Kenneth Rogoff argues that with the appointment of Jerome Powell as the next Fed Chair, Donald Trump has made perhaps the most important single decision of his presidency. It is a sane and sober choice that heralds short-term continuity in Fed interest-rate policy, and perhaps a simpler and cleaner approach to regulatory policy. Powell will face some extraordinary challenges at the outset of his five-year term. By some measures, stock markets look even frothier today than they did in the 1920s and with today’s extraordinarily low interest rates, investors seem ever more willing to assume greater risk in search of return.
Joseph Stiglitz wonders whether Trump has captured the Fed. President Trump chose a non-economist a time when the Fed will face great challenges, as it reverts to more normal policies. Higher interest rates could give rise to market turmoil, as asset prices undergo a significant “correction”, and many are expecting a major downturn in the next five years. While the Fed’s tool kit has been greatly expanded in the last decade, the Fed’s low interest rates and huge balance sheet – and the possibly massive increase in debt, should Trump get his tax cuts – would challenge even the best-trained economist.
Scott Summer writes on the Washington Post that there are a few reasons to be concerned about this appointment. The past four Fed chairs have all been economists, with a deep understanding of monetary policy. Putting a lawyer in charge of the Fed is roughly analogous to naming an economist to be chief justice of the Supreme Court. First, there’s much more to monetary policy than adjusting interest rates, which is why we should want a highly qualified specialist to lead the central bank. Even many economists can get confused by the connection between interest rates and monetary policy, but the problem is even more severe among non-economists.
Tim Duy writes on Bloomberg that the next Fed Chair will contend with a slow-growth economy.The recent pace of growth exceeds the Fed’s estimated longer-run pace of 1.8 percent. Given that the Fed believes the economy is operating at or somewhat beyond full employment, a sustained 3 percent pace would stretch capacity too far and generate excessive inflationary pressures. To counter these forces, the Fed anticipates continue tightening of policy, on the order of 100 basis points between now and the end of next year.. The next Fed chair will need to deftly handle the transition to a slower-growth economy. One big challenge will be gauging the pace of any slowdown. During the early stages of an expansion, the picture told by most economic data is usually one of stronger growth. As the expansion matures and slows, however, the data become more muddle and this shift could be misinterpreted as a recessionary signal. At the same time, the transition to slower growth could leave the economy more vulnerable to negative shocks and actual recession, making it all the more important that the Fed is able to switch from tightening to easing should the need arise.
What to expect from Federal Reserve nominee Jerome Powell – (American Banker podcast) President Trump’s nominee for Federal Reserve Chairman, Jerome Powell, has served on the Fed board since 2012 and been in the public eye for decades. But what he would actually do with the job is something of a mystery. American Banker reporter John Heltman provides an inside-the-beltway view of the likely new Fed head.
Will Powell Be an Accidental Hawk? - Fed Chair nominee Jerome (Jay) Powell was a logical choice for Fed chair. A business-friendly Republican, he is likely to push forward President Trump’s deregulation agenda in the financial sector while continuing the Yellen Fed’s softly-softly approach to monetary tightening—an approach that has kept markets unusually calm and cheerful. Yet the course on which he’s heading looks more hawkish than he intends. In October, the Fed began implementing a long-term program of reducing its crisis-bloated balance sheet by letting maturing securities run off. Powell sees the balance sheet coming down from a high of $4.5 trillion in October 2014 to a new normal of $2.5-3.0 trillion. Though he offers no timetable, he has emphasized the importance for market stability of sticking to the planned reduction pace, once set. That pace has the balance sheet hitting Powell’s midpoint target in February 2021, as shown in our left-hand graphic above. Powell considers the roll-off largely inconsequential as a tool of monetary tightening. The effects would be “pretty modest,” he told CNBC—“a few basis points here and there.” Powell’s colleagues on the Federal Open Markets Committee (FOMC), as well as the markets, seem to agree. The Fed announced its plans for balance-sheet reduction back in June. Yet the “dot plot” rate projections of FOMC members have hardly budged since the end of last year. Likewise, market estimates of the effective federal funds rate through 2019 have moved little from pre-announcement levels, and in fact have risen slightly. We think the Fed and the markets have gotten this wrong. Using Fed economists’ own estimates of the effect of central-bank asset purchases on 10-year Treasury yields, we calculate that balance-sheet reduction at the announced pace is equivalent, in its effect on boosting end-2018 10-year rates, to a one percent hike in the Fed’s policy rate. The logic is explained in our recent Business Insider piece.Our math also suggests that between now and February 2021, when the balance sheet is projected to shrink to Powell’s midpoint target, asset run-offs will produce a tightening in monetary conditions approximately equivalent to a 3.5 percentage-point increase in the Fed’s policy rate—as shown in the right-hand figure above. This impact is so large that the Fed would be obliged to push the policy rate back down to zero in order to effect the degree of tightening that its dot plot now indicates as appropriate.
Philly Fed President Unconvincing As He "Lightly" Pencils In December Hike -- Speaking in at a conference in Tokyo, the head of the Philly Fed, Patrick Harker said that he has penciled in a further rate hike by the Fed at its December meeting on 12-13 December 2017. However, his use of the word “lightly” suggested that there may be a degree of wavering on his part. According to Reuters.A Federal Reserve official said on Monday he expects to back an interest rate hike next month despite caution over low-inflation, as U.S. central bank policy needs to be positioned to deal with future economic shocks.Philadelphia Fed President Patrick Harker said he has “lightly penciled in” a December rate hike. However, he flagged he had slightly less conviction about the policy decision than he had last month as he “continues to elicit caution” about weak inflation and also about the way in which it is measured. Harker said he expects the Fed to raise rates three times next year as long as inflation remains on track, and the projected tightening could take policy to what he would describe as a neutral stance. Harker, a centrist voter on the Fed’s monetary policy committee this year under an internal rotation, said the Fed must continue normalizing policy as the economy is “more or less at full strength” and there remains “very little slack” in the labor market. “Removing accommodation is the right next step for a few reasons,” he said in prepared remarks to a Global Interdependence Center conference in Tokyo…Price measures have drifted lower below the Fed’s 2-percent target this year even while unemployment has fallen. The central bank has raised rates a notch twice in 2017 and is widely expected to do so again next month from its current target range of 1.00 percent to 1.25 percent.
Four Reasons Janet Yellen Should Stay at the Fed - Narayana Kocherlakota - President Donald Trump has chosen not to have Janet Yellen serve a second term as chair of the U.S. Federal Reserve. That, however, doesn’t mean she can’t stay on as one of the Fed’s governors. I see four good reasons for her to do so. The first involves her unique technical expertise. Before entering public service, Yellen was a top-flight academic economist at Berkeley, a background that provides a strong foundation for her thoughts on policy. She is also able to draw upon a great deal of practical experience: She has been on the Federal Open Market Committee, which sets the central bank’s monetary policy, for the past 13 years and from 1994 to 1997. No other current governor can match her credentials. And in filling the three vacancies on the Board of Governors (four if Yellen leaves), Trump won’t be able to find anyone, Democrat or Republican, who can. Second, the Fed needs governors with Yellen’s balanced perspective on the central bank’s dual mandate of maximum employment and price stability. The Fed, which has long emphasized its responsibility to keep inflation in check, needs internal voices willing to speak forcefully about doing what is necessary keep unemployment low. Thanks in part to her expertise in labor economics, Yellen provides such a voice. Trump’s appointments are unlikely to have that perspective. Third, it appears that Trump and his appointees want to loosen the restrictions on bank behavior that the Fed and other regulators have imposed since the passage of the Dodd-Frank Act in 2010. Their anti-regulation approach will increase the risk of a new global financial crisis. It’s thus important that the central bank retain governors who can push back against this dangerous venture -- as Yellen did vigorously in a recent speech at the annual economics symposium in Jackson Hole. The main counter-argument seems to be one of precedent: It’s been nearly 70 years since an ex-chair stayed on as a governor. But not all long-standing practices are good! If the norm requires Yellen to leave the Fed, then it effectively allows the president to prematurely end a governor’s 14-year term. This robs the Fed of a crucial legislative protection of its independence. Such a norm needs to be broken -- yet another strong reason for Yellen to stay on.
Key Measures Show Inflation picks up in October -- The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning: According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.3% annualized rate) in October. The 16% trimmed-mean Consumer Price Index rose 0.2% (2.3% annualized rate) during the month. The median CPI and 16% trimmed-mean CPI are measures of core inflation calculated by the Federal Reserve Bank of Cleveland based on data released in the Bureau of Labor Statistics' (BLS) monthly CPI report. Earlier today, the BLS reported that the seasonally adjusted CPI for all urban consumers rose 0.1% (1.3% annualized rate) in October. The CPI less food and energy rose 0.2% (2.7% annualized rate) on a seasonally adjusted basis. Note: The Cleveland Fed released the median CPI details for October here. Motor fuel decreased 20% in October, annualized, following a sharp increase in September due to Hurricane Harvey.
Wisconsin and the Constitutional Convention - On Tuesday, when nobody was looking, the state of Wisconsin brought the country a step closer to a constitutional bloodbath unseen since 1789. The Wisconsin state senate voted, 19-14, to join the call for an Article V convention of the states to propose amendments to the federal Constitution, and what should make you feel very secure about trading James Madison for, say, Mark Levin, is that the Republicans who voted for this monstrosity basically knew fck-all about the issue. From The Wisconsin State Journal:Earlier this year, Senate Majority Leader Scott Fitzgerald initially resisted Assembly Speaker Robin Vos’ push to fast-track the convention resolution. Fitzgerald said in March that he had questions about the scope of such a convention. Fitzgerald, R-Juneau, who voted for the resolution, acknowledged after Tuesday’s vote that he’s not convinced restrictions on the scope of a convention could be enforced once it’s underway. “It depends on who you talk to,” Fitzgerald said. “It always should be a concern when you have something that could be wide open.”Well, hell, t hen, let’s just take a big old shot in the dark. The movement for this convention was born in the dark-money plutocracy of the current American political system. It aims to fasten an oligarchy to what still would be the shell of a self-governing republic. The tell is in the issues. They are a wish list of conservative policies that were shredded under the existing Constitution. Among them are The Worst Idea In American Politics, the Balanced Budget Amendment, which never was going to get the votes to pass on its own, either in the Congress or in the states; and an amendment that would establish term limits for members of the national legislature, which the Supreme Court declared unconstitutional 22 years ago in U.S. Term Limits v. Thornton.
The U.S. Yield Curve Is Flattening and Here's Why It Matters - If you haven’t been paying attention to the persistent flattening of the U.S. yield curve, you’re way behind it.Peter Cecchini, chief market strategist at Cantor Fitzgerald, calls it “the most important thing to have a clear idea about now.” Billionaire fund manager Bill Gross says we’re rapidly approaching a point at which the trend will induce an economic slowdown. Others claim it’s only natural, with the Federal Reserve raising short-term interest rates in the face of stubbornly low inflation.To put it simply, the Treasury yield curve measures the spread between short- and long-term debt issued by the U.S. government. It’s the extra compensation that investors demand to lock away their money for an extended period.No matter which theory of flattening you subscribe to, the world’s biggest bond market is sending a signal that traders can’t ignore. The longer the trend continues, the more likely its effects could spread to bank earnings and the real economy, while at the same time it would limit the Fed’s ability to respond when these risks emerge.To get a sense of just how dramatic this trend has been, here’s a look at a handful of curve measures now versus the start of 2017. In trading Monday, they were all close to the flattest levels in a decade.
- From two years to 10 years: 72 basis points, down from 125
- From two years to 30 years: 119 basis points, down from 187
- From five years to 10 years: 33 basis points, down from 52
- From five years to 30 years: 80 basis points, down from 114
Everyone has their favorite theory for why this is happening and what it means for the economy and the markets, and all of them likely play a part so here’s a breakdown of each one:
Was Donald Trump’s fiery Apec speech a response to waning US influence in Asia-Pacific? | South China Morning Post: After an uncharacteristic show of diplomacy during his three days in Beijing, US President Donald Trump’s return to form at the Asia-Pacific Economic Cooperation summit in Vietnam on Friday was evidence of the tension that remains in the battle for dominance in the Asia-Pacific. In a fiery and confrontational speech in Da Nang, Trump accused countries in the region of trade abuses that the US would no longer tolerate, and pledged to “always put America first”. His tone was in sharp contrast to that of Chinese President Xi Jinping, who spoke after Trump and made no bones about his support for globalisation, saying the trend towards it was “irreversible”. “Openness brings progress while self-seclusion leaves one behind,” Xi said. Wary of the unfolding rivalry between the world’s two biggest economies, Asian nations have followed Trump’s first visit to China attentively, trying to decipher Beijing’s complex love-hate relationship with Washington and the personal interactions between Trump and Xi. To many people’s surprise, the US president’s stay in Beijing was largely hassle-free and uneventful. Instead of much-anticipated diplomatic wrestling over North Korea, trade, Taiwan and the South China Sea, Xi, at the height of his power after being elevated to Mao Zedong-like status last month, exchanged flattery with the embattled Trump, who has been plagued by protracted political chaos at home. Apart from offering Trump lavish ceremonies, grandiose banquets and a rare respite from protesters and unfriendly media coverage, Beijing also signed more than a dozen business deals worth more than US$250 billion in a move to appease Trump’s discontent over America’s trade deficit with China. Most of the deals were signed in the form of non-binding memorandums of understanding, instead of contracts.
Trump, Abe and Turnbull talk North Korea and trade -- U.S. President Donald Trump, Japanese Prime Minister Shinzo Abe and Australian Prime Minister Malcolm Turnbull on Monday met here on the sidelines of ASEAN-related meetings to discuss North Korea. "We have the same values, same focus in ensuring the North Korean regime comes to its senses, and stops its reckless provocations of threats of conflict in our region," Turnbull said as the meeting began. Added Abe: "North Korea is the [region's] most pressing issue. ... We would like to have discussions that contribute to the peace and stability in the region, including North Korea." The three are believed to have reaffirmed their close cooperation in dealing with North Korea. They were attending discussions focused around the Association of Southeast Asian Nations. "We will be making a statement from the White House sometime during Wednesday," Trump told reporters, "and it will be a very complete statement as to trade, as to North Korea, as to a lot of other things." A day earlier during a press conference in Vietnam, Trump said that although it "might be a strange thing to happen," it is "a possibility" that he could become friends with North Korean leader Kim Jong Un. On Monday, Trump told journalists who were allowed in the meeting with Abe and Turnbull for a short time that trade with other countries will also be on his agenda while he is in the Philippines. "We have made a lot of big progress on trade," he said. "We have deficits with almost everybody. Those deficits are going to be cut very quickly and very substantially." Turnbull broke in and drew laughter from his two peers as well as from reporters. "Except us," the Australian leader interrupted.
Rhetorical birth of an anti-China bulwark | Asia Times: As US President Donald Trump’s wraps up his 13-day Asia tour, questions are already being asked why he repeatedly used the term “Indo-Pacific,” rather than the more conventional “Asia-Pacific”, in his public comments. America’s leader used the term several times in Japan and South Korea, and in Vietnam said he was honored to be visiting the “heart of the Indo-Pacific.” The answer lies in what happened shortly after Indian Prime Minister Narendra Modi arrived in Manila on Sunday. On the sidelines of the Association of Southeast Asian Nations summit, senior officials from America, Japan, India and Australia met for quadrilateral talks, indication that the disbanded Quadrilateral Security Dialogue may be resurrected. India’s External Affairs Ministry said in a statement afterwards that the four nations “agreed that a free, open, prosperous and inclusive Indo-Pacific region serves the long-term interests of all countries in the region and of the world at large.” The “Indo-Pacific” is a pithy slogan to describe the vision of what policymakers once called the “Quadrilateral,” or “Quad”, an alliance between the four democracies designed to build a free, open and peaceful region. A statement by Australia’s Department of Foreign Affairs said that at the meeting officials discussed “upholding the rules-based order in the Indo-Pacific and respect for international law, freedom of navigation and overflight.” Although the statement didn’t mention China specifically, most analysts interpreted this as coded language against Beijing’s expansionism in the South China Sea.
China doesn’t like Trump’s North Korea talk. But some Chinese do. -While China firmly if politely distances itself from Donald Trump’s bellicose rhetoric about North Korea, the Chinese people are cheering the U.S. president’s tougher approach and more aggressive language.“If Donald Trump can solve this problem, it will be a big favor to China,” said Hu Xingdau, an economics professor in Beijing.In a country where the Communist government strives to manage, even dictate, the views of its people, interviews with a variety of Chinese throughout Beijing society showed a core or support for Trump’s style of confronting North Korea’s leader, Kim Jong Un, who is known here as “Little Fatty.”“Trump is right on what he has been doing,” said Beijing financial analyst Ding Yongliang at China Investment Securities through a translator. “North Korea will only be submissive to power instead of peaceful negotiations.”Indeed, many Beijing residents told McClatchy that they hope Trump will persuade China President Xi Jinping to move more aggressively on the nuclear threat next-door and stop relying solely on negotiations. Hu even suggested the United States should abolish North Korea’s nuclear missile facilities or launch a pre-emptive strike against the rogue nation. “It’s impossible to solve the problem with just peaceful negotiations,” he said through a translator.
‘They Want to Know If Trump’s Crazy’ - “They” is North Korean officials. And “he” is Donald Trump. Four times over the last year, in Geneva, Pyongyang, Oslo and Moscow, DiMaggio has secretly met with North Koreans to talk about the country’s nuclear program. But what they really want to talk about, DiMaggio said in an extensive new interview for The Global Politico, is America’s volatile president. The North Koreans have asked her not only if Trump is nuts, DiMaggio said, but what and how to think about everything from his public undercutting of his Secretary of State Rex Tillerson to Special Counsel Robert Mueller’s investigation into possible campaign collusion with Russia.“They really want to know what is his end game,” said DiMaggio, a scholar at New America who specializes in talking with rogue regimes and and has spent the last two years in these secret discussions with the North Koreans. She believes they were ready after Trump’s surprise election to discuss a new round of official talks with the U.S. to defuse the standoff over their nuclear weapons – but that Trump’s escalating rhetoric and Twitter rants such as his weekend taunting of North Korea’s “short and fat” Kim Jong Un may have foreclosed that option. “They follow the news very closely; they watch CNN 24/7; they read his tweets and other things.” Among issues the North Koreans have raised with her in recent months, DiMaggio said, were everything from Trump’s tweet urging Tillerson to give up on diplomacy with North Korea (“Is this a good cop/bad cop that he’s doing with Tillerson?”) to Trump’s decision this fall to decertify Iran’s compliance with the nuclear deal forged by his predecessor, Barack Obama. That, DiMaggio said, “has sent a clear signal to the North Koreans: Why should they enter a deal with us, if we’re not going to stick with it?”
The White House Is Being Warned: North Korea Is Planning A "Devatstaing EMP Attack" On America -- Marine Corps veteran Tommy Waller, director of special projects at the Center for Security Policy, has warned President Trump about the EMP threat facing the United States.The grim warning is directed at North Korea and their ambitions to unleash a devastating atmospheric nuclear explosion above the United States that would collapse the nation’s power grid. Most are aware by now that North Korea has successfully tested ICBM missiles and detonated nuclear devices throughout 2017. Put two and two together, and this is a dangerous cocktail fueling the regime in North Korea. It’s also a perfect recipe for Waller to further his agenda and urge President Trump to create a special commission to prepare for an EMP attack, such as the Manhattan Project in the 1940s in developing the nuclear bomb. Here is what he had to say:For those able to execute an unconstrained analysis of today’s threat environment, the single most urgent concern for America is what threatens her electric grid. Without electricity, the America we know today ceases to exist – and our enemies know this.Elites in the U.S. government know this too, but most have chosen to ignore these threats and to ridicule, silence, and stymie anyone willing to speak the truth about them.Waller also warns the whole system of 16 critical infrastructure components are dependent upon electricity and the idea an EMP could wipe out critical systems would be devastating for the survival of the empire.America’s 16 Critical Infrastructures range from Water & Wastewater Systems to Food & Agriculture to Nuclear Reactors, Materials & Waste – and all of them depend upon electricity.America’s need for electricity creates the ideal conditions by which an adversary can take advantage of Sun Tzu’s “Supreme art of war,” which is “to subdue your enemy without fighting.” In 1999, with full recognition of this reality and enraged with American policy in the Balkans, Vladimir Lukin (the head of the Russian State Duma’s Foreign Affairs Committee) threatened a U.S. Congressional delegation by stating: “If we really wanted to hurt you with no fear of retaliation, we would launch a Submarine-launched Ballistic Missile (SLBM), [and] we would detonate a nuclear weapon high above your country and shut down your power grid.”
Is there anything stopping Donald Trump from launching a preemptive nuclear strike? - While all eyes were on Jeff Sessions on Tuesday as he testified before the Senate Intelligence Committee on the Trump campaign’s connections to the Kremlin, the Senate Foreign Relations Committee held a long overdue hearing of their own to discuss the president’s authority to launch a nuclear war against North Korea. Chaired by Bob Corker, a Republican and outspoken critic of Trump, the hearing featured testimony from a panel of experts. It was the first time the committee has examined the president’s nuclear powers since 1976. Senators from both parties raised concerns about the decision-making process by which the U.S. would launch a preemptive nuclear strike. They were particularly interested in which government body—the executive branch or Congress—would have the legal authority to order it. Some of this confusion, however, is deliberate—and all three members of the panel said they would be wary of any legislative changes to the process. Under the United States’s longstanding policy of “calculated ambiguity,” other foreign powers would, in theory, be deterred from attacking the U.S. for fear that it would retaliate with a nuclear strike. These merits aside, a policy of deliberate ambiguity does little to assure Americans that Donald Trump could not launch a nuke “just as easily as he can use his Twitter account,” as Markey put it. And Trump has not exactly given voters confidence that he will handle the nuclear codes responsibly. In August, he threatened North Korean dictator Kim Jong-un with “fire and fury like the world has never seen.” Just this week, as the president wrapped his twelve-day tour of Asia, he called Kim “short and fat.” Trump was also criticized for discussing possible responses to North Korea’s nuclear ballistic missile testing on a crowded terrace at Mar-a-Lago in February—the same night an aide, better known now as “Rick the Man,” was photographed with the nuclear football in what became a viral photo. The panelists also insisted that even decisions during an imminent attack would not be made by the president alone, but rather in consultation with generals and legal advisers, and then carried out by others, who would closely assess the legality of any nuclear order. “The president by himself cannot push a button and cause missiles to fly. He can only give an authenticated order which others would follow and then cause missiles to fly,” one panelist said. Ed Markey did not seem reassured.
Trump Slams Intel Chiefs After Meeting With Putin: "They're Political Hacks" --While President Donald Trump was effectively forced to cancel a formal meeting with Russian President Vladimir Putin due to the glare of the Mueller indictments - despite the fact that the charges had seemingly little to do with his campaign - the two leaders still took a minute to chat on the sidelines of an Asia Pacific conference in VIetnam on Saturday. Photos captured Putin ominously whispering a message into his surrogate’s ear, before posing for a few photos alongside other world leaders, with one photo featuring a much discussed handshake between Putin and Trump. Afterward, when reporters asked if he was worried about the Mueller probe, Trump repeated his allegation that the investigation is a ‘hoax’, with the president calling the FBI a “bunch of hacks,” according to the New York Post.“They’re political hacks,” Trump said of the former CIA director John Brennan, former Director of National Intelligence James Clapper, and former FBI chief James Comey, who have said that the evidence of Russian meddling is clear.“You have Brennan, you have Clapper and you have Comey. Comey’s proven now to be a liar and he’s proven to be a leaker. So you look at that,” Trump said. “And you have President Putin very strongly, vehemently says he had nothing to do with that."But he fell short of saying that he took Putin’s word.“Well, look, I can’t stand there and argue with him,” Trump said. “I would rather have him get out of Syria, to be honest with you. I would rather … get to work with him on the Ukraine rather than standing and arguing about whether or not— because that whole thing was set up by the Democrats."
Former intelligence officials say Trump is being manipulated by Putin (Reuters) - Two former top U.S. intelligence officials said on Sunday they fear President Donald Trump is being manipulated by Russian President Vladimir Putin, after Trump said he believed Putin was sincere in denying Russian meddling in the 2016 election. Former CIA Director John Brennan and ex-National Intelligence Director James Clapper both said Trump was mishandling Moscow ties even as a special counsel investigates possible collusion between Trump’s campaign team and Russia. “I think Mr. Trump is, for whatever reason, either intimidated by Mr. Putin, afraid of what he could do, or what might come out as a result of these investigations... It’s either naiveté, ignorance or fear in terms of what Mr. Trump is doing vis-à-vis the Russians,” Brennan said in an appearance with Clapper on CNN’s “State of the Union.” Clapper added that foreign leaders who roll out the red carpet for Trump are able to manipulate Trump. “I do think both the Chinese and the Russians think they can play him,” Clapper said. Their comments came after Trump told reporters over the weekend that he had spoken with Putin again over allegations of Russian meddling in the presidential election and that the Russian president again denied any involvement. “I really believe that, when he tells me that, he means it,” Trump told reporters. “I think he is very insulted by it, which is not a good thing for our country.” Treasury Secretary Steve Mnuchin said on the same show that the criticism leveled against Trump’s management of relations with Russia and China was “ridiculous.” “President Trump is not getting played by anybody,” Mnuchin said.
New data shows how the Trump administration is destroying the State Department - Imagine a company where, in the past year, 60 percent of its top management quit and applicants to work there dropped by half. You’d assume that corporation would be on the verge of going bankrupt or in the throes of some catastrophe — Enron after the scandal or Lehman Brothers during the financial crisis. This is the reality of the US State Department under Secretary of State Rex Tillerson, according to new data from the American Foreign Service Association (AFSA), the professional organization for America’s diplomatic corps. The numbers reveal that American diplomacy, the backbone of US global influence, is in a state of near collapse. And it’s basically all the Trump administration’s fault. The new AFSA data focuses on the top-ranking career officials — meaning people who have spent their lives in the State Department. This includes minister counselors (the equivalent of two-star generals), career ministers (the three-star equivalent), and career ambassadors (the four-star equivalent). The number of people in each of those posts has declined dramatically since President Trump took office in January. The number of minister counselors in the State Department has gone down by 15 percent, career ministers by 42 percent, and career ambassadors by a whopping 60 percent. It’s not even clear that this can be fixed over a number of years, because the State Department isn’t hiring at the entry level either. The number of entry-level foreign service officer hires has declined from 366 in 2016 to a scant 100 in 2017, owing to a hiring freeze Tillerson imposed after his Senate confirmation. The number of people who took the Foreign Service exam, the main requirement to become a foreign service officer, dropped by more than half between 2016 and 2017. The US military can do many things when it comes to foreign policy, but it can’t fill in for diplomats. Without a functioning State Department, foreign diplomats have no one to talk to at the world’s most powerful address — and that scares them.
Dennis Kucinich Exposes "The Permanent Government" Behind US Foreign Intervention - In a recent interview with host Wilmer Leon at the Inside the Issues show, former presidential candidate and United States House of Representatives Member Dennis Kucinich (D-OH) discussed how what Kucinich terms the “permanent government” has worked to ensure the United States continues pursuing destructive foreign interventions and to keep America “at the precipice of a much wider war” irrespective of who is president.“There’s an unbroken line going back over the last 30 years where American presidents have continued to proceed with an interventionism that has been counterproductive,” states Kucinich.This “continued commitment to a failed foreign policy of interventionism, of unilateralism, of first strike,” Kucinich continues, “imperils America,” “does not make us safer,” “separates us from the world community,” “has people looking to extract vengeance on Americans,” and “has made the world a more dangerous place.”Saying we need to look beyond the personalities of the succession of US presidents from George W. Bush to Barack Obama to Donald Trump, Kucinich recommends we “look at the foreign policy establishment of the United States of America” that, he explains, includes people in the State Department who have a neoconservative ideology, in the Pentagon who are dedicated to the military-industrial complex, and in the Central Intelligence Agency (CIA) who can “conjure conflicts” and “try to justify the further involvement of the military and the State Department.” This, Kucinich says, “is the permanent government, which we see reflected through Democrat and Republican administrations, no matter whether they are so-called conservative or liberal or populist; it’s all the same.”While this “permanent government” push for US intervention overseas has produced many harmful consequences, some of which Kucinich discusses in the interview, it also, he argues,produces the additional danger that it “keeps us at the precipice of a much wider war.” Listen to Kucinich’s complete interview here.
The Trans-Pacific Partnership has been resurrected — and it’s happening without the US - On January 23, only three days into his administration, President Donald Trump withdrew from the negotiations process over the Trans-Pacific Partnership (TPP), the gargantuan free-trade agreement that he’d railed against on the campaign trail as a job killer. Many analysts figured that US withdrawal spelled doom for the entire agreement. But on Saturday, the 11 remaining Pacific Rim countries agreed on a way forward — without America. The remaining bloc, whose trade totaled about $350 billion last year, now have a blueprint to start trading more freely between themselves in a resurrected form of the deal. There are still many details for the member countries — which include Mexico, Japan, Australia, and Canada — to work out. But the pact, called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, looks a little different from when the US was part of the negotiations through the end of Barack Obama’s presidency. About 20 provisions that were once part of the TPP talks have been "suspended," according to a joint statement by the agreement’s member countries. And there are still four sticking points — including a commitment on coal that affects Brunei — to solve, but experts say a final deal could be announced as early as next year. Each country would still have to sign and ratify the deal to be a member of the agreement. Ironically, the new deal was announced while many of the bloc’s leaders were with Trump during an international forum in Vietnam. On Friday, Trump gave a speech at the gathering where he said there were “trade abuses” in Asia that hurt the American worker. That was just one day after he accused China of “taking advantage” of the US in trade — and put the blame on past US administrations. While Trump pursues an “America First” foreign and trade policy, it looks like at least 11 countries don’t mind leaving America alone.
Trump's trade policy: Separating the normal from the dangerous | Centre for European Reform: Europeans worry about Donald Trump's 'America First' trade policy. They know that one of the US president's few consistent political beliefs is that trade relations are zero-sum, and that countries with trade deficits are losers. He prefers bilateral negotiations in which the US is the dominant partner to tricky multilateral arrangements that constrain American sovereignty. Trump uses belligerent rhetoric that alienates America’s main economic partners: he has called the Trans-Pacific Partnership (TPP) a "rape" of the US and said "the Germans are bad, very bad" because of their trade surplus. He told an international summit in Asia on November 10th that he would not "let the United States be taken advantage of anymore". But a closer look at current US trade policy shows that the Trump administration's actions so far reflect a mixture of traditional, assertive American approaches and more troubling new ideas that could have serious consequences for Europe. To see which are which, US trade partners have to go beyond Trump's insults and look at what his administration does. Though regional free trade agreements have become a key part of international trade since the WTO's Doha round of global trade talks stalled, delays in negotiating them are not unusual. The Trump administration has been happy for talks on the Transatlantic Trade and Investment Partnership (TTIP) to stall. But European opposition was at least as responsible for its failure as American. Polls and protests in Germany revealed deep public scepticism about the pact, while then French President François Hollande in May 2016 decried TTIP's "undermining of the essential principles of our agriculture, our culture, of mutual access to public markets". The demise of TTIP is a symptom of a general backlash against trade agreements on both sides of the Atlantic rather than evidence of a rogue American president wrecking the world order.
America Doesn’t Need Trade Like Other Nations Do -- Donald Trump may have an upper hand in trade talks because America needs its partners less than any other advanced economy. The Organization for Economic Cooperation and Development says the U.S. has the most limited ties to foreign commerce of any country in the group, using new measures that look at both trade and investment flows. One such broader measure showed the “international orientation’’ of the U.S. was equal to 13 percent of gross domestic product in 2014, according to OECD figures tallied up last month. It's the first time the Paris-based group has calculated such a measure to track national income that is tied to both exports and profits made by the foreign affiliates of domestic companies. And when it comes to Trump's threat to take on Mexico, such figures may strengthen his hand even further. Another wider trade measurement pushes Mexico further down the rankings of U.S. partners, leaving it behind Japan, the U.K. and Germany in sixth place. That’s worse than Mexico’s 2014 positions of second place for exports and third place for imports. One complication is the U.S. is negotiating with Canada as well as Mexico under the North American Free Trade agreement, which Trump has threatened to rip up. Trump has moved between suggesting he only needs tweaks from Canada to escalating tensions over dairy and aircraft markets. The fresher OECD data shows Canada is a harder trade partner to break up with, coming in with the No. 2 ranking in overall trade after China.
Trump and big business collide as NAFTA teeters - WaPo - U.S. business groups are pinballing between despair and panic as negotiations over a new North American Free Trade Agreement resume, with the Trump administration’s hard-line demands risking a worsening standoff and perhaps the eventual collapse of the talks. Corporate concerns were only inflamed by President Trump’s Asia trip, which showcased his “America First” trade policy and left the United States isolated as 11 other nations agreed to new trade liberalization measures. On the eve of this week’s NAFTA talks, the fifth of seven scheduled rounds, the uncompromising U.S. stance now risks scuppering a 23-year-old treaty that helped knit together a colossal continental economy, business groups said. “Everybody I talk to is very gloomy,” “People are expecting very little out of this round.” In a belated mobilization to save the deal, the U.S. Chamber of Commerce in recent weeks flooded Capitol Hill with executives from companies that stand to lose lucrative trade preferences if Trump fulfills his threat to withdraw from the treaty.The Trade Leadership Coalition, a separate industry-funded group headed by a former Caterpillar lobbyist, last week began airing pro-NAFTA advertisements in nine states that Trump won in 2016. The 60-second television ads — running in Texas, Tennessee, Nebraska, South Dakota, Mississippi, Michigan, Ohio, Iowa and Indiana — highlight economic gains in manufacturing and agriculture before concluding: “The United States is stronger than ever before . . . NAFTA works, but President Trump is threatening to withdraw from NAFTA.” Senate confirms Lyft manager for No. 3 post at the Transportation Dept The Hill
Trump’s NAFTA powers could hit a tariff wall -- It’s a question that every major law firm and think tank in town is trying to answer: Just how much legal authority does President Donald Trump have in terms of scrapping NAFTA? The growing consensus is that while Trump could steamroll Congress when it comes to pulling the trigger on withdrawing the U.S. from the deal, his power over raising tariffs could be far more limited. U.S. duties on all but a few Mexican and Canadian goods are currently zero under NAFTA. Under the deal's implementing act, those duties would likely stay the same for a year if Trump withdraws from the pact. After that, they would rise to World Trade Organization levels in the case of Mexico. In the case of Canada, a U.S. withdrawal would cause tariffs to revert to levels under the 1989 U.S.-Canada Free Trade Agreement. Trump could potentially speed up raising tariffs on Mexico under Section 125 of the 1974 Trade Act, and it’s possible he could also decide to withdraw from the U.S.-Canada pact in addition to NAFTA.But the Constitution clearly gives Congress jurisdiction over tariffs, even if the White House shares some powers on trade, so Trump would be out of bounds if he tried to raise tariffs above the WTO levels, John Veroneau, a partner at Covington and Burling, said during a panel discussion Wednesday hosted by the Washington International Trade Association. In the meantime, Congress could try to discourage Trump from withdrawing by passing a resolution making clear that lawmakers believe they should have a role in any decision to pull out of the pact, Aaron Barnes, a legal associate in the Cato Institute’s Center for Constitutional Studies, said during the same discussion. Doug Palmer has more here.
Here's The Latest On The GOP Tax Bill As The Senate Starts Debate -- As of now the biggest difference is the treatment of the State and Local Tax (SALT) deduction. While the Senate has called for a full repeal of the SALT deduction, House members have drawn a hard line, even though almost all political "hard lines" become flexible under the right circumstances, demanding at least $10,000 worth of property tax deductions be allowed. Per Bloomberg:The House and Senate are on a collision course over one of the most prized individual breaks in the tax code.The Senate Finance Committee will start debating late Monday afternoon the 247-page tax proposal released last week by Chairman Orrin Hatch. As of now, the “conceptual” mark has some significant differences with the tax bill the House Ways and Means Committee approved last week -- chief among them the Senate’s call for repealing the state and local tax deduction entirely.Ways and Means Chairman Kevin Brady took a hard-line approach during a “Fox News Sunday” interview, saying the House won’t accept a tax bill that eliminates the deduction entirely. The House bill retains the deduction for property taxes up to $10,000.House Speaker Paul Ryan has promised that the differences will be settled in a conference between the two chambers, but some House lawmakers are concerned they’ll just be forced into a take-it-or-leave-it vote for a bill that looks much closer to the Senate version.“There are going to be things that we absolutely object to” in the bill that comes out of conference, said Scott Perry, a Pennsylvania Republican and member of the conservative Freedom Caucus. “But we’re going to have to look at it in its totality and say, ‘Yeah I don’t like it,’ but you have a binary choice” to vote for or against the tax bill, Perry said. Other divisive issues between the House and Senate could include the top individual income tax rate, the estate tax, the effective start date of a corporate rate and levies for companies that bring offshore profits back to the U.S.
Reminder: Republicans Need 60 Votes to Pass Their Tax Plan -- I keep seeing stuff like this: If Doug Jones, the Democratic nominee [for Alabama’s open Senate seat], wins next month, Mr. McConnell’s majority will shrink to one, possibly imperiling the Republican push to overhaul the tax code and most everything else that lawmakers are aiming to do to reverse their spiral before the midterm elections. If Jones wins, the Republican majority will indeed be reduced to 51-49. But that hardly matters. The tax bill needs 60 votes to pass.Republicans wrote reconciliation instructions allowing the tax bill to create a deficit of $1.5 trillion in its first ten years. But Senate rules still require the bill to be deficit neutral after the ten-year window. It’s not. It’s not even close. Here is Congress’ own estimate of the deficits produced by the Republican bill:It’s obvious that these deficits aren’t going to suddenly stop in 2028. That means the tax plan isn’t deficit-neutral after the ten-year window, and that means Republicans will need 60 votes to overcome a Democratic filibuster. As far as I know, there are only two other options:
- Make the tax bill temporary and have it expire in 2028. That’s what George Bush did. But Republicans have said they don’t plan to do this, and making a business tax overhaul temporary is nuts anyway.
- Ignore the official estimates and simply declare the bill deficit neutral. However, this is tantamount to killing the filibuster: if the Senate can ignore CBO and JCT estimates, they can ignore the Senate parliamentarian too. That means future Senates can pass reconciliation instructions for pretty much anything and pass them with a simple majority.
The Capitol Hill press corps needs to push back on this and ask Republicans blunter questions about their plan. Do they think they can round up eight Democratic votes? Do they plan to have the bill expire in 2028? Are they prepared to override CBO and JCT deficit estimates? Do they plan to outright kill the filibuster? If not, then what are they up to?
Mortgage deduction helps housing lobby, but not homeowners - The battle lines are drawn between those seeking to protect the mortgage interest deduction (MID) and a legislative effort to greatly reduce the use of the MID. Hopefully, this is a battle that taxpayers will win over the housing lobby — the loudest supporter of keeping the deduction intact.The housing lobby’s effectiveness is measured by its success at garnering subsidies. But the proposed House bill, the Tax Cuts and Jobs Act, would be a shot across the industry’s bow. The stage is now set for a crucial debate between two competing visions: the House plan — which would disincentivize the MID by raising the standard deduction and capping loans qualifying for the MID at $500,000 — and Senate tax reform legislation that effectively would leave the deduction intact.From the perspective of taxpayer cost and federal budgeting, it’s no contest which plan is better. Since 1994, the cost of the MID, the separate real estate tax deduction (also downsized in the House plan), and other single-family tax subsidies has totaled over $2.5 trillion and in fiscal year 2017 were estimated to cost $141 billion. This does not include the many hundreds of billions in subsidies over the same period provided to or by Fannie Mae, Freddie Mac, the Federal Housing Administration, Ginnie Mae and others, and the $6.7 trillion in taxpayer mortgage debt guaranteed by these same agencies.What did the U.S. taxpayer get for this massive level of rent-seeking? First, the U.S. homeownership rate today is 63.9% — statistically no different than the average rate of 64.3% since 1964 (excluding the bubble years). Second, these policies directly caused the 2008 financial crisis — a catastrophe for the U.S. and world economies. True to their past positions, both NAR and the NAHB are opposing the House tax reform plan, favoring the Senate version. NAR had previously released a study it commissioned that found that a doubling of the standard deduction, elimination of the state and local tax deduction, and lower marginal tax rates would cause home prices to fall by 10.2%. On the other side are supporters of tax reform and lower marginal rates. Gary Cohn, President Trump’s head of the National Economic Council, stated in September: "People don't buy homes because of the mortgage deduction."
Tough decisions loom as congressional GOP moves closer to tax cut plan -- Congressional Republicans face critical decisions this week as they move within striking distance on a major legislative package to cut taxes, an achievement party leaders say is crucial to stabilizing the GOP’s recent political tailspin ahead of next year’s elections. The House plans to vote on a GOP tax bill by week’s end that would slash taxes for companies and overhaul the tax code for virtually every American family and individual. And the Senate Finance Committee expects to vote on its version of the package within the next few days. Stark differences between the House and Senate tax bills remain unresolved, but there is enough overlap and — so far — muted intraparty resistance, making the White House increasingly optimistic that an agreement can come by Christmas, as President Trump has repeatedly promised. Enactment of the tax-cut package would mark Trump’s first major legislative accomplishment at a time when his job approval rating has dropped to a record low for this point in a presidential tenure. Still, potential quagmires remain. House and Senate Republicans risk colliding over whether Americans should be able to deduct local property taxes from their federal taxable income. The House GOP bill would allow Americans to deduct up to $10,000 of those taxes from income as a way to placate complaints from conservatives in high-tax states such as New York, New Jersey and California. In an interview on “Fox News Sunday,” Rep. Kevin Brady (R-Tex.), chairman of the House Ways and Means Committee, stood firm on that provision, saying it is important to “make sure people keep more of what they earn, even in these high-tax states.” Meanwhile, House and Senate bills differ importantly on how a huge corporate tax cut would go into effect. In the House GOP bill, the tax rate for corporations would fall from 35 percent to 20 percent in 2018. In the Senate bill, the tax cut wouldn’t take effect until 2019, delaying some benefits for corporations but shaving more than $100 billion off the cost of the change
Trump ready to put his own mark on tax debate -- President Donald Trump has been traveling through Asia for the past 11 days, but that hasn’t kept him out of the debate in Washington over tax reform. He’s spoken to House Ways & Means Committee chair Kevin Brady (R-Texas) by phone three times since leaving D.C. on Nov. 3 and talked to House Speaker Paul Ryan as recently as Friday, according to senior administration officials and congressional aides. Story Continued Below The White House provided Trump with a list of senators to stay in touch with during the Asia trip that included Democrats, according to a senior administration official. Staffers who stayed in the U.S. have also been updating Trump with regular memos on the progress of the House and Senate bills – including cluing him in to the fact that the corporate tax rate in the Senate version won’t drop to Trump’s favored 20 percent level until 2019. Trump and Vice President Mike Pence — who’s emerged as a key player in selling the tax overhaul on the Hill and across the country – has talked to Trump almost daily during the Asia trip, according to the senior administration official. The goal, outside advisers said, is to help Trump hit the ground running once he’s back in the White House. “You can be sure he will be messaging, marketing, and selling. The whole White House is really mobilized to get it done by the end of the year,” said Larry Kudlow, an informal economic adviser dating back to the 2016 campaign.
Trump Argues That GOP Tax Bill Should Do More for the Rich -- For months, the White House has pledged that its tax plan will not benefit the rich — or, at least, that it won’t do so intentionally. “Tax reform will protect low-income and middle-income households, not the wealthy and well-connected,” President Trump assured supporters in a recent speech in Indiana. “They can call me all they want. It’s not going to help. I’m doing the right thing, and it’s not good for me. Believe me.” In late September, National Economic Council director Gary Cohn went further, promising, “The wealthy are not getting a tax cut under our plan.” Other administration officials have conceded that the rich might derive some benefit — but only through the collateral consequences of lowering taxes on the middle class and corporations. Then, the House and Senate unveiled tax bills that deliver the lion’s share of their benefits to the idle superrich, while raising taxes on a broad swath of middle-class households. The bills would also eliminate deductions that benefit veterans, indebted students, and people who suffer from rare diseases — while preserving loopholes that enrich hedge-fund managers and owners of golf courses. Considering all this, it isn’t too surprising that the president decided to do a little back-seat driving Monday, and air an implicit criticism of congressional Republicans’ work. But the nature of that critique was a trifle baffling. The House tax-cut bill retains the current 39.6 percent rate on couples that earn over $1 million a year (while lowering the rate on couples that make below that figure, but above $480,000, to 35 percent). The Senate bill cuts the millionaires’ rate down to 38.5 percent. So: The populist president looked at legislation that increases the tax burden of half of all families with children — even as it allows the heirs of multimillion-dollar estates to avoid paying all capital gains taxes on their inherited assets — and concluded: This bill really needs to do more to increase the post-tax income of millionaires, and reduce the number of Americans with health insurance.
The GOP Has Done the Impossible: Make Tax Cuts Unpopular -- I would indeed be happy to have my tax rate raised for the purpose of reducing the deficit or funding important social needs. But the prospect of paying higher taxes in order to finance gigantic tax cuts for much richer people is a novel misery. When suburban voters in Virginia registered their fury with the majority party earlier this month, with waves of voters in the Washington suburbs giving Democrats shockingly large margins, Republicans in Congress drew the conclusion that voters were impatient for the tax plan to pass. The election result “doesn’t change my reading of the current moment,” a chipper House Speaker Paul Ryan explained. “It just emphasizes my reading of the current moment, which is: We have a promise to keep, and we have to get on with keeping our promise.” Senator Rob Portman agreed: “I think the lesson is: Let’s get some things done.” Josh Holmes, a former chief of staff to Senate Majority Leader Mitch McConnell, called the election result “a reaction to what’s not being done and a warning sign that they need to move. They don’t have any choice but to do the tax plan.” It’s hardly surprising that the Republicans are applying their solution to every problem (recession, inflation, wartime, high budget deficit, high budget surplus) to this particular problem. The perverse thing is that this version of a regressive tax cut comes attached to proposals to inflict pain upon the very constituents who are turning against them. The House Republican tax plan would raise taxes on a quarter of all households, including almost half of all middle-class families. It is especially brutal to middle- and upper-middle-class taxpayers in blue states, because it would scale back the federal tax deduction for state and local income taxes. Republicans gleefully conceived of this feature as a scheme to screw over New York, New Jersey, and California (which have higher than average taxes) while raising revenue that they could plow back into corporate tax cuts. But it so happens that these states also contain some of the most politically vulnerable House Republicans. What they designed as an act of sadism turns out to be an act of masochism.
Senate Begins "Marking Up" Tax Reform Plan As Post-Thanksgiving Vote Looms - The House is expected to vote on and, hopefully, pass its tax reform package on Thursday, but the Senate’s plan still hasn’t made it out of committee. Luckily for the Trump administration – which badly needs this legislative victory to stave off a donor mutiny - this could soon change: To wit, the Finance Committee has started the process of ‘marking up’ the bill, that is, the process of adding amendments and making alterations. But the process still needs to run smoothly if McConnell is to meet his deadline of starting floor consideration the week after Thanksgiving.Every day, the chances that the bill will pass by the administration’s year-end deadline appear to dim, something evidenced by the murmurs about trying to convince a Democrat or two to break ranks and support the Trump plan.“The first day of the Senate Finance Committee hearing featured Republicans and Democrats exchanging jabs over the proposal to slash corporate taxes and reduce individual rates, while closing some tax breaks.The House is expected to pass its version of the bill Thursday as Republicans seek to put a bill on President Trump’s desk by year’s end.It’s a heavy lift, given the tight time frame and differences between the chamber’s bills, though so far Republicans are hitting their marks.Senate Finance Committee Chairman Orrin Hatch (R-Utah) sought to highlight aspects of the measure that Democrats have supported in the past, including its preservation of some individual tax breaks and changes to the international tax system.“Long story short: Our proposed international reforms are not just a Republican wish list or some sort of favor to big companies,” he said. “They are, in fact, well within the bipartisan mainstream.”And in one hint at which side may win out in the battle over the soul of tax reform, the JCT reported that the Senate's plan to rewrite the tax code would go much further than a competing House proposal toward making good on Republican promises to focus on the middle class, a new report shows, Politico reported.The markup process will continue Tuesday, when lawmakers will question JCT officials and potentially begin to discuss amendments.Lawmakers have submitted some 355 amendments, though not all of them will be considered.A notable one from Orrin Hatch would make unspecified changes to ensure the bill doesn’t add to the deficit after 10 years. The legislation can’t increase the deficit outside of the budget window if Republicans want to pass it with only a simple majority.
McConnell Reveals Senate Tax Bill Will Include Repeal Of Obamacare Individual Mandate -- In what is emerging as the latest potential stumbling block for the passage of GOP tax reform, on Tuesday afternoon Senate Majority leader announced that the Senate tax bill will include language to repeal ObamaCare’s individual mandate, a move which could make passage prolematic as it could withdraw support from moderate Republicans. According to The Hill, Conservatives led by GOP Sens. Ted Cruz, Rand Paul and Tom Cotton pushed hard to include the provision, which would eliminate the federal penalty on people who do not buy health insurance.The move, if passed, would free up an estimated $300 billion to $400 billion over the next year that could be used to pay for lowering individual and business tax rates even further.According to McConnell, adding the individual mandate repeal would make it easier to muster 50 votes to pass the bill, although many others disagree. “We’re optimistic that inserting the individual mandate repeal would be helpful and that’s obviously the view of the Senate Finance Committee Republicans as well,” McConnell said.Allaying concerns that the revision would lead to a dealbreaker, Senator John Thune, the Senate's No. 3 Republican, told reporters there has been a whip count and he is confident Republicans can pass a tax bill that includes a measure to repeal the mandate.Thune said the Alexander-Murray bill, aimed at stabilizing markets, would be brought up separately. That bill funds key payments to insurers for two years in exchange for more flexibility for states to change ObamaCare rules.“I’m pleased the Senate Finance Committee has accepted my proposal to repeal the Obamacare individual mandate in the tax legislation," Cotton said in a statement. "Repealing the mandate pays for more tax cuts for working families and protects them from being fined by the IRS for not being able to afford insurance that Obamacare made unaffordable in the first place. I urge the House to include the mandate repeal in their tax legislation."Republican members of the Senate Finance Committee had met Monday night to discuss the repeal issue, Republican aides told The Hill. The full Senate GOP caucus discussed the idea at its lunch meeting on Tuesday. Sen. John Kennedy (R-La.) said the bulk of the GOP's policy luncheon Tuesday was focused on repealing the individual mandate through tax reform. While he admitted that the decision wasn't unanimous, he said that no one threatened to vote against tax reform if it were included.
Senate GOP changes tax bill to add Obamacare mandate repeal, make individual income cuts expire WaPo - Senate Republican leaders moved Tuesday to include a repeal of the Affordable Care Act’s individual mandate in their tax bill, a major change of strategy as they try to accomplish two of their top domestic priorities in a single piece of legislation. They also announced that the individual tax cuts in the plan would be made temporary, expiring at the end of 2025 to comply with Senate rules limiting the impact of legislation on the long-term deficit. A corporate tax cut, reducing the rate from 35 to 20 percent, would be left permanent. The changes introduce volatile variables into what was already a challenging political enterprise for Republicans. And it’s unclear whether they will help or hurt the bill’s chances. Repealing the mandate, which compels most Americans to buy health insurance or pay a fine, would free up more than $300 billion in government funding over the next decade that Republicans could use to finance their proposed tax cuts, but it would result in 13 million fewer people having health insurance, according to projections from the nonpartisan Congressional Budget Office. The CBO has also projected that repealing the individual mandate would drive up insurance premiums for many Americans by roughly 10 percent. Republican senators discussed the proposal to eliminate the Obamacare individual healthcare mandate as a part of tax reform on Nov. 14. (Jordan Frasier/The Washington Post) Eliminating the individual mandate and having far fewer people signed up for insurance saves money because many of those people receive federal subsidies to buy coverage. Senate leaders are using those savings to address the concerns of anxious members from across their caucus who complained that the tax plan’s benefits for the middle class were too modest compared with benefits received by the wealthy and corporations. Changes to the bill released Tuesday night by the Senate Finance Committee indicated that the savings would be used in part to allow individuals to claim a larger $2,000 child tax credit, a priority of Ivanka Trump, the president’s daughter. They would also be used to modestly reduce income tax rates for middle-income taxpayers.
GOP tax bill could spur $25 billion in Medicare cuts: CBO -The GOP tax bill could trigger automatic cuts worth $136 billion from mandatory spending in 2018, including $25 billion in Medicare cuts, if Congress doesn’t find another way to offset its deficit increases, according to the Congressional Budget Office (CBO). The tax bill would add an estimated $1.5 trillion to the deficit over a decade. Congressional “pay-as-you-go” rules, called pay-go, require that the White House Office of Management and Budget (OMB) automatically cut mandatory spending if legislation increases the deficit beyond a certain point. “Without enacting subsequent legislation to either offset that deficit increase, waive the recordation of the bill’s impact on the scorecard, or otherwise mitigate or eliminate the requirements of the [pay-go] law, OMB would be required to issue a sequestration order within 15 days of the end of the session of Congress to reduce spending in fiscal year 2018 by the resultant total of $136 billion,” CBO wrote on Tuesday. Medicare can only be cut by a maximum of 4 percent through the pay-go rules, however, which amounts to $25 billion in cuts. Republicans are moving swiftly to pass a tax bill before the end of the year, with a House vote as soon as this week. Democrats argue that the deficits produced by the bill will lead to cuts to popular programs like Medicare and Social Security.
‘Why aren’t the other hands up?’ A top Trump adviser’s startling response to CEOs not doing what he’d expect - WaPo -- President Trump's top economic adviser, Gary Cohn, looked out from the stage at a sea of CEOs and top executives in the audience Tuesday for the Wall Street Journal's CEO Council meeting. As Cohn sat comfortably onstage, a Journal editor asked the crowd to raise their hands if their company plans to invest more if the tax reform bill passes.Very few hands went up. Cohn looked surprised. “Why aren't the other hands up?” he said. He laughed a little to lighten the mood, but it didn't cause many more hands to rise. Maybe the CEOs were tired. Maybe they didn't hear the question. It was a casual poll, but the lukewarm response seemed in tension with much of the public enthusiasm among corporations for a tax overhaul. The president and his senior team have kept saying that the tax plan would unleash business investment in the United States — new factories, more equipment and more jobs. But, perhaps as the informal poll suggested, there are reasons to be doubtful that a great business investment boom would materialize. First, American businesses are already enjoying record profits. If they wanted to invest, they have plenty of money on hand to do it, says Howard Silverblatt, a senior analyst at S & P Dow Jones Indices, where he tracks all the financial decisions of S & P 500 companies. Second, executives themselves have indicated they probably won't use extra profits to invest. A Bank of America-Merrill Lynch survey this summer asked over 300 executives at major U.S. corporations what they would do after a “tax holiday” that would allow them to bring back money held overseas at a low tax rate. The No. 1 response? Pay down debt. The second most popular response was stock buybacks, where companies purchase some of their own shares to drive up the price. The third was mergers. Actual investments in new factories and more research were low on the list of plans for how to spend extra money. The results of the Bank of America poll show a very similar pattern of corporate behavior to what happened after the 2004 tax repatriation holiday when U.S. companies spent the majority of their money coming back home from overseas on stock buybacks. It was a payday for Wall Street investors that generated little benefit to the middle class and wider economy.
Tension High at Senate Finance Committee Tax Markup -- Day Three of the Senate Finance Committee tax markup began under a cloud of partisan discord after top Republicans dropped a new version of their tax plan late Tuesday night, making broad changes that Democrats were not consulted on in advance.The tax writing panel on Wednesday was debating the revised GOP tax plan that would now roll back a central part of the 2010 health care law and make the most significant individual tax benefits in the plan expire after eight years.Chairman Orrin G. Hatch of Utah pointed out that repeal of the Obamacare individual mandate penalty would save $318 billion over 10 years and fund additional tax cuts. But ranking member Ron Wyden insisted that the “11th hour” decision by Republicans to insert the repeal was being done without proper debate or Congressional Budget Office experts on hand to answer questions.Wyden, an Oregon Democrat, complained that “health care is going to be cut more than $300 billion . . . and we ought to have the Congressional Budget Office here to tell us what harm this will do.”Thomas Barthold, chief of staff for the Joint Committee on Taxation, said his office would work to provide an updated analysis including the penalty repeal on the proposal’s impact on different income groups.“This is not just another garden variety attack on the Affordable Care Act,” Wyden said. “This is repeal of that law.” Wyden also complained that the new chairman’s mark made corporate tax cuts permanent, but did not do the same for individual tax cuts. “What a double standard that is,” he said.Hatch foreshadowed difficulties during the day’s deliberations in his opening comments. “I will make sure that members are recognized so we all get a chance to speak and ask questions, but I won’t abide the disorder and hostility we witnessed yesterday, yesterday afternoon,” he warned. Hatch’s updated proposal would lower certain individual tax rates and raise the proposed child tax credit to $2,000, among other changes released after 10 p.m. Tuesday night.
Trade-Offs Made Clear in the Senate Bill – Last night, Chairman Hatch introduced a new version of the Senate tax overhaul bill. Since the bill is being pushed through using reconciliation procedures to avoid the filibuster, the bill is not allowed to add to the deficit after the end of the budget window in 2027. The original version had violated that constraint, and Chairman Hatch last night amended the bill bring it into compliance, expiring many of the provisions after 2025. After those expirations, what remains is a permanent corporate tax rate cut paid for with a number of business tax raisers and then two large offsets that, in combination, affect almost every low- and middle-income family.Specifically, as of 2027, the chained CPI (an alternative inflation measure that slows down cost of living adjustments in the tax code) would remain in place, raising about $30 billion according to the Joint Committee on Taxation (JCT), and the repeal of the individual mandate from the Affordable Care Act would raise an additional $50 billion. Together, these two provisions offset about half the cost of the corporate rate cut as of that year, with the rest coming from business offsets. The reconciliation rules have now forced the tax writers to choose their priorities. Looking across the income distribution, the effects of those choices are clear. The below figure shows the distribution specifically of paying for the corporate rate cut with the chained CPI in 2027. It reflects the $30 billion of taxes being raised through the chained CPI in that year and offsetting a little under one-fifth (or almost three percentage points) of the corporate rate cut. The distribution is based on earlier Tax Policy Center (TPC) tables separately distributing the chained CPI and corporate rate reductions. Basically, the only winners on average from that trade-off are the top 1 percent, with the top 0.1 percent coming off particularly well. Low- and middle-income Americans face tax increases.
Senate tax bill ditches stock option change after outcry from tech start-ups - LA Times: A revised Senate tax bill has ditched a change in the treatment of stock options after an outcry from technology start-ups. The original bill released last week proposed to tax stock options on the date they vest instead of when they are cashed in. Technology start-ups such as Hyperloop One, Airbnb, Uber and Vimeo complained that the change would make it harder for them to attract employees. More than 600 start-ups, venture capitalists and technology executives signed a letter Tuesday to Senate Finance Committee Chairman Orrin Hatch (R-Utah) urging him to remove the provision. Late Tuesday night, Hatch released a revised tax bill that did just that. The new bill also made a number of other changes, including designating new lower individual tax rates to expire at the end of 2025 and repealing the mandate in the Affordable Care Act that all Americans have health insurance. In addition, the revised Senate bill now includes language from the Empowering Employees Through Stock Ownership Act, proposed last year by Sens. Dean Heller (R-Nev.) and Mark Warner (D-Va.) that would give employees new flexibility on paying taxes on stock options if a company offers them to 80% of its workforce.
GOP tax plan in trouble after Republican senator says he won’t back it - The Republican effort to overhaul the tax code suffered serious setbacks Wednesday after a conservative senator unexpectedly said he opposed the Senate plan and a GOP moderate raised major concerns about it. The announcements cast doubt whether Republicans would be able to quickly pass what would be their first significant legislative achievement under President Trump. Sen. Ron Johnson (R-Wis.) said he opposed both the Senate and House versions of the tax legislation because they benefited corporations at the expense of other, typically smaller companies. Earlier in the day, Sen. Susan Collins (R-Maine) said Republicans had erred when they changed their tax bill this week to include a repeal of the Affordable Care Act’s individual mandate, which requires every American to have health insurance or pay a fine. “This bill is a mixture of some very good provisions and some provisions I consider to be big mistakes,” said Collins, one of three Republicans who joined with Democrats this summer to vote down a Senate effort to scrap much of the health-care law.Without Johnson and Collins, Republicans would need every other member of their caucus to vote for the plan — far from a guaranteed outcome. And neither senator’s concern can be easily addressed without changes that could drive other Republicans to oppose the bill.Senate Republicans released their tax proposal on Nov. 9, but face some hurdles to reconcile the differences among the Senate, the House and President Trump in order to sign a bill into law. (Jenny Starrs,Jordan Frasier/The Washington Post) Adding additional tax breaks for smaller businesses could appease Johnson, but it could force the GOP to raise taxes elsewhere. Leaving the Affordable Care Act alone could make the measure more attractive to Collins and other moderates. But it would run against the wishes of many conservatives and Trump and create other challenges in making the bill comply with Senate rules allowing passage with fewer than 60 votes.
House Republicans pass tax plan, Senate plan's future unclear - The House of Representatives passed major tax reform legislation along party lines, advancing a key agenda item for President Donald Trump and congressional Republicans.The vote was 227-205, with 13 House Republicans joining all Democrats to oppose the bill. As the vote tally passed the majority mark, Republicans in the House began to cheer. At the same time, Democrats on the other side of the chamber also began to cheer -- and wave goodbye to their colleagues across the aisle, as both sides see the legislation as a polarizing issue going into next year's midterms.While the bill's passage in the GOP-controlled House was largely drama free, the prospects for the measure are more unclear in the Senate where Republicans hold a slim two-seat majority. On Wednesday, Wisconsin GOP Sen. Ron Johnson announced he opposes the current Senate version and a handful of others have raised concerns. Republican leaders have vowed to get a tax bill to the President's desk by the end of the year.Trump spoke to the conference ahead of the vote, but members say it's not because leadership is worried that they lack the votes. Leadership aides tell CNN they're confident they are in a good place, able to pass legislation that drops the corporate tax rate, reduces the number of tax brackets and simplifies the code just two weeks after the bill was unveiled. But Republicans are also cautious that this is the first step in a multi-stage process. Passing their bill is just the first vote. Republicans in the House are conscious that the Senate still has its work to do, not to mention that most expect a tedious process of melding the two measures to follow. One member quipped on background, "Conference is gonna be brutal."
Senate sends $700 billion defense bill to Trump, funding uncertain (Reuters) - The U.S. Senate passed a $700 billion defense policy bill on Thursday, backing President Donald Trump’s call for a bigger, stronger military, but leaving unsettled how to fund the massive spending increase amid a Republican-led push to cut taxes. The Senate passed by voice vote the annual National Defense Authorization Act, or NDAA, which authorizes the level of defense spending and sets policies controlling how the money is spent. The measure, passed by the House of Representatives on Tuesday [L1N1NK2OP], next goes to the White House for Trump’s signature. Trump’s fellow Republicans control majorities in both the House and Senate and he is expected to sign the bill. But the funding may never come to fruition. The 2018 NDAA defies spending caps set in the 2011 Budget Control Act, passed to help control the budget deficit, and there is no clear plan from Congress on how to provide more money for the Pentagon. The Senate backed the NDAA on the same day Republicans in the House of Representatives passed a sweeping tax bill, with no support from Democrats, which is expected to increase the federal deficit by nearly $1.5 trillion over 10 years. Senate Republicans are working on their own version of the measure. The 2018 NDAA authorizes $634 billion in base defense spending, for such things as buying weapons and paying the troops, well above the $549 billion allowed under the “sequestration” controls set in the Budget Control Act. It also includes about $66 billion in special war funding, which is exempt from the sequestration cap. The NDAA passed this week is a compromise reached by House and Senate negotiators between separate versions of the bill approved in the chambers earlier this year. A budget fight is expected, however, because Senate Democrats may not agree to big increases in funds for the military if spending caps on non-defense programs are not also eased.
Moderate Collins back in prominent role in Senate tax drama - Senator Susan Collins is back in the spotlight as a crucial swing vote in the U.S. Senate as she raises questions about how combining a Republican tax-cut plan with a partial repeal of Obamacare will affect middle-class Americans.A day after Senate Republican leader Mitch McConnell decided to link the two issues in a risky strategy, Collins, a moderate Republican from Maine, was citing data that she called worrisome, casting new doubts over the tax plan's outlook.She told reporters in the Capitol on Wednesday that her staff's research showed pairing tax cuts with an effective repeal of the individual mandate of Obamacare, formally known as the Affordable Care Act (ACA), could be a mistake."I have data that demonstrates for certain middle-income individuals and couples, who do not qualify for subsidies under the ACA ... that the premium increase will outweigh the tax cut that they get," she said. "I suspected this, based on what I know about insurance markets, but now I have the actual data."Collins was one of a handful of Republicans who voted in July to block a broader Republican attempt to dismantle Obamacare, former Democratic President Barack Obama's signature healthcare law.The failure of the final repeal effort, in which Collins was joined in opposition by fellow Republicans John McCain and Lisa Murkowski, was a stinging defeat for President Donald Trump and Republican congressional leaders eager to fulfill their campaign promise to scrap Obamacare.Collins, 64, a senator since 1997, decided last month against running for governor of Maine in favor of staying in the Senate, where her status as a centrist Republican willing to work with Democrats has made her one of the most influential members of Congress. That has become especially obvious in recent months. After her role in halting Obamacare repeal efforts during the summer, she said in September she would oppose another Republican healthcare overhaul, known as Cassidy-Graham, leaving it short of the votes needed to pass. She cited concerns about its proposed cuts to the Medicaid healthcare program for the poor.
Who’d Gain From an Estate Tax Rollback: The 0.2 Percenters -- Supporters and critics of the Republican tax bills argue over their effect on middle-class Americans, but there is one group that everyone agrees would come out ahead: the millionaires and billionaires who have to reckon with the estate tax. As Steven Mnuchin, President Trump’s Treasury secretary, bluntly declared last month, “Obviously, the estate tax, I will concede, disproportionately helps rich people.”As it is now, the estate tax affects a small set of wealthy Americans, applying only when someone leaves assets worth more than $5.49 million to heirs. Together, parents can leave $11 million to their children without paying a penny in estate taxes.Last year, for example, more than 2.6 million people died in the United States. Of the estates filed with the Internal Revenue Service, 5,219 — or 0.2 percent of the total — were large enough to qualify for the tax.The kind of households that could potentially owe money, however, include Mr. Trump’s, Mr. Mnuchin’s, and those of several cabinet members and advisers, including Education Secretary Betsy DeVos, Commerce Secretary Wilbur Ross, Secretary of State Rex W. Tillerson, Transportation Secretary Elaine Chao, Agriculture Secretary Sonny Perdue, Housing Secretary Ben Carson and Gary Cohn, chief of the National Economic Council. (An analysis by the left-leaning Center for American Progress Action Fund concluded that the estate tax repeal could save Mr. Trump’s estate more than $1 billion, and those of his cabinet members $3.5 billion.) Mr. Trump has stated, incorrectly, that the tax is crushing “millions of small businesses and the American farmer.” In reality, only about 80 small businesses and farms would fall under the estate-tax tent this year, according to the nonpartisan Tax Policy Center.
Mitch McConnell’s Middle-Class Tax Hike - The House of Representatives passed a bill yesterday that will raise taxes on millions of middle-class families. The bill will also give gigantic tax cuts to the wealthy and, as a result, cause the deficit to soar. It’s a bill that would do real damage to the American economy. But the House was never the main event. A party that holds a majority in the House can usually pass a bill there. It happened with a Republican bill to repeal Obamacare earlier this year, and it happened with an aggressive climate bill when Democrats controlled the House during the Obama presidency. But both that Democratic climate bill and the Republican health-insurance repeal failed to get through the Senate. Now the tax bill moves to the Senate, where its fate is more uncertain than it was in the House. Republicans can probably afford to lose only two senators, and about a half-dozen senators appear to be in play. Axios has a helpful guide to the swing senators, including John McCain, who presumably would have the same procedural concerns about the tax bill that he had about the health bill. Both are being rushed through the Senate. Also on the tax bill: Seth Hanlon explains how the Tax Foundation, an advocacy organization for corporate tax cuts, has cast itself as a group of disinterested experts. The latest version of the Senate bill is even harsher than an earlier version, write Jacob Leibenluft and Chye-Ching Huang. I think of the bill as Mitch McConnell’s Middle-Class Tax Increase of 2017.
Tax reform roadblocks emerge in Senate - Politico - Republicans were able to muscle their tax-rewrite plan, through the House exactly two weeks after it was unveiled, but they are already facing far tougher sledding in the Senate. GOP leadership is confronting mushrooming demands from individual senators with much more power to bollix up the tax plans, thanks to the party’s super-thin majority. Sen. Ron Johnson (R-Wis.) has already said he won’t vote for his colleagues' proposal because of how it treats small businesses, leaving Republicans with just one vote to spare when the plan hits the Senate floor after Thanksgiving. Deficit hawks like Sens. Bob Corker (R-Tenn.) and Jeff Flake (R-Ariz.) are worried the plan will cost far more than advertised thanks to its liberal use of “temporary” tax provisions that will likely be eventually extended, and say they are working on changes to bring down the cost. Moderate Susan Collins (R-Maine) has her own concerns, including with plans to repeal the Affordable Care Act’s individual mandate to have health insurance as part of tax reform. Others like Sens. John McCain (R-Ariz.) and Lisa Murkowski (R-Alaska) have been wildcards, avoiding taking a public position on the proposal.
Class warfare fight erupts over tax bills | TheHill: Tensions over class warfare and whether GOP tax plans help the rich over the middle class and poor are building in Congress as Republicans march forward with their legislation. Democrats have been forcefully and repeatedly arguing that the GOP wants to cut taxes for wealthy individuals and corporations at the expense of everyone else. Republicans, annoyed with the attacks, have pushed back, saying their focus is on the middle class. The issue came to a head late Thursday with an eruption from Senate Finance Committee Chairman Orrin Hatch (R-Utah) toward the end of a grueling four-day markup of the chamber’s bill. The 83-year-old chairman blew up after Sen. Sherrod Brown (D-Ohio) argued that the bill is geared toward the rich. “I come from the poor people, and I’ve been here working my whole stinking career for people who don’t have a chance,” said Hatch, who was first elected to the Senate in 1976 and is battling rumors that this will be his final term. “And I really resent anybody saying that I’m just doing this for the rich. Give me a break.” “I think you guys overplay that all the time and it gets old, and frankly you ought to quit it,” he said in a moment that quickly went viral. Fights over class are nothing new in Washington, where generations of Democrats have labeled Republicans as warriors for the wealthy. Hatch also is hardly the first GOP lawmaker to take offense. Republicans have long accused Democrats of engaging in class warfare for their attacks on the rich. But Democrats have also accused Republicans of attacking the middle class.
The Republican Tax Bill and Cuts to Social Security -- Reductions in Social Security benefits are extremely unpopular across the political spectrum. The program enjoys enormous support among both Democrats and Republicans and people are far more likely to say that benefits should be raised than cut. For this reason, the public should be paying attention to a little noticed provision in the tax bill passed by the House today and which also appears in the bills under consideration in the Senate. In both cases, the basis for indexing tax brackets would be shifted from Consumer Price Index (CPI) to the Chained Consumer Price Index (CCPI). The difference is that the CCPI takes account of when people change their consumption patterns in response to changes in relative prices. The classic example is that beef rises in price and chicken falls, we would expect people to consume less beef and more chicken. The CPI assumes that people don't change their consumption patterns while the CCPI adjusts its basket to assign less importance to beef and greater importance to chicken. For this reason, the CCPI shows a somewhat lower rate of inflation than the CPI. Typically the gap is 0.2–0.3 percentage points. This matters in the tax bill because the cutoff for the tax brackets is adjusted each year by the CPI. If the CCPI is used rather than CPI, then the cutoffs would rise less rapidly. In a single year, this difference will not mean much, but after 10 years, the difference in the indexes would be between 2.0–3.0 percent and it would grow more through time. This will add a fair bit to many people's tax bills. All of this matters for Social Security because after people retire the benefits are indexed to the CPI. There were efforts in the Obama years to change the indexation to the CCPI, but these were beaten back. If the tax brackets are already indexed to the CCPI, then the pressure to switch indexes for Social Security will be considerably stronger. That would mean a cut in benefits for some who has been retired for ten years of between 2.0–3.0 percent, after twenty years 4.0–6.0 percent, and after thirty years 6.0–9.0 percent. This is real money.
Hundreds of millionaires are banding together to tell Congress: Raise our taxes -- Over 400 millionaires and billionaires from the United States plan to send a letter to Congress this week petitioning on lawmakers not to cut their taxes — but to raise taxes on the wealthy, according to a Washington Post report. Instead of calling for tax cuts for the rich, the letter urges lawmakers not to pass any tax bill that "further exacerbates inequality" and adds to national debt, the article said. The move comes at a time when inequality is at its peak since the 1920s and government debt levels are also high, the Post reported.The letter was put together by liberal group Responsible Wealth. Most of its signatories come from California, New York and Massachusetts, states that voted for Democrat Hillary Clinton in last year's presidential race, according to the Washington Post. The support of Republican representatives from California, New York and New Jersey is expected to be crucial for the GOP's tax reform efforts to see success, the Post reported.
For The First Time Ever, The Richest 1% Own More Than 50% Of The World's Wealth -- Today Credit Suisse released its latest annual global wealth report, which traditionally lays out what has become the single biggest reason for the recent "anti-establishment" revulsion: an unprecedented concentration of wealth among a handful of people, as shown in Swiss bank's infamous global wealth pyramid, an arrangement which as observed by the "shocking" political backlash of the past year, suggests that the lower 'levels' of the pyramid are increasingly unhappy about. As Credit Suisse tantalizingly shows year after year (most recently one year ago), the number of people who control roughly half of the global net worth, or 45.9% of the roughly $280 trillion in household wealth, is declining progressively relative to the total population of the world, and in 2017 the number of people who were worth more than $1 million was just 36 million, roughly 0.7% of the world's population of adults. On the other end of the pyramid, some 3.5 billion adults had a net worth of less than $10,000, accounting for just about $7.6 trillion in household wealth. And in between is the so-called global middle class - those 1.4 billion people whose rising anger at the status quo made Brexit and Trump possible.As the report authors write, there is just one group to have benefited from the Fed's post-crisis monetary policies: " Our calculations show that the top 1% of global wealth holders started the millennium with 45.5% of all household wealth. This share was about the same until 2006, then fell to 42.5% two years later. The downward trend reversed after 2008 and the share of the top one percent has been on an upward path ever since, passing the 2000 level in 2013 and achieving new peaks every year thereafter. According to our latest estimates, the top one percent own 50.1 percent of all household wealth in the world.” As the bank then laconically adds, "Global wealth inequality has certainly been high and rising in the post-crisis period." And as the chart below shows, in 2017, for the first time ever, the richest 1% now controls just over half, or 50.1%, of global wealth.
Bill Gates, Jeff Bezos, and Warren Buffett Own More Wealth Than the Entire Poorest Half of the US Population -- As treasure troves of the super-elite’s untold trillions glisten in offshore tax havens, Main Street is sinking in an underwater economy. Drowning in debt, clinging to the tatters of the welfare state, the gulf between the richest few and the rest of us could now widen even further with a new GOP tax bill loaded with another corporate bounty of loopholes, more tax “incentives,” and more trickle-up economics designed to concentrate as much wealth in as few hands as possible. Ad Policy According to a report on the country’s widening wealth gap, published by the Program on Inequality at the Institute for Policy Studies (IPS), the elites at the helm of this upside-down economy would fit in a cozy lifeboat: The three wealthiest people in the United States—Bill Gates, Jeff Bezos, and Warren Buffett—now own more wealth than the entire bottom half of the American population combined, a total of 160 million people or 63 million households. More than half of US wealth is controlled by 25 billionaires. And multinational corporations shield an estimated 10 percent of global GDP from taxation through avoidance and evasion in obscure, unregulated financial enclaves. The Paradise Papers—the massive trove of financial records exposing tech giants, Russian oligarchs, and White House officials alike—offer a glimpse of the hidden riches that remain untouchable by Uncle Sam, and the structural regulatory failures that feed global corporate impunity. But, while the papers largely focus on corporate malfeasance, it’s vital to also look at the social injustices produced by this wealth imbalance, and the crisis of democracy that abets this global theft. According to recent estimates, “households in the top 0.01 percent, with wealth over $45 million, evade 25 to 30 percent of personal income and wealth taxes.”
IRS chief departs, blasting Congress for budget cuts threatening tax agency - Thursday is John Koskinen’s last day as commissioner of the Internal Revenue Service, allowing his bluntness about Congress on Tuesday. “It’s clearly a matter of fault,” Koskinen said, off script but on message. “That’s my point here, as I leave town. I want people to understand that there are ramifications to, in fact, underfunding the agency. If the agency fails and people are looking for fault, it will be the fault of the Congress. … I am blaming Congress.” Koskinen had repeatedly warned Congress about the dangers of shortchanging the agency that collects more than 90 percent of the government’s money. But Republicans were intent on penalizing the IRS because they said it had improperly scrutinized right-leaning organizations. It turns out that left-leaning groups also were targeted by that scrutiny, but for much of that controversy the focus was on conservatives. Congressional retribution meant taxpayer service suffered, or, too often, it simply failed. Because of staffing shortages, there were long telephone wait times for taxpayers, when calls were answered at all. Koskinen outlined two risks that continue to threaten tax administration, saying “this is not a question of ‘whether,’ but of ‘when,’ ” if the budget continues to be cut. First are the agency’s information technology systems, which Koskinen said “have long been operating with antiquated hardware and software.” He warned “that the potential for a catastrophic system failure is increasing as our infrastructure continues to age.” The second risk involves people, not things. The IRS has lost about 20,000 full-time staffers since 2010. That’s a big slice out of workforce that is now about 80,000. About one-third of the compliance staff, those who get taxpayers to pay, was lost. There were twice as many revenue officers in 1954, and there are fewer criminal investigation special agents than at any time since 1971. The number of audited individual tax returns is at its lowest point in 14 years. Criminal investigations are down 11 percent from last year and more than a third below 2010. The number of recommended prosecutions dropped by more than a third from four years ago. “What these numbers mean is that, without adequate resources, we don’t have enough people to perform all the audits we
Millions of kids may lose health insurance over missed deadline by Congress - Roland Williams, a St. Louis boy with a megawatt smile and a penchant for painting, had an extremely rare form of lung cancer, oncologists told his mother in May 2016. "They didn't think he would make it to see his 10th birthday," Roland is covered under the Children's Health Insurance Program (CHIP), a federal health insurance program that provides inexpensive coverage to nearly 9 million children in low-income families. For many kids, CHIP covers annual check-ups and other pediatrician visits; for Roland, it has made chemotherapy, radiation and surgery possible, all of which has made the difference between life and death. But now Roland — who this week spent time getting ready for Christmas by painting ornaments in between hospital visits — is facing another blow: His health insurance may run out. CHIP has enjoyed bipartisan support since its inception in 1997, but this year, legislators let the deadline for reauthorizing it pass as they bickered over other health care issues, primarily the latest Republican-led push to repeal and replace the Affordable Care Act.
While Americans are split over how to handle Obamacare, three-quarters of the public want CHIP renewed, according to the September Kaiser Health Tracking Poll. If Congress doesn't renew CHIP soon, the consequences could be far-reaching. The program provides health insurance for children and pregnant mothers in families that don't qualify for Medicaid, yet can't afford private insurance — people like Gregory, a single mother to Roland and his two younger brothers. "There are so many other families out there that won't even get treatment or be able to find out what's wrong, or know that anything is wrong with their child," Gregory, who does temp work at warehouses and factories, said. "I am very appreciative of all the help that I've received. But not receiving this is detrimental and can mean my son's life."
Senators push to ditch Social Security numbers in light of Equifax hack -- Eyeing more secure alternatives to Social Security numbers, lawmakers in the U.S. are looking abroad. Today, the Senate Commerce Committee questioned former Yahoo CEO Marissa Mayer, Verizon chief privacy officer Karen Zacharia and both the current and former CEOs of Equifax on how to protect consumers against major data breaches. The consensus was that Social Security numbers have got to go. Rounding out the panel, Entrust Datacard president and CEO Todd Wilkinson offered some context and insight about why the U.S. should indeed move away from Social Security numbers — a step that the witnesses unanimously agreed was necessary if not wholly sufficient to protect consumers moving forward, in light of the Equifax hack. “Over 145 million Americans’ insecure identities are now forever at risk, and they have limited ability to protect themselves,” Wilkinson said. “A key question for this committee to consider is: What do we do now given these identities are forever compromised?” Social Security numbers are a privacy nightmare. While a consumer who gets hacked can replace credit card numbers and other account details, a Social Security number is relatively permanent, linked to a real identity throughout a person’s lifespan. In the hearing, Wilkinson and many of the senators present argued that the U.S. needs to move to a dynamic system of personal identity, one designed with digital security in mind — a stark contrast with an inflexible legacy system that dates back to the 1930s. “Some combination of digital multi-factor authentication… is the right path,” former Equifax CEO Richard Smith said when asked about such a program.
Senate confirms Bradbury after fight over ‘torture memos’ The Senate on Tuesday narrowly confirmed Steven Bradbury to join the Department of Transportation, with two Republicans voting with Democrats in opposition over Bradbury's authorship of so-called torture memos during the George W. Bush administration. The 50-47 vote came after an impassioned plea from Sen. John McCain (R-Ariz.), who joined Democrats in a push to derail Bradbury's confirmation as the general counsel at DOT. McCain did change one mind, however, with Sen. Joe Manchin (D-W.Va.) voting no after crossing the aisle to support Bradbury on a key procedural vote Monday. Story Continued Below ..Manchin said in an interview after the vote that he "would try to be supportive of any administration" on nominees and that Bradbury had impressed him during their meeting. But when McCain called him Tuesday to personally ask for a no vote, Manchin said, he changed course "because of John’s service to our country, my respect and admiration for John." The Arizona Republican vowed earlier Tuesday to be "on the floor raising hell" against Bradbury, who helped draft controversial memos that provided legal grounds for the use of brutal interrogation techniques against detainees suspected of terrorism as a top Justice Department official under Bush. "We are now endorsing violations of the Geneva Conventions," McCain said "The conventions govern the rules for war. That will be a disgraceful chapter.” McCain also urged colleagues in a Tuesday letter, co-signed by Sens. Tammy Duckworth (D-Ill.) and Dianne Feinstein (D-Calif.), to bring down Bradbury's bid.
Trump picks former pharma exec, ex-Bush official to lead HHS department -- President Donald Trump on Monday announced he is nominating Alex Azar, a former pharmaceutical company executive and George W. Bush administration official, to succeed Tom Price as the secretary of the Department of Health and Human Services.In tweeting the announcement, Trump called Azar a "star for better healthcare and lower drug prices."He previously served as HHS general counsel and deputy secretary for President George W. Bush. Following his time with the administration, he worked for pharmaceutical giant Eli Lilly & Co. and became president of Lilly USA in 2012. As part of his role at Lilly USA, Azar was on the board of directors for the Boards of the Biotechnology Industry Organization (BIO), a druglobbying group. He left Lilly USA and BIO in January.During Azar's tenure leading Lilly, the company was accused of routinely increasing drug prices. In an October letter, Reps. Raul Grijalva, D-Arizona, Mark Pocan, D-Wisconsin, and Jan Schakowsky, D-Illinois, wrote that under his leadership, Azar's company fought "against federal and state legislation to increase drug pricing transparency." And a lawsuit filed in Massachusetts in early 2017 alleges that the company shot up prices on insulin "in near lock step" with two other pharmaceutical manufacturers, according to The New York Times.
Trump Is Rapidly Reshaping the Judiciary. Here’s How — In the weeks before Donald J. Trump took office, lawyers joining his administration gathered at a law firm near the Capitol, where Donald F. McGahn II, the soon-to-be White House counsel, filled a white board with a secret battle plan to fill the federal appeals courts with young and deeply conservative judges. Mr. McGahn, instructed by Mr. Trump to maximize the opportunity to reshape the judiciary, mapped out potential nominees and a strategy, according to two people familiar with the effort: Start by filling vacancies on appeals courts with multiple openings and where Democratic senators up for re-election next year in states won by Mr. Trump — like Indiana, Michigan and Pennsylvania — could be pressured not to block his nominees. And to speed them through confirmation, avoid clogging the Senate with too many nominees for the district courts, where legal philosophy is less crucial. Nearly a year later, that plan is coming to fruition. Mr. Trump has already appointed eight appellate judges, the most this early in a presidency since Richard M. Nixon, and on Thursday, the Senate Judiciary Committee voted along party lines to send a ninth appellate nominee — Mr. Trump’s deputy White House counsel, Gregory Katsas — to the floor. Republicans are systematically filling appellate seats they held open during President Barack Obama’s final two years in office with a particularly conservative group of judges with life tenure. Democrats — who in late 2013 abolished the ability of 41 lawmakers to block such nominees with a filibuster, then quickly lost control of the Senate — have scant power to stop them.Most have strong academic credentials and clerked for well-known conservative judges, like Justice Antonin Scalia. Confirmation votes for five of the eight new judges fell short of the former 60-vote threshold to clear filibusters, including John K. Bush, a chapter president of the Federalist Society, the conservative legal network, who wrote politically charged blog posts, such as comparing abortion to slavery; and Stephanos Bibas, a University of Pennsylvania law professor who once proposed using electric shocks to punish people convicted of certain crimes, although he later disavowed the idea. Of Mr. Trump’s 18 appellate nominees so far, 14 are men and 16 are white. While the two parties have been engaged in a tit-for-tat escalation of hardball politics over judicial nominations since the Reagan years, the Trump administration is completing a fundamental transformation of the enterprise. And the consequences may go beyond his chance to leave an outsize stamp on the judiciary. When Democrats regain power, if they follow the same playbook and systematically appoint outspoken liberal judges, the appeals courts will end up as ideologically split as Congress is today.
Appeals Court Partly Reinstates Trump's New Travel Ban — A federal appeals court in California on Monday allowed President Trump’s latest travel restrictions to partly take effect, ruling that the government can bar entry to people who come from six majority-Muslim countries and who lack ties to the United States, thus handing the administration a momentary victory.In a two-paragraph order, a panel of three judges from the United States Court of Appeals for the Ninth Circuit in San Francisco ruled on the administration’s request to block a lower court’s decision, from a federal judge in Hawaii, that prevented the latest travel policy from being implemented. The appeals panel on Monday upheld that ruling for people with a “bona fide relationship” with close family or an entity in the United States, like a university or company. But the court blocked the lower court’s decision for people from the six countries without such ties, meaning they can now be kept from entering the United States. The restrictions will apply to travelers from Chad, Iran, Libya, Somalia, Syria and Yemen. The latest ban also blocks travel by certain Venezuelan government officials and most North Koreans; courts have not stopped the administration from enacting the restrictions on those countries. Lauren Ehrsam, a spokeswoman for the Justice Department, said on Monday: “We are reviewing the court’s order, and the government will begin enforcing the travel proclamation consistent with the partial stay.” She added that the administration, which continues to appeal the lower court’s ruling, believes that the ban “should be allowed to take effect in its entirety,” regardless of whether someone has a tie to the United States. It is unclear how many people who enter the United States have ties to the country. In general, people who come with an immigrant visa have a familial relation that enabled them to qualify for a green card, or legal permanent residency, but those who come for vacation or medical care would not.
Tread carefully on immigration, tax reforms: B of A chief - Bank of America CEO Brian Moynihan warned Monday that tightening U.S. immigration restrictions in an already tight labor market could undermine some of the gains from federal tax cuts.Less population growth means less economic growth, and immigration delivers a faster boost to labor and consumption than waiting for the current populace to produce more kids. “People miss that nuance when they talk about how we’re going to grow,” Moynihan said at the Risk Management Association’s annual conference in Boston, where he addressed a number of economic and regulatory challenges that lie ahead. “If you look at other countries in the world that struggle with growth in developed economies, they have one thing in common, and their populations aren’t growing.” On tax reform, Moynihan said congressional efforts have been promising and the possibility of a lower corporate tax rate has been good for business sentiment. However, he also acknowledged the tough realities of making tax reform happen, especially from a fiscal perspective. “Now the question’s going to be, how do you balance all the constituencies? If you think about it from a corporate America standpoint, it’s good,” he said. But “at the end of the day, if you lower rates, you’re going to have less [federal] revenue and that makes the [budget-related] trade-offs tough.”On the international front, he pointedly criticized Brexit, saying that the fallout is “just not good.” “There’s not one customer who’s going to get something better or more important because of Brexit,” Moynihan said. “It’s a lot of work that will take a long time to figure out and there are no rules. It’s never been done before, so nobody knows what the rules are. At the end of the day, the citizens of Europe and the U.K. are not going to get any benefit out of this.”
Donald Trump believes US intelligence claims Russia meddled in election, but slams Putin ‘haters’ - Donald Trump said Sunday he backed US intelligence agencies who concluded that Russia meddled in the 2016 US presidential election, but repeated his trust in the sincerity of Vladimir Putin’s denials and slammed critics of his relationship with the Russian leader.Key former Trump aides are under US investigation for possible collaboration with the Kremlin and the issue of whether Moscow interfered with last year’s vote has overshadowed the tail end of the president’s ongoing Asia tour. Trump returned to the subject in an early morning Twitter storm, which also saw him take a sarcastic dig at North Korea’s “short and fat” leader Kim Jong-un.Addressing a press conference in Hanoi, Trump was asked to clarify comments he had made on Air Force One the day before about Putin’s insistence that Moscow had never tried to affect the outcome of the US vote.“I believe he feels he and Russia did not meddle in the election,” Trump said. “As to whether or not I believe it or not, I’m with our agencies. I believe in our … intelligence agencies,” he added. In May, US intelligence chiefs told Congress they agreed with their analysts’ conclusion that Russia had interfered in the election.CIA director Mike Pompeo, who was appointed by Trump, said he still believed in that evaluation in a statement to CNN Saturday.Earlier Sunday, Trump tweeted that only “haters and fools” can’t see the benefits of a good relationship with Russia. “Every time he sees me he says, ‘I didn’t do that,’ and I really believe that when he tells me that, he means it,” the US president said Saturday after meeting the Russian leader briefly on the sidelines of the Asia-Pacific Economic Cooperation (Apec) summit in Vietnam. “I think he is very insulted by it, if you want to know the truth. Don’t forget. All he said was he never did that, he didn’t do that. I think he is very insulted by it, which is not a good thing for our country,” Trump told reporters.
Trump Says Putin's Denials of Election Meddling Are Sincere - Donald Trump said he believes Vladimir Putin’s repeated denials of having meddled in the 2016 U.S. presidential election were sincere, and that only "haters and fools” can’t see the benefits of a good relationship with Russia.“Every time he sees me he says, ‘I didn’t do that,’ and I really believe that when he tells me that, he means it,” the U.S. president said Saturday after meeting the Russian leader briefly on the sidelines of the Asia-Pacific Economic Cooperation summit in Vietnam.“I think he is very insulted by it, if you want to know the truth. Don’t forget. All he said was he never did that, he didn’t do that. I think he is very insulted by it, which is not a good thing for our country,” Trump told reporters aboard Air Force One en route to Hanoi. “You can only ask so many times.”Trump instead called the accusations about Russia, which have triggered a special counsel investigation and several Congressional probes, “an artificial Democratic hit job” that make it harder to resolve diplomatic issues. “When will all the haters and fools out there realize that having a good relationship with Russia is a good thing, not a bad thing. There always playing politics - bad for our country. I want to solve North Korea, Syria, Ukraine, terrorism, and Russia can greatly help!” he later wrote on Twitter.
Trump on Putin Election Meddling Denials: He ‘Means It’ - President Donald Trump said Saturday he believes Russian President Vladimir Putin “means it” when he denies meddling in last year’s U.S. presidential election. He also said Chinese President Xi Jinping is “more powerful” than Mao Zedong, one of the most influential figures of the 20th century.Trump said he again asked Putin on the sidelines of a summit of powerful Pacific Rim countries if Russia meddled in the election. Putin again denied it — but the president did not tell reporters traveling with him aboard Air Force One if he warned Putin to cease such tactics. “I just asked him again. He said he … absolutely did not meddle in our election, he did not do what they are saying he did,” Trump said. “You have President Putin very strongly, vehemently says he has nothing to do with that. Now, you are not going to get into an argument, you are going to start talking about Syria and the Ukraine.”“And I believe — I really believe — that when he tells me that, he means it,” Trump said of the Russian leader’s denials. “But he says, ‘I didn’t do that.’ I think he’s very insulted by it, if you want to know the truth.”Trump referred to the ongoing Justice Department and congressional Russia investigations as an “artificial barrier” erected by Democrats in an attempt to sabotage his efforts to warm relations with the Kremlin. “Russia could really help us and the Democrats wanted to have a good relationship with Russia but they couldn’t do it because they didn’t have the talent, they didn’t have the chemistry to do it, they didn’t have what it takes,” the president said. “That would be great for both countries. And it would take a lot of danger out of this world. … Having a great relationship or even a good relationship with the president of Russia — Hillary [Clinton] tried it, she failed, nobody mentions it.”Trump made clear he would rather talk to Putin about forming better U.S.-Russian relations and working on common problems such as the situation in Syria.
Donald Trump Jr. confirms communicating with WikiLeaks -- Donald Trump Jr. on Monday confirmed he communicated with WikiLeaks during his father’s U.S. presidential campaign.“Here is the entire chain of messages with @wikileaks (with my whopping 3 responses) which one of the congressional committees has chosen to selectively leak. How ironic!” Trump Jr. wrote on Twitter.His disclosure came after a report in the Atlantic on Monday evening that published some of his messages. His lawyers had turned over his messages to congressional investigators as lawmakers continue to probe allegations of collusion between President Donald Trump’s campaign and the Russian government.The private exchanges began in September 2016. According to the screen shots shared by Trump Jr., the president’s eldest son did not respond to most of the inquires from WikiLeaks. Senior members of the U.S. intelligence community have accused WikiLeaks of being a stooge for the Russian government by publishing hacked emails from John Podesta during the campaign. Podesta was then Hillary Clinton’s campaign chairman.
Donald Trump Jr. was definitely in cahoots with WikiLeaks. - On October 14, 2016, as talk of Russian interference in the election was heating up, Mike Pence dismissed the growing controversy. Asked by Fox News’s Steve Doocey if the Trump campaign was “in cahoots with WikiLeaks,” Pence insisted there was nothing going on. “Nothing could be further from the truth,” Pence replied. “I think all of us have had concerns about WikiLeaks over the years and it’s just a reality of life today.” But a month earlier, Trump Jr. exchanged the first of three direct messages with WikiLeaks, according to a report by Julia Ioffe at The Atlantic. Over the course of these exchanges, WikiLeaks drew Trump Jr.’s attention to an anti-Trump website, an article about Hillary Clinton wanting to “drone” Julian Assange, and to new emails the group had released from John Podesta. Trump Jr. tweeted about these emails 15 minutes after the DM was sent. WikiLeaks also asked Trump Jr. to leak a copy of his father’s tax return to combat the perception that WikiLeaks was in the tank for Trump. These exchanges are important for a few reasons. Notably, they show communication and something approaching coordination between WikiLeaks and the Trump campaign (Trump Jr. reportedly informed most of the campaign’s top officials of the exchanges, effectively infecting his father’s entire team). As Ioffe points out, Trump Jr. “mostly ignored the frequent messages from WikiLeaks,” but “he at times appears to have acted on its requests.” These exchanges occurred amidst widespread suspicion that WikiLeaks was publishing emails that had been obtained by Russian actors, but that subject never comes up. What these emails don’t show, however, is significant coordination between WikiLeaks and the Trump campaign. While it’s clear that WikiLeaks was trying to coordinate, Trump Jr. only bit a few times, and mostly on relatively insignificant issues.
Christopher Steele believes his dossier on Trump-Russia is 70-90% accurate -- Christopher Steele, the former British intelligence officer who compiled an explosive dossier of allegations of collusion between the Trump campaign and the Kremlin, believes it to be 70% to 90% accurate, according to a new book on the covert Russian intervention in the 2016 US election. The book, Collusion: How Russia Helped Donald Trump Win, by the Guardian journalist Luke Harding, quotes Steele as telling friends that he believes his reports – based on sources cultivated over three decades of intelligence work – will be vindicated as the US special counsel investigation digs deeper into contacts between Trump, his associates and Moscow. “I’ve been dealing with this country for 30 years. Why would I invent this stuff?” Steele is quoted as saying. One of the reasons his dossier was taken seriously in Washington in 2016 was Steele’s reputation in the US for producing reliable reports on Russia, according to Harding’s book. Between 2014 and 2016, he authored more than a hundred reports on Russia and Ukraine, which were commissioned by private clients but shared widely within the state department and passed across the desks of the secretary of state, John Kerry, and the assistant secretary Victoria Nuland, who led the US response to the annexation of Crimea and the covert invasion of eastern Ukraine. The sources for those reports were the same as those quoted in the dossier on Trump, which included allegations that the Kremlin had personally compromising material on the US president, including sex tapes recorded during a trip to Moscow in 2013, and that Trump and his associates actively colluded with Russian intelligence to influence the election in his favour. Years earlier, Steele shared the results of his investigation of the global football organisation, Fifa, with a senior FBI official in Rome; that led to an investigation by US federal prosecutors, and ultimately the arrest of seven Fifa officials. “The episode burnished Steele’s reputation inside the US intelligence community and the FBI. Here was a pro, a well-connected Brit, who understood Russian espionage and its subterranean tricks. Steele was regarded as credible,” Harding writes.
The Atlantic’ Commits Malpractice, Selectively Edits To Smear WikiLeaks -- Everyone was buzzing about the shocking, bombshell new report by The Atlantic yesterday, which revealed that Donald Trump Jr. and the WikiLeaks Twitter account had engaged in a “largely one-sided” conversation in private messages over the course of several months. Don Jr. actually comes off looking fairly normal in the report, while WikiLeaks comes off looking weird and sleazy in a way that will likely damage its reputation even further than the mainstream media campaign to smear the outlet already has. WikiLeaks is seen asking for favors Trump never fulfilled, making recommendations Trump Jr. didn’t act upon, and asking for leaks Trump Jr. never gave them, which when you step back and think about it are actually fairly normal things for a leak outlet to do, all things considered. But the following passage from the Atlantic report makes the whole thing look far darker: It is the third reason, though, Wikileaks wrote, that “is the real kicker.” “If we publish them it will dramatically improve the perception of our impartiality,” Wikileaks explained. “That means that the vast amount of stuff that we are publishing on Clinton will have much higher impact, because it won’t be perceived as coming from a ‘pro-Trump’ ‘pro-Russia’ source.” See that full stop at the end of the last sentence there? That’s journalistic malpractice. We learned this when Donald Trump Jr. published the entirety of his private messages with WikiLeaks in response to the Atlantic article: SCOOP: Turns out Donald Trump, Jr. corresponded with Wikileaks during the 2016 presidential campaign. My latest. https://t.co/pVGEBqmB9O @juliaioffe .. Incredible. The Atlantic edited "Trump Jr" DM story to reverse its meaning even removing "that the Clinton campaign is constantly slandering us with" right after "pro-Russia". Full text changes everything. https://t.co/8pNUF1xW23 — @JulianAssange .. Here is the entire chain of messages with @wikileaks (with my whopping 3 responses) which one of the congressional committees has chosen to selectively leak. How ironic! 1/3 — @DonaldJTrumpJr
We Knew Julian Assange Hated Clinton. We Didn’t Know He Was Secretly Advising Trump - The revelation that WikiLeaks secretly offered help to Donald Trump’s campaign, in a series of private Twitter messages sent to the candidate’s son Donald Trump Jr., gave ammunition to the group’s many detractors and also sparked anger from some longtime supporters of the organization and its founder, Julian Assange. One of the most high-profile dissenters was journalist Barrett Brown, whose crowdsourced investigations of hacked corporate documents later posted on WikiLeaks led to a prison sentence. Brown had a visceral reaction to the news, first reported by The Atlantic, that WikiLeaks had been advising the Trump campaign. In a series of tweets and Facebook videos, Brown accused Assange of having compromised “the movement” to expose corporate and government wrongdoing by acting as a covert political operative. Brown explained that he had defended WikiLeaks for releasing emails hacked from the Democratic National Committee, “because it was an appropriate thing for a transparency org to do.” But, he added, “working with an authoritarian would-be leader to deceive the public is indefensible and disgusting.” He was particularly outraged by an Oct. 21, 2016 message, in which Assange had appealed to Trump Jr. to let WikiLeaks publish one or more of his father’s tax returns in order to make his group’s attacks on Hillary Clinton seem less biased. “If we publish them it will dramatically improve the perception of our impartiality,” the Assange-controlled @Wikileaks account suggested. “That means that the vast amount of stuff that we are publishing on Clinton will have much higher impact, because it won’t be perceived as coming from a ‘pro-Trump’ ‘pro-Russia’ source, which the Clinton campaign is constantly slandering us with.”
How to Instantly Prove (Or Disprove) Russian Hacking of U.S. Election-- It’s newsworthy that CIA head Mike Pompeo recently met with Bill Binney – who designedthe NSA’s electronic surveillance system – about potential proof that the DNC emails were leaked rather than hacked.It’s also noteworthy that the usual suspects – Neocon warmongers such as Max Boot – havetried to discredit both Binney and Pompeo.But there’s a huge part of the story that the entire mainstream media is missing …Specifically, Binney says that the NSA has long had in its computers information which can prove exactly who hacked the DNC … or instead prove that the DNC emails were leaked by a Democratic insider.Remember – by way of background – that the NSA basically spies on everyone in America … and stores the data long-term. After the story of Pompeo’s meeting with Binney broke, Binney told Washington’s Blog:Here’s what they would have from the programs you list [i.e. NSA’s Fairview,Stormbrew and Blarney spying programs, which Edward Snowden revealed] plus hundreds if not thousands of trace route programs embedded in switches in the US and around the world.First, from deep packet inspection, they would have the originator and ultimate recipient (IP) of the packets plus packet series 32 bit number identifier and all the housekeeping data showing the network segments/path and time to go though the network. And, of course, the number of packet bits. With this they would know to where and when the data passed.From the data collection, they would have all the data as it existed in the server taken from. That’s why I originally said if the FBI wanted Hillary’s email, all they have to do is ask NSA for them.All this is done by the Narus collection equipment in real time at line rates (620 mbps [mega bits per second,] for the STA-6400 and 10 gbps [giga bits per second] for the Insight equipment).
Dollar Slammed, USDJPY Roils On Trump Campaign Subpoena Report - It has been a rocky session for the dollar which has dumped to a 4-week low, dragging with it USDJPY, the Nikkei and Treasury yields - and to a lesser extend US equity futures - all of which have slumped in the Japanese am session, following a WSJ report that Robert Mueller’s team "caught the Trump campaign by surprise" in mid-October by issuing a document subpoena to more than a dozen top officials.The campaign had previously been voluntarily complying with the special counsel’s requests for information, and had been sharing with Mr. Mueller’s team the documents it provided to congressional committees as part of their probes of Russian interference into the 2016 presidential election. The Trump campaign is providing documents in response to the subpoena on an “ongoing” basis, the person said.If confirmed, this would be the first time Trump’s campaign has been ordered to turn over information to Mueller’s investigation, even if subpoena has not - for now - compelled any officials to testify before Mueller’s grand jury.
Trump to Pay His Own Legal Bills, Set Up Fund to Cover Staff -- President Donald Trump has started paying his own legal bills related to the Russia probe, rather than charging them to his campaign or the Republican National Committee, and is finalizing a plan to use personal funds to help current and former White House staff with their legal costs. The Office of Government Ethics and a tax firm are working on a mechanism for Trump to contribute to staffers’ legal bills that would meet regulatory and ethical standards, White House lawyer Ty Cobb said in an interview. The White House is hoping the issue will be resolved shortly, said Cobb, who declined to elaborate further on the details of the plan. While there is no law barring a president from giving gifts to those who report to him, Trump’s case raises unique questions about whether his contributions could influence the testimony of staffers, said Walter Shaub, former head of the Office of Government Ethics who has criticized the president over other conflicts of interest. Cobb said the White House is aware of the ethical questions and has been taking steps to address them in recent weeks. "The president has assumed responsibility for his own legal fees and while he isn’t involved directly in the creation of a mechanism to take care of staffers, it is important to him that they be taken care of and whatever approach is agreed upon by OGE and relevant tax authorities be bulletproof," said Cobb. It is possible, however, that the final plan ethics and tax officials come up with to cover White House staff legal costs wouldn’t allow for Trump to make a contribution, said a person familiar with the process.
Sessions Considers Appointing Special Council To Investigate Clintons - With Special Counsel Robert Mueller reportedly preparing to make another round of arrests in his probe into the Trump campaign’s efforts to “collude” with Russia, House and Senate Republicans - not to mention President Donald Trump - will be thrilled to learn that Attorney General Jeff Sessions might soon appoint a second special counsel to investigate allegations of corruption and self-dealing involving several prominent Democrats and Obama-era officials, including Bill and Hillary Clinton. According to the Washington Post, Attorney General Jeff Sessions is entertaining the idea of appointing a second special counsel to investigate alleged wrongdoing by the Clinton Foundation and the controversial sale of a uranium company to Russia. A letter obtained by WaPo shows Sessions directed senior federal prosecutors to explore at least some of these matters and report back to him and his top deputy, Rod Rosenstein, as to whether the DOJ should follow up with a full-blown investigation. For months now, President Trump has encouraged Sessions to appoint a special prosecutor to investigate the Clintons. Those calls grew louder - and were joined by several senior Republicans in Congress - after it was revealed that the DNC and the Clinton campaign jointly financed the infamous “Trump dossier” - which contained several salacious claims that the FBI reportedly used to justify launching the original investigation into collusion between the Trump camp and Russia back in July 2016.
Appointing a second special counsel could rattle Justice Department- WaPo - Attorney General Jeff Sessions’s public suggestion that he may appoint a special counsel to investigate Hillary Clinton has alarmed current and former Justice Department officials who fear he will further politicize the embattled agency. Sessions said at a congressional hearing Tuesday that he will weigh recommendations from senior prosecutors on whether to appoint a special counsel over a 2010 uranium company deal and other issues, including donations to the Clinton Foundation. Such an appointment could give President Trump and Republicans a political counterweight to the ongoing work of special counsel Robert S. Mueller III, who is probing whether any Trump associates coordinated with the Russian government to interfere in last year’s presidential election. For that reason, Sessions’s suggestion has raised fresh questions about the independence of the Justice Department in the Trump administration. “To have the winning side exploring the possibility of prosecuting the losing side in an election — it’s un-American, and it’s grotesque,” said John Danforth, a former special counsel who investigated the FBI’s role in a violent standoff with a cult in Waco, Tex. “The proliferation of special counsels in a political setting is very, very bad.”
AP Explains: What’s the deal with the Uranium One deal? — The sale of Uranium One, a Canadian firm with rights to mine U.S. uranium, to a Russian company is in the news again with the Department of Justice signaling it could appoint a special counsel to look into the matter. President Donald Trump and his supporters have criticized the deal and suggested former Secretary of State Hillary Clinton may be implicated in wrongdoing. Russia's nuclear energy agency Rosatom acquired a majority stake in Uranium One in 2010 and bought the remainder of the company in 2013. Because Uranium One had holdings in American uranium mines, which at the time accounted for about 20 percent of America's licensed uranium mining capacity, Rosatom's 2010 purchase had to be approved by the Committee on Foreign Investment in the United States. That committee, known as CFIUS, is made up of officials from nine federal agencies, including the State Department, which Clinton ran at the time. Other agencies represented on the committee include the departments of Treasury, Defense, Commerce, Energy and Homeland Security and the Office of the U.S. Trade Representative. Trump and his supporters have accused Clinton of overseeing the sale of 20 percent of America's uranium supply to Russia. They see her alleged role as a scandal, particularly amid charges the Trump campaign colluded with Russia in the 2016 presidential election. Allegations have also been made that the approval of the sale of Uranium One benefited major donors to the Clinton Foundation, raising conflict-of-interest questions. The Rosatom-Uranium One deal did not sell 20 percent of America's uranium to Russia. The 20 percent figure cited by critics reflects only licensed uranium mining capacity in the U.S. at the time of the sale, not total uranium reserves or even actual production. And without a specific license to export uranium from Uranium One's mines, which it did not have at the time, Rosatom would not be able to send it to Russia or elsewhere.
Informant in GOP uranium probe identified as ex-lobbyist -- The former federal informant at the center of the Senate GOP probe into former Secretary of State Hillary Clinton's role in the Obama-era sale of a uranium company was identified Thursday as an ex-lobbyist for a Russian firm.The former lobbyist, William Campbell, told Reuters he's the secret witness in the investigation into the 2010 sale of Canada-based Uranium One to Russia's Rosatom. He is planning to testify and give Congress documents about the sale, he told Reuters.Despite the focus on Campbell and calls for him to be allowed to testify to Congress, two law enforcement officials speaking to Reuters expressed doubt that Campbell could provide meaningful information about the Uranium One deal. The officials, who worked in the Rosatom bribery case, said they don't remember Campbell ever bringing up the Uranium One sale when they spoke with him. According to the publication, Campbell worked as an FBI source for an investigation into the head of a U.S. unit of Rosatom, the Russian state-owned nuclear power company. Campbell reportedly told Reuters he wants to testify, citing activities of Russians in the U.S. "This latest iteration is simply more of the Right doing Trump's bidding for him to distract from his own Russia problems," said Clinton spokesman Nick Merrill.The Uranium One sale and the Rosatom case in which Campbell was a part did not involve the same business units or executives, according to Reuters.“I have worked with the Justice Department undercover for several years, and documentation relating to Uranium One and political influence does exist and I have it,” Campbell said, according to Reuters.
China approves Donald Trump-branded spas, escort services, hotels and massage parlours without US Congress permission - Chinese authorities have granted preliminary approval for dozens of Trump-branded businesses, expanding his commercial empire and raising further conflicts of interest, say lawyers. The 38 trademarks include new hotels, spas, escort and concierge services, massage parlors, personal security services and insurance, according to public documents. The President’s lawyers applied for the trademarks in April last year, at the same time the then Presidential candidate Trump was accusing China of "ripping off" the US and deliberately manipulating its currency to its own advantage. If there is no objection, the trademarks will be formally registered after 90 days. Ethics lawyers argue that if the Trump trademarks receive any special treatment due to their association with the President, it would violate the US Constitution, which prohibits those in public office from accepting anything of value from foreign governments, unless they are approved by Congress.Congress has not approved the China trademarks. Norm Eisen, who served as chief ethics lawyer for former President Barack Obama, told The Independent that the initial registration of a long-denied Trump trademark "certainly seems to run afoul of the foreign emoluments clause" of the US Constitution."I anticipate that these issues will enter into our litigation," he said."When Trump is profiting from these valuable Chinese benefits [...], how can we be sure he will advance US interests in his engagements with that country, for example by staunching the flow of American jobs out from the US to China?"
Let’s ensure regulators target the real perpetrators of screw-ups - Banking regulators are often thrust into the forefront of decisions regarding accountability, ferreting out the root cause of problems and the individuals responsible, and determining if a problem is idiosyncratic to one institution or systemic to the entire industry. Over the past six years, there were two significant changes in financial industry accountability for breaches of law or regulation. The first is the level of fines and penalties levied against institutions increased dramatically during that time frame, frequently exceeding $1 billion for a single infraction for the largest banks. For the mortgage foreclosure problems that arose out of the financial crisis, the 19 largest banks incurred fines and penalties that exceeded $150 billion, in excess of 10% of their cumulative capital. This is in addition to tens of billions in losses incurred on defaulted mortgages and additional billions spent to fix operational problems and comply with new regulations. But regulators soon recognized that fines, penalties and litigation costs were becoming a significant drain on financial institutions’ financial results, even hampering an institution’s safety and soundness. Restitution to aggrieved customers was viewed as both critical and sacrosanct. However, there was a longstanding concern related to fines and penalties: Were regulators simply punishing innocent shareholders and employees, many of whom had already suffered investment or job losses, or both, as a direct result of malfeasance by certain individuals or small groups of individuals? Should we not be holding truly culpable individuals more accountable versus hyperinflated punishment for institutions? Thus, the second significant change in accountability was holding individuals responsible for gross negligence or individual malfeasance. As a result of changes in proposed compensation rules under the Dodd-Frank Act, banks were required to implement deferred compensation and make it subject to clawback in the event of the later discovery of bad behavior beyond normal errors or mistakes in judgment. Individuals could now be held more accountable for severe negligence or unlawful or unethical behavior. The industry responded fairly swiftly, with boards taking actions well ahead of those proposed rules being finalized at the very end of 2016.
Cheat sheet: Inside Crapo’s reg relief deal with Democrats — Senate Banking Committee Chairman Mike Crapo has cut a deal with several moderate Democrats to amend the Dodd-Frank Act and provide regulatory relief to financial institutions, the Idaho Republican announced Monday. On the one hand, the deal is liable to be greeted warmly by industry representatives who have fought for a relief bill for several years. But it is more modest than many expected and fails to provide the sweeping relief many institutions had hoped for. At the very least, however, it is a bill capable of passing the Senate. Republicans need eight Democrats on board to support the measure — and the announcement on Monday makes it clear that they have at least nine, including Sens. Heidi Heitkamp of North Dakota, Jon Tester of Montana, Joe Donnelly of Indiana and Mark Warner of Virginia. “A strong and vibrant economy is important for American consumers, businesses, and the stability of the financial sector,” Crapo said in a press release. “The bipartisan proposals on which we have agreed will significantly improve our financial regulatory framework and foster economic growth by right-sizing regulation, particularly for smaller financial institutions and community banks. I thank all of the senators who have joined with us to move this forward, and look forward to continuing our work to achieve a robust, bipartisan legislative product.”Among other things, the legislation would amend the Dodd-Frank’s $50 billion systemically important financial institution threshold, raising it to $250 billion, and make a number of legislative changes to mortgage regulations and capital formation. Following is a guide to what’s in the deal. Perhaps the biggest element of the relief deal is that it would quintuple the systemic threshold for banks, to $250 billion. Banks with assets of $50 billion to $100 billion would be immediately exempt from enhanced standards after the bill is signed. Bank holding companies with assets of $100 billion to $250 billion would be exempt 18 months after enactment. The bill says that the Federal Reserve Board would still be allowed to conduct periodic stress tests for banks above $100 billion and have the authority to apply or suspend enhanced standards.
Winners and losers of Senate reg relief bill | American Banker - Senate Banking Committee Chairman Mike Crapo cut a deal with moderate Democrats on Monday to amend the Dodd-Frank Act, the most significant change to the 2010 law since its passage. With nine Democrats, including Sens. Jon Tester of Montana and Mark Warner of Virginia, and nine Republicans as co-sponsors, it likely has enough support to pass the Senate. But the GOP are still hard at work trying to pass a tax reform bill and it’s unclear how quickly Senate Majority Leader Mitch McConnell, R-Ky., will want to bring the legislation up for a vote. The broad bipartisan support comes at a cost to financial institutions. The overall bill is modest, mostly benefiting community banks and credit unions, and it doesn't make any changes to the Consumer Financial Protection Bureau's structure or powers, as many banks and credit unions have sought. But it does include a number of narrower proposals that have received bipartisan support and taken together could be beneficial to many institutions. Since its passage in 2010 Dodd-Frank has remained largely unchanged and regulators have spent the majority of the last seven years implementing the financial reform law. The deal reached on Monday will take steps to roll back parts of the law, which is now possible because President Trump will sign bills that ease regulation.Despite passing a much further-reaching proposal to overhaul Dodd-Frank earlier this year, the House is likely to agree to the Senate deal. Because of filibuster rules and a narrow majority in the Senate, any changes to Dodd-Frank will need Democratic support. Details of the bill can be found here, but arguably its biggest feature is that it would raise the systemic threshold to $250 billion of assets from its current $50 billion level. That will benefit dozens of banks - but leaves others out in the cold. Following is a guide to who wins - and who loses - under the plan: (12 slides)
A bank’s activities, not its assets, should decide regulatory status - Thomas M. Hoenig - United States: commercial banks and universal banks. Their differences are significant and should not be ignored as Congress works to recalibrate the regulatory regime. True commercial banks, even the largest among them, confine their activities to the traditional commercial banking business model and have a dramatically smaller financial footprint. They also have, on average, 200 basis points more tangible equity capital funding their activities. Universal banks, in addition to their sheer size, are global in reach and are highly interconnected. They engage in not only commercial banking but also investment banking and broker-dealer operations. They are the primary sellers of credit protection as reflected in their level of trading and derivatives liabilities, and they have substantial interaction with the capital markets through their fiduciary, global custody and safekeeping arrangements. The financial footprint of universal banks illustrates that they are undoubtedly systemically important financial institutions deserving of enhanced prudential standards and oversight. The first chart here, for example, shows that universal banks have both on- and off-balance-sheet exposures that overshadow the rest of the industry. All but two of the universal banks at the top of the chart are global systemically important banks (G-SIBs). The top four each have individual footprints exceeding U.S. GDP of $18 trillion, as illustrated in the second chart. G-SIBs have trading activities measuring 20.7% on average, while trading activities comprise only 1.3% of assets of the largest regional commercial banks. The G-SIBs with their universal bank models are typically global market makers dealing in a cadre of financial contracts, many that are complex and opaque. Some of these G-SIBs on a standalone basis have trading activities equal to 40% or more of total assets. Many of the Dodd-Frank Act regulations and enhanced prudential standards were rightly established to constrain the impact of universal banking on the public safety net and to address the concerns that the U.S. G-SIBs are "too big to fail" and "too complex to fail.” However, because the remaining institutions in the industry — with their simpler commercial bank business model — hold significantly less than 10% of their assets in trading activities and maintain tangible capital of approximately 8%, they are less of a systemic threat to the economy. As I’ve long advocated, regulation should focus on the business model rather than arbitrary asset-size thresholds, and the distinct differences between commercial and universal banks, as illustrated by their financial footprint, call for such an approach. To this end, the effort to adjust the regulatory reach of Dodd-Frank should include extending relief to regional banks that are principally engaged in traditional commercial banking activities.
Senate confirms Joseph Otting to lead the Office of the Comptroller of the Currency - — The Senate on Thursday confirmed Joseph Otting 54-43 to be the next comptroller of the currency. The former OneWest executive will take the reins from acting Comptroller Keith Noreika, who has made waves since being appointed in May as a special government employee to lead the agency. Most Democrats opposed Otting’s confirmation because of his role at OneWest, which earned a reputation as a foreclosure mill during the financial crisis. Because of recent changes in Senate rules, however, Republicans did not need to attract any Democratic votes to approve Otting. Still, two Democrats crossed the aisle to vote in favor of his nomination (others either were not present or abstained). During a July nomination hearing, Otting said his experience as chief executive of OneWest was an asset rather than baggage. Steven Mnuchin, now the Treasury secretary, led an investor group in 2009 that acquired the assets of the failed IndyMac, which was taken over by the Federal Deposit Insurance Corp. as the housing market collapsed in 2008. Mnuchin started OneWest and hired Otting as CEO. “We were the first to offer principal forgiveness. We lowered interest rates and we modified payments and moved principal to the back, so people could afford their homes,” Otting said of his experience at OneWest, which became an incubator for the Treasury Department’s mortgage modification program. However, critics including Sen. Sherrod Brown, D-Ohio, said Otting and Mnuchin got a sweetheart deal and needlessly foreclosed on homeowners. The crisis “was an opportunity to profit by flipping failing banks bought at rock-bottom prices, and foreclosing on working families, all while raking in taxpayer dollars,” Brown said during the nomination hearing. Otting is likely to follow a blueprint released in June by the Treasury to reform the financial system. It is unclear, however, whether Otting will be as supportive of creating a bank charter for technology companies as Noreika, who expanded on an effort started by former Comptroller Thomas Curry to create a “fintech” charter.
Treasury details overhaul of nonbank SIFI supervision process - The Treasury Department detailed its vision Friday for how and when federal agencies should use their powers to subject nonbanks to enhanced regulatory scrutiny. The 68-page report calls on the interagency Financial Stability Oversight Council, which Treasury Secretary Steven Mnuchin chairs, to prioritize activities-based or industrywide designations rather than singling out individual firms. It also called on the FSOC to revise its approach to designating risks in several ways, such as by formally requiring a cost-benefit analysis of any designation, amending its assessments for the transmission of risk and asset liquidation to be “more rigorous, clear, and comprehensible,” and involve any companies in question earlier during the designation process. Additionally, the report suggests a few structural changes to the designation process. The Treasury said the FSOC should reduce the number of predesignation review stages from three to two, and asked Congress to extend the statutory deadlines for companies under consideration for designation to 60 days from 30, and for the council to make a final determination after such a hearing to 90 days from 60. "In our recommendations we identify several ways to improve FSOC’s processes for designating nonbanks and financial market utilities," Mnuchin said. Treasury developed the report as part of President Trump’s April 21 executive order calling for a review of the FSOC’s process for designating nonbank firms as systemically important financial institutions. That order asked the Treasury to review several aspects of the designation process, including whether the designation processes were sufficiently transparent, whether the council appropriately considered costs and what recommendations it would make to Congress to change the statutory authorities related to nonbank designation. In addition to its discussions on the processes for nonbank SIFI designation, the report also discusses changes the council should make to its designation of financial market utilities — market intermediaries like derivatives exchanges and clearinghouses.
U.S. Treasury Becomes a Laughing Stock - Pam Martens - U.S. Treasury Secretary Steven Mnuchin appears to have inaugurated a perpetual bring your wife to work day. It’s become so farcical that it frequently feels like the United States Treasury Department has morphed into a low-budget, badly scripted reality TV show where the female star is so out-of-touch that she must continually scurry about in her haute couture erasing the haughty things she has written about the little people on multiple continents. We’ll get to that shortly, but first some background: It all started back on January 19 when actress and then fiancée Louise Linton sat by her man during his Senate Finance Committee confirmation hearing to become U.S. Treasury Secretary. Mnuchin was confirmed by a slim margin of votes in the Senate, 53-47, along party lines, with all Republicans voting for him and all Democrats voting against him, except for Senator Joe Manchin of West Virginia, who voted yes. Linton was also there peeking over the shoulder of her husband on May 18 of this year as Mnuchin faced a grilling from members of the Senate Banking Committee. Senator Elizabeth Warren called his testimony “bizarre,” “crazy,” and “like something straight out of George Orwell.” Linton’s trips on official business with her husband went viral in August when she bragged in an Instagram post about her designer clothing as she disembarked with him from a U.S. chartered plane. Linton flaunted her #hermes, #valentino, #roulandmouret, and #tomfordsunnies attire. When a female reader responded in a post: “glad we could pay for your little getaway,” Linton berated her in a subsequent post for being “adorably out of touch,” and bragging about how much more in taxes Linton and her husband pay. After effusive apologies over her indelicate diatribe and an erasure of the Instagram post, just three months later Linton has again become a viral meme on the Internet. This past Wednesday, Linton accompanied her husband on official business to the Bureau of Engraving and Printing as he inspected the first run of new $1 bills with his signature as U.S. Treasury Secretary. Linton got herself into photos from the event helping her husband hold an uncut sheet of money and bizarrely decked out in all black attire, including above the elbow black leather gloves and a black leather skirt. One Twitter commenter asked why she was dressed like Darth Vader while another suggested that she had become a cartoonish evil character. The truth might be even more cynical. Despite stating on her official website that a “great life passion” is “the welfare of children and animals,” the very same web page says that she is now “the inaugural Brand Ambassador for British leather goods company, Dunmore with the launch of their handbag line, ‘The Linton Collection.’”
"This Is Unprecedented": JPMorgan Slams "Stunning" $8 Billion Damage Verdict Against It --Here’s a live transmission from the Texas courtroom where JP Morgan Chase & Co’s lawyers are asking a judge to throw out one of the largest punitive judgments in legal history.....Instead, the bank's lawyers say the $8 billion judgment should be reduced to zero. “The law and evidence do not support any claim against JPMorgan, much less the unprecedented multi-billion-dollar punitive damage award, which the heirs have already admitted is unconstitutionally excessive,” the bank said in a filing in Dallas probate court according to Bloomberg. Back in September, the bank was ordered to pay at least $4 billion in punitive damages, approximately $4.7 million in actual damages, and $5 million in attorney fees after a six-person jury found that the bank committed fraud, breached its fiduciary duty and broke a fee agreement, according to court papers in its handling of the $20 million estate of former airline executive Max Hopper, who died suddenly in 2010 without a will. And - confirming that much of America does not hold Wall Street in high regard - the jurors awarded a total $8 billion in punitive damages against the bank. Hopper, who pioneered the SABRE reservation system for American Airlines, died in 2010 with assets of more than $19 million but without a will and testament, according to the statement. JPMorgan was hired as an administrator to divvy up the assets among family members. “Instead of independently and impartially collecting and dividing the estate’s assets, the bank took years to release basic interests in art, home furnishings, jewelry, and notably, Mr. Hopper’s collection of 6,700 golf putters and 900 bottles of wine,” the family’s lawyers said in the statement. “Some of the interests in the assets were not released for more than five years." The bank's incompetence caused more than just unacceptably long timelines; bank representatives failed to meet financial deadlines for the assets under their control. In at least one instance, stock options were allowed to expire. In others, Mrs. Hopper's wishes to sell certain stock were ignored. The resulting losses, the jury found, resulted in actual damages and mental anguish suffered by Mrs. Hopper. With respect to Mr. Hopper's adult children, the jury found that they lost potential inheritance in excess of $3 million when the Bank chose to pay its lawyers' legal fees out of the estate account to defend claims against the Bank for violating its fiduciary duty.
Wall Street bonuses may jump 10 percent this year: report (Reuters) - Wall Street bonuses may climb as much as 10 percent this year, in the first meaningful jump for the industry since 2013, according to a closely watched report. Bankers who advise companies on issuing stock or bonds could see an even bigger pay jump, as much as 20 percent, compensation firm Johnson Associates Inc said on Sunday. A reduced emphasis on financial regulation under U.S. President Donald Trump has boosted shares of banks to peak levels on hopes higher interest rates, lower taxes and faster economic growth under the Trump administration would lift profits. The KBW Nasdaq Bank Index, which measures the largest U.S. banks, has risen 34 percent since the election, compared with the benchmark S&P 500 index’s 24 percent gain over the same period. But looser banking regulations haven’t translated yet into better trading results amid low market volatility and tepid client activity. Wall Street firms’ bond trading revenue has fallen for about seven years amid new rules on trading and capital. Banks, including Goldman Sachs Group Inc and Morgan Stanley, that once relied heavily on trading, are now leaning more heavily on businesses like private equity and wealth management. As a result, fixed income traders are likely to see their bonuses fall as much as 10 percent, the report said.
Fidelity latest financial firm to roll out customer data sharing with fintechs - Fidelity Investments is joining the ranks of financial firms sharing customer account data with others through an application programming interface. The new service, called Fidelity Access, will give third parties access to Fidelity customers' account data for use in apps and services like tax preparation, budgeting, financial planning, spending analysis and portfolio advice — provided the Fidelity customers give their OK. Customer data to be shared includes Fidelity account balances, securities holdings, and transactions. The Boston company’s hope is that clients will stop giving out their user IDs and passwords to third parties. “In the current cyber environment, with all the breaches that have happened in the past year, we think it’s critical to get this notion of sharing IDs and passwords out of the system,” said Stuart Rubinstein, head of data aggregation at Fidelity Investments. “Many clients use the same IDs and passwords for many different sites, and as those breaches happen, they put their financial accounts at risk. Anything we can do to eliminate that and make it more secure for clients we think is important.” The move is part of a developing détente between banks and fintechs after several years of fighting over the risks and rewards of so-called screen scraping. Sharing data through APIs relieves fintechs of the worry that a bank will block them from accessing customer data, and it assures banks that data is being kept secure and that their servers won't be overwhelmed. The list of banks sharing account information through APIs includes Wells Fargo, Chase, Citibank, Capital One, Silicon Valley Bank and BBVA Compass.
Massive Ethereum breach spells opportunity for banks - A collective “I told you so!” could be heard last week from the many bankers who have steered clear of cryptocurrency wallets. A programmer messing around in the code of the digital currency wallet provider Parity Technologies killed a smart contract and vaporized between $150 million and $350 million of the digital currency Ether. The owners of the funds, many of them small businesses, are still waiting to find out if they’ll ever get their money back. “We don’t support cryptocurrency payments so it wouldn’t affect us,” said Jason Witty, the chief information security officer at U.S. Bank. “Cryptocurrencies are inherently high-risk. By definition, there’s nothing backing cryptocurrency — there’s not a big financial institution or federal bank. It’s the strength of the encryption algorithm that creates a certain number of coins, the market starts trading coins, and that creates value because people are willing to pay for them.” The volatility of bitcoin, for instance, which has risen in price from $450 to $7,000 this year, puts him off. “It’s an inherently risky thing and an inherently distributed trust model,” Witty said. “Every wallet provider has their own level of security and level of thought they’ve put into the safety of the structure they run, and it varies widely by provider.” However, if bankers don’t care today, they should in the future. Digital currency isn’t going away. The total market capitalization of the 900 digital currencies tracked by CoinMarketCap is $203 billion. That’s up from $154 billion in August. Not only are cryptocurrencies taking an ever-expanding role in the economy, but the uncertain security of digital wallets presents a lucrative opportunity for banks.The problem that crops up most often with digital currency wallets is user error — users forgetting, deleting or misplacing their passwords. This digital currency wallet password problem presents a business opportunity for financial institutions. Banks could offer custodial services through which they hold cryptocurrency account keys for customers — basically digital safe deposit boxes for digital currency keys and passwords.
Quantum Computers a Threat to Bitcoin Security - Aggarwal and co specifically examine the likelihood of a quantum computer becoming that powerful on the network. They look at the projected clock speeds of quantum computers in the next 10 years and compare that to the likely power of conventional hardware. “We find that the proof-of-work used by Bitcoin is relatively resistant to substantial speedup by quantum computers in the next 10 years, mainly because specialized ASIC miners are extremely fast compared to the estimated clock speed of near-term quantum computers,” they say. But there is a different threat that is much more worrying. Bitcoin has another cryptographic security feature to ensure that only the owner of a Bitcoin can spend it. This is based on the same mathematics used for public-key encryption schemes. The idea is that the owner generates two numbers—a private key that is secret and a public key that is published. The public key can be easily generated from the private key, but not vice versa. A signature can be used to verify that the owner holds the private key, without revealing the private key, using a technique known as an elliptic curve signature scheme. In this way, the receiver can verify that the owner possesses the private key and therefore has the right to spend the Bitcoin. The only way to cheat this system is to calculate the private key using the public key, which is extremely hard with conventional computers. But with a quantum computer, it is easy. And that’s how quantum computers pose a significant risk to Bitcoin. “The elliptic curve signature scheme used by Bitcoin is much more at risk, and could be completely broken by a quantum computer as early as 2027,” say Aggarwal and co. Indeed, quantum computers pose a similar risk to all encryption schemes that use a similar technology, which includes many common forms of encryption.
The IRS Is Puzzled: Why Out Of 500,000 Coinbase Users, Only 900 Reported Gains Or Losses - Zero Hedge - Almost exactly one year ago, the IRS realized that it could be leaving billions of dollars on the table in the form of uncollected taxes, and launched a tax-evasion probe on the largest US Bitcoin exchange, Coinbase, seeking to identify all Coinbase users in the U.S. who “conducted transactions in a convertible virtual currency” from 2013 to 2015. In a vexing paradox for cryptocurrency traders who had hoped they could avoid the IRS indefinitely as someone, somewhere once may have mentioned, the higher the price of bitcoin rose, the more motivated the IRS was to obtain access to user transaction records. Or, as Bloomberg put it, "the exploding value of the cryptocurrency since its first real-world transaction in 2010 is one reason the U.S. Internal Revenue Service is pushing to see records on thousands of users of Coinbase Inc., one of the biggest U.S. online exchanges. The company’s digital currency platform allows gains to be converted into old-fashioned dollars in transactions that the IRS alleges are going unreported." To be sure, as we have reported over the past year, Coinbase and industry trade groups are fighting back in court, claiming the government’s concerns about tax fraud are unfounded and that its sweeping demand for information is a threat to privacy. That however, did not stop the IRS which claimed in a court filing that "U.S. taxpayers, including Coinbase users, have made use of virtual currencies to avoid the reporting and payment of taxes." Whereas Coinbase had under 5 million users last November when the IRS filed its lawuist, as of last week it had 12.2 million users, deploying 41 million virtual currency wallets in 32 countries that have so far exchanged $40 billion in digital currency. The price of bitcoin hit a record high just under $8,000 at the start of November, more than 10x higher than in November 2016.The biggest problem, however, and the reason why the IRS is unlikely to relent is that as the IRS said, it detected a "reporting gap" between the 500,000 virtual currency users Coinbase reported between 2013 and 2015 and the less than 900 bitcoin users reporting gains or losses for each of those years.That would imply that less than 0.2% of coinbase users bothered to report anything on their tax forms. One can see why the IRS is angry.
The real-world impact of real-time payments | American Banker - As the banking industry moves closer to adopting a faster payments system, bank executives have begun to think through the impact it will have on clients and banks themselves. Commercial banking clients are likely to reap the biggest and most immediate benefits from the change, bank executives say, noting that real-time settlements will help businesses trim expenses. Consider the mounds of paper checks and invoices that could be eliminated — not to mention the costs associated with high-cost wire transfers.Consumers also stand to benefit. Instantaneous updates to their checking accounts will help them keep closer tabs on their spending and avoid overdrafts, executives said. For banks themselves, of course, the picture is a bit more mixed. In order to differentiate themselves in the industry and keep pace with client demands, banks have invested heavily to upgrade their technology. They also have done so with the expectation that, as clients grow more comfortable with faster payments, various sources of fees — from interchange to overdrafts and merchant acquiring — may decline over time. Bankers shared their thoughts on the impact of faster payments during an industry conference last week. The event was sponsored by The Clearing House, which last month received a green light to move forward with its real-time payments network, following an antitrust review by the Department of Justice. A Federal Reserve task force, meanwhile, has set a goal that anyone with U.S. bank account should be able to receive real-time payments by 2020. Here’s an overview of what bankers and other payments executives are expecting. (slides)
Where Do Consumers Fit in the Fintech Stack? - Lael Brainard - The new generation of fintech tools offers the potential to help consumers manage their increasingly complicated financial lives, but also poses risks that will need to be managed as the marketplace matures.1 As consumers start to rely on financial autopilots, however, it is important that they remain in the driver's seat and have a good handle on what is happening under the hood. Consumers need to know and decide who they are contracting with, what data of theirs is being used by whom and for what purpose, how to revoke data access and delete stored data, and how to seek relief if things go wrong. In short, consumers should remain in control of the data they provide. In addition, consumers should receive clear disclosure of the factors that are reflected in the recommendations they receive. If these issues can be appropriately addressed, the new fintech capabilities have enormous potential to deliver analytically grounded financial services and simplified choices, tailored to the consumers' needs and preferences, and accessible via their smartphones.2 Today, the average cardholder has about four credit cards, and the Federal Reserve Bank of New York estimates that American consumers collectively carry $785 billion in credit card debt.4 When signing up for a credit card, consumers face a bewildering array of choices. Half of consumers report that they select new cards based on reward programs, weighing "cash back" offers against "points" with their credit card provider that may convert into airline or hotel "miles," which may have varying values depending on how they are redeemed.5 In some cases, rewards may apply to specific spending categories that rotate by quarter and require that consumers re-register each term, and the rewards may expire or be forfeited under complicated terms.6
Fed study finding fault with online lending sparks backlash - A Federal Reserve study that cast the online lending industry in a negative light has become a flash point in the debate over the sector’s impact on U.S. consumers. The research released late last week drew fire from industry groups and the company that provided the data, which questioned the study’s conclusions and the methods economists at the Federal Reserve Bank of Cleveland used to arrive at them. One trade group, the Marketplace Lending Association, went so far as to say that the Cleveland Fed should retract the report. In a report titled “Three Myths about Peer-to-Peer Loans,” the authors called into question a narrative frequently told by digital lenders — that the sector’s customers typically refinance existing debt at lower interest rates, boost their credit scores and improve their financial health. Cornelius Hurley, the executive director of the Online Lending Policy Institute, said that "there is no apt comparison" between online consumer lending and subprime mortgage lending. What the researchers found instead was that consumers who turn to online loans typically end up in deeper debt, and have lower credit scores, than similarly situated consumers who do not borrow from the same companies. The study relied on data from the credit bureau TransUnion. A researcher at the Cleveland Fed said that the study was based on a subset of nonbank companies that were flagged by the Chicago-based credit bureau as marketplace lenders. But Ezra Becker, a senior vice president at TransUnion, took issue Wednesday with that claim. He said that TransUnion sent the data to the Cleveland Fed a long time ago for a different study, and that none of the data the firm provided distinguished between peer-to-peer loans, so-called fintech loans and traditional personal loans. “We have no understanding of how the Federal Reserve Bank of Cleveland could have used our data to reach the conclusions they did,” Becker said. “We need to talk with them further to better understand their methodology.” Becker added that TransUnion has conducted its own research on fintech loans, and that its findings do not align with those of the Cleveland Fed.
Online lenders shouldn’t gloss over Cleveland Fed study -- The consumer lending industry is abuzz about the Federal Reserve Bank of Cleveland’s recent report on debt consolidation and online lending. This excellent piece of research concludes that, on average, online installment loan borrowers fall into more debt after taking out a loan, experience hits to their credit score and history as a result, and take out online loans despite having access to traditional banking and credit channels. The first two conclusions are damning, especially as these loans are often marketed as a way to help consumers consolidate credit card debt and improve their finances. At the end of the day, a lender’s duty is not merely to avoid losses. Any loan must be suitable for the customer — which means it should be made only if the lender believes it is improving the customer’s financial health. A lender not guided by that principle should be prepared for severe criticism as well as elevated losses down the road. What is particularly concerning is the evidence that the credit characteristics of online installment borrowers at the time of repayment are consistently worse than they were at the time of borrowing. That should be a sobering thought for online lenders whose credit models have not been fully tested in a protracted credit downturn.The study examined three claims sometimes made by online lenders and their advocates: that P2P loans allow borrowers to refinance or consolidate credit card debt, help consumers improve credit scores, and widen access to credit for the underbanked. The authors found the opposite to be true in each case. Fintech lending advocates — led by the Marketplace Lending Association — counter that the loans examined in the study included relatively few originated by fintech “marketplace” lenders, despite the study’s use of the term “P2P” to describe the loans included in the study, and that the conclusions of the study thus don’t apply to fintech loans. This may be true. But it would be nonsensical to discredit or ignore the study because of these concerns. The study has been carefully designed and executed, using “control” consumers as well as online borrowers as the statistical basis for its analysis and conclusions, which appear well-supported by the data presented. And consumer finance lenders, whether they are called P2P lenders, online lenders, marketplace lenders or something else, are all in the same business and often use the same marketing and delivery channels.
Why Cleveland Fed should retract its online lending study -The Marketplace Lending Association is calling upon the Federal Reserve Bank of Cleveland to temporarily retract and revise its report on online lending due to what we see as serious flaws in the authors’ reliance on certain underlying data.In our view, this paper — “The Taste of Peer-to-Peer Loans” — and its accompanying materials show that a lack of precision and understanding of subject matter can result in significant inaccuracies. The report’s authors presented findings that seemed to reflect issues with the P-to-P industry, but they actually relied on data from a much broader category of loans. The result was a misleading and brutally critical report about the P-to-P industry that was actually based in part on data from more traditional loans.The Cleveland Fed has admitted in a written statement to American Banker that there may have been issues with the way the report was branded as an examination of the P-to-P industry. “Our goal was to contribute to research around this dynamic industry, but we understand use of the term ‘peer-to-peer’ as shorthand for a set of loans originated by peer-to-peer and other online lenders has led to some confusion around the study,” the Cleveland Fed said in the statement. But the authors have still not yet changed the name of the report.The researchers must acknowledge that the loan group they studied was not an exclusive set of online loans that could be fairly separated from, and compared to, more traditional loans. And TransUnion, which provided loan data for study, has now confirmed that the data set that the researchers drew from did actually include traditional loans. A recent American Banker article quoted Ezra Becker, a senior vice president at the credit bureau, who “said that TransUnion sent the data to the Cleveland Fed a long time ago for a different study, and that none of the data the firm provided distinguished between peer-to-peer loans, so-called fintech loans and traditional personal loans.” Our belief is that the Cleveland Fed relied on a data set covering 2007 to 2012 that was largely made up of traditional storefront personal loans. The researchers appear to have grabbed 90,000 of these borrowers for their analysis, labeled them peer-to-peer with no evidence that these were peer-to-peer or even online loans, and then released a misleading report criticizing the relatively new peer-to-peer lending industry with their findings.
House panel approves rate-cap workaround a win for online lenders - A House panel on Wednesday approved legislation that would ensure online lenders can continue to partner with banks to make loans at interest rates that exceed state caps.The measure, sponsored by Rep. Patrick McHenry, R-N.C., and co-sponsored by two Democrats, passed the House Financial Services Committee by a 42-17 vote. A key legislative priority for the online lending industry, the bill has drawn strong opposition from consumer advocacy groups.The legislation seeks to blunt the impact of a May 2015 decision by a federal appeals court panel. In that case, Madden v. Midland Funding, the Second Circuit Court of Appeals ruled that when a bank sold the charged-off credit card debt of a New York state resident to a nonbank, the Empire State’s interest rate cap applied. As a result, high-cost debt that otherwise could have been collected by the bank that made the loan was deemed uncollectible once the debt was sold.The court decision is only binding in New York, Connecticut and Vermont. Still, it has had a substantial impact on the online lending industry, since nonbank firms often partner with banks in an effort to avoid state interest rate caps. The banks typically originate the loans and sell them a short time later. LendingClub and Prosper Marketplace offer consumer loans at annual percentage rates as high as 35%, while other online lenders offer more expensive credit. The civil usury cap in New York state, which has some of the strictest laws in the country, is 16%.Following the Second Circuit decision, some online lenders stopped making loans to residents of New York, Connecticut and Vermont at rates that exceed those states’ usury caps. They also fear that courts in other states will adopt the Second Circuit’s reasoning.
Subprime car loans souring faster at nonbank lenders - Despite signs of trouble in subprime auto lending, U.S. banks and credit unions are well positioned to ride out any market turbulence, a new report from the Federal Reserve Bank of New York suggests. More than $435 billion in auto loans to borrowers with credit scores below 660 were outstanding during the third quarter of this year, the report found. That total has been climbing steadily since bottoming out at $249 billion in early 2011. Delinquency rates have also been rising as it has become easier to qualify for an auto loan. But only about one-third of all outstanding subprime auto debt was originated by banks and credit unions. And the loans made by insured depositories are performing far better than those made by other lenders, the report found.At banks and credit unions, 4.4% of auto loans to borrowers with credit scores below 620 that had been less than 90 days late moved into that status during the third quarter. That level of performance is roughly in line with long-term historical trends, and somewhat improved from the 2007-to-2012 period.Meanwhile, at auto finance companies, a category that includes the financing arms of auto manufacturers, the performance of subprime loans has worsened substantially since 2012.In the third quarter of 2017, 9.7% of auto finance company loans to borrowers with credit scores below 620 that had been less than 90 days delinquent moved into that category.“This suggests that bank auto loans may have some additional layers of underwriting — credit score alone does not explain the gap and divergence in the delinquency rates,” New York Fed researchers wrote in a blog post. Over the last two years, banks and credit unions have held steady their auto loan originations to borrowers with credit scores below 660, while their auto lending to better-qualified borrowers has risen by 20%.Overall, auto loan balances grew by $23 billion during the third quarter, according to the report. As of Sept. 30, 4.0% of all auto loan balances were 90 days or more delinquent, which was up from 3.1% three years earlier. The New York Fed downplayed the possibility that problems in subprime auto lending will have a significant impact on the larger financial sector, but noted that more than 23 million consumers have subprime auto loans.
Washington can’t save community banks. It can’t even save itself… — It was the kind of victory that appeared ripe for President Trump and Republicans to celebrate — the repeal of a rule that bankers and credit unions agreed would only raise costs on customers. The passage of a repeal bill was particularly noteworthy given that the president has struggled to see his agenda enacted nearly 10 months after taking office, including passage of any significant legislation.But when it came time to sign the bill on Nov. 7, Trump did so in the least Trumpian way possible — out of the public spotlight. The signing ceremony, attended by financial services industry leaders and top Republicans, was closed to the press. Trump made no mention of Republicans’ overturning the Consumer Financial Protection Bureau’s rule banning mandatory arbitration clauses on his Twitter feed and the White House made note of it only in a short press release. It was almost like the administration didn’t want anyone to know about it. It isn’t hard to figure out why. For all the GOP opposition to the CFPB and its rules, the agency remains broadly popular with the American public, including Republican voters. And though bankers and credit unions maintain the arbitration rule would have opened them up to a flood of litigation, Trump and his allies knew that overturning it looked like a gift to Wall Street rather than a populist win for the little guy.The muted way the signing was publicized was as clear a sign as any of the political headwinds facing banks these days. Even when they win, their victories are celebrated behind closed doors. And it may be the last victory the industry sees for quite some time.
CFPB requests information on free access to credit scores - The Consumer Financial Protection Bureau is seeking more information about consumers' experience with free access to credit scores. In two separate notices published in the Federal Register on Monday, the CFPB said it wants more data on which companies consumers are using to obtain their free scores. The bureau also said it is updating a public list of companies that offer free access to a credit score. The agency is trying to build awareness about free access to credit scores as a first step toward helping consumers learn about their credit history and ensure the accuracy and completeness of credit reports. The goal is for consumers to make informed decisions about credit that serve their own financial and life goals, the CFPB said. Among the questions the bureau is seeking feedback on is whether consumer behavior has changed after being granted access to free credit scores. For example, the CFPB wants to know whether there is a relationship between free access to credit scores and consumers paying off outstanding loan balances or taking out new loan applications. The bureau also wants to know whether obtaining free credit scores encourages consumers to also check their credit reports or take other steps to learn more about credit. Additionally, the CFPB is looking at the challenges companies face in providing regular access to free credit scores. One of the questions the bureau asked is whether consumers can get access to one of their credit scores without receiving marketing material for a credit bureau's other products and services.
Cordray to leave CFPB by end of month — Consumer Financial Protection Bureau Director Richard Cordray sent an email to staff Wednesday announcing that he is leaving the bureau. Cordray has long been rumored to be planning to run for governor in Ohio, but in the email he did not say what he plans to do after his departure Cordray helped set up the bureau, which was created by the Dodd-Frank Act. He was confirmed as director in 2013. “As I have said many times, but feel just as much today as I ever have, it has been a joy of my life to have the opportunity to serve our country as the first director of the Consumer Bureau,” Cordray said. He said the bureau has “made a real and lasting difference that has improved people’s lives, notably: $12 billion in relief recovered for nearly 30 million consumers.” While Cordray’s term as the bureau’s director featured several high-profile actions, including a massive enforcement action against Wells Fargo over the bank's fake-accounts scandal, it was also a tumultuous one marked by tensions between the bureau and Republicans. His leaving will have an immediate impact on the CFPB, which is almost certain to be pushed to the right by a Trump appointee, though experts have clashed over who would succeed Cordray in the job. Some have suggested David Silberman, the acting deputy director, would immediately become director, setting up a potential showdown with the Trump administration. Senate Democrats were already gearing up for a fight against a Trump nominee, though because the nomination can no longer be filibustered, they have little ability to stop it. "The new Director of the CFPB must be someone with a track record of protecting consumers and holding financial firms responsible when they cheat people," wrote Sen. Elizabeth Warren, D-Mass., on Twitter. "This is no place for another Trump-appointed industry hack." Sen. Sherrod Brown, the top Democrat on the Banking Committee, said in a press release that "the White House has said it wants to stand up for the middle class. If that's true, the President must nominate a successor who will put working people ahead of Wall Street." Industry representatives, meanwhile, have expressed hope that Cordray's impending departure would help lead to structural reforms of the agency.
Radical changes ahead for CFPB after Cordray departure - Seldom if ever has the resignation of a top regulator signaled such a large change in direction for a federal agency. Under Richard Cordray, the Consumer Financial Protection Bureau earned a reputation as an aggressive regulator. But his announcement Wednesday that he is leaving by the end of the month gives President Trump a significant opening to use appointment powers to roll back Cordray's policies. Cordray's announcement immediately touched off speculation on the extent of policy changes and his potential successors. Industry observers pointed to the prospect of new leadership reversing enforcement actions or even whole rulemakings issued under Cordray.“To the extent that the administration believed that Mr. Cordray’s views were inconsistent with its" own views, "this is the opportunity that they have been waiting for to recalibrate the focus of the agency,” said Thomas Vartanian, a partner at Dechert. Cordray, 58, announced in an email to the CFPB's staff that he would leave the bureau before the end of November. He has long been rumored to be planning to run for governor of Ohio, but he did not make any announcement of his plans. As the first Senate-confirmed CFPB director, he stuck loyally to the bureau's pro-consumer protection mission developed by now-Sen. Elizabeth Warren, the agency's architect. In the short term, some suggested that once Cordray leaves, the bureau could be in somewhat of a holding pattern until the administration names an acting director — which could include Treasury Secretary Steven Mnuchin — while others said the agency's current acting No. 2, David Silberman, could still lead aggressive regulatory efforts. “I think that the CFPB will continue to move briskly ahead until President Trump has appointed his own choice into the leadership position,” “There is some possibility, but a limited one, that there could be a new set of proposed rules on third-party debt collection.” But Benjamin Olson, a partner at the law firm Buckley Sandler and former deputy assistant director at the bureau, said, “It seems unlikely that the CFPB could get anything concrete and final out in the time that remains, other than possibly a guidance document.”
Trump Gets Chance to Reshape CFPB - Jerri-lynn Scofield - Richard Cordray announced on Wednesday that he’ll step down as director of the Consumer Financial Protection Bureau (CFPB) by month-end.Cordray has yet to reveal what he intends to do next— but it’s rumored he’s planning to run for governor of Ohio. Trump will be able to name a new agency director, who– if confirmed by the Senate– will shift rule-making and enforcement policies in a more bank-friendly direction. When Congress created the CFPB in 2010 in the Dodd-Frank act, it specifically structured the agency so as to insulate it from political pressure. That means that the President can only fire its director for cause. Thus far, Trump hasn’t been able to shape the direction of agency operations by replacing Cordray. The usual mainstream media suspects– see the New York Times in Mulvaney Expected to Run Watchdog Agency He Wanted to Kill, for example— lauded Cordray’s tenure, giving him undue credit for pursuing an aggressive consumer financial protection agenda, “During his tenure, the agency gained a reputation as an active watchdog for the financial rights of consumers.” Yet these plaudits are undeserved. The agency failed to pursue aggressive agenda in areas such as foreclosure abuses and student loan servicing. In addition, the CFPB made basic tactical errors—especially its delay in promulgating a rule banning mandatory arbitration in consumer financial contracts. Such widespread, “voluntary” clauses prevent consumers from pursuing class action lawsuits.Despite producing a comprehensive study on these clauses in December 2013, the agency dilly dallied and failed to issue a final rule until July. This slow walking allowed Congressional Republicans and Trump to overturn the rule earlier this month under special procedures authorized under the Congressional Review Act (CRA)– as I discussed further in RIP, CFPB Mandatory Arbitration Ban. To say that the CFPB underperformed under Cordray is not to deny that things won’t get worse now that Trump can name a new CFPB director. As has been widely reported, his first move is likely to be to name Mike Mulvaney, current head of the Office of Management and Budget (OMB) and a fierce critic of the CFPB, as interim director until a permanent replacement is nominated and confirmed by the Senate. Mulvaney would continue to hold his OMB position while serving as CFPB interim director.
How a new CFPB head may revamp rules, enforcement -- A new Republican director of the Consumer Financial Protection Bureau is likely to take immediate action to roll back certain rules while curbing pending enforcement actions that are considered too harsh on financial firms. The Trump administration is considering naming Mick Mulvaney, the director of the Office of Management and Budget, on an interim basis to replace the CFPB's Director Richard Cordray, who announced Wednesday that he will leave the agency this month. While there are some legal limitations on what a GOP appointee to the CFPB can do, attorneys, analysts and former agency officials said that there are actions that could be taken promptly to change the direction before a permanent successor is named and confirmed. Those range from scaling back enforcement actions in the pipeline to taking a hard look at the CFPB’s “Qualified Mortgage” rule, which lenders have argued is hurting availability of credit. "A new director is likely going to want to understand what is going on and to change course," said Ori Lev, a partner at Mayer Brown and a former CFPB deputy enforcement director. "The first thing a new director is going to want to do is to get a lay of the land and the kinds of issues that are the most imminent in the enforcement realm." "I’d expect one of the first things he would do is review pending litigation to see if the agency wants to drop claims or cases, seek different relief or stick with the agency’s position." Following is a guide to what’s likely to be targeted first. View List
OMB chief Mulvaney could be temporary CFPB boss - Mick Mulvaney once called the Consumer Financial Protection Bureau “a sad, sick joke.” Now, he may get to oversee Elizabeth Warren’s favorite regulator. Mulvaney, President Donald Trump’s Office of Management and Budget director, is being considered for a temporary role as interim director of the consumer watchdog after Richard Cordray steps down later this month, according to two people familiar with the matter. Mulvaney would be expected to name someone else or a team of people to run the CFPB on a day-to-day-basis so he could keep his focus on OMB, said one of the people.The goal is to hit the ground running in overhauling an agency that some Republicans have called corrupt and that GOP lawmakers widely blame for burdening lenders with unnecessary red tape. It could be months before Trump nominates a permanent CFPB director and his selection is confirmed by the Senate. Mick Mulvaney would be expected to name someone else or a team of people to run the CFPB on a day-to-day-basis so he could keep his focus on OMB, Bloomberg NewsUnder a federal vacancies law, Trump can replace an outgoing director temporarily with someone from another agency who has already won Senate approval. Treasury Secretary Steven Mnuchin has also been considered to run the CFPB on a temporary basis, said one of the people who asked not to be named because the deliberations are private.A call to OMB’s press office wasn’t returned.Cordray, who was appointed by former President Barack Obama, announced his resignation Wednesday. In anticipation of Cordray’s departure, the White House has been working on a plan to revamp the CFPB for months, including compiling a list of possible candidates to succeed him, people familiar with the matter said. Mulvaney, a former Republican congressman from South Carolina, has been heavily involved in the Trump administration’s discussions, the people said.Candidates the White House has considered as a permanent CFPB head include Todd Zwyicki from George Mason University’s Mercatus Center, former congressman Randy Neugebauer and Brian Brooks, Fannie Mae’s former general counsel, as well as acting head of the Office Comptroller of the Currency Keith Noreika.
On way out, FDIC's Gruenberg warns against going too far on reg relief - — Federal Deposit Insurance Corp. Chairman Martin Gruenberg warned against rolling back “core reforms” to bank regulation that were implemented after the 2008 financial crisis, but said some review of the Dodd-Frank law is warranted. “Weakening the core reforms that apply to our largest banking organizations would increase the risk of future banking crises that would be very costly for the U.S. financial system and economy,” Gruenberg said Tuesday in prepared remarks before the Brookings Institution. The FDIC chair cited capital and liquidity requirements, proprietary trading rules and the development of a resolution process for massive banks that pose systemic risk to the financial system. “I would particularly raise a concern in regard to weakening capital requirements for systemically important financial institutions. I refer specifically to the idea of removing central bank exposures, Treasury securities, and initial margin from the calculation of the enhanced supplementary leverage ratio and lowering the ratio,” he said. While not commenting specifically on the legislation, Gruenberg’s remarks came a day after the Senate Banking Committee announced a bipartisan agreement to roll back some Dodd-Frank regulations. The deal is modest compared to a House proposal to overhaul Dodd-Frank, but it is a significant in that its prospects for passage appear positive. Under the deal, custody and trust banks, like State Street, would not have to count funds deposited with a central bank as part of the supplementary leverage ratio. Gruenberg’s term as chairman of the FDIC expires later this month, but he is likely to remain at the post until a replacement is nominated by the White House and confirmed by the Senate. Gruenberg’s term as an FDIC board member doesn’t expire until December of next year, so he can remain on the board if he chooses.
As FHA reserves dwindle, so do odds of premium cut - The Federal Housing Administration was battered by losses this year in its reverse mortgage program, reducing insurance reserves and casting doubt on plans to cut FHA premiums, according to a report on the housing agency's finances. The FHA said Wednesday that its capital reserve ratio fell to 2.09% in fiscal 2017, down from 2.35% a year earlier, according to an annual independent actuarial report. The ratio measures reserves held in excess to cover projected losses. By law, the FHA must maintain a 2% capital reserve buffer. The lower capital ratio bolsters arguments against cutting mortgage insurance premiums, which could give private mortgage insurers a reason to be hopeful. The Trump administration had suspended an earlier Obama-era proposal to reduce premiums, setting up a much-anticipated decision on whether to lower the cost for FHA insurance. The Department of Housing and Urban Development "is unlikely to revive the Obama administration plan to cut premiums," Jaret Seiberg, an analyst at Cowen & Co., wrote in a research note. "For private mortgage insurers, that is a positive as these firms compete with FHA for a subset of borrowers." However, the fight over lowering FHA premiums may still be far from over as many in the housing and financial sectors continue to pressure the FHA to reduce premiums as a way to entice first-time buyers into the mortgage market. The FHA's performance appeared to be dragged down by its reverse mortgage program. The FHA has seen a greater volume of reverse mortgages, known as home equity conversion mortgages, or HECMs. But with the inherent riskiness of the product, higher interest rates and more seniors — who are typically reverse mortgage borrowers — going into default, FHA claims and losses have also risen.
Housing finance reform next on to-do list for Trump and Congress -— The White House and congressional GOP leaders are eyeing a tight window between tax reform passage and the 2018 midterms to pass housing finance reform. And with key policymakers readying their exit, the effort could be the most concerted push yet. Whether a deal on the government-sponsored enterprises can be reached — a prospect that, unlike tax reform, requires Democratic help — is unclear. There have been several efforts in the more than nine years since Fannie and Freddie were taken into conservatorship, and the last serious one collapsed in 2014. But some industry observers are more optimistic that a deal can be made next year. They point to a number of factors, including that several prominent players are soon moving on — and may want a deal before they go. That includes House Financial Services Committee Chairman Jeb Hensarling, R-Tex., and Sen. Bob Corker, R-Tenn., both of whom retire at the end of next year. “It does line up a lot of important folks who may well want to finish strong on something they care a good bit about,” . “Add to that the increasing realization among progressives that the status quo is going to give way dramatically in 2019 with the departure of [Federal Housing Finance Agency Director] Mel Watt, and you would appear to have the stars aligning for the strongest run at reform we’ve seen to date.” Policymakers also face a deadline of sorts. Fannie and Freddie are set to run out of capital next year and would have to draw on Treasury if they suffered quarterly losses, a move that could spook the mortgage market. Lawmakers are hoping to cut a deal before that happens.
House passes flood insurance reform, but will Senate act in time? - The House approved a five-year extension of the National Flood Insurance Program on Tuesday, but even prominent supporters acknowledge its impact will be limited. The current authorization for the National Flood Insurance Program is due to expire Dec. 8. The House passed a reauthorization bill by a 237 to 189 vote that would allow private insurers to underwrite and sell private flood insurance policies in connection with mortgages guaranteed by Fannie Mae, Freddie Mac and the Federal Housing Administration. Such an opportunity could help ensure more homeowners have flood insurance."If you look at the Houston floods, 80% of the people flooded didn’t have flood insurance or didn’t know they were in a flood zone," Saks said."If the people in Houston could bundle their flood insurance with their car and homeowner's insurance, we would get more uptake with flood insurance – that would be a good thing.”The National Association of Realtors also supports the bill, which is the result of a compromise forged by Majority Whip Steve Scalise, R-La., and Rep. Jeb Hensarling, R-Tex., the chairman of the House Financial Services Committee. It removes hurdles to the private insurance market, which supporters say can offer better coverage at lower cost than the federal mortgage insurance program, according to the Realtors. But Rep. Michael Capuano, D-Mass., contends the bill misses the mark when it comes to reforming the National Flood Insurance Program. He claimed the bill would make flood insurance more expensive, less available and less fair to consumers. "This bill requires the NFIP to give its propriety information to competitors. No other competitor is required to do that—which will clearly lead those competitors to cherry pick. Once they cherry pick, they will take the best customers, the least risky customers," he said.
Time running out on banks' push to preserve popular tax credit - Bankers’ pleas to save a popular tax credit aimed at spurring economic development in low-income and rural communities have so far fallen on deaf ears in Washington. Even with banks and other proponents urging Congress to make the New Markets Tax Credit permanent, the House has passed a tax bill that would do away with the tax credit next year while the Senate appears content to let it expire in 2019. The New Markets Tax Credit awards roughly $3.5 billion of tax credits per year to investors in commercial developments in low-income and distressed areas. The tax credit is crucial to attracting investors and lenders to such projects, and proponents say that if it is discontinued many developments in low-income communities simply won’t be funded. “The reason it exists is it provides an incentive to draw that private capital into areas that are disadvantaged ... where the perceived risk might be entirely too high for private sources of capital,” said Matt Philpott, senior vice president of New Markets and Historic Tax Credit production at U.S. Bancorp. “It provides that cushion to make investing in those areas more comfortable.”
Loan performance continues to slip in oil-dependent areas - Even as rates on seriously delinquent and foreclosed mortgages nationwide track at their lowest levels in a decade, loan performance continues to slip in areas dependent on oil industry employment.Nationally, 4.6% of mortgages were in some stage of delinquency (30 days or more past due including those in foreclosure) in August, according to the CoreLogic Loan Performance Insights Report. This was unchanged from July but a 0.6 percentage point decline compared with August 2016 when it was 5.2%.The foreclosure inventory rate was 0.6%, down from 0.9% one year prior and the lowest foreclosure inventory rate for the month of August in 11 years when it was 0.5%.For the third month in a row, the seriously delinquent rate remained at 1.9%, the lowest since October 2007, when it was also 1.9%. In August 2016, 2.6% of all mortgages were 90 days late or greater. "Serious delinquency and foreclosure rates are at their lowest levels in more than a decade, signaling the final stages of recovery in the U.S. housing market," said CoreLogic President and CEO Frank Martell in a press release."As the construction and mortgage industries move forward, there needs to be not only a ramp up in homebuilding, but also a focus on maintaining prudent underwriting practices to avoid repeating past mistakes."The seriously delinquent rate for Alaska increased to 1.1% in August from 1% the prior year, while it was unchanged in North Dakota at 0.9%. All other states had a year-over-year decline in foreclosure rates."The effect of the drop in crude oil prices since 2014 has taken a toll on mortgage loan performance in some markets," said Chief Economist Frank Nothaft. "Crude oil prices this August were less than half their level three years ago. This has led to oil-related layoffs and an increase in loan delinquency rates in states like Alaska and in oil-centric metro areas like Houston. Houston's total delinquency rate increased to 6.2% from 5.7%.Hurricane Harvey made landfall in Texas on Aug. 25. At least 25% of all homes affected by the storm were likely to become delinquent within four months of the storm, according to Black Knight.
Delinquencies decline to recession-era low: TransUnion - The 60-day-plus mortgage borrower delinquency rate dropped 16% on an annual basis to 1.91% at the end of the third quarter, bringing it to the lowest point since the recession. "Serious mortgage delinquency rates continue to drop to new post-recession lows, indicating there may be opportunities to responsibly expand access," said Joe Mellman, senior vice president and mortgage business leader at TransUnion, in a press release Wednesday. "We did note that the shape of the delinquency trendline has been flat during the second and third quarters of 2017, suggesting that a natural floor for delinquencies might be forming. However, a similar period of flat delinquencies occurred between the second and fourth quarters of 2016, before they once again began to decline," he added. The string of year-to-year declines in delinquency rates hasn't been broken since the third quarter of 2010, according to TransUnion. And only one state, Alaska, has seen its delinquencies grow year-over-year due to lower oil prices that affect its economy. At the same time, the total number of mortgages outstanding in the past two quarters has grown year-to-year for the first time since the fourth quarter of 2014, most recently by 1% to 52.7 million. But average new account balances, a figure that gets measured with a one-quarter lag, declined by 2.4% in the past year to $224,502.
Mortgage delinquencies rise following the three hurricanes --The three major hurricanes that caused so much devastation during August and September was largely responsible for the third-quarter increase in mortgage delinquencies.The seasonally adjusted delinquency rate of 4.88% was 64 basis points higher than the second quarter, according to the Mortgage Bankers Association's National Delinquency Survey. The 30-day delinquency rate was responsible for 50 basis points of that increase, said Marina Walsh, the MBA's vice president of industry analysis, in a press release. Compared with one year ago, delinquencies were 36 basis points higher."Hurricanes Harvey, Irma and Maria caused disruptions and destruction in numerous states," Walsh said. "Florida, Texas, neighboring states, as well as devastated Puerto Rico, saw substantial increases in their past-due rates. While forbearance is in place for many borrowers affected by these storms, our survey asks servicers to report these loans as delinquent if the payment was not made based on the original terms of the mortgage regardless of any forbearance plans in place." Federal Housing Administration-insured mortgages had a 146-basis-point increase in their delinquency rate from the second quarter, to 9.4%. This was the largest quarter-to-quarter increase in the MBA survey's history, Walsh said. There was a 52-basis-point increase in Veterans Affairs mortgage delinquencies to 4.24%, while the conventional loan delinquency rate rose 50 basis points to 3.97%. "While the storms played a critical factor in explaining the rise in the overall delinquency rate, there are other factors to consider, especially given delinquency rate increases in other states not directly impacted by the storms," she said.
MBA: Mortgage Delinquency Rate increases in Q3 mostly due to Hurricanes --From the MBA: Delinquencies Up in MBA’s National Delinquency Survey for Q3 2017The delinquency rate for mortgage loans on one-to-four-unit residential properties increased to a seasonally adjusted rate of 4.88 percent of all loans outstanding at the end of the third quarter of 2017. The delinquency rate was up 64 basis points from the previous quarter, and was 36 basis points higher than one year ago, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. The percentage of loans on which foreclosure actions were started during the third quarter was 0.25 percent, a decrease of one basis point from the previous quarter, and five basis points lower than one year ago. The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure. The percentage of loans in the foreclosure process at the end of the third quarter was 1.23 percent, down 6 basis points from the previous quarter and 32 basis points lower than one year ago. The serious delinquency rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 2.52 percent in the third quarter, up 3 basis points from the previous quarter, but 44 basis points lower than one year ago.Marina Walsh, MBA’s Vice President of Industry Analysis, offered the following commentary on the survey: “In the third quarter of 2017, the overall delinquency rate rose by 64 basis points over the previous quarter, with the 30-day delinquency rate accounting for 50 basis points of this variance. Hurricanes Harvey, Irma and Maria caused disruptions and destruction in numerous states. Florida, Texas, neighboring states, as well as devastated Puerto Rico, saw substantial increases in their past due rates. While forbearance is in place for many borrowers affected by these storms, our survey asks servicers to report these loans as delinquent if the payment was not made based on the original terms of the mortgage regardless of any forbearance plans in place.“Mortgage delinquencies increased across all loan types – FHA, VA and conventional – on a seasonally-adjusted basis. The FHA delinquency rate increased to 9.40 percent from 7.94 percent in the second quarter, a 146 basis-point increase and the highest quarter-over-quarter increase reported in the history of our survey. The VA delinquency rate increased 52 basis points to 4.24 percent from 3.72 percent in the second quarter. The conventional delinquency rate increased 50 basis points to 3.97 percent from 3.47 percent in the second quarter.
Big drop in properties seriously underwater in 3Q - There were 1.4 million fewer U.S. properties seriously underwater in the third quarter, marking the largest year-over-year drop since the second quarter of 2015, according to Attom Data Solutions. In the third quarter, 4.6 million properties were seriously underwater, down over 800,000 properties from the previous quarter. The 4.6 million properties by the end of the third quarter represented 8.7% of all U.S. properties with a mortgage, which is down year-over-year by 2.1 basis points from 10.8% and from 9.5% from the second quarter. "Accelerating home price appreciation this year is increasing the velocity at which seriously underwater homeowners are recovering home equity lost during the Great Recession," said Daren Blomquist, senior vice president at Attom Data Solutions, in a press release. "Median home prices nationwide are up 9.4% so far in 2017, the fastest pace of appreciation through the first three quarters of a year since 2013. Continued home price appreciation is also helping to grow the number of equity rich homeowners across the country compared to a year ago," he continued. There were over 14 million properties nationwide equity rich in the third quarter, up by 905,000 properties from the same period last year, but down slightly from the previous quarter. The 14 million properties that were equity rich represented 26.4% of all U.S. properties with a mortgage, up year-over-year from 23.4% and quarter-over-quarter from 24.6%. The states with the highest share of equity-rich properties were Hawaii and California, and those with the highest share of underwater borrowers were Louisiana and Iowa.
Fannie, Freddie returning to low-income housing tax credit - The government-sponsored enterprises are finally getting the green light to return to the low-income housing tax credit market, but they must stay within certain investment limits as they do."This decision demonstrates our commitment to supporting affordable rental housing in a controlled and thoughtful manner intended to stabilize the market and not to compete with private investors,” Federal Housing Finance Agency Director Mel Watt said in a press release Thursday. “Most of the enterprises' investments will be used to facilitate transactions that support underserved markets and complement our Duty to Serve priorities." The possibility that the GSEs "could provide a countercyclical role in the LIHTC market in the future if needed" contributed to the FHFA's decision, according to the release.Both Fannie Mae and Freddie Mac will be able to invest up to $500 million in the tax credits per year, which would equate to less than a 5% market share for each. Any investments above $300 million would have to be allocated specifically to markets the FHFA identifies as having difficulties in attracting investors. The program will be re-evaluated annually.The announcement came the same day the House passed a tax bill that would cut the corporate tax rate to 20% from 35%, a move that could lower the value of deductions banks rely on to make their investments in affordable housing. The credits give investors a one-for-one tax credit for each dollar they investment in affordable rental housing. Fannie and Freddie originally exited the LIHTC market after they went into conservatorship in 2008.
How tax reform could devastate the affordable housing market - Housing advocates are pressing Senate Republicans to expand the low-income housing tax credit program while pushing back against a House GOP plan that would eliminate financing for half of all affordable housing units.The efforts underscore a key issue with the tax proposals currently being rushed through Congress. Lowering the corporate tax rate to 20% from 35% would reduce the value of existing low-income tax credits at a time when there is both a rental housing crisis and a shortage of affordable housing. Advocates said they are cautiously optimistic that Congress will reverse course to help. "We are not a target; we are one of the unintended consequences," "Right now we are advocating for a whole credit program because the lower corporate rate dilutes the value of the tax credits." The affordable housing market relies heavily on subsidies from two separate programs: the low-income housing tax credit program, and private activity bonds that allow states and cities to borrow on behalf of private companies and nonprofits to lower their borrowing costs.The House GOP plan calls for gutting the private activity bond program, which would raise $38.9 billion over 10 years to help lower corporate and individual tax rates. The Republican tax proposals come as bank regulators and lenders have a heightened interest in affordable housing because rents have skyrocketed in major cities across the country. More than half of renters spend more than 30% of their household income on rent, according to the Federal Reserve Bank of Richmond. Roughly 19 million households pay more than 50% of their income on rent, according to Harvard's Joint Center for Housing Studies.The House plan "would be a devastating reduction in the amount of affordable housing that is developed and preserved," said Richard Goldstein, a partner at Nixon Peabody. He estimated that eliminating private activity bonds would reduce the supply of affordable housing units by 900,000 over 10 years.
MBA: Mortgage Applications Increase in Latest Weekly Survey - From the MBA: Mortgage Applications Increase in Latest MBA Weekly Survey: Mortgage applications increased 3.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 10, 2017. This week’s results do not include an adjustment for the Veterans’ Day holiday.... The Refinance Index increased 6 percent from the previous week to its highest level since October 2017. The seasonally adjusted Purchase Index increased 0.4 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 17 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) remained unchanged at 4.18 percent, with points increasing to 0.40 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.The first graph shows the refinance index since 1990. Refinance activity will not pick up significantly unless mortgage rates fall well below 4%.
Mortgage rates bounce to their highest level since July - Mortgage rates moved to their highest mark since July and the 10-year Treasury yield ticked up 6 basis points, according to Freddie Mac. The 30-year fixed-rate mortgage averaged 3.95% for the week ending Nov. 16, up from last week when it averaged 3.9%. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.94%. "Rates increased this week. The 10-year Treasury yield ticked up 6 basis points, while the 30-year mortgage rate jumped 5 basis points. Today's survey rate is the highest rate in nearly four months," Sean Becketti, Freddie Mac's chief economist, said in a press release.The 15-year fixed-rate mortgage averaged 3.31%, up from last week when it averaged 3.24%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.14%.The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.21% this week with an average 0.4 point, down from last week when it averaged 3.22%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.07%."After a minor surge late last week following the release of the Senate's tax reform bill and strong economic data from the European Union, mortgage rates held steady for the first half of this week," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on Wednesday. "All eyes are on the tax reform bill this week, as the House is expected to vote on it. If the bill passes, it could put upward pressure on rates as investors become more optimistic that the tax cuts will take effect,"
Housing Starts increased to 1.290 Million Annual Rate in October --From the Census Bureau: Permits, Starts and Completions - Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,290,000. This is 13.7 percent above the revised September estimate of 1,135,000, but is 2.9 percent below the October 2016 rate of 1,328,000. Single-family housing starts in October were at a rate of 877,000; this is 5.3 percent above the revised September figure of 833,000. The October rate for units in buildings with five units or more was 393,000. Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,297,000. This is 5.9 percent above the revised September rate of 1,225,000 and is 0.9 percent above the October 2016 rate of 1,285,000. Single-family authorizations in October were at a rate of 839,000; this is 1.9 percent above the revised September figure of 823,000. Authorizations of units in buildings with five units or more were at a rate of 416,000 in October. The first graph shows single and multi-family housing starts for the last several years.Multi-family starts (red, 2+ units) increased in October compared to Septeber. However Multi-family starts are down year-over-year.Multi-family is volatile month-to-month, but has been mostly moving down recently. Single-family starts (blue) increased in October, and are up slightly year-over-year. The second graph shows total and single unit starts since 1968. The second graph shows the huge collapse following the housing bubble, and then - after moving sideways for a couple of years - housing is now recovering (but still historically low), Total housing starts in October were above expectations. Starts for August and September were revised down slightly, combined.
Home starts reach highest level in a year, permits rise - New-home construction rebounded in October to the fastest pace in a year, partly reflecting recovery efforts in the hurricane-stricken South, government figures showed Friday. A pickup in permit applications for one-family dwellings indicates building will remain firm in coming months. Residential starts rose 13.7% to a 1.29 million annualized rate (the estimate was 1.19 million) after an upwardly revised 1.14 million pace in the prior month. Single-family home starts rose 5.3% and multifamily jumped 36.8%. Permits, a proxy for future construction of all types of homes, rose 5.9% to a 1.3 million rate (the estimate was 1.25 million) from a 1.23 million pace. The report showed building permits for single-family homes improved in October to an 839,000 annualized pace, the fastest since September 2007. Construction spending, which subtracted from gross domestic product in the second and third quarters, may add to U.S. economic growth in the final three months of 2017 on the heels of rebuilding efforts. New construction in the South rose 17.2%, the most since January, including the biggest gain for single-family starts since July 2014. Areas in the South were hit particularly hard in September by Hurricanes Harvey and Irma, which caused flooding and delayed beginning home construction. Activity typically rebounds in later months as rebuilding efforts begin in the affected regions. A gauge of homebuilders' confidence surged in November to an eight-month high, indicating optimism about the outlook amid sustained demand, boosted by the steady job market and relatively low mortgage costs. At the same time, the industry is dealing with a shortage of workers, higher materials prices and difficulty finding ready-to-build lots. Economists expect residential construction will keep expanding gradually. Single-family home starts rose to a 877,000 rate, the fastest since February, from 833,000 the prior month. Groundbreaking on multifamily buildings, such as apartments and condominiums, climbed to an annual rate of 413,000; these monthly data typically experience large swings.
New Residential Building Permits: Up Again in October -- The U.S. Census Bureau and the Department of Housing and Urban Development have now published their findings for October new residential building permits. The latest reading of 1.297M was an increase from 1.225M in September and above the Investing.com forecast of 1.247M. Here is the opening of this morning's monthly report: Privately-owned housing units authorized by building permits in October were at a seasonally adjusted annual rate of 1,297,000. This is 5.9 percent (±1.4 percent) above the revised September rate of 1,225,000 and is 0.9 percent (±1.6 percent)* above the October 2016 rate of 1,285,000. Single-family authorizations in October were at a rate of 839,000; this is 1.9 percent (±1.7 percent) above the revised September figure of 823,000. Authorizations of units in buildings with five units or more were at a rate of 416,000 in October. [link to report] Here is the complete historical series, which dates from 1960. Because of the extreme volatility of the monthly data points, a 6-month moving average has been included.
AIA: Architecture Billings Index "Bounce Back" in October - Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.
From the AIA: Architecture Billings Bounce Back: After a stand-alone month of contracting demand for design services, there was a modest uptick in the Architecture Billings Index (ABI) for October. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the October ABI score was 51.7, up from a score of 49.1 in the previous month. This score reflects an increase in design services provided by U.S. architecture firms (any score above 50 indicates an increase in billings). The new projects inquiry index was 60.2, up from a reading of 59.0 the previous month, while the new design contracts index eased slightly from 52.9 to 52.8. “As we enter the fourth quarter, there is enough design activity occurring that construction conditions should remain healthy moving through 2018,” “Extended strength in inquiries and new design contracts, along with balanced growth across the major building sectors signals further gains throughout the construction industry.”
• Regional averages: Northeast (54.0), South (50.8), West (49.8), Midwest (49.0)
• Sector index breakdown: commercial / industrial (51.2), mixed practice (50.7), multi-family residential (50.7), institutional (50.7)
How Many Hours Americans Need to Work to Pay Their Mortgage - Visual - When it comes to the cost of living in cities, a general rule of thumb is that housing prices are much higher in the country’s economic and population hubs, especially in the cities along the coasts. Particularly in recent years, prices have been pushed sky-high in places like New York City or San Francisco through a combination of limited supply of new homes, increasing demand, shifting demographics, and government regulations. Today’s visualization from HowMuch.net applies a common denominator to compare 97 of the biggest cities in the United States. Using a measure of median household income against the average mortgage payment in each city, we get a gauge of how many hours must be worked each month just to pay down the house. The visualization uses data from the U.S. Census for household income and Zillow for median home listing price, while calculating mortgage payments based on a standard 30-year term. Using the above method to compare the amount of hours it takes to pay down a monthly mortgage, we see some interesting contrasts in the country. Here are the five most expensive cities in the United States for housing:
NY Fed Q3 Report: "Total Household Debt Increases, Delinquency Rates of Several Debt Types Continue Rising" -- From the NY Fed: Total Household Debt Increases, Delinquency Rates of Several Debt Types Continue Rising The Federal Reserve Bank of New York’s Center for Microeconomic Data today issued its Quarterly Report on Household Debt and Credit, which reported that total household debt increased by $116 billion (0.9%) to $12.96 trillion in the third quarter of 2017. There were increases in mortgage, student, auto and credit card debt (increasing by 0.6%, 1.0%, 1.9% and 3.1% respectively) and a modest decline in home equity lines of credit (HELOC) balances (decreasing by 0.9%).. Credit card and auto loan flows into delinquency increased. Specifically, credit card flows into delinquency have increased over the past year, while auto loan flows into delinquency have been steadily increasing for several years. Here are two graphs from the report:The first graph shows aggregate consumer debt increased in Q3. Household debt previously peaked in 2008, and bottomed in Q2 2013.From the NY Fed:Mortgage balances, the largest component of household debt, increased again during the third quarter. Mortgage balances shown on consumer credit reports on September 30 stood at $8.74 trillion, an increase of $52 billion from the second quarter of 2017. Balances on home equity lines of credit (HELOC) have been slowly declining; they dropped by $4 billion and now stand at $448 billion. Non-housing balances, which have been increasing steadily for nearly 6 years overall, saw a $68 billion increase in the third quarter. Auto loans grew by $23 billion and credit card balances increased by $24 billion, while student loans saw a $13 billion increase. The second graph shows the percent of debt in delinquency. There is still a larger than normal percent of debt 90+ days delinquent (Yellow, orange and red). The overall delinquency rate increased in Q3. From the NY Fed: Aggregate delinquency rates ticked up slightly in the third quarter of 2017. As of September 30, 4.9% of outstanding debt was in some stage of delinquency. Of the $630 billion of debt that is delinquent, $408 billion is seriously delinquent (at least 90 days late or “severely derogatory”). Flows into delinquency deteriorated for some types of debt. The flow into 90+ delinquent for credit card balances has been increasing notably for one year, and that measure for auto loans has increased, and the flow into 90+ delinquency for auto loan balances has been slowly increasing since 2012. There is much more in the report.
The Fed Issues A Subprime Warning As Household Debt Hits A New All Time High - After we first reported last week that US credit card debt once again rose above $1 trillion, despite a recent sharp downward revision to the data, while both student and auto loans rose to a fresh record high... ... it would probably not come as a surprise that according to the just released latest quarterly household debt and credit report by the NY Fed, Americans' debt rose to a new record high in the second quarter on the back of an increase in every form of debt: from mortgage, to auto, student and credit card debt. Aggregate household debt increased for the 13th consecutive quarter, rising by $116 billion (0.9%) to a new all time high.As of September 30, 2017, total household indebtedness was $12.96 trillion, an increase of $605 billion from a year ago and equivalent to 66% of US GDP, versus a high of around 87% in early 2009. After years of deleveraging in the wake of the 2007-09 recession, household debt has risen more than 16.2% since the trough hit in the spring of 2013. Some more big picture trends: Mortgage balances, the largest component of household debt, increased again during the first quarter to $8.74 trillion, an increase of $52 billion from the second quarter of 2017. Balances on home equity lines of credit (HELOC) have been slowly declining; they dropped by $4 billion and now stand at $448 billion. Non-housing balances, which have been increasing steadily for nearly 6 years overall, saw a $68 billion increase in the third quarter. Auto loans grew by $23 billion and credit card balances increased by $24 billion, while student loans saw a $13 billion increase.
- Suggestive of a modest rebound in mortgage activity, mortgage originations in Q3 were $479 billion, up from $421 billion in Q2 if still below the $491 billion as of Q1.
- Auto loan balances increased by $23 billion, continuing their 6-year trend. Auto loan delinquency rates increased slightly, with 4.0% of auto loan balances 90 or more days delinquent on September 30. There was a total of $150.6 billion in auto loan originations in Q3, an uptick from the $148 billion in the second quarter of 2017, and among the highest quarterly volumes seen in the Fed's data.
- Credit card balances increased by $24 billion. The aggregate credit card limit rose for the 19th consecutive quarter, with a 1.5% increase.
- Outstanding student loan debt grew by $13 billion and stood at $1.36 trillion as of September 30, 2017. 11.2% of aggregate student loan debt was 90+ days delinquent or in default in Q3 2017, unchanged since the previous quarter
Sorry, poor people: The FCC is coming after your broadband plans - Poor people may soon find it more difficult to purchase subsidized broadband plans, and many of them could even be forced to find new carriers. That's thanks to changes pushed through today by the Federal Communications Commission's Republican majority.The FCC voted 3-2 to scale back the federal Lifeline program that lets poor people use a $9.25 monthly household subsidy to buy Internet or phone service. The FCC proposed a new spending cap that potentially prevents people who qualify for the subsidies from actually receiving them. The FCC is also taking steps to prevent resellers—telecom providers that don't operate their own network infrastructure—from offering Lifeline-subsidized plans.Some of the changes go into effect immediately. For others, the FCC is taking public comment before making the changes final. A potential ban on resellers participating in the program is going out for public comment. The proposed reseller ban would effectively force 70 percent of wireless phone users with Lifeline subsidies to find new providers, said Commissioner Mignon Clyburn, one of two Democratic commissioners."Over 70 percent of wireless Lifeline consumers will be told they cannot use their preferred carrier and preferred plan," Clyburn said. "On top of that, they may not have a carrier to turn to after that happens." Excluding resellers from the program would limit competition in the market for subsidized plans and push consumers toward network operators like AT&T, Verizon, T-Mobile USA, and Sprint. Consumer advocates say that some poor people simply won't be able to find a carrier that supports Lifeline. "In many states, facilities-based providers have opted out of offering Lifeline-supported service altogether and prefer to allow non-facilities-based wireless providers to serve Lifeline subscribers and the low-income segments of the wireless market," consumer advocacy group Public Knowledge wrote.
American car buyers are borrowing like never before—and missing plenty of payments, too - Last year, Americans bought more new cars than ever before. Given that auto sales make up around a fifth of all retail spending, 2016’s banner year is being hailed as a sign of burgeoning consumer confidence across the country. But something else is revving up, too: auto loans. The US closed out 2016 with just shy of $1.2 trillion in outstanding auto loan debt, a rise of 9% from the previous year and 13% above the pre-crisis peak in 2005, in inflation-adjusted terms. The number of cars and trucks on the road, meanwhile, rose by only 1.5% last year, and 9% since 2005, according to US transportation department data. Total household debt levels are now a hair under their 2008 peak, with some of the fastest growth in recent years down to auto loans. If America’s car-buying bonanza is being fueled by cheap credit, is consumer sentiment really as robust as it might seem? And is it sustainable? There are reasons to wonder. While car purchases and financing have leapt since 2009, wages have picked up only slightly over the same period. Meanwhile, the average loan taken out to buy a new car has risen steadily. Lenders are more comfortable with risk these days, as reflected by rising loan-to-value ratios and ever-longer loan terms. But those signs also suggest that lenders might be letting car buyers borrow more than they can afford. Mortgage regulations tightened after 2008 to prevent banks and other credit intermediaries from writing loans on the freewheeling terms that led to the subprime boom and bust. Auto lending attracts far less scrutiny—and therefore, offers more opportunity.
U.S. Heavy Truck Sales up Year-over-year in October -- The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the October 2017 seasonally adjusted annual sales rate (SAAR). Heavy truck sales really collapsed during the great recession, falling to a low of 181 thousand in April and May 2009, on a seasonally adjusted annual rate basis (SAAR). Then sales increased more than 2 1/2 times, and hit 480 thousand SAAR in June 2015. Heavy truck sales declined again - probably mostly due to the weakness in the oil sector - and bottomed at 364 thousand SAAR in October 2016. With the increase in oil prices over the last year, heavy truck sales increased too. Heavy truck sales were at 411 thousand SAAR in October 2017, down from 440 thousand in September, and up from 364 thousand in October 2016.
October Retail Sales: Up 0.2% MoM - The Census Bureau's Advance Retail Sales Report for October released this morning showed a slight increase over the September figures. Headline sales came in at 0.2% month-over-month to one decimal. Today's headline number was fractionally above the Investing.com consensus of 0.1%. Core sales (ex Autos) came in at 0.1% MoM. August and September figures were revised. Here is the introduction from today's report:Advance estimates of U.S. retail and food services sales for October 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $486.6 billion, an increase of 0.2 percent (±0.5 percent)* from the previous month, and 4.6 percent (±0.7 percent) above October 2016. Total sales for the August 2017 through October 2017 period were up 4.3 percent (±0.5 percent) from the same period a year ago. The August 2017 to September 2017 percent change was revised from up 1.6 percent (±0.5 percent) to up 1.9 percent (±0.2 percent).Retail trade sales were up 0.2 percent (±0.5 percent)* from September 2017, and were up 4.7 percent (±0.7 percent) from last year. Building Materials and Garden Equipment and Supplies Dealers were up 8.8 percent (±2.1 percent) from October 2016, while Gasoline Stations were up 7.5 percent (±1.4 percent) from last year. [view full report] The chart below is a log-scale snapshot of retail sales since the early 1990s. The two exponential regressions through the data help us to evaluate the long-term trend of this key economic indicator.
Retail Sales increased 0.2% in October - On a monthly basis, retail sales increased 0.2 percent from September to October (seasonally adjusted), and sales were up 4.6 percent from October 2016. From the Census Bureau report: Advance estimates of U.S. retail and food services sales for October 2017, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $486.6 billion, an increase of 0.2 percent from the previous month, and 4.6 percent above October 2016. ... The August 2017 to September 2017 percent change was revised from up 1.6 percent to up 1.9 percent. This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline). Retail sales ex-gasoline were up 0.4% in October. The second graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 4.1% on a YoY basis. The increase in October was slightly above expectations, and sales in August and September were revised up.
Consumer Price Index: October Headline at 2.0% - The Bureau of Labor Statistics released the October Consumer Price Index data this morning. The year-over-year non-seasonally adjusted Headline CPI came in at 2.04%, down from 2.23% the previous month. Year-over-year Core CPI (ex Food and Energy) came in at 1.77%, up fractionally from the previous month's 1.69%. Here is the introduction from the BLS summary, which leads with the seasonally adjusted monthly data:The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.0 percent.The shelter index increased 0.3 percent and was the main factor in the seasonally adjusted all items increase. The energy index fell, as a decline in the gasoline index outweighed increases in other energy component indexes. The food index was unchanged over the month.The index for all items less food and energy increased 0.2 percent in October. In addition to the shelter index, the indexes for medical care, used cars and trucks, tobacco, education, motor vehicle insurance, and personal care were among those that increased. The indexes for new vehicles, recreation, and apparel all declined.The all items index rose 2.0 percent for the 12 months ending October, a smaller increase than the 2.2-percent increase for the period ending September. The index for all items less food and energy rose 1.8 percent over the past year, a slightly larger increase compared to the 1.7-percent increase for the 12 months ending September. The energy index increased 6.4 percent over the last 12 months, and the index for food rose 1.3 percent. [More…]Investing.com was looking for a 0.1% increase MoM in seasonally adjusted Headline CPI and 0.2% in Core CPI. Year-over-year forecasts were 2.0% for Headline and 1.7% for Core. The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since the turn of the century. The highlighted two percent level is the Federal Reserve's Core inflation target for the CPI's cousin index, the BEA's Personal Consumption Expenditures (PCE) price index.
Core Consumer Prices Come In Hot - Rise At Fastest Rate In 6 Months - Following yesterday's hotter than expected PPI, Core Consumer Prices printed above expectations (+1.8% YoY vs +1.7% YoY exp) - the fastest rise since April 2017.Headline CPI was in line with expectations at 2.0% - a slight slowing from last month...The biggest driver of the increase in consumer prices was a 2.3% surge in fuel prices. The shelter index rose 0.3 percent, with the indexes for rent and owners' equivalent rent also rising 0.3 percent. The index for lodging away from home continued to increase, rising 1.6 percent.The medical care index rose 0.3 percent, with the index for hospital services rising 0.5 percent and the physicians' services index increasing 0.2 percent. However, the index for prescription drugs declined 0.2 percent.The index for used cars and trucks rose in October, increasing 0.7 percent; this ended a streak of nine consecutive declines. The tobacco index rose in October, increasing 1.6 percent. The education index increased 0.3 percent, and the index for wireless telephone services rose 0.4 percent. The indexes for personal care, airline fares, and motor vehicle insurance also increased in October. The index for new vehicles continued to decline, falling 0.2 percent in October after a 0.4-percent decrease in September. The index for apparel declined 0.1 percent in October, the same decline as in September; the recreation index also fell 0.1 percent. The index for household furnishings and operations was unchanged in October after declining in 5 of the 6 prior months.
October Producer Price Index: Final Demand Up 0.4% MoM - Today's release of the October Producer Price Index (PPI) for Final Demand came in at 0.4% month-over-month seasonally adjusted, unchanged from last month's 0.4%. It is at 2.8% year-over-year, up from 2.6% last month, on a non-seasonally adjusted basis. Core Final Demand (less food and energy) also came in at 0.4% MoM, unchanged from the previous month and is up 2.4% YoY NSA. Investing.com MoM consensus forecasts were for 0.4% headline and 0.4% core. Here is the summary of the news release on Final Demand:The Producer Price Index for final demand increased 0.4 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.4 percent in September and 0.2 percent in August. (See table A.) On an unadjusted basis, the final demand index increased 2.8 percent for the 12 months ended in October, the largest rise since an advance of 2.8 percent for the 12 months ended February 2012.Within final demand in October, prices for final demand services rose 0.5 percent, and the index for final demand goods moved up 0.3 percent.Prices for final demand less foods, energy, and trade services rose 0.2 percent in October. For the 12 months ended in October, the index for final demand less foods, energy, and trade services advanced 2.3 percent. More… The BLS shifted its focus to its new "Final Demand" series in 2014, a shift we support. However, the data for these series are only constructed back to November 2009 for Headline and April 2010 for Core. Since our focus is on longer-term trends, we continue to track the legacy Producer Price Index for Finished Goods, which the BLS also includes in their monthly updates. As this overlay illustrates, the Final Demand and Finished Goods indexes are highly correlated.
Producer Prices Surge At Fastest Rate In Almost 6 Years - Following September's hotter-than-expected Core PPI (and 5Y high in PPI), October was expected to see a modest slowdown but headline PPI printed a massive 2.8% YoY(smashing the 2.4% exp). This is the hottest PPI since Jan 2012, driven by surges in fuel prices and drugs. Core PPI also beat expectations, rising 2.4% YoY (vs 2.2% exp) - also the highest since Feb 2012... Under the hood... Nearly half of the increase in prices for final demand services can be attributed to margins for fuels and lubricants retailing, which surged 24.9 percent. Almost half of the rise in the final demand goods index was the result of higher prices for pharmaceutical preparations, which increased 2.1 percent. December rate-hike odds were at 97.1% right before the PPI print.
Port of Long Beach: Another Record Month in October --From the Port of Long Beach: Port Sets Record for October Cargo, Long Beach on pace for highest-ever volumes in 2017A year of records continues at the Port of Long Beach, where this October was the busiest in history, as container volumes surged 15 percent compared to the same month a year ago.Trade has been growing so rapidly in 2017 that the record-setting October — at 669,218 twenty-foot-equivalent units (TEUs), one of the Port’s strongest all-time results — was only the fourth-busiest month of the year behind July, September and August.“October used to be the industry’s busiest month of the year, with retailers preparing for Christmas,” said Port of Long Beach Executive Director Mario Cordero. “Now, with other popular shopping seasons like back-to-school, Halloween and Black Friday, ocean carriers are spreading shipments across more months to maximize the services we have developed to serve them.” Inbound containers destined for retailers jumped 14.3 percent to 339,013 TEUs. Export boxes decreased slightly, 0.5 percent, to 126,150 containers. Empty containers sent overseas to be refilled with goods increased 28.9 percent, to 204,055 TEUs. Through the first 10 months of the year, 6,234,930 TEUs have been moved through the Port, a 9.5 percent increase over the same period in 2016.
LA area Port Traffic: Imports increased YoY, Exports decreased YoY in October -- Container traffic gives us an idea about the volume of goods being exported and imported - and usually some hints about the trade report since LA area ports handle about 40% of the nation's container port traffic. The following graphs are for inbound and outbound traffic at the ports of Los Angeles and Long Beach in TEUs (TEUs: 20-foot equivalent units or 20-foot-long cargo container). To remove the strong seasonal component for inbound traffic, the first graph shows the rolling 12 month average. On a rolling 12 month basis, inbound traffic was up 0.1% compared to the rolling 12 months ending in September. Outbound traffic was down 0.7% compared to the rolling 12 months ending in September. The 2nd graph is the monthly data (with a strong seasonal pattern for imports).
Trump's China Visit: Boeing Inks $37 Billion Deal To Sell 300 Aircraft - Boeing Co. announced Thursday it had signed a deal with the China Aviation Suppliers Holding Company to cell 300 airplanes. The agreement was signed in Beijing in the presence of President Donald Trump and Chinese President Xi Jinping, where Boeing's representatives were present as part of the U.S. mission to China. The orders and commitments for single aisle and twin aisle aircraft are valued at $37 billion at list prices, according to the company’s announcement of the agreement. China is expected to require 7,240 aircraft over the next 20 years, by when it will likely account for 18 percent of global aviation trade. The majority of these airplanes are expected to be single aisle. “China is a valued customer and key partner, and we're proud that Boeing airplanes will be a part of its fleet growth for years to come. Boeing and China have a strong history of working together based on great mutual respect, and these orders build on that foundation," Kevin McAllister, Boeing Commercial Airplanes president and CEO, said in the statement. The company also said it would work with China to reduce the environmental impact of aviation and make the Chinese air transport system more efficient. Bloomberg reported the purchase will include 260 Boeing 737 narrow-body airplanes and 40 Boeing 787 and Boeing 777 wide-body aircraft. According to Flight Fleets Analyzer, Boeing has received 1,074 passenger aircraft orders from unannounced commercial customers, a majority of which are likely Chinese airlines. China has now become the biggest commercial customer for the aviation company — one of every four airplanes is being sold to Chinese customers. One in every three Boeing 737s — the company’s most demanded passenger plane — is being sold to Chinese customers.
Boeing takes head start in Dubai with Emirates Dreamliner order (Reuters) - Emirates unveiled a preliminary order worth $15 billion for 40 Boeing (BA.N) jets on Sunday, but kept Europe’s Airbus (AIR.PA) waiting for a lifeline order for A380 superjumbos as the Dubai Airshow opened amid worries over tensions in the Middle East. The largest Middle East carrier signed a draft deal for the largest version of Boeing’s Dreamliner, the 787-10, watched by Dubai Ruler Sheikh Mohammed bin Rashid al-Maktoum, credited for the launch of Emirates more than 30 years ago. Reuters earlier reported Boeing was close to clinching a deal for 787-10s, upstaging expectations of an early Airbus deal for the larger A380. Emirates chairman Sheikh Ahmed bin Saeed al-Maktoum said the carrier had chosen the latest version of Boeing’s mid-sized wide-body jet after comparing it with the Airbus A350. Delegates said that comparison delivered a blow to Airbus which had been competing to win back Dubai’s endorsement for its mid-sized A350 after Emirates canceled an order for 70 in 2014.
Boeing in 175 plane deal with budget carrier flydubai (Reuters) - Boeing reached a preliminary deal for 175 of its 737 MAX jets with flydubai on Wednesday, potentially committing the budget airline’s fleet to the U.S. planemaker for another decade. The Dubai-based carrier wants more than 50 of Boeing’s largest narrowbody jet, the 737-10, as well as to-be-determined numbers of its 737-9s and 737-8s, Boeing said in a statement at the Dubai Airshow. Reuters had reported that Boeing was close to reaching a deal with flydubai for 175 737 MAX jets. Flydubai Chairman Sheikh Ahmed bin Saeed al-Maktoum told a news conference the provisional deal was struck Tuesday night. It is flydubai’s third aircraft deal. It agreed to buy 75 737-8 MAX aircraft at the Dubai Airshow four years ago. “We try to grow as fast as we want,” Chief Executive Ghaith al-Ghaith told reporters. Delivery of flydubai’s 175 planes will begin in 2019 and be spread across 10 years with some overlap with the delivery of its 2013 order, al-Ghaith said. The current fleet of flydubai, which started flights in 2009, is all Boeing. It currently only operates 737-8s. The provisional deal is worth $27 billion, including purchasing options for an additional 50 planes.
America Just Can’t Match China’s Exploding Supercomputing Power - MIT Technology Review - If you want to crunch the world’s biggest problems, head east. According to a newly published ranking, not only is China home to the world’s two fastest supercomputers, it also has 202 of the world’s fastest 500 such devices—more than any other nation. Meanwhile, America’s fastest device limps into fifth place in the charts, and the nation occupies just 144 of the top 500 slots, making it second according to that metric.The world’s fastest supercomputer is still TaihuLight, housed at the National Supercomputing Center in Wuxi, China, and pictured above. Capable of performing 93 quadrillion calculations per second, it’s almost three times faster than the second-place Tianhe-2. The Department of Energy’s fifth-placed Titan supercomputer, housed at Oak Ridge National Laboratory, performs 17.6 quadrillion calculations per second—making it less than a fifth as fast as TaihuLight.China also beats out all comers on total computational resources, commanding 35.4 percent of the computing power in the list, compared with America’s 29.6 percent. The new list clearly and painfully underscores America’s decline as a supercomputing heavyweight. Indeed, this is the weakest representation by the U.S. since the Top500 supercomputers list started ranking the industry 25 years ago. The American government is painfully aware that it’s now a laggard, and a $258 million funding injection into the Department of Energy’s exascale computing project is supposed to ready a system capable of performing one quintillion operations per second—10 times the capacity of TaihuLight—by 2021. But, er, China reckons it will achieve the same feat as soon as 2020. Right now, then, China has America’s supercomputing industry beat.
Import, Export Price Growth Slows As China-flation Slumps To 2007 Lows -- Hotter than expected Core PPI and CPI prints in the last two days suggested Import Prices may also come in hot but that was not the case as the MoM rise in import prices was just 0.2% (vs +0.4% exp). Ex-Fuel, import prices rose just 0.1% in October (with Petroleum prices up 1.7% MoM and 14.9% YoY). However that rise in petroleum import prices is notably lower than then +6.3% in September On the export side, food prices rose 2.2% MoM as Auto prices declined 0.2% MoM. Year-over-year however, both import and export price growth declined modestly. China Import prices contonue to slide as it exports deflation around the world... This is now the lowest since 2007.
$300 Billion War Beneath the Street: Fighting to Replace America’s Water Pipes - America is facing a crisis over its crumbling water infrastructure, and fixing it will be a monumental and expensive task. Two powerful industries, plastic and iron, are locked in a lobbying war over the estimated $300 billion that local governments will spend on water and sewer pipes over the next decade. It is a battle of titans, raging just inches beneath our feet. “Things are moving so fast,” “There are some pipes in the ground that are 150 years old.” How the pipe wars play out — in city and town councils, in state capitals, in Washington — will determine how drinking water is delivered to homes across America for generations to come. Traditional materials like iron or steel currently make up almost two-thirds of existing municipal water pipe infrastructure. But over the next decade, as much as 80 percent of new municipal investment in water pipes could be spent on plastic pipes, Bluefield predicts. The outcome of the rivalry will also determine the country’s response to an infrastructure challenge of epic proportions. By 2020, the average age of the 1.6 million miles of water and sewer pipes in the United States will hit 45 years. Cast iron pipes in at least 600 towns and counties are more than a century old, according to industry estimates. And though Congress banned lead water pipes three decades ago, more than 10 million older ones remain, ready to leach lead and other contaminants into drinking water from something as simple as a change in water source.As many as 8,000 children were exposed to unsafe levels of lead in Flint, Mich., after the city switched to a new water supply but failed to properly treat the water with chemicals to prevent its lead pipes from disintegrating. Corroding iron pipes, meanwhile, have been linked to two outbreaks of Legionnaires’ disease in Flint that added to the public health emergency. The American Chemistry Council, a deep-pocketed trade association that lobbies for the plastics industry, has backed bills in at least five states — Michigan, Ohio, South Carolina, Indiana and Arkansas — that would require local governments to open up bids for municipal water projects to all suitable materials, including plastic. A council spokesman, Scott Openshaw, criticized the current bidding process in many localities as “virtual monopolies which waste taxpayer money, drive up costs and ultimately make it harder for states and municipalities to complete critical water infrastructure upgrades.”
The Big Four Economic Indicators: Industrial Production Up 0.9% in October - Today's report on Industrial Production for October shows a 0.9% increase month-over-month, which was better than the Investing.com consensus of 0.5%. Industrial Production peaked in November 2014, only one point higher than its pre-recession peak in November 2007. The year-over-year change is 2.88 percent, up from last month's YoY increase.Here is the overview from the Federal Reserve:Industrial production rose 0.9 percent in October, and manufacturing increased 1.3 percent. The index for utilities rose 2.0 percent, but mining output fell 1.3 percent, as Hurricane Nate caused a sharp but short-lived decline in oil and gas drilling and extraction. Even so, industrial activity was boosted in October by a return to normal operations after Hurricanes Harvey and Irma suppressed production in August and September.[1] Excluding the effects of the hurricanes, the index for total output advanced about 0.3 percent in October, and the index for manufacturing advanced about 0.2 percent.With modest upward revisions for July through September, industrial production is now estimated to have only edged down 0.3 percent at an annual rate in the third quarter; the previously published estimate showed a decrease of 1.5 percent.Total industrial production has risen 2.9 percent over the past 12 months; output in October was 106.1 percent of its 2012 average. Capacity utilization for the industrial sector was 77.0 percent, a rate that is 2.9 percentage points below its long-run (1972–2016) average. [view full report] The chart below shows the year-over-year percent change in Industrial Production since the series inception in 1919, the current level is lower than at the onset of 10 of the 17 recessions over this time frame of nearly a century.
Empire State Manufacturing Survey: Continued Growth in November - This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 19.4 was a decrease of 10.8 from the previous month's 30.2. The Investing.com forecast was for a reading of 26.0.The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.Here is the opening paragraph from the report.Business activity continued to grow strongly in New York State, according to firms responding to the November 2017 Empire State Manufacturing Survey. Though the headline general business conditions index fell eleven points from the multiyear high it reached last month, it remained firmly in positive territory at 19.4. The new orders index climbed to 20.7 and the shipments index came in at 18.4—readings that pointed to ongoing solid gains in orders and shipments. Delivery times were slightly shorter than last month, and inventory levels edged higher. Labor market indicators reflected moderate employment gains and little change in hours worked. Both input prices and selling prices rose at a pace that was little changed from last month. Indexes assessing the six-month outlook suggested that firms were very optimistic about future business conditions. [source] Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:
Philly Fed Manufacturing Index: Continued Expansion in November -The Philly Fed's Manufacturing Business Outlook Survey is a monthly report for the Third Federal Reserve District, covers eastern Pennsylvania, southern New Jersey, and Delaware. While it focuses exclusively on business in this district, this regional survey gives a generally reliable clue as to the direction of the broader Chicago Fed's National Activity Index. The latest Manufacturing Index came in at 22.7, down from last month's 27.9 and has been positive for sixteen consecutive months. The 3-month moving average came in at24.8, up from 23.5 last month. Since this is a diffusion index, negative readings indicate contraction, positive ones indicate expansion. The Six-Month Outlook came in at 50.1, an increase from the previous month's 46.4.Today's 22.7 headline number came in below the 25.0 forecast at Investing.com.Here is the introduction from the survey released today:Regional manufacturing activity continued to expand in November, according to results from this month’s Manufacturing Business Outlook Survey. The indexes for general activity and shipments fell from their October readings but remained positive, while the survey’s index for new orders rose. The employment index fell but remained elevated. Almost all of the future indicators rose, and firms continue to expect growth in both activity and employment over the next six months. (Full Report) The first chart below gives us a look at this diffusion index since 2000, which shows us how it has behaved in proximity to the two 21st century recessions. The red dots show the indicator itself, which is quite noisy, and the 3-month moving average, which is more useful as an indicator of coincident economic activity. We can see periods of contraction in 2011, 2012 and 2015, and a shallower contraction in 2013. 2016 saw an improvement only to detract in the second half of 2017. In the next chart, we see the complete series, which dates from May 1960. For proof of the high volatility of the headline indicator, note that the average absolute monthly change across this data series is 7.7.
Kansas City Fed Survey: Activity Slows in November --The Kansas City Fed Manufacturing Survey business conditions indicator measures activity in the following states: Colorado, Kansas, Nebraska, Oklahoma, Wyoming, western Missouri, and northern New Mexico. Quarterly data for this indicator dates back to 1995, but monthly data is only available from 2001. New seasonal adjustment factors were introduced in January 2017 and slight revisions were made to previous data as a result.Here is an excerpt from the latest report:. – The Federal Reserve Bank of Kansas City released the November Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that growth in Tenth District manufacturing activity slowed slightly but remained solid, and optimism for future activity remained high.“Factories reported another good month in November. However, a number of firms noted increasing difficulty finding skilled labor,” said Wilkerson. [Full PDF release here]Here is a snapshot of the complete Kansas City Fed Manufacturing Survey.
NFIB: Small Business Optimism Index "inches up" in October -- From the National Federation of Independent Business (NFIB): Small Business Optimism Index inches up in October in October The October Index rose to 103.8, up from 103 the previous month. The historically strong performance extends the streak of positive months dating back to last November, when it shot up immediately following the election.Four of the Index components rose last month. Five declined slightly, while one remained unchanged. Outlook for expansion and sales expectations each jumped six points, while job openings increased by five points. The tight labor market got tighter for small business owners last month, continuing a year-long trend. Fifty-nine percent of owners said they tried to hire in October, with 88 percent of them reporting no or few qualified applicants. Hiring activity was particularly high in Florida and Georgia, as construction firms are still trying to meet higher demand caused by the recent hurricane.
China and the CIA Are Competing to Fund Silicon Valley’s AI Startups -- A trio of new investments in Silicon Valley machine-learning startups shows that the U.S. intelligence community is deeply interested in artificial intelligence. But China is investing even more in these kinds of U.S. companies, and that has experts and intelligence officials worried.Founded to foster new technology for spies, the 17-year-old In-Q-Tel has also helped boost commercial products. (Its investment in a little company called Keyhole helped produce Google Maps.) Compared to a venture capitalist firm whose early-stage investments are intended to make some money and get out, the nonprofit’s angle is longer term, less venture, more strategic, according to Charlie Greenbacker, In-Q-Tel’s technical product leader in artificial intelligence, machine learning, natural language processing, analytics, and data science.“Our model is to put a little bit of pressure at the right spot to influence a company to make sure it develops things that are useful to our customers,” said Greenbacker, who estimated that their investments in a given startup generally amount to about one of every 15 dollars the company has. Greenbacker recently discussed In-Q-Tel investments that underline the specific areas that the CIA and other spy agencies want to use AI for: image recognition, natural language processing, and predictive analytics.
Weekly Initial Unemployment Claims increase to 249,000 --The DOL reported:In the week ending November 11, the advance figure for seasonally adjusted initial claims was 249,000, an increase of 10,000 from the previous week's unrevised level of 239,000. The 4-week moving average was 237,750, an increase of 6,500 from the previous week's unrevised average of 231,250. Claims taking procedures continue to be severely disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico and they are now processing backlogged claims. The previous week was unrevised. The following graph shows the 4-week moving average of weekly claims since 1971.
BLS: Unemployment Rates Lower in 12 states in October; Alabama, Hawaii and Texas at New Series Lows - Note from the BLS on Puerto Rico: The Puerto Rico household survey was conducted for the October 2017 reference period. However, the response rate was below average, in part as a result of difficulties accessing some remote areas that were significantly affected by Hurricanes Irma and Maria. From the BLS: Regional and State Employment and Unemployment SummaryUnemployment rates were lower in October in 12 states, higher in 1 state, and stable in 37 states and the District of Columbia, the U.S. Bureau of Labor Statistics reported today. Twenty-three states had jobless rate decreases from a year earlier, 2 states and the District had increases, and 25 states had little or no change. The national unemployment rate edged down to 4.1 percent in October and was 0.7 percentage point lower than a year earlier.... Hawaii had the lowest unemployment rate in October, 2.2 percent, followed by North Dakota, 2.5 percent. The rates in Alabama (3.6 percent), Hawaii (2.2 percent), and Texas (3.9 percent) set new series lows. ... Alaska had the highest jobless rate, 7.2 percent. This graph shows the current unemployment rate for each state (red), and the max during the recession (blue). All states are well below the maximum unemployment rate for the recession. The size of the blue bar indicates the amount of improvement. The yellow squares are the lowest unemployment rate per state since 1976.Fourteen states have reached new all time lows since the end of the 2007 recession. These fourteen states are: Alabama, Arkansas, California, Colorado, Hawaii, Idaho, Maine, Mississippi, North Dakota, Oregon, Tennessee, Texas, Washington, and Wisconsin. The second graph shows the number of states (and D.C.) with unemployment rates at or above certain levels since January 2006. At the worst of the employment recession, there were 11 states with an unemployment rate at or above 11% (red). Currently one state has an unemployment rate at or above 7% (light blue); Only two states and D.C. are at or above 6% (dark blue). The states are Alaska (7.2%) and New Mexico (6.1%). D.C. is at 6.6%.
Unemployment falls as a majority of states see job growth -The State and Regional Employment report for October, released today by the Bureau of Labor Statistics shows a majority of states added jobs and experienced decreases in unemployment rates. From July to October, 32 states added jobs, with New Mexico (1.3 percent), Idaho (1.1 percent), Utah (0.9 percent), Arizona (0.7 percent), and South Carolina (0.7 percent) making the largest percentage job gains. Over that same period, job loss occurred in 18 states and the District of Columbia, up from 13 states in last month’s report. The largest job losses occurred in Rhode Island (-0.8 percent), North Dakota (-0.7 percent), Connecticut (-0.6 percent), Maine (-0.5 percent) and Wyoming (-0.5 percent).“Most states continued their slow-but-steady progress toward a full recovery, but we need more states to see job gains and lower unemployment rates before we can truly say we’re out of the woods,” said EPI analyst Janelle Jones. “Rather than cutting taxes for corporations and the wealthiest Americans, Congress should look for ways to aid economic recovery in the states.” From July to October, employment rates fell in 28 states. Alabama (-0.9 percentage points), Arizona (-0.6 percentage points), Massachusetts (-0.6 percentage points), and Hawaii (-0.5 percentage points) saw the largest declines in unemployment. Over the same months, the unemployment rate increased in 16 states and the District of Columbia. The largest increases in unemployment rates occurred in Indiana (0.8 percentage points), Michigan (0.8 percentage points), New Jersey (0.7 percentage points), and Oregon (0.5 percentage points). In sex states the unemployment rate remained unchanged: Delaware, Montana, North Carolina, Oklahoma, South Carolina, and Washington.
A New Supreme Court Case Could Cripple Public Employee Unions - Should Mark Janus prevail in his Supreme Court case, public-sector employees in California and other states who now pay agency fees instead of union dues will be able to opt out of any payment at all—even though they can still benefit from collective bargaining contracts and turn to the union with grievances, enjoying a free ride that drains union resources.The ruling would undermine the ability of public-sector unions—about half of U.S. organized labor—to set standards for wage and workplace conditions. The resulting financial pressure will hamper unions from taking lead roles in policy debates on such issues as health care. “The short-term [goal] is to reduce the ability to collect dues,” said Raphael Sonenshein, executive director of the Pat Brown Institute for Public Affairs. “The long-term aim is to weaken collective bargaining.” Anti-union forces, often funded by corporate-backed foundations, have been on the attack for decades. One stunning victory was the 2011 passage of Wisconsin’s Act 10, that state’s “budget repair” bill. Republican Governor Scott Walker, long a vocal enemy of public-sector unions, introduced it to address a $3.6 billion budget shortfall. Act 10 gutted public-sector union collective bargaining rights, leaving unions unable to negotiate wages—except raises attached to the cost-of-living—along with pensions, work conditions such as hours worked, sick leave and vacations. In other words, all the things that, for many, make it worth paying union dues. The law also loosened restrictions on local governments’ hiring and wage policies, while allowing wage freezes and requiring higher employee health-care contributions. Act 10 knee-capped labor as a political force in an historically union state — the first to recognize public-sector unions. By 2014 the once-robust Wisconsin State Employees Union had lost 60 percent of its members; its annual budget dropped from $6 million to $2 million.
Millions fewer would get overtime protections if the overtime threshold were only $31,000 - EPI --Federal law requires that people working more than 40 hours a week be paid 1.5 times their rate of pay for the extra hours, but exempts salaried workers who make above a certain salary threshold and are deemed to have “executive, administrative, or professional” duties. The salary threshold is meant to help protect salaried workers with little bargaining power—for example, low- or modestly-compensated front-line supervisors at fast food restaurants—from being forced to work unpaid overtime. But, at $455 per week (the equivalent of $23,660 per year), the overtime threshold has been so eroded by inflation that it is now less than the poverty rate for a family of four. If the rule had simply been adjusted for inflation since 1975, today it would be well over $50,000. In 2016, the Department of Labor published a highly vetted, economically sound rule that would have increased the threshold to $913 per week ($47,476 per year). However, a district court judge in Texas ruled that the new overtime threshold is invalid. While the Trump DOL plans to appeal the judge’s flawed ruling, they will not defend the $47,476 threshold. Instead, they intend to propose a new threshold, and have asked the court to stay the appeal while they engage in new rulemaking.DOL officials have repeatedly indicated that they would prefer a salary threshold far below $47,476—rolling back protections for millions of workers. It is likely that they are considering proposing a new threshold of around $31,000. EPI estimated that the 2016 rule, with a salary threshold of $47,476, would have provided new or strengthened overtime protections to 12.5 million workers. Using that same data, we find that a threshold of $31,000 would provide new or strengthened protections to only 3.4 million workers. In other words, 9.1 million workers—close to three-quarters of the 12.5 million—would be left out. The table below shows how many people in each state would not get new or strengthened overtime pay protections if the threshold were set at $31,000 instead of $47,476. Setting the salary threshold below the 2016 level would roll back a long overdue wage increase for American workers across the country.
Poll: Nearly half of white Southerners feel like they’re under attack - The Hill - Nearly half of white American poll respondents living in the South feel like they’re under attack, a new Winthrop University poll found.Forty-six percent of white Southerners polled said they agree or strongly agree that white people are under attack in the U.S. More than three-fourths of black respondents said they believe racial minorities are under attack. And 30 percent of all respondents in the poll agreed when asked if America needs to protect and preserve its white European heritage. More than half of respondents disagreed with the statement. Forty percent of respondents said they believed that Confederate statues should remain as is, while nearly a quarter said a plaque should be added to contextualize the statue.Twenty-seven percent of respondents said the statues should be moved to a museum. Nearly half of black respondents said the statues should be in museums, and a quarter said they should be completely removed. Southerners overall said that racism is the most important issue facing the U.S., and black respondents were twice as likely to say it is the most important issue.
BUSTED: Watch U.S. Cops Plant Drugs in Black Suspect's Wallet – Unaware Their Body Cams Were on - An investigation into what is being captured on the body cams worn by Los Angeles police has turned up evidence of officers planting drugs in a suspect’s wallet while believing their cameras were off.According to CBS-LA, Los Angeles police are now wearing the body cams, but police officials are withholding the videos from the public. However, the station was able to acquire video of one black man being arrested for a hit and run, with the video showing something quite different from what was documented in the official police report.The report documents the arrest of Ronald Shields, 52, in April when he was taken into custody for a hit and run. According to the police report, LAPD officer Samuel Lee stated that cocaine was found in Shields’ front left pocketBut the body cam of a fellow officer showed one officer picking up the small packet from the ground and placing it in the suspect’s wallet — before making a show of discovering it multiple times for the camera.According Shields’ attorney, Steve Levine, officer Lee seemed stunned when he was shown the video while on the witness stand, saying the officer, “Looked dumbstruck to me. Period. He had really no answer.”According to an expert discussing how the body cams work, the officer may not have realized that the camera was running 30 seconds before he believed he activated it.Confronted by CBS reporter David Goldstein, both officers involved in the bust refused to comments on the discrepancy between their reports and what was shown on-camera. Watch the video below via CBS-LA:
86 Percent of Women in U.S. Jails Are Sexual-Violence Survivors -- According to a recent study, 86 percent of women who have spent time in jail report that they had been sexually assaulted at some point in their lives. As well, while women represent just 13 percent of the jail population between 2009 and 2011, they represented 67 percent of the victims of staff-on-inmate sexual victimization. Sexual violence is so pronounced among jailed and incarcerated women that Sen. Cory Booker, (D-NJ,) labeled the overarching phenomenon as "a survivor-of-sexual-trauma to prisoner pipeline." These numbers come from the Vera Institute of Justice, which authored a survey last year titled "Overlooked: Women and Jails in an Era of Reform." Given the rising numbers of incarcerated women, specifically in local jails, and the lack of research on them, the Institute wanted to examine who those women were and what adversities they faced. Other findings were equally alarming as those above. Two thirds of the women in jail are of color, and the majority of that population is also low-income. Further, nearly 80 percent of the incarcerated are mothers, most of them raising a child without a partner. Eighty-two percent were incarcerated for nonviolent offenses, while 32 percent have serious mental illness and 82 percent suffer from drug or alcohol addiction. Finally, 77 percent of those polled were victims of partner violence and and another 60 percent experienced caregiver violence.
Female Corrections Officers Sue Cook County Over "Masturbating Inmates" - In a story that brings to mind one grotesque yet memorable scene from the classic thriller “Silence of the Lambs”, three female corrections officers in Cook County have filed a lawsuit claiming that Sheriff Tom Dart has ignored their complaints about grossly inappropriate behavior by male inmates who “brazenly masturbate” in front of female guards, the Chicago Sun-Times reported.A lawyer for veteran corrections officers Sdahrie Howard, Denise Hobbs and Ellenor Altman said the trio and their fellow female officers who work in the Cook County jail complex have had to deal almost daily with being threatened, harassed - and even sometimes groped.Compounding problems for the women, supervisors have discouraged them from filing complaints about the behavior, telling them witnessing the behavior is “part of the job” - something they’ve also factored into their lawsuit. “They really do fear for their safety,” said attorney Marni Willenson, who represents the three officers. “Women have a right to go to work without looking over their shoulder fearing they’re going to be raped or aggressively exposed to genitalia."The lawsuit, which is seeking class action status, was filed Friday in US District Court, two years ago, the women filed a complaint with the Equal Opportunity Employment Commission. In a striking coincidence, the corrections officers’ filed their suit just days after female lawyers at the Cook County Public Defender’s Office filed a similar lawsuit making similar allegations about harassment from inmates.
Baltimore School Test Scores and Baltimore School Spending -- I’ve noted before I have a bit of an interest in Baltimore because my wife originates from there, so I noticed this story: An alarming discovery coming out of City Schools. Project Baltimore analyzed 2017 state testing data and found one-third of High Schools in Baltimore, last year, had zero students proficient in math. Contrast that with this: The Baltimore City Public School System spent the fourth most per student during the 2014 fiscal year out of the 100 largest public school districts in the country, according to a new report by the U.S. Census Bureau.The city’s school district, which is the 38th largest elementary and secondary public school district in the country, spent $15,564 per pupil during the time frame. Maryland has four of the 10 highest per pupil spending public school districts, with Howard County Schools rounding out the top five with a per pupil spending of $15,358.Montgomery County schools was sixth with $15,181, Prince George’s County was eighth with $13,994 and Baltimore County came in 12th with $13,338.According to the Census Bureau, this is the seventh consecutive year Maryland has had four public school districts rank in the top 10 of per pupil spending. Baltimore City was beat out by Boston public schools ($21,567), New York City ($21,154) and the Anchorage School District in Alaska ($15,596).The country as a whole saw a 2.7 percent increase to $11,009 in per pupil spending from 2013 to 2014. This was the largest increase in per pupil spending since 2008.Maryland came in at 11th out of the 50 states plus Washington, D.C., in average per pupil spending across the state at $14,003. New York spend the highest per pupil at $20,610 and Washington, D.C., was second at $18,485. Utah had the lowest per pupil spending at $6,500. Why are test results in Baltimore so bad? It obviously isn’t for lack of spending.
Attendance At Baltimore City Schools Crashes To 13 Year Low Just As Juvenile Crime Spikes - Project Baltimore, an investigative reporting series conducted by a local Fox affiliate in Baltimore City, has sifted through over a decade of high school records and discovered that attendance at city high schools in 2017 suddenly dropped to a 13-year low of just 76%. Just to state the obvious, the average high school in Maryland has around 1,200 students so that means that, on an average day, nearly 300 of them don't bother to show up. Adding insult to injury, Baltimore City Police Spokesman T.J. Smith told Fox 45 that it's no coincidence that violent crime is spiking in the city just as more and more teenagers are opting to skip class. From violent attacks on Halloween night, to a terrifying carjacking and a man pushed into the Inner Harbor. Baltimore City is under siege by criminals that, police say, are teenagers. “Every single one of them involve juveniles, who are all walking the streets today because they are probably not in school, where they belong.”Meanwhile, Project Baltimore found that 39% of Baltimore City high school students were technically considered "chronically absent," a threshold that should result in fines or even jail time for parents...that is, if school administrators actually fulfilled their reporting requirements.
The Super Wealthy Oxycontin Family Supports School Privatization With Tactics Similar to Those That Fueled the Opioid Epidemic -- The notoriously secretive Sackler family, also known as the OxyContin Clan, has been the subject of much scrutiny of late, including lengthy exposés in the New Yorker and Esquire shining a harsh light on the connection between the drug that made the Sacklers wealthy and their philanthropic giving. But there is another troubling beneficiary of Sackler largesse that has escaped public scrutiny: charter schools. OxyContin heir and Purdue Pharma director Jonathan Sackler is a major funder of charters and an extensive network of pro-charter advocacy groups. The same influence techniques Purdue used to promote painkillers are now being used by Jonathan Sackler to expand charter schools. The late Arthur Sackler devised strategies to promote drugs like Librium and Valium. Now, some of those same strategies are now being used with the aim of promoting charter schools. Jonathan Sackler, Arthur’s nephew, is a well-known name in the education reform movement. He founded the charter school advocacy group ConnCan, progenitor of the nationwide group 50CAN, of which he is a director. He is on the Board of Directors of the Achievement First charter school network. Until recently, Sackler served on the board of the New Schools Venture Fund, which invests in charter schools and advocates for their expansion. He was also on the board of the pro-charter advocacy group Students for Education Reform. Through his personal charity, the Bouncer Foundation, Sackler donates to the abovementioned organizations, and an ecosystem of other charter school promoting entities, such as Families for Excellent Schools ($1,083,333 in 2014, $300,000 in 2015 according to the Foundation’s Form 990s) Northeast Charter School Network ($150,000 per year in 2013, 2014 and 2015) and $275,000 to Education Reform Now (2015) and $200,000 (2015) to the Partnership for Educational Justice, the group founded by Campbell Brown which uses “impact litigation” to go after teacher tenure laws. Earlier this year, the Partnership for Educational Justice joined 50CAN, which Sackler also funds ($300,000 in 2014 and 2015), giving him a leadership role in the controversial—and so far failing cause—of weakening worker protections for teachers via the courts. Just as Arthur Sackler founded the weekly Medical Tribune, to promote Purdue products to the medical professional who would prescribe them, Jon Sackler helps to fund the74million.org, the “nonpartisan” education news website founded by Campbell Brown.
Education Scholarship Tax Credits Help Children and Advance Liberty by Ron Paul - Shutting down the Department of Education and returning control of the education dollar to the American people is the key to improving education. The best way to put the people in charge of education is by shutting down all unconstitutional bureaucracies, repealing the Sixteenth Amendment, and ending the Federal Reserve’s money monopoly.Since Congress is unlikely to restore constitutional, limited government in the near future, supporters of quality education must advance policies aimed at giving Americans control over the education dollar so they can seek alternatives to the federally-controlled system.This is why I have always supported education tax credits and deductions.When I was in Congress, I introduced legislation providing tax credits for contributions to education scholarship funds. These funds provide K-12 scholarships to low-income-family students whose parents cannot afford private schools. These scholarship funds allow these children to escape government schools that have been ruined by federal “reforms” like No Child Left Behind and Common Core, as well as mandates such as the ones dictating what can be served in school cafeterias.Including education scholarship tax credits in the tax reform bill currently before Congress would be a major step toward creating a free market in education. In a free market, parents could select the type of education that best suits the unique needs of their children, instead of the demands of politicians and bureaucrats. Schools could compete on the basis of academics, extracurricular activities, and even lunch menus. Those with unique and innovative education ideas would be free to establish schools and prove their models’ superiority. Moving to a free-market education system would increase the amount of money spent on educating children.This is because in a free market resources would not be siphoned away from the classroom to support a bloated federal bureaucracy and schools would not be force to waste valuable resources proving they are complying with federal regulations. By increasing competition, education scholarship tax credits encourage government-run schools to improve.
Fewer International Students Are Coming To The U.S. - The number of new international students coming to the United States to study fell for the first time in more than a decade this fall, a new study found. In the first class to apply to and enroll in American colleges since the 2016 election, the number of new foreign students fell over 3%, according to the Institute for International Education — the first time in the report's 12-year history that there was a decline in new enrollment. Almost half of the 500 US campuses surveyed reported declines in new student enrollment, with an average drop of 7%.The election of Donald Trump last fall prompted widespread fears that foreign students might be deterred from enrolling in US colleges, where, because they usually pay full tuition, they are often a vital source of revenue. It's not clear, however, whether the election and Trump's rhetoric, or other factors — like increased competition from other Western nations — are driving the declines.While an IIE report earlier this year found no change in the rate at which international students accepted offers of admission, it found high levels of anxiety among students from India and the Middle East, who feared whether they would be able to secure visas and worried for their physical safety. And many colleges told IIE they worried that students who accepted their offers of admission might not actually show up on campus in the fall. Many of the sharpest declines noted in the report released Monday were driven by countries that reduced their investment in international scholarships — like Brazil and Saudi Arabia. Still, there are indications that international students, especially from places like China and India, are turning elsewhere for college.In Canada and Australia, especially, many colleges saw dramatic increases in applications and in student visas. Canadian schools that saw sharp gains in applications said those students might otherwise have gone to the US. The overall number of foreign students in the US continued to rise, however, increasing by 3% as many international students remained in the US on postgraduate training visas. And some elite colleges — seen as juggernauts for international education — saw sharp jumps in the number of foreign students enrolled, an indication that many are still aggressively pursuing international enrollment. New York University, whose international enrollment dwarfs virtually all other colleges, saw an increase of 11%, to more than 17,000 foreign students. Columbia University's international enrollment grew by almost 10%.
49% Favor Mandatory Military Service For US Youth - Nearly half of Americans favor mandatory military service for the country’s youth, according to a recent poll from Gallup. As TheAntiMedia's Carey Wedler details, the polling organization surveyed 1,006 Americans over the age of 18 between November 3 and November 4, and 49% of those questioned expressed support for compulsory service. Further, “a majority of Republicans, including independents who lean Republican, favor it (57%), as do men (57%) and those 65 or older (66%),” Gallup summarized. Gallup noted that efforts to actually impose such a policy - such House Rep. Charles Rangel’s repeated attempts between 2003 and 2015 to mandate it through legislation - have fallen flat. Americans’ preferences for a traditional draft have fluctuated over the decades. Gallup explained:“A majority of Americans (54%) in 1977 favored sticking to a volunteer force, but two 1980 surveys showed a majority wanting to return to a military draft. Eventually, most Americans endorsed the all-volunteer concept, with five polls conducted between 1998 and 2007 showing majorities from 69% to 85% rejecting a return to the draft.”The draft was a powerful point of contention during the divisive Vietnam War, prompting many of those selected to fight to burn their draft cards in protest. In Gallup’s poll idea of forcing young people to serve a mandatory year in the armed forces - as opposed to a draft - was unsurprisingly least popular among young people. Four in ten favored the proposition, however, marking a significant portion of those who would potentially be affected but still wanted to see it enacted. “While Americans today are not overwhelmingly in favor of it, neither are they overwhelmingly opposed,” Gallup observed.
University systems allow sexual harassers to thrive - From entertainment to academia, accusations of these people's abuses of power have helped to create a sea change in the numbers of people willing to discuss sexual harassment in the workplace. Much of the conversation has concerned condemnation of harassers and praise for those who come forward to talk about what they have seen and experienced. This puts an interpersonal frame on a systemic problem. Attention must also be paid to systems that allow harassers to thrive. In 2006, I joined the Brain and Cognitive Sciences Department at the University of Rochester, New York, as a PhD student. This August, I joined other female graduate students and postdocs who contributed testimony to a complaint to the US Equal Employment Opportunity Commission over sexual harassment, poor handling of investigations of our claims and discrimination. We described how we actively avoided Florian Jaeger, a professor in our department, because of his frequent sexual innuendos, pressure to have intimate relationships and other unprofessional behaviour. We were faced with the unfair and unreasonable choice of losing professional opportunities or exposing ourselves to profoundly disturbing encounters. As a graduate student, I had mistakenly believed that the only instances of sexual harassment that could be brought forward were the most egregious: assault or quid-pro-quo propositions. I was unaware of legal precedents involving pervasive harassment creating a hostile and unequal environment. I was also unaware of the standard of preponderance of evidence, and thought that every instance had to be recorded and irrefutable. Graduate students and employees should not have to be legal scholars to win protections.
Grad Students Would Be Hit By Massive Tax Hike Under House GOP Plan - The plan would raise taxes on graduate students, who make very little money to begin with. Analysts say the provision could discourage students from seeking advanced degrees, hurting economic growth. There are a lot of anxious graduate students at universities around the country right now. That's because to help pay for more than $1 trillion in tax cuts for U.S. corporations, the House Republican tax plan would raise taxes on grad students in a very big way. These students make very little money to begin with. And many would have to pay about half of their modest student stipends in taxes. "The past week this is what I've been talking about with other graduate students and classmates. I think we're all shocked," says Tamar Oostrom. She's in her third year of getting her Ph.D. in economics at the Massachusetts Institute of Technology. She and her classmates have been crunching the numbers. "This bill would increase our tax by 300 or 400 percent. I think it's absolutely crazy," Oostrom says. In exchange for helping to teach courses or working with professors on research projects, MIT gives students such as Oostrom a modest $30,000 stipend. And as part of the deal she also doesn't pay tuition. The arrangement is typical for many students at MIT and other universities. That tuition price tag at MIT is technically about $50,000, even though students like Oostrom don't have to pay it. Under the tax plan proposed by House Republicans, these students would have to report that tuition forgiveness as income.
Grad Students Are Freaking Out About the GOP Tax Plan. They Should Be - That document, which you can see for yourself here, details the devastating impact the GOP's recently unveiled tax-reform plan could have on the university's PhD candidates. Buried in that plan is a proposed repeal that would cause graduate students' tuition waivers to be counted as income—making them subject to taxes. The document analyzes how the repeal would affect graduate students in colleges across Carnegie Mellon. It's pretty bleak. The annual stipend for a PhD student in Carnegie Mellon's school of computer science is about $32,400. The university covers the student's $43,000 tuition, in exchange for the research she conducts and the courses she teaches. Under current law, the government taxes only a student’s stipend; the waived tuition is not taken into account. But under the GOP bill, her annual taxable income would rise from $32,400 to $76,234. Even factoring in new deductions also included in the proposal, the CMU document estimates her taxes would amount to $10,209 per year—nearly four times the amount under current law. That would slash her net annual stipend by 25 percent, from $29,566 to $22,191."It was just such a shock," says Coston, who expects her degree will take another five years to complete. If the repeal were to become law, it would take effect in 2018–2019. "It really changes the calculus on my finances. This suddenly makes a lot of things like rent, car payments, groceries, all that stuff, no longer affordable." And not just for her. Current and would-be graduate students fear that, were the bill to pass, getting a PhD in the US could become financially impossible. "I monitor all legislation at the state and federal levels that could affect graduate and professional students, and this is just—this would have the greatest negative impact of anything I've seen," says Samantha Hernandez, legislative director of the National Association of Graduate-Professional Students. "It would be devastating."
Why half of single parents with student loans default on their debts -- Student debt is even putting children in dire financial straits. About 46% of student parents who borrowed a federal student loan for the 2003-2004 school year defaulted on their debt within 12 years, according to an analysis of government data published Wednesday by the Center for American Progress, a left-leaning think tank. What’s more, half of single parents who borrowed for college defaulted. That’s compared to about 25% of borrowers without children.The findings add to a growing body of evidence that for some borrowers, student debt — typically an engine of economic mobility — is actually making it more difficult to move up the ladder. Defaulting on a federal student loan can ruin a borrower’s credit and put them at risk of having their wages, tax refunds and Social Security checks garnished, likely much-needed income for families with children.They’re more likely to attend community colleges and for-profit schools, which tend to have lower graduation rates than four-year public or four-year private, nonprofit colleges. And for-profit colleges, often aggressively recruit student parents. More than sixty percent of student-parents who defaulted on their debt attended a for-profit college, the analysis shows.Student-parents are also typically dealing with more demands on their time than other students. They often have to balance school with work that can help them provide for their children. And finding affordable child care is getting harder for student parents. The number of campus child care centers dropped 14.2% between 2004 and 2012, while the number of student parents grew by 29.7%. All of these challenges make it tough for student-parents to complete school, which means they’ll likely struggle to repay their loans. But student-parents are becoming an increasingly prevalent group on college campuses, which means it’s imperative that colleges figure out how to help this group be successful, Campbell said.
WTF Chart Of The Day: America's Youngest Child Brides & Grooms -- Between 2000 and 2015, at least 207,468 minors were married in the United States. As Statista's Martin Armstrong notes, despite an overall fall in child marriage since 2000 (25,583 to 9,247), there are still a shocking number of young children legally married in the country. Only 14 percent married other minors, meaning 86 percent wedded an adult.As the infographic below shows, the youngest to marry since 2000 were three ten year olds. According to Frontline, the three girls married men aged 24, 25 and 31 in Tennessee in 2001.While certain conditions have to be met before a minor can marry, and consent from a parent or judge is usually required, every state in the U.S. allows children to marry to some extent.In Oregon and Nebraska, for example, the lower limit is set at 17. In 26 states, there is no minimum age for marriage.
CalPERS Calls The Top: Largest Public Pension Fund Mulls Dumping $50 Billion Of Stocks -- Is the largest public pension fund in the United States getting ready to dump about $50 billion worth of stocks? According to a new note from Bloomberg, CalPERS' board is meeting for a workshop today in Sacramento to discuss asset allocations for the upcoming year which could include a doubling of the fund's bond allocation from 19% to 44% which would be funded with a massive $50 billion sell down of equities.Calpers is looking at a menu of options for its fixed-income target ranging from the current 19 percent to as much as 44 percent, according to a presentation for a board workshop in Sacramento coming up Monday. Equities could be cut to as little as 34 percent from 50 percent. Stocks were the best-performing asset class in fiscal 2017, returning almost 20 percent.“The markets have had a pretty good run and it’s possible Calpers staff is thinking this might be a good time to lock in some of the gains,” Keith Brainard, research director for the National Association of State Retirement Administrators, said in a phone interview.Unfortunately, as we've noted before (see: CalPERS Board Votes To Maintain Ponzi Scheme With Only 50bps Reduction Of Discount Rate), a shift toward higher fixed income allocations may require a simultaneous decrease in the fund's discount rate assumptions which could drastically increase contribution requirements from various public employers all around the Golden State.
Trump Picks Former Lilly Drug Executive as Health Secretary - President Donald Trump named former Eli Lilly & Co. executive Alex Azar to lead the Department of Health and Human Services after agency’s past chief resigned amid blowback over his taxpayer-funded private jet travel. If confirmed, Azar will take over the administration’s management of the Affordable Care Act. Trump and Congressional Republicans have called to repeal the health law, and the administration has taken steps to destabilize it, such as cutting funding for some programs and refusing to pay subsidies to health insurers. He’ll also be a key figure on drug costs. Trump has been highly critical of the drug industry, saying that pharmaceutical companies are “getting away with murder” and threatening to use the federal government’s buying power to bring down prices. However he’s taken no concrete action yet to do much on prices, and the former drug executive’s appointment may continue the trend of strong talk but little action, said Spencer Perlman, director of health-care research at Veda Partners, a policy analysis firm. “It is very unlikely the administration will take aggressive regulatory actions to control prescription drug prices,” Perlman said in a note to clients Monday. “The administration’s tepid response to drug pricing has not matched the president’s heated rhetoric.”
Surprise! Obamacare Enrollment Is Actually Rising - Donald Trump wants Obamacare to implode. That’s not a mischievous inference from his legislative misadventures; that’s a direct quote. “As I said from the beginning, let ObamaCare implode, then deal. Watch!” It’s thus somewhat surprising that on his watch, enrollment currently seems to be on track for its best year ever. In the first four days, 601,462 people signed up for insurance through the federal marketplace, a significantly faster pace than in earlier years. And almost a quarter of them were new to the exchanges.This is probably not what you expected. It’s not what I expected. Premiums are rising, insurers are pulling out, and the administration seems somewhat uninterested in encouraging people to enroll, having shortened the open enrollment period and defunded the cost-sharing subsidies for low-income enrollees.Nonetheless, open enrollment seems to be going swimmingly. So let me attempt to answer the question that is probably at the forefront of your mind: “What the hey?”Four days of data, however fascinating, are not quite enough to draw definitive conclusions. But I can outline some factors that could be contributing to this unexpected spike in enrollment, and what that suggests for the future of the troubled program.The first possibility is that the very failures in the exchange are, perversely, making it more attractive. Hear me out. In short, the premium increases have fallen especially heavily on the “benchmark” plans, which are the second-lowest-cost Silver plan available on a given exchange. Premiums for Bronze, Gold and Platinum plans have also gone up, but not so much. But because the premium subsidies are calculated based on that benchmark plan, this has the odd side-effect of making the other plans more attractive, at least to folks who are eligible for a subsidy. For many of the subsidy-eligible, the cost of a Gold plan, which covers 80 percent of expected health-care expenses, may actually be cheaper this year than it was last year, not because the cost of the plan fell, but because the subsidies rose so much. And many young and healthy people will be able to get a Bronze plan, which covers 60 percent of “actuarial value,” for practically peanuts.
Kept in the Dark About Doctors, but Having to Pick a Health Plan - NYT - It’s open enrollment season for Affordable Care Act marketplace plans, Medicare Advantage plans and many employer-sponsored plans as well. Lots of evidence suggests you should shop around, and shop carefully, though this is harder than it sounds.When you select a health care plan, you probably consider premiums, and maybe you check deductibles and other cost sharing. But you can’t easily scrutinize the plans’ networks and the quality of the doctors in them. That’s too bad, because you may be missing something important.Many health insurance options offered by employers or sold on the Obamacare marketplace come with narrower networks — covering treatment from a limited slate of doctors and hospitals. (Though there’s no official definition of a “narrow network,” many studies classify networks as narrow when they include less than about 30 percent of doctors or hospitals in the area.)Narrow network plans are cheaper, and insurers say they try to maintain quality as they narrow the choices they cover. Some appear to succeed, but some don’t, and that’s hard to fully assess before you sign up. It’s virtually impossible to thoroughly check the quality of doctors in each insurance plan. A typical plan, even a narrow one, may have a network of hundreds or thousands of physicians. It is a potentially simpler task just to know if you’re enrolling in a narrow or broad network plan. But in a study of Obamacare enrollees, for example, as many as 40 percent didn’t know this information, either. That confusion is understandable. A study of 2016 marketplace offerings in 13 states found that only two provided indications of network size. Eight of them, as well as HealthCare.gov, provided a way to look up whether a doctor was in a plan’s network, but only two could filter plans to show only those with providers a consumer selects. “To our surprise, we also found that few marketplaces could indicate which hospitals were in plans’ networks,” said Charlene Wong, a pediatrician and researcher at the Margolis Center for Health Policy at Duke University and lead author of the study. “In addition, none of these tools indicated network breadth by specialty.” This means that a “broad” network plan might actually be quite narrow for some specialists, without consumers knowing.
How Universal Health Coverage Can Be Done Right - In a July post on the Health Affairs Blog, we wrote that, like universal public education, universal health coverage, if done right, is an extraordinary public investment that could return far more to the economy than it costs in taxes. If a country wishes to outcompete a billion Chinese, we wrote, its workforce must not only be better educated but healthier than anyone else. In other words, health, like education, is not just about this or that individual’s well-being; good health is a critical national asset. A healthy population is abler, more productive, and less costly. Yet US health levels are increasingly lagging behind other advanced nations, although we spend far more, still uncontrollably increasing, on health care than any other nation. Our lagging health compromises not only the productivity of our workforce but of our military as well. We argue that, done right, universal health coverage could solve this growing national crisis: provide affordable access to high-quality care and coverage for all Americans, significantly raise the nation’s health, and seriously reduce cost. There are two primary reasons for this crisis in US health and expenditures. First, even though the Affordable Care Act (ACA) expanded coverage, financial access to care remains not only insufficient but seriously declining: Even mediocre coverage is becoming unaffordable to steadily increasing numbers of Americans. Second, the US health care system has powerful incentives to produce ever increasing medical services instead of health, to the point where at least 30 percent of services have little or negative value to health. The resulting soaring cost has been frustrating efforts such as the ACA to universalize coverage. Our health care system is doing many people good—but it is doing far too little good at far too great cost. This is not a consequence of bad providers but of a badly designed system that only good policy, not providers, can fix. An optimal policy solution would be a universal health coverage program that accomplishes, simultaneously, five goals: 1) universal access to 2) high-quality care and 3) coverage at a cost that both 4) individuals and 5) the nation can afford. And therein lies the rub: All goals must be accomplished simultaneously.
Puerto Rico's Power Outages Have Led To Medicine Shortages On Mainland - At MedStar Washington Hospital Center, doctors and nurses are moving as many patients as they can from intravenous medications to the same drugs in pill form. If the patients are getting common antibiotics like ampicillin, and they can swallow, they're likely to be switched to pills, says Bonnie Levin, assistant vice president of pharmacy services for MedStar Health, which includes 10 hospitals in the Washington, D.C., area. That's because MedStar, like many hospitals across the U.S., is running low on IV bags, especially the minibags that are used to deliver certain types of medicine. Some of these bags contain saline solution when shipped, and a nurse or hospital pharmacist adds the drug when it's ready to be used. Other bags come premixed with commonly used medicines. "The plain bags, the mixed bags. There are shortages of all kinds of small-volume medications," Levin says. The shortage is a direct result of hurricane damage in Puerto Rico. It has been eight weeks since Hurricane Maria hit the island, knocking out electricity and wreaking havoc on many roads, homes and other buildings.The storm damaged many of the island's more than 100 drug and medical device manufacturers. Puerto Rico produces about $40 billion worth of pharmaceuticals for the U.S. market, according to the Food and Drug Administration — more than any other state or territory.Three of those plants belong to Baxter, one of the biggest suppliers of IV bags to U.S. hospitals. All three of Baxter's plants shut down temporarily, the company says, and at least two are still running on generators. One of Baxter's factories that makes the minibags for intravenous medicines is very remote.
Thirty Million Americans Just Got High Blood Pressure - New guidelines issued by U.S. medical societies have expanded the definition of hypertension for the first time in 14 years, classifying 30 million more Americans as having high blood pressure. The change means almost half of the nation’s adults, or 103 million people, are technically classified as having hypertension, up from one-third. But don’t worry too much—if you are one of the newly initiated, the experts aren’t suggesting anything radical. Just take some common sense steps to avoid future cardiovascular complications. The update by the American College of Cardiology and the American Heart Association is based on a three-year review of almost 1,000 studies. A healthier diet and more exercise, unsurprisingly, are the primary recommendations for those who fall into the new category of stage 1 hypertension, previously called “pre-hypertension” or “high-normal blood pressure,” said Paul Whelton, chair of global public health at the Tulane University School of Public Health and lead author of the guidelines. “We didn’t like either of those terms because we felt—at that stage—somebody is already at substantial increased risk,” And for those who had normal blood pressure before the new gauge, Whelton had some good news: “Normal hasn’t changed.” For Americans under the age of 45, the change will triple the number of men and double the number of men diagnosed with hypertension Of those newly categorized as having high blood pressure, some 4.2 million also have other risk factors for heart disease. These individuals should start taking medicine to lower their numbers, the researchers said. While many patients need multiple drugs to get their blood pressure into a healthy range, most treatments are available as less-expensive generic pills.
An Early Winner Emerges In Trump's War On Opioids -- As with many of Donald Trump's other political initiatives, tackling an issue generally requires the promotion of a clear winner that will act as a means of achieving an objective while realizing significant benefits for the role being played. In the case of the opioid crisis, this approach means encouraging insurance companies to marginalize economic dynasties with a historical role in the creation of the crisis, while promoting competing organizations by granting them almost exclusive access to markets such as Florida, where they will scoop up the value of contracts previously held by Oxycontin producers. Oxycontin's problems have been building up for most of the year. Insurance giant Cigna, Aetna and Blue Cross have all been forced to begin taking measures to combat opioid addiction, as research increasingly indicates that the cost to public and private insurance companies of prescription painkiller abuse, treatment and "diversion" (when patients sell the medication instead of taking it) is an estimated $72.5 billion a year. The approach has so far been two fold: ending coverage of opioids, while working with the federal government to reward parties who provide products which will help curb the epidemic. In the case of Cigna, these measures have translated an announcement that they will end their coverage of Oxycontin starting in 2018. The move is coupled with a new contract with Collegium Pharmaceutical, a producer of an oxycodone equivalent (Xtampza ER) with abuse deterrence properties. In Florida, a major hotspot for opioid addiction, the state's largest insurer Florida Blue also abandoned Oxycontin for Collegium's Xtampza ER. As with Cigna, the shift will also occur on Jan 1st, 2018. Federal regulatory agencies have further rewarded Collegium by approving the company to make the claim that Xtampza is the only opioid on the market with an oral abuse deterrent. Coupled with Trump's vows to stamp out the opioid crisis, such a designation is a significant reward to a corporation willing to work with the federal government in assisting with a solution to the health crisis.
Liquid Gold: Pain Doctors Soak Up Profits By Screening Urine For Drugs - The cups of urine travel by express mail to the Comprehensive Pain Specialists lab in an industrial park in Brentwood, Tenn., not far from Nashville. Most days bring more than 700 of the little sealed cups from clinics across 10 states, wrapped in red-tagged waste bags. The network treats about 48,000 people each month, and many will be tested for drugs. The high-tech testing lab’s raw material has become liquid gold for the doctors who own Comprehensive Pain Specialists. This testing process, driven by the nation’s epidemic of painkiller addiction, generates profits across the doctor-owned network of 54 clinics, the largest pain-treatment practice in the Southeast. Medicare paid the company at least $11 million for urine and related tests in 2014, when five of its professionals stood among the nation’s top billers. One nurse practitioner at the company’s clinic in Cleveland, Tenn., single-handedly generated $1.1 million in Medicare billings for urine tests that year, according to Medicare records. Kaiser Health News, with assistance from researchers at the Mayo Clinic, analyzed available billing data from Medicare and private insurance billing nationwide, and found that spending on urine screens and related genetic tests quadrupled from 2011 to 2014 to an estimated $8.5 billion a year — more than the entire budget of the Environmental Protection Agency. The federal government paid providers more to conduct urine drug tests in 2014 than it spent on the four most recommended cancer screenings combined.
Popular Diestel Turkey Sold at Whole Foods Tests Positive for FDA-Prohibited Drugs - Diestel Turkey, sold by Whole Foods and other retailers at premium prices, says on its website that its "animals are never given hormones, antibiotics or growth stimulants." But Diestel Turkey samples tested by the U.S. Department of Agriculture (USDA) suggest otherwise, leading consumers to wonder: Can these companies be trusted? According to testing conducted under the USDA's Food Safety and Inspection Service (FSIS) National Residue Program, samples of Diestel Turkey products tested positive for numerous drug and antibiotic residues. One of those drugs, chloramphenicol , is strictly prohibited by the U.S. Food & Drug Administration (FDA) in food production because it's known to have "severe toxic effects in humans including bone marrow suppression or aplastic anemia in susceptible individuals." According to an amended complaint filed Nov. 13, against Diestel Turkey Ranch, the FSIS inspected Diestel turkeys on four dates in 2015 and 2016, and reported, in addition to chloramphenicol, residues of antibiotics important for human use, veterinary antibiotics, a hormone and other pharmaceuticals. Animal rights group Direct Action Everywhere is suing Diestel for falsely advertising its turkey products as hormone- and antibiotic-free, and for deceiving consumers about how the company's birds are raised and treated. According to the lawsuit, Diestel turkey products tested by the USDA were positive for residues of:
- • Ketamine, a narcotic. The Drug Enforcement Agency describes ketamine as "a dissociative anesthetic that has some hallucinogenic effects." Ketamine's street names include Special K, Cat Tranquilizer, and Cat Valium, the latter two referencing its veterinary uses, and it is commonly referred to as a club drug because it is used illegally at dance clubs and raves. The FDA has not approved the use of ketamine in poultry.
- • Amikacin, an antibiotic for human use that the FDA considers important for humans
- • Spectinomycin, also an antibiotic for human use
- • Hygromycin, an antibiotic for veterinary use
- • Ipronidazole, also a veterinary pharmaceutical
- • Melengestrol acetate, also known as MGA, a synthetic hormone
- • Sulfanitran, an antibacterial drug feed additive
FDA Approves a Digital Pill That Can Track When You Swallowed It -- U.S. regulators approved the first medicine with an embedded sensor to help keep track of whether patients with mental illness are adhering to their prescriptions. The decision marks a milestone in the convergence of technology and health care that also raises privacy concerns. The so-called digital pill is a version of Otsuka Pharmaceutical Co.’s Abilify, which treats depression, bipolar disorder and schizophrenia. The sensor, developed by Proteus Digital Health, is activated by stomach fluids, sending a signal to a patch worn on the patient’s torso and transmitting the information to a smartphone app. “This is the first time we’ll have an objective measurement of adherence,” said Kabir Nath, chief executive officer for North America at Otsuka Pharmaceutical. By allowing physicians to track a patient’s use, Nath said he hopes to avert “dramatic and immediate health-care crises, such as for schizophrenia patients where missing medicines can result in a psychotic break which will land them in an ER.” The Food and Drug Administration’s approval late Monday comes as the technology sector increasingly turns to health care to test advances like machine learning, artificial intelligence and micro-electronics for everything from drug development to insurance. “Being able to track ingestion of medications prescribed for mental illness may be useful for some patients,” Mitchell Mathis, director of the Division of Psychiatry Products in the FDA’s Center for Drug Evaluation and Research, said in a statement. Through an app, patients can also opt to report activity, rest and mood information to share with their caregiver, the companies said. While many in the health industry are embracing new technology, others worry about protecting patient privacy as more data is generated and shared.
First Digital Pill Approved to Worries About Biomedical ‘Big Brother’ - For the first time, the Food and Drug Administration has approved a digital pill — a medication embedded with a sensor that can tell doctors whether, and when, patients take their medicine.The approval, announced late on Monday, marks a significant advance in the growing field of digital devices designed to monitor medicine-taking and to address the expensive, longstanding problem that millions of patients do not take drugs as prescribed. Experts estimate that so-called nonadherence or noncompliance to medication costs about $100 billion a year, much of it because patients get sicker and need additional treatment or hospitalization.“When patients don’t adhere to lifestyle or medications that are prescribed for them, there are really substantive consequences that are bad for the patient and very costly,” said Dr. William Shrank, chief medical officer of the health plan division at the University of Pittsburgh Medical Center.Ameet Sarpatwari, an instructor in medicine at Harvard Medical School, said the digital pill “has the potential to improve public health,” especially for patients who want to take their medication but forget. But, he added, “if used improperly, it could foster more mistrust instead of trust.” Patients who agree to take the digital medication, a version of the antipsychotic Abilify, can sign consent forms allowing their doctors and up to four other people, including family members, to receive electronic data showing the date and time pills are ingested. Dr. Peter Kramer, a psychiatrist and the author of “Listening to Prozac,” raised concerns about “packaging a medication with a tattletale.” While ethical for “a fully competent patient who wants to lash him or herself to the mast,” he said, “‘digital drug’ sounds like a potentially coercive tool.”
The CDC mapped out where people with cancer live in the US — here's what it found -- Cancer is the second leading cause of death in the US, accounting for one in four deaths in Americans, according to the Centers for Disease Control and Prevention. Over the last few decades, cancer death rates have been falling, with the exception of a few key types of cancer: liver, pancreatic, and endometrial cancer. To get a better look at the incidence of cancer and cancer death rates across the US, the CDC mapped out the data on a state-by-state level. Here's what they found. This map looks at the rate of new cancer cases by state per 100,000 people. This is specifically looking at 2013, which is the most recent year available. The darker the color, the higher the rate. The CDC was also able to capture the rates of cancer deaths in the US per 100,000 people. "Cancer counts and rates are essential to measuring progress and targeting action toward this major cause of death among Americans," the CDC said. The data shows that Kentucky has the overall highest rate of cancer deaths (199.3 deaths per 100,000 people), while Utah has the lowest rate (127.9 deaths per 100,000 people). The data can also be broken down by type of cancer and sex. Here's what the rates of cancer deaths look like related to pancreatic cancer. In Florida, there were 2,803 cases reported in 2013.If you want to look at the overall number of new cancer diagnoses, the CDC breaks down that map as well. The page also provided breakdowns of the leading new cancer cases alongside the 10 types of cancer that caused the highest rate of cancer deaths in 2013. Lung and bronchial cancer was the leading cause of cancer deaths for both men and women, while the highest rates of new cancer were breast for women and prostate for men.
Study Links Osteoporosis to Air Pollution - Exposure to air pollution is known to cause a vast array of respiratory health problems, but in a new study, researchers at Columbia University's Mailman School of Public Health have determined that air pollution can also weaken bones. The paper , published in The Lancet Planetary Health, is the first to document high rates of hospital admissions for bone fractures in communities with elevated levels of ambient particulate matter (PM2.5). Unfortunately, as a press release for the study noted, risk of bone fracture admissions is greatest in low-income communities. In the U.S., air pollution is especially high in poorer communities. For the study, researchers analyzed osteoporosis-related fracture hospital admissions among 9.2 million people between 2003 and 2010 and found that even a small increase in PM2.5 concentrations would lead to an increase in bone fractures in older adults. A further eight-year followup of 692 middle-aged, low-income adults found that participants living in areas with higher levels of PM2.5 and black carbon (the soot that comes from gas and diesel engines, coal-fired power plants and other fossil fuel sources) had lower levels of parathyroid hormone (a key calcium and bone-related hormone) as well as greater decreases in bone mineral density than those exposed to lower levels of the two pollutants. The researchers noted that particulate matter can cause systemic oxidative damage and inflammation, which could accelerate bone loss and increase risk of bone fractures in older individuals.. Smoking cigarettes as an example contains several particulate matter components and has been identified as a risk factor for osteoporosis and bone fracture.
Decrease in sunshine, increase in rickets - A University of Toronto student and professor have teamed up to discover that Britain's increasing cloudiness during the summer could be an important reason for the mysterious increase in Rickets among British children over the past few decades. Hospitalizations of children due to the disabling bone disease, caused by lack of vitamin D, began dramatically increasing starting in the mid-1990s, puzzling public health experts. Some have pointed to changing immigration patterns, since people with darker skin absorb less vitamin D from the sun. Others are looking at shifting diets or changes in hospital admission policies. But Haris Majeed, a Master's student in Medical Imaging at U of T's Faculty of Medicine, wondered if long-term climate variability in sea surface temperatures played a role. With a Bachelor's in Earth Sciences, mathematics, and biology, a Master's in geophysics, and an interest in public health, Majeed was in a unique position to connect the dots between shifting climate patterns and population health. "Sea surface temperatures are getting warmer over the North Atlantic, and are known to fluctuate every 60 to 80 years," says Majeed. "After the mid-1990s, North Atlantic sea surface temperatures entered a warm phase, decreasing average summer atmospheric pressures and causing more rain, and less sunshine, in the UK." They found that median incidences of Rickets, which had been declining since the 1960s, almost doubled between 1997 and 2011, going from 0.56 cases per 100,000 British children to 1.01 cases. In the UK, health experts have determined that six hours a month of sunshine is needed to produce enough vitamin D in people's skin. But since the mid-1990s, increasing cloud cover has deprived the islands of about four hours of sunshine per month in the summer. Since the mid-1990's, the UK has received only an average of 183 hours of sunshine per summer month. "Nobody thought of the sun,"
Special Report: Lead poisoning lurks in scores of New York areas - Reuters - Areas of high lead exposure risk remain throughout America’s largest and richest city, a Reuters exploration of blood testing data found. In the first examination of its kind, reporters obtained New York childhood blood testing data down to the census tract level – neighborhood areas with some 4,000 residents apiece. In densely populated New York, a tract often covers several square blocks. While poisoning has nearly been eliminated in many neighborhoods, Reuters identified 69 New York City census tracts where at least 10 percent of small children screened over an 11-year period, from 2005 to 2015, had elevated lead levels. That is twice the rate found across Flint, Michigan, during the peak of its notorious water contamination crisis in 2014 and 2015, where the Centers for Disease Control and Prevention found 5 percent of children’s tests were high. The risk areas spanned New York neighborhoods and demographic groups. Peeling old paint is a conspicuous hazard, but reporters tracked other perils hiding in plain sight, from leaded soil and water, to dangerous toys, cosmetics and health supplements. In 2015, 5,400 city children tested with an elevated blood lead level, 5 micrograms per deciliter or higher, New York’s most recent annual report on lead poisoning showed. More than 800 had levels at least twice that high. Previously undisclosed data explored by Reuters offers a hyper-local look at neighborhood areas where the city has fallen short of its eradication goal. “New York’s prevention program is renowned, so the fact it still has pockets like these shows how challenging this issue is on a national scale,”
Hospitals fill up in Delhi as 'killer' smog continues - "This smog is a silent killer. In the years to come, the severe effects of this polluted air in our bodies will reveal its deadly effects," Prashant Saxena, head of pulmonology and critical care at New Delhi's posh Max hospital told Al Jazeera. He says there is a 20 to 25 percent increase in emergency patients and another 25 percent increase in the number of outpatients visiting him daily since a thick blanket of smog enveloped New Delhi last week. "The situation is uncontrollable and unmanageable for us. There is shortage of beds and even medicines and devices like nebulisers," Saxena said.The apex body of doctors in the country, Indian Medical Association (IMA), urged people to stay indoors as it declared a public health emergency in the wake of the worst pollution in years. New Delhi is the most polluted city in the world, and the burning of crops by farmers in the neighbouring states and industrial pollution has worsened the situation further. PM2.5 levels rose to 703 on November 7, which was more than the double the 300 mark deemed as "hazardous", forcing authorities to temporarily shut city schools. Since then PM2.5, which has been linked to lung and heart diseases, has regularly remained above 500 this week. The tiny particulate matter enters into the lungs and bloodstream. According to science journal The Lancet, about half a million Indians died prematurely in 2015 due to PM2.5 pollution.
Lower-Income Countries That Face The Most Rapid Shift In Noncommunicable Disease Burden Are Also The Least Prepared - Demographic and epidemiological changes are shifting the disease burden from communicable to noncommunicable diseases in lower-income countries. Within a generation, the share of disease burden attributed to noncommunicable diseases in some poor countries will exceed 80 percent, rivaling that of rich countries, but this burden is likely to affect much younger people in poorer countries. The health systems of lower-income countries are unprepared for this change. We examined the shift to noncommunicable diseases and estimated preparedness for the shift by ranking 172 nations using a health system capacity index for noncommunicable disease. We project that the countries with the greatest increases in the share of disease burden attributable to noncommunicable disease over the next twenty-five years will also be the least prepared for the change, as they ranked low on our capacity index and are expected to have the smallest increases in national health spending. National governments and donors must invest more in preparing the health systems of lower-income countries for the dramatic shift to noncommunicable diseases and in reducing modifiable noncommunicable disease risks.
Plague fears grow as Malawi becomes 10th nation on alert - Malawi is bracing itself for an outbreak of the plague after the deadly disease continues to spread across the island nation of Madagascar.At least 143 people have died and more than 2,000 others have been infected in Madagascar since an outbreak in early August this year.Yet Malawi's health secretary confirmed the country is ready for any reported cases of the disease amid mounting concerns of Africa's 'porous borders'.Dr Dan Namarika, principal secretary in the ministry of health, said the country were working in conjunction with Mozambique to help best prepare for a possible outbreak.South Africa, Mauritius, Seychelles, Tanzania, La Réunion, Mozambique, Kenya, Ethiopia and Comoros have all been warned they could be at risk from a possible outbreak as well. Health officials are unsure how this year's outbreak began. However, some believe it could be caused by the bubonic plague, which is endemic in the remote highlands of Madagascar. If left untreated, it can lead to the pneumonic form, which is responsible for two thirds of the cases recorded so far in this year's outbreak. Rats carry the Yersinia pestis bacteria that causes the plague, which is then passed onto their fleas. Forest fires drive rats towards rural communities, which means residents are at risk of being bitten and infected. Local media reports suggest there has been an increase in the number of blazes in the woodlands. Without antibiotics, the bubonic strain can spread to the lungs - where it becomes the more virulent pneumonic form. Pneumonic, which can kill within 24 hours, can then be passed on through coughing, sneezing or spitting. However, it can also be treated with antibiotics if caught in time.
Lyme disease is slowly spreading across the US East Coast - Lyme disease is the most common vectorborne disease in the United States, but it’s also mostly confined to a small swath of the country running down the eastern seaboard to the Mid Atlantic and along the Great Lakes. But while it was once thought that Lyme disease rarely occurred outside of the Northeast, a new report from the Centers for Disease Control confirms that Lyme is slowly expanding its geographic footprint. In 11 states that neighbor the 14 states where Lyme disease occurs frequently, the report found a significant increase in the number of confirmed Lyme cases. “Although concentrated in historically high-incidence areas,” the report said, “the geographic distribution is expanding into neighboring states.” Since 1991, when Lyme was first identified as a significant problem in the US, the number of annual cases has just about tripled. In recent history, somewhere between 30,000 and 40,000 cases have been reported to the CDC each year. Typically, ticks contract the disease from white-footed mice while still larvae, then pass it along to humans, deer, and other mice when they bite. It can be a brutal disease. If left untreated, it can spread to the muscles, joints, the heart, and even the brain. Some patients seem to suffer symptoms their whole life. It can be difficult to diagnose, hard to treat, and is often ignored.
Drug-resistant ‘nightmare bacteria’ show worrisome ability to diversify and spread - Harvard School of Public Health– A family of highly drug-resistant and potentially deadly bacteria may be spreading more widely—and more stealthily—than previously thought, according to a new study from Harvard T.H. Chan School of Public Health and the Broad Institute of MIT and Harvard.Researchers examined carbapenem resistant Enterobacteriaceae (CRE) causing disease in four U.S. hospitals. They found a wide variety of CRE species. They also found a wide variety of genetic traits enabling CRE to resist antibiotics, and found that these traits are transferring easily among various CRE species. The findings suggest that CRE is more widespread than previously thought, that it may well be transmitting from person to person asymptomatically, and that genomic surveillance of this dangerous bacteria should be increased.The study was published online January 16, 2017 in PNAS (Proceedings of the National Academy of Sciences).“While the typical focus has been on treating sick patients with CRE-related infections, our new findings suggest that CRE is spreading beyond the obvious cases of disease. We need to look harder for this unobserved transmission within our communities and healthcare facilities if we want to stamp it out,” said William Hanage, associate professor of epidemiology at Harvard Chan School and senior author of the study. CRE are a class of bacteria that is resistant to multiple antibiotics, including carbapenems, which are considered last-resort drugs when other antibiotics have failed. CRE, which tend to spread in hospitals and long-term care facilities, cause an estimated 9,300 infections and 600 deaths in the U.S. each year, according to the U.S. Centers for Disease Control and Prevention—and incidence is on the rise. CDC director Tom Frieden has called these ‘nightmare bacteria’ because they are resistant to some of the last-ditch treatments available to doctors battling resistant infections.
'Antibiotic Apocalypse' as Livestock Is Force-Fed 80% of Prescribed Antibiotics Worldwide - A recent report from the World Health Organization (WHO) describes the dangers humanity faces from overprescription of critical infection-fighting drugs, which has led to both superbugs and antibiotics' dwindling efficacy, making humans vulnerable to infections doctors otherwise regarded as benign. While overprescription in humans is a viable issue, recent statements from WHO express heightened concern over the ramifications from their misuse in the meat industry. Stop Using Antibiotics in Healthy Animals to Prevent the Spread of Antibiotic Resistance is the title of WHO's latest press release, reiterating a message that has been clear for decades. The current culture of force-feeding antibiotics to livestock presents a danger to millions of humans. At present, animals used for livestock are fed around 80 percent of prescribed antibiotics worldwide . The measure has been perpetuated by the low cost of the medicines , as well as antibiotics' proven ability to accelerate growth and weight gain in livestock, effectively speeding up the process of food production. In 2015, the U.S. used 34.3 million pounds of antibiotics on animals . The result is antibiotic-resistant bacteria in animals and humans through food and airborne pathogens. At present, 700,000 people die each year from antibiotic-resistant infections , and it is predicted that this number could increase to 10 million by 2050 , making low-risk operations like hip replacements and treatable urinary tract infections a new health crisis. The Guardian called the collapse an " antibiotic apocalypse ," wherein the world is set to face the same surgical risks it did before 1928, when penicillin was discovered. Essentially a century's worth of medical advances could be reversed. "A lack of effective antibiotics is as serious a security threat as a sudden and deadly disease outbreak." This is due in part to a lack of replacement therapies. In its statement, WHO warns that "there are very few promising options in the research pipeline." The Guardian pointed out that this is precipitated by the " failure of pharmaceutical companies to investigate and develop new sources of general medicines for the future." Perhaps, because what's broken is still paying off.
Current CRISPR gene drive systems are likely to be highly invasive in wild populations - (by Kevin M. Esvelt, inventor of gene drives) - Recent reports have suggested that CRISPR-based gene drives are unlikely to invade wild populations due to drive-resistant alleles that prevent cutting. Here we develop mathematical models based on existing empirical data to explicitly test this assumption. We show that although resistance prevents drive systems from spreading to fixation in large populations, even the least effective systems reported to date are highly invasive. Releasing a small number of organisms often causes invasion of the local population, followed by invasion of additional populations connected by very low gene flow rates. Examining the effects of mitigating factors including standing variation, inbreeding, and family size revealed that none of these prevent invasion in realistic scenarios. Highly effective drive systems are predicted to be even more invasive. Contrary to the National Academies report on gene drive, our results suggest that standard drive systems should not be developed nor field-tested in regions harboring the host organism.
Pakistani Students Win Silver in International Genetic Engineering Competition -- A team of undergraduate students representing Peshawar has won a silver medal in a genetic engineering competition organized recently by the International Genetically Engineered Machine (iGEM) Foundation in Boston, Massachusetts. The team was made up of students from several cities and towns across Pakistan including Lahore, Attock, Islamabad, Multan, Faisalabad, Khyber Agency, Nowshera, Charsadda, Peshawar, Swabi and Mardan.The team was hosted by Institute of Integrative Biosciences of CECOS University of IT and Emerging Sciences Peshawar. It was sponsored by Khyber-Pakhtunkhwa (KP)’s Directorate of Science and Technology, according to media reports. The team's silver-medal-winning 2017 entry is a genetically engineered fish called "Reporter Fish" that can detect five different heavy metals and change color to indicate the presence of metal contamination in the water. It used an Arduino electronic circuit board with bacterial-human interface device that enables bacteria to detect and report contamination.
DHS Prepares Biological Attack Drill On Infrastructure In Oklahoma - The Department of Homeland Security (DHS) is preparing to simulate ‘biological attacks’ on critical infrastructure near the border between Kansas and Oklahoma. The first round of drills will occur on January through February of next year, along with the second round in the summer. More recently, the Department of Defense just conducted a drill simulating a total grid collapse across the United States. Days ago, Wisconsin released plans on an upcoming drill to stimulate a grid collapse for mid-November. We find it strange the United States Government is drilling for apocalyptic scenarios, but provides very limited details to the American populace. It’s not strange and we’ll tell you why, if the public ever found out about the true nature of these drills it would lead to chaos. So frankly, most Americans will be left out of the dark of what’s coming…The first drill starts in January and continues into February of next year at two buildings within the Chilocco Indian Agricultural School (Chilocco campus) in Newkirk, Kay County, Oklahoma. The location is about 6-miles south of Arkansas City, Kansas. Department of Homeland Security (DHS) Science & Technology Directorate (S&T) plans to release low-levels of inert chemicals and biological stimulant materials simulating a biological attack on critical infrastructure. S&T is studying the penetration capabilities of a biological stimulant against resident buildings. DHS’s strategical goal for the operation is to “detect and recover from biological attacks and inform and support biodefense planning, response, and restoration, particularly in consequence/risk assessment modeling of the indoor hazards posed by outdoor aerosols”.
Climate change is turbocharging growth of city trees--and that's really bad news - In an analysis of nearly 1,400 urban trees from Berlin and Munich, Germany, Cape Town, South Africa, Santiago, Chile, Hanoi, Vietnam, and other cities, researchers found that trees in metropolitan areas have been growing at faster rates than in rural areas since the 1960s. The researchers tracked mostly mature trees, with an emphasis on typical and predominant tree species for each city, and examined their growth in city centers and rural areas outside the city. “We can show that urban trees of the same age are larger on average than rural trees because urban trees grow faster,” said lead author Hans Pretzsch, the chair of Forest Growth and Yield Science at the Technical University of Munich in Germany. As trees age, however, the size difference decreases, according to the study published in Scientific Reports. The heat island effect is to blame for the growth acceleration, according to researchers. The heat island effect, which is the way urban areas experience higher temperatures as a result of human activity, can stimulate photosynthetic activity and extend the time of the year during which trees grow. Though the idea of larger trees may suggest a positive effect, the more quickly trees age, the sooner they die. Cities will have to replace these trees sooner, according to Pretzsch. In another recent study from the University of Melbourne, scientists uncovered just how much this phenomenon affects urban trees in Australian cities in particular. Over half of Australia’s urban public trees are at risk—24 percent at a high risk and 29 percent at some risk—in a future scenario without limiting emissions. The trees at high risk could be unsuitable in anticipated 2070 temperatures, and further, they would become vulnerable to diseases.
Changing Where Crops Are Grown Could Feed an Additional 825 Million People, Study Finds -- The world could feed an additional 825 million people, produce 10 percent more food calories, and grow 19 percent more protein simply by adjusting what crops are grown where, according to a new study in the journal Nature Geoscience.The study looked at 14 crops that make up 72 percent of all agricultural plants grown throughout the world, analyzing where the crops are grown and how much water is required to grow them versus water availability. The scientists were then able to pinpoint more suitable locations for each of the 14 crops, which included groundnut, maize, millet, oil palm, rapeseed, rice, roots, sorghum, soybean, sugar beet, sugarcane, sunflowers, tubers, and wheat.“A big problem is that the current distribution of crops around the world doesn’t maximize yields or minimize water use,” lead author Kyle Davis, of Columbia University, told The Nature Conservancy. “So we set out to completely rethink agriculture to see if there was a better way.”The analysis finds that in western Russia, for example, rain-fed sorghum, soybeans, tubers, and wheat should be replaced by millets, sugar beet, and sunflowers. In Northern India, farmers should grow rice, sorghum, and wheat rather than their current crops of maize, millet, roots, and tubers. The research was led by scientists at the University of Virginia, Columbia University’s Earth Institute, and Politecnico di Milano in Italy.Changing where crops are grown would not only h elp increase agricultural yields and feed more people, the study finds, it would also reduce farmers’ use of rainwater by an estimated 14 percent and cut irrigation water by 12 percent. Crop redistribution could also be done without massive technology investments, loss of crop diversity, or a decline in soil nutrients, the researchers say. But they did acknowledge that cultural and dietary preferences could pose a challenge in changing where crops are grown
As ethanol cropland grew, carbon releases undercut climate goal, study says - Federal ethanol subsidies aimed at slowing climate change instead helped trigger the annual release of 30 million tons of greenhouse gases as farmers cleared land to plant more crops for production of the renewable fuel, UW-Madison researchers said Wednesday. The National Wildlife Foundation sponsored the research and called it the first comprehensive estimate of carbon released into the atmosphere by cropland expansion. UW-Madison graduate students Seth Spawn and Tyler Lark presented their findings at the wildlife federation’s America’s Grasslands Conference in Texas. The study will be submitted to a peer-reviewed journal within weeks, said Holly Gibbs, a professor of geography and co-author. The researchers spent years examining satellite imagery and high-resolution maps showing the vegetation cleared away and soil types plowed up when land was cleared from 2008 to 2012. During those four years crop prices were high amid government incentives promoting plant-based ethanol production. Ethanol was seen as an environmentally friendly way to reduce fossil fuels burned in auto engines. The UW-Madison researchers also examined U.S. Environmental Protection Agency policies that should have prevented cropland expansion, but didn’t. “We are formulating ideas for some of the policy changes that could close these loopholes so that the policies could lead to climate benefits instead of climate harm,” Gibbs said. An EPA spokesman said the agency will review the study after publication.
Trump Administration Seeks Two-Year Delay on Pesticide Assessments Following Industry Request - The Trump administration filed a motion before a federal judge requesting two more years to complete an assessment on the risks of three common pesticides on endangered species . The pesticides in question— chlorpyrifos , malathion and diazinon—are three organophosphate insecticides known to harm the vast majority of the nearly 1,800 animals and plants protected under the Endangered Species Act , according to an extensive federal study. Notably, the Associated Press reported, the administration's motion comes after chlorpyrifos-maker Dow Chemical Co. and two other organophosphate manufacturers asked the government to ignore the findings of the aforementioned study . "It's appallingly clear that the pesticide industry is now essentially running Trump's EPA," said Lori Ann Burd, environmental health director at the Center for Biological Diversity . "This disturbing request shows that [EPA administrator Scott] Pruitt and Trump are more interested in protecting the profits of their corporate buddies than the hundreds of endangered species threatened by these deadly pesticides." If the request is granted, it would modify a 2014 legal agreement secured by the Center for Biological Diversity that required the U.S. Environmental Protection Agency ( EPA ) to assess the pesticides' harms by the end of 2017. According to a press release from the Center for Biological Diversity: "Under the Endangered Species Act, the EPA must consult with the U.S. Fish and Wildlife Service and National Marine Fisheries Service to ensure its actions do not jeopardize endangered species or harm their habitats. Despite this clear mandate, the EPA has essentially ignored the plight of endangered species injured and killed by pesticides.
A Wide-Open Door for Pesticide Lobbyists at the Agriculture Department - At a private meeting in September, congressional aides asked Rebeckah Adcock, a top official at the Department of Agriculture, to reveal the identities of the people serving on the deregulation team she leads at the agency.Teams like Adcock’s, created under an executive order by President Trump, had been taking heat from Democratic lawmakers over their secrecy. What little was publicly known suggested that some of the groups’ members had deep ties to the industries being regulated.Adcock, a former pesticide industry executive, brushed off the request, according to House aides familiar with the exchange, who asked for anonymity because they were not authorized to comment publicly. Making the names public, they recalled her saying, would trigger a deluge of lobbyists.In fact, interviews and visitor logs at the Agriculture Department showed that Adcock had already been meeting with lobbyists, including those from her former employer, the pesticide industry’s main trade group, CropLife America, and its members. CropLife pushes the agenda of pesticide makers in Washington, including easing rules related to safety standards and clean water.Adcock, who left the trade group in April, maintained contact with her former industry allies despite a signed ethics agreement promising to avoid for one year issues involving CropLife as well as matters that she had lobbied about in the two years before joining the government. In one meeting, Adcock discussed issues banned by the ethics agreement with an executive who had been her lobbying partner weeks earlier at CropLife, according to the accounts of participants and the visitor logs, obtained through a public records request by The New York Times and ProPublica.
New EPA Air Pollution Administrator Doesn't Mind More Mercury Emissions - There’s a new kid on the block or, well, Capitol Hill. The Senate confirmed William Wehrum to head the Environmental Protection Agency’s Office of Air and Radiation last week, on November 9. By most standards, this is the EPA’s second most important role. And, like the administrator role, it will be filled with someone who has a reputation for riding with industry giants. Wehrum barely made it, though; the vote was 49-47 with Republican Sen. Susan Collins being her sole party member to reject Wehrum’s confirmation. But why? How could anyone resist this face? Sure, Wehrum has a history of defending major energy companies, like the American Petroleum Institute and Utility Air Regulatory Group, in lawsuits against the EPA. But during his time serving under former President George W. Bush, as both general counsel to the Office of Air and Radiation and then acting assistant administrator, he built a relationship with the Clean Air Act. Mostly, the relationship involved trying to weaken it.So, yeah. He’s got years of experience. The question is: Should a dude with that kind of experience be the one calling the shots for the EPA’s Office of Air and Radiation? First, you might want to know what the office does.For one, it’s responsible for implementing the Clean Air Act. Wehrum has always seemed more interested in cheapening the act than strengthening it, Environmental groups like the Natural Resources Defence Council would suethe agency pretty frequently during the Bush era—mostly for its Clean Air Act changes. And Wehrum had a lot to do with those changes, both as general counsel and as acting assistant administrator. Now, he’s going to have the power to do that all over again with a president that wants to go further than Bush in deregulating environmental policy. Wehrum will be the guy spearheading the EPA’s attempt to repeal the Clean Power Plan, former President Barack Obama’s landmark climate policy to reduce greenhouse gas emissions from power plants to meet the Paris Agreement climate targets.
Why Honeycutt Is Such an Alarming Choice for EPA's Science Advisory Panel - Michael Honeycutt—the man set to lead the U.S. Environmental Protection Agency's ( EPA 's) prestigious Science Advisory Board—has spent most of his career as a credentialed counterpoint against almost anything the EPA has proposed to protect human health. Fortunately, his lone voice for the Texas Commission on Environmental Quality rarely carried beyond the Lone Star State. Until now. The EPA science advisory panel Honeycutt will chair is supposed to provide the agency with independent scientific expertise on a wide range of issues. In a highly unusual move, EPA Administrator Scott Pruitt picked the Texan for the job even though he has never been a member of the board. More than Honeycutt's inexperience, however, what worries me most is his faulty logic and what this means for science at the EPA . Honeycutt downplays ozone dangers A toxicologist by training, Honeycutt has criticized the EPA's health-based standards for ozone because "most people spend more than 90 percent of their time indoors," reducing their exposure to the ubiquitous pollutant. Houston residents know differently. The city's worst day for lung-damaging ozone this year happened while many people were outside for long hours of cleanup after Hurricane Harvey . Honeycutt doubled-down on his position that ozone is not harmful to human health in a 2014 interview with the Texas Tribune. "I haven't seen the data that says lowering ozone will produce a health benefit," he said. "In fact, I've seen data that shows it might have a negative health benefit." Honeycutt's statement suggests he believes that more air pollution might actually be good for you. …even though ozone can cause premature death I am a toxicologist in Texas, too, and here is the truth about ozone: The pollutant can exacerbate asthma, lung disease and heart disease —and even lead to premature death. In his Texas role, Honeycutt responded to the recommendation by paying more than $2.6 million for research that says tighter ozone rules would cost the state billions of dollars annually with little or no impact on public health. Every part per billion that they don't lower it is millions of dollars," Honeycutt told the Houston Chronicle. "So we think that the return on investment in this is just phenomenal. Just phenomenal." And it's not just ozone that seems to be a target for Honeycutt. He also has issues with protections against mercury, particulate matter and air toxics .
Air Quality After Hurricane Harvey Leads To Complaints - Juan Flores and his family live in Galena Park, Texas, just east of downtown Houston, which is bordered on three sides by pipeline terminals, oil refineries, fertilizer plants and rail yards. Strange smells and occasional warnings to shelter in place don't bother him too much. "I live so close to [one] company that I can hear their alarms," he says. "The thing is, you hear it so much you get immune to it, and it's like background noise." But there are also times when he takes notice. "If I smell something out here, it's bad," he says, "and I can tell you during Harvey, it smelled real bad." Hurricane Harvey caused industrial facilities in Texas to release an extra 5.98 million pounds of pollution into the air, according to the most recent analysis by the Environmental Defense Fund: the pollutants benzene and toluene, both carcinogens, as well as a brew of other chemicals that can irritate eyes and exacerbate respiratory problems. But for days after the flooding began, the residents of Galena Park and other neighboring communities had little or no information about the air they were breathing. Air monitors scattered across the region were taken out of service, to protect them from storm damage, officials say. The Environmental Protection Agency, university teams and environmental groups did some air testing while the monitors were down, but the limited effort produced far less information than the permanent air monitoring network would have. All the while, Flores says, the smell of gasoline was so strong in Galena Park that his eyes were watering. Flores does community outreach for the Houston air quality nonprofit AirAlliance, so he knew enough about pollution to be concerned. He turned off his air conditioner, trying to keep to keep the noxious air out of his house, and especially away from his toddler.
Puerto Rico struggles to assess hurricane’s health effects - Since Hurricane Maria hit on 20 September, leaving large swathes of the island without a reliable power supply, team of public-health researchers in Puerto Rico have rushed home each night to avoid being in the streets after dark. Many lack running water, and most have limited telephone access. Yet the team –— co-led by José Cordero of the University of Georgia in Athens — has managed to contact several hundred women to begin assessing whether Hurricane Maria has worsened drinking-water contamination, stress and infectious disease that could harm developing fetuses. This wasn’t what the researchers set out to study six years ago when they started a project to assess the impact of pollution on pre-term births. But Cordero's team is one of several research groups have scrambled to quantify Hurricane Maria’s immediate health impacts, even as team members struggle to fulfil their own basic needs. Even before the hurricane, the island’s 18 ‘Superfund’ sites — areas so polluted that the US Environmental Protection Agency deems them hazardous to human health or the environment — posed a potential risk to pregnant women, says Ingrid Padilla, an environmental engineer at the University of Puerto Rico at Mayagüez. Twelve of these sites sit on karst, a geological formation made of porous rock that allows toxic chemicals to flow down from the surface into groundwater. Padilla’s previous research suggests that flooding and other disturbances can quickly bring toxic substances in groundwater back to the surface, and carry them into the water supply. Now, she and her colleagues are collecting hair and blood samples from the research cohort to determine whether pregnant women are being exposed to hazardous chemicals, such as phthalates and chloroform. Since the hurricane hit, the researchers have begun to collect and test groundwater from karst regions and tap water from the homes of people living there. Other research teams are worried that water that has pooled in hurricane debris could provide a breeding ground for disease-carrying mosquitoes. The evidence is still unclear, she says, and logistical problems may make it impossible for researchers to gather enough data to provide answers. In some areas where hospitals faced extensive storm damage, the only medical care available is emergency treatment. Screening for the Zika virus is a low priority, and infected adults rarely experience severe symptoms and are unlikely to seek medical treatment. There are also few labs on the island that can test samples for Zika and other mosquito-borne diseases. Like many Puerto Rican facilities, the US Centers for Disease Control and Prevention (CDC) dengue lab in San Juan lost power during the hurricane and was closed for a week. Diesel generators kept its freezers running to preserve blood and other biological samples, but the lab is still running on generator power.
Puerto Rico Update: Roads, Power, Water, and Money - Lambert Strether - In this post I’ll review what I can of the situation in Puerto Rico on the ground, and sketch the first outlines of the role of the Financial Oversight and Management Board (FOMB) set up under the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) (“never let a crisis go to waste”). I’ll go into the financial aspects of Puerto Rico’s post-Maria situation in a follow-up post later this week. Today, I’ll look at roads, power, water, and depopulation. Then I’ll take a quick look at money, which affects the power situation, in both senses of that word. But first, I’ll note that that military involvement is winding down. NPR:There are about 11 thousand troops on the island now—down from more than 15 thousand shortly after the hurricane. Over the next few weeks, the number will drop by about half as federal troops hand over responsibilities to National Guardsmen. And the general in charge of those efforts is leaving. CBS: Lt. Gen. Jeffrey Buchanan, the Pentagon’s liaison to the Federal Emergency Management Agency (FEMA), announced on Friday that troops would begin winding down operations… He is set to leave the island next week.“On the military side, we’re really here just for the emergency response,” Buchanan . “We’ve been transitioning out of the emergency response for the last several weeks. Some areas still need help, but it’s more of a sustained effort, and moving, transitioning into a longer recovery and rebuilding effort.” So let’s look at those “some areas” that still need help. First, the roads.
Whitefish Charges Puerto Rico $319 an Hour for Linemen, Then Pays Them $63 an Hour - Whitefish Energy, the controversial energy firm repairing Puerto Rico’s hurricane -wrecked power grid, is under fresh scrutiny for charging the island's power authority hundreds of dollars more per hour than its linemen receive. The New York Times reported that the tiny Montana-based company—which doesn't have many of its own employees—contracted electrical workers from Florida at rates that range from $42 to $100 per hour, with an average rate of $63. Whitefish, however, has been charging the Puerto Rico Electric Power Authority (PREPA) $319 an hour for each worker. The Times pointed out that $319 per hour is wildly above the industry standard, even for emergency work. Notably, the rate is 17 times higher than what it would have cost to hire a lineman in Puerto Rico. Whitefish spokesman Chris Chiames defended its costs to the newspaper, explaining that "simply looking at the rate differential does not take into account Whitefish's overhead costs" built into the rate. "We have to pay a premium to entice the labor to come to Puerto Rico to work," Chiames said, adding that many workers are being paid overtime. Whitefish is also billing PREPA about $4,000 an hour to rent a helicopter—more than double what is typically charged. On top of that, the Whitefish contract states: "In no event shall [government bodies] have the right to audit or review the cost and profit elements."
Blackout hits Puerto Rico as power company reached goal — A major blackout hit Puerto Rico’s most populated region Wednesday just as the government announced it had met its goal of 50 percent power generation nearly two months after Hurricane Maria struck as a Category 4 storm. The Electric Power Authority said it dispatched crews to investigate why a key 230-kilovolt line that connects the island’s northern and southern regions had failed for the second time in a week. The failure caused the U.S. territory’s power generation to drop to 22 percent, though it had improved slightly to 29 percent by early evening. The blackout affected the capital of San Juan and nearby cities and towns along the island’s north coast, provoking a groan from people who were celebrating the return of electricity in recent weeks by restocking refrigerators and charging phones and computers. A previous blackout involving the same line occurred Nov. 8, causing power generation to drop to 18 percent. On social media, some Puerto Ricans wondered whether the blackout was caused by the government’s rush to meet its goals to restore power. Puerto Rico Gov. Ricardo Rossello has pledged 80 percent power generation by the end of November and 95 percent power generation by Dec. 15, while the U.S. Army Corps of Engineers has said it expects 75 percent power generation by the end of January. Susan Tierney, a senior adviser for Denver-based consulting company Analysis Group who testified last month before a U.S. Senate committee on efforts to restore power, said blackouts are likely to occur if a power company is having problems matching supply and demand. “Something has to give,”
2 Months After Maria And Irma, U.S. Virgin Islands Remain In The Dark -- The continuing blackouts in Puerto Rico after Hurricanes Irma and Maria have overshadowed the devastation in the neighboring U.S. Virgin Islands, where nearly 73 percent of residents remain without power two months after the Category 5 storms made landfall. More than 33,000 people, which is over a third of the U.S. territory's population, are awaiting help from the Federal Emergency Management Agency. The Virgin Islands are home to more than 106,000 Americans, according to the most recent census data. "The damage is just so pervasive," says Fredreka Schouten, a reporter for USA Today who returned to her native St. Croix and St. Thomas this month. Schouten tells Here & Now's Robin Young that she could sense the severe devastation as she flew into Frederiksted, the historic port town where she was born. "The line of beaches along Frederiksted ... [were] just pounded clean of sand to stone left from the storm surge," she says. "And then as we got closer and sort of turned to make our landing, I started to see the blue tarps covering scores and scores of homes on the southwest corner of the island." The Virgin Islands Power and Water Authority is continuing efforts to restore electricity and reconstruct the power grid, bringing back power for more than 16,000 customers this past weekend and on Monday. The boil-water notice was also lifted last week for St. Thomas and St. John but remains in effect for St. Croix. People who don't have access to bottled water are advised to boil water for at least one minute before drinking.
Zillow: Climate change could make nearly 2 million more U.S. homes susceptible to future flooding - The term “underwater” — used frequently to refer to homeowners who owed more on their mortgage than their property was worth — has a more frightening meaning in a study by Zillow. Zillow’s new analysis of the potential impact of climate change on homes across the country projects that 1.9 million residences could be literally underwater by 2100 if the oceans rise six feet.That six-foot rise is approximately halfway between the federal government’s estimated “very likely” rise of 4.3 feet by 2100 and an eight-foot or greater rise, the possibility of which the government says “cannot be excluded.” Zillow opted for this midpoint rather than address the different predictions for various areas.If those projections come true, this would impact 1.8 percent of the country’s housing stock, valued at $916 billion. While five of the 10 metro areas anticipated to be hardest hit by rising seas are in Florida, New York City is second on the list, with 4.6 percent of its homes, valued at $123 billion. Also on the list is nearby Upper Township, N.J., where 56.6 percent of homes could be underwater by 2100. Boston, Salisbury, Md., and Virginia Beach are also among the top 10 areas anticipated to be hardest hit by rising sea levels. Zillow’s analysts point out that while some cities have already invested in systems to protect residents against rising ocean levels, such as a pump system in Miami Beach and a wall around lower Manhattan, suburban and rural areas are less prepared. For the full report, click here.
She's Back! La Niña Is Here For The Second Consecutive Year - For the second consecutive time in two years, La Niña (translated from Spanish as “little girl”) is back and she means business. New data from Climate.gov indicates La Niña conditions have formed just in time for winter weather in the Northern Hemisphere. On Thursday, the Climate Prediction Center confirmed La Niña after analyzing October ocean temperatures cooling along the equatorial eastern and central Pacific Ocean. La Niña is often declared when sea surface temperatures in the region (just stated) decline by 0.5 degrees Celsius. John Morales, Chief Meteorologist WTVJ NBC-6 Miami, shows the progression of cool water over the equatorial Pacific Ocean responsible for La Niña formation. The cooler waters have an influence on atmospheric conditions by decreasing evaporation in the tropics, which is a major driver of global weather. According to the Weather Channel,A typical La Niña winter in the U.S. brings cold and snow to the Northwest and unusually dry conditions to most of the southern tier of the U.S., according to the prediction center. The Southeast and Mid-Atlantic also tend to see warmer-than-average temperatures during a La Niña winter. New England and the Upper Midwest into New York tend to see colder-than-average temperatures.
La Niña is officially here to shape U.S. winter weather, along with global climate - La Niña is back, ya'll. And it may have major implications for your winter weather, depending on where you live. La Niña conditions were formally declared present in the tropical Pacific Ocean on Thursday, in a statement from the National Oceanic and Atmospheric Administration (NOAA). The agency's scientists found a large expanse of the equatorial tropical Pacific Ocean to feature cooler than average waters both at the surface and extending into deeper waters. The atmosphere is responding to this in ways that match expectations for a La Niña event. In fact, the weather for much of the fall across parts of the U.S. has featured La Niña-like fingerprints, with milder than average conditions across the South and East, in particular. La Niña is the lesser known sibling of El Niño, which features unusually mild sea surface temperatures across the tropical Pacific. Together, El Niño and La Niña are part of a broader climate cycle, known as the El Niño-Southern Oscillation, or ENSO, that is a leading architect of weather patterns in North America, particularly during the winter. Therefore, La Niña is a main factor that NOAA forecasters examine in making their winter forecasts. While La Niña also affects weather patterns spanning from the Pacific to the Atlantic Oceans, if you live in the U.S. or Canada, in particular, you're likely to feel the effects of the 2017-18 La Niña event. La Niña winters tend to feature cooler-than-average conditions from Alaska down across the provinces of northwest and western Canada, and into the northern Plains and Upper Midwest. Milder-than-average conditions tend to be found across the southern tier of the country during such winters, often extending into the Mid-Atlantic. Wetter-than-average conditions during La Niña winters tend to be found across the Pacific Northwest, and in the Midwest.
Northeast Facing Record-Low Temperatures As Polar Vortex Returns; Nat Gas Prices Soar 700% - The return of the dreaded polar vortex is battering much of the eastern US this week, sending temperatures well into freezing territory and close to record lows - a phenomenon that could persist for much of the week leading up to Thanksgiving. According to the New York Post, record-low temperatures are forecast for Friday and Saturday, with nighttime and early-morning mercury dipping into the 20s. The temperature dropped into the 20s in some places in the northeast last night, and could sink as low as 21 degrees Fahrenheit on Saturday, according to AccuWeather forecasts. The record low for November 10 was 27 degrees in 1914. The high Saturday will be 37 to 43 degrees - up from the predawn low of about 24 degrees. The record low for November 11 was 29 degrees, set in 1933. The forecast calls for 50 degrees on Monday, setting off eight straight days with high temps of at least 50, AccuWeather said. The forecasting service added that signs are pointing toward a shift of the polar vortex that may cause snow, rain and other hazardous weather conditions like icy roads in some parts of the Northeast.Right now, a cold snap is bringing an abrupt November reality check to most of the eastern US that will persist for the rest of the Veterans’ Day weekend. As Accuweather explains, the weather pattern will become even more interesting later in the week because it will feature a meteorological phenomenon called “the Greenland block”. This pattern consists of relatively high pressure wind pattern near greenland that forces the polar jet stream to move sharply south toward the eastern US. "Model forecasts have been pretty consistent and increasingly strong with the -NAO," said Dr. Todd Crawford, chief meteorologist with the Weather Company, an IBM Business. Crawford said the strength of this upcoming Greenland block/negative NAO would be about a "90th percentile event for late November.” In early to mid-November, it’s far more rare.The unseasonably cold weather is, of course, another boon for the energy market, with natural gas prices in New England soaring 700% this week as refineries braced for the uptick in demand. According to Accuweather, the heating season is starting off with a frigid start, which has boosted prices of spot gas for Boston and other cities in the region eightfold this week to $8.0195 per million British thermal units Thursday on ICE, their highest level since Jan. 6. Regional power prices also jumped. Boston's low on Friday was around 20 degrees Fahrenheit - 17 degrees below normal.
Plastic Trash Found in Ocean Animals Living 7 Miles Deep - Plastic trash can really be found on all corners of the Earth —even in the stomachs of deep-sea organisms, according to a new study from Newcastle University in England. Led by Dr. Alan Jamieson , the researchers found microfibers in crustaceans from six of the deepest places on the planet, the Mariana, Japan, Izu-Bonin, Peru-Chile, New Hebrides and Kermadec trenches. After examining 90 individual animals, the team found that ingestion of plastic ranged from 50 percent in the New Hebrides Trench to 100 percent at the bottom of the Mariana Trench. As the Guardian reported from the study, the tiny fibers shed off of larger products such as synthetic textiles, plastic bottles, fishing equipment and packaging. “We published a study earlier this year showing high levels of organic pollutants in the very deepest seas and lots of people asked us about the presence of plastics, so we decided to have a look," Jamieson said in a news release from the university. “The results were both immediate and startling. This type of work requires a great deal of contamination control but there were instances where the fibers could actually be seen in the stomach contents as they were being removed."
Scientists Shocked As Fisheries Collapse On West Coast: "It's The Worst We've Seen" -- The Gulf of Alaska cod populations appears to have taken a nose-dive. Scientists are shocked at the collapse and starving fish, making this the “worst they’ve ever seen.” The 2017 trawl net survey found the lowest numbers of cod on record forcing scientists to try to unravel what happened. A lot of the cod hatched in 2012 appeared to survive, but by 2017, those fish were largely gone for the surveys, which also found scant evidence of fish born in subsequent years. Many of the cod that have come on board trawlers are “long skinny fish” according to Brent Paine, executive director of United Catcher Boats.“This is a big deal,” Paine said. “We just don’t see these (cod) year classes disappear from one year to the next.” The decline is expected to substantially reduce the gulf cod harvests that in recent years have been worth — before processing — more than $50 million to Northwest and Alaska fishermen who catch them with nets, pot traps, and baited hooks set along the sea bottom. Barbeaux says the warm water, which has spread to depths of more than 1,000 feet, hit the cod like a kind of a double-whammy. Higher temperatures sped up the rate at which young cod burned calories while reducing the food available for the cod to consume. And many are blaming “climate change” for the effects on the fish, although scientists aren’t directly correlating the two events. “They get weak and die or get eaten by something else,” said Barbeaux, who in October presented preliminary survey findings to scientists and industry officials at an Anchorage meeting of the North Pacific Fishery Management Council.
William Rees: What's Driving The Planet's Accelerating Species Collapse? - The data regarding planetary species loss just gets more alarming. Today's podcast guest is bioecologist and ecological economist Dr. William Rees, professor emeritus of the University of British Columbia’s School of Community and Regional Planning. Rees is best known for his development of the "ecological footprint" concept as a way to measure the demand a particular population places on the environmental resources it needs to survive. Since the beginning of modern agriculture (around 1800), human activity has increased demand on planetary resources at an exponential rate. More energy has been expended -- and more resources consumed -- in the past 40 years than in all of human existence beforehand. That is placing a greater and greater strain on ecosystems that are now dangerously depleted: At the dawn of agriculture, just ten thousand years ago, human beings accounted for less than 1% of the total mammalian biomass on the planet. Today, human beings account for about 32 - 35%of the total biomass of mammals, a much greater biomass than at the dawn of agriculture. But when we throw in our domesticated animals and our pets, humans and their domesticated animals amount to 98.5% of the total weight of mammals on planet Earth.So we’re engaged here, through sheer growth, in the scale of the human enterprise in what ecologists refer to as "competitive displacement". This is a finite planet. There’s a finite flow, a limited flow, of photosynthetic energy through the planet which we share with millions of other species. Now, on a finite planet with limited energy flow, the more any one species takes the less is available for everything else. So as humans have gone from less than 1% of the total biomass to over 98.5% of an increased biomass, it means that almost all other species with which we share that photosynthetic flow have been pushed off the planet. So we’ve gone from millions to a few thousand elephants. We’ve gone from hundreds of thousands, maybe even millions, of tigers to a handful. And so on.Wildlife on the planet today is clinging to the edges of existence. They may not have gone extinct, but their populations have been reduced to a tiny fraction -- a few percent at best -- of what used to be.Competitive displacement has revealed humans to be the fiercest competitors on Earth for the planet’s living resources, forcing nearly all other species to essentially disappear. Click the play button below to listen to Chris' interview with Dr. William Rees (65m:45s).
Congress: Biggest Attack on Marine Mammals in Decades - On Thursday, the House Natural Resources Committee passed a bill, called the "SECURE American Energy Act" ( H.R. 4239 ), that can only be described as an oil industry wish-list. The bill's purpose is to mow down environmental concerns that stand in the way of the complete exploitation of fossil fuels in this country. For the oceans, this would mean an end to national monument designation and to some of those pesky safety regulations that were put in place after the Deepwater spill, among other things . And although it hasn't received much attention—yet—one late addition to the bill targets marine mammals in a very big way. H.R. 4239 would eviscerate one of the core provisions of the Marine Mammal Protection Act (MMPA), the law that for more than 45 years has been the bulwark of conservation for many of our most iconic ocean species. The Protection Act works by placing safeguards on human activities, like offshore oil exploration, that harm whales, dolphins and other marine mammals. Simply put, H.R. 4239 would gut a whole lot of those safeguards. What would this mean for marine mammal protection? For starters:
- H.R. 4239 would allow industry to harm huge numbers of marine mammals, by killing the safeguard limiting its impacts to "small numbers."
- It would eliminate the requirement that activities have the "least practicable impact" on marine mammals, allowing industry to proceed without attempting to minimize harm.
- It would prevent the wildlife agencies from requiring industry to monitor the long-term consequences of its actions.
- It would establish an impossibly short timeline for the wildlife agencies to review industry activities for their marine mammal impacts, and automatically permit those activities if the agencies fail to meet it.
- And, having turned much of our marine mammal law into a dead letter, it would exempt industry from having to comply with Endangered Species Act protections for marine mammals as well.
Trump Administration Reverses Ban on Elephant Trophy Imports -- The Trump administration has agreed to allow the remains of elephants killed in Zimbabwe and Zambia to be brought back to the U.S., a reversal of an Obama-era ban. In 2014, the President Obama's administration banned the imports of elephant trophies to protect the species. "Additional killing of elephants in these countries, even if legal, is not sustainable and is not currently supporting conservation efforts that contribute towards the recovery of the species," they said at the time. African elephant populations had once numbered between three to five million in the last century, but have been severely reduced to its current levels of 415,000 animals due to hunting and the illegal ivory trade, according to the World Wildlife Fund . But the U.S. Fish and Wildlife Service (FWS), an agency within the Department of Interior , said Tuesday that reversing the ban would help preserve the species. “The hunting and management programs for African elephants will enhance the survival of the species in the wild," a FWS spokesperson said . “Legal, well-regulated sport hunting as part of a sound management program can benefit the conservation of certain species by providing incentives to local communities to conserve the species and by putting much-needed revenue back into conservation."
Trump to let Americans import ivory and hunting trophies again - Donald Trump’s administration is reversing a ban on the imports of elephant trophies—including ivory—from two African nations.The practice was previously banned in 2014 by the Obama administration. This U-turn applies to the taxidermied heads and tusks of elephants killed in Zimbabwe on or after January 21, 2016, and on or before 31 December, 2018, and elephants taken in Zambia from 2016 to 2018. The onus for the change, according to the U.S. Fish and Wildlife Service, the agency tasked with the regulation, is that hunting wild African elephants in Zimbabwe and Zambia, “will enhance the survival of the species in the wild” as funds from the practice would be funneled towards conservation. The elephants are a threatened species with only about 350,000 left in the wild. The problem with that rationale, says the opposition, is that much like legalising rhino horn elsewhere on the continent, it encourages poaching. The Humane Society says that poaching in Zimbabwe has ramped up in recent years, and this decision will only exacerbate the problem. According to 2016’s Great Elephant Census, savannah populations declined by 30 per cent across 18 African nations from 2007 to 2014. In parts of the greater Zambezi ecosystem, which includes Zimbabwe, declines were as much as 74 per cent in that period. Tourists are able to hunt elephants on private game ranches in Zambia, many bordering protected national parks, with wild elephants often wandering over invisible lines. Last year, 30 elephants were killed there.
Lion 'Trophy' Importation Ban Was Quietly Lifted by Trump Administration in October - Last month the U.S. Fish and Wildlife Service (USFSW) began issuing hunting permits for the import of lion trophies hunted in Zambia and Zimbabwe. Although the USFSW announced Wednesday it was lifting a ban on the import of elephant trophies, the new guidelines for importing sport-hunted lions have been quietly in effect and permits have been accepted since Oct. 20. Due to a 45-day waiting period, it's unclear if any permits have been granted so far. The decision is touted as "contributing to the conservation of lions in the wild" on the USFSW website . The U.S. government, in addition to Zambia and Zimbabwe, allows permits for wild lions and lions from managed areas in South Africa and is reviewing permits for importing lion trophies from Mozambique, Namibia and Tanzania. The USFSW's decision aligns with congressional Republicans' recent history of removing endangered species protections and proposing bills that remove non-native species—such as lions—from protected status. President Donald Trump 's sons are also known to be avid trophy hunters. In 2012, pictures surfaced showing Eric and Donald Trump, Jr. posing with a dead elephant and leopard.
Trump puts elephant trophies decision on hold following criticism | TheHill: President Trump on Friday night said he plans to hold until further review his administration’s decision to allow elephant trophies being imported into the United States. “Put big game trophy decision on hold until such time as I review all conservation facts,” he tweeted. “Under study for years. Will update soon with Secretary Zinke. Thank you!” Interior Secretary Ryan Zinke said in a statement that he and Trump "talked and both believe that conservation and healthy herds are critical.""As a result, in a manner compliant with all applicable laws, rules, and regulations, the issuing of permits is being put on hold as the decision is being reviewed," he said. Trump's decision to review the decision follows intense criticism from some conservationists, many high-profile celebrities such as Ellen DeGeneres, and some members of the GOP party.The U.S. Fish and Wildlife Service (FWS) said on Thursday it had determined a ban was no longer necessary on the import of parts of elephants hunted in Zimbabwe and Zambia, a reversal of the policy under the Obama administration. The Obama administration banned trophy imports because authorities believed it harmed the survival of the species.
Slaughter of 90,000 Wild Horses Could Proceed Despite 80% Objection From American Public -- The American Wild Horse Campaign on Thursday harshly criticized Interior Sec. Ryan Zinke 's appointment of Brian Steed, the former chief of staff for U.S. Rep. Chris Stewart (R-UT), as the acting director of the Bureau of Land Management (BLM) as dangerous and out of step with the wishes of the vast majority of Americans. "Rep. Stewart is leading the charge to slaughter America's wild horses and burros over the opposition of 80 percent of Americans," said Suzanne Roy, AWHC Executive Director. "Putting his deputy at the helm of the agency charged with protecting these national icons is like putting the wolf in charge of the chicken coop." "Americans don't want the government to be in the horse slaughter business, and Interior Secretary Zinke should appoint someone to lead the Bureau of Land Management who is committed to protecting, not destroying, America's historic mustangs," Roy concluded. Roy added that the long-term leadership for this agency, which manages 245 million acres of public land in the West, should be determined through a full and transparent confirmation process, not a late-in-the-day political appointment by the secretary. In July, the U.S. House of Representatives issued what AWHC called a " death warrant " when it passed the "Stewart Amendment" to a 2018 spending bill that would allow for the destruction of wild horses and burros the BLM considers to be surplus. The Senate has yet to weigh in on the subject, but if it concurs, the amendment could lead to the killing of more than 90,000 wild horses on the range and in holding facilities.
Analysis: Global CO2 Emissions Set to Rise 2% in 2017 After Three-Year ‘Plateau’ - Over the past three years, global CO2 emissions from fossil fuels have remained relatively flat. However, early estimates from the Global Carbon Project (GCP) using preliminary data suggest that this is likely to change in 2017 with global emissions set to grow by around two percent, albeit with some uncertainties. Hopes that global emissions had peaked during the past three years were likely premature. However, GCP researchers say that global emissions are unlikely to return to the high growth rates seen during the 2000s. They argue that it is more likely that emissions over the next few years will plateau or only grow slightly, as countries implement their commitments under the Paris agreement . The GCP is a group of international researchers who assess both sources and sinks of carbon. It has published an annual global carbon budget report since 2006. Its newly released global carbon budget for 2017 provides estimates of emissions by country, global emissions from land-use changes, atmospheric accumulation of CO2, and absorption of carbon from the atmosphere by the land and oceans . The figure below shows global CO2 emissions from fossil fuels, divided into emissions from China (red shading), India (yellow), the U.S. (bright blue), EU (dark blue) and the remainder of the world (grey). After a rapid increase in global emissions of around three percent per year between 2000 and 2013, emissions only grew by 0.4 percent per year between 2013 and 2016. Much of the slowdown in the growth of global emissions in recent years has been driven by a combination of reductions in the U.S. and China, as well as relatively little growth in emissions in other countries. This changed in 2017, with little-to-no reductions in U.S. emissions and a sizable increase in Chinese emissions. India's emissions increased a bit more slowly in 2017 than in the past few years, while the EU's emissions have remained relatively flat since 2014 and did not noticeably change in 2017. The growth in emissions from 2016 to 2017 also more than doubled in the rest of the world.
Fossil fuel burning set to hit record high in 2017, scientists warn -- The burning of fossil fuels around the world is set to hit a record high in 2017, climate scientists have warned, following three years of flat growth that raised hopes that a peak in global emissions had been reached. The expected jump in the carbon emissions that drive global warming is a “giant leap backwards for humankind”, according to some scientists. However, other experts said they were not alarmed, saying fluctuations in emissions are to be expected and that big polluters such as China are acting to cut emissions. Global emissions need to reach their peak by 2020 and then start falling quickly in order to have a realistic chance of keeping global warming below the 2C danger limit, according to leading scientists. Whether the anticipated increase in CO2 emissions in 2017 is just a blip that is followed by a falling trend, or is the start of a worrying upward trend, remains to be seen. The 12th annual Global Carbon Budget report published on Monday is produced by 76 of the world’s leading emissions experts from 57 research institutions and estimates that global carbon emissions from fossil fuels will have risen by 2% by the end of 2017, a significant rise. “Global CO2 emissions appear to be going up strongly once again after a three-year stable period. This is very disappointing,” “The urgency for reducing emissions means they should really be already decreasing now.” “There was a big push to sign the Paris agreement on climate change but there is a feeling that not very much has happened since, a bit of slackening,” The new analysis is based on the available energy use data for 2017 and projections for the latter part of the year. It estimates that 37bn tonnes of CO2 will be emitted from burning fossil fuels, the highest total ever. The main reason for the rise is an expected 3.5% increase in emissions in China, the world’s biggest polluter, where low rains have reduced low-carbon hydroelectric output and industrial activity has increased. India’s rise in emissions was modest compared to previous years at 2%, while the US and EU are both on track for small falls.
Largest Ever Group of Scientists Issues Humanity an Urgent Warning: Time Is Running Out - Science Alert - In 1992, more than 1,700 concerned scientists - including the majority of living Nobel Laureates - penned an urgent warning to humanity at large. The message was simple: if we do not take drastic action, human misery will prevail and our planet will be "irretrievably mutilated".Twenty five years later, not much has changed.Now, scientists are giving humanity a second chance. The article, "World Scientists' Warning to Humanity: A Second Notice", warns that humans are on a collision course with the natural world, and if immediate action is not taken, we will be unable to avoid substantial and irreversible harm to the Earth.The article, which was published on Monday, has already been cosigned by more than 15,000 scientists in 184 different countries. And the signatures are still coming in.Co-author Thomas Newsome, a research fellow at Deakin University and The University of Sydney, said he believed this was possibly the biggest number of signatories to any published scientific paper."It's an overwhelming response we didn't quite expect," said Newsome.The article was created in the United States and seeded in Australia before it went viral, gaining signatures across the world. Newsome says that on their first callout day, four months ago, they attracted nearly 600 signatories. "People just started sharing the letter; it was added to a few email lists and things just took off from there," he said.
Scientists: Population Growth “Primary Driver Behind Ecological and Societal Threats” - Yves Smith - 15,364 scientists from 180 countries have put their names to a BioScience journal article calling for population growth to be limited, and governments to stop only focusing on economic growth. According to the ABC article attached to the report, “the number is believed to be the largest group of scientists to have ever put their names to a research paper focused on climate change”. Below are some key extracts from the journal article: Twenty-five years ago, the Union of Concerned Scientists and more than 1700 independent scientists, including the majority of living Nobel laureates in the sciences, penned the 1992 “World Scientists’ Warning to Humanity” (see supplemental file S1). These concerned professionals called on humankind to curtail environmental destruction and cautioned that “a great change in our stewardship of the Earth and the life on it is required, if vast human misery is to be avoided.” In their manifesto, they showed that humans were on a collision course with the natural world… Since 1992, with the exception of stabilizing the stratospheric ozone layer, humanity has failed to make sufficient progress in generally solving these foreseen environmental challenges, and alarmingly, most of them are getting far worse… We are jeopardizing our future by not reining in our intense but geographically and demographically uneven material consumption and by not perceiving continued rapid population growth as a primary driver behind many ecological and even societal threats (Crist et al. 2017). By failing to adequately limit population growth, reassess the role of an economy rooted in growth, reduce greenhouse gases, incentivize renewable energy, protect habitat, restore ecosystems, curb pollution, halt defaunation, and constrain invasive alien species, humanity is not taking the urgent steps needed to safeguard our imperilled biosphere…
British Antarctic research station to shut for second winter as cracks in ice grow - A British research station in Antarctica is being shut down for the second winter in a row following concerns over growing cracks in the 150-metre thick ice shelf on which it stands.The Halley VI station, which is parked on the Brunt ice shelf, will be shut down between March and November 2018, with the 14-strong staff who had been gearing up for the winter stint redeployed elsewhere in Antarctica or brought home to the UK.The director of the British Antarctic Survey, Professor Dame Jane Francis, said the decision was down to the difficulties of rescuing researchers in the winter months, should there be a break in the ice shelf – an event known as calving.The worries are based on two cracks. The first is an ice chasm that began to show movement northwards in 2012, after more than 30 years of dormancy, and has accelerated over the past seven months. The second, north of the research station, has been dubbed the “Halloween crack” after it appeared in October 2016. It is now estimated to be about 50km in length and growing eastwards, crossing a resupply route for the station. “It has grown a couple of kilometres during the winter period,” said Professor David Vaughan, director of science at the British Antarctic Survey, adding that the crack had also widened “The safety of our staff is our priority in these circumstances,” Francis said. “Because access to the station by ship or aircraft is extremely difficult during the winter months of 24-hour darkness, extremely low temperatures and the frozen sea, we will once again take the precaution of shutting down the station before the 2018 Antarctic winter begins.”
These are the melting glaciers that might someday drown your city, according to NASA - New York City has plenty to worry about from sea level rise. But according to a new study by NASA researchers, it should worry specifically about two major glacier systems in Greenland’s northeast and northwest — but not so much about other parts of the vast northern ice sheet. The research draws on a curious and counterintuitive insight that sea level researchers have emphasized in recent years: As ocean levels rise around the globe, they will not do so evenly. Rather, because of the enormous scale of the ice masses that are melting and feeding the oceans, there will be gravitational effects and even subtle effects on the crust and rotation of the Earth. This, in turn, will leave behind a particular “fingerprint” of sea level rise, depending on when and precisely which parts of Greenland or Antarctica collapse. Now, Eric Larour, Erik Ivins and Surendra Adhikari of NASA’s Jet Propulsion Laboratory have teased out one fascinating implication of this finding: Different cities should fear the collapse of different large glaciers. “It tells you what is the rate of increase of sea level in that city with respect to the rate of change of ice masses everywhere in the world,” Larour said of the new tool his team created. The research was published in Science Advances, accompanied by an online feature that allows you to choose from among 293 coastal cities and see how certain ice masses could affect them if the ice enters the ocean. The scientists also released a video that captures some of how it works.
Warner, Kaine urge Trump to save Tangier Island from being inundated -- Five months after President Trump lent his support to the mayor of a tiny island with a vanishing shoreline, Virginia’s senators are urging the president to protect Tangier Island from disappearing into the Chesapeake Bay.Democratic Sens. Mark R. Warner and Tim Kaine, both former governors who have visited Tangier, sent a letter to the White House asking Trump to fulfill his promise to the island’s mayor, James “Ooker” Eskridge.In the summer, Trump called Eskridge, whose constituents are overwhelmingly Republican, and said his island of mostly watermen and their families would remain intact. The pledge came despite reports that show that Tangier could be uninhabitable in 25 to 50 years.Many island residents disagree that man-made climate change is to blame and say natural erosion washing away land has finally come to their doorsteps. In their letter, Warner and Kaine avoided the reason Tangier is disappearing at an average rate of eight acres a year.“We can debate the causes for why this is happening, but regardless, the effects are clear,” they wrote. “It is urgent that we address those effects.” They suggested that Trump expedite an Army Corps of Engineers study of Tangier’s infrastructure needs, consider a proposal to use soil from dredging projects to build up the island, and direct the U.S. Fish and Wildlife Service to manage part of the island.
Anti-Trump group says most of US economy backs Paris climate pact (Reuters) - U.S. cities, states and businesses accounting for more than half the country’s economy remain committed to the 2015 Paris climate accord despite President Donald Trump’s plan to pull out, an anti-Trump alliance said on Saturday.The “America’s Pledge” report, presented on the sidelines of 200-nation talks on global warming in Bonn, Germany, said non-federal U.S. backers of the Paris pact accounted for $10.1 trillion or 54 percent of U.S. 2016 gross domestic product. “The group ... represents a bigger economy than any nation outside the U.S. and China,” said former New York mayor Michael Bloomberg, a leading opponent of Trump’s decision in June to withdraw from the agreement and to promote U.S. coal and oil. No other nation has followed Trump’s lead. Several hundred people attended the launch of the report in a huge tent pavilion outside the main venue to try to persuade other nations “we are still in” despite Trump. The study, led by Bloomberg and California Governor Jerry Brown, says it is the first to assess the extent of non-federal support for climate action by U.S. cities, businesses and states. Some green activists said the plans did not go far enough. They interrupted a speech by Brown to denounce fracking and oil drilling in California and unfurled a banner showing the California flag, with an oil rig spraying oil onto the grizzly bear it depicts.
Jerry Brown, President of the Independent Republic of California —On his way to the United Nations climate talks in Bonn, Germany, this week, Jerry Brown stopped over at the Vatican, where a doleful group of climate scientists, politicians and public health officials had convened to discuss calamities that might befall a warming world. The prospects were so dire—floods and fires, but also forced migration, famine and war—that some of the participants acknowledged difficulty staving off despair.California’s doomsayer governor did not express much optimism either. Seated between an economist and an Argentine bishop at the Pontifical Academy of Sciences, Brown leaned into his microphone and said, “It is despairing. Ending the world, ending all mammalian life. This is bad stuff.” “There’s nothing that I see out there that gives me any ground for optimism,” he went on. Still, he promised action: “I’m extremely excited about doing something about it." Even though President Donald Trump has abandoned the Paris climate agreement and called climate change a “hoax,” and even though he is proceeding to scrap the Obama-era Clean Power Plan and promoting the production of coal, Brown insisted to his audience at the Vatican that these policies do not reflect the true sensibilities of the United States. The small crowd burst into applause when he added, “Over time, given the commitments that we’re seeing in this room today, and what we’re seeing around the world, the Trump factor is very small, very small indeed.” In the raw balance of power between a governor and a president, Brown has almost no standing abroad. What he does have is a platform, and a proposition: Crusading across Europe in his Fitbit and his dark, boxy suit, Brown advances California and its policies almost as an alternative to the United States—and his waning governorship, after a lifetime in politics, as a quixotic rejection of the provincial limits of the American governor. In the growing chasm between Trump’s Washington and California—principally on climate change, but also taxes, health care, gun control and immigration—Brown is functioning as the head of something closer to a country than a state.
Protesters Jeer as Trump Team Promotes Coal at U.N. Climate Talks - — The Trump administration made its debut at a United Nations conference on climate change on Monday by giving a full-throated defense of fossil fuels and nuclear energy as answers to driving down global greenhouse gas emissions. The forum — the only official appearance by the United States delegation during the annual two-week climate gathering of nearly 200 nations — illustrated how sharply the administration’s views are at odds with those of many key participants in the climate negotiations. George D. Banks, special adviser to President Trump on international energy issues, led a panel with top American energy executives. “Without question, fossil fuels will continue to be used, and we would argue that it’s in the global interest to make sure when fossil fuels are used that they be as clean and efficient as possible,” Mr. Banks said. “This panel is controversial only if we chose to bury our heads in the sand.” But even before the Trump team could make its case, the panel was disrupted for more than 10 minutes by scores of chanting and singing demonstrators. The protesters then walked out, leaving the room half empty. Throughout the remainder of the presentation, audience members shouted down and mocked White House officials who attempted to explain away President Trump’s stated view that global warming is a hoax. It was a rude reception for the Trump administration at the first major United Nations climate conference since President Trump took office and declared that the United States would withdraw from the Paris climate accord signed by more than 195 nations in 2015. Mr. Trump has filled top environmental posts with officials who have expressed doubt about established climate science, including studies published by numerous federal agencies.
Trump climate exit panned in Bonn but cheered in Lordstown, Ohio - Kevin Scott took a swig of his Pabst Blue Ribbon and professed his love for the environment. Inspired by a boyhood hunting and fishing, the 46-year-old Ohio autoworker earned a degree in environmental policy. But Scott is also proud of his vote for President Donald Trump, who pledged to rescind environmental regulations and ditch the global Paris pact on climate change. In the hard-hit northeastern corner of Ohio, the promise of bringing back steel and other factory jobs is the primary concern. Scott says his support of the president’s move to exit the Paris climate is about fairness, not the environment. "I’m glad we did," Scott, the son of a steelworker, said when asked about the proposed withdrawal. "If you’re going to worry about global warming then everybody on the globe should be doing something about it -- or following the same laws." As the international climate negotiators in Bonn, Germany scramble to salvage a global climate pact after Trump said the U.S. would bow out, the president’s backers in the industrial heartland are cheering him on. Whether it’s ditching Paris, moving to slash funding for the Environmental Protection Agency or rescinding a series of environmental regulations, interviews in the industrial area of Lordstown, Ohio, show those moves are popular among factory workers. They see them as Trump making good on his pledges to restore factory jobs. Democrats had a history of coming to the area and making union workers promises they never kept, said John Russo, who taught labor studies at nearby Youngstown State University for more than 30 years. "When Democrats didn’t come through, Trump’s appeal made a lot of sense and they said, ‘Let’s give this guy a try.’" Union workers now say they see that Trump is trying. While environmental groups are suing and Democratic governors are making their own pilgrimage to Bonn to pledge they will tackle climate change, polling shows Trump’s supporters support his moves on Paris and the EPA.
Trump’s ‘top priority’ at climate talks: protecting an Obama legacy - The Trump administration’s priority at the UN climate talks in Bonn is to block developing countries like China from getting an easier ride.That is what the US president’s lead climate adviser George David Banks told reporters in an impromptu corridor huddle on Tuesday. It was the most high level engagement with the process seen from the White House since Donald Trump announced his intention to withdraw from the Paris climate agreement – unless the US could secure more favourable terms.Asked what the US hoped to achieve at the talks, Banks said: “We want to make sure that we do what we can to avoid bifurcation. Bifurcation is a major flaw in the framework convention and we certainly don’t want to see it in the Paris Agreement. So I would say that’s probably the number one priority.”This fortnight’s talks have seen the reemergence of the idea that rich and poor countries can be divided into two camps – a firewall his predecessor Barack Obama fought to overcome with the Paris Agreement.The original UN climate convention divided the world into industrialised “annex one” countries and the rest. The Paris deal blurred that line, getting governments to contribute what they could, “in light of different national circumstances”. China, for example, has set a tougher target than Chad. Significantly, China committed to emissions curbs for the first time. Despite this, a major argument deployed against the Paris deal by Trump and his environment chief Scott Pruitt was the advantages they said it gave to China and other developing countries.
Democrats are shockingly unprepared to fight climate change - There’s a wrinkle in how the United States talks about climate change in 2017, a tension fundamental to the issue’s politics but widely ignored. On the one hand, Democrats are the party of climate change. Since the 1990s, as public belief in global warming has become strongly polarized, the Democratic Party has emerged as the advocate of more aggressive climate action. The most recent Democratic president made climate policy a centerpiece of his second term, and the party’s national politicians now lament and oppose the undoing of his work. Concern for the climate isn’t just an elite issue, either: Rank-and-file Democrats are more likely to worry about global warming than the median voter. On the other hand, the Democratic Party does not have a plan to address climate change. This is true at almost every level of the policy-making process: It does not have a consensus bill on the issue waiting in the wings; it does not have a shared vision for what that bill could look like; and it does not have a guiding slogan—like “Medicare for all”—to express how it wants to stop global warming. Many people in the party know that they want to do something about climate change, but there’s no agreement about what that something may be. This is not for lack of trying. Democrats have struggled to formulate a post-Obama climate policy because substantive political obstacles stand in their way. They have not yet identified a mechanism that will make a dent in Earth’s costly, irreversible warming while uniting the many factions of their coalition. These problems could keep the party scrambling to face the climate crisis for years to come.
Syria formally joins Paris climate agreement: U.N. (Reuters) - Syria has formally jointed the 2015 Paris deal aimed at slowing climate change, the United Nations said on Tuesday, leaving the United States as the only country opposed to the pact. Syria, racked by civil war, and Nicaragua were the only two nations outside the 195-nation pact when it was agreed in 2015. Nicaragua’s left-wing government, which originally denounced the plan as too weak, signed up last month. Syria announced last week that it intended to join. U.N. spokesman Stephane Dujarric told reporters in New York that Syria had submitted instruments of accession to the Paris climate deal and that the move would enter into force for the country on Dec. 13. U.S. President Donald Trump, who has expressed doubts that man-made greenhouse gas emissions are the prime cause of global warming, announced in June that he intended to pull out and instead promote U.S. coal and oil industries. Overall, the Paris agreement seeks to limit a rise in temperatures to “well below” two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, ideally 1.5. The U.N.’s weather agency said on Monday that this year is on track to be the second or third warmest since records began in the 19th century, behind a record-breaking 2016, and about 1.1 Celsius (2F) above pre-industrial times.
US is acting ‘like a 5-year-old’ over global warming, EU official says -- Donald Trump’s “America first” foreign policy is starting to undercut progress at the annual talks on fighting global warming. The U.S. president’s vow to walk away from the landmark Paris Agreement on climate change and spur fossil fuels has encouraged countries from India to China to wonder why they should make sacrifices at two weeks of discussions held by the United Nations, which finish Friday in Bonn. While envoys from almost 200 nations will make progress implementing the Paris deal at this year’s meeting, those involved in the process say the three-decade-old talks are in danger of drifting in the absence of leadership from rich nations and the long-promised $100 billion a year in climate finance for the developing world. “This is the worst moment for the Americans to start behaving like a five-year old all of a sudden,” Christian Ehler, a German member of the European Parliament who speaks on EU and U.S. relations at the climate change talks, said in an interview. “The leader of the western world is stepping out of the multilateral framework used to tackle the most dramatic problem the world might be facing in the next 100 years.” Old divisions emerged between richer and poorer nations. India, whose pollution levels are rising faster than any other industrial nation, stressed the need to include “equity” in the discussions, allowing it to keep expanding its emissions. China sought to differentiate responsibilities between developed and developing countries, a move that would expand its wiggle room in meeting commitments. Even the leaders of France and Germany showed a split as they attempted to lead a diplomatic charge to keep the global warming fight on track. French President Emmanuel Macron called for a minimum price on carbon pollution while German Chancellor Angela Merkel defended her country’s use of coal and the need to preserve jobs in industry. There was little progress from rich nations in saying when they’d achieve the goal of advancing $100 billion a year for developing-world climate projects, a target they’ve promised to achieve by 2020.
Macron: France will cover US share of funding for UN climate panel | TheHill: French President Emmanuel Macron said Wednesday that France would cover the amount the U.S. contributed for climate science research to a United Nations panel after President Trump signaled America would exit the Paris climate change pact. “They will not miss a single euro,” Macron said, according to Reuters, referring to the U.N.'s Intergovernmental Panel on Climate Change (IPCC). The U.S. has given the IPCC about 2 million euros a year in the past.Trump announced in June he would be withdrawing from the Paris agreement, a pact he denounced as "unfair." “The bottom line is that the Paris accord is very unfair, at the highest level, to the United States,” Trump said at the time. The Trump administration filed a formal notice with the U.N. in August that it would be leaving the agreement "as soon as it is eligible to do so." The earliest the U.S. can leave is Nov. 4, 2020. Trump's decision was met with widespread criticism. Earlier this month, an official in Macron's cabinet said Trump is "for the time being" not invited to the climate change summit scheduled to be held next month in France. The summit — scheduled for Dec. 12 — will include more than 100 countries and nongovernmental organizations.
Norway’s Wealth Fund Considers Divesting From Oil Shares -- Norway’s $1 trillion sovereign wealth fund is considering a divestment of holdings in international petroleum companies, a sign that even Europe’s dominant producer does not have full confidence in oil’s future. The recommendation on Thursday by the Norwegian Central Bank, which manages the fund, is potentially the biggest advance yet for a global fossil-fuel divestment campaign that has been promoted on college campuses and by environmental activists. It could also be a setback for the proposed initial public offering of the Saudi national oil company, known as Aramco, since the Norwegian sovereign wealth fund, the world’s largest, would be a potentially large investor. The public offering depends on high oil prices, while the move by the Norwegian bank suggested uncertainty about the future demand for oil. “It’s very significant symbolically because it sends a signal that even the people who make money from oil and gas are coming up with divestment plans,” said Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin. “The Norwegian view is that oil has had a good run and will have a good run for a couple of decades but it’s not the only future that is out there.” With roughly $35 billion invested in oil companies, the Norwegian sovereign wealth fund is a large investor in Exxon Mobil, Royal Dutch Shell, Total, Chevron and Norway’s own oil giant, Statoil. Statoil has begun to diversify its holdings by building large offshore wind-energy projects.
Climate action by China, India to offset Trump: study (Reuters) - Global warming is likely to be slightly less severe than previously expected thanks to stronger climate policies by China and India that will offset less U.S. action under President Donald Trump, a study showed on Wednesday.But average world temperatures are still on track to rise far above the key goal set in the 2015 Paris Agreement of limiting warming to “well below” two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, it said. The Carbon Action Tracker (CAT) report, by three independent European research groups, said current policies meant the world was headed for a warming of 3.4 degrees Celsius (6.1 Fahrenheit) by 2100, down from 3.6 degrees (6.5) it predicted a year ago. “This is the first time since the CAT began tracking action in 2009 that policies at a national level have visibly reduced its end of century temperature estimate,” it said. China was on track to over-achieve its pledge under the Paris Agreement to peak its carbon emissions by 2030, it said. And India was also making progress to limit a surge in emissions driven by more coal use. A rise of 3 degrees Celsius (5.4F) in global average temperatures could cause loss of tropical coral reefs, Alpine glaciers, Arctic summer sea ice and perhaps an irreversible melt of Greenland’s ice that would drive up world sea levels, a U.N. science panel says. “It is clear who the leaders are here: in the face of U.S. inaction, China and India are stepping up,”
Taiwan says shut out of U.N. climate talks due to China pressure (Reuters) - Taiwan said its environment minister has been prevented from attending an annual U.N. climate meeting even with credentials as a non-governmental participant due to pressure from China. It represents the latest case of self-ruled Taiwan not being able to take part in an international event because of opposition from China, which objects to the island it claims under its “one-China” stand being accorded anything akin to the status of an independent state. Environmental protection agency minister Lee Ying-yuan had hoped to attend a U.N. climate change meeting in Bonn, Germany, the island’s foreign ministry said in a statement late on Monday. “Due to China’s interventions, environmental protection minister Lee was unable to enter the UNFCCC meeting,” it said, referring to the U.N. Framework Convention on Climate Change. Relations between Beijing and Taipei have nosedived since Tsai Ing-wen was elected the island’s president last year. China believes she wants formal independence for Taiwan, a red line for Beijing. Tsai says she wants to maintain peace with China but will defend Taiwan’s democracy and security. Taiwan’s foreign ministry spokesman, Andrew H.C. Lee, told a news conference in Taipei the president believed climate change was an important issue and the island would endeavor to take part in international meetings to address it. In Beijing, Chinese Foreign Ministry spokesman Geng Shuang said China’s position was very clear. “On the matter of Taiwan participating in international events, China’s position is very clear; that is, it must comply with the One China principle,” Geng told reporters, without elaborating. Organizers of the event in Bonn where were not immediately available for comment.
Saudi Arabia says remains committed to climate accord | Reuters: (Reuters) - Saudi Arabia remains committed to the 2015 Paris climate change agreement, the energy minister for the world’s top oil exporter said on Saturday. Khalid al-Falih’s statement came as almost 200 countries started talks in Germany to bolster a global climate accord that the United States plans to quit. “For our part, the kingdom will remain committed to maintaining our national contributions on taking climate actions that would also enable sustainable development in line with Saudi Vision 2030,” Falih said. The kingdom aims to wean itself off oil as part of its ambitious Vision 2030 economic reform agenda. “Thus, our nationally determined contribution reflects our commitment to develop and commercially deploy low-emission technologies,” Falih added, saying Riyadh plans to rely more on carbon capture technology, solar energy and cleaner fuels. The Paris climate agreement sets a goal of limiting warming to “well below” two degrees Celsius (3.6 Fahrenheit) above pre-industrial times, ideally 1.5 C. Nationally determined contributions (NDCs) are goals set for each individual country in order to achieve the worldwide climate goal. The United Nations says the world is on track for a temperature rise of about three degrees by 2100.
EPA is taking more advice from industry — and ignoring its own scientists - When the Environmental Protection Agency this week proposed repealing tighter emissions standards for a type of freight trucks, it cited research conducted by Tennessee Tech University but underwritten by the biggest truck manufacturer challenging the rule. Fitzgerald Glider Kits — which makes new truck bodies, called gliders, that house refurbished engines — had questioned both the legality and data underpinning the Obama-era rule. Its products would have been required to meet the tougher pollution standards starting in January. The company’s recent petition to the EPA included a letter signed by Tennessee Tech’s president and the head of the school’s Center for Intelligent Mobility, soon to be housed in a new facility built by Fitzgerald. EPA Administrator Scott Pruitt, who two months earlier had met with company officials, quickly agreed their arguments had merit. It was the latest example of a profound shift unfolding in the EPA under President Trump, in which the agency has reassessed its own data and analyses at the prompting of corporations. On pesticides, chemical solvents and air pollutants, Pruitt and his deputies are using industry figures to challenge past findings and recommendations of the agency’s own scientists.
California’s new law aims to tackle imported emissions - California has started a large investment in infrastructure. In early 2017, the US state approved $52bn in spending on repair and maintenance projects. As one of the most progressive states for emission reductions and proactive climate policy, California has been examining ways to ensure that its infrastructure investments minimise greenhouse gas emissions.Jerry Brown, California’s governor, signed into law the Buy Clean California Act. The act requires that the state set a maximum “acceptable lifecycle global warming potential” for different building materials, specifying that only materials with embodied emissions below that level can be purchased by the state.As the state government is the largest purchaser of steel and concrete in California, proponents hope that it can leverage its buying power to help promote lower-carbon production practices.This represents the first time a US state is trying not only to reduce its own emissions, but to also reduce the emissions embodied in some of the goods that it imports. This could prove to be an important part of reducing the state’s overall contribution to climate change.As Carbon Brief has previously reported, around 22% of all global CO2 emissions stem from the production of goods that are traded internationally. About 6% of total US emissions are due to net imports of CO2 embodied in goods.While steel and other construction materials purchased by the state represent only a small part of California’s total carbon emissions, this bill sets a precedent that imported goods can be regulated based on their lifecycle carbon impacts.
Sales-weighted fuel-economy rating (window sticker) of purchased new vehicles for October 2007 through October 2017 - The sales-weighted fuel economy was calculated from the monthly sales of individual models of light-duty vehicles (cars, SUVs, vans, and pickup trucks) and the combined city/highway fuel-economy ratings published in the EPA Fuel Economy Guide (i.e., window sticker ratings) for the respective models. For both monthly and model year averages, sales-weighted arithmetic means were calculated. (The arithmetic mean was used here to determine the average of window sticker ratings, not the average fuel consumption rate.) The bars in the graph show the average for each model year. Vehicles purchased from October 2007 through September 2008 were assumed to be model year 2008. Analogous assumptions were made for vehicles purchased in each following model year. The fuel-economy information was available for 99.5% of vehicles purchased. For cases in which the EPA Fuel Economy Guide contained multiple fuel-economy ratings for a vehicle model, the average of these ratings was used (without regard to sales figures for each specific engine or vehicle-model variant). Additionally, when a vehicle model was sold during a particular model year but it is not listed in that year’s EPA Fuel Economy Guide, the fuel-economy rating(s) from the most recently available year were used. Finally, for very low sales-volume manufacturers (e.g., Ferrari, Rolls-Royce, etc.), all vehicle models for that manufacturer were aggregated and one average fuel-economy rating was calculated. Analogously, the sales figures for such manufacturers and models were also aggregated each month. (Data for recent months are occasionally updated in the underlying EPA data source, possibly resulting in small changes to recent fuel economy values.)
Former EPA attorneys slam ‘sue and settle’ policy | TheHill Dozens of former Environmental Protection Agency (EPA) attorneys are assailing the Trump administration’s policy meant to curb legal settlements with environmental groups. The 57 attorneys, who all served in nonpolitical career roles, accused EPA Administrator Scott Pruitt of deliberately misrepresenting legal settlement practices and the work of attorneys both at the EPA and the Justice Department. “Your recent pronouncements make unfounded and unsupported accusations about EPA’s longstanding and non-partisan approach to defending the agency’s actions in lawsuits that Congress empowered members of the public to bring when the agency allegedly fails to follow the law,” they wrote in their open letter released Monday. “Your misrepresentations do the public a great disservice by sowing confusion about the important role the public plays in ensuring that EPA complies with and enforces public health and environmental protection laws. Your directive compounds that disservice by attempting to give regulated parties a special and powerful seat at the table with no corresponding role for other members of the public,” they said. The letter comes almost a month after Pruitt rolled out a policy to clamp down on what critics call “sue and settle,” the practice of federal agencies like the EPA settling lawsuits with environmental groups by agreeing to consider whether to take the regulatory action that the groups want.
EU proposes 30 percent CO2 reduction for cars by 2030 - The European Commission announced on Wednesday proposals for stricter carbon dioxide (CO2) limits for cars and vans to cover the period from 2021 up until 2030, the current key target year in the battle against climate change. The main proposal from the 28-member Commission — the body tasked with proposing legislation and the daily running of the EU — is that CO2 emissions from cars and vans be reduced by 30 percent from the levels recorded in 2021, the year when current rules will no longer apply. By 2025, the Commission wants new cars to emit 15 percent less CO2, with the 30 percent rate kicking in five years later. Carmakers who fail to hit the desired targets would, under the proposed legislation, be subject to penalties of up to €95 ($110) for every gram of CO2 above the prescribed limit, which could lead to potentially huge fines in the event of wholesale flouting. One carrot-and-stick element of the EU's proposal relates to the introduction of zero and low emission vehicles, such as electric or alternative fuel vehicles. If carmakers hit a benchmark target figure in the production of these type of vehicles, they will face less strict overall emission reduction targets. “To drive and lead the global shift to electric, Europe has to get its house in order." Part of getting that house in order should extend to dramatically reshaping the make-up of the European car market by greatly increasing the amount of electric cars on the continent's roads, he said. Yet the main target figures have been the source of major debate at EU level, with significant opposition and fierce lobbying coming from car industry representatives right up until Wednesday morning. Large automotive sectors, such as Germany, have had a particularly big role in the discussions. While the proposals are now past the first major stage of the legislative process, they must be approved by the 28 member states of the EU and by the European Parliament before becoming law.
The Federal Electric Vehicle Tax Credit Is a Bipartisan Success Story, Which House Republicans Want to Undo -- As the House and Senate develop their respective versions of a tax reform bill, the $7,500 federal electric vehicle (EV) tax credit is positioned to be a potential bargaining chip. The House's version of the bill, the " Tax Cuts and Jobs Act ," includes a repeal of the EV tax credit . The Senate's newly introduced version, at the moment, doesn't kill the credit . Current policy calls for an already-scheduled phase out of the credit over the two calendar quarters after each automaker surpasses 200,000 total plug-in vehicle sales. The new House proposal would eliminate the tax credit entirely at the end of this year—only EVs registered on or before Dec. 31 would qualify. Regardless of the environmental and human health benefits of displacing gasoline and diesel combustion with plug-in electrics, thoughtful policymakers and legislators from both sides of the aisle have long understood the importance of EVs when it comes to promoting energy independence and security. A decade ago, the Energy Independence and Security Act of 2007 , promoted and signed by Republican President George W. Bush, first deployed "incentives for the development of plug-in hybrids." The stated purpose of the act included moving "the United States toward greater energy independence and security" and "to increase the efficiency of products, buildings and vehicles." One year later, another bill passed with bipartisan support, the Energy Improvement and Extension Act of 2008 , to again be signed by President Bush. This version was written to include all types of plug in electric vehicles (both battery only and plug hybrid electrics) that met certain battery size criteria for providing a meaningful all electric range. it created the first non-refundable consumer tax credits for at least the first 250,000 plug-in vehicles sold.
Are Electric Cars As Clean As They Seem? -- The sheer force of Elon Musk’s vision is building the infrastructure needed to sustain millions of electric cars in the United States, Europe, and elsewhere. Most major manufacturers have joined the enthusiasm to ditch old-school engines to construct the international fleet of tomorrow. But this new step doesn’t solve all of the world’s environmental pollution issues related to transportation. The extraction of rare earth minerals, the disposal of lithium-ion batteries, and the sourcing of the energy that powers charging stations are all issues that plague the future of the green argument for electric vehicles.As Wired notes in an article from last year, electric vehicles are most efficient when they’re light. That way, they need minimal energy to transport their valuable cargo. In search for a light material to carry and conduct batteries, scientists discovered the power of lithium - a highly conductive metal that adds little burden to the vehicle’s frame.Discovered in 1817, this key ingredient is mostly extracted from deposits in the United States, Chile, and Australia. The most cost-effective method for lithium processing involves pumping salt-rich waters into special evaporation ponds that eventually produce lithium chloride. Then, a special plant adds sodium carbonate to turn the former lithium chloride into lithium carbonate, a white powder. The whole process requires power, which more often than not is sourced from fossil fuels, not renewables or nuclear energy. This is similar to the issue electric-car charging stations face when evaluating the efficiency of their establishments in eliminating pollution from the environment. In most parts of the U.S., if the stations source their electricity from the grid, they’re just increasing demand for fossil fuels since coal, oil, and natural gas power the majority of the country anyway. Some states, like California, are obvious exceptions because of their heavy investments in green energy, but for the most part, the pattern holds.
The Shipping Industry Needs to Deliver Cleaner Cargo Ships, or We’re All Sunk -- Watching ships pass through the century-old Panama Canal offers a glimpse into our modern economy. Every day, vessels converge here to move billions of dollars’ worth of food, fuel, cars, clothing, raw materials, and electronics to the far corners of the world. It’s awe-inspiring. But it’s also fairly alarming.About 90 percent of everything we buy will travel on ships like these at some point. And all of these behemoths burn fossil fuel, contributing significantly to the warming atmosphere and shifting climate patterns.Many cargo ships still use “bunker fuel” — the sludgy dregs of the petroleum refining process. The noxious blend is dirt-cheap, making it possible to charge next to nothing to ship goods internationally. All of which means our unbridled consumerism hitches a ride on some of the dirtiest vehicles on earth. (At least they hold tons of stuff, right?) The industry’s reliance on high-carbon fuel poses a major stumbling block for global efforts to rein in pollution. A few companies are ramping up investment in pilot projects that use renewable fuels and cleaner technologies. And a vocal minority within the industry is clamoring for a maritime climate policy to spur more innovation. But on the whole, there’s widespread reluctance to adopt meaningful change.
The California Duck Curve isn’t confined to California - The California Duck Curve is causing concern among California’s utilities, who wonder whether they will be able to ramp generation up quickly enough to meet evening peak demand when all the new solar capacity California plans to add over the next few years comes on line. As the title of this post notes, however, the California Duck Curve isn’t unique to California. It’s present everywhere to a greater or lesser extent regardless of the shape of the daily load curve, and in many places it’s a more serious problem than it is in California. From the Institute for Energy Reasearch: (The California Duck Curve) provides a scenario of a sunny day where distributed photovoltaic generation pulls down non-solar electricity demand to extremely low levels at midday when the sun is at its hottest and distributed photovoltaic generation is at a high. That is, the state’s non-solar generating capacities must reduce their production to inefficient lows when the energy supply at the “belly” of the duck from solar distributed generation is at its highest. Later in the day when solar generation is declining and California residents are coming home from work and turning on their appliances, electricity demand ramps up dramatically, which requires flexible generation capacity to come on-line very quickly to meet it. The California ISO is worried that the “neck” of the duck curve could overwhelm the state’s available generating capacity. Figure 1 shows the duck curve. It clearly illustrates the problem California’s utilities face. Adding more solar generation increases ramp rates leading up to the evening demand peak that coincides with the setting Sun, and if enough is added California’s load-following capacity could find itself unable to ramp up quickly enough to keep the air conditioners running. Could this happen? The obvious solution is to build more CCGT plants or add less solar, or some combination of both, but California being California the emphasis is being placed on green panaceas such as batteries, small hydro and demand management instead. So the answer is yes, it could:
Puerto Rico Hit by New Blackout Just as Governor Touts Recovery -- A new power outage hit Puerto Rico on Wednesday, immobilizing parts of the San Juan area just hours after the governor heralded a major accomplishment on the path to recovery. Earlier in the morning, Governor Ricardo Rossello had told his 140,000 Twitter followers that the Puerto Rican power utility had reached a short-term goal of getting power output back to 50 percent of normal levels, adding the hashtag, “#PRSeLevanta," or Puerto Rico pulls itself up. The celebration lasted till the lights went out. A statement from the power agency said a technical problem in a plant was responsible for the outage. Almost two months after Hurricane Maria slammed into the U.S. commonwealth, most of the island’s households remain without power as the government prioritizes healthcare facilities and other core infrastructure. San Juan has been better off than many rural areas, where the destruction has proven far greater. Meanwhile, the rebuilding of the grid remains the island’s greatest financial challenge and a major political flashpoint in San Juan and Washington. Adding to the discord, the head of a major electric-utility union who spoke to reporters Wednesday questioned why much of the generation capacity at the Palo Seco plant near San Juan remained idled. The union leader, Angel Figueroa Jaramillo, said restarting Palo Seco’s existing infrastructure would significantly reduce future blackouts, because the metropolitan area would rely less on energy generated at the opposite end of the island that has to travel significant distances. The government has said the plant is closed due to safety concerns, but that argument hasn’t satisfied detractors.
Federal utility: $900M to move power plant ash to landfill (AP) — A federal utility's top executive estimated Thursday that it would cost $900 million and take 24 years to comply with a court order to move coal ash from unlined and leaking pits and ponds to a lined landfill on the site of a Tennessee power plant. Tennessee Valley Authority CEO Bill Johnson said in an interview Thursday that a less-preferred option, moving the ash offsite from the Gallatin Fossil Plant, would cost $2 billion. TVA had mentioned the $2 billion figure during a federal trial in February over pollution claims at the plant about 40 miles from Nashville. The Southern Environmental Law Center has said the estimates are far too long and high. Johnson said the timeline might be reduced, but not dramatically. "There's a lot of material, and it just takes time to do this," In August, a federal judge ordered the ash excavated and removed, saying it's leaking pollutants into the Cumberland River in violation of the Clean Water Act. But the judge said there was scant evidence of any harm caused by the pollution. TVA is appealing the order, hoping it can instead cap the unlined ash ponds over 12 years at a $200 million cost. The TVA contends capping the coal ash would be environmentally friendly, since it wouldn't risk a spill while crews excavate and move the polluted material. Environmentalists and the district judge say capping risks further pollution, since the trial already determined that the current pits and ponds are leaking.
US House Republicans plan repeal of oil, gas tax credit, without opposition - The US tax code overhaul being pushed by House Republicans calls for eliminating a credit for producing oil and natural gas from marginal wells, but the industry group that originally lobbied for the creation of the credit about 13 years ago is not pushing to keep it place. "As sound of a philosophical structure as it has, it's just not something that's been active enough to have the necessity we thought it would have," said Lee Fuller, vice president of government relations with the Independent Petroleum Association of America. The credit, which was enacted in 2004 after a campaign by IPAA, allows producers of marginal oil and gas wells to claim a maximum of $3/b or 50 cents/Mcf on a small portion of daily production if prices fall below $15/b or $1.67/Mcf, based on the average price from the previous year, according to IPAA. Marginal wells are defined as not producing more than 15 b/d of oil or 90 Mcf/d of gas. "They're really designed to be a safety net for these particular types of production when prices really fall very low," Fuller said. According to Fuller, the credit was triggered only once, last year for gas prices and could still be claimed this year for some marginal producers, but has never been triggered for oil since it was enacted in 2004. Fuller said that roughly 80% of US oil wells and nearly 70% of gas wells are defined as marginal wells. Last year, the US Energy Information Administration estimated that there were 380,000 such oil wells operating in the US at the end of 2015, compared to 90,000 wells producing more than 15 b/d. Fuller said the tax bill unveiled by Senate Republicans Thursday does not appear to repeal either the marginal well credit nor the enhanced oil recovery credit identified for repeal in the House bill. The full text of the Senate bill, however, has not been released. He said that provisions the IPAA and other oil and gas industry groups had been pushing for, particularly the Intangible Drilling Cost and percentage depletion deductions, remain intact in both the House and Senate tax bills. "That's a huge benefit to the capital recovery opportunities that our producers pursue," Fuller said.
Texas wind energy projects worth about $11 billion in limbo after US House tax vote - The U.S. House approved its tax overhaul plan by a vote of 227-205 today. Wind energy backers were unable to convince House members to allow the production tax credit to continue its planned phase out by 2019. The Senate plan does not include that new wind phase out, which would slash tax credits for projects already in the pipeline. Thirteen Republicans voted against the GOP plan Thursday. But in the Senate, the Republicans have 52-48 majority and couldn't afford to lose many votes. The House is scheduled to decide on tax reform that includes retroactively slashing the wind energy production tax credit. And, that's worrying industry leaders in Texas, which has lead the U.S. in electricity produced by wind farms and has a large percentage of the nation's wind projects currently in the pipeline. A "yes" vote in the House this week would not automatically be a deal killer for the wind industry. The Senate's plan keeps the existing tax credits, which are being phased out by 2019. If the House and Senate versions differ on the tax credits, the versions would have to be reconciled later this year. "It would be a devastating blow," said Michael Rucker, CEO of Colorado-based Scout Clean Energy, about the House version. "By completely changing the tax credit and start of construction guidelines, most of these projects become unfeasible." The American Wind Energy Association estimated that $50 billion in projects nationwide and 60,000 jobs are at stake. Tom Kiernan, CEO of the American Wind Energy Association, said there are also $6 billion in wind energy transactions that were expected to close by year's end but are now frozen. Many prominent conservative groups and think tanks have opposed renewable energy tax credits as anti-free market. They often criticized the credits as corporate welfare benefiting billionaires such as Warren Buffett and industrial powerhouses such as General Electric.
Chatterjee details interim plan to save coal, nuclear plants - Last week, Chatterjee revealed to reporters that he is considering an interim step to keep at-risk coal and nuclear generators online while FERC considers the DOE's controversial Notice of Proposed Rulemaking (NOPR). On Wednesday, Chatterjee provided further detail of those plans in an interview with Utility Dive, outlining language of a potential "show cause" order under Section 206 of the Federal Power Act. The order would require each regional grid operator to provide "interim compensation for existing resources that may provide necessary resilience attributes and are at risk of retirement before the conclusion of the longer-term rulemaking proceeding," Chatterjee said, or "show cause that it not be required to do so."FERC would justify its actions with statements from the North American Electric Reliability Corporation and others asserting that "reliable and resilient operation of the bulk power system requires a balanced portfolio of diverse resources," Chatterjee said. It would also cite precedents where FERC "has recognized that at times market revenues alone may not prevent the retirement of resources necessary for reliability purposes."To prevent the retirement of critical power plants in the past, FERC has directed "the creation of and approved different forms of reliability-must-run provisions in the RTO and ISO tariffs," Chatterjee said, reading from draft language. "The commission has also approved out-of-market compensation mechanisms to mitigate specific reliability risks deemed to be unaddressed by the existing market structure." With interim compensation mechanisms in place, Chatterjee said FERC could issue a longer term rulemaking that would explore whether grid operators should be required to plan for "correlated risk outages," and how they could be directed to "compensate resources for resilience attributes."
For coal magnate tied to Trump and Perry, accusations of government 'bailout' - Houston Chronicle: - The Ohio coal magnate Robert Murray had a problem.Coal prices were near historic lows, and the prognosis for coal mining companies, including Murray Energy, was only going to get worse as their best customers, coal-fired power plants, closed across the country. Murray, a prominent supporter of President Donald Trump, turned to the president, urging him to declare an emergency across the electric grid that would prevent any more coal plants from closing, according to a letter Murray sent to the White House in August.Less than two months later, Energy Secretary Rick Perry, whose failed 2012 presidential campaign received a six-figure contribution from Murray and his employees, released a controversial plan to raise electricity prices paid to coal and nuclear plants. The proposal falls short of the emergency declaration sought by Murray, analysts said, but it nonetheless appears designed to particularly benefit Murray and his company.Since introducing his proposal in September, Perry has consistently described the goal as protecting the grid from power outages caused by loss of coal and nuclear plants unable to compete with the lower costs of natural gas and falling costs of wind and solar energy. But under the narrow terms of the Energy Department's proposal, less than 25 percent of the nation's coal and nuclear plants would qualify for increased rates, according to the Boston research firm The Brattle Group. Vote on Dec. 11 Just four of the dozens of U.S. electricity markets would be affected by Perry's proposal, analysts from three independent research firms said, and none more than PJM Interconnection, the nation's largest wholesale electricity market with customers in 13 states across the Mid-Atlantic, Midwest and South, and the core market for Murray Energy's coal. During one month last year, more than 70 percent of the coal Murray delivered to U.S. power plants went to plants in PJM, according to analysis by the Houston Chronicle of federal coal delivery data. "In any given month (Murray) sends the majority of his production to PJM," . "Murray is the biggest producer in northern Appalachia and the coal from there is the primary fuel source in PJM. De facto, he is the biggest beneficiary of anything that improves coal demand in PJM."
Goodbye, coal! 27 nations and states pledge to kill off the dirty fossil fuel - In a historic alliance, 27 nations and states have come together to eradicate coal from the world. Formed during the UN Climate Summit, the group includes the likes of Britain, Canada, Mexico, New Zealand and France, with the ambitious aim of completely phasing out coal by 2030.Oh, and representatives from the US were there too. But no, sorry. Trump has not decided to re-sign the Paris Climate Agreement or announced that all US states will be cutting out coal, for that matter. That’s unsurprising but disappointing. In fact, the US administration officials decided to hold their own panel at the very same UN Climate Summit instead, taking the time to promote fossil fuels. It’s one thing to be on the wrong side of history, it’s another to be on the wrong side of the present.The group, named the “Powering Past Coal Alliance,” aims to completely phase out coal from power generation before 2030. Member signatories included Angola, Austria, Belgium, Canada, Chile, Costa Rica, Denmark, El Salvador, Fiji, Finland, France, Italy, Luxembourg, the Marshall Islands, Mexico, the Netherlands, Niue, Portugal, Switzerland, the UK, some Canadian provinces and even some businesses. Most notably though, in a rebuke to President Trump, two US states (Washington and Oregon) signed the declaration. “Coal-fired power plants produce almost 40% of global electricity today, making carbon pollution from coal a leading contributor to climate change,” the declaration reads. “As a result, phasing out traditional coal power is one of the most important steps governments can take to tackle climate change.”
Poland turns to fossil fuel soulmate Trump as coal output flags (Reuters) - “Whenever you need energy, just give us a call,” U.S. President Donald Trump said on a visit to Poland in the summer. Now, with winter setting in, Warsaw is taking him up on the offer. Poland’s state coal trader Weglokoks is to due receive its first ever shipment of U.S. coal imminently and industry sources expect state or private buyers to take at least three more cargoes over the next seven months, even though Europe as a whole is shifting away from the most carbon-intensive energy source. With both countries led by fossil fuel advocates, the benefits are mutual. Poland has to meet a shortfall left by the failure of national mining giant PGG to achieve its production targets, while U.S. miners are relying on export growth as power utilities at home switch to cheaper, cleaner alternatives. Poland’s government, which like the Trump administration is championing its national mining industry, came to power in 2015 promising energy self-sufficiency for the European Union’s biggest coal-burning nation. Energy Minister Krzysztof Tchorzewski rejects any suggestion of crisis due to the problems at PGG, even though smaller traders have often queued for coal in recent weeks. “A psychosis related to coal shortages has appeared on the market,” he told reporters. “I can say that this winter no one will be cold in their homes because of a lack of coal.”
Italy keeps foot on gas as it calls for early end to coal (Reuters) - Italy is looking to phase out all coal power plant production by 2025 and boost the role of renewable energy as it seeks to reduce its carbon footprint, the government said on Friday. Laying out its roadmap for energy policy, Rome said the aim was for green energy sources to account for 28 percent of overall energy consumption by 2030 from 17.5 percent in 2015. In particular it said it wanted renewable sources to make up 21 percent of energy consumption in the transport sector, from 6.4 percent in 2015. Italy is also aiming to introduce more electric and hybrid vehicles. Industry minister Carlo Calenda, presenting the government’s framework document, said one idea being considered was to use power bills to help fund electric car incentives. But Rome said gas would continue to have a key role in the country’s energy future. It said it would promote new gas import pipelines to diversify supply, including the TAP pipeline to Azerbaijan and the EastMed pipeline that will import gas from the Mediterranean. The document made no mention of encouraging new liquefied natural gas (LNG) facilities but said current capacity would be awarded by auction and not on a fixed tariff basis. Italy imports about 90 percent of its gas needs, much of it from Russia.
Cheap Battery Forecasts Kill India's 25-Year Coal Power Deals -- India’s power distributors are balking at traditional 25-year thermal-power purchase contracts, avoiding lengthy entanglements so they can benefit as costs for batteries and renewable energy slide. Now in vogue: agreements that last 10 years or even less. “In the next five to 10 years battery storage may be coming in a big way,” Deepak Amitabh, chairman of state-owned power-trading company PTC India Ltd., said in an interview at his office in New Delhi. Distributors don’t want to be stuck in pricey agreements for two decades or longer, so it’s better to reach deals for as little as 10 years, he said. Longer-term power contracts have all but disappeared in the past two years except in the clean-energy segment, according to Amitabh. India invested in its first overseas battery-storage project in a deal announced earlier this month. One goal is to learn better methods of stabilizing the electricity grid back home as Prime Minister Narendra Modi targets almost tripling renewables capacity to 175 gigawatts by 2022. Unlike stable thermal electricity, green-power supply fluctuates with time of day and seasonal variations, a problem battery storage would help alleviate. “Why would buyers of power choose to lock themselves in high-priced long-term contracts when they can be reasonably certain of softer prices in the future, either via direct procurement deals with renewable-power generators or at the power exchange?” said Vandana Gombar, global policy editor at Bloomberg New Energy Finance in New Delhi. Solar and wind have become the cheapest sources of power in the country, with tariffs dropping to among the lowest in the world. Meantime, coal-fired power plants are struggling to find customers and ease a capacity glut.
S. Korea Stops Nuclear Plant Construction - Korea Hydro & Nuclear Power (KHNP) held a board meeting on November 16 and decided to stop the construction of the third and fourth units of the Shin Hanul Nuclear Power Plant and the first and second units of the Cheonji Nuclear Power Plant. Controversies are likely to continue with hundreds of billions of won already invested in the construction projects and the government having yet to prepare a plan for compensation. Those in favor of the construction of the nuclear power plants are claiming that nuclear power plants are safe tools for power generation as seen in the case of those that endured the magnitude 5.4 earthquake in Pohang on November 15. Those opposed to the construction are claiming that South Korea is not an earthquake-free zone and, as such, no more nuclear power plant should be allowed. The Joint Action for a Nuclear Free Society, which is a local environmental group, held a press conference in Seoul on November 16. “Both the earthquake in Gyeongju last year and the recent earthquake in Pohang occurred in the Yangsan fault zone in the southeastern region of the Korean Peninsula and the latter’s epicenter was shallower and the latter caused more damage although the former had a larger magnitude,” it said, adding, “At present, a total of 18 nuclear power plants are in operation and five are under construction in the southeastern region of the peninsula including Gyeongju, Busan, and Ulsan, where big earthquakes have occurred one after another, and the operation of the power plants should be stopped and safety measures should be prepared immediately.”
'No is no is no': A tiny township's fight against oil and gas waste disposal - Pittsburgh Post-Gazette -- This community of 740 people in Indiana County normally abides its wells — which have supplied residents royalty payments or free gas — but the prospect of hosting an underground waste reservoir has spurred a revolt.Grant’s citizens have filed appeals, enacted a ban, changed their form of local government and legalized nonviolent civil disobedience to try to stop it.The town is being sued by the state, while the well’s operator, which won a federal lawsuit against the municipality, is seeking monetary sanctions and attorneys’ fees of $561,000 — five times the town’s average account balance.On Oct. 30, U.S. Magistrate Judge Susan Paradise Baxter scheduled a trial for May to determine damages in the federal case.“We just don’t want it,” said Judy Wanchisn, a 75-year-old retired elementary school teacher helping lead opposition to the well. “You can put all the regulations you want in. A teaspoon of poison or two gallons, it’s still poison. Don’t regulate the harm.”Pennsylvania needs between 17 and 34 more disposal wells to meet current demands to get rid of oilfield waste fluids that can’t be readily reused, the consulting and engineering firm Tetra Tech estimated this spring. The alternative is trucking the fluid — at significant cost — to Ohio, which has more than 200 wells for entombing oil and gas waste fluids in deep rocks.
Marcellus shale drilling company pitches fracking to A-K Valley business leaders - TribLIVE: A Monroeville-based Marcellus shale well developer has plans to drill more natural gas wells in the Alle-Kiski Valley next year. Huntley & Huntley Energy Explorations of Monroeville will announce the new wells when approvals are finalized sometime next year, according to Paul Burke, vice president and general counsel for Huntley & Huntley. The company is best known for fracking for natural gas beneath Deer Lakes Park in West Deer and Frazer. Environmentalists and some park supporters opposed it. In the Valley, the company has permits for well pads in Allegheny Township, Upper Burrell and Plum. Elsewhere, it has a well pad under construction in Penn Township, Westmoreland County, and two more in the permitting process. It's also seeking approvals in Elizabeth Township, Allegheny County. Construction is planned at the other locations in the next several months, according to Burke. He declined to disclose them. Huntley & Huntley will hold public meetings with landowners near those sites to provide details on the project and its timeline. Increased Marcellus shale well development and more pipelines exporting the natural gas from the region offer prosperity for landowners and businesses, he said, and create more local jobs. Valentas said Marcellus shale wells provide income from leases with landowners and are “the savior of the family farm.”
New gas pipeline capacity sharply exceeds consumption, report says - Charges that the U.S. pipeline industry is building far more natural gas pipelines than it needs are being fueled by a new report showing that the capacity of lines approved by federal regulators over the last two decades was more than twice the amount of gas actually consumed daily in 2016. The report by the independent Analysis Group for the Natural Resources Defense Council said the Federal Energy Regulatory Commission has approved more than 180 billion cubic feet a day (bcf/d) of new pipeline capacity since 1999, when it began its current policy on approving interstate pipelines. The new capacity compares with the average daily consumption of only 75.11 bcf/d last year, the report said. Even during the Polar Vortex of 2013/14 when exceptionally cold temperatures in the Northeast boosted the need for heating fuel, consumption of 137 bcf/d was still significantly lower than the combined capacity additions, the report said, citing data from the federal Energy Information Administration. In January 2017, national consumption was 93.1 bcf/d, even further below the capacity of the additional pipeline network, the report said. The data on additions to pipeline capacity are from FERC.NRDC, in the report issued Nov. 6, said the overcapacity is being driven by the profits that can be earned by pipeline builders; by FERC’s willingness to accept builders’ assurances that there is a need for the additional gas, and by the regulator’s existing application policy that does not recognize big changes in the natural gas market since the policy began. “The report underscores very real concerns that we are overbuilding the natural gas pipeline system,” said Montina Cole, an attorney with NRDC’s ‘Sustainable FERC’ project.Cole told StateImpact that an increasing number of pipeline builders are justifying their projects with so-called affiliate agreements in which buyers of the gas are commercially linked with the carrier. When the buyer is an electric utility, that means ratepayers end up paying the cost of the pipeline, she said.“The pipeline developer is really on both sides of the transaction,” Cole said. “They are both selling the capacity, and the buyers are affiliates, which are increasingly electricity companies that have captive ratepayers.” She argued that FERC, which approves virtually all pipeline applications that come before it, is too ready accept builders’ assurances that there is a need for a pipeline.
Lawsuit seeks to stop work on Appalachian gas pipeline (AP) — Environmental groups are asking a court to stop construction of a natural gas pipeline that will run across northern Ohio and into Michigan and Canada, the latest in a series of challenges against pipelines being built to transport gas from shale deposits in Appalachia. The lawsuit filed Monday by the Sierra Club and others is requesting a new review of whether the NEXUS pipeline is needed. It also challenges the decision made by the federal commission that oversees gas pipelines that allowed construction to move ahead. Within the past month, surveyors have started staking the route and crews have cleared trees for the 255-mile-long pipeline, one of several being built or in the planning stages to carry gas from West Virginia, Pennsylvania and Ohio. Plans for the pipelines have generated intense opposition from residents worried about property rights, safety and damage to the environment. The mayor of a small city in northeast Ohio has gone to federal court in a bid to move the NEXUS pipeline route to a less populated area while another group of property owners haven't had success in getting the courts to consider their attempt to block the project. The opponents face an uphill battle because there aren't any known instances of a pipeline project being derailed after receiving approval from the commission. The lawsuit seeks an immediate halt to construction on the NEXUS pipeline. The Sierra Club is asking a federal appeals court in Washington to order a review of the Federal Energy Regulatory Commission's approval allowing construction. The environmental groups say that the federal commission is allowing work to begin before all of the legal challenges are considered.
West Virginia Legislators, Industry Leaders Digesting $83B Shale Deal - Wheeling Intelligencer -- From how petrochemical plants will impact the environment to whether drillers should get access to minerals even if they cannot obtain a lease for them, the $83.7 billion Chinese shale natural gas development deal gives members of the West Virginia Legislature plenty to consider.Also, longtime industry leaders said using Mountain State natural gas for electricity generation and ethane cracking will increase demand for the product, which will ultimately create more jobs and revenue . “Once you get those power plants going, and then even some manufacturing, that is going to drive demand. Drilling is sure to pick up.”“And this is so much bigger than anything we’ve ever seen.” Indeed, the $83.7 billion figure exceeds the total value of all goods and services produced within West Virginia during a typical year. The state’s annual gross domestic product is estimated at about $75 billion. While in the presence of President Donald Trump and China’s President Xi Jinping in Beijing, West Virginia Secretary of Commerce Woody Thrasher signed the MOU with China Energy, which calls for the company to invest $83.7 billion in West Virginia during a 20-year span. The investment could lead to ethane crackers, storage areas, pipelines, processing plants, electricity plants, and other such facilities. Thrasher later said some of the first projects that are part of the agreement are natural gas-fired power plants in Brooke and Harrison counties, the two of which should cost about $1.3 billion. According to its website, Brooke County Power would generate enough electricity for up to 700,000 homes.“I think this will be great for the mineral owners and the drillers because there will be a consistent market for the gas,” Greene said. “Because of the higher demand, you get higher prices — which means you get more drilling.” Weld said the key to the deal is that it involves “downstream” projects. In the oil and natural gas industry, this term refers to end-users, such as ethane crackers or power plants. “Upstream” is industry jargon for drilling and fracking, while “midstream” refers to pipelines, processing plants and compressor stations. “This gives us the opportunity to capitalize on our resources with downstream projects,” Weld said. “For years, we’ve mined coal here and exported it. Now, instead of just sending the raw material out of West Virginia, we can add value to it. This creates more jobs and revenue for our state.”
FERC quorum raises likelihood of pipeline approvals tied to LNG facilities - After waiting several months for the Federal Energy Regulatory Commission to gain a quorum, a handful of Louisiana pipeline projects, including three related to proposed natural gas export facilities, are expected to easily win approval. FERC regained enough members for a voting quorum in mid-August. But the commission has a backlog of hundreds of applications. The energy-related projects alone carry an estimated cost of $50 billion. David Dismukes, executive director of the LSU Center for Energy Studies, said the FERC quorum means the LNG pipelines will continue to move forward. "I think right now FERC has a slate of commissioners that have marching orders to move infrastructure development. That's where the bias is," Dismukes said. Dismukes doesn't see any problems with getting the pipelines permitted, adding that he doesn't know of many that FERC rejected. The only question is how hard the commissioners will push the staff to work through the backlog, he added. Colette Breshears, product manager, Infrastructure Intelligence for energy analyst Genscape, said not many Louisiana pipelines were affected by FERC's quorum issue. The majority of the planned pipes that still need FERC attention are slated for construction in late 2018 or early 2019, Breshears said. Those projects are just entering a period where they need their certificates authorized. The pipelines that lie further out, which include many of those intended to serve planned LNG facilities, were not affected by FERC's inability to act, Breshears said. Those pipelines hadn't reached the stage in permitting where the lack of a quorum stalled things.
New Study – “Natural Gas” Has No Climate Benefit, Will Make Things Worse - Gaius Publius - Your methane bridge to nowhere (source) - I’ve seen this report referenced several times, but none of those mentions is getting traction. So time to repeat. The idea that methane, so-called “clean natural gas” or “clean energy,” is a bridge fuel that can make our climate problem better — is a lie. Not only that, it’s an obvious lie. If you want to eliminate dust and grit, say, from blowing through an open window into your home, you don’t half-close the window that lets it in. You close it all the way. If you want to eliminate all carbon emissions from burning fossil fuel, you don’t start burning a different fossil fuel. You stop burning allfossil fuels, including methane. That’s just common sense. It makes even more sense when you consider that the Big Oil barons who own the oil companies also own many of the methane companies. Of the ten top drillers of fracked gasin the U.S., the largest by far is Exxon Mobil. With the purchase of XTO, Exxon produces nearly 50 percent more gas than its closest competitor. Earlier this year, Exxon began running ads touting natural gas as a safe, clean source of domestic energy. About two-thirds of the company’s domestic reserves are now in natural gas, with the rest in oil.Others on the top ten list include BP, ConocoPhillips and Chevron. So call the promotion of “clean natural gas” a profit protection plan for Big Oil as well. Do we want Big Oil companies to be profitable? Only if they abandon carbon fuel extraction and go into an entirely different, entirely anodyne business, as makers of party balloons perhaps. Otherwise, they need to die and disappear as companies, the sooner the better. (I suspect that most people don’t realize this — that if we don’t kill off the fossil fuel companies, they will kill us off. That’s literally true. Exxon and its like really do have to fail and disappear, or be taken down, before anything resembling our smart-phone civilization can survive.)
Women climb flag poles near Chase Midtown building to protest bank’s climate change ties - Two protesters climbed flag poles outside of a JP Morgan Chase building on Park Ave. Monday, protesting the bank's financial ties to climate change. The women got halfway up the poles at 277 Park Ave. holding a banner that read, "JP Morgan Chase — # 1 on Wall St — Tar sands, Pipelines, and Climate Change" before police took them into custody without incident. Charges were pending. The two climbers were arrested after they climbed down. "We want them to get out of the climate change business, stop trampling indigenous rights, and start to put their money into alternatives," Ruth Breech, 37, of the Rainforest Action Network, said. Tar sands — also known as oil sands — are a dirty and expensive source of oil that has more environmental impacts than liquid oil.
Michigan governor cites 'significant' concerns over pipeline (AP) — Michigan Gov. Rick Snyder says he has "significant" long-term concerns after the company that operates twin oil pipelines in a Great Lakes waterway told state officials it found additional gaps in pipeline coating. The Republican released a statement Monday after Enbridge Inc. issued an update on inspections and repairs along Line 5. The pipelines carry 23 million gallons (87 million liters) of oil and natural gas across northern Wisconsin and Michigan to refineries in Ontario each day. Snyder says the company's overview doesn't indicate imminent danger for the Straits of Mackinac, but says the update is "deeply concerning." He says he's no longer satisfied with Enbridge's operational and public information tactics. Environmentalists want the 64-year-old pipelines closed. They say gaps in coating bolster their contention that the pipes are unsafe.
Enbridge discloses 'dozens' more gaps on Straits of Mackinac pipeline's protective coating -- The revelations keep expanding about damaged protections on underwater oil pipelines in the Straits of Mackinac. And state officials' ire keeps growing. For the second time in two months, Gov. Rick Snyder called out Canadian oil transport giant Enbridge, this time after state agencies announced Monday that the company had revealed "dozens" of additional gaps in the protective outer coating that the state requires on Line 5 in the Straits of Mackinac. “I am no longer satisfied with the operational activities and public information tactics that have become status quo for Enbridge," Snyder said. "It is vitally important that Enbridge immediately become much more transparent about the condition of Line 5 and their activities to ensure protection of the Great Lakes.” Line 5 is an oil transmission line through the Upper Peninsula that splits into twin, underwater pipelines through the 4½-mile Straits of Mackinac before reconnecting into one line and continuing through the Lower Peninsula. The pipeline transports up to 23 million gallons of crude oil and natural gas liquids through the state to a hub in Sarnia, Ontario. In August, state officials requested Enbridge inspect the underwater pipelines at the site of all anchor supports securing the pipes on the lake bottom, after the company's inspections revealed damage to the outer protective coating on the pipe at one of the anchor support installation locations. Enbridge possessed information about the damage to at least one area of pipeline coating in 2014 and failed to disclose it to state agencies until this summer. Enbridge thus far has completed inspections at 48 of 128 anchor locations, and the majority of those areas have coating gaps, company officials told the state Monday. "A year ago, Enbridge said there were no coating gaps on the Straits pipeline. Now there are dozens," said Valerie Brader, executive director for the Michigan Agency for Energy and cochair of the state Pipeline Safety Advisory Board. "When will we know the full accounting of what Enbridge knows about Line 5?"
The link between fracking and health issues - The Environmental Protection Agency has allowed a series of chemicals with known health concerns to be used in oil and gas drilling known as fracking, according to documents obtained by Marketplace. While no medical diagnoses have been revealed to be caused directly by these oil and gas drilling chemicals, cause and effect can be difficult to prove. Chemical identities are largely unknown, and disease and causality can take years to show up in the data. Several studies do show a link between living by a well near a fracking site and high rates of cancer, asthma, high-risk pregnancies and heart defects. Here are a series of studies looking at the potential links that exist.
- 1) Air pollution caused by fracking may lead to health problems for those who live near natural gas drilling sites, due to the exposure of potentially toxic petroleum hydrocarbons, including benzene, ethylbenzene, toluene and xylene.
- 2) Another study out of Colorado looked at the connection between certain birth defects and the proximity of mothers to natural gas developments. The researchers found an association between those who lived within a 10-mile radius of these areas and congenital heart defects and possibly neural tube defects.
- 3) The Environmental Protection Agency conducted a five-year scientific study of fracking’s effect on U.S. drinking water. The report documented 457 spills related to fracking between 2006 and 2012, and in 324 of those cases, spills reached soil, surface water or groundwater.
- 4) A study of drinking-water wells near fracking sites in Pennsylvania found elevated levels of methane, ethane and propane gases. About 82 percent of drinking water samples contained methane, with concentrations six times higher for homes within 1 km of natural gas wells than homes farther away.
- 5) Researchers examined the data on more than 10,000 births in north and central Pennsylvania from 2009 to 2013. It found that mothers living in the most active fracking areas were 40 percent more likely to give birth prematurely, and 30 percent more likely to have their pregnancy labeled high-risk.
- 6) Another study on fracking for gas and oil in Pennsylvania found that those who live near such activity have a higher likelihood of being hospitalized for cardiac, neurological, urological, cancer-related and skin-related problems.
- 7) A group of mothers who lived closest to a high density of fracking wells in Pennsylvania were 34 percent more likely to give birth to infants who were small for their gestational age, according to researchers, even after accounting for factors like prenatal care, race, and the mother’s smoking habits.
- 8) Eight volatile chemicals were found near wells and fracking sites in Arkansas, Colorado, Ohio, Pennsylvania and Wyoming. Benzene, a carcinogen, and formaldehyde were among the most common.
- 9) A survey from the University of Washington and Yale found that Pennsylvania residents who lived near gas facilities were more likely to report skin issues, headaches and nosebleeds. Residents within a kilometer of a gas well had twice the number of health problems as those living at least 2 kilometers away.
- 10) Research published by the American Medical Association found a connection between worsening asthma symptoms and one’s proximity to natural gas fracking operations.
- 11) Sixteen cattle died after drinking a “mysterious fluid” adjacent to a natural gas drilling rig. Someone working nearby claimed it was used for fracking, although the company that owns the gas drilling rig, Chesapeake Energy, had not identified the exact chemicals in the fluid.
- 12) Fracking could be having a negative impact on the dairy industry. One study looked at dairy farms in various Pennsylvania counties, and compared those in areas with the most wells drilled and those with the least. Those in the most heavily drilled areas saw a 30 percent loss of milk cows.
- 13) Researchers have also looked at the potential influence of fracking chemicals on the reproductive health of men. Compared to a control group of male offspring not exposed to these chemicals, they ended up having “a lower sperm count, higher testosterone levels in the blood and larger testicles in adulthood."
African-Americans taking brunt of oil industry pollution: report (Reuters) - African-Americans face a disproportionate risk of health problems from pollution caused by the oil and gas industry, and the situation could worsen as President Donald Trump dismantles environmental regulations, according to a report issued on Tuesday by a pair of advocacy groups. The report, issued by the National Association for the Advancement of Colored People civil rights group and the Clean Air Task Force, said more than a million African-Americans live within half a mile (0.8 km) of an oil and gas operation, and more than 6.7 million live in a county that is home to a refinery. “African-Americans are exposed to 38 percent more polluted air than Caucasian Americans, and they are 75 percent more likely to live in fence-line communities than the average American,” the report said, referring to neighborhoods adjacent to industrial facilities. “In the current regulatory environment, the disproportionate burden of pollution will only increase for low-income communities and communities of color,” the report added. A White House official declined to comment on the NAACP-CATF report. But Trump has said his pro-energy industry policies are good for blacks and other minorities because they will create jobs.
'This Is an Emergency': 1 Million African Americans Live Near Oil, Gas Facilities - A new analysis concludes what many in African-American communities have long experienced: Low-income, black Americans are disproportionately exposed to toxic air pollution from the fossil fuel industry.More than 1 million African Americans live within a half-mile of oil and natural gas wells, processing, transmission and storage facilities (not including oil refineries), and 6.7 million live in counties with refineries, potentially exposing them to an elevated risk of cancer due to toxic air emissions, according to the study.In three states—Oklahoma, Ohio and West Virginia—it found that about one in five African-American residents lives within a half-mile of an oil and gas facility, while comprising just 4 to 14 percent of the total population in each state."We have a real problem with air," said Doris Browne, president of the National Medical Association, a national organization of black physicians and sponsor of the study. "We think it's just a little smog and fog, but we need to worry about the pollutants in the air we're breathing."The study, Fumes Across the Fence-Line: The Health Impacts of Air Pollution from Oil and Gas Facilities on African American Communities, was published Tuesday by the Clean Air Task Force and the National Association for the Advancement of Colored People. Its findings are based on data from the U.S. EPA's National Emissions Inventory and the National Air Toxics Assessment, which look at emissions and health risks on a county-by-county level. The authors applied additional analysis to focus solely on emissions and health impacts attributable to pollution from oil and gas facilities, and then used demographic data to estimate health impacts on African-American communities.
"The public has a right to know": Fracking companies don't have to disclose chemicals linked to health concerns - With drilling and fracking, the ingredients that make up the chemicals used to obtain oil and gas are legally allowed to be kept confidential. According to newly released documents from the Environmental Protection Agency, that secrecy starts as soon as chemical manufacturers apply for government approval of their products.Hundreds of agency papers were released under the Freedom of Information Act to the environment group Partnership for Policy Integrity. They show that from 2003 to 2014 chemical makers routinely withheld all kinds of information in their applications, including the molecular structure of chemicals, product names, commercial uses of chemicals, even the manufacturers' names.EPA scientists are privy to this chemical information, but cannot make it public, said Dusty Horwitt, an attorney with the Partnership for Policy Integrity.The new documents show that the EPA listed varying health risks about most of the chemicals it approved, including the risk of poisoning to the brain, lungs and liver.“If EPA's own regulators are finding that there are health concerns about these chemicals, and then they allow them to be used in oil and gas drilling, the public has a right to know,” Horwitt said.He and more than 100 toxicologists and advocates are sending a letter to the EPA, asking it to release the details on more than 40 drilling and fracking chemicals — ones the agency described as risky to human health. The EPA did not respond to a request for comment. Click on the dots in the map below to see information about individual wells that used chemicals that the EPA knew posed potential health risks.
Second Virginia county bans hydraulic fracturing | The Herald: A second Virginia county has banned hydraulic fracturing, the process of injecting water and chemicals deep into the ground to loosen trapped gas and oil. The Free Lance-Star reports the Richmond County Board of Supervisors voted unanimously last Thursday to not allow any type of oil and gas drilling. The board's chairman, F. Lee Sanders, said the county's water supply was the primary impetus for the ban. The county is bordered by the Rappahannock River, which advocacy group American Rivers ranked as the fifth-most endangered American river, citing fracking's threat to clean drinking water. A small portion of Richmond County is in the Taylorsville basin, where more than 84,000 acres (34,000 hectares) have been leased for possible drilling. Augusta County became the first Virginia locality to ban fracking, in February.
Where Did Our Distillate Go? Stocks Low As Heating Oil Season Arrives --U.S. inventories of distillate — especially ultra-low-sulfur diesel (ULSD) and heating oil — are at their lowest pre-winter level in three years after falling during the summer months for the first time since inventory records started being measured in 1982. Rising diesel exports are one culprit; another is the shutdown of a number of Gulf Coast refineries during and immediately after Hurricane Harvey. The good news is that distillate prices have been increasing, as have the margins for refining crude oil into distillate — both encouraging refineries to ramp up their diesel/heating oil production. Today, we look at recent developments in the distillate market and what they may mean for diesel and heating oil prices this winter. For most of 2017 — with the month after Hurricane Harvey hit the western Gulf Coast being a notable exception — U.S. distillate production has been at or near record levels; according to the Energy Information Administration (EIA), through the last week of October, production of ULSD and other distillate has averaged 4.94 million barrels/day (MMb/d) this year, up 3.6% from the same 10-month period last year. But despite the fact that U.S. distillate production is up — and finally back to pre-Harvey levels of more than 5 MMb/d as of the week ending October 27 — distillate inventories, which had been riding high through 2016, have been tumbling for several months in 2017 (yellow line in Figure 1), and are nearing their lowest levels of the past five years. (The gray-shaded area in Figure 1 represents the range of distillate stocks in 2012-16.) Most startling of all is that in 2017 distillate stocks fell during the summer months for the first time since EIA started tracking distillate inventories in 1982. Normally, summer is the time to be building distillate inventories in anticipation of the coming winter heating season, not whittling them down. During the summer of 2016, distillate stocks increased by more than 8%, from just under 151 MMbbl to just over 163 MMbbl, and the summer before that (2015), they were up almost 12%. But in the summer of 2017, distillate stockpiles fell by more than 9%, from 152 MMbbl to 138 MMbbl, and by the last week of October they were down another 9 MMbbl to only 129 MMbbl — their lowest pre-winter level in three years.
Distillate fuel oil market set to tighten in 2018: Kemp - (Reuters) - U.S. refineries are struggling to meet booming demand for distillate fuel oil at home and in export markets which will leave the distillate market very tight in 2018.Even if the northern hemisphere winter is only averagely cold, the distillate market looks set to enter 2018 with lower than average stocks and fast-growing demand, which should keep prices and refining margins firm.The gross refining margin for turning Brent into U.S. heating oil has climbed to almost $19 per barrel from a recent low of less than $11 in May, despite record U.S. refinery production of distillate.Refiners therefore have a strong commercial incentive to maximise distillate output, which should ensure crude intake remains high, and spread tightness into the crude market (http://tmsnrt.rs/2zJ8KEC).U.S. refiners processed a seasonal record 16.6 million barrels per day (bpd) of crude last week, which was 600,000 bpd higher than at the same point in 2016 and 1.8 million bpd above the 10-year average.And they produced a seasonal record 5.2 million bpd of distillate fuel oil, which was 300,000 bpd above 2016 and 600,000 bpd above the decade average.But it was not enough to prevent distillate stocks falling by another 800,000 barrels to less than 125 million barrels, according to the U.S. Energy Information Administration.Distillate stocks have shrunk by 38 million barrels since the start of the year compared with a seasonal decline of less than 10 million in 2016 and a ten-year average of just 5 million.Stocks are now 24 million barrels below the prior-year level, and 9 million barrels below the decade average, at levels that have not been seen since 2012-2014. The distillate market was heavily oversupplied at the start of 2017 but has become progressively undersupplied in the course of the year.Domestic consumption has been running well above prior-year levels and the long-term average in most weeks since March.But it is the phenomenal strength of exports that is causing stocks to continue drawing down even as refineries maximise output.Exports over the last four weeks were running at a record 1.5 million bpd, an increase of more than 400,000 bpd or almost 40 percent compared with the same period in 2016.Distillate stocks look severely depleted even before the main winter heating season begins in North America and Western Europe. The last two winters have been relatively mild in the United States but if this one reverts to the mean stocks could start to feel tight.
US Gulf Coast distillates flows to Europe around 1.2 million mt for November - Distillates flows to Northwest Europe and the Mediterranean from the US Gulf Coast for November arrival total around 1.2 million mt, according to data Monday from cFlow, S&P Global Platts trade flow software. It was the first time the flow has exceeded 1 million mt since the advent of Hurricane Harvey in late August. Sources had been expecting the US to ramp up and return to full production, putting a bit of pressure on European prices. While the arbitrage has seen sporadic moments of workability, the flow coming over was heard to be mostly system barrels, or volume that was pretty much committed. Nevertheless, the headline figure has been dented by some volume diverting to Latin America. Five vessels carrying distillates left over the past seven days to head to Europe, four Medium Range tankers carrying roughly 40,000 mt each and one Long Range 1 tanker carrying in the region of 60,000 mt. Of the cargoes on water, the STI Fontvieille diverted from Lavera, France, to Contantza, Romania, in what was a relatively unusual move given the Black Sea is a regular exporter of ultra low sulfur diesel, the main product exported from the US Gulf Coast. However, there has been a degree of tightness in the East Mediterranean, where Turkey has been tendering to buy on a regular basis, which has mopped up any excess barrels leading to nothing being currently offered on the spot market, according to one source. Generally, freight costs mean US vessels rarely venture past the Adriatic Sea.
Exportin' From The Free World - Crude Export Growth And Gulf Coast Infrastructure Needs - Since the ban on exports of U.S. crude oil was lifted in December 2015, export volumes have soared, and for the week ending October 27, 2017, they surpassed 2 million barrels/day (MMb/d) for the first time ever, according to Energy Information Administration (EIA) statistics. And while exports slowed last week, it is clear that there’s more to come. But the pace of export growth depends on many things, including the ability of Gulf Coast infrastructure to receive and store increasing volumes of West Texas Intermediate (WTI), SCOOP/STACK, Bakken and other crudes and load it onto ships — the bigger the ship the better. Fortunately, coastal Texas and Louisiana already had extensive crude-related infrastructure in place when the export ban ended just under two years ago, and elements of that have been repurposed to handle exports. Will it be enough? Today, we begin a new blog series on existing and planned storage facilities and marine terminals targeted to support rising U.S. crude oil exports. Crude exports already had been minimal (only a few thousand barrels/day, on average) when the ban was put in place — in fact, exports actually rose in the late 1970s as Alaska North Slope (ANS) production kicked in (exports peaked, for the time, at 287 Mb/d in 1980). By the early 2000s, though, ANS was on the decline and crude exports amounted to a drop in the bucket, averaging less than 30 Mb/d. With the Shale Revolution, U.S. production of crude oil (including condensate — the ultra-light crude produced in a number of tight-oil plays) started rising, and by 2014, U.S. producers provided most of U.S. refiners’ need for lighter grades of oil, reducing the need for imported light crude in the process. As U.S. production continued to rise, stockpiles of lighter crudes built up and the spread between West Texas Intermediate (WTI; the key benchmark for U.S. light crudes) and international benchmark Brent widened. Some relief for U.S. producers came in June 2014, when the U.S. Commerce Department broadened its definition of refined products (whose export was never banned) to include condensate that was minimally processed (run through a stabilizer or other unit so it could be called “processed condensate”). Exports of processed condensate took off, peaking in December 2015 (the month the crude export ban was lifted) at more than 150 Mb/d. But processed condensate couldn’t be counted as crude exports — after all, it was processed.
Cheniere eyes sanctioning new Texas LNG train next year: (Argus) — Cheniere Energy said it plans to make a positive investment decision next year on a planned third liquefaction train at the Corpus Christi LNG export terminal in Texas. "I have a whiteboard in my office with a to-do list on it, and the only thing on that to-do list is to FID Corpus Christi train 3," Cheniere chief executive Jack Fusco said today on an earnings call. An FID refers to a final investment decision. Cheniere is building two trains and associated facilities at Corpus Christi for $11bn. Each unit would have peak capacity of 5mn t/yr, equivalent to 694mn cf/d of gas, and baseload capacity of 4.5mn t/yr. The two-train project is 72pc complete and scheduled to start operating in 2019. The Houston-based company has said it can build a similar-sized third train at a unit cost of $500-$600 per tonne of annual production, or about $2.25bn-$2.7bn for the baseload output. The third train would be cheaper by using existing infrastructure. Cheniere signed some 20-year offtake deals for train 3 before oil prices dropped in mid-2014, but not enough to finance the unit. The company is negotiating with some large Asian utilities to sell more output from train 3, including potentially finalizing a preliminary agreement reached last week with China's state-owned CNPC. Fusco said he is "guardedly optimistic" the CNPC agreement can be finalized early next year, but that deal is not necessary for Corpus Christi train 3 to move forward. Cheniere will soon ask the US Federal Energy Regulatory Commission for authorization to do some preliminary work for train 3 in anticipation of the investment decision, he added. Six LNG export terminals are being built in the US that would have combined peak capacity of 73.5mn t/yr, including Cheniere's 25mn t/yr Sabine Pass LNG terminal in Louisiana. But it has been difficult for new US projects to sign customers since oil prices plummeted in mid-2014. The economics of US LNG exports are based on a wide differential between domestic gas prices and global oil prices, as most long-term Asian LNG contracts are linked to oil prices. Cheniere is confident that it can secure more customers for Corpus Christi train 3 primarily because oil prices have started to climb, recently reaching the mid-$50s/barrel. Spot LNG prices and Asian demand have been higher than most analysts expected, but the spot market is not liquid enough to finance long-term deals, Fusco said.
US Gulf Coast seen as natural gas export hub for years to come - The US Gulf Coast is expected to be a crude oil, natural gas and LNG export hub for years to come even as supply, demand and geopolitical swings shift market dynamics, industry consultants said Monday. At the heart of the forecast is the fact that US supplies are abundant and cheap, and billions of dollars of new infrastructure is being added to link those resources to overseas destinations, particularly in Asia, Europe, the Middle East and South America. Mexico, too, has been heavily reliant on US LNG and pipeline gas from the Gulf Coast. During the USAEE/IAEE North American Ride the Energy Cycles Conference, government officials, analysts and investment bankers joined industry consultants to explore how shale technology is boosting the US role in global energy markets, and how the Gulf is a key focal point for those efforts. While Saudi Arabia, Russia, Qatar and China are vying for market position, none looks likely to have the same market clout in terms of excess supply, the experts said.
New US gas pipelines fall short of 'last mile' to LNG demand – podcast - A slew of LNG export projects, largely in Texas and Louisiana, are under construction or in the planning phase but new Northeast pipeline capacity appears to fall short of supplying the demand centers. Luke Jackson looks at how the 'last mile' problem takes Northeast gas to the Midwest and other areas and paints a bullish story for Henry Hub prices.
Regulatory hurdles hamper US natural gas exports - Reaching consensus about energy policy is rare in Washington these days. But one extremely important issue on the table should be a no-brainer even for the anti-free-trade Trump administration: given China’s growing interest in switching from coal to cleaner natural gas for its domestic energy needs, a golden opportunity exists to take advantage of America’s huge shale-gas supply. China’s demand for natural gas is expected to reach 330 billion cubic meters in 2020, up from 206 billion last year, and the United States is well-positioned to capture a significant share of that rising demand. With little fanfare, U.S. shale-gas production has been booming. It recently rose 12 percent in one month alone, from 53 billion cubic feet in August to 59.4 billion cubic feet in September. Thanks to the shale revolution, the United States is now the world’s top producer of natural gas. U.S. capacity for processing liquefied natural gas (LNG), or natural gas cooled to liquid form, also is expanding: it is set to grow nearly seven-fold by 2019, but that is not fast enough. Domestic gas production is outpacing domestic demand, producing a glut of unsold gas in storage, but only one U.S. LNG export facility is now operating — Cheniere Energy’s Sabine Pass terminal in Louisiana. Another terminal is scheduled to open soon on Maryland’s Chesapeake Bay, and at least three other terminals are expected to be online by 2019. Despite this rapid capacity expansion, regulatory roadblocks are hampering the construction of even more terminals. The permit process for LNG facilities is outdated. Getting a permit takes several years and requires approvals from multiple federal and state agencies. Unless and until Congress passes legislation to expedite the process, the United States will find itself at a competitive disadvantage with other LNG exporters, such as Australia, Malaysia, Qatar, and Russia.
Atlantic LNG's production, plant reliability impacted by gas shortages - Trinidad-based gas liquefaction complex Atlantic LNG continues to struggle with massive gas shortages that are negatively impacting production and plant reliability, Atlantic CEO Nigel Darlow said said in an address to an AMCHAM T&T conference this week in Port of Spain. The company provided a copy of the address on Wednesday. Gas shortages have brought the facility's utilization rates down to 70%, he said."This has had a significant impact on the business--not only the considerable lost revenue opportunity, but the operational challenges of having to continually adjust to gas supply fluctuations," Darlow said.The plant is not on steady operation, making things more complicated and putting additional strain on the plant and equipment and the people operating and maintaining it. Consequently, this has had an adverse impact on our plant reliability, which is lower than normal." Darlow expected the gas supply picture to improve "in the short to medium term, when supply from Juniper (gas development) increases its flows into the system and other sources come online," he said.In August, BPTT announced first gas at Juniper and said the $2 billion offshore project will eventually boost BPTT's gas production capacity by an estimated 590,000 Mcf/d. Darlow said Atlantic has also seen a drop in its safety performance. Since August, the company has experienced two incidents, including a gas release that shut Train 3 for 11 days and a fire that damaged one of its power generation units.The incidents shook the company, he said, adding they were "quite difficult for us to come to terms with." Atlantic has been reviewing how it operates and maintains the plant and whether it needs to make any changes, he said.
IEA Sees U.S. Shale Surge as Biggest Oil and Gas Boom in History -- The U.S. will be a dominant force in global oil and gas markets for many years to come as the shale boom becomes the biggest supply surge in history, the International Energy Agency predicted. By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook. The boom will turn the U.S., still among the biggest oil importers, into a net exporter of fossil fuels. “The United States will be the undisputed leader of global oil and gas markets for decades to come,” IEA Executive Director Fatih Birol said Tuesday in an interview with Bloomberg television. “There’s big growth coming from shale oil, and as such there’ll be a big difference between the U.S. and other producers.” The agency raised estimates for the amount of shale oil that can be technically recovered by about 30 percent to 105 billion barrels. Forecasts for shale-oil output in 2025 were bolstered by 34 percent to 9 million barrels a day. The U.S. industry “has emerged from its trial-by-fire as a leaner and hungrier version of its former self, remarkably resilient and reacting to any sign of higher prices caused by OPEC’s return to active market management,” the IEA said. While oil prices have recovered to a two-year high above $60 a barrel, they’re still about half the level traded earlier this decade, as the global market struggles to absorb the scale of the U.S. bonanza. It’s taken the Organization of Petroleum Exporting Countries and Russia almost 11 months of production cuts to clear up some of the oversupply.
US shale drillers are reacting faster and faster to rising oil prices – Platts Capitol Crude podcast - We know US oil drillers can react quicker these days to rising prices and put new production online. But for the first time, a study has quantified US shale drillers' price responsiveness. Richard Newell, the study's lead author and former chief of the Energy Information Administration, spoke with us about what this new speed means for price volatility, if it sets up the US to become a swing producer someday and whether we still need strategic oil reserves. Newell is president of Resources for the Future. We also spoke with Lynn Helms, North Dakota's top oil regulator, about how drillers are accelerating projects in the Bakken.
U.S. SHALE OIL PRODUCTION UPDATE: Financial Carnage Continues To Gut Industry -- As the Mainstream media reports about the next phase of the glorious U.S. Shale Oil Revolution, the financial carnage continues to gut the industry deep down inside the entrails of its horizontal laterals. The stench of fracking fluid must be driving shale oil advocates utterly insane as they are no longer able to see the financial wreckage taking place in these companies quarterly reports. This weekend, one of my readers sent me the following Bloomberg 45 minute TV special titled, The Next Shale Revolution. If you are in need of a good laugh, I highly recommend watching part of the video. At the beginning of the video, it starts off with President Trump stating that the U.S. has become an energy exporter for the first time ever. Trump goes on to say, "that powered by new innovation and technology, we are now on the cusp of a new energy revolution." While I have to applaud Trump's efforts for putting out some positive and reassuring news, I wonder who is providing him with terribly inaccurate energy information. I would kindly like to remind the reader; the United States is still a NET IMPORTER of oil. We still import nearly six million barrels of oil per day, but we export some finished products and a percentage of our shale oil production. Thus, we still import a net of approximately three million barrels per day of oil.A few minutes into the Bloomberg video, both Pioneer Resources Chairman, Scott Sheffield, and Continental Resources CEO, Harold Hamm, explain how advanced technology will revolutionize the shale oil industry and bring down costs. I find that statement quite hilarious as Continental Resources and Pioneer continue to spend more money drilling for oil and gas then they make from their operations. As I stated in a previous article, Continental Resources long-term debt ballooned from $165 million in 2007 to $6.5 billion currently. So, how did advanced technology lower costs when Continental now has accumulated debt up to its eyeballs? Of course... it didn't. Debt increased on Continental Resources balance sheet because shale oil production wasn't profitable... even at $100 a barrel. So, now the investor who purchased Continental bonds and debt are the Bag Holders.
Is Peak Permian Only 3 Years Away? -- The world’s hottest shale basin, the Permian, is leading the second U.S. wave of tight oil production growth and will continue to do so for years to come, all analysts say. However, signs have started to emerge that the relentless intensification of drilling leads to diminishing returns, Simon Flowers, Chairman and Chief Analyst at Wood Mackenzie, said in an article this week. Pumping twice as much sand as usual into Permian wells and drilling longer laterals doesn’t deliver commensurate volumes of oil, Flowers notes.“Drilling costs rise exponentially with depth, and there’s a suspicion that longer wells are hitting a cost efficiency ceiling,” WoodMac’s chief analyst writes.Moreover, after the early production-exuberance stage, drillers are now much more focused on delivering profits and higher profit margins. They now favor quality over quantity, and value over volumes. “Might the Permian be reaching the limits of well size and design? Maybe - as Star Trek’s Scotty might observe of an underwhelming high intensity completion ‘you cannae change the laws of physics, Jim’,” Flowers says. But WoodMac suggests that drillers could ‘change the laws of physics’ and that these signs of setbacks may actually be growing pains. The energy consultancy’s Director of L48 Research, Rob Clarke, argues that there are two basic and very sound reasons that the fading lateral drilling and proppant metrics might be just growing pains. One is much more advanced proppant placement, and the other is the oil majors’ move into the Permian, set to change things. “Now, pinpoint frac technology can place the proppant exactly where it’s wanted. Science is also being applied to identify the most effective proppant grain size and shape as well as drill bit design and fluid chemistry, all with the aim of boosting EUR,” according to WoodMac. In addition, ExxonMobil significantly boosted its Permian position earlier this year, and Exxon has “global expertise in extra-long laterals—including a 39,000 footer in Russia,” WoodMac says.ExxonMobil has already drilled a 12,500-foot well in the Permian and “will no doubt ramp up longer still to test the diminishing returns theory,” Clarke noted. Now the next challenge will be to deliver an effective completion of such a long well.
Buying Texas Oil at New Mexico Prices: Majors Go West for Shale | Rigzone: Oil producers discouraged by the rising cost of accessing the vast deposits of the Permian Basin in Texas are sneaking into a geological back door, through neighboring New Mexico.The state, which covers a smaller part of the oil-soaked shale formation, is the fourth-largest U.S. producer and luring industry giants including Exxon Mobil Corp., Chevron Corp., EOG Resources Inc. and Occidental Petroleum Corp. Their investments -- while small compared with Texas -- are increasing as activity in the rest of the Permian starts to slow down.In just the past five months, drilling on the New Mexico side of the Permian expanded 25 percent to 75 rigs, while Texas contracted by 2 percent to 490, according to data compiled by Drilling Info Inc., an Austin-Texas based industry consultant. At the same time, the pipeline network is being expanded, which could mean more sustained growth in development and production.New Mexico “may well be the next wave,” “If Exxon’s looking at it, that’s probably a good sign.” Earlier this year, Irving, Texas-based Exxon, the world’s largest energy company by market value, jumped into New Mexico with a $5.6 billion acquisition of assets from the Bass family. Exxon said the quarter-million acres it bought will provide 20 years of drilling prospects. Oil and gas companies have invested about $13 billion in New Mexico over the past couple of years through mergers and acquisitions, according to Steve Vierck, who runs economic development efforts in Lea County, one of the places seeing the biggest increase in drilling activity. The state produced a near-record 462,000 barrels a day in August, twice what it was pumping six years earlier, Energy Information Administration data show.
Four Trends to Watch in Artificial Lift - Rigzone: Unconventional oil and gas producers are gaining a variety of new artificial lift technologies to deploy at their onshore well sites, according to a Houston-based artificial lift specialist. “Artificial lift is a range of production engineering methods used to lift hydrocarbons and water from a producing reservoir,” explained Stuart Scott, director of technology with Petroleum(etc) and a Fellow of the American Society of Mechanical Engineers (ASME). “Most often, lifting liquids from the well allows the gas to flow using its own energy, but today some methods can also aid in lifting the gas.”Scott noted that artificial lift approaches fall into two broad categories: energy-added methods and reservoir energy methods. Examples of energy-added methods, which “use external energy to lift fluids to the surface,” include electrical submersible pumps (ESPs), gas-lift, jet-pumps and rod/beam-pumps, said Scott. Relying “on the pressure in the reservoir to lift fluids to the surface,” reservoir energy methods include intermitters, plunger-lift, foam-lift and velocity strings, he added. “Energy-added methods are more expensive in terms of capital and operating expenditures but have a dramatic impact on both ultimate recovery and flow rate,” pointed out Scott. He added that selecting the right artificial lift method helps a producer achieve desired goals in areas such as lease operating expense (LOE), recovery factor and return on investment. “Often 50 percent of the resource is left to be extracted after the high-rate initial flow period,” Scott said. “Companies that win in unconventionals are the companies that get artificial lift right. I like to use the term ‘artificial lift first.’ This goes to the idea that artificial lift needs to be considered upfront for any development and not as an after-thought.” What follows is a breakdown of four specific areas of artificial lift innovation to watch.
Former OU researcher, state seismologist felt pressured to suppress fracking research - A former OU researcher and state seismologist testified under oath he was pressured by members of the OU administration to suppress research on the connection between wastewater injection and recent earthquakes in Oklahoma. Austin Holland, who published research implicating wastewater injection wells in recent earthquakes throughout the state of Oklahoma, testified under oath during an Oct. 11 deposition that OU President David Boren and Larry Grillot, former dean of Mewbourne College of Earth and Energy, among others, pressured him to suppress scientific research. Holland, who left the Oklahoma Geographical Survey in 2015, testified that he was called into a meeting with Boren and Harold Hamm, chairman and CEO of Continental Resources, a top oil-producing company, in which both advised him to be aware of the needs of the oil and gas industry. While Boren previously sat on the board of Continental Resources, OU Press Secretary Matt Epting said Boren left that position "earlier this year." A report from Bloomberg Business news revealed Hamm emailed Grillot telling him he wanted faculty researching the connection between wastewater and earthquakes "dismissed from the university." “The president of the university expressed to me that it had complete academic freedom, but that as part of being an employee of the state survey, I also have a need to listen to, you know, the people within the oil and gas industry,” Holland said during the deposition. “Harold Hamm expressed to me that I had to be careful of the way in which I say things, that hydraulic fracturing is critical to the state's economy in Oklahoma, and that me publicly stating that earthquakes can be caused by hydraulic fracturing was, you know, could be misleading.”
Nebraska Regulators Prepare A Verdict On Keystone’s Fate -- Energy infrastructure regulators in Nebraska could decide the future of the Keystone XL Pipeline as activists continue opposing the multi-billion dollar oil project. The Nebraska Public Service Commission will vote Nov. 20 on the project, the agency announced Monday, without tipping its hand on which direction it might take.President Donald Trump approved the pipeline earlier this year, but state regulators must approve the deal as environmentalists continue lodging lawsuits against Keystone. TransCanada, the project’s developer, also has yet to determine the long-term economic success of building a pipeline during an oil glut.Oil prices are lower today than they were a decade ago when the pipeline was first proposed. Prices hovered around $130 per barrel during the mid-2000s, which meant that demand from oil producers and refineries was high.A barrel of oil today sells for about $56, largely due to the emergence of hydraulic fracturing, or fracking. The natural gas boom took the steam out of traditional crude oil.TransCanada initially applied for a permit in 2008 and the State Department determined that the project would have no significant impact on the environment. But former President Barack Obama eventually rejected it on the grounds it would diminish the U.S.’s credibility in the fight against global warming. Benzene byproducts found in pregnant women near fracking sites
Nebraska to decide on Keystone XL pipeline next week | TheHill: Regulators in Nebraska will announce their decision on the Keystone XL pipeline project next week. The five members of the Nebraska Public Service Commission will vote on a proposed order for the Keystone XL pipeline on Nov. 20, the agency announced on Monday, though it didn’t detail what that decision might be. Approval from the Nebraska commission is one of several tasks facing Keystone XL developer TransCanada, which hopes to build the pipeline and deliver oil from Alberta, Canada, to the Gulf of Mexico.President Trump granted a presidential permit for the controversial $8 billion pipeline in March. But state regulators still need to approve it, and green groups have sued over Trump’s decision, raising a legal barrier against the pipeline as well.Keystone’s developers also have to decide if the pipeline is economically viable: TransCanada officials told investors this summer that it might not build the project, though the company said earlier this month that it likely has enough demand from potential customers to make the project worthwhile.TransCanada reapplied for its Nebraska permit in February, putting the decision in the hands of the Public Service Commission. It applied to follow the same route bisecting Nebraska that the state’s governor approved in 2013, before President Obama rejected federal permits for the pipeline. President Trump routinely cites his approval of Keystone XL — and the Dakota Access pipeline — as one of the biggest accomplishments of his first year in office.
An estimated 210,000 gallons of oil spilled from the Keystone pipeline in South Dakota -- Clean-up crews are busy in South Dakota today, cleaning up a large oil leak in the Keystone Pipeline. A Native American protester pauses over the land where the Keystone Pipeline is being built From KSFY:Crews are working to clean up a pipeline leak that has spilled at least 210,000 gallons of oil in South Dakota.Brian Walsh with the Department of Environment and Natural Resources tells KSFY News they were alerted to the leak at 10:30 a.m. Thursday morning by TransCanada.The leak was in the Keystone Pipeline located in an agricultural area in Marshall County. There have been no reports of the oil entering any waterways or water systems at this time.Walsh said 5,000 barrels of oil have leaked, and at 42 gallons a barrel, that totals 210,000 gallons of oil.The pipeline has been shut off and the leak has been covered. An emergency response plan has been activated to get more staff and contractors to the site for clean up. The pipeline is temporarily shut down.
Keystone pipeline spills 210,000 gallons of oil on eve of permitting decision for TransCanada - The Keystone pipeline running from Canada across the Great Plains leaked Thursday morning, spilling about 5,000 barrels of oil — or 210,000 gallons — southeast of the small town of Amherst in northeast South Dakota.The spill comes just days before a crucial decision next Monday by the Public Service Commission in Nebraska over whether to grant a permit for a new, long-delayed sister pipeline called Keystone XL, which has been mired in controversy for several years. Both are owned by Calgary-based TransCanada. The spill on the first Keystone pipeline is the latest in a series of leaks that critics of the new pipeline say shows that TransCanada should not receive another permit.“TransCanada cannot be trusted,” said Jane Kleeb, head of the Nebraska Democratic Party and a longtime activist opposed to Keystone XL. “I have full confidence that the Nebraska Public Service Commission is going to side with Nebraskans, not a foreign oil company.”TransCanada, which has a vast network of oil and natural gas pipelines, said that the latest leak occurred about 35 miles south of the Ludden pump station, which is in southeast North Dakota, and that it was “completely isolated” within 15 minutes. The company said it obtained permission from the landowner to assess the spill and plan cleanup.Brian Walsh, an environmental scientist manager at the South Dakota Department of Environment and Natural Resources, said that the leaking pipe was in “either a grass or an agricultural field” and that TransCanada had people at the site. Walsh said the leak was detected about 5:30 a.m.“Based on what we know now, the spill has not impacted a surface water body,” Walsh said. “It has not done that. So that’s good news.”The first Keystone pipeline, which runs 1,136 miles from Hardisty in Alberta, carries about 500,000 barrels a day of thick bitumen from the oil sands area to pipeline, refining and storage networks in Steele City, Neb., and Patoka, Ill. The pipeline has had smaller spills — 400 barrels each — in the same region in 2011 and 2016
Massive Pipeline Leak Shows Why Nebraska Should Reject Keystone XL - About 210,000 gallons (5,000 barrels) of oil leaked Thursday from TransCanada's Keystone oil pipeline near Amherst, South Dakota, drawing fierce outcry from pipeline opponents. The leak, the largest spill to date in South Dakota, comes just days before Nebraska regulators decide on whether its controversial sister project—the Keystone XL (KXL) Pipeline—will go forward. "Enough is enough. Pipelines leak—it's not a question of 'if', but 'when.' The pending permit for TransCanada's Keystone XL pipeline should be flatly rejected by Nebraska's Public Service Commission (PSC), but know that no matter what the outcome, the fight's not over yet," said Scott Parkin, Rainforest Action Netrwork 's Organizing Director. "We need to stop all expansion of extreme fossil fuels such as tar sands oil—and we need the finance community to stop funding these preventable climate disasters—disasters for the climate, the environment and Indigenous rights." CNN reported that the spill occurred in the same county as part of the Lake Traverse Reservation. "We are concerned that the oil spill is close to our treaty land, but we are trying to stay positive that they are getting the spill contained and that they will share any environmental assessments with the tribal agency," said Dave Flute, tribal chairman of the Sisseton Wahpeton Oyate.
Tribes across the Midwest are gearing up for a big new pipeline battle - The sun was still hiding Wednesday morning, November 8, when about 15 individuals woke up to leave Camp Makwa on the Fond du Lac Indian Reservation in northern Minnesota. The time was 3 a.m., and this time of year, temperatures can drop real low, like 20 degrees Fahrenheit. That didn’t stop this group, though. They were on a mission to temporarily halt construction on the Enbridge Line 3 Pipeline Replacement Program, a new effort to boost the capacity of a pipeline carrying oil over a thousand miles from Alberta to Wisconsin. And, well, they succeeded, even if construction was just halted momentarily. Line 3 is supposed to replace an older pipeline of the same name, and to almost double the amount of crude oil it carries, from 390,000 barrels a day to 760,000. Pipeline developer Enbridge plans to leave the old pipe abandoned in the ground to avoid any environmental risks that might result from disturbing other nearby active pipelines. Enbridge also wants to alter the new Line 3 route. “At this point, it really does boil down to civil disobedience.” Environmentalists and indigenous activists are worried about what will result from both abandoning the old Line 3 and from shipping oil through the new Line 3. Leaving the pipe in the ground—even if it’s properly cleaned and follows all regulations in place to avoid environmental risk—can lead to soil and water contamination as it ages and leaks any residual oil. That’s one of Minnesota’s concerns about this plan, laid out in its Environmental Impact Statement, even if these impacts are expected to be “minimal.” Activists are also worried about wild rice, which grows better in Minnesota than in any other state. It’s a traditional food for the Anishinaabeg people, the collective name for the group of related U.S. and Canadian tribes in the Great Lakes region. They consider it sacred.
Massive Fracking on Nevada Public Lands Sought by Trump Administration, Conservation Groups Launch Legal Protest - Three conservation groups filed an administrative protest Monday against an enormous Bureau of Land Management oil and gas lease auction, scheduled for Dec. 12, that would allow fracking on more than 600 square miles of Nevada public lands . The 388,000 acres in eastern Nevada includes important regional springs and groundwater and critical habitat for imperiled species. The protest—filed by the Center for Biological Diversity , WildLands Defense and Basin and Range Watch —says the BLM has violated the National Environmental Policy Act and the Endangered Species Act by failing to analyze the risks of drilling for oil and fracking with dangerous chemicals on such a massive scale. Development of these parcels, one of the largest fracking plans in the country, could contaminate ground and surface water, threaten endangered species and cause irreparable harm to the global climate. "The Trump administration is putting some of Nevada's most critical water supplies at risk of fracking pollution by auctioning off this public land to oil companies," said Patrick Donnelly, the Center for Biological Diversity's Nevada state director. "This plan reeks of callous disregard for our state's water and wildlife . Trump's BLM is flagrantly violating our nation's environmental laws to line the pockets of the fossil-fuel industry. "
U.S. Justice pledges to prosecute activists who damage pipelines (Reuters) - The U.S. Department of Justice on Friday pledged to prosecute protesters who damage oil pipelines and other energy infrastructure, a move that could escalate tensions between climate activists and the administration of President Donald Trump. The DOJ said it was committed to vigorously prosecuting those who damage “critical energy infrastructure in violation of federal law.” Attempts to “damage or shut down” pipelines deprive communities of services and can put lives at risk, cost taxpayers millions of dollars, and threaten the environment, a department official said in a statement sent to Reuters. The statement was in response to a letter sent last month to Attorney General Jeff Sessions by 84 U.S. representatives asking whether domestic terrorism law covers activists who shut oil pipelines in October 2016. The DOJ said it was reviewing the letter. The DOJ did not say whether it would investigate or prosecute the protesters who broke fences in four states last year and twisted shut valves on several pipelines importing crude oil from Canada that carry the equivalent of as much as 15 percent of U.S. daily oil consumption. The group Climate Direct Action said at the time the action was in support of the Standing Rock Sioux Tribe, which has protested Energy Transfer Partners LP’s Dakota Access Pipeline.
Dakota Access Pipeline Company Paid Mercenaries to Build Conspiracy Lawsuit Against Environmentalists - The private security firm TigerSwan, hired by Energy Transfer Partners to protect the controversial Dakota Access pipeline, was paid to gather information for what would become a sprawling conspiracy lawsuit accusing environmentalist groups of inciting the anti-pipeline protests in an effort to increase donations, three former TigerSwan contractors told The Intercept. For months, a conference room wall at TigerSwan’s Apex, North Carolina, headquarters was covered with a web-like map of funding nodes the firm believed it had uncovered — linking billionaire backers to nonprofit organizations to pipeline opponents protesting at Standing Rock. It was a “showpiece” for board members and ETP executives, according to a former TigerSwan contractor — part of a project that had little to do with the pipeline’s physical security. In August, the law firm founded by Marc Kasowitz, Donald Trump’s personal attorney for more than a decade, filed a 187-page racketeering complaint against Greenpeace, Earth First, and the divestment group BankTrack in the U.S. District Court of North Dakota, seeking $300 million in damages on behalf of Energy Transfer Partners. The NoDAPL movement, the suit claims, was driven by “a network of putative not-for-profits and rogue eco-terrorist groups who employ patterns of criminal activity and campaigns of misinformation to target legitimate companies and industries with fabricated environmental claims.” “It was as if the entire campaign came in a box. And of course it did,” the suit alleges. “Its objective was not to protect the environment or Native Americans but to produce as sensational and public a dispute as possible, and to use that publicity and emotion to drive fundraising.” Among the nonprofit network’s alleged crimes: “perpetrating acts of terrorism under the U.S. Patriot Act, including destruction of an energy facility, destruction of hazardous liquid pipeline facility, arson and bombing of government property risking or causing injury or death.” The case was filed under the Racketeer Influenced and Corrupt Organizations Act, passed in 1970 to prosecute organized crime — primarily the mob. Greenpeace says it amounts to a strategic lawsuit against public participation, or SLAPP, designed to curtail free speech through expensive, time-consuming litigation.
#NoDAPL Activists Face Continued Tactics to 'Silence Future Protests' -- Dakota Access Pipeline owner Energy Transfer Partners (ETP) paid a private security firm to build a massive racketeering suit against green groups opposing the pipeline , three former employees confirmed to the Intercept this week. Documents leaked to The Intercept in May reveal that ETP hired TigerSwan, which was originally founded as a State Department contractor working to "execute the war on terror," to conduct counterterrorism measures on activists, including aerial surveillance on protesters, infiltrating activist groups and developing "counter-information" campaigns. ETP employed a law firm headed by Donald Trump 's personal attorney to file a blanket lawsuit in August alleging "eco-terrorism" against Greenpeace , Earth First , and the divestment group BankTrack . The lawsuit used information specifically gathered by TigerSwan, the Intercept confirmed in its latest report. As reported by The Intercept : "The case was filed under the Racketeer Influenced and Corrupt Organizations Act, passed in 1970 to prosecute organized crime—primarily the mob. Greenpeace says it amounts to a strategic lawsuit against public participation, or SLAPP, designed to curtail free speech through expensive, time-consuming litigation. 'It grossly distorts the law and facts at Standing Rock,' said Greenpeace general counsel Tom Wetterer. 'We'll win the lawsuit, but it's not really what this is about for ETP. What they're really trying to do is silence future protests and advocacy work against the company and other corporations.'" The federal government is also continuing to chase down #NoDAPL protesters: the AP reported that a woman seriously injured at the protests last year is still under investigation by the FBI, who applied for a warrant to search her Facebook account.
Woman injured in pipeline protest still being investigated - (AP) — A New York City woman who suffered a serious arm injury while protesting the Dakota Access pipeline last year is preparing for her fifth surgery, even as she faces assertions by the government that she or her fellow protesters are at fault for an explosion they blame on police. Recently unsealed court documents indicate the government last spring sought evidence that might implicate Sophia Wilansky of federal crimes dealing with homemade explosives by searching her Facebook account. Wilansky was injured during a violent clash between protesters and police in November 2016 that's become the emblematic skirmish of the months-long protest in North Dakota against the recently finished pipeline that's carrying oil to Illinois. Police said protesters threw objects including rocks, asphalt and water bottles at officers. Wilansky suffered a left arm injury in an explosion. Protesters allege the blast was caused by a concussion grenade thrown by officers, while police maintain it was caused by a propane canister that protesters rigged to explode. "There is probable cause to believe that violations (of explosives laws) have been committed by Sophia Wilansky," FBI Special Agent Brian VanOosbree said in an affidavit accompanying the March 28 application for a search warrant for her Facebook account. The FBI sought information that took 1 ½ pages to detail, from photos and videos to lists of friends. "It did seem like one of the motivations of going after her Facebook account was to see her associates, to see her friends," said Wilansky's attorney Lauren Regan, who heads the Civil Liberties Defense Center. Wayne Wilansky said he and his daughter weren't aware of the search but aren't surprised or worried by it. "There's nothing on her Facebook page that would concern me," he said. The family is planning to sue the FBI to obtain shrapnel that authorities took as evidence, hoping it will bolster an eventual lawsuit they plan to file against law enforcement seeking monetary damages.
Continental to export second Bakken cargo : (Argus) — Continental Resources said it has sold its second cargo of crude oil from the Bakken field in North Dakota for export. The company, a key Bakken producer, plans to sell 430,000 bl for January delivery to overseas markets. The transaction will take place at the Cushing, Oklahoma, storage hub, the company said. It did not share details on the buyer or where the cargo was headed. "We expect steady US production and increasing international sales will drive down US inventories and help correct the recent disparity between Brent and WTI prices," chief executive Harold Hamm said. The Brent-WTI spread has widened to over $6/bl in recent weeks from about $2/bl earlier in the summer. Continental last month said it sold its first shipment of Bakken, or 1mn bl for November delivery, to Total, which plans to export the oil to China. Daily sales of 33,500 b/d will take place in Cushing, it said.
EIA says US West Coast jet fuel imports reach 10-year high - Jet fuel imports to the US West Coast reached their highest level in more than 10 years in the week ended November 10, Energy Information Administration data showed Wednesday. West Coast imports soared to 275,000 b/d during the week , up 140,000 b/d week on week. This was the highest level since the week of March 9, 2007, when it was reported at 286,000 b/d. Two shipping vessels from Asia recently unloaded a total of more than 600,000 barrels of jet fuel at the Port of Los Angeles, according to US Customs data and Platts cFlow trade-flow software. STI Ruby arrived at the port from South Korea with more than 300,000 barrels of jet fuel on November 4 for LAXFuel. More recently, Silver Carla delivered more than 300,000 barrels of the product on Friday from China, with North American Fuel as the consignee. Benchmark Los Angeles jet dropped to its lowest differential in nearly 10 months Tuesday, assessed at NYMEX December ULSD minus 8.25 cents/gal, amid increased regional supply and low seasonal demand. Jet fuel inventories on the West Coast rose 389,000 barrels week on week to 9.672 million barrels, a four-week high, EIA data showed. Refiner and blender net jet production in the region also rose, climbing 54,000 b/d to 437,000 b/d. On the East Coast, stocks dropped to an 11-week low of 8.442 million barrels, down 1.635 million barrels. Production fell 14,000 b/d to a six-week low of 85,000 b/d, while imports also dropped to 34,000 b/d, down 44,000 b/d on the week. Gulf Coast jet inventories, meanwhile, climbed 1.314 million barrels to 14.264 million barrels, as production fell 49,000 b/d to 804,000 b/d. In the Midwest, stocks rose 339,000 barrels to 7.264 million barrels. In contrast, production fell 10,000 b/d to 251,000 b/d, EIA data showed.
Oil Tycoon Hamm Slams EIA's Overoptimistic Shale Forecasts -- As a powerful oil market mover, the EIA needs to have “more sophisticated” forecasts about U.S. shale production, because overly optimistic expectations depress oil prices and disadvantages the U.S. market, shale billionaire and Continental Resources chief executive Harold Hamm said in an interview with Bloomberg published on Thursday. The EIA is “a very powerful market mover, and so it’s necessary they understand all of these things,” said Hamm who is scheduled to take part in an EIA webinar on crude oil production forecasts later on Thursday.“EIA is on that world stage with us, as the swing producer in the world, and so it’s going to require better, more sophisticated methods of forecasting -- more so than ever before,” Hamm told Bloomberg. According to the billionaire oil executive, the EIA needs to hear “meaningful feedback” from the shale producers and oilfield service providers about their production challenges.“It’s pretty easy to get enamored” by technology, and “some people tend to go too far with it,” Hamm told Bloomberg. Over the past few months, Hamm has been one of the most vocal critics of EIA’s overly optimistic forecasts for U.S. oil production.
The Undisputed Leader Of Tomorrow's Oil & Gas Markets -- The United States will become the undisputed leader of global oil and gas production in the longer term, Fatih Birol, the Executive Director of the International Energy Agency (IEA), said at a press conference on the sidelines of a UN Climate Change conference in Germany on Thursday. The oil market will balance next year, but looking beyond the next few quarters, in the next ten years, more than 80 percent of the global oil production growth will come from the U.S., Birol said.Not only will the U.S. lead in new oil supply, but American natural gas production “will be 30 percent higher than Russia” in ten years, the IEA’s head said.The U.S. becoming the undisputed leader of global oil and gas production will have implications on oil markets, prices, trade flows, investment trends, and geopolitics of energy, Birol said in Bonn today.Earlier this week, the IEA said in its WEO that the 8 million bpd increase in tight oil production between 2010 and 2025 “would match the highest sustained period of oil output growth by a single country in the history of the oil markets.”The IEA also noted that the era of oil is not over yet, and said:“With the United States accounting for 80 percent of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, the world’s consumers are not yet ready to say goodbye to the era of oil.” It’s not only the IEA that expects U.S. oil production to continue to increase over the next decade. None other than OPEC—the rival producer bloc that tried to drive U.S. shale out of profitability by flooding the market with oil and contributing to the plunge in oil prices—admitted last week that American oil production will rise much faster than previously expected.
Jane Goodall urges U.S. Senate to halt quest for Arctic refuge oil (Reuters) - British primatologist Jane Goodall sent a letter to every U.S. senator on Tuesday urging them to oppose a push in the U.S. Congress to allow oil drilling in Alaska’s Arctic National Wildlife Refuge, a region environmentalists say is one of the world’s last paradises.The Republican-led Senate is trying to open up the 1002 region on the coastal plain of the ANWR, a region inhabited by Gwich‘in natives, caribou herds, polar bears and millions of birds that migrate to six of the world’s seven continents. “If we violate the Arctic Refuge by extracting the oil beneath the land, this will have devastating impact for the Gwich‘in people for they depend on the caribou herds to sustain their traditional way of life,” Goodall said in the letter, a copy of which was seen by Reuters. The ANWR’s “very wildness speaks to our deeply rooted spiritual connection to nature, a necessary element of human psyche,” wrote Goodall, best known for her study of chimpanzees in Tanzania. Last week, a group of 37 U.S.-based scientists whose research focuses on Arctic wildlife asked senators to not open the ANWR, saying that drilling would be “incompatible with the purposes for which the refuge was established.” The Senate energy committee on Wednesday will consider a bill spurred by Senator Lisa Murkowski, a Republican from Alaska and the head of the panel, to hold at least two lease sales in the ANWR over the next 10 years.
Bankrupt oil companies dump $100 million in clean up costs on Orphan Well Association in under two years – The Alberta government has been keeping a tab of the clean-up costs bankrupt oil companies have handed over to the Orphan Well Association since a controversial court decision last year made it easier for companies to dump liabilities. That tab has now passed $100 million. The Financial Post has obtained a copy of the Alberta Energy Regulator’s list of assets that have been transferred to the OWA, which cleans up oil and gas sites whose owners have gone bankrupt, since a controversial May 2016 Court of Queen’s Bench decision that the Supreme Court of Canada has now said it would review. The lower-court decision allowed the trustee for Redwater Energy to send the company’s uneconomic oil and gas wells to the OWA but keep control of better-performing wells, which could be sold to repay the company’s debt. The decision prioritized the rights of debt holders over environmental remediation in insolvency processes.Alberta appealed the decision all the way to the Supreme Court out of concern it would lead to more companies stripping off bad assets and handing the bill to the OWA and, potentially, onto taxpayers. The Supreme Court announced Thursday it would hear the appeal.The list obtained by the Post shows how many assets have been disclaimed since the lower court decision: 12 defunct oil and gas companies have disclaimed responsibility for 1,628 licensed oil and gas sites. The deemed liabilities for those sites exceed $100 million. University of Calgary economist Blake Shaffer said that extra $100 million in clean up costs would add to OWA’s burden.
Study: Benzene byproducts found in pregnant women near fracking sites - A Montreal study of exposure to high levels of benzene during pregnancy raises concerns about the risks for childhood leukemia. A team of Université de Montréal researchers looking at a small sample of 29 women living near major natural-gas well sites found high levels of toxins in their urine. Researchers found they had 3.5 times more benzene byproducts in their urine than the average person in Canada. But in nearly half the participants, 14 of them Indigenous women, the levels were six times higher. Benzene is identified as a cancer-causing volatile solvent, and its health impacts have been well-documented. Exposure to benzene may increase the risk of developing leukemia and other blood disorders. Contaminants, including volatile organic compounds, are released during hydraulic fracturing or fracking, and pregnancy is a vulnerable window of exposure for the mother and fetus, especially in the first months of pregnancy, said Élyse Caron-Beaudoin, a post-doctoral researcher at the Université de Montréal Public Health Research Institute and lead author. Results of the pilot study, led by toxicology risk-assessment expert Marc-André Verner of U de M, were published this week in Environment International. “The blood brain barrier is not completely developed in the fetus and if exposed, those toxins may pass that barrier,” Caron-Beaudoin said. “High exposure to benzene during pregnancy is associated with low birth weight, an increased risk of childhood leukemia and birth defects.”
Exposure to benzene during pregnancy—a pilot study raises concerns - Peace River Valley, in northeastern British Columbia, has become known in recent years as a place of hydraulic fracturing for natural gas - "fracking," as it's commonly called. What are the health impacts related to living near fracking sites where contaminants, including volatile organic compounds, are released? To try to answer that question, Élyse Caron-Beaudoin, a postdoctoral researcher at the Université de Montréal Public Health Research Institute, studied a group of pregnant women who live in the area. Her results were published this week in Environment International. High concentrations of muconic acid - a degradation product of benzene (a volatile, toxic and carcinogenic compound) - were detected in the urine of 29 pregnant women who participated in the pilot study. Their median concentration of muconic acid was approximately 3.5 times higher in these women than in the general Canadian population. In five of the 29 participants, the concentration of muconic acid surpassed the biological exposure index (BEI), a measure developed by the American Conference of Governmental Industrial Hygienists (ACGIH) to protect the health of people in the workplace. Caron-Beraudoin informed the five women of the results and communicated with their attending physicians. Guidelines of acceptable amounts of muconic acid in urine exist only for the workplace; there are none for the general population. "Although the levels of muconic acid found in the participants' urine cannot prove beyond a reasonable doubt that they were exposed to high levels of benzene, these results do clearly demonstrate the importance of exploring human exposure to environmental contaminants in natural-gas (fracking) regions," said Marc-André Verner, the lead researcher on the study. The health impacts of benzene are well-documented. "High exposure to benzene during pregnancy is associated with low birth weight, an increased risk of childhood leukemia and a greater incidence of birth defects such as spina bifida," said Caron-Beaudoin. "We were therefore very concerned when we discovered high levels of muconic acid in the urine of pregnant women."
Canada Builds $300 Million Highway To Nowhere, But Is There A Hidden Agenda? -- A new $300-million first of its kind ‘permanent’ highway will officially open in the Northwest Territories of Canada on Wednesday.This will be the first time in Canada’s history that the national highway system will be linked to all coasts. The completion of the four-year project is said to connect the tiny Arctic coastal town of Tuktoyaktuk with the rest of the communities to provide better transportation for residents.We think there could be another reason why Canada would build a highway to nowhere.As explained by one citizen in the video below, the new route is called ‘road to resources’, it’s where major reserves of oil and gas reside, and at one time inaccessible due to poor infrastructure. The all-season 137-kilometer highway is the first of its kind that connects Inuvik to Hamlet of Tuktoyaktuk. The traditional route to Tuktoyaktuk involved ice roads in the winter, but as the seasons changed those roads were inaccessible. In the summer, the only way to travel north was by plane, which made it difficult to transport goods. The new road will be a game changer and its size indicates heavy machinery can be transported north, such as oil and gas platforms. Darrel Nasogaluak, mayor of the Northwest Territories hamlet of Tuktoyaktuk, saidthe permanent road is “something that’s been on the community’s want list for 40 years.” Nasogaluak might want to take back that statement in a few years, as what we expect the Canadian government could flood the region with oil and gas exploration teams.
Local communities can decide how to spend cash from fracking through the Shale Wealth Fund - including paying themselves | City A.M.- Communities near fracking sites will be given the power to decide how to spend the money they will gain through a new Shale Wealth Fund, even if they choose to hand the cash directly to local residents, the government confirmed today. The fund will provide up to £10m for each community close to an approved site and will initially consist of up to 10 per cent of tax revenues arising from shale gas production. The Treasury has said the cash could go towards local projects such as sports facilities and libraries, improvements to transport links and the restoration of heritage sites. But, in a statement today, it added the funds could be "paid directly to local residents in host areas". The Treasury's exchequer secretary Andrew Jones said: Shale production could play an important part in the UK’s future energy security, creating jobs and boosting our economy.The economic benefits must be shared with those living alongside these sites and this funding will ensure local people reap the rewards too.The government has granted local autonomy in response to a consultation that ran from August to October last year. It first said it was intending to consult on the Shale Wealth Fund in the 2016 Budget. Those living in the north and the Midlands, where there are significant shale gas reserves, are set to benefit first. It's been estimated the exploration of shale could create around 65,000 jobs, attract up to £33bn in investment and also generate greater energy security. Environmental campaigners have been critical of the fund, which they view as a pay-off to attract communities that might otherwise oppose fracking.
Paradise Papers Reveal U.S. Selling Russian LNG In Europe - The new massive data leak that has been making headlines for several days now has revealed that a company with U.S. ownership has been buying Russian gas and selling it in Europe at higher prices. According to a report in Belgian daily Le Soir, taken up by other media outlets, such as The Guardian and Eurasia Review, Wilbur Ross holds a 35-percent interest in Navigator Holdings, a shipping company registered in the Marshall Islands.According to the leaked documents, four cargo carriers owned by Navigator Holdings were used to load Russian natural gas at the port of Ust Luga before heading to the Anwerp LNG terminal in Belgium.The documents suggest that a company with U.S. ownership is buying Russian gas from petrochemical giant Sibur, and then selling it—at a profit, of course—to the European Union, which is in a rush to build as many LNG terminals as it can in a bid to reduce its dependence on Russian gas.If the reports are true, the situation is an ironic one for Europe: while trying to reduce its dependence on Russian gas it is inadvertently increasing it and is even paying more for it than it would if it bought the extra loads directly from Gazprom. One might wonder how a U.S. company is able to do business with a Russian one. It’s simple: Wilbur Ross himself said earlier this week that Sibur is not a subject to sanctions, so for Navigator Holdings and the petrochemical giant, everything is business as usual.
Arctic Oil Drilling Under Attack as Norway Dragged to Court | Rigzone: -- A group of activists is trying to put a stop to Norway’s Arctic oil exploration and forcing the country to defend itself in the first court case of its kind.Greenpeace and a Norwegian group, Nature and Youth, say Norway’s decision to award 10 Barents Sea exploration licenses in 2016 to Statoil ASA, Lundin Petroleum AB, Chevron Corp. and others, breaches the country’s constitution. Drilling in these areas, which include new acreage bordering Russian waters, is incompatible with Norway’s commitment to fight climate change under the 2015 Paris Agreement and poses a threat to the environment, the plaintiffs say.Norway’s government says the plaintiffs are misreading the law -- or at least its intention. Representatives from the two sides meet in court in Oslo on Tuesday.The lawsuit is the first of its kind in Norway. But it marks part of a growing global trend of legal challenges brought against governments and companies for falling short on climate change. While experts doubt this particular suit will be successful, it could pave the way for more legal fights.The battle will also force Norway to confront its split status as a nation trying to promote green policies while relying on fossil fuels for economic growth. Norway is trying to wean itself off oil and gas reliance, but it remains western Europe’s biggest producer.“We will see more of this, in Norway and other countries,” Catherine Banet, an associate professor at the University of Oslo, said in a phone interview. “It’s definitely interesting -- it addresses an issue that affects many and goes straight to the dilemma of Norway’s petroleum and energy policy.”
Norway's $1 Trillion Wealth Fund Suddenly Considers Dumping $35 Billion Of Oil And Gas Stocks - One of the world's largest sovereign wealth funds, and one which ironically amassed the overwhelming majority of their wealth via rich oil reserves, is now looking to sell off some $35 billion worth of energy stocks. According to central bank Deputy Governor Egil Matsen, the move is intended simply to "spread the risks for the state's wealth," but one has to wonder whether the owner of 1.5% of the world's stocks has decided that oil has now moved into a period of secular decline. Per Bloomberg: Norway’s $1 trillion sovereign wealth fund proposed dumping about $35 billion in oil and gas stocks, including Royal Dutch Shell Plc andExxon Mobil Corp., to protect the economy of western Europe’s biggest petroleum producer. The nation will be “less vulnerable” to a drop in oil by not being invested in stocks of companies in the industry, the Oslo-based fund said Thursday. The Finance Ministry said it would study the plan and decide at the earliest in “autumn 2018.” “Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy governor at the central bank in charge of overseeing the fund, said in an interview in Oslo Thursday. “We can do that better by not adding oil price risk through the fund.” While the fund says the plan isn’t based on any view on the future of oil prices or the industry, it will likely add pressure on oil producers, already struggling in a world where renewable energy is gaining sway. In light of this news, here is a list of Norway's 10 largest energy holdings that you should probably look to lighten up on at some point before they do.
Ukrgazvydobuvannia plans to get 1.5 bcm of gas in five years due to 50 hydraulic fracturing operations conducted by Romanian Tacrom: Ukrgazvydobuvannia plans to get 1.5 bcm of gas in five years due to 50 hydraulic fracturing operations conducted by Romanian Tacrom Romanian Tacrom has conducted 50 hydraulic fracturing operations on the wells of Ukrgazvydobuvannia, which will allow to additionally receive about 1.5 billion cubic meters (bcm) of gas in five years. According to the company, since January 2017 the company has already received an additional 276 million cubic meters of gas due to Tacrom hydraulic fracturing operations performed on 29 wells. Ukrgazvydobuvannia estimates additional profit that could be received in five years at $92 million, while the total estimate for the first company's project to intensify production on the operating wells was $6.9 million. As reported, in 2016 Belorusneft and Romanian Tacrom won the tender of Ukrgazvydobuvannia for implementation of hydraulic fracturing operations. With the help of these contractors it is planned to implement 100 hydraulic fracturing operations during 2016-2017 on the deposits of Shebelynka and Poltava areas at a depth of 2,800-5,000 meters.
Rosneft Announces Completion Of World’s Longest Horizontal Well - Rosneft announced the successful completion of the world’s longest well in the Sea of Okhotsk today, according to a new report from World Oil.The Orlan platform finished the 15,000 -horizontal completion, creating a world record for the measurement. Since the Sakhalin-1 project began, the project has drilled nine of the world’s ten longest wells.Sakhalin-1 is operated by ExxonMobil.While output at oil sites operated by foreign oil majors under production-sharing agreements dropped by 39 percent in September over August, Russian companies boosted their domestic oil production. Output at the biggest oil firm Rosneft increased 1.2 percent to 3.82 million bpd, and production at no.2 Lukoil inched up 0.7 percent to 1.64 million bpd, according to Energy Ministry data, cited by Reuters.Russia’s pledge in the OPEC/non-OPEC deal is to shave off 300,000 bpd from the October 2016 level, which was the highest in almost 30 years.Russia’s Energy Minister Alexander Novak said on September 21 that Russia would exceed its share of the output cuts for September, due to maintenance works. “We are well below, due to maintenance works at some of our enterprises, including Sakhalin-1,” TASS news agency quoted Novak as telling reporters a few weeks ago.
Venezuela crude output hits 28-year low: OPEC (Reuters) - Oil-dependent Venezuela’s crude output dipped last month below 2 million barrels per day, its lowest level in nearly three decades, global producer group OPEC said on Monday. The output fall could not come at a worse time, with the economy in crisis and the socialist government struggling to pay its foreign debt. The government opens talks on Monday with creditors to renegotiate its debt and avert a default that would plunge its economy into deeper trouble. Compounding the situation, another eight managers and employees of state oil company PDVSA in eastern Venezuela were arrested in recent days for fiddling production figures, chief prosecutor Tarek Saab told reporters. In a major corruption sweep engulfing the oil sector, about two dozen high-level executives have already been arrested in recent weeks, ridding PDVSA of much of its top brass. The Organization of the Petroleum Exporting Countries’ latest monthly data showed Venezuela reporting production of 1.955 million bpd in October, versus 2.085 million in September. The figure was even lower based on secondary sources rather than what the government reports, at 1.863 million bpd in October, according to OPEC. Venezuela depends on oil for more than 95 percent of hard currency export revenues, fuelling both social welfare programs and payment on some $60 billion of outstanding bonds.PDVSA is the financial motor for President Nicolas Maduro’s government, but has been suffering from the oil price drop, crippling operational problems, and internal corruption.
Oil Spills in Nigeria Could Kill 16,000 Babies a Year -- Nigeria, one of the world’s most oil-rich countries, has a history of catastrophic oil spills that have wreaked havoc on the environment and local communities.But a new study says that oil spills may have also claimed the lives of thousands of babies born to mothers who live in areas contaminated by such incidents.The study, published as a working paper by the CESifo group, found that if an oil spill occurred within 10 kilometers (6.2 miles) of the residence of a mother before she fell pregnant, the mother’s baby would be twice as likely to die. Oil spills that occurred while the mother was actually pregnant did not have an impact on child or neonatal mortality, according to the study. Researchers found that even if the oil spill occurred five years before the mother conceived, it still resulted in the neonatal mortality rate doubling from 38 deaths per year to 76 deaths per year for every 1,000 live births. Given that there were almost 5.3 million live births in Nigeria in 2012 and that around 8.05 percent of these births took place within 10 kilometers of an oil spill, the authors estimated that oil spills could have killed around 16,000 infants within their first month of life in 2012.Roland Hodler, the study’s lead author, told the Guardian that the results constituted a “tragedy.” Oil spills are a fairly common occurrence in the Niger Delta region, a huge area of swamplands in southern Nigeria. The Nigerian Oil Spill Monitor has recorded more than 11,500 since 2006—when a government agency was set up to detect and investigate oil spills—though a few hundred of these were mistaken reports.The spills have led to accusations from Nigerians that international oil companies are exploiting the country’s natural resources. Royal Dutch Shell paid out £55 million ($83.5 million) to some 15,600 farmers and fishermen from the Bodo community in 2015 after two massives oil spills in 2008. Spills have also been a factor in periods of militancy in the region, most recently led by the Niger Delta Avengers.
Indian state oil firms betting on natural gas as next big thing (Reuters) - India’s state oil refiners are planning an aggressive push into natural gas in coming years to meet Prime Minister Narendra Modi’s goal of making the fuel a bigger part of the country’s energy mix. State-owned oil companies - Indian Oil, Bharat Petroleum and Hindustan Petroleum - are planning to raise gas contributions to between 5 and 15 percent of their incomes over the next few years, up from nearly none now, company executives said. This in line with a government target to raise the natural gas portion of India’s primary energy mix to 15 percent by 2030, up from 6.5 percent now, to help meet climate targets and rein in rampant pollution. The increase would come mostly at the expense of coal, which is dirtier than gas and is India’s most-used energy source. Liquefied natural gas (LNG) imports will cover the greater part of the growth, although the government also hopes to recover untapped domestic reserves off its east coast. With China, Pakistan and Bangladesh also increasing gas use, the surge in Asian demand is expected to help eat up a global glut of LNG supplies by 2021-2022. BPCL, another leading Indian refiner, sees natural gas pulling in 5 to 10 percent of its overall revenue in less than a decade, from barely any now, its director of refineries, R. Ramachandran, told Reuters. The state oil companies’ plans involve building LNG import terminals and domestic pipelines, and bidding to set up urban gas networks across potential major demand centres, particularly in the eastern part of the country. India’s natural gas consumption is expected to rise to 70 billion cubic metres (bcm) by 2022 and 100 bcm by 2030, according to a government think tank and the Oxford Institute of Energy Studies, up from 50 bcm now. India burns just 7 percent of what top user the United States consumes in a year with about a quarter of India’s population.
US, Japan break into Vietnam's LNG market - Vietnam's LNG ambitions moved closer to reality last week, following several preliminary agreements signed with US-based and Japanese entities, aimed at securing LNG supplies, building regasification infrastructure and developing downstream markets in the southeast Asian country. The expectation that the LNG industry will remain oversupplied into the 2020s is creating an incentive for Vietnam and other emerging Asian markets to develop import infrastructure and accelerate energy reforms to support gas penetration in the energy mix. Meanwhile, international investment is pouring in across the region, as global LNG market participants seek to create new demand outlets, amid rising global supplies from the US and Australia, and stagnant demand growth in the legacy markets of Japan and South Korea. For the US, this emerging demand presents an opportunity to secure buyers for the multi-billion dollar LNG export projects being built along the US Gulf Coast, and reduce trade deficit in goods with its Asian trading partners. For Japan, opening new demand centers in the region is a key priority, as the world's largest LNG consumer is faced with a combination of contractual over-commitment, slowing domestic demand growth and downstream market deregulation. The deals were signed as Vietnam held the 2017 Asia Pacific Economic Cooperation Summit (APEC) in the central city of Da Nang.
China's crude oil stocks fall for first time in a year - China's crude oil stocks fell for the first time in 12 months in October -- by 27.41 million barrels from the month before -- as crude imports hit a one-year low amid strong throughput at domestic refineries, S&P Global Platts calculations based on latest official data showed Thursday. The last time China saw a draw in monthly crude stocks was October 2016, of 18.32 million barrels. Stocks subsequently rose each month until a 20.16 million-barrel build was calculated for September. Analysts said the country was unlikely to see a significant crude stock build in November amid expectations refinery throughput will remain high in the month. China does not release official data on stocks. Platts calculates China's net crude stocks build or draw by subtracting the official refinery throughput data from the country's crude supply data. The latter takes into account net crude imports and domestic crude production. Latest data from the National Bureau of Statistics showed that refinery throughput in October jumped 7.4% year on year to 11.94 million b/d, despite edging down 0.9% from the historical high of 12.06 million b/d in September. "The October run was slightly lower than that in September only because of the 19th China's Communist Party Congress, which required industrial plants to lower runs to cap pollution," said a Beijing-based analyst. Meanwhile, China's crude imports in October hit a 12-month low at 7.34 million b/d, resulting in country's crude supplies in the month falling 13.1% from September to 11.06 million b/d, despite posting a 4.5% rise on a year-on-year basis.
China's oil demand to reach 15.5 million b/d in 2040: IEA - Oil demand from China's transportation sector will peak in 2030, and flatten thereafter, mainly due to falling gasoline demand for passenger vehicles that become more efficient and increasingly electricity-driven, the International Energy Agency said in its latest World Energy Outlook report Tuesday. The flattening of China's oil demand growth reflects its fundamental change from an industry-driven economy to one based on services and consumption. It also has major implications for Beijing's reliance on oil imports, energy security and the overall energy mix. "China's energy future will not be a continuation of previous trends," the IEA said, adding that the country's energy choices will have profound implications for global markets, trade and investment flows. Oil will still remain the backbone of China's transport fuel demand till 2030, growing by 3.3% per year on average, but its share will fall to just above three-quarters, from nearly 90% today, the IEA said. The remaining 25% of transport fuels will be biofuels, natural gas and electricity. The IEA said that China would become the world's largest oil consumer by the early 2030s, overtaking the US, and touch 15.5 million b/d in 2040. But the slowdown means that India will become the largest source of global oil demand growth from around 2025.
OPEC Reports 151Kbpd Drop In October Crude Output; Raises Demand Forecast For 2018 -- True to its perpetually optimistic form, OPEC, which only last week for the first time conceded the threat posed by rising US shale production...... sharply raised its demand forecast for cartel oil in 2018, ahead of a key meeting of the group’s ministers later this month. According to OPEC's monthly market report, the oil exporters said the forecast demand for its oil next year had been increased by around 400,000 barrels a day from the previous month to 33.4mmbpd, about 0.46mmbpd higher than in 2017. Overall, the cartel now expects global demand growth to rise by 1.53 million barrels a day in 2017 - an upward revision of 74kbps from the October report citing better than expected performance from China - and 1.51 million barrels a day in 2018.The increase comes on the back of the recent global economic strength, which has exceeded many analysts’ expectations, helping to draw down inventories that built up during the crude glut since late 2014. Furthermore, the rise in demand has combined with the 1.8mmbpd in production cuts by OPEC and non-OPEC nations since January of this year to help tighten the market, pushing the price of Brent back above $60 a barrel for the first time in two years.As the FT adds, cartel analysts said demand for Opec crude is expected to reach 34m b/d in the second half of next year, roughly 1.4mmbpd above what they pumped last month, according to secondary sources. As usual, oil demand is contingent not only on overall confidence (i.e. the stock market), but also whether the global economy is expanding or contracting, which all boils down to whether China is creating lots of new debt each month. In the monthly report, OPEC also said Monday that crude oil production fell last month by 151,000 barrels a day. Crude output by members of the Organization of the Petroleum Exporting Countries dropped by 0.46%, to 32.59 million barrels a day in October, compared with the month prior. That decline was aided by reduced production in Iraq, Nigeria, Venezuela, Algeria and Iran. Production in Saudi Arabia rose by 17kpbd to 10 million barrels daily. As the WSJ notes, the report "highlights the cartel’s increasingly successful efforts to rebalance the oil market by withholding production to reduce the global supply glut and boost prices." To be sure, none of the numbers below incorporate last week's striking FT report, according to which Saudi Arabia may be hiding 70mm barrels in above ground storage to give the impression of higher demand.
OPEC Boosts 2018 Demand Forecast, Signaling Faster Rebalancing - OPEC boosted forecasts of demand for its crude in 2018, signaling that the rebalancing of the global market could gather pace.The Organization of Petroleum Exporting Countries raised estimates for the amount it will need to pump to meet demand next year by 400,000 barrels a day to 33.4 million a day, according to a monthly report from the group. As that’s about 670,000 a day more than OPEC produced in the third quarter, global inventories would diminish further in 2018 if the group and its allies continue to keep supplies restrained.OPEC and Russia have been leading a worldwide coalition of oil producers this year in production cuts aimed at ending a glut that has weighed on prices and battered their economies since 2014. They’ll meet on Nov. 30 in Vienna, where they may decide to prolong the measures beyond their scheduled end in March.Output cuts are the “only viable option” for completing the rebalancing of the market, OPEC Secretary-General Mohammad Barkindo said in Abu Dhabi on Monday. Last week he said that no producers opposed continuing the accord and the only question was the duration of the extension.Production from OPEC’s 14 members shrank by 150,900 barrels a day last month to 32.59 million a day as a result of lower output from Iraq, according to the report. The country’s exports have been curtailed because of a dispute between the central government and the semi-autonomous Kurdish region. Iraqi production fell by 131,000 barrels a day to 4.38 million a day.The report showed that supply curbs by OPEC, Russia and their partners are paying off. Oil inventories in developed nations dropped again in September, bringing the total decline this year versus their five-year average to 183 million barrels. OPEC has said its main objective is to return stockpiles to the five-year mean; they remain 154 million barrels above this level. OPEC increased estimates for global demand in 2018 by 300,000 barrels a day to 98.45 million a day. Demand will expand next year by 1.5 million a day, or 1.6 percent.
OPEC points to larger 2018 oil supply deficit as market tightens (Reuters) - OPEC raised its forecast on Monday for demand for its oil in 2018 and said its deal with other producers to cut output was reducing excess oil in storage, potentially pushing the global market into a larger deficit next year. The Organization of the Petroleum Exporting Countries also said in a monthly report it had cut its estimate of 2018 supply from non-OPEC producers and said oil use would grow faster than previously thought due to a stronger-than-expected world economy. “The global economic growth dynamic has continued its broad-based and relatively strong momentum,” OPEC said. “The ongoing momentum could still provide some slight upside potential.” OPEC said the world would need 33.42 million barrels per day (bpd) of OPEC crude next year, up 360,000 bpd from its previous forecast and marking the fourth consecutive monthly increase in the projection from its first estimate made in July. The report is OPEC’s last before a Nov. 30 meeting in which the group and its allies are expected to extend their supply-cutting deal further into next year. The projections pointing to a growing 2018 supply deficit could influence debate on how long to maintain the curbs. Oil prices, which are close to their highest since 2015, rose further towards $64 a barrel after the report was issued. Crude is still about half its level of mid-2014, when a build-up of excess supply led to a price collapse. The 14-country producer group said its oil output in October, as assessed by secondary sources, was below the 2018 demand forecast at 32.59 million bpd, a drop of about 150,000 bpd from September. The report’s OPEC production figures mean compliance with the supply cut by the 11 members with output targets has risen above 100 percent from 98 percent initially reported in September, according to a Reuters calculation.
Warmer weather, rising non-OPEC output threaten oil market balance (Reuters) - Global oil demand growth looks likely to increase more slowly over the coming months, as warmer temperatures cut consumption, which may tilt the market back into surplus in the first half of next year, the International Energy Agency said on Tuesday. In its monthly oil market report, the Paris-based IEA cut its oil demand forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018. Geopolitical tension in the Middle East and intermittent supply outages in the likes of Nigeria and Iraq have pushed oil above $60 a barrel for the first time since 2015, while global inventories have fallen, prompting many market watchers to raise their price forecasts. “Does it mean the market has found a ‘new normal’ where the accepted floor might have moved from $50/bbl to $60/bbl? This might be a tempting view, assuming supply disturbances will continue and tensions in the Middle East will not ease,” the IEA said. “However, if these problems do prove to be temporary, a fresh look at the fundamentals confirms the view we expressed last month that the market balance in 2018 does not look as tight as some would like, and there is not in fact a ‘new normal’.” The IEA noted that output by the Organization of the Petroleum Exporting Countries was down by 830,000 bpd year-on-year in October, although demand for the group’s crude is expected to fall to 32.6 million bpd in the fourth quarter of this year and to 32.0 million bpd in the first quarter of 2018. Compliance by the group with its joint 1.8-million-bpd output cut with 10 partners was 96 percent in October, the highest since the supply-reduction deal took effect in January. The biggest threat to market balances, aside from a tempering in demand, is the growth in supply from non-OPEC nations. “Even after some modest reductions to growth, non-OPEC production will follow this year’s 700,000-bpd growth with 1.4 million bpd of additional production in 2018 and next year’s demand growth will struggle to match this,” the IEA said.
Oil prices hit by profit-taking after funds build record bullish position: Kemp (Reuters) - Crude oil prices and calendar spreads have started to soften in recent trading sessions, in what is likely to be profit-taking after hedge funds amassed a record bullish position in the petroleum complex. Hedge funds and other money managers had accumulated a record net long position in the five largest futures and options contracts linked to crude and fuels by Nov. 7, according to regulatory and exchange data. Fund managers held a net long position equivalent to 1,085 million barrels of crude, gasoline and heating oil, up from 305 million at the end of June, and beating the previous peak of 1,025 million set in February. Long positions in crude and fuels have been boosted to a record 1,295 million barrels while shorts have been cut to just 211 million, the lowest since April (http://tmsnrt.rs/2zBrPbN). Hedge funds hold record or near-record bullish positions in Brent, U.S. gasoline, U.S. heating oil and European gasoil, only in WTI is their positioning is still well below previous highs. There may be fundamental reasons to believe prices will head higher, but the lopsided hedge-fund positioning and concentration of long positions has increased the risk of a price reversal in the short term. Brent futures prices for delivery in January 2018 hit a high on Nov. 6 but have since stalled and started to drift lower. Brent calendar spreads for the first half of 2018 also peaked on Nov. 6 and have since eased sharply. Brent prices, which have rallied faster than WTI since the middle of August, have been hit harder in recent trading sessions, which is consistent with profit-taking. Hedge funds held a record net long position of 543 million barrels in Brent on Nov. 7. By contrast, the net long position in WTI was just 382 million barrels, well below the record of 444 million barrels set in February. Fund managers held almost 11 long positions in Brent for every short position, but just 4.5 long positions for every short in WTI, a sign that Brent had become far more stretched than its U.S. counterpart. Positioning in U.S. gasoline and heating oil was also at or close to multi-year highs. The net long position in heating oil hit a record 70 million barrels on Nov. 7. Gasoline stood at a near-record 90 million barrels. With so many long positions already established by last week, and few short ones left to cover, the rise in petroleum prices was at risk of running out of momentum and falling prey to a correction, which is what seems to have happened.
Oil prices remain steady on Monday — Oil was largely steady on Monday, trapped between a bullish push from tension in the Middle East and downward pressure from evidence of rising US production, although record fund bets on a rally kept the price in sight of two-year highs. Brent crude futures were down 17 US cents at $63.35 a barrel by 10.02am GMT, having gained 14% so far in November. US West Texas Intermediate (WTI) crude eased 6c to $56.68. Traders said crude prices were generally well supported as output cuts led by oil cartel Opec and Russia have contributed to a significant reduction in excess supplies that have dogged markets since 2014. The excess of industrialised countries’ oil stockpiles over their five-year average "has fallen by more than 50% in 2017, with inventories currently at around 160-million barrels", consultancy Timera Energy said. "If current trends continue, inventories are likely to return to the five-year average at some stage in 2018," it said, adding that strong demand had also helped reduce the glut. Hedge funds increased their holdings of Brent crude futures and options in the latest week, pushing their bet on a sustained rally in the oil price to the highest on record. Money managers now hold a net long position in Brent futures and options equivalent to nearly 544-million barrels of oil. On the supply side, tension in the Middle East raised the prospect of disruptions, traders said, adding it was unclear whether a strong earthquake that hit Iran and Iraq on Sunday had affected the region’s oil production.
Don’t Back U.S. Shale To Keep Oil Prices Down - WTI is back in the upper-$50s per barrel, and OPEC is on the verge of extending its production limits well into next year. The fear for OPEC, and other oil bulls, is that this risks sparking another wave of U.S. shale supply, sending oil prices right back down to where they came from. But what if U.S. shale fails to keep up with soaring demand?That’s the conclusion from Morgan Stanley—a prediction that flies in the face of conventional wisdom. When OPEC signed its deal a year ago to limit production, oil prices moved up into the $50s per barrel, and over the next 12 months, the U.S. brought about 1 million barrels per day (mb/d) back online. With crude prices back at similar heights, shouldn’t another dose of shale production be a sure thing?Morgan Stanley says that while U.S. shale drillers could add new production, they won’t be able to keep up with market demand. The investment bank says that the shale sector will have to grow production from about 5.9 mb/d this year to over 7 mb/d in 2018 in order to ensure that the market doesn’t plunge into a deficit, a level that the industry is unlikely to achieve. Shale drillers have proven that they can add that amount of supply in a short period of time in the past, but further gains will be much harder to achieve. "Right when the world's reliance on shale is growing, its limits are starting to become apparent, and there seem to be two aspects to this: ability and willingness," Morgan Stanley analysts wrote last week.The shale sector has run into a range of obstacles in recent months. Higher drilling costs and a shortage of fracking crews have led to bottlenecks. Oilfield services companies are demanding higher prices from producers. Also, there have been operational problems—some shale wells are producing more gas than expected, a bad sign for wells assumed to produce heavier volumes of oil.A range of other metrics point to sudden struggles for shale drillers. Improvements in drilling times have also stagnated over the past year, indicating a limit to the “efficiency gains” that can be achieved by drillers. Rig productivity, as measured in initial output from new wells per rig, have been falling since 2016. Meanwhile, perhaps the most important metric of all—profits—continues to disappoint. The latest roadblock for the shale industry comes from their restive shareholders, who are demanding a strategy overhaul after years of broken promises and red ink. Investors are pushing for spending cuts, changes to executive compensation and more cash returned in the form of share buybacks. The aim is to focus on profits, not production growth.
Oil markets cautious as rising U.S. output undermines OPEC supply cuts : (Reuters) - Oil prices fell on Tuesday as the prospect of further rises in U.S. output undermined ongoing OPEC-led production cuts aimed at tightening the market. Brent crude futures were at $62.94 per barrel at 0415 GMT, down 22 cents, or 0.35 percent, from their last close. U.S. West Texas Intermediate (WTI) crude CLc1 was at $56.62 per barrel, down 14 cents, or 0.25 percent. The falls came after both crude benchmarks early last week hit highs last seen in 2015, but traders said the market had lost some momentum since then. Traders said they were cautious on betting on further price rises. “Prices...are starting to look like a pause or pullback is needed,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader. This sentiment comes in part on the back of rising U.S. oil output, which has grown by more than 14 percent since mid-2016 to a record 9.62 million barrels per day (bpd). The U.S. government said on Monday U.S. shale production for December would rise for a 12th consecutive month, increasing by 80,000 bpd.Fitch Ratings said in its 2018 oil outlook that it assumed 2018 “average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained”.
IEA Pours Cold Water On OPEC Optimism, Warns Global Oil Demand Shrinking -- Pouring cold water on yesterday's optimistic demand forecast projected by OPEC, which projected global crude demand growth to rise by 1.5mm b/d in 2018, this morning the International Energy Agency warned that the crude oil price rally could be short-lived because, contrary to OPEC's expectations, global oil demand will be weaker than expected this year and next. In its closely watched monthly oil report, the IEA cut its crude demand growth outlook by 100,000 barrels a day for 2017 and 2018, as the WSJ reported. The agency now expects demand to grow by 1.5 million barrels a day this year and 1.3 million barrels a day next year.The IEA predicted that balances will likely show the crude market is oversupplied in Q4 2017 and the first half of 2018, with oil demand in 2017 at 97.7mmb/d, rising to 98.9 million in 2018. Meanwhile, non-OPEC Oil Supply is expected To rise by 700,000b/d In 2017 To 58.1mmb/d, and another 1.4 mmb/d in 2018 to 59.5mm b/d, led by shale output.The IEA also noted that global oil inventories fell 63mm barrels In Q3, only second quarterly draw since 2014, with the call on OPEC crude seen at 32.6mmb/d in Q4, declining to 32.0mmb/d in Q1 2018.However, "the highlight of the report was that they lowered their demand forecast," said Jens Pedersen, senior analyst at Danske Bank. The report also cautioned that "if the geopolitical concerns calm down, then prices could fall down again, so on the margin it’s a tad bearish."The IEA noted that oil prices have risen roughly 20% since early September with Brent crude sustaining gains above $60 a barrel in recent weeks, on the back of supply disruptions and geopolitical tensions in the Middle East. But if those problems prove temporary, a “fresh look at the fundamentals” would likely show the “market balance in 2018 does not look as tight as some would like and there is not in fact a ‘new normal.’”
The Dangers Of A Bullish Oil Market - Oil prices fell on Tuesday in early trading, a sign that investors could be pocketing profits after building up huge net-long bets on crude futures. As those traders back out of bullish positions, they could be forcing oil prices to trade down a bit. In the IEA’s latest report, the agency says that the U.S. shale boom is far from over, and in fact, by 2025, the increase in supply will equal what Saudi Arabia achieved at the height of its oil boom. Similarly, the expansion of U.S. natural gas supply will exceed what the Soviet Union achieved. “The United States will be the undisputed leader of global oil and gas markets for decades to come,” IEA Executive Director Fatih Birol said in an interview with Bloomberg television. “There’s big growth coming from shale oil, and as such there’ll be a big difference between the U.S. and other producers.” The IEA cast doubt on global demand in its report, lowering its projected demand growth figure for 2017 by 100,000 bpd to just 1.5 mb/d. It also slashed its 2018 forecast by 100,000 bpd, lowering its estimate to just 1.3 mb/d. Lower than expected demand could deflate oil prices. OPEC continued to report “high conformity levels” in October, with output dipping by 151,000 bpd from a month earlier. The data provides a strong bit of momentum heading into the cartel’s official meeting on November 30, a summit that most analysts believe will produce an extension of the current production cuts for as long as another year. In OPEC’s monthly report, the group cited falling global inventories as a sign that the production cuts have been a success. OPEC’s Secretary-General Mohammad Barkindo said that extending the production cuts is the “only viable option” to restore the group’s credibility. There are few signs of an outcome other than an extension at this point. Last week, OPEC raised its forecast for demand for OPEC crude in 2018 by 400,000 bpd, which would imply a sharper drawdown in stocks. “We are seeing clear indications that the market is re-balancing at an accelerating pace and stability is steadily returning,” Barkindo said. “I am certain that if we had not mobilized ourselves when we did, building consensus and jointly taking action in responding to the crisis, the industry would be in worse condition than it is today.”
Oil prices sink on concern about demand and rising US output --Oil prices fell about 2 percent on Tuesday on forecasts for rising U.S. crude output and a gloomier outlook for global demand growth in a report from the International Energy Agency.Analysts also noted that oil prices were being pressured by a global commodities selloff, led by base metals like nickel and copper, due to weaker-than-expected economic data from China. U.S. West Texas Intermediate (WTI) crude ended Tuesday's session down $1.06, or 1.9 percent, to $55.70, posting its worst daily performance since Oct. 6. The contract plunged to $55.18 at the session low. Brent crude futures fell $1.04, or 1.7 percent, to $62.12 per barrel by 2:26 p.m. ET (1826 GMT), after falling as low as $61.36 earlier in the session. Market watchers said the declines caused some short-term traders to get nervous and sell out of their positions. Traders noted that Brent slid more after the contract fell below its 14-day moving average for the first time in three weeks.Just last week, prices for both benchmarks hit their highest levels since 2015.The IEA delivered a surprisingly downbeat outlook for oil demand in its monthly market report, showing an expected slowdown in consumption that was at odds with a more bullish view from the producer group OPEC on Monday.The Paris-based IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for this year and next, to an estimated 1.5 million bpd in 2017 and 1.3 million bpd in 2018.The IEA said warmer temperatures could reduce consumption, while sharply rising output from some producer countries might bring back the global crude glut in the first half of 2018."The IEA slashing its oil demand growth forecast for this year and the next has dampened some of the bullish sentiment prevailing in the market,"
WTI/RBOB Extend Losses After Huge Crude Build -- WTI/RBOB prices tumbled today on demand outlook cuts (and late comments from Brazil and Russia with regard OPEC cuts) ahead of tonight's API report which is expected to show crude and gasoline draws. However, WTI/RBOB prices extended their losses as Crude (biggest in 9 months) and Gasoline saw significant builds. API:
- Crude+6.513mm (-2.4mm exp) - biggest build in 9 months
- Cushing -1.803mm - biggets draw in 4 months
- Gasoline +2.399mm (-1.5mm exp) - biggest build in 3 months
- Distillates -2.527
Last week's surprise Crude build appear to be a trend... Following OPEC's forecast of huge oil demand, IEA poured cold water all over that and cut its demand outlook, then Brazil and Russia seem to back away from extending OPEC production cuts...
A lightning fast rally in oil prices is reversing. Here's why-A downbeat outlook for oil demand from a top energy watchdog and fears of rising U.S. output sparked a sell-off in crude futures this week, but analysts say the market was already poised for a pullback. International benchmark Brent and U.S. West Texas Intermediate crude have both shed about $3 a barrel, or nearly 5 percent, from more than two-year highs struck last week. Brent was trading at $61.63 on Wednesday, while WTI was at $55.15, both down about 1 percent after posting their worst daily performance in about a month on Tuesday. It is a pullback from a recent spike fueled by signs of improving oil demand and a month of escalating tensions in the Middle East that threatened output from top OPEC producers. But on Tuesday, the International Energy Agency lowered its outlook for demand growth in both 2017 and 2018, in part because of warmer than expected winter weather. The energy policy adviser to developed nations knocked down its growth forecast by 100,000 barrels a day for each year, projecting that oil markets will remain oversupplied in the first half of 2018. Global demand will struggle to sop up rising output by producers outside the 14-member OPEC cartel, particularly from the United States, IEA said in its monthly oil report. Recent weekly figures show U.S. drillers are pumping near all-time high levels. "This is why, absent any geopolitical premium, we may not have seen a 'new normal' for oil prices," IEA concluded. That view contradicted OPEC's projection, which had been released one day earlier. The producer group raised its forecast for demand growth by 130,000 barrels a day in 2018. Adding to the commotion, oil futures got caught in a general commodities sell-off following weaker-than-expected economic data from China, which drives global commodity consumption
WTI/RBOB Slide On Surprise Build As US Crude Production Hits New Record High -- WTI/RBOB extended yesterday's IEA-driven losses after a big crude build reported overnight by API, and DOE did nothing to assuage that with a 1.85mm crude build (admittedly smaller than API's projected 6.5mm, but notably different from the 2.4mm draw expected),Gasoline also surprised with a build and WTI/RBOB extended losses. Additionally US Crude production rose to a new record high.Bloomberg Intelligence energy analyst Fernando Valle notes:Weaker demand drove a negative print for crude and product stocks.Strong refinery runs and rising crude exports were not enough to offset rising U.S. crude production. This latest increase, combined with reduced demand for refined products should put a damper on the oil-price recovery. DOE:
- Crude +1.854mm (-2.4mm exp)
- Cushing -1.504mm
- Gasoline +894k (-1.5mm exp)
- Distillates -799k
DOE data confirmed API's reported builds in crude and gasoline (and a big drawdown in Cushing stocks). US Crude production reached a new record high the previous week - not what OPEC hoped for - and last week's big surge in the rig count suggests this is not about to slowdown as iot rose 25k b/d to a new record high... WTI was hovering right at $55 heading into the DOE data and broiefly broke below on the print. RBOB is notably weaker...
Oil prices fall for fourth day after U.S. crude stocks rise -- Oil prices fell for a fourth session on Wednesday after the U.S. government reported an unexpected increase in crude and gasoline stockpiles, but an increase in refining runs and a drawdown in distillates helped prices bounce off session lows. Prices also remained under pressure from this week’s International Energy Agency (IEA) outlook for slower growth in global crude demand. While the crude build of 1.9 million barrels reported by the Energy Information Administration was more than forecast, it was not as big as the increase of 6.5 million barrels reported on Tuesday by industry group the American Petroleum Institute. The EIA data encouraged buying at session lows. “Overall, the report is somewhat supportive because it was not as bearish as the previous API report last night – that is why we are slowly digging our way out of the downside seen earlier this morning,” s The data also showed distillate stocks in the U.S. Gulf fell to a one-year low, while overall refining rates rose in the latest week, led by a jump in East Coast refining, which is operating at a record 99.8 percent of capacity. Increased refining rates could eventually reduce crude inventories. U.S. West Texas Intermediate (WTI) crude CLc1 was trading at $55.42 per barrel, down 32 cents, as of 1:19 p.m. EST (1819 GMT). Brent crude futures LCOc1 were down 19 cents at $62.02 a barrel, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. On Tuesday, the IEA cut its oil demand growth forecast by 100,000 barrels per day (bpd) for both 2017 and 2018. That could mean world oil consumption may not breach 100 million bpd next year as many had expected. Also, supplies are likely to exceed that level, particularly as U.S. production continues to rise.
Oil extends losing streak on U.S. oversupply worries (Reuters) - Oil prices ended lower again on Thursday on increased concerns about growth in U.S. production and inventories, despite expectations that major world producers will extend a supply-cut deal later this month. Brent crude futures LCOc1 settled 51 cents, or 0.8 percent, lower at $61.36 per barrel, running its streak of losses to five straight days. U.S. light crude CLc1 fell for a fourth consecutive session, ending down 19 cents, or 0.3 percent, at $55.14 a barrel. Oil prices have slipped from the two-year highs hit last week by both crude benchmarks on signs that U.S. supply is rising and could potentially undermine OPEC’s efforts to tighten the market. The market has been bolstered of late by funds extending long positions on a bullish outlook for the commodity due to tightening supply worldwide. Expectations that the Organization of the Petroleum Exporting Countries will agree to extend their supply-cut pact with other major world producers in Vienna on Nov. 30 has offset some of the recent pressure on prices. Now, some analysts believe there won’t be clarity on the market’s direction until after OPEC meets on November 30. “Certainly U.S. oil production is not slowing down. If crude imports remain elevated and exports don’t rebound, then the bullish underlying tone begins to fade,
OilPrice Intelligence Report: Is This Oil Rally Coming To An End?: Crude benchmarks posted steep losses this week in the wake of the incredibly bearish assessment from the IEA. The losses continued on Wednesday and Thursday after the EIA reported a surprise uptick in crude inventories. However, oil regained some ground in early trading on Friday on hopes that OPEC would extend its production cuts.Saudi Arabia’s energy minister tried to assuage oil market concerns about OPEC’s actions. “We need to recognize that at the end of March we’re not going to be at the level we wanted to be, which is at the five-year average,” Khalid al-Falih said in a Bloomberg television interview Thursday. “That means an extension of some sort is needed. My preference is to give clarity to the market, and announce on Nov. 30 what we are going to do.” But the problem is that the oil market has already baked in the cuts into current assumptions. “Anything apart from an extension to the end of 2018 is likely to send the oil price into an immediate tailspin,” analysts at Commerzbank said. “In our view, the key factor in the supply-demand equation is the U.S. shale sector—something OPEC is keen to play down through its constant comments on the agreement to cut production.” TransCanada’s Keystone pipeline spilled about 5,000 barrels of oil, or 210,000 gallons, in South Dakota on Thursday, just a few days ahead of a crucial decision by the Nebraska Public Service Commission on the fate of the company’s proposed Keystone XL pipeline. The older Keystone pipeline, which runs from Alberta to the Gulf Coast, was shut down after the leak. Critics of the Keystone XL project seized on the news, citing the leak as exactly the type of threat that comes with the proposed pipeline.
NYMEX Dec gas dips even as storage withdrawal exceeds expectations -- The NYMEX December natural gas futures contract dipped 2.7 cents Thursday to settle at $3.053/MMBtu, even as the US Energy Information Administration announced a higher-than-expected storage withdrawal. The EIA estimated an 18 Bcf withdrawal for the week that ended November 10, 4 Bcf larger than the 14 Bcf withdrawal estimated by analysts surveyed by S&P Global Platts. It was the first withdrawal of the season. Over the past five years, the first storage pull on average came in the week that ended November 17. The week that ended November 10 has averaged a 12 Bcf storage build over the past five years. The larger-than-expected pull came as temperatures in high-demand areas across the US have been cooler-than-average, increasing heating demand. Total demand in the US has averaged 77 Bcf/d so far in November, according to Platts Analytics' Bentek Energy data, compared with 67.1 Bcf/d in the year-ago period. Total gas stocks now sit at an estimated 3.772 Tcf, a 2.6% deficit to the five-year average, according to EIA data. Looking ahead, the most recent six- to 10-day weather outlook from the National Weather Service calls for cooler-than-average temperatures in the US Northeast and Southeast, with the West expected to see warmer-than-average temperatures. Also, US dry production is expected to dip to a projected 75.4 Bcf/d over the next 14 days, compared with the 76.1 Bcf/d average for the six days prior, according to Platts Analytics.
As Oil Heads For Down-Week, Crude Stakes Are Huge -- After five straight weeks higher - read by many as confirmation of how awesome the global coordinated recovery must be - WTI and Brent dropped this week as inventories rose, demand outlooks dimmed, and OPEC hope faded. As Alhambra Investment Partners' Jeffrey Snider notes, there is a titanic struggle going on right now in the oil market.On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February.Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has intervened on the other side. Back then it was the oil producers who rising inventory forced into a larger and larger offsetting net short (hedge).This time, however, it is the swap dealers who are short for reasons that aren’t really clear. The weekly COT report for the last week in October showed a record net short for dealers, just beating their most extreme position from the middle of 2013 at -424k contracts. In the first week and November, they blew away that record at -470k. It clearly matters because in 2017 the oil market has changed. It may be the inventory story, or it may be the exit of producers from hedging that inventory and other products. Whatever the case, money managers just aren’t setting the price like they used to. And it could be that managers have changed their market activities, too, where other parts of the futures market are now cueing off (shorting) this possible difference. I honestly don’t know what it is, but I can safely point out where it is. Now with swap dealers apparently showing very, very strong conviction on the short side, oil prices can’t gain any traction beyond the $57 established by in all likelihood geopolitical risk.
Oil Short-Sellers Return as Doubts Loom on OPEC’s Horizon - Short-selling is rearing its head in the oil market again. After bullish bets on Brent crude hit a record and futures surged to two-year highs, hedge funds are pulling back with a sense that the rally reached its limit for now. Wagers on lower prices rose by the most since June as Middle East tensions took a backseat, while uncertainty looms over Saudi Arabia’s push to extend OPEC’s output curbs this month. "We’re at levels where the market appears to have crested," "Continuing to see supply draw-downs is probably what the next leg of the rally will be predicated on." Doubts over Russia’s willingness to go along with the Saudis, record production from America’s prolific shale fields and a worse outlook for demand from the International Energy Agency helped snap oil’s longest streak of weekly gains in a year. At the same time, concern over heightened geopolitical risks in the Middle East seems to have subsided, at least for now, "We haven’t seen more conflict," he said. "For prices to get a lot higher, you have to see a meaningful increase in disruptions -- and we haven’t." Hedge funds lowered their Brent net-long position -- the difference between bets on a price increase and wagers on a drop -- by 1 percent to 537,557 contracts in the week ended Nov. 14, according to data from ICE Futures Europe. Shorts surged 8.7 percent, while longs fell 0.1 percent. Meanwhile, the net-bullish position on West Texas Intermediate, the U.S. benchmark, rose 10 percent to 349,712 contracts over the same period, according to the Commodity Futures Trading Commission. The net-long position on benchmark U.S. gasoline rose 11 percent, and diesel net-longs rose 3.3 percent. But that optimism may be fading, too. WTI also fell from its recent highs, with American crude stockpiles rising by more than 4 million barrels in two weeks. Plus, there are real risks that OPEC may not be able to effectively extend cuts and will add to the overhang spurred by the U.S. shale surge,
Baker Hughes: US rig count jumps another 8 units to 915 -The US rig count climbed again this week with an 8-unit jump to 915 rigs working during the week ended Nov. 17, data from Baker Hughes indicate. Rigs targeting natural gas in the US gained 8 units to reach 177 while those drilling for oil remained unchanged at 738 units. Land rigs reached 893, up 5 units from a week ago. Rigs drilling offshore were up 3 units to 21, all of which were in the Gulf of Mexico. Among the major producing states, Texas gained 7 units to reach 449 rigs. Louisiana was up 4 units to 62. Ohio and Utah, at 30 and 12 units, respectively, were up 1 unit each. Four states were unchanged this week: Pennsylvania, 31; California, 14; West Virginia, 12; and Arkansas, 0. Six states were down 1 unit, namely Oklahoma, 122; New Mexico, 68; North Dakota, 46; Colorado, 36; Wyoming, 21; and Alaska, 5. Canada gained 5 units to 208. Oil-directed rigs climbed 1 unit to 109 and those rigs drilling for gas rose 4 units to 99.
Markets Shrug On Flat Oil Rig Count | OilPrice.com -- The number of oil and gas rigs in the United States rose again this week, this time by 8, according to Baker Hughes, ending a short-lived downward trend in weeks prior. The number of oil rigs stayed flat this week, while the number of gas rigs gained eight.The WTI and Brent benchmarks fell earlier in the week on a surprise increase in crude oil inventory reported by API and EIA, and probably the biggest catalyst this week, IEA’s downward revision for crude oil demand growth. Still, crude oil managed to rally on Friday before the data release. The total oil and gas rig count in the United States now stands at 915 rigs, up 327 rigs from the year prior, with the number of oil rigs standing at 738 versus 471 a year ago. The number of gas rigs in the US now stands at 177, up from 116 a year ago.Canada, too, saw an increase to oil and gas rigs of 5, with oil rigs climbing by 1 and gas rigs climbing by 4. By state, Texas was the big winner, adding 7 rigs. Louisiana was the runner up, adding 4 rigs. WTI was trading up on Friday 1.93 percent at $56.42 at 11:26am EST. Brent crude was trading up 1.45 percent at $62.25 at that time—both benchmarks up slightly from last week. The benchmarks climbed even higher closer to data release. Along with an increase to the number of active oil rigs, US crude oil production was up for the week ending November 10 at 9.645 million barrels per day—another new high for 2017 after reaching a high the week prior. At 7 minutes after the hour, both benchmarks had slipped on the data release, with WTI trading at $56.62, with Brent crude trading at $62.67.
Saudi energy minister: market to remain oversupplied by March 2018 (Reuters) - The world will still have a surplus of oil by end-March next year, Saudi Arabia’s energy minister said on Thursday, signaling a willingness to extend output cuts when OPEC meets at the end of November on whether to extend caps well into 2018. Khalid al-Falih also said he did not want oil prices to rise too fast and too soon to shock consumers, adding that the exit from production cuts would be gradual to make sure market reaction is smooth. “We need to recognize that by the end of March we’re not going to be at the level we want to be which is the five-year average, that means an extension of some sort,” he said, referring to inventory levels in the developed world. “We have gone over 50 percent in reducing excess inventories but that means we still have some excessive inventories that we need to drain,” he told journalists on the sidelines of the UN climate conference in Bonn, Germany. “We don’t want any spikes in price that shock the market. We don’t want any price movements that are unhealthy for demand. We don’t think we’ve seen any of that yet but that’s a potential especially if God forbid we have disruptions in any major country. We’re hopeful none of this will happen.” Asked about the most recent spike in oil prices to a two-year high this month he said, “I am not distracted by short-term gyrations in prices and I certainly don’t spend time looking at hedge funds and the flows into financial investment instruments.” Falih said it was too early to make an assessment on a possible extension to OPEC’s global oil output cuts now, but said Saudi Arabia favors making an extension decision at the next OPEC meeting at the end of the month.
Russian oil unsettled by talk of longer production cuts -- If Russia’s energy minister had hoped for a united front from the country’s oil executives on what to do about a potential extension to an agreement with Opec to cut global production, a high-profile meeting on Wednesday will have disappointed him. Representatives from Russia’s huge hydrocarbons industry walked out of the Ministry of Energy building in Moscow after a meeting with Alexander Novak, with no discernible resolution on whether Moscow should back an extension to the 11-month agreement, and obvious discontent among executives at talk of another potential year with their pumps at less than full throttle. “We need to continue discussing and monitoring, and have agreed to meet again in a week,” said Alexander Dyukov, head of Gazprom Neft. The original deal with Opec’s de facto leader Saudi Arabia, brokered by Mr Novak and Russian president Vladimir Putin, reduced oil production from participating countries by 1.8m barrels a day and helped push the price of benchmark Brent Crude above $60 a barrel this week for the first time in more than two years. In May, the agreement was then extended until March 2018.
Iraq Oil Revenue Not Enough For Sustainable Development - Oil revenues still are not high enough to allow the Iraqi government to fund the reconstruction of the country, according to Iraqi Prime Minister Haider Al-Abadi.“Oil prices are not at the required level to be used for sustainable development,” state TV quoted al-Abadi as saying during a press conference. Iraq proclaimed itself victorious earlier this year after a three-year, hard-fought war against the terrorist Islamic State.The victory freed up some money - but not enough - for reconstructing the nation after almost 15 years after the demise of dictator Saddam Hussain and the fall of his regime. The oil price crash of 2014 has made it difficult for fossil-fuel dependent countries to provide key government services to its citizens, and Iraq was not immune.In Iraq, years of financial mismanagement and domestic conflict exacerbated existing civil governance issues.Just over a month has passed since the Kurdish referendum, which resulted in a near-unanimous vote for the Kurdistan Regional Government to secede from Iraq.Baghdad has not accepted the results of the vote, moving instead to deploy its military to secure control of the Kirkuk oilfields, which, though located in northern Iraq, do not lie in areas legally allotted to the KRG.The political consequences of the referendum have played out in a recent deal with Iran. With the Kurdistan autonomous region heavily dependent on oil revenues, chances are the government will seek to come to a mutually beneficial agreement with the central government in Baghdad. Yesterday, the region’s Prime Minister, Nechirvan Barzani acknowledged the adverse effect that the Iraqi offensive has had on the region’s oil income, saying it had fallen to less than 50 percent of what it used to be before October 16, when the offensive was launched.
What are the Saudis really up to with Lebanese 'hostage' Hariri? - The talk of the town in Beirut is that former Prime Minister Saad al-Hariri is being “held against his will” by Saudi authorities and prevented from returning home to Lebanon. The bizarre story has gone viral on social media networks and around the cafes of Beirut, having first surfaced last week on the front page of the pro-Hezbollah daily al-Akhbar, which described him as a “hostage.” This was shortly after Hariri had announced his resignation as prime minister – in Riyadh, rather than Beirut – on the very same day that the Crown Prince of Saudi Arabia, Mohammad Bin Salman, arrested 11 powerful princes in a massive crackdown against opponents, critics, and doubters, all under the pretext of “fighting corruption.”The relationship between the Crown Prince – commonly referred to as MBS – and Hariri was lukewarm, to say the least. For one thing, Mohammad Bin Salman considered the Lebanese leader too soft on Hezbollah. That doesn’t merit restricting his movement, though, let alone placing him under arrest for two nights, as The Washington Post has claimed. Some are speculating that MBS wants Hariri replaced by his low-profile 51-year old brother Bahaa, a successful businessman with close ties to the kingdom which he inherited from their father Rafik al-Hariri, a tycoon-turned-politician who was assassinated back in February 2005. According to Beiruti bazaar gossip, the Saudis want to install Bahaa as head of Lebanon’s Future Movement, which Saad still leads, and then as prime minister. That story is difficult to believe, however, for a variety of reasons. One is simply that Bahaa al-Hariri was, and remains, completely uninterested in politics. Although he was the eldest son of the slain Rafik, he willingly relinquished the family’s political legacy to his younger brother, seeing the job as too costly, dangerous and dull.
It looks like Saudi Arabia removed Lebanon's prime minister — and it may be the first move in starting a war - Saudi Arabia's alleged push to remove Lebanese Prime Minister Saad al-Hariri may spark a war in the Middle East. "The Saudis appear to have decided that the best way to confront Iran is to start in Lebanon," a European diplomat recently told Reuters. Hariri resigned as Lebanon's prime minister during a trip to Saudi Arabia last weekend and multiple reports, as well as public statements from leading Lebanese politicians, indicate that he is being held in the kingdom against his will. The prime minister is politically supported by Saudi Arabia and is part of a joint government that includes Hezbollah, the Iran-backed militant group. He has not been seen back in his home country since his resignation. Experts believe that by forcing Hariri's resignation, Saudi Arabia could effectively rebrand Lebanon as an "Iranian outpost" dominated by Hezbollah. This may be the first move in a series of actions ending with armed conflict between Israel and Hezbollah — and could curb Iran's influence in the region. "The removal of Hariri is, in effect, a kind of trap for Hizballah, daring it to fully reveal its power and dominance in Lebanon and take complete responsibility for the Lebanese state which, from a Saudi perspective, it effectively controls anyway," Hussein Ibish, a senior resident scholar at the Arab Gulf States Institute in Washington, wrote in a recent column on the Saudi-Iranian rivalry in Lebanon. "The next step would be for Hizballah and Lebanon itself to suffer the consequences of being completely identified with what is widely considered to be an international terrorist organization," Ibish writes.
French foreign minister to meet Hariri as Lebanon crisis escalates - Lebanon's president accused Saudi Arabia on Wednesday of detaining the Lebanese ex-prime minister, in an escalation of the crisis that followed Saad Hariri's surprise resignation from the kingdom almost two weeks ago. In comments published on the official Twitter account of the president, Michel Aoun said nothing justifies that Hariri has not returned home so far. "We consider him detained, arrested" in violation of international laws, Aoun said. It was the first time Aoun describes Hariri as a detainee. He had previously only questioned the "mysterious" circumstances under which Hariri resigned. The rhetoric further deepens the crisis with Saudi Arabia, which is a backer of Hariri, a dual Saudi-Lebanese national. Hariri resigned as Lebanon’s prime minister 11 days ago in a video broadcast from Saudi Arabia and has yet to return home. Saudi Arabia denies holding Hariri against his will. France's Foreign Minister Jean-Yves Le Drian is arriving in Saudi Arabia on Wednesday to meet with Hariri and Saudi officials, a diplomatic source said. Le Drian will meet with powerful Crown Prince Mohammed bin Salman in the capital Riyadh before holding talks with Hariri on Thursday, the aide told a foreign ministry briefing.
If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention - While turbulent during the best of times, gigantic waves of change are now sweeping across the Middle East. The magnitude is such that the impact on the global price of oil, as well as world markets, is likely to be enormous.A dramatic geo-political realignment by Saudi Arabia is in full swing this month. It’s upending many decades of established strategic relationships among the world's superpowers and, in particular, is throwing the Middle East into turmoil.So much is currently in flux, especially in Saudi Arabia, that nearly anything can happen next. Which is precisely why this volatile situation should command our focused attention at this time.The main elements currently in play are these:
- A sudden and intense purging of powerful Saudi insiders (arrests, deaths, & asset seizures)
- Huge changes in domestic policy and strategy
- A shift away from the US in all respects (politically, financially and militarily)
- Deepening ties to China
- A surprising turn towards Russia (economically and militarily)
- Increasing cooperation and alignment with Israel (the enemy of my enemy is my friend?)
Taken together, this is tectonic change happening at blazing speed.That it's receiving too little attention in the US press given the implications, is a tip off as to just how big a deal this is -- as we're all familiar by now with how the greater the actual relevance and importance of a development, the less press coverage it receives. This is not a direct conspiracy; it's just what happens when your press becomes an organ of the state and other powerful interests. Like a dog trained with daily rewards and punishments, after a while the press needs no further instruction on the house rules.
EXCLUSIVE: Senior Saudi figures tortured and beaten in purge - Some senior figures detained in last Saturday's purge in Saudi Arabia were beaten and tortured so badly during their arrest or subsequent interrogations that they required hospital treatment, Middle East Eye can reveal.People inside the royal court also told MEE that the scale of the crackdown, which has brought new arrests each day, is much bigger than Saudi authorities have admitted, with more than 500 people detained and double that number questioned.Members of the royal family, government ministers and business tycoons were caught up in the sudden wave of arrests orchestrated by Crown Prince Mohammed bin Salman, known as MBS, under the banner of an anti-corruption drive. Some, but not all, of the top figures arrested were singled out for the most brutal treatment, suffering wounds to the body sustained by classic torture methods. There are no wounds to their faces, so they will show no physical signs of their ordeal when they next appear in public. Some detainees were tortured to reveal details of their bank accounts. MEE is unable to report specific details about the abuse they suffered in order to protect the anonymity of its sources. The purge, which follows an earlier roundup of Muslim clerics, writers, economists and public figures, is creating panic in Riyadh, the Saudi capital, particularly among those associated with the old regime of King Abdullah, who died in 2015, with power then passing to his half-brother, King Salman. Many fear the primary purpose of the crackdown is a move by MBS to knock out all rivals both inside and outside the House of Saud before he replaces his 81-year-old father. On Wednesday night, seven princes were released from the Ritz-Carlton Hotel in Riyadh, where they had been held since Saturday. The top royals have been moved to the king’s palace, sources told MEE. The crown prince’s cousin, Mohammed bin Nayef, who continues be under house arrest, has had his assets frozen, the Reuters news agency reported. Sons of Sultan bin Abdulaziz have also been arrested and had their assets frozen. One of the most famous is Prince Bandar bin Sultan, a former Saudi ambassador to Washington and confidant of former US president George W Bush. Saudi authorities said that one of the corruption cases they are looking at is the al-Yamamah arms deal, in which Bandar was involved. But Bandar himself is not under arrest and living in Jeddah, a source told MEE.
Saudi Prince's Revolution Is the Real Arab Spring - When Crown Prince Mohammed bin Salman of Saudi Arabia rounded up 500-head of royals and billionaires last weekend and tossed them into luxury confinement, it was more than just a power grab by a young man in a hurry. It was a revolution. But of what kind? Faisal J. Abbas, the editor of the Arab News, the English-language daily that normally speaks for the government, provided an answer of sorts from the Saudi perspective. “With all due respect to the pundits out there, 'experts' analyzing Saudi Arabia in previous decades had it too easy," he wrote on Tuesday. "We need to understand that the days when things took too long to happen -- if they happened at all -- are forever gone. The exciting part is that thanks to the ambitious reforms being implemented … we are finally living in a country where anything can happen.” Muhammed, known as MBS, is 32 years old. He looks like a storybook Arabian prince and he talks like a progressive. He says he plans to liberalize and modernize his sclerotic society, expand the civil rights of women, reduce the economic power of the Saudi fossil fuel industry, and loosen the grip of the 5,000-member royal cousins club that has bled the country dry for generations.Not only that: The prince also promises to transform Saudi Islam into a more tolerant brand of religion that does not fund extremist mosques in the West or underwrite jihadists in the Middle East. Isn’t this the Arab leader we have been waiting for?Yet so far, there doesn’t seem to be much enthusiasm in world capitals. With the exception of U.S. President Donald Trump, who has tweeted his support, events in Riyadh have elicited mostly silence.This is understandable. Sometimes bright young Arab revolutionaries turn out to be Anwar Sadat, whose radical vision brought peace between Egypt and Israel. More often, they are tyrannical like Gamal Abdul Nasser or murderous like Osama Bin Laden or hapless like the Egyptian yuppies in Cairo’s Tahrir Square in 2010. L et's hope the dismal outcomes of that so-called Arab Spring have taught gullible Westerners not to engage in wishful thinking.
The Saudi purge isn't just a power grab -- It makes sense to be cynical about Crown Prince Mohammed bin Salman’s ostensible crackdown on corruption in Saudi Arabia. Among the 11 princes, 4 ministers, and dozens of well-known businessmen arrested were some of the 32-year-old’s last potential rivals to the Saudi throne. The move also smacks of an asset snatch. Police nabbed 3 of the Arab world’s 10 richest men, including investor Prince Alwaleed bin Talal, the billionaire best known for rescuing Citicorp in 1991 and making big bets on Apple Inc. and 21st Century Fox Inc. But was it only a Machiavellian power play? Or is this the start of a dramatic, go-for-broke attempt to transform a country that’s resisted change for decades? Prince Mohammed seems to be playing the equally ruthless roles of autocrat and reformer. The millennial has been outspoken about his bold plans to modernize Saudi society and wean the kingdom from fossil fuel. Now, Prince Mohammed has locked up globe-trotting tycoons and other dynastic rivals, sending shock waves across the desert and around the world. Since Saudi Arabia’s founding in 1932 by his grandfather, Abdulaziz Al Saud, successive kings have sought consensus among the family’s thousands of princes, balancing religious, princely, and tribal factions to maintain stability in the world’s largest oil supplier. Decisions were made at a glacial pace, often capped with generous payouts for anyone left unhappy. Prince Mohammed has smashed that conservative status quo in an act, he no doubt believes, of creative destruction. This is a man of dead-certain belief in himself, who told this magazine in a long, autobiographical interview in April 2016 that his childhood experiences among princes and potentates were more valuable and formative than Steve Jobs’s, Mark Zuckerberg’s, and Bill Gates’s. So, he wondered aloud, “if I work according to their methods, what will I create?” Now we know his disruptive potential. The prince’s unprecedented arrest of a who’s who of Saudi society is a first stab at fulfilling his vow to hold the corrupt accountable. “I confirm to you, no one will survive in a corruption case—whoever he is, even if he’s a prince or a minister,” Prince Mohammed said in a televised interview in May. The vow has now become a Twitter sensation among Saudis under the age of 30, who make up 70 percent of the population, the demographic bulge the prince has made his base. They’re still plenty skeptical of Prince Mohammed and his father the king, who recently visited Moscow with 1,500 retainers, his own carpets, and a golden escalator for his Boeing 747.
How deep ties with Pakistan’s military helped Saudi purge - Pakistan has traditionally maintained that its bilateral relationship with the Kingdom of Saudi Arabia is its “most important diplomatic relationship.” Developments in Saudi Arabia last week appear to have hinged to a significant degree on the close relationship that the Kingdom shares with the Pakistani military. Besides both being members of the Organization of Islamic Cooperation (OIC), the two have long maintained a strong military relationship. Pakistani military personnel frequently serve in Saudi Arabia and its last army chief, General Raheel Sharif, now heads a 41-nation Islamic army coalition based out of Riyadh. Sharif’s accession was seen as Islamabad picking sides with Saudi Arabia against Iran. On October 26, the Pakistani Army concluded Al-Saman 6, a three-week military exercise with the Saudi Royal Land Forces. Pakistan has also been keen to sell arms to Saudi Arabia and has enjoyed Saudi support while developing its nuclear weapons program. On October 16, Pakistan Army Chief Gen Qamar Javed Bajwa met with Saudi Crown Prince Mohammed bin Salman, the man behind the purge against senior Saudi members of the royal family, on the sidelines of an ‘anti-terror’ conference organized by the Saudi Defense Ministry in Riyadh. General Bajwa also visited Tehran on November 6, and, according to reliable diplomatic sources, discussed cooperation on missile technology and the visit of Iranian scientists to SUPARCO, Pakistan’s official space agency. The meeting with Crown Prince Salman came a little over two months after General Bajwa hosted Saudi Deputy Defense Minister Mohammad Bin Abdullah Al-Aysh in Rawalpindi, where Saudi domestic security was discussed in detail. “Of course, there was no hunch of the arrests and the political upheaval that we’ve seen over the past week or so back then, but in recent months there has been a clear urgency in Riyadh with regards to Pakistan’s involvement in its security,” a senior military official told Asia Times on condition of strict anonymity.
What the Saudi Arrests Mean for the Kingdom's Oil Policy | Rigzone: - Gadfly: We may never fully know what lies behind Crown Prince Mohammed bin Salman's decision to arrest more than 200 Saudi citizens, including 11 princes and four government ministers, on corruption charges, just as tensions with Iran are escalating.What we do know is that his move simultaneously boosted the oil price and undermined the attractiveness of Aramco to potential foreign investors. But it would be a mistake to conclude that this political decision also heralds a shift in Saudi oil policy, or permanently damages the prospects of the state oil company's IPO. Crude prices always rise in response to unrest in the Middle East, even when the countries involved produce little or no oil. That it has done so now, in the wake of the arrests in the region's biggest producer and the threats against Lebanon and Iran in response to a missile launched from Yemen, should come as no surprise.The jump, which took oil prices to their highest level in more than two years immediately after the arrests, might be expected to boost support for a pause before OPEC and its friends decide whether to extend their current deal on production cuts until the end of 2018. There are some, including Russian President Vladimir Putin, who have said that it is too early to decide what should be done beyond the deal's current expiry in March. But dissenting voices are likely to fade into the background when the groups meet in Vienna on Nov. 30. The output cuts do not target a specific oil price -- as Saudi oil minister Khalid Al-Falih said in June, the aim is to reduce excess inventories. That problem has not yet been resolved.
Saudi crackdown will not hit investments: energy minister Falih (Reuters) - Saudi Arabia’s corruption investigations are linked to a just few individuals and will not hinder investments in the kingdom, its energy minister said on Thursday. Khalid al Falih said the crackdown was way overdue and would also not have any impact on plans to float shares in oil giant Saudi Aramco. “Everybody understands that this is a limited, domestic affair that the government is simply cleaning house,” he said on the sidelines of the U.N. climate conference in Bonn, Germany. Saudi Arabia’s future king has tightened his grip on power through an anti-corruption purge by arresting royals, ministers and investors including billionaire Alwaleed bin Talal who is one of the kingdom’s most prominent businessmen. The move by Prince Mohammed bin Salman against Saudi’s political and business elite also targeted the head of the National Guard, Prince Miteb bin Abdullah, who was detained and replaced as minister of the powerful National Guard by Prince Khaled bin Ayyaf. The energy minister said many foreign investors who had been have been doing business in Saudi Arabia for decades “will tell you that they have not seen corruption in their interactions with the Saudi government or with the Saudi entities”. “It (the crackdown) has no impact on foreign direct investment. It has no impact whatsoever on the kingdom’s openness, capital flows and our wide open investment environment,” he added. Saudi Arabia’s plan to float around 5 percent of Aramco in an initial public offering (IPO) is a centerpiece of Vision 2030, a wide-ranging reform plan to diversify the Saudi economy beyond oil. Falih said a decision is yet to be made on where the listing would be made.
Saudi Arabia Offers Arrested Royals A Deal: Your Freedom For Lots Of Cash -- As we noted shortly after the Crown Prince’s purge of potential rivals within Saudi Arabia’s sprawling ruling family, while the dozens of arrests were made under the pretext of an "anti-corruption crackdown", Mohammed bin Salman’s ulterior motive was something else entirely: Replenishing the Kingdom’s depleted foreign reserves, which have been hammered for the past three years by low oil prices, with some estimating that the current purge could potentially bring in up to $800 billion in proceeds. Furthermore, the geopolitical turmoil unleashed by the unprecedented crackdown helped push oil prices higher, creating an ancillary benefit for both the kingdom’s rulers and the upcoming IPO of Aramco. And, in the latest confirmation that the crackdown was all about cash, the Financial Times reports today that the Saudi government has offered the new occupants of the Riyadh Ritz-Carlton a way out.... and it’s going to cost them: In some cases, as much as 70% of their net worth.Saudi authorities are negotiating settlements with princes and businessmen held over allegations of corruption, offering deals for the detainees to pay for their freedom, people briefed on the discussions say.In some cases the government is seeking to appropriate as much as 70 per cent of suspects’ wealth, two of the people said, in a bid to channel hundreds of billions of dollars into depleted state coffers.The arrangements, which have already seen some assets and funds handed over to the state, provide an insight into the strategy behind Crown Prince Mohammed bin Salman’s dramatic corruption purge. The crackdown has led to the detention of hundreds of royals, ministers, officals and the country’s richest oligarchs including Prince Alwaleed bin Talal, the billionaire, Waleed al-Ibrahim, the founder of Middle East Broadcasting Center, which owns Al Arabiya, the Saudi satellite television channel, and Bakr bin Laden, chairman of the Saudi Binladin construction group and brother of Osama bin Laden.
Saudi 'Corruption' Probe Widens: Dozens Of Military Officials Arrested --After jailing dozens of members of the royal family, and extorting numerous prominent businessmen, 32-year-old Saudi prince Mohammed bin Salman has widened his so-called 'corruption' probe further still. The Wall Street Journal reports that at least two dozen military officers, including multiple commanders, recently have been rounded up in connection to the Saudi government’s sweeping corruption investigation, according to two senior advisers to the Saudi government.Additionally, several prominent businessmen also were taken in by Saudi authorities in recent days.A number of businessmen including Loai Nasser, Mansour al-Balawi, Zuhair Fayez and Abdulrahman Fakieh also were rounded up in recent days, the people said.Attempts to reach the businessmen or their associates were unsuccessful.It isn’t clear if those people are all accused of wrongdoing, or whether some of them have been called in as witnesses. But their detainment signals an intensifying high-stakes campaign spearheaded by Saudi Arabia’s 32-year-old crown prince, Mohammed bin Salman.There appear to be three scenarios behind MbS' decision to go after the military:
- 1) They are corrupt and the entire process is all above board and he is doing the right thing by cleaning house;
- 2) They are wealthy and thus capable of being extorted (a cost of being free) to add to the nation's coffers; or
- 3) There is a looming military coup and by cutting off the head, he hopes to quell the uprising.
UN: Yemen facing massive famine if blockade not lifted - Al Jazeera: Millions of people will die in Yemen, in what will be the world's worst famine crisis in decades, unless a Saudi-led military coalition ends a devastating blockade and allows aid into the country, the United Nations has warned. The Saudi-led alliance fighting Houthi rebels in Yemen tightened its air, land and sea blockade of the country after a ballistic missile was fired on Saturday towards the Saudi capital, Riyadh. Since then, the country's already inflated food and fuel prices have skyrocketed, while flights delivering much-needed humanitarian aid have been prevented from landing. After briefing the UN Security Council on Wednesday, Mark Lowcock, the UN's humanitarian chief, said the move will worsen a "catastrophic" humanitarian crisis that has pushed millions to the brink of famine and has caused a mass cholera epidemic. "I have told the Council that unless those measures are lifted ... there will be a famine in Yemen," Lowcock, who visited Yemen late in October, told reporters on Wednesday. WATCH: 'Situation is catastrophic' as Saudi tightens blockade on Yemen (1:59) "It will not be like the famine that we saw in South Sudan earlier in the year, where tens of thousands of people were affected. It will not be like the famine which cost 250,000 people their lives in Somalia in 2011," he added. "It will be the largest famine the world has seen in many decades, with millions of victims."
Houthi Rebels Threaten To Sink Saudi Battleships And Oil Tankers -- Houthi rebels in civil-war torn Yemen have threatened to start attacking oil tankers and warships sailing under Saudi coalition flag, unless Riyadh lifts its naval blockade of Yemen which threatens the lives of millions in the war-torn country. The threat of a military response to the ongoing blockade was made after Houthi leader Maj. Gen. Yousef al-Madani met leaders of the naval, coastal defense and coast guard forces Saturday. On that day, Houthi leader Abdel-Malek al-Houthi posted a message on Facebook assuring that “international navigation will remain safe as it was before,” making clear that “only those who attack our country” will be targeted. A military spokesman for the Houthi rebels, Gen. Sharaf Ghalib Luqman, said that “systematic crimes of aggression” and the “closure of ports” compels the Houthi forces “to target all sources of funding” of the aggressor. He added the country is ready to “respond to the escalation of the Saudi-US aggression promptly.” The Saudi-led military coalition announced last week that it was temporarily shutting all of Yemen’s land border crossings as well as its air and sea ports in response to a ballistic missile that targeted Riyadh on November 4. The kingdom accused Houthis of launching an Iran-supplied ballistic missile at the Saudi capital last weekend, and responded with bombing raids on the Yemeni capital, Sana’a. Iran has denied allegations that it supplies weapons to the Houthis, but concedes it backs the rebels’ cause. The Houthis, which are loyal to Yemen’s former president, are currently in control of most of Yemen, despite the two-year war with the Saudi Arabian-led coalition that began in defense of the exiled incumbent, Abd-Rabbu Mansour Hadi.
Saudi Propaganda and the Starvation of Yemen - Samuel Oakford reports that a U.N. panel finds no evidence to support the Saudi-led coalition’s claims about missile transfers to the Houthis and questions the justification for tightening the blockade: A U.N. panel of experts found Saudi Arabia is purposefully obstructing the delivery of humanitarian aid into Yemen and called into question its public rationale for a blockade that could push millions into famine. In the assessment, made in a confidential brief and sent to diplomats on November 10, members of the Security-Council appointed panel said they had seen no evidence to support Saudi Arabia’s claims that short-range ballistic missiles have been transferred to Yemeni rebels in violation of Security Council resolutions. The coalition would have no right to inflict collective punishment on the civilian population even if their claim about the missile fired at Riyadh were true. Starving the population in retribution would be a criminal and disproportionate response to a missile launch in any case, but it is all the more outrageous when the pretext for doing so is so shaky. According to this panel, there is also no evidence to support the coalition’s missile claim. Since the Saudis and their allies have been exaggerating the extent of Iran’s involvement in Yemen from the start, the claim that the missile was of Iranian origin was always very questionable. It is a measure of how reflexively the U.S. supports the coalition that our government endorsed their story without question.
Saudi Arabia’s Incompetence Would Be Comical If It Weren’t Killing So Many People - Saudi Arabia should be a very powerful country. Endowed with one-fifth of the world’s proven oil reserves, close ties with powerful Western states, access to endless amounts of U.S. weaponry, the support of global corporate interests, and the religio-cultural cachet afforded by stewardship of Muslim holy sites, the kingdom should by all accounts be an undisputed regional powerhouse. Suffice to say, this is not the case, as a quick glance at the Middle East today reveals. Saudi foreign policy is floundering in a way that would be comical if it didn’t involve so much human devastation. Under the newly minted leadership of Mohammed bin Salman, the Saudi government is stuck losing every proxy war that it is involved in. It has failed to bring their diminutive Gulf rival Qatar to heel and most recently humiliated its own ally, the Lebanese Prime Minister Saad Hariri, in what appears to be a tragicomic attempt to destabilize the Lebanese government. Saudi Arabia is often criticized for being the seedbed for radical Islam, but this might be just a symptom of a deeper problem: the radical incompetence of its leadership. Since the 1975 assassination of King Faisal bin Abdulaziz — the last ruler widely seen to have promoted a positive image of the country — Saudi Arabia’s foreign policy has been catastrophically adrift. Despite spending exorbitant sums of money to spread its influence, the kingdom’s leaders appear more and more besieged — at war not just with Iran and its allies, but with Qatar, the Muslim Brotherhood, and internal rivals.
Arab League To Hold Urgent Meeting On Iran As Saudis Mobilize F-15 Fighter Jets - The Arab League is set to hold an emergency meeting on Iran at Saudi Arabia's request, thisaccording to Reuters and various regional sources, at a moment when Saudi fighter jets may be mobilizing for war in an attempted show of force. Egypt-based Ahram Online also reports further that the meeting will discuss "Iranian interference" in the region at League headquarters in Cairo, and other early unconfirmed reports indicate the meeting could come as early as next Sunday.News of the Arab League extraordinary session comes as tensions are at breaking point as regional powers - especially Saudi Arabia and Israel - talk war against perceived Iranian expansion and domination in the Middle East. Meanwhile, The Daily Star, citing the Baghdad Post, claims that Saudi Arabia has scrambled its air force for strikes in Lebanon: "Reports now state the Royal Saudi Air Force has placed its warplanes on alert to launch strikes as the region sits on a knife edge." The report accompanies undated footage of Saudi F-15's in aerial maneuvers over what is presumably a Saudi airfield.The Daily Star adds the following accompanying the video:The kingdom has mobilized its F-15 fighter jet fleet to launch a military operation against the Iranian-backed terrorist militia of Hezbollah in Lebanon, regional news website The Baghdad Post reports.Saudi Arabia previously accused both Lebanon and Iran of committing an act of wars against it after rebels fired a missile at the King Khalid International Airport in the kingdo m's capital of Riyadh.
Revealed – Saudis Plan To Give Up Palestine – For War On Iran - The tyrants of Saudi Arabia developed a plan that sells away Palestine. They see this as necessary to get U.S. support for their fanatic campaign against their perceived enemy Iran. An internal Saudi memorandum, leaked to the Lebanese paper Al-Akhbar, reveals its major elements. (Note: The genuineness of the memo has not been confirmed. In theory it could be a "plant" by some other party. But Al-Akhbar has so far an excellent record of publishing genuine leaks and I trust its editors' judgement.) According to the memo the Saudis are ready to give up on the Palestinian right of return. They forfeit Palestinian sovereignty over Jerusalem and no longer insist of the status of a full state for the Palestinians. In return they ask for a U.S.-Saudi-Israeli (military) alliance against their perceived enemy on the eastern side of the Persian Gulf. Negotiations on the issue were held between the Saudis and the Zionist under the aegis of the United States. Netanyahu and Trump’s "shared personal assistant, wunderkind Jared Kushner", is the point men in these negotiations. He made at least three trips to Saudi Arabia this year, the last one very recently. The Saudi operations over the last month, against the internal opposition to the Salman clan as well as against Hizbullah in Lebanon, have to be seen in the context and as preparation of the larger plan.
War between Iran and Saudi Arabia could radically transform the world’s oil markets - A fire erupted at an oil pipeline connecting Bahrain and Saudi Arabia, and the two Arab allies are pointing the finger at Tehran. The oil pipeline resumed operations in a matter of hours, but the war of words is heating up. Bahrain’s Foreign Minister Khalid Al-Khalifa said on Twitter that the “attempt to bomb the Saudi-Bahraini oil pipeline is a dangerous Iranian escalation that aims to scare citizens and hurt the global oil industry.” A spokesperson for Iran fired back, saying that the Bahrainis “need to know that the era for lies and childish finger-pointing is over.” The incident comes only days after a missile was fired from Yemen into Saudi Arabia, which the Saudis pinned on Iran. Meanwhile, a web of intrigue has enveloped Lebanon, the small country in which all the regional powers hope to exert their influence. Earlier this month, Lebanese Prime Minister Saad al-Hariri resigned and decamped to Saudi Arabia, blaming Iran and Hezbollah for putting his life and his family’s safety at risk. The incident comes only days after a missile was fired from Yemen into Saudi Arabia, which the Saudis pinned on Iran. The bizarre events, many believe, are part of a broader proxy battle between Iran and Saudi Arabia—a conflict that only seems to be heating up. Crown Prince Mohammad bin Salman’s internal purge of rival members of the Saudi royal family has also raised tensions. Middle East conflicts tend to send oil prices in one direction: up. In recent weeks and months, we’ve seen a return of Middle East geopolitical tension, such as the Kurdish independence referendum and subsequent seizure of Kirkuk oil fields by the Iraqi government. To date, these events have added some upward pressure on oil prices, but the markets have largely shrugged off those flashpoints. A Saudi-Iranian struggle is another matter.
Xi Jinping Pledges To "Strengthen Relationship" Between Saudi Arabia And China -- In what can only be described as a masterful play to entice Saudi Arabia to list shares of Aramco in Hong Kong (assuming the kingdom follows through with the listing, which is reportedly in jeopardy) Chinese state media reported Friday that Chinese President Xi Jinping pledged to strengthen the relationship between China and Saudi Arabia as the latter tries to reform its economy. According to the South China Morning Post, Xi vowed to strengthen cooperation between the two states at a time when the Middle Eastern kingdom is facing a political shake-up at home, and heightened tensions with Lebanon and Iran. Xi’s vow of friendship came with the crucial qualifier that the relationship between the two countries wouldn’t be affected by shifting international circumstances. No matter how the international and regional situation changed, China’s determination to deepen strategic cooperation with Saudi Arabia would not change, President Xi Jinping told Saudi King Salman in a telephone conversation, according to a report by China’s state broadcaster CCTV. “China supports Saudi in its efforts to safeguard its sovereignty and achieve greater development,” Xi was quoted as saying. Of course, that’s an implicit threat that China might come to KSA’s aide if the simmering hostilities between the kingdom and Iran explode out into a military conflict between the two regional rivals. However, the SCMP also stresses that China has a strong relationship with Iran as well. Hong Kong is reportedly still in consideration to host the Aramco IPO.
How Long can Putin Dance with both Riyadh and Tehran? - Unlike US President Donald Trump, who openly shares Saudi Arabia’s hostility towards Iran, Russian President Vladimir Putin has sought to avoid taking sides in the growing Saudi-Iranian dispute. Indeed, the recent meeting between Putin and Saudi King Salman bin Abdulaziz Al Saud in Moscow was quickly followed by Putin’s visit to Tehran, where he met with Iranian Supreme Leader Ayatollah Ali Khamenei and President Hassan Rohani. Russia clearly is seeking good relations with both countries despite their antagonism towards each other. What is Putin’s objective? The most basic answer is that Russia values and needs cooperation with both Tehran and Riyadh. In Syria, Russia and Iran are very much co-dependent on each other in their effort to prop up the Assad regime and defeat its opponents. Moscow needs Iran and its Shia militia allies to supply the ground forces that Russia does not want to deploy to Syria just as much as Tehran needs Russia’s capable combat air support. At the same time, Saudi-Russian cooperation in restraining oil production is crucial for meeting Putin’s need to prop up oil prices to support Russia’s stagnant economy. Putin is heavily dependent on petroleum exports for funding his ambitious arms build-up plans and for helping him maintain internal stability. Putin hopes to increase Russian exports to and investment from Saudi Arabia to alleviate the economic pressure Moscow faces because of Western economic sanctions related to his policies towards Ukraine. In other words, Putin is seeking good relations with both Tehran and Riyadh at the same time because Russia needs them. Saudi-Iranian mutual hostility provides certain opportunities for Moscow. While neither Riyadh nor Tehran appreciates Moscow’s cooperating with the other, Putin understands that their mutual antagonism is so great that neither can afford not to cooperate with Moscow. If anything, Saudi-Iranian hostility motivates both Riyadh and Tehran to increase cooperation with Moscow to project the image that Russia really is on their side — a competition that Putin is most willing to exploit.
The Arctic Silk Road: A Huge Leap Forward For China And Russia - The Silk Road, renamed the Belt and Road Initiative (BRI), is developing infrastructure along land and sea trade routes. However, little is known about China’s initiative in the Arctic Circle, which represents a new route that Beijing is now able to develop thanks to technology together with the strategic partnership with Russia. Involving about 65 countries and affecting 4.4 billion people, constituting thirty percent of the world's GDP, together with a total investment from Beijing that could surpass a trillion dollars, this is an immense project that requires a lot of imagination to grasp the intentions of the Chinese leadership. With a host of projects already in progress, and some almost completed (the Sino-Pakistan Corridor known as CPEC is archetypical), the overland and maritime routes are developing side by side. Plenty of ink has been used detailing Beijing's intentions regarding the East-West connections of the super Eurasian continent. Pipelines, railway lines, fiber-optic cables, telecommunications infrastructure and highways dominate discussions, together with talks about costs, feasibility studies, the question of security, and the return on investment. The land Silk Road is certainly an imposing challenge that is not just commercial in nature but sets the foundation for greater cultural and social integration between neighbouring countries. It is a project that in the long term aims to blend together the Eurasian continent and overcome the contradictions contained therein through win-win cooperation and economic development. The maritime route is a more structured project, tied mainly to two intrinsic needs of the People's Republic of China. The first is commercial and concerns the need for Beijing to ship its goods along established routes, creating ports and supply facilities along the way. The objective is to increase profits from cargo ships, especially when they return to China filled with goods, as well as to create new global sorting centers at ports set up along the maritime silk road. Important examples can be found in Pakistan with the development of the Gwadar port. The first phase was completed in 2006, and the second has been in progress since 2007, though the port was inaugurated in November 2016 and has been operational since. The project should be completed in the coming decades, with potentially 45 anchorage points, drainage of the approaching canal to about 20 meters, and a total trade turnover of over 400 million tonnes. Other major maritime silk-route destinations include Venice and Athens, with the port of Piraeus already owned by COSCO of China for many years, a company that specializes in port activities and the integration of harbours along the maritime silk road based on the model of the Gwadar port.
Silk Road is Soft Power for Expanding China - While Washington is seeking a pause in the rapid growth of its international trade, the rest of the world is moving full speed ahead. There is no better example than the fast developing New Silk Road, China’s vast project to facilitate its trade with Europe and connect Central Asia to the world economy. At a recent conference in Washington hosted by the Eurasia Center, speakers reported all sorts of information about the project. Already since 2013 freight trains go from China’s mid-pacific coast to Poland in 12 days, less than half the time for cargo ships to Western Europe and much faster for inland Chinese factories such as major electronics ones, such as the American Hewlett Packard in Chongqing. It has opened up a new central Asian market for Polish agricultural exports. Even Italian wines and German cars are now going by rail to Asia. Train traffic has more than doubled during the last year to some 45-50 trains per month. Traffic will take even fewer days if the Chinese region follows through with eventual plans for high-speed rail connections. Businessweek’s China-sponsored “Focus Report” states that 32 Chinese cities now have 52 China-Europe rail lines connecting to 12 European countries. More importantly, it is facilitating trade between central Asian nations as well as with the outside world. The silk road is a network of railroads, pipelines, highways, and ports bringing all of Central Asia—even including Turkey, Iran and the “stans”—into close commercial contact with China as well as among themselves. Many of the projects are gaining funding from China’s Asian Infrastructure Development Bank (AIIB). The European Bank for Reconstruction and Development’s Michell Small, director of its office in North America, said that it had already funded some $13 billion of projects. She said that the bank also offers help for American investors with projects in the region. . Firouz Rooyani of Tetra Tech in California discussed his company’s energy projects and explained how the World Bank’s “Doing Business Index” had great influence encouraging central Asian nations to modernize and rationalize their bureaucratic, formerly stifling government ministries.
ASEAN shuns mention of China’s new islands, arbitration loss - WaPo — Southeast Asian nations avoided mention Thursday of China’s construction of islands in the South China Sea and a U.N.-linked arbitration ruling that invalidated Beijing’s claims in the disputed waters in the latest show of China’s regional clout.President Rodrigo Duterte, speaking on behalf of fellow heads of state of the Association of Southeast Asian Nations, also expectedly skirted any expression of alarm over serious human rights concerns in the region, including the plight of Rohingya Muslims in Myanmar and his deadly anti-drug campaign in a statement following their annual summit Monday in Manila.Such statements have been made public shortly after the annual gatherings of leaders of the 10-nation bloc but there was no immediate explanation for the three-day delay, which drew the attention of some Manila-based diplomats. The few instances of delays in the past were caused by differences over wording on long-thorny issues, like the territorial rifts.China, which wields considerable influence on ASEAN, has steadfastly opposed criticism of its artificial islands, where it has reportedly installed a missile defense system despite widespread concern, including by the United States, Japan and Australia.Duterte, who took office last year and assumed ASEAN’s rotational chairmanship this year, has openly tried to court China’s friendship, trade, investment and infrastructure financing. He has toned down sharp rebuke of China’s assertive actions in the strategic waterway, one of the world’s busiest, and refused to immediately seek Chinese compliance with an arbitration ruling last year that invalidated its vast claims in the South China Sea on historical grounds.His rapprochement turned the Philippines from being one of Beijing’s sharpest critics in the disputed sea. In the ASEAN statement, Duterte repeated previous calls for a peaceful resolution of the disputes, adherence to the rule of law and welcomed the approval of a framework or outline of a proposed “code of conduct” aimed at preventing confrontation in the contested waters. Deadly clashes have erupted in the past between Chinese and Vietnamese forces.
Trump Offers to Mediate in South China Sea Dispute – President Donald Trump offered his services Sunday to help resolve territorial disputes in the South China Sea. Speaking in Vietnam, Trump said he was “a very good mediator and arbitrator” and could help to make progress on the regional dispute, in which five countries contest China’s sweeping claims to the waters. Vietnam has become the most vocal critic of China’s claims to the sea, as well as its construction and militarization of artificial islands in the busy waterway. Some $3-trillion in goods passes through the sea each year, according to Reuters."If I can help mediate or arbitrate, please let me know," Trump said in comments before a meeting in Hanoi with Vietnam's president, Tran Dai Quang. He acknowledged that China's position on the South China Sea was a problem. President Quang said Vietnam believed in handling disputes on the South China Sea through peaceful negotiations and on the basis of international laws — which Vietnam says nullify China's claims, the news agency reported. Vietnam has reclaimed land around reefs and islets, but on nowhere near the same scale as China. Brunei, Malaysia, the Philippines and Taiwan also have claims in the sea. Since Philippine President Rodrigo Duterte has grown closer to China, Vietnam has emerged as China's main challenger in the region. In July, China pressured Vietnam to stop oil drilling in a disputed area, taking relations to a new low. Relations have since improved and Chinese President Xi Jinping was visiting Hanoi later on Sunday.
China to send special envoy to North Korea | South China Morning Post: China will send a special envoy to North Korea on Friday, state media reported. Song Tao, the head of the Communist Party’s international liaison department, will visit Pyongyang as a special envoy of President Xi Jinping, the state-run Xinhua news agency reported on Wednesday. The report said Song would brief North Korean officials on the Chinese Communist Party’s five-yearly national congress last month, but gave no further details of his agenda or who he would meet. Chinese foreign ministry spokesman Geng Shuang said that it was routine for China and other communist countries to have such exchanges after important party meetings. Geng added that China and North Korea would also discuss matters of mutual concern. The trip, however, comes amid international concerns over North Korea’s nuclear weapons programme and missile tests. US President Donald Trump urged China during his visit to Beijing last week to do more to rein in Kim Jong-un’s regime in Pyongyang. Song’s last reported trip to North Korea was in May last year when he met Ri Su-yong, vice-chairman of the Central Committee of the ruling Workers’ Party. Ri is also a former foreign minister. Beijing has repeatedly denounced Pyongyang’s missile and nuclear tests. It has also implemented UN sanctions against North Korea, leading to a deterioration in the two traditional allies’ ties. Kim and Xi exchanged greeting messages over the national congress last month, but neither leader has visited the other’s country since taking power.
Industry Which Does Not Pay Minimum Wages To Workmen Has No Right To Continue: Delhi HC -- The Delhi High Court recently scorned at the practice of non-payment of minimum wages to workmen and came down heavily on industries which do not grant minimum wages, opining that such industries had “no right to continue”. Justice C. Hari Shankar explained, “In any event, there can be no dispute that ―’sweated labor’ is an anathema to any civilized society, and is a harkback to the gladiatorial era when slavery and bonded labor were the order of the day. The dignity of the working-class (or ―labor, as some would like to call it) has to be assiduously protected and preserved at all costs; for all other classes depend on it for survival and sustenance.“ The Court further emphasized on the necessity of payment of minimum wages and observed, “Payment of minimum wages is, therefore, an essential characteristic of humanity. Extraction of labor without payment of minimum wages, per corollary, would reflect an attitude which is inhuman… …Non-payment of minimum wages, to a workman is, therefore, unconscionable and unpardonable in law. It strikes at the very root of our constitutional framework, and belies the aspirations set out in the preamble thereto.” The Court was hearing a Petition challenging an award passed in July, 2004 by the Labor Court, wherein the Central Secretariat Club was directed to pay a workman, Mr. Geetam Singh, for a period of three years. Mr. Singh had registered a claim under the Industrial Disputes Act, alleging that he was being paid less than what he was entitled to under the Minimum Wages Act, 1948. The Management of the club had contested his claim contending that the club was not an “industry” under the Act and that Mr. Singh’s claim was filed belatedly.
Withdrawal symptoms: cash is still king in India, Modi not so much - A year ago, Nand Lal became the face of the havoc unleashed by Indian Prime Minister Narendra Modi’s shock decision to withdraw high-denomination banknotes from circulation. As some 86 per cent of the cash in circulation was declared void overnight in a cash-driven economy and a fraction of it replenished with new legal tender, millions of Indians found themselves standing in long bank lines for weeks to exchange their liquid holdings for legitimate banknotes. After three days of queuing in vain, Lal broke down when he lost his spot in a queue on the fourth day. As he tearfully begged bank officials to allow him to withdraw his pension, the pain and helplessness on his face was captured in a photo taken by the Hindustan Times newspaper. It instantly went viral as a symbol of the hardship inflicted by demonetisation, as the currency ban is called in India. “I don’t want to live another single day, I’ve suffered enough,” Lal says often as we talk in his gloomy neon-lit room. But his face lights up when asked about demonetisation. The social media fame brought by that photo means he doesn’t have to queue up any longer. These days when his maid takes him to the bank, he is given a seat and the bank officials do the rest – a big deal in a public sector Indian bank. “Thanks to you journalists, I have no bank problems now,” he says, hands folded in a gesture of appreciation. Lal may be one of the very few people for whom demonetisation actually worked out, even if in a perverse way. As evident from nationwide opposition protests this week to mark the anniversary of the currency ban, endless media coverage of its impact, and the disdain and anger that any mention of the note ban often evokes in casual conversations, it rankles for the most part.
Moody's gives Modi a boost by raising India's sovereign rating (Reuters) - Moody’s Investors Service upgraded India’s sovereign credit rating for the first time in nearly 14 years on Friday, saying continued progress on economic and institutional reforms would boost the country’s growth potential. The agency said it was lifting India’s rating to Baa2 from Baa3 and changed its rating outlook to stable from positive as risks to India’s credit profile were broadly balanced. The upgrade, Moody’s first of India since January 2004, moves the rating to the second-lowest investment grade, one notch higher than Standard & Poor’s and Fitch, which have kept India just above “junk” status for a decade and more. The decision by Moody’s is a plaudit for Prime Minister Narendra Modi’s government and the reforms it has pushed through, and comes just weeks after the World Bank moved India up 30 places in its annual ease of doing business rankings. Indian stocks, bonds and the rupee rallied. “The (ratings) move is overall positive for bonds which were caught in a negative spiral. This is a structural positive which would lead to easing in yields across tenors.” India had lobbied Moody’s hard for an upgrade last year, but failed. The agency cited doubts about the country’s debt levels and fragile banks, and declined to budge despite government criticism of its rating methodology. Finance Minister Arun Jaitley told reporters the upgrade was a “belated recognition” of the steps the government has taken to fix India’s $2 trillion economy.
Zimbabwe's Military Seizes Power, Holds President Mugabe --We noted yesterday that Zimbabwe military commander, General Constantino Chiwenga, said on state television that he was not launching a military coup, while Mugabe and his family were safe, they were targeting criminals around the Mugabe family and the situation will return to normal soon. Well, that changed fast and with events fluid, the latest from Zimbabwe is that the army is in control of the country, and holding president Mugabe "for his own safety", while it was removing “criminals” around him such as the country's finance minster. Overnight, an army spokesman said on state television that Mugabe and his family were being held in a “safe and secure place” while soldiers carried out the operation in Harare, which followed a day of high tension between the army’s commander, General Constantino Chiwenga, and Mugabe’s ruling Zanu-PF. "We are targeting criminals around him who are committing crimes that are causing social and economic suffering in the country," the army spokesman said. “As soon as we have accomplished our mission we expect that the situation will return to normalcy.' According to the FT, witnesses in Harare said soldiers remained on guard outside the state TV building on Wednesday morning, and were manning a checkpoint at the airport where flights were running normally. Army vehicles blocked off a handful of streets in the city centre. State television and radio played music as normal broadcasting was suspended.
Zimbabwe latest: Mugabe in crunch talks over his future - BBC News: Zimbabwe's long-time President Robert Mugabe has been holding direct talks with the army over his future. Pictures emerged of the 93-year-old meeting the army chief and two envoys from South Africa at his official residence in Harare. The army put Mr Mugabe under house arrest on Wednesday after moving in to take control. Opposition leader Morgan Tsvangirai says Mr Mugabe must resign but sources suggest the president is resistant. President Mugabe has been in control of Zimbabwe since it threw off white minority rule in 1980. However, the power struggle over who might succeed him, between his wife Grace Mugabe and former Vice-President Emmerson Mnangagwa, has split the ruling Zanu-PF party in recent months. Last week, Mr Mugabe came down in favour of his wife, sacking Mr Mnangagwa, a veteran of Zimbabwe's anti-colonial struggle. That proved too much for military leaders, who seized control of the country on Wednesday. Photos in the Zimbabwe Herald showed Mr Mugabe meeting army chief Gen Constantino Chiwenga and the two South African envoys from the Southern African Development Community (Sadc) at State House in Harare. Alongside them was Father Fidelis Mukonori, a Roman Catholic priest known to Mr Mugabe for years who has been brought in to mediate. Sources close to the talks say Mr Mugabe is refusing to stand down voluntarily before next year's planned elections.
Zimbabwe latest: Mugabe 'resisting calls to resign' - BBC News: Zimbabwe's long-time President Robert Mugabe is reportedly refusing to step down immediately, amid growing calls for his resignation. The 93-year-old was put under house arrest during a military takeover on Wednesday, after a power struggle over who would succeed him. The military said on Friday it was "engaging" with Mr Mugabe. It also said it had been arresting "criminals" around the president but gave no names. It said it would advise the nation on the outcome of talks with Mr Mugabe "as soon as possible".The army moved in after Mr Mugabe last week sacked Vice-President Emmerson Mnangagwa, signalling that he favoured his wife Grace Mugabe to take over his Zanu-PF party and the presidency. If President Mugabe can be persuaded to step down officially it could help legitimise the military's dramatic intervention, the BBC's Andrew Harding reports from Zimbabwe. On the streets, it is hard to find anyone who wants Mr Mugabe to stay on, our correspondent adds, but negotiating the manner of his departure and some sort of transitional agreement to follow could take some time.
Venezuela defaults on £45bn debt after missing payments - Venezuela has defaulted on its £45billion debt after missing interest payments sparking fears investors could seize the country's oil as payment. Caracas faced the first of what could be a cascade of defaults on its enormous foreign debt Tuesday as financial experts Standard and Poor's declared the crisis-torn South American country in 'selective default'.S&P's move came after Vice President Tareck El Aissami met with creditors in the Venezuelan capital Monday, but offered no way out of the impasse.With no obvious means of paying the money back, attention has turned to the country's state oil company. President Nicolas Maduro has formed a commission to restructure Venezuela's sovereign debt and that of state oil company PDVSA. But participants in a first meeting in Caracas on Monday said officials had come up with no concrete proposals for restructuring the debt. Geronimo Mansutti from the Rendivalores brokerage said: 'They didn't give any concrete details on their plans, on what they hope to get.' About 70 percent of Venezuelan bondholders are North American, according to government figures. S&P said there was 'a one-in-two chance that Venezuela could default again within the next three months.' 'We would very likely consider any Venezuelan restructuring to be a distressed debt exchange and equivalent to default given the highly constrained external liquidity,' it said.
Venezuela Signs $3.2 Billion Debt Restructuring Deal With Russia -- As Venezuela teeters right on the brink of complete financial collapse, Bloomberg reports that Russia has agreed to restructure roughly $3.2 billion in outstanding obligations. While details of the restructuring agreement are scarce, both sides reported that the deal spreads payments out over 10 years with minimal cash service required over the next six years.Russia signed an agreement to restructure $3.15 billion of debt owed by Venezuela, throwing a lifeline to a crisis-wracked ally that’s struggling to repay creditors.The deal spreads the loan payments out over a decade, with “minimal” payments over the first six years, the Russian Finance Ministry said in a statement. The pact doesn’t cover obligations of state oil company Petroleos de Venezuela SA to its Russian counterpart Rosneft PJSC, however.“The terms are flexible and very favorable for our country,” Wilmar Castro Soteldo, Venezuela’s economic vice president, told reporters in Moscow after the signing. “We will be able to return to the level of commercial relations with Russia that we had before,” he added, noting that a deal to buy Russian wheat will be signed next week. This is the second time Russia has agreed to reschedule Venezuela’s debt payments after agreeing to an extension last year. Still, Caracas failed to make payments amid an economic crisis triggered by low prices for oil. Rosneft has also provided several billion dollars in advance payments for Venezuelan crude supplies.
No deal is better than a bad deal: Why Canada won the TPP stand-off - The end-game in trade negotiations always generates more than its fair share of drama and this week's effort to rework the Trans Pacific Partnership without the United States was no different. Canada was squarely in the spotlight with Prime Minister Justin Trudeau a no-show at a ministerial meeting that was attributed to a scheduling error, but had the hallmarks of gamesmanship designed to demonstrate a willingness to walk away from the deal.The result was a major win for Canada as the government leveraged its position as the second-largest economy left in the TPP to extract significant concessions on intellectual property, culture, and the auto sector. Indeed, despite pressure to cave on key demands from the Japanese and Australian governments, Canada stood its ground and is helping to craft a trade deal that better reflects a balanced approach on challenging policy issues.In advance of the meetings in Vietnam, Mr. Trudeau had signalled that Canada would not be rushed into a deal simply for the sake of an agreement. With pressure on multiple trade fronts and misgivings about the terms of a trade deal that was concluded by the Conservatives weeks before the 2015 federal election, a few tweaks might not be enough to salvage the flawed TPP. The decision to go slow and seek further negotiations may draw the ire of a few governments anxious to conclude the TPP, but it made both strategic and policy sense. From a strategic perspective, Canada was a late entrant to the TPP negotiations, arriving well after the basic framework had been established and several of the chapters concluded. In fact, the TPP only became a trade priority after the Harper government identified the risks of remaining on the outside of a deal that included the United States. The decision to participate was primarily defensive with some studies projecting only marginal economic gains.With the United States out of the TPP, Canada's primary strategic objective was gone. That left a deal that offered some benefits for increased trade with Japan, but little else, given that Canada already has free-trade agreements with several other TPP countries such as Mexico, Chile, and Peru.Further, the TPP never fully reflected some of the Liberal government's trade priorities, including adequately addressing labour regulation and indigenous rights. Addressing those issues to advance the goal of a "progressive" agreement would require far more than some modest drafting changes.
The revised TPP is still a big deal - The Trans-Pacific Partnership trade agreement is moving forward once again. With the endorsement of the leaders of 11 countries, the deal could come into force as soon as next year. This is not quite the same TPP deal that was in place a year ago. The U.S. is no longer part of it, 20 provisions that largely relate to U.S. negotiating demands have been suspended, and the pact itself has been renamed. These changes should not be ignored, but the agreement is still a big deal. The revised pact, now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, or CPTPP, will be extremely important for companies doing business in the region and will set the benchmark for future trade agreements globally. The withdrawal of the U.S. from the agreement, of course, does impact the overall size of the economic pie. The share of world gross domestic product covered has been cut by about two-thirds to 13%. The TPP 11 states similarly account for about 14% of global imports of goods and services. However, given the generally open nature of the U.S. economy, most companies from TPP 11 states already enjoyed easy access to the U.S. American tariffs are quite low for almost everything but textiles, footwear and some agricultural products. Companies from member countries can enter the services markets in the U.S. and have the ability to invest right now -- the CPTPP rulebook matches existing U.S. laws. For TPP 11 companies, the absence of the U.S. is not as damaging as may have first appeared. The 20 suspended provisions of the original TPP constitute just 28 of the 622 pages of the negotiated text. The rest of the agreement remains untouched, including every single market-opening commitment made by members in relation to inbound goods, services and investments, state-owned enterprises, and government procurement. Nineteen out of 30 chapters were totally unchanged and three others had less than one sentence altered.
Global Wealth Report 2017: Where Are We Ten Years after the Crisis? - Credit Suisse - As shown in the latest edition of the Global Wealth Report by the Credit Suisse Research Institute (CSRI), total global wealth has now reached USD 280 trillion and is 27 percent higher than a decade ago at the onset of the financial crisis. In the past 12 months, total global wealth grew by 6.4 percent. It is the fastest pace of wealth creation since 2012 and one of the best results since the financial crisis. Moreover, as wealth increased faster than the population, global mean wealth per adult reached a new record high of USD 56,540.Comparing wealth gains across countries, the United States is an unquestionable leader. The country continued its remarkable unbroken spell of gains after the financial crisis and added USD 8.5 trillion to the stock of global wealth. In other words, the US generated more than half of the total global wealth aggregation of USD 16.7 trillion of the past 12 months. In line with global wealth growth, wealth in Europe increased by 6.4 percent thanks to stability spread across the continent. From Europe, Germany, France, Italy, and Spain made it into the top ten countries with the biggest gains in absolute terms. Converted into percentage terms, the biggest household wealth gain globally was recorded in Poland. The increase of 18 percent was driven mainly by rising equity prices. Switzerland continues to lead the ranking in terms of both average and median wealth per adult in 2017, the latter favoring countries with higher levels of wealth equality. Since the turn of the century, wealth per adult in Switzerland has risen by 130 percent to USD 537,600.
The top 1% now own 50.1% of the world's wealth, up from 45.5% in 2001 -- The wealthiest 1% of the world's population now owns more than half of the world's wealth, according to a new report. The total wealth in the world grew by 6% over the past 12 months to $280 trillion, marking the fastest wealth-creation since 2012, according to a new report from Credit Suisse. More than half of the $16.7 trillion in new wealth was in the U.S., which grew $8.5 trillion richer. But that wealth around the world is increasingly concentrated among those at the top. The top 1% now own 50.1% of the world's wealth, up from 45.5% in 2001."So far, the Trump presidency has seen businesses flourish and employment grow, though the ongoing supportive role played by the Federal Reserve has undoubtedly played a part here as well, and wealth inequality remains a prominent issue," said Michael O'Sullivan, chief investment officer for International Wealth Management at Credit Suisse. "Looking ahead, however, high market valuations and property prices may curb the pace of growth in future years." The world's millionaires are expected to do the best in the coming years. There are now 36 million millionaires in the world and their numbers are expected to grow to 44 million by 2022. The U.S. still leads the world in millionaires, with 15.3 million people worth $1 million or more.
EU Creates New Defense Pact To Reduce Dependence On US -- The EU on Nov.13 officially launched a new era in defense cooperation with a program of joint military investment in equipment, research and development, known as permanent structured cooperation, or PESCO. Foreign and defense ministers gathered at a signing ceremony in Brussels to represent 23 EU governments joining the pact, which is to become legally binding when signed by heads of state at EU summit in mid-December. With so many ministers signing, approval seems a given. From now on, the EU will have a more coherent role in tackling international crises, while reducing the reliance on the United States.The UK, which is scheduled to leave the EU in 2019, is not part of PESCO.Until Brexit, London had opposed the idea of European Defense Union or European Army, saying it would undermine NATO and the UK alliance with the US. Denmark, which has a special opt-out status, is not expected to participate. Ireland, Portugal and Malta are still undecided whether or not to join.This is the first time ever EU member states legally bind themselves into joint projects as well as pledging to increase defense spending and contribute to rapid deployment. Member countries will submit an action plan outlining their defense aims. EU foreign policy chief Federica Mogherini, EU military chiefs and the European Defence Agency will evaluate whether the plans agreed on are being respected. Those not living up to their commitments could be kicked out of the group. PESCO is intended to reduce the number of different weapons systems in Europe and to promote regional military integration. It is also intended to establish joint training of military officers. The jointly developed European military capabilities will enable the EU to conduct operations separately or in coordination with NATO. Formally, the North Atlantic Alliance backs the project, aiming to benefit from stronger militaries.
We’ll Look Back At This And Cringe, Part 1: European Junk Bonds Yield Less Than US Treasuries - Financial bubbles are the office Christmas parties of the investment world. They start slowly, with a certain amount of anxiety. But they end wildly, with acts and decisions that in retrospect seem really, really stupid.Millions of people out there still bear the psychic scars of buying gold at $800/oz in 1980 or a tech stock at 1,000 times earnings in 1999 or a Miami condo for $1,000 per square foot in 2006.Today’s bubble will leave some similar marks. But where those previous bubbles were narrowly focused on a single asset class, this one is so broad-based that the hangover is likely to be epic in both scope and cumulative embarrassment.This series will create a paper trail for the morning after, starting with a truly amazing anomaly: European junk bonds now yield less than US Treasury bonds. European junk bonds offer just 2 per cent (Financial Times) – High-yield debt belies its name as loose central bank policy skews credit markets The European high-yield market has seen €82bn of new issuance so far this year A widely tracked index of European junk bonds is on the verge of breaking below the 2 per cent yield barrier for the first time, the latest indication that loose central bank policy has skewed credit markets.The so-called “yield-to-worst” on ICE Bank of America Merrill Lynch’s euro high-yield index slipped to just 2.002 per cent on Thursday, an all-time low for what is the most commonly used benchmark in the European junk bond market.
Pool of negative yielding debt swells to nearly $11tn - As investors fret over the recent sell-off in US Treasuries, a reminder that the world is still awash in low yields.Nearly $11tn of sovereign and corporate bonds trade with a yield below zero, according to data from Bloomberg Barclays Indices. The $10.9tn figure includes notes and bonds in the benchmark global aggregate index as well as Bloomberg Barclays’ US, Euro, UK and Japanese short-Treasury indices at the end of October. Central bank stimulus upended the normal rules of fixed income markets after the financial crisis, when policymakers in Europe, the US, Japan and UK launched large-scale bond buying programmes and the European Central Bank and Bank of Japan cut interest rates below zero. The moves were aimed at staving off deflation and buoying growth. Quickening output has allowed the ECB to dial back its pace of bond buying at the same time that the Federal Reserve has slowly tightened policy. It has left investors in a lurch as they try to suss out where rates are headed.
Disputed Catalan President Carles Puigdemont: Spain has ‘damaged democracy’ - The disputed President of Catalonia has told Sky News the Spanish state has "damaged democracy in order to stop independence". In an exclusive interview with Sky News, Carles Puigdemont said the European Union is failing to recognise the reality of the situation in Catalonia and failing to act in the face of "authoritarian actions". "It is very disappointing to see that in a Europe Union that we are all a part of, they can respond to situations in Poland and Hungary but cannot respond to the situation in Catalonia," he said, speaking from a secret location in Brussels. "To be treated like a criminal, like a drug trafficker, a paedophile, like a serial killer, I think this is abuse... this isn't politics, this is using the courts to do politics." Mr Puigdemont is the subject of a European arrest warrant which he is appealing through the Belgian courts. He is wanted in Spain on crimes of rebellion, sedition and misuse of public funds after the 1 October referendum and subsequent declaration of independence, both deemed illegal by the Spanish government.
Massive Crowd In Barcelona Demands Spain Release 'Political Prisoners' -- Hundreds of thousands of people backing Catalonia's bid to secede from Spain packed the streets in downtown Barcelona Saturday to demand the release of jailed separatist leaders. Barcelona's police said 750,000 people attended the rally. As AP reports, the rally's grassroots organizers called for 10 prominent members of the secessionist movement in the northeastern Spanish region to be freed from prison. Eight former members of Catalonia's dissolved Cabinet and two activists are in jail while Spanish authorities investigate their alleged roles in promoting an illegal declaration of independence last month in violation of Spain's Constitution. A separate court in Madrid granted bail on Thursday to another six Catalan lawmakers also being investigated over the secession push. "We want to tell the world that we want freedom for our prisoners and freedom for Catalonia," Agusti Alcoberro, the vice president of grassroots group National Catalan Assembly, told the crowd in Barcelona, the region's capital. Many of the protesters carried pro-independence "estelada" flags, with its white star and blue triangle superimposed over the traditional red-and-yellow Catalan colors. Many also held signs saying in Catalan "Freedom Political Prisoners" and wore yellow ribbons as a symbol of their demands.
Paradise Looted - How Sicily Became Ungovernable - Der Spiegel - This land, a place where lemon trees bloom four times a year, is blessed with abundance -- of sunshine, world cultural heritage sites, Greek temples, Byzantine frescoes, Arab art, sandy beaches and Michelin stars. Sicily, a slice of paradise.But then come the statistics. More than one in five members of the working-age population is unemployed, and almost half of all island residents are either poor or at risk of poverty. Sicily seems wealthy, and yet is falling further and further behind, not just in comparison with industrialized northern Italy, but with the rest of the Mezzogiorno. The partially autonomous island, which was part of the "Magna Grecia" in ancient times, is now viewed as "Italy's Greece," the nation's problem child. Sicilians voted for a new regional government on Sunday Nov. 5, handing the victory to center-right candidate Nello Musumeci, who was backed by a coalition of three parties, including former Prime Minister Silvio Berlusconi's Forza Italia. The anti-establishment Five-Star Movement came second, while the center-left Democratic Party, the party of former Prime Minister Matteo Renzi, came in third - a bad omen for its results in next spring's national elections. But according to writer Pietrangelo Buttafuoco, it doesn't matter who manages Sicily's misery in the future. Buttafuoco claims the region, "with its budget deficit, high unemployment, exodus of young people and value creation lower than in the post-war period, not to mention corruption, crime and hunger," is no longer governable. "It has to go into forced administration." And indeed, anyone who visits Sicily these days can see that Palermo's splendid palaces barely conceal bitter poverty elsewhere in the city, or notice the slums of corrugated-metal huts in Messina and the dying cities in the interior. On the island, the main causes of a crisis that has gripped large parts of Italy are magnified.
Crime Wave Engulfs Sweden as Fraud, Sexual Offenses Reach Record - The number of Swedes who were victims of crimes such as fraud and sexual offenses jumped to the highest level on record last year. A survey by the Swedish National Council for Crime Prevention showed that 15.6 percent of people suffered one or more offences against the person (defined in the survey as assault, threats, sexual offences, robbery, fraud or harassment) last year. That’s up from 13.3 percent in 2015 and the highest number recorded since the annual Swedish Crime Survey started in 2006. The number of offences against individuals “was at a relatively stable level 2005 to 2014, at 11.3 percent to 13.1 percent, but the last two years show an increase,” the council said in the report published this week. The crimes “that have had the clearest development in the past few years are harassment, fraud and sexual offences,” the agency said. Of the six types of offences against the person, five of six rose to their highest level on record last year. The number of assault cases reached its second-highest level. The number of victims of sexual offences rose to 1.7 percent in 2015 and to 2.4 percent in 2016 from an average of 0.9 percent between 2005 and 2014. “Young women aged between 16 and 24 is the group that’s most subject to sexual offences, with 14 percent of young women stating that they were victims of at least one such crime during 2016,” the council said. “Among men in the same age group, 1.2 percent said they had been victims.” Young women are also subject to harassment to a greater extent, the council said.
German Homeless Population Explodes By One-Third In 2016 As Migrant Crisis Takes Its Toll -- According to a recent estimate published by the Federal Association for Assistance for the Homeless, the number of homeless people living on Germany’s streets has risen by 33% in a matter of just a couple of years, to 52,000. Meanwhile, as The Local notes, the number of Germans who can't afford their own home and have been forced to rely on the generosity of family and friends for a place to sleep every night has also risen a staggering 26%, to over 400,000 people. In 2016 an estimated 52,000 people were living on German streets, an increase of a third on the 39,000 people who were living rough in 2014. The report also claims that the overall number of people in Germany who don’t have their own home has risen sharply, from 335,000 in 2014 to 422,000 last year. Most of the people who don’t have their own homes live in collective accommodation or have to rely on the charity of partners or family.
Germany Clumsily Admits To Supporting Regime Change In Poland - A diplomatic spat has developed between Berlin and Warsaw after the German Defense Minister said that her country should support the “democratic resistance of the young generation” in Poland. This scandalous remark from Germany’s top military official immediately led to a strong rebuke from all levels of the Polish government, which rightly interpreted her statement as an implied threat to aid the Soros-linked Color Revolutionaries in their quest to carry out a regime change in the Central European country. As an overly simplified backgrounder, the ruling Law & Justice conservative party has been working to cleanse Poland’s permanent bureaucracy, or “deep state”, of the holdovers that their Civil Platform liberal predecessors had hurriedly stacked into government in a last-ditch attempt to derail their opponents’ legislative agenda until the next election. This is very similar to what the Democrats have been doing against Trump, but it’s just that PiS, which is the Polish abbreviation that the Law & Justice party is popularly known by, hasbeen comparatively more successful than their allied American counterpart, hence why there’s been a proportionate increase in foreign support to the Color Revolution movement in response. Germany hates PiS because party leader Jaroslaw Kaczynski’s ideology of “EuroRealism” contrasts with Merkel’s “EuroLiberalism” in every way, from dealing with the migrant crisis to the future organization of the EU as a whole. PiS is even being sued by Brussels because of its refusal to accept the forcible relocation of even a single Muslim migrant, and its ambitious “Three Seas Initiative” aims to consolidate a new power bloc in Central and Eastern Europe in order to oppose Germany’s post-Brexit centralization initiative for the EU in favor of a more hands-off and reformed approach that respects the national sovereignty of the bloc’s members. It’s long been suspected that Berlin was backing the anti-government movement in Poland, and the country’s media has reported on this for nearly two years already, but the German Defense Minister’s sloppy statement on TV seemed to present the strongest confirmation yet that this is indeed truly the case.
60,000 People March in Massive Nazi Rally in Poland - Right-wing racists flew in from Slovakia, Hungary, and Spain to join tens of thousands of Poles at a white supremacist rally in Warsaw on Saturday where marchers bore signs with messages like “Europe Will Be White” and “Clean Blood.” Reporters on hand said the crowd numbered roughly 60,000, citing police estimates. A polish neo-Nazi group called The Radical Camp, borrowing its name from a 1930s fascist movement in the country, organized the march.“A number of people in the crowd said they didn’t belong to any neo-fascist or racist organization but didn’t see a problem with the overall tone of what has become Poland’s biggest independence day event,” the Wall Street Journal noted. Counterprotesters also showed up in far smaller numbers. One small group in the square held a sign reading “We are Polish Jews” and stood encircled by police. Nearby, a group of 2,000 anti-fascists rallied in opposition to the massive hate march. Poland’s resurgent fascist youth movement has embraced President Donald Trump, whose campaign manager Steve Bannon worked for years to exploit white ethno-nationalist political energy in western Europe as well as the United States from his position leading Breitbart.com. The Radical Camp made the slogan of this year’s rally “We Want God,” a line Trump quoted from an old Polish folk song during a state visit to Warsaw in July. In prior years, The Radical Camp was only able to muster a few hundred attendees at its own events on independence day, a national holiday with many official and semi-official mass events to commemorate Poland’s 1918 emergence from a century of foreign rule.
Brexit immigration changes have UK farmers upset over rotting agriculture crops - A county in Britain is asking the government for special permission to circumvent broad immigration laws because of a drain on labor.Crops in Cornwall are literally “rotting in the fields” because since the Brexit vote there aren’t enough migrant workers to reap the harvests, according to media reports. Based on research prepared by the local council in Cornwall, farm staff levels have plummeted to just 65% of what would typically be needed to complete the necessary agricultural work.“Changes to migration laws after Brexit could lead to multi-million pound losses to the Cornish economy if the horticultural industry can’t access the skills and workforce it needs,” according to the research.The county is hoping the government will implement a so-called location-based approach for managing the migrant workforce. That request comes after 56% of voters in Cornwall approved in June 2016 the UK’s plan to leave the European Union.The referendum’s result put added pressure on the UK agricultural sector. The country imports more than a quarter of its food from the EU. In 2015, the UK exported £18 billion (at the time about $26 billion) worth of a food and drink, a number that’s dwarfed by the £38.5 billion it spent to import food and drink that same year.Riviera Produce, one of the biggest agricultural producers in Cornwall, sent a stark message to the government about the importance of installing flexible immigration laws. “If we put strict limits on Eastern European migrant labour or devise alternative immigration policies that limit so-called ‘low-skilled’ labour, the Cornish horticultural industry is finished,” said David Simmons, a managing director of the company.
EU Uses Sleazy Negotiating Tactics To Extort More Cash In Brexit Talks - As we discussed (see here) when Brexit talks resumed this week, the EU is piling pressure on Theresa’s May’s weakened government to extort more money out of the UK in the divorce settlement – now termed “moment of clarification” in EU parlance.Despite rumours before the latest talks began, that Theresa May was prepared to increase the UK’s offer, if this was the case, the EU wasn’t impressed. In the post-talks press conference. the beleaguered Brexit Secretary, David Davis, stated that there is positive momentum in the negotiations…and the markets seemed to believe him. Sterling caught a bid, although it probably had at least as much to do with stronger-than-expected industrial production and a narrowing in the UK’s trade deficit. Meanwhile, the EU side did its fearmongering best to give the impression that insufficient progress will be made to progress to trade talks when the European Council meets in December. Bloomberg reported on comments from EU chief negotiator, Michael Barnier.European Union chief negotiator Michel Barnier raised the prospect of Brexit talks failing to reach a breakthrough by year-end, saying the U.K. has two weeks to come up with a better offer on the financial settlement.Barnier called for “real and sincere progress” on the three divorce issues, which include the separation bill, the rights of EU citizens and the Irish border, which has erupted back onto the agenda this week. If agreement was delayed to March 2018, Szymanski noted that it would be difficult to negotiate a trade deal before Britain is due to exit the EU in March 2019. While Davis referred to “a few outstanding, albeit important, issues”, thanks to the EU, this is no longer just about money. A new “spanner” was thrown into the works by the EU on Thursday night. This is the border agreement between the Republic and Northern Ireland after Brexit. Perhaps not fully appreciating the EU’s negotiating tactics, we sighed when we saw a Bloomberg headline (with our emphasis) “Irish Border Throws Unexpected Hurdle Into Brexit Talks”. From the article. The future of the Irish border erupted unexpectedly into Brexit talks this week, as the European Union made new demands on Britain that risk distracting from efforts to reach a breakthrough by year-end. The EU circulated a document to diplomats that called for Northern Ireland to maintain the rules of the customs union and single market after Brexit. It says there must be no hard border on the island, meaning regulations have to be the same on each side of the line that will become the U.K.’s land frontier with the EU after Brexit.
Hard Brexiters Continue Humiliating Theresa May - Yves Smith - Hard Brexiters (which increasingly looks like it will be “disorderly Brexit”) are now openly making a spectacle of Theresa May. After May made a move towards realism in her September speech in Florence, where she offered to make a payment to the EU during a rather vaguely described “transition period,” the rabid Brexit wing has been even harder after her than usual. Last week, she was apparently muscled into supporting having Parliament set a specific Brexit date in its Great Repeal Bill, as opposed to having the flexibility to firm that up later, as the legislation currently stipulates. Oh, and the dates and time she proposed appears to be 23 hours later than the EU’s idea of when Brexit is now set to happenLike many others, Matthew Parris in the Times tore into the idiocy of this idea and used it as a point of departure to describe the leadership vacuum in the UK. But the headline (which may not be his doing) described the situation as May humiliating herself. I don’t think that is quite right. May is tolerating being used and abused by the likes of Boris Johnson and Michael Gove. Look at their latest stunt: a letter expressing “no confidence” in May signed by 40 Conservatives. This is a nasty stunt. Its purpose is simply to browbeat May. You need 48 votes to put a no confidence vote before Parliament, and even if things were to get that far, it probably would not pass. The Tories are deeply divided and it isn’t clear whether Labour wants the poisoned chalice of taking up the Brexit negotiations and aftermath (they could easily excuse unenthusiastic support of May as putting country before party, that having snap elections now would be disastrous for Brexit execution). One British politics watcher volunteered that Johnson and Gove are unlikely to have pulled that trick on a bloke. From Parris: Theresa May, we learn, has promised to introduce a new clause in the European Union (Withdrawal) Bill stating that references to “exit” mean “exit on March 29 2019 at 23:00:00”. We will therefore, apparently, automatically leave the EU, or turn into pumpkins, or both, as the clock strikes, er, 11…Behind an appearance of resolve, such a clause is a testament of weakness: an implicit recognition that people don’t trust you to keep to your promise — like saying “cross my heart and hope to die”. Mrs May knows she’s a one-woman hostage situation, in office at the pleasure of a relatively small but fanatical wing of her parliamentary party: the hard Brexiteers, gripped by a jihadist willingness to blow up the government along with themselves if they don’t get their way… …she knows she will soon be breaking difficult news to them: news of how much Britain is prepared to pay, and what we may have to concede, for the deal we’re negotiating. Some Brexiteers won’t like this: hence the need now to throw them red meat.
Since Article 50 was triggered, a no-deal Brexit has been the default --Earlier this morning, Paul Mason made a point that you hear quite often: there’s no chance of no deal on Brexit, because there is no parliamentary majority for no deal. Michael Gove and John Redwood can say that “no deal is better than a bad deal” as much as they like, but they would not get that past the Commons. It’s understandable, given recently chaos, to imagine that if things are falling apart then Brexit might be one of them. Lord Kerr, who helped draft the Article 50 withdrawal clause, said last week that “the Brexiters create the impression that… having sent in a letter on 29 March 2017 we must leave automatically on 29 March 2019 at the latest. That is not true.” But this ended up in the Supreme Court precisely because Article 50 did serve final notice that we’d be leaving by 29 March 2019 at the latest. Once that letter was sent, “no deal” became the default position: it’s a deal that needs special parliamentary approval. If there is no agreement on a deal, or a veto is wielded from Dublin or Wallonia, then out we go – relying on the WTO rules that govern our relationship with the US and 110 other countries. It doesn’t matter what Lord Kerr thinks about what happens now. Article 50 has been activated, so Brexit is now automatic.Just ask the Supreme Court. Its judgement was made on the basis that Article 50 is not conditional on a later vote, or on a parliamentary majority for any subsequent deal. Article 50 is the final say, which is why Theresa May needed to seek parliament’s approval. Was invoking Article 50 the same as taking us out? The Supreme Court argued that it was – so a vote was needed. So the process is now irreversible, and unconditional. Unless Parliament votes to ignore the referendum result and abandon Brexit, we’ll leave on 29 March.That’s why I backed Gina Miller in her case against the government: her argument made sense. Invoking Article 50 wasn’t preparing to leave, it was leaving. And as such, it was a decision the Prime Minister did not have the authority to take on her own. If parliament voted to take us into the EU then only a parliamentary vote could reverse that decision. I sometimes wonder if Paul Mason and others think that Brexit will be like Lords reform, which didn’t happen because parliament could not agree on how it should be done. If there is no agreement on Brexit then no deal will happen at midnight Brussels time (or 11pm ours) on the 29th March 2019.
Henry VIII clauses and the new legal challenge to Brexit - The European Union (Withdrawal) Bill passed its second reading despite two acts of gross hypocrisy by the Labour Party, which now seeks to prevent Brexit whilst continuing to deny that this is its policy. The first hypocrisy is to have a policy which contradicts Labour’s manifesto commitment to support Brexit. The second hypocrisy has been to claim that, because it will provide for an extremely wide use of secondary legislation, the Withdrawal Bill represents an unprecedented ‘power grab’ by Government. I have discussed this hypocrisy about secondary legislation generally in anearlier article on BrexitCentral. In essence, far from doing something new, the Withdrawal Bill is merely the mirror image of the 1972 Act. But I want here to discuss an important aspect of this on which the Labour Party now dwells: Henry VIII clauses. For I am extremely sorry to have to say that these clauses are very likely to be the basis of an argument that will prevent Brexit. Though the Labour Party and Remainers of other affiliations will, initially at least, no doubt be delighted about this, it will have constitutional consequences which cannot be predicted, save that they will be extremely unwelcome. But, although Parliamentary criticism of the Henry VIII powers to be provided by the Withdrawal Bill continues to mount, it is not in Parliament that the blow to the UK constitution will be dealt. Henry VIII clauses enable an agency of Government to itself amend primary legislation so that an Act of Parliament may be changed without any Parliamentary consideration of those changes. It must be remembered, though it seems largely to be forgotten in the current political controversy, that these clauses cannot be made into law without some Parliamentary scrutiny because it is, of course, Parliament that must pass the original enabling Act of primary legislation that conveys the Henry VIII power. Nevertheless, it should not be denied by anyone of good faith of whatever political persuasion that these clauses inevitably carry a threat to accountability and legality. They are, indeed, a particular example of the problems caused by the immense post-war growth of secondary legislation as an inevitable aspect of the growth of Governmental power over this time.
Tory turmoil as 40 MPs say May must go -- Forty MPs have agreed to sign a letter of no confidence in Theresa May as European Union negotiators threaten to block trade talks until March unless Britain agrees to settle the Brexit divorce bill. The embattled prime minister is facing a fight on three fronts following another week of Tory turmoil in which Priti Patel become the second cabinet minister to resign and two other cabinet ministers — Damian Green and Boris Johnson — faced pressure to quit. May now faces a “make or break” month as:
- ● Senior European politicians and officials warn that the talks are entering a “crisis mode” as a preliminary deal will probably not be reached in December, as previously expected, but could instead be postponed until March
- ● Plotters reveal that 40 Conservative MPs — eight short of the number required to force a leadership challenge — have joined a list of Tory rebels who want her to resign
- ● The EU withdrawal bill returns to the Commons on Tuesday with Labour expected to join Tory rebels to inflict a series of damaging defeats on the government.
Today Jeremy Corbyn issues an ultimatum to the prime minister and tells her to “govern or go” as she “shows every sign of being in office but not in power”.In an article for The Sunday Times, the Labour leader accuses her of being too weak to deliver Brexit and claims the chaos surrounding her “crumbling” government risks “dangerously weakening Britain’s hand” in the talks. “Continuing uncertainty about the government’s approach to Brexit is now the biggest risk facing our country,” he writes. “The prime minister must end the confusion, take on the ‘no-deal’ extremists in her government and back a jobs-first Brexit for Britain.” Privately some Tory MPs and ministers agree with Corbyn and fear May has become a liability to the Brexit process. They are discussing whether the party needs a period in opposition to reinvent itself. The news comes as the European Commission has set up a “preparedness taskforce” for a no-deal Brexit amid fears that a collapse of May’s government could lead to Britain crashing out of the bloc.
‘Take it or leave it’ Brexit deal: David Davis says MPs will get final vote in major concession – but Tory rebels are furious - Telegraph - Parliament will be given a "take it or leave it" vote on Brexit after ministers agreed to enshrine the deal in law in a significant government concession.David Davis, the Brexit Secretary, announced that MPs and peers will be given a binding vote on the final deal with Brussels.However, the climbdown has prompted fears that pro-EU MPs willattempt to frustrate Brexit by tabling amendments in the hope of delaying or even postponing Britain's departure.Mr Davis warned MPs that Britain will leave the EU without a deal in March 2019 if they vote down the Government's final agreement with Brussels.The Brexit Secretary told the Commons the new law, which will cover areas such as citizens’ rights, the so-called divorce bill and a transition period, will provide “certainty and clarity” as Britain leaves the EU.He was asked by Eurosceptic Tory MP Owen Paterson if Britain will leave "without an agreement" if MPs vote down the deal. He replied: "Yes".He later added: "It's a meaningful vote, but not meaningful in the sense that some believe meaningful (is), which is that you can reverse the whole thing (Brexit)."Mr Davis said that while he was prepared to go back and talk to Brussels if the Commons attempts to make changes to the deal, he was doubtful that the timetable would allow any changes at that stage.He was backed by European sources who last night warned the UK that the deal will not be changed at the 11th hour. One source told The Telegraph: "If the UK government comes back at 11pm on 29 March 2019 saying the House of Commons has amended ‘x, y and z’, then we would need to go back to Council and Parliament.“But it is extremely difficult to imagine member states will start his whole process again once it has been ratified, particularly given how challenging the time is already.” The move infuriated pro-European Tories, who are now preparing to rebel against Government plans to enshrine the date that Britain leaves the EU in law. On Monday afternoon pro-European Tories confronted the chief whip over the concession, which they described as "meaningless". The meeting was said by both sides to have been "stormy".
The EU is preparing to delay the next stage of Brexit negotiations — Brexit talks are unlikely to move onto the future relationship before 2018, a prominent European Parliamentarian and ally of Angela Merkel said on Tuesday morning. In a blow to Theresa May and Brexit Secretary David Davis, German MEP Manfred Weber told journalists: "In December, it doesn't look like negotiations are going to move onto the second phase to talk about the future." The British side hopes that "sufficient progress" will be made on the issues of citizens' rights, the Irish border and Britain's financial obligations in order for talks to move onto future UK-EU relations in December. However, the EU is set to decide by the end of this month whether the next phase of negotiations on Britain's future relationship with the EU, which will cover a possible transition deal, can get underway next month. Weber poured cold water on Britain's hopes of talks progressing next month ahead of a meeting with Prime Minister May at Downing Street on Wednesday. "Theresa May has asked for talks — she knows that the negotiations are in a decisive phase," Weber told members of the European press. Weber leads the European Parliament's biggest conservative bloc and is chair of the centre-right European People’s party, of which German Chancellor Merkel is a leading figure. His comments follow Michel Barnier warning Britain that it must make its position on the so-called divorce bill clear in the next weeks for talks to move onto the next stage.
How the EU (Withdrawal) Bill could change the course of Brexit - The EU (Withdrawal) Bill could prove the trigger for the U.K. parliament to flex its muscles and change the course of Brexit. How MPs vote on the legislation — which was supposed to be a simple copy-and-paste exercise to bring existing EU law onto the U.K. statute book — could yet limit Theresa May’s room for maneuver in negotiations with the remaining 27 EU countries as Britain prepares for its exit. Three significant disputes — over the exit date, the process of agreeing a transition, and what would happen if no deal is agreed with the EU27 — could convince Tory rebels to vote with Labour and ultimately restrict the government’s ability to deliver Brexit on its own terms. While May has so far managed to align her party behind each step of the Brexit process — with just one Conservative MPvoting against the decision to trigger Article 50 — fault-lines in support for the government’s position were visible Tuesday when MPs began the laborious process of wading through 470 proposed amendments to the bill. Here’s what to watch out for: Underpinning many of the thorniest issues is Prime Minister Theresa May’s decision last week to add a date of departure to the front of the bill. The announcement that the U.K. would enshrine in law the date Britain leaves the EU — 11 p.m. on March 29, 2019 — which was revealed via a strongly worded editorial in the Telegraph, was criticized by opposition MPs and those on her own side, including former Attorney General Dominic Grieve, who said the announcement was “landed on us as a diktat.” Another Conservative MP familiar with the thinking of potential rebels said there was a real possibility the government’s amendment that added the date to the bill could be defeated, with 15 MPs telling him they were unhappy with the idea.
Brexit: Failure to introduce new customs system by date of Britain’s EU withdrawal would be ‘catastrophic’ --Failure to complete the introduction of a new customs system by Brexit in 2019 would be “catastrophic”, with the risk of huge disruption for businesses, massive queues at Dover and food being left to rot in trucks at the border, a parliamentary report has warned. The stark warning from Westminster’s public accounts committee said the number of customs declarations which HM Revenue and Customs must process each year could increase almost five-fold – from 55m to 225m – after leaving the bloc. Brexit Secretary David Davis has repeatedly boasted that the new hi-tech system – the Customs Declaration System (CDS) - will be in place by January 2019. But MPs on the committee warn that if the new infrastructure is not ready in time and there is no viable fall-back option, it could lead to a “huge disruption for businesses, with delays potentially causing massive queues at Dover and resulting in food being left to rot in trucks at the border".They added: “This is a programme of national importance that could have a huge repetitional impact for the UK if it is not delivered successfully.”Meg Hillier, who chairs the committee, said: “Failure to have a viable customs system in place before the UK's planned exit from the EU would wreak havoc for UK business, trade and our international reputation. Confidence would collapse amid the potentially catastrophic effects.”
Tory backlash at rebels threatening to frustrate Brexit | Daily Mail Online: Tory ‘mutineers’ faced a grassroots backlash last night after threatening to frustrate Brexit in Parliament.Fifteen rebels have told party whips they may vote against a bid to enshrine in law the date for leaving the EU.Sources believe the number could top 20 – enough to overturn Theresa May’s slender Commons majority when the issue comes to a vote next month. Tory councillors and voters in the rebels’ constituencies – many of which voted to leave the EU last year – warned this could usher in a Labour government.The rebels yesterday claimed they were being bullied because of their stance.But David Campbell Bannerman, a Eurosceptic Tory MEP, said they were in ‘contempt of democracy’ and should be kicked out of the party. In other developments:
- Priti Patel made her Commons return with an attack on pro-Remain MPs
- 19 Labour MPs face criticism for voting against leaving the EU
- An ICM poll put the Tories neck and neck with Labour, despite the Government’s woes
- Tory rebels have now backed more than 20 amendments to the European Union Withdrawal Bill
- A key ally of Angela Merkel said it now looked ‘possible’ to break the deadlock on Brexit
Brexit: Ministers see off EU Withdrawal Bill challenges - BBC News: The second day of debate in the Commons over the EU Withdrawal Bill has ended with the government winning every vote. Amendments had been put forward by Labour regarding issues such as employment rights and environmental legislation after Brexit. However, the government managed to win five votes during the course of the day - despite its majority falling as low as 12 at times. The dates of six more debating days in the Commons will be confirmed later. If passed, the withdrawal bill will bring existing EU law into UK law and allow the government to use so-called Henry VIII powers to change it without full parliamentary scrutiny. The powers have been criticised by members on both sides of the House, and one of Labour's amendments called for full debates before changes to any EU laws. Shadow Brexit minister Matthew Pennycook said the powers could be used to "chip away at rights, entitlements, protections and standards that the public enjoy and wish to retain". Conservative former Attorney General Dominic Grieve agreed with Mr Pennycook, saying that laws of "very considerable importance" to the public would be brought to the "lowest possible status" without full scrutiny. But Ken Clarke was the only Tory MP to vote for the amendment and it was defeated by 311 votes to 299 - with nine DUP MPs and two former Tories sitting as independents voting with the government.
BREXMAS GIVEAWAY Theresa May to offer Brussels £20billion to kick start Brexit trade talks -- THERESA May is preparing to offer up to £20billion more to Brussels in the first week of December to kick start Brexit trade talks, The Sun has learnt. The additional money would come on top of the £18 billion the Prime Minister said she will pay to secure a transitional deal in her Florence speech in September. Brexit bosses hope it will mean talks about the UK’s future relationship can finally be given the green light when all EU leaders meet on 14 December. However Mrs May will not put an exact figure on her offer but instead give Brussels clear guidance on what spending commitments Britain is prepared to honour before leaving the bloc. EU chief negotiator Michel Barnier has put a 14 day deadline on Britain last week to outline what they are prepared to pay as a controversial exit bill. But Ministers and MPs now expect Downing Street to simply ignore that enforced time limit and instead set out plans early next month.Crucially the move would come after the Finance Bill linked to next week’s Budget has passed the House of Commons in a bid to avoid angry Brexiteers hijacking the legislation in protest to large sums being sent to Brussels. Outlining the payment plans in early December would give Brussels time to consider the offer and circulate their plan to other 27 EU states ahead of the next crunch EU Council meeting on 14 December. Leaders will decide if “sufficient progress” has been made to move onto trade talks at that meeting — with the so called exit bill a major stumbling block in six months of talks so far. Last night Brexit Department sources insisted that no final decision had been made about whether an offer would be made.
Yet Another Brexit Train Wreck – UK to Fall Outside EU Auto Approvals Regime – and It Doesn’t Even Register With Officials - Yves Smith - Reader vlade e-mailed about a Richard North blog entry on Parliamentary testimony on the impact of Brexit on the auto industry. North found the content of the reports, the incomprehension and lack of inquisitiveness by the MPs, and the lack of press interest, all to be deeply disturbing. Recall that North was and is a Leave backer who nevertheless has been chronicling the mess that Brexit will be while occasionally telling his readers it will be worth the ten years of pain that he anticipates. North complains in his post that in addition to the MP leading the inquiry, Labour’s Rachel Reeves, being visibly clueless, matters were not helped by the auto experts underplaying the seriousness of the issues and bizarrely offering false hope, like the usual UK default “Surely there is a way out” which was further watered down into the handwave that the UK had to “find a way to bridge that gap.”As we’ll explain, the bottom line is that the UK auto industry is going to take an even bigger and faster hit from Brexit than I anticipated, and it will occur as a result of the UK losing access to the single market, so the damage will be serious even if the UK manages to reach a Brexit agreement.As vlade and I discussed via e-mail, some of the key points are very technical, and so I may fall afoul of buzzword compatibility and/or in the reading of some of the mechanisms. Nevertheless, just as one could conclude “CDOs are very risky and look like they are going to create even bigger losses for banks” in 2008 without knowing how they were structured, here the high level conclusion, the UK auto industry will take a big hit as a result of Brexit, seems to be well founded. Automobiles and auto parts account for roughly 12% of UK exports. As you can see from the table below, from the written testimony of the Society of Motor Manufacturers and Traders, the EU is far and away the most important destination:
U.K. Signals Climbdown on Setting Brexit Date in Legal Stone - A senior minister in the U.K. government dropped a strong hint that Prime Minister Theresa May is looking for a way to ditch her attempt to write the date of Brexit into its flagship piece of legislation. The climbdown comes in the face of a rebellion from her own Conservative lawmakers. The draft legislation that will transcribe European Union law into the U.K. statute is undergoing careful scrutiny, with parliament going through it line by line and considering the hundreds of amendments that have been proposed. The suggestion causing the most argument is one from the government to fix the hour and day of Brexit, an idea described as “mad” by former Attorney General Dominic Grieve. “There are various constructive suggestions that have been made during the committee debates about how the bill might be improved,” Justice Secretary David Lidington said, when asked about the exit date proposal. “Obviously, we will listen.” Although the bill has survived two days unscathed, it is clear from speeches in the debates so far that May’s government will either have to give way or lose votes. Lidington played down the significance of the proposal, which May made less than a week ago, describing it as a signal of her determination. He said that it merely made explicit a date that was implicit in the bill anyway.
Theresa May to hold showdown talks with Taoiseach Leo Varadkar over Irish border crisis - THERESA May will today hold showdown talks with Taoiseach Leo Varadkar over the Irish border crisis – as he demands Ulster remains part of the single market post Brexit. It follows the Sun’s revelations last week that the Taoiseach was hardening the EU’s line under pressure from Sinn Fein. Mrs May will meet Mr Varadkar on the margins of a major European summit today following Brexit talks with Sweden’s prime minister Stefan Lofven last night. Gothenburg is hosting leaders from across the European Union to promote fair jobs and growth. The PM will use the visit to push her counterparts to agree next month that sufficient progress has been made in the first phase of the Brexit talks to move on to vital tradee talks.Resolving cross-border issues between Ireland and Northern Ireland as a result of Brexit is one of the main areas where progress is required before EU leaders can agree to move to the next phase of the negotiations. The Prime Minister’s official spokesman said “you can expect Brexit to come up, along with other issues of importance”. The Gothenburg social summit on Friday brings together political leaders and other key players to discuss issues including workers’ rights and how to promote fair economic growth. Mrs May will take part in a working session on fair employment and working conditions and is expected to highlight the findings of the Taylor report published in July which examined the treatment of workers in the so-called gig economy. She will tell fellow leaders “how the the UK is addressing issues head-on in relation to the way employment practices are changing and the opportunities and challenges this presents and to point out how we’ve been consulting with business groups, trade unions and wider stakeholders”.
EU threat to withhold Britain’s budget rebate in Brexit bill wrangle - Europe is threatening to keep back Britain’s final rebate payment of €5 billion as part of the negotiations over the Brexit bill, The Telegraph can disclose. Senior British sources said that negotiations over the bill, which the EU sets at €60 billion (£53.6 billion), had still not settled whether the UK would receive the €5 billion (£4.46 billion) payment as part of the final settlement when it leaves the EU in March 2019.“There is a problem here, and the issue over whether the EU will pay us the 2018 rebate has not been resolved,” the source in Whitehall confirmed.The issue of the rebate, won by Margaret Thatcher in 1984, is a key irritant between the two sides as they try to move on to trade talks next month. Amid testy exchanges on Friday, Europe continued to pile pressure on Theresa May to increase her offer on the Brexit bill beyond €20 billion (£17.85 billion).
Irish PM: EU prepared to wait for Brexit ‘concessions’ - Politico — The EU is willing to wait for “concessions” on Brexit, even if that means continuing Phase 1 of talks into next year, Irish Taoiseach Leo Varadkar said Friday.Varadkar, arriving in Gothenburg for an EU summit on social rights, said Ireland opposed starting talks on a future trade relationship with Britain until London provided written assurances about the post-Brexit border between Northern Ireland and Ireland.“The U.K. voted 18 months ago to leave the European Union. That’s a sovereign decision of the British people — we respect it,” Varadkar said, before heading into a bilateral meeting in Gothenburg with U.K. Prime Minister Theresa May. “But the British government went further,” Varadkar said.“The British government decided that the U.K. would leave the customs union, they would leave the single market, they have taken that off the table before we even talk about trade,” he continued. “What we want to take off the table before we even talk about trade is any idea that there would be a hard border, physical border or a border resembling the past in Ireland.” Varadkar said he remained optimistic “sufficient progress” could be made by the December EU leaders’ summit in Brussels, but that the EU was prepared to wait for “concessions” and that it sometimes seemed the U.K. was not sufficiently prepared for the entire Brexit process. “It is certainly possible that we can come to conclusions in December allowing Phase 2 talks to begin,” Varadkar said. “But, you know, if we have to wait until the new year, or if we have to wait for further concessions, so be it. What I think would be in our all of our interests is that we proceed to Phase 2 if we can in December. It’s 18 months since the referendum, it’s 10 years since people wanted a referendum, started agitating for one. Sometimes it doesn’t seem like they thought all of this through.”
Signs of Russian Meddling in Brexit Referendum — More than 150,000 Russian-language Twitter accounts posted tens of thousands of messages in English urging Britain to leave the European Union in the days before last year’s referendum on the issue, a team of researchers disclosed on Wednesday. More than 400 of the accounts that Twitter has already identified to congressional investigators as tools of the Kremlin, other researchers said, also posted divisive messages about Britain’s decision on withdrawing from the bloc, or Brexit, both before and after the vote. Most of the messages sought to inflame fears about Muslims and immigrants to help drive the vote, suggesting parallels to the strategy that Russian propagandists employed in the United States in the 2016 election to try to intensify the polarization of the electorate. The separate findings amount to the strongest evidence yet of a Russian attempt to use social media to manipulate British politics in the same way the Kremlin has done in the United States, France and elsewhere. The disclosures came just two days after Prime Minister Theresa May of Britain delivered a speech accusing Russia of using cyberattacks and online propaganda to “undermine free societies” and “sow discord in the West.” On Tuesday, the chief of the National Cyber Security Center released a summary of a prepared speech asserting that in the past 12 months, Russian hackers had unleashed cyberattacks on the British energy grid and the telecommunications and media industries. Taken together, the flurry of reports and accusations adds to growing pressure on Twitter, Facebook and other social media companies to disclose more of their internal records about advertising payments and account registrations, information essential to illuminating the extent of Russian meddling in the referendum on Brexit.
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