is exported out of each U.S. terminal and where it ends up.

    It Won't Take a Red-Hot Summer to Wipe Out the U.S. Gas Glut - A supply glut that’s weighed on the U.S. natural gas market for most of the past two years may vanish before the winter, even if a sweltering summer fails to materialize.  Inventories of the power-plant fuel may reach 3.4 trillion cubic feet by the end of October, the lowest since 2008 for the time of year, according to report from Bloomberg New Energy Finance. That’s about 10 percent below the five-year average for the period. Even as forecasts show unusually cool early-summer weather curbing gas consumption in the eastern U.S., bullish traders may have cause for optimism. Exports of the fuel are heading to Mexico and overseas buyers at a record clip, siphoning off stored supplies, and production from America’s shale basins has yet to recover to early 2016 levels after last year’s price rout. Gas stockpiles dipping below the five-year average could bode well for a market rally in 2018.  "If we have low inventory and a normal winter, that basically sets up the stage for a bullish market in 2018," during spring and summer, when supplies are added to storage, Tai Liu, an analyst at Bloomberg New Energy Finance, said in a phone interview Thursday.  U.S. natural gas inventories totaled 2.77 trillion cubic feet as of June 16, 8.1 percent above the five-year average, U.S. Energy Information Administration data show.  Gas bulls aren’t giving up on summer yet, despite the mild weather outlook. Seven of 12 traders and analysts surveyed by Bloomberg News see prices rebounding from a recent 15-week low. Two were bearish and the rest expect futures to hold steady.

    Global refinery capacity additions and their effect on US refiners - Worldwide, refiners expect to add significant capacity over the next five years, mostly in the Middle East and the Asia Pacific region. While only a small amount of crude processing capacity additions are expected in the U.S. and Canada, the capacity additions elsewhere could have major product-trade and utilization effects on U.S. refiners — especially in PADD 1 (East Coast). Today we analyze expected near-term refinery capacity additions, global demand projections, and potential effects in the U.S. Until a few years ago, the U.S. stood as a major net importer of refined products; but thanks to the recent boom in domestic crude supply and an abundance of low-cost natural gas (cheap thermal energy, power and hydrogen), U.S. refiners now rank among the lowest-cost producers of transportation fuels worldwide. Despite lackluster demand growth within the U.S., low-cost American refiners have maintained record-setting outputs, boosting refined product exports to new highs. However, with new refining capacity under development in major international markets, is the high domestic capacity utilization sustainable? Well, it depends. 

    Falling prices, equipment and labor constraints could slow drilling surge - The U.S. drilling surge could begin to plateau soon as operators grapple with both falling prices and growing constraints on equipment and labor.  Unless the oil market reverses course quickly, analysts said, the recent drop in crude prices to less than $43 a barrel could prompt operators in less prolific oil plays like the Bakken Shale in North Dakota to shed rigs.Producers in more lucrative regions like the Permian Basin in West Texas may only slow the pace of the rig count growth if the market turmoil persists. But drillers there are also running low on rigs with high-horsepower systems that plow larger wells into the region's dense rocks, and it has become increasingly difficult to find new oil field workers in the region, said Paul Mosvold, president and chief operating officer of Houston rig contractor Scandrill. "We're going to go flat on the rig increase because of the lack of available shale-ready rigs," Mosvold said. And as prices fall, "are we going to see a dramatic slowdown in the Permian? I don't think so. But in the peripheral areas, we could." U.S. crude prices fell 3 percent on Tuesday to $42.85 a barrel in New York as traders reacted to news that Libya's oil production will rise to its highest level in four years.That drop could eventually slow the U.S. rig count, particularly in regions outside the Permian Basin, but it won't stop the flood of oil coming from the nation's shale plays. At this point, oil prices would have to fall into the low $30-a-barrel range to squeeze U.S. shale plays enough to force drillers to reduce oil production, analysts said. Several U.S. oil companies locked in $50-a-barrel oil prices for this year's batch of crude production, and they'll keep pumping crude into the oversupplied market, keeping a lid on prices."This bust phase is going to last longer than anyone expected," said Bob McNally, president of consultancy Rapidan Group in Washington D.C. "There has been this false hope that shale or OPEC will return to a swing producer role."

    For investors in shale drilling, the party's over - Houston Chronicle: Wall Street appears to have lost its taste for the resurgent U.S. shale industry as oil prices tumble and energy share prices fall. Oil companies have only raised $3 million this month through selling new shares to investors, a dramatic drop in the public equity offerings that have helped fuel the return of drilling rigs across the nation this year. It's a stark shift in investor sentiment after last month, when producers like Kosmos Energy and RSP Permian collected a combined $1 billion from stock-market investors. That was before U.S. oil prices took a month-long tumble of around 20 percent to $43.15 a barrel on Friday. Some investor groups have said "they had little-to-no interest in providing a second lifeline to the industry," Houston investment bank Tudor, Pickering, Holt & Co. said in a note to clients on Friday. "It's like you're having a party, and it's awesome, and then the parents come home, and the party's done," said David Pursell, head of macro research at Tudor Pickering. "There's no appetite to fund further growth. Oil prices went from the mid-$50s to the low $40s. It's a big change and it happened quickly." The once-vibrant public equity markets had poured $8 billion into U.S. shale drillers in the three months after OPEC announced it would cut oil production, and the number of active U.S. drilling rigs boring has more than doubled since last summer. But the in wake of the recent slump in oil prices, the oil companies that raised billions of dollars this year have seen their shares drop by 22 percent this year. If investors keep pulling back, the surge in drilling could slow sharply, Pursell said. And why wouldn't they? Other industries are performing much better than energy. 

    Oil bear market separates strong, weak U.S. shale producers - Crude oil's bear market is highlighting the haves and have nots among U.S. shale producers, with the stronger promising to keep pumping even as prospects dim for some of their financially strapped peers. Crude prices have dropped more than 20 percent since late February, in part because of rising U.S. shale production that is offsetting OPEC's efforts to tame global stockpiles. On Wednesday, prices fell more than 2 percent to $42.58 after touching a 10-month low during the day. The price tumble has dragged down shares of oil and natural gas producers and raised the specter of trims to drilling budgets set when oil was trading around $50 a barrel. Oil producers' average capital spending was previously projected to rise by 50 percent this year over depressed levels of 2016. Analysts say prices that stick between $40 and $45 a barrel could trigger some companies to quietly scale back planned drilling activities. But industry-wide, major changes to capital spending budgets likely will not be announced until later this summer as quarterly results are released. "Companies will try to push that back as long as possible," said Dan Katzenberg, an oil industry analyst at Baird. A Wall Street sell-off of energy stocks largely has spared those shale producers with strong balance sheets, hedged production and significant operations in the Permian basin. Investors are treating them as likely not only to survive but thrive at below $45 a barrel. The Permian Basin of West Texas and New Mexico, America's largest oilfield, can produce profitably even if oil prices drop below $40 per barrel. "Investors are starting to make that separation between companies that were already outspending cash flow and those that weren't,"

    Day Of Reckoning in 2018? US Rig Count Poised For Loss -- Unless they’re missing something – and really, that’s pretty unlikely – analysts at Barclays believe U.S. oil and gas will lose as many as 100 onshore rigs by the end of the year.As of June 16, there were 933 rigs at work in the United States – that’s up 270 rigs since January. But as rigs efficiency reverses and oilfield service costs trend upward, fewer rigs will remain active during the remainder of the year, Barclays said in a June 20 note to investors. In fact, for the rig count to linger above 900, exploration and production (E&P) companies would have to increase spending by 70 percent this year and well costs would have to flip and actually decline. Neither is a likely scenario. “The math all points in the same direction … down,” Barclays said, adding that the downward trend could last several quarters.Most of the publicly traded E&Ps and majors have met their rig targets for the year, and with oil prices faltering, additional spending is doubtful.As Barclays explained, high-grading the characterized the downturn is wearing off and operators are now drilling longer laterals, which can take twice as long to complete a well as it does to drill it. That’s especially the case in the Permian where operations are moving into the Delaware, where pad drilling is used less than elsewhere in the basin. “Well costs are arguably the biggest point of contention between E&Ps touting structural cost gains and service companies clawing back pricing,” they said. “Overall, well costs appear fairly flat this year, though signs of increases are starting to build.” All of which doesn’t really change much this year. Completions, which make up about up two-thirds of the well cost, need to catch up to a rig count that got ahead of itself. Meanwhile, E&P budgets haven’t changed, a key metric to gauge service costs. To be sure, E&Ps appreciated the lower well costs during the leanest months, and that fueled the boom in activity. But with a rig count that grew perhaps too fast, it’s setting up a challenging year ahead. “It has also led to a false narrative that shale is economic below $50 per barrel,” Barclays said. “We think that day of reckoning comes in 2018 as oil inflation rears its head, budgets get pinched and E&Ps become more discerning in growth programs.”

    Oil firms could waste trillions if climate targets reached -report | Reuters: Energy giants including Exxon Mobil and Royal Dutch Shell risk wasting more than a third of their budgets on projects that will not be needed if climate targets are to be met, a thinktank report shows. More than $2 trillion of planned investment in oil and gas projects by 2025 could be redundant if governments stick to targets to lower carbon emissions to limit global warming to 2 degrees Celsius, according to a report by the Carbon Tracker thinktank and institutional investors. It compared the carbon intensity of oil and gas projects planned by 69 companies with requirements needed to meet the warming target set by the 2015 Paris agreement, which will require curbing fossil fuel consumption. It found Exxon, the world's top publicly-traded oil and gas company, risks wasting up to half its budget on new fields that will not be needed. Shell and France's Total would see up to 40 percent of their budgets misspent. Fossil fuel producers have come under growing pressure from investors to reduce carbon emissions and increase transparency over future investment. Sweden's largest national pension fund, AP7, one of the authors of the report, said last week it had wound down investments in six companies, including Exxon, which it said had violated the Paris agreement. Top energy companies have voiced support for the Paris agreement reached by nearly 200 countries. Many of them have urged governments to impose a tax on carbon emissions to support cleaner sources of energy such as gas.

    Innovators toil to revive Canada oil sands as majors exit | Reuters: In the boreal forests and on the remote prairies of Alberta, a handful of firms are running pilot projects they hope will end a two-decade drought in innovation and stem the exodus of top global energy firms from Canada's oil sands. They are searching for a breakthrough that will cut the cost of pumping the tar-like oil from the country's vast underground bitumen reservoirs and better compete with the booming shale industry in the United States. If they fail, a bigger chunk of the world's third-largest oil reserves will stay in the ground. Canada's oil sands sector has become one of the biggest victims of the global oil price crash that began in 2014 when top OPEC producer Saudi Arabia flooded the market with cheap crude to drive out high cost competitors. This year alone, oil majors have sold over $22.5 billion of assets in Canada's energy industry, and been lured south to invest in the higher returns of U.S. shale. Joseph Kuhach is among the entrepreneurs in Canada hoping they can turn the tide. He runs a small Calgary-based firm, Nsolv, that is testing the use of solvents to liquefy the bitumen buried in the sands and make it flow as oil. Kuhach says using solvents can cut 20 to 40 percent from the cost of producing the oil. The technique currently used is to use steam to heat the sands underground to extract the oil. It's a hard sell, he said, to Canadian producers struggling with low oil prices. They are reluctant to invest in a multi-million dollar technology that is unproven on a commercial scale, he said.

    Judge OKs deposition of tar sands employee in Exxon climate fraud probe -  A judge on Friday approved a request by the New York Attorney General's office to grill several ExxonMobil employees as part of its widening probe into whether the oil giant misled investors about its risks from climate change. Justice Barry R. Ostrager refused a request by Exxon to block two of the depositions at a hearing in which he ordered the two sides to meet outside of court to hash out their differences over New York Attorney General Eric Schneiderman's demand for more documents. The contentious hearing did little to resolve the ongoing dispute between Exxon and the attorney general's office, which is investigating whether the company committed financial fraud involving what it told investors about climate change risk.. Ostrager declined to rule on whether Exxon would have to produce additional documents that were subpoenaed Schneiderman in May. Exxon had asked the judge to throw out the requests. Instead, Ostrager told Exxon and the attorney general's office they should work together outside of court to agree on specific questions for the company to answer about the details of its climate accounting. Those questions, together with the depositions, would provide a quicker resolution to the case, he said. "If you had done that on day one," he told state lawyers, "you'd be 1,000 yards ahead of where you are today." The judge did hand Schneiderman one victory. Ostrager ordered Exxon to provide testimony of an employee of its Canadian affiliate, Imperial Oil. The employee had been involved in evaluating the future costs of potential climate regulations for a project in the tar sands, and Exxon apparently told him not to apply the estimates contained in the company's corporate directives, but instead to use the much lower levels of Alberta's provincial carbon tax, according to documents filed by the attorney general.

    Dirty money: Scots councils under fire for fracking funds – HeraldScotland -- TEN Scottish local authorities pension funds have invested more than £400 million in 23 fracking companies. Glasgow, Edinburgh, Aberdeen, Dundee, Falkirk and other councils put their pension money in multinational shale gas firms blamed for causing climate pollution. A new report by Friends of the Earth Scotland discloses council pension investments in Shell, BP, Exxon, Chevron, Occidental and many other companies it says are involved in fracturing underground rocks to extract shale gas. Campaigners say the fracking industry is “completely irresponsible” and are calling for money to be invested in clean energy instead. But councils say they have a duty to pensioners to invest where they can make the most money. The biggest investor is the Strathclyde Pension Fund, administered by Glasgow City Council, which has put £142m into 21 companies. Two of them are said to have breached environmental laws in the US. Over the last two years US authorities have fined Range Resources $13 million for pollution breaches in Pennsylvania. Cabot Oil and Gas, based in Houston Texas, was reported for 494 environmental violations in Pennsylvania between 2009 and 2013.

    Britain's Reliance On Imported Gas To Jump As Giant Storage Site Axed (Reuters) - Britain is set to lose its largest natural gas storage site, increasing the country's reliance on imported energy, after British Gas owner Centrica, said it would close its ageing Rough facility.Wholesale gas prices will become more volatile and more vulnerable to price spikes, analysts and traders said.Britain already imports around half of its gas from Norway, continental Europe, and from Qatar in the form of liquefied natural gas (LNG).This figure is expected to rise as its own supplies from the UK Continental Shelf decline.And if Britain cannot call on stored reserves when demand rises in winter, it will need to import even more. Rough covered a tenth of Britain's peak winter demand."The loss of Rough will create uncertainty, volatility and leave (Britain) exposed," said Wayne Bryan, an analyst at consultancy Alfa Energy."If we experience a 2-3 week cold snap, the loss of Rough will see us reliant on imports, namely LNG," Bryan said.Storage provides security and flexibility of supply. Gas injected in the summer at times of low demand and low prices is there to meet demand when consumption rises in the winter.With the closure of Rough, Britain loses about 70 percent of its storage capacity."The market will be more exposed to international price fluctuations as more imports will be required to balance Britain's gas market when cold," said Katrina Oldham, an energy trader at Inenco.Reflecting the British market's vulnerability to imports, prices for July gas jumped earlier this month after doubts were raised about delivery of two Qatari LNG cargoes. The two tankers eventually declared they would come to Britain, but via a different route, sending prices back down.

    Norway bans use of heating oil in buildings -- Norway will be the first country in the world to prohibit the use of fossil-based oil to heat buildings. The ban will cover both new and old buildings including private homes and businesses as well as publicly owned facilities. Recent statistics show that 80,000 Norwegian homes and an additional 20,000 non-residential buildings are heated with fossil-based oil. They will have more than two years to replace their equipment before the ban comes into effect in 2020. The Norwegian Government hopes that the upcoming ban will result in a reduction of the country's carbon dioxide emissions by 340,000 tons per year, compared to overall national emissions of 53.9 million tonnes in 2015.  Environment Minister Vidar Helgesen said: Those using fossil oil for heating must find other options by 2020. Recommended alternatives to oil-based products include heat pumps, electricity from the country's hydroelectric grid and even special stoves burning wood chips. Additional measures could include limitations on the use of natural gas for heating.

    Analysis: LNG glut delayed, but only slightly -- The great LNG glut predicted for 2016, as new Australian and US LNG projects came on stream, didn't quite materialize -- with disruptions to existing LNG output in Yemen, Libya, Egypt and Angola, combined with underperformance from some of the new producers meaning less LNG on the market than expected -- but it has just been delayed, according to Anne-Sophie Corbeau, research fellow at the King Abdullah Petroleum Studies and Research Center. Corbeau was speaking Tuesday at the International Association for Energy Economics international conference in Singapore. Corbeau said LNG trade expanded by only 27 million mt/year between 2014-16, despite 65 million mt/year of new capacity nominally coming into operation. However, Corbeau sees 100 million mt/year of new capacity starting up between 2017-2020, 85 million mt/year of that by 2019. Ken Koyama, chief economist at the Institute of Energy Economics, Japan, said the LNG supply/demand balance did shift into oversupply in 2016, but not by as much as anticipated, with supply at 304 million mt and demand at 286 million mt, compared with 266 million mt and 267 million mt respectively in 2015. How long the glut will last is a matter of conjecture, but perspectives on the issue are important because they will determine when developers sanction new, multi-billion dollar, LNG projects.

    Nord Stream 2: with Europe already divided, the US adds a new layer of geopolitical complexity - When Gazprom officially launched plans to build the second Nord Stream gas pipeline system to Germany in June 2015, the accusations that Gazprom’s main aim was to increase its dominance over European gas came thick and fast. When five European majors from five EU member states (Austria, France, Germany, the Netherlands and the UK) all joined the Nord Stream 2 project, it left Europe essentially divided — those in northwest Europe who supported the pipeline and those strongly opposed, mostly countries in eastern Europe.  The previous US administration was notionally opposed to the project, with former Secretary of State John Kerry warning of its impact on the countries of eastern Europe — and in particular Ukraine — given the anticipated fall in transit revenues and concern over the fact that so much Russian gas could be delivered to Europe via just one route. But now the US has joined the complex geopolitical web being spun around Nord Stream 2 with concrete action, the Senate last week proposing sanctions against companies that invest in Russian energy pipelines. The sanctions are not a done deal yet by any means, but the reaction from Germany and Austria — home to Nord Stream 2 financiers Wintershall, Uniper and OMV — was as fierce as it was immediate.A joint statement the day after the Senate vote included — very unusually — no fewer than four exclamation points, proof if any were needed of how strongly the two governments felt. “We cannot accept the threat of sanctions against European companies that want to contribute to the expansion of European energy supplies!” “Europe’s energy supply is a matter for Europe, not for the US!” “Foreign policy interests must in no way be linked to economic interests! There is still enough time, and opportunity, to prevent this!” These are clearly not comments that could be open to misinterpretation, and have triggered a new diplomatic spat. Germany and Austria said the potential US sanctions had brought a “new and very negative” quality to US-Europe relations and there has even been talk already in Berlin of reciprocal sanctions against the US.

    Are Russia And The Saudis Planning A Natural Gas Cartel? -- The fledgling production cut strategy of OPEC (Saudi Arabia) and non-OPEC (Russia and the FSU) shows that a new strategy is needed to counter the ongoing doubts in the markets. At the same time, Russia and Saudi continue to give indications of a possible OPEC 2.0 scenario, in which a possible Russian membership is on the table. This would confront the market with a renewed and stronger oil cartel, although the overall strategies need to be adjusted. At the same time, Saudi Arabia, via its oil giant Aramco has openly stated to be interested in global gas investment opportunities, starting in Russia’s Siberian region. While the media still looks at the current discussions as a pure crude oil cooperation strategy, some see another development on the horizon. The real power of OPEC, non-OPEC cooperation would increase if they would not only include a crude oil production cut, but also integrate the other (hidden) cartel, the Gas Exporting Countries Forum (GECF). An OPEC 2.1, including gas exporters, would really block any negative developments in the market, even shale oil and gas. At present, international analysts and media sources are hyping the story about Saudi Arabia’s multi-billion dollar investments in Russia’s oil and gas sectors. Statements made by Saudi minister of petroleum Khalid Al Falih are only making headlines at present if he indicates that oil giant Aramco will be targeting natural gas projects and even LNG in future. Certain analysts think that Aramco is taking the same road as Shell, BP and other oil majors, have taken, diversifying away from oil and into gas. The ‘Golden Age of Gas’, as reported by the IEA has not yet become reality. Riyadh now seems interested in becoming a convert of the gas era, but reality is not as simple. There is more between the lines than currently is being discussed in the media.

    France to stop granting oil exploration licences - energy minister | Reuters: French energy minister Nicolas Hulot said on Friday the government planned to present a draft law this autumn that would stop granting licences for oil and gas exploitation in France and overseas territories. "There will be no new licence granted for exploration of hydrocarbons, we will pass the law this autumn," Hulot said on his Twitter account following an interview on BFM-TV, Hulot, an environmental campaigner before he became a minister last month, also said diesel and petrol taxes would converge in the not-too-distant future, as laid out in plans by the previous Socialist government.

    France's Total to go ahead with major Iran gas project: CEO | Reuters: Total will go ahead with development of a giant Iranian gas field this summer, its CEO told Reuters, in the first major western energy investment in the country since Tehran signed an international nuclear deal. Chief Executive Patrick Pouyanne said the French group would make an initial $1 billion investment after the United States extended sanctions relief for Iran under the 2015 agreement. Washington has warned that it could cancel the sanctions waivers if it believes Tehran is not curbing its nuclear program in line with the deal with world powers. "It is worth taking the risk at $1 billion because it opens a huge market. We are perfectly conscious of some risks. We have taken into account (sanctions) snap-backs, we have to take into account regulation changes," Pouyanne said in an interview. The offshore field was first developed in the 1990s, and Total was one of the biggest investors in Iran until the international sanctions were imposed in 2006 over suspicions that Tehran was trying to develop nuclear arms. Total has decided to return and develop phase 11 of the South Pars project in the Gulf, which will cost up to $5 billion, at a time when President Hassan Rouhani has faced criticism at home over a lack of economic revival following the easing of sanctions under the nuclear deal. Though one of the world's largest oil and gas producers, most major international giants including Royal Dutch Shell and BP have so far shown limited appetite to invest in Iran, due to uncertainty over contract terms and a sharp drop in global oil prices. U.S. President Donald Trump's hard line on Iran has further cooled the investment climate, even though his administration extended the wide sanctions relief last month. "The U.S. waivers have been renewed and they will be renewed every six to eight months. We have to live with some uncertainty," 

    Sabha in the spotlight: the city where migrants are sold as slaves -- Deep in the Libyan desert at the confluence of several migration routes from sub-Saharan Africa, this oasis city of 130,000 hit the headlines earlier this year. The United Nations migration agency reported that some new arrivals at this staging post to Tripoli and the Mediterranean coast, 400 miles north, were being “sold” at modern day slave auctions. It’s a worrying development for Sabha – always liable to become involved in the modern refugee crisis by its position – and World Refugee Day 20 June serves as a reminder of how vulnerable migrants are in places like this semi-lawless enclave, caught between tribal and political factions in post-revolution Libya. At least half of the 180,000 migrants who arrived in Italy via Libya last year passed through Sabha. “The majority of west African migrants come through Agadez in Niger, then through Qatroun. And the east Africans come up from the border with Chad,” explains Ashraf Hassan, at the UN’s International Organisation for Migration. Then through people-smugglers migrants negotiate further passage north – or not, if the slavery allegations are true. Ashraf Hassan “Sabha is not the place that drives the people-smuggling... it’s just the initial assembly point,” explains Ashraf Hassan, at the UN’s International Organisation for Migration. Currently the local municipality are too under-resourced to regulate the situation. For the situation to improve in favour of empowering migrants rather than smugglers requires a complete change in Libyan fortunes, adds Hassan: “The country in general needs to be stabilised before Sabha can support the integration of migrants.” 

    India natural gas: A 5-year outlook on supply and demand – Platts video - With India's domestic gas production set to rise to 37 Bcm by 2021 and consumption to hit 72 Bcm over the same period, additional gas demand will have to be met by rising LNG imports. In this video, analyst Max Gostelow looks at India's LNG supply-demand gap, the competition faced by Indian importers, and how S&P Global Platts has updated its methodology to help improve transparency in India's LNG market.

    Challenges, opportunities for Russian oil in wake of OPEC extended deal - Commodity Pulse video - Ahead of the Platts Moscow Oil & Energy Forum being held June 20, Andrew Bonnington,Nadia Rodova and Gillian Carr discuss some of the key issues impacting the Russian and other CIS states in the wake of the extended OPEC and non-OPEC agreement to extend crude oil production cuts until March 2018. They also touch upon some of the challenges facing Russia in terms of increasing global competition to it in refined product export markets.

    Oil market fundamentals heading in right direction – Saudi’s Falih ---Saudi Energy Minister Khalid al-Falih said the oil market is heading in the right direction but still needs time to rebalance, the London-based newspaper Asharq al-Awsat reported on Monday. "In my opinion, market fundamentals are going in the right direction, but in light of the large surplus in stockpiles over the past years, the cut needs time to take effect," he told the newspaper, referring to a global deal to curb oil production. "Current expectations indicate the market will rebalance in the fourth quarter of this year, taking into account an increase in shale oil production," he said. Asked about the recent drop in oil prices, Falih said: "Markets determine prices but are themselves driven by unpredictable variables beyond the control of producing nations." "Short-term volatility is mostly a reaction to short-term factors ... as well as the role of speculators in stock markets that increase market volatility." Oil prices dipped on Monday, weighed down by a continuing expansion in U.S. drilling that has helped to maintain high global supplies despite an OPEC-led initiative to tighten the market by cutting production. The price of oil is down around 14 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries extended their pledge to cut output by 1.8 million barrels per day (bpd) by an extra nine months. Falih said there was a relatively big draw of around 50 million barrels from floating storage and a drop in industrialised nations' onshore storage of 65 million barrels compared to July last year..

    Hedge funds sour on crude oil and fuels: Kemp(Reuters) - Hedge fund managers have become very bearish about the outlook for oil prices as production from countries outside OPEC grows and threatens to undermine the effectiveness of OPEC’s output controls.Hedge funds and other money managers cut their combined net long position in the three major futures and options contracts linked to Brent and WTI by 51 million barrels in the week to June 13 ( managers cut their net long position for the second week running by a cumulative total of 91 million barrels, according to data published by regulators and exchanges ( managers also cut their net position in gasoline by 13 million barrels and heating oil by 19 million barrels last week ( and funds have discounted the fact oil prices are already under than $50 per barrel and reassurances from OPEC ministers that global oil stocks will draw in the second half of the year.Instead they have focused on the continued rise in the number of rigs drilling for oil in the United States and signs gasoline and diesel demand may not be growing fast enough to absorb the record fuel being produced by U.S. refineries.The U.S. Energy Information Administration predicts global oil stocks will draw down in the third quarter of 2017 as a result of OPEC’s output cuts.But global stocks are expected to rise again through 2018 as OPEC compliance deteriorates and supply from non-OPEC sources increases.Bearish sentiment among oil traders has triggered a wave of short selling, with hedge funds adding 45 million barrels of extra short positions in crude, as well as 15 million in gasoline and 16 million in heating oil.There are signs hedge funds may have embarked on the eighth cycle of short-selling in WTI since the start of 2015, though it is still too early to tell.The only supportive factor for oil prices in the short term is that so many short positions have been established and there are relatively few long positions left to liquidate. Conditions are in place for an eventual short-covering rally but the rebound may not come until there are clear signs global stocks are falling and U.S. shale drilling is levelling off.

    Analysis: Rising US crude oil exports complicate rebalancing efforts - One reason for the bearish narrative gripping the oil market of late has been that draws in US crude stocks have essentially come at the expense of the rest of the world. US crude exports have surged this year -- averaging more than 1 million b/d in April, the second most on record -- driven by the significant discount of US crude prices relative to global benchmarks. The weakness of ICE Brent's term structure compared with NYMEX crude can be seen as a symptom of the glut that has been exported out of the US to the rest of the world that, in turn, has weighed on the oil complex. The recent plunge in oil prices that began May 25 saw crude futures drop roughly $7/b through last week, while the contango widened across time maturities for ICE Brent and NYMEX crude. Moreover, the contango for ICE Brent has now become wider than that of NYMEX crude, which for later-dated contracts had not been the case since late November when OPEC announced a deal to cut supplies starting January 1. ICE Brent's front-month/12th-month spread averaged minus $1.84/b last week, which was 35 cents wider than the same spread for NYMEX crude. Over the five trading sessions ending May 24, that ICE spread averaged minus 46 cents/b, compared with minus 92 cents/b for NYMEX crude. That switch in relative strength from ICE Brent to NYMEX crude came amid a drop in US crude stocks that lasted eight straight weeks through May 26. Analysts surveyed Monday by S&P Global Platts expect crude stocks fell 2 million barrels last week. But the same analysts expected a 3.5 million-barrel decline for the prior week, only to be surprised by a 3.3 million-barrel build for the week ended June 2. 

    Shale's Record Fracklog Could Force Crude Prices Even Lower - There’s yet another concern growing as oil prices continue to erode: A record U.S. fracklog.There were 5,946 drilled-but-uncompleted wells in the nation’s oilfields at the end of May, the most in at least three years, according to estimates by the U.S. Energy Information Administration. In the last month alone, explorers drilled 125 more wells in the Permian Basin than they would open. That represents about 96,000 barrels a day of output hovering over the market.If OPEC thought shale was a thorn in its side before, just wait until U.S. explorers turn their spigots on full blast. Wells waiting to be fracked and flowing are an overhang that could mean a burst of new supply in the second half of the year and into 2018,  ."Even though rig counts have gone through the roof in the Permian, we really haven’t even felt the full production implications,"  "We’ve only felt 70 percent of the rise in drilling."  Explorers generally start the drilling process with contractors such as Helmerich & Payne Inc. and Nabors Industries Ltd., using rigs to dig a vertical shaft that can drop 5,000 feet or more. They then build in a bend to extend the shaft sideways into a promising shale layer, a process that overall can take weeks. Other service companies such as Schlumberger Ltd. and Halliburton Co. complete the process, using high-pressure machines that push in sand, water and chemicals to free up oil and natural gas that’s pumped to the surface. Until that final step occurs, the well is known as a DUC, a drilled-but-uncompleted asset, part of the so-called fracklog.   Last week was the 22nd in a row in which U.S. explorers boosted their rig count, the longest stretch of uninterrupted growth in more than three decades.  Prices fell 1.4 percent to $44.13 a barrel at 2:26 p.m. in New York. Explorers can afford to keep drilling with oil under $50, once considered a key price point for expansion, partly because of hedging, price insurance bought by companies when oil neared $55 at the end of last year. Explorers have also cut the cost of drilling using new systems that make the process more efficient. In some shale plays, like the Permian, that’s dropped the break-even price to about $35. That new efficiency, though, has overwhelmed fracking firms.

    U.S. Drillers Are Hammering OPEC’s Plans - Oil fell, extending four weeks of declines, as U.S. drillers continue adding rigs and Libya boosts output, blunting OPEC-led efforts to re-balance an oversupplied market. Futures dropped 1.2 percent in New York after capping the longest run of weekly declines since August 2015. U.S. drillers targeting crude added rigs for a 22nd straight week, the longest uninterrupted stretch of growth in three decades, according to data from Baker Hughes Inc. on Friday. Libya is producing the most oil in four years after a deal with Wintershall AG enabled at least two fields to resume production. Oil plunged below $45 a barrel last week after the U.S. Energy Information Administration said gasoline supplies surged to the highest level since mid-March at a time when summer demand should be bringing inventories down. The Organization of Petroleum Exporting Countries and its allies have sought to reduce bloated oil stockpiles to the five-year average, but increasing numbers of drilling rigs in America, as well as rising output in Libya, are putting that target in jeopardy. "We cannot afford to have another build in crude or gasoline," "The market’s just dying for a reason to buy this thing, but you can’t really do that before" Wednesday’s data on stockpiles. West Texas Intermediate for July delivery, which expires Tuesday, closed at $44.20 a barrel on the New York Mercantile Exchange, down 54 cents. Futures have fallen 18 percent this year. Brent for August settlement fell 46 cents to settle at $46.91 a barrel on the London-based ICE Futures Europe exchange, after dropping 1.6 percent last week. The global benchmark crude traded at a premium of $2.48 to August WTI. 

    Oil Tanker Storage Hits a 2017 Record Despite OPEC's Cuts - Oil traders are resorting to storing more and more oil at sea amid swelling output in the Atlantic region, a sign the market is far from the kind of re-balancing that OPEC would have hoped for when the group set out last year to bring down global stockpiles. The amount of oil stored in tankers reached a 2017 high of 111.9 million barrels earlier this month, according to Paris-based tracking company Kpler SAS. Higher volumes of storage in the North Sea, Singapore and Iran account for most of the increase. The build-up occurs even as the Organization of Petroleum Exporting Countries and 11 other nations led by Russia cut supplies. Since the beginning of the year, those nations have attempted to trim nearly 1.8 million barrels a day from the market, though higher output in the U.S. and Africa and sluggish demand in Asia have all helped to undermine their efforts. “If anything, it shows that OPEC cuts still aren’t having enough of an impact,” Olivier Jakob, managing director of consultant Petromatrix GmbH, said of the buildup at sea. “The pressure is coming from the Atlantic Basin,” where there are additional supplies, he said. Companies including Trafigura Group and Vitol Group have recently chartered older supertankers for as long as eight months, and some of the vessels are likely to be used for floating storage, according to a research note Monday from Pareto Securities AS. As a result of the persisting surplus, spot prices for oil are being pushed lower than those for supplies months and years into the future. Such a structure, known as contango, can make it profitable for traders to store oil in tanker ships for delivery later, although data compiled by Bloomberg and E.A. Gibson Shipbrokers Ltd. indicate that’s not the case yet. As recently as May 1, the average volume was about 74 million barrels, according to Kpler. Floating storage in Singapore has risen by 23 percent this year and 32 percent in the North Sea, it estimates. 

    Oil Plunges To November Lows On Sudden Volume Spike --Oil dropped to the lowest in seven months, with both Brent and WTI sliding to prices not seen since November, following a burst of volume just after 6am, amid a revival in output from Libya and rising volumes of fuel held in floating storage, although today's move was likely yet another hedge fund capitulating and liquidating long positions. As a reminder, Pierre Andurand was down 17.3% through end of May. Brent hit new year-to-date low at $45.85, after a one-minute burst of volume of a day-high 5,208 lots at 6:04am, taking out a 38.2% Fib support, after a one-minute spike in volume to a day-high 5,208 lots just after 6am. The move could spur a move toward the $44.66 measured support line according to Bloomberg technician Sejul Gokal. West Texas Intermediate for July delivery, which expires Tuesday, was down 90 cents at $43.30 a barrel, the lowest since Nov. 14, having dropped as low as $43.22. The more-active August contract fell 85 cents to $43.58. Trading volume +61% vs 100-day average. August Brent dropped -87c to $46.04/bbl; sliding as much as $1.06 to $45.85, lowest since Nov. 18. Brent is trading at a premium of $2.45 to August WTI."It’s just ongoing negative market sentiment,” Commerzbank analyst Carsten Fritsch told Bloomberg. “The trend is your friend” unless of course you are a bull. Fritsch added that the market would need “a massive bullish surprise” from inventory data this week for sentiment to reverseAmong the reasons cited for the drop by Bloomberg, none of which are new, is that Libya is pumping the most crude in four years after a deal with Wintershall AG enabled at least two fields to resume production. Additionally, offshore stores is rising with the amount of oil stored in tankers reached a 2017 high of 111.9 million barrels earlier this month, according to Paris-based tracking company Kpler SAS. With traders again storing more crude at sea amid swelling production in the Atlantic region and a widening contango, this confirms the market is far from rebalancing.Ahead of tomorrow's EIA report, consensus is that U.S. inventories probably shrank by 1.2 million barrels last week. Look for an API headfake after today's close. Crude stockpiles remain more than 100 million barrels above the five-year average, according to data from the EIA. American production has climbed to 9.33 million barrels a day through June 9, near the highest since August 2015.

    Is $40 Oil On The Horizon? - Oil prices broke fresh seven-month lows on Tuesday, with WTI dropping below $44 per barrel and Brent dipping below $46. Renewed and heightened pessimism over the pace of rebalancing has sunk in as OPEC is struggling to induce inventory drawdowns. U.S. shale continues to grow production and Libya is also adding large volumes of supply back onto the market at the worst possible time. The North African OPEC member is now producing 900,000 bpd and is aiming to top 1 million barrels per day by next month.  The Wall Street Journal reports that most in the oil industry are resigned to low prices for years to come, recognizing that a range of $50 to $60 might be a semi-permanent equilibrium. After going through rough waters in the early part of the downturn – between 2014 and 2015 – which saw the bankruptcies of an estimated 105 oil producers and 120 oilfield service companies, the survivors are settling in to turn a profit at today’s prices. Some drillers are actually hoping that oil does not return to $100 per barrel for fear of sparking another boom and bust.  Oil producers are no longer hedging their production because prices have fallen too much. As a result, major consumers are the ones now doing the hedging. Bloomberg reports that options prices are now being driven by airlines and shippers hoping to lock in cheap fuel. “This is a significant shift in the relative producer-consumer hedging behavior,” David Schenck, a cross-commodity strategist at Societe Generale, said in a note. “While consumers may try to lock in low prices, most producers will simply refuse to lock-in loss-making prices.”  A flurry of security events took place in the Middle East on Monday, raising fears of an escalating political crisis that has been described as the worst in decades. Iran launched missiles into Syria, targeting ISIS. It was the first Iranian military attack in another country in three decades. Also, the U.S. shot down a Syrian government plane, a move that sparked a warning from Russia. Russia said any U.S. plane flying west of the Euphrates River would be treated as a target. Meanwhile, Saudi Arabia said it has detained three members of Iran’s Revolutionary Guard Corps, which it says was approaching the Saudi offshore oil field of Marjan. The events come as tensions have spiked over the suspension of diplomatic relations with Qatar. There is a lot going on, but for now, the oil markets are shrugging off the tension. In the past, events like these would cause an immediate price spike of a few dollars per barrel. But with oil inventories at record levels, traders are hardly worried about a disruption.

    WTI/RBOB Unch After API Signals Another Week Of Product Builds - With WTI/RBOB prices tumbling to 7-month lows intraday (not helped by Libya production), oil bulls hope for a bounce after API is not coming true despite a bigger than expected crude draw, both gasoline and distillates saw notable builds and oil prices could not make their mind up. API

    • Crude -2.72mm (-1.2mm exp)
    • Cushing -1.269mm
    • Gasoline +346k (+500k exp)
    • Distillates+1.837mm

    At a time when Gasoline demand should be rising and inventories dropping - neither happened the last two weeks and once again, according to API, gasoline built (as did distillates)... Libya pumps most oil since 2013 as Wintershall fields resume (and Nigeria production rising) did not help...but the machines could not make their minds up after the API data...

     OPEC, non-OPEC compliance with oil cuts hits highest in May: source -- OPEC and non-OPEC oil producers' compliance with a deal to cut global output has reached its highest in May since they agreed on the curbs last year, reaching 106 percent last month, a source familiar with the matter said on Tuesday. OPEC compliance with the output curbs in May was 108 percent, while non-OPEC compliance was 100 percent, the source said. Another source confirmed compliance by all producers in May was 106 percent. "This is the highest compliance since the beginning of the deal," one of the sources said. The Organization of the Petroleum Exporting Countries and allies agreed to cut supply by about 1.8 million barrels per day (bpd) starting in January to get rid of a supply glut. A technical committee of OPEC and non-OPEC producers met in Vienna on Tuesday to monitor compliance with the pact. The producers agreed at a May 25 meeting to extend the accord until March 2018. But oil has declined sharply since then, with Brent crude falling to a seven-month low near $45 a barrel on Tuesday on persistent over-supply concerns. With recovering production from Nigeria and Libya - OPEC members exempted from supply cuts due to losses caused by unrest - adding to supplies, some OPEC delegates are questioning whether the agreement is enough. But oil ministers, including Saudi Energy Minister Khalid al-Falih, are of the view that the market is heading in the right direction and needs time to rebalance.

    Bank Of America: Expect $30 Oil -- Oil prices hit on Tuesday their lowest levels since mid-November last year, with WTI entering a bear market, and analysts now see the price of oil sliding further down to below US$40 and even into the US$30s, as rising output from Libya and Nigeria adds to the persistent concerns over global oversupply.As of 2:21pm EDT, WTI Crude had tumbled 3.11 percent to US$43.05, while Brent Crude had plunged 2.79 percent at US$45.60.According to analysts, the slide will continue, and oil prices could drop to levels they hadn’t seen in more than a year.“Oil is in a downtrend and risks trending into the $30's,” Paul Ciana, a technical strategist at Bank of America Merrill Lynch, said in a note on Tuesday, as quoted by Business Insider.  Oil prices have now dropped to the levels they traded before OPEC and 11 non-OPEC producers agreed to a production cut deal in an effort to kill the glut and push prices up. The nine-month extension to the deal, until March 2018, failed to lift oil prices, with analysts and traders questioning if OPEC’s cuts have had or would have an effect on global supply, given the U.S. shale resurgence, rising output from other producers that are not part of the deal, and increased production within OPEC, where exempt Libya and Nigeria, and non-complying Iraq, have recently increased output.

    US oil falls 3%, hits lowest level since August - Oil prices fell on Wednesday despite a larger-than-expected decline in U.S. crude and gasoline inventories, as investors remained concerned about high global crude output and the nagging supply glut. Brent crude futures fell $1.43 at $44.59 a barrel. U.S. crude futures fell $1.24 to $42.47, briefly falling 3 percent, a 10-month low. The U.S. Energy Information Administration said crude inventories declined by 2.5 million barrels, exceeding expectations for a 2.1 million-barrel drop. This data supported prices only briefly. "Updated inventory balances don't represent a game changer," "Particularly while lower 48 crude production rose 25,000 barrels per day." Iranian oil minister Bijan Zanganeh said OPEC members were considering deeper cuts in output, but should wait until the effect of the current level of production was clear. Other delegates were said to be skeptical of such measures. "Market fundamentals have not changed," said Abhishek Kumar, senior energy analyst at Interfax Energy's Global Gas Analytics in London. "U.S. crude and gasoline stockpiles are significantly higher compared with their five-year averages, which will weigh on prices. Meanwhile, oil output in the country is still rising." So far this year, oil has slid 20 percent, its weakest performance since 1997 for the first half of the year, a period when oil has tended to perform well. Brent has risen in the first half of the year in all but six years over that period. 

    WTI/RBOB Pump'n'Dump After Gasoline Build, Production Surge - Following API's reported build in gasoline (and distillates), oil prices have chopped around amid Saudi headlines and OPEC jawboning, as all eyes are focused on gasoline inventories in the DOE report. An unexpedted draw in Gasoline (and Crude draw) sent prices higher initially, but another surge in production capped some of the gains and prices fell back. API:

    • Crude -2.72mm (-1.2mm exp)
    • Cushing -1.269mm
    • Gasoline +346k (+500k exp)
    • Distillates +1.837mm


    • Crude -2.45mm (-1.2mm exp)
    • Cushing (-579k exp)
    • Gasoline -578k (+500k exp)
    • Distillates +1.08mm (+500k exp)

    Opposing API's reported build,. DOE reports a Gasoline draw in the last week (while distillates built for the 4th week) and crude drew more than expected... Crude exports fell to the lowest level this year, at 517k barrels a day. But notably, Gasoline inventories dropped in the face of a big surge in gasoline imports...

    Cheaper gasoline should give limited boost to U.S. fuel consumption: Kemp - (Reuters) - Cheaper gasoline prices should spur an increase in driving in the United States and provide a limited boost for gasoline consumption over the summer, after a slow start to the year.Gasoline consumption depends on the volume of traffic (vehicle-miles travelled) and the average fuel-economy of the cars on the road.Traffic volume in turn depends on demographic and economic factors (population, household formation, car ownership, urbanisation, average incomes and employment) and to a more limited extent gasoline prices at the pump.Gasoline prices influence fuel consumption primarily through consumer choices about fuel-economy when purchasing new vehicles and choices about the amount of discretionary driving.Rising gasoline prices tend to be associated with slower growth in traffic volumes and slower growth in gasoline consumption (as measured by the volume of gasoline supplied to domestic U.S. customers).Experience shows that prices have a relatively small impact on traffic and gasoline consumption (although the precise relationship remains fiercely controversial among researchers).  As a rough approximation, changes in traffic volume and fuel consumption are an order of magnitude smaller than price changes. The slump in gasoline prices between the middle of 2014 and early 2016 coincided with a marked acceleration in the growth of both vehicle-miles travelled and fuel consumption (  The rate of growth in both miles-driven and gasoline consumption slowed during the second half of 2016 and the first two months in 2017. More recently, however, gasoline prices have stabilised and even fallen, which should remove one of the factors inhibiting gasoline consumption growth.

    Oil recoups some recent losses following a second-straight weekly fall in U.S. supplies - Oil finished modestly higher Thursday, with a second weekly decline in U.S. crude supplies helping prices recoup some of their recent losses. But prices were still stuck in a bear market, defined as a decline from a recent peak of at least 20%, on lingering worries about strong domestic production growth. August West Texas Intermediate crude advanced 21 cents, or 0.5%, to settle at $42.74 a barrel on the New York Mercantile Exchange. It fell 2.3% on Thursday to $42.53, the lowest most-active futures price settlement since Aug. 10, according to FactSet data. Brent crude for August delivery on London’s ICE Futures exchange added 40 cents, or 0.9%, to $45.22 a barrel. Prices fell Wednesday as data from the Energy Information Administration showed a weekly climb in U.S. crude production, feeding concerns that efforts by other major producers to cut down global supplies down to a five-year average will fail. The report, however, also showed that crude stockpiles declined for a second week in a row. Tariq Zahir, managing member of Tyche Capital Advisors, said he believes oil prices “can get weaker or at least we feel rallies will be sold into” because of several reasons, including a continued rise in U.S. production, poor demand for gasoline and gains in active U.S. oil-rig counts.On Nymex Thursday, July gasoline tacked on 2.4 cents, or 1.7%, to $1.435 a gallon and July heating oil added under a cent, or 0.5%, to $1.372 a gallon. Data show U.S. shale-oil producers churning out 9.35 million barrels last week, almost 8% higher than the same period last year. While production growth rates showed signs of petering, the data reaffirmed market fears that U.S. producers have become more efficient to weather low prices. 

    Oil traders hunt for shale's pain threshold: Kemp (Reuters) - Crude prices are likely to remain under pressure until there are signs the number of rigs drilling for oil in the United States is stabilising or reversing lower. U.S. exploration and production firms have hired 530 extra drilling rigs since the end of May 2016 - 431 to target oil and 99 to focus on gas - according to oilfield services firm Baker Hughes. As a result, U.S. crude and natural gas liquids production is forecast to increase by 780,000 barrels per day (bpd) in 2017 and by more than 1 million bpd in 2018, according to the U.S. Energy Information Administration (EIA).  The prospect of a renewed rise in OPEC output and global oil inventories during 2018 has thrown oil prices onto the defensive over the last four months. A continued rise in U.S. output during the rest of this year is unavoidable given the large number of extra rigs put to work in the first half. The lag between spudding a new well and first commercial production averages about six months, so extra rigs in the first half will ensure continued growth in output during the second half. But the fall in prices, if sustained, will eventually cause the rig count to stabilise, curbing growth in output next year. The breakeven price for drilling new wells varies considerably among shale plays and even between different parts of the same play. But a recent survey of producers in the major shale plays conducted by the Federal Reserve Bank of Dallas showed most needed U.S. crude prices of $45-50 to break even (“Dallas Fed Energy Survey”, March 29.  West Texas Intermediate (WTI) crude prices have already declined more than $11 per barrel, over 20 percent, since their recent peak and are now below $44 per barrel. Exploration and production firms have added an extra 145 oil-focused rigs in the last 16 weeks even as WTI prices have fallen. ( the oil rig count typically responds to changes in WTI prices with an average lag of 15-20 weeks so it should stabilise and turn lower within the next four weeks ( and Until the rig count starts to stabilise, however, oil traders are likely to continue driving prices lower to try to uncover the pain threshold that forces shale firms to scale back drilling. 

     OPEC mulls deeper cuts due to higher than expected US oil output: Zanganeh -- OPEC countries are discussing deepening their production cut agreement, Iran oil minister Bijan Zanganeh said Wednesday, even as some members say the recent extension of the deal needs more time to play out. "The US oil production increase was unpredictable and this increase is more than what OPEC members had foreseen," Zanganeh was quoted as saying by state broadcaster IRIB news agency. "We are in consultation with OPEC members to prepare ourselves for a new decision. But making a decision in this organization is very difficult because any decision will mean an output cut by the members." Zanganeh, speaking on the sidelines of a cabinet meeting, said he personally felt that OPEC should "wait a while and see how the market will form." Some members "believe that it's not [been] long since OPEC decided to cut production, and the impact of this decision has not practically kicked in in the market yet," he added. A meeting of the OPEC/non-OPEC Joint Ministerial Monitoring Committee is scheduled in Russia in late July, with the exact venue and date still to be determined. The committee, composed of ministers from Kuwait, Russia, Venezuela, Algeria and Oman, is empowered to recommend further cuts or any other adjustments to the deal, as it sees fit, officials have said. Saudi energy minister Khalid al-Falih and Russian energy minister Alexander Novak, who represent the largest producers in the OPEC/non-OPEC coalition, have said in recent days that they saw no need to change the production cut agreement, with stock drawdowns expected to accelerate in the next three to four months.

    Is There Still Hope For Higher Oil Prices? Oil prices have cratered in recent weeks, dipping to their lowest levels in more than seven months and any sense of optimism has almost entirely disappeared. All signs point to a period of “lower for longer” for oil prices, a refrain that is all too familiar to those in the industry.WTI dipped below $44 per barrel on Tuesday, and the bearish indicators are starting to pile up.Libya’s production just topped 900,000 bpd, a new multi-year high that is up sharply even from just a few weeks ago. Libyan officials are hoping that they will hit many more milestones in the coming months. Next stop is 1 million barrels per day (mb/d), which Libya hopes to breach by the end of July. U.S. shale is arguably the biggest reason why prices are floundering again. The rig count has increased for 22 consecutive weeks, rising to 747 as of mid-June, up more than 100 percent from a year ago. Production continues to rise, with output expected to jump by 780,000 bpd this year, according to the IEA. Ultimately, the shale rebound appears to havekilled off yet another oil price rally, the latest in a series of still-born price rebounds since the initial meltdown in 2014.Hedge funds and other money managers slashed their bullish bets on crude oil futures in the latest data release. Sentiment is profoundly pessimistic at this point, and because the IEA, OPEC and EIA recently published very downbeat assessments about the pace of rebalancing, a grim mood will be sticking around for a little while. The next reports from those energy watchers won’t come out for almost another month.In the meantime, the weekly EIA data on production and inventories will have outsized importance, mainly because it is one of the few concrete indicators that comes out on a routine basis. Analysts are now worried that a string of bearish data could push prices down even further. "We cannot afford to have another build in crude or gasoline," Bob Yawger, director of futures at Mizuho Securities USA Inc., told Bloomberg before the latest data release. "The market’s just dying for a reason to buy this thing, but you can’t really do that before" the EIA publishes its next batch of weekly data on Wednesday. Gasoline demand also looks weak, just as the summer driving season in the U.S. gets underway, a period of time that typically sees demand rise.

    WTI Crude Tops $43 After More Noise From Saudi 'Officials' -- The machines are stil programmed to insta-bid on any and every headline from "Saudi officials" it would appear... even if the effects are fading in their efficacy. As Citi notes, WSJ headlines explain the uptick in oil, suggesting that Saudi is targeting a $60 barrel oil price for its bigger picture strategy...  While that reads well and all, Citi notes that the full story concludes that Saudi's leverage might be limited unless it shows other OPEC members that it too will take on a large share of the production cuts.

    Natural-gas prices pare gains as U.S. supplies rise more than expected - Data from the U.S. Energy Information Administration Thursday showed that domestic supplies of natural gas rose by 61 billion cubic feet for the week ended June 16. Analysts surveyed by S&P Global Platts forecast a build of 58 billion cubic feet. Total stocks now stand at 2.770 trillion cubic feet, down 324 billion cubic feet from a year ago, but 207 billion cubic feet above the five-year average, the government said. July natural gas NGN17, +0.17% up a penny, or 0.4%, from Wednesday's settlement to $2.903 per million British thermal units. It traded at $2.917 before the data.

    COLUMN-Oil market flashes warning about stock levels in 2018: Kemp (Reuters) - Oil traders have become increasingly doubtful that OPEC will manage to cut crude stocks down to the five-year average in 2018 and keep them there.Calendar spreads for Brent futures throughout the rest of 2017 and 2018 have weakened significantly since OPEC agreed to roll over its production allocations at the end of May.Calendar spreads (price differences between futures contracts for delivery in different months) are closely linked to the expected level of oil inventories.Physical traders and refiners use spreads to hedge oil stored at tank farms and refineries as well as onboard ships in transit or acting as floating storage.But spreads can also be used by traders and specialist hedge funds to speculate on the level of global oil stocks in future.High and/or rising inventories are normally associated with a contango structure, where the price for oil delivered in future is higher than for immediate delivery.Low and/or declining global inventories are normally associated with a backwardation, where the price for future deliveries is below the spot price.  The shift in Brent spreads between contango and backwardation has mirrored the build up and draw down in inventories since the 1990s.  Brent spreads have therefore become one of the favourite ways for speculative traders to express a view on the outlook for oil production, consumption and stocks.Spreads for the remaining months of 2017 have moved into an increasingly wide contango since May 25 ( for 2018 have seen an even more startling move from a small backwardation into a broad contango over the same period ( May 24, the day before OPEC last meeting, Brent futures for December 2017 were trading at a premium of 99 cents per barrel over contracts for December 2018. By June 21, December 2017 futures were trading at a discount of $2.69, a shift in the spread of more than $3.50 per barrel in less than a month (

    Nigeria's cut exemption at risk from oil revival -Nigerian oil output has recovered to its highest level in more than a year as militant attacks have declined substantially, along with the return of key export grade Forcados. Including crude and condensate, output from OPEC's biggest African producer plummeted to near 30-year lows of around 1.2 million b/d in 2016, from 2.2 million b/d previously, as attacks on oil facilities in the Niger Delta rose at an alarming pace due to resurgent militancy. But Nigerian crude oil production in May jumped to 1.73 million b/d, up 80,000 b/d from April, its highest level since March 2016, according to the most recent S&P Global Platts OPEC survey. Since then, the Forcados restart has boosted flows and production is expected to increase even further this summer, according to recent loading programs. Exports of crude oil and condensate are set to jump to over 2 million b/d in August, making it the longest loading program in 18 months, according to Platts estimates. With output of crude and condensate now near its full capacity of 2.2 million b/d, Nigeria, which is exempt from the current OPEC cuts, could be asked to join the deal if the recovery continues. In late May, the country's oil minister Emmanuel Kachikwu acknowledged that Nigeria has a "responsibility" to join in the OPEC-led output cuts should its crude production return to 1.8 million b/d. With Nigeria's production of condensate averaging around 300,000-400,000 b/d, it looks like this milestone might be hit sooner than he and his government expected. 

    OPEC Has Few Escape Routes From Another Bear Market in Oil --Oil’s back in a bear market and investors remain unmoved by last month’s agreement to prolong supply cuts, leaving OPEC and its allies with few remaining tools to boost prices. As Saudi Arabia, Russia and their allies reduce output, supply that’s beyond their control keeps rising. Libya and Nigeria -- OPEC members exempt from the curbs -- and U.S. shale producers are resurgent, undermining efforts to tame a global glut. Prices are back below where they were when the Organization of Petroleum Exporting Countries first struck its historic deal last year. Cutting even deeper -- an idea rejected just a month ago -- still looks unlikely. For now at least, the Saudi pledge to do “whatever it takes” to stabilize prices looks like not much at all. Further curbs could be necessary, but reaching a consensus will be difficult, Iran’s Oil Minister Bijan Namdar Zanganeh said Wednesday on state radio. A committee meeting in Vienna this week gave only cursory attention to the possibility of deepening the existing cuts, according to delegates familiar with the matter, focusing instead on the problem of rising output in Libya and Nigeria. Russia has indicated on several occasions that it’s opposed to any additional reductions, said one delegate. “Deepening the cuts is one good option” for OPEC’s immediate difficulties, but would create longer-term problems, said Hasan Qabazard, the former head of research at the group. “This will come at the expense of OPEC’s market share. Do they want to lose share? I don’t think so, because many countries have invested in raising capacity recently." 

    Oil Markets Unmoved By Brewing Conflict In The Middle East - The political standoff in the Middle East between Qatar and other powers in the Middle East enters its third week, and the conflict shows no signs of abating.On June 5, Saudi Arabia, Egypt, the UAE and Bahrain cut diplomatic ties with Qatar and also tried to close off entry to Qatar by land, sea and air. They argued that Qatar is a major funder of terrorism.U.S. President Donald Trump backed the move. “The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level, and in the wake of that conference, nations came together and spoke to me about confronting Qatar over its behavior,” Trump said on June 9. “I decided, along with Secretary of State Rex Tillerson, our great generals and military people, the time had come to call on Qatar to end its funding -- they have to end that funding -- and its extremist ideology in terms of funding.”Of course, there is much more to the spat than Qatar’s terrorism links – the tension between Qatar and Saudi Arabia goes much deeper. Qatar supported the Arab Spring uprisings in 2011, sparking the intense ire of the various monarchies and authoritarians in the region. Qatar has a friendly relationship with Iran, a major rival of Saudi Arabia. There is also just a plain old competition for power in the region. Needless to say, it’s complex.Tensions are heating up. In a show of force, Qatar held military exercises on June 19 with Turkish troops.As is often the case with the Trump administration, there have been mixed signals from Washington. President Trump has strongly supported the isolation of Qatar over its alleged funding of terrorism, ignoring the fact that although the relationship is complicated, Qatar is an ally of the U.S. in many ways. Not only does the U.S. have a large military base in Qatar, Qatar is also home to the U.S.’ regional Central Command headquarters. The location is critical to the U.S.’ campaign to fight ISIS, among other security objectives. Moreover, the Pentagon just signed off on a $12 billion weapons deal to Qatar last week. Shortly after Trump’s public comments, the Pentagon felt the need to issue a statement thanking Qatar for hosting 10,000 U.S. troops.

     OilPrice Intelligence Report: All Eyes On OPEC As Oil Prices Sink: Oil prices hit ten-month lows this week, pushing crude oil well into bear market territory. Hopes of the OPEC deal balancing the market are fading fast. The plunging price took a breather on Thursday and Friday, hovering at the lowest levels since the third quarter of 2016. There is a growing consensus that the OPEC cuts won’t be enough to drain inventories, so there are murmurings about the possibility of deeper cuts.  Iran’s oil minister suggested the idea on state radio earlier this week. But that seems like a remote possibility at this point. Russia has previously dismissed the idea, and very few other producers have shown any interest. The prospect of deeper cuts would help prices but also cede even more OPEC market share to rival drillers. As a result, OPEC is likely to let the market sort itself out for the time being. Meanwhile, the head of Macquarie predicts that the agreement will expire and fall apart at the end of the compliance period in March 2018. "We actually see this OPEC agreement breaking up towards the middle of next year. In that case, we're going to see a huge amount of extra oil on the market next year," Macquarie’s head of European oil and gas research, Ian Reid warned. Oil prices falling to the low-$40s has raised a number of questions about the viability of U.S. shale below the $40 threshold. Mathew Kaleel of Janus Henderson told CNBC that shale production below $40 per barrel is “problematic,” and that a lot of it would be “loss-making.” Other analysts agreed with that sentiment, while also predicting that there is a good chance prices dip below the $40 threshold soon. At the same time, Kaleel noted that prices would have to move higher in the medium-term to encourage more production.

    US Oil Rig Count Rises For 23rd Straight Week But High Costs Drive Investors Out Of The Permian -- The number of oil rigs in America has now risen for 23 straight weeks (and 50 of the last 52 weeks), up 11 to 758 in the last week - the highest since April 2015. "It’s becoming bearish mania," said Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago. "If we keep going down, we’re not going to be adding rigs in a few months, we’re not going to be adding production"  And we suspect, given the lagged reaction to prices, that inflection point in rig counts is close... And the last chance for the week for the bulls just left... US crude production (in the Lower 48) has been on a tear (with one brief interruption) tracking the lagged rise in rig counts almost perfectly... And the rising rig count has been driven mainly by The Permian... But as Oil & Gas 360 notes, high acreage costs beginning to affect economics in the Delaware, driving investors away from The Permian. The Permian has enjoyed a rush of capital since oil prices began to recover from a low of $26.21 in February of last year.The play is home to some of the best economics in the country, making it a prime target for E&P companies looking to maximize profit in a lower price environment. But the surge in land costs is leaving little room for new investors to profit.The Delaware basin, the Permian’s hottest zone, is beginning to become a victim of its own success. EnerCom Analytics’ well economic models indicate that the internal rates of return (IRRs) in the Delaware are now lower than those seen in the Midland due to the high cost of land.At $45 WTI, EnerCom’s well economics models show IRRs in the Midland of 22.8 percent compared to 21.5 percent in the Delaware when acreage costs are included in the equation. The cost per-acre in the Delaware is 65 percent higher than in the Midland at an average of $33,000 per acre.) Economics in every basin are expected to see pressure as oil prices remain in the low- to mid-$40 range and oilfield service providers, who are in high demand for well completions and drilling, look to increase their prices. Combined with the high premiums in the Permian, this barrage of pressuring factors is making it more difficult for new investors to enter the play, and those with exposure are beginning to pull back. Service costs are expected to increase between 10 percent and 15 percent, according to EnerCom Analytics, with some E&P companies saying they could increase as much as 20 percent. In EnerCom’s March Energy Industry Data & Trends, the firm found that most basins could absorb even the high-end of those estimates at $50 per barrel WTI, but with prices floating around $45 per barrel, it will be much more difficult for E&Ps to continue generating 20 percent IRRs or better.

    U.S. Oil Producers Won't Stop Drilling: Baker Hughes Rig Count Up 11 - Commodity prices have faltered, yet U.S. oil and natural gas producers continue to bolster drilling activity, adding eight more rigs over the course of the past week to bring Baker Hughes' official tally to 941.  In the 23rd consecutive week of U.S. rig additions, the oil rig count rose by 11 to 758, while the natural gas rig count fell by three to 183. Offshore rigs remained level at 22 and are up one year over year. The U.S. rig count is up 520 rigs year over year when it stood at 421, with oil rigs up 428, gas rigs up 93 and miscellaneous rigs down one to zero.  Notably, the current drilling rig recovery represents the fastest industry recovery in history, G. Allen Brooks, a managing director of energy-focused investment bank PPHB, wrote in a report issued earlier this week.   But as Brooks pointed out, this recovery has not yet reached the levels of the recoveries of 1979 and 2009. And the current weakening of crude oil prices is likely to cut short the current recovery below levels reached in those earlier comebacks, he argued.  Still, oil prices have now fallen 20% year to date, and the count of drilling rigs has increased by 283 in that period.And what's perhaps worse for the oversupplied oil industry is that drilled but uncompleted wells, or DUCs, are now at 5,946, according to the U.S. Energy Information Administration, and they have been at record levels for the past two weeks, .As Seaport Global Securities reported earlier this week, though, oil prices hovering around $40 per barrel for an extended period of time could force U.S. producers to pull back. If they don't, the firm suggested the industry could face another period of commodity prices in the $20-per-barrel range early next year.West Texas Intermediate crude contracts for August delivery were up less than 1% to slightly more than $43 a barrel Friday around 1 p.m. ET "The current hedging numbers and declining crude prices indicate the rig count is going to need to slow at some point," Quigley wrote in an email to TheStreet. "Something's gotta give."

    Saudi Arabia's Mohammed bin Salman elevated to Crown Prince | Reuters: Saudi Arabia's King Salman made his son his successor on Wednesday, removing his nephew as crown prince and giving the 31-year old almost unprecedented powers as the world's leading oil exporter implements transformational reforms. A royal decree appointed Mohammed bin Salman crown prince and deputy prime minister. He retains defense, oil and other portfolios. It said Crown Prince Mohammed bin Nayef, a counter-terrorism chief admired in Washington for putting down an al Qaeda campaign of bombings in 2003-06, was relieved of all positions. Although Mohammed bin Salman's promotion was expected among close circles it came as a surprise at a time the kingdom is facing heightened tensions with Qatar and Iran and is locked in a war in Yemen. The royal decree said the decision by King Salman to promote his son and consolidate his power was endorsed by 31 out of 34 members of the Allegiance Council, made up of senior members of the ruling Al Saud family. Always intent on dispelling speculation of internal divisions in the Al Saud ruling dynasty, Saudi television was quick to show that the change in succession was amicable and supported by the family. Throughout the early morning it aired footage of Mohammed bin Nayef pledging allegiance to the younger Mohammed bin Salman who knelt and kissed his older cousin's hand.Analysts said the change ends uncertainty over succession and empowers Prince Mohammed bin Salman to move faster with his plan to reduce the kingdom's dependence on oil, which includes the partial privatization of state oil company Aramco. 

    Saudi Arabia's new crown prince and the outlook for the kingdom's oil sector -- Global Oil Markets podcast --Saudi Arabia's King Salman has appointed his son Mohammed bin Salman as his successor, giving the young prince a free hand to carry out his ambitious economic reforms. S&P Global Platts editors Adal Mirza and Tamsin Carlisle discuss what the announcement means for the kingdom's National Transformation Plan, which includes the sale of up to 5% of state-owned oil company Saudi Aramco through an IPO.

    Trump, new Saudi crown prince share hardline views on Iran but risks abound | Reuters: Saudi Arabia's new crown prince and likely next king shares U.S. President Donald Trump's hawkish view of Iran, but a more confrontational approach toward Tehran carries a risk of escalation in an unstable region, current and former U.S. officials said. Iran will almost certainly respond to a more aggressive posture by the United States and its chief Sunni Arab ally in battlefields where Riyadh and Tehran are engaged in a regional tussle for influence. Saudi King Salman made his son Mohammed bin Salman next in line to the throne on Wednesday, handing the 31-year-old sweeping powers, in a succession shake-up. Prince Mohammed, widely referred to as "MbS," has ruled out any dialogue with arch rival Iran and pledged to protect his conservative kingdom from what he called Tehran's efforts to dominate the Muslim world. In the first meeting between Trump and MbS at the White House in March, the two leaders noted the importance of "confronting Iran's destabilizing regional activities." But that could have unintended consequences, said some current and former U.S. administration officials. The greatest danger for the Trump administration, a longtime U.S. government expert on Middle East affairs said, was for the United States to be dragged deeper into the Sunni-Shi’ite conflict playing out across the Middle East, a danger that could be compounded by Trump’s delegation of responsibility for military decisions to the Pentagon.If the administration gives U.S. commanders greater authority to respond to Iranian air and naval provocations in the Gulf and Strait of Hormuz, things could easily spiral out of control, the official said. 

    Israel Deployed 18 Fighter Jets To Saudi Arabia To "Prevent A Coup": Fars --While according to the official narrative, the Saudi power transition on Wednesday, when King Salman bin Abdulaziz announced his decision to replace Crown Prince Mohammed bin Nayef bin Abdulaziz with his own son, Mohammed bin Salman, went smooth and by the numbers, what took place behind the scenes is more interesting.Here, events were decidedly more interesting, because as Fars News reports (so take it with a grain of salt), after the decision was announced, the Israeli air force sent 18 of its fighter jets, including F16-I, F15-CD and F16-CD, along with two Gulfstream aircraft, two tanker airplanes and two C130 planes, special for electronic warfare, to Saudi Arabia at the demand of the new crown prince bin Salman to block his cousin (bin Nayef)'s possible measures.On the surface, such close ties between the existing Saudi regime and Israel would appear a stretch, although it is far more plausible after this week's WSJ report that when it comes to the Saudi proxy war, Israel and Saudi Arabia had been alligned from the onset of the Syrian conflict, with Israel secretly supplying Syrian rebels near its border with cash as well as food, fuel and medical supplies for years, "a secret engagement in the enemy country’s civil war aimed at carving out a buffer zone populated by friendly forces."  If true, the Fars report would be rather striking because, in addition to other geopolitical implications, Israel and Saudi Arabia do not have formal diplomatic relations.

     Saudi Arabia eases austerity just as oil prices decline: Kemp (Reuters) - Saudi Arabia’s decision to reverse some of last year’s austerity measures coincides with a renewed decline in oil prices and complicates the financial and economic outlook for the kingdom.All allowances, bonuses and financial benefits for civil servants and military personnel cancelled, amended or suspended in September 2016 have been restored and backdated by a royal decree issued by King Salman ("Saudi Arabia slashes ministers' pay, cuts public sector bonuses", Reuters, Sept. 26, 2016). The decision coincides with the alteration of the succession in favour of the king’s son Mohammad bin Salman and relieves the previous crown prince of all his posts.The distribution of largesse to coincide with changes in the succession is common in monarchical systems to cement loyalty to the ruler and the chosen heir.Saudi successions have normally been accompanied by generous financial packages for employees on the government payroll and distributions have also been made at other times of political stress.The government has been gradually relaxing some austerity measures in recent months and signalling it would go further.The decision to pair the change in succession with a relaxation of austerity is not surprising but there are questions about its affordability in the medium term.Austerity measures were introduced by the government in response to the sharp drop in oil prices and revenues ( Arabia’s earnings from petroleum exports shrank to $134 billion in 2016, from $322 billion in 2013, the last full year before oil prices slumped (“Annual Statistical Bulletin”, OPEC, 2017).As spending outstripped income, the country’s foreign reserves were depleted by $116 billion in 2015 and another $81 billion in 2016, according to statistics from the Saudi Arabian Monetary Agency. Saudi Arabia’s official foreign assets have fallen by a third to $500 billion at the end of April 2017, from a peak of $746 billion in August 2014 (“Monthly Statistical Bulletin”, SAMA, April 2017).The combination of spending controls, increases in taxes and utility fees, and higher oil prices at the end of 2016 and in early 2017 narrowed the budget deficit and stemmed the depletion of reserves.But austerity has provoked complaints from Saudi citizens and a broad slowdown in the private-sector economy, which relies heavily on government spending and oil revenues as the ultimate source of almost all activity.

    Saudi Arabia's oil reserves jump on tax move ahead of IPO: Rystad - Saudi Arabia effectively grew its recoverable oil resources by 73 billion barrels this year after lower tax rates for state producer Saudi Aramco boosted the country's estimated prospective resources, Norwegian oil consultancy Rystad Energy said Tuesday. The new recoverable contingent resources took Saudi Arabia's total recoverable oil resources to 276 billion barrels, regaining the global top spot for oil resources, Rystad said in its annual review of global oil resources. Saudi Arabia cut Aramco's company tax rate to 50% in March from 85% as part of moves to attract private investors ahead of its planned initial public offering in 2018. "[Saudi Arabia's] revised fiscal regime should incentivize more aggressive exploration and development drilling in the country," Rystad said.The only other oil-producing countries to increase their reserves last were Kazakhstan and the US, Rystad said, citing its estimates for prospective resources which includes risked estimates from undiscovered fields. In the US, recoverable oil resources rose 13 billion barrels with unconventional shale oil making up over half of the country's total oil resources, estimated at 263 billion barrels. If natural gas liquids (NGLs) were included in the review, Rystad said the US would surpass Saudi Arabia by more than 50 billion barrels of recoverable oil and petroleum liquids. Globally, the world's total recoverable oil resources have risen 29 billion barrels since 2016 to 2.2 trillion barrels, Rystad said, or 73 times the current annual production rate.Rystad's baseline oil resources estimates use a broader definition of reserves than those from BP's wide-widely referred to estimates of produced oil reserves.BP estimated last week the world's total proven oil reserves stood at 1.7 trillion barrels at the end of 2016, based on recoverable oil from discovered fields under current economic conditions. Rystad's oil resources figures include proven and probable reserves as well as contingent reserves from unsanctioned projects and prospective recoverable resources.

    US-Led Coalition Shoots Down Syrian Army Aircraft – Reports - US-led anti-terrorist coalition has reportedly shot down a Syrian government forces' aircraft. Syrian Arab Army announced that the US-led anti-terrorist coalition had brought down its aircraft in southern Raqqa countryside, Syrian media reported citing a statement by the Syrian Defence Ministry.  According to the report, the Syrian jet fighter was carrying out military tasks fighting Daesh terrorist organization. “Our aircraft was downed at lunch time today near the [Syrian] city of Raqqa, when it was fulfilling its mission against the IS,” the ministry said in a statement, adding that the US-led coalition was responsible for downing the aircraft. The ministry noted that the coalition’s “actions are aimed at halting the Syrian army and its allies in the fight against terrorism, whereas our army and allies make great progress.”According to the ministry, the pilot of the aircraft has not been found to date.This is not the first time the US-led coalition's activities in Raqqa cause casualties. Syrian media reported earlier that at least 43 civilians were killed as a result of the US-led coalition airstrike in the region. The Syrian Foreign Ministry condemned the airstrikes and sent two letters the UN secretary general and the head of the UN Security Council, in which the coalition's actions were compared to Daesh crimes. Just a few days later, the Lebanese media reported that the coalition's airstrikes killed more than 30 civilians more near Raqqa.

    Russia warns US its fighter jets are now potential target in Syria -- The threat of direct Russian-American confrontation in Syria escalated on Monday after Moscow said it would treat any plane from the US-led coalition flying west of the Euphrates river as a potential target. Russia said it was responding to US planes shooting down a Syrian air force jet on Sunday. The US said its planes had acted to defend US-backed forces seeking to capture the Islamic State capital of Raqqa in north-east Syria. It was the first such US attack on a Syrian warplane since the start of the country’s civil war six years ago. Russia’s deputy foreign minister, Sergei Ryabkov, said the US strike “has to be seen as a continuation of America’s line to disregard the norms of international law. “What is this if not an act of aggression? It is, if you like, help to those terrorists that the US is fighting against, declaring they are carrying out an anti-terrorism policy.” The Russian foreign ministry also said it would respond to the attack by suspending its communications channel with US forces, which is designed to prevent collisions and dangerous incidents in Syrian airspace. The top US general, Joseph Dunford, sought to play down the repercussions of the incident, insisting the hotline established eight months ago between US central command in Qatar and its Russian equivalent in Syria was still open and functioning on Monday morning and would be used try to defuse the situation. “I’m confident that we are still communicating between the coalition operations centre and the Russian operations centre,” Dunford, chairman of the joint chiefs of staff told the National Press Club in Washington. “I think the worst thing any of us could do would be to address this with hyperbole.” He added: “I’m also confident that our forces have the capability to take care of themselves.” The Russian military threatened to close the hotline, known as the “deconfliction channel”, in April after President Trump ordered a missile strike against a Syrian air base allegedly involved in a chemical weapons attack. However, Moscow did not fulfill the threat and the channel remained open. 

     Australia Suspends Military Flights Over Syria, Citing "Potential Threats" From Russia --Russia’s Monday decision to suspend a memorandum of cooperation with the US-led coalition in retaliation after a US jet shot down a Syrian Army plane has rattled some US allies, who fear escalating tensions between Russia and the coalition. In what it called a "precautionary measure," Australia became the first coalition member to suspend flights in Syria, claiming it's too dangerous for its planes to fly without the agreement, according to BBC.“As a precautionary measure, Australian Defense Force (ADF) strike operations into Syria have temporarily ceased,” Australia’s Department of Defense said in a statement, adding its operations in Iraq would continue as part of the coalition.”“ADF personnel are closely monitoring the air situation in Syria and a decision on the resumption of ADF air operations in Syria will be made in due course.”“Australian Defense Force protection is regularly reviewed in response to a range of potential threats,” the Department of Defense said.Australia has deployed about 7 80 military personnel as part of the US-led coalition fighting the Islamic State in Iraq and Syria

    Pentagon working to re-establish 'deconfliction' line with Russia | TheHill: Chairman of the Joint Chiefs of Staff Gen. Joe Dunford on Monday said the United States will try “in the next few hours” to re-establish deconfliction arrangements between Russia and the United States following the U.S. downing of a Syrian military jet over the weekend. “An incident occurred, we have to work through the incident, we have a channel to be able to do that and I think it’s going to require some diplomatic and military engagement in the next few hours to restore the deconfliction that we’ve had in place,” Dunford said at a forum at the National Press Club in Washington. The deconfliction arrangement — first established with Russia in 2015 to avoid mid-air collisions in Syria as both sides fight militant groups — was broken after a U.S. Navy F/A-18E Super Hornet on Sunday shot down a Syrian warplane in the southern part of the Islamic State in Iraq and Syria's (ISIS) stronghold in Syria. The Pentagon said the strike — which happened after the U.S.-backed Syrian Democratic Forces (SDF) reportedly came under attack from forces in favor of Syrian President Bashar Assad — complied with the “rules of engagement” and was in self-defense. Dunford stressed that “the worst thing any of us can do right now is address this thing with hyperbole.” But the incident drew condemnation from Russia, a key ally of Assad. Dunford said the U.S. was still communicating with the Russians as of this morning despite the conflict. 

    US Jet Shoots Down Syrian Army Drone In "Dangerous Escalation" - A US F-15E fighter jet shot down a Syrian regime drone on Monday near At Tanf, Syria, the third downing of a pro-regime aircraft this month, CNN reported. The downing of the drone comes a day after a US jet shot down a regime aircraft that was engaging a fleeing ISIS convoy, according to the Syrian government. Here’s CNN:"The drone was downed just outside the 55 kilometer de-confliction zone, according to the officials.It was an Iranian-made Shahed 129 and was thought to be armed and in firing range of US troops.One official said that the drone was shot down because it was 'assessed to be a threat.'That drone was shot down after it dropped one of several weapons it was carrying near a position where coalition personnel are training and advising partner ground forces in the fight against ISIS."According to Fox News, this is the second time the US has shot down an Iranian drone in less than a month. It also marks the fifth time since late May the U.S. military has bombed pro-Syrian forces in southern Syria. Connecticut Sen. Chris Murphy described the attack as “a dangerous escalation" of tensions between the US and the main backers of the Syrian regime, Russia and Iran. Murphy told CNN that if the US doesn't stop the attacks, the situation could escalate into an armed conflict between the two sides, who both claim to be fighting ISIS.

    The US seems keener to strike at Syria's Assad than it does to destroy Isis | The Independent: The extraordinary destruction of a Syrian fighter jet by a US aircraft on Sunday has precious little to do with the Syrian plane’s target in the desert near Rasafa – but much to do with the advance of the Syrian army close to the American-backed Kurdish forces along the Euphrates. The Syrians have grown increasingly suspicious in recent months that most Kurdish forces in the north of Syria – many of them in alliance with the Assad government until recently – have thrown in their lot with the Americans. Indeed, the military in Damascus is making no secret of the fact that it has ended its regular arms and ammunition supplies to the Kurds – it has apparently given them 14,000 AK-47 rifles since 2012 – and the Syrian regime was outraged to learn that Kurdish forces recently received an envoy from the United Arab Emirates. There is unconfirmed information that a Saudi envoy also visited the Kurds. This, of course, follows the infamous Trump speech in Riyadh, in which the US President gave total American support to the Saudi monarchy in its anti-Iranian and anti-Syrian policies – and then later supported the Saudi-led isolation of Qatar. On the ground, the Syrian army is now undertaking one of its most ambitious operations since the start of the war, advancing around Sueda in the south, in the countryside of Damascus and east of Palmyra. They are heading parallel with the Euphrates in what is clearly an attempt by the government to “liberate” the surrounded government city of Deir ez-Zour, whose 10,000 Syrian soldiers have been besieged there for more than four years.If they can lift the siege, the Syrians will have another 10,000 soldiers free to join in the recapture of more territory. More importantly, however, the Syrian military suspects that Isis – on the verge of losing Raqqa to US-supported Kurds and Mosul to US-backed Iraqis – may try to break into the garrison of Deir ez-Zour and declare an alternative “capital” for itself in Syria. 

    Everything You're Not Being Told About The US War Against ISIS In Syria -- It’s time to have a sane discussion regarding what is going on in Syria. Things have escalated exponentially over the past month or so, and they continue to escalate. The U.S. just shot down yet another Iranian-made drone within Syrian territory on Tuesday, even as authorities insist they “do not seek conflict with any party in Syria other than ISIS.”Col. Ryan Dillon, chief U.S. military spokesman in Baghdad, seemed to indicate that the coalition would avoid escalating the conflict following Russia’s warning that it will now treat American aircraft as potential targets. He stated“As a result of recent encounters involving pro-Syrian regime and Russian forces,we have taken prudent measures to reposition aircraft over Syria so as to continue targeting ISIS forces while ensuring the safety of our aircrews given known threats in the battlespace.” So what is really going on in Syria? Is the U.S. actually seeking an all-out confrontation with Syria, Iran, and Russia? The first thing to note is that a policy switch under the Trump administration has seen the U.S. rely heavily on Kurdish fighters on the ground as opposed to the radical Gulf-state backed Islamist rebels, which the U.S. and its allies had been using in their proxy war for over half a decade. Even the Obama administration designated the Kurds the most effective fighting force against ISIS and partnered with them from time to time, but Turkey’s decision to directly strike these fighters complicates the matter to this day. Further muddling the situation is the fact that the U.S. wants the Kurds to claim key Syrian cities after ISIS is defeated, including Raqqa. However, the reason this complicates matters is that, as Joshua Landis, head of the Middle Eastern Studies Center at the University of Oklahoma explains, the Kurds have “no money” nor do they have an air force. “[T]hey’ll be entirely dependent on the US Air Force from now to eternity, and the United States will be stuck in a quagmire, defending a new Kurdish state that America had partnered with to defeat [ISIL],” Landis said, as reported by Quartz.

    Caught On Video: Russian Ships, Sub Fire Cruise Missiles At ISIS Targets In Syria -- A little more than a week after launching the strike that reportedly killed ISIS leader Abu Bakr Al Baghdadi, Russian navy ships and a submarine launched six cruise missiles at ISIS targets in Syria’s Hama province, destroying an ISIS command center and ammunition depot,according to Russia Today. The missiles were launched from the eastern Mediterranean by Russian Navy frigates the Admiral Essen and the Admiral Grigorovich, the Defense Ministry said. The cruise missile strike follows a similar attack by Russian forces on May 31, when a nearly identical arrangement of Russian warships and a submarine also struck ISIS targets near Palmyra.  The strike hit a large ammunition depot near the town of Aqerbat, which detonated after being hit. Russia warned Israel and Turkey about the strikes via a military-to-military hotline.“[The ships] targeted an area east of Palmyra, where the militants’ heavy weaponry and manpower were located. The militants had moved there from Raqqa. All targets were destroyed,” the defense ministry said.The strike was launched after a large Islamic State convoy, comprising 39 vehicles and 120 militants, was spotted outside the city of Raqqa.

    Iran Launches Missile Strikes Against "Terror Bases" In Eastern Syria -- In a major escalation of the Syrian proxy war, Iran's Revolutionary Guard said it launched multiple missile strikes from IRGC missile bases in provinces of Kermanshah & Kordestan, targeting "terror bases" in Deir ez-Zor in eastern Syria in retaliation for ISIS-claimed attacks in Tehran.  Footage of the moment the IRGC fired the missiles is shown below:  As reporter Anshel Pfeffer observes, this is a "major development" and constitutes the "first operational use of mid-range missiles by Iran since war with Iraq."Major development. First operational use of mid-range missiles by Iran since war with Iraq.— Anshel Pfeffer (@AnshelPfeffer) June 18, 2017According to the AP, the "Guard's website as well as the Tasnim semi-official news agency, reported the strikes Sunday on Deir el-Zour, Syria. The Guard’s website said it launched surface-to-surface medium-range missiles targeting the area.  It did not immediately offer other specifics, other than to say the missiles were launched from Iran."Tasnim adds that the IRGC announced that a high number of terrorists have been killed by the IRGC missile attack at Deir ez-Zor.Such an attack is rare in Syria’s long-running civil war, in which Iran is backing embattled Syrian President Bashar Assad. The attack is reportedly in response to the previously reported attack in which five ISIS-linked terrorist stormed Iran’s parliament and a shrine to revolutionary leader Ayatollah Ruhollah Khomeini this month, killing at least 17 people and wounding more than 50. Iran blamed Saudi Arabia for the attack, claiming its support for ISIS terrorist had made it possible.  The launch takes place just hours after Iran held a joint naval drill with Chinese warship in the Straits of Hormuz, as reported previously.

    The Growing U.S.-Iran Proxy Fight in Syria -- On Sunday evening, a U.S. warplane shot down a Syrian jet after it bombed American-backed rebels in northern Syria.  Russia, for its part, angrily condemned the U.S. action and threatened on Monday to treat all coalition planes in Syria as potential targets. But the dangers are perhaps particularly acute when it comes to Iran, which made dramatic battlefield moves of its own on Sunday, when it launched several missiles from inside Iran against ISIS targets in eastern Syria. Officially, Iran’s Revolutionary Guards said the volley of missiles fired at Deir Ezzor province was a response to a pair of attacks by ISIS in Tehran on June 7, which killed 18 people and wounded dozens; the attacks marked the first time that ISIS had struck inside Iran. But the Iranian regime had several less-dramatic means to exact revenge against ISIS targets in Syria—after all, there’s no shortage of Iranian allies operating in the war-ravaged country. Instead, Iran’s fiery act of vengeance seemed to be a message aimed at both the Trump administration and Saudi Arabia. (The six ballistic missiles used by Tehran against ISIS, with a range of 700 kilometers, could reach major Saudi cities.) The kingdom has become emboldened regionally and escalated its anti-Iran rhetoric thanks, in part, to Trump’s message of seemingly unconditional support. At the same time, Trump’s apparent willingness to use military force against Syrian President Bashar al-Assad and his chief supporters risks sparking a widening confrontation, while distracting from what he insists is his top priority: defeating ISIS in Iraq and Syria. This, from a president who campaigned, in part, on a pledge to avoid direct U.S. involvement in the Syrian conflict. Now, Trump has become a major player in an exploding regional proxy war that could determine the Middle East’s post-war dynamics.

    Five takeaways from Iran’s missile strike in Syria | Asia Times: At its most obvious level, Iran’s missile attack on the Islamic State command centre in the Syrian city of Dier Ezzor on Sunday may be regarded as the demonstration of an extraordinarily innovative military capability. Iran says it fired six ground-to-ground missiles from Islamic Revolutionary Guards Corps (IRGC) bases in Kermanshah and Kurdistan provinces, both in Western Iran, and that they “hit the targets in Deir Ezzur with high precision after flying through the Iraqi airspace.” The footage shows that at least one of the missiles was of the Zolfaqar class and at least one more was of the Qiam class, both indigenously developed missiles. Zolfaqar is the latest generation of Iran’s mid-range missiles. It can hit targets up to 700 kilometres away and is capable of carrying a Multiple-Entry Vehicle payload. Qiam is a surface-to-surface cruise missile. From all accounts, the missiles hit their target with devastating precision. Simply put, Iran has notified the US that its 45,000 troops deployed in bases in Iraq (5,165), Kuwait (15,000), Bahrain (7,000), Qatar (10,000), the UAE (5,000) and Oman (200) are highly vulnerable. The Chief of Staff of Iran’s armed forces, Gen. Mohammad Hossein Baqueri, said on Monday: “Iran is among the world’s big powers in the missile field. They (read the US and its allies) don’t have the capability to engage in conflict with us at present, and of course, we don’t intend to involve in clashes with them, but we are in permanent rivalry with them in different fields, including the missile sector.”

     Saudi says captures three Iranian Revolutionary Guards from boat  (Reuters) - The Saudi navy has captured three members of Iran's Revolutionary Guard Corps (IRGC) from a boat seized last week as it approached the kingdom's offshore Marjan oilfield, the Saudi information ministry said on Monday. Relations between the two countries are at their worst in years, with each accusing the other of subverting regional security and support opposite sides in conflicts in Syria, Yemen and Iraq. "This was one of three vessels which were intercepted by Saudi forces. It was captured with the three men on board, the other two escaped," a statement from the ministry's center for international communications said. "The three captured members of the Iranian Revolutionary Guard are now being questioned by Saudi authorities," it said, citing a Saudi official. The vessel, seized last Friday, was carrying explosives and intended to conduct a "terrorist act" in Saudi territorial waters, it said. An earlier report from the Saudi Press Agency said the Saudi navy had fired warning shots at the two boats that managed to escape. Iran's Tasnim news agency said on Saturday that Saudi border guards had opened fire on an Iranian fishing boat in the Gulf on Friday, killing a fisherman. It said the boat was one of two Iranian boats fishing in the Gulf that had been pushed off course by waves. Tensions between Iran and Saudi Arabia have steadily deteriorated. On June 5, Riyadh and other Arab governments severed ties with Qatar, citing its support of Iran as a reason.

    IS has 100,000 civilians as 'human shields' in Mosul's Old City: UN -(AFP) - The UN said Friday that Islamic State group jihadists may be holding more than 100,000 Iraqi civilians as human shields in the Old City of Mosul. Iraqi forces are fighting to retake Mosul from IS, after the jihadist group overran the city in 2014, imposing its brutal rule on its inhabitants. The UN refugee agency's representative in Iraq, Bruno Geddo, said IS had been capturing civilians in battles outside of Mosul and had been forcing them into the Old City, one of the last parts of the city in their grip. "More than 100,000 civilians may still be held in the Old City," Geddo told reporters in Geneva. "We know that ISIS moved them with them as they left… locations where the fighting was going on," he said, using another acronym for IS, which is also known as Daesh or ISIL. "These civilians are basically held as human shields in the Old City." With virtually no food, water or electricity left in the area, the civilians are "living in an increasingly worsening situation of penury and panic," he said. "They are surrounded by fighting on every side."

    ISIS Blows Up Historic Grand al-Nuri Mosque In Mosul - The Islamic State on Wednesday night destroyed the famous Grand al-Nuri Mosque located in Mosul, best known for its leaning minaret, known as the "hunchback" and one of Iraq’s most famous landmarks. The entire structure has been destroyed, Reuters reported on Tuesday, citing an Iraqi military statement. The mosque is where the Islamic State leader, Abu Bakr al-Baghdadi, ascended a pulpit in 2014 and declared a caliphate after his fighters took control of Mosul and swept through other areas of northern Iraq and Syria, according to the NYT.The landmark structure, which was built in the 12th century, had already been targeted by the Islamic State when it first occupied the Iraqi city in 2014.According to Radio Sawa's Zaid Benjamin, the photo below shows the remains of the structure after the explosion.Shortly after the military’s report, the terrorist group used its news agency to claim that the mosque had actually been destroyed by an American airstrike. The Pentagon has not yet commented.The destruction of the mosque and minaret, pictured on Iraq’s 10,000 dinar bank note, is another blow to the city’s rich cultural heritage and its plethora of ancient sites that h ave been damaged or destroyed during three years of Islamic State rule.

    Syrian "Rebels" In Turmoil After Qatar Crisis --The ongoing Qatar crisis has had an unexpectedly adverse outcome among the Syrian "rebels", in many cases formerly known as al-Qaeda, who expect the crisis between two of their biggest state backers - Saudi Arabia and Qatar - to deepen divisions in the opposition to President Bashar al-Assad. Together with Turkey and the United States, Qatar and Saudi Arabia have been major sponsors of the insurgency, arming an array of groups that have been fighting to topple Syria's Iran-backed president. However, in recent weeks the Gulf support has been far from harmonious, fuelling splits that have set back the revolt.Quoted by Reuters, Mustafa Sejari of the Liwa al Mutasem rebel group in northern Syria said "god forbid if this crisis is not contained I predict ... the situation in Syria will become tragic because the factions that are supported by (different) countries will be forced to take hostile positions towards each other.""We urge our brothers in Saudi Arabia and Qatar not to burden the Syrian people more than they can bear" he said magnanimously, when what he really meant is that he needs Saudis and Qatar on the same page so that the supply of weapons and cash can resume.To be sure, for the terrorists rebels the Qatar crisis comes at the worst possible time: the opposition to Assad has been losing ground to Damascus ever since the Russian military deployed to Syria in support of Assad's war effort in 2015. As Reuters adds Assad now appears "militarily unassailable", although rebels still have footholds near Damascus, in the northwest, and the southwest. These are unlikely to hold without a continued infusion of support from the feuding Gulf states. The splintering within the "fund flows" to rebels has further angered Saudi Arabia: in the fractured map of the Syrian insurgency, Qatari aid has gone to groups that are often Islamist in ideology and seen as close to the Muslim Brotherhood - a movement that is anathema to Saudi Arabia, the United Arab Emirates and Egypt. At the same time, Turkey, which has swung firmly behind Qatar in the Gulf crisis, has backed the same groups as Qatar in northern Syria, including the powerful conservative Islamist faction Ahrar al-Sham which in the past has cooperate with the al-Nusra front, also known as al-Qaeda.

    Qatar, US navy exercise wraps up amid PG tensions: The Qatari and US naval forces have concluded a three-day joint military exercise in the Persian Gulf in the wake of a recent move by a number of Arab countries to sever their diplomatic relations with Doha, and close their borders and airspace with the gas-rich kingdom. The vessels, which took part in the drill off Qatar's east coast, included gunboats as well as coastguard and supply vessels. Four ships from the US Navy had participated in the joint exercise. Two US Navy vessels arrived in Doha on Wednesday. The development came on the same day that the United States and Qatar have signed a deal for the purchase of F-15 fighter jets with an initial cost of 12 billion dollars. The aircraft purchase was completed by Qatari Minister of Defense Khalid al-Attiyah and his US counterpart Jim Mattis in Washington DC. The Pentagon said in a statement that the deal would “increase security cooperation and interoperability between the United States and Qatar.” Qatari Staff Commander Mohammed Desmal al-Kuwari said the joint naval exercise was requested by the US Navy “a few weeks back.” He added that military drills, involving Qatar and its allies, would continue.

    Qatar won't cut gas to UAE: Qatar Petroleum CEO | Reuters: Qatar will not cut off gas to the United Arab Emirates despite a diplomatic dispute and a "force majeure" clause in its contract, the chief executive of Qatar Petroleum told Al Jazeera network, two weeks after some Gulf Arab states severed ties with Doha. CEO Saad al-Kaabi said that although there was a "force majeure" clause in the agreement on the Dolphin gas pipeline, which links Qatar's giant North Field with the UAE, Qatar would not stop supplies for other reasons. "The siege we have today is a force majeure and we could close the gas pipeline to the UAE," he said. "But if we cut the gas, it does great harm to the UAE and the people of the UAE, who are considered like brothers ... we decided not to cut the gas now," he told the Doha-based channel in an interview aired on Sunday. The Dolphin gas pipeline links Qatar with the UAE and Oman and pumps around 2 billion cubic feet of gas per day to the UAE. The chief executive of Sharjah National Oil Corp said earlier on Sunday he did not expect flows of natural gas from Qatar to the United Arab Emirates to be interrupted by the diplomatic dispute in the region.

    Qatargas, Shell sign new five-year LNG deal from 2019 - Qatargas has agreed to sell 5.5 million mt of LNG to Shell, amid uncertain demand from its Asian long-term buyers and building diplomatic tensions with its trading partners in the Middle East. Under the sales and purchase agreement, the state-owned producer will supply Shell with 1.1 million mt/year of LNG over five years from 2019, according to a statement released by Qatargas Sunday. The LNG will be sourced from the Qatargas 4 project, a joint venture between Qatar Petroleum (70%) and Shell (30%), and delivered to the UK's Dragon LNG terminal and the Netherlands' Gate LNG terminal, where Shell has access. "This deal provides Qatargas with access to Shell's gas sales portfolio in the United Kingdom and continental Europe, as well as the flexibility to manage LNG deliveries to our global client portfolio," Qatargas CEO Khalid Bin Khalifa Al-Thani said. The agreement comes amid growing uncertainty over demand from Qatar's long-term buyers in northeast Asia. Close to one third of the LNG produced by Qatar, the world's largest supplier of the fuel, is now sold under spot or short-term deals, as rising global supplies have forced the exporter to offer buyers more flexible terms. And a big share of its existing contracts are due to expire by 2021, including 7 million mt contracted with Japanese utilities, which are seeking more control via shorter, more flexible agreements, amid growing competition from their newly deregulated downstream markets. Qatargas has also seen its LNG strategy affected by the recent diplomatic crisis in the Middle East, with four countries having broken diplomatic ties with Qatar, including two of its LNG customers, over claims it funds extremism and terrorism. Although the break in diplomatic ties has not been accompanied by a break in commercial relations, buyers may now attach a risk premium to Qatari LNG supplies, offering opportunities to other LNG producers, according to PIRA Energy, a unit of S&P Global Platts. Qatar exported 78.8 million mt of LNG in 2016, more than 30% of a total global supply of 257.8 million mt, according to Platts Analytics, and an increasing share of its production is being delivered to emerging Middle Eastern buyers, including Egypt, Jordan and the UAE.

    Doha yet to see demands from Riyadh and allies | Qatar News | Al Jazeera: Qatar has yet to see any demands from Saudi Arabia and its allies as they continue an embargo on the country, according to Sheikh Mohammed bin Abdulrahman Al Thani, Qatar's foreign minister.Kuwait is working to mediate the dispute between Gulf Cooperation Council (GCC) states that began nearly two weeks ago."So far Kuwait hasn't received any demands from any GCC nations or even a list of the so-called accusations," Sheikh Mohammed bin Abdulrahman said on Saturday in an interview with Qatar TV."We're just confused about what these demands could be. "The fact that they don't even have clear demands ready shows that all of their accusations are baseless."Saudi Arabia, the UAE, Bahrain, along with Egypt, cut diplomatic and transport ties with Qatar on June 5, accusing the flw country of supporting "extremism" and their regional ally Iran - charges that Qatar has repeatedly denied.The three Arab Gulf countries also ordered Qatari nationals to leave within 14 days, while Saudi, UAE and Bahraini citizens were also given the same timeframe to leave Qatar.They later issued a list of 59 people and 12 groups with links to Qatar, alleging that they have ties to "terrorism".The list included several prominent Qatari charities that carry out life-saving work across the Middle East and elsewhere, including in Syria, Yemen, Sudan and Palestine.

    Saudi Arabia demands Qatar shut down Al-Jazeera, cut ties with Iran | TheHill: Saudi Arabia and several other Arab nations have demanded that Qatar shutter the broadcasting network Al-Jazeera, cut diplomatic ties with Iran, and close Turkey's air base in the country, the Associated Press reported Thursday night. The list of demands was released by Kuwait, which is helping mediate the dispute. The list demanded that Qatar end all military cooperation with Turkey as well as an unspecified sum of money. According to the document, the country has 10 days to meet the list of demands. The U.S. has been pushing Saudi Arabia and the other nations to release their demands. The U.S. has been pushing Saudi Arabia and the other nations to release their demands. On Tuesday, the State Department said it was "mystified" that the countries had not been more forthcoming with demands after implementing the blockade. "The more the time goes by, the more doubt is raised about the actions taken by Saudi Arabia and the UAE," State Department spokeswoman Heather Nauert said. "At this point, we are left with one simple question: Were the actions really about their concerns regarding Qatar's alleged support for terrorism, or were they about the long-simmering grievances between and among the GCC countries?" she said, referring to the Gulf Cooperation Council.

    Qatar Won't Negotiate Under Saudi-Led Sanctions, Minister Says - Qatar has yet to receive formal demands from the Saudi Arabia-led group of Arab neighbors that imposed sanctions on the gas-rich country, and won’t bargain away what it sees as its sovereign rights, according to the foreign minister. “Negotiations should be done in a civilized way and should have a solid basis,” Mohammed Al Thani told reporters in Doha. “They have to lift the blockade and start negotiations.” Saudi Arabia, the United Arab Emirates and Bahrain severed diplomatic and transport links with Qatar on June 5, accusing their fellow Gulf Cooperation Council member of supporting terrorism. The move split families apart, disrupted trade, and threatens to alter long-standing geopolitical alliances. There are no signs of a quick resolution as the crisis enters its third week. Below are some highlights from  Al Thani’s briefing:

    • “Any crisis is resolved politically -- this has been our approach from the beginning. We prefer dialogue. Whether this is a crisis that involves Qatar directly or not. In regards to the mediators, there is only one, it is Kuwait.”
    • “Any enemy of theirs is called a terrorist” and they “now see Qatar as the key supporter of terrorism,” the minister said. “We see no basis for these accusations. If there was any evidence, they would have highlighted it. Fourteen days have passed with no evidence provided to us, although they are claiming that we have been doing what they are accusing us of for 20 years.”
    • “The internal front in Qatar is very solid. The Qatari people are loyal to their nation and emir. They are not affected by the false allegations they hear through the media.”
    • “We disagree with Iran on some areas that are related to the region, and we also disagree with it on areas that are related to the Gulf. Relations must be built on sound, positive pillars. It is a neighboring country and there has to be a positive dialogue. This is not just a Qatari policy but the whole GCC agreed on it, so no one can claim we have a deeper relationship with Iran.”
    • “The GCC country with strongest economic ties with Iran is the U.A.E., Qatar is the fifth. So how come we have special, bilateral relations with Iran? The GCC countries didn’t take similar measures to the ones taken against us, against Iran.”
    • “They are claiming we are violating the Riyadh Agreement which took place in 2014. The agreement has a clear arbitration mechanism -- which is to discuss any issue bilaterally. If it is not solved, it goes to the ministerial council for the GCC, and if it’s not solved there it goes to the summit to be sorted out.”
    • “Al-Jazeera is a Qatari affair. Qatar’s foreign policy on regional issues is Qatar’s affair, and we are not going to negotiate our own affairs. Anything is subject to negotiation when it relates to them, anything which doesn’t relate to them is not subject to negotiation.”

    Arab states issue ultimatum to Qatar: close Jazeera, curb ties with Iran | Reuters: Four Arab states that imposed a boycott on Qatar have issued an ultimatum to Doha to close Al Jazeera television, curb ties with Iran, shut a Turkish base and pay reparations, demands so far reaching it would appear to be hard for Doha to comply. Saudi Arabia, Egypt, Bahrain and the United Arab Emirates have sent a 13-point list of demands apparently aimed at dismantling their tiny but wealthy neighbor's two-decade-old interventionist foreign policy which has incensed them. Kuwait is helping mediate the dispute. A Qatari government spokesman said Doha was reviewing the list of demands and that a formal response would be made by the foreign ministry and delivered to Kuwait, but added that the demands were not reasonable or actionable. "This list of demands confirms what Qatar has said from the beginning – the illegal blockade has nothing to do with combating terrorism, it is about limiting Qatar’s sovereignty, and outsourcing our foreign policy," Sheikh Saif al-Thani director of Qatar's government communications office, said in a statement. A Qatar semi-government human rights body said the demands were a violation of human rights conventions and should not be accepted by Qatar. Foreign Minister Sheikh Mohammed bin Abdulrahman al-Thani had said on Monday that Qatar would not negotiate with the four states until economic, diplomatic and travel ties cut this month were restored. The countries that imposed the sanctions accuse Qatar of funding terrorism, fomenting regional unrest and drawing too close to their enemy Iran. Qatar rejects those accusations and says it is being punished for straying from its neighbors' backing for authoritarian hereditary and military rulers. The uncompromising demands leave little prospect for a quick end to the biggest diplomatic crisis for years between Sunni Arab Gulf states, regional analysts said.

    Arab States Issue 13 Demands To Qatar - Include Unfriending Iran, Shutting Down Al-Jazeera And Nixing Turkish Base --Two days after the US State Department formally inquired about WTF is going on between Arab States and Qatar, the countries of Egypt, Saudi Arabia, Baahrain, and the UAE sent a list of 13 demands to the tiny Gulf nation to be met within 10 days in order to lift their total blockade of the country. Among them - reducing diplomatic ties with Iran, shutting down broadcaster Al Jazeera (and  affiliates), and immediately cease working to open a Turkish military base announced in May of 2016. Also interesting is the demand that Qatar give up their intel on terrorist groups they have supported and "provide all databases related to oppositionists..." (Scroll down for full list of demands) This formal list comes on the heels of a June 6th rumor that Arab States issued a list of 10 demands to be fulfilled within 24 hours, however Qatar said they never received them according to Al Jazeera journalists who are now dusting off their resumes. On June 5th, news broke that Bahrain, the UAE, Saudi Arabia, and Egypt had cut off diplomatic ties with Qatar over accusations of 'spreading chaos' by 'funding terrorism and supporting Iran' - shutting down all land, sea, and air crossings with the tiny energy-rich nation that has the highest per capita income in the world. Qatari visitors and residents were given two weeks to leave - while diplomats had just 48 hours.  While Qatar has been friendly with Iran for years, the prelude to the embargo began after a broadcast which showed Qatari Emir Tamim bin Hamad Al Thani speaking with no audio - and scrolling text at the bottom of the screen which stated his support for Iran and terrorist groups. Qatar claims the broadcast was 'hacked.' After the broadcast, Saudi Arabia and the UAE blocked Qatari news organization Al-Jazeera.

    Why Saudi Arabia hates Al Jazeera so much - If you want to understand why many Arab world leaders hate Al Jazeera, consider “Sharia and Life.” For years, the call-in show was one of the network’s most popular, reaching tens of millions. Viewers would call in and pose their faith questions to Yusuf al-Qaradawi, an Egyptian cleric and a spiritual leader of the Muslim Brotherhood. People would ask all kinds of things: Is it all right to smoke during Ramadan? Does a female Palestinian woman have to wear a hijab while carrying out a suicide bombing? Before Al Jazeera, a show like this would have been unusual in the Arab world, where media is tightly controlled. But the Qatari-owned network has a mandate to produce ambitious journalism on a wide range of subjects (some taboo). It offers, too, a broader range of opinions than most Arab media. These qualities have made it the most popular network in the Middle East. It’s also attracted a lot of enemies. Rulers in places such as Saudi Arabia and Egypt resent the station’s broad reach and its willingness to rile up opposition. They don’t like its Islamist bent, and they’re angry that their populations are exposed to reporting critical of their regimes (and supportive of the Qatari agenda). Saudi Arabia, the United Arab Emirates, Egypt and Bahrain cut ties to Doha in early June. Now an official says they've compiled a list aimed at ending the worst Gulf Arab crisis in years, but only if Qatar complies. (Reuters) For years, they’ve called on the station to evolve, or go away. Saudi Arabia, Egypt and Jordan have kicked Al Jazeera bureaus out of their countries. Saudi Arabia has also banned hotels from offering the channel. And now Qatar is embroiled in a diplomatic war with a group of Arab states, and shuttering Al Jazeera appears to be one key demand. 

    Turkey to Move More Troops, Food to Qatar - Turkey has deployed 23 additional military personnel to Qatar and sent a cargo ship carrying food to the tiny Gulf state. Three weeks ago, Saudi Arabia, Egypt, Bahrain and the United Arab Emirates cut diplomatic and economic ties with Qatar over concerns that the nation was supporting terrorist groups – accusations Qatar denies.Turkey has stood behind Qatar during the dispute, providing the desert nation with food and pledging military support. After an initial run on grocery items in Qatar, Turkey stepped in to fill the shelves.In the last three weeks, 105 Turkish cargo planes filled with food have made the trip to Qatar. The cargo ship leaving Thursday carries 4,000 tons of dry food, fruits and vegetables, and is expected to reach Doha in about 10 days.Turkey has maintained a military presence in Qatar since 2014. On June 7, the Turkish parliament approved legislation to allow more troops to be stationed in Qatar.  Thursday's deployment of 23 soldiers and five armored vehicles brings the number of Turkish military personnel in Qatar to 111. Turkey eventually could place more than 1,000 troops in the country, according to the Hurriyet newspaper.

    Analysis: The implications of the Qatar-Turkey alliance - Al Jazeera -  Shortly after Saudi Arabia, Egypt, Bahrain and the United Arab Emirates severed diplomatic relations with Qatar and closed their airspace to commercial flights, Turkey condemned the blockade against Qatar, sent food stocks to stave off possible shortages in the country, and fast-tracked legislation through parliament to deploy Turkish troops on Qatari soil. On June 7, Turkey's parliament ratified two bills; one allowing the deployment of Turkish troops in Qatar and another approving an accord between the two countries on military training cooperation. "A very grave mistake is being made in Qatar, isolating a nation in all areas is inhumane and against Islamic values. It's as if a death penalty decision has been taken for Qatar," Turkish President Recep Tayyip Erdogan told members of his ruling Justice and Development Party (AKP) in Ankara last week. Both agreements were drawn up before the spat between Qatar and its neighbours erupted and were brought to parliament by AKP MPs in an extraordinary session.  A key ally of Qatar, Turkey is setting up a military base in the country - the first Turkish overseas military installation in the Middle East. Qatar also hosts the largest US airbase in the Middle East, Al-Udeid, where around 10,000 military personnel are stationed. The defence cooperation between Doha and Istanbul dates back to 2014, when the two nations signed an agreement aimed at helping them confront "common enemies".  Both nations have provided support for the Egyptian uprising and condemned the military coup that brought the country's current leader, Abdel Fattah el-Sisi, to power. They have both also refused to classify the Muslim Brotherhood movement and Hamas as "terrorist organisations" and backed rebels fighting to overthrow President Bashar al-Assad in Syria.  Besides allowing for a Turkish military base in Qatar, which would primarily serve as a venue for joint training exercises, the deal also gave Qatar the option of setting up a similar facility in Turkey.

    How the Qatar crisis could turn into a disaster for Beijing -- South China Morning Post: The recent row between Qatar and its Arab neighbours puts a big question mark over the feasibility of Beijing’s plans to promote connectivity and build a China-centred trade network among Eurasian countries. The diplomatic rift will interrupt Beijing’s efforts to manage its multitrillion-dollar projects under the Belt and Road Initiative, as the crisis in the Gulf region might mark the beginning of a new round of chaos, and perhaps military conflicts, in the wider Middle East. On June 5, Saudi Arabia, the United Arab Emirates, Bahrain, Yemen and Egypt broke off ties with Qatar, accusing Doha of supporting terrorism. They imposed air, land and sea blockades on the gas-rich nation, which is using its wealth to bankroll its regional and global ambitions and fund the influential pan-Arab broadcaster Al-Jazeera and 2022 Fifa World Cup. A few more Arabian nations joined in the Saudi-led sanctions, while Turkey and Iran voiced their support for their Muslim brethren in Qatar. All six members of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – involved in the row have much at stake, economically and geopolitically, in China’s Belt and Road economic corridor.

    Iran, China Conduct Joint Naval Drills In Strategic Straits Of Hormuz -- Last summer, when the Syrian conflict was near its peak under the Obama administration, China unexpectedly warned it was ready to enter the proxy war when in a stunning announcement, Xinhua reported that Beijing was prepared to side with Syria- and Russia against the US-led alliance, and that Xi and Assad had agreed that the Chinese military will have closer ties with Syria and provide humanitarian aid to the civil war torn nation. A high-ranking People's Liberation Army officer also said that the training of Syrian personnel by Chinese instructors has also been discussed: Then last month, as the lingering Syrian proxy war dragged on, we reported that Moscow was hoping "for China's help in solving the Syrian crisis and restoring the country."  And while the Syrian conflict has taken a back seat in recent weeks to the latest crisis to grip the Gulf region, namely the economic and territorial blockade of Qatar by its Arab neighbors, overnight China made an unexpected appearance, not surprisingly perhaps siding with the biggest supporter of the Assad regime, when as AP reported Iran's navy conducted a joint exercise with a Chinese fleet near the strategic Strait of Hormuz in the Persian Gulf. It was only the second time the Chinese flotilla has visited the Iranian port of Bandar Abbas since 2014, and comes at a tense moment as the Senate last week passed a new round of sanctions against Tehran. According to Iran's official IRNA news agency, Sunday's drill included an Iranian warship as well as two Chinese warships, a logistics ship and a Chinese helicopter that arrived in Iran's port of Bandar Abbas last week, and adds that the scheduled exercise "came before the departure of the Chinese fleet for Muscat, Oman."

    India asks Qatar to invest in power plants as condition for LNG deals | Reuters: India on Tuesday said it would sign future long-term liquefied natural gas (LNG) purchase deals with Qatar if only Doha agrees to acquire stakes in the South Asian nation's power plants, oil minister Dharmendra Pradhan said. India is the latest major LNG buyer to seek concessions from Qatar, the world's biggest LNG exporter, in order to re-sign long-term supply contracts. Amid a global glut of LNG and a slump in prices, other buyers have sought more flexible contracts, including clauses that would allow them to resell gas they do not consume.[ nL3N1IY03M] "Yesterday, we have given a firm proposal to Qatar. If they want to have a long-term off-take assurance, there is a window. They can deal with our stranded power plants, from end to end they can give some solution," Pradhan told Reuters on Tuesday. India is suffering from natural gas shortages that have required power plants with capacity of as much as 25,000 megawatts to shut down or run as lower rates. Qatar's RasGas is India's biggest LNG supplier. "It won't be quid pro quo but mutual interest...They can share the profit of those power plants," said Pradhan, adding New Delhi wants to expand its ties with Doha beyond simply buyer and supplier. India wants to gradually move to a gas-based economy and has plans to raise its annual LNG import capacity to 50 million tonnes in the next few years from 21 million tonnes now. India is also open to granting stakes to Qatar in local oil and gas companies and LNG terminals, should the Gulf emirate make such a proposal, said Pradhan. India's biggest gas importer Petronet LNG annually buys 8.5 million tonnes under a long-term contract. It also buys additional volumes from Qatar under spot deals.

    New Cold War in the Indian Ocean | Asia Times: A new Cold War is brewing in the Indian Ocean, with an informal alliance of the United States, India, Australia, Japan on one side and China on the other. While tensions in the ocean are not yet as pitched as in the hotly contested South China Sea, the potential for conflict is unmistakably rising in the high stakes strategic theater. More than 60% of the world’s oil shipments pass through the Indian Ocean, largely from the Middle East’s oil fields to China, Japan and other fuel-importing Asian economies, as does 70% of all container traffic to and from Asia’s industrialized nations and the rest of the world.While traffic across the Atlantic has diminished in recent years and that which crosses the Pacific is mainly static, trade through the Indian Ocean is fast growing. Maintaining the security of that trade and other navigation is the ostensible reason for the annual Malabar naval exercises between India, Japan and the United States. For the first time in modern history, China is making its own inroads into the Indian Ocean region to protect its trade routes and energy supplies. Although this may appear innocuous on the surface, it is has put China on what could become a collision course with the US and its regional allies — hence the new informal, anti-China oriented alliance in the region. Strategic ripples are gathering. At Obock in Djibouti, situated on the Horn of Africa and overlooking the southern gateway to the Red Sea and the Suez Canal, China has established its first foreign military base, ostensibly to fight piracy. Yet the facility is located next to a key US military facility, also in Djibouti. More importantly, it is also close to other bigger US bases in the region, including a huge facility at Diego Garcia just south of the Equator in the Indian Ocean, as well as US installations in Gulf countries. China’s main regional rival, India, has always considered the Indian Ocean as its “own lake” in South Asian sphere of influence. As such, New Delhi is known to be extremely worried about China’s growing forays into the region, especially as security officials have observed Chinese submarine activity uncomfortably close to its Andaman and Nicobar Islands. 

    Famine as a Weapon of War - Mass starvation as a consequence of the weather has very nearly disappeared: today’s famines are all caused by political decisions, yet journalists still use the phrase ‘man-made famine’ as if such events were unusual. Over the last half-century, famines have become rarer and less lethal.   But this year, it’s possible that four or five famines will occur simultaneously.  It’s a ‘critical’ point, I’d argue, not because it is the worst crisis in our lifetime, but because a long decline – lasting seven decades – in mass death from starvation has come to an end; in fact it has been reversed. Tory MP Stephen O’Brien, the head of the UN Office for the Co-ordination of Humanitarian Affairs, had no illusions about the causes of the four famines, actual or imminent, that he singled out in north-eastern Nigeria, Somalia, South Sudan and Yemen. In each case, the main culprits are wars that result in the destruction of farms, livestock herds and markets, and ‘explicit’ decisions by the military to block humanitarian aid. In Nigeria, villages in the path of the war between Boko Haram and the army have been stripped of assets, income and food. As the army slowly reduces the areas under Boko Haram control, they are finding small towns where thousands starved to death last year.  In South Sudan, the government and the rebel armies have fought much less against each other than against the civilian population. In the summer of 2016, evidence from aid agencies showed nutrition and death rates in the region that met the UN criteria for determining that a food crisis has reached famine levels. Fearing that declaring famine would antagonise the South Sudanese government, already paranoid and cracking down on international aid agencies (aid workers were being robbed, raped and murdered), the UN prevaricated. By February, even veterans of South Sudan’s horrendous famines of the 1980s were saying that this was as bad as anything in their experience, perhaps worse. The UN duly declared a famine. Yemen, however, is the biggest impending disaster. Don’t be fooled by pictures showing hungry people in arid landscapes: the weather had nothing to do with the famine. More than seven million people in Yemen are hungry; far more are likely to die of starvation and disease than in battles and air raids. The military intervention led by Saudi Arabia and the United Arab Emirates has strangled the country’s economy. Before the war, 80 per cent of Yemen’s food was imported, mostly through the Red Sea port of al-Hudaida. At Saudi insistence, backed by the US and the UK, the UN Security Council imposed a blockade on Yemen and while there’s an exemption for food, the inspection procedures are slow and laborious. Since Saudi aircraft bombed the container docks at al-Hudaida, all ships have to be unloaded the old-fashioned way, using derricks and stevedores. Roads, bridges and markets have been damaged or destroyed, slowing commerce to a crawl.  The Bank of Yemen no longer pays salaries.   Food is the biggest weapon, and lack of food the biggest killer, in the Yemen war.

    In Yemen’s secret prisons, UAE tortures and US interrogates - Senior American defense officials acknowledged Wednesday that U.S. forces have been involved in interrogations of detainees in Yemen but denied any participation in or knowledge of human rights abuses. Interrogating detainees who have been abused could violate international law, which prohibits complicity in torture. The AP documented at least 18 clandestine lockups across southern Yemen run by the United Arab Emirates or by Yemeni forces created and trained by the Gulf nation, drawing on accounts from former detainees, families of prisoners, civil rights lawyers and Yemeni military officials. All are either hidden or off limits to Yemen’s government, which has been getting Emirati help in its civil war with rebels over the last two years. The secret prisons are inside military bases, ports, an airport, private villas and even a nightclub. Some detainees have been flown to an Emirati base across the Red Sea in Eritrea, according to Yemen Interior Minister Hussein Arab and others. Several U.S. defense officials, speaking on condition of anonymity to discuss the topic, told AP that American forces do participate in interrogations of detainees at locations in Yemen, provide questions for others to ask, and receive transcripts of interrogations from Emirati allies. They said U.S. senior military leaders were aware of allegations of torture at the prisons in Yemen, looked into them, but were satisfied that there had not been any abuse when U.S. forces were present.

    China’s Struggle With Demographic Change - China’s rapid aging process is not only changing the makeup of society, but it is also dramatically impacting China’s future economic growth prospects and putting huge pressure on government finances. In 1987, the early days of China’s economic miracle, 63.8 percent of the population were of working age, and 4.2 percent were aged above 65. That meant a surplus of workers to feed China’s low-cost manufacturing boom, which drove the average 10 percent GDP growth seen between 1987 and 2007. But increased life expectancy and lower fertility means that by 2025, when the share of the 65-and-over population exceeds 14 percent China will officially become an “aged” society. But unlike France, which took 115 years for its share to rise from 7 percent to 14 percent, China will have taken 23 years, and much less than in the United States (60 years), United Kingdom (45 years), and Germany (40 years), according to research by the World Bank and Standard Chartered.  For the economy, this process will principally impact the labor market by reducing the supply of labor, with the work force expected to shrink from 911 million in 2015, to 848.9 million in 2020, and to 781.8 million in 2030, according to Deutsche Bank estimates. Tighter labor markets will mean higher wages. The Economist Intelligence Unit estimates that average manufacturing labor costs rose 11.9 percent year-on-year (yoy) from 2001 to 2012, and estimates further yoy growth of 12 percent between 2013 and 2020. As China’s labor force becomes smaller and older, the country’s potential economic growth rate will decline. The IMF’s research into population aging finds that a larger share of older workers in the labor force means lower productivity, but also lower labor force participation, which will ultimately reduce China’s potential economic growth rate by between 0.5 percent and 0.75 percent per year between 2020 and 2050.This is one factor of many that explains why forecasters like the OECD are expecting China’s growth to slow from 6.6 percent on average between 2011 and 2030 to 2.3 percent per year between 2030 and 2060. As well as slowing economic growth, China will also have to contend with a huge increase in social security spending to support its growing elderly population.

     Full text: Vision for Maritime Cooperation under the Belt and Road Initiative - Xinhua | (Xinhua) -- China on Tuesday released a document titled Vision for Maritime Cooperation under the Belt and Road Initiative, to synchronize development plans and promote joint actions among countries along the 21st Century Maritime Silk Road.The following is the full text of the document.

    Japanese warship takes Asian guests on cruise in defiance of China | Reuters: Japan's largest warship steamed into the South China Sea this week in defiance of Chinese assertiveness, with Asian military guests on board to witness helicopters looping over the tropical waters and gunners blasting target buoys. China claims most of the energy-rich sea through which about $5 trillion in ship-borne trade passes every year, much of it to and from Japanese ports. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims. Japan worries that China is cementing its control in the South China Sea with manmade island bases, arms sales and development aid. "We are not just here to show our presence, but from the outside that is what it looks like," Rear Admiral Yoshihiro Goga, the commander of the mission, said aboard the Izumo-class helicopter carrier. Military officers from the ten-member Association of Southeast Asian Nations (ASEAN) boarded the 248-metre carrier in Singapore on Monday. It returned on Friday after demonstrating naval skills and kit Tokyo hopes will help it bolster alliances in the region. The Izumo turned back to Singapore before crossing a boundary known as the nine-dash-line into what China claims are its waters. The high-profile cruise was part of a hitherto unseen coordinated push by Japan's Self Defense Forces and defense bureaucrats to bolster ties with countries ringing the contested waters. It also marked a concerted push into military diplomacy by hawkish Japanese Prime Minister Shinzo Abe.

    Exclusive: South Korea president calls on China's Xi to do more on North Korea nuclear program | Reuters: South Korean President Moon Jae-in said on Thursday China should do more to rein in North Korea's nuclear program and he would call on President Xi Jinping to lift measures against South Korean companies taken in retaliation against Seoul's decision to host a U.S. anti-missile defense system. In an interview with Reuters ahead of his trip to Washington next week for a summit with U.S. President Donald Trump, Moon said 'strong' sanctions should be imposed if North Korea tests an intercontinental ballistic missile (ICBM) or conducts a sixth nuclear test. “It must be sufficiently strong enough that it would prevent North Korea from making any additional provocations, and also strong enough that it will make North Korea realize that they are going down the wrong path,” Moon said. The comments mark the toughest warning yet by the liberal former human rights lawyer, who was elected in May after campaigning for a more moderate approach to the North and engaging the reclusive country in dialogue. As a candidate, he said, sanctions alone have failed to impede Pyongyang's defiant pursuit of nuclear weapons and ballistic missiles. North Korea will acquire the technology to deploy a nuclear-tipped ballistic missile capable of hitting the mainland United States "in the not too distant future," Moon said."I believe China is making efforts to stop North Korea from making additional provocations, yet there are no tangible results as of yet," Moon told Reuters at the sprawling Blue House presidential compound. "China is North Korea’s only ally and China is the country that provides the most economic assistance to North Korea," Moon said. "Without the assistance of China, sanctions won't be effective at all." 

     In Major Diplomatic Shift, North Korea Open To Halting Nuclear, Missile Tests -- Is Trump about to have his biggest diplomatic victory yet?According to Yonhap, North Korea's top envoy to India on Wednesday offered a conditional moratorium, i.e. halt, on his country's nuclear and missile tests in what was said to be an "apparent bid to hold talks with the United States." While the North Korean offer is conditional, its "demands" are hardly outrageous.North Korea Ambassador to India Kye Chun-yong said Pyongyang is willing to talk in terms of freezing its nuclear and missile tests under certain circumstances. "If our demands is met, we can negotiate in terms of the moratorium of such as weapons testing," Kye said in English in an interview posted on the website of India's television station WION.He suggested that one of the key demands is the halt of the U.S. joint military drills with South Korea, which Pyongyang denounced as a rehearsal for invasion. Seoul and Washington say their annual exercises are defensive in nature. This could be a potential hurdle, as South Korea's new President Moon Jae-in said Seoul has no plans to scale back joint military exercises with Washington, according to an interview with U.S. broadcaster CBS. Moon dismissed as personal views his adviser's recent remarks in Washington that South Korea and the U.S. may consider scaling back their joint military exercises in exchange for North Korea freezing its nuclear and missile development programs. Moon has repeatedly stated he is willing to engage North Korea diplomatically, and now that the first negotiating bid has been made by Pyongyang, there rest may be simple protocol.

    Thai-Sino rail ‘cooperation’ is in name only - Bangkok Post - As Gen Prayut Chan-o-cha's government pushes for the Thai-Sino high-speed train project by invoking special powers under Section 44, questions over transparency and possible breaches of ethics have come to the fore. With the use of this special section under the interim charter, the regime can bypass relevant laws seen as stumbling blocks that hinder the project's progress. Of the total nine laws that will be sidestepped, seven were promulgated to ensure transparency and fairness in state procurement and two others involve the employment of foreigners in the project. It's ironic that a government that vowed to stick to accountability, transparency and good governance in all state projects from the first day it took office would ignore legislation to accommodate Chinese operators. Let's not forget that this very government suspended several state officials and politicians from duty for failing to comply with those seven laws. If my memory serves me right, Gen Prayut always said everyone in the country falls under the same laws. The regime claims this high-speed train project has been developed under government-to-government (G2G) initiatives, for which there is no bidding process, and China is to be granted the train system development. But the fact is the budget for the Bangkok-Nakhon Ratchasima rail project, which accounts for some 179 billion baht, is tax money. Should tax payers not be guaranteed their money be used transparently? The bypassed laws were the tools to ensure the transparency of expenditure.

    Questions on health of Duterte – and of Philippine democracy  - As fierce fighting in Marawi City between government troops and Islamist militants enters its fourth week, President Rodrigo Duterte mysteriously dropped out of public view for a few days, adding fuel to the speculation long swirling in the Philippines about the possibility of nationwide martial law. Duterte failed to show up to Monday’s Independence Day celebrations and the traditional vin d’honneur at the Malacañang Palace was abruptly cancelled. Presidential spokesman Ernesto Abella said he was “not feeling well” but was “in excellent health”. On Wednesday, with the president still a no-show, Abella told reporters, “There is nothing to worry about in terms of sickness, major sickness.” Duterte just needed time “to rejuvenate” from a “brutal” 23 days of war. Duterte finally resurfaced on Saturday after five days, and joked he had a “circumcision”. He has in the past admitted to having Buerger’s disease, or narrowing of the arteries due to excessive drinking, a spine injury, acid reflux and daily migraine. So fears about the health of the 72-year-old president will not go away in a hurry, neither will concern about the health of the country’s democracy, which Duterte has long been suspected of subverting for an eventual autocratic takeover. 

    ISIS poses a growing threat to Southeast Asia - (AP) — Southeast Asia's jihadis who fought by the hundreds for the Islamic State group in Iraq and Syria now have a different battle closer to home in the southern Philippines. It's a scenario raising significant alarm in Washington. The recent assault by IS-aligned fighters on the Philippine city of Marawi has left more than 300 people dead, exposing the shortcomings of local security forces and the extremist group's spreading reach in a region where counterterrorism gains are coming undone. Defense Secretary Jim Mattis told Congress last week that a long-running U.S. military operation to help Philippine forces contain extremist fighters was canceled prematurely three years ago. Small numbers of U.S. special forces remain in an "advise and assist" role, and the U.S. is providing aerial surveillance to help the Philippines retake Marawi, an inland city of more than 200,000 people. But lawmakers, including from President Donald Trump's Republican Party, want a bigger U.S. role, short of boots on the ground. They fear the area is becoming a new hub for Islamist fighters from Southeast Asia and beyond. "I don't know that ISIS are directing operations there but they are certainly trying to get fighters into that region," said Republican Sen. Joni Ernst of Iowa, using another acronym for the group. "We need to address the situation. It should not get out of control." U.S. intelligence and counterterrorism officials note that IS has publicly accepted pledges from various groups in the Philippines. In a June 2016 video, it called on followers in Southeast Asia to go to the Philippines if they cannot reach Syria.

    Indonesia, Malaysia, Philippines launch joint sea patrols - (AP) -- Southeast Asian neighbors Indonesia, Malaysia and the Philippines launched coordinated maritime patrols on Monday to intensify their fight against Islamic militants who have laid siege to a southern Philippine city. Defense ministers and military chiefs from the three countries launched the patrols in the Indonesian city of Tarakan in northern Borneo, just across the border from Sabah, Malaysia. Indonesia's military chief, Gen. Gatot Nurmantyo, said Maritime Command Centers were also opened in the cities of Tawau in Malaysia and Bongao in the Philippines. The information and intelligence sharing centers establish designated sea lanes for ships in the seas along the countries' borders to prevent Islamic State group-aligned militants in the southern Philippines from fleeing to neighboring nations. The conflict in the Philippine city of Marawi has raised fears that the Islamic State group's violent ideology is gaining a foothold in the country's restive south, where Muslim separatists have fought for greater autonomy for decades. Nurmantyo said the idea of the trilateral maritime patrols was initiated by the countries last year to maintain stability in the region in the face of threats such as piracy, kidnapping, terrorism and other crimes in regional waters.

    Mandatory Aadhaar and Bank Accounts: How Much of This Is Legal? - The central government recently announced that it shall be mandatory to link Aadhaar numbers to all non-small bank accounts, failing which, access to the bank accounts will be disabled after December 31. This requirement has been brought into the law via Prevention of Money-laundering (Maintenance of Records) (Second Amendment) Rules, 2017 which have been notified by the government under powers delegated to it by the parliament through the Prevention of Money Laundering Act, 2002 (PMLA). As is often the case with this government, the question now is whether this new mandatory Aadhaar requirement (and the threatened punishment) is legal.  The Aadhaar Act, 2016 imposes certain limitations on the type of activities for which the government can mandate the use of Aadhaar number for authentication. The pertinent part of the legislation, Section 7, states:  “The Central Government or, as the case may be, the State Government may, for the purpose of establishing identity of an individual as a condition for receipt of a subsidy, benefit or service for which the expenditure is incurred from, or the receipt therefrom forms part of, the Consolidated Fund of India (CFI), require that such individual undergo authentication, or furnish proof of possession of Aadhaar number….”The operative words here are “receipt of a subsidy, benefit or service” where money is either appropriated or deposited in “the Consolidated Fund of India” which is basically the government’s most important account where revenue is deposited and from which the government deducts its expenses. This would cover central government schemes and services like MNREGA or issuance of passports.

    Argentina sees strong demand for surprise 100-year bond: Argentina sold $2.75 billion of a hotly demanded 100-year bond in U.S. dollars on Monday, just over a year after emerging from its latest default, according to the government. The South American country received $9.75 billion in orders for the bond, as investors eyed a yield of 7.9 percent in an otherwise low yielding fixed income market where pension funds need to lock in long-term returns. Thanks to a stronger-than-expected peso currency, the government has increased its overall 2017 foreign currency bond issuance target to $12.75 billion from its previous plan of issuing $10 billion in international bonds, Finance Minister Luis Caputo told reporters in Buenos Aires. Argentina is going to the international capital markets to help finance a fiscal deficit of 4.2 percent of gross domestic product this year. Caputo said Argentina has $2.6 billion in bonds left to be issued this year. The new paper could be denominated in euros, yen or Swiss francs. The new bond had a coupon of 7.125 percent, the finance ministry said in a statement that hailed success of the sale as evidence that Argentina had regained "credibility and confidence." Still, the move came as a surprise given Argentina only last year ended a decade-long dispute with creditors over its 2002 default and residents tend to frown upon accumulating debt in dollars.

    Demonstrators take to the streets as Venezuela battles triple-digit inflation, crippling food and medical shortages and rising crime (From HeraldScotland): Glitzy car showrooms line the main road into town. A giant General Motors production plant hints at prosperity and employment. But the showrooms are empty. The plant has closed after a year when it lay idle because no parts were available. Valencia, Venezuela’s third largest town of two million about 100 miles west of the capital Caracas, gives a glimpse of life behind the headlines of riots and deaths.Venezuela, circled by Colombia, Brazil, Guyana and the Caribbean Sea on the north coast of South America, is an “undeveloping” nation going backwards. It has the world’s largest proven oil reserves and huge mineral riches. It’s a beautiful country stretching from the snow-capped Andes in the west to Amazonian jungle in the south and stunning beaches in the north. But 18 years of United Socialist Party rule under the late President Hugo Chavez, who died in 2013, and his successor Nicolas Maduro have sadly hollowed out the Bolivarian Republic of Venezuela. This is a broken nation of 30 million people with an economy shrunk by a quarter since 2013, most people barely surviving food and medicine shortages, rampant crime with Caracas now rated the world’s most dangerous city and the world’s highest inflation rate approaching 1,000 per cent. Crumbling infrastructure vividly shows the state of decline. Two months of almost continuous protest against Maduro and his Chavista regime have left some 60 dead and hundreds injured. 

    Sears Canada to close 59 stores, lay off 2,900 in restructuring - Business - CBC News: Sears Canada plans to close 59 stores and eliminate 2,900 jobs across the country as part of a court-supervised restructuring process. Shares in Sears Canada were halted Thursday morning after the retailer applied for and was granted protection from its creditors under the Companies' Creditors Arrangement Act — the law that covers insolvency proceedings.The move gives the retailer 30 days to restructure itself, which includes $450 million in debtor-in-possession financing to fund the company while it restructures, a process that will include closing dozens of locations and laying off thousands of workers. The chain will axe 20 full Sears stores, 15 Sears Home Stores, all 10 outlet stores and 14 Sears Hometown stores — roughly one-third of its current retail footprint. Affected locations are listed here: All other Sears locations will remain open, the chain said, and the company "plans to continue to operate a large number of stores, continue to maintain significant employment, and to service its customers across Canada," Sears said in a court filing. About 500 office positions at the company were to be eliminated immediately. The remainder of the job losses will come as Sears closes stores. As of May 30, the company employed approximately 17,000 people, with 10,500 in part-time positions and the rest working full-time.

    Canada Ponders an Unusual Drug Problem: a Shortage of Marijuana - The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says. Ontario’s Charles Sousa said a supply crunch was discussed during a meeting with provincial and federal counterparts this week. Canada is aiming to legalize recreational pot in the next 12 months, the first major economy to do so.   “Ultimately the biggest problem that appears after today’s discussion is one of supply,” Sousa said in an interview this week. Finance ministers were told demand is “quite high” for marijuana already in Canada, he said. “So we want to make certain that, when we do proceed, there is sufficient supply to accommodate the activity because what we’re trying to do is curb the illicit use and organized crime that now exists around it.” Trudeau’s framework for legalization, unveiled in April, will rely on Canada’s provinces to set up sale and distribution regimes, while at minimum selling recreational pot by mail beginning some time before July 2018. Key details including taxation remain up in the air. Federal Finance Minister Bill Morneau has said he favors a tax rate that will starve out the black market, one of the government’s key objectives.  “That as a conclusion would lead us to say taxation rates have to be low,” Canada’s burgeoning marijuana industry has ballooned in value amid optimism over Trudeau’s plan for recreational sales, which could reach C$6 billion ($4.5 billion) annually by 2021. Combined demand for recreational and medical marijuana may reach 575,000 kilograms by 2021, according to the report. The government says a key aim is to shrink or altogether kill the black market, and any shortage of legal weed would hinder that effort. Trudeau’s plans also allow people to grow up to four plants in a home. Companies are still in the midst of trying to build and expand their facilities and everything would have to go “perfectly” in order to have enough supply. Initial sales will probably be online and by mail as it wouldn’t be possible for the market to stock enough inventory in government dispensaries across the country. 

    Peak banking globalization hasn't come and gone, BIS says --The Bank for International Settlements, the Basel-based central bankers' bank, isn't ready to call an end to financial globalization.    Data on cross-border banking suggest that a pullback started during the global financial crisis in 2007-2009 and has set in since: cross-border claims reported by banks in more than 40 jurisdictions declined from a peak of 60 percent of global GDP in 2007 to less than 40 percent since 2013.  BIS argues that those figures give a false signal, since a regional quirk is driving what looks like an aggregate trend. "Banks headquartered in Europe accounted for more than all of the global decline — that is, these banks' foreign claims declined by more than $9 trillion," while those of U.S. banks and banks from other advanced countries and emerging market economies grew, according to the bank's annual report.  Given the European banks' circumstances, the shrinkage is better interpreted as cyclical de-leveraging than as a structural trend away from globalization, they write.

     Schaeuble Warns US Pullback Could "End Our Liberal World Order" Less than a month after German Chancellor Angela Merkel warned that “Europe must take its fate into its own hands,” Finance Minister Wolfgang Schaeuble implored US President Donald Trump to reconsider his “America First” policy, claiming that a pullback by the US would risk the destruction of “our liberal world order” by ceding influence to the Chinese and the Russians. Trump’s hostility toward his European partners has strained relations between the US and its Continental allies. Since taking office, Trump has insulted fellow G-7 and NATO leaders, pulled out of the Paris Accord and attempted to ban travelers and refugees from six Muslim majority countries. Though Trump has treated at least one NATO leader with respect: Romanian President Klaus Iohannis, whom he honored with a Rose Garden press conference. Bloomberg described Schaeuble’s comments as “one of the strongest expressions of concern among European policy makers that President Donald Trump’s administration is disengaging the US from its global roles on trade, climate change and security.”“I doubt whether the United States truly believes that the world order would be equally sound if China or Russia were to fill the gaps left by the US, and if China and Russia were simply given a free hand to dominate the spheres of influence that they have defined for themselves,” Schaeuble, 74, said in a speech at the American Academy in Berlin, a think tank that promotes U.S.-German ties. “That would be the end of our liberal world order.”Schaeuble also claimed that maintaining global security is in t he best interest of the US.

    Macron completes electoral grand slam amid record-low turnout - France 24: French President Emmanuel Macron wrapped up his extraordinary string of electoral victories on Sunday as his fledgling new party picked up a large majority of seats in legislative polls marred by the lowest turnout on record. The takeover is complete. Just over a month after his stunning election to the Elysée Palace, France’s youngest-ever president has guided his party to a huge win in legislative polls, crushing the old parties of left and right that have dominated French politics for decade. His La République en Marche (LREM) didn’t even exist 15 months ago. Now projections say the centrist upstart and a smaller ally will control some 360 seats in the 577-seat National Assembly, heralding an era of centrist hegemony in the country that invented the left-right divide. Across the country, LREM candidates – most of them political novices, much like the president – ripped apart the political script, storming bastions of the right and the left with astonishing ease. Admittedly, they fell short of the “Soviet-style” majority some polls had forecast. But they will still enjoy one of the largest majorities in modern history. And that’s without counting the handful of survivors from other parties who have already pledged to support France’s new president, in a desperate bid to save their own skin.

    'Real victory will be in five years,' says Macron camp after election win | Reuters: President Emmanuel Macron's government on Monday promised to reshape France's political landscape after winning a commanding parliamentary majority to push through far-reaching pro-growth reforms. Macron's centrist Republic on the Move (LREM) party and its center-right Modem ally won 350 out of 577 lower house seats in Sunday's election, which marked a record low turnout for a parliamentary ballot in the postwar Fifth Republic.(For a Parliamentary graphic click Government spokesman Christophe Castaner said the high abstention rate - more than 50 percent of voters stayed at home - was a failure for the governing class and highlighted the need for a new politics. "The real victory wasn't last night, it will be in five years' time when we have really changed things," Castaner told RTL radio. He also said dissent would not be tolerated among the dozens elected on the Macron party ticket, including many newcomers such as 24-year-old law school graduate Typhanie Degois. "Being a member of parliament for Republic on the Move is a commitment to Emmanuel Macron's presidential program. It's about loyalty," he said, adding that the previous Socialist government was dogged by dissenters pursuing personal goals. Though lower than forecast by pollsters, Macron's majority swept aside France's main traditional parties, humiliating the Socialists and conservative The Republicans party that had alternated in power for decades.Prime Minister Edouard Philippe and his government resigned later in the day amid preparations for a reshuffle on Wednesday. Spokesman Castaner said he believed Philippe would remain as its leader.

    Spain’s Wounds Run Deep as Economy Retraces Crisis Losses - It has taken the Spanish economy a decade to claw back lost output after its worst crisis in modern history, but the wounds are far from healed.While gross domestic product is this quarter on track to finally reach the level registered in 2007, employment is almost 12 percent lower, wages remain subdued and social inequality has risen even as the nation extends a four-year recovery.  To support its recovery, while being part of the euro area, Spain had to undergo an internal devaluation through lower salaries coupled with more flexible labor laws. As a result, wages in relation to GDP have fallen to the lowest since 1995. That means middle-income families depending on their paycheck have come under strain, while asset-rich households have held firm.  Though household income picked up for the first time in seven years in 2016, it’s still more than 10 percent below the levels seen at the end of the last decade. Families feeling squeezed have cut investments and eaten into their savings.“It’s taken ten years for Spain to get back to square one and 2.1 million jobs have been destroyed while salaries have fallen significantly,” . “We’re back at the starting point and we’ve done so with greater social inequality.” The greatest concern remains the labor market even as job creation picks up. Employment is still far below the heady days of a decade ago, when a construction boom drove the jobless rate down to a record low of 8 percent. Spain’s unemployment rate is now 17.8 percent, from a peak of 26.3 percent in 2013.Some may point to a drop in government spending on unemployment benefits as good news. But the underlying reason is far from encouraging. Payouts are curbed after a person spends more than two years without a job. There are 1.5 million Spaniards who fit that description and almost half of the nation’s jobless receive no government aid. Many are saddled with obsolete skills and education and are at deep risk of staying perpetually unemployed.

    Waiting for Godot or Does Anyone Really Know What Is Going on with eurozone Banks? - I have yet to write that article which will address whether eurozone banking rules to promote solvency of banks is creating a liquidity problem, because  the eurozone banking resolution authorities seem to have so badly mismanaged the Banco Popular resolution to the point of intensifying a bank run despite monitoring bank liquidity on a daily and hourly basis. Banco Popular was Spain's 6th largest bank having been in existence since the early 20thCentury and one of the more profitable banks until about 2016.  In February 2017, it announced it had a 3.b billion euro loss on asset writedowns and Non Performing Loan sales while maintaining it still had more than sufficient quality assets on its balance sheet. By the end of May and first days of June reports were circulating that Banco Popular had received only 3.5 billion euro on 40 billion euro collateral rather than the 9.5 billion euro it had expected one month previously and had applied to the Bank of Spain for liquidity support receiving only 10% of the collateral it pledged drawing 2 billion and 1.6 billion euro which it managed to burn through in just a few days.  Banco popular had been down rated by all foud major credit rating agencies between April and the 19th of May causing institutional clients with minimum credit requirements for banking to start withdrawing deposits during as period when the bank was trying to receive bids to privately resolve though a sale of the bank.  But on May31st, an anonymous EU official leaked to Reuters that an "early warning" had been issued.  This was followed by an immediate denial by the Single Resolution Board, which would have been the entity issuing such an early warning.  As a consequence, it experienced 20% daily drops in stock value on June1, 5, and 6 and by 6th June had supposedly endured (never publicly verified yet) 18 billion euro deposit outflows.  While this may have been, according to EuroIntelligence, someone going to the press because the Single Resolution Board had communicated to the Single Supervisory Authority it was going to initiate early intervention measures, the communication to Reuters was the early warning had been issued, although, according to FROB (Spain's resolution authority), the Single Resolution Board had notified them on June 3 of their intention to act. This had caused some people to postulate that the eurozone bank resolution mechanism actually encourages bank runs.

    Two Italian Zombie Banks Toppled Friday Night - Wolf Richter - When banks fail and regulators decide to liquidate them, it happens on Friday evening so that there is a weekend to clean up the mess. And this is what happened in Italy – with two banks!It’s over for the two banks that have been prominent zombies in the Italian banking crisis: Veneto Banca and Banca Popolare di Vicenza, in northeastern Italy.The banks have combined assets of €60 billion, a good part of which are toxic and no one wanted to touch them. They already received a bailout but more would have been required, and given the uncertainty and the messiness of their books, nothing was forthcoming, and the ECB which regulates them lost its patience.  In a tersely worded statement, the ECB’s office of Banking Supervision ordered the banks to be wound up because they “were failing or likely to fail as the two banks repeatedly breached supervisory capital requirements.”“Failing or likely to fail” is the key phrase that banking supervisors use for banks that “should be put in resolution or wound up under normal insolvency proceedings,” the statement said. This is the first Italian bank liquidation under Europe’s new Single Resolution Mechanism Regulation. The ECB explained:The ECB had given the banks time to present capital plans, but the banks had been unable to offer credible solutions going forward.Consequently, the ECB deemed that both banks were failing or likely to fail and duly informed the Single Resolution Board (SRB), which concluded that the conditions for a resolution action in relation to the two banks had not been met. The banks will be wound up under Italian insolvency procedures. Just weeks ago, Italy’s Minister of Economy Pier Carlo Padoan insisted that the two banks would not be wound down. Last year, to dispel the mountain of evidence to the contrary, he insisted that that there would be no need of any future bail outs; and that, furthermore, Italy did not even have a banking problem. In early June, the two banks were instructed by the European Commission to raise an additional €1.25 billion in private capital. No one bit. Italy’s government then tried to persuade the European Commission and the ECB to water down the requirement to €600-800 million, and it urged Italian banks to chip in to the bank rescue fund. All that failed. So this weekend, the Italian government gets to sit down together for a friendly chat to enact the necessary measures to protect depositors and senior bondholders in those two banks. Stockholders will be crushed. Junior bondholders will likely get slammed hard. And the Italian taxpayer might face some additional pain – all of it caused by many years of terrible and reckless bank management.

    McKinsey: Banks Will Have To Slash 30% Of Analyst Jobs To Comply With New Research Rules - As the global equity research market continues to wrestle with how they will comply with the European Union's MiFID II regulations, McKinsey & Co. has just penned a new study effectively saying they'll have no choice but to fire a ton of equity research analysts who write a bunch of stuff that no one ever reads...which seems like a reasonable guess.  PerBloomberg: Europe’s impending ban on free research will cost hundreds of analysts their jobs with banks set to cut about $1.2 billion of investment on the area, according to a report by McKinsey & Co. The consultancy estimates the $4 billion that the top-10 sell-side banks currently spend on research annually is likely to fall by 30 percent as clients become pickier about what they pay for, McKinsey Partner Roger Rudisuli said in an interview. Investment banks’ cash equity research headcount has fallen 12 percent to 3,900 since 2011 compared with as much as 40 percent in sales and trading, leaving the area facing “big cuts” to catch up, he said. “Two to three global banking players will preserve their status in the new era, winning the execution arms race and dominating trading in equities around the globe,” McKinsey said in a report Wednesday, which Rudisuli helped write. “Over the coming five years, banks will need to make hard choices and play to their strengths. Not only will the top ranks be thinned out, there will be shakeouts in regional markets.” For those who have managed to avoid this particular distraction, the global equity research industry is in the midst of a major disruption which has been brought on by the European Union’s MiFID II regulations, enforced from Jan. 3, which aim to tackle conflicts of interest by requiring asset managers to separate the trading commissions they pay from investment-research fees.

    The ECB Blames Inflation on Everything but Itself -- Unsurprisingly, central banks are reluctant to claim credit for inflation. In their latest bulletin, the European Central Bank (ECB) published the graph below explaining what causes inflation. See the problem? Neither the money supply nor the ECB are mentioned. While there are many factors that influence the purchasing power of money, inflation is still inherently a monetary phenomenon and the role central banks play simply can’t be ignored. Instead, the ECB prefers to do what all central banks did just before the 2009 great recession: blame inflation on rising food and energy prices. But large central banks like the ECB have a strong and disproportionate effect on energy prices, as predicted by Austrian business cycle theory. The rise in oil prices in 2007, for example, was triggered by the end of the euphoric monetary boom initiated by the Fed and the ECB in the years prior. As investment in energy production was fueled, in part, by credit expansion instead of real savings. The quantity of producer’s goods — or at least of some of them — revealed themselves to be insufficient to complete the plans of entrepreneurs, thus generating a sharp increase in their prices. Therefore the ECB has some responsibility in the so-called external drivers of inflation.

    Draghi Doesn’t See “Bubbles” — Let Me Show You Some - Mario Draghi has again missed an exceptional opportunity to adjust monetary policy. By ignoring the huge risks that are being created from the brutal inflation of financial assets, saying that “there are no signs of a bubble,” the European Central Bank (ECB) remains adamantly focused on creating inflation by decree, denying the effects of technology, demography, and overcapacity.  “No signs of bubble”? I’ll show you some of them myself. The percentage of debt of major countries “bought” by the ECB: Germany, 17%, France 14%, Italy 12%, and Spain 16%. In all cases, in 2016 and 2015 the ECB was the largest buyer of said countries’ net emissions. Ask yourself a question: On the day the ECB stops buying, which of you would buy peripheral or European bonds at these prices? Clearly, the first sign of a bubble is the absence of demand in the secondary that offsets the impact of the ECB. It indicates that the current price is simply unacceptable in an open market, even if the recovery is confirmed, especially because rates do not even reflect a minimum real return, being below inflation.

    • European Union high-yield bonds are trading at record-low yields despite the fact that cash generation and debt repayment capacity, according to Moody’s and Fitch, have not improved significantly.
    • European largest stocks (Eurostoxx 50) trade at 20x PE and 8.3x EV/EBITDA despite eight years of flat earnings and downgrades, which have only just recently reversed.
    • Infrastructure deals’ multiples have increased five-fold in three years to an astonishing average of 16-19x EBITDA.
    • Excess liquidity in the euro zone already reaches 1.2 trillion euros. It has multiplied by almost seven since the “stimulus” program was launched.

    There is a problem in the huge amount of assets bought by the ECB, whose balance sheet already exceeds 25% of the European Union’s GDP. At the beginning of the repurchase program, it could be argued that risky assets, especially sovereign bonds, could have been cheap or under-valued because of the risk of break-up of the euro and overall negative sentiment. However, that statement cannot be made today, with bond yields at historic lows and debt levels at historic highs. Monetary policy is a perverse incentive to spend more and add more debt.

     Forget euro zone breakup, sterling now deemed riskier | Reuters: For years the options market that companies and investors use to hedge against big swings in currencies viewed the euro as a bigger political and structural risk than Britain's pound. No more. In the political and market turmoil immediately before and following Britain's decision last June to leave the European Union, financial market investors flipped their long-held bias against the euro and now expect sterling to be the riskier party for years to come. Reuters data going back to 2012 shows three- and five-year risk reversals -- the cost of taking out an option to buy or sell the pound -- have consistently been below zero. That indicated it was almost always more expensive to hedge against the risk of euro exchange rates collapsing than of the same happening in sterling. There are always blips. On a handful of occasions since Mario Draghi's promise to do "whatever it takes" to prop up the euro in 2012, the single currency has briefly been valued as steadier for the long term. But since an initial jump in the first six months of 2016, both three- and five-year euro-sterling risk reversal contracts have held consistently in positive territory, indicating the tail risk -- the risk of a low probability, high impact event -- is now instead with the pound. That is the first time in Reuters' historical data on the options market and means it will be increasingly costly for investors exposed to the pound's exchange rate to insure portfolios against further slides. With the pound pummelled by political and economic uncertainty, the euro/sterling five-year risk reversal on Thursday matched its highest in 11 months, showing an increased bias towards sterling weakness. This followed open disagreement among Bank of England policymakers on the outlook for interest rates and, by extension, the pound.On Tuesday BoE Governor Mark Carney said now was not the time to raise rates, warning of weak wage growth as Britain prepared to quit the EU. On Wednesday, the central bank's chief economist, Andy Haldane, said he was likely to join those voting for a hike later this year. 

    Barclays and Its Executives Are Charged With Conspiracy to Commit Fraud - Real News Network video - NEP’s Bill Black appears on The Real News Network and says don’t expect much – sadly, the British Serious ‘Farce’ Office that brought about the charges may not have the wits to carry out the prosecution. You can view with transcript here.

    Pointless Trip? UK Trade Minister Seeks FTA in US -  Why send a Brexiteer (code word for isolationist) to negotiate a bilateral FTA with Trump's America?Things are smacking of desperation in the UK as Prime Minister (as of this moment) Theresa May is not only vulnerable for calling an election when her party's majority was squandered, but also for coming into Brexit negotiations with a weakened position as a result. It is thus quizzical that she recently dispatched her trade minister to the United States. Recall that this is a new position after the UK left negotiating trade deals to the EU for decades. It's being reported as a mission to scope the level of support for a UK-US FTA in the future:Britain's International Trade Secretary Liam Fox said he would meet U.S. trade leaders in Washington on Sunday to talk about the possibility of signing a free trade deal between the two countries soon after Britain leaves the European Union...  Britain starts formal Brexit talks with the other 27 EU countries on Monday, and is due to leave the bloc in March 2019.  Fox will meet U.S. Trade Representative Robert Lighthizer, as well as the U.S. Chamber of Commerce, trade policy organizations and business representatives. The mission may be as described, but its viability has certainly been undermined by the current political turmoil in the UK. What's more, the Trump-era US trade stance isn't exactly very promising given the aforementioned lout's conviction that trade is a zero-sum game. Consider, then:

    1. For how much longer will the May government survive? Even if she is replaced by another Conservative politician, there is no guarantee s/he will retain the services of Fox or pursue an FTA with the US as a priority;
    2. Given Fox's precarious position as trade minister, what confidence will his American counterparts have in him representing UK interests even in the medium term?;
    3. How palatable will deliberately lopsided bilateral trade deals favoring the US be for others? The UK will be an early test case for others contemplating one with the US. It's the guinea pig;
    4. Given that Brexit isn't even a sure-fire thing given the amount of paperwork that the now-weakened May government needs to push through parliament over a protracted period of time, why would Fox's American counterparts be comfortable assuming that March 2019 is an appropriate target date?
    5. If the UK has been complaining about the EU's bullying ways all these years, how favorably will it respond to an even more demanding counterparty in the US--the world's largest economy (with its greater political-economic clout)?

    May’s Bid to Keep U.K. Lights on Harder After Election Loss -- The U.K.’s search for 100 billion pounds ($127 billion) to maintain electricity supplies is likely to become tougher after the Conservative government lost its parliamentary majority in an election last week. With more than a dozen power plants due to close in the next decade, Britain’s grid is creaking under growing volumes of power from wind and solar farms. The government is also is under pressure to meet legislated targets to reduce fossil-fuel emissions. And those challenges won’t disappear during the debate over Brexit. There’s already evidence that investment in Britain’s energy industry already has slowed as the government focused on fighting three separate campaigns with voters in the past three years, including general elections this year and 2015 and the Brexit referendum in 2016. Investment in clean energy plunged in the first quarter after falling on an annual basis for the first time in six years last year, according to Bloomberg New Energy Finance. Developers are seeking certainty on how their payments will be structured after the U.K. leaves the EU, a move that may allow it to drop renewable energy targets for 2020 that have served as a guide to how policy will evolve.

    New poll puts Labour ahead of Conservatives – but Theresa May still backed to deliver Brexit - The Conservatives have fallen three points behind Labour in a new opinion poll - but Theresa May remains the leader most trusted to secure a good Brexit deal. The Tories suffered a disastrous set of general election results on June 8 as the party lost its majority with Mrs May forced to pursue a deal with the Democratic Unionist Party to prop up her minority government. Now a new survey suggests the Tories have been overtaken by Labour with respondents to a Survation poll for ITV’s Good Morning Britain programme putting Jeremy Corbyn’s party on 44 per cent and the Conservatives on 41 per cent. The results represent a surge in support for Labour with a similar Survation poll conducted at the start of May putting the Tories on 47 per cent and Mr Corbyn’s party on 30 per cent. Despite the fact that the poll puts Labour ahead of the Conservatives the survey is not all bad news for Mrs May. With Brexit negotiations starting today, Mrs May was the party leader that most people trusted to negotiate the best deal with the Prime Minister backed by 52 per cent of people. Some 39 per cent of people said they believed Mr Corbyn would deliver the best Brexit deal for the UK.

    Two-thirds of Europeans believe EU should take hard line on Brexit - Two-thirds of Europeans believe the EU should take a hard line with the UK over Brexit, according to a survey.Sixty-five per cent of those questioned in Belgium, Germany, Greece, Spain, France, Italy Austria, Hungary and Poland said the EU, while trying to maintain a good relationship with Britain, should not compromise on its core principles. The Chatham House-Kantar survey showed just 18% of people in the nine countries – compared with 49% of people in Britain – believed the opposite; that the European commission should aim to keep the UK as close as possible, at the expense of its principles, during the talks, which began on Monday. Of those surveyed across the nine continental countries, 57% said the EU had been weakened by Brexit, while 46% felt Britain’s departure would be bad for the bloc. By contrast, 70% of Britons felt the EU would suffer from the UK leaving.The survey interviewed more than 1,000 people in each of the 10 countries including Britain earlier this year before elections in the Netherlands and France and an economic uptick that have significantly bolstered pro-European sentiment. The election of pro-European centrist Emmanuel Macron in France has in particular given the bloc a boost. The eurozone economy, too, is now growing faster than that of the UK or US. Britain’s confusion over what Brexit strategy to adopt have also helped swing EU opinion. A Pew survey last week found markedly higher approval for the EU since the Brexit vote: 63% of respondents in the 10 EU countries had favourable views about the bloc. The figures mark a sharp increase from spring last year, with favourable opinions up 18 points in Germany and France, 15 in Spain, 13 in the Netherlands – and 10 in the UK. Only 18% of continental respondents wanted their country to leave the EU.The survey identified significant differences over general attitudes towards the EU between European elites and the wider public, with elites – politicians, business leaders and opinion formers – twice as likely (71% against 34%) to say they had benefited from the EU. The results also revealed a gap between public perception and that of the elite on immigration, while the wider public were also more likely to view the EU negatively.

    EU leaders fear that fragile state of Tories will lead to brutal Brexit - European leaders fear that Theresa May’s government is too fragile to negotiate viable terms on which to leave the union, meaning the discussions that officially begin on Monday could end in a “brutal Brexit” – under which talks collapse without any deal. As officials began gathering in Brussels on Sunday night, the long-awaited start of negotiations was overshadowed by political chaos back in Westminster, where chancellor Philip Hammond warned that failing to strike a deal would be “a very, very bad outcome”.The EU side fears that, in reality, the British government will struggle to maintain any position without falling apart in the coming months, because, without support from the Democratic Unionist party, May’s negotiating hand is limited. There are also concerns that any DUP backing to give May a majority in the House of Commons would come with strings attached.Hammond has been urged to publish the cost of any deals made with the DUP to prop up the government. Shadow chancellor John McDonnell has raised concerns over reports that the DUP wants to end airport tax on visitors to Northern Ireland, which generated about £90m in 2015/16, according to HMRC estimates. The abolition of air passenger duty is one of the DUP’s key demands, as it pits Northern Ireland unfavourably against the Republic of Ireland, where the duty has been abolished. As well as concern over any terms agreed with the DUP, May will have to assuage fears from Ireland’s new taoiseach, Leo Varadkar, when she meets him in Downing Street on Monday, that Brexit will not infringe on the rights of people in Ireland. The taoiseach will also raise the impact of any Tory-DUP deal on power-sharing in Northern Ireland. British Brexit negotiators are hoping to shore up confidence in their hardline approach to the start of talks by making early progress on the vexed question of citizens’ rights.Brexit secretary David Davis is determined to demonstrate that his take-it-or-leave-it approach to the two-year article 50 process is still on track, and is understood to be willing to make concessions on citizens’ rights to help get the process off to credible start.

    Big business leaders press Theresa May to rethink hard Brexit - Senior business figures have heaped further pressure on Theresa May to change course for a softer Brexit in the wake of the election, amid fresh warnings of the impact of immigration controls and leaving the single market. Stuart Rose, the Tory peer and chairman of online grocer Ocado, who backed Remain, said the election had been a “proxy re-referendum” against hard Brexit. Karan Bilimoria, the founder of Cobra beer and Remain backer, said the prime minister had “zero credibility” and that Britain could now rethink leaving. And Brian McBride, chairman of ASOS and Wiggle, has raised concerns about access to labour and customs checks. Business groups are pressing Downing Street for a change in tone, as well as a formal role in the Brexit process. They also want an end to May’s repeated mantra that “no deal is better than a bad deal”.  David Davis, the Brexit secretary, says on Sunday that he would head into Monday’s Brexit talks aiming to “secure a deal that works for all parts of the United Kingdom”, but signalled that the plan was still to leave the customs union and reduce immigration. Meanwhile, British businesses have sounded the alarm over damaging labour shortages after Brexit, with thousands warning that they will be hurt by even a modest move away from the EU’s free movement rules. Almost a quarter of the business community say that restricting entry to Britain to EU migrants with a job offer would have a negative impact on them, rising to 30% of companies in low-wage industries. The warning is contained in a comprehensive analysis of business views on migration by the Chartered Institute of Personnel and Development (CIPD) and the National Institute of Economic and Social Research to be published on Monday. The report contains alarming findings, revealed exclusively to the Observer, over the number of companies who believe they will be damaged by a move away from freedom of movement rules.

    We’re in crisis, say firms as EU workers shun UK: new survey by recruiter shows business wants to delay Brexit - Fears are growing of a recruitment crisis for British business in the event of a hard Brexit with almost half of companies reporting a drop in the number of EU nationals applying for jobs. The vast majority of firms want a soft Brexit and half of those questioned believe negotiations – which are due to begin in Brussels tomorrow – should be delayed because the prospects of a good deal have been damaged by the shock Election result. The findings emerged in research carried out by, the UK’s largest online recruitment consultancy, which has been seen exclusively by The Mail on Sunday. It emerged that 43 per cent of firms have seen a fall in job applications from EU citizens since last June’s referendum. Business confidence fell sharply as a result of the hung Parliament. More than a third of those questioned said the outlook for their firm had become less positive because of the uncertain result of the Election. An overwhelming majority – 86 per cent – were convinced that a soft Brexit was the best option. The survey findings chimed with comments from veteran retailer Lord (Stuart) Rose who told The Mail on Sunday that Britain was risking ‘economic suicide’ if it failed to reach a good deal.

    The consensus is that there must be an orderly transition – but Theresa May is finished: It might seem that Theresa May, in calling an election, made the worst such miscalculation since Ted Heath’s in February 1974. But it was worse than that. Heath lost to Harold Wilson, a former prime minister of huge stature. Mrs May’s adversary was Jeremy Corbyn, who until early on 9 June was a figure of contempt for almost her entire party. The humiliation is abject. So intent are the Tories on survival, however, that apportioning blame has taken a lower priority; but MPs feel the burden rests with May, which explains why she is on borrowed time.Tories don’t want a leadership contest yet: the Democratic Unionist Party must be squared, the Queen’s Speech (largely anodyne) secured and the Brexit negotiations embarked upon. Graham Brady, whose stature was never negligible but has rocketed in his conduct as chair of the 1922 Committee, has decreed the boat must not be rocked. Michael Gove is back, broadcasting unity. The speed with which Boris Johnson denied stories that he was “on manoeuvres” suggested some self-knowledge but also a sense of siege, in which only if everybody keeps his head can a Tory government survive.The anger in the aftermath of the result has mildly abated. The bad news for May is that, even when calmer, most of those on whose support she depends still believe she cannot lead them into an election. One suggested she should use her party conference speech in October to say, “Thank you and good night,” and declare the contest for her successor open. Another, angrier, said he would be astonished if she lasted that long. 

    Britain and Europe lock horns over 'Brexit bill' on day one of talks : Britain and Europe locked horns over the thorny issue of the so-called “Brexit bill” on day one of the talks to begin Britain’s withdrawal from the European Union. After initial pleasantries for the cameras at the European Commission headquarters in Brussels, David Davis, the Brexit secretary and Michel Barnier, the EU’s chief negotiator and their teams were soon at loggerheads. One of the biggest disagreements in the coming talks came to the surface after UK negotiators questioned the legal rationale for the €100bn gross settlement that the 27 EU members states are demanding from the UK. “They question that there is a legal basis for an exit payment," a senior EU official told Reuters, reflecting EU nervousness that Britain will not pay up enough to cover the €10bn euro per year black hole that will be left in EU budgets after Brexit. UK negotiating sources confirmed that the British side had indeed demanded the EU explain its legal rationale for an opening demand that Philip Hammond, the Chancellor, described last weekend as some of the most “egregious” ever made. “We asked them to explain what they saw as the legal basis, which is not the same thing as saying there is ‘no legal basis’,” the UK source said. “We asked a large number of questions on the issues.”

    Brexit: UK caves in to EU’s demand to settle divorce before future trade on first day of talks | The Independent: Britain caved in to the EU on the opening day of the Brexit talks, when it agreed to settle its “divorce” before trying to negotiate a future trade deal. In a major defeat, Brexit Secretary David Davis was forced to drop his central demand for the two strands of the negotiations to be staged in parallel, within hours of arriving in Brussels. Last month, Mr Davis vowed to wage the “row of the summer” to secure immediate talks on a free trade agreement – predicting an early collapse if the EU refused to give way.But both sides have now agreed to set up working groups on EU citizens’ rights, the size of Britain’s “divorce bill” and borders – but not, crucially, future trade. At a press conference, Mr Davis was forced to concede that the talks would only move on to trade when the EU decided “enough progress” had been made on its three priorities. Asked if the “weakness of your negotiating position” had been exposed, Mr Davis put on a brave face, claiming: “It’s not when it starts but how it finishes that matters.” Ahead of the opening day, the UK had also promised to unveil a “generous offer” to end the row over the future rights of three million EU citizens in the UK and 1.2 million British ex-pats in the EU. However, Mr Davis said the offer would not be published until next Monday, after Theresa May briefs EU leaders on her intentions at a summit at the end of this week. Further rows are expected over the cut-off date for granting rights and whether EU citizens can bring in relatives in perpetuity, including from third countries. Significantly, Mr Davis said he would tell Labour and other parties about the Government’s plans in advance – reflecting its weak position, with no Commons majority. Speaking in Brussels, Michel Barnier, the EU's chief Brexit negotiator, made clear where the power lay in the talks when he said Britain had bowed to the EU’s demands for two phases. 

    Conservatives Prepare "Secret Plot" To Oust UK's May If She Backs Off "Hard Brexit" The walls are closing in on UK's embattled prime minister Theresa May, who after the disastrous outcome in the general election, and following a torrid week in which she faced fierce criticism for her handling of the Grenfell Tower catastrophe, in which 58 people are now presumed dead, is reportedly facing what the Telegraph calls a "secret plot" - well, not so secret any more - involving a "stalking horse" challenge to remove her as prime minister if she caves to Labour demands, and waters down the "Hard Brexit."With the NYT reporting that "‘Soft Brexit’ Forces Rise in Britain on the Eve of Talks" scheduled for Monday, (despite 70% of Britons still supporting Brexit according to a Thursday YouGov poll), the Telegraph reports that according to leading Eurosceptic MPs they are prepared to mount an immediate leadership challenge if Mrs May deviates from her original plan. The British publication adds that "conservative MPs – including Cabinet ministers – have concluded that Mrs May cannot lead them into the next election and they are now discussing when she could go.Fearing that the chorus of "soft Brexit" demands rising across the UK following May's sudden weakness, while Germany's economy minister Brigitte Zypries going so far as telling Reuters that an outright "reversal of Britain's decision to leave the European Union would be great," Eurosceptic MPs have warned that any attempt to keep Britain in the customs union and single market or any leeway for the European Court of Justice to retain an oversight function will trigger an “overnight” coup.

    Boris Johnson and David Davis emerge as favourites to replace Theresa May - – Boris Johnson and David Davis have emerged as the leading contenders to be the next Conservative Party leader as Prime Minister Theresa May's position looks more precarious by the day. May is under huge pressure to turn her fortunes around after her plan to increase her parliamentary majority in this month's election spectacularly backfired. The Tories lost 13 seats, resulting in a hung parliament. The prime minister has also faced severe criticism over her handling of last week's Grenfell Tower fire, in which she decided not to meet residents affected by the tragedy, unlike the Queen and Labour leader Jeremy Corbyn. Brexit Secretary Davis — who begins negotiations with the EU on Monday morning — is seen by Tories within the parliamentary party as the "unity candidate" to succeed May and lead the country, the Telegraph reported. Davis has said that he is aiming to get "a deal like no other in history," from the EU. Foreign Secretary Johnson is also being discussed as a possible person to replace May, but Davis appears to be in a stronger position to make a leadership bid if the opportunity were to arise. The Daily Telegraph added that sources close to Johnson said that Davis would be a "serious contender" for the leadership if May were to resign. On Sunday, Johnson was forced to deny that he had started planning his challenge for the leadership after he was seen meeting with Sir Michael Fallon, a key cabinet ally of May, on Saturday night at a pub in Kent. Johnson was spotted having a pint and a lengthy discussion with Fallon, the defence secretary, at the Bricklayer's Arms in Chipstead.  Davis previously challenged for the Tory leadership in 2001 and 2005, coming 4th and 2nd respectively. Last year Johnson was expected to run for leader but stepped out of the race after ally Michael Gove decided not to back the foreign secretary.

    The Queen’s Speech marks a shift in favour of a softer Brexit - The real story behind Theresa May’s delayed presentation of her Government’s programme is the change in the balance of power in favour of those who want to prioritise the British economic interest as we leave the EU. It may be harder than usual to make sense of the Queen’s Speech this year. Some of the most significant things about the Government’s programme are the measures that will not be in it: the bill to withdraw winter fuel payments from better-off pensioners; the bill to end triple-lock rises to the state pension; and the bill to make homeowners pay for their own social care visits. Other measures will not be laid before you, as Her Majesty might put it. There will be no repeal of the Fixed-term Parliaments Act. The new constituency boundaries, supposed to be finalised next year, will probably not take effect. And the creation of new selective schools seems rather unlikely. Instead, the Government has put together some nonsense about rockets and some environmentally friendly – that is, recycled – legislation. There will be another bill for HS2 and electric cars. The first is the wrong priority, but the second is a good one. There will be welcome bills to cut excessive whiplash claims and to ban lettings fees. The main business of this Parliament will be the Great Repeal Bill. This is the bill needed to end our membership of the European Union and at the same time to transpose EU law to the UK statute book. In addition, there will be an immigration bill to lay down the rules for when EU freedom of movement ends, and a trade bill – added to the Queen’s Speech at the last minute by Liam Fox, the International Trade Secretary – to prepare for trade deals outside the EU. 

    No deal Brexit unacceptable, 30 Tory MPs tell Number 10 -- At least 30 Conservative MPs have indicated to their own Government that they will not accept leaving the European Union without an agreed deal. Sky News has been told the MPs informed whips that the economic impact of a "cliff-edge" Brexit, alongside the failure of the Conservatives to win a majority for its manifesto, should lead to a rethink of the position that "no deal is better than a bad deal". The phrase was one of the key planks of Theresa May's Lancaster House Brexit speech and the strategy of David Davis' Department for Exiting the European Union. It was also mentioned in the Conservative manifesto. One former minister told Sky News that "no deal is now dead", and anticipated a transition phase of five to 10 years inside the European Economic Area. The MPs are pointing to disappointing Conservative election results in London, Birmingham and big cities across the M4 corridor, and among the under-45s, as a reason for a rethink. 

    Soros Says U.K. Is Approaching ‘Tipping Point’ as Brexit Bites - Economic reality is catching up with the U.K., where it is becoming clear that leaving the European Union will lead to lower living standards, billionaire investor George Soros said. “We are fast approaching the tipping point that characterizes all unsustainable economic developments,” Soros wrote in an article published Monday on the website of the Project Syndicate news organization. “The fact is that Brexit is a lose-lose proposition, harmful both to Britain and the European Union. It cannot be undone, but people can change their minds. Apparently, this is happening.” Although the U.K. economy initially defied predictions of an immediate slowdown after the surprise Brexit vote, signs are now emerging that consumer spending is faltering as the weaker pound drives up prices. Economists in Bloomberg’s latest monthly survey see inflation reaching 3 percent by the end of the year. Bank of England Governor Mark Carney, in a speech at London’s Mansion House on Tuesday, said domestic inflation pressures remain subdued and signaled he isn’t in a hurry to raise interest rates. In his first major comments in six weeks, he also said he wants to see how the economy responds to the “reality of Brexit negotiations.” The pound fell after the remarks. Soros said Britain’s eventual exit from the EU will take at least five years to complete, during which the country will probably hold another election. “If all went well, the two parties may want to remarry even before they have divorced,” he wrote. 

    Brexit: UK offer on EU citizens a good start, says Merkel - BBC - German Chancellor Angela Merkel has described UK plans to ensure the rights of EU citizens in Britain after Brexit as "a good start". However, she said there were "many, many other questions" about Brexit and there was "still a lot to do". The UK proposal was unveiled by Prime Minister Theresa May at an EU summit in Brussels on Thursday. It would grant EU migrants who had lived in the UK for five years at the cut-off date new "UK settled status". The cut-off date has yet to be announced, but will be some time between March 2017 and the moment the UK actually leaves the European Union. Those who qualify for settled status will be allowed to stay in the country and access health, education and other benefits. The plan would affect 3.2 million EU citizens now living in the UK, around a million of whom have lived in the country less than five years. The exact details on what happens to those million people unclear, but it is thought some will be allowed to build up their years to allow them to apply for settled status. 

    Inside the dinner party from hell: What really went on when Theresa May faced her EU foes -- It was intended as a big bang moment when Theresa May went to Brussels to reset the troubled Brexit negotiations by unveiling the UK’s “generous offer” towards the three million EU citizens who live and work in Britain.But to judge by the ashen and downcast look on the Prime Minister’s face as she departed a late-night dinner of EU leaders, the big bang in Brussels had turned into something of a damp squib.As the 27 other leaders toyed with their dessert of macerated cherries and almond ice cream, Mrs May outlined her offer to allow all three million EU citizens to remain in the UK with the same rights and welfare benefits as British people, but those rights would be enshrined in UK law.For the first time, Mrs May had directly and personally confronted the EU’s own red line that Britain’s withdrawal agreement must be policed by the European Court of Justice – a position that UK negotiators say no sovereign country could ever accept. There was polite tension in the room.Before the event, Donald Tusk had said that EU leaders would not even engage with Mrs May, out of respect for the sanctity of the official negotiations, but an EU diplomatic source told The Telegraph that several member states did tackle the prime minister. “They asked how you could guarantee the rights of EU citizens, founded in EU law, without allowing the jurisdiction of the ECJ,” the source said, “but Mrs May was very clear. She just said there was ‘no way’ this would happen.”Mrs May then left the remaining 27 leaders to digest the broad outlines of the British offer – although she declined to provide more of the details that will be released on Monday to parliament, to the frustration of some leaders.“The tone was cordial when Mrs May was in there,” the source added, "but it was a bit like having your elderly aunt over for dinner; after she'd been sent off to bed everyone sat around complaining about her.”The chief complaint was the Mrs May had crow-barred Brexit onto the agenda of the EU leaders’ quarterly summit against the will of many leaders, and then only delivered a vague outline of the UK plan that begged nearly as many questions as it answered.“The feeling was that it would have been better if Mrs May had either said nothing or given the leaders everything. What we got was something in-between and a sense that Mrs May is still trying to play games by getting around the formal process,” the source added

    UK factories have best month for orders since 1988: CBI | Reuters: British factory orders have hit their highest level in nearly 30 years, according to a monthly Confederation of British Industry survey which is likely to encourage Bank of England policymakers who favor an interest rate hike. The CBI said its factory order book balance jumped to +16 in June from +9 in May, hitting its highest level since 1988. Export order growth was its strongest in 22 years, the CBI said, helped by the fall in the pound that was triggered by last year's Brexit vote. The strong performance by manufacturers will be noted by the BoE, where three members of the eight-strong Monetary Policy Committee last week voted to raise rates, citing among other factors a pick-up in exports and investment which could help to offset a squeeze in spending for domestic consumers. On Wednesday, the BoE's chief economist, Andy Haldane, said he was likely to vote for a rate hike too later this year, as long as the economic data justified it.

    U.K. official says material in deadly London high-rise fire was illegal - — The British government sought to defend itself from accusations it hadn’t done enough to prevent the deadly fire that swept through a London high-rise last week, saying the cladding that appears to have contributed to the fire’s spread is already banned for use on tall buildings in the U.K. At least 58 people are presumed dead from the fire that ripped through a west London low-income residential tower, police said over the weekend, warning that the number might change as the search operation continues. Residents, who had complained for years that the building wasn’t fire-safe, said the newly installed cladding may have contributed to the fire’s quick spread. Asked if the government would implement a ban on the type of cladding used in Grenfell Tower, a 24-story building consumed by a blaze early Wednesday, Treasury chief Philip Hammond on Sunday said: “My understanding is that the cladding in question, this flammable cladding, which is banned in Europe and the U.S., is also banned here.” “So there are two separate questions. One is: Are our regulations correct, do they permit the right kind of materials, ban the wrong kind of materials?”, Hammond told the British Broadcasting Corp. “Second question is: Were they correctly complied with?”

    Van Slams Into Pedestrians Near London Mosque Leaving "Number Of Casualties", Driver Arrested -- A van plowed into pedestrians on Seven Sisters road in the Finsbury Park area in north London just after 12:20am London Time, in what the police has described a "major incident." There are "a number of casualties being worked on at the scene," London police said in a statement, with many injured according to initial press reports. The incident happened near the prominent Finsbury Mosque as witnesses claim the driver intentionally struck the victims; a male driver has been taken into police custody. LBC radio adds that there has been a "huge emergency response" and ambulances have been dispatched to help the injured.This racist bastard ran over innocent civilians on their way home from taraweh #FinsburyPark — Didier (@Known_As_H) June 18, 2017   Some social media reports describe the attack as "Islamophobic", and described the attack as a van "randomly swerving off the main road and running over several Muslim men." According to media reports, there has been is a massive police response and multiple ambulances were on scene. There was no immediate word on an exact number of victims according to LBC, whose live broadcast can be heard here. According to the Guardian, Al Qaeda operatives including the “shoebomber” Richard Reid and Zacarias Moussaoui attended the Finsbury Park mosque. In 2002, weapons training had taken place inside the building. The mosque rose to notoriety when Abu Hamza al-Masri became Imam of the Mosque due to his extremist ideologies and views on terrorism.

    How a crippling shortage of analysts let the London Bridge attackers through - Over four decades, intelligence gathering within Britain’s security services has evolved beyond comparison.  The worry, according to experts, is whether they are acquiring too much. The information-collecting machine grew even larger when the Investigatory Powers Act passed with little fanfare last November, handing UK intelligence agencies a comprehensive range of tools for snooping and hacking unparalleled in any other country in western Europe, and even the US. What is already clear following last Saturday’s attack, during which three attackers killed eight people and injured almost 50 in an eight-minute rampage, is that Britain’s security services had collated a surfeit of reliable, well-sourced material on the perpetrators. Of the London Bridge attackers, Khuram Butt, 27, had been reported to the anti-terror hotline in 2015 and investigated by MI5 for his highly public ties to the banned al-Muhajiroun network. Another, Youssef Zaghba, 22, was interrogated by Italian police, who told UK intelligence he was at risk of radicalisation. He was also added to the Schengen Information System, an EU-wide database that gives UK police details of 8,000 jihadis in Europe. The pattern was repeated in the two attacks that preceded the latest atrocity. The suicide bomber Salman Abedi, 22, who carried out the Manchester attack was known to MI5 and categorised under its prioritisation matrix as P4 – priority 4 – which denotes suspects who might be at risk of re-engagement but are deemed not to be planning an attack and therefore downgraded as a security risk. Khalid Masood, 52, who carried out March’s Westminster Bridge attack using an almost identical modus operandi to the London Bridge attack, was also classified in the P4 tier at the time, essentially regarded as an Islamist but not a threat. So why did they all slip through the net? Some security experts warn of an analytical deficit in the heart of the government’s intelligence infrastructure, claiming a lack of human resources to decode and contextualise the myriad snippets of information, terabytes of chatter, tipoffs, sightings and wiretaps that cumulatively help to form the modern intelligence picture.