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

Saturday, September 9, 2017

week ending Sept 9

 Can She Do It Again? – Tim Duy - In the fall of 2015, Federal Reserve Governor Lael Brainard began building the intellectual framework to slow the pace of rate increases. Not soon enough to stop the rate hike of December that year, but the rest of the Fed soon fell in line, and the projected four rate hikes in 2016 became only one actual hike, a hike delayed until December of 2016. Can she shift the focus of the FOMC again? She made a valiant effort today. But will her colleagues get on board as they did last time?   The US economy is in the midst of what could easily become a record breaking expansion. Labor markets have shown dramatic improvement in that time as steady job growth pushed the economy into the range of full employment. Moreover, the outlook remains bright: And, as Brainard notes, even if the anticipated fiscal stimulus has failed to materialize, the economy has been supported by a global upturn in growth as well. Sure, Hurricane Harvey may dent the short-term numbers, the medium term picture is solid.  But all is not well: In contrast, what is troubling is five straight years in which inflation fell short of our target despite a sharp improvement in resource utilization.  Brainard runs through the usual suspects offered as explanations for the inflation numbers - import prices, resource utilization, and transitory factors - and finds them all wanting. So what's going on? Brainard turns her attention to a fundamental element of the Fed's inflation model:...In many of the models economists use to analyze inflation, a key feature is "underlying," or trend, inflation, which is believed to anchor the rate of inflation over a fairly long horizon. Underlying inflation can be thought of as the slow-moving trend that exerts a strong pull on wage and price setting and is often viewed as related to some notion of longer-run inflation expectations.There is no single highly reliable measure of that underlying trend or the closely associated notion of longer-run inflation expectations. Nonetheless, a variety of measures suggest underlying trend inflation may currently be lower than it was before the crisis, contributing to the ongoing shortfall of inflation from our objective... This is a big deal. Brainard suggests that inflation expectations are not anchored at 2 percent. And they have not become unanchored to the upside as so many of her colleagues fear will happen if they do not act preemptively. Expectations are unanchored to the downside.

Brainard’s framing challenge - Tim Duy has the right response to Lael Brainard’s speech today: Despite the Fed governor’s persuasive attempt, she’ll find it harder to push the Fed in a more dovish direction than she did at the end of 2015, when the Fed was predicting four rates hikes in the next year but only made one.Two years ago, worries about the depressed prospects for the global economy complemented her argument. In addition to the expectation that the oil-price collapse would lead domestic inflation downward, Chinese instability and a dour outlook for Europe, among other macro trends, bolstered the case for the Fed to proceed cautiously.Since then, global growth has outperformed expectations, while the US labour market has continued adding jobs at a reasonable monthly pace, and the unemployment rate is now beneath the Fed’s estimate for the natural unemployment rate.Other signs from the US economy are mixed. Consumer spending and business investment have been healthy, while the auto and housing markets have lately signaled a mild slowdown. Domestic demand has been partially driven by a collapsing personal savings rate rather than impressive income gains.

Stanley Fischer, Fed’s No. 2 Official, Is Stepping Down – NYTimes — Stanley Fischer, the vice chairman of the Federal Reserve, said Wednesday that he would resign in mid-October, an unexpected decision that gives President Trump greater leverage over Fed policy.  Mr. Fischer, 73, cited “personal reasons” in a brief letter addressed to Mr. Trump. His four-year term was to have ended next June. The resignation puts immediate pressure on the Trump administration to replenish the Fed’s depleted board. Mr. Fischer’s departure would leave only three people in the seven board seats, the smallest number of governors in the Fed’s history. It also means that Mr. Trump can appoint a majority of the Fed’s board, bending the direction of its policy. Mr. Trump has repeatedly said that he wants the Fed to loosen some of the regulatory strictures it has imposed in response to the 2008 financial crisis. Mr. Fischer joined the Fed’s board in May 2014 after a distinguished career as an academic economist and an international policy maker. He sometimes argued that the Fed should be raising interest rates more quickly, sparring with Janet L. Yellen, the Fed chairwoman. But he provided reliable support for measures strengthening financial regulation.  In recent months he has joined Ms. Yellen in warning against weakening regulations that have been enacted since 2008. In an unusually frank interview with The Financial Times last month, Mr. Fischer described efforts to roll back those regulations as “dangerous and extremely shortsighted.”

Fischer's departure expedites Trump's overhaul of Fed leadership - — Federal Reserve Board Vice Chairman Stanley Fischer's surprise decision to resign in mid-October will enable President Trump to more rapidly reshape the Fed, paving the way for it to roll back post-crisis reforms.Fischer's departure will leave four vacancies on the seven-member Fed board. Trump's first Fed nominee, Randal Quarles as vice chairman of banking supervision, is expected to be approved by the Senate Banking Committee on Thursday, and he is likely to clear the full Senate soon thereafter. Once Trump's remaining three nominees are named and confirmed, his picks will represent a majority of the Fed board.That is likely to speed efforts to ease restrictions put in place after the Dodd-Frank Act, including the Volcker Rule, analysts said."That should bode well for advancing regulatory relief measures related to the Volcker Rule and capital requirements," wrote Jaret Seiberg, a policy analyst at Cowen Group. "We see the resignation as broadly positive for regional banks and mega banks."Consumer advocates expressed dismay at the departure of Fischer, who said in his resignation letter he was leaving for "personal reasons." His term as vice chairman was not due to expire until June 2018, and his term as governor lasts until 2020. "Gov. Fischer’s resignation dramatically alters the balance of federal bank regulation and imperils the safeguards erected following the financial crash of 2008," said Bartlett Naylor, financial policy advocate for Public Citizen. "Trump’s nominees can demolish the already fragile rules written to implement the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act."

Here’s How Trump Can Reshape the Fed -- Stanley Fischer’s surprise early exit from the Federal Reserve makes President Donald Trump’s biggest economic decision of the next few months even starker: whether to preserve continuity at the top of the nation’s central bank -- or not.  Chair Janet Yellen’s term expires in February, and her reappointment hasn’t been seen as likely. Fischer, the vice chairman, announced Wednesday he will leave the Fed in October. Both are former economics professors and longtime central bank officials. Trump also has two more governor vacancies to fill, after nominating Randal Quarles to lead the institution’s regulatory efforts. Presidents have mostly opted for insiders since businessman G. William Miller, appointed by Jimmy Carter, lasted less than two years as chairman in the late 1970s. Fischer and the previous two Fed vice chairs had all been central bankers before they took the post. Three of the past four chairs were central bankers, the exception being Alan Greenspan, who was a well-known private-sector economist. Previous presidents have gone for continuity in Fed appointments because it usually pays a big dividend: stable financial markets. If confidence in the Fed is lost, falling stock and bond prices can exert a massive penalty on White House popularity and the economy. Trump told the Wall Street Journal in July that Yellen is “absolutely” a possibility for reappointment because she is a “low-interest-rate person.” “Trump is obviously unpredictable. He has run his whole campaign and presidency as flying in the face of past practices,”  Leading the Federal Reserve is a tough job by design.. Turning the differing views of its 12 regional reserve bank presidents, and as many as seven governors at the Fed Board in Washington, into consensus and policy action requires both deft management and, at times, a large dose of single-minded conviction.  Yellen is Trump’s most obvious continuity choice. However, he has also mentioned that he is considering Gary Cohn -- his top White House economic adviser, and a former Goldman Sachs Group Inc. president -- for the job. In effect, Trump would have to make an exception to the pattern of his other appointments, where loyalty to the president and similarity of doctrine appear to be have been key tests.

Trump anger at Cohn raises doubts about his White House tenure: sources  (Reuters) - A newly fraying relationship between U.S. President Donald Trump and top White House economic adviser Gary Cohn has raised questions about how long Cohn will stay in his job, say two people with close ties to the White House. Several sources said Cohn, director of the National Economic Council, had long planned to stay in his post for at least a year. But one source said concern had grown among Cohn’s allies over the past 24 hours that he might be pressured to leave.  The recent concerns stem from a report in the Wall Street Journal – confirmed by other news media, including Reuters – that Cohn was unlikely to be nominated by Trump as a potential successor to Fed Chair Janet Yellen.  Trump had mentioned Cohn in July for the job. Cohn resigned as president of Goldman Sachs to join the new administration.  “The calculus has shifted for Gary. He’s gone, essentially, from untouchable to possibly being bounced out,” the source said. “The message is clear that suddenly Cohn’s job in the White House has real downside risk.”  Cohn crossed Trump last month when he criticized the president in a Financial Times interview for his response to the violence at a rally organized by white nationalists in Charlottesville, Virginia, in which one woman died.  One source close to the White House said Trump wanted to fire Cohn. “Hates him. But that could be ephemeral,” the source said.  Cohn, who is Jewish, told the newspaper the administration “must do better” in condemning neo-Nazis and white supremacists.

 Senate panel approves leadership picks for Fed, OCC -  — The Senate Banking Committee on Thursday approved the nominations of Randal Quarles for vice chairman of supervision at the Federal Reserve Board and Joseph Otting to run the Office of the Comptroller of the Currency. They will now be sent to the full Senate for confirmation. Quarles' nomination was approved by all of the Republicans on the committee and five Democrats, while Otting’s nomination was supported by only one Democrat, Heidi Heitkamp of North Dakota. The top Democrat on the panel, Sen. Sherrod Brown of Ohio, supported neither of them. “I do not think either nominee is the person we want in these important roles at our financial watchdogs,” Brown said. Quarles, a managing director at the private equity firm Cynosure Group and a Treasury undersecretary in the George W. Bush administration, is likely to have a smoother path to confirmation than Otting. The latter was an executive at OneWest Bank, which gained a reputation for foreclosing on homeowners.

Fed's Beige Book: "Modest to moderate"expansion, Labor markets "Tight" - Fed's Beige Book "This report was prepared at the Federal Reserve Bank of Chicago based on information collected on or before August 28, 2017. The information included in the District reports was primarily collected before Hurricane Harvey made landfall on the Gulf Coast. However, some Districts received preliminary information from business contacts regarding the impact of the storm, which is compiled in a special paragraph in the national summary. " Economic activity expanded at a modest to moderate pace across all twelve Federal Reserve Districts in July and August. Consumer spending increased in most Districts, with gains reported for nonauto retail sales and tourism, but mixed results for vehicle sales. Capital spending also increased in several Districts. Manufacturing activity expanded modestly on balance. That said, reports were mixed regarding auto production, and contacts in many Districts expressed concerns about a prolonged slowdown in the auto industry. Both residential and commercial construction increased slightly overall. Low inventories of homes for sale continued to weigh on residential real estate activity across the country, while commercial real estate activity increased slightly. Activity in the energy and natural resources sector was generally positive prior to shutdowns arising from Hurricane Harvey. Agricultural conditions were mixed overall, with drought conditions reported in multiple Districts. Business and consumer loan demand grew at a modest pace in most Districts, with a number of banks reporting rising competition from both other banks and non-bank lenders.  Employment growth slowed some on balance, ranging from a slight to a modest rate in most Districts. Labor markets were widely characterized as tight. There were reports of worker shortages in numerous industries, most notably in manufacturing and construction. Firms in the Atlanta, St. Louis, and Minneapolis Districts said that they had turned down business because they could not find the necessary workers. Many Districts indicated that businesses were having difficulty filling openings at all skill levels. In spite of the tight labor market, the majority of Districts reported limited wage pressures and modest to moderate wage growth. That said, there were reports from firms in the Dallas and San Francisco Districts that labor shortages were pushing up wages.

Hurricane Harvey’s Economic Impact - Michael Grunwald on Politico argues that Harvey was a disaster foretold and Washington made it worse. He cites a 1998 report by the National Wildlife Federation which argued the U.S. government’s flood insurance program was making catastrophes worse by encouraging Americans to build and rebuild in flood-prone areas. Created in 1968, the National Flood Insurance Program was supposed to help prevent risky development by demanding that new construction within designated 100-year floodplains to meet higher flood-proofing standards and by requiring “substantially damaged” properties that received claims worth half their value to be relocated or elevated. But Grunwald argues that most of the program’s 100-year flood maps are obsolete, relocation almost never happens, and the government has instead continued to cut multiple checks for repetitive losses, thus creating a bad incentive. An October 2016 Pew report also comes to similar conclusions. FT’s Alistair Gray reports preliminary estimates from Moody’s Analytics, according to which the storm will exact a toll of between about $50bn and $75bn (see Figure 3 below). The insurance industry is expected to avoid picking up much of the cost, as many householders lack cover for flooding (standard US home insurance policies exclude flood damage). As mentioned above, householders can get cover from the National Flood Insurance Program (NFIP), but only about one in six properties in the county in which Houston is located has the protection. Relatedly, FT’s Joe Rennison reports that storm Harvey has put up to $30bn of securitised commercial mortgages on the watch list of analysts and investors, as damage from the disaster has heightened the risk of defaults.  FT Alphaville has a good summary of early estimates for Harvey’s economic impact. J.P. Morgan’s insurance industry research team estimate that the physical damage will be in the $10-$20 billion range. The midpoint of the $10-$20 billion range is about 0.1%-pt of GDP. Total damage, and total rebuilding, should be greater than this amount, but they expect the overall impact on GDP in Q3 and Q4 to be quite small. Goldman Sachs argues that property losses will not be directly visible in most economic indicators, but major hurricanes in the past have been associated with a temporary slowdown in retail sales, construction spending, and industrial production, as well as a pickup in jobless claims. They estimate that Harvey has already shut down over 16.5% of US refining capacity, and that disruptions in the energy sector could directly reduce Q3 GDP growth by as much as 0.2pp. Deutsche Bank thinks that in the short-term, the most visible impacts will likely be to exports and industrial production, although some of the negative hit to growth will likely be offset by a boost to construction spending as rebuilding efforts get under way.

How Harvey And Irma Will Slam The US Economy: A Complete Walk Thru From BofA --Last week, before the full devastation from Hurricane Harvey was unveiled, Goldman and JPM were the first banks to suggest that the storm's impact on US GDP would be modest: a slight decline in Q3 growth,  offset by a similary modest rebound in Q4 and further as emergency funds "trickled down" through the economy. Now, with more clarity on just how destructive the storm has been, other banks are coming out and they are not nearly as confident that the damage from Harvey will be "modest" - in fact, according to a just released analysis from Bank of America, Harvey will result in at least a 0.4% hit to Q3 GDP, which has reduced BofA's Q3 GDP estimate to 2.5%.... and that excludes Irma. Here's Michelle Meyer explaining why in just a few weeks, all the economic misses will be blamed on, you guessed it, hurricanes. Hurricane Harvey crashed down on the shores of Texas, leaving behind record flooding and destruction. According to early estimates, Harvey may end up being the most expensive natural disaster in the US since 1980, costing $70-108bn (Table of the day). Thousands of people have been impacted. We are now actively monitoring Hurricane Irma, which threatens to hit the coast of Florida over the weekend. BofA attempts to provide a rough guide of how to quantify the impact on the economy, by exploring the following channels:

  • High frequency data: Harvey has already shown up in initial jobless claims contributing to a 62,000 jump in claims for the week ending 2 September. We also expect some impact in consumer confidence, consumption, construction, industrial production, and inventories.
  • GDP: Natural disasters tend to reallocate growth - serving as a drag in the quarter when the disaster hits and a boost in later periods from rebuilding efforts. We estimate that Harvey will end up slicing 0.4ppt from 3Q GDP tracking, bringing our forecast to 2.5%. Hurricane Irma threatens to drag growth down further. Rebuilding is historically a long process, implying upside risks to growth early next year.
  • Inflation: Energy prices have spiked, but pressures will likely ease. There are upside risks to auto prices given replacement demand.
  • Washington DC: The urgency to pass a bill to provide funds for hurricane relief facilitated a bipartisan compromise for a three-month continuing resolution and suspension in the debt limit.

Harvey - and then Irma - will complicate the interpretation of upcoming data releases. In the short term, the hurricanes serve as a drag, but ultimately history suggests the rebuilding efforts underpin growth. Unless this time is different of course. In any event, the Fed will be flying blind (in a hurricane so to speak) in a few days when it has to decide whether to hike rates further following the latest economic data.

Q3 GDP Forecasts --From Merrill Lynch: Hurricane Harvey may end up being the most expensive natural disaster in history. We expect to see the impact of Harvey in upcoming economic releases, including jobless claims, manufacturing and consumer-related data. Factoring in Harvey, we take down our 3Q GDP tracker by 0.4pp to 2.5%. Hurricane Irma may be an additional drag. From the Altanta Fed: GDPNow The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.0 percent on September 8, up from 2.9 percent on September 6. The forecast of the contribution of inventory investment to third-quarter real GDP growth increased from 0.87 percentage points to 0.94 percentage points after this morning's wholesale trade report from the U.S. Census Bureau. From the NY Fed Nowcasting Report The New York Fed Staff Nowcast stands at 2.1% for 2017:Q3 and 2.6% for 2017:Q4. CR Note: Looks like real GDP growth will probably be in the 2s in Q3.

Why the United States Is Falling Apart -- Hurricane Harvey is only the latest reminder that the US infrastructure is falling apart — a situation that become more urgent as the climate crisis bites harder. Here’s a data series that goes a long way to explaining why. In simple English, the public sector is barely investing enough to keep up with normal decay, let alone doing anything to improve things. The series is net civilian public investment from the national income accounts. (The source is table 5.2.5, here.) “Net” means after depreciation, aka wear and tear. Public investment means expenditures on long-lived assets like schools and roads. Prisons are in there too. If we took those out, the numbers would be slightly lower — though not profoundly so, because most of the costs of maintaining the carceral state come from day-to-day operations — 96%, according to this estimate — not from building new prisons. Of course, it’s hard to put exact dollar values on the decay of physical assets over time. Economic stats are always highly imperfect, even if they seem precise, carried out to several figures beyond the decimal point. But they’re the best we’ve got — and these are the numbers that American capitalism produces to understand itself, even if they don’t bother to pay much attention to what the numbers are saying. Here are the graphs — the first, net public (meaning by federal, state, and local government) as a percent of GDP since 1950. I started the graph in 1950, even though the figures begin in 1929, because the extreme values of the Great Depression and World War II years would distort the scale dramatically. The second presents the averages by decade. As the graphs show, net public investment is in a long downtrend and is now at near-record-low levels. The only years with lower levels were 1942–45, when the civilian economy was starved to fund the war effort.  Net civilian investment was 0.5% of GDP in 2016; preliminary numbers for 2017 suggest it hasn’t budged. It declined during the Great Recession and its aftermath, and is now less than half 2007’s 1.2%. The contrast with the Great Depression is stark. Net civilian public investment rose from 1.9% of GDP in 1929, the year of the crash, to 3.2% ten years later. For the full decade of the 1930s, it averaged 2.6% — the same as the 1960s, a time of dramatic expansion in the public sector. Since then, it’s been mostly downhill.

Swamp Fever -- Kunstler - Further proof, as if more were needed, that God is rather cross with the world’s number one exceptional nation: Hurricane Irma is tracking for a direct hit on Disney World. In the immortal words of the Talking Heads: This ain’t no party, this ain’t no disco, this ain’t no fooling around.  Houston is still soggy and punch-drunk, with a fantastic explosion of breeding mosquitoes, and otherwise it’s not even in the news anymore. This week, the cable networks had their scant crews of reporters scuttling around Florida, asking the people here and there about their feelings. “What’s gonna happen is gonna happen….” I think I heard that one about sixty times, and there’s actually no disputing the truth of it. For the moment, though (Friday morning), it’s a little hard to calculate the effect of a complete scrape-off, wash, and rinse of the state of Florida vis-à-vis the ongoing viability of the US economy. There’s going to be a big hole with dollars rushing into it and that will likely prompt the combined powers of the US Treasury, congress, and the Federal Reserve to materialize tens of billions of new dollars. Overnight the DXY plunged to a new low for the year. Am I the only observer wondering if Irma may be a fatal blow to the banking system? The mind reels at the insurance implications of what’s about to happen. Urgent obligations triggered by an event of this scale can’t possibly be serviced. Look for it to snap the chain of counterparty leverage that has been propping up the banks, insurers, and pension funds on mere promises for years on end. Finance, both private and public, has been feeding off unreality since well before the tremor of 2008. The destruction of Florida (and whatever else stands in the way up the line) will be as real as it gets. You’ve heard the old argument, I’m sure, that a natural disaster turns out to be a boon for the economy because so many people are employed fixing the damage. It’s not true, of course. Replacing things of value that have been destroyed with new things is just another version of the old Polish Blanket Gag: guy wants to make his blanket longer, so he cuts a foot off the top and sews it onto the bottom. The capital expended has to come from something and somewhere, and in this case it probably represents the much talked-about necessary infrastructure spending that is badly needed for bridges, roads, water and sewer systems, et cetera, in all the other parts of the USA that haven’t been hit by storms. Instead, these places and the things in them will quietly inch closer to criticality without drawing much notice.

Harvey Relief Efforts Top Busy Agenda as Congress Returns to Work - Congress returns to Washington on Tuesday after five weeks away. While the big item on the Republican agenda for the fall is their push for tax reform, they have a long list of must-pass pieces of legislation to tackle, including providing aide to Texas and Louisiana for Hurricane Harvey, which will be the first major thing the House will vote on Wednesday. And they have just 12 legislative days scheduled before a series of deadlines at the end of the fiscal year on Sept. 30, meaning much of the rest of their agenda is likely to be pushed back into November and December. The devastation caused by Hurricane Harvey has added an urgent issue to the already crowded calendar, one that Republicans hope might spur some much-needed congressional cooperation that could extend to more difficult pieces of legislation. The administration has asked for $7.85 billion for Harvey relief efforts, and Republicans predict that it could facilitate agreement on spending bills, the debt ceiling and other legislation traditionally opposed by Republicans to help those affected by the storm. Rep. Mark Walker, R-N.C., head of the conservative Republican Study Committee, said helping victims would likely soften opposition to government spending from Republicans to enable adequate relief. "To act like life goes on would be remiss and misleading on my part," Walker said of Harvey. "That's going to influence some of the decision-making." Here are the bigger and more immediate matters Congress will be tackling as it hits the ground running:

Trump Seeks $7.85 Billion for Harvey, Action on Debt Limit - President Donald Trump visited storm-ravaged Texas Saturday saying he hopes for a “quick process” getting Congress to approve almost $8 billion in initial Hurricane Harvey relief despite concerns that some Republicans will balk at suggestions it be tied to lifting the federal debt ceiling."We’re signing a lot of documents now to get money into your state,” Trump told reporters at the emergency shelter in the NRG Center in Houston, where he stopped by a lunch line for people displaced by the massive flooding. “We signed it and now it’s going through a very quick process.”  In a letter to House Speaker Paul Ryan requesting the storm aid, Budget Director Mick Mulvaney on Friday stopped short of explicitly asking for the aid to be tied to raising the debt ceiling. But the letter makes clear that the emergency spending will accelerate the timetable for raising the limit and conveys the idea that failure to pay obligations could imperil essential government services.The White House disaster aid request includes $7.4 billion for the Federal Emergency Management Agency and $450 million for the Small Business Administration. The request is intended primarily to cover funding demands through the end of the federal fiscal year on Sept. 30. The administration’s move will test the willingness of Republicans in Congress to link the two must-pass pieces of legislation. House GOP leaders plan to vote next week on Trump’s request in initial disaster relief funding but they don’t plan to include a U.S. debt-limit increase in the legislation, two GOP congressional aides said before Mulvaney’s letter was sent.

Trump Asks That $8 Billion Harvey "Down Payment" Be Added To Debt-Ceiling Bill --Shortly after President Trump backed away from his demand that $1.6 billion in funding for his border wall be included in a continuing-resolution bill to avert a government shutdown, the White House late Friday sent a request for $8 billion in emergency funding for the Hurricane Harvey cleanup effort, and asked that the money be tied to a bill to raise the US debt-ceiling limit. Trump’s request that the two legislative priorities be combined in one bill likely won’t go over well among Congressional Republicans, according to Bloomberg. Rep. Mark Meadows of North Carolina, the leader of the House Freedom Caucus and perhaps Trump’s most intransigent political adversary, urged lawmakers on Thursday not to bundle the two legislative priorities. In a tweet, Meadows said it’d be “inappropriate” and “would send the wrong message” to use Harvey funds as leverage to force conservatives to vote for a debt-ceiling increase. The aid money will be needed to shore up the nearly bankrupt FEMA’s finances before some 450,000 Texans file requests for aid. The rising toll of flood-related property damage is expected to quickly deplete the $10 billion left in the coffers of the National Flood Insurance Program.

Mnuchin: Debt-Limit Should Be Tied To Harvey Funding -- After warning earlier this week that the Hurricane Harvey cleanup effort would drain the government’s coffers more quickly than expected – meaning that Congress would need to pass a bill to raise the debt ceiling ASAP – Treasury Secretary Steve Mnuchin in an appearance on Fox News Sunday instead urged lawmakers to combine funding for Harvey relief with the debt-ceiling bill, arguing that appropriating the money would be “useless” unless he had the power to spend it. His remarks followed a formal request from the White House for $8 billion in Harvey relief funding, which Budget Director Mick Mulvaney said should be combined with a debt-ceiling bill.  When asked about the administration’s plans – including Trump’s decision to back off on his demand that $1.6 billion in border – Mnuchin refused to comment beyond saying that he agreed with the president.  “…the president and I believe that it should be tied to the Harvey funding. Our first priority is to make sure the state gets money, and to do that we need to make sure we can raise the debt limit. If Congress approves money but I can’t pay for it….we need to get that money to the state.”Mnuchin also called on lawmakers to put politics aside…“We need to put politics aside we need to make sure that we can get to Texas the amount of money needed to rebuild the state.”…before reiterating that the government could reach the debt limit before the end of the month.“Prior to Harvey I said we have enough money to go through end of Sept but with Harvey it’s moved the situation up earlier and without raising the debt limit I am not comfortable that we will get the money that we need this month to Texas to help them rebuild. We need to help the people in Texas. We need to get that done.”

GOP weighs moving debt ceiling-Harvey aid this week -  Congressional Republican leaders could raise the debt ceiling as early as this week, attaching the hard-to-swallow issue to a popular emergency spending package for the victims of Hurricane Harvey, sources say. Under the emerging strategy, the House would pass the disaster relief bill Wednesday, and the Senate would then attach a debt ceiling increase and send it back to the House for approval by the end of the week. No final decisions have been made. And an increasing number of Republicans are expressing reservations about combining the two bills. Complications could arise if as much as a single unhappy conservative in the Senate decides to slow the legislation, dragging the fight out into the weekend. And a senior Senate Democratic aide cautioned against the GOP relying on Democratic votes without seeing the details of the proposal, such as how long the debt ceiling would be lifted. In recent years, Democrats have shouldered the bulk of debt and spending votes and they have significant sway over negotiations. But Republicans leaders are concerned that preparations for Hurricane Irma, a second massive storm that could hit Florida in the coming days, could deplete FEMA’s emergency funds as soon as this week. Harvey’s destruction costs are already sucking up funding faster than leaders believed possible just a week ago — requiring quicker action on the debt limit. “We'll pass relief to make sure FEMA has enough money to get moving right now… But you're going to hit that debt ceiling regardless,” House Majority Leader Kevin McCarthy (R-Calif.) told Fox Business' Maria Bartiromo in a Tuesday morning interview. Treasury Secretary Steven “Mnuchin is telling us, ‘If you pass just a supplemental, they may not be able to put the money forward without having the debt ceiling raised.’” 

Key House Republican opposes tying Harvey relief to debt ceiling -- The chairman of a powerful group of conservative House Republicans has come out against his party's plan to use Hurricane Harvey funding to raise the debt ceiling. Mark Walker, who leads the Republican Study Committee, a group of 170-some House members, said: "Congress is united behind this effort, but I worry about jeopardizing an agreement with such legislative games. Our obligation is to assist those impacted by this great flood, but it's past time the swamp waters in DC begin receding as well... As we have stated for months, the debt ceiling should be paired with significant fiscal and structural reforms." Why this matters: Axios broke the news on Sunday that Republican leadership plans to pass a "clean" emergency Harvey aid package through the House, and then the Senate will attach a debt ceiling raise before sending it back. Walker's opposition signals that leadership could have big problems from conservatives when the bill returns to the House. 

Debt Ceiling Turmoil: 4Wk Bills Price At Highest Yield Since Sept 2008 On Technical Default Fears -- While traditionally few care about T-Bill auction results, which are usually a rather subdued affair, today was different: with today's $20 billion in 4-Week Bills maturing on October 5, or smack in the middle of the interval when the US is expected to run out of cash absent a debt ceiling deal, there was palpable turmoil in the Bills market, as the yield on the just concluded auction demonstrated. With the When Issued trading at 1.23%, the just priced auction printed at a high yield of 1.30%, the highest since September 2008, and indication that for all the talk of a reduction in government shutdown/debt ceiling crisis odds, the market will have none of it, as the ongoing "king" in the October bills demonstrates. The internals were mostly remarkable for the soaring yields, with other components coming roughly in line.:

  • High yield 1.300% vs prior six auction average 0.966%
  • Bid-to- cover 3.04 vs prior six auction average 3.07
  • Dealers awarded 58.5% vs previous six auction average 64.7%
  • Direct bidders awarded 16.9% vs prior six auction average 8.6%
  • Indirect bidders awarded 24.6% vs prior six auction average 26.6%

Putting the latest T-Bill "Kink" in perspective, the chart below shows just how high the Sept-Oct "hump" has blown out to following the auction.

Moody's: If the US defaults, it won't regain its top-notch debt rating -  Moody's Investors Service said on Tuesday it would strip the United States of its top-notch rating if a default such as a missed debt payment were to happen and it would not regain the Aaa-status even if the default were resolved."An upgrade back to Aaa would be unlikely while the institution of the debt ceiling, and the political environment that gave rise to the missed payment, remained in place," the rating agency's analysts wrote in a report published on Tuesday.

House To Vote On Harvey Aid Bill Wednesday, Senate To Combine With Debt Limit Extension - Appending to an earlier announcement by House Majority Leader Kevin McCarthy, according to whom the House would not add Harvey disaster funds to the debt ceiling bill, Dow Jones reports that Republican lawmakers are set to vote on the Harvey aid bill on Wednesday, and instead of raising the debt ceiling, they will suspend it, likely kicking the can until some time in December when the whole farce would have to repeat itself again, although the exact length of the extension remains under discussion.According to Bloomberg, the House still plans to pass a Harvey aid bill without debt language, leaving Senate to add it in. Keeping the House's hands clean, Senate Majority Whip (R. Tex) John Cornyn told reporters that debt limit raise, or rather extension, will likely to be tied to Harvey aid and approved by the Senate."It's imperative that we get that supplemental passed. And the leader has made the decision to attach the debt limit to that, and I support that," Cornyn, whose state was hit hard by the hurricane, told reporters.The reason to simply extend, instead of raise the debt limit, is because the former is considered a politically less difficult vote than raising it by a specific dollar figure, which would likely be well over $1 trillion; Such a move would also provide more predictability on the timing of next action and would come as House conservatives have warned against attaching the two issues. To be sure, with the Treasury rapidly running out of cash, and down to just $32 billion as of today's close, some sort of Federal debt extension would need to be taken to unlock the funding needed for the Texas recovery efforts.

House approves $8 billion in initial Hurricane Harvey relief (Reuters) - The U.S. House of Representatives on Wednesday approved roughly $8 billion in initial emergency aid for relief and rebuilding after Hurricane Harvey, which tore into Texas on Aug. 25. The House-passed measure, which provides $7.4 billion for the Federal Emergency Management Agency and $450 million for the Small Business Administration, will now go to the Senate. Barring unexpected setbacks, the aid measure is expected to be sent to the White House by the end of the week. After a White House meeting between President Donald Trump and congressional leaders from both parties, Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi announced that they had reached a deal to tie the Harvey aid to short-term measures to fund the government and raise the debt ceiling through Dec. 15. “Both sides have every intention of avoiding default in December and look forward to working together on the many issues before us,” Schumer and Pelosi said in a joint statement. Senate Majority Leader Mitch McConnell had favored linking the Harvey aid to a measure to raise the debt ceiling, or the federal government’s borrowing limit, through the 2018 midterm elections, aides said. But many conservative Republicans oppose tying Harvey aid to a debt ceiling measure without related reforms. Republicans at the White House meeting had pressed to raise the debt ceiling for a longer period of time but Trump sided with Democrats, who said earlier on Wednesday they would back a three-month extension, an individual briefed on the meeting said. If passed, the deal would avoid a shutdown of the U.S. government by using a three-month, short-term patch to fund the government at current levels through Dec. 15 while Congress works out a longer-term spending package for fiscal year 2018.

Trump shocks GOP by siding with Dems - President Trump shocked Republicans on Wednesday by making a deal with Democrats to prevent a government shutdown, raise the debt ceiling and provide aid to communities hit by Hurricane Harvey — right in front of his own party’s leaders at the White House. The surprise deal left Republicans in despair and Democrats expressing glee. “I just think it could be a much better deal than it is. And I think they need more time,” said Senate Finance Committee Chairman Orrin Hatch(R-Utah).  Senate Minority Leader Charles Schumer(D-N.Y.) characterized the deal as a “happy ending” that was for the “good of the nation.” Trump acted just hours after Speaker Paul Ryan (R-Wis.) described a similar deal offered by Democrats as “ridiculous” and accused them of playing politics with a national disaster. That offer tied a three-month debt limit hike to Harvey aid but left out government funding.Hours later, Trump signed off on a package that included all three items at a meeting attended by Schumer, Ryan, Senate Majority Leader Mitch McConnell (R-Ky.) and House Minority Leader Nancy Pelosi (D-Calif.). In the House, conservatives lamented that Trump’s deal with Democrats included no meaningful reforms to rein in spending and debt. Rep. Mark Meadows (R-N.C.), the House Freedom Caucus’s chairman, offered a bit of cover for the president.“I think there were no conservative solutions offered to the president in relationship to addressing the debt ceiling,” Meadows told reporters just off the House floor.But he also suggested that Trump’s deal would not lead to a better outcome for Republicans in December, when Congress will be confronted with new deadlines to raise the debt ceiling and keep the government open.

Trump’s Surprise Deal With Democrats Sets Up Christmas Showdown   -- President Donald Trump’s unexpected decision to spurn his Republican allies in Congress by striking a short-term debt-limit deal with Democrats leaves the GOP reeling and lawmakers bracing for a bruising battle in December.Trump’s move undercut GOP leaders in the House and Senate, as well as his own Treasury secretary, who had been arguing for a longer-term extension. It also left Republicans, who were blindsided by the deal, angry and disappointed with their own leaders and, to a lesser degree, Trump."Democrats got exactly what they wanted,” House Freedom Caucus head Mark Meadows said Wednesday, adding that the deal “gives them the greatest leverage in the world to get exactly what they want later." At a Bloomberg News breakfast Thursday, he said his caucus can’t stop the deal. During an Oval Office meeting Wednesday, Trump accepted a proposal by Senate Minority Leader Chuck Schumer and his House counterpart, Nancy Pelosi, to tie a three-month suspension of the debt limit to a Hurricane Harvey relief measure -- and throw in a stopgap continuing resolution to fund the government into December.  The episode provided the latest illustration of the bind Republicans find themselves in. Even though they control the White House and both chambers of Congress, they’ve been unable to set aside their own differences to get much done. Instead, this latest deal may have simply handed Democrats the upper hand heading into a confrontational end-of-the-year negotiation. House Speaker Paul Ryan, who was in the meeting with Trump, didn’t see it coming. Hours before Trump’s deal, he had told reporters that the Democratic proposal for a short-term debt limit deal would be “unworkable” and “ridiculous.”

Senate Passes Debt Ceiling/Govt Funding Deal: Here's What Happens Next - Moments ago the Senate, as expected, passed the debt ceiling, government funding, hurricane aid deal, cobbled between Trump and the Democrats, to howls of protest from the GOP. As a result, the debt limit will be suspended until December 8 and and fund govt through Dec. 8; it also provides $15.25b in disaster funding for hurricane assistance.  A vote in the House is expected tomorrow (or perhaps today), where the bill will also pass: it will be interesting which Republicans vote against the Trump/Democratic proposal.So what happens next?Well, for one thing, the next "X-Date", or tha day when the Treasury runs out of cash and uses up emergency measures, is not December 15 as some still erroneously believe (asexplained last night), but sometime in the first quarter, perhaps as far ahead as August, although according to a just released analysts by Goldman, the net debt limit increase will be due March, meaning the US has just bought itself another 6 months before this week's farce has to be repeated.Logistics aside, and these are explained below, the question for Democrats is whether the 6 month debt-extension interval falls inside the 6 month extension period on DACA before Congress has to vote on whether or not to keep Dreamers in the US, a political "quid-pro-quo" in exchange for not shutting down the government. Should the debt ceiling negotiation fall outside the DACA term, it would result in another violent breach between Trump and the Democrat leadership. Political maneuvering around DACA aside, what's next for capital markets? Here are the details from Goldman's chief political analyst Alec Phillips: With the text of the final version of the Senate amendment now posted, we estimate the next debt limit increase will be necessary by March, rather than between March and August as we noted earlier today.

Upbeat Trump raves to Schumer, Pelosi about news coverage of their deal -- Many Republicans were furious with President Donald Trump's budget deal Wednesday, stunned that the president quickly gave in to Democratic demands to pair hurricane relief with a three-month debt limit hike — though getting nothing in return. But in calls with Senate Minority Leader Chuck Schumer and House Minority Leader Nancy Pelosi Thursday morning, Trump raved about the positive news coverage it had received, according to people familiar with the calls, and he seemed very pleased with his decision. Trump specifically mentioned TV segments praising the deal and indicated he'd been watching in a call with Schumer, two people said. And he was jovial in a call with Pelosi and agreed to send a tweet she asked for about the Deferred Action for Childhood Arrivals program, these people said, while also mentioning the attention the deal had gotten. He indicated to both leaders he would be willing to work together again. "He seemed super upbeat," one person familiar with the calls said. Another person familiar with the calls said Trump told Pelosi her coverage was even better than his. “The press has been incredible,” Trump said. Pelosi herself bragged that she had gotten results after asking him to tweet reassurances that Dreamers shouldn't worry about being deported over the next six months while lawmakers try to secure a DACA fix. “I was telling my colleagues, ‘This is what I asked the president to do,' and boom boom boom, the tweet appeared," she said at a news conference Thursday. 

Ryan’s already-shaky status with GOP colleagues takes another hit - House Speaker Paul Ryan’s wobbly standing with staunch conservatives took a fresh hit Thursday, and while critical colleagues stopped short of demanding his ouster, they made it clear they were not content with his performance. Conservatives, optimistic and enthusiastic earlier this year over the prospect of a Republican president and GOP control of Congress for the first time in 10 years, have been instead frustrated with their party’s inability to win any major victories. They are fuming over the failure to repeal Obamacare, which barely passed the House but has been stalled in the Senate, or the delays in pushing tax reform.Wednesday brought an even bigger outrage: President Donald Trump cutting a budget and debt limit deal with Democrats — and then watching Democratic leaders spend the rest of the week loudly, proudly declaring victory. Frustrated Republican congressmen, led by Rep. Mark Meadows of North Carolina, are carefully but deliberately directing their ire at Republican leadership, not the president. But Meadows, the chairman of the conservative House Freedom Caucus, played down reports that he wanted to oust Ryan.“To extrapolate out that there’s some kind of leadership change or plan to address that is just not accurate,” Meadows said Thursday morning. “Nobody does policy better than Speaker Ryan, but we do have to transition to the place where it’s not just about vision-casting, but it’s about execution,” said Rep. Mark Walker, R-N.C., chairman of the conservative House Republican Study Committee. “I think with any coach, team, business or ministry, whatever it may be, I think the ones calling the shots have to bear some of the responsibility.”

House passes hurricane aid, debt ceiling extension, government funding - The House on Friday overwhelmingly backed the Senate's version of a bill raising the nation's borrowing limit for three months, funding the government and providing $15.3 billion in aid for victims of Hurricane Harvey. The final count was 316 to 90. The motion received unanimous support from Democrats and from more than 130 Republicans. Trump signed the bill late Friday afternoon, according to a tweet from the White House. Sanders tweet All negative votes were by GOP members, including the leaders of two conservative caucuses: Rep. Mark Walker, R-N.C., who chairs the Republican Study Committee, and Rep. Mark Meadows, R-N.C., who leads the even more conservative House Freedom Caucus. The bill that was ultimately agreed upon was not the one that the House leadership originally hoped to pass. At the start of the week, Republicans had intended to tie Harvey relief to a longer-term debt ceiling hike, which would have offered more stability to credit markets than a short term fix. But President Donald Trump upended those plans on Wednesday, when he agreed with Democratic Sen Chuck Schumer and Rep. Nancy Pelosi at a White House meeting to support a three-month extension of the debt limit, which will have to be renegotiated in December. Republicans across Capitol Hill were shocked at the president's decision, but most quickly came aboard, rather than buck their party's leader. On Thursday, Meadows' and Walker's groups expressed opposition to what was ridiculed by some as the "Trump-Schumer deal."

Trump signs $15 billion Harvey aid package after Republicans booed top White House officials - President Trump signed a bill Friday to deliver $15 billion in disaster aid and also extend government funding and the federal borrowing limit until Dec. 8, despite objections of Republican lawmakers who booed two top White House officials earlier in the day over the deal Trump struck with Democrats.The measure passed a morning House vote 316 to 90; every member opposed was a Republican.Yet even the House Republicans who supported the bill were frustrated that Trump bargained with Democrats on Wednesday for a short-limit debt increase, undercutting GOP congressional leaders and setting up a messy end-of-year negotiation. That frustration was taken out Friday morning on Treasury Secretary Steven Mnuchin and White House budget director Mick Mulvaney, who came to Capitol Hill to urge skeptical Republican lawmakers to back the measure.To many GOP members, the administration’s messengers were poorly chosen: Mnuchin is a New York financier known for his past as a Democratic fundraiser. Mulvaney is a former House conservative who spent much of his legislative career browbeating GOP leaders over the national debt and budget deficits.  House Speaker Paul D. Ryan (R-Wis.) said Congress thought they "had more time" to raise the debt limit, but disaster relief spending changed that calculation. (Reuters) “There were probably a lot of members in there in disbelief,” Rep. Ryan Costello (R-Pa.) said. “I do know that there is a lot of frustration with the deal that was cut by the president, and I think it’s a very difficult pill for many in there to swallow.” At several points, according to several members and aides, comments from Mnuchin and Mulvaney were met with groans, boos and hisses. Mnuchin, in particular, drew jeers after asking Republicans to support the measure for him personally rather than for the policy, then leaving the meeting early by explaining he had other pressing matters to attend to.

Trump Reportedly Wants To End The Debt Ceiling -- If you are wondering what is dragging the dollar down to 32-month lows, perhaps you should add this to the calculus...Politico reports that President Donald Trump suggested to congressional leaders on Wednesday morning that votes to raise the debt ceiling could be done away with altogether, according to three people familiar with the conversation.In a meeting with GOP and Democratic leaders, in which Trump sided with the Democrats on a fiscal deal to raise the debt ceiling, the president said he believes the votes are unproductive, those people said.With Congress set to lift the debt ceiling into December as part of the deal,Trump floated the idea that the next time Congress votes to raise the debt ceiling, it could be the last.He said conversations should happen over the next three months,according to people in the room.The Dems seem open to it... Schumer said such a move could not be accomplished now, but indicated he would talk to his caucus about considering structural changes to the debt limit in December, a conversation Trump supported. House Minority Leader Nancy Pelosi (D-Calif.) also appeared interested in the deal but was noncommittal. The debt ceiling is a key leverage point for members of the minority, particularly because it can be filibustered in the Senate and require 60 votes. We suspect Reps won't be so happy... Freedom Caucus legislators, angry about Wednesday's deal, promised a spirited fight in December over the debt ceiling. Conservatives are unhappy that the White House and congressional leaders have agreed to raise the debt ceiling without spending cuts. Translated: Trump suggests that there should be no constraint at all, not even the fiscally conservative pretense of the debt ceiling law, over how much debt the government can pile on the backs of future generations of Americans. If Obama can add $10 trillion, we are sure Trump can do "better."

 Trump Wants to Eliminate the Debt Ceiling. He’s Right. - Yesterday, President Trump infuriated fellow Republicans by agreeing to Democratic plans for a short-term debt-ceiling hike, rather than the longer-term one they favor. But something far more significant came out of the meeting: Trump and the Democratic leadership reportedly made a handshake agreement to abolish the debt ceiling altogether. During the Obama presidency, House Republicans used the threat to refuse to lift the debt ceiling as blackmail to force the president to give them unilateral policy concessions. The main Republican goal appears to be maintaining their ability to use this weapon against Democratic presidents while minimizing the threat it poses to Republican ones. Paul Ryan opposes the abolition of the debt ceiling because, he says, “there’s a legitimate role for the power of the purse of the Article 1 powers and that’s something we defend here in Congress.” This is utter bunk. The power of the purse has nothing to do with the debt ceiling. Congress votes to determine the federal budget — i.e., the power of the purse. The debt ceiling is a separate vote it must also take to authorize the debts already incurred; authorizing an increase in the debt ceiling does not cause more spending. The existence of the debt ceiling is simply an appendage; it opens the possibility of a cataclysmic accident in which Congress authorizes debt through its budget that it refuses to back through the debt ceiling. If Congress fails to lift the debt ceiling when needed, the Treasury literally would not be able to pay its debts, which would wreak economic havoc and permanently raise interest rates. The threat of such a cataclysm is what right-wingers have leveraged in the past.Ryan may believe that this threat is a more useful weapon for his party than the opposing party, since wielding it requires the credible reputation for being dangerous maniacs immune to facts and reason — a reputation the right wing of the Republican Party has earned over the years. But from the perspective of the country as a whole, there is no good reason to keep this unexploded ordnance lying around.

"Appeasement Will Not Work" Trump Responds To North Korea's 6th Nuclear Test -- Following remarks from the leaders of South Korea and Japan, President Donald Trump has responded to North Korea's latest nuclear test, emphasizing that South Korea's "talk of appeasement will not work," and that Kim Jong Un and his government "only understand one thing!" He added that the nuclear test is an China. In both tone and substance, Trump's response echoed his tweet from last week when he said that the US's policy of paying the North "extortion money" wasn't working, and that "talking is not the answer" to the North's nuclear threat. North Korea has conducted a major Nuclear Test. Their words and actions continue to be very hostile and dangerous to the United States...North Korea is a rogue nation which has become a great threat and embarrassment to China, which is trying to help but with little success.  South Korea is finding, as I have told them, that their talk of appeasement with North Korea will not work, they only understand one thing! — Donald J. Trump (@realDonaldTrump) September 3, 2017 Elsewhere, China's foreign ministry said that North Korea had conducted the nuclear test “with no regard to the general objections of the international community." It added that it "strongly condemns" the test and that China would be willing to work with the UN Security Council to pass even more restrictive sanctions.“The Chinese government resolutely opposes and strongly condemns this,” the ministry said in a statement.“China will work together with the international community to comprehensively and completely implement the relevant resolutions of the Security Council of the UN, unswervingly push forward the denuclearization of the peninsula, and unswervingly maintain the peace and stability of the peninsula,” it said. China's foreign ministry also once again called for the de-nuclearization of the Korean Peninsula.

A "Super-Powerful" EMP Attack: North Korea's Newest Weapon Against The U.S. -- The dynamics of the standoff between the US and North Korea have shifted dramatically in the past week. First, the North started with an unexpectedly sharp provocation - launching a missile over the Japanese island of Hokkaido - before following that up with its sixth nuclear test. Also, judging by the size the earthquake detected in the country’s mountainous North on Sunday morning, North Korea may have been telling the truth when it said it conducted what it described as its first hydrogen bomb test. And while the North bragged about the weapon’s “great destructive power” in a TV broadcast, what caught analysts’ attention was a mention of a different tactic: detonating  an H-bomb at high altitude to create an electromagnetic pulse that could knock out parts of the US electrical grid.  Here’s WSJ:“North Korea’s threats against the U.S. now include a tactic long discussed by some experts: an electromagnetic pulse, or EMP, triggered by a nuclear weapon that would aim to shut down the U.S. electricity grid.North Korea’s state news agency made a rare reference to the tactic in a Sunday morning release in which the country said it was able to load a hydrogen bomb onto a long-range missile. The bomb, North Korea said, ‘is a multifunctional thermonuclear nuke with great destructive power which can be detonated even at high altitudes for super-powerful EMP attack.’”Unlike a conventional nuke, an EMP blast - think Oceans' 11 - is not directly lethal, and serves mostly to knock out key infrastructure (useful when robbing a casino). However, it would probably lead to an unknown number of indirect deaths as hospitals and essential infrastructure lose power. “The idea of an EMP attack is to detonate a nuclear weapon tens or hundreds of miles above the earth with the aim of knocking out power in much of the U.S. In the worst possible scenario, regional power grids could be offline for months, potentially costing many deaths as people would eventually start running out of necessities like food and medicine. 

Mattis Warns U.S. Could Bring ‘Total Annihilation’ to North Korea: The Trump White House on Sunday quickly and aggressively escalated its tense standoff with North Korea, warning Kim Jong Un that the United States has the ability to enact “total annihilation” of the Hermit Kingdom. After huddling with President Donald Trump at the White House, Defense Secretary James Mattis emerged with a hawkish statement hours after the North conducted another nuclear test. Mattis, a retired Marine Corps four-star general, said Trump wanted to briefed on the “many military options” the Pentagon has to address the North Korea situation. “We made clear that we have the ability to defend ourselves and our allies, South Korea and Japan, from any attack,” Mattis said of the U.S. military. “And our commitment among the allies is ironclad: Any threat to the United States or its territories, including Guam, or our allies will be met with a massive military response, a response both effective and overwhelming. “Kim Jong Un should take heed of the United Nations Security Council’s unified voice — all members unanimously agreed on the threat North Korea poses and they remain unanimous on their commitment to the de-nuclearization of the Korean Peninsula,” he said, then concluding the prepared statement with what sounded like a threat of an armed conflict unless Kim changes his behavior in a major way. “Because we are not looking to the total annihilation of a country, namely North Korea,’ Mattis said, flanked by Joint Chiefs Chairman Gen. Joseph Dunford. “As I said, we have many options to do so.”Mattis and Dunford then turned and headed back into the West Wing, ignoring shouted questions about whether U.S. officials believe the North has a functional nuclear warhead and whether war is now inevitable. 

Why Kim Jong Un Isn’t Afraid of Donald Trump - Politico - Here are a few key lessons we have to assume Kim lives by based on what we have said and done over the last three decades:

  • First, America wants a deal. The United States says it is unacceptable for us to have a nuclear weapon, but they seem to be accepting it. We are still here. After we were caught having lied about nuclear material production in the early 1990s, Washington imposed some sanctions, but then they cut a deal. After we cheated on that deal, America imposed some sanctions but came back in 2005 and again tried to cut a deal. After we tested nuclear weapons in 2006, America imposed some more sanctions, but still offered to talk.  Our negotiating leverage goes up every day.
  • Second, America says our isolation is getting worse, but more and more money keeps coming in. China keeps buying coal, our workers keep going to Africa and Asia and sending money home, our arms sales in Africa and elsewhere are bringing in big money. Yes, sanctions may hurt us here and there, but we are in much better shape than we were just a decade ago. So why stop now?
  • Third, America talks about military options, but they are not going to start a war with us. Not on purpose anyway. If they did not attack us when we didn’t have nuclear weapons and missile that could reach them, they are not going to do it now. The world’s largest economy is not going to risk it all to destroy little ol’ us. And South Koreans are rich. They won’t let the U.S. attack if it means their destruction.
  • Fourth, America is losing ground in the region. They can talk about a pivot to Asia all they want, but as time goes on, China gets stronger and South Korea and Japan are going to have to decide which side they are on. China is not going anywhere, and neither are we. Even if the long-term trend takes decades, we have time. China has made clear our collapse is a bigger concern than our provocations. We are only getting stronger as America loses ground to China and their alliances show more and more stress. If we can help that process along, so much the better.
  • Lastly, if we give up our nuclear weapons we have nothing left. America cut a deal with Muammar al-Qaddafi to give up his weapons, and look at Libya now. Iraq’s Saddam Hussein actually stopped developing weapons, and they regime-changed him. With nuclear weapons, I control my destiny. Without them, I am toast.

North Korea: How Obama Regime Change Policy Created the Crisis Trump Has Inherited - As the crisis unfolded, the Rand Corporation, a military-intelligence think tank founded during the Cold War, relentlessly promoted the views of Bruce W. Bennett, a defense researcher it calls “one of the leading experts on the world’s most reclusive country.” Two or three times a day, Rand’s media shop tweets out links to Bennett’s writings on Kim Jong-un, the 33-year-old who rules the Democratic Peoples’ Republic of Korea (DPRK), its formal and preferred name. Bennett’s basic theme is that North Korea is teetering on collapse and internal unrest because the military and technocratic elite who run the country have given up on Kim and his dynastic family. It’s a theory that’s been around for decades, but has picked up steam in reaction to Kim’s recent purges, including possibly his own brother and a string of high-level defections that includes Thae Yong-ho, the erudite former North Korea ambassador to London.  Bennett lays out his plan for overthrowing the North Korean government by saturating the country with leaflets and propaganda and providing assurances to potential plotters in the North that they would have a place within a new, unified Korea—but only under South Korean and U.S. control. The U.S., he warned in a recent speech on Capitol Hill that I attended, must deliver Kim a simple message: “We know the only thing you care about is your regime’s survival. Either denuclearize or we will take actions politically to destabilize your regime.” His talk was a basic primer for this “uprising” from within, which is exactly what the Bush administration sought in Iraq when it invaded in 2003.  The plan, Bennett said, might begin with the U.S. Air Force dropping leaflets on North Korean missile bases that invite North Korean soldiers to defect. “If there were one or two, that would be a political loss of face.” K-Pop, the South Korean musical genre that’s popular around the world, could be another weapon: “It’s acidic as far the regime is concerned.” And commercials about South Korean life planted in DVDs smuggled into the North “would be terrible for Kim Jong-un.” The purpose of the operation, he said, is to convince the people of the DPRK that their “paranoid” leader is not a “god,” and to plant the idea that his country is unstable: “If that’s in his mind, it will affect his behavior.” In short, a psy-op.

Trump Tweets About Weapon Sales After South Korea Suggests Bringing Back US Tactical Nukes -- As part of South Korea’s response to the latest escalations out of its northern neighbor, the country's defense minister on Monday said it was "worth reviewing the redeployment of American tactical nuclear weapons to the Korean Peninsula" to guard against the North, a step that analysts warn would sharply increase the risk of an accidental conflict. On Monday, South Korean Defense Minister Song Young-moo said that he asked his American counterpart, Jim Mattis, during talks at the Pentagon last week that strategic assets such as  U.S. aircraft carriers, nuclear submarines and B-52 bombers be sent to South Korea more regularly. “I told him that it would be good for strategic assets to be sent regularly to the Korean Peninsula and that some South Korean lawmakers and media are strongly pushing for tactical nuclear weapons [to be redeployed],” Song told a parliamentary hearing on North Korea’s nuclear test, without disclosing Mattis’s response. Addressing this, and other issues, President Trump and his South Korean counterpart, Moon Jae-in, spoke on the phone for 40 minutes Monday night, Korean time — some 34 hours after the nuclear test and more than 24 hours after Trump took to Twitter to criticize Moon’s “talk of appeasement.” As the WaPo reports, the two presidents agreed to remove the limit on allowed payloads for South Korean missiles — something Seoul had been pushing for — as a way to increase deterrence against North Korea, according to a statement from South Korea’s Blue House. They agreed as well to work together to punish North Korea for Sunday’s nuclear test, pledging “to strengthen joint military capabilities,” a White House statement said, and to “maximize pressure on North Korea using all means at their disposal.”

Trump says hopes to avoid use of military action on North Korea (Reuters) - U.S. President Donald Trump said on Thursday he would prefer to avoid military action to deal with North Korea’s nuclear threat, but said previous diplomatic efforts have failed to pressure Pyongyang from developing its missiles. “Military action would certainly be an option. Is it inevitable? Nothing is inevitable,” Trump said during a news conference. “I would prefer not going the route of the military,” Trump said. “If we do use it on North Korea, it will be a very sad day for North Korea.”

Trump: 'Sad day' for North Korea if U.S. takes military action (Reuters) - U.S. President Donald Trump said on Thursday he would prefer not to use military action against North Korea to counter its nuclear and missile threat but that if he did it would be a “very sad day” for the leadership in Pyongyang. Trump again pointedly declined to rule out a U.S. military response following North Korea’s sixth and most powerful nuclear test as his administration seeks increased economic sanctions, saying Pyongyang was “behaving badly and it’s got to stop.” “Military action would certainly be an option. Is it inevitable? Nothing is inevitable,” Trump said during a news conference. I would prefer not going the route of the military,” Trump said. “If we do use it on North Korea, it will be a very sad day for North Korea.” Even as Trump has insisted that now is not the time to talk to North Korea, senior members of his administration have made clear that the door to a diplomatic solution remains open, especially given the U.S. assessment that any pre-emptive strike would unleash massive North Korean retaliation. While Trump talked tough on North Korea, China agreed on Thursday that the United Nations should take more action against Pyongyang but also kept pushing for dialogue to help resolve the standoff. North Korea, which is pursuing its nuclear and missile program in defiance of international condemnation, said it would respond to any new U.N. sanctions and U.S. pressure with “powerful counter measures”, accusing the United States of aiming for war. The United States wants the U.N. Security Council to impose an oil embargo on North Korea, ban its exports of textiles and the hiring of North Korean laborers abroad, and to subject leader Kim Jong Un to an asset freeze and travel ban, according to a draft resolution seen by Reuters on Wednesday. 

Trading Desks Passing Around A "Worst Case" Scenario Of North Korea - The reason why the VIX has spiked by over 3 vols, or 3.13 to be precise, rising as high as 13.26 as this moment, is being attributed - by several buyside desks - to a "worst case" scenario analysis passed around the trader community from a prominent sellside analyst, according to whom a military outcome in North Korea now appears practically inevitable should North Korea launch its ICBM, as reports overnight have speculated it will do in the coming days. The report claims that the Trump administration is now a position where it will be virtually impossible to not take military action against North Korea, as the sanctions route has achieved nothing, and absent a trade blockade of N.Korea's ally China, the strategy is unlikely to yield any benefits. Furthermore, as discussed earlier, Russia has officially joined China in publicly stating that it too is now against further sanctions on the rogue regime. What has attracted particular attention is the listing of next steps, according to which if North Korea launches another ICBM, as it is gearing up to do, it would be impossible for the US to ignore this latest provocation, and some form of military response or retaliation would be forthcoming. It is unclear as this point if such a response would be joined by military reinforcement from South Korea, including ground troops and other military assets, or if it would be confined to limited surgical strikes against critical targets.

Can The U.S. Intercept A North Korean Missile? -- North Korea's nuclear program has gathered serious and frightening momentum over the past few months, culminating in the isolated regime test-firing a missile over Japan in August and detonating a hydrogen bomb last Sunday. As diplomatic efforts stall, Statista's Niall McCarthy points out that eyes are turning to the region's missile-defense technology. Despite it being South Korea's first line of defense against a nuclear attack, the U.S. Army's THAAD system has proven controversial in the country with residents fearful the areas surrounding the launchers could become North Korean targets. The most recent nuclear test has prompted the country's defense ministry to deploy the four remaining THAAD launchers, on top of the two already in operation. That decision may turn out to be well-founded, considering that the THAAD system has a 100 percent success rate in test interceptions. That's according to the U.S. Missile Defense Agency, who say the system hit 13 targets in 13 attempts up to May 2017 (as well as another successful test since then). Countries in the region can also count on the Aegis missile system fitted to U.S. and Japanese naval vessels. Its Raytheon Standard missiles cannot currently engage ICBMsbut they are capable of destroying ballistic missiles. They have proven reasonably reliable in tests, destroying 35 targets and failing on seven occasions. The U.S. Patriot surface to air missile system is also used by South Korea and Japan. When it is used to engage missiles, it has a shorter range and is more effective protecting strategic targets rather than larger areas. Despite controversy regarding the system's record intercepting Iraqi SCUD missiles during the Gulf War, anti-missile tests have generally proven successful.

Three Dangerous Delusions about Korea -- They say that most of the world’s real dangers arise not because of what people don’t know but because of what they do «know» that just ain’t so. As a case in point, consider three things about Korea that the bipartisan Washington establishment seems quite sure of but are far removed from reality:

  • Delusion 1: All options, including U.S. military force, are «on the table.»  Everyone knows there are no military «options» the U.S. could use against North Korea that don’t result in disaster. The prospect that a «surgical strike» could «take out» (a muscular-sounding term much loved by laptop bombardiers) Pyongyang’s nuclear and missile capabilities is a fiction. Already impractical when considered against a country like Iran, no one believes a limited attack could eliminate North Korea’s ability to strike back, hard. At risk would be not only almost 30,000 U.S. troops in Korea but 25 million people in the Seoul metropolitan area, not to mention many more lives at risk in the rest of South Korea and perhaps Japan.
  • Delusion 2: North Korea must be denuclearized. - Whether anyone likes it or not, North Korea is a nuclear weapons state outside the Nuclear Non-Proliferation Treaty and will remain so. Kim Jong-un learned the lessons of Saddam Hussein and Muammar Gaddafi. Because Kim has weapons of mass destruction, especially nukes, he gets to stay alive and in power. If he gives them up, he can look forward to dancing the Tyburn jig or getting sodomized with a bayonet, then shot. That’s not a difficult choice.
  • Delusion 3: If the U.S. presses China hard enough, Beijing will solve the problem for us. - There is no combination of U.S. sanctions, threats, or pressures that will make Beijing take steps that are fundamentally contrary to China’s vital national security interests. (Here, the «vital national security» of China means just that, not the way U.S. policymakers routinely abuse the term to mean anything they don’t like even if it has nothing to do with American security, much less with America’s survival.) Aside from speculation (which is all it is) that China could seek to engineer an internal coup to overthrow Kim in favor of a puppet administration, maintaining the current odious regime is Beijing’s only option if they don’t want to face the prospect of having on their border a reunited Korean peninsula under a government allied with Washington.

What the Media isn’t Telling You About North Korea’s Missile Tests -- Last Monday, the DPRK fired a Hwasong-12 intermediate-range ballistic missile over Japan’s Hokkaido Island. The missile landed in the waters beyond the island harming neither people nor property. The media immediately condemned the test as a “bold and provocative act” that showed the North’s defiance of UN resolutions and “contempt for its neighbors.” President Trump sharply criticized the missile test saying: “Threatening and destabilizing actions only increase the North Korean regime’s isolation in the region and among all nations of the world. All options are on the table.” What the media failed to mention was that, for the last three weeks, Japan, South Korea and the US have been engaged in large-scale joint-military drills on Hokkaido Island and in South Korea. These needlessly provocative war games are designed to simulate an invasion of North Korea and a “decapitation” operation to remove (Re: Kill) the regime. North Korea’s supreme leader, Kim Jong-un has asked the US repeatedly to end these military exercises, but the US has stubbornly refused.

Dangerous Times: North Korea, China and the Threat of Nuclear War and Accident - The US continues to provoke North Korea with military exercises near its borders. It also fails to live up to diplomatic agreements. Western media continue to distort the chronology of cause and effect, inverting reality to claim that North Korea is provoking the West. John Pilger (The Coming War on China) talks to T.J. Coles about the situation. This interview contains material from our book, Voices for Peace: War, Resistance and America’s Quest for Full-Spectrum Dominance—an edited collection of original works by Pilger, as well as Noam Chomsky, Cynthia McKinney, Ilan Pappé and other leading activists and scholars (Clairview Books, 2017).

Elon "Doomsday" Musk Returns: Predicts AI Robots Will Launch Preemptive Strike That Begins WW3 -- Elon Musk is either privy to some really disturbing technology that the rest of us can't even begin to fathom or he is desperately crying out for help by advertising his recurring nervous meltdowns over social media.In his latest frightening/entertaining (depending on your viewpoint on the statement above) tweet storm, Elon predicts that artificial intelligence will be the "most likely cause of WW3" and that robots may actually initiate the outbreak of a global war if they decide that a "preemptive strike is most probable path to victory."  China, Russia, soon all countries w strong computer science. Competition for AI superiority at national level most likely cause of WW3 imo.—  May be initiated not by the country leaders, but one of the AI's, if it decides that a prepemptive strike is most probable path to victory — Elon Musk (@elonmusk) September 4, 2017

Tillerson is working with China and Russia — very, very quietly - Secretary of State Rex Tillerson has often been the silent man in the Trump foreign policy team. But out of the spotlight, he appears to be crafting a broad strategy aimed at working with China to resolve the North Korea crisis and with Russia to stabilize Syria and Ukraine. The Tillerson approach focuses on personal diplomacy, in direct contacts with Chinese and Russian leaders, and through private channels to North Korea. His core strategic assumption is that if the United States can subtly manage its relations with Chinese President Xi Jinping and Russian President Vladimir Putin — and allow those leaders to take credit for successes — complex regional problems can be solved effectively.Tillerson appears unfazed by criticism that he has been a poor communicator and by recent talk of discord with President Trump. His attitude isn’t exactly “take this job and shove it,” but as a former ExxonMobil chief executive, he doesn’t need to make money or Washington friends — and he clearly thinks he has more urgent obligations than dealing with the press. Tillerson appears to have preserved a working relationship with Trump despite pointedly separating himself from the president’s controversial comments after the Charlottesville unrest. Although Trump didn’t initially like Tillerson’s statement, it’s said he was ultimately comfortable with it.  The North Korea crisis is the best example of Tillerson’s diplomacy. For all the bombast of Trump’s tweets, the core of U.S. policy has been an effort to work jointly with China to reverse the North Korean nuclear buildup through negotiations. Tillerson has signaled that the United States is ready for direct talks with Kim Jong Un’s regime — perhaps soon, if Kim shows restraint. Tillerson wants China standing behind Kim at the negotiating table, with its hands figuratively at Kim’s throat.   . But Kim’s actions have been erratic and confusing: When it appeared that the North Koreans wanted credit for not launching missiles toward Guam, Tillerson offered such a public statement. Bizarrely, North Korea followed with three more weapons tests, in a reckless rebuff.

US foreign policy as bellicose as ever - Le Monde Diplomatique -- Last year it looked as if the US electorate wanted an end to foreign wars. Donald Trump promised he would make it happen. But his hopes of a ‘good deal’ with Russia went nowhere, as his fellow Republicans, Clinton Democrats, intelligence agencies and the media rallied against Putin. It only took a few months under Donald Trump’s presidency for the US to withdraw from the Paris climate agreement, impose new sanctions on Russia, reverse the normalisation of diplomatic relations with Cuba, announce its intention to pull out of the Iran nuclear deal, warn Pakistan, threaten Venezuela with military intervention, and declare a readiness to strike North Korea with ‘fire and fury ... the likes of which this world has never seen before.’ The Philippines, Saudi Arabia and Israel are the only countries on better terms with the US since Trump’s arrival in the White House on 20 January. Trump is not solely responsible for this increased tension: Republican neoconservatives, Democrats and the media all applauded him this spring when he ordered military manoeuvres in Asia and the launch of 59 missiles towards an air base in Syria (1). At the same time, he was prevented from acting when he broached a possible rapprochement with Moscow, and was even forced to sign off on new US sanctions against Russia. US foreign policy’s point of equilibrium is effectively being determined by Republican phobias (Iran, Cuba, Venezuela) often shared by Democrats, and by Democrat hatreds (Russia, Syria) endorsed by most Republicans. If there is a peace party in Washington, it’s currently well hidden. 

Russia: U.S. closure of diplomatic sites a 'blatantly hostile act' | Reuters: (Reuters) - Moscow denounced the American decision to close three Russian diplomatic facilities in the United States as a “blatantly hostile act” that violated international law and demanded Washington reverse the order on Sunday. The United States has ordered the closure of the Russian consulate in San Francisco and two buildings housing trade missions in Washington and New York. It is the latest broadside in a tit-for-tat exchange between the countries that has helped push relations towards a new post-Cold War low. Russian diplomats were working to vacate the properties over the weekend, including the six-story consulate.“We treat these developments as a blatantly hostile act, a grave violation by Washington of international law,” the Russian foreign ministry said of the U.S. order, which was made in late August in retaliation for Moscow cutting the United States’ diplomatic presence in Russia. “We urge the U.S. authorities to come to their senses and immediately return the Russian diplomatic facilities,” the ministry added on its website. “Otherwise the USA will bear total blame for the ongoing degradation of the relations between our countries.” Maria Zakharova, a spokeswoman for the foreign ministry, said that U.S. authorities had told Moscow that they expected Russia to sell the facilities, TASS state news agency reported. 

The Taliban: Undefeated, and possibly undefeatable - Just over a week after US President Donald Trump announced the deployment of additional US troops to Afghanistan, US army servicemen in Alaska were already preparing for deployment to the region. The Fourth Brigade Combat Team, 25th Infantry Division is to provide at least 1,000 of the 4,000 additional soldiers announced by the president as part of the continuation of the war. Even as additional troops get ready to deploy, the United States continues to be without a clear plan as to what it is hoping to accomplish, with defence officials at the Pentagon saying that they are "not prepared to move forward" with the president's plan and that critical planning was "still under way". In the meantime, Taliban spokesperson Zabihullah Mujahid responded to Trump's statement by telling him to take US troops back home because "the Taliban could not be defeated."   It is a smug statement to make, but in the case of the Tehreek-e-Taliban Afghanistan, it could well be true. In March of this year, the group released a report citing how much territory it controlled. According to the report, 211 of Afghanistan's administrative districts were in the group's control or were contested. The estimate was not overblown; a comparison with media reports and estimates released (pdf) by the Special Inspector General for Afghanistan Reconstruction (SIGAR) shows that they estimate contested and Taliban-controlled districts at 171, not very far from the Taliban number. Either way, then, nearly 16 years of US occupation and the expenditure of nearly $840.7bn (at the end of budget year 2018), the Taliban remains undefeated and possibly undefeatable.

Trump’s Afghan escalation and the Pakistan conundrum -- As newly deployed American forces begin to arrive in Afghanistan on President Donald Trump's orders, a larger strategic question hangs over their purpose. Can the United States win enough cooperation from Pakistan and key powers in the region to forge a political settlement between the Afghan government in Kabul and Taliban insurgents? The answer for Trump and his top advisers appears to be "not yet", and seven months into his four-year term the president is reversing a campaign promise to withdraw from Afghanistan. Instead, Trump is sending about 3,900 more troops to bolster some 11,000 US forces already there - and has put Pakistan on notice. "If you want to put pressure on the Taliban and you want to do things that maximise the prospect of it coming to the peace table, you actually need to go into Pakistan and start targeting the Taliban leadership," said Michael Kugelman, senior associate for South Asia at the Wilson Center, an independent think-tank in Washington. "If you want to hit the Taliban where it hurts, you have got to go into their sanctuaries, and this is a very fraught, delicate matter because this gets into the very tricky US-Pakistan relationship," Kugelman told Al Jazeera. Trump announced the shift in US posture in a nationally televised speech before a military audience at Ft Myer on August 21. Instead of adhering to a timeline for withdrawal, which former President Barack Obama had attempted, Trump's policy will be "conditions-based", which effectively commits the US to remain in Afghanistan for four more years.

The empire doesn’t care who is president - Since Donald Trump burst forth from the half-reality of our million television screens and became, somehow, the 45th president of the United States, the principal fear of the serious and sober has been the possibility that he will fuck this empire up. In the run-up to last year’s election, sections of the left even welcomed this possibility, imagining, somehow, that Trump could bring some end to our global hegemony that was free of blood and ruins. Their hopes have been dashed. But the serious and sober remain worried. Despite heartening signs that this White House is as willing as any other to torture and incinerate civilians in the name of Pax Americana, despite early giddy comfort in the sight of freshly launched cruise missiles, despite a new commitment, this past week, to extend our fruitless slaughter in Afghanistan for the sake of children too young to kill and die there when the war began, despite all of this, our bashful aristocracy is still worried. The reason is the same as always. “Let’s be honest,” tweeted Neera Tanden, the president of the Center for American Progress, last month. “There’s nothing in the first 7 months of Trump’s presidency that makes one trust him to handle escalating a war.” The powerful liberal who once wondered whether Libya ought not pay us back for the privilege of being bombed is not concerned with the moral facts of the bloodbath we’ve committed these past sixteen years. She’s worried that Trump isn’t up to the job of administering the killing fields with honor.

Navy Ships Suffered From Shoddy Maintenance, Overworked Sailors - Several U.S. Navy ships based overseas have lapsed training certifications, overworked sailors and shoddy maintenance, the government’s top watchdog will tell lawmakers as Congress looks into last month’s deadly collision of the USS John S. McCain with a merchant vessel near Singapore. The Government Accountability Office found that as of June 2017, 37 percent of the warfare certifications for cruiser and destroyer crews based in Japan — including certifications for seamanship — had expired, according to testimony submitted to the House Armed Services Committee and obtained by Bloomberg Government. This is more than a five-fold increase in the percentage of expired warfare certifications since 2005, the GAO’s John Pendleton will tell the panel Thursday. There were four U.S. naval vessel accidents in the Pacific this year, three of them collisions. The latest collision, involving the USS McCain, accounted for 10 of the 17 deaths caused by the mishaps. The cause of that crash is still under investigation. The accidents are unacceptable, Admiral William Moran, the Navy’s vice chief of naval operations, will testify. “No matter how tough our operating environment, or how strained our budget, we shouldn’t be and cannot be colliding with other ships and running aground,” Moran said in the written testimony provided to the committee. “That is not about resourcing; it is about safety and it is about leadership at sea. We are shocked by these recent events.” 

Saudi dispute with Qatar could be solved ‘fairly easily’: Trump - US President Donald Trump has offered to mediate an ongoing dispute between Qatar and its neighboring Arab states, adding that he thinks the issue could be resolved "fairly easily." "If I can help mediate between Qatar and, in particular, the UAE and Saudi Arabia, I would be willing to do so, and I think you would have a deal worked out very quickly," Trump told reporters at a joint press conference on Thursday at the White House in Washington, DC, with Kuwaiti Emir Sheikh Sabah al-Ahmad al-Jaber al-Sabah. "I would be willing to be the mediator," Trump said. "I think it's something that's going to get solved fairly easily." Saudi Arabia and its Arab satellite states of Bahrain, Egypt, and the United Arab Emirates cut their diplomatic ties with Qatar on June 5, accusing Doha of sponsoring terrorism and destabilizing the region. The Saudi-led bloc has also imposed sanctions against the tiny Persian Gulf country, including restrictions on Qatari aircraft using their airspace. Qatar’s only land border with Saudi Arabia has only been blocked as a result. Last week, Trump called on Saudi King Salman and “all the parties in the Qatar dispute” to find a diplomatic solution to the regional standoff. 

Sharp Differences Over Labor Surface at NAFTA Talks in Mexico - Tensions over sharp differences in pay between Mexican workers and their Canadian and U.S. counterparts surfaced on Sunday as negotiators discussed labor market rules in talks to overhaul the North American Free Trade Agreement.Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor standards, clashing with Mexican business leaders who argued that workers rights were a matter for each country to resolve internally.Mexican political and corporate leaders firmly resist demands to bring wages into line with U.S. and Canadian levels, arguing the big cost advantage the country enjoys over richer peers should decrease as economic development advances.Labor union leaders in the two wealthier nations say laxer labor standards and lower pay in Mexico have swelled corporate profits at the expense of Canadian and U.S. workers, making resolution of the issue a major battleground of the NAFTA talks.Jerry Dias, national president of Canadian union Unifor, said NAFTA had been a “lousy trade agreement for working-class people” and that the union was pushing his government to walk away from the talks if it could not secure them a better deal.“If labor standards aren’t a part of a trade deal, then there shouldn’t be a trade deal,” Dias told reporters in Mexico City on the sidelines of a second round of negotiations to update the 1994 trade agreement among the three countries.Bosco de la Vega, head of Mexican farm lobby, the National Agricultural Council, said more trade, not intervention in labor markets, was the best way for the region to grow economically. “Mexico can’t interfere in the labor market issue in the United States and Canada. We ask the same: that they don’t interfere in these matters,” he told reporters at the talks.

Latest Nafta Talks Near End Without Major Breakthroughs -- The latest Nafta talks are nearing conclusion without a major breakthrough or agreements on even the least-contentious topics, officials familiar with the negotiations say, fueling doubts among observers that a deal can be reached this year. U.S. Trade Representative Robert Lighthizer is scheduled to speak publicly alongside Mexican Economy Minister Ildefonso Guajardo and Canadian Foreign Minister Chrystia Freeland Tuesday to conclude the second round of talks toward a new North American Free Trade Agreement. Their appearance will cap a five-day session in Mexico City. While negotiators have made some progress, they have yet to agree on any major contentious issue and are far from a deal on individual Nafta chapters, the officials said, asking not to be identified discussing private matters. On some topics, discussion has been verbal with no specific text proposals submitted, they said. The talks came after U.S. President Donald Trump threatened outright withdrawal from the agreement. While slow progress is normal in most trade negotiations, the nations have been seeking an unusually quick timeline for Nafta, and officials expressed doubt a deal could be reached by the target date of December. That sentiment is shared by many observers and stakeholders who say the U.S. has been slow in detailing its actual demands. "They can’t possibly finish. The Americans haven’t started negotiating yet," said Peter Clark, a trade strategist and former Canadian official. Jerry Dias, a Canadian labor leader, said he’d "be shocked if it gets done before Christmas." 

A NAFTA renegotiation game-changer, until the Trump administration squanders it – EPI - Since the beginning of his presidential campaign, Donald Trump has railed against the North American Free Trade Agreement (NAFTA) as being a bad deal for working Americans. He promised that if he was elected, he would renegotiate NAFTA and secure a “much better deal for all Americans.”So it’s not surprising that earlier this week, the leader of a prosperous country engaged in NAFTA renegotiations demanded changes to increase workers’ leverage, provide a bulwark against downward wage pressure, and prevent his country’s manufacturing sector from being undercut by weak labor standards. But was this leader Donald Trump? Nope. It was Justin Trudeau of Canada.Even more striking, the reported change that Trudeau’s government has requested to stem downward pressure on Canadian wages is one that beefs up American labor standards. Yes, the low-wage, low-standard country that Trudeau’s government is correctly concerned about as they renegotiate NAFTA is the United States.  The requested change is ambitious: Trudeau’s government wants an end to so-called “right to work” (RTW) laws in American states. This would clearly be good for American workers. In a nutshell, “right to work” laws have nothing to do with helping people find work—instead they simply ban contracts requiring that workers benefiting from labor union representation pay their fair share for this representation. This ban makes it extraordinarily difficult for workers to join together and form unions in RTW states. As a result, these states have substantially fewer union members and less collective bargaining. The economic evidence shows that RTW laws do not boost employment or economic growth, but do suppress wages.

The Donald's Seinfeld Tax Plan: A Big Show About Nothing - David Stockman - Someone should remind the Donald that he actually is President and that it’s high time he accomplished something. Anything. Back on April 21st, for example, he promised that a core feature of his platform — a sweeping, pro-jobs tax reduction — would be soon unveiled.  Trump said the tax reform package will be introduced on “Wednesday or shortly thereafter,” just before his 100th day in office. While the president would not reveal details about the tax plan, he did say that the cuts will be “bigger I believe than any tax cut ever.” Well, we’ve passed the eighteenth Wednesday since that promise. What was actually delivered back then, of course, was a one-page statement of vague principles, fond aspirations and apple pie. So in Springfield, Missouri this week, the Donald is launched tax reform efforts again. And yet again the White House spin brigade has already made clear that it’s all about tone, not substance. That is, he will orate about tax fairness and closing loopholes, but not name any. He will promise big rate reductions but not say how big and for whom. He will promise to liberate jobs by slashing the corporate tax rate without explaining exactly why that will result in more jobs rather than more stock buybacks. And there were no numbers about how the implied trillions of revenue lost over the next decade will be paid for. Instead, Donald puckered himself up into a meld of Huey Long and Jack Kemp while preaching up a storm in favor of the “little guy”. A reference to the average worker who purportedly is being crushed by the Federal income tax and who gets tangled in the complexity of the IRS code without a high-priced tax lawyer alongside loophole-savvy financial advisors. Accordingly, the Donald is going to “unrig” the tax code for these little guys, thereby keeping faith with the millions of dispossessed citizens of Flyover America who voted for him last November. Except that narrative is essentially nonsense. This isn’t 1981. There is no raging inflation and bracket creep propelling the middle class into tax tyranny. In fact, owing to indexing and large increases in the standard deduction and personal exemption over the last 35 years, the income tax has essentially morphed into a Rich Man’s Levy.

If you listen closely, you can hear Trump’s tax plan shrinking - LA Times: Tax cuts are the centerpiece of President Trump’s economic agenda. That’s how he’ll deliver on his promise to create “millions” of new jobs and restore manufacturing in the heartland, he says. But for Republicans in Congress, after their failure to repeal President Obama’s healthcare law, tax reform is more than just another political battle. It’s an existential one.“If we don’t get tax reform done, we’re dead,” Sen. Mike Lee, the refreshingly blunt senator from Utah, said last week. “We might as well flip up our tent and go home.” If Trump and his allies pass an ambitious tax bill, they will be able to ascribe every subsequent improvement in the economy — every job created, every spike in the stock market — to their own handiwork, whether they deserve the credit or not. Article continues belowIf they’re stymied, they’ll have to prove that they didn’t merely inherit a healthy economy from Obama. The increase in business confidence that followed the election, the “Trump bump,” may disappear if the promise of tax cuts turns out to be a mirage. “Seven months after Trump’s inauguration, the president and his allies still don’t have a tax plan. So it’s not a good sign that the prospect of passing a tax bill already looks eerily like the repeal of Obamacare: a sure thing that turned into a debacle. Trump launched his fall tax campaign last week with a speech in Missouri, but it was largely content-free. Treasury Secretary Steven Mnuchin, a political neophyte, initially said he hoped to pass a bill by August. Now he promises a “blueprint” will arrive — not pass — in September. 

The Incredible Shrinking Corporate Tax Bill - Justin Fox - The second quarter of 2017 was another good one for corporate profits in the U.S. By one of the several measures tallied by the Bureau of Economic Analysis in its gross domestic product report last week, those profits poured in at an annualized rate of $2.27 trillion before taxes and $1.79 trillion after. 1  Neither of those quite match the all-time records set over the past three years, but they're not far off. 2 When you measure profits as a share of GDP and look back as far as the available data will take you, though, the picture is different. Pre-tax profits aren't anywhere near a record, are about as high as they were for most of the 1940s and 1950s, and are not far above the highs of the 1960s and 1970s. After-tax profits, on the other hand, have for most of the past decade-plus been markedly higher than at any time since 1929, when the top corporate income tax rate was just 11 percent. What this means is that corporations are paying a lot less in taxes (as a share of profits or of GDP) than they used to. Because reducing corporate tax rates is likely to be central to the tax reforms Congress will attempt this fall, this seems like a good time to go over how this came to pass. First, here's the history of corporate federal income tax receipts, as tallied by the White House Office of Management and Budget:  As a percentage of gross domestic product, by fiscal year.  One cause of this decline is that corporate tax rates are lower than they used to be. After shooting up in the late 1930s and early 1940s, the top rate hovered around 50 percent for most of the 1950s and 1960s, then headed downward to its current rate, 35 percent, which has been in place since 1993. Still, that drop in the top rate is a lot smaller than the 73 percent decline in corporate tax receipts' share of GDP since the early 1950s. Also, that 35 percent rate, combined with an average state corporate tax rate of 3.9 percent, gives the U.S. the third-highest top marginal corporate tax rate on the planet; yet the U.S. is far from a world leader in generating revenue from corporate income taxes.

Pessimism abounds on Trump tax reform effort | TheHill: Tax lobbyists and Wall Street rate the prospects of tax reform as very low. One veteran tax lobbyist, a former member of the Senate Finance Committee staff, said the chances of a broad tax reform package similar to the 1986 rewrite of the code are “zero.” Another K Street tax specialist put the odds at “less than 1 in 4,” citing the lack of a detailed plan from the administration and the cluttered agenda. The September schedule is packed and includes measures to keep the government funded and raise the debt ceiling. After September, Congress will need to deal with the appropriations process for 2018, among other issues that will cut into the energy that can be put into tax reform. “I don’t think markets are expecting anything. There was some expectation soon after the election, but I think all of that has been wrung out of market expectation,” said Mark Zandi, the chief economist at Moody’s Analytics. “There’s no evidence that investors or anyone else are expecting any kind of tax reform or tax relief.” Some believe Congress and President Trump will eventually fall back on a tax-cut plan, possibly focused on allowing businesses to fully and immediately deduct capital expenses — something championed by House Ways and Means Committee Chairman Kevin Brady (R-Texas). Such a bill could also extend various expired tax breaks, which the White House could hail as fuel for an expanding economy. However, there are also political damages to such an approach. Dan Alpert, a founding managing partner at Westwood Capital, said, “It seems to me that everyone is going to avoid the hard questions on tax reform and focus on the corporate side.” But he acknowledged cutting business taxes without addressing taxes for middle-class workers will be seen as “a raw handout to shareholders” and “it’s going to be very hard to achieve that.” 

Trump tries to sell his tax plan as an antidote to middle-class wage pressures. Woe betide those who believe him. -- Jared Bernstein --The President is jetting off to North Dakota today to sell his farblunget tax plan. This WaPo piece reveals that D Senator Heidi Heitkamp is going with him. As the article puts it: The Democratic senator is expected to face a difficult challenge for reelection next year in a state Trump carried in 2016 by 36 percentage points, one of his biggest margins of victory. So Heitkamp may see a political advantage in being friendly with Trump and open to his ideas, even if she does not ultimately vote to pass his agenda. I was impressed by the extent to which D’s held together to block the R’s attack on health care, but Trump’s guest passenger is a reminder that tax legislation has the potential to scramble that alliance. The administration’s clear play here is to try to convince people that what appears to be the latest version of the standard, highly regressive Republican tax plan is actually the answer to wage and income challenges that have faced working-class people for many decades now. For example, the Post tells us this sentence will be in the speech: “The pipe fitters and plumbers, the nurses and police officers — all the people like you who pour their hearts into every penny earned in both the offices and oil fields of America — you are the ones who carry this nation on your backs, and it is time you got the relief you deserve.”  The Tax Policy Center has patched together enough info about tax ideas floated by team Trump to run distributional tables. But they’ve also taken a useful step beyond that by looking at the impact of offsetting the costs of the tax cuts with spending cuts (I explain these tabulations here). According to BLS data, the median plumber or pipefitter in North Dakota earns about $54,000 a year; ND registered nurses, about $60,000; police, $53,000. Assuming that’s their family income, it puts them all in the middle-fifth of the national income distribution, according to the TPC tables (average inc: $67,000). At first blush, the Trump plan would boost their income all of 1.3%, as per the chart below, compared to over 11% for high-income households (average inc: $2.3 million). But once you factor in the payfors, assuming spending cuts hit uniformly across the income scale, the middle class, including cops, plumbers, and pipefitters, lose income, and poor families get whacked especially hard. The income of the top 1%, however, is essentially unchanged.

The Case for a Millionaire Tax - What’s the strongest case for the millionaire tax? After all, federal taxes are pretty progressive already. Forty years ago, the richest 1 percent paid about 18 percent of the country's federal income taxes. Today, they pay about 40 percent. Some might say that’s quite enough. But the most straightforward case for a millionaire tax involves some simple arithmetic. The number of million-dollar-earners in the U.S. has soared this century. According to the IRS, the number of households with an adjusted gross income greater than $1 million more than doubled between 2001 and 2014, the last year with complete data. No group has grown faster than the super-rich; the number of households earning more than $10 million grew by 144 percent.What’s more, the tax code’s progressivity actually pauses, and even reverses, at the top of the income ladder, for two reasons. First, the top tax bracket begins around $450,000. That means the last dollar earned for a typical urologist (average income: $460,000) is taxed the same as the last dollar earned by a typical Fortune 500 CEO making 10 times more than that.Second, investment income, which accounts for a large portion of the richest Americans’ haul, is taxed at a preferential rate. As a result, the merely-rich often pay a higher tax rate than the super-duper-rich. For example, in 2011, Mitt Romney made about $14 million but paid just 15 percent of it in taxes, which is far below the average effective tax rate for an ordinary millionaire. It’s more typical for a household making just under $100,000. Why was Romney’s effective tax rate so small? Because most of his income came from investments. There are ways to restore the progressivity of the tax code without adding a millionaire bracket, such as raising taxes on investment income or limiting high-earners’ deductions on state and local taxes and mortgage interest. But the benefit of a millionaire bracket is that it would be the most direct way to capture some of the extraordinary wealth of the rich to use it for the public benefit. (There might be political benefits, too: Cutting the mortgage interest deduction seems like an attack on homeownership; taxing millionaires might not be similarly criticized as an attack on the American dream.)

Trump has decided to end DACA, with 6-month delay - POLITICO: President Donald Trump has decided to end the Obama-era program that grants work permits to undocumented immigrants who arrived in the country as children, according to two sources familiar with his thinking. Senior White House aides huddled Sunday afternoon to discuss the rollout of a decision likely to ignite a political firestorm — and fulfill one of the president’s core campaign promises. The administration’s deliberations on the issue have been fluid and fast moving, and the president has faced strong warnings from members of his own party not to scrap the program. Trump has wrestled for months with whether to do away with the Deferred Action for Childhood Arrivals, known as DACA. But conversations with Attorney General Jeff Sessions, who argued that Congress — rather than the executive branch — is responsible for writing immigration law, helped persuade the president to terminate the program and kick the issue to Congress, the two sources said. In a nod to reservations held by many lawmakers, the White House plans to delay the enforcement of the president’s decision for six months, giving Congress a window to act, according to one White House official. But a senior White House aide said that chief of staff John Kelly, who has been running the West Wing policy process on the issue, “thinks Congress should’ve gotten its act together a lot longer ago.” White House aides caution that — as with everything in the Trump White House — nothing is set in stone until an official announcement has been made. Trump is expected to formally make that announcement on Tuesday, and the White House informed House Speaker Paul Ryan of the president’s decision on Sunday morning, according to a source close to the administration. Ryan had said during a radio interview on Friday that he didn’t think the president should terminate DACA, and that Congress should act on the issue. 

DACA: AG Sessions said Obama-era immigration plan ending - The program that allowed as many as 800,000 undocumented immigrants to remain in the U.S. will soon end, Attorney General Jeff Sessions announced Tuesday. "The program known as DACA that was effectuated under the Obama administration is being rescinded," Sessions said. Sessions said Congress will be given six months to address the Deferred Action for Childhood Arrivals- or DACA - program. The policy was put in place by former President Barack Obama in 2012 and allows certain undocumented immigrants who were brought into the U.S. as children to receive for work permits and deferments from deportation."DACA was effectuated by the previous administration through executive action, without proper statutory authority and with no established end-date, after Congress' repeated rejection of proposed legislation that would have accomplished a similar result," Sessions wrote in a letter explaining the decision. "Such an open-ended circumvention of immigration laws was an unconstitutional exercise of authority by the Executive Branch."DACA covers those who were brought to the U.S. before age 16 and who were under age 31 as of June 15, 2012, among other criteria.  NBC News is reporting the Trump administration will stop considering new applications for legal status dated after Tuesday but will allow any DACA recipients with a permit set to expire before March 5, 2018 to apply for a two-year renewal.Under the plan announced by Attorney General Jeff Sessions, the Trump administration will stop considering new applications for legal status dated after Tuesday, but will allow any DACA recipients with a permit set to expire before March 5, 2018, the opportunity to apply for a two-year renewal

Trump ends Dreamers program — but gives Congress chance to save it - POLITICO: Attorney General Jeff Sessions announced Tuesday that President Donald Trump’s administration is rescinding an Obama-era policy that provided work permits to undocumented immigrants who were brought into the country as children, with a six-month wind-down period that allows Congress to act on the issue first. “I’m here today to announce that the program known as DACA that was effectuated under the Obama administration is being rescinded,” Sessions told reporters, adding that the Justice Department has advised Trump and the Department of Homeland Security to “begin an orderly, lawful wind-down, including the cancellation of the memo that authorized this program.”“This will enable DHS to conduct an orderly change and fulfill the desire of this administration to create a time period for Congress to act — should it so choose. We firmly believe this is the responsible path,” Sessions said, encouraging lawmakers to “carefully and thoughtfully” pursue immigration reform. Sessions departed without responding to questions shouted by reporters, including about what the government plans to do with information applicants to the Deferred Action for Childhood Arrivals program submitted, and whether the administration will target so-called Dreamers for deportation. A senior DHS official said Dreamers whose work permits expire by March 5 will be allowed to apply for a two-year renewal, as debate continues about the future of the program. The renewal application must be submitted by Oct. 5, and Tuesday is the last day the administration will consider new applications, the official said. Trump has wrestled for months with how to handle the future of DACA, which many Republicans consider a major executive overreach by former President Barack Obama. While the president promised on the campaign trail to end the program, he has repeatedly expressed sympathy for the roughly 800,000 young immigrants who have received some protection under DACA. 

How big business is trying to convince Congress to save the ‘Dreamers’ from Trump -- Business leaders across industries, from tech to agriculture, are appealing to Congress to protect nearly 800,000 undocumented workers from deportation as President Trump is expected on Tuesday to announce a plan to revoke their permission to work. The Trump administration has indicated it would phase out the five-year-old Deferred Action for Childhood Arrivals (DACA) program, which allowed immigrants who have lived in the United States illegally since they were children to work without punishment. Politico first reported Sunday night that Trump plans to rescind the program but delay enforcement for six months to give Congress time to pass legislation to replace the Obama-era provision. “This is not the end of the story. Congress can act today,” said Jeremy Robbins, executive director of New American Economy in an interview Monday. “We have been gearing up for this big fight that we hope is coming.” Attorney General Jeff Sessions announced on Sept. 5 that the Trump administration is rescinding Deferred Action for Childhood Arrivals, calling the program "an open-ended circumvention of immigration laws." (The Washington Post) Robbins said the national business coalition, founded by former New York mayor Michael Bloomberg to advocate for immigration reform, will have more than 100 corporate and conservative leaders lined up in at least 15 states by Tuesday to begin pressuring Congress to act. The lobbying will take the form of private meetings both in Washington and in members’ home districts, letters to member of Congress, newspaper op-eds and public events, Robbins said. The renewed pressure on Congress comes on top of a petition that more than 400 business executives — from Apple, Facebook, Microsoft, Amazon and other companies — have signed urging Trump and Congress to protect the “Dreamers,” 97 percent of whom are in school or in the workforce. Over the weekend, executives from a diverse array of companies, including AT&T, Wells Fargo, Best Buy, Ikea and Kaiser Permanente, added their names to the letter. At least 72 percent of the top 25 Fortune 500 companies count DACA recipients among their employees, according to, which organized the petition. 

 Bankers join opposition to Trump’s termination of DACA - Big-bank CEOs, smaller tech-focused lenders and advocates for low-income workers expressed opposition Tuesday to President Trump’s plan to terminate protections for young, undocumented immigrants who arrived in the country as children.Following the administration’s announcement that it will stop issuing work permits to so-called dreamers, a corporate lobbying group that includes leaders from several megabanks — including JPMorgan Chase, Bank of America, Wells Fargo and Citigroup — issued a swift condemnation.“We should do everything in our power to continue to attract the best and brightest because they make us stronger as a people and as an economy,” Jamie Dimon, chairman and CEO of JPMorgan Chase and chairman of the Business Roundtable, said in a statement issued Tuesday. “And, when people come here to learn, work hard and give back to their communities, we should allow them to stay in the United States.” Bank of America Chairman and CEO Brian Moynihan, meanwhile, urged Congress to move on legislation that offers protections young immigrants. “The individuals covered by the terms of this program live in and contribute to the neighborhoods and communities across our country that we serve every day,” Moynihan said in an emailed statement. The comments echoed criticism from the business community that has been building in recent days. Several CEOs, including from Silicon Valley Bank in Santa Clara, Calif., and Eastern Bank in Boston, were among leaders from a range of industries who urged policymakers last week to preserve the benefits provided under the Deferred Action for Childhood Arrivals program.

Trump Risks GOP Civil War Pushing Congress for ‘Dreamer’ Bill --  President Donald Trump’s decision to end an Obama-era program preventing the deportation of immigrants illegally brought to the U.S. as children risks a deep wedge between the Republican Party’s leaders and its conservative base ahead of next year’s congressional elections. In announcing an end to the program in the next six months, Trump called on Congress to pass legislation to codify the protections President Barack Obama created for about 800,000 people, called Deferred Action for Childhood Arrivals, or DACA. But Trump made his decision against the advice of senior Republican leaders like Senator Orrin Hatch of Utah, who said in a statement that he called Trump last week to urge him to preserve the program. Nor did Trump consult much with business leaders or allies outside the White House, according to five people familiar with the matter. One influential outside adviser, Blackstone Group CEO Stephen Schwarzman, had recommended earlier this year that Trump keep DACA in place, but one White House aide said Trump didn’t check back with Schwarzman before making up his mind this weekend. He instead focused on recommendations from officials inside the Homeland Security and Justice departments, the aide said. In the face of a sharp backlash over his decision by Democrats and some Republicans, Trump issued a tweet Tuesday evening that suggested he was open to reversing course but offered no details to back it up.“Congress now has 6 months to legalize DACA (something the Obama Administration was unable to do). If they can’t, I will revisit this issue!,” he tweeted. But Trump told reporters in the Oval Office Wednesday morning he had “no second thoughts” on ending the program.

Obama slams Trump for rescinding DACA  - Former President Barack Obama on Tuesday bashed his successor's decision to rescind an immigration order shielding some children of undocumented immigrants from deportation, calling the move "cruel" and "self-defeating.""To target these young people is wrong -- because they have done nothing wrong," Obama wrote in a post on Facebook hours after the decision was announced by President Donald Trump and Attorney General Jeff Sessions. "It is self-defeating -- because they want to start new businesses, staff our labs, serve in our military, and otherwise contribute to the country we love. And it is cruel." The lengthy statement is among Obama's most forceful since departing office. Though he didn't mention Trump by name, he sharply criticized the President's motives and insisted rescinding the Deferred Action for Childhood Arrivals program was not legally required."It's a political decision, and a moral question," Obama wrote. "Whatever concerns or complaints Americans may have about immigration in general, we shouldn't threaten the future of this group of young people who are here through no fault of their own, who pose no threat, who are not taking away anything from the rest of us." Obama said he hoped lawmakers pass a bill allowing those eligible for the DACA program to remain in the United States. And he framed the decision as a question of "basic decency."

Trump’s DACA decision followed months of meetings involving senior Democrats (Reuters) - No. 2 Senate Democrat Dick Durbin has had multiple conversations with Jared Kushner and other top White House officials about how to protect young immigrants known as “Dreamers” from deportation, the lawmaker said on Thursday. Durbin, in an interview with Reuters, described Kushner as a conduit to his father-in-law, President Donald Trump, and open to the idea of doing something to help the 800,000 Dreamers brought illegally to the United States as children. Kushner, a top administration aide with a broad portfolio that includes brokering a Middle East peace agreement, held private meetings at the White House with Durbin and Republican Senator Lindsey Graham in April and July, according to Durbin's office. Durbin, an outspoken advocate for the Obama-era Deferred Action for Childhood Arrivals program that protected the Dreamers from deportation and allowed them work permits, told Reuters he teamed up with Graham to discuss opportunities with the White House to help those enrolled in DACA. "We initially had a conversation (with Kushner), at Senator (Chuck) Grassley's invitation, on criminal justice and I asked Mr. Kushner afterwards if we could talk about immigration, separate and apart from Senator Grassley, which we did," Durbin said. .The conversations underscore a level of interest in the issue among senior White House aides that could lend momentum to the congressional debate on approving a permanent legislative fix for the Dreamers that Durbin has sought for the past 16 years. The talks also point to a White House that could be moving away from a more rigid immigration stance than during the initial weeks of Trump's presidency. The fate of the Dreamers has been in question since Trump won last November's presidential election on a promise of clamping down on illegal immigration. Several state attorneys general had threatened legal action to kill DACA and set a Sept. 5 deadline for Trump to rescind former President Barack Obama's executive order protecting the Dreamers or face a lawsuit. On Tuesday, the Republican president said he would eliminate DACA in six months and urged Congress to work on an alternative during that time. 

Congress Probably Has The Votes To Make DACA Law. But That Doesn’t Mean It Will - The Trump administration ordered an end to an Obama-era program protecting young undocumented immigrants from deportation on Tuesday, while leaving Congress some opportunity to revive it.Attorney General Jeff Sessions announced that the administration has now stopped accepting any new applications for enrollment to the Deferred Action for Childhood Arrivals program (known as DACA), although it will allow, until Oct. 5, previous DACA recipients to renew their status in the program. The administration will also not mount a defense of DACA, which was enacted by President Barack Obama in 2012. Several state attorneys general had threatened that they would file a lawsuit on Tuesday if the Trump administration didn’t end the program, on the grounds that the policy is an unconstitutional use of executive authority. Sessions said that he himself holds that view.But Trump tweeted on Tuesday morning, “Congress, get ready to do your job-DACA,” suggesting that the president may be open to signing a bill that in effect codifies DACA, which essentially shields young people brought to the United States as children from being deported and allows them to apply and receive work permits for up to two years.But can a DACA-style bill pass in the Republican-controlled House and Senate? Maybe.It’s likely a majority of members of Congress in both chambers support enshrining DACA into law. How do we know that? Well, in July, U.S. Sen. Lindsey Graham of South Carolina, a Republican, introduced the “Dream Act of 2017,” which basically codifies DACA. That provision’s co-sponsors include Arizona’s Jeff Flake and Alaska’s Lisa Murkowski, two other Republicans. North Carolina’s Thom Tillis is behind a similar provision called the RAC Act (Recognizing America’s Children) that in effect ensures those currently eligible for DACA could not be deported. So assuming all 48 Democrats in the Senate1 backed some kind of Dream Act, about 52 senators — a majority — are already behind such a policy.

The Very Bad Economics of Killing DACA - Paul Krugman –  Trump’s decision to kill DACA — never mind the attempt to obscure things with that meaningless delay — is, first and foremost, a moral obscenity: throwing out 800,000 young people who are Americans in every way that matters, who have done nothing wrong, basically for racial reasons. But it’s also worth noting that Jeff Sessions just tried to sell it with junk economics, claiming that the Dreamers are taking American jobs. No, they aren’t, even if we leave aside the question of who’s an American. DACA is very much a boon to the rest of the U.S. population, and killing it will make everyone worse off. To see why, first note that whatever you think about the economics of less-educated immigrants — most of the evidence suggests that they don’t depress wages, but that’s another discussion — none of it applies to DREAMers. Their educational and behavioral profile, as Cato notes, doesn’t resemble the average immigrant, let alone the average undocumented immigrant; they look like H-1B visa holders, that is, skilled immigrants we have specifically allowed in because they help the economy. Beyond that, DREAMers are young — which means that they help the economy in not one but two big ways, because they mitigate the economic problems caused by an aging population.One of those problems is fiscal: as the population ages, there are fewer working-age members contributing taxes to pay for Social Security and Medicare. A cohort of relatively high-wage, highly motivated people mostly in their 20s, likely to pay lots of taxes for decades, is exactly what the doctor ordered to make that issue less severe. Meanwhile, I’m one of those who worries about secular stagnation — persistently weak spending, making episodes in which monetary policy can’t achieve full employment even with zero interest rates much more likely. Several factors contribute to this risk, but probably the most important is demography: a sharp slowdown in the growth of the working-age population, which means less incentive to invest in structures, factories, and more. (The demographic issue is why Japan, with low fertility and great hostility to immigration, entered a zero-rate regime a decade before the rest of us.) And what would make secular stagnation more of a problem? Hey, let’s expel hundreds of thousands of young people from the current and future work force. So this is a double blow to the U.S. economy; it will make everyone worse off. There is no upside whatever to this cruelty, unless you just want to have fewer people with brown skin and Hispanic surnames around. Which is, of course, what this is really all about.

Trump's DACA Repeal Could Affect Thousands of Pakistanis in America - Riaz Haq - There are 3,476 Pakistani beneficiaries of DACA, former President Barack Obama's initiative providing relief from deportation to over a million young people brought illegally in to the United States as children. President Trump's decision announced by Attorney General Jeff Sessions today to end DACA in 6 months' time has put the future of these young men and women in doubt. DACA is the acronym for President Barack Obama's executive order titled "Deferred Action on Childhood Arrivals".  It was issued to stop possible deportations of over a million young men and women after the US Congress failed to pass the "Dreamers Act" that would have given them legal status in the United States.  About 1.3 million DACA applications have been approved as of the second quarter of year 2017, according to the U.S. Citizenship and Immigration Service (USCIS).While the overwhelming majority of DACA recipients are from Mexico,  the beneficiaries include 7,028 Indians (ranked 12) and 3,476 Pakistanis (ranked 23). There are two other Asian countries of origin among DACA beneficiaries: South Korea ranked 6th with 17,625 and Philippines ranked 10th with 10,099 who arrived in the United States illegally as children. Mexico tops the countries of origin with 1.2 million DACA recipients, followed by 56,633 from El Salvador at number 2 and 39,258 from Guatemala at number 3. Poland is the only European country of origin. The rest are mostly from South and Central American and Caribbean island nations. DACA's repeal could make the beneficiaries of the program immediately eligible for deportation. It could also strip them of their work permits and rescind in-state tuition for undocumented college students.

Border security could be key to saving Dreamers - POLITICO: Democrats and Republicans scrambling to protect Dreamers before a March deadline will almost certainly have to swallow tougher immigration measures in return. GOP lawmakers on Capitol Hill, from the top tiers of leadership down to key rank and file, are quickly coalescing around pairing a measure that codifies the Deferred Action for Childhood Arrivals program into law with some modest security and enforcement measures.And Democrats are willing to deal. This means that President Donald Trump’s desire to construct a 2,000-mile border wall and slash legal immigration limits are all but off the table. Ditto measures, at least for Democrats, that would put other undocumented immigrants, such as the parents of Dreamers, more at risk of deportation. But other, more modest measures are in play. Sen. Lindsey Graham (R-S.C.) would like to pass stand-alone legislation to provide a pathway to citizenship for undocumented immigrants who came to the United States as children, but he said Republicans who are insisting on other immigration provisions are “right.” “The Republican criticism is, if you just provide legal status and do no more, you incentivize people to keep coming,” Graham said in an interview Wednesday. “So I think the deal is a border security package that’s reasonable, effective and married up with the DREAM Act.” In the House, Speaker Paul Ryan stressed Wednesday that “it is only reasonable and fitting” to address not just a DACA fix but the causes of illegal immigration by tightening up border security — signaling that he wouldn’t move a stand-alone bill for Dreamers. 

Ending DACA could royally screw up the Census. That’s a problem for the GOP. - In 2012, the White House, under President Obama, urged undocumented immigrants who came to the United States as minors to declare their presence. In exchange for coming forward and being counted — which is legally, economically, and ethically preferable to maintaining a status quo in which immigrants live in the shadows of society — these people were promised that they would be spared the full weight of the deportation process. As such, many chose to hand over their details. Now, a different president is poised to use that same information those 800,000 immigrants provided against them and their families to facilitate deportation. The Trump administration's reversal of the Deferred Action for Childhood Arrivals (DACA) policy means that immigrants who came forward under DACA were effectively lured into a trap.This is the worst kind of public policy. It incentivizes exactly the wrong behavior. People who remained hidden from official view are no more at risk today than they were in the past, but immigrants who were circumspect in attempting to follow the rules are now exposed to the risk of deportation. The result will not be fewer immigrants in the country, but merely more immigrants attempting to remain out of sight.We will not feel the full consequences of rolling back DACA until 2020. In addition to an already anticipated presidential race, that year will include another critically important event: the U.S. Census. Crucially, the U.S. Census is a strict population count; it is not a count of citizens. The Census Bureau makes its best effort to count, as the law mandates, everyone in a given area using a combination of methods, which in 2020 will include mail-in forms, online responses, and traditional door-to-door counts.  If immigrants — properly documented or otherwise — were not already leery of interacting with the government before the DACA reversal, they are now.  Why does it matter? Because the Census is vitally important politically and economically. The process of reapportioning seats in the House is determined directly by population, and the method used to calculate it is sensitive to small changes in state populations. Suppressed counts in states with large Latino populations could influence where the last few marginal seats are awarded.

Houston mayor to immigrants: If you face deportation for seeking safety, I'll represent you | TheHill: Houston Mayor Sylvester Turner (D) said Monday that he will represent any immigrant who faces deportation after seeking help during Tropical Storm Harvey. During a press conference, Turner said “there is absolutely no reason” why any individual shouldn't call for help. “I and others will be the first ones to stand up with you,” said Turner. “If you need help and someone comes and they require help, and then for some reason, then somebody tries to deport them, I will represent them myself, okay?” Turner said all individuals affected by the storm should take advantage of the services offered to them. “If you are in a stressful situation, I don’t care who you are, I don’t care what you’re religion is, I don’t care what your language is, you come and take advantage of every service that we have,” he said. “If you’re in a stressful situation and you need help, you call us for help. We want you to call. There is absolutely no reason why anyone should not call okay?” U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement said last week that saving lives would be the agencies' “highest priorities." “Routine noncriminal immigration enforcement operations will not be conducted at evacuation sites, or assistance centers such as shelters or food banks,” the agencies said. “The laws will not be suspended, and we will be vigilant against any effort by criminals to exploit disruptions caused by the storm.” 

Summer employers hired American amid Trump visa squeeze - - President Donald Trump’s harsh criticism of immigration programs and Congress’ refusal to lift a cap on work visas meant many seasonal businesses had to hire American this summer — and pay their workers more. That's good news for Trump, for U.S. workers, and for supporters of Trump's “American First” agenda, but business groups complain that increased spending on wages will ultimately cost jobs and sap company profits. Across the country, enterprises ranging from oyster shuckers to landscapers say they were forced to give up contracts and forgo revenue because they just couldn’t find enough workers to do the jobs this summer."There were a lot of businesses that lost a lot of revenue,” said Laurie Flanagan, co-chair of the H-2B Workforce Coalition, a lobbying group with a membership that includes the U.S. Chamber of Commerce. Trump has blasted programs that allow foreign guest workers to take jobs in the U.S. legally. “Widespread abuse in our immigration system is allowing American workers of all backgrounds to be replaced by workers brought in from other countries to fill the same job for sometimes less pay,” he told workers in Wisconsin in April. “This will stop.” The Trump administration hasn't moved specifically against the visas for summer workers — known as H-2Bs. His own companies use H-2B workers, especially at his Mar-a-Lago resort, which recently requested H-2B visas for 70 cooks, housekeepers and servers to start in October. But an executive order that Trump signed in April put the federal government on notice that he intended to tighten restrictions on guest-worker visas, and created a chilling effect. The U.S. had 66,000 slots this year for foreign workers to staff non-agricultural seasonal businesses — landscapers, hotels and seafood processors among them. By March, these slots were all filled. In previous years, Congress often dealt with such shortages by extending the guest workers' H-2B visas. But this year Congress ignored employers’ pleas, putting the decision in the hands of the administration. In response, the Department of Homeland Security added 15,000 visas in what then-DHS Secretary John Kelly called a "one-time increase." Even that somewhat grudging gesture didn't occur until mid-July, when nearly one-third of summer was already past. 

 With All Eyes on DACA, the Trump Administration Is Quietly Killing Overtime Protections - On September 5, the administration of Donald Trump formally announced that they won’t try to save Obama’s overtime rule, effectively killing a potential raise for millions of Americans. This disturbing development has largely slipped under the radar during a busy news week, marked by Trump’s scrapping of the Deferred Action for Childhood Arrivals (DACA) program.Twenty-one states and a number of business groups sued the Obama administration last September, after the Department of Labor (DOL) announced the new rule, accusing the former president of overreach.That lawsuit led to Amos Mazzant, a federal Obama-appointed judge in Texas, putting the rule on hold last November, shortly before it was set to become law. On August 31, Mazzant struck the rule down, and—less than a week later—Trump’s Department of Justice (DOJ) declined to challenge the District Court’s decision. In a court filing, a DOJ lawyer said that the administration would not appeal.The Obama administration’s rule would have raised the overtime salary threshold considerably. The threshold hadn’t been increased by any administration to adequately reflect wage growth or inflation, which means that many workers only see overtime pay if they make less than about $23,660 a year. Obama had scheduled that number to be bumped up to about $47,476 after reviewing 300,000 comments on the subject. “The overtime rule is about making sure middle-class jobs pay middle-class wages,” former Labor Secretary Tom Perez told reporters on a call after the rule was announced in May 2016. “Some will see more money in their pockets … Some will get more time with their family … and everybody will receive clarity on where they stand, so that they can stand up for their rights."

Court rejects Trump administration on travel ban exemptions -  President Donald Trump's travel ban policy suffered another defeat Thursday as an appeals court rejected the administration’s attempt to deny grandparents, aunts, uncles and cousins of Americans a temporary exemption from the controversial executive order. A three-judge panel of the 9th U.S. Circuit Court of Appeals unanimously declined to overturn a district court judge’s ruling that the administration was taking too narrow a view of an exception the Supreme Court carved out from the travel ban in June.The appeals court judges reasoned that since the justices said the mother-in-law of one travel-ban challenger was entitled to a reprieve from the president's order, other relatives should enjoy the same treatment."If mothers-in-law clearly fall within the scope of the injunction, then so too should grandparents, grandchildren, brothers-in-law, sisters-in-law, aunts, uncles, nieces, nephews, and cousins," Judges Michael Daly Hawkins, Ronald Gould and Richard Paez wrote in a joint opinion. "The Government does not offer a persuasive explanation for why a mother-in-law is clearly a bona fide relationship, in the Supreme Court’s prior reasoning, but a grandparent, grandchild, aunt, uncle, niece, nephew, or cousin is not." The appeals court panel also cleared the way for a greater flow of refugees, declining to disturb a lower court order that those already assigned to resettlement agencies can enter the United States despite Trump’s directive.

Elizabeth Warren Co-Sponsoring Bernie Sanders’s ‘Medicare for All’ Bill - Senator Elizabeth Warren announced on Thursday she’s co-sponsoring Senator Bernie Sanders’s “Medicare for All” bill, which is set to be introduced next week in the Senate. In a statement, Warren said, “There is something fundamentally wrong when one of the richest and most powerful countries on the planet can’t make sure that a person can afford to see a doctor when they’re sick. This isn’t any way to live.”“I believe it’s time to take a step back and ask: What is the best way to deliver high quality, low-cost health care to all Americans? Everything should be on the table—and that’s why I’m co-sponsoring Bernie Sanders’ ‘Medicare for All’ bill that will be introduced later this month,” the senator added.  In her statement, Warren applauded the Affordable Care Act (Obamacare) and former President Barack Obama’s efforts on health care, signifying a desire to build off of his accomplishments. “We owe a huge debt to President Obama. Because of the Affordable Care Act, health care coverage is better—more people can get the treatment they need and families are less vulnerable to the financial fallout from a serious illness or accident,” Warren said. “But there’s so much more we could do right now to bring down the costs of quality health care for every American.”  Warren tweeted her statement on Thursday morning, and Sanders promptly replied: “Thank you @elizabethforma. The momentum is on our side. Let’s make health care a right.”

Let Trump Continue To Fail To Appoint People -- There has been much moaning and wailing and gnashing of teeth by many commentators and politicians over the failure of President Donald Trump to appoint people to fill numerous now vacant positions within the executive branch of government, with the State Department often being put forward as one of many agencies with many empty chairs in official positions.  However, the other night I heard Lawrence O’Donnell make an interesting point: those empty chairs are being filled in the meantime by long-in-place civil servants who actually know what they are doing and are not Trump-loving hacks and fools.  In departments where he has made appointments, such as the EPA, his appointees have wreaked havoc and done mostly awful things. So, let us hope that he gets bogged down in tweeting and blocking possible candidates for these positions because they are insufficiently kowtowing to him.  That way we might have at least some parts of some government agencies run by non-crazy knowledgeable individuals. We can only hope.

Trump Quietly Nominates Mass Surveillance Advocate To “Protect” Your Privacy Rights -- Though outrage over mass surveillance swept the United States after Edward Snowden’s revelations in 2013, there is little discussion of these invasive practices just four years later. Amid this lack of attention toward the NSA, the president recently nominated a staunch advocate of mass surveillance to chair one of the few barriers standing between intrusive government spying and the American people’s privacy. The Privacy and Civil Liberties Oversight Board (PCLOB) was created in 2004 at the recommendation of the 9/11 Commission and was intended “to help the executive branch balance national security priorities with individual rights,” the Intercept reported earlier this year. However, as of March of this year, the board was down to just one part-time member, and this lack of personnel rendered it largely impotent.  Though the board had been deteriorating before Trump became president, it may now be further undermined as a result of his recent appointment. On August 25, the president announced his nomination of Adam I. Klein to chair the PCLOB.  Though the often loathed late Antonin Scalia was considered somewhat of a defender of the 4th amendment, Klein fails to offer a strong buffer between intrusive policies and the American people. Though Klein co-authored an advisory report for the incoming Trump administration advocating a balance between privacy and security, the paper criticized Edward Snowden and lamented the disintegration of trust in government his leaks helped to foster: “The post-Snowden backlash has impeded law enforcement and intelligence gathering, harmed the U.S. technology industry’s competitiveness in international markets, and created diplomatic friction with important allies. Most importantly, many Americans remain skeptical that their government respects their digital privacy.”

Internet Censorship Bill Would Spell Disaster for Speech and Innovation - EFF --There’s a new bill in Congress that would threaten your right to free expression online. If that weren’t enough, it could also put small Internet businesses in danger of catastrophic litigation. Don’t let its name fool you: the Stop Enabling Sex Traffickers Act (SESTA, S. 1693) wouldn’t help punish sex traffickers. What the bill would do (PDF) is expose any person, organization, platform, or business that hosts third-party content on the Internet to the risk of overwhelming criminal and civil liability if sex traffickers use their services. For small Internet businesses, that could be fatal: with the possibility of devastating litigation costs hanging over their heads, we think that many entrepreneurs and investors will be deterred from building new businesses online. Make no mistake: sex trafficking is a real, horrible problem. This bill is not the way to address it. Lawmakers should think twice before passing a disastrous law and endangering free expression and innovation. SESTA would weaken 47 U.S.C. § 230, as enacted by the Communications Decency Act (commonly known as "CDA 230" or simply “Section 230”), one of the most important laws protecting free expression online. You might remember the fight over the Communications Decency Act of 1996 (CDA), a law designed to put harsh restrictions on free speech over the Internet. The bill passed despite overwhelming opposition from Internet users, but with EFF’s help, the bill’s censorship provisions were gutted by the Supreme Court in 1997. One key piece of the bill that remained was Section 230. Section 230 deals with intermediaries—individuals, companies, and organizations that provide a platform for others to share speech and content over the Internet. Section 230 laid the groundwork for the explosion in U.S. Internet business that’s taken place over the past two decades.  Without Section 230, these businesses might have to review every bit of content a user wanted to publish to make sure that the content would not be illegal or create a risk of civil liability. It’s easy to see how such measures would stifle completely lawful speech.

Senate Democrats fight FCC plan to lower America’s broadband standards - Senate Democrats are fighting a Federal Communications Commission proposal that could lower America's broadband standards by redefining what counts as broadband Internet access.  Under standards imposed during the Obama administration, the FCC says that all Americans should have access to home Internet service offering speeds of at least 25Mbps downstream and 3Mbps upstream, as well as access to mobile Internet. When the FCC makes its annual judgment of whether broadband is being deployed to all Americans quickly enough, the commission thus analyzes whether all parts of the country have both fast home Internet and mobile service. But FCC Chairman Ajit Pai's proposal suggests that cellular Internet could be counted as a full substitute for home Internet access rather than a complement to it. Moreover, his proposal suggests that mobile wouldn't even have to meet the 25/3Mbps speed standard—instead, a 10Mbps/1Mbps mobile connection could suffice. By lowering the standards, the FCC could conclude that America's broadband problem has been solved and thus take fewer steps to promote deployment and competition.

Franken opposes Trump judicial nominee, setting up procedural clash - Sen. Al Franken is preparing to block the nomination of one of President Donald Trump’s circuit court nominees — a move that would trigger a standoff in the Senate over a century-old tradition that gives senators significant leverage over home-state judicial candidates. The Minnesota Democrat said in a statement Tuesday that he will not return a so-called blue slip for David Stras, who was nominated in May for a seat on the 8th U.S. Circuit Court of Appeals.  Stras’ legal decisions, professional experience and past statements, Franken said, raised concerns that he would be a “conservative jurist in the mold of Supreme Court Justices Clarence Thomas and Antonin Scalia” — which was enough for the senator to try to block his confirmation to the federal bench.  “Justice Stras’s professional background and record strongly suggest that, if confirmed, he would embrace the legacy of his role models and reliably rule in favor of powerful corporate interests over working people, and that he would place a high bar before plaintiffs seeking justice at work, at school, and at the ballot box,” Franken said in a lengthy statement outlining his opposition to Stras. Franken also took aim at the process by which Stras — who currently sits on the Minnesota Supreme Court — was selected. He argued that the White House had already settled on Stras before consulting with Franken about the vacancy. Though opposition to Trump’s judicial picks from Democrats is by no means unusual, Franken’s battle against Stras is poised to set up a major fight within the powerful Senate Judiciary Committee.  The blue slip process, a longtime Senate tradition, holds that the Judiciary Committee doesn’t hold a confirmation hearing for judicial nominees without permission from the candidate’s home-state senators, although that rule has been less adhered to for circuit court picks under previous administrations.

How Washington lobbyists fought flood insurance reform - The catastrophic weather in Texas has thrown the spotlight on the federal government’s troubled flood insurance program, which is nearly $25 billion in debt after huge payouts following Katrina, Sandy and other devastating hurricanes.But as Houston starts the long process of recovering, lobbyists in Washington have already maneuvered to slow lawmakers efforts’ to overhaul the National Flood Insurance Program and protect their industries’ profits. The powerful home builders’ lobby helped kill a proposal that would have phased out c overage for new construction in high-risk areas. The National Association of Realtors blocked an attempt to rein in discounted insurance rates that homeowners can get when their flood risk increases. And the American Bankers Association has warned of a “regional foreclosure crisis” if Congress axes coverage for homes with excessive claims. Lawmakers who want to reel in the program are finding that they must appease the influential industry groups whose support they need to move forward. "We want to have a vibrant construction industry," said Rep. Dennis Ross (R-Fla.), who's pushing for a greater private-sector presence in the flood insurance market. "We want to have a vibrant real estate industry. That's all great. But we're incentivizing building in high-risk areas, which is a moral hazard."

Harvey Could Bankrupt The Federal Flood-Insurance Program -- Hurricane Harvey may solve the auto industry’s inventory problem. But right now, it's about to create a giant headache for the federal government. Based on the latest estimates from Irvine, California-based CoreLogic, insured flood losses for homes in the affected areas of Texas and Louisiana could total between $6.5 billion to $9.5 billion. Since private insurers typically don’t provide personal flood insurance, all but $500 million of that will fall to the Federal Emergency Management Agency’s National Flood Insurance Program, or NFIP. According to the Street, if insured damages reach the high end of this range, it would totally deplete the $7.5 billion of cash and available credit available to the 49-year-old government program, which provides about 98% of residential flood insurance. The program is already about $25 billion in debt to the US Treasury Department and would need Congressional authorization for additional funding. To be sure, final totals could be much, much higher given the severity of the the “1-in-1000-year” flood. The potential funding shortfall could create problems if Congress doesn’t act quickly this month to shore up the financially-troubled flood-insurance program. As we’ve reported, Congress already has a full agenda in September – a month where lawmakers must pass a funding bill to keep the government open, and another to raise the debt limit and stave off a technical default on US debt. Initially, President Trump said he would force a government shutdown if Congress didn’t approve funding for his border wall in its next budget.However, it appears that he has backed away from this, as the Washington Post reported today that the administration has quietly notified Congress that the $1.6 billion in wall funding would not need to be included in the September continuing resolution.

Russian firm tied to pro-Kremlin propaganda advertised on Facebook during election -- Representatives of Facebook told congressional investigators Wednesday that the social network has discovered that it sold ads during the U.S. presidential campaign to a shadowy Russian company seeking to target voters, according to several people familiar with the company’s findings. Facebook officials reported that they traced the ad sales, totaling $100,000, to a Russian “troll farm” with a history of pushing pro-Kremlin propaganda, these people said. A small portion of the ads, which began in the summer of 2015, directly named Republican nominee Donald Trump and Democrat Hillary Clinton, the people said, although they declined to say which candidate the ads favored. Most of the ads, according to a blog post published late Wednesday by Facebook’s chief security officer, Alex Stamos, “appeared to focus on amplifying divisive social and political messages across the ideological spectrum — touching on topics from LGBT matters to race issues to immigration to gun rights.” The acknowledgment by Facebook comes as congressional investigators and special counsel Robert S. Mueller III are probing Russian interference in the U.S. election, including allegations that the Kremlin may have coordinated with the Trump campaign. President Trump has weighed in on special counsel Robert Mueller's investigation into Russian meddling in the 2016 election time and time again. Here's a look at how he can limit the probe, and what Congress is trying to do about it. (Jenny Starrs/The Washington Post) The U.S. intelligence community concluded in January that Russia had interfered in the U.S. election to help elect Trump, including by using paid social media trolls to spread fake news intended to influence public opinion.

Facebook Blames Russia To Deflect From Fraudulent Ad-Sales - Yesterday a new report proved (again) that Facebook cheats with its advertisement reach data. This explains why advertisements booked on Facebook have much less impact than Facebook claims and the paying customers assume. Only hours later the company launched a diversion campaign. Its purpose is to keep the media off the real scandal. The diversion claim, presented without evidence, is that a "Russian operation" bought influencing advertisements on Facebook aimed at the U.S. public. Here is the real scandal that Facebook tries to cover up. Facebook advertisement sales are based on systematically falsified data:Pivotal Research Group senior analyst Brian Wieser pointed out a large discrepancy between U.S. census data and the potential reach that the social network promises advertisers. On Tuesday, Wieser issued a note pointing out that Facebook's Adverts Manager tool promises a potential reach of 41 million 18-24 year-olds in the U.S., while recent census data said there only 31 million people living in the U.S. within that age range. Similar false claims are made by Facebook for other countries and categories: For advertisers trying to target Facebook users in the U.K., the company promises it could potentially reach 5.8 million 20-24 year-olds, 6.4 million 25-29 year-olds, and 5.2 million 30-34 year olds. When the last census was conducted in 2011, the U.K. only had 4.3 million 20-24 year-olds, 4.3 million 25-29 year-olds, and 4.1 million 30-34 year olds. Facebook makes enormous profits by claiming to know the users who use its "free services" and by selling this information in form of advertisement space. But most of the data sniffed off its users is useless junk and Facebook's claims of advertising precision, reach and impact are false.  The Facebook diversion is designed to take away media attention from its fraudulent ad-sales by attaching to partisan strive:Facebook Inc said on Wednesday it had found that an operation likely based in Russia spent $100,000 on thousands of U.S. ads promoting divisive social and political messages in a two-year-period through May. Another $50,000 was spent on 2,200 “potentially politically related” ads, likely by Russians, Facebook said.

Massive networks of fake accounts found on Twitter - Massive collections of fake accounts are lying dormant on Twitter, suggests research. The largest network ties together more than 350,000 accounts and further work suggests others may be even bigger. UK researchers accidentally uncovered the lurking networks while probing Twitter to see how people use it. Some of the accounts have been used to fake follower numbers, send spam and boost interest in trending topics. On Twitter, bots are accounts that are run remotely by someone who automates the messages they send and activities they carry out. Some people pay to get bots to follow their account or to dilute chatter about controversial subjects. "It is difficult to assess exactly how many Twitter users are bots," said graduate student Juan Echeverria, a computer scientist at UCL, who uncovered the massive networks.  The researchers are now asking the public via a website and a Twitter account to report bots they spot to help get a better idea of how prevalent they are. Many bots are obvious because they have been created recently, have few followers, have strange user names and little content in the messages. The network of 350,000 bots stood out because all the accounts in it shared several subtle characteristics that revealed they were linked. These included: tweets coming from places where nobody lives messages being posted only from Windows phones almost exclusively including quotes from Star Wars novels It was "amazing and surprising" to discover the massive networks, said Dr Shi Zhou, a senior lecturer from UCL who oversaw Mr Echeverria's research. "Considering all the efforts already there in detecting bots, it is amazing that we can still find so many bots, much more than previous research," Dr Zhou told the BBC. Twitter deserved praise for its work on finding and eliminating bots, he added, but it was clear that skilled hackers had found ways to avoid official scrutiny and keep the bots ticking over. The pair's most recent work had uncovered a bigger network of bots that seemed to include more than 500,000 accounts.

Wasserman Schultz Aide Pleads ‘Not Guilty’ As Prosecution Drops Hints About A Broader Probe Of Awan -  Former U.S. House IT aide Imran Awan pleaded not guilty Friday to federal charges that he and his wife lied on an application for a home equity loan, as prosecutors dropped hints about a broader probe of Awan and his family members related to their computer work in recent years for Rep. Debbie Wasserman Schultz (D-FL) and a series of other Democratic lawmakers in the Congress. A federal judge also agreed to return $9,000 seized from Awan when he was arrested at Dulles Airport in late July, as the feds and Awan’s legal team agreed to ensure that the money is used only to pay for the cost of Awan’s legal defense. While the existing case against Awan and his wife, Hina Alvi, is related to whether they did not tell the truth on a loan application to a Capitol Hill credit union – documents in the matter again suggested at a larger investigation, possibly relating to more than just matters of bank fraud. In a letter about evidence in the case, U.S. Attorney Channing Phillips described the probe as one that involved, “voluminous discovery,” citing items that were found in a Congressional office building back in April, which seemingly may have belonged to Awan.This "laptop bag" found in April could well be the piece of equipment that had drawn the interest of Rep. Wasserman Schultz earlier this year, when she verbally berated the Capitol Hill Police chief at a House budget hearing, demanding that an item be returned to her office.“I think you’re violating the rules when you conduct your business that way,” Wasserman Schultz said bluntly, as she told the chief that he should “expect that there will be consequences.”The chief said he was not returning the piece of equipment that officers had found, because it was part of an investigation, which he did not detail.From prosecutors, this evidence letter was the first official confirmation that there were items found on Capitol Hill which had a direct link to Imran Awan. Still unclear is what exactly that earlier investigation has uncovered.

Did Imran Awan Turn On Wasserman Schultz? New Report Suggests He Led Police To Her Laptop -- For months now various media outlets have speculated on whether Debbie Wasserman Schultz (DWS) and her now-indicted IT staffer may have colluded to conceal evidence potentially linked to the infamous 'DNC hacks.'  While Schultz and the DNC have maintained that the hacks were orchestrated by Russians from a remote location, others have argued that the stolen documents must have been taken by an insider with direct access to DNC servers.  Meanwhile, the mystery surrounding the ongoing controversy has only been amplified by the DNC's rather curious refusal to allow the FBI access to their servers after the supposed 'attacks.'But, according to a new report from The Daily Caller, even if Awan was originally acting to protect/extort DWS, that may have all changed on April 6, 2017 when he seemingly led U.S. Capitol Police directly to her laptop. A laptop that Rep. Debbie Wasserman Schultz has frantically fought to keep prosecutors from examining may have been planted for police to find by her since-indicted staffer, Imran Awan, along with a letter to the U.S. Attorney. U.S. Capitol Police found the laptop after midnight April 6, 2017, in a tiny room that formerly served as a phone booth in the Rayburn House Office Building, according to a Capitol Police report reviewed by The Daily Caller News Foundation’s Investigative Group. Alongside the laptop were a Pakistani ID card, copies of Awan’s driver’s license and congressional ID badge, and letters to the U.S. attorney. Police also found notes in a composition notebook marked “attorney-client privilege.” The laptop had the username “RepDWS,” even though the Florida Democrat and former Democratic National Committee chairman previously said it was Awan’s computer and that she had never even seen it.

Democrats Put Eric Holder, Best Friend of Wall Street Banks, in Charge of Winning Back Main Street America - The Democratic Party has put a man who favors Wall Street over Main Street in charge of overseeing its plan to retake red state America and a U.S. House majority. Eric Holder, the former U.S. Attorney General, is the chair of the National Democratic Redistricting Committee, which promises to unfurl “a targeted, state-by-state strategy that ensures Democrats can fight back” when the political maps are drawn for U.S. House and state legislative races for the decade of the 2020s. But Holder’s tenure at the Justice Department did little to help millions of Americans who lost their homes in the 2008 financial crash, when a speculative bubble fueled by the real estate industry and mortgage banks resulted in waves of foreclosures across the U.S. His prosecutors never put a single bank executive in jail. His touted financial fines ended up becoming corporate tax write-offs. The payments to those who never should have lost their homes amounted to two months rent, if they were received at all.     In the aftermath of an election where Hillary Clinton, rightly or wrongly, was pilloried for her connections to Wall Street titans, the Democrats have put a much more deeply entwined friend of big banks in charge of winning elections across middle America. “Holder just completed [a run] as one of history’s great double agents,” wrote Matt Taibbi in Rolling Stone this July. “For six years, while brilliantly disguised as attorney general of the United States, he was actually working deep undercover, DiCaprio in The Departed-style, as the best defense lawyer Wall Street ever had.”

Warren grills Trump’s antitrust pick over antitrust and lobbying: report - Sen. Elizabeth Warren (D-Mass.) grilled President Trump's pick to head the Justice Department's Antitrust Division during a meeting Wednesday, Reuters reported, citing a source familiar with the discussion.Warren put a "hold" on confirming Makan Delrahim last month, and it was not clear if her meeting with him on Wednesday has convinced her to move forward with his nomination as an assistant attorney general.In a Facebook post earlier this year, Warren said Delrahim's nomination signaled that Trump will "put the interests of giant corporations ahead of the American people." Delrahim, a former deputy assistant attorney general in the Antitrust Division, previously lobbied for companies pursuing mergers as a lawyer at the law firm Brownstein Hyatt Farber Schreck LLP. The Justice Department's Antitrust Division is responsible for overseeing and approving mergers between companies in order to promote business competition.  According to Reuters, Warren asked Delrahim how he would respond to political interference from the White House on antitrust decisions.  Delrahim said at his confirmation hearing earlier this year that he would not allow for political interference in the Justice Department's antitrust decisions.

Broker says she was fired for exposing fraud at Kidder Matthews -- Kidder Matthews, the top commercial real estate firm on the West Coast, is being sued by a former employee who alleges its brokers engaged in a scheme to defraud property owners and that higher ups knew about it and did nothing.Kidder Matthews CEO and Chairman Jeff Lyon strongly denied the allegations in the lawsuit, filed by former senior vice president and managing broker Vanessa Herzog, who was fired in July.Kidder Matthews last week filed its own lawsuit in King County, Wash., asking that Herzog stop telling Kidder clients about her complaint. Herzog's lawsuit says two Kidder senior vice presidents and managing partners, Matt Wood and Todd Clarke, violated listing agreements and state law to collect tens of thousands of dollars in unearned commissions on leasing agreements. The lawsuit also lists Wood and Clarke's boss, Brian Hatcher, as well as Lyon.At issue in Herzog's filing is how commercial real estate commissions are split.Herzog and Clarke represented property owners, the lawsuit states. When those brokers lure a tenant to a property, they split a commission equal to 5 percent of the lease value, which is paid by the property owner.However, if another broker brings a tenant to the property, the tenant's broker receives a 5-percent commission, while the property owner's brokers split 2.5 percent. The property owner then would pay a total commission of 7.5 percent. The lawsuit alleges Clarke fraudulently added Wood to the listing agreement as the tenant's representative, which triggered the higher commission rate, and also lowered the amount Herzog was entitled to receive.

Jamie Dimon’s $13 Billion Secret—Revealed - Vanity Fair -- In November 2013, JPMorgan Chase, the nation’s largest bank, agreed to pay a then-record $13 billion fine to federal and state authorities in order to settle claims that it had misled investors in the years leading up to the financial crisis. JPMorgan Chase’s settlement raised many eyebrows on Wall Street. The huge settlement appeared inconsistent with the oft-repeated narrative of the bank’s heroism during the crisis. JPMorgan Chase and its C.E.O., Jamie Dimon, after all, were appropriately lauded for swooping in to save both Bear Stearns and Washington Mutual, acts of financial patriotism that certainly helped prevent the U.S. economy from further doubling over upon itself.  But people wondered why one of Wall Street’s ostensible white knights would pay $13 billion—$9 billion of its shareholders’ cash, plus another $4 billion in mortgage relief—in a government case. During a conference call on the morning that the settlement was announced, Mike Mayo, a veteran Wall Street analyst, asked Dimon and bank C.F.O. Marianne Lake the question that appeared to be on the minds of everyone in the financial-services industry: “How is it that JPMorgan got front and center with this issue? That it’s the Department of Justice working out an agreement with JPMorgan when JPMorgan performed so well during the crisis, yet here’s the one bank that’s paying a $13 billion fine?” Without missing a beat, Dimon retorted, “Mike, you’ve got to ask them, O.K.?” In other words, Dimon seemed to be saying to Mayo, as he later put it in Davos, that the whole thing was “unfair.” A number of clues about what had forced Dimon’s hand, however, began emerging soon after the conference call. As I reported in The Nation in 2014, JPMorgan Chase’s settlement came at the end of an intense series of negotiations with a wide range of government officials. Perhaps the most pivotal moment in the conversations occurred in September 2013 when D.O.J. lawyers shared with Dimon and his attorneys a draft of a 92-page civil complaint that Benjamin B. Wagner, the then U.S. attorney in the Eastern District of California, and his colleagues were prepared to file in federal court. The draft complaint—based upon hundreds of thousands of subpoenaed internal JPMorgan documents; and interviews with its bankers, employees in its mortgage-backed securities division, and third-party mortgage originator—alleged that the bank’s due-diligence process had been subverted, and ignored, during the years before the crisis. In Wagner’s narrative, the bank was not nearly the white knight of Wall Street.

B of A executive spared any fine after bank's $415M penalty -- Bank of America’s Merrill Lynch unit paid $415 million last year to resolve allegations that it misused customers’ cash. On Friday, the U.S. Securities and Exchange Commission finally got around to settling a case against the former bank executive who it said was ultimately responsible. His penalty was considerably lower: nothing.William Tirrell, the former head of regulatory reporting at Merrill Lynch, negligently caused the firm to violate securities rules, the SEC said in an order Friday. The regulator ordered Tirrell to “cease and desist” from any future transgressions.“The terms of the settlement — no fine, no suspension, no penalty — speaks for itself,” Steven Witzel, Tirrell’s attorney, said in an emailed statement. “After four years of investigation by the SEC, Mr. Tirrell is more than ready to put this matter behind him and move on with his life.” SEC spokeswoman Judith Burns declined to comment. The agency didn’t issue a press release announcing the settlement with Tirrell.

Senate panel may again probe Wells scandals - — Wells Fargo’s continued missteps following revelations last year that the bank created millions of unwanted accounts for customers may lead to additional hearings on Capitol Hill. Democrats on the Senate Banking Committee sent a letter in August to panel Chairman Sen. Mike Crapo, R-Idaho, requesting a hearing on the bank. Republicans who hope to deregulate the financial industry have been reluctant to hold additional hearings, but that sentiment might be changing. Crapo told Sen. Elizabeth Warren, D-Mass., on Thursday that her request for the panel to hold another hearing is “under consideration.” “I am in the process personally of gathering information from Wells Fargo” and from regulators on recent allegations against the bank, Crapo said.  Wells recently revealed it had opened 1.4 million more unwanted accounts than originally estimated and that it had also charged 800,000 customers for auto insurance they did not want or ask for. Crapo called the fake accounts “inexcusable.”

Put Them in Prison  - I know that it's very hard to make these cases and all the other excuses we've heard why the inherently criminal class that is our financial services sector cannot be prosecuted for their various and sundry offenses. And I know that it doesn't help with the civility problem we have in our politics to call names. But you'll pardon me for saying that someone ought to bury the fcking rat bastards at Wells Fargo under the goddamn jail. From the AP: The scope of Wells Fargo's fake accounts scandal grew significantly on Thursday, with the bank now saying that 3.5 million accounts were potentially opened without customers' permission between 2009 and 2016. That's up from 2.1 million accounts that the bank had cited in September 2016, when it acknowledged that employees under pressure to meet aggressive sales targets had opened accounts that customers might not have even been aware existed.  I'm no lawyer, although I occasionally act as legal counsel in the shebeen here, but it seems to me that what we're dealing with here are 3.5 million individual acts of fraud by Wells Fargo. They opened fake accounts with the real names of their customers, and then charged those customers for the privilege of being defrauded. This seems neither difficult nor complicated. It seems to me that you'd have to transport the RICO indictment on this criminal enterprise by barge. Instead, Wells Fargo paid a $185 million fine to the regulators, and it settled a class-action suit brought by its universe of marks to the tune of $142 million. Oh, and lest we forget:The scandal was the biggest in Wells Fargo's history. It cost then-CEO John Stumpf his job, and the bank's once-sterling industry reputation was in tatters.   I think I speak for the entire class when I say that I could care less about the bank's "once sterling reputation."

The misguided appeal of risk-based capital | American Banker -  The supplementary leverage ratio is a convenient target for critics. The proponents of risk-based capital allege that the leverage ratio is too crude. They oppose its eliminating risk-adjusted risk weights, and say it should be modified to avoid a list of horrible consequences, including financial instability and undermining American competitiveness.Of course, a perfect risk-based measure is preferable to an admittedly imperfect leverage ratio. But this is an example of the “nirvana fallacy.” The problem is there is no perfect risk-based measure. The real comparison is between a failed risk-based capital system and a less than perfect but still useful leverage ratio. In reality, risk weights have more to do with lobbying and politics than economics. They are backward-looking static measures based on problematic fantasy finance models. They ignore rare, extreme economic events — also known as “black swans” — while seeking to quantify the unquantifiable nature of uncertainty. Furthermore, explaining the past is not the same as predicting the future. Unfortunately, the risk weights at the heart of risk-based capital regimes are rarely increased to reflect changing conditions until it is too late. Just look at the supposedly safe structured finance products that collapsed during the financial crisis. Are we so sure that risk-based capital measures will perform better the next time around? Finally, risk-based capital is susceptible to gaming by taking risks not recognized by models. “Systemically important financial institutions” will crowd into the highest-risk assets within each supposedly safe risk class to achieve higher nominal non-risk adjusted returns. They will also engage in unproductive regulatory arbitrage to develop products exploiting the rules.

Fed dodges key decision on faster payments -- Amid the push to build a faster, more secure U.S. payment system, the Federal Reserve is sidestepping a key decision that divides the nation’s big banks from their smaller peers. The issue is whether the Fed should have a substantial operational role in a modernized system, or should instead defer largely to the private sector. Small banks and credit unions want the Fed to take a more active stance, but that idea has not been embraced by large institutions.In a 19-page report released Wednesday, the Fed said that starting in the second half of 2017, it will assess a range of options regarding its operational involvement. It did not lay out a timetable for making a decision.  “The Fed’s trying to steer a very careful path,” said Lars Davies, CEO of Kalypton Group, a U.K.-based payment technology firm. “It certainly hasn’t sided one way or the other.” The Fed’s latest missive follows a series of recent recommendations by a task force — its members were drawn from banks, consumer groups, technology firms and other stakeholders — that was convened by the U.S. central bank in 2015.Earlier this summer, the task force established a goal that by 2020, anyone with a U.S. bank account should be able to receive payments that are highly secure and delivered in something close to real time.The industry-led group also recommended that the Fed develop new capabilities, enabling two banks to settle up with each other more frequently so that transactions can be executed around the clock and every day of the year. On Wednesday, the Fed embraced the recommendation regarding settlement capabilities, which has proven less controversial than the question of the central bank’s other potential operational roles.

How banks are coping with New York’s cybersecurity rules - Theodore Tomita has plenty to say about the New York State Department of Financial Services’ new cybersecurity rule, which began to take effect last week, and little of it is complimentary. “It was a complete and utter waste of time,” said Tomita, a senior vice president and the chief technology officer at Catskill Hudson Bank in Monticello. “I would love to have about 15 minutes with [Gov. Andrew] Cuomo to thank him for the 4,000 phone calls I’ve received from every fly-by-night company that says they can be our information security officer. Many of them have no idea what they’re doing and some are fraud peddlers.” The first phase of compliance, which ended August 28, required all banks to have a cybersecurity policy in place. The next phase, which ends in March, requires banks to meet several technical requirements, including implementing multifactor authentication and periodic penetration testing and vulnerability scanning. “That due date is going to come up very quickly and those requirements take much longer to implement,” said Tomita, who also holds the titles of information security officer and physical security officer at the $426 million-asset Catskill. While his assessment is unusually blunt, it’s fair to say the New York law has forced affected banks to rethink many areas of their technology and security infrastructure. Some of the requirements — such as vulnerability scanning and penetration testing — are already common practice and recommended by federal security guidelines. In other areas, such as the need to implement multifactor authentication or stronger controls over access to nonpublic information, the New York rules are stricter than federal guidelines and some banks are struggling to comply.

What banks can learn from a cryptocurrency's bug bounty program - Financial institutions are prime targets for hackers, but there may be one species of prey even more appealing: digital currencies.The value not only of bitcoin but of the entire market for blockchain assets has exploded in the past six months, and one of the upstarts is taking no chances that its system can be compromised.The creators of Dash, a bitcoin rival, have hired the San Francisco-based security company Bugcrowd to run a "bug bounty" program on its behalf, enticing independent security researchers to pore over the cryptocurrency's code and paying them for every flaw they find."As an open-source project, all of our code is available to be audited by anyone. But this will really bring a set of highly professional eyes to the code and make sure that it is as robust as possible," said Ryan Taylor, CEO of Dash's core team, which is run like a for-profit startup.Talk to cryptocurrency insiders like Taylor—individuals who have helped create and secure these unique pieces of software—and they will tell you that banks could learn a lot from open-source projects like Dash about how to build applications and secure their networks. After all, the time for pretending that it is possible to make an app or network impregnable from the get-go—if it ever existed—is long gone. The new security paradigm is one of "persistent threats," in which the safest assumption is that a malicious actor has already penetrated your system.

 States modernize licensing system as more fintechs eye bank charter — State regulators are modernizing their common licensing platform for nonbank financial institutions, hoping the update will help convince wary fintechs that they don’t need to pursue a national charter being developed by federal regulators. “We're trying to remove the friction from the system for both the regulators and the industry,” William Matthews, executive vice president with the Conference of State Bank Supervisors, said in an interview with American Banker. The end result will be that the “approval process goes faster,” and the industry “can get their applications processed more quickly and more efficiently,” he added. The state regulatory trade group intends to make a number of changes to its National Multistate Licensing System, a platform that was originally developed for mortgage originators and then extended to companies like payments processors and online lenders. First, the new platform will be customized for the different types of companies applying online. The consumer-facing website that presents licensing and other types of information on companies will also become more user-friendly. To make the application process more efficient for state regulators, the licensing system will use data analytics tools to flag riskier companies, based on various data points such as criminal records, credit scores and enforcement action history.  But the states also hope to turn the platform into a new tool for coordinating examination between states. It will allow examiners to plug in the data and share it automatically with other regulators.

Regulatory sandboxes can help states advance fintech --Fintech startups are burdened with a fractured and redundant regulatory system.  Not only can it take several months to obtain regulatory approval to operate a fintech startup in just one state, but it can cost a startup thousands of dollars in fees, compliance costs and legal work. Launching a product nationwide is harder still. Entrepreneurs navigating our 50-state licensing regime commonly expect two years of frustration and expenses in the millions.  Such delay and expense is unacceptable in an industry where today’s startup ideas quickly become yesterday’s news and companies have limited capital. Many startups forego the licensing process altogether and hope they don’t get caught. Others move overseas.  In other countries, there is a model that appears to be working to foster innovation by easing some of the regulatory burdens: sandboxes. In sandboxes, startups can launch products on a limited scale to real consumers without incurring the regulatory costs that would otherwise be imposed. This environment is important for early-stage entrepreneurs who do not have access to legal counsel to navigate the regulatory process. Furthermore, successfully testing a product facilitates a company’s efforts to raise the capital necessary for an expanded launch of the tested product.

 US Bitcoin Exchange Coinbase Hits 10 Million Users - After two (and soon three) "generational" market crashes, Joe Sixpack may have lost interest in the stock market (or at least in single names, the transfer of bagholder rights from institutions to retail investors via ETFs is doing just fine), but when it comes to chasing torrid, upward price momentum, US retail investors are doing their best frenzied Chinese housewife impression now that they have discovered the next big bubble thing, and it's called bitcoin. And nowhere is America's sudden infatuation with cryptocurrencies such as bitcoin, ethereum, litecoin and all other "coins" which can make (or break) a hedge fund's annual return in days if not hours, more obvious than on Coinbase, the US bitcoin exchange, which has just hit a remarkable 10 million registered users, all of whom are there for just one thing: to trade, but mostly buy, crypto currencies. The San Francisco startup has seen tremendous growth in 2017, adding thousands of users per day and handling increasing levels of trading volume. Last month, CEO Brian Armstrong announced that the company had raised $100 million during its latest funding round, giving the company a valuation of $1 billion, making it first “bitcoin unicorn” according toCryptocoinsnews. A few weeks later, following the latest burst higher in bitcoin, Coinbase has surpassed 10 million registered users. In the last three weeks of August, the bitcoin exchange added an astonishing 800,000 users as the bitcoin price briefly rose above $5,000. According to data from the Coinbase website, the exchange and wallet service has also recently surpassed $20 billion in total volume.

The virtual currency boom echoes dotcom fever - Izabella Kaminska - Did we learn anything from the failures of the internet boom? Apparently not. In what is looking increasingly like a new incarnation of dotcom fever, celebrities are endorsing virtual currency systems. Heiress and reality TV star Paris Hilton tweeted this week that she would be backing fundraising for LydianCoin, a digital token still at concept stage. It offers redemption against online artificial intelligence-assisted advertising campaigns. Baroness Michelle Mone, a businesswoman, announced she would be accepting bitcoin in exchange for luxury Dubai flats. What is particularly striking about this path to riches is its “growing money on trees” character. While the internet boom was dominated by IPOs, linked to a potentially profitable venture to come, this time it is “initial coin offerings” igniting investor fervour. Most ICOs do not aspire to deliver profits or returns. Indeed, from a regulatory standpoint, they cannot — most lawyers agree doing so could classify them as securities, drawing regulatory intervention which would force them into stringent listing processes.  That opinion was substantiated in July when the US Securities and Exchange Commission warned: “Virtual coins or tokens may be securities and subject to the federal securities laws” and that “it is relatively easy for anyone to use blockchain technology to create an ICO that looks impressive, even though it might actually be a scam.”

New bill would make small bitcoin purchases tax-exempt - Since the Internal Revenue Service declared virtual currency to be a form of property in 2014, all bitcoin transactions have become a tax reporting nightmare. Now, two Congressmen are proposing to make cryptocurrency more viable by easing up on those requirements. A bill introduced Thursday by Reps. Jared Polis, D-Colo., and David Schweikert, R-Ariz., would allow cryptocurrency users to make transactions of up to $600 without paying taxes. In addition, the legislation would require the Treasury Department to create a process for virtual wallets to report gains and losses directly to the IRS, just like stock brokers do for their clients.

Fintechs’ defense of screen scraping is shortsighted - By design, any practice that requires a customer to simply hand over his or her online bank credentials to a third party is a terrible idea. But a growing number of fintech firms are rallying together to try to preserve that very practice.To be sure, screen scraping — which allows data aggregators to pretend to be an online banking customer in order to gain account entry — has been necessary with banks widely refusing direct access for third-party providers through application programming interfaces. But fintechs’ arguments in defense of screen scraping don’t hold water as regulators in the U.S. and abroad weigh policy decisions to expand API usage and give customers more choice and control of their data. The practice of scraping pages is both inefficient and insecure. There is no uniform way to carry out a screen scrape since every bank website is different. Furthermore, screen scraping opens up risk to the customer who exposes a secret bank password to use another third-party service. While there are no known hacks related to screen scraping, the risks for fraud are mounting. Over the last few years, the rates of identity and account fraud as well ascybercrime have soared around the world. Some bank customer agreements even say it is illegal to share login credentials with third-party services. In such instances, it becomes hazy around what company is responsible if and when the customer’s account becomes compromised through screen scraping.

A massive Equifax breach could impact half of the U.S. population. -  A massive cyber security incident at Equifax — one of the largest credit reporting agencies in the United States — may have exposed private information belonging to 143 million people — nearly half of the U.S. population.  The breach, which was discovered July 29, includes sensitive information such as social security numbers, birthdays, addresses and in some instances, driver's license numbers. The agency said 209,000 credit card numbers were exposed in the breach, which includes customers in Canada and the United Kingdom. Adding to the scandal, three of the company's top executives sold Equifax shares just days after the breach was discovered. The breach was not publicly disclosed until Thursday, more than six weeks later. John Gamble, chief financial officer; Jospeh Loughran, president of U.S. information security and Rodolfo Ploder, president of workforce solutions solutions sold shares days after the company was aware of the breach, according to SEC filings. Bloomberg, which first reported this, estimated the total value of shares sold to be $1.8 million. The FBI is actively investigating the cyber incident and Equifax has been cooperating, law enforcement sources told NBC News. Equifax did not immediately respond to NBC News' request for comment regarding the stock sales. The irony: Equifax is the agency many people use to guard against identity theft and one that businesses turn to when verifying a person is who they say they are. Now, with the private information in the hands of cyber thieves, customers are being placed in a difficult position.  "Equifax is tasked with actually protecting this information in the form of identity theft protection and here we are with almost half of the country's population being affected," Robert Siciliano, CEO of told NBC News.

Equifax says 3 top execs ‘had no knowledge’ of a massive security breach when they sold nearly $2 million in shares after the hack was discovered - Equifax said three top executives who sold nearly $2 million in company stock before a massive security breach was announced "had no knowledge" of the incident beforehand, according to an emailed statement from the credit-monitoring agency. "The three executives who sold a small percentage of their Equifax shares on Tuesday, August 1, and Wednesday, August 2, had no knowledge that an intrusion had occurred at the time they sold their shares," the statement said, hours after Equifax announced that 143 million people in the US were affected by the security breach that took place from mid-May to July 2017. The executives, which include Equifax CFO John Gamble, president of US information solutions Joseph Loughran, and president of workforce solutions Rodolfo Ploder, sold shares days after Equifax learned of the breach on July 29, Bloomberg's Anders Melin reported.Equifax shares fell more than 6% in after-hours trading on Thursday following the announcement.  The company said "criminals exploited a U.S. website application vulnerability," to access the personal details, including names and social security numbers of 143 million people. Credit card numbers for about 209,000 people, and certain documents for another 182,000 were also accessed.

Equifax Lobbied To Kill Rule Protecting Victims Of Data Breaches - If you want to know if you were one of the 143 million people whose data was breached in a hack of Equifax’s data, the company has a website you can use to find out — but there appears to be a catch: To check, you have to agree to give up your legal right to sue the company for damages. The outrage that clause has now generated could complicate the company’s efforts — backed by Republican lawmakers — to block an imminent rule that would ban companies from forcing customers to agree to such provisions.  On Friday, social media users spotlighted fine print on Equifax’s website that appears to force users to agree to waive their class action rights if they use the company’s website to see if their personal data was exposed by the recent hack. It is precisely the kind of arbitration clause that a pending Consumer Financial Protection Bureau (CFPB) rule is designed to outlaw — if Republicans and the Trump administration allow it to go into effect as scheduled later this month.  Federal documents reviewed by International Business Times show that in response to that 2016 rule, the Consumer Data Industry Association (CDIA) — which says it is “the trade association which represents Equifax” — pressed regulators to back off the proposed prohibitions, saying the regulations would subject data companies to tough penalties if during a class action suit they were found to have broken the law.  In one section of the letter, CDIA declares that federal regulators “should exempt from its arbitration rule class action claims against providers of credit monitoring products.” The letter asserted that allowing customers to sue companies “would not serve the public interest or the public good” because it could subject the companies to “extraordinary and draconian civil liability provisions” under current law. In another section of the letter, Equifax’s lobbying group says that a rule blocking companies from forcing their customers to waive class action rights would expose credit agencies “to unmanageable class action liability that could result in full disgorgement of revenues” if companies are found to have illegally harmed their customers.Equifax’s lobbying group argued against the prohibition even as it acknowledged that a 2015 government study found “that credit reporting constituted one of the four largest product areas for class action relief” for consumers. Consumer groups countered the claims of CDIA and other rule opponents by saying the ability to file suit is necessary to protect Americans’ legal rights.

The Equifax breach: A much needed catastrophe - In a shockingly understated comment on what is probably the largest data breach in history, Equifax’s CEO Richard Smith said, “This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. I apologize to consumers and our business customers for the concern and frustration this causes."  Piling insult on injury, Equifax is now in the midst of a PR disaster as the company is only divulging whether a person’s PII has been breached by asking them to divulge their PII, enrolling in Equifax’s Trusted ID Premier service and incredibly, waiving the ability to bring or participate in a “class action, class arbitration or other representative action.” This may be very wishful thinking on behalf of Equifax — a proposed class action was filed last night over a breach that affects up to 143 million U.S. consumers.  But it's not just Equifax that needs to worry. The incident can and should be a turning point for the financial services industry that it needs to end its reliance on static personal identifiers like Social Security numbers and birth dates.   Ahead of the Target data breach of November 2014, consumers with crystal balls could have avoided shopping at the store, but it's a nigh impossible task for any banked consumer to hide from the three major credit bureaus.  And the size and frequency of data breaches has accelerated to a point where it could be argued that consumers see this as the new normal. Even so, the Equifax breach may be so significant in scale and reach — affecting up to 44% of the U.S. population — that it does actually precipitate a change in the way that PII is protected and stored.

Equifax Hit With $70 Billion Lawsuit After Leaking 143 Million Social Security Numbers - mOne day after Equifax announced (more than one month after it itself had learned) that its systems had been hacked, resulting in up to 143 million social security numbers, names, addresses, driver’s license data, birth dates, some credit card numbers and pretty much all other critical personal data being leaked and currently for sale somewhere on the dark web, the company whose job is, ironically, to protect the credit and personal information of hundreds of millions of Americans has been hit with a monster class-action lawsuit seeking as much as $70 billion.In retrospect, we find it surprising that it wasn't multi-trillion lawsuit in light of the galactic stupidity exhibited by a company whose server apparently had zero firewalls from the internet and where any hacker could get access to the most confidential information available.And while for the most part class action lawsuits are filed by ambulance-chasing lawyers seeking a recovery for a class of plaintiffs in exchange for a juicy 25-40% of the final amount, in this case In the complaint filed in Portland, Ore., federal court has every single merit to ultimately crush Equifax for what is nothing less than unprecedented carelessness in handling precious information.In the lawsuit, plaintiffs alleged Equifax was negligent in failing to protect consumer data, choosing to save money instead of spending on technical safeguards that could have stopped the attack, Bloomberg reports. Imagine how much angrier they would be if they found that instead of "saving" the money, the company used it instead to buy back its own stock (in this case from selling executives).

Seven aftershocks of the Equifax breach: What bankers need to know - For many people, the news late Thursday that Equifax was hit with a data breach that may have compromised personal data of 143 million U.S. consumers brought on a heavy case of data breach fatigue. It felt like one more in an absurdly long string of massive data breaches that has included Yahoo, Google, Verizon, the IRS, the Department of Homeland Security, Anthem, Target, Neiman Marcus, JPMorgan Chase, Home Depot and too many others. Equifax itself has been breached four times in the last two years. But this breach looks to be a bit more severe than most of these others and it will have consequences in multiple areas. Here's a rundown.

  • Identity theft. Social Security numbers, birth dates, addresses and, in some instances, driver's license numbers for 143 million people were exposed in the breach, in which criminals exploited a website application vulnerability to gain access to Equifax files. In addition, credit card numbers for about 209,000 U.S. consumers and certain dispute documents with personal identifying information for roughly 182,000 U.S. consumers were vulnerable. Equifax says the unauthorized access occurred from mid-May through July 2017.
  • New account opening. This breach heightens the risk of fraudulent account openings at a time when banks and fintech companiess are increasingly allowing consumers to open new accounts on mobile devices in faster time frames — often in less than 10 minutes.
  • Authentication. This incident may call into question the industry's dependence on consumer data for authentication.
  • Lawsuits. Within 24 hours of Equifax's announcement, it was slapped with a class-action lawsuit from two Oregon residents, Mary McHill and Brook Reinhard, who filed on behalf of all 143 million victims and said they viewed this as a "teachable moment" to induce Equifax to finally adopt adequate safeguards to protect against this type of cyberattack in the future.
  • New credit cards. Compared to other large-scale credit card data breaches, the 209,000 card numbers exposed in this breach are small potatoes. Still, it can cost $5 or more to issue each new credit card. It's possible banks will sue Equifax to recoup these costs.
  • Third-party vendor risk. Under New York's new cybersecurity rules for banks, by March 2019, state-regulated banks will have to have in place a series of safeguards for third-party vendors that have access to their networks or to whom they provide data, Newman pointed out.
  • Equifax's future. Thursday was a dark day for Equifax. Reputationally, a breach of this scale for a company that provides identity theft protection is deadly. Its stock price tumbled on Friday.

Equifax breach may kill repeal of CFPB mandatory arbitration rule — The massive breach at Equifax is likely to hurt — and may ultimately doom — efforts by Republicans to overturn the Consumer Financial Protection Bureau’s rule banning mandatory arbitration clauses.  In order to compensate potential victims of the breach, which compromised the personal data of more than 143 million consumers, Equifax is offering free credit monitoring services through its TrustedID program as protection. But keen observers rapidly figured out that the “free” service came with catch — a mandatory arbitration clauses that would prevent consumers from filing a class action suit against Equifax for using the service. (The arbitration clause would not cover damage from the breach.) The company later changed gears, saying late Friday that customers signing up for the service would not waive the right to a class action suit. But by then the damage was already done.  That clause was picked up by Senate Democrats, who said it was exactly why the CFPB’s rule, finalized in July, should not be overturned by Congress.  “If Equifax is genuine about wanting to protect customers, it must remove forced arbitration immediately from TrustedID and any other services offered to victims of the data breach,” Sen. Sherrod Brown, the top Democrat on the Senate Banking Committee, said in a statement earlier on Friday. Sen. Elizabeth Warren, D-Mass., blasted the clause on her Twitter account, noting that the “new rule would stop companies like Equifax from avoiding legal accountability like this — as long as [the] GOP doesn’t reverse it.”  The Equifax revelations come at exactly the wrong time for Republicans, who had been hoping as late as Thursday to rapidly push ahead next week on a vote to overturn the rule. Under the Congressional Review Act, Republicans just need a majority vote to repeal a rule within 60 legislative days.  Senate Banking Committee Chairman Mike Crapo, R-Idaho, sounded upbeat earlier in the week about the chances for doing so despite signs that there may not be enough GOP votes. “I think the answer is yes,” Crapo told reporters Thursday when asked if he thinks Republicans have the votes necessary to overturn the CFPB’s rule. “I would like to do it as soon as possible and that is my expectation.” One problem, however, is that it is unclear exactly when that 60-day legislative calendar ends. Some estimates say that deadline is as early as mid-September, while others say it is more likely October or even possibly early November.

CFPB arbitration rule will still pose costs to consumers - It is tough for anyone to mount strong opposition to the CFPB’s arbitration rule, particularly as reports continue about the misdeeds at Wells Fargo, including the bank’s admission that it forced borrowers to pay for auto insurance they did not need. Although Senate approval of the rule remains uncertain, banks and other lenders should still prepare for it to take effect. Meanwhile, although the new limits on arbitration may seem like a win for consumers in terms of expanding the legal options available to pursue financial institutions for misconduct, consumers should prepare for higher costs as a result of the rule. This is especially true in the current deregulatory environment. In many respects, complying with the rule will be relatively straightforward. Providers of consumer financial products and services will need to amend their form consumer contracts, so that they do not prohibit class action litigation, and ensure compliance with new associated reporting requirements regarding transparency in arbitration. Going forward, banks will also have to consider whether any modifications to their products or services trigger the need to amend agreements that existed before the effective date of the rule (the CFPB is seeking to prevent banks from circumventing the rule through reliance on existing agreements). But there is another layer of complexity, for which preparation is much more difficult. The CFPB’s rule would likely lead to the filing of more class actions in any economic or political environment. But in this era of deregulation, it could have a combustible effect. The Trump administration and GOP-controlled Congress aim to weaken the CFPB’s enforcement powers as part of a larger deregulatory effort. If that occurs, plaintiffs may have a better chance of convincing courts that their class action, versus government action, is the superior method of prosecuting claims. Further, as banks self-regulate according to their own standards in a deregulated environment, market inconsistencies and consumer uncertainty may result in yet more litigation.

CFPB needs more than a caretaker to succeed Cordray - There are widespread rumors that Consumer Financial Protection Bureau Director Richard Cordray plans to leave the agency within a few weeks to run for governor of Ohio. There are indications that, if that happens, the administration may appoint Treasury Secretary Mnuchin to lead the agency while he continues his full-time job.While Mnuchin could bring in a strong deputy director and senior staff to run the organization on a day-to-day basis, neglecting to appoint a full-time director could shortchange efforts to improve the bureau’s transparency and undertake other reforms that are needed in the post-Cordray era.The need to reform the CFPB in its  form, function, structure and transparency under new leadership is significant. The development of the CFPB requires big-picture planning that has been largely lacking to date. The agency has developed as it has operated; it has never undergone a full top-to-bottom review of its form and structure.  A new director should consider reforming almost every aspect of the agency, including its structure, staffing, how it examines financial institutions and the type of enforcement actions that it brings. Engaging in this type of analysis and reform will take time and focus, and only a full-time director would have the bandwidth to work on this in addition to running the organization on a day-to-day basis. Even aside from any long-range thinking, the challenges just of running the organization on a day-to-day basis are going to be significant. … In other words, even with a strong, empowered staff, a caretaker director will not have the bandwidth to address all the day-to-day challenges facing the agency and have the time to investigate and implement all the long-term structural changes that the agency needs. In addition, having the Treasury secretary serve as the bureau’s director could conflict with long-term concerns about the CFPB.

CFPB sets loan limits for high-cost mortgages -- The Consumer Financial Protection Bureau set its 2018 thresholds for high-cost mortgages regulated under the Home Ownership and Equity Protection Act. The HOEPA loan threshold rose slightly to $21,032, from $20,579. The adjusted points and fees dollar trigger for high-cost mortgages in 2018 will be $1,052, up from $1,029, according to a final rule filed in the Federal Register this week.

CFPB makes TILA annual threshold adjustments - The CFPB today published a final rule revising dollar amounts for certain regulations falling under Regulation Z that implement the CARD Act, HOEPA and the ability-to-repay/qualified mortgage provisions of the Dodd-Frank Act. All adjustments will be effective Jan. 1, 2018.  The CFPB is required to annually adjust certain threshold amounts within various rules based on the percentage change in the consumer price index. Specifically, for open-end consumer credit plans under the Truth in Lending Act, the threshold that triggers requirements to disclose minimum interest charges will stay the same at $1 in 2018. For open-end consumer credit plans under the Credit Card Accountability Responsibility and Disclosure (CARD) Act amendments to TILA, credit unions should note that the penalty fees remain unchanged for 2018: $27 for the safe harbor for a first violation penalty fee and $38 for the safe harbor for a subsequent violation penalty fee.  For Home Ownership and Equity Protection Act (HOEPA) loans, the adjusted total loan amount threshold for high-cost mortgages in 2018 will be $21,032, up from last year's $20,579. The adjusted points and fees dollar trigger is also increasing from the current $1,029 to $1,052.  For purposes of determining whether a covered transaction is a QM, the total points and fees charged may not exceed the threshold set for the size of the loan under the rule:

  • for a loan amount of $105,158 or more, 3 percent of the total loan amount;
  • for a loan amount of greater than or equal to $63,095 but less than $105,158, $3,155;
  • for a loan amount of greater than or equal to $21,032 but less than $63,095, 5 percent of the total loan;
  • for a loan amount of greater than or equal to $13,145 but less than $21,032, $1,052; and
  • for a loan amount of less than $13,145, 8 percent of the total loan amount.

 NYC Commercial Real Estate Sales Plunge Over 50% As Owners Lever Up In The Absence Of Buyers - So what do you do when the bubbly market for your exorbitantly priced New York City commercial real estate collapses by over 50% in two years?  Well, you lever up, of course.  As Bloomberg notes this morning, the 'smart money' at U.S. banking institutions are tripping over themselves to throw money at commercial real estate projects all while 'dumb money' buyers have completely dried up.A growing chasm between what buyers are willing to pay and what sellers think their properties are worth has put the brakes on deals. In New York City, the largest U.S. market for offices, apartments and other commercial buildings, transactions in the first half of the year tumbled about 50 percent from the same period in 2016, to $15.4 billion, the slowest start since 2012, according to research firm Real Capital Analytics Inc.At the same time, the market for debt on commercial properties is booming. Investors of all stripes -- from banks and insurance companies to hedge funds and private equity firms -- are plowing into real estate loans as an alternative to lower-yielding bonds. That’s giving building owners another option to cash in if their plans to sell don’t work out.“Sellers have a number in mind, and the market is not there right now,”said Aaron Appel, a managing director at brokerage Jones Lang LaSalle Inc. who arranges commercial real estate debt. “Owners are pulling out capital” by refinancing loans instead of finding buyers, he said.

Wells Fargo acquires $51 billion in mortgage servicing rights -- Wells Fargo has acquired approximately $51 billion in mortgage servicing rights from Seneca Mortgage Investments, a real estate investment firm in New York. The financial terms of were not disclosed, but the transaction will be reflected in Wells' third-quarter results, the company said in a press release Wednesday. The underlying loans in the portfolio are conforming loans guaranteed by Fannie Mae or Freddie Mac. "Mortgage servicing is an attractive, core business for Wells Fargo, and this transaction provides an opportunity for us to strategically enhance our servicing portfolio," said Franklin Codel, head of consumer lending for Wells Fargo, in the release. The acquisition comes as Wells continues to navigate a reputational crisis, amid a string of scandals in its retail bank. The San Francisco company's once-marquee brand has remained tarnished over the past year by revelations that employees created as many as 3.5 million fake accounts.

Harvey makes Trump rethink draining swamp at HUD - The long-term recovery for thousands of Texans whose homes were decimated by Hurricane Harvey rests with a Trump administration government outsider who wants his agency's budget cut by billions of dollars.After the flood waters around Houston recede and the Federal Emergency Management Agency disaster officials leave, Ben Carson's Department of Housing and Urban Development will take on the complicated task of getting victims back into permanent residences. HUD's effort will likely include federal subsidies to offset rental costs and aid for homeowners who are at risk of foreclosure.The response to Harvey will probably result in HUD being showered with cash, a shot in the arm that would make most agency heads gush. But Carson, a 65-year-old neurosurgeon turned politician, isn’t your typical agency head.Just last week, fresh off a trip to survey the damage in Texas with President Donald Trump, Carson simultaneously pledged HUD's commitment to helping the storm's victims and made comments that could rankle agency employees who will carry out much of the work."It's a bureaucracy and I'm not a big fan of bureaucracies," Carson said of HUD during an Aug. 30 interview on Fox News’s "Special Report" with Bret Baier. "Bureaucrats are people who think their rules are more important than the goals, so we are actually reimagining the way that HUD works right now from the bottom up." The Trump administration made its first relief request for Harvey on Sept. 1, asking Congress to approve almost $8 billion in aid for FEMA and the Small Business Administration. While none of the initial funds would go to HUD, the White House is expected to make additional requests in the weeks ahead. The cost of the recovery is daunting. Flooding from Harvey could cause damages of $25 billion to $37 billion to residential properties, with about 70 percent of those homes lacking insurance to protect against water, according to CoreLogic, which provides housing data.

AP Exclusive: Flood insurance policies plunged before Harvey  — Houston's population is growing quickly, but when Harvey hit last weekend there were far fewer homes and other properties in the area with flood insurance than just five years ago, according to an Associated Press investigation.The sharp, 9 percent drop in coverage means many residents fleeing Harvey's floodwaters have no financial backup to fix up their homes and will have to draw on savings or go into debt — or perhaps be forced to sell.A former head of the federal flood insurance program called the drops "unbelievable" and criticized the Federal Emergency Management Agency, which oversees the program."When you start to see policies drop like this, FEMA should have done something about this," said Robert Hunter, who ran the program in the late '70s. He estimates that fewer than two of 10 homeowners with flood damage have flood insurance.Houston's Harris County has 25,000 fewer flood-insured properties than it did in 2012, according to the AP's review of FEMA data. In percentage terms, the drop was even more dramatic in certain sections of the county: In Pasadena, just southeast of Houston, policies were down nearly 20 percent. Baytown, east of Houston, saw a 22 percent drop. The trouble extended beyond Houston, too. Jefferson County, home to cities like Beaumont and Port Arthur, which Harvey hit Wednesday, saw a bigger drop. That county fell from 25,818 policies to 19,773 in the past five years, a 23 percent decrease.

Harvey, Irma and the TBTF implicit subsidy problem -- Jared Bernstein - On my way in this AM, I heard an interesting interview by the great Bloomberg Surveillance team of Tom Keene and David Gura. They were talking to an insightful guy from the re-insurance industry about the costs to the industry of Harvey and Irma. To be clear, what follows abstracts from the human costs of these disasters, which I take extremely seriously. In fact, both the implicit subsidy point I stress below and the more elaborate argument I make here are intended to link the economics to the too-often tragic human outcomes. Their discussion emphasized the large share of residential and commercial real estate vulnerable to flooding but without flood insurance (I think they put this share at 50% in South FL.). Moreover, as I stressed in the WaPo piece linked above, the federal flood insurance program has long underpriced the risks against which they insure, leading to subsidy #1.Subsidy #2, though, is the one currently in play in DC, and discussed in the interview: those who build in harm’s way can trust that there’s an implicit subsidy as the gov’t (mostly federal) will pony up serious money for their relief and rebuild efforts. That is as it should be. When Americans are laid low by natural disasters, we pitch in, whether as taxpayers or as revealed by the behavior of many good people in TX. And when we’re talking about “black swans”–very low probability events with very high, unforeseen costs–the federal sector, which can borrow at favorable rates and run deficits long-term, is uniquely positioned to help.And yet, there are problems with this model. Subsidy #2 is one of those implicit subsidies, not unlike the one tapped by some of the big banks or Fannie and Freddie after the financial crash. The bailouts that saved these firms were of course premised on “too big to fail” (TBTF), in that their collapse would generate nationwide damage. To the extent that this is true, there’s a huge moral hazard problem, which will, and has, led to systemically underpriced risk. I understand that mapping these observations onto big places like Houston and South Florida is tricky. These are big chunks of America and American commerce and thus they too are legitimately classified as TBTF. But that doesn’t mean we ignore the inherent problems this creates, anymore than we ignored the financial crisis, which I assure you as a former insider was a huge motivator for the Obama administration, leading ultimately to the Dodd-Frank reforms.

Harvey Wrecks Up to a Million Cars in Car-Dependent Houston - As the Hurricane Harvey storm system dissipates and the water it dropped recedes, Houstonians left without shelter face the daunting task of rebuilding their lives. Many people are focused on the staggering figure of 40,000 homes lost, but another number also deserves close scrutiny: The flooding destroyed as many as a million cars in the Houston metro area.  Reliable transportation is a daily, fundamental need, almost more so in the wake of a disaster. Add in the fact that Houston is a car-dependent city, and the consequences of the destruction of so many vehicles comes into stark focus. How will rental companies and dealerships suddenly supply cars to people who need them right now? How do people get permanent cars? And what is the fate for the many people who can’t afford to replace their way of getting around?  “You really have to have a car if you’re in Houston,” says Andrea French, executive director of Transportation Advocacy Group Houston, which advocates for better funding for all modes of transportation. People in the city center may commute by bus or bike, and Uber and Lyft have made it easier to go without a personal vehicle, but as a rule it’s hard to get by without your own wheels. That’s why 94.4 percent of households in the Houston area have cars—1.8 each on average, according to analyst firm Cox Automotive. Only Dallas has a higher percentage. As of Thursday morning, insurance companies had received about 100,000 claims for cars hit by Harvey’s flooding, 75 percent of them totaled. “In an event like this, that number’s gonna be rising daily,” says Mark Hanna of the Insurance Council of Texas. “There are probably cars still submerged that people can’t get to.” A lot of people are just now returning to Houston to assess what they’ve lost and start rebuilding. The need for replacement vehicles, therefore, is massive and immediate. For many with insurance, the first step will be getting a rental car until their payment comes through and they can take home a new forever car. Exacerbating the problem, bereaved car owners aren’t the only ones in need: FEMA staff, emergency services, and other groups like the Red Cross also have to get around.

Houston-area mortgages, auto loans expected to take big hits - Lenders in Houston and other flood-ravaged parts of Texas are bracing for a wave of missed payments — particularly on auto loans and residential mortgages — as distressed borrowers use any available cash to get back on their feet.It is too soon to say how big the storm-related losses will be for banks and credit unions. But damage estimates released in the aftermath of Hurricane Harvey suggest that the impact will be substantial.More than 185,000 homes were damaged or destroyed as a result of Harvey, according to an estimate by the Texas Department of Emergency Management. There are also estimates that roughly 80% of the affected homes lack flood insurance.   As a result, many affected homeowners will end up owing more money on their mortgages than their homes are worth. It is a predicament that may discourage borrowers from making their monthly payments, particularly when they have a slew of new expenses as a result of flood-related property damage.When asked where the storm will leave its biggest impact, Patrick Schaeffer, a senior vice president at Woodforest National Bank, said: “Definitely housing is going to be No. 1, followed closely by cars.”An estimated 500,000 vehicles were destroyed just in Harris County, where Houston is located, local officials said. Many of those cars — perhaps one-third of them, according to one estimate — do not have insurance that covers flood damage. Banks and credit unions are already taking steps designed to minimize their eventual losses, allowing borrowers to skip payments and extending the length of their loans, in order to give flood victims some time to rebuild their lives.

Over 25% of Harvey-affected homes could miss a mortgage payment -- Over one-quarter of all mortgages in the areas affected by Hurricane Harvey are likely to become delinquent within four months because of the storm, according to an analysis from Black Knight. Approximately 300,000 mortgage borrowers will miss at least one payment on their loan because of the storm, with 160,000 not making three or more payments. Black Knight modeled this estimate based on changes in the delinquency rate in Louisiana and Mississippi following Hurricane Katrina in 2005, said Executive Vice President Ben Graboske in a press release. Mortgage delinquencies in affected areas in Louisiana and Mississippi peaked at 34%, with the rate of seriously delinquent loans peaking at 16%. But there were far fewer mortgage properties affected by Katrina than for Harvey, only 456,000 loans with an unpaid principal balance of $46 billion. "There are 1.18 million mortgaged properties in Harvey-related disaster areas, more than twice as many as were hit by Hurricane Katrina, with nearly four times the unpaid principal balance (of $179 billion)," said Graboske. "This will be a long-term recovery. If the Harvey-related disaster areas follow the same trajectory as those hit by Katrina, within four months we could be looking at as many as 160,000 borrowers falling 90 or more days past due on their mortgages." Through July, the Houston-area had a 5.1% delinquency rate with seriously delinquent loans at 1.8%, Black Knight said. There are moratoriums on foreclosures and payment forbearance plans in place for loans sold to Fannie Mae and Freddie Mac or insured by the Federal Housing Administration. High loan-to-value ratio mortgages sold to Fannie Mae and Freddie Mac normally would be covered by private mortgage insurance in case of default. But the master policy that governs the relationship between the MIs and mortgage lenders specifically states that if physical damage was the principal cause of the default, it can deny a lender's claim made following the loan going into foreclosure. The MIs are making an effort to work with lenders and borrowers in the affected area.

Black Knight: Hurricane Harvey Could Result in 300,000 New Mortgage Delinquencies - From Black Knight: Black Knight: Hurricane Harvey Could Result in 300,000 New Mortgage Delinquencies, with 160,000 Borrowers Becoming Seriously Past Due:
• FEMA-designated disaster areas related to Hurricane Harvey are home to 1.18 million mortgaged properties
• Harvey-related disaster areas contain over twice as many mortgaged properties as those connected to Hurricane Katrina in 2005, carrying nearly four times the unpaid principal balance
• Post-Katrina mortgage delinquencies in Louisiana and Mississippi FEMA-designated disaster areas soared 25 percentage points, peaking at over 34 percent
• A similar impact to Harvey-related disaster areas would equate to 300,000 borrowers missing at least one mortgage payment, and 160,000 becoming 90 or more days past due
Today, the Data & Analytics division of Black Knight Financial Services, Inc. released an updated assessment of the potential mortgage-related impact from Hurricane Harvey. As Black Knight Data & Analytics Executive Vice President Ben Graboske explained, using post-Katrina Louisiana and Mississippi as benchmarks presents the possibility for significant rises in both early and long-term delinquencies. “Although the situation around Hurricane Harvey continues to evolve, millions of American lives have already been impacted by the storm and immense flooding,” said Graboske. “For many, their struggles are just beginning. Using post-Hurricane Katrina as a model, Black Knight has found that as many as 300,000 homeowners with mortgages in FEMA-designated Harvey disaster areas could become past due over the next few months. Post-Katrina, delinquencies spiked in Louisiana and Mississippi disaster areas, jumping 25 percent to peak at 34 percent of all mortgaged properties being past due. The serious delinquency rate – tracking mortgages 90 or more days past due, but not yet in foreclosure – rose to more than 16 percent. New Orleans was hardest hit, with its delinquency jumping by 46 percentage points to nearly 55 percent, and the serious delinquency rate increasing by 24 percent .

Texas Governor: "Harvey Could Cost Up To $180 Billion" -- Texas Governor Greg Abbott said on Sunday that it could cost as much as $180 billion to rebuild Texas following Hurricane Harvey, more than four times what most experts expected ($40 billion). If accurate, Harvey would beat out Hurricane Katrina (total: $160 billion) for costliest storm in US history. “Katrina caused if I recall more than $120 billion but when you look at the number of homes and business affected by this I think this will cost well over $120 billion, probably $150 to $180 billion,” Abbott told Fox News, adding, “this is far larger than Hurricane Sandy.”Aside from a handful of meteorologists like Dr. Joel N. Myers, founder, president and chairman of AccuWeather, who predicted – apparently with a surprising degree of accuracy – that Harvey-related costs could pile as high as $190 billion, few anticipated the extensive flooding damage the storm would cause in Houston, the fourth-largest city in the US, which contributes some $500 billion to US GDP every year.

How Ginnie Mae will aid issuers affected by Hurricane Harvey - Ginnie Mae is preparing to give servicing assistance to issuers affected by Hurricane Harvey if more than 5% of their portfolio is in a federal disaster area."Any Ginnie Mae issuer in need of assistance should contact us as soon as possible so we can guide them through this difficult period," said Michael Bright, Ginnie Mae's executive vice president and chief operating officer, in a press release. Bright is acting as Ginnie's president while the role remains unfilled.Ginnie mortgage-backed securities issuers that have this type of portfolio concentration can get help making pass-through payments to investors on loans with forbearance, delete affected loans from delinquency ratio calculations, and buy out affected loans from securitized pools, if approved.Locations outside federal disaster areas may be eligible for assistance if the hurricane directly affects homeowners' employment opportunities and incomes. Fannie Mae and Freddie Mac, as well as Ginnie Mae, expect lenders to extend forbearance to borrowers affected by Hurricane Harvey that will affect collateral in securitized pools.Payments on affected loans could be reduced for six months and then extended for another half year if needed, and late fees and other penalties tend to be waived for a period of time in disaster areas.The government-sponsored enterprises also have begun looking at how hurricane-related servicing relief will affect the cash-flows to investors from securitized mortgage pools.Freddie, for example, recently issued a notice warning that securitized loans affected by the hurricane might be handled with differently. Typically, Freddie repurchases loans that are 120 or more days delinquent from related securitizations, but if a loan is in forbearance related to disaster relief, it has more discretion.

How Local Housing Regulations Smother the U.S. Economy – NYTimes - If you live in a coastal city like New York, Boston or San Francisco, you know that the cost of housing has skyrocketed. This housing crisis did not happen by chance: Increasingly restrictive land-use regulations in the last half-century contributed to it. But what appears to be several local housing crises is actually a much more alarming national crisis: Land-use restrictions are a significant drag on economic growth in the United States. The creeping web of these regulations has smothered wage and gross domestic product growth in American cities by a stunning 50 percent over the past 50 years. Without these regulations, our research shows, the United States economy today would be 9 percent bigger — which would mean, for the average American worker, an additional $6,775 in annual income. For most of the 20th century, workers moved to areas where new industries and opportunities were emerging. This was the locomotive behind American prosperity. Agricultural workers moved from the countryside to booming cities like Pittsburgh and Detroit. In the Great Migration, some six million African-Americans left the South for manufacturing jobs in cities like Chicago and Buffalo.  Today, this locomotive of prosperity has broken down. Finance and high-tech companies in cities like New York, Boston, Seattle and San Francisco find it difficult to hire because of the high cost of housing. When an unemployed worker in Detroit today finds a well-paying job in San Francisco, she often cannot afford the cost of housing there. Look at Silicon Valley. It has some of the most productive labor in the nation, and some of the highest-paying jobs, but remarkably low density because of land-use regulations. Surface parking lots, one-story buildings and underutilized plots of land are still remarkably common because of increasingly draconian zoning restrictions. Building anything taller than three stories, even on empty lots next to a train station, draws protests from homeowners. And once a project is approved, it faces an endless series of appeals and lawsuits that can add years of delay. Appeals are remarkably easy and affordable to file and can be done anonymously. This basically gives every neighbor a veto over every new project, regardless of how desirable the project might be.

MBA: Mortgage Applications Increase in Latest Weekly Survey --From the MBA: Mortgage Applications Increase in Latest MBA Weekly SurveyMortgage applications increased 3.3 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending September 1, 2017. .. The Refinance Index increased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 1 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 5 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, 4.11 percent, from 4.12 percent, with points increasing to 0.43 from 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

Mortgage Rates at 2017 Lows - From Matthew Graham at Mortgage News Daily: Mortgage Rates Little-Changed at 2017 LowsMortgage rates didn't move much today, despite plenty of strength in underlying bond markets.  This would normally coincide with lower rates, so what's the deal?The main issue is timing.  Bond markets weakened yesterday afternoon.  This would imply higher rates, but most lenders never went to the trouble of adjusting rate sheets intraday.  As I said yesterday, those lenders would begin today at a disadvantage.  Indeed they did, and that disadvantage was generally erased by the improvement in bond markets.  Thus, lenders who didn't move rates higher yesterday were able to keep today's rates relatively unchanged, thanks to bond market gains.  Lenders who DID raise rates yesterday were able to offer slightly lower rates today.  All in all, the average lender is quoting the lowest rates of 2017, with more than a few lenders at 3.75% on a top tier conventional 30yr fixed scenario.  Most lenders are able to quote 3.875% now, though a few remain at 4.0%.

CoreLogic: House Prices up 6.7% Year-over-year in July - Notes: The recent Case-Shiller index release was for June. The CoreLogic HPI is a three month weighted average and is not seasonally adjusted (NSA). From CoreLogic: CoreLogic US Home Price Report Shows Prices Up 6.7 Percent in July 2017Home prices nationally increased year over year by 6.7 percent from July 2016 to July 2017, and on a month-over-month basis, home prices increased by 0.9 percent in July 2017 compared with June 2017, according to the CoreLogic HPI. ... “In July, home price growth in the Pacific Northwest and mountain states led the nation with the highest appreciation rates,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The sharp increase in prices in Washington and Utah has been especially striking, with home price growth in both states accelerating by 3 percentage points since the beginning of this year.”  This graph from Corelogic shows the YoY change in the national CoreLogic HPI data since 2002

The Solution to Our Housing Crisis Is to Let Communities Own Property - In the face of rampant financial deregulation, austerity-driven social disinvestment, and vast income inequality, working-class New York families are often priced out of both the rental and mortgage markets, while gentrification eclipses blighted blocks with empty luxury towers. But now housing-justice activists want to seed the city with a new kind of urban homesteading: Community Land Trusts (CLT)—a model of collective ownership of housing on community-owned land.  Designed to encourage long-term social stability and foster political self-determination on the urban commons, CLTs develop property through a community-run organization, which is generally run by representatives from the community, sometimes along with the local government, and the private sector, independent of conventional government-based funding streams or commercial financing. The City’s Department of Housing Preservation and Development recently launched a major new grant program, with over $1.6 million in seed funding for community-based organizations, to grow the Big Apple’s newest crop of CLTs.  Though CLTs have historically been associated with suburban regions, cities are beginning to adopt the concept as they strain against overcrowded and hyperinflated real-estate markets. By expanding place-based, community-directed development, a democratically governed CLT could pool public resources to enable residents to chart local development as owner-members.

After the rain, eviction notices for many - A week after the rain stopped, the eviction notices started showing up. By Labor Day, managers of swamped apartment complexes across the Houston area were informing tenants that it's time to pack up their things and find another place to live."These first floors units will not be livable and current conditions pose a significant danger to you," warned one sympathetically worded email to residents of a complex in Fort Bend County. "We regret that this damage has occurred, and we are taking steps as rapidly as possible to repair the damage," said another notice, tacked to the inside of a door in Bellaire. The notices, affecting hundreds of local renters, order the residents out within five days. They also signal a difficult new chapter in the story of Tropical Storm Harvey for people who do not own a home.For residents like Sheri Ilo, whose family was evacuated by boat from the Marquis at Cinco Ranch in Katy, getting back to her apartment will be as hard as getting out. The complex sits in up to 5 feet of water. To vacate within the five-day deadline she'd need another boat - and a moving van. Then she'd have to find a new apartment in a suddenly tight market."Where do you expect us to go?" Ilo said Monday. "This is overwhelming to my neighbors and I. ... We all work here in Houston so we have to go back to work. Do you expect us to commute from San Antonio?" Many management companies are refunding rent and waiving late fees. But the mass evictions like the one at Ilo's apartment complex are increasing tensions between landlords and tenants as both grapple with flooded property, late rent payments and in some cases uncertainty over when the next paycheck will arrive.

Hotel Occupancy and Hurricane Harvey -- Note: Hotel occupancy rates increased noticeably following Hurricanes Katrina and Rita in 2005. I expect the overall occupancy rate will also increase following Hurricane Harvey - and stay elevated for several months. This might even push 2017 into record territory.  From How Hurricane Harvey could affect US hotel industry We expect that the room supply number of Texas will decline for at least a year. After Katrina, Louisiana room supply dropped by roughly 25% between September 2005 and August 2006. This equated to a supply loss for the U.S. of 0.5%, in fact negating the slow U.S. supply growth we had reported so that—for the first time in history—the annualized supply growth for the U.S. was negative. It is still too early to tell which hotels are closed for business. We hope that the number is relatively small, and current industry commentary gives us reason for optimism. But it is not a stretch to assume that the supply decline in and around Houston will affect the national numbers. ... If a hotel makes it through the storm unscathed or can be re-opened pretty quickly after the event, there is a high likelihood that it will post very strong demand numbers in the months to come. Demand will be generated by multiple sources: displaced residents, FEMA and other federal personnel, insurance adjusters and contractors. Most of these will stay for months in the area keeping room demand numbers artificially high. ... If the room supply declines, but room demand remains steady, then occupancy is increasing. This could imply that our STR forecast of 0% occupancy growth for 2017 is too low and that we may be able to report a slight occupancy increase this year and through the second half of next year.

Amazon is under fire for reported Hurricane Irma price gouging, with ‘life-sustaining necessities’ selling for wildly inflated prices -- Amazon is under fire for reportedly inflating prices as Floridians prepare for Hurricane Irma. With local grocery stores selling out of basics such as water and other emergency supplies, many shoppers have turned to Amazon to prepare for the Category 5 storm. However, some people have been disturbed to find wildly inflated prices for essentials such as water on the e-commerce site. shame on @amazon for price gouging/allowing price gouging on life-sustaining necessities like water. #Irma $18 a case?! — عزمية مكان (@AZMIAakaMIA) September 6, 2017Went to see if I could use Amazon Prime to get more water over to my family in South Florida for Irma. Check out the price they quoted me.— Diana Moskovitz (@DianaMoskovitz) September 5, 2017.For example, a 24-pack of Aquafina — typically sold for less than $6 — was priced at $20. And, Deadsp in editor Diana Moskovitz reported that a 24-pack of Nestle bottled water with expedited shipping was priced at $179.25.  Price gouging on essential items during emergencies is illegal in Florida, the Miami Herald reported. While Amazon is not based in Florida, the Florida Attorney General's office told the Miami Herald that "If a business is selling an essential commodity to persons who are using it in Florida as a result of the emergency, the business may be subject to Florida's price gouging law."

Reasonable profit or price gouging? State attorney investigating complaints - Miami Herald - As throngs of hurricane-panicked Floridians stormed into box stores, grocers and gas stations Wednesday, they faced even more anxiety at the cash register: long lines and sticker shock.    If you could find water, some local merchants were selling it for as much as $18 a case, with gas prices hovering around $3 a gallon in South Florida. Duarte’s Dollar store in Coral Gables was charging $11.99 for a case of 24 bottles of Zephyrhills water on Tuesday. A clerk explained that the high price was what the store “normally’’ charges for cases of water.  On Twitter, Miami-Dade State Attorney Katherine Fernandez Rundle said her hotline had received “hundreds’’ of calls about price gouging and that the office was investigating each complaint. Online sellers were also being taken to task on social media. On Wednesday, for example, a 24-pack of half-liter bottles of water was selling for as much as $25 from a third-party seller on  By law, it is illegal to sell, lease or offer to sell anything for an amount “grossly’’ exceeding the average price for that product or commodity during the 30 days before a state declares an emergency — unless the seller can justify the price. If there is a gross disparity between the prior price and the current charge, it is considered price gouging.

Morgan Stanley Asks "If Employment So Good," Why Is This Happening To Credit Card Delinquencies... - In a new downgrade of subprime lenders Capital One and Synchrony, Morgan Stanley sought to answer the nagging question of why subprime credit card losses are suddenly soaring, per the chart below, "if employment is so good."  After reportedly spending the entire month of August analyzing that question, Morgan Stanley came to many of the same conclusions that we note a regular, recurring basis.  Apparently, those soaring delinquencies have something to do with stagnant wages in the face of soaring healthcare costs, rising rents and a pullback in consumer credit extension...who could have guessed that?Investors ask, "Why are card losses rising if employment is  so good?" Our deep dive & quant work shows subprime is stretched from higher rent, healthcare costs & low  wage growth, with lower credit availability a coming drag.A Tale of Two Consumers, with the subprime consumer increasingly at risk, driving up net charge-offs (NCO) and lowering EPS: The economy is solid and unemployment is very low, but credit card delinquencies have been increasing... so we spent the month of August delving into what is really  going on with the US consumer.   We found that the average consumer is in good shape but the financial pressures on subprime consumers are high and, critically, rising

House Panel Approves Legislation Speeding Up Deployment of Self-Driving Cars -- An influential U.S. House committee on Thursday approved a revised bipartisan bill on a 54-0 vote that would speed the deployment of self-driving cars without human controls and bar states from blocking autonomous vehicles.The bill would allow automakers to obtain exemptions to deploy up to 25,000 vehicles without meeting existing auto safety standards in the first year, a cap that would rise to 100,000 vehicles annually over three years.Automakers and technology companies believe chances are good Congress will approve legislation before year end. They have been pushing for regulations making it easier to deploy self-driving technology, while consumer groups have sought more safeguards. Current federal rules bar self-driving cars without human controls on U.S. roads and automakers think proposed state rules in California are too restrictive.The House of Representatives will take up the bill when it reconvenes in September, while senators plan to introduce a separate similar measure.“Our aim was to develop a regulatory structure that allows for industry to safely innovate with significant government oversight,” said Representative Greg Walden, who chairs the House Energy and Commerce Committee.Initially, authors proposed to allow automakers and others to sell up to 100,000 vehicles immediately. Representative Frank Pallone said the phase-in period was essential so “millions of exempted cars will not hit our roads all at once.”Under the House proposal, states could still set rules on registration, licensing, liability, insurance and safety inspections, but could not set self-driving car performance standards.Automakers praised committee passage, while Consumer Watchdog privacy director John Simpson said preempting state laws “leaves us at the mercy of manufacturers as they use our public highways as their private laboratories.” The issue has taken on new urgency since U.S. road deaths rose 7.7 percent in 2015, the highest annual jump since 1966.

"Self Drive Act" Passes House Committee 54-0: Safety Standards Scrapped, 25,000 Driverless Cars Coming Right Up -- Many contend that self-driving trucks and cars will not happen anytime soon for numerous reasons (most of them easily refuted). One of the reasons is of lack of approval from Congress. That argument will go on the ash heap of history by the end of the year because a bipartisan House Panel Approves Legislation Speeding Up Deployment of Self-Driving Cars. An influential U.S. House committee on Thursday approved a revised bipartisan bill on a 54-0 vote that would speed the deployment of self-driving cars without human controls and bar states from blocking autonomous vehicles. The bill would allow automakers to obtain exemptions to deploy up to 25,000 vehicles without meeting existing auto safety standards in the first year, a cap that would rise to 100,000 vehicles annually over three years. Automakers and technology companies believe chances are good Congress will approve legislation before year end. They have been pushing for regulations making it easier to deploy self-driving technology, while consumer groups have sought more safeguards. Current federal rules bar self-driving cars without human controls on U.S. roads and automakers think proposed state rules in California are too restrictive. This is playing out exactly as I expected. In 2018, there will be 25,000 cars and trucks on the and highways and in cities, driving themselves. I suspect most initial testing will be on highways. If that goes well, there will be 100,000 self-driving cars on the roads by 2019-2020. Then, once things go well, and I expect them to go well, most of the trucks on the highways will be driverless.

Trade Deficit at $43.7 Billion in July --From the Department of Commerce reported: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.7 billion in July, up $0.1 billion from $43.5 billion in June, revised. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports. Imports and exports decreased in June. Exports are 18% above the pre-recession peak and up 5% compared to July 2016; imports are 3% above the pre-recession peak, and up 5% compared to June 2016. In general, trade has been picking up. The second graph shows the U.S. trade deficit, with and without petroleum. The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products. Oil imports averaged $43.20 in July, down from $44.68 in June, and up from $41.02 in July 2016. The petroleum deficit had been declining for years - and is the major reason the overall deficit has mostly moved sideways since early 2012. The trade deficit with China increased to $35.6 billion in July, from $30.3 billion in July 2016. 

July Trade Deficit at $43.69B, Better Than Forecast -   The U.S. International Trade in Goods and Services, also known as the FT-900, is published monthly by the Bureau of Economic Analysis with data going back to 1992. The monthly reports include revisions that go back several months. This report details U.S. exports and imports of goods and services.   Here is an excerpt from the latest report: The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.7 billion in July, up $0.1 billion from $43.5 billion in June, revised. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports. The July increase in the goods and services deficit reflected a decrease in the goods deficit of less than $0.1 billion to $65.3 billion and a decrease in the services surplus of $0.2 billion to $21.6 billion. Year-to-date, the goods and services deficit increased $27.9 billion, or 9.6 percent, from the same period in 2016. Exports increased $76.8 billion or 6.0 percent. Imports increased $104.8 billion or 6.7 percent. Today's headline number of -43.69B was better than the forecast of -44.60B. The previous month was revised downward by 99M and revisions were made back to January. This series tends to be extremely volatile, so we include a six-month moving average.

US Trade Deficit Rises In July, Beats Estimates As Oil Imports Slide -- The US trade deficit widened in July, growing by 0.3% from a downward revised $43.5 billion to $43.7 billion, and beating expectations of $44.7 billion, as exports decreased more than imports. The goods deficit decreased less than $0.1 billion in July to $65.3 billion. The services surplus decreased $0.2 billion in July to $21.6 billion.  Breaking down the components:

  • Exports of goods and services decreased $0.6 billion, or 0.3 percent, in July to $194.4 billion. Exports of goods decreased $0.4 billion and exports of services decreased $0.1 billion.
  • The decrease in exports of goods mostly reflected decreases in consumer goods ($0.7 billion) and in automotive vehicles, parts, and engines ($0.6 billion). An increase in capital goods ($0.9 billion) partly offset the decreases.
  • The decrease in exports of services mostly reflected a decrease in travel (for all purposes including education) ($0.3 billion).
  • Imports of goods and services decreased $0.4 billion, or 0.2 percent, in July to $238.1 billion. Imports of goods decreased $0.5 billion and imports of services increased less than $0.1 billion.
  • The decrease in imports of goods mostly reflected decreases in automotive vehicles, parts, and engines ($0.8 billion) and in industrial supplies and materials ($0.7 billion). An increase in capital goods ($1.3 billion) partly offset the decreases.
  • Imports of services were nearly unchanged, reflecting small and offsetting changes across all categories.

Broken down by geography, the July figures showed:

  • Surpluses with South and Central America ($3.5), Hong Kong ($2.8), Brazil ($0.8), Saudi Arabia ($0.8), and Singapore ($0.7).
  • Deficits with China ($31.8), European Union ($12.1), Japan ($5.5), Mexico ($5.4), Germany ($5.3), Italy ($2.4), India ($1.9), Taiwan ($1.9), South Korea ($1.8), France ($1.3), Canada ($0.9), United Kingdom ($0.2), and OPEC ($0.1).
  • The surplus with South and Central America increased $0.9 billion to $3.5 billion in July. Exports increased $1.0 billion to $12.9 billion and imports increased $0.1 billion to $9.4 billion.
  • The balance with Saudi Arabia shifted from a deficit of less than $0.1 billion to a surplus of $0.8 billion in July. Exports increased $0.4 billion to $1.9 billion and imports decreased $0.4 billion to $1.2 billion.

The Trade deficit excluding petroleum was at $40.6 billion in July

AAR: Rail Traffic decreased slightly in August --From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permissionAugust 2017 U.S. rail traffic was like a glass that’s either half full or half empty, depending on your point of view. Total U.S. rail carloads were down 0.3% (4,571 carloads) from August 2016, thanks mainly to big declines in carloads of grain (down 24,565 carloads, or 20.4%), motor vehicles and parts (down 10,321 carloads, or 11.2%), and petroleum and petroleum products (down 8,362 carloads, or 15.8%). ... On the other hand, carloads of coal were up 25,926 (5.8%) in August, and carloads of crushed stone, gravel, and sand had their best month ever, with carloads up 14,506, or 12.1%, over last August, thanks mainly to booming frac sand shipments. August 2017 was also the best month ever for intermodal: U.S. railroads originated an average of 280,216 containers and trailers per week, more than in any month in history. Year-to-date total U.S. rail carloads were up 4.5% through August; year-to-date intermodal volume was up 3.4% through August.

 U.S. wholesale inventories revised higher in July (Reuters) - U.S. wholesale inventories rose 0.6 percent in July as stocks for a variety of goods, including autos, posted gains. The Commerce Department said on Friday that wholesale inventories rose 0.6 percent, matching the rise in each of the previous two months. The department last month reported that wholesale inventories rose 0.4 percent in July. Auto inventories increased 0.2 percent in July after jumping 1.1 percent in June. Slowing demand for autos has left manufacturers with an inventory glut, but economists say demand is likely to increase as drivers in Texas and other states ravaged by hurricanes replace storm-damaged vehicles. The component of wholesale inventories that goes into the calculation of gross domestic product - wholesale inventories excluding autos - rose 0.7 percent in July.  Durable goods inventories rose 0.9 percent, helped by a 1.1 percent increase in stocks of machinery, the biggest rise in nearly three-and-a-half years. Inventories of electrical equipment rose 2.6 percent. Inventory investment had a neutral impact on the second quarter’s 3.0 percent annualized GDP growth rate after subtracting 1.46 percentage points from growth at the start of the year. Sales at wholesalers slipped 0.1 percent after rising by a revised 0.6 percent in June. Economists had expected sales to rise 0.4 percent in July. Motor vehicles sales slid 0.8 percent in July after rising 0.2 percent in June.  At July’s sales pace, it would take 1.30 months to clear shelves, which was the highest since November 2016. That compared with 1.29 months in June. The inventories-to-sales ratio for motor vehicles rose to 1.80 months from 1.78 in June. That ratio has increased from 1.67 months in January.

U.S. factory orders tumble, but business spending firming (Reuters) - New orders for U.S.-made goods recorded their biggest drop in nearly three years in July, but demand for capital goods was stronger than previously reported, pointing to a faster pace of business spending early in the third quarter. Strong business spending is underpinning manufacturing and helping offset the drag from declining motor vehicle output. Manufacturing makes up about 12 percent of the U.S. economy. Factory goods orders tumbled 3.3 percent amid a slump in demand for transportation equipment, the Commerce Department said on Tuesday. That was the biggest drop since August 2014 and followed a 3.2 percent surge in June. Orders excluding transportation equipment rose 0.5 percent after edging up 0.1 percent the prior month. Orders for non-defense capital goods excluding aircraft, seen as a measure of business spending plans, jumped 1.0 percent in July instead of gaining 0.4 percent as reported last month. Orders for these so-called core capital goods slipped 0.1 percent in June. Shipments of core capital goods, which are used to calculate business equipment spending in the gross domestic product report, jumped 1.2 percent in July instead of the previously reported 1.0 percent rise. The surge in shipments suggests that business spending on equipment strengthened further early in the third quarter. Business investment on equipment increased at an 8.8 percent annualized rate in the April-June quarter, the fastest pace since the third quarter of 2015. Business spending is firming even as the boost from oil and gas drilling is starting to fade.

ISM Non-Manufacturing Index increased to 55.3% in August -- The August ISM Non-manufacturing index was at 55.3%, up from 53.9% in July. The employment index increased in August to 56.2%, from 53.6%. Note: Above 50 indicates expansion, below 50 contraction.  From the Institute for Supply Management: August 2017 Non-Manufacturing ISM Report On Business®: "The NMI® registered 55.3 percent, which is 1.4 percentage points higher than the July reading of 53.9 percent. This represents continued growth in the non-manufacturing sector at a faster rate. The Non-Manufacturing Business Activity Index increased to 57.5 percent, 1.6 percentage points higher than the July reading of 55.9 percent, reflecting growth for the 97th consecutive month, at a faster rate in August. The New Orders Index registered 57.1 percent, 2 percentage points higher than the reading of 55.1 percent in July. The Employment Index increased 2.6 percentage points in August to 56.2 percent from the July reading of 53.6 percent. The Prices Index increased 2.2 percentage points from the July reading of 55.7 percent to 57.9 percent, indicating prices increased in August for the third consecutive month. According to the NMI®, 15 non-manufacturing industries reported growth. The non-manufacturing sector has rebounded from the prior month’s cooling-off period. The majority of respondents are optimistic about business conditions going forward."This graph shows the ISM non-manufacturing index (started in January 2008) and the ISM non-manufacturing employment diffusion index. This suggests faster expansion in August than in July.

Markit Services PMI: Business Activity Growth at 21 Month High - The August US Services Purchasing Managers' Index conducted by Markit came in at 56.0 percent, up 1.3 percent from the July estimate. The consensus was for 56.8 percent. Markit's Services PMI is a diffusion index: A reading above 50 indicates expansion in the sector; below 50 indicates contraction. Here is the opening from the latest press release: August data signalled an accelerated upturn in business activity across the US service sector. New orders also expanded at a quicker rate, with growth reaching a 25-month high. Higher activity and new business prompted firms to add to their payrolls again in August, and at the quickest rate for nearly two years. On the prices front, both input costs and output charges increased again, with rates of inflation reaching 26- and 35-month highs, respectively. Meanwhile, business confidence was the strongest since January, with firms encouraged by greater client demand. The seasonally adjusted IHS Markit U.S. Services Business Activity Index registered 56.0 in August, up from July’s reading of 54.7. The latest survey extended the current sequence of activity growth to 18 months. Moreover, the upturn was the fastest since November 2015, with a number of panellists stating that higher activity was underpinned by a greater willingness to spend among clients and improving market conditions.[Press Release] Here is a snapshot of the series since mid-2012.

Weekly Initial Unemployment Claims increase to 298,000 - The DOL reported: In the week ending September 2, the advance figure for seasonally adjusted initial claims was 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. This is the highest level for initial claims since April 18, 2015 when it was 298,000. The 4-week moving average was 250,250, an increase of 13,500 from the previous week's unrevised average of 236,750.  Hurricane Harvey impacted this week's initial claims.  The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971

Weekly Unemployment Claims: Up 62K, Affected by Hurricane Harvey - Here is the opening statement from the Department of Labor: In the week ending September 2, the advance figure for seasonally adjusted initial claims was 298,000, an increase of 62,000 from the previous week's unrevised level of 236,000. This is the highest level for initial claims since April 18, 2015 when it was 298,000. The 4-week moving average was 250,250, an increase of 13,500 from the previous week's unrevised average of 236,750. Hurricane Harvey impacted this week's initial claims. [See full report]Today's seasonally adjusted 298K new claims, up 62K from last week's 236K, was worse than the forecast of 241K.  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.

Employment: Preliminary annual benchmark revision shows upward adjustment of 95,000 jobs --The BLS released the preliminary annual benchmark revision showing 95,000 additional payroll jobs as of March 2017. The final revision will be published when the January 2018 employment report is released in February 2018. Usually the preliminary estimate is pretty close to the final benchmark estimate. The annual revision is benchmarked to state tax records. From the BLS: In accordance with usual practice, the Bureau of Labor Statistics (BLS) is announcing the preliminary estimate of the upcoming annual benchmark revision to the establishment survey employment series. The final benchmark revision will be issued in February 2018 with the publication of the January 2018 Employment Situation news release.Each year, the Current Employment Statistics (CES) survey employment estimates are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus two-tenths of one percent of total nonfarm employment. The preliminary estimate of the benchmark revision indicates an upward adjustment to March 2017 total nonfarm employment of 95,000 (0.1 percent). Using the preliminary benchmark estimate, this means that payroll employment in March 2017 was 95,000 higher than originally estimated. In February 2018, the payroll numbers will be revised up to reflect the final estimate. The number is then "wedged back" to the previous revision (March 2016). Construction was revised up by 50,000 jobs, and manufacturing revised up by 23,000 jobs. This preliminary estimate showed 98,000 more private sector jobs, and 3,000 fewer government jobs (as of March 2017).

Where Have All the Workers Gone: Opioids and US Labor Force Participation --Jerri-lynn Scofield - Princeton University economist Alan Krueger will present his latest paper, Where Have All the Workers Gone? An Inquiry into the Decline of the U.S. Labor Force Participation Rate,  at the Brookings Institution in Washington today.The paper examines the labor force implications of the opioid epidemic on a local and national level.Krueger’s  headline finding is that the increase in opioid prescriptions from 1999 to 2015 possibly accounts for about 20% of the observed decline in men’s labor force participation (LFP) in the United States over that same period, and roughly 25% of that for women.Krueger recognizes these findings have huge policy implications.  As reported in The Wall Street Journal:“The opioid epidemic and labor-force participation are now intertwined,” Mr. Krueger said. “If we are to bring a large number of people back into the labor force who have left the labor force, I think it’s important that we take serious steps to address the opioid crisis.”Trump declared the opioid crisis to be a national emergency last month, as I’ve previously discussed here. Thus far, there’s scant cause for optimism that this rhetoric will be matched by a policy response adequate to the task at hand. Opioid overdoses account for nearly 100 overdose deaths a day in the US, the FT reports today, and cites Centers for Disease Control figures showing that prescription US opioid medication sales per person surged 356% between 1999 and 2015. This post, The American Opioid Epidemic, provides an overview of recent academic literature on the issue. Krueger’s latest paper builds on earlier research he presented at a Federal Reserve Bank of Boston conference in October 2016. In that earlier work, Krueger found that nearly half of prime age men who are not in the labor force take pain medication daily. Two-thirds of those men—or about 2 million— take prescription pain medication daily. According to the paper to be presented today: The US LFP rate in the United States peaked at 67.3 percent in early 2000, and has declined at a more or less continuous pace since then, reaching a near 40-year low of 62.4 percent in September 2015 (see Figure 1). Italy was the only O.E.C.D. country that had a lower labor force participation rate of prime age men than the U.S. in 2016. Although the participation rate has stabilized since the end of 2015, evidence on labor market flows – in particular, the continued decline in the rate of transition of those who are out of the labor force back into the labor force – suggests that this is likely to be a short-lived phenomenon.

Made In The USA (By Robots): China Opens 'Sewbot' Factory In Arkansas, Producing Shirts For 33c - A Chinese T-shirt company is setting up shop in Arkansas, lured by U.S. sewbots and lower production costs. It will cost about 33 cents to produce a shirt.  Please consider China Snaps Up America’s Cheap Robot Labor. “Made in America” will soon grace the labels of T-shirts produced by a Chinese company in Little Rock. By early 2018, Tianyuan Garments Co., based in the Suzhou Industrial Park in eastern China, will unveil a $20 million factory staffed by about 330 robots from Atlanta-based Softwear Automation Inc. The botmaker and garment company estimate the factory will stitch about 23 million T-shirts a year. The cost per shirt, according to Pete Santora, Softwear’s chief commercial officer: 33¢.  “Around the world, even the cheapest labor market can’t compete with us,” Tang Xinhong, the chairman of Tianyuan, told the China Daily about the factory in July. The company, one of the biggest apparel makers in China, supplies Adidas, Armani, Reebok, and other major brands. The garment industry has been slower to automate than others, such as automobiles and electronics. Developing a robot that can match the dexterity of a human hand to manipulate and stitch fabric is an expensive proposition, Santora says. Stitching a dress shirt with a breast pocket requires about 78 separate steps. Tricky, but such a bot is coming, says the chief executive officer of Softwear Automation, Palaniswamy Rajan: “We will roll that out within the next five years.” Still, many garment makers are reluctant to move away from China. Over the past two decades, the industry has built up an extensive supply network for yarns, dyes, fasteners, zippers, and trimmings. China is still the world’s largest exporter of garments, with an annual value of $170 billion, says Xu of the apparel council. One T-shirt factory isn’t going to change that. But after tariffs, duties, and shipping costs are factored in, the case for shifting production to the U.S. from emerging markets is a compelling one, Santora says. Meanwhile, as robots become smarter and market access becomes more important, poorer nations that counted on manufacturing to climb out of poverty—as Japan, Korea, and China did in the decades after World War II—will have to offer more than cheap labor.The goal is to produce 23 million t-shirts at 33 cents each, about one shirt every 26 seconds.It’s rather difficult to compete against 33 cents when shipping and transportation costs are rolled in.

Silicon Valley Is Harming Workers And Creating More Economic Inequality, Says Expert  - The old story of the American Dream is pretty straightforward: You work hard in school, develop skills and then get a job that provides decent wages and solid benefits. It was a dream that was actually realized by millions of people a generation or two ago — but journalist Rick Wartzman says the dream is increasingly out of reach because of a radically altered relationship between employers and employees, and also because of the new  supremacy of shareholders over community stakeholders.Wartzman is a former Wall Street Journal reporter whose new book is called “The End of Loyalty: The Rise and Fall of Good Jobs In America.” In a podcast interview with International Business Times, he discussed how huge corporations once took responsibility for providing for their workers and retirees. But over the last 30 or 40 years, he argues, the fundamental relationship between companies and their workers changed in a way that began prioritizing shareholder returns and corporate profits over everything else.   Subscribers can click here to listen to the whole podcast. What follows is an excerpt of the discussion.

New York City unveils universal free lunch in time for the first day of school - After years of lobbying from City Council members and school nutrition advocates, New York City will offer free lunch to all public school students regardless of their families’ income — a change the city expects will result in fewer students missing out on lunch.The new program — called Free School Lunch for All — will take effect in time for the first day of school on Thursday and will mean that an additional 200,000 students are now eligible for free lunch. It marks the end of a rift between Mayor Bill de Blasio and allies on the City Council who have urged him to enact his campaign promise to make lunch free for all students.Roughly 780,000 students are currently eligible for free or reduced-price lunch because their household income falls below a certain threshold — more than 70 percent of the city’s student population, advocates say. But families must first fill out paperwork and students must overcome the lunchroom stigma attached to free meals, which discourages some from applying. About one-third of eligible students do not participate, according to advocates.The de Blasio administration has slowly expanded access to free meals: The city began a pilot program offering free lunch to middle school students in 2014, and currently offers free breakfast at every school.  “This is about equity,” schools Chancellor Carmen Fariña said at a press conference Wednesday, where she was joined by city council leaders, union officials, and advocates. “There is a basic level of investment that every New Yorker deserves.”  Before the announcement, the city had already allocated additional funding that would have ensured roughly 75 percent of the city’s students were enrolled at schools that offered free lunch regardless of income, according to Deputy Chancellor Elizabeth Rose, up from 30 percent last school year.

 ACT Scores and Achievement Gaps - The Washington Post has a story on ACT scores: New results from the nation’s most widely used college admission test highlight in detailed fashion the persistent achievement gaps between students who face disadvantages and those who don’t. Scores from the ACT show that just 9 percent of students in the class of 2017 who came from low-income families, whose parents did not go to college, and who identify as black, Hispanic, American Indian or Pacific Islander are strongly ready for college.  But the readiness rate for students with none of those demographic characteristics was six times as high, 54 percent, according to data released Thursday. “That kind of shocked us,” ACT chief executive Marten Roorda said. “We knew it was bad, but we didn’t know it was this bad.” The analysis of “underserved learners” was a first for the ACT, which is one of two major tests students can take to apply to college. The other is the College Board’s SAT. In recent years, both tests have found major disparities in college readiness among students in the Washington region and around the country. Roorda lamented that these gaps have persisted despite efforts to improve schools under the banners of No Child Left Behind, Race to the Top and other national initiatives.  Actually, there have been a lot more initiatives, local and national, than those Roorda mentioned, and they go back decades. I remember, for example, when busing was expected to reduce gaps.  More detail appears to be available in this report by ACT.. Since the Washington Post only looks at “underserved learners,” for completeness, it helps to know the entire distribution. Table 2.4 of the ACT report indicates that that Asian students get the top scores, on average, followed by white students, followed by those who decline to state their race, followed by those of two or more races. I also notice a bit of a gap between males and females – males do better on math and science, females on English and reading. So this report is chock full of the same racist stereotypes we have seen for decades. How do we get rid of this persistent gap in outcomes?

Why laptops don’t belong in the classroom - It seems that old-fashioned paper notebooks and pens are most conducive to learning. Heading back to college this fall? You might want to leave the laptop in your dorm room. Some intriguing research has found that taking notes on a laptop can impede a student’s ability to retain information. It appears that typing fast – once hailed as a wonderful tool for gathering copious notes – gets in the way of processing and retaining lecture material.In an article for Harvard Graduate School of Education, Susan Dynarski explains how note-taking serves two purposes – (1) the physical storage of lecture content for review later, and (2) the cognitive encoding of that content. As students’ typing skills have improved over the years, they are able to transcribe rapidly a professor’s spoken words into sentences. Dynarski describes experiments conducted at Princeton and the University of California, where students were assigned either laptops or pens and paper for taking notes:“Because students can type faster than they can write, a lecturer’s words flow straight from the students’ ears through their typing fingers, without stopping in the brain for substantive processing. Students writing by hand, by contrast, have to process and condense the material if their pens are to keep up with the lecture. Indeed, in this experiment, the notes of the laptop users more closely resembled transcripts than summaries of the lectures.” Even when the laptop students were told to summarize and condense the lecture on their computers, the results did not change.

Ivy League Endowments Under Fire - In 2015, a New York Times op-ed acidly observed that Yale University had spent $480 million that year on fees for hedge fund managers to grow the university’s already massive endowment—while spending just $170 million on tuition assistance and fellowships for its students.“We’ve lost sight of the idea that students, not fund managers, should be the primary beneficiaries of a university’s endowment,” wrote law professor Victor Fleischer, whose 2006 proposal to change the tax treatment of “carried interest” became a liberal cause célèbre. “The private-equity folks get cash; students take out loans.”  Though Fleischer’s screed was not the first to attack elite college endowments—progressive commentator and former Clinton administration Secretary of Labor Robert Reich has also railed against them—it presaged a wave of criticism that has since become a storm. Shortly after Fleischer’s op-ed was published, New Yorker writer Malcolm Gladwell grabbed the baton, launching what’s become an ongoing, high-profile crusade against fat-cat university fund-raising. In 2016, he dedicated an entire podcast to the absurdity of billionaires donating millions in endowment dollars to schools that don’t need the money, and later waged a very public war against Stanford University for its fund-raising appeals to alumni. “If Stanford, with $22 billion in the bank, still has needy undergraduates, how are they spending the billions they ALREADY have?”   The GOP-led Congress has held at least two separate hearings examining the taxpayer subsidies that support endowments, which are now potentially under scrutiny as part of tax reform (assuming Congress gets there). Even Donald Trump has weighed in. “Many universities spend more on private equity fund managers than on tuition programs,” said then presidential candidate Trump last September, channeling Fleischer’s critique (albeit a little iffy on the details).   According to a 2016 analysis by the Education Trust, 75 percent of the nation’s total college endowment wealth is held by less than 4 percent of phenomenally wealthy schools.

The Looming Decline of the Public Research University: Four floors above a dull cinder-block lobby in a nondescript building at Ohio State University, the doors of a slow-moving elevator open on an unexpectedly futuristic 10,000-square-foot laboratory bristling with technology. It’s a reveal reminiscent of a James Bond movie. In fact, the researchers who run this year-old, $750,000 lab at OSU’s Spine Research Institute resort often to Hollywood comparisons. The complex and cutting-edge research here combines the expertise of the university’s medical and engineering faculties to study something decidedly commonplace: back pain, which affects as many as eight out of every ten Americans, accounts for more than 100 million annual lost workdays in the United States alone, and has accelerated the opioid addiction crisis. But university research is in trouble, and so is an economy more dependent on it than many people understand. Federal funding for basic research—more than half of it conducted on university campuses like this one—has effectively declined since 2008, failing to keep pace with inflation. This is before we take into account Trump administration proposals to slash the National Science Foundation (NSF) and National Institutes of Health (NIH) budgets by billions of dollars more.Trump’s cuts would affect all research universities, but not equally. The problem is more pronounced at public universities than privates, and especially at public institutions in the Midwest, which have historically conducted some of the nation’s most important research. These schools are desperately needed to diversify economies that rely disproportionately on manufacturing and agriculture and lack the wealthy private institutions that fuel the knowledge industries found in Silicon Valley or along Boston’s 128/I-95 corridor. Yet many flagship midwestern research universities are being weakened by deep state budget cuts. 

Americans Losing Faith in College Degrees, Poll Finds - WSJ - Americans are losing faith in the value of a college degree, with majorities of young adults, men and rural residents saying college isn’t worth the cost, a new Wall Street Journal/NBC News survey shows. The findings reflect an increase in public skepticism of higher education from just four years ago and highlight a growing divide in opinion falling along gender, educational, regional and partisan lines. They also carry political implications for universities, already under public pressure to rein in their costs and adjust curricula after decades of sharp tuition increases. Overall, a slim plurality of Americans, 49%, believes earning a four-year degree will lead to a good job and higher lifetime earnings, compared with 47% who don’t, according to the poll of 1,200 people taken Aug. 5-9. That two-point margin narrowed from 13 points when the same question was asked four years earlier. The shift was almost entirely due to growing skepticism among Americans without four-year degrees—those who never enrolled in college, who took only some classes or who earned a two-year degree. Four years ago, that group used to split almost evenly on the question of whether college was worth the cost. Now, skeptics outnumber believers by a double-digit margin. Conversely, opinion among college graduates is almost identical to that of four years ago, with 63% saying college is worth the cost versus 31% who say it isn’t. Big shifts occurred within several groups. While women by a large margin still have faith in a four-year degree, opinion among men swung significantly. Four years ago, men by a 12-point margin saw college as worth the cost. Now, they say it is not worth it, by a 10-point margin. Likewise, among Americans 18 to 34 years old, skeptics outnumber believers 57% to 39%, almost a mirror image from four years earlier.

Wasted time and money on undergraduate classes - Hechinger Report - Undergraduate students are taking too many classes. That may sound like a nice problem to have: Why not learn more than you have to? But consider that the average graduate of a four-year college takes the equivalent of a full extra semester of classes, or an additional 12 to 15 credits, paying thousands of dollars of extra tuition, and for many, incurring debt to do it.The problem is far more pronounced for community college students, who make up 40 percent of all undergraduate students in the United States. Students who obtain a two-year associate’s degree typically complete a whopping 22 excess credits, according to a July 2017 report by Complete College America, an advocacy group that tracks these figures. That’s three-quarters of an entire academic year on top of the two-year program. For part-time students, that’s years of needless courses.  “Students are entering community colleges to save money, but if you end up taking excess credits, you’re not really saving money.” Jenkins plans to release a working paper next month (October 2017) showing that community college students in one state who transfer to four-year schools within their state end up with 29 excess credits. It was 27 credits in another state that Jenkins studied.That’s time and money that low-income working students don’t have. Many are on federal financial aid, making it a burden on taxpayers as well.  Taxpayers incur additional costs because 60 percent of community college budgets are subsidized by state and local governments. One study by the Greater Texas Foundation found that excess credits cost students and taxpayers $120 million annually in that state.

DeVos ends agreement to work on student loan fraud | TheHill: The Education Department on Friday announced it will stop working with the Consumer Financial Protection Bureau (CFPB) to police student loan fraud. The department, now led by Education Secretary Betsy DeVos, canceled agreements with the CFPB from 2011 and 2013 that established the working relationship, arguing the agency violated its terms by overstepping its boundaries. Education Department officials said the CFPB violated the agreements by not directing complaints about Title IV student loans to the department within 10 days; instead, the bureau addressed the cases. The Education officials said the department “takes exception to the CFPB unilaterally expanding its oversight role to include the Department’s contracted federal loan servicers,” and called it “characteristic of an overreaching and unaccountable agency.” “The CFPB is using the Department’s data to expand its jurisdiction into areas that Congress never envisioned,” wrote Kathleen Smith, acting assistant secretary for postsecondary education, and A. Wayne Johnson, chief operating officer for federal student aid. CFPB spokesman David Mayorga said the bureau was "surprised and disappointed" by the Education Department's move, and that CFPB hadn't heard from Education about any concerns. "The Consumer Bureau has statutory responsibilities to protect student loan borrowers – like all consumers – from practices that violate the laws we enforce and would like to continue to work with the Education Department toward our shared goals," Mayorga said. "We will be reaching out to the Education Department to understand the basis of their concerns and will seek to address them in a manner consistent with the law and the interests of student loan borrowers.” Republican lawmakers and business-sector critics have long criticized the CFPB as violating its congressional mandate, saying it has attacked lenders and companies without due process. 

Illinois Shorting Pensions, Again -  The Illinois state pension funds are among the worst-funded in the nation. Yet, a new state law allows less money to be put toward that purpose. The largest state pension system covers Illinois teachers outside of Chicago. Each year, an estimate is made on how much the state should contribute. But a change approved this summer means Illinois is paying a half a billion dollars less than that amount. Dave Urbanek, with the Teachers Retirement System, said the state is following the law and that's the problem. “Yes, they are providing what they are supposed to provide. But that is not the actuarially correct amount,” he said. “The bottom line is, they are shorting the system of money that should be coming in to the Teacher's Retirement System." It's all tied to something called "smoothing", a term that means the state can take longer, up to five years, to cover changes in the contribution amount. All of the pension funds are impacted. TRS has $71 billion in unfunded liability. The TRS Board last fall certified a state contribution of $4.564 billion. The revised amount, based on the new law, is $4.034 billion. Actuaries estimate for the state contribution to be at "full funding" for the year, $6.873 billion would be needed. So Illinois will come in well below that level. "It's another example of kicking the can,” said Urbanek. “You're not paying the full cost in one year. You're paying 20-percent of the cost in one year. But you still have to pay the full cost down the road." Lawmakers did sign off on other new laws, including creation of a Tier 3 plan that is designed to slow the growth of future pension costs. But Urbanek said that does nothing to bring down the current debt factor for those now in the system.

Pension Fund Problems Worsen in 43 States -- The news continues to worsen for America’s public pensions and for the people who depend on them. The median funding ratio—the percentage of assets states have available for future payments to retirees—declined to 71.1 percent in 2016, from 74.5 percent in 2015 and 75.6 percent in 2014. Only six states and the District of Columbia have narrowed their funding gaps; New York did best, going from 90.6 percent to 94.5 percent. D.C. is now overfunded. By contrast, New Jersey, Kentucky and Illinois continue to lose ground and now have only about one third of the money they need to pay retirement benefits. And three states had double-digit declines in their pension funding ratios in the past year: Colorado, Oregon and Minnesota—though some of this can be attributed to actuarial changes in the way pension liabilities are calculated. We’ve ranked the states by the size of their funding gap. The lower the funding ratio, the more money the state has to come up with to meet its pension obligations

Failing or Doing Fine? How Obamacare’s Marketplaces Are Shaping Up for 2018 -- Seventy-thousand Obamacare enrollees in Virginia may be without insurance options next year after Optima Health Plan announced Wednesday that it is reducing its presence in the state. Optima, which served in 35 of the state's counties and county-equivalents in 2017, had planned to cover nearly the entire state next year. Instead, Optima will exit about half of the counties it served in 2017 and enter only the Charlottesville area, Halifax County and Mecklenburg County.Optima told regulators that it “anticipates a substantial increase in membership due to the recent announcement of market exits by other issuers.” Several carriers including Anthem, Aetna and UnitedHealth have announced plans to exit Virginia entirely next year.A spokesman for the state’s insurance regulator said that the department “is engaged in serious ongoing discussions with potential carriers to try to fill the gaps.” This year, there were 70,356 Virginians enrolled in the 63 counties where no insurers currently plan to sell plans through the Affordable Care Act's markets.Anthem also announced Wednesday that it is exiting the 61 Kentucky counties where CareSource offers plans. Anthem will remain in 59 Kentucky counties that otherwise would not have marketplace options, as it did recently in Missouri and Georgia. Every summer, insurance companies are required to submit their Affordable Care Act marketplace plans for the upcoming year to state insurance agencies. Companies are still deciding where to offer plans in 2018—and how much to charge for them. Each year some companies exit, some expand and others stay put. Bloomberg News is analyzing these filings as they’re released and speaking with insurers and state agencies to learn how the marketplaces are shaping up for 2018. Based on the latest data, most of the 12 million people who got health insurance through Obamacare’s individual marketplaces will have the same number of companies to choose among next year as they did in 2017. These maps will change as insurers finalize their plans before signing contracts in the fall.

Frustration mounts over premiums for individual health plans - ABC News -  Millions of people who buy individual health insurance policies and get no financial help from the Affordable Care Act are bracing for another year of double-digit premium increases, and their frustration is boiling over. Some are expecting premiums for 2018 to rival a mortgage payment. What they pay is tied to the price of coverage on the health insurance markets created by the Obama-era law, but these consumers get no protection from the law's tax credits, which cushion against rising premiums. Instead they pay full freight and bear the brunt of market problems such as high costs and diminished competition. On Capitol Hill, there's a chance that upcoming bipartisan hearings by Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., can produce legislation offering some relief. But it depends on Republicans and Democrats working together despite a seven-year health care battle that has left raw feelings on both sides.The most exposed consumers tend to be middle-class people who don't qualify for the law's income-based subsidies. They include early retirees, skilled tradespeople, musicians, self-employed professionals, business owners, and people such as Sharon Thornton, whose small employer doesn't provide health insurance. "We're caught in the middle-class loophole of no help," said Thornton, a hairdresser from Newark, Delaware. She said she's currently paying about $740 a month in premiums, and expects her monthly bill next year to be around $1,000, a 35 percent increase. "It's like buying two new iPads a month and throwing them in the trash," said Thornton, whose policy carries a deductible of $6,000. 

Another Thing Disappearing From Rural America: Maternal Care - Maternity care is disappearing from America’s rural counties, and for the 28 million women of reproductive age living in those areas, pregnancy and childbirth are becoming more complicated — and more dangerous. That’s the upshot of a new report from the Rural Health Research Center at the University of Minnesota that examined obstetric services in the nation’s 1,984 rural counties over a 10-year period. In 2004, 45 percent of rural counties had no hospitals with obstetric services; by 2014, that figure had jumped to 54 percent. The decline was greatest in heavily black counties and in states with the strictest eligibility rules for Medicaid. The decrease in services has enormous implications for women and families, says Katy B. Kozhimannil, an associate professor in health policy who directs the Minnesota center’s research efforts. Rural areas have higher rates of chronic conditions that make pregnancy more challenging, higher rates of childbirth-related hemorrhages — and higher rates of maternal and infant deaths. And because rural counties tend to be poorer, any efforts to revamp or slash Medicaid could hit rural mothers especially hard. We spoke with Kozhimannil about the new study and the implications for maternal care. (The conversation has been edited and condensed.)

This Silent Public-Health Crisis Costs The US $150 Billion A Year  The opioid epidemic isn’t the only public-health crisis costing the economy hundreds of billions of dollars. According to the Trust for America’s Health’s annual “State of Obesity” report, nearly 40% of American adults are obese or overweight.  And collectively, they will add some $150 billion to the cost of health care, and billions more in lost productivity. Obesity rates have finally stabilized after having nearly tripled since the CDC first began tracking them in 1960. They’ve doubled since the 1980s. Particularly problematic is childhood obesity, which is correlated with poor performance and school and other factors that could impact a child’s wellbeing into adulthood. According to the study, obesity disproportionately affects low-income Americans: “Obesity disproportionately affects low-income and rural communities as well as certain racial and ethnic groups, including Blacks, Latinos and Native Americans. Societal inequities contribute to these disparities.  Their neighborhoods may often be food deserts, having small food outlets and fast-food restaurants that sell and advertise unhealthy food and beverages, but lacking those with fresh and healthy foods at affordable prices. Thus, addressing the obesity epidemic is also a fight for health equity.” The report, which is accompanied by charts and maps, illustrates how obesity rates vary across different regions, with West Virginia (and a preponderance of poor, South states)having the highest obesity rate among adults, at 37.7% Colorado, meanwhile, has the nation’s lowest with 22.3%. Mississippi wins the superlative for highest childhood-obesity rate at 21.7%, with Oregon owning the lowest, at 9.9%.

Low-fat diet could kill you, major study shows: Low-fat diets could raise the risk of early death by almost one quarter, a major study has found. The Lancet study of 135,000 adults found those who cut back on fats had far shorter lives than those enjoying plenty of butter, cheese and meats. Researchers said the study was at odds with repeated health advice to cut down on fats. Those doing so tended to eat far too much stodgy food like bread, pasta and rice, the experts said, while missing out on vital nutrients. Participants eating the highest levels of carbohydrates – particularly refined sugars found in fizzy drinks and processed meals – faced a 28 per cent higher risk of early death. The NHS cautions against having too much saturated fat, on the grounds it raises cholesterol levels, increasing the risk of heart disease. But the latest research, presented at the European Society of Cardiology Congress, in Barcelona found those with low intake of saturated fat raised chances of early death by 13 per cent compared to those eating plenty. And consuming high levels of all fats cut mortality by up to 23 per cent. The Canadian study tracked eating patterns and death rates across 18 countries.“Our data suggests that low fat diets put populations at increased risk for cardiovascular disease. “Loosening the restriction on total fat and saturated fat and imposing limits on carbohydrates when high to reduce intake to moderate levels would be optimal.” He said getting the balance of fats and carbohydrates right was about achieving a “sweet spot” which was best for health - meaning around 35 per cent of calories should come from fats. 

Fentanyl Overtakes Heroin as Leading Cause of U.S. Drug Deaths - NYT - The first governmental account of nationwide drug deaths in 2016 shows overdose deaths growing even faster than previously thought.Drug overdoses killed roughly 64,000 people in the United States last year, according to the first governmental account of nationwide drug deaths to cover all of 2016. It’s a staggering rise of more than 22 percent over the 52,404 drug deaths recorded the previous year — and even higher than The New York Times’s estimate in June, which was based on earlier preliminary data. Drug overdoses are expected to remain the leading cause of death for Americans under 50, as synthetic opioids — primarily fentanyl and its analogues — continue to push the death count higher. Drug deaths involving fentanyl more than doubled from 2015 to 2016, accompanied by an upturn in deaths involving cocaine and methamphetamines. Together they add up to an epidemic of drug overdoses that is killing people at a faster rate than the H.I.V. epidemic at its peak. This is the first national data to break down the growth by drug and by state. We’ve known for a while that fentanyls were behind the growing count of drug deaths in some states and counties. But now we can see the extent to which this is true nationally, as deaths involving synthetic opioids, mostly fentanyls, have risen to more than 20,000 from 3,000 in just three years. Deaths involving prescription opioids continue to rise, but many of those deaths also involved heroin, fentanyl or a fentanyl analogue. There is a downward trend in deaths from prescription opioids alone. At the same time, there has been a resurgence in cocaine and methamphetamine deaths. Many of these also involve opioids, but a significant portion of drug deaths — roughly one-third in 2015 — do not. The explosion in fentanyl deaths and the persistence of widespread opioid addiction have swamped local and state resources. Communities say their budgets are being strained by the additional needs — for increased police and medical care, for widespread naloxone distribution and for a stronger foster care system that can handle the swelling number of neglected or orphaned children.

Want to understand how big pharma created the opioid epidemic? Read this report. A major pharmaceutical company lied and misrepresented its powerful opioid product for profit, putting people at risk in the worsening opioid epidemic, according to a new bombshell report by Sen. Claire McCaskill (D-MO). The report, which McCaskill’s office has described as the first round of an investigation into opioid companies, details the workings of Insys Therapeutics, which manufactures the fentanyl drug Subsys. According to the report, Insys misrepresented Subsys to get insurers to pay for it, letting the company sell its product to people who didn’t need and shouldn’t have access to such a powerful drug.  “In the case of Subsys patient Sarah Fuller, an audio recording reveals that an Insys employee repeatedly misled representatives of Envision Pharmaceutical Services to obtain approval for her prescription,” the report found. “The result, in the case of Ms. Fuller, was death due to allegedly improper and excessive Subsys use.” McCaskill’s report provides a grim snapshot of how the opioid epidemic became the deadliest drug overdose crisis in US history: Driven by a quest for profit, opioid makers and distributors misled doctors, insurers, patients, and the general public about their drugs — claiming that they are safe and effective for conditions that they would turn out to be neither safe nor effective for. The drugs proliferated across the US, and tens of thousands of people have died annually for years as a result of opioid overdoses.

America's Overlooked Addiction Crisis --  As alarms over the opioid crisis sound ever louder, a larger and more expensive substance problem in the U.S. is quietly growing much worse. One in eight Americans abuses alcohol, a new study finds, a 50 percent increase since the start of the century. Alcohol abuse is as old as civilization itself, of course, but quantifying its costs is a more recent endeavor. Alcohol is responsible for one in 10 deaths among working-age Americans -- from accidents as well as illnesses. There are almost 90,000 alcohol-related deaths in America every year. Excessive drinking, mainly binge drinking, costs some $250 billion a year in lost productivity, health care and other expenses. The toll in personal suffering and ruined lives is incalculable. Yet there has been a strange reluctance to fight back with the weapons known to work: restrictions on alcohol sales and advertising and, even more effective, higher taxes on alcohol. The federal tax on spirits (about 21 cents per ounce of alcohol; taxes on beer and wine are less than half that) has not changed since 1991, and over the past few decades the inflation-adjusted cost of drinking has fallen considerably. Many states have likewise neglected to index their alcohol taxes to inflation.  There are other ways besides simply raising taxes -- setting a minimum price for every unit of alcohol a drink contains, for example. Unlike taxes, which can be selectively absorbed by wholesalers or retailers, minimum prices must be borne by the drinkers. Five years ago, Scotland passed a law meant to set a 50-pence (65-cent) minimum price for every unit a drink contains, though the Scotch Whisky Association has so far kept it tied up in court.

Report: Drug company faked cancer patients to sell drug - CNN - When Insys Therapeutics got approval to sell an ultra-powerful opioid for cancer patients with acute pain in 2012, it soon discovered a problem: finding enough cancer patients to use the drug. To boost sales, the company allegedly took patients who didn't have cancer and made it look like they did. The drug maker used a combination of tactics, such as falsifying medical records, misleading insurance companies and providing kickbacks to doctors in league with the company, according to a federal indictment and ongoing congressional investigation by Sen. Claire McCaskill, a Democrat from Missouri. The new report by McCaskill's office released Wednesday includes allegations about just how far the company went to push prescriptions of its sprayable form of fentanyl, Subsys. Because of the high cost associated with Subsys, most insurers wouldn't pay for it unless it was approved in advance. That process, likely familiar to anyone who's taken an expensive medication, is called "prior-authorization." So Insys set up an elaborate charade -- with employees that pretended to be doctors' offices -- to fool insurance companies into approving the drug, according to the Senate report. 

New Pneumonia In Chinese Hospitals Is Drug-Resistant, Deadly And Contagious -- In the past few years, there have been so many "superbugs" appearing in hospitals around the world that we here at Goats and Soda haven't had the time or resources to report on all of them. But a new type of pneumonia emerging in China seems so important that we dropped what we were doing to write about it. Doctors in Hangzhou in southeastern China have detected a a type of pneumonia that is both highly drug-resistant and very deadly. It also spreads easily. The bacterium — a type of Klebsiella pneumoniae — killed five people in an intensive care unit in Hangzhou in 2016, researchers reported Tuesday in the journal Lancet Infectious Diseases. "This fatal outbreak happened in a brand new hospital with very good hygiene," says microbiologist Sheng Chen, who co-led the study at the Hong Kong Polytechnic University. "Drug-resistant strains shouldn't have appeared so quickly." The microbe can fight off all drugs available in China, Chen says. "We don't have anything in China to stop it," he says. "There is a drug available in the U.S. that should be effective against it, but we haven't tested it yet." In the outbreak, the five patients who died were all older than 53. They were all on ventilators after undergoing major surgeries. And they died from severe lung failure, multiorgan failure or septic shock, the researchers found. These bacteria aren't like other multidrug-resistant pneumonia reported before. They are a fusion of two dangerous forms.

Millions of infected Brazilian mosquitoes to tackle dengue - Brazilian scientists on Tuesday began to unleash the first of millions of mosquitoes infected with a bacteria meant to prevent the insects from transmitting the dengue virus to humans. Thousands of Aedes aegypti mosquitoes carrying the bacteria were released in front of journalists by scientists from the Fiocruz institute in Rio de Janeiro. The hope is that they will then breed and spread the bacteria, denting the insect population's ability to spread dengue and other viruses including Zika and chikungunya. Scientists have been preparing the project -- developed by Australians who first put the Wolbachia bacteria into mosquitoes -- since last year. Dengue causes fevers, rashes, nausea and in some cases can be fatal, while Zika has been blamed for serious birth defects. In 2016, fears over Zika led to the United Nations health body to declare an international health emergency, ending in November. Fiocruz plans to release 1.6 million infected mosquitoes a week, later stepping that up to three million. "We found that when an Aedes aegypti mosquito has this (bacteria), it blocks or reduces the capacity of the mosquito to transmit viruses like dengue, Zika and chikungunya," said the head of the dengue program at Fiocruz, Luciano Moreiro. "So the idea is that when they are released, they will transmit this, as if they were immunizing the other mosquitoes and therefore transmission will be reduced.

Hookworm Persists as US Public Health Problem -- Hookworm, a disease of extreme poverty thought largely to have been eradicated in the United States, persists as a public health problem in some populations, according to a peer-reviewed paper, Human Intestinal Parasite Burden and Poor Sanitation in Rural Alabama, published yesterday in the American Journal of Tropical Medicine and Hygiene. The disease affects 430 million people worldwide, largely in Africa and Asia, causing iron deficiency, impaired cognitive development, and stunting in children, and is considered a neglected tropical disease (NTD). As reported by The Guardian in Hookworm, a disease of extreme poverty, is thriving in the US south. Why? :The study, the first of its kind in modern times, was carried out by the National School of Tropical Medicine at Baylor College of Medicine in conjunction with Alabama Center for Rural Enterprise (ACRE), a nonprofit group seeking to address the root causes of poverty. In a survey of people living in Lowndes County, an area with a long history of racial discrimination and inequality, it found that 34% tested positive for genetic traces of Necator americanus.  As recently as the 1930s, the southern United States had a high prevalence of hookworm infections, which affected intellectual performance and caused lethargy, according to How a Worm Gave the South a Bad Name. Initial surveys of populations at that time found that as much as three-quarters of the populations of certain areas were infected. “Hookworm is a 19th century disease that should by now have been addressed, yet we are still struggling with it in the United States in the 21st century,” said Catherine Flowers, ACRE’s founder, as quoted in The Guardian.

The Slow Poisoning of Our Soldiers, Families on U.S. Bases -- While it is generally understood that the U.S. Armed Forces are among the world’s largest polluters, it is not generally recognized that some of the most significant pollution occurs here in the United States at military bases and facilities.  As most pollutants have the greatest effect on those whose immune systems are not fully developed, their impact on military dependent communities, whose populations are disproportionately young children and pregnant women, are of particular concern.   According to an explosive report by the Center for Public Integrity in August, polluted water and soil have been found at approximately 400 active and closed military bases in the United States. Of these, 149 have been designated Superfund Sites by the U.S. Environmental Protection Administration (EPA) under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).  Among the most significant contaminants are perfluorinated chemicals (PFCs), the basis for chemical foams used to fight aviation fires which were used throughout the Department of Defense (DoD) from 1970 to 2015 at almost every location with a significant airfield. PFCs have been recognized as a significant environmental threat since at least the 1950s, when DuPont chemicals began purchasing PFCs from 3M and was told by 3M to dispose of them only by incineration or at a chemical waste facility. Earlier this year, DuPont and Chemours (a DuPont spin-off) agreed to a $670.7 million settlement in a PFC lawsuit in the Mid-Ohio Valley. Added to the $350 million initial settlement, which was reached in 2004, the companies will have spent in excess of $1 billion on this lawsuit alone. Part of the $350 million initial settlement funded a six-year medical study of PFOA, one of the principle PFCs. This study determined “probable links” between PFOA and kidney cancer, testicular cancer, ulcerative colitis, high blood pressure, pregnancy-induced hypertension and thyroid disease. PFCs are a particularly difficult contaminant because they have a very low viscosity and their run-off quickly enters the water table. In addition, they bioaccumulate at high rates when individuals drink contaminated water.  Because of their persistence in the environment, it’s thought that these chemicals will contaminate drinking water for generations to come..

Millions Consumed Potentially Unsafe Water in the Past 10 Years - (video documentary) This report is part of a project on drinking water contamination in the United States produced by the Carnegie-Knight News21 program. As many as 63 million people – nearly a fifth of the country – from rural central California to the boroughs of New York City, were exposed to potentially unsafe water more than once during the past decade, according to a News21 investigation of 680,000 water quality and monitoring violations from the Environmental Protection Agency. The findings highlight how six decades of industrial dumping, farming pollution, and water plant and distribution pipe deterioration have taken a toll on local water systems. Those found to have problems cleaning their water typically took more than two years to fix these issues, with some only recently resolving decades-old violations of EPA standards and others still delivering tainted water, according to data from the agency’s Safe Drinking Water Information System. Many local water treatment plants, especially those in small, poor and minority communities, can’t afford the equipment necessary to filter out contaminants. Those can include arsenic found naturally in rock, chemicals from factories and nitrates and fecal matter from farming. In addition, much of the country’s aging distribution pipes delivering the water to millions of people are susceptible to lead contamination, leaks, breaks and bacterial growth. Experts warn contamination in water can lead to cancer, gastrointestinal diseases and developmental delays in children.The EPA estimates local water systems will need to invest $384 billion in the coming decades to keep water clean. The cost per person is more than twice as high in small communities as it is in large towns and cities. The EPA and water treatment industry consider the coming years a crucial period for American drinking water safety as pipes and treatment plants built in the mid-20th century reach the end of their useful lives.

Hudson River Dumps 300 Million Microfibers Into Atlantic Ocean Daily - A new study highlights how our laundry contributes to major oceanic pollution. The Hudson River could be dumping about 300 million clothing fibers into the Atlantic Ocean per day, according to new research published in the Marine Pollution Bulletin. For the study, researchers collected 142 water samples throughout the length of the Hudson River and found about one microfiber per liter. That's a lot when you consider that this endless stream of human-made fibers ultimately ends up in our oceans. "The ocean is the endgame for plastics ," marine biologist Abigail Barrows, a principal investigator with Adventure Scientists, told PBS Newshour . About half the samples were plastic microfibers and the other half were non-plastic microfibers such as cotton or wool. Microfibers get flushed into our waterways when we wash our clothing or other textiles. Notably, the researchers did not find more fibers near wastewater treatment plants or high-population areas, suggesting that microfiber pollution is pervasive throughout the river. "There was no pattern across the whole Hudson River—from Lake Tear of the Clouds, an alpine remote beauty, down to the heaving, thriving Manhattan," Rachael Miller, a co-author on the study, told PBS. "It was a real surprise."  

Plastic particles found in most tap water samples across the glob - Sure we’ve got plastic in the ocean and marine animals. We’ve got plastic compounds on our plates thanks to the fish that consume it and we’ve even got bits of plastic in our salt. Plastic, it’s what’s for dinner! And now to top it all off, it’s invading our tap water as well. Damian Carrington at The Guardian reports on an investigation by the non-profit news organization, Orb Media, finding microplastic contamination in tap water in more than a dozen countries around the globe. In total, 83 percent of the samples were found to be contaminated with plastic fibers. Which, given its ubiquity in the environment, sadly may not be that surprising. Carrington writes: The scale of global microplastic contamination is only starting to become clear, with studies in Germany finding fibres and fragments in all of the 24 beer brands they tested, as well as in honey and sugar. In Paris in 2015, researchers discovered microplastic falling from the air, which they estimated deposits three to 10 tonnes of fibres on the city each year, and that it was also present in the air in people’s homes. For the Orb research, scientists tested 159 samples from countries near and far, including the United States, Europe countries, Uganda, Ecuador and Indonesia.  The analyses measured particles of more than 2.5 microns in size (one micron equals 1 / 25400 inch). With an average of 83 percent of samples harboring plastic, the U.S. fared the worst with a whopping contamination rate of 94 percent. And it’s not like the samples were taken from sketchy locations; plastic fibers were found in tap water coming from places like Congress buildings, the US Environmental Protection Agency’s headquarters, and Trump Tower in New York.  Lebanon and India had the next highest rates, Carrington reports, with the UK, Germany and France having the lowest rates – though still an abysmal 72 percent.

You're Probably Drinking Plastic in Your Tap Water - We know that plastics clog our oceans , lakes and the stomachs of marine animals, but a first-of-its-kind investigation from Orb Media found the pervasive material in tap water supplies around the world, too. Orb, a digital media nonprofit, worked with researchers at the State University of New York and the University of Minnesota and analyzed 159 drinking water samples across five continents over a ten-month period. The results indicated that plastics are just about everywhere—83 percent of the samples tested positive for the presence of tiny plastic particles, aka microplastics . "Microscopic plastic fibers are flowing out of taps from New York to New Delhi," the study states. "From the halls of the U.S. Capitol to the shores of Lake Victoria in Uganda, women, children, men, and babies are consuming plastic with every glass of water." The U.S. tied with Beirut, Lebanon for the highest plastic fiber contamination rates, at 94 percent. U.S. samples were collected from 33 sites, including the U.S. Capitol complex, the Environmental Protection Agency ( EPA ) headquarters in Washington, D.C. and the Trump Grill in New York. Notably, an EPA spokeswoman told PRI that the U.S. doesn't have a safety standard for plastic in drinking water, nor are plastics on the agency's Contaminant Candidate List of unregulated substances that are known to appear in tap water. European nations including France, Germany and the UK tested lowest for contamination, but were still at 72 percent.  The Orb research points out that people are surely consuming these non-biodegradable pollutants in our water and food, and calls on scientists to study what eating plastic could mean for human health .

 Lack of Meat Inspectors Puts Nations Food at Risk   – A veterinarians' group is warning American consumers that the food supply could be in danger because of a growing shortage of federal meat and poultry inspectors. Currently, the U.S. Department of Agriculture has hundreds of job openings for veterinarians who serve as inspectors in the country's slaughterhouses, and the agency may not have enough money in the next budget to fill those positions. Michael Gilsdorf, a former USDA inspector and former CEO of the National Association of Federal Veterinarians, says the agency's overall vacancy rate is 12 percent, but is much higher in some regions. "It's a chronic problem, but it's worse right now,” he states. “They've had a problem for the last five years with a shortage but it's never been this bad. In fact, it was last month when we were told that it was three of the different districts had over a 20 percent vacancy rate." Veterinarians with the USDA's Food Safety Inspection Service inspect beef, pork and poultry products at slaughterhouses and processing centers for potentially deadly pathogens such as E. coli, salmonella and listeria. Gilsdorf says the shortage puts the public health, as well as the economic health of the meat processing industry, at risk.

ISIS Urges Supporters To Poison Food At US Grocery Stores - After urging its supporters in the west to turn cars into weapons, guidance that inspired terror attacks in the UK, Spain and France, ISIS is now calling for sympathizers to poison the food in US supermarkets with cyanide, according to SITE.  In recent days, channels associated with the terrorist army have posted calls for attacks on Europe, Russia and the United States to mark the occasion of the Islamic "Sacrifice Feast" Eid al Adha. In the third part of an English-language series on jihad, IS advised would-be attackers to inject food for sale in markets with cyanide poison. According to Spiesa, the organization has tested these methods on prisons, causing horrifically painful deaths.“The Islamic State group used prisoners as “human guinea pigs,” carrying out chemical weapons experiments in order to plan for attacks against the West, documents found in Mosul have revealed. The papers detailing the tests, which led to the agonizing deaths of prisoners, were discovered at Mosul University in January when it was recaptured by Iraqi special forces. The documents verified by United States and British forces were detailed by The Times in a report published Saturday.Prisoners had their food and water contaminated by the sprinkling of chemicals found in easily accessible pesticides. The US and Britain now fear that the same methods could be used on a larger scale to contaminate food supplies in the West.”

Where Corn Pollutes America Most, and Who’s Responsible - Labor Day saw the quiet unveiling of a project that provides minute detail—down to individual factories—of the movement of corn along America’s sprawling meat and ethanol supply chains.The ramifications of being able to tie pollution and water use to specific amounts of desirable commodities, and in specific locations, cannot be overstated at a time of accelerating climate change. The opaque title of the Sept. 4 study, however, fails to give away what’s going on. “Subnational mobility and consumption-based environmental accounting...” In English, what the researchers have done is broken out granular geographic information about where corn is produced and transported within two industries that consume it most—meat and ethanol. Many agricultural staples have enormous environmental consequences. Corn’s side-effects—fertilizer use and emissions, transportation pollution, water uptake, land change—are particularly noteworthy given the enormous scale of U.S. production. As the image atop this story shows, satellite chlorophyll-sensors can “see” plant growth in the U.S. corn belt from space.Previously, companies evaluating the environmental side-effects of the corn they buy often had to work from national estimates, according to the study’s authors. The impacts are well-understood at the higher-levels, but lacked critical specificity for individual producers. With this new research, meat and poultry firms for example will be able to estimate that a bushel of corn produced in western South Dakota may be three or four times as carbon-intensive as a bushel from southern Minnesota.  “It matters for these companies where stuff is coming from,” said Jennifer Schmitt, a co-author of the study in Proceedings of the National Academy of Sciences, and director of the University of Minnesota’s NorthStar Initiative for Sustainable Enterprise.

Monsanto fights to sell Arkansas farmers herbicide linked to crop damage (Reuters) - Monsanto filed a petition on Thursday asking Arkansas agricultural officials to reject a proposed date next year that would end sprayings of the herbicide dicamba, which has been linked to crop damage across the U.S. farm belt.  A state task force recommended last month that Arkansas bar sprayings after April 15, 2018, to protect plants vulnerable to the chemical, after farmers complained that soybeans and other crops were damaged when the weed killer drifted away from where it was sprayed this summer.  The recommendation amounts to an “unwarranted and misinformed ban on dicamba” because the chemical is designed to be sprayed during the summer over genetically engineered crops, according to Monsanto.  The deadline “is not based on scientific data, much less on any scientific consensus” about crop damage attributed to the chemical, the company said in a filing with the Arkansas State Plant Board.  Monsanto, BASF and DuPont sell dicamba herbicides under different brand names to be sprayed on top of growing U.S. soybeans and cotton modified by Monsanto to tolerate the weed killer.   Chemical companies have blamed the damage on farmers misusing dicamba.  Specialists, though, say the weed killers are risky because they have a tendency to vaporize and drift across fields, a process known as volatility. High temperatures can increase volatility.  Monsanto, in its filing, said weed scientists who investigated the reports of damage from dicamba predicted it would probably not cause significant yield losses.  The company also called into question the objectivity of Arkansas weed experts Jason Norsworthy and Ford Baldwin, whom Monsanto said advocated bans on dicamba.  Monsanto said in its petition that Baldwin works as a paid consultant for Bayer Crop Science, which makes glufosinate, a competing herbicide, and that he is serving as a retained expert witness for plaintiffs in a lawsuit against Monsanto involving dicamba.

Dems prep for major fight over Trump USDA science pick | TheHill: President Trump’s pick to be the U.S. Department of Agriculture’s (USDA) chief scientist is on track to face one of the rougher confirmation battles of the administration. Democrats are girding for an all-out battle against Sam Clovis’s nomination to be USDA’s under secretary for research, education and economics, a position that would see him overseeing billions of dollars in research spending and serving as a cross-departmental science czar.Clovis has been criticized for lacking scientific credentials, and he disagrees with the scientific consensus on climate change. Further complicating Clovis’s confirmation process, CNN uncovered a number of objectionable statements he has made on topics like race and politics. Clovis, an Air Force veteran, former economics professor and former radio host, once wrote that former President Obama was being “given a pass because he is Black,” called former Attorney General Eric Holder Eric H. HolderDems prep for major fight over Trump USDA science pick Congress is finally working to defund civil asset forfeiture Sam Clovis is a terrible pick for the USDA MORE a “racist black,” declared that homosexuality is a choice, and called progressives both “race traitors” and “race traders,” CNN reported. Clovis is now squarely in the sights of Senate Democrats, who are likely to give him the biggest fight seen so far in the Trump administration for a non-Cabinet position. 

World’s soils have lost 133bn tonnes of carbon since the dawn of agriculture -- The world’s soils have lost a total of 133bn tonnes of carbon since humans first started farming the land around 12,000 years ago, new research suggests. And the rate of carbon loss has increased dramatically since the start of the industrial revolution.The study, which maps where soil carbon has been lost and gained since 10,000BC, shows that crop production and cattle grazing have contributed almost equally to global losses.Understanding how agriculture has altered soil carbon stocks is critical to finding ways to restore lost carbon to the ground, another scientist tells Carbon Brief, which could help to buffer the CO2 accumulating in the atmosphere. The top metre of the world’s soils contains three times as much carbon as the entire atmosphere, making it a major carbon sink alongside forests and oceans.Soils play a key role in the carbon cycle by soaking up carbon from dead plant matter. Plants absorb CO2 from the atmosphere through photosynthesis, and pass carbon to the ground when dead roots and leaves decompose.But human activity, in particular agriculture, can cause carbon to be released from the soil at a faster rate than it is replaced. This net release of carbon to the atmosphere contributes to global warming.New research, published in the Proceedings of the National Academy of Sciences (pdf), estimates the total amount of carbon that has been lost since humans first settled into agricultural life around 12,000 years ago. The research finds that 133bn tonnes of carbon, or 8% of total global soil carbon stocks, may have been lost from the top two metres of the world’s soil since the dawn of agriculture. This figure is known as the total “soil carbon debt”.

Iconic Monarch Butterflies Could Soon Be Extinct in North America’s West - A world-famous butterfly migration along the west coast of the US has reduced to a relative trickle in recent decades, indicating this amazing natural phenomenon could soon be a thing of the past.  The decline in western monarch populations has been evident since the 1980s. Now a new study is calling it; the end is nigh for this glorious butterfly. Researchers from Washington State University working with communities along the coast of California pooled data on butterfly numbers from across the state to create a single estimate of the western monarch's numbers.The news wasn't exactly optimistic – the population had declined to less than 5 percent of what it was about 35 years ago.  "In the 1980s, 10 million monarchs spent the winter in coastal California," says lead researcher Cheryl Schultz from Washington State University Vancouver."Today there are barely 300,000."  The western monarch (Danaus plexippus) has had a starring role in many nature documentaries of the mid-20th century, famous for accumulating in spectacular numbers that see entire trees and sections of woodland covered in a fluttery mass of striking black-and-orange wings. These gatherings are the result of an annual autumn migration that sees them travel from all across the continent, down to the warmer climes of California's coast to spend time soaking up the sunshine.  Eastern populations – which are also in serious decline – move instead across the border into Mexico to wait out the winter chill.

Killer Beetle Spreads Forest Destruction North -- An unwelcome invader from the south has begun to infiltrate the U.S., destroying property and reducing income—and this time the blame can be securely pinned to climate change .  The southern pine beetle ( Dendroctonus frontalis) from Central America, one of the most voracious of tree-killing infestations , has already made itself at home in southern New Jersey and could infect the northern U.S. and southern Canada by 2080.  Its destruction of trees in the southeast U.S. cost the nation 14 million cubic meters of timber—worth $1.7 billion—between 1990 and 2004.    Now it is gaining ground in more northern regions because even though the average increase in global temperatures has so far been modest, there have been significant rises in the lowest of the extreme temperatures of U.S. winters.  The beetle can overwinter in the tree bark and make itself at home even in a snowy world, but it cannot survive minimum air temperatures of between minus 14° and minus 20°C (7°F and -4°F).   As annual average temperatures in the northeastern U.S. are projected to rise between 2° and 6°C (35°F and 48°F) by 2100, with perhaps greater rises in the winter extremes, what scientists like to call "the climatic constraints" that limit such beetle invasions will probably recede dramatically. The destructive insect was found on Long Island in New York in 2014 and Connecticut in 2015. By 2050, 78 percent of the pitch pine forests of the U.S. Northeast, from southern Maine to Ohio, could be at the mercy of the invader.  It is predicted that, by 2060, the southern pine beetle will have settled in southern New England and, by 2080, will be able to infect 71 percent of the red pine and 48 percent of the jack pine across a vast area of the U.S. and southern Canada.

Climate change could wipe out a third of parasite species - Climate change could wipe out a third of all parasite species on Earth, according to the most comprehensive analysis to date.  Tapeworms, roundworms, ticks, lice and fleas are feared for the diseases they cause or carry, but scientists warn that they also play a vital role in ecosystems. Major extinctions among parasites could lead to unpredictable invasions of surviving parasites into new areas, affecting wildlife and humans and making a “significant contribution” to the sixth mass extinction already under way on Earth.  The new research, published in Science Advances, used the collection of 20m parasites held at the Smithsonian Institution’s Museum of National History in the US to map the global distribution of 457 parasites. The scientists then applied a range of climate models and future scenarios and found that the average level of extinctions as habitats become unsuitable for parasites was 10% by 2070, but extinctions rose to a third if the loss of host species was also included.  “Parasites seem like one of the most threatened groups on Earth.” The severity of the impact varied with the different climate scenarios. For example, a 20% loss of parasite native ranges in scenarios where carbon emissions are rapidly cut in the future rises to 37% if emissions continue unchecked.  “Parasites are obviously a hard sell,” said Carlson. “Even if you are grossed out by them – and there are obviously downsides for individual hosts and for humans – parasites play a huge role in ecosystems.” They provide up to 80% of the food web links in ecosystems, he said. Having a wide range of parasites in an ecosystem also means they compete with one another, which can help slow down the spread of diseases.  “If parasites go extinct, we are looking at a potential massive destabilisation of ecosystems [which] could have huge unexpected consequences,” Carlson said, with other parasites moving in to take advantage. “That doesn’t necessarily work out well for anyone, wildlife or humans.”

La Nina threatens early return: Kemp (Reuters) - Forecasts for an El Nino this winter have given way to the prospect of more La Nina-like conditions as sea surface temperatures in the central-eastern Pacific cool rapidly.Surface temperatures in the critical area of the Pacific have fallen to 0.2 degrees Celsius below average, down from 0.7 degrees above average in the week centred on June 28. The rapid cooling has forced meteorologists to reassess the outlook for the northern hemisphere winter. ( June, most forecasters were predicting a mild or moderate El Nino between December 2017 and February 2018. But the rapid cooling of the sea's surface in July and August now points to a shift towards more neutral conditions, or even La Nina developing.The U.S. National Oceanic and Atmospheric Administration (NOAA) has cut the probability of El Nino between December and February from 44 percent in its May forecast to just 16 percent in August.At the same time, it has doubled the probability of La Nina between December and February from 14 percent to 28 percent. The latest runs of NOAA's forecast models point to La Nina conditions developing by the end of 2017 and into early 2018.Surface temperatures in the central-eastern Pacific area are monitored by meteorologists because they correlate with a broader set of oceanic and atmospheric changes known as the El Nino-Southern Oscillation (ENSO). But the evolution of ENSO remains notoriously hard to predict. The warm phase forecast earlier this year proved to be very weak, failing to reach the threshold to qualify as a full El Nino, and then fizzled early. Something similar could happen with the current predictions of La Nina. Even if La Nina conditions develop in the next few months, it remains hard to predict their intensity or duration.

Trump: Drought-stricken Dakotas ‘better off’ than Harvey flood victims | TheHill: President Trump said the drought-stricken Dakotas are “better off” than cities flooded by Hurricane Harvey last month, and that his administration will make the drought "go away." “I know you have a little bit of a drought. They had the opposite, believe me,” Trump said during a tax reform speech in Mandan, N.D. “You’re better off. You are better off, they had the absolute opposite.” Trump also said he was surprised that droughts could happen "this far north."“We’re doing everything we can but you have a very serious drought. I just said to the governor, I didn’t know you had droughts this far north. Guess what — you have them,” he said. “We’re working hard on it, and it will disappear, it will all go away.” Hurricane Harvey dropped more than 50 inches of rain in some parts of Texas and Louisiana in late August, breaking the record for rainfall from a tropical storm or hurricane. Parts of the high plains, meanwhile, are suffering through a protracted drought. A federal drought monitor report issued last week said there were “long-term precipitation deficits” in parts of the Dakotas, Nebraska and Montana, where 41 percent of the state's pasture and range conditions are rated “very poor.” Trump said his Agriculture Department has been working closely with states in the region to alleviate the impact of the drought on farmers and ranchers. 

Montana Battles Wildfires Amid a Severe Drought - Montana has been burning for months, and there is still no end in sight. This summer, thousands of firefighters and hundreds of Montana National Guard members have been battling the flames of dozens of large and small wildfires across the state. Thousands of people have been affected by evacuations, and two firefighters have lost their lives. Montana is one of several states experiencing severe fires this year. Blazes flared up and down California, from Los Angeles — where a state of emergency was declared just this week — to well north of Sacramento. Wildfires in Idaho, Utah, Oregon, Washington and other Western states have smothered parts of the West in smoky, ashy air. Gov. Steve Bullock of Montana declared the wildfires a disaster last week, calling this “one of the worst fire seasons” in the state’s history. On Thursday, the National Interagency Fire Center reported, Montana had 21 active, large fires covering about 438,000 acres. It is not uncommon for wildfires to spring up in Montana during mid-to-late summer months, but 2017 has been different. The state is facing a severe drought, hotter and drier than any in recent memory. In a United States Senate legislative session on Wednesday, amid talk of Hurricanes Harvey and Irma, Senator Jon Tester, a Montana Democrat, stood up to show his colleagues a national map of drought conditions. It was a version of the U.S. Drought Monitor map, on which Montana is the site of a deep red blotch denoting “exceptional drought.” “The fact is, there is a large portion of land along our northern tier that is experiencing incredible drought, and Montana is in the middle of it all,” Mr. Tester said, adding that Congress “continues to bury its head in the sand” in the face of climate change.

Largest wildfire in Los Angeles history forces hundreds to evacuate (Reuters) - A wildfire on the northern edge of Los Angeles rapidly grew on Saturday into what the mayor called the largest blaze in the city's history, prompting the evacuation of hundreds of people and the closure of a major highway.The 5,000-acre (2,023-hectare) La Tuna Fire, named after the canyon area where it erupted on Friday, has led authorities to evacuate more than 700 homes in a north Los Angeles neighborhood and in nearby Burbank and Glendale, officials said. Authorities warned of erratic winds that could force them to widen the evacuation zone after the fire destroyed one house in Los Angeles on Saturday. "Other than that, no loss of any property," Los Angeles Mayor Eric Garcetti said at a news conference. "That is a pretty amazing thing." The fire was only 10 percent contained with more than 500 firefighters battling it. The blaze in thick brush that has not burned in decades was slowly creeping down a rugged hillside on Saturday toward houses, with temperatures in the area approaching 100 degrees Fahrenheit (38 degrees Celsius), the Los Angeles Fire Department said in an alert. "This fire, which broke out yesterday, we can now say is the largest fire in the history of L.A. city, in terms of its acreage," 

Wildfire in LA Burns 7,000 Acres During Record-Setting Heat Wave -- A fire in Los Angeles has burned more than 7,000 acres since erupting on Friday.  Officials reported Monday that the La Tuna fire, one the city's largest fires in decades by acreage, is now at least 30 percent contained.  The fire shut down the 210 Freeway and led to 700 evacuations in the region at its peak over the weekend, with Gov. Jerry Brown declaring a state of emergency Sunday. The fire spread in the midst of an intense and record-breaking heat wave in California over the past week. As reported by Climate Signals : "Extreme heat, years of ongoing drought , and tree die off—all fueled by climate change —are increasing wildfire risk in California. There is a significant, increasing trend in the number of large fires and the total area burned per year in the United States. The trend is most significant in the western mountainous regions and the Southwest. Looking at the records extending back over the 20th century, 13 of California's 20 largest wildfires burned since 2000. And the fingerprint of global warming has been formally identified in California's wildfires."  For more:   New York Times , LA Times , CNN , ABC7 , CBS , NBC LA , Mashable , MarketWatch , CBS/AP . Background: Climate Signals

As Hurricanes Slam The South, Shocking Images Show The Western US Is Literally On Fire -- Amid the aftermath of Hurricane Harvey and the impending destruction of Hurricane Irma, many Americans may not be aware that the western region of the country is suffering the opposite wrath of mother nature. From southern California to Washington, wildfires are engulfing thousands of acres of land and prompting thousands of evacuations. Many of the states battling the wildfires have been doing so allsummer. On Saturday, Washington Governor Jay Inslee declared a state of emergency across the state due to the risk of wildfires, and the National Weather Service warned that 26 of the state’s 39 counties were at very high or extreme risk. According to the Washington Department of Ecology, “[a]lmost all of WA [was] awash in wildfire smoke” on Sunday. The department noted air quality in many areas had suffered as a result. According to NASA satellite imagery, smoke is also being pushed eastward across the U.S.  Just one fire in Washington, east of the Cascades at Jolly Mountain in Kittitas County, was burning 15,000 acres as of Saturday. The Seattle Times reported that “[r]oads in that area have been closed and about 3,800 homes have received Level 2 and Level 3 evacuation orders. Level 3 is the most urgent notice.” The Eagle Creek fire, burning on both sides of the Columbia River Gorge in Washington and Oregon, has torched 10,000 acres while the Norse Peak Fire in Pierce County has burned 19,000 and prompted evacuation orders. It has beenburning since the middle of last month. As seen from Washington, the Eagle Creek Fire this morning as it burned all around Multnomah Falls #LiveOnK2   According to a map posted by the Northwest Interagency Coordination Center, wildfires are hitting various regions in both Washington and Oregon (they were also plaguing the region last month). Newsweek reported Tuesday that on Saturday, over 150 hikers were stranded in Oregon after a man-made fire possibly caused by fireworks gained steam.

Potent mix of record heat and dryness fuels wildfires across the west -  Wildfires burned across hundreds of thousands of acres in the American and Canadian West this week, fueled by scorching temperatures that are breaking heat and fire records across the region. In California, while temperatures have eased, at least 15 cities have seen record-breaking heat, and the state has experienced its hottest summer on record. San Francisco hit 106 degrees over the weekend, breaking its previous high by 3 degrees. Stoked by unusually high temperatures, fires burned on thousands of acres just outside Los Angeles, while firefighters in Washington, Oregon and Montana battled dozens of blazes across those states.By the end of the day Tuesday, at least 81 large fires were blazing across 1.5 million acres of the U.S. West, from Colorado to California and north to Washington. Over the Canadian border, British Columbia has already had a record-breaking fire season—and it's not over yet. Cities includingSeattle were shrouded in a smoky fog. In satellite pictures, the smoke could be seen traveling the jet stream and reaching the East Coast.As firefighters battled the blazes, climate researchers pointed to studies finding that a warmed global atmosphere, with increasingly clear human fingerprints, will continue driving a potent mix of heat and dryness that'sprojected to escalate in the West. "These unprecedented extreme events, on the daily to the seasonal scale, are exactly the types of events that are more likely due to the global warming that's already occurred," said Daniel Swain, a climate scientist at UCLA. "That's not so much a future projection, but an observational reality, and that's something we expect to increase in the future. When we get these extremes, there's a human fingerprint."

Ash Falls Like Snow Across Portland as Wildfire Tears Through the Columbia River Gorge - Willamette Week A wildfire that has been burning through the Columbia River Gorge since Saturday afternoon is now dumping ash on Portland as it tears through more than 3,200 acres of fir trees and brush in one of the area's most beloved natural areas.Longtime residents of the city say this is the first time they could recall a heavy ash falling on Portland since the eruption of Mount St. Helens in 1980—a disturbing measure of the damage wrecked by record heat, parched forests and horseplay with fireworks. Homes in the gorge towns of Warrendale and Dodson have been evacuated because of the flames, and people living in Cascade Locks have been advised to be ready to leave immediately if the fire grows. The Red Cross is assisting displaced residents at Mt. Hood Community College in Gresham.Officials closed I-84 for 27 miles, between exit 35 and exit 62, except for people using the road to evacuate.The fire started nearly two days ago when two teenage boys tossed fireworks from a cliff along Eagle Creek Trail. Dry brush at the bottom of the cliff ignited and the flames spread quickly, trapping more than 150 hikers on the trail. They were rescued Sunday morning.  On Monday afternoon, the winds in the gorge shifted—forcing further evacuations, shutting down the interstate and sending plumes of smoke into Portland. Ash began falling across the city shortly before 5 pm.

 Ethiopia faces worst drought in years as millions at risk  — Men, women and children in this remote region of Ethiopia scramble to receive food aid and feed their rail-thin cattle as a huge cloud of dust rises into a sky that hasn’t delivered enough rain for the past three years.The mass feeding program, managed by aid groups in this sun-scorched district, is the last attempt to save the lives of humans and animals until the rains hopefully materialize in mid-September.More than eight million people in drought-hit southeastern and southern Ethiopia are in need of emergency food assistance, officials said as the heads of the World Food Program, Food and Agriculture Organization and International Fund for Agricultural Development made a rare joint visit over the weekend.Despite economic growth in the past decade that has made Ethiopia one of Africa’s fastest-developing countries, rural areas are suffering as the nation faces its worst drought in years. This barren district called Danan, populated mostly by ethnic Somalis, has been historically neglected and is home to a rebel movement that seeks secession.“This particular year is more intense due to the fact that it’s the third for fourth year that the drought repeats itself in this region,” Jose Graziano da Silva, director-general of the Food and Agriculture Organization, told The Associated Press. “In Africa, Ethiopia was best-prepared to face the impacts of climate change. But after having three successive years of El Nino, the country is unable to deal with it alone.” The situation has been overshadowed by drought in neighboring Somalia and the famine that was briefly declared earlier this year in parts of neighboring South Sudan, aid workers say. Over 27 million people in East Africa are in need of food assistance, largely because of drought, according to FAO. “The aid we are receiving is not enough to feed ourselves and our animals,” a local chief, Sheikh Hussein Mohammed, told the delegation. “Besides, the food that is being delivered to us is not the one that we are used to eating. And worst of all, the animals aren’t providing us any milk and meat. We are really hungry. And we are suffering.”

Protecting groundwater and reducing pollution in India -- KA writes: In developing countries which there is a constant struggle between farmers and utilities over water allocation, most of implemented policies are based on punishment. For example, quotas are assigned to each farmer and if he goes over his quota he will face a sort of a punishment. With this setup, if famers find a way not to be caught they will be the winner and they can take water as much as they want. Nobody makes money by saving water and the one acting responsibly in their consumption will be victims; because the others are being awarded by screwing the system. I strongly believe unless we find a mechanism in which people make money by saving water, no other effort matters. In my last trip to India, I learned of such a mechanism to protect groundwater. Tushaar Shah (of IWMI-TATA and a well-known figure in the energy and water sector of India) has started a pilot in Gujarat called SPaRC. He is giving farmers solar power system to operate their pumps. The farmer can sell his extra power to the grid and make money. Nominal power of the solar system is a bit higher than the nominal power of the pump. Also, any farmer by subscribing to the program loses his connection to the grid so that he can only evacuate solar power into the grid and not get any electricity from the grid. A farmer can either operate his pump or sell the power to grid; as he expected now farmers participating in the program are voluntarily practicing water saving methods because the solar power they sell to the grid for money is also power NOT used to pump water. Read more about the projects in this and this PDF.

Invasive Species Are Killing People, Decimating Wildlife and Costing Billions of Dollars in Damage Around the Globe -Across the United States, invasive species are responsible for “the decline of 42 percent of the threatened and endangered species” and cost the economy an estimated $120 billion annually. Invasive species can be insects, plants, fish, or wildlife that originate in one part of the world but end up in different habitats as a result of globalization and where their presence disrupts the natural ecosystem, sometimes destroying it. They can be a threat to the environment as well as to human health—like the Asian tiger mosquito, an invader of the U.S. that was recently linked to the Zika virus.  To help understand how invasive species impact the global ecosystem, we utilized data from the Centre for Agriculture and Biosciences International (CABI) to observe the invaders most common around the world, the countries with the highest percentages and how these organisms impact states across the U.S. To date, Cuba has more invasive species across its nearly 43,000-square-mile island than any other country in the world. Like the brown anole and lionfish, invasive species in Cuba have made residents consider innovative ways to manage the intrusions caused by these creatures. The invasive lionfish has impacted the survival of smaller fish in the coral reefs surrounding Cuba and has forced residents to start consuming the fish as a way of preserving the balance of their aquatic ecosystem. In New Zealand, CABI data report there are more than 250 invasive species, making it the second most infested country in the world. In 2016, the prime minister of New Zealand announced plans to eradicate all of the invasive rats, short-tailed weasels and possums by 2050—costing the country at least $20 million.   Of the most common invasive species around the world, those within the class Dicotyledonae top the list with close to 4,000 instances of invasive plants and foliage around the world. For example, the toxic leafy spurge (Euphorbia esula) is an invasive form of Dicotyledonae that can grow over 3 feet above ground and up to 15 feet underground and quickly overtake native plant species due to its size. The leafy spurge can be found in 20 states across the U.S., including California, Oregon and New Jersey. 

Grizzly bears go vegetarian due to climate change, choosing berries over salmon -- Grizzly bears have stopped eating salmon in favour of elderberries after being forced to make a choice due to climate change. Warming temperatures meant that the berries are ripening earlier than usual, at exactly the same time as the freshwater streams on Alaska’s Kodiak Island are overflowing with sockeye salmon.The island's brown bears typically feed first on salmon in early summer, followed by elderberries later in the season, in late August and September.“What you have is a scrambling of the schedule," said William Deacy, a biologist at Oregon State University that studied the phenomenon."It's essentially like if breakfast and lunch were served at same time and then there is nothing to eat until dinner. The study found that during the unusually warm summer of 2014, the bears, which would traditionally kill up to 75 percent of the salmon, were nowhere to be seen near the streams.Instead, they were in the hills busy munching on berries, which contain less protein and therefore take less energy to break down, causing them to gain weight more quickly.Biologists warned that changes caused by a warming planet were behind the bears' unusual behavior and could affect the entire ecosystem.The researchers found that the forests around the streams suffered because the bears’ fish carcasses were no longer there to enrich the soil."Bears switched from eating salmon to elderberries, disrupting an ecological link that typically fertilizes terrestrial ecosystems and generates high mortality rates for salmon," the study said.On average, red elderberries are said to be ripening two and a half days earlier every decade.If the pattern continues, they will regularly overlap with the salmon by 2070. The study was published in the Proceedings of the National Academy of Sciences.

Trump Administration and Key House Republicans Push for Aerial Gunning of Grizzly Bears and Wolves - In April, President Trump signed a resolution, enabled by the Congressional Review Act and passed by Congress on a near party-line vote, that repealed a U.S. Fish and Wildlife Service (USFWS) rule restricting particularly brutal and unsporting methods of killing grizzly bears, wolves and other predators on national wildlife refuges in Alaska. There are now multiple indications that the Trump administration and some allies in Congress are gearing up to unwind a nearly identical rule, approved nearly two years ago, that restricts these appalling predator-killing practices on 20 million acres of National Park Service lands in Alaska. Our humane community nationwide must ready itself to stop this second assault on a class of federal lands (national preserves) set aside specifically to benefit wildlife. The SHARE Act—that includes a provision to repeal the parks rule, which will be assigned to the House Committee on Natural Resources, contains a host of anti-wildlife provisions. Top officials at NPS reviewed the bill and objected to many provisions, and memorialized those objections in an internal memo. A senior Interior Department official sent back the memo to the NPS officials with cross-out markings on nearly all of the objections raised by the NPS.That helps explain why lawmakers on Capitol Hill have not heard a negative word from the NPS about this legislative package and its provisions that amount to an assault on the wildlife inhabiting Alaska’s national preserves.Several weeks prior, Interior Secretary Ryan Zinke had signaled his desire to reopen the NPS predator control rule, with an eye toward changing and even gutting it. The rule passed with almost no dissent when NPS adopted it in October 2015. In short, there is a double-barreled attack on the rule, and the administration seems to be locked and loaded on both strategies—one legislative and the other executive.

Hurricane Harvey’s Public-Health Nightmare --  Every flood disaster is also a public-health disaster, and even as Harvey dissipates over the Gulf Coast, the beginnings of that secondary calamity were on display in the Houston area. During the worst of the flooding, hospitals faced critical shortages of food and medicine, people with serious chronic diseases had to make difficult decisions between evacuation and sheltering in place, and hundreds of victims faced prescription shortages and mental-health issues. And based on the health problems people in New Orleans and elsewhere in the region faced after Hurricane Katrina, experts expect major public-health emergencies, environmental illnesses, and outbreaks will only intensify in the aftermath of Harvey. Those challenges are already taxing the city’s health infrastructure. According to Bill Gentry, a professor at the University of North Carolina School of Public Health and a former emergency management official, one key public-health issue that attends the early stages of any disaster is the set of risks facing people who are disabled or elderly and face special health needs. “With our push towards home health-care and taking care of more Americans in the home,” Gentry said, “it quickly turns into 'can we get their home health-care needs taken care of,’ with everything from oxygen to prescription meds to getting them clinical access, especially for dialysis. Those types of clinical worries compound as many days as the water stays up.” Dialysis is a special concern, and for residents in Houston, already approaching crisis. As NPR reports, it’s important for patients with kidney failure to receive dialysis services every two to three days. But local dialysis centers are struggling with the demand, and with shortages of qualified staff, since several nurses who’d normally work in the centers are themselves displaced by the flood. And while companies like the DaVita Med Center and its locations around the Houston area are working around the clock to meet the area’s dialysis needs, as patients go longer without regular services and appointment reminders, the only solution to keeping them alive may be taking them to one of the area’s hospitals.

Texas faces environmental concerns as wastewater, drinking water systems compromised - As residents of Southeast Texas muck out their homes and pile debris on their lawns, the region is dealing with a daunting array of environmental problems. The Environmental Protection Agency reported Sunday that more than 800 wastewater treatment facilities are not fully operational as a result of Hurricane Harvey and the ensuing floods, and that officials are aware of “releases of wastewater from sanitary sewers,” pollution that could cause health risks. The agency hasn’t had access to most of the 13 Superfund sites with toxic materials that were flooded or damaged as a result of the storm. Thousands of people in Southeast Texas still don’t have safe drinking water, including in Beaumont, a city of 118,000 to the east of Houston. So far, the EPA has found that people who are served by 166 water systems are under boil-water orders as a safety measure and that another 50 water systems have been shut down completely. And Sunday afternoon the Harris County Fire Marshal’s Office said executives of the disabled Arkema chemical plant in Crosby, Tex., had decided to hasten the burning of chemicals left on the site. The organic peroxides, which require refrigeration, had been exploding and burning, off-and-on, since Thursday, requiring a local evacuation. The fire marshal’s office said the company decided to be pro-active rather than wait for the rest of the chemicals to ignite. Meanwhile, there remains too much moisture in damp Southeast Texas. The soundtrack of recovery here in the nation’s fourth-largest city is the growl of generators and the buzz of huge fans that are attempting to dry out flooded interiors. The U.S. Centers for Disease Control and Prevention has distributed 15,000 booklets urging people to be vigilant about mold, and the Federal Emergency Management Agency tweeted, “As you clean up after #Harvey, mold control is critical.” 

Texans face a 'triple threat' from insects, mold, and bacteria in Harvey's wake - In under a week, the storm unleashed as much as 51 inches of water in some areas, causing catastrophic flooding that displaced 33,000 Texans. At least 41 people have died since the storm began, and officials expect the toll to rise.People in flooded areas quickly found themselves face-to-face with a range of health problems, including contaminated floodwaters and the threat of injury.  While the storm wiped out mosquitoes from the area for now, the standing water left over from the flooding and the warm temperatures will make parts of Texas particularly prone to mosquitoes and the diseases they can carry in the coming months and year. "As the floodwaters recede, you’re left with pockets of water which are good for breeding both Culex mosquitoes and Aedes mosquitoes," Dr. Peter Hotez, dean of the National School of Tropical Medicine at Baylor College of Medicine in Houston, told The Atlantic. That could lead to more West Nile infections, and possibly Zika. Texas has seen some local transmission of Zika in Brownsville, Texas near the Mexico border.   Explosions rocked the outskirts of Houston on Thursday at the Arkema chemical plant after flooding shut down its power and backup generators, which had been keeping explosive compounds cool via a refrigeration system. When the refrigerators went offline, the compounds got warm and exploded. Officials said they plan to let the fire burn out, meaning more blasts are likely. But Arkema is just one of hundreds of chemical plants in the Houston area, many of which have been flooded and are now at risk of further damage. In addition to slamming homes and hospitals, Harvey struck the heart of Texas' refining industry, where roughly a third of America's oil is processed. In anticipation of the storm, dozens of processing facilities were forced to intentionally burn chemicals as a means of disposing them, releasing millions of pounds of pollutants into the air.  Chevron Phillips, the company that reported the largest release, burned close to 800,000 pounds of chemicals — nearly 300,000 of which were the colorless, odorless, and potentially deadly gas carbon monoxide — as it shut down its plant to prepare for the storm. Floodwaters act as sponges for hazardous materials. As they bubble past city streets and inundate cars and homes, the waters collect sharp objects, sweep up bacteria, and gather human waste. That combination is a "triple threat" for potential infections, Rachel Noble, a professor of marine biology at the University of North Carolina at Chapel Hill, told Business Insider. While flooded plumbing systems can expose people to fecal bacteria, salty ocean water from the Gulf can introduce them to marine bacteria. Finally, floating pieces of metal and glass from destroyed homes and buildings can cut people's skin, increasing the chances of infection.  Noble advised people who have had contact with floodwaters to pay close attention to any open wounds and look out for lesions that get "hot and angry," or red and raised.

Water Damage From Hurricane Harvey Extended Far Beyond Flood Zones -As the government begins to assess the damage from Hurricane Harvey, it is clear that much of the damage occurred outside of the boundaries drawn on official flood maps. About 40 percent of the buildings estimated by the Federal Emergency Management Agency to have been flooded in Harris County, Tex., are in areas considered to be “of minimal flood hazard.” That finding, by a New York Times analysis of FEMA’s data from Harris County, Tex., is similar to a report Friday by researchers at the University of California-Davis. They used satellite imagery to determine that half of the land that flooded in the county, whose seat is Houston, was outside of official flood zones. The researchers, at the university’s Natural Hazards Research and Mitigation Group, said their finding “points almost inescapably to local factors such as runaway development and lack of balanced hydrologic planning.” “By some calculations, the current flooding represents the third ‘500-year’ flood in the Houston area in the past three years,” they wrote, using a term to express a low likelihood of major flooding. Heavy flooding outside the official flood zones means that many property owners in the county are unlikely to have insurance coverage, unless they happen to be large commercial establishments that could buy it from insurance companies. Insurers are generally unwilling to sell flood coverage to homeowners, so individuals who want it must get it from the National Flood Insurance Program.

After Harvey, the Trump administration reconsiders flood rules it just rolled back - A couple of weeks ago President Trump scrapped Obama-era rules, intended to reduce the risks posed by flooding, that established new construction standards for roads, housing and other infrastructure projects that receive federal dollars. Trump derided these restrictions, which were written in response to growing concerns over the impact of climate change, and other federal rules as useless red tape holding back the economy. “This overregulated permitting process is a massive, self­inflicted wound on our country — it’s disgraceful — denying our people much-needed investments in their community,” he said in the lobby of Trump Tower in New York during an event to tout his infrastructure policies. But now, in the wake of the massive flooding and destruction caused by Hurricane Harvey along the Gulf Coast, the Trump administration is considering whether to issue similar requirements to build higher in flood-prone areas as the government prepares to spend billions of dollars in response to the storm. This potential policy shift underscores the extent to which the reality of this week’s storm has collided with Trump officials’ push to upend President Barack Obama’s policies and represents a striking acknowledgment by an administration skeptical of climate change that the government must factor changing weather into some of its major infrastructure policies. 

Red Cross Admits It Doesn't Know How Hurricane Harvey Donation Money Is Spent -- Though the Red Cross has a historical reputation for providing relief to victims of natural disasters and other emergencies, the organization’s practices have tarnished its name over the last few years.Amid the catastrophic earthquake in Haiti in 2010, the Red Cross reportedly accepted nearly $500 million in relief money but built only six homes with the funds even though they claimed they had provided homes to 130,000 people. These failures prompted some Haitians to advise the world against donating funds to the Red Cross.The organization was accused of diverting resources and supplies to bolster its public image during Hurricane Sandy. As an investigation by NPR and ProPublica found:“The Red Cross national headquarters in Washington ‘diverted assets for public relations purposes.’ A former Red Cross official managing the Sandy effort says 40 percent of available trucks were assigned to serve as backdrops for news conferences.”The outlets reported that “[d]istribution of relief was ‘politically driven instead of [Red Cross] planned,’” noting many organizational failures.Further, a report released last year by Iowa Sen. Chuck Grassley found that 25% of funds donated to aid in relief for victims of the earthquake was actually spent on internal costs. That amounted to roughly $124 million. Now, amid the hurricane in Texas, the Red Cross is admitting it currently doesn’t know how the funds it’s receiving are being spent.

At Least 13 Toxic Waste Sites Flooded in Texas: EPA - At least 13 toxic waste sites in Texas were flooded or damaged by Hurricane Harvey, adding to the challenges as the state and the region begin cleanup efforts following the deadly storm.The Environmental Protection Agency announced Saturday that it had assessed 41 Superfund sites using aerial images, and determined the ones badly affected by the storm.The impact of flooding on the sites is unknown. The EPA said its workers have not been able to “safely access the sites” but are ready to do so as soon as the floodwaters recede.A Superfund site is land that is contaminated by hazardous waste and identified by the EPA as a candidate for cleanup because it poses a risk to human health and/or the environment. The 13 affected sites have industrial waste from petrochemical companies, acid compounds, solvents and pesticides.In the Houston area, authorities had said it would take 10-15 days for floodwaters to recede. The toxic waste sites are not the first environmental threat Texas has faced since Harvey swept through the region.Fires broke out over two days at a flooded chemical plant near Houston.People living within 1.5 miles from the Arkema site in Crosby were evacuated days before the explosions and now officials are letting chemical containers catch fire and burn out rather than endanger firefighters, the EPA and the Texas Commission on Environmental Quality said in a joint statement. The Superfund sites and the Arkema plant represent just a snapshot of the cascading effects of the catastrophic storm.

13 Toxic Waste Sites Damaged by Harvey, Houston Awash in Chemicals - Toxic waste and pollution are emerging as a top concern as cleanup continued in Houston over the long weekend. Owners of the Arkema chemical plant in Crosby, which suffered multiple explosions and fires last week, announced Sunday it would conduct controlled burns of the rest of the chemicals stored at the damaged facility as a "proactive measure." According to the U.S. Environmental Protection Agency ( EPA ), at least 13 Superfund sites in the Houston area have been damaged by flooding . Runoff from chemical plants and oil and gas facilities has also mixed with the city's overflowing sewage system to create a toxic soup in the remaining floodwaters, causing concerns around drinking water systems. And filings accumulated by the Center for Biological Diversity estimate that over one million pounds of toxic pollutants from damaged oil and gas and chemical facilities, including several types of carcinogens, have been released into the air since the hurricane made landfall. "We've never seen precipitation to this level at any Superfund site," Jennifer Horney, an associate professor of epidemiology at Texas A&M University told BuzzFeed . "The main problem is that we don't know what to expect."  "We don't have any precedent to figuring out what the cumulative affect is going to be on someone's health," Horney added. "They're not going to get cancer tomorrow—they may get asthma in three months."

EPA hasn’t inspected flooded Houston-area Superfund sites: report | TheHill: Officials from the Environmental Protection Agency (EPA) have reportedly not yet inspected several Superfund sites in the Houston metro area that were flooded in the aftermath of Harvey. The Houston metro area includes more than 12 Superfund sites, the Associated Press reported. According to the AP, these are areas that the EPA has said are some of America's most contaminated places.A spokeswoman for the EPA said agency experts had previously gone to two such sites in the Corpus Christi area, which is near where Harvey first made landfall as a Category 4 hurricane. No significant damage was found in those sites, spokeswoman Amy Graham told the AP. “We will begin to assess other sites after flood waters recede in those areas,” Graham said. Last month, EPA head Scott Pruitt ordered his staff in a memo to take a handful of actions to streamline cleanups at contaminated Superfund sites. He ordered changes — like taking quick action at sites with high risks of human exposure to human contaminants and focusing resources on sites with the best potential for reuse — based on the recommendations of a task force he convened earlier this year. The memo sent to high-level staff and regional offices is part of Pruitt’s highly-visible effort to make Superfund cleanup a top priority for his time at the EPA. 

EPA Attacks AP Reporter for Accurate Coverage of Toxic Waste Sites - The U.S. Environmental Protection Agency ( EPA ) directly attacked the Associated Press this weekend for accurate reporting around Houston's toxic cleanup. An AP exclusive posted Saturday reported that AP reporters had been able to access seven flooded Superfund sites in the Houston area, despite the EPA's claims that several of the sites were inaccessible to agency personnel. In a news release posted Sunday, the EPA personally blasted reporter Michael Biesecker for reporting an "incredibly misleading story ... from the comfort of Washington," citing a story Biesecker wrote earlier this summer on EPA Administrator Scott Pruitt that merited a later correction. The news release did not deny the AP's assertion that EPA personnel had not visited the sites in question, or note that reporter Jason Dearen, who shared the story's byline, was on the ground in Houston. The agency would not confirm to Politico which staffer wrote the release. "AP's exclusive story was the result of on the ground reporting at Superfund sites in and around Houston, as well as AP's strong knowledge of these sites and EPA practices," AP Senior Vice President and Executive Editor Sally Buzbee said in a statement Sunday.  "We object to the EPA's attempts to discredit that reporting by suggesting it was completed solely from 'the comforts of Washington' and stand by the work of both journalists who jointly reported and wrote the story."

Oil Companies Leaking Benzene Lobbied Against Pollution Rules --A plume of benzene has been detected in the air over Houston after four fossil fuel companies reported leaks of the highly toxic compound that can increase the risk of cancer — even from brief exposure. Documents reviewed by International Business Times show that two of the companies — ExxonMobil and Valero — recently lobbied against an EPA rule to prevent the government from more strictly regulating the toxin, as did a fossil fuel group that counts three of the companies as members. The agency ultimately passed a rule strengthening overall benzene regulations, but after the companies filed critical comment letters, the Obama administration's EPA revised the rule to exempt the companies from those limits during so-called “force majeure” events such as Hurricane Harvey.“After the comment period closed for the rule, the EPA created some specific exemptions that still allow unlimited releases of toxic pollution during certain time periods,” said Emma Cheuse of Earthjustice, a group that filed a lawsuit to try to remove the new exemptions from the rule. “Those exemptions are really relevant to what we're seeing now. It's likely that refineries will rely on calling this a force majeure incident to avoid sanction. Communities need more protection than just having refineries say this is a force majeure event and having the EPA rubber stamp that.”    Benzene causes a slew of health effects including rapid heart rate, tremors and headaches;  short-term exposure to high levels of the toxin is associated with an increased risk of leukemia.

While Lobbying Against Safety Rules, Arkema Warned Its Investors Of Chemical Storage Explosion Risks - Arkema, the specialty chemicals company whose chemical storage facility in Crosby, Texas, exploded Thursday morning and is currently spewing noxious smoke near Houston, warned its investors earlier this year about the dangers of possible explosions and public health risks from the chemicals it stores. At the same time, the French-based company lobbied the U.S. Congress and the Environmental Protection Agency to delay implementing new chemical facilities safety rules, as International Business Times previously reported. Two more chemical storage trailers exploded Friday evening and more explosions from the remaining trailers are expected in the coming days.  “The Group’s facilities may be subject to risks of accidents, fires, explosions and pollution due to the very nature of their operations and to the level of hazard, toxicity or flammability of certain raw materials,” Arkema wrote to investors in March, in the company’s annual report for 2016.Arkema’s backup generators failed on Thursday, which meant that volatile chemicals were unable to be stored cooly enough, causing them to burn and explode. Speaking to the Houston Chronicle, an Arkema safety official declined to say whether its backup generators were elevated, a common-sense precaution in case of flooding. However, the company was well aware of the potential dangers of floods at its plants, as it warned its investors that “exceptional flooding” could lead to the shutdown of its facilities.Furthermore, Arkema’s 2014 Risk Management Plan for the Crosby facility specifically noted the risk of equipment failure due to flooding. Facilities regulated as a “Program 3” facility by the EPA, such as the one in Crosby, are required to create and submit Risk Management Plans. The 2014 plan is the latest filed with the EPA.. The hazard process analysis filed by Arkema specifically for the Crosby facility “identified concerns, including: equipment failure; loss of cooling, heating, electricity; floods (flood plain); hurricane; other major failure identified: power failure or power surge.”

First Responders Sickened by Toxic Fumes Sue Chemical Plant -- A group of Texas first responders filed suit against chemical company Arkema Thursday, alleging the company did not adequately warn them of the risks of chemical exposure while they attended to a plant fire outside of Houston last week.  In the suit, the seven plaintiffs say they were "overwhelmed" by vomiting after coming in contact with fumes at the plant, describing a scene "nothing less than chaos." The suit also accuses the company of failing to properly secure chemical facilities after Hurricane Harvey . The U.S. Environmental Protection Agency ( EPA ) separately ordered Arkema to provide details of the explosion last week, which was caused by flood-related power outages that cut off refrigeration for the plant's chemical stores. According to the lawsuit, "immediately upon being exposed to the fumes ... the police officers and first responders began to fall ill in the middle of the road ... Medical personnel, in their attempts to provide assistance to the officers, became overwhelmed and they too began to vomit and gasp for air." As reported by the New York Times "The explosions have raised concerns over the preparedness of the country's chemical plants for bigger disasters, both natural and man-made.  Arkema identified hurricanes , flooding and power failures as risks to the site nearly a decade ago. But its own risk management plans show the company did little to address those hazards."

Texas Chemical Plant Sued For Millions, First Responders Charge Gross Negligence -- Seven first responders filed a lawsuit Thursday against a chemical company whose Houston-area facility exploded after Hurricane Harvey. The lawsuit against Arkema and three of the company’s executives is seeking over $1 million in monetary relief, and alleges that the company did not adequately warn law enforcement and public health agencies about hazardous materials at the chemical plant. Those allegations come after Arkema and its lobbying group, the American Chemistry Council, lobbied to kill a federal rule designed to require companies to better coordinate and inform first responders about the toxic compounds at chemical plants. The rule would have taken effect in March. The EPA’s rule, which included a series of other safety provisions, was ultimately delayed to February 2019 by the Trump administration, with the support of top Texas Republican lawmakers — many of whom received large campaign donations from the chemical industry. The suit filed in Harris County court asserts that after explosions at the Arkema’s Crosby plant emitted a cloud of gas, company officials “repeatedly denied that the chemicals were toxic or harmful in any manner to the people, and first responders, in the community.” Yet, the complaint says the fumes sickened the first responders, and charges Arkema with “gross negligence” and “malice.” “Immediately upon being exposed to the fumes from the explosion, and one by one, the police officers and first responders began to fall ill in the middle of the road,” says the lawsuit, which was filed by members of local agencies including law enforcement and the fire department. “Calls for medics were made, but still no one from Arkema warned of the toxic fumes in the air. Emergency medical personnel arrived on scene, and even before exiting their vehicle, they became overcome by the fumes as well. The scene was nothing less than chaos. Police officers were doubled over vomiting, unable to breathe. Medical personnel, in their attempts to provide assistance to the officers, became overwhelmed and they too began to vomit and gasp for air.”

Storm deaths: Death toll from Harvey exceeds 60 - More than 60 people - including a veteran Houston police officer - have died or are feared dead in the Houston area and beyond in flooding or circumstances connected to Tropical Storm Harvey, according to local officials.Among those is a family of six reported missing after their van was swept away by floodwaters in east Houston near Greens Bayou on Sunday afternoon. The van driver was trying to transport his elderly parents and their four great-grandchildren away from rising floodwaters but encountered high water. The driver survived but was unable to pull out the other occupants. The van was recovered Wednesday, Sheriff Ed Gonzalez said. Medical examiners are in the process of confirming which deaths are related to the historic flooding. And authorities are still searching for some of those believed to have perished. Local officials expect the grim discoveries of additional bodies once the floodwaters retreat and the streams, rivers and bayous go back into their banks.

Harvey’s floodwaters give way to festering piles of garbage -  Roiling waters in the streets have given way to festering piles of garbage on the curbs. Harvey's record-setting rains created heaps of ruined possessions that now line entire neighborhoods, some nearly up to the rooftops of the homes that were swamped. All that sodden drywall, flooring, furniture, clothing and toys adds up to an estimated 8 million cubic yards in Houston alone, enough to fill the Texans' football stadium two times over.Texas and city officials have pledged to make a priority of the monumental task of cleaning it all up, though they stopped short of giving specific timelines, mindful that such cleanups have dragged on longer than anticipated after other major storms."We want to get it removed as quickly as possible," Texas Gov. Greg Abbott told reporters Thursday.  For now, the piles big and small have become evidence, of sorts, of the losses from more than 200,000 damaged homes up and down the Texas coast.  Not only are the heaps eyesores, but they are starting to give off a musty funk. And the longer they sit, officials warn, they could become havens for mold, not to mention snakes, rats, skunks and other critters. The junk could also turn into projectiles if, heaven forbid, another hurricane strikes. "I just can't stand it anymore," said Peggy Lanigan, who took a break from clearing out her Houston home that flooded for the first time in 22 years. The city is pushing to complete a "first pass" of debris removal within 30 days, said Derek Mebane, deputy assistant director of Houston's solid waste department. He said collecting subsequent piles could take months and warned that if Hurricane Irma causes extensive damage in Florida, the cleanup in Houston could be slowed if resources are diverted. While local crews do the pickups, FEMA covers 90 percent of the costs.As it stands now, clearing even just one Houston street can take days. Some piles are so massive that a single stack of debris from one home can fill an entire truck.

An enormous, urgent task: hauling away Harvey’s debris - Here were two couches piled high with ripped-out carpet. A coffee table. A folding chair. And so much more, removed from the family home of about 60 years.“I guess they’ll just come with the big truck with the claw thing” to haul it away, she said, gazing at the mess; at least the family has insurance.The piles up and down this street, and along many other nearby streets — shards of wallboard and mildewing carpet, artificial flowers and computer monitors — stand taller than some people. There are sofas and desk chairs, ironing boards and drum sets — discrete items all destroyed by a storm and the floodwaters that followed. And across this city, there are more than 100,000 such piles, many of them even larger.Of all the challenges that southeast Texas faces after Hurricane Harvey, few will linger longer or more visibly than the millions of pounds of debris already crowding curbs and edging onto streets. The cleanup, needed from northeast Houston’s neighborhoods to the wealthy suburbs southwest of the city, will take months and cost billions of dollars.Mayor Sylvester Turner of Houston has identified two priorities for his city’s recovery: housing and debris removal. “We’re going to pick it up, and we’re going to operate with the highest degree of urgency,” Mr. Turner said. At the same time, Houston officials are asking residents to separate their Harvey-related waste into five piles: appliances; electronics; construction and demolition debris; household hazardous waste; and vegetative debris. A look at these streets suggested that few people seemed to be heeding the city’s pleas.

Catastrophic Intensity: Why Is Hurricane Irma Gaining Strength So Quickly? - In a world that is increasingly defined by superlatives, let’s start with this just-released statement from the National Hurricane Center: Hurricane Irma is the strongest hurricane in the Atlantic basin outside of the Caribbean Sea and the Gulf of Mexico in their records, and a potentially catastrophic one, tied for second place as the strongest ever in the Atlantic. And it is following on the footsteps of Hurricane Harvey, which gathered strength very fast and dumped record amounts of rain on Texas and Louisiana. Harvey underwent a very rapid strengthening from tropical storm to category 4 hurricane (about 48 hours), and gained strength as it approached landfall, as opposed to the usual weakening. It had so much rain associated with it that the National Weather Service had to create new colors for their precipitation maps in order to properly depict the amounts. What is behind the intensity of these hurricanes, and the increase in precipitation observed in a variety of weather events?We know from studying hurricanes that many factors cause and drive them, but their main fuel is a warm ocean. Warm surface waters produce heat and water vapor. Hurricanes feed on and intensify from both, and the amount of rain they ultimately dump can be increased by both the higher availability of water vapor from the warm water and the fact that a warmer atmosphere can hold more of that available moisture (more on this here). Therefore, a trend of both increased intensity and rainfall associated with hurricanes can be expected, and in fact recent studies are in agreement with that (see here and here).The waters off the coast of Texas when Harvey intensified from a category 2 to a category 4 hurricane were 2.7-7.2°F above average. The sea surface temperature where Irma was located as of the morning of 9/5 appears to be at least 2.7°F above average, which may have had a role in it turning into a category 5. Studies have detected the influence of human-made global warming both on the near-surface amount of water vapor, and in sea surface temperature in the tropical Atlantic ocean, among other areas such as the Western Pacific and South Asia – and it is worth noting that China has recently had a series of powerful typhoons, Hato and Mawar being the latest ones to wreak havoc in that part of the world, among other areas. Emissions already in the atmosphere have committed us to a certain amount of warming in the near future, and oceans have been absorbing about 93% of this warming. Therefore, oceans have also locked in a certain amount of warming from the increase in greenhouse gases from human activities. It follows that yes, we may be seeing more intense hurricanes, dropping a lot more rain when they do come ashore.

Category 5 Irma the 5th Strongest Atlantic Hurricane on Record - Dr Jeff Masters -  Hurricane Irma intensified into an extremely dangerous high-end Category 5 storm with top sustained winds of 180 mph on Tuesday morning, putting it among the strongest Atlantic hurricanes ever observed. Irma's winds are the most powerful ever measured in an Atlantic hurricane north of the Caribbean and east of the Gulf of Mexico. Measurements from Hurricane Hunter aircraft found peak winds of close to 180 mph, well above the 157-mph threshold for Category 5 strength. At 11:07 am EDT, a dropsonde in Irma's eye measured a central pressure of 927 millibars, 4 mb lower than the previous pass, so Irma is still strengthening.Irma is poised to deliver a punishing blow to the northern Lesser Antilles Islands on Tuesday night and Wednesday. As of 11 am EDT Tuesday, Hurricane Warnings were in effect for the northern Leeward Islands, the U.S. and British Virgin Islands, and Puerto Rico. Tropical storm-force winds are expected to spread into the Lesser Antilles on Tuesday night, reaching the Virgin Islands on Wednesday morning, Puerto Rico on Wednesday afternoon, and the Dominican Republic on Thursday morning (Figure 2). As of 8 am EDT, most of southern Florida, Cuba, and The Bahamas were in the 5-day cone of uncertainty for Irma. Satellite images on Tuesday morning showed a spectacular hurricane with a large eye surrounded by extremely intense eyewall thunderstorms with very cold cloud tops, indicating that they extended high into the atmosphere. Irma had excellent upper-level outflow on all sides. Conditions were favorable for even more strengthening, with wind shear a low 5 – 10 knots. Sea surface temperatures (SSTs) were a very warm 29.5°C (85°F), and the total heat content of the ocean was a high 60 kilojoules per square centimeter, giving the storm plenty of heat energy to fuel intensification. The surrounding atmosphere has been steadily moistening, as seen on precipitable water imagery, with a mid-level relative humidity near 55%, according to the 12Z Tuesday analysis from the SHIPS model. The eye of Irma was just beginning to be seen on Martinique radar.

U.S. Virgin Islands seizing guns, ammo in anticipation of Irma | -The governor of the U.S. Virgin Islands has ordered the territory's national guard to begin seizing guns and ammunition from citizens in preparation for Hurricane Irma's landfall. In an executive order signed Monday, Gov. Kenneth Mapp instructed Adjutant General Deborah Howell "to take whatever actions she considers necessary to carry out the assigned mission" of maintaining and restoring public order. "The Adjutant General is authorized and directed to seize arms, ammunition, explosives, incendiary material and any other property that may be required by the military forces for the performance of this emergency mission," the governor said in the order. The order went into effect Tuesday at 12:01 a.m. Located about 40 miles east of Puerto Rico, the U.S. Virgin Islands consist mainly of St. Croix, St. John and St. Thomas islands. The territory has a population of more than 100,000 residents. As of midday Tuesday, the forecast track of Irma would take the powerful cyclone just north of the islands, with the most intense effects of the storm occurring early Wednesday morning. Irma's winds are forecast at that time to be about 175 m.p.h.

Hurricane Irma Is Passing Over St. Martin, Anguilla as a Potentially Catastrophic Category 5 Hurricane; Dangerous Threat for Florida, Southeast -Irma moved directly over the island of Barbuda between 1 and 2 a.m. AST, bringing sustained winds of 118 mph before the anemometer broke. Pressure dropped to 916 mb before the barometer on the automated station also broke. A storm surge of about eight feet was also recorded. Irma's maximum sustained winds are steady at 185 mph based on data from NOAA and Air Force Hurricane Hunter aircraft. Based on wind speed, Irma is the strongest Atlantic hurricane since Wilma in 2005 which also had maximum sustained winds of 185 mph.  Additionally, Irma is just the 5th Atlantic hurricane to have maximum sustained winds of 185 mph or greater, according to Dr. Phil Klotzbach, a tropical scientist at Colorado State University. Hurricane Allen occupies the top spot with 190 mph winds in 1980. Hurricane warnings have been issued for the northern Leeward Islands, Puerto Rico, the Virgin Islands, the northern coast of the Dominican Republic, the southeastern Bahamas and the Turks and Caicos Islands. This includes Antigua, Barbuda, Anguilla, Montserrat, St. Kitts, Nevis, Saba, St. Eustatius, Sint Maarten, St. Martin, St. Barthelemy, Guadeloupe, Vieques and Culebra. Low wind shear, increased mid-level moisture and ample oceanic-heat content favor that Irma will remain a powerful hurricane (Category 4 or stronger) for the next several days, though some intensity fluctuations are likely at times. At this intensity, small deviations in wind speed will not change impacts. A direct hit will be catastrophic. For the next five days, Irma will move west-northwest on the south side of a ridge of high pressure called the Bermuda high, centered in the central Atlantic. By this weekend, Irma will begin to turn north in the direction of a departing southward dip in the jet stream that will set up in the eastern United States. Where that northward turn occurs will be critical for what impacts Irma may bring to parts of the southeastern United States.

Hurricane Irma causes devastation in the Caribbean - BBC News: Hurricane Irma has caused widespread destruction across the Caribbean, reducing buildings to rubble and leaving at least nine people dead. The small island of Barbuda is said to be "barely habitable". Officials warn that St Martin is almost destroyed, and the death toll is likely to rise. Irma is a category five hurricane, the highest possible level. It is currently north of the Dominican Republic, heading towards Turks and Caicos. The low-lying Turks and Caicos islands, a British overseas territory, are said to be at risk of a storm surge, with the possibility of destructive waves up to 6m (20ft) higher than usual.Virginia Clerveaux, director of the Turks and Caicos Department of Disaster Management and Emergencies, told the BBC that even inland areas could be inundated. "We are now trying to remind them [the people of the islands] that this is a category 5, and in the history of the Turks and Caicos islands this is the largest storm we have ever been impacted or threatened by. "So there is a need to ensure that we have maximum preparations in place... We have been saying to persons to ensure that they are prepared, ensure they can shelter safely, they have sufficient food and drinking water for two to three days." 

Hurricane Irma 'totally demolished' 90% of Barbuda — and the island is under hurricane watch again -- Early on Wednesday, Hurricane Irma engulfed the tiny Caribbean island of Barbuda and its population of about 1,800 with tornado-force, 185-mph, Category 5 winds and storm surge, destroying measurement instruments and cutting the island off from communication.   After initially surveying the damage, Gaston Browne, prime minister of the dual-island nation of Antigua and Barbuda, said Barbuda was "totally demolished" and that 90% of its buildings were destroyed.  Now Hurricane Jose, a Category 4 storm, is headed for Antigua and Barbuda with maximum sustained wind speeds of 150 mph, and local officials are trying to evacuate the entire island of Barbuda in the few hours they have to do so. This is the Caribbean island of Barbuda today, conducting a full evacuation for Cat 4 Jose just three days after being hit by Cat 5 Irma.  Photos of Irma's damage in Barbuda are just starting to appear — though at least one widely shared video that claimed to show Irma was more than a year old. At least one fatality was confirmed.   ABS Television Antigua captured footage of some of the initial damage as well.  In some cases, buildings were flattenedBrowne described the island as "literally a rubble" and said there was no water or phone service there. He told Anderson Cooper that he estimated it would take $100 million to rebuild. Hurricane Irma caused similar damage on St. Martin, reportedly destroying 95% of structures, and St. Barts, and affected the Virgin Islands and Puerto Rico as well.  Now the question is what Hurricane Jose may do to these already devastated islands.

Thousands Sign Petition to Change Hurricane Irma's Name to Ivanka - A Care2 petition that surfaced online Wednesday demanding the World Meteorological Association change the name of Hurricane Irma to Hurricane Ivanka is more than halfway towards its 10,000-signature goal. According to the petition's letter, President Trump's eldest daughter, "who promised to try to influence her father on certain issues like climate change , has quietly accepted the administration's lack of action on this very serious issue." The first daughter and White House senior advisor reportedly wanted climate change to be one of her " signature issues ," but has been notably silent as her father continues to roll back critical environmental regulations. Just days before Hurricane Harvey struck, Trump killed an Obama-era rule that required new infrastructure to be built with climate resiliency in mind, specifically flood protection. Ivanka was also said to be in favor of the U.S. remaining in the Paris climate deal but was unable to persuade her father otherwise. "Ivanka Trump can say what she wants about climate change but as long as she quietly stands back, she remains complicit in the destruction we all face at the hands of her father's administration," the letter continues.  "That's why we're petitioning the World Meteorological Association to rename Hurricane Irma to Hurricane Ivanka. We need to put pressure on members of Trump's administration to take real a stand for the health and safety of our world and generations to come."

From sugar mills to hog farms, U.S. agriculture braces for Irma | Reuters: (Reuters) - Hurricane Irma sent farmers and food companies scrambling to protect processing facilities, farm fields and animal herds in the South and Southeastern parts of the United States on Wednesday. Florida sugar and citrus processors rushed to secure rail cars and equipment that could be crushed, blocked or turned into flying projectiles. Cattlemen opened up their fences and moved animals to higher ground and wooded areas, which can offer some relief from high winds. To the north, cotton farmers in North and South Carolina fretted their fields might be facing a fate similar to their Texas counterparts. Late last month, Hurricane Harvey, which became a tropical storm after making landfall in Texas, destroyed an estimated $150 million worth of cotton, ripping the bolls off plants and leaving white fiber strewn across fields. At U.S. Sugar, a Clewiston, Florida-based sugar producer that farms, mills and refines sugar, staff are drawing down water levels in farm canals, securing processing facilities and making plans for post-storm cleanup, company spokeswoman Judy Sanchez said. “There’s not a thing we can do about the cane fields and orange groves, but pray,” said Adam H. Putnam, commissioner of the Florida Department of Agriculture and Consumer Services. One particularly keen concern for the sugar industry: How badly can the hurricane damage the sugar cane fields, as harvest is set to begin on Oct. 1? Worries about Hurricane Irma hitting growing regions in the Caribbean and Florida helped boost raw sugar futures on the Intercontinental Exchange on Wednesday. Orange concentrate futures for November delivery also jumped Wednesday to $1.49.90 per pound, the highest since early May. Florida sugar cane accounts for nearly a quarter of sugar produced in the United States, according to the U.S. Department of Agriculture. 

Hurricane Irma threatens power losses for millions in Florida | Reuters: (Reuters) - Hurricane Irma poses a bigger menace to power supplies in Florida than Hurricane Harvey did in Texas because Irma is packing near 200 mile-per-hour winds (320 km/h) that could down power lines, close nuclear plants and threats to leave millions of homes and businesses in the dark for weeks. Irma’s winds rival the strongest for any hurricane in history in the Atlantic, whereas Harvey’s damage came from record rainfall. Even as Houston flooded, the power stayed on for most, allowing citizens to use TV and radio to stay apprised of danger, or social media to call for help. “When Harvey made landfall in Texas it made it fully inland and weakened pretty quickly. Irma, however, could retain much of its strength,” said Jason Setree, a meteorologist at Commodity Weather Group. Irma has killed several people and devastated islands in the Caribbean. Current forecasts put almost the entirety of the Florida peninsula in the path of the storm, which made landfall in the Caribbean with wind speeds of 185 mph (295 km/h). The threat of the Category 5 storm, at the top of the Saffir-Simpson Hurricane Wind Scale, is grave enough that electricity generator Florida Power & Light (FPL) plans to shut its two nuclear power plants in the state, and officials warned that it may have to rebuild parts of its power system, which could take weeks.Most Florida residents have not experienced a major storm since 2005, when total outages peaked around 3.6 million during Hurricane Wilma. Some of those outages lasted for weeks. 

"Greatest Evacuation In History" - 650,000 Ordered To Leave Florida - In what spokesman Michael Hernandez describes as "the biggest evacuation in history,"Miami-Dade has expanded its mandatory evacuations orders to Zone C, forcing over 650,000 to leave Florida in a "traffic nightmare" as Cat-5 Hurricane Irma bears down. An earlier order included just Miami Beach, other low-lying and barrier island areas and all mobile-home residents, but as the storm grew in intensity and the cone of uncertainty narrowed, County Mayor Carlos Gimenez issued the order this afternoon expanded to Zone C. The expansion now covers Zone B, which encompasses Brickell, Miami’s downtown area and South-Dade, including parts of Cutler Bay, Florida City and Homestead. Evacuation orders also touch Zone C, which includes parts of Coral Gables, South Miami, Miami Shores and North Miami Beach. More than 650,000 residents are reportedly subject to the mandatory evacuation order – that’s up from the 200,000 who were asked to leave to areas outside of evacuation Zones A and B, Wednesday.Downtown Miami is described as "a ghost town"...

Al Roker shames Limbaugh for dismissal of Hurricane Irma 'panic' | TheHill: NBC meteorologist Al Roker clashed with Rush Limbaugh on Wednesday after the conservative radio host suggested warnings about Hurricane Irma were driven by political agendas around climate change. The longtime "Today" personality took to Twitter to slam Limbaugh in two tweets while using a #ShameOnRush hashtag in a message to his 1.7 million followers. "Do not listen to @rushlimbaugh when he says #Irma is not a dangerous #storm and is hype. He is putting people's lives at risk," wrote the 63-year-old Roker.Roker's criticism appeared to be in response to Limbaugh's Tuesday commentary on the storm, during which he suggested the warnings serve to advance climate change agendas and local businesses that profit off of customers stocking up on supplies. The 66-year-old Palm Beach, Fla., resident said while he's "not a meteorologist," and nothing he says "should be considered to be a forecast or a prediction," creating panic around hurricanes helps advance an agenda around climate change. "There is a desire to advance this climate change agenda, and hurricanes are one of the fastest and best ways to do it. You can accomplish a lot just by creating fear and panic," Limbaugh said Tuesday. "You don’t need a hurricane to hit anywhere. All you need is to create the fear and panic accompanied by talk that climate change is causing hurricanes to become more frequent and bigger and more dangerous, and you create the panic, and it’s mission accomplished, agenda advanced." "To have @rushlimbaugh suggest the warnings about #Irma are #fake or about profit and to ignore them borders on criminal. #ShameOnRush," he wrote in subsequent tweet.

Hurricane Irma threatens luxury Trump properties (Reuters) - Hurricane Irma swept over U.S. President Donald Trump’s 11-bedroom Caribbean mansion on Wednesday, the first of several luxury Trump properties threatened by the storm’s path. It was not immediately known whether Irma damaged Trump’s beachfront Chateau des Palmiers, or Castle of the Palms, on St. Martin. The gated estate, for sale for $16.9 million, is owned through a trust and had been rented out, U.S. media has reported. But French Interior Minister Gerard Collomb said some buildings had been destroyed and social media showed flooded roads and overturned cars on the island that is roughly divided between France and the Netherlands. The situation was being closely monitored on St. Martin and at a number of Trump properties in Florida, Trump Organization spokesperson Amanda Miller told Reuters in a statement.  While Irma’s exact trajectory remained uncertain, Trump’s Mar-a-Lago estate in Palm Beach - which has been called the “winter White House” and valued by Forbes at $175 million - could also take a hit. Trump bought the estate in 1985 and turned it into an exclusive club, which now boasts a membership fee of $200,000 and is a haven for the tony Palm Beach set who pull up to the gate in Bentleys and Rolls-Royces.  A staffer who answered the phone said it was closed and declined to comment further. Palm Beach County declared a state of emergency on Wednesday. Near Miami, Trump owns luxury high-rise condos called the Trump Towers, Sunny Isles and the oceanfront Trump International Beach Resort. At the Trump National Doral, an 800-acre golf resort in Miami that local media reported had completed a $250 million renovation last year, officials tweeted Wednesday that resort operations were going on as normal until further notice.

Hurricane Irma shifts toward Florida's west coast, which faces 'very dangerous' situation - ABC News - Hurricane Irma, the most powerful Atlantic storm in a decade, hit Cuba overnight as a rare Category 5 storm, then shifted course toward the west coast of Florida. The monster storm's shift in direction creates a "very, very dangerous situation for western Florida," said ABC News meteorologist Daniel Manzo. As of 8 a.m. Saturday morning, Irma was a Category 4 with maximum sustained winds of 130 mph. It was about 225 miles from Miami, moving west-northwest at 12 mph. Naples, Fort Myers and other communities on Florida's west coast could get slammed when Irma makes landfall as a Category 4 storm, which is expected to happen between early Sunday and early Monday. Landfall could occur as far north as Tampa. The wind gusts in Florida were already picking up early Saturday, with Miami International Airport reporting a 59 mph gust. The National Hurricane Center on Friday cautioned that Irma, which then had maximum sustained winds of 155 mph, is "extremely dangerous," strong enough to uproot trees, bring down power poles and rip off the roofs and some exterior walls of well-built frame homes. "Obviously Hurricane Irma continues to be a threat that is going to devastate the United States," Brock Long, administrator of the Federal Emergency Management Agency (FEMA), said at a press conference Friday morning. "We're going to have a couple rough days." Rainfall accumulations in southeast Florida and the Florida Keys are expected to reach 10 to 15 inches, with totals up to 20 inches locally. Eastern Florida up the coast to Georgia is expected to receive 8 to 12 inches, according to the National Hurricane Center. 

Hurricanes Irma, Harvey restart debate on climate change and warmer oceans - - Hurricanes Harvey and now Irma became monster storms while swirling over two separate stretches of unusually warm ocean water, a feature that has reignited debate on climate change and the degree it is adding to the intensity of hurricanes.Scientists all agree that global warming is not the cause of hurricanes, a fact made obvious by the long history of tropical cyclones. But there is scientific consensus that a warming planet will produce bigger and more destructive hurricanes, with many scientists arguing that those impacts are already occurring.Peter J. Webster, an atmospheric scientist at Georgia Institute of Technology, said it’s clear that Harvey intensified amid some abnormally warm waters in the Gulf of Mexico, and that Irma formed during a season when the Atlantic was also warmer than average.“I stand by what I said in 2005 — warmer sea temperatures will lead to stronger hurricanes,” said Webster, who 12 years ago published a hotly debated study reporting a rise in Category 4 and Category 5 hurricanes since 1970.Webster cautioned, however, that sea temperatures are just one factor in spawning hurricanes. “We have two things going on,” he said. “Natural variability and warmer sea temperature.”As of Wednesday afternoon, forecasters were calling Irma the strongest hurricane ever recorded in the Atlantic, with winds up to 185 miles per hour. Depending on its track, it could strike Florida by weekend, possibly landing as a Category 5 storm. It has long been known that warmer ocean waters can serve as “fuel” for hurricanes, including those in the Atlantic and Caribbean. The Atlantic this year has been unusually warm, but there is scientific debate on the reasons why.

Katia becomes third hurricane to threaten US in six days - A third hurricane is set to threaten the US in the space of six days. Katia, a storm off the Mexican coast, has strengthened into a hurricane, the US National Hurricane Center (NHC) said. It is 185 miles (295 km) east of Tampico, Mexico, and has maximum sustained winds of 75 miles per hour (120 kph).  In the next 48 hours some additional strengthening is also forecast, the NHC added.Models so far show it remaining in the southern Gulf in the coming days.The news comes as tropical storm Jose was upgraded to a hurricane in the Atlantic, far east of Hurricane Irma, which is currently heading towards Florida. Jose had been expected to become a hurricane and was following Irma in a path towards the Caribbean.It is too early to determine if Jose might ultimately make landfall in the Caribbean, or in the Americas, as weather projections are difficult when storms are so far out.

Worst Floods to Hit South Asia in Decade Exposes Lack of Planning - The most devastating floods to hit South Asia in a decade have killed more than 1,400 people and focused attention on the poor planning and lack of preparedness for annual monsoon rains, as authorities struggle to get aid to millions of destitute. Floods in Texas have dominated world media coverage in recent days, but India, Nepal and Bangladesh have suffered flooding for two months, with hundreds of villages submerged and tens of thousands of people in relief camps short of food and vulnerable to disease. Entire districts will take months to limp back to life, with schools destroyed, roads washed away and crops ruined in some of the region’s poorest areas, officials said. As the extent of damage became clearer, experts highlighted how poorly prepared governments were to deal with an annual problem. Most government action in India, where the flooding has hit hardest, has been focused on relief, with weak early warning systems and too little focus on prevention. The head of a South Asian regional body launched this year to boost disaster coordination said the flooding underlined the poor planning.“The floods this year have exposed the urgency for (South Asian) nations to work together to deal with natural disasters,” Flooding upstream in Nepal, for example, was followed by flooding in India this year and then downstream in Bangladesh, he said, but there was little coordination. “We cannot work in silos to deal with floods… It is the worst of floods in decades.” 

After the floods, the threat of leptospirosis and other infections looms large in this Mumbai slum -- On Tuesday last week, Malathy Devendra worried as water rushed into her house. Devendra, who lives in small house made of tin sheets in a slum in the Govandi suburb in Mumbai with her husband and six children, even thought that they might all drown. “The roof was leaking and water was entering the house from all four sides,”  Lakhs of families live in such houses in Govandi. Their only protection against heavy rains, like the downpour on Tuesday, are blue tarpaulin sheets spread on roofs to stop water from seeping into the houses. But, that day, as the streets of Mumbai flooded, these homes quickly filled up with water entering through the doors and even seeping in through non-tiled floors. In Govandi, flooding does not just bring rain water, but also sewage from overflowing drains and toxic runoff from the garbage dumping ground in neighbouring Deonar.  Both Qureshi and Devendra and members of their families fell ill with fever following the rains on Tuesday. “I went to the municipality dispensary and my son took a paracetamol as he didn’t have time to go to the hospital,” said Qureshi. The municipality dispensary in Govandi’s Baiganwadi – the locality that also has Mumbai’s oldest and largest dumping ground – has seen more patients with complains of fever, body pain, skin infections since the rains last week. “Most patients here have skin infections owing to the poor living conditions,” said Dr Suresh Uchale, medical officer of the dispensary. “There are also cases of viral fever, which are not unusual in monsoon.”Health authorities and doctors in the area are, however, keeping an eye out for signs of leptospirosis infections. Leptospirosis is spread by the bacterium Leptospira that causes fever, headache, bleeding, chills and vomiting and, if not treated in time, can lead to liver and kidney failure and even death. The bacterium is often found in the urine of infected animals like rats, dogs, pigs, cattle, all of which are found in abundance in the Deonar dumping grounds. As rain water washes through the dumping grounds, seeps into Govandi’s slums and accumulates in its their streets, people wading through the water are exposed to the infected urine. Those with cuts or bruises on their legs and feet are especially at risk of contracting infection. When Mumbai flooded in July 2005, many parts of the city and adjoining districts witnessed similar waterlogging and there was a surge in the number of cases and deaths owing to leptospirosis.

Bangladesh eliminates post-flood disease deaths - The mid-August flooding in Bangladesh this year is severe in nature with over 8 million people affected in 32 out of 64 districts. 700,000 houses have been totally or partially submerged, and over 140 people killed, mostly by drowning. But given the numbers affected, it is also striking deaths by disease have been minimal, an outcome of better equipped health offices in the affected districts that helped the South Asian nation to check the outbreak of diarrhoea, cholera and other water-borne diseases.Bangladesh experienced disastrous flooding in 1987, 1988, 1989, 1998, 2004 and 2007, causing many diarrhoeal deaths as water-borne diseases spread in epidemic forms in the post-flood period. Meerjady Sabrina Flora, the director at the Institute of Epidemiology, Disease Control and Research (IEDCR) under health ministry, told that diarrhoea and cholera were the major diseases reported in the previous floods.The American Journal of Tropical Medicine and Hygiene in an article on diarrhoeal epidemics in three most serious floods in Dhaka – 1988, 1998 and 2004 – wrote that vibrio cholera was the most commonly identified cause of diarrhoea followed by rotavirus. In the 1988 flood in Bangladesh, diarrhoeal disease was responsible for 35% of all flood-related illness and 27% of 154 flood-related deaths in a population of more than 45,000 patients in rural Bangladesh.In the 2007 floods, the death caused by flood-related diarrhoea came down. In its situation report UNICEF reported only 17 out of the 615 flood-related deaths in 2007 were caused by diarrhoea even though 68,862 had it.mThis year disease related deaths have been even fewer. “The flood hit us on August 12. But we have not seen a single diarrhoeal death. This is really an achievement. It never happened in the previous floods,” Flora said. Although she warned that the risk of water-borne diseases spread in the post-flood period was still there.

 India to move 15 flood-prone villages to higher ground to mitigate impact | Reuters: - The western Indian state of Gujarat will move 15 villages that were affected by floods this year to higher ground, officials said, as they look for new ways to tackle the increasing frequency and intensity of flooding. Villages in northern Banaskantha and Patan districts will be moved within a 10 km (6 miles) radius of their existing locations after consultation with residents, state Deputy Chief Minister Nitin Patel told reporters. “These villages are in low-lying areas and were affected by similar floods in 2015. They will now be moved to higher ground in a nearby location,” he said. An official audit of India’s flood management schemes over the last decade found they lacked forecasting mechanisms, preemptive safety measures and effective post-flood management. The state will offer financial support to rebuild homes and also build schools and other facilities, he added. The relocation will be modeled after a similar move following a massive earthquake in 2001 that leveled several villages in the state and killed thousands, Patel said. Heavy monsoon rains in South Asia this year triggered the worst floods in a decade in India, Nepal and Bangladesh, killing hundreds of people and affecting tens of millions. India has the most exposure to damage from river flooding, according to research organization World Resources Institute. While monsoon rains trigger floods in northern and eastern India every year, Gujarat state, which is in a semi-arid region, has also experienced floods more frequently in recent years as warming temperatures bring heavier rains. Analysts have criticized the government’s flood mitigation measures, including massive embankments and river linking schemes they say will only exacerbate the damage.

Scientists Hatch Bold Plan to Save Planet From Supervolcano - NBC - The Yellowstone Caldera is an enormous craterlike depression measuring 30 miles by 45 miles and filled with molten material (magma). If it were to blast its innards out in a super-eruption, it’s no exaggeration to say that the human race could be imperiled.  But scientists at NASA have sketched the rough outlines of a plan that they say would not only spare us from a deadly super-eruption but also turn the Yellowstone supervolcano into a source of electric power. In a write-up of the plan first shared with the BBC, the team argues that we could siphon heat from the caldera until it becomes too cool to erupt — and convert the geothermal energy into electricity. “The primary objective…is to gradually defang Yellowstone as a threat to humanity,” says Dr. Brian Wilcox, an aerospace engineer at NASA’s Jet Propulsion Laboratory in Pasadena, California.  A supervolcano eruption can spew out hundreds of cubic miles of magma. Fortunately, such outbursts are rare. The last super-eruption happened about 74,000 years ago — long before civilization’s rise. Geologic evidence suggests that Yellowstone’s supervolcano mounts a massive eruption once every 600,000 to 800,000 years. The most recent occurred about 640,000 years ago.

Mexico Earthquake, Strongest in a Century, Kills Dozens - The country was struck by an 8.2-magnitude quake, the strongest in decades, killing at least 58 people and leveling areas in some southern states.  Juchitán de Zaragoza — Thousands of homes in one city were severely damaged. Half of its 19th-century city hall, with its 30 arches, collapsed. The main hospital was so devastated that staff members evacuated patients to an empty lot and worked by the light of their cellphones. By the time the earthquake’s tremors finally faded, at least 36 people in the city, Juchitán de Zaragoza, were dead.“It’s a truly critical situation,” Óscar Cruz López, the city’s municipal secretary, said Friday. “The city,” he said, and then paused. “It’s as if it had been bombed.”Over all, the earthquake — the most powerful to hit the country in a century — killed at least 58 people in Mexico, all of them in the southern part of the country that was closer to the quake’s epicenter off the Pacific Coast.The earthquake, which had a magnitude of 8.2 and struck shortly before midnight on Thursday, was felt by tens of millions of people in Mexico and in Guatemala, where at least one person died as well.In Mexico City, the capital, which still bears the physical and psychological scars of a devastating earthquake in 1985 that killed as many as 10,000 people, alarms sounding over loudspeakers spurred residents to flee into the streets in their pajamas.The city seemed to convulse in terrifying waves, making street lamps and the Angel of Independence monument, the capital’s signature landmark, sway like a metronome’s pendulum. But this time, the megalopolis emerged largely unscathed, with minor structural damage and only two of its nearly nine million people reporting injuries, neither serious, officials said.

Massive Sunspots and Solar Flares: The Sun Has Gone Wrong and Scientists Don’t Know Why   - If you still have your solar viewing glasses from the eclipse, now is a good time to slap them on and look up at the sun. You’ll see two big dark areas visible on our star. These massive sunspots are regions of intense and complicated magnetic fields that can produce solar flares—bursts of high-energy radiation. You can just make them out with solar viewing glasses, but they’re better viewed through a solar telescope.These two huge sunspots are currently causing quite a bit of consternation and interest. The solar storms they’ve sent toward Earth may affect communications and other technologies like GPS and radio signals. They’re causing amazing displays of the northern and southern lights. And space weather scientists like us are excited because we wouldn’t normally expect this much activity from the sun at the moment. The sun goes through 11-year cycles of solar activity. What scientists call a solar maximum is the time in the cycle when the sun is putting out the most energy. That’s when we tend to see the most sunspots, solar flares and associated solar storms. Some solar maxima are larger or more active than others—such as the 1990 to 1991 solar max. But this last cycle, which peaked in 2014, was quite small, and there were few large geomagnetic storms. We’re heading into the bottom of solar minimum, when the sun tends to have fewer sunspots, solar flares and coronal mass ejections—large expulsions of plasma, electrons and ions, and magnetic fields. But despite where we are in the sun’s cycle, activity on the sun has dramatically picked up over the past few days. On and off, these two sunspots have been flaring and shooting out coronal mass ejections, directed toward Earth.  So what’s going on with the sun? And should we be concerned about this somewhat out-of-character solar behavior?

Ship exhaust makes oceanic thunderstorms more intense -- Thunderstorms directly above two of the world's busiest shipping lanes are significantly more powerful than storms in areas of the ocean where ships don't travel, according to new research. A new study mapping lightning around the globe finds lightning strokes occur nearly twice as often directly above heavily-trafficked shipping lanes in the Indian Ocean and the South China Sea than they do in areas of the ocean adjacent to shipping lanes that have similar climates. The difference in lightning activity can't be explained by changes in the weather, according to the study's authors, who conclude that aerosol particles emitted in ship exhaust are changing how storm clouds form over the ocean. The new study is the first to show ship exhaust can alter thunderstorm intensity. The researchers conclude that particles from ship exhaust make cloud droplets smaller, lifting them higher in the atmosphere. This creates more ice particles and leads to more lightning. The results provide some of the first evidence that humans are changing cloud formation on a nearly continual basis, rather than after a specific incident like a wildfire, according to the authors. Cloud formation can affect rainfall patterns and alter climate by changing how much sunlight clouds reflect to space. "It's one of the clearest examples of how humans are actually changing the intensity of storm processes on Earth through the emission of particulates from combustion," said 

Global warming doubles growth rates of Antarctic seabed's marine fauna – Marine life on the Antarctic seabed is likely to be far more affected by global warming than previously thought, say scientists who have conducted the most sophisticated study to date of heating impacts in the species-rich environment. Growth rates of some fauna doubled – including colonising moss animals and undersea worms – following a 1C increase in temperature, making them more dominant, pushing out other species and reducing overall levels of biodiversity, according to the study published on Thursday in Current Biology. The researchers who conducted the nine-month experiment in the Bellingshuan Sea say this could have alarming implications for marine life across the globe as temperatures rise over the coming decades as a result of manmade greenhouse gases in the atmosphere. Gail Ashton of the British Antarctic Survey and Smithsonian Environmental Research Center said she was not expecting such a significant difference. “The loss of biodiversity is very concerning. This is an indication of what may happen elsewhere with greater warning.”   Sub-zero conditions near the south pole mean there are comparatively few species on the usually frozen land, but below the ice, the relative lack of pollution, traffic and fishing has left an abundance of marine life that divers and biologists compare to coral reefs. Previous studies of warming impacts have focused on single species, but the latest research examines an assemblage of creatures.

Melting permafrost in the Arctic is unlocking diseases and warping the landscape - Our world’s northern polar region is warming twice as fast as the global average. And the consequences are easy to spot. On average, Arctic sea ice extent is shrinking every summer. The Greenland ice sheet is becoming unstable.But perhaps most disturbing are the changes occurring underground in the permafrost. Permafrost is a layer of frozen soil that covers 25 percent of the Northern Hemisphere. It acts like a giant freezer, keeping microbes, carbon, and soil locked in place.Now it’s melting. And things are getting weird and creepy: The ground warps, folds, and caves. Roadways built on top of permafrost have becoming wavy roller coasters through the tundra. And long-dormant microbes — some trapped in the ice for tens of thousands of years — are beginning to wake up, releasing equally ancient C02, and could potentially come to infect humans with deadly diseases. A recent Arctic Council report says that 20 percent of the permafrost near the surface may melt by 2040. Already scientists have noticed permafrost temperatures slowly climbing. “In the 1980s, the temperature of permafrost in Alaska, Russia and other Arctic regions averaged to be almost 18°F,” the U.S. Geological Survey explained in 2015. “Now the average is just over 28°F.”   A 2010 study in Russia found 0.5°C to 2°C of permafrost warming in the past three decades, bringing some locations dangerously close to thawing and pushing the boundary of permafrost regions ever northward. And the depth of the “active layer” — the top layer of permafrost that thaws in the summertime — is growing deeper in the Arctic regions north of Europe, a sign of instability.  When it thaws, a Pandora’s box is unleashed. To better understand the strange changes in the permafrost, I spoke with Robert Max Holmes, an earth systems scientist with the Woods Hole Research Center. When I reached him by phone, he was in Bethel, Alaska, a small outpost town 400 miles west of Anchorage, and had just come back from an eight-day research and teaching expedition in the wilderness.

EPA runs all grants past a political appointee in its PR office - While the EPA is often portrayed as a massive bureaucracy, about half of its budget goes directly to other organizations through grants. While many of these are focused on cleanups and reducing environmental risks, the agency also funds scientific research into various health and environmental risks. The money for these research grants has historically been allocated based on a combination of scientific merit and environmental concerns.  All that started to change in August. That's when the EPA issued a new policy dictating that all grant programs must be run past a political appointee from the EPA's public affairs office. Now, a new report indicates that this PR specialist is cancelling individual grants.  The appointee is named John Konkus. Konkus has a bachelor's degree in government and politics, and he appears to have no scientific background—the closest is having worked for former Congressman Sherwood Boehlert (R-N.Y.) back when Boehlert chaired the House Science Committee. Despite the complete lack of scientific qualifications, however, the EPA decided to put him in charge of grants. In August, E&E News obtained a policy document stating that any proposals for grant programs need to be run through the Office of Public Affairs, specifically John Konkus. No funding program is allowed to go forward if Konkus does not approve it. This can include scientific funding, as well as grants for educational or environmental programs. Now, The Washington Post is reporting that Konkus isn't only reviewing future grant programs; he has cancelled millions of dollars in grants that had already been through the review process and deemed worthy of funding. Some of these grants went to universities and so were likely involved in funding basic research. In addition, the report notes that the EPA briefly suspended funding for grants to Alaska at a time when the Trump administration was feuding with one of its senators. According to the Post, "Konkus has told staff that he is on the lookout for 'the double C-word'—climate change—and repeatedly has instructed grant officers to eliminate references to the subject in solicitations."

Trump EPA cuts life-saving clean cookstove program because it mentions climate change -  President Donald Trump’s political appointees at the Environmental Protection Agency are killing grants and awards that mention “climate change,” no matter how effective the initiatives might be in cutting costs, creating jobs, and saving lives.Under Administrator Scott Pruitt, who rejects the scientific consensus on climate change, the EPA has taken the unprecedented step of “putting a political operative in charge of vetting” hundreds of millions of dollars in annual EPA grants, the Washington Post reported Monday. That operative is John Konkus, “a former Trump campaign aide with little environmental policy experience.”Some of EPA’s choices seem petty and capricious — like killing a $20,000 grant to help train Flint, Michigan residents, who are still dealing with a prolonged lead contamination crisis, to deal with bedbugs. But “Konkus has told staff that he is on the lookout for ‘the double C-word’ — climate change,” the Post reports. Here is where things get both ridiculous and tragic: “Two of the awards the EPA’s leadership rescinded… supported the deployment of clean cookstoves in the developing world.” Developing clean cookstoves is one of the most cost-effective ways to save lives globally, while simultaneously generating American jobs and improving our national security. As the New York Times explained back in 2010: Nearly three billion people in the developing world cook their meals on primitive indoor stoves fueled by crop waste, wood, coal and dung. Every year, according to the United Nations, smoke from these stoves kills 1.9 million people, mostly women and children, from lung and heart diseases and low birth weight. But the program has the phrase “climate change” in it.   EPA spokeswoman Liz Bowman told the Post that the agency was cancelling awards to international groups that aren’t “providing results for American taxpayers.”

Trump, Pruitt Slash EPA Staff to 30-Year Lows as Drinking Water, Climate Change Crises Mount - By October of this year, the staff at the U.S. Environmental Protection Agency ( EPA ) will be reduced to levels not seen since the Reagan administration, 30 years ago, according to a report by Brady Dennis with the Washington Post. The dramatic reduction in staff will almost certainly include career scientists and other staff who are often called into local communities where an environmental disaster is occurring, like Houston following Hurricane Harvey. These staffers also work on less urgent, but serious problems like the widespread drinking water contamination that impacts virtually every American. The push to downsize EPA staff comes as part of a larger effort to curtail the size and scope of an agency that President Trump once promised to eliminate "in almost every form." Last week, the Arkema chemical plant explosion in Crosby, Texas, in the aftermath of Hurricane Harvey , shined a light on not only the Trump administration's lax oversight of the nation's chemical facilities, but his dramatic 31 percent proposed budget cut to the EPA and what that would mean for chemical plant safety in the future. A second hurricane, Irma , is the largest ever recorded in the Atlantic Ocean and is ripping through the Caribbean on its way toward South Florida. Among the 97 percent of climate scientists who agree humans are a driving contributor to the warming planet, there is consensus that a result of warming oceans is much larger, more intense hurricanes . Until the Trump administration came to power, former President Obama's EPA was taking significant steps to reduce greenhouse gas emissions, which are the leading culprit of climate change . "Only the Trump administration would conclude that it's a good idea to cripple the federal agency tasked with combating the growing pollution threats to Americans' drinking water, and the clear and present dangers of climate change—like historic, back-to-back hurricanes," said EWG President Ken Cook. "The EPA is no longer run by leaders who put a premium on human health and environmental protection, and this hollowing out of the agency's staff is the clearest example of Trump and Pruitt's disdain for both."

Senate panel votes to fund UN climate agency | TheHill:   A Senate committee voted Thursday to contribute $10 million to the United Nations’ climate change agency. The Senate Appropriations Committee voted 16 to 14 to approve an amendment by Sen. Jeff Merkley (D-Ore.) to restore funding for the U.N.’s Framework Convention on Climate Change in the State Department appropriations bill. The payments that the United States had made annually since joining the convention in 1992 had been slated to be eliminated.Merkley said at the committee meeting Thursday to vote on the bill that the amendment “fits in with Secretary [Rex] Tillerson’s desire that we both continue to monitor the changes in the world’s climate and that we keep a seat at the table.” The U.N. agency is responsible for international climate agreements like the Kyoto Protocol and the Paris Agreement. The United States never joined Kyoto, and President Trump pledged earlier this year to pull out of Paris. Trump called for an end to U.N. climate funding in his first budget proposal earlier this year. Office of Management and Budget Director Mick Mulvaney called that and other climate change funding wasteful. “As to climate change, I think the president was fairly straightforward — we're not spending money on that anymore; we consider that to be a waste of your money to go out and do that,” Mulvaney said. 

Jim Bridenstine to Be Nominated by Trump to Lead NASA - NYT - Representative Jim Bridenstine, Republican of Oklahoma, will be nominated by President Trump to serve as NASA’s next administrator, the White House said on Friday night. Mr. Bridenstine, a strong advocate for drawing private companies like SpaceX and Blue Origin more deeply into NASA’s exploration of space, had been rumored to be the leading candidate for the job, but months passed without an announcement. If confirmed by the Senate, Mr. Bridenstine, 42, would be the first elected official to hold that job. The previous administrator, Charles F. Bolden Jr., stepped down on Jan. 20, the first day of Mr. Trump’s presidency. Since then, Robert M. Lightfoot Jr., the associate administrator, has served as acting administrator. Mr. Lightfoot’s 225 days as of Saturday have already set a record for the longest time NASA has been without a permanent leader. “I am pleased to have Representative Bridenstine nominated to lead our team,” Mr. Lightfoot said in a statement. “Of course, the nomination must go through the Senate confirmation process, but I look forward to ensuring a smooth transition and sharing the great work the NASA team is doing.” Although NASA has little presence in Oklahoma, Mr. Bridenstine, a former Navy Reserve pilot who is now in his third term in the House Representatives, has long had an interest in space. Before being elected to Congress in 2012, he was executive director of the Tulsa Air and Space Museum and Planetarium from 2008 to 2010. Last year, he sponsored a bill called the American Space Renaissance Act, which proposed broad, ambitious goals for the nation’s space program, including directing NASA to devise a 20-year plan.

Trump picks Oklahoma congressman to head NASA --  President Trump's pick for the next leader of NASA is a fighter pilot who wants Americans to return to the moon but doesn't believe that humans are causing climate change.Rep. Jim Bridenstine of Oklahoma has to be confirmed by the Senate before taking charge of NASA, and the two senators who represent Florida's Space Coast have already publicly objected to the choice of a politician as head of the space agency.Bridenstine is a Republican congressman who was elected in 2012 after working as executive director of the Tulsa Air & Space Museum & Planetarium. He's a veteran Navy combat pilot who served during the wars in Iraq and Afghanistan, and who currently serves in the Oklahoma Air National Guard.As a member of the House Science, Space, and Technology Committee, Bridenstine has focused on trying to revitalize NASA, with his American Space Renaissance Act.He's spoken out against space junk, calling the problem of orbital debris "absolutely huge. It's a problem that cannot be ignored any longer."  He's a big fan of the moon, and recently told NASA's Lunar Exploration Analysis Group in Washington, D.C., that the discovery of water ice on the moon should have resulted in a permanent outpost there for rovers and machines to exploit the lunar materials and drive down the cost of space exploration.

Rubio, Nelson blast Trump’s NASA pick - Florida’s senators are voicing opposition to President Donald Trump’s pick for NASA administrator, Oklahoma Congressman Jim Bridenstine, saying a “politician” shouldn’t lead the nation’s space program. Republican Marco Rubio and Democrat Bill Nelson wouldn’t say whether they’d buck the president and vote against Bridenstine, who was nominated Friday. But they suggested the GOP congressman’s political past would needlessly spark a partisan fight in the Senate that could ultimately damage NASA. Story Continued Below ..Bridenstine also trashed Rubio during last year’s GOP presidential primary, although Rubio said he doesn’t hold that against the congressman. The bipartisan pushback against Trump’s nominee for NASA administrator underscores the importance of the agency to Florida, home of the Kennedy Space Center in Cape Canaveral. Nelson, as a member of Congress, in 1986 flew on a Space Shuttle Columbia mission; he also has a home on what’s known as the state’s Space Coast. “The head of NASA ought to be a space professional, not a politician,” Nelson said in a brief written statement to POLITICO. Nelson serves as the ranking member on the Senate’s Committee on Commerce, Science & Transportation, which oversees NASA and would hear Bridenstine’s nomination. Bridenstine’s office did not return calls seeking comment. 

Parts of Trump NASA pick's online presence scrubbed -  Social media accounts and postings belonging to President Donald Trump's nominee to be NASA administrator were deleted this year, a CNN KFile review has found.Radio interviews and videos featuring Trump's nominee, Rep. Jim Bridenstine, were also removed from public view.Trump on Friday nominated Bridenstine, a Republican from Oklahoma, to lead the nation's space agency after months of rumors he was the favorite for the position.His nomination, which requires Senate confirmation, has already received bipartisan pushback from Republican Sen. Marco Rubio and Democratic Sen. Bill Nelson, both of Florida, the home of the Kennedy Space Center in Cape Canaveral, with Nelson telling Politico in a statement that the head of NASA "ought to be a space professional, not a politician." The removal of accounts and posts comes at a time when Congress will examine Bridenstine's record in the lead-up to his confirmation hearing.

Trump names former coal executive to top mining safety post | TheHill: President Trump has nominated a former coal executive whose company clashed with federal officials over mining safety rules under President Obama to the top mining safety post in his administration. Trump on Friday named David Zatezalo, the former chairman of Rhino Resources, to be an assistant secretary of Labor overseeing the Mine Safety and Health Administration (MSHA). The position is currently vacant, according to the Department of Labor's website. During Zatezalo’s time as an executive at Rhino, the company was issued two "pattern of violations" letters from MSHA over safety issues at their mines, the Charleston Gazette-Mail reported. The letters were sent in 2010 and 2011. Federal officials at the time were cracking down on safety standards after the fatal 2010 Upper Big Branch mining disaster in West Virginia that left 29 miners dead. MSHA also sought a federal court injunction against Rhino in 2011 after the agency discovered that employees were warning workers at one Kentucky mine about inspections. Zatezalo is nominated to fill the position previously held by Joe Main, Obama's pick for the post who had a lengthy resume in mining safety, including overseeing safety programs for the United Mine Workers of America (UMWA). 

Fossil fuel officials take key spots on new Interior royalties committee | TheHill: Fossil fuel industry officials, academics, and state and tribal representatives will hold seats on a new Interior Department committee designed to assess federal royalty policies for energy development on public land. The Interior Department announced Friday that officials for ConocoPhillips Co., Anadarko Petroleum Corp. and Cloud Peak Energy will serve as primary members of the panel. Executives for a renewable energy firm, three academics, and representatives from four tribes and six states are also set to serve on the committee. The new royalties committee, which will hold its first meeting on Oct. 4, is set to advise the Interior Department on the industry impact of policy and regulatory changes related to energy production royalty rates on federal and tribal land. The Interior Department established the committee in March, when it suspended an Obama-initiated review of federal coal leasing rates. On Wednesday, a federal judge ruled the Trump administration broke the law when it delayed updating a rule governing how drilling and mining royalties are calculated for federal energy production. 

 EPA chief says ready to further relax fuel standards due to hurricanes (Reuters) - The U.S. Environmental Protection Agency is preparing for Hurricane Irma’s landfall on the U.S. East Coast by securing vulnerable toxic waste sites and easing gasoline standards to ensure steady fuel supplies, its chief told Reuters on Thursday. EPA Administrator Scott Pruitt declined to say whether he believed claims by scientists that the second powerful storm to affect the United States in two weeks may have a link to warmer air and water temperatures resulting from climate change. “The most we can do is help people in these areas by monitoring drinking water and respond to real and tangible issues,” he said in a brief telephone interview. Hurricane Irma is expected to make landfall in Florida as early as Friday after slamming Caribbean islands with 185 mph winds, only days after Hurricane Harvey triggered record flooding in Texas that killed scores of people. The EPA said has issued waivers on certain federal requirements for the sale, production and blending of gasoline to avoid supply shortfalls in the aftermath of Harvey and as Hurricane Irma approaches Florida. Pruitt said he spoke with Florida Governor Rick Scott about potentially issuing more waivers on gasoline requirements if the need arises after Irma. “EPA will grant additional waivers if requested,” he said.

Texas wind farms might have dodged a bullet with Hurricane Harvey -- Oil-and-gas state Texas is by far the largest wind power producer among US states. With an installed capacity of 21,044 MW, and with 5,437 MW under construction as of the end of 2016, Texas is well ahead of Iowa, with 6,974 MW of capacity and 338 MW under construction, oil-and-gas state Oklahoma with 6,645 MW capacity and 1,609 MW under construction, and well, in 4th place green-energy state California…  During the windiest parts of the day, wind power typically supplies 20% of the power in Texas, according to grid operator Electric Reliability Council of Texas. Most of the wind farms are in West Texas, far away from the coast. During the hurricane, they continued operating normally. But a little over 2,000 MW of capacity is located in coastal areas, in hurricane country. So how did they fare?  According to a report by the Southern Alliance for Clean Energy (SACE):  At noontime on Friday, August 25th, the Texas coastal wind projects were operating at 95% output, an exceptionally high output level (also called a capacity factor). As expected, several wind farms curtailed power production when wind speeds exceeded safety limits. Also, as local grid connections failed and power outages affected the entire region, wind farms remained offline until grid connection could be re-established.  Between 3-4 PM, as conditions deteriorated, wind power production dropped by approximately 800 megawatts, with a regional operation rate of about 47%.  Over the next three days, wind power production generally increased during the daytime, and declined at nighttime – similar to “normal” coastal wind power production levels. At no time did power production from all coastal wind farms reach zero.  This chart by SACE shows power generation for each of the four days, starting with August 25 (red line):  Only one facility – E.ON’s Papalote Creek Wind Farm complex, south of where the hurricane made landfall near Corpus Christi and then moved north – was knocked out of operation, according to  Recharge , not because of damage to the wind turbines but because the electric transmission system to the facility was heavily damaged by the storm, and service to the grid was cut. Given the mayhem and devastation in the area, it’s good to see that one of the sectors that many people thought at risk survived largely unscathed.

Electricity prices reflect rising delivery costs, declining power production costs - EIA - Over the past decade, retail electricity prices have not closely followed the costs of fuels used to generate electricity, such as coal or natural gas, mainly because of changes in the other costs involved with producing and delivering electricity in the United States. The average retail price of electricity in the United States has risen about 1.5% per year between 2006 and 2016, about the same as the 1.6% per year general rate of inflation over those years. In contrast, natural gas prices for U.S. electric generators, a key component in the cost of generating electricity, have fallen at an average rate of 8.4% per year since 2006. The cost of electricity reflects money spent on generation, transmission, distribution, and other plant-in-service additions, as well as plant operation and maintenance. Over the past decade, the portion of total electricity costs attributed to power production for most utilities has decreased from 69% to 54%, while the portion associated with delivering that electricity to customers has risen. These costs are based on financial reports filed with the Federal Energy Regulatory Commission by major utilities and represent about 70% of all electric utility spending.  Power production costs incurred by utilities include fuel costs; nonfuel costs, including the costs of building, upgrading, operating, and maintaining generators; and the costs of purchasing power from independently-owned generators or from power markets. While the fuel and purchased power costs have decreased over the decade with the decrease in natural gas prices, nonfuel costs have increased slightly. Electricity delivery costs have increased in real 2016 dollar terms from 2.2 cents per kilowatthour (kWh) in 2006 to 3.2 cents/kWh in 2016, roughly offsetting the decrease in the generation cost.

Power plant rule repeal announcement likely this fall: EPA | TheHill: Federal officials expect to finalize their review of the Obama administration’s climate rule for power plans this fall, the Environmental Protection Agency (EPA) said Thursday in a court filing. President Trump in March ordered the EPA to review and consider repealing the Obama administration’s Clean Power Plan, which sets carbon reduction targets for states to apply to their energy sectors. The EPA is widely expected to formally order the rule off the books at the end of its review. The agency has submitted its Clean Power Plan proposal to the Office of Management and Budget’s regulations office for review. Once it returns to the EPA, the agency said in its court filing, "the administrator will sign the proposed rule and EPA will send it to the Office of the Federal Register” for a public comment period. “At this time, EPA expects that the administrator will sign the proposed rule in the fall of 2017,” the filing said. The Clean Power Plan was the cornerstone environmental regulation of the Obama administration. The rule, which the Supreme Court stayed in early 2016, would require the U.S. electricity sector to cut its carbon dioxide emissions by up to 32 percent, from 2005 levels, by 2030. Supporters consider the rule an important step toward tackling climate change-causing carbon emissions. But opponents, including conservatives and the fossil fuel industry, say it is restricting and could hurt businesses’ bottom lines.

Hackers have successfully attacked US and European energy firms to try and 'sabotage' the power grid — Advanced hackers have targeted United States and European energy companies in a cyber espionage campaign that has in some cases successfully broken into the core systems that control the companies' operations, according to researchers at the security firm Symantec. Malicious email campaigns have been used to gain entry into organisations in the United States, Turkey and Switzerland, and likely other countries well, Symantec said in a report published on Wednesday. The cyber attacks, which began in late 2015 but increased in frequency in April of this year, are probably the work of a foreign government and bear the hallmarks of a hacking group known as Dragonfly, Eric Chien, a cyber security researcher at Symantec, said in an interview. The research adds to concerns that industrial firms, including power providers and other utilities, are susceptible to cyber attacks that could be leveraged for destructive purposes in the event of a major geopolitical conflict. In June the US government warned industrial firms about a hacking campaign targeting the nuclear and energy sectors, saying in an alert seen by Reuters that hackers sent phishing emails to harvest credentials in order to gain access to targeted networks. Chien said he believed that alert likely referenced the same campaign Symantec has been tracking. He said dozens of companies had been targeted and that a handful of them, including in the United States, had been compromised on the operational level. That level of access meant that motivation was "the only step left" preventing "sabotage of the power grid," Chien said. 

Is Germany Killing the Environment to Save It? -The German government is carrying out a rapid expansion of renewable energies like wind, solar and biogas, yet the process is taking a toll on nature conservation. The issue is causing a rift in the environmental movement, pitting “green energy” supporters against ecologists.  Martin Kaiser, a forest expert with Greenpeace, gets up on a thick stump and points in a circle. "Mighty, old beech trees used to stand all over here," he says. Now the branches of the felled giants lie in large piles on the ground. Here and there, lone bare-branch survivors project into the sky.  Kaiser says this is "a climate-policy disaster" and estimates that this clear-cutting alone will release more than 1,000 metric tons of carbon dioxide into the atmosphere. Forests are important for lowering levels of greenhouse gases, as large quantities of carbon dioxide are trapped in wood -- especially the wood of ancient beech trees like these. Less than two years ago, UNESCO added the "Ancient Beech Forests of Germany" to its list of World Natural Heritage Sites.  It wasn't any private forest magnate who cleared these woods out. Rather, it was Hessen-Forst, a forestry company owned by the western German state of Hesse. For some years now, wood has enjoyed a reputation for being an excellent source of energy -- one that is eco-friendly and presumably climate neutral. At the moment, more than half of the lumber felled in Germany makes into way into biomass power plants or wood-pellet heating systems. While it celebrates the success of renewable energies as one of its greatest victories, it is profoundly unsettled by the effects of the energy transition, which can be seen everywhere across the country. Indeed, this is not just about cleared forests. Grasslands and fields are being transformed into oceans of energy-producing corn that stretch beyond the horizon. And entire tracts of land are being put to industrial use — converted into enormous solar power plants, wind farms or highways of power lines, which will soon stretch from northern to southern Germany.

The UK government needs an immediate exit strategy from bioenergy - Few issues command cross-party consensus in the aftermath of this recent election. One that does is the Conservative's plans for phasing out coal-fired electricity in the United Kingdom. The Exchequer pays out hundreds of millions of pounds in subsidies to finance the conversion of old coal-fired power stations to burn wood in the name of ‘green’ energy. But burning wood for electricity – known as “biomass” – is anything but green. It makes climate change worse, imperils threatened forests, and increases emissions of dangerous air pollutants. This misguided policy has made the United Kingdom the world’s largest importer of wood pellets, with most used to fuel inefficient, electricity-only power stations. In 2015, at an average price of £42.69 per certificate, solid woody biomass received over £800m in subsidies under the Renewable Obligation Certificates scheme. According to its 2016 Annual Report, Drax alone earned £541.43m in subsidies for its biomass conversions, all under programmes intended to promote clean, renewable energy. That’s the equivalent of £1.48m per day. What do UK taxpayers get in return? More carbon pollution, dirtier air, and devastated forests.

California Senate Scraps $3 Billion Electric-Vehicle Subsidy Bill: The California legislature scrapped a $3 billion spending bill aimed at boosting tax subsidies for electric vehicles that could have been a boon to Tesla. The late Friday move came after criticism that the bill was short on details and failed to demonstrate exactly where the money would come from to pay for it. The state Finance Department had opposed a previous version of the bill because it appropriated billions of dollars "without identifying a funding source." The bill's original language called for funds to come from additional taxes on utilities, but that language was stripped out earlier in the legislative process. Conservative lawmakers labeled the measure the "Tesla bailout" bill because it would provide greater subsidies for those buying full electronic vehicles such as Tesla and lower rebates for hydrogen and hybrid car purchases. Additionally, the bill would have come at a critical time for Tesla, just as the company was about to hit its 200,000 limit for federal subsidies. Tesla owner Elon Musk's net worth is now estimated to exceed $20 billion and his businesses have received roughly $5 billion in federal and state tax breaks, even as their balance sheets have remained in the red. The state's Senate removed the measure's $3 billion price tag late last Friday but provided no dollar amount to replace it. The action essentially transforms the measure into a study. Instead of providing money for the electric vehicle rebate, it would direct the California Air Resources Board to research the best ways to provide EV rebate legislation with a  deadline of Jan. 1, 2019.

Scotland to Ban Sale of New Gas and Diesel Cars by 2032 - Scotland announced plans to end the sale of new gas and diesel-powered cars by 2032 and fast-track the development of a country-wide charging network for electric vehicles . "Our aim is for new petrol and diesel cars and vans to be phased out in Scotland by 2032—the end of the period covered by our new climate change plan and eight years ahead of the target set by the UK government," First Minister Nicola Sturgeon said on Tuesday. "We live in a time of unprecedented global challenge and change," Sturgeon continued. "We face rapid advances in technology; a moral obligation to tackle climate change … These challenges are considerable, but in each of them we will find opportunity. It is our job to seize it." Sturgeon also announced that Scottish government intends to finance a carbon capture and storage project in the North Sea. Scotland has emerged as a clean energy all-star , with its wind turbines occasionally generating more electricity than is actually needed. This past March 17 and 19, wind turbines provided an output equivalent of 102 percent and 130 percent of each day's demand, respectively.  Many other countries are planning to outlaw gas guzzlers . Norway is banning the sale of new gasoline- and diesel-powered cars in 2025. Germany plans to ban the internal combustion engine by 2030. India intends to be a "100 percent electric vehicle nation" by 2030. France has also set a date of 2040.

Britain faces huge costs to avoid power shortages with electric car plan - Britain must plough billions of pounds into new power plants, grid networks and electric vehicle charging points if it is to avoid local power shortages when a planned ban on new diesel and petrol cars begins. Supporting millions more battery-powered vehicles over the next two decades is technically feasible, and if drivers can be persuaded to recharge them overnight - when spare power capacity is abundant - the huge infrastructure cost could be kept down.
ocal networks particularly face problems, so the country will need a range of technologies for managing consumption to meet an estimated rise of up to 15 percent in overall demand and prevent spikes of up to 40 percent at peak times.   In July, the government said it would ban the sale of new petrol and diesel cars and vans from 2040. Although some conventional cars will remain on the road, numbers of electric vehicles (EVs) could balloon to 20 million by 2040 from around 90,000 today, experts estimate. Charging them all will require additional electricity. Estimates vary on future numbers of electric vehicles, as well as hybrids and those powered by hydrogen fuel cells which do not require mains electricity. However, several analysts surveyed by Reuters said anything up to an extra 50 terrawatt hours (TWh) would be needed for them by 2040. Bernstein analysts say overall demand could increase by 41-49 TWh, or 13-15 percent of current levels. A 15 percent rise would translate into a 40 percent jump in peak demand if drivers charged their cars between 6 and 9 pm, when electricity consumption is at its highest.

Boom, bust and boom again for rare earths? Andy Home (Reuters) - All commodity markets are prone to boom and bust cycles. But few have been as spectacular as that experienced by rare earths at the turn of the decade. Prices of such exotic components of the periodic table as dysprosium and terbium increased by multiples over 2010-2011 before collapsing just as quickly. Five subsequent years of low-scale range-trading have seen rare earths slip off the collective investment radar, their place taken by new “hot” metals such as lithium and cobalt. But now they’re back. Or at least a couple of them are. The prices of neodymium MYSTL-GANZ-NEDO and praseodymium oxide MYSTL-GANZ-PRAS are going stratospheric again, up by over 80 percent since the start of the year. As ever with rare earths, this is all about what is happening in China, the world’s dominant producer of these critical materials. It is also, though, a story of a specific supply chain adapting to a fast-changing demand picture because these two particular rare earths are part of the same green technology revolution that is causing such excitement in the battery materials space. Graphic on NdPr oxide spot prices in China: and praseodymium, or the more manageable NdPr for short, are already two of the most commonly used rare earth elements (REE), accounting for 36 percent of global REE consumption in 2015, according to analysts at RFC Ambrian (“The Alchemist”, November 2016). They’re in the hard disc drive in your laptop and the headphones you wear on the way to work. Their most important application, however, is in the magnets used for electric motors, which is where they enter the electric vehicle supply chain. As with the lithium-ion battery, the permanent magnets that use NdPr in motors are industry standard, meaning they face a similar exponential growth in usage generated by the electrification of the global vehicle fleet.

The cost of going green: Australian taxpayers hit with a $60bn power bill -- Taxpayers will have paid more than $60 billion through federal renewable energy subsidies by 2030, about twice what the crumbling car industry received over 15 years and enough to build about 10 large nuclear reactors. The government’s large and small-scale renewable energy ¬targets, which will compel energy retailers to buy 33 terawatt hours of wind, solar and hydro energy by 2030, will deliver about $45bn of subsidies to renewable energy producers over 20 years, according to analysis by The Australian. The grab bag of direct subsidies from the Australian Renewable Energy Agency and the Clean Energy Finance Corporation — which have spent or lent concessionally, respectively, $870 million in grants since 2010, and $4.3bn since 2013 — are on top of that. Meanwhile, the proposed clean energy target arising from the government’s Finkel review, would mandate a further 33TWh of ¬energy from renewable sources, costing an extra $11.3bn over the 10 years to 2030.

Australia faces heightened blackout risks next summer: electricity operator (Reuters) - Australia faces more blackouts over the coming southern hemisphere summer following the closure of a major coal-fired power station and even as the world’s biggest battery is in place, the nation’s energy market operator warned on Tuesday. The report will be key to the federal government’s decision on how to set a clean energy target beyond 2020 to encourage investment in stable and affordable power supplies. Electricity supply is so tight that a lack of wind to fuel renewable generation or the loss of a thermal power plant occurring at the same time there are increases in demand during the peak air-conditioning months could lead to power cuts in the wind-dependent state of South Australia and neighboring Victoria, the report said. “The power system does not have the reserves it once had,” said Audrey Zibelman, chief executive of the Australian Energy Market Operator. “Therefore to balance peak summer demand in real time, targeted actions to provide additional firming capability are necessary to reduce heightened risks to supply,” said Zibelman in a statement announcing the market operator’s latest 10-year electricity outlook. The outlook, following a string of outages last summer, takes into account power supply from a 129-megawatt-hour battery being set up by Tesla Inc that is due to start up in South Australia by December, and a battery installation in neighboring Victoria. There has been a net loss of 1,100 megawatts of capacity in the National Electricity Market, covering the eastern states -- Queensland, New South Wales, Victoria, South Australia and Tasmania -- since last year to 47,016 MW, with the closure of Engie’s Hazelwood coal-fired plant partly offset by new wind power.

Australia's AGL under pressure to sell, not close, coal-fired plant  (Reuters) - AGL Energy, Australia’s biggest power producer, came under pressure from the government on Wednesday to sell rather than close one of its coal-fired plants in 2022 to help keep the lights on in a market short on stable power supplies. The company said it remained committed to shutting its Liddell power station in 2022, even after Prime Minister Malcolm Turnbull said the government was talking to AGL Chief Executive Andy Vesey about selling the plant. “AGL has committed to the closure of the Liddell power station in 2022, which is the end of its operating life,” AGL said in a statement. The comments came after the Australian Energy Market Operator warned this week of a heightened risk of blackouts in Australia’s most populous state, New South Wales, after 2022 if Liddell is shut. The clash highlights challenges facing Australia, where blackouts have become more frequent following a decade of uncertainty over carbon policy that has deterred investment in stable generation to back up wind and solar power. Turnbull told parliament on Tuesday he was talking to AGL about extending the life of the Liddell plant for at least five years, and told reporters that CEO Vesey was willing to consider selling it. “He’s said that he would be prepared to discuss selling to a responsible party who would be able to keep the power station going for a period,” Turnbull said.

 Federal utility: Coal ash removal would take 24 years (AP) — A federal utility says it would take 24 years to dig up and move its coal ash at a Tennessee power plant under a court order that it still might appeal. The Tennessee Valley Authority said it will start the massive undertaking at its Gallatin Fossil Plant within 30 days unless a judge orders otherwise, according to the utility's court filing in U.S. District Court in Nashville on Tuesday. Cleanup could be halted at least temporarily if TVA appeals and asks for the requirement to be blocked, and the judge approves. The utility has until early October to consider whether to appeal, according to spokesman Scott Brooks. Judge Waverly Crenshaw ruled in favor of two environmental groups and ordered the cleanup last month, saying the facility's unlined coal ash storage is leaking pollutants into the Cumberland River and violating the Clean Water Act. However, Crenshaw added that there's scant evidence so far of concrete harm beyond mere risk and presence of pollutants. TVA says the 24-year timeline assumes that the utility can set up a lined landfill onsite at Gallatin, which would put the project cost at $550 million. TVA says it's also considering offsite landfill options, which would bump the price tag up to $2 billion and likely change the completion date. TVA added that the size of the project would make it impossible to comply with a federal coal ash rule requiring the digging and disposal to be complete within 15 years. The estimates drew skepticism from an environmental group involved. Attorney Beth Alexander of the Southern Environmental Law Center, which represents one of the groups that sued TVA, said it appears the utility "has vastly overestimated both the time and the expense" to comply. 

WVU economists see August economic gains from coal (AP) — A West Virginia business index shows an upturn in August coal production and overall 2 percent improvement in the state's economy from a year ago when its recession ended. In their report Wednesday, West Virginia University economists said their Mountain State Business Index has posted monthly gains for 11 of the past 13 months. In August, coal production rose 3.9 percent from the previous month, accounting for most of the month's 0.3 percent overall increase. "We remain confident that West Virginia's economy remains firmly in recovery territory and should post moderate growth over the next several months," said John Deskins, director of the West Virginia University Bureau of Business and Economic Research, which produces the index. However, the outcomes differ by region and it will still take years to recover all the jobs lost since 2012, Deskins said. A downturn in coal prices and production and related employment were a significant part of that decline. The index tracks building permits, unemployment insurance claims, natural gas output, coal production, stock prices related to large West Virginia employers, interest rates and U.S. dollar value. August's higher natural gas withdrawals and stock prices were offset by negatives in the trade-weighted dollar, building permits for new homes and initial unemployment insurance claims, according to the report. However, compared to a year earlier, building permits were up 10.4 percent, unemployment insurance claims down 23.7 percent, natural gas production rose 16.5 percent and coal production rose 14.7 percent. 

Coal crunch sees China's rustbelt exposed to risk of winter power, heat cuts | Reuters: (Reuters) - China’s northeastern industrial heartland may face winter power and heating cuts after authorities in Beijing spurned requests from provincial providers for help securing coal supplies after two major mines were forced to halt output, utilities warned. Coal-dependent power in the major manufacturing province of Heilongjiang issued their plea to the National Development and Reform Commission (NDRC) via the state power grid after authorities suspended work at mines in neighbouring Inner Mongolia last month, according to documents posted on the website of coal publication The authenticity of documents was confirmed by a person familiar with the matter, who declined to be identified because he wasn’t authorised to speak to media. The NDRC and state grid were not immediately available for comment. The mines halt is part of concerted efforts by China to tame increasingly severe winter smog in industrial centres. But it also shows Being’s war on pollution can roil key industries while sending coal prices sharply higher, both in China and across Asia. In its response to the request, the NDRC acknowledged the coal shortage but did not offer more supplies, the documents showed, instead calling on the provincial government to ramp up clean fuel output while cutting coal-fired generation from inland power plants.

China demand a boost for US coal -- China’s re-emergence as a coal importer has boosted the fortunes of US producers who are now shipping more coal abroad than any time in the past two years. Revenue at publicly traded US coal companies grew 19 per cent in the first half of this year compared with the same period a year ago, and the biggest gains came at companies helped the most by exports, according to data compiled by Doyle Trading Consultants. That growth comes at a time when US President Donald Trump has vowed to end a long decline in the US coal business by cutting regulations that make coal less competitive. Market forces, especially China, have a much bigger influence than anything the Trump administration had done, analysts said.

France will need to close nuclear reactors - French Environment Minister Nicolas Hulot reiterated on Wednesday that France will need to close several nuclear reactors in order to meet a target to cut the share of atomic energy in power generation to 50 percent by 2025. Hulot, who said in July France will need to close up to 17 of its 58 reactors, did not specify a number, but said that the Fessenheim plant – long earmarked as a closure candidate – would be among them. A schedule for plant closures will be decided in a multi-year energy plan to be presented in 2018, he said on France Info Radio. “We need to make a rational decision on which reactors to close, taking into account economic social and security factors,” Hulot said. “We will close several reactors, but I’ll do it in a socially acceptable way. Fessenheim will close, so too other reactors,” he added.

Finland doubles down on nuclear power as coal heads out the door  Finland is set to embrace a decarbonised future by increasing carbon taxes and introducing laws in 2018 that will begin to phase out the use of coal. To cope with the gap left by coal, Finland will have to increase the amount of energy produced from other fuel sources. Nuclear power could take up the slack as two new reactors are due to come online in 2018 and 2024, also as part of Helsinki’s efforts to cut its dependence on Russian energy imports. Sixty-six percent of coal is imported from Russia. Finland relies on nuclear power to meet roughly 30% of its energy needs. The World Nuclear Association ranks the country’s reactors as some of the world’s most efficient and it is estimated that capacity could reach 60% by 2025 if all current projects are brought to completion. But Finland’s increased atomic capacity could be undermined by neighbouring Sweden, which is closing two of its own reactors, meaning there will be less power available through their interconnected energy grids.

Trump now has the votes to feed US fracking frenzy with new gas pipelines - Norwalk Reflector - Since February, the Federal Energy Regulatory Commission has lacked a quorum to decide on new projects, frustrating the oil and gas industry, which lobbied Trump and the Senate to fill vacant seats. Just before its August recess, the Senate delivered, approving the nominations of Republicans Neil Chatterjee and Robert Powelson to serve on the commission, commonly known as FERC. Energy lobbyists were giddy following the vote, optimistic the commission will quickly act on a backlog of multibillion-dollar gas pipelines proposed in states such as Ohio, Pennsylvania, the Virginias and North Carolina. Property rights advocates and some environmental organizations were less gleeful, fearful that Chatterjee and Powelson will rubber-stamp new pipelines with little regard to safety or landowner concerns. Chatterjee has served as an energy aide to Senate Majority Leader Mitch McConnell of Kentucky, and Powerson is a member of the Pennsylvania Public Utilities Commission, a panel known to be friendly to the oil and gas industry. These are boom times for pipeline developers, partly because of the enormous volumes of natural gas being fracked from the Marcellus Shale formation of West Virginia, Ohio and Pennsylvania. Supporters say this fracking could boost production of gas-fired electricity, bringing down prices and allowing utilities to switch from coal to a cleaner-burning fuel. Yet from New York to the Carolinas, landowners are resisting proposed pipelines. As McClatchy reported in May, many are stunned that private companies have been granted state authority to use eminent domain to secure right of way for the projects. Several have filed lawsuits, saying these projects violate antitrust laws or have polluted the environment. In Ohio, state regulators have accused developers of the $4.2 billion Rover Pipeline of multiple violations of state water quality laws. In Pennsylvania, homeowners have had their wells tainted by Sunoco’s construction of the Mariner East 2 pipeline, which would carry hazardous natural gas liquids to a Pennsylvania port for export to Europe. Last week, two ranking Democrats on Senate and House energy committees — Sen. Maria Cantwell of Washington and Rep. Frank Pallone Jr. of New Jersey — wrote FERC requesting an investigation into the Rover and Mariner East 2 pipelines. Some analysts have also raised concerns on whether there is a market for all the gas transmission lines that utilities are proposing. If utilities build too many pipelines, their customers could end up paying for that excess, unused capacity.

In 'gasland' community, new tests revive old drilling debate -— The well water at Ken Morcom and Kim Grosso's house is laced with so much explosive methane that a Pennsylvania environmental regulator who went there to collect samples this summer decided it would be safer to coast her SUV down the driveway. Morcom and Grosso want to leave but doubt they could sell a house with tainted water. So, a few weeks ago, they asked the gas driller they blame for polluting their well to buy them out. "I was hoping they'd fix it. But I've given up hope," said Morcom, 49, who supports drilling but has become disillusioned with Houston-based Cabot Oil & Gas Corp. "Just let us out of the box." "The box" is the couple's 8-acre spread in rural Dimock Township. But Morcom could have been talking about Dimock itself. A patchwork of homes and farms about 150 miles north of Philadelphia, the community became a battleground for pro- and anti-drilling forces after state regulators found that Cabot — one of the biggest drillers in the vast Marcellus Shale gas field — had contaminated 18 residential wells with methane. Homeowners sued, accusing the company of polluting their water with toxic chemicals and methane. Activists and celebrities descended. It's a much quieter place these days. But the questions surrounding Dimock's groundwater have yet to be resolved — and the federal government is back for the first time in more than five years to investigate ongoing claims of contamination. Public health experts visited 25 homes last month to test for bacteria, gases and chemicals. The testing has resurrected an old debate about the groundwater in Dimock, whose plight was the focus of the Emmy Award-winning documentary "Gasland." State regulators say Cabot still hasn't fixed the water. Cabot says the methane was there long before it began drilling. It's an argument that's been going on for eight years. 

Environmentalists oppose Illinois' approval of fracking permit -  Environmental activists on Friday said the state of Illinois' approval of its first permit to allow a specific kind of oil and gas fracking would increase the risk of harm to the environment and residents' health. An Illinois Department of Natural Resources office determined on Thursday that Woolsey Operating Co's application to perform high volume horizontal hydraulic fracturing operations in White County in southern Illinois met all fracking rules and requirements.   Critics say the practice has polluted water supplies, while backers say it supplies needed energy resources.The permit was the first one approved under 2014 state rules and regulations for high volume horizontal hydraulic fracturing. That process is a riskier technique that became widespread in the early 2000s, said Anthony Ingraffea, a retired Cornell University engineering professor who has conducted research in the oil and gas industry as well as for environmental groups, including in Illinois. The process uses 100 times more fluid and produces more waste that is pumped underground and has caused earthquakes, Ingraffea said. It also causes noise and air pollution."White County is not only particularly vulnerable to the impacts of fracking due to high levels of naturally occurring radioactivity and seismic activity, but also already faces periodic oil and brine spills," Food & Water Watch, a group advocating for healthy food and clean water, said in a statement.

Fracking Has an Enormous Radioactive Waste Problem—Just Ask Kentucky  -- Fracking is used to extract oil and natural gas from shale, but without question, water is the star resource. A Duke University study found that fracking consumed roughly 250 billion gallons of water between 2005 and 2014 to unlock the hydrocarbons but also generated about 210 billion gallons of briny, chemically laden flowback water during those same years.  This produced water contains a cocktail of industry-secret chemicals, heavy metals and naturally occurring toxic or radioactive elements like selenium and radium. To deal with the fluids, energy companies either reuse it, store it in surface ponds, send it to wastewater treatment facilities, or truck it to deep injection wells.  But these disposal methods aren’t always foolproof. A leaky pond or an ill-equipped wastewater treatment plant can inadvertently leach contaminants into groundwater or drinking water supplies, meaning public health and the environment could be at risk of exposure.  Kentucky is still legally wrangling over its handling of more than 1,000 cubic yards of out-of-state radioactive fracking waste that ended up at the Blue Ridge Landfill in Estill County two years ago. According to the Richmond Register, the waste came from drilling operations in Pennsylvania, West Virginia and Ohio and was further concentrated by a wastewater treatment plant in Fairmont, West Virginia. The facility’s treatment process apparently increased the waste’s radionuclides and radioactivity, with an intensity nearly 400 times higher than EPA standards.The Bluegrass State does not allow the transport and disposal of radioactive waste from other states, so how did it end up in this hot mess? In short, West Virginia regulators realized the toxicity of the sludge and refused to dump it in the state’s own landfills, so the Kentucky dump decided to accept it.  Kentucky’s fracking waste problem is not an isolated case. The CPI report explains, “the four states in the Marcellus are taking different approaches to the problem; none has it under control. Pennsylvania has increasingly restricted disposal of drilling waste, while West Virginia allows some landfills to take unlimited amounts. Ohio has yet to formalize waste rules, despite starting the process in 2013. New York, which banned fracking, accepts drilling waste with little oversight.”

Colonial delays restart as fuel prices keep rising after Harvey - Colonial Pipeline, the biggest U.S. fuel system, delayed reopening a segment of its system in Texas that was shut due to Hurricane Harvey, increasing worries about rising retail prices and the domestic distribution of gasoline and distillates. The company, which had originally scheduled a Sunday restart for the segment going from Houston to Hebert, Texas, said it planned to reopen the distillates line on Monday. The line would be ready to move gasoline on Tuesday, it added. Colonial's 5,500-mile system begins in Houston and ends in Linden, New Jersey, serving seven airports and other facilities. The pipeline hauls more than 3 million barrels per day (bpd) of refined products including gasoline, diesel and jet fuel from the Gulf Coast refining hub to the populous U.S. Northeast. The firm also planned to allow shippers to pump transitionary-grade Gulf Coast CBOB gasoline, as refiners ran short of the summer grade product due to Hurricane Harvey. U.S. gasoline prices continued to rise through the weekend amid fears of shortages, despite the restart of several key refineries on the U.S. Gulf Coast that had been crippled by Hurricane Harvey. The storm took down a quarter of U.S. oil refining capacity, hit oil and gas platforms along the Gulf and lifted average gasoline prices by more than 20 cents since Aug. 23.  Refiner Phillips 66 said on Sunday that it requested a Jones Act waiver to its Alliance refinery in Louisiana, but the petition was still pending.  The Jones Act mandates the use of U.S.-flagged vessels to transport goods between U.S. ports. The CBP has occasionally allowed exemptions for oil and gas operators to use often cheaper, tax-free, or more readily available foreign flagged vessels.

US Gulf Coast energy infrastructure shut due to Harvey - Already, gasoline prices in the US have hit $2 per gallon for the first time since 2015, according to Reuters, as flooding from Harvey knocked out nearly a quarter of USA refineries, while the storm moves inland over Louisiana.The U.S. Customs and Border Patrol said it received a request to waive the Jones Act, which mandates the use of U.S. -flagged vessels to transport merchandise between the nation's ports.US gasoline futures jumped 4 percent to settle at 1.7833, the highest in more than two years.Exxon may begin shutting units as early as Tuesday at its 362,300-barrel-per-day (bpd) Beaumont refinery in east Texas due to high water in the plant, said sources familiar with the company's plans.In the first tapping of the reserve for an emergency since Hurricane Isaac in 2012, two emergency exchanges of oil of 500,000 barrels will be delivered to the Phillips 66 (NYSE: PSX) refinery in Lake Charles, La., the department said. Still, Delaware gas price average, as of August 30, was up to $2.30 per gallon, up five cents overnight and nine cents on the week (since August 23).The shutdowns led the USA government to tap its strategic oil reserves for the first time in five years on Thursday, releasing 500,000 barrels of crude to a working refinery in Louisiana.Nationwide, pump prices have surged - the average for a gallon of regular gasoline rose from about $2.35 a week ago to $2.45 now, AAA reported. The biggest US refiner, Motiva's Port Arthur facility, which can handle 600,000 barrels of crude daily, will be shut for at least two weeks, however, according to sources familiar with plant operations. USA gasoline futures on Tuesday rose 0.9 percent to $1.73 a gallon, and have jumped about 6 percent since last Wednesday's prestorm close. That is up 28 cents per gallon in one week, the GasBuddy figures indicate.Suppliers in the Chicago area were taking steps to prevent shortages, and banking on hope as wholesale prices continued to increase. The expected United States crude build-up today widened the WTI discount to Brent to US$5.64 per barrel, its widest in over two years.

Oil Tanker Logjam Grows To 54 Ships As Gulf Ports Remain Closed - On Tuesday, just as Hurricane Harvey was peaking, we reported that according to ship-tracking data compiled by Bloomberg, as well as MarineTraffic real-time tracking, at least 25 tankers carrying almost 17 million barrels of imported crude oil were drifting near Texas and Louisiana ports, unable to offload because of closures from Tropical Storm Harvey. Since then the situation has deteriorated by more than double, and as of Friday evening, Bloomberg reports that 54 tankers with capacity more than 33 million barrels either to deliver imported crude from Latin America, Europe, Caribbean, Africa and Middle East or receive U.S. supplies are drifting off U.S. Gulf Coast as several key ports remain closed while others are open with restrictions. The historic "tanker traffic jam", last observed nearly two years ago as traders scrambled to store crude tankers in the same region in hopes of contango, can be seen on the Marine Traffic map below, only this time it has little to do with the shape of the oil strip, and everything to do with the logistical complications following Harvey :  According to Bloomberg, as of Sept. 1, 37 Aframaxes, 3 VLCCs, 8 Suezmaxes, 6 Panamax tankers are currently waiting off ports of Corpus Christi, Houston, Galveston, Freeport, Texas City, Beaumont, Nederland, Port Arthur, Port Neches, Sabine and Lake Charles, La. This is 8 more then the 29 tankers carrying 18.6mm bbl as of Aug. 31. That said, the situation is slowly but surely getting resolved as more ports are starting to let traffic sneak through. On Friday, the port of Corpus Christi reopened to ship traffic, making way for seven refineries in the area to go back online. The Texas Gulf Coast supplies one-fourth of the nation’s oil and gas. Hurricane Harvey caused a severe hiccup in the gasoline supply chain over the last week, creating consumer panic and long lines at gas stations.

 Petrochemicals factbox: Ports begin to re-open; additional FMs announced -- Port Houston, the second-largest petrochemical port in the world, allowed ships to access one of its two container ports and Norwegian chemical shipper Odfjell's terminal on Friday as energy infrastructure walloped by Harvey continued showing signs of recovery. Multiple chemical producers still had force majeures in place, telling customers they would not be able to fulfill their contracts because of Harvey, often because logistics were stalled by the storm. Harvey dumped more than 51 inches of rain in the Houston area after coming ashore at the middle of the Texas coast a week ago as a Category 4 hurricane, forcing more than 50% of US ethylene capacity to shut down. Port Houston said no ships could yet move north of the Bayport container terminal, which is just north of Odfjell's terminal near the mouth of the Houston Ship Channel. However, barges and tug boats could traverse the channel and nearby ports in Galveston, Texas City and Freeport. However, ports in Beaumont, Port Arthur and Orange in southeast Texas remained closed and may not open to vessel traffic until Tuesday or Wednesday next week, according to the Sabine Pilots, the organization that oversees vessel movements and safety for those ports. Currents from Harvey's floodwaters were too strong to allow vessel traffic. * Arkema CEO Rich Rowe said the company has little choice but to wait for warming organic peroxides in eight containers at the company's Crosby, Texas, site to ignite and burn in the coming days. A ninth such container suffered two explosions early Thursday. The peroxides produced at the plant are used to make PE, PP and PVC, and must be refrigerated to remain stable. Harvey left six feet of water at the site, which rendered multiple refrigeration systems inoperable. Rowe said it was not safe to approach the remaining containers.

Colonial aims to restart ex-Houston distillates line Monday, gasoline line Tuesday  - Colonial Pipeline, the largest US refined product pipeline, now aims to restore its diesel and jet fuel shipments from Houston on Monday and gasoline shipments on Tuesday, the company said Sunday. The pipeline was previously targeting a Sunday restart of the section of its system between Houston and Hebert, Texas, which it shut because of flooding from Hurricane Harvey. The system continues to operate from Louisiana to the Northeast.  "Colonial continues to ship as much gasoline and other refined products as available from Louisiana-based refineries and other refineries on the Colonial system east of Lake Charles, and will continue to do so as markets return to normal," the company said in a statement.  Half of the 26 refineries that connect to the Colonial system are located between Houston and Lake Charles, which suffered catastrophic flooding during Harvey. The Colonial system runs from Houston to Linden, New Jersey, and supplies about 60% of the incoming supply of gasoline into the Atlantic Coast. Colonial has the ability to ship 1.37 million b/d of gasoline on its Line 1 and 1.16 million b/d of middle distillates on Line 2.  Colonial said Wednesday a lack of supply east of Lake Charles was forcing it to suspend service. On Thursday, it said deliveries would be "intermittent and dependent on terminal and refinery supply."   The reopening of the Calcasieu Ship Channel early Thursday meant that Lake Charles' three refineries were no longer cut off from crude tanker deliveries and could resume production. The area has 789,000 b/d of refining capacity: Citgo's 425,000 b/d plant, Phillips 66's 260,000 b/d Westlake plant and Calcasieu Refining's 104,000 b/d plant.

U.S. Gulf Coast Refiners Begin Recovery -- As much of the U.S. shut down for Monday’s Labor Day holiday, Gulf Coast refiners continued their recovery from the devastation of Hurricane Harvey. Valero Energy Corp. returned two Texas refineries to pre-storm fuel-making rates while three other plants were in various stages of resuming operations, said Lillian Riojas, a spokeswoman for the San Antonio-based company. Exxon Mobil Corp. began shipping gasoline and diesel in Houston-area pipelines, although its Beaumont, Texas, refinery was too flooded to turn back on. Flint Hills Resources LLC and Citgo Petroleum Corp. also were in the process of resuming production, according to Genscape Inc. Gasoline futures surged to a 26-month high last week as Harvey’s churn across southeast Texas and Louisiana knocked out refineries, pipelines and ports responsible for producing and dispatching much of the continent’s gasoline, diesel and jet fuel. The rally began to fizzle as domestic refiners bailed out swamped plants and resumed operations, while European and Asian traders swooped in with cargoes to capture profits. The roller-coaster may continue, with another major hurricane moving across the Atlantic Ocean toward the Caribbean. “We have seen a fair amount of refinery capacity return online but there still is a significant amount that is still offline between the Houston-Beaumont-Port Arthur region,” “The market is pricing in a rather quick recovery in the Houston area but it might still be several weeks for the Houston area refiners to return to full production.”

Colonial Pipeline restarts pumping on distillates line from Houston --Colonial Pipeline, the largest US refined product pipeline, has resumed pumping of diesel and jet fuel shipments on its Line 2 from Houston, the company said Monday. "Line 2 has resumed operation from Pasadena and Houston," the company said in a notice to shippers.Colonial shut down pumping from all Texas locations on its system in the wake of Hurricane Harvey. Smaller volumes of products on Line 2 and the gasoline-carrying Line 1 were flowing last week from Lake Charles, Louisiana, and points further east.Colonial is hoping to restart gasoline flows from Houston on Line 1 Tuesday.The pipeline has previously been targeting a Sunday restart of the Texas potion of Lines 1 and 2.Half of the 26 refineries that connect to the Colonial system are located between Houston and Lake Charles, which suffered catastrophic flooding during Harvey. The Colonial system runs from Houston to Linden, New Jersey, and supplies about 60% of the incoming supply of gasoline into the Atlantic Coast. Colonial has the ability to ship 1.37 million b/d of gasoline on its Line 1 and 1.16 million b/d of middle distillates on Line 2.

Motiva plans Port Arthur restart (Argus) — Motiva plans to restore 40pc of rates at its 600,000 b/d refinery in Port Arthur, Texas, this weekend, the company said today. The facility, which shut amid heavy flooding in the Port Arthur area on 30 August, could reach that limited throughput 10 September if workers can clear equipment checked for storm damage, the company said. Motiva is the US refining subsidiary of Saudi Aramco. The Port Arthur refinery is the single largest in the US. Hurricane Harvey's remnants dropped 47 inches (120cm) of rain in the Beaumont and Port Arthur area last week, including 12.5 inches of rainfall in less than 12 hours.

Since Harvey, gas prices at the pump are up 50 cents a gallon - Harvey’s strike at the Gulf Coast has caused gas shortages and raised prices across Texas and the United States, industry experts said on Tuesday. Prices started to ease during the weekend, but Hurricane Irma, while still well off shore, started to send people in Florida scrambling to fill up their tanks and Gov. Rick Scott suspended highway tolls so people could more easily leave the area.The oil refineries on the Texas Gulf Coast account for half of U.S. refining capacity and produce a quarter of the nation’s gasoline.Nearly 10 percent of the nation’s refineries remained shut on Tuesday including Saudi Aramco’s 603,000 barrel-a-day Motiva plant and ExxonMobil’s 362,300 barrel-a-day Beaumont plant.Other refineries remain at 50 percent capacity, including ExxonMobil’s Baytown refinery, with 560,500 barrels a day, the nation’s second biggest after Motiva.The wholesale price of a gallon of regular unleaded gasoline in San Antonio jumped 49.85 cents during the past two weeks. Prices jumped 41.25 cents a gallon in Austin and 42.97 cents in Houston, according to Matthew Kohlman, senior managing editor of S&P Global Platts, an industry news group. Once retailers added in a few pennies, costs shot up more than 50 cents a gallon at the pump to a Texas statewide average of $2.53, according to the Automobile Association of America. The national average price is up 30 cents a gallon.

Harvey may pinch some Gulf Coast refining, chemical projects - Oil and petrochemical plants along the U.S. Gulf Coast intend to go ahead with plans for near record spending on expansions next year, despite Hurricane Harvey driving up labor costs and slowing work, experts said. Harvey largely spared oil and petrochemical plants along the U.S. Gulf Coast from significant damage but thousands of homes and businesses were not as fortunate. Refiners and recovery projects will compete for the same labor, driving up costs or causing labor shortages. Industrial investment in the Gulf Coast is expected to hit $51.9 billion next year, near the 2015 peak, requiring an army of pipefitters, ironworkers and other craftsman, said Industrial Information Resources (IIR), which tracks labor supply for refiners and other industrial companies. "We had a labor shortage before Harvey, but now it's significantly worse," said IIR's Anthony Salemme. "It's going to spread to soft crafts like painters and insulators." Investments have soared in recent years because the shale revolution fed off an existing infrastructure. The region's deep water ports and expanding pipeline and storage networks offer an easy outlet to global markets. It also boasts a welcoming regulatory climate and skilled workforce. Since 2010, $85 billion worth of petrochemical projects have started or been completed across the United States, nearly all of them in the Gulf Coast region, according to the American Chemistry Council. But the concentration along the Gulf of Mexico leaves these facilities and supporting networks exposed to the brutal force of tropical storms and hurricanes, as Harvey laid bare last month.The storm shut roughly a quarter of the nation's refinery capacity and more than a dozen petrochemical plants halted operations. Ports were closed and key fuel pipelines serving the Midwest and U.S. Northeast were partially or completely shut, driving up pump prices as fears of fuel shortages took hold. Preliminary assessments suggest that storm's hit to the region is not deterring companies from going ahead with existing projects. But global commodities buyers such as Ineos Group and Reliance Industries Ltd that relied on existing facilities shut by the storm may now consider putting some warehouses and stock elsewhere.

Oil Factbox: Colonial Pipeline restarts gasoline Line 1 - Colonial Pipeline, the largest US refined products pipeline, resumed gasoline shipments on its Line 1 from Houston and Pasadena, Texas, the company said Tuesday. That returned the full system to service after Hurricane Harvey knocked out pumping from all Texas locations. Colonial resumed pumping of diesel and jet fuel shipments on its Line 2 from Houston on Monday.Valero Energy, the largest independent US refiner, has told federal regulators the ramp-up of its Houston-area refineries after Harvey could be stalled by a snag over gasoline specifications allowed on Colonial.The refiner said it wants to move winter-grade gasoline on the pipeline, in line with the US Environmental Protection Agency's waiver lifting summer-grade gasoline requirements in 38 states and the District of Columbia two weeks early.Colonial filed its own emergency request to the Federal Energy Regulatory Commission asking for the same action.  Enterprise Products Partners has restarted "substantially all of its major assets impacted by Hurricane Harvey," the company said. Among the units back online are its eight NGL fractionators, six propylene splitters, isomerization facility and octane enhancement unit at the Mont Belvieu, Texas, hub, as well as ethane and LPG loading terminals on the Houston Ship Channel. * Motiva aims to return its 603,000 b/d Port Arthur, Texas, refinery -- the nation's largest -- to service by Sunday, at initial rates of about 40% of capacity, the company said Tuesday. "Motiva's Port Arthur Refinery is in the final phases of equipment assessments and initial phases of refinery start up. We expect the refinery to initially return to approximately 40% production by the end of this weekend, provided that the final assessments meet our operational standards," the emailed statement said. (see refinery list)

Oil Factbox: Industry prepares for Hurricane Irma as Texas refineries recover --Texas refiners and pipelines Wednesday were still in the process of returning operations from the impact of Hurricane Harvey and the US oil industry further east was preparing for Hurricane Irma.  Most of the Texas refineries brought down ahead of Harvey were on their way back Wednesday, with Phillips 66 the latest to announce it had begun a restart Tuesday of its 247,000 b/d Sweeny plant.  Roughly 977,800 b/d of refining capacity remains down, while another 2.75 million b/d of capacity is in the process of returning. Assuming the returning refineries are operating at 50% of capacity, the total downed capacity comes to roughly 2.35 million b/d, or 12.7% of US capacity.The market is now watching Irma, which is moving across the Caribbean and heading to Florida by the weekend.Fuel retailers across Florida reported sporadic shortages Wednesday but expect more outages as residents from across the state, especially those in the southern parts, evacuate ahead of the Category 5 hurricane.  The state depends on barge shipments rather than pipelines for 97% of its refined products. Refined products are shipped regularly into Port Everglades, on the southeast coast. Petroleum throughput at Port Everglades was 121.07 million barrels in 2016, according to the port's website. South Florida ports were open Wednesday.At least one offshore oil producer, BP, is already evacuating nonessential personnel in the US Gulf of Mexico ahead of Irma. * Roughly 977,800 b/d of Texas refinery capacity remained down. Assuming the plants that are returning are at 50% of capacity, that would put the figure closer to 2.35 million b/d, or 12.7% of US capacity. Full shutdown: (Company: Location -- Capacity (b/d)):

  • ExxonMobil: Beaumont, TX -- 362,300
  • Buckeye: Corpus Christi, TX -- 50,000
  • Shell: Deer Park, TX -- 340,000
  • Total: Port Arthur, TX -- 225,500
The Galveston Bay Entrance Channel, Outer Bar Channel, Inner Bar Channel and Bolivar Roads Channel are open, as are the ports of Galveston and Texas City. Freeport is open, albeit with a maximum draft restriction of 38 feet. As draft restrictions remain in place, there has been significant lightering activity. Texas waterborne imports of crude remain sluggish nearly two weeks after Hurricane Harvey made landfall, according to Platts Analytics Bentek Energy and US Customs data. The state's ports imported just 3 million barrels of crude in the past 10 days, roughly one-fifth their typical intake, as port authorities along the coast work to resume normal traffic flows.

Oil surges as refineries restart after Harvey; Irma is trouble for gas -- Oil and gasoline prices snapped back to levels seen before Hurricane Harvey disrupted about a quarter of U.S. refining capacity, but another incoming storm could cut fuel demand and weigh on prices, analysts said on Tuesday. U.S. West Texas Intermediate crude jumped 2.9 percent, or $1.37, to close at a three-week high of $48.66 as refineries sidelined by Harvey started processing oil into fuels. WTI touched a seven-week closing low of $45.96 last Wednesday. U.S. gasoline futures for October delivery were down 2.8 percent to $1.6989 per gallon shortly before WTI's settlement. The September contract rose as high as $2.17 a gallon last week. "What we're seeing here today is really a reversal of the activity we saw in the previous week as oil pipelines were shut down and refineries were shut down," said Andy Lipow, president of Lipow Oil Associates. About 3 million barrels a day, or 16 percent of U.S. refining capacity, remained offline or in preliminary restart mode on Monday evening, according to Lipow. That cut about 1.2 million gallons per day of gasoline supply, roughly equal to consumption in California, Oregon and Washington combined. Refineries were mostly up and running in Corpus Christi, Texas, where Harvey made landfall as a Category 4 hurricane. Plants in Lake Charles, Louisiana, near Harvey's second landfall last week, were also churning out fuel after briefly reducing activity. Major pipelines that move fuel from Houston to Dallas, St. Louis, Tulsa and Chicago were back in operation. The critical Colonial Pipeline that runs from Houston through the Southeast and up to New Jersey fixed a partial outage on its diesel line and expected its gasoline line to be running on Tuesday.

Gas factbox: About 8.1% of Gulf of Mexico output remains offline -- Houston and the Gulf Coast region of Texas continued to dry out Monday following the days of historic flooding that Harvey delivered. The storm made landfall as a hurricane, but did most of its damage to energy infrastructure after it was downgraded to a tropical storm. About 8.1% of daily Gulf of Mexico natural gas output remained offline Monday, 10 days after Harvey began to wreak havoc to the center of US energy infrastructure. It was a slight improvement from 8.4% offline Sunday. The Bureau of Safety and Environmental Enforcement reported that, based on data from operator reports submitted as of 11:30 am local time, about 259.2 MMcf/d of Gulf gas production of 3.2 Bcf/d was shut in. Personnel remained evacuated from 14 production platforms, or 2% of the 737 manned platforms in the Gulf of Mexico, down from the 30 production platforms that saw evacuations as of Sunday. At Cheniere Energy's Sabine Pass LNG export terminal in Cameron Parish, Louisiana, tankers still were unable to access the site Monday because inbound and outbound traffic along the Intracoastal Waterway feeding the terminal remained suspended. A dispatcher for Sabine Pilots, which navigates vessels along the waterway, said the suspension would be in effect until further notice. Another dispatcher said Sunday the suspension could be lifted Tuesday or Wednesday. The last cargo to leave Sabine Pass was August 24, the day before Harvey came ashore along the Gulf Coast.

Potential Natural Gas Storage Scenarios for the Balance of Injection Season --Hurricane Harvey has dissipated, but the affected areas, including energy infrastructure and operations, are still in recovery mode and will be for some time to come. In the natural gas market, production fell as low as 71.3 Bcf/d this past week, and has now rebounded to pre-storm levels near 72 Bcf/d. But exports to Mexico, which were averaging near 4.4 Bcf/d in the 30 days prior to Harvey, were at 3.6 Bcf/d last Friday, still lagging 0.8 Bcf/d (18%) behind their pre-storm level, after dropping to as low as 2.85 Bcf/d last week. Deliveries for LNG export are also down nearly 1.0 Bcf/d (47%) from the 30-day average to just under 1.0 Bcf/d last Friday and dropped to about 475 MMcf/d over the weekend. Meanwhile, U.S. consumption — in the power, industrial and residential and commercial sectors — this past week averaged 62.8 Bcf/d, down 6.0 Bcf/d (9%) versus last year and also 1.6 Bcf/d (3%) lower than the five-year average for this time. In another important market development, Energy Transfer Partners’ new Rover Pipeline began partial service on Friday and deliveries rose to more than 500 MMcf/d over the weekend. What will these shifts mean for the gas market balance and storage inventory? Today, we continue our analysis of the gas market balance, this time with a forward look at potential storage scenarios for the balance of injection season.  We first considered potential supply and demand scenarios for the 2017 injection season in our late-March/early-April blog series You Keep Me Hangin’ On. At the time, the U.S. gas storage inventory was at 2,051 Bcf, 429 Bcf lower than at the same time in 2016. Based on that year-on-year deficit in storage, and given sluggish production growth and prospects for rising exports, we concluded that it would take exceptionally low gas consumption — from the power, residential and commercial and industrial sectors —to come in at three-year lows (2014 levels) in order for the national storage inventory to peak near record highs above 4,000 Bcf for the third consecutive year. What’s more, we found that it would take demand falling to well below 2016 levels for the U.S. storage inventory to even exceed 3,600 Bcf.

Cheniere's Sabine Pass receives first LNG tanker since Harvey - Cheniere Energy was preparing Wednesday to ship its first LNG export cargo from its Sabine Pass terminal in Louisiana since Harvey came ashore along the Gulf Coast as a powerful hurricane almost two weeks ago. The Rioja Knutsen tanker was allowed to dock at the terminal in Cameron Parish after being held in a holding pattern with numerous other vessels in the Gulf of Mexico due to strong currents and high water levels in the Intracoastal Waterway that feeds the facility."We managed to sneak her in today, barely," said Daniel Dubois, chief dispatcher for Sabine Pilots, which navigates vessels along the channel. "We're probably not going to do another one until she sails. The conditions aren't exactly favorable." Extra tugboats were required to guide the Rioja Knutsen to the Cheniere dock safely, Dubois said. If loaded immediately, it could depart as early as Thursday, he said. A Cheniere spokesman, Eben Burnham-Snyder, confirmed the arrival of the tanker but said he had no update on timing. "It is gradually easing," Dubois said of the vessel restrictions. "We've had some diversions when they found out it was going to be a while." The tanker would be the first to depart Sabine Pass since August 24, the day before Harvey came ashore and delivered five days of strong wind and punishing rain to the Houston area, before moving on to East Texas and southwest Louisiana. The Neches River, which feeds the Intracoastal Waterway, rose to record levels, making it dangerous for tankers with a deep draft to pass under bridges.

Meth, coke and oil: A drug boom in the Texas shale patch - (Reuters) - When Joe Forsythe returned to the West Texas oilfields last year after a stint in a drug rehab facility, he figured he had beaten his addiction to methamphetamine.  The 32-year-old rig worker and equipment handler lasted about a year before relapsing.  Forsythe’s experience and others like it reflect a painful flipside of the nation’s shale oil boom - a parallel increase in substance abuse, drug crime and related social ills. While drug use is a problem among industrial workers nationwide, it raises particular concern in the oil patch as U.S. production surges to record levels in what is already one of the nation’s most dangerous sectors - with a fatality rate about three times the average for other industries, according to 2015 federal statistics. Drug use is a significant factor in workplace injuries and crimes involving oilfield workers, according to drug counselors, hospital and police officials and court records in West Texas, the epicenter of the U.S. shale sector. As the shale revolution has spawned waves of hiring here since 2010, law enforcement authorities have tracked a boom in drug trafficking and related crime. In Midland and Ector counties, home to many Permian Basin oil workers, state and local police in 2016 seized more than 95 pounds of methamphetamine - up from less than four pounds in 2010. Meth and cocaine are stimulants of choice in the oil patch to get though long oilfield shifts, but alcohol and pain killers such as opioids are also widely abused - often to soften the crash after taking stimulants, drug addicts and counselors said. Drug charges in the industry town of Midland more than doubled between 2012 and 2016, to 942 from 491, according to police data. In neighboring Odessa, total drug arrests doubled between 2010 and 2016, to 1291 from 756, according to Odessa Police Department data.  The increase in drug crime stretched through two boom periods in the West Texas oil patch, before and after a crude price crash that hit in 2014.

Greenpeace v. Energy Transfer Partners: The Facts -- Greenpeace USA , Greenpeace International , and others are facing another meritless attack from Trump's go-to lawyers in an attempt to silence advocacy work and attack free speech . The latest corporation to sign on to the Kasowitz Benson Torres firm's bullying tactics is Energy Transfer Partners —the company behind the Dakota Access Pipeline . In response to the powerful protests led by Indigenous communities and climate activists, the firm has filed a lawsuit claiming billions of dollars in damages on behalf of Energy Transfer. Here's what you need to know.  In response to the powerful alliance of Indigenous communities and climate activists who protested Energy Transfer Partner's Dakota Access pipeline at Standing Rock, the Kasowitz firm has filed a Strategic Lawsuit Against Public Participation (SLAPP). The goal of this suit is to silence opposition by misrepresenting what happened on the ground at Standing Rock—making outrageous and racist claims that big green organizations like Greenpeace orchestrated the Indigenous-led movement at Standing Rock. This lawsuit is about silencing opposition in Donald Trump's America. While Greenpeace is named as a defendant in the lawsuit, its impacts aren't limited to us. This suit could have far-reaching consequences for journalists, advocacy organizations and anyone who values free speech. The Kasowitz firm is trying to challenge all of our abilities to speak out against corporate power and destruction. This is the second year in a row that the Kasowitz firm has filed a meritless lawsuit against Greenpeace and other public interest advocates on behalf of a corporation. In 2016, the plaintiff was Resolute Forest Products , Canada's largest logging company. That lawsuit made similarly baseless legal claims in an attempt to mislabel legal advocacy as criminal conduct through the use of U.S. racketeering laws (RICO), and presented constitutionally-protected free speech as defamatory. A hearing to dismiss the Resolute lawsuit is scheduled for Oct. 10, 2017 in the U.S. District Court in San Francisco.  These suits are part of a pattern of legal bullying, as desperate corporations and political hacks try to silence activists, journalists and anyone speaking out against injustice. Energy Transfer must know that the end of the fossil fuel era is upon us, and these attacks are a last gasp effort to retain relevance and an illusion of power. What they haven't seemed to realize is that none of us will quit until these pipelines are stopped for good.

TransCanada May Abandon Energy East Tar Sands Pipeline - TransCanada wants to suspend and may even cancel its proposed $15.7-billion Energy East pipeline, which would carry tar sands oil across most of the Canadian continent.  The pipeline giant—the same company behind the controversial Keystone XL —is seeking a 30-day pause on the project in order to do a "careful review" of the National Energy Board's (NEB) tough, new climate standards.  The NEB, Canada's pipeline regulator, announced last month it was widening the scope of its Energy East and Eastern Mainline Project assessment to consider upstream and downstream, or indirect, greenhouse gas emissions.  As the National Observer explained, the NEB's new rules are a departure from its previous practice of only reviewing the impact of pollution caused during pipeline construction and operations—it also considers the impact of pollution caused by the production and consumption of the oil to be shipped by an operator.  NEB also said it will provide "more visibility" to the evaluation of risks associated with accidents such as oil spills. TransCanada said the NEB's expanded pipeline standards could affect the "costs, schedules and viability" of its Energy East project. NEB said it will make a decision on the company's request "in a timely manner." TransCanada's announcement is a win for environmentalists who have long protested the project.  According to the Natural Resources Defense Council , the proposed Energy East pipeline would transport 1.1 million barrels per day of mostly tar sands oil from Alberta to St. John and would bring a significant increase in carbon pollution—the equivalent to the annual emissions of as many as 54 million passenger vehicles—and lock in high-carbon infrastructure expected to operate for at least 50 years.

TransCanada extends Keystone XL open season (Argus) — TransCanada is extending an open season for its long-delayed 830,000 b/d Keystone XL crude pipeline project, citing "the historic flooding and catastrophic impacts" to Houston and parts of the US Gulf coast in the aftermath of Hurricane Harvey. The open season will be extended by about a month to 26 October. TransCanada is seeking binding commitments for Keystone XL and for its existing 590,000 b/d Keystone pipeline, to move crude from Hardisty, Alberta, to markets in Cushing, Oklahoma, and the US Gulf coast. TransCanada said on 28 July that it is working on refreshing legacy shipper contracts for Keystone XL. "Our goal remains to achieve a significant level of long-term 20-year contracts on Keystone in this open season," said liquids pipeline president Paul Miller, while discussing second quarter earnings. The delay in firming up shipper support for Keystone XL is mostly a matter of "refreshing the legacy contracts and getting the documentation in place," he said. Keystone XL would transport crude from Alberta's oil sands to Steele City, Nebraska. Miller also said that the results of the open season along with the end of a regulatory process in Nebraska will determine the next steps for the project. TransCanada first proposed the line in 2008 but it was delayed repeatedly. The administration of previous US president Barack Obama in 2015 blocked Keystone XL after years of review, citing environmental concerns. But the project was revived this year, receiving a cross-border permit from the administration of President Donald Trump on 24 March. Opposition against Keystone XL flared most strongly in Nebraska, where the company still did not have a route approved when it pulled its state application after Obama denied the border-crossing permit. The Nebraska Public Service Commission held formal hearings on the project on 7-10 August. A decision on the state permit is expected later this year. 

Interview: Canadian crude oil exports to Asia could rise - Kinder Morgan's Trans Mountain Expansion project in Canada is expected to start up as planned and will likely open a window of opportunity to export Western Canadian crude oil into Asian markets, Alberta energy minister Margaret McCuaig-Boyd said in an interview Thursday. Canada's crude exports from the west coast to Asia have been negligible for many years because of Vancouver's inability to load on tankers larger than Aframax, as well as a limited surplus for exports to markets other than the US, according to industry sources. But Kinder Morgan's expanded Trans Mountain pipeline, which will boost its capacity nearly threefold, will offer scope to boost Canadian crude exports to Asia, as it would make it relatively easier for Asian buyers to access Canadian crude.  “We are very pleased that Kinder Morgan's line allows access to Asian markets," McCuaig-Boyd said in the interview with S&P Global Platts in Tokyo, adding that while the pipeline would open up a lot of possibilities, actual increases in oil exports to Asia would depend on "market forces." Kinder Morgan's Trans Mountain Expansion project, which received regulatory approval from the Canadian government for expansion in November, will break ground this autumn. It will increase throughput on the Alberta-to-British Columbia pipeline to 890,000 b/d from the current 300,000 b/d. The project is due to be completed by December 2019.

Oil Factbox: Hurricane Irma closes Caribbean storage; Katia heads to Mexico - Hurricane Irma was moving through the Caribbean Thursday, closing petroleum storage facilities as it heads towards southern Florida.A number of storage tanks and other equipment at NuStar Energy's crude and refined products storage terminal on the Caribbean island of St. Eustatius were damaged by Irma. The company had shut down the 14 million-barrel terminal Monday in preparation. Buckeye Partners shut down its Yabucoa, Puerto Rico, facility Tuesday ahead of Irma. That terminal has around 4.6 million barrels of storage capacity for crude, fuel oil and refined products, according to Buckeye's website. Buckeye also said it was "implementing hurricane preparedness plans" at its Grand Bahamas, Bahamas and Florida terminal facilities. Buckeye's 26.2 million barrel terminal in Freeport, Grand Bahama Island, stores crude, fuel oil, and refined products. A report from Galbraith's shipbrokers said the Freeport facility was closed. Statoil said its South Riding Point terminal, also on Grand Bahama Island, was open Thursday, and that the company is monitoring the storm and will "take necessary precautions."Irma is expected to make landfall in southern Florida Sunday morning, according to the National Hurricane Center.  Florida depends on barge shipments rather than pipelines for 97% of its refined products. Refined products are shipped regularly into Port Everglades, on the eastern Florida coast. Petroleum throughput at Port Everglades was 121.07 million barrels in 2016, according to the port's website.  The US Coast Guard is closing south Florida ports, including Port Everglades, starting at 8:00 pm EDT Friday.

Can NAFTA Protect Big Oil From Mexico’s Populist Movement - The second round of NAFTA negotiations that concluded yesterday in Mexico City sought ways to enshrine the 2014 energy sector reforms that the Enrique Pena-Nieto government had launched to overhaul an oil and gas industry monopolized by state-major, Pemex.  This monopoly had all the consequences that were to be expected, including underinvestment in new oil and gas discoveries, falling output, and ultimately, a threat to the country’s energy security with increased reliance on imports, especially of fuels and natural gas, from the U.S.  The reforms that Pena-Nieto’s government effected involved opening up the Mexican energy market to private participants, with a series of oil and gas auctions conducted in relatively quick succession in a bid to address a situation where energy demand at home is growing but production of energy sources is falling.  Yet, this is Pena-Nieto’s last term as president, and the frontrunner for the 2018 election is a leftist candidate, Andres Manuel Lopez Obrador. Obrador, founder and leader of the Morena political party, recently said he will review the current oil contracts that Mexico awards its foreign partners if he wins the vote next year.  Against the background of the United States’ US$64-billion trade deficit with Mexico, the energy reforms from 2014 are an important tool in the NAFTA negotiations. Besides direct participation in oil and gas tenders for U.S. companies and besides fuel and natural gas exports to the south, the U.S. would benefit from exporting oil- and gas-field development equipment to its neighbor.  Enshrining the reforms in the free trade agreement would benefit both sides, protecting foreign participants in the Mexican oil and gas industry from a radical change in the government’s approach to their activities, and stimulating further investments in said sector.Of course, the danger of such a radical change in approach may well be overblown, and Obrador’s comments regarding the reform may just be an example of what politicians usually say on the campaign trail. Reviewing the oil contracts does not necessarily mean canceling them, after all, and a focus on expanding local refining capacity makes perfect sense. Besides, the Morena candidate is certainly aware that Mexico can’t handle its growing energy demand on its own. In short, foreign oil companies operating or planning to start operating Mexican oil and gas fields have little to be concerned about at the moment. Those worried about the fate of the reforms under a leftist Mexican government, however, are probably keeping their fingers crossed for the NAFTA negotiations to end with an agreement – a prospect still distant after the second round of talks ended with no major breakthrough.

ExxonMobil To Invest $200 Million In Argentina's Vaca Muerta (Reuters) - U.S. oil major Exxon Mobil Corp plans to invest $200 million to boost natural gas output in Argentina's Vaca Muerta shale play, a spokeswoman told Reuters on Friday. The company has asked the government of Neuquen province for a 35-year unconventional production concession in the Los Toldos I Sur block, the spokeswoman said. Exxon Chief Executive Officer Darren Woods informed President Mauricio Macri of the plans during a Thursday meeting at the presidential Pink House. Attracting investment to the Belgium-sized Vaca Muerta play, one of the world's largest unconventional gas reserves, is a key priority for Macri's business-friendly administration as it seeks to boost local energy production in order to reduce costly imports. Last year, Exxon said it could invest more than $10 billion in shale projects over 20 to 30 years in the region. In January, Macri reached a deal with unions and companies to lower very high labor costs and attract investment, though executives note that logistics costs remain high. Exxon's Argentine subsidiary owns 80 percent of the Los Toldos I Sur block and is the operator, while Argentine oil company Tecpetrol SA and province-owned Gas y Petroleo de Neuquen each control 10 percent. 

Western Australia halts hydraulic fracturing, to probe risks (Reuters) - Western Australia state (WA) will ban onshore hydraulic fracturing while it looks into the risks associated with the drilling technique, its environment minister said on Tuesday, making it the fifth Australian state to restrict the process.The state of Victoria has banned hydraulic fracturing, or "fracking", as well as shale and coal-seam gas exploration, while the Northern Territory, New South Wales and Tasmania have moratoriums.The blocks come despite a growing gas supply crisis in Australia, where a large portion of supply in the continent's east is drawn from coal seam developments.However, farmers and environmental groups are worried that groundwater reserves could be depleted or contaminated by both conventional and unconventional onshore gas drilling.The Western Australian moratorium was promised to voters by the state's centre-left Labor Party, which won office at an election in March."We appreciate there is a level of community concern around fracking in WA, which is why we are commissioning an independent scientific inquiry," said Environment Minister Stephen Dawson in a statement posted on his website.The inquiry will be run by Tom Hatton, chair of the WA Environmental Protection Authority and examine the effect of fracking on the environment, water, agricultural productivity and the community, according to its website. The pause on fracking freezes more than A$380 million in investment in new onshore projects, said chief operating officer of Australian Petroleum Production and Exploration Association WA, Stedman Ellis, in a statement. 

The next oil major? Service firm Schlumberger's big bet on production (Reuters) - The world’s largest oilfield services company, Schlumberger NV, is spending billions of dollars buying stakes in its customers’ oil and gas projects - investing in the same ventures it supplies with equipment and expertise. The new business model gives Schlumberger a say in drilling decisions, oilfield management and even on hiring other Schlumberger units for service contracts, the company has told investors. The expanded operational authority saves Schlumberger from bidding for each of the many jobs that typically require separate contracts on a large drilling project - effectively locking out the firm’s competitors. Schlumberger’s gamble could upend the service business model throughout the industry, as rivals including General Electric Co’s (GE.N) unit Baker Hughes (BHGE.N) say they are considering whether to adopt similar strategies. The model can supercharge profits on a given job but also ramps up risk, giving the firm more exposure to global oil price swings and potentially big losses if individual projects fail. The downsides have some analysts questioning whether the traditionally conservative firm is taking on too many speculative projects too quickly. Schlumberger already has taken hundreds of millions in write-downs or impairments on some of these joint ventures, according to its financial filings.Traditionally, oil producers manage the risk and make the financial and operational decisions on projects; they pay service providers a fee to carry out individual jobs. Firms such as Schlumberger typically supply a wide variety of services, such as well design, along with technology and staff to run rigs.

Big Oil to be "usurped" by gas in less than a decade, experts warn --  THE dominance of Big Oil will be usurped in less than two decades by the dawn of a golden age for natural gas lasting at least until the middle of the century. One of the world’s biggest risk assurance experts in the global energy ­industry has predicted that gas will emerge as the world’s most important source of energy by the mid 2030s ­after a slow descent for oil which will peak within ten years and the ongoing decline of coal. Royal Dutch Shell has already begun to shift its portfolio towards gas exploration and production in the wake of the global oil price crash Credit: Johnny Greig/Alamy MoreRemi Eriksen, the boss of Norway’s DNV GL, said the group’s first conservative prediction for the future of the global energy industry has revealed a boom in renewable energy which will meet around half the world’s needs – but gas will be the largest single source of energy for decades to come. “Gas will overtake oil as the world’s biggest source of energy by 2034. By 2050 it will be the single biggest source at 27pc of demand,” he said. He added that the demand for gas will tower over the use of individual renewable energy sources such as wind, hydro and solar power, although when totalled ­together renewable energy will make up 50pc of energy use. The fresh findings are reassuring for investors in oil supermajors BP and Royal Dutch Shell which have both ­begun to shift their portfolios towards gas exploration and production in the wake of the global oil price crash. Mr Eriksen said Big Oil will continue to move towards gas on economic grounds due to its low cost compared to oil, and high demand for gas from electricity generators looking for a fuel which is less polluting than burning oil and coal. . 

Is Big Oil Prepared For The Natural Gas Era? -- By 2034, natural gas will overtake oil as the main source of energy, and by 2050 it will be the single largest such source globally, satisfying 27 percent of demand. That’s according to the first Energy Transition Outlook by DNV GL, a global quality assurance and risk management services provider for the oil and gas, maritime, and power industries. Gas supply, however, will peak in 2035.In crude oil, DNV’s report forecasts, supply will plateau between 2020 and 2028, after which it will begin declining steadily. That’s bad news for pure-play oil producers, especially given that the company’s report is conservative, but it would be welcomed by gas suppliers and those like BP and Shell, which are already moving away from oil, investing much more in gas and renewables.Renewables will be the culprit behind fossil fuels’ decline: by 2050, fossil fuels and renewables will have an even share in global energy supply. This will happen thanks to the quickly falling costs of renewable energy installations, especially solar and wind, which means that the transition from fossil fuels to renewables will take place without any significant hikes in annual energy expenditure.As solar PV and wind capacity doubles, the costs for each of the two energy sources will fall by 18 percent and 16 percent respectively. DNV says this will bring down the overall cost for global energy from the current 5 percent of the world’s GDP to less than 3 percent. Related: How Long Can U.S. Refineries Remain Offline?Oil’s biggest enemy is the electric vehicle. Increased adoption of electric cars will be the driver of oil’s demise after 2028. By 2022, DNV estimates, EVs will “achieve cost parity” with internal combustion engines as their cost performance will improve at a much faster pace than the cost performance of ICE vehicles. By 2033, 50 percent of new car sales globally will be EVs.

Platts JKM Weekly: October LNG up 27.5 cents on strong early winter sentiment - S&P Global Platts assessed the October JKM for LNG cargoes at $6.425/MMBtu Friday, up 27.5 cents/MMBtu week on week, on South Korean demand for deliveries in H2 October, ahead of a relatively strong contango into early winter H1 November. October demand has been underpinned by buying interest from end-users in South Korea and China for late October cargoes. South Korean buyer SK was heard to be seeking a late-October cargo with a narrow delivery window. Korea Midland Power and Posco were also seeking a cargo to be delivered between October 23 and October 25 via a tender for delivery into Gwangyang. Pricing uncertainty for winter cargoes and the volatility in UK NBP hub prices has led to spot trade negotiations for November cargoes largely being sluggish. However, bullish sentiment has been building for November trading with current oil-slope equivalent levels around the 13% mark on the back of stronger offer levels. Russia's Sakhalin facility awarded its October 26 and November 3 loading cargoes late last week, with sources indicating cargoes were awarded at around $6.50-$6.70/MMBtu. Sakhalin further issued a tender on Friday offering two November loading cargoes. The tender closes September 14, with bids valid until September 16. Taiwan's CPC closed a tender on Wednesday seeking an unspecified quantity of January cargoes and was thought to have awarded the tender, which will be an early benchmark indication for January. Indian Oil Corp has a tender seeking November 16 delivery closing on September 19 with validity until September 22. Petronas was heard to be marketing one Bintulu cargo for end of September loading, according to two end-users.

France Will Ban All Oil Exploration By 2040 - Road to Paris: France plans to end oil output by 2040 with exploration ban. Link at Bloomberg. Data points and comments:

  • will stop granting new permits next year
  • the move will turn down 40 exploration requests already made
  • this actually includes where France has oil, like French Guiana where Total has a stake
  • big deal? Not. France pumped 6 million bbls of oil in 2015, covering just 1% of its demand
  • this is France's Macaroni simply confirming the obvious: France is unable to meet its own crude oil needs when oil trades at $45
  • this was predicted back on May 18, 2013, at "Europe at a Tipping Point" over at "Big Stories": on that date, first line at that original post: Europe may be the only continent in the world to depend on imported energy -- EU Council President.
  • it looks like France is leading the way

 When is Russia going to run out of oil and natural gas? – Pravda - Russia's Minister for Natural Resources and Environment, Sergey Donskoi, said that Russia's reserves of natural gas and oil will be enough for many decades. According to him, gas reserves in Russia will last for 80 years, while oil reserves - for 29 years, if the country works with ready-to-develop deposits and reserves. "We are still one of the leaders in terms of traditional reserves of natural gas, and we continue opening new ones. The State Reserves Commission has recently received materials on the Tambeyskoye field in Yamal, from which one can extract up to four trillion cubic meters, so we expect a good increase in traditional reserves," the official said.  The minister noted that if one takes into account unconventional and hard-to-extract oil reserves in Russia, they may last not for 29 years, but for several centuries. Sergey Donskoi also said that the introduction of new technologies that will allow to extract raw materials with least spending possible is the main task of the Ministry of Natural Resources. Pravda.Ru discussed the subject of reserves of Russian natural resources in an interview with Rustam Tankayev, member of the Energy Strategy Committee of the Chamber of Industry and Commerce of Russia, general director of InfoTEK-Terminal, leading expert of the Union of Oil and Gas Producers of Russia. (interview transcript)

Novak does not rule out term changes to OPEC/non-OPEC oil output cut deal, if extended - Russia's energy minister Alexander Novak does not rule out that the OPEC/non-OPEC group may consider changes to the existing terms of the production cut agreement if there is a decision on its new extension, he said Wednesday. Novak confirmed that Russia and Saudi Arabia have discussed potential extension of the deal for a further three months beyond March 2018 but said it was too early to speak about concrete details now, with a final decision likely to be taken closer to the date when the current agreement expires. "During the ministerial monitoring committee which meets every two months, we have discussed those issues. The discussion is [focused on the conception that] if there is a need, we'll take such a decision [to expand the agreement and expect] that all countries [participating in the deal] will comply with it," he told reporters on the sidelines of the Eastern Economic Forum in Vladivostok. The decision to expand the deal could be taken if inventories are not reduced to average five-year levels and the market will require additional measures to re-balance it, he said. When asked if Russia and Saudi Arabia consider potential extension of the deal on the current terms or some changes -- including in respect of Libya and Nigeria participation or the size of production cut quotas in general -- are possible, Novak said: "I'll answers with a general phrase: 'Everything is possible.' It is possible to change the terms. If needed, we'll discuss such issues." At the same time, Novak reiterated that it is too early to speak about the details of potential extension of the deal, which expires in more than six months. "If you remember, we decided on the [initial] extension of the deal a month before its expiration date, so I think that we'll discuss these issues next year," he said.

China invests $9.1 billion in Rosneft as Glencore, Qatar cut stakes (Reuters) - Chinese conglomerate CEFC will buy a 14.16 percent stake in Russian oil major Rosneft for $9.1 billion from a consortium of Glencore and the Qatar Investment Authority, strengthening the energy partnership between Moscow and Beijing. CEFC China Energy has grown in recent years from a niche oil trader into a sprawling energy conglomerate and the transaction will allow China, the world’s second largest energy consumer, to boost cooperation with the world’s top oil producer. The deal comes as the United States imposes a new round of economic sanctions on Russia, making it difficult for large Western firms such as Glencore to develop partnerships and increase ties with state-owned firms such as Rosneft. Glencore said in a statement that CEFC will buy shares at a premium of around 16 percent to the 30-day volume weighted average price of Rosneft shares without naming the price. A CEFC spokesman said the company would pay $9.1 billion. Rosneft’s market capitalization stands at $57 billion and the deal makes it one of the largest investments ever made by China into Russia. Glencore and QIA will retain stakes of 0.5 percent and 4.7 percent in Rosneft respectively. The Kremlin has been seeking to expand its ties with China, especially since the West imposed wide-ranging sanctions on Moscow to punish it for the annexation of Crimea and an incursion into east Ukraine in 2014. Russia tops the list of Chinese crude suppliers where it competes with its arch-rival Saudi Arabia, the world’s largest oil exporter.

China's teapot plants form new club to beat rivals, but will it work? (Reuters) - A group of independent Chinese oil refiners is clubbing together to survive an onslaught by state-owned giants and the rise of private chemical giants, but industry analysts said the new alliance may find it hard to stick. Less than two years after becoming some of China’s newest crude oil importers, around 20 independent plants in the eastern industrial heartland of Shandong province plan to form a joint venture to coordinate their production, marketing, crude oil imports and investments. The new alliance, to be called the Shandong Refining & Chemical Group, is to be headquartered in the provincial capital Jinan, and as envisioned will be an upgrade on a crude-buying federation set up in early 2016 by some of the same members. The new group of “teapot” refiners aims to pool funds and resources to produce fuels and chemicals more efficiently as they battle stiff competition in an increasingly saturated market and under tightened environmental and tax scrutiny. “We see the need to advance to the next stage as we face competition from both the national team and the provincial team. We can’t afford operating like a plate of scattered sand,” said Zhang Liucheng, a vice president of Shandong Dongming Petrochemical Group [SDHLYD.UL], one of the initiators of the stronger alliance. The earlier crude-purchasing club was too loose an organization and did not have much success, Zhang said. But while Shandong Dongming and fellow founding member Qingyuan Group are trying to build a more formal structure, including registering the new company as early as next week with a capitalisation of 50 billion yuan ($7.7 billion), there are few details such as a list of members and when they will start to commit funding.  Analysts said pooling the assets and coordinating the investments of 20 plants that have multiple private and local government owners will be a huge challenge.  “The new group shall have bigger political bargaining power ... but it will be hugely difficult to align all the various interests,” said Harry Liu, of consultancy IHS Markit.

Oman’s petroleum and other liquids production reached record levels in 2016 -- Oman set a new record with annual total oil production in 2016 exceeding 1 million barrels per day (b/d). Oman’s petroleum and other liquids production ranks seventh among the Middle Eastern countries. Oman is the largest oil producer in the Middle East that is not a member of the Organization of the Petroleum Exporting Countries (OPEC). Like many countries in the Middle East, Oman is highly reliant on its hydrocarbons sector. The Oman Ministry of Finance stated that finances have been severely affected by the decline in oil prices since mid-2014. In 2016, Oman's oil and natural gas revenues were 67% lower than in 2014, despite achieving record production. Oil revenue accounted for 27% of Oman’s gross domestic product (GDP) in 2016, a decrease from 34% of GDP in 2015 and 46% in 2014. Before setting the country's oil production record in 2016, Oman’s annual petroleum and other liquids production had peaked at 972,000 b/d in 2000 and dropped to 715,000 b/d in 2007. Since then, Oman’s total oil production has risen because of increased adoption of enhanced oil recovery (EOR) techniques and recent discoveries of oil. Oman was on track to maintain this production level in 2017, but as part of an agreement with OPEC member countries, Oman reduced production to approximately 970,000 b/d in early 2017.  Almost all of Oman’s oil production is exported, mainly to Asian markets. In 2016, Oman exported 912,500 b/d of crude oil and condensate, its highest level since 1999. Virtually all of the country’s crude oil exports in 2016 went to countries in Asia, with 78% going to China.

Saudi Aramco Uses New Technology To Re-Explore Vast Empty Quarter (Reuters) - Oil giant Saudi Aramco is using new technology to re-explore areas of the vast Arabian desert known as the Empty Quarter, which could help to bolster its proven reserves of oil and gas before the company offers its shares to the public. A team of about 900 people is using advanced seismic technology developed over the last few years to explore 15,400 square kilometres (5,950 square miles) around Turayqa in Saudi Arabia, Aramco said in a statement. Turayqa, discovered in 2013, is an onshore conventional gas field that contains no oil. Part of the area was previously explored by joint ventures involving Aramco and foreign companies, Aramco said. The JVs failed to find recoverable quantities of oil and gas. "Data processing is ongoing. The area partially covers areas relinquished by some of the joint ventures," the company told Reuters. Aramco set up four consortia in 2003 and 2004 to explore the Empty Quarter, but they ended their search after failing to find commercial volumes of gas. The new seismic technology may improve the chances of successful exploration, though it cannot by itself prove the existence of oil and gas reserves; drilling is needed for that. Seismic technology uses artificially induced shockwaves in the earth.  It not only provides a three-dimensional picture of the structure of rock going down several kilometres (miles), but also tells the user physical characteristics of the rock, such as its density and fluid saturation, he said.

OPEC invites Libya, Nigeria to committee meeting Sep 22 -- Libya and Nigeria, the two OPEC members exempt from the current oil production cut deal, have been invited to participate in the producer group's latest ministerial committee meeting September 22. The two countries have been asked to attend the meeting in Vienna to identify the latest developments in their oil sectors, Kuwait's OPEC governor, Haitham al-Ghais told Al-Rai newspaper Sunday. Nigeria's oil production, including crude oil and condensates, is currently at around 2.2 million to 2.3 million b/d, including about 300,000 to 400,000 b/d of condensates, oil minister Emmanuel Kachikwu said Thursday. Libyan output had also recovered to reach an average of 990,000 b/d in July, its highest level in three years, up 180,000 b/d in June, according to the latest S&P Global Platts OPEC survey. This was before the closure of three fields -- the 300,000 b/d Sharara, 90,000 b/d El-Fil and 10,000 b/d Hamada field, shutting-in around 360,000 b/d of output since the middle of August. OPEC will consult with them to identify their plans, Ghas said. The production cut agreement, which began January 1, calls on OPEC's 14 members along with 10 non-OPEC countries, led by Russia, to cut a combined 1.8 million b/d in output through March. The group will hold a technical committee meeting on September 20, looking at the continued effects of US shale oil on the global market, and the impact of Hurricane Harvey. "The amount of production affected by the hurricane is estimated at 700,000 b/d, which may strengthen the status of the market", Ghais said. US production had increased by 500,000 b/d so far in 2017, compared with 2016, he added. This will be followed September 22 by a committee overseeing the deal, composed of ministers from Kuwait, Russia, Venezuela, Algeria, Oman and Saudi Arabia. 

Hedge funds anticipated hurricane disruption to U.S. refineries: Kemp (Reuters) - Hedge funds turned bearish towards U.S. crude while boosting bullish positions in gasoline and heating oil in the final week of August, anticipating major disruption to U.S. refineries as a result of Hurricane Harvey.Hedge fund operators responded in the classic textbook manner for a supply interruption expected to hit refineries rather than crude production by selling crude while buying fuels ( funds and other money managers cut their net long position in futures and options contracts linked to Brent and WTI by 107 million barrels to 582 million barrels in the week to Aug. 29.Almost all the reduction in positions came from WTI (which fell by 105 million barrels) rather than Brent (which were declined by just 1 million barrels) reflecting the specific disruption in the United States. The one-week decline in net long positions in WTI was the largest on record, as fund managers prepared for a big drop in crude consumption due to the refinery closures in Texas. But fund managers boosted their net long position in U.S. gasoline by 12 million barrels to 49 million barrels, anticipating an acute shortage of refined fuels.  U.S. crude, which had been edging towards backwardation, swung to a large contango, anticipating a temporary oversupply of crude and inadequate refining capacity.Price discounts for U.S. crude delivered in October compared with December widened to $1.33 per barrel on Aug. 31 from 26 cents on Aug. 21 ( contrast, the gasoline market tightened sharply, with the October-December backwardation surging to 24 cents per gallon on Aug. 31 from 5 cents on Aug. 21 (

U.S. Crude Edges Higher, Gasoline Tumbles After Harvey - U.S. crude oil prices edged higher on Monday while gasoline prices slumped to pre-Hurricane Harvey levels, as oil refineries and pipelines in the U.S. Gulf Coast slowly resumed activity, easing supply concerns. U.S. West Texas Intermediate (WTI) Clc1 crude futures were 8 cents higher at $47.37 per barrel at 1351 EDT (1751 GMT) as U.S. demand recovered after being hit by reduced refinery activity since Harvey made landfall on Aug. 25. Brent crude futures settled 41 cents lower at $52.34, due in part to a shift away from crude markets to assets perceived to be safer, such as gold, after a powerful North Korean nuclear test. NYMEX gasoline futures RBc1 were down 3.28 percent at $1.6906 a gallon, a level last seen on Aug. 25. Damage by Harvey to the oil infrastructure in the Gulf Coast appeared less extensive than some had feared. A number of major refineries, which convert crude oil to refined products such as gasoline and jet fuel, were gradually resuming operations on Monday. Colonial Pipeline, the largest American fuel system, was restarting the distillates segment of its pipeline from Texas to New Jersey. Its gasoline pipeline was due to resume operations on Tuesday, the company said. At the same time, about 5.5 percent of the U.S. Gulf of Mexico’s oil production, or 96,000 barrels of daily output, remained shut on Sunday, down from a peak of more than 400,000 bpd last week. “The disruptions from Hurricane Harvey in the U.S. Gulf Coast are gradually clearing. In the broader scheme of things, it appears that so far the energy industry was spared major damages to assets and infrastructure,” . “However, some Houston-area refineries will likely remain offline for some time longer.” Traders booked dozens of gasoline tankers over the past week from Asia and Europe to the United States and Latin America in order to plug supply shortages in the wake of the shutdowns. 

Oil Markets Rebound After Hurricane Harvey - U.S. Gulf Coast refineries have started to come back online, easing fears of a major fuel shortage, although bottlenecks and localized scarcities will persist for some time. The Gulf Coast is still drying out while another major hurricane looms towards the end of the week. . A handful of refineries have come back online as the flood waters have receded, allowing operations to resume. ExxonMobil is bringing its Baytown facility back online, the second largest in the nation. Valero Energy (NYSE: VLO) said its Corpus Christi refinery (293,000 bpd) and its Texas City refinery (225,000 bpd) have returned to full production, while its Port Arthur refinery (293,000 bpd) was in the “final stages” of returning to operation. However, the Motiva complex (600,000 bpd) remains offline. Still, enough refineries have come back online to allow the restart of the Colonial Pipeline system, a crucial conduit to supplying the East Coast. Gasoline prices fell back from their peaks last week.   The return of a large chunk of the Gulf’s refining capacity has smoothed out the price spike in the gasoline futures market. But that does not mean that the disruptions will be over soon, or that the gasoline market will see minimal effects. Some refineries could be offline for weeks, perhaps months. “We have seen a fair amount of refinery capacity return online but there still is a significant amount that is still offline between the Houston-Beaumont-Port Arthur region,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, told Bloomberg. “The market is pricing in a rather quick recovery in the Houston area but it might still be several weeks for the Houston area refiners to return to full production.”

Asian traders look to snap up US crude in wake of Hurricane Harvey (Reuters) - Some oil traders in Asia are looking to snap up crude cargoes from the United States after Hurricane Harvey closed U.S. refineries, denting local demand and pushing out the price spread between U.S and Atlantic Basin crude benchmarks. Hurricane Harvey barreled into the U.S. Gulf of Mexico coast around 10 days ago, closing nearly a quarter of the nation’s refining capacity, although some of that is now coming back online. The closures pushed the prompt-month spread between West Texas Intermediate crude and Brent crude to the widest in two years at nearly $6 a barrel last week, pushing Asian traders to hunt for competitively priced U.S crude. However, some said spot prices would need to ease further before traders fixed cargoes for the journey east. “One good piece of news is that the WTI-Brent spread has blown out so much that means excess U.S. crude is going to be exported,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo. “It looks like there wasn’t much damage to export facilities and they should come back up quicker (than expected).” Prices for WTI light grades were the weakest and they could head to Asia first, said a Singapore-based trader, declining to be identified as he was not authorised to speak with media. Still, the market is evolving daily with spot levels for WTI Midland WTC-WTM rebounding on Tuesday after several refineries restarted post-Harvey. Taiwanese refiner Formosa Petrochemical Corp could consider buying from the United States. “We’re watching the situation,” spokesman KY Lin told Reuters. “U.S. crude’s length may worsen and put more downward pressure on prices in the next two weeks.”

 Market Movers Europe, Sep 4-8: Harvey pushes European crack spreads to two year highs (Platts video) In the European gasoline market, prices soared by more than 50% last week as traders rushed cargoes across the Atlantic in response to supply problems caused by Tropical Storm Harvey.Deliveries of petrochemical products from the US into Europe this month are also under a question mark, with at least 13 major petrochemical sites shut down in the US Gulf Coast region and supplies of many products under force majeure.Meanwhile, in metals, the European steel coil market is bullish as producers return from their summer holidays. Mills are likely to seek an extra Eur20-40/metric ton after other markets -- primarily China -- spiked. Finally, in UK electricity, forward prices for September have been rising ahead of reduced gas and coal plant availability and, as this graph shows, September traded above October.  hile September is braced for reduced availability, October is the start of a new era under the new UK Capacity Mechanism.

Oil traders expect a tighter market in 2018: Kemp (Reuters) - While the headlines have been dominated by the devastation wrought by Hurricane Harvey, oil traders have quietly become more bullish, or at least less bearish, about 2018.Brent calendar spreads have resumed their steady march from contango towards backwardation as Texas refineries resume operations after shutting down during the storm.Brent spreads from November to December and December to January are now trading in small backwardations while inter-month spreads for the rest of 2018 are close to flat ( calendar spread for the whole of the first six months has moved into backwardation for the first time since oil prices started to slide in July 2014 ( are closely related to traders’ perceptions about the future supply-demand balance and changes in inventories.Contango is associated with high and/or rising inventories while backwardation is linked to low and/or falling stocks.Like spot prices, spreads can be distorted by short-term noise as traders accumulate and liquidate positions in a herd.But spreads are arguably less noisy than spot prices, and provide analysts and traders with an improved signal to noise ratio ( For the first time since oil prices slumped in 2014, the emergence of a small sustained backwardation indicates traders anticipate a balanced market or even a sustained drawdown in global oil inventories. Brent spreads are not the only sign of renewed bullishness among oil traders. Futures prices for U.S. crude to be delivered in 2018 have been rising in recent sessions and are now at the highest level since May.The WTI calendar strip for 2018, which is the benchmark for U.S. shale firms’ hedging programmes for next year, has climbed to around $50.70 per barrel from a recent low of $45 in June ( If most oil traders are not exactly bullish yet, they are no longer bearish.

WTI Pops, RBOB Drops As Refiners/Pipelines Restart, Irma Looms -- WTI crude prices are testing above $48 this morning (and RBOB prices tumbling) as refiners and pipelines come back on line faster than expected and fears of Hurricane Irma's path impacting Gulf production edge higher.As Goldman notes, the recovery from Hurricane Harvey has accelerated over the weekend, with prolonged dry weather helping the decline in flood levels. We estimate that half of shut-in refinery capacity will likely be back online by Thursday, September 7.  Yet the corresponding level of outages of 2.0 mb/d remains elevated relative to the limited damages reported by both producers (0.3 mb/d currently offline) and midstream operators. With nearly all ports reopening, the key to a normalization in crude and petroleum product supply will therefore hinge on how long some refineries may be forced to stay offline, with guidance that at least 1.4 mb/d of capacity could still be offline past mid-September. In addition, curtailed NGL fractionation capacity could over time prevent and in fact reverse the recovery in shale production. Additionally, concerns over the path of now Cat-5 Hurricane Irma are spooking energy markets as Goldman warns that RBOB prices could spike once again if Irma makes a violent landing on the Southern U.S. East Coast and Florida because the region is sparse on oil infrastructure and the effect of the storm would be mostly felt on demand instead, and other forecasters are fearful of Irma's path progressing into the Gulf and affecting offshore production significantly.

First Glimpse Of Harvey Impact Shows Biggest Crude Build In 5 Months, Smaller Gasoline Draw Than Expected -- Amid all the chaos of Harvey's outages and Irma's expectations, tonight's API inventory seems relatively irrelevant but we are sure the machines will be all over it - no matter that it will be guesstimated more than normal. WTI was at one-month highs above $49 as API printed and kneejerked lower despite a smaller than expected crude build (still the biggest build since March) and a smaller than expected draw in gasoline. API:

  • Crude +2.79mm (+4mm exp) - biggest build in 5 months
  • Cushing +669k (+1mm exp)
  • Gasoline -2.544mm (-5.2mm exp) - biggest draw in 6 weeks
  • Distillates -610k

Last week's modest builds in products and big draw in crude occurred before Harvey hit. This week's data shows the initial effects with a major build in crude (though less than expected) and major draw in gasoline stocks (though also less than expected).

Oil markets dip storm Harvey fallout; Hurricane Irma heads into Caribbean (Reuters) - Oil prices slipped on Wednesday as crude demand remained subdued on the back of refinery closures following Hurricane Harvey which hit the U.S. Gulf coast 10 days ago. Market focus was also being drawn to Hurricane Irma, a record Category 5 storm, which is barrelling towards important shipping lanes in the Caribbean. Although many refineries and pipelines which were knocked out by Harvey are now in the process of restarting, analysts say it will take some time before the U.S. petroleum industry is back to full crude processing capacity. As of Tuesday, about 3.8 million barrels of daily refining capacity, or about 20 percent, was shut, though a number of the refineries in that group were in the process of restarting. Several others, including Marathon’s Galveston Bay and Citgo’s Corpus Christi refineries, were running at reduced rates, according to company reports and Reuters estimates. U.S. West Texas Intermediate (WTI) crude futures Clc1 were at $48.57 barrel at 0333 GMT, 9 cents, or 0.2 percent, below their last settlement. In international oil markets, Brent crude futures LCOc1 dipped 19 cents, or 0.4 percent, to $53.19 a barrel. Meanwhile, Hurricane Irma is heading for the Caribbean islands of Antigua, Barbuda, Anguilla, Montserrat, St. Kitts and Nevis, the Virgin Islands, Puerto Rico, the Dominican Republic, and parts of Cuba. “With another hurricane threatening to hit the U.S. coast, traders still remain cautious,”

Hurricane Irma Could Destroy Oil Demand - About half of the shuttered refining capacity along the Gulf Coast could be back up and running by Thursday, assuaging concerns about the possibility of acute gasoline shortages in much of the U.S. The disruptions of more than 4 million barrels per day of refining capacity have been cut in half, with major refineries restarting operations in Corpus Christi and Houston. ExxonMobil is ramping up operations at its Baytown facility, the second largest in the country. Valero Energy brought two refineries in Corpus Christi and Texas City back online, with another large one in Port Arthur scheduled to resume operations soon. The massive Motiva refinery – the largest in the country with 600,000 bpd of capacity – is still offline, but is getting closer to resuming operations. The large volume of restarts led to a spike in crude oil prices on Tuesday, with WTI up more than 3 percent. Gasoline futures fell back as the Colonial Pipeline restarted shipments. Goldman Sachs predicts that as of Thursday, half of the shuttered refining capacity will have resumed. But what about the rest? An estimated 1.4 mb/d could remain offline through mid-September at least, the investment bank predicts. Goldman says the lingering effects will be “modestly bearish,” projecting a 40-million-barrel increase in crude oil inventories. But the quick comeback of some larger refineries led Goldman to lower its projected demand impact from -750,000 bpd in the first month after the storm to just -600,000 bpd. However, the effects could actually become slightly bullish over time as the recovery efforts pick up, and intriguingly, there is “potential for some sustained US onshore production curtailments.” Eagle Ford shale drillers were forced to shut in some shale output as both the takeaway capacity (i.e., pipelines) and Gulf Coast refineries went offline, backing up crude at the wellhead. Some estimates put Eagle Ford output down by half at first, although data is hard to come by at this point. Goldman Sachs estimates that 200,000 bpd of Eagle Ford production “remains shut-in,” which offsets some of the bearish impact on WTI from the refinery outages. Adding in some lingering outages offshore in the Gulf of Mexico, total upstream supply outages still stand at about 300,000 bpd.Goldman raises the possibility that the comeback in shale production could be curtailed by the sustained outages at Gulf Coast refineries, a scenario that it says is underappreciated by market analysts.

US Crude Oil Inventories INCREASED SIGNIFICANTLY -- September 7, 2017 -- This will extend the time to re-balancing for a few more months.  US commercial crude oil inventories (excluding the SPR) increased by 4.6 million bbls. I believe this is the greatest increase since we started tracking this metric about 20 weeks ago.  At 462.4 million bbls, US crude oil inventories are in the upper half of the average range for this time of year (the report did not say over how many years the "average" was determined). The average was pulled up significantly by the Saudi surge between 2014 and 2016, so saying US inventories are in the upper half is not good news for oil bulls.   Interestingly, total motor gasoline inventories decreased 3.2 million bbls last week despite the fact that Texans were not driving because they had run out of gasoline, post-Harvey. Regardless, gasoline inventories remain  near the upper limit of the average range, so if you think you are over-paying for gasoline ... guess what, you probably are.

Crude Oil Price Barely Blinks Following EIA Inventory Report - The U.S. Energy Information Administration (EIA) released its weekly petroleum status report Thursday morning, showing that U.S. commercial crude inventories increased by 4.6 million barrels last week, maintaining a total U.S. commercial crude inventory of 462.4 million barrels. The commercial crude inventory has moved into the upper half of the average range for this time of year. This week’s report was delayed by one day due to the Labor Day holiday. Last week’s results also reflect the impact of tropical storm Harvey on the region of the country where nearly half of its oil production is refined. Tuesday evening the American Petroleum Institute (API) reported that crude inventories rose by 2.8 million barrels in the week ending September 1. API also reported gasoline supplies fell by 2.5 million barrels and distillate inventories fell by 600,000 barrels. For the same period, an S&P Platts Global survey of analysts had consensus estimates for a decrease of 2.7 million barrels in crude inventories, a decrease of 4.2 million barrels in gasoline inventories and a drop of 1.9 million barrels in distillate stockpiles. Total gasoline inventories fell by 3.2 million barrels last week, according to the EIA, and remain near the upper limit of the five-year average range. U.S. refineries produced about 9.5 million barrels of gasoline a day last week, down about 1.1 million barrels compared to the prior week. Total motor gasoline supplied (the agency’s proxy for demand) averaged over 9.5 million barrels a day for the past four weeks, down by 1% compared with the same period a year ago. Refinery closures due to tropical storm Harvey are virtually entirely responsible for last’s build in the crude oil inventory and the drop in gasoline stockpiles. With refineries closed and export terminals shut down, there was nowhere for oil to go last week. Had wells in the Eagle Ford shale play not been shut in for several days the stockpile situation could have been even more lopsided.

WTI/RBOB Drop After Harvey Prompts US Crude Production Collapse, Biggest Inventory Build In 6 Months  --Last night's first glimpse of Harvey's impact on energy confirmed a sizable crude build but only modest gasoline draw. WTI/RBOB prices slid into the DOE print and extended losses (after a quick kneejerk higher) following a bigger than expected crude build (+4.58mm vs +4mm exp). Gasoline and Distilates saw bigger draws than API reported but it was the collapse in Lower 48 crude production that stood out with most of Texas offline. DOE:

  • Crude +4.58mm (+4mm exp) - biggest build in 5 months
  • Cushing +797k (+1mm exp)- biggest build in 5 months
  • Gasoline -3.20mm (-5.2mm exp)- biggest draw in 2 months
  • Distillates -1.396mm

The inventory changes reported by the API were much smaller than those forecast by analysts. As a reminder, Saxo Bank's Ole Hanson notes that "inventory data later is a lot of moving parts which could be quite skewed away from what we’ve seen in recent weeks." Additionally, investors “are going to be skeptical of the data,” James Williams, an economist at energy researcher WTRG Economics, told Bloomberg. “It might be pretty flaky data this week and next, so I don’t expect to see a big market-mover”Bloomberg's Fernando Valle notes energy's past week was all about Hurricane Harvey as refineries shuttered, choking output and hauling down inventories of gasoline and distillates. Bigger than expected crude build and bigger gasoline and distillate draws than API reported...

OilPrice Intelligence Report: Bearish Backlash Drives Oil Prices Down - Oil prices collapsed again on Friday as China aims to reduce the capacity of its teapot refineries and Hurricane Irma zeros in on Florida. This dramatic drop in oil prices has ended several days of strong gains and created the largest spread between WTI and Brent in two years. More refineries are trickling online. Crude is getting loaded on tankers in the ports of Corpus Christi for export. According to IHS Markit, Galveston Bay is operational, and the Houston shipping channel is mostly open. Three refineries in Lake Charles are finally receiving crude oil. Railroads are mostly back up and running. IHS Markit says that 8 of the 20 refineries impacted by Harvey are running at “normal” rates, while all but one of the other 12 are moving towards, or are in the process of, restarting. There is nothing surprising about the EIA data release, but it is still eye-opening to see the hard numbers. On Thursday, the first government data since Harvey hit showed a plunge in U.S. crude oil production by about 750,000 bpd for the week ending on September 1. IHS Markit says the Eagle Ford is quickly restoring lost production and the offshore sector is also getting back to normal. Refining runs were obviously down sharply, while imports also fell. Gasoline prices jumped to a national average of $2.679 per gallon, up from just $2.399 a week earlier. The quick restart to so many Gulf Coast refineries has led to a quick fallback of gasoline futures. WTI swiftly rebounded as well, with fears of major disruptions subsiding as the Texas’ energy industry gets back on its feet. The spread between Brent and WTI jumped to its largest disparity in two years at over $6 per barrel. But that will likely ease as Gulf Coast refineries ramp up and U.S. crude is exported. There is a line of tankers sitting in the Gulf waiting to receive crude, so U.S. oil exports should rebound quickly. 

Crude Is Getting Slammed After China Headlines - WTI crude is suddenly tumbling. While it's unclear of the specific catalyst (storms outweighing most other events), desk chatter suggests it is due to a story in The FT thatChina is striving to reduce capacity of its 'teapot' oil refineries - thus cutting demand notably.Beijing’s push to use crude import quotas and licences as a tool to spur consolidation within China’s independent refining sector is working to correct an industry that has grown “out of control”. A new report from Columbia University’s Center on Global Energy Policy argues the number of privately owned “teapot” refineries will shrink over the next decade as larger, sophisticated plants thrive at the expense of smaller rivals.Consolidation comes as the industry faces pressures from overcapacity, a battle for market share between independent and state-owned companies and slower demand for refined products. Large plants with higher utilisation rates and greater access to imported crude had already begun acquiring smaller plants that had not been granted the same rights by Beijing.“The government does not want dozens of refineries running at 40-50 per cent capacity,” said Erica Downs, the author of the report.“Beijing is correcting a course for an industry that has gotten out of control.” The reaction to this potential plunge in demand hit WTI immediately

Baker Hughes: US rig count gains 1 unit to 944 - The overall US rig count has made another slight gain again this week. Baker Hughes’ calculation of active US rigs increased 1 unit during the week ended Sept. 8 to 944. Rigs drilling for oil were down 3 units to 756 rigs compared with last week, while those rigs targeting natural gas gained 4 units to 187 rigs. Rigs unclassified were unchanged again this week at 1 unit.The US rig count is up 436 rigs from last year’s count of 508, with oil rigs up 342, gas rigs up 95, and unclassified rigs down 1.The US offshore rig count was unchanged from last week to 16. This count is down 2 year-over-year. On land, the count also was unchanged at 923 units this week.Among the major oil and gas-producing states, New Mexico gained 3 rigs this week to 68. North Dakota, Pennsylvania, and West Virginia each gained 1 unit to respective counts of 53, 33, and 15.Six states were unchanged this week: Texas, 455; Oklahoma, 130; Ohio, 29; Wyoming, 25; California, 16; and Utah, 8.Louisiana, Colorado, and Arkansas each lost 1 unit to respective counts of 65, 36, and 0. Alaska was down 2 units to 2 rigs working.In Canada, the overall rig count increased 1 unit this week to 202. Rigs drilling for oil were unchanged at 102 and those targeting gas rose 1 unit to 100. The total count is up 68 units from this time a year ago when 134 rigs were working.

Oil Prices Slip Amid Falling U.S. Rig Count - The number of active oil and gas rigs in the United States rose this week by 1 rig. Baker Hughes Rig Count last week was largely unchanged as well, with data for 47 counties South Texas largely unavailable last week due to the Hurricane, according to BH. The total oil and gas rig count in the United States, two weeks post-Harvey, now stands at 944 rigs, up 436 rigs from the year prior, with the number of oil rigs in the United States decreasing by 3 this week and the number of gas rigs increasing by 4.  Oil rigs in the United States now number 756—342 rigs above this time last year.  The number of rigs fell in Arkoma Woodford (1), DJ-Niobrara (1), Fayetteville (1), and Granite Wash (1). Permian, Haynesville, and Cana Woodford, and Marcellus all gained two rigs.  Prices fell on Friday despite promises of decreased exports from Saudi Arabia for the month of October, with promises of a 350,000 bpd decline for the month, with exports to the United States to be below 600,000 bpd.  At 10:53pm EDT Friday, WTI was trading down 1.63 percent at US$48.29, with Brent trading down 0.48 percent at US$54.23—both benchmarks up from last week.    Despite the small rise in the number of active rigs in the United States, US crude oil production slipped the week ending September 1 to 8,781 bpd—the first under-9,000 bpd week since February. Hurricane Irma is currently headed for Florida, and expected to weaken demand further in the coming week, as ports have closed ahead of the storm. Hurricane Katia is following closely behind, and expected to hit the Mexican coast by early tomorrow. At 8 minutes after the hour, WTI was trading at $48.06 with Brent crude trading at $54.10.

OPEC Aug crude oil output 32.65 mil b/d, down from July on Libya outages: Platts Survey - OPEC's crude oil output fell in August for the first time in five months, as outages in Libya interrupted the country's recent dramatic recovery, more than offsetting gains in Nigeria, according to the latest S&P Global Platts OPEC survey released September 7.  Saudi Arabia, Iraq and Gabon also produced fewer barrels in August, while Angola raised its output in the month. In all, the 14-country bloc produced 32.65 million b/d in August, a 170,000 b/d drop from July, the survey found.Libyan output, which had risen to 990,000 b/d in July, tumbled to 830,000 b/d in August as militants blockaded key fields Sharara, Elephant and Hamada.Libya's National Oil Corp. said in the week ended September 1 more than 360,000 b/d of production from the three fields had been shut in, although sources told Platts late September 6 that flows from the 300,000 b/d Sharara and 10,000 b/d Hamada fields had resumed.Production also restarted at the 90,000 b/d Elephant field on September 2, sources said. Nigerian production, meanwhile, rose 50,000 b/d to 1.86 million b/d in the month, as the country's output continues to rebound from civil unrest.In a podcast last week, Nigerian oil minister Emmanuel Kachikwu suggested that the country's production was close to full capacity, linking the rise in output to increased investment by foreign companies on relative calm in the Niger Delta oil province.Nigeria lifted force majeure on loadings of key export grade Bonny Light in August.Libya and Nigeria are exempt from OPEC's landmark production cut agreement, and their recovery over the past few months had led to talks among the coalition on whether the two should be asked to join in on the cuts, although Libya's setback in August may quell some of that discussion.Representatives from Libya and Nigeria have been invited to the September 24 meeting of the OPEC/non-OPEC monitoring committee overseeing the deal to explain their production outlooks. The two members' combined August average output was 480,000 b/d above their level in October, the benchmark month from which OPEC based its production cuts and quotas.

Potential impact of Harvey fallout on OPEC output deal; outlook for Libya's oil sector - OPEC Outlook Podcast - With Hurricane Harvey battering the heart of the US oil industry in Texas, S&P Global Platts senior writer Herman Wang takes a look at how the fallout from the storm might impact OPEC and its production cut agreement in the weeks to come. Will the hurricane deal a blow to OPEC’s attempt to rebalance the market, just as fundamentals seemed to be turning in the producer group’s favor this summer?Also on the S&P Global Platts OPEC Outlook podcast, we preview the September 24 meeting of the OPEC/non-OPEC monitoring committee overseeing the production cut agreement, as Saudi Arabia and Russia line up support behind a three-month extension of the deal.  And in our Get to Know an OPEC Member series, this month the podcast focuses on war-torn Libya, which is rebuilding its oil industry after years of civil strife that still simmers today.  Neil Quilliam, a senior research fellow at the Chatham House’s Middle East and North Africa program and also a director at energy consultancy Rapidan Group, joins the podcast to discuss Libya’s oil outlook.

Syria may be in ruins, but it looks like Assad ‘has won the war militarily’ -- In southern Syria’s chilly late winter of 2011, a scrap of schoolboy graffiti that read “Your turn, Doctor” — a mocking call for the ouster of President Bashar Assad — helped spark a ferocious civil war that has left hundreds of thousands dead and millions displaced. Now, there is a growing diplomatic consensus that Assad, the 51-year-old ophthalmologist who inherited Syria’s leadership 17 years ago from his dictator father, has almost certainly prevailed against efforts to dislodge him militarily — and that his opponents need to come to terms with his political survival as they plot a new course.The multi-sided war, midway through a seventh brutal year, is far from over. But Assad’s consolidation of control in key parts of the country, and continued crucial aid from allies Russia and Iran, have contrived to make it virtually impossible for the rebels who once enjoyed U.S. support to drive him from power, longtime observers of the conflict say.“Bashar Assad’s government has won the war militarily,” said Robert Ford, a former U.S. ambassador to Damascus who witnessed the uprising’s earliest days. “And I can’t see any prospect of the Syrian opposition being able to compel him to make dramatic concessions in a peace negotiation.” The government has yet to fully secure areas around the capital, and fighting continues in various pockets of Syria’s east as well as the northwestern province of Idlib. Yet even Assad’s staunchest international adversaries see the continuation of his rule as a fait accompli and have urged the rebels arrayed against him to do the same. “The nations who supported us the most … they’re all shifting their position,” said Osama Abu Zaid, an opposition spokesman contacted by phone. “We’re being pressured from all sides to draw up a more realistic vision, to accept Assad staying.”

The U.S. Is in Denial About the Civilians It’s Killing in Syria -- Citing an estimated 20,000 civilians who remain trapped in Raqqa, U.N. humanitarian advisor Jan Egeland asked last week for consideration of a humanitarian pause in the city, similar to the respites organized last year in eastern Aleppo, where regime forces were fighting rebels. Despite a number of major investigations into the civilian death toll in Raqqa by multiple human rights organizations in recent months, there is no sign either side is considering any sort of pause.In a report released Aug. 24, the same day Egeland made his appeal, Amnesty International described the hell facing civilians, including thousands of children, at Raqqa. Survivors who fled the city said Islamic State fighters have been “laying landmines and booby traps along exit routes, setting up checkpoints around the city to restrict movement, and shooting at those trying to sneak out.” But the report also described a “constant barrage of artillery strikes and airstrikes” by the coalition that further restricts movement and has injured and killed hundreds of people.Witnesses told of how shells ripped through civilian homes and killed those seeking to escape. “Artillery shells are hitting everywhere, entire streets,” one witness said. “It is indiscriminate shelling and kills a lot of civilians.”  Throughout operations to capture Mosul and Raqqa, the coalition has argued that defeating the terrorist group quickly would ultimately save more lives. After Egeland’s comments, the coalition quickly tamped down expectations that the tempo of fighting might slow in Raqqa or anywhere else. “Any pause in operations will only give ISIS more time to build up their defences and thus put more civilians in harm’s way,” coalition spokesman Col. Joseph Scrocca said. “What is more, it will further reinforce ISIS’s tactic of using civilians as human shields.”

The Stranded ISIS Bus Convoy That No One Knows What To Do With - In a bizarre twist to an already unusual story, a convoy of 17 buses carrying Islamic State terrorists and their families has remained stranded since Thursday in the Syrian desert as the US, Russians, and Syrians discuss their fate: attack the convoy or allow it to pass?Regardless of what happens, emerging photos and video depicting ISIS' retreat from Lebanon as well as their current helpless plight stuck in the middle of Syria constitutes perhaps the most significant blow to ISIS propaganda to date.  Earlier this week we reported on the unusual deal which allowed a large convoy of Islamic State fighters and their families to exit their contested stronghold along the Syrian-Lebanese border under the watch of the Lebanese and Syrian armies and Hezbollah after being defeated. As first announced by Hezbollah's Secretary General Hassan Nasrallah in a speech Monday night, the deal involved the transportation of 26 wounded and 308 ISIS fighters, along with 331 civilian family members via buses and ambulances to Syria's eastern province. The controversial deal was struck in return for the bodies of 9 Lebanese soldiers, kidnapped by ISIS in 2014. That convoy was allowed to enter Syria but was attacked by the US-led anti-ISIL Coalition on Wednesday as it crossed open desert on its way to the Islamic State stronghold of Deir Ezzor. Per coalition statement, the convoy wasn't attacked directly - just outlying ISIS vehicles which were attempting to join and bolster the transport. Part of the highway in front of the convoy, including a key bridge, was further targeted in order to stop its movement.

 Israel hits Syrian site said to be linked to chemical weapons (Reuters) - Israel attacked a military site in Syria’s Hama province early on Thursday, the Syrian army said, and a war monitoring group said the target could be linked to chemical weapons production. The air strike killed two soldiers and caused damage near the town of Masyaf, an army statement said. It warned of the “dangerous repercussions of this aggressive action to the security and stability of the region”. The Syrian Observatory for Human Rights, which monitors the war, said the attack was on a facility of the Scientific Studies and Research Centre, an agency which the United States describes as Syria’s chemical weapons manufacturer. It came the morning after U.N. investigators said the Syrian government was responsible for a sarin poison gas attack in April. Syria’s government denies using chemical arms. In 2013 it promised to surrender its chemical weapons, which it says it has done. The Observatory said strikes also hit a military camp next to the center that was used to store ground-to-ground rockets and where personnel of Iran and its ally, the Lebanese Hezbollah group, had been seen more than once. An Israeli army spokeswoman declined to discuss reports of a strike in Syria. Syria’s foreign ministry has sent letters to the U.N. Security Council protesting against Israel’s “aggression” and saying anyone who attacked Syrian military sites was supporting terrorism, Syrian state TV reported.

While defeat of Isis dominates global attention, al-Qaeda strengthens in Syria. --Al-Qaeda is creating its most powerful stronghold ever in north-west Syria at a time when world attention is almost entirely focused on the impending defeat of Isis in the east of the country. It has established full control of Idlib province and of a vital Syrian-Turkish border crossing since July. “Idlib Province is the largest al-Qaeda safe haven since 9/11,” says Brett McGurk, the senior US envoy to the international coalition fighting Isis.  The al-Qaeda-linked movement, Hayat Tahrir al-Sham (HTS), which used to be called Jabhat al-Nusra, has long been the most powerful rebel group in western Syria. After the capture of east Aleppo by the Syrian army last December, it moved to eliminate its rivals in Idlib, including its powerful former Turkish-backed ally Ahrar al-Sham. HTS is estimated to have 30,000 experienced fighters whose numbers will grow as it integrates brigades from other defeated rebel groups and recruits young men from the camps for Internally Displaced Persons (IDPs) who have sought refuge in Idlib from President Bashar al-Assad’s forces.   Al-Qaeda is growing in strength in and around Idlib province just as Isis is suffering defeat after defeat in eastern Syria and Iraq. Its latest setback was its failure on Tuesday to stop the Syrian army linking up with its enclave at Deir Ezzor, where Isis has been besieging the government held part of the city for three years. Divided by the Euphrates, the city is the largest in eastern Syria and its complete recapture opens the way to the al-Omar oilfields that once provided half of Syria’s crude production. 

Why Jihadism Won't Be Allowed To Die - Pepe Escobar - Plan B of Daesh’s masters may have been to indoctrinate repeated waves of misguided youth across the EU and “seduce” them into D.I. Y. jihadi terror, creating fear and insecurity in Europe. I’ve just been to Barcelona — and that’s not happening. No Fear. Daesh can also manipulate its brand name to stake a claim into what we may call the New War Belt in Southwest Asia. That’s also not happening, because the “4+1” – Russia, Syria, Iran, Iraq, plus Hezbollah – with the addition of Turkey, and with China in a “leading from behind” role, are all working together.The unfinished war across “Syraq” coupled with spasms of jihadism in Europe could certainly still metastasize into a massive Eurasian cancer, spreading like a plague from Afghanistan to Germany and vice-versa, and from the South China Sea to Brussels via Pakistan and vice-versa.What would happen under this cataclysmic scenario is the complete derailment of the Chinese-driven New Silk Roads, a.k.a. Belt and Road Initiative (BRI); its integration with the Russia-driven Eurasia Economic Union (EAEC); and a massive security threat to the domestic stability of the Russia-China strategic partnership, with uncontrollable bellicose scenarios developing very close to their borders. It’s no secret which elements and institutions would very much cherish internal political chaos in both Russia and China. Dr. Zbig “Grand Chessboard” Brzezinski may be dead, but geopolitics is still encumbered with his corpse. Brzezinski’s life obsession is that no peer competitor to the US should be allowed to emerge. Imagine as he lay dying contemplating the ongoing, ultimate nightmare; a Russia-China pan-Eurasian alliance. The less disastrous scenario in this case would be to seduce either Moscow or Beijing into becoming a US partner, based on which one would pose a lesser “threat” in the future.  Thus the obsession of the US deep state and the Clinton machine in demonizing all things Russia – like an infantile neo-McCarthyism on steroids. Inevitably, what this geopolitical back hole has precipitated is China’s even more rapid advance on all fronts.

Report: 1,100 Children Killed in Yemen, Majority from U.S.-Backed Saudi Airstrikes -- A new United Nations report says more than 1,100 children have been killed during the war in Yemen—and that the majority of these children were killed by U.S.-backed, Saudi-led airstrikes. The U.N. also described the ongoing humanitarian crisis in Yemen as an "entirely man-made catastrophe." The ongoing war has left more than 7 million people on the brink of famine. The U.S.-backed bombing campaign has also devastated Yemen’s health, water and sanitation systems, sparking the world’s worst cholera epidemic, with 600,000 people affected.

What is fuelling Yemen’s cholera epidemic?  - With Yemen mired in the third year of a war led by Saudi Arabia and its allies, the country's population is facing a humanitarian crisis of unprecedented proportions.More than 20 million Yemenis require humanitarian support, with nearly half of those in acute need of assistance, according to the United Nations. This year, a new wave of cholera cases further devastated the population, infecting hundreds of thousands of people and killing more than 2,000. Aid agencies have warned that without urgent action, the situation will continue to deteriorate.Analysts have described the Saudi-led offensive in Yemen as a strategic failure, but although Saudi's crown prince recently expressed his desire for an exit strategy, there is no immediate end in sight - and the humanitarian consequences will endure long after the bombs stop falling. Al Jazeera spoke with Tarik Jasarevic, a spokesperson for the World Health Organization, about the impacts of the current cholera epidemic on Yemen's vulnerable population.

U.S. Is Said to Seek a Ban on Crude Oil to North Korea - The U.S. is circulating a draft resolution at the United Nations that would bar crude oil shipments to North Korea, ban the nation’s exports of textiles and prohibit employment of its guest workers by other countries, according to a diplomat at the world body.The proposal, which also calls for freezing the assets of North Korean leader Kim Jong Un, has been circulated to the 15 members of the Security Council, according to the diplomat, who asked not to be identified discussing internal deliberations. The U.S. has said it wants the council to take up tougher sanctions at a meeting Sept. 11.The bid for the toughest penalties yet against North Korea comes despite renewed warnings against such moves by the leaders of China and Russia, which have veto power in the Security Council. U.S. President Donald Trump and Chinese President Xi Jinping spoke for 45 minutes Wednesday amid Pyongyang’s stepped-up pace of nuclear and missile tests.“We will not be putting up with what’s happening in North Korea,” Trump told reporters Wednesday after the conversation. The two leaders had a “very, very frank and very strong call,” he added. Asked about possible U.S. military action, the president said “That’s not our first choice, but we’ll see what happens.”There remain questions over how far the Security Council will go in punishing Kim’s regime after North Korea conducted its sixth and most powerful nuclear test on Sunday. Russia and China have opposed doing anything that could lead to the collapse of Kim’s regime. Analysts have said China may only agree to a partial or temporary oil exports ban. Tensions are also set to rise between China and South Korea with Seoul moving Thursday to deploy more launchers for a U.S. defense shield known as Thaad. Four launchers have arrived at Seongju military base despite opposition by residents and activists, Yonhap News reported. China has angrily opposed its neighbor having Thaad, saying it could upset the security balance in the region and be used against Beijing’s own missile systems.

South Korea Proposes Full Oil, Currency Blockade Of North; China Says No -- Unable to make de-escalation progress using conventional diplomatic means at the United Nations, on Monday South Korean President Moon Jae-in proposed that the U.N. Security Council hold serious discussions about imposing an energy and capital blockade on North Korea, by cutting off oil supplies to Kim's regime coupled with a block of North Korean sources of foreign currency, the South Korean president's office said. Moon discussed the idea with his Russian counterpart, Vladimir Putin, during a phone call, according to South Korea's Blue House. "It's time for the U.N. Security Council to seriously consider ways to block North Korea's sources of foreign currency, including a halt to oil supplies to the North and a ban on its exportation of laborers," the office quoted Moon as saying in the wake of the 6th North Korean nuclear test. According to Yonhap, the South Korean leader also said Sunday's nuclear test "was different from past experiments in size and character, and expressed his heightened concern over North Korea's claim that it was an H-bomb that can fit atop an intercontinental ballistic missile." Putin, who is attending a BRICS emerging economies summit in China, sided with his South Korean peer and said that North Korea's nuclear and ballistic missile programs destroy the international nonproliferation regime and pose a "real threat" to regional peace and stability. He also noted that the leaders at the summit adopted a statement condemning the latest test. Moon underscored his commitment to resolving the North Korean nuclear issue diplomatically and peacefully. Putin, in turn, said the leaders at the summit agreed there is only a diplomatic solution to the problem.

Oil supplies to North Korea could be cut as China’s frustration with ally’s failure to communicate grows | South China Morning Post: China is likely to support tougher sanctions against North Korea, including cutting crude oil exports, but Beijing will not completely sever the energy exports to ensure the regime of its ally did not collapse, according to Chinese diplomatic analysts. The assessment came after North Korea conducted its sixth nuclear test and claimed it had detonated a hydrogen bomb on Sunday, overshadowing a summit of emerging market economies summit held in China. The test has increased Beijing’s frustrations with Pyongyang as it has ignored the call to stop nuclear weapon development, and reflected the fact that communications between the two nations seem to have broken down. North Korea used to inform China at least a few hours ahead of its plan to launch nuclear test, but a Beijing-based Asian diplomat said the practice has stopped since Pyongyong’s fourth test in January 2016. China was not notified about the fifth nuclear test last September even though a senior official from Kim Jong-un’s regime visited Beijing shortly before. The Chinese Foreign Ministry did not say whether Beijing was informed by Pyongyang before the latest test, but diplomatic observers said communication between the two sides have been increasingly difficult as Pyongyang continues to defy Beijing with its nuclear programme. “It is a flat-out lie for people to say that North Korea does not hold grudges against China,” Zhang Liangui, a professor of international strategic research at the Central Party School, said. “North Korea has rejected all of China’s initiatives and it has become reluctant to listen to Beijing.” 

A War With North Korea Could Send Oil Prices Skyrocketing -  An open military conflict in Northern Asia would disrupt more than a third of global seaborne crude oil trade, Wood Mackenzie warned last week amid yet another escalation between North Korea, its neighbors, and the U.S.  Such a conflict would cripple North Asia’s production and refining capacity, the consultancy said. Some 65 percent of Asia’s crude oil refining capacity is located in China, Japan, and South Korea, so the effects of an open war would be far-reaching and potentially long-lasting. The most pressing question, then, is how likely such an open conflict is.Pyongyang seems determined to expand its military capabilities with intercontinental ballistic missiles that can carry a nuclear head. State media claim that the nuclear head is a fact, releasing a photo featuring the country’s leader Kim Jong Un inspecting said weapon. After a quick succession of ballistic missile tests over the last couple of months that put South Korea, Japan, and the U.S. on red alert, more nuclear talk from Pyongyang is exactly what the world does not need. Yet it is what we are getting.Talk is not enough to tip the region into a war - possibly even a nuclear war - but it serves to heighten the pressure, and decisions made under pressure are seldom the wisest. Analysts seem to be divided as to the most probable course the events would take.A recent analysis by SBS News’ Kelsey Munro looks into the two basic scenarios: accept a nuclear North Korea, or prevent it from becoming nuclear as soon as possible.Geopolitics experts seem to be split on which scenario is the more sensible one to follow.On the one hand, Munro notes, some researchers believe that accepting North Korea’s nuclear capability would prevent a war that would result in hundreds of thousands of casualties and disrupt the Asian economy. This would be a conventional war, since the chances of success for a tactical nuclear strike seem to be too slim to be comfortable with. On the other hand, acceptance of a nuclear Pyongyang will in all probability lead to other countries in the region going nuclear, ultimately pushing the world closer to a nuclear war as it would be that much harder to exercise any pressure on North Korea after it has solidified its second-strike capability.

North Korea Claims It Has Developed Advanced Hydrogen Bomb, EMP -- A day after Russian President Vladimir warned that the US and North Korea are “balancing on the verge of a large-scale conflict," North Korean leader Kim Jong Un is doing everything in his power to validate Putin’s words. To wit, in a segment broadcasted Saturday by the Korean Central Broadcasting Network, the North’s state-run television-news network, the North claimed to have developed a functional hydrogen bomb. In the broadcast, Kim can be seen looking on as what’s purportedly a hydrogen bomb is loaded onto an intercontinental ballistic missile. In the report, KCNA claimed that the North has developed a weapon with “great destructive powers” adding that since all hydrogen bomb components are homemade, it can "produce as many as it wants." The report also claimed that the North have developed a powerful electromagnetic pulse weapon. More details from Dow Jones:

  • North Korea Says It Has ‘Succeeded in Making a More Developed’ Nuclear Weapon
  • Kim Jong Un Witnesses Hydrogen Bomb Being Loaded onto a ‘New ICBM’ —North Korea State Media
  • New Hydrogen Bomb’s Explosive Power Goes Up to Hundreds of Kilotons —North Korea State Media
  • North Korea Threatens ‘Super-Powerful’ EMP, or Electromagnetic Pulse, Attack
  • North Korea Claims All Hydrogen Bomb Components Are ‘Homemade,’ Can Produce ‘As Many As It Wants’

As a reminder, in July, the North launched two ICBMs capable of reaching the US mainland, and after a monthlong break, Kim resumed his provocative missile tests last Friday by launching three short-range missiles into the Sea of Japan – and then on Monday, in another unprecedented provocation, the North fired an intermediate-range missile over the northern Japanese island of Hokkaido.

North Korea tests nuclear bomb it says can be made into warhead for long-range missile - South China Morning Post - North Korea detonated a hydrogen bomb with “perfect success”, its state media said on Sunday, adding that the device was capable of being loaded onto its long-range missiles.Hours after the North’s sixth nuclear detonation, an announcer on its official Korean Central Television declared: “The hydrogen bomb test was a perfect success.”Earlier monitors measured a 6.3-magnitude tremor near its main testing site, which South Korean experts reportedly said was nearly 10 times more powerful than the 10-kiloton test carried out a year ago.US President Donald Trump called North Korea’s actions “very hostile and dangerous” in a series of tweets.“North Korea has conducted a major Nuclear Test,” Trump wrote. “Their words and actions continue to be very hostile and dangerous to the United States.”Trump said the latest nuclear test was an embarrassment for China and proved that South Korea’s “talk of appeasement” was a waste of time.South Korean President Moon Jae-in called for the “strongest punishment” against North Korea while China and Russia both strongly condemned the test.China’s Foreign Ministry said in a statement that China “expresses its firm opposition (to the test) and strongly condemns it.”North Korea “has ignored the international community’s widespread opposition, again carrying out a nuclear test. China’s government expresses resolute opposition and strong condemnation toward this”, the foreign ministry said in a statement on its website.Xinhua reported that President Xi Jinping and Russian President Vladimir Putin agreed to “appropriately deal” with the North’s nuclear test. Japan also condemned the test and Prime Minister Shinzo Abe spoke to Trump on the phone. The two leaders agreed on the need to put more pressure on Pyongyang.

Satellite Images Reveal Numerous Landslides Around North Korea Test Site After Nuclear Test - Commercial satellite images taken one day after North Korea conducted its largest nuclear test to date (currently estimated to have been around 120 kilotons, or 8 times the yield of the bomb dropped on Hiroshima), show numerous landslides throughout the Punggye-ri Nuclear Test Site and beyond, 38 North reveals. The area of these surface disturbances, which include numerous areas of pre-existing gravel and scree fields that have apparently been lofted in place from the tremors, is centered about Mt. Mantap at an elevation of 2205 meters. According to the authors, these disturbances are more numerous and widespread than what they have seen from any of the five previous tests North Korea conducted, which would be in keeping with the increased power of the latest test. That said, there does not appear to be any evidence of a collapse crater, as might have been suggested from the strong, post-test tremor. Unfortunately, the resolution of this imagery is presently insufficient to show any other damage, (e.g. to buildings at the base of the mountain in the support areas), although it is sufficient to justify concerns that the entire site may have become unstable following the test, as some Chinese scientists have suggested.

North Korea’s nuclear test site at risk of imploding, Chinese scientist says - SCMP  -The single mountain under which North Korea most likely conducted its five most recent nuclear bomb tests, including the latest and most powerful on Sunday, could be at risk of collapsing, a Chinese scientist said. By measuring and analysing the shock waves caused by the blasts, and picked up by quake stations in China and neighbouring countries, researchers at the University of Science and Technology of China in Hefei, Anhui province, said they were confident that they were all carried out from under the same mountain at the Punggye-ri test site. The team from the seismic and deep earth physics laboratory made the claim in a statement posted on their website on Monday. Its leader, geophysicist Wen Lianxing, said that based on data collected by more than 100 earthquake monitoring centres in China, the margin of error was no more than 100 metres. Wang Naiyan, the former chairman of the China Nuclear Society and senior researcher on China’s nuclear weapons programme, said that if Wen’s findings were reliable, there was a risk of a major environmental disaster.  Another test might cause the whole mountain to cave in on itself, leaving only a hole from which radiation could escape and drift across the region, including China, he said. “If the mountain collapses and the hole is exposed, it will let out many bad things.” Sunday’s blast was followed by an earthquake eight minutes later, which China’s seismic authorities interpreted as a cave-in triggered by the explosion.

China Holds Military Exercise Along North Korea Border - The Chinese government bristled last week after the US suggested that it might cut economic ties with any country trading with North Korea, an implicit dig at the Chinese, who are responsible for 90% of the isolated country’s foreign trade. And after suggesting that they might use their UN Security Council veto power to block more sanctions against the North – after all, the China-Russia peace map calls for the US and South Korea to stop holding military drills – the North’s neighbor and primary benefactor has reportedly conducted a military exercise of its own, according to Reuters. News of the drill arrived as US President Donald Trump is expected to press China to institute an oil embargo against North Korea, eliminating the country’s primary source of petroleum, which flows to it from China through the “Friendship Pipeline” which runs from China under the Yalu River into North Korea. China’s air force has carried out exercises near the Korean peninsula to practice defending against a “surprise attack” coming over the sea, Chinese state media reported. An anti-aircraft defense battalion carried out the exercises early on Tuesday, near the Bohai Sea, the innermost gulf of the Yellow Sea that separates China from the peninsula, an official military website reported. While Reuters offers scant details about the exercise and the motives behind it, it’s safe to say that China is preparing for any blowback that could occur should the US-North Korea war of words blossoms into a full-scale military conflict, as Russian President Vladimir Putin has repeatedly warned. If the Kim regime falls, China would certainly need to defend its border with the North as the country devolves into chaos.

Putin opposes military action against North Korea -- Imposing tougher sanctions on North Korea over its nuclear missile programme would be counterproductive, and threats of military action could trigger "a global catastrophe", Russian President Vladimir Putin has said. Putin, speaking on Tuesday after a BRICS summit in Xiamen, China, also criticised US diplomacy in the crisis and renewed his call for talks, saying North Korea would not halt its missile testing programme until it felt secure. "Russia condemns North Korea's exercises; we consider that they are a provocation ... [But] ramping up military hysteria will lead to nothing good. It could lead to a global catastrophe," Putin said. Nikki Haley, the US ambassador to the UN, said on Monday that North Korea's leadership is "begging for war" as she called on the body's Security Council to impose tougher measures against the country following its most powerful nuclear test to date. The Korean Central News Agency (KCNA), the North's state-run agency, hailed Sunday's test, saying it "marked a very significant occasion in attaining the final goal of completing the state nuclear force". Putin also criticised the United States, saying it was preposterous for Washington to ask for Moscow's help with Pyongyang after sanctioning Russian companies whom US officials accused of violating North Korea sanctions. "It's ridiculous to put us on the same [sanctions] list as North Korea and then ask for our help in imposing sanctions on North Korea," said Putin.

South Korea's Moon says he and Putin share understanding on North Korea (Reuters) - South Korea’s President Moon Jae-in said on Wednesday he and Russian President Vladimir Putin shared an understanding that resolving the North Korea nuclear issue is a top priority for development in East Asia. Moon, making the comments at a joint media conference with Putin after a meeting in Russia, said the Russian president expressed his full support for South Korea’s efforts to handle issues related to North Korea. Moon and Putin met on the sidelines of an Eastern Economic Forum in the Russian city of Vladivostok, that began on Wednesday.

Japan Prepares For Mass Evacuation Of 60,000 Citizens From South Korea  - It won't be the first time that a near-panicked Japan has came close to the edge when it comes to North Korea, and in preparation for an "emergency" it prepared to evacuate its citizens in South Korea. The last such notable spike in escalations took place in April, when as the Yomiuri Shimbun reported at the time, the Japanese government had asked the U.S. to provide advance consultation if it is about to launch military action against North Korea, and "ramped up preparations for emergency situations", including the potential evacuation of some 57,000 Japanese citizens currently in South Korea. Fast forward to today when moments ago Japan's Nikkei reported that as tensions on the Korean Peninsula reach new heights with Pyongyang's latest nuclear test, Japan is planning for a possible mass evacuation of the nearly 60,000 Japanese citizens currently living in or visiting South Korea."There is a possibility of further provocations," Japanese Prime Minister Shinzo Abe said at a Monday meeting with ruling coalition lawmakers. "We need to remain extremely vigilant and do everything we can to ensure the safety of our people."In response to North Korea's sixth nuclear test, Japan and the U.S. are seeking a peaceful resolution by ratcheting up economic pressure on the rogue state through an oil embargo and other measures, while South Korea's president has also called for a currency/FX blockade of the Kim regime. And yet, what has spooked Tokyo is that on Sunday, Defense Secretary James Mattis also said any threat to the U.S. or its allies "will be met with a massive military response - a response both effective and overwhelming." Which means thousands of Japanese may soon be in harm's way.

Modi's Demonetization Called "Colossal Failure That Ruined Economy" As India GDP Growth Slumps To 2-Year Lows - India's embattled Prime Minister Narendra Modi faced a double whammy of abuse this week as his nation's economic growth collapsed to its weakest since Q1 2014 and India's Central Bank released a report on Modi's extraordinary "demonitization" plan last year showing that 99 per cent of the high denomination banknotes cancelled last year were deposited or exchanged for new currency, crushing Modi's lie that his contentious 'war on cash' would wipe out huge amounts of so-called 'black money'. When Modi announced in November that Rs1,000 ($16) and Rs500 notes would no longer be legal tender, he suggested that corrupt officials, businessmen and criminals — popularly believed to hoard large amounts of illicit cash — would be stuck with “worthless pieces of paper”. At the time, government officials had suggested that as much as one-third of India’s outstanding currency would be purged from the economy - as the wealthy abandoned or destroyed it, rather than admit to their hoardings - reducing central bank liabilities and creating a government windfall.Since he unleashed his cunning plan, India's GDP growth has slowed dramatically. After India's Composite PMI collapsed, India's Q2 GDP growth slowed to 5.7% - its weakest since Q2 2014...

Demonetisation is a Clear Case of How Public Policy Should Not be Made -- Demonetisation as a means of tackling the black economy was destined to fail. What’s worse is that its ripple effects are having severe adverse effects on India’s economy. That 99% of the currency demonetised found its way back to the RBI has been known for some time. The surprise is why it took so long for the announcement to be made. An article in the Economic and Political Weekly in June showed, based on the RBI data, that 98.8% of Rs 15.44 lakh crore had come back by January 13, 2017. So it was difficult for the RBI to delay its announcement beyond its annual report.Now, the government is putting the spin that almost all the currency coming back is a measure of the success of demonetisation. It is, however, embarrassing because in November 2016, it was expected that Rs 3-4 lakh crore of black cash would not come back into the banks and that black money would be wiped out. This expectation has been belied.Worse, since Rs 8000 crore is known to have been with the cooperative banks, which were earlier not allowed to return to the RBI but are now allowed to deposit with it, only about Rs 8000 crore would be left. Even this is most likely to be accounted for by money in Nepal and other neighbouring countries. Some amount would have been left lying with those who did not remember where they had kept their savings. They may be the old, infirm or the sick. This money with people is likely to be legitimate. So, in a sense, the entire Rs 15.44 lakh crore may be accounted for.  If more money coming back to the RBI is a measure of success, then the government should welcome people (having old notes) depositing their money in the banks. Instead, the government is fighting tooth and nail against allowing one last chance to the old and the infirm to deposit the money they may have forgotten about.

If Anything, Demonetisation Slowed the Rate of Increase in Income Tax Base - Year-to-year growth in the number of tax payers in 2016-17 was 26% (with demonetisation), which is less than 27.6% during 2015-16 (without demonetisation). In my last article in response to the clarifications issued by the Ministry of Finance on August 18, I pointed out the inconsistencies in their response. For instance, “Instead of waiting for all the data to come in and making a simple apples-with-apples comparison, why has it (the government) been throwing different numbers at the people?”Let us have a quick recap of the various numbers given at various point of time by the government – 56 lakh, 5.4 lakh, 91 lakh and 33 lakh – for the increase in the number of taxpayers post-demonetisation.The first number, 56 lakh, was the number mentioned by the prime minister during his Independence Day speech, but this number was comparing only the e-returns filed for a specific period (April 1 to August 5). This is the same figure given by the Central Board of Direct Taxes (CBDT) press release dated August 7, which claimed a jump of 25% in returns filed, leading the media to go into overdrive with the hyperbole that finally demonetisation was paying off. The last number, 33 lakh, disclosed to parliament on August 1, was a comparison of returns filed in the post-demonetisation period (November 9 to March 31). As these numbers are dealing only with partial data, any analysis using them will only lead to conjecture. This left us with two numbers – 5.4 lakh, in the Economic Survey Volume II, and 91 lakh, mentioned by the finance minister in a press conference in May 2017.

Narendra Modi pushes for early creation of a Brics rating agency to counter western institutions - Prime Minister Narendra Modi on Monday pushed for the early creation of a credit rating agency by Brics countries to cater to the needs of developing nations, The Economic Times reported. Speaking at the Brics plenary session in Xiamen, China, Modi said, “Our Central Banks must further strengthen their capabilities and promote co-operation between the Contingent Reserve Arrangement and the IMF [International Monetary Fund].” The idea was first mooted in 2015 and the plan for a rating agency was announced by the Brics member countries – Brasil, Russia, India, China and South Africa – after last year’s summit in Goa in October. The agency is envisioned as an alternative to western rating institutions, which currently dominate the space. Standard & Poor’s, Moody’s and Fitch control 90% of the world’s rating business. Developing countries have often criticised western agencies for being biased in their ratings and frequently downgrading growing nations.  In May, Chief Economic Adviser Arvind Subramanian criticised the western ratings agencies and questioned their methodology for failing to upgrade India’s status in recent years, despite considerable economic progress. “In recent years, rating agencies have maintained India’s BBB- rating, notwithstanding clear improvements in our economic fundamentals (such as inflation, growth, and current account performance),” he said, according to The Times of India.  Moody’s has kept India at Baa3 rating since 2004, while Fitch and S&P have maintained their BBB- rating on India for over a decade. These are the respective agencies’ lowest investment grade ratings, below which a country is considered vulnerable to meet its financial commitments.

 Who are the Rohingya and what is happening in Myanmar? -- Described as the world’s most persecuted people, 1.1 million Rohingya people live in Myanmar. They live predominately in Rakhine state, where they have co-existed uneasily alongside Buddhists for decades. Rohingya people say they are descendants of Muslims, perhaps Persian and Arab traders, who came to Myanmar generations ago. Unlike the Buddhist community, they speak a language similar to the Bengali dialect of Chittagong in Bangladesh. The Rohingya are reviled by many in Myanmar as illegal immigrants and they suffer from systematic discrimination. The Myanmar government treats them as stateless people, denying them citizenship. Stringent restrictions have been placed on Rohingya people’s freedom of movement, access to medical assistance, education and other basic services.  Violence broke out in northern Rakhine state on 25 August when militants attacked government forces. In response, security forces supported by Buddhist militia launched a “clearance operation”.  Refugees have spoken of massacres in villages, where they say soldiers raided and burned their homes. The government claims the Rohingya have burned their own homes and killed Buddhists and Hindus, a claim repeated by some residents.Aid agencies have warned of a growing humanitarian crisis in overstretched border camps and of the dangers facing Rohingya people trapped in conflict zones. The military has reported that 400 people have been killed in the violence. The UN says 123,000 people have fled to Bangladesh. Those who have made it to the border have walked for days, hiding in jungles and crossing mountains and rivers. Many are sick and some have bullet wounds.

The Normalization Delusion - Adair Turner – There is a psychological bias to believe that exceptional events eventually give way to a return to “normal times.” Many economic commentators now focus on prospects for “exit” from nearly a decade of ultra-loose monetary policy, with central banks reducing their balance sheets to “normal” levels and gradually raising interest rates. But we are far from a return to pre-crisis normality.  After years of falling global growth forecasts, 2017 has witnessed a significant uptick, and there is a good case for slight interest-rate increases. But the advanced economies still face too-low inflation and only moderate growth, and recovery will continue to rely on fiscal stimulus, underpinned if necessary by debt monetization.  Since 2007, per capita GDP in the eurozone, Japan, and the United States are up just 0.3%, 4.4%, and 5%, respectively. Part of the slowdown from pre-crisis norms of 1.5-2% annual growth may reflect supply-side factors; productivity growth may face structural headwinds.  But part of the problem is deficient nominal demand. Despite central banks’ massive stimulus efforts, nominal GDP from 2007-16 grew 2.8% per year in the US, 1.5% in the eurozone, and just 0.2% in Japan, making it impossible to achieve moderate growth plus annual inflation in line with 2% targets. US inflation has now undershot the Federal Reserve’s target for five years, and has trended down over the last five months.  Faced with this abnormality, some economists search for one-off factors, such as “free” minutes for US cell phones, that are temporarily depressing US inflation measures. But mobile-phone pricing in the US cannot explain why Japan’s core inflation is stuck around zero. Common long-term factors must explain this global phenomenon.  Labor-market developments are key, with wage growth remaining stubbornly low even as unemployment falls to “normal” pre-crisis levels. Japan is the most extreme case: with a shrinking labor force, minimal immigration, and a 2.8% unemployment rate, all standard models predict accelerating wage growth. In the US, too, each new batch of monthly data indicates strong employment growth and surprisingly low wage growth.

ECB Tightens Noose Around Bank Accounts -- Don Quijones - The European Central Bank (ECB), arguably the European Union’s most powerful and least accountable institution, apparently needs more power, according to Daniele Nouy, the ECB’s top supervisor. Chief among the fresh powers it seeks is the power to temporarily prevent people from withdrawing their money from their accounts at banks that are in distress, including by electronic fund transfers. “In my view… the introduction of adequate moratorium power for authorities is needed in order to react with the needed flexibility, if the situation of a bank deteriorates rapidly,” Nouy told a member of the European Parliament in a letter. “Given the potentially swift evolution of liquidity crises, a moratorium tool could be necessary to ensure there is adequate time for ensuring a credible solution,” Nouy said, adding that the ECB will soon publish an opinion on this issue. The recent collapse and resolution of Spain’s Banco Popular and Italy’s Monte dei Paschi di Siena lent more impetus to this new regulatory push that has been quietly in the works for a while.Late last year, the European Commission, the same entity that wants to impose increasingly draconian limits on the use of cash in Europe, proposed giving banking supervisors the authority to suspend some deposit withdrawals and payments obligations in exceptional circumstances.But that was not enough to placate Europe’s senior ranks of central bankers. While the Commission proposal would exclude deposits under 100,000 euros, which to all intents and purposes are insured by their respective national governments, the Single Resolution Board has warned that significant amounts of cash could still leave the bank if the moratorium was “excessively narrow.” As such, if the new proposal is passed — and given that its passage will involve very little in the way of democratic process, that’s more or less guaranteed — pay-outs to insured depositors could be suspended for five working days, according to an Estonian document recently seen by Reuters. The freeze could even be extended to a maximum of 20 days in “exceptional circumstances.”

Far-right German candidate promises to get rid of Arabic numerals - A mayoral candidate for the far-right, anti-immigrant NPD party promised to get rid of Arabic numerals if elected, German media reported Friday.  Otfried Best, who is hoping to become mayor of Völklingen, near the French border, was asked by a member of Die Partei, a satirical party, during a debate earlier this week what he thought of Arabic numerals used in the town, Stern magazine reported.“Mr. Best … I find it alarming that in Völklingen many house numbers are displayed in Arabic numerals. How would you like to take action against this creeping foreigner infiltration?” asked the Die Partei politician.  The audience cheered and laughed, but Stern reported that Best gave a serious answer: “You just wait until I am mayor. I will change that. Then there will be normal numbers.”

Italian populists propose income for all -- Unemployment tops 11% in Italy and the number of people living at or below the poverty line has nearly tripled since 2006, to 4.7m last year, or almost 8% of the population, according to the local statistics agency Istat.Ahead of national elections slated for early next year, poverty is expected to take centre stage in the campaign.In an interview with Bloomberg, Giorgio Freddi, professor emeritus of political science at the University of Bologna, said the populist Five Star Movement “has imposed the issue on national politics. The mainstream parties are being forced to play catch-up”.In fact, Five Star is a fast-growing group fuelled by anger at the old political class. Three years ago the movement rode economic concerns to power in Livorno, ending 70 years of rule by the Communists and other left-leaning parties. Today’s Five Star is neck and neck with the Democratic Party, led by ex-Premier Matteo Renzi, and a centre-right bloc including Forza Italia, the party of former Premier Silvio Berlusconi.  Back in Livorno, the Five Star mayor Filippo Nogarin introduced a €500 monthly subsidy to the disadvantaged. That idea is a key plank in Five Star’s national platform, and the group’s leaders have promised to quickly implement such a programme if they take power.In a recent blog post, Beppe Grillo, the former television comedian who co-founded the party, writes that a basic income can “give people back their dignity. The current government is ignoring millions of families in difficulty”.According to Bloomberg, Five Star says the plan would cost €17bn a year, funded in part by spending cuts as well as tax hikes on banks, insurance companies, and gambling.  But opposition parties in Livorno ridicule the subsidy. The city’s plan, which lasted six months and benefited 100 families, was “unadulterated propaganda,” said Elisa Amato, a counsellor from Forza Italia.  “It’s only pseudo-income,” he said. “Pure excessive welfarism.”

Merkel survives challenger’s onslaught to win election TV debate (Reuters) - Chancellor Angela Merkel appeared to hold her ground in a television debate ahead of German elections, under attack from her Social Democrat (SPD) rival on refugee policy, ties with Turkey and her handling of U.S. President Donald Trump. Merkel was some 14 points ahead of Martin Schulz in opinion polls before the debate. A survey by Infratest Dimap for ARD television showed her overall performance was viewed as more convincing by 55 percent, compared to 35 percent for Schulz. Three weeks from voting day, center-left contender Schulz went on the offensive from the outset of the 97-minute debate - his only televised duel with Merkel, who looked rattled at times but showed enough authority to win. Schulz, 61, outfoxed Merkel on ties with Turkey and bounced her into beefing up her rhetoric by vowing to stop Ankara’s bid to join the European Union if he was elected chancellor. After initially cautioning against pulling the plug on accession talks right now, Merkel returned to the issue of Turkey even when the moderators had moved on to a question about U.S. President Donald Trump’s policy toward North Korea. “It is clear that Turkey should not become a member of the EU,” she said after Schulz made his pledge to stop Ankara’s accession bid. “I’ll speak to my (EU) colleagues to see if we can reach a joint position on this so that we can end these accession talks,” Merkel, 63, added in comments likely to worsen already strained ties with Ankara. 

Polish Foreign Minister Demands Germany Pay $1 Trillion In Reparations --Poland has escalated its demands for World War II reparations from Germany from "billions" a month ago, to "about $1 trillion" today as Poland’s foreign minister demanded"serious talks" were needed with Germany. Relations between Berlin and Warsaw have been on edge recently over issues including Germany’s push to share responsibility for refugees across Europe - which Poland has rejected - to the European Commission’s infringement procedure against PiS plans to have more control over the judiciary. Last month the EU sued Poland, Hungary and the Czech Republic, forcing them to accept refugees even as the rest of Europe turns a blind eye to the 100 thousand refugees that have made landfall in recent months in Italy.But, as The Independent now reports, the rhetoric is heating up.Poland’s foreign minister Witold Waszczykowski told local radio station RMF that “serious talks” were needed with Germany to "find a way to deal with the fact that German-Polish relations are overshadowed by the German aggression of 1939 and unresolved post-war issues."He said Poland’s material losses were about $1 trillion, or higher.Polish defense minister Antoni Macierewicz also accused European critics of trying to “erase” the fate of the Poles at German hands during the war “from the historical memory of Europe”.The country’s right-wing government has dismissed a 1953 resolution by Poland’s former communist government which dropped any claim to reparations from Germany, and are instead claiming that Germany is “shirking” its moral responsibility.

Spain’s constitutional court suspends Catalan independence bid - France24 - Spain's constitutional court on Thursday suspended the call for a referendum on Catalonia's independence after agreeing to review an appeal by central authorities in Madrid.The move was widely expected after Prime Minister Mariano Rajoy announced that the government was challenging both a controversial law meant to legitimize the independence vote and a decree signed Wednesday by the regional Catalan government summoning voters for the Oct. 1 ballot.The reaction to the court's decision by leaders in Catalonia, a prosperous region in northeastern Spain, also didn't come as a surprise. Carles Puigdemont, the regional president and one of the main promoters of the referendum, said that neither central Spanish authorities nor the courts could halt their plans."We will respond to the tsunami of lawsuits with a tsunami of democracy," Puigdemont told local broadcaster 8TV. He also boasted that more than 16,000 people had already registered online as volunteers and that more than half of the mayors in Catalonia were supporting the vote.Spain's constitutional court has previously ruled that a referendum can only be called with the approval of the central authorities. But Puigdemont's pro-independence coalition claims that the universal right to self-determination overrules Spain's laws.The Catalonia region, centered on Barcelona, generates a fifth of Spain's gross domestic product and holds 7.5 million people. It self-governs in several important areas, such as police, health and education. But key areas such as taxes, foreign affairs and most infrastructures are in the hands of the Spanish g overnment. Both Catalan and Spanish are spoken, and many Catalans feel strongly about their cultural heritage and traditions.

Catalonia mayors sign decree approving independence vote, defying Spanish government - Municipal mayors in Catalonia have approved a decree agreeing to defy central government in Madrid and push ahead with a vote on independence, despite the Spanish Constitutional court ordering the referendum to be suspended.In all 654 mayors signed the decree, with local leaders in Barcelona and six other municipalities the only ones not to sign the decree. Mayor of Barcelona Ada Colau said she did not want to risk further tensions between Catalonia and Madrid.Legislation for the vote, which Spanish Prime Minister Mariano Rajoy called “an intolerable act of disobedience”, was approved on Wednesday by the Catalan parliament, which is controlled by pro-independence parties.However, Spain’s constitutional court has suspended the legislation while it determines whether the ballot is lawful, although in the past it has ruled that referendums can only be called by central government.Despite this set back, Catalan politicians say the vote will be held as planned on 1 October.The local government in the wealthy northeastern region already has some autonomous powers, but says there is popular support for full secession and has already approved the legal framework for a transition in the case of victory for independence

Brexit: UK to be 'educated' about consequences, says Barnier - The EU's Brexit negotiator has said he sees the process as an opportunity to "teach" the British people and others what leaving the single market means. Michel Barnier said: "There are extremely serious consequences of leaving the single market and it hasn't been explained to the British people." The UK has hit back, saying the EU does "not want to talk about the future". Brexit Secretary David Davis said it was "frightened" and the UK would not be bounced into a divorce bill deal. The latest salvos come after a week of talks in Brussels about the UK's withdrawal from the EU - scheduled to take place in March 2019 - which increased tensions between the two sides. The EU suggested little substantive progress had been made on three key "separation" issues, the size of the UK's financial liabilities to the EU, the future of the Irish border and citizens' rights after Brexit. Mr Barnier accused the UK of "nostalgia" and cast doubt on whether enough progress had been made to broaden the discussions, in the autumn, to consider the UK's post-Brexit trading relationship with the EU. This led to a frosty response from British ministers, one of whom, International Trade Secretary Liam Fox, said the UK would not be blackmailed into doing a deal on money in order to open discussions on trade. Speaking at a conference in Italy on Saturday, Mr Barnier said he did not want to punish the UK for leaving but said: "I have a state of mind - not aggressive... but I'm not naïve."

UK opposition to push for soft Brexit changes to EU repeal bill: The Times (Reuters) - The opposition Labour Party will propose changes to the government’s EU repeal bill to ensure it does not exclude Britain remaining in the single market and customs union as part of a transitional Brexit period, The Times reported. On Thursday, British lawmakers will hold their first full parliamentary debate on legislation dubbed the ‘Great Repeal Bill’ which will sever the country’s ties with the European Union. Their first opportunity to put forward amendments to the bill, either proposing changes or adding new clauses, comes at a later stage. Labour will call on Prime Minister Theresa May to make a series of changes including allowing parliament to replicate any new EU laws on employment rights, the environment and consumer protection, The Times reported, citing a letter sent by Labour’s Brexit spokesman to minister David Davis. The party, led by leftist Jeremy Corbyn, will also say that Britain should continue to participate in the customs union, single market and the European Court of Justice during a transitional period. It is hoping to attract support from pro-European Conservative lawmakers. Labour did not offer an immediate comment when contacted by Reuters on Saturday. The party said last week that it wanted to keep Britain in the European single market and customs union for a while after Britain formally leaves the EU in 2019, offering an alternative to the Conservative government’s stance.The legislation’s passage through parliament could make or break May’s future after she lost her outright parliamentary majority in a June snap election, reopening the debate on the nature of Brexit. 

Big Business Dominates Brexit Negotiations - naked capitalism -  Jerri-Lynn here: In this Real News Network interview, Nick Dearden of Global Justice Now discusses a wide range of Brexit concerns, beginning with the dominance of big business lobbyists in behind-the-scenes domestic discussions concerning Brexit.

UK ‘does not have capacity to strike new trade deals after Brexit’ - Senior government figures have said that the UK does not have the capacity to renegotiate dozens of trade deals that already exist between the EU and third countries. Instead, they are planning to draw up copycat deals to those that already exist, in an attempt to replicate an agreement struck by Theresa May in Japan last week. May and the Japanese prime minister, Shinzo Abe, signed a joint statement that committed their countries to working towards an economic partnership agreement (EPA) as an “immediate priority”. The statement said: “As the UK exits the EU we will work quickly to establish a new economic partnership between Japan and the UK based on the final terms of the EPA.” May hopes such instant copycat deals – termed “cut-and-paste Brexit” by opponents – could be reached with other nations to help secure continuity and confidence. But a senior government source admitted that it was also a question of need for the UK, given the lack of resources to renegotiate the dozens of deals already signed between the EU and third countries. “We can’t do 40 FTAs, we haven’t got the capacity to do that,” they said. Darren Jones MP, a leading supporter of Open Britain, said: “The promise of new trade deals with countries around the world is starting to look like yet another broken Brexit promise. Given we have not negotiated a single trade deal for forty years, it’s hardly surprising that the government lacks the capacity to take on 50 at a time. “Ministers should focus on our most important trade deal – the one with the European Union – and ensure that half of all our trade remains truly free by seeking to negotiate for continued British membership of the single market and customs union.”

One by one the promises and predictions of the Brexiteers are collapsing -- The "elite" really can get things spectacularly wrong. “The British establishment do not have a great track record when it comes to the great questions of their era … Time after time the elite have got it wrong”.  When David Davis said this during the referendum campaign he had the luxury of being a political outsider, on the backbenches. It was a trick deployed by all the prominent Brexiteers: discredit the case for staying in the EU by manipulating the public’s distrust of politicians, and undermine the credibility of experts by branding anyone pro-European as “elitist”.  Now that Davis sits in the cabinet as the Brexit secretary – and, as surely even he would now have to agree, a member of the elite – it is only right that we consider how right or wrong he has been in his predictions about how the negotiations would unfold. Fortunately, the speech he gave during the referendum campaign, and his interviews and articles immediately afterwards, offered a series of predictions and promises against which his own progress can be judged.  First up, Davis said the Government should “take a little time before triggering Article 50” because “the negotiating strategy has to be properly designed, and there is some serious consultation to be done first.”  Quite right too. But it simply did not happen. Article 50 was triggered on the basis of an unachievable wish list. There was no negotiating strategy, and there still isn’t. As Davis conceded in March, the “no deal is better than a bad deal” mantra is not underpinned by an economic impact assessment – in fact he told the Brexit select committee that there won’t be one until next year. Nonetheless, Davis had a plan for getting a quick win on the board. “The first calling point of the UK’s negotiator”, he argued in May 2016, “will not be Brussels, it will be Berlin, to strike the deal: absolute access for German cars and industrial goods, in exchange for a sensible deal on everything else.” Needless to say, this hasn’t happened either, for several reasons. Firstly, because as was clear would be the case during the referendum, Angela Merkel is fully focused on the German election. Second, because Davis and Theresa May have singularly failed to build alliances, to the extent that the Prime Minister is said to have a “basically non-existent”relationship with Merkel.  But third, and most crucially, because individual member states can’t negotiate bilateral trade deals. Seemingly unaware of this fact, Davis went on to confidently predict that: “Similar deals would be reached with other key EU nations,” citing France, Italy and Poland as apparently easy wins. The delusory predictions kept on coming….

Leaked document reveals UK Brexit plan to deter EU immigrants - Britain will end the free movement of labour immediately after Brexit and introduce restrictions to deter all but highly-skilled EU workers under detailed proposals set out in a Home Office document leaked to the Guardian.The 82-page paper, marked as extremely sensitive and dated August 2017, sets out for the first time how Britain intends to approach the politically charged issue of immigration, dramatically refocusing policy to put British workers first. “Put plainly, this means that, to be considered valuable to the country as a whole, immigration should benefit not just the migrant s themselves but also make existing residents better off,” the paper says.It proposes measures to drive down the number of lower-skilled EU migrants – offering them residency for a maximum of only two years, in a document likely to cheer hardliners in the Tory party. Those in “high-skilled occupations” will be granted permits to work for a longer period of three to five years.The document also describes a phased introduction to a new immigration system that ends the right to settle in Britain for most European migrants – and places tough new restrictions on their rights to bring in family members. Potentially, this could lead to thousands of families being split up.Showing a passport will be mandatory for all EU nationals wanting to enter Britain – and the paper proposes introducing a system of temporary biometric residence permits for all EU nationals coming into the UK after Brexit for more than a few months. The determination to end free movement from day one and drive down lower-skilled EU migration, end the role of the European court of justice in family migration and extend elements of Theresa May’s “hostile environment” measures to long-term EU migrants without residence permits is likely to please hard Brexiters.

New leak of Brexit papers reveals fissures between Britain and EU - The EU will risk heightening tensions with the UK on Brexit by publishing five combative position papers in the coming days, including one that places the onus on Britain to solve the problem of the Irish border, according to documents leaked to the Guardian.The Irish document shows that Michel Barnier, the EU’s chief negotiator, will call on the UK to work out “solutions” that avoid the creation of a hard border and guarantee peace on the island.The leaks come a day after the Guardian obtained a draft memo showing the British government’s position on post-Brexit EU migration, which has been denounced as “completely confused”, “economically illiterate” and “a blueprint on how to strangle London’s economy”.The Ireland paper is one of five due to be published by the European commission in the coming days. Each is dated 6 September and was drawn up by Barnier’s article 50 taskforce in Brussels.Together, the papers lay bare the complexity of disentangling Britain from the European Union. Each paper is focused on withdrawal day, 29 March 2019, delving into technical minefields not dealt with during the referendum campaign. EU proposals include:

  • A demand – likely to inflame Brexiters – for the UK to legislate for the “continued protection” of special foods such as Parma ham and feta cheese, as well as French burgundy and Spanish cava. Brussels wants to ensure that more than 3,300 food and drink products are protected from British copycats after Brexit.
  • Ensuring that any goods in transit on Brexit day would be subject to the jurisdiction of the European court of justice. In effect, British companies and the British government would be liable to fines from Brussels for breaking EU VAT and customs rules.
  • A warning to the government that it must guarantee EU data protection standards on classified EU documents. If not, the EU wants these documents erased or destroyed.
  • Asking Britain not to discriminate against EU companies which are carrying out state-funded infrastructure projects that began before Brexit day.

Taken together, the five papers reinforce the EU’s determination to focus exclusively on the Brexit divorce issues, spurning Brexit secretary David Davis’s offer to be more “flexible and imaginative” and move to trade.

Britain can control immigration. What drives this debate is nasty politics -- In politics, optics trump metrics. Tuesday’s leak of a Home Office draft on post-EU migration policy indicates the hardest face of Brexit. Its language is Home Office repressive. It reads like a prison governor’s report, less concerned with the inmates than with the height of the perimeter fence. What with the border computer fiasco, the detention violence scandal, and the erratic “go home” letters to foreigners, if the Home Office were a local council it would be in special measures. Whatever spin may be applied to the leak, the idea that Theresa May seeks an emollient and “frictionless” approach to Brexit is laughable. The document is economically illiterate. This may be because a report on Brexit’s costs by home secretary Amber Rudd’s migration advisory committee will not appear until next year. The proposed bureaucracy, the burrowing down into the records of every employer and every landlord, is gargantuan. It recalls the regulatory chaos of state incomes control in the 1970s. It would need an inspector in every building.The labour costs the policy would impose on one of Britain’s largest industries, leisure and tourism, on the health and welfare state and on the construction industry are incalculable. The stifling of foreign access to the labour market is old-fashioned syndicalism. It mocks the leavers’ claim that blocking borders somehow raises Britain’s role in a booming global economy.To be generous, departments are entitled to prepare private options for ministers to consider – though it would be reassuring if they embraced alternatives. The proposals do not alter safeguards for EU nationals currently working in Britain. They suggest a continuance of visa-free access for a transitional period, with possible residency afterwards. This is similar to worker regulations in other EU countries. The proposals also reflect existing controls on non-EU citizens, though these are starkly ineffective. Non-EU migrants actually outnumber EU migrants by some 250,000 a year. In a London cafe you are as likely to be served by a Canadian, a Colombian or an Eritrean as by a Pole or a Portuguese. It is therefore unlikely that “taking back control”, in the manner proposed, would make much difference. May must know this. She glaringly failed to curb non-EU migration when at the Home Office.

Theresa May’s Brexit plans in disarray as Amber Rudd and Damian Green refuse to back ‘toxic’ plan to curb EU migration Telegraph - Theresa May’s Brexit plans were in disarray on Wednesday night as two of her most senior ministers distanced themselves from leaked immigration policies amid a backlash from Brussels and business leaders.Amber Rudd, the Home Secretary, and Damian Green, the First Secretary of State, both have misgivings about radical plans to curb migration, which include a two-year maximum stay for low-skilled workers, whose overall numbers could also be capped.Ms Rudd has “reservations” about the migration blueprint even though it was drawn up by officials in her own department, and may favour lighter touch regulations that make it easier for businesses to hire EU workers.Mr Green, who is one of Mrs May’s most t rusted advisers, has hinted the Government could row back from the proposals - which have proved popular with Brexiteers - because he is concerned at the effect they will have on EU withdrawal...

Theresa May Accused Of 'Rigging Parliament' With New Move To Give Tories Majority On Legislation | HuffPost UK: Theresa May has been accused of “rigging” Parliament to defy the result of the general election and give Tory MPs majority control over all legislation.In what Labour called “an unprecedented power grab” ahead of Brexit and beyond, the Government is trying to give itself the power to dominate every bill committee from now until 2022.A controversial new motion tabled by Commons Leader Andrea Leadsom seeks to ensure that Conservatives have a majority on all standing committees that are the powerhouses of all prospective laws.The Tories lost their majority in the election after Labour’s ‘Corbyn surge’, but the attempted reform would give unprecedented power to a minority government for the first time.The motion, which has been seen by HuffPost UK but is not formally published until Friday, would mean the PM could control her legislative agenda even without the aid of the Democratic Unionist Party (DUP). With May already under fire over plans to use the EU (Withdrawal) Bill to give ministers sweeping powers beyond the scrutiny of MPs and peers, the latest move has sparked a furious backlash from Labour. Jeremy Corbyn said it was ”an unprecedented attempt to rig Parliament and grab power by a Conservative government with no majority and no mandate”. 

 Landlords admit turning away EU citizens to avoid Government regulations | The Independent: Private landlords in the UK are refusing to rent homes to EU citizens in a bid to avoid new government regulations, a study has found. According to a Residential Landlords Association (RLA) survey, almost one in five landlords say they are less likely to rent their properties to EU nationals because of the checks they must now complete on tenants who are not British citizens. Under the Government’s Right to Rent scheme, people renting out homes were made responsible for ensuring their tenants have a legal right to be in the UK.The scheme was introduced in the Immigration Act 2014, and came into effect last year. It was designed to crack down on illegal immigrants but research suggests it causes landlords to refuse to rent their properties to non-UK citizens because of the extra bureaucracy. Landlords say having to check tenants’ immigration status places an excessive burden on them, and that they fear being heavily fined or imprisoned for up to five years if they fail to comply with the regulations. As a result, EU citizens are seeing their access to rented homes significantly restricted. Seventeen per cent of landlords now say they are less likely to rent to EU nationals. David Smith, policy director at the Residential Landlords Association, said: “The Government is leaving landlords and EU nationals in a state of legal limbo over their housing. “Ministers need to urgently set out the steps that will be taken to enable landlords to easily identify which EU nationals will and won’t have the right to rent. “Without this, and faced with the threat of prosecution for getting things wrong, landlords will only become even more cautious about renting to EU nationals.” 

Britain’s EU rubbish --A hard Brexit could turn into a stinking problem for the British government. The U.K. is one of the European Union’s top waste exporters. It sends more than 3 million tons a year to other EU countries, accounting for over 10 percent of the U.K.’s waste that isn’t reused or recycled. The mixed waste is sent abroad as refuse-derived fuel, trash that has been treated so that it can be burned for energy.A hard break from the European Union risks creating a “potential disaster scenario,” leaving the country stuck with large amounts of garbage that it does not have the capacity to process, waste management company Suez warned last month. A related issue is dealing with a mountain of materials that can be recycled, but that the U.K. can’t process itself and also exports. “Hard borders, import tariffs and a weakening sterling will make waste exports to Europe, which the U.K. continues to rely upon, financially unviable,” said David Palmer-Jones, CEO of Suez recycling and recovery U.K. If Brexit blocks the U.K.’s waste exports to the EU, or just makes them more expensive because of tariffs, that could hike environmental costs borne by businesses and increase the amount of trash put into landfills — the worst way to deal with waste from an environmental perspective.Suez, which also operates waste-to-energy plants in Britain, is urging the government to build more facilities in the country to close the “capacity gap” in residual waste treatment, especially incineration plants.

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