Easier Financial Conditions Will Keep the Fed on Track - Tim Duy - The path laid out by the Federal Reserve at the beginning of the year for three interest-rate increases plus the start of reducing its $4.5 trillion balance sheet looks shaky due to the slowdown in inflation. There’s no question that the Fed is nervous about the persistent inflation shortfall. Chair Janet Yellen made note of the issue during her congressional testimony earlier this month. That said, the Fed will balance the inflation data against the broader economic backdrop of ongoing job growth and easier financial conditions. If the latter two trends continue, policy makers will be hard-pressed to rein in existing rate hike plans even if inflation continues to fall short of their forecasts. The traditionalists at the Fed, including Yellen, retain their fundamental Phillips curve framework. They think it is only a matter of time before the Phillips curve is proved true and sends inflation higher, especially if monthly job growth remains well above the 100,000 level. They do not want to find themselves well below their estimate of the neutral interest rate should inflation accelerate. Moreover, they have reason to retain faith in their fundamental forecast that inflation will return to target given that financial conditions have eased, not tightened, in response to the Fed’s five rate hikes in this cycle. Easier financial conditions affect the Fed in three ways. First, officials will associate them with faster economic growth. But they don’t want so much growth that the unemployment rate falls too far below the natural rate. At the current pace of job growth, that seems likely. Second, some members will associate easier financial conditions with financial instability. The dynamics of the last two cycles leave them wary of recreating the same conditions a third time. They will worry that halting the current path of monetary policy only sets the stage for more froth in financial markets down the road -- markets that Yellen has already called “somewhat rich.” Third, a falling dollar is contributing to easier financial conditions. The Fed will see that as another reason to expect their inflation forecasts to become reality after the impact of the recent “special factors” restraining consumer prices fade.
FOMC Statement: No Change to Policy, Balance Sheet Change Coming "Relatively Soon" -- FOMC Statement: Information received since the Federal Open Market Committee met in June indicates that the labor market has continued to strengthen and that economic activity has been rising moderately so far this year. Job gains have been solid, on average, since the beginning of the year, and the unemployment rate has declined. Household spending and business fixed investment have continued to expand. On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee continues to expect that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace, and labor market conditions will strengthen somewhat further. Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely. [...] For the time being, the Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee expects to begin implementing its balance sheet normalization program relatively soon, provided that the economy evolves broadly as anticipated; this program is described in the June 2017 Addendum to the Committee's Policy Normalization Principles and Plans.
Redacted Version of the July 2017 FOMC Statement – The June and July FOMC statements side by side, with comments on how July changed from June
Fed says balance-sheet unwind to start 'relatively soon --Federal Reserve officials said they would begin running off their $4.5 trillion balance sheet “relatively soon” and left their benchmark policy rate unchanged as they assess progress toward their inflation goal. The start of balance-sheet normalization — possibly as soon as September — is another policy milestone in an economic recovery now in its ninth year. The Fed bought trillions of dollars of securities to lower long-term borrowing costs after cutting the main interest rate to zero in December 2008. “Near-term risks to the economic outlook appear roughly balanced,” the Federal Open Market Committee said in a statement Wednesday following a two-day meeting in Washington. “Household spending and business fixed investment have continued to expand.” Fed watchers had anticipated that the inclusion of the term “relatively soon” would signal the central bank could announce the timing of the balance-sheet reduction program at its next meeting, scheduled for Sept. 19-20. U.S. stocks rose slightly and 10-year Treasury yields fell following the Fed’s statement. “I expect an announcement of the onset of the balance-sheet reduction at the conclusion of the September meeting, effective on the first of October,” Carl Tannenbaum, chief economist at Northern Trust Corp. in Chicago, said after Wednesday’s statement. U.S. central bankers have raised the benchmark policy rate four times since they began removing emergency policy in December 2015, and project another increase before the end of this year. In June, the FOMC outlined gradually rising runoff caps for maturing Treasuries and mortgage-related securities, and said the program would start “this year.” Fed Chair Janet Yellen has allowed the labor market to strengthen while inflation has remained lower than the 2% goal of officials, with price pressures declining in recent months. The target range for the benchmark federal funds rate was held at 1% to 1.25%. Wednesday’s statement highlighted that a period of weak inflation continues. “On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2%,” the statement said. “The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the statement said.
Fed Watch: FOMC Snoozefest - The Federal Reserve completed its July meeting with statement that pretty much everyone anticipated in advance. Interest rates were left unchanged and the Fed opened the door to begin balance sheet reduction "relatively soon." That means September. There was no reason to believe that the Fed does not still expect a third rate hike for this year which, if it comes, will be in December. That hike is of course data dependent. A couple of quick notes. Regarding balance sheet reduction, I think this via Bloomberg is correct:“September is the most likely outcome” for the launch of the balance-sheet drawdown, said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “But I can’t rule out the idea that they would wait until November if the debt ceiling really looks messy.”Clearly, the Fed will stand pat if certain policymakers in Congress and the White House (you know who you are) insist on sending the US economy down the path of debt default (I can't believe I even have to consider such insanity). On inflation, some I think interpreted this as dovish:On a 12-month basis, overall inflation and the measure excluding food and energy prices have declined and are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance. First, this is simply a factual statement, an acknowledgement of what everyone and their brother already knows. Second, what is important is the forecast, and that remains unchanged:Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee's 2 percent objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely. And third, pay attention to the "12-month" language that first appeared in the May statement. Pay close attention. They Fed is telling us to stop paying attention to all those year-over-year inflation charts we like to make. They have accepted that level effects from inflation shortfalls in the first half of this year will live in the year-over-year numbers until next year. Pay attention to the path of the month-over-month numbers (blue bars):
The Fed Remains on Course – to Trouble - The Federal Reserve (Fed) is widely expected to continue to tighten its monetary policy this year. According to a latest Reuters Poll, the Fed is likely to start shrinking its US$4 trillion balance sheet in September and, moreover, raise further its key interest rate, which is currently standing in a range of 1.0 to 1.25 percent, in the fourth quarter this year.According to mainstream economic wisdom, the time has come for the US economy to return to a more normal level of interest rates. Industrial output is expanding at a decent clip, official unemployment has declined markedly, and prices in the stock and housing market show a sustained upward drift. Considering these circumstances, the US economy can now shoulder a tighter monetary policy, it is said.It should be understood, however, that there will be side-effects, even unintended consequences, if and when the Fed hikes interest rates further. Most importantly, the Fed doesn’t know where the “neutral interest rate” is. If it does too much, the economy will collapse. If it does not do enough, it will only prolong the artificial boom, causing ongoing malinvestment and, ultimately, another crisis. Admittedly, this is nothing new: The Fed has always been a cause of boom and bust. It sets into motion an artificial boom by issuing new fiat money through bank credit expansion. Such a boom, however, must sooner rather than later collapse and turn into a bust. It is, therefore, strongly advised to expect nothing good coming out of Fed interventions.
Why the Fed's taper plans are less likely to shock rates this time -- Mortgage rates dropped for the second consecutive week, although the yield on the benchmark 10-year Treasury actually increased during the period, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 3.92% for the week ending July 27, down from last week when it averaged 3.96%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.48%.
Can the Fed and ECB Work Together To Reduce Imbalances? - Brad Setser - Fed Governor Lael Brainard’s speech on central bank coordination last week was quite interesting—I think it should be read for far more than a signal on when the Fed is likely to next raise the policy rate. For one, Brainard argues that the ECB (and BoJ’s) asset purchases have had an impact on global yields. Makes sense. The ECB and BoJ are both buying more than their respective governments are issuing, so they are reducing the net supply of eurozone and Japanese government bonds on the market. That forces bond investors into other assets—be it short-term deposits at the ECB, bank bonds in Europe, or U.S. bonds of various stripes. That though wasn’t the central banking orthodoxy a few years ago. The spillover of U.S. asset purchases onto say European government bond yields was not apparent back when the U.S. was doing QE. In fact, QE2 generally coincided with generally rising eurozone government bond yields. In part because the eurozone was experiencing its own version of a self-created government funding crisis, as the creation of the euro meant that countries that previously issued bonds in their own currency were now issuing bonds in the ECB’s currency so to speak. And in part because QE2 coincided with a large U.S. fiscal deficit—it reduced the new supply of Treasuries investors needed to absorb, but it didn’t on net remove supply from the market.* But the really interesting bit isn’t the technical argument about global spillovers from asset purchases. It is the hint—at least in my reading—that the Fed and the ECB should pursue different tightening strategies. Brainard postulates that tightening through increasing the policy rate has a bigger impact on the exchange rate than tightening through balance sheet reduction. And thus the choice of central bank policy instrument can have an impact on net exports, and ultimately the equilibrium current account deficit. If I read her comments correctly, this argues for putting a priority in the U.S. on balance sheet reduction rather than raising the policy rate. That is because the dollar is already strong, and already distorting (in my view) the composition of U.S. output. An ECB that tightens through rates and a Fed that relies on balance sheet roll off, in theory, would work together to in effect weaken the dollar and reduce the U.S. trade deficit and European surplus.
U.S. Inflation Remains Low, and That’s a Problem -- The United States has a problem: not enough inflation.That notion is a bit of a head-scratcher. Most people don’t like inflation. They would prefer that a dollar tomorrow be worth the same as a dollar today.But a recent drop in inflation may be a sign of fresh economic weakness and is perplexing to Federal Reserve officials who are now wrapping up the central bank’s stimulus campaign.The Federal Reserve thinks modest inflation has important economic benefits, and it has aimed since 2012 to keep prices rising at an annual pace of 2 percent. The problem is that the Fed is on track to fail for the sixth straight year. Inflation has been stubbornly sluggish.A little inflation can brighten the economic mood, causing wages and corporate profits to rise more quickly. Economists like to point out that this is an illusion. If everyone is making more money, then no one can buy more stuff. Prices just go up. But the evidence suggests people enjoy the illusion and, importantly, they respond to the illusion by behaving in ways that increase actual economic growth, for example by working harder. The Fed’s chairwoman, Janet L. Yellen, told Congress this month that she expects inflation to rebound. But she said the Fed could change course if weakness persists, by, for example, not moving forward with additional interest rate increases. “It’s premature to reach the judgment that we’re not on the path to 2 percent inflation over the next couple of years,” Ms. Yellen said. “We’re watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot will be persistent.” The Fed’s policy-making committee will meet Tuesday and Wednesday but it is expected to defer major decisions until later in the year. Analysts expect the Fed to announce in September that it will start to reduce its holdings of Treasuries and mortgage bonds. The Fed is expected to leave its benchmark interest rate unchanged at least until December. “If you see inflation running below target persistently, for so long, it’s really hard to get around the idea that, despite everything, monetary policy has actually not delivered sufficient accommodation,” said Peter Ireland, an economist at Boston College. “It’s a reason not to clamor for additional rate hikes on top of what we’ve already seen.”
Chicago Fed: Economic Growth Picks Up in June - "Index points to a pickup in economic growth in June." This is the headline for today's release of the Chicago Fed's National Activity Index, and here is the opening paragraph from the report:Led by increases in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved up to +0.13 in June from –0.30 in May. All four broad categories of indicators that make up the index increased from May, and three of the four categories made positive contributions to the index in June. The index’s three-month moving average, CFNAI-MA3, increased to +0.06 in June from –0.04 in May. [Link to News Release] The previous four out of five months were revised. The Chicago Fed's National Activity Index (CFNAI) is a monthly indicator designed to gauge overall economic activity and related inflationary pressure. It is a composite of 85 monthly indicators as explained in this background PDF file on the Chicago Fed's website. The index is constructed so a zero value for the index indicates that the national economy is expanding at its historical trend rate of growth. Negative values indicate below-average growth, and positive values indicate above-average growth. The first chart below shows the recent behavior of the index since 2007. The red dots show the indicator itself, which is quite noisy, together with the 3-month moving average (CFNAI-MA3), which is more useful as an indicator of the actual trend for coincident economic activity.
Q2 GDP Advance Estimate: Real GDP at 2.6% - The Advance Estimate for Q2 GDP, to one decimal, came in at 2.6% (2.57% to two decimal places), an increase over 1.2% for the Q1 Third Estimate. Investing.com had a consensus of 2.6%. Major annual revisions were made going back to Q1 of 2014. Here is the slightly abbreviated opening text from the Bureau of Economic Analysis news release: Real gross domestic product increased at an annual rate of 2.6 percent in the second quarter of 2017 (table 1), according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent (revised).The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see “Source Data for the Advance Estimate” on page 3). The "second" estimate for the second quarter, based on more complete data, will be released on August 30, 2017. [Full Release] Here is a look at Quarterly GDP since Q2 1947. Prior to 1947, GDP was an annual calculation. To be more precise, the chart shows is the annualized percentage change from the preceding quarter in Real (inflation-adjusted) Gross Domestic Product. We've also included recessions, which are determined by the National Bureau of Economic Research (NBER). Also illustrated are the 3.22% average (arithmetic mean) and the 10-year moving average, currently at 1.41%.
BEA: Real GDP increased at 2.6% Annualized Rate in Q2 --From the BEA: Gross Domestic Product: Second Quarter 2017 (Advance Estimate) Real gross domestic product increased at an annual rate of 2.6 percent in the second quarter of 2017, according to the "advance" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent (revised)..The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), nonresidential fixed investment, exports, and federal government spending that were partly offset by negative contributions from private residential fixed investment, private inventory investment, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP growth in the second quarter reflected a smaller decrease in private inventory investment, an acceleration in PCE, and an upturn in federal government spending. These movements were partly offset by a downturn in residential fixed investment and decelerations in exports and in nonresidential fixed investment. The advance Q2 GDP report, with 2.6% annualized growth, was at expectations. Personal consumption expenditures (PCE) increased at 2.8% annualized rate in Q2, up from 1.9% in Q1. Residential investment (RI) decreased at a 6.8% pace. Equipment investment increased at a 8.2% annualized rate, and investment in non-residential structures increased at a 5.2% pace.
Q2 GDP Misses, Q1 Revised Lower, Core PCE Tumbles -- In the latest double negative whammy for the economy, not only did Q2 GDP print fractionally less than expected, at 2.6% vs consensus expectations of 2.7%, but Q1 GDP of 1.4% was also revised slightly lower, from 1.4% to 1.2%, while the Fed's favorite inflationary metric, core PCE, tumbled from a downward revised 1.8% to 0.9%.The BEA also released its annual update of GDP figures using "newly available and revised source data" for the 2014 - 2016 period. From the fourth quarter of 2013 to the first quarter of 2017, real GDP increased at an annual average rate of 2.1 percent, the same as previously estimated. One amusing finding here is that following the revisions, Q3 2014 GDP is now said to have been 5.2%, while that abysmal Q1 2015 GDP print which was blamed on the weather is now 3.2%.As part of the revision, Personal consumption got a boost last quarter, when it was revised to 1.9%, while the Q2 number was a solid 2.8%. The GDP price index rose 1% in 2Q after rising 2.0% prior quarter.The closely watched by the Fed core PCE q/q rose 0.9% in 2Q after rising 1.8% prior quarter, suggesting lower for longer will persist indefinitely.The second?quarter increase in real GDP reflected increases in both consumer spending on goods and services as well as increases in business investment, exports, and federal government spending. The increase in consumer spending was led by increases in housing and utilities, health care, and recreational goods and vehicles. The increase in business investment reflected increases in all three components: structures, equipment, and intellectual property products.Offsetting these increases in real GDP were declines in housing investment, inventory investment, and state and local government s pending.Specifically, final sales to private domestic purchasers q/q rose 2.7% in 2Q after rising 3.1% prior quarter. Nonresidential fixed investment, or spending on equipment, structures and intellectual property rose 5.2% in 2Q after rising 7.2% prior quarter.
US Growth Rebounds In The Second Quarter - Economic activity revived in the second quarter, according to this morning’s “advance” GDP report published by the Bureau of Economic Analysis. Output increased 2.6%, which matched Econoday.com’s consensus forecast. The growth rate also marks an encouraging improvement over Q1’s pace, which was revised down slightly to a sluggish 1.2% rise. The critical factor in the Q2 rebound is the pick-up in consumer spending. Personal consumption expenditures (PCE) increased 2.8%, up from 1.9% in Q1. The acceleration in PCE was especially pronounced in sales of durable goods, which popped 6.3% in Q2 after a mild 0.1% decline in Q1. Drilling down into the major categories of GDP contributors shows that the faster rate of consumer spending compensated for relatively weaker inputs from other corners of the economy. PCE’s contribution to GDP picked up to 1.93 percentage points from 1.32 in Q1. Meanwhile, contributions from other key sectors edged lower. Non-residential fixed investment’s contribution ticked down to 0.64 percentage points from 0.86 in Q1. Residential fixed investment was a negative factor in Q2, subtracting 0.27 percentage points from GDP vs. a 0.41 contribution in the previous quarter. Overall, the resurgence in headline economic growth in Q2 — the strongest quarterly increase since 2016’s Q3 — confirms that 1) recession risk remains low for the immediate future and 2) a moderate pace of growth for Q3 is a reasonable forecast at the moment.“Consumers continue to drive the economy’s growth, but firmer business investment is also a plus,” says Mark Zandi, chief economist at Moody’s Analytics. “Weaker housing construction was the only significant drag on growth in the quarter.”
U.S. economy rebounds in the second quarter -- The U.S. economy rebounded strongly between April and June, government data showed Friday morning, as businesses invested more and consumers shelled out for furniture, washing machines and other goods. The country’s gross domestic product, a broad measure of economic activity, grew at an annualized pace of 2.6 percent in the second quarter of 2017, the Commerce Department said. Yet measures of inflation remained weak, casting more doubt on the Federal Reserve's plan to continue steadily raising interest rates. Economists had expected growth to rebound from a weaker reading in the first quarter, which is typically lower due to seasonal problems with measurement. GDP grew at an annual rate of 1.2 percent in the first quarter, compared with 1.8 percent growth in the fourth quarter of 2016. Less spending by state and local governments, as well as lower investment in housing and company inventories, dragged on growth in the second quarter. But those effects were offset by an increase in other types of investment, greater consumer spending and stronger exports. Growth was buoyed by investment from sectors like information technology and oil and gas, which is finally reinvesting in new infrastructure as global oil prices recover from previous lows, said Charles Seville, senior director at Fitch Ratings. “Investment, which has disappointed over the past couple years, is coming back, and that’s an encouraging sign for the future,” said Seville. While the 2.6 percent growth in the second quarter signals a rebound from the previous quarter, it still falls short of the 3 percent to 4 percent growth the Trump administration has been targeting. Many of President Trump's economic plans, including tax cuts and the administration's budget, rely on having higher economic growth to generate more revenue for the government. But while the current economic expansion is already the third-longest on record, rates of growth have remained stubbornly low, due to longer-run changes in the economy, such as the aging of the U.S. population. Data also released Friday by the Commerce Department showed that full-year annual growth fell from a peak of 2.9 percent in 2015 to just 1.5 percent in 2016, the slowest pace since the recession
Q2 GDP: Investment --First, the BEA released revisions of GDP data from 2014 through Q1 2017. In general, GDP was revised up slightly, although residential investment was revised down a little. Not a significant change. The first graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential structure investment trails the economy. In the graph, red is residential, green is equipment and software, and blue is investment in non-residential structures. So the usual pattern - both into and out of recessions is - red, green, blue. The dashed gray line is the contribution from the change in private inventories. Residential investment (RI) decreased at a 6.8% annual rate in Q1. Equipment investment increased at a 8.2% annual rate, and investment in non-residential structures increased at a 4.9% annual rate. On a 3 quarter trailing average basis, RI (red), equipment (green), and nonresidential structures (blue) are all positive. I'll post more on the components of non-residential investment once the supplemental data is released. I expect investment to be solid going forward, and for the economy to continue to grow. The second graph shows residential investment as a percent of GDP.Residential Investment as a percent of GDP decreased in Q2, but has generally been increasing. RI as a percent of GDP is only just above the bottom of the previous recessions - and I expect RI to continue to increase for the next few years. Note: Residential investment (RI) includes new single family structures, multifamily structures, home improvement, broker's commissions, and a few minor categories.
The Magic Of Revisions: How That Abysmal "Snowfall" Quarter Of 2015 Became 3.2% GDP -- Remember when in January of 2015, after a bout of heavy snowfall and cold weather across, everyone was certain that Q1 GDP would be a disaster? If not, here is a reminder from the WSJ: Brace for blizzards and other bad weather to hit the economy again this winter, though perhaps not as deeply as last year. The forecasting firm Macroeconomic Advisers on Thursday said heavy snowfall pounding the Northeast and parts of the Midwest will subtract 0.4 percentage point from gross domestic product growth in the first quarter. Last year was much worse, with a barrage of bad weather across a wider swath of the country taking an estimated 1.4 percentage point off growth in GDP, the broadest measure of economic output.This is what Forbes said at the time: "many economists and investors are pointing to snowy winter weather as the root of the weakness." And, as predicted, all these prediction came true because on April 29, 2015, when the BEAR released its first estimate of Q1 GDP, it said the US economy grew only 0.2%? The number was so bad, it prompted the BEA to unleash the infamous "double seasonal adjustment" to eliminate residual seasonality - i.e., stuff that should already have been ignored due to the original seasonal adjustments. Looking back, however, we can now revise the statement, because all those doom and gloom predictions came true "at the time" as today, as part of its Q2 GDP release, the BEA also released its annual revision of National Income and Product Accounts. What it shows is comic: while we already noted the broad based revision to the data, which resulted in a downward revision to GDP prints from Q3 2016 through Q1 of 2017, it was the "snowfall" quarter of 2015 that drew our attention. In the best example of revisionist economic history we have encountered in years, the BEA has completely forgotten all those worries about cold weather, which readers may recall prompted the Fed to push back on its fledgling tightening intentions in the start of 2015 worried about economic strength. And as a result, following a slew of revisions, what was originally a weather-crushed 0.2% GDP quarter is as of this moment, a nice and balmy 3.2%. And that's why all economic data is absolutely meaningless
Q2 Real GDP Per Capita: 1.95% Versus the 2.57% Headline Real GDP - The Advance Estimate for Q2 GDP came in at 2.6% (2.57% to two decimals), up from 1.2% in the Third Estimate of Q1 GDP. With a per-capita adjustment, the headline number is lower at 1.95% to two decimal points. Here is a chart of real GDP per capita growth since 1960. For this analysis, we've chained in today's dollar for the inflation adjustment. The per-capita calculation is based on quarterly aggregates of mid-month population estimates by the Bureau of Economic Analysis, which date from 1959 (hence our 1960 starting date for this chart, even though quarterly GDP has is available since 1947). The population data is available in the FRED series POPTHM. The logarithmic vertical axis ensures that the highlighted contractions have the same relative scale. The chart includes an exponential regression through the data using the Excel GROWTH function to give us a sense of the historical trend. The regression illustrates the fact that the trend since the Great Recession has a visibly lower slope than the long-term trend. In fact, the current GDP per-capita is 9.6% below the pre-recession trend.
Both long leading indicators in advance Q2 GDP turn negative --While Q2 GDP increased at a smart rate, there was bad news in both of the long leading indicators that are contained in the release.First of all, real private residential investment declined at a -6.8% annual rate. That's even worse when you take into account that the best measure is housing investment as a share of GDP. Since housing investment declined and GDP rose, that's an even bigger hit.Secondly, proprietors' income also declined slightly. Proprietors' income is a somewhat less reliable proxy for corporate income, which won't be reported for at least one more month. Corporate profits adjusted for unit labor costs had increased very slightly in Q1. Of course this could just be quarterly noise. But since it is pretty clear that we are in the latter stages of this expansion, these two declines could be portents of what is to come in a year or two.On the bright side, the employment cost index increased, even after adjusting for inflation. This is a median rather than an average measure, so it means that most workers saw some improvement in their pay in the second quarter. I'll update later with graphs once FRED posts the info.
ECRI Weekly Leading Index: YoY at 4.82%, Lowest in 11 Months - Today's release of the publicly available data from ECRI puts its Weekly Leading Index (WLI) at 144.2, down from the previous week. Year-over-year the four-week moving average of the indicator is now at 4.82%, down from 4.97% last week. The WLI Growth indicator is now at 2.8, up from the previous week. ECRI's most recent headline article states that their U.S. Future Inflation Guage indicator is signaling a downturn in inflation. They claim that using the Phillips curve does not give a full picture of cyclical upturns and downturns. Rather than use the Phillips curve or extrapolate inflation data, ECRI says their Future Inflation Guage is a better indicator and has correctly anticipated the late 1990s growth without inflation and last year's reflation trade. Read more Below is a chart of ECRI's smoothed year-over-year percent change since 2000 of their weekly leading index. The latest level is above where it was at the start of the last recession.
IMF Sharply Lowers US Growth Forecasts As Hopes For Fiscal Boost Fade - Bullish traders who insist that US economic fundamentals remain rock-solid despite tepid growth, inflation and other signs the postelection “Trump bump” in consumer confidence is already beginning to fade should take a look at the International Monetary Fund’s latest batch of quarterly forecasts for global growth.The fund left its all-world forecasts for 2017 and 2018 unchanged from its previous quarterly update, which was released in April: It anticipates 3.5% and 3.6% growth, respectively.However, those numbers mask a sharp decline in the fund's forecasts for US growth, which have been lowered sharply to reflect expectations that President Donald Trump's promised fiscal expansion package likely won't arrive until next year, according to a report published by the IMF. In an update that shouldn't surprise anyone who’s been following US macro data since the start of the year, the fund revised its forecasts for 2017 and 2018 down 0.2% to 2.1% and 0.4% to 2.1%. It continues to expect the US economy to expand by 1.6% in 2016. The fund said its decision to lower US growth forecasts reflects in part the weak growth experienced during the first quarter. But what it calls the “major factor” behind the revision, especially for 2018, is the assumption that “fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes. Market expectations of fiscal stimulus have also receded.”
Trump’s Growth Charade - Simon Johnson – Officials in President Donald Trump’s administration frequently talk about getting annual economic growth in the United States back above 3%. But they are doing more than just talking about it; their proposed budget actually assumes that they will succeed. If they do, it would represent a significant improvement over recent performance: the US economy has averaged less than 2% annual growth since 2000. And, while an increase to 3% might sound small, it would make an enormous difference in terms of employment and wages. Unfortunately, left to its own devices, the economy will most likely continue to sputter. And the policies that Trump’s Republican Party has proposed – for health care, taxes, and deregulation – will not make much difference. First, the US population is aging. As the baby boom generation (born after the e nd of World War II) retires, the proportion of retired people in the total population increases. Over time, this demographic shift has reduced US potential annual growth by perhaps as much as half a percentage point. The second economic constraint is the slowing rate of productivity growth. There was a major increase in average output per person in the post-World War II years, as better technology was developed across a wide range of sectors. And there were hopes in the 1990s that the information technology revolution would have a similar effect. But the impact on productivity has been disappointing. The third constraint stems from the 2008 financial crisis. One danger inherent in pushing for high growth is that it is always possible to juice an economy with short-term measures that encourage a lot of risk-taking and leverage in the financial system. Deregulation in the 1990s and early 2000s did exactly that, leading to slightly higher growth for a while – and then to a massive crash.
Foreigners Scramble To Buy US Debt Every Time Rates Rise - One of the persistent questions in 2017, has been how - with equities at all time highs - are Treasuries and other corporate bonds so strongly bid, and why is the 10Y still trading at a level that is more suggestive of a deflationary slump than an economic rebound.The answer it turns out, is to be found offshore, and was especially visible the day before the Fed's unexpectedly dovish Wednesday statement, when yields and spreads blew out.As Bank of America's credit strategist Hans Mikkelsen wrote in a Thursday note, when he observed the sharp move higher in yields and subsequent collapse at 2pm on Wednesday, "note the big rebound in net dealer-to-affiliate volumes following the recent notable increase in interest rates (Figure 3) - especially in the back end (Figure 4)." What the charts below show is the relative interest by offshore traders to buy (negative number) or sell (positive) US debt. What is most notable is that on the day yields and spreads spiked, so do foreign buying. In fact, in the 1-5 Year bukcet, foreigners bought the most debt in the past year. A note released also on Thursday by UBS confirms as much. According to UBS' Matthew Mish, "the critical marginal source of demand for US corporate debt has been non-US investors, primarily out of Japan, Asia as well as Europe. As we outlined previously they have accounted for nearly 40% of total investor flows into US corporate credit since 2014."
Morgan Stanley: "The Debt Ceiling Worries Us Most" -- In the latest Sunday Start report from Morgan Stanley's Andrew Sheets, the bank's chief cross-asset strategist looks at the current state of the market - "the S&P 500, Russell 2000 and NASDAQ have hit all-time highs. Volatility has plunged back down near all-time lows. Credit is tighter and yields have been stable" - and asks the same question posed by virtually everyone else in recent weeks : "what rattles this market. What breaks the egg?" Sheets, like the bank's equity research team (which recall believes the current market is a rerun of 1999 and sees up to another 30% surge in stocks) remains optimistic saying that "risks don't warrant a defensive view yet", … On the other hand, Sheets highlights one rising risk, namely his "high conviction that markets have passed the point where bad data can be offset with promises of further easing.. Which brings us to the biggest concern for the bank which recently beat Goldman Sachs in FICC revenue for the second straight quarter: politics, in general, and the debt ceiling in particular.One reason why we may not be seeing more aggressiveness is our final risk – politics. Multiple failures in the US to pass healthcare legislation, despite single-party control, raise questions about a whole host of other issues, from the debt ceiling, to the budget, to taxes. Meanwhile, news reports suggest that the ongoing probe by Special Counsel Robert Mueller is widening. Finally, here is what Sheets - along with many others, including the T-Bill market - believes is the biggest immediate risk to the market:The debt ceiling worries us most, given that action may need to be taken within as little as seven weeks. But on the other issues, we’re more relaxed. The Senate’s Healthcare bill had an approval rating of 17%, so we doubt its failure would be a hit to consumer confidence. The Special Counsel’s investigation, whatever the outcome, will likely take considerable time. Our economic baseline was already cautious with regard to fiscal stimulus, a long-held view of our policy team. And while tax cuts could boost the market temporarily, they could also lead to a more hawkish Fed, a classic ‘be careful what you wish for.’
Mnuchin: US will hit debt limit by Sept. 29 | TheHill: Treasury Secretary Steve Mnuchin informed Congress on Friday that action would be needed on the debt ceiling by September 29th. "Based upon our available information, I believe that it is critical that Congress act to increase the nation's borrowing authority by September 29, 2017. I urge Congress to act promptly on this important matter," Mnuchin wrote in a letter addressed to Speaker Paul Ryan (R-Wis.). The Treasury Department estimates it will run out of funds to pay its debts and interest on that date and financial markets will be watching loosely for action. If Congress fails to act, the U.S. would default.The date falls on a Friday and coincides with the last weekday of fiscal 2017. If a deal is not reached to fund the government, either through new appropriations or a continuing resolution, the government would also shut down on that date. The parallel deadlines could make it likely that agreements over handling the two fraught issues of debt limit and spending will be bundled together in negotiations between Congressional Democrats and Republicans. Previous showdowns over the debt limit in 2011 and 2013 spooked markets enough to cause ratings agency S&P to downgrade the U.S. credit rating, and led to billions in increased borrowing costs. Mnuchin had urged Congress to take care of the issue ahead of the August recess, which began Friday afternoon for the House.
Could The US Default Due To A Complexity Catastrophe? - Definitely. Front page story in today’s Washington Post by Damien Paletta reports that “Treasury chief hurtles toward fiasco,” the fiasco being a failure to raise the US debt ceiling in time to avoid a default. Trump has declared that Sec Mnuchin is responsible for this matter, which he should be, but somehow has not made a sufficiently definitive statement to keep his former Freedom Caucus big cheese OMB director, Mulvaney, from opining that Mnuchin is an out of it New York finance guy (Goldman Sachs even) who is not well connected in Washington, and he, Mulvaney, thinks that the dumb games he played as a Congressman threatening to default are appropriate for somebody in charge of all this. The deadline is approaching, although it might be somewhere between early September and mid-October, but at some point if the debt ceiling is not raised, the US will seriously default, something we have not seen, and I doubt that any deal Mulvaney might propose would get through this dysfunctional Congress. And the article reports that while Mnuchin wants a “clean raise” before the Congress really shuts down in August, well, according to WaPo, he does not have the “stature in Washington to press through a vote on a measure” supported by all previous Treasury Secretaries. Indeed, the article is right that he may not be able to do so, and the US may well seriously default on its debt for the first time, something the gang that Mulvaney has belonged to has declared is no big deal. We may be about to find out if that is correct or not. In thinking about this I have come to realize that part of the problem is that this is a very complicated issue, one that few people understand, and that this lack of understanding is self-propagating: that few understand it means that there are few who can teach those who do not understand it what it is about. The upshot is that an incredibly miniscule proportion of the US population has any remote idea what all this is about, so are not putting any pressure on these loud mouthed Congresspeople to behave reasonably. If in fact there is a default and it leads to a global financial crisis that puts the world economy back into a serious recession, well, who could have known that, and who will be to blame?
The balanced budget paradox - The balanced budget paradox is probably one of the most devastating phenomena haunting our economies. The harder politicians — usually on the advise of establishment economists — try to achieve balanced budgets for the public sector, the less likely they are to succeed in their endeavour. And the more the citizens have to pay for the concomitant austerity policies these wrong-headed politicians and economists recommend as “the sole solution.” Few issues in politics and economics are nowadays more discussed – and less understood – than public debt. Many raise their voices to urge for reducing the debt, but few explain why and in what way reducing the debt would be conducive to a better economy or a fairer society. And there are no limits to all the – especially macroeconomic –calamities and evils a large public debt is supposed to result in – unemployment, inflation, higher interest rates, lower productivity growth, increased burdens for subsequent generations, etc., etc. People usually care a lot about public sector budget deficits and debts, and are as a rule worried and negative. Drawing analogies from their own household’s economy, debt is seen as a sign of an imminent risk of default and hence a source of reprobation. But although no one can doubt the political and economic significance of public debt, there’s however no unanimity whatsoever among economists as to whether debt matters, and if so, why and in what way. And even less – one doesn’t know what is the “optimal” size of public debt.
Outside Research Organizations Can’t Replace CBO’s Budget Team – Don Marron - The House Freedom Caucus wants to eliminate the Budget Analysis Division at the Congressional Budget Office and rely on outside research organizations, including the Urban Institute, instead. As a former acting director of CBO and an Institute fellow at Urban, I think this is a terrible idea. It would harm fiscal policymaking and weaken the Congress.Here’s the proposal offered by Representatives Scott Perry (R-PA), Jim Jordan (R-OH), and Mark Meadows (R-NC): The Budget Analysis Division of the Congressional Budget Office, comprising 89 employees with annual salaries aggregating $15,000,000, is hereby abolished. The duties imposed by law and regulation upon the employees of that Division are hereby transferred to the Office of the Director of the Congressional Budget Office, who shall carry out such duties solely by facilitating and assimilating scoring data compiled by the Heritage Foundation, the American Enterprise Institute, the Brookings Institution, and the Urban Institute. We certainly appreciate the shout out. Here at Urban, we have amazing researchers who model policies involving health insurance, Social Security, taxes, food stamps, housing, and many other programs. We are proud of our work and try to be as helpful as possible to lawmakers across the political spectrum. But neither we nor other private organizations can replace CBO’s budget group. Our skills overlap, but we fill different niches in the policy ecosystem. Consider the sheer scope of CBO’s responsibilities. As Director Keith Hall noted in recent testimony, the agency expects to publish official scores of more than 600 pieces of legislation in the next year. The scores will estimate the spending and, usually with input from the Joint Committee on Taxation, the revenue implications of every provision in those bills. They will also assess whether the bills impose substantial mandates on the private sector or state, local, and tribal governments. To do this, CBO has staffers familiar with every nook and cranny of the government, from agriculture to veterans. In just the past week, CBO has published more than two dozen cost estimates covering everything from flood insurance to child care to maritime administration to sanctions on Russia, Iran, and North Korea. Not to mention scoring Senate proposals to repeal and possibly replace the Affordable Care Act. Only CBO and its White House equivalent, the Office of Management and Budget, have the capacity to model every facet of federal spending.
The fast-approaching defense budget 'train wreck' - Congressional Republicans trying to boost military spending by tens of billions of dollars face a major problem: Their efforts would run afoul of the law. Bills moving in the House and Senate would go beyond even the defense buildup pledged by President Donald Trump, providing money for more soldiers, fighter jets, warships and missile defenses than the Pentagon had requested. Story Continued Below But those proposals exceed the limits imposed by a 2011 budget law, demanded by Republican budget hawks, that caps spending and requires annual across-the-board cuts to rein in deficits. And that makes the defense budget yet another example of the internal GOP policy divides that have stymied the party on other major issues like health care. Some lawmakers fear Congress is heading toward a “disaster” or “train wreck” on defense spending — with no obvious pathway ahead to lift the caps. “If you use the painting-yourself-into-a-corner analogy, they’re not talking about how to get out of the corner,” said Adam Smith of Washington, ranking member of the House Armed Services Committee. “They’re talking about how much more floor space to paint.” Lifting the Budget Control Act’s caps for defense spending would require the consent of Democrats, who insist that any such hike be accompanied by increased domestic spending — a no-go for GOP budget hawks. Or lawmakers could stash the extra military funding into the Pentagon’s separate war account, as Congress has done repeatedly in the past six years. But that could run into trouble with Mick Mulvaney, director of the White House Office of Management and Budget, who has taken a hard line against the broad use of funds designated as directly supporting overseas military operations.
The Military Industrial Complex Is Undermining US National Security --One of a state’s most insidious mechanisms is the inefficiency of the military-industrial sector. When looking at the world's first superpower, this becomes all the more pronounced. Still, the ongoing problems highlighted by the F-35 program and failed missile interceptions by ABM systems are a good demonstration of how inefficiency in the US military sector has risen to worrying levels.,The main cause of these issues is related to the huge military-industrial complex that employs hundreds of thousands Americans directly or indirectly. The unhealthy composition of this power conglomerate often employs a revolving door involving politicians and board members from large arms-producing companies. This situation raises questions about corruption as well as a number of obvious conflicts of interest. It is no surprise, therefore, that Congress is increasingly willing to grant what almost amount to blank checks to finance military budgets, numbering in the hundreds of billions of dollars. The second factor that impacts negatively on the efficiency of the MIC is the propaganda to which the entire American system is subjected. Looking at the example of think-tanks, they are all practically funded, directly or indirectly, by the military-related industries or foreign governments (especially Qatar, Saudi Arabia and Israel). The role of think-tanks is to influence policymakers, creating a common view between components of the (deep) state.A problem arises when almost all experts and politicians participating in these Washington based think tanks come from federal agencies or industries tied to the military through contracts worth billions of dollars. Hardly offering any dissent from official or mainstream opinions on issue ranging from Russia to the F-35, politicians, experts and journalists all agree that Russia constitutes the main danger and that the F-35 program does not have any critical issues and is actually a superior weapon, two lies in full swing. Think-tanks offer no criticism, no change of policy, only echo chambers of lies and propaganda.
Trump to ban transgender people from all military service | TheHill: President Trump on Wednesday said he would ban transgender people from any military service. Trump made the announcement, which would represent a major shift in military policy, on Twitter. He said he had made the decision after consulting with "my generals and military experts." "After consultation with my Generals and military experts, please be advised that the United States Government will not accept or allow Transgender individuals to serve in any capacity in the U.S. Military," Trump tweeted. "Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail. Thank you"
Inside Trump’s snap decision to ban transgender troops - POLITICO: After a week sparring with his attorney general and steaming over the Russia investigation consuming his agenda, President Donald Trump was closing in on an important win. House Republicans were planning to pass a spending bill stacked with his campaign promises, including money to build his border wall with Mexico. Story Continued Below But an internal House Republican fight over transgender troops was threatening to blow up the bill. And House GOP insiders feared they might not have the votes to pass the legislation because defense hawks wanted a ban on Pentagon-funded sex reassignment operations — something GOP leaders wouldn’t give them. They turned to Trump, who didn’t hesitate. In the flash of a tweet, he announced that transgender troops would be banned altogether. Trump’s sudden decision was, in part, a last-ditch attempt to save a House proposal full of his campaign promises that was on the verge of defeat, numerous congressional and White House sources said. The president had always planned to scale back policies put in place during the administration of President Barack Obama welcoming such individuals in combat and greenlighting the military to pay for their medical treatment plans. But a behind-the-scenes GOP brawl threatening to tank a Pentagon funding increase and wall construction hastened Trump’s decision.
Pentagon spends 10 times more on erectile disfunction meds than transgender services | TheHill: The Pentagon spent $84 million on erectile disfunction medications in 2014, 10 times the estimated annual medical costs for transgender services. Military Times reported in 2015 that the military spent $84 million on erectile disfunction medications such as Viagra and Cialis the year before. Meanwhile, a 2016 Rand Corporation study estimated that the maximum annual medical costs for transgender military members would be around $8.4 million, Business Insider reports. "You're talking about .000001% of the military budget," being spent on transgender services, Navy SEAL veteran Kristin Beck, who is transgender, told Business Insider.President Trump announced Wednesday on Twitter his decision to ban transgender people from serving in the military “in any capacity.” He cited the “tremendous” costs for providing medical services for transgender troops. "Our military must be focused on decisive and overwhelming victory and cannot be burdened with the tremendous medical costs and disruption that transgender in the military would entail. Thank you,” Trump tweeted.
Congress Reaches Deal on Russia Sanctions, Setting Up Tough Choice for Trump -- Congressional leaders have reached an agreement on sweeping sanctions legislation to punish Russia for its election meddling and aggression toward its neighbors, they said Saturday, defying the White House’s argument that President Trump needs flexibility to adjust the sanctions to fit his diplomatic initiatives with Moscow. The new legislation would sharply limit the president’s ability to suspend or terminate the sanctions — a remarkable handcuffing by a Republican-led Congress six months into Mr. Trump’s tenure. It is also the latest Russia-tinged turn for a presidency consumed by investigations into the Trump campaign’s interactions with Russian officials, including conversations between Trump advisers and Russian officials about prospective sanctions relief. Now, Mr. Trump could soon face a decision he hoped to avoid: veto the bill — a move that would fuel accusations that he is doing the bidding of President Vladimir V. Putin of Russia — or sign legislation imposing sanctions his administration has opposed. “A nearly united Congress is poised to send President Putin a clear message on behalf of the American people and our allies,” said Senator Benjamin L. Cardin of Maryland, the top Democrat on the Senate Foreign Relations Committee, “and we need President Trump to help us deliver that message.” The bill aims to punish Russia not only for interference in the election but also for its annexation of Crimea, continuing military activity in eastern Ukraine and human rights abuses. Proponents of the measure seek to impose sanctions on people involved in human rights abuses, suppliers of weapons to the government of President Bashar al-Assad in Syria and those undermining cybersecurity, among others. The agreement highlighted the gap between what Mr. Trump sees as the proper approach to a resurgent Russia and how lawmakers — even Republicans who broadly support Mr. Trump — want to proceed. While Mr. Trump has dangled the possibility of negotiating a deal to lift sanctions, Mr. Putin’s top objective, the congressional response is to expand them.
US Congress poised to pass new Russia energy sanctions - The US House of Representatives is expected Tuesday to overwhelmingly approve a number of new sanctions targeting Russia's oil and natural gas sector, including new limitations on US investments in Arctic, deepwater and shale oil projects that are partially staked by Russian firms. "The legislation, if enacted, is a big political win for members of Congress who want to take a strong stance on Russia," Elizabeth Rosenberg, a senior fellow and director of the energy, economics and security program at the Center for a New American Security, said Sunday. "It will rearrange the way the global energy industry does business with Russia and significantly increase the risk around dealings with Russia." Rosenberg, a former senior adviser at the US Treasury Department, said the legislative package, unveiled by House leaders Saturday morning after weeks of negotiations, pares back some limitations previously expected to impact US energy companies deeply, including adding a higher threshold on Russian ownership that would trigger sanctions. The US oil and gas industry "scored a huge win" in the new bill, after lobbying Congress to weaken energy investment language in the Russia sanctions bill passed by the Senate by a 98-2 vote on June 15, Rosenberg said. Still, the bill calls for new limits on investment in Russian pipeline projects, a provision aimed at derailing the Nord Stream 2 project and criticized by European leaders, and narrows time limits for available debt instruments. "There are still a number of issues which the industry still does not like," Rosenberg said.
EU "Sounds Alarm" Over New US Sanctions On Russia; Germany Threatens Retaliation - Late on Friday, Congressional negotiators reached a deal to advance a bill that would punish Russia for its interference in the 2016 election and restrict the president’s power to remove sanctions on Moscow, according to the WSJ. The measure, if signed into law, will also give Congress veto powers to block any easing of Russian sanctions by the president. As Reuters reports, the European Union "sounded an alarm on Saturday" about moves in the U.S. Congress to step up U.S. sanctions on Russia, urging Washington to keep coordinating with its G7 partners. In a statement by a spokeswoman, the European Commission warned of possibly "wide and indiscriminate" "unintended consequences", especially on the EU's efforts to diversify energy sources away from Russia, adding that "unilateral measures" by the US could undermine transatlantic unity. "We highly value the unity that is prevailing among international partners in our approach towards Russia's action in Ukraine and the subsequent sanctions. This unity is the guarantee of the efficiency and credibility of our measures," the Commission said in its statement. "As we have said repeatedly, it is important that any possible new measures are coordinated between international partners to maintain unity among partners on the sanctions that has been underpinning the efforts for full implementation of the Minsk Agreements," the Commission said, referring to an accord struck with Moscow to try to end the conflicts in Ukraine. "We are concerned the measures discussed in the U.S. Congress could have unintended consequences, not only when it comes to Transatlantic/G7 unity, but also on EU economic and energy security interests. This impact could be potentially wide and indiscriminate, including when it comes to energy sources diversification efforts. Furthermore, Germany has already warned of "possible retaliation" if the United States moves to sanction German firms involved with building a new Baltic pipeline for Russian gas. EU diplomats are concerned that a German-U.S. row over the Nord Stream 2 pipeline being built by Russia's state-owned Gazprom could complicate efforts in Brussels to forge an EU consensus on negotiating with Russia over the project.
EU To Retaliate "Within Days" If US Imposes New Sanctions On Russia --In what appears set to be major diplomatic showdown between Washington D.C. and Brussels, on Sunday the White House said that President Trump was open to signing legislation toughening sanctions on Russia after Senate and House leaders reached agreement on a bill late last week. "We support where the legislation is now and will continue working with the House and Senate to put those tough sanctions in place on Russia until the situation in Ukraine is fully resolved and it certainly isn't right now," White House Press Secretary Sarah Sanders told ABC's "This Week with George Stephanopoulos" program. As noted yesterday, congressional Democrats said on Saturday they had agreed with Republicans on a deal allowing new sanctions targeting Russia, Iran and North Korea in a bill that would limit any potential effort by Trump to try to lift sanctions against Moscow. A White House official quoted by Reuters later said the administration's view of the legislation evolved after changes were made, including the addition of sanctions on North Korea. The official said the administration "supports the direction the bill is headed, but won't weigh in conclusively until there is a final piece of legislation and no more changes are being made." Yet while Russia's adverse reaction is to be expected, and will likely lead to immediate countersanctions, perhaps coupled with the expuslion of the aforementioned 35 diplomats as well as confiscation of US properties in Russia, it is the EU's response that will be closely watched. According to an internal memo leaked to the press, Brussles said it should act "within days" if new sanctions the US plans to impose on Russia prove to be damaging to Europe’s trade ties with Moscow. Retaliatory measures may include limiting US jurisdiction over EU companies. The memo, seen by the Financial Times and Politico, has emerged amid mounting opposition to a US bill seeking to hit Russia with a new round of sanctions. The bill, if signed into law by the U.S. President, will also give US lawmakers the power to veto any attempt by the president to lift the sanctions.
House passes Russia sanctions deal | TheHill: The GOP-controlled House easily passed bipartisan legislation on Tuesday to limit the Trump administration’s ability to lift sanctions on Russia. Three Republicans — Reps. Justin Amash (Mich.), John Duncan Jr. (Tenn.) and Thomas Massie (Ky.) — voted against the bill, which passed 419-3. Tuesday’s vote amounted to a rebuke of President Trump, whose administration had pushed to water down the bill’s provisions giving Congress the power to veto the lifting of sanctions.“This strong oversight is necessary. It is appropriate. After all, it is Congress that the Constitution empowers to regulate commerce with foreign nations,” House Foreign Affairs Committee Chairman Ed Royce (R-Calif.) said. Trump expressed a desire to mend relations with Russia during the 2016 campaign and is reportedly considering restoring Russian access to two diplomatic compounds in New York and Maryland that the Obama administration seized last year as punishment for the country’s meddling in the presidential election. The House is scheduled to depart Washington for the August recess at the end of this week, meaning the sanctions package will likely be its biggest legislative accomplishment to date. The GOP-controlled Congress has not been able to send bills fulfilling major campaign pledges, such as repealing ObamaCare and reforming the tax code, to Trump's desk thus far. For now, its biggest victory heading into the summer recess is the measure constraining the president amid the investigations into whether the Trump campaign colluded with the Russian government to sway the 2016 election. The Trump administration urged lawmakers to ensure the president would have flexibility to adjust sanctions policy. But he lacks the votes to block the legislation, given that the House passed the bill with a veto-proof majority.
House Overwhelmingly Passes Veto-Proof Russia Sanctions Deal - Setting up a showdown not between the US and Russia as some hope, but between Washington and the EU which has emerged as the most vocal opponent of ongoing, unilateral anti-Russian escalation by the US vowing swift retaliation, moments ago the U.S. House passed bipartisan legislation codifying and imposing further sanctions on Russia, Iran and North Korea, and preventing the president from acting unilaterally to remove certain sanctions on Russia. Just three Republicans - Reps. Justin Amash (Mich.), Jimmy Duncan (Tenn.) and Thomas Massie (Ky.) - voted against the bill, which passed 419-3.More importantly, the measure also bars U.S. companies from investing in energy projects in which Russian companies have at least a 33% stake, and may penalize European companies that colaborate with Russian companies on energy projects, the source of Europe's recent fury.Here are the main details of the draft legislation:
- Codifies existing US sanctions on Russia and requires Congressional review before they are lifted.
- Reduces from 30 days to 14 days the maximum allowed maturity for new debt and new extensions of credit to the state controlled financial institutions targeted under the sectoral sanctions.
- Reduces from 90 days to 60 days the maximum allowed maturity for new debt and new extensions of credit to sectoral sanctions targets in the energy sector, although this largely only brings US sanctions in line with existing EU sanctions, which already impose a 30-day maximum for most energy companies.
- Expands the existing Executive Order authorising sectoral sanctions to include additional sectors of the Russian economy: railways and metals and mining.
- Requires sanctions on any person found to have invested $10 million or more, or facilitated such an investment, in the privatisation of Russian state-owned assets if they have “actual knowledge” that the privatisation “unjustly benefits” Russian government officials or their close associates or family members.
- Authorises (but does not require) sanctions “in coordination with allies” on any person found to have knowingly made an investment of $1 million or more (or $5 million or more in any 12-month period), or knowingly provided goods or services of the same value, for construction, modernisation, or repair of Russia’s energy export pipelines.
- Orders the treasury, in consultation with the Director of National Intelligence and the Secretary of State, to prepare detailed reports within the next 180 days:
Moscow Warns Of "Painful Response" To US Sanctions; EU Ready To Retaliate In "A Matter Of Days" Following yesterday's almost unanimous House vote to pass new sanctions against Russia, on Wednesday Moscow threatened to retaliate, saying that - as expected - the action has made it all but impossible to achieve the Trump administration’s goal of improved relations, and vowed to retaliate to the latest sanctions which Russia views as senseless and destructive according to its deputy foreign minister said. As described yesterday, the bill passed by a vote of 419-3 on Tuesday , boosted sanctions against Russia just 3 weeks after Trump and Putin held their first official meeting. The legislation, which now goes to the Senate, requires Trump to seek congressional approval before easing sanctions imposed under the Obama administration for "Russian meddling" in the 2016 presidential elections and its support for separatists in Ukraine. So far Trump has not definitively stated if he will support the bill with the White House sending mixed signals whether Trump will sign it. The bill seeks to impose new economic sanctions against North Korea, Iran, and Russia, and received overwhelming support from US legislators. Moscow is being targeted for alleged interference in the 2016 presidential election, an allegation that Russia denies and which has not been backed by convincing public evidence. Russia's foreign ministry expects the bill to become law, which would inevitably prompt Moscow to retaliate, Ryabkov warned. “What is happening defies common sense. The authors and sponsors of this bill are taking a very serious step towards destroying any potential for normalizing relations with Russia,” Sergey Ryabkov told the media on Wednesday, referring to an act adopted earlier by the US House of Representatives. “We told them dozens of times that such actions would not be left without a response.” Russian senator Frants Klintsevich, who chairs the Defense and Security Committee, echoed Ryabkov's sentiment. Klintsevich said the US move “will make very difficult, if possible at all, any Russian-American cooperation on solving important international issues, including fighting against terrorism.”
EU looks to water down impact of US sanctions on Russia -- Brussels is sounding complaints about America’s latest sanctions on Russia, but behind the scenes it’s already blunted some of their impact on Europe.Commission President Jean-Claude Juncker warned Wednesday that the EU is ready “to act swiftly” and “within a matter of days” if the proposed sanctions package against Russia going through Congress this week hurt the EU’s energy security. “America First cannot mean that Europe’s interests come last,” Juncker said. His tough talk was preceded by an internal note Juncker’s cabinet sent to EU commissioners that surfaced over the weekend, also highlighting his concerns.Before Juncker started making tough public statements, however, EU civil servants lobbying in Washington managed to tone down the initial scope of the proposed sanctions through last-minute amendments agreed to over the weekend, according to officials in Brussels and Washington.“We’ve been in close touch over the past five weeks with the EU delegation in Washington and the embassies,” a Senate Democratic aide said on condition of anonymity.And in the run up to Tuesday’s House vote, the EU managed to “directly” add language to the amended text that calls on the U.S. president to uphold unity with European partners through the implementation of the sanctions, according to the Senate aide. “It’s critically important that we stand shoulder-to-shoulder with our European allies in countering Russian aggression,” House Foreign Affairs Chairman Ed Royce, a Republican from California, said about the revised bill’s attempts to address EU worries. “That’s why, in the bipartisan House-Senate negotiations, we secured important changes to improve transatlantic cooperation.”
GOP moves toward solution on Russia sanctions bill - House and Senate Republicans clashed Wednesday over a bipartisan package of sanctions targeting Russia, Iran and North Korea before appearing to resolve a dispute that threatened to delay the bill's arrival on President Donald Trump's desk. Less than 24 hours after the sanctions deal passed the House 419-3, Senate Foreign Relations Chairman Bob Corker (R-Tenn.) said Wednesday morning that his chamber would likely cut out the measure’s North Korea provisions — which were added to the mix in the last lap of talks on the legislation at the behest of House GOP leaders — and send it back across the Capitol. House Republican leaders countered by urging the Senate to act quickly on the bill and warning that any changes would postpone Trump's looming decision on a veto until September. Corker, a leading author of the initial package of penalties against Russia and Iran, had stayed conspicuously silent as senior House and Senate negotiators in both parties unveiled a deal Saturday that allows Congress to block Trump from easing or ending any sanctions against Moscow. His critical comments Wednesday risked reopening fellow Republicans to Democratic charges that they are delaying the bill's final passage at the behest of a president who has long dismissed U.S. intelligence agencies' conclusion that Russia meddled in the presidential election. But further political headaches for the GOP appeared to be averted Wednesday night, when Corker announced that he had reached agreement with House Majority Leader Kevin McCarthy (R-Calif.) on a solution that would pave the way for final approval of the sanctions bill. "Going forward, the House has committed to expeditiously consider and pass enhancements to the North Korea language, which multiple members of the Senate hope to make in the very near future," Corker said in a statement Wednesday night.
Senate Overwhelmingly Votes For New Russia Sanctions, Now It's Up To Trump - Two days after the House passed bipartisan legislation in a 419-3 vote codifying and imposing further sanctions against Russia, Iran and North Korea and preventing the president from acting unilaterally to remove certain sanctions on Russia, moments ago the Senate also overwhelmingly approved the measure in a 98-2 vote. The bill will now head to the White House where it will be either signed into law by the president or vetoed, setting up a potential showdown with the White House over Russia. The move marks congressional Republicans' first rebuke of Trump's foreign policy, where the administration's warmer stance toward Russia has drawn heavy skepticism from both parties.The three countries named in the bill are accused of violating “the international order” by Senator Bob Menendez, the a former chairman of the foreign relations committee. Only Senators Rand Paul and Bernie Sanders voting no.Under the bill, existing sanctions on Russia for its aggression in Ukraine and interference in the 2016 election would be codified into law. New sanctions would go into effect against Iran for its ballistic missile development, while North Korea’s shipping industry and people who use slave labor would be targeted amid the isolated nation’s efforts to launch an intercontinental ballistic missile (ICBM).While a full breakdown of the key details in the legislation is provided at the bottom of this post, in a nutshell the sanctions target Russian gas and pipeline developments by codifying six of Barack Obama’s executive orders implementing sanctions on Russia for its alleged interference in the US elections.John McCain lauded the bipartisan process that supported the bill: “We will not tolerate attacks on our democracy!” the Senator, who chairs the armed services committee, said from the Senate floor. “That's what this bill is all about.” The Senate passage now sends the sanctions bill to Trump's desk, although lawmakers expressed mixed expectations on whether the president would sign it into law.
Trump Confirms He Will Sign Russia Sanctions Bill -- Following the approval from overwhelming majorities in both the House (419-3) and Senate (98-2), President Trump has just confirmed that he will sign the Russia sanctions bill into law. The confirmation comes despite days of speculation after Anthony Scaramucci told CNN that Trump could sign the sanctions bill or "veto the sanctions and negotiate an even tougher deal against the Russians.""President Donald J. Trump read early drafts of the bill and negotiated regarding critical elements of it. He has now reviewed the final version and, based on its responsiveness to his negotiations, approves the bill and intends to sign it." Your move, Mr. Putin.
Russia expels US diplomats in retaliation for sanctions bill --On Friday, amid a collapse in relations between the world’s two leading nuclear-armed powers triggered by the US Senate’s passage by a lopsided 98-2 vote of a sanctions bill targeting Russia, Moscow ordered hundreds of US diplomats to leave the country. The Russian government indicated it has concluded that the US political establishment is seeking a confrontation with Russia, which has the world's second-largest nuclear arsenal.In a statement, the Russian Foreign Ministry declared: “The passage of the new law on sanctions shows with all obviousness that relations with Russia have become hostage to the domestic political battle within the US. The latest events show that in well known circles in the United States, Russophobia and a course toward open confrontation with our country have taken hold.”On this basis, it told Washington to make a more than 60 percent cut in its 1,200-strong diplomatic mission to Russia by September 1. The Foreign Ministry stated: “We kindly ask the US to adjust the headcount of its diplomatic and technical staff by September to exact parity with the number of Russian diplomats and employees in the US. This means the overall number of personnel employed in American diplomatic and consular institutions in the Russian Federation will be reduced to 455.”It added that Moscow would retaliate against any further US cut in Russian diplomatic staff by imposing identical cuts to US personnel in Russia. American diplomats will also lose access to Moscow warehouses and a dacha compound on an island in the Moscow River on August 1. Kremlin spokesman Dmitri Peskov confirmed that these measures were taken on orders from President Vladimir Putin. On Thursday, Putin responded to the sanctions bill by declaring: “We are behaving in a very restrained and patient way, but at some moment we will need to respond… It’s impossible to endlessly tolerate this kind of insolence towards our country.”
Exclusive: U.S. weighs financial sanctions to hit Venezuela's oil revenue – sources (Reuters) - The United States is considering financial sanctions on Venezuela that would halt dollar payments for the country's oil, according to a senior White House official and an adviser with direct knowledge of the discussions. The move could severely restrict the OPEC nation's crude exports and starve its socialist government of hard currency. Sanctions prohibiting any transaction in U.S. currency by Venezuela's state-run oil firm, PDVSA, are among the toughest of various oil-related measures under discussion at the White House, the two sources told Reuters. The administration aims to pressure socialist President Nicolas Maduro into aborting plans for a controversial new congress that critics say would cement him as a dictator. Venezuela's oil-based economy is in the grip of a brutal recession and a local currency crash, and Maduro has faced months of anti-government unrest that has claimed the lives of about 100 people. Sanctions on dollar transactions would make it even harder for Maduro's government to secure cash for debt payments and finance imports of basic goods. The U.S. measures under discussion are similar to those that were imposed against Iran over its nuclear program - which halved Iran's oil exports and prevented top crude buyers from paying for Iranian oil. The measures were seen as among the most effective economic sanctions ever imposed and paved the way for a deal that curbed Tehran's nuclear activity. Measures on financial transactions would give President Donald Trump's administration the power to escalate pressure on Venezuela by threatening punishment of any U.S. firm doing business with PDVSA or U.S. banks processing any of its transactions in dollars.
US sanctions 13 Venezuelan officials, readies oil sector penalties - The US Treasury Department sanctioned 13 Venezuelan government officials Wednesday, including officials with state oil company PDVSA, in an effort to pressure Venezuelan President Nicolas Maduro to abandon plans for a controversial vote Sunday.In a call with reporters, a senior administration official said that President Donald Trump is expected to issue "strong and swift" sanctions on Venezuela, including a ban on imports of Venezuelan crude oil into the US, if Maduro goes forward with the vote Sunday to elect a constituent assembly to redraft the country's constitution. "We are very concerned about the rapid erosion of democracy and the move towards dictatorship by President Maduro," the official said. "We see [Sunday] as a critical line that, if crossed, could mean the end of democracy in Venezuela." Officials declined Wednesday to discuss in detail the specific oil-related sanctions they were considering and whether the sanctions would be imposed immediately after Sunday's vote or if they would be phased in.
CIA And Sen Marco Rubio Accused Of Plotting Regime Change In Venezuela --Venezuela’s leftist dictator Nicolas Maduro plans to proceed with a vote to create a new constituent assembly to replace the country’s opposition-controlled Congress with a friendly constituent assembly, potentially enabling the embattled despot to redraft the country’s constitution and officially marginalize his political opponents, despite the US’s repeated threats of “strong and swift economic action." In response to the US's threats of sanctions, the country’s senior leadership have accused Sen. Marco Rubio and CIA Director Mike Pompeo of "conspiring to overthrow" the country’s floundering leftist government and replace it with a friendlier regime,according to the Miami Herald. The escalation belies the healthy business relationship between the two countries, which is centered on the US's purchases of hundreds of thousands of barrels of Venezuelan oil a day. “What this group is trying to do with Venezuela is basically divide the government, recognize other leaders and foment a conflict with the Venezuelans,” said Carlos Ron, the chargé d'affaires of the Embassy of Venezuela, to a small group of reporters in Washington on Tuesday. “This is absolutely unacceptable.” Ron added that the American people are not hearing the full story and accused the US of unfairly attacking the country’s democratically elected government. Of course, opposition leaders are calling for protests at the country’s polling places to try and disrupt the July 30 vote, which is widely expected to be a sham.
US Orders Venezuela Embassy Families Out As Crisis "Showdown" Arrives -- On Thursday, the U.S. government ordered family members of employees at its embassy in Venezuela to leave as the nation's political crisis deepened ahead of a controversial vote critics contend will end democracy in the oil-rich country. Similarly, Canada warned its nationals against non-essential travel to Venezuela and urged citizens already there to leave. As well as ordering relatives to leave, the U.S. State Department on Thursday also authorized the voluntary departure of any U.S. government employee at its compound-like hilltop embassy in Caracas, where hyperinflation is about to hit 1,000%. Meanwhile, as France 24 notes, Venezuela careened towards a "showdown" on its streets Friday between anti-government protesters and security forces, raising international alarm at worsening deadly unrest. The opposition called fresh nationwide demonstrations to defy a new government ban on rallies ahead of a controversial vote Sunday to elect a body to rewrite the constitution. As protests mount, culminating with a two-day general strike that ended on Thuesday, violence has continued to rage on the street, with Reuters reporting that another seven people were killed during the latest opposition-led strike against President Nicolas Maduro's planned election for a powerful new Constituent Assembly on Sunday. Four months of protests against unpopular leftist President Nicolas Maduro have already claimed 112 lives, according to prosecutors.
Trump’s Slide into Endless-War Syndrome - During his campaign for the presidency, Donald Trump touted his nationalist “America First” foreign policy, which implied that he wanted to stay out of foreign brushfire wars. Even before that, he tweeted his disapproval of American involvement of the Afghan War. Yet now he has delegated the authority to his Secretary of Defense to send several thousand more troops to Afghanistan to join the almost 9,000 that remain there advising and assisting Afghan forces and hunting Islamist terrorists. And that is not the only instance in which the Trump administration has gone against his original inclination or is contemplating it. Trump appears to be delegating the troop re-escalation decision for Afghanistan to Secretary of Defense Jim Mattis, because the president wants to be able to dodge responsibility in case that policy is ultimately unsuccessful, just as he blamed the botched Special Operations raid in Yemen on the military. Re-escalation is likely to fail, because the administration has no strategy for turning the already-lost conflict around. Adding 3,000 to 5,000 troops, according to a U.S. military that never wants to admit losing a war, would allow American troops to “advise” Afghan troops in battlefield areas, instead of remaining at higher headquarters, and also to call in U.S. air and artillery strikes in support of those local forces.Yet the Afghan War is the longest conflict in American history, and no conception of “success” can be realistically imagined. How can an augmented force of 13,000 or 14,000 American advisers have success helping a still pathetic Afghan military (even after 16 years of U.S. training), when 100,000 much more potent U.S. combat troops could not defeat the Taliban during all those prior years of conflict? And if the Taliban’s gains on the battlefield aren’t enough, the continued U.S. military presence in Afghanistan has caused some Islamist militants to pledge allegiance to the even more radical and brutal ISIS group. One can easily see that when the 3,000 to 5,000 troops have little effect on the battlefield, which is the probable outcome, the military will begin demanding a more sizeable re-escalation of the endless conflict. Should we give the U.S. military a blank check for perpetual war until it comes up with a face-saving way to exit with honor? Such a ruse didn’t fool anyone in the Vietnam War.
Say Goodbye to Regime Change in Syria - President Donald Trump has ordered that the CIA begin to phase out its covert train-and-equip program in support of so-called “moderate” rebels fighting against the regime of Syrian President Bashar al-Assad. The program represented the tip of the spear of a larger goal of regime change that had been the official policy of the United States since September 2013, when President Obama declared “Assad must go” in the aftermath of a chemical attack in the Damascus suburb of Ghouta that killed hundreds of civilians. Through this action, President Trump is walking away from an established policy of America taking an active role in forcing the Syrian President’s ouster, willing instead to leave Assad’s fate in the hands of the Syrian people and its allies. The decision by Trump to terminate support for the “moderate” Syrian rebels, while not giving voice to a policy that rejects regime change in Syria, is the clearest signal yet that the United States has changed course on trying to force regime change in Damascus as a precondition for a political settlement of the Syrian crisis. President Trump’s decision to terminate Timber Sycamore is part and parcel of an overall policy objective designed to gain control over U.S/ objectives in the region. In many ways, Washington’s policy of regime change in Syria, of which the CIA’s train-and-equip program was a major part, was responsible for the crisis currently underway in Syria, and the region as a whole. Central to this failure was the notion that there existed inside Syria a moderate, secular force able and willing to take down the regime of Bashar al-Assad, which led to the decision to flood the region with U.S.-provided arms and munitions that only served to spread of Islamic extremism under the banner of Al Qaeda and ISIS. The fact is that there was no secular, moderate force worthy of the name operating inside Syria; virtually the entire anti-Assad effort is dominated by Islamist extremists who, if Assad was overthrown, would probably replace a secular dictator with something far worse. The Obama policy of regime change in Syria, like the Bush policy in Iraq, has done little more than unleash forces which the U.S. was unable to control, costing American taxpayers hundreds of billions of dollars and the blood of American military personnel who lost their lives in its implementation.
Trump pulls plug on CIA’s Syrian “revolution” - The news first reported by the Washington Post on July 19—that the Trump administration is winding up a five-year-old, formally covert CIA operation to train, arm and even pay the salaries of Islamist militias in Syria—has further fueled the ferocious political war in Washington over allegations of “collusion” between Trump and Moscow. Senator John McCain, the Republican chair of the Armed Services Committee, issued a statement from Arizona, where he is recovering from surgery related to brain cancer, that “any concession to Russia, absent a broader strategy for Syria, is irresponsible and short-sighted.” A more hysterical denunciation came from Washington Post columnist and former chief speechwriter for George W. Bush, Michael Gerson, who accused Trump of carrying out a “complete surrender to Russian interests in Syria” and acting “precisely as though he has been bought and sold by a strategic rival” with his “ignoble cutoff of aid to American proxies.” The claims that cutting off the spigot of arms and money to the so-called “rebels” in Syria represents some kind of a strategic capitulation to Russia are ludicrous. The decision, reportedly taken by Trump together with his national security advisor Gen. H.R. McMaster and CIA Director Mike Pompeo in advance of the G20 summit in Hamburg, was a foregone conclusion. What used to be referred to as the “Free Syrian Army” has ceased to play any major role in Syria. Syrian government forces, backed by Iranian-aligned militias and, since September 2015, Russian air support, have driven the “rebels” out of every major urban center and into the rural areas of Idlib province, where they have been engaged in bitter internecine combat against each other. The government’s retaking of eastern Aleppo in December 2016 spelled the final debacle for the US strategy of carrying out a war for regime change using CIA-backed Sunni Islamist militias as Washington’s proxies.
How CIA and Allies Trapped Obama in the Syrian Arms Debacle - Last week a Trump administration official decided to inform the news media that the CIA program to arm and train anti-Assad Syrian forces had been terminated. It was welcome news amid a deepening U.S. military commitment reflecting the intention to remain in the country for years to come. As my recent article in TAC documented, the net result of the program since late 2011 has been to provide arms to al Qaeda terrorists and their jihadist and other extremist allies, which had rapidly come to dominate the military effort against the Assad regime. One of the keys to understanding its origins is that the program was launched not because of a threat to U.S. security, but because of a perceived opportunity. That is always a danger sign, prompting powerful national-security bureaucrats to begin thinking about a “win” for the United States. (Think Vietnam and Iraq.) The opportunity in this case was the rise of opposition protests against the Assad regime in spring 2011 and the belief among national security officials that Assad could not survive. The national-security team saw a shortcut to the goal. Former Obama administration official Derek Chollet recalled in his book The Long Game that Obama’s advisers were all talking about a “managed transition” and urging Obama to publicly demand that Assad step down, according to Chollet. What that meant to Obama’s advisers was bringing pressure from outside, including providing arms to the opposition. That was wishful thinking not only in regard to the willingness of an Alawite-dominated regime to hand over power to its sectarian foes, but in regard to the assumed Iranian willingness to go along with toppling the regime. Not one of Obama’s advisers had sufficient understanding of regional dynamics to warn the President that Iran would not allow of Syrian ally to be overthrown by an opposition supported by Sunni states and the United States. But the decisive factor in pushing the administration toward action was the pressure from U.S. Sunni allies in the region—Turkey, Saudi Arabia and Qatar—which began in autumn 2011 to press Obama to help build and equip an opposition army. Turkey was the leader in this regard, calling for Washington to agree to provide heavy weaponry—including anti-aircraft and anti-tank missiles—to the rebel troops that didn’t even exist yet, and even offering to invade Syria to overthrow the regime if the U.S. would guarantee air cover.
Dropping the mask: A war of plunder in Afghanistan - In less than three months, Washington will mark the 16th anniversary of its invasion of Afghanistan, which initiated the longest war in American history. The attack on this impoverished and war-torn south Asian country was cast as the opening shot in a “global war on terrorism,” a crusade for justice and revenge for the terrorist attacks of September 11, 2001 centered on the ludicrous pretext of hunting down one man, Osama bin Laden. Nearly 16 years later, nearly 9,000 US troops remain in Afghanistan. Without them and the immense fire power brought to bear by the US Air Force, the puppet regime of President Ashraf Ghani would not last a week. According to conservative estimates, the Afghan death toll since 2001 has reached 175,000. Hundreds of thousands more have been wounded and millions driven from their homes. The last six months have seen a record number of civilians killed, with a 43 percent rise in the number dying in US air strikes compared to the same period last year. This slaughter has been carried out in the name of fighting terrorism, building democracy, liberating women, human rights and various other phony pretexts. In the end, however, this brutal, corrupt and bloody enterprise has been driven by the imperialist interests spelled out by the WSWS in its 2001 statement. While Trump has given his defense secretary, the recently retired Marine Gen. James “Mad Dog” Mattis, the authority to escalate the war by sending 4,000 to 5,000 additional troops to Afghanistan, the buildup has yet to take place.The new war strategy, first promised in advance of the NATO summit last May and then for mid-July, has yet to emerge, and Trump last week told White House reporters that he was still trying to figure out “why we’ve been there for 17 years.” This after Washington has reportedly spent some $1 trillion on the war. Asked as he headed into a Pentagon meeting last Thursday whether more troops would be deployed, he responded, “We’ll see.”Now, however, the administration appears to be warming to the idea of an escalation, focusing on the war’s bottom line: plunder and profit.
White House Closing Down War Crimes Office (After Being Accused Of War Crimes) - Secretary of State Rex Tillerson is reportedly closing a decades-old office in the State Department that has helped pursue justice for victims of war crimes. The “Office of Global Criminal Justice” advises the secretary of state on issues surrounding war crimes and genocide. It was established by Bill Clinton’s secretary of state, Madeleine Albright, a woman who barely batted an eyelid while overseeing the deaths of 500,000 Iraqi children. According to Newsweek, the office has supported criminal courts in Rwanda, former Yugoslavia, Cambodia, and the Central African Republic. This alone should give one an idea of the office’s intentions and prerogatives: it is often concerned with punishing African nations - as the International Criminal Court (ICC) is often accused of doing — as well as America’s adversaries but also tends to ignore the actions of the United States and its allies.That being said, the timing of the office’s closure is somewhat suspect. Amnesty International just released a report that heavily implicates the United States in a number of criminal acts in Mosul, Iraq. A credible Kurdish intelligence source also just revealed documents the Independent that show the conflict in Mosul may have resulted in over 40,000 civilian deaths in a nine-month period. No one doubts that ISIS has had a hand in civilian casualties, but we also know from a number of sources that, at the very least, American bombs alone have likely killed at least 4,500 civilians in Mosul, with thousands more still buried under the rubble. Whether we like to admit it or not, the U.S. has killed thousands of civilians in a mere nine-month long conflict.
Al-Shabaab Propaganda Video Bashes "Brainless Billionaire" Trump As "Stupidest President A Country Could Have" Since taking office, President Donald Trump has stepped up US military strikes against al-Shabaab, the ISIS-affiliated terrorist group based primarily in Somalia, despite promises to avoid more foreign entanglements. In May, a Navy SEAL died during a mission targeting a compound of al-Shabaab militants, becoming the first US soldier to die in Somalia since 1993, when 18 US service members were killed in what became known as the battle of Mogadishu, later memorialized in the film “Black Hawk Down.” In June, the US killed 8 militants during a drone strike against what US officials described as one of the group’s primary training camps and bases. While al-Shabaab lacks the resources to launch an effective counterattack against the US, the group instead opted to mock Trump in a new propaganda video. In it, the group responds to Trump’s violent escalation by calling him a “brainless billionaire” and criticizing US voters for electing “arguably the most stupid president a country could ever have" - echoing sentiments commonly expressed by left-leaning voters in metropolitan hubs like New York City.Trump, the militants claim, is "making the United States the greatest joke on Earth and is now propelling it further to its eventual defeat and destruction," according to Russia Today, which cited the Associated Press and the SITE Intelligence Group. In addition to authorizing more drone strikes against Somalian while also categorizing parts of the country’s south as an area where active hostilities are taking place, Somalia was included as one of six countries in the Trump administration’s travel ban.
Trump is looking for dirt on Iran, and it looks like the run up to the Iraq war - President Donald Trump campaigned on tearing up the Iran deal and repealing Obamacare, but with his efforts to reform healthcare once again defeated, he may look to sabotage the Iran deal in a way that resembles the run up to the Iraq war. "With Healthcare dead, Trump will be even more determined to kill Obama's top foreign policy achievement - the Iran Deal," Ilan Goldenberg, the Middle East security director at the Center for New American Security tweeted after Trump's healthcare defeat. But unlike healthcare, the Iran deal involves six countries and the US has a limited ability to act unilaterally — so Trump has been looking for dirt to increase pressure on Tehran. Every 90 days, the US has to confirm that Iran has complied with the International Atomic Energy Agency's inspections and not violated the terms of the deal. For the first six months of Trump's presidency, he has gone through with the procedure, albeit begrudgingly, according to the Associated Press. "If it was up to me, I would have had them noncompliant 180 days ago," Trump told the Wall Street Journal of the Iran deal. But Jeffrey Lewis, the founding publisher of Arms Control Wonk and an expert on nuclear proliferation, told Business Insider that like the IAEA, he sees no evidence of Iran violating the terms of the deal. The AP reported that Trump wants to drum up "foolproof intelligence" of suspicious activity at Iranian military sites to increase the scope of inspections — something that Iran would almost certainly push back on. If Iran refused the inspections, Trump would have good reason to exit the deal, bringing the other parties with him. "Demand more inspections and when Iran doesn't comply, blame Iran & use it as an excuse to walk away from the agreement," Tweeted Goldenberg. "If US can blame Iran then it can build coalition to reimpose sanctions and get a better deal." But the problem, according to Lewis and Goldenberg, is that none of the other nations involved in the deal believe Trump is acting in good faith. Intelligence exclusive to the US that suggests Iran is cheating on the deal will likely appear politically motivated, the experts concluded.
The Mask Is Off: Trump Is Seeking War with Iran - Something extraordinary has happened in Washington. President Donald Trump has made it clear, in no uncertain terms and with no effort to disguise his duplicity, that he will claim that Tehran is cheating on the nuclear deal by October—the facts be damned. In short, the fix is in. Trump will refuse to accept that Iran is in compliance and thereby set the stage for a military confrontation. His advisors have even been kind enough to explain how they will go about this. Rarely has a sinister plan to destroy an arms control agreement and pave the way for war been so openly telegraphed. The unmasking of Trump’s plans to sabotage the nuclear deal began two weeks ago when he reluctantly had to certify that Iran indeed was in compliance. Both the US intelligence as well as the International Atomic Energy Agency had confirmed Tehran’s fair play. But Trump threw a tantrum in the Oval Office and berated his national security team for not having found a way to claim Iran was cheating. According to Foreign Policy, the adults in the room—Secretary of State Rex Tillerson, Secretary of Defense Jim Mattis, and National Security Advisor H. R. McMaster—eventually calmed Trump down but only on the condition that they double down on finding a way for the president to blow up the deal by October. Recognizing that refusing to certify Iran would isolate the United States, Trump’s advisors gave him another plan. Use the spot-inspections mechanism of the nuclear deal, they suggested, to demand access to a whole set of military sites in Iran. Once Iran balks—which it will since the mechanism is only supposed to be used if tangible evidence exists that those sites are being used for illicit nuclear activities—Trump can claim that Iran is in violation, blowing up the nuclear deal while shifting the blame to Tehran. Thus, the advice of the adults in the room—those who we are supposed to restrain Trump—was not to keep the highly successful nuclear deal that has taken both an Iranian bomb and war with Iran off the table. Rather, they recommended killing it in a manner that would conceal Trump’s malice and shift the cost to Iran.
North Korea tests another ICBM, putting U.S. cities in range (Reuters) - North Korea fired a missile on Friday that experts said was capable of striking Los Angeles and other U.S. cities and the United States and South Korea responded by staging a joint missile exercise, the South Korean news agency Yonhap said.The Trump administration, which has branded North Korea the "most urgent and dangerous threat to peace," condemned the launch as reckless."By threatening the world, these weapons and tests further isolate North Korea, weaken its economy, and deprive its people," President Donald Trump said in a statement. "The United States will take all necessary steps to ensure the security of the American homeland and protect our allies in the region."The unusual late-night launch added to exasperation in Washington, Seoul and Tokyo over Pyongyang's continuing development of nuclear weapons and intercontinental ballistic missiles (ICBMs). Friday's test prompted U.S. and South Korean military officials to discuss military response options.North Korean President Kim Jong Un's military had already raised alarms early this month with its first ICBM launch."As a result of their launches of ICBM-level missiles, this clearly shows the threat to our nation's safety is severe and real," said Japanese Prime Minister Shinzo Abe, who planned to call a meeting of his National Security Council.The top U.S. military official, Joint Chiefs of Staff Chairman Joseph Dunford, and Admiral Harry Harris, commander of U.S. Pacific Command, spoke by phone with the top South Korean military official, General Lee Sun-jin, to discuss military response options to the launch.The Trump administration has said that all options are on the table, including military ones, however it has also made clear that diplomacy and sanctions are its preferred course.
Latest North Korean ICBM Can Reach Los Angeles, Denver, Chicago -- While North Korea has fired numerous test missiles (mostly intermediate-range) in the past, and as such today's launch was largely seen as merely the latest political "dare" to Trump by a seemingly oblivious Kim John-Un, there was one notable difference in the launch post-mortem: according to press and Pentagon reports, the maximum altitude attained by the ICBM was 3,700 km (2,300 miles) with a flight time of about 47 minutes. This is material because according to All Things Nuclear, based on the latest information, today’s missile test by North Korea could easily reach not only the US West Coast, but also a number of major US cities. As reported earlier, North Korea launched its missile on a very highly lofted trajectory, which allowed the missile to fall in the Sea of Japan rather than overflying Japan. It appears the ground range of the test was around 1,000 km (600 miles), which put it in or close to Japanese territorial waters. According to physicist and co-director of the UCS Global Security Program, David Wright, if those numbers are correct, then the missile flown on a standard trajectory would have a range 10,400 km (6,500 miles), not taking into account the Earth’s rotation. Adding the rotation of the Earth increases the range of missiles fired eastward, depending on their direction. Calculating the range of the missile in the direction of some major US cities gives the approximate results in Table 1. Table 1 shows that Los Angeles, Denver, and Chicago appear to be well within range of this missile, and that Boston and New York may be just within range. Washington, D.C. may be just out of range. Wright caveats his calculations saying that "it is important to keep in mind that we do not know the mass of the payload the missile carried on this test. If it was lighter than the actual warhead the missile would carry, the ranges would be shorter than those estimated above."
US, South Korea talk military options following North Korea missile test | TheHill: Two top U.S. military officers have reached out to South Korea to discuss military options following North Korea’s intercontinental ballistic missile (ICBM) test Friday, its second this month. Joint Chiefs of Staff Chairman Gen. Joseph Dunford and U.S. Pacific Command head Adm. Harry Harris called South Korea Joint Chiefs of Staff Chairman Gen. Lee Sun-jin, according to Joint Chiefs spokesman Greg Hicks. The two called from Dunford’s Pentagon office. “During the call, Dunford and Harris expressed the ironclad commitment to the U.S.-Republic of Korea alliance,” Hicks said. “The three leaders also discussed military response options.” The United States detected the launch of a ballistic missile from North Korea, fired shortly before midnight in Japan on Friday, according to Pentagon.The missile traveled about 1,000 km before splashing down in the Sea of Japan, possibly within an area known as Japan’s exclusive economic zone. The North American Aerospace Defense Command determined the missile did not pose a threat to North America, but experts say the range and length of the missile’s flight indicates North Korea has the capability to hit the continent. Lawmakers were quick to call for policies and dollars to bolster U.S. defenses following the launch. House Armed Services Committee Chairman Mac Thornberry (R-Texas) said the test “amplifies the danger to the U.S. homeland and accelerates the need for us to take steps to protect our people and our allies.”
USA Threatens Again Korea (and China indirectly) with Nuclear War --Ominous statements over the past 48 hours by top American military commanders underscore how close the world is to a devastating war on the Korean Peninsula, which, for the first time since 1945, could involve the use of nuclear weapons. The propaganda pretext for war is the claim of US imperialism and its allies that the isolated North Korean regime is on the verge of developing a nuclear-armed inter-continental ballistic missile (ICBM) capable of destroying major cities on the American mainland. General Mark Milley, the Chief of Staff of the Army, told a conference at the National Press Club in Washington yesterday: “War in the Korean Peninsula would be terrible, however, a nuclear weapon detonating in Los Angeles would be terrible.” Pointing to the preparations for a pre-emptive US attack, Milley declared that “time is running out” for a “non-military solution” to US demands that North Korea end its nuclear and missile weapons programs. The Trump administration, he stated, was “at a point in time where [the] choice will have to be made one way or the other.” The general gloated that the US “would utterly destroy the North Korean military.” There would be “a high cost in terms of human life, in terms of infrastructure.” Milley’s statements follow those made last weekend by General Joseph Dunford, the Chairman of the Joint Chiefs of Staff. He told a security forum that a war with North Korea was “not unimaginable.” Proceeding to imagine the consequences, he declared a war would cause “a loss of life unlike any we have experienced in our lifetimes.” Dunford insisted that “negotiations” would only take place for “a few more months.” Passed over by the establishment media, which breathlessly reported such assertions, is the obvious question as to why North Korea—an economically backward state with a gross domestic product of barely $25 billion—would risk annihilation in a war with the planet’s greatest military power.
Secretary of State Tillerson says he is 'not going anywhere (Reuters) - U.S. Secretary of State Rex Tillerson said on Wednesday that he was "not going anywhere," denying news reports that he was considering leaving his post. "I'm not going anywhere," Tillerson told reporters at the State Department. Asked how long he would stay on, Tillerson turned and smiled, saying, "As long as the president lets me." Asked about his relationship with President Donald Trump, Tillerson said simply, "Good." The speculation over Tillerson's remaining in Trump's cabinet came after days of Trump publicly attacking Attorney General Jeff Sessions. Trump said Sessions had "taken a VERY weak position" on investigating his former opponent in the 2016 presidential election, Democratic nominee Hillary Clinton, over her use of a private email server. On Monday, Trump called Sessions "beleaguered."
Anthony Scaramucci Called Me to Unload About White House Leakers, Reince Priebus, and Steve Bannon – Ryan Lizza, New Yorker - On Wednesday night, I received a phone call from Anthony Scaramucci, the new White House communications director. He wasn’t happy. Earlier in the night, I’d tweeted, citing a “senior White House official,” that Scaramucci was having dinner at the White House with President Trump, the First Lady, Sean Hannity, and the former Fox News executive Bill Shine. It was an interesting group, and raised some questions. Was Trump getting strategic advice from Hannity? Was he considering hiring Shine? But Scaramucci had his own question—for me. “Who leaked that to you?” he asked. I said I couldn’t give him that information. He responded by threatening to fire the entire White House communications staff. “What I’m going to do is, I will eliminate everyone in the comms team and we’ll start over,” he said. I laughed, not sure if he really believed that such a threat would convince a journalist to reveal a source. He continued to press me and complain about the staff he’s inherited in his new job. “I ask these guys not to leak anything and they can’t help themselves,” he said. “You’re an American citizen, this is a major catastrophe for the American country. So I’m asking you as an American patriot to give me a sense of who leaked it.” In Scaramucci’s view, the fact that word of the dinner had reached a reporter was evidence that his rivals in the West Wing, particularly Reince Priebus, the White House chief of staff, were plotting against him. While they have publicly maintained that there is no bad blood between them, Scaramucci and Priebus have been feuding for months. After the election, Trump asked Scaramucci to join his Administration, and Scaramucci sold his company, SkyBridge Capital, in anticipation of taking on a senior role. But Priebus didn’t want him in the White House, and successfully blocked him from being appointed to a job until last week, when Trump offered him the communications job over Priebus’s vehement objections. In response to Scaramucci’s appointment, Sean Spicer, an ally of Priebus’s, resigned his position as press secretary. And in an additional slight to Priebus, the White House’s official announcement of Scaramucci’s hiring noted that he would report directly to the President, rather than to the chief of staff. “Is it an assistant to the President?” he asked. I again told him I couldn’t say. “O.K., I’m going to fire every one of them, and then you haven’t protected anybody, so the entire place will be fired over the next two weeks.”
Scaramucci: "Priebus Is A F**king Paranoid Schizophrenic", Slams "Cocksucker" Bannon, Wants To "Kill" Leakers Details have emerged about Anthony Scaramucci's bizarre overnight breakdown, in which he accused Trump's chief of staff Reince Priebus of leaking details of a private dinner he had with Trump, Melania, Sean Hannity and Bill Shine, as well as accusing the former GOP head of a "felony" leak of Scaramucci's financial disclosures. The New Yorker's Ryan Lizza has released the details of a phone call he received on Wednesday night from Scaramucci, after tweeting shortly prior that "Trump is dining tonight w/Sean Hannnity, Bill Shine (former Fox News executive), & Anthony Scaramucci, per to 2 knowledgeable sources." As discussed earlier, Scaramucci was furious that Lizza found out about the dinner and convinced that Priebus was the one who told Lizza about it, tried to get an admission out of Lizza. After threatening to fire the entire White House communication staff if Lizza did not reveal the identity of his source, Trump's new communications chief furiously blasted that “Reince is a fucking paranoid schizophrenic, a paranoiac,” and claimed that Priebus would be asked to resign. He reiterated that Priebus would resign soon, and he noted that he told Trump that he expected Priebus to launch a campaign against him. “He didn’t get the hint that I was reporting directly to the President,” he said. “And I said to the President here are the four or five things that he will do to me.” His list of allegations included leaking the Hannity dinner and the details from his financial-disclosure form. Scaramucci then warned that “they’ll all be fired by me,” he said of the White House communications staff. “I fired one guy the other day. I have three to four people I’ll fire tomorrow. I’ll get to the person who leaked that to you. Reince Priebus—if you want to leak something—he’ll be asked to resign very shortly.” The enraged Scaramucci continued chanelling Priebus “‘Oh, Bill Shine is coming in. Let me leak the fucking thing and see if I can c ock-block these people the way I cock-blocked Scaramucci for six months.’ ”
Trump’s hitman melts down: But is there method to Anthony Scaramucci’s madness? I’m not sure how many more days like Thursday this country can take. The most important event was the defeat of the “skinny repeal” bill in the Senate — which actually happened in the wee hours of Friday morning — with Sen. John McCain casting a dramatic “no” vote to scuttle Republican efforts to repeal Obamacare one more time. Perhaps President Trump has learned that openly insulting people you need to support you isn’t really such a great political tactic. (Nah.) That brings us to the other big Trump administration story, revolving around new communications director Anthony Scaramucci, who imploded on CNN after having first exploded at New Yorker reporter Ryan Lizza. The whole thing started with a tweet on Wednesday in which Scaramucci claimed he had gone to the FBI because someone had leaked his financial disclosure forms and strongly suggested that someone was White House chief of staff Reince Priebus. Shortly thereafter, a Department of Justice spokesperson issued a bizarre late-night statement agreeing with “Anthony” suggesting that he or someone else high in the government had requested it. As it turned out, the financial disclosure forms were not leaked at all; they were public information. Scaramucci deleted his threatening tweet. What happened the next morning was next-level crazy. Lizza appeared on CNN as he often does and Scaramucci called in and confirmed that he’d spoken with Lizza the night before and then launched into a 30-minute stream of consciousness rant in which he said he wanted to “kill” White House leakers and that he was talking to Attorney General Jeff Sessions and some “buddies” in the FBI. Later in the day Lizza published a bombshell piece in the New Yorker about the conversation he’d had with Scaramucci, which the latter apparently never said was off the record. It is amazing. Scaramucci called Reince Priebus a “fucking paranoid schizophrenic” and said, “I’m not Steve Bannon, I’m not trying to suck my own cock. I’m not trying to build my own brand off the fucking strength of the President. I’m here to serve the country.” He claimed that Priebus had leaked his financial disclosure forms and also believed that he’d leaked his dinner plans with Sean Hannity and the president which seemed to inflame him. He sounds so ridiculous that it’s tempting to just laugh about it and move along. But according to the Daily Beast, this crusade against leakers has been ordered by the president.
Priebus forced out as White House chief of staff | TheHill: President Trump dismissed Reince Priebus as chief of staff on Friday, announcing on Twitter that he picked Homeland Security Secretary John Kelly as his new top aide. The dramatic move on Friday comes amid a long-simmering feud between Priebus and new White House communications director Anthony Scaramucci, who lambasted him in an interview with The New Yorker this week. Speaking to reporters, Trump called Priebus a "good man" but called Kelly a "star." "Reince is a good man," he said at Andrews Air Force Base outside of Washington, D.C., after a trip to New York to talk about his push to end gang violence. "John Kelly will do a fantastic job. Gen. Kelly has been a star, done an incredible job thus far, respected by everybody. He's a great American," he said. Trump announced the decision on Twitter as his plane landed at Andrews. Priebus had initially gotten into a van with White House policy adviser Stephen Miller and White House social media director Dan Scavino on the tarmac, but shortly after the two men left the van and left Priebus alone, according to the White House pool. The former chief of staff's car then pulled out of the president's motorcade and left while Trump remained on Air Force One.
Scaramucci's wife files for divorce | TheHill: Anthony Scaramucci and his wife are reportedly calling it quits. The White House communication director’s wife has filed for divorce just days after Scaramucci took on his new role in President Trump's administration, according to the New York Post. Deidre Ball was tired of Scaramucci’s “naked ambition, which is so enormous that it left her at her wits’ end,” a source told the Post in a Friday story. Scaramucci and Ball, who once worked as vice president in investor relations at her husband’s former hedge fund, have reportedly been married for three years and have two children. “Deidre is not a fan of Trump,” a source told the paper, “and she hasn’t exactly been on board and supportive of Anthony and his push to get back into the White House.”
Liam Fox drops by to chat -The Office of the U.S. Trade Representative and British trade officials will begin their Trade and Investment Working Group today, with the hope that it could lead to a bilateral trade agreement after the United Kingdom officially exits the European Union. However, the two days of talks are likely to focus on a raft of near-term measures the two sides could achieve, according to business sources briefed on what to expect. Story Continued Below “Our exit from the European Union offers an unprecedented opportunity to reshape our independent trading ambitions and build on the already strong trading relationship with our single largest trading partner — the U.S.,” U.K. Secretary of State for International Trade Liam Fox said in a statement, ahead of the meeting with USTR Robert Lighthizer and members of the USTR’s European office. Fox is expected to arrive with a list of as many as 24 “confidence-building measures” that fall well outside the EU’s purview, business sources said. The British government is keeping the specifics on those items close to the chest, but sources said they didn’t expect them to be controversial. Separately, the two sides are also planning to review existing U.S.-EU regulatory deals on issues like air travel and mutual recognition agreements. The other items on the agenda will dabble in longer-term prospects, such as an early effort to scope out what an eventual free trade agreement might cover, sources said. “Although it’s too early to say exactly what would be covered in a potential deal, the working group is the means to ensure we get to know each other’s issues and identify areas where we can work together to strengthen trade and investment ties,” Fox said. A U.S. trade official told Morning Trade the talks will lay the groundwork for “commercial continuity,” adding that early discussions will also explore ways to strengthen trade ties that are consistent with the U.K. trade obligations as an EU member.
The Empire Strikes Back: Japan Jacks Up US Beef Import Tariffs To 50% --President Donald Trump’s decision to withdraw the US from the 12-nation Trans Pacific Partnership angered the Japanese, provoking fears of a bruising trade showdown between the world’s largest and third-largest economies. On Friday, the Japanese instituted a new policy that will do little to assuage those concerns.After Japan signed a sweeping trade agreement with the European Union, a move that pundits warned would weaken the US’s position as a dominant player in the global economy, the country has taken another dramatic step clearly aimed at retaliating against the US: Japan said it would impose a temporary 50% tariff on frozen beef from the US and several other countries. According to the Wall Street Journal, Japan’s decision to crack down on frozen beef importswas mandated by a 1994 global trade deal that would’ve been scrapped under the TPP. US trade groups are already warning about how the decision will negatively impact beef prices stateside. “The U.S. Meat Export Federation said Japan’s move would have negative implications for both U.S. beef producers and Japanese restaurant chains that rely on frozen American beef. The group “will work with its partners in Japan to mitigate the impact” of the move as much as possible, said Chief Executive Philip Seng.
Final decision on steel trade policy may have to wait, Trump tells WSJ (Reuters) - A final decision on a steel trade policy may have to wait until other top-priority issues on his agenda get addressed, U.S. President Donald Trump told the Wall Street Journal in an interview on Tuesday. The administration would take time in making a decision on whether to block steel imports, Trump told the Journal, adding that "we don't want to do it at this moment". on.wsj.com/2v5Os6y Trump had previously initiated a 'Section 232' review of the U.S. steel industry that allows for the imposition of tariffs or quotas on imports if they are found to threaten national security. The law, which has been used twice before - to investigate oil in 1999 and iron and steel in 2001 - allows the president to impose restrictions on imports for reasons of national security. "We're going to be addressing the steel dumping," Trump told the Journal, calling it "a very unfair situation". Trump told the Journal his administration was "waiting till we get everything finished up between healthcare and taxes and maybe even infrastructure" for a decision on steel trade policy.
House Republican freshmen show their NAFTA love - President Donald Trump got elected last year railing against NAFTA and other trade agreements. But a new letter from the 32 Republicans who were elected to the House for the first time last year shows that is a lonely position within the party. "We recognize that a 23-year-old agreement needs updating, and commend your desire to make improvements and ensure strict enforcement," the freshman lawmakers said in a letter to U.S. Trade Representative Robert Lighthizer. "We are also keenly aware of the potential for damage to U.S. farmers, businesses, manufacturers, service providers and workers if long-standing agreements are suddenly vacated. Canada and Mexico are our largest export markets, and our $3.5 billion in daily trade with these two countries supports 14 million American jobs."The letter came as the U.S., Canada and Mexico are preparing to hold the first round of talks to renegotiate NAFTA beginning Aug. 16. in D.C. Trump has repeatedly threatened to pull out of NAFTA if the other two countries don't agree to new U.S. terms. Twenty-seven of the 32 signatories are from parts of the country that Trump won in last year’s election, including Rust Belt states like Pennsylvania and Michigan where his anti-NAFTA message seemed to resonate the most. The letter was led by Reps. Roger Marshall of Kansas and Mike Gallagher of Wisconsin, whose states Trump also won. The lawmakers told Lighthizer they were concerned that U.S. industry and farmers are already being hurt as other countries negotiate trade agreements without the United States. “This creates a sense of urgency that makes us glad our predecessors provided you with Trade Promotion Authority, empowering you to launch, negotiate and conclude trade agreements," they said.
Sleeping Monster: The Trade in Services Agreement (TiSA) and Labor -- naked capitalism by Lambert Strether - In our previous posts in this series (here, here, and here) we treated TiSA as a sort of dream of the collective unconscious of the globalist elite hive mind; underneath it all, it’s what they really want, though expressed in prose both opaque and phantasmogoric. We saw how TiSA’s definition of services is so vague, so subject to the manipulations of The Trade Blob that provides legal and technical services to the global elites, as to make the scope of the agreement totalizing. We saw the global dominance of the forces behind TiSA: Really Good Friends of Services (23 WTO members, including the US and the EU and TeamTiSA (chaired by Citigroup, IBM, UPS, Walmart, MetLife and Liberty Mutual). We looked at how TiSA negotiations will be structured and showed how, through its standstill and ratchet limitations, TiSA seeks to arrest any government policies that do not put markets first (for example, Medicare for All) to create a neoliberal utopia. And we urged a re-orientation from defeating treaties — though defeating TPP, and putting TTIP on hold, are all good things — to defeating the forces behind the treaties, because when a treaty is defeated, The Trade Blob simply breaks it up for spare parts and tries again. In this post — after which I’ll give TiSA a rest, unless driven by events — I want to look at TISA and labor, again using using Professor Jane Kelsey‘s TiSA: Foul Play (PDF) as our guide. Of course matters are as horrible as you would think.
Globalizers and global liars - Dean Baker -- As president, Donald Trump has continued to use the same protectionist rhetoric he used during the campaign, even though he has not done much to date to follow through with protectionist policies. Nonetheless, his comments have prompted outrage among most of the media, which is committed to supporting the trade policies of recent administrations. In this respect it is striking how the media slavishly follow the major features of recent trade agreements as the definition of “free trade,” as though the deals were crafted with the goal of advancing some universal principle. This is in spite of the fact that the deals were quite openly crafted in response to the demands of powerful industry groups who cared about advancing their profits, not abstract principles.This matters not only in the debate over whatever trade agenda Donald Trump may ultimately produce, but for the future course of trade policy more generally. The Trump presidency could provide an opportunity for a welcome re‐examination of the direction and goals of trade policy. Unfortunately, the media seem determined to make the two poles in the debate Trump’s theatrics of highlighting outsourcing “bad guys” and more of the same in trade deals like NAFTA and the Trans‐Pacific Partnership. The idea that trade policy could take a fundamentally different course is not on the media’s agenda. The media feel little need to pretend impartiality in pushing the current trade agenda. It is absolutely standard for major media outlets like the New York Times and National Public Radio to tell their audience that any use of tariffs by the United States will lead to massive retaliation and the unwinding of the world trade system. They would like their audience to believe that Mexico or the European Union would jack up the price of major imports like corn or wheat to their consumers by 20 or 30 percent if the United States were to impose a tariff on steel or some other imported item. This is of course possible, but usually politicians are not anxious to whack their voters with a big increase in prices on essential items.
BAT Is Dead: Republicans Kill Border Adjustment Tax --The Trump fiscal agenda - which these days really means tax reform - may be dead, but that does not mean it can't reemerge as a zombie every now and then. That's precisely what happened moments ago when Paul Ryan just announced that after months of speculation whether border adjustment tax will or won't be implemented to help offset Trump's proposed tax cuts, it is now officially dead. A statement Thursday from the so-called Big Six - Ryan, Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch - said due to the unknowns associated with the border-adjusted tax, the group “had decided to set this policy aside in order to advance tax reform.""While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform," "And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base," according to the statement.
Import tax officially abandoned in Big 6 tax reform talks - POLITICO: White House and congressional leaders officially acknowledged Thursday that a controversial tax on imports would be dropped from tax reform, but otherwise provided no new details on a broader plan they expect to start moving through Congress in the fall. The import tax, called border adjustability, was pushed by House Speaker Paul Ryan as a way to fund tax cuts, but it prompted a fierce backlash from retailers, other import-dependent industries and conservative activists. With that tax off the table, Congress, the White House and advocacy groups hope to present a more united front on tax reform, though other disagreements will surely flare as lawmakers work on a replacement. In a statement that was otherwise largely symbolic, the "Big Six" tax reform negotiators vowed to reduce tax rates, simplify the tax code and improve U.S. economic growth by changing tax laws. The declaration — from Ryan, House Ways and Means Chairman Kevin Brady, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell, Senate Finance Chairman Orrin Hatch, and National Economic Council Director Gary Cohn — on border adjustability confirmed what was widely anticipated for months. "While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform," the statement said. "... [W]e are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base," it said.
Killing the Border Tax Solved One Problem. It May Create Several - Republican leaders billed their decision to abandon a controversial plan to tax companies’ domestic sales and imports as an essential step toward uniting their efforts to overhaul the U.S. tax code -- but its death adds new complications to an already intricate task. Though the so-called border-adjusted tax had circled the drain for months, its last gasp on Thursday greatly increased the chances that any tax cuts Congress delivers will be shallower than President Donald Trump and other GOP leaders want, or shorter-lived, experts said. Without the proposal’s estimated $1 trillion in new revenue, a resulting bill may look more like the temporary tax cuts of 2001 than the once-in-a-generation overhaul of 1986 on which Trump and lawmakers have set their sights. The death of the BAT “means a lot,” said Douglas Holtz-Eakin, “Obviously it was a big pay-for so it puts pressure on the other pay-fors. There’s a lot at stake.” Trump administration officials and top congressional lawmakers said in a joint statement Thursday that the border-adjusted tax wouldn’t be part of negotiations on tax legislation. The announcement was a victory for retailers and other import-heavy industries and for groups backed by billionaire brothers Charles and David Koch, which had strenuously opposed the measure. The proposal, which had been pushed by House Speaker Paul Ryan for more than a year, enabled Ryan and his allies to propose lowering the corporate tax rate to 20 percent from the current 35 percent. Trump has called for going even lower -- to 15 percent, a target that may be far harder to achieve. Republicans, who control only 52 seats in the Senate, plan to use congressional budget rules that would allow for approving a tax bill with a simple majority. But those rules also require that tax cuts would have to be offset so they don’t add to the budget deficit in the long run. If they did increase the deficit, they’d have to be set to expire over time.
Trump’s ‘Great National Infrastructure Program’? Stalled - NYT - As a candidate, President Trump billed himself as a new breed of think-big Republican, pitching a $1 trillion campaign pledge to reconstruct the nation’s roadways, waterworks and bridges — along with a promise to revive the lost art of the bipartisan deal. In the White House, Mr. Trump has continued to dangle the possibility of “a great national infrastructure program” that would create “millions” of new jobs as part of a public-private partnership to rival the public works achievements of Franklin Delano Roosevelt and Dwight D. Eisenhower. He chastises anyone who forgets to include it near the top of his to-do list, telling one recent visitor to the Oval Office, “Don’t forget about infrastructure!” But an ambitious public works plan, arguably his best chance of rising above the partisan rancor of his first six months in office, is fast becoming an afterthought — at precisely the moment Mr. Trump needs a big, unifying issue to rewrite the narrative of his chaotic administration. Infrastructure remains stuck near the rear of the legislative line, according to two dozen administration officials, legislators and labor leaders involved in coming up with a concrete proposal. It awaits the resolution of tough negotiations over the budget, the debt ceiling, a tax overhaul, a new push to toughen immigration laws — and the enervating slog to enact a replacement for the Affordable Care Act. Mr. Trump’s team has yet to produce the detailed plan he has promised to deliver “very soon,” and the president has yet to even name any members to a new board he claimed would green-light big projects. The collapse of his health care overhaul effort seemed to clear one item out of the way. But it also raised serious doubts about the ability of Republicans to pass anything other than regulatory rollbacks or routine spending bills. “The president would have been better off beginning his agenda with a major infrastructure package,” said Senator Susan Collins, Republican of Maine, who has been working with the White House on the issue. “It would give him a win on an important agenda item for him,”
Tax Overhaul in Doubt as House GOP Stuck on Budget Disagreements -- The House is set to leave for its August recess without having taken the first essential step to overhauling the U.S. tax code: agreeing on a 2018 budget resolution. Disputes among House Republicans over spending levels and the controversial border-adjusted tax proposal are preventing Speaker Paul Ryan from winning enough support to schedule a floor vote on the budget that a House panel approved last week. With House members planning to leave Washington Friday for a five-week recess, the lack of a budget is raising doubts that a tax rewrite -- one of President Donald Trump’s top priorities -- can get done this year, or even before the 2018 elections. “Clearly, no budget, no tax reform,” said the House’s chief tax writer, Representative Kevin Brady, a Texas Republican. While Ryan has abandoned his original dream of completing by August a tax overhaul that would slash individual and corporate rates, the speaker had until recently hoped to have an agreed-upon budget by now. The budget is a key part of the process known as reconciliation, which Republicans want to use to enact a tax code revamp without Democratic support. The House and Senate previously approved a detail-free 2017 budget resolution that they intended to use to repeal the 2010 health-care law with only Republican votes. Senate Republicans, who’ve been focused on that repeal effort for months, have said they’ll wait to see what the House does with the 2018 budget resolution.
The more complex the tax code, the more the wealthy benefit -- It is a book that few, if any, have ever read cover to cover, contains over 4 million words and gets longer every year. Yet, every working American has come in contact with it. That “book” is of course, the tax code. Just over 100 years ago, the tax code was only 27 pages long; short enough so every taxpaying American citizen could read and understand it. However, throughout the last century, as America grew, so did the tax code, and as the tax code grew, it transformed from a document an "average Joe" could read and understand, to a document that relies on a $10 billion industry to help Americans interpret it. In conjunction with its increasing size is the rising tide of special favors littered throughout it. As noted in former Sen. Tom Coburn Tom Coburn’s (R-Okla.) Tax Decoder, “The biggest breaks go to corporations and individuals who can afford the best lobbyists, lawyers and accountants, leaving everyday Americans to fill the gap.” While it is true the top 1 percent of earners in this country pay 24 percent of all U.S. taxes, many wealthy individuals contribute little or nothing in taxes. In fact, according to the Tax Policy Center’s analysis, about 4,000 millionaires paid no federal income tax in 2011. The top 1 percent is a hotly-debated topic, but they are not the only ones to blame for the $400 billion-plus tax gap (difference between taxes paid and taxes owed) our country has every year.Corporations, like high-earners, can afford to pay the best accountants and lawyers, so they can navigate the complicated tax code and find the biggest tax breaks. According to one study, in 2014, 111 of 288 Fortune 500 companies surveyed either paid zero taxes or received a refund in at least one year from 2008 to 2012. In addition, many multinational corporations use the United States’ worldwide tax system to harbor earnings o verseas. According to securities filings, U.S. companies are holding over $2 trillion overseas. The current system, which allows U.S. companies to defer foreign-earned income until it is repatriated, creates an incentive for multinational corporations, like Apple, to locate operations in countries with lower tax rates in order to avoid U.S. corporate tax.
Why Tax Cuts for the Rich Solve Nothing - Joseph E. Stiglitz – Although America’s right-wing plutocrats may disagree about how to rank the country’s major problems – for example, inequality, slow growth, low productivity, opioid addiction, poor schools, and deteriorating infrastructure – the solution is always the same: lower taxes and deregulation, to “incentivize” investors and “free up” the economy. President Donald Trump is counting on this package to make America great again. It won’t, because it never has. When President Ronald Reagan tried it in the 1980s, he claimed that tax revenues would rise. Instead, growth slowed, tax revenues fell, and workers suffered. The big winners in relative terms were corporations and the rich, who benefited from dramatically reduced tax rates. Trump has yet to advance a specific tax proposal. But, unlike his administration’s approach to health-care legislation, lack of transparency will not help him. While many of the 32 million people projected to lose health insurance under the current proposal don’t yet know what’s coming, that is not true of the companies that will get the short end of the stick from Trump’s tax reform. Here’s Trump’s dilemma. His tax reform must be revenue neutral. That’s a political imperative: with corporations sitting on trillions of dollars in cash while ordinary Americans are suffering, lowering the average amount of corporate taxation would be unconscionable – and more so if taxes were lowered for the financial sector, which brought on the 2008 crisis and never paid for the economic damage. Moreover, Senate procedures dictate that to enact tax reform with a simple majority, rather than the three-fifths supermajority required to defeat an almost-certain filibuster by opposition Democrats, the reform must be budget-neutral for ten years. This requirement means that average corporate-tax revenue must remain the same, which implies that there will be winners and losers: some will pay less than they do now, and others will pay more. One might get away with this in the case of personal income tax, because even if the losers notice, they are not sufficiently organized. By contrast, even small businesses in the United States lobby Congress.
Bannon Is Said to Call for 44% Tax on Incomes Above $5 Million - White House chief strategist Steve Bannon supports paying for middle-class tax cuts with a new top rate of 44 percent for Americans who make more than $5 million a year, according to a person familiar with his thinking.It’s unclear whether President Donald Trump would support the move, which would bring the top rate, currently 39.6 percent, to the highest level in 30 years. Trump has said he’s focused on tax changes that would help the middle class, but an analysis this month of the tax outline the White House released in April shows it would mostly benefit top earners.That plan condensed the seven existing individual income tax rates to three, with a top rate of 35 percent. Income thresholds weren’t included in the outline.White House officials and congressional leaders have been meeting weekly to agree on a framework to rewrite the tax code. So far, they haven’t announced any decisions on how deeply to cut tax rates or whether the lost revenue should be offset, and how.It’s not the first time that kind of tax increase has been suggested. During the 2016 presidential campaign, Democratic nominee Hillary Clinton had proposed a 4 percent surcharge on Americans making more than $5 million annually. It was part of a set of proposals that her campaign said would ensure the wealthy paid a higher effective tax rate than the middle class.
Those Pointless Upper-Middle-Class Entitlements - Justin Fox -- Let’s talk about upper-middle-class entitlements, the subsidies that flow almost entirely to those in the upper fifth or even tenth of the income distribution. You know, the home mortgage interest deduction and the tax subsidies for 401(k)s, IRAs and other retirement plans. The tax break for 529 college savings accounts belongs spiritually on this list, too, although its fiscal impact is much, much smaller. Here, courtesy of Congress’s Joint Committee on Taxation, are a few of the most notable “tax expenditures” and their estimated cost in the fiscal year that ends this Sept. 30.The Congressional Budget Office projects a federal deficit of $693 billion for the current fiscal year. Take away the tax expenditures in the above table (which add up to $971.8 billion) and in theory you get a budget surplus of $278.8 billion.Of course, we wouldn’t want to take away all of those tax expenditures, would we? The earned income tax credit and the Social Security exclusion, for example, are targeted at people with pretty low incomes. And while the direct benefits of reduced tax rates on capital gains and dividend income flow disproportionately to the very wealthy, there are economists who argue that these lower rates stimulate investment and thus economic growth. 1 It’s a lot harder to find reasoned defenses of the upper-middle-class tax breaks. In fact, the empirical evidence just keeps piling up against them. A study of retirement saving published in the Quarterly Journal of Economics in 2013 -- using data from Denmark because it was abundant and because a 1999 reduction in retirement tax benefits for the wealthy enabled handy before-and-after comparisons -- found that “each $1 of government expenditure on subsidies increases total saving by only 1 cent.” Wealthy people who would save for retirement in any case respond to subsidies by shifting assets into tax-sheltered accounts; the less wealthy don’t respond much at all. 2 Meanwhile, the National Bureau of Economic Research has just released a working paper that finds the mortgage interest deduction sorely wanting…
Republicans embrace tax hike targeting Democratic states — Republicans aren't usually big on raising taxes, but they're really eager to eliminate the federal deduction for state and local taxes. Why? A look at the states that benefit the most from the tax break helps explain it — they are all Democratic strongholds. New York, Connecticut, New Jersey and California top the list of states where taxpayers get the biggest deductions. Not a single Republican-leaning state ranks in the top 10. Proposals by House Republican leaders and President Donald Trump would repeal the tax break as part of their packages to overhaul the American tax code. But they are getting a lot of pushback from Republican lawmakers in Democratic-controlled states. The standoff illustrates how hard it is for Congress to eliminate any popular tax break, even one that primarily benefits the ruling party's political opponents. Almost 44 million claimed the deduction in 2014, according to IRS statistics. That's nearly every taxpayer who itemizes deductions, a little less than 30 percent of all taxpayers. Sullivan analyzed which states would be hit hardest by repealing the tax deduction. The Associated Press did a similar analysis and came to the same conclusion. Nationally, the average deduction is about $11,800, but it is much bigger in many blue states. New York is tops with an average deduction of more than $21,000. Connecticut is next at $18,900, followed by New Jersey at $17,200 and California at $17,100. These are states with high property values, high costs of living, high incomes and relatively high state and local taxes compared to other states. They are also states President Donald Trump lost in last year's election.
Dems pitch ‘a better deal’ with populist new agenda after 2016 election disappointment (AP) — Democratic leaders believe they lost to President Donald Trump partly because voters don't know what the party stands for. So they're trying to rebrand themselves with a new slogan and a populist new agenda as they look ahead to the 2018 midterms. It's called "A Better Deal" and House and Senate Democratic leaders are rolling it out Monday afternoon in Berryville, Virginia. They're intentionally traveling outside the Beltway, and into the district of one of the GOP House members they hope to defeat next year, Barbara Comstock. Senate Minority Leader Chuck Schumer of New York, House Minority Leader Nancy Pelosi of California, along with other top House and Senate Democrats, are making the presentation after months of internal debate and analysis of polling and focus groups. Democrats think of themselves as the party of working people and were surprised when Trump was able to steal working-class voters from them. They subsequently figured out that voters don't know what the party stands for, and the new effort is aimed at changing that. Schumer acknowledged on Sunday that Democrats were partially to blame for the American people not knowing what the party stands for. "When you lose an election with someone who has, say, 40 percent popularity, you look in the mirror and say what did we do wrong? And the number one thing that we did wrong is we didn't have -- we didn't tell people what we stood for," Schumer said on ABC's "This Week."
Progressives Actually Like Democrats' New Message | HuffPost: ― Leading progressives praised the new message unveiled by top congressional Democrats Monday that stresses economic policy, suggesting the party is moving on from the internecine finger-pointing that has dogged it since November’s election.Under the slogan “A Better Deal: Better Jobs, Better Wages, Better Future,” House and Senate Democratic leaders laid out a three-pronged platform with ideas for creating decent-paying jobs; lowering household expenses, chief among them prescriptions drugs; and improving access to the education and training Americans need to compete in the job market.The proposals represent the party’s first major attempt to recalibrate its central themes ahead of the 2018 midterm elections and restore its historic reputation as the party of ordinary working people following Republican Donald Trump’s surprise victory in 2016′s presidential race. In a symbolic bid to emphasize their desire to reach a wider swath of Americans, party leaders announced the new agenda in Berryville, Virginia ― some 65 miles from the halls of power in Washington.Prominent liberals, who have been nudging the party in this direction for years, mostly welcomed the rebranding effort.“This is a very refreshing message ― it doesn’t sound like poll-tested messaging. It sounds authentic and passionate and bold,” said Tamara Draut, vice president for policy and research at Demos, a progressive think tank and advocacy group.
Google Is The Biggest Lobbying Spender In Tech -- The fact that many major tech companies are headquartered in Silicon Valley doesn’t mean they don’t have a voice in Washington as well. As Statista's Feliz Richer notes, according to documents filed in accordance with the Lobbying Disclosure Act, companies such as Google, Facebook and Amazon spend millions every year trying to legally influence D.C. lawmakers.The following chart shows how the lobbying expenditure of Google,Apple, Facebook and Amazon has developed over the past few years. For additional information please refer to the official database. Interestingly, the quarterly filings not only reveal how much the companies spend on their lobbying efforts, they also provide us with information on which issues these efforts are related to. Take Google for example: in the second quarter of 2017, the search giant spent $5.9 million on lobbying with respect to issues ranging from more obvious ones such as regulation of online advertising and immigration of highly skilled individuals to more surprising ones such as wind power and unmanned aerial systems technology.
CBO: Under the latest Senate healthcare bill, deductibles could be more than some people earn - The latest effort by Republicans in the Senate to overhaul the US healthcare system could have an unexpected effect on deductibles: they could get so high they're actually more than the poorest Americans earn. That's a conclusion of the Congressional Budget Office's latest assessment of the new version of the Better Care Reconciliation Act. Deductibles are what you pay before your insurance kicks in. The CBO estimates that by 2026 the second-lowest-priced plans (the silver plans, in the Obamacare marketplace) would have $13,000 deductibles. Under the Affordable Care Act currently, a deductible for the same plan would be $5,000 in 2026. The deductible would be more than the annual income of someone who is at 75% of the federal poverty level. Even for people who make $56,800, the deductible would make up 25% of their annual income. The ACA (Obamacare) guards against this by setting a limit on how much people can spend on healthcare on out-of-pocket expenses. In 2017, that's $7,150 for an individual. By 2026, the CBO said that will rise to $10,900, making the plans with the $13,000 deductible actually against the law unless those caps are changed. But if the caps are changed, the increased deductibles would leave people on those plans on the hook for a lot more of their medical coverage. In general, high deductibles have become increasingly common in the past few years. A survey in September 2016 found that 51% of workers had a plan that required them to pay up to $1,000 out of pocket for healthcare until insurance picks up most of the rest.
What Will It Take for Republicans to Be Able to Revise the ACA -- The first section of issues McConnell and Republicans must overcome requires 60 votes due to the Parliamentarian ruling the provisions of the BCHA violate the Byrd Rule; consequently, the Reconciliation procedure requiring only 51 votes can not be used to repeal the Affordable Care Act (ACA) or waive the Byrd rule. There is little McConnell and Republicans can do to get past a supermajority vote. McConnell appears to be confident and it may also be possible to kill the supermajority vote. It will be interesting to see what he is thinking. The vote will take place this week unless canceled or rescheduled. The provisions that the Parliamentarian ruled may be stricken if raised by a point of order include (requires 60 votes to waive the Byrd rule)
• The provision defunding Planned Parenthood;
• The provisions prohibiting the use of small business tax credits and individual market premium tax credits to pay for health plans that cover abortions;
• The sunset of an essential health benefit coverage requirement for Medicaid plans;
• The section funding cost-sharing reductions (CSRs), which the Parliamentarian ruled was redundant of current law, which already funds them (this ruling seems contrary to the lower court’s ruling in House v. Price that money had not been appropriated for the CSRs, but is consistent with the belief that the CSRs are already built into the budget baseline, thus an appropriation does not affect the deficit. A bill to clarify the appropriation situation could, of course, be passed separately from the reconciliation act;
• The six-month waiting period for individuals who have not maintained continuous coverage;
• The provision sunsetting the federal medical loss ratio requirement and allowing states to set the medical loss ratio;
• A provision, that has been removed from the most recent version of the BCRA, that might have allowed states to rollover unused Medicaid block grant funds and possibly use them for other purposes;
• The “Buffalo Bailout” which would have limited the ability of New York State to require counties other than those in New York City to contribute funding to the state’s Medicaid program (the ruling on this provision should caution against including further state-specific provisions in future versions of the legislation);
• A provision grandfathering certain Medicaid waivers and prioritizing Medicaid Home and Community-Based Services Waivers;
• A provision requiring a report by the Department of Health and Human Services (HHS) to Congress regarding the preferability of adopting a different system for reporting Medicaid data; and,
• A section requiring HHS to consult with the states before finalizing Medicaid rules.
The wild Senate health care debate is hurtling toward an unpredictable finish -- In the next day or so, Senate Republicans are expected to take their first vote in a health care crusade that has consumed Congress for the past six months.Nobody knows what they’re voting on. Nobody knows if it can pass. Nobody is even sure if the Senate’s plan to repeal and replace Obamacare, as a policy, can even work.It is a bewildering state of affairs — and health insurance for millions of poor and middle-class Americans hangs in the balance. Every path forward that Senate Majority Leader Mitch McConnell has floated appears to lack the necessary support of 50 Republicans. Nevertheless, Senate leaders are promising to vote within the next 36 hours, without a workable bill, a final Congressional Budget Office score, or perhaps even the votes to pass anything. Confusion and uncertainty are the order of the day. But this, as best as we can tell, is what’s going on.
- 1) Nobody knows which health care bill the Senate is trying to pass Senate Republicans currently have two health care bills. One is the Better Care Reconciliation Act, the repeal-and-replacement plan that Republicans have been discussing and drafting in private for the past two months. That’s the health care bill you’ve been hearing about for most of the Senate debate. That bill would overhaul Medicaid, end Medicaid expansion, scale back assistance for people buying private coverage, and roll back some of Obamacare’s regulations. The result would be, according to the CBO, 22 million fewer Americans with insurance in 2026. The other is the Obamacare Repeal Reconciliation Act, an updated version of 2015 legislation that repeals all funding for Obamacare’s insurance expansion but keeps its regulations on insurers. This bill would lead to 32 million fewer Americans having health coverage 10 years from now, according to the CBO.
- 2) The vote tally is fluid, but both bills have a steep climb to passage. There are two critical votes that could happen this week. The first is called “the motion to proceed,” which simply opens up the debate on the Senate floor. Then at some point after that, there would be a vote on one of the Senate bills — or maybe both. The ORRA seems dead. Three Senate Republicans have already said they won’t vote for the repeal-and-delay bill, and 10 more might join them when the time comes. McConnell might nonetheless put it up for a vote, to give conservatives the vote on clean repeal that they’ve been asking for and to show them that such a plan doesn’t have the support to pass. The BCRA also appears short on votes. But repealing and replacing Obamacare probably has a more viable path to passage, though the legislation as written still has some huge policy and political problems.
Senate Health Care Legislation Would Grant HHS Unprecedented Power Over States - In an earlier Health Affairs Blog post, we described several provisions in the Senate’s Better Care Reconciliation Act (BCRA) that would grant the U.S. Department of Health and Human Services (HHS) largely unchecked authority to make decisions that could significantly affect state budgets. We noted that, based on past interactions between state and federal Medicaid officials, HHS might use its resulting leverage to pressure states to fall in line with the current Administration’s policy preferences. Perhaps inevitably, exceptionally broad delegation of policymaking authority has become a defining feature of the Senate Majority Leader’s quest to restructure one-sixth of the American economy without hearings, expert testimony, committee consideration, or other safeguards of regular order. The President famously observed that health issues are “incredibly complicated.” Resolving such issues with careful attention to detail is too high a bar for most legislators to clear while moving at breakneck speed. For Republican leaders in Congress, the almost inescapable solution has been to structure legislation so that HHS will eventually answer policy questions that Congress currently lacks the time to resolve. Wholesale delegations of lawmaking power to Executive-branch agencies will almost certainly be larded throughout proposed legislation if the Senate approves this week’s expected “motion to proceed,” which would allow passage of a final bill after just 20 hours of debate on the Senate floor.
Waste Management To Offer Dead Body Pickup Service In Response To Proposed Health Care Changes — The Houston-based Waste Management corporation announced a plan to offer curbside dead body pickup service to offset what critics say would be a direct result “TrumpCare,” which will overwhelm present mortuary services. Weekly pickup will be available at a reduced rate but special same day retrieval will cost more for individuals not comfortable with the smell of death lingering in their home. Body bags are available on their website but they will accept bodies properly bagged and duct taped to ensure minimal leakage of fluids. As the largest environmental solutions provider in North America they have the power to revolutionize the business model for cleaning up neighborhoods of excess dead bodies. Many have expressed concerns this will impact the small mortuary businesses so we talked to our local mortuary, Hooper and Weaver to document their opinion on the subject. The owner didn’t want to talk to us, but we were able to talk to Gus the embalming guy. “With millions of Americans about to lose health coverage I think there will be plenty of dead bodies for everyone,” Gus told us while he searched for a vein on an elderly man’s bloated corpse. “Not everyone has the money for fancy funerals, some families just need their dead relatives out of the house in a timely fashion and I think Waste Management has the resources to make that happen,” he elaborated while we admired the various tubes and contraptions involved in the embalming process.
Senate passes "motion to proceed" on health care.-- By a 51–50 vote, Republicans have passed a "motion to proceed" that allows the Senate to begin consideration of the Obamacare repeal-and-replace plan that passed the House of Representatives in May. The deciding vote was cast by Vice President Mike Pence; Maine Sen. Susan Collins and Alaska Sen. Lisa Murkowski were the only Republican members to vote against the motion. Republican Sen. John McCain returned to Washington just days after announcing he's been diagnosed with brain cancer to cast a "yes" vote. What happens next is that the Senate will debate health care reform (or, rather, give perfunctory speeches about it) for 20 hours—breaks are allowed—before voting on "amendments" to the House's bill. These "amendments" can be entirely new bills meant to completely take the place of what the House passed, and any senator can propose them. The meaningful amendments, though, are those endorsed by Republican leaders, and on that front, there is uncertainty: Majority Leader Mitch McConnell has not yet released final text for the Better Care Reconciliation Act repeal-and-replace bill that his caucus has been working on for weeks. Moreover, the BCRA amendment/bill will likely need 60 votes to pass rather than 50 because it is expected to include provisions that haven't been approved by the Senate parliamentarian for use in the reconciliation process. So the BCRA is not currently expected to pass. McConnell's ultimate "amendment" plan, then, is reportedly to try to propose something called "skinny repeal," which would eliminate the ACA's mandates that large employers must provide insurance to their employees and that individuals who aren't covered by employers must buy insurance through state marketplaces. It's not even clear that this Plan C will pass, and it would possibly be a marketplace-ruining "death spiral" disaster if it became law—but as Slate's Jordan Weissmann explains, it's actually only being proposed so that the Senate will have passed a piece of health care legislation that could then be synthesized with the House's American Health Care Act via a "conference committee." Both chambers would then have to vote to approve whatever the conference committee came up with. In other words, we might have a long way to go on this, still.
Senate Votes To Proceed On Health Care Bill That Doesn’t Exist Yet - With Vice-President Pence casting the tie-breaking vote, the Senate voted this afternoon to proceed forward with debate on a health care reform bill without knowing which bill they’d be debating: The Senate narrowly voted on Tuesday to begin debate on a bill to repeal major provisions of the Affordable Care Act, taking a pivotal step forward after the dramatic return of Senator John McCain, who cast a crucial vote despite his diagnosis of brain cancer.Vice President Mike Pence cast the tie-breaking vote.The 51-50 vote came only a week after the Republican effort to dismantle a pillar of former President Barack Obama’s legacy appeared all but doomed. It marked an initial win for President Trump, who pushed, cajoled and threatened senators over the last days to at least begin debating the repeal of the health care law.But even with that successful step, it is unclear whether Republicans will have the votes they need to uproot the law that has provided health insurance to millions of Americans. The Senate will now begin debating, amending and ultimately voting in the coming days on legislation that would have a profound impact on the American health care system.By a single vote, the Senate cleared the way for an epic battle over the future of the health law. Only two Republicans, Susan Collins of Maine and Lisa Murkowski of Alaska, voted against the motion. The debate has broad implications for health care and households in every state.Senate Republican leaders have struggled all year to fulfill their promise of repealing the 2010 health care law, and the procedural vote in the Senate on Tuesday risked being another big setback for the party. The House narrowly approved a repeal bill in early May, but only after Republicans overcame their own difficulties in that chamber.President Trump kept up the pressure on Tuesday by posting on Twitter. “After 7 years of talking,” he said, “we will soon see whether or not Republicans are willing to step up to the plate!”The successful procedural vote on Tuesday is an important step forward for the Senate majority leader, Mitch McConnell of Kentucky, who only a week ago appeared to have failed in his effort to put together a health bill that could squeak through the narrowly divided Senate. That said, it remained far from certain whether Republicans would actually be able to agree on a bill in the days to come — and what exactly the contents of that bill would be.
Don’t Be Fooled By This Senate Vote: The Road To Repealing Obamacare Is Just As Long As It Was Yesterday - David Dayen - Driven forward by taunts and threats from President Donald Trump, 50 Republicans snapped to attention in the Senate on Tuesday and voted in dramatic fashion to proceed to a debate on repealing the Affordable Care Act. The vote paves the way for Republicans to move forward — though the Senate seems unlikely to be able to carry out any of its most ambitious plans for undoing President Barack Obama’s signature health care reform law. Instead, Republicans appear poised to pass a limited repeal of several elements of the Affordable Care Act, if even that much. To get to this point, McConnell had to effectively take off the table the proposals that had been on it up until last week. The pomp and the circumstance served to obscure the reality that the only thing accomplished was an agreement to debate something — though that something is still itself obscured. A straight repeal bill similar to what Congress passed in 2015, only to suffer Obama’s veto, does not have the 50 votes needed to pass. The “Better Care Reconciliation Act,” the repeal-and-replace bill that has confounded the Senate for months, also lacks support. [Update: it failed badly Tuesday night 57-43, with nine Republicans voting no, seven more than they can afford to lose.] And two key provisions to amend that bill — the “Cruz amendment” to allow non-compliant Obamacare plans to be sold, and an amendment from Rob Portman restoring some funding to Medicaid — will require 60 votes because they haven’t been scored by the Congressional Budget Office. So they will fail. The new idea, per NBC News, is to come up with a “skinny repeal.” This would consist merely of eliminating the individual and employer mandates and, perhaps, the medical device tax on large non-retail medical equipment. Would there even be 50 votes for a skinny repeal? “We’ll see. I don’t know. I think there are things we can get 50 votes for at the end of the process,” Thune said.
What’s next for the Senate Republicans’ effort to repeal Obamacare, in one flowchart -On Tuesday, Senate Republicans voted, 51-50, to start debate on the Obamacare repeal, with Vice President Pence casting the tie-breaking vote. Later in the night, the Senate voted on the Better Care Reconciliation Act — a repeal and replace bill — which failed, 43-57. So what’s next? As Vox’s Dylan Scott writes, the Senate will likely vote next on the Obamacare Repeal Reconciliation Act, which repeals most of the Affordable Care Act without a replacement. Then we’ll likely see a lot more floor debate, a vote-a-rama in which Senators from both sides of the aisle introduce amendments, and then Senate Majority Leader Mitch McConnell will introduce a final bill that they’ll actually vote on — perhaps the “skinny repeal,” which repeals the individual mandate and little else. To give you a better idea of what’s to come, here’s an updated flowchart showing the narrow but feasible path Republicans have to pass a health care bill:
First Vote to Amend and Repeal Rejected -- The first vote in the Senate to amend the PPACA was rejected. “Senators voted 57-43 late Tuesday to reject the plan in the first vote on an amendment to the bill. Those voting “no” included nine defecting Republicans. The vote underscored problems Republicans will have in winning enough votes to recast Obama’s statute.The rejected proposal included language by Senate Majority Leader Mitch McConnell erasing the Obama law’s tax penalties on people not buying insurance and cutting Medicaid.Language by Texas Republican Sen. Ted Cruz would let insurers sell cut-rate policies with skimpy coverage. And there was an additional $100 billion to help states ease costs for people losing Medicaid sought by Midwestern. By 57-43 — including nine GOP defectors — it blocked a wide-ranging proposal by McConnell to erase and replace much of the statute. It included language by Sen. Ted Cruz, R-Texas, letting insurers sell cut-rate policies with skimpy coverage, plus an additional $100 billion to help states ease out-of-pocket costs for people losing Medicaid sought by Midwestern moderates including Rob Portman, R-Ohio.”
Repeal ACA Rejected Again --There is a lot of bad dialogue going on in the news these days. In my last three posts, I have tried to point out what can be passed by Repubs with just 51 votes and what requires 60 votes. Much thought being given to defunding Planned Parenthood and the Mandate(s). If Repubs chose to follow Reconciliation and not nuke it and/or the supermajority vote, both of the defunding and the elimination of the Mandate(s) are not going to happen. The Parliamentarian decided on 60 votes for each to pass. “The discussions came as the Senate rejected 45-55 a straight repeal of Obamacare with a two-year delay in implementation to allow Congress to work out a replacement. Seven Republicans opposed the measure.”In the 2015 bill, Republicans had attempted to kill the mandate. The parliamentarian had ruled it could not be done in Reconciliation. “In 2015 the Senate revised the ACA repeal reconciliation bill passed by the House after the Parliamentarian ruled that it could not repeal the individual and employer mandates under the Byrd rule, amending the bill to repeal only the penalties imposed by the mandates.” This would require sixty votes to accomplish. Sens. Lamar Alexander, R-Tenn.; Shelley Moore Capito, R-W.Va.; Susan Collins, R-Maine; Dean Heller, R-Nev.; John McCain, R-Ariz.; Lisa Murkowski, R-Alaska; and Rob Portman, R-Ohio, joined all Democrats to defeat the amendment, which would have given Congress two years to devise a replacement to the 2010 Affordable Care Act.
GOP Hopes for Obamacare Repeal Rest on ‘Skinny’ Bill - Senate Republican hopes to overhaul the U.S. health insurance system appear to hinge on the passage of a “skinny” bill that would only repeal a select few provisions in the 2010 health care law. GOP senators and aides anticipate that several of the other Republican health care proposals expected to be considered by the chamber in the coming days will fail, clearing the way for a package that would likely just repeal the employer and individual mandates and an excise tax on medical device manufacturers. But even that plan to advance a slimmed-down repeal bill faces difficult odds. The chamber on Tuesday narrowly approved a motion to proceed to the House-passed bill to repeal and replace the 2010 law, with Vice President Mike Pence breaking a 50-50 tie. Republican leadership can now bring up for a vote several different proposals intended to, in some way or another, revamp the country’s health care system.Despite clearing that procedural hurdle, the GOP still faces an uphill battle in rallying the support necessary to pass a final bill out of the chamber. Republican lawmakers are openly doubting that they have the votes necessary to advance either a repeal-only bill or legislation that would both repeal and replace portions of the health care law.“If this process ends in failure, which seems likely, then let’s return to regular order,” said Sen. John McCain of Arizona, who made a triumphant return to the chamber to cast one of the deciding votes on the motion to proceed after being diagnosed with brain cancer last week.Senate Majority Leader Mitch McConnell and his top lieutenants, speaking to reporters after the vote, also acknowledged the difficulty facing the conference. “We’re not out here to spike the football,” the Kentucky Republican said. “We’ll finish at the end of the week, hopefully, with a measure that can either go to the House and either be taken up or go to conference.”
A “skinny repeal” of Obamacare could bring the US health-care system to “almost complete collapse” - The US Senate has voted to open debate on the Republican party’s health-care proposals for replacing the Affordable Care Act, a.k.a. Obamacare. According to NBC’s congressional reporter, the Senate’s next step is to vote on a full repeal of Obamacare—which will probably fail without a proposed bill to replace it. Then it will try an amended version of the Better Care Reconciliation Act, the latest Senate proposal; this will also likely fail since it hasn’t yet been scored by the Congressional Budget Office and thus needs 60 votes to pass rather than just 51. So what then? The likeliest option is that senators will vote on a bill that gets rid of just parts of Obamacare—the individual and employer mandates, which impose penalties on individuals and businesses above a certain size that refuse to buy health insurance. Abolishing these mandates is considered a “skinny repeal.”What will that mean? Josh Bivens, research director at the Economic Policy Institute, says it would be catastrophic. Canceling the employer and individual mandates would, according to a CBO estimate, lead to 15 million people losing health insurance over the next decade. That’s not as bad as a complete repeal (32 million) or as the various proposed versions of the Republican health-care bill (22-23 million). Indeed, notes Bivens, the skinny repeal preserves Obamacare’s expansion of Medicaid, the government health program for the poor, and “most of the people who got coverage [under Obamacare did so] through Medicaid expansion,” so those, the most vulnerable, are protected. But, Bivens says, doing away with the mandates would bring the health-care system to “almost complete collapse.” This is because letting people freely opt out of buying insurance creates prohibitive premiums for everyone else. Many healthy people who were uninsured before Obamacare are currently buying insurance because of the mandates. Since they don’t claim many medical expenses they lower the risk pool for insurers, offsetting the overall cost. If they opt out, insurance companies are left covering more people with medical problems and high expenses.
Yes, the “skinny repeal” is just a play to get to conference. But it’s also terrible policy. -- Jared Bernstein --Readers know I’ve been deeply engaged in the healthcare debate, and highly critical of the efforts thus far to repeal and replace, demean and deface, disgust and disgrace, etc. But I haven’t weighed in on up to the minute changes in part because they’re changing fast and because the journalists who follow this are doing a good job of tracking developments in the Senate. In sum, Senate R’s have failed to pass any of the repeal and/or replace bills they’ve come up with so far. At this point, McConnell looks to be counting on getting to 50 votes with “skinny repeal,” which gets rid of the individual and employer mandates, along with a tax on medical devices.At one level, this is high strategery. His play is to get to conference, i.e., once both chambers have passed bills, the R’s convene a committee that tries to agree on a plan that R majorities in both houses will support. There’s no requirement that what comes out of conference looks like what went in, and that means they’re most likely to go right back to the full, draconian repeal-and-replace cuts that would lead to tens of millions losing coverage. Would Senate “moderates” who’ve blocked these bills thus far backtrack and vote for stuff they’ve heretofore opposed, like huge cuts to Medicaid or ending coverage of pre-existing conditions, maternal care, mental health, substance abuse treatment, etc.? They might, and it’s worth remembering that the debate on the conference bill is constrained, no amendments are allowed, and leadership will be in full arm-twisting mode. People are calling the skinny repeal a Trojan Horse. It’s an OK analogy, I guess, but the Trojan Horse was supposed to be something good on the outside with something bad on the inside. But this damn thing is just all bad.
Mitch McConnell is breaking the Senate - Vox. It’s like solving a Rubik’s cube, Mitch McConnell says. Put in some opioid treatment cash here. Take out a big tax cut there. Throw some money at Alaska here. Overhaul regulations there. Turn the bill this way, turn it that way, plead, persuade, threaten, bargain — until 50 out of 52 Republican senators are won over. If he can pull off that fiendishly difficult task, he wins. His prize? The federal government will spend hundreds of billions less on health care. Spending on Medicaid, the main program covering low-income Americans, will fall dramatically. Millions of people — tens of millions, by the latest estimates — will lose their health insurance. Years more instability and bitter political conflict over health care will ensue. And the Senate majority leader would get a historic legislative achievement to his name. “Every Republican senator has been elected or reelected on repealing Obamacare. And he’s a guy who wants to win,” one McConnell insider told me. But the cost will be that the legislative body he leads and has long claimed to deeply value will be changed forever. That’s because the tactics McConnell is using to get his win — which have entailed previously unimaginable amounts of secrecy, speed, and utter disregard for public opinion — are a blueprint that future Senate majorities will surely use for their own purposes. “McConnell has unleashed a whole series of forces that ultimately could really transform the Senate in a bad way,” says Norm Ornstein of the American Enterprise Institute. “And if these tactics succeed, they’re going to be emulated.” This is ironic because McConnell has long claimed to have deeply held beliefs about the unique role the Senate should play in American politics.
The astounding procedural abuses of the Republican Congress - The method by which the Republican Party is attempting to pass their TrumpCare bill is at least as notable as its monstrous contents. Many changes have been made to the bill since its last version went down in flames (due to rulings from the Senate parliamentarian that certain stipulations were out of order), and so Republicans went into a scheduled vote Tuesday without having any idea what was being voted on. There is no final text of a bill, no hearings of any kind, and, of course, no Congressional Budget Office score.And yet on Tuesday, Senate Republicans approved by the narrowest of margins the motion to proceed to a debate on this mystery bill. Tens of millions of Americans' health insurance (and hundreds of thousands of lives) now hang in the balance.But one thing is certain. Someday soon Democrats will get another bite at the health-care apple. Pressure to pass Medicare for all, or something approximating it, will be intense. When that debate happens, Republicans will have forfeited the right to any input, attention, or political respect of any kind.Now, it will not be necessary to replicate the level of duplicity and concealment that Republicans have done with TrumpCare, for the simple reason that Medicare for all (or something similar) would be broadly popular and successful. They are hiding the ball because TrumpCare is about as popular as smallpox, and the Republican leadership knows it. ObamaCare, by contrast, was unpopular for years, but a significant proportion of people who disliked it — including some Trump voters — did so because it didn't go far enough. Everyone who isn't either stinking rich or brain-poisoned by right-wing propaganda wants cheaper, better insurance, not a return to the lousy previous status quo. (In particular, many people just above the income cutoff for the ObamaCare Medicaid expansion were understandably jealous of those poor enough to qualify.) So when the vicious cuts in TrumpCare became widely known, ObamaCare's popularity jumped up by comparison — better that than the alternative.
Senate Releases Full Text Of "Skinny" Obamacare Repeal Bill, Vote Expected After Midnight With the Senate healthcare vote expected sometime between midnight and 2am, moments ago the full text of the Senate "Skinny" bill which may or may not pass, has been released. Here is the summary version of what is hereby known as the "The Health Care Freedom Act":
- REPEAL THE INDIVIDUAL MANDATE — Obamacare's individual mandate forced the American people to purchase insurance they frequently didn't want, couldn't afford or actually use. This plan permanently protects Americans from this onerous mandate.
- REPEAL THE EMPLOYER MANDATE — Obamacare's employer mandate too often forced job creators to forgo hiring new workers or keep an employee's hours low. This anti-jobs mandate is repealed for eight years, which provides employers a greater incentive to hire more employees.
- PROVIDE FLEXIBILITY TO STATES (1332 WAIVERS)— States can access additional flexibility to use waivers that exist in current law to provide more options for consumers to buy the health insurance they want. It also allows the Department of Health and Human Services to approve waivers faster.
- INCREASE HSA CONTRIBUTIONS — Increase contribution limits to tax-free Health Savings Accounts for three years to help pay for out-of-pocket health costs and expensive prescription medications.
- REPEAL THE MEDICAL DEVICE TAX — Both Democrats and Republicans have opposed this tax on medical innovation. The legislation repeals this tax for three years.
- FUND COMMUNITY HEALTH CENTERS — Prioritize health funding for Community Health Centers across the country.
The full bill also includes a provision for defunding Planned Parenthood, which is the reason for the community health center language.
Read the Senate 'skinny' Obamacare repeal bill -- Senate Majority Leader Mitch McConnell released the "Health Care Freedom Act" shortly before 10 p.m. ET Thursday night. Read the bill here: (embedded document)
Senate GOP Is Taking ‘Leap Of Faith’ Skinny Repeal Won’t Slip Into Law – Talking Points Memo - Senate Republicans predict their “skinny repeal” of Obamacare will never become law if they pass it through their chamber. But their colleagues in the House — and their own leaders — aren’t making any promises. Rank-and-file Republican senators are girding themselves to vote for a trimmed-down repeal of Obamacare that pulls out the unpopular individual and employer mandates without touching much of the rest of the program, convinced that the House wouldn’t just take their exact bill and send it along to President Trump to sign. Their argument is the bill buys them time and acts as an empty vessel for congressional leaders to pour the magic potion of a passable replacement into during a conference between House and Senate leaders. They say the worst-case scenario at that point is that no bill materializes and the effort collapses later instead of this week. “The so-called skinny provision is not a resolution to this problem. It only takes us to the next step, where hopefully we can find it,” Sen. Lamar Alexander (R-TN) told reporters Wednesday. “To think it’s a leap of faith, obviously you have to have 51 votes at the end of [a conference committee] as well,” Sen James Lankford (R-OK) told TPM. “The House is not going to pass it.” But that’s not a given. There’s no reason to think a conference committee will have any better luck finding a bill that 50 GOP senators and 218 GOP congressmen can support. At that point, there’s a real possibility that whatever the Senate passes would be passed into law by desperate House Republicans before the Senate ever gets to touch it again. If the Obamacare repeal debate has proven anything, it’s that many GOP lawmakers are a lot more interested in what’s politically possible than what’s good policy. It’s easy to see how passing something, anything, might become the mantra if conference negotiations fall apart, President Trump demands a win while congressional leaders make the “but you promised” argument to reluctant lawmakers. It’s what they’ve been doing from the start.
Republican senators threaten to bolt from Obamacare repeal effort -(Reuters) - As U.S. Senate Republican leaders feverishly tried to pass a slimmed-down Obamacare repeal, some senators threatened to bring the entire effort to a halt unless there were guarantees that the bill would be significantly changed during negotiations with the House of Representatives.With the Senate digging in for what could be a rare all-night session to debate amendments to a Republican healthcare plan that would roll back parts of the seven-year-old Affordable Care Act, Republican senators challenged their leaders and expressed frustration with the entire process.“I’d rather get of out of the way and have it collapse, than have a half-assed approach where it is now our problem,” said Republican Senator Lindsey Graham. Graham was referring to a so-called skinny Republican healthcare bill that would repeal a few portions of the Obamacare healthcare law, formally known as the Affordable Care Act. “The skinny bill as policy is a disaster,” Graham said at a news conference, adding, "The skinny bill as a replacement for Obamacare is a fraud."Senate Majority Leader Mitch McConnell is trying to get the bill passed so that the Senate and House could then engage in a "conference" to come up with a compromise bill.Senator Lindsey Graham (R-SC) and Senator Ron Johnson (R-WI) talk prior to a press conference about their resistance to the so-called "Skinny Repeal" of the Affordable Care Act on Capitol Hill in Washington, U.S., July 27, 2017.Aaron P. BernsteinGraham and other senators have proposals that they think would strengthen the healthcare bill, including by transferring some powers to the states. They were withholding their support for the slimmed-down bill unless there are assurances from Republican House Speaker Paul Ryan that his chamber will not simply pass the Senate bill and send it to Republican President Donald Trump for enactment into law.
US healthcare: Senate 'skinny repeal' bill fails - BBC News: The latest attempt to repeal the Obama-era healthcare act has failed after a dramatic night in the US Senate. At least three Republicans - John McCain, Susan Collins and Lisa Murkowski - voted against the bill, which needed a simple majority to pass. President Donald Trump said the three had "let the American people down". The so-called "skinny" repeal, which would have scaled back some of the more controversial provisions, is the third failed attempt to repeal Obamacare. It would have resulted in 16 million people losing their health insurance by 2026, with insurance premiums increasing by 20%, according to the Congressional Budget Office (CBO). The vote was delayed after Senate Republicans kept a procedural vote open before the actual Obamacare vote while they attempted to persuade their members to vote for the repeal. Vice President Mike Pence was seen talking to Mr McCain for more than 20 minutes. But Mr McCain then approached a group of Democrats, who appeared happy to see him. The bill was eventually voted down by 51 votes to 49 in the Republican-dominated Senate.
Senate ObamaCare repeal bill falls in shocking vote | TheHill: The Senate rejected a scaled-back ObamaCare repeal bill in the early hours of Friday in a shocking vote that marks a major defeat for GOP leaders and the seven-year effort to repeal the healthcare law. The Senate voted 49-51 against the "skinny" bill, which would have repealed ObamaCare's individual and employer mandates and defunded Planned Parenthood. Sen. John McCain (R-Ariz.) provided the crucial vote against the bill, alongside GOP Sens. Susan Collins (Maine) and Lisa Murkowski (Alaska). A succession of Republicans attempted to appeal to McCain, as well as Murkowski, on the Senate floor while the preceding vote was held open long after it usually would have closed. McCain, who returned to the Senate this week after learning he had brain cancer last week, said in a statement after the vote that he wanted to go back and use the committee process, while working with Democrats on healthcare. “We must now return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of the aisle, heed the recommendations of nation’s governors, and produce a bill that finally delivers affordable health care for the American people,” McCain said in the statement. Republicans cast the so-called skinny bill as a way to keep their repeal hopes alive and get to negotiations with the House. Now, it appears that Republican hopes of repealing ObamaCare have been quashed. In a speech from the Senate floor early Friday morning after the surprise failed vote, Majority Leader Mitch McConnell (R-Ky.) said "it is time to move on." "What we tried to accomplish for the American people was the right thing for the country," McConnell said. "I think the American people are going to regret that we couldn't find another way forward."
Why John McCain killed 'skinny repeal' health care - Sen. John McCain was one of three Republicans to vote against the GOP healthcare plan early Friday morning, and he is being credited with the decisive vote that killed the so-called Obamacare "skinny repeal." "We should not make the mistakes of the past that has led to Obamacare's collapse, including in my home state of Arizona where premiums are skyrocketing and healthcare providers are fleeing the marketplace," McCain said in a statement. All 48 Democrats voted no. In joining fellow Republicans Lisa Murkowski of Alaska and Susan Collins of Maine, who had previously expressed concern with the GOP's repeal strategy, McCain was seen as casting the deciding vote. McCain had returned to Washington for the healthcare vote on Tuesday, nearly a week after his office announced he had brain cancer. The Arizona senator delivered a powerful speech from the Senate floor Tuesday, focusing on a need to return to a more bipartisan approach. Shortly before the vote, it appeared that Senate Majority Leader Mitch McConnell and Vice President Mike Pence were attempting to persuade McCain to change his mind; the three were seen talking before the vote, but the senator stuck with his "no," effectively ending the bill. McCain released the following statement early Friday morning: "From the beginning, I have believed that Obamacare should be repealed and replaced with a solution that increases competition, lowers costs, and improves care for the American people. The so-called "skinny repeal" amendment the Senate voted on today would not accomplish those goals. While the amendment would have repealed some of Obamacare's most burdensome regulations, it offered no replacement to actually reform our health care system and deliver affordable, quality health care to our citizens. The Speaker's statement that the House would be "willing" to go to conference does not ease my concern that this shell of a bill could be taken up and passed at any time. "I've stated time and time again that one of the major failures of Obamacare was that it was rammed through Congress by Democrats on a strict-party line basis without a single Republican vote. We should not make the mistakes of the past that has led to Obamacare's collapse, including in my home state of Arizona where premiums are skyrocketing and health care providers are fleeing the marketplace. We must now return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of aisle, heed the recommendations of nation's governors, and produce a bill that finally delivers affordable health care for the American people. We must do the hard work our citizens expect of us and deserve."
With or Without Obamacare, Health-Care Costs Are Battering the Middle Class --Whatever happens to Obamacare in Washington, the rest of America will be left with a problem it’s had for decades: Health-care spending is growing at an unsustainable rate. Insurance and medical costs are draining the incomes of the middle class—tens of millions of people who earn too much to qualify for government-subsidized coverage, but not so much that they don’t feel the bite of medical bills—and nothing on Congress’s agenda is likely to fix that. So far, rather than tackle the health-care delivery system directly, Republican policymakers have focused on slashing insurance subsidies and Medicaid, the state and federal program for the poor. The Obamacare replacement proposed by Senate Majority Leader Mitch McConnell would leave 15 million more uninsured next year and 22 million by 2026, according to the nonpartisan Congressional Budget Office, and allow insurers to sell policies that cover fewer benefits and pay for less medical care. Although the chamber narrowly voted to open debate on health legislation on July 25, almost all the proposals making their way to the floor focus squarely on mandates and spending rather than delivery of care. By refusing to address the fundamental problems with the health-care system, Congress is ignoring the tough question of how to fix it. That has implications for the economy beyond health care. Most Americans under 65 get their health insurance from employers— 177 million in 2015, or 56 percent of the total population. Average premiums for a family plan have increased 31 percent in inflation-adjusted terms since 2006, to $18,000 a year in 2016, according to the Kaiser Family Foundation. Workers typically pay about 30 percent of that premium, with employers picking up the rest. Out-of-whack spending on health care squeezes public budgets and employers’ payroll costs: Health premiums and out-of-pocket costs wiped out most of the real income gains for a median family from 1999 to 2011, according to an analysis published on the blog of the journal Health Affairs in 2013. “We don’t think of it as compensation,” says Darrell Gaskin, a health economist at the Johns Hopkins Bloomberg School of Public Health, but many American workers have been getting their raises in the form of more expensive health insurance, he says.
Top Interior Dem calls for investigation into Zinke's call to Murkowski | TheHill: The top Democrat on the House Natural Resources Committee is calling for a probe into whether President Trump’s Interior secretary threatened to retaliate against an Alaska senator for opposing the GOP healthcare measure this week. Both Alaska Sens. Lisa Murkowski (R) and Dan Sullivan (R) said they received a call from Interior Secretary Ryan Zinke on Wednesday, informing them that the Trump administration will not support key projects in Alaska after Murkowksi voted against the GOP healthcare bill in the Senate a day before. Rep. Raúl Grijalva (D-Ariz.) said in a statement Thursday that he plans to request a formal investigation into whether the Trump administration threatened the Alaska lawmakers, pointing out that he believes Zinke is serving Trump's "political vendetta" over the public interest.“Running a department of the federal government means you serve the American people as a protector of their rights and freedoms,” Grijalva said. “It doesn’t mean you serve the president as a bag man for his political vendettas." He went on to say that using “political blackmail” is an action that one could expect from the Kremlin, not a government agency. “Secretary Zinke’s willingness to deliver these threats speaks volumes about his ethical standards and demonstrates that Interior’s policy positions are up for political grabs, rather than based on science or the public interest.”
Fallout spreads from Zinke's Alaska arm-twist - Swift pushback continues after Interior Secretary Ryan Zinke threatened repercussions for Alaska’s energy priorities in light of Sen. Lisa Murkowski's vote against taking up Obamacare earlier this week. Two House Democratic ranking members — Energy and Commerce’s Frank Pallone and Natural Resources’ Raul Grijalva — sent requests for investigations into Zinke’s actions to GAO and Interior’s inspector general. In addition, the Western Values Project filed a FOIA request for all records related to Zinke’s calls with Murkowski and Alaska Sen. Dan Sullivan, promising to sue for them if they don’t get the response within statutory limits. The White House didn’t deny the phone calls occurred with Press Secretary Sarah Huckabee Sanders instead declining to “speak about conversations between Cabinet members and other individuals.” But as POLITICO’s Elana Schor and Ben Lefebvre report, Sullivan urged his senior senator and the Trump administration return to harmony. “From my perspective, the sooner we can get back to that kind of cooperation between the administration and the chairman of the [energy] committee, the better for Alaska and the better for the country,” he told reporters. “I’m not telling Sen. Murkowski anything. I work super closely with Sen. Murkowski, but that’s my statement.” In an interview with the Alaska Dispatch News’ Erica Martinson (who broke the story), Murkowski confirmed she had a “difficult conversation” with President Donald Trump before the vote and spoke with Zinke, who "shared with me that the president was not pleased” afterwards. But she said she didn’t feel pressured at all and didn’t feel like her Interior priorities were at risk. Sen. Lindsey Graham said lawmakers feel pressure from the administration all the time. “It won’t matter one bit,” he told reporters. “I think she’s going to do what she likes. If you’re in the Senate you get threatened all the time by everybody.” And House Natural Resources Chairman Rob Bishop agreed: “That is not unprecedented, [he] has a right to do that," he told reporters in the Capitol. As Pro’s Esther Whieldon reports, Bishop said former Interior Secretary Sally Jewell would call him "complaining about some things that we were doing."
American nightmare: Nine immigrants suffocate to death in trailer left in Texas parking lot -- As President Donald Trump boasted of “American pride and prestige” in a speech to sailors in Virginia on Saturday, an American nightmare was playing out in San Antonio, Texas.Nine immigrants are dead and 19 are in critical condition after being locked in a sealed semitruck trailer for 24 hours. The trailer was parked in the sun in a Wal-Mart parking lot in 100-degree weather.Shortly before 12:30 am Sunday morning, one of the trapped immigrants managed to break out of the trailer to ask a Wal-Mart worker for water. The worker brought water and called 911 for help.Police and immigration officials arrived at the scene and detained the immigrants as they stumbled out of the trailer and into the parking lot. Once those still alive had been captured, police dragged out the bodies of the eight who died of heat stroke or dehydration, including two children. Another individual died at the hospital on Sunday. The Wal-Mart store remained open on Sunday.It is difficult to imagine the hell the migrants experienced, gasping for air in the stifling heat as death encircled them. San Antonio Fire Chief Charles Hood told the press that the survivors “were very hot to the touch.” Their heart rates were all above 130 beats per minute. Only the bodies of the dead will be allowed to stay in the United States, for burial. The survivors will be thrown into detention centers and promptly deported, most likely without the right to appear before a judge to plead their case.
Trump’s immigration crackdown is stressing out deployed US troops - President Donald Trump’s crackdown on illegal immigrants is having the dangerous, unanticipated effect of putting additional stress on U.S. troops who have relied on a little-known program to protect their undocumented family members from deportation while the military personnel are deployed to warzones.“Parole in place” reprieves, known inside the military as PIP, are meant to keep deployed service members focused by easing any worry about the safety of undocumented spouses and immediate family back home. Defense officials say the program is crucial to alleviating unrelated stress on the battlefield by allowing troops’ family members to live in the U.S. without fear of being deported and to apply for a green card without having to leave the country.But as immigration arrests spike under the Trump administration’s promised crackdown on people in the country illegally, immigration lawyers have begun warning their military clients that they can no longer rely on the PIP program.“The concern is that it hasn’t been endorsed by the administration, and there are several initiatives that might sweep this into the broader reworking of the immigration system,” said David Kubat, an immigration lawyer and military veteran who serves in the National Guard in St. Paul, Minn.. Kubat said the program affects thousands of military families but doesn’t get the same attention as other special status programs, such as the DACA program that protects people brought to America illegally as children.
The voter-fraud commission relies on some really dodgy studies – Economist - Mr Kobach’s other favourite topic is illegal immigration, which he became interested in at Yale Law School. An avid debater, he joined a panel on California’s Proposition 187, a ballot initiative passed in 1994 denying government services to illegal immigrants. Mr Kobach fervently defended Prop 187, caring little that it was an unpopular stance at the elite Ivy League school. “He came across as a cultural warrior,” says Jed Shugerman at Fordham Law School, who was among the standing-room only audience of around 300. Mr Kobach’s rhetoric, says Mr Shugerman, was much more nativist and anti-immigrant than was the norm among most conservatives at the time. Today Mr Kobach has a national platform for his two fixations, which come together in an effort to detect voter fraud by non-citizens (or aliens, as he refers to them). He is vice-chair of the advisory commission on election integrity, chaired by Mike Pence, the vice-president, and established by President Donald Trump through an executive order in May. It met officially for the first time on July 19th. During the election campaign, Mr Trump became a fervent proponent of the idea that America suffers from widespread voter fraud. He claimed that if he lost it would be because the election was tainted by millions of fraudulent votes, many of them cast by illegal immigrants (Mr Kobach advises the president on immigration policy too). After he won, Mr Trump did not let the idea go, declaring that he would have won the popular vote had 3m-5m votes not been cast illegally. The commission, set up to investigate what seems to be a non-problem, has a budget of $500,000. Research reports collected for years by the Brennan Centre for Justice at the New York University School of Law show that voter fraud in general and by non-citizens in particular is extraordinarily rare. To counter the consensus among political scientists that voter fraud is very rare, Mr Kobach and other believers in widespread fraud cite a paper by Jesse Richman and others at Virginia’s Old Dominion University, which shows up to 15% of non-citizens surveyed voted at the presidential election in 2008. The controversial study, published in 2014, relied on just 339 respondents. The authors of that report warned that, “it is impossible to tell for certain whether the non-citizens who responded to the survey were representative of the broader population of non-citizens.” Mr Kobach hired Mr Richman to look at Kansas, where he used a grand total of 37 respondents to come up with the figure of more than 18,000 non-citizen voters.
Donald Trump will ‘dial back’ his Twitter use, says Anthony Scaramucci -- Donald Trump will "dial back" on posting provocative tweets, his new director of communications has suggested. Anthony Scaramucci, who joined the US President's team last week, wants a "reset" in relations between the White House and the media.He defended the President's "crystal essence" of colourful tweets, saying: "If he thinks it's helpful to him, let him do it. "We're going to defend him very, very aggressively when there's nonsensical stuff being said about him." But Mr Scaramucci added later on CNN: "He will probably dial back some of those tweets."The latest addition to the White House team has admitted deleting tweets from before his appointment - some of which were at odds with Mr Trump's positions. One tweet praised the woman Mr Trump beat to the White House, Hillary Clinton - but Mr Scaramucci said it was "a total distraction" to focus on views he had previously expressed."When I made the decision to take this job, my politics and my political ideas do not matter at all," he said."What matters is that I am supporting, subordinating all of that to the President's agenda."Mr Scaramucci's appointment was announced on Friday, prompting White House press secretary Sean Spicer to resign. The polished television commentator and Harvard graduate said he would spearhead a "rethink" of communication from the Trump administration.
Man Behind Trump "Dossier" Refuses To Testify, Will Plead The Fifth, Fight Subpoena -- For all the talk of obstruction and interference by the Trump camp, it's neither Donald Trump Jr. nor Paul Manafort who are challenging their scheduled testimony in the Senate next Wednesday, but rather the man who according to many started the whole "Trump Russia collusion" narrative, who is doing everything in his power to avoid testifying next week. On Friday, attorneys for Glenn Simpson, a former WSJ reporter who now runs the infamous Washington political intelligence firm Fusion GPS - best known for compiling the salacious "dossier" of unverified research about President Trump - told the Senate Judiciary Committee in a letter that their client was on vacation through July 31 and traveling abroad through August 3, and would be unavailable for next week’s hearing. Perhaps for writers of opposition research fiction, vacations take precedence over being summoned to Congress. As a reminder, Simpson’s Fusion GPS is the firm which hired former British intelligence officer Christopher Steele, and his London-based Orbis Business Intelligence, to conduct opposition research on then presidential candidate Donald Trump, resulting in a 35-page dossier that was widely shared in political and media circles during and after the 2016 election. Steele and Orbis are currently being sued in the U.S. and U.K. by Aleksej Gubarev, a Russian tech executive who says he was falsely accused in the dossier of hacking the Democratic National Committee’s email systems.
Jill Stein looped into widening investigation of Russia and Trump Jr. connections | TheHill: Third party candidate Jill Stein was a surprising addition this week to investigators casting an increasingly wide net in the congressional probe into Russian interference in the presidential campaign. Stein’s name was included in a Senate Judiciary Committee letter requesting all communication between President Trump’s son Donald Trump Jr. and a number of others, including Russian officials and other members of Trump’s presidential campaign. Stein ran for president as the Green Party candidate in 2016. A Green Party spokesman called the inclusion of her name “vengeance against Dr. Stein for running as a third-party candidate for the White House.” The Senate panel wants documents relating to a recently revealed meeting between Trump Jr. and a Russian attorney, among others. Former campaign chairman Paul Manafort and Trump's son-in-law and adviser Jared Kushner were also at the meeting.But investigators seem to be casting a wider net by asking Trump Jr. for “all communication to, from or copied to you relating to” a long list of individuals that include Stein.Stein called the request “laughable” in a tweet this week.“The whole thing is an obvious smear,” she wrote. The notion I communicated with Trump Jr is laughable. This whole thing is an obvious smear designed to generate a fake news feeding frenzy.— Dr. Jill Stein (@DrJillStein) July 21, 2017
Democrats Smear Jill Stein -- Black Agenda Report --Democrats hate the left more than they hate the right. Democrats are allegedly the counter weight to the right wing in America when in reality their goal is to replicate the same policies. The subterfuge inherent in the political duopoly allows them to live off the pretense of defending the people from the neo-liberal forces they in fact support.Their hatred is most evident when people who are truly on the left dare to make the case for political change. When Al Gore and Hillary Clinton won the popular vote but lost presidential races in the Electoral College, Democratic Party scorn was directed solely at the Green Party and their voters.In both elections there were far more instances of registered Democrats voting for George W. Bush and Donald Trump respectively. One would think that they would be marked for condemnation. Instead the Democrats show their true colors, excusing and placating the turncoats in order to make the case for “lesser evil” neo-liberalism and imperialism. The Russiagate phenomenon makes Green Party presidential candidate Jill Stein an even bigger target. Stein visited Russia in 2015 and attended the RT network’s anniversary dinner. She was seated at the same table with Vladimir Putin, although the two never spoke. This simple act is now being included among the flimsy so-called evidence that the Russian government interfered in the election. The war party is an important part of the duopoly and leading Democrats are reveling in their opportunity to make political hay.
Trump’s Businesses Have A History Of Money Laundering Charges -- In 1993, the Associated Press reported that two of Trump’s Atlantic City casinos were fined by Treasury Department regulators for “willfully failing to report” transactions involving more than $10,000 — a violation of the Bank Secrecy Act (BSA). Five years later, the department fined Trump Taj Mahal Associates, the company managing the eponymous Atlantic City casino, for violating the same law, which was created in 1970 to help combat money laundering. More recently, in March 2015, three months before Trump announced his bid for the presidency, regulators fined the same casino $10 million. Trump had severed his relationship with the now-defunct Taj Mahal when he sold it to billionaire investor Carl Icahn in 2016, a move to try and save the casino following a series of bankruptcies. According to a Treasury Department press release announcing the March 2015 charges, the regulator had imposed the penalty “for willful and repeated violations of the Bank Secrecy Act… dating back to 2003” — during the time Trump was running the company. In a Treasury Department document enumerating the 2015 charges, regulators said Trump Taj Mahal Associates and the Taj Mahal Casino “failed to implement and maintain an effective anti-money laundering program; (b) failed to report suspicious activity related to several financial transactions at the casino; (c) failed to properly file Currency Transaction Reports; and (d) failed to keep appropriate records as required by the BSA and its implementing regulations.” Congressional Republicans are currently pushing a bill that critics say would complicate federal regulators’ efforts to combat money laundering. While some experts believe the Trump administration will not move to weaken anti-money-laundering regulations, the Trump Organization fought some of those regulations a little more than a decade ago.
Kushner Releases 11-Page Statement: Denies Collusion, Confirms Four Meetings With Russians -- Ahead of his closed-door meeting with the Senate Intelligence Committee at 10am, Jared Kushner released an 11-page statement which confirmed four contacts with Russians during his father-in-law’s presidential campaign or after the election, but described the encounters as unmemorable and denied colluding with the Russian government to help Donald Trump win the election. The Senate Intelligence Committee is investigating Russian meddling in the 2016 campaign, including whether Trump’s campaign colluded with a Russian government effort to tip the election toward Trump.The key statement: "I did not collude, nor know of anyone else in the campaign who colluded, with any foreign government. I had no improper contacts. I have not relied on Russian funds to finance my business activities in the private sector. I have tried to be fully transparent with regard to the filing of my SF-86 [security clearance] form, above and beyond what is required." In the most consequential meeting, Kushner said he agreed to meet with a Russian banker, Sergey Gorkov, on Dec. 13 at the request of the Russian ambassador to the U.S., Sergey KislyakKushner’s interview with committee staff is voluntary, will take place out of the public eye and will not be under oath. It nevertheless may serve as a building block for the ongoing Russia investigations by Special Counsel Bob Mueller as well as House and Senate committees. The stakes for the congressional interviews are high for Kushner because Kushner is of acute interest to special counsel Bob Mueller, and prosecutors can be expected to pick apart today's statement. Suspicions about Kushner’s contacts with Russians have been intensifying since late May, when the Washington Post first reported that Kushner was a “person of interest” in the multiple investigations into whether the Trump campaign colluded with Russia to sway the election in its favor. Among other misdeeds, Kushner has been accused in the media of trying to set up a backchannel to Moscow during the campaign. However, he denies this allegation, saying that he merely asked Kislyak if lines of communication existed for Moscow's generals to brief former National Security Adviser Mike Flynn on events in Syria. He was told there were none.
STATEMENT OF JARED C. KUSHNER TO CONGRESSIONAL COMMITTEES (PDF)
‘I did not collude with Russia’ Kushner insists in statement for Senate panel | McClatchy - White House senior advisor Jared Kushner Monday said he did not collude with Russia or any foreign government during the 2016 presidential election, in a statement prepared to be given to the Senate Intelligence Committee investigating collusion. The 11 page statement released Monday morning came just hours before Kushner, also President Donald Trump’s son-in-law, was to talk to a Senate panel investigating possible collusion between the campaign and Russian government in the 2016 presidential campaign. The statement addresses a broad range of reported allegations regarding Kushner that have surfaced in the last months. "I did not collude, nor know of anyone else in the campaign who colluded, with any foreign government. I had no improper contacts," he said in the statement. "I have not relied on Russian funds to finance my business activities in the private sector. I have tried to be fully transparent with regard to the filing of my SF-86 form, above and beyond what is required. Hopefully, this puts these matters to rest." Reviewing emails recently confirmed my memory that the meeting was a waste of our time and that, in looking for a polite way to leave and get back to my work, I actually emailed an assistant from the meeting after I had been there for ten or so minutes and wrote ‘Can u pls call me on my cell? Need excuse to get out of meeting
Jared Kushner’s Testimonial to Stupidity and Unfitness – American and Russian -- John Helmer - Jared Kushner’s title is Director of the Office of American Innovation at the White House, a new function for the old one of overseeing everything in the US Government for the benefit of the incumbent president. He’s also ranked Senior Advisor to the President, and by marriage he is son-in-law to President Donald Trump. Stupidity isn’t a crime; it’s a life sentence. Not so for power. Supposing everything Kushner has written in his presentation to the US Senate Intelligence Committee on Monday is true, then one conclusion from a half-dozen bits of evidence he testifies to is obvious – Kushner is unfit to rule, and so are the Russians whom he mentions. Here are the eleven pages of Kushner’s public statement to the Senate Select Committee on Intelligence. His committee appearance and additional testimony were behind closed doors, lasting about two hours. Kushner gave his testimony on Monday (July 24). Reading the statement isn’t difficult because the vocabulary is simple, the logic of presentation rudimentary, the style impersonal. Two slips are revealing, but they have so far gone undetected in the voluminous US media coverage. The first reveals just how ignorant Kushner, his legal and other advisors are of Russia, although it is the target of the proceeding. At page 8, he claims “Nvgorod [is] the village where my grandparents were from in Belarus.” This looks like a typo for Novgorod (literally, “new town”), the ancient Russian city west of Moscow. Kushner’s grandparents actually came from Navahrudak (Навагрудак), spelled in Russian as Новогрудок (Novogrudok). His, and everyone else’s mistake, is 834 kilometres off the mark. Kushner’s second slip is evidence on the issue, as he states it, of collusion with Russia during the election campaign and during the presidential transition, before Trump was inaugurated on January 20. Kushner claims at the end of his testimony: “I did not collude, nor know of anyone else in the campaign who colluded, with any foreign government. I had no improper contacts.”
Kushner Described as Forthcoming in Closed-Door House Meeting (Reuters) - President Donald Trump’s son-in-law, Jared Kushner, was cooperative and forthcoming Tuesday during a closed-door interview with the House Intelligence Committee examining potential connections between Russia and the Trump campaign, lawmakers said. Kushner entered the meeting with Democrats poised to level tough questions, including about his meeting with a Russian banker and his attempt to establish a back-channel with the Russian government. The top Democrat on the panel, Adam Schiff of California, described the more than three-hour meeting as "a very productive session -- an opportunity to ask about a range of issues the committee was concerned about." Kushner was receptive to returning to the committee for more questioning, he said. Mike Conaway of Texas, the Republican leading the panel’s investigation into Russian meddling in last year’s election, said Kushner "wanted to answer every question we had.” Kushner, 36, has emerged as a central figure in the Russia investigations, which seek to determine whether Trump or anyone in his campaign colluded with the Kremlin to tip the election his way. Now perhaps the president’s closest adviser, Kushner contended in verbal and written statements on Monday that he had just four contacts with Russian government officials during the 2016 campaign and transition, and described them all as unremarkable.
How Jared Kushner Helped the Russians Get Inside Access to the Trump Campaign -- If you read Jared Kushner’s statement to congressional committees looking for evidence of a crime, there isn’t much there. But if you read it from the perspective of the Russians trying to gain a toehold—or more—inside the Trump campaign, you realize how easy he made it for them. As the evidence mounted last year that the Russian government launched an unprecedented hacking and influence campaign to affect the 2016 election in Donald Trump’s favor, the Trump team, including Kushner, became increasingly more solicitous to high-level Russians offering information and requesting meetings. Kushner’s first meeting with Sergey Kislyak, the Russian Ambassador to the United States, seems relatively innocuous. According to Kushner’s account, they met in April, 2016, at the Mayflower Hotel, in Washington, D.C., during a reception before a speech that Trump delivered on foreign policy. Dimitri Simes, the publisher of The National Interest and the organizer of the event, introduced Kushner to Kislyak and three other ambassadors. To Kushner, the introduction was forgettable. Without specifying which ones, he noted that some of the ambassadors invited him to lunch but that he “never took them up on any of these invitations.” For Kislyak, it was clearly an important moment. The Russian Ambassador represents a country whose intelligence services had hacked their way into the Democratic National Committee’s networks ten months earlier and hacked the e-mail account of John Podesta, Hillary Clinton’s campaign chairman, the previous month. At Trump’s speech, Kislyak was honored with an invitation to the reception and a front-row seat. Trump’s speech itself extended an olive branch to Vladimir Putin, calling for “improved relations with Russia” and an effort to “make a deal that’s great” for “America, but also good for Russia.”
Good News! YOU are Wealthier than Jared Kushner! -- Feeling poor? Cash-strapped? Can’t make payments on that Crackered-up pick-up truck? Jealous because you can’t make ‘funny money’ work for you! Don’t despair. You---yes, YOU---are wealthier than Jared the Eunuch. I know it’s tough for you. I know a good night’s sleep in as rare as a sane Trump Tweet. You fret because you just cannot make ends meet. You try so hard to be a ‘playa’, but always come up short. You see soprano-voiced wimps like Jared the Eunuch living the high life, possibly sharing the carnal favors of a tall blonde strumpet with the POTUS himself, and all you’ve got is another 118 months of $369.72 per on that new F-150, and a 300 pound spouse with a cellulite-filled Cinnabun Butt. Sucks to be you. Don’t despair! All might be lost for you, but believe it or not it could be worse. As miserable and hopeless as things are for you---and don’t fool yourself into thinking they are not, because they are---it’s worse for Jared the Eunuch. He’s not only broke, he has a bigly negative net worth. For his flagship property (whose flag would be a desecration on the Titanic or Andrea Doria), he played and paid for NYC real estate like he was a New Jersey dentist lining up to get in on Pets.com. He top ticked the market in 2007, paying $1.8 billion for 666 Fifth Ave. He put down $500 million of his father’s ill-gotten gains, and financed the other $1.3 billion, on which he has been paying interest only. The building has a current estimated market value of $700-750 million. That means that not only was his entire equity wiped out, but he still owes almost twice what the place is worth. That sort of kick in the gonads could explain the octave of his voice. Now I know the chant around here---at least with precious metals---is that “You haven’t lost if you haven’t sold”. While that is arguably just a feel-good delusion (Old Wall Street adage: A paper gain is a paper gain, but a paper loss is real money), it would not even satisfy in Jared’s case. It wouldn’t satisfy because cash flow will not allow him to service the existing debt.
Former CIA Director Calls For A Coup If Trump Fires Mueller - In the most vocal opposition to president Donald Trump yet, former CIA Director John Brennan said that if the White House tries to fire special counsel Robert Mueller, government officials should refuse to follow the president orders, as they would be - in his view - “inconsistent” with the duties of the executive branch."I think it's the obligation of some executive branch officials to refuse to carry that out. I would just hope that this is not going to be a partisan issue. That Republicans, Democrats are going to see that the future of this government is at stake and something needs to be done for the good of the future," Brennan told CNN's Wolf Blitzer at the Aspen Security Forum, effectively calling for a coup against the president should Trump give the order to fire Mueller. The exchange is 43 minutes into the clip below: (Full transcript here)Brennan appeared alongside his former colleague, Director of National Intelligence James Clapper, and both men who served in the Obama administration, told Blitzer they have total confidence in Mueller. "Absolutely. It was an inspired choice- they don't come any better, " Brennan said adding that "If Mueller is fired, I hope our elected reps will stand up and say enough is enough." Some have responded with questions where Brennan's devotion to the constitution was in the aftermath of the events in Benghazi. Falling back on his neocon roots, James Clapper, who has waged a long-running vendetta with Trump, once again warned about Russian interference in US affairs. When asked about the June 2016 meeting between Donald Trump Jr., Jared Kushner and Paul Manafort with a Russian lawyer and others, he responded: "I'm an old school, Cold War warrior and all that - so I have, there's truth in advertising, great suspicions about the Russians and what they do. A lot of this to me had kind of the standard textbook tradecraft long deployed by Russians. It would have been a really good idea maybe to have vetted whoever they were meeting with."
Senators Prepare Bill to Block Mueller Firing -- Sen. Lindsey Graham (R-SC) is working on legislation that would prevent President Trump from firing special counsels without judicial review, the AP reported Thursday. Trump has recently expressed dissatisfaction with Attorney General Jeff Sessions and several congressmen are worried that if Sessions is fired, the president might then dismiss special counsel Robert Mueller, who is investigating Russia's involvement in the 2016 election. Democrats on the Senate Judiciary Committee said they are working with Graham on the legislation. Graham told reporters Thursday that the president’s treatment of Sessions isn’t “going over well in the Senate” and that “there will be holy hell to pay” if the attorney general is fired. Last week, senators told The Daily Beast that it would not be appropriate for Congress to step in and shield Mueller from possible political interference, with Sen. Martin Heinrich (D-NM) suggesting Congress should stay in its “lane.”
America's top lawman lied under oath. Can we seize his stuff? - Rooted in the so-called “war on drugs” launched in the 1970s and ’80s, civil asset forfeiture — seizing homes, cars, cash or other possessions that allegedly may have been used in the commission of a crime — has been broadly interpreted to allow law enforcement agencies to seize millions of dollars of people’s stuff, even in cases where no one has yet (or ever) been convicted of a crime. In some instances, law officers seize the home of a law-abiding citizen merely because they believed someone temporarily staying there — a grandson or a nephew, say — was up to no good. . Last week, DOJ announced it was moving to make it easier to seize cash and property from criminal suspects — even in the 24 states, many with Republican governors, that had placed restrictions on the controversial practice. Sessions seemed totally oblivious to the massive abuses in the program… …as he called it “a key tool” in the fight against crime. But here’s the incredible irony. Jeff Sessions isn’t just the nation’s highest ranking law-enforcement officer. He is also — according to evidence that is mounting daily — a prime candidate for criminal prosecution. It’s an incredible story. As attorney general, Sessions oversees a criminal-justice network, including the FBI, that has made it its business to charge people with lying — in sworn testimony, in written documents, even in interviews with federal agents. Yet back in January, as a U.S. senator seeking confirmation in his high-ranking Trump administration post, Jefferson Beauregard Sessions raised his right hand and swore to tell the whole truth, before telling what seem to be epic lies about his contacts with Russian officials during the 2016 presidential campaign. When Democratic Sen. Al Franken of Minnesota asked Sessions a fairly straight-forward question about reports of links between the Trump campaign and Moscow, the future AG volunteered: “I have been called a surrogate at a time or two in that campaign and I did not have communications with the Russians.” It turns out, as Sessions later conceded in a follow-up written statement, he’d met with the Russian ambassador, Sergei Kislyak. Twice, he insisted — and he doesn’t remember much what they talked about but it wasn’t really the Trump campaign. Honest. Now investigators are probing whether there was at least a third meeting that Sessions didn’t report even when he tried to clear up that first false statement.
Republicans circle wagons to protect Sessions from Trump - Senate Republicans and conservative activists quickly and loudly came to the defense of Jeff Sessions on Tuesday, even as President Donald Trump continued to flirt with the idea of firing – or pushing out – the attorney general. ”He’s a man of purpose and integrity,” said Sen. Richard Shelby, R-Ala., who said he spoke Tuesday morning with Sessions, who for 20 years was Shelby’s Senate colleague from Alabama. “I tell you what, he’d be hard to replace, he’s got a lot of goodwill on Capitol Hill,” Shelby said. Trump has gone after Sessions on Twitter since Saturday, calling him “beleaguered” and “weak.” Tuesday, he bashed his attorney general at an afternoon press conference, saying he was “very disappointed” with him for recusing himself from the Russia investigation that is bedeviling Trump’s young administration. “And if he was going to recuse himself, he should've told me prior to taking office and I would've, quite simply, picked somebody else,” Trump said. “I think that's a bad thing not for the president, but for the presidency,” the president added. He said he also wanted Sessions “to be much tougher on the leaks from intelligence agencies.” Asked whether Sessions will last in office, Trump said, “We will see what happens. Time will tell. Time will tell.”
Graham Dares Trump: "Holy Hell To Pay if You Fire Sessions" -- After a few days of non-stop tirades against current Attorney-General Jeff Sessions by President Trump, increasing numbers of Republicans are coming out in support of the "beleaguered" AG urging Trump to stop.As Bloomberg reports, a number of Republicans have called White House officials - and even Trump personally - to warn against removing Sessions, according to a Senate GOP aide who asked not to be identified discussing the private conversations. Their message has been that Sessions is universally liked on Capitol Hill and that removing him would be one of Trump’s biggest mistakes as president. But, just in case the message from senior Republicans was not getting to the President, Republican Senator Lindsey Graham of South Carolina told CNN on Thursday morning...WATCH: "Any effort to go after Mueller could be the beginning of the end of the Trump presidency," says Sen. Lindsey Graham. pic.twitter.com/x2scZCKUIo— NBC News (@NBCNews) July 27, 2017“If Jeff Sessions is fired, there will be holy hell to pay.” Graham described as “chilling” a tweet posted by Senate Judiciary Chairman Chuck Grassley late Wednesday in which the Iowa Republican said there was “no way” his panel would consider the nomination of a replacement for Sessions.“There will be no confirmation hearing for a new attorney general in 2017,” Graham said.Graham also warned Trump against any efforts to remove the special prosecutor appointed in the Russia probe, former FBI Director Robert Mueller. “Any effort to go after Mueller could be the beginning of the end of the Trump presidency,” Graham said on CNN.
Senate won’t let Trump make recess appointments - Senators are planning to continue procedural moves to prevent the Senate from formally adjourning for recess next month in order to prevent President Donald Trump from making recess appointments, when the chamber eventually adjourns through the Labor Day weekend. Using the threat of a filibuster, Democrats plan to force the Senate to hold pro forma sessions — a practice both parties have carried out to block recess appointments from presidents of opposite party, Democratic and Republican aides say. Recess appointments let a president install nominees who normally must be confirmed by the Senate; their terms would run through the end of the "next session" of the Senate, but the "pro forma" sessions essentially means the Senate is never in recess. While Republicans control the Senate now, the only way they can formally adjourn -- which would set up a period when recess appointments are allowable -- is to pass an adjournment resolution. The problem is that Democrats can filibuster that resolution, which they would do to prevent Trump from making recess appointments. The maneuver started when George W. Bush was President and Democrat Harry Reid was the Senate majority leader, then continued under Barack Obama. Obama tried to challenge the practice when he made a series of recess appointments despite the Senate meeting in pro forma sessions every three days. But the Supreme Court ruled against him saying the Senate was not technically on recess unless it was away for at least 10 days.
NSA Officials and Computer Expert: Forensic Evidence Proves DNC Emails Were LEAKED, Not Hacked --Forensic studies of “Russian hacking” into Democratic National Committee computers last year reveal that on July 5, 2017, data was leaked (not hacked) by a person with physical access to DNC computers, and then doctored to incriminate Russia.After examining metadata from the “Guccifer 2.0” July 5, 2016 intrusion into the DNC server, independent cyber investigators have concluded that an insider copied DNC data onto an external storage device, and that “telltale signs” implicating Russia were then inserted.Key among the findings of the independent forensic investigations is the conclusion that the DNC data was copied onto a storage device at a speed that far exceeds an Internet capability for a remote hack. Of equal importance, the forensics show that the copying and doctoring were performed on the East coast of the U.S. Thus far, mainstream media have ignored the findings of these independent studies [see here and here].Independent analyst Skip Folden, a retired IBM Program Manager for Information Technology US, who examined the recent forensic findings, is a co-author of this Memorandum. He has drafted a more detailed technical report titled “Cyber-Forensic Investigation of ‘Russian Hack’ and Missing Intelligence Community Disclaimers,” and sent it to the offices of the Special Counsel and the Attorney General. VIPS member William Binney, a former Technical Director at the National Security Agency, and other senior NSA “alumni” in VIPS attest to the professionalism of the independent forensic findings.The recent forensic studies fill in a critical gap. Why the FBI neglected to perform any independent forensics on the original “Guccifer 2.0” material remains a mystery – as does the lack of any sign that the “hand-picked analysts” from the FBI, CIA, and NSA, who wrote the “Intelligence Community Assessment” dated January 6, 2017, gave any attention to forensics.
FBI Seized Crushed Hard Drives From Home Of Wasserman-Schultz' IT Aide --Over the past few months, the story of the Awan brothers has been largely ignored by mainstream media. . The Awan brothers were Pakistani IT specialists, whom worked for more than 30 house and senate democrats, as well as Rep. Debbie Wasserman Schultz. The substantial scandal has raised questions about who may have been passed data which the Awans had access to, given Pakistan's history of collaborating with a number of foreign countries who have demonstrated past willingness to influence U.S. politics. Now, per an exclusive report from the Daily Caller, we learn that the twisted plot surrounding the Awan brothers has grown even more interesting as FBI agents have reportedly seized a number of "smashed hard drives" and other computer equipment from their former residence in Virginia.FBI agents seized smashed computer hard drives from the home of Florida Democratic Rep. Debbie Wasserman Schultz’s information technology (IT) administrator, according to an individual who was interviewed by Bureau investigators in the case and a high level congressional source.Pakistani-born Imran Awan, long-time right-hand IT aide to the former Democratic National Committee (DNC) Chairwoman, has since desperately tried to get the hard drives back, the individual told The Daily Caller News Foundation’s Investigative Group. The congressional source, speaking on condition of anonymity because of the sensitivity of the probe, confirmed that the FBI has joined what Politico previously described as a Capitol Police criminal probe into “serious, potentially illegal, violations on the House IT network” by Imran and three of his relatives, who had access to the emails and files of the more than two dozen House Democrats who employed them on a part-time basis.
Wasserman Schultz aide arrested trying to leave the country - Imran Awan, a House staffer at the center of a criminal investigation potentially impacting dozens of Democratic lawmakers, has been arrested on bank fraud and is prevented from leaving the country while the charges are pending.A senior House Democratic aide confirmed Awan was still employed by Rep. Debbie Wasserman Schultz (D-Fla.) as of Tuesday morning. But David Damron, a spokesman for Wasserman Schultz, later said that Awan was fired on Tuesday. Awan pleaded not guilty on Tuesday to one count of bank fraud during his arraignment in the U.S. District Court for the District of Columbia. Awan is accused of attempting to defraud the Congressional Federal Credit Union by obtaining a $165,000 home equity loan for a rental property, which is against the credit union’s policies since it is not the owner's primary residence. Those funds were then included as part of a wire transfer to two individuals in Faisalabad, Pakistan. Awan was arrested at Dulles Airport on Monday evening before boarding a flight to Lahore, Pakistan. His wife, Hina Alvi, has already left the country for Pakistan along with their children. Federal agents do not believe Alvi has any intention of returning to the U.S., according to a court document.
Wasserman-Schultz IT Aide Arrested At Dulles Airport While Attempting To Flee Country -- Just a day after reports emerged that the FBI had seized a number of "smashed hard drives" and other computer equipment from the residence Imran Awan, the former IT aide of Debbie Wasserman-Schultz, we learn that Awan has been captured at the Dulles airport while attempted to flee the country. According to Fox News, Awan has been charged with bank fraud. BREAKING: Wasserman-Schultz IT Staffer Imran Awan Arrested at Airport While Trying To Flee The Country - @ChadPergram— Breaking911 (@Breaking911) July 25, 2017For those who have managed to avoid this story, which wouldn't be difficult given that the mainstream media has made every attempt to ignore it, the Pakistani-born brothers Abid, Imran, and Jamal Awan are at the center of a criminal investigation by U.S. Capital Hill Police and the FBI. Up until now, allegations of wrong doing have varied from simply overcharging taxpayers for congressional IT equipment to blackmailing members of Congress with secrets captured from emails.The Awan brothers are Pakistani IT specialists, whom worked for more than 30 house and senate democrats, as well as Rep. Debbie Wasserman Schultz. The substantial scandal has raised questions about who may have been passed data which the Awans had access to, given Pakistan's history of collaborating with a number of foreign countries who have demonstrated past willingness to influence U.S. politics. Just yesterday we learned that FBI agents reportedly seized a number of "smashed hard drives" and other computer equipment from their former residence in Virginia. FBI agents seized smashed computer hard drives from the home of Florida Democratic Rep. Debbie Wasserman Schultz’s information technology (IT) administrator, according to an individual who was interviewed by Bureau investigators in the case and a high level congressional source.
Imran Awan Transferred Nearly $300K To Pakistan Before Attempting To Flee, Lawyer Claims Islamophobia -- Following news of the arrest and booking of Debbie Wasserman Schultz's top IT staffer has unfolded over the last 48 hours - starting with a report on Monday that destroyed computer equipment was recovered from a home owned by Imran and Abid Awan - the Daily Caller's Luke Rosiak is out with another bombshell; Imran Awan wired $283,000 to Pakistan before attempting to flee the country to join his wife Abid (who left the country with $12,000 cash) - hours after the Daily Caller reported Awan was under investigation.Florida Democratic Rep. Debbie Wasserman Schultz’s top information technology (IT) aide was arrested Monday attempting to board a flight to Pakistan after wiring $283,000 from the Congressional Federal Credit Union to that country.He attempted to leave the country hours after The Daily Caller News Foundation’s Investigative Group revealed that he is the target of an FBI investigation, and the FBI apprehended him at the airport. Credit union officials permitted the wire to go through, and his wife has already fled the country to Pakistan, after police confronted her at the airport and found $12,000 in cash hidden in her suitcase but did not stop her from boarding, court documents show.
Conservative Woman Publicly Humiliates Trump - American Conservative - I don’t know that I have ever read a more devastating takedown of a president than this one by Peggy Noonan, of Donald Trump. She annihilates him, as only a woman could, and as only a fellow New Yorker could. She knows that to liken a New York male like Donald Trump to Woody Allen (without the sense of humor) is about the lowest blow there is. But nearly every line is savage. Excerpts: The president’s primary problem as a leader is not that he is impetuous, brash or naive. It’s not that he is inexperienced, crude, an outsider. It is that he is weak and sniveling. It is that he undermines himself almost daily by ignoring traditional norms and forms of American masculinity. He’s not strong and self-controlled, not cool and tough, not low-key and determined; he’s whiny, weepy and self-pitying. He throws himself, sobbing, on the body politic. He’s a drama queen. It was once said, sarcastically, of George H.W. Bush that he reminded everyone of her first husband. Trump must remind people of their first wife. Actually his wife, Melania, is tougher than he is with her stoicism and grace, her self-discipline and desire to show the world respect by presenting herself with dignity. More:The way American men used to like seeing themselves, the template they most admired, was the strong silent type celebrated in classic mid-20th century films—Gary Cooper, John Wayne, Henry Fonda. In time the style shifted, and we wound up with the nervous and chattery. More than a decade ago the producer and writer David Chase had his Tony Soprano mourn the disappearance of the old style: “What they didn’t know is once they got Gary Cooper in touch with his feelings they wouldn’t be able to shut him up!” The new style was more like that of Woody Allen. His characters couldn’t stop talking about their emotions, their resentments and needs. They were self-justifying as they acted out their cowardice and anger. But he was a comic. It was funny. He wasn’t putting it out as a new template for maleness. Donald Trump now is like an unfunny Woody Allen.
Boy Scouts apologise for Trump's speech - BBC News: The chief scout of the Boy Scouts of America has apologised for the remarks made by President Donald Trump at the group's national event this week. Over 30,000 people attending the event, where Mr Trump promoted his agenda and criticised his political rivals. Michael Surbaugh says the president's invitation was customary. "I want to extend my sincere apologies to those in our Scouting family who were offended by the political rhetoric that was inserted into the jamboree." He went on to say how the Boy Scouts of America (BSA) have tried to avoid taking political positions since its creation. "We sincerely regret that politics were inserted into the Scouting programme," he said. He added: "We teach youth to become active citizens, to participate in their government, respect the variety of perspectives and to stand up for individual rights." During Mr Trump's remarks in West Virginia, he assailed his former opponent Hillary Clinton, touted his election victory, and railed against the "fake news" media. "Who the hell wants to speak about politics?" Mr Trump asked the audience, before beginning his remarks. Many parents and members of the Scout community criticised the highly-politicised nature of the speech that followed.
Michael Flynn Decides That A Famously Toxic Reputation Is Not A Barrier To Entry For Private Equity Consulting - What do you do when you lying to the Vice President about allegations of collusion with a foreign government have driven you from your senior defense staff role at The White House?You get into private equity of course. Embattled former National Security Adviser Michael Flynn has opened a new consulting firm called Resilient Patriot, LLC that is advising private equity firms, according to one of his brothers, who says Flynn is “moving on with his life.” This is crazy. You don’t take a cloud of public scandal that goes to the heart of a burgeoning constitutional crisis brought on by the most controversial president in modern history and open a private equity consulting firm. You open a fund of funds, dummy. Former Trump adviser Flynn consulting again, says brother [ABC News]
Barney Frank: Clear There Will Be ‘No Significant Rollback’ on Dodd Frank -- Even Barney Frank thought having Republicans in control on Capitol Hill might put his namesake Dodd-Frank Act in jeopardy. But he doesn't anymore."I thought it would be, but it isn't," he said in a phone interview with TheStreet. "It is now clear that there will be no significant rollback."Friday marks the sixth anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Barack Obama signed on July 21, 2010. A response to the 2008 financial crisis, the sweeping legislation made major overhauls to the American financial regulations and oversight and resulted in the creation of items such as the Consumer Financial Protection Bureau, the Financial Stability Oversight Council and the Volcker Rule.President Donald Trump has pledged to "do a big number" on Dodd-Frank, and House Financial Services Committee Chairman Jeb Hensarling (R-TX) has taken aim at the legislation with a bill to dismantle it. The House passed Hensarling's Financial CHOICE Act in June. The bill is essentially dead-on-arrival in the Senate. "Nobody takes, frankly, what Mr. Hensarling does very seriously," Frank said.Frank, 77, is the former Massachusetts representative who designed the bill alongside former Senator Chris Dodd of Connecticut."I don't think you're going to see any legislative changes," Frank said. "It's now pretty clear to me that the law is essentially going to remain in place." Most legislative overhauls to Dodd-Frank would require 60 votes in the Senate. Republicans hold 52 seats, and they are unlikely to receive Democratic support. The one exception might be changes to the CFPB, which the GOP could target through a budget process known as reconciliation that requires only 51 votes. Frank acknowledged that worries him.
Regulators begin review of Volcker Rule | American Banker — In a first stab at reforming the Volcker Rule, federal regulators on Friday announced they would review how it applies to certain foreign funds. The five agencies in charge of implementing the rule — the Federal Reserve, Commodity Futures Trading Commission, Federal Deposit Insurance Corp., Office of Comptroller of the Currency and Securities and Exchange Commission — said they were “coordinating their respective reviews” of the rule.
Will fixes to the Volcker Rule matter? -- Regulators have near consensus that parts of the Volcker rule need to change. But it's not clear whether the fixes being contemplated will have a big impact. — As regulators meet Friday to discuss ways to streamline a Dodd-Frank Act rule barring banks from proprietary trading, analysts are questioning whether the reforms on the table are likely to bring significant benefits to institutions. The Financial Stability Oversight Council, a multiagency body overseen by the Treasury Department and charged with identifying and mitigating sources of systemic risk, is slated to meet in a closed session in the afternoon to discuss Treasury’s recommendations concerning the so-called Volcker Rule, among other matters. The council has met twice since Treasury Secretary Steven Mnuchin took office in January, but Friday’s meeting is the first that has named the Volcker Rule specifically as part of the agenda.
Why are we still separating banking and commerce? | American Banker - In recent remarks, acting Comptroller of the Currency Keith Noreika suggested that the government should re-examine the historic separation of banking and commerce in federal law and regulation. He noted that the U.S. “is the only country” with such separation, and “it’s not the best thing to put all your eggs in one basket.”Noreika is right. And while his agency is developing policy aimed at letting nonbank fintech firms into the banking system, his comments have even broader implications for allowing further linkages between financial and non-financial entities.Thankfully, current policy makes removing the line between banking and commerce, once and for all, relatively straightforward. Sure, retailers are still blocked from owning bank holding companies — and the depositories they can own are limited — and BHCs cannot be or acquire retailers. For this reason, most observers of the banking industry still think that the policy rationale for separation is woven tightly into banking law. But this is no longer true. The Gramm-Leach-Bliley Act of 1999 eliminated the basis for the separation principle. It’s only a matter of time before bankers and policymakers realize that concept no longer has any underlying policy support. The separation of banking and commerce was always founded on a single idea — that if banks were allowed to affiliate with other businesses they would be induced to supply low-cost funding to their affiliates. This, it was thought, would give the affiliated firms a competitive advantage, and possibly encourage risky and concessionary loans to those affiliates — thus weakening the bank. However, Gramm-Leach-Bliley allowed BHCs to enter various nonbanking fields, such as securities underwriting and insurance. So Congress has now accepted the idea that banks could — complying with sections 23A and 23B — make loans to these businesses. Accordingly, if under current law banks can safely make loans to financial affiliates without danger to competition or themselves, then the same should hold true for making loans to retailing affiliates. There is no difference in principle between an affiliation between a bank and a securities firm and an affiliation between a bank and, say, a retailer or manufacturer. If the former raises no issues of assisting an affiliate or weakening the bank, the latter shouldn’t either. This in effect eliminates the rationale for separating banking and nonfinancial (i.e., commercial) businesses.
Bank fraud shows failure of controls, says fraud expert - (video)NEP’s Bill Black appears on ABS-CBN news discussing bank fraud and specifically Metrobank loan fraud involving one of its executives.
SEC concludes initial coin offerings are securities - The Securities and Exchange Commission issued an investigative report on Tuesday concluding that tokens offered and sold by a "virtual" organization known as "The DAO" were securities and, therefore, subject to the federal securities laws. The regulator is cautioning investors that offers and sales of "initial coin offerings" or "token sales" by "virtual" organizations using distributed ledger or blockchain technology are subject to the requirements of the federal securities laws. Issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Participating in unregistered offerings may subject participants to civil or criminal enforcement proceedings. Securities exchanges trading in these securities must also register unless they are exempt. "The DAO" has been described as a "crowdfunding contract" but it would not have met the requirements of the Regulation Crowdfunding exemption because, among other things, it was not a broker-dealer or a funding portal registered with the SEC and the Financial Industry Regulatory Authority. However, the SEC decided not to bring charges in this instance, or make findings of violations in the Report, but use the results of the investigation to caution the industry and market participants.
SEC Cracks Down On "Initial Coin Offerings": Concludes Tokens Are Subject To Securities Laws --In potentially groundbreaking news for the blockchain community, moments ago the SEC issued a press release, referencing an investor bulletin on Initial Coin Offerings, which concluded that DAO Tokens, a Digital Asset, are securities for regulatory purposes, and cautioned that US Securities law "may" apply to offers, sales and trading of interested in virtual organization, targeting the increasingly more popular Initial Coin Offerings.Capital raising through blockchain requires compliance with federal securities laws https://t.co/IjOxjoVdfK — SEC Enforcement (@SEC_Enforcement) July 25, 2017 As a result of this change of treatment, those who use ICOs to sell tokens, which as a reminder have now surpassed over $1 billion in net proceeds, will have to register the tokens as securities, those participating in unregistered offerings may be liable for violations of the securities laws, and that the purpose of the registration "is to ensure that investors are sold investments that include all the proper disclosures and are subject to regulatory scrutiny for investors' protection." In a press release issued on Tuesday afternoon, the SEC said it had issued an investigative report "cautioning market participants that offers and sales of digital assets by "virtual" organizations are subject to the requirements of the federal securities laws." Such offers and sales, conducted by organizations using distributed ledger or blockchain technology, have been referred to, among other things, as "Initial Coin Offerings" or "Token Sales." In its first official regulatory intervention of ICOs, the SEC said that "whether a particular investment transaction involves the offer or sale of a security – regardless of the terminology or technology used – will depend on the facts and circumstances, including the economic realities of the transaction."
SEC report may put an end to ICO boom - The sun may be setting—or at least dimming—on a Wild West of blockchain-powered finance.The Securities and Exchange Commission on Tuesday released an investigative report concluding that initial coin offerings, or ICOs, must comply with federal securities laws, just as if they were issuing shares of stock, unless they can find a valid exemption.An ICO is essentially a special type of crowdfunding campaign, "like a Kickstarter on steroids," according to Andreessen Horowitz board partner Balaji Srinivasan. Entrepreneurs raise capital by selling blockchain tokens, giving investors a stake in the protocol, platform or service being built. The tokens then trade online as a liquid asset.Because of how easy they are to launch and how liquid the investment capital is, ICOs have been growing in popularity for months. Dozens of projects have raised a total of $1.3 billion through ICOs so far in 2017, according to Autonomous Research.While critics have accused the market of being a bubble, technologists have claimed that such token sales represent the future of funding for startups and new internet protocols, which, in turn, could change the global economy.The SEC's report could put that at risk. The agency made it clear that federal securities laws would apply to the offer or sale of securities in the United States, regardless of whether or not the "issuing entity" was a traditional company or a decentralized organization and regardless of whether or not those securities were issued through blockchain technology.
As Some Firms Defy SEC, Overstock Is Set To Cash In On "Wild West" ICOs -- The Securities and Exchange Commission roiled the blockchain industry last week when it announced that so-called Initial Coin Offerings are considered securities offerings. While some firms are embracing a strategy of open defiance, vowing to push ahead with their planned ICOs without registering them, at least one former innovator in the blockchain arena sees the new rulings as a boon for its nascent cryptoasset trading platform, according to CoinDesk. Overstock.com, one of the first major US companies to embrace blockchain technology, believes the regulations could drive business to its cryptoasset trading platform known as T-0. Overstock cemented its status as a blockchain innovator back in December 2015 when it raised $2 million by offering a small tranche of Overstock corporate bonds on its platform. The offering, which received approval from regulators, created the first blockchain-based financial securities to trade in the US. Since then, the company has been quietly building out its platform while waiting for US regulators to create a framework for legally offering and trading blockchain securities. And now the day it has long been waiting for has finally arrived, according to CoinDesk.“…earlier this week, tØ got the news it had been waiting for when the SEC finally published the results of a landmark report in which it clearly laid out its rationale for why some tokens are still securities. Moreover, the report clarified that, once a token issued in an ICO has been deemed a security, only national securities exchanges like Nasdaq and some alternative trading systems (ATSs) are permitted to be involved in the trading.”
Cryptocurrency exchanges could be subject to SEC regulation, too --You’ve probably heard the news about DAO tokens by now: The SEC says they should be regulated securities, and will probably end up regulating other digital coins, too. (At question is whether each digital coin passes the SEC’s Howey test, which we outlined in our post yesterday. Alphachain definitely does not pass.)The cryptocurrency exchanges that trade those security-coins will probably be regulated too, according to the SEC’s report. We won’t quote the report directly, since it cites statute in almost every line. But here’s the gist: If an exchange trades tokens classified as securities, it will need to register with the SEC. That process has a couple of paths.The first is applying to become a national securities exchange, which, LOL, would probably be like the IEX approval process on hallucinogens. The simpler and more reasonable option would be to register as an alternative trading system, or ATS. The SEC proposed Regulation ATS in 1998 to provide a regulatory halfway point between broker-dealers and exchanges — partly in response to the real disrupters electronifying equities trading.
SEC boss Clayton wants to tackle fiduciary rule, shareholder proposals (Reuters) - The top U.S. securities regulator on Wednesday identified some issues he wants to tackle, including finding "common ground" with the Labor Department's rule requiring brokers who give investment advice to put their clients' interest ahead of their own potential commissions. In an appearance at the U.S. Chamber of Commerce, Securities and Exchange Commission Chairman Jay Clayton raised some concerns about the Labor Department's so-called "fiduciary rule," which aims to reduce conflicts of interest among brokers offering advice on retirement investments. Consumer groups pushed for the Obama administration rule, saying excessive fees eat away at needed retirement income. Financial companies opposed it, saying it limits consumer choice. The Labor Department is seeking comments on whether to scrap or amend the rule. The SEC, the primary regulator of brokers with power to write its own fiduciary rule, has also asked the public to weigh in. "It would be extremely disappointing to me if whatever direction we go here resulted in a substantial reduction in choice for the individual investor," Clayton said, echoing the criticism Wall Street firms have put forward. He added that it would be problematic to have two disparate regulatory regimes for how brokers offer advice between the SEC and the Labor Department.
Markets, Regulators Ignore Ticking Time Bomb of Shadow Margin Loans Wolf Richter - Stock and bond market leverage is everywhere. Some of it is transparent, such as NYSE margin debt which was $539 billion as of the June report. But the hottest form of stock and bond market leverage is opaque, offered by financial firms that usually don’t disclose the totals: securities-based loans (SBLs) — or “shadow margin” because no one knows how much of it there is. But it’s a lot. And it’s booming.These loans can be used for anything – pay for tuition, fix up that kitchen, or fund a vacation. The money is spent, the loan remains. When security prices fall, the problems begin.Finra, the regulator for brokerages, doesn’t track this shadow margin, nor does the SEC. Both, however, have been warning about the risks. No one knows the overall amount of this shadow margin, but some details have been reported:
- Morgan Stanley had $36 billion of these loans on its balance sheet as of the end of 2016, up 26% from 2016, and more than twice the amount in 2013.
- Bank of America Merrill Lynch had $40 billion in SBLs on the balance sheet at the end of 2016, up 140% from 2010;
- UBS and Wells Fargo “also have made billions in such loans, people familiar with those banks” told the Wall Street Journal. Raymond James, Stifel Nicolaus… they’re all doing it.
- Fidelity used to fund its own SBLs for its clients, but three years ago partnered with US Bancorp.
- Even the little ones are trying to get their slice of the pie: In April, robo-advisory startup Wealthfront, with less than $6 billion, announced that it would offer SBLs to its clients.
And now Goldman Sachs, which has been offering SBLs to its 12,000 super-wealthy clients through its Private Banking unit — accounting “for more than half of the unit’s $29 billion in loans outstanding,” according to the Wall Street Journal — announced on Thursday that this wasn’t enough and that it is partnering with Fidelity Investments to spread these loans far and wide. This effort to lever up investors’ portfolios occurs after an eight-year bull run, with stock indices hopping from one all-time high to the next even as the economy has been growing at a dreadfully slow pace and even as corporate earnings have mostly gone nowhere for years.
Former 'Plunge Protection Team' Member Warns "Blockchain Is Freaking Governments Out" -- Dr. Pippa Malmgren, a US policy analyst and former member of the Working Group on Financial Markets, a government entity better known by its nickname, the “Plunge Protection Team,” appeared on Erik Townsend’s MacroVoices podcast to discuss bitcoin and the European refugee crisis, while also offering some clues about how the PPT, famous for its secrecy, operates. Townsend took the conversation in a direction that he said might be outside of Malmgren’s comfort zone: The rise of cryptocurrency’s like bitcoin. Contrary to his expectations, Malmgren said she’s been closely following the increasing use of cryptocurrencies, adding that they will likely play a role in determining who dominates the global economy, and therefore determines the monetary framework, after precipitating the next big paradigm shift, which will lead the world away from the dollar-based framework that exists today. Governments like China and Russia, which are seeking to create their own digital currencies, pose a greater threat to the long-term dominance of the dollar than they, or the US, realize. (interview, excerpts transcripted)
U.S. indicts suspected Russian 'mastermind' of $4 billion bitcoin laundering scheme (Reuters) - A U.S. jury indicted a Russian man on Wednesday as the operator of a digital currency exchange he allegedly used to launder more than $4 billion for people involved in crimes ranging from computer hacking to drug trafficking. Alexander Vinnik was arrested in a small beachside village in northern Greece on Tuesday, according to local authorities, following an investigation led by the U.S. Justice Department along with several other federal agencies and task forces. U.S. officials described Vinnik in a Justice Department statement as the operator of BTC-e, an exchange used to trade the digital currency bitcoin since 2011. They alleged Vinnik and his firm "received" more than $4 billion in bitcoin and did substantial business in the United States without following appropriate protocols to protect against money laundering and other crimes. U.S. authorities also linked him to the failure of Mt. Gox, a Japan-based bitcoin exchange that collapsed in 2014 after being hacked. Vinnik "obtained" funds from the hack of Mt. Gox and laundered them through BTC-e and Tradehill, another San Francisco-based exchange he owned, they said in the statement. It was not possible to reach Vinnik for comment. "Just as new computer technologies continue to change the way we engage each other and experience the world, so too will criminals subvert these new technologies to serve their own nefarious purposes," said Brian Stretch, U.S. Attorney for the Northern District of California, where Vinnick was indicted in the statement. Greek police described Vinnik as a "an internationally sought 'mastermind' of a crime organization."
Raft of AML violations lands bitcoin exchange a $110M fine - U.S. regulators slapped the bitcoin exchange BTC-e with a $110 million fine for a slew of alleged financial crimes from facilitating dark net drug sales to financing public corruption. One of the site’s operators, a Russian national, Alexander Vinnik, was arrested in Greece this week and the Treasury Department’s Financial Crimes Enforcement Network assessed a $12 million penalty against him for his alleged role. BTC-e is one of the world’s virtual currency exchanges by volume and has conducted over $296 million in bitcoin transactions, Fincen said Thursday. The company facilitated ransomware, computer hacking, identity theft, tax refund fraud schemes and drug trafficking, the agency said. The fine against BTC-e “should be a strong deterrent to anyone who thinks that they can facilitate ransomware, dark net drug sales, or conduct other illicit activity using encrypted virtual currency,” said Fincen’s acting director, Jamal El-Hindi. The fine was the Treasury’s first action against a money-services business located in a foreign country, and the second against a virtual currency exchange. (Ripple was the first in 2015, but its six-figure fine pales in comparison to BTC-e’s.) It was also the second action this week by a U.S. regulator in the cryptocurrency space. The Securities and Exchange Commission released an investigative report on Tuesday that concluded certain so-called initial coin offerings are subject federal securities laws, potentially cooling a white-hot funding market for startups and software developers.
Mobile-only fintech makes play for (regular) bank charter -- While policymakers are still busy debating how fintechs should be regulated, one firm has decided to push ahead with its own plans. A mobile-only financial institution called Varo Money announced Tuesday that it has filed formal applications with the Office of the Comptroller of the Currency and Federal Deposit Insurance Corp. to become a national bank.“We'd be the first national bank in U.S. history that is designed for people who want to bank on their cellphones,” Colin Walsh, its CEO and co-founder, said in an interview. “We're suddenly now putting a personal banker in your pocket.” The company’s research found that discrete money apps were not responding holistically to the needs of millennials. “We're trying to create a faster, more affordable way of managing money,” Walsh said. “The fintechs, they're doing some really cool stuff, but it's really narrow.”Though it would dispense with brick-and-mortar branches, Varo Money plans to follow a traditional bank model in other fundamental ways. It would take deposits, cash checks and make loans. Its core products would center around direct deposit and savings accounts, as well as unsecured lending.That is why Varo is aiming for a traditional national bank charter, which will require approval from both the OCC and the FDIC, rather than pursuing a fintech charter, which is still a work in progress at the OCC. "The bank charter will simplify our model and allow us to offer a fuller suite of products on a nationwide basis,” Walsh said.
A quick guide to what’s at stake in the SoFi charter controversy - slideshow - When a highflying technology startup with a bluntly elitist brand seeks access to FDIC-insured deposits through the kind of charter Walmart once sought, a backlash is almost certainly inevitable. Social Finance’s application for an industrial loan charter has not only drawn opposition from a coalition of incumbent banks and community activists. It also serves as a microcosm of several perennial debates in financial services policy. From complaints about an unlevel playing field to warnings about systemic risk, from giving back to the community to fostering innovation, here’s a rundown of the issues.
The battle between banks and disruptors is just beginning -- Institutions want to get to the nirvana of new technologies, but they are stuck in a bowl of spaghetti of old systems. Some call these systems legacy, others call them handcuffs. Whatever the nickname, the antiquated core systems are challenging banks’ ability to progress in a digital banking world — a big weakness that fintech startups believe they can exploit. New fintech companies have been launching capabilities built upon the latest internet-enabled technologies, such as easy-to-use apps for customers, simple payment checkouts for merchants and open systems to allow anyone to work with them. It is almost like banking in a mobile app store: Hundreds of companies are offering thousands of services that are simple and easy for sending and receiving money. These companies include firms like Stripe, a six-year-old startup that is the preferred code for building online checkout services. Stripe, which is really easy to work with, is the chosen system for many other innovative companies including Kickstarter and Apple Pay and was valued at almost $10 billion by the end of 2016. Not bad for a six-year-old startup. Stripe has gained such a valuation because it has taken something that banks make difficult — setting up online payment services — and made it incredibly easy for customers. There are companies that do similar things in lending, savings, investments and other specific areas of financial services based upon internet technologies. These companies have names like Zopa, SmartyPig, Nutmeg and eToro, and have fun branding and cool offices. They are very different from banks. They all share many of the same attributes, in terms of being young, aspirational, visionary and capable. This is why, collectively, they have seen investments from venture capital and other funds averaging $25 billion for the last four years, according to figures published by KPMG. However, there is a possible impasse here. The most successful fintech firms are not replacing banks, or at least not yet. They are serving markets that were underserved. But none of them have replaced a bank. Rather, the companies are succeeding by addressing areas that banks find difficult to serve due to cost or risk, such as lending to small businesses.
Can AI spy financial crime without implicating innocents? - I was talking to a banking compliance executive recently about how banks are looking to use artificial intelligence to spot clues to crimes being committed by customers or employees. This executive was clearly not buying into the hype.“We’ve thought about that, but we don’t plan to use it at this time,” she said. “There’s too much risk of innocent people getting caught up in a dragnet.” An AI engine could find a pattern of transactions or behavior among law-abiding customers that mimics money laundering or some other crime. A program that analyzes social media networks might see that I have a cousin who lives in Iraq and is a member of ISIS and that I once co-owned a business with him (that’s a hypothetical example), and be flagged as suspicious.Banks also worry about losing the human element and about how regulators will view their use of such new technologies, especially with new regulations like the New York State Department of Financial Services’ new anti-terrorism rules, which require banks to validate their concerns. Proponents of AI scoff at such concerns. “It's almost like saying you don’t want to use computers because you might get electrocuted,” said Solon Angel, founder of MindBridge, a company that uses AI to analyze financial statements and transactions for evidence of something untoward going on
Democrats criticize financial industry backgrounds of two Trump bank regulator nominees -- Senate Democrats on Thursday criticized the financial industry backgrounds of President Trump’s nominees for two key banking regulatory positions, arguing they would not protect the interests of average Americans.Sens. Sherrod Brown (D-Ohio), Elizabeth Warren (D-Mass.) and others sharply questioned Joseph Otting, the former chief executive of Pasadena’s OneWest Bank, and investment fund manager Randal Quarles during a confirmation hearing by the Senate Banking Committee.Trump nominated Otting to be the comptroller of the currency, a powerful regulator of national banks. Quarles has been tapped to be the Federal Reserve’s vice chairman for supervision, who is in charge of the Fed’s oversight of the nation’s largest bank holding companies and other regulatory efforts.The two are expected to be friendlier to the banking industry than recent Democratic appointees.Otting came under fire from Democrats for the foreclosure practices at OneWest Bank.In 2011, a regulator that is now part of the Office of the Comptroller of the Currency said in a regulatory order that OneWest had engaged in robo-signing, a practice in which workers signed mortgage- and foreclosure-related documents without reviewing them or verifying they were accurate.“You permitted your bank to break the rules while in the process making life harder for homeowners… across the country trying to stay in their homes,” Brown told Otting. “How do we trust that you won’t allow banks to skirt the rules and harm their customers as their regulator?”
Fed nominee Quarles: Time to step back from some banking regulations: President Donald Trump's choice to oversee the national banking system indicated Thursday that it's likely time to roll back some of the regulations put in place after the financial crisis. That didn't sit well with some of the people who will have to vote on his nomination. Randal Quarles, nominated to be the Federal Reserve's first-ever vice chair for supervision, appeared at his confirmation hearing before the Senate banking committee and discussed the direction in which he thinks reform should take. "Regulatory policies enacted since the financial crisis have improved the safety and soundness of the financial system," he said in his prepared remarks. "But as with any complex undertaking, after the first wave of reform, and with the benefit of experience and reflection, some refinements will undoubtedly be in order." Asked later to be more specific, he said he would endorse virtually all the reforms proposed earlier this year in a Treasury report, including changing the part of stress tests that examines whether banks can withstand a major crisis, and exempting smaller banks from more intense scrutiny. He took it a step further and said regulators need to eliminate "the lack of transparency" surrounding the stress test process. However, his views weren't well-received by some on the committee. Sen. Elizabeth Warren, the Massachusetts Democrat who has been a vocal critic of the Wall Street culture that helped create the 2008 financial crisis, grilled Quarles and said she feared putting him in charge of the banking system.
Elizabeth Warren Tears Apart Another Trump Nominee - In prepared testimony during his confirmation hearing Thursday, Randal Quarles, who founded private investment firm the Cynosure Group, told the Senate banking committee that while “Regulatory policies enacted since the financial crisis have improved the safety and soundness of the financial system . . . some refinements will undoubtedly be in order.” That obviously wasn’t going to sit right with Warren from the get-go, and that was before Quarles said that he would endorse nearly all of the reforms the administration proposed earlier this year, including, per CNBC, “changing the part of stress tests that examines whether banks can withstand a major crisis,” as well as exempting smaller banks from harsher scrutiny. The Massachusetts senator unloaded. “After the 2008 crisis, Congress put the Fed in charge of supervising the biggest banks and created a new position, the vice chair for regulation, that was supposed to lead that effort,” Warren said. “That means if you’re confirmed to this position Mr. Quarles, you’ll have more influence than any other person over the regulation of the big banks. Now, given that enormous power, the number one thing we need from the Fed’s vice chair for supervision is a demonstrated willingness to stand up to the interests of the big banks that threaten the financial institutions. But when I look at your 30-year career spinning through the revolving door in the private sector Mr. Quarles, I just don’t see it.”Obviously, she wasn’t finished. Continuing, Warren told a “visibly shaken” Quarles, “You’ve got 15 years representing big banks at a New York law firm working on some of the mergers that created the too-big-to-fail banks that we have today. You have two stints at the Treasury Department including shortly before the 2008 crisis where you insisted the banks were well capitalized enough to survive a housing downturn, it turns out they weren’t, and more than a decade in private equity and investment management where you’ve argued repeatedly for weaker rules for the biggest banks. That’s not a track record that should give Americans a whole lot of confidence in you.”
Wells Fargo Busted Forcing Unwanted Auto Insurance On 800,000 Borrowers --One year after Wells Fargo was busted in the biggest post-financial crisis scandal, when Warren Buffett's favorite bank was exposed for fraudulently "cross-selling" bank products, including creating millions of credit cards and bank accounts to its customers that were never requested, and which cost the former CEO his job, Wells has just been busted yet again for another major scandal: the NYT's Gretchen Morgenson writes that more than 800,000 people who took out car loans from Wells Fargo were also charged for auto insurance they did not need, and some are still paying for it, according to a 60-page internal report prepared by Oliver Wyman for Wells execs.The report, which was prepared by the consulting firm Oliver Wyman, looked at insurance policies sold to Wells customers from January 2012 through July 2016. The insurance, which the bank required, was more expensive than auto insurance that customers often already had obtained on their own.Wells Fargo automatically imposed the insurance through its Dealer Services unit. Its website says it has more than four million customers and provides a variety of banking services to 14,000 auto dealers around the nation. It says the company’s lender-placed auto insurance “may be considerably more expensive than insurance you can obtain on your own.” The NYT adds that "such policies typically cost more than $1,000 a year, not counting interest. (Customers could pay them in full or finance them over time.) If a car was repossessed, the bank might charge a reinstatement fee of as much as $500, so a borrower could face $1,500 in charges."It gets better: the expense on the unneeded insurance (which covered collision damage) haspushed some 274,000 Wells Fargo customers into delinquency and resulted in almost 25,000 wrongful vehicle repossessions. And the cherry on top: "among the Wells Fargo customers hurt by the practice were military service members on active duty."
Wells Fargo at It Again, Stuck Over 800,000 Customers With Unnecessary Car Insurance --Yves Smith - So now we see another way Wells Fargo achieved its amazing level of product cross-sells. As reported by the New York Times’ Gretchen Morgenson, not only did it sign up customers for accounts and credit cards without their knowledge, it also forced auto insurance onto them. And unlike the “fake accounts” scandal, where the actual monetary damage to customers was limited (although some suffered real credit score damage), Wells Fargo’s own hired gun, bank consultant Oliver Wyman, estimated that 274,000 were forced into delinquency and nearly 25,000 had their cars wrongfully repossessed from January 2012 through July 2016. How did this come about? Wells would “automatically impose” auto insurance from National General on auto loan customers. National General was supposed to check if the borrower already had coverage but apparently didn’t. The insurance usually cost about $1000 a year, before any interest. Per Morgenson: The insurance, which the bank required, was more expensive than auto insurance that customers often already had obtained on their own. For borrowers, delinquencies arose quickly because of the way the bank charged for the insurance. Say, for example, that a customer agreed to a monthly payment of $275 in principal and interest on her car loan, and arranged for the amount to be deducted from her bank account automatically. If she were not advised about the insurance and it increased her monthly payment to, say, $325, her account could become overdrawn as soon as Wells Fargo added the coverage. State insurance regulations required Wells Fargo to notify customers of the insurance before it was imposed. But the bank did not always do so, the report said. And almost 100,000 of the policies violated the disclosure requirements of five states — Arkansas, Michigan, Mississippi, Tennessee and Washington…. Compare that $75 million with the $4 million or so in bogus charges in the fake accounts scandal. And notice that Wells ordered charges to maximize the likelihood of defaulting on principal was called “pyramiding fees” in the days of foreclosure fraud. And Wells engaged in this practice then. Even Bank of America, which had acquired predatory Countrywide, didn’t stoop that low. Here are the details:
In regulating bank boards, it's time to recenter the pendulum --In the morass of regulatory burden imposed on banks following the crisis, one area where the pendulum swung way too far was in regulators’ approach to banks’ boards of directors. Thankfully, policymakers appear willing to bring the pendulum back. Federal Reserve Board Gov. Jerome Powell recently told CNBC that the central bank is “working on a reset … of how our supervision interacts with boards of directors.” He said the aim is to move toward a “more principles-based approach” to focus boards on holding management accountable, with fewer mandates and checklists. Similarly, the Treasury Department’s June report on “core principles” for regulation calls for reassessing regulatory requirements on bank boards.That same Treasury report calls out “the failure of board governance and oversight of banking organizations” as a major contributor to the banking crisis. There is no question that poor board governance and oversight contributed to the financial crisis.But there are few, if any, constituencies I can think of that did not contribute to the crisis. That list includes bank management, nonbanks and the capital markets, regulators, politicians and even consumers. Poor board governance and oversight were not the root cause of the crisis. Boards were unable in many cases to catch and correct overly risky behavior by senior executives before it was too late. But directors’ failures were derivative failures of bank management in the areas of business, risk and control. Key managers were clearly not up to the task and did not provide the information and candor needed to adequately enable and compel effective governance. An unfortunate result was that regulators, overlooking root causes, became increasingly harsh in their communications with directors, while their expectations of board responsibilities became overly burdensome and prescriptive.
Loan default rate for risky retailers jumps above 5%; Fitch Ratings - The loan default rate for risky retailers has jumped above 5% in July, according to Fitch Ratings, a spike the rating agency warned about last week. The trailing 12-month retail institutional leveraged loan default rate stood at 2.8% at the end of June. The rate was propelled upward by five retail defaults totaling $3.8 billion of debt, by companies including J. Crew and True Religion Apparel. "The loan universe hasn't seen defaults of this magnitude from retail since the sector's previous high of 5.7% in 2009," said Eric Rosenthal, senior director of leveraged finance. Defaults are being caused by a mixture of factors, including changes in the sector such as changing shopper behavior, as well as unsustainable capital structures, said Fitch.
Small-business loans need their own HMDA | American Banker - Businesses owned by people of color are one of the fastest-growing sectors in the country right now. The number of minority business enterprises (MBEs) increased by 38% from 2007 to 2012, while the number of nonminority firms experienced a 5% decrease over the same period. MBEs also serve as engines of employment and economic development in their communities — they create jobs at a faster rate than white-owned firms and are more likely to hire locally. Despite the accelerated growth of MBEs, we know from what little data is currently available that minority-owned businesses — Latino- and black-owned firms specifically — are starved of the financing and capital they need to reach their full potential. MBEs have greater difficulty accessing loans from financial institutions compared with white-owned firms, pay higher interest when they borrow, receive smaller loans and have their loan applications rejected more often. Small Business Administration lending data, analyzed by the Wall Street Journal, shows that minority-owned businesses don’t get the capital they need. In 2014, black-owned businesses only received 2.3% of SBA loans, while Latino-owned businesses only received about 5% percent of those loans. These numbers are absurd given that in 2012, black-owned businesses made up 9.3% of total firms and Latino-owned businesses 12%. Publicly available data on small-business lending by race and ethnicity would help improve these numbers. That is why Section 1071 of the Dodd-Frank Act is vital for communities of color. Section 1071 gives the Consumer Financial Protection Bureau the responsibility to implement a rule requiring financial institutions to report data on small-business applicants by various categories, including race, ethnicity, revenue type of business and action taken on the application. The CFPB is only now getting around to writing that rule, but any progress may be stopped by Congress before the bureau implements anything. Multiple bills in the House and Senate propose to repeal Section 1071 completely. This includes both the Financial Choice Act and the Community Lending Enhancement and Regulatory Relief (CLEARR) Act. The U.S. Treasury has also called for repeal of Section 1071 in a report prepared for President Trump. The Treasury report says, “Many lenders have expressed concern that this requirement will be costly to implement, will directly contribute to higher small business borrowing costs, and reduce access to small business loans.”
U.S. Regional Banks Take on Wall Street - Atlanta and Cleveland are far from Wall Street, but regional banks in those and other U.S. cities are mimicking their bigger competitors by plunging into capital markets. SunTrust Banks Inc., KeyCorp and Citizens Financial Group are among large regional lenders that have been building out their investment-banking capabilities as stubbornly low interest rates have crimped profits. Now they’re reaping the benefit, reporting record fee income from the units in the first half of the year. Investment-banking revenues at seven of the 11 largest regional banks that break out results for the business climbed a combined $339 million in the first half of the year. The lenders are offering merger advice, debt underwriting and help raising capital to the same types of middle-market companies that they’ve long provided with routine banking services. That segment of the market has been eager to grow in recent years, with 31 percent of executives in a recent SunTrust survey saying they’d like to make a major capital investment over the next five years and 17 percent interested in acquiring another company. To be sure, the regionals’ operations are still dwarfed by those of Wall Street behemoths like JPMorgan Chase & Co., which generated $1.8 billion in second-quarter investment-banking fees. But the fact that smaller firms are posting revenue gains in that business in a quarter where Goldman Sachs Group Inc. reported a 3.2 percent drop from a year earlier speaks to the appeal of their offerings.
Business Customers Are Tired Of Being Bilked Of Billions; Demand Rate Increases On Their Bank Deposits -- In light of the fact that the Fed has raised rates by 75bps over the past 6 months, we recently wondered aloud just how long the big banks could continue to stiff Americans out of interest payments on their deposits. As the Wall Street Journal points out today, despite three Fed rate hikes over the past several months, the average rate paid on deposits at the 16 largest banks in the U.S. has risen a paltry 10 bps.Meanwhile, with nearly $12 trillion held in deposit accounts at U.S. commercial banks, each 25bps of foregone interest is costing depositors about $30 billion a year, all of which is flowing straight to the bottom line of the large banks.In the end, we concluded that the banks would continue to suppress deposit rates for as long as their customers continued to ignore the fact that they were getting shafted but that, over the long haul, math and greed would prevail and depositors would demand higher rates.Alas, it seems as though the "long haul" that we predicted has arrived well ahead of schedule...at least for business customers anyway. As the Wall Street Journal points out today, corporate customers are starting to demand higher rates on deposits and, for the most part, the large banks are acquiescing.Consumers are giving banks a pass when it comes to shopping for higher interest rates on deposit accounts. Businesses, on the other hand, are becoming more demanding.With short-term interest rates on the rise, corp orate depositors are seeking bigger payouts for their deposits, and big banks have started capitulating.The reason: Small rate increases are often worth just pennies to many consumers, but they can And companies have greater leverage with banks since in many cases they also bring in lucrative investment banking and trading business.translate into meaningful dollars on large corporate deposits of millions or even billions of dollars.
'Sadly, there still is a tendency to discriminate' | American Banker (podcast) Former Comptroller of the Currency Eugene Ludwig shares stories from his days as a top regulator during the Clinton Administration, the reasons why bank rules should be reviewed and maybe rewritten, and why he thinks the revolving door between Washington and the private sector is ok.
US regulators drop plan to restrict pay and bonuses for top executives: Several US regulators have dropped pursuit of a long-running plan to restrict bonuses on Wall Street, as part of a wider effort to stop working on unfinished rules put in place after the financial crisis. Government agencies, including the Securities and Exchange Commission and several banking regulators, were directed under the 2010 Dodd-Frank law to develop compensation rules intended to curb excessive risk taking. Former president Barack Obama, during his last year in office, personally urged regulators to finish the rules before his term ended. The six agencies delivered a new proposal in April 2016, but that was too late to push through a final version of the rule before President Donald Trump took office in January. New regulatory agendas unveiled overnight by the SEC and others show leaders excluded any mention of the restrictions, including longer deferment periods for bonuses and the amount of time payouts are subject to potential clawbacks. The proposal had targeted executives at some of the nation’s largest financial firms, including investment managers and mortgage-finance companies Fannie Mae and Freddie Mac, but the stiffest rules were reserved for big banks. The shift, disclosed in a semiannual list of pending regulations federal agencies provide to the White House’s budget office, discloses how regulators in the Trump administration have started pulling back from postfinancial crisis rules. New SEC Chairman Jay Clayton has outlined a more business-friendly agenda, including promoting more ways for companies to raise capital in public markets.
The Mega Rich Are Getting Mega Richer: A Former CEO Exposes the Corruption Behind Their Obscene Paychecks - By Steven Clifford, author of The CEO Pay Machine: How It Trashes America -- In the long term, the indirect effect of the Pay Machine—the increase in income inequality—is economically more injurious than the erosion of company earnings or a stock market downturn.Income inequality in America has risen sharply since 1976. Economists and pundits point to multiple causes—globalization and competition from low-wage countries; growing educational disparities that particularly affect men and minorities; technological changes that reward the highly skilled; decline of labor unions; changes in corporate culture that place stock price and earnings above employees; free market philosophy and the rise of winner-take-all economics; households with high-income couples; lower rates of marriage and of intact families; high incarceration levels; immigration of low-skilled individuals; income tax and capital gains tax cuts and other conservative economic and tax policies; deregulation; and decreased welfare and antipoverty spending coupled with redistribution programs that disproportionately benefit the elderly.All of the above may contribute to inequality. However, the proximate cause is quite simple. The jump in inequality is due to a small number of people, mostly business executives, who make huge amounts of money. They are the Mega Rich, the top .1 percent in income, who averaged $6.1 million in income in 2014. The Merely Rich are the rest of the 1 percent. It’s the Mega Rich, not the Merely Rich, who drive inequality. (I’m a member of the Merely Rich, so don’t blame me.) As shown in the graph [that follows]… between 1980 and 2014 the average real income of the Mega Rich has nearly quadrupled, increasing by 381 percent. Over the same period, the Merely Rich doubled their income while the bottom 90 percent lost ground, suffering a 3 percent decline.
Do regulators still need to issue an exec comp rule? - American Banker — A regulatory plan to create new restrictions on banks’ executive compensation practices appears dead — but changes since the financial crisis may have made the proposal largely obsolete anyway. In updated regulatory agendas published late Thursday, four of the six agencies responsible for completing the joint rulemaking left the regulation off their agendas.
Jamie Dimon: You Make Us Embarrassed to be Americans -- William K. Black - - Jamie Dimon talked about his personal pain recently using the exact phrase that many of us have used to explain his personal anguish that “It’s almost an embarrassment to be an American citizen traveling around the world and listening to the stupid sh—t we have to deal with in this country.” The Wall Street Journal’s “Market Watch” described Dimon’s fervor. “J.P. Morgan Chase & Co.’s outspoken CEO on Friday broke into an impassioned, expletive-tinged rant.”The WSJ, in the introduction of an online video interview of Paul Gigot, its editorial page editor, termed it a “remarkable diatribe.” Most United States readers share Dimon’s embarrassment at President Trump’s actions and words and can empathize with Dimon’s rant. Except, Dimon was not ranting about Trump’s actions and words that have dishonored America and everything that once made America great. Dimon launched his diatribe because Trump has been too slow in completing the destruction of those things that once made America great. The WSJ was praising, not criticizing, Dimon when they described his statements as an “expletive-tinged rant” and a “remarkable diatribe.” Dimon said U.S. growth was held in check by a lack of policy momentum in D.C. that has failed to deliver a spate of pro-growth legislation that could help to boost an otherwise sluggish economy. “We have to focus on policy that is good for all Americans,” Dimon said, speaking Friday morning on a call with reporters to discuss earnings. When Dimon calls for “policy that is good for all Americans,” one can be sure that he is calling for policies that will be great for Dimon and terrible for nearly all Americans. Elite U.S. Bank CEOs led the three most destructive fraud epidemics in world history that hyper-inflated the housing bubble and drove the financial crisis that drove the Great Recession and caused this massive loss of economic growth.
House Votes to Overturn CFPB Mandatory Arbitration Ban - Jerri-lynn Scofield - As expected, the House of Representatives voted yesterday to overturn the Consumer Financial Protection Bureau’s (CFPB) ban on mandatory arbitration, the Arbitration Agreements Rule. The House relied on the Congressional Review Act (CRA), which provides expedited procedures for passing legislation rescinding any regulation that was finalized in the preceding 60 session days, by simple majority votes in each chamber. There is no need for prior committee consideration by either house, and the measure is exempt from a possible Senate filibuster. Once the CRA resolution of disapproval is signed by the President, the rule is rescinded. As the agency explained in its press release announcing the rule on July 10:Many consumer financial products like credit cards and bank accounts have arbitration clauses in their contracts that prevent consumers from joining together to sue their bank or financial company for wrongdoing. By forcing consumers to give up or go it alone – usually over small amounts – companies can sidestep the court system, avoid big refunds, and continue harmful practices. The CFPB’s new rule will deter wrongdoing by restoring consumers’ right to join together to pursue justice and relief through group lawsuits. I refer readers to Bill Black’s excellent post, Bill Black: The CFPB Arbitration Rule is Pro (Honest) Businesses, discussing the criminogenic environment that led the agency to promulgate this rule in the first instance and outlining why it was desperately needed. The Senate is now expected to vote on overturning the arbitration rule in September– according to this WSJ article, House Votes to Repeal CFPB’s Arbitration Rule. Given the financial and corporate lobbying firepower that’s been deployed on this issue, that body will almost certainly vote to overturn the rule, over the strenuous objections of consumer advocates, as reported by US News and World Report in Republicans Move to Repeal Financial Rule Opposed by Banks:
Who is killing the CFPB's arbitration rule? - The financial industry’s hefty investment in the campaigns of House members appeared to pay off this week when that chamber voted to kill a new rule that allows consumers to file class-action lawsuits against banks and other institutions. The Republican-led House passed a resolution on Tuesday to block a Consumer Financial Protection Bureau (CFPB) rule that was published earlier this month; that rule prohibits financial service companies from inserting agreements in contracts that prevent customers from filing class-action lawsuits against a company.Those agreements, which have become popular in recent years, instead require consumers to settle complaints through arbitration, a less public and often less costly process favored by financial institutions. Blocking the rule has been a priority of the financial industry since it was first suggested in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed in response to the 2008 financial meltdown. But killing the rule will also require the Senate to act as the House did.To fight the CFPB, the financial industry has spent millions cultivating relationships with lawmakers such as Rep. Keith Rothfus, R-Pa., who sponsored the resolution to undo the CFPB arbitration rule.Since Rothfus was first elected to Congress in 2009, he has received more than $971,000 from financial institutions — $389,990 from securities and investment firms; $316,767 from insurance firms, which sell financial products; and $264,714 from commercial banks, according to the nonpartisan Center for Responsive Politics (CRP). On average, House members receive $163,702 from the financial sector, CRP reported. Rothfus also enjoys the support of the Club for Growth, the self-described “leading free-enterprise advocacy group in the nation.” The group has given Rothfus $183,428 during his political tenure — more than double the amount from his next highest donor, Federated Investors Inc.
CFPB to act fast on payday rule ahead of likely Cordray exit --The Consumer Financial Protection Bureau is moving quickly to release a rule regulating payday lenders by the fall in a final push before the widely expected departure of Director Richard Cordray. The CFPB's decision to finalize its arbitration rule earlier this month has bolstered the effort to finish the controversial payday rule, because it's not clear Republicans will have the necessary votes to repeal either
U.S. Foresaw Better Return in Seizing Fannie and Freddie Profits - Gretchen Morgenson, NYT - In August 2012, the federal government abruptly changed the terms of the bailout provided to Fannie Mae and Freddie Mac, the mortgage finance giants that had been devastated by the financial crisis. Instead of continuing to receive payments on the taxpayer assistance, Treasury officials decided to begin seizing all the profits both companies generated every quarter.It was an unusual move, given that the companies still had public shareholders. But it was necessary, the Treasury said, to protect taxpayers from likely future losses in their operations. Justice Department lawyers have reiterated this view in court, saying that the bailout terms were modified because the companies were in a death spiral.But newly unsealed documents show that as early as December 2011, high-level Treasury officials knew that Fannie and Freddie would soon become profitable again. The materials also show that government officials involved in the decision to divert the profits knew the change would most likely generate more money for Treasury than the original rescue terms, which required the companies to pay taxpayers 10 percent annually on the bailout assistance they had received. A December 2011 information memo to Timothy F. Geithner, the former Treasury secretary, is among the newly released documents. The 17-page memo from Mary John Miller, assistant secretary for financial markets, shows that the idea to extract all of Fannie’s and Freddie’s profits coincided with their anticipated turnaround.
Fannie, Freddie are irrelevant to a government-backed mortgage system -- As Congress considers what to do with the two failed housing agencies, Fannie Mae and Freddie Mac, it is important for members of Congress to differentiate between issues of real importance to the greater public interest and those aspects of past housing policy that are either irrelevant or only of interest to special interests. At its core, federal housing finance policy should be focused on preserving the ability of lower- and middle-income Americans — particularly first-time homebuyers — to participate in the housing market. To meet that objective, first and foremost is the question of a government guarantee for the securities issued or guaranteed by the various government-sponsored enterprises — including Fannie, Freddie, Ginnie Mae and the Federal Home Loan banks. Each of these GSEs plays a vital role in the $10 trillion market for housing finance, albeit in very different ways. As any bond investor will confirm, the only reason that the securities issued by Fannie and Freddie have “AAA” ratings is because of the backing of the United States. Whether or not these two GSEs have “capital” is completely irrelevant to investors. Calls by lawmakers in both parties to do away with Fannie and Freddie are right on target, but the government guarantee on the mortgage-backed securities they issue is vital to maintaining a homogeneous market in home mortgages. One promising idea is to eliminate Fannie and Freddie but shift their functions and liabilities to the Federal Housing Administration and Ginnie Mae. There are a number of advantages to the Ginnie Mae market. First and foremost, the MBS bonds guaranteed by Ginnie are issued directly by the private banks and nonbank mortgage firms operating in the federally backed mortgage market. These issuers have lots of skin in the game and must closely follow the FHA’s rules regarding loan origination and loss mitigation in the event of default. Indeed, many banks have left the FHA market for precisely this reason.
The reason small lenders are leery of GSE reform --American Banker recently ran an opinion piece written by a member of a large, mortgage industry trade association touting that trade association’s plan for reforming the government-sponsored enterprises as being good for small lenders. I can tell you from this small lender’s point of view that most of the various GSE reform proposals that have been offered, in very clever and disguised ways, are designed to advance the interests of the big-bank lenders and their Wall Street enablers, at the expense of companies like mine and the consumers whose mortgage needs we serve. It even places the American taxpayer at risk as will be explained later. Here are the concerns of small lenders in a nutshell. We currently have a level playing field and a truly competitive mortgage market for the first time in a generation. This is due to an extremely helpful legal provision enacted by Congress in 2011 mandating equal guarantee fee pricing by Fannie Mae and Freddie Mac for all lenders. The GSEs’ regulator and conservator, the Federal Housing Finance Agency, has employed this legal provision to eliminate the previously harmful practice by Fannie and Freddie of granting volume discounts on their loan guarantee fees to large, primarily bank-owned lenders. Any GSE reform proposal should leave small lenders and their customers in at least as good a position as they are now, and it should do so in a targeted fashion, so that we do not disrupt the current ways that our mortgage markets are working successfully to provide consumers with affordable mortgages. Sadly, most of these GSE reform proposals fall far short of that. While the plan proposed by the Mortgage Bankers Association would extend the prohibition on unequal pricing, it is silent on policing a tool the big banks can use to achieve the same objective as volume discounts: upfront risk-sharing. While this tool is great in theory, through the use of upfront risk-sharing the big-bank lenders could employ a variety of complicated financial structures that would minimize their own risk exposure while still affording them the same advantages they formerly had under volume discounts.
424800 U.S. Properties with Foreclosure Filings in First Six Months of 2017, Down 20 Percent from Year Ago – RealtyTrac — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Midyear 2017 U.S. Foreclosure Market Report™, which shows a total of 428,400 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2017, down 20 percent from the same time period a year ago and down 28 percent from the same time period two years ago.Counter to the national trend, eight states and the District of Columbia posted a year-over-year increase in foreclosure activity in the first half of 2017. Foreclosure activity increased 60 percent in the District compared to a year, while states with an increase included New Jersey (up 2 percent); Connecticut (up 3 percent); Louisiana (up 5 percent); and Mississippi (up 11 percent).Also bucking the national trend with increasing foreclosure activity compared to a year ago were 28 of the 217 metro areas (13 percent) analyzed in the report, including Houston, Texas (up 18 percent); Oklahoma City, Oklahoma (up 22 percent); Hartford, Connecticut (up 12 percent); New Orleans, Louisiana (up 4 percent); and Albany, New York (up 2 percent). “With a few local market exceptions, foreclosures have become the unicorns of the housing market: hard to find but highly sought after,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “More than 38 percent of properties sold at foreclosure auction in the first half of this year went to third-party buyers rather than back to the bank — the highest share we’ve ever seen going back as far as 2000, the earliest this data is available,
Freddie Mac: Mortgage Serious Delinquency rate declined in June, Lowest since April 2008 --Freddie Mac reported that the Single-Family serious delinquency rate in June was at 0.85%, down from 0.87% in May. Freddie's rate is down from 1.08% in June 2016. Freddie's serious delinquency rate peaked in February 2010 at 4.20%. This is the lowest serious delinquency rate since April 2008. These are mortgage loans that are "three monthly payments or more past due or in foreclosure". Although the rate is still declining, the rate of decline has slowed. Maybe the rate will decline another 0.2 to 0.3 percentage points or so to a cycle bottom, but this is pretty close to normal.
Detroit Is Demolishing Homes With Federal Money Meant "To Save Them" ---Money initially earmarked to help troubled homeowners struggling with underwater mortgages was instead spent on demolitions meant to boost prices of surrounding homes and help ward off crime in city neighborhoods. Except the money was often squandered by state governments, disproportionately robbing poor citizens in cities like Detroit of a program meant to save them from homelessness. As the Detroit Metro Times reports, Detroit's decade-long wave of tax and mortgage foreclosures has wiped out large swaths of the city's neighborhoods as Wayne County continues to seize thousands of occupied homes a year. The city's neediest homeowners were supposed to receive federal assistance to save their homes as part of the Treasury Department's seven-year-old Hardest Hit Fund. But the State of Michigan squandered its money by adopting unnecessarily stringent requirements — according to a scathing audit issued in January by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).In 2010, Michigan originally received nearly $500 million to provide loans to eligible homeowners who were facing tax or mortgage foreclosure. But the program, called Step Forward Michigan, rejected funding for about 5,000 Detroiters, while assisting more than 2,000 homeowners who earned at least $70,000 a year. That number eventually swelled to $761 million, and of that amount, half was committed to demolitions.As a result, more than 80 percent of Detroiters making $30,000 or less a year were denied assistance to save their homes from tax or mortgage foreclosure. By contrast, the other 17 states with Hardest Hit Funds rejected 53 percent of homeowners making less than $30,000.
Home Ownership Rate: Up 1.3% YoY -- Over the last decade, the general trend has been consistent: The rate of home ownership continues to decline. The Census Bureau has now released its latest quarterly report with data through Q2 2017. The seasonally adjusted rate for Q2 is 63.9 percent, up from 63.7 in Q1. The nonseasonally adjusted Q1 number is 63.7 percent, fractionally above the Q2 number. The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend.
HVS: Q2 2017 Homeownership and Vacancy Rates --The Census Bureau released the Residential Vacancies and Homeownership report for Q1 2017. This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates. This survey might show the trend, but I wouldn't rely on the absolute numbers. The Census Bureau is investigating the differences between the HVS, ACS and decennial Census, and analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate increased to 63.7% in Q2, from 63.6% in Q1. I'd put more weight on the decennial Census numbers - and given changing demographics, the homeownership rate is probably close to a bottom. The HVS homeowner vacancy declined to 1.5% in Q2. The rental vacancy rate increased to 7.3% in Q2. The quarterly HVS is the most timely survey on households, but there are many questions about the accuracy of this survey. Overall this suggests that vacancies have declined significantly, and my guess is the homeownership rate is probably close to the bottom - and that the rental vacancy rate has bottomed.
There are more renters than any time since 1965 - More people are renting than at any other point in the past 50 years. In 2016, 36.6 percent of household heads rented their home, close to the 1965 number of 37 percent, according to a new report by the Pew Research Center based on data from the Census Bureau. Each month the Census Bureau surveys a nationally representative sample of households. The total number of U.S. households grew by 7.6 million over the past decade, Pew reported. However, the number of households headed by owners remained relatively flat, while households headed by renters grew by nearly 10 percent during the same time period. Rising home prices, lingering fears from the housing crash, and larger amounts of student debt are some of the reasons why many Americans see the appeal of renting, said Richard Fry, a senior researcher at Pew and one of the report's authors."There is some evidence that increased student debt has made it more difficult for households headed by young adults to become homeowners," Fry said.And millennials (those age 35 and younger) continue to be the most likely of all age groups to rent, Pew found. In 2016, 65 percent of households headed by young adults were renting, up 8 percentage points from 2006. Other reasons could be that young adults haven't accumulated enough wealth for a down payment on a house, Fry said. Also, owning a home inhibits moving, and young adults are the most likely age group to move, so they may prefer not to own just yet, he said. However, cautious renters may not be making the best decision for their long-term happiness. Renters' top regret was wishing they had bought instead of renting (41 percent), according to a recent Trulia survey.
MBA: Mortgage Applications Increase in Latest Weekly Survey - From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey Mortgage applications increased 0.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 21, 2017. ... The Refinance Index increased 3 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier to the lowest level since May 2017. The unadjusted Purchase Index decreased 2 percent compared with the previous week and was 8 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 4.17 percent from 4.22 percent, with points increasing to 0.40 from 0.31 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall well below 4%.The second graph shows the MBA mortgage purchase index. According to the MBA, purchase activity is up 8% year-over-year.
Median home values break $200,000 level in June: Zillow -- The national median home value was above $200,000 in June, breaking a barrier that was not reached during the housing boom. Zillow's Home Value Index for June was $200,400, up 7.4% over one year ago. During the height of the housing bubble over a decade ago, the median U.S. home value peaked at $196,600.
FHFA House Price Index: Real Index Level Last Seen in August 2007 - The Federal Housing Finance Agency (FHFA) has released its U.S. House Price Index (HPI) for May. Here is the opening of the report:– U.S. house prices rose in May, up 0.4 percent from the previous month, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI). The previously reported 0.7 percent increase in April was revised downward to reflect a 0.6 percent increase.The FHFA monthly HPI is calculated using home sales price information from mortgages sold to, or guaranteed by, Fannie Mae and Freddie Mac. From May 2016 to May 2017, house prices were up 6.9 percent.For the nine census divisions, seasonally adjusted monthly price changes from April 2017 to May 2017 ranged from -0.5 percent in the Middle Atlantic division to +1.0 percent in the West South Central division. The 12-month changes were all positive, ranging from +4.0 percent in the Middle Atlantic division to +8.7 percent in the Pacific 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.
Case-Shiller: National House Price Index increased 5.6% year-over-year in May -- S&P/Case-Shiller released the monthly Home Price Indices for May ("May" is a 3 month average of March, April and May prices). This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index. From S&P: The S&P Corelogic Case-Shiller National Home Price NSA Index Sets Record for Sixth Consecutive Months The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 5.6% annual gain in May, the same as the prior month. The 10-City Composite annual increase came in at 4.9%, down from 5.0% the previous month. The 20-City Composite posted a 5.7% year-over-year gain, down from 5.8% in April. Seattle, Portland, and Denver reported the highest year-over-year gains among the 20 cities. In May, Seattle led the way with a 13.3% year-over-year price increase, followed by Portland with 8.9%, and Denver overtaking Dallas with a 7.9% increase. Nine cities reported greater price increases in the year ending May 2017 versus the year ending April 2017. Before seasonal adjustment, the National Index posted a month -over-month gain of 1.0% in May. The 10-City Composite posted a 0.7% increase and 20-City Composite reported a 0.8% increase in May. After seasonal adjustment, the National Index recorded a 0. 2% month-over-month increase. The 10- City Composite remained stagnant with no month-over-month increase. The 20-City Composite posted a 0.1% month-over-month increase. All 20 cities reported increases in May before seasonal adjustment; after seasonal adjustment, 14 cities saw prices rise. “Home prices continue to climb and outpace both inflation and wages,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging. The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices. “For the last 19 months, either Seattle or Portland OR was the city with fastest rising home prices based on 12-month gains. Since the national index bottomed in February 2012, San Francisco has the largest gain.”
Home Prices Rose 5.6% Year-over-Year NSA in May, Sixth Record High --With today's release of the May S&P/Case-Shiller Home Price Index, we learned that seasonally adjusted home prices for the benchmark 20-city index were up 0.1% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 5.8% for the last twenty-seven months. Today's S&P/Case-Shiller National Home Price Index (nominal) reached another new high. The adjacent column chart illustrates the month-over-month change in the seasonally adjusted 20-city index, which tends to be the most closely watched of the Case-Shiller series. It was up 0.1% from the previous month. The nonseasonally adjusted index was up 5.7% year-over-year. Here is an excerpt of the analysis from today's Standard & Poor's press release.“Home prices continue to climb and outpace both inflation and wages,” says David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Housing is not repeating the bubble period of 2000-2006: price increases vary across the country unlike the earlier period when rising prices were almost universal; the number of homes sold annually is 20% less today than in the earlier period and the months’ supply is declining, not surging. The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices." [Link to source]The chart below is an overlay of the Case-Shiller 10- and 20-City Composite Indexes along with the national index since 1987, the first year that the 10-City Composite was tracked. Note that the 20-City, which is probably the most closely watched of the three, dates from 2000. We've used the seasonally adjusted data for this illustration.
Lean inventory fueling home-price gains in 20 U.S. cities - Steady price gains in 20 U.S. cities in May indicate that a tight supply of properties paired with increased demand is boosting home values, according to figures from S&P CoreLogic Case-Shiller on Tuesday. The 20-city property values index increased 5.7% year-to-year (the estimate was 5.8%). The national price gauge advanced 5.6% year-to-year. The seasonally adjusted 20-city index rose 0.1% month-to-month (the estimate was 0.3%). A shortage of listings is still behind the rapid appreciation of home prices, particularly in high-demand areas such as Seattle and Portland, Ore., where values have surpassed pre-recession peaks. Housing demand is supported by a solid labor market, steadily rising wages and low mortgage rates. While lofty asking prices are making it difficult for some Americans to become homeowners for the first time, they’re encouraging owners of more expensive properties to put their houses up for sale, as trade-up demand remains solid. “Home prices continue to climb and outpace both inflation and wages,” David Blitzer, chairman of the S&P index committee, said in a statement. “The small supply of homes for sale, at only about four months’ worth, is one cause of rising prices. New home construction, higher than during the recession but still low, is another factor in rising prices.” All cities in the index showed year-over-year gains, led by a 13.3% advance in Seattle, an 8.9% increase in Portland and a 7.9% gain in Denver. After seasonal adjustment, Seattle had the biggest month-over-month increase, at 0.9%, while New York posted a 0.6% decline. Home prices fell in six cities in May from the prior month. A separate report from the FHFA showed its home-price index climbed 0.4% in May after a revised 0.6% gain a month earlier.
Zillow Forecast: "June Case-Shiller Forecast: Rare Monthly Declines Expected" -- The Case-Shiller house price indexes for May were released yesterday. Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close. From Svenja Gudell at Zillow: June Case-Shiller Forecast: Rare Monthly Declines Expected Both the 10- and 20-city S&P Case-Shiller indices are expected to fall in June from May on a seasonally adjusted basis, declines that would mark just the third and second months, respectively, in the past five years in which the seasonally adjusted indices have fallen month-over-month.All three primary Case-Shiller indices grew at a slower or flat annual pace in May compared to the previous month, and Zillow’s Case-Shiller forecast predicts that slowdown continued into June. The 10- and 20-city indices are each expected to fall 0.1 percent from May (seasonally adjusted), with annual growth falling from 4.9 percent and 5.7 percent to 4.8 percent and 5.5 percent, respectively. Monthly growth in the U.S. National Index is expected to remain flat in June (seasonally adjusted) and grow 5.3 percent year-over-year, down from 5.6 percent annual growth in May.Zillow’s full forecast for May Case-Shiller data is shown below. These forecasts are based on today’s April Case-Shiller data release and the June 2017 Zillow Home Value Index. The June S&P CoreLogic Case-Shiller Indices will not be officially released until Tuesday, August 29. The year-over-year change for the Case-Shiller National index will probably be smaller in June than in May.
NAR: "Existing-Home Sales Retreat 1.8 Percent in June" --From the NAR: Existing-Home Sales Retreat 1.8 Percent in June Existing-home sales slipped in June as low supply kept homes selling at a near record pace but ultimately ended up muting overall activity, according to the National Association of Realtors®. Only 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, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month's decline, June's sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million). .. Total housing inventory at the end of June declined 0.5 percent to 1.96 million existing homes available for sale, and is now 7.1 percent lower than a year ago (2.11 million) and has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in June (5.63 million SAAR) were 1.8% lower than last month, and were 0.7% above the June 2016 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory decreased to 1.96 million in June from 1.97 million in May. 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. Inventory decreased 7.1% year-over-year in June compared to June 2016. Months of supply was at 4.3 months in June. This was slightly below the consensus expectations. For existing home sales, a key number is inventory - and inventory is still low. I
Existing Home Sales Slump In June - Weakest Summer Selling Season Since 2011 --On the heels of homebuilder optimism tumbling to 8-month lows in July, existing home sales slumped in June (down 1.8%, more than the 0.9% decline expected) to the second lowest SAAR this year. Existing home sales are now unchanged since September, but we note that average prices are up 6.5% YoY.Total existing-home sales , decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month's decline, June's sales pace is 0.7 percent above a year ago, but is the second lowest of 2017 (February, 5.47 million).Since rates surged, exisitng home sales have gone nowhere (but prices have risen).. The median existing-home price for all housing types in June was $263,800, up 6.5 percent from June 2016 ($247,600).Lawrence Yun, NAR chief economist, says the previous three-month lull in contract activity translated to a pullback in existing sales in June."Closings were down in most of the country last month because interested buyers are being tripped up by supply that remains stuck at a meager level and price growth that's straining their budget," he said."The demand for buying a home is as strong as it has been since before the Great Recession. Listings in the affordable price range continue to be scooped up rapidly, but the severe housing shortages inflicting many markets are keeping a large segment of would-be buyers on the sidelines."For context, this is the weakest summer selling season since 2011... a time when seasonally sales have tended to increase...
A Few Comments on June Existing Home Sales -- Mcbride - Inventory is still very low and falling year-over-year (down 7.1% year-over-year in June). Inventory has declined year-over-year for 25 consecutive months, although the pace of decline has slowed over the two months. I started the year expecting inventory would be increasing year-over-year by the end of 2017. That now seems unlikely, but still possible. In April, inventory was down 9.4% year-over-year, and in May, inventory was down 7.9% - and in June, down 7.1%. If that trend continues, inventory might be close to unchanged (or just down slightly) year-over-year by December. Inventory is a key metric to watch. 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 June (red column) were above June2016. (NSA) - and the highest for June since 2006.Note that sales NSA are now in the seasonally strong period (March through September).
June New Home Sales Inches Up - This morning's release of the June New Home Sales from the Census Bureau came in at 610K, up 0.8% month-over-month from a revised 605K in May. Seasonally adjusted estimates back to March were also revised. The Investing.com forecast was for 615K.Here is the opening from the report:Sales of new single-family houses in June 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 0.8 percent (±12.1 percent)* above the revised May rate of 605,000 and is 9.1 percent (±14.4 percent)* above the June 2016 estimate of 559,000.The median sales price of new houses sold in June 2017 was $310,800. The average sales price was $379,500. [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.
New Home Sales increase to 610,000 Annual Rate in June -- The Census Bureau reports New Home Sales in June 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 June 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 0.8 percent above the revised May rate of 605,000 and is 9.1 percent above the June 2016 estimate of 559,000." 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 increased in June to 5.4 months from 5.3 month in May. 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 June was 272,000. This represents a supply of 5.4 months at the current sales rate." 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
A few Comments on June New Home Sales --New home sales for June were reported at 610,000 on a seasonally adjusted annual rate basis (SAAR). This was close to the consensus forecast, however the three previous months were revised down. Still, overall, this was a decent report. Sales were up 9.1% year-over-year in June. This graph shows new home sales for 2016 and 2017 by month (Seasonally Adjusted Annual Rate). Sales were up 9.1% year-over-year in June. For the first six months of 2017, new home sales are up 10.9% compared to the same period in 2016. This was a strong year-over-year increase through June, 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 June 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. I expect existing home sales to move more sideways, and I expect this gap to slowly close, mostly from an increase in new home sales. However, this assumes that the builders will offer some smaller, less expensive homes. If not, then the gap will persist.
Big, bold … and broken: is the US shopping mall in a fatal decline? -- Twenty-five years ago this August, the Mall of America, America’s largest shopping mall, opened its many, many doors for business. The Minnesota mall is currently wrapping up a year of celebration at the dizzyingly vast temple to consumerism. It’s a celebration that comes, ironically, as America’s malls are dying. But not the Mall of America. Once the epicenter of American retail, malls are in crisis. Pictures of dead malls, their hollow shells left like abandoned sets for a George Romero zombie movie, are rapidly replacing pictures of decaying Detroit as the go-to image for dystopia USA. It has been three years since a major new shopping mall opened in the US, leading even some mall operators to speculate that the last one has already been built. Of the roughly 1,200 spread across the country, less than half are expected to be in operation five years from now. As usual, the internet gets the blame. The shift to online shopping has taken its toll on traditional mall anchors, such as Macy’s, JC Penney and Sears. But there are other issues. America has too much retail space and too many crappy malls. “It’s much less about technology than it is about overbuilding,” says Bruce Batkin, chief executive of Terra Capital Partners, a commercial real estate lender. The Mall of America is different and its survival points to what has gone wrong in retailing and where it is heading. It’s a shift that will have profound consequences.
Roombas have been mapping your homes for years, and that data’s about to be sold to the highest bidder -- Once a curious novelty for people who absolutely despise traditional vacuum cleaners, Roomba’s robotic vacuums are now offered in several models and price points. It would seem that the company is doing fairly well, but one of its most interesting — and potentially controversial — money-making strategies hasn’t even been implemented yet. A new report reveals that one of Roomba’s plays for the future involves using its fancy little cleaner bots as trojan horses which, while in the process of tiding up, will map your home’s layout and then send that information to the company to be sold to the highest bidder. As Reuters reports, Roomba maker iRobot is bullish on the prospect of selling what it learns about your home to whoever might want it. “There’s an entire ecosystem of things and services that the smart home can deliver once you have a rich map of the home that the user has allowed to be shared,” iRobot boss Colin Angle told Reuters. If that sounds more than a little creepy that’s because, well, it is, but companies pushing into the smart home market would most certainly be willing to pony up the dough for the data. Products like smart speakers, security monitors, high-tech thermostats, and many other gadgets could potentially benefit from knowledge of your home’s layout, but in order for iRobot to actually sell archives of the data, it would likely need to be anonymize — that is, scrubbed of any personally identifiable information and lumped in with countless others. Anonymized mapping data is still valuable, especially for huge companies like Amazon and Apple which sell at a large scale and could exploit trends they spot in collections of home maps. In order to offer more personalized or targeted information, iRobot would need to navigate some seriously treacherous privacy waters while also gaining permission from its users, which is anything but guaranteed.
Consumer Confidence Improved in July -- The latest Conference Board Consumer Confidence Index was released this morning based on data collected through July 14. The headline number of 121.1 was an increase from the final reading of 117.3 for June, a downward revision from 118.9. Today's number was above the Investing.com consensus of 116.5. Here is an excerpt from the Conference Board press release. “Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.” The chart below is another attempt to evaluate the historical context for this index as a coincident indicator of the economy. Toward this end, we have highlighted recessions and included GDP. The regression through the index data shows the long-term trend and highlights the extreme volatility of this indicator. Statisticians may assign little significance to a regression through this sort of data. But the slope resembles the regression trend for real GDP shown below, and it is a more revealing gauge of relative confidence than the 1985 level of 100 that the Conference Board cites as a point of reference.
Michigan Consumer Sentiment: July Final Continues to Slip -- The University of Michigan Final Consumer Sentiment for July came in at 93.4, down from the June Final reading of 95.1. Investing.com had forecast 93.1. Surveys of Consumers chief economist, Richard Curtin, makes the following comments: Consumer confidence remained largely unchanged at the same favorable level recorded at mid-month. The overall Sentiment Index has declined by 5.1 Index-points since the January peak, which was the highest figure in a dozen years. The relatively small decline still left the Sentiment Index higher in the first seven months of 2017 than in any other year since 2004. The size of the decline was tempered by record favorable views of Current Economic Conditions, which rose to its highest level since July of 2005. These gains were mainly due to improvements in consumers' personal finances. At the same time, consumers expressed less optimism about future prospects for the overall economy and for their own personal finances. The Expectations Index fell from 90.3 in January to a still positive 80.5 in July; if it continues to decline by another 10 points in the second half of 2017, the loss would become more worrisome. Moreover, while current conditions were judged strictly on the performance of the economy, expectations continue to be significantly influenced by partisanship: the difference on the Expectations Index between Democrats and Republicans was 45 Index-points (63.7 versus 108.7); among Independents, in contrast, the Expectations Index was exactly equal to the weighted difference between the partisan extremes (80.5). Importantly, the partisan gap has narrowed in the past six months, mostly due to Republicans tempering their optimism. The recent declines among Republicans were somewhat predictable, but the maintenance of extreme pessimism among Democrats is more surprising. [More...] See the chart below for a long-term perspective on this widely watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
For The First Time, Americans Spend More On Eating Out Than On Food At Home --that Americans remain the most obese nation in the world, and as McDonalds' blockbuster results yesterday showed, American consumers are increasingly spending more on food away from home. As shown in the chart below, spending on food at home and food away from home have been converging over the past 60 years, with traditional home-cooked family meals on the decline. In fact, according to the USDA, for the first time ever, the amount spent eating out has surpassed what US consumers spend on food at home. Here are some other observations on US feeding habits via Bank of America:
- Consumers are eating alone more often and more "on demand". 47% of US meals are consumed alone and 43% of US consumers say they enjoy eating alone. Given how busy households and consumers have become, it is becoming more common to combine eating with catching up on news/social media, or to consume on the go. It also appears that the trend is for less planning for eating occasions. Millennials account for 40% of those who consume food within an hour of purchase. This is known as "immediate consumption" and accounts for about 15% of all meals. And 65% of instant consumables are eaten at home (source: Hartman Group/Forbes).
- Consumers are willing to pay a premium for increasing levels of convenience and on demand. Globally, on average, they are willing to pay 14% more for online grocery delivery, 25% more for meal kits, 30% more for prepared meals and 55% more for restaurant take-outs (source: Lux Research).
Chemical Activity Barometer increased slightly in July - This appears to be a leading indicator for industrial production. From the American Chemistry Council: Chemical Activity Barometer Notches Gain: The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council (ACC), ticked up 0.1 percent in July following a flat reading in June and a 0.2 percent gain in May. Gains during the second quarter averaged 0.2 percent following average gains of 0.5 percent during the first quarter. Compared to a year earlier, the CAB is up 3.6 percent year-over-year, an easing from recent year-over-year gains. 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. This graph shows the year-over-year change in the 3-month moving average for the Chemical Activity Barometer compared to Industrial Production. It does appear that CAB (red) generally leads Industrial Production (blue).
Headline Durable Goods Orders Surge in June - The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders: New orders for manufactured durable goods in June increased $14.9 billion or 6.5 percent to $245.6 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.1 percent May decrease. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders increased 6.7 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $14.6 billion or 19.0 percent to $91.6 billion. Download full PDF The latest new orders number at 6.5% month-over-month (MoM) surprised the Investing.com consensus of 3.0%. The series is up 16.1% year-over-year (YoY). If we exclude transportation, "core" durable goods came in at 0.2% MoM, which was below the Investing.com consensus of 0.4%. The core measure is up 6.8% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is unchanged MoM and up 5.6% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.1% MoM and up 5.6% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex.
Core Durable Goods Orders Disappoint But Aircraft Orders Surge 131% --A huge upside surprise for durable goods orders (+6.5% MoM vs +3.9% MoM)... This was thebiggest surge in DurGoods since July 2014's record Boeing order also screwed with the data...Dominated by a 19% spike in transportation (with non-defense aircraft orders up 131.2% MoM) Up from $11bn to $25.3bn... New orders for manufactured durable goods in June increased $14.9 billion or 6.5 percent to $245.6 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.1 percent May decrease. Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders increased 6.7 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $14.6 billion or 19.0 percent to $91.6 billion. However, away from this unsustainable surge in orders, Core Durable Goods Orders disappointed (+0.2% vs +0.4% exp) and Capital Goods New Orders Nondefense Ex Aircraft & Parts fell 0.1% - the biggest drop since Dec 2016.
Manufacturing Rebound Sends US PMI To 6-Month High (As European PMI Hits 6-Month Low) -- Following Europe's PMI slump to six-month lows this morning, US Composite PMI rose to a six-month high, with Manufacturing surprising to the upside (4-mo high). The stronger PMI reading was supported by accelerated growth in output, new orders, employment and stocks of inputs during July, but the principal weak spot in the economy remained exports, with foreign goods orders dropping. As 'hard' US economic data has drastically disappointed over the last three months,Services (higher) and Manufacturing (lower) based on Markit's PMI survey have diverged markedly until today's July print which saw manufacturing catch up...Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“The July PMI surveys show an economy gaining growth momentum at the start of the third quarter, enjoying the strongest monthly improvement in business activity since January.“Most encouraging was an upturn in new order inflows to the second-highest seen over the past two years, which helped push the rate of job creation to the highest so far this year, indicative of non-farm payrolls growing at a rate of around 200,000.“The principal weak spot in the economy remained exports, with foreign goods orders dropping – albeit only marginally – for the first time since last September, often blamed on the strength of the dollar.”“The overall rate of expansion remains modest rather than impressive. The surveys are historically consistent with annualized GDP growth of approximately 2%, but the signs are that growth could accelerate furt her in coming months.
Richmond Fed Manufacturing: July Composite Index Remains Upbeat -- Today the Richmond Fed Manufacturing Composite Index increased 3 points to 14 from last month's 11. Investing.com had forecast 4. Because of the highly volatile nature of this index, we include a 3-month moving average to facilitate the identification of trends, now at 9.3, indicates expansion. Seasonal adjustment factors were recalculated to better reflect current economic trends and the entire series was revised. The complete data series behind today's Richmond Fed manufacturing report, which dates from November 1993, is available here. Here is a snapshot of the complete Richmond Fed Manufacturing Composite series.
Kansas City Fed: Regional Manufacturing Activity "Expanded Moderately" in July From the Kansas City Fed: Tenth District Manufacturing Activity Expanded Moderately The Federal Reserve Bank of Kansas City released the July 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 moderately with solid expectations for future activity. “We’ve now seen four months of steady gains following more rapid growth in factory activity earlier this year,” said Wilkerson. “Firms overall seem confident that moderate growth will continue.” The month-over-month composite index was 10 in July, down slightly from 11 in June but up from 8 in May. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Factory activity increased moderately at non-durable goods plants, particularly for chemicals and plastics, while durable activity moderated somewhat. Month-over-month indexes were mixed. The production index tumbled from 23 to 4, and the shipments index fell into negative territory for the first time since August 2016. Conversely, the employment index remained solid, while the new orders index rose modestly, and the order backlog index also increased but remained negative.The Kansas City region was hit hard by the sharp decline in oil prices, but activity started expanding last year when oil prices increased. Now growth is moderate with oil prices mostly moving sideways.
Foxconn To Get $230,000 In Incentives For Every Wisconsin Job Created -- To much fanfare, President Donald Trump on Wednesday announced that Taiwanese electronics giant Foxconn, best known for making the iPhone, will build a new plant producing LCD panels in Wisconsin that will bring thousands of jobs to the state. On the surface it's a great deal: in what's being called the largest economic development project in state history, Foxconn plans to build a $10 billion plant that will eventually employ as many as 13,000 people, according to the White House and Gov. Scott Walker. The plant is expected to open in 2020 and be on a 20 million square-foot campus on at least 1,000 acres, a campus Walker's office has dubbed "Wisconn Valley" according to the Wisconsin State Journal. The plant could be the first of several facilities the company intends to build in the United States and will start with 3,000 employees, a staff that could eventually grow by 10,000.Furthermore, Walker's office projected the project would create at least 22,000 "indirect and induced jobs" throughout Wisconsin and will generate an estimated $181 million in state and local tax revenues annually, including $60 million in local property taxes.In making the announcement, Trump was near-euphoric: “This is a great day for American workers and manufacturers and for everybody who believes in the concept and the label ’Made in the USA,” the president said. “The construction of this facility represents the return of LCD electronics and electronic manufacturing to the United States, the country that we love, that’s where we want our jobs,” he continued.And while superficially the agreement is a slam dunk for both Wisconsin, and US workers - especially in a high-tech sector that has over the years shifted to China - reading between the lines of the deal makes one wonder who is getting the best deal. While a White House official said there will be no new federal programs to provide new incentives for Foxconn to build in Wisconsin, he added that the company could be eligible for existing incentives offered by the federal government.What subsidies? The "incentive package" contemplated as part of the Foxconn deal will total $3 billion over 15 years, including $1.5 billion in state income tax credits for job creation; up to $1.35 billion in state income tax credits for capital investment and up to $150 million for the sales and use tax exemption. In other words, just over $230,000 for each new job that Foxconn may (or may not) create.
Amazon to seize the land of freed slaves’ descendants to lay power lines -- Local residents inform the International Amazon Workers Voice that Amazon is attempting to seize 50 acres of land owned by elderly working class descendants of slaves in Northern Virginia, pave over the residents’ homes, and build power lines. The soil that Amazon plans to cover with asphalt contains the sweat of slaves and the blood of Civil War soldiers. The residents’ ancestors, who worked the land as slaves, took possession of these plots after being freed by the Emancipation Proclamation and liberated by the Union Army during the American Civil War. American capitalism has come full-circle: the government is stealing land from the descendants of slaves and giving it to one of the world’s most powerful corporations. The homeowners have been there for generations. Many of the properties were purchased by freed slaves. After emancipation, the slaves that worked that area were allowed to purchase property. A number of the property owners are descendants of those freed slaves.” Last month, Amazon subsidiary VAData, working in collusion with local government agencies and utility company Dominion Virginia Power, announced plans to construct 230,000 volt power lines running through the semi-rural community of Carver Road just outside of Gainesville, in order to power nearby internet data centers.The power lines will also pave over parts of the Manassas Civil War battlefield area. The area in which the community is located, about an hour west of Washington D.C., was the site of the First and Second Battles of Manassas, two key battles of the Civil War of 1861-65. Local reports show that the power lines will be paid for by utility company customers. The Prince William County Board of Supervisors rejected an alternative route which would have gone through a wealthy area.
Maybe We’ve Been Thinking About the Productivity Slump All Wrong --American businesses are doing a terrible job at making their workers more productive.Productivity growth is the weakest it has been since the early 1980s — only 0.8 percent a year over the last half a decade, compared with 2.3 percent on average from 1947 to 2007. This is the root cause of slow growth in both G.D.P. and worker pay.At least, that is the standard way of thinking about productivity and its relationship to the economy. In a mainstream view, productivity is a kind of magic force that helps explain rising output. New labor-saving inventions come along or new management practices are taken up that miraculously allow companies to produce more output with fewer hours of work.You can’t really predict when and how those innovations will arrive, in this view. Henry Ford starts using a moving assembly line. Sam Walton perfects the just-in-time supply chain. Easy-to-use word processors result in fewer businesspeople who need secretaries. Voilà, the productive capacity of the nation rises, along with incomes and living standards.But what if this is the wrong way of thinking about it? What if productivity growth is not so much an external force that proceeds in random fits and starts, but is rather deeply intertwined with the overall state of the economy and labor market?It’s a chicken or egg problem: Does low productivity cause slow growth, or does slow growth cause low productivity? The second possibility is the provocative argument of a new paper published Tuesday by the Roosevelt Institute, a liberal think tank. The paper argues that the United States economy is not actually closing in on its full economic potential and has plenty of room for continued growth — so long as the Federal Reserve doesn’t put on the brakes of the expansion prematurely.J. W. Mason, the author of the report, argues that soft productivity growth reflects not some unlucky dearth of new innovations, but rather is a consequence of depressed demand for goods and services and a slack labor market that has depressed wages. Maybe if the labor market were tighter and wages were rising faster, it would induce companies to invest more heavily in new labor-saving innovations.
Weekly Initial Unemployment Claims increase to 244,000 -- The DOL reported: In the week ending July 22, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 233,000 to 234,000. The 4-week moving average was 244,000, unchanged from the previous week's revised average. The previous week's average was revised up by 250 from 243,750 to 244,000. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
Another year of congressional inaction has further eroded the federal minimum wage -- This week marks the eighth anniversary of the last time the federal minimum wage was raised, from $6.55 to $7.25 on July 24, 2009. Since then, the purchasing power of the federal minimum wage has fallen by 12.5 percent as inflation has slowly eroded its value. However, this decline in the buying power of the minimum wage over the past eight years is not even half the overall decline in the minimum wage’s value since the late 1960s. As the figure below shows, at its high point in 1968, the federal minimum wage was equal to $9.90 in today’s dollars. That means that workers at the minimum wage today are paid roughly 27 percent less than their counterparts almost 50 years ago. Measuring the minimum wage against changes in prices is only one way to think of where it could be today. Given growth in the economy and improvements in labor productivity over the past half century, the minimum wage could have been raised to a point considerably higher than its 1968 inflation-adjusted value. As the middle line in the figure shows, if the minimum wage had been raised since 1968 at the same growth rate as average wages of typical U.S. workers, it would be $11.62 today. (We measure wages here by changes in average hourly earnings of nonsupervisory production workers, a group that comprises roughly 80 percent of all U.S. workers and excludes highly-paid supervisors and executives.)
Puerto Rico’s “Voluntary” Restructuring of GDB Bonds - Brad Setser - Puerto Rico’s Oversight Board didn’t object to the terms of Puerto Rico’s proposed restructuring of the Government Development Bank bonds (and selected deposits) so it looks like the GDB restructuring will go forward if the deal gets enough creditor support.I have mixed feelings on this.On one hand, the proposed restructuring would make of the use of the “voluntary” restructuring tool created by PROMESA (Title VI). This tool was created by statute not contract. It was designed to mimic the “aggregated” voting provisions now used in most New York and English law international sovereign bond issuance (the ICMA standard clauses) that allow the votes of different bonds to be combined—under defined circumstances—into a single up or down vote on the restructuring terms. But fundamentally it is a statutory restructuring mechanism, not a contractual mechanism—not unlike the mechanism used to restructure Greek law bonds back in 2014. I have a modest personal stake in the success of the voting mechanism—I participated in the working group that helped develop the aggregation clause (for more of the backstory see Mark Sobel's account), and I was part of the Treasury working group that helped develop the first version of the voting mechanism that ultimately became Title VI. I consequently hope the legal mechanics of aggregated voting work smoothly, and that the creation by statute of a simplified voting mechanism to help address hard cases where contractual voting terms are inadequate creates a precedent of sorts. Aggregated voting is actually far better suited for sovereigns with lots of equally ranked, homogenous debt than for Puerto Rico and its highly fragmented debt stock: there is a reason why most of the Puerto Rico’s debt will be restructured through the more formal Title III process. But I am not a fan of the actual restructuring terms that are being put up to vote.
Amid the Blaring Headlines, Routine Reports of Hate-Fueled Violence -- Last Wednesday, July 19, was something of a busy news day. There was word North Korea was making preparations for yet another provocative missile test. The Supreme Court, in its latest ruling in the controversial travel ban case, said that people from the six largely Muslim countries covered by the immigration enforcement action could enter the U.S. if they had a grandparent here, […] The day also produced its share of what, sadly, has come to qualify as routine news: A Muslim organization in Sacramento, California, received a package in the mail that included a Koran in a tub of lard; police in Boise, Idaho, identified a teenage boy as the person likely responsible for scratching racist words on a car; in Lansing, Michigan, police launched a search for a suspect in the case of an assault against a Hispanic man. The victim had been found with a note indicating his attacker had been motivated by racial animus.The specter of hate incidents and crimes — some of them fueled by the nastiness of the 2016 presidential campaign — felt white hot months ago. The issue remained high-profile as several horrific murders — a South Asian immigrant slain in Kansas City, a homeless black man butchered near Times Square in New York — generated outrage and national news coverage. Scattered among the news items on that single July day — captured in local write-ups and wire-service briefs — was the attempted murder of a black employee at an auto parts store in Desert Hot Springs, California, an attack during which the shooter repeated racial epithets; the menacing of a mosque in Georgia, where repeated telephone threats warned that “white people are going to kill you”; an Indian-American Ph.D. candidate in California had her car’s windshield shattered by a rock as she drove to work, glass from the window embedding in her skin and hair. “Go back to your own country,” the assailant had screamed.
Americans are serving longer prison sentences than ever — and it all comes back decades-old ‘tough-on-crime’ policies : Measuring the human cost of the tough-on-crime policies of the 1980s and 90s has never been a simple task. Researchers have tried to show the impact by measuring how long prisoners spent behind bars before they were released. They found that time served has increased over the past decades. But that approach skips a whole group: People whose incarceration has been going on so long they have yet to get out. Now, a new study by the Urban Institute is trying something different. The nonprofit counted how long people currently in prison — many of whom still have long sentences to serve — have been there. Examining data from 43 states and Washington, D.C., the organization's Justice Policy Center found that the average number of years in prison for the incarcerated has grown considerably in recent decades. In Michigan, for example, those who have been in prison the longest—the top 10% —had served an average of 10 years in 1989. By 2013, the longest-serving prisoners had been incarcerated for 26 years. For the states that had data from 2000 through 2014, the average time served grew by about 37%. For the 10% who have been in prison the longest, most of whom received the harshest sentences for violent crimes, their time served rose by about 42%. Strikingly, the study found that nearly two out of five of those serving the longest terms were sentenced while they were still young — before age 25.
Brazilians funneled as “slaves” by US church, ex-members say — When Andre Oliveira answered the call to leave his Word of Faith Fellowship congregation in Brazil to move to the mother church in North Carolina at the age of 18, his passport and money were confiscated by church leaders — for safekeeping, he said he was told. Trapped in a foreign land, he said he was forced to work 15 hours a day, usually for no pay, first cleaning warehouses for the secretive evangelical church and later toiling at businesses owned by senior ministers. Any deviation from the rules risked the wrath of church leaders, he said, ranging from beatings to shaming from the pulpit. “They trafficked us up here. They knew what they were doing. They needed labor and we were cheap labor — hell, free labor,” Oliveira said. An Associated Press investigation has found that Word of Faith Fellowship used its two church branches in Latin America’s largest nation to siphon a steady flow of young laborers who came on tourist and student visas to its 35-acre compound in rural Spindale. Under U.S. law, visitors on tourist visas are prohibited from performing work for which people normally would be compensated. Those on student visas are allowed some work, under circumstances that were not met at Word of Faith Fellowship, the AP found. On at least one occasion, former members alerted authorities. In 2014, three ex-congregants told an assistant U.S. attorney that the Brazilians were being forced to work for no pay, according to a recording obtained by the AP. “And do they beat up the Brazilians?” Jill Rose, now the U.S. attorney in Charlotte, asked. “Most definitely,” one of the former congregants responded. Ministers “mostly bring them up here for free work,” another said. Though Rose could be heard promising to look into it, the former members said she never responded when they repeatedly tried to contact her in the months after the meeting. .
Tennessee jails have been shortening sentences for inmates who get vasectomies or birth control - Inmates in Tennessee can get up to 30 days cut from their jail time — on the condition that they agree to get a vasectomy or a birth control implant. A county in rural Tennessee started a program that offers inmates who get a vasectomy or insert a contraceptive device into their body with a reduced jail time sentence, NewsChannel 5 reports. The program has been called into question both by local district attorneys and the ACLU. " Offering a so-called 'choice' between jail time and coerced contraception or sterilization is unconstitutional," the civil rights organization said in a statement.White County jails have been offering this option to inmates since May 15, when General Sessions Judge Sam Benningfield signed an order offering those who agree up to 30 days cut off their sentence. Already, 32 women have received the implant while 38 men are waiting to get their vasectomies done.In an interview with the NewsChannel 5 TV station, Benningfield said that the order was meant to discourage those with drug offenses and extensive criminal records from conceiving children they cannot support."I hope to encourage them to take personal responsibility and give them a chance, when they do get out, to not to be burdened with children," he said. But District Attorney Bryant Dunaway said that offering such rewards for people to limit their ability to have children was unethical and perhaps even illegal.
The Return Of Eugenics? Tennessee Judge Issues Sterilization Program For Inmates - A Tennessee judge is gaining national media attention for his unique incentive offered to inmates upon sentencing: convicts can undergo a free taxpayer funded sterilization procedure and get a 30 day reduction in jail time. Dozens have already taken advantage of the program since Judge Sam Benningfield of White County signed a standing order in May which offers vasectomies for men and a less permanent birth control implant, called Nexplanon, for women. Currently, 38 male and 32 female inmates are signed up for the program which the county district attorney is now seeking to get shut down. Judge Benningfield described the arrangement's purpose as "breaking a vicious cycle of repeat offenders who constantly come into his courtroom on drug related charges, subsequently can’t afford child support and have trouble finding jobs." The Tennessee Department of Health has reportedly given its approval for the local county program, which is now receiving fierce push back at the local and national levels, prompting a statement from the ACLU, which called an environment of coerced or legally pressured contraception and sterilization "unconstitutional" as a violation of basic individual rights. White County District Attorney Bryant Dunaway has instructed his staff of prosecutors not to enter into any agreement related to Benningfield's program, and told local Channel 5 News that, "It’s comprehensible that an 18-year-old gets this done, it can’t get reversed and then that impacts the rest of their life." Local news presented the judge as innovative and benevolent, merely looking out for the community's interests, yet the endeavor is really nothing new. It actually hearkens back to a dirty little secret of the Progressive Era in America which rarely makes it into school textbooks: states once forced mass sterilization upon tens of thousands of citizens deemed "unfit" to produce families in a nation wide Eugenics movement that Hitler himself learned from.
Jury Sentences Man to 137 Years in Jail for Stealing Tires - In America, one can fatally shoot an unarmed black teenager without fear of repercussion, but steal expensive property and risk a century behind bars. Proving once again how little black lives matter compared to pricey inanimate objects, a Virginia jury has sentenced Jason Brooks to 137 years for repeatedly stealing tires and rims over the past year. Brooks, who was tried in Loudoun County, reportedly faces similar charges in Maryland and New Jersey. According to the Loudoun Times Mirror, reports of Brooks’ alleged crimes began in 2016. Multiple owners of trucks and luxury cars told police that they awoke in the morning to find their vehicles, which were parked in their driveways, propped up on cinder blocks with tires and rims removed. The car owners Brooks allegedly stole from live in one of the most affluent areas of the U.S. According to Wikipedia, Loudoun County’s median household income was $117,876 in 2012. The site notes that “since 2008 the county has been ranked first in the United States in median household income among jurisdictions with a population of 65,000 or more.” Brooks was found guilty of “six counts of grand larceny, six counts of larceny with intent to sell, three counts of destruction of property and three counts of tampering with an automobile.” The jury recommended he receive a sentence of “132 years in prison, 63 months in jail and ordered to pay $6,000 in fines.”
More on Police Shootings and Race -- Mike Kimel - In my last post, I linked to a post by Peter Moskos noting that:People, all people, are 1.6 times more likely, per capita, to be shot and killed by police in states that are less than 10 percent black compared to states more than 10 percent African American. Blacks are still more likely than whites, per capita to be shot overall. But this ratio (2.6:1) doesn’t change significantly based on how black a state is. For both whites and blacks, the likelihood of being shot by police is greater in states with fewer blacks. And the difference is rather large. There are seven states less than two percent black. In 2015 and 2016, zero blacks were shot and killed in Maine, New Hampshire, Utah, Vermont, Wyoming, Idaho, and Montana. But if you think cops don’t shoot people in these states, you’re wrong. Compared to the four states with the highest percentage of African-American (Mississippi, Louisiana, Georgia, and Maryland are more than 30 percent black), the overall rate of police-involved killings in states with few blacks is higher. And this is despite a lower rate of overall violence. It seems an odd result, so I have given it a bit of thought. I think I know what is happening and will try to provide a bit of an explanation over a few posts. I will start by noting that this is what the homicide rate looks like by state when put against the rate of killings by police:
Betsy DeVos: Trump’s illiberal ally seen as most dangerous education chief ever-- Ivanka Trump, wearing a blue lace dress, beamed, hugged, high-fived and took a group selfie. Betsy DeVos, the education secretary, smiled and chatted with the boys and girls too. The education secretary, who has four children and five grandchildren, did everything expected of her, but could not help looking a little stilted and joyless next to Ivanka who – even as her husband, Jared Kushner, was testifying to the House intelligence committee about Russia – was easy and ebullient. But while the Trumps steal the limelight and consume attention on issues from Russia to healthcare, it is DeVos, America’s 11th education secretary, who is viewed by many in the sector as its most dangerous and destructive since the post was created by Jimmy Carter in 1979. DeVos, a devout Christian, stands accused of quietly privatising schools, rescinding discrimination guidelines and neutering her own department’s civil rights office. Along with the attorney general, Jeff Sessions, she is said to be at the tip of the spear of Trump’s illiberal agenda. Richard Kahlenberg, a senior fellow at the Century Foundation thinktank in Washington, said: “There’s been inadequate attention paid to the ways in which DeVos is rolling back civil rights protections. There would be more outcry if there wasn’t so much to be outraged about on a million other issues every day as well.”What DeVos – a 59-year-old entrepreneur, philanthropist and former chair of the Michigan Republican party – lacks in expertise or charisma, she makes up for in money, something always guaranteed to impress the property tycoon Trump. Her billionaire family has been active in the Republican party for decades, especially as donors bankrolling candidates. Her husband, Dick, is an heir to the Amway direct sales fortune while her brother, Erik Prince, is the founder of Blackwater, a private security contractor notorious for its operations in Iraq. DeVos – who once called traditional public school districts a “dead end” – is accused of defunding and destabilising public education in Michigan by bankrolling school choice initiatives. Now, to the chagrin of teachers’ unions, she is trying to apply the same ideas to the nation, championing privately run, publicly funded charter schools and voucher programmes that enable families to take tax dollars from the public education system to the private sector.
Congress Poised to Fund Libraries, Save the NEH and NEA --The budget battle is a long way from over, but so far Congress appears not to share President Trump’s desire to eliminate the Institute of Museum and Library Services, or the National Endowments for the Humanities, or the Arts. On Wednesday, the full House Appropriations Committee voted to approve FY2018 funding for libraries. By a 28-22 margin, the committee approved the Labor, Health and Human Services, and Education (LHHS) funding bill, which proposes roughly $231 million for the Institute of Museum and Library Services (IMLS)—including $183.6 million for Library Services and Technology Act (LSTA) programs, and $27 million for the Department of Education’s Innovative Approaches to Literacy (IAL) program—essentially at 2017 funding levels.A post on the ALA Washington Office’s District Dispatch e-newsletter, said the “successful and extremely important" full Appropriations Committee vote represents another "major milestone" in the ALA’s Fight for Libraries! Campaign—but acknowledged there are hurdles still to come. “The game is certainly not over,” ALA officials stressed, urging librarians and library supporters to keep the pressure on their local legislators. “After tens of thousands of library advocates’ emails, tweets, and calls, Congress has heard the library community’s support for IMLS, LSTA and IAL funding loudly and clearly.” In addition to saving the IMLS, the LHHS bill includes level funding for the Corporation for Public Broadcasting. However, it funds the Department of Education (DOE) at $66 billion—a cut of $2.4 billion from 2017, which includes the elimination of some important library-related programs, including the DOE’s Striving Readers program—which ALA officials said they would work to restore.
SHOCKER: Colleges Stop Insane Price Increases When Congress Caps Student Loans --America’s colleges and universities have finally stopped their practice of annually gouging students with price increases for tuition, fees and room and board — to the accumulated tune of a growth rate of 400 percent in the last three decades. Labor Department statistics collected by The Wall Street Journal show that aggregate tuition increases in 2017 rose 1.9 percent in 2017. This figure accords with the overall rate of U.S. inflation. From 1990 to 2016, college tuition costs had increased at an average rate of 6 percent annually, which was more than twice the overall inflation rate for the same period.This year’s steep decline in college cost increases has many causes. One cause of the decline is the decision by Congress to stop raising the maximum amount of federally-subsidized student loans which college students can borrow to finance their educations. Congress has not increased this maximum amount since 2008, the Journal notes. Subsidies cause the price of any good or service to rise. College administrators continually raised prices year after year — and decade after decade — precisely because the federal government generously subsidized those price increases with more and more student loans. Administrators responded rationally to the government’s allowance of bigger college loans by raising prices for college. Now that the federal government has kept maximum borrowing rates the same for nearly a decade, college administrators have responded to the new economic reality by limiting price increases. Other factors causing colleges to rein in their prices are societal and demographic.
Student loan borrowers, herded into default, face a relentless collector: the U.S. -Today, 11 percent of the $1.325 trillion of federal student loans outstanding is severely delinquent or in default, higher than the mortgage default rate at the peak of the foreclosure crisis in 2010, according to data from the Federal Reserve Bank of New York. Some of these debtors are deadbeats, of course, unwilling to make payments they can afford. But many are borrowers of limited means who ended up in default unnecessarily, after Navient and the DOE’s other servicers steered them away from affordable repayment plans and into options that reduce the servicers’ costs, according to state and federal investigators and regulators, consumer advocates and a growing number of lawsuits and complaints filed against loan servicers. The defaulted borrowers then become targets of the DOE’s debt collectors. These firms, some of them owned by the loan servicers, wield the federal government’s broad powers to garnish the wages of borrowers, as well as parents and grandparents who co-signed the loans. When wages are insufficient to garnish, the DOE can have the Treasury Department withhold tax refunds and reduce Social Security payments. Since the summer of 2015, student loan servicers and private debt collectors have garnished about $3 billion in wages, a Reuters review of federal data shows. And last year, the DOE’s collections through “Treasury offsets” — tax refund seizures and Social Security benefit reductions — totaled $2.6 billion, up from $2.2 billion in 2015. Since 2009, the government has used the tools at its disposal to claw back at least $15.2 billion. Default, which usually occurs when a borrower hasn’t made a payment for 270 days or more, can make it only harder for a debtor to regain financial stability. It can trash credit scores, scaring off potential employers. It can disqualify debtors for auto loans, apartment rentals, utilities and even cellphone contracts. In about 20 states, student loan borrowers who default can lose their driver’s and professional licenses. “We treat struggling student loan borrowers the same as deadbeat parents and tax cheats,” said Seth Frotman, the student loan ombudsman of the federal Consumer Financial Protection Bureau (CFPB). “Even gambling addicts have more protections.”
CalPERS Board Uncomfortable With Staff’s “Fire, Aim, Ready” Plan to Create Unaccountable Private Equity Vehicle - Yves Smith - Last week, at an offsite retreat, CalPERS staff and board held a full day workshop on options for CalPERS’ investment management, with most of the session devoted to private equity. However, this set of presentations differed starkly from the November 2015 private equity workshop, the last occasion when staff gave the board a strategic overview of this investment program. While the 2015 session had a clear aim of defending CalPERS’ private equity program, it also provided a great deal of information. In addition, there appeared to be a genuine effort to educate the board, even if the education had an obvious bias.By contrast, the centerpiece of this board meeting was a star-studded panel, Larry Sosini, Sandra Horbach of Carlyle, Mark Wiseman of BlackRock and Mario Giannini of Hamilton Lane, discussing of possible private equity business models. If you listened carefully to the speakers, you could hear them more than once acknowledge that CalPERS’ proposed approach was backwards: you make your strategic choices first, then settle on the mix of business models based on those decisions, not the other way around. But if you understood the real game, niceties like developing a bona fide strategy were beside the point. The real job of the brand-name experts was to legitimate the staff’s plan to set up an independent company to make private equity investments “run as a business.”Thus CalPERS and its private equity industry allies saluted the idea that this new entity would operate at arm’s length without providing a justification save the assumption it would be easier to attract managerial “talent”. As we’ll discuss at greater length in our next post, there are reasons to question this view.
Why CalPERS’ Scheme for an “Independent” Private Equity Entity Is the Wrong Solution to the Problem of Weak Skills --Yves Smith - As we discussed yesterday, at a board retreat last week, CalPERS’ staff presented the idea of forming an “independent” entity with its own board and staff to make private equity investments. It may seem odd that we are criticizing this idea. After all, we’ve been advocating for some time that CalPERS needs to find ways to reduce the fees it is paying to private equity firms, given how much they take out of gross returns at a time when private equity hasn’t been and isn’t expected to deliver enough in the way of net returns to justify its extra risks. It would also be desirable for CalPERS to get more control over its own destiny in light of widespread abuses by private equity firms, as demonstrated by a raft of SEC enforcement actions, when CalPERS and other limited partners do not appear to have confronted any general partner about misconduct.1Our beef is that while the idea of finding ways of making more direct investments and reducing the role of the private equity middleman is sound, the way that CalPERS is proposing to go about it, even at a high concept level, is very poorly thought out and likely to produce bad results. And separately, it’s disturbing to see staff yet again presenting the board with a fait accompli with no stated rationale and glaring inconsistencies with other initiatives, while insulting the board’s intelligence by pretending to involve it in the process.
Something Big, Bad And Ugly Is Taking Place In The U.S. Retirement Market - While the highly inflated value of the U.S. Retirement Market reached a new high this year, something is seriously wrong when we look behind the scenes. Of course, Americans have no idea that the U.S. Retirement Market is only a few steps from falling off the cliff, because their eyes are focused on the shiny spinning roulette wheel called the Wall Street Stock Market.Yes, everyone continues to place their bets, hoping and praying that they will win it big, so they can retire in style. Unfortunately, American gamblers at the casino have no idea that the HOUSE is out of money. The only thing remaining in their backroom vaults is a small stash of cash and a bunch of IOU’s and debts.According to the ICI – Investment Company Institute, the U.S. Retirement Market hit a new record $26.1 trillion in the first quarter of 2017: This new record high in U.S. Retirement assets is most certainly a good moral booster for Americans. As their retirement assets continue to increase, this provides them a wonderful incentive to fork over more of their hard-earned monthly income to feed the DARK HOLE I label the U.S. Retirement PAC-MAN Monster. Regrettably, Americans have no idea that their monthly retirement contributions are not being saved or stored in a nice gold vault, rather they are being used to pay the lucky slobs who retired before them Now, when I say SLOBS or POOR SLOBS, I am not being derogatory. However, I am using the word as a Wall Street Banker would label those they prey upon. Regardless, as the U.S. Retirement Market continued higher over the past several years, the amount of net contributions have gone into negative territory. As I have mentioned before, this is a beginning sign of a Ponzi Scheme in its last stages. In my previous article, WARNING: U.S. Ponzi Retirement Market In Big Trouble, Protect With Precious Metals, I posted the following chart:
Fix the Debt Wants to Save Social Security But Why? - I received an email a few days ago from Chris Dreibelbis, Fix the Debt, purporting to explain “why the Social Security Trustees urge action.” Dreibelbis says, “The newest report forecasts that Social Security’s combined trust fund will run dry by 2034. At that point, all recipients will see a 23% cut in benefits. For example a typical person born in 1990 … will see a cut of over $160,000 dollars in scheduled lifetime benefits.” To check this, I assumed that person would pay FICA taxes on income equal to 12.4% of the average income each year from 2020 through 2054. I looked at Table V.C7 (Trustees Report p150} for a person who obtains age 65 in 2055 and retires at age 67 to find a scheduled yearly benefit of $33430. Since the numbers in the table are given as constant 2017 dollars, I assumed the “real” value of the benefit would not change and multiplied it by the 20 years that person could expect to live in retirement, for a total of 668600 dollars. Now, if the benefits are cut by 22% that person would lose $158,778 in total benefits over his lifetime. This is close enough to Dreibelbis figure, assuming he may have done the calculation slightly differently. But what Dreibelbis did not do was calculate the cost of avoiding the benefit cut by raising the payroll tax 4%. This turns out to be $93566 or about 60% of the value of the lost benefits. Sounds to me like a better deal. Moreover the tax would be paid out of an income of 2.339,153, leaving him an after the tax total income of $2,245,587, or an average of about $64,159 per year (2017 dollars). Taking the benefit cut would leave him a total of $509,822 in benefits, or an average of about $25,491 per year to live on when he is old.
Washington Post Shoots for Pulitzer in Fake News With Reporting on Disability – Dean Baker - The Washington Post has been running a multi-part series on the country's disability programs. The premise, as stated in the most recent installment, is that we are seeing: "...decades-long surge in the nation’s disability rolls."The formula then involves profiling one or more families who depend on disability payments from the government instead of work for their primary source of income. Usually, the profiles show family members to be reluctant to work and to have drug problems and other unhealthy habits. While this situation undoubtedly describes a substantial number of people in the United States, the idea that the number of people getting disability payments is exploding is a Washington Post invention, not a fact in the real world. The graph below shows disability payments as a share of GDP from 1980 to 2013. While the share of GDP going to disability payments did rise over this 33 year period, the increase was just over 0.3 percentage points, a rise of 30 percent. Furthermore, Social Security disability payments, the largest component of this spending, has fallen by 0.07 percentage points of GDP over the years from 2013 to 2016, leaving an increase of less than 25 percent measured as a share of GDP over 46 years.
Herointown, N.J.: The dead, 5,217 and counting - Here is everyone who has died of a heroin- or prescription opioid-related overdose in N.J. since 2004. Hover or tap icons for details of each person's name, age, hometown and the year they died. Last names were withheld to protect each family's privacy. Source: New Jersey Medical Examiner
Trump administration scraps Obamacare signup assistance in 18 cities: President Donald Trump's administration has ended Affordable Care Act contracts that brought assistance into libraries, businesses and urban neighborhoods in 18 cities, meaning shoppers on the insurance exchanges will have fewer places to turn for help signing up for coverage. Community groups say the move, announced to them by contractors last week, will make it even more difficult to enroll the uninsured and help people already covered re-enroll or shop for a new policy. That's already a concern because of consumer confusion stemming from the political wrangling in Washington and a shorter enrollment period. People will have 45 days to shop for 2018 coverage, starting Nov. 1 and ending Dec. 15. In previous years, they had twice that much time. Some see it as another attempt to undermine the health law's marketplaces by a president who has suggested he should let "Obamacare" fail. The administration, earlier this year, pulled paid advertising for the sign-up website HealthCare.gov, prompting an inquiry by a federal inspector general into that decision and whether it hurt sign-ups. Now insurers and advocates are concerned that the administration could further destabilize the marketplaces where people shop for coverage by not promoting them or not enforcing the mandate compelling people to get coverage. The administration has already threatened to withhold payments to insurers to help people afford care, which would prompt insurers to sharply increase prices.
Uncertainty Over Obamacare Leaves 2018 Rates In Limbo - California’s Obamacare exchange scrubbed its annual rate announcement this week, the latest sign of how the ongoing political drama over the Affordable Care Act is roiling insurance markets nationwide.The exchange, Covered California, might not wrap up negotiations with insurers and announce 2018 premiums for its 1.4 million customers until mid-August — about a month later than usual. Similar scenarios are playing out across the country as state officials and insurers demand clarity on health care rules and funding, with deadlines fast approaching for the start of open enrollment this fall. “It’s insane,” says John Baackes, CEO of L.A. Care Health Plan, which has about 26,000 customers on the California exchange. “Here we are in the middle of July, and we don’t even know what rules we will be operating under for open enrollment. It is not how you want to run a business.” Individuals could face sharply higher premiums and fewer choices if more health insurers leave the insurance marketplaces because of lingering uncertainty. State and industry officials around the United States are concerned that the federal government could stop funding so-called cost-sharing subsidies that reduce out-of-pocket costs for people with lower incomes. And they worry the Trump administration won’t enforce the individual mandate that requires people to purchase health coverage or pay a penalty.
Obamacare is hurting these people—and Congress is doing nothing about it - Joe Gibialante’s health insurance premiums are so high that people think he must be fibbing about them.Before the Affordable Care Act went into effect in 2014, Gibialante, 53, an estate manager who lives in Bethesda, Maryland, paid about $2,300 per year for insurance that covered him and his wife, with a $1,000 deductible for each. Premiums have soared since then, and he now pays $13,000 per year for a plan with a $6,550 deductible per person. “I’m driving an older car than I’d like, we’ve trimmed back on holidays and we’ve cut all charitable giving,” Gibialante tells Yahoo Finance. “What really frustrates me is whenever I get in a conversation about this, I get told, ‘you’re lying. No way.’ People just don’t believe this is the case.”The Affordable Care Act, aka Obamacare, has helped about 20 million Americans gain health insurance coverage, and lowered costs for others. But the law came with glitches that have caused huge cost increases for a subset of the insured public that numbers perhaps 1 million Americans. Congress could tweak the law to help those being pinched by it. But that’s not on the agenda in the Republican-controlled Congress or President Trump’s White House, where the only options seem to be an outright repeal of the law or a major rollback. If the GOP repeal bills fail, which seems likely, Trump has said bluntly, “we’ll let Obamacare fail.” The ACA benefits lower-income Americans the most, since they qualify for the most generous subsidies that help cover the cost of insurance. Subsidies decline as income goes up, and disappear completely for people who earn more than 400% of the poverty level, which this year is $48,240 for an individual and $98,400 for a family of 4. There’s another catch above those income levels. Up to 400% of the poverty line, federal subsidies are supposed to cover the incremental cost of a benchmark plan once it exceeds 9.69% of income. Above that level of income, however, there’s no limit on the cost of insurance, even if it were to eat half of your paycheck. This “middle-class cliff” is one reason the ACA began as an unpopular law and still enjoys only tepid public support.
15 Million Americans Would Opt-Out Of Obamacare.. If They Could -- If the individual mandate were to be repealed and Americans were no longer required to purchase the Obamacare-mandated levels of health insurance coverage, the Congressional Budget Office (CBO) believes that 15 million Americans would no longer purchase such coverage. Some, including Jonathan Gruber, believe that the CBO is overestimating the impact of repealing the mandate. Gruber was one of the architects of the healthcare law.Politically, the impact of these projections is significant since the individual mandate has long been the most unpopular part of Obamacare. Recent polling shows that two-thirds of Americans would like to see it repealed. For many, the idea of the government forcing anybody to buy anything is in conflict with America’s commitment to individual freedom.Additionally, if the CBO projections are correct, there are 15 million Americans who would directly benefit from the repeal. Typically, when people are directly impacted by a law, their support or opposition is more intense than that of more casual observers.On the other hand, if Gruber is correct, the Republican plans to repeal and replace Obamacare would have a much smaller impact than the CBO expects. If the individual mandate were to be repealed, many Americans might be interested in purchasing less comprehensive and less expensive coverage. The CBO has offered no estimates of how many might take advantage of such alternatives. It is currently illegal for insurance companies to offer less expensive plans offering less comprehensive coverage.
How Electronic Health Records Degrade Care and Endanger Patients - naked capitalism - Yves here. We’ve featured posts from the Health Care Renewal site that regularly warn about how electronic health care records are a serious hazard to patient health. Yet we’ve regularly had readers refuse to believe that, despite warnings like the ECRI Institute putting health care information technology as its top risk in its 2014 Patient Safety Concerns for Large Health Care Organizations report, or the president of the Citizen’s Council for Health Freedom warning that “EHRs are endangering your life” or press reports like this: Arthur Allen at POLITICO Pro eHealth (http://www.politico.com/story/2014/06/health-care-electronic-records-107881.html) says government-imposed EHRs are:
- Driving doctors to distraction
- Crushing hospitals under debt
“In short,” he writes, “the current generation of electronic health records has about as many fans in medicine as Barack Obama at a tea party convention.“Some readers assume that anything must be better than hand-written and potentially difficult-to-read doctor notes. And the 50,000 foot explanation, that the systems are a huge and costly fail from a care perspective because they are designed primarily, if not entirely, for billing, seems insufficient. This post will hopefully satisfy the skeptics by giving granular detail with real-world examples of how these electronic record systems distract doctors, regularly employ dangerous “check the box” approaches, produce voluminous and repetitive patient files that routinely go unread, give nurses contradictory instructions, and too often result in patients being given “care” that harms them. One of my friends, the daughter of an MD who worked for the NIH and later a Big Pharma co, said she’d never go to a hospital without her own private duty nurse. That was before EHRs. Once you read this article, you’ll think twice about going to a hospital in the US without that sort of extra protection.
'Obscene': 70 Top Healthcare CEOs Raked in $9.8 Billion Since 2010 - While the Senate GOP's plan to repeal the Affordable Care Act (ACA) has been denounced as potentially devastating to the poor, the sick, women, people of color, children, and those with pre-existing conditions, a new analysis published Monday finds that no matter what happens, the CEOs of large healthcare companies are likely to continue living lavishly. Since the Affordable Care Act (ACA) passed in 2010, the "CEOs of 70 of the largest U.S. healthcare companies cumulatively have earned $9.8 billion," according to a report by Axios's Bob Herman. Herman goes on to add that the CEOs' earnings "far outstrip[ped] the wage growth of nearly all Americans.""The richest year [for healthcare CEOs] was 2015, when 70 healthcare CEOs collectively made $2 billion," Herman notes. "That was an average of about $28.5 million per CEO and a median of about $17.3 million per CEO. The median household income in 2015 was $56,515, which the average healthcare CEO made in less than a day."John Martin, former CEO of the pharma giant Gilead Sciences, topped Axios's list: he pulled in $863 million in the "ACA era." CEOs of 70 of the largest US health care companies have earned $9.8 billion in the seven years since ACA was passed https://t.co/1VBAavfiWZ pic.twitter.com/aeXbUmtW4j— Axios (@axios) July 24, 2017 Despite President Donald Trump's repeated insistence that Obamacare has been a "nightmare" and that the entire system is collapsing, Herman observes, "The ACA has not hurt the healthcare industry. Stock prices have boomed, and CEOs took home nearly 11 percent more money on average every year since 2010." And the Senate GOP's alternative, which Trump has enthusiastically endorsed, would likely be a further boon to industry executives, who would stand to benefit from the bill's massive tax cuts for the wealthy.
In the state with the highest medical debt, it’s the middle class who carries the burden - Americans are no strangers to medical debt, and the burden is most severe in Mississippi, where nearly 40 percent of adults under age 65 owe hospitals or doctors, according to the Urban Institute. But the men and women carrying that debt are not always poor — they’re increasingly middle class.And their inability, or refusal, to pay their bills is straining hospital budgets and threatening the availability of care.“You’d be surprised when you look through our bad debt rolls,” said Alvin Hoover, CEO of King’s Daughters Medical Center in Brookhaven, Miss. “Some drive a 2002 pickup truck, and some drive a 2016 pickup truck. Those are the ones that get under your skin — where you went to buy a 2016 truck when you still owe the hospital $4,000.” Mississippi, where the median household income hovers near $40,000, has one of nation’s highest rates of uninsured and underinsured adults. As a result, the state has one of the highest percentage of adults who avoid doctors due to potential costs, said Therese Hanna, executive director at the Center for Mississippi Health Policy.At the same time, medical debt remains the leading cause of bankruptcies, according to Roy Mitchell, executive director of the Mississippi Health Advocacy Program.Thomas Ash, a bankruptcy lawyer based in Jackson, said more than half his clients carry medical debt. He often sees this kind of debt accumulate because residents have purchased catastrophic insurance plans but have failed to set aside savings to cover high deductibles or expenses not covered by the policy. “If they couldn’t pay the deductible,” said Mississippi Hospital Association CEO and President Tim Moore, “there’s a high probability they’re not going to pay the hospital.”
Finishing course of antibiotics could harm you, doctors say - Doctors have long advised patients to finish their course of drugs even if the illness has passed in the meantime. It is a mantra followed by patients across the country: always complete the full course of antibiotics even if the ailment is long forgotten.Now specialists have warned that such advice is not backed by evidence, and could be increasing drug resistance. Doctors could instead tell patients to stop taking medication when they feel better, experts write in The BMJ today.Martin Llewelyn, of Brighton and Sussex Medical School, and nine colleagues from universities across the country urge health officials and school biology teachers to “stop advocating ‘complete the course’ ” and “publicly and actively state that this was not evidence-based and is incorrect”. GP leaders voiced concern that changing the simple message could cause confusion, however, and urged patients to keep following the advice.
Winning: U.S. Crushes All Other Countries In Latest Obesity Study -- When President Trump promised last fall that under a Trump administration America would "would win so much you'll get tired of winning," we suspect this is not what he had in mind. According to the latest international obesity study from the Organization For Economic Co-operation and Development (OECD), America is by far the fattest nation in the world with just over 38% of the adult population considered 'obese.' Here are some stats from the OECD's latest study courtesy of the Washington Examiner:
- - In 2015, an estimated 603.7 million adults and 107.7 million children worldwide were obese. That represents about 12 percent of all adults and 5 percent of all children.
- - The prevalence of obesity doubled in 73 countries between 1980 and 2015 and continuously increased in most of the other countries.
- - China and India had the highest number of obese children. China and the U.S. had the highest number of obese adults.
- - Excess body weight accounted for about 4 million deaths — or 7.1 percent of all deaths — in 2015.
- - Almost 70 percent of deaths related to a high BMI were due to cardiovascular disease.
- - The study finds evidence that having a high BMI causes leukemia and several types of cancer, including cancers of the esophagus, liver, breast, uterus, ovary, kidney and thyroid.
- - In rich and poor countries, obesity rates increased, indicating "the problem is not simply a function of income or wealth. Changes in the food environment and food systems are probably major drivers. Increased availability, accessibility, and affordability of energy-dense foods, along with intense marketing of such foods, could explain excess energy intake and weight gain among different populations. The reduced opportunities for physical activity that have followed urbanization and other changes in the built environment have also been considered as potential drivers; however, these changes generally preceded the global increase in obesity and are less likely to be major contributors."
As Opioid Crisis Rages, Federal Drug Prosecutions Hit 25-Year Low -- Members of the legal marijuana industry, who for months have been nervously anticipating a federal crackdown led by Attorney General Jeff Sessions, can breathe a sigh of relief. According to data from the Justice Department, the number of federal drug-crime prosecutions has fallen to its lowest level in 25 years, and the decline has continued to accelerate since President Donald Trump took office. The latest data show that federal law-enforcement agencies prosecuted fewer drug offenders over the past 12 months than at any time during the last quarter century. During the first five months of the Trump administration, only 8,814 drug offenders were prosecuted by the federal government, a drop of 9 percent as compared with the 9,687 federal criminal cases prosecuted between February and June 2016.Prosecutions fell sharply in June on a month-to-month basis following a spike in May. Over the long term, the six-month average has been declining slowly since 2003. “During the month of June 2017, only 1,578 new prosecutions for drug crimes were brought - down 16.1 percent from the number in May. And prosecutions over the past year are even lower than they were five years ago. Overall, the data show that drug prosecutions in U.S. district courts are down 27.6 percent from levels reported in 2012.”
Spike in calls to poison control centers over dietary supplements -- New research offers a reminder that dietary supplements don't come without risks — and the problems they can cause appear to be on the rise. A study published in the Journal of Medical Toxicology finds that U.S. Poison Control Centers receive a call every 24 minutes, on average, regarding exposures to dietary supplements. The rate of calls increased by almost 50 percent from 2005 to 2012, the researchers found. A total of 274,998 cases were reported from 2000 through 2012. Seventy percent of the calls involved children younger than 6 years old. The majority of exposures were unintentional, occurring when children swallowed supplements they found at home. About 4.5 percent of the time — more than 12,300 cases — serious medical complications occurred. "Many consumers believe dietary supplements are held to the same safety and efficacy standards as over-the-counter medications," Dr. Gary Smith, senior author of the study and director of the Center of Injury Research and Policy at Nationwide Children's, said in a statement. "However, dietary supplements are not considered drugs, thus they are not required to undergo clinical trials or obtain approval from the FDA prior to sale, unless the product is labeled as intended for therapeutic use." In almost half of the cases, miscellaneous substances found in commonly used dietary supplements accounted for the calls.
Study: US is slipping toward measles being endemic once again - With firm vaccination campaigns, the US eliminated measles in 2000. The highly infectious virus was no longer constantly present in the country—no longer endemic. Since then, measles has only popped up when travelers carried it in, spurring mostly small outbreaks—ranging from a few dozen to a few hundred cases each year—that then fizzle out. But all that may be about to change. With the rise of non-medical vaccine exemptions and delays, the country is backsliding toward endemic measles, Stanford and Baylor College of Medicine researchers warn this week. With extensive disease modeling, the researchers make clear just how close we are to seeing explosive, perhaps unshakeable, outbreaks. According to results the researchers published in JAMA Pediatrics, a mere five-percent slip in measles-mumps-and-rubella (MMR) vaccination rates among kids aged two to 11 would triple measles cases in this age group and cost $2.1 million in public healthcare costs. And that’s just a small slice of the disease transmission outlook. Kids two to 11 years old only make up about 30 percent of the measles cases in current outbreaks. The number of cases would be much larger if the researchers had sufficient data to model the social mixing and immunization status of adults, teens, and infants under two. “The results of our study find substantial public health and economic consequences with even minor reductions in MMR coverage due to vaccine hesitancy and directly confront the notion that measles is no longer a threat in the United States,” the authors conclude.
Researchers examined the brains of 111 former NFL players. Only one didn’t have CTE. - Researchers studying the link between football and chronic traumatic encephalopathy found that 99 percent of the brains donated by families of former NFL players showed signs of the neurodegenerative disease, according to a new study published Tuesday. In all, researchers from Boston University School of Medicine and the VA Boston Healthcare System examined 202 brains that belonged to men who played football at all levels and were later donated for research. They found CTE in 177 of them - 87 percent. While they found evidence of the disease across all levels of play, the highest percentage was found among those who competed at the highest level; all but one of the 111 brains belonging to ex-NFL players were diagnosed post-mortem with CTE. McKee cautions that the study has some limitations and doesn’t attempt to pinpoint a CTE rate. The brains studied were mostly donated by concerned families, which means they weren’t random and not necessarily representative of all men who have played football.
185 studies reveal men’s sperm count has plunged worldwide over the last 40 years -- The swimmers are going missing — and no one knows why. According to an analysis of 185 academic studies, sperm counts around the world have been declining steadily over the last four decades, such that today's counts are roughly half of what they were 40 years ago, the BBC reports. Between 1973 and 2011, sperm counts declined 59.3% "with no evidence of a 'leveling off' in recent years," investigators from multiple international universities wrote in their report. These declines imply that a growing proportion of men have sperm counts below the thresholds for reduced fertility or full-fledged infertility, the researchers noted. This could mean a few things in a broader sense. Demographic experts have observed for close to two decades that developed countries are increasingly seeing falling fertility rates. (In Japan, the population is actually decreasing.) Gender equality has encouraged more women to enter the workforce, despite a laggard set of policies at many employers that don't accommodate both work and family life. The latest findings add to that story of falling fertility by including biological reasons that couples aren't having nearly as many children as they used to. Dr. Hagai Levine, the lead researcher on the study, said the findings left him feeling "very worried." He pointed to environmental factors such as the exposure to pesticides and chemicals, lifestyle habits like smoking and poor diet, and psychological factors like stress as potential causes for the steep decline in sperm count. "Eventually we may have a problem, and with reproduction in general," he told the BBC. "And it may be the extinction of the human species."
Scientists Build DNA From Scratch, Create New Bacteria - Back in March, Scientists found the key to artificial life when they discovered they could create yeast from man-made DNA. In that experiment, the scientists replaced a third of the yeast DNA with artificially created chromosomes. Using that plan, an international team of 11 labs is working to modify the yeast genome. Led by Jef Boeke, the founding director of The Institute for Systems Genetics at NYU Langone Medical Center, the team are planning to redesign entire life forms from scratch. By redesigning or modifying entire genomes, “you really can construct something that’s completely new,” Boeke told the Associated Press. What makes this research so groundbreaking is that the researchers swapped out entire sections of the yeast DNA with artificially created ones. The researchers use computers to sequence the natural genome of yeast, after which they instruct the computer to make specific changes to the genome structure. Changes include rearranging the order of the genes that may help the ability for the yeast to grow better. After the changes are made, they are sent to other labs where they are joined to build even larger genomes. By tinkering with the base pairs inside yeast, the research presented here will be essential to understanding how the various mechanisms work together and how they can be used as tools for better genetic engineering. Applications for the technology include creating microbes the eat toxic waste, produce hydrogen more efficiently, create vaccines and countless other possibilities. The research marks a significant step toward what might be possible with genetic engineering, and, within adequate ethical regulations, the scope of the study could lead to significant breakthroughs. Currently, the scientists are limited to altering the genomes of simple organisms with less than a billion base pairs, but Boeke hopes that one day he might be able to perform similar experiments on more complex organisms. “The notion that we could actually write a human genome is simultaneously thrilling to some and not so thrilling to others,” Boeke told the Associated Press. “So we recognize this is going to take a lot of discussion.”
In a first, scientists have edited the DNA of human embryos that could turn into people using CRISPR -- In a step that some of the nation’s leading scientists have long warned against and that has never before been accomplished, biologists in Oregon have edited the DNA of viable human embryos efficiently and apparently with few mistakes, according to a report in Technology Review. The experiment, using the revolutionary genome-editing technique CRISPR-Cas9, was led by Shoukhrat Mitalipov of Oregon Health & Science University. It went beyond previous experiments using CRISPR to alter the DNA of human embryos, all of which were conducted in China, in that it edited the genomes of many more embryos and targeted a gene associated with a significant human disease. “This is the kind of research that is essential if we are to know if it’s possible to safely and precisely make corrections” in embryos’ DNA to repair disease-causing genes,” legal scholar and bioethicist R. Alta Charo of the University of Wisconsin, Madison, told STAT. “While there will be time for the public to decide if they want to get rid of regulatory obstacles to these studies, I do not find them inherently unethical.” Those regulatory barriers include a ban on using National Institutes of Health funding for experiments that use genome-editing technologies in human embryos. In the new work, Mitalipov and his colleagues created human embryos using sperm donated by men with the genetic mutation that they planned to try to repair with CRISPR. The embryos are described as “clinical quality.”
Nearly 100 Cancer-Causing Contaminants Found in US Drinking Water - The Environmental Working Group's (EWG) just-released Tap Water Database shows that a startling number of cancer-causing chemicals contaminate the nation's drinking water. Of 250 different contaminants detected in tests by local utilities, 93 are linked to an increased risk of developing cancer . We analyzed the tap water data for 48,000 water utilities nationwide for the years 2010 to 2015, and found that more than 80 percent of the utilities detected contaminants linked to cancer in levels exceeding health-protective guidelines. According to a recent study published in the journal Cancer, counties with the highest rates of pollution also have higher cancer rates and contaminated drinking water likely plays a role in this. Here's a list of the five most pervasive drinking water contaminants linked to cancer nationwide:
- 1. 1,4-Dioxane Found in the drinking water supplies for 90 million Americans, this contaminant can come from hazardous waste sites, industrial spills and discharges from municipal wastewater plants. It is linked to liver, gall bladder and respiratory system cancers.
- 2. Arsenic Found in the drinking water supplies of 70 million people, this notorious poison is a naturally occurring mineral that causes bladder, lung and skin cancers.
- 3. Chromium-6 The " Erin Brockovich " chemical contaminates drinking water for 250 million people, and can come from industrial pollution or natural sources. Chromium-6 is linked to stomach cancer.
- 4. Disinfection byproducts Detected in the drinking water served to more than 250 million Americans, these contaminants form when disinfectants such as chlorine interact with plant and animal waste in source water. Disinfection byproducts have been linked to bladder, liver, kidney and intestinal cancers, and may harm fetal development.
- 5. Nitrate Nitrate is a fertilizer chemical that comes from agricultural and urban runoff, as well as discharges from wastewater treatment plants and septic tanks. High levels of nitrate in drinking water have been linked to colon, kidney, ovarian and bladder cancers.
Arsenic, chromium-6 and nitrate are also common in private wells. The federal government does not require private well water monitoring, so it falls to individual homeowners to test the water in their wells.
Poison Papers Reveal EPA Collusion With Chemical Industry -- The world of independent chemical testing has a shiny veneer. The public is reassured that chemicals they're exposed to on a daily basis are certified by technicians in spotless white lab coats who carefully conduct scientific studies, including on animals in neat rows of cages. But a federal grand jury investigation that ended with convictions in the early 1980s discovered that Industrial Bio-Test Laboratories (IBT), the largest such lab in the U.S., conducted trials with mice that regularly drowned in their feeding troughs. The dead animals would decompose so quickly that "their bodies oozed through wire cage bottoms and lay in purple puddles on the dropping trays." IBT even invented an acronym "TBD/TDA" for its raw safety data, later discovered to mean " too badly decomposed ." That was just one of a host of problems uncovered at IBT which conducted an estimated 35 to 40 percent of all the toxicology tests performed in the U.S. including for U.S. Food and Drug Administration (FDA) regulated products and U.S. Environmental Protection Agency (EPA) regulated pesticides and chemicals. Scientists at the FDA were the first to spot the fraud and misconduct and blew the whistle on IBT in Senate hearings in the late 1970's. Soon after, the EPA was forced to deal with the issue and estimated behind the scenes that some 80 percent of the data provided to them for chemical registration from IBT was nonexistent, fraudulent or invalid. What the EPA did instead was revealed in a transcript of a meeting that took place at the Howard Johnson Inn in Arlington, Virginia on Oct. 3, 1978. This secret meeting was between senior figures at EPA, Canada's Health Protection Branch, and executives of the chemical industry and was intended to solve the IBT "problem." This transcript is part of more than 20,000 documents, weighing more than three tons, just released by the Bioscience Resource Project and the Center for Media and Democracy , on the " Poison Papers " website. Most of the Poison Papers were collected by author and activist Carol Van Strum , who used documents obtained through public interest lawsuits and open records requests to investigate chemical pollution and digitized by journalist Peter von Stackelberg . Van Strum's remarkable story was detailed this week in The Intercept .
How the Pentagon’s Handling of Munitions and Their Waste Has Poisoned America - Shortly after dawn most weekdays, a warning siren rips across the flat, swift water of the New River running alongside the Radford Army Ammunition Plant, and piles of discarded contents from bullets, chemical makings from bombs, and raw explosives — all used or left over from the manufacture and testing of weapons ingredients at Radford — are doused with fuel and lit on fire, igniting infernos that can be seen more than a half a mile away. The burning waste is rich in lead, mercury, chromium and compounds like nitroglycerin and perchlorate, all known health hazards. The residue from the burning piles rises in a spindle of hazardous smoke, twists into the wind and, depending on the weather, sweeps toward the tens of thousands of residents in the surrounding towns. Nearby, Belview Elementary School has been ranked by researchers as facing some of the most dangerous air-quality hazards in the country. The rate of thyroid diseases in three of the surrounding counties is among the highest in the state, provoking town residents to worry that emissions from the Radford plant could be to blame. Government authorities have never studied whether Radford’s air pollution could be making people sick, but some of their hypothetical models estimate that the local population faces health risks exponentially greater than people in the rest of the region. More than three decades ago, Congress banned American industries and localities from disposing of hazardous waste in these sorts of “open burns,” concluding that such uncontrolled processes created potentially unacceptable health and environmental hazards. Companies that had openly burned waste for generations were required to install incinerators with smokestacks and filters and to adhere to strict limits on what was released into the air. Lawmakers granted the Pentagon and its contractors a temporary reprieve from those rules to give engineers time to address the unique aspects of destroying explosive military waste. That exemption has remained in place ever since, even as other Western countries have figured out how to destroy aging armaments without toxic emissions.
Senators Unveil Bill to Ban Chlorpyrifos - Senators Tom Udall (D-NM), Kirsten Gillibrand (D-NY), Cory Booker (D-NJ), Richard Blumenthal (D-CT), Kamala Harris (D-CA) , Dick Durbin (D-Ill.), Ben Cardin (D-MD) and Edward J. Markey (D-MA) unveiled Tuesday a first-of-its-kind bill that would ban chlorpyrifos , a widely used agricultural pesticide that has been linked to reduced IQ and attention deficit disorder in children. Chlorpyrifos, an organophosphate which comes from the same chemical family as sarin nerve gas, is used on staple foods like strawberries, apples, citrus, broccoli and more. The Protect Children, Farmers & Farmworkers from Nerve Agent Pesticides Act amends the U.S. Federal Food, Drug, and Cosmetic Act, S. 1624, that oversees food safety and prohibits all chlorpyrifos use in food. It also directs the U.S. Environmental Protection Agency (EPA) to partner with the National Research Council to assess the neurodevelopment effects and other low-dose impacts that exposure to organophosphate pesticides has on agricultural workers and children. In addition to calling for a ban on chlorpyrifos, the bill educates the public about the history of this nerve agent pesticide and the communities that are in harms' way. "The chemical industry can and must do better than continue to push for the use of nerve agents in our food. This bill comes at a crucial time when scientific integrity and the protection of the public is compromised by industry collusion with the administration," said Andrea Delgado, legislative director of the Healthy Communities program at Earthjustice . "The most exposed and vulnerable among us are our children, farmworkers and families in rural communities, and they deserve action now." The bill was unveiled in the presence of more than 30 representatives from health, labor and civil rights organizations from across the country. The delegation met with senators to seek their leadership in banning chlorpyrifos. The group is urging officials to support the bill and protect the health of the millions of workers and children who are exposed to chlorpyrifos every year.
Organic Farmers Fight Release of GMO Moths -- The Northeast Organic Farming Association of New York (NOFA-NY) denounced the USDA's permi t for the world's first open-air trials of the Genetically Engineered (GE) Diamondback moth to be released in Geneva, New York. This announcement came concurrently with the availability of a final environmental assessment and finding of no significant impact for the field release of the GE Diamondback moths. NOFA-NY considers the Environmental Assessment lacking comprehensive health and environmental details. "NOFA-NY considers the release of a novel genetically engineered organism to be a major activity with potentially significant and heretofore unknown health and environmental effects," said NOFA-NY policy advisor Liana Hoodes. "It is now up to New York State Department of Environmental Conservation (DEC) to ensure the safety of its citizens before granting the necessary state permit. We call on the NYS DEC to require a full environmental impact statement and public hearings during a complete review under State Environmental Quality Review Act." Hoodes added that "most of the USDA's environmental assessment confines its review to the general impacts of the new technology, yet neglects to adequately assess the potential impacts of the trials themselves on farms and residences near the New York State Agricultural Experiment Station in Geneva, New York and across the state."
USDA Receives Near Unanimous Public Rejection of Genetically Engineered Trees- New Zealand-owned tree biotechnology company ArborGen faces near unanimous opposition to commercial deregulation of their genetically engineered eucalyptus trees. On 5 July, the US Department of Agriculture received an astounding 280,000 individual comments, as well as 500 organizations representing millions of people around the world, all opposing this deregulation. Only 3 comments were submitted in favor. This avalanche of comments came a mere 75 days after the USDA publicly released their draft Environmental Impact Statement on ArborGen’s request for deregulation. ArborGen’s eucalyptus are engineered for cold tolerance with the intent of extending their range into the Southern US, from South Carolina to Texas. Eucalyptus trees are native only to Australia. Eucalyptus plantations are invasive, notorious for depleting waterways and highly flammable–as demonstrated by recent wildfires in Chile and Portugal. Their introduction to Southern US states, where droughts, heatwaves and wildfires are already escalating, would be foolhardy. ArborGen claims their GE eucalyptus will meet expanding market demands for pulp and paper, as well as the fast-growing demand for wood pellets for “biomass.” Currently, EU greenhouse gas emission policies provide subsidies to burn wood as an alternative to fossil fuels, in spite of the fact that doing so results in deforestation and releases even more CO2. These demands will not be met, however, without the accelerated destruction of native forests, including for GE eucalyptus plantation development–both in the US and globally.
Fertilizers, a Boon to Agriculture, Pose Growing Threat to US Waterways - Nitrogen-based fertilizers, which came into wide use after World War II, helped prompt the agricultural revolution that has allowed the Earth to feed its seven billion people. But that revolution came at a cost: Artificial fertilizers, often applied in amounts beyond what crops need to grow, are carried in runoff from farmland into streams, lakes and the ocean. New research suggests that climate change will substantially increase this form of pollution, leading to more damaging algae blooms and dead zones in American coastal waters. A study published Thursday in Science concludes that eutrophication, excessive nutrient enrichment, is likely to increase in the continental United States as a result of the changes in precipitation patterns brought by climate change. Heavier rains caused by warmer temperatures will cause more agricultural runoff, sluicing more nutrients into rivers, lakes and oceans. The authors found that future climate change-driven increases in rainfall in the United States could boost nitrogen runoff by as much as 20 percent by the end of the century. “Climate change is just as tightly linked to issues related to water quality, and it’s not enough for the water to just be there, it has to be sustainable.” Excess nitrogen from the fertilizers can cause eutrophication in the ocean, which can lead to harmful algae blooms or hypoxia — reduced levels of oxygen that create conditions in which organisms can’t survive. The study’s authors looked at three emissions scenaTheir results show that in the high emissions scenario, which assumes that future greenhouse gas emissions trends follow those of the past, increased precipitation alone would cause “large and robust increases” in nitrogen amounts on the watershed scale, particularly in the Upper Mississippi Atchafalaya River Basin, the Northeast and the Great Lakes basin.
A Nebraska-sized area of forest disappeared in 2015 - A Nebraska-sized chunk of the world’s forests was decimated in 2015 because of wildfire, logging and expanding palm oil plantations, according to a new study. The loss is part of a continuing trend of deforestation that could have devastating implications for the climate.About 49 million acres of forest disappeared worldwide in 2015, mainly in North America and the tropics, putting the year’s global deforestation level at its second-highest point since data gathering began in 2001. In all, the globe lost 47 percent more forested land in 2015 than it did 16 years ago, according to the study by Global Forest Watch. Deforestation accounts for more than 10 percent of the global carbon dioxide emissions driving climate change. Dense tropical forests are also critical to keeping the climate stable because they suck up large amounts of human carbon pollution from the atmosphere, storing it in tree trunks, leaves, roots and soil.Using satellite data provided by Google and the University of Maryland, Global Forest Watch researchers measured the death or removal of trees at least 16 feet tall. 2014 was a record-breaking year for tree-cover loss when nearly 60 million acres of forests disappeared. 2015 saw less, but it’s too soon to say whether deforestation is truly on a downward swing because of uncertainty in some of the data, study co-author Mikaela Weisse, a research analyst for Global Forest Watch at the World Resources Institute, said.
Border Agency Set to Jumpstart Trump’s Wall in a Texas Wildlife Refuge -- U.S. Customs and Border Protection will begin constructing the first segment of President Trump’s border wall in November through a national wildlife refuge, using money it’s already received from Congress.That’s what a U.S. Fish and Wildlife Service official recently told a nonprofit group that raises money to support two national wildlife refuges in South Texas, according to the group’s vice president. “I was alarmed,” said Jim Chapman of Friends of the Wildlife Corridor. “It was not good news.” For the past six months, CBP has been quietly preparing a site to build a nearly 3-mile border barrier through the Santa Ana National Wildlife Refuge, according to The Texas Observer. The U.S. Army Corps of Engineers also has reportedly begun drilling and soil testing in California and New Mexico. But construction on the wall was not expected to begin until January because Congress has yet to approve CBP’s budget. On Thursday, the House approved a spending bill that contained $1.6 billion to build segments of the wall in Texas and California. Its fate in the Senate is uncertain. However, CBP recently told a senior Fish and Wildlife Service official in Texas that the agency would shift funds to pay for the new segment out of its current budget. The official passed on the news to Chapman’s group this week. Customs and Border Protection spokesman Carlos Diaz said it “would be premature to speak about specific locations.” The only South Texas projects authorized under the current budget are the installation of 35 gates at gaps the agency left in the existing border fence, he said. The 2,088-acre Santa Ana refuge, located along the Rio Grande south of McAllen, Texas, is considered one of the nation’s top bird-watching sites, with more than 400 species of birds. The refuge is also home to two endangered wildcats — the ocelot and jaguarundi — and some of the last surviving stands of sabal palm trees in South Texas.
Study Links Most Amazon Deforestation to 128 Slaughterhouses --Satellites are mechanical reporters of the Amazon deforestation process. By documenting the degradation and gaps created by the clear-cutting process over the years, they deliver the verdict: Two-thirds of the Amazon's deforested area has been turned into pastures. From the ground, the cattle count reveals that the Amazon is home to more cattle than people. By 2016, the region's cattle numbers amounted to 85 million head, compared to a human population of 25 million—more than three cows per person. In the city of São Félix do Xingu, which contains the largest herd in Brazil, this proportion reaches 18 cows to 1 person. The Brazilian Amazon covers 61 percent of the nation's territory and harbors 40 percent of the national herd. Cattle are kept on about 400,000 farms and ranches there, ranging in size from a few to tens of thousands of hectares. So it was that when the NGO Imazon finished a new and detailed survey on the region's slaughterhouses, they received a major surprise: finding that a small number, just 128 active slaughterhouses belonging to 99 companies, are responsible for 93 percent of the annual slaughter—close to 12 million head. The fact that slaughterhouses represent a bottleneck in the livestock breeding chain was already known. But Imazon's survey breaks new ground because it clearly reveals the geography of livestock production in the Brazilian Amazon, documenting the area of influence—the amount of pasture required to fulfill the supply demands of each of the 128 slaughterhouses.
Poacher Accused of Poisoning More Than 100 Elephants Is Arrested After Four Years on the Run -- Tony Maphosa, a Zimbabwean poacher, is accused of putting cyanide in watering holes and salt pans used by elephants numerous times over several years. All told, his poisoning spree is said to have killed more than 100 elephants, according to Zimbabwean authorities who have been searching for Maphosa for four years. "[Maphosa] has been on the wanted list in connection poisoning elephants in 2013 and is also linked to the death of eight elephants this year," a police source told the Zimbabwe Chronicle . He was arrested last week in Hwange National Park following the recent deaths of two elephants from cyanide poisoning, a common tactic used by poachers to remove the ivory tusks of elephants, which can then be sold for a high price internationally. Two tusks were found on him when he was detained. He could face 15 or more years in prison and more than $1 million in fines, based on past punishments of poachers and guidelines set by the government. In recent years, some poachers have switched tactics, choosing to poison elephants rather than shoot them because it's stealthier. This arrest brings down a prominent poacher, but the problem in Zimbabwe is far wider than a single individual. Each year, dozens of elephants are killed in this park alone, which is also where Cecil the Lion was killed , despite there being an active anti-poaching team on duty, according to The Independent . Lack of funding for park resources, the relentlessness of poachers, and the continued demand for ivory on the global black market keeps this number from falling.
Trump to Strip Restrictions That Include Killing Wolf Pups In Dens — The Trump administration is taking aim at restrictions on recreational hunting and trapping inside parks and refuges in Alaska, according to directives posted today by Public Employees for Environmental Responsibility (PEER). The regulations limit questionable hunting techniques, such as killing bear cubs and wolf pups in their dens, luring grizzlies with rotting meat, and shooting swimming caribou from a motorboat, among other controversial methods. In a pair of July 14, 2017 memos, Todd Willens, Trump’s newly appointed Acting Assistant Secretary for Fish and Wildlife and Parks, orders the acting directors of the National Park Service (NPS) and the U.S. Fish & Wildlife Service (FWS), “to initiate a rulemaking process to reconsider” each of their agency rules. Willens cites “various prohibitions that directly contradict State of Alaska authorizations and wildlife management decisions.” Willens has been at his job for barely a week. The essential conflict is that Alaska encourages lethal removal of predators in order to increase the supply of game animals while the federal agencies are charged with sustaining all native wildlife – including predators. Traditional federal-state cooperation in wildlife management has broken down in recent years and has been replaced with lawsuits from the state and political acrimony. “Alaska’s national parks and wildlife refuges are required by law to manage these federal lands not as private game reserves but to protect natural diversity, including nature’s predator-prey dynamics,” said Rick Steiner, a retired University of Alaska professor and PEER board member, pointing out that lethal control on park boundaries is devastating in-park wolf populations. “These unethical and unsporting practices have no place in modern society, and certainly not on Alaska’s magnificent parks and refuges.”
Humans Have Created 9 Billion Tons of Plastic in the last 67 Years -- Scientists have calculated yet another item on the human shopping list that makes up the modern world: plastics. They have estimated the mass of all the plastic bottles, bags, cups, toys, instruments and fabrics ever produced and tracked its whereabouts, as yet another index of the phenomenal change to the face of the planet made by recent human advance.Altogether, since about 1950, with the birth of a new industry, more than 8.3 billion tonnes (or 9.1 tons) of synthetic organic polymers have been generated, distributed and discarded. Of that total, 6.3 billion tonnes are classified as waste.Of that waste, only 9 percent has been recycled, 12 percent incinerated and 79 percent of what is essentially indestructible man-made material is either in landfill or polluting the environment. And much of that waste is now in the sea: in 2010, according to a new study in the journal Science Advances, plastic debris has now been found in all the world's oceans. In 2010, an estimated eight million tonnes was swept downriver or blown by the winds into the sea. By 2050 landfill sites could be holding 12 billion tonnes.
Rome risks water rationing as drought-hit lake set to go offline (Reuters) - Authorities have ordered a halt to pumping water out of a lake near Rome following a prolonged drought, a decision that could force city officials to impose water rationing in the Italian capital. The head of the local Lazio region, which is centered on Rome, said on Saturday the ban on withdrawing water from Lake Bracciano would come into force on July 28. "Sadly, it is a tragedy," Nicola Zingaretti told Tgcom24 TV station. "The truth is Lake Bracciano has fallen too much and we risk an environmental disaster." Acea, the utility firm which runs Rome's water system, has said that two years of lower-than-average rainfall have dramatically reduced water levels in reservoirs feeding the city, with a prolonged, ongoing heat wave making matters worse. But Acea attacked the order to turn off the taps at Bracciano, which is some 30 km (20 miles) north of Rome, saying the region had taken a "unilateral and illegitimate" decision. "The drastic reduction of the flow of water into the capital's water network will force us to introduce a rigid rotation of supplies that will impact 1.5 million Romans," an Acea spokesman told the national Ansa news agency. Zingaretti said only 8 percent of Rome's water came from Bracciano, adding Acea had the time to find a solution.Earlier this month, Acea started to close the drinking fountains that dot the city in an effort to safeguard supplies. Since then there has been no let up in above-average temperatures, with 2017 likely to be one of the hottest years on record in Italy.
Rome facing water rationing as Italy suffers driest spring for 60 years - Scarce rain and chronically leaky aqueducts have combined to put Romans at risk of drastic water rationing as soon as this week. Sky TG24 TV meteorologists noted on Sunday that Italy had experienced one of its driest springs in some 60 years and that some parts of the country had seen rainfall totals 80% below normal. Among the hardest-hit regions was Sardinia, which is seeking natural disaster status. Farmers’ lobby Coldiretti last week estimated €2bn ($2.3bn) worth of damage had been done to Italian agriculture so far. Dairy farmers are lamenting drops in milk production. Among those suffering are farmers growing canning tomatoes in the southeastern region of Puglia, wine grapes throughout much of Italy and those cultivating olives – all signature crops for the nation. Another afflicted area was the province in Parma, an area in north-central Italy renowned for Parmigiano Reggiano cheese and prized prosciutto. Rome’s water supply worries have turned political. Last week, the governor of Lazio region, which includes the Italian capital, ordered that no more water be drawn from Lake Bracciano, which supplies some of the Italian capital, because the drastically decreasing water level posed danger to the aquatic life of the lake. The lake, 40km from Rome, used to be used only for backup water supply but recent years have seen it being tapped on a regular basis. Rome water company ACEA warned that without the lake, drastic rationing loomed. Italian media said staggered water supply shutdowns could last as long as eight hours daily in alternating neighbourhoods and start as soon as Wednesday. Rome’s famed fountains risk being turned off. Rome had 26 rainy days in this year’s first six months, compared to 88 in the first half of 2016, with precipitation totals in those same periods more than four times higher last year than this year. But water supply pipelines in the Rome area – famed in ancient Roman times for its aqueducts, segments of which still stand – are notoriously leaky. La Stampa daily reported that the water loss rate from inadequate infrastructure, often decades-old, ranged from 26% in the north to 46% in the central and southern parts of the country.
Romans are about to go eight hours a day without water — Two thousand years ago, Rome could pride itself on having the world’s most advanced aqueducts, exporting the technology throughout Europe and the Middle East. Today, the city is literally running out of water — thanks in part to its crumbling infrastructure. One-third of the city’s residents are set to have their water supply cut off for eight hours every day, possibly beginning as early as Friday; different neighborhoods will take turns in sharing the burden. It’s an unprecedented move for a major Italian city, said Giampaolo Attanasio, a public infrastructure expert at the advisory firm Ernst & Young. But it may soon be routine. "Rome could be just the beginning. If the situation doesn’t improve, other large cities will have to ration water as well," Attanasio said in a telephone interview. "Small towns already have."The main culprit, experts say, is climate change. In 2017, Italy experienced its second-hottest spring in the past 200 years, according to a report by Italy's Institute of Atmospheric Sciences and Climate. Spring rainfall decreased by 50 percent compared with the seasonal average, the same report said, and nearby Lake Bracciano, from which the city gets part of its water supply, is drying up at an alarming rate: The water level has fallen by 1 centimeter every single day. Under current conditions, the lake can no longer afford to send its water to Rome. Without that supply, ACEA, Rome's water company, says it will no longer be able to provide residents with water 24 hours a day. "The situation is unbelievable," said Nicola Zingaretti, the governor of the region in which Rome sits, during an interview on Italian TV. "I’d like to invite Donald Trump here [in Bracciano] to show him what happens when one doesn’t respect climate change agreements."
Cameroon's forest people pay price for country's hydropower ambitions | Reuters: - Mokuine Anatole sharpens his machete in the early morning sunlight, ready for a day’s hunting. But the planned expedition won’t take place on the land around his village, as it used to. Just 2km away, the formerly fresh air smells of gasoline, and the silence of the surrounding forest is broken by the honking and rumbling of cars and bulldozers. The forest along the confluence of the Lom and Pangar rivers is being cleared to prepare the second phase of construction of the Lom Pangar dam, a government hydropower project that will produce 30 megawatts (MW) of electricity upon completion. As a result, Anatole now must venture about 25km (15 miles) away from home to hunt. He and other members of similar forest communities complain that their needs are being disregarded as Cameroon’s government pushes to bring electricity to more of the country. Environmentalists are sounding alarms too. “This hydro-dam project has made life perilous for us,” Anatole told Thomson Reuters Foundation. “The first phase of the project has brought human encroachment, destroyed our forest land and is scaring away all the animals. We are obliged to go farming and hunting far away, where we can find something to eat.” Cameroon’s government is touting the construction of three new dams along the Sanaga River and its tributaries as a way to increase hydro-electric generation as part of the country’s ambitious plans to become an emerging economy by 2035. The river is the country’s primary water source and already has two dams downstream from the new sites. But environmental experts say the plans threaten the biodiversity of the river basin and its surrounding rich forest, as well as the survival of indigenous communities that rely on natural resources.
As a river dies: India could be facing its ‘greatest human catastrophe’ ever - Channel NewsAsia: For farmer Mr Vijayakumar, 52, the rice crop was his family’s sole source of income. Hit by the double whammy of crop failure and mounting debts, he took a lonely walk to the edge of his two-acre rice field in Tamil Nadu in January this year. There the tough, rugged man, used to the hard toil of a farmer for decades, hanged himself from a nearby tree.He is just one of roughly 350 farmers who have died in Tamil Nadu in recent months, according to unofficial estimates. In the past 20 years, more than 300,000 indebted farmers in India have committed suicide - many due to family debts, reported The Hindu newspaper. Years of scanty and inadequate rainfall have led to the drying up of water reservoirs and village water bodies in southern India, especially the grain-growing regions of Tamil Nadu which is facing its worse drought in 140 years. Water activist Dr Rajendra Singh said: “We have not seen a drought of this intensity before. People have lost hope in life and are committing suicide.” “People are leaving the villages and moving to the cities… They don’t have food to eat and water to drink. There is no fodder for the livestock,” The once-mighty 800km Cauvery River, a major lifeline in southern India on which millions of farmers depend, has turned into dust tracts in several sections before it trickles down to the Bay of Bengal. Dense forests once helped to retain water on the hill slopes, enabling slow percolation into the streams that feed the river. But widespread deforestation along the Cauvery Basin has led to soil erosion and a reduction in rainfall.
Denver makes a big ask—and a bold promise—with demand for Colorado river water -- In the West, water wars never really end — they just fade away, only to re-emerge during a drought, or when there’s a new proposal to build another dam or divert a river through a mountain range. The latest flare-up, not surprisingly, is about the 1,450-mile-long Colorado River, born in crystal clear springs in the Rocky Mountains of Colorado and Wyoming. In wet years it reaches the Gulf of California as a muddy trickle. In dry years, it vanishes in the dust before empties into the sea, and long before it satisfies all the claims that have been made on it. In early July, Denver Water, Colorado’s largest water provider, won a crucial permit from the federal government to once again tinker with the plumbing and make the river work just a little bit harder. The $360 million Moffat Tunnel Collection System expansion project would divert more water (about 4 billion gallons per year) from the Fraser River, one of the Colorado’s primary tributaries, west of the Rockies’ crest. The water would be shunted eastward through the existing six-mile Moffat Tunnel beneath the Rockies, emerging near Boulder and emptying into Gross Reservoir, where an existing dam would be heightened by 131 feet. River conservation advocates say Denver’s plan is an expensive boondoggle and will further dry up the Colorado and some of its key mountain tributaries that have already been severely depleted. Before the ink was dry on the U.S. Army Corps of Engineer permit, the watchdog group Save the Colorado said it would likely challenge the decision in court. “It’s an extraordinary waste of money to be building dams. The vast majority of this is about grass and lawns. This is immoral in my opinion.”
2017 is so unexpectedly warm it is freaking out climate scientists - Joe Romm -- Normally, the hottest years on record occur when the underlying human-caused global warming trend gets a temporary boost from an El Niño’s enhanced warming in the tropical Pacific.So it’s been a surprise to climate scientists that 2017 has been so remarkably warm — because the last El Niño ended a year ago. The National Oceanic and Atmospheric Administration (NOAA) reported Tuesday that the first half of 2017 was the second-warmest January-June on record for Earth, topped only by 2016, which was boosted by one of the biggest El Niños on record. “As if it wasn’t shocking enough to see three consecutive record-breaking years, in 2014, 2015, and 2016, for the first time on record,” leading climatologist Michael Mann wrote in an email to ThinkProgress, “we’re now seeing near-record temperatures even in the absence of the El Nino ‘assist’ that the previous record year benefited from.” NOAA climatologist Ahira Sanchez-Lugo told Climate Central, “After the decline of the strong El Niño, I was expecting the values to drop a bit…. This year has been extremely remarkable.” Usually we see global records in years when the short-term El Niño warming adds to the long-term global warming trend (see chart below). As NOAA noted in its March report, without an El Niño, no month before March 2017 had ever exceeded the “normal” temperature (the 1981–2010 average) by a full 1.8°F (1.0°C). This matters because when a month — or six-month period — sees record high global temperatures in the absence of an El Niño, that is a sign the underlying global warming trend is stronger than ever. The latest NOAA report is “a reminder that climate change has not, despite the insistence of climate contrarians ‘paused’ or even slowed down,” Mann said.
Explainer: How data adjustments affect global temperature records -- Over the past two centuries, the times of day, locations and methods of measuring temperature have all changed dramatically. For example, where once researchers lowered buckets over the side of ships to collect water for measuring, we now have a global network of automated buoys floating around the oceans measuring the water directly.This complicates matters for scientists putting together a long-term, consistent estimate of how global temperatures are changing. Scientists must adjust the raw data to take into account all the differences in how, when and where measurements were taken.These adjustments have long been a heated point of debate. Many climate sceptics like to argue that scientists “exaggerate” warming by lowering past temperatures and raising present ones.Christopher Booker, a climate sceptic writing in the Sunday Telegraph in 2015, called them “the greatest scientific scandal in history”. A new report from the rightwing US thinktank, the Cato Institute, even claims that adjustments account for “nearly all the warming” in the historical record.But analysis by Carbon Brief comparing raw global temperature records to the adjusted data finds that the truth is much more mundane: adjustments have relatively little impact on global temperatures, particularly over the past 50 years. In fact, over the full period when measurements are available, adjustments actually have the net effect of reducing the amount of long-term warming that the world has experienced.
Warm spells in Arctic stunt crop yields across US, study suggests -- Unusually warm periods in the Arctic stunt vegetation growth and crop yields across North America, a new study suggests. The study is a new angle on the relatively recent area of research connecting rapid warming in the Arctic with the weather of mid-latitude regions. Reduced plant and crop growth is down to two factors, the researchers say: severe cold in northern North America and dry conditions in south-central US. These are both linked to very warm spring temperatures in the Arctic, the study says. But while the study adds to the weight of evidence that there is a connection between a warm Arctic and mid-latitude weather, it doesn’t tackle the “critical question” of whether one causes the other, another scientist tells Carbon Brief. Temperatures in the Arctic are increasing around three times as fast as the global average – a phenomenon known as Arctic amplification. One of the main reasons is the loss of sea ice in the region. As the extent of the sea ice declines, energy from the sun that would have been reflected away is instead absorbed by the ocean.In addition to the direct impacts of rapid Arctic warming – most notably the loss of sea ice – scientists also think that it could be having an indirect effect on weather patterns in the mid-latitude regions of the northern hemisphere.This relatively recent – and sometimes controversial – area of research has linked a warming Arctic with very cold winters in the UK, North America and Central Asia, as well as longer-lasting summer heatwaves in Russia. The new study, published in Nature Geoscience, takes the theory a step further – not only linking a warm Arctic to unusual weather patterns in North America, but also to the impacts on plant growth and crop yields.
Brutal Drought in the West Is Decimating This Year’s Wheat Crop -- Conditions in the American West, especially in the Dakotas and northeastern Montana, are dire. The government’s own data, gathered by the US Drought Monitor Map, indicate an “exceptional drought” condition in patches of these three states. Here’s the definition of that rating: “Exceptional and widespread crop/pasture losses. Shortages of water in reservoirs, streams, and wells creating water emergencies.” Scary.The drought is so bad, in fact, that an estimated seven out of ten farmers in these areas have chosen not to even attempt to bring their wheat to full harvest, instead baling it early to create hay. That strategy drastically reduces the amount of wheat to be made into flour on the open market, and also reduces the income of those farmers. That hay will be used to feed animals that are unable to graze in the parched pastures of the west, but at a much lower price; hay, even with a spike to about $100 per ton thanks to the drought, fetches typically about 60 percent the price of wheat.The USDA has declared disaster zones in counties in all three states, which triggers aid to farmers, but, according to farmers interviewed by the Insurance Journal, doesn’t cover all costs.In response to the drought and drop in wheat production, the s tock market are having a field day. Normally wheat futures are not particularly active, but some have jumped 40 percent in the past month due to the presumed future shortage. Hard red spring wheat production is expected to drop at least 20 percent this year, although some believe the actual drop may be higher.
Corn Could Be Major Victim of Climate Change - The weather has always been an unpredictable element of agriculture, but climate change is expected to make matters significantly worse. Determining how much worse has historically been a challenge. A new study, however, says climate-induced drought could hit several of the world's major corn producing regions all at once. The Met Office, the U.K.'s national weather service, used a novel approach to determine the probability of severe water stress in three major corn-producing regions that are responsible for 40 percent of global production. Instead of relying on observed historical data—which the researchers found to seriously underestimate the impact of climate change—the new study used a model focusing on water stress. The authors noted the limitations of the study, including its reliance on a single climate model, and they advise researchers to utilize multiple models in the future."Importantly, we find that large-scale water stress is physically possible in locations where it has not been observed in the last 30 years," the researchers found.There are few agricultural products as omnipresent as corn. Thanks to the crop's geographic adaptability and genetic malleability, it has found its way into nearly every part of the Western diet. It's in ketchup, soda, bread and candy. It is the U.S.'s top feed grain, a dietary staple today for cows, pigs and chickens. In 2016, the U.S. harvested nearly 87 million acres, producing 15.1 billion bushels, for a total value of $51.5 billion."We haven't seen a major drought in the U.S. and China in the same year in the last 30 years," said Chris Kent, the lead researcher on the study. "Our simulations indicate that that type of scenario is possible in the current climate."
Wildfire Season Is Scorching the West -- The West is ablaze as the summer wildfire season has gotten off to an intense start. More than 37,000 fires have burned more than 5.2 million acres nationally since the beginning of the year, with 47 large fires burning across nine states as of Friday. The relatively early activity is quickly becoming the norm, with rising temperatures making the fire season longer than it used to be. The warming fueled by greenhouse gases is also helping to create more and larger fires as it dries out more vegetation that acts as fuel for fires.This new fire situation means that western states need to be begin to rethink how they prepare for and combat fires, as well as how fire-prone land is developed. Five large fires (those of 1,000 acres or more) are currently raging across California, the largest of which is the Detwiler fire near Yosemite National Park, which has burned more than 80,000 acres since it ignited on July 16. That fire is now 75 percent contained, but it destroyed dozens of buildings, including 63 homes.
Wildfires are about to go from bad to worse in California - It’s wildfire season out west, and after a record-hot June dried out many areas, the prognosis is slightly worse than average for certain areas, especially California. But luckily there is relief in sight for the Four Corners region of Utah, Colorado, New Mexico and Arizona. Meanwhile, a number of fires have sprouted up in the Pacific Northwest. The most concerning of the seven large wildfires in California is the Detwiler fire, which has driven thousands from their homes and is threatening the town of Mariposa outside Yosemite National Park. The blaze, which has reached 48,000 acres in size, according to the National Interagency Fire Center, is only 7 percent contained. More than 3,000 firefighters are battling it. In total, fires are spread throughout more than 217,000 acres in California, an area about 10 percent larger than New York City. Jeff Weber, a scientist with the University Corporation for Atmospheric Research in Boulder, Colorado, says there isn’t likely to be any near-term relief for California. As with other Southwestern states, like Arizona and Nevada, California had an “anomalously hot” June, with many towns reporting record high temperatures for the month. (Arizona reported the hottest June on the books.) It’s the dry season for Cali, he notes, with significant rainfall not expected until the winter. The only hope for significant rains would be if some tropical storm systems from the eastern Pacific made their way north, which is possible but isn’t in the cards in the near future. “There have been a number of systems, but they’re far south,” Weber says. “Other than that, there’s not much hope for California to get much rain, and…probably we’ll continue to see wildfires get worse.”
Dramatic photos show how huge wildfires are ravaging France, forcing 10,000 people from their homes -- Southern areas of France have been ravaged by wildfire over the past few days, as several enormous areas of countryside caught fire at once. Tens of thousands of acres caught fire during the course of this week, as firefighters wage a running battle to keep the blazes under control.The worst of the burning has been along France's Mediterranean coast, around the chic tourist resort of Saint-Tropez, and on the island of Corsica.On Wednesday morning, French officials confirmed that 10,000 people had been evacuated in the Provence-Alpes-Côte d'Azur region of the country. These dramatic news photographs show how the fires burned through the night, leaving little more than scorched earth behind:
How wildfires could radically change forests — and your life - Boreal wildfires in Canada are spectacular displays of nature’s force — they burn across hundreds of thousands of kilometres and can last for months, sometimes smouldering right through the winter. These fires tend to occur in remote regions that simply cannot be managed. And their zone of impact is much wider than most people ever imagine as soot, ash and smoke drift in long-range atmospheric circulation patterns across geopolitical borders, affecting air quality around the world. Over the past 5,000 years, repeated cycles of burning followed by vegetation recovery have allowed conifer forests to flourish into the great forested biome that today covers much of Canada. But multiple lines of evidence are now telling us a convincing story that boreal fires are changing — they are getting bigger, larger, and more intense, particularly in northwestern Canada. And if this continues, there is a good chance that the next years of wildfire will cause fundamental changes to our iconic northern forests. Conifer trees need fire. Following light or moderate fire activity, trees like black spruce often regenerate immediately. But when northern forests burn too severely, deciduous trees like aspen and birch can outcompete conifers during post-fire succession. A loss of conifer forest area would mean big changes for how the boreal biome interacts with the Earth’s climate system. The consequences of fire-induced shifts in the structure of boreal forests would be far ranging from small-scale changes in biodiversity to global-scale changes in albedo (the amount of the sun’s energy reflected back into space) and greenhouse gas emissions.
93 Degrees In Siberia As Wildfires Rage For Hundreds Of Miles Just Below Arctic Circle -- It’s forecast to be 79 degrees in New York City today. It hasn’t broken 90 all Summer. Yet wildfire and extreme heat ravage the land of frozen tundra, “permafrost”. While attention is focused on wildfire and extreme heat in the American southwest, this crazy shit is happening, right below the ARCTIC FUCKING CIRCLE. I talked about basically the same thing this time last year. This is not good. Understand, that “permafrost”, contains twice as much carbon as is present in the atmosphere. And when it starts to warm and burn, it releases not only copious amounts CO2, but another heat amplifying and less discussed greenhouse gas, methane. This is the element in this burning hellscape that has the potential to trigger even more dangerous global warming. Human activities have no doubt created the conditions for this life extinguishing madness to occur, but it’s not likely humans can affect or retard the progression of these non-linear positive feedback loops once they’ve been triggered. These fires will likely burn year round, and will only intensify as temperatures rise and humans wean themselves off fossil fuels; thus removing the sulfate aerosols that have masked a significant percentage of human generated warming. Tick, tick, tick, tick, tick, tick, tick, tick, tick, tick, tick…..
Here’s How Much Arctic Sea Ice Has Melted Since the ‘80s - Arctic sea ice has been melting at a steady clip this summer as it heads toward its annual low point. But a new chart shows that with nearly two months still left in the melt season, sea ice area is already below what would have been a yearly low in the 1980s. The comparison shows the clear long-term decline of Arctic sea ice fueled by the global rise in heat-trapping greenhouse gases. The dramatic shrinkage of sea ice over the past few decades is driving major changes, from the loss of crucial Arctic habitat to the potential influence of weather patterns around the world. The graph, put together by Zack Labe, a Ph.D. student at the University of California, Irvine, shows the area of the Arctic covered by sea ice right now and compares it to the averages throughout the melt seasons of the 1980s, 1990s, and 2000s. It is clear that with about 50 days of the melt season still to go, sea ice area is already below the point where it would have bottomed out for any year in the 1980s. Arctic sea ice reflects incoming solar rays back to space, helping to regulate the planet’s temperature. But as human activities have released more and more greenhouse gases into the atmosphere, the ensuing warming has caused ice to melt. That melt means more of the ocean is open and absorbs solar energy, raising temperatures more and driving more melt in a vicious cycle. Temperatures in the Arctic are rising at twice the rate of the planet as a whole, and the accompanying ice loss means that walruses and polar bears are losing critical habitat, more of the fragile local ecosystem is being opened up to shipping, and waves from storms can more easily batter coastal settlements. The reduced amount of sea ice may also be causing heat to be released into the atmosphere that is altering wind patterns and weather over the U.S., Europe and Asia.
Multiyear Arctic ice is effectively gone: expert (Reuters) - The multiyear ice covering the Arctic Ocean has effectively vanished, a startling development that will make it easier to open up polar shipping routes, an Arctic expert said on Thursday. Vast sheets of impenetrable multiyear ice, which can reach up to 80 meters (260 feet) thick, have for centuries blocked the path of ships seeking a quick short cut through the fabled Northwest Passage from the Atlantic to the Pacific. They also ruled out the idea of sailing across the top of the world. But David Barber, Canada's Research Chair in Arctic System Science at the University of Manitoba, said the ice was melting at an extraordinarily fast rate. "We are almost out of multiyear sea ice in the northern hemisphere," he said in a presentation in Parliament. The little that remains is jammed up against Canada's Arctic archipelago, far from potential shipping routes. Scientists link higher Arctic temperatures and melting sea ice to the greenhouse gas emissions blamed for global warming. Barber spoke shortly after returning from an expedition that sought -- and largely failed to find -- a huge multiyear ice pack that should have been in the Beaufort Sea off the Canadian coastal town of Tuktoyaktuk. Instead, his ice breaker found hundreds of miles of what he called "rotten ice" -- 50-cm (20-inch) thin layers of fresh ice covering small chunks of older ice. "I've never seen anything like this in my 30 years of working in the high Arctic ... it was very dramatic," he said. "From a practical perspective, if you want to ship across the pole, you're concerned about multiyear sea ice. You're not concerned about this rotten stuff we were doing 13 knots through. It's easy to navigate through."
Sea level fears as Greenland darkens - BBC News: Scientists are "very worried" that the melting of the Greenland ice sheet could accelerate and raise sea levels more than expected. They say warmer conditions are encouraging algae to grow and darken the surface. Dark ice absorbs more solar radiation than clean white ice so warms up and melts more rapidly. Currently the Greenland ice sheet is adding up to 1mm a year to the rise in the global average level of the oceans. It is the largest mass of ice in the northern hemisphere covering an area about seven times the size of the United Kingdom and reaching up to 3km (2 miles) in thickness. This means that the average sea level would rise around the world by about seven metres, more than 20ft, if it all melted. That is why Greenland, though remote, is a focus of research which has direct relevance to major coastal cities as far apart as Miami, London and Shanghai and low-lying areas in Bangladesh and parts of Britain.A five-year UK research project known as Black and Bloom is under way to investigate the different species of algae and how they might spread, and then to use this knowledge to improve computer projections of future sea level rise. The possibility of biologically inspired melting was not included in the estimates for sea level rise published by the UN's climate panel, the IPCC, in its latest report in 2013.
Melting Greenland Could Raise Sea Levels by 20 Feet - Two miles thick and covering an area seven times the size of the United Kingdom , Greenland's ice sheet is huge. It's also melting. As the ice melts, it gives way to water, which is darker and absorbs far more sunlight, causing more ice to melt in a vicious cycling. Even worse is the proliferation of dark colored algae , which warm weather has allowed to flourish. In general, the white color of snow reflects nearly 90 percent of the sun's radiation , but the dark colored algae reflects only around 35 percent, and sometimes drops to a dangerous 1 percent in the darkest colored spots. At the current rate of melting, the ice sheet adds 1 millimeter a year to the global average sea level. Using these numbers, the UN Climate Change panel reported in 2013 that, worst case scenario, Greenland's melting ice sheets would raise water levels 98 centimeters, or 3.2 feet, by the end of the century. And now, it seems, that assessment is too modest. Over the last 20 years, Greenland has been losing more ice than it gains each winter . Glaciologist Dr. Andrew Tedstone told BBC that the algae has not even reached maximum darkness, and melting will get worse. According to Dr. Joe Cook , a glacial microbiologist at Sheffield University, it would not even take the whole ice sheet melting to dangerously raise sea levels .
How Distant Winds May Be Causing Antarctic Meltdown -Estimates of just how much sea levels will rise and inundate coastal areas vary widely. One of the reasons is that scientists just aren’t sure how quickly the vast ice sheets of Antarctica might melt into the sea because of the myriad triggers causing the ocean warming that is fueling that melt. New research suggests one more unexpected culprit: Changing winds at one end of the continent could actually be setting off a series of changes, like a set of falling dominoes, that pushes warm water below the ice at the other end, thousands of miles away. Finding these pieces of the Antarctic melt puzzle and putting them together will help scientists better pin down how much sea level rise is in store as the world warms, and when cities from Miami to Shanghai may largely disappear from the map. Sea levels have already risen by about 8 inches since the beginning of the 20th century from a combination of melting polar ice and the expansion of ocean waters as they absorb some of the excess heat trapped by human-emitted greenhouse gases. And while 8 inches may not seem like much, it is already causing more costly damage from coastal flooding. The last Intergovernmental Panel on Climate Change report estimated that the world could see another 10 to 40 inches of sea level rise by 2100, but that is considered a fairly conservative estimate. More recent research has suggested that Antarctic melt alone could push sea levels up by 3 feet by the end of the century, which would devastate coastal communities around the world.
Mammoth Antarctic iceberg is on the move, while the ice shelf it left behind grieves its loss -- The Delaware-sized iceberg that calved off the Larsen C Ice Shelf in Antarctica sometime between July 10 and July 12 is drifting farther from its former home, while breaking into smaller pieces. More importantly, new cracks are appearing in the ice shelf that could portend the creation of additional icebergs and the possible destabilization of larger parts of the ice sheet, which holds back land-based ice from flowing into the sea and raising sea levels. Satellite imagery from the Landsat 8 satellite as well as the the camera aboard the European Space Agency's (ESA) Sentinel-1 satellite are helping scientists keep tabs on the gargantuan iceberg despite the shroud of darkness during the Antarctic winter season. Images released by NASA and the ESA show the iceberg's evolution and the beginnings of how the ice shelf is responding to losing such a large piece of itself. According to NASA, the main iceberg, known as A-68A, continues to move northward, away from the Larsen C Ice Shelf. Meanwhile, it has already lost several small chunks. Recent satellite photos also show three small icebergs forming to the north of where the main iceberg had been attached to the ice shelf. Researchers affiliated with a U.K.-based initiative, known as Project MIDAS, report that a new rift appears to be developing in the ice shelf that could extend to a higher elevation point, known as the Bawden Ice Rise. That area is considered to be "a crucial point" for stabilizing the ice shelf, and if it were to be weakened in some way it could speed the breakup of the shelf.
Rising seas threaten scores of species on Pacific islands with extinction -- The Chuuk flying fox. The Black-spotted Cuscus. The Fijian crested iguana. The Mariana skink. The greater monkey-faced bat. Poncelet’s giant rat.Not exactly household names, but these creatures have something in common: they’re all critically endangered and they all live on islands in the Pacific Ocean that are at high risk from rising sea levels.That’s the conclusion of a new study, published in the Nature journal Scientific Reports, which maps the distribution of 150 threatened species living on Pacific islands and their susceptibility to sea level rise.Some of these creatures are found on just a single island, so losing their habitats to encroaching seas would mean global extinction, the lead author tells Carbon Brief.The new study focuses on a stretch of the southern Pacific Ocean from Palau in the west to the Pitcairn Islands in the east. Within this 85m square kilometre (sq km) area are more than 2,000 islands.These islands come in all shapes and sizes – most are volcanic or reefs – but they are predominantly small and low-lying. Their average size is just 1.3 sq km – some are just a tenth of that size – and 42% of them have a maximum elevation of less than 10m. These characteristics put the islands – and the species that live on them – at particular risk from sea level rise, storms and high waves, the study says.On small islands, land-based creatures have fewer places to move to when their habitats are lost. In addition, through evolution, many island-living species no longer have the traits that would have helped them move on – for example, many birds and insects have lost their ability to fly.Putting all these factors together, species living on these Pacific islands are “highly vulnerable to extinction”, the paper says. Indeed, the 1,779 islands assessed in the study area are home to 150 amphibians, mammals and reptiles that feature on the International Union for Conservation of Nature’s (ICUN) Red List of Threatened Species. Fifty-one of these species are classed as “Vulnerable”, 61 as “Endangered” and 38 in the most at-risk category of “Critically Endangered”. Eighty-four of the 150 species aren’t found anywhere else on Earth. Fifty-four of them – such as the Giant Bandicoot, the Goodfellow’s tree-kangaroo and the Taom Striped Gecko – can only be found on a single island. Eleven species live on two islands and the remaining 29 live on three or more.
What is the Cost of One Meter of Sea Level Rise?- Union of Concerned Scientists -- 100 years of data from tide gauges and more recently from satellites has demonstrated an unequivocal rise in global sea level (~8-10 inches in the past century). Although regional sea level varies on a multitude of time scales due to oceanographic processes like El Niño and vertical land motion (e.g., land subsidence or uplift), the overall trend of rising sea levels is both undeniable and accelerating. Nevertheless, variability breeds doubt. Saying that global warming is a hoax because it’s cold outside is like saying sea level rise doesn’t exist because it’s low tide. Global sea level is currently rising at 3–4 mm/year, making it a relatively slow process. For instance, tides typically change sea level by 0.5-1.0 m every 12 hours, a rate that is ~100,000 times faster than global mean sea level rise.It’s almost as if sea-level rise were slow enough for us to do something about it… Anders Levermann said “No one has to be afraid of sea level rise, if you’re not stupid. It’s low enough that we can respond. It’s nothing to be surprised about, unless you have an administration that says it’s not happening. Then you have to be afraid, because it’s a serious danger.” Levermann’s quote captures the challenge of sounding the whistle on the dangers of climate change. As a thought experiment, try to quantify the economic value of one meter of sea level rise. Low-lying coastal regions support 30% of the global population and, most likely, a comparable percentage of the global economy. Even if each meter of sea level rise only affected a small percentage of this wealth and economic productivity, it would still represent an astronomically high dollar figure.
The UK Climate Change Act – nine years on and still no plan -- The Climate Change Act, which committed the UK to an 80% reduction in greenhouse gas emissions below 1990 levels by 2050, was passed by a near-unanimous vote of Parliament in 2008. One would have thought that progress would by now have been made towards developing detailed plans to achieve this ambitious goal, but it hasn’t. The UK government still has no more idea how to go about making the major emissions cuts the Act mandates than it did to begin with. Here we review some of the proposals that government agencies have so far made, finding that none of them comes close to qualifying as what might be termed a workable plan. The government, however, remains unconcerned. The 2050 deadline is apparently still too far distant for politicians to worry about.
Juliana v. United States and the Principle of Intergenerational Equity in Climate Change Law -- The best shot at large-scale climate action under the Trump administration might lie with a lawsuit set to go to trial early next year. Juliana v. United States has a plot suitable for a Disney movie: An eclectic group of 21 kids (and their lawyers) fighting to save the world by forcing the federal government to adopt a science-based plan to reduce emissions. Their lawsuit got a boost this past week when climate scientist James Hansen published a paper in support of their cause. Legal experts say Juliana has helped open a new front in the battle against climate change in the United States and around the world. It’s the culmination of years of legal strategizing by Our Children’s Trust, the advocacy group that helped organize the effort. Our Children’s Trust has brought related suits in all 50 states, as part of a buckshot strategy to get one of them to break through. “This case is especially crucial in the fight against climate disruption,” says Kassie Siegel, director of the Center for Biological Diversity’s Climate Law Institute. Cases like Juliana, she says, empower young people to advocate for their rights, and that “drives social change.” The buzz about Juliana comes amid a flurry of legal challenges to the Trump administration’s efforts to dismantle environmental rules. Just this week, a series of lawsuits were filed in California as a direct challenge to the oil industry on climate change grounds, using a legal theory similar to the landmark tobacco industry lawsuits of the 1990s. The administration’s quest to roll back or reverse pending Obama-era EPA regulations is also getting blocked in the courts. At the heart of this suit is the principle of intergenerational equity. In essence, the 21 plaintiffs in Juliana say that the federal government’s refusal to take serious action against climate change unlawfully puts the well-being of current generations ahead of future generations. This argument might have helped spur legal action abroad, too. Since Juliana was filed in 2015, similar lawsuits have been brought by youth in Pakistan, New Zealand, and India, Burger says.
U.S. electric industry knew of climate threat decades ago (Reuters) - The U.S. electric industry knew as far back as 1968 that burning fossil fuels might cause global warming, but cast doubt on the science of climate change and ramped up coal use for decades afterward, an environmental watchdog group said on Tuesday. The California-based Energy and Policy Institute, which opposes fossil fuels, cited documents it obtained. It said its research mirrors reporting conducted by InsideClimate News about Exxon Mobil’s early understanding of climate change, which triggered an investigation by New York’s Attorney General. The documents released by the EPI showed the Edison Electric Institute industry group was warned at its annual convention in 1968 by a member of then-President Lyndon Johnson’s administration that carbon emissions from fossil fuels could change the climate and trigger “catastrophic effects.” The electric industry’s research organization, the Electric Power Research Institute, then began studying the issue in the 1970s and produced its own research that included warnings of rising CO2 levels, temperatures, and sea levels, according to the EPI, which provided links to documents supporting its findings. By 1988, the EPRI produced a report that concluded “there is a growing consensus in the community that the greenhouse gas effect is real,” the EPI said. However, "rather than warn the public", the electric industry made long-term investments in coal-fired generation and joined energy industry efforts to block climate regulations - including by lobbying, funding advertisements, and funding scientists skeptical about climate change, the EPI said.
Utilities Knew: Documenting Electric Utilities’ Early Knowledge and Ongoing Deception on Climate Change From 1968-2017 (PDF) Energy and Policy Institute
#UtilitiesKnew, Too, Since 1968 - The U.S. electric utility industry recognized decades ago that burning fossil fuels would lead to increased warming , yet later opposed efforts to shift away from coal , according to a new report . The lengthy report from the Energy and Policy Institute uses reams of archival documents to demonstrate that utility industry representatives knew as far back as 1968 that burning fossil fuels could trigger "catastrophic effects" on the climate. The report also claims that, despite continued research and consensus on climate throughout the 1970s and 80s, the industry continued to make investments in coal, joined coalitions and lobbying groups to oppose climate action and fund climate denier scientists. "Nearly 50 years after scientists began to warn the electric utility industry about climate change, some utilities continue to stand in the way of real progress in addressing the problem," the report said. Dave Anderson, a researcher at the Energy and Policy Institute who uncovered the documents, commented to the Huffington Post about the utility companies: "The evidence suggests they were very much involved in the deliberate deception [about the dangers of carbon emissions] going on at that time. Scientists had been warning for years that they could be a problem, and by the late 1980s, it was pretty clear there was an emerging consensus among scientists."
Is Geoengineering the Answer to Limit Global Warming? - Geoengineering , the deliberate alteration of the planet to undo its inadvertent alteration by humans over the past 200 years, is back on the scientific agenda, with a climate compromise suggested as a possible solution. One group wants to turn down the global thermostat and reverse the global warming trend set in train by greenhouse gases released by fossil fuel combustion, by thinning the almost invisible cirrus clouds that trap radiation and keep the planet warm. Another group proposes to inject sulphur particles into the stratosphere, and keep on doing so for 160 years, to block enough sunlight and lower the planetary temperature. And a third group wants to see a cocktail of both approaches : thin the high cirrus clouds that stop heat from escaping, and at the same pump particles into the stratosphere to scatter the incoming sunlight and limit the disadvantages of each approach by mixing them. All three groups concede that the healthy answer is for humans to fulfill the pledge made in 2015 , and start to reduce fossil fuel emissions so drastically that global average temperatures stay well below the 2°C maximum rise agreed by 197 nations at the Paris climate conference . But the U.S.—has announced its withdrawal from the agreement , scientists have been looking for ways to reverse the potentially catastrophic warming and climate change that is now inevitable if the world continues with its "business as usual scenario." And so, tentatively, and with unpromising conclusions, researchers have looked at ways to alter the planet to protect it from rising temperatures. They have played with the idea of pumping sea water onto the Antarctic mainland ice to increase the mass of ice and slow sea level rise . They have looked at the northern icepack and wondered if making it whiter would increase solar reflection and slow global warming. They have repeatedly investigated ways of reducing the incoming sunlight , usually by pumping sulphate aerosols into the atmosphere, and they have even investigated the possibility of making the ocean more thirsty for carbon dioxide, the most problematic greenhouse gas, by pumping iron into the sea to nourish the photosynthesising algae.
The best way to reduce your personal carbon emissions: don't be rich -- One of the perennial debates around global warming has to do with the role of individual choices. What responsibilities do individuals have to fight climate change? Are people who advocate for political action on climate change hypocrites if they drive to work, fly to climate conferences, or have three children? A new study has pushed that debate back to the forefront and, perhaps inadvertently, demonstrated why it is so goofy. The study, from researchers in Sweden and British Columbia, analyzes 148 separate individual actions available to citizens of the developed world and, drawing on 39 different sources, attempts to calculate their carbon impact. This pretty infographic is the result:As you can see, your lightbulbs and laundry verge on meaningless, carbon-wise. The only “high-impact” actions are ditching your car, flying less, switching to a plant-based diet, and, the biggie, not having a child. That last bit — refraining from procreating — has totally dominated discussion of the study. The implication that people in rich countries should consider not having any, or any additional, children has sparked the usual outrage and counter-outrage, but everyone seems to be missing the point. It is precisely this finding that exposes the silliness of the individual-choices framing. There are three problems with it, each worse than the last.
- 1) Attributing children’s emissions to their parents is unworkable - If I’m responsible for all my kids’ carbon emissions, are my parents responsible for mine? If so, and we don’t want to double-count, then I’m only responsible for my kids’ emissions, so I guess I’m doing pretty well so far. (They’re only 11 and 13.)
- 2) If you want avoided children, the developed world is the wrong place to look. But if you want to slow population growth, the way to do it is in the developing world, through family planning and educating girls.
- 3) Not all children are created equal. By averaging out the impact of a developed-world child into one single figure, the study obscures the single most salient fact about individual carbon emissions, namely that wealthy people produce way more. That’s true not only between countries but within them as well.
Senate confirms David Bernhardt as Interior deputy -- The Senate confirmed David Bernhardt as second in charge at the Interior Department on Monday despite recent claims that he continued to represent a client as a lobbyist after his registration was deactivated.Bernhardt’s confirmation passed by a 53-to-43 vote largely along party lines. Republicans praised Bernhardt, who previously worked as a solicitor at Interior, as an experienced complement to Secretary Ryan Zinke. Democrats called him a “walking conflict of interest” for representing corporate interests opposed to regulations at the department that aim to help clean air and water.Sen. Lisa Murkowski (R-Alaska) called his selection “an excellent choice” because of “his extensive experience and knowledge of issues that are important to Alaskans and western states.” But his work for a client out west, Westlands Water, prompted a nonprofit group to ask the Justice Department to investigate whether he violated the Lobbying Disclosure Act.Bernhardt’s registration as a lobbyist was deactivated in November, but the group, Campaign for Accountability, claimed to have evidence showing that he worked on the water agency’s behalf in the offices of his employer, the Brownstein, Hyatt, Farber and Schreck law firm,which represents big farms and oil companies. There was no indication as to whether he was paid for the work, but the director of the campaign said under the rules that doesn’t matter.“This administration has a lready established a dangerous pattern of putting special interests above the interests of the American people and the health of our public lands,” said Drew McConville, a senior governmental affairs director for the Wilderness Society. “Americans across the country are watching closely, and we are calling on Members of Congress to hold newly-confirmed Deputy Secretary Bernhardt accountable for his actions going forward and insist that our public lands be protected for future generations.”
Scaramucci once called climate change denial ‘disheartening.’ Then he took a job with Trump -- Before he was an adviser to then-candidate Donald Trump, Anthony Scaramucci, the president’s new White House communications director, lamented that some people did not accept the consensus among climate scientists that human activity was warming Earth. It was “disheartening” that so many people dismissed climate change as a “hoax,” Scaramucci tweeted.You can take steps to combat climate change without crippling the economy. The fact many people still believe CC is a hoax is disheartening— Anthony Scaramucci (@Scaramucci) March 11, 2016Among those “many people” of course was then-presidential candidate Trump, who famously tweeted that the concept of global warming was a hoax fabricated by China. Two months after Scaramucci’s plea about climate change, he was hired by Trump — and the certainty with which the wealthy financier spoke about climate science changed. Scaramucci was put on the presidential transition team, where he earned a reputation for lancing with talking heads on television. In a December interview with CNN’s Chris Cuomo, Scaramucci suggested that he was less certain about the science. “I know that the current president believes that human beings are affecting the climate,” he said, referring to President Barack Obama. “There are scientists that believe that that’s not happening.” He continued: “There was an overwhelming science that the Earth was flat, and there was an overwhelming science that we were the center of the world. We get a lot of things wrong in the scientific community. You and I both know that. I’m not suggesting that we’re not affecting the change. I honestly don’t know. I’m not a scientist.”
GOP Science chairman extolls 'benefits' of climate change | TheHill: The chairman of the House Science Committee argued Monday that climate change is real and has numerous benefits in areas like agriculture and shipping. Rep. Lamar Smith (R-Texas), an outspoken skeptic of mainstream climate science, wrote in the Heritage Foundation's Daily Signal that the “benefits of a changing climate are often ignored and under-researched.” “Our climate is too complex and the consequences of misguided policies too harsh to discount the positive effects of carbon enrichment,” he said. Smith said higher carbon dioxide concentrations aid photosynthesis, increasing plant growth, while warmer temperatures would increase growing seasons. Melting ice in the Arctic opens up shipping channels, Smith said, and fossil fuels in general have fueled massive economic growth. Researchers have frequently argued that any benefits to global warming would be far outweighed by drawbacks. For example, Jørgen E. Olesen, a professor at Denmark’s Aarhus University, has found that certain crops in areas like Denmark and Canada will likely fare better in a warmer climate. But much of the rest of the world is expected to experience declining agricultural returns.
Russian pranksters trick Rick Perry into a conversation about pig manure - It was a winding, wonkish and occasionally obscure conversation about foreign coal exploration, natural-gas pipelines and pig manure as a power source. But only one of the men on the line - Energy Secretary Rick Perry - held sway over his nation's energy policy. On the other end of the conversation were Vladimir "Vovan" Kuznetsov and Alexei "Lexus" Stolyarov, who had just added Perry to their list of high-profile hoax victims. "Secretary Perry is the latest target of two Russian pranksters," Energy Department spokeswoman Shaylyn Hynes said in an email to The Washington Post. "These individuals are known for pranking high-level officials and celebrities, particularly those who are supportive of an agenda that is not in line with their governments. In this case, the energy security of Ukraine." The man the pranksters hoodwinked is in charge of the government agency that maintains the nation's stockpile of nuclear warheads and cleans up nuclear waste. During the conversation, which was posted in its entirety on Vesti, a Russian news site, Perry was convinced he was talking to Ukrainian Prime Minister Volodymyr Groysman, who appears to speak through an interpreter. Perry talked about a potential pipeline across the Baltic Sea for Russian gas, cyberattacks on the US power grid, natural-gas exploration in Ukraine and the US withdrawal from the Paris climate accord. "I hope that stepping away from the Paris accord will not have any negative impact with our relationship with the Ukraine," Perry said. "We tried to divorce the politics from this and really just let our record stand, one that I'm very proud of." He also talked about a meeting scheduled for August where they would let American business executives talk about extracting oil and natural gas in Ukraine.
Listen to Rick Perry Get Pranked by the Jerky Boys of Russia - Rick Perry had a phone call with Ukrainian Prime Minister Volodymyr Groysman last week. Well, at least he thought it was the Prime Minister of Ukraine. It was actually two Russian pranksters known locally as the Jerky Boys of Russia. And Perry, as Secretary of Energy, wound up talking to them for a full 22 minutes. Rick Perry, it should be noted, is in charge of America’s nuclear security. As the Washington Post reports, Perry spoke to the pranksters via translator and they touched on everything from the Paris Climate Accord to nuclear power to Russian sanctions. But the big giveaway that Perry wasn’t speaking with a top official from Ukraine was probably when the pranksters told him that the country’s president had developed a new biofuel made of home-brewed alcohol and pig shit. Advertisement Rick Perry, it should be noted, is in charge of America’s nuclear security.“I look forward to being able to visit with the president and getting a more in-depth briefing [on the pig shit-based biofuel],” Perry told the pranksters, believing their story about the president’s biofuel invention. “If that’s the result, then he’s going to be a very, very wealthy and successful man.”Advertisement Rick Perry, it should be noted, is in charge of America’s nuclear security.
U.S. fuel ethanol production continues to grow in 2017 -- Through the first six months of 2017, U.S. weekly ethanol production averaged 1.02 million barrels per day (b/d), an increase of 5% over the same period in 2016. On a weekly basis, U.S. ethanol production set a record of 1.06 million b/d in the week of January 27, 2017, and it has averaged near or above 1 million b/d in every week of 2017 except for a few weeks in April, when ethanol plants typically undergo seasonal maintenance. If ethanol production remains relatively high through the second half of the year, as EIA’s Short-Term Energy Outlook (STEO) expects, 2017 will set a new record for annual fuel ethanol production. Corn is the primary feedstock of ethanol in the United States, and large corn harvests have contributed to increased ethanol production in recent years. The U.S. Department of Agriculture estimates that the United States produced a record 15.1 billion bushels of corn in the 2016–17 harvest year, 11% more than the 2015–16 harvest. Increased corn production and relatively stable corn prices have helped make increased ethanol production more profitable and less susceptible to corn price shocks that had affected ethanol profitability and output in the past. U.S. ethanol plant capacity increased for the fourth consecutive year in 2017, reaching a nameplate capacity of approximately 15.5 billion gallons per year in January. Total ethanol production is expected to reach 1.02 million barrels per day in 2017, a rate equivalent to 15.8 billion gallons. Annual ethanol production is able to exceed capacity for two reasons: new production capacity has likely been added since the January 2017 capacity survey date, and many ethanol plants are able to operate at levels beyond their nameplate production capacity. In the United States, ethanol is primarily used as a blending component in the production of motor gasoline and mainly blended in volumes up to 10% ethanol, also known as E10. In recent years, ethanol production increased as a result of higher Renewable Fuel Standard (RFS) targets and growth in domestic motor gasoline consumption, almost all of which is now blended with 10% ethanol by volume. Demand for higher ethanol blends such as E15 and E85 remains limited.
Ethanol bill defeated in Senate - In a major defeat for the ethanol industry, senators of both parties joined forces late last week to sink a controversial bill that would’ve allowed gasoline with 15 percent ethanol to be sold year-round. The measure had become a flash point on Capitol Hill, dividing both Republicans and Democrats — with senators from ethanol-producing states supporting the bill — while also uniting diverse groups in opposition, such as environmentalists, boaters and motorcyclists. The legislation also represented a key opportunity for the ethanol sector, as the expansion of E15 sales would’ve been a financial boon and, to at least some degree, a marketplace defeat for the oil industry. The bill was co-sponsored by Republican Sens. Deb Fischer of Nebraska and Charles E. Grassley of Iowa, and Democratic Sen. Joe Donnelly of Indiana. Despite that bipartisan support, the legislation in the end was unable to muster enough support in the Senate Environment and Public Works Committee. Committee leaders announced Friday that there would be no action on the bill before the August recess, though it’s unclear whether it’ll be resurrected sometime in the fall. Ethanol sector leaders bemoaned the delay but said the battle for E15 isn’t finished. “We will continue to work with our bipartisan sponsors to enact this bill to provide drivers across the country cleaner fuel options year-round that are better for the environment and save Americans
Trump Is Selling Out the Midwest, Biofuel Industry Says -- As a presidential candidate, Donald Trump spent a lot of time currying the favor of the ethanol industry, barnstorming its rural Midwest base and repeatedly expressing his support for biofuels made from corn and soybeans. He was rewarded in November: Of the 184 counties with an ethanol plant in the U.S., 95 percent voted for Trump, according to data compiled by the Renewable Fuels Association. As president, Trump has continued to pledge that he’ll protect the Renewable Fuel Standard, the 2005 law that requires U.S. oil refineries to blend increasing amounts of ethanol and biodiesel into the nation’s fuel supply. In its 12-year history, the RFS has gained critics on both sides of the political aisle, while also pitting oil companies and refineries (which would rather not have to buy all that corn-based ethanol) against farmers and big agricultural companies. Support for RFS doesn’t split down ideological lines as much as it does down geographical ones, depending on proximity to the Midwestern Corn Belt. On June 21, Trump went to Iowa, which produces more biofuel than any other state, for a campaign-style rally. He reiterated his support for the industry and reminded Iowans how much they need a friend in the White House. “By the way, we’re saving your ethanol industries in the state of Iowa just like I promised I would do in my campaign,” Trump said. “Believe me, they are under siege, folks.” Two weeks later, the U.S. Environmental Protection Agency proposed the first cut to the amount of renewables that have to be blended into the fuel supply. To people in the biofuel industry, many of whom are farmers, the move amounted to an about-face. “If he was looking to do something that would have taken care of the agricultural sector that got him elected, this was a no-brainer,” says Tom Brooks, who runs a biodiesel plant in Farley, Iowa. “That’s the disconnect. It should’ve been a slam-dunk.”
The Bloom Is Still Off (NPK-Dependent, Non-Sustainable, Non-Economically Viable) Algae Biofuels -- Summary
- Algae biofuel has little, if any, potential to significantly offset the global energy demand and growing energy deficit.
- At-scale commercial algae biofuel is still dependent on petroleum and NPK (nitrogen, phosphorus, potassium) fertilizers. All are petroleum dependent and, as such, are finite critical resources.
- The petrochemicals used to produce and process NPK fertilizers and other modern food crop management chemicals are economy-of-scale-sensitive to the scales of the petroleum and petrochemical industries.
- Algae biofuel production still competes economically for depleting finite critical resources with global food production, potentially negatively impacting global food costs.
- Since 2015, when petroleum fuel prices declined significantly, most algae biofuel companies have disappeared or converted to other, higher-value algae products like cosmetics and/or human and animal food oil products.
Running U.S. on Solar Requires Only 100 Square Miles of Panels, says Musk -- Last year, Elon Musk promised to fix South Australia's power problems with a giant rechargeable battery. This year, he's building that battery, which will count as the world's largest once installed. Now Musk is turning his attention to the U.S. and believes it's easily possible to power all of the U.S. using solar power.At the National Governors Association meeting in Rhode Island, Musk explained his solution to powering the entire United States with solar panels, and it sounds surprisingly simple. All Musk would require is two plots of land. The first would be 100 square miles and filled with solar panels. The second would be one square mile and filled with batteries. That's it!One hundred square miles, as Musk pointed out, is "a fairly small corner of Nevada or Texas or Utah."Of course, putting aside a piece of land that big isn't going to happen. Also, it doesn't make sense to rely on one location for all power needs as it would instantly become a target. However, it does show how little is required to fully embrace renewable energy.So instead of a giant plot of land, the same could be achieved with rooftop solar and utility-scale solar plants spread across the U.S. Of course, Musk would love for all those solar panels and batteries to be Tesla/SolarCity branded, and I suspect many of them will, but it's certainly going to be a growth market as renewable continue to get cheaper.Musk also points to wind, geothermal, hydropower and nuclear as transition power sources during the move to solar. And then that leaves gasoline and diesel-dependent vehicles, which Tesla is already working on replacing with electric vehicles.
Renewable energy 'simply won't work': Top Google engineers - Two highly qualified Google engineers who have spent years studying and trying to improve renewable energy technology have stated quite bluntly that renewables will never permit the human race to cut CO2 emissions to the levels demanded by climate activists. Whatever the future holds, it is not a renewables-powered civilisation: such a thing is impossible. Both men are Stanford PhDs, Ross Koningstein having trained in aerospace engineering and David Fork in applied physics. These aren't guys who fiddle about with websites or data analytics or "technology" of that sort: they are real engineers who understand difficult maths and physics, and top-bracket even among that distinguished company. The duo were employed at Google on the RE<C project, which sought to enhance renewable technology to the point where it could produce energy more cheaply than coal.RE<C was a failure, and Google closed it down after four years. Now, Koningstein and Fork have explained the conclusions they came to after a lengthy period of applying their considerable technological expertise to renewables, in an article posted at IEEE Spectrum. The two men write: At the start of RE<C, we had shared the attitude of many stalwart environmentalists: We felt that with steady improvements to today’s renewable energy technologies, our society could stave off catastrophic climate change. We now know that to be a false hope ... Renewable energy technologies simply won’t work; we need a fundamentally different approach. One should note that RE<C didn't restrict itself to conventional renewable ideas like solar PV, windfarms, tidal, hydro etc. It also looked extensively into more radical notions such as solar-thermal, geothermal, "self-assembling" wind towers and so on and so forth. There's no get-out clause for renewables believers here. .
California wholesale electricity prices are higher at the beginning and end of the day - Comparisons of January through June day-ahead hourly electricity prices over the past three years in the California Independent System Operator (CAISO) energy market suggest a growing premium in certain morning and evening hours relative to midday hours. The higher hourly prices in the morning and evening hours reflect a premium for a particular characteristic that not all generators can deliver: the ability to increase output on command. In the electric system, demand must always be met with sufficient generation to maintain grid reliability and to avoid blackouts. Historically, electricity generation was adjusted as customers turned appliances and equipment on and off around the same time each day. The morning and evening hours, when load is either ramping up or ramping down, are often the most challenging hours for grid operators, as they must ensure that the electricity supply changes to match the relatively rapid changes in demand. Recently, the addition of both utility-scale and small-scale solar generators has contributed to steeper morning ramp-down and evening ramp-up periods. Other types of generating units decrease in the morning as solar generation increases with the sunrise and increase in the evening as the sun sets. Flexible generators ramp up and down to follow net load, which reflects demand minus electricity generation from variable resources, such as solar and wind. Net load in CAISO has evolved over recent years. As more solar resources have been added, net load has increasingly fallen during midday when solar output is highest.
Natural gas-fired electricity generation so far this summer is below last year’s level -- The amount of natural gas used for electricity generation, also known as power burn, reached its highest daily level so far in 2017 during the past week, exceeding 41 billion cubic feet (Bcf) on July 20, according to data from PointLogic Energy. Natural gas-fired electricity generation typically peaks at the end of July or the beginning of August because of high demand for air conditioning during that period. Power burn reached a record daily high on August 11, 2016, surpassing 42 Bcf. Power burn from April 1 through July 25 averaged 27.1 Bcf/d, or 7% lower than last year’s consumption over the same period. Although power burn in 2017 is lower than in 2016, it is still relatively high compared with the previous five-year average for that period. Higher natural gas prices relative to last summer explain part of the decrease. The Henry Hub natural gas spot price averaged $2.27 per million British thermal units (MMBtu) from April 1, 2016, through July 25, 2016, compared with $3.03/MMBtu during the same period in 2017. Average natural gas prices at power plants were $1.02/MMBtu higher in the first half of 2017 compared with the first half of 2016, while coal prices were about the same in the first half of both years. Coal and natural gas generated 30% and 34% of U.S. electricity in 2016, respectively—the first year that natural gas-fired electricity generation exceeded coal-fired generation. EIA’s most recent Electric Power Monthly data show that coal provided 30% of utility-scale U.S. electricity generation over the first four months of 2017, while natural gas provided 28%. EIA’s most recent Short-Term Energy Outlook expects that for 2017 as a whole, natural gas and coal will each generate 31% of the electricity in the United States. For 2017 as a whole, EIA forecasts that power burn will average 25.9 Bcf/d, 2.5 Bcf/d (9%) lower than in 2016. Overall electricity generation is expected to be slightly lower than the 2016 level, and natural gas’s share declines because of larger shares from renewable sources (particularly hydropower) and coal-fired generation.
Per capita residential electricity sales in the U.S. have fallen since 2010 -- Following sustained growth through 2010, U.S. residential electricity sales have declined in both absolute and per capita terms. Although changes in the weather are a key driver of year-over-year fluctuations, energy efficiency improvements and economic factors have contributed to the decline in per capita residential electricity sales since 2010. Residential electricity sales per household declined even more than the absolute or per capita declines, decreasing 9% between 2010 and 2016. At the state level, per capita residential electricity sales in 2016 ranged from a high of 6,619 kilowatthours (kWh) per person in Alabama to 1,828 kWh/person in Hawaii. These two states were also the highest and lowest, respectively, in 2010. Although not every state reached its peak per capita residential sales in 2010, only nine states have exceeded their 2010 levels of per capita sales in any year since then.Weather is a significant driver of variation in residential electricity sales in many states. Warm weather increases electricity demand as houses use air conditioners, fans, dehumidifiers, and other equipment to maintain comfortable temperatures. The extent to which cold weather influences residential electricity demand depends on heating fuel choices, but many homes use some form of electric heating in winter months. Several of the states with the highest residential electricity sales per capita, such as Alabama, Louisiana, and Mississippi, are in the South census region, where electricity is more likely to be the main space heating fuel. About 60% of Southern homes heat primarily with electricity compared with 22% outside the South. Some of the states with the largest percentage decline in per capita residential electricity sales were also those with the largest changes in winter weather between 2010 and 2016. Southern states such as South Carolina, Georgia, and Alabama had 25% to 30% fewer heating degree days in 2016 compared with 2010, and each saw double-digit percentage declines in per capita residential electricity sales.
India diverts $25 billion away from clean energy fund - Revenue raised by a tax on coal was originally intended to support renewables, but a Scroll.in investigation revealed it is being spent on an unrelated policy. The Indian government is diverting some $25 billion earmarked for clean energy to an unrelated policy, a national news site revealed on Monday. Narendra Modi’s administration has won plaudits internationally for hiking taxes on coal production and aiming to install 175GW of renewables by 2022. Yet the biggest pot of money raised to support solar, wind and other climate-friendly power sources has been sacrificed to a major reform of India’s goods and services tax (GST). The move was confirmed by the finance ministry in response to a query filed under India’s Right to Information Act by Scroll.in. Since Modi took office in 2014, the coal cess has been raised from 50 rupees a tonne ($0.78) to 400 ($6.21). The idea was to dedicate that revenue to greening the economy. However, only 37% of the money collected between 2010 and 2017 was allocated to the clean energy and environment fund, Scroll.in reported. The rest sat idle, creating a surplus that reached 56,700 crore rupees ($8.8 billion) at the beginning of this financial year, more than 20 times the annual budget of the environment ministry.
Up to 100 Japanese solar PV firms could go bust this year, report finds -- Up to 100 solar PV firms in Japan could face bankruptcy this year, with more than double the number of firms going bust in the first half of this year than the same period in 2016. According to corporate credit research company Teikoku Databank, which surveys companies across various industries and has produced its third report on solar PV company bankruptcies, 50 companies in Japan’s solar sector have already gone out of business in the first six months of 2017. While the market overall has rapidly expanded from the launch of the feed-in tariff (FiT) in July 2012, Teikoku Databank acknowledged that there has been a slowdown in deployment in the past couple of years as the government successively made cuts of 10% or more on an annual basis to the premium prices paid for solar energy fed into the grid. The credit agency said “bankruptcy of solar-related contractors is rapidly increasing”, with solar panel manufacturers also affected. In the first half of 2016, just 23 companies went bankrupt, with this year’s first half’s showing of 50 bankruptcies representing a 2.2x increase. Teikoku Databank forecast that 100 firms in total could go under during 2017.
Shell sees oil demand peaking by late 2020s as electric car sales grow | Reuters: (Reuters) - The world's oil consumption could peak as early as the end of the next decade as electric vehicles become more popular, Royal Dutch Shell RDS.A Chief Executive Ben van Beurden said on Thursday. The prospect of a decline in oil consumption after more than a century of growth as the world switches to burning cleaner fuels is gathering pace. On Wednesday Britain announced plans to ban diesel and gasoline vehicles by 2040, following a similar move by France. "I think they are very welcome announcements, they are also very needed announcements," van Beurden told reporters after Europe's biggest oil company reported a sharp rise in quarterly profits. Under the Anglo-Dutch company's most aggressive scenario of battery-powered vehicles replacing traditional internal combustion engines, consumption of oil will peak in the early 2030s, he said. With a high use of biofuels in the mix, demand could peak by the late 2020s, he added. But oil will still be needed for decades to come as it is likely to remain the main fuel for planes, ships and heavy trucks, van Beurden told reporters. "Even if the UK, France and the Western world in general will all go to 100 percent electric vehicles, that would be great, but that wouldn't be enough... We still have less advanced economics that cannot do that switch," he added.
Shell CEO says his next car will be electric - When the boss of Europe’s biggest listed oil company says his next car will be electric, it says a lot about the future of fossil fuels. Royal Dutch Shell Plc responded to the worst oil-price crash in a generation with its $54 billion takeover of BG Group Ltd., betting that demand for natural gas will rise as the world shifts to cleaner-burning fuels. Now Chief Executive Officer Ben Van Beurden says the next thing he’ll buy is a car that doesn’t depend on either oil or gas to run. Van Beurden will switch from a diesel car to a plug-in Mercedes-Benz S500e in September, a company spokesman said. Chief Financial Officer Jessica Uhl already drives a BMW i3 electric car. “The whole move to electrify the economy, electrify mobility in places like northwest Europe, in the U.S., even in China, is a good thing,” Van Beurden said in an interview on Bloomberg TV Tuesday. “We need to be at a much higher degree of electric vehicle penetration -- or hydrogen vehicles or gas vehicles -- if we want to stay within the 2-degrees Celsius outcome.” The U.K. said Monday it will ban sales of diesel- and gasoline-fueled cars by 2040, two weeks after France announced a similar plan to reduce air pollution and meet targets to keep global warming below 2 degrees Celsius (3.6 degrees Fahrenheit). Carmaker Volvo AB said this month it will manufacture only electric or hybrid vehicles from 2019 onwards.
EVs could fuel 3.5GW UK peak power demand by 2030 -- Electric vehicles (EVs) could potentially increase peak demand for electricity by 3.5GW by 2030. That’s according to National Grid, which forecasts in the long term, they could fuel demand by as much as 18GW – the equivalent capacity of nearly six Hinkley Point nuclear power stations – during peak times by 2050. Its analysis forecasts a “dramatic rise” in EVs, with sales expected to be more than 90% of all cars by 2050.They are projected to reach one million by the early 2020s and nine million by 2030. Demand for electricity is set to be driven initially by EVs but later on by heat demand as the pace picks up to decarbonise heat.However, the ‘Future Energy Scenarios’ report suggests 18GW of additional demand during peak times – a total of 85GW compared to around 60GW today – would be the most extreme scenario without smart charging. In a world where environmental sustainability is a top priority, shared driverless vehicles could potentially make up 50% of EVs. With high consumer engagement, vehicle sharing and off peak charging patterns, demand is forecast to rise by 6GW by 2050.The total amount of renewable generating capacity is forecast to increase by as much as 60% during the same period, with distributed generation reaching 93GW. Electricity storage capacity could grow rapidly to almost 6GW by the end of the decade and National Grid stresses the need for the decarbonisation of heat in order to meet the nation’s 2050 carbon reduction target.
Electric Car Industry Faces A Looming Supply Shortage = “Lithium is the new oil,” goes the saying in electric vehicle (EV) circles. If you haven’t heard the catchy maxim, it means that new-age batteries made from elemental lithium are the energy world’s “in-thing.” By extension, a tank of gasoline containing a cocktail of carbon and hydrogen atoms is passé. I’m a believer that lithium-ion batteries are going to power a lot of cars going forward. It’s a nascent trend that’s just getting started. But my head hurts when running the numbers. The equivalent of 15 thousand cell phone batteries are needed to make one battery for an 80 kWh electric car. So, ramping up raw material inputs to build millions of car batteries a year fills the back of the envelope with scalability issues. Lithium, like oil, is found in the earth’s crust. So are other raw materials—like cobalt and graphite—that are needed to build a typical rechargeable battery. Supplying these for cars, home storage and other potential high-growth markets will require vast global supply chains of extraction, refining, distribution and recycling, not to mention the financial infrastructure to trade the commodities. Yet, the many raw material supply chains for larger-scale batteries are immature relative to the potential market pull. Every few weeks the projections for EV sales steepen. Everyone talks about car and battery plants. Amidst the hype few talk about upstream mines and processing facilities. It’s like being bullish on gasoline cars and refineries, but dismissing the importance of scaling up oil to meet the demand.
UK Bans All New Petrol and Diesel Cars by 2040 - The UK has followed France in banning the sale of new petrol and diesel cars by 2040, as part of its plan to tackle chronic air pollution in cities. The government has been coming under intense pressure to act, with an estimated 40,000 people dying prematurely a year from air pollution. A government spokesman told the press, "Poor air quality is the biggest environmental risk to public health in the UK and this government is determined to take strong action in the shortest time possible. "That is why we are providing councils with new funding to accelerate development of local plans, as part of an ambitious £3bn [$3.9 billion] program to clean up dirty air around our roads." But critics have said the ban is already "too little too late," with many highly critical of the proposals. "Air pollution is poisoning our children and leading to causing avoidable deaths across the country," said Jenny Randerson, opposition Liberal Democrat shadow transport secretary. "Instead of properly fighting this silent killer, the government has flip-flopped, offering tax breaks for cars that they are now banning. The government's feeble attempts to tackle air pollution are too little too late. "The Liberal Democrats have called for all new diesel sales to end by 2025 and a scrappage scheme to help drivers convert to greener vehicles . We are serious about fighting air pollution, this government is not." Former Labour leader Ed Milliband tweeted this morning, "Fear that new car petrol/diesel ban in 23 years time is smokescreen for weak measures to tackle 40,000 deaths a year from air pollution now." Green Party co-leader Caroline Lucas also tweeted, "Welcome start but need urgent plan to cut air pollution *now*—proper clean air zones, funded diesel scrappage, invest in public transport."
Cobalt Production as the Hidden Choke Point on Mass Conversion to Electric Vehicles -- Yves Smith - Marshall Auerback recently introduced us to Jack Lipton, who has written extensively on natural resource issues of supply and demand, focusing on the underlying drivers of economics and human nature.Jack has a post coming soon on how China is managing the prospect of resource constraints, and in the meantime, sent a short and informative e-mail on the UK’s government’s plan to ban all diesel and petrol vehicles from the roads by 2040. An overview from the BBC: New diesel and petrol cars and vans will be banned in the UK from 2040 in a bid to tackle air pollution, the government has announced. The Telegraph reports that upgrading the grid to handle the intended shift to electric and hybrid vehicles would be a “tall order” and the UK would wind up increasing its electricity imports from 10% to 30%. But Jack highlights an even bigger impediment: cobalt production. Via e-mail: The 200+ mile on a single charge range of a Tesla using a 60-80 KWh battery requires 19kg of cobalt. 30 million such vehicles would therefore require 570,000 t of cobalt, which would be immobilized (taken out of the market) for 5-8 years (the currently projected lifetime of the Li/Co type of battery used in the Tesla. This is nearly 5 times todays annual output of new cobalt production.. So the UK’s less than 1% of the globe’s people would require by 2040 around 20% of the world’s production of new cobalt at today’s production rate to completely eliminate fossil fuel powered cars and replace them with vehicles with a 200+ mile range. China in the meantime has mandated 5,000,000 EVs to be on the road in their country by 2020! This would require 95,000 t of cobalt immobilized in Chinese batteries within 3 years. This WILL require about 30% of all global new cobalt production between now and the end of 2020. All of this of course is predicated upon all of the EVs being pure long range types. But even if only half of them, or less, are of this type the IMMOBILIZATION of the world’s production of cobalt in operational EVs and the absolute limit of the new production of Cobalt, which is produced 95%+ ONLY as a byprodcut of the mining of base metals such as Copper and Nickel, will limit the production of new EVs to a maximum dictated by only what is produced new each year plus what is EVENTUALLY recycled.
US Coal Exports Boomed Under Trump -- U.S. coal exports were nearly 60 percent higher in the first three months of the Trump administration than at the same time last year, according to federal data. It’s good news for the coal industry, which is one of President Donald Trump’s favored constituencies. Declining exports in the final years of the Obama administration was a major thorn in the industry’s side, but now economics and some political factors have collided to give the industry some breathing room. Coal companies exported more than 22 million short tons of steam and metallurgical coal between January and March 2017, the Energy Information Administration (EIA) reported Tuesday. Asia and Europe saw the biggest increases in U.S. coal imports from last year. EIA projects “coal exports to slow in the coming months, with total 2017 exports forecast at 72 [million short tons (MMst)], 11 MMst (19%) higher than the 2016 level.” The boom in coal exports started in October 2016 as prices increased. Some of the biggest customers for U.S. coal were China and Japan. China saw its coal imports grow from more than 123,000 short tons in the first quarter of 2016 to nearly 736,000 short tons this year. China is using more U.S. coal to fuel its steel industry in lieu of North Korean coal being targeted by the U.S. and other powers. Chinese officials forced North Korean coal tankers to turn home in April the day after President Donald Trump authorized an airstrike on Syrian air bases. Japan is using more U.S. coal to replace nuclear power after the Fukushima Daiichi disaster in 2011. Coal is much cheaper than natural gas, despite Japan’s promising to cut greenhouse gas emissions as part of the Paris climate accord. Japan has plans to build 45 new coal plants in the coming years. South Korea has also drastically increased its reliance on U.S. coal. The country nearly doubled its coal imports from 1.1 million short tons in early 2016 to 2.1 million short tons in early 2017, according to EIA data.
U.S. coal exports soar, in boost to Trump energy agenda, data shows (Reuters) - U.S. coal exports have jumped more than 60 percent this year due to soaring demand from Europe and Asia, according to a Reuters review of government data, allowing President Donald Trump's administration to claim that efforts to revive the battered industry are working. The increased shipments came as the European Union and other U.S. allies heaped criticism on the Trump administration for its rejection of the Paris Climate Accord, a deal agreed by nearly 200 countries to cut carbon emissions from the burning of fossil fuels like coal. The previously unpublished figures provided to Reuters by the U.S. Energy Information Administration showed exports of the fuel from January through May totaled 36.79 million tons, up 60.3 percent from 22.94 million tons in the same period in 2016. While reflecting a bounce from 2016, the shipments remained well-below volumes recorded in equivalent periods the previous five years. They included a surge to several European countries during the 2017 period, including a 175 percent increase in shipments to the United Kingdom, and a doubling to France - which had suffered a series of nuclear power plant outages that required it and regional neighbors to rely more heavily on coal. "If Europe wants to lecture Trump on climate then EU member states need transition plans to phase out polluting coal," said Laurence Watson, a data scientist working on coal at independent think tank Carbon Tracker Initiative in London. Nicole Bockstaller, a spokeswoman at the EU Commission's Energy and Climate Action department, said that the EU's coal imports have generally been on a downward trend since 2006, albeit with seasonable variations like high demand during cold snaps in the winter. Overall exports to European nations totaled 16 million tons in the first five months of this year, up from 10.5 million in the same period last year, according to the figures. Exports to Asia meanwhile, totaled 12.3 million tons, compared to 6.2 million tons in the year-earlier period.
Cheney bill on federal coal leasing goes before House - Wyoming’s coal industry has rebounded from the dire circumstances of a year ago, when its three largest companies were in bankruptcy and stockpiles of coal sat idle at power plants and mines across the country.Those companies have since restructured, wiping away billions in debt in the process. And the overstock of coal has largely burned down. Wyoming companies, energy experts and environmentalists agree that a new normal has set in for coal in Wyoming, where companies are operating at lower costs and producing less coal with fewer miners. It is a time for tightening belts and operating efficiently, not expanding.There is less agreement, however, when it comes to allowing new coal leases on federal land.On Thursday, the U.S. House will hold a hearing on a bill sponsored by Rep. Liz Cheney. The measure would make any attempt to halt leasing for coal mining on public land subject to congressional approval. Getting that consent from the House and the Senate would also be subject to a swift 30-day timeline.Opinions on future leasing of Wyoming’s coal today haven’t changed since leasing was halted on federal lands in 2016, under then-President Barack Obama.The moratorium on new leases was put in place to allow federal agencies time to review the government's program for federal coal, which hadn’t been done in decades, the administration said.Wyoming, where the bulk of the nation’s coal is mined, hadn’t seen a new lease in years, to the detriment of public school facilities that depend on coal lease income to build and maintain K-12 buildings.The moratorium became a rallying cry for those in industry who viewed the Obama Administration as an aggressor, bent on constricting the coal industry. Proponents of the moratorium said coal was under pressure because of decreased demand, not politics, and that a full scale review of the process for leasing publicly owned coal was key. In a move applauded by industry and criticized by environmental groups, the Trump Administration lifted that moratorium in March. Cheney introduced her bill days later, calling Wyoming coal a “national treasure.”
Voters to decide if Spokane should fine coal, oil shipments (AP) — Voters in Spokane will decide in November whether the city should fine railroad operators for certain coal and crude oil rail shipments through its downtown core, the latest community attempting to assert its local authority in the fight over fossil fuels. The Spokane City Council voted Monday night to put the initiative to voters rather than passing it, after petition backers gathered enough signatures. The ballot measure, if approved, would make rail shipments of uncovered coal or untreated crude oil a civil infraction, punishable by a fine of up to $261 per rail car, The Spokesman-Review reported (http://bit.ly/2tA2ZCV). It would also restrict such shipments within 2,000 feet of schools, hospitals and the Spokane River. Opponents warn of costly, legal challenges. If approved, it is certain to face a steep uphill legal fight, since the federal government regulates railroad operations and safety. The city's hearing examiner last fall concluded that "the proposed initiative is not enforceable because it is preempted by federal law." Supporters say the city must act to ensure public safety and prevent environmental damage. They say a fiery derailment downtown that could cost millions of dollars in damage and put citizens' lives in danger. They
Asia’s coal-fired power boom ‘bankrolled by foreign governments and banks’ - The much-discussed boom in coal-fired power in south-east Asia is being bankrolled by foreign governments and banks, with the vast majority of projects apparently too risky for the private sector. Environmental analysts at activist group Market Forces examined 22 deals involving 13.1 gigawatts of coal-fired power in Indonesia and found that 91% of the projects had the backing of foreign governments through export credit agencies or development banks. The majority of the money was coming from Japan and China, with the Japan Bank for International Cooperation (JBIC) involved in five deals and the Export-Import Bank of China (Cexim) involved in seven deals. The China Development Bank was the biggest development bank lending to the projects, imparting $3bn, with a further $240m in development funds coming from Korea’s Korea Development Bank. The lending comes despite the world’s biggest development bank – the World Bank – warning last year that plans to build more coal-fired power plants in Asia would be a “disaster for the planet” and overwhelm the deal forged at Paris to fight climate change.
German nuclear damage shows atomic and renewable power are unhappy bedfellows -- A German nuclear plant was damaged because its operators increased and decreased its output to respond to energy grid fluctuations. The incident supports the theory that nuclear and renewable energy generation are incompatible, EURACTIV’s partner Der Tagesspiegel reports. The Brokdorf nuclear power station, located in northern Germany, was taken offline in February after maintenance showed its reactor’s fuel rods had begun to unexpectedly oxidise. A regional nuclear supervisory body has now ruled that the plant can be booted back up but only in “safe mode”, according to Schleswig-Holstein’s energy transition minister. State Minister for Energy Robert Habeck (Greens) added that the power plant’s output should not be increased or decreased at short notice to adapt to the supply of renewable energies on the electricity grid. The minister warned that “atomic energy is not a bridging technology”.
Nuclear Fusion: Has China usurped Britain in race for fusion power? --Britain currently leads the world in the development of the technology through the Joint European Torus (JET) based at the Culham Science Centre in Oxfordshire, but there have been fears it would end up playing second fiddle to China, Korea or other international competitors, because of catastrophic underfunding. Britain’s research into nuclear fusion – limitless, safe energy basically from seawater – is the envy of the world and should form the basis of a multi-billion pound export market throughout the 21st century, if we are able to open fusion-based power stations by 2050. Now, it appears the Chinese are starting to take over after breaking a number of records to stabilise plasma. China has set up a high-tech device known as the Experimental Advanced Superconducting Tokamak (EAST) to carry out experiments to create a stable plasma. This week they claimed to have broken the world fusion record for stabilising plasma. They were able to maintain a stable plasma state for 101.2 seconds, with the temperature peaking at 50,000,000 Kelvins (K) (90,000,000°F or 50,000,000°C). Last year EAST sustained plasma burst for more than a minute. Its goal is a 1,000-second plasma reaction. It will then move to new hardware before attempting a fully functioning fusion reactor.
U.S. judge refuses to halt New York nuclear power plant subsidies (Reuters) - A federal judge on Tuesday dismissed a lawsuit by energy companies and trade groups to stop New York Governor Andrew Cuomo from providing billions of dollars in subsidies to prop up struggling nuclear power plants in the state. U.S. District Judge Valerie Caproni in Manhattan rejected claims that federal law preempted New York and its Public Service Commission from offering credits to promote clean energy and reduce reliance on fossil-fueled or gas plants. The plaintiffs said the credits could boost electric bills for New York's "captive ratepayers" by $7.6 billion over 12 years, and violate the "dormant" Commerce Clause by impeding Congress' power to regulate commerce among states. But the judge said New York's "zero-emissions credits" program was "plainly related to a matter of legitimate state concern": the production of clean energy, and reduction of emissions from other energy that could add to global warming. "The New York program is constitutional," Caproni wrote. "Fatal to plaintiffs' argument is their failure to offer any cogent explanation why ZECs are preempted but other state incentives to generate clean energy - such as tax exemptions, land grants, or direct financial subsidies - are not." Seven plaintiffs had challenged the credits, including the Coalition for Competitive Electricity, Dynegy Inc (DYN.N) and NRG Energy Inc (NRG.N). Requests for comment from their lawyers were forwarded to a spokesman for New Yorkers for Fair Energy, (www.ny4fairenergy.com/), who said there will be an appeal.
Critical Vulnerabilities Found in Nuke Plant Radiation Monitors - Researchers have discovered multiple unpatched vulnerabilities in different radiation monitoring devices that could be leveraged by attackers to reduce personnel safety, delay detection of radiation leaks, or help international smuggling of radioactive material. In a paper (PDF) delivered by Ruben Santamarta, principal security consultant at Seattle-based IOActive, at Black Hat Wednesday, it was disclosed that radiation monitors supplied by Ludlum, Mirion and Digi contain multiple vulnerabilities. Patching will be difficult since these are design flaws rather than software bugs; and the vendors' early response to IOActive's discoveries was, in each case, to decline to work on patches. Since then, Digi has told IOActive that it is collaborating with Mirion to patch the critical vulnerabilities. Nevertheless, IOActive concludes, "we should acknowledge these issues are not currently patched, so increasing awareness of the possibility of such attacks will help to mitigate the risks." It is likely that the same flaws will be present in other vendors' radiation monitoring devices.There are many kinds of radiation monitor used in many different environments. IOActive concentrated its research on portal monitors, used at airports and seaports; and area monitors, used at Nuclear Power Plants (NPPs). However, little effort was required for the portal monitors: "the initial analysis revealed a complete lack of security in these devices, so further testing wasn't necessary to identify significant vulnerabilities," notes the report.In the Ludlum Model 53 personnel portal, IOActive found a backdoor password that granted the highest privilege. With this, malicious personnel could bypass authentication and take control of the device, preventing the triggering of proper alarms.
Japan Captures More Photographs of Likely Melted Fukushima Fuel - A trove of new images captured in the past few days show what is likely to be melted nuclear fuel from inside one of Japan’s wrecked Fukushima reactors, a potential milestone in the cleanup of one of the worst atomic disasters in history.Tokyo Electric Power Co. Holdings Inc., Japan’s biggest utility, released images on Saturday of mounds of black rock and sand-like substances at the bottom of the No. 3 reactor containment vessel at Fukushima, which is likely to contain melted fuel, according to Takahiro Kimoto, an official at the company. A survey on Friday found black icicles hanging from the above pressure vessel, which was “highly likely” to contain melted fuel. Kimoto noted it would take time to confirm whether this debris contains melted fuel.“The pictures that we have gained will assist us in devising a plan for removing the melted fuel,” Kimoto told reporters Saturday night in Tokyo. “Taking pictures of how debris scattered inside of the reactor was a big accomplishment.”If confirmed, these pictures would be the first discovery of the fuel that melted during the triple reactor accident at Fukushima six years ago. For Tokyo Electric, which bears most of the cleanup costs, the discovery would help the utility design a way to remove the highly-radioactive material. The pictures were taken by a Toshiba-designed robot the company sent to explore the inside of the reactor for the first time from July 19. The robot, 30 centimeters (12 inches) long that can swim in the flooded unit, was tasked with surveying the damage inside and also finding the location of corium, which is a mixture of the atomic fuel rods and other structural materials that forms after a meltdown.
Fukushima: robot images show massive deposits thought to be melted nuclear fuel - Images captured by an underwater robot on Saturday showed massive deposits believed to be melted nuclear fuel covering the floor of a damaged reactor at Japan’s destroyed Fukushima nuclear plant. The robot found large amounts of solidified lava-like rocks and lumps in layers as thick as 1m on the bottom inside a main structure called the pedestal that sits underneath the core inside the primary containment vessel of Fukushima’s Unit 3 reactor, said the plant’s operator, Tokyo Electric Power Co. On Friday, the robot spotted suspected debris of melted fuel for the first time since the 2011 earthquake and tsunami caused multiple meltdowns and destroyed the plant. The three-day investigation of Unit 3 ended on Saturday. Locating and analysing the fuel debris and damage in each of the plant’s three wrecked reactors is crucial for decommissioning the plant. The search for melted fuel in the two other reactors has so far been unsuccessful because of damage and extremely high radiation levels.
Why the scariest nuclear threat may be coming from inside the White House - Donald Trump’s secretary of energy, Rick Perry, once campaigned to abolish the $30 billion agency that he now runs, which oversees everything from our nuclear arsenal to the electrical grid. The department’s budget is now on the chopping block. But does anyone in the White House really understand what the Department of Energy actually does? And what a horrible risk it would be to ignore its extraordinary, life-or-death responsibilities? About half its budget (in 2016 approximately $30 billion) went to maintaining the nuclear arsenal and protecting Americans from nuclear threats. It sent teams with equipment to big public events—the Super Bowl, for instance—to measure the radiation levels, in hopes of detecting a dirty bomb before it exploded. “They really were doing things to, like, keep New York safe,” said MacWilliams. “These are not hypothetical things. These are actual risks.” A quarter of the budget went to cleaning up all the unholy world-historic mess left behind by the manufacture of nuclear weapons. The last quarter of the budget went into a rattlebag of programs aimed at shaping Americans’ access to, and use of, energy. There were reasons these things had been shoved together. Nuclear power was a source of energy, and so it made sense, sort of, for the department in charge of nuclear power also to have responsibility for the weapons-grade nuclear materials—just as it sort of made sense for whoever was in charge of weapons-grade uranium and plutonium to be responsible for cleaning up the mess they made. But the best argument for shoving together the Manhattan Project with nuclear-waste disposal with clean-energy research was that underpinning all of it was Big Science—the sort of scientific research that requires multi-billion-dollar particle accelerators. The D.O.E. ran the 17 national labs—Brookhaven, the Fermi National Accelerator Lab, Oak Ridge, the Princeton Plasma Physics Lab, and so on. “The office of science in D.O.E. is not the office of science for D.O.E.,” “It’s the office of science for all science in America. I realized pretty quickly that it was the place where you could work on the two biggest risks to human existence, nuclear weapons and climate change.”
Sunoco Ordered to Temporarily Suspend Drilling on Pipeline Project - The Pennsylvania's Environmental Hearing Board ordered Sunoco Pipeline LP Tuesday to temporarily halt some types of work on a $2.5 billion pipeline project designed to carry 275,000 barrels a day of butane, propane and other liquid fossil fuels from Ohio and West Virginia, across Pennsylvania, to the Atlantic coast. On July 19, three environmental groups presented Judge Bernard Labuskes, Jr. with documentation showing that the project had caused dozens of drilling fluid spills and other accidents between April and mid-June. "Across the state, Sunoco has unleashed drilling fluid into exceptional value wetlands, high-quality trout streams, reservoirs, and groundwater endangering both drinking water supplies and our natural environment," Clean Air Council said in a statement . The nonprofit, along with the Mountain Watershed Association, Inc. and the Delaware Riverkeeper Network , submitted the evidence to the judge one week ago. The judge ordered all horizontal directional drilling—expected to be used in 168 locations where the pipeline crosses waterways or other obstacles—halted until Aug. 7, except in places where Sunoco can show that stopping mid-bore would cause safety problems, equipment damage or "more environmental harm than good." The order immediately affects 55 sites where drilling is currently underway. State environmental regulators are also investigating potential violations during the pipeline's construction, including one case where regulators found that 14 homeowners "experienced adverse impacts to their private water supplies, which are drawn from groundwater."
West Virginia issues cease, desist order to some Rover construction -West Virginia environmental regulators have ordered the Rover Pipeline project to cease and desist certain land development activities in the state after inspectors found what they called violations of state rules and a water pollution control permit. Among other concerns, the DEP in its July 17 order cited "conditions not allowable in the waters of the state by creating sediment deposits" at eight locations. The order was entered into the US Federal Energy Regulatory Commission docket Monday. The DEP also flagged a failure to maintain erosion control devices, citing silt fencing and other devices in need of maintenance, and locations where it said water bars were not installed as designed in the permit. In a number of spots, it said Rover failed to prevent sediment-laden water from leaving sites "without going through an appropriate device." The DEP told Rover to "immediately cease and desist further land development activity until such time when compliance with the terms and conditions of its permit and all pertinent laws and rules is achieved." It told Rover that it must file a proposed plan of corrective action and schedule within 20 days of the effective date of the order. Rover spokeswoman Alexis Daniel Monday said in an email: "We continue to work with the West Virginia DEP to resolve these issues in a manner that is satisfactory to all parties." Construction continues in the state's Hancock and Marshall counties in West Virginia, she added. "We are complying with the DEP, and have stopped construction at the areas noted in the order." The timing of construction of the 3.25 Bcf/d, 500-mile-long Rover Pipeline is closely watched because it is expected to have significant effects on market fundamentals, in particular in the US Northeast where its added takeaway capacity is likely to result in a widespread easing of pipeline capacity constraints and support production growth. Ohio regulators July 7 issued unilateral orders they said were needed to enforce state environmental laws in the wake of the drilling mud spills and other impacts such as sediment-laden stormwater runoff. Lending some backing to Ohio, FERC staff July 12 also gave Rover a list of environmental restoration work and water quality monitoring plans it would require before signing off on placing Mainline A of the project into service.
Republicans brewing Russian scandal to target greens (Politico) Republicans are trying to conjure up a Russian scandal they can get behind. GOP House members and at least one Trump Cabinet member are pushing years-old allegations from conservative activists that Russia has funneled money to U.S. environmental groups to oppose fracking. The story has reappeared in conservative circles in recent weeks — a respite, perhaps, from the steady drip-drip of news reports about dealings between Russians and President Donald Trump’s inner circle. Allegations have circulated for years that Moscow has sought to discourage European countries from developing their own natural gas supplies as an alternative to Russian fuel. And conservatives have sought to extend those concerns to the U.S. — though there’s little but innuendo to base them on. But the rumors gained new life in late June, when House Science Committee Chairman Lamar Smith and fellow Texas Republican Rep. Randy Weber asked Treasury Secretary Steven Mnuchin to investigate whether the Kremlin is bankrolling green campaigns against the fracking technology that helped the U.S. overtake Russia in gas production.Among other material, Smith and Weber cited articles in conservative news publications and an alleged Hillary Clinton speech published by WikiLeaks — part of a trove of stolen Clinton campaign documents that U.S. intelligence agencies have linked to Russia’s election-meddling efforts.The reports, the Republican lawmakers wrote in the letter to Mnuchin, suggest “that Russia is also behind the radical statements and vitriol directed at the U.S. fossil fuel sector.” Green groups dismissed Smith’s allegations as an attempt to divert attention from all the news surrounding Trump and Russia.
Russia's Alleged Meddling in US Shale Production Nothing But Persecution Mania - The US "is brewing another Russian scandal," this time suspecting Moscow of bankrolling US anti-fracking activists to oppose fracking and halt shale oil production. Russian experts call the allegations absurd, saying that it resembles "persecution mania." A recent report published by US-based Politico magazine says that the US has revived its "yearsold allegations from conservative activists that Russia has funneled money to US environmental groups to oppose fracking." "Allegations have circulated for years that Moscow has sought to discourage European countries from developing their own natural gas supplies as an alternative to Russian fuel. And conservatives have sought to extend those concerns to the US – though there’s little but innuendo to base them on," the outlet says. In late June, House Science Chairman Lamar Smith and fellow Texas Republican Representative Randy Weber asked Treasury Secretary Steve Mnuchin to investigate whether "the Kremlin is bankrolling green campaigns against the fracking technology that helped the US overtake Russia in gas production."Green groups however dismissed Smith’s allegations as an attempt to divert attention from all the news surrounding Trump and Russia, the magazine says. The League of Conservation Voters, another group named in Smith’s letter, also blasted the Science Committee’s allegations. "Anti-fracking sentiment in the US started bubbling up among US environmental groups as soon as the oil and gas production method started surging in the late 2000s, with the documentary 'Gasland' appearing in theaters in 2010 after a year and a half in production. Much of that opposition was driven by local activists in new gas hot spots like Pennsylvania who complained about threats to their drinking water, while major national environmental groups like the Sierra Club were slower to take up the cry," Politico says. "Still, there is no evidence that Russian money has gone to US green groups, at least on the national level,"
Bernie Sanders makes first move against a bill with bipartisan support that could increase fracking - With the Senate focused on health care reform, a little-noticed bill that could increase America’s production of fossil fuels may see a vote on the Senate floor as soon as next week. Sen. Bernie Sanders (I-Vt.) does not plan to let that legislation pass quietly. In an emailed statement provided to Mic on Thursday night, Sanders said he opposes the current form of the Energy and Natural Resources Act, a bipartisan bill introduced in late June by Sens. Lisa Murkowski (R-Alaska) and Maria Cantwell (D-Wash.).“Our job is to move away from fossil fuels toward sustainable energy and energy efficiency,” the senator said in the statement. “This bill does the opposite.”Murkowski and Cantwell say the bill would modernize America’s energy infrastructure by finding “common ground” on energy issues. The bill would also continue funding for the Land and Water Conservation Fund, a fund that taxes oil and natural gas earnings to preserve U.S. land and water resources.But Sanders sees it differently: “[This bill] would make us more reliant on fracking for natural gas for decades to come by expediting the review process for natural gas pipelines and liquefied natural gas,” Sanders said in his statement. “It would also provide millions of taxpayer dollars to research new offshore natural gas extraction techniques.” Sanders opposition is not surprising. But it is strategic. Senate Majority Leader Mitch McConnell (R-Ky.) fast-tracked the bill for consideration by the full Senate. If Republicans fail to pass a health care bill on Tuesday, Democratic aides and outside groups said McConnell may bring up the energy bill before the Senate next week to show the Senate can move quickly and approve bipartisan legislation. In announcing his opposition to the bill, Sanders said he will offer amendments to the legislation. Those changes would have to be voted on by the Senate, slowing any quick passage of the legislation.
While Oil Patch Bleeds, Gas Drillers Race to Unleash Wells - Oil prices have been lousy for so long that U.S. producers are hoarding unfinished wells rather than pumping crude out of them. In the natural gas patch, just the opposite is happening.While the energy slump has idled lots of wells for both commodities, their economics have diverged. Oil remains at half its price in 2014, leading to a record backlog of drilled-but-uncompleted wells spread across shale formations where fracking brought on a surge in crude production. Meanwhile, gas futures are almost double last year’s low, and the so-called fracklog of wells in the Marcellus gas fields of Pennsylvania and West Virginia is shrinking as drillers there unleash supplies to take advantage of higher prices.By the end of June, the fracklog in the Marcellus was the smallest in the three and a half years since government data has been collected. The drop portends a production boom that could imperil bullish gas bets, which jumped to a three-year high in May on speculation that a hot summer, new pipeline capacity and rising exports of the fuel would boost demand. Gas explorers are “putting a down payment on a bull market that companies hope is coming,” said John Kilduff, a partner at the commodities hedge fund Again Capital LLC. They’re “taking the view that prices are going to rebound.”
Why U.S. Shale Drillers Can’t Sell Their Gas - Natural gas output from the U.S. shale formations is at a record high. So are recoverable gas reserves, according to the Potential Gas Committee. This sounds like good news for everyone except producers: there just are not enough pipelines to transport the gas, which is already uncomfortably cheap because of the abundant supply. As natural gas prices recovered from the lows they hit last year on oversupply, shale producers became bolder and started ramping up, just like oil drillers did. As a result, according to Bloomberg data from June, output in the Marcellus shale and the Permian has hit a record. In the Marcellus shale, daily output is close to 20 billion cu ft, while associated gas in the Permian is creeping closer to 10 billion cu ft daily. As of last week, the Energy Information Administration calculated gas output in Marcellus at 19.55 billion cu ft daily. Output in the Permian was 8.49 billion cu ft. Utica produced 4.45 billion cu ft of natural gas. Haynesville and Eagle Ford both yielded more than 6 billion cu ft of gas. Next month, the EIA projects shale gas production to continue rising across the board, reaching a total 52.858 billion cu ft daily, from this month’s estimated 52.021 billion cu ft. Meanwhile, West Virginia’s Department of Environmental Protection has ordered Energy Transfer Partners to stop work on the construction of Rover – set to be the biggest natural gas pipeline project under construction in the country. The order is yet another stumbling block for the US$4.2-billion, 713-mile pipeline that was supposed to transport gas from Utica and Marcellus to other parts of the United States. Earlier this year, a drilling fluid spill along the construction route in Ohio prompted the Federal Energy Regulatory Commission—the body in charge of gas pipelines—to ban horizontal drilling during construction. The delay of the Rover completion—until this fall, probably—is bad news for ETP, certainly, though the company behind the Dakota Access pipeline should by now be used to such hurdles. It’s also bad news for producers because, as the Wall Street Journal’s Spencer Jakab writes in a recent story, Utica and Marcellus gas is selling at a substantial discount to the Henry Hub benchmark.
Dominion's Atlantic Coast gas pipeline clears key environmental hurdle -- Dominion Energy's Atlantic Coast natural gas pipeline Friday received a broadly favorable environmental impact statement from Federal Energy Regulatory Commission staff, marking a major milestone for the 600-mile, 1.5 Bcf/d line, among several high-capacity projects designed to bring gas to the Eastern Seaboard. The greenfield project (CP15-554) would move gas to points along its mainline in West Virginia, Virginia and North Carolina, and in concert with other projects aimed at the downstream market, would likely put downward pressure on Transco Zone 5 pricing, despite the demand growth expected there. FERC staff concluded that the project would have some adverse impacts on the environment but that most would be reduced to "less-than-significant levels" through a host of proposed plans, mitigation measures and steps laid out by the commission. Staff included 71 environmental conditions. FERC highlighted adverse impacts on steep slopes and adjacent water bodies, aquatic resources, forests, endangered species, as well as karst, cave and subterranean habitat and their associated species. The EIS also encompassed Dominion's related Supply Header Project (CP15-555), entailing 37.5 miles of 30-inch-diameter pipeline and compressor station upgrades in Pennsylvania and West Virginia, as well as evaluating a related capacity lease proposal on Piedmont Natural Gas' system (CP15-556). The Atlantic Coast route passes through heavily forested and steep terrain at the border of Virginia and West Virginia, raising the bar for environmental review and drawing opposition from environmental groups and some communities in its path. At the same time it has garnered support from some business leaders, building trade unions, and local officials, including those seeking to develop the Hampton Roads, Virginia, area.
Environmental report on pipeline favorable for developers — The Atlantic Coast Pipeline intended to carry natural gas across West Virginia, Virginia and North Carolina would have some adverse environmental effects, including impacts on water resources, forest and other habitats, but most could be reduced to insignificant levels, an assessment by federal regulators found. The Federal Energy Regulatory Commission, which oversees interstate natural gas pipelines, released its final environmental impact statement Friday for the proposed 600-mile (965-kilometer) pipeline, which has broad support from political and business leaders but is staunchly opposed by environmentalists and many affected landowners. The assessment is a major milestone in the approval process for the project that will cross hundreds of bodies of water, mountainous terrain, national forest, and the Appalachian Trail. Its findings were largely favorable for developers. The impact statement did find that construction in steep terrain could increase the potential for landslides and that the project was likely to adversely affect seven species protected under the Endangered Species Act. It found that the greatest impact on vegetation would be on forested areas, with more than 3,400 acres having long-term or permanent effects. But overall, the assessment said that if developers use proper construction and mitigation techniques, most of environmental impacts could be reduced to "less-than-significant" levels.
Atlantic Coast Pipeline opponents criticize federal government’s ‘woefully inadequate analysis’ - Federal regulators on Friday issued a final environmental review of the controversial Atlantic Coast Pipeline, concluding that the 600-mile pipeline’s impact on the environment would be reduced to “less-than-significant” levels if the developers follow certain mitigation measures.With the Federal Energy Regulatory Commission’s favorable review, the pipeline’s developers moved a big step closer to starting construction. The project’s primary developer, Dominion Energy of Richmond, Virginia, still must receive state water permits and then wait for FERC to issue its final decision.“The favorable environmental report released today provides a clear path for final approval of the Atlantic Coast Pipeline this fall,” Leslie Hartz, Dominion Energy’s vice president of engineering and construction, said in a statement Friday. “This report is the culmination of one of the most thorough and exhaustive environmental reviews that has ever been performed for a project of this scope.” The pipeline would transport natural gas from West Virginia through Virginia to southern North Carolina. Other partners in the $5.2 billion project are Duke Energy and its subsidiary Piedmont Natural Gas and Southern Company.While not surprised by the favorable report, environmental groups still criticized FERC’s conclusion that the project would have “less-than-significant” impacts on the environment.The commission’s environmental impact statement reveals “significant gaps in information and woefully inadequate analysis, which is no surprise based on the agency’s historic rubber-stamp approach to virtually all natural gas interstate pipelines,” Lew Freeman, executive director of the Allegheny-Blue Ridge Alliance, said Friday in a statement. FERC issued the final environmental analysis for the Atlantic Coast Pipeline one month after releasing its final review of the Mountain Valley Pipeline, which would also transport natural gas produced in West Virginia into Virginia. The commission similarly concluded that Mountain Valley “would result in limited adverse environmental impacts.”
This massive natural gas pipeline will run right through Native American communities - Protests against the Dakota Access oil pipeline in North Dakota escalated more than a year ago when Native Americans realized the pipeline’s developers and government officials intended to ignore their request to reroute the pipeline around the Standing Rock reservation. Now, a similar scenario is playing out in Virginia and North Carolina, where Native Americans are urging federal, state, and local officials to listen to their concerns about the 600-mile Atlantic Coast Pipeline, a pipeline system that would transport fracked gas from West Virginia into Virginia and North Carolina. Native Americans “didn’t have opportunities to learn how the route was chosen or to provide input on bodies of water or specific landscapes that their tribes consider sacred and that they might have problems with a pipeline passing through,” Ryan Emanuel, a member of the Lumbee Tribe of North Carolina who serves on the environmental justice committee of the North Carolina Commission of Indian Affairs, told ThinkProgress.About 30,000, or 13 percent, of the people who live within one mile of the proposed route of the pipeline in North Carolina are Native American, even though Native Americans represent only 1.2 percent of the state’s total population.The pipeline originates in northern West Virginia, a region that is seeing heavy natural gas production, and ends in Robeson County, North Carolina, a county with one of the highest percentages of Native Americans east of the Mississippi River. The Atlantic Coast Pipeline’s proposed route crosses territories of four Native American tribes in North Carolina: the Lumbee Tribe of North Carolina, the Tuscarora, the Haliwa-Saponi, the Coharie, and the Meherrin Nation. Of the eight counties in the state through which the pipeline would travel, four have large Native American communities. Members of tribal groups worry the pipeline could damage sacred Native American sites and the surrounding environment. Last Friday, the Federal Energy Regulatory Commission (FERC) issued a final environmental review of the pipeline, concluding that the impact on the environment would be reduced to “less-than-significant” levels if the developers follow certain mitigation measures.
Environmentalists provoke pipeline workers to speak up - The people who build oil and gas pipelines in the U.S. have worked in relative obscurity for decades. But a growing number of protests against pipelines are turning some of those workers into activists themselves. The U.S. produces more oil and gas than any other country, according to the Energy Information Administration. That's led to a pipeline construction boom and a growing protest movement that's had some success delaying projects, notably the Keystone XL and Dakota Access pipelines. Environmentalists concerned about climate change have a strategy – dubbed "keep it in the ground" – to stop new pipelines and other infrastructure from being built. The goal is to make it difficult for companies to develop new fossil fuel sources.This has prompted Pipeliners Local Union 798 to get involved in the public conversation about pipelines."We're having to do a lot of lobbying for ourselves just to stay employed," says Ed Coker, a Local 798 job steward. The union created a website and encourages members to contact lawmakers, sign petitions and attend town hall meetings."Pipeliners," as members of the union call themselves, are a tight-knit group of journeymen, welders and welder helpers. They travel around the country from job to job. If no pipelines are under construction they don't work. But Coker says now is a busy time.This has been a good year, politically, for the union. Coker says most Pipeliners supported Donald Trump and were energized by his focus on two topics that keep them employed: building infrastructure and supporting the domestic oil business. Still, it's clear that Coker and other Pipeliners feel misunderstood. They view their work as an important contribution to the economic life of the country. When protesters say they shouldn't be building pipelines, it offends them. Part of their new-found activism includes talking more publicly about their work. "We're certainly not trying to destroy the environment. You know, I'm as worried about the environment as anybody else," says Coker. Currently he is overseeing his union's work on a section of the Mariner East 2 pipeline, which has been the focus of protests and legal challenges.
An Update of the Southeast Power Market Pipeline Projects - For the first time in more than a decade, Florida — the second-largest natural gas demand market for electric generation in the U.S. (after Texas) — now has a new gas supply route into the state. Last month, Enbridge’s Sabal Trail Transmission pipeline began partial service, increasing Florida’s inbound gas transportation capacity by 1.1 Bcf/d (26%) — just in time to help meet air conditioning demand during the hottest months of the summer. The pipeline ultimately will for the first time connect Marcellus/Utica shale gas to the Sunshine State’s voracious power market. In the month or so since it began service, the pipe has already ramped up to 0.4 Bcf/d and, in conjunction with additional upstream expansions, could ultimately change not only how Florida gets its gas but where that gas gets sourced. Today, we provide an update on Sabal Trail and its effect thus far on gas flows.
Squeeze Coming to NGL Takeaway Capacity Out of the Permian? -- A big question mark hanging over the Permian like a dark cloud is whether there will be sufficient pipeline takeaway capacity to deal with continued production growth in the U.S.’s hottest shale play. Mostly, takeaway-adequacy questions are asked about either crude oil or natural gas, but ensuring sufficient NGL pipeline capacity out of the Permian may ultimately be the biggest challenge of all. Why? Because just about everything involving NGLs seems to be more complicated — how they are produced, transported, stored and even priced. Today we begin a series on Permian natural gas processing, natural gas liquids production growth and existing plus planned NGL pipelines out of West Texas and southeastern New Mexico. It is primarily the pursuit of crude oil, not natural gas or natural gas liquids (NGLs), that is driving the frenzy of drilling activity and investment in the multistacked, hydrocarbon-packed Permian’s Midland and Delaware basins. But while crude may be driving the Permian bus, oil-focused wells in the 70,000-square-mile region also are producing large volumes of associated gas, most of it liquids-rich, wet gas loaded with NGLs that — once processed, delivered and fractionated into purity products like ethane, propane, butanes and pentanes+ — add considerable monetary value of their own. Permian production numbers (both current and projected) are noteworthy. The region already is producing 2.3 million barrels a day (MMb/d) of crude oil and 6.3 billion cubic feet per day (Bcf/d) of dry natural gas, and under RBN’s Growth Scenario, those numbers are expected to rise to 3.7 MMb/d and 12 Bcf/d, respectively, by 2022. The growth outlook for Permian NGLs is similar. Nearly 800 Mb/d are being produced now, and five years from now the region’s NGL output could top 1.4 MMb/d, a prospective increase of nearly 80%.
US oil output growth hit by lack of operators and equipment -- US oil production growth this year is on course to be significantly lower than government forecasts, as companies struggle to find the operators and equipment they need to complete the wells they have drilled, according to a new energy research firm. The steady rise in shale oil output from the US has weighed on global crude prices but the projections Kayrros, a Paris-based research firm backed by former Schlumberger chief executive Andrew Gould, suggest there may be less oil coming than expected coming on to world markets over the next few months. This would help support oil prices that have already risen about 10 per cent since the Brent benchmark dipped below $45 per barrel last month. Once a shale well has been drilled it needs hydraulic fracturing or fracking and other procedures to start production. The number of drilled but uncompleted wells, often known as DUCs, in the US main shale oil and gas regions has been rising sharply this year, going from 4,944 last December to 6,031 in June, according to the US government’s Energy Information Administration. Kayross argues that the number will continue to rise, slowing the growth of US oil output. By October, the firm sees onshore US production in the lower 48 states growing by 560,000 barrels per day from the end of last year to 7.09m, compared to the 900,000 b/d increase forecast by the EIA.
A timeline map of the massive increase in human-caused earthquakes in Oklahoma - In just the past 10 years, the number of earthquakes in the central US (and particularly Oklahoma) has risen dramatically. In the 7-year period ending in 2016, there were more than three times the number of magnitude 3.0+ earthquakes than in the previous 36 years. Above is a video timeline of Oklahoma earthquakes from 2004-2016. At around the midpoint of the video, you’ll probably say, “wow, that’s crazy”. Keep watching. These earthquakes are induced earthquakes, i.e. they are caused by humans. Fracking can cause induced earthquakes but the primary cause is pumping wastewater back into the ground. From the United States Geological Survey’s page on induced earthquake myths & misconceptions (a summarized version of this paper):Wastewater disposal wells typically operate for longer durations and inject much more fluid than hydraulic fracturing, making them more likely to induce earthquakes. Enhanced oil recovery injects fluid into rock layers where oil and gas have already been extracted, while wastewater injection often occurs in never-before-touched rocks. Therefore, wastewater injection can raise pressure levels more than enhanced oil recovery, and thus increases the likelihood of induced earthquakes. Of course, this wastewater is a byproduct of any oil & gas production, including fracking. But specifically in Oklahoma’s case, the induced earthquakes have relatively little to do with fracking: In contrast, in Oklahoma spent hydraulic fracturing fluid represents 10% or less of the fluids disposed of in salt-water disposal wells in Oklahoma (Murray, 2013). The vast majority of the fluid that is disposed of in disposal wells in Oklahoma is produced water. Produced water is the salty brine from ancient oceans that was entrapped in the rocks when the sediments were deposited. This water is trapped in the same pore space as oil and gas, and as oil and gas is extracted, the produced water is extracted with it. Produced water often must be disposed in injection wells because it is frequently laden with dissolved salts, minerals, and occasionally other materials that make it unsuitable for other uses.
In Colorado Fracking Fight, Emails Show Constituents ‘Begging’ Lawmakers For Help - A battle over oil and gas drilling in residential areas was fought in the Colorado legislature this spring, with Democrats and environmental groups seeking to impose rules that would push fracking activity further away from schools and public facilities. This effort, which was punctuated by an April gas well explosion that killed two men in Firestone, was opposed by the state’s influential oil lobby and allied Republican legislators.A trove of emails to and from leading Republican state senators, examined by International Business Times, shows how the debate over local drilling played out behind the scenes. While constituents, worried about health and safety risks, sent emails urging lawmakers to support HB1256, a “setback” bill that would require new wells to be at least 1,000 feet from the edge of school properties (the current rule requires wells to be just 1,000 feet from school buildings), oil and gas industry representatives obtained meetings with state lawmakers and invited them to a variety of “energy forums,” “legislative receptions” and “seminars,” and even a clay shooting event, throughout the legislative session. The oil and gas industry spent more than $100,000 on state senate and house races in 2016, with $71,000 of that money going to Republicans, according to the National Institute on Money and State Politics. The industry spent another $686,301 on lobbying last year. While the emails, which were obtained through Freedom of Information Act requests filed by IBT, show no sign of illegal activity or quid pro quo dealings between lobbyists and lawmakers, they do reveal the asymmetrical war fought between the fossil fuel lobby and ordinary citizens who work and live near their facilities, many of whom wrote their representatives to assert that they weren’t anti-fracking, but simply worried about their own or their children’s health. Some pleaded with their representatives for help, only to receive a form letter, or nothing at all, in reply.
Trump proposes scrapping Obama-era fracking rule on water pollution -- The Trump administration has proposed scrapping an Obama-era rule that aimed to ensure fracking for oil and gas does not pollute water supplies. The Bureau of Land Management (BLM), which is part of the Department of Interior, said on Tuesday that it is moving to scrap the 2015 regulation because it duplicates state rules and “imposes burdensome reporting requirements and other unjustified costs” on the oil and gas industry. The rule requires that fracking operations on public land are properly constructed so that pollutants do not leak into water supplies. Companies are also obliged to publicly disclose the chemicals in fluids used in fracking, which is a drilling process used to release oil and gas deposits within rock formations. Despite being finalised two years ago, the fracking rule has never come into force due to a series of court challenges from the fossil fuel industry and several states. The BLM had initially defended the rule but following Donald Trump’s entrance to the White House the agency is now proposing to scrap it. The Natural Resources Defense Council, an environmental group, said the move showed that the Trump administration’s loyalty lies with “industry and polluters”. “This administration is sacrificing our public lands and neighboring communities to the oil and gas industry,” said Amy Mall, a senior policy analyst at NRDC. “While these rules still fall far short of what’s needed to reduce impacts from fracking, they would have provided some much-needed steps to better safeguard drinking water supplies, public health, and the environment.” According to the BLM, the rule would cost the oil and gas industry at least $32m a year and would be unnecessary as companies are already doing what the regulation requires “either to comply with state law or voluntarily”.
Trump Administration Proposes Repeal of Fracking Protections --Three days before oral arguments are scheduled in the 10th Circuit Court of Appeals on Bureau of Land Management safety measures to regulate fracking operations on public lands , the U.S. Department of Interior is moving ahead with its plan to rescind the 2015 rule. The rule, which was the product of nearly five years of agency work, expert input, public comments and hearings, never went into effect after it was challenged immediately by oil and gas industry trade associations. After a district court judge set aside the rule in 2016, BLM and citizen groups appealed to the 10th Circuit in late 2016. The Trump administration , however, reversed course in March 2017 and announced that it would propose repealing the rule. Today, the administration formalized that reversal with a proposal to be published Tuesday for public notice and comment. "This is another cynical move by the Trump administration that sacrifices our public lands and public safety as a favor to the oil and gas industry," said Michael Freeman, the attorney for Earthjustice who is representing environmental groups who support the safety rules in the legal action. Despite a request by the administration to stay the appeal, the 10th Circuit scheduled oral argument for July 27. "The timing of this proposal is obviously linked to this week's oral argument. It is part of the administration's effort to circumvent the law by asking to stay this appeal while leaving the lower court ruling in effect. We oppose that request, and we'll see the agency in court Thursday morning," Freeman said.
Trump's Interior Department plans to chop months off wait-times for oil-drilling permits -- The Department of Interior plans on cutting wait times for oil and natural gas drilling permits on public lands to just 30 days, according to a senior agency official. “We do want to shrink it down to 30 days and to make all the processes as short as possible, but at the same time, making sure our environmental stewardship is not breached, all of which is completely doable,” Vincent DeVito, energy policy adviser to Interior Sec. Ryan Zinke, told Politico on Monday. “We intend to be a better business partner,” DeVito said, “by harmonizing the environmental review process across the board, the one-stop-shopping type of model.” Republicans and drilling proponents have for years criticized the Obama administration for stymieing energy production on federal lands at a time when output boomed on state and private lands. If what DeVito says were to happen processing times for oil and gas drilling permits on federal lands would be cut by more than 71 percent. On average it took the federal government 220 days to approve drilling permits in 2015, but 116 of those days came from time spent by oil companies addressing “deficiencies” in their permit application — though the Trump administration could streamline this process as well. The Interior Department itself took 104 days on average to process drilling permits in 2015, according to government data. Cutting the wait for permits would put the federal government on par with states, like North Dakota and Texas, which have experienced an energy boom. President Donald Trump has made “energy dominance” a key part of his economic platform. “We have so much more than we ever thought possible,” Trump told energy CEOs in late June “Under the previous administration, so much of our land was off limits to development.” Trump signed an executive order in April to boost offshore energy production. The Trump administration has leased 990,157 acres of offshore areas, generating nearly $278 million in high bids revenues, mostly raised from leases in the Gulf of Mexico.
Make America Wait Again: Trump Tries to Delay Regulations out of Existence - Oil and gas wells let loose a lot of methane, a potent greenhouse gas. In April, when the U.S. Environmental Protection Agency suspended for three months an Obama administration rule to restrict such emissions, it did not defend wells or deny climate change. Instead the agency said the rule had not been studied enough. For instance, the EPA said the costs to get new well-venting systems approved had not been analyzed, so oil and gas companies had been unable to provide input as required by law. Earlier this month an Appeals Court disagreed and overturned the delay as an illegal and “capricious” maneuver. “Even a brief scan of the record demonstrates the inaccuracy of EPA’s statements,” a panel of judges from the U.S. Court of Appeals for the District of Columbia Circuit found. “The administrative record thus makes clear that industry groups had ample opportunity to comment…and indeed, that in several instances the agency incorporated those comments directly into the final rule,” the judges wrote. EPA Administrator Scott Pruitt was free to revise the methane rule, the court said, but it was already in place with the force of law, so he could not simply put it on ice.The delay tactic has become a hallmark of Pres. Donald Trump’s approach to environmental rules and other regulations, but the court decision pokes a hole in it. According to an analysis by Scientific American and legal scholars, federal agencies have suspended enforcement of at least 39 rules from the administration of Pres. Barack Obama affecting issues ranging from air pollution to airlines’ handling of wheelchairs. Other major environmental rules have been placed under review with an eye toward weakening them. Some of the delays are indefinite, pending the outcome of the reviews or court cases. Most last from a few months to a few years. The suspensions have often come at the request of affected industries. Although a new presidency always revisits its predecessor’s regulations, “what’s unique about the Trump administration is that we’re seeing so much sloppy work, in the sense of these stays that have absolutely no justification,”. “We’re seeing stays that aren’t sufficient to withstand judicial review.”
Trump’s U.S.-Steel Pipeline Plan To Backfire On Energy Projects -- One of the first memorandums that President Trump signed after taking office was ordering the Secretary of Commerce to “develop a plan under which all new pipelines, as well as retrofitted, repaired, or expanded pipelines, inside the borders of the United States, including portions of pipelines, use materials and equipment produced in the United States, to the maximum extent possible and to the extent permitted by law.” In April, President Trump ordered the Secretary of Commerce to report if “steel is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.” The Commerce Department is expected to release the report any day now, but over the past six months, the all-American steel pipeline project has raised doubts and criticism from energy companies, pipeline makers, and trade bodies, although many steel makers and steel manufacturing associations have expressed support for the plan. The Steel Manufacturers Association (SMA)—whose members represent 75 percent of U.S. steelmaking capacity – strongly supports the intent of the American-steel-first policy, arguing that it would boost the economy, increase capital investments, and create American jobs. However, the oil and gas industry—which had hailed President Trump’s approval of the Dakota Access and Keystone XL pipelines—begs to differ regarding possible protectionist policies on steel. Earlier in May, the associations published a report commissioned to ICF, which found that in recent years around 77 percent of the steel used in line pipe was imported. Due to the reliance of imported goods, lack of immediate substitutes, and the fact that some materials and equipments are not currently manufactured in the U.S. “an immediate implementation of stringent domestic content requirement for line pipe, fittings, and valves would mean that most oil and gas pipeline construction projects would be delayed or stalled,” according to the report.
Dakota Access protesters claim responsibility for pipeline sabotage -- Two Iowa activists with a history of arrests for political dissent are claiming responsibility for repeatedly damaging the Dakota Access Pipeline while the four-state, $3.8 billion project was under construction in Iowa. Jessica Reznicek, 35, and Ruby Montoya, 27, both of Des Moines, held a news conference Monday outside the Iowa Utilities Board’s offices where they provided a detailed description of their deliberate efforts to stop the pipeline's completion. They were taken into custody by state troopers immediately afterward when they abruptly began using a crowbar and a hammer to damage a sign on state property. Both women are involved in Iowa’s Catholic Worker social justice movement and they described their pipeline sabotage as a "direct action" campaign that began on Election Day 2016. They said their first incident of destruction involved burning at least five pieces of heavy equipment on the pipeline route in northwest Iowa's Buena Vista County. The two women said they researched how to pierce the steel pipe used for the pipeline and in March they began using oxyacetylene cutting torches to damage exposed, empty pipeline valves. They said they started deliberately vandalizing the pipeline in southeast Iowa's Mahaska County, delaying completion for weeks. Reznicek and Montoya said they subsequently used torches to cause damage up and down the pipeline throughout Iowa and into part of South Dakota, moving from valve to valve until running out of supplies. They said their actions were rarely reported in the media. They also contended the federal government and Dallas-based Energy Transfer Partners, the pipeline developer, withheld vital information from the public.
Tribes fight trade groups' intervention in Dakota Access pipeline dispute (AP) — American Indian tribes trying to shut down the Dakota Access oil pipeline are objecting to the possible intervention of national energy and manufacturing trade groups in the legal dispute. Attorneys for the Standing Rock and Cheyenne River Sioux tribes say in court documents filed Tuesday that the arguments of the trade groups are too lengthy and duplicate those already made by Texas-based pipeline developer Energy Transfer Partners and the Army Corps of Engineers, the federal agency that permitted the $3.8 billion pipeline which began moving North Dakota oil to Illinois about two months ago. U.S. District Judge James Boasberg, in Washington, D.C., in June ordered the Corps to further review the pipeline's impact on the Standing Rock Sioux tribe, which has sued along with three other tribes over fears of environmental harm — a claim ETP rejects. Boasberg is deciding whether to shut down the pipeline while the work is completed. The national trade groups seeking a say are the American Petroleum Institute, American Fuel and Petrochemical Manufacturers, Association of Oil Pipe Lines, national Chamber of Commerce and National Association of Manufacturers. They maintain in court documents that ceasing pipeline operations "would have serious adverse economic impacts throughout the oil industry and local and regional economies." Tribal attorneys Jan Hasselman and Nicole Ducheneaux say the groups' 18-page argument is too long and "reiterates many of the arguments and legal principles raised by the Corps and Dakota Access (ETP)." The trade groups on Wednesday submitted a revised argument that is only 10 pages. They again contended that their input can help Boasberg with his decision.
Regulators consider first major ND pipeline since Dakota Access | The Dickinson Press— The North Dakota Public Service Commission will hold public hearings starting Monday, July 24, on the largest pipeline proposed in the state since the Dakota Access Pipeline protests. Commissioner Julie Fedorchak said she hasn't heard of opposition to the project proposed by Cenex Pipeline LLC, but the commission has notified local law enforcement about the hearings. "We want to make sure we're prepared for any type of protest," Fedorchak said. Cenex, a subsidiary of CHS, proposes to build a 180-mile pipeline from Sidney, Mont., to Minot to transport refined fuels such as gasoline and diesel fuel. The project would replace a portion of an existing pipeline and add additional capacity, which the company said is needed to meet increased demand for refined fuels in the region. The $160 million project would transport about 38,000 barrels per day. Cenex says in its application that the company is proposing to reroute the existing pipeline to minimize construction in sensitive areas. The proposed route travels 150 miles in North Dakota, crossing Williams, Mountrail and Ward counties. The pipeline route crosses the Missouri River in Montana. Water crossings in North Dakota include the Little Muddy, White Earth and Little Knife rivers. Public hearings are scheduled for 10 a.m. Monday at the Sleep Inn in Minot and at 9 a.m. Tuesday at Tioga City Hall. Commissioner Brian Kroshus said the Dakota Access protests "really changed the game."
North Dakota natgas backs out Canadian (Argus) — Rising natural gas production this year from North Dakota has curbed western Canadian flows on Northern Border and limited price gains on that pipeline. Associated gas production from the Williston basin, which includes the Bakken and Three Forks formations in North Dakota, has exceeded year-earlier levels since February. Overall gas production in the state reached a record 1.85 Bcf/d (53mn m³/d) in May, up by 13pc from a year earlier, according to the North Dakota Department of Mineral Resources. Final production numbers from June may show a new high as producers there are focusing in areas with a high gas-to-oil ratio, the agency said.Spot gas prices from February to May on Northern Border at Ventura, Iowa, averaged $2.80/mmBtu, up by 55pc from a year earlier. But the price increase lagged that of the NIT/AECO hub in Alberta, where prices almost doubled year over year to $2.06/mmBtu. Northern Border delivers Canadian gas and supplies from North Dakota, to major midcontinent markets such as Chicago. The pipeline receives production from the Western Canadian Sedimentary Basin through TransCanada's Mainline system near Port of Morgan, Montana.Gas flow from Canada at Port of Morgan in the first half of 2017 averaged 1.5 Bcf/d, down by 3.3pc from the year-earlier period, according to pipeline flow data. Meanwhile, gas flow on Northern Border past the Glen Ullin compressor station, which indicates Bakken receipts, has been near its full capacity of 2.4 Bcf/d for the past year.The decrease in flows from Canada does not necessarily mean production from North Dakota has displaced Canadian imports, according to BTU Analytics senior energy analyst Erika Coombs. Production from western Canada could reach the US using various other pipelines. Alliance pipeline, which can transport liquids-rich gas from North Dakota and the WCSB to Chicago, had high utilization amid growing production.
Emails Show Iraq War PR Alums Led Attempt to Discredit Dakota Access Protesters -- Behind the scenes, as law enforcement officials tried to stem protests against the Dakota Access pipeline, alumni from the George W. Bush White House were leading a crisis communications effort to discredit pipeline protesters. Emails show that the firms Delve and Off the Record Strategies, apparently working on contract with the National Sheriffs’ Association, worked in secret on talking points, media outreach, and communications training for law enforcement dealing with Dakota Access opponents mobilized at the Standing Rock Sioux Reservation in Cannon Ball, North Dakota. This revelation comes from documents obtained via an open records request from the Laramie County Sheriff’s Department in Wyoming. As previously reported by DeSmog, the GOP-connected firm DCI Group led the forward-facing public relations efforts for Dakota Access via a front group called Midwest Alliance for Infrastructure Now (MAIN). Today MAIN has morphed into a national effort known as Grow America’s Infrastructure Now (GAIN). Delve is an opposition research firm run by Jeff Berkowitz, former Republican National Committee research director and official in the George W. Bush White House. His company led research efforts on behalf of the National Sheriffs’ Association. Off the Record Strategies, meanwhile, guided the sheriffs’ behind-the-scenes communications strategy. Mark Pfeifle runs the secretive firm, Off the Record Strategies, and served as communications advisor in the George W. Bush administration, leading PR efforts for the wars in Iraq and Afghanistan. The National Sheriffs’ Association, a trade group for sheriffs, has been lobbying the federal government for additional surplus military gear from the Department of Defense under the auspices of its 1033 program. The association was also the central organizing vehicle which brought hundreds of out-of-state cops to Standing Rock via the Emergency Management Assistance Compact (EMAC).
Santa Barbara Becomes First California City to Pass Resolution Against Offshore Oil and Gas Drilling - The Santa Barbara City Council approved a resolution Tuesday opposing new drilling off the California coast and fracking in existing offshore oil and gas wells. The resolution is the first in a new statewide campaign to rally local governments against proposals to expand offshore fossil fuel extraction in federal waters. The vote—which makes Santa Barbara the first California city to oppose both fracking and new offshore drilling—follows President Trump's April 28 executive order urging federal agencies to expand oil and gas leasing in federal waters. The order could expose the Pacific Ocean to new oil leasing for the first time in more than 30 years. "I'm thrilled to be part of this community effort to protect natural resources, the water supply and community health," said Santa Barbara City Council member Jason Dominguez, who sponsored the resolution. "At the same time, we can improve our economy, develop green markets, and bring quality jobs and living wages to the area." Today's resolution, cosponsored by Dominguez and Santa Barbara City Council member Harwood "Bendy" White, is supported by more than 20 local businesses, the Pacific Coast Federation of Fishermen's Associations, Wishtoyo Chumash Foundation and several environmental organizations, including the Center for Biological Diversity and Food & Water Watch . The groups are working with other California cities to pass similar resolutions. "The last thing Californians want is more drilling and fracking off our coast," said Blake Kopcho, an organizer with the Center for Biological Diversity's oceans program. "Santa Barbara took a stand because the city has seen the horrific damage offshore drilling can cause. Trump is delusional if he thinks we'll stand idly by and let him recklessly endanger wildlife and our communities with oil spills and toxic fracking chemicals."
House Votes To Bar Future US President From Creating Another Keystone XL Pipeline Debacle - The House voted Wednesday to prevent future presidents from scuttling oil and gas pipelines, like the Keystone XL project, that run across international borders. Lawmakers voted to give the Federal Energy Regulatory Commission (FERC) authority over the approval of interstate natural gas pipelines, and passed a measure granting the agency sole responsibility for permitting all pipelines that cross the U.S. border with Canada or Mexico. The vote was a shot across the bow of the Obama administration. Former President Barack Obama used his executive powers to deny a permit to TransCanada’s Keystone pipeline in 2015, a 1,700-mile project that is expected to carry 830,000 barrels of oil a day from Canada to Gulf Coast refineries. President Donald Trump overturned his predecessor’s decree in January, a move that roiled environmentalists and some Democrats that believed the project was bad for the environment. Activist groups sued the Trump administration over Keystone’s approval, arguing that the pipeline needed to go through another environmental review before going forward. They filed suit in a federal court in Montana — one of the states through which the project will run. The changes could get put on the back burner, however, because the Senate has not voted to approve any of the president’s FERC nominees, which could give the agency back its quorum after a handful of members retired. The commission has been shut down since February because it does not have enough members to overcome a gridlocked decision.
A Worldwide Gas Glut Claims $27 Billion Victim in Canada | Rigzone-- A $27 billion energy project in Canada just became the latest casualtyof a worldwide glut of natural gas.Malaysia’s Petroliam Nasional Bhd abandoned on Tuesday its plans for the Pacific Northwest LNG terminal, a plant that would have liquefied Canada’s gas and sent the fuel by tanker from the western shores of British Columbia to buyers in Asia. Petronas cited market conditions in its decision.Pacific Northwest LNG joins a growing list of projects that have been killed in recent months by plummeting LNG prices, throwing the economics of export terminals from Australia to Russia to Mozambique into question. Prices have crashed as increasing volumes of gas from Australia and America’s shale formations hit the water, inundating the market with so much supply that analysts say demand may not catch up until the next decade.“Developers have been trying to jump on a rather full and over-hyped bandwagon,” Muhammed Ghulam, an equity research associate at Raymond James in Houston, said by email. “There is simply too much LNG export capacity planned in North America, and cancellations, especially of Canadian projects, are likely to continue.”Last year, Woodside Petroleum Ltd. shelved its $40 billion plan to build a floating LNG terminal off Australia’s western coast and a project in Oregon was canceled. More than two-thirds of the LNG terminals proposed to come online in the mid-2020s probably won’t get built, Sanford C. Bernstein & Co. said in May.Petronas said the decision to drop the Pacific Northwest project was driven by “prolonged depressed prices and shifts in the energy industry.” The company and its partners -- China Petrochemical Corp., Japan Petroleum Exploration Co., Indian Oil Corp. -- remain committed to developing natural gas assets they’ve bought in Canada and “will continue to explore all options” for long-term investments, according to a statement.
Petronas deals fresh blow as world exits Canada’s energy patch - Petroliam Nasional Bhd.’s decision to back out of a giant gas-export project on Canada’s Pacific Coast is the latest hit to the country’s energy sector -- and to Prime Minister Justin Trudeau’s plan of balancing energy exports and climate action. The Malaysian state-run oil and natural gas producer cited an "extremely challenging environment" of low prices and other changes in declining to proceed with the liquefied natural gas project, which Trudeau approved last year after sweeping to power on pro-environment pledges. Petronas’s cancellation follows a string of exits from Canada’s oil patch as global producers focus on lower-cost areas. So far this year, ConocoPhillips and Royal Dutch Shell Plc have sold more than $20 billion in oil-sands assets to local producers Cenovus Energy Inc. and Canadian Natural Resources Ltd. “It’s another negative data point for doing business in Canada,". “The biggest concern is the perception that investors are not seeking Canada as an investment opportunity, and what does that do to other investment opportunities?" Canadian energy projects face tightening regulations, years-long approval processes, environmental opposition and legal uncertainty, particularly around the rights of indigenous people. Trudeau is trying to balance expanding energy exports while cutting Canada’s greenhouse-gas emissions. LNG is generally less controversial than crude oil, but still faced similar hurdles. The $27 billion Petronas proposal was already weighing a different site to quell opposition. That wasn’t the only challenge, though. "More specifically on this project, the challenge was the bloated cost,"
Qatar's LNG brownfield trumps Petronas' greenfield hopes: Russell (Reuters) - The shifting dynamics of the liquefied natural gas (LNG) industry have been neatly encapsulated by two recent decisions: the scrapping of a major new development and the expansion of an existing large-scale project. Malaysia's state-owned Petronas announced this week it was cancelling its $29 billion Pacific Northwest LNG venture in Canada's western British Columbia province, citing low global prices for the super-chilled fuel. The decision not to proceed came after Qatar said on July 4 it planned to raise its LNG capacity by 30 percent, which would allow it to defend its title as the world's largest producer against Australia, which is due to claim the crown once the last of its eight new projects is completed. The Petronas announcement was not unexpected, given the 12 million-tonne-a-year project has suffered delays, engineering challenges and an LNG price only a quarter of what it was three years ago. What Petronas' decision does confirm is that it's going to be extremely difficult to develop any greenfield LNG projects in the next few years, and not just in western Canada. It appears the Canadians have missed the LNG boat, with their massive projects being proposed and planned after Australia embarked on building eight new liquid gas plants and the United States chipped in with five more. The Australian and U.S. projects, and others in East Africa and Russia, are expected to boost the amount of annual LNG available globally to around 454 million tonnes by 2020, up from around 340 million tonnes at the end of last year. All this additional capacity is expected to push the LNG market into oversupply, which is likely to weigh on already weak prices. Wood Mackenzie analyst Saul Kavonic forecasts the surplus will be around 17.8 million tonnes of LNG a year by 2019.
Fracking Has Devastated Canada's Industry | The Daily Caller -- Booming energy production from U.S. hydraulic fracturing operations has hurt Canadian oil and gas projects, according to a report by Bloomberg. Canadian energy projects have become less competitive than their U.S. equivalents for a variety of reasons, including tightening regulations, long approval processes and environmentalist opposition. Canadian Prime Minister Justin Trudeau’s attempts to expand energy exports while reducing the country’s greenhouse gas emissions has further complicated the issue. Petroliam Nasional cancelled a $27 billion liquefied natural gas (LNG) export project Wednesday due to an “extremely challenging environment” for business. This followed a slew of sell-offs by major oil companies, including ConocoPhillips and Royal Dutch Shell, liquidating more than $20 billion in Canadian oil assets. “It’s another negative data point for doing business in Canada,” Swanzy Quarshie, a Canadian investor who manages $80 million in energy assets, told Bloomberg. “The biggest concern is the perception that investors are not seeking Canada as an investment opportunity, and what does that do to other investment opportunities?”U.S. fracking is out-competing Canadian oil and gas, so export terminals will increasingly be built in America. The U.S. is producing natural gas so efficiently it’s almost counterproductive to the industry.. Additionally, American politics are far more friendly to energy exports than their Canadian equivalent. “The disturbing part of this is that it’s not the first project and the first international major company to leave Canada,” Murray Mullen, CEO of a Canadian oilfield services company, told Bloomberg. “When you combine all of those together and you can’t get consensus, then nothing happens.”
One-Third of British Columbia’s Oil and Gas Wells Are Leaking Significant Levels of Methane -- About 35 per cent of British Columbia's 11,000 active oil wells, abandoned wells and water injection wells in the northeastern part of the province are leaking significant amounts of methane, according to a forthcoming new study. The report will be released later in the summer and submitted to the industry-funded British Columbia Oil and Gas Commission. According to John Werring, senior science and policy advisor to the Foundation, the study found that the average rate of flow of methane gas from surface casing vents from oil wells was conservatively estimated to be between nine and 11 cubic metres per day. That amounts to 14.2 million cubic metres, or 10,617 metric tonnes of methane a year from roughly 11,079 active oil wells, alongside abandoned, suspended and water disposal wells in B.C., said Werring. Surface casing vent flow, or leaks at the wellhead, often signal failed well integrity. Cement seals erode and crumble as they age, creating pathways for methane to migrate to the surface. "Methane leaks from abandoned wells are a huge problem and issue in this province," said Werring. "As Alberta goes, so too does B.C." That peer-reviewed study found that methane emissions from B.C.'s shale gas basins are now at least 2.5 times higher than provincial government estimates. That makes the oil and gas sector the largest source of climate pollution in B.C., a greater source of pollution than commercial transportation. Last August, Werring used a Flir infrared camera to identify the source of methane leaks at well sites. Where possible he put a balloon over the leak, and then measured the length and width of the balloon to calculate the volume of methane being leaked over time. With a Flir camera, "The vapour coming off the sites looks like smoke," Werring said. Of 178 wells that Werring examined, 62 were abandoned or suspended wells. Twenty-nine per cent of these wells were leaking methane. Werring also took images and methane samples from 25 producing oil wells and found that seven were leakers, or 28 per cent. In addition, more than half of all water injection wells were leaking methane, too.
After false dawn, Big Oil to double down on cost cuts (Reuters) - After a brief respite at the start of the year, the world's top oil and gas companies are set to double down on cost cutting as a recovery in crude prices after a three-year slump falters. Corporate hopes were raised by a deal between members of the Organization of Petroleum Exporting Countries and other non-OPEC producers to cut production, which lifted oil prices above $58 a barrel in January, after they had slid to as low as $27 in 2016. But Brent crude prices have since slipped back below $50 and banks have lowered price forecasts, amid surging output from the United States and other nations not bound by the global oil pact. Investors are again focusing on the ability of top oil firms such as Exxon Mobil, Royal Dutch Shell and Total to live within their means and eke out profits when oil has failed to recover, as hoped, to $60. The majors, often dubbed Big Oil, have already been through tough spending cuts since a collapse in crude prices since mid-2014 from above $100. They have shed thousands of jobs, scrapped projects, sold assets and squeezed service costs. The painstaking effort has paid off. Net income for Exxon, Chevron, Shell, BP, Total, Eni, and Statoil is set to double on average in the quarter ending June 30 from a year earlier, even though oil prices are back as similar levels, according to analyst estimates compiled by Reuters. But earlier savings may not now be enough, with Brent crude averaging below $50 in the second quarter and forecasts that the 2017 average will be $54. While net income for Q2 may climb year-on-year, the quarter-on-quarter picture is different. Compared to the first three months of the year, the second quarter will see net income fall by about 20 percent, according to analyst estimates.
U.S. oilfield service firms eye pricing gains despite rangebound crude (Reuters) - Oilfield service companies do not expect their businesses will get a major activity boost from oil prices in the second half of this year, but demand is robust enough that they will be able to raise fees, executives said. "We are well structured for the $45 to $55 a barrel range," Andy Hendricks, chief executive of drilling and fracking services provider Patterson-UTI Energy (PTEN.O), said in a phone interview on Thursday. "We expect the rig count for us to go up slightly throughout the year." Patterson is upgrading seven rigs at a cost of $8 million, an expense justified by contracted rates of slightly above $20,000 per day. One rig already has been delivered, and the remaining six will be delivered by December. Rival Helmerich & Payne Inc (HP.N) expects oil CLc1 to remain below $50 a barrel through year-end, but still sees opportunities to increase its rig lease rates, CEO John Lindsay said on its third-quarter earnings call Thursday. It forecasts average rig margins per day for fiscal 2018 and 2019 of $13,000 and $14,500, respectively. The optimism among service companies comes despite a cautious view among shale producers. Oil prices earlier this year climbed above $50 a barrel, and many producers set budgets expecting further gains.
US crude oil production forecast expected to reach record high in 2018 - EIA --In EIA’s latest Short-Term Energy Outlook (STEO), total U.S. crude oil production is forecast to average 9.3 million barrels per day (b/d) in 2017, up 0.5 million b/d from 2016. In 2018, EIA expects crude oil production to reach an average of 9.9 million b/d, which would surpass the previous record of 9.6 million b/d set in 1970. EIA forecasts that most of the growth in U.S. crude oil production through the end of 2018 will come from tight rock formations within the Permian region in Texas and from the Federal Gulf of Mexico. In the July STEO, the Permian region is expected to produce 2.9 million b/d of crude oil by the end of 2018, about 0.5 million b/d more than the estimated June 2017 production level, representing nearly 30% of total U.S. crude oil production in 2018. The Permian region covers 53 million acres in the Permian Basin of western Texas and southeastern New Mexico. Within the Permian Basin are smaller sub-basins such as the Midland Basin and the Delaware Basin, which contain historically prolific non-tight formations as well as multiple prolific tight formations such as the Wolfcamp, Spraberry, and Bone Spring. With the large geographic area of the Permian region and stacked plays, operators can continue to drill through several tight oil layers and increase production even with sustained West Texas Intermediate (WTI) crude oil prices below $50 per barrel (b). Based on data from Baker Hughes, 366 of the 915 onshore rigs in the Lower 48 states in June were operating in the Permian region. EIA forecasts that the Permian’s rig count will fall slightly to 345 at the end of 2017 and then grow to 370 by the end of 2018. In addition to responding to changes in WTI price, increases in rig counts are also related to cash flow. In the Permian, operators have been able to maintain positive cash flow because of lower costs, higher productivity, and increased hedging activity by producers, many of whom have sold future production at prices higher than $50/b. Available cash flows could potentially contribute to the growth of rigs in this region despite relatively flat crude oil prices since December 2016.
REPORT: US Oil Production To Shatter Historic Milestone In Trump’s First Term -- U.S. oil production could reach never-before-seen heights by the end of President Donald Trump’s second year in office, according to the Department of Energy’s statistical arm.The Energy Information Administration (EIA) “expects crude oil production to reach an average of 9.9 million b/d, which would surpass the previous record of 9.6 million b/d set in 1970.”Most of the increase in production would come from Texas hydraulic fracturing operations and offshore rigs in the Gulf of Mexico, according to EIA.EIA forecasts that most of the growth in U.S. crude oil production through the end of 2018 will come from tight rock formations within the Permian region in Texas and from the Federal Gulf of Mexico. In fact, Texas’s Permian Basin alone is expected to churn out nearly one-third of U.S. oil production by 2018. Permian production is expected to increase even if oil prices remain below $50 a barrel.Permian production is expected to average 2.9 million barrels per day of crude oil by the end of 2018, EIA reported Tuesday. Gulf of Mexico oil production could average 1.9 million barrels per day in 2018 after several major operations come online. EIA’s projection is somewhat conservative compared to one put forward by analysts at Rystad Energy in June. Rystad predicts U.S. crude oil output could top an old record set in November 1970 by the end of 2017. EIA’s projection is good news for Trump’s “energy dominance” agenda. The administration has put forward policies to boost oil production on federal lands, while also rolling back regulations on oil and gas drilling.
EIA Drilling Productivity Report Misleading the Market? - Recent headlines from journalists and industry veterans alike have pointed to the latest EIA Drilling Productivity Report (DPR) as a sign that US oil production growth rates are slowing and that the growth in Permian productivity has stalled out. (See chart below). BTU Analytics would contend that those hoping that Permian productivity has hit a peak and thus US oil production forecasts are overblown are deceiving themselves. Each month, the EIA estimates the productivity of the US shale rig fleet for seven major shale producing areas including the Bakken, Eagle Ford, Haynesville, Marcellus, Niobrara, Permian, and Utica. Let’s begin by briefly reviewing the EIA Drilling Productivity Report model methodology using a numerical example in parenthesis. […] There are several potential flaws with modeling rig productivity utilizing [EIA's] approach. The first flaw is that it assumes all new production in period 2 originated from rigs active just two months prior. It’s no secret at this point that the industry has a tremendous ability to add rigs quickly to a region, but completion crews often fail to keep pace with producers in the basin. From 2009-2015, operators in the Marcellus and Utica outstripped the ability of infrastructure and completion crews to keep pace with drilling activity, leading to a peak of nearly 1,600 wells in excess backlog, and oil plays have been no different. The price crash in 2015 led operators to defer completions across all of the major oil producing areas, leading to an excess backlog that peaked in 2016 at over 2,000 wells in the Eagle Ford, Permian, Bakken, and Niobrara.
Is India's appetite for US crude oil sustainable? -- Platts Snapshot video - India, one of the fastest growing oil demand centers in Asia, has added the US to its long list of crude suppliers. Early this month, Indian Oil Corp sealed its first deal to import US crude. This was followed shortly by BPCL's purchase of Mars and Poseidon grades. Sambit Mohanty, S&P Global Platts senior editor for oil news and analysis, explains why India's diversification is crucial and what it could mean to Middle Eastern suppliers.
Venezuela says US refiners face 'difficult situation' if Trump imposes sanctions -- US refiners stand to lose the most if the Trump administration imposes sanctions that restrict or ban imports of Venezuelan crude, Venezuela's oil minister Nelson Martinez said Monday. He noted that many refineries in the US Gulf Coast have made significant investments in the past few decades to optimize runs of heavy oil, which is primarily what Venezuela produces. "We sell a lot of our crude oil to these companies in the Gulf," Martinez said, naming Valero, Philips 66 and Marathon. "Some of these refineries are designed and built based on the consumption of heavy and extra-heavy oil from Venezuela," he continued. "These [sanctions] can create a real difficult situation for these refineries, and that is what has to be taken into account before taking these decisions." The Trump administration is considering the sanctions in response to Venezuelan President Nicolas Maduro's pledge to rewrite his country's constitution amid an economic, political and humanitarian crisis that has seen citizens protest daily. US officials have said they are "mindful" of the impact potential sanctions on crude imports would have on US businesses and consumers and said all economic effects were being studied. "The United States will not stand by as Venezuela crumbles," President Donald Trump said in a July 17 statement, warning of "strong and swift economic actions" if Maduro proceeds with a special vote on July 30 to elect a Constituent Assembly with powers to rewrite the country's constitution and further entrench him in power. US refiners, in a July 6 letter through their trade group American Fuel & Petrochemical Manufacturers, have warned the Trump administration about the "significant negative impact" that sanctions on Venezuelan crude imports could have. "Sanctions limiting US imports of Venezuelan crude would disadvantage many US refineries, particularly those in the Gulf Coast and East Coast regions, that have optimized to utilize sour crudes produced in Venezuela," AFPM President Chet Thompson wrote, adding that due to the nature of the global oil market, crude bound for the US could be diverted to Asian trading competitors if sanctions take root.
Big Oil warns new Russia sanctions could deal out US companies -- The oil industry has warned US lawmakers that proposed new economic sanctions on Russia approved by the US Senate could take their toll on US jobs and oil and gas projects around the world, the FT reported. American oil and natural gas companies are pushing for changes to avoid unintended consequences. The legislation, which passed with a 97-2 vote in the Senate in June and is now with the House of Representatives, would prohibit US individuals and companies from providing goods, services or technology for deepwater, Arctic offshore or shale projects where Russian companies are involved, according to the newspaper. Alexei Kokin, a senior oil and gas analyst at UralSib Financial Corp in Moscow, told New Europe by phone on July 20, “It’s still unclear at this point what happens and how this bill is going to be changed perhaps in Congress”. “The problem here is if you only prevent Americans from getting these contracts, especially construction contracts, it means giving preference, essentially handing an advantage mostly to Europeans,” Kokin said, adding that Washington-based policymakers should also find a way to put pressure on European companies to stay apart from these projects as well. “Otherwise you are hurting American competitiveness so I would presume that if the sanctions actually are imposed on the pipeline projects, there should be a way for Americans to also prevent Europeans from any involvement,” he said. “So everybody will suffer and that’s it,” he added, laughing.
Are the Latest Russia Sanctions Really About Forcing US LNG on Europe? -- Yves Smith - One of the dangers of being limited to the English-language press is that important aspects of major news stories can readily be reported in an awfully one-sided manner. The object lesson today is the latest US sanctions against Russia, which passed the House today by a 419-3 margin. The hot button for Europeans that the bill targets the NordStream2 pipeline that would deliver gas from Russia to Germany. They also single out a large range of players, including Russian banks, energy exporters and projects, and arms merchants. Moreover, unlike past sanctions, they cannot be reversed by the President but require Congressional approval for any rollbacks. Unlike past sanctions against Russia, which European governments have backed, albeit with some grumbling, since some countries, particularly Germany and the Netherlands, have commercial ties with Russia, the EU is opposed to the latest US campaign. From the Financial Times: EU officials are concerned that the sanctions could damage multibillion-euro pipeline and infrastructure projects straddling Russian territory and beyond in areas as far apart as the Baltic and Black seas. A list prepared for EU commissioners shows that projects at risk include the proposed Baltic liquefied natural gas plant on the Gulf of Finland of the Baltic Sea, in which the Anglo-Dutch group Shell has a stake alongside Russia’s Gazprom. The list also includes Blue Stream, the gas export pipeline linking Russia with Turkey in which Eni of Italy has a 50 per cent. The threat to this pipeline centres on penalties against the maintenance and repair of pipelines on Russian land or waters. Documents seen by the Financial Times also state that BP “would not be able to engage” in its activities with Rosneft if the US penalties hit operations by European companies to maintain, repair or expand pipelines in Russia. The list also includes the CPC pipeline in which European groups such as BG Overseas Holdings, Shell and Eni work with Russia to carry Kazakh oil to the Black Sea via Russia. Both the existing pipeline and its proposed expansion could be hit by the sanctions. As a result, European officials believe the impact of the new sanctions would go far beyond the contentious Nord Stream 2 project that Gazprom is building between Russia and Germany and the existing Nord Stream 1 pipeline. New Europe states that Brussels plans to retaliate against the US if the sanctions are imposed, although it may not be able to deliver on its threat: It is unclear whether EU member states such as the UK, the Baltic States, Poland, or Hungary are willing to sign off retaliatory measures towards Washington. I hope German language readers can help flesh out the input from a regular reader of the German press. He said that the German businessmen and politicians see the latest round of sanctions have as a major objective foisting US gas on Europe and that they don’t like being stuffees. SPD party leader and foreign minister Sigmar Gabriel apparently made a speech on this topic in the last few days. This would be consistent with his earlier statements, as reported by WSWS last week:
Analysis: China's record US crude imports to give OPEC more sleepless nights - China's import of US crude oil crossed 1 million mt for the first time in June, an eight-fold rise year on year, as elevated Dubai prices prompted both state and independent refiners to use it as an opportunity to diversify supplies, a trend that could add to the headache of OPEC suppliers. While shipments from the US to China hit 1.09 million mt, or 268,000 barrels/d, in June, imports from Saudi Arabia fell to a six-month low of 940,00 b/d in the same month, a sign that China is more than willing to shed its dependence on OPEC supplies and widen its feedstock sources as much as it can. "China's imports from the US in H2 is likely to go up because of expectations that the supplying country will lift production, thereby boosting availability," said S&P Global Platts senior analyst Song Yen Ling. China's imports from the US have multiplied from just about 34,034 b/d a year ago. June 2017 import volumes were also 49.1% higher than May imports of 179,442 b/d, data released by the General Administration of Customs showed. A closer look at the cumulative import numbers shows that OPEC's share in the world's second-biggest oil consuming market fell to around 55% in H1, from 58% in the same period a year earlier. Market participants said that OPEC's share is unlikely to rebound in H2, as Saudi Arabia's crude exports are expected to be more or less capped at the current level because of OPEC-led efforts to clear the global oil supply glut.
Why record U.S. oil exports are poised for even more growth (Reuters) - U.S. refineries are producing more fuel than ever as they seek to meet rising demand - from overseas, rather than the drivers on nearby roadways. Last year, the U.S. became the world's top net exporter of fuel, an outgrowth of booming domestic production since the shale oil revolution started in 2010. That's a fundamental shift from the traditional U.S. role in global markets as a top importer and consumer. Net exports are on track to hit another record in 2017, making foreign fuel markets increasingly important for the future growth prospects and profit margins of U.S. refiners. Shale oil producers have provided refiners with abundant and cheap domestic crude supplies, giving them the raw material they need to produce internationally competitive fuel. The nation set a record in 2016 by sending a net 2.5 million barrels per day (bpd) of petroleum products to foreign markets. That compares to net fuel imports of 2.3 million just a decade ago, according to U.S. government data. Booming exports have bolstered margins at the biggest U.S. refiners - including Marathon Petroleum and Valero - and compensated for lack of strong growth this year in U.S. fuel demand. Now, the government of U.S. President Donald Trump is seeking to deregulate oil and gas production to further leverage rising U.S. exports for international political gain - a policy Trump calls "energy dominance". Surging U.S. crude production has already complicated the ongoing effort by the Organization of the Petroleum Exporting Countries (OPEC) to tame a global glut that has halved oil prices since 2014. The United States remains a massive importer of crude oil - regularly trading the top spot with China - but American refineries now re-export much of that oil as jet fuel, diesel and gasoline. The U.S. has a growing role in satisfying demand for motor fuel in countries such as Mexico and Brazil, where the thirst for U.S. fuel is likely to accelerate amid refinery outages and high production costs. Refined U.S. exports are also going further afield to Asia, and diesel exports to Europe increased in June to levels not seen in nearly two years, traders have said.
Saudi Arabia Turns Off the U.S. Oil Tap - At last, Saudi Arabia seems to be doing what it takes to reduce the world's most visible oil glut: the one in the U.S. Unfortunately, its renewed vigor comes as OPEC's deal to reduce excess crude stockpiles starts to show signs of unraveling elsewhere, a subject that will be wrestled with by the group's oil ministers as they and other producer nations meet in St Petersburg on Monday. Data published last week by the U.S. Energy Information Administration show that imports from Saudi Arabia in the week to July 14 fell to their lowest for seven years: just 524,000 barrels a day. For sure, one week's number doesn't mean much on its own, particularly when a single very large crude tanker could raise or lower that figure by half.But this isn't an isolated figure. The EIA data show a clear drop in deliveries from Saudi Arabia since the start of June. The average rate of U.S. imports from the desert kingdom over the past six weeks has dropped by 450,000 barrels a day, or 34 percent, compared with the first six weeks of the year.Given that it averages six weeks for a tanker full of crude to travel from the Persian Gulf to the U.S., this drop in imports reflects a slowdown in Saudi shipments that began in mid-April, which shows up in Bloomberg tanker tracking data for the Kingdom. So Saudi Arabia is finally slashing exports to the U.S., even as shipments to other destinations -- with less visible inventories -- have been maintained, or even risen. This is crucial, because the failure to drain U.S. storage tanks has been a major factor in driving down oil prices. "Exports to the U.S. will drop measurably," Saudi oil minister Khalid Al-Falih said in May. The kingdom is now making good on that promise.Preliminary tanker data must be treated carefully, though. Several ships show no final destination and could still end up in the U.S. Saudi crude usually moves across oceans in 1 million or 2 million barrel shipments, which means a pickup in flows to the U.S. at the end of July could change the picture dramatically. Anyway, one has to ask whether Riyadh's new resolve is too late as the OPEC-brokered deal to remove about 1.8 million barrels a day from the world's supply is looking a little shakier. In June, OPEC members' compliance with their agreed cuts fell to its lowest level since the deal came into effect (although 95 percent is still pretty good).
Anadarko becomes first U.S. oil producer to slash 2017 capex (Reuters) - U.S. oil producer Anadarko Petroleum Corp (APC.N) posted a larger-than-expected quarterly loss on Monday and said it would cut its 2017 capital budget by $300 million because of depressed oil prices CLc1, the first major U.S. oil producer to do so. Anadarko and the rest of the U.S. shale oil industry have been grappling with how to conserve cash and maintain growth opportunities even as crude prices have slumped since January. Many Wall Street analysts had asked U.S. producers to consider cutting budgets, and it was unclear which company would do so first. Anadarko, the first major U.S. producer to report quarterly results, ended that guessing game. Several U.S. shale producer executives had said last month that they had flexibility in spending, and would not invest cash blindly. Shares of Houston-based Anadarko fell 3.8 percent to $42.55 in after-hours trading on Monday. Anadarko in March had forecast 2017 spending of $4.5 billion to $4.7 billion. Anadarko, which operates in the U.S. Gulf of Mexico as well as Colorado and other U.S. shale regions, South America and Africa, posted a third-quarter loss of $415 million, or 76 cents per share, compared to $692 million, or $1.36 per share, in the year-ago period. Average daily sales volumes, the physical amount of crude and natural gas sold, fell 20 percent to 631,000 barrels of oil equivalent per day (boe/d). Anadarko in May closed more than 3,000 wells in Colorado after a fatal home explosion was linked by local authorities to a well owned by the company. Given those closings, Anadarko said it was trimming its 2017 production forecast to 644,000 boe/d, a 2 percent cut.
Anadarko plans to boost well completions in second half of 2017 - Anadarko Petroleum plans to bring more oil wells into production over the next few months after leaving scores of them untapped in West Texas and Colorado. In Colorado's DJ Basin, the Woodlands-based oil company will boost well completions by 50 percent in the second half of the year. And in the Delaware Basin in West Texas, Anadarko has recently contracted six hydraulic fracturing crews to work off much more of its backlog of uncompleted wells. "We did build some drilled-but-uncompleted wells on the front end (of 2017), but we expect to work those off in the back half of the year," said Brad Holley, an executive vice president of U.S. onshore exploration and production at Anadarko. In the Permian Basin, the number of untapped wells has climbed to 2,244 last month, up from 1,467 in November. The company on Monday said it would pare back capital spending by $300 million, a small portion of its overall investment budget. But increasing the number of wells it brings into production will boost its oil production. It's a sign the oil industry, which has drilled faster than it completed wells, is getting closer to the payoff of this year's oil boom
First Anadarko, Now Whiting: Second Shale Company Slashes CapEx Budget On Monday we reported that Anadarko, which previously had been lamenting the egregious amount of liquidity in the energy sector, became the first company to slash its full year capex budget by $300 million from a previous range of $4.5-$4.7 billion. As noted in our discussion, this was a material event not only for APC but the entire sector as "the Anadarko news is clearly negative for its shale peers, most of whom are set to announce similar capex declines." Moments ago, this was confirmed when Whiting Petroleum, the largest oil producer in North Dakota's Bakken region, became the second shale driller in the current cycle to slash its full year capital spending budget by 14% to $950 million from a prior estimate of $1.1 billion. .Whiting CEO James J. Volker explained it as follows: “One of our priorities is to maintain a strong balance sheet while delivering high returns and sustainable growth to investors. We plan to reduce capital spending to $950 million while achieving 14% production growth from first quarter to fourth quarter 2017. This is a testament to the high quality of our asset base, which is also evident in the strong 23% growth in proved reserves from year-end 2016 levels. A large component of this growth was driven by the effect of enhanced completions in the Williston Basin.” The recent collapse in WLL's capex as a result of the drop in oil prices is shown below, and at the current budget it appears that there will be little if any incremental capex growth from here.
Some oil services could get a boost from DUC calls - E&P firms have cut costs and got a bit of a tailwind from the rally in oil prices earlier this year, leading to a sharp increase in the number of rigs in operation. But it’s hard to maintain that sort of enthusiasm when oil futures don’t rise above $50 a barrel until early 2020. So the number of oil rigs being added has slowed markedly: That, along with signs of a slowdown in drilling permits being issued, is bad news for companies that provide land-drilling equipment and services, such as Precision Drilling Corp That stock has fallen 42 per cent this year. A jump on Wednesday, in response to bullish US oil inventory numbers, shows it would stand to gain from a sustained move by crude futures above $50. I wrote some time agoa about the rapid build-up in drilled but uncompleted wells, or DUCs, in US shale basins this year. The DUCs represent potential oil supply of perhaps several hundred thousand barrels a day (for their first year of production) once they’ve been fracked. With the E&P sector as a whole having set ambitious production growth targets for 2017 earlier in the year — when futures prices were higher — the most important aspect of the second-quarter earnings calls about to begin will be any sign companies are dialling back their plans. It’s a tricky balancing act because prudence demands they protect balance sheets, but investors in the sector have traditionally rewarded growth. One likely outcome, though, is that the emphasis in investment swings away from the first half’s drilling frenzy toward completing wells, which can then add to production. Even at an oil price of around $50, a new well producing 350 barrels a day — about average for Permian wells last year, according to Wood Mackenzie — would still pay back a completion cost of $4.5 million in less than a year.
Schlumberger eyes midterm supply crunch from global overworked assets: CEO -- As US shale operators and OPEC Gulf countries and Russia continue battling out low oil prices versus global supplies, the bulk of the world's producers are keeping output flat by working assets harder -- which could result in a midterm supply crunch, a key oilfield executive said Friday. The "harvesting approach" now pursued by many national and international oil companies that represent over half the world's production at a time of persistently low crude prices below $50/b may not be the best course for oil markets long term, Paal Kibsgaard, CEO of oil services provider Schlumberger, said in a quarterly earnings conference call. "The longer the current underinvestment carries on, the more severe the cliff-like decline trend will likely be when producers run out of short-term options to maintain production," Kibsgaard said. "Given the size of this production base, it will be difficult for the rest of the global producers to compensate for this pending supply challenge." Meanwhile, two things are "very clear," he said: "Come 2019 or 2020 we will have significant supply challenges," and global investments will rise in that period, as this have already begun. Until then, "what happens to oil markets comes down to the interplay between Russia/OPEC on one hand, and US producers on the other," the CEO said. US land producers, which account for 8% of global oil supply, have taken a "fast barrels" track as they ramp up production this year after a two-year industry downturn, he said. The breakneck rampup in US production -- about 450,000 b/d since the start of this year -- has "spooked" oil investors into believing that oil will flood the markets and keep global inventory levels relatively high into the foreseeable future, he said. As a result, pursuit of short-term equity returns in US land E&P stocks prevents recovery of oil markets, sends oil prices tumbling further and tamps down any equity appreciation the investments had aimed at creating, he added.
Halliburton, Schlumberger take hit on Venezuela bills in second quarter (Reuters) - Venezuela was unable to pay its biggest oilfield suppliers in cash in the second quarter, and top service companies Halliburton and Schlumberger accepted promissory notes that they immediately wrote down by hundreds of millions of dollars, their second-quarter reports showed. Schlumberger, the world's largest oilfield service firm by revenue, took a $510 million impairment charge, the vast majority of which was on promissory notes received from Petroleos de Venezuela in lieu of $700 million in outstanding fees. Halliburton similarly recorded a pre-tax charge of $262 million on promissory notes from its main customer in Venezuela in exchange for $375 million in fees, according to its financial filing. Neither company identified PDVSA by name, and both described the oil company as their "primary customer" in Venezuela. A PDVSA source confirmed it issued the notes. Foreign oil companies operating in Venezuela have become increasingly exposed to that country's economic woes, which have worsened under socialist President Nicolas Maduro. A brutal recession and persistent low oil prices have the cash-strapped nation delaying payments or using government-issued notes to pay suppliers. Last month, Weatherford International plc said it would amend its financial statements to reclassify $31 million that was previously booked as revenue as interest payment and a reduction in accounts receivable because of PDVSA's lengthy delay in payment. Representatives from Halliburton and Weatherford did not immediately respond to requests for comments. Schlumberger referred questions on the impairment charge to its coming financial filings.
Welsh officers 'will not facilitate Cuadrilla's business', Police and Crime Commissioner says - Lancashire Evening Post: Lancashire Constabulary had announced a 'number of other forces' were helping police Cuadrilla's fracking site in Preston New Road this month and next after protesters stepped up their presence there. But Mr Jones, an environmental campaigner who fought to halt fracking plans in Wales prior to being elected, tweeted: "No more @NWPolice officers will be going to facilitate Cuadrilla's business in Lancs. Let them pay for their own security. #capacity" When asked if he helped to 'bring this change about', he replied: "The decision was an operational one over which I have no say but I did make feelings known and may have influenced." He later said in a statement: "I was told last week there would be no further deployments after I made representations around capacity issues in North Wales and questioned how could we justify sending officers to Lancashire in those circumstances. “Why should officers from North Wales be sent to police and facilitate an activity where the activity is more or less unlawful in their own country?
Farmers and growers stand up to fracking in protester 'month of action -- The demonstration expected to shut down the Preston New Road development for a day last week (July 21) as part of a ‘rolling resistance’ month of action to disrupt work at the Cuadrilla site every day in July. It came as a new YouGov survey found about 66 per cent of Lancashire residents opposed fracking near their homes. Pilling organic grower Alan Schofield said: “As a Lancashire vegetable farmer whose livelihood depends on the health and wellbeing of our soils, I am shocked this development has been allowed. “The good people of Lancashire said no to this development, only to be overturned by central government. “We are not just fighting an unwanted and highly polluting industry, the whole of our demographic process is at stake.” A social media event advertising the demonstration slammed the fracking industry for ‘threatening widespread pollution whilst billing itself the farmer’s friend’. Little Plumpton farmer Allan Wensley was criticised for his decision to host the first Lancashire shale gas site but said he did not regret his decision. Liz Humphrey of the Landworkers Alliance added: “The fracking industry’s international legacy in the US and Australia to date is the permanent contamination of fertile land and critical water supplies. “Livestock are often the first to suffer the impacts of air and water pollution and the standard response to the devastation of herds is denial rather than compensation.”
Fracking drilling rig snuck on site overnight 'to avoid protests -- A company preparing to be the first to start large-scale UK fracking has breached its planning permission by delivering a drilling rig overnight, prompting the local authority to warn it is considering action against it.Cuadrilla said that around 30 trucks had made deliveries to its Preston New Road site near Blackpool at 4.45am on Thursday. It has permission to frack at the site later this year.Campaigners accused the company of bringing in the rig “under the cover of darkness” to avoid protests, and said the move would only strengthen opposition.The rig will be used to drill a 3,500m pilot well, taking samples to find the best spot to drill two vertical exploratory wells, from which the UK’s first horizontal shale wells will be drilled.But Lancashire county council said Cuadrilla had breached the terms of its planning permission by delivering equipment on heavy vehicles outside of the permitted hours of 7.30am-6.30pm. A council spokesman said: “We are writing to the operator requiring them to put measures in place to prevent a recurrence, as well as considering what further action to take.” The council could not say what form that action might take. Cuadrilla defended its decision to deliver outside of its permitted hours, saying it had done so in consultation with the police, with the aim of minimising disruption on the road outside the site. The company said the road has been closed or reduced to a single lane several times in recent weeks during protests. Ellie Groves of Reclaim the Power, a group which has been protesting outside the site for months, said: “While they congratulate themselves, we won’t be distracted by today’s news, and it will only strengthen everybody’s resolve to keep fighting.”
Mexico Delays Next Oil Auction to Let Huge New Find Sink - Mexico will delay its next offshore oilfield auctions by a month, giving international bidders more time to evaluate recent major crude discoveries that highlight the potential value of the assets. A new billion-barrel find announced last week "confirms that the Mexican side of the Gulf of Mexico is very prolific," said Juan Carlos Zepeda, Mexico’s chief oil regulator in an interview Friday. "International and national interest is awakening." July 12 marked perhaps the single most successful day for the Mexico oil industry since the government ended Petroleos Mexicanos’s government-owned production monopoly in 2014. Premier Oil Plc, Sierra Oil & Gas and Talos Energy LLC reported a reservoir with an estimated 1.4 billion to 2 billion barrels of oil in the southern Gulf of Mexico. On the same day, Italian producer Eni Spa said its March find in Mexico’s offshore waters also contains the equivalent of as much as 1 billion barrels, and Mexico successfully auctioned 21 of 24 onshore fields to private companies. "There was already interest to come, explore and work in the Gulf of Mexico before these finds, but now to have discoveries in such a short time, interest of international entrants to have activity in Mexico has renewed," Zepeda, head of the National Hydrocarbons Commission that oversees the industry, said in an interview in Bloomberg’s Mexico City office. The Talos-led discovery is expected to produce crude in three to four years, Zepeda said. Eni, which won rights to develop three more shallow water areas in the Gulf of Mexico last month, will accelerate development plans as it expects production by as soon as 2019, he said. Mexico wants to give potential international entrants plenty of time to digest all the new data before they bid for new leases in the region. The Mexican government will keep as much as 90 percent of the profits earned by the Eni project and around 83 of those generated from the Talos consortium, according to a July 16 emailed statement from the Energy Ministry.
Lawmakers divided over a ban on Venezuelan oil amid fears of a Russian takeover -- In advance of a July 30 vote that could strip Venezuelan lawmakers of their constitutional power, Cuban-American politicians are going after Venezuela’s jugular: the largest proven oil reserves in the world. Over the past few weeks, as the tough talk on Venezuela reaches a fever pitch, South Florida lawmakers are uniformly behind a ban on Venezuelan oil imports to the United States, a drastic step that could deal a critical blow to Venezuela’s slumping oil industry. The lawmakers seem convinced that the White House will do something drastic, going beyond the long-used tactic of issuing sanctions on individual Venezuelan government officials suspected of money laundering and drug trafficking. “We will have a swift and firm response from this administration,” Miami Rep. Ileana Ros-Lehtinen said this week. “If this happens on July 30, I am convinced without any doubt that the President of the United States will act swiftly and decisively to ensure that there will be measures taken against individuals and potentially sectors for the unconstitutional overthrow of democracy and the replacement with a Cuban-style regime,” Sen. Marco Rubio said on Wednesday. For now, Congress is united in its disgust toward Venezuelan President Nicolás Maduro, but some lawmakers — even among Republicans — disagree over how far the U.S. should go if Maduro’s constituent assembly comes up for its scheduled vote. The Cuban Americans favor a ban on Venezuelan oil imports, a far-reaching action that could further cripple an economy already mired in hyperinflation. But some leading foreign-policy voices in Congress, including Senate Foreign Relations Chairman Bob Corker, a Tennessee Republican, have doubts. “I believe there’s a crisis coming in Venezuela, and I think we need to be careful about not making ourselves the focus of that crisis,” Corker said. “Sometimes what we do unifies the chavistas.”
Prelude: a new era for LNG? -- Prelude, the world’s largest floating LNG vessel, has arrived in Australia. Shell, the developer and operator, has sounded the trumpets and declared it “a new era for the LNG industry.” Indeed, it may be, but this is a very expensive way to produce LNG and one that is operationally unproven. The world’s first FLNG vessel, developed and operated by Malaysia’s Petronas, the PFLNG Satu facility on the Kanowit gas field, only loaded its first cargo in April. It has yet to ramp up to full production. Moreover, it is a much smaller beast than Prelude. PFLNG Satu will operate in 70-200 meters of water and has a processing capacity of 1.2 million mt/year of LNG. Prelude, by contrast, will displace more water than six of the world’s largest aircraft carriers, and is the world’s largest ever offshore facility. It will produce 5.3 million mt/year of liquids, of which 3.6 million mt/year will be LNG, 1.3 million mt/year condensate and 0.4 million mt/year LPG. It will operate in 250 meters of water and experience category 5 cyclones over its 20-25 year forecast life, when it is expected to “shelter in place”. No one is throwing around precise numbers for the final cost, which is never a good sign. A “brought in under budget” announcement would surely have been made, if it could have been. First-of-a-kind technologies, particularly on this scale, are rarely cheap. Prelude’s cost has been estimated by external observers at between $10.8 billion and $12.6 billion. Shell said way back in 2011 that it would be competitive with other new LNG projects at between $3.0 billion and $3.5 billion per million tons of LNG production capacity.
China, India oil imports show Saudi Arabia is already carrying the burden of cuts: Russell (Reuters) - Saudi Arabia wants to do more to boost crude oil prices by taking a razor to its exports, but the kingdom is already doing much of the heavy lifting in Asia, where it is surrendering market share in the world's top importing region. Saudi Energy Minister Khalid al-Falih said after a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies on Monday that his country would limit crude oil exports to 6.6 million barrels per day (bpd) in August, almost 1 million bpd below levels a year ago. This commitment is belated recognition that OPEC and its non-OPEC allies, including Russia, have to do more than just comply with their November agreement to cut output by a combined 1.8 million bpd. For the output restrictions to work by draining global oil inventories, the producers will also have to curb exports. Vessel-tracking data from Thomson Reuters and other service providers suggest that cuts to exports in the first half of 2017 by OPEC and its non-OPEC allies haven't matched the reductions in stated output. However, data from Asia's top two oil importers, China and India, show that Saudi Arabia is already taking much of the pain by cutting the amount of crude it supplies. China imported the equivalent of 8.56 million bpd of crude in the first half of 2017, up 13.8 percent on the same period a year earlier, according to calculations based on customs data released on Monday. Of this Saudi Arabia supplied 1.07 million bpd, a gain of just 0.5 percent over the first half of 2016.This meant that Saudi Arabia, which was China's top supplier in 2015 and was only just pipped by Russia last year, has now slipped to third.
Fearing Global Sanctions, Russia Speeds Up Turkish Stream Gas Pipeline - Russian natural gas giant Gazprom is speeding up laying pipe for its Turkish Stream pipeline out of fear that extra-territorial sanctions being proposed by the U.S. Senate will eventually shut that project down. Russian business daily Vedomosti reported on Tuesday that Gazprom contractor Swiss Allseas has already laid about 15 miles of the pipeline under the Black Sea. Marine traffic coordinates on Swiss Allseas deep sea unit Audacia shows its vessels are in place and moving with Turkish Stream ahead of schedule. Gazprom's pipe laying is a slightly risky endeavor because there has yet to be any agreement with the Turks as to the points of entry and inland infrastructure for the pipeline. Still, these are early miles out of Russia, just south of the Crimea peninsula. There is a long way to go before they get to Turkey. The Turkish Stream pipeline was created as an alternative to South Stream, a pipeline deal between Gazprom and south European companies like Italy's Eni SpA to create another Russian gas route into Europe rather than through Ukraine. The Europeans killed that line as Ukraine-related sanctions took off in 2014. Ironically, the same government authorities have not killed a second Gazprom line, called Nord Stream II, which is scheduled to be built in the Baltic Sea and has counted on financing from Germany's Wintershall and Austria's OMV. Both of their government's slammed the U.S. Senate for singling out Nord Stream in its latest sanctions upgrade bill. Turkish Stream was not mentioned in the bill.
Libyan crude oil production at 1.069 million b/d: source -- Libya's oil production is 1.069 million b/d, and the country hopes to grow its output to as much as 1.25 million b/d this year, a source close to production said Monday. This would be the first time since 2013 that Libyan output would break above 1 million b/d, but state-owned National Oil Corp., or NOC, has been strangely silent, and has not officially confirmed current production. In its last statement on production in June, Libyan oil officials told OPEC its produced 852,000 b/d. The silence has led some industry observers to doubt whether production was stable at this level, and it remains unclear which fields have contributed to the increased rates. "They might have indeed hit that 1 million b/d mark. But my feeling here is that this number is capacity, not average production, and output is probably fluctuating between 900,000 b/d and 1 million b/d," North African analyst with Medley Global Advisors Mohammed Darwazeh said. Rising production has thrown the spotlight on NOC Chairman Mustafa Sanalla, who was invited to explain Libya's production outlook at the OPEC/non-OPEC technical committee meeting in St Petersburg, Russia on Saturday. OPEC has been in a quandary in the last few months, as the effectiveness of its cuts is being blunted by the sharp rise in production from Nigeria and Libya, two members of the organization that were exempted from the original output deal in November. Omani oil minister Mohammed Rumhy told S&P Global Platts in an interview in St Petersburg, that Libya and Nigeria should have their exemptions from the cuts rescinded and they should stop talking about their plans to increase production, which he said was contributing to bearish sentiment in the market.
Libya’s Oil King Won’t Be Stopped By OPEC - Conflict-torn Libya, divided between rival factions in the east and the west, recently reached 1 million bpd of crude oil output—for the first time since 2013. The oil production recovery has put in the spotlight the chairman of Libya’s National Oil Corporation (NOC), Mustafa Sanalla, whom analysts see as a central figure in the oil sector, wearing the hats of both a diplomat and an oil minister. It will be Sanalla who will lead Libya’s delegation at the upcoming meeting of the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) in Russia, at which he will argue his country’s position and share production plans for the immediate future. . Libya’s production averaged 390,000 bpd throughout 2016 and 404,000 bpd in 2015, according to OPEC’s secondary sources. In the fourth quarter last year, output increased slightly to an average of 574,000 bpd. Since then, the lifting of port seizures and blockades and the June interim deal with Germany’s Wintershall to immediately resume production in concession areas and related fields, which unblocked 160,000 bpd worth of output—has helped Libya to nearly double production.The recovery of Libya and Nigeria’s crude oil production in the past two months has rekindled fears that rising supply from those two exempt African producers is offsetting a large part of the reductions and is depressing crude oil prices, alongside rising U.S. shale output. Libya’s oil production recovery is the primary goal of NOC’s chairman Sanalla, who said in an opinion piece in the New York Times in June, referring to the country’s internal power struggles: “Between 2013 and last September, these blockaded nearly all of Libya’s main oil ports and tried to leverage that chokehold into ransom money and political power. That cost the country over $120 billion in lost revenues and most of its financial reserves.”Arguing that the country’s oil and gas resources should not be held hostage to power struggles and fractious politics, Sanalla noted: “Caught between those rivals, we at the N.O.C. intend to remain neutral until there is a single legitimate government we can submit to.”
OPEC grapples with growing threats to oil deal. OPEC is worried that its plan to drain a global oil glut—and thereby raise crude prices—isn’t working. A long-planned meeting in St. Petersburg, Russia, on Monday to discuss the oil market with big producers outside the cartel has turned into a critical gathering. Over the weekend, the Organization of the Petroleum Exporting Countries said, its ministers have held a series of “intensive consultations” about the challenges for an output-cutting deal the 14-nation cartel struck last year with Russia and other big producers. The agreement was supposed to take almost 1.8 million barrels of crude oil off the global market and drain an oversupply that has weighed prices down for three years and sent a shock through the economies of oil-producing economies. But prices have remained stubbornly low as the glut persists. Brent, the international benchmark, fell 2.5%, to $48.06 on Friday because of doubts about OPEC’s ability to turn around the market. Libyan and Nigerian officials have signaled a willingness to limit their production once it stabilizes, but the details are being negotiated. An OPEC official said Iraqi production would also be discussed, as the cartel member’s output has remained much higher than its agreed upon levels.
Hedge funds close bearish positions in crude and gasoline- Kemp (Reuters) - Hedge fund managers have continued to cover short positions in crude oil and gasoline, helping lift prices across the petroleum complex against a backdrop of improving fundamentals.Hedge funds and other money managers reduced short positions in the five major petroleum futures and options contracts by a further 44 million barrels in the week to July 18 (http://tmsnrt.rs/2gWa6Ui).Total short positions in ICE Brent, ICE and NYMEX WTI, NYMEX gasoline, and NYMEX heating oil were cut to 350 million barrels, from a record 510 million barrels three weeks earlier.The extreme short positioning seen in most contracts at the end of June has gradually dissipated amid signs of a slowdown in shale drilling and a sharp draw in stocks of crude and gasoline in the United States.Hedge funds raised their combined net long position in Brent and WTI by 66 million barrels to 500 million barrels in the week to July 18 (http://tmsnrt.rs/2eHF4ii).Portfolio managers also boosted their net long position in gasoline by nearly 9 million barrels to 15 million barrels, according to regulatory and exchange data (http://tmsnrt.rs/2eHF9m6).Short positions in NYMEX WTI are almost back to the same level as at the start of June, when the current short-selling cycle started (http://tmsnrt.rs/2gWqGnb).Brent and WTI prices too are almost back to the level when the wave of short-selling began, indicating the current short-selling cycle may be drawing to a close (http://tmsnrt.rs/2gWtS23).Some managers have begun to build long positions in anticipation of a further rise in prices, especially in crude, where hedge funds added 29 million barrels of bullish long positions across Brent and WTI.But with so many short positions now covered, the balance of short-term price risks appears more even than at any time since early June.
Traders Think Hedge Funds Are Missing a Trick With Oil -- Hedge funds are still holding large bearish bets against oil and OPEC, yet out in the real world traders and refiners buying and selling actual barrels say it’s starting to look somewhat more bullish. "Physical differentials are improving across the world.” Differentials are an important indicator of the state of the market. They reflect the price of each type of crude compared with a benchmark, often Brent or West Texas Intermediate. The narrower the discount -- or larger the premium -- the stronger the market for that particular grade. While financial investors largely look at just those two big crude contracts, physical traders have broader view because they regularly deal in dozens of varieties from Venezuela’s Tia Juana Light to Vietnam’s Bunga Kekwa. Price differentials for some important varieties of crude, including Russia’s top export Urals, are at the strongest levels in three years, according to data compiled by Bloomberg. That would be encouraging for Saudi Arabia and its allies, if the hedge funds were paying attention. "The improvement in physical markets is being ignored in the financial space," "In other words, even though physical differentials are strengthening, headline price is range-bound at best.” The emerging tightness in the physical market helped Brent to move briefly above $50 a barrel last week, but prices were back around $49 on Tuesday. Even as Saudi Arabia promised deep cuts in shipments at a meeting of producers in St. Petersburg, Russia on Monday, signs of growing production from Libya and Nigeria -- exempt from the output curbs -- kept a lid on prices.
Hedge funds' active positioning in crude oil: Kemp (Reuters) - Hedge funds are some of the most important and dynamic participants in the oil market but public information on their positions and behaviour is severely limited. The only comprehensive information on hedge fund positions that is regularly available is contained within the commitments of traders reports published by regulators and exchanges. Hedge fund positions are co-mingled with pension funds, commodity trading advisers and other firms that manage or conduct trading on behalf of clients in the “money managers” category.The managed money category embraces a wide range of trading styles, some very active and likely to play an important role in short-term price discovery, and others which are essentially more passive and long-term. Money managers held long positions across the three major futures and options contracts linked to Brent and WTI totalling 771 million barrels on July 18, according to exchange and regulatory data. They also held 271 million barrels of short positions, giving them an overall net long position of 500 million barrels (http://tmsnrt.rs/2h5ayzx). Because of the way the data is published, there is no way to identify how many of these positions were active positions held by hedge funds and how many were more passive long-term positions held by a range of players. But it may be possible to make a rough division between active/dynamic positions and more structural/permanent positions by a careful inspection of the data. Since March 2013, the number of managed money long positions has peaked at 1,054 million barrels, but never dropped below 452 million, even in the depths of the oil price slump.Similarly, the number of short positions has ranged as high as 392 million barrels, but never fallen below 70 million, even when the sector was at its most bullish in May 2014.These minimum long and short positions in the money manager category appear to be semi-permanent or structural in nature (http://tmsnrt.rs/2eQhq35). Because these positions appear invariant to prices, and everything else, they probably play a limited or no role in the price formation process.Excluding these structural long and short positions from the total provides a clearer insight into the remaining, more dynamic positions.
Oil markets need regulator in face of speculators: Eni CEO - Energy markets might need to be regulated to put a brake on widespread financial speculation that is distorting crude prices, the head of Italian oil major Eni told Il Sole 24 Ore newspaper. Eni CEO Claudio Descalzi said OPEC and Saudi Arabia were not in a position to push prices higher by cutting output, adding that geopolitical tensions, growing U.S. shale oil production and heavy speculation in crude futures were hurting the sector. "The financial speculation is so strong that it has transformed even those with long term strategies into short term investors," Descalzi was quoted as saying. "Perhaps we should adopt in the oil sector the sort of regulations and market controls that were imposed on banks. Banks have a central watchdog, while in the past, our regulator was OPEC, which is no longer playing the role it once had." He said hedge fund speculators no longer believed that the Organization of the Petroleum Exporting Countries (OPEC) was in a position to introduce radical output cuts. Six OPEC and non-OPEC ministers are due to meet on Monday in St Petersburg to discuss the market outlook and review a global pact on reducing crude supplies that was agreed this year. Asked if he thought further cuts might be decided, Descalzi said: "I am not optimistic."
OPEC moves to cap Nigerian oil output, boost compliance | Reuters (Reuters) - OPEC moved on Monday to cap Nigerian oil output and called on several members to boost compliance with production cuts to help clear excessive global stocks and support flagging prices. OPEC has agreed with several non-OPEC producers led by Russia to cut oil output by a combined 1.8 million barrels per day (bpd) from January 2017 until the end of March 2018. OPEC states Libya and Nigeria were exempted from the limits to help their oil industries recover from years of unrest. The deal to curb output propelled crude prices above $58 a barrel in January but they have since slipped back to a $45 to $50 range as the effort to drain global inventories has taken longer than expected. Rising output from U.S. shale producers has offset the impact of the output curbs, as has climbing production from Libya and Nigeria. A ministerial committee of OPEC and non-OPEC states that monitors the global oil pact said it had agreed Nigeria would join the deal by capping or even cutting its output from 1.8 million bpd, once it stabilizes at that level from 1.7 million bpd recently. The monitoring committee, known as JMMC and which met in the Russian city of St Petersburg, did not give the timeframe for when this would happen, saying it would track Nigerian production patterns in the next weeks. The committee did not back capping Libyan output as it said its production was unlikely to exceed 1 million bpd in the near future compared to its capacity of 1.4 million-1.6 million bpd before unrest erupted in 2011 and plunged the nation into chaos. Brent oil prices rose about 1 percent at about $48.50, helped by news of a cap on Nigeria and by comments from Saudi Energy Minister Khalid al-Falih that the kingdom's exports would fall to 6.6 million bpd in August as demand at home was rising, effectively representing a cut of 1 million bpd year-on-year. He said global stocks had fallen by 90 million barrels, but were still about 250 million barrels above the five-year average for industrialized nations, which is the level OPEC and non-OPEC states are targeting with their output curbs.
Oil rises 1 percent after Saudi vows to cap crude exports next month (Reuters) - Oil rose more than 1 percent on Monday, after leading OPEC producer Saudi Arabia pledged to cut exports in August to help reduce the global crude glut, and Halliburton Co's executive chairman said the U.S. shale drilling boom would probably ease next year. Saudi Energy Minister Khalid al-Falih said his country would limit crude oil exports at 6.6 million barrels per day in August, almost 1 million bpd below levels a year ago. Russian Energy Minister Alexander Novak also told reporters that an additional 200,000 bpd could be removed from the market if compliance with a global deal to cut output was 100 percent. Brent crude futures LCOc1 settled up 54 cents or 1.1 percent to $48.60 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 settled up 57 cents or about 1.3 percent to $46.34 a barrel. The Saudi and Russian energy ministers were in St. Petersburg for a gathering of the Organization of the Petroleum Exporting Countries and other producers. Ministers discussed their previous agreement to cut production 1.8 million bpd from January 2017 through March 2018. Falih said OPEC and non-OPEC partners were committed to cut output longer if necessary but would demand that non-compliant nations stick to the agreement. OPEC members Nigeria and Libya have been exempt from the output cuts, and market watchers remain concerned that production from the two countries is offsetting the impact of the global reduction. There was no discussion of deeper output cuts, and OPEC Secretary-General Mohammad Barkindo said Nigeria had no intention of going beyond its production target of 1.8 million bpd.
Oil ends higher as Saudis pledge export cut, Nigerians agree to output cap - Oil ended higher Monday, as news that Saudi Arabia has pledged to lower crude exports and Nigeria plans to limit its production sent prices higher for the first time in three sessions. September West Texas Intermediate crude CLU7, +0.24% rose by 57 cents, or 1.3%, to settle at $46.34 a barrel on the New York Mercantile Exchange. September Brent crude LCOU7, +1.35% on London’s ICE Futures exchange tacked on 54 cents, or 1.1%, to $48.60 a barrel. Oil prices posted declines in each of the last two sessions. Energy ministers from major crude-producing nations gathered in St. Petersburg, Russia Monday, as part of a monthly meeting held to monitor compliance with crude production limits set by an agreement led by the Organization of the Petroleum Exporting Countries that began at the start of the year. Saudi Arabia, which is the world’s largest oil exporter, agreed to limit its exports at 6.6 million barrels a day, while Nigeria also committed to taking part in production cuts if it reaches a production level of 1.8 million barrels a day, according to a report from The Wall Street Journal. “Saudi Arabia announced its plan to cut exports and this is their way of gluing things back together,” said Bill Baruch, chief market strategist at iiTRADER. Nigeria’s current production is below that level—at about 1.6 million barrels a day in June. News reports, meanwhile, indicate that the Saudi export cut would amount to roughly one million barrels a day, compared with a year ago. Nigeria and Libya have seen their own output rebound faster than expected. The two OPEC members have been exempt from the production-cut deal as their output recovers from years of civil unrest. OPEC members had agreed to reduce their output by about 1.2 million barrels a day from Jan. 1 of this year through the end of March next year. But tanker tracker Petro-Logistics on Friday reported that OPEC output is expected to top 33 million barrels a day this month, up 145,000 barrels a day from June, according to Reuters.
Oil prices will be stuck below $60 through 2020, Credit Suisse forecasts: Analysts once believed an agreement by oil producers to pump less would send crude prices to $60 a barrel in relatively short order. Now, Credit Suisse believes prices won't even approach that level until 2020. The investment bank on Monday lowered its long-term price forecast for U.S. West Texas Intermediate crude by $5 a barrel, to $57.50 in 2020. Brent crude, the international benchmark contract, also got a $5 cut, to $60 a barrel in 2020. The oil market won't reach a lasting turning point until the third quarter of 2018, according to Credit Suisse. The bank pushed out its expectation for the long-awaited rebalancing of supply and demand until 2019. A group of oil producers led by Saudi Arabia has cut output by 1.8 million barrels a day through March in a bid to shrink global crude stockpiles to the five-year average. Credit Suisse believes inventories will still be 120 million barrels above that level by the time the deal is scheduled to wind down. The bank pointed to the usual suspects: Oil production from Libya and Nigeria, the two OPEC member countries exempt from the deal, rose more than expected, offsetting the output cuts. And despite throttling back production, OPEC members kept on exporting barrels at a brisk pace, which kept storage tanks full. Meanwhile, weak growth in demand for oil in many parts of the world in the first quarter made it tougher to draw down U.S. stockpiles, according to Credit Suisse analysts. Credit Suisse projects that OPEC, led by Saudi Arabia, will extend the production cuts for a second time, keeping them in place until U.S. stockpiles fall at least to the upper range of the five-year average.
Saudi tries to strengthen OPEC/non-OPEC hand with oil export gambit - Platts video -- Saudi Arabia's oil minister Khalid al-Falih did his best to restore the confidence of the oil market at the recent Joint OPEC-Non-OPEC Ministerial Monitoring Committee meeting in St. Petersburg, by promising that it will cut its exports to a six-year low next month. S&P Global Platts senior editor Eklavya Gupte reads into some of the key statements made at this meeting, including Falih's remarks that it will look to use export data as a key metric for compliance.Saudi Arabia Regains Influence Over Oil Markets --The oil price gains continued this week after Saudi Arabia said that it would cut its oil exports deeper than before. The announcement suggests that the largest OPEC producer is keen to see the rebalancing accelerate.. OPEC met in St. Petersburg on Monday for a routine meeting to monitor compliance, but the summit took on greater importance with oil prices faltering and data for the prior two months showing that members have boosted production. The cartel’s compliance rate has slipped in recent weeks, and Saudi energy minister Khalid al-Falih said on Monday that the members needed to step up their efforts.Saudi energy minister Khalid al-Falih indicated that Saudi Arabia would cuts it crude exports to just 6.6 million barrels per day (mb/d) in August. The WSJ notes that because Saudi Arabia averaged exports of 7.2 mb/d between January and June, the export target would equate to a reduction of an additional 600,000 bpd. There is some discrepancy over the significance of this move. Taking 600,000 bpd off of the market appears very aggressive, but Saudi Arabia also typically sees exports fall in the summer because domestic demand spikes. Nevertheless, the focus on exports as opposed to production is a shift in thinking, a recognition that in prior months production might have fallen but exports declined only modestly. Related: Goldman Sachs Warns Of Global Oil Demand Peak The oil majors have pulled off remarkable cost reductions over the past few years, a campaign to bring spending down to sustainable levels. That has led to an improvement in the financials this year compared to last, but the gains ran out of steam in the second quarter. Analysts estimate that net income for the oil majors fell by 20 percent in the second quarter compared to the first. That means that deeper cost reductions are likely in the offing. "The sector needs to continue doing more of the same," Jason Kenney, head of pan-European oil and gas equity research at Banco Santander, told Reuters.
WTI Jumps Above $48 After API Inventory Report Shows Huge Crude Draw -- The recent trend of inventory draws (in crude and products) has supported higher Brent and WTI prices (the latter testing $48 today) despite surging production. API reported more of the same with a much larger than expected draw (-10.2mm vs -3mm exp), sending WTI above $48. All was not perfect in the report however as gasoline saw an unexpected build. API:
- Crude -10.2mm (-3mm exp) - biggest draw since Sept 2016
- Cushing -2.568mm (-1mm exp)
- Gasoline +1.9mm (-1.8mm exp)
- Distillates -111k
Gasoline surprised with an unexpected build in inventories but the massive crude draw (largest since Sept 2016) and a reduction in stocks at Cushing helped send crude proices higher...WTI traded around $48 into the API print - having ripped higher the last two days after Saudi 'whatever it takes' comments - and blew through $48 on the API print...
Oil rallies 3 percent as U.S. shale shows signs of slowdown (Reuters) - Oil rose 3.3 percent on Tuesday to the highest close in more than a month, a day after U.S. oil producer Anadarko said it would cut capital spending plans and Saudi Arabia vowed to reduce crude exports to help curb global oversupply. Brent crude futures rose $1.60 or 3.3 percent to settle at $50.20 a barrel, the first time the benchmark closed above $50 since June 6. U.S. West Texas Intermediate futures rose $1.55 or 3.3 percent to settle at $47.89 a barrel, the highest close for that benchmark since early June. The lower oil prices in June and July may have been affecting U.S. shale production, said Mark Watkins, regional investment manager at U.S. Bank. "Companies are not drilling as fast as they had been in the beginning of 2017," he said, "They’re not producing as much because it’s much less profitable with prices in the low $40s." On Monday, Anadarko Petroleum Corp posted a larger-than-expected quarterly loss and said it would cut its 2017 capital budget by $300 million because of depressed oil prices, the first major U.S. oil producer to do so. Earlier, Halliburton's executive chairman said growth in North America's rig count was "showing signs of plateauing." "In the U.S. investors have been waiting to see where that top is in oil production," Watkins said, "We’ve hit a tension point."
Here’s why oil just scored its biggest one-day rally of 2017 - News of cuts to oil-and-gas exploration spending and signs of a potential slowdown in U.S. output also played roles in the bullish shift in sentiment.On Tuesday, September West Texas Intermediate crude rallied by $1.55, or 3.3%, to settle at $47.89 a barrel on the New York Mercantile Exchange, marking the strongest single-day climb since late last year, according to FactSet data. Prices continued to climb in electronic trading late Tuesday, topping $48 a barrel, after data from an industry group reportedly showed a hefty drop in weekly supplies for U.S. crude. Early Wednesday, oil prices were extending those gains.On Monday, Saudi Arabia said at a meeting in Russia that it would cut August exports to 6.6 million barrels a day—a million barrels less than a year earlier. Separately, Nigeria, which isn’t part of the production-cut agreement led by the Organization of the Petroleum Exporting Countries, also promised to limit its daily production to 1.8 million barrels.Traders have taken these developments as bullish for prices, though many do point out that the Saudis normally lower exports at this time of year because of stronger domestic demand for oil, and Nigeria’s output would still have to rise from its current level of just over 1.6 million barrels a day before the West African nation would cap its output.Still, at the meeting Monday, which include some major non-OPEC nations such as Russia, oil producers were upbeat. “OPEC and non-OPEC members displayed optimism over the current production cut deal and seemed confident that the path they were treading would eventually rebalance the markets,” said Lukman Otunuga, research analyst at FXTM, in an note Tuesday.
OPEC’s No.2 Goes Rogue, Plans To Pump 5 Million Bpd - Iraq’s crude oil output could hit 5 million barrels daily by the end of the year, the country’s Oil Minister Jabar al-Luaibi told Iraqi media, adding that these projections “will not be affected by any fluctuations”. According to OPEC’s latest Monthly Oil Market Report, in June Iraq pumped 4.5 million barrels of crude daily, up from 4.44 million bpd in May, according to secondary source data. Exports in June averaged 3.2 million bpd, according to cargo loading data cited by Reuters. That’s up substantially from the 2.69 million bpd average for May and follows a decision by Baghdad to split the crude oil it exports into two grades, Basra Light and Basra Heavy, which prompted some field operators to boost output. Al-Luaibi’s announcement of production growth plans comes ahead of a meeting of oil ministers today in St. Petersburg, to discuss how the oil production deal is progressing and what further steps the partners need to take to accelerate this progress. It also comes a week after Ecuador announced it would no longer comply with its obligations under the deal as it needs oil revenues to patch up its budget. Iraq was perhaps the least willing OPEC member to take part in the deal. To the last day, Baghdad insisted it should be exempted from any cuts along with Nigeria and Libya due to its ongoing battle with IS that requires oil-export money. That Al-Luaibi’s announcement comes now that the deal was extended by another nine months, to March 2018, strongly suggests Iraq may follow Ecuador out the door. Iraq is the second-largest oil exporter in OPEC, after Saudi Arabia. Under the November 2016 deal terms, it agreed to cut 210,000 bpd from its daily crude oil output, but to date has fallen short of hitting this target.
Oil jumps to near eight-week high after big draw in U.S. crude stocks - - Oil prices rose to near eight-week highs on Wednesday, with Brent crude futures above $50 a barrel, as a much steeper than expected decline in U.S. inventories encouraged hopes the global crude glut would recede. Brent crude futures
WTI Pops As Inventory Draws Trump Production Surge To 2 Year Highs --WTI prices kneejerked higher after last night's yuge crude inventory draw reported by API but prices have leaked lower into the DOE print. Expectations were for a 4th straight weekly draw in crude (thanks to robust refining activity) were confirmed with a 7.2mm inventory drop (less than API's 10.2mm), and Gasoline also saw a major draw (as opposed to API's build). However, exuberance ion WTI is not evident as Lower 48 production surge above 9mm barrels for the first time since July 2015. DOE:
- Crude -7.2mm (-3mm exp)
- Cushing -1.699mm (-1mm exp)
- Gasoline -4.445mm (-1.8mm exp)
- Distillates -1.185mm
While everyone was exuberant about API's crude draw the gasoline was notable, but DOE data dismissed that with draws across the entire complex....
Physical oil market tightens as refiners scramble for crude: Kemp (Reuters) - Physical crude markets are at last showing signs of tightening as record refinery consumption in the United States coincides with a slowdown in oil exports from the Middle East Gulf.U.S. refineries processed an average of almost 17.3 million barrels of crude per day last week, an increase of 620,000 barrels per day (bpd) compared with the same week in 2016 (http://tmsnrt.rs/2h8Wkh9).Fuel consumption by U.S. motorists remains largely flat but U.S. refineries are seeing higher demand for gasoline and diesel from Latin America where supplies have been hit by local refinery problems.Refinery crude consumption remains high in most other geographical markets in an indication fuel demand is growing strongly, especially in emerging economies.OPEC exports have been rising as a result of increasing output from Libya and Nigeria, which are not capped under the organisation’s production deal, and poor compliance from some members.But Saudi Arabia has been restricting exports in recent weeks and has stated exports will be below 6.6 million bpd in August, compared with 7.3 million bpd in August 2016, and the lowest for the month since 2010.Saudi Arabia and Iraq both tend to export less during the summer because they use more crude domestically to burn in power plants to meet airconditioning demand.So some of the slowdown in Saudi exports may be seasonal, but officials are keen to frame it as a deliberate policy to accelerate the reduction of global oil stocks. Saudi sources have said export allocations to the United States, Europe and Asia will all be cut sharply in August (“Saudis to cut Aug oil exports to lowest level this year”, Reuters, July 12).The prospective reductions have left refiners scrambling to find replacement crude which is tightening the physical market for all grades.Demand for medium and heavy crudes, with a high yield of middle distillates, has been strong since the start of the year, helping narrow the light-heavy differential (http://tmsnrt.rs/2eTo4WB).But intensive refinery runs during the second and third quarters have seen strong demand for light crudes as well, tightening the market for light oils, even as supplies from North America and Africa have increased. One consequence is that commercial crude stocks in the United States have fallen more rapidly than normal at this time of year and are now below year-ago levels (http://tmsnrt.rs/2h97HFO).
OilPrice Intelligence Report: $50 Oil Is Back: Oil prices are on track for the biggest weekly gain so far this year, with Brent solidly above $50 per barrel and WTI not far behind. Royal Dutch Shell’s CEO Ben van Beurden said this week that oil prices will likely remain “lower forever,” not just because of too much supply, but also because the coming wave of EV adoption will lead to peak demand, possibly as soon as the late-2020s. His company now produces more natural gas than oil and will continue to diversify. Meanwhile, the company posted better-than-expected profits for the second quarter at $3.6 billion, or more than three times larger than the year before. Unless OPEC makes deeper production cuts, oil prices are in danger of falling below $40 per barrel in the first quarter of next year, according to JBC Energy GmbH. The consultancy sees oil prices trading between $45 and $47 later this year, but then it gets “very tricky,” as demand slows. “If OPEC stays the same and we have the same output restrictions even in the first quarter, we’re looking at a lot of surplus in the market,” Richard Gorry, managing director at JBC Asia, told Bloomberg. “To really tighten the market, OPEC will have to cut more, and I don’t know if they want to do that.” Financial advisors for Saudi Aramco have recommended the company list its shares on the London Stock Exchange, rather than Yew York, citing tougher disclosure rules in the U.S. The final decision for the estimated $100 billion IPO is not expected until later this year.
Pace Of US Oil Rig Count Growth Slows As Prices Climb -- The number of active oil rigs in the United States rose this week by 2 rigs showing a growth—albeit a slower one—in oil drilling as US players proceed more cautiously than before. Combined, the total oil and gas rig count in the US now stands at 958 rigs, up 495 rigs from last year, with oil rigs in the United States increasing by 2 and gas rigs increasing by 6 this week. Canada, which added 15 oil and gas rigs the week prior, added another 14 rigs for week this week. Of the 14 new active rigs this week in Canada, 11 were oil rigs. Oil rigs in Canada now stand at 129, up 60 on the year. Prices had risen to an eight-week high on Thursday, a continued to climb on Friday, with WTI trading up 1.08% at $49.57 at 12:01pm and Brent crude trading up 1.67% at $52.35. Oil prices are on track for the largest weekly gain in 2017 as the momentum from reports that Saudi Arabia, Kuwait, and UAE would cut crude oil exports and a larger than expected inventory draw for crude oil and gasoline. But while the rise in the number of active rigs in the US slows, US crude oil production is not, with average production averaging 9.41 million barrels per day for the week ending July 21—more than 1 million barrels higher than in in January 3, 2014, when 1,378 US oil rigs were active. By basin, the Permian added 5 rigs, and Cana Woodford added 4. Eagle Ford lost two rigs, and DJ-Niobrara lost one. At 10 minutes after the hour, WTI was trading at $49.70 with Brent crude trading at $52.47 and up almost 2% on the day.
US oil rig count up just 2 as firms ponder second-half activity - The US drilling rig count is seesawing between gains and losses.Baker Hughes’ overall tally of active US drilling rigs for the week ended July 31 increased by 8 to 958. It’s just the second rise of the past 5 weeks for the overall count, which has rebounded resoundingly since the bottom of the drilling downturn on May 20-27, 2016 (OGJ Online, July 21, 2017). Since then, the count has added 554 units. US oil-directed rigs, the catalyst for overall rig count growth over the past 14 months, added just 2 units this week and now total 766. Over the past 5 weeks, the oil-directed tally has gained just 8 units total compared with 38 during the 5 weeks prior.Gas-directed rigs, growth of which has also been slow over the past 2 months, jumped 6 units this week to 192, up 111 units since Aug. 26, 2016.Seven of the 8 units to begin work this week were land-based, with the tally of rigs drilling horizontally adding 7 units to reach 810, up 496 units since May 27, 2016. Rigs drilling horizontally last week posted their first decline in 36 weeks. Rigs drilling directionally rose 2 more units this week to 77.The US offshore count added 1 unit near Alaska and now totals 24, its highest level since Jan. 20.A steep drop in Alaska crude oil production, meanwhile, sank overall US production during the week ended July 21, according to data from the US Energy Information Administration. Alaska’s output dropped 54,000 b/d, offsetting a 35,000-b/d gain by the Lower 48. As a result, overall US production fell 19,000 b/d to 9.41 million b/d. While rig count growth has slowed in recent weeks, the drilling outlook remains far more positive compared with late 2014-early 2016 levels. In addition to relatively steadier crude oil prices compared with the volatility of early 2016, EIA this week attributed the extended drilling rebound to better cash flow among US firms. Operators in the Permian, the source of much of the recent drilling and production increases, have maintained positive cash flow through lower costs, higher productivity, and increased hedging, which might explain the elevated rig count in the region this year despite relatively flat crude prices, EIA said (OGJ Online, July 26, 2017).Productivity in the Permian, as measured by new-well oil production per rig in barrels per day, fell for the 10th consecutive month in June, EIA said, explaining that output per rig is likely dropping because operators are drilling more wells than they are completing.
A Coup In The House Of Saud? -- What has been an open secret across the Arab world is not a secret anymore even in the US: What happened last month in the deep recesses of the House of Saud with the ascension of Crown Prince Mohammad bin Salman, aka MBS, was in fact a white coup.Nearly a month ago, as I’ve written elsewhere, a top Middle East source close to the House of Saud told me:“The CIA is very displeased with the firing of [former Crown Prince] Mohammad bin Nayef. Mohammad bin Salman is regarded as sponsoring terrorism. In April 2014 the entire royal families of the UAE and Saudi Arabia were to be ousted by the US over terrorism. A compromise was worked out that Nayef would take over running the kingdom to stop it.”The source also referred to an insistent narrative then pervading selected Middle East geopolitical circles, according to which US intel, “indirectly”, had stopped another coup against the young Emir of Qatar, Sheikh Tamim al-Thani, orchestrated by Mohammed bin Zayed, Crown Prince of Abu Dhabi, with help from Blackwater/Academi’s Eric Prince’s army of mercenaries in the United Arab Emirates. Zayed, crucially, happens to be MBS’s mentor.But instead of a coup in Doha, what happened was actually a coup in Riyadh.According to the source, “the CIA blocked the coup in Qatar and the Saudis reacted by dumping the CIA-selected Mohammed bin Nayef, who was to be the next king. The Saudis are scared. The monarchy is in trouble, as the CIA can move the army in Saudi Arabia against the king. This was a defensive move by MBS.” Now, almost a month later, confirmation of the white coup/regime change in Riyadh has been splashed on the front page of The New York Times, attributed mainly to the proverbial “current and former United States officials”.
Saudi Arabia to execute 14 men on protest-related charges -- The Supreme Court of Saudi Arabia has upheld the death sentences of 14 men who were found guilty of various charges in proceedings which “brazenly flouted international fair trial standards,” Amnesty International has said. The 14 individuals were convicted of a range of offences, including “armed rebellion against the ruler” by “participating in shooting at security personnel, security vehicles”, “preparing and using Molotov Cocktail bombs”, “theft and armed robbery” and “inciting chaos, organising and participating in riots”, court documents showed. The men - who were tried en masse, and told the court they had been subjected to lengthy pre-trial detention in which they were tortured into confession - were originally sentenced on 1 June. The news of the Supreme Court’s decision to uphold the lower Specialised Criminal Court’s decision became public this week. “By confirming these sentences, Saudi Arabia’s authorities have displayed their ruthless commitment to the use of the death penalty as a weapon to crush dissent and neutralise political opponents,” said Samah Hadid, the organisation’s director of campaigns for the Middle East.
Michigan Faculty And Lawmakers Urge Reprieve Of Student In "Imminent" Saudi Execution --Amnesty International is warning that 14 young men are facing "imminent execution" for protest-related crimes in Saudi Arabia, including Mujtaba al-Sweikat, who was arrested in 2012 at the age of 17 while boarding a plane to attend an American university, as a well as a partially blind and deaf man who was reportedly tortured into giving a false confession. The men have already been moved to Riyadh, the site the Islamic kingdom's Deera Square (commonly called "Chop Chop Square"). Saudi Arabia typically gives no notice regarding precisely when executions are carried out - typically in the form beheading - though they are open to the public. The king's signature is all that's required before execution of the 14 men takes place after what Amnesty described as a "grossly unfair mass trial". July has been a particularly bloody month with over 26 executions in a 3 week period. International monitoring groups have estimated that over 60 executions have been carried out so far in 2017. In 2015 the kingdom reached a two decade high with over 157, and the following year executed 47 on a single day, including a prominent Shia cleric for leading anti-government protests. Various rights groups, as well as Michigan state lawmakers and teachers organizations, appealed to the White House to intervene, especially considering that one of the youngest facing execution, al-Sweikat, had been accepted as a student at Western Michigan University (WMU). Sweikat was arrested, along with other juveniles, for taking part in pro-Shia protests - all 14 are of part of Saudi Arabia's Shia minority.
Saudi-led coalition says Yemeni rebel missile shot down near Mecca - A ballistic missile fired by Yemeni rebels was shot down late Thursday close to Mecca in Saudi Arabia, a month before the annual Hajj pilgrimage to Islam's holiest site, the Arab military coalition fighting in Yemen said. The missile was intercepted 69 kilometres (43 miles) south of the city in western Saudi Arabia, the coalition said in a statement, calling it "a desperate attempt by Shiite Huthi rebels to disrupt Hajj", which begins at the end of August. Occasional ballistic missile attacks, as well as more frequent short-range rocket fire over the southern border, have in the past been conducted after coalition air strikes against the rebels in Yemen and is not the first time rebels have fired in the direction of Mecca. In October they launched one of their longest-range strikes against Saudi Arabia, firing a ballistic missile that was brought down near the holy city, an attack condemned by Riyadh's Gulf allies. But the new attack is thought to pose a threat ahead of Hajj, when some two million faithful from across the world will visit the site. The Huthi rebels and their allies, former members of Yemen's security forces linked to ex-president Ali Abdullah Saleh, began retaliatory attacks against the kingdom two years ago. The Saudi-lead coalition intervened in the country in March 2015 to support President Abedrabbo Mansour Hadi, who says the rebels are supported by its regional arch-rival Iran. The war has killed more than 8,000 people and wounded 44,500 since Saudi Arabia and its allies joined the conflict. Nearly two million Yemeni children are "acutely malnourished" and a "vicious combination" of war, hunger and cholera have left the country in desperate need of aid, the United Nations warned this week.
Yemen: What does Houthis’ new military capability mean? - In the two years since the Saudi-led coalition intervened in Yemen's civil war, fighting has often spilled over the country's borders.Until now, that meant shelling of Saudi cities and villages close to the frontier. But the Houthi rebels who control the capital Sanaa, and much of the north of the country, have long threatened to take the war directly to Saudi Arabia. The group says it is now able to target major cities in Saudi Arabia and claims to have successfully hit a Saudi oil facility in the Red Sea port of Yanbu last week. US officials have confirmed the missile attack but the Saudi government denied it.The development is significant because Yanbu is more than 900km from the northern Yemeni province of Saada, from which the missile was launched. If Yanbu is within range of Houthi weaponry, then so is much of the rest of Saudi Arabia.While the Saudis deny reports of the Yanbu attack they say, they did intercept a missile 69km south of Mecca this week. The Saudi-led coalition called that launch a "desperate attempt" to disrupt the upcoming pilgrimage season. So if the Houthis really are capable of attacking cities and oil facilities deep inside the kingdom, what does that mean for the ongoing war in Yemen?
UN, aid group: Cholera in Yemen to worsen in rainy season - ABC News: The U.N. health agency and an international aid organization warned on Friday that Yemen's cholera epidemic, the world's worst since Haiti's 2010 outbreak, is likely to worsen in the rainy season. The World Health Organization stressed that Yemen's cholera outbreak is "far from being under control, with the rainy season having begun, and possibly increasing the pace of transmission," U.N. deputy spokesman Farhan Haq said. The United Kingdom-based OXFAM group said in a statement that cholera in Yemen is now "the largest ever recorded in any country in a single year." The warnings came a day after the World Health Organization reported nearly 370,000 suspected cases of cholera and over 1,800 deaths since April 27. "Cholera has spread unchecked in a country already on its knees after two years of war and which is teetering on the brink of famine," WHO reported a decline in suspected cases over the past two weeks in some of the worst hit areas, including the capital Sanaa, but warned it's too early to tell if this is becoming a trend. OXFAM warned that Yemen's rainy season from July to September will accelerate the outbreak. The conflict in Yemen worsened in 2015 when a Saudi-led coalition backing the internationally-recognized government waged an extensive air campaign aimed at dislodging Houthis, whom the coalition accuse of acting as an Iranian proxy, from northern Yemen. The war has left more than 10,000 civilians dead, displaced 3 million people, and pushed the Arab world's poorest nation to the verge of famine.
Exclusive: UAE oil giant in talks to obtain loan of up to $5 billion: sources (Reuters) - Abu Dhabi oil giant Adnoc is in talks to obtain a syndicated loan worth up to $5 billion, the latest sign that the region's giant oil companies are increasingly turning to the debt markets to fund expansion. Two banking sources said on Monday that company's talks with regional and international banks are focusing on a loan that may total several billion U.S. dollars. A third said it was expected to be in a range of $4 billion to $5 billion. The loan facility, which would have various maturities of up to five years, is one of a number of fund-raising options being considered by the company, formally called the Abu Dhabi National Oil Co. It is also discussing the possibility of issuing a project bond that could be as large as $3 billion, bankers said, declining to be named because of commercial sensitivities. An Adnoc spokesman told Reuters: "As announced on July 10, Adnoc is expanding its partnership model and creating new partnership and co-investment opportunities across all areas of its value chain. "Alongside this new partnership model, Adnoc is also taking a more active approach to managing its portfolio of assets and balance sheet to both unlock value and drive growth. "Furthermore, as per the normal course of its financial planning, Adnoc is also looking at the most effective capital structure for the efficient management of its business." Before oil prices crashed in 2014, state energy firms in the Gulf largely financed themselves with money from their governments. But low oil and gas prices mean governments' finances are under pressure, so companies are increasingly turning to the markets.
The Qatar Blockade Is Threatening The OPEC Deal -- The blockade of Qatar could persist for quite a long time, according to the foreign minister of the UAE, who insisted that the Gulf States that have imposed the punitive barricade are not looking for a “quick fix.”The UAE Minister of State for Foreign Affairs Anwar Gargash told Bloomberg earlier this week that the blockade would be in place for “weeks, months…as long as it takes them to realize that this is not a crisis that we are looking for a quick fix. This is a crisis that we want to get to the bottom of, and we want to take away Qatar’s huge, huge support for this extremism and terrorism that we are seeing everywhere.”Despite the bluster, the blockade for the past month and a half has not gone according to plan. Qatar has still been able to import food and other necessities, while its exports of oil and gas have gone on uninterrupted. Moreover, the blockade by Saudi Arabia, the UAE, Bahrain and Egypt has not succeeded in isolating Qatar. In fact, Qatar has grown closer to Turkey and Iran, a development the Gulf States were hoping to avoid."As with their disastrous war in Yemen, Saudi Arabia and the UAE radically overstated their prospects for success and failed to have a plausible plan B in case things did not go to plan," wrote Marc Lynch, of George Washington University, according to the Washington Post. "The anti-Qatar quartet seems to have overestimated Qatari fears of isolation from the GCC and their own ability to inflict harm on their neighbor." The U.S. government has been trying to lower the temperature in the region and help resolve the crisis diplomatically, U.S. President Donald Trump’s vocal attacks on Qatar notwithstanding. Secretary of State Rex Tillerson shuffled between Kuwait, Qatar and Saudi Arabia last week to mediate, and while it wasn’t initially clear that he had come away with anything concrete, the U.S. and Qatar did sign an agreement to combat terrorism financing, a move that would seem to offer the Gulf States some consolation while also simultaneously taking away a bit of their leverage.
U.K. Joins U.S. in Calling for an End to Boycott of Qatar --Britain has joined the U.S. in calling for an end to the boycott of Qatar after the country pledged to fight terrorism. “I welcome the Emir of Qatar’s commitment to combat terrorism in all its manifestations, including terrorist financing,” U.K. Foreign Secretary Boris Johnson said in a statement on Sunday. “We hope in turn Saudi Arabia, U.A.E., Egypt and Bahrain respond by taking steps toward lifting the embargo. This will allow substantive discussions on remaining differences to begin.” The four nations cut off diplomatic relations with Qatar in June, accusing its government of funding terrorism. Qatari ruler Sheikh Tamim bin Hamad Al Thani has condemned their campaign to isolate his nation, saying it violates international law. He says his country is open to dialog, if sovereignty is respected, to resolve the dispute. American Secretary of State Rex Tillerson said last week that the U.S. is “satisfied with the effort” Qatar is making to counter terrorism and urged its neighbors “to consider, as a sign of good faith, lifting this land blockade.” But U.A.E. Minister of State for Foreign Affairs Anwar Gargash said Qatari officials must revise their policies before discussions could begin, making the possibility of imminent talks more remote. Maintaining the embargo may be harder than the Saudi-led bloc thought. The U.A.E.’s two government-controlled telecom providers, Etisalat and Du, said they will restore Qatar’s beIN Sports channels with “immediate effect,” according to local media.
A Shameful Silence: Where is the Outrage Over the Slaughter of Civilians in Mosul? - The catastrophic number of civilian casualties in Mosul is receiving little attention internationally from politicians and journalists. This is in sharp contrast to the outrage expressed worldwide over the bombardment of east Aleppo by Syrian government and Russian forces at the end of 2016. Hoshyar Zebari, the Kurdish leader and former Iraqi finance and foreign minister, told me in an interview last week: “Kurdish intelligence believes that over 40,000 civilians have been killed as a result of massive firepower used against them, especially by the Federal Police, air strikes and Isis itself.” The real number of dead who are buried under the mounds of rubble in west Mosul is unknown, but their numbers are likely to be in the tens of thousands, rather than the much lower estimates previously given. People have difficulty understanding why the loss of life in Mosul was so huge. A good neutral explanation of this appears in a meticulous but horrifying report by Amnesty International (AI) called “At Any Cost: The Civilian Catastrophe in West Mosul”. It does not give an exact figure for the number of dead, but otherwise it confirms many of the points made by Mr Zebari, notably the appalling damage inflicted by continuing artillery and rocket fire aimed over a five-month period at a confined area jam-packed with civilians who were unable to escape. However, even this does not quite explain the mass slaughter that took place. Terrible civilian casualties have occurred in many sieges over the centuries, but in one important respect the siege of Mosul is different from the others. Isis, the cruellest and most violent movement in the world, was determined not to give up its human shields. Even before the attack by Iraqi government forces, aided by the US-led coalition, started on 17 October last year, Isis was herding civilians back into the city and not allowing them to escape to safety. Survivors who made their way to camps for displaced people outside Mosul said they had to run the gauntlet of Isis snipers, booby traps and mines.
Moscow, Baghdad Sign Huge Arms Deal -- It was reported on July 20 that Russia and Iraq have struck a deal on supplying a large batch of T-90 tanks. Vladimir Kozhin, the Russian president’s aide for military technical cooperation, confirmed the agreement but declined to provide details, saying only «the number of tanks is substantial». Russian military analyst Ruslan Pukhov told Russian newspaper Izvestia that the deal might cover deliveries of several hundred T-90 tanks, and thatthe contract may exceed $1 billion.The T-90 is among the best-selling tanks in the world. Hundreds of vehicles have been sold to India, Algeria, Azerbaijan and other countries. A small number of tanks has been delivered to Syria to reinforce the military’s capabilities of combatting Islamic State (IS). Kuwait, Vietnam and Egypt are considering the option of purchasing T-90s.Known for its firepower, enhanced protection and mobility, the T-90 features a smoothbore 2A46M 125mm main gun that can fire both armor-piercing shells and anti-tank missiles and the 1A45T fire-control system. Standard protective measures include sophisticated armor, ensuring all-round protection of the crew and critical systems, including Kontakt-5 explosive reactive armor and active infrared jammers to defend the T-90 from inbound rocket-propelled grenades, anti-tank missiles and other projectiles.
Iran unveils new missile production line -- Iran has announced the launch of a new missile production line, according to its state media, against a backdrop of tension between the United States and Tehran. The Sayyad 3 missile can reach an altitude of 27km and travel up to 120km, Iran's Defence Minister Hossein Dehghan said at an undisclosed location of an inauguration ceremony on Saturday. The missile can target radar evasive fighter planes, unmanned aerial vehicles, cruise missiles and helicopters, he said. Dehghan also said that the recent $110bn military deal between the US and Saudi Arabia was intended as a threat to Iran. "We recently witnessed an immense purchase that some countries in the region paid as a ransom to America and they intend to bring weapons into the region, and this purchase was done with the goal of threatening Islamic Iran," Dehghan said according to the website for state TV. Last week, the US imposed new economic sanctions on Iran over its ballistic missile programme, and said Tehran's "malign activities" in the Middle East undercut any "positive contributions" coming from a 2015 Iran nuclear accord. The measures signalled that the administration of US President Donald Trump was seeking to put more pressure on Iran while keeping in place the agreement between Tehran and six world powers to curb its nuclear programme in return for lifting international oil and financial sanctions.
Iran says it has launched a satellite-carrying rocket into space - LA Times: Iran successfully launched its most advanced satellite-carrying rocket into space, the country's state media reported on Thursday, in what is likely the most significant step yet for the launch vehicle. A confirmed launch of the Simorgh rocket would mark another step forward for the Islamic Republic's young space program, but is likely to raise alarm among its adversaries, who fear the same technology could be used to produce long-range missiles.The Trump administration considers the launch a violation of the "spirit" of the landmark nuclear accord because it reflects "provocative" action by Tehran, State Department spokeswoman Heather Nauert said. She said the launch appeared to be related to Iran's attempts to develop ballistic missiles, which is not covered under the nuclear deal but is a subject of protest and sanctioning by the U.S. Iranian state television said the rocket, whose name means "phoenix" in Persian, is capable of carrying a satellite weighing 550 pounds. The report did not elaborate on the rocket's payload. Other state-linked agencies including the semi-official Fars news agency also described the launch as successful. Media reports did not say when the launch took place at the Imam Khomeini National Space Station in Semnan, about 138 miles east of Tehran.
For China’s Global Ambitions, ‘Iran Is at the Center of Everything’ -- For millenniums, Iran has prospered as a trading hub linking East and West. Now, that role is set to expand in coming years as China unspools its “One Belt, One Road” project, which promises more than $1 trillion in infrastructure investment — bridges, rails, ports and energy — in over 60 countries across Europe, Asia and Africa. Iran, historically a crossroads, is strategically at the center of those plans.Like pieces of a sprawling geopolitical puzzle, components of China’s infrastructure network are being put in place. In eastern Iran, Chinese workers are busily modernizing one of the country’s major rail routes, standardizing gauge sizes, improving the track bed and rebuilding bridges, with the ultimate goal of connecting Tehran to Turkmenistan and Afghanistan. Much the same is happening in western Iran, where railroad crews are working to link the capital to Turkey and, eventually, to Europe. Other rail projects will connect Tehran and Mashhad with deepwater ports in the country’s south.Once dependent on Beijing during the years of international isolation imposed by the West for its nuclear program, Iran is now critical to China’s ability to realize its grandiose ambitions. Other routes to Western markets are longer and lead through Russia, potentially a competitor of China. “It is not as if their project is canceled if we don’t participate,” said Asghar Fakhrieh-Kashan, the Iranian deputy minister of roads and urban development. “But if they want to save time and money, they will choose the shortest route.” He added with a smile: “There are also political advantages to Iran, compared to Russia. They are highly interested in working with us.”
South China Sea: Vietnam halts drilling after 'China threats' - BBC News: Vietnam has reportedly terminated a gas-drilling expedition in a disputed area of the South China Sea, following strong threats from China. A source in the south-east Asian oil industry has told the BBC that the company behind the drilling, Repsol of Spain, was ordered to leave the area. It comes only days after it had confirmed the existence of a major gas field. Those reports have been corroborated by a Vietnamese diplomatic source. According to the industry source, Repsol executives were told last week by the government in Hanoi that China had threatened to attack Vietnamese bases in the Spratly Islands if the drilling did not stop. China claims almost all of the South China Sea, including reefs and islands also contested by other nations.The drilling expedition began last month in an area of sea about 400km (250 miles) off Vietnam's south-east coast. The Vietnamese call the region Block 136-03 and have leased it to a company called Talisman-Vietnam, a subsidiary of Repsol. China calls it Wanan Bei-21 and has leased the same piece of seabed to a different company. Exactly which company is not clear. In 2015, the Chinese rights were sold to a Hong Kong-listed company called Brightoil, but it has recently denied owning them. Two of the directors of Brightoil are senior members of the Chinese Communist Party.
Vietnam Vietnam pushes back after threats from Beijing over drilling in the South China Sea : (Reuters) - Vietnam on Friday said other countries should respect its legitimate right to drill for oil in its waters amid growing tension with China over energy development in the South China Sea. The drilling began in mid-June in Vietnam's Block 136/3, which is licensed to Vietnam's state oil firm, Spain's Repsol and Mubadala Development Co of the United Arab Emirates. The block lies inside the U-shaped "nine-dash line" that marks the vast area that China claims in the sea and overlaps what it says are its own oil concessions. China on Tuesday urged a halt to the drilling. "Vietnam's petroleum-related activities take place in the sea entirely under the sovereignty and jurisdiction of Vietnam established in accordance with international law," Vietnamese Foreign Ministry spokeswoman Le Thi Thu Hang said in a statement sent to Reuters. "Vietnam proposes all concerned parties to respect the legitimate rights and interests of Vietnam." This week, the BBC reported that Vietnam had halted drilling there after Chinese threats, but there was no independent confirmation and neither Vietnamese officials nor Repsol made any comment on the report. Thomson Reuters data showed the drilling ship Deepsea Metro I was in the same position on Friday as it had been since drilling began on the block in the middle of June. China claims most of the energy-rich South China Sea through which about $5 trillion in ship-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.
The surprising influence of China's independent refineries. Their nickname — teapot refineries — may make them seem small and nonthreatening, but China’s privately owned, independent refining sector is anything but. Teapots have been growing in size and processing sophistication, and they now account for about one-quarter of total Chinese refining capacity. Their rise has raised the ire of China’s big national oil companies, who are pressing the government to rein in teapot refiners’ aggressive tactics and alleged circumvention of tax and environmental laws. Today we look at the growing role of China’s teapot refineries, the challenge they pose to much larger competitors and the Chinese government’s recent efforts to put a lid on the teapots’ ambitions. Teapots are privately owned, independent Chinese refineries that have developed — and, to a large extent, thrived — in the shadows of China’s large national oil companies (NOCs): China Petroleum & Chemical Corp. (Sinopec), China National Petroleum Corp. (CNPC) and China National Offshore Oil Corp. (CNOOC). Generally speaking, the 150-plus teapot refineries now operating in China (many of them located in coastal Shandong Province in East China) started out small and simple; most initially did little more than refine straight-run fuel oil into middle distillates (diesel). Even today the capacity of most individual teapots is 100 Mb/d or less (though a few are considerably larger). As small, independent operators in markets dominated by big, state-owned giants, teapot owners are scrappy and resourceful. Time and again, they have responded to market opportunities by adding refining equipment and capabilities and, when it became possible, by importing crude (rather than buying fuel oil as their primary feedstock) and exporting refined products.
North Korea says missile test shows all US within range - BBC News: North Korea has hailed as a success its latest test of an intercontinental ballistic missile (ICBM), describing it as a "stern warning" for the US. North Korean leader Kim Jong-un said the test proved that the entire US was within striking range, state media reported. However, experts say many of North Korea's missiles cannot accurately hit targets. The launch came three weeks after North Korea's first ICBM test. The Pentagon said the latest missile was launched at 23:41 (15:41 GMT) from an arms plant in Jagang province in the north of the country. North Korea said the ICBM flew for just over 47 minutes and reached an altitude of 3,724km (2,300 miles). It is unusual for North Korea to launch a missile at night - the significance is as yet unclear. This is the first missile fired from Jagang province, indicating a previously-unknown launch site is operational. The test was condemned by the US and North Korea's neighbours. US President Donald Trump called it "only the latest reckless and dangerous action by the North Korean regime". South Korea said it was concerned the North may have made "a significant advancement in technology", adding that the missile test was "unique in its time and place of launch". Japanese Prime Minister Shinzo Abe said the threat to his country's security was "grave and real". China also condemned the missile test but urged "all parties concerned" to exercise restraint "and avoid intensifying tensions". Pyongyang said the launch had "successfully tested re-entry capabilities" of the missile. Kim Jong-un "said proudly the test also confirmed all the US mainland is within our striking range," the Korean Central News Agency said.
"Time Is Running Out" - China Is Planning For A Crisis Along North Korean Border --Despite Chinese officials reassurance that "military means shouldn’t be an option," WSJ reports that China has been bolstering defenses along its 880-mile frontier with North Korea and realigning forces in surrounding regions to prepare for a potential crisis across their border, including the possibility of a U.S. military strike.While all eyes in America are once again distracted by "Russia"-related narratives and the dismal GOP efforts to replace, repeal, re-who-knows-what Obamacare, the threat of North Korea has not gone away... and neither has China's preparations. As President Trump stepped up the rhetoric, pressuring China to do more to 'solve' the North Korean problem, and threatening military action to halt Kim's nuclear weapons program ambitions, it is clear thatChina has used this crisis to not just prepare for potential problems with North Korea but to reinforce military forces elsewhere.The Journal writes that a review of official military and government websites and interviews with experts who have studied the preparations show that Beijing has implemented many of the changes in recent months after initiating them last year.Recent measures include establishing a new border defense brigade, 24-hour video surveillance of the mountainous frontier backed by aerial drones, and bunkers to protect against nuclear and chemical blasts, according to the websites.China’s military has also merged, moved and mod ernized other units in border regions and released details of recent drills there with special forces, airborne troops and other units that experts say could be sent into North Korea in a crisis.
I'd Nuke China - US Admiral Confirms He'd Launch Missiles If Trump Ordered -- Admiral Scott Swift, Commander of the US Navy’s Pacific Fleet, said he would obey a hypothetical order to launch a nuclear strike against China if the president chose to give it. As AP reports, the remarks follow the director of the CIA’s recent assessment that Beijing poses a major threat to the US in the long run.In a rare interview this week, CIA Director Mike Pompeo asserted that China is more of a long-term threat to US national security than any other world power, including Russia.“It's hard to pick between China, Russia and Iran to be honest with you. I guess if I had to pick one with a nose above the others, I'd probably pick China,” Pompeo told the Washington Free Beacon on Wednesday.“They have a real economy that they have built, unlike Russia that lives and dies on how many barrels of oil they can pluck out of the ground. And Iran that is similarly very single sector derivative and not to the scale of China population-wise,” the intelligence chief explained.According to Pompeo, Beijing is willing to become a near-peer opponent to the US.“I think it’s very clear when they think about their place in the world, they measure their success in placing themselves in the world where they want to be vis-à-vis the United States and not as against anyone else,” he said.This led someone to ask The US Pacific Fleet chief, who was speaking at an Australian National University security conference on Thursday, whether he would initiate a nuclear strike against China at President Donald Trump's orders 'next week'? The admiral bluntly said: "The answer would be: Yes."
There Is Only One Empire: Finance -- Charles Hugh Smith - There's an entire sub-industry in journalism devoted to the idea that China is poised to replace the U.S. as the "global empire" / hegemon. This notion of global empire being something like a baton that gets passed from nation-state to nation-state is seriously misleading, in my view, for this reason:There is only one global empire: finance. China and the U.S. both exist within the Empire of Finance. Virtually every mercantile nation with access to global markets lives, works and thrives/dies within the Empire of Finance. Every nation that allows capital to flow into its economy is subservient to the Empire of Finance. Every nation with capital and debt markets exposed to (or dependent on) global financial flows is just another fiefdom in the Empire of Finance.China has thrived within the Empire of Finance by creating more debt and at a faster rate of expansion than any other fiefdom. China has brought 20 years of future growth and income forward, and eventually that vein of "wealth" runs out as time advances into the stripmined future. The same can be said of all nations that have borrowed heavily from future growth and income to fund consumption/GDP "growth" today.The Empire of Finance has few requirements for hegemony in its realm, but they are big ones.
- 1. If you want your national currency to act as a global reserve currency (or the global reserve currency), you must run permanent large trade deficits to export your currency in size to the rest of the world. This is the essence of Triffin's Paradox, which I have covered many times.
- 2. Your national currency must float freely in the global marketplace and be liquid enough to trade $1 to 2 trillion per day in global foreign exchange (FX) markets.
- 3. Your sovereign debt/bonds must float freely in the global credit/debt marketplace and be liquid enough to trade in size (tens of billions of dollars) daily.
- 4. Global capital must be free to flow in and out of your currency, debt, assets and economywithout restriction. (Ease of capital flow is the core of liquidity, risk management, and profitability.)
Any nation-state that meets these four requirements is fully exposed to a global loss of faith in its economy, debt, balance of payments and currency. The Empire of Finance is a harsh master; any nation-state that wants to secure the privileges of hegemony must first be willing to accept the risk of full exposure to skittish global markets and capital flows.
And so it begins - Robo-shops taking over China's retail sector - (Xinhua) -- Paying for your groceries by scanning a QR code on your smart phone is a perfectly normal thing to do in China today. As cold hard cash vanishes into the mists of time, it seems that the cashiers are about to evaporate too. Over the weekend, Yiqi Shan, a cashier-free store in southwest China's Chongqing metropolis, registered its 1,800th sale, two weeks after opening. The 24-hour convenience store is on the first floor of an office building in an industrial park. It offers various beverages, fast food and snacks in a space of just 12 square meters. First-time customers sign up by scanning a QR code at the entrance, choosing a password, registering their phone number and submitting a selfie. They are then admitted through a ticket gate similar to those at subway stations. Scanning bar codes is hardly a highly skilled job and customers - honest customers - can do it just as well as any cashier. When the subsequent mobile payment is complete, another QR code is generated which allows the customer through the ticket gate and out of the store. Deng Jie, deputy director of the company that owns the store, described three measures that have been taken to prevent shoplifting. First, the customer's selfie is compared with the Public Security Bureau's national ID database. Second, every corner of the store comes under the steely gaze of surveillance devices that never sleep. Third, if a customer somehow manages to escape from the store without paying, he or she receives a friendly reminder by text message requesting payment. If the warning is ignored, the customers is banned from the store and a black mark added to his or her personal credit record.
China up close: Xi tears up succession script with Chongqing shocker- Nikkei Asian Review: -- In a surprise move that sent shock waves through China's political sphere, the Communist Party announced on July 15 that Sun Zhengcai, once a front-runner of the next generation of leaders, had been removed as Chongqing party chief. His replacement was Chen Min'er, a protege of President Xi Jinping, and party chief of Guizhou, a relatively poor and economically backward province. Party chiefs in provinces and cities are the top officials of their regions. While the 53-year-old Sun is one of the party's 25 most powerful Politburo members, 56-year-old Chen is still just one of the party's 200 or so Central Committee members. Sun was placed under investigation by the Central Commission for Discipline Inspection, the party's top anti-corruption body. It is still uncertain whether he will eventually be punished. Chinese state media reports on July 15 still referred to Sun as a "comrade." But in an ominous sign for Sun, Chen made no mention of his predecessor's performance when he delivered his first speech in Chongqing. The political fate of Sun will have a significant impact on a party leadership reshuffle at the party's next quinquennial national congress this autumn.
Japan’s Doomsday Preppers Are Buying $19,000 Bomb Shelters -- Business has never been better at Atlas Survival Shelters, which ships bunkers to customers around the world from its U.S. factories. Among the best sellers: the BombNado, with a starting price of $18,999. The popularity of the company’s doomsday fortifications is no surprise, considering the state of the world in general and, specifically, Kim Jong-Un’s pursuit of a missile that can hit the continental U.S. Curiously, though, the most furious surge of interest isn’t in America but Japan, a country that’s long been within North Korea’s striking distance. “Japan’s going hog wild right now,” said Ron Hubbard, owner of Atlas Survival. The Montebello, California-based company makes about a dozen different underground refuge models intended to be inhabitable for six months to a year, some outfitted with escape tunnels, decontamination rooms and bulletproof hatches. While the Japanese have viewed North Korea as a menace for decades, the rogue regime’s July 4 launch of an intercontinental ballistic missile raised the level of alarm among preppers, as some people serious about emergency preparedness call themselves. Japan has its own small bunker-making sector, but the U.S., unique in its abundance of survivalist networks, is ground zero for get-ready-for-Armageddon businesses.
The Mystery of Why Japanese People Are Having So Few Babies —Japan’s population is shrinking. For the first time since the government started keeping track more than a century ago, there were fewer than 1 million births last year, as the country’s population fell by more than 300,000 people. The blame has long been put on Japan’s young people, who are accused of not having enough sex, and on women, who, the narrative goes, put their careers before thoughts of getting married and having a family. But there’s another, simpler explanation for the country’s low birth rate, one that has implications for the U.S.: Japan’s birth rate may be falling because there are fewer good opportunities for young people, and especially men, in the country’s economy. In a country where men are still widely expected to be breadwinners and support families, a lack of good jobs may be creating a class of men who don’t marry and have children because they—and their potential partners—know they can’t afford to.“The birth rate is down, even the coupling rate is down. And people will say the number-one reason is economic insecurity.” This may seem surprising in Japan, a country where the economy is currently humming along, and the unemployment rate is below 3 percent. But the shrinking economic opportunities stem from a larger trend that is global in nature: the rise of unsteady employment. Since the postwar years, Japan had a tradition of “regular employment,” as labor experts commonly call it, in which men started their careers at jobs that gave them good benefits, dependable raises, and the understanding that if they worked hard, they could keep their jobs until retirement. Now around 40 percent of the Japanese workforce is “irregular,” meaning they don’t work for companies where they have stable jobs for their whole careers, and instead piece together temporary and part-time jobs with low salaries and no benefits.
China Adds Troops To India Border, Will Defend Sovereignty At "Whatever Cost" --With attention focused on geopolitical tensions involving North Korea, the world may have missed that another, potentially more troubling conflict is brewing on the border between India and China, where as we reported over the weekend, China threatened with military action after a "blatant sovereignty infringement." Since then tensions have grown, and on Monday China warned on Monday that it will step up its troop deployment in a border dispute with India,vowing to defend its sovereignty at "whatever cost".The latest standoff started more than a month ago after Chinese troops started building a road on a remote plateau, which is disputed by China and Bhutan. Indian troops countered by moving to the flashpoint zone to halt the work, with China accusing them of violating its territorial sovereignty and calling for their immediate withdrawal."The crossing of the mutually recognised national borders on the part of India... is a serious violation of China's territory and runs against the international law," Chinese defence ministry spokesman Wu Qian told a press conference quoted by AFP, adding that "the determination and the willingness and the resolve of China to defend its sovereignty is indomitable, and it will safeguard its sovereignty and security interests at whatever cost." He also said that "border troops have taken emergency response measures in the area and will further step up deployment and trainings in response to the situation," without giving any details about the deployment.
China and India Torn Between Silk Roads and Cocked Guns - Pepe Escobar - So, once again it’s down to a face-off in the Himalayas. Beijing builds a road in the disputed territory of Doklam (if you’re Indian) or Donglang (if you’re Chinese), in the tri-junction of Sikkim, Tibet and Bhutan, and all hell breaks loose. Or does it?The Global Times blames it on an upsurge of Hindu nationalist fervor, but selected Indian officials prefer to privilege ongoing quiet diplomacy. After all, when Chinese President Xi Jinping and Indian Prime Minister Narendra Modi met on the sidelines of the Shanghai Cooperation Organization (SCO) summit in Astana last month, they struck a gentleman’s agreement; this dispute is not supposed to escalate, and there’s got to be a mutually face saving solution.The tri-junction drama is actually a minor tremor in the much larger picture of the ongoing geopolitical tectonic shift in Eurasia. The major subplot occurs in the conjunction between the inexorable momentum of the New Silk Roads, aka China’s Belt and Road Initiative (BRI), and the People’s Liberation Army (PLA) Navy’s push, these past nine years, to assert itself as a major naval power in the Indian Ocean.In a nutshell, India could not but be deeply disturbed by China becoming a decisive front row player across South Asia – including in that Maritime Silk Road superhighway, the Indian Ocean.The first-ever railway in Tibet, opened eleven years ago, links Lhasa with Xining, in northwest China. This railway will inevitably proceed all the way to Kathmandu, and assuming an OK from New Delhi – not on the cards for the time being – to north India as well. The key element of the New Silk Roads is Eurasian connectivity. And Beijing is the super-connector, not Delhi, with the scale and scope of BRI implying at least US$1 trillion in short-term investment alone. When India looks around, to its east or to its west, what it sees is China connecting everything from Dhaka in Bangladesh to Bandar Abbas in Iran.We’re talking about the interpenetration of the China-Indochina Peninsula Economic Corridor; the China-Indian Ocean-Africa-Mediterranean Sea Blue Economic Passage; the China-Pakistan Corridor (CPEC); and the Bangladesh-China-India-Myanmar Economic Corridor (BCIM-EC). To call all this an orgy of connectivity is an understatement.
Pakistan PM Nawaz Sharif resigns over Panama Papers verdict - BBC News: Nawaz Sharif has resigned as prime minister of Pakistan following a decision by the country's Supreme Court to disqualify him from office. The ruling came after a probe into his family's wealth in the wake of the leaked 2016 Panama Papers, which linked Mr Sharif's children to offshore firms. Mr Sharif has consistently denied any wrongdoing in the case. The five judges reached a unanimous verdict in the Islamabad court, which was filled to capacity. "Following the verdict, Nawaz Sharif has resigned from his responsibilities as prime minister," a spokesman for Mr Sharif's office said in a statement. There was heightened security in the capital, with tens of thousands of troops and police deployed. One of the judges, Ejaz Afzal Khan, said that Mr Sharif was no longer "eligible to be an honest member of the parliament". Pakistan's Interior Minister Chaudhry Nisar Ali Khan earlier advised Mr Sharif to accept Friday's verdict. The court has recommended anti-corruption cases against several individuals, including Mr Sharif, his daughter Maryam and her husband Safdar, Finance Minister Ishaq Dar and others.
Prime Minister Nawaz Sharif of Pakistan Is Ordered Removed -- Pakistan’s Supreme Court on Friday ordered the removal of Prime Minister Nawaz Sharif from office over accusations of corruption, delivering a ruling that is likely to shift the country’s tumultuous political balance and deal a serious blow to the legacy of a man who helped define the past generation of Pakistani politics. The removal of Mr. Sharif, who was serving his third term in office, comes roughly a year before his term was to end. The verdict means the governing political party, the Pakistan Muslim League-Nawaz, must choose an interim prime minister to replace Mr. Sharif until the next general election, which is scheduled for mid-2018. Announced by the five-member Supreme Court, the verdict caps more than a year of high political drama, breathless court proceedings and a piercing investigation into the finances of the Sharif family. Watching the courtroom drama was the country’s powerful military, which has traditionally decided the fate of civilian governments. There had been hushed speculation that the court, in coming to its decision, had the tacit, if not overt, backing of powerful generals. Opponents of Mr. Sharif leaving the Supreme Court in Islamabad on Friday. Credit Caren Firouz/Reuters The charges against Mr. Sharif and three of his children — two sons and a daughter — stemmed from disclosures last year in the Panama Papers, which revealed that the children owned expensive residential property in London through a string of offshore companies. In their unanimous verdict on Friday, the justices declared that Mr. Sharif was not “honest” and that he therefore was “disqualified to be a member of the Parliament.” They also ordered the opening of criminal investigations against the Sharif family. The Supreme Court had asked the members of the Sharif family to provide a paper trail of the money they used to buy their London apartments. Investigators found that they were “living beyond their means.” Despite repeated court exhortations, Mr. Sharif’s family and its lawyers failed to provide satisfactory documentation, the justices said. Several of the documents they produced were declared fake or insufficient. A representative of the governing party said that Mr. Sharif was stepping down because of the court verdict. But the party expressed “strong reservations” over the ruling and said it was contemplating “all legal and constitutional means” to challenge it, the representative added in a statement.
Pakistan Plunges Into Political Turmoil After Prime Minister Ousted For Corruption --Pakistan plunged into political turmoil when its Prime Minister Nawaz Sharif resigned shortly after the Supreme Court ousted him from office on Friday following an investigation into allegations of corruption centering on undeclared offshore assets. As Reuters notes, The court disqualified Sharif for not being “honest”, a requirement for lawmakers under Pakistan’s constitution, something the US sorely needs to amend as well. The court also ordered a corruption trial against Mr. Sharif, whose family is accused of amassing wealth through corrupt means and purchasing expensive overseas properties with that money. The case against Mr. Sharif centers on four upscale apartments in London, which the opposition party alleges were bought with money made from corruption. Details of the property, held in the name of Mr. Sharif’s children, were disclosed in the huge leak of documents from the Panamanian law firm Mosack Fonseca last year, known as the "Panama Papers", detailing the undisclosed offshore holdings of people around the world. The Prime Minister said the apartments belonged to his children, not him, and were acquired as part of a settlement of an old family business deal with a Qatari prince.Nawaz becomes the second casualty of the "Panama Papers" after the Iceland prime minister resigned in April of 2016 under similar circumstances.A statement from Sharif’s Pakistan Muslim League-N party said he had stepped down as prime minister immediately following the verdict but added that “constitutional and legal requirements for a fair trial were trampled over.” His party is now expected to name a new prime minister. As the WSJ adds, "aides to Mr. Sharif, who has denied the accusations and said he has done nothing improper, warned that stability and democracy in the nuclear-armed nation are threatened by political turmoil. Pakistan has been ruled for nearly half its existence by the military, while civilian governments have usually not completed their terms. Elections are due next year."
Pakistan police arrest 26 for allegedly ordering rape of girl - Police in Pakistan have arrested 26 members of a village council for allegedly ordering the rape of a teenager as punishment for a sexual assault committed by her brother. The girl, 17, was raped last week at the direction of the council as revenge for a sexual assault allegedly committed two days earlier against a child in the same village by the teenage girl’s brother. The man who was ordered to rape the teenager was the brother of the initial victim, local police official Malik Rashid said. He said the state would act as plaintiff in the case and refuse to free those convicted in exchange for compensation, an option available under the country’s Islamic legal system. “The state will not give up any sort of agreement,” Rashid said. The incident, which occurred in Muzaffarabad, a village near Multan in the southern province of Punjab, came to light after the teenage girl’s mother complained to police. The mother alleged in the complaint that members of the council were present at the time of the punitive rape. Medical examinations have reportedly confirmed sexual assaults in both cases. On Thursday the chief justice of Pakistan’s supreme court, Saqib Nisar, ordered a police inquiry on Thursday into the incident, which has sparked uproar in the country and abroad.
Clash between Venezuelan government and opposition raises threat of civil war - In preparation for Sunday’s constituent assembly vote, the two main factions of the Venezuelan ruling class are fighting to establish parallel government infrastructures. Balloting to elect 545 constituent assembly members is part of President Nicolás Maduro and his United Socialist Party of Venezuela’s (PSUV’s) attempts to sideline the opposition-controlled Parliament. These moves, alongside the opposition’s provocative campaign following last Thursday’s “national strike,” threaten to drag the country to the brink of civil war.The death toll of the wave of protests that have been called by the opposition Democratic Unity Roundtable (MUD) since April has climbed to 100 after two protesters, including a 15-year-old, died Thursday. Reports indicate that 367 demonstrators were arrested that day. Several of them will likely be tried in military tribunals as part of the government’s “Plan Zamora” decreed in April to rule with martial law amid widespread opposition and a worsening social crisis.The ongoing offensive by the opposition continued on Friday at an outdoor session of the MUD-led Parliament. Meeting at a park in eastern Caracas, the legislators named and swore in a “shadow” 33-member Supreme Court to oppose the existing one controlled by the ruling PSUV.The MUD spokesman and leader, Andrés Velazquez, announced afterward that they will hold a march on Saturday to the Supreme Court in support of the “new magistrates,” and appealed to the military to “obey” the Parliament and the new judicial body and call for new elections.On his part, the parliamentary vice-president Freddy Guevara, a central public figure of the right-wing MUD, threatened the government with an ultimatum, warning: “Next week will be the final stretch to achieve change in Venezuela and force b ack the false constituent assembly.”
Mexico built 16% more cars in first half of 2017, bucking slowdown in U.S. and Canada -- CBC News: After six consecutive months of record output, Mexico now makes more than one out of every five cars built in North America, new numbers from automotive organization Ward's shows. Mexico built 1,926,930 cars in the first half of 2017, almost 16 per cent more than the country cranked out in the first six months of last year. That compares with 1,208,911 Canadian-built vehicles over the same period, a figure which dipped by 2.4 per cent from last year's level. The boom means Mexico now makes more cars than the U.S. does, as America built 1,697,551 cars in the first half of 2017. Compared to last year, that figure is down by 17 per cent — about what Mexico's output has expanded by. Mexico may now be making more cars than America does, but when larger vehicles such as trucks, vans and SUVs are included, America still leads the region in vehicle production, with 5,812,310 through June — although that figure is down almost five per cent in the past year. Profit margins on those vehicles tend to be higher, which is why North American automakers build them closer to home, while outsourcing smaller vehicles that aren't selling as well as they used to. Last month, Ford announced plans to produce all of its Focuses at a new plant in China, the first time the company will build cars in that country that are destined for sale in North America. Previously, the plan was to build the Focus in Mexico, before changing that plan after pressure from the White House. And General Motors in January announced it would be cutting 625 jobs at one of its Ontario facilities and moving production to Mexico instead.
Dead Bodies Start Piling Up as Fuel Theft Booms in Mexico -- Buying stolen gasoline in the central Mexican state of Puebla is easy. Pull off the main highway into a busy parking lot, and the black marketeers are waiting in pickup trucks loaded with jerrycans. They’ll siphon the fuel into your tank—boasting as they do that unlike a lot of the country’s regular gas stations, they don’t cheat customers. While this illegal curbside commerce has been going on for decades, it has exploded in the past few years and now costs Pemex, Mexico’s state oil company, more than 20 billion pesos ($1.1 billion) a year. The huachicoleros, as the fuel thieves are known in Mexico, dig up pipelines and hijack tanker trucks. These techniques have made Puebla, with its heavy vehicular traffic and extensive pipeline system, a target for organized crime looking to diversify their profit streams. The country’s drug cartels have muscled their way in, with predictable mayhem. Nine people died in a July 2 shootout between rival gangs of robbers in Puebla. And at least 15 people have died in military operations to take out fuel theft rings over the past several months in an area of the state known as the Red Triangle.
Alberta's net debt to quadruple to $44B, Conference Board of Canada predicts - CBC News: Even though Alberta's economy is poised to lead the country in growth this year, the province risks getting mired in deficit and debt unless it does something to boost revenue, cut spending and stop pinning its hopes on rebounding oil prices, according to a report released Wednesday.The Conference Board of Canada's Alberta fiscal snapshot predicts that a slow rebound in royalties and corporate tax revenues will help reduce Alberta's deficit, shrinking it from $10.8 billion last year to $6.8 billion in 2019-20. Alberta's economy is anticipated to grow by more than three per cent this year and 2.3 per cent in 2018. But two years of recession-level revenues — combined with a surge in spending due to the devastating Fort McMurray wildfire in 2016 — have pushed the province into a net debt position for the first time since 1999–2000. The board forecasts that the net debt — the difference between total assets and liabilities — will balloon from $9.5 billion to $44 billion, with debt servicing charges doubling from $1 billion to $2.3 billion by 2019-20. "The provincial deficit as a share of revenue is now comparable with what the province experienced after the 1986 oil crash," the report says. The remedy, according to the Conference Board of Canada, is to tackle Alberta's age-old over-dependence on volatile resource revenues while addressing the imbalance of low taxes and high spending. "Taxation in the province is the lowest in Canada, with no sales tax and nearly flat personal income taxation," the report says. "While this makes the province competitive when compared with the rest of Canada, it also leaves it unnecessarily dependent on oil royalties to fund their operating expenditures."
Collapse of 'safe-haven asset' bubble looms- Nikkei Asian Review: -- Monetary easing by central banks around the world has now reached a turning point, causing a stir among pension funds and other investors who have so far rushed to bonds and stocks in pursuit of slight returns. With the bubble in prices for "safe-haven assets" showing signs of collapsing, investors around the world are now stepping into unknown territory. Safe-haven assets normally mean assets whose price fluctuations are limited and that are certain to bring some profits to investors in the future. Such assets include German and Japanese government bonds as well as U.S. ones. German bonds enjoy the highest credit rating among government bonds. But yields on five-year or shorter U.S., German and Japanese government bonds have slumped amid monetary easing. The yields have fallen to the 1% range in the U.S. and around minus 0.1% in Germany and Japan. Bond prices and yields move in opposite directions. Significantly higher prices have made it difficult for investors to buy such government bonds. It can be said to be a bubble in safe-haven government bonds as prices have been distorted by monetary policies, said Yasuhide Yajima, chief economist at NLI Research Institute. But there is now mounting upward pressure on the yields of U.S. and German government bonds, which means downward pressure on their prices, on the back of economic expansion in the U.S. and Europe. The U.S. Federal Reserve has already entered an interest rate-hike cycle and may decide as early as July or September to scale back its asset holdings. On June 27, Mario Draghi, president of the European Central Bank, also hinted at the possibility of winding down its monetary stimulus.
Trilemmas and Financial Instability -- Whether or not the international monetary trilemma (the choice facing policymakers among monetary autonomy, capital mobility and a fixed exchange rate) allows policymakers the scope for policy autonomy has been the subject of a number of recent analyses (see here for a summary). Hélène Rey of the London Business School has claimed that the global financial cycle constrains the ability of policymakers to affect domestic conditions regardless of the exchange rate regime. Michael Klein of the Fletcher School at Tufts and Jay Shambaugh of George Washington University, on the other hand, have found that exchange rate flexibility does provide a degree of monetary autonomy. But is monetary policy sufficient to avoid financial instability if accompanied by unregulated capital flows? A recent paper by Maurice Obstfeld, etal of the IMF’s Research Department examines the impact of the trilemma in 40 emerging market countries over the period of 1986-2013. They report that the choice of exchange rate regime does affect the sensitivity of domestic financial variables, such as domestic credit, house prices and bank leverage, to global conditions. Economies with fixed exchange rate regimes are more impacted by changes in global market volatility than those with flexible exchange rate regimes. They also find that capital inflows are sensitive to the choice of exchange rate regime. However, the insulation properties of flexible exchange rates are not sufficient to protect a country from financial instability. Maurice Obstfeld of the IMF and Alan M. Taylor of UC-Davis in a new paper point out that while floating rates and capital mobility allow policy makers to focus on domestic objectives, “…monetary policy alone may be a relatively ineffective tool for addressing potential financial stability problems….exposure to global financial shocks and cycles, perhaps the result of monetary or other developments in industrial-country financial markets, may overwhelm countries even when their exchange rates are flexible.”
Staving Off the Coming Global Collapse - Humans have a virtually unlimited capacity for self-delusion, even when self-preservation is at stake. The scariest example is the simplistic, growth-oriented, market-based economic thinking that is all but running the world today. Prevailing neoliberal economic models make no useful reference to the dynamics of the ecosystems or social systems with which the economy interacts in the real world. What truly intelligent species would attempt to fly spaceship Earth, with all its mind-boggling complexity, using the conceptual equivalent of a 1955 Volkswagen Beetle driver’s manual? Consider economists’ (and therefore society’s) near-universal obsession with continuous economic growth on a finite planet. A recent ringing example is Kaushik Basu’s glowing prediction that “in 50 years, the world economy is likely (though not guaranteed) to be thriving, with global GDP growing by as much as 20 per cent per year, and income and consumption doubling every four years or so.” Basu is the former chief economist of the World Bank, senior fellow at the Brookings Institution and professor of economics at Cornell University, so he is no flake in the economics department. But this does not prevent a display of alarming ignorance of both the power of exponential growth and the state of the ecosphere. Income and consumption doubling every four years? After just 20 years and five doublings, the economy would be larger by a factor of 32; in 50 years it will have multiplied more than 5000-fold! Basu must inhabit some infinite parallel universe. In fairness, he does recognize that if the number of cars, airplane journeys and the like double every four years with overall consumption, “we will quickly exceed the planet’s limits.” But here’s the thing — it’s 50 years before Basu’s prediction even takes hold and we’ve already shot past several important planetary boundaries. Little wonder. Propelled by neoliberal economic thinking and fossil fuels, techno-industrial society consumed more energy and resources during the most recent doubling (the past 35 years or so) than in all previous history. Humanity is now in dangerous ecological overshoot, using even renewable and replenishable resources faster than ecosystems can regenerate and filling waste sinks beyond capacity.
EU-Canada agreement on passenger names declared illegal: ECJ --The agreement between the European Union and Canada to share airline passenger data that the two sides say is vital to fighting terrorism has been declared invalid today by the EU’s top court, because parts of it are not in line with fundamental EU laws.The deal which the EU and Canada began negotiating in 2010 would interfere with the right to privacy, the Luxembourg-based European Court of Justice said in a statement.“The court declares that the agreement envisaged between the European Union and Canada on the transfer of Passenger Name Record data may not be concluded in its current form,” the European Court of Justice said in a statement.“Several of its provisions are incompatible with the fundamental rights recognised by the EU,” the court said.An adviser to the European Court of Justice said in September that the passenger name record (PNR) agreement with Canada, agreed in 2014, needed to be redrafted before it could be signed because it allowed authorities to use the data beyond what is strictly necessary for the prevention and detection of terrorist offences and serious transnational crime. The EU also has a PNR agreement with the United States as well as an internal one, both of which could face challenges in light of Wednesday’s ruling. Passenger name records include names, travel dates, itineraries, ticket and contact details, travel agents and other information. The court’s decision comes after it annulled in 2015 a EU-US arrangement allowing firms like Facebook and Google to transfer the personal information of European citizens to the United States.
The international effects of ECB’s monetary policy - In a recent speech, ECB’s Executive Board Member Benoit Coeuré discussed the international effects of the ECB’s asset purchase programme. The data show a turnaround in capital flows in the Euro Area from net inflows to net outflows starting in mid-2014, after the ECB announced its credit easing package. Asset purchase programmes are shown to have had spillover effects on other countries via capital flows and relative asset price movements. The evidence does not suggest that these capital flows have led to major exchange rate movements. Rather, exchange rates seem to have responded to forward-looking interest rate differentials. Asset purchase programmes, together with negative interest rates, may have exacerbated those differentials through signalling and non-linear effects, but their effect on exchange rates is, by and large, not fundamentally different from conventional policy. Selling of euro area bonds by non-residents is to some extent a mechanical feature of the ECB’s asset purchase programme, because foreign investors are holding a relatively large share of outstanding euro area government bonds. This feature makes the ECB’s asset purchase programme structurally different from its counterpart in Japan and the US. Coeuré proposes three main factors that can explain the difference in post-QE debt flows in the United States and the euro area. First, the yield differential: ten-year US Treasuries and equivalent German Bunds were generating, on average, broadly the same return, in local currency, during the Fed’s QE programmes from late 2008 to early 2013. But yield differentials were quite different in recent times. As a result, portfolio rebalancing during the ECB’s asset purchase programme has been more attractive for investors than it was during the Fed’s QE programmes. The second factor is negative rates. In addition to yield differentials, the absolute yield level may also matter for investors, particularly if rates are negative. And third, political uncertainty and the role of the US dollar in the international financial system.
Rapid ageing could keep ECB's hand tied for next decade: ECB paper | Reuters: (Reuters) - The rapid ageing of Europe's population may keep interest rates depressed over the next decade, potentially limiting the European Central Bank's ability to adjust policy, a research paper published by the ECB on Wednesday showed. The expected rise in the share of people not working will hold back growth and limit investment, making it necessary for governments to encourage later retirement, and to promote innovation and investment, the researchers said in a paper that does not necessarily represent the ECB's opinion. "Empirical evidence presented in this paper suggests that over the next decade, adverse demographic developments in the euro area may continue exerting downward pressure on short- and long-term nominal and real interest rates, potentially limiting the ability of monetary policy to adjust its stance due to the presence of the lower bound to policy rates," the paper said. With ECB rates at record lows, policymakers have relied on a plethora of unconventional tools to boost growth and prices but some have argued that rapid ageing, technological leaps and globalization naturally cap wages, prices and ultimately central bank interest rates. "In (the baseline scenario,) the real short-term interest rate in the euro area would remain negative until 2019 and remain close to zero over the 2020-25 period, not far from the average between 2007 and 2015," said the authors, from the ECB and the Bank of Italy.
Turkey: The Wild Man At The Bosporus – Sick Democracy, Persecuted Trade Unions - The failed assault on the Turkish parliament took place a year ago, on 16 July 2016 at 2 a.m. on a day with no legislative session. It served as the reason for the proclamation of the state of emergency. Since then, President Recep Tayyip Erdogan has been governing Turkey by means of decrees. About 50,000 have been arrested, nearly 135,000 public service employees have been suspended or sacked, losing not only their jobs and salary but also any right to social benefits. Judicial review of these decisions is unavailable. Those affected face an effective employment ban and are left with nothing from one day to the next. Before the start of the mass arrests more than 200,000 people were in jail. Therefore, about 35,000, who were put into prison before the coup attempt, were released in order to make space for alleged enemies of the government/state. At the same time, the government plans the construction of approximately 100 new prisons to increase capacity for some 100,000 additional prisoners. Ten broadcasting stations were closed, 370 journalists put into jail, 2000 employees sacked. 85% of the media landscape is owned or controlled by Erdogan. Only 5% of the media can be deemed to be independent. Based on the “denaturalisation decree”, persons accused of terroristic activities can lose their Turkish citizenship by the public prosecutor´s ordinance. Trade unionists, opposition members of parliament are confronted with travel bans; judges ruling against the governmental mainstream are suspended, arrested or replaced. In conclusion, the coup attempt seems to be a happy coincidence in Erdogan’s favour: It serves as justification for the abrogation of legislative and judicial power, whereas executive power rules with no restraints. The state of emergency offers the government the legal basis for the arrest of all those who are reportedly close to the Gülen movement or the Kurdish PKK, as well as the clearing out from all offices of Kurdish politicians (including 64 elected mayors in Kurdish southeast regions, replaced by Turkish governors). Moreover, it serves to criminalise any critic (members of opposition parties, trade unions, NGOs, journalists, scientists). This state of affairs takes its toll. Many are intimidated and prefer to remain silent. A big part of liberal progressive civil society ‘escapes into Biedermeier’ like retirement in order to avoid jail and torture. The policy in play seems to target the foundation of a neo-Ottoman state.
Brussels braces for confrontation with Washington over sanctions on Russia - Brussels reiterated its warning to Washington that scaled up sanctions on Russia risk a collision course.On Wednesday, the President of the European Commission Jean-Claude Juncker used the phrase of a note leaked earlier this week, affirming that Brussels is ready to retaliate against Washington “within days” if sanctions target European interests, CNN reports.President’s Juncker was reacting to a sanctions bill passed by the House of Representatives on Tuesday, in retaliation to the alleged meddling of the Kremlin with the 2016 elections. The bill also scales up sanctions against Iran and North Korea. While drafting the bill, there was no consultation with the EU or NATO member states.On Thursday evening, the Senate approved the bill.The main concern in Brussels is that sanction could hurt the development of the Nord Stream II project, that is, a Russian pipeline that will supply Western Europe via the Baltic Sea. Besides Russia’s Gazprom, the project engages German, Austrian, and Dutch partners. The President of the European Commission cautioned Washington that sanctions could affect EU energy security, making clear that “America first cannot mean that Europe’s interests come last.”The German Foreign Ministry spokesman, Martin Schäfer, echoed the warning on Wednesday, calling US sanctions an “unacceptable” instrument that serves US industrial policy. Berlin believes the new sanctions do little more than the promotion of US Liquified Natural Gas exports.It should be recalled that the Polish, Swedish, Estonian, Slovak, and Ukrainian governments have at one point or another expressed strong objections to the implementation of the Nord Stream II project. The concern that Nord Stream II accentuates energy dependency on Russia is expressed even in Germany, with a member of the foreign affairs committee of the German Parliament, Roderich Kiesewetter, reiterating this concern on Friday. But, the status quo position in Berlin is clear. In anticipation of the Senate vote on Thursday, the German foreign ministry echoed President Juncker that Europe must be prepared to respond “in kind” if the United States target European companies. And German economy minister Brigitte Zyries said that Washington has abandoned the “common line” with Europe over Russian policy, Reuters reports.
Why Germans Are So Ambivalent About Russia - Handelsblatt - The longest sea-floor pipeline in the world runs through the Baltic from Russia to Germany. Russian gas has been flowing through Nord Stream 1 since 2012, and in a few years a twin, Nord Stream 2, will double its capacity. Everything about it is controversial. Poles and Balts hate it, because the pipeline, by circumventing them, threatens their energy security and could leave them open to Russian blackmail. America distrusts it and will probably include it in a new round of sanctions to punish Russia. In Germany the controversy is personal: The chairman of Nord Stream’s board is Gerhard Schröder, the former German chancellor and bosom buddy of Vladimir Putin. In a more symbolical sense, Nord Stream thus represents an umbilical cord that connects, often awkwardly, two nations that have one of the most tangled, tragic and consequential bilateral relationships in the world. Russians and Germans share an ambivalence toward one another – between attraction and repulsion, fear and embrace, conflict and harmony – that goes back centuries. Ms. Merkel, it is said, is privately all too aware how viscerally a pipeline like Nord Stream threatens countries like Poland and the Baltic republics, which are still traumatized by the memory of the Nazi-Soviet pact of 1939 that spelled their doom. And yet, the lobbies and sentiment in support of Nord Stream are so strong in Germany that even Ms. Merkel cannot, or will not, stop it. Germany and Russia seem doomed to stay connected in ambivalence.
German Carmakers Face Potential New Scandal Over Antitrust Issues - NYT — Germany’s high-end carmakers face a potentially destructive new scandal after European antitrust authorities said on Saturday that they were looking into allegations that Volkswagen, Daimler and BMW colluded illegally to hold down the prices of crucial technology, including emissions equipment. If proven, the allegations threaten to further damage the country’s reputation for engineering excellence. That reputation has already been badly tarnished by Volkswagen’s admission that it illegally installed software in its diesel-powered cars to evade standards for reducing smog. The emissions scandal, which came to light nearly two years ago, may now be spreading to rivals. Growing awareness of the harmful effects of diesel fumes has prompted European cities to consider bans of diesel cars and has led consumers to reject cars with diesel engines, a largely German innovation that traditionally accounted for half the market. The backlash could take on a new, far broader dimension if it turns out that the excess emissions were the result of illegal collusion by a de facto cartel. The investigation could also lead to billions of euros in fines.
Poland's President Unexpectedly Vetoes Bill On Judicial Reform, Zloty Surges --Polish President Andrzej Duda unexpectedly said on Monday that he would veto two of three bills reforming the country's judiciary system, easing Brussels' fears that the ruling Law and Justice party will undermine the division of powers. In a news conference on Monday morning, Duda said that he would veto two of three contentious bills, one that would have forced all members of the Supreme Court to step down, except for those kept on by the president; and a second that would have given parliament control over the National Judicial Council, the body that appoints judges, the FT reports."I have decided that I will send back to Sejm (lower house of parliament), which means I will veto the bill, on the Supreme Court, as well as the one about the National Council of the Judiciary," Duda said after days of mass street protests adding “I regret that I, as president of the Republic of Poland, wasn’t consulted over this initiative before it reached the Sejm [the lower house of parliament]. I couldn’t carry out consultations [on this matter] and nor could the other interested entities." Duda's veto puts him at odds with the de facto leader of the country, Jaroslaw Kaczynski, who is the leader of PiS but has no formal government post, Reuters notes. Poland’s ruling Law and Justice party claims that the changes are necessary to overhaul an inefficient system that has not been purged since the collapse of communism almost three decades ago.
EU warns Poland on voting rights suspension amid judicial reforms | DW | 26.07.2017: The European Commission has told Poland that its voting rights in EU-decision making could be revoked in response to far-reaching judicial reforms. Brussels also launched proceedings over a technicality in legislation.The European Commission said Poland's voting rights in EU decision-making could be suspended - under Article 7 of the EU treaty - if judges in the country's supreme court are removed.The Commission said that the independence of the Polish judiciary remained of deep concern, even after President Andrzej Duda's unexpected vetoing of two controversial reforms.Duda on Tuesday vetoed two bills, including one that could see all supreme court judges removed if not approved by the justice minister. The second piece of legislation would allow parliament to name members of a council that would decide on appointments.The president's decision came after days of protests at the reforms, which critics say is an attempt to extinguish the independence of the judiciary. Duda did, however, sign one bill which allows the justice minister to name the heads of all lower courts, and the ruling Law and Justice Party has vowed to push ahead with the changes.
Poland hits back at EU ‘blackmail’ over judicial reforms - Poland’s ruling conservatives have hit back at EU threats to halt the country’s voting rights in the bloc if it pushes through controversial judicial reforms, saying they amount to “blackmail”.The EU warned on Wednesday that it would immediately move to deploy its most serious sanction if Poland’s far-rightwing government gave itself the power to fire its supreme court judges.Frans Timmermans, the first vice-president of the European commission, acknowledged that Poland’s president, Andrzej Duda, had this week stepped in to block two contentious reforms of the judiciary proposed by the ruling Law and Justice party (PiS).The two laws would have forced the resignation of all supreme court justices and allowed their replacements to be selected by the justice minister, and would have would given government-appointed members of the National Council of the Judiciary – which selects judicial candidates – a power of veto.Duda’s decision came after days of mass street protests around the country, an international outcry and Timmerman’s claim last Wednesday that the EU was on the brink of triggering the never-before-used “nuclear option” available to it in article 7 of the treaties, under which the Polish government could lose its voting rights in the bloc’s institutions.While recognising that progress had been made, however, the commissioner claimed on Wednesday that Warsaw had not dropped its reform agenda, and reiterated that it was ready to act. “In this past week, some things have changed in Poland and some things have not,” he said. “We extended our hand to the Polish authorities for dialogue immediately at redressing the situation and urged the Polish authorities to put the new laws on hold and reengage. That is not quite what has happened … The fact that two of the four laws have been signed, and that work will continue on the other two, means that we must set out clearly our concern.”
Sweden leaks details of almost all of its citizens in move that could bring down government | The Independent: Sweden appears to have accidentally leaked the details of almost all of its citizens. And now it's getting worse. The brewing scandal – based around a leak that actually happened in 2015 but only emerged last week – could see prominent members of Sweden's government removed from their post. The leak allowed unvetted IT workers in other countries to see the details of people registered in Swedish government and police databases. It happened after the government looked to outsource data held by the Transport Agency, but did so in a way that allowed that information to be available to almost anyone, critics have claimed.
Germany fails to honour its part of the Greek bailout deal -- Bill Mitchell --In this blog – The fiscal role of the KfW – Part 1 – I recounted how the government-owned German development bank, KfW (Kreditanstalt für Wiederaufbau) – interacts with the German Finance Ministry to allow its fiscal balance to move into surplus without the commensurate level of fiscal drag that would normally be associated with that degree of fiscal withdrawal. The intent of the blog was to show how the Germans cleverly use their state-owned development bank to advance ideological positions not available to other states that have either privatised these type of institutions or never created them in the first place. It is ironic given the Germans insistence that countries like Greece privatise everything in sight. Today’s blog returns to the KfW, in part, because new information has emerged where we learn that the Greek crisis has allowed the German Ministry of Finance to run surpluses without melting their economy down. The KfW’s role in that regard is undoubted. It has been a source of bailout funds for Greece, on behalf of the German government, and has been pocketing handy profits ever since. This information shows that the popular claims that German taxpayers are bailing out Greece are clearly false and just political verbiage. Further, despite the understanding that the Member States (bailout partners) would remit any profits made on asset holdings associated with the Greek bailout, the Germans have reneged on that deal, in part, because it has channeled those profits through the KfW, which it claims is at hands length to the government, despite being 100 per cent government-owned.
Tsipras and Varoufakis go public with spat - The coalition on Monday rejected calls for an investigation to be launched into the first months of the government’s time in power, as a dispute between Prime Minister Alexis Tsipras and ex-finance minister Yannis Varoufakis over that period in 2015 became public. “The evaluation of this period has to be conducted with political criteria, not myth-making or gossip,” said government spokesman Dimitris Tzanakopoulos, who accused Varoufakis of trying to advertise his recent book via the “systemic media” he once attacked. Tzanakopoulos’s comments came after Tsipras gave an interview to The Guardian in which he admitted making “big mistakes” in the past and suggested that Varoufakis’s plan for a parallel payment system could not be considered seriously. “Yanis is trying to write history in a different way,” said Tsipras. “When we got to the point of reading what he presented as his plan B it was so vague, it wasn’t worth the trouble of even talking about. It was simply weak and ineffective.” The former minister immediately responded to the premier’s comments by claiming they displayed a “deep incoherence,” as Varoufakis claims that he had made Tsipras aware of the plan before he came to office yet the SYRIZA leader still chose to appoint him to the cabinet. “Either I was the right choice to spearhead the ‘collision’ with the troika of Greece’s lenders because my plans were convincing, or my plans were not convincing and, thus, I was the wrong choice as his first finance minister,” he wrote in a letter to The Guardian.
Hackers breach 400,000 UniCredit bank accounts -- UniCredit, Italy's No. 1 bank, said hackers took biographical and loan data from 400,000 client accounts in one of the biggest breaches of European banking security this year.The attack occurred in September and October of 2016 and June to July of this year, according to an emailed statement from the bank on Wednesday. UniCredit only discovered the breaches this week, two people familiar with the matter said, asking not to be identified discussing a possible criminal matter. Cyberattacks on corporations and banks are accelerating. In May and June, two ransomware assaults swept the globe, freezing databases and knocking out operations at entities ranging from Britain's National Health Service to Russian oil giant Rosneft OAO. Dozens of Ukrainian lenders were also affected by the so-called Petya outbreak last month. Today's disclosure also comes as Italian banks seek to win investor support after struggling with bad loans. "This is the first attack targeting an Italian bank and confirms that IT systems, particularly in Italy, need massive investment to avoid a loss of confidence," said Francesco Confuorti, chief executive officer of Advantage Financial SA, a Milan-based investment firm. "I expect that this case will lead to Italian banks reviewing their IT systems."In Europe, lenders such as Barclays Plc, Banco Santander SA and Deutsche Bank AG, have joined forces with law enforcement personnel to mount a unified defense against cybercriminals by sharing expertise and information. Industry chiefs are hiring former intelligence personnel and tapping startups for technology to safeguard their databases. Given the vast complexity of banking computer systems, it can be hard to root out hackers who burrow deep into networks and can operate for months undetected, said Thomas Lemon, a London-based managing director for technology consulting at Protiviti Ltd.
EU wants to Freeze Accounts to Prevent Runs at Failing Banks - European Union states are considering measures which would allow them to temporarily stop people withdrawing money from their accounts to prevent bank runs, an EU document reviewed by Reuters revealed.The move is aimed at helping rescue lenders that are deemed failing or likely to fail, but critics say it could hit confidence and might even hasten withdrawals at the first rumors of a bank being in trouble.The proposal, which has been in the works since the beginning of this year, comes less than two months after a run on deposits at Banco Popular contributed to the collapse of the Spanish lender.Giving supervisors the power to temporarily block bank accounts at ailing lenders is “a feasible option,” a paper prepared by the Estonian presidency of the EU said, acknowledging that member states were divided on the issue.EU countries which already allow a moratorium on bank payouts in insolvency procedures at national level, like Germany, support the measure, officials said.“The desire is to prevent a bank run, so that when a bank is in a critical situation it is not pushed over the edge,” a person familiar with German government’s thinking said.The Estonian proposal was discussed by EU envoys on July 13 but no decision was made, an EU official said. Discussions were due to continue in September. Approval of EU lawmakers would be required for any final decision. Under the plan discussed by EU states, pay-outs could be suspended for five working days and the block could be extended to a maximum of 20 days in exceptional circumstances, the Estonian document said.
Frankfurt Is the Big Winner in Battle for Brexit Bankers - Frankfurt has emerged as the biggest winner in the fight for thousands of London-based jobs that will have to be relocated to new hubs inside the European Union after Brexit. Citigroup Inc., Standard Chartered Plc and Nomura Holdings Inc. have picked the German city for their EU headquarters to ensure continued access to the single market. Goldman Sachs Group Inc. and Morgan Stanley are weighing a similar decision, said people familiar with the matter, asking not to be named because the plans aren’t public. HSBC Holdings Plc is the biggest non-French bank so far to opt for Paris. London could lose 10,000 banking jobs and 20,000 roles in financial services as clients move 1.8 trillion euros ($2.1 trillion) of assets out of the U.K. on Brexit, according to think-tank Bruegel. The implications for the U.K. are substantial: finance and related professional services bring in some £190 billion ($248 billion) a year, representing 12 percent of the British economy. We’re tracking jobs that the banks say they plan to move, with updates to follow. Here’s where U.K. banking jobs might be headed: (graphics)
"Worse Than People Can Imagine" - Deutsche Bank To Shift $350 Billion Of Assets From London To Frankfurt - In a project dubbed 'Bowline', Bloomberg reports that Deutsche Bank may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union. While not the first bank to threaten to move post-Brexit, the scale of asset movement is the largest yet. Deutsche Bank’s balance sheet listed 1.59 trillion euros in total assets at the end of last yea and much of its trading in Europe is traditionally booked in London. But, as Bloomberg reports, the Brexit-contingency project calls for Frankfurt trading to go live in September 2018 and for the balance sheet migration to be completed by March 2019, said the person, who asked for anonymity in discussing internal matters. Chief Executive Officer John Cryan told employees in a recent videotaped message that he’s girding for a hard Brexit, with the “vast majority” of trades currently booked in London probably moving to Frankfurt, but the bank hasn’t officially detailed its plan. People familiar with the matter told Bloomberg that the lender intends to move chunks of trading and investment-banking assets from London to Frankfurt, with the jobs of several hundred traders and as many as 20,000 client accounts likely to be shifted. “There’s an awful lot of detail to be ironed out and agreed,” Cryan said in the video. “But inevitably roles will need to be either moved, or at least added, in Frankfurt.” Deutsche Bank's plan notes that trade and balance sheet migration will begin in September 2018, with six months required for the move of the balance sheet, the person said. The bank plans to start informing clients from September 2017 that their contracts will be switched to Frankfurt. It wants to have built front-to-back technology and processes by June 2018, according to the person
Deutsche Bank Getting More Deutsche By The Minute - Brexit means many things to many people. For some it was a world-historic populist paroxysm that augurs the decline and dissolution of the western democratic political project. For others it was a quick score. Deutsche Bank, however, has come off as a tad ambivalent. London was, alongside New York, Deutsche’s road to trading glory during its go-go expansion years. So it was understandable that while the rest of the global banking establishment stationed in the U.K. took to brushing up their French and German, Deutsche Bank plowed ahead toward a new London HQ. Brexit is just a state of mind, man. But now it appears that not only has Deutsche Bank remembered where the word Deutsche came from in the first place – it could be embarking on a little Brexit of its own. Or at least its client assets might: Deutsche Bank AG may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union, according to a person familiar with the matter. The project, dubbed Bowline, calls for Frankfurt trading to go live in September 2018 and for the balance sheet migration to be completed by March 2019, said the person, who asked for anonymity in discussing internal matters. One would hope that such a move would compliment John Cryan’s efforts to make Deutsche a tight ship and to do away with the excesses of yesteryear. Having all those operations centralized in Frankfurt – which the city’s own champion’s have described as “something between a cemetery and a backwater” – seems like a prudent step.
Britain Wants To Keep Free Movement For UK Nationals Living In The EU But Not For EU Citizens In The UK -- European Union officials have accused the UK of wanting freedom of movement to continue for British citizens after Brexit while refusing to guarantee equivalent rights to the 3 million EU nationals living in the UK.After this week's second round of Brexit negotiations ended on Thursday, UK sources close to the talks briefed that there were "significant gaps" in the EU's offer on citizens' rights, because Britons currently residing in an EU member state could lose their right to move to another member state after Brexit. This would mean, for example, that a Briton currently living in Spain could not move to France.The source said: “The Commission and the Member States now need to go away and discuss how they can bring their offer up to the level of the UK’s.”The UK offer, which was submitted after the EU's, would give "settled status" to EU nationals who have been in the UK for five years. But in most cases that status would lapse for anyone who left the UK for more than two years.An EU source told BuzzFeed News: “The EU could perfectly well grant UK citizens in the EU27 free movement rights, if [the] UK also allows EU citizens covered by the withdrawal agreement to move back and forth between [the] UK and EU post-Brexit.“What the UK in effect seems to propose is to have a continued exercise of free movement rights for UK citizens post-Brexit. This is where for us reciprocity would certainly come in.” As an example of what would be considered a reciprocal arrangement, the source said EU citizens already in the UK should be able to leave the UK in 2018 and go back to Britain 20 years later. A position paper published by the European Commission’s Brexit task force earlier this year proposes to guarantee all the existing rights of the 4 million citizens affected by Brexit forever, and to guarantee these through EU law and the oversight of the European Court of Justice. But the UK rejects any role for the ECJ.
Jeremy Corbyn stokes fears moderate MPs could be deselected: Jeremy Corbyn has opened the door to deselections of MPs critical of his leadership, by saying that it is a matter for local parties. The Labour leader was asked about local activists' threats to overthrow Labour MPs they see as hostile to him. Mr Corbyn told the BBC's Andrew Marr show: "I don't quite see why people should go to the party leader and say we want to influence what is happening in a constituency. "The whole point of a democracy is that people decide." His comments will dismay many Labour MPs, including members of his shadow cabinet, who had hoped the election result would see a new focus on party unity after months of infighting.But minutes after Mr Corbyn's comments, Barry Gardiner, the shadow trade secretary, told Sky News the party should focus on attacking the Conservatives. He said: "The last thing we want is to replicate the infighting in the Conservative Party … I don't want us to be fixated on these issues, I want us to be focused on attacking the government who aren't providing the leadership we need." The Labour leader was asked about reports that Tony Blair had personally intervened to prevent him being deselected by activists in his Islington North constituency when he was a backbencher. Hilary Armstrong, who served as chief whip for five years of Mr Blair's premiership, recalled in an interview how Mr Corbyn's constituents had expressed concern that he was a serial rebel - voting against his party some 500 times - and tried to have him removed.
Brexit Disarray Points to Disaster - Clive Crook - The Brexit talks have started, and there's little sign yet of an intelligible U.K. strategy. All is disarray.The shambles makes two bad possible outcomes more likely. One is that the U.K. will crash out of the European Union in 2019 with no agreement in place. This would cause enormous economic disruption -- damage that would take years to repair. The other bad possibility, if the government continues to flail while the two-year deadline advances, is that public opinion will wobble. A second referendum might be called, and last year's decision to quit might be reversed. I used to think this scenario extremely unlikely. Now I think it's merely improbable, and support for it is on the rise (though I'm unsure whether backing from Tony Blair, Britain's unpopular former prime minister, is helping). You might be wondering, what would be so bad about revisiting the decision to quit?To begin with, don't assume a second referendum would go the other way. Britain's Remainers seem to take it for granted that next time common sense will prevail. The majority for quitting in last year's vote was narrow, but remember that Leave won despite an enormous and sustained preponderance of advice from the government, from economists of all stripes, and from elite opinion generally. There's a reason Britain has always been the odd man out in the EU: Popular disquiet at the U.K.'s place in an ever-integrating Europe runs deep. Also don't take for granted that Britain would be allowed to change its mind. The legality of revoking the Article 50 notice is disputed. The EU says this cannot be done unilaterally. Before Britain was let back in, it might be asked to pay a price for its impudence. (Maybe that would give rise to demands for a third referendum.) Efforts to reverse last year's vote could simply run out the clock and make the first bad outcome -- crashing out of the union with no deal -- more likely. Isn't this risk worth running for the chance to correct a historic error -- if that's what it was? I doubt it. Suppose a second referendum was called and the result was Remain; suppose the EU said, "Great, glad to have you back." Reversing Britain's decision under these circumstances -- out of fear, to avert looming chaos -- wouldn't reconcile the country to its European future. This cringing submission would raise instinctive euro-skepticism to new extremes and divide the U.K. even more bitterly.
As a British EU negotiator, I can tell you that Brexit is going to be far worse than anyone could have guessed | The Independent: The Government keeps saying it ‘didn’t realise’ the problems, but they had the experts at Whitehall – they just refused to listen to them. Now we’re facing a breakdown in airline safety, medicine, animal welfare, security, international aid and so much more. For anyone following Brexit developments, the last week should have shown that the level of complexity involved in Brexit is unprecedented. Ministers however seem to have inserted their heads firmly into the sand, hoping tricky problems will just go away. Who knew a fortnight ago that leaving the apparently obscure Euratom Treaty would jeopardise not only the UK nuclear industry, but also the supply of medical isotopes for cancer treatment? Did anybody realise that the work needed to establish a new customs IT system was unlikely to be done in time, and what that would mean? Was everyone already aware that UK airlines like easyJet would need to set up in the EU27 and Ryanair might move its planes to EU27 countries due to the UK leaving the Open Skies Agreement? Well, some people knew, but they’re just experts, so have been largely ignored.
Government refuses to rule out lowering food standards to seal Brexit trade deals - The government has not ruled out lowering British food standards to seal potential post-Brexit trade deals. Prime Minister Theresa May’s official spokesman refused to answer media questions on whether this could mean lifting the ban on the controversial practice of chlorinated chicken from the US. UK Trade Secretary Dr Liam Fox is about to embark on a trip to the US to pave way for potential trade deals. In the US, the government permits such practices as chlorinated chicken, which consists of dipping meat into chlorinated water to prevent microbial contamination. In America, they argue that it is standard procedure which protects millions of consumers. But this practice is banned in the EU, which fears the practice could actually worsen safety standards. However, the farming industry in the US is expected to push for agriculture to be included in any food deal. It has insisted that Britain must come into line with the US. The Daily Telegraph has reported a cabinet split on the issue, with Dr Fox and Foreign Secretary Boris Johnson relaxed on the position of lowering British food standards. They have reportedly argued their case against Defra Secretary Michael Gove.
Brexit: Amber Rudd announces ‘implementation period’ to delay promised curbs on EU immigration - The flow of EU workers will continue for an “implementation period” after Brexit, the Home Secretary has announced, scrapping plans for tough new rules from March 2019. In a bid to calm the fears of businesses, Amber Rudd has bowed to pressure to accept the Government cannot have a new immigration system ready for Brexit Day. Instead, there will be an “implementation period when the UK leaves the EU, to ensure there is no “cliff edge” for employers”, the Home Office said. However, officials were unable to provide any detail of how the temporary rules will operate before a consultation in the autumn – which itself has been delayed from the summer. Nevertheless, the Government – contrary to earlier reports – is still insisting the free movement of EU citizens will end when Britain leaves the EU, in March 2019. That pledge appears to rule out the UK adopting an “off-the-shelf” model during the transition period, as urged by business leaders worried about a looming worker shortage.Both membership of the European Economic Area (EEA) and the European Free Trade Association (EFTA) involve accepting free movement. Despite the confusion, the British Chambers of Commerce (BCC) welcomed the promise that a “cliff edge” will be avoided. “Amber Rudd has given EU nationals and their employers some much-needed reassurance, by signalling that any significant changes to the immigration rules for EU citizens will take place in an orderly fashion over time,” said Adam Marshall, its director general.
Govt orders study looking at impact of ending free movement from EU: A major study has been ordered by the Government to look at the economic impact of ending free movement of EU workers. The Home Secretary, Amber Rudd, wants to know whether some parts of the UK will be affected more than others, whether there will be skills shortages and the impact on seasonal jobs. The study will be carried out by the Migration Advisory Committee, a quango that advises the Government on immigration issues, which will report by September next year. In a letter to the committee's chairman, Professor Alan Manning, Ms Rudd said the Government continues "working towards the goal of achieving sustainable levels of net migration". And the Home Secretary said that under Brexit "we will be able to apply different immigration rules and requirements according to the UK's economic and social needs". She said: "Leaving the European Union gives us the opportunity to take control of immigration from the EU. "We will ensure we continue to attract those who benefit us economically, socially and culturally. "But, at the same time, our new immigration system will give us control of the volume of people coming here - giving the public confidence we are applying our own rules on who we want to come to the UK and helping us to bring down net migration to sustainable levels. "The study I am asking the Migration Advisory Committee to complete is a major step in ensuring we create a system that works in the best interests of the country."
Home Office’s lack of action on post-Brexit Border ‘is shocking’ - Britain’s Home Office, the government department responsible for border control and immigration, has admitted it has not consulted any external experts on the effect of Brexit on the Irish Border. The Border, and the wider implications for the Republic of Britain’s exit from the European Union, is one of the three points of negotiation between the EU and UK government (the others are free movement of people and the amount of money Britain will owe the union after the divorce). Each needs to be settled before the EU will entertain negotiating a trade deal with the UK outside the union. Despite the border being a key issue in negotiations, the Home Office has not sought any advice from experts on the potential impact of Brexit on Irish citizens living in Britain or Northern Ireland. The Home Office’s admission – made in response to a Freedom of Information Act request lodged by the investigative website theferret.scot – has been described as “shocking” by experts on both sides of the Border. SDLP leader Colum Eastwood accused the British government of “leaving us behind” and called on the Irish Government to “stand up” for the interests of northern nationalists. While the Border is one of the three main issues to be negotiated, both the British and Irish governments have insisted that the Common Travel Area will remain in place after Brexit and that disruption to Irish citizens will be minimal.But concerns have been raised that Brexit could throw up unexpected problems around the Border and the status of Irish citizens in Britain, particularly if the UK adopts a different immigration policy to the rest of the European Union. More than 380,000 Irish-born people live in Britain.
British growth remains the slowest in the EU -- The British economy remains worst performing in the EU, with growth picking up by merely 0,1% in the second quarter of 2017. Going from 0,2% in the first quarter to 0,3% in the second quarter, the British economy is experiencing its weakest first half since 2012.The Bank of England was anticipating 0,5% growth in the second quarter, on the assumption that exports would compensate for weaker domestic consumption, Reuters reports.The news published by the Office for National Statistics on Wednesday did not thrill markets. The uplift in growth comes almost exclusively from a buoyant film industry of the ever resourceful British service sector. Consumption in the UK has been decelerating, taking the wind out of the sails of an economy very much boosted by retail consumption until 2016. And construction is already decelerating, despite record low monetary policy and an ongoing housing crisis.Consumption in the UK has been decelerating, taking the wind out of the sails of an economy very much boosted by retail consumption until 2016. And construction is already decelerating, despite record low monetary policy and an ongoing housing crisis.Inflation was in the region of 2,6% in June, down from 2,9% in May, largely due to a rapid depreciation of the pound since the Brexit vote. Despite full employment levels, wages have not caught up and consumption has felt the dent.The International Monetary Fund downgraded growth projections for the UK on Monday from 2% to 1.7% for 2017. That is slightly under 1,8% the spring European Commission projections, which were however founded on fewer data. A Bloomberg Economists survey estimates that growth will be more likely in the region of 1,6% in 2017. The pound continues to slide against weak GDP growth data.
People to be allowed to pick their own gender without doctor's diagnosis, under Government plans -- The Government is planning to reform gender identity rules to make it easier for people to choose their own gender in law. Under plans being considered by ministers, adults will be able to change their birth certificates at will without a doctor’s diagnosis, while non-binary gender people will be able to record their gender as “X”. Changes to the law will be consulted on and will ultimately be included in a planned Gender Recognition Bill, set to be published in the autumn.Under current laws – established in 2004 – a person who wishes to transition must apply for a Gender Recognition Certificate. This requires a doctor's diagnosis of gender dysphoria and that someone spend two years of living as a member of the opposite gender. The reforms were recommended by Parliament’s Women and Equalities Committee last year, which said that they were key to trans people being “treated equally and fairly”. Plans for self-identification were included in the Labour manifesto, though not the Conservative one. The Gender Recognition Bill did not appear in the Queen’s Speech last month. Suzanna Hopwood, a member of the Stonewall Trans Advisory Group, said: “It’s vital that this reform removes the requirements for medical evidence and an intrusive interview panel, and finally allows all trans people to have their gender legally recognised through a simple administrative process.”
