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

Saturday, August 19, 2017

week ending Aug 19

 Why Is The Fed Raising Interest Rates As Fast As It Is? - I have a theory that at least some people at the Fed are supporting interest rate increases not because they are worried about incipient inflation that must be nipped in the bud in advance under a regime of inflation targeting, but because they are looking over the horizon and worrying about a possible recession in the not-too-distant future, and they want to be able to have interest rates high enough that they can then engage in lowering them as a stimulative policy tool under the circumstances.  If they are too low, then extraordinary measures will need to be used, and some of those measures may not be available in the future.  This theory is based on nothing solid at all, nothing.  I think that those who may be thinking this (and my likely candidate(s) would be people at the very top) are constrained in speaking openly due both to the current institutional arrangement of consensus decisionmaking within an established inflation targeting system with a 2% inflation target, not to mention pressure not to talk about possible future dangers.  The current line is that the economy is doing well, and certainly it is on the standard measures of unemployment and inflation, even if the former could be better and wages could be rising more rapidly.  Indeed, it is this good performance that is supposedly underlying the moves to raise interest rates and possibly “normalize” the balance sheet (which I doubt there will be too much action on).  But my theory is that for some of them it is a matter of trying to “normalize” on interest rates as well while the possibility of normalizing is possible, while the economy is doing fairly well and one can raise them without obviously slowing things down noticeably, so that indeed there will be the ability to lower them again in the future when necessary. 

FOMC Minutes: Balance Sheet Normalization "Relatively soon" - From the Fed: Minutes of the Federal Open Market Committee, July 25-26, 2017. Excerpts:   Participants generally agreed that, in light of their current assessment of economic conditions and the outlook, it was appropriate to signal that implementation of the program likely would begin relatively soon, absent significant adverse developments in the economy or in financial markets. Many noted that the program was expected to contribute only modestly to the reduction in policy accommodation. Several reiterated that, once the program was under way, further adjustments to the stance of monetary policy in response to economic developments would be centered on changes in the target range for the federal funds rate. Al­though several participants were prepared to announce a starting date for the program at the current meeting, most preferred to defer that decision until an upcoming meeting while accumulating additional information on the economic outlook and developments potentially affecting financial markets.  ..Participants discussed the softness in inflation in recent months. Many participants noted that much of the recent decline in inflation had probably reflected idiosyncratic factors. Nonetheless, PCE price inflation on a 12‑month basis would likely continue to be held down over the second half of the year by the effects of those factors, and the monthly readings might be depressed by possible residual seasonality in measured PCE inflation. Still, most participants indicated that they expected inflation to pick up over the next couple of years from its current low level and to stabilize around the Committee's 2 percent objective over the medium term. Many participants, however, saw some likelihood that inflation might remain below 2 percent for longer than they currently expected, and several indicated that the risks to the inflation outlook could be tilted to the downside. Participants agreed that a fall in longer-term inflation expectations would be undesirable, but they differed in their assessments of whether inflation expectations were well anchored.

FOMC Minutes Signal Balance Sheet Normalization Begins In September, Most Saw Inflation Pick Up -- Since the July 26th 'nothingburger' FOMC statement, Nasdaq is down but bonds and bullion are higher as domestic politics and global war have trumped monetary machinations. All eyes in today's Minutes will be on any mention of inflation and the balance sheet. The Fed sees inflation "picking up over the next couple years" but this came before last week's dismal CPI/PPI data (and they noted "downside risks"), and confirmed that they will make a balance sheet move "at upcoming meeting." However, The Fed is worried about inflation...*MANY FED OFFICIALS SAW WEAK INFLATION DUE IDIOSYNCRATIC FACTORS.  Worried about a bubble and financial conditions... Several participants noted that the further increases in equity prices, together with continued low longer-term interest rates, had led to an easing of financial conditions. However, different assessments were expressed about the implications of this development for the outlook for aggregate demand and, consequently, appropriate monetary policy. According to one view, the easing of financial conditions meant that the economic effects of the Committee's actions in gradually removing policy accommodation had been largely offset by other factors influencing financial markets, and that a tighter monetary policy than otherwise was warranted.

Is The Yellen Fed Planning To Sabotage Trump's Presidency? -- The Federal Reserve can make or break a president. Monetary policy influences all financial markets as well as the cycles in the economy. No president wants to have to run for re-election when the stock market and economy are turning down. Recall that President George H.W. Bush blamed Federal Reserve chairman Alan Greenspan for his defeat. Greenspan had held interest rates too high for too long, Bush complained.  Trump may have become the stock market bubble’s most high-profile cheerleader. He certainly doesn’t want it to burst on his watch. The president has warmed up to Yellen’s Dow-friendly easy money policies. He even suggested he might reappoint her to the Federal Reserve in early 2018.That would be a politically dangerous move. The Fed could help determine which party has the advantage in the 2018 mid-terms and the 2020 presidential election beyond that.Of course, Fed officials insist they are “data driven” and don’t make policy decisions based on politics. Whether they intend to be or not, Fed policymakers are inevitably involved in politics. The members of the Federal Reserve Board are political appointees. Yellen is a liberal Democrat, appointed by President Obama. She understands what’s at stake in the upcoming elections. She understands that Democrats are in a state of political desperation right now. They hold only 15 governorships, are a minority in Congress, and stand to be steadily replaced in the courts. But they STILL control the Federal Reserve Board. President Trump now has the opportunity to re-shape the Fed. Three of the seven positions on the Federal Reserve Board remain vacant. Trump can fill them. More importantly, he can replace Yellen as Fed chair next year.

Why the Federal Reserve’s job will get harder - Larry Summers -- With the term of Janet Yellen as Federal Reserve chair ending next February, the president will have to nominate and the Senate will have to confirm a new head of the central bank in coming months. There is much discussion of the merits and implications of possible candidates for the job. For Donald Trump and the Senate it will be important to begin by considering the challenges that will face Ms Yellen’s ­successor.I would have preferred a slower pace in raising rates at a number of junctures. I also think that in its statements the Fed has consistently over-assessed future inflation, growth and monetary tightening at some cost to its credibility. Overall though, it has done very well in recent years. We have not enjoyed so favourable a combination of unemployment and inflation in decades. Markets and finance have been remarkably stable, perhaps too much so, for years now. And by the standards of other institutions in Washington and central banks the Fed is highly respected. This is all a tribute to its leadership but also to fortunate ­circumstances.I suspect the Fed’s job will be much more difficult over the next few years. Economics, finance and politics will all throw up new challenges that will probably demand creative and unorthodox responses. If history is any guide, it is more likely than not that the economy will go into recession during the next Fed chair’s four-year term. Recovery is now in its ninth year with relatively slow underlying growth for demographic and technological reasons, very low unemployment and high asset prices. Even without these factors, experience teaches that recessions are almost never forecast or even rapidly recognised by the Fed or the professional consensus forecast, but there is at least a 20 per cent or so chance that if the economy is not in recession, it will be so within a year. So the likelihood that the next Fed chair will have to address a recession is probably about two-thirds.

Fed Watch: Don't Add To The Fire --  Vox has an article out this morning with the title "The real "deep state" sabotage is happening at the Fed." It begins: Trump administration officials are notorious for their suspicion that a “deep state” of career military, intelligence, diplomatic, or civil service professionals is seeking to sabotage their work. But for a clearer example of sabotage — albeit without much in the way of a conspiracy — Trump would do well to cast his gaze at the Federal Reserve, which, dating back to before his inauguration, has been waging war on an inflationary menace that appears not to exist. I have no qualms with the criticism that the Fed's is excessively focused on inflation or, more accurately, possibly working with a broken model of inflation. That's fair game.  What I find disturbing and quite frankly irresponsible is the use of "deep state" language to describe the Fed. This is the language used by the far right to discredit and undermine faith in our government institutions. For the left to adopt the same language adds to the fire already burning.  Take this language into consideration with the rage already directed against the Federal Reserve. This, for instance:A Sayre man has been arrested in connection with what authorities says is a foiled plot to blow up a bank building in Downtown Oklahoma City with a truck filled with fake explosives. I am honestly just simply disappointed that Vox chose to add to the hate directed at the Fed by using the inflammatory language of the far right. I have had plenty of criticisms of the Fed over the years. I am concerned that their model of inflation isn't working, and that their estimate of the natural rate of interest is too high. But that type of criticism is a far cry from describing the institution as the "deep state." We have seen time and time again that fomenting that kind of thought only leads to bloodshed. The last thing we need is the left helping to incite another Oklahoma City bombing on Constitution Ave. - or anywhere for that matter.

U.S. Default? Unlikely, But Bond Traders Are Taking No Chances - The United States of America has never repudiated its debt. The full faith and credit of the federal government has been a cornerstone of U.S. policy since the days of Alexander Hamilton. And no one really questions America’s ability to pay. But in the age of Trump, Wall Street isn’t taking anything for granted.While Republican leaders are confident their party can set aside its differences to resolve the latest debt-limit impasse before the clock runs out sometime between late September and mid-October, investors are shying away from Treasury bills earlier than they have in the past. Last month, they pushed up costs at a sale of three-month bills to the highest since 2008. Of course, this song and dance over the debt ceiling has become a biennial ritual of sorts on Capitol Hill: A manufactured crisis created by hard-line Tea Party Republicans, which causes lots of hand-wringing but always gets worked out before anything really bad happens. Just this month, Mark Meadows, a leading House conservative, appeared to soften his demands and indicated he was optimistic about getting a deal done. But with a president who’s willing to say the U.S. government “ needs a good ‘shutdown,” a growing number of investors in the world’s most important market aren’t taking any chances.

 Bipartisan group of House members drafting proposal to avert shutdown, default — A bipartisan group of House members is working on a proposal to address the most urgent issue facing Congress when it returns in September: how to keep the government open and avoid the first-ever default on the nation’s debt.Members of the Problem Solvers Caucus are drafting proposals to present to the entire 43-member caucus when Congress returns after Labor Day, said caucus co-chairman Tom Reed, R-N.Y.Treasury Secretary Steven Mnuchin has warned congressional leaders that the government will run out of money to pay its bills by Sept. 29 unless lawmakers vote to raise the debt limit. Funding to keep the government open is set to expire two days later, on Oct. 1, unless Congress can agree on a spending deal during the approximately three weeks it will be in session in September.“I’m very optimistic that the caucus can come together on a consensus basis to put a proposal out in order to get through the shutdown, debt ceiling debate in a way that keeps the government open and we honor our debts,” Reed said in an interview. Reps. Brian Fitzpatrick, R-Pa., and Tom O'Halleran, D-Ariz., are working on ideas for the caucus, according to Reed's office. Reed said he expects the proposal to be fiscally motivated and call for avoiding ideological debate. “There’s going to have to be some type of negotiation,” he said, but members are considering a proposal that includes “good government” reforms and spending cap relief that’s acceptable to both parties.

Why There Will Be No 11th Hour Debt Ceiling Deal - While Congress is vacationing on summer recess, a massive fiscal disorder is patiently waiting to bum-rush them upon their return.  The Business Insider explains:“The Treasury Department says the debt ceiling, a statutory limit of outstanding debt obligations that the federal government can hold, must be raised by September 29.  That gives Congress 12 working days to pass legislation to get to President Donald Trump’s desk.“If breached, it could lead to disastrous consequences for the federal government, the US economy, and the global financial system. If the debt ceiling is not raised, the federal government would lose the ability to pay bills it already owes in the form of US Treasury bills and could lead the US to default on some of that debt.“The possible fallout from a default, according to a study by the Treasury Department, would include a meltdown in the stock and bond markets, a downgrade of the US’s credit rating, which would increase the government’s borrowing costs, and the undermining of the full faith and credit of the country.“Despite potentially dire consequences, there is confidence but no guarantee that factions in Congress, with a variety of competing interests, will be able to come together on a deal to raise the limit.”Sure, Congress has always come together at the 11th hour in the past.  They’ve raised the debt ceiling 78 times over the last 57 years.  So, won’t they just raise it again?This time around, we have some reservations.  Quite frankly, this Congress has proven that it is not motivated to do what’s best for the American people.  Each representative has an illogical logic unto himself.  Just ask John McCain – he doesn’t know what he wants until the precise moment he votes.What’s more, these days the debt ceiling has become ultra-politicized in Congress.  Big time horse trading must first take place before an agreement can be reached.  Big time bluster and chest pounding must take place too. The point is, over the past six months this Congress has been incapable of getting a doggone thing done.  What makes you think they’ll somehow get their act together in just 12 days?

Goldman Sees 50% Chance Of A Government Shutdown --  As we pointed out earlier, the chances of government agreeing any kind of debt ceiling deal (and avoiding a government shutdown) is dropping fast as USA default risk spikes and the Treasury Bill curve inverts. Goldman Sachs is now concerned also...  Uncertainty in The White House is starting to make investors realize the chance of successfully navigating the debt ceiling crisis without a government shutdown are dwindling...  Via Goldman Sachs, Low approval ratings raise legislative risks. In the near term, we believe there is a 50% chance of a brief government shutdown, as the president seeks to solidify support among his base by embracing more controversial positions, despite needing Democratic support to pass spending legislation. That said, we expect that the debt limit, which needs to be raised around the same time, will prevent a longer shutdown from occurring.  It seems the credit markets are a little less sanguine than Goldman...

NYT Shocking Report: US "Ally" Ukraine Is Source Of North Korean Missile Engines --When the US State Department supported Ukraine domestic forces and nationalist elements to stage a successful and deadly coup against then pro-Russian president Viktor Yanukovych in 2014, the outcome was supposed to be a nation that is a undisputed US ally and persistent threat, distraction and non-NATO opponent to bordering Russia. Instead, it now appears that it has been Ukraine which was, as the NYT writes, the secret behind the success of North Korea's ballistic missile program.Specifically, in a blockbuster report this morning, the NYT alleges that North Korea has been making black-market purchases of powerful rocket engines from a Ukrainian factory citing "expert analysis being published Monday and classified assessments by American intelligence agencies."The studies may solve the mystery of how North Korea began succeeding so suddenly after a string of fiery missile failures, some of which may have been caused by American sabotage of its supply chains and cyberattacks on its launches. After those failures, the North changed designs and suppliers in the past two years, according to a new study by Michael Elleman, a missile expert at the International Institute for Strategic Studies.According to the report, analysts who studied photographs of Kim Jong-un, inspecting the new rocket motors concluded that they derive from designs that once powered the Soviet Union’s missile fleet. "The engines were so powerful that a single missile could hurl 10 thermonuclear warheads between continents." Since the alleged engines have been linked to only a few former Soviet sites, government investigators and experts have focused their inquiries on a missile factory in Dnipro, Ukraine, on the edge of the territory where Russia is fighting a low-level war to break off part of Ukraine. During the Cold War, the factory made the deadliest missiles in the Soviet arsenal, including the giant SS-18. It remained one of Russia’s primary producers of missiles even after Ukraine gained independence.

Mattis Warns, North Korea Standoff "Could Escalate Into War Very Quickly" -- Less than a day after Joseph Dunford, the commander of the Joint Chiefs of Staff, told South Korean President Moon Jae-in that the US is ready to use “the full range of military capabilities to defend our allies and the U.S. homeland,” Defense Secretary and retired Gen. James Mattis told reporters that the situation with North Korea “could escalate into war” if the isolated country fires a missile at the US. "If they fire at the United States, it could escalate into war very quickly,"Mattis said, according to Reuters.Mattis also assured reporters that the US would destroy any missiles fired at the US by the North Korean regime, saying the US would know the trajectory of the missile “within moments.”If a missile is assessed to be headed toward Guam - North Korea has repeatedly threatened the territory – Mattis said “we will take it out.” Though it’s unclear how, exactly, the US would be able to guarantee the neutralization of an incoming missile. While the US THAAD missile shield, which has been deployed around the world, has a solid testing record, it’s designed to target intermediate range missiles, not ICBMs. While the US has completed successful tests of ground-based anti-ICBM capabilities, its testing record for those, and for sea-based interceptors, is shaky. Some experts have compared shooting down an ICBM to “hitting a bullet with a bullet.”

We Can Stop North Korea From Attacking Us. All We Have to Do Is Not Attack Them. -  North Korea is not going to launch a first strike on America or its allies with nuclear weapons.To understand this, you don’t need to know anything about the history of U.S.-North Korea relations, or the throw weight of intercontinental ballistic missiles, or even where North Korea is. All you need to know is human history. And history says that small, poor, weak countries tend not to start wars with gigantic, wealthy, powerful countries — especially when doing so will obviously result in their obliteration.So what exactly is the “crisis” involving North Korea?The answer is simple: We’re not worried that we can’t deter North Korea. We’re worried because a North Korea that can plausibly strike the U.S. with nuclear weapons will likely be able to deter us from doing whatever we want. For example, we might not be able to invade North Korea. When they go on TV, U.S. officials pretend there’s some chance that North Korea’s dictator Kim Jong-un will wake up one day and persuade all the people who help him run their bleak kakistocracy that they should commit mass suicide. But backstage, in government memos and think tank reports, America’s foreign policy mandarins have explained the issue clearly, over and over again.

Xi urges restraint from Trump in phone call on North Korea crisis | South China Morning Post: Chinese President Xi Jinping on Saturday urged his US counterpart to avoid “words and deeds” that could worsen tensions on the Korean peninsula, as some observers suggested that Beijing had largely exhausted its leverage to rein in its wayward neighbour. In a phone call with US President Donald Trump, Xi also called on “relevant parties to maintain restraint” and to “persist in the general direction of dialogue, negotiations and a political settlement”, according to Chinese official media. The White House said both presidents agreed North Korea must stop “provocative and escalatory behaviour”. Beijing has voiced alarm at the war of words between Washington and Pyongyang, which included a warning from Trump that military solutions were now “locked and loaded” should North Korea “act unwisely”. Renmin University international relations professor Shi Yinhong said that like North Korean leader Kim Jong-un, Trump was using threats of military strikes to make his point. The tension was likely to further escalate with another round of large-scale joint drills between the United States and South Korea due later this month, he said.Shi said it was time for China to drop “the nice words” and send Trump a clear and strong message against war. Beijing should also declare that it would not accept any demands beyond the UN Security Council sanctions adopted earlier this month, he said. China, which accounts for 90 per cent of North Korea’s foreign trade, last week backed UN sanctions that could shrink Pyongyang’s exports by a third. 

"Armageddon Risk" Returns: North Korea Predicts "Catastrophe" As Massive U.S. War Games Begin Monday -- Traders barely had time to enjoy the lull from the "Armageddon trade" - the rising possibility of a nuclear exchange between the US and North Korea, which peaked over the weekend when various US officials said a nuclear war is not imminent, echoed by a statement by N. Korea's state-run news agency KCNA, before a new set of worries promptly took over, chief among them the ongoing slow motion train wreck in Donald Trump's administration coupled with yesterday's double terrorist attacks in Spain. Alas, "nuclear war" risk is about to come back with a vengeance because on Monday US and South Korea are scheduled to begin joint military exercises, a massive show of force which every time in the past has infuriated North Korea, sometimes triggering a show of force. Held every fall in South Korea, the Ulchi-Freedom Guardian war games are the world’s largest computerized command and control exercise. Some 30,000 U.S. soldiers and more than 50,000 South Korean troops usually take part, along with hundreds of thousands of first responders and civilians, some practicing for a potential chemical weapons attack. Scheduled long before the recent diplomatic fallout between Washington and Pyongyang, the U.S. and South Korean militaries will simulate warfare with North Korea from Aug. 21 to 31, well aware that North Korea could respond with another missile test, according to McClatchy. In light of this perceived provocation by North Korea, which will almost certainly prompt some reaction, Scott A. Snyder, a Korea specialist with the Council on Foreign Relations said   “Over the course of the next two weeks I expect tensions to escalate. This is always a sensitive issue, but it is more hair-trigger as the North Koreans are very sensitive to the likely additional nuclear-capable aircraft flyovers.”

Financial Times: "America Is Now A Dangerous Nation" --The Financial Times reminds readers of something that has occurred numerous times throughout history when leaders lose the support of their people... "The president may exploit an overseas conflict to distract from problems at home..." by Gideon Rachman via The claim that America is a “threat to world peace” has been a staple of Russian and Iranian propaganda for many years. For believers in the western alliance, it is painful to acknowledge that there is now some truth to this idea. Under Donald Trump, America looks like a dangerous nation. Over the past week, Mr Trump has indulged in nuclear brinkmanship in North Korea, issued vague threats of military action in Venezuela and flirted with white supremacists at home. He is offering the very opposite of the steady, predictable and calm leadership that American allies seek from Washington. Mr Trump’s swiftly notorious threats that North Korea risks “fire and fury” from a “locked and loaded” America were particularly irresponsible. Even if the threat is a bluff, it puts American credibility on the line and risks triggering escalation from the Kim Jong Un regime, which is threatening to fire missiles near the US territory of Guam. Even more alarming, the Trump administration is openly flirting with the idea of a pre-emptive strike on North Korea — arguing that a nuclear-armed Mr Kim cannot be deterred. The international crisis that Mr Trump is stoking is increasingly inseparable from the domestic problems besieging his administration. The investigation by former Federal Bureau of Investigation director Robert Mueller into Russian intervention in the US election is getting ever closer to the president’s inner circle. Congress is deadlocked and the White House is a merry-go-round of sackings and scheming. And now there is political violence on the streets, as white supremacists and neo-Nazis attack, and even kill, protesters in Charlottesville — while the president issues evasive and equivocal statements from a golf course.

 Bannon Breaks Silence: Slams "Far-Right Clowns", Goldman Lobbyists; Vows "Economic War With China" --After weeks of speculation about his future, Trump White House Chief Strategist Steve Bannon has broken free of his self-imposed exile, unloading a torrent of Scaramucci-esque comments to none other than Robert Kuttner - the editor of The American Prospect, a progressive publication (the cover lines on whose first two issues after Trump’s election were “Resisting Trump” and “Containing Trump." Kuttner sets the surprising scene...Trump’s embattled strategist phones me, unbidden, to opine on China, Korea, and his enemies in the administration….He began with China...“We’re at economic war with China,” he added. “It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path.”Bannon said he might consider a deal in which China got North Korea to freeze its nuclear buildup with verifiable inspections and the United States removed its troops from the peninsula, but such a deal seemed remote. Given that China is not likely to do much more on North Korea, and that the logic of mutually assured destruction was its own source of restraint, Bannon saw no reason not to proceed with tough trade sanctions against China.“To me,” Bannon said, “the economic war with China is everything. And we have to be maniacally focused on that. If we continue to lose it, we're five years away, I think, ten years at the most, of hitting an inflection point from which we'll never be able to recover.” Contrary to Trump’s threat of fire and fury, Bannon said of Korea:" On Korea, [China's] just tapping us along. It’s just a sideshow."“There’s no military solution [to North Korea’s nuclear threats], forget it.  Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.”

 Steve Bannon brands far right ‘losers’ and contradicts Trump in surprise interview - White House chief strategist Steve Bannon has given an unusual interview in which he claimed there was no military solution for North Korea, the far right was a “collection of clowns” and the left’s focus on racism would allow him to “crush the Democrats”. Bannon, who has been called the mastermind behind Donald Trump’s nationalist agenda, made the controversial and unsolicited remarks to Robert Kuttner, co-founder and co-editor of the American Prospect, a leftwing political magazine, in an interview published Wednesday.  The seemingly candid comments – which included the claims that he would oust his rivals in the federal government, who were “wetting themselves” – come at a time when Bannon faces an uncertain future at the White House. There have been increasing calls from the left and the right for the removal of the former editor of Breitbart News. When Trump was asked at a press conference this week if the chief strategist would remain in his position, the president said: “We’ll see.”  It is unclear why Bannon chose to call Kuttner, who wrote that he had not requested the interview and was “stunned” to hear from him. However after publication stories circulated that Bannon was unaware he was providing an interview. There have been recent reports of internal conflicts and power struggles within the administration, and Bannon made the call amid an intense backlash related to Trump’s links to the far right and the president’s comments that there were “very fine people” at a violent white nationalist protest in Charlottesville. In the American Prospect story, headlined “Steve Bannon, unrepentant”, Trump’s top aide said: “We’re at economic war with China. It’s in all their literature. They’re not shy about saying what they’re doing. One of us is going to be a hegemon in 25 or 30 years and it’s gonna be them if we go down this path. On Korea, they’re just tapping us along. It’s just a sideshow.” Contradicting Trump’s threats of “fire and fury” on North Korea, Bannon said: “There’s no military solution [to North Korea’s nuclear threats], forget it. Until somebody solves the part of the equation that shows me that 10 million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.”

Steve Bannon and Gary Cohn in White House power struggle - Longstanding divisions in President Donald Trump’s White House burst into the open on Thursday, with defenders of his response to white nationalists facing off against the administration’s moderates.  At the centre of the power struggle — the president’s chief strategist Steve Bannon and his chief economic adviser Gary Cohn. On Thursday, the administration was forced to dismiss reports that Mr Cohn planned to leave the administration following Mr Trump’s much-criticised remarks about the violence in Charlottesville and an interview with Mr Bannon in which the chief strategist attacked his White House rival. People close to Mr Cohn denied reports that he intended to quit even though he had been offended by Mr Trump’s remarks, which appeared to equate the actions of white nationalist demonstrators with those of counter-protesters in Charlottesville.  While tensions have long existed between Mr Bannon, an avowed economic nationalist, and Mr Cohn, who has urged Mr Trump to take a more centrist stance on issues such as trade, the events in Charlottesville have exposed the extent of the faultlines. They have also raised further questions on which side is likely to emerge as winner.

Bannon is giving Trump’s Cabinet every reason to quit -- Those White House advisers and Cabinet officials who were “frustrated” or “unhappy” Wednesday but not ready to quit have every reason to do so now. Stephen K. Bannon’s unhinged, embarrassing and disloyal (the worst sin in this White House) interview with the American Prospect — Anthony Scaramucci’s New Yorker rant minus the obscenity — gives them every reason to resign. In fact, absent his firing or resignation, they must resign.  The Post reports:Stephen K. Bannon, the White House chief strategist, seemed to take issue with President Trump on North Korea, attacked white supremacists as “clowns” and “losers” and described his efforts against administration rivals in an unusual interview Wednesday with The American Prospect, a progressive magazine.The interview with magazine co-editor and columnist Robert Kuttner was initiated by Bannon, Kuttner said, in an Anthony Scaramucci-style phone call out of the blue in response to a column Kuttner had written on China. . . .“‘They’re wetting themselves,’ he said, proceeding to detail how he would oust some of his opponents at State and Defense.” On North Korea, Bannon said: “‘Until somebody solves the part of the equation that shows me that ten million people in Seoul don’t die in the first 30 minutes from conventional weapons, I don’t know what you’re talking about, there’s no military solution here, they got us.’” He also threw in a dig at those he’s been publicly courting. (“Ethno-nationalism — it’s losers. It’s a fringe element. I think the media plays it up too much, and we gotta help crush it, you know, eh, help crush it more. These guys are a collection of clowns.”)  For White House Chief of Staff John F. Kelly, this is one more demonstration of his complete failure to normalize the White House, end backbiting, keep the team on the same page and end dysfunction. Between Trump’s own conduct and his toleration of the destructive Bannon, things are worse than ever. Kelly has been made to look impotent, and his Cabinet members are now unable to operate without being publicly attacked by Bannon and his poodle, Sebastian Gorka.

Argentina warns US against military move on Venezuela - US Vice President Mike Pence heard more complaints from Latin American allies Tuesday about President Donald Trump's warning of a possible US military option to deal with the crisis in Venezuela."The use of force is not the way," but rather political pressure, Argentine President Mauricio Macri said at a news conference alongside Mike Pence, who is on a tour of Latin American countries.Trump warned on Friday that he was considering various options to resolve the Venezuela crisis, "including a possible military option if necessary." Venezuela's President Nicolas Maduro responded by ordering his armed forces to carry out a national exercise next week.Pence moved to soften the impact of Trump's announcement, stressing that peaceful pressure is the priority.But he did not rule out Trump following through on his threat. "The United States has many options, and we reserve those options," Pence said.

"Dear President Trump: What The F**k Business Is Venezuela Of Ours?" Mish - Dear President Trump, forgive my harsh language, but since you and your staff can use harsh language, why can’t anyone else? That’s a minor question. Since you are busy, I prefer an answer to this question: What the F Business is Venezuela of Ours? I ask because you stated: “We have many options for Venezuela including a possible military option if necessary.” Dear President Trump, here are some additional questions that I am sure are on the minds of nearly everyone familiar with the story.

  1. Are you willing to “own” the problems in Venezuela?
  2. What does “necessary” mean?
  3. Did US nation building in Iran, Iraq, Afghanistan work?
  4. Did not Vietnam turn out OK starting the moment we left?
  5. Did the US intervene to stop hyperinflation in Zimbabwe? Argentina?
  6. Are there not more repressive regimes in Africa?
  7. What’s different about Venezuela?
  8. By any chance is this about oil?
  9. Other than oil, what the F business is Venezuela of ours?
  10. Regardless of your threats and concerns, when has US nation building ever worked?

I almost forgot: How do you propose we pay for a military solution in Venezuela? I voted for you and would appreciate some answers.

 US Intervention in Venezuela “Could be Inevitable,” Says Opposition Politician - A prominent Venezuelan opposition politician has warned US military action to topple the Maduro administration is now almost guaranteed.Speaking to CNN on Monday, former Venezuelan mayor Ramon Muchacho warned Venezuela had become a threat to US interests.“[If] the information the United States [has] is saying is that Venezuela is a danger – and indeed it is – then there may be no alternatives,” Muchacho stated.“When you find that there is no option, then you find that the military alternative may end up being inevitable for the US government, whether … we condemn or support it,” he said.Muchacho made the comments just days after President Donald Trump said he was open to a military option in Venezuela.“A military option is certainly something that we could pursue,” Trump said.Muchacho himself made his comments from Miami, and is currently wanted in Venezuela. Last week, a Venezuelan court sentenced Muchacho to 15 months imprisonment, after ruling he had failed to abide by a court order to clear violent anti-government groups and their roadblocks from his municipality. Muchacho was also stripped of his position as mayor of Chacao, one of Caracas’ wealthiest areas.Chacao and surrounding districts have been hard hit by protests and political violence over the past four months. The municipality has been the site of at least two deaths linked to anti-government unrest.

Another Russia-U.S. Proxy War Looms Over Afghanistan - Cipher - As the Trump Administration struggles to develop a strategy in Afghanistan, Russia has surreptitiously inserted itself into the mix. In late July, reports once again surfaced that Russia has been providing material support to Taliban militants battling U.S., NATO, and Afghan forces. In some respects, this seems as though a complete role reversal between the U.S. and Russia in Afghanistan has taken place over the last three-plus decades. During the 1980s, the CIA funneled weapons to Afghan rebels who were fighting Kabul’s communist government and the Soviet troops backing it. “The Russians probably look at this role reversal as a delicious irony and a payback for their own involvement in Afghanistan years ago,”  . “They have a long memory.”   Russia’s interests in Afghanistan are longstanding, dating back to 19th century when the British and Russian empires vied for political and military control over the country in what came to be known as the “Great Game.” Today, Moscow views security along Afghanistan’s northern border with Tajikistan – a key Russian ally – as critical for its regional interests. Furthermore, Russian President Vladimir Putin may be chomping at the bit to expand his influence into a part of the world where the U.S. has gained little traction in cultivating capable partners or recruiting trusted allies. A growing Russian presence in Afghanistan could transform the war-torn country into the next “Syria,” – a proxy battleground between Russia and the United States. At the very least, Russia’s involvement in Afghanistan may jolt the U.S. government into finally addressing perennial questions that have remained unanswered over the last sixteen years, during the Bush, Obama and now the Trump administrations: should the U.S. maintain its military presence in Afghanistan, and what is the most desirable outcome for a country that has seen persistent war for nearly half a century? “The endgame should be to negotiate conditions under which the U.S. and NATO can withdraw their troops from Afghanistan without a collapse of the Afghan state or the violent seizure of power by the Taliban or any other group, leaving behind a government that will be a moderate effective partner in fighting ISIS, al Qaeda, Leshkar-E-Taiba (LeT), or other international terrorist groups,” says Rubin. “The U.S. should commit to continued funding for at least a decade of the Afghan state, including its security forces, education, health care, and economic management.” Others maintain that the U.S. should keep a military presence in Afghanistan, however indirect their combat role may be.

The 16 Year War in Afghanistan: Headlines Tell the Story - Ralph Nader -- Since 2001 the US has been at War in Afghanistan – the longest war in US history. Headlines concisely tell the story of this cruel boomeranging quagmire of human violence and misery. Below are some newspaper headlines from 2010 to the present to show that a militarized foreign policy without Congress’s constitutional duties and steadfast public engagement will drift on, costing our soldiers’ lives and limbs, nearly three-quarters of a trillion taxpayer dollars, hundreds of thousands of Afghani lives and millions of refugees, with no end in sight. Here we go – year by year:

Al-Qaeda's "Inspire" Magazine Targets US Commuter Trains With Homemade "Derailment Devices" --The magazine that helped the Tsarnaev brothers pull off the Boston Marathon bombing – while also purporting to teach wannabe jihadis how to “make a bomb in the kitchen of your mom” – is homing in on its next target: America’s crumbling transportation infrastructure.  “Inspire,” the Al Qaeda propaganda magazine, will dedicate its next issue to America’s passenger and commuter trains. The focus on rail transportation comes at a time of great anxiety over the scarcity of resources devoted to repairing America’s vulnerable trains, which is advantageous to a group aiming to reestablish maximum relevance. Derailments in the Bronx, Philadelphia and New York City’s Penn Station have made commuters anxious. The effort to rescue New York City’s deteriorating subway system has been one of the most closely followed stories of the summer, according to the Washington Times.  It’s competing Sunni extremists group, the Islamic State, for more than a year has advocated using vehicles to mow down innocents. Its murderous followers have weaponized vehicles in Nice, Berlin and London, creating hundreds of deaths and injuries. Furthermore, two of the deadliest terror attacks in European history were carried out on public commuter trains. The 7/7 London tube bombing, when four suicide bombers killed 52 people on the London Underground. And the Madrid train bombings, when a terrorist cell linked to Al Qaeda killed nearly 200 people on a Madrid Cercanias train. Now Al Qaeda wants to replicate those attacks in the US.

Iran To Send Warship Flotilla To West Atlantic Amid Massive New Military Build Up -- Tehran is preparing to send a flotilla of Iranian warships to the western Atlantic Ocean following the announcement of a massive $500 million investment in war spending, according to Iranian leaders, who say the military moves are in response to recent efforts by the United States to impose a package of new economic sanctions on Iran, the Free Beacon reports. With tensions over sanctions and Iran's compliance with the nuclear agreement growing, Iranian parliamentary members voted to increase war spending by over half a billion dollars (it was unclear if the cash is from the ransom paid by Obama to free several US hostages one year ago). This is at least the second recent cash infusion to Iran's military since the landmark nuclear deal that unfroze billions in Iranian assets and saw the United States awarding Tehran millions in cash. As BBC adds, Iranian lawmakers shouted "death to America" as they voted; the new measure proposes that the government allocates an additional $260MM for the "development of the missile programme" and the same amount to Iran's Quds Force, a branch of the country's Revolutionary Guards Corps, the official state news agency Irna said.

Commentary: Trump’s dysfunctional NSC a threat to national security - Reuters - The White House National Security Council (NSC) has no shortage of crises at the moment. Nuclear and missile proliferation on the Korean Peninsula, Islamic State-inspired attacks in western countries, the political and economic crisis in Venezuela and Russian military intervention in Ukraine, Georgia and Syria, to name just a few.   The NSC is where all of these incredibly dangerous and ever-evolving issues collide, an inter-agency coordinating body where national security professionals across the U.S. government are responsible for providing recommendations to the president. The people who staff the NSC are chronically sleep-deprived, but managing U.S. foreign policy and containing crises that could quickly spiral out of control require nothing less. As Loren DeJonge-Schulman, a former senior director in President Barack Obama's NSC described the experience, the NSC melds "existential terror with physical deprivation and feats of strength." Being a White House national security staffer is a tough job in the most ideal of circumstances. But if colleagues are afraid of backstabbing or unable to establish productive working relationships with one another, the environment becomes unbearable. In their respective memoirs, former Secretaries of Defense Robert Gates and Leon Panetta both griped about how coordination between the U.S. national security bureaucracies can be slowed or stopped over personality differences and individual self-interest.  This is why all of the staff changes, resignations, and score-settling in the media between top NSC and White House officials in the Trump administration are so concerning. If left unchecked, the healthy competition and inter-personal rivalries that often give the president more policy options can breed mistrust, hindering workflow and coordination. The NSC must nip this problem in the bud before it grows any worse and negatively impacts the president’s work.

Trump White House to look into China's trade practices - NBC  (CNNMoney) - President Trump plans to get tougher on trade with China. On Monday, Trump is expected to direct U.S. Trade Representative Robert Lighthizer to look into alleged Chinese violations of U.S. trade, including forced intellectual property transfers and patent thefts, according to senior administration officials who spoke Saturday. Trump informed Chinese President Xi Jinping Friday night of the upcoming memorandum, a senior administration official told CNN Friday. The move, which is not yet an official investigation, could lay the groundwork for one. Lighthizer will recommend whether an official investigation into trade practices is warranted. Should an investigation find wrongdoing, Trump could impose tariffs against Chinese imports, which would mark a significant escalation in his efforts to reshape the trade relationship between the world's two largest economies. Trump's call with Xi and his potential plans to open the broad trade investigation come against the backdrop of rising tensions over North Korea's nuclear and ballistic missile programs. Trump planned to launch the trade investigation more than a week ago, but he delayed the move in favor of securing China's support for expanded U.N. sanctions against North Korea, the senior administration official said. Trump has been trying for months to get China to exert more pressure on North Korea, but has recently expressed frustration with the lack of progress. The trade investigation could strain relations between the U.S. and China as the two countries wrestle with the unpredictable situation over North Korea. Pyongyang this week threatened to fire missiles near the U.S. territory of Guam during an exchange of bellicose rhetoric with Trump.

Trump's China trade crackdown coming Monday - POLITICO: President Donald Trump is ready to launch a new trade crackdown on China next week, an administration official confirmed. Trump on Monday will call for an investigation into China over allegations that the nation violated U.S. intellectual property rights and forced technology transfers, the official said. While it's unclear how much detail Trump will get into in the announcement, administration officials expect U.S. Trade Representative Robert Lighthizer to open an investigation against China under Section 301 of the Trade Act of 1974. The pending announcement comes amid heightened tension between the United States and China, even after the Trump administration scored a victory in persuading Beijing to sign onto new United Nations sanctions on North Korea. It is not clear whether China has the motivation to close off the spigot entirely with North Korea. China is North Korea's main trading partner, and it is not interested in seeing the economic collapse of the regime, which could send a flood of refugees into China and destabilize its northern provinces. The ordering of the investigation will not immediately impose sanctions but could lead to steep tariffs on Chinese goods. Trump has expressed frustration in recent months over what he sees as China's unfair trade policies.The closely watched announcement appears to have bipartisan support, although Democrats have accused Trump of not being tough enough on trade.

Trump Is Ready to Turn Up the Heat on China Over IP Transfers - Trump will sign an executive memorandum on Monday directing U.S. Trade Representative Robert Lighthizer to consider investigating China over its IP policies, especially the practice of forcing U.S. companies operating in China to transfer technological know-how, administration officials said Saturday on a conference call with reporters. If China is found to be flouting the rules on U.S. intellectual property, the administration has a range of options, including imposing import tariffs, said the administration officials, who weren’t authorized to speak publicly about the matter. If USTR moves forward, the investigation could take as long as a year.The move comes amid growing tension over the threat of North Korea using nuclear weapons, and a week after the U.S. received China’s help in the United Nations Security Council to impose tougher economic sanctions on Pyongyang. Nikki Haley, the U.S. ambassador to the UN, said at the time that she wanted to “personally thank” the Chinese delegation. Chinese President Xi Jinping moved to calm nerves on Friday, telling the U.S. president during a phone call that all sides should maintain restraint and avoid inflammatory comments. While the White House said the leaders reaffirmed their commitment to rid the Korean peninsula of nuclear weapons, Trump has previously criticized China for not reining in North Korea, and threatened trade measures if Xi fails to act. The announcement expected Monday comes amid sharply escalating tensions, with Trump warning that U.S. military options are “locked and loaded” if North Korean President Kim Jong-Un acts unwisely. It further complicates the already taut U.S.-China relationship, which took a frosty turn last month when officials from both nations couldn’t agree on a joint statement over economic issues after high-level talks in Washington.

China Threatens With Trade War Retaliation If US "Damages Trade Ties" -- Just hours after President Trump authorized an inquiry into China's alleged theft of intellectual property, China's Ministry of Commerce said it would take action to defend its interests if the United States damages trade ties. “This is just the beginning, I want to tell you that. This is just the beginning,” Trump told reporters, and after signing an executive memorandum giving his trade representative, Robert Lighthizer, the power to explore ways to challenge China’s alleged theft of intellectual property and forced transfer of technology - the Trump administration estimates that theft of intellectual property by China could be worth as much as $600 billion - China said the US should "respect objective facts, act prudently, abide by its World Trade Organization pledges, and not destroy principles of multilateralism", an unidentified spokesman of China's Ministry of Commerce said in a statement according to Reuters."If the U.S. side ignores the facts, and disrespects multilateral trade principles in taking actions that harms both sides trade interests, China will absolutely not sit by and watch, will inevitably adopt all appropriate measures, and resolutely safeguard China's lawful rights." The ministry also said the United States should "treasure" the cooperation and favorable state of China-U.S. trade relations, and warned that any U.S. action to damage ties would "harm both sides trade relations and companies".The Commerce Ministry complained Trump’s order was “strong unilateralism” that violated the spirit of multinational trade agreements. “We believe the U.S. side should strictly adhere to commitments and should not become the destroyer of multilateral rules,” said the statement.

The Most Over-Hyped U.S. Trade Deal Is About to Get a Makeover - More than 23 years in, and the North American Free Trade Agreement still hasn’t lived up to the hype. President Bill Clinton pitched it as a jobs engine that would contribute to world peace. One of his opponents in the 1992 election, Ross Perot, predicted it would trigger a “giant sucking sound” as American jobs flowed to Mexico. Unions trashed it. Corporations lionized it. Earlier this year when the U.S. Trade Representative’s office invited public input ahead of the pact’s first major overhaul that begins Wednesday, the website temporarily went down. Some 12,500 comments have since rolled in. Rarely has a trade deal unleashed so much sound and fury.While trade on the continent has surged, the academic consensus is that the impact on the U.S. job market wasn’t significant, though some industries and parts of the country were hit hard. And that’s close to the picture that most economists were painting two decades ago.“Both sides oversold it,” said Sherman Robinson, a senior research fellow at the International Food Policy Research Institute who worked for Clinton’s Council of Economic Advisers. Economists projected the deal would bring modest benefits to the U.S., and that “basic conclusion held up,” he said. The current president is not one for modest proposals. As his negotiators kick off the first round of official negotiations with Mexico and Canada through Aug. 20, Donald Trump may have already promised too much. At campaign rallies, Trump called it the worst deal in U.S. history and a “total disaster.” In April he came close to pulling the U.S. out of the deal entirely. Now he’s made it an official negotiating goal to reduce the U.S. trade deficit with its Nafta partners, putting America’s $63-billion gap with Mexico in the cross hairs. And like Clinton in the early 1990s, he’s vowing to deliver jobs, making trade renegotiations part of his plan to turbo-charge U.S. growth.

How big of a change to expect with NAFTA? --As negotiators prepare for the start of round one of the negotiations on Wednesday, Trump administration officials are taking a careful stance on the task of modernizing the 23-year-old pact.  "NAFTA needs to be reformed to help protect American workers and create more jobs at home," White House chief economic adviser Gary Cohn said in a statement on Saturday that was short on specific details. "We should keep the parts that work, especially for much of American agriculture, but fix the parts that don't."His remarks hinted that there would be limited renegotiation of NAFTA, despite President Donald Trump calling the agreement one of the worst trade deals in history and threatening to withdraw unless there were major changes. That has created concern among both the farm and business groups about losing preferential to United States' two top export partners. The Office of the U.S. Trade Representative last month published the Trump administration's negotiating objectives for NAFTA. Those borrow heavily from the Trans-Pacific Partnership, which Trump discarded on his third day in office. But they also reflect Trump's priorities on reducing bilateral trade deficits and ensuring the United States is able to freely use its trade remedy laws to keep out unfairly traded imports.  "Unlike his predecessors, President Trump insists on trade deals that are fair, balanced, modern, and put the American economy first. NAFTA was created for the world of the 1990s," Cohn said. "Working together, we will modernize this agreement to meet the needs of today's economy, just as the President promised."’

5 big questions about the NAFTA talks - Politico - One of President Donald Trump's core campaign promises is about to be tested as talks with Canada and Mexico on NAFTA open Wednesday.Trump’s negotiators will be tasked with transforming the 25-year-old agreement that he has called "the worst trade deal" in history into one that he can trumpet as "saving and creating jobs." At the same time, Trump will have to please constituencies who are both for and against lifting trade barriers.  Talks are scheduled to continue until Sunday, but this week is just the beginning of a drawn-out process. Negotiators from the three countries will be meeting over multiple rounds in the coming months.But a long list of U.S. demands could make it difficult to wrap up a deal quickly. Here’s a look at some of the looming questions as the three countries get down to business:

  • Will the revised NAFTA deal bring back manufacturing jobs? The United States had 16.8 million people employed in manufacturing in January 1994, when NAFTA went into effect. That increased to 17.4 million over the first five years of the pact. The number of jobs started to fall sharply in the early 2000s and slumped to 11.6 million by January 2010 — a decade marked by China’s entry into the WTO; increased factory automation and efficiency; and the 2007-09 financial crisis and recession.
  • Can Trump reduce the trade deficit?  Like no other president in recent history, Trump is obsessed with reducing the U.S. trade deficit. He is unpersuaded by arguments that the deficit is more the result of macroeconomic factors, like the low U.S. savings and high consumption rates, than trade policy.
  • Will Trump keep threatening to withdraw? During last year’s campaign, Trump promised that he would renegotiate NAFTA or withdraw under Article 2205 of the pact, which allows any of three countries to leave with just six months' notice. Trump appeared to be on verge of invoking Article 2205 in April before being pulled back by his advisers. But since then, Trump has continued to warn that he will withdraw from the pact, unless he gets what he considers a good deal.
  • Can Trump get a “win” on NAFTA without Canada and Mexico losing? So far Trump has not been able to deliver on many of his campaign promises, putting pressure on U.S. negotiators to deliver a victory in the NAFTA talks. But in trade negotiations, all countries have to see a win for themselves in order to strike a deal.
  • Where will Trump get the votes in Congress to win approval of the revised deal?

Trump administration releases NAFTA renegotiation principles: Read them here- Cleveland Plain Dealer -  President Donald Trump, who won the White House after claiming trade pacts like the North American Free Trade Agreement drained jobs from the United States, on Monday released the guidelines his administration will use to renegotiate the deal.The 17-page document released by U.S. Trade Representative Robert Lighthizer pledges to reduce the U.S. trade deficit with other countries and increase Canadian and Mexican market access for U.S. manufacturing, agriculture and service industries. Publishing the objectives is required before formal negotiations could begin."Too many Americans have been hurt by closed factories, exported jobs, and broken political promises," said a statement from Lighthizer, who said the new agreement would address "America's persistent trade imbalances, break down trade barriers, and give Americans new opportunities to grow their exports."Lighthizer's office promised to work toward eliminating unfair subsidies, burdensome intellectual property restrictions and market-distorting practices by state-owned enterprises. The plan also calls for eliminating "all forms of forced or compulsory labor, including child labor," and for seeking commitments that customs duties won't be imposed on digital products like videos, e-books, music and software. Ohio Republican Sen. Rob Portman, who served as U.S. Trade Representative during George W. Bush's presidency, applauded the administration's "commitment to maintain open markets, promote trade enforcement cooperation, modernize de minimus standards, and ensure NAFTA countries do not manipulate their currencies.""I look forward to continuing to work with the Administration as they work to promote U.S. exports and protect against unfair imports by updating NAFTA for the 21st century," said a statement from Portman.Ohio Democratic Sen. Sherrod Brown, a vocal critic of NAFTA, said he wants to see more details of the proposal and looks forward to  discussing them with Lighthizer.

Labor Rights And Solidarity In NAFTA Renegotiation | James P. Hoffa and Francois Laporte - NAFTA talks start in Washington, D.C. today on an ambitious schedule to come up with a “modernized” agreement by the end of the year. The Teamsters Union will be tracking them closely. As North America’s transportation union, our members on the roads and rails, in warehouses and ports from coast to coast, depend on trade for their livelihoods. The livelihoods of Teamster members in bakeries, breweries and the dairy industry also depend on a stable trade relationship. Teamsters are pro-trade – but we want fair trade.First, we remind negotiators from both countries of the importance of Canada-U.S. trade. Contrary to what some may believe, there is no significant trade imbalance between our two nations. In fact, we are each other’s biggest customers – 64 percent of all Canadian trade is with the U.S., and 48 U.S. states count Canada as one of their largest export markets. Last year, the United States exported more to Canada than any other country. It’s why we believe NAFTA renegotiations must not inadvertently disrupt our trade relationship – a belief shared by our governments and most business stakeholders.That said, we also remind the new NAFTA negotiators why Teamsters opposed the original agreement a generation ago and why we have opposed its expansion in numerous trade deals since – most recently in the Trans-Pacific Partnership (TPP). Simply put, the NAFTA model does not work for workers. Instead, it subordinates their interests to the bottom-line profit motives of multinational corporations, suppresses wages and labor standards, and contributes to rising inequality. We welcome NAFTA renegotiation and, on behalf of our 1.4 million members, we will engage with our governments to upgrade this flawed and failed “free trade” model.

Union leaders wary as ‘New NAFTA’ talks start — Union leaders in the U.S. and Canada are casting a wary, skeptical eye on Trump and Trudeau administration negotiators as talks on crafting a “new NAFTA’ opened in Washington on August 16. And while Mexican unions, almost all government-aligned, are silent, Mexican workers are not: Up to 10,000 took to the streets of Mexico City to protest the new pact. The five days of talks to replace the 23-year-old extremely pro-corporate “free trade” pact between the three nations began in D.C. just after Canada unveiled its negotiating objectives for the new NAFTA. Mexico’s government, its economy minister says, stands pat. But AFL-CIO President Richard Trumka and the Canadian Labour Congress are not. Trumka says a new NAFTA must guarantee workers’ rights in its text and “a fair return on our hard work” for workers in all three countries.  The renegotiation replaces Republican President Donald Trump’s original campaign pledge to scrap NAFTA, which he called a disaster for the U.S. That’s one point where U.S. unions agree with Trump, as studies calculate the current NAFTA benefits multinationals and the rich. They have exploited Mexico’s weak labor and environmental laws and low wages to export 700,000-1 million U.S. jobs — mostly well-paying factory jobs, but also call center jobs — south of the U.S.-Mexico border. But Trump switched gears, to “new NAFTA” talks instead, then held hearings on U.S. bargaining goals. The federation, the Teamsters, the Machinists and the Auto Workers all testified – as the only workers in a parade of corporate lobbyists – but saw few aims adopted. That upset union leaders and their members. Trumka warned on August 14 that unless the new NAFTA is negotiated out in the open, and unless it helps workers, labor will lead the movement to trash it.

U.S. tax change proposals anger builders, realtors, charities | Reuters: (Reuters) - With U.S. Congress members focused during their August recess on finding ways to lower the corporate tax rate, industry groups and other sectors of society are gearing up to fight proposed changes to the personal income tax. While tax cuts for business have garnered the most headlines, lobbyists and lawmakers have conceded that rewriting the corporate tax code will be a long slog. Tackling personal tax rates will be easier, many argue. Looking for an easier legislative win ahead of the 2018 midterm elections, most lawmakers in the Republican majority want to cut individual incomes taxes. President Donald Trump has been pushing hard for tax changes this year. Still, proposed changes to the personal tax code have already stirred opposition from realtors, home builders, mortgage lenders and charities. These groups say proposed changes will hurt home sales and cut charitable contributions. The National Association of Realtors issued an "August Recess Talking Points" circular imploring members to remind lawmakers that "Homeowners must be treated fairly in tax reform" to avoid "another housing crash." The group cited a report it commissioned from PwC that estimated home values could quickly dive more than 10 percent if the tax plan becomes law. To simplify the tax code, Republicans have proposed eliminating nearly all tax write-offs including those for state and local taxes, then doubling the standard deduction. This would eliminate the incentive to itemize and should drastically reduce the number of taxpayers who do so.Estimates suggest more than half of taxpayers would stop itemizing under the proposed plan, Dietz said, warning that this would create a large ripple effect through the economy. He said people in early years of a mortgage would suffer most, along with prospective home buyers. 

Trump Will Get His Tax Cuts, Vast Majority of Economists Say - The pros who make their living forecasting the economy overwhelmingly expect President Donald Trump and his fellow Republicans to push through tax cuts in time for next year’s congressional elections. They just don’t think that the reductions will do all that much to help the economy in 2018. That’s the message from the latest Bloomberg monthly poll of economists, taken Aug. 4 to Aug. 9. Of 38 respondents, 29 expect Congress to pass tax-cut legislation by November 2018. The policy changes though are only expected to add 0.2 percentage point to the pace of gross domestic product expansion in 2018, according to the median figure from analysts penciling in an impact. The Bloomberg survey forecasts growth in 2018 to be only slightly higher than this year -- 2.3 percent versus 2.1 percent, according to median projections from a broader pool of 71 economists. What’s more, analysts see the economy losing momentum in 2019, with expansion falling back to 2 percent, contrasting with the Trump administration’s forecast of a further pickup. Cuts to individual and corporate rates would fall short of what GOP leaders and the Trump administration have promised -- a once-in-a-generation permanent overhaul of the U.S. tax code, similar to what happened in 1986 under former President Ronald Reagan. If Republicans use a budget procedure for a tax bill to bypass Democratic opposition in the Senate, cuts would have to expire if they add to the long-term federal deficit.   The administration is betting that a mixture of corporate and individual tax cuts, along with other tax code changes, will eventually help lift annual economic growth to 3 percent, from the 2.1 percent average rate of the last eight years. In the first half of 2017, coinciding with Trump’s first six months in office, output rose at a 1.9 percent annual pace. In order to win passage of a sweeping tax plan, the administration is holding a weekly, all-hands-on-deck meeting to coordinate strategy between the president and his allies, according to White House officials. The intensive discussions contrast with the at times haphazard approach the administration took in its failed attempt to repeal former President Barack Obama’s health-care law.

The Case Against a Consumption Tax -  You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that. We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like? Start with a simple pared-down household. The only accounting complication is that they own a house: How much did this household “save”? Should the interest payments count as consumption? The principal payments almost certainly should not (and could be treated that way under the rules of a consumption tax without a whole lot of work for homeowners and lenders…). But what about home maintenance? A new paint job increases your home’s asset value. Should you depreciate that asset value over some years? Or say you buy new appliances for your kitchen: You’re cash out of pocket, but your home is worth more. Are those purchases “consumption”? This notion of some simple tally of your “saving” starts to look more complicated. We’re not talking “taxes on a 3-by-5 card” here. And this is not a complex household. There will have to be some complicated IRS rules for what counts as saving. (I won’t even touch here on various clever opportunities to game this system.) An expanded tally raises some other tricky questions: What if this family leases its car with an option to buy at the end of the lease, instead of buying? How do you account for that? And this doesn’t even touch the troublesome issue of health care: is it consumption? That’s how it’s tallied in the national accounts. But if Americans didn’t invest in maintaining their health, how prosperous would our country be? Should we tax health spending? If you get sick, your taxes go up. Hmmm. I’ll leave it to my gentle readers to consider the details — what’s consumption, what’s saving, and what’s neither? Just to say: I can’t quite see how this family would do their taxes without a complete balance-sheet accounting every year, or some quite complicated rules for 1040 filing that result in essentially the same thing.The rather childishly simplistic “just tally your income and subtract your saving” isn’t so simple when you think about the actual details.

Trump to sign executive order Tuesday on infrastructure projects (Reuters) - President Donald Trump will sign an executive order on Tuesday "establishing discipline and accountability in the environmental review and permitting process for infrastructure projects," the White House said in a statement on Monday.   Trump, who is visiting his residence at Trump Tower in New York City, will also participate in a discussion on infrastructure and give a statement on the subject at 3:45 p.m. (1945 GMT). The White House did not give additional details on the executive order.  Trump, who was a real estate developer before becoming president, made rebuilding the country's crumbling infrastructure a top campaign issue.  He has proposed leveraging $200 billion in government spending into $1 trillion of projects to privatize the air traffic control system, strengthen rural infrastructure and repair bridges, roads and waterways.  In June, Trump said one of the biggest obstacles to new infrastructure projects was "the painfully slow, costly and time-consuming process for getting permits and approvals to build."

Companies Linked To Mike Pence Seek An Upper Hand In Infrastructure Policy - In 2015, then-Gov. Mike Pence made the controversial decision to keep the Indiana Toll Road under the control of a consortium of private corporations, which was represented by a local lobbying firm that had funneled large donations to Pence’s gubernatorial campaign. This year, the same lobby firm signed up to press the Donald Trump administration on behalf of IFM Investors — the same foreign company that Pence originally approved to run the toll road consortium.In fact, documents reviewed by International Business Times show the lobbying firm that bankrolled Pence has been in direct contact with the vice president on federal infrastructure policy. The firm has lobbied Pence on behalf of Melbourne-based IFM as Pence has explicitly extolled IFM in his work spearheading a White House plan to privatize roads, bridges and airports. That trillion-dollar initiative, which Trump is scheduled to promote on Tuesday and which could enrich foreign investors, comes as Trump has said he is focused on “putting America first.” Last week, an IBT investigative report documented how Pence, in 2015, rejected local counties’ bid to reclaim the 155-mile-long Indiana Toll Road, after the private consortium operating it declared bankruptcy. In making that decision, he also rejected Democratic U.S. Sen. Joe Donnelly’s request that he consider having the state disband the private consortium and take back the road. State records reviewed by IBT show Pence received more than $116,000 from Bose, McKinney & Evans LLP — the parent company of Bose Public Affairs Group LLC, which served as the lobbying firm for the consortium. Fast forward less than two years later: Only weeks after Pence was sworn in as vice president, and had visited Australia to pitch foreign investors on the Trump administration’s privatization plan, Bose registered to lobby for IFM in Washington. The company lobbied specifically on “infrastructure investment,” a gig that netted Bose $80,000 so far this year. In subsequent federal documents filed as Pence continued to advocate for privatization, Bose listed “Vice President of the U.S.” as one of the people it contacted on behalf of IFM in its lobbying on the Trump administration’s “plan as it related to publicly-stated infrastructure investment.” Bose has also expressly lobbied Pence on other issues, such as health care policy, on behalf of the insurance giant UnitedHealth Group, other filings show.

Donald Trump to scrap rule to protect roads and infrastructure from climate change -- Overshadowed by his decision to describe some of those who took part in the far-right rally in Charlottesville as “very fine people”, Donald Trump announced plans to scrap regulations designed to protect roads and other infrastructure from climate change. Under Barack Obama, the US federal government was required to consider the effects of global warming when planning infrastructure, such as the risk of flooding from predicted sea level rise. Mr Trump complained that such regulations were slowing down projects, claiming it had taken 17 years to build a road in a state that he would not name. The US President wants to spend $200bn of government money over 10 years on improving infrastructure as part of a $1 trillion programme involving private funds. However a Republican from South Florida, where recent flooding has seen fish swim in the streets of Miami, one of the most vulnerable cities in the world to sea level rise, condemned Mr Trump’s plans saying they were not “fiscally conservative” but “irresponsible”. Speaking at Trump Tower in New York, Mr Trump said: “I just signed a new Executive Order to dramatically reform the nation’s badly broken infrastructure permitting process. “Just blocks away is the Empire State building. It took 11 months to build. But today, it could take as long as a decade. “We used to have the greatest infrastructure anywhere in the world, and today we’re like a third-world country. No longer will we allow the infrastructure of our magnificent country to crumble and decay.” He suggested the Democrats in Congress, who joined forces with rebel Republicans to defeat his healthcare proposals, would back his infrastructure plans. 

Trump and the Infrastructure of Fascism --Fixing bridges, building roads, modernizing airports, improving mass transportation, keeping lead out of our water: nearly everyone can relate to the need for it and can imagine how much better their lives would be with more of it.  For years, most people have faced crazy-making delays in traffic, long lines at airports, and have seen pictures of bridges collapsing. And the experts agree. Economists and engineers have warned us about the problem for decades.  The most recent report by the American Society of Civil Engineers gave the U.S. a D+ on its infrastructure building and maintenance, which means that, overall, our infrastructure is in critical condition. These civil engineers estimate that over the next 10 years, the U.S. will have about a $1.2 trillion in infrastructure financing shortfall unless something dramatic is done. Studies have confirmed that, properly done, infrastructure investment can generate millions of jobs, create big time saving efficiencies, and keep people safer. On the campaign trail, Trump jumped on the bandwagon, decrying America’s “Third World” infrastructure and touting his ability to fix it in short order—as “demonstrated” by his “building prowess “in New York City and “around the world.” Trump promised to quickly fix the country’s decaying infrastructure and generate millions of good paying job with a $1 trillion program that will “Make America Great Again.” That Trump had hit a political “sweet spot” was made clear early on by the number of prominent Democrats and labor leaders who announced not only an interest but real enthusiasm for cooperating with Trump on making a $ 1 trillion building-spree a reality. How could they resist? A true, well designed, well-implemented $1 Trillion government investment in infrastructure is a plan many Democrats, progressive economists and labor leaders had been promoting for years. I argued that not only is the so-called “infrastructure” program mostly a thinly disguised privatization scam; it was also a sinister gambit to broaden the political support and therefore the power of Trump and  Trumpism, a proto-fascist regime and movement, whose goal is to undermine democracy, enrich those wealthy capitalists willing to play along, and divide and conquer the domestic population by sowing racial, gender, religious and national hatred and intolerance.

Trump Gives White Supremacists an Unequivocal Boost - — President Trump buoyed the white nationalist movement on Tuesday as no president has done in generations — equating activists protesting racism with the neo-Nazis and white supremacists who rampaged in Charlottesville, Va., over the weekend. Never has he gone as far in defending their actions as he did during a wild, street-corner shouting match of a news conference in the gilded lobby of Trump Tower, angrily asserting that so-called alt-left activists were just as responsible for the bloody confrontation as marchers brandishing swastikas, Confederate battle flags, anti-Semitic banners and “Trump/Pence” signs. “Thank you President Trump for your honesty & courage to tell the truth,” David Duke, a former Ku Klux Klan leader, wrote in a Twitter post shortly after Mr. Trump spoke. Richard B. Spencer, a white nationalist leader who participated in the weekend’s demonstrations and vowed to flood Charlottesville with similar protests in the coming weeks, was equally encouraged. “Trump’s statement was fair and down to earth,” Mr. Spencer tweeted. Gov. Terry McAuliffe of Virginia, a Democrat, wasted little time in accusing the president of adding to the divisions that put an unwanted spotlight on the normally peaceful college town. “Neo-Nazis, Klansmen and white supremacists came to Charlottesville heavily armed, spewing hatred and looking for a fight,” Mr. McAuliffe said. “One of them murdered a young woman in an act of domestic terrorism, and two of our finest officers were killed in a tragic accident while serving to protect this community. This was not ‘both sides.’” No word in the Trump lexicon is as tread-worn as “unprecedented.” But members of the president’s staff, stunned and disheartened, said they never expected to hear such a voluble articulation of opinions that the president had long expressed in private. The National Economic Council chairman, Gary D. Cohn, and the Treasury secretary, Steven Mnuchin, who are Jewish, stood by uncomfortably as the president exacerbated a controversy that has once again engulfed a White House in disarray. He spoke of “very fine people on both sides.” And of the demonstrators who rallied on Friday night, some chanting racist and anti-Semitic slogans, he said, “You had a lot of people in that group that were there to innocently protest and very legally protest.” 

Trump fans the flames with Confederate defense | TheHill: President Trump on Thursday fanned the flames of a controversy engulfing his administration, expressing his disgust at the national movement to take down statues honoring Confederate soldiers and politicians. In a string of early morning tweets, Trump went even further than he did during his turbulent press conference on Tuesday, when he claimed some demonstrators in Virginia were “fine people” upset at Charlottesville’s decision to pull down a statue of Confederate Gen. Robert E. Lee and that there was “blame on both sides” for an attack that left one dead and 19 injured. “You can't change history, but you can learn from it,” Trump tweeted. “Robert E Lee, Stonewall Jackson — who's next, Washington, Jefferson? So foolish! Also the beauty that is being taken out of our cities, towns and parks will be greatly missed and never able to be comparably replaced!” In doubling down, Trump appeared to embrace the thinking of his chief strategist, Stephen Bannon, who suggested in an interview this week that the president would “crush the Democrats” as long as “they stay focused on race and identity, and we go with economic nationalism.” Polls suggest that shifting the focus onto the debate over Confederate landmarks — and away from the violence in Charlottesville — could play to the president’s base. Republican voters overwhelmingly support preserving memorials to the Confederacy, with 86 percent in an NPR/PBS News Hour/Marist poll this week saying Confederate statues should “remain as a historical symbol.” Overall, six in 10 votes said the same.

AFL-CIO President Quits President's Mfg Council, Accuses Trump Of "Tolerating Domestic Terrorism" -- Having previously lost Merck CEO Kenneth Frazier from the president’s manufacturing council, followed by Under Armour’s Kevin Plank and Intel Corp.’s Brian Krzanich, who both also said on Monday that they were also stepping down, and followed by the president of the Alliance for American Manufacturing, Scott Paul, who said on Tuesday that he was quitting the group as it was “the right thing for me to do" moments ago the president of the AFL-CIO also resigned from the Presidential Council on Manufacturing, claiming that Trump "tolerates bigotry and domestic terrorism" and stating that "President Trump's remarks today repudiate his forced remarks yesterday about the KKK and neo-Nazis. We must resign on behalf of America's working people, who reject all notions of legitimacy of these bigoted groups."I cannot sit on a council for a President that tolerates bigotry and domestic terrorism; I resign, effective immediately.— Richard L. Trumka (@RichardTrumka) August 15, 2017 The full statement by Trumka is below:

Unlike manufacturing council, no member of Trump’s “Strategic and Policy Forum” has resigned over Charlottesville - Despite the resignations of six executives from Donald Trump’s Manufacturing Jobs Initiative after his response to the violent events in Charlottesville, not a single member of the President’s Strategic and Policy Forum, another advisory council, has followed suit.Included on the council are Jamie Dimon, Larry Fink, and Stephen A Schwarzman, respectively the chairs and CEOs of JP Morgan, BlackRock, and Blackstone. Also serving is former Fed governor Kevin Warsh, plus twelve others. (Our Fast FT colleagues have already tallied up the departures and remaining members of the manufacturing council, and we’ve reproduced the lists for both councils below.)Earlier this year, former Uber CEO Travis Kalanick, Disney CEO Bob Iger, and Tesla CEO Elon Musk resigned from the Strategic and Policy Forum after the President announced the US withdrawal from the Paris climate accord. Only two of the remaining sixteen members of the council have publicly responded at all to any of Trump’s remarks, though several others have commented in general terms on the bigotry and violence seen in Charlottesville.

Trump disbands business councils after CEOs quit in protest - (Reuters) - President Donald Trump disbanded two high-profile business advisory councils on Wednesday after several chief executives quit in protest over his remarks blaming weekend violence in Virginia not only on white nationalists but also on anti-racism activists who opposed them. A parade of prominent Republicans and U.S. ally Britain also rebuked Trump, leaving him increasingly isolated after his comments on Tuesday about the bloodshed in the college town of Charlottesville further enveloped his seven-month-old presidency in controversy. The mayor of Phoenix asked Trump to delay a rally planned for next Tuesday, an appeal the president appeared to reject. A memorial service was held on Wednesday in Charlottesville for 32-year-old Heather Heyer, killed when a car plowed into anti-racism protesters. A 20-year-old Ohio man said to have harbored Nazi sympathies has been charged with murder. Trump was elected president in November touting his experience in the business world and ability to strike deals. But some of the Republican president's actions and words have alienated many corporate leaders. Trump said he would dissolve the American Manufacturing Council and the Strategic and Policy Forum after eight executives including Campbell Soup Co CEO (CPB.N) Denise Morrison and 3M Co CEO (MMM.N) Inge Thulin quit the panels. Both of the councils were moving to disband on their own when Trump made his announcement on Twitter. "Rather than putting pressure on the businesspeople of the Manufacturing Council & Strategy & Policy Forum, I am ending both," he wrote. The Strategic and Policy Forum was headed by Blackstone Group CEO Stephen Schwarzman, a close ally of Trump in the business world. Schwarzman organized a call on Wednesday for member executives to voice concerns after Trump's comments, and an overwhelming majority backed disbanding the council, two sources said. Schwarzman then called Trump to tell him about the decision to disband. 

 Pressure's off Dimon as Trump business councils disband - Two advisory groups of American business leaders are disbanding, after CEOs quit this week as President Trump faced blowback for failing to sufficiently condemn white supremacists. The decision will take the heat off Jamie Dimon, CEO of JPMorgan Chase, who served on President Trump's strategic and policy forum and had drawn criticism during the year for sticking with it despite numerous White House controversies. Trump announced the dissolution on Twitter, less than an hour after one of the groups was said to be planning to inform the White House that it would disband. “Rather than putting pressure on the business people of the Manufacturing Council & Strategy & Policy Forum, I am ending both. Thank you all!” Trump said on Twitter. His remarks were a reversal of what he said a day before, when he tweeted that he had plenty of CEOs who wanted to be on the panels to replace those who quit, and called the CEOs who left “grandstanders.” The executive council, which is led by Blackstone Group LP’s Stephen Schwarzman, planned to inform the White House Wednesday before making the announcement public, according to a person familiar with the matter, who wasn’t authorized to discuss the news publicly. Dimon had remained on President Trump’s strategic and policy forum amid repeated controversy all year. He had said previously that while he disagrees with the president from time to time, he views his service on the council as a patriotic duty. The banker took steps to distance himself from some of the president’s most controversial positions. He disagreed with Trump's decision to exit the Paris climate accord and was one of several CEOs who criticized the White House’s proposed immigration ban on Muslim-majority countries. On Wednesday, Dimon released a statement saying he "strongly" disagrees with Trump's "reaction to the events that took place in Charlottesville over the past several days." "Racism, intolerance and violence are always wrong," Dimon said.

Jewish Trump Staff Silent on His Defense of Rally With Anti-Semitic Marchers — Jewish members of President Trump’s administration remained largely silent Wednesday after Mr. Trump came to the defense of nationalist and right-wing protesters in Charlottesville, Va., who had chanted anti-Semitic slogans and demeaned the president’s Jewish son-in-law. Gary D. Cohn, the director of the president’s National Economic Council, who is Jewish, was described by several people close to him as “disgusted” and “deeply upset” by the president’s remarks. But Mr. Cohn has not publicly expressed those views.  Steven Mnuchin, the secretary of the Treasury and also Jewish, stood silently behind Mr. Trump on Tuesday as the president said there were “very fine people on both sides” at the Virginia incident. Mr. Mnuchin has not said anything since about the president’s remarks. And Jared Kushner, the president’s son-in-law, who is also Jewish, has been silent about Mr. Trump’s comments. Ivanka Trump, Mr. Kushner’s wife, who converted to Judaism, said in a tweet on Sunday, “There should be no place in society for racism, white supremacy and neo-nazis.” Requests for comment on Wednesday from Mr. Kushner, Mr. Cohn and Mr. Mnuchin were not answered. The violent racist protests in Charlottesville began as white supremacists and others rallied against the removal of a statue of Robert E. Lee from a park in the city. Their words were aimed at Jews as well as blacks. Neo-Nazis carried torches and chanted “Jews will not replace us” as they marched through the University of Virginia campus on Friday. And on Tuesday, Chris Cantwell, a white supremacist leader, told Vice News that he wanted a president who “does not give his daughter to a Jew.”

Gary Cohn Reportedly "Disgusted & Deeply Upset" At Trump's Last Few Days -- Former Goldman Sachs President and current National Economic Council chair - who is also Jewish - is said to be "disgusted" and "deeply upset" by President Trump's comments on white nationalists according to The New York Times. Axios also reports: "we're told Cohn - who was standing next to Trump in anticipation of questions about infrastructure legislation - was somewhere between appalled and furious." NYT reporters cite thre people who are familiar withe the matter...Gary Cohn, NEC chair -- who is Jewish -- was 'disgusted' and "upset" by Trump's comments on white nationalists, per 3 ppl with knowledge — Glenn Thrush (@GlennThrush) August 16, 2017    Gary Cohn said to be deeply upset by last few days, per multiple sources. Not leaving admin but not happy  — Maggie Haberman (@maggieNYT) August 16, 2017Presumably this corners Cohn to either publicly deny the story or pressures him to resign if this is truly how he feels. With CEOs dropping like flies from his various councils, President Trump would be in grater trouble if a close aide were to resign, the floodgates could open.

Pelosi Demands "Reprehensible" Confederate Statues Be Removed From Capitol -- As the nation's left attempts to out-virtue-signal one another, Democratic Party leader nancy Pelosi just one-upped New York Governor Cuomo's street-name-removal demands, by calling for all Confederate statues to be removed from The Capitol.  Democratic Leader Nancy Pelosi released the following statement calling on Speaker Ryan to join Democrats in supporting legislation to remove Confederate statues from the Capitol: "The halls of Congress are the very heart of our democracy. The statues in the Capitol should embody our highest ideals as Americans, expressing who we are and who we aspire to be as a nation. "The Confederate statues in the halls of Congress have always been reprehensible. If Republicans are serious about rejecting white supremacy, I call upon Speaker Ryan to join Democrats to remove the Confederate statues from the Capitol immediately. As Jim Quinn concluded so eloquently, Trump was absolutely correct in asking, “Where does it end?”Washington owned slaves. Do we get rid of all dollar bills and quarters? Do we change the name of our capital? Do we change the name of Washington & Lee University to Obama & Spike Lee University? Do we blow up the Washington Memorial?Jefferson owned slaves. Do we get rid of nickles? How about the Jefferson Memorial?  Why stop only in our country? The Egyptian pyramids were built by slaves. Should we tear those down? If these are symbols of hatred and racism that must be destroyed, why do we never hear calls from the left for the destruction of the Nazi death camps. Talk about symbols of hate. Why would we want to remember the holocaust? It couldn’t be that it doesn’t fit the left’s narrative.  This Confederate monument narrative is designed by the left to provoke a backlash from whites who are tired of being scorned, ridiculed, belittled and called racists, rednecks and deplorables by so called open minded progressives. It’s working. The cold race war is beginning to turn hot. The president has no intention of trying to bring the two sides together because it’s impossible at this point. That’s how Fourth Turnings roll. The mood of the country will continue to darken. Reactions to these types of events will intensify. More blood will be shed. It’s too bad these functional illiterates didn’t pay attention in history class or ever read a book. They are going to learn some harsh lessons over the next decade.

Total Eclipse -- Kunstler - First they came for the statues…. What do you know, long about Wednesday, August 16, 2017, House Minority Leader Nancy Pelosi (D-Cal) discovered that the United States Capitol building was infested with statues of Confederate dignitaries. Thirty years walking those marbled halls and she just noticed? Her startled announcement perked up Senator Cory Booker (D- NJ) who has been navigating those same halls only a few years. He quickly introduced a bill to blackball the offending statues. And, of course, the congressional black caucus also enjoyed a mass epiphany on the bronze and stone delegation of white devils.I’d like to hear to hear an argument as to why the Washington Monument should remain dedicated to that vicious slave-driver and rebellious soldier, and indeed the name of the city that is the federal seat of government. Or the District of Columbia (after Columbus, who initiated the genocide of Native Americans). Or America, cribbed out of Amerigo Vespucci, the wicked Florentine cartographer who ascertained that the place called Brazil today was not the east coast of Asia but actually a New World — and so all our troubles began!Well, there has been a lot of idle chatter the past half-century about the root causes of this-and-that, and it seems that we have located one at last. I expect that scientific studies out of our best universities will soon confirm that occult transmissions from the statue of Jefferson Davis (a double-devil named after an earlier devil) are responsible for the murder rate in Chicago. In the meantime, many citizens await Monday’s spectacle of a total solar eclipse in parts of the country. They apparently don’t realize that another eclipse has been underway for months: the total eclipse of reality across the entire landscape of the USA. Now that has been an event to behold, not just some twenty-minute freak of astronomy. What’s being blacked out is the perilously fragile condition of the financial system — a great groaning Rube Goldberg contraption of accounting fraud, grift, statistical deceit, and racketeering that pretends to support the day-to-day activities of our national life.

Defiant Trump Doubles Down: "Sad To See History And Culture Of Our Great Country Ripped Apart" --President Trump just dropped a brand new tweet storm doubling down on comments he made at an impromptu press conference earlier this week that sparked a media firestorm and left many calling, yet again, for his immediate resignation. Responding to actions taken around the country to remove confederate statues in the wake of the violence in Charlottesville last weekend, Trump said it's "sad to see the history and culture of our great country being ripped apart."Sad to see the history and culture of our great country being ripped apart with the removal of our beautiful statues and monuments. You can't change history, but you can learn from it. Robert E Lee, Stonewall Jackson - who's next, Washington, Jefferson? So foolish!Also the beauty that is being taken out of our cities, towns and parks will be greatly missed and never able to be comparably replaced!Sad to see the history and culture of our great country being ripped apart with the removal of our beautiful statues and monuments. You..... — Donald J. Trump (@realDonaldTrump) August 17, 2017

‘The president is becoming more isolated’: Trump’s Charlottesville response may force GOP lawmakers to move on without him - President Donald Trump's response to the violence in Charlottesville may be driving a wedge between him and Republican lawmakers, according to policy analysts, and his influence over their plans may be waning. Trump's muddled response to violence from neo-Nazis and white supremacists in Charlottesville in the past few days took another turn on Tuesday when he blamed "both sides" for the violence and criticized people who did not think his initial response on Saturday was adequate. This lead to a swift response from lawmakers, particularly in Trump's own party. Republican senators, including Orrin Hatch, Lindsey Graham, Tim Scott, Marco Rubio, and Todd Young, offered critical statements on Trump's Tuesday press conference, and many GOP House representatives did the same.  This comes at a fraught moment for Trump's influence on Capitol Hill. Trump's attempts to assist with the Republican healthcare bill were reportedly hamfisted, he has repeatedly attacked GOP lawmakers for what he sees as their inability to get anything done, and he went after Senate Majority Mitch McConnell through the press and Twitter last week.  On the non-Washington side, Trump's influence over elections seemed to take a hit on Tuesday as his endorsement of Sen. Luther Strange, who temporarily replaced Jeff Sessions in the Senate and is now a candidate in Alabama's GOP Senate primary, did not move the needle from his previous polling numbers. And in a House GOP primary in Utah, the winner explicitly expressed misgivings about Trump.  CNN noted that Fox News host Shep Smith couldn't find a single Republican to go on-air to defend Trump on Wednesday. MSNBC and CNN hosts also reported trouble booking guests.  "Republicans are in agreement – they'll move on their own, ignoring Trump, on issues like the budget and taxes, and they have a chance to prevail," Valliere wrote in a note to clients on Wednesday. "There's growing unity among Republicans to forge ahead; if any legislation passes it will be in spite of Trump, not because of him."

Icahn Quits White House Role Amid Conflict-of-Interest Questions -- Billionaire investor Carl Icahn has ended his role as a special regulatory adviser to President Donald Trump after questions were raised about potential conflicts of interests with his business dealings.  In a letter to Trump posted Friday on Icahn’s website, he denied profiting from his advice-giving role -- a possibility raised by Democratic critics who have asked officials to investigate his work.  "Contrary to the insinuations of a handful of your Democratic critics, I never had access to nonpublic information or profited from my position, nor do I believe that my role presented conflicts of interest," Icahn wrote Trump. "Indeed, out of an abundance of caution, the only issues I ever discussed with you were broad matters of policy affecting the refining industry."  Icahn’s departure capped a tumultuous week for the White House following controversial comments by Trump that seemed to lend legitimacy to white supremacists and sparked a wave of CEO departures from presidential advisory panels. Three of the groups were disbanded this week. Icahn, the majority owner of CVR Energy Inc., an independent oil refiner, drew criticism for pushing a change in U.S. biofuel policy that would benefit the company. Separate questions were raised last month regarding his role in regulatory decisions affecting American International Group Inc., an insurer in which he he holds a significant stake.  Icahn said he was ending his arrangement with Trump’s blessing, "because I did not want partisan bickering about my role to in any way cloud your administration."

Bannon Ousted From White House Amid Furor Over Trump Remarks - Stephen Bannon is leaving his role as Donald Trump’s chief strategist, the White House announced Friday, ending a controversial tenure as the administration is engulfed in a storm over the president’s remarks on violence in Virginia.  His exit caps a tumultuous four weeks in which a slew of senior officials have announced their departures, including the White House chief of staff Reince Priebus, press secretary Sean Spicer and communications director Anthony Scaramucci, who was hired and fired within the space of 11 days. Bannon’s departure was agreed on mutually with new White House Chief of Staff John Kelly and his last day on the job will be Friday, White House press secretary Sarah Sanders said. The benchmark S&P 500 Index rallied as much as 0.4 percent, rebounding from its second-biggest drop of 2017, touching its daily high point after the New York Times confirmed Bannon’s departure. It remained up 0.1 percent in afternoon trading in New York. Investors interpreted his departure as removing a powerful advocate for a protectionist agenda and direct confrontation with China over trade. Bannon, 63, the chief executive of Trump’s presidential campaign and an architect of his election victory, was the leading champion of conservative populism within the administration. The former chairman of Breitbart News, Bannon served as a link to the so-called “alt-right” movement attuned to the attitudes of the most conservative elements of the president’s base.  “Steve played an integral part in the president’s journey to the White House," said former Trump adviser Sam Nunberg. "Steve went into the White House and didn’t betray his values, worked every day to advance the agenda that the president was elected on. Trump’s voters may get upset that America’s not being made great again. We’ll find out.”

Explosive Reaction to Bannon Ouster -- The ouster of Steve Bannon as President Donald Trump's White House chief strategist drew swift and emotional responses from sadness to shock to elation.Sam Nunberg, a former adviser to Trump, said in a statement to Newsmax: "Sad day for the movement. Sad day for the country."David Horowitz, author of "Big Agenda: President Trump's Plan to Save America," tweeted:A sad day for us. Steve was a true hero of this administration, & target of the biggest hate movement in America:— David Horowitz (@horowitz39) August 18, 2017Conservative firebrand Ann Coulter, tweeted:If @realDonaldTrump didn't like the media giving Steve Bannon all credit, instead of firing him, he should've hired 10 more like him. — Ann Coulter (@AnnCoulter) August 18, 2017   Here's a great sign: Wall Street traders ARE CHEERING the departure of Bannon. — Ann Coulter (@AnnCoulter) August 18, 2017    "I'm very upset. The deep state globalists won. They forced out Steve Bannon. I had a 'CNN is fake news protest' scheduled for tomorrow at their headquarters in Atlanta that I'm canceling because I'm so disheartened," Tea Party activist Debbie Dooley told The Hill. "It's a betrayal of his base. I'll continue to support Trump and his policies but I'll no longer be on the front lines defending him."

The White House is Now Run Entirely by Hucksters, Democrats, and Generals -- There is no one left in the White House who has any idea what they’re doing. At least nobody conservative. President Donald Trump never tires of reminding audiences that he is not a politician, and he proves it on an hourly basis. He is by turns a nationalist, a populist, and a demagogue — but rarely acts as a traditional conservative. As the previous occupant of the White House once said, a president’s “success is determined by an intersection in policy and politics.” With the far-right White House strategist Steve Bannon gone, the team left behind appears to be ill-equipped to maneuver the political challenges needed to turn the administration’s ambitious policy goals into successes. The chasm between Trump’s approach and that of his nominal allies in the Republican-controlled Congress is about to be sharpened in relief — and the resumes of his remaining staffers are ill-suited to overcome the gulf.Just look at what little experience top officials in the Trump White House have in the political side of policymaking.Trump’s new chief of staff, John Kelly, is a retired general. His national security adviser, H.R. McMaster, is an active-duty general and the bane of Breitbart, the far-right website Bannon used to run.Trump’s top remaining advisers are Jared Kushner and Ivanka Trump, a married couple who happen to be Trump’s son-in-law and daughter. They are there, they often say privately, to moderate Trump’s instincts. Before going to the White House, Kushner inherited his father’s real estate empire and Ivanka Trump ran a fashion line.Hope Hicks, perhaps the most talented figure left in the White House, was working as a spokesperson for the Trump Organization before she was drafted into the service of the Trump campaign, and then the White House. She is now the acting communications director.Gary Cohn, the senior economic adviser, was president of Goldman Sachs — and a Democrat before going to work for Trump. Dina Powell, another senior adviser and New York liberal, also came from Goldman Sachs. Secretary of State Rex Tillerson was CEO of Exxon Mobil and Treasury Secretary Steve Mnuchin also came from the banking world. Kellyanne Conway is not a political novice, but has long been a fringe figure in Republican politics. That is Trump’s team.

Former Breitbart Employee Says Bannon Firing 'The Worst Nightmare' for Globalists --Investigative journalist and former Breitbart employee, Lee Stranahan, offered a quick quip on today's news that Bannon has resigned from the White House, suggesting that Steve would 'unleash the beast' through his online publication and call out those working against the Trump agenda in the White House.  Stranahan has been a long time loyalist to Bannon and ardent opponent to several people inside Trump's White House, namely McMaster, Powell and Cohn. The theory he's putting forth is that Bannon will have more power outside the White House than inside. While that might be true for Steve, I fail to see how fomenting more internal strife inside the Trump White House will be constructive at this point.

"They're Going Thermonuclear": Breitbart Declares "War" On The White House - The love affair between Breitbart, whose former head Steve Bannon was just fired by Donald Trump, just turned to hate, as confirmed by Joel Pollak, a Breitbart Editor, who moments ago tweeted one word:  #WAR  — Joel B. Pollak (@joelpollak) August 18, 2017  As Axios' Jonathan Swan explains, "Joel is a Breitbart editor. They're going thermonuclear, I'm told. "Joel is a Breitbart editor. They're going thermonuclear, I'm told. Story tk on Axios. — Jonathan Swan (@jonathanvswan) August 18, 2017

Bannon exit raises new questions for White House | TheHill: Steve Bannon’s days at the White House are over, but questions remain over how much influence — or chaos — he will cause from the outside. While the chief strategist’s ouster is a victory for new White House chief of staff John Kelly and his goal of eliminating leaks and bringing order to the West Wing, some believe Bannon could be an even more disruptive force for the Trump administration from the outside. Bannon returned to Breitbart News immediately after his departure. He had turned the news site into a right-wing juggernaut as chairman before joining the Trump campaign.“Steve’s allies in the populist-nationalist movement are ready to ride to the gates of hell with him against the West Wing Democrats and globalists like [deputy national security adviser] Dina Powell, Jared Kushner, Ivanka Trump, [economic adviser] Gary Cohn and [national security adviser] H.R. McMaster,” said one Bannon ally. “They should all be very worried that their efforts to undermine the president will be exposed,” the ally continued. “If they think what’s happened with Steve is rough, wait until they see what he does outside the White House.” One of Bannon’s friends called it his “Obi Wan Kenobi” moment, referencing the Jedi master from Star Wars who was felled by Darth Vader. “They will strike him down for him to become more powerful than they ever imagined,” the friend said. 

Steve Bannon is more dangerous outside the Trump White House than in it - Steve Bannon, the White House’s chief strategist, has left the Trump administration that he helped put into power, after losing long-running feuds with the president’s economic and security advisors. “We are grateful for his service,” said the White House press secretary in a statement, “and wish him the best.” They may wish him the best, but they should also fear the worst. Bannon was often portrayed as the puppet-master behind Trump, manipulating his boss into extreme positions on issues as wide-ranging as Islam, climate change, and trade. That portrayal has become less convincing as rivals in the White House gained the president’s favor, weakening Bannon but making no difference to Trump’s pugnacity. But leaving the White House does not make Bannon less powerful. If anything, becoming a free agent will make it easier for him to push his agenda. Ousting him unleashes a man who has championed white nationalism in America, has shown a thirst for revenge and a disregard for behavioral norms, and has a deep knowledge of the White House. Unfettered, he could undermine the Trump presidency, further radicalize and unify the disparate right-wing groups that helped bring Trump to power, and even expand hate-fueled nationalistic movements globally.

Breitbart editor: Conservatives will stick with Trump because of Pence | TheHill: Joel Pollak, a senior editor-at-large for Breitbart News, says conservatives are likely to stand behind President Trump as long as Vice President Pence is "on board." "I think the conservative base trusts Mike Pence more than almost anybody else in Washington," Pollak told MSNBC's Chuck Todd on Friday. "And so as long as he is part of the discussion, as long as he is on board and in the room and helping to make decisions, I think you'll see conservatives stick with this president," he declared. Pollak's prediction came hours after the departure from the White House of chief strategist Steve Bannon, the former executive chair of Breitbart who quickly rejoined the right-wing news outlet on Friday. Bannon, who joined Trump's presidential campaign last August as chief executive, was widely seen as a driving force behind the president's populist-nationalist agenda. But news of Bannon's departure on Friday stirred concern among Breitbart personnel, including Pollak, who tweeted "#WAR" shortly after. He later explained on CNBC's "Power Lunch" that he meant the news outlet would continue to fight for "the movement and the ideas that brought Trump to office." But he also voiced concern that Trump's campaign promises could be moderated in the absence of Bannon. "Whether he remains onboard with that agenda is now an open question with Steve Bannon's departure from the White House," Pollak said. 

Trump Is Just Six Senate Votes Away From Impeachment -- At some point in 2019 (if not sooner) a Republican Senator may walk into the Oval Office and say to President Trump: “Mr. President, we don’t have the votes,” at which point the Trump presidency will end in a resignation or a conviction in the Senate.This scenario actually occurred forty-three years ago this summer when Republican Senator Barry Goldwater walked into the Oval Office and told Republican President Richard Nixon that they didn’t have the votes in the Senate to save his presidency. Following impeachment in the House, a trial takes place in the Senate. Conviction requires two-thirds of the Senate and by my count there are already twelve senators who have shown a willingness to take on the president when they believe he is in the wrong.If you add that to the forty-eight Democrats in the Senate (who have shown no inclination to work with this President), Donald Trump could be six votes away from conviction in the Senate. Of course this assumes that the forces now in motion continue on their same trajectory and result in an impeachment vote. They are: the investigations into the Trump campaign; evidence of weakness in the Republican base ; historical trends indicating a possible Democratic takeover in the House; and, last but not least, defiance in the Senate. [1] This last trend should be particularly worrisome for the president. Article I of the Constitution gives them the last word on the presidency. And yet instead of making friends in the Senate, Trump has done exactly the opposite. After the Senate failed to pass his Obamacare replacement, Trump took to Twitter to denounce them as “fools” and “total quitters.”

Art of the Deal co-author predicts Donald Trump is about to resign -  'Trump's presidency is effectively over. Would be amazed if he survives till the end of the year. More likely resigns by fall if not sooner,' says Tony Schwartz.   The co-author of Donald Trump’s memoir The Art of the Deal has predicted the US President is going to resign by autumn if not sooner. Tony Schwartz, who claims to have ghostwritten the 1987 best-selling business book, argued Mr Trump is on the brink of stepping down and said he would be shocked if his presidency lasts until the end of the year. Mr Schwartz, who has been a vocal critic of President Trump and spent 18 months interviewing and shadowing him in the 1980's, suggested he would negotiate a deal for immunity in the Russia investigation in exchange for giving up his seat in the Oval Office. 18 years ago Trump said he would bomb North Korea if in this situation. He said: “The circle is closing at blinding speed. Trump is going to resign and declare victory before Mueller and Congress leave him no choice”. “Trump's presidency is effectively over. Would be amazed if he survives till the end of the year. More likely resigns by fall, if not sooner.” 

U.S. Has 3.5 Million More Registered Voters Than Live Adults - A Red Flag For Electoral Fraud -- According to a new study of U.S. Census data, America has more registered voters than actual live voters. It's a troubling fact that puts our nation's future in peril.The data come from Judicial Watch's Election Integrity Project. The group looked at data from 2011 to 2015 produced by the U.S. Census Bureau's American Community Survey, along with data from the federal Election Assistance Commission.As reported by the National Review's Deroy Murdock, who did some numbers-crunching of his own, "some 3.5 million more people are registered to vote in the U.S. than are alive among America's adult citizens. Such staggering inaccuracy is an engraved invitation to voter fraud." Murdock counted Judicial Watch's state-by-state tally and found that 462 U.S. counties had a registration rate exceeding 100% of all eligible voters. That's 3.552 million people, who Murdock calls "ghost voters." And how many people is that? There are 21 states that don't have that many people.

Lawmakers Raise Alarm Over U.S. Census Preparations, Leadership - Lawmakers are raising alarm over whether the 2020 U.S. Census will be complete and accurate due to a lack of funding and leadership.Thirty-two Democrats sent a letter on Tuesday to Commerce Secretary Wilbur Ross, whose department houses the Census Bureau, asking for the rapid appointment of a new bureau director and to ensure there’s enough money to complete the decennial survey.The results of the constitutionally mandated census are used to allocate seats in the U.S. House and direct spending for government programs. Businesses also use census data -- which includes detailed demographic information on age, race and income levels -- to make decisions about where to sell their products and open stores. “Lack of leadership, woeful underfunding, delayed testing of new technology, and new demographic challenges lead us to believe that significant action must be taken to get planning and preparation on track to ensure an accurate census count in 2020,” according to the letter signed by members of the House, including Carolyn Maloney of New York and Keith Ellison of Minnesota. The letter said there’s "no clear leadership" as it enters the "ramp up period" which starts two years before the 2020 decennial census.

Russia-gate's Fatally Flawed Logic -- There was always a logical flaw in pushing Russia-gate as an excuse for Hillary Clinton’s defeat – besides the fact that it was based on a dubious “assessment” by a small team of “hand-picked” U.S. intelligence analysts. The flaw was that it poked the thin-skinned Donald Trump over one of his few inclinations toward diplomacy.  We’re now seeing the results play out in a very dangerous way in Trump’s bluster about North Korea, which was included in an aggressive economic sanctions bill – along with Russia and Iran – that Congress passed nearly unanimously, without a single Democratic no vote. Democrats and Official Washington’s dominant neocons celebrated the bill as a vote of no-confidence in Trump’s presidency but it only constrained him in possible peacemaking, not war-making. As his “signing statements” made clear, Trump felt belittled by the congressional action. His response has been to ratchet up bellicose rhetoric about North Korea, bluster appearing to be his natural default position when under pressure. Remember, in April, as the Russia-gate hysteria mounted, Trump changed the subject, briefly, by rushing to judgment on an alleged chemical-weapons incident in Khan Sheikhoun, Syria, and firing off 59 Tomahawk missiles at a Syrian military base. He immediately won acclaim from Official Washington. What Trump learned from that experience is that even when he is going off half-cocked, he is rewarded for taking the military option.

Return Of The Leakers: Mueller Reportedly Focusing On Don Jr.'s "Intent" During Russia Meeting --Looks like the leakers are back from vacation...After a summer with only a handful of leaked “updates” about Special Counsel Robert Mueller’s investigation into purported collusion between the Russian government and Trump campaign, Buzzfeed is back with its first major investigation “scoop” since it published the phony “Russia dossier” late last year. The digital-media powerhouse is reporting that the Mueller investigation is focusing on Donald Trump Jr.’s intent when he organized the now notorious June 9 2016 meeting with Russian lawyer Natalia Veselnitskaya, citing “sources familiar with the investigation.” Emails released by Don Jr. showed that he assented to the meeting after being told that Veselnitskaya would provide him with damaging information about Hillary Clinton.Here’s Buzzfeed:“The source familiar with the investigation said that prosecutors have been trying to determine exactly what information was provided and are scrutinizing Trump Jr.’s statements about the meeting.Requesting or accepting anything of value for a presidential campaign from a foreign national violates federal election law, legal experts told BuzzFeed News.Trump Jr.'s attorney, Alan Futerfas, did not respond to calls or an email requesting comment.” Prosecutors are reportedly trying to determine Trump Jr.’s “mindset” when he set up the meeting.

Billionaire Ally of Putin Socialized With Kushner, Ivanka Trump  -- As federal investigators probe possible Kremlin links with the Donald Trump campaign, one connection that hasn’t gotten much attention is that between Jared Kushner and one of Russia’s most powerful and influential billionaires: Roman Abramovich.   The men have met three to four times in social settings, and their wives have been friends for a decade, facts that Kushner and Ivanka Trump revealed on their security-clearance forms to join the White House staff, according to a person familiar with the filings. The form, SF-86, asks applicants whether they have had “close and/or continuing contact with a foreign national within the last seven years with whom you, or your spouse or cohabitant are bound by affection, influence or common interests.”  In 2014, the Kushners spent four days in Russia at the invitation of Abramovich’s wife, Dasha Zhukova. The couples sat at the same table along with a few other people during a high-powered fundraising dinner for Moscow’s Jewish Museum. Kushner also was invested in an online art business of which Zhukova is a founding partner. Ivanka Trump, Kushner and his brother, Joshua, have accompanied Zhukova to sporting events in the New York area.Abramovich is the biggest shareholder of Evraz Plc, Russia’s second largest steelmaker, and the owner of London’s Chelsea Football Club. In 2005, he was the first oligarch permitted by the Kremlin to sell his oil company to a state firm. He took in $13 billion in the deal approved by President Vladimir Putin. “There’s no oligarch among those still accepted in the West who’s closer and more trusted by Putin than Abramovich,”

New Trump-Russia emails could be 'devastating' for Paul Manafort - The ongoing investigation into whether President Donald Trump's campaign colluded with Moscow during the 2016 election gained new traction on Monday when The Washington Post reported that a foreign-policy adviser, George Papadopolous, sent at least six emails during the campaign offering to set up meetings with Russian leaders. Papadopolous sent the first email to seven campaign advisers in March 2016 with the subject line "Meeting with Russian Leadership - Including Putin." His requests were reportedly met with hesitancy from multiple campaign officials, including retired Navy Rear Adm. Charles Kubic, who voiced concerns about violating both US sanctions on Russia and the Logan Act, a law forbidding US citizens from negotiating with foreign governments without authorization. Paul Manafort, Trump's campaign chairman and a current subject in the Russia investigation, also expressed concerns about the proposal and rejected Papadopoulos' request for a meeting between Trump and Russian officials in May 2016, according to The Post. Manafort's rejection stands in contrast to his willingness to accept a meeting with a Russian lawyer weeks later in June, a point that Renato Mariotti, a former federal prosecutor, raised after the story broke.  Mariotti wrote in a series of tweets that perhaps the most important implication of the news was that "everyone on those emails was aware of the concerns expressed in the emails about meeting with Russians, including Admiral Kubic's concern about the legality of meeting with Russia."  The meeting Manafort attended in June included Trump's son Donald Trump Jr. and his son-in-law and senior adviser, Jared Kushner. Also present were Natalia Veselnitskaya, a Russian lawyer with ties to the Kremlin; Rinat Akhmetshin, a Russian lobbyist and former Soviet military intelligence officer; Anatoli Samachornov, a translator; and Rob Goldstone, the British music publicist who arranged the meeting at the request of Aras and Emin Agalarov, a wealthy Russian family.

FBI Investigator Who Led Hillary Email Case Suddenly Resigns From Mueller's Team -- After being appointed to Special Counsel Mueller's team just over a month ago, ABC is now reporting that Peter Strzok, the FBI agent who oversaw the botched investigation of Hillary Clinton's email case, has now decided to step down.  ABC reports that their anonymous sources have yet to discover the reasons for Strzok's sudden departure.One of the FBI's top investigators, tapped by special counsel Robert Mueller just weeks ago to help lead the probe of Russian meddling in last year's presidential election, has left Mueller’s team, sources tell ABC News.The recent departure of FBI veteran Peter Strzok is the first known hitch in a secretive probe that by all public accounts is charging full-steam ahead. It's unclear why Strzok stepped away from Mueller's team of nearly two dozen lawyers, investigators and administrative staff. Strzok, who has spent much of his law enforcement career working counterintelligence cases and has been unanimously praised by government officials who spoke with ABC News, is now working for the FBI's human resources division. As The Daily Caller noted when Strzok was hired by Mueller last month, he is the same FBI agent who had the distinguished honor of interviewing Hillary Clinton just 3 days before she was cleared of all charged by former FBI Director James Comey.

What if the DNC Russian “hack” was really a leak after all? A new report raises questions media and Democrats would rather ignore --Last week the respected left-liberal magazine The Nation published an explosive article that details in great depth the findings of a new report — authored in large part by former U.S. intelligence officers — which claims to present forensic evidence that the Democratic National Committee was not hacked by the Russians in July 2016. Instead, the report alleges, the DNC suffered an insider leak, conducted in the Eastern time zone of the United States by someone with physical access to a DNC computer. This report also claims there is no apparent evidence that the hacker known as Guccifer 2.0 — supposedly based in Romania — hacked the DNC on behalf of the Russian government. There is also no evidence, the report’s authors say, that Guccifer handed documents over to WikiLeaks. Instead, the report says that the evidence and timeline of events suggests that Guccifer may have been conjured up in an attempt to deflect from the embarrassing information about Hillary Clinton’s presidential campaign that was released just before the Democratic National Convention. The investigators found that some of the “Guccifer” files had been deliberately altered by copying and pasting the text into a “Russianified” word-processing document with Russian-language settings. If all this is true, these findings would constitute a massive embarrassment for not only the DNC itself but the media, which has breathlessly pushed the Russian hacking narrative for an entire year, almost without question but with little solid evidence to back it up. You could easily be forgiven for not having heard about this latest development — because, perhaps to avoid potential embarrassment, the media has completely ignored it. Instead, to this point only a few right-wing sites have seen fit to publish follow-ups.  The original piece, authored by former Salon columnist Patrick Lawrence (also known as Patrick L. Smith) appeared in The Nation on Aug. 9. The findings it details are supported by a group of strongly credentialed and well-respected forensic investigators and former NSA and CIA officials. The silence from mainstream outlets on this is interesting, if for no other reason than the information appears in a highly-regarded liberal magazine with a reputation for vigorous and thorough reporting — not some right-wing fringe conspiracy outlet carrying water for Donald Trump.

Wasserman Schultz IT Staffer Indicted By Grand Jury On 4 Counts -- The walls may be closing in on Debbie Wasserman Schultz after her former IT aide, the one who was arrested by the FBI at Dulles airport last month while trying to flee the country to Pakistan via Qatar, has officially been indicted by a grand jury on four counts including bank fraud and making false statements. As Fox News points out, the charges include Awan's wife Hina Alvi and are tied to allegations that the pair conspired to make false statements on applications for home equity lines of credit and then sent the proceeds of those loans to individuals in Pakistan. Imran Awan, a former IT aide for Democratic Florida Rep. Debbie Wasserman Schultz, was indicted Thursday on four counts including bank fraud and making false statements. The grand jury decision in U.S. District Court for the District of Columbia comes roughly a month after Awan was arrested at Dulles airport in Virginia trying to board a plane to Pakistan, where his family is from.The indictment also includes his wife Hina Alvi.The indictment itself, which merely represents formal charges and is not a finding of guilt, addresses separate allegations that Awan and his wife engaged in a conspiracy to obtain home equity lines of credit from the Congressional Federal Credit Union by giving false information about two properties – and then sending the proceeds to individuals in Pakistan. So why is the real estate angle important?  As we noted previously, title companies, unlike individuals, can wire large sums of money to international bank accounts without arousing the suspicions of federal investigators. Title companies can wire large sums abroad without attracting the suspicion Imran did at the bank, and with Hina — the nominal sole owner of each of the houses — residing in that country, it would be natural to send the proceeds to her.The value of the known homes that have been sold since November or are currently being sold is $1.8 million. There is also the $283,000 January wire transfer from the Congressional bank, in addition to previous wires of unknown amounts that Imran’s lawyer acknowledged.

Financial Regulatory Rollback Proceeds -- Jerri-lynn Scofield -  During the presidential campaign, Trump called for outright rollback of the Dodd-Frank financial regulatory regime– without providing much in the way of details.  So far, he’s not achieved that objective– although the House of Representatives did comfortably pass the Financial Choice Act in early June. The measure is pending in the Senate– and is unlikely to displace  healthcare and tax reform from the top of the legislative agenda.Yet no new legislation is necessary for the administration to proceed with plans to loosen financial regulation in many key areas. Indeed, as Yves posted last week in Quelle Surprise! Financial Firm Fines Are Way Down Under Trump, there has been a major drop off in financial sector enforcement in the first six months of this year– and that against the rather pathetic benchmarks set by the previous administration:  The Wall Street Journal published a solid, well-researched article on how much various Federal financial regulators have levied in fines in the first half of 2017 versus the first half of 2016. The decline is so large, a full 2/3, that it demonstrates that the Trump business-friendly stance, and the large number of ex-Goldmanites on his team, is proving beneficial for large financial firms. Congress and the President have aggressively wielded the Congressional Review Act (CRA) to overturn regulations that have targeted  financial firms, most recently, in July, when the House voted to overturn the Consumer Financial Protection Bureau’s ban on mandatory arbitration clauses, as I discussed in House Votes to Overturn CFPB Mandatory Arbitration Ban. Such clauses require consumers to submit to mandatory arbitration to settle disputes and to forego their rights to pursue class action lawsuits.  CRA allows for use of streamlined procedures to overturn a regulation; crucially, if a CRA resolution of disapproval is passed and signed by the President (or if there are sufficient congressional votes to override a presidential veto of such a resolution), the agency is prevented from revisiting the subject of the overturned regulation until new statutory authority is provided. That means regulation in the area is indefinitely stymied– absent passage of new statutory authority.

Fiduciary Rule: Helps not Hurts Wall Street, So Full Rescission Unlikely -- Jerri-lynn Scofield - The Wall Street Journal reported last week in Who Is Winning With the Fiduciary Rule? Wall Street that the fiercely-resisted fiduciary rule has proven to be a boon thus far to Wall Street– contrary to the idea that its implementation would spell the end of Western civilisation as we know it: The brokerage business fiercely fought the new retirement advice rule. But so far for Wall Street, it has been a gift. The rule requires brokers to act in the best interests of retirement savers, rather than sell products that are merely suitable but could make brokers more money. Financial firms decried the restriction, which began to take effect in June, as limiting consumer choice while raising their compliance costs and potential liability.But adherence is proving a positive. Firms are pushing customers toward accounts that charge an annual fee on their assets, rather than commissions which can violate the rule, and such fee-based accounts have long been more lucrative for the industry. In earnings calls, executives are citing the Department of Labor rule, known varyingly as the DOL or fiduciary rule, as a boon. Now, taking my tongue out of my cheek for a moment.  As I’ve written before, it’s no surprise that implementation of the fiduciary rule had more or less proceeded as planned– despite Trumpian sturm und drang to the contrary– given that Wall Street firms had taken steps necessary to comply given the rule’s planned implementation date before Trump was elected as President (as I wrote in this February post, Fourth Federal District Court Looks Likely to Uphold Fiduciary Rule). Notwithstanding Trump’s February memorandum directing the Department of Labour to revisit the rule–especially given the dubious legal significance of that action–  firms were not going to roll back these arrangements. Yet now it turns out that the new rule actually helps, rather than hurts, the bottom line of financial firms.

Loans ‘ignored’ in Libor talks — so far - A special committee formed by the Federal Reserve to study potential Libor replacements has focused almost exclusively on how it will affect the derivatives market, with virtually no consideration of the loan market. “Loans have been the ignored stepchild in the process so far,” said David Duffee, a banking attorney at Mayer Brown, referring to the study conducted by the Alternative Reference Rates Committee. “The [ARRC] has really given short shrift to the lending market." Loans may become a bigger part of the conversation later this year, but the panel plans to leave a lot of the specifics up to lenders.

Setting the record straight on why leverage ratio must change - A recent op-ed on this blog by Paul Kupiec misstates the Clearing House’s criticism of the supplementary leverage ratio. Kupiec’s article indicates that the Clearing House’s position is contained in a recent article by Darrell Duffie, a professor at Stanford University. Although Professor Duffie’s article appeared in the Clearing House’s quarterly journal Banking Perspectives, his views were his own, and he received no compensation from the Clearing House. We will let Mr. Kupiec debate Dr. Duffie’s views with Dr. Duffie. As for us, the Clearing House’s arguments against the leverage ratio are explained in a Clearing House Research note, “Shortcomings of Leverage Ratio Requirements,” which has been available on our website for over a year. The leverage ratio’s core intractable problem is that it treats all bank assets as having the same level of risk, from deposits at the central bank and Treasury securities to leveraged loans, loans to small businesses and credit card loans. If the leverage ratio were simply a backstop that didn’t influence bank behavior, its poor design would be irrelevant for banks’ capital planning decisions. But as I explain below, it clearly is influencing banks’ behavior, and its flaws therefore have dangerous implications. In particular, the leverage ratio encourages banks to shift toward riskier assets, reduces the liquidity of financial markets, makes it more costly for banks to comply with liquidity requirements, drives intermediation into the shadow banking system, and interferes with monetary policy.

10 questions for Dallas Fed President Robert Kaplan -- American Banker — The breadth and pace of change across banking and the rest of the business world is rapidly escalating, posing challenges for financial institutions and the economy alike, according to Robert Kaplan, the president of the Federal Reserve Bank of Dallas. During a sit-down interview here, Kaplan, a former investment banker, academic and philanthropist who has written several books, said bankers are increasingly threatened by automation and consolidation. “Technology-enabled disruption, in my view, is accelerating and more pronounced and stronger than in any time in my life,” said Kaplan, who took the Fed job in 2015. “I've worked with businesses my entire career. Businesses or business models are being disrupted at a rate I haven't seen before, and business functions are increasingly being disrupted or were technology or technology-enabled approaches are replacing people.”  Kaplan also touched on banking regulation, the structure of the Federal Reserve, the role of philanthropic organizations, and his outlook on monetary policy. Following is an edited transcript of the interview:

Text of AP’s interview with NY Fed President William Dudley - WaPo — Below is the text of an interview The Associated Press conducted Monday with William Dudley, president of the Federal Reserve Bank of New York:

 Prudential is said to plot its escape from Fed oversight - Prudential Financial is laying the groundwork to escape the government's label that it's too big to fail, a move that would dramatically reduce federal oversight of the largest U.S. life insurer.Prudential is preparing to push a federal watchdog — the Financial Stability Oversight Council — to remove it from a list of nonbanks that regulators concluded would threaten the financial system if they collapsed, said two people familiar with the company's plans.With business-friendly officials appointed by President Donald Trump taking over the FSOC, the Newark, New Jersey-based company sees an opening, said the people, who asked not to be named because a final decision hasn't been made. And the Treasury Department is expected to release a report as soon as next month criticizing how the government has gone about designating companies such as Prudential, which could provide momentum for the insurer to get out.Another factor helping Prudential is rival MetLife Inc.'s legal victory last year overturning its label as a systemically important financial institution, or SIFI. The creation of the FSOC — and granting it power to flag companies as so big and interconnected that their failure could imperil the economy — was one of lawmakers' key responses to the 2008 financial crisis. But the council, which is led by the Treasury secretary, has been controversial from the start. Republican lawmakers say its decisions are opaque and arbitrary, while companies have griped over designations or had to sell businesses to exit the government's grip. Prudential quietly began its exit campaign as soon as Trump's Treasury secretary, Steven Mnuchin, arrived on the job in February, sending him a welcome letter contending that its status as a SIFI wasn't appropriate, the people said.

Banks can succeed without the Fed | American Banker --The recent wave of interest in cryptocurrencies testifies to there being support for alternatives to government fiat money. In addition to the relatively high-profile bitcoin and ethereum networks, there are now hundreds of lesser-known cryptocurrencies. However, notwithstanding the tsunami of interest, cryptocurrencies as money still operate in kind of a never-never land.  One reason cryptocurrencies are still somewhat obscure: the persistent dominance of central banks such as the Federal Reserve.  In the 21st century, most Americans — including most bankers — don’t give a second thought to the monopoly central banks enjoy in creating and controlling the flow of money, or the implications of their dominance. In most walks of life, it is taken for granted that competition produces superior results and adapts better to changing circumstances. In credit cards, cellphones and retail banking, to name some examples, a monopoly would not be tolerated.   And yet, despite evidence of superior economic results from private-sector management of money, Americans hold few if any public institutions in higher regard than the Fed. As the Cato Institute’s George Selgin argues convincingly in his book "Money Free and Unfree," this reverence is misplaced. Selgin presents a case for private monetary arrangements and market discipline rather than entrusting central banks with a money monopoly. In his introduction, the author argues that economists have bought into the notion, without real evidence, that “since World War II at least, the price level has become more predictable, output much more stable, and business contractions much less frequent and protracted, than was the case before 1913.” (The year the Fed was created.)  Selgin cites the banking success of other countries — namely Scotland and Canada — that favored private-sector management of money over central banks.

AIG shops $2 billion death benefits portfolio: sources (Reuters) - American International Group Inc wants to sell a $2 billion portfolio of life settlements that would pay out when sick or elderly customers die, two people familiar with the matter said. AIG, the largest commercial insurer in the United States and Canada, is working with investment bankers at Goldman Sachs Group Inc to unload the assets, said the sources, who were not authorized to discuss the negotiations publicly. Apollo Global Management LLC is looking at buying at least some of the policies, one of the sources said. Parties including Blackstone Group LP have purchased similar life settlements, or "death benefits" from AIG in previous transactions, the people said. AIG declined to comment on the potential sale, which pertains to old assets the insurer is trying to sell or wind down. However, AIG spokesman Kenneth Juarez said the company is committed to its core life insurance business. "We are making investments to grow it by collaborating with our distribution partners and strengthening our service platforms, resulting in increased sales," he said. "In the U.S., our total sales are at the highest level achieved since 2008." Large private equity firms like Apollo have carved out a niche business in acquiring death benefits, typically sold by terminally ill or elderly customers who need cash. Investors try to buy the policies at a price that is less than the payouts they would receive when the customers die. 

Unprotected: How the feds failed two Wells Fargo whistleblowers -- Six years before the Wells Fargo fake-accounts scandal broke, two retail bankers warned the federal government about the company’s branch sales practices. Yet instead of investigating the two employees’ complaints, the Occupational Safety and Health Administration discussed their allegations with the bank and did not interview the bankers themselves, who had sought protection under federal whistleblower laws. The mishandling of the two cases, detailed in documents and interviews with former OSHA officials, raises questions about the agency’s treatment of whistleblowers throughout the financial services industry. OSHA is the first stop for anyone seeking whistleblower protection under the Sarbanes-Oxley Act, but the agency has well-documented problems handling whistleblower cases. "OSHA really let these whistleblowers down," said Benjamin Edwards, an associate professor of law at the University of Nevada, who teaches whistleblower securities law. "If OSHA had done a diligent investigation, there's a good chance that Wells Fargo would not have spiraled so far out of control." Under the Sarbanes-Oxley Act, OSHA is supposed to protect whistleblowers from employer retaliation even if they turn out to be wrong. But with the two Wells Fargo whistleblowers, OSHA closed the cases in 2010 based on a conversation with the bank's lawyer — who was misidentified by OSHA in the final report as representing the whistleblowers. "There's multiple violations that deprived these two people of any opportunity for justice," said Darrell Whitman, the former investigator on their cases in the Department of Labor's Whistleblower Protection Program under OSHA. He added, "OSHA's withdrawal was improper and the case[s] should be reopened." 

Wells Fargo chairman, two directors to step down amid continuing fallout from sham accounts scandal - LA Times: Stephen Sanger, the chairman of Wells Fargo & Co., will step down from the board of the embattled bank effective Jan. 1 and will be replaced by former Federal Reserve official Elizabeth A. “Betsy” Duke, the bank announced Tuesday. Two other long-serving directors, Cynthia H. Milligan and Susan G. Swenson, also will retire at the end of this year. They’re the latest casualties in the bank’s long-running scandal over sham accounts, which has spurred a wide-ranging shake-up at the San Francisco financial giant. All three are among the company’s longest-tenured board members, with Milligan having served for a quarter of a century. The trio received only tepid support from shareholders at the company’s annual meeting in April, a sign of investors’ dissatisfaction with the board’s oversight of the bank amid an ever-growing list of misdeeds.In a statement Tuesday, Sanger said Duke “was the unanimous choice to lead the board as it continues its focus on strengthening oversight and rebuilding the trust of shareholders, customers, and other stakeholders.”Nearly a year ago, the bank reached a $185-million settlement with regulators, admitting it created as many as 2.1 million checking, savings and credit card accounts without customers’ knowledge. The bank’s practice of opening unauthorized accounts was first exposed by a 2013 Los Angeles Times investigation.The settlement led to public outcry, a bevy of related investigations by federal and state agencies, two bruising Capitol Hill hearings and the resignation of Chief Executive and Chairman John Stumpf in October. He was replaced as CEO by longtime Wells Fargo executive Tim Sloan, who remains on the bank’s board. Sanger, a longtime board member and former General Mills chief executive, was named chairman.

It's official: Elizabeth Duke is Wells Fargo's next chairman - Wells Fargo & Co. said Elizabeth “Betsy” Duke will take over as chair of its board of directors next year as Stephen Sanger and two other longtime directors retire following a sales scandal under their watch.  Juan Pujadas will join the board next month as an independent director and the bank changed leadership of some of its board committees, the San Francisco-based company said in a statement Tuesday.  Mary Jo White, the former head of the Securities and Exchange Commission, helped the board on its review. Duke, currently vice chairman, was a community bank executive and Fed governor before joining the Wells board nearly three years ago. She was rumored to be a likely contender for the chairman spot last week. Elizabeth Duke “was the unanimous choice to lead the board as it continues its focus on strengthening oversight and rebuilding the trust of shareholders, customers, and other stakeholders,” says departing chairman Stephen Sanger. Bloomberg NewsCalls for changes on the board intensified last month after the bank said 500,000 clients might have unwittingly paid for protection against vehicle loss or damage while making monthly loan payments, even though many drivers already had their own insurance policies. The disclosure follows a scandal last year in which the company acknowledged that it may have opened millions of unauthorized deposit and credit-card accounts. “Betsy was the unanimous choice to lead the board as it continues its focus on strengthening oversight and rebuilding the trust of shareholders, customers, and other stakeholders,” Sanger said in the statement.

The Fed Wants to Make Life Easier for Big-Bank Directors - NYT -  After a multiyear review, the Federal Reserve Board, the nation’s top financial regulator, concluded that excessive regulatory duties are hobbling bank boards and distracting directors from the more important work of guiding bank strategy and adopting effective governance at their institutions. And it proposed guidance to fix the problem. Intended to lighten a regulatory burden, the Fed’s idea could result in less information for directors about problems that government overseers have uncovered at an institution. And the reduced board involvement would give more leeway to bank executives to tackle regulatory flaws quickly — or not. As disclosures about fresh improprieties at Wells Fargo stream in, now seems an odd time to reduce communications between regulators and bank boards. In recent weeks, Wells has been forced to disclose that it pushed auto insurance on customers who did not need it, that it failed to refund insurance money owed to people who paid off their car loans early and that the number of fraudulent accounts created by its staff was likely to “significantly increase” from the 2.1 million that the bank had previously estimated.  The Fed is not the only government entity that thinks bank directors are under duress. A recent report from the Treasury Department said that regulators’ expectations of bank boards should be reformed “to restore balance in the relationship between regulators, boards and bank management.” The Fed’s recommendations are the result of work that predated the Trump administration, but they certainly dovetail with its broad deregulatory agenda. In 2014, Daniel K. Tarullo, a former Fed governor, outlined the need for change in this area. He resigned from the Fed in April. The new Fed guidance is emerging as bank directors say they are overwhelmed by minutiae in their jobs. They often blame heightened regulation required by the Dodd-Frank Act, the law that aimed to forestall a future financial crisis. Currently, its examiners report all regulatory matters requiring corrective action to a bank’s board as well as its senior management. So, under the proposed guidance, it will be up to senior management to keep the institution’s board apprised of its efforts and its progress to remediate matters requiring attention. Such matters would only be directed to the board for corrective action when senior management fails to take appropriate remedial action or when the board needs to address its corporate governance responsibilities, the Fed said.

Can banks afford to remain on the political sidelines? --It is hard to put aside one’s personal revulsion about the racially motivated clashes in Charlottesville, Va., and therefore to provide completely objective analysis about what this horrendous event means for banks. So I won’t even pretend to be objective. But I will try to be rational. In February, I wrote in this publication about the growing difficulty for banks to remain neutral on hot-button political issues: “Historically, banks have focused their political activity on those issues that directly impact the bank or the industry, and have avoided taking public positions on broader political or social issues. The reasons are straightforward. Most banks serve a broad, politically diverse customer base and have an equally diverse group of employees. As a result, most banks have tried to take a middle road on politically sensitive or controversial issues. However, that road is getting increasingly narrow and harder to navigate.”  The only thing that has changed fundamentally in the last six months is that the middle road has narrowed further and, in some cases, disappeared completely. The tragic event in Charlottesville is a glaring example of an issue that has no middle ground. There is no right or left, there is only right or wrong.

Block hate groups? It’s not so simple | American Banker — Financial companies are facing mounting pressure to identify and disrupt the financial operations of white supremacist and neo-Nazi groups in the wake of the violence at the Unite the Right rally in Charlottesville, Va., over the weekend.  But there are practical as well as legal limits to how much pressure institutions can bring to bear without federal leadership, according to experts.

 Data-sharing debate grows contentious as fintechs vent grievances - The Consumer Financial Data Rights group, representing aggregators and fintechs, says banks still aren’t forking over enough customer data. The group is meeting with bank regulators and trying to get consumers to petition regulators on its behalf.  Data aggregation companies and some fintech companies need consumers’ bank account data for their business models and products to work. The aggregators make money by collecting account data and streaming it to other companies, usually fintechs but sometimes banks as well. The data is gathered either through screen scraping (logging in to an online banking service using the customer’s username and password and copying and pasting the transaction information into a database) or through direct connections with the banks. Fintech companies, such as those that provide robo-advisers and personal financial management apps, also rely on this data to provide their services, and obtain it through data aggregators or their own screen-scraping or direct connection.  A recently formed group representing 31 data aggregators and fintech companies, called Consumer Financial Data Rights, says banks still aren’t forking over as much data as they should be. The group is meeting with bank regulators to plead their case and trying to get consumers to petition regulators on their behalf, urging them to send a Tweet that says, “.@CFPB protect Americans' ability to grant access to their financial information. #handsoffmyfinancialdata.” In November 2016, the CFPB launched an inquiry into the challenges consumers face in accessing, using and securely sharing their financial records.

Community banks stand to gain from blockchain — if they work together -- Blockchain is most widely known as the platform to house virtual currencies such as bitcoin, ethereum and litecoin. But the uses for blockchain are going well beyond virtual currencies. The Republic of Georgia, for example, voted in April 2016 to implement a land ownership registry that relies on blockchain to verify ownership of property. If the United States did something similar with blockchain, banks could close real estate loans more quickly. Think about a world where ownership interests in real estate can be verified immediately and with certainty. In this world, the expansive role of the title agent would essentially dissipate (or be greatly minimized), the time taken to verify title would be eliminated and, most important, the cost associated with confirming a title interest through title insurance would be dramatically reduced. All of these results would improve the closing process, both from an efficiency standpoint for banks and from a cost standpoint for the customer. Technologists are also using blockchain to try to replace our needlessly difficult residential mortgage loan origination processes so that the process, from application to closing, can be reduced from a few weeks to a few days. Blockchain can also serve banks in the realm of the Bank Secrecy Act — where a distributed ledger can allow banks to share information on a publicly accessible (yet secure) platform. True, gaining BSA efficiencies by using blockchain would involve a few more hurdles from a regulatory and collaboration standpoint. However, the upside of time and money saved would be significant.To realize these kinds of opportunities, community banks in a region should collaborate on strategies to bring blockchain into the banking industry.

Small banks’ fintech efforts held back by Volcker Rule --— The Dodd-Frank Act’s Volcker Rule was meant to protect the financial system by prohibiting banks from engaging in certain risky activities. But it may also be stopping community banks from being able to reap significant benefits from the fintech revolution.  “One of the unintended consequences of the Volcker Rule is that we can't invest in funds that make investments in fintechs,” said Tom Fraser, the president and CEO of the $1.6 billion-asset First Federal Lakewood in Ohio.

When altcoin life imitates art - Izabella Kaminska - A couple of weeks ago bitcoin, the decentralised cryptocurrency, experienced a splintering event in a bid to address its network capacity constraints. The event saw a rival version of Bitcoin spawned, now known as Bitcoin Cash, which is capable of handling many more transactions per minute than the original version of bitcoin.As of Monday, Bitcoin Cash was worth a collective $5bn or so on the market. (See latest prices by way of the Kraken market:) Unusually, rather than skim that value from the original currency — in a way that efficient market hypothesis would have predicted — the splintering led to an explosion in the price of the original. On Monday, to the delight of Bitcoiners everywhere, Bitcoin ‘originals’ were fetching in excess of $4200 per coin, a price rise of more than 28 per cent on the week. At this point, what serious investors would want to know is just how realisable these prices are in practice.And here’s the issue. It’s one thing to put a price on a fantasy asset and trade it within a close-knit community which believes all their fantasy assets are equally valuable. It’s an entirely different thing to see it hold that value in the real world. While it’s true that real-world trading against fiat currencies goes on in bitcoin, the Initial Coin Offering (ICO) frenzy has seen this pale into insignificance compared to trading against “alternative” cryptocurrency coins, where self-dictated valuations rule the roost. This, it should be obvious, is not a stable underpinning for any price explosion.

Bitcoin secessionists’ fate hinges on Chinese ‘miners’ The actual launch of Bitcoin Cash was executed by releasing new blockchain software from an open-source developer consortium called Bitcoin Unlimited, led by a U.S. scientist and other engineers supporting them. The first to provide practical support for the new currency was ViaBTC, a Chinese digital exchange.The Shenzhen startup was reportedly the first company to provide a mining resource for its customers (small miners) to successfully mine the Bitcoin Cash blockchain. The company had listed Bitcoin Cash as its trading currency on July 22, long before the official launch and much earlier than anyone else. On Aug. 1, Bitcoin Cash trading was most active at ViaBTC, compared with other cryptocurrency exchanges. "We simply provided an option to our users," said Haipo Yang, ViaBTC's founder and chief executive, denying his company "led" the split. He said several individual miners and major bitcoin-related service provider are also engaged in Bitcoin Cash mining. A few other miners he knows are waiting for the right time to start.nMiners use huge amounts of computing power and electricity to generate a new "block" of the blockchain. Their compensation? Newly issued coins. Roughly 70% of bitcoin mining resources are located in China. Apart from ViaBTC and its associates, many miners in China seem skeptical about Bitcoin Cash's long-term prospects. Some have called the spinoff "a currency version of a fake iPhone," like the ones often found at Beijing electronics stores.An executive of a major player with mining facilities in Sichuan and Inner Mongolia said his company will probably stay away from Bitcoin Cash, given the risk that an investment might return nothing. Failure to attract enough miners would slow the issuance of Bitcoin Cash and limit its circulation. This would cause consumers and investors to shun the currency, likely causing it to fade away.

Goldman’s foray into cryptocurrency -- Izabella Kaminska --Dan McCrum has the latest on Goldman Sach’s recent foray into investment advice on bitcoin. As he notes, they’re predicting the price will surge in a frenzy of speculation, before going on to halve — while simultaneously disclosing that the Goldman Sachs trading desk “may have a position in the products mentioned that is inconsistent with the views expressed in this material”.This, of course, follows exactly the pattern of events which led to the great commodities bubble. This too saw Goldman declare commodities an asset class suitable for passive investors and fund managers. Once the marketing material drumming up the bull case was dutifully and loudly distributed, Goldman (and its competitors) then worked hard to marry passive investor flows with an industry geared up for producing stock for idle speculative reasons rather than real consumption or utility. The bubble popped when supply caught up with over-investment and the scale of globally-hoarded commodities became obvious to the market. As soon as the rate of commodity appreciation failed to compensate for higher returns than less risky assets elsewhere, the opportunity costs for passive investors became too great. They pulled out, and commodity prices collapsed forthwith to levels that could be justified by fundamentals.

CFPB foes use well-worn consumer tactic against agency --Payday lenders and arbitration supporters are claiming the CFPB has met more often with consumer groups than industry, laying the groundwork for likely lawsuits on key rules — Consumer groups have long denounced the influence of big banks and for-profit companies on agency rulemakings, often pointing to the number of meetings held between regulators and institutions about a proposal. Now, in an ironic twist, payday lenders and supporters of mandatory arbitration are using the same tactic in accusing the Consumer Financial Protection Bureau of disproportionately favoring consumer groups at the expense of industry. House Republicans and payday lending groups are hoping to use so-called ex parte communications with consumer groups as a basis for an eventual lawsuit against the mandatory arbitration and small-dollar lending rules. (The mandatory arbitration rule was finalized in July, while the payday lending rule is expected to be released soon.)

 The Growing List of Money Managers Cutting Their Exposure to Junk Bonds - Investors overseeing about $1.1 trillion have been cutting exposure to the world’s riskiest corporate debt as rates grind too low to compensate for potential risks. Even after a selloff last week amid rising tensions between the U.S. and North Korea, a Bloomberg Barclays index of global junk bonds still yields 5.3 percent, 100 basis points below the average for the past five years. High-yield corporate debt has been one of the biggest beneficiaries of central stimulus, which has compressed spreads in better-quality bonds, forcing investors to seek returns elsewhere. The danger now is that higher Federal Reserve interest rates and the European Central Bank tapering will reverse the trend. Here’s the list of money managers who have recently cut holdings of junk debt:

Syndicated loans looking safer, with two notable exceptions  — Though credit risk for large syndicated loans fell in recent months, regulators remain worried about banks' involvement in leveraged credit and the oil and gas sector, according to a report released Wednesday by the federal banking regulators. The agencies' Shared National Credits program report, which looks at large credits shared by multiple banks, found that the ratio of commitments rated as an adverse risk dropped to 8.1% in the six months that ended March 31, from 11.1% in 2014. Despite the improvement, regulators noted, the overall risk level remains high.

Fed taper brings risk to mortgage bonds unseen in Treasuries -For all the talk that Janet Yellen’s plan to shrink the Federal Reserve’s balance sheet will hurt Treasuries, U.S. mortgage bonds face a bigger test. The securities are already lagging behind Treasuries for the first time since 2011. Investors are demanding 29 basis points of extra yield to buy the bonds instead of Treasuries, with the spread almost tripling from 2016’s low, Bloomberg data show. Firms including Allianz Investment Management and Federated Investors say the spread widening probably isn’t over. “The market will be able to digest it, but you’ll need a higher yield to make buyers buy it,” said Marc Fovinci, head of fixed income at Ferguson Wellman Capital Management Inc. in Portland, Ore., which handles $4.8 billion. “The pace Yellen is talking about, it won’t be like flipping the light switch off. It’ll be like turning the dimmer switch down" on investor demand. The spread will probably double in a year, Fovinci said. The Fed owns more than a quarter of the $6.86 trillion in agency mortgage-backed securities, and its holdings are likely to dwindle to almost nothing at some point because it only bought the securities as an emergency measure to prop up U.S. housing in the last recession. The Fed holds 18% of the publicly traded Treasuries market, and it’s likely to ultimately keep more of those holdings as part of its monetary policy arsenal. The Fed’s effort to trim its balance sheet will mark the beginning of the end to its historic effort to gobble up mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae, concluding a program that created money for these companies to funnel into U.S. home lending.

Bank buyers are afraid to load up on CRE, right? Wrong. - Lenders say they are eager to reduce their exposure to CRE, but an examination of recent deals shows just how hard that can be.  Regulators have repeatedly raised red flags about banks carrying too heavy a load of commercial real estate loans, yet the warnings have not altered merger patterns as expected. Lenders are advised to keep their ratio of CRE loans (excluding credits tied to owner-occupied properties) to total risk-based capital below 300%. Exceeding that threshold is not forbidden, but doing so will draw a sharp eye from federal regulators

CFPB pushes Zillow to settle on RESPA violations - The Consumer Financial Protection Bureau concluded its investigation into whether or not Zillow violated Section 8 of the Real Estate Settlement Procedures Act and Section 1036 of the Consumer Financial Protection Act. Zillow gave an update on the investigation during its earnings call on Tuesday, revealing the CFPB wants to discuss a settlement with Zillow. According to the earnings release, “Based on correspondence from the CFPB in August 2017, we understand that it has concluded its investigation. The CFPB has invited us to discuss a possible settlement and indicated that it intends to pursue further action if those discussions do not result in a settlement.” During the call, Kathleen Philips, Zillow chief financial officer, answered a question on the exact timing of the decision, saying, “We expect things to move quickly.” Philips added that she is actually about to head to Washington, D.C. in order to work with the bureau on a settlement and thinks that it will be a fast process. However, Zillow noted that a settlement is not guaranteed. Philips stated that if it does turn into a regular legal procedure, the resolution would take more time. Despite the CFPB’s conclusions in the investigation, Zillow still stands by its real estate practices. As noted in its first-quarter earnings call, Zillow said, “We continue to believe that our acts and practices are lawful and that our co-marketing program allows lenders and agents to comply with RESPA, and we will vigorously defend against any allegations to the contrary.”

HUD in limbo: Top jobs unconfirmed, key decisions unmade -- The Department of Housing and Urban Development is facing a leadership crisis as top jobs go unfilled, leaving key decisions unresolved.  — When Pam Patenaude was nominated by President Trump as the No. 2 at the Department of Housing and Urban Development, she was supposed to help make up for the inexperience of the leader of the agency, the retired neurosurgeon Ben Carson.  But four months later, Patenaude’s nomination remains in limbo, as does that of Paul Compton, the pick to be the department’s general counsel.

FHFA: HARP extended through 2018 -- The government’s Home Affordable Refinance Program was all set to end next month, September 30, to be exact, but that’s not the case anymore. The Federal Housing Finance Agency announced Thursday that it is extending HARP through Dec. 31, 2018, adding an additional 15 months onto the program’s already extended lifespan. In June 2014, then-Department of the Treasury Secretary Jacob Lew announced a series of initiatives designed to spur the flailing housing market, including the extension of the Home Affordable Modification Program until Dec. 31, 2016. Later, in May 2015, the FHFA announced that the deadline that it was extending the deadline for HARP to the end of 2016 as well, matching the deadline of the HAMP. But just about one year ago, the FHFA again announced that that it was delaying the end of HARP, this time until Sept. 30, 2017. At the time, the FHFA said that it was extending the crisis-era refinance program until Sept. 30, 2017 in order to “create a bridge” to a new refinance product it was planning to launch in October 2017. The program will see Fannie Mae and Freddie Mac implement a new streamlined refinance offering aimed at borrowers with high loan-to-value ratios. The FHFA said Thursday that the new high-LTV refinance program is still set to launch in October, but the program is being modified slightly, which necessitates extending the HARP deadline through all of 2018. Specifically, the FHFA said Thursday that it is establishing an eligibility date that makes the new refinance program available for loans originated on or after Oct. 1, 2017.  The FHFA said that the choosing that eligibility date was “necessary to preserve the objectives of the Enterprises' credit risk transfer program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017.” Under the new changes, the GSEs will “modify the structure of future risk-sharing transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid,” the FHFA said. According to the FHFA, this change “will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.”

New York Fed chief Dudley has an idea — homeowners should tap into equity - New York Fed President William Dudley on Tuesday encouraged homeowners to find “prudent” ways to tap into the equity that has built up in the homes, saying the boost in consumption would be a welcome shot-in-the-arm to the economy.The shape of household finances was a hidden strength of the economy, he said.“The good news is that, while the current expansion is quite old in chronological terms, it is still relatively young in terms of the health of household finances,” Dudley said in a speech to the National Retail Federation.“Whatever the timing, a return to a reasonable pattern of home equity extraction would be a positive development for retailers, and would provide a boost to economic growth,” Dudley said.Homeowners may have overlearned the lessons from the housing boom and bust, the New York Fed [resident said.Even though home values have risen over 40% since 2012, housing debt has stayed virtually flat, he said. “The previous behavior of using housing debt to finance other kinds of consumption seems to have completely disappeared,” and people are leaving the wealth generated by rising home prices “locked up” in their homes, he said.In his speech, Dudley said economic conditions, especially prices, did not seem to warrant an aggressive response from the U.S. central bank. “While economic shocks are, by their very nature, difficult to forecast, the risk that the Fed will snuff out the expansion anytime soon seems quite low because inflation is simply not a problem,” Dudley said.

The trouble with tax-lien lending - Mortgage holders could see their security interest wiped out if a borrower in Texas or Nevada gets a property tax loan where the lien has priority over the first mortgage. Property tax lending is a high-interest-rate, multibillion-dollar business that increasingly targets lower-income families and families in financial distress, and it's a growing concern for mortgage holders. This business sprung up in Texas in the 1990s, taking advantage of a Depression-era state law that allows a third party (originally, a family member) to pay off a homeowner’s property taxes with the homeowner’s consent. The tax lien is transferred to that party to protect their interest.  The law was never intended to create a new industry, but that is what it did. This business is only legal in two states, Texas and Nevada, and for good reason. It does unimaginable financial harm to people who are least able to absorb financial losses, and who especially cannot afford to lose their homes. Many states currently allow local governments to sell delinquent property tax debt or tax liens to companies or private investors, which can then collect the debt, plus interest and other fees. The new lending model created in Texas and adopted by Nevada is a different creature. In those states, homeowners are empowered to enter into loan agreements and create a contract that assigns the rights to their home to that lender, all without notifying their mortgage holder.Property tax lenders, unlike mortgage lenders, are not required to assess the borrower’s ability to repay. If the property is worth more than the taxes, these lenders might not even care that borrowers cannot afford the loan because the lender is able to foreclose on the home in the event the loan is not repaid. With the additional fees property tax lenders are able to charge for the foreclosure process, they make even more money on the loan than if it was paid in a timely manner. And they are paid first by auction proceeds, even before the first mortgage holder is made whole.

Cleveland Now Leads U.S. Cities for Seriously Underwater Homes - The Las Vegas metropolitan area, which led the nation with the biggest share of seriously underwater homes after the housing crash, has been overtaken by Cleveland. The share of homeowners in the Nevada city whose loans are higher than the property’s market value by 25 percent or more fell to 20 percent in the second quarter from 55 percent four years earlier, according to figures released Thursday by ATTOM Data Solutions. Cleveland’s share was 22 percent, down from 39 percent in the second quarter of 2013, when the research company began tracking the data. Home prices in Vegas, which has a lower unemployment rate than Cleveland, have jumped 53 percent over the past four years, compared with a 17 percent increase for the Cleveland area, according to ATTOM. “The underlying economic and demographic fundamentals being stronger in Las Vegas will mean the seriously underwater rate will continue to go down at a faster and steadier pace than what we see in Cleveland,” said Daren Blomquist, senior vice president at the firm. 

S&P/Experian: Mortgage default rate at lowest level in a decade -- Despite a slight increase in July, the default rate for first mortgage loans still sits at its lowest point in the last 10 years, according to the latest S&P/Experian Consumer Credit Default Indices. In fact, the mortgage default rate for first and second mortgages aren’t too far off from their July 2016 level, as homebuyers get better at paying their mortgage on time.  The indices represent a comprehensive measure of changes in consumer credit defaults and include bank card and auto loan default rates. As seen in the chart below, the first mortgage default rate increased two basis points from June to 0.62%. This second chart gives a broader picture and shows the changes in default rates over the last ten years. “Default rates for autos and first mortgage loans are at their lowest points in the last ten years, while bank card defaults remain modest,” says David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices.”“Consumers’ use of credit is growing and the level of consumer credit outstanding is at an all-time high. In the year ending June 2017, consumer credit outstanding rose 5.7%, outpacing most spending categories across the economy,” he said. “However, retail sales excluding autos as well as auto sales are down slightly since April, while home sales are little changed in recent months.The report also spotlights the consumer default composite indices for five major cities, shown in the chart below.  New York witnessed the largest decrease, falling six basis points from June to 0.82%.

MBA: Mortgage Applications Increase Slightly in Latest Weekly Survey --From the MBA: Mortgage Applications Slightly Increase in Latest MBA Weekly Survey: Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 11, 2017. .. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 10 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 its lowest level since November 2016, 4.12 percent, from 4.14 percent, with points remaining unchanged at 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans

Economic uncertainty pushes mortgage rates lower - Mortgage rates continued to move lower as a result of economic uncertainty, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 3.89% for the week ending Aug. 17, down from last week, when it averaged 3.9%. A year ago at this time the 30-year fixed-rate mortgage averaged 3.43%. That puts the 30-year fixed just 1 basis point above the low for 2017 logged in early June.

Mortgage Rates Fall below 4%, Lowest since November 2016 -- From Matthew Graham at Mortgage News Daily: Trump Administration Drama Pushing Rates Even Lower Mortgage rates fell yesterday in response to a tweet about Trump disbanding his councils of CEOs.  Twitter was in play again today.  This time around it was Gary Cohn, Trump's economic advisor.  Rather, it was rumors of Cohn's departure that sent financial markets into a tail-spin.  Terror attacks in Spain may have played a supporting role.  The net effect was heavy losses for stocks and solid gains for bonds.  When bonds improve, rates fall. Mortgage lenders continue to be slow to pass along the gains in bond markets in general, but they're certainly passing them along.  Multiple lenders issued positive reprices in the afternoon as bond markets rallied.  Conventional 30yr fixed rates are increasingly being quoted at 3.875% as opposed to 4.0% on top tier scenarios.  On average, rates are the lowest since November 2017--something we've been able to say for the 2nd straight day, and several times over the past few weeks.

Housing Bubble 2.0: Number Of Homebuyers Putting Less Than 10% Down Soars To 7-Year High -- A really long, long time ago, well before most of today's wall street analysts made it through puberty, the entire international financial system almost collapsed courtesy of a mortgage lending bubble that allowed anyone with a pulse to finance over 100% of a home's purchase price...with pretty much no questions asked.And while the millennial titans of high finance today may consider a decade-old case study on mortgage finance to be about as useful as a Mark Twain novel when it comes to underwriting mortgage risk, they may want to considered at least taking a look at the ancient finance scrolls from 2009 before gleefully repeating the sins of their forefathers. Alas, it may be too late.  As Black Knight Financial Services points out, down payments, the very thing that is supposed to deter rampant housing speculation by forcing buyers to have 'skin in the game', are once again disappearing from the mortgage market.  In fact, just in the last 12 months, 1.5 million borrowers have purchased a home with less than 10% down, a 7-year high.

  • - Over the past 12 months, 1.5M borrowers have purchased a home by putting down less than 10 percent, which is close to a seven-year high in low down payment purchase volumes
  • - The increase is primarily a function of the overall growth in purchase lending, but, after nearly four consecutive years of declines, low down payment loans have ticked upwards in market share over the past 18 months
  • - Looking back historically, we see that half of all low down payment lending (less than 10 percent down) in 2005-2006 involved piggyback second liens rather
    than a single high LTV first lien mortgage
  • - The low down payment market share actually rose through 2010 as the GSEs and portfolio lenders pulled back, the PLS market dried up, and FHA lending buoyed
    the purchase market as a whole
  • - The FHA/VA share of purchase lending rose from less than 10 percent during 2005-2006 to nearly 50 percent in 2010

State law to combat 'zombie' homes lacks effective enforcement -- A new state law meant to combat the blight of "zombie" homes across New York lacks effective enforcement to hold banks accountable for actually maintaining the properties on Staten Island.The law requires banks and mortgage providers to maintain vacant and abandoned properties they have notes on or risk a $500 daily penalty — even before foreclosure proceedings are over and they officially own the deed.At least 500 properties on Staten Island are covered by the regulations, out of roughly 2,300 in all five boroughs and 20,000 across New York State, officials said.But the state doesn't send anyone to inspect these properties, relying instead on self-reporting and photos from financial institutions and information from municipalities like the city of New York.The state's Department of Financial Services hasn't issued a single penalty against a bank or mortgage provider for failure to maintain and secure a property, more than a year after the law requiring this upkeep was signed and eight months after it went into effect.   The law was intended to prevent foreclosures and lessen the impact of neglected and abandoned properties on communities across the state. So-called zombie homes are typically in foreclosure, though others that aren't covered by this law may be left vacant and in disrepair by landlords and other private owners or family estates. Neighbors say zombie homes risk public health and safety, decrease home values and worsen quality of life.

Kushner screws Brooklyn tenants out of rent-stabilized leases: suit - NY Daily News: Jared Kushner's real estate company systematically screwed some Brooklyn tenants out of rent-stabilized leases, a new lawsuit charged Tuesday. The suit, filed by the Housing Rights Initiative in Brooklyn Supreme Court, revolves around a 48-unit rent-stabilized building at 89 Hicks St. bought by Kushner Companies in 2014. The building had served as student housing for Brooklyn Law School and was exempt from rent stabilization laws. But once Kushner Companies purchased the building and began renting apartments as residential units, they should have been re-registered as rent-stabilized, the suit claims. The company ignored that requirement, papers charge. In 2014, Kushner registered only five units as rent stabilized. As of 2017, no apartments are listed as stabilized, according to papers. "All of those apartments should still be affordable," said Aaron Carr, the founder of the Housing Rights Initiative. "We have never seen a scheme as blatant, willful, and egregious as this one."The suit alleges that Kushner Companies also failed to notify the state that it was offering market-rate leases instead of rent-stabilized ones. The class action suit was filed by nine current and former tenants of the building. Over 100 tenants could have claims against the real estate company, Carr said. 

New York City Guarantees a Lawyer to Every Resident Facing Eviction -- On Friday, New York City Mayor Bill de Blasio signed into law an act that guarantees legal representation to any low-income resident facing eviction. This is the first law in the nation to establish a right to counsel in housing cases, the culmination of a push by activists and organizers that started in 2014.The law promises legal representation to any resident facing eviction whose income is 200 percent of the federal poverty level or less. The act could transform housing court in New York, where landlords appear with counsel in more than 90 percent of cases. Until 2014, tenants were represented in just 1 to 10 percent of cases. “When you have that kind of imbalance, not occasionally but almost guaranteed in every case, it starts to change the entire way that the court works and the entire way that the justice system works,” says John Pollock, coordinator for the National Coalition of the Civil Right to Counsel. “Cases are disposed of quickly. There’s not really any due process.”Often, tenants have defenses to eviction lawyers would raise that could stop or at least postpone an eviction, such as improper notice or neglected repairs.Fewer illegal evictions also means fewer households experiencing transitional homelessness, a crisis on the rise in America. That means reducing suffering for families but also limiting a substantial burden carried by cities. The coalition predicts an overall savings of $320 million per year, well above the program’s costs. Even in cases where an eviction is warranted, legal representation can make the process less painful and interruptive.

Housing Starts decreased to 1.155 Million Annual Rate in July - From the Census Bureau: Permits, Starts and Completions Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000. This is 4.8 percent below the revised June estimate of 1,213,000 and is 5.6 percent below the July 2016 rate of 1,223,000. Single-family housing starts in July were at a rate of 856,000; this is 0.5 percent below the revised June figure of 860,000. The July rate for units in buildings with five units or more was 287,000. Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent below the revised June rate of 1,275,000, but is 4.1 percent above the July 2016 rate of 1,175,000. Single-family authorizations in July were at a rate of 811,000; this is unchanged from the revised June figure of 811,000. Authorizations of units in buildings with five units or more were at a rate of 377,000 in July. The first graph shows single and multi-family housing starts for the last several years. Multi-family starts (red, 2+ units) decreased in July compared to June.  Multi-family starts are down 35% year-over-year. Multi-family is volatile month-to-month, but has been mostly moving sideways over the last few years.  Single-family starts (blue) increased in July, and are up 10.9% year-over-year.  The second graph shows total and single unit starts since 1968.   The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically low), Total housing starts in July were below expectations, however starts for May and June combined were revised up slightly.  

New Residential Building Permits: July Slips -  The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for July new residential building permits. The latest reading of 1.223M was a decrease from a revised 1.275M in June and below the forecast of 1.250M. Here is the opening of this morning's monthly report:  Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,223,000. This is 4.1 percent (±0.9 percent) below the revised June rate of 1,275,000, but is 4.1 percent (±1.8 percent) above the July 2016 rate of 1,175,000. Single-family authorizations in July were at a rate of 811,000; this is unchanged from the revised June figure of 811,000. Authorizations of units in buildings with five units or more were at a rate of 377,000 in July. Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,155,000. This is 4.8 percent (±10.2 percent)* below the revised June estimate of 1,213,000 and is 5.6 percent (±8.5 percent)* below the July 2016 rate of 1,223,000. Single-family housing starts in July were at a rate of 856,000; this is 0.5 percent (±8.5 percent)* below the revised June figure of 860,000. The July rate for units in buildings with five units or more was 287,000. [link to reportHere is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.

Housing Starts Unexpectedly Sink, Multi-Family in Huge 34% Retreat Year-Over-Year - Construction spending for the second quarter is off to a slow start as judged by housing starts. The Econoday consensus was for a 1% rise. Instead, starts declined nearly 5% from the initial June report, now revised lower. Mortgage News Daily reports Construction Indicators Slide, Housing Starts Suffer.After posting unexpectedly high numbers in June, all three residential construction indicators lost ground in July, and one, housing starts, is now running below its year-ago rate. While the softening is primarily in the multi-family sector, starts have declined in four of the last five months and permits in three of the last four.The U.S. Census Bureau and the Department of Housing and Urban Development said privately owned housing starts were at a seasonally adjusted annual rate of 1,155,000 units, a 4.8 percent decline from June’s estimate of 1,213,000, which was revised down from 1,215,000. July starts were down 5.6 percent from the 1,223,000-unit annual rate in July 2016.Starts failed to meet even the lowest predictions of analysts polled by Econoday. Their estimates ranged from 1.174 million to 1.250 million with a consensus of 1.225 million.Single family starts were at a rate of 856,000, down 0.5 percent from a month earlier but 10.9 percent higher than the same month in 2016. Multifamily starts plunged 17.1 percent to 287,000 units and are down 35.2 percent year-over-year.The performance of permits was like that of housing starts, down 4.1 percent to a seasonally adjusted annual rate of 1,223,000 units. Permits however held on to an annual increase of 4.1 percent. The June permitting rate was revised higher, from 1,254,000 to 1,275,000.Analysts had expected permits to decline, with a consensus estimate of 1.246 units. Here again the drop was outside the low end of the range of 1.230 to 1.270 million units.Authorizations for single-family homes were at a seasonally adjusted rate of 811,000, unchanged from June and 13.0 percent higher on an annual basis. Multi-family permits were 12.1 percent lower than the previous month at 377,000. This was down 11.7 percent year-over-year.

Comments on July Housing Starts -- Bill Mcbride - The housing starts report released this morning showed starts were down 4.8% in July compared to June, and were down 5.6% year-over-year compared to July 2016.  This was a weak report and was below the consensus forecast. Note that multi-family starts are volatile month-to-month, and has seen wild swings over the last year. This first graph shows the month to month comparison between 2016 (blue) and 2017 (red). Starts were down 4.8% in July 2017 compared to July 2016, and starts are up only 2.4% year-to-date. Note that single family starts are up 8.6% year-to-date, and the weakness (as expected) has been in multi-family starts.My guess is starts will increase around 3% to 7% in 2017.Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). These graphs use a 12 month rolling total for NSA starts and completions.  The blue line is for multifamily starts and the red line is for multifamily completions.  The rolling 12 month total for starts (blue line) increased steadily over the last few years - but has turned down recently.  Completions (red line) have lagged behind - but completions have been catching up (more deliveries).  The second graph shows single family starts and completions. It usually only takes about 6 months between starting a single family home and completion - so the lines are much closer. The blue line is for single family starts and the red line is for single family completions. Note the exceptionally low level of single family starts and completions.  The "wide bottom" was what I was forecasting following the recession, and now I expect a few years of increasing single family starts and completions.

 NAHB: Builder Confidence increased to 68 in August --The National Association of Home Builders (NAHB) reported the housing market index (HMI) was at 68 in August, up from 64 in July. Any number above 50 indicates that more builders view sales conditions as good than poor.From NAHB: Builder Confidence Springs Back with Four-Point August Jump Builder confidence in the market for newly-built single-family homes rose four points in August to a level of 68 on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI).    “The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market,” said NAHB Chief Economist Robert Dietz. “GDP growth improved in the second quarter, which helped sustain housing demand. However, builders continue to face supply-side challenges, such as lot and labor shortages and rising building material costs.” ..  All three HMI components posted gains in August. The component gauging current sales conditions rose four points to 74 while the index charting sales expectations in the next six months jumped five points to 78. Meanwhile, the component measuring buyer traffic increased a single point to 49. Looking at the three-month moving averages for regional HMI scores, the Northeast rose one point to 48. The West, South and Midwest all remained unchanged at 75, 67 and 66, respectively.

Just Released: More Credit Cards, Higher Limits, and an uptick in delinquency - NY Fed - Today the New York Fed’s Center for Microeconomic Data released its Quarterly Report on Household Debt and Credit for the second quarter of 2017. Overall debt balances increased in the period, continuing their moderate growth since 2013. Nearly all types of balances grew, with mortgages and auto loans rising by $64 billion and $23 billion, respectively. Credit card balances increased by $20 billion, recovering from the typical seasonal first-quarter decline. The overall balance surpassed its previous peak in the first quarter. We wrote here about how the new peak poses little concern in and of itself—after all, the debt’s composition and characteristics are now very different than in 2008. There are, however, aspects of the household balance sheet that warrant close monitoring. For example, last year, we pointed out that there had been a moderate rise in the number of credit cards issued to nonprime borrowers. Separately, last quarter we noted an uptick in delinquency transitions for credit card balances, and we observed another climb in this quarter. So here, we further investigate how credit card balances, accounts, and delinquencies have evolved over the past year. The chart below depicts card issuance and account closure, by credit score band. On net (new accounts minus closed accounts) there’s been an increase in credit card accounts, a trend observed since the sharp decline prompted by the Card Act in 2009. Disaggregated by type of borrower, new accounts issued to nonprime borrowers (with scores below 660) were flat in 2016 after increasing the previous two years. So while overall issuance continued to increase this year, that’s due to more cards being issued to prime borrowers with credit scores over 660.

Household Debt And Credit Report: Up $114B in Q2 -- As a result of the housing and mortgage crisis of the Great Recession, economists have been paying more attention to the liabilities portion of household balance sheets. Among the New York Federal Reserve Board's many economic reports is the Household Debt and Credit report, which is released quarterly with data going back to 2003. Data is collected through the NY Fed's Consumer Credit Panel which is constructed from a nationally representative random sample of Equifax credit report data resulting in a sample size of over 40 million individuals quarterly. Here is some background on the report from the NY Fed:The large increases in consumer debt and defaults—of mortgage debt in particular—during the Great Recession highlighted the importance of understanding the liabilities reflected on household balance sheets. To that end, one of the CMD’s large data collection projects is the New York Fed Consumer Credit Panel, which is constructed from a nationally representative random sample of Equifax credit report data. Analysis of this data set is regularly reported in the CMD’s Quarterly Report on Household Debt and Credit. The data set can be used to calculate national and regional aggregate measures of individual- and household-level credit balances, and delinquencies by product type. The Consumer Credit Panel also provides new insights into the extent and nature of heterogeneity of debt and delinquencies across individuals and households.The latest household debt for Q2 2017 was up 0.9% from Q1 and currently at $12.84T, exceeding the 2008 Q3 peak of $12.68T. Here is an excerpt from the latest press release: The Federal Reserve Bank of New York today issued its Quarterly Report on Household Debt and Credit,which reported that total household debt increased by $114 billion (0.9%) to $12.84 trillion in the second quarter of 2017. There were modest increases in mortgage, auto and credit card debt (increasing by 0.7%, 2% and 2.6% respectively), no change to student loan debt and a modest decline in balances on home equity lines of credit (decreasing by 0.9%). The Report is based on data from the New York Fed's Consumer Credit Panel, a nationally representative sample of individual- and household-level debt and credit records drawn from anonymized Equifax credit data. Read more.  The chart below shows total debt balance nation-wide by composition in trillions of dollars. The current total is $12.84T, well exceeding the 2008 peak. Notice that even though the current Total Household Debt is greater than it's 2008 high, mortgage debt is still currently lower than during the recession.

NY Fed: "Household Borrowing Grows Modestly; Credit Card Delinquencies Rise" -- From the NY Fed: Household Borrowing Grows Modestly; Credit Card Delinquencies Rise The CMD’s latest Quarterly Report on Household Debt and Credit reveals that total household debt rose by $114 billion (0.9 percent) to $12.84 trillion in the second quarter of 2017. There were modest increases in mortgage, auto, and credit card debt (increasing by 0.7 percent, 2 percent, and 2.6 percent respectively), no change to student loan debt, and a decline in home equity lines of credit (which fell by 0.9 percent). Flows of credit card balances into both early and serious delinquencies climbed for the third straight quarter—a trend not seen since 2009. Here are two graphs from the report: The first graph shows aggregate consumer debt increased in Q2.  Household debt previously peaked in 2008, and bottomed in Q2 2013. From the NY Fed:Aggregate household debt balances increased in the second quarter of 2017, for the 12th consecutive quarter, and are now $164 billion higher than the previous (2008Q3) peak of $12.68 trillion. As of June 30, 2017, total household indebtedness was $12.84 trillion, a $114 billion (0.9%) increase from the first quarter of 2017. Overall household debt is now 15.1% above the 2013Q2 trough. Mortgage balances, the largest component of household debt, increased again during the first quarter. Mortgage balances shown on consumer credit reports on June 30 stood at $8.69 trillion, an increase of $64 billion from the first quarter of 2017. Balances on home equity lines of credit (HELOC) were roughly flat, and now stand at $452 billion. Non-housing balances were up in the second quarter. Auto loans grew by $23 billion and credit card balances increased by $20 billion, while student loan balances were roughly flat.   The second graph shows the percent of debt in delinquency. There is still a larger than normal percent of debt 90+ days delinquent (Yellow, orange and red).

Americans have once again taken on record debt loads -- After deleveraging in the aftermath of the last U.S. recession, Americans once again have taken on record debt loads that risk holding back the world's largest economy.Household debt outstanding -- everything from mortgages to credit cards to car loans -- reached $12.7 trillion in the first quarter, surpassing the previous peak in 2008 before the effects of the housing market collapse took its toll, Federal Reserve Bank of New York data show. To put the borrowing in perspective, it's more than the size of China's economy or almost four times that of Germany's.People are borrowing more not necessarily because they're confident about their financial prospects. They're doing it for necessities like education or transportation and, in many cases, just to get by.On the surface, liabilities at an all-time high aren't alarming when the assets side of ledger is taken into account. Household net worth stands at a record $94.8 trillion, thanks to rebounding home values and soaring stock portfolios. But that increase has primarily benefited the nation's wealthiest, said Lance Roberts, chief investment strategist at Clarity Financial LLC in Houston and editor of the Real Investment Advice newsletter. "When you look at net worth, it's heavily skewed by the top 10 percent," Roberts said. "The average family of four is living paycheck to paycheck."

The Fed Issues A Warning As Household Debt Hits New All Time High -- After we first reported last week that US credit card debt hit a new all time high with both student and auto loans rising to fresh records with every new report... ... it won't come as a surprise that according to the just released latest quarterly household debt and credit report by the NY Fed, Americans' debt rose to a new record high in the second quarter on the back of an increase in every form of debt: from mortgage, to auto, student and credit card debt. Aggregate household debt increased for the 12th consecutive quarter, and are now $164 billion higher than the previous peak of $12.68 trillion set in Q3, 2008. As of June 30, 2017, total household indebtedness was $12.84 trillion, or 69% of US GDP: a $114 billion (0.9%) increase from the first quarter of 2017 and up $552 billion from a year ago. Overall household debt is now 15.1% above the Q2 2013 trough. Mortgage balances, the largest component of household debt, increased again during the first quarter to $8.69 trillion, an increase of $64 billion from the first quarter of 2017. Balances on home equity lines of credit (HELOC) were roughly flat, and now stand at $452 billion. Non-housing balances were up in the second quarter. Auto loans grew by $23 billion and credit card balances increased by $20 billion, while student loan balances were roughly flat.

  • Confirming the slowdown in mortgage activity, mortgage originations in Q2 declined to $421 billion from $491 billion. Meanwhile, there were $148 billion in auto loan originations in the second quarter of 2017, an uptick from the first quarter and about the same as the very high level in the 2nd quarter of 2016.
  • Auto loan balances increased by $23 billion, continuing their 6-year trend. Auto loan delinquency rates increased slightly, with 3.9% of auto loan balances 90 or more days delinquent on June 30. The aggregate credit card limit rose for the 18h consecutive quarter, with a 1.6% increase.
  • Outstanding student loan balances rose modestly, and stood at $1.34 trillion as of June 30, 2017. The second quarter typically witnesses slow or no growth in student loan balances due to the academic cycle. As discussed previously, a perilously high 11.2% of aggregate student loan debt was 90+ days delinquent or in default in 2017 Q2.

In a troubling development, the report noted that the distribution of the credit scores of newly originating mortgage and auto loan borrowers shifted downward somewhat, as the median score for originating borrowers for auto loans dropped 8 points to 698, and the median origination score for mortgages declined to 754. For now this credit score decline has not impacted the credit market: about 85,000 individuals had a new foreclosure notation added to their credit reports in the second quarter as foreclosures remained low by historical stand

Carmageddon: Deep Subprime Auto Delinquencies Spike To 10-Year Highs --If you're still on the fence about whether the auto market in this country is anything but a massive bubble being propped up by extremely loose credit underwriting standards, then we think Equifax has just provided some definitive evidence that just might push you over the edge. In discussing delinquency trends in deep subprime auto ABS deals, Equifax Chief Economist Amy Crews Cutts recently pointed out that 2016 and 2017 vintage deals are mysteriously performing more like 2007 securitizations than those underwritten in 2010. Here's more from Bloomberg:“Performance of recent deep subprime vintages is awful,” Equifax said in a slide show on second-quarter credit trends.“We’re seeing an increase in delinquencies across all credit scores, but in the highest credit quality, it’s just a basis point or two,” Chief Economist Amy Crews Cutts said in an email Tuesday. “In deep subprime, the rise is more substantial. What stood out to me was the issuers. Those that have been doing this for a decade or more were showing the ‘better’ performance, while those that were relative newcomers were in the ‘worse’ category.” And while we can't be sure, we're going to go out on a limb and suggest that the soaring delinquency rates of 2016/2017 vintage deals might just have something to do with promotions like the following one that literally offers a $1,500 discount to people with "Low Credit Scores."  And, lest you think this is a joke, here is the fine print on the promotion: "April 2017 Pricing on all new vehicles may include up to $1500 in finance rebates that have certain credit requirements to be able to claim this rebate. The finance office is Credit Score based and you must be below 620 to qualify. If you are over a 620 you must add up to $1500 to the price. Varies by make and model. Not all units are eligible for this rebate. Call Dealer for Details." Let that sink in for a moment...this lender is actually trying to attract borrowers with lower credit scores rather than higher...on a $55,000 vehicle no less.

Michigan Consumer Sentiment: August Preliminary Highest Since January - The University of Michigan Preliminary Consumer Sentiment for August came in at 97.6, up from the July Final reading of 93.4 and its highest since January. had forecast 94.0.Surveys of Consumers chief economist, Richard Curtin, makes the following comments:Consumer confidence rose in the first half of August to its highest level since January due to a more positive outlook for the overall economy as well as more favorable personal financial prospects. The two component indices moved in opposite directions, with the Current Conditions Index falling slightly from its decade peak, and the Expectations Index posting a more substantial rebound. As with the overall Sentiment Index, the component indices nearly regained the peak levels recorded earlier in 2017. Too few interviews were conducted follow ing Charlottesville to assess how much it will weaken consumers' economic assessments. The fallout is likely to reverse the improvement in economic expectations recorded across all political affiliations in early August. Moreover, the Charlottesville aftermath is more likely to weaken the economic expectations of Republicans, since prospects for Trump's economic policy agenda have diminished. Nonetheless, the partisan difference between the optimism of Republicans and the pessimism of Democrats is still likely to persist, with Independents remaining as the bellwether group. At this point, the data continue to indicate a gain of 2.4% in personal consumption expenditures in 2017. [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.

Retail Sales increased 0.6% in July --On a monthly basis, retail sales increased 0.6 percent from June to July (seasonally adjusted), and sales were up 4.2 percent from July 2016. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for July 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $478.9 billion, an increase of 0.6 percent from the previous month, and 4.2 percent above July 2016. ... The May 2017 to June 2017 percent change was revised from down 0.2 percent to up 0.3 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were up 0.7% in July. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 4.3% on a YoY basis. The increase in July was above expectations, and sales in May and June were revised up. A solid report. Note: Amazon Prime day boosted retail sales in July.

July Retail Sales: Up 0.6% MoM, Beats Forecast --The Census Bureau's Advance Retail Sales Report for July released this morning showed an increase over the June figures. Headline sales came in at 0.6% month-over-month to one decimal. Today's headline number was above the consensus of 0.4%. Core sales (ex Autos) came in at 0.5% MoM. Figures were revised going back to June 2016. Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for July 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $478.9 billion, an increase of 0.6 percent (± 0.5 percent) from the previous month, and 4.2 percent (± 0.9 percent) above July 2016. Total sales for the May 2017 through July 2017 period were up 3.9 percent (± 0.7 percent) from the same period a year ago. The May 2017 to June 2017 percent change was revised from down 0.2 percent (± 0.5 percent)* to up 0.3 percent (± 0.2 percent).Retail trade sales were up 0.6 percent (± 0.5 percent) from June 2017, and up 4.3 percent (± 0.7 percent) from last year. Nonstore Retailers were up 11.5 percent (± 1.8 percent) from July 2016, while Building Materials and Garden Equipment and Supplies Dealers were up 8.3 percent (± 1.9 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.

LA area Port Traffic increased in July --From the Port of Long Beach: Port of Long Beach Sees Busiest Month Ever Surging cargo volume in July set a record for the best month in the Port of Long Beach’s 106-year history, surpassing the previous high mark set in August 2015 for the number of containers moved across its docks.  With total volume of 720,312 twenty-foot-equivalent units (TEUs) in July, cargo traffic has increased for five consecutive months in Long Beach, and in six of the first seven months of 2017. Volume is up 6.4 percent for the calendar year compared to 2016. Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container).  To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. On a rolling 12 month basis, inbound traffic was up 1.2% compared to the rolling 12 months ending in June.   Outbound traffic was up 0.2% compared to the rolling 12 months ending in June. The 2nd graph is the monthly data (with a strong seasonal pattern for imports).

Worst Restaurant Recession Since 2009 Dings Inflation - Wolf Richter -Foot traffic at chain restaurants fell 4.7% in July year-over-year. Same-store sales fell 2.8%, the 17th month in a row of year-over-year declines, the longest downturn since 2009. On a two-year basis, same-store sales fell 4.2% from July 2015, and traffic fell 8.7%.Sales rose in only 12 markets and fell in 183 markets. California was once again the least bad region, with same-store sales down 0.7% and foot traffic down 3.6%. In other words, no region had positive results. The Midwest was the “worst region” with sales down 3.6% and foot traffic down 5.2%.“While the economy keeps growing at a moderate pace and job gains remain strong, the consumer seems to be on vacation – literally and figuratively,” said the report by TDn2K whose Restaurant Industry Snapshot tracks sales at 27,000 restaurant units from 155 brands, generating $67 billion in annual revenue. That’s about 10% of total “eating and drinking places” revenues as tracked by the Commerce Department. The report added: “One of the clearest indicators that households are spending cautiously is the softening of big-ticket purchases. In July, for the eleventh month out of the last twelve, vehicle sales were below the rate posted the year before. Home sales, while still trending up, are now expanding at a decelerating pace.” Food sales were down, and alcohol sales were down. Prices were up — the average amount per check rose 1.8% in July – but it wasn’t enough to make up for the decline in customer count. The report blamed consumers that were maxed out: “[H]ouseholds are currently maintaining their lifestyles by reducing their savings rate, and that is likely restraining spending on discretionary goods. We may have to wait until the fall or early winter, assuming wage gains accelerate by then, to see any pick up in restaurant sales.” So everyone is waiting for wage increases for the lower 80% of the wage earners that will finally outgrow inflation. That’s all it would take to crank up the economy, and even the restaurant business. People have been waiting for years for these real wage increases. But it’s just not happening.

US business inventories post biggest gain in seven months - U.S. business inventories recorded their biggest increase in seven months in June as retailers accumulated stock at a brisk clip amid signs of a pickup in domestic demand.The Commerce Department said on Tuesday that business inventories rose 0.5 percent after an unrevised 0.3 percent increase in May.Inventories are a key component of gross domestic product. Retail inventories gained 0.6 percent in June as announced in an advance report last month. Retail inventories rose 0.6 percent in May.Motor vehicle inventories increased 0.7 percent as previously reported after surging 1.2 percent in May.Retail inventories excluding autos, which go into the calculation of GDP, increased 0.5 percent as reported last month. They rose 0.2 percent in May.Inventory investment had a neutral impact on the second quarter's 2.6 percent annualized growth pace after chopping off 1.46 percentage points at the start of the year.Business sales rose 0.3 percent in June after edging up 0.1 percent in May. At June's sales pace, it would take 1.38 months for businesses to clear shelves, up from 1.37 months in May. The inventories-to-sales ratio for motor vehicles was unchanged at 2.25 months in June.

Industrial Production Increased 0.2% in July -- From the Fed: Industrial production and Capacity Utilization - Industrial production rose 0.2 percent in July following an increase of 0.4 percent in June. In July, manufacturing output edged down 0.1 percent; the production of motor vehicles and parts fell substantially, but that decrease was mostly offset by a net gain of 0.2 percent for other manufacturing industries. Following a six-month string of increases beginning in September 2016, factory output was little changed, on net, between February and July. The indexes for mining and utilities in July rose 0.5 percent and 1.6 percent, respectively. At 105.5 percent of its 2012 average, total industrial production was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector was unchanged in July at 76.7 percent, a rate that is 3.2 percentage points below its long-run (1972–2016) average.This graph shows Capacity Utilization. This series is up 9.9 percentage points from the record low set in June 2009 (the series starts in 1967).  Capacity utilization at 76.7% is 3.2% below the average from 1972 to 2015 and below the pre-recession level of 80.8% in December 2007. The second graph shows industrial production since 1967. Industrial production increased in July to 105.5. This is 21.1% above the recession low, and above the pre-recession peak. The increase was slightly below expectations.

Industrial Production Rose 0.2% in July - Today's report on Industrial Production for July shows a 0.2% increase month-over-month, which was below the consensus of 0.3%. Industrial Production peaked in November 2014, only one point higher than its pre-recession peak in November 2007. The year-over-year change is 2.19 percent, up from last month's YoY increase. Here is the overview from the Federal Reserve: Industrial production rose 0.2 percent in July following an increase of 0.4 percent in June. In July, manufacturing output edged down 0.1 percent; the production of motor vehicles and parts fell substantially, but that decrease was mostly offset by a net gain of 0.2 percent for other manufacturing industries. Following a six-month string of increases beginning in September 2016, factory output was little changed, on net, between February and July. The indexes for mining and utilities in July rose 0.5 percent and 1.6 percent, respectively. At 105.5 percent of its 2012 average, total industrial production was 2.2 percent above its year-earlier level. Capacity utilization for the industrial sector was unchanged in July at 76.7 percent, a rate that is 3.2 percentage points below its long-run (1972–2016) average. [view full report] The chart below shows the year-over-year percent change in Industrial Production since the series inception in 1919, the current level is lower than at the onset of 10 of the 17 recessions over this time frame of nearly a century.

Industrial production: once again, the hard data fails to confirm the soft -  This morning’s report on industrial production confirms that the economy remains on autopilot, and that’s a good thing.   Overall production increased again, and the trend of rising production since spring of last year is clear:  When we break it down by manufacturing (blue, left scale), mining, and utilities (red and green, right scale), we get pretty much the same picture: While it’s true that the manufacturing subindex is below its April peak, I am not terribly concerned. There were very volatile readings in March, April, and May, and if we smooth the readings out via a three month moving average, July is only slightly below June, and both June and July are above every other 3 month average reading. So the Doomers will have to move on from their “soft data/hard data” argument to something else.

Empire State Manufacturing Survey: Activity Jumped in August, Highest in 3 Years - This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 25.2 was a jump of 15.4 from the previous month's 9.8 and its highest in three years. The forecast was for a reading of 10.0. The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state. Here is the opening paragraph from the report.Business activity grew strongly in New York State, according to firms responding to the August 2017 Empire State Manufacturing Survey. The headline general business conditions index climbed fifteen points to 25.2, its highest level in nearly three years. The new orders index rose seven points to 20.6 and the shipments index edged up to 12.4, pointing to solid gains in orders and shipments. Delivery times continued to lengthen, and inventory levels moved lower. Labor market indicators pointed to an increase in employment and hours worked. Input prices rose at a faster clip than last month, while selling prices rose at a somewhat slower pace. Indexes assessing the six-month outlook suggested that firms were very optimistic about future conditions. [source] Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:

 New York Fed Manufacturing Surges To Highest In Three Years But Profit Margins Crushed The August Empire State Manufacturing Index printed at a blistering 25.2, reversing last month's plunge to 9.8, smashing expectations of a 10.0 print, and the highest print since September 2014. The surge was driven by the new orders index which rose seven points to 20.6 and the shipments index, which hit 12.4. Meanwhile, delivery times continued to lengthen suggesting growing capacity problems in the supply chain, while inventory levels declined. More good news came from labor market indicators, which pointed to an increase in employment and hours worked.  However, the biggest red flag was for corporate margins, as prices paid spiked 9.7, from 21.3 to 31.0 while prices received declined -4.8, from 11.0 to 6.2, keeping a lid on profits. The spread between the Prices Received and Prices Paid, a proxy for corporate profits, declined to the lowest in 5 years. That above, however, did not dent firms' optimism, and after the Empire State "Hope" Index plunged last month to an 8 month low, it rebounded in August, with indexes assessing the six-month outlook suggested that firms were quite optimistic about future conditions. The index for future business conditions rose ten points to 45.2, and the index for future new orders moved up eight points to 41.3. Employment was  expected to increase modestly, though the average workweek was expected to decline slightly. The capital expenditures index slipped to 11.6, and the technology spending index fell to 9.3.

 Earlier: Philly Fed Manufacturing Survey "region continued to advance" in August -- Earlier from the Philly Fed: August 2017 Manufacturing Business Outlook Survey: Manufacturing conditions in the region continued to advance in August, according to firms responding to this month’s Manufacturing Business Outlook Survey. The diffusion index for general activity fell slightly but continued to reflect growth. There was a notable improvement in the new orders and shipments indexes, and overall employment expansion continued among the reporting firms. The survey’s indexes of future activity indicate that firms expect a continuation of growth in the region’s manufacturing sector over the next six months. The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, fell slightly from 19.5 in July to 18.9 in August. The index has been positive for 13 consecutive months ... The survey’s indicators for labor market conditions suggest modest growth in employment. The percentage of firms reporting increases in employment (15 percent) was greater than the percentage reporting decreases (5 percent). The employment index held near steady at 10.1. Firms also reported overall increases in average work hours in August, and the workweek index was positive for the 10th consecutive month. Here is a graph comparing the regional Fed surveys and the ISM manufacturing index:

Phily Fed Slides To Weakest Since Election --Following Empire Fed's exuberant six-sigma beat and surge to three year highs, Philly Fed failed to live up to its neighbor's promise, dropping from 19.5 to 18.9 in August (a small beat of 18.0 expectations).  This is the weakest print since Nov 2016, despite a surge in new orders and average workweek as inventories tumbled. Hope remains alive and well though. The diffusion index for future general activity increased from a reading of 36.9 in July to 42.3 this month, its highest reading in four months. Over the next six months, nearly 49 percent of the firms expect increases in activity, and only 7 percent expect decreases.

Automotive Giants Are Betting Big On Ride Sharing Tech -- A new study is showing consumers are starting to prefer shared mobility services over owning a car and stopping off at a gas station. The study by University of Michigan Transportation Research Institute, Texas A&M Transportation Institute, and Columbia University, surveyed more than 1,200 people in Austin, Texas. They wanted to find out how their transportation habits changed after ride-hailing giants Uber and Lyft left the city.Uber and Lyft had pulled out the Austin, Texas, market last year right after their ballot measure failed in a local election. Voters had blocked them from using their own background-check systems to bring in drivers, avoiding the strict guidelines governing the taxi and livery industry.The university researchers found that 41 percent of the respondents went back to using their own vehicle to fill the void, and only nine percent went out and bought a car for their mobility needs. About 3 percent chose public transit, and 42 percent switched to another smaller local mobility startup serving the market. There were 12 app-based startups trying to fill the void once Uber and Lyft left the market. Most are gone, but a few are still in business in Austin.Researchers found that Austin survey respondents who had transitioned to a personal vehicle were 23-times more likely to take more trips than those who had switched to a startup ride-hailing firm. Trips went way down after Uber and Lyft left the city — the average frequency on trips went from 5.65 times per month to 2.01. That took a 68 percent drop.

Union throws wrench in self-driving works - Reuters - The Teamsters are throwing a wrench into the self-driving movement’s works. The union has convinced U.S. lawmakers to exempt commercial trucks from a bill allowing more autonomous vehicles on the roads. Granted, 3.5 million jobs are at stake. But as Tesla joins Daimler and others in the big-rig tech race, it’d be smarter to prepare haulers for a career shift. Congress is due to tackle the first federal legislation on self-driving vehicles in September after it returns from summer recess. The bipartisan plan raises the cap on permitted vehicles that don’t have common features such as a steering wheel, or meet certain safety requirements, to 100,000 a year from the current limit of 2,500. The Teamsters, though, successfully lobbied to exclude vehicles over 10,000 pounds. Yet the technology is rapidly advancing. Daimler was testing a self-driving rig on Nevada’s roads in 2015. Last year startup Otto, now owned by Uber, made one of the first known deliveries by an autonomous truck – 50,000 cans of beer. Earlier this week, Reuters reported that Tesla is developing an electric, driverless semi-truck. Alphabet’s Waymo is making similar moves. The union has opposed other policy pushes, such as states wanting to allow companies to use what is known as platooning technology. This would digitally connect a group of trucks so they drive in a gas-saving formation. It’s seen as a precursor to autonomous trucks and Arkansas, Tennessee and South Carolina are among the states considering such a move.  Fast adoption of such technology is in the industry’s and economy’s interest, too. Commercial trucking plays a key role in the U.S. economy, delivering about 70 percent of goods. The industry generates more than $700 billion a year in revenue. Yet the average age of truckers is 49, causing a worker shortage that is projected to hit 240,000 drivers by 2022, according to the American Trucking Associations.

Weekly Unemployment Claims: Down 12K, Beats Forecast - Here is the opening statement from the Department of Labor: In the week ending August 12, the advance figure for seasonally adjusted initial claims was 232,000, a decrease of 12,000 from the previous week's unrevised level of 244,000. The 4-week moving average was 240,500, a decrease of 500 from the previous week's unrevised average of 241,000. [See full report] Today's seasonally adjusted 232K new claims, down 12K from last week's number, was better than the forecast of 240K. Here is a close look at the data over the past few years (with a callout for the past year), which gives a clearer sense of the overall trend in relation to the last recession and the volatility in recent months.

 BLS: Unemployment Rates Unchanged in 46 states in July, Two States at New Series Lows -- From the BLS: Regional and State Employment and Unemployment Summary:  Unemployment rates were higher in July in 3 states, lower in 1 state, and stable in 46 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Twenty-seven states had jobless rate decreases from a year earlier and 23 states and the District had little or no change. The national unemployment rate, 4.3 percent, was little changed from June but was 0.6 percentage point lower than in July 2016.  ...  North Dakota and Colorado had the lowest unemployment rates in July, 2.2 percent and 2.4 percent, respectively. The rates in North Dakota (2.2 percent) and Tennessee (3.4 percent) set new series lows. (All state series begin in 1976.) Alaska had the highest jobless rate, 7.0 percent.This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession. The size of the blue bar indicates the amount of improvement. The yellow squares are the lowest unemployment rate per state since 1976. Ten states have reached new all time lows since the end of the 2007 recession. These ten states are: Arkansas, California, Colorado, Maine, Mississippi, North Dakota, Oregon, Tennessee, Washington, and Wisconsin. The states are ranked by the highest current unemployment rate. Alaska, at 7.0%, had the highest state unemployment rate. The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red). Currently one state has an unemployment rate at or above 7% (light blue); Only two states and D.C. are at or above 6% (dark blue). The states are Alaska (7.0%) and New Mexico (6.3%). D.C. is at 6.4%.

We still haven’t recovered well-paying construction and manufacturing jobs - The economy has added 8.2 million jobs in the private sector since the Great Recession began in December 2007, but creation of construction and manufacturing jobs continues to lag. These industries are important to workers because they provide good jobs and high wages (that are even better if the workers are unionized). They are also some of the highest paying jobs for people without a bachelor’s degree. In July 2017, there were still 1.9 million fewer workers in construction and manufacturing than at the start of the Great Recession.  Industries such as hospitality, health care, temporary help services, and other professional business services that have gained jobs since the beginning of the recession pay substantially less than construction and manufacturing industries. Hourly pay in job-gaining industries is $25.24 on average, versus $29.70 in construction and $30.52 in manufacturing. Total compensation (which includes both wages and all benefits) in job-gaining industries is $31.03, while compensation in construction and manufacturing is $38.73 and $39.66, respectively, 24.8 percent to 27.8 percent more than in job gaining industries. Boosting job growth in industries that traditionally provide strong wages for the majority of working people (the bottom 70 percent) would help a lot. However, infrastructure investment has been in long-run decline, and the U.S. trade deficit in non-petroleum goods has increased sharply since 2009. Investments in infrastructure and stemming rising trade deficits would do much to help the overall economy and restore jobs to two well-paying sectors that badly need them. Unfortunately, the Trump administration budget is a disaster for public investment, and the administration has refused to label China a currency manipulator. Persistent undervaluation of the Chinese yuan has contributed to growing trade deficits that cost 3.4 million U.S. jobs between 2001 and 2015. Stronger growth in manufacturing and construction could provide a much-needed boost to wages for working Americans.

 Dallas Fed chief Kaplan: U.S. must address workforce skills gap – podcast - As the American working population ages and continues to be disrupted by technology, the U.S. needs to create skills training that will help them navigate the changing jobs landscape, says Federal Reserve Bank of Dallas President Robert Kaplan. “Until we improve this, I think the workforce will not meet its potential,” he says in the latest American Banker podcast.

Federal Appeals Court Is Okay With Uber Taking Away Customers’ Right To Sue - Like companies in just about every industry, the ride-hailing app Uber requires users to agree that they will take any disputes to an arbitrator rather than the legal system. And although you may never have noticed this clause, a federal appeals court has now ruled that customers receive “reasonably conspicuous” notice about the arbitration requirement.  In his opinion issued today [PDF], Judge Denny Chin of the 2nd U.S. Circuit Court of Appeals went ahead and blamed Uber users who don’t tap on the hyperlink and read the user agreement. (Never mind that 98% of users do the same.)The plaintiff claimed that he had not done so, and the court accepted that he hadn’t read the terms and conditions before registering for an Uber passenger account. The question was: Was it his responsibility to know that by signing up for an account, he was agreeing to arbitration? The court concluded that yes, it was. “As long as the hyperlinked text was itself reasonably conspicuous — and we conclude that it was — a reasonably prudent smartphone user would have constructive notice of the terms,” Chin wrote. “While it may be the case that many users will not bother reading the additional terms, that is the choice the user makes.”

Americans Spend More On Lottery Tickets Than On Movies, Video Games, Music, Sports Tix And Books Combined --It's that time of the year again: with both the Mega Millions and the Powerball lotteries accumulating jackpots greater than $350 million, countless Americans - mostly those in lower income groups - are splurging on lottery tickets, hoping to get rich quick. Unfortunately for virtually everyone, it will never happen: the odds of winning both (or either) are absolutely staggering, a bit worse than 1 in 75.6 quadrillion, or 1 in 75,648,252,765,957,300 to be precise. On a percentage basis, one only has a 0.000000000000000013% chance of holding both winning tickets. Putting these odds in context, they are about 6,000 times worse than the odds experts have calculated of being killed by ameteorite strike -- at the same time you're being attacked by a shark. The odds of winning "only" one jackpot are not much higher: the Powerball winning odds are 1 in 292 million, while those for Mega Million are slightly better: 1 in 259 million.  Here is an even more stunning statistic: in 2016, Americans spent more than $80 billion on lottery tickets last year, more than they spend on movies, video games, music, sports tickets and books - combined. Some enjoy mocking American stupidity: "If you buy both tickets, you've doubled your odds of winning," said Ben Auerbach, lead data strategist for Allstate, which technically is correct; the odds are still pretty much zero.  Still, for many Americans in the declining middle class and growing lower class, this remains the only hope of success: "You see more people in line buying both tickets when both games are over $300 million," Jeff Lenard, spokesman for National Association of Convenience Stores, whose members sell about two-thirds of the nation's lottery tickets told CNNMoney. Yet while for actuaries the numbers above may be a joke, across the US they are another example of what is has become a social tragedy.

Boss tells state workers: Kick ICE out of California labor offices -- California’s top labor law enforcer wants federal immigration agents to stay away from offices where state investigators weigh claims about underpaid employees and workplace retaliation. Labor Commissioner Julie Su last month directed her staff to turn away Immigration and Customs Enforcement agents unless the federal officers have warrants. Her directive followed three instances over the past 10 months in which immigration agents sought information about California workers who had filed claims against employers. In two cases, immigration agents attempted to attend hearings where investigators discuss claims with workers and their employers, Su said. In all three cases, the agents left when they were asked, she said.Su, the state’s labor commissioner since 2011, did not know how the immigration agents learned about the appointments.Those contacts with immigration officers dovetail with a surge in complaints from California workers about employers threatening to have them deported. Last year, Su’s office in the Department of Industrial Relations investigated 14 complaints from workers who claimed their employers threatened them with immigration enforcement. So far this year, the department has opened 58 immigration-based retaliation cases, Su said. She said the presence of immigration officers in state offices could disrupt the enforcement of labor laws by discouraging immigrant workers from reporting employers who short them on wages or unfairly punish them in other ways.

Backed by Police Unions, Legislators Stand By Laws to Protect Drivers Who Kill Protesters -- In the aftermath of the murder of activist Heather Heyer in Charlottesville, Virginia, state legislators who had previously pushed to shield drivers who killed protesters with a moving vehicle are largely standing by their various efforts, arguing that their legislation would not have applied in this weekend’s attack.Before the killing on Saturday, a swath of bills had been proposed around the country, largely in the South and primarily in response to Black Lives Matter and Dakota Access Pipeline related protests. The bills targeted leftist demonstrators who have increasingly shut down traffic by blocking roads and highways to bring attention to their cause.Under the proposed laws, motorists who struck and killed such protesters would have special immunity in certain circumstances, as long as it wasn’t proven that they acted deliberately. Heyer was struck by a car allegedly driven by James Alex Fields Jr., a young man who is a supporter of white nationalist causes.None of the proposed motorist immunity bills — debated in half a dozen states and backed by far-right personalities and law enforcement interests — have been made into law. Rather than backing away from the policy in light of the events in Charlottesville, legislators are doubling down. In Texas, state Rep. Pat Fallon introduced a bill to limit the liability of motorists responsible for hitting individuals who are “blocking traffic in a public right-of-way while participating in a protest or demonstration.” The Combined Law Enforcement Associations of Texas, a statewide coalition of municipal and county police associations, lists Fallon’s bill among legislation supported by CLEAT. (Cleats are the spikes on the bottom of athletic shoes.) In response to criticism over the weekend, Fallon doubled down on social media, implying that his critics don’t know the difference between legal and illegal protest (the Facebook status he links to has been deleted):

Lee Camp: I Witnessed the Charlottesville Terror Attack, Here’s the Video - naked capitalism - Lee Camp gives a first person account of the violence at Charlottesville.

DOJ Demands 1.3 Million IP Addresses Of Visitors To Antifa Website Used To Coordinate Riots --In what is shaping up to be a contentious battle over privacy rights and free speech, the Department of Justice has formally requested that web hosting firm ‘DreamHost’ turn over 1.3 million IP addresses and other information to ‘unmask‘ visitors to the anti-Trump Antifa website ‘,’ as part of the investigation into crimes committed on and around January 20 by protesters. DreamHost has challenged the request, claiming the scope of data requested violates the first and fourth amendments because it is too broad. was registered in October of 2016 by the ‘DC Anti-fascist Coalition,’ and promoted along with the hashtag #DisruptJ20, as a central resource for anti-Trump protesters to coordinate various plots over social media intended disrupt the presidential inauguration on and around January 20. The website connected users through mailing lists and planned meet-ups, and provided a calendar of anarchistic events as well as resources to help people prepare for the mayhem. The site also provides a ‘legal guide’ for those arrested.

Gov. Cuomo Wants To Remove Names Of Confederate Generals From New York Streets -- As a tidal wave of cultural revisionism sweeps America in the aftermath of this weekend's tragic Charlottesville clashes, prompting governors to tear down Confederate statues across the country, the governor of New York has a different idea and if Gov. Andrew Cuomo gets his way, the names of the two Confederate generals - Gen. Robert E. Lee and Gen. Stonewall Jackson - will be removed from streets on an Army base in New York City, according to theNY Daily News. General Lee Avenue is a main thoroughfare stretching through the center of Fort Hamilton, an Army installation in Brooklyn. Stonewall Jackson Drive is located in the southwestern corner of the base. A recent attempt by local leaders to have the names removed from the Fort Hamilton streets was denied by the Army on August 7. The Army said renaming the streets would be "controversial and divisive." However, on Wednesday Cuomo decided that the army's idea of divisiveness is less important than his own, and called on the Army to reconsider its recent decision not to rename two streets in Brooklyn honoring Civil War Confederate generals. “Renaming these streets will send a clear message that in New York, we stand against intolerance and racism, whether it be insidious and hidden or obvious and intentional,” Cuomo wrote in a letter sent to acting Army Secretary Ryan McCarthy.

“Barack Obama is to blame”: 13 Alabama conservatives on Charlottesville - Vox — Several Alabama voters blame President Barack Obama for the white supremacist violence in Charlottesville this weekend because, they say, he sowed division in American politics.Attendees at a rally for Rep. Mo Brooks, a conservative House Republican running for Senate, in Decatur on Monday said they were confident that philanthropist George Soros was bankrolling both sides of this weekend's violent clashes.And on conservative Alabama talk radio, Black Lives Matter activists quickly emerged as a top culprit in the bloodshed. Callers, citing Facebook posts, claimed that BLM protesters had thrown bricks at the car that then hit and killed Heather Heyer.“There’s a lot of wrong on both sides, and unfortunately all the liberal media talks about is the wrong on one side,” said Tom Cowles, 61, a retired engineer from a wealthy section of northeast Alabama.On Tuesday, I talked to a few dozen people at three campaign events for three conservative Senate candidates about Charlottesville. I also listened for three hours to 101.1 FM Yellowhammer News, a conservative talk radio station in Alabama. While nearly all decried the acts of violence and said they rejected white hate groups, the Alabama conservatives also blamed the mainstream media for ignoring the violence of the left, argued that the Ku Klux Klan was originally an organization of the left, and complained about Black Lives Matter. I recorded our conversations; the transcripts of their answers are below.

Doxing Is a Perilous Form of Justice—Even When It’s Outing Nazis - Last Saturday, Logan Smith, the man behind the Twitter account @YesYoureRacist, began posting photos of alleged white supremacist protesters in Charlottesville, Virginia—and gained over 300,000 followers in a single weekend, some of whom helped him expose the identities of the protesters. One of the people Smith outed has since been fired from his job at a Berkeley, California, hot dog stand. Another, pictured screaming and holding a tiki torch, claims he's been misrepresented as an “angry racist.”Another was disowned by his family. Another, Kyle Quinn, was more than 1,000 miles away from Charlottesville at the time of the protest—a case of mistaken identity that brought a wave of threats and accusations of racism so large that Quinn felt unsafe in his home. Still another was James Alex Fields, Junior, who murdered anti-racist protestor Heather Heyer.To some, this all makes Smith an internet hero. To others, he’s just the vile, destructive left wing doxer du jour. (Smith did not respond to request for comment, though he has discussed the campaign on NPR.) So who's got truth on their side? The internet has always been a swamp of ambiguity, especially where doxing is concerned. But as doxing continues to evolve as the preferred tactic of both far right and left wing internet factions, it’s important to take a hard look at what each side is trying to accomplish. While the two sides use different logic to justify their actions, the true result is the same and even cumulative—leading to an arms race of financially incentivized, shame-slinging vigilantes.

U.S. digital rights group slams tech firms for barring neo-Nazis  (Reuters) - A digital rights group based in San Francisco on Thursday criticized several internet companies for removing neo-Nazi groups from servers and services, saying the actions were "dangerous" and threatened free expression online. GoDaddy Inc, Alphabet's Google, security firm Cloudflare and other technology companies moved this week to block hate groups after weekend violence in Charlottesville, Virginia, where white nationalists had gathered to protest removal of a statue of Confederate General Robert E. Lee from a park. "We strongly believe that what GoDaddy, Google, and Cloudflare did here was dangerous," Cindy Cohn, executive director of Electronic Frontier Foundation, wrote in a blog post along with two other staffers. The blog post reflected years-long tension in Silicon Valley, where many company executives want to distance themselves from extremists but are concerned that picking and choosing what is acceptable on their platforms could invite more regulation from governments. "Protecting free speech is not something we do because we agree with all of the speech that gets protected," Electronic Frontier Foundation wrote. "We do it because the power to decide who gets to speak and who doesn't is just too dangerous to hand to any company or any government."

"This Is Dangerous": Digital Activists Slam Tech Firms For Banning Neo-Nazi Websites -- As social media and internet companies scramble to ban or otherwise cut ties with extremist and far right-wing websites like the Daily Stormer, which were unceremoniously dropped by the likes of GoDaddy, Google and security firm Cloudflare earlier this week after helping to organize last weekend's deadly "Unite the Right" rally in Charlottesville, a prominent nonprofit has come forward to defend them.  The Electronic Frontier Foundation, or EFF, best known for its activism surrounding net neutrality has a simple message: even though you don’t agree with their message, banning people from the internet is a slippery slope. Which is why it called on domain-name companies like Google and GoDaddy to “draw a hard line” and not remove or suspend websites based solely on their content. Quoted by Reuters: Cindy Cohn, EFF CEO wrote in a blog post that "We strongly believe that what GoDaddy, Google, and Cloudflare did here was dangerous." In a blog post, the EEF argued that the power to decide what is and isn’t appropriate for the internet is too important to entrust to any company or government."  Protecting free speech is not something we do because we agree with all of the speech that gets protected," Electronic Frontier Foundation wrote.‘We do it because the power to decide who gets to speak and who doesn't is just too dangerous to hand to any company or any government.’”

 Is America Headed for a New Kind of Civil War? - A day after the brawling and racist brutality and deaths in Virginia, Governor Terry McAuliffe asked, “How did we get to this place?” The more relevant question after Charlottesville—and other deadly episodes in Ferguson, Charleston, Dallas, Saint Paul, Baltimore, Baton Rouge, and Alexandria—is where the United States is headed. How fragile is the Union, our republic, and a country that has long been considered the world’s most stable democracy? The dangers are now bigger than the collective episodes of violence. “The radical right was more successful in entering the political mainstream last year than in half a century,” the Southern Poverty Law Center reported in February. The organization documents more than nine hundred active (and growing) hate groups in the United States. America’s stability is increasingly an undercurrent in political discourse. Earlier this year, I began a conversation with Keith Mines about America’s turmoil. Mines has spent his career—in the U.S. Army Special Forces, the United Nations, and now the State Department—navigating civil wars in other countries, including Afghanistan, Colombia, El Salvador, Iraq, Somalia, and Sudan. He returned to Washington after sixteen years to find conditions that he had seen nurture conflict abroad now visible at home. It haunts him. In March, Mines was one of several national-security experts whom Foreign Policy asked to evaluate the risks of a second civil war—with percentages. Mines concluded that the United States faces a sixty-per-cent chance of civil war over the next ten to fifteen years. Other experts’ predictions ranged from five per cent to ninety-five per cent. The sobering consensus was thirty-five per cent. And that was five months before Charlottesville. “We keep saying, ‘It can’t happen here,’ but then, holy smokes, it can,” Mines told me after we talked, on Sunday, about Charlottesville.

5 Things That Will Happen When California Secedes from the U.S. -- Whenever I see an article about the move for California to secede from the United States (the so-called “Cal-exit”), the more I think that a vote to split is inevitable rather than improbable. As a member of the California Freedom Coalition recently told the Sacramento Bee, collecting signatures for the 2018 ballot, “We feel like this current initiative is more feasible and will hold up more to scrutiny and legal challenges.” It is very easy to get an initiative on the ballot in California, so easy the left-leaning New Republic called it “a joke.” California made Arnold Schwarzenegger its governor. Twice. One might say passage of a secession referendum–even secession itself–might be improbable, rather than impossible, too.Combined with its easily abused ballot system and politics that are vastly out of sync with America, California is a little full of itself. See, California isn’t like New York City, which—while it’s the economic and cultural center of basically the world—realizes that it needs the rest of the country for food, water, power, and a place to send its garbage. (New York’s annual garbage haul? 7.8 million tons per year. Where are you going to put that when you can’t even find a parking space in Queens?)California doesn’t perceive it needs anyone, and on some points its massive ego is probably justified. It’s enormous in terms of geography, population, economy, and very importantly coastline. Moreover, its agricultural base could sustain the state by itself. The term “Golden State” is probably more accurate today than it was during the gold rush.And they don’t like Trump. The state, with its high Latino population, particularly doesn’t appreciate Trump’s rhetoric about the “wall with Mexico.” So let’s assume for a moment that California leaves, and when it does, expect the following five things to happen quickly:

Meet Billionaire Kevin Plank: Maryland's Corporate Welfare King -- A corporate cronyism scandal could be brewing out of Baltimore, Maryland this month involving Billionaire Kevin Plank (CEO of Under Armour). What is alleged per The Baltimore Post are Baltimore County Council members  supporting a ‘conditional grant in an amount up to  $ 2,000,000 to Under Armour, inc from the Maryland Department of Commerce pursuant to the Maryland Economic Development Assistance Fund’. The purpose of the grant is for the redevelopment of Tradepoint Atlantic (TPA) of Sparrows Point, where the 3,100 acre site use to be the home of the world’s largest steel producer called Bethlehem Steel. In this case, Maryland’s economic development assistance fund is better known as ‘corporate welfare’. The article goes on to say,someone please explain to me why Mr. Plank, who according to Forbes Magazine has a net worth around $1.74 billion, needs $2 million from us regular middle class taxpayers.  After reading further into the article, it seems as Kevin Plank (CEO of Under Armour) has aligned himself with the so called ‘deep state’ of Maryland: This debauchery not only involves Baltimore County, but also the state of Maryland and our local delegates who are deeply entrenched in TPA.  Several projects came up at the last meeting concerning the news in Annapolis and its impact on Baltimore County. What we heard from our delegation is more propaganda than reality. Once again, the issue of jobs (10,000 of them) was at the forefront of this gabfest. Blowing more hot air than facts, the delegation pontificated on the wind tunnel issue that TPA is pursuing.

Baltimore's Homeless Erect Modern Day 'Hooverville' Tent City On Front Lawn Of City Hall --Baltimore’s homeless have erected a modern day ‘Hooverville’, or better yet a ‘Trumpville’ on the front lawn of Baltimore’s City Hall.  The tent city demands are the following:

  • Economics: 21st Century Jobs Guarantee Program
  • Criminal & Social Justice: Support for Power Consulting to become DOJ consent decree monitor
  • Housing: City Wide Housing First Program Changes in Homeless Shelter Policy

Organizers of the tent city explained to me that the ACLU is carefully monitoring the situation, and says less than 30 tents are perfectly legal. As long as there is order in the tent city, this temporary town of the homeless can stay erected… This is all comes at a time where 50-years of democratic controlled leadership in Baltimore, along with decades of deindustrialization have completely destroyed the city’s economy and the middle class. The city is now left with violent crime some of the highest in the United States and a public health crisis of opioids destroying the citizens from with-in. Nearly 1/3 of black households have a net worth of zero and an unemployment rate 3x higher than whites. The wealth inequality gap in Baltimore serves as a warning of where this country is headed.

Child's home learning environment predicts 5th grade academic skills  --Children whose parents provide them with learning materials like books and toys and engage them in learning activities and meaningful conversations in infancy and toddlerhood are likely to develop early cognitive skills that can cascade into later academic success, finds a new study by NYU's Steinhardt School of Culture, Education, and Human Development. The study, published online in the journal Applied Developmental Science, followed a group of children from birth through 5th grade to track the influence of early home learning environments on later cognitive skills and understand the factors that might explain long-term influences. "There is growing evidence for the power of early learning environments on later academic success," said Catherine Tamis-LeMonda, the study's lead author and a professor of applied psychology at NYU Steinhardt. "Our study confirms that strong home learning environments arm children with foundational skills that are springboards to long-term academic achievement." Research shows that the home learning environment powerfully shapes children's language and cognitive development. Children's participation in learning activities, the quality of parent-child interactions, and the availability of learning materials like books and toys are three key features of the home learning environment that support language and pre-academic skills in early childhood.

1 In 7  New York City Public-School Students Is Homeless --Despite promising to do everything in his power to improve the quality of life for New York City’s most economically vulnerable residents, Mayor Bill De Blasio has instead presided over one of the largest expansions in homelessness in New York City history.Over the past two years, the population of homeless students in NYC’s public schools has exploded, increasing by 20% between the 2015-2016 school year and the 2016-2017 school year, which concluded in June. There are now more than 140,000 homeless public-school students, according to the Atlas of Student Homelessness, an annual study conducted by the Institute for Children, Poverty and Homelessness. At any given time, roughly 9% of NYC public-school students are homeless. Another four percent were currently housed, but had experienced homelessness at some point since 2010-2011 school year. Furthermore, one in seven NYC students will have been homeless at least temporarily during their tenure. According to the New York Times, which published a summary of the study's findings, the increase in homelessness since De Blasio took office has been driven by three factors:Dwindling federal aid for housing-insecure Americans, rising rents and the closure of state-run renters’ assistance programs.“The growing number of homeless children is part of the fallout of the city’s housing crisis, which has seen a growing number of families in city shelters, as rents have risen, federal and state aid has dwindled, and a state rental assistance program ended. The de Blasio administration has struggled to slow the rising numbers, but with little success.” Being homeless can have a profoundly negative impact on students’ long-term academic performance, even if they’re only homeless for a short period of time. This is because for homeless children, just getting to school each day can seem like an insurmountable obstacle.

Farm-to-School Movement Fights for a Foothold in Corn Belt Cafeterias - As the movement for a local and ethical food system continues to gain traction, school food is slowly but surely becoming a focus in the fight for change.  School districts serve lunch to 30.4 million students a day through the USDA’s National School Lunch Program (NSLP). The NSLP provides cash subsidies and USDA foods to enrolled schools, which in turn provide free and low-cost meals for qualifying students. In total, meals served through the NSLP amount to as many as 5 billion per year.Due to the program’s scale and the influence of Big Ag interests, the lion’s share of food served through the NSLP has typically been sourced from large-scale producers, transported from afar and heavily processed. The resulting meals are often less than nutritious. In 2009, the ground beef the USDA bought from five major meatpackers and distributed through the program failed to meet the quality standards of most fast food restaurants. But two initiatives, the farm-to-school movement and the Good Food Purchasing Policy (GFPP), a nonprofit-backed policy initiative, are challenging this lunchroom reality, and working to transform the food chain status quo.

Baltimore School With Zero Students Proficient In Math Has Highest Graduation Rate - Baltimore’s community is absolutely stunned after ‘Project Baltimore’, an investigative reporting initiative, which was launched in March 2017, by Sinclair Broadcast Group Inc. asked this question:  How can a high school with zero students proficient in math, have one of the highest graduation rates in Baltimore City? Project Baltimore is investigating Northwood Appold Community Academy II, or NACA II, after teachers “contacted us saying grades are being changed so students can graduate”. The school is located in East Baltimore City, Maryland where nearly 1/3 of African Americans have zero net wealth. The identities of the teachers who contacted Project Baltimore have been masked because they fear retaliation. Per Project Baltimore: NACA II is a Baltimore City high school that has its troubles. According to district data analyzed by Project Baltimore, attendance rates are down since 2013, while chronic absenteeism has nearly quadrupled and suspensions have more than doubled.  Yet, the school reports an 87 percent graduation rate, the exact same as the state average.

  • ’13... ’14... ’15... ‘16
  • Attendance Rates: 95... 92... 91... 88
  • Chronic Absenteeism: 7... 21... 18... 27
  • Suspensions: 24... 38... 28... 53

    and then this:  But then we found that NACA II has zero students proficient in state math testing and just 5 percent proficient in English. Compare that to the state, where 36 percent of students are proficient in math, 44 in English – yet, both have the same graduate rate.

    How new CPS budget will affect local schools - - On Friday, Chicago Public Schools (CPS) officials released figures for its operating budget for the upcoming fiscal year. The $5.7 billion budget published on Friday, Aug. 11, assumes that state lawmakers will enact Senate Bill 1 [SB 1] and that the district will receive additional funds from local resources to plug holes. SB 1 is a school funding reform bill that would alter the way money is distributed to schools statewide. The measure will use an evidence-based model to define an adequate level of education funding for each district and a formula for distributing state funds to districts. It was approved by the Illinois legislature in May. At the beginning of this month, Gov. Bruce Rauner used his amendatory veto power taking away a $250 million block grant that CPS receives from the state. “Under this model [SB 1], 268 districts would receive more money per pupil than Chicago. CPS would receive $300 million in additional funding in FY18,” CPS said in a written statement. Funds from the state would also go toward current and past due pension payments for CPS. The district is also assuming that it will receive “an additional $269 million in local resources to address its remaining budget gap, and is working with the City of Chicago to identify potential sources,” CPS said in a written statement. 

    School Funding Fight in Illinois: Billionaire Ex-Private Equity Governor Rauner v. 2 Million Students - While the national education debate is largely focused on Betsy DeVos and school choice, the fiercest fights over the future of public education are playing out at the state level. This week, AlterNet begins a tour across the US to survey some of the biggest education battles. The first stop: Illinois, where Governor Bruce Rauner, a conservative billionaire, seems determined to blow up the state’s schools. AlterNet education editor Jennifer Berkshire talks to Dusty Rhodes, an education reporter for NPR in Illinois, about the high-stakes school funding showdown that’s pitting the conservative billionaire Governor against the state’s public schools.

    Analysis: Illinois public school spending grew 12 times faster than enrollment - Chicago City Wire: Illinois’ public K-12 school system spent more than $37 billion last year, 74 percent more than it did two decades ago, according to an analysis of school finance data by Local Government Information Services (LGIS), which publishes Chicago City Wire. It grew 12 times faster than the system’s student population, which rose just 6 percent over the same period. In 1997, 905 Illinois public school districts serving 1.7 million students spent $14.3 billion, or $21.4 billion, adjusted for inflation. That’s $12,342 per student. Last year, 852 districts serving 1.8 million students spent $37.1 billion. That’s $20,191 per student, an increase of 74 percent. The analysis came as state legislators contemplated changes to Illinois K-12 school funding system that would increase spending even further. A bill sponsored by downstate state Sen. Andy Manar (D-Bunker Hill) calls for an increase of at least another 20 percent, or $6.5 billion. LGIS analyzed financial statements from school districts compiled annually by the Illinois State Board of Education (ISBE), as well as reports filed with the Illinois Department of Insurance by the state’s two public school teacher pension systems. The analysis found massive increases in spending on both operations and employee pensions. Operational spending on K-12 schools rose 43 percent from 1997-2016, to $29.1 billion from $20.4 billion. State taxpayers’ contribution to K-12 school funding rose 27 percent, to $6.8 billion from $5.2 billion. But that increase couldn’t keep up with local property taxpayers, who increased their spending 43 percent, from $12.9 billion to $18.5 billion. All spending numbers are inflation-adjusted.

    Education Secretary Betsy DeVos Will Allow For-Profit Schools To Continue Offering Programs That Don’t Meet Standards -- Earlier this year, Education Secretary Betsy DeVos revealed plans to “reset” the Gainful Employment rule meant to hold for-profit colleges more accountable for the education they provide students. Today, she continued tearing apart the rule, announcing the intention to allow colleges to continue enrolling students in programs that run afoul of the regulation. In a notice [PDF] published in the Federal Register today, the Department of Education announced that it would “reduce the burden on institutions” by revamping the appeals process for colleges when their programs fail to meet the gainful employment standards for employment after graduation. Under the Gainful Employment rule [PDF], for-profit educators must demonstrate their former students are making a living wage after they graduate. For-profit colleges are at risk of losing their federal aid should a typical graduate’s annual loan repayments exceed 20% of their discretionary income, or 8% of their total earnings. Discretionary income is defined as above 150% of the poverty line and applies to what can be put toward non-necessities. Additionally, institutions must publicly disclose information about the program costs, debt, and performance of their career education programs so that students can make informed decisions.  The Department’s new proposed changes appear to tip the appeals process in the college’s favor. Currently, a school has 60 days to appeal findings that their programs are in violation of the Gainful Employment rule. In the case of this year, schools had until March 1 to file; however, that date was pushed back to July 1. Under today’s announcement, schools found to be in violation of the rule now have until Feb. 1, 2018 to appeal. Now when appealing, the schools would no longer have to meet a minimum percentage or number of represented students in their findings. Instead, DeVos would determine what is reliable on her own.

    Regulators extract $192 million student debt settlement from Aequitas | Aequitas executives thought they'd hit a gold mine when the company began buying student loans from Corinthian Colleges. But the half-a-billion dollars worth of debt proved the company's undoing. Federal and state officials announced a deal Thursday to forgive the debt.When federal education regulators recognized notorious for-profit Corinthian Colleges was a giant fraud, there was a rush to help students get their debt forgiven. But Phillip Pranalli and thousands of other former Corinthian students were profoundly unlucky. Their loans were purchased by Aequitas Capital of Lake Oswego, which has steadfastly refused to forgive a dime. This subset of Corinthian students found themselves thrust from one white-collar scandal to another. On the heels of Corinthian's descent into bankruptcy and liquidation, Aequitas also collapsed in March 2016 amid accusations its top executives were running a $300 million Ponzi scheme. But even when a court-appointed receiver took charge, Aequitas continued to collect payments on the $188 million in Corinthian debt that remained on its books. Until now. A long stalemate involving the U.S. Consumer Financial Protection Bureau, several state attorneys general and Aequitas receiver Ron Greenspan ended Thursday. The parties have reached a deal in which about 41,000 former Corinthian students whose debt is held by Aequitas could get more than half, and possibly all, of their debt extinguished. Just over 680 Oregonians who attended Corinthian schools will collect about $2.1 million in refunds.

    Former Corinthian students will get debt relief - Aug. 17, 2017: About 41,000 students who took out private loans to go to Corinthian College will be eligible for debt relief. The Consumer Financial Protection Bureau and 13 state attorneys general said Thursday that they had reached a settlement agreement with Aequitas Capital Management, an investment firm that funded the loans. Students will receive $183 million, if the settlement is approved by the U.S. District Court in Oregon. "Tens of thousands of Corinthian students were harmed by the predatory lending scheme funded by Aequitas, turning dreams of higher education into a nightmare," said CFPB Director Richard Cordray. The government alleges that Aequitas and Corinthian knew that they were offering high-interest loans to students who were likely to default. In a marketing presentation to Aequitas in 2013, Corinthian officials described prospective student borrowers as people who have "low self-esteem" and felt "isolated," according to the complaint.   Many of its students were low-income and were the first in their families to go to college. They couldn't afford to pay for tuition out of pocket.  Before Corinthian closed in 2015, it was one of the largest for-profit colleges in the country, with about 74,000 students enrolled. But the school came under scrutiny as the Obama Administration cracked down on for-profit colleges. The government fined Corinthian $30 million in 2015 for misleading prospective students by overstating job placement rates for graduates.  Under the terms of the settlement, borrowers who were enrolled at a Corinthian school when it closed in 2015 will be eligible for forgiveness of their remaining debt. Those who are currently in default will also be eligible for forgiveness.

      Here’s what happens if you don’t pay your student loans -- More than 3,000 people default on their federal student loans every day.It takes the average student debt borrower 20 years to pay off their loans, and currently, over 44 million Americans hold a total of $1.4 trillion in student loan debt. But many borrowers don't know what actually happens if you are unable to make a payment. First and foremost, missing a student loan payment will hurt your credit score and make it more difficult for your to borrow money in the future. But beyond credit score, the exact repercussions of failing to pay off your student loans depend on if they are held by the federal government or a private student loan company.  Federal student loans are often the best choice when it comes to financing a degree in part because they offer low-interest rates and flexible repayment plans.If you miss a payment on your federal student loans you have 270 days to make a payment before your debt goes into default. Once federal student debt is in default, the government is able to garnish your wage, your Social Security check, your federal tax refund and even your disability benefits. The department of education often works with third-party collection agencies who will charge penalties and fees for not making a payment, sometimes as much as 18 percent of the balance of your loan.The government has also been known to sue borrowers. The Department of Justice reports that in the past two years, over 3,300 student loan borrowers have been sued for defaulting. In almost every case, the borrower loses. If the government wins, they can place a lien on your home and even force a sale.

     Milliman: Corporate Pension Funded Status Rises $4 Billion in July -- The funded status of the 100 largest corporate defined benefit pension plans grew by $4 billion during July, according to consulting and actuarial firm Milliman’s most recent Pension Funding Index (PFI).The funded-status deficit declined to $282 billion from $286 billion at the end of June due to strong July investment gains, the report said. The funded status improvement came as the benchmark corporate bond interest rates used to value pension liabilities continued a decline that began in April. As of July 31, the funded ratio nudged 0.2% higher to 83.7%, from 83.5% at the end of June, and the funded ratio has been vacillating between 83% and 84% over the first seven months of 2017.“Given the relatively strong market returns contrasted with persistently low interest rates, it’s no surprise that there’s been little movement this year in the funded ratio for the Milliman 100 plans,”  “With the lack of funded ratio improvement, we’re seeing a number of sponsors make additional contributions with an eye towards shoring up funded status in the future.”The 0.93% investment gain for July raised the Milliman 100 PFI asset value to $1.450 trillion from $1.442 trillion at the end of June. So far, the cumulative investment gain for the year is 6.50%. By contrast, the 2017 Milliman Pension Funding Study reported that the monthly median expected investment gain during 2016 was 0.57%.The projected benefit obligation (PBO) increased by $4 billion during July, raising the Milliman 100 PFI value to $1.732 trillion from $1.728 trillion at the end of June. The change resulted from a three-basis-point decrease in the monthly discount rate to 3.71% for July, from 3.74% in June, according to Milliman.

    Pediatricians say Florida hurt sick kids to help big GOP donors -- In the spring and summer of 2015, the state switched more than 13,000 children out of a highly respected program called Children’s Medical Services, or CMS, a part of Florida Medicaid. Children on this plan have serious health problems including birth defects, heart disease, diabetes and blindness.The state moved the children to other Medicaid insurance plans that don’t specialize in caring for very sick children. Stroud says that for her son, the consequences were devastating. Despite hours of phone calls, she says, she couldn’t find surgeons on his new insurance plan willing to do the highly specialized procedures he needed. “He was in pain every day,” Stroud said. “I just felt so helpless. It’s such a horrible feeling where you can’t help your kid.”  LJ filed a lawsuit against the state of Florida, and he was eventually placed back on Children’s Medical Services and received the care he needed. But some Florida pediatricians worry about other children with special health care needs who, two years later, are still off the program. The doctors aren’t just worried; they’re angry.  Parents and Florida pediatricians raise questions about the true reasons why Florida’s Republican administration switched the children’s health plans. They question whether it was to financially reward insurance companies that had donated millions of dollars to the Republican Party of Florida. “This was a way for the politicians to repay the entities that had contributed to their political campaigns and their political success, and it’s the children who suffered,” said Dr. Louis St. Petery, former executive vice president of the Florida chapter of the American Academy of Pediatrics.

    Doctors Coming Around To Single-Payer Healthcare - Citing simplicity, fewer hassles with insurers and more stable coverage for patients, U.S. physicians increasingly support a single-payer healthcare system, new reports indicate. A new analysis shows more than half of U.S. physicians support a single payer healthcare system with 42% “strongly” in favor and another 14% "somewhat" supportive, according to a new survey of more than 1,000 doctors by MerrittHawkins, a nationwide healthcare staffing firm. “Physicians appear to have evolved on single payer,” MerrittHawkins senior vice president Travis Singleton said of the poll. The new results are in contrast to 2008 Merritt analysis that showed 58% of doctors opposed single payer and 42% supported it. That analysis was the year Barack Obama was elected President and before the 2009 health reform debate that resulted in the Affordable Care Act of 2010.

    How Donald Trump Is Driving Up Health Insurance Premiums – NYTimes - Health insurance premiums for 2018 are on the rise for many, and for that, most of the blame falls squarely on the shoulders of President Trump. In recent days, a bevy of insurers have announced significant increases for Americans who purchase their coverage on the exchanges: a minimum of 12.5 percent by Covered California, 34 percent by Anthem in Kentucky and 43.5 percent by Medica in Iowa, to name just a few. Still more hikes may come from these insurers and others, who cite uncertainty around the Affordable Care Act as the principal culprit in this disturbing trend.Reinforcing these developments is an analysis by Charles Gaba of, who projected that at the moment, average premium increases next year are likely to total around 29 percent.  Of that, just 8 percentage points will result from medical inflation, and 2 percentage points will stem from the reinstatement of an Obamacare health insurance tax; the balance will be related to the uncertainty that Mr. Trump has created around key pieces of Obamacare. The largest portion of the total — about 15 percentage points — is connected to the potential demise of the cost-sharing reductions (known as C.S.R.s), payments made by the government to insurers to help cover out-of-pocket costs like co-pays and deductibles that lower-income Americans can’t afford.(The Congressional Budget Office said on Tuesday that premiums for the most popular health insurance plans would rise by 20 percent next year, and federal budget deficits would increase by $194 billion in the coming decade, if Mr. Trump ends the subsidies.) Those subsidies, which were created by the Obama health care legislation and which benefit seven million Americans, have been in limbo since House Republicans sued in 2014, contending that they needed to be appropriated by Congress, which wasn’t going to happen as long as Republicans controlled each chamber.

    Why Are Drug Prices So High? These Politicians Might Have The Answer - Why do Americans continue to pay the highest prices for medicine in the world? The answer lies in the fact that lawmakers have sculpted specific policies, often not found in many other nations, that boost pharmaceutical industry profits. Meanwhile, the drug industry has spent $61 million on state elections and nearly $67 million on federal elections since 2010. Amid rising public anger over the issue, Republican President Donald Trump campaigned for president on a promise to reduce drug prices — and, as recently as Monday, excoriated Merck & Co. CEO Ken Frazier, demanding that he “LOWER RIPOFF DRUG PRICES!” Democrats, in the meantime, have long depicted themselves as fight-for-the-little-guy populists crusading against pharmaceutical industry fat cats.However, key players from both parties have made pivotal decisions at the federal and state levels that have kept drug prices high — and pharmaceutical industry profit margins wide. As part of International Business Times’ ongoing coverage of the fight over drug prices, what follows is a look at six of those individuals, and how their actions have shaped America’s prescription drug market. Insurance companies and pharmacy benefit managers, or PBMs, across the U.S., face at least nine class-action lawsuits alleging they attached arbitrary premiums to the prices of often less-expensive, generic prescription drugs. The plaintiffs also accuse the PBMs and insurers of imposing so-called “gag clauses” on pharmacies to keep pharmacists from telling consumers that they could save money by paying out of pocket, under the threat that the pharmacy will be kicked out of the insurer’s network if they fail to comply. The suits involve giants Cigna, Anthem, Express Scripts, CVS and UnitedHealth. According to one expert, the system could be denying customers $120 billion in discounts and rebates.

    Drug industry faces ‘tidal wave’ of litigation over opioid crisis - Companies that make or distribute opioid painkillers are facing a “tidal wave” of litigation as US officials seek to raise funds to fight the country's addiction epidemic and punish those they accuse of fuelling the crisis. The number of government officials launching legal action against drugmakers and wholesalers has soared in the past year in what some lawyers see as a harbinger of a settlement that could echo the more than $200bn extracted from the tobacco industry in 1998. At least 30 states, cities and counties have either filed lawsuits or are formally recruiting lawyers using a process that tends to prelude full-blown legal action, according to a Financial Times analysis. The snowballing litigation comes as President Donald Trump has pledged to officially declare the opioid crisis a national emergency in a move that would allow Washington to direct funds to affected communities.

     Doctor killed after refusing to prescribe patient opioid-based painkillers -  Dr. Todd Graham wasn't yet halfway through his workday at South Bend Orthopaedics when a new patient came into his office here complaining of chronic pain. Heeding the many warnings of health officials, he told her opioids weren't the appropriate treatment. But she was accompanied by her husband, who insisted on a prescription. Graham held his ground. The husband grew irate. The argument escalated to the point that Graham pulled out his phone and started recording audio until the couple left. Two hours later, the husband would return, armed. Graham didn't know that the shouting in his office wasn't the end of the confrontation. It was frightening, he told his colleagues. But the incident two weeks ago wasn't out of the ordinary — physicians here and across the country have grown increasingly accustomed to disputes over opioids. So Graham didn't call the police. He didn't file a report. He just kept seeing patients. Many of his peers say they would've done the same thing. Many of them have. Now, they're not so sure. That's what they whispered to one another at the funeral five days later — the funeral for Dr. Graham.

    ‘Bleeding’ Veggie Burger Has ‘No Basis for Safety,’ According to FDA - Creators of a fake-meat burger made with a high-profile genetically engineered ingredient may have landed their experimental industry in a sizzling food safety mess, casting doubt on a Silicon Valley foodtech investor bubble. As reported on in today’s New York Times, recently obtained documents from the U.S. Food and Drug Administration (FDA) reveal that Impossible Foods, maker of the Impossible Burger, the meatless burger that supposedly “bleeds,” was told by FDA officials that it hadn’t provided adequate proof of safety for a genetically engineered protein that gives the burger its meat-like taste and color. Impossible Foods put the genetically engineered product on the market for public consumption even though the company privately admitted to the FDA that it had not conducted or designed safety tests. The FOIA-produced documents state that the “FDA believes that the arguments presented, individually and collectively, do not establish the safety of SLH for consumption, nor do they point to a general recognition of safety.”“The FDA told Impossible Foods that its burger was not going to meet government safety standards, and the company admitted it didn’t know all of its constituents. Yet it sold it anyway to thousands of unwitting consumers. The FDA’s safety designation of “generally recognized as safe” (GRAS)  allows a manufacturer, like Impossible Foods, to decide for itself, without FDA input, whether or not a product is safe. The self-determination does not require notice to the public or the FDA, and may apply to food chemicals regardless of industry conflicts of interest, or whether the chemicals are new or not widely studied.  Despite touting the color properties of the engineered “heme,” Impossible Foods did not seek FDA approval as a color additive, which has stricter safety regulations.

    Scientists gene-edit piglets, bringing transplants to humans closer: Scientists have successfully edited the genetic code of piglets to remove dormant viral infections, a breakthrough that could eventually pave the way for animal-to-human organ transplants. Their work, documented in the US journal Science on Thursday, could save lives by reducing organ donor waiting lists that have risen over the years, partly thanks to better road safety. There are some 117,000 people on the US transplant waiting list alone, according to official data, while 22 people die each day waiting for an organ. Harvard University geneticists George Church and Luhan Yang, together with a team of Danish and Chinese collaborators, placed edited embryonic cells into a chemical cocktail that encouraged growth and overcame the destructive effect inherent in the modification process. They then used a standard cloning technique to insert the edited DNA into egg cells that were placed into a surrogate mother. "Before our study, there was huge scientific uncertainty about whether the pig [produced after this editing] is viable," Yang said, adding the team had now produced 37 piglets free of the porcine endogenous retroviruses (PERVs). "If this is correct, it's a great achievement," said virologist Joachim Denner of the Robert Koch Institute in Berlin, an expert in the retroviruses. It is not clear whether PERVs would infect humans who receive pig organs, but lab studies have shown human cells can be infected by the viruses in a dish. Humans can already receive pig heart valves and pancreases, but scientists have long sought to make their entire organs, which grow to around human size, available for harvest.

    These Scientists Took Over a Computer by Encoding Malware in DNA -- DNA is fundamentally a way of storing information. Usually, it encodes instructions for making living things—but it can be conscripted for other purposes. Scientists have used DNA to store books, recordings, GIFs, and even an Amazon gift card. And now, for the first time, researchers from the University of Washington have managed to take over a computer by encoding a malicious program in DNA.Strands of DNA are made from four building blocks, represented by the letters A, C, G, and T. These letters can be used to represent the 1s and 0s of computer programs. That’s what the Washington team did—they converted a piece of malware into physical DNA strands. When those strands were sequenced, the malware launched and compromised the computer that was analyzing the sequences, allowing the team to take control of it.“The present-day threat is very small, and people don’t need to lose sleep immediately,” says Tadayoshi Kohno, a computer security expert who led the team. “But we wanted to know what was possible and what the issues are down the line.” The consequences of such attacks will become more severe as sequencing becomes more commonplace. In the early 2000s, it cost around $100 million to sequence a single human genome. Now, you can do it for less than $1,000. The technology is not just cheaper, but also simpler and more portable. There are even pocket-sized sequencers that allow people to analyze DNA in space stations, classrooms, and jungle camps. But with great ubiquity comes great vulnerability. DNA is commonly used in forensics, so if troublemakers could hack sequencing machines or software, they could change the course of an investigation by altering genetic data. Or, if machines are processing confidential data about genetically modified organisms, hackers could steal intellectual property. “We want to understand and anticipate what the hot new technologies will be over the next 10 to 15 years, to stay one step ahead of the bad guys,” says Kohno. In 2008, his team showed that they could wirelessly hack their way into a heart implant, and reprogram it to either shut down or deliver debilitating jolts. In 2010, they showed that they could hack into the control system of a Chevrolet Impala, taking control of the car. Then, they turned their attention to DNA sequencing. “It’s an emerging field that other security researchers haven’t looked at, so the intrigue was there,” says Kohno. “Could we compromise a computer system with DNA biomolecules?”

    Infected DNA successfully hacks computer in terrifying experiment -- Remember a few month ago when we were all laughing at Harvard scientists for putting a GIF inside a strand of DNA? Now that bridge between technology and the substance that makes up every living organism has taken a much darker turn. Researchers at the University of Washington took control of a machine using a malicious strand of DNA in what is being considered the first “DNA-based exploit of a computer system.” Malicious software was encoded into short strands of DNA that scientists purchased online. When analyzed, the infected DNA corrupted gene-sequencing software, allowing researchers to take “full control” of the underlying system. Researchers believe the remarkable feat could one day become practical for illegal hacking as DNA sequencing becomes more popular and powerful. They warn that criminals could use blood or saliva samples to gain access to places they know will sequence them, like university computers, police forensics labs, or genetics laboratories. This could potentially give hackers access to sensitive information and enough control to tamper with DNA evidence. “There are a lot of interesting—or threatening may be a better word—applications of this coming in the future,” Peter Ney, a researcher on the project, told Wired.

    Deadly drug-resistant fungus sparks outbreaks in UK—and it’s stalking US -- More than 200 patients in more than 55 UK hospitals were discovered by healthcare workers to be infected or colonized by the multi-drug resistant fungus Candida auris, a globally emerging yeast pathogen that has experts nervous.Three of the hospitals experienced large outbreaks, which as of Monday were all declared officially over by health authorities there. No deaths have been reported since the fungus was first detected in the country in 2013, but 27 affected patients have developed blood infections, which can be life-threatening. And about a quarter of the more than 200 cases were clinical infections.Officials in the UK aimed to assuage fear of the fungus and assure patients that hospitals were safe. “Our enhanced surveillance shows a low risk to patients in healthcare settings. Most cases detected have not shown symptoms or developed an infection as a result of the fungus,” Dr Colin Brown, of Public Health England's national infection service, told the BBC.Yet, public health experts are uneasy about the rapid emergence and level of drug resistance the pathogen is showing. In a surveillance update in July, the US Centers for Disease Control and Prevention said that C. auris “presents a serious global health threat.” It was first identified in the ear of a patient in Japan in 2009. Since then, it has spread swiftly, showing up in more than a dozen countries, including the US, according to the CDC. So far, health officials have reported around 100 infections in nine US states and more than 100 other cases where the fungus was detected but wasn’t causing an infection.

    First human case of West Nile virus reported in Ohio - The first human case of West Nile virus in Ohio this year has been reported in Clermont County, the state health department said Wednesday.A 44-year-old man from the southwestern Ohio county is recovering from the West Nile infection and did not require hospitalization, the department said. Last year, the department reported 17 human cases of the infection. West Nile virus is usually contracted through a mosquito bite. About 1 in 5 people who become infected develop a fever that could be accompanied by headache, body aches, joint pains, vomiting, diarrhea or rash. Less than 1 percent develop a serious neurologic illness such as meningitis.This year, 29 of Ohio's 88 counties have reported West Nile virus activity in mosquitoes collected as part of state monitoring.State Epidemiologist and Bureau Chief of Infectious Disease Sietske de Fijter said Ohio could see more positive mosquito samples and human cases of West Nile this time of year.

    Popular Pesticides Keep Bumblebees From Laying Eggs -- Bumblebees play just as crucial a role in pollinating many fruits, vegetables and wildflowers, and compared to managed colonies of honeybees, they're in much greater jeopardy. A group of scientists in the United Kingdom decided to look at how bumblebee queens are affected by some widely used and highly controversial pesticides known as neonicotinoids. What they found isn't pretty. Neonics, as they're often called, are applied as a coating on the seeds of some of the most widely grown crops in the country, including corn, soybeans and canola. These pesticides are "systemic" — they move throughout the growing plants. Traces of them end up in pollen, which bees consume. Neonicotinoid residues also have been found in the pollen of wildflowers growing near fields and in nearby streams.The scientists, based at Royal Holloway University of London, set up a laboratory experiment with bumblebee queens. They fed those queens a syrup containing traces of a neonicotinoid pesticide called thiamethoxam, and the amount of the pesticide, they say, was similar to what bees living near fields of neonic-treated canola might be exposed to. Bumblebee queens exposed to the pesticide were 26 percent less likely to lay eggs, compared to queens that weren't exposed to the pesticide. The team published their findings in the journal Nature Ecology and Evolution.

    Heavily used pesticide linked to breathing problems in farmworkers' children -- Elemental sulfur, the most heavily-used pesticide in California, may harm the respiratory health of children living near farms that use the pesticide, according to new research led by UC Berkeley. In a study of children in the agricultural community of Salinas Valley, California, researchers found significant associations between elemental sulfur use and poorer respiratory health. The study linked reduced lung function, more asthma-related symptoms and higher asthma medication use in children living about a half-mile or less from recent elemental sulfur applications compared to unexposed children. The EPA generally considers elemental sulfur as safe for the environment and human health, but previous studies have shown that it is a respiratory irritant to exposed farmworkers. Elemental sulfur's effect on residential populations, especially children, living near treated fields has not previously been studied despite the chemical's widespread use and potential to drift from the fields where it is applied. This study is the first to link agricultural use of sulfur with poorer respiratory health in children living nearby. The study was published August 14 in the journal Environmental Health Perspectives. The research was funded by the National Institute of Environmental Health Sciences and the Environmental Protection Agency. Rachel Raanan, a UC Berkeley postdoctoral fellow and the study's lead author, was supported by the Environment and Health Fund in Israel. Research protocols were approved by the UC Berkeley Committee for the Protection of Human Subjects.

    Collusion or Coincidence? Records Show EPA Slowed Glyphosate Review in Coordination With Monsanto - Newly released government email communications show a persistent effort by multiple officials within the U.S. Environmental Protection Agency (EPA) to slow a separate federal agency's safety review of Monsanto's top-selling herbicide. Notably, the records demonstrate that the EPA efforts came at the behest of Monsanto, and that EPA officials were helpful enough to keep the chemical giant updated on their progress.  The communications, most of which were obtained through Freedom of Information Act (FOIA) requests, show that it was early 2015 when the EPA and Monsanto began working in concert to stall a toxicology review that a unit of the Centers for Disease Control and Prevention (CDC) was conducting on glyphosate , the key ingredient in Monsanto's branded Roundup herbicide products. The details revealed in the documents come as Monsanto is defending itself against allegations that it has tried to cover up evidence of harm with its herbicides.  The Agency for Toxic Substances and Disease Registry (ATSDR), a federal public health agency within the CDC that is part of the U.S. Department of Health and Human Services (HHS), is charged with evaluating the potential adverse human health effects from exposures to hazardous substances in the environment. So it made sense for the ATSDR to take a look at glyphosate, which is widely used on U.S. farms, residential lawns and gardens, school playgrounds and golf courses. Glyphosate is widely used in food production and glyphosate residues have been found in testing of human urine.  The ATSDR announced in February 2015 that it planned to publish a toxicological profile of glyphosate by October of that year. But by October, that review was on hold, and to this date no such review has yet been published.  The documents reveal this was no accident, no bureaucratic delay, but rather was the result of a collaborative effort between Monsanto and a group of high-ranking EPA officials.  "These new documents are particularly alarming because they prove that Monsanto's efforts to capture EPA and subvert it's mission to safeguard public-health were largely successful," said Robert F. Kennedy, Jr. , an environmental lawyer who is representing plaintiffs pursuing claims against Monsanto.  "Those schemes allowed the company to pull puppet strings and exercise pervasive control at the supervisory level across several agency branches."

    The EPA Stalls for Monsanto -- The EPA’s most common practice is to receive PR copy from corporations like Monsanto and launder Monsanto’s lies to the public with its own “regulatory” imprimatur. But sometimes the collaboration is more actively hands-on, as in this long-running delay of a toxicological review of glyphosate. The new review was promised for 2015. The delay leaves in place the EPA’s 2013 proclamation denying the fact that glyphosate causes cancer. This proclamation was a prime example of the stenography and rubber-stamping of the corporation’s own self-description I mentioned above. This new information about EPA/Monsanto collusion is the latest to come out of the many cancer lawsuits Monsanto is now fighting. Note well, this is Obama’s EPA in action. The Obama administration was the most aggressively pro-pesticide and pro-GMO to date. Trump certainly will try to catch up and surpass Obama, but as with so many other crimes against humanity and the Earth, he has a long, long way to go.

    Toxic eggs expose EU’s struggle to police food safety  - A snowballing scandal over a toxic insecticide found in eggs in 15 EU countries is exposing alarming weaknesses in the mechanisms for protecting Europeans from cross-border food poisoning cases. Food safety is one of the EU’s core competencies, but the widening panic over fipronil in eggs during the past two weeks underscores how difficult it is for Brussels to police its own laws if member countries fail to flag concerns quickly or keep data secret — and bicker with their neighbors over who is responsible. Belgium first received information about dangerous levels of fipronil, which can cause liver damage in humans, in eggs on June 2. Soon after, it launched a criminal investigation into the owner of a Flemish company called Poultry Vision, which put the illegal chemical into a detergent for killing chicken mites. However, Belgium waited until July 20 to inform its European partners of the health scare via the EU’s Rapid Alert System for Food and Feed (RASFF). Under EU law, a country must “immediately notify the [European] Commission under the rapid alert system” if it has any information relating to the existence of a “serious direct or indirect risk to human health deriving from food or feed.” Germany was furious about Belgium’s poor communication, but Belgian authorities offered several excuses for their failure to issue an immediate alert. First, Belgium argued that its ability to communicate was restricted by the investigation into the Flemish detergent maker. It also suggested that it didn’t sound the alarm on June 2 because the fipronil test was made privately by a farm rather than as part of an official probe. Finally, Belgium said it was unable to carry out further investigations without information from the Netherlands . The Netherlands, meanwhile, knew about the presence of fipronil in its eggs on June 15 and also failed to issue a warning to the EU or its partners. Poultry Vision’s coop-cleaning liquid was largely sold to farms by a Dutch business called ChickFriend.

    New Drone Footage Exposes the Horrors of Factory Farming -- The animal agriculture industry spends millions on deceptive advertising to persuade consumers that farmed animals roam freely on bucolic pastures. But I've been piloting drones over animal agriculture facilities for several years, and the video I've captured tells a far different story. Nearly all animals raised and slaughtered for food in the U.S. live in factory farms —facilities that treat animals as mere production units and show little regard for the natural environment or public health. Instead of creating widgets, these factories confine, mutilate and disassemble animals who feel pain and pleasure just like our dogs and cats. Aerial views of the first factory farms I visited— pig facilities —didn't capture grass and rolling hills, but instead exposed rows of windowless metal buildings. Each confined thousands of intelligent, sensitive pigs who spent their lives on concrete floors in crowded pens. The footage also reveals what appear to be red lakes but are in fact giant, open-air cesspools. Waste falls through slats in the pigs' concrete flooring and is flushed into these massive pits, which sometimes have the surface area of multiple football fields. To lower the levels of these cesspools, many facilities spray their contents into the air where they turn into mist and drift into neighboring communities. In North Carolina, this practice has been associated with spikes in blood pressure among community members and increased asthma symptoms among nearby schoolchildren. I spoke with neighbors who described walking outside and falling down in their own front yards because the stench of these factory farms made it so difficult to breathe.

    Factory farming in Asia creating global health risks, report warns - The use of antibiotics in factory farms in Asia is set to more than double in just over a decade, with potentially damaging effects on antibiotic resistance around the world.Factory farming of poultry in Asia is also increasing the threat of bird flu spreading beyond the region, with more deadly strains taking hold, according to a new report from a network of financial investors.Use of antibiotics in poultry and pig farms will increase by more than 120% in Asiaby 2030, based on current trends. Half of all antibiotics globally are now consumed in China alone. The Chinese meat and animal feed producers New Hope Group and Wen’s Group are now among the 10 biggest animal feed manufacturers in the world. The growth of Asian meat production in intensive units is also producing a rise in greenhouse gas emissions from the food chain, with emissions likely to rise by more than 360m tonnes, the equivalent of running 100 coal-fired power plants for a year. There are knock-on impacts such as deforestation, as China’s need for animal feed is responsible for more than a third of Brazil’s soybean production.The report, Factory Farming in Asia: Assessing Investment Risks, comes three years after a meat scandal in China, in which suppliers to McDonalds, KFC and others were found to be using dirty meat and products past their sell-by date. It also comes in the midst of a growing food scandal in Europe, which has required the recall of millions of eggs tainted with harmful chemicals, and as concerns have been aired over the impact of Brexit on imports of farm products to the UK. Asian food companies have rapidly expanded their meat production in response to growing populations and the tastes of the rising middle class, but this expansion has come to the detriment of food safety.   “Investors have a big appetite for the animal protein sector in Asia. But the growth is driven by a boom in factory farming that creates problems like emissions and epidemics, abuse of antibiotics and abuse of labour.”

    The 13 most dangerous foods in the world -- When it comes to the world's most dangerous foods, you probably think of exotic delicacies that most people will never come in contact with. Sure, a live Korean octopus that fights back when you swallow it may fit that criteria, but some of the worst food dangers are probably in your fridge or pantry right now.We've rounded up the 13 most dangerous foods in the world (with some help from from Dr. Keith Kantor, nutritionist and CEO of the Nutritional Addiction Mitigation Eating and Drinking program), from poisonous produce to hygienically unsound dishes. However, sometimes it's the most seemingly innocuous foods could land you in the hospital.  Keep scrolling at your own risk.

    New Report Finds 'Erin Brockovich' Carcinogen in Water Supply for 250 Million Americans  -- In 2016, an EWG report found that chromium-6—a cancer -causing compound made notorious by the film "Erin Brockovich"—contaminated the tap water supplies of 218 million Americans in all 50 states. But our just-released Tap Water Database shows the problem is even worse than that.  Based on test results obtained directly from almost 50,000 local water utilities, drinking water supplies for about 250 million Americans are contaminated with chromium-6. For about 231 million people, drinking water supplies have average levels of chromium-6 exceeding the one-in-a-million cancer risk level determined by California state scientists.  That may still underestimate the number of people exposed because water from most smaller utilities and private wells usually is not tested for chromium-6. Although it's been almost a decade since the National Toxicology Program found the compound caused cancer in rodents when ingested, there are no federal regulations on chromium-6 in drinking water and no federal requirements for regular monitoring of chromium-6 in tap water.

    Groups Sue EPA for Weakening Toxic Chemical Rules --"The fox guarding the hen house" aptly describes the inner workings of the U.S. Environmental Protection Agency ( EPA ) under the Trump administration . A major case in point: The EPA official tasked to head up the Chemical Safety and Pollution Prevention office, Nancy Beck, came to the job after working as a former high-level official for a chemical industry association. She was charged with updating the Toxic Substances Control Act (TSCA) , which addresses the production, use and disposal of such chemicals as polychlorinated biphenyls (PCBs), asbestos, radon and lead -based paint. Not surprisingly, Beck's updated TSCA regulations significantly weaken government regulations over these chemicals in consumer products and building materials by removing the provision for regulating all uses of chemicals. In response, Earthjustice filed two lawsuits against the EPA late last week for weakening these regulations. The suits were filed on behalf of organizations representing populations that are most at risk from weakened chemical regulations—low-income communities, parents and teachers of children with learning disabilities, workers and indigenous populations.   The lawsuits challenge two EPA regulations that set ground rules for how the EPA will prioritize chemicals for safety review and then evaluate the risks of those chemicals under TSCA.  "We need to know the risks of chemicals used in our communities because exposure often exacerbates health disparities and outcomes. Enforcement of chemical laws to keep our communities healthy should be a top priority for the EPA."  Regarding the harm of toxic chemicals to children, Patricia Lillie, president of the Learning Disabilities Association of America, said, "These rules ... give the EPA authority to choose to ignore chemical uses that could result in prenatal and children's exposures to chemicals that are linked to learning and developmental disabilities."

    In First 6 Months Under Trump, Polluters Already Paying Lower Fines to EPA - It hasn’t taken long for Donald Trump to make his mark (well, many marks) on the U.S. Environmental Protection Agency (EPA). In the first six months in office, his EPA under Scott Pruitt has already seen a precipitous drop in enforcement for violators of major environmental laws, such as the Clean Air Act and Clean Water Act. So far, the Trump administration has collected 60 percent less in fines for civil lawsuits against polluters on average, compared to the previous three administrations. This information, which excludes Superfund and criminal cases, was highlighted in a report released today by the nonprofit Environmental Integrity Project. “This report now illustrates that Scott Pruitt is unwilling or unable to carry out the basic statutory mission of the EPA, which is enforcement of our environmental laws,”  This is despite Pruitt’s stated desire to return the agency to its “core statutory mission” of protecting air, water, and land. In a May press release supporting Trump’s proposed 31 percent budget cut for EPA, Pruitt stated, “This budget supports EPA’s highest priorities with federal funding for priority work in infrastructure, air and water quality, and ensuring the safety of chemicals in the marketplace.” That proposed budget would slash funding for enforcement by 23 percent. Even with current funding levels, the EPA under Pruitt has pursued fewer cases enforcing environmental protections and collected smaller fines — less than half the total amount of other administrations in their early days. Eric Schaeffer, executive director of the Environmental Integrity Project and former Director of Civil Enforcement at EPA, pointed to what he saw as the focus instead for the current administration: “The leadership in EPA is very focused on rollback. They never talk about enforcement. The agenda is to knock out as many rules as possible and change as many environmentally friendly policies as possible.” As of July 1, The New York Times reported that “Scott Pruitt has moved to undo, delay, or otherwise block more than 30 environmental rules, a regulatory rollback larger in scope than any other over so short a time in the agency’s 47-year history, according to experts in environmental law.  As for chemical safety, Trump’s proposed budget would eliminate a program allowing industry to digitally report the shipment of hazardous waste around the nation, which means EPA would be stuck tracking the movement of dangerous chemicals on paper.

    Trump Eliminates Water Bottle Ban in National Parks, Removes White House Bikeshare Station - President Trump has made sweeping efforts to scrap Obama-era environmental protections, but the current administration's latest moves are oddly specific. The National Park Service (NPS) announced Wednesday that it has rescinded the 2011 "Water Bottle Ban" that allowed parks to prohibit the sale of disposable plastic water bottles. That same day, news emerged that the Trump administration removed a nine-slot Capital Bikeshare station at the White House that was requested and installed during the Obama years and used by staffers.  The NPS said that the bottled water ban "removed the healthiest beverage choice at a variety of parks while still allowing sales of bottled sweetened drinks." Revocation of the 2011 memorandum is effective immediately. 

    Court keeps Great Lakes wolves on endangered species list   - A federal appeals court Tuesday retained federal protection for gray wolves in the western Great Lakes region, ruling that the government made crucial errors when it dropped them from the endangered species list five years ago. The court upheld a district judge who overruled the U.S. Fish and Wildlife Service, which had determined that wolves in Michigan, Minnesota and Wisconsin had recovered after being shot, trapped and poisoned nearly out of existence in the previous century. They've bounced back and now total about 3,800. Even so, courts have sided with environmental groups led by the Humane Society of the United States, which have sued to block the service's repeated efforts to strip wolves in the region of their protected status and put states in charge of them. The service made its latest attempt in 2011. U.S. Judge Beryl A. Howell struck down the plan three years later. In a 3-0 ruling Tuesday, a panel of the U.S. Court of Appeals for the District of Columbia Circuit said the service had not sufficiently considered important factors. They included how loss of historical territory would affect the predator's recovery and how removing the Great Lakes population segment from the endangered list would affect wolves in other parts of the nation. As long as wolves are on the protected list, they cannot be killed unless human life is at risk. That means the three states cannot resume the hunting and trapping seasons they had when wolves were under their control.

    Algal blooms cost Ohio homeowners $152 million over six years - In a new study, researchers at The Ohio State University estimate algal blooms at two Ohio lakes cost Ohio homeowners $152 million in lost property value over six years.Meanwhile, a related study suggests that algae is driving anglers away from Lake Erie, causing fishing license sales to drop at least 10 percent every time a bloom reaches a moderate level of health risk. Based on those numbers, a computer model projects that a severe, summer-long bloom would cause up to $5.6 million in lost fishing revenue and associated expenditures by anglers.Those are the main findings from the first two studies ever to put a precise dollar value on algae impact, both on Lake Erie and two recreational lakes in Ohio. One study appears in the journal Ecological Economics, and the other in the Journal of Environmental Management. "Our biggest takeaway is that efforts to prevent and mitigate algal blooms have real, tangible benefits for Ohioans, including property values,"  As it turns out, people have a pretty low tolerance for algae. They devalued a lake property the moment the Ohio EPA announced that the water was unsafe to drink—the lowest warning level by WHO standards—even though the lakes included in the study were recreational and weren't used for drinking water. They began fishing elsewhere after the warning level rose to "moderate" risk for incidental ingestion of the water. In both cases, higher algae levels didn't seem to matter.

    Baby Dolphin Dies After Beachgoers Pull It From Water For Selfies - A baby dolphin died last Friday in southern Spain after beachgoers took the mammal out of the water and passed it around for photos, according to media reports. The incident was detailed in several Facebook posts from Equinac , a Spanish marine wildlife conservation group. The organization said the dolphin was stranded on the beach when a mob of "curious" people quickly gathered to touch it and to take photos of it rather than seek help for it. A concerned beachgoer eventually called for emergency services, but the dolphin died before rescuers got to the scene. "Once again we note that the human being is the most irrational species that exists," Equinac wrote on Facebook.   "There are many [who are] incapable of empathy for a living being that is alone, scared, starved, without his mother and terrified ... All you want to do is to photograph and poke, even if the animal suffers from stress."

    Climate change is disrupting the birds and the bees -- While humans and many other animals determine sex genetically, many reptiles and some fish use the incubation temperature of the eggs to set the gender of their offspring. This means that changing global temperatures could alter the ratio of sexes produced, making it harder for these animals to find mates.  Eastern three-lined skink females can partially compensate for temperature increases by digging deeper nests and laying earlier in the season. Nevertheless, according to a study published in 2009, their nests still warmed by 1.5C over 10 years. This shifted the sex ratio towards females. Not every species is as badly affected. Australian water dragon females have been shown to buffer temperature differences of 4C by nesting in sunnier or shadier locations. When it comes to climate change, behavioural flexibility is often a big advantage.  In the plant world, temperature can influence sex ratios in more subtle ways. For example, the tobacco root plant, which lives in alpine meadows in North America, has been producing ever more male plants over the last 40 years. This may be due to reduced water availability, since females require more water to develop. Meanwhile, the majority of the world’s sea turtles use temperature to set the sex of their offspring. “Embryos are laid with no gender,” says Graeme Hays of Deakin University in Australia. “They can develop into males or females.”  Warmer eggs develop into females, cooler eggs into males. “Temperature during the middle third of incubation controls the sex,” says Hays, by switching on and off the genes that trigger development into either a male or a female. The difference between male and female is just a couple of degrees. That means even slight changes in the climate could skew the sex ratio, making males harder to find. Incubation temperatures above 29C are predicted to produce increasingly female-biased clutches.  Over the last century, the sex ratios of green turtles, hawksbill turtles and leatherback turtles have become increasingly sex-biased. By 2030, the percentage of male green turtles produced has been predicted to drop to just 2.4%. “All else being equal, a warming climate will produce more female sea turtle hatchlings,” says Hays.’

    Pakistani province plants one billion trees to help slow down effects of global warming --  A province in Pakistan has planted a billion trees in just two years as part of an effort to restore forests wiped out by decades of felling and natural disasters such as floods. Cricket-star turned politician Imran Khan, who heads the political party Pakistan Tehreek-e-Insaf (PTI), launched the green mission in Khyber Pakhtunkhaw in the north-west of the country. The project – dubbed Billion Tree Tsunami – aims to slow down the effects of global warming in Pakistan which ranks in the Top 10 in a list of countries most likely to be affected by the phenomenon. And the effort in the province, which lies in the Hindu Kush mountain range, has surpassed an international commitment after it restored 350,000 hectares of forests and degraded land. The work in Khyber Pakhtunkhaw was focussed along the area beside the Gambila River, in the Bannu District, where vast swathes of forest were wiped out in the past after its banks broke. The Billion Tree Tsunami was completed this month ahead of the deadline set for December 2017 and is expected to be extended across Pakistan. It comes after decades of tree felling have reduced the country’s forests to less than 3 per cent of its land area. About 40 per cent of the remaining forests are in the north-western province.  

    ‘Flash drought’ threatens crops and cattle — As wildfires blaze across the West, parts of Montana and the Dakotas are experiencing one of the worst droughts in recent memory. With pastures so parched that they can’t support cattle, ranchers are accepting donations of hay from wetter parts of the country and selling their animals and considering taking second jobs to get by. Farmers are also struggling. Crop harvests are a fraction of normal — the estimated yield for durum wheat in North Dakota and Montana, for example, is about half what it was last year.The current catastrophe began as a “flash drought,” a dry period that comes on very quickly. Late spring and early summer are typically pretty soggy in the northern Great Plains — but not this year, says Natalie Umphlett, regional climatologist and interim director of the High Plains Regional Climate Center at the University of Nebraska. If the region doesn’t get enough rain during that critical time, she says, “it’s hard to make that up.”The drought is expected to persist across eastern Montana and the western side of the Dakotas through at least the end of October, according to the July 20 seasonal outlook produced by the National Weather Service’s Climate Prediction Center. Even if the region does get more rain, it’s too late for some plants, says F. Adnan Akyüz, the North Dakota state climatologist and a professor at North Dakota State University. If certain crops don’t germinate or emerge early in the season, the impact is “irreversible,” Akyüz says. “Any additional precipitation is not going to fill the gaps.”With this particular dry spell still unfolding, it’s too early to tell if it was caused by climate change, Umphlett says. But droughts like this one will likely become more common in the future. That’s in part because plants use more water when they’re heat stressed,  Umphlett says, so rising temperatures mean the amount of rain that sufficed in the past may no longer be enough to satiate thirsty plants.

    Ecosystems facing ‘double whammy’ due to increasing impacts of drought -- Trees and plants across the world are increasingly in “recovery mode” after a drought, a new study says, and they’re taking longer to bounce back. The research, published in Nature, maps how much of the Earth’s vegetation is recovering after a drought and how recovery times have changed since 1901. The findings suggest that “we are likely headed to a new normal where time between droughts is shorter than the recovery time”, the lead author tells Carbon Brief. This could lead to widespread changes to ecosystems, reducing the amount of CO2 they can take up from the atmosphere, he warns. When the clouds roll in and rain returns to an area parched by drought, it is just the beginning of the recovery. For the plants and trees, returning to the pre-drought levels of growth can take months or even years. It is this recovery time that the new study tracks. It uses data on vegetation growth (strictly speaking, “gross primary productivity”) from 1901 to 2010. The data come from three different sources: satellite data (covering 2000-2010), a global network of observational towers that measure exchanges of CO2 and water between the land and atmosphere (1982-2008), and earth system model simulations (1901-2010). The findings suggest that more of the Earth’s land surface is being affected by drought now than it was a century ago and that recovery times are getting longer. The upper chart below shows the global average area recovering from drought for each decade since the start of the 20th century. The coloured markers show the area recovering from drought for one month (red), six months (pink), one year (blue) and two years (black).

    Tagus river at risk of drying up completely -  The Tagus river, the longest in the Iberian peninsula, is in danger of drying up completely as Spain once again finds itself in the grip of drought. Miguel Ángel Sánchez, spokesman of the Platform in Defence of the Tagus, says “the river has collapsed through a combination of climate change, water transfer and the waste Madrid produces.” The Tagus, known in Spanish as the Tajo and Portuguese as the Tejo, rises in Aragón in northern Spain, passes close to Madrid and forms part of the border with Portugal before flowing into the sea at Lisbon. En route, it is dammed no fewer than 51 times in Spain alone. But its troubles begin at the headwaters in Aragón. In 1902 a plan was conceived to siphon off water from here and divert it to the Segura river to irrigate farms in the arid southeast in what is known as the Tajo-Segura transfer. Construction began in 1966 and water started flowing out of the dammed Tagus headwaters to the Segura in 1979. However, the amount of available water was miscalculated and Spain’s cyclical droughts were not factored in. Today only 47% of the predicted water resources exist and levels in the two headwater dams are down to 11% capacity, too low to allow any transfers. “All of these problems derive from designing a water transfer from the headwaters of a river, overestimating the available resources and joining two areas with similar climate cycles,” says Nuria Hernández-Mora, a founding member of the Foundation for a New Water Culture. “The transfer has served to create social and political conflict and turn the Tagus into one of the rivers in the worst ecological state in the peninsula.” Siphoning off the headwaters is only permitted when the dams have sufficient water – previously this was just an option, not a guarantee of supply. However, the government recently passed a law that says that as soon as there is a surplus there is an obligation to transfer it, making it impossible to store water to cope with droughts. Even after about 65% is siphoned to the Segura, it still has to supply Madrid’s 6 million inhabitants, whose inadequately treated waste water is dumped back into the river further downstream. The water from the Tagus is also used to cool nuclear reactors. 

    Deepening drought hits Ethiopia herders as millions go hungry | Reuters: Livestock are dying in parts of Ethiopia that are overwhelmingly reliant on their milk as deepening drought pushes up the number of districts in need of life-saving aid by 19 percent, according to a report released on Thursday. At least 8.5 million people in 228 districts of Ethiopia need urgent food aid in the second half of the year, up from 5.6 million in January, according to the study published on ReliefWeb, a website run by the United Nations. Ethiopia's eastern Somali region is one of the country's worst affected zones and is home to a quarter of the country's cases of severe acute malnutrition, U.N. agencies said. Severe acute malnutrition is a condition that kills up to half of sufferers under five years old. "The number of districts requiring immediate, life-saving intervention increased to levels not seen since the height of the El Niño drought impacts in 2016," said the joint report, which was compiled by the U.N. and the Ethiopian government. Eastern and southern Africa were hit hard last year by drought exacerbated by El Niño - a warming of sea-surface temperatures in the Pacific Ocean - that wilted crops, slowed economic growth and drove food prices higher. A strong aid response almost halved the number of Ethiopians needing food aid to 5.6 million since mid-2016. But the devastating drought was followed by poor spring rains this year in the southern and eastern parts of the country. Since the end of last year, about 2 million animals have died in Somali region, which is home to many herding communities, according to the U.N. Food and Agriculture Organization (FAO). "For livestock-dependent families, the animals can literally mean the difference between life and death, especially for children, pregnant and nursing women for whom milk is a crucial source of nutrition,"

    Kuwait’s inferno: how will the world’s hottest city survive climate change? - It is 9am and the temperature in Kuwait City is 45C and rising, but already people working outside. A row of litter-pickers are already hard at work along a coastal highway, their entire bodies covered to protect them from the sun. Outside one of the city’s many malls, valets hover beside the air-conditioned entrance, while two men in white hats huddle wearily next to their ice cream stands.Other city residents are luckier. They can avoid the outdoors altogether, escaping the inferno by sheltering in malls, cars and office buildings, where temperatures are kept polar-cold. For years, Kuwait’s climate has been steadily heating up. In the summer months, the Gulf state now frequently touches 50C, and was last year awarded the grim prize of being the hottest place on earth, when temperatures reached a staggering high of 54C. But while the capital is making plans to prepare for climate change and the rising heat, there are growing concerns for those residents who cannot afford to shelter inside, and mounting questions about how such an energy-intensive city can survive as resources such as water and oil dwindle. Nearly 70% of Kuwait’s population is made up of migrant workers, many of whom power the near-constant construction of new office complexes and malls across the state.   “Here in Kuwait or in the Gulf, you can see that most of the labourers are not citizens. They come from Egypt, India or Bangladesh.” Many of the toughest jobs on the site are subcontracted out, he explained, allowing companies to flout laws designed to shield workers from the heat.  If the labourers decline to work in these conditions, “they won’t get any money and will be forced to return to their home countries”, he said.   The conditions for those men and women forced to work outside are set to worsen: between 2010 and 2035, Kuwait’s annual average temperature will increase by 1.6% to 28.7C , according to the country’s Environmental Public Authority (EPA), making for increasingly sweltering summer temperatures and more of the dust storms that already plague Kuwait City and beyond.

    Aid workers struggle as South Asia floods affect more than 16 million  - More than 16 million people have been affected by floods in South Asia, aid workers and officials said, with heavy rains and damaged roads hampering relief efforts amid severe food shortages and a growing risk of waterborne diseases. Heavy monsoon rains in Nepal, Bangladesh and India have killed more than 343 people, officials and aid workers said. "This is fast becoming one of the most serious humanitarian crises this region has seen in many years," said Martin Faller, deputy regional director for Asia Pacific at the International Federation of Red Cross and Red Crescent Societies. "Millions of people face severe food shortages and disease. We fear (it) will get worse in the days and weeks ahead." More than a third of Bangladesh and Nepal have been flooded, Faller said. In Nepal, 27 of 75 districts were either submerged or hit by landslides, leaving villages and communities stranded without food, water and electricity. Home Ministry official Shankar Acharya said 131 people had been killed and 30 were missing. "We need donors' assistance and support from social organizations," an official statement said. Aid workers are rushing to deliver tarpaulins for temporary shelter, food and water, said Dev Ratna Dhakhwa, secretary general of the Nepal Red Cross Society. Residents face "severe food shortages" as food crops have been wiped out in the worst floods in 15 years, he said. The risk of a "significant public health crisis" from waterborne diseases such as cholera is also high, charity WaterAid said. 

    What will become of Bangladesh's climate migrants?  - Bangladesh’s prime minister Sheikh Hasina has told the UN that a one-metre rise in sea level – a plausible scenario this century – would submerge a fifth of the country and turn 30 million people into “climate migrants”. Sea levels are set to rise, compounding the problem of salt intrusion into groundwater. Tropical cyclones are expected to get more intense and destructive with global warming. In combination, they raise the risk of another devastating storm surge.Over the past two decades, Bangladesh’s rural population has been pouring into its cities. A 2014 slum census found the number of people living on the margins of cities had doubled to 2.2 million since 1997. Meanwhile, the population in southwestern coastal regions is stagnating. A smaller, but significant, number of displaced people cross borders, which is where it becomes a matter of at least regional, if not international concern. Up to 20 million Bangladeshis are said to be living illegally in neighbouring India. A militarised fence along 70% of the 4,000 kilometre frontier sends an unwelcoming signal. Still, people find ways to evade the patrols, typically by boat across the rivers. 

    How Arsenic Is Poisoning a Nation -- The speckles of pigmentation start out black and then turn white, says Tariqul Islam, as he leans forward and examines Uddin. Like “raindrops on the sand,” he says, following the spatter across his patient’s skin. These are the telltale signs of arsenic poisoning. Uddin lives in the village of Totar Bagh, an agricultural community of corrugated iron and concrete huts set amongst rice fields and woodlands to the east of Dhaka, Bangladesh’s capital. Colorful laundry hangs amidst palm trees over the earthen floor, as families go about their business of cleaning, cooking, and fetching water from shallow, hand-pumped wells.It is the well water that has brought Islam to the village today. He is working with the University of Chicago and Columbia University to study the effects of long-term exposure to the famously risky element arsenic. About half of the wells in their study area of 35,000 people in the region of Araihazar contain arsenic at more than 50 parts per billion, five times the World Health Organization standard of 10. “I know this water is not good for my health, but there is nothing to do,” says Uddin. He tried installing another shallow well himself, but it was contaminated too. A deep well would have safe water, but at $1,000, it’s 10 times the cost of a shallow well and too expensive for villagers to dig without government or other outside support. He asked the local governing council for a new well, but they refused. “They told me to get better water.” One villager who did get a new well is Piar Ali Shaheb, a building contractor who is also the local representative of the ruling party. When asked if his political connections helped, he smiles: “Yes, definitely.” As he is talking, a neighbor glistening with sweat just in from the fields approaches and begins shouting at him. He says he paid money to a local politician in order to get a safe well, but it had never been delivered. Many of the other villagers have the same story, and are also frustrated.

    Gulf of Mexico ‘dead zone’ is already a disaster – but it could get worse - Each summer, a large part of the Gulf of Mexico “dies”. This year, the Gulf’s “dead zone” is the largest on record, stretching from the mouth of the Mississippi, along the coast of Louisiana to waters off Texas, hundreds of miles away. Around 8,776 square miles of ocean, an area the size of New Jersey or Wales, is almost lifeless.  John Muir, the famed naturalist and early conservation campaigner, once said that: “When we try to pick out anything by itself, we find it hitched to everything else in the Universe.” His point was that everything in nature is connected, and that no part of our ecosystem exists entirely independently from any other.  It is perhaps no surprise then that ultimate cause of the Gulf of Mexico’s dead zone can be found many miles inland. Fertilisers used by farmers then wash into the Mississippi River and eventually into the sea, where nutrients such as nitrogen and phosphorus stimulate an explosion in microscopic algae, creating huge “algal blooms”. The algae then die and sink to the bottom, where they decompose. But the same bacteria which decompose the algae also use the sea’s oxygen during the process, leaving an “anoxic” ocean. Fish and other mobile sea creatures are able to escape the suffocating dead zone. Less lucky however are the sponges, corals, sea squirts and other animals who live their lives fixed in one place on the sea bed. Low oxygen levels place them under great stress and we have seen huge mortalities. Such losses will of course ripple up the food web, creating a negative chain reaction of increasing mortality rates in larger and larger animals. The “dead zone” has grown this year due to increased rainfall in America’s Midwest washing ever greater amounts of nutrients into the Mississippi, which ultimately end up in the Gulf. Not only is this a huge conservation issue – the Gulf contains key nursery habitats such as mangrove forests, sea grass beds and coral reefs that benefit adjacent fisheries – but it also has huge consequences for the local fishing economy, particularly the shrimp industry.

    Huge ‘dead zone’ demands new approach – Des Moines Register -Imagine if Minnesotans and Dakotans were dumping chemicals that ended up downriver and threatened the livelihoods of Iowans. How would we react? Would we believe their assurances that they’re doing all they can? Would we give them decades to clean up their act? What would you do if you were a fisherman in Louisiana and listened as states upriver pledged to cut fertilizer use? Meanwhile, the runoff from Midwestern farm fields kept polluting the Gulf of Mexico year after year, killing fish and shrimp. And what would you think if one of those states, Iowa, resisted funding ways to keep nutrients from reaching waterways? And then it turned around and gave massive incentives to new fertilizer plants to assure a cheap supply of the pollutant?  That indeed is the situation in the Gulf of Mexico, where the “dead zone” has grown to its largest size since mapping began 32 years ago. The area of low oxygen is at least 8,776 square miles, an area about the size of New Jersey, according to the National Oceanic and Atmospheric Administration.In 2001, an EPA task force called for voluntary measures to reduce fertilizer use and a goal to reduce the dead zone to 1,900 square miles by 2015.Instead, the average size of the dead zone over the past five years has been about 5,806 square miles, three times larger than the target, NOAA said. About the only thing that’s reduced the size of the dead zone is drought.The task force still has the 1,900-square-mile goal but has extended the deadline to 2035. To reach that goal, it would take a 59 percent reduction in the amount of nitrogen entering the Gulf of Mexico, according to a study by Donald Scavia, a University of Michigan professor who was a senior scientist at NOAA from 1975 to 2003. Scavia says the voluntary approach on the Mississippi River basin has failed. “In spite of more than 30 years of research and monitoring, over 15 years of assessments and goal-setting, and over $30 billion in federal conservation funding since 1995, average nitrogen levels in the Mississippi have not declined since the 1980s,” he wrote in a piece in The Conversation.

    The world's average temperature in July 'was the second highest on record' - The China Post: - The average temperature over land and ocean surfaces for July was the second highest ever recorded for the month, according to US weather data released Thursday. The July temperature across global land and ocean surfaces was 0.83 degrees Celsius above the 20th century average of 15.8 degrees Celsius, the National Oceanic and Atmospheric Administration (NOAA) said. The NOAA global temperature dataset record dates back 138 years to 1880. The temperature is the second highest value for July during that period. The highest was recorded in 2016, NOAA said. The agency also said July 2017 marked he 41st consecutive July and the 391st consecutive month with temperatures at least nominally above the 20th century average. Nine of the 10 warmest Julys on record have occurred during the 21st century, NOAA added. Only one year from the 20th century (1998) is among the top 10 warmest Julys on record. The summary of weather data also provided details about average Arctic and Antarctic sea ice extent, saying it was 16.1 percent and 4.5 percent below the 1981-2010 average respectively in both polar regions.

    July ties record for warmest month on Earth, but I'm sure we have nothing to worry about - In a surprising finding, NASA released data Tuesday showing that July 2017 is tied for the warmest such month on record, statistically deadlocked with July 2016. This means that July was one of the warmest months the planet has seen in 137 years of record-keeping, comparable to July and August 2016, which tied for the record for the warmest month overall. What makes this year's July record noteworthy is that it occurred in the absence of a natural climate cycle, like El Niño, which would help heighten global average surface temperatures. A strong El Niño, combined with human-caused global warming, helped push 2016 to claim the record for the warmest year since reliable thermometer records began in 1880. In addition, the finding comes during a summer in which large parts of the Arctic have seen below average temperatures, bucking the recent sharp warming trend there. (Critics of NASA's temperature data sometimes argue that Arctic warming skews the agency's figures so they are biased as too high.) The global average temperature during July 2017 was 0.83 degrees Celsius, or 1.49 degrees Fahrenheit, above the monthly average, NASA found. (NASA uses a 1951 to 1980 baseline for its temperature reports.) "Only July 2016 showed a similarly high temperature [0.82 degrees Celsius above average], all previous months of July were more than a tenth of a degree cooler," NASA stated in a press release. NASA’s temperature figures for July 2017 are preliminary, and may change as more data is examined and methods are refined, according to Gavin Schmidt, the director of NASA’s Goddard Institute for Space Studies in New York. 

    Greenland is still burning, but the smoke may be the real problem -  The fires are roughly 90 miles northeast of the second-largest Greenlandic town, Sisimiut, as we previously reported. There are currently three growing hot spots, according to an analysis of NASA data by Stef Lhermitte, an assistant professor of geoscience and remote sensing at Delft University of Technology in the Netherlands. Nina-Vivi Andersen, a reporter for Nanoq News in the capital, Nuuk, has lived in Greenland her whole life and says she has never heard of a wildfire there. "It's very unusual," she says, and the timing is particularly bad because reindeer hunting season just opened on Aug. 1.  Satellite data suggests that a campfire or a cigarette likely started the fires. The wind direction has largely blown smoke toward the island's ice sheet and away from communities, including the international airport at Kangerlussuaq, where travelers said they could smell the smoke last week. But while the wind direction is good news in the short term, it may spell danger in the long term, says Jessica McCarty, an assistant professor of geography at Miami University in Ohio. "The [thing] that I'm concerned about for Greenland is the black carbon," she says, "You can think of it as the part of smoke that's black. The soot. And when black carbon deposits on ice — something that's very dark in color on something that's very white — that then speeds up the melting of the Greenland ice sheet."

    Canada's forests are on fire, and the smoke is headed for the Arctic's vulnerable ice -  Forests in Canada are ablaze, with 2.2 million acres going up in flames so far this year in British Columbia alone. These fires, and others in the Yukon and Northwest Territories, have been belching smoke into the air, in some cases up to 8 miles high.  Once in the atmosphere, weather patterns are causing the wildfire smoke to converge into a blanket so thick it's blotting out the sun across northern Canada. This smoke is working its way to the high Arctic, where it could speed up the melting of sea and land ice.   According to NASA, the smoke has set a record for its thickness, and has been especially dense across the Northwest Territories, Yukon, and Nunavut provinces.   Never mind the upcoming total solar eclipse — in some places, the smoke is so thick it could turn day into night,   According to Colin Seftor, an atmospheric researcher for NASA’s Goddard Space Flight Center, on August 15, the Ozone Mapping and Profiler Suite (OMPS) on the Suomi NPP satellite recorded aerosol index values as high as 49.7. This was more than 15 points higher than the previous record, which was set in 2006 by fires in Australia.  Aerosol index records were also set on August 13 and 14, NASA reported. Another satellite image, this time from the Aqua satellite, shows smoke billowing north from areas near Lake Athabasca. The fires in British Columbia were intense enough to produce numerous pyrocumulus clouds, which are essentially firestorms that tower into the sky, resembling thunderstorms.  Such clouds can vault smoke high into the atmosphere, all the way to the stratosphere, where it can linger for days or longer.  In addition to altering the heat balance of the atmosphere, the smoke can deposit dark soot particles on the ice, which hastens melting by lowering the reflectivity of the ice and causing it to absorb more incoming sunlight.

    Loss of Arctic Sea Ice Causes Earliest Pacific Walrus Haul Out Ever - Hundreds of Pacific walruses have hauled out of Arctic waters near Alaska's Point Lay due to declining sea ice levels, the U.S. Fish and Wildlife Service announced Wednesday. It's the earliest haul out the agency has ever seen, and scientists fear a repeat of stampedes that have killed hundreds of walruses in recent years.  Loss of sea ice from climate change is a major reason why the Center for Biological Diversity has petitioned the federal government to protect Pacific walruses under the Endangered Species Act. A final listing decision from Fish and Wildlife is expected within the next month.  "This early haul out shows that Pacific walruses are in terrible trouble," said Emily Jeffers, a Center for Biological Diversity attorney. "If we're going to save these amazing animals, the Trump administration has to give them the protections they need and stop pushing for dangerous oil drilling in the Arctic."  President Trump's decisions to withdraw from the Paris climate accord and consider opening up the Arctic to offshore oil drilling would exacerbate sea ice loss and other threats to Pacific walruses. The Wildlife Service has previously said the Pacific walrus deserves listing under the Endangered Species Act, but it didn't have the resources to proceed with listing, prompting the Center for Biolofical Diversity's lawsuit and the imminent listing decision.  Arctic sea ice extent, on which the Pacific walrus so heavily relies, hit record lows during fall 2016 and winter 2017, and sea ice in the Chukchi Sea off Point Lay retreated at a record rate this May. The sea ice is expected to begin increasing with the end of the summer season, although the National Snow and Ice Data Center cautioned that levels could continue to fall again, as happened in 2010 and 2005.

    Scientists discover 91 volcanoes below Antarctic ice sheet - Scientists have uncovered the largest volcanic region on Earth – two kilometres below the surface of the vast ice sheet that covers west Antarctica.  The project, by Edinburgh University researchers, has revealed almost 100 volcanoes – with the highest as tall as the Eiger, which stands at almost 4,000 metres in Switzerland. Geologists say this huge region is likely to dwarf that of east Africa’s volcanic ridge, currently rated the densest concentration of volcanoes in the world. And the activity of this range could have worrying consequences, they have warned. “If one of these volcanoes were to erupt it could further destabilise west Antarctica’s ice sheets,” said glacier expert Robert Bingham, one of the paper’s authors. “Anything that causes the melting of ice – which an eruption certainly would – is likely to speed up the flow of ice into the sea. “The big question is: how active are these volcanoes? That is something we need to determine as quickly as possible.” These newly discovered volcanoes range in height from 100 to 3,850 metres. All are covered in ice, which sometimes lies in layers that are more than 4km thick in the region. These active peaks are concentrated in a region known as the west Antarctic rift system, which stretches 3,500km from Antarctica’s Ross ice shelf to the Antarctic peninsula.

    Another climate-change nightmare: 91 new volcanoes beneath Antarctica’s ice - Antarctica has been having a rough time of it lately, you may have heard. You know — greenhouse gases, warming oceans, trillion-ton icebergs breaking off the continent like a middle-aged man losing hair in the sink. Not the best century for the old South Pole.And now it turns out Antarctica has problems we didn't even know about. Deep problems. Volcanoes-under-the-ice problems, which doesn't sound healthy.University of Edinburgh researchers on Monday announced the discovery of 91 previously unknown volcanoes under west Antarctica. They do not sound nearly as alarmed as, say, Quartz, which called the possibilities terrifying.“By themselves the volcanoes wouldn't be likely to cause the entire ice sheet to melt,” said lead researcher Max Van Wyk de Vries, whose team published the study in the Geological Society in late May. But if the glacier is already melting because of global warming, he said, “if we start reducing significant quantities of ice … you can more or less say that it triggers an eruption.” In a worst-case scenario, the researchers say, we could see a feedback loop of melting ice that destabilizes volcanoes, which erupt and melt more ice, and so on until Antarctica's troubles to date seem halcyon in comparison.

    Analysis: Why US carbon emissions have fallen 14% since 2005 - Before 2005, US carbon emissions were marching upwards year after year, with little sign of slowing down. After this point, they fell quickly, declining 14% from their peak by the end of 2016.Researchers have given a number of different reasons for this marked turnaround. Some have argued that it was mainly due to natural gas and, to a lesser extent, wind both replacing coal for generating electricity. Others have suggested that the declines were driven by the financial crisis and its lasting effects on the economy. Here Carbon Brief presents an analysis of the causes of the decline in US CO2 since 2005. There is no single cause of reductions. Rather, they were driven by a number of factors, including a large-scale transition from coal to gas, a large increase in wind power, a reduction in industrial energy use and changes in transport patterns.Declines in US CO2 have persisted despite an economic recovery from the financial crisis. While the pace of reductions may slow, many of these factors will continue to push down emissions, notwithstanding the inclinations of the current administration. Carbon Brief’s analysis shows that in 2016…

    • Overall, CO2 emissions were around 18% lower than they would have been, if underlying factors had not changed, and 14% lower than their 2005 peak.
    • Coal-to-gas switching in the power sector is the largest driver, accounting for 33% of the emissions reduction in 2016.
    • Wind generation was responsible for 19% of the emissions reduction.
    • Solar power was responsible for 3%.
    • Reduced electricity use – mostly in the industrial sector – was responsible for 18%.
    • Without these changes, electricity sector CO2 emissions would have been 46% higher than they are today.
    • Reduced fuel consumption in homes and industry was responsible for an additional 12% of the overall emissions reductions.
    • Changes in transport emissions from fewer miles per-capita, more efficient vehicles, and less air travel emissions per-capita account for the final 15%.

     'Dodgy' greenhouse gas data threatens Paris accord -  Potent, climate-warming gases are being emitted into the atmosphere but are not being recorded in official inventories, a BBC investigation has found. Air monitors in Switzerland have detected large quantities of one gas coming from a location in Italy. However, the Italian submission to the UN records just a tiny amount of the substance being emitted. Levels of some emissions from India and China are so uncertain that experts say their records are plus or minus 100%. These flaws posed a bigger threat to the Paris climate agreement than US President Donald Trump's intention to withdraw, researchers told BBC Radio 4's Counting Carbon programme. The rules covering how countries report their emissions are currently being negotiated. But Prof Glen Peters, from the Centre for International Climate Research, in Oslo, said: "The core part of Paris [is] the global stock-takes which are going to happen every five years, and after the stock-takes countries are meant to raise their ambition, but if you can't track progress sufficiently, which is the whole point of these stock-takes, you basically can't do anything. "So, without good data as a basis, Paris essentially collapses. It just becomes a talkfest without much progress."

    Canada's hope to get climate change into NAFTA could prove difficult -  CBC - A frank report on climate change in America leaked to the New York Times a week before the U.S. sits down to begin renegotiating NAFTA may give some weight to Canada's push to get climate change mitigation included as part of the new continental trade deal. But that, of course, would require U.S. President Donald Trump to buy into even some of what the report says, which, in short, is that climate change is real, caused by people and that some extreme weather events can now be attributed to the warming planet. The special report on climate change by scientists at 13 U.S. federal agencies hasn't been approved yet by the White House and was leaked by scientists who fear Trump will refuse to release it because it counters his belief that climate change is a "hoax." Prime Minister Justin Trudeau said last week Canada wants climate change, reduced emissions and efforts to shift to a low-carbon economy written into the new NAFTA. Canada, the U.S. and Mexico are to start renegotiating the 23-year-old trade deal on Aug. 16."We are certainly looking for a better level playing field across North America on environmental protections," Trudeau said last week. However with Trump withdrawing the U.S. from the Paris climate change agreement and pledging to return the U.S. coal industry to its glory days, the White House and the Canadian government are far apart on many environmental issues. Even getting the words "climate change" into the agreement could be a struggle. 

    Vanguard seeks corporate disclosure on risks from climate change | Reuters: (Reuters) - Vanguard Group on Monday said it has urged companies to disclose how climate change could affect their business and asset valuations, reflecting how the environment has become a priority for the investment industry. Under pressure from investors, Vanguard and other fund companies have pushed to pass several high-profile shareholder resolutions on climate risk at big energy firms like Exxon Mobil Corp and Occidental Petroleum Corp during the spring proxy season. Vanguard manages about $4 trillion and is often the top shareholder in big U.S. corporations through its massive index funds - giving it a major voice in setting corporate agendas. Vanguard, the biggest U.S. mutual fund firm by assets, had not supported climate activists on similar measures. But Glenn Booraem, Vanguard's investment stewardship officer, said in a telephone interview on Monday the issue as well as shareholder proposals have evolved. "Our support for these proposals is not a matter of ideology, it's a matter of economics," he said. "To the extent there are significant risks to a company's long-term value proposition, we want to make sure there is long-term disclosure of those risks to the market." Vanguard earlier this year changed its proxy voting policies to give more leeway to support resolutions tied to climate risk, but until now it has given few details about its thinking unlike rivals State Street Corp or BlackRock Inc. Vanguard also plans to disclose more details about its talks with companies on issues such as gender diversity on corporate boards. 

     EPA will review ‘politicized’ climate science report - Environmental Protection Agency chief Scott Pruitt said his staff will gauge the “accuracy” of a major federal science report that blames human activity for climate change — just days after researchers voiced their fears to The New York Times that the Trump administration would alter or suppress its findings.  “Frankly this report ought to be subjected to peer-reviewed, objective-reviewed methodology and evaluation,” Pruitt told a Texas radio show Thursday. “Science should not be politicized. Science is not something that should be just thrown about to try to dictate policy in Washington, D.C.” Pruitt, who has expressed doubts about carbon dioxide’s role as a major driver of climate change, also dismissed the discussions in Washington about manmade carbon emissions, calling them “political." Scientists called his remarks troubling, especially because the report — part of a broader, congressionally mandated National Climate Assessment — has already undergone “rigorous” peer-review by a 14-person committee at the National Academies. The reviewing scientists backed the report’s conclusion from researchers at 13 federal agencies that humans are causing climate change by putting more greenhouse gases in the atmosphere, leading to a clear increase in global temperatures.

    Trump infrastructure push rolls back environmental rules (Reuters) - U.S. President Donald Trump on Tuesday rolled back rules regarding environmental reviews and restrictions on government-funded building projects in flood-prone areas as part of his proposal to spend $1 trillion to fix aging U.S. infrastructure. Trump's latest executive order would speed approvals of permits for highways, bridges, pipelines and other major building efforts. It revokes an Obama-era executive order aimed at reducing exposure to flooding, sea level rise and other consequences of climate change. "It's going to be quick. It's going to be a very streamlined process. And by the way, if it doesn't meet environmental safeguards, we're not going to approve it - very simple," Trump said at a press conference at Trump Tower in New York. President Trump promised in his election campaign to press for widespread deregulation to spur business spending. The former New York real state developer has complained that it takes too long to get permits for big construction projects. Business groups praised the streamlining of regulations, while environmental groups and others criticized the order, saying it would lead to riskier projects, waste taxpayer dollars and result in a "climate catastrophe." The American Petroleum Institute said in a statement that the order reflects recommendations the oil industry lobby group submitted to the Commerce Department in March. The National Association of Home Builders also praised the Trump administration's move, saying the flood rules had raised the cost of housing. But the environmental group Oil Change International said the order would silence local communities that have safety and environmental concerns about major projects like pipelines. 

    Trump to reverse Obama-era order aimed at planning for climate change - President Trump signed an executive order Tuesday that he said would streamline the approval process for building infrastructure such as roads, bridges and offices by eliminating a planning step related to climate change and flood dangers.Speaking in the lobby of Trump Tower in New York, Trump said that the approval process for projects was “badly broken” and that the nation’s infrastructure was a “massive self-inflicted wound on our country.” Trump said that “no longer” would there be “one job-killing delay after another” for new projects. But he did not provide any proposal on how his much-promised infrastructure program would be financed or what it would include.The White House confirmed that the order issued Tuesday would revoke an earlier executive order by former President Barack Obama that required recipients of federal funds to strongly consider risk-management standards when building in flood zones, including measures such as elevating structures from the reach of rising water. Obama’s Federal Flood Risk Management Standard, established in 2015, sought to mitigate the risk of flood damage charged to taxpayers when property owners file costly claims.Climate scientists warn that sea levels will rise substantially in the coming decades, and they say that long-term infrastructure projects will probably face more frequent and serious flood risks.A White House official said the order will not stop “state and local agencies from using a more stringent standard if they choose.”

    Trump to roll back Obama-era rule on rising sea levels | TheHill: President Trump is set to repeal an Obama-era order requiring tougher new building standards for government-funded infrastructure projects in flood-prone areas, including those at risk of rising sea levels brought on by climate change. Trump will sign an executive order on Tuesday that will, in part, repeal a 2015 directive from then-President Barack Obama that established that it was a federal policy to “improve the resilience of communities and federal assets against the impacts of flooding,” which are “anticipated to increase over time due to the effects of climate change and other threats.” Trump will revoke the order on Tuesday as part of an effort to streamline the permitting process for infrastructure projects, a White House official said. The official called it a “small part” of Trump’s order, which will not block states from expanding their own building standards for infrastructure projects. The flooding order was one of several Obama administration climate actions that Trump considered repealing in an expansive roll-back he signed in March. But the flooding measure was left off of the final list of nixed orders. Floodplain officials generally supported Obama’s order when he signed it in 2015. 

    Trump To Repeal Obama Executive Order On Sea Level Rise - President Donald Trump will rescind an Obama administration policy requiring government agencies to take into account global warming-induced flooding and sea level rise for federally-funded projects. Trump will repeal the climate order that President Barack Obama signed in 2015 as part of a broader effort to streamline infrastructure permitting. Obama’s order required federally-funded projects to be two feet above the 100-year floodplain. Hospitals and other critical buildings must be three feet above the historic floodplain. “For far too long, critical projects have been delayed by duplicative permitting and environmental requirements which added time and unnecessary expenses to much needed projects,” Transportation Secretary Elaine Chao said in a statement obtained by Bloomberg. Trump wants to push a $200 billion infrastructure spending bill through Congress this fall, which he hopes will mobilize $800 billion in state and private funding. A cumbersome permitting process could hold up infrastructure projects.Furthermore, Obama’s executive order to “improve the resilience of communities and federal assets against the impacts of flooding” could increase the upfront costs or even eliminate projects in the pipeline.  Obama’s order required federally-funded projects to be two feet above the 100-year floodplain. Hospitals and other critical buildings must be three feet above the historic floodplain.

    Sierra Club sues Energy Department over long-awaited grid study | TheHill: The Sierra Club on Monday sued the Department of Energy (DOE) for its “secrecy” over a key study on the reliability of the electric grid. In its lawsuit, the Sierra Club said the agency did not respond to open records requests seeking information about internal deliberations and outside communications over the study. “We’ve repeatedly asked DOE for information to ensure reality and science are coming before polluter politics, but we have only been met with delays and secrecy,” Mary Anne Hitt, the director of Sierra Club’s Beyond Coal campaign, said in a statement. “If the Trump administration refuses to be transparent in accordance with the law and continues to raise suspicion that it will interfere with the process, we have no choice but to take them to court.”Energy Secretary Rick Perry in April ordered a study into the reliability of the electric grid, examining whether the growth of renewable power — and the decline of coal and nuclear generation — is putting the country’s electricity system at risk. Greens and some renewable energy supporters oppose the study, saying it could be designed to bolster the Trump administration’s policy of supporting traditional sources of electricity over emerging sources such as wind and solar.

    The next step for EPA to relax fuel economy standards: Public comment period -- Yesterday Environmental Protection Agency (EPA) Administrator Scott Pruitt announced that the agency would start a public comment period in efforts to overhaul Obama-era fuel economy standards for cars and light duty trucks from 2021 to 2025.Much like the Clean Power Plan and the Waters of the United States Act, the fuel economy standards that were proposed and finalized by Obama’s EPA have also been in the crosshairs of President Donald Trump's EPA. The new administration argues that the current fuel economy standards will cost automakers too much money. However, the current standards were based on extensive research that showed consumers saving hundreds or thousands of dollars per year in fuel expenses. Although the EPA estimated that automakers would collectively lose $200 billion over 13 years in complying with the fuel economy standards, the International Council on Clean Transportation—the same group that helped bring to light Volkswagen's emissions cheating scandal—released a study showing that the EPA's estimates had been too conservative, and automakers can meet aggressive fuel economy standards more economically.  The Obama-era EPA's fuel economy standards require that automakers reach an average fuel economy of 54.5 mpg by 2025, which would reduce consumption of fossil fuels and reduce the amount of CO2 entering the atmosphere. Many in Trump’s administration, including Pruitt and Trump himself, falsely claim that climate science is either bogus or murkier than it actually is. The Obama Administration’s EPA had completed most of the mid-term evaluation process by December 2016, just before the administrations were set to change. It then finalized the planned fuel economy standards for 2022-2025 in January before the inauguration, and well before April 2018. But the auto industry balked at the early completion of the mid-term review, especially after the election, when it was clear that the industry could have pushed to relax the rules.

    EPA looks to redo Obama-era climate rules for big rigs#! - The Environmental Protection Agency announced Thursday that it will be revisiting the Obama administration's greenhouse gas and fuel efficiency rules for big-rig trucks and trailers in response to industry concerns. "In light of the significant issues raised, the agency has decided to revisit the Phase 2 trailer and glider provisions," said EPA Administrator Scott Pruitt. "We intend to initiate a rulemaking process that incorporates the latest technical data and is wholly consistent with our authority under the Clean Air Act." The Obama EPA and Transportation Department updated previous rules for large tractor trailer trucks almost a year ago in October. The update to the previous 2014-2018 model year standards began regulating truck trailers and gliders, which are older remanufactured trucks, "for the first time under the GHG program -- with compliance deadlines beginning in 2018," according to EPA. The heavy-duty truck rules were part of former President Barack Obama's climate change agenda and put into place as part of the U.S.'s commitment to the 2015 Paris climate agreement. President Trump announced on June 1 that the U.S. would exit the Paris deal. Trump also scrapped Obama's climate agenda called the Climate Action Plan.

    Phasing out of fossil-fuel cars could result in dirtier power stations --The government’s goal to replace petrol and diesel cars with those powered by electricity could see the construction of so-called open-cycle gas stations, said Carsten Poppinga, senior vice president of trading and origination at Statkraft, the Norwegian utility that operates hydro power plants and wind farms across the UK. Such units can keep the grid from buckling from the strain of people charging cars in peak demand periods. The catch? While the plants can start generating power almost instantly, they don’t recycle waste heat, making them emit more greenhouses per megawatt than the combined-cycle stations that comprise the largest share of the UK’s daily power output. Britain may have no choice but to use the less environmentally friendly option, though. With little spare generation capacity, the nation is vulnerable to power shortages, particularly on cold, winter days when wind and solar energy may be in short supply.

    Want to fight climate change? Don’t invest in Tesla - Morgan Stanley identified 39 stocks that generate at least half their revenue “from the provision of solutions to climate change,” something it said was a central component of investing to make a difference, as opposed to just a making a buck. Not surprisingly, alternative-energy companies ranked the highest in terms of their positive impact, and the “top five climate-change impact stocks” were all manufacturers of solar and wind energy: Canadian Solar CSIQ, China High Speed Transmission, GCL-Poly,  Daqo New Energy DQ, and Jinko Solar JKS.   Not among the top companies? Electric-car makers, including Tesla Inc. TSLA,   Tesla shares are up nearly 66% so far this year, but the good it may have been doing for portfolios may not translate to it doing good for the planet. Morgan Stanley said this was one of the “biggest surprises” of its study. The bank grouped the “climate-change impact stocks” into four sector categories: utilities, renewable manufacturers, green infrastructure companies and transportation stocks. It then analyzed them on a number of metrics, including “the CO2 [carbon dioxide] savings achieved from the products and services sold by the companies,” as well as secondary and tertiary factors centered around the environmental impact of the making of these products.  “Whilst the electric vehicles and lithium batteries manufactured by these two companies do indeed help to reduce direct CO2 emissions from vehicles, electricity is needed to power them,” Morgan Stanley wrote. “And with their primary markets still largely weighted towards fossil-fuel power (72% in the U.S. and 75% in China) the CO2 emissions from this electricity generation are still material.”bMorgan Stanley calculated that an investment of $1 million in Canadian Solar results in nearly 15,300 metric tons of carbon dioxide being saved every year. For Tesla, such an investment adds nearly one-third of a metric ton of CO2.

    Cheaper or greener: Colombia eyes US ethanol with trepidation- The availability of cheap ethanol has become a contentious issue in the United States. While American drivers may see the benefits of supplies from the most efficient ethanol producer on earth, meaning that the fuel in their car may be cheaper, for producers and farmers, lower prices are not always better.Brazil’s ethanol industry has been in the news over this issue recently, with arguments over the imposition of tariffs and volume caps on US imports. And on the other side of the continent in Colombia, I found the debate is just as fierce.As the 13th largest producer of sugar in the world, Colombia is sitting on a substantial natural resource. The production and processing of sugarcane as a feedstock is focused on a region called the Cauca River Valley, and the concentration makes the industry vulnerable to weather shocks — which is exactly what happened in 2017. Colombia does not have a sugarcane “season” and the commodity can be harvested all year round.Heavy rains this year coupled with the El Nino weather phenomenon in 2016 hampered sugarcane yields and consequently reduced ethanol production. In March, rainfall was more than 170% above the 1971-2000 historical monthly average, according to the Colombian Institute of Hydrology, Meteorology and Environmental Studies. In addition, the then better return on sugar versus ethanol increased the preference for the sweetener over the alcohol.From a sugar production perspective, the weather has not had a major impact. As of the end of July, 2017’s sugar production was 1.18 million mt, just 2.7% lower year on year, with the cane crush at 13.05 million mt, just 1.2% behind 2016’s level. If the weather remains fine then production could be made up. 

    Suniva solar tariff case could throttle a thriving industry - Two bankrupt solar panel manufacturers are asking the U.S. government for tariffs on imports, imports U.S. solar installers rely on. It's already having an impact. Would an intervention by Washington to save this industry end up destroying it? That's the question confronting the solar industry as the U.S. International Trade Commission meets this week on a petition to protect domestic manufacturers with tariffs on solar panel imports and price supports.The commission will hear competing views at a meeting on August 15 and has said it will make a preliminary ruling in late September on whether the petitioners, a pair of domestic manufacturers that have filed for bankruptcy, have been so badly injured by imports that they need relief. The case is unusually complex, and it's hard to know what relief the ITC and, ultimately, the Trump administration may impose. (As Bloomberg News noted in June, Trump's instincts are to protect domestic manufacturers, and he is more fond of the coal industry than of solar.) The trade petition was filed after Suniva, which had been taken over by a foreign firm, filed this year for bankruptcy; it was joined by SolarWorld, another foreign-controlled and bankrupt company. Most of the rest of the domestic solar industry—including some other manufacturers but mainly those who install and finance solar gear and can thrive on cheap systems from abroad—is lined up against the petition. Their business has been booming as costs have steadily declined, making it easier for consumers, businesses and power companies to shift from fossil-fuel electricity.

    The Solar Eclipse Could Wipe Out 9,000 Megawatts of Power Supplies -- The eclipse set to darken skies next week threatens to sideline solar farms and rooftop panels in a wide swath of the U.S., wiping out enough power generation to supply about 7 million homes. This rare event, during which the moon will completely obscure the sun, will cast a shadow along a 70-mile-wide (113-kilometer) corridor stretching from Oregon to South Carolina on Aug. 21. Based on a Bloomberg calculation of grid forecasts, more than 9,000 megawatts of solar power may go down. That’s the equivalent of about nine nuclear reactors. The impact is a testament to the ninefold increase in solar installed in the U.S. since 2012 and highlights the risks associated with relying on an intermittent resource such as the sun for power. The onslaught of wind and solar resources is already regularly contributing to wild swings in power supplies across grids, sending wholesale electricity prices below zero on some days. On Thursday, PJM Interconnection LLC, operator of the nation’s largest power grid covering parts of the eastern U.S., estimated the eclipse could take out as much as 2,500 megawatts of solar generation on its system from about 1:30 p.m. to 3:40 p.m. North Carolina and New Jersey may bear the brunt because so many panels are installed in those states. PJM said rooftop solar panels will account for 80 percent of the anticipated outages. According to California’s grid operator, generation from large solar farms may plunge by 70 megawatts a minute over an 82-minute period and then begin surging 90 megawatts a minute as the sun re-emerges. The market will need to fill a gap of 6,008 megawatts, Steven Greenlee, spokesman for the grid operator, said by email. Texas’s power grid operator expects the eclipse to affect about 600 megawatts of solar generation over an hour to 90 minutes. The operator of a grid that stretches from the Midwest into Louisiana estimated a potential impact of as much as 125 megawatts.

    Eclipse prompts California power grid changes when solar energy supply dips - LA Times: lthough the moon will push in front of the sun and darken the skies on Monday, California’s solar-heavy electricity grid isn’t expected to run short on energy to power homes, businesses and industry. The manager of the state’s electricity grid, the California Independent System Operator, said it’s prepared for the widely anticipated solar eclipse that begins about 9 a.m.The moon will block the sun for 2 minutes and 40 seconds about an hour after the eclipse begins. California is too far south for total blockage of the sun, but eclipse viewers in the state will see the moon cover about 50% to about 90% depending on where they are.  “I am confident in the technology of our market and grid, and in the expertise and abilities of our staff to manage the operational challenges associated with the eclipse.” said Steve Berberich, president of Cal-ISO.  The California Public Utilities Commission still urges consumers to help ease the burden on the power grid by reducing electricity usage and unplugging home electronics (which use power in standby mode) from 9 to 11 a.m. “This will allow California to burn fewer fossil fuels and emit fewer greenhouse gas emissions when California’s solar energy production dips during the eclipse,” the utilities commission said in a statement. With a capacity of 10,00 megawatts, California’s solar power at times supplies as much as 40% of the state electricity grid energy load. The growth in solar use during recent years has largely been driven by California’s push for clean energy with a mandate that 50% of the state’s electricity come from renewable sources by 2030.As solar power production declines during the solar eclipse, the grid operators forecast that they will need to produce enough power from other energy sources to supply the equivalent of 6 million homes.

    3,000MW of California energy storage will ramp to deal with solar eclipse - California’s grid operations will be supported by the ramping of an estimated 3,000MW of energy storage, when a solar eclipse expected across the Pacific North-West of the US will cause PV generation to dip. The California Energy Storage Alliance (CESA) trade group issued a statement on Tuesday, asserting that the near-three hour period when the California sun is obscured by the passing moon, between 9:02am and 11:54am local time, will see energy storage ramping to support the grid and providing energy and other support services. According to CESA, the ability of energy storage to also ramp down i.e. take energy off the grid as well as put energy into it, will be a useful tool for the grid as solar generators start to come back on when the eclipse is over. The sun in Northern California will be 76% obscured, while the sun in Southern California will be 62% blocked out. “The eclipse is an important example of how energy storage can help the grid,” Alex Morris, policy director at CESA, said.

    What Happens to Solar Power in an Eclipse? We'll Find Out Monday --Unlike most eclipse-watchers in the United States, Eric Schmitt wouldn’t mind seeing a few clouds in the sky when the moon starts blotting out the sun on Monday. That’s because, as the vice president for operations at the California Independent System Operator, which oversees the state’s electric grid, Mr. Schmitt will be dealing with an unusual challenge. As the eclipse carves a long shadow over California on Monday morning, it is expected to knock offline more than 5,600 megawatts’ worth of solar panels at its peak — a big chunk of the 19,000 megawatts of solar power that currently provide one-tenth of the state’s electricity. The California I.S.O. plans to fill the void by ramping up natural gas and hydroelectric power plants.Then, a few minutes later, when the eclipse passes, all those solar panels will come roaring back to life, and grid operators will have to quickly make room for the sharp rise in generation by scaling back gas and hydropower. A cloudy day, Mr. Schmitt explained, might help blunt those wild swings in solar energy. For months, the nation’s grid overseers have been preparing for any disruptions in solar power that the eclipse might cause, by running models and training operators in simulators for worst-case scenarios. Because solar still provides less than 1 percent of electricity nationwide, regulators are confident that the lights will stay on, other energy sources will compensate and the costs will be minimal.

    Missouri regulators reject massive Midwest wind power line (AP) — Missouri utility regulators on Wednesday rejected a proposed high-voltage power line to carry wind power across the Midwest to eastern states, delivering a significant setback to developers of one of the nation's longest transmission lines. The decision marked the second time in a little over two years that the Missouri Public Service Commission has denied a request from Clean Line Energy Partners to build its power line through the state after a lengthy review process. The 780-mile-long line would run from wind farms in western Kansas through Missouri and Illinois to Indiana, where it would connect with a power grid for eastern states. All the other states along its route already have granted approval to the $2.3 billion project. Most members of Missouri's regulatory panel said they, too, wanted to approve the high-profile project but felt compelled to vote against it because of a recent state appeals court ruling. The judges in that case said utilities must first get the consent of counties to string a power line across roads before state approval can be granted. Clean Line lacks approval from several Missouri counties where its line is opposed by local residents. It's not clear whether Missouri's decision will kill the project. The Houston-based wind energy company could appeal the denial in court. It could try to win support from counties and apply again to Missouri regulators. Or it could attempt to circumvent Missouri by seeking federal approval to build the line through the state, as it did for an Oklahoma-to-Tennessee power line after Arkansas regulators ruled against it in 2011. 

    No wind or solar powered aluminum smelter anywhere in the world? Could be a message in that. »  Matt Howell, the CEO of Tomago Aluminium Smelter, told a few home truths on ABC radio Monday. To paraphrase in my own words:

    • 1. Aluminum Smelters gobble electrons for breakfast. His smelter uses 10% of  the entire electricity supply of the most populous state in Australia (NSW).
    • 2. If power goes out without warning for more than three hours, the smelter pot lines freeze, permanently. The company goes to the wall.
    • 3. The largest battery in the world would keep their smelter going for all of 8 minutes. There is a good reason there are no solar or wind powered aluminium smelters anywhere in the world.
    • 4. The government can‘t let the market solve anything whilst it is simultaneously destroying the free market by propping up the market failures at the same time.
    • 5. Electricity pricing has suddenly got very ugly. Their electricity bill may now be subject to price spikes where it could cost them $4 million just to keep one pot line running during that spike. It is as if suddenly gas stations only sold $400 per Litre petrol. (Which would be $1800/per gallon).  What he doesn’t say, but which logically follows from that, is that heavy industry in most of Australia can no longer get reliable electricity at an affordable price, even with forward contracts. Cry, scream, run with your factory.
    • 6. In Australia, if we achieve “zero coal” we will also achieve “zero heavy manufacturing”.
    • 7. If we want heavy industry, we need a HELE Coal plant. There are hundreds being built around the world, and we are selling our coal to them. How crazy are we?

    Australian households pay highest power prices in world - South Australian households are paying the highest prices in the world at 47.13¢ per kilowatt hour, more than Germany, Denmark and Italy which heavily tax energy, after the huge increases on July 1, Carbon + Energy Markets’ MarkIntell data service says.  NSW households typically pay 39.1¢/KWh – hard on Italy’s heels – while Queensland and Victoria’s typical retail charges of 34-7c-35.7c/KWh exceed those in all but the four or five most expensive European countries, the MarkIntell data shows. When the eastern states’ National Electricity Market was formed in the late 1990s, Australia had the lowest retail prices in the world along with the United States and Canada, CME director Bruce Mountain said. The shocking reversal explains why Prime Minister Malcolm Turnbull has summoned energy retailer chief executives to Canberra next week to explain why they are charging households and small businesses so much compared to their counterparts in other countries.

    Worldwide investment in renewable energy reaches US$ 4 trillion – with little to show for it -- Approximately $US4 trillion, made up of $3 trillion in direct outlays for generating plants plus an estimated $1 trillion for renewables-related network upgrades, has been invested in electricity-sector renewable projects since 2000. As a result of these expenditures the percentage of renewable energy in the global electricity mix has risen from 19% in 2000 to 24% in 2016 and global CO2 emissions have been cut by a small but unquantifiable amount over what they would otherwise have been – not much bang for the buck. There are also questions as to whether future global investments in renewable energy, which turned flat after subsidy rollbacks began in 2011, will be sufficient to keep the renewables bandwagon rolling.  The investment data presented in this post are from two sources. The first is the International Energy Agency, which recently published a report entitled World Energy Investment 2017 that probably contains most of the data I need to write this post. The problem is that IEA wants me to pay £80 for the full report, and while I enjoy my work here on the blog I don’t enjoy it that much. Fortunately Carbon Brief has published an article containing some of IEA’s key charts, and I digitized the data from the one entitled “Global investment in power generation and electricity networks” and plotted them up with the results shown in Figure 1:   Investment in renewables generation from 2000 through 2016 totals $3.002 trillion. (The $4 trillion total renewables investment cited in the title and elsewhere includes an additional $1 trillion invested in network upgrades to support renewable generation projects, which are not broken out in the IEA data. Details on how this estimate was arrived at are given in the Appendix at the end of the post.)

    15MWh German battery park demonstrates successful black start - Europe’s ‘first commercial battery park’, a 5MWh lithium-ion battery system that was recently tripled in size to 15MWh, has been used to successfully restart a disconnected power grid in Germany.  Energy storage system provider and integrator Younicos originally built and connected the 5MW / 5MWh battery park in Schwerin, a city in northern Germany, in 2014. It was commissioned by utility WEMAG, which has been using the energy storage system to provide frequency regulation and other balancing services to its grid, particularly with regards to enabling the addition of more renewable energy capacity, in a region with numerous large-scale wind power facilities.Younicos recently completed the expansion of the park, adding an extra 10MW / 10MWh of energy storage this summer, providing the control software for it, helped WEMAG integrate the upgraded capacity and carried out installation of power electronics. The expansion, announced in late October 2016 and finished this July, saw 53,444 lithium-ion batteries added, along with 18 inverters, nine transformers and a medium-voltage system. According to Tobias Struck of WEMAG’s energy storage contractor Batteriespeicher Schwerin, two different battery types were integrated during this Phase 2 expansion, which was “particularly challenging from the point of view of cooling and the greatly increased capacity of new batteries”.

    G20 Climate Commitments and China’s One Belt One Road -- naked capitalism - Yves here. It is enormously frustrating to read posts like this. On the one hand, the author is correct to say that Paris Accord handwaving is far from enough to address climate change, that serious and coordinated action needs to take place. And that is an extremely tall order, since we already have attained dangerous CO2 levels as a result of advanced economies reaching their current level of development.On the other hand, emerging economies want their citizens to have first world middle class lifestyles…which would require the resources of a large integral multiple of what the Earth actually has. And the US has a big role in stoking these desires, since our exports of Hollywood movies showing supposedly middle class people typically better housed than even generally overhoused Americans actually are isn’t helpful. Nothing like misplaced international status envy.The idea that we can somehow have an environmentally responsible Silk Road, now called One Belt One Road, is barmy. China is seeking to construct a massive transportation system and new supply chains. A major objective is to secure the resources needed to move Chinese lifestyles closer to Western levels. That aim in and of itself is destructive. There’s no way to pretend otherwise. The only hope of steering out of our climate change tailspin is radical energy conservation efforts, pursued with the intensity of war mobilization. Nothing even remotely like that is happening. Pundits like Wolff are part of the problem, not part of the solution.

    China's energy demand to peak in 2040 as transportation grows: CNPC- (Reuters) - China's energy demand will peak by 2040, later than the previous forecast of 2035, as transportation fuel consumption continues to rise through the middle of this century, state-owned oil major China National Petroleum Corp (CNPC) said on Wednesday. Energy consumption in China, the world's second-largest economy, will peak then at 4.06 billion tonnes of oil equivalent, up from the previous forecast of 3.75 billion tonnes five years prior, CNPC said in its annual long-term energy outlook. CNPC raised its forecast because it predicts transportation demand will rise through to 2050, twenty years longer than previously estimated. China's oil demand will reach a ceiling of 690 million tonnes a year, equivalent to 13.8 million barrels per day (bpd), by 2030, CNPC said. The country is the world's second-largest oil consumer. That compares with last year's estimate of a peak of 670 million tonnes a year by 2027. Oil demand will grow at an annual rate of 2.7 percent until 2020, slowing to 1.2 percent until 2030, the report said. The headline number indicates that Chinese energy markets will continue to set the pace globally. However, the slowdown in oil consumption raises further doubt about the future role of oil in China's energy mix as alternative fuels take a greater share of the transportation and power generation sectors. Gasoline demand will peak as soon as 2025, CNPC said. That would mean China's gasoline demand would peak only shortly after the United States. China has vowed to cap its energy consumption in 2017 in order to raise the use of cleaner fuels as part of a wider campaign to fight air pollution.

    Coal expansion plans up in smoke as Europe realises mistake - Substantial coal power expansion in Europe has been significantly scaled back over the last decade after utility companies realised they bet on the wrong horse, according to a new study by the University of Oxford. Between 2005 and 2008, European utility companies announced plans to build at least 49 GW of new coal-fired capacity. But 77% of that 49 GW has been cancelled, while a further 1.1 GW looks highly unlikely to ever materialise. Mid-2000s market conditions in the EU suggested coal had a bright future. But the post-2008 period was characterised by lower energy demand than what was predicted and overcapacity, due to increased generation expansion and increased renewable capacity. The study adds that other countries can learn from Europe’s misfire. Lead author of the report Ben Caldecott insisted that “the implication for Asian utilities and utility investors, where coal expansions are currently being considered, is crystal clear: bets on new coal don’t pay off.”

    EPA moves to rewrite limits for coal power plant wastewater – The Denver Post: — The Environmental Protection Agency says it plans to scrap an Obama-era measure limiting water pollution from coal-fired power plants. A letter from EPA Administrator Scott Pruitt released Monday as part of a legal appeal said he will seek to revise the 2015 guidelines mandating increased treatment for wastewater from steam electric power-generating plants. Acting at the behest of electric utilities who opposed the stricter standards, Pruitt first moved in April to delay implementation of the new guidelines. The wastewater flushed from the coal-fired plants into rivers and lakes typically contains traces of such highly toxic heavy metals as lead, arsenic, mercury and selenium. “After carefully considering your petitions, I have decided that it is appropriate and in the public interest to conduct a rulemaking to potentially revise (the regulations),” Pruitt wrote in the letter addressed to the pro-industry Utility Water Act Group and the U.S. Small Business Administration. Pruitt’s letter, dated Friday, was filed Monday with the Fifth Circuit U. S. Court of Appeals in New Orleans, which is hearing legal challenges of the wastewater rule. With Pruitt now moving to rewrite the standards, EPA has asked to court to freeze the legal fight. While that process moves ahead, EPA’s existing guidelines from 1982 remian in effect. Those standards were set when far less was known about the detrimental impacts of even tiny levels of heavy metals on human health and aquatic life. 

    The EPA is beginning to roll back an Obama-era rule limiting how much toxic waste power plants release in water -- The Trump administration is reassessing strict Obama-era standards for how major coal-fired, natural gas, and nuclear power plants treat and dispose of wastewater laced with toxic pollutants, according to a court filing released late on Monday.Two industry groups — the Utility Water Act Group and the US Small Business Administration — petitioned Environmental Protection Agency head Scott Pruitt to reconsider the rule in the spring, citing concerns about the standards being burdensome and costly. In 2015, the Utility Water Act Group, along with several energy companies, had sued the agency over the rule.Pruitt recently told the petitioners he planned to review the main restrictions. “After carefully considering your petitions, I have decided that it is appropriate and in the public interest to conduct a rulemaking to potentially revise the new, more stringent” waste standards, Pruitt wrote in a brief Aug. 11 letter sent to the industry groups. He had already agreed to look into the rule in April, when he temporarily blocked it from being enforced.Trump officials shared their plans to review most of the rule and asked the court to put related legal challenges on hold until that process ends, according to a filing to the 5th Circuit Court of Appeals on Monday.“This announces the EPA will replace the 2015 pollutant limits for two major waste streams,” Betsy Southerland, former director of science and technology in the EPA’s Office of Water, told BuzzFeed News via email. Southerland helped develop the original rule and recently resigned from the agency, citing concerns including Pruitt’s efforts to review and repeal rules such as this one.In response to a request for comment, the EPA sent a two-paragraph explanation of the contents of its court filing. The two industry groups did not respond immediately to requests for comment.

    Judges reject coal mining permit that allowed destruction and replacement of stream in Greene County  -- Pennsylvania regulators acted contrary to state laws and the constitution when they permitted Consol Energy to “essentially destroy” and rebuild a stream above a longwall mine in Greene County, the five judges of Pennsylvania’s Environmental Hearing Board ruled Tuesday, even as they upheld another permit in the same coal mine.In an opinion by Judge Steven C. Beckman, the board found the state Department of Environmental Protection was wrong to issue a permit for the Cecil-based company’s Bailey Mine expansion that predicted such severe impacts to Polen Run that a section of the stream would have to be replaced.But the agency was correct in issuing a permit revision for other parts of the 3,000-acre mining project that caused more limited and temporary disturbances to streams, the board ruled.  “When the department anticipates that the impacts from longwall mining are going to be so extensive that the only way to ‘fix’ the anticipated damage to the stream is to essentially destroy the existing stream channel and streambanks and rebuild it from scratch, the department’s decision to issue [the permit revision] is unreasonable and contrary to the law,” Judge Beckman wrote. The appeal was brought by two environmental groups, the Sierra Club and the Center for Coalfield Justice, who argued that predicted damage to streams from the collapse of earth above full extraction mining amounted to pollution that violated the state’s stream protection law.

    West Virginia governor’s coal company engaging in ‘attempt to intimidate public officials’ -- The family of West Virginia Gov. Jim Justice (R) is suing two top officials at the Kentucky Department for Natural Resources after the state tried to collect millions of dollars in unpaid fines from coal companies owned by Justice. Legal experts are describing the lawsuits as acts of intimidation against government officials seeking to hold a company accountable for violating the law.The lawsuits, filed in Pike County Circuit Court on behalf of Kentucky Fuel Corp., owned by Justice, allege the actions of Kentucky Department for Natural Resources Commissioner Allen Luttrell and Deputy Commissioner John Small could have cost the company up to $4.5 million in fines, the Louisville Courier-Journal reported. In a highly unusual move, the company is seeking money from department officials themselves, not the state of Kentucky for which they work.The Department of Natural Resources had cited Kentucky Fuel and other Justice-owned companies with hundreds of coal-mining reclamation violations in eastern Kentucky. Federal law requires that coal companies rehabilitate land after coal mining operations have stopped.“These lawsuits appear to be an attempt to intimidate public officials from performing their statutory duties to enforce coal mine reclamation laws,” John Mura, spokesperson for the Kentucky Energy and Environment Cabinet, said in a statement emailed to ThinkProgress. “The legal actions are entirely without merit and will be vigorously defended to protect our state government officials who devote their careers to safeguarding the land and the health of Kentucky citizens.” Justice won West Virginia governor’s race last year running as a Democrat. Earlier this month, Justice appeared at a campaign rally with President Donald Trump to announce that he had returned to the Republican Party. A few days later, Justice called for a $15-per-ton coal subsidy from the federal government, a proposal that was hard to square with his new party’s official position against subsidies, also known as “picking winners and losers.”

    Three Mile Island at center of energy debate: let struggling nuclear plants close or save them -  Three Mile Island is at the center of a new conversation about the future of nuclear energy in the United States nearly 40 years after a partial meltdown at the Central Pennsylvania plant sparked a national debate about the safety of nuclear power. The site is slated to close in just two years unless Pennsylvania or a regional power transmission operator delivers some form of financial relief, says Exelon, the Chicago-based power company that operates the plant. That has drawn the Keystone State into a growing debate: whether to let struggling nuclear plants shut down if they cannot compete in the regional wholesale markets where energy is bought and sold, or adopt measures to keep them in the business of generating power without greenhouse gas emissions.Nuclear power plants produce about two-thirds of the country's zero-emissions electricity. The debate is playing out as some regions consider putting a price on planet-warming carbon emissions produced by some power generators, which would raise their costs and make nuclear plants like Three Mile Island more viable. States that allow nuclear facilities to close need to think carefully because once a reactor is powered down, there's no turning back, "If we wave goodbye to a nuclear station, it's a permanent goodbye because we don't mothball them. We decommission them," Three Mile Island's closure would eliminate more than 800 megawatts of electricity output. That's roughly 10 percent of Pennsylvania's zero-emissions energy generation, by Exelon's calculation. Replacing that with fossil fuel-fired power would be like putting roughly 10 million cars on the road, it estimates. (wrong) 

    Nuclear Power’s Woes Imperil U.S. National Security, Moniz Says - The decline of the U.S. nuclear-power industry puts America’s security at risk, according to a report being released Tuesday by former Energy Secretary Ernest Moniz that calls for greater federal investment. The report from the Energy Futures Initiative and obtained by Bloomberg News says a commercial atomic power sector is necessary to keep uranium-processing technology away from terrorists and other bad actors as well as support nuclear-powered Navy vessels.The report by Moniz, a nuclear scientist who served as energy secretary under President Barack Obama, calls for expanded government loan guarantees, tax incentives and research on nuclear technology. The report doesn’t mention President Donald Trump, who is proposing cutting nuclear research funding and killing the loan guarantee program. Nuclear power makes up about 20 percent of U.S. electricity generation, but the industry has been struggling. Five nuclear plants, with a combined capacity of 5 gigawatts, have closed early since 2013, and an additional six plants are scheduled to shutter early over the next nine years. Of the two new nuclear plants under construction in the U.S., one was halted by Scana Corp. last month and backers of the other, Southern Co.’s Vogtle plant in Georgia, are seeking additional aid from the federal government.Westinghouse Electric Co., the nuclear technology pioneer that is part of Toshiba Corp., went bankrupt in March, after it hit delays with its AP1000 reactors at each of those plants. After it declared bankruptcy, Westinghouse -- whose technology is used in more than half the world’s nuclear power plants -- said it shifted its focus from building reactors to helping dismantle them. Trump pledged to help the industry and Energy Secretary Rick Perry is conducting a study of the electric grid aimed at helping so-called baseload power plants, which includes coal and nuclear. But Trump’s budget also proposed deep cuts to the Energy Department, including shuttering the loan guarantee program Moniz says should be expanded and cutting research spending.

    20 floating nuclear power plants set for South China Sea - China National Nuclear Power (CNNP) has announced plans to build 20 floating nuclear power stations in a bid to reinforce its influence in the South China Sea. The Chinese government claims an area up to 1500 miles from its shores but the claim is contested by neighbouring countries and the US. Spearheading the move will be a new company based in Shanghai formed by five existing companies, led by CNNP and Shanghai Electric Power. It will have a registered capital of $150m. The reactors that will be fitted to nuclear barges will have a rating of about a quarter that of a typical civil nuclear reactor. Their design will be a form of small modular reactor, and will be mass produced in Shanghai ship yards.

    Fukushima Plant Is Releasing 770,000 Tons of Radioactive Water Into the Pacific Ocean - When Japan's Fukushima Daiichi nuclear plant suffered a triple-core meltdown in March 2011 as the result of devastating earthquake, most people had no idea this was only the beginning of a nuclear disaster that has arguably become the single worst industrial accident in human history.  Keeping the three core meltdowns cool has been an ongoing challenge that has yet to be met. As fresh water is pumped over the cores, it is then stored on site in massive tanks. The Tokyo Electric Power company (TEPCO), the operator of the plant, then has to figure out what to do with that water. Recently, TEPCO announced that it would dump 770,000 tons of radioactive tritium water into the Pacific Ocean. The announcement infuriated local fishermen and environmental groups across Japan.  "The release of thousands of tons of radioactive tritium by a giant utility company into our aquatic and natural environments is a blood-chilling prospect," Mozhgan Savabieasfahani, an environmental toxicologist and winner of the 2015 Rachel Carson prize, told Truthout. She questions why there is not more outrage from those in the Japanese government who are responsible for safeguarding the health and wellbeing of the general public. "Where are the defenders of our public's health?" she asked. "If they could pull the plug out of their mouth, they could tell us that tritium is a toxic radioactive isotope of hydrogen, and that, once released, tritium cannot be removed from the environment. Let that sink in." Takashi Kawamura, TEPCO's chairman, when asked about the decision to introduce this vast amount of radioactive water into the ocean, initially responded, "The decision has already been made." Meanwhile, the chairman of the Japanese Nuclear Regulation Authority (NRA), Shunichi Tanaka, has claimed that tritium is of little danger to humans and supports TEPCO's plans to dump the water into the ocean. This claim, however, is vehemently disputed by toxicologists and nuclear experts with more background in toxicology than Tanaka.

    Fukushima ice wall nears completion, but effectiveness doubtful - A subterranean ice wall surrounding the nuclear reactors at the stricken Fukushima No. 1 Nuclear Power Plant to block groundwater from flowing in and out of the plant buildings has approached completion. Initially, the ice wall was lauded as a trump card in controlling radioactively contaminated water at the plant in Fukushima Prefecture, which was crippled by meltdowns in the wake of the March 2011 Great East Japan Earthquake and tsunami. But while 34.5 billion yen from government coffers has already been invested in the wall, doubts remain about its effectiveness. Meanwhile, the issue of water contamination looms over decommissioning work. In a news conference at the end of July, Naohiro Masuda, president and chief decommissioning officer of Fukushima Daiichi Decontamination & Decommissioning Engineering Co., stated, "We feel that the ice wall is becoming quite effective." However, he had no articulate answer when pressed for concrete details, stating, "I can't say how effective." The ice wall is created by circulating a coolant with a temperature of minus 30 degrees Celsius through 1,568 pipes that extend to a depth of 30 meters below the surface around the plant's reactors. The soil around the pipes freezes to form a wall, which is supposed to stop groundwater from flowing into the reactor buildings where it becomes contaminated. A total of 260,000 people have worked on creating the wall. The plant's operator, Tokyo Electric Power Co. (TEPCO) began freezing soil in March last year, and as of Aug. 15, at least 99 percent of the wall had been completed, leaving just a 7-meter section to be frozen. 

     Take Cover, Avoid Bomb Flash: Guam Issues Nuclear Attack Guidelines - Guam posted emergency guidelines on Friday to help residents prepare for any potential nuclear attack after a threat from North Korea to fire missiles in the vicinity of the US Pacific territory. Pyongyang’s state-run KCNA news agency said on Thursday its army would complete plans in mid-August to fire four intermediate-range missiles over Japan to land near Guam as North Korea and the US engaged in increasingly heated rhetoric this week over the North’s nuclear weapons program. While the governor of Guam shrugged off the North’s missile warning and said there was no heightened threat, the government has issued a preparedness fact sheet. In language that evoked the spect0r of nuclear conflict during the Cold War, the guidelines cover what to do before, during and after a nuclear attack. “Do not look at the flash or fireball – It can blind you,” it said. “Take cover behind anything that might offer protection.” “Remove your clothing to keep radioactive material from spreading. Removing the outer layer of clothing can remove up to 90% of radioactive material,” read the guidelines of what to do if caught outside.  They suggest having an emergency plan and supply kit and making a list of potential concrete structures near home, work and school to serve as fallout shelters.“Fallout shelters do not need to be specifically constructed for protecting against fallout,” it said. “They can be protected space, provided that the walls and roof are thick and dense enough (i.e. concrete) to absorb radiation given off by fallout particles.”The fact sheet advises people on how to wash: do not scrub or scratch the skin, use soap, shampoo and water but do not put not conditioner on your hair because it binds radioactive material.

    Fracking issue in Youngstown could ignite fight in the courts: A vote from the Mahoning County Board of Elections to keep a Youngstown anti-fracking charter amendment off the Nov. 7 ballot isn’t going to happen for a few more weeks. And the board won’t even begin discussing it until Tuesday at the earliest. But it appears the board will decide to not put the proposal on the ballot for a seventh time. A bill signed by Gov. John Kasich in January that took effect in April on revising foreclosure laws included a number of amendments. One requires a board of elections or the secretary of state to invalidate a local initiative petition if either determines any part of the petition falls outside the local government’s constitutional authority to enact it. If the board of elections rejects the proposal, it can be appealed to the secretary of state, under the state law. After the secretary renders a decision, it would head to court. When that amendment was included, a state legislator said it was done largely to stop the anti-fracking proposal in Youngstown from getting on the ballot again. The citizens initiative, backed by the Youngstown Community Bill of Rights Committee, bans fracking in the city as well as anything remotely related to it including the storage or transportation of fracking waste-water. State law gives control over fracking to the Ohio Department of Natural Resources and not municipalities. Opponents of the proposal have long said that the requested ban isn’t enforceable because of that state law. Supporters say that would be determined after the proposal is passed and challenged in court. We’ve been uncertain about this since the first anti-fracking charter amendment was rejected by city voters in May 2013. It also lost in November of that year, twice in 2014, and once each in 2015 and 2016. If the board does reject the charter amendment, supporters of the proposal say they will take the matter all the way to court. 

    State parks likely safe from fracking - -- When the Ohio Senate returns on Aug. 23, it's likely to be only the third time in 38 years that the legislature voted to successfully override a governor's veto. The Senate is likely to override at least a handful of Gov. John Kasich's budget vetoes. But the chamber also is expected to pass on some of the 11 veto overrides approved by the House on July 6, including one that would give lawmakers the authority to appoint members to a commission that approves permits to allow fracking in state parks and other public lands. For five years, Kasich has refused to appoint members to the board, in effect creating a fracking moratorium on public lands. Senate President Larry Obhof, R-Medina, said his caucus has not finalized its veto override list, but he expects "several." However, Obhof said it's unlikely there is enough support to override items that were not included in the original Senate-passed version of the budget. That would include the Oil and Gas Leasing Commission, and a provision giving the legislature oversight of Medicaid rate increases.   Other potential override votes could come on several other Medicaid bills where the House already has approved an override, such as requiring the state to seek a federal waiver requiring certain Medicaid enrollees to pay into a modified health savings account, allocating an additional $237 million for nursing homes, and mandating Controlling Board oversight of about $260 million of state-share Medicaid spending.

    Blackstone’s New Pipeline Asset Is Wreaking Environmental Havoc - In the energy business, it’s one of the biggest projects going today: construction of a 710-mile pipeline to transport natural gas from America’s most prolific shale deposit in the eastern U.S. to consumers in the Midwest and Canada. Even Blackstone Group LP has agreed to take a sizable stake.But it holds another, more dubious, distinction. The Energy Transfer Partners LP pipeline has racked up more environmental violations than other major interstate natural gas pipelines built in the last two years, according to a Bloomberg analysis of regulatory filings during that period. And that’s all since U.S. regulators approved the $4.2 billion project in February.“Not only is it a situation where there are probably more incidents and more headlines than any other pipeline, on a project basis it’s a magnitude that we haven’t seen in years,” said Kyle Cooper, director of research with IAF Advisors in Houston.In Ohio, Energy Transfer has been cited for damaging protected wetlands and improperly disposing of wastewater, among other things. In West Virginia, a state regulator temporarily ordered the company last month to cease and desist activities after it inadvertently polluted streams.  And in Washington, the Federal Energy Regulatory Commission has halted horizontal drilling on certain segments of the pipeline, following a massive 50,000-barrel spill of diesel-tainted drilling fluid. The Rover pipeline, running from the Marcellus shale deposit, is Energy Transfer’s biggest project since its controversial Dakota Access oil pipeline. Chief Executive Officer Kelcy Warren said on July 31 that he was “baffled” by regulators’ allegations. That same day, his company reached a deal to sell a 32 percent stake in the Rover unit to Blackstone for about $1.57 billion in cash. It’s expected to close in the fourth quarter. Blackstone spokeswoman Paula Chirhart said the firm declined to comment.

    Rover Pipeline Sets Record for Environmental Violations - Energy Transfer Partners ' controversial $4.3 billion Rover pipeline has more negative inspection reports than any other major interstate natural gas pipeline built in the last two years, according to a new Bloomberg analysis. The 713-mile pipeline, which will carry fracked gas across Pennsylvania, West Virginia, Ohio and Michigan and Canada, has been stalled from numerous environmental violations, including a 2 million gallon drilling fluid spill into an Ohio wetland in April. Rover has accrued 104 violations since construction of the $4.2 billion project in started in March.  That's more negative reports than the next four pipeline projects combined, including William's Virginia Southside Expansion (26 reports), Enbridge's Algonquin Incremental Market (24), Williams' Dalton Expansion (23) and Endbridges Sabal Trail (18).  In May, the Federal Energy Regulatory Commission rejected Energy Transfer's request to resume horizontal directional drilling at two sites for the Rover Pipeline after numerous leaks into Ohio's wetlands as well as various Clean Air and Clean Water act violations across the state. Blackstone announced last month it was spending $1.57 billion for a 32 percent stake in the troubled project. "Rover will be built in compliance with all safety and environmental regulations and in some instances we will exceed those requirements," Energy Transfer spokeswoman Alexis Daniel told Bloomberg in response to the violation tally.  Energy Transfer owns about 71,000 miles of natural gas, natural gas liquids, refined products and crude oil pipelines across the country and is the same company behind the Dakota Access Pipeline . Citing numbers from the Pipeline and Hazardous Materials Safety Administration, TheStreet reported in June that the Dallas-based firm spilled hazardous liquids near water crossings more than twice the frequency of any other U.S. pipeline company this decade.

    Fracking Jobs Prove Elusive for Coal Miners Looking to Switch -- Robert Dennis has mined coal in West Virginia for 10 years but a recent evening found him in a classroom at his local community college. He came to learn about opportunities in fracking, a drilling technique used to produce natural gas — the very fuel that is threatening coal’s future.“I know mining inside and out,” said Dennis, a 41-year-old shift foreman from Wetzel County, adjusting the black Adidas cap on his head. But now, “I just want more doors to be open.”He has earned a certificate in chemical and industrial operations, diligently searched job boards and filled out applications. So far, no luck. Dennis is learning a hard lesson of fracking: While it has created a bonanza of jobs, displaced coal miners and their communities are sometimes left out of the boom. That’s because many of the jobs require highly technical skills and are often going to experienced workers brought in from out of state who then move on to the next job without sinking roots.  When the “shale gale” hits, hotels, trailer parks and restaurants get a boost. And some landowners make money for letting drillers extract oil and gas from their property.  In that way, fracking has “created a lot of millionaires in West Virginia,” said Jeff Kessler, a former state senator from the state’s northern area that has both coal and natural gas. “But it has not created the employment opportunities” area residents had hoped for, he said. “The ongoing benefits are relatively minute compared to the amount of land under lease.” That’s bad news for towns like Wetzel County’s New Martinsville where Dennis attended the community college session. While coal mines provide decades of steady work and sustain communities, a crew can frack a well in a month and leave behind automated machinery to recover the oil and gas.

    Fracking Giant Sues Dimock Resident for $5M for Speaking to Media About Water Contamination -- Ever since the dangerous consequences of natural gas extraction via hydraulic fracturing—popularly known as " fracking "—entered the national consciousness, the small town of Dimock, Pennsylvania has arguably been "ground zero" for water contamination caused by the controversial practice.  Now Cabot Oil & Gas, the massive energy company responsible for numerous fracking wells near Dimock, is suing one of the town's residents for $5 million, claiming that his efforts to "attract media attention" to the pollution of his water well have "harmed" the company. According to the lawsuit, Dimock resident Ray Kemble's actions breached an earlier 2012 settlement that was part of an ongoing federal class action lawsuit over the town's water quality. Kemble has stated that Cabot's fracking turned his groundwater "black, like mud, [with] a strong chemical odor."  Earlier this year, Kemble filed a follow-up lawsuit against Cabot, which was based on new findings that could help him prove the link between Cabot's fracking operation and the contamination of his well. Cabot, at the time, argued that the case was built on "inflammatory allegations" intended to "poison the jury pool" and "extort payment" from the company.  Kemble eventually dropped his lawsuit, acting in response to new information that he thought might negatively affect the case. Kemble's lawyers have declined to comment on the nature of that information. Cabot alleged that this lawsuit was a breach of the 2012 settlement contract Kemble had signed, prompting them to counter-sue Kemble.  In context, Cabot's decision to sue Ray Kemble appears meant to intimidate and "send a message" to Kemble and any other resident thinking of voicing similar concerns and objections.

    Trump order aims to speed pipeline reviews, approvals - The Trump administration plans to quicken the review process for oil and natural gas pipelines in federally-designated energy corridors, according to an executive order signed by President Trump Tuesday. Trump announced the order at a press conference at Trump Tower Tuesday, but the text of the order was not released until early Wednesday. Related: Find more content about Trump's administration in our news and analysis feature. The order is aimed at quickening the pace of environmental reviews and federal permitting for pipelines and other infrastructure projects, part of an effort to remove regulatory uncertainty for projects, Trump said. "So it's going to be quick, it's going to be a very streamlined process," Trump said. "And, by the way, if it doesn't meet environmental safeguards, we're not going to approve it. Very simple." The order calls for making the federal environmental review and permitting process "coordinated, predictable, and transparent," according to the text, setting a goal for federal authorization decisions for major infrastructure projects of two years. Such infrastructure projects include roads, bridges, railroads and ports, but also infrastructure for "energy production and generation, including from fossil, renewable, nuclear and hydro sources," according to the order. The order calls on the US Interior and Agriculture departments to lead an effort to identify "energy right-of-way corridors" on federal lands that would be subject to "expedited" reviews for energy infrastructure projects.

    Natural gas pipeline projects lead to smaller price discounts in Appalachian region - As new pipeline projects and expansions are completed, the difference between the Henry Hub national benchmark price and daily spot natural gas prices at pricing hubs in the Appalachian region has narrowed. Through the first seven months of 2017, the difference between prices at the Henry Hub in Louisiana and at Dominion South in southwestern Pennsylvania averaged $0.53 per million British thermal units (MMBtu), about two-thirds the average difference of $0.76/MMBtu during the first seven months of 2016. The differences between the Henry Hub and other Appalachian region price points followed similar trends. Appalachian regional prices are influenced by regional production rates and the availability of infrastructure to transport natural gas to demand centers. Production in Ohio, Pennsylvania, and West Virginia from the Marcellus and Utica shale plays has grown rapidly over the past several years, and infrastructure to deliver natural gas to consumers has not kept pace. While the average difference between natural gas prices at the Henry Hub and Appalachia have generally narrowed over the first 7 months of 2017 relative to the comparable year-ago period, the Appalachian region can become oversupplied at times when production exceeds pipeline capacity, driving producers in the region to lower their prices relative to Henry Hub. As of July 31, the natural gas price at Dominion South in southeast Pennsylvania traded at $1.85/MMBtu, about $1.00/MMBtu lower than the natural gas price at Henry Hub. During 2016, 11 interstate pipeline projects in the Northeast were completed, adding just over 4.0 Bcf/d of interregional capacity. Much of this capacity came on between July and December, as only 0.9 Bcf/d of capacity was completed in the first half of the year. With limited infrastructure to deliver the available supply to consumers and high regional natural gas inventories, the difference between prices at Dominion South and Henry Hub widened from an average of $0.62/MMBtu in the first half of 2016 to $2.55/MMBtu at the end of September. Starting in October 2016, more pipeline projects were completed, including two of the biggest projects in the region, the Equitrans expansion of the Ohio Valley Connector and the Rockies Express Pipeline Zone 3 Capacity Enhancement. This growth in pipeline capacity likely contributed to a narrowing of the spread between the Henry Hub and Dominion South price points, which reached $0.49/MMBtu at the end of the year. 

    America's Shale Natural Gas Production Is Taking Off - Sort Of - (Bloomberg) -- America’s shale gas production is about to surge 12 percent. Sort of. The Energy Department issued a report Monday estimating that the nation’s prolific shale formations will yield 59.4 billion cubic feet a day in September, a massive jump from the roughly 53 billion projected for August. The difference: The agency began including the more than 6 billion cubic feet a day of gas flowing out of the Anadarko basin of Oklahoma and Texas. The addition of the Anadarko is testament to the flood of gas flowing out of shale formations known better for their oil riches. Almost half of the country’s shale gas is now being produced in crude plays, pulled out of oil wells as a byproduct. These supplies, known as associated gas, threaten to quash any meaningful recovery in an already-glutted market. “This is again telling us why we are in a perpetual bear market in natty gas,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “We are finding more and more gas. It’s giving the bears more ammo.” Better drilling and well completion techniques have revived the Anadarko, which the Energy Department described as an “already well-established oil and gas producing basin.” The region was home to 129 active drilling rigs as of July, second only to Texas’s oil-rich Permian Basin, the agency’s monthly report showed. Gas futures have meanwhile been battered this year by a shale-driven supply glut that has persisted for much of the past two years. Prices have dropped 21 percent this year, settling Monday at $2.96 per million British thermal units on the New York Mercantile Exchange.

     NYMEX September gas rises as storage revision trumps bearish build -The NYMEX September natural gas futures contract rose Thursday as revisions to the previous weeks' stocks data overshadowed a larger-than-expected storage build in the most recent week.The September contract settled at $2.929/MMBtu, up 3.9 cents from Wednesday's close.The impact of the first above-average storage injection that the US Energy Information Administration announced in six weeks was curbed by EIA's revisions for the weeks ending June 30 through August 4. The revisions cut stocks for the week that ended August 4 to 3.029 Tcf, down 9 Bcf from what EIA previously estimated. The revisions were due "in large part because of restatements of natural gas in storage from working gas to base gas," according to the EIA. Prices initially dipped as the market reacted to the estimated 53 Bcf storage build EIA announced for the week that ended August 11, 6 Bcf above the 47-Bcf build expected by a consensus of analysts S&P Global Platts surveyed.But prices moved into positive territory as the revision was taken into account. The bearish build was above the 50-Bcf average injection for the most recent reporting week over the past five years, the first time in six weeks a build has outpaced the five-year average, according to EIA data. Because of the revision, natural gas stocks now only have a 55 Bcf, or 1.8%, cushion over the five-year average, according to EIA data. There has been sentiment in the market that a colder-than-average winter could boost prices if the surplus to the five-year average continues to dwindle.  Looking ahead, the most recent six- to 10-day weather outlook from the US National Weather Service continues to call for warmer-than-average weather across the Northeast, with the Midcontinent expected to see average temperatures.

    Virginia governor opposes offshore drilling plan | TheHill: Virginia Gov. Terry McAuliffe (D) on Thursday came out against expanding offshore drilling in the Atlantic Ocean waters off the coast of his state. McAuliffe had previously said he could support drilling near Virginia on the condition that the federal government expand a royalty sharing program that would supply coastal states with revenue from drilling operations. But, in a letter to Interior Department officials and a statement released Thursday, McAuliffe said he doesn’t believe the Trump administration will agree to such a plan, and he said he opposes oil and natural gas drilling in the Atlantic without one.“President Trump’s proposal to end the revenue sharing agreement with the Gulf States is a clear indication that we cannot trust the president to give Virginia its fair share of the revenues that would result from offshore exploration,” McAuliffe said in a statement, noting a provision in Trump’s budget proposal that would end a revenue sharing program in the Gulf of Mexico. “Additionally, the president’s administration is actively working to cut funding from the very agencies that would be charged with protecting Virginia’s coastal environment in the event that exploration went forward,” he added. McAuliffe’s announcement comes as the Interior Department finishes hearing comments on a proposal to reopen the Outer Continental Shelf leasing program for oil and gas drilling. 

    Professor: pipeline brings adverse impact on economy via climate change — A proposed pipeline will have an adverse impact on the economy because of its contribution to climate change, a university professor said Thursday. Ryan E. Emanuel, associate professor at N.C. State University’s Department of Forestry and Environmental Resources, spoke at a “listening session” held by state officials to get feedback on the proposed Atlantic Coast Pipeline. He said he was speaking as a private citizen and not as a representative of the school. Emanuel, who described himself as an expert on water, carbon and climate issues, said he wanted to give an independent, scientific perspective on the pipeline. He said the cumulative impacts project on climate change are unambiguous and shouldn’t be ignored. “The best science available today, including the National Climate Assessment, says that we should back away, immediately from new fossil fuel infrastructure, including major pipelines,” he said. “This is our only hope to keep climate change in check.” Emanuel also questioned the pipeline’s economic impact. He said research shows that climate change is expected to cost the United States about 1 percent of its gross domestic product by the end of the century. That would cost North Carolina about $4 billion a year, Emanuel said. Since poorer areas likely would feel the impact more, Robeson County could see a 10 percent to 15 percent impact, he said. Revels said Native Americans were not informed that the pipeline was going through their land. He asked state officials to consider the impact that the project might have on the next seven generations.

    Oil Industry, Trump Administration Plan to Drill Off Florida’s Coast -The Trump administration is putting energy industry special interests ahead of public health. Its latest awful proposal? Open up more of our coasts to offshore drilling, including Florida’s coasts.The Department of the Interior is taking public comments on this plan until Thursday, August 17. Make sure they hear us loud and clear: Drilling off Florida’s coasts is too risky! In 2006, a moratorium on drilling in the Gulf within 125 miles of Florida’s coast was put in place until 2022. But Trump wants to ignore the moratorium and open it up to Big Oil anyway, putting our environment and way of life at risk.The BP Deepwater Horizon disaster in 2010 wreaked havoc on the Gulf of Mexico, killing 11 workers and spewing nearly 5 million barrels of oil over the course of 3 months. The spill caused massive wildlife die-offs, including the largest dolphin die-off ever recorded in the Gulf of Mexico.The BP oil spill wrecked our economy in the Sunshine State: even south of the Panhandle, where the impacts were less severe, we lost 50,000 jobs as a result of the economic backlash from the spill. Simply put, tourists did not want to vacation near an oil spill. And in the Panhandle, where tarballs from the spill regularly washed ashore, the economic impacts were even greater. This proposal is part of a larger plan to massively expand oil drilling across the country. Donald Trump recently authorized drilling to begin in the Arctic and has already given Eni, an Italian oil company, permission to drill exploratory wells off the coast of Alaska.

    Oil terminal launches weekly quality report for LOOP Sour blended crude: --- The Louisiana Offshore Oil Port launched Monday the first of what will be weekly quality reports on its medium sour blended crude LOOP Sour, a move to bring more up-to-date information to market participants that runs counter to current practices. LOOP said Monday it will publish a rolling one-year graph containing weekly breakdowns of API gravity and sulfur for LOOP Sour deliveries ex-cavern. LOOP will continue to publish its monthly quality report, which is typically released on the first business day of the month and lists quality information for deliveries made during the prior month. LOOP Sour is a blend of US Gulf of Mexico grades Mars and Poseidon, and a blend of Middle East crudes called Segregation 17, comprised of Arab Medium, Basrah Light and Kuwait Export Crude. It is stored in cavern at the Louisiana Offshore Oil Port terminal. In Monday’s report, LOOP said LOOP Sour’s API gravity had a one-year low of 28.9 and high of 31.4, while its sulfur content spread was 2.02% and 2.96%. According to monthly reports, the average from August 2016 through July 2017 was 30.2 for API and 2.53% for sulfur. The move to publish weekly reports is notable because regular quality reports are often rare for crudes marketed around the world. In the US Gulf Coast, stakeholders for medium sour grades Poseidon and Mars used to publish monthly assays for those grades but ultimately stopped. For Mars, majority stakeholder Shell does list an assay on its website while minority partner BP’s latest assay is dated September 2012. Poseidon Oil Company’s website has not had updated quality information for that grade since February 2015. API gravity and sulfur are just two of many characteristics refiners look at when deciding what crudes to run in order to maximize or minimize production of particular refined products. Other factors include acidity, metals content, presence of asphaltenes and ultimately a distillation curve.

    Are the Capline Pipeline and LOOP About to Enter a New Era? -- The stars may finally be aligning for two related crude oil infrastructure projects that, if undertaken, would provide an important new pathway to overseas markets for Bakken, western Canadian and other North American crude. The first would involve reversing the Capline Pipeline, which was built to transport crude north from the U.S. Gulf Coast to Midwest refiners; the second would make modest physical changes to the Louisiana Offshore Oil Port — better known as LOOP — to allow the crude import facility off the Bayou State coast to load crude onto ships, including Very Large Crude Carriers (VLCCs). Today we look at the new infrastructure and market forces that may finally spur Capline’s reversal and lead imports-focused LOOP to enable exports. We noted more than five years ago in the opening line of Draggin’ the Capline that “Crude oil wants to flow south to the U.S. Gulf” and that the utilization of the 1.2-MMb/d Capline Pipeline (yellow line in Figure 1) from the St. James, LA crude oil hub to the Patoka, IL hub (which is connected to more than 2 MMb/d of Midwest refining capacity) had fallen to only 14%. This decline was largely because Midwest refineries had gained access to the increasing volume of crude available from western Canada and the Bakken. This low rate of Capline utilization raised questions about whether the pipeline’s flow should be reversed to help move Bakken and western Canadian crude south. (Capline is co-owned by Plains All American, with a ~54% stake; Marathon Petroleum, with ~33%; and BP, with ~13%.)

    A Venezuelan Tanker Is Stranded Off The Louisiana Coast -- A tanker loaded with 1 million barrels of Venezuelan heavy crude has been stranded for over a month off the coast of Louisiana, not because it can't sail but as a result of Venezuela's imploding economy, and its inability to obtain a bank letter of credit to deliver its expensive cargo. It's the latest sign of the financial troubles plaguing state-run oil company PDVSA in the aftermath of the latest US sanctions against the Maduro regime, and evidence that banks are slashing exposure to Venezuela across the board as the Latin American nation spirals into chaos.As Reuters reports, following the recently imposed US sanctions, a large number of banks have closed accounts linked to officials of the OPEC member and have refused to provide correspondent bank services or trade in government bonds. The stranded tanker is one direct casualty of this escalation.The tanker Karvounis, a Suezmax carrying Venezuelan diluted crude oil, has been anchored at South West Pass off the coast of Louisiana for about a month, according to Marinetraffic data. For the past 30 days, PBF Energy, the intended recipient of the cargo, has been trying unsuccessfully to find a bank willing to provide a letter of credit to discharge the oil, according to two trading and shipping sources.  The tanker was loaded with oil in late June at the Caribbean island of St. Eustatius where PDVSA rents storage tanks, and has been waiting for authorization to discharge since early July, according to Reuters. It is here that the delivery process was halted as crude sellers request letters of credit from customers that guarantee payment within 30 days after a cargo is delivered. While the documents must be issued by a bank and received before the parties agree to discharge, this time this is impossible as the correspondent bank has decided to avoid interacting with PDVSA and running afoul of the latest US sanctions. It was not immediately clear which banks have denied letters of credit and if other U.S. refiners are affected.

    Known Gulf of Mexico deepwater areas most attractive in modest lease sale - US Gulf of Mexico Lease Sale 249 on Wednesday was not a barn-burner, but it did show a measure of competitive bidding in the deepwater and even boasted two eight-figure bids and dozens more that topped $1 million each. The sale appeared to highlight majors' preferences for known deepwater areas, since shallow-water bidding accounted for a scant 10 blocks and offers received for these were mostly under $200,000 each. But sale sponsor Bureau of Energy Management officials expect interest in shallow water bidding to improve in subsequent sales, owing to the agency's recent lower royalty relief reduction aimed at drumming up more development in that arena. "We only provided a month's time for [operator] interest in the lower royalty," said Mike Celata, BOEM Gulf regional director, in a post-sale telephone press conference. "My expectation is that in March we'll have greater interest." In July, the agency reduced the royalty rate for leases in water depths less than 200 meters to 12.5% from 18.75%. High bids in Sale 249 totaled $121 million, while the sum of all bids including those apparently not successful, was $137 million, BOEM statistics showed. That compares to $275 million and $315 million respectively at the last US Gulf sale in March 2017. At Wednesday's auction, France's Total made the sale's apparent high bid of $12.1 million for a deepwater lower-Garden Banks area bid in the Gulf's remote Lower Tertiary play, out-elbowing Cobalt International Energy which offered $3.5 million for it.

    Lawmakers push Interior to expand offshore drilling - More than 100 lawmakers are urging the Trump administration to consider allowing oil and natural gas drilling in more areas off the coast of the United States. In a Wednesday letter to Interior Secretary Ryan Zinke, the members said officials should consider a more expansive drilling programs when it rewrites a five-year leasing outline, a key goal for Zinke and President Trump. "Just as today's energy security is the result of production set in motion by decisions made years ago, the decisions on [Outer Continental Shelf] leasing and development facing the department today will lay the groundwork for our energy and national security for decades,” said the letter, led by House Natural Resources Chairman Rob Bishop (R-Utah) and signed by 118 members. “There is demonstrated interest in the leasing and development of previously excluded areas and we must consider these areas for development to optimize our nation’s resource potential.” The letter comes as the Interior Department takes public comments on a new leasing plan, including the potential for drilling in all areas currently set aside for oil and gas production in the Atlantic and Arctic Oceans and the Gulf of Mexico. Another group of 69 lawmakers, led by Rep. Jared Huffman (D-Calif.), told Interior to block drilling in the Arctic and Atlantic Oceans as part of the review. “The risks are simply too high, and the consequences too severe,” they wrote in a letter. “It is time to preserve and protect this vital part of America’s national heritage for future generations.” 

    Yet Another Reminder that Dirty Oil Pipelines Are Never Safe -- In March of 2013, ExxonMobil's Pegasus Pipeline sprung a leak, spilling an estimated 210,000 gallons of toxic tar sands crude into a residential neighborhood of Mayflower, Arkansas. This week, a federal court ruled that the Obama administration over-penalized Exxon for dumping hundreds of thousands of gallons of a pollutant onto the streets of Mayflower and threw out a number of safety violations levied against Exxon on the basis that the company met its legal obligations to consider the risks associated with the pipeline .  In the court's decision, Judge Jennifer Walker Elrod noted, "The unfortunate fact of the matter is that, despite adherence to safety guidelines and regulations, oil spills still do occur."  Just think about that for a minute. The court ruled that even if a pipeline spill devastates a community, if the company can prove they followed safety guidelines, they shouldn't be held accountable for the damage they caused. That oil spills that threaten communities across the country are to be expected—just the "unfortunate" price we all have to pay for oil companies to transport their dirty product to market.  We've long argued that it's never a question of if a pipeline will spill, but when, and how much damage it will cause when it does. A recent report from Greenpeace bears this out, analyzing the track records of the companies behind major proposed tar sands pipeline projects including Keystone XL and the Line 3 pipeline expansion. These three companies, TransCanada, Kinder Morgan, Enbridge, and their subsidiaries, have had 373 spills from their pipelines in the U.S. since 2010. That's an average of one significant incident and a total of about 570 barrels of oil spilled per year for every 1,000 miles of pipe. Based on these rates, Keystone XL could expect 59 significant spills over its 50-year lifetime and the Line 3 expansion could expect about 51.

    Fracking Debate Ramps Up Again in Illinois With First Permit Application Under New Rules –   Four years ago, the Illinois legislature passed a law to regulate high volume hydraulic fracturing, or fracking , after months of contentious negotiations between oil industry interests, environmental watchdogs and community groups. Leading up to the law's passage, companies had secured hundreds of leases to potentially frack in Southern Illinois.  But then oil prices dropped, and the eagerness to tap the state's New Albany Shale faded. This summer, the filing for the first permit under the new rules has reignited debate over fracking in Illinois and concerns over the law's ability to protect citizens and the environment. Environmental and citizen groups say that this permit will be a test case as to how rigorously the Illinois Department of Natural Resources (IDNR) will seek to enforce the law.  In the spring, the Kansas-based, family-owned company Woolsey Energy filed for a permit to frack in White County in southeastern Illinois. Advocates criticized that permit as incomplete and inconsistent, and the department sent Woolsey back to the drawing board.  Woolsey submitted a revised permit application this summer, with the public comment period closing this month. Environmental advocates say the revised permit is still sorely lacking required information, and they are urging the IDNR to reject it.  "The company still did not provide the required information, putting public health and safety, groundwater, topsoil and other resources at potential risk," said Karen Hobbs, senior policy analyst for the water program of the Natural Resources Defense Council 's Midwest office. "How IDNR handles this application will set the benchmark for the program's future and ultimately determine if it is successful."

    Permian takeaway update, part 4. -- Nearly two-thirds of the effective NGL pipeline takeaway capacity out of the Permian is controlled by Energy Transfer Partners and DCP Midstream. But there are several other NGL pipelines used to flow Permian NGLs to faraway storage facilities and fractionators — assuming, that is, that their natural gas processing plants are connected to the pipe alternatives in question. Today we continue our blog series on the NGL side of the Permian with a look at Enterprise Products Partners’ Chaparral and Seminole pipelines and Enterprise’s and BP’s Rio Grande Pipeline, including the volumes of NGLs that have been flowing through them. Exploration and production companies (E&Ps) active in the Permian are primarily in pursuit of crude oil, but as we said in Part 1 of this series, oil wells in the play also produce large volumes of associated natural gas and natural gas liquids (NGLs) that add considerable monetary value of their own. The region already is producing 2.3 million barrels a day (MMb/d) of crude oil and 6.6 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 today, and five years from now the region’s NGL output could top 1.4 MMb/d, a prospective increase of nearly 80%. Almost all of the associated gas that emerges from Permian wells needs to be run through natural gas processing plants (which separate raw gas into dry gas and mixed NGLs), and then the dry gas and NGLs (also known as y-grade or raw mix) need to flow through takeaway pipelines — gas to storage or directly to end users, and NGLs to storage for subsequent fractionation into purity products: ethane, propane, normal butane, isobutane and natural gasoline.

    NGL pipelines out of the Permian, part 5. - Production of natural gas liquids in the Permian is growing so quickly that within a year or two some parts of the super-hot play may experience NGL takeaway constraints. That is good news for the owners of the eight existing NGL pipelines out of the Permian, which are likely to see flows on their pipes increase as NGL production rises — assuming, that is, that they have capacity to spare and that they are connected to natural gas processing plants within the faster-growing parts of the region. Today we continue our blog series on Permian NGL production, processing and pipelines with a look at ONEOK’s West Texas LPG Pipeline and the Chevron Phillips Chemical EZ Pipeline. The Permian is a crude oil-focused play, but as we said in Part 1 of this series, oil wells in the play also produce large volumes of associated natural gas and natural gas liquids (NGLs) that add to the bottom lines of exploration and production companies (E&Ps) there. The region already is producing 2.3 million barrels a day (MMb/d) of crude oil and 6.6 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. Production of NGLs is expected to rise nearly 80% over the same period, from almost 800 Mb/d today to about 1.4 MMb/d five years from now.

     Pullback in U.S. fracking sand use pressures producers - U.S. shale oil companies are pulling back on the amount of sand they use to hydraulically fracture new wells, responding to rising prices of the material that are driving up costs. Investors worry a slowdown in sand use, combined with new mining capacity coming online, could lead to a glut of the material and bring down prices. The worries have pressured shares of sand companies. Sand prices soared in the last year as oil companies ramped up shale drilling and production. But with crude prices below where they started the year, oil producers are employing new well designs and chemical agents that lessen the use of sand that represents around 12 percent of the cost of drilling and fracturing. The price of frack sand is expected to rise 62 percent this year to average $47 a ton, according to researcher IHS Markit. That is expected to drive oilfield service price inflation to 15 percent over 2016, according to researchers at Wood Mackenzie. Oilfield services provider Halliburton, which buys sand for its drilling customers, last month reported its first decline in average sand used per well, saying customers wanted designs that consumed less of the material. Average sand volumes for each foot of a well drilled fell slightly last quarter for the first time in a year, said exploration and production consultancy Rystad Energy. Volumes are expected to drop a further 2.5 percent per foot in the current quarter over last, Rystad forecast.

    West Texas sand rush exposes faults in state's lizard protection plan - State officials responsible for species protection concede new mining operations caught them by surprise.The scope of the industry’s plans for the Permian Basin is still unknown. By exposing weaknesses in Texas’ plan to protect the lizard, sand mining could revive legal challenges.A sudden influx of mining companies scraping the West Texas oil patch for sand to use in fracking operations has disrupted nearly as much highly sensitive habitat of a rare lizard in the last three months as the oil and gas industry had in the previous five years, according to state officials and a conservation group that monitors the area.The development, they say, exposes deep, and potentially fatal flaws in the state’s much-vaunted private-public plan to protect the rare dunes sagebrush lizard.The Texas Conservation Plan was adopted in 2012 as a way to avoid the land-use restrictions that would accompany the U.S. Fish and Wildlife Service officially designating the small brown lizard as endangered. Pushed by then-Comptroller Susan Combs, an outspoken critic of such listings, the deal enlisted oil and gas companies to protect the species by paying to monitor and minimize damage to its Permian Basin habitat. Conservation groups who challenged it in court as unenforceable because it was voluntary ultimately lost their case.The agreement was hailed as a victory that would protect the lizard while allowing Texas’ powerful oil industry to operate with minimal restrictions. Yet the arrival of the sand companies has provided a stark illustration of the plan’s limitations.The Texas plan did not anticipate the possibility of another large industry threatening the lizard’s habitat. So the comptroller’s office, which oversees the state’s endangered species, was caught by surprise when the frac-sand companies started churning up sand earlier this summer. Even now, with the threat in view, the plan supplies state officials with no tools to compel the sand mining companies to join the effort to protect the lizard. The comptroller “has no authority to stop the development of frac-sand operations,”

    Evolving Oklahoma STACK play continues to draw interest as E&P operators seek sweet spots, IHS Markit says -- Despite the fact that the Oklahoma STACK oil and gas play is still evolving and its total potential is undetermined, evidence thus far indicates the play is delivering impressive results, leading operators to commit significant 2017 CAPEX to its development, according to new analysis from IHS Markit.  “The Oklahoma STACK (Sooner Trend Anadarko Basin Canadian and Kingfisher County) play is early in its development but wells have shown great productivity,” said Imre Kugler, associate director, energy research at IHS Markit and author of the IHS Markit Plays and Basins: Oklahoma STACK analysis. “Questions still remain regarding potential across various horizons; however, for operators with acreage and capital to test the play, economic upside exists so the biggest six operators in the play are on track to invest more than $2.5 billion during 2017.” Whether the play will be a major contributor to domestic supply is still undetermined, Kugler said. “To date, fewer than 1,000 wells have been brought online in the liquids-rich STACK play, but estimated break-evens for first quintile wells in the play are quite low and competitive with top Permian plays. First quintile wells in the STACK for both short- and long-laterals are estimated to break even under $30 per barrel.” The early stage of the STACK play equates to some variance in well performance as operators seek to optimize development. The spread between first and second quintile wells is wider when compared with the relatively more well-known Permian plays, with second quintile STACK wells estimated to break even near $41 per barrel for longer laterals, and $55 per barrel for shorter laterals, IHS Markit said. 

    Anadarko shale basin lands Oklahoma on EIA map - (UPI) -- With more than 10 percent of the new wells drilled in U.S. shale basins, Oklahoma has earned a place in new monthly data reporting, the government said.The U.S. Energy Information Administration said it was adding the Anadarko region to its monthly drilling report. The shale basin covers 24 counties in Oklahoma and five in Texas."The Anadarko region accounts for approximately 450,000 barrels per day of oil production, 5.7 billion cubic feet per day of natural gas production, 13 percent of new wells drilled, and 13 percent of drilled but uncompleted wells as of July 2017," EIA reported.Oklahoma is home to about 4 percent of the total petroleum reserves in the country and accounts for as much as 5 percent of the total crude oil production in the United States. The EIA said the Anadarko basin is a legacy producer that's seen an uptick in activity from the STACK and SCOOP reservoirs within the broader shale area. Shale work in Oklahoma is under close monitoring because of a new fault located in the region by the U.S. Geological Survey. At least eight earthquakes were recorded Aug. 3 in the state, the largest of which was a magnitude-4.2 event. EIA estimates August oil production from the Anadarko shale at 447,000 barrels per day and output should increase about 2.5 percent in September. Gas production should average 5.9 million cubic feet for August and increase 1.3 percent next month. On natural gas in particular, EIA said it was consolidating data from the Marcellus and Utica shale basins that cover states from Ohio to New York.

    Fracking boom: US shale oil output to top 6 million barrels a day in August and September -- U.S. shale drillers will keep posting strong gains in August and September, with production from shale regions topping 6 million barrels a day, the Department of Energy projected. The department's Energy Information Administration projected output in several key oil producing regions will grow by 117,000 barrels a day to 6.15 million barrels a day in September. The region's output is seen topping 6 million barrels a day in August. The forecast for this month is significantly higher than a prior estimate, primarily because the EIA began projecting output for the Anadarko region, which covers parts of Oklahoma and Texas, in its August Drilling Productivity Report. Drillers have recently flocked to the Anadarko because the cost of producing oil there is relatively low. The latest Drilling Productivity Report from EIA marks the sixth straight month the agency has forecast production growth above 100,000 barrels a day. Oil prices have averaged approximately $49.50 this year, jumping above the key $50 level at times, allowing U.S. drillers to lock in higher prices for future deliveries. That has allowed them to increase output in America's shale regions, where producers rely on expensive drilling methods to free oil and gas from rock formations. Drillers in Texas and New Mexico's Permian Basin, the center of the shale oil recovery, are on pace to boost drilling by 64,000 barrels a day in September to a total of 2.6 million barrels a day, EIA forecasts. Output from the Niobrara region underlying northern Colorado and neighboring states is set to rise by 15,000 barrels a day, EIA said. The Eagle Ford region in South Texas is likely to see output rise 14,000 barrels day. The Anadarko and North Dakota's Bakken region are tracking for growth of 12,000 and 10,000 barrels a day, respectively.

    Wyoming Fugitive Sought For Dumping Radioactive Oilfield Waste --The U.S. Environmental Protection Agency’s criminal investigation division has issued a bulletin about a fugitive last seen in Wyoming wanted on federal fraud charges of illegally dumping radioactive waste in North Dakota.James Kenneth Ward was last seen in March 2013 during a prison transport from Phoenix when he escaped custody in the Wyoming desert, according to the EPA’s wanted poster and news release. The poster does not identify the desert.Ward, 55, is considered violent and dangerous and should not be approached, according to the EPA.He was already a fugitive. He was returned to the United States to face larceny charges in Wyoming when he escaped.In April, a grand jury for the U.S. District Court in Montana indicted Ward on one count of conspiracy to commit wire fraud and one count of wire fraud. The indictment says Ward, sometimes with his company “JK Services” and others, contracted with a Colorado-based corporation, Zenith Produced Water, LLC. Zenith owned and operated saltwater disposal wells that injected wastewater into the ground. The wastewater is a byproduct of water used in hydraulic fracturing, or “fracking.” That water has solids that are pollutants and radioactive substances that are trapped in tubular nets called “filter bags” or “filter socks.”According to the contract, Ward, JK Services and others were supposed to dispose of the filter socks in a proper facility licensed by North Dakota. Instead, Ward dumped them in an abandoned gas station in Noonan, N.D. From April 2011 through February 2014, Ward and others sent invoices to Zenith for totaling $9,970 for the disposals.

    California Drinking Water Advocates Fight Fracking - California regulators are not doing enough to protect groundwater from wastewater injection by the energy industry, according to a new report by KQED.“Oil companies in California produce tons of wastewater. On average, for every barrel of oil, a California oil well produces 19 barrels of water, often laden with salts, trace metals and chemicals like benzene,” the report said.To discard the wastewater, energy companies pump it into the ground.“It’s the standard way in which oil companies dispose of wastewater in California: using injection wells, which are not much more than a pipe going into the ground with a gauge to monitor water pressure,” the report said.“The wastewater is deposited pretty deep, below the usable groundwater, into aquifers that are already too salty to be drinkable,” the report said.The question is whether the wastewater is being disposed of at a sufficient depth. “Groundwater that’s potentially drinkable is automatically off limits for oil companies for wastewater disposal. But if groundwater quality is already tainted by oil or salts, then companies can get permission from state agencies and the federal Environmental Protection Agency to put wastewater there,” the report said. Briana Mordick of the NRDC said the problem is widespread.“There are thousands of wells spread all across the state that are potentially impacting clean drinking water,” she said, per the report.Poor data is part of the problem, per KQED:  State oil regulators grant permits for wastewater injection wells, so knowing the boundaries between protected and unprotected aquifers is crucial. But for decades, Mordick says, state regulators confused those boundaries.

    Federal judge clears way for completion of Missouri River water project in North Dakota (AP) — A federal judge has cleared the way for completion of a $244 million project to bring Missouri River water to residents of northwestern North Dakota, though the state of Missouri and the Canadian province of Manitoba can appeal.U.S. District Judge Rosemary Collyer in Washington, D.C., ruled Thursday that the Northwest Area Water Supply project complies with federal environmental law. "This court's work is done because the Bureau of Reclamation has finally done its work," Collyer wrote.NAWS was first authorized by Congress in 1986, but it's been tied up in the courts the last 15 years. Manitoba sued in 2002, when construction began, over concerns about the pipeline's possible transfer of harmful bacteria or other agents from the Missouri River Basin to the Hudson Bay Basin north of the border. Missouri sued in 2009 over fears that the pipeline would deplete one of its key sources of water. The Missouri River provides water to 3 million Missouri residents and is vital to the state's shipping and agriculture industries. The federal Bureau of Reclamation in 2015 released its final environmental study on the project, calling for more stringent water treatment. Collyer said the study satisfies federal law requirements, and she ruled in favor of the U.S. government while rejecting Manitoba's claim and dismissing Missouri's.Both plaintiffs can appeal. Attorneys for Manitoba and Missouri didn't immediately respond to requests for comment Friday.

    As Dakota Access comes online, America’s most pipeline-constrained shale play sees new life -- Ian Dundas expects to see far fewer oil trains rumbling across the sprawling farmlands of North Dakota in coming years. Dundas is the chief executive of Calgary-based Enerplus Corp., one of the first companies to enter the Bakken, an oilfield spanning southern Saskatchewan, North Dakota and Montana. In the absence of available pipeline capacity, companies operating in the region had for years moved oil on an existing rail network in Canada and the United States. As production boomed, producers began investing more in oil-by-rail terminals, paying a premium to get their product to market. But the completion of the highly contentious Dakota Access pipeline in June, a major oil conduit carrying some 570,000 barrels per day of crude from North Dakota to Illinois, has upended the region’s dependence on rail. The pipeline has dramatically reduced shipping costs for Bakken companies, bringing overall costs in line with other U.S. shale producers, like those in the highly prolific Permian Basin in Texas and New Mexico. “It’s going to be a pretty powerful advantage that we haven’t had for the past six or seven years,” Dundas said in an interview Thursday.Production in the Bakken began to rocket upward around 2009, growing from roughly 200,000 barrels per day to more than one million bpd in less than five years. The rapid growth did not come alongside an equally fast expansion of pipelines, however, and the pipeline system in the region quickly became congested. By 2014, Bakken producers were shipping around 500,000 barrels per day of crude by rail car, nearly half of the 1.2 million bpd total production. Before Dakota Access, about 25 per cent of the oil shipped out of the state travelled by rail. Now that figure is closer to seven per cent, according to recent data. The higher availability of pipeline capacity has translated into much lower shipping costs for producers, giving companies more value for every barrel of oil. 

    Minnesota releases review on disputed Enbridge oil pipeline - Minnesota regulators on Thursday released the final environmental review of Enbridge Energy's proposal to replace its aging Line 3 oil pipeline, which carries Canadian tar sands crude across northern Minnesota to Wisconsin. The state Commerce Department has updated and expanded the massive document since it released the draft for public comment in May. Changes include additional discussion of the socioeconomic impact of the project, the potential impact on tribal resources and the potential impact of oil spills, as well as the inclusion of public comments, the department said. In the process, the main document grew to just over 2,000 pages, plus around 12,000 pages of appendices. The review will inform the state Public Utilities Commission as it decides whether the project is needed and what route it should take. The commission is scheduled to decide by Dec. 11 whether the final review meets the legal requirements, and to decide on April 30 whether to give its ultimate approval to the pipeline and its route. Administrative law judges will hold hearings and take more public testimony along the way. Calgary, Alberta-based Enbridge proposed the $7.5 billion project because the old pipeline is now restricted to 390,000 barrels per day and its maintenance needs are growing. The replacement would restore the original capacity of 760,000 barrels per day. The company says Line 3 is a vital link in its network, and the replacement would help it continue to meet the demand for Canadian oil from refineries in Minnesota, Wisconsin and elsewhere. Tribal and environmental groups are fighting the project. Like the draft, the final review says any of the routes "would have a disproportionate and adverse effect on tribal resources and tribal members."

    Trump Green Lights Arctic Drilling Project in Polar Bear Habitat - The Trump administration released an environmental review Thursday of Hilcorp Alaska's Arctic offshore drilling development. Hilcorp plans to build a 9-acre artificial island and 5.6-mile pipeline in the Beaufort Sea for its offshore drilling project. The Trump administration's draft environmental impact statement proposes to greenlight the dangerous drilling plan, which would be a first for federal waters in the Arctic . Previous Arctic project studies have warned that offshore drilling in those remote, treacherous waters carries a 75 percent chance of a major oil spill. Concerns about the Liberty project were heightened this year when Hilcorp struggled for months to fix leaks in its underwater pipelines in Cook Inlet and meet basic regulatory requirements.  "Arctic offshore drilling can't be done safely, particularly by this company. The icy, stormy waters make Arctic drilling inherently hazardous, and Hilcorp has a history of spills and regulatory violations," said Kristen Monsell, an attorney with the Center for Biological Diversity. "Polar bears, bowhead whales and other imperiled Arctic species will be in terrible danger if the Trump administration allows this reckless project to move forward."  Hilcorp's Liberty project is poised to be the first oil development project in federal Arctic waters. It was originally proposed by oil giant BP, but it is now being pursued as part of the Texas-based company's rapid expansion of its fossil fuel holdings in Alaska, including leasing 14 new federal offshore tracts in Cook Inlet for more than $3 million this summer.  In recent years federal regulators have warned the company to improve maintenance of its gas pipelines, and Alaska's state regulators have fined Hilcorp more than any other company and said "disregard for regulatory compliance is endemic to Hilcorp's approach to its Alaska operations." The Alaska Oil and Gas Conservation Commission has repeatedly cited Hilcorp for violating safety regulations for its oil and gas operations in the state.  "Nobody needs Arctic oil. Most of the world understands that, but Trump and Hilcorp just don't get it," Monsell said. "The Arctic has largely been off limits to dangerous oil drilling, and it has to stay that way."

    An Arctic Offshore Drilling Plan Advances, but Impact Statement Cites Concerns - A proposal for the first oil and gas drilling in federal offshore waters of the Arctic took a step forward Thursday as regulators released a draft environmental impact statement, which reflects concerns about the effects of the project on marine life and local communities. The so-called Liberty project, proposed by Houston-based Hilcorp, would have the company build a 24-acre gravel island in about 19 feet of water, from which they would drill up to 16 wells. Once it's up and running, the federal Bureau of Oceans and Energy Management (BOEM) expects the project to produce 58,000 barrels a day. The release of the environmental assessment incorporates months of public comments about the project, including fears that it could negatively impact marine mammals and the communities that rely on them. It kicks off the next phase of the regulatory process, brings the company one step closer to realizing a project that has been in the works for decades. An InsideClimate News investigation published last week revealed that privately owned Hilcorp has a troubling track record in Alaska, with dozens of environmental and safety violations since the company began work in the state in 2012. Those violations gained a national profile earlier this year after the company said it was unable to stop a months-long natural gas leak in Alaska's Cook Inlet as long as there was ice on the water. "Given Hilcorp's history of two recent major pipeline leaks in Alaska's Cook Inlet, an oil spill in Louisiana, and a number of significant fines for violating state drilling requirements, there are many reasons to doubt the company's ability to safely mobilize and operate in the challenging conditions of the Arctic Ocean," said Lois Epstein, the Arctic program director for The Wilderness Society.

    Greenpeace Activists Interrupt Operations at an Arctic Oil Drilling Site -  Peaceful activists, including one American, from a Greenpeace ship, the Arctic Sunrise, have stalled Statoil's oil operations in the Barents Sea off the Norwegian coast. The activists entered the exclusion zone of Statoil's oil rig, Songa Enabler in the Barents Sea with kayaks and inflatable boats, while swimmers protested in the water with banners.  The activists plan to sustain the peaceful protest to stall Statoil's oil drilling as long as possible to send a message that the Norwegian government is failing its commitments to Norway's constitution and the Paris agreement . They are also displaying a constructed giant globe in front of the rig with written statements to the government.  Thirty-five activists from 25 countries are escalating a peaceful protest after tailing the rig for one month in the Barents Sea.  The Norwegian government has recently opened up a new oil frontier in the Arctic . The state-owned oil company has just started to drill for oil at the Korpfjell well, a controversial site 415 kilometers from land. It is close to the ice edge and an important feeding areas for seabirds. This is the first opening of new areas for oil drillings in 20 years and it is the northernmost area licensed by Norway.

    U.S. Oil Drillers Keep Pressure on OPEC With Record Shale Output -- Oil output from major U.S. shale plays is poised to reach a fresh record next month, further complicating OPEC’s efforts to support prices. The gain is being led by the oil-rich Permian basin of Texas and New Mexico, where production has risen steadily over the past two years. The Energy Information Administration projects Permian output to rise by 64,000 barrels in September, reaching a record of 2.6 million barrels a day. The forecast comes just as Saudi Arabia and Iraq, the two biggest producers of the Organization of Petroleum Exporting Countries promised to strengthen their commitment to cutting production. Crude output in the U.S. meanwhile has climbed in nine of the last 10 months. Prices declined to a three-week low Monday as the growing U.S. output and signs of lower demand from China stoked concern that a global oversupply will linger.Shale drillers such as Pioneer Natural Resources Co. and Devon Energy Corp. have been taking advantage of price rallies near $50 a barrel to hedge their output for next year and beyond, with some producers locking in prices as far out as 2023, according to data compiled by Bloomberg.  The EIA expanded its monthly forecasts to include the Anadarko shale region, which spans 24 Oklahoma and five Texas counties. The region, a well-established oil and gas producing area, has seen an uptick in improved drilling and completion technology, the agency said in its monthly Drilling Productivity report released Monday.  The agency also made another change to reflect shifts in oil and gas production: The EIA consolidated data from the Marcellus and Utica areas, known for their natural gas production, and classified it as a single Appalachia region.  "Combining the relatively small number of active rigs across the broader Appalachia region should improve the precision of our productivity estimates," the EIA said, noting that drilling patterns no longer align with previous regional definitions.  Crude output from the Eagle Ford and Bakken regions are also expected to rise in September, with Eagle Ford projected to produce 1.39 million barrels a day and Bakken forecast to produce 1.05 million. Daily output in the newly included Anadarko region is poised to reach 459,000 barrels.

    Analysis - When will tight oil make money? | Wood Mackenzie --Tight oil profitability has been the focus of much debate since the oil price collapse of 2014. Its ability to scale down (and up) quickly and break even at low price points has made the Permian the star of the show for investors — but there are still plenty of sceptics when it comes to tight oil profitability.We believe tight oil producers will begin generating significant free cash flow in 2020.Tight oil specialists failed to generate positive cash flow in 28 of the 29 quarters since 2010. We've found that tight oil requires as much upfront investment as conventional projects, and like most early-life operations, comes with its own learning curve and infrastructure development – as well as being highly sensitive to the downturn in price. It will take a while to generate returns. Andy McConn, Principal Analyst, discusses why we shouldn't have expected tight oil to deliver profitability right out of the gate:

    Bakken and western Canadian producers wrangle for gas takeaway capacity - Associated natural gas production from North Dakota’s oil-focused Bakken Shale is rising as rigs are being added in the region. Bakken gas output reached a record 1.18 Bcf/d this past May. The incremental gas production in the area is intensifying competition with imports from the already-beleaguered Western Canadian Sedimentary Basin (WCSB), which share the same pipeline capacity and target the same Midwest demand markets. The trend also is prompting calls for more pipeline capacity out of the Bakken. How much more capacity is needed and by when? Today, we look at existing natural gas takeaway capacity and flows out of the Bakken.  We first wrote about rising Bakken gas production and the impending battle with Canadian gas for pipeline takeaway capacity in a July 2012 blog, Border Wars. At the time, crude oil was trading at upwards of $80/bbl. Oil production from North Dakota’s Bakken Shale had just climbed above 600 Mb/d. Associated gas volumes, including the natural gas liquids content, were just barely approaching 700 MMcf/d, and nearly 40% of that gas was being flared because of midstream capacity constraints, allowing little more than 400 MMcf/d of dry gas to hit the pipelines. But at $80/bbl, oil production was slated to climb rapidly, and with it came increasing volumes of associated gas. By late 2014, Bakken oil output had doubled to 1.2 MMb/d, dry gas volumes were approaching 900 MMcf/d, North Dakota implemented new restrictions on gas flaring to be phased in over a few years and consequently the market was becoming concerned about pipeline takeaway capacity. But about that time, the 2014 oil-price collapse took a severe toll on rig counts, Bakken crude output declined slowing the growth in associated gas volumes, and for a little while concerns about the possibility of insufficient gas takeaway capacity were deferred — at least until now.

    The keys to Keystone XL success are in oil supply and demand, flows and prices - Keystone XL faces a final regulatory hurdle in Nebraska, and there are still concerns whether the crude oil pipeline makes economic sense for TransCanada. Senior oil editor Meghan Gordon delves into whether recent news events and an ever-changing supply and demand situation will justify the controversial pipeline. She speaks with Allan Fogwill, president and CEO of the Canadian Energy Research Institute, about production from Western Canada's oil sands, Venezuela potentially leaving a need for heavy crude and how prices factor into decisions.

    Are Investors Bailing On U.S. Shale? -- U.S. oil production continues to grow, with the EIA reporting a shocking jump in output last week. Total U.S. production rose to 9.5 million barrels per day (mb/d) for the week ending on August 11, up 79,000 bpd from a week earlier. That puts U.S. output at the highest level in nearly two and a half years. The U.S. shale industry has been adding new supply pretty much uninterrupted since late last year, despite volatile swings in oil prices over the course of 2017.  To be sure, some shale drillers have breakeven prices well below the prevailing market price, allowing them to make money even during those tough times.  But in the aggregate, the industry needs something around $50 per barrel to be sustainable, or perhaps even $55 per barrel. If that is the case, how is it that the U.S. oil industry continues to add new supply, even when some companies are not even making money?  The short answer is that they have been given a long leash by Wall Street. Generous financing, high levels of debt, and repeated equity issuance has given shale drillers a lot to work with. Many of them have seen their debt levels climb, but major investors have been patient, hoping that the growth-before-profits model will eventually pay off.  But there are several problems with that. First, the conundrum for shale E&Ps is that they have not successfully lowered the breakeven price on a structural basis. A lot of the “efficiency gains” were the result of cyclical – and temporary – declines in the cost of labor and services. The market downturn led to price deflation for oilfield services – equipment and rig rates, completion services, frac sand, etc. Those costs are rising again as activity picks up. Oilfield services companies will demand higher prices, labor shortages will inflate wages, and so on. As the price of oil ticks up, so will breakeven prices.  The second problem is that most analysts do not see oil prices really staging a rally, at least anytime soon. Just to take one example, Citigroup estimates that WTI will not average $52 per barrel…until 2020. The third, and perhaps most glaring, problem with the growth-first shale model is that shale companies were burning through cash when oil prices were $100 per barrel, and they are still burning through cash even after the much-heralded efficiency gains achieved over the last three years. According to Bloomberg and Bloomberg Gadfly, the free cash flow after capex for a collection of 33 shale E&Ps has been profoundly negative over the past 12 months.

    UK shale geology structurally potentially unproductive: study -- The UK's geology is unlikely to be suitable for hydraulic fracturing, according to research released Thursday by John Underhill, Chief Scientist at Edinburgh's Heriot-Watt University. The report said that while fracking in the UK has largely been stymied by environmental and political opposition, unfavorable geology means that the technology would be unproductive in any case.An estimate by the British Geological Survey found in 2013 that Central Britain, which includes the prospective Bowland basin, could hold between 822 and 2,281 Tcf (23.3-64.6 Tcm) of gas-in-place, the lower figure representing P90 reserves -- a 90% probability -- and the higher figure P10 reserves -- a 10% probability. Although these figures are huge in comparison with the UK's proved conventional gas reserves, which at end-2016 were just 7.3 Tcf, they do not represent recoverable gas. The BGS stressed in the report, as it does in others, that assessments of the UK's recoverable shale gas resource remain in their infancy. Also in 2013, a much more modest although still substantial figure for the UK's unproved technically recoverable wet shale gas reserves was provided by the US Energy Information Administration of 25.8 Tcf.

    Oil traders expect Asia to import more Venezuelan crude if U.S. sanctions kick in - Asia would be the biggest beneficiary of any potential sanctions by the United States on Venezuela's oil sector, said traders and analysts, as exports from the South American OPEC member could be redirected to the region, filling a vacuum left by producer supply cuts. Washington is considering sanctions on Venezuela's oil industry in response to the ruling Socialist Party's crackdown on officials and parties opposed to the government. An embargo against Venezuelan crude could block imports of about 740,000 barrels per day to the U.S. Asian refiners would welcome the so-called heavy, or higher density, crude since production cuts by the Organization of Petroleum Exporting Countries (OPEC) have mainly curtailed this type of oil. At the same time, the start-up of new refining capacity is boosting demand. China and India, the two biggest buyers of Venezuelan crude after the United States, have room to increase imports while other north Asian refiners, with equipment sophisticated enough to handle heavy Venezuelan oil, are seeking opportunities to tap this supply, analysts and traders said. "Whatever oil that the United States doesn't want will find its way into the global market," a trader with a north Asian refiner said, adding that Venezuelan oil could be a good fit for the company's plant. A trader with another north Asian refiner said he is also looking for opportunities to import Venezuelan crude if the U.S. imposes sanctions. The sources spoke on the condition of anonymity because they were not authorized to speak to media.Venezuela's main creditors China and Russia will have first priority to its oil if sanctions are imposed, the sources and analysts said, and the countries would likely make the surplus cargoes available in the spot market. 

    Oil and gas companies pull foreign personnel out of Venezuela -- Major international oil and gas companies are withdrawing their foreign staff from Venezuela following the country’s growing political crisis and a rapidly deteriorating law and order situation, according newswire and regional media reports. Spanish oil giant Repsol is among the oil and gas companies withdrawing foreign workers from its oilfields in Venezuela. French oil major Total has asked for a number of its employees to leave Venezuela, while Italy’s Eni is only keeping “essential expatriate personnel” in the country. Bloomberg reports that Norway’s Statoil withdrew its “last three foreign workers” before the July election, while US giant Chevron has removed fewer than 10 foreign employees and retains a substantial expatriate workforce there. Bloomberg added that employees whose assignments were scheduled to end within the next six months had their contracts cut short, while some were asked to do “Venezuela-related work remotely” from the US or other countries the company has bases in. Executives already outside Venezuela have been ordered not to return to the country.

    Vladimir's Venezuela - Leveraging loans to Caracas, Moscow snaps up oil assets   (Reuters) - Venezuela’s unraveling socialist government is increasingly turning to ally Russia for the cash and credit it needs to survive – and offering prized state-owned oil assets in return, sources familiar with the negotiations told Reuters. As Caracas struggles to contain an economic meltdown and violent street protests, Moscow is using its position as Venezuela’s lender of last resort to gain more control over the OPEC nation’s crude reserves, the largest in the world. Venezuela's state-owned oil firm, Petroleos de Venezuela (PDVSA), has been secretly negotiating since at least early this year with Russia's biggest state-owned oil company, Rosneft (ROSN.MM) - offering ownership interests in up to nine of Venezuela's most productive petroleum projects, according to a top Venezuelan government official and two industry sources familiar with the talks. Moscow has substantial leverage in the negotiations: Cash from Russia and Rosneft has been crucial in helping the financially strapped government of Venezuelan President Nicolas Maduro avoid a sovereign debt default or a political coup. Rosneft delivered Venezuela’s state-owned firm more than $1 billion in April alone in exchange for a promise of oil shipments later. On at least two occasions, the Venezuelan government has used Russian cash to avoid imminent defaults on payments to bondholders, a high-level PDVSA official told Reuters. Rosneft has also positioned itself as a middleman in sales of Venezuelan oil to customers worldwide. Much of it ends up at refineries in the United States – despite U.S. sanctions against Russia – because it is sold through intermediaries such as oil trading firms, according to internal PDVSA trade reports seen by Reuters and a source at the firm.

    Putin nominates German ex-chancellor Schroeder to Rosneft board -- Vladimir Putin has nominated former German chancellor Gerhard Schroeder to the board of its biggest oil producer Rosneft as an independent director, according to a government decree published late on Friday.Chancellor from 1998 to 2005, Schroeder is currently the chairman of the shareholders’ committee of Nord Stream AG, a Gazprom-led consortium established for construction of pipeline carrying Russian natural gas across the Baltic.Rosneft, in which Russia has a 50 percent plus one share, is under Western sanctions over Moscow’s role in the Ukraine crisis.Schroeder, who calls Russian President Vladimir Putin his friend, has criticized moves to impose sanctions on Russia. Rosneft has been targeted by Western sanctions over Russia’s seizure and illegal annexation of Ukraine’s Crimea region and its support for pro-Russia separatists in eastern Ukraine. Schroeder, a Social Democrat who was German chancellor from 1998 to 2005, celebrated his 70th birthday with Putin at St. Petersburg’s Yusupov Palace in April 2014 as the crisis over Ukraine was deepening.

    America can’t substitute Russian gas in Europe even if it ships it for free – diplomat - The United States will most likely fail to oust Russia as the main supplier of gas to Europe, according to the Russian envoy to the European Union Vladimir Chizhov.  "And if even Americans supplied liquefied natural gas (LNG) to Europe free of charge, they simply would not have had enough opportunity to replace Russian supplies," Chizhov said in an interview with Sputnik radio.The envoy suggests three reasons why the US cannot replace Russian gas supplies."In the United States there is currently a single export terminal for LNG shipments in Louisiana, they plan to build another half-dozen terminals in different parts of the country, but this will take time,” Chizhov said.“Second, the amount of gas produced in the United States may not be enough for the European market,” he added.The third reason is that Europe does not have enough terminals to receive LNG or tankers for its transportation, said the Russian diplomat.Over the last year, the US has increased LNG supplies to Europe. However, it now has only six percent of European LNG imports, which doesn't take into account natural gas supplies through pipelines.Royal Dutch Shell and BP have confirmed Russia would continue to be Europe's top gas supplier at least through 2035. The Russian share of the European gas market increased to 34 percent last year, according to Gazprom. Europe also imported 24 percent from Norway, 13 percent came in LNG supplies, and 11 percent from Algeria.

    Analysis: Panama Canal toll hike unlikely to impact LNG: data - A move to hike tariffs on vessels transiting the Panama Canal, approved by the Cabinet Council of the Republic of Panama Tuesday, is unlikely to significantly alter export decisions or even shipping routes for LNG cargoes loading on the US Gulf Coast, according to S&P Global Platts data. For LNG vessels, the revised toll structure effectively raises the cost of transiting the canal to an estimated 23 cents/MMBtu, representing a 15% hike over the current tariff of 20 cents/MMBtu, data compiled by Platts Analytics show. The revised fees become effective October 1. The modifications to the existing toll structure for vessels follows an analysis of the potential impact on supply chain logistics and end-user costs and after formal and informal consultations with customers and industry representatives in Europe, Asia and North America, the Panama Canal Authority said Tuesday. But analysis suggests that small changes in the Panama Canal's tariff structure are unlikely to alter export calculations. Even significant changes in the FOB cost of an LNG cargo loaded from the US Gulf Coast have been largely secondary in export calculations, Platts data shows. Over the 18-month period since Gulf Coast LNG exports began, destination market prices have figured prominently in offtakers' export calculations. Despite a brief spike last winter in the price of the Platts Japan Korea Marker, the benchmark index for spot cargoes delivered to east Asia, global gas prices have remained largely depressed since US exports began, hovering in a narrow range around the high-$4s/MMBtu to low-$6s/MMBtu. Faced with weak prices in traditional export markets, offtakers from Cheniere Energy's Sabine Pass terminal have opted largely to ship cargoes to emerging gas markets that, although illiquid and opaque, have offered higher destination-market prices. Since Gulf Coast exports began, over 67% of US LNG cargoes have landed in developing markets outside of Japan, South Korea, China, Taiwan and western Europe, while some 40% of US cargoes have been shipped to Latin America, Platts Analytics data show.

    Australia notches up record high for LNG exports in July: EnergyQuest -- Australia's LNG exports were at a record high in July, with strong performance from operations on the west coast and stable volumes on the east coast, consultancy EnergyQuest said Tuesday.The July exports stood at 5.4 million mt with 81 cargoes, which was up from 4.9 million mt via 74 cargoes in June, it said.  This reflected higher output from Chevron's Gorgon LNG project and Woodside's North West Shelf LNG, with total west coast projects shipping 3.7 million mt during the month, up from 3.2 million mt in June, the company said.On the east coast, the Queensland-based Gladstone LNG, Australia Pacific LNG and Queensland Curtis LNG projects' total was unchanged month on month at 1.7 million mt, it said. "On average, west coast projects operated at 108% of nameplate capacity on an annualized basis, but Queensland projects only operated at 81%, notwithstanding APLNG averaging 110%," it said. APLNG was in the midst of a 90-day operational test for most of the month, during which it had to run at full capacity. The 7.8 million mt/year nameplate capacity GLNG facility, meanwhile, is expected to only ramp up to 6 million mt/year by the end of 2019.  Japan, China and South Korea continued to be the dominant destinations for Australian exports, comprising 89% of deliveries in July against 92% in June, EnergyQuest said. Meanwhile, gas production from the upstream processing plants averaged 3,631 Tj/d in July, up from 3,570 Tj/d in June. The higher production appears to reflect higher domestic demand, it said.

    From leader to loser: Australia risks missing next LNG wave (Reuters) - Should the arrival of the last major piece of kit in Australia's $180 billion liquefied natural gas (LNG) spree be a cause for celebration or for a wake? It may seem that the arrival of the Ichthys Venturer floating production, storage and offloading facility would be worthy of breaking out the champagne. The vessel, which will be moored some 220 kilometers (132 miles) off the northwestern coast as part of Inpex's Ichthys project, is the final piece of the jigsaw that completes eight massive new LNG ventures. These projects, when in full production, will see Australia overtake Qatar as the world's largest producer of the super-chilled fuel, and become an energy export superpower when one considers the country is already the world's biggest shipper of coal and a significant producer of uranium. While these accomplishments are worthy of a toast or two, there are also factors that serve to put a dampener on the party. The first is that Australia's rise to the top of the global LNG tree may be short-lived, as Qatar has announced plans to boost its output beyond the 85.7 million tonnes of LNG capacity already operating or scheduled to start up by the end of next year. Qatar announced on July 4 it planned to raise its capacity by 30 percent, which would take it to around 100 million tonnes per annum, enough to take back the crown from Australia. The problem for Australia is not the loss of prestige, it's the fact that Qataris are able to boost capacity by doing brownfield expansions of existing facilities, which is considerably cheaper than building new projects from scratch. No new LNG project has reached a final investment decision in Australia since 2012, even though at one stage there were five ventures with a capacity of 31.5 million tonnes a year under consideration.

    Indonesia's oil and gas sector slumps, falling to 3% of nation's GDP --Once a cornerstone of the economy, Indonesia's oil and gas sector is in a slump, even as the country's appetite for energy soars. Hit by a drop in global prices, changing regulations and competition from neighbours that are proving more attractive to international energy companies, South-east Asia's biggest economy is facing a decline in oil revenue and steadily rising fuel imports. With an economy growing at a 5 per cent clip and the government embarking on a vast infrastructure roll-out, the oil and gas industry is sounding alarm bells over the decline of a sector that five years ago accounted for almost 6 per cent of Indonesia's gross domestic product (GDP) but, last year, contributed only 3 per cent.Investment for exploration in Indonesia shrank to US$100 million (S$137 million) last year from US$1.3 billion in 2012, according to government data. A lack of drilling success and commercialisation issues have weakened Indonesia's outlook, and spending is likely to drop further, said Mr Johan Utama, a South-east Asia oil analyst with Wood Mackenzie. The decline has also reduced the industry's contribution to state coffers, which accounted for a quarter of the government's revenue a decade ago. Last year, that had fallen to 3 per cent. Indonesia's Energy and Mineral Resources Minister Ignasius Jonan said in April that the government was planning for expansion and aimed to lure as much as US$200 billion in investment over the next decade, offering incentives such as tax-free import of drilling equipment and simpler cost recovery.

    Indonesian Pertamina's H1 oil output rises 12% to 343,000 b/d, on track to hit 2017 target - Indonesia's state-owned Pertamina has produced 343,000 b/d of crude oil in the first-half of 2017, up 12% year on year, upstream director Syamsu Alam said late Wednesday. "I think the crude production this year can meet our 2017 target of 354,000 b/d. But gas production may be ... lower compared with the target of 2.08 Bcf/d, due to lower demand and some gas fields [not being able to] produce," he said. The company produced 2.022 Bcf/d of natural gas in H1 2017, up 4% from 1.938 Bcf/d in the same period a year ago, Alam said. Meanwhile, Pertamina's H1 2017 net profit slid 24% year on year to $1.4 billion, despite revenue rising 19% to $20.5 billion, the president director of Pertamina Elia Massa Manik said. "In the first half of 2017, the external environment was still very 'volatile' with the world oil price continuing to rise. The rising of crude oil price has become an incentive for the upstream business. It has, however, also affected the increase in cost of goods sold in the downstream sector, which has a significant impact on the company's net profit," Manik explained in a statement released Wednesday. The Indonesian Crude Price in H1 reached $48.9/b, compared with $36.16/b in the same period a year ago, Manik said. Pertamina forecasts that its net profit this year may reach only $2.3 billion, down from the original target of $3.04 billion, finance director Arief Budiman said.

    Market Movers - Asia, Aug 14-18: Asian crude buyers digest IEA oversupply worries (video) In its latest report, the International Energy Agency said that global market oversupply remained a cause for worry. Crude buyers in Asia will be looking at how the market reacts to these comments as they set their buying strategy for the coming months. Meanwhile, extensive flooding in Russia is affecting coal supply to Asia. And Taiwan's increasing demand for refined sugar has boosted Thai white sugar cash premiums. Associate editor Kevin Seoexplores these and other topics that may impact Asia’s commodity markets this week.

    India's IOC buys first US sweet crude for end-October delivery -- State-run refiner Indian Oil Corp. has for the first time bought 950,000 barrels of light sweet Eagle Ford shale oil from the US, company officials said Friday. It also bought 950,000 barrels of US Gulf Coast medium sour crude Mars, the second such purchase of the grade. A total of 1.9 million barrels of both US crude grades will be shipped by the end of October. No pricing details were provided. In July, IOC sealed its first deal to import 1.6 million barrels of crude from the US for delivery in the first week of October to its Paradip refinery on India's east coast. The July deal made IOC the first state-run refiner in India to buy US crude. This deal came shortly after Indian Prime Minister Narendra Modi's visit to the US in June, where both countries discussed the possibility of boosting cooperation in the energy sector. The recent OPEC/non-OPEC capacity cuts have meant that India has had to diversify its crude suppliers, with state-run refiners making purchases of US crude grades.Bharat Petroleum Corp. Ltd., a state-run refiner, has been regularly buying US crude since July.Hindustan Petroleum Corp. Ltd., another state-run refiner, plans to import US sweet crude in the next few months for its Vizag refinery in southern India, company officials said recently. India currently depends on OPEC countries for 86% of its oil imports, with Iraq, Saudi Arabia, Iran, and UAE its major suppliers.

    Analysis: Jet fuel a winner as India's love affair with flying intensifies -- Jet fuel has been witnessing the sharpest growth among all oil products in India so far this year, with a double-digit growth in the January-July period, as the aviation sector expands capacity to keep up with the steep growth in demand for air travel in one of the world's fastest-growing markets. India's oil products demand - January to July 2017A more affluent middle-class, intense competition among low-cost airlines, and robust economic growth -- all these factors are contributing to an exponential growth in air travel in the country. To sum up, air travel, which was a luxury in India a couple of decades ago, is not so anymore. "The ramping up of capacities by airline players is expected to result in a 10%-11% growth in demand for aviation turbine fuel this year," said Rahul Prithiani, director of research at CRISIL, an S&P Global company. Jet fuel consumption in India grew more than 11% year on year to 4.31 million mt in the January-July period, compared with 3.88 million mt in the same period a year earlier, data from the Petroleum Planning and Analysis Cell showed. In July alone, demand for jet fuel grew 10.4% to 617,000 mt, from 559,000 mt in the year-ago period. According to CRISIL estimate, Available Seat Km -- the number of seats available multiplied by the number of miles or kilometers flown, which is used as a measure for growth in air travel -- is expected to increase by 18% in fiscal 2017-2018 (April-March) in the country. This in turn will strongly support the growth in aviation fuel demand. "Air tickets are getting increasingly affordable because of intensifying competition between budget airlines," said Lim Jit Yang, director for oil market analysis for Asia-Pacific at PIRA Energy Group, a unit of S&P Global Platts. "Rising incomes and strong GDP growth are also helping the aviation sector to post robust growth." Indian government officials believe that the country has the potential to become the biggest aviation market by 2030. Low-cost airlines hold the largest share of the aviation market in India.

    India says LNG import deal with Qatar remains in place, new deal unlikely - India will continue its 8.5 million mt/year LNG import deal with Qatar without any change in contract clauses, oil ministry officials said Thursday. "There is no proposal to sign any fresh import contract with Qatar," said one official. Qatar is India's largest source of natural gas. Designated importer state-owned Petronet LNG signed a long-term deal with Qatar's RasGas in 1999 for 7.5 million mt/year of LNG on an FOB basis. In 2015, it struck a deal with RasGas to import an additional 1 million mt/year for a 12-year period from January 1, 2016. India in recent years has wanted Qatar to explore the option of investing in India's downstream power sector, and in particular in a stranded gas-based power project. Petronet runs LNG receiving and regasification terminals at Dahej in Gujarat and Kochi in Kerala, and is building a third in Andhra Pradesh. It posted a 12% year-on-year jump in regasification volumes to 192 trillion Btu for the April-June quarter at its flagship terminal at Dahej, the highest on record for the terminal, company officials said. The 10 million mt/year Dahej terminal operated at 97% of capacity in the quarter. The Kochi Terminal also processed its highest ever volume of LNG over April-June, at 8 trillion Btu.

    China to build new shale gas bases, offer more oil and gas block tenders (Reuters) - China is likely to build two shale gas bases in the south of the country and open up tenders for more oil and gas exploration blocks in the world's biggest energy producer, the Ministry of Land Resources said on Tuesday. At a news conference in the capital, ministry officials said China is likely to start commercial production of shale gas in southern city of Anye in Guizhou province and Yichang in Hubei province. The ministry did not give a timetable for the start date. The steps come as China ramps up its exploration efforts as crude oil production from ageing wells drops. Beijing is also on a mission to lift natural gas consumption to help combat smog. In the north of the country alone, China's crude oil and gas exploration efforts cover a vast 500,000 square kilometers, with new natural gas and light crude reserves having already been discovered there, the ministry said. In the shale gas expansion, China is seeking to encourage private firms to take part in a tender for shale gas exploration right in Guizhou on Aug. 18. The ministry said it will also consider more auctions of shale gas blocks outside Guizhou. Meanwhile the government of Xinjiang region in northwestern China is also planning to start a second round of oil and gas block auctions, while Sha'anxi province is also preparing to offer coal-bed methane blocks.

    China’s oil, gas exploration investment up 12.6% -- China’s oil and natural gas exploration investment rose 12.6 percent during 2012-2016 period when compared with the previous five years, the Ministry of Land and Resources (MLR) said Tuesday. With the stable investment increase during the past five years, China saw continuous growth in oil reserves, according to Yu Haifeng, a MLR official. CNPC Economics and Technology Research Institute estimated China’s reliance on oil imports exceeded 65 percent in 2016. China aims to increase domestic crude oil output to 200 million tons by 2020, while supply capacity for natural gas should exceed 360 billion cubic meters, according to the five-year plan released by the National Development and Reform Commission and the National Energy Administration in January this year. Official data showed China’s crude oil output totaled 181.21 million tons in the first 11 months of 2016 while natural gas output came in at 121.1 billion cubic meters.

    Saudi Aramco to complete first phase expansion of natural gas network by year end - Saudi Aramco plans to complete the first phase of expansion of its master gas system that supports industry and utilities, lifting its capacity to 9.6 Bcf/d, by the end of the year, the state oil giant told S&P Global Platts Sunday. Aramco built the original master gas system in the 1970s, with gas-gathering and processing facilities as the backbone of the kingdom's industry, allowing Aramco to use or market nearly all the produced gas associated with oil production. As gas demand continues to rise, Aramco has launched a two-phase initiative to expand gathering and processing capacity, adding two booster gas compressor stations in the Red Sea region, the first facilities of their kind in the kingdom, which will help supply natural gas to the Saudi Electric Company Rabigh-2 power plant and the new King Abdullah Economic City. The new facilities will also support future utilities and industrial sectors, primarily in the Rabigh area. The first booster gas compressor is now at the pre-commissioning stage, Aramco said, after it accelerated the first phase to meet the scheduled date of operations at Rabigh-2 power plant so it can avoid burning liquid fuel. A second phase of expansion will increase capacity to 12.5 Bcf/d by 2020, along with the installation of nearly 1,000 km of 56-inch diameter pipelines linking the eastern and western coasts. "This is a strategic transformation project that targets substituting oil with gas," said Saleh al-Wadei, the acting project manager. "It will save the crude oil that would have been burned to generate power."

    Hedge funds gamble for a third time on oil rebalancing: Kemp -- Hedge funds and other money managers raised their net long position in the three major futures and options contracts linked to Brent and West Texas Intermediate (WTI) to 705 million barrels in the week to Aug. 8. ( managers have boosted their net long position in Brent and WTI by the equivalent of 347 million barrels over the six weeks since June 27, according to regulatory and exchange data.Managers have nearly doubled their net long position in crude since the end of June and now have the largest net position since April.Long positions outnumber their short positions by a ratio of 5.19:1, up from a recent low of just 1.95:1 on June 27, displaying a pronounced bullish bias.But in the most recent week, the extra net length all came from the ICE Brent contract, where long positions were increased by 40 million barrels while short positions were trimmed by 19 million.By contrast, net positions in NYMEX and ICE WTI were little changed, with long positions trimmed by 2 million barrels and short positions actually up by 1 million.Increased net length in Brent is likely connected to a sudden tightening of the calendar spreads, which has seen Brent move from contango into backwardation between October and December 2017 (V7-Z7).More generally, Brent calendar spreads have tightened much more than WTI since the last week of July, which has made Brent more profitable for hedge fund managers with long positions.Increased bullishness towards crude has also been mirrored in hedge fund positions for U.S. gasoline and heating oil.Hedge funds raised their net long position in gasoline by 2 million barrels to 47 million barrels in the week to Aug. 8. Fund managers are now more bullish on gasoline prices than at any time since the middle of February.Portfolio managers also raised their net long position in U.S. heating oil by 6 million barrels to almost 25 million barrels.  Positioning in heating oil is only slightly less bullish than on gasoline, with net length the highest since April and the long/short ratio the highest since February.

    Problems For Oil - The importance of oil should not be underestimated as an energy source – and a pollutant. Almost every form of transport is dependent on it and its refined products and the present economy would not have been created without it. Most of it is burned by vehicles propelled by the Internal Combustion Engine (ICE), enabling transport of people and goods world-wide. As the number of vehicles increases, so does demand for oil and its derivatives.  With thawing in the Arctic, new oil deposits are likely to become available, giving the oil industry additional confidence that it will be able to sustain production for at least the next 50 years. Were the industry to think of Peak Oil in terms of the point at which demand for oil begins to decline, then its confidence in being able to sustain production for the next 50 years would seem misplaced for some, if not all kinds of oil.Table 1 above shows oil is not a uniform product. Some oils are heavier, more difficult to extract and require greater energy to transport and refine. Lighter oils are easily pumped and refined and these oils are the most keenly sought by consumers. Were demand for oil to decline, the first to be affected would be those which are more expensive to extract and refine – the heavier oils – but ultimately all oil production would be affected by a sustained reduction in demand and this would have a significant affect on the economies of oil producing countries, particularly those most dependent on oil revenue.Why would reduction in demand occur? Improvements have been made to the efficiency with which ICE vehicles burn fuel, thus lowering emissions but this has been off-set my an increase in the number of them in use. At present there are over 1 billion ICE vehicles in use with an additional 80 million vehicles being built each year. There has also been a trend towards production and refining of oils with higher emissions, particularly in North America. The problem with ICE vehicles are thee-fold:

    • Oil and gas extraction and refining emit greenhouse gases, particularly methane (CH4) which over its 12 year lifetime in the atmosphere is far more potent than CO2:
    • Combustion of oil-based fuels in ICE and jet engines emits CO2, Nitrous Oxides and CH4 contributing to global warming and:
    • As a result of combustion, micro-particles are emitted to the atmosphere which are inhaled and impair human health, causing cancer and cardio-pulmonary diseases.

     OPEC's long-sought success spoiled by 2018 oil supply worry --(Bloomberg) -- Oil investors are already worrying over the potential fallout when OPEC’s deal to cut output expires, marring emerging signs that the accord to shrink a glut is finally succeeding. Uncertainty about how supplies curbed by the Organization of Petroleum Exporting Countries and its allies will be returned to the market in 2018 is clouding the outlook for crude, according to BMI Research. Prices remain vulnerable even though demand is strong, production gains are largely exhausted in Libya and Nigeria, and U.S. shale output is slowing, the unit of Fitch Group said in a report.Crude fell the past two weeks as bullish signals went unheeded: Saudi Arabia cut sales to the world’s top oil market, prompt supply turned costlier than later shipments, OPEC boosted demand estimates for its crude, and U.S. inventories slid. Apart from the concern over what happens when the output accord expires in March, there are other worries. The International Energy Agency cut estimates for the amount of oil needed from OPEC and warned of doubts over the commitment of nations involved in the production deal.“OPEC is walking a tight rope,” said Ehsan Ul-Haq, London-based director of crude oil and products at Resource Economist. “If prices are above $60 a barrel then shale oil will come back. If OPEC producers decide to reduce more, prices will go above $60 a barrel. If they don’t comply fully, then prices will go below $50. It’s very difficult for them.”West Texas Intermediate, the U.S. marker, is trading near $47.50 a barrel and Brent crude, the benchmark for more than half the world’s oil, is near $51. Both are down more than 10 percent this year even as OPEC has curbed output since the start of 2017 to help lift prices from the worst crash in a generation. Futures were at more than $100 a barrel in mid-2014. BMI doesn’t expect market sentiment to return to “bullish extremes,” and said that Brent is vulnerable to short-term pullbacks over the coming months. That echoes industry researcher JBC Energy GmbH’s warning that prices are at risk of falling back without deeper output curbs by OPEC and after demand in the U.S. weakens following the end of the summer driving season that’s been spurring the declines in American inventories.

    Big Red Flag For Crude Bulls: Chinese Oil Refining Tumbles Most In Three Years As Fuel Demand Slides --Slowly but surely, what we have claimed for the past year - that it is the demand side of the oil equation, not the supply, and especially the "Chinese wildcard" that is the critical factor in setting prices - is starting to emerge and be factored in by markets. And so, just days after we posted "Another Red Flag For Oil? China’s Crude Imports Slump To 7-Month Low" arguably catalyzed by the increasingly full Chinese Strategic Petroleum Reserve, overnight we got another major red flag - once again out of China - when Bloomberg reported that China’s oil refining dropped the most in three years for the month of July, while crude output retreated from the highest this year, "as the world’s largest consumer showed signs of losing momentum." According to Bloomberg calculations based on NBS data released on Monday, as shown in the chart below oil processing in July dropped 4.4 percent from the previous month to about 10.76 million barrels a day. While daily refining output typically falls from June to July on maintenance, last month’s fall was the biggest seasonal decline since 2014. Crude oil output fell 3% to 3.84 million barrels a day. Separate data from industry consultant SCI99 revealed that state refineries in northwest and southern China at the end of July cut runs to 66.9% and 64.68% of capacity, respectively, the lowest since 2014, while independent refiners, known as teapots, were operating at around 58.78% near the lowest since May 5.

    The plight of the light sweet crude barrel - The word ‘glut’ is one of the more overused words in news stories to describe the global oil markets, but in the case of light sweet crude the moniker is true—much to the chagrin of OPEC. This oversupply has persisted for over three years and despite recent moves by OPEC and 10 other oil producers, it continues with somewhat reckless abandon. Refining oil that’s low in sulfur and boasts of high specific gravity can yield a good amount of gasoline and middle distillates, which are the main profit making products for the world’s refiners. Specifically, crude oils with an API gravity of more than 31.10 and a sulfur content of less than 0.5% are considered light and sweet. A decade or so ago, refineries wanted to process light sweet oil in order to reap the benefits of substantial volumes of middle distillates and gasoline. As a result, the crude held a premium price over heavier or sourer grades. But this oil is no longer as attractive as it used to be. Many older refiners upgraded facilities by adding cokers, while newer ones have been made with better technology that have complex distillation units, which can process heavy sour crudes and still get a lot of gasoline and diesel, at much cheaper costs. As a consequence demand for light sweets fell. Now eight months into the OPEC/non-OPEC deal, and the agreement has not yielded the desired affects, particularly because the cuts have proved toothless in tackling the imbalance of light and heavy crudes. The cuts have largely come from oil producers that produce heavy and sour oil, and the glut of light sweet oil remains. Libya and Nigeria, the two countries exempt from the deal, produce mainly light sweet crude, and with production in both recovering, this imbalance has been further skewed. Libyan output is now at four-year highs and Nigerian production is close to 18-month highs.

    Oil Falls by Most in Five Weeks Amid Fear of Chinese Demand Drop (Bloomberg) -- Oil tumbled by the most in more than five weeks as fears of falling oil demand in China overshadowed news that Libya’s crude supply was disrupted. Futures fell 2.5 percent in New York. China’s oil refining dropped the most in three years in July, while crude output retreated from the highest this year. Libya’s biggest oil field, Sharara, cut output by more than 30 percent because of security threats, a person familiar with the matter said. Meanwhile, the dollar strengthened, eroding the lure of commodities as a store of value. "We’re seeing some strength in the dollar, and the preponderance of news seems to be favoring the bears right now," Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by telephone. "If you look at the China data this morning, when it came to the China refinery runs being down in July, that’s adding to the perception of slowing demand, and it’s offsetting the concerns about Libyan oil production." Oil has lingered below $50 a barrel in New York this month as investors weigh rising global supply against output curbs from the Organization of Petroleum Exporting Countries and its allies. Data on China’s sliding refinery runs are stoking fears that the world’s second-largest oil consumer will taper its appetite. In the U.S., producers keep drilling for more oil, with the number of active rigs at its highest since April 2015 and the Energy Information Administration forecasting crude output at major shale plays reaching an all-time high of 6.15 million barrels a day in September. West Texas Intermediate for September delivery fell $1.23 to settle at $47.59 a barrel on the New York Mercantile Exchange, the lowest level in three weeks. Total volume traded was about 3 percent above the 100-day average. Brent for October settlement declined $1.37 to end the session at $50.73 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $3 to October WTI. Chinese oil processing in July dropped 4.4 percent from the previous month to about 10.76 million barrels a day, according to Bloomberg calculations based on data released Monday by the National Bureau of Statistics.

    Oil settles at 3-week low as OPEC and U.S. crude output grow - Oil fell sharply Monday, with concerns over rising crude output from OPEC members and U.S. shale-oil producers pushing prices to their lowest finish in three weeks.Losses for oil intensified after a report from the U.S. Energy Information Administration revealed expectations for a monthly rise in domestic shale-oil output.“U.S. production remains the single biggest headwind for the oil market right now, and until we begin to see signs that domestic output growth is fading, [West Texas Intermediate oil] will have a very hard time rallying through the $50 mark in the absence of an unrelated bullish catalyst,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.WTI crude oil for September delivery dropped $1.23, or 2.5%, to settle at $47.59 a barrel on the New York Mercantile Exchange. That was the lowest settlement July 24, according to FactSet data. Brent oil for October fell $1.37, or 2.6%, to $50.73 a barrel on ICE Futures Europe, with prices also settling at their lowest since late July.In a report Monday, the EIA said it expects to see a climb of 117,000 barrels a day in September to 6.149 million barrels a day The report has shown increases in shale-oil production every month so far this year. “This is not the report that [the Organization of the Petroleum Exporting Countries] wanted to see,” said James Williams, energy economist at WTRG Economics. “It is far more optimistic than the EIA’s Short-Term Energy Outlook, which only anticipated a 10,000 [barrel-per-day] increase in September lower-48 [states] onshore production.” Williams pointed out the regions covered in EIA’s Drilling Productivity Report Monday cover 85% of the onshore production in the lower 48 states.The report also showed that the number of drilled, but uncompleted wells, or DUC, climbed by 208 in July from June to 7,059.  “This is also bearish because the more DUC wells there are, the more capacity is ready to come online in the face of any sort of price rally,”

    The Oil Price Tug Of War - Oil prices started the week down from last week, with WTI dipping back below $48 per barrel. There is not a ton of direction for the market right now, with expectations of rising U.S shale weighing on the benchmark prices. “Shale is still rising strongly,” said Olivier Jakob, an oil analyst at Petromatrix, according to the WSJ. There are doubts over whether WTI can “move above $50, with the capacity how it is in the U.S.,” he said. He went on to add that trading was flat on Tuesday because “there is nothing really new.”. The EIA forecasts that U.S. shale production will grow by 117,000 bpd in September compared to August. The gains come from the Permian (+64,000 bpd), plus smaller contributions from the Niobrara (+15,000 bpd), the Eagle Ford (+14,000 bpd), the Bakken (+10,000 bpd) and the Anadarko (+12,000 bpd). For the Permian, it will rise to an overall output of 2.6 million barrels per day, a new record high. Hedging by shale companies has locked in future sales, providing certainty around $50 per barrel for them to ramp up production.   There are rumblings of unrest in Nigeria again, as protestors stormed a crude oil facility owned by Royal Dutch Shell last week, raising fears that Nigerian oil production could once against suffer disruptions. The facility feeds Shell’s Bonny export terminal.. Shell’s massive platform set sail from South Korea to Texas, moving the oil major one step closer to completing its giant Appomattox project in the U.S. Gulf of Mexico. The project was given the greenlight 2 years ago and is expected to come online before the end of the decade. Shell insists that it can breakeven with oil at $50 per barrel.   A new report from Dallas law firm Haynes & Boone finds that the number of oil and gas companies declaring bankruptcy has slowed to a crawl this year. Only 14 companies filed for Chapter 11 bankruptcy in the first half of 2017, down from 50 in the same period in 2016. The improvement is in part due to the rise of oil prices, but also because some of the weaker oil and gas companies were already pushed out of the market.  The FT reports on the strategic shift underway at Royal Dutch Shell (NYSE: RDS.A), which is moving to sell electricity to industrial consumers. The move highlights the potential for an oil major to adapt to a rapidly changing energy landscape. Beginning next year, Shell will sell electricity in the UK, but the company has said it would like to expand to the U.S.

    WTI Lifts Towards $48 After Biggest Crude Inventory Draw Since September -- WTI slipped back to almost a $46 handle today before bouncing modestly into the close ahead of tonight's API report, with all bullish eyes hoping last week's surprise gasoline build was a 'blip'. API reported a much larger than expected crude draw (biggest since Sept 2016)and while WTI rallied on the print, it was a very modest move (that for now failed to achieve $48) as we suspect the fact that gasoline saw another surprise build weighed on sentiment. API:

    • Crude -9.2mm (-472k exp) - biggest draw since Sept 2016
    • Cushing +1.7mm (+700k exp)
    • Gasoline +301k (-450k exp) - second weekly build in a row
    • Distillates -2.1mm (-250k exp)

    Last week's surprising gasoline inventory build was overwhelmed by a much larger than expected crude draw reported by API... and the same appears to have happened this week - big crude draw, modest gasoline build... Additionally, the DOE confirmed it will sell 14 million barrels of crude from the SPR later this month. WTI was hovering around $49 ahead of last week's API data and is hovering just above $47 into today's print... futures rose very modestly as the crude draw exuberance was offset by the gasoline build.

     Goodbye contango? Oil's long march toward backwardation: Kemp (Reuters) - “The rebalancing of the oil market desired by the leading producers has been a stubborn process,” the International Energy Agency wrote in its latest monthly oil market report. The agency’s evident frustration about the slow and uneven pace of rebalancing, and the conflicting signals about whether it is happening at all, is shared by many traders, analysts and investors. “The medium-term outlook for oil still looks challenging with, if anything, balances for 2018 having deteriorated in recent weeks,” hedge fund manager Andy Hall wrote to investors this month. The combination of a trendless market and the growing number of computer-driven trading programmes has made trading strategies based on supply and demand fundamentals increasingly difficult: “Investing in oil under current market conditions using an approach based primarily on fundamentals has therefore become increasingly challenging,” Hall wrote as he explained why he was shutting his main fund. The problem is immediately clear if the current price of oil is compared with prices a year ago. Front-month WTI futures are currently trading at $47.87 per barrel which is almost unchanged from $46.58 on Aug. 16, 2016. Brent prices too are almost back where they were a year ago. Front-month Brent is currently trading around $51.24 which is just $2 or 4 percent higher than on the same day last year. For all the meetings of OPEC and non-OPEC ministers, technical committees and monitoring groups held in the meantime, not to mention the flights and hotel bills, the oil price is right back where it started. Millions of words have been written in the analysis of a market that has gone basically nowhere overall, while sharp price reversals in a trendless market have repeatedly wrong-footed investors. Hedge funds now appear somewhat more confident that rebalancing is finally happening than they were this time last year, but the confidence is not universal, as illustrated by Hall’s pessimistic comments. Hedge funds have a total net long or bullish position in the main futures and options contracts for crude, gasoline and heating oil of 777 million barrels, up modestly from 516 million barrels in mid-August 2016. 

    WTI/RBOB Slide After Oil Production Surge Offsets Biggest Crude Draw Since Sept --Following last night's mixed mesage from API (crude draw, gasoline build), WTI prices have gone nowhere as all eyes focus on DOE data this morning. Confirming API's trend, crude saw its biggest draw since Sept 2016 but Gasoline, Distillates, and Cushing (most since March) saw builds which upset the machines and sent prices lower. Crude production rose once again to its highest since July 2015. DOE:

    • Crude -8.945mm (-3.38mm exp) - biggest draw since Sept 2016
    • Cushing +678k (+700k exp) - biggest build since March
    • Gasoline +22k (-450k exp)
    • Distillates +702k (-250k exp)

    Last week's surprise build in gasoline (confirmed by API) and big draw in crude (also confirmed by API overnight) remains the big focus and DOE data confirmed it with thebiggest crude draw since Sept 2016 but builds in products and at Cushing... While the builds in product were modest, they were nevertheless a surprise shift in trend from draws to builds...

    Oil Prices Rise On Hefty Crude Inventory Draw -- Another week, another draw – this seems to be the refrain this driving season, with the API and the EIA in sync with their weekly figures most of the time.This week has been no exception, with the EIA reporting a hefty draw in U.S. commercial oil inventories a day after the API surprised analysts by estimating inventories had declined by 9.2 million barrels.The authority calculated commercial inventories of crude oil had gone down by 8.9 million barrels in the week to August 11, after a draw of 6.5 million barrels a week earlier.API’s report lent some support to international prices on Tuesday amid a stronger U.S. dollar and concern about flagging demand in China. The EIA’s figures will most probably strengthen the positive effect despite the persistent glut.The EIA also said there was no change in gasoline inventories for the week to August 11, which might be a cause for worry, after last week it said inventories of the fuel had jumped up by 3.4 million barrels, which offset the positive news of the crude inventory draw.  Refinery runs averaged 17.6 million barrels last week, the authority said in its weekly report, versus 17.4 million bpd in the week before. Daily gasoline production fell to 10 million barrels, compared with 10.3 million bpd a week earlier.Whatever effect the EIA’s figures have on prices is bound to be short-lived as oil’s fundamentals remain largely unchanged, with rising U.S. shale output offsetting OPEC’s and its partners’ cuts that should together take off 1.8 million bpd from global supply. Oil demand prospects are not too rosy either, despite the IEA recently revising its 2017 demand growth outlook to 1.5 million bpd from 1.4 million bpd. Improving fuel efficiency and increased adoption of EVs in the U.S. will be largely responsible for the trend.

    Oil prices settle lower as U.S. output hits 2-year high -- Oil settled lower Wednesday after the Energy Information Administration report revealed a weekly climb in domestic production to the highest level in over two years. The government data also showed the largest weekly decline in U.S. crude supplies since September of last year and they have now fallen seven weeks in a row, but those figures failed to offer any lasting price support for oil during the session. September West Texas Intermediate crude shed 77 cents, or 1.6%, to settle at $46.78 a barrel on the New York Mercantile Exchange. The decline marked the third-consecutive loss for WTI, which stands at its lowest finish since July 24, according to FactSet data. October Brent crude on London’s ICE Futures fell 53 cents, or 1%, to $50.27 a barrel. Data from the Energy Information Administration on Wednesday showed a rise of 79,000 barrels a day in total crude-oil production to 9.502 million barrels a day last week. That was the highest output figure since mid-July 2015, according to EIA figures, based on weekly reports.U.S. production “increased at a pretty good clip,” and demand for gasoline and distillates was also down, said Tariq Zahir, a managing member at Tyche Capital Advisors.The EIA also said, however, that supplies of crude oil for the week ended Aug. 11 fell by 8.9 million barrels. That was more than double than the decline of 3.6 million barrels expected by analysts polled by S&P Global Platts, but below the 9.2 million-barrel decrease reported by the American Petroleum Institute late Tuesday.  “A combination of record refinery runs for the time of year and strong exports have encouraged the largest draw to crude inventories in eleven months,” said Matt Smith, director of commodity research at ClipperData.

    The Single Biggest Bullish Catalyst For Oil -- One of the key objectives for OPEC is to bring down inventories, a goal that has been elusive this year. But if the oil futures curve is anything to go by, the oil market is showing signs of tightening.Brent futures have recently begun to exhibit a state of backwardation, which is when near-term oil futures trade at a premium to contracts dated further off into the future. This is the first time in years that backwardation has occurred, and most analysts are taking it as a sign that the oil market finally could be getting closer to rebalancing. In the past, backwardations have accompanied a rebound in the oil market after a bust, while a contango (the opposite of backwardation) tends to occur when the market crashes because of a supply glut.There are several reasons why backwardation is bullish, which has been discussed in previous articles. A declining futures curve makes it uneconomical to store oil, so backwardation could accelerate the drawdown in inventories. It also complicates the hedging strategies of shale producers, which could hold back expansion plans. It also is a symptom of tightening near-term supplies, although, to be sure, the flip side of that argument is that it could merely be a reflection of expectations that the supply glut will reemerge at some point in the future.    Still, backwardation is occurring at a time when there are other bullish indicators starting to crop up. The U.S. has seen a sharp drawdown in inventories in recent months, down more than 60 million barrels since March. The IEA and OPEC both recently upgraded their oil demand estimates. "World economic growth has gained momentum," OPEC said. "With the ongoing growth momentum and an expected continued dynamic in second-half 2017, there is still some room to the upside." The view of Wall Street is also becoming more bullish. Hedge funds and other money managers have amassed a large number of long positions on recent weeks. For the week ending on August 8, investors stepped up their bullish bets on Brent by the equivalent of 58 million barrels, according to the FT, which was the largest weekly increase towards net length since December.

    OilPrice Intelligence Report: Oil Prices Boosted By String Of Bullish News - Oil prices fell significantly this week, although they regained some ground on Friday. Reports of weak Chinese demand deflated the market, but a rather bullish EIA report, a weaker U.S. dollar and a falling rig count provided a bit of a lift.  . The rapid decline of U.S. oil inventories in recent months suggests the market is tighter than everyone thinks. “Prices should be $10 higher given where the fundamentals are,” Amrita Sen, chief oil analyst at Energy Aspects, told the WSJ. She said that investors have been too worried about rising U.S. oil production. “The market is so obsessed with supply. If U.S. output is going up and stocks are drawing that is an extremely bullish development,” she said, arguing that rising demand is being overlooked.   Citi says that oil will be stuck within the range of $40 to $65 through 2022, although the bank said that this assumes “smooth sailing” for the oil market. In other words, some unforeseen shocks could temporarily push prices outside of that range. If disruptions are resolved, which restore supply to the market, prices could crash below $40, but outages could cause prices to jump above $70. But beyond that, prices will be range bound.. Blackstone is set to buy Harvest Fund Advisors LLC, an investment-management firm with more than $10 billion in assets under management, which will bring midstream energy assets under the private equity giant’s portfolio. The move seeks to profit off of rising natural gas production – the midstream assets benefit from fees, like tolls, so they would make money on the rising volume of gas moving around, regardless of the market price for that gas. Goldman Sachs lost $100 million in the past quarter after wagering that natural gas prices in the Marcellus Shale would rise. However, pipeline problems prevented that from happening, causing Goldman’s bet to sour.  The WSJ reported that natural gas and LNG traders around the world are increasingly using the Henry Hub benchmark, based in the U.S. Gulf Coast, for natural gas pricing. The growing importance of the benchmark is a reflection of the expansion of U.S. LNG exports, as well as the shifting nature of LNG markets. That is, with more supplies coming online from various sources, the LNG market is increasingly similar to that of crude oil, with the disparities in regional prices narrowing. . For the first time in years, the Brent futures curve has flipped into backwardation, a sign that the oil market is healing. Backwardation – when front month contracts trade at a premium to futures further out – will help drain inventories as it becomes uneconomical to put oil in storage. The backwardation is a significant development, which many analysts say is a sign that the oil market is progressing towards some sort of balance.

    Oil Prices Climb As Oil Rig Count Drops  -- The number of active oil and gas rigs in the United States fell this week by 3 rigs as drillers in the United States proceed more cautiously as oil prices fail to sustain any significant increase. Combined, the total oil and gas rig count in the US now stands at 946 rigs, up 455 rigs from the year prior, with oil rigs in the United States decreasing by 5 and gas rigs increasing by 1. Oil rigs in the United States now number 763—357 rigs above this time last year.Canada lost 6 oil rigs this week, with the number of gas rigs holding steady—for a total of 214 oil and gas rigs—93 above the year ago levels.Prices fell on Friday despite the Energy Information Administration’s Wednesday report that the United States’ crude oil inventory had fallen by 8.9 million barrels of inventory—after last week’s report of a 6.5-million-barrel decline. Thursday’s report that Saudi Arabia’s oil exports had hit a 33-month low—and that it had likely fallen further in July and would continue in August—had also failed to sustainably lift prices. Barrel prices for WTI is more than $1 lower on the week—for a second week in a row, and .17% down on the day, trading at $47.01 at 11:44am EST. Brent was trading down 0.43% at $51.25, with the spread reaching more than $4 between the two—almost a four-fold increase from a year ago.Related: Russia Claims To Have Invented Alternative To Fracking The rise in the number of active rigs in the US has slowed in recent weeks, with the 5-week average gain for US oil rig count falling into negative territory, compared to the previous 5-week average gain of 5 rigs. Despite the falling average weekly gain in active US oil rigs, US crude oil production continues to increase, with average production averaging 9.502 millionbarrels per day for the week ending August 11, according to the Energy Information Administration (EIA), who now expects US production to reach an average of 9.9 millionbarrels per day in 2018.

    Rig Count Drops Most In 7 Months As 'Traders' Panic-Buy Crude Futures -- The US oil rig count dropped 5 to 763 last week, the biggest drop in 7 months. However,crude production from the Lower 48 has surged (rising the most since June last week) to the highest since July 2015. Even with today's sheer farce panic-buying squeze higher in WTI crude, oil looks set for its 3rd weekly close lower as BNP notes the "whole supply surplus story is not likely to go away anytime soon."  *U.S. OIL RIG COUNT DOWN 5 TO 763 , BAKER HUGHES SAYS :BHGE US As we have noted previously, this inflection point in the rig count fits with the rollover in crude prices... While the rig count growth has stabilized, crude production continues to rise in the Lower 48 (though had dropped in Alaska for 3 straight weeks) but both saw a rise this week (total production up 79k) as Lower 48 production hit its highest since July 2015... Bloomberg notes that U.S. oil production from major shale plays is set to hit another record at 6.15 million barrels a day next month, according to the EIA. It's not just the Permian that's growing, as the agency sees higher output across the board. WTI Crude remains lower on the week despite the panic-buying... with no catalyst at all except bannon momentum ignition in USDJPY.  Some chatter on the crude curve - “Flat price is finally catching up with some of the signs we’ve seen that the physical market is tightening,” Clayton Rogers, an energy derivative broker at SCS Commodities, says.

    Oil Rig Count Slips by 5, Total Now Up 455 Year Over Year - In the week ended August 18, 2017, the number of rigs drilling for oil in the United States totaled 763, down by five compared with the prior week and up by 357 compared with a total of 406 a year ago. Including 182 other rigs drilling for natural gas and one listed as miscellaneous, there are a total of 946 working rigs in the country, down by three week over week and up by 455 year over year. The data come from the latest Baker Hughes North American Rotary Rig Count released on Friday.West Texas Intermediate (WTI) crude oil for September delivery settled at $47.09 a barrel, up 0.7% on Thursday. Crude prices were trading up about 2.8% Friday afternoon at around $48.40 and rose to around $48.45 after the rig count data were released.The natural gas rig count increased by one to a total of 182. The count for natural gas rigs is now up by 99 year over year. Natural gas for September delivery traded about 1.1% at around $2.90 per million BTUs before the count was released and remained essentially flat afterward.   Reuters energy industry analyst John Kemp notes that WTI futures for September delivery are priced at a discount of 77 cents a barrel compared to March 2018 futures contract. At the same time last year, September 2017 futures traded at a discount of nearly $3.50 to the March 2017 futures price.  Historically, the price spread between months is more closely related to the basic supply-demand situation than is the current price. The current swing in price spreads is, according to Kemp, “a strong signal that the market is rebalancing (or most traders believe it is rebalancing).”Among the states, North Dakota lost two rigs last week while Alaska, Louisiana and Oklahoma lost one each. One rig was added in New Mexico. In the Permian Basin of west Texas and southeastern New Mexico, the rig count now stands at 377, unchanged compared with the previous week’s count. The Eagle Ford Basin in south Texas has 75 rigs in operation, also unchanged week over week, and the Williston Basin (Bakken) in North Dakota and Montana now has 51 working rigs, down two for the week.

     Analysis: OPEC caught in limbo as options to change status quo limited - As OPEC and non-OPEC nations meet for another joint technical committee meeting on August 21, the oil producer group's options seem limited, leading to a preoccupation with ensuring compliance with output cuts and hoping that the strength of the oil markets lasts longer. This upcoming meeting in Vienna, following on from a similar meet-up in Abu Dhabi earlier this month in which Iraq, Kazakhstan, Malaysia and UAE were scrutinized, highlights OPEC's commitment to the pact but also the fact that its hands are somewhat tied. Analysts have said that this need for patience is a "fact of life" that the group and even the oil market will have to live with. OPEC production starts to climbThere also seems to be a consensus that if deeper cuts aren't invoked then the rebalancing could drag on much longer, placing even greater pressure to maintain conformity. But deeper cuts could compound the problem. "The conundrum OPEC and Russia face is as follows: more aggressive supply cuts may raise the oil price but will only invite more US shale production. Abandoning supply cuts will no doubt lead to a price correction into the $40/b [territory] and maybe lower," according to Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas. "This catch-22 situation may leave no other option than continue current supply policy and see where oil inventories end up by March 2018," he said. Saudi Arabian Oil Minister Khalid al-Falih recently said that the possibility of continued production cuts is still on the table and repeated the line that the door to an extension has not been closed, in a bid to keep the recent rebalancing narrative momentum.

    Exposing The OPEC Deal Saboteurs -- Oil prices have been under pressure again this week. With West Texas Intermediate yesterday falling 2 percent, to below $49 per barrel. And some surprising numbers this week show that slide is likely to continue. With the world’s largest oil-producing nations pumping out more crude than many energy observers are expecting. That’s OPEC. A group oil investors have been looking to as a saviour — expecting that production cuts from key nations like Saudi Arabia will help support global oil prices. But a survey released this week by Platts shows that OPEC output is far from declining. In fact, OPEC production in July hit its highest level for 2017 — coming in at 32.82 million barrels per day, up 330,000 b/d from June. There’s one big reason for OPEC’s surging production: Libya. A nation that saw its July production rise 180,000 barrel per day — as key oil fields across the country restart under ceasefire deals between the central government and local rebel factions. All told, Libya’s July production rose to just under 1 million barrels per day. A big jump from the 700,000 barrels per day the country was producing as recently as March.  The concerning thing for OPEC is that Libya is exempted from the recent agreement on production cuts — and thus free to ramp up output. Which has put OPEC as a whole well above its quota for total production, with July’s output being 920,000 b/d above the agreed-upon ceiling of 31.9 million barrels.  Libyan officials have said they want to increase production further. With the government targeting 1.25 million barrels by the end of this year.  At the same time, production from the U.S. is also rising. With the U.S. Energy Information Administration this week increasing its forecast for 2017 domestic output.  All of which suggests that OPEC’s much-lauded cuts are fading as a driver for higher crude prices. Watch for more numbers on Libya’s production to see if output could go higher from here — and for potential new action from the cartel to address the recent surge.  Here’s to living outside the law.

    Saudi Crude Exports Fall Just as Domestic Stockpiles Dwindle - Saudi Arabia, the world’s biggest crude exporter, shipped the least oil in almost three years in June, just as domestic stockpiles are dwindling. Exports fell to 6.9 million barrels a day, the lowest since September 2014, from 6.92 million in May, according to data Thursday on the Joint Organisations Data Initiative website. Domestic stockpiles stood at 256.6 million barrels, the lowest since January 2012, the data show.“You can assume exports will fall even further going forward because they can’t keep running down stockpiles,” said Amrita Sen, an analyst at Energy Aspects in London. “It is clear that the rebalancing process is in full swing, we are drawing down stockpiles everywhere.” Saudi Arabia’s Energy and Industry Minister Khalid Al-Falih last month promised even deeper cuts to crude exports for August, with shipments capped at 6.6 million barrels a day. The kingdom and Russia are leading the charge of major oil producers seeking to curb a global glut of crude by cutting output through the end of the first quarter of 2018. Benchmark Brent crude prices have dropped 11 percent since the cuts took effect on Jan. 1.

    Saudi Arabia's Budget Deficit Narrows as Crude Revenue Rises -- Saudi Arabia’s second-quarter budget gap narrowed to 46.5 billion riyals ($12.4 billion) after income from oil advanced. Total revenue climbed 6 percent in the second quarter to 163.9 billion riyals after income from crude jumped 28 percent, the finance ministry said in a statement. That helped narrow the deficit from 58.4 billion riyals in the same period last year, even though revenue from non-oil sources fell by 17 percent. Spending dropped 1.3 percent, to 210.4 billion riyals. “It’s really a story of stronger oil revenue and ongoing fiscal restraint,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “Much of the narrowing in the deficit seen in the first half of 2017 is due to higher oil revenue, versus in 2016.” Saudi Arabia is reporting quarterly budget figures for the first time this year in an effort to increase government transparency, part of Crown Prince Mohammed bin Salman’s “Vision 2030” plan for life after oil. He has promised to overhaul the Saudi economy by cutting energy subsidies, privatizing state entities and selling shares in state giant Saudi Arabian Oil Co., known as Aramco. Raising non-oil revenue through taxes and fees is central to that plan.The government said in December that it planned to spend a total of 890 billion riyals this year, with an expected end-of-year deficit of 198 billion riyals. The budget deficit for the first quarter was 26.2 billion riyals. The "quarterly update presents clear evidence of progress toward achieving fiscal balance by 2020,” Minister of Finance Mohammed Al-Jadaan said in the statement. “Whilst economic challenges remain, we are confident in achieving our fiscal deficit projections for 2017.”

    With a wary eye on Iran, Saudi and Iraqi leaders draw closer  (Reuters) - It was an unusual meeting: An Iraqi Shi'ite Muslim cleric openly hostile to the United States sat in a palace sipping juice at the invitation of the Crown Prince of Saudi Arabia, the Sunni kingdom that is Washington's main ally in the Middle East. For all the implausibility, the motivations for the July 30 gathering in Jeddah between Moqtada al-Sadr and Crown Prince Mohammed bin Salman run deep, and center on a shared interest in countering Iranian influence in Iraq. For Sadr, who has a large following among the poor in Baghdad and southern Iraqi cities, it was part of efforts to bolster his Arab and nationalist image ahead of elections where he faces Shi'ite rivals close to Iran. For the newly elevated heir to the throne of conservative Saudi Arabia, the meeting - and talks with Iraqi Prime Minister Haider al-Abadi in June - is an attempt to build alliances with Iraqi Shi'ite leaders in order to roll back Iranian influence. "Sadr's visit to Saudi Arabia is a bold shift of his policy to deliver a message to regional, influential Sunni states that not all Shi'ite groups carry the label 'Made in Iran'," said Baghdad-based analyst Ahmed Younis. This policy has assumed greater prominence now that Islamic State has been driven back in northern Iraq, giving politicians time to focus on domestic issues ahead of provincial council elections in September and a parliamentary vote next year. "This is both a tactical and strategic move by Sadr. He wants to play the Saudis off against the Iranians, shake down both sides for money and diplomatic cover," said Ali Khedery, who was a special assistant to five U.S. ambassadors in Iraq.

    Saudi Arabia ‘seeks Iraq’s help’ to mend ties with Iran   -- The government of Saudi Arabia has sought the help of Iraq's prime minister to mend relations between Riyadh and Tehran, according to news reports. Citing Qasim al-Araji, Iraq's interior minister, the Iraqi satellite channel Alghadeer reported that Mohammed bin Salman, the crown prince of Saudi Arabia, had asked Haider al-Abadi to lead the mediation with Iran. "During our visit to Saudi Arabia, they also asked us to do so, and we said that to [the] Iranian side. The Iranian side looked at this demand positively," Araji was quoted as saying by Alghadeer on Sunday. "After the victories that Iraq has achieved, it [Saudi Arabia] began looking to Iraq, at its true size and leading role. "The calm and stability and the return of relations between Iran and Saudi Arabia have positive repercussions on the region as a whole." Araji visited the Iranian capital, Tehran, on Saturday to discuss "several issues" with top Iranian officials, according to reports. He also visited Saudi Arabia in July.The Iranian news agency ISNA quoted Araji in Farsi as saying that Mohammed bin Salman wanted to "ease tensions" with Iran.Separately, Muqtada al-Sadr, the influential Iraqi Shia leader, announced on his website that he would be visiting the UAE on Sunday.In July, Sadr made a rare visit to Saudi Arabia, where he met Mohammed bin Salman and other officials.Sadr, an anti-American figure, commands a large following among the urban poor of Baghdad and the southern cities, including Saraya al-Salam, or Peace Brigades armed group.He is now seen as a nationalist who has repeatedly called for protests against corruption in the Iraqi government, and his supporters have staged huge protests in Baghdad calling for electoral reform.

    Saudis in talks over alliance to rebuild Iraq and ‘return it to the Arab fold’ - Iraq and Saudi Arabia are negotiating a new alliance that would give Riyadh a leading role in rebuilding Iraq’s war-torn towns and cities, while bolstering Baghdad’s credentials across the region. Meetings between senior officials on both sides over the past six months have focused on shepherding Iraq away from its powerful neighbour and Saudi Arabia’s long-time rival, Iran, whose influence over Iraqi affairs has grown sharply since the 2003 ousting of Saddam Hussein. Iraq and Saudi Arabia have long been considered opponents in the region, but a visit by the Iraqi Shia cleric Muqtada al-Sadr to Riyadh last week and a follow-up trip to the UAE further thawed relations which had already been much improved by high-profile visits between the two countries. The arrival in the Saudi capital of Sadr – a protagonist in the sectarian war that ravaged Iraq from 2004-08 and who has enduring ties to Iran – highlights a new level of engagement which could see Riyadh play a significant role in the reconstruction of the predominantly Sunni cities of Mosul, Fallujah, Ramadi and Tikrit. “This visit was an important step in ensuring that Iraq returns to the Arab fold and is supported in doing so by friendly partners,” said the former Saudi minister of state Saad al-Jabri. “This necessitates limiting Tehran’s continued attempts to dominate Iraq and spread sectarianism. Broader engagement between Riyadh and Baghdad will lead the way for enhanced regional support for Iraq, especially from the Gulf states. This is essential after the capture of Mosul from Isis and as Iraq looks towards national reconstruction.” 

    Cox: Qatar kerfuffle could tip Aramco to New York | Reuters: - Economic boycotts are usually designed to force dramatic change. They deprive enemies of income that can be used to finance armies, feed propaganda machines and sustain populations - with the hope of provoking the target's people to overthrow their leaders. Saudi Arabia, the UAE, Egypt and Bahrain have followed much of this playbook since early June in their ostracism of Qatar, which they accuse of financing terrorism. The four Arab neighbors have cut diplomatic ties and trade links with Doha, and suspended air and shipping routes with the gas-rich nation. They issued a 13-point ultimatum insisting, among other things, that it scale back ties with Iran and muzzle the Al-Jazeera cable network. Thus far, Western companies have not been overtly punished for maintaining their ties with Qatar. And U.S. companies will not be, according to a letter the quartet of nations sent to Secretary of State Rex Tillerson in July, Reuters reported over the weekend. One exception may be companies who count entities controlled by the Al Thani monarchy, primarily through Qatar's $300 billion-plus sovereign wealth fund, as important shareholders. If so, these regional grievances may alter the trajectory of one of the biggest deals in the history of global capital markets, the planned initial public offering sometime next year of the $2 trillion Saudi Aramco. The Qatar Investment Authority was founded in 2000 "for the purpose of investing Qatar's revenue surplus." It began aggressively acquiring big stakes in European and U.S. companies around the financial crisis. Among its largest holdings today are chunks of Volkswagen, Iberdrola, Barclays, Vinci, J Sainsbury, Tiffany & Co, and Credit Suisse, according to Reuters Eikon data. Two of those firms, Credit Suisse and Barclays, were particularly welcoming to the Qataris in 2008 when capital was scarce. The fund bought into the Swiss bank early that year and owns 4.2 percent today. It snaffled up Barclays stock when its own shareholders shunned a capital call in July 2008, giving it a stake of just under 6 percent at present. Those two investments are now worth $4.3 billion. 

    If you're wondering why Saudi Arabia and Israel have united against Al-Jazeera, here's the answer -  There are still honourable Israelis who demand a state for the Palestinians; there are well-educated Saudis who object to the crazed Wahabism upon which their kingdom is founded; there are millions of Americans, from sea to shining sea, who do not believe that Iran is their enemy nor Saudi Arabia their friend. But the problem today in both East and West is that our governments are not our friends. When Qatar’s Al Jazeera satellite channel has both the Saudis and the Israelis demanding its closure, it must be doing something right. To bring Saudi head-choppers and Israeli occupiers into alliance is, after all, something of an achievement. But don’t get too romantic about this. When the wealthiest Saudis fall ill, they have been known to fly into Tel Aviv on their private jets for treatment in Israel’s finest hospitals. And when Saudi and Israeli fighter-bombers take to the air, you can be sure they’re going to bomb Shiites – in Yemen or Syria respectively – rather than Sunnis. And when King Salman – or rather Saudi Arabia’s whizz-kid Crown Prince Mohammad – points the finger at Iran as the greatest threat to Gulf security, you can be sure that Bibi Netanyahu will be doing exactly and precisely the same thing, replacing “Gulf security”, of course, with “Israeli security”. But it’s an odd business when the Saudis set the pace of media suppression only to be supported by that beacon of freedom, democracy, human rights and liberty known in song and legend as Israel, or the State of Israel or, as Bibi and his cabinet chums would have it, the Jewish State of Israel. So let’s run briefly through the latest demonstration of Israeli tolerance towards the freedom of expression that all of us support, nurture, love, adore, regard as a cornerstone of our democracy, and so on, and so on, and so on. For this week, Ayoob Kara, the Israeli communications minister, revealed plans to take away the credentials of Al Jazeera’s Israeli-based journalists, close its Jerusalem bureau and take the station’s broadcasts from local cable and satellite providers.This, announced Ayoob Kara – an Israeli Druze (and thus an Arab Likud minister) who is a lifelong supporter of the colonisation by Jews of Israeli-occupied Arab land in the West Bank – would “bring a situation that channels based in Israel will report objectively”. In other words, threaten them. Bring them into line. 

    Yemen’s Cholera Epidemic Continues to Spread - Yemen’s cholera epidemic has now infected half a million people:The number of suspected cases of cholera resulting from an epidemic in war-torn Yemen has reached 500,000, the World Health Organization (WHO) says.At least 1,975 people have died since the waterborne disease began to spread rapidly at the end of April.The cholera epidemic in Yemen was already the worst on record three weeks ago when there were more than 360,000 infected, and the epidemic has spread to almost half again as many people since then. In just four months, Yemen has suffered from a larger cholera epidemic than Haiti did earlier this decade during an entire year. Like Yemen’s other overlapping humanitarian disasters, the cholera epidemic is man-made and was entirely preventable. The coalition war has devastated the country’s infrastructure and health care system, the blockade is depriving the country of basic food and medicine needed to stave off both starvation and preventable disease, and the “legitimate government” caused a collapse in public services in rebel-controlled areas with the decision to relocate the central bank. I’ll quote something here that I wrote at the start of this year:The Hadi government and its coalition and Western backers have inflicted all of this on the civilian population of Yemen for more than twenty-one months in the service of an atrocious war effort that has failed in all of its stated objectives.  Unfortunately, U.S. and coalition policies have not changed at all in the seven months since I wrote that, and conditions in Yemen have significantly worsened in the meantime.

     Leaked UN Report: Saudi Coalition Responsible For Mass Child Deaths In Yemen  --A leaked United Nations report finds that Saudi Arabia has massacred thousands of children in Yemen since the start of its air campaign in the impoverished country and now the Saudis are using their vast wealth and influence to suppress the document's findings in order to stay off of a UN blacklist identifying nations which violate child rights. On Wednesday Foreign Policy published a bombshell report, based on its possession of a leaked 41-page draft UN document, which found Saudi Arabia and its partner coalition allies in Yemen (among them the United States) of being guilty of horrific war crimes, including the bombing of dozens of schools, hospitals, and civilian infrastructure. Foreign Policy reports:“The killing and maiming of children remained the most prevalent violation” of children’s rights in Yemen, according to the 41-page draft report obtained by Foreign Policy.  Virginia Gamba, the U.N. chief’s special representative for children abused in war time, informed top U.N. officials Monday, that she intends to recommend the Saudi-led coalition be added to a list a countries and entities that kill and maim children, according to a well-placed source. The UN report further identifies that air attacks "were the cause of over half of all child casualties, with at least 349 children killed and 333 children injured” during a designated time period recently studied. While it is unclear what specific window of time the UN assessed for these figures, the AP (also in possession of the leaked document) reports further of the secret U.N. findings that, "the U.N. verified a total of 1,953 youngsters killed and injured in Yemen in 2015 — a six-fold increase compared with 2014" - with the majority of these deaths being the result of Saudi and coalition air power.  Also according to the AP:It said nearly three-quarters of attacks on schools and hospitals — 38 of 52 — were also carried out by the coalition. Meanwhile, Saudi Arabia is reportedly bringing immense pressure to bear against the UN and the commission responsible for the report, with the United States also working behind the scenes to mitigate the public embarrassment and fallout that is sure to come should Saudi Arabia receive formal censure in the U.N.’s upcoming annual report of Children and Armed Conflict. 

    War Crimes: Saudi Arabia Should Pay the Penalty for Catastrophe in Yemen - One year ago Saudi Arabia’s air force bombed the Sana’a International Airport in Yemen. This salvo came as part of a broad assault on Yemen’s capital, Sana’a, which the Saudis have been bombing since 2015. The Ansarullah movement, the umbrella group that is dominated by the Houthis, holds Sana’a. The day after the bombings, Saleh al-Samad, who heads the Political Council of the Ansarullah movement, said that the Saudi strikes would create a catastrophe. Sana’a International Airport provided an essential lifeline for the civilian population of northern Yemen. Food and medical supplies came through the airport. These would now be halted as a result of the strikes. A year later, 15 relief agencies joined together to condemn the destruction of the airport. ‘The official closure of Sana’a airport,’ they note, ‘effectively traps millions of Yemeni people and serves to prevent the free movement of commercial and humanitarian goods.’ Yemen’s Ministry of Health estimates that at least 10,000 Yemenis died from lack of access to the international medical treatment that they had sought. Each year, before the conflict, about 7,000 Yemenis traveled abroad annually for medical treatment. Many of them used Sana’a International Airport as their point of departure. They have now been trapped to die. The 15 relief agencies note that more people have died because they have been denied access to international medical care than those killed by the fighting. These numbers, they point out, represent the 'hidden victims of the conflict in Yemen.’   Wael Ibrahim of Care International pointed out that the road to the other airports are dangerous, with armed men at checkpoints and with Saudi aircraft liable to bomb civilians in their cars.  Yemen is at the brink of cholera and famine driven mass death. There is little Western media coverage of this atrocity. Dr. Homer Venters of Physicians for Human Rights said that Yemen is the frontline for the ‘weaponization of disease.’ War crimes abound.

    China extends ban on imports from North Korea in line with United Nations resolution | South China Morning Post: China announced sweeping sanctions against North Korea on Monday, extending an import ban to iron, iron ore and seafood. The Ministry of Commerce said the ban, which also covered coal, would take effect on Tuesday. The order extends the existing ban on coal imports to next year and is expected to hit the North Korean economy hard. The latest sanctions are open-ended and will stay in place as long as North Korea continues with its nuclear and missile programmes. But observers said it was not clear how effective it would be in curbing the reclusive state’s nuclear ambitions. The UN Security Council approved tough sanctions against Pyongyang on August 6 in response to North Korea’s two intercontinental ballistic missile tests last month. It came after China announced in February that it would ban coal imports from North Korea for the rest of this year, complying with an earlier UN resolution. As a result, China’s imports from North Korea fell 13 per cent to US$800 million in the first half. 

    China Bans Coal, Lead, Iron Imports From North Korea --China's Ministry of Commerce said that Beijing will halt imports of coal, iron, iron ore and seafood from North Korea starting on Tuesday, cutting an important economic lifeline for the Pyongyang regime, as it implemented a package of sanctions passed by the United Nations Security Council on August 6. China accounts for roughly 90% of North Korean trade but moved earlier in February to suspend North Korea’s coal imports until the end of the year. Coal normally accounts for about half of North Korea’s exports, but despite the coal ban, overall trade between the two countries remained healthy according to WaPo. Last month China announced that imports from North Korea fell to $880 million in the six months that ended in June, down 13% from a year earlier. Notably, China’s coal imports from North Korea dropped precipitously, with only 2.7 million tons being shipped in the first half of 2017, down 75 percent from 2016. But a 29 percent spike in Chinese exports to North Korea — North Korea bought $1.67 billion worth of Chinese products in the first six months of the year — helped push total trade between the two countries up 10 percent between January and June, compared with the same period last year. While the latest move to halt imports of iron, iron ore, lead and lead ore, and seafood products will put significantly more pressure on Pyongyang, it is unlikely to be enough to convince Pyongyang to abandon its nuclear program, which it sees as essential to its own survival, experts say. . Last weekend, the UN Security Council approved tough sanctions against Pyongyang with analysts estimating that the action could cost North Korea US$1 billion in foreign revenue a year. The sanctions were in response to North Korea’s two intercontinental ballistic missile tests last month, which Kim boasted could now strike any part of the United States.

    Without Oil, North Korea Sanctions Won’t Stop Kim  For North Korea’s fledgling economy, the latest round of sanctions will cut deep. The curbs on everything from lead and fish exports to shady North Korean companies coincide with a deadly drought that’s ruining crops, darkening an already dire humanitarian picture. An estimated 40 percent of the population is already under nourished and two-thirds are reliant on food aid, according to estimates by the United Nations Food and Agricultural Organization and the World Food Programme. Rajiv Biswas, Asia-Pacific chief economist at IHS Markit in Singapore, expects a "severe recession" this year as sanctions crimp the mining and manufacturing industries, which together make up 33 percent of North Korea’s output. But for all the humanitarian and economic pain, the new measures aren’t likely to deter Kim Jong Un from his ambition of developing an arsenal of nuclear-tipped missiles. That’s because Kim, who’s banking on military power to survive, has a web of illicit channels to skirt sanctions and the new curbs leave out the vital ingredient of oil. "North Korea’s dependency on Chinese fuel is China’s choke hold on Pyongyang," said Dennis Wilder, former senior director for Asia at the National Security Council during the George W. Bush administration. "If this goes, the North Korean air force can’t fly jets and their electricity system can’t function.".

    Drought raises danger of North Korean famine as US threatens nuclear war - As Trump threatens North Korea with “fire and fury like the world has never seen,” a drought is raising the danger of famine in the country. With North Korea dependent on food imports to survive, the UN Security Council compounded the danger of famine a week ago, adopting harsh sanctions to isolate its economy.Last month, the UN Food and Agricultural Organization (FAO) and the European Commission’s Joint Research Center issued a report warning that the drought severely damaged North Korea’s rice, maize, potato, and soybean crops. Production of early season crops including wheat, barley, and potatoes has fallen by one-third, from 450,000 to 300,000 tons. This threatens severe food shortages until October-November and the main harvest, which is itself already badly affected. “So far, seasonal rains in main cereal producing areas have been below the levels of 2001, when cereal production dropped to the unprecedented level of only two million tons, causing a sharp deterioration in food security conditions of a large part of the population,” said Vincent Martin, FAO representative in China and North Korea. “It has been reported that the North Korean government has recently cut the daily food ration for everyone,”  The FAO estimates Pyongyang will need to import 500,000 tons of cereals to stave off famine. By pressing for harsh sanctions as North Korea’s harvest collapses, Washington is signaling that it sees the threat of mass starvation, like the threat of nuclear war and trade war, as legitimate weapons in its desperate attempt to assert its fading global hegemony. This crisis also underlies the reckless threats of nuclear counter-strikes against the United States emanating from Pyongyang.

     China reaping rewards of Korea tensions - In all likelihood Beijing stage-managed the Korean crisis in order to wrongfoot the United States–and it appears to have succeeded.North Korea could not produce nuclear bombs or delivery systems without Chinese help. American media reported earlier this year that the South Korean navy recovered parts from a failed North Korean missile launch and determined that they were manufactured in China. American and Indian observers have long believed that China covertly supported North Korea’s nuclear program, just as it backed Pakistan’s nuclear program in the past.China, to be sure, dislikes Kim Jong-un, but he gives China an important bargaining chip. President Trump was scheduled to give a major policy speech on America’s trade relationship with China last Friday, and its content likely would have been very tough, including tariffs on steel and aluminum exports and a major initiative to suppress Chinese theft of intellectual property. Late Thursday night the speech was canceled without explanation.Asia Unhedged suspects that the White House stood down because it wanted China’s vote against North Korea at the United Nations Security council–which it got, along with Russia’s. That allowed the US President to claim a major diplomatic victory, as he did in his press conference Thursday afternoon. China can offer its good offices to rein in the seemingly irrational rulers of Pyongyang, while extracting concessions from the United States in return. Xi Jinping doesn’t want a war, of course. Neither does Kim Jong-un, whose objective is regime survival. By acting as China’s cat’s-paw, Kim has made himself all the more useful to Beijing. And by drawing out the US president into a war of words, he has elevated his international stature. After threatening military action against North Korea, President Trump has nowhere to go. Either he has to take military action (which he doesn’t want, and which his military advisers emphatically do not want), or he has to accept the diplomatic solutions which China and Russia have so generously offered to devise. That’s a win-win for Beijing and a lose-lose for Washington.

    China Steel Output Hits All Time High, Setting Stage For Escalating Trade War -- While the long-term consequences of Trump's first trade war salvo launched today will become obvious only in hindsight, it may have come at an opportune moment: just as China prepares to flood the world with record amounts of steel. Overnight, the National Statistics Bureau reported that even as Beijing intensified its war on smog, local steel output "paradoxically" hit a new monthly record in July, some 74.02 million tonnes, up 10% Y/Y (or 50% more than China's GDP) and higher than the previous record of 73.23 million tonnes set in June. For the first 7 months of the year, total production rose to a record 491.55 million tonnes, up 5.1% over the prior year period.  As Xu Bo, steel analyst at Haitong Futures observes, while Chinese steel output normally slows during the summer months, when building construction eases off due to the heat, this year the pattern has not held "due to Beijing's crackdown on low-end rebar and capacity cutbacks in the steel sector" which has prompted mills, spurred by rallying profits, to work with full capacity. "Steady demands from infrastructure also gave support to steel prices, which encourages mills to churn out more products," Xu said cited by Reuters.The Chinese commodity sector, boosted by a new wave of construction this time in Tier 2-4 cities, has been on fire in 2017 with the most-traded rebar futures contract gaining nearly 50% this year, peaking at 4,016 yuan ($603.15) a tonne last week before retreating modestly around 5%. However, the biggest impact will be on trade, and China's favorite pastime: dumping excess production in international markets. As Reuters correctly points out, "the data will likely fuel worries in the United States and Europe that China's efforts to cut excess capacity in bloated heavy industry are not leading to a drop in supplies, which foreign rivals say are flooding international markets." In the past, this has resulted in sharp tariffs imposed by the US on Chinese exporters, and this time won't be any different, only it will take place in the context of a belligerent trade standoff.

    China's debt boom could lead to financial crisis, IMF warns -- China’s economy is reliant on too much debt and the enormous boom in credit risks leading to a new financial crisis, the International Monetary Fund (IMF) has warned.GDP in the world’s second largest economy is set to grow by 6.7pc this year and 6.4pc next year, better than the 6.6pc and 6.2pc growth rates that the IMF forecast earlier this year.Stronger global growth has given China a lift, as has extra government spending.But in the years ahead, risks will grow as China’s extraordinary debt bubble keeps on building.Growth in China has been propped up by rapid increases in debt in recent years.“Nominal credit to the nonfinancial sector more than doubled in the last five years, and the total domestic nonfinancial credit-to-GDP ratio increased by 60 percentage points to about 230pc in 2016,” the IMF found.Those debts are expected to rise to almost 300pc of GDP in 2022.“Sustainable growth - growth that can been achieved without excessive credit expansion - was likely much lower than actual growth over the last five years,” the IMF’s analysts said. If credit was growing at a sustainable rate, GDP would have increased by an average of 5.3pc per year from 2012 to 2016, the IMF estimates, rather than the 7.3pc that it achieved. “International experience suggests that China’s current credit trajectory is dangerous with increasing risks of a disruptive adjustment and/or a marked growth slowdown,” the report said. Its analysts studied 43 large credit booms and found that almost every single one resulted in a sharp slowdown or a financial crisis. The extra debt in recent years has also been used poorly, the IMF believes, as the credit extended to industrial sectors, state-owned enterprises and in certain regions has not been matched by a rise in the value added by those borrowers, “suggesting that they are using credit relatively inefficiently”.

    Market Movers - Europe, Aug 14-18: Chinese galvanized steel hit by anti-dumping duty (video) In the European steel market, participants will be digesting the European Commission’s move to impose provisional anti-dumping duties on China over imports of corrosion-resistant coated steel. China is Europe’s largest steel supplier.Meanwhile, in petrochemicals, concerns persist about supply disruptions. Last week, prices of PET, the component used to make items such as plastic drinks bottles, surged by 10%. In European distillates, traders are seeing little incentive in buying to store as the market structure swings between contango and backwardation. Finally, in the natural gas market, Dutch grid operator Gasunie is set to decide this month on whether to expand the TTF market area in the Netherlands to include the BBL pipeline to the UK.

    Occupy activists Joshua Wong, Nathan Law and Alex Chow jailed for up to eight months - Three prominent pro-democracy student leaders who stormed government buildings in the run-up to the Occupy protests of 2014 were jailed for between six and eight months on Thursday, and therefore face a five-year ban from public office, as the government won its bid for harsher punishments.The prison terms replaced the community service orders initially meted out to Demosisto leaders Joshua Wong Chi-fung and Nathan Law Kwun-chung, as well as the suspended three-week jail sentence for former student union chief Alex Chow Yong-kang.Wong was sentenced to six months, Law to eight and Chow to seven. Those sentences mean all three will be disqualified from running for a Legislative Council seat for five years. Wong previously applied for a judicial review to lower the minimum age requirement so he could stand for Legco, and Law was booted from his Legco seat last month for taking his oath badly.Speaking at court before he heard the ruling, and clearly expecting to go to jail, Wong said he wanted to see a “hopeful Hong Kong when I am out [of prison] next year”, while Law declared he had no regrets about his activism. The beefed-up punishment marks the government’s second successful application this week to review community service orders for political activists, which prosecutors said were too lenient and sent the wrong message to young people.

    China and India on brink of armed conflict as hopes of resolution to border dispute fade | South China Morning Post: Chinese and Indian troops are readying themselves for a possible armed conflict in the event they fail in their efforts to achieve a peaceful resolution to their border dispute on the Doklam plateau in the Himalayas, observers said. On Friday, India’s defence minister Arun Jaitley told parliament that the country’s armed forces are “prepared to take on any eventuality” of the stand-off, Indian Express reported the same day. Sources close to the Chinese military, meanwhile, said that the People’s Liberation Army is increasingly aware of the possibility of war, but will aim to limit any conflict to the level of skirmishes, such as those contested by India and Pakistan in Kashmir. “The PLA will not seek to fight a ground war with Indian troops early on. Instead it will deploy aircraft and strategic missiles to paralyse Indian mountain divisions stationed in the Himalayas on the border with China,” a military insider told the South China Morning Post on condition of anonymity, adding that he believes Indian troops will probably hold out for “no more than a week”.

    Are China And India On The Brink Of War In The Himalayas?   - In a tense standoff between nuclear-armed nations that threatens to destabilize Asia, both sides are digging in, with one warning of unspecified “countermeasures” and the other saying it won’t be bullied.An editorial last week in China’s state-run Global Times tabloid warned that Beijing would use “all possible means” to get India to withdraw scores of troops from Dolam, a 34-square-mile bowl along the border that the two Asian giants share with the tiny mountain kingdom of Bhutan.India has refused, arguing that the land claimed by China actually belongs to Bhutan, with which India shares a close relationship.The face-off between Indian soldiers and Chinese border guards — positioned just a few hundred feet apart atop the 10,000-foot plateau — marks one of the most serious military confrontations since 1962, when the two countries fought a one-month war won by China that left more than 2,000 troops dead, most of them Indian.That conflict also began with a border dispute in the Himalayas — and there is more at stake this time around. China and India not only are the two most populous countries in the world, each with more than 1.3 billion people. They also are increasingly confident players in a battle for supremacy in southern Asia.

    China-India Conflict Is Far More Dangerous Than US-North Korea One -- While the international media remains concerned to the point of being fixated on the US-DPRK (North Korea) stand-off, in terms of sheer firepower, the much more pressing stand-off between China and India holds the potential to be far more destructive. While the best intelligence about North Korea’s weapons delivery capabilities indicates that North Korea is in possession of intermediate range ballistic missile systems which are incapable of hitting the US mainland, India’s intermediate range systems are not only more advanced but due to India’s proximity with China, these missiles could easily strike targets within China. Of course, China has a vastly more equipped army and nuclear capacity, but any war between China and India that would involve the use of intercontinental ballistic missiles would be a world-changing event. While many have focused on the possibility of a short land-based border war, similar to that which the two countries fought in 1962, due to the rapid advance of both the Chinese and Indian militaries in the decades since 1962, there is every possibility that such a war could escalate quickly. While little is actually known about Kim Jong-Un’s long term strategic thinking, India’s Prime Minister Narendra Modi’s modus operandi is all too clear. Modi’s political programme has resulted in economic stagnation, worsening relations with its two most important neighbours, China and Pakistan and increasing incidents of violence, discrimination and intimidation against India’s large Muslim minority.  If US leaders have been well known to provoke wars to get a poor domestic political performance or a scandal out of the headlines, one should not surmise that Modi will behave any differently.

    India and Pakistan at 70; Nawaz Sharif Rallies; Korea Crisis - How are India and Pakistan doing 70 years after independence? What are their successes and failures? What challenges do they face? What does future hold for them? Can Pakistani democracy evolve and grow to serve all of its people? How will Hindu Nationalist Modi's rise impact South Asia? Is India's secular democracy under threat? Could it lead to war? Is there a way to manage tensions between the two rivals? Will there ever be durable peace in South Asia?  Has deposed PM Nawaz Sharif really accepted the Supreme Court verdict disqualifying him? Should he really accept the verdict as Al Gore accepted Bush v Gore verdict after 2000 US presidential elections and go home quietly? What does Nawaz Sharif hope to achieve by his daily political rallies as he makes his way from Islamabad to Lahore in a long convoy of vehicles? Will his continuing public attacks on the judiciary undermine democracy in Pakistan?  What is at the root of the Korea crisis? Is it Kim Jong Un's fear of regime change if he agrees to denuclearize? What lessons have Kim and others learned from the way US first denuclearized Saddam and Gaddafi and then removed them that led to their deaths? Is President Donald Trump's fiery rhetoric making the crisis worse? Should Trump listen to the advice of US allies to cool it? Viewpoint From Overseas host Faraz Darvesh discusses these questions with Riaz Haq (

     Switzerland’s Biggest Political Party Threatens to Derail India’s Plan to Get Black Money Data -- The Swiss People’s Party has said that India and ten other countries are “too corrupt” and that it will get enough support in the country’s parliament to halt the Indo-Swiss tax information exchange process. Paris: Switzerland’s right-wing and biggest political party has said that “corrupt and authoritarian countries” should not be given access to tax data, in a move that could threaten the country’s automatic information exchange (AIE) treaty with India and ten other nations.In late 2016, India and Switzerland signed a data-sharing treaty that would have Swiss authorities collect bank data and send it to Indian tax authorities and vice versa. The automatic exchange of tax information was hailed in India as a victory for the Modi government and has been seen globally as an important step in fighting tax evasion and money laundering.Last week, however, the right-wing Swiss People’s Party (SVP) released a list of “corrupt countries” that includes India, Argentina, Brazil, China, Russia, Saudi Arabia, Indonesia, Colombia, Mexico, South Africa and the United Arab Emirates. “We do not want an automatic exchange of bank data with corrupt and unfree states,” said the SVP president, Albert Rösti. Also present at the same press conference was the party’s national councillor, Thomas Matter, who happens to be the owner of a private bank himself. The party claims sharing data with such countries would enable corrupt tax officials to misuse it to threaten and extort clients in collusion with mafia-like structures.

    Japan GDP Surges 4%, Most In Two Years, On Jump In Government Stimulus Spending --Japan's economy grew by 1% sequentially, and 4% on an annualized basis in Q2, smashing expectations of a 2.5% print and well above the upward revised 1.5% in the first quarter; it was also the the highest quarterly growth since a 5% print in Q2 2015, Japan's Cabinet Office reported, and the 6th consecutive quarter of expansion for recently embattled Prime Minister Shinzo Abe, who has plunged in the polls following a series of corruption scandals. The unexpectedly strong GDP print was driven by a 9.9% jump in private non-residential investment as well as an striking 21.9% annualized surge in public investment as some of the public works spending included in last year’s economic stimulus package starting to emerge; meanwhile exports declined. On a sequential basis, GDP rose 1.0%, above the 0.6% expected, up from the 0.4% in Q1 and the highest print in just over two years.

    BOJ could overtake ECB as world's largest central bank -- The Bank of Japan's balance sheet keeps swelling, with the central bank doggedly continuing to purchase large amounts of Japanese government bonds and other financial assets in a bid to meet its 2% inflation target. The buying spree contrasts sharply with moves by the BOJ's U.S. and European counterparts, which are looking to exit their easy-money policies. As of the end of June, the BOJ's balance sheet stood at 502 trillion yen ($4.58 trillion), almost matching the country's gross domestic product. It was the first time the figure exceeded the U.S. Federal Reserve's -- at $4.46 trillion -- since the Fed embarked on its quantitative easing push in 2008, and was close to the European Central Bank's 4.20 trillion euros ($4.96 trillion). The Fed may decide to reduce its balance sheet as early as September, while ECB President Mario Draghi has said the bank will discuss reducing its asset purchases in the fall. If the BOJ keeps buying JGBs at a pace of around 80 trillion yen a year, it could overtake the ECB as the world's largest central bank.The Japanese, U.S. and European central banks buy government bonds to prevent prices from falling. Large purchase of government bonds hold down interest rates, which can promote economic recovery and price increases. But now that prices are starting to climb in the U.S. and Europe, the Fed and the ECB are considering normalizing their monetary policies. In Japan, however, the inflation rate has been hovering at around 0%, which is why the BOJ has continued its monetary easing. The BOJ has already pushed back its target for achieving its 2% inflation target to around fiscal 2019, and plans to continue its asset-buying program until then. 

    Philippine police kill 32 in bloodiest night of Duterte’s war on drugs --Police in the Philippines have killed 32 people in a series of raids near Manila, in the bloodiest night yet of President Rodrigo Duterte’s war on drugs. Supt Romeo Caramat said 67 police operations in various parts of Bulacan, a province north of the capital, had left 32 “drug personalities” dead and more than 100 others in custody. “We have conducted ‘one-time, big-time’ operations in the past. So far, the number of casualties and deaths, this is the highest,” Caramat said at a news conference to publicise the raids. “We wanted to shock and awe these drug personalities,” he said. “Other drug personalities will think twice before continuing with their drug trade.” Human rights groups have repeatedly warned that Duterte, nicknamed “the Punisher” by his supporters for his approach to policing, may be overseeing crimes against humanity in his brutal anti-drugs campaign, which has left thousands dead. Duterte praised the operation in Bulacan, which took place from Monday night until Tuesday afternoon, and urged police to kill dozens of drug suspects every day. “The ones who died recently in Bulacan, 32, in a massive raid, that was good,” Duterte said in a speech to an anti-crime organisation that has backed the drugs war. “If we could kill another 32 every day, then maybe we can reduce what ails this country.” Bulacan has been a major target in the drugs war, with 425 people killed and 4,000 offenders arrested, according to Caramat, making it the second-biggest hotspot in the crackdown outside the Manila area. Duterte was elected president last year on a quick-fix, populist platform of wiping out crime and pledging to put drug pushers in funeral parlours, not prisons. He has said he is “happy to slaughter” millions of of drug users and dismissed the deaths of children as “collateral damage”.

    Hunger crisis hits Venezuela (Video) Shortages are becoming ever more severe in Venezuela. According to the World Health Organization, hospitals lack 95 percent of necessary medicines. Many people are undernourished and they receive no help from the government.

    "The Maduro Diet" - Venezuelans Suffer Drastic Weight Loss As Hunger Crisis Strikes --Shortages are becoming ever more severe in Venezuela. As Deutsche Welle reports, according to the World Health Organization, hospitals lack 95% of necessary medicines. Many people are undernourished and they receive no help from the government."An estimated 75% of Venezuelans lost at least 10 kilos last year because there is not enough food to go around... people here call it 'The Maduro Diet'... "When we say people are eating from the garbage, we are not joking, it's our reality... people don't have enough to eat."Furthermore, a lack of food and basic services is also creating an education crisis with more than 1 million children no longer attending school due to a lack of food, running water and/or electricity.About 30 percent of students who now stay home do not attend school because of water problems at home or on campus, 22 percent do not attend because of electricity blackouts and 15 percent do not attend due to school strikes, the survey found.About 10 percent said a lack of food at home or in school was the reason for their absence. The survey said those in that category are considered among the poorest who previously never skipped school because they did not have food at home.Of course, the failure of Venezuela's socialist utopia likely means that civil war is all but inevitable at some point in the future absent a quick doubling of crude prices...

    Current Account Deficits and Safe Assets -- The International Monetary Fund has issued its External Sector Report for 2017, and among its key findings: “Global current account imbalances were broadly unchanged in 2016…” The U.S. continues to record the largest deficit, $451.7 billion, which is equal in value to 2.4% of U.S. GDP. The continuing deficits contribute to the increase in the U.S. debtor status in its net international investment position (NIIP), currently valued at $8.1 trillion, which is equal to 42% of GDP. The Fund is concerned that these imbalances, as well as the persistent surpluses in Germany and other nations, “…raise the risk of disruptive corrections down the road, including due to diverging stock positions.” But as long as the dollar serves as the world’s reserve currency,  a U.S. current account deficit will be an inherent feature of the international financial system. The share of U.S.-dollar denominated liabilities in the foreign reserves of central banks continues to hold at over 60% of all reserves. Foreign central banks own about $4 trillion of U.S. Treasury debt, and foreign private residents another $2 trillion. Andreas Steiner of the University of Gronigen (see also here) has demonstrated that the reserve currency status of the dollars lowers the current account balance as foreigners exchange goods and services for U.S. securities. John Benedetto of the U.S. International Trade Commission has shown that the U.S. current account deficits of the last decade were largely financed by the purchases of foreign governments of U.S. government debt. The increases in foreign official holdings of Treasury securities have been partially offset in the capital accounts of many emerging market economies by private capital inflows. Laura Alfaro of Harvard et al (see also here) pointed that developing countries with high productivity growth have received equity inflows. The “uphill” capital flows in the opposite direction are due to the official purchases of Treasury debt by these countries’ central banks. These patterns are consistent with the “long debt, short equity” composition of many emerging markets (see here).

    World GDP in current US dollars seems to have peaked; this is a problem -- Gail Tverberg -- World GDP in current US dollars is in some sense the simplest world GDP calculation that a person might make. It is calculated by taking the GDP for each year for each country in the local currency (for example, yen) and converting these GDP amounts to US dollars using the then-current relativity between the local currency and the US dollar. To get a world total, all a person needs to do is add together the GDP amounts for all of the individual countries. There is no inflation adjustment, so comparing GDP growth amounts calculated on this basis gives an indication regarding how the world economy is growing, inclusive of inflation. Calculation of GDP on this basis is also inclusive of changes in relativities to the US dollar. What has been concerning for the last couple of years is that World GDP on this basis is no longer growing robustly. In fact, it may even have started shrinking, with 2014 being the peak year. Figure 1 shows world GDP on a current US dollar basis, in a chart produced by the World Bank. Since the concept of GDP in current US dollars is not a topic that most of us are very familiar with, this post, in part, is an exploration of how GDP and inflation calculations on this basis fit in with other concepts we are more familiar with.

    Prepare for negative interest rates in the next recession, says top economist  -- Negative interest rates will be needed in the next major recession or financial crisis, and central banks should do more to prepare the ground for such policies, according to leading economist Kenneth Rogoff.   Quantitative easing is not as effective a tonic as cutting rates to below zero, he believes. Central banks around the world turned to money creation in the credit crunch to stimulate the economy when interest rates were already at rock bottom. In a new paper published in the Journal of Economic Perspectives the professor of economics at Harvard ­University argues that central banks should start preparing now to find ways to cut rates to below zero so they are not caught out when the next ­recession strikes.   Traditionally economists have assumed that cutting rates into negative territory would risk pushing savers to take their money out of banks and stuff the cash – metaphorically or possibly literally – under their mattress. As electronic transfers become the standard way of paying for purchases, Mr Rogoff believes this is a diminishing risk.“It makes sense not to wait until the next financial crisis to develop plans and, in any event, it is time for economists to stop pretending that implementing effective negative rates is as difficult today as it seemed in Keynes’ time,” he said. “The growth of electronic payment systems and the increasing marginalisation of cash in legal transactions creates a much smoother path to negative rate policy today than even two decades ago.” Countries can scrap larger denomination notes to reduce the likelihood of cash being held in substantial quantities, he suggests. This is also a potentially practical idea because cash tends now to be used largely for only small transactions. aw enforcement officials may also back the idea to cut down on money laundering and tax evasion.

    Ilargi: Negative Interest Rates – Rogoff Cribs from Orwell and Kafka -- naked capitalism; Yves here. Even though Ilargi is duly alarmed about Harvard Ken Rogoff continuing to pump for negative interest rates, the op-ed flow suggests this idea is losing favor among Serious Economists. It appears that at least the Fed recognizes that the experiment with super low interest rates hasn’t worked out as they thought it would. The undue eagerness of the Fed to “normalize,” as in raise rates even though the state of the economy isn’t anywhere near zippy enough to justify tightening, shows that the central bank wants headroom to be able to lower interest rates in a crisis. The Fed may also have noticed that negative interest rates haven’t induced consumers to spend, but instead appear to be interpreted by both businesses and individuals as deflationary expectations. In deflation, you want to hold cash and cash equivalents and defer spending since most things will be cheaper later. How economists could have persuaded themselves that negative interest rates would spur spending is beyond me.The Fed may also have come to recognize that interest rate manipulation has asymmetrical effects: that it can choke off real economy activity but is lousy at stimulating it (the cliche is “pushing on a string”). And since the folks at the Fed don’t generally get out in the heartlands, they may not have recognized that preppers (who are not all extreme right wingers, but there are big overlaps between the two groups) love cash and gold and are paranoid about the Fed. They have guns. Trying to deprive them of their cash would not be a hazard-free exercise.

    Russia’s biggest war game in Europe since the cold war alarms NATO - SEPTEMBER will be an edgy time for NATO’s front-line member states. For a week in the middle of the month, Russia will be running what is being described as the biggest military exercise in Europe since the end of the cold war. The build-up is already under way. Zapad (“West”) exercises take place every four years and date from Soviet times, when they were used to test new weapons and tactics. Zapad 2017 is expected to involve at least 100,000 Russian troops. It will extend across the country’s Western Military District and Belarus, which has a border with three NATO members. By next week, most of the advance elements of the forces taking part in the exercise will have arrived. The rest, expected a fortnight later, will include the First Guards Tank Army, a famous unit from the second world war that was reformed in 2015. It packs a mighty offensive punch. Previous Zapads alarmed NATO because of their size and because of the kind of war game they have played out—one in 2009 included a simulated nuclear attack on Warsaw. But this year’s is the first to be held since Russia’s aggression against Ukraine. It unfolds against the backdrop of a relationship with the West more tense and adversarial than at any time in 30 years.Earlier this year, as part of its response to Russia’s annexation of Crimea and covert invasion of eastern Ukraine, NATO deployed four battalion-sized battle-groups to Poland, Estonia, Latvia and Lithuania. Essentially a tripwire consisting of only about 4,000 troops, these multinational units are meant to send a message to Moscow that if it tries anything against a NATO member in the east, it will quickly face the whole alliance. Last month an American-led NATO exercise called Sabre Guardian saw 25,000 troops from more than 20 countries carrying out drills across Hungary, Romania and Bulgaria. The idea was to practise territorial defence against a technologically sophisticated aggressor. Yet there are big differences between the way NATO conducts military exercises and the way Russia does. Zapad apart, since 2013 Russia’s president, Vladimir Putin, has ordered a series of no-notice “snap” exercises, often involving up to 50,000 troops and anti-Western scenarios. There is little doubt that Mr Putin sees these not just as a means of honing efficiency, but as a way to intimidate smaller neighbours and eventually draw them into a sphere of Russian influence.

    Denmark Offers Homes, Education To Jihadists In "Hug A Terrorist" Rehab Program There’s a very simple principle that helps form the bedrock of any prosperous and civilized society. When people do bad things, they should be punished for it. The moment that rule is turned upside down, and the wicked and weak are rewarded for their behavior, society will crumble. There’s no way around it. Every society that rewards bad behavior is on the fast track to destruction. You might think that would be obvious, but there are plenty of nations throughout history that have fallen under the weight of corruption, in one form or another. Our species has made this mistake countless times. We never learn, and we always pay for it. Next on the chopping block of history is Denmark, where the police in the city of Aarhus arenow essentially rewarding people who have been accused of being terrorists.Denmark’s second largest city is attempting to tackle terrorism by offering jihadists “empathy” in a programme dubbed “hug a terrorist.”  Whilst Danes who have fought against Islamic State have been threatened with jail on their return from Syria, terrorists are being offered enormous privileges, including apartments, education, and jobs, to encourage them to rejoin society. Proponents of the police-run scheme in Aarhus say that jihadists are “isolated” and struggling to integrate, and claim that offering them kindness and forgiveness will deter them from their murderous ideology.

    Spanish Bond Yields Plunge To Record Lows As 'Economy Improves' (Just Don't Tell The Nation's Youth) -- Spain’s two-year bond yields have collapsed to a record low -35bps this week andPortugal's followed suit, plunging near record low levels as Draghi's "whatever it takes" has benefitted all those front-running bondholders but left youth unemployment hovering still near record-high levels.  As a strong euro weighs on the region’s inflation outlook, it makes it harder for the European Central Bank to end quantitative easing and negative interest rates, said Peter Chatwell, head of European rates strategy at Mizuho International Plc in London, and sure enough today's reports that Draghi's Jackson Hole appearance will be a nothing burger has sparked more anticipation that QE isn't ending anytime soon, despite better-late-than-never complaints from the Germans. "Whatever it takes" to keep asset prices high!

    Barcelona and Cambrils attacks: 17 in critical condition as fourth arrest made – live updates -- Hours after van killed 13 people and injured 100 in Las Ramblas, seaside town of Cambrils hit by second vehicle attack, leaving one dead and six wounded.  Here is what we know about the related terrorist attacks that took place on Thursday and Friday:

    • A man drove a van into pedestrians in Las Ramblas, killing 13 people and injuring 100.
    • The first victim of the attack was named as an Italian father of two, Bruno Gulotta. He was on holiday with his partner and children, according to his workmates.
    • Spanish police are hunting Moussa Oukabir, the teenager who is suspected of being the driver of the van.
    • A minute’s silence was held in Barcelona’s main square, followed by several minutes of applause. Spain’s King Felipe and its prime minister, Mariano Rajoy, attended. A minute’s silence was also held at the EU buildings in Brussels.
    • A seven-year-old Australian boy, Julian Cadman, became separated from his mother, who is in a serious but stable condition in hospital.
    • Authorities say the subsequent attack in Cambrils is linked to the terrorist assault on Barcelona.
    • Two suspects arrested on Thursday are being held on suspicion of links to the Barcelona attack, but police say neither of them was the driver.
    • A second van that was believed to have been used as a getaway vehicle for the Barcelona attacker was found abandoned in Vic, 50 miles (80km) away.
    • Isis has claimed responsibility for the attack in Las Ramblas, but this could not be verified.
    • A second terrorist attack took place in Cambrils, a coastal town around 120km from Barcelona, in the early hours of Friday.
    • One person was killed and five bystanders and one police officer were injured – two seriously – when they were reported to have been deliberately hit by a car.
    • The attackers were wearing fake suicide vests, according to Catalan officials cited by El Pais.
    • The Audi A3 used in the Cambrils attack was removed by police. Its back window was smashed and it was upside down.
    • Police officers shot dead five suspects, some of whom were wearing what appeared to be explosive belts.
    • Javier Zaragoza, the head of the Audiencia Nacional, the court that deals with terror offences, said on Friday that those killed had no known links to jihadism.

    Macron’s Revolution Is Over Before It Started - Foreign Policy - On May 7, French voters chose Emmanuel Macron as their new president. His victory — soon followed by the legislative victory of his newly created “Republic on the Move” party, En Marche — seemed to promise a renewal, perhaps even a revolution of French politics, society, and economy. This, at least, was the message of Macron’s campaign book, aptly titled “Révolution,” in which he chided the French for “wanting change, without truly wanting it.” One hundred days later, the bloom is off the revolutionary rose. In fact, the polls reveal the petals are already falling. In July, according to the Institut français de l’opinion publiqe (IFOP), Macron’s approval rating shed 10 percentage points, falling from 64 percent to 54 percent. A more recent YouGov poll registers an even greater decline, from 43 percent to 36 percent. While every presidential honeymoon ends sooner or later, Macron’s has ended sooner and with greater thud than most. As Jérôme Fourquet, the director of IFOP, notes, Macron’s descent in the polls — the most dramatic in more than 20 years — is “unusual.” There is, he remarked, a growing “sentiment of suspicion” concerning the true nature of Macron’s promised revolution. And rightfully so. The source of Macron’s vaunted “democratic revolution” was civil society. The French, he declared, were fed up with the traditional parties on the left and right. Like his nemeses on the hard left and right, Jean-Luc Mélenchon and Marine Le Pen, Macron offered a kind of “dégagisme” — tossing out the bums. In his book, he blasted “the same faces and same men” who continued to apply “recipes from the previous century” to meet this century’s great challenges. By voting for his newly formed party, the voters would send professional politicians packing, their place taken by amateurs who represented the best and brightest of civil society. But since they took office, the Macronistas have aroused deepening doubts about the virtues of amateurism claimed on their behalf — and Macron’s own. During the short summer parliamentary session, stretching from June 27 to August 9, En Marche deputies made the headlines less for their accomplishments than their couacs, or missteps. Rapped on the knuckles for applauding too faintly during Macron’s opening address at Versailles, they applauded too frantically when Prime Minister Édouard Philippe spoke the following day. (Philippe was interrupted by clapping 55 times, once after citing the high failure rate of university students.) Some members arrived too late to cast votes, others arrived in time to (mistakenly) vote against their party’s own proposals. When their parliamentary leader, François de Rugy, was not busy dissing his own deputies, he was dissing a Communist member of parliament as chiant, or pain in the ass.

    Germany sends ECB to European Court - Germany’s constitutional court is challenging the European Central Bank’s effort to revive growth in the eurozone. Specifically, the court is questioning the bank’s €2.3 trillion asset purchase programme.“Significant reasons indicate that the ECB decisions governing the asset purchase programme violate the prohibition of monetary financing and exceed the monetary policy mandate of the European Central Bank, thus encroaching upon the competences of the Member States,” the court said.It said it would ask the European Court of Justice to review the programme, which is seen by some in Germany as a stealth bailout of indebted south European governments.As reported by the Reuters news agency, many Germans have been irked by the scheme, commonly known as quantitative easing, arguing that Germany taxpayers have to bear the risk for others.The ECB, however, was quick to defend it. “The extended asset purchase programme is in our opinion fully within our mandate,” it said in a statement. “That is ultimately for the European Court of Justice to assess. It said the €60bn per month asset buys would continue as normal.The European court has already backed the ECB’s more contentious emergency bond purchase scheme known as Outright Monetary Transactions or OMT with only relatively minor limitations, suggesting that the challenge – lodged by several academics and politicians – may face an uphill b attle.According to Reuters, the decision to pass the issue over to the ECJ means any final ruling will come either after the bond purchases end or near the end of the scheme, which has already been running for over two years and is expected to be wound down next year.

    Ireland refuses to collect commission's 13 billion tax bill from Apple | Euronews: German media is reporting that Ireland’s finance minister has rejected a demand from the European Commission for Dublin to retroactively collect 13 billion euros in back taxes from US tech giant Apple. The European Commission ruled last year that Apple paid so little tax on its Irish-based operations that it amounted to an illegal state subsidy. Finance Minister Paschal Donohoe said the tax rules from which Apple benefited had been available to all and not tailored for the U.S. technology giant. They did not violate European or Irish law, he added, insisting “We are not the global tax collector for everybody else."

    Hammond and Fox: We will leave customs union during Brexit transition - Britain will not remain in the customs union during the transitional period planned for immediately after it leaves the European Union, two leading cabinet ministers declared on Sunday. Liam Fox, the international trade secretary, and Philip Hammond, the chancellor, made the declaration in a joint article for the Sunday Telegraph intended to quash speculation that the cabinet is divided over how to implement Brexit and what will happen during the transitional period – or implementation phase, as ministers call it.The article shows that Fox has won at least one internal cabinet battle over Brexit because it says the UK will be “outside the customs union” during the transition and that it “will be a ‘third country’ not party to the EU treaties”.This means that the UK will be free to conclude trade deals with non-EU countries from the moment it leaves in March 2019, and that it will not have to wait until the transition is over, possibly three years later. Hammond said last month that “many things will look similar” during the period and there was speculation he was pushing for an arrangement that would in effect keep the UK in the customs union, and therefore unable to sign bilateral trade deals with non-EU countries, in the period immediately after Brexit.  Fox, who was alarmed at the prospect of heading an international trade department unable to strike trade deals, admitted in July that there was “still a discussion to be had” on that issue. Fox and Hammond are seen as the most pro-leave and pro-remain ministers in the cabinet and the Sunday Telegraph article shows that, on some issues relating to the transitional period, consensus has now been achieved. 

    Hammond accused of giving ground to pro-hard Brexit Tories -- Philip Hammond has been accused of ceding ground to cabinet Brexiters on Sunday after adding his signature to an article saying the UK would not remain in the customs union framework during the transitional period after Brexit. The chancellor clarified the government’s position in a statement jointly written with Liam Fox, the international trade secretary, saying that the UK would be “outside the customs union” during the post-Brexit transition phase and that at that point it would be “a ‘third country’, not party to the EU treaties”. This means that the UK will be free to conclude trade deals with non-EU countries from the moment it leaves in March 2019, and that it will not have to wait until the transition is over, possibly three years later. Hammond and Fox are seen as the two ministers at opposite ends of the soft-hard Brexit spectrum and their joint article, which also said the transitional period would be “time-limited”, was intended to quash speculation that the cabinet is divided on the issue. Hammond has spent the last few weeks arguing strongly for a lengthy Brexit transitional period, to the delight of pro-Europeans, and earlier this summer he hinted that he was considering an arrangement that would in effect keep the UK in the customs union, and therefore unable to sign bilateral trade deals with non-EU countries, for the period between Brexit and the final settlement coming into force. Fox, who was alarmed at the prospect of heading an international trade department unable to strike trade deals possibly for the rest of this parliament, admitted last month [paywall] that there was “still a discussion to be had” on this issue. But, in their article in the Sunday Telegraph, Fox and Hammond stated that this matter had been resolved.

    The British government plans for hard border with the Republic of Ireland -- The British government plans to introduce passport and customs controls with the Republic of Ireland after 2019.A leaked British government “position paper” seen by the Irish and British media suggests that the transport of goods and the movement people will be checked on the border after the UK leaves the European Union. The position paper is one of three that will be published this week. The new Prime Minister of Ireland, Leo Varadkar, has warned his British counterpart Theresa May to abandon hard Brexit plans. The Prime Minister of the Republic of Ireland has clearly stated he does not intend to work for a hard Brexit border.The UK has previously promised detailed proposals for a new customs arrangement with the Republic. However, the paper falls short of that promise, arguing that the nature of the border between the North of Ireland and the Republic cannot be addressed before the future trade relations between the EU and the UK has been determined. Therefore, the paper offers vague references to the use of technology to make the trade in goods appear seamless or “frictionless.” What is certain is that the North of Ireland and the Republic will not have a common market and/or customs’ regime.  In a joint letter to the Sunday Telegraph, Chancellor Philip Hammond and international trade secretary Liam Fox confirmed that the UK will leave both the customs union and the single market in March 2019, confirming the hard Brexit scenario. That means that Dublin and London could be soon colliding on the future of Northern Ireland, a clash underscored by the far-right Democratic Unionist Party lending their support to Theresa May’s government.

    David Miliband: we need a second vote on Brexit deal  --David Miliband has made a dramatic entry into the debate about Britain’s exit from the EU with an impassioned call for politicians from all parties to work together to avoid the Tory high command driving the country “off a cliff”. Labour’s former foreign secretary warned that Brexit is an “unparalleled act of economic self-harm” and suggested that it is up to MPs of all political colours to fight back against its worst consequences. The country’s future, he argued, should be decided by another vote on the terms of a final settlement – either by referendum or in parliament. In a scathing article in the Observer, Miliband wrote: “Delegating to May and Davis, never mind Johnson and Fox, the settlement of a workable alternative to EU membership is a delusion, not just an abdication.” He also heaped praise on the Tory chancellor, Philip Hammond, who is leading pressure inside the cabinet for a transition deal with the EU to soften the blow of a Brexit rupture. “I never thought I would say this, but Philip Hammond is also playing an important, even valiant, role. A transition of the kind he has advocated is vital.” The timing of the intervention by the former contender for the Labour leadership is significant. Febrile Westminster talk over the summer recess has triggered speculation about the creation of a new anti-Brexit party joined by heavyweights from all sides.But a more likely scenario is the emergence of cross-party consensus around a plan for the UK to remain part of the European Economic Area (EEA), at least for a transition period. This would provoke fury among leavers and civil war within the Tories.

    Britain says there will be no Brexit bill figure by October | Reuters (Reuters) - Britain will not have agreed a figure with the European Union for its so called Brexit divorce bill by October, Brexit Secretary David Davis said on Tuesday. The EU wants agreement on how the exit bill - to be paid in euros - will be calculated before talks can move on to Britain's future relationship with the bloc. "We're going to talk it through very, very carefully, so at this stage we're not going to commit, there won't be a number by October or November, whenever it is," Davis told BBC radio. Davis said any Brexit transition should be over by the date of the next British national election, due by May 2022, but was likely to last for about two years. "It's got to be done by the election. I would say the most likely is something like two years, maybe a bit shorter," Davis said. He did not give a definitive answer about whether the European Court of Justice be the arbiter during for an interim customs deal but said Britain would next week set out its proposals on post-Brexit international arbitration. 

    The smooth and orderly route to a new customs arrangement: A deal to benefit businesses on both sides of the Channel is vital - David Davis - Today marks the start of an intensification of our preparations for our exit from the EU. The government will publish a series of papers on the new deep and special partnership the UK wants to build with the EU.These papers set out key issues for the government’s approach to that partnership, developing the themes and framework we have already laid out. They draw on the engagement the government has sought from external parties with expertise on each policy area and are the result of the extensive work undertaken across government over the past year.This is an important next step in delivering on the result of last summer’s referendum and getting on with the task set to us by the British public.The first in this series of papers, published today, sets out the government’s intention to secure ambitious new customs arrangements with the EU.When we leave the EU, we will also leave the EU customs union. We will therefore need to put in place new customs arrangements. These must deliver on three clear objectives.First, they must facilitate the freest and most frictionless possible trade in goods between the UK and the EU.Second, they must ensure that the UK can develop a trade policy which enables us to build a stronger, fairer and m ore prosperous UK. One that is more outward-looking than ever before. As we leave the EU, the UK must get out into the world, forge its own path, and be a true beacon for free trade.Third, the new arrangements must ensure no return to the borders of the past between Ireland and Northern Ireland. We are also clear that this cannot mean any new customs borders being created inside the UK. The next paper in our series, published tomorrow, will set this out in more detail.

    The government’s customs union plan is an absolute dog’s breakfast - It's hard to know where to start with the customs union position paper. It is such a mess, such a full-spectrum catastrophe of ineptitude and wishful thinking, that it's honestly quite difficult to choose which bits of it to single out for criticism.On Sunday, Phillip Hammond and Liam Fox wrote a joint piece for the Sunday Telegraph agreeing that the UK would not stay in the customs union during transition. There is no particular reason to do this, except for the religious zeal of hard Brexiters. Staying in would allow British business to enjoy certainty and consistency as we left the EU and reduce the amount of work the UK government has to do before Brexit day. But regardless, that is not happening, so now we are full steam ahead to leave, even in the transition period. What would this transition period entail, if not customs union membership? Well, it seems to mostly involve customs union membership. There would be a "continued close association" for a "time limited period". This – there should really be a laughter track – "could involve a new and time-limited customs union between the UK and EU Customs Union, based on a shared external tariff and without customs processes and duties between the UK and the EU". In other words: a customs union. The British plan is to leave the customs union and then create a new customs union which does exactly the same thing as the one it just left. It is quite mad. But there is of course one reason, and one reason only, that this Alice in Wonderland nonsense is being countenanced. This imaginary new customs union would allow Britain to negotiate trade deals. Disgraced former defence secretary Liam Fox is upset that he is not legally allowed to do his new job as international trade secretary while we're in the customs union. So this is the solution. But even here the government does not appear to know what it is asking for. They admit the UK will not be able to implement any new trade deal, but are unclear about whether it would be able to sign them. Is it just going to talk to partners about them? Because if so, that is something it is already doing, as David Davis admitted this morning.

    Simon Coveney: ‘Ireland will not be a pawn in Brexit negotiations‘ -IRELAND WILL NOT be used as a pawn in any “bigger negotiations” between the UK and Europe, the Minister for Foreign Affairs, Simon Coveney, said today.“We will be realistic and fair but we will also be stubborn in relation to defending Ireland’s interests,” the minister told the media in Iveagh House in Dublin today.In a policy paper published today, London outlined its wish to have no hard border between Ireland and the North after the UK leaves the EU.The UK government has said it wants to maintain a “seamless and frictionless” border between the two countries. Currently people and goods are able to move freely between the Republic and Northern Ireland.The possibility of a hard border being introduced following Brexit has stoked concern for people living in the areas of both countries that would be most affected.According to the UK government, it will be pushing to avoid any physical border infrastructure and border posts for any purpose following Brexit. While welcoming the two UK Brexit position papers on customs, Northern Ireland and other Irish issues, Coveney said he is glad to see an acknowledgement by the British that technology will not work in controlling the post-Brexit border.

    The UK government’s border proposals for Ireland are absurd - The British government’s long-awaited position paper on the Irish border after Brexit is really rather lovely. It tells Irish people of all political persuasions exactly what they want to hear: that there will be no physical border of any kind across the island and that free movement will go on as if nothing had happened. But behind all of these delightful reassurances, there is sweet FA. The British government has a lot of seducing to do. By October, it has to have persuaded all the EU member states that “sufficient progress” has been made on the three big preliminary issues: the monetary divorce bill; the mutual rights of British citizens living in the EU and vice versa; and Ireland. To put this more bluntly, if the Irish government is not persuaded that Britain has a serious plan for the avoidance of a hard border on what will be its only land frontier with the European Union, the talks on a post-Brexit final status are going nowhere. This reality seems to have dawned at last – hence a position paper that could not be more emollient if it came dripping with honey. But to understand how this seems to the Irish government and to most people on the island, imagine you are in a decent job. It is reasonably paid, apparently secure and the working environment is quite amicable. Your neighbour, who you like but do not quite trust (there’s a bit of history there) comes to you with a proposition. She’s establishing an extremely risky start-up venture with a high probability of catastrophic failure. Will you join her? Well, you ask, what are the possible rewards? Ah, she says, if – against the odds – everything goes splendidly, you’ll get the same pay and conditions you have now. This is, in essence, what the British government is offering Ireland. If everything goes fantastically well, you’ll end up with, um, the status quo. Trade will “operate largely in the same way it does today”. The position paper is effectively a hymn to the way things are now. We don’t have a hard border, and we won’t after Brexit. We do have a common travel area that works remarkably well, and it will continue to go splendidly. The position paper takes existing realities and repositions them as a distant mirage, a fantastical possibility: less emerald isle, more Emerald City.

    Brexit: A View from the Other End of the Telescope -- naked capitalism.  Yves here. While the cultural and historical norms are important in understanding “Why Brexit?” let us not forget that this was a Conservative Party power ploy that was never supposed to succeed. But the deep seated attitudes do go a long way towards explaining the continued delusional thinking on behalf of just about everyone in the Government and too many people in the UK press, that many Brits can’t accept that the EU doesn’t need them that badly and is in a position to push them around.One big reason it did was the outlandish promises made by the Leave side, recapped here. The short version (and I wonder if UK readers will agree) is the power of the “red bus”: the persistent and false advertising that Brexit would result in £350 million a week in supposed EU dues saved being spent on the NHS. By Robin Wilson, the lead editor of the openSecurity section of openDemocracy. Originally published at openDemocracy

     Brexit threat to London’s reputation as legal services hub -- Brexit threatens to deal a hefty blow to the U.K.’s lucrative legal profession — and create huge uncertainty for courts across the rest of Europe.That’s if Brexit negotiators don’t secure a deal that ensures Britain remains in a decades-old system that allows civil and commercial court rulings in one EU country to be recognized and enforced in another.Currently, a law known as the Recast Brussels I Regulation ensures that rulings in one European country are automatically recognized by the courts of another. Without this provision, a judgment made by a U.K. court, no matter how legally coherent, would be unenforceable in another country.The law means that plaintiffs can expect legal consistency across the EU; its absence would have massive implications for the U.K. legal sector. London is currently the go-to destination for large international corporations looking to sue rivals in England’s well-respected courts. As a result, the legal profession has become one of the country’s most successful economic sectors, generating £30.9 billion in fees in 2015 and employing 314,000 people, according to a report published by the lobby group CityUK.  But despite its importance to the U.K. legal profession, it has so far barely featured in the public Brexit debate. “Too much time has been spent focusing on the European Court of Justice and too little on what sort of cooperation will take place between national courts after Brexit,”

    Theresa May under pressure to cut cost of university as public rejects high fees and huge debts | The Independent: Theresa May is being urged today to cut the soaring cost of going to university and stop students from being punished with debts of more than £50,000, a poll for The Independent reveals. Almost two-thirds of people want annual tuition fees – which could reach up to £9,250 this autumn at some institutions – to be slashed or scrapped. And the poll, by BMG Research, shows even stronger support for axing the interest charged on student loans, which will rise to an eye-watering 6.1 per cent next month. The results come just days before next week’s A-level results, when tens of thousands of young people will learn if they have achieved the marks to go to university, while worrying about the bills.The respected Institute for Fiscal Studies (IFS) has blamed “very high” interest rates as a key reason why three-quarters of those students will probably never pay off their loans in full.Debts are already the highest in the developed world and will reach £57,000 for graduates from the poorest backgrounds, after maintenance grants were axed and replaced with loans.Meanwhile, university vice-chancellors have been accused of using the income from sky-high fees to pay themselves fat-cat salaries, instead of on improving teaching.Now BMG Research has found that 65 per cent of the public want fees cut, with 34 per cent favouring a return to £3,000-a-year charges – the cost before 2012 – and 31 per cent wanting them axed altogether. No less than 68 per cent of people are calling for an end to interest on loans, which is set at the Retail Price Index (RPI) level of inflation plus 3 per cent, which means 6.1 per cent from this autumn.

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