FOMC Minutes: Several Participants Worried about "A sharp reversal in asset Prices" -- A couple of key excerpts, the first on asset prices, and the second that low inflation might "prove more persistent". From the Fed: Minutes of the Federal Open Market Committee, October 31-November 1, 2017: In light of elevated asset valuations and low financial market volatility, several participants expressed concerns about a potential buildup of financial imbalances. They worried that a sharp reversal in asset prices could have damaging effects on the economy. It was noted, however, that elevated asset prices could be partly explained by a low neutral rate of interest. It was also observed that regulatory changes had contributed to an appreciable strengthening of capital and liquidity positions in the financial sector over recent years, increasing the resilience of the financial system to potential reversals in valuations. ... Many participants observed, however, that continued low readings on inflation, which had occurred even as the labor market tightened, might reflect not only transitory factors, but also the influence of developments that could prove more persistent. A number of these participants were worried that a decline in longer-term inflation expectations would make it more challenging for the Committee to promote a return of inflation to 2 percent over the medium term. These participants' concerns were sharpened by the apparently weak responsiveness of inflation to resource utilization and the low level of the neutral interest rate, and such considerations suggested that the removal of policy accommodation should be quite gradual. In contrast, some other participants were concerned about upside risks to inflation in an environment in which the economy had reached full employment and the labor market was projected to tighten further, or about still very accommodative financial conditions. They cautioned that waiting too long to remove accommodation, or removing accommodation too slowly, could result in a substantial overshoot of the maximum sustainable level of employment that would likely be costly to reverse or could lead to increased risks to financial stability. A few of these participants emphasized that the lags in the response of inflation to tightening resource utilization implied that there could be increasing upside risks to inflation as the labor market tightened further.
Fed signals December hike even as debate on prices persist - Federal Reserve officials meeting earlier this month saw an interest-rate increase in the near term even as divisions persisted over the policy path forward amid tepid inflation. "Many participants thought that another increase in the target range for the federal funds rate was likely to be warranted in the near term if incoming information left the medium-term outlook broadly unchanged," according to minutes from their Oct. 31-Nov. 1 gathering, released in Washington on Nov. 22. Policy makers held rates steady at the meeting but are expected to hike next month as they continue with gradual tightening. Unemployment is at a 16-year low, although inflation remains well beneath their 2% target. The minutes showed that while Fed officials remain confident in the labor market and above-trend economic growth, several are looking for stronger signs that price gains will pick up. A few even want to see inflation on an upward path before lifting rates again, underlining a persistent divide on the policy-setting Federal Open Market Committee. Stocks stayed lower, the dollar declined and yields on two-year Treasury notes dipped after the minutes were released. With a December Fed rate hike almost fully priced in, market-implied odds of another rate increase by March held around 55%, based on trading in federal funds futures. Officials have been projecting three rate increases in 2018, but that outlook could be called into question if economic data fail to meet Fed expectations. Analysts are watching closely for any signal that central-bank officials will mark down their outlooks when they submit economic projections at their Dec. 12-13 meeting. "How far are we from the end? That’s really the unanswered question in this market," Gennadiy Goldberg, a rates strategist at TD Securities in New York, said before the minutes were published. "Anything that changes the status quo for 2018 is interesting." Inflation has averaged 1.6% so far this year after stripping out volatile food and fuel, and it came in at just 1.3% in September, stubbornly below the Fed’s goal. Many participants observed that low inflation "might reflect not only transitory factors, but also the influence of developments that could prove more persistent," according to the minutes. On the other hand, a few said there could be "increasing upside risks" to inflation as the labor market continues to tighten. Even as inflation baffles policy makers, they are on the lookout for asset bubbles after a long period of low interest rates. Several participants "expressed concerns about a potential buildup of financial imbalances," adding that a sharp reversal in asset prices could hurt the economy, according to the minutes.
Yellen to step down from Fed board after Powell confirmation - — Federal Reserve Chair Janet Yellen announced Monday that she intends to step down from the Board of Governors after her successor is sworn in when her term expires early next year, ending any speculation that she may stay on.In a press release issued Monday afternoon, Yellen said that it has been a “privilege and honor” to serve in the Federal Reserve System for over 30 years. She said that she was gratified that the financial system is “much stronger than it was a decade ago” in the aftermath of the financial crisis. She also highlighted the Fed’s history as a source of institutional, nonpartisan strength, and predicted that her successor, Jerome Powell, will honor those traditions.“The Federal Reserve has been and remains a strong institution, focused on carrying on its vital public mission with integrity, in a professional, non-partisan manner,” Yellen said. “I am confident that my successor as Chair, Jerome H. Powell, is deeply committed to that mission and I will do my utmost to ensure a smooth transition.” Yellen has maintained since early this year that she would serve out her term as chair, which expires in February. President Trump was also reportedly considering reappointing her as Fed chair, but ultimately selected Yellen's fellow board member Powell earlier this month.
Cryptocurrencies don’t belong in central banks - Tyler Cowen - That is the topic of my latest Bloomberg column. Here is one excerpt: An additional reason for skepticism stems from the nature of crypto assets. The word “cryptocurrency” is far more common than “crypto asset,” but it’s a misleading term. Bitcoin, for instance, is used only rarely in retail transactions, and for all its success it isn’t becoming more important as a medium of exchange. Bitcoin thus isn’t much of a currency in the literal sense of that term. There is a version of bitcoin, Bitcoin Cash, that changed the initial rules to be better suited as an exchange medium, but it isn’t nearly as popular. If you think of these assets as “cryptocurrencies,” central bank involvement will seem natural, because of course central banks do manage currencies. Instead, this new class of assets is better conceptualized as ledger systems, designed to create agreement about some states of the world without the final judgment of a centralized authority, which use a crypto asset to pay participants for maintaining the flow and accuracy of information. Arguably these innovations come closer to being substitutes for corporations and legal systems than for currencies. Put in those terms, an active (rather than merely supervisory) role for central banks in crypto assets is suddenly far from obvious. Consider other financial innovations: Does anyone suggest that central banks should run their own versions of ETFs or high-frequency trading? Is there a need for central banks to start managing the development of accounting and governance systems?Central banks are too conservative anyway, which of course is how they should be. Don’t forget: …consider a simple question: Would any central bank have had the inspiration or taken the risk of initiating the bitcoin protocol in the first place?
Chicago Fed "Index Points to a Pickup in Economic Growth in October" -- From the Chicago Fed: Index Points to a Pickup in Economic Growth in October Led by improvements in production-related indicators, the Chicago Fed National Activity Index (CFNAI) rose to +0.65 in October from +0.36 in September. One of the four broad categories of indicators that make up the index increased from September, but three of the four categories made positive contributions to the index in October. The index’s three-month moving average, CFNAI-MA3, increased to +0.28 in October from +0.01 in September. This graph shows the Chicago Fed National Activity Index (three month moving average) since 1967. This suggests economic activity was above the historical trend in October (using the three-month average)
U.S. Growth Forecasts Are on the Rise - Don’t look now, but U.S. growth forecasts are moving higher. That’s helping to support U.S. stocks. Projections for U.S. economic growth from two Federal Reserve banks have risen in recent weeks. The Federal Reserve Bank of New York on Friday forecast that gross domestic product will rise 3.8% in the fourth quarter, up from a forecast of 3.2% a week earlier. A separate measure from the Federal Reserve Bank of Atlanta forecast 3.4% growth last week. Research firm DataTrek noted that the rival forecasts are outpacing projections from human economists, who on average expect 2.7% growth for the quarter. Even if the less optimistic Atlanta Fed model is correct, it would be the best quarter for the U.S. economy in more than three years. The central banks’ forecasts are derived from statistical models that track incoming economic data, and are used by traders to gauge the health of the economy. The estimates have been the subject of some contention as they often offer diverging views on the health of the economy. The recent harmony between the two measures means “economists may have some catching up to do,” according to Nicholas Colas, co-founder of DataTrek.
Pete Peterson Has Won - Stephanie Kelton - The US is broke. Government deficits are de facto evidence of a government gone wild. We’re careening toward Greece. Entitlements are the root cause of our fiscal woes, and the Chinese are coming for our grandchildren. How many Americans believe this garbage? My guess? Most of them. Pete Peterson has won and the American people have lost. There is no effective counter narrative, not even from the left. Nearly all “progressives” have accepted the fundamental premise that the federal government is like a great big household. That it faces the same kinds of constraints that you and I face. That it should spend only what it takes in and that deficits are morally and/or fiscally irresponsible. President Obama told the nation, “We’re out of money.” All of this is utter nonsense, as readers of this blog know, and it leaves progressives in the weak position of pointing at the 1% and yelling, “Get ’em! They’ve got all the money!” Want to care for seniors? Tax the 1%. Want safe roads, good schools, investment in alternative energy? Tax the 1%. The problem, of course, is that the 1% tend to fight back …. and win!The truth is, we’re not broke. The US dollar comes from the US government (not from China, as we’re led to believe). The US government is not revenue constrained. It is the Issuer of the currency, not the User of the currency like you and I. It plays by a completely different set of rules, yet it behaves as if it is still bound by the shackles of a gold standard. It behaves irresponsibly when it proposes policies to reduce the deficit when unemployment is high and inflation is low. We’re letting millions of Americans suffer because Pete Peterson and his ilk have convinced virtually everyone that we face a fiscal crisis in this country. We live in fear of the Chinese, the Ratings Agencies, the Bond Vigilantes, Indentured Grandchildren, and so on. And this fear is used by politicians on both sides of the political aisle to sell “sacrifice” to the rest of us. And we keep buying. And here’s the really sad part. It will never be enough.
Congress speeds toward shutdown over Dreamers - Concern is growing in both parties that a clash over the fate of Dreamers will trigger a government shutdown this December. House conservatives have warned Speaker Paul Ryan against lumping a fix for undocumented immigrants who came to the country as minors into a year-end spending deal. They want him to keep the two issues separate and delay immigration negotiations into 2018 to increase their leverage — which both Ryan and the White House consider reasonable. But many liberal Democrats have already vowed to withhold votes from the spending bill should it not address Dreamers, putting Democratic leaders Nancy Pelosi and Chuck Schumer in an awkward spot if they don’t go along.Democrats know Republicans need their votes to fund the government past the current Dec. 8 deadline, and many want Pelosi and Schumer to stand firm against the must-pass bill until leaders save the Obama-era Deferred Action for Childhood Arrivals program.“We want a clean Dream Act,” said Rep. Luis Gutierrez (D-Ill.), referring to legislation that provides a pathway to citizenship for the young adults. “That is what it’s going to take for me and others to sign on.” Ryan, Pelosi, Schumer and Majority Leader Mitch McConnell are already discussing a short-term government-funding extension to buy themselves more time to negotiate, likely culminating in a Christmastime collision.
Who Gets To Push The Nuclear Button? by Paul Craig Roberts -- William Binney is the former National Security Agency (NSA) official who created NSA’s mass surveillance program for digital information. He says that if the Russian government had conspired with Trump, hacked the Democratic National Committee’s computer, or in any way influenced the outcome of the last US presidential election, the National Security Agency would have the digital evidence. The fact that we have been listening to the unsubstantiated charges that comprise “Russiagate” for more than one year without being presented with a scrap of evidence is complete proof that Russiagate is entirely fake news. The fake news originated with CIA director John Brennan and FBI director Comey conspiring with the DNC in an effort to discredit and unseat President Trump and at a minimum prevent him from damaging the vast power and profit of the military/security complex by normalizing relations with Russia.Consider what this means.The directors of the CIA and FBI made up a totally false story about a newly elected President and fed the lies to the presstitutes and Congress. The presstitutes never asked for a drop of evidence and enlarged the Brennan/Comey lie with a claim that all 17 US intelligence agencies had concluded that Russia had interfered. In actual fact, a handful of carefully selected people in three of the agencies had prepared, perhaps under duress, a conditional report that had no evidence behind it. That it was fake news created to control President Trump was completely obvious, but corrupt security officials, corrupt senators and representatives, a corrupt DNC, and corrupt media used constant repetition to turn a lie into truth.Having shoved Trump into the militarist camp, his enemies have turned on Trump as an unstable, volatile person who might push the button. Senator Bob Corker (R, TN) and Senator Chris Murphy (D,CT) are using the Senate Foreign Relations Committee to portray President Trump as a quixotic person who shouldn’t have his finger on the nuclear button. We have gone full circle, from Trump who wants to defuse nuclear tensions to Trump who might push the button. If Senators Corker and Murphy were really concerned and not just orchestrating a new way to attack Trump, they would bring out the fact that Russiagate is a hoax that has made nuclear war more likely.
The Trump Doctrine: Making Nuclear Weapons Usable Again - Michael Klare - Maybe you thought America’s nuclear arsenal, with its thousands of city-busting, potentially civilization-destroying thermonuclear warheads, was plenty big enough to deter any imaginable adversary from attacking the U.S. with nukes of their own. Well, it turns out you were wrong.The Pentagon has been fretting that the arsenal is insufficiently intimidating. After all — so the argument goes — it’s filled with old (possibly unreliable) weapons of such catastrophically destructive power that maybe, just maybe, even President Trump might be reluctant to use them if an enemy employed smaller, less catastrophic nukes on some future battlefield. Accordingly, U.S. war planners and weapons manufacturers have set out to make that arsenal more “usable” in order to give the president additional nuclear “options” on any future battlefield. (If you’re not already feeling a little tingle of anxiety at this point, you should be.) While it’s claimed that this will make such assaults less likely, it’s all too easy to imagine how such new armaments and launch plans could actually increase the risk of an early resort to nuclear weaponry in a moment of conflict, followed by calamitous escalation.That President Trump would be all-in on making the American nuclear arsenal more usable should come as no surprise, given his obvious infatuation with displays of overwhelming military strength. Under existing nuclear doctrine, as imagined by the Obama administration back in 2010, this country was to use nuclear weapons only “in extreme circumstances” to defend the vital interests of the country or of its allies. Prohibited was the possibility of using them as a political instrument to bludgeon weaker countries into line. However, for Donald Trump, a man who has already threatened to unleash on North Korea “fire and fury like the world has never seen,” such an approach is proving far too restrictive. He and his advisers, it seems, want nukes that can be employed at any potential level of great-power conflict or brandished as the apocalyptic equivalent of a giant club to intimidate lesser rivals. Making the U.S. arsenal more usable requires two kinds of changes in nuclear policy: altering existing doctrine to eliminate conceptional restraints on how such weapons may be deployed in wartime and authorizing the development and production of new generations of nuclear munitions capable, among other things, of tactical battlefield strikes. All of this is expected to be incorporated into the administration’s first nuclear posture review (NPR), to be released by the end of this year or early in 2018.
"We're Not Stupid" - Top US Nuclear Commander Would Disobey "Illegal" Trump Orders -- A few short months after Admiral Scott Swift, Commander of the US Navy’s Pacific Fleet, said he would obey a hypothetical order to launch a nuclear strike against China if the president chose to give it, Air Force Gen. John Hyten - America's top nuclear commander - said Saturday he would push back against President Trump if the president ordered a nuclear launch the general believed to be "illegal."When an audience member asked Hyten, who was speaking at a national security conference in Halifax Canada, about the hypothetical scenario, he responded by assuring his interlocutor that military commanders “aren’t stupid.” Here's CBS:Air Force Gen. John Hyten, commander of the U.S. Strategic Command (STRATCOM), told an audience at the Halifax International Security Forum in Halifax, Nova Scotia, on Saturday that he has given a lot of thought to what he would say if Mr. Trump ordered a strike he considered unlawful."I think some people think we're stupid," Hyten said in response to a question about such a scenario. "We're not stupid people. We think about these things a lot. When you have this responsibility, how do you not think about it?" Hyten explained the process that would follow such a command. As head of STRATCOM, Hyten is responsible for overseeing the U.S. nuclear arsenal."I provide advice to the president, he will tell me what to do," Hyten added. "And if it's illegal, guess what's going to happen? I'm going to say, 'Mr. President, that's illegal.' And guess what he's going to do? He's going to say, 'What would be legal?' And we'll come up with options, with a mix of capabilities to respond to whatever the situation is, and that's the way it works. It's not that complicated."
Nuclear strategists call for bold move: scrap ICBMs (Reuters) - Imagine it is 3 a.m., and the president of the United States is asleep in the White House master bedroom. A military officer stationed in an office nearby retrieves an aluminum suitcase - the “football” containing the launch codes for the U.S. nuclear arsenal - and rushes to wake the commander in chief. Early warning systems show that Russia has just launched 100 intercontinental ballistic missiles (ICBMs) at the United States, the officer informs the president. The nuclear weapons will reach U.S. targets in 30 minutes or less. Bruce Blair, a Princeton specialist on nuclear disarmament who once served as an ICBM launch control officer, says the president would have at most 10 minutes to decide whether to fire America’s own land-based ICBMs at Russia. “It is a case of use or lose them,” Blair says. A snap decision is necessary, current doctrine holds, because U.S. missile silos have well-known, fixed locations. American strategists assume Russia would try to knock the missiles out in a first strike before they could be used for retaliation. Of all weapons in the U.S. nuclear arsenal, the ICBM is the one most likely to cause accidental nuclear war, arms-control specialists say. It is for this reason that a growing number of former defense officials, scholars of military strategy and some members of Congress have begun calling for the elimination of ICBMs. They say that in the event of an apparent enemy attack, a president’s decision to launch must be made so fast that there would not be time to verify the threat. False warnings could arise from human error, malfunctioning early warning satellites or hacking by third parties. Once launched, America’s current generation of ICBM missiles, the Minuteman III, cannot be recalled: They have no communication equipment because the United States fears on-board gear would be vulnerable to electronic interference by an enemy. These critics recommend relying instead on the other two legs of the U.S. nuclear “triad”: submarine-launched ballistic missiles, and heavy bombers armed with hydrogen bombs or nuclear-warhead cruise missiles. The president would have more time to decide whether to use subs or bombers. Bombers take longer to reach their targets than ICBMs and can be recalled if a threat turns out to be a false alarm.
White House Declares North Korea A State Sponsor Of Terror -- Following comments by the White House last week that the administration would soon bring more pressure on North Korea, President Donald Trump has confirmed as much to a crowd of reporters, adding that, as of today, that North Korea would once again be designated a terror sponsor. Trump cited the killing of North Korean leader Kim Jong-Un's estranged half brother in a Malaysian airport earlier this year, as well as the North’s horrific treatment of Ohio college student Otto Warmbier, as justifications for the sanctions. “North Korea has supported acts of international terrorism, including assassinations on foreign soil,” Trump said.
Trump And Putin Speak "For More Than An Hour" By Phone; Discuss Syria, North Korea, Ukraine - As previewed this morning, when we discussed the surprise meeting between Syria's al-Assad and Vladimir Putin in which the Syrian president said “Today, on behalf of the Syrian people, I extend my gratitude to you for what you did, we will never forget it", the Russian president was set to hold a phone call with Donald Trump ahead of further meetings in Sochi on Wednesday with the leaders of Iran and Turkey. Moments ago both the Kremlin and White House released read outs of the talking points on the call that took place around noon. According to ABC, president Donald Trump spoke for more than an hour Tuesday by phone with Russian President Vladimir Putin. Syria, Iran, North Korea and Ukraine were on the agenda, the White House said. The Kremlin echoed the White House, and said that the two leaders discussed "a number of topics", including the Syrian crisis, the North Korean nuclear problem and the situation in Afghanistan as well as the Ukrainian crisis. Putin briefed Trump in the phone call about his talks with the Syrian leader and plans for a political settlement in Syria. Putin stressed that there were no alternatives for full implementation of the Minsk agreements on peaceful settlement of the armed conflict in eastern Ukraine. . "Considering the crisis situation in southeastern Ukraine, the Russian president pointed out the absence of a real alternative for the unconditional implementation of the Minsk accords signed on February 12, 2015," the statement said. The Kremlin also said Putin also called for coordination of anti-terror efforts with the U.S. Afghanistan was also discussed, the Kremlin said.
EXCLUSIVE: Trump’s ‘ultimate deal’ seen as ultimatum to Palestinians - A US team is in the process of finalising President Donald Trump’s "ultimate deal" for peace between Palestinians and Israel, a Western diplomat and Palestinian officials have told Middle East Eye. The diplomat, who spoke on condition of anonymity because he was not authorised to discuss the issue with the media, said that the deal will include:
- The establishment of a Palestinian state, whose borders will include the Gaza Strip as well as Areas A, B and parts of Area C in the West Bank (see map below)
- Donor countries to provide $10bn to establish the state and its infrastructure including an airport, a sea port in Gaza, housing, agriculture, industrial areas and new cities
- The status of Jerusalem and the issue of returning refugees to be postponed until later negotiations
- Final negotiations to include regional peace talks between Israel and Arab countries, led by Saudi Arabia
The diplomat said that Jared Kushner, Trump’s special adviser and head of his team for the peace process, visited Saudi Arabia recently and briefed Saudi Crown Prince Mohammed bin Salman, who is also known as MBS, about the plan. Kushner also asked the Saudis to help persuade Palestinian President Mahmoud Abbas to accept the plan, which will be officially presented in early 2018. The diplomat, who is very close to the US team, said bin Salman had met with Abbas in early November to brief him on the proposal. The crown prince asked the Palestinian president to accept the plan and be positive about it. “MBS is very enthusiastic about the plan,” the diplomat said, “and he is eager to see a peace deal between the Palestinians and Israel first, then between Israel and the Arab countries, as a first step in forming a coalition between Saudi Arabia and Israel to counter the Iranian threat.” The diplomat said that bin Salman told Kushner he is willing to invest large amounts of capital in the deal, and would give the Palestinian leadership the necessary incentives for a positive response.
Palestinian Authority says contacts with US consulate, American officials, have been frozen - The Palestinians have frozen ties with the US Consulate in Jerusalem and with American officials visiting the West Bank in response to the State Department’s decision not to renew the certification of the PLO’s representative office in Washington, a senior adviser to Palestinian Authority President Mahmoud Abbas said on Tuesday. The PLO representative office is the unofficial Palestinian Embassy in the American capital. Without a certification, it could be shut down. “Communications with the consulate in Jerusalem and meetings between American and Palestinian officials in Palestine are currently frozen because of the decision not to renew the PLO office in Washington’s certification,” Abbas’s diplomatic affairs adviser, Majdi al-Khalidi, told The Jerusalem Post. “This is temporary until they clarify to us if the office is closed or open. If they tell us the office is closed, we will continue to freeze our communications.” According to Khalidi, if Jared Kushner, President Donald Trump’s senior adviser, or Jason Greenblatt, the administration’s main peace envoy, came to the West Bank, PA officials would not be able to meet with them. Khalidi added that the PLO representative in Washington, Husam Zomlot, and top Palestinian negotiator Saeb Erekat were in contact with the Trump Administration. “Saeb Erekat and Ambassador Zomlot are meeting with the higher authorities in Washington to seek clarifications about whether the office is going to be closed or not,” Khalidi said. “We are still waiting to know if they actually plan to close the office.” When asked to respond to Khalidi’s remarks about contacts being frozen with the US consulate and American officials visiting the West Bank, a State Department official said: “We continue to be in contact with Palestinian officials about the status of the PLO office in Washington, as well as about our larger efforts to advance a lasting and comprehensive peace. These discussions are ongoing.” A spokesman at the US Consulate in Jerusalem did not respond to a request for comment.
Abbas refuses to answer Jared Kushner's phone call – Haaretz reported on Thursday 23 November, 2017, that Palestinian President Mahmoud Abbas refused Wednesday to answer a phone call from Jared Kushner, adviser to US President Donald Trump who is responsible for mediating an Israeli-Palestinian peace deal. Instead of answering Kushner’s call, Abbas forwarded it to the representative of the Palestinian Authority in Washington, according to the Lebanese TV Channel Al-Mayadeen.This occurred amid the state of tension which resurfaced following Washington’s decision not to renew the license of the PLO office in the US capital, prompting President Abbas to announce the freezing of Palestinian contacts with the United States.The White House demands that Palestine withdraws their request for the International Criminal Court in to investigate Israel and not resist the US peace initiative, as two preconditions for the PLO to continue its activity in the United States. Senior Palestinian government official, who is well-informed of these updates, told Haaretz that Abbas’s orders to sever ties were being implemented by senior officials while communication with US officials at the lower level is still maintained. The source clarified that “it is important for Palestinians to convey a message to the US government, and not severing ties for the sake of cutting contacts.” The source pointed out also that “in this case we should not forget the game of power between the parties, especially when it comes to a global force like the United States.”
Trump Revealed Israel’s Secret Syria Raid to Russian Diplomats - The intelligence that President Donald Trump leaked to top Russian officials in an Oval Office meeting in May concerned a highly sensitive Israeli special forces mission, it has been revealed. The operation, which took place in February 2017, involved commandos infiltrating an area under the control of the Islamic State militant group (ISIS), to place a surveilance device. The intelligence obtained through the device prompted a short-term ban on laptops on flights from several majority-Muslim countries to the US and the UK. The target of the operation, according to a Vanity Fair report published on Wednesday, was an ISIS cell attempting to recreate a weapon developed by a top Al-Qaeda bombmaker. The weapon consisted of an explosive device that could be concealed inside a laptop and smuggled past airport security checks, raising the spectre of high-casualty attacks against civilian airlines. Trump’s disclosure at the May 10 meeting with Russian Foreign Minister Sergei Lavrov and Russia's then-ambassador to Washington Sergei Kislyak has been widely publicised at the time, but details of the operation itself have not previously been disclosed. In particular, Trump is alleged to have revealed the name of the city where the operation took place, leading to fears that the source who alerted the Israelis to ISIS's intentions may be compromised. The president's carelessness with sensitive information threatened to deal a blow to the historically close relationship between American and Israeli intelligence agencies. Altough Israel enjoys a relatively robust relationship with Russia, Moscow is also a key ally of the regime of Syrian president Bashar al-Assad - a historical enemy of Israel - and of Iran, widely seen as Israel's main regional rival. “If this report is true, then giving those details about operations is something that is exclusively out of the question,” says Major (res.) Aviv Oreg, former head of the Al-Qaeda and global jihad desk for Israel's Military Intelligence, told Newsweek over the phone. “I’m sure Israel will have second thoughts about giving information.”
Remains Of U.S. Soldier Found In Niger After Widow Questioned What Was In Coffin At Funeral - Additional remains of a U.S. soldier killed in a mysterious Niger ambush were reportedly found in the African nation earlier this month — even though his funeral had already been held, with his widow questioning whether he was even in the casket. The military and an FBI team in Niger discovered more remains of Sgt. La David Johnson about a month after he and three other American soldiers were killed in the ambush, CNN reported Tuesday. The announcement adds another layer of confusion to the ambush, which is still under investigation and has led to continuing factual disputes. Johnson's wife, Myeshia Johnson, had told ABC News in October the military barred her from seeing her husband's body, making her very suspicious of what was in the casket at his funeral in later that month. It was a closed casket funeral. "They won't show me a finger, a hand. I know my husband's body from head to toe, and they won't let me see anything," she said. "I don't know what's in that box. It could be empty, for all I know." "We can confirm that the Armed Forces Medical Examiner has positively identified these remains as those of Sgt. Johnson," Dana W. White, chief spokesperson for the Department of Defense, said in a statement Tuesday. Johnson was part of a 12-man U.S. special forces team that was ambushed Oct. 4 by militants believed to be linked to the Islamic State. Five Nigerien soldiers were also killed in the shooting, which broke out as the soldiers left a meeting with local officials near Tongo Tongo. The Trump administration waited nearly two weeks to acknowledge the attack, and details about it remain hazy while an investigation is ongoing. The soldiers were initially believed to have been attacked by roughly 50 militants, but that estimate rose to approximately 200 in recent days. President Donald Trump raised even more controversy when Johnson's widow accused him of making an insensitive condolence call in which he said her fallen husband "knew what he signed up for." Trump denied this and accused the widow of lying.
Tillerson accused of violating law on child soldiers (Reuters) - A group of about a dozen U.S. State Department officials have taken the unusual step of formally accusing Secretary of State Rex Tillerson of violating a federal law designed to stop foreign militaries from enlisting child soldiers, according to internal documents reviewed by Reuters. A confidential State Department “dissent” memo, which Reuters was first to report on, said Tillerson breached the Child Soldiers Prevention Act when he decided in June to exclude Iraq, Myanmar, and Afghanistan from a U.S. list of offenders in the use of child soldiers. This was despite the department publicly acknowledging that children were being conscripted in those countries. [tmsnrt.rs/2jJ7pav] Keeping the countries off the annual list makes it easier to provide them with U.S. military assistance. Iraq and Afghanistan are close allies in the fight against Islamist militants, while Myanmar is an emerging ally to offset China’s influence in Southeast Asia. Documents reviewed by Reuters also show Tillerson’s decision was at odds with a unanimous recommendation by the heads of the State Department’s regional bureaus overseeing embassies in the Middle East and Asia, the U.S. envoy on Afghanistan and Pakistan, the department’s human rights office and its own in-house lawyers. [tmsnrt.rs/2Ah6tB4] “Beyond contravening U.S. law, this decision risks marring the credibility of a broad range of State Department reports and analyses and has weakened one of the U.S. government's primary diplomatic tools to deter governmental armed forces and government-supported armed groups from recruiting and using children in combat and support roles around the world,” said the July 28 memo. State Department spokeswoman Heather Nauert, questioned at length by reporters on the issue at her daily briefing, strongly defended Tillerson’s decision as valid and in “technical compliance with the law in the way he read it.” ”No one in the United States government likes the idea of the use of child soldiers,“ she said. ”It’s abhorrent. Asked at a photo opportunity with the visiting Peruvian foreign minister about his decision, Tillerson sidestepped any direct response to the dissenting officials’ complaint.
Amazon-opoly: Jeff Bezos May Be About To Control $53 Billion In Federal Government Spending -- Buried deep in this year’s defense spending bill is a provision that would move Defense Department purchases of commercial off-the-shelf products to online marketplaces. A summary of the proposal, which was inserted into the legislation by House Armed Services Committee Chairman Mac Thornberry, argues it is needed to save money over the burdensome and expensive current system. It pointed to a report from the Inspector General of the Government Services Administration that found some IT equipment could be purchased more cheaply on the open market than through the GSA’s “schedules.” In response, the plan calls for developing an online marketplace platform through which federal agencies can buy products such as paper clips, bottled water, computers, office furniture and more — just as any business would do. But it also calls for this platform to be designed to “enable government-wide use of such marketplaces.” This means the government is looking only for a procurement and supply management firm big enough to offer multiple suppliers for the same product with constantly changing selection and prices and serve the entire U.S. government. That leaves just one likely possibility - Amazon Business - for basically monopoly control of $53 billion in federal purchasing, much of the supplies for which comes from no-bid contracts.Amazon provides a platform for e-companies to sell through to their own customers. Itreceives 15 percent to 20 percent of the proceeds from such sales, which means a huge revenue stream for Amazon for doing basically nothing while vendors are forced to cough up as much as half their margin.
Canada, Mexico to question U.S. auto content demands at NAFTA talks (Reuters) - Canada and Mexico plan to confront the United States over its demand for tougher NAFTA automotive content rules, people briefed on the matter said on Monday, underlining slow progress on the trade pact’s most important issues. The Canadian and Mexican negotiators are expected to rebut the U.S. autos demands on Tuesday, the final day of the latest round of negotiations to update the North American Free Trade Agreement. “Everybody has more preparations to do,” on the all-important automotive rules of origin, Jerry Dias, president of Canada’s Unifor union, said on the sidelines of the talks after a briefing with Canadian negotiators. U.S. President Donald Trump has threatened to quit NAFTA, which has reshaped the continent’s auto sector over the past 23 years, unless major changes can be made to return manufacturing jobs to the United States. Vehicles and auto parts account for most of the $64 billion U.S. trade deficit with Mexico, a sore spot for Trump. A second person briefed on the negotiations said the autos session would take place on Tuesday. Although the talks are due to wrap up in March 2018 after the seventh and final round, progress has been slow, and there are no signs of compromise on a series of contentious demands the United States unveiled at the fourth round last month. The Trump administration wants half of the content of all North American-built autos be produced in the United States and that the regional vehicle content requirement be sharply increased to 85 percent from the current 62.5 percent. “There is no product made in North America that meets this rule of origin requirement,” said Matt Blunt, president of the American Automotive Policy Council, which represents Ford Motor Co
The New TPP May Sink Trump’s Other Trade Dreams – One of President Donald Trump’s first steps in office was to pull the United States out of the Trans-Pacific Partnership, a 12-nation trade deal that was the centerpiece of his predecessor’s Asia policy. Over the weekend, the other 11 countries agreed to go ahead — without the United States. That doesn’t just have implications for U.S. trade with fast-growing economies around the Pacific Rim. It also threatens Trump’s plans to renegotiate the existing North American Free Trade Agreement with Canada and Mexico, with talks set to resume later this week. The Trump administration has laid down harsh demands for Canada and Mexico, including rewriting the rules governing auto manufacturing and requiring renegotiation every five years. Both of those countries have called the demands red lines — and now that a revived TPP is back on track, both have more leverage to push back against the United States. History shows that “having another deal already in place or almost in place certainly strengthens your hand” in trade negotiations, said Duncan Wood, director of the Mexico Institute at the Wilson Center. In particular, Canada and Mexico now have a new way to push back against U.S. demands that more auto components be built in the United States. Under current NAFTA rules, 62.5 percent of vehicle parts for cars sold under the pact have to come from one of the three countries in the trade pact. The Trump administration, which blames NAFTA for U.S. job losses, wants to rewrite the deal so that fully half of all automotive components come from the United States alone, to the disadvantage of Canada and Mexico. (Even the U.S. auto industry opposes Trump’s plan because it would upend existing supply chains.) The revived TPP includes less restrictive — not more restrictive — rules on where automotive components can be made. Since both Canada and Mexico are in that pact, they’d be hard-pressed to adopt different rules just to deal with the United States. “The Trump administration has badly miscalculated the leverage it has in terms of rules of origin,
Under Trump, U.S. Companies Face a Rough Road on Trade - In October 2015, as President Barack Obama was hoping to rush the newly signed Trans-Pacific Partnership trade deal through Congress, he invited leaders of the pharmaceutical industry to the White House. The industry had emerged as a key obstacle to the largest free trade agreement in history, insisting that TPP didn’t provide enough protection for an expensive class of nature-based drugs called biologics. Obama made the case for pharma’s leaders to accept half a loaf: The eight years they’d get under TPP were way better than the zero years they’d get without it, and his administration would have no way to extract a better deal if it tried to reopen negotiations. The industry reps did not dispute either point. But they said they would still oppose the trade deal, even though it beat their status quo. Ultimately, Congress punted on TPP, and President Donald Trump formally withdrew from the pact in January. But now the deal is moving forward—just without the United States, and without 20 provisions originally included at the behest of the United States. One of the provisions the remaining 11 TPP nations deleted was the eight years of exclusivity for biologics. What the drug industry got, in the end, was zero. As the U.S. continues its effort to renegotiate the North American Free Trade Agreement with Canada and Mexico this week, the Trump administration has now threatened to walk away from NAFTA if the demands aren’t met. But multilateral trade deals are usually more about mutually painful compromises than my-way-or-the-highway tactics, and free traders point to TPP as evidence that countries that leave the table tend to get added to the menu. Pharma wasn’t the only U.S. loser in the new version of TPP. The minus-America deal now moving forward also deletes a provision that would have expanded access for U.S. express delivery services like UPS and FedEx, and several additional intellectual property protections that would have benefited U.S. software, music and publishing companies. It also dropped measures promoting wildlife conservation and labor rights that U.S. environmental groups and unions had considered too weak, but were clearly stronger than nothing. U.S. exporters will also be unable to take advantage of TPP’s lower tariffs on 18,000 products. And in general, the U.S. will lose some of its influence along the Pacific Rim. “When you’re too greedy, you can end up with nothing.”
Senate Finance tax reform package mirrors House on carried interest, endowments tax - The Senate Finance Committee late Thursday approved its version of tax reform, hours after the House of Representatives finished its bill, both largely along party lines with 13 House Republicans opposing it.The Senate version ended up keeping intact the tax treatment of 401(k) contributions, the same as the House bill. Both versions also call for adding a new 1.4% tax on large private university endowments' net investment income.Public pension funds would see a new tax on unrelated business income from alternative investments such as real estate and private equity from both versions, although the Senate Finance bill differs on how the tax owed would be calculated.Deductibility of interest by private equity and other firms is capped at 30% of adjusted income in both bills, with some exceptions for real estate. Private equity, real estate and venture capital firms won a lower, 25% tax treatment of pass-through business income for partnerships in the House bill, while the Senate Finance version calls instead for a 17.4% tax deduction on up to 50% on certain wages. The politically charged topic of carried interest was only addressed in the House bill until a last-minute amendment was approved by the Senate Finance Committee. Both versions limit partners' ability to pay a lower capital gains rate to investments held for at least three years.
“It’s a Ponzi Scheme”: Wall Street Fears Trump’s Deranged Tax Plan Could Kick Off Economic Euthanasia - “It’s a Ponzi scheme,” a Wall Street executive told me, dismissing the idea that a multi-trillion dollar tax cut for multinational corporations would trickle down throughout the economy and also pay for itself. It’s a view that’s widely shared among the bankers, hedge-fund managers, traders, and quants whose job it is to determine, with Vulcan accuracy, how the Republican tax bill that passed the House yesterday will actually affect the markets. It’s also more than a little ironic, given that the plan was spearheaded by two former senior partners of Goldman Sachs turned Trump shills—Gary Cohn and Steve Mnuchin—a pedigree that has done little to reassure Wall Street veterans who worry that the White House may accidentally nuke the economy in the name of “tax reform.” “Will this be the first tax cut in American history that actually results in a recession?” the executive asked.It’s a great question. And the House plan provides plenty to be worried about in that regard. Take, for instance, the proposed elimination of the deductibility of state and local taxes. That is obviously a cynical, politically motivated ploy on Donald Trump’s part to penalize voters who didn’t vote for him (for good reason) in high-tax blue states, such as New York and California, and to give a benefit to the red-state voters who did vote for him. (I get it, elections have consequences.) Eliminating the deductibility of state and local taxes is an incredibly divisive plan. “It’s a transfer to red-state wealthy guys,” said the executive, who lives in a blue state. Worse, he says, it could lead to another housing crisis, just as the last one is (or should be) still fresh in our collective memories. Here’s his thinking (which is hard to refute): Since, generally speaking, one of the largest state taxes is on property—your home—eliminating the federal tax deduction for state property taxes will inevitably cause the cost of homeownership in states with high property taxes to go up. It follows, logically, that if the annual cost of home ownership goes up, then the value of the home—which is for most people their single most-valuable asset—must go down. The National Association of Realtors commissioned a recent study that predicted that the elimination of the deduction for state and local taxes could result in a decrease in home valuations of between 10 percent and 17 percent.
Should America’s Upper Middle Class Take the Biggest Tax Hit? - As the Republican-controlled Congress tries to push through tax reform this year, one group of Americans may question why it’s coming up a scoop short. The upper middle class gets relatively few benefits and a disproportionate number of tax hikes under the $1.4-trillion Tax Cuts and Jobs Act approved by the U.S. House of Representatives last week. Families earning between $150,000 and $308,000—the 80th to 95th percentile—would still get a tax cut on average. But by 2027, more than a third of those affluent Americans can expect a tax increase, according to the Tax Policy Center. If the House bill becomes law, overall benefits for the upper middle class will start out small, and later vanish almost entirely. Is this fair? Some argue it’s only right for the upper middle class to carry a heavier burden. This is because the top fifth of the U.S. by income has done pretty well over the past three decades while the wages and wealth of typical workers have stagnated. People in the 81st to 99th percentiles by income have boosted their inflation-adjusted pre-tax cash flow by 65 percent between 1979 and 2013, according to the Congressional Budget Office. That’s more than twice as much as the income rise seen by the middle 60 percent. (The top 1 percent, meanwhile, saw their income rise by 186 percent over the same period, but that’s another story.) “Many upper-middle-class families will tell you they do not feel wealthy,” said Brian Riedl, a senior fellow at the Manhattan Institute, a right-leaning think tank. “Their standard of living [is] closer to the middle class than to the top 1 percent.” The income numbers don’t tell the whole story, he explained. The upper middle class is weighed down by high costs: Affluent workers live in expensive areas, pay a lot for real estate and daycare, and are taxed far more than Americans further down the ladder.
More on why so many parents lose under the TCJA - As a followup to my post earlier this morning, I've created a table below detailing how each policy in the TCJA affects the number of parental families in 2027 seeing a tax hike.Using refined policy parameters that have been added to the OSPC model since yesterday, I find that under the TCJA as written, 22 million families with children would see a tax hike in 2027 versus current law. This includes the indirect effects of the corporate income tax cut, but assumes that the filer credits expire in 2023.That 22 million figure is almost exactly half of the 44 million total families with kids projected for 2027.I've stacked the policies left to right in roughly the same order as in JCT's score of the TCJA. You can see all the way to the right in bold the 22 million number at the end of the running sum row. So this table is showing how each policy in the TCJA incrementally changes the number of parents who lose out, until we get to the 22 million bottom line. The story I would tell goes something like this:
1. Right off the bat, 25 million parental families get hit by the new income tax bracket structure.
2. The higher standard deduction and the expansion of personal & child credits are a little more than enough to offset the hit to parental families harmless from the repeal of the personal exemptions: the hike count falls by 2.5 million on net from these three policies combined. If the child tax credit expansion were more generous & refundable, this would be more.
3. Chained CPI adds another million losers, and the miscellaneous limits and repeals of deductions and credits add another 4 million.
4. The corporate tax cuts, AMT repeal, and passthrough rate caps are enough to offset the raw number of losers from #3 above, but their benefits skew more upper income. There are 2.3 million more families making $100K-$200K who get a tax hike from these policies together, for example.
Why a Firm Believer in Tax Cuts Could Derail the Senate Tax Cut Plan - NYT— On the eve of the House’s vote to pass a far-reaching $1.5 trillion tax cut, Speaker Paul D. Ryan of Wisconsin placed a hasty phone call to his state’s senior senator, Ron Johnson, in hopes of resolving an unlikely conflict in his own back yard. Mr. Johnson had become the first Senate Republican to say publicly that he could not vote for the Senate’s version of the tax bill. During the phone call on Wednesday afternoon, Mr. Ryan, who had campaigned heavily for Mr. Johnson in 2016, posed an essential question, according to the senator: “What are you going to need?” What Mr. Johnson needs, he said in an interview from Wisconsin on Friday, is for the bill to treat more favorably small businesses and other so-called pass-through entities — businesses whose profits are distributed to their owners and taxed at rates for individuals. Such entities, including Mr. Johnson’s family-run plastics manufacturing business, account for more than half of the nation’s business income, and the senator says the tax bill would give an unfair advantage to larger corporations. “I just have in my heart a real affinity for these owner-operated pass-throughs,” he said. “We need to make American businesses competitive — they’re not right now. But in making businesses competitive, we can’t leave behind the pass-throughs.” The sudden fissure between longtime allies laid bare the challenge that Republicans face as the tax bill leaves Mr. Ryan’s care and navigates the rough waters of the Senate, where different priorities within the party could sink the bill if not adequately addressed. Senate Republican leaders, who are seeking a major legislative victory before year’s end, hope to bring their tax bill, which differs significantly from the House measure, to a vote after Thanksgiving. But it is unclear whether it has enough support to pass in the narrowly divided chamber. Offering concessions to skeptical senators one by one could prove an impossible task for Republican leaders, who face restraints under Senate rules on the total size of the tax cut package. Those leaders are hoping, instead, that they can pull off a version of Mr. Ryan’s strategy: all but daring holdouts to derail the party’s top priority.
Tax Cut Math: 6 Republican Senators Have Concerns, It Takes 3 Kill It – Mish - The House and Senate each have different tax proposals. The Senate may not pass anything. Senate republicans have a 52-48 majority. They can afford to lose at most two votes if they wish to pass tax reform. But as it sits, The Wall Street Journal reports Republican leaders are trying to corral at least half a dozen lawmakers who are voicing concerns:
- 1) Bob Corker: Federal Debt
- 2) Jeff Flake: Federal Debt
- 3) Ron Johnson: Pass-Through Business
- 4) Lisa Murkowski: Health Care Provisions
- 5) Susan Collins : Health Care Provisions
- 6) John McCain: Defense Spending
Corker from Tennessee and Flake from Arizona are both retiring. So campaign funding threats are no concern to them. Corker is wary of overstating the benefits, and Flake is wary of optimistic revenue projections. “We have seen this before,’’ said Flake. “We make the cuts now. We rely on rosy economic assumptions. And then, in the out-years, if those don’t come about, we forget what we were supposed to do in terms of reform.” Johnson is concerned about pass-through business tax breaks. The top pass-through rate in the House bill is 25% but some groups are excluded. (I am in the excluded group). In the Senate, the top tax rate is above 30%. Johnson says the Senate version treats “pass-through” entities unfairly and he would not vote for the bill. Along with McCain, Murkowski and Collins both voted against health care reform, killing the legislation. Every indication is that they would do the same to tax reform if their demands are not met. The Senate bill repeals the health care mandate. Murkowski is concerned that repealing the mandate will cause insurance premiums to rise. Susan Collins wants Congress to pass a bipartisan bill to extend payments to insurers. McCain does not object to the bill per se. Rather McCain is holding the bill hostage over defense funding. McCain wants at least $700 billion for defense funding for the rest of fiscal year 2018. Congressional leaders may not go along.
Senate plan lets mutual funds skip a tax change that hurts individual investors - Following a backlash, the Senate Finance Committee has decided a proposal to prevent investors from minimizing taxes will no longer apply to mutual funds, as first proposed — but it will still hit individuals, the Wall Street Journal reported Saturday. The provision in the U.S. Senate plan will alter tax rules on some securities sales by barring investors from choosing which stock shares they want to unload when selling part of an equity position, the Journal reported. Instead, investors will have to sell off their oldest shares first, the report said.The change was originally meant to apply to both fund firms and individuals. However, senators exempted mutual funds from the provision after protests by some of the largest firms, including Vanguard Group and Eaton Vance, according to the Journal. Advisors are urging investors who intend to donate or put for sale specific shares that are not their oldest to do so before the end of the year, the Journal said.
Candid Wall Street barons worry that GOP tax plan will lead to literal euthanasia of the rentier - Lurking in the back of the minds of the super-rich, and in the share-price of surveillance/control businesses like Palantir and G4S is the fear that one day, the world will come to realized that Peter Thiel was right when he declared that the "freedom" to be a ruthless exploiter plutocrat was not "compatible" with democracy, and decide to opt for the latter (Thiel, meanwhile, seems to plump for the former).Now, the Republican Party is pushing for a tax-plan that rewards literal idle wealth, windfalls to fund share buybacks and other nonproductive financial engineering, millions for the children of the richest 0.2% of Americans, while making it impossible for all but the wealthiest to go to grad school, cutting funds for rural people suffering from opiod addiction, cutting health-care for 9,000,000 poor American children; raising tax on the dwindling middle class, raising tax on home-ownership, cuts funding for health care for the poorest Americans across the board, cuts benefits for veterans, adds 1.5 trillion to the debt.Candid Republican lawmakers have admitted that they feel they must transfer trillions to the richest Americans or face the end of their political careers as their campaign contributions dry up.But as wave after wave of revelations come about the impunity with which the super-rich dodge taxes and cram the American worker, the euthanasia of the rentier is gaining traction.A senior Wall Street exec -- anonymous, for obvious reasons -- told Vanity Fair's William Cohan that they feared that passage of the GOP's tax plan would be the final straw that collapsed the whole Reagonomic, neoliberal consensus and triggered a new growth industry for guillotines. In part, that's because the plan is so economically incompetent that it will inevitably usher in a horrific recession that will batter the Americans who are still trying to recover from the last finance-industry-triggered econopocalypse, with a new housing crisis, a tax disaster in populous "blue" states like New York and California, a collapse in consumer confidence and spending, and worse. Other CEOs have gone on the record, calling the Trump plan a "tax cut" not "tax reform" with the super-rich as the prime beneficiaries, and no reason to believe that the cuts will be accompanied by higher wages, better jobs, or more investment in the US.
Mixed signals sent on fate of tax bill’s health provision — Two of President Donald Trump's leading economic advisers sent mixed signals Sunday on the fate of a health care provision in the Senate version of a $1.5 trillion measure to overhaul business and personal income taxes that is expected to be voted on after Thanksgiving.The provision to repeal a requirement that everyone in the U.S. have insurance has emerged as a major sticking point for Republican Sen. Susan Collins of Maine, who has said that issue should be dealt with separately from the push by Trump and fellow Republicans to overhaul the tax code.Collins' vote is crucial in a chamber where Republicans hold a slim 52-48 edge.Sen. Ron Johnson, R-Wis., has already declared his opposition to the bill, saying last week that it doesn't cut business taxes enough for partnerships and corporations. GOP Sens. Bob Corker of Tennessee, John McCain and Jeff Flake of Arizona, and Rand Paul of Kentucky also have concerns about the bill.Republicans cannot afford to lose more than two senators on the final vote, which would allow Vice President Mike Pence to cast a tie-breaking 51st vote in his capacity as president of the Senate. Democrats are not expected to support the bill, as was the case when the House passed its version last week.Asked whether the health care provision will be removed to keep Republicans on board, Treasury Secretary Steven Mnuchin indicated that the current plan is to keep the provision in the bill. The provision is not in the House version of the legislation."The president thinks we should get rid of it. I think we should get rid of it," Mnuchin said. "It's an unfair tax on poor people. To think that you put a penalty on people who can't afford to buy medical policies, it's just fundamentally unfair." He added: "But we're going to work with the Senate as we go through this."
Trump open to dropping healthcare provision in Senate tax bill: aide (Reuters) - U.S. President Donald Trump would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday. The version of tax legislation put forward by Senate Republican leaders would remove a requirement in former President Barack Obama’s signature healthcare law that taxes Americans who decline to buy health insurance. “If we can repeal part of Obamacare as part of a tax bill ... that can pass, that’s great,” White House budget director Mick Mulvaney said on CNN’s “State of the Union” on Sunday. “If it becomes an impediment to getting the best tax bill we can, then we are OK with taking it out.” It was too soon to say whether eliminating the repeal of the so-called individual mandate would increase the bill’s chances of passing. The provision was not an impediment now, Mulvaney said. Republican senators who have been critical of the plan said that some middle-income taxpayers could see any benefits of the tax cuts wiped out by higher health insurance premiums if the repeal of the Obamacare mandate goes through. Among them was Senator Susan Collins, one of a handful of Republicans who voted in July to block a broader Republican attempt to dismantle the Affordable Care Act, commonly known as Obamacare. “I don’t think that provision should be in the bill. I hope the Senate will follow the lead of the House and strike it,” Collins said on CNN’s “State of the Union.” Republicans can only afford to lose two votes on the tax bill because of their slim 52-48 majority in the Senate. Getting rid of the mandate is one of Republican Trump’s main goals. He campaigned for president last year on a promise to repeal and replace Obamacare, but Congress has not agreed so far on how to do that. Another top Trump administration official, Treasury Secretary Steve Mnuchin, said the individual mandate “isn’t a bargaining chip.” “The president thinks we should get rid of it and I think we should get rid of it,” he told “Fox News Sunday.”
Republican tax plan will lead to more offshoring of U.S. jobs and a larger trade deficit - Jared Bernstein -- Upon his return from Asia, President Trump announced that he planned to work “as fast as possible” to reduce the U.S. trade deficits with the nations he visited. He later tweeted out his excitement about working with fellow Republicans to pass their “GREAT Tax Bill!” Left hand, meet right hand. Those two goals stand in stark opposition to one another. The Republican tax cut plan has been justly criticized for worsening both income inequality and the national debt, but the plan has another big problem: It’s likely to lead to more outsourcing of U.S. jobs and a larger trade deficit. That’s obviously a negative for factory jobs and net exports, but it’s also precisely the opposite of what Trump continues to promise to many of his working-class supporters. First, the tax plan moves to what’s called a territorial system of international taxation, which means the U.S. tax rate on the overseas earnings of U.S. foreign affiliates would become zero. While it’s true these firms can defer taxes on these earnings for as long as they like, they cannot “repatriate” them tax-free to invest domestically or to pay dividends to their shareholders (instead, they invest them in financial markets). Would not the lower corporate rate proposed by the GOP’s tax plan — 20 percent — preclude this incentive? Unfortunately not, because our multinationals have perfected the art of “transfer pricing:” booking, if not producing, their overseas profits in tax havens with single-digit tax rates, while booking deductible expenses in high-tax countries. Under the new regime, they’d be able to keep up this tax avoidance with the added bonus of sending earnings back home tax free. As international tax expert Ed Klienbard puts it: “Territorial tax systems … reward successful transfer pricing gamers as “instant winners” by enabling the successful U.S. firm to recycle immediately its offshore profits as tax-exempt dividends paid to the U.S. parent.”
The 'doubled standard deduction' in the GOP tax plan is a lie - In selling their soon-to-be-released tax plan, Republicans have been leaning hard on what they say is a provision to cut and simplify taxes for the middle class: doubling the standard deduction that people who pay income tax may take. "You have to look at the plan in its entirety. It doubles the standard deduction, so in the end, even the lowest rates get a tax cut," Rep. Jim Renacci, a Republican who sits on the tax-writing Ways and Means Committee, told Reuters. But a document published by Jonathan Swan of the news website Axios shows this is badly misleading — the plan would increase the standardized deductions available to taxpayers by 15% or less. Meanwhile, taxpayers who still wouldn't take the standard deduction under the Republican plan — those who would instead deduct things like mortgage interest — would pay tax on more of their income than they do now. Here's the important fine print: "To simplify the tax rules, the additional standard deduction and the personal exemptions for taxpayer and spouse are consolidated into this larger standard deduction." Here's how that math works. Let's say you are single with no dependents, and you have a moderate income. Currently, you get to take the standard deduction ($6,350) and one personal exemption ($4,050). If you are 65 or older, you also get to take an additional standard deduction ($1,250). That adds up to $10,400, or $11,650 if you're over 65. The Republican plan would replace all these provisions with a single deduction of $12,000 ($24,000 for married couples.) That's a 15% increase — except for seniors, who get a 3% increase. And then your first dollar of taxable income would be subjected to a 12% tax rate, instead of the current 10%. But don't worry — the framework says "additional tax relief," as yet unspecified, will emerge for you during the committee process. Currently, you get to take the personal exemption even if you also itemize deductions, but you get to take the standard deduction only if you forego itemized deductions. Combining these provisions into a single, standard deduction would mean itemizers lose their personal exemption and get nothing back — meaning they'll typically pay tax on an extra $4,050 of income if they're single, or $8,100 if they're married. Sad!
Republicans’ Sprint to a Tax Overhaul: Public Votes, Private Talks -- The Republican tax-overhaul effort is in for a marathon debate on the Senate floor at the end of this month, with dozens of doomed Democratic amendments. But the real action will be elsewhere, behind closed doors. Two parallel and largely private negotiations will determine the content of the bill that’s due for a full Senate vote as early as Nov. 30: One is aimed at getting about a half-dozen wavering GOP senators on board. The other will attempt to smooth the path for a final House-Senate compromise in December. Neither will be easy. GOP leaders must write a bill that can pass under the Senate’s strict budget rules while cobbling together 50 Senate votes without alienating the House GOP’s coalition of conservatives and moderates from high-tax districts. They’ll also have to avoid political land mines such as the divisive health-care debate that has riven Republicans for much of this year. House and Senate staff members are already working on ways to avoid a drawn out process for reconciling their different legislation, said Neil Bradley, chief policy officer for the U.S. Chamber of Commerce. Key questions include how to tax partnerships and other so-called pass-through entities and how to rewrite international tax laws to limit corporate tax avoidance, he said. Bill Hoagland said he’s “totally convinced” lawmakers will try to fast-track the formal methods for resolving House-Senate differences -- like a “conference committee” in which members work out differences in a deliberative process. “A true conference committee would drag out into next year,” said Hoagland, now a senior vice president at Washington’s Bipartisan Policy Center. Here’s a guide to what to expect.
The GOP Tax Plan Is Entering Its Make-or-Break Week - The $1.4 trillion item on President Donald Trump’s wish list -- a package of tax cuts for businesses and individuals that he has said he wants to sign before year’s end -- is headed into the legislative equivalent of a Black Friday scrum next week. Senate Republican leaders plan a make-or-break floor vote on their bill as soon as Thursday -- a dramatic moment that will come only after a marathon debate that could go all night. Democrats are expected to try to delay or derail the measure, and the GOP must hold together at least 50 votes from its thin, 52-vote majority in order to prevail. Their chances improved this week when Republican Senator Lisa Murkowski of Alaska said she’ll support repealing the “individual mandate” imposed by Obamacare -- a provision that Senate tax writers are counting on to help finance the tax cuts. Murkowski had earlier signaled some reservations about the provision; and her support was widely viewed as a positive sign for the tax bill’s chances. If the tax bill clears the Senate -- a step that’s by no means guaranteed -- lawmakers in both chambers would have to hammer out a compromise between their differing bills, a process that presents potential pitfalls of its own. For now, though, much of the Senate’s attention will focus on its legislation’s price tag. Three GOP senators -- Bob Corker of Tennessee, Jeff Flake of Arizona and James Lankford of Oklahoma -- have cited concerns about how the measure would affect federal deficits. Independent studies of the legislation have found that -- contrary to its backers’ arguments -- its tax cuts won’t stimulate enough growth to pay for themselves. Both the Senate bill, and one that cleared the House earlier this month, would reduce federal revenue over a decade by roughly $1.4 trillion, according to the Joint Committee on Taxation. On Wednesday, a report from the Penn Wharton Budget Model at the University of Pennsylvania said the bill would reduce federal revenue in each year from 2028 to 2033. That finding would mean it doesn’t comply with a key budget rule that Senate Republican leaders want to use to pass their bill with a simple majority over Democrats’ objections.
GOP deficit hawks fear tax plan is secret budget-buster - Politico - The GOP has yet to resolve an internal clash over whether expiring tax cuts will really expire, potentially threatening the party’s push for a desperately-needed legislative achievement. On one side are the White House and top congressional Republicans, who argue that ultimately all the tax cuts in their plan will be extended, even the ones slated to lapse. But that’s exactly what the party’s small, but mighty, bloc of deficit hawks is afraid of. And as the Senate steams toward a vote next week on its massive tax overhaul, the fight over the bill’s true sticker price may be the deciding factor for the bill. It was bad enough, in the deficit hawks’ view, that key provisions in the House bill expire in five years and that lawmakers already assume they’ll get extended. But their concerns multiplied after the revised Senate GOP tax plan proposed winding down a host of popular tax cuts for individuals after 2025. The tax cuts were made temporary to trim the official cost of the bill, but deficit hawks fear Congress will simply extend them — further adding to the government’s red ink. “The savings, the score, it just isn’t valid because you know that they’re not going to follow through,” Sen. Jeff Flake (R-Ariz.), an avowed fiscal conservative, said in a recent interview. “You can’t assume that we’ll grow a backbone later. If we can’t do it now, then it’s tough to do it later.” The collision between what most Republicans see as simple political reality — keeping popular tax cuts for voters — and deep deficit worries from influential GOP senators could derail the tax reform efforts, particularly if and when the chambers try to meld their tax proposals in the coming weeks.
Opinion: Tax cuts may help realize Piketty’s dark vision of inequality - On Thursday, the House of Representatives passed, by a 227-205 margin, its long-awaited tax reform plan, dubbed the Tax Cuts and Jobs Act. Beaming Republicans praised it as a great boon to the economy and the middle class. The plan would permanently slash corporate tax rates to 20% from the current 35%; reduce the number of tax brackets; eliminate personal exemptions while doubling the standard deduction and child tax credit; cut rates for some “pass-through” businesses, and end the alternative minimum tax, and phase out the estate tax. To recoup enough projected revenue losses to get the bill through the Senate, the House plan would end deductibility of state and local income taxes and cap the amount taxpayers can deduct for medical expenses, mortgage interest, and property taxes. Still, the respected nonpartisan Penn Wharton Budget Model projects that even under the most optimistic scenario, the plan would raise gross domestic product by 0.4% to 0.9% by 2027 but would blow a $2 trillion hole in the national debt. It may have an even more profound effect: It would richly reward dynastic wealth and entrench an American oligarchy in ways we’ve not seen since the Gilded Age of Rockefeller, Carnegie and J.P. Morgan. In that way it would, ironically, vindicate the theories of Thomas Piketty, the left-wing French economist at the Paris School of Economics, who, along with colleagues Emanuel Saez and Gabriel Zucman (both of UC Berkeley), has done massive research demonstrating the widening gap between the very wealthiest and everyone else throughout the developed world. Piketty’s famous theorem r > g claims that by its nature, r, or the return on capital, increases faster than g, or GDP, especially when the population isn’t growing much. In Piketty’s perpetual motion machine, the very wealthiest keep getting richer while the rest fall further and further behind. In his 2014 best seller, “Capital in the Twenty-First Century,” he repeatedly referred to the “rentiers,” coupon-clipping inheritors who, he said, rule the roost in his native France. “In a quasi-stagnant society, wealth accumulated in the past will inevitably acquire disproportionate importance,” he wrote.
How Cutting Taxes Makes Life Worse for the Rich - The Republican effort to cut federal taxes is still underway, and many crucial details are still unsettled. But little doubt remains that the effort has been heavily shaped by wealthy donors. As Chris Collins, a Republican representative from New York put it: “My donors are basically saying, ‘Get it done or don’t ever call me again.’” Many affluent people are likely to celebrate if an eventual deal in Washington grants them big tax breaks. Evidence suggests, however, that their jubilation would be short-lived — and followed by deep disappointment.It is perfectly natural, of course, to believe that extra cash will help them buy the special things they want, such as more spacious homes or better performing cars. But that belief is a garden-variety cognitive error. The mistake occurs because “special” is an inescapably relative concept. A spacious home is one that is larger than most other homes. A high-performance car is one that outperforms most other cars. Successful bidding for such things depends almost entirely on relative purchasing power. Taxes affect absolute purchasing power, not relative purchasing power. The upshot is that the ability of the already rich to bid successfully for special things is not enhanced by tax cuts. Why isn’t this simple truth more widely appreciated? In thinking about how taxes affect us, we try to imagine how life would be different if we had less money. And when we recall examples of actual events that left us with less money — think home fires, job losses, business downturns, divorces, serious illnesses and the like — in almost every case, it really was more difficult for us to buy things we wanted. But such events merely reduce our own incomes while leaving others’ unaffected. They reduce our relative purchasing power. Matters unfold differently when everyone’s spendable income goes down together, as when all pay higher taxes. In that case, our relative purchasing power remains the same as before.
Koch Lobbyists and Opus Dei — Who’s Dropping in on Trump Budget Czar Mick Mulvaney? - One of President Donald Trump’s top cabinet officials has met with a long list of lobbyists, corporate executives and wealthy people with business interests before the government, according to calendars the Trump administration fought to keep secret. The calendars for Mick Mulvaney, the former South Carolina congressman who now runs the White House Office of Management and Budget, offer a glimpse of who has access to the highest levels of the Trump administration. Among those visiting Mulvaney: Trump friend and casino magnate Steve Wynn; a flurry of officials from the conservative Heritage Foundation; a string of health care and Wall Street CEOs; lobbyists for Koch Industries; a cryptocurrency evangelist; and a prominent member of the Catholic group Opus Dei. The Trump administration fought in court to block public records requests by Property of the People, a Washington-based nonprofit transparency group, to release the calendars as well as visitor logs from several other White House offices. Lawyers for the group ultimately prevailed and provided the documents to ProPublica, which we are posting in a searchable format. As OMB director, Mulvaney is the driving force behind the president’s budget and influences regulations and government procurement. It’s been widely reported that he will become the acting head of the Consumer Financial Protection Bureau. He also has the ear of the president, who is reportedly a fan of Mulvaney’s performances on the Sunday political shows. The calendars, which cover February to September, typically don’t include details on what was discussed at the meetings. In some cases, the timing of contact with Mulvaney line up with OMB business. In other cases, billionaires themselves came in to meet with Mulvaney. They include Charles Schwab, medical entrepreneur Patrick Soon-Shiong and Wynn, the casino magnate whose relationship with Trump goes back decades. Wynn met with Mulvaney in April. Wynn’s firm has lobbied on tax issues on Capitol Hill. Wynn himself, who has large holdings in Macau, has reportedly been involved in pressing the Trump administration on China issues. Wynn was also named finance chairman of the Republican National Committee in January. Wynn’s spokesman declined to comment.
Judge in California blocks Trump's order on sanctuary cities - (Reuters) - A federal court judge in California on Monday blocked an executive order from President Donald Trump to deny some federal grants to so-called sanctuary cities, undermining the administration’s crackdown on illegal immigration. The judge, who blocked the order provisionally in April, issued a permanent injunction in the suit brought by the city and county of San Francisco and Santa Clara County, which said the order was unconstitutional. “The Counties have demonstrated that the Executive Order has caused and will cause them constitutional injuries by violating the separation of powers doctrine and depriving them of their Tenth and Fifth Amendment rights,” U.S. District Judge William Orrick for the Northern District of California wrote in his order. Trump issued the order in January, shortly after he was inaugurated, slashing funding to jurisdictions that refuse to comply with a statute that requires local governments to share information with U.S. immigration authorities. As part of that policy, the Justice Department has sought to punish cities and other local jurisdictions that have joined a growing “sanctuary” movement aimed at shielding illegal immigrants from stepped-up deportation efforts. “The district court exceeded its authority today when it barred the president from instructing his cabinet members to enforce existing law,” Department of Justice spokesman Devin O’Malley said in a statement. “The Justice Department will vindicate the president’s lawful authority to direct the executive branch.” The department has already appealed the judge’s prior ruling from April. The Trump administration contends local authorities endanger public safety when they decline to hand over for deportation illegal immigrants arrested for crimes. Dozens of local governments and cities, including New York, Los Angeles and Chicago, have joined the growing “sanctuary” movement.
Trump transgender and immigration policies meet legal defeat -- The Trump administration has suffered twin legal defeats on its immigration and transgender policies. A California judge permanently blocked a presidential order to cut funding from US cities that refuse to co-operate with immigration officials. And a Maryland judge blocked the administration's ban on transgender people from serving in the military. President Donald Trump's proposed travel ban has also been hit by courtroom setbacks. California US District Judge William Orrick ruled that the immigration order was "unconstitutional on its face". He temporarily blocked the order back in April. "The Constitution vests the spending powers in Congress, not the President, so the Executive Order cannot constitutionally place new conditions on federal funds," he wrote on Monday. "Federal funding that bears no meaningful relationship to immigration enforcement cannot be threatened merely because a jurisdiction chooses an immigration enforcement strategy of which the President disapproves." The executive order was issued just days after President Trump took office in January. It sought to withhold funds from cities that would not co-operate with federal immigration requests to turn over any individual arrested for a crime and suspected of entering the US illegally. Dozens of municipalities, including New York, Los Angeles and Chicago, have joined the so-called sanctuary movement. San Francisco and Santa Clara County had sued, arguing they would lose billions of dollars in federal grant funding if the president was allowed to enforce the order. Department of Justice spokesman Devin O'Malley said in a statement late on Monday that the 9th US Circuit Court of Appeals had "exceeded its authority today when it barred the President from instructing his cabinet members to enforce existing law".
Trump Administration Ends Immigration Protections For Haitians Displaced By 2010 Earthquake --In a decision that was widely anticipated, the Trump administration has decided to end immigration protections for Haitians who migrated to the US following a devastating earthquake that laid waste to Haiti back in 2010. Now, the 50,000 Haitians still living in the US under the protections have 18 months to leave, according to the Department of Homeland Security. As the Washington Post pointed out, the decision was made to appease immigration hard-liners who insist the program was never intended to grant permanent residency to Haitians who were displaced by the quake. Per the Los Angeles Times, back in May, John F. Kelly, who was DHS secretary at the time, said that conditions in Haiti had improved enough that the US would be unlikely to continue extending the temporary protection. At the time, he extended Haitians’ protected status for six months, but urged them to prepare to leave the US Unsurprisingly, many heeded this warning. Following Trump’s upset victory in last year’s election, thousands of Haitians started crossing into Quebec, where they requested asylum. Indeed, the wave of migrants into Canada since the election has strained Canadian public services to the limit and bogged down the country’s system for approving asylum requests, leaving many in an uncomfortable legal limbo. In the meantime, hundreds of Haitians are living in makeshift shelters in Montreal, and elsewhere in the province.
White House seeks $44 billion in third disaster request - The White House sent its third disaster request to Congress on Friday, asking for $44 billion to aid recovery from this summer’s deadly trio of hurricanes. If the funding package is approved, Congress will have kicked in nearly $100 billion in extra money this year to help storm-ravaged communities in places like Texas, Puerto Rico, the U.S. Virgin Islands and Florida. Speaker Paul Ryan (R-Wis.) welcomed the administration's move, adding in a statement, "The House will review the request and work with the administration and members from affected states to help the victims get the resources they need to recover and rebuild."Other lawmakers, however, voiced strong complaints that the package fell short of expectations.The request calls for $25.2 billion for disaster programs run by the Federal Emergency Management Agency and the Small Business Administration, as well as $4.6 billion to rehab damaged federal facilities and other agency recovery efforts. Another $1 billion would go toward emergency agricultural assistance, $1.2 billion would be used for an education recovery fund and $12 billion would be spent on a new flood mitigation program run by the Community Development Block Grant. The Trump administration — still sizing up damage and rebuilding costs in some areas — is expected to ask for even more disaster cash in the months to come.
White House Requests More Disaster Aid but Also Seeks Cuts as Deficits Rise - The White House asked Congress on Friday for $44 billion in additional relief in response to this year’s devastating hurricanes, but facing rising budget deficits and pushing a tax cut that could cost $1.5 trillion, the administration also suggested that lawmakers make spending cuts to offset disaster costs.Republicans have been conspicuously quiet about the ballooning national debt as they press to enact deep tax cuts before the end of the year. The deficit for the 2017 fiscal year totaled $666 billion, an increase of $80 billion from the previous year. And spending continues to climb.Disaster relief costs are now approaching $100 billion, with more likely to come. And congressional leaders are eyeing a deal that would allow nondefense and military spending to burst through strict caps put in place in 2011, when Republican leaders made fiscal rectitude a central organizing principle.The latest disaster request seemed to indicate that deficit concerns may be rising, at least in the White House. Administration officials laid out a menu of options for budget cutting, totaling $59 billion, from small nicks like $8 million from a rural energy program to far larger options, such as $3.9 billion from student financial aid and $1 billion from transportation infrastructure funds. Some of those proposals were sure to raise eyebrows. To pay for hurricane reconstruction, the White House suggested cutting nearly $520 million from the Army Corps of Engineers’ flood control and coastal emergencies account, which the White House identified as excess money from Hurricane Sandy relief. The president’s budget director, Mick Mulvaney, wrote that “the administration believes it is prudent to offset new spending.”And on Capitol Hill, a number of lawmakers from both parties are eager to spend more money, not less. Congress approved one disaster measure in September and another in October. If lawmakers provide the newly requested funding, the tab for disaster relief approved by Congress in response to Hurricanes Harvey, Irma and Maria, as well as the wildfires in Western states, would total about $96 billion.It was not lost on Democrats that the administration suggested offsetting the cost of disaster relief but has offered no such concern for the far larger cost of the proposed tax cuts.
Donald Trump’s Response to Disaster Aid for California: Nothing – A few weeks ago, California requested $7.4 billion in disaster aid following the massive series of wildfires in the northern part of the state that killed 43 people and destroyed nearly 9,000 structures. Actually, let’s back up. That’s not quite accurate. California’s Democratic governor, its two Democratic senators, and its 39 Democratic members of Congress asked for $7.4 billion. With only one exception, California’s Republican delegation boycotted a request for disaster funding for their own state. Yesterday the Trump administration responded to California’s request:While the request includes anemic supplemental funding for states ravaged by hurricanes, it contains no funding whatsoever for rebuilding the communities in California devastated by the recent wildfires…. “For the Administration to not request even a single additional penny to help rebuild the communities devastated by the worst fires in California’s history is mind-boggling,” [said the two congressmen who led the disaster relief effort]. This brings the toxicity of partisan politics to jaw-dropping levels. California Republicans won’t even stick up for their own state, and a Republican president offers nothing in response to an enormous natural disaster. Why? No reason was given, but Occam’s Razor suggests that the best guess is the most obvious one: California is a Democratic state that didn’t vote for Donald Trump. You don’t mess with the family.
Sessions reshapes Justice Dept. while eyes are on Russia - From his crackdown on illegal immigration to his reversal of Obama administration policies on criminal justice and policing, Sessions is methodically reshaping the Justice Department to reflect his nationalist ideology and hard-line views — moves drawing comparatively less public scrutiny than the ongoing investigations into whether the Trump campaign coordinated with the Kremlin.Sessions has implemented a new charging and sentencing policy that calls for prosecutors to pursue the most serious charges possible, even if that might mean minority defendants face stiff, mandatory minimum penalties. He has defended the president’s travel ban and tried to strip funding from cities with policies he considers too friendly toward undocumented immigrants. Sessions has even adjusted the department’s legal stances in cases involving voting rights and lesbian, gay, bisexual and transgender issues in a way that advocates warn might disenfranchise poor minorities and give certain religious people a license to discriminate. Supporters and critics say the attorney general has been among the most effective of the Cabinet secretaries — implementing Trump’s conservative policy agenda even as the president publicly and privately toys with firing him over his decision to recuse himself from the Russia case.While critics lambaste what they consider misguided changes that take the department back in time, supporters say Sessions has restored a by-the-book interpretation of federal law and taken an aggressive stance toward enforcing it. “The Attorney General is committed to rebuilding a Justice Department that respects the rule of law and separation of powers,” Justice Department spokesman Ian Prior said in a statement, adding, “It is often our most vulnerable communities that are most impacted and victimized by the scourge of drug trafficking and the accompanying violent crime.”
Trump's judicial picks - Much has been made of Trump’s failure to get legislation through Congress and received wisdom suggests that he has little to show for his first 10 months in power. However, the lasting impact that court picks have on the lives of Americans means that Trump’s choices – and the sheer numbers involved – will help reshape America for the next half-century. The makeup of America’s judges is quietly becoming the site of one of Trump’s most unequivocal successes: nominating and installing judges who reflect his own worldview at a speed and volume unseen in recent memory. Trump could conceivably have handpicked more than 30% of the nation’s federal judges before the end of his first term, his advisers have suggested, and independent observers agree.“The president himself has said that he expects this to be one of his major legacies. He is going to reshape the bench for generations to come,” said Douglas Keith, counsel with the fair courts arm of the Brennan Center for Justice. Until recently little attention has been paid to Trump’s judicial appointments. But Senator Chris Coons, a Democrat from Delaware and a member of the Senate judiciary committee, identified the importance of these appointments early on. In June he said: “This will be the single most important legacy of the Trump administration. They will quickly be able to put judges on circuit courts all over the country, district courts all over the country, that will, given their youth and conservatism, have a significant impact on the shape and trajectory of American law for decades. The lack of diversity in Trump’s picks was highlighted by the Associated Press. They ran the numbers on the 58 people nominated by the Trump administration to lifetime positions on appeal courts, district courts, and the supreme court. Of those, 53 are white, three are Asian American, one is Hispanic and one is African American. Forty seven are men and 11 are women.
FCC plans total repeal of net neutrality rules -- Federal Communications Commission Chairman Ajit Pai will reveal plans to his fellow commissioners on Tuesday to fully dismantle the agency's Obama-era net neutrality regulations, people familiar with the plans said, in a major victory for the telecom industry in the long-running policy debate. The commission will vote on the proposal in December, some seven months after it laid the groundwork for scuttling the rules that require internet service providers like Comcast or AT&T to treat web traffic equally. President Donald Trump-appointed Pai’s plan would jettison rules that prohibit internet service providers from blocking or slowing web traffic or creating so-called paid internet fast lanes, the people familiar with the changes said.Pai also will follow through on his plans to scrap the legal foundation that the FCC’s old Democratic majority adopted in 2015 to tighten federal oversight of internet service providers, a move he contends has deterred the industry from investing in broadband networks. Internet providers have feared that legal foundation, if left in place, could set the stage for possible government price regulation of internet service.
RIP net neutrality: FCC chair releases plan to deregulate ISPs - The Federal Communications Commission today announced its plan to deregulate the broadband industry and eliminate net neutrality rules, setting up a December 14 vote to finalize the repeal. As expected, FCC Chairman Ajit Pai is proposing to reverse the commission's classification of home and mobile ISPs as common carriers, eliminating the legal justification for the net neutrality rules and numerous other consumer protections. The Republican-controlled FCC is likely to vote 3-2 along party lines in favor of Pai's plan at its regular monthly meeting in December, ignoring Internet users who voiced widespread support for net neutrality rules. Pai's decision is a big win for cable companies, telcos, and mobile carriers that will no longer face regulation of their broadband businesses under Title II of the Communications Act. Pai ignored numerous calls from consumer advocates, website operators, and Internet users who urged the FCC to preserve the rules that force Internet providers to treat all Web content fairly. Pai was on the losing end of a 3-2 vote in 2015 that imposed Title II regulations, including net neutrality rules that outlaw blocking, throttling, and paid prioritization. He started the repeal process shortly after President Trump appointed him chairman this year. Today, Pai said that he intends to eliminate the core net neutrality rules while preserving some requirements that ISPs inform consumers about their network management practices. "Under my proposal, the federal government will stop micromanaging the Internet," Pai said in a statement today. "Instead, the FCC would simply require Internet service providers to be transparent about their practices so that consumers can buy the service plan that's best for them and entrepreneurs and other small businesses can have the technical information they need to innovate."
Trump’s FCC Goes to War on Net Neutrality - naked capitalism - Yves here. NC readers, this Real News Network segment on net neutrality discusses an issue that affects you directly. The Trump Administration says it plans to ignore public comments, which would seem to open up the ruling to a procedural challenge by anyone who had standing. (video and transcript)
FCC plan would give Internet providers power to choose the sites customers see and use - The Federal Communications Commission took aim at a signature Obama-era regulation Tuesday, unveiling a plan that would give Internet providers broad powers to determine what websites and online services their customers see and use. Under the agency’s proposal, providers of high-speed Internet services, such as Comcast, Verizon and AT&T, would be able to block websites they do not like and charge Web companies for speedier delivery of their content. The FCC’s effort would roll back its net neutrality regulation which was passed by the agency’s Democrats in 2015 and attempted to make sure all Web content, whether from big or small companies, would be treated equally by Internet providers. The repeal of those rules would be one of the more significant deregulatory efforts by Republicans since President Trump took office. Ajit Pai, who was nominated to head the FCC by Trump in January, has said undoing the net neutrality rules was one of his top priorities, arguing that the regulation stifled innovation and was an example of government overreach. “Under my proposal, the federal government will stop micromanaging the Internet,” Pai said in a statement Tuesday. The plan could be approved by the Republican-led FCC as early as its Dec. 14 meeting. Pai’s remarks were cheered by conservatives as well as cable, broadband and wireless companies, which provide most of the Internet service to American homes, smartphones and other devices.
Be Thankful for the Internet as You Know It, Because It May Not Exist Much Longer - Lambert Strether - The day before Thanksgiving, November 23, the FCC dropped its proposal “Restoring Internet Freedom,” FAQ and Declaratory Ruling, Report and Order, and Order (PDF); they hope to schedule a vote on it for December 14. Let me start out by drawing attention to this remarkable passage in the FAQ: • Find that the public interest is not served by adding to the already-voluminous record in this proceeding additional materials, including confidential materials submitted in other proceedings. What could those “confidential materials submitted in other proceedings” possibly be? Let’s speculate. New York State Attorney General Eric Schneiderman writes in an open letter to (former Verizon lawyer and) FCC chair Ajit Pai: [F]or six months my office has been investigating who perpetrated a massive scheme to corrupt the FCC’s notice and comment process through the misuse of enormous numbers of real New Yorkers’ and other Americans’ identities Long story short: Bots[1] organized by some unknown entity filed enormous numbers of often identical comments on the proposal with the FCC. This matters, because as Schneiderman points out: Federal law requires the FCC and all federal agencies to take public comments on proposed rules into account — so it is important that the public comment process actually enable the voices of the millions of individuals and businesses who will be affected to be heard. Which is hard to do when the organic comments are drowned out. As a legal matter, Schneiderman seems concerned with the theft of the identities that putatively signed the comments, To which the FCC has so far been unresponsive. As Yves pointed out: The Trump Administration says it plans to ignore public comments, which would seem to open up the ruling to a procedural challenge by anyone who had standing. With that detour into the weeds out of the way, in this post I will answer the following questions:
- 1) What is “Net Neutrality”?
- 2) What would a “Packaged Internet” look like? (I needed a phrase that implies the opposite of “Net Neutrality,” which “Packaged Internet” seems to do. “Rigged Internet,” my second choice, didn’t incorporate the cable-like package business model; see below.)
- 3) What are the real and theoretical harms of a “Packaged Internet”?
From an Open Internet, Back to the Dark Ages - Can anyone still doubt that access to a relatively free and open internet is rapidly coming to an end in the west? In China and other autocratic regimes, leaders have simply bent the internet to their will, censoring content that threatens their rule. But in the “democratic” west, it is being done differently. The state does not have to interfere directly – it outsources its dirty work to corporations. As soon as next month, the net could become the exclusive plaything of the biggest such corporations, determined to squeeze as much profit as possible out of bandwith. Meanwhile, the tools to help us engage in critical thinking, dissent and social mobilization will be taken away as “net neutrality” becomes a historical footnote, a teething phase, in the “maturing” of the internet. In December the US Federal Communications Commission (FCC) plans to repeal already compromised regulations that are in place to maintain a semblance of “net neutrality”. Its chairman, Ajit Pai, and the corporations that are internet service providers want to sweep away these rules, just like the banking sector got rid of financial regulations so it could inflate our economies into giant ponzi schemes.That could serve as the final blow to the left and its ability to make its voice heard in the public square. It was political leaders – aided by the corporate media – who paved the way to this with their fomenting of a self-serving moral panic about “fake news”. The public, it seems, needs to be protected only from bloggers and websites. The social media giants soon responded. It is becoming ever clearer that Facebook is interfering as a platform for the dissemination of information for progressive activists. It is already shutting down accounts, and limiting their reach. These trends will only accelerate. Google has changed its algorithms in ways that have ensured the search engine rankings of prominent leftwing sites are falling through the floor. It is becoming harder and harder to find alternative sources of news because they are being actively hidden from view.
Regulatory SPAM - Adam Levitin -- he Washington Post has an interesting piece about the huge volume of "SPAM" comments that the FCC received regarding the net neutrality rule. This all seemed very familiar to me: the CFPB received an enormous number of comments about the payday rule. Many were utter spam comments, but the most problematic would attach random academic articles. That meant that the Bureau's staff, when analyzing the comments, had to spend time on deliberate wild goose chases. (I'm aware of this because a number of the random articles were my own.) I wasn't sure what to make of the volume of frivolous comments; now I'm wondering if there was a giant spamming of the bureau. Are there legal consequences for such actions? It certainly feels icky, along the lines of inflammatory news stories fed by a foreign government to affect our elections.
The Justice Department is suing AT&T to block its $85 billion bid for Time Warner - The Department of Justice sued Monday to block AT&T’s $85 billion bid for entertainment conglomerate Time Warner, setting the stage for one of the biggest antitrust cases to hit Washington in decades. The move by the Justice Department’s antitrust division is unusual because it challenges a deal that would combine two different kinds of companies — a telecom with a media and entertainment company. Antitrust officials are relatively untested in the courts on opposing such deals and have rarely tried to squash them. If successful, however, the government’s case would send a strong signal across the business world that Washington is no longer looking as kindly on such mergers. "It may be one of the most important antitrust battles of modern times," said Gene Kimmelman, a former federal antitrust official and president of Public Knowledge, a consumer advocacy group. There is also political risk for the Justice Department. Some Democrats have expressed concern that antitrust officials could be seeking to block the deal because the Trump administration has been highly critical of CNN, which is owned by Time Warner – a charge that the department and the White House have denied. AT&T has said it is willing to use the court process to unearth communications between White House and antitrust officials over the case. If such evidence is uncovered, analysts say, AT&T could argue that Trump abused his position as president to carry out a politically motivated attack against a private actor. Beyond his frequent criticisms on CNN, Trump said on the campaign trail last year that the deal would concentrate control of the media in the hands of too few firms. The administration’s lawsuit seeks to prevent a deal that would combine AT&T — one of the country's largest providers of Internet and subscription television — with Time Warner's enormous library of films, HBO, live TV programming and other content.
TSA Plans to Use Face Recognition to Track Americans Through Airports - The “PreCheck” program is billed as a convenient service to allow U.S. travelers to “speed through security” at airports. However, the latest proposal released by the Transportation Security Administration (TSA) reveals the Department of Homeland Security’s greater underlying plan to collect face images and iris scans on a nationwide scale. DHS’s programs will become a massive violation of privacy that could serve as a gateway to the collection of biometric data to identify and track every traveler at every airport and border crossing in the country. Currently TSA collects fingerprints as part of its application process for people who want to apply for PreCheck. So far, TSA hasn’t used those prints for anything besides the mandatory background check that’s part of the process. But this summer, TSA ran a pilot program at Atlanta’s Hartsfield-Jackson Airport and at Denver International Airport that used those prints and a contactless fingerprint reader to verify the identity of PreCheck-approved travelers at security checkpoints at both airports. Now TSA wants to roll out this program to airports across the country and expand it to encompass face recognition, iris scans, and other biometrics as well.
Is Trump Sabotaging Police on Purpose? - The New York Times has a thorough and damning report on the Trump administration’s efforts to curtail police reform. The Obama administration undertook careful efforts to build consensus around steps toward documenting police practices and correcting abuses, with the goal of reducing tension between law enforcement 0 and civil-rights protesters. The Trump administration has gleefully torn it all apart, often to the frustration of even police in Republican towns. Trump’s efforts to “support police” have gone so far that many police chiefs openly complain that he is sabotaging their efforts to maintain law and order.Why is the Trump administration undermining law enforcement? Incompetence is almost always a better explanation than villainy. But in this case there is more than enough reason to suspect failure is baked into the design.In April I wrote a long story for the magazine arguing that, while Trump’s conventional domestic policy was moribund, his efforts to stoke white racial grievance were succeeding. I believe it’s held up well. Renegotiating trade agreements, building a wall, passing an infrastructure bill, or designing a replacement for Obamacare requires technocratic aptitude Trump (and, for that matter, his party) lacks. But sending crude signals of ethnic affiliation is a simple task, the only requirement for which is a lack of scruples. Examining Trump’s racial agenda is to have a glimpse into an arena where he is enjoying clear success. It is an arena in which the president can achieve his goals without competence. Indeed, incompetence is the surest way to achieve them. By tearing down effective law enforcement, and courting a backlash, Trump creates mutual anger from which he plausibly stands to benefit. As I argued, “A cycle of police abuse, enraged protest, and bloody crackdowns seems not only probable but — from Trump’s point of view — desirable.”
Kushner "Forgot" To Disclose Contact With Putin Ally -- After being accused in a letter earlier this week sent by the leaders of the Senate Judiciary Committee of failing to turn over emails from September 2016 pertaining to a range of topics including Wikileaks, it appears Kushner is being punished for his obstinance with a series of embarrassing leaks presumably from the same committee that publicly chastised him only days before (bonus points for subtlety). The new allegations are likely to provoke more spurious speculation that Kushner and other members of the Trump camp (Sessions etc.) perjured themselves during Congressional testimony. According to the leaks, Kushner neglected to disclose that Aleksander Torshin, a powerful Russian central banker and former senator with ties to both President Vladimir Putin and Russian organized crime, had reached out to the campaign with a "dinner invite" and an offer to connect Trump with Putin. Kushner, who was on the email chain, reportedly instructed junior campaign aides to rebuff the meeting. Also, when asked if he was aware of any contact between Wikileaks and the campaign,Kushner reportedly said he didn’t recall any contact, even though Donald Trump Jr. informed Kushner, and several other senior campaign staff, that Wikileaks had made contact. Kushner reportedly even forwarded Trump Jr.’s Wikileaks email to another campaign staffer, Hope Hicks. Here’s NBC, which was first to report on the Torshin emails...
Special Counsel Mueller Now Probing Kushner's U.N. Contacts With Israel During Transition, WSJ --In a startling illustration of just how expansive Mueller's investigation of the Trump administration has become, the Wall Street Journal now reports that the Special Counsel's team is looking into meetings that Jared Kushner may have conducted with Israeli officials in the days leading up to an important U.N. vote on the construction of settlements in disputed territories on December 23, 2016. Robert Mueller’s investigators are asking questions about Jared Kushner’s interactions with foreign leaders during the presidential transition, including his involvement in a dispute at the United Nations in December, in a sign of the expansive nature of the special counsel’s probe of Russia’s meddling in the election, according to people familiar with the matter.The investigators have asked witnesses questions about the involvement of Mr. Kushner, President Donald Trump’s son-in-law and a senior White House adviser, in a controversy over a U.N. resolution passed Dec. 23 that condemned Israel’s construction of settlements in disputed territories, these people said.Israeli officials had asked the incoming Trump administration to intervene to help block it. Mr. Trump posted a Facebook message the day before the U.N. vote—after he had been elected but before he had assumed office—saying the resolution put the Israelis in a difficult position and should be vetoed. Mr. Trump also held a phone conversation with Egyptian President Abdel Fattah Al Sisi, whose government had written a draft of the resolution.Egypt proceeded to call for the vote to be delayed, but the resolution passed the following day, with the Obama administration declining to block it.Investigators have also asked witnesses about Mr. Kushner’s role in arranging meetings or communication with foreign leaders during the transition, the people said. The special counsel’s mandate gives Mr. Mueller a broad directive to examine any matters arising from the Russia investigation.
The Memo: Mueller probe grinds on, with no end in sight | TheHill: President Trump’s lawyers insist that special counsel Robert Mueller’s probe into allegations of collusions with Russia is nearing an end. But legal experts, including Department of Justice (DOJ) veterans, firmly disagree. “There are so many avenues yet to be fully explored that it is inconceivable that this investigation is coming to a close,” said Jimmy Gurulé, a former assistant attorney general at the DOJ. Gurulé, now a professor at Notre Dame Law School, cited the international scope of the investigation as well as the fact that prosecutors are still interviewing witnesses. Every new interview had the potential to produce fresh leads, he noted. No one outside Mueller’s close-knit team can say for sure where the investigation is going or how long it may last — a dynamic that fuels rampant speculation. The idea the probe could be coming to a conclusion emanates largely from one of the president’s personal lawyers, Ty Cobb. In a Washington Post story published on Sunday, Cobb said that he did not believe various recent revelations would “unduly extend the inquiry.” He also said that, overall, “the issues were narrower” in Mueller’s probe than the media has suggested. Efforts to contact Cobb for this column were unsuccessful, but other allies of the president sounded similar themes.
‘A long winter’: White House aides divided over scope, risks of Russia probe -- Six months into a special counsel’s investigation of Russian interference in the 2016 presidential election, White House aides and others in President Trump’s close orbit are increasingly divided in their assessments of the expanding probe and how worried administration officials and campaign aides should be about their potential legal peril, according to numerous people familiar with the debate. Some in the West Wing avoid the mere mention of Russia or the investigation whenever possible. Others take solace in the reassurances of White House lawyer Ty Cobb that special counsel Robert S. Mueller III will be wrapping up the probe soon and the president and those close to him will be exonerated. And a few engage in grim gallows humor, privately joking about wiretaps. The investigation reached a critical turning point in recent weeks, with a formal subpoena to the campaign, an expanding list of potential witnesses and the indictments of former Trump campaign chairman Paul Manafort and his deputy, Rick Gates. Some within Trump’s circle, including former chief of staff Reince Priebus, have already been interviewed by Mueller’s investigators, while others such as Hope Hicks — the White House communications director and trusted confidant of the president — and White House counsel Donald McGahn are expected in coming weeks. One Republican operative in frequent contact with the White House described Mueller’s team “working through the staff like Pac-Man.” “Of course they are worried,” said the Republican, who insisted on anonymity to offer a candid assessment. “Anybody that ever had the words ‘Russia’ come out of their lips or in an email, they’re going to get talked to. These things are thorough and deep. It’s going to be a long winter.”
A Split From Trump Indicates That Flynn Is Moving to Cooperate With Mueller — Lawyers for Michael T. Flynn, President Trump’s former national security adviser, notified the president’s legal team in recent days that they could no longer discuss the special counsel’s investigation, according to four people involved in the case — an indication that Mr. Flynn is cooperating with prosecutors or negotiating a deal. Mr. Flynn’s lawyers had been sharing information with Mr. Trump’s lawyers about the investigation by the special counsel, Robert S. Mueller III, who is examining whether anyone around Mr. Trump was involved in Russian efforts to undermine Hillary Clinton’s presidential campaign. That agreement has been terminated, the four people said. Defense lawyers frequently share information during investigations, but they must stop when doing so would pose a conflict of interest. It is unethical for lawyers to work together when one client is cooperating with prosecutors and another is still under investigation. The notification alone does not prove that Mr. Flynn is cooperating with Mr. Mueller. Some lawyers withdraw from information-sharing arrangements as soon as they begin negotiating with prosecutors. And such negotiations sometimes fall apart. Still, the notification led Mr. Trump’s lawyers to believe that Mr. Flynn — who, along with his son, is seen as having significant criminal exposure — has, at the least, begun discussions with Mr. Mueller about cooperating. Lawyers for Mr. Flynn and Mr. Trump declined to comment. The four people briefed on the matter spoke on the condition of anonymity because they were not authorized to discuss it publicly. A deal with Mr. Flynn would give Mr. Mueller a behind-the-scenes look at the Trump campaign and the early tumultuous weeks of the administration. Mr. Flynn was an early and important adviser to Mr. Trump, an architect of Mr. Trump’s populist “America first” platform and an advocate of closer ties with Russia. His ties to Russia predated the campaign — he sat with President Vladimir V. Putin at a 2015 event in Moscow — and he was a point person on the transition team for dealing with Russia.
These Are the Ads Russia Bought on Facebook in 2016 - New York Times --They made for a wildly varied slide show, designed by Russia to exploit divisions in American society and to tip the 2016 presidential election in favor of Donald J. Trump and against Hillary Clinton. The House Intelligence Committee provided on Wednesday the biggest public platform to date for a sample of the Facebook ads and pages that were linked by a trail of ruble payments to a Russian company with Kremlin ties. “America, we have a problem,” said Representative Jackie Speier, a California Democrat who sits on the House committee. “We basically have the brightest minds of our tech community here and Russia was able to weaponize your platforms to divide us, to dupe us and to discredit democracy.”Among the ads the committee made public at Wednesday’s hearing were a Bernie Sanders superhero promoting gay rights ..... and a shot of Mr. Trump giving a thumbs up and promoting rallies in Florida. An image of Jesus arm-wrestling Satan (who, the ad said, was backing Mrs. Clinton) ... ... and an endorsement of the Black Panthers as fighters against the Ku Klux Klan. There was a Confederate flag and a call for the South to rise again ... ... and a yellow “No Invaders Allowed” sign posted at the United States border.
Google’s Eric Schmidt admits political censorship of search results - Eric Schmidt, the executive chairman of Google’s parent company, Alphabet, confirmed this weekend that the world’s largest Internet company is, in close coordination with the state, manipulating search results to censor sites critical of the US government.Responding to a question about the “manipulation of information” on the Internet during an appearance at the Halifax International Security Forum, Schmidt announced that Google is working on algorithms that will “de-rank” Russian-based news websites RT and Sputnik from its Google News services, effectively blocking users’ access to either site.Schmidt’s remarks at the gathering of military and national security officials confirm the World Socialist Web Site’s charges that Google has been deliberately altering its search algorithms and taking other steps to prevent people from accessing certain information and specific websites through its search engines. The WSWS has itself been a principal target of these efforts.The statements expose as lies the company’s previous claim that changes to its search engine were aimed at “improving search results” and that these changes were politically unbiased. Google’s efforts are just one part of a much wider government-corporate drive to assert control over the flow of information over the Internet, involving Amazon, Twitter and Facebook, as well as Internet service providers such as Comcast, Time Warner Cable, Verizon and AT&T. The FCC announced this week that it will eliminate “net neutrality” regulations, allowing service providers to limit which sites customers can access, either by throttling Internet download speed or charging extra fees.
What Makes Google's Eric Schmidt So Afraid? (And What Should He Be Afraid of?) - OK, it’s from Russia Today so you should of course not trust it but somehow this video and text and the man in it seems quite factual, not fake and obviously not omitted. It documents that Eric Emerson Schmidt, the Executive Chairman of Alphabet – an American multinational conglomerate that owns a lot and among them Google – is working on “de-ranking” alleged propaganda outlets such as Russia Today, RT – the world’s third largest television network – and Sputnik. On the Wikipedia link you can read more about Mr. Schmidt, one of the richest person on earth, an advocate of net neutrality, a corporate manager and owner of a lot, a collector of modern art, etc. And you can read about his heavy involvement with Hillary Clinton’s recent campaign and the Obama administration and about Schmidt’s involvement with Pentagon, too. Eric Emerson Schmidt’s name is associated with the world’s largest and most systematic data collecting search engine, Google, that millions upon millions use. School children, teachers, parents, media people, politicians and you and I all daily “google” what we need to know. While we do that, Google tracks everything about us and they know everything we are interested in through our “googling” including political interests and hobbies. This very powerful corporate leader with a open political orientation has decided - as will be seen 58 seconds into the video – that the Internet and his hugely dominating search engine a) shall cave in to political pressure, b) de-rank at least these two Russian media organizations because c) he knows they are “propaganda outlets” (it isn’t discussed at all or compared with US or other countries’ media) and d) in the name of political correctness it is OK to limit the freedom of opinion-formation. In fact, he says in a few words that he – well, not he himself but a computer program and mechanism called an algorithm – shall decide what you are I shall be able to find. Google as Good, Google as God. And naturally you ask: Whose next? And where does that end? (“Wherever they burn books, in the end will also burn human beings.” – Heinrich Heine).
Political media engulfed by sexual harassment crisis | TheHill: A wave of sexual harassment allegations is ripping through the White House press corps and broadcast networks, forcing a reckoning on sexism and power dynamics inside newsrooms at a time when the media’s credibility is already under attack. The list of men in political media accused of sexual misconduct is long and growing by the day. Glenn Thrush of The New York Times, Charlie Rose of CBS, author Mark Halperin, NBC’s Matthew Zimmerman, NPR’s Michael Oreskes, Vox’s Lockhart Steele, The New Republic’s Hamilton Fish and The Atlantic’s Leon Wieseltier have all been suspended or fired in the last month over varying degrees of alleged harassment or assault. New allegations are coming out at a furious pace, in part because of the newfound willingness of news organizations to pursue and publish allegations from women who now feel emboldened to tell their stories, many of them on the record. Media outlets are devoting tremendous resources to investigating their colleagues and competitors. Lists are circulating in journalism circles of men suspected of misconduct. The flood of allegations about top editors, reporters and executives is expected to continue. The cascade of claims of misconduct has opened the media to charges of hypocrisy as it covers allegations of sexual harassment and assault from Hollywood to Capitol Hill. “Further complicating the media's image in all of this is the sanctimonious manner in which the media has covered sexual harassment in other corners of society,” “It is difficult for the news media to parade around as haughty overseers of right and wrong in broader contexts of society when they clearly have in-house confusion about first principles of decency.”
Bill Clinton Faces Sexual Assault Accusations From Four More Women -- In a stunning revelation that could leave an indelible stain on the Clintons’ political legacy and possibly quash Hillary Clinton's dreams of running for president again in 2020, the Daily Mail is reporting that four women have shared their accounts of being sexually assaulted by Clinton in a new book written by former New York Times editor Ed Klein that will hit shelves later this week. According to the mail, the women allege the former president assaulted them in the early 2000s, when Clinton was working with playboy billionaire investor Ron Burkle. Clinton and Burkle used to travel together on Burkle’s private jet, which earned the reprehensible nickname “Air F*** One”. All of the women are former employees of Burkle who said Clinton took advantage of his power over them.Bill Clinton is facing explosive new charges of sexual assault from four women, according to highly placed Democratic Party sources and an official who served in both the Clinton and Obama administrations.The current accusations against the 71-year-old former president — whose past is littered with charges of sexual misconduct — stem from the period after he left the White House in 2001, say the sources.Attorneys representing the women, who are coordinating their efforts, have notified Clinton they are preparing to file four separate lawsuits against him.As part of the ongoing negotiations, the attorneys for the women are asking for substantial payouts in return for their clients' silence.
"They Went After The Women Who Came Forward" - Former Obama HHS Secretary Exposes The Clintons -- In an interview conducted on a CNN podcast by former Obama chief adviser David Axelrod, former Obama Health and Human Services Secretary Kathleen Sebelius opened up about the cover-up and subsequent attacks on the women who accused then President Clinton in the 1990’s.“Not only did people look the other way, but they went after the women who came forward and accused him,” Sebelius stunningly detailed. Keep in mind this is a fact that the alternative media has reported on literally hundreds and hundreds of times while being attacked as right-wing conspiracy theorists for doing so.“And so it doubled down on not only bad behavior but abusive behavior. And then people attacked the victims,” Sebelius continued.Sebelius made clear that her criticism extends directly to Hillary Clinton herself who was widely known to be the driving force behind the attacks on her husbands accusers. An article written about the podcast by CNN couldn’t hide from the fact that this is absolutely Hillary’s problem as well.Sebelius extended her criticism to Hillary Clinton, and the Clinton White House for what she called a strategy of dismissing and besmirching the women who stepped forward - a pattern she said is being repeated today by alleged perpetrators of sexual assault - saying that the criticism of the former first lady and Secretary of State was “absolutely” fair.Sebelius noted that the Clinton Administration’s response was being imitated, adding that “you can watch that same pattern repeat, It needs to end. It needs to be over.” The comments came during a conversation with David Axelrod on the latest episode of “The Axe Files,” a podcast produced by the University of Chicago Institute of Politics and CNN.
The Great American Sex Panic of 2017 - I confess to being troubled rather than elated by the daily rumble of idols falling to accusations of “sexual misconduct,” the morbid masscult fixation that conceals private titillation, knowing smirks, and sadistic lip-smacking behind a public mask of solemn reproof.Weinstein and Trump and Roy Moore and Bill Clinton are vile pigs and creeps, no doubt; I have always detested the smug neoliberal performance-art strut of Al Franken and the careerist-toady journalism of Glenn Thrush and Charlie Rose, the latest dominoes to tumble amid the barrage of public accusations of “inappropriate” advances or touching.But the boundary between cultural tolerance/intolerance blurs and shifts with each passing revelation, as the litany of sins, ancient or recent, cardinal or venal, snowballs into an avalanche of aggrieved, undifferentiated accusation—a stampeding herd of “Me-Tooists.” Successive waves of long-forgotten gropes and slurps now overwhelm the news channel chyrons, leaving us with the sense that no greater crime against humanity is possible than an unsolicited horndog lunge of the hand or tongue, some of them from twenty or thirty years past but divulged only in the past few weeks. Let’s be honest—these “shocking” revelations about Franken—that he tried to tongue-kiss a woman one time in a rehearsal and mock-grabbed her somnolent breasts in a silly frat-house pose or that maybe his hand strayed too far toward a woman’s derriere as he obliged her with a photo at a state fair five years ago—would have elicited nothing more than a public yawn just a few weeks or months ago in the BW (Before Weinstein) era; in fact, these two women, seemingly unperturbed enough to leave these incidents unreported for five or six years, would likely not have thought to join the solemn procession of the violated on national TV if not for the stampede effect of each successive cri de coeur.
Warren, Van Hollen probe Bank of Tokyo's switch to national bank - — Democratic Senators Elizabeth Warren and Chris Van Hollen sent a letter to the Office of the Comptroller of the Currency on Monday questioning the regulator's decision to approve an application by the Bank of Tokyo to convert its charter from a New York State license to a federal license."We are disturbed by this decision, which appears to (1) allow the bank — which has a long record of compliance problems with the New York Department of Financial Services (DFS) — to evade an ongoing state-level investigation; and (2) run counter to standard OCC policies and procedures for licensing decisions," the Massachusetts and Maryland lawmakers said in a letter to acting Comptroller Keith Noreika and incoming Comptroller Joseph Otting. Otting was confirmed by the Senate 54-43 last week, with the support of two Democrats. Warren and Van Hollen, who sit on the Senate banking panel, also said it is “especially troubling" that the decision to approve the charter conversion was done while the OCC was under the leadership of Noreika, who represented Bank of Tokyo’s parent company Mitsubishi UFJ Financial Group before joining the OCC. Noreika reportedly recused himself from the application approval process, but the lawmakers still found the process troubling.“The decision raises additional questions about conflicts of interest that may have affected the OCC process and decision," said the letter.The lawmakers also accused the Bank of Tokyo of trying to "sidestep a New York investigation" into whether it was allowing customers to avoid sanctions on countries like Iran and North Korea.“We are deeply troubled that the OCC would not fully consider the implications of allowing a bank to change its charter in the midst of an investigation into potential sanctions violations given the recent tension related to North Korea's nuclear program,” they said. The letter asks for a response by Dec. 1.
SEC Continues to Tout Performance of Underwhelming Whistleblower Program -- Jerri-lynn Scofield - The Office of the Whistleblower of the Securities and Exchange Commission (SEC) released its annual report last week, discussing its results during fiscal year 2017.The full report can be found SEC Annual Report 2017 Whistleblower Program. Sadly, the program continues to underperform. In the seven years it has been running since its establishment under the Dodd-Frank Act, a mere $160 million has been awarded to 46 whistleblowers. The agency summarized the top ten payouts in Figure 1 below. Only 46 Whistleblower awards in 7 years? During what may only be described of an epic outbreak of fraud and abuse, when we see one industry after another producing crapified products? Come on! Are they serious? In a previous post, SEC Takes Victory Lap for Pathetic Performance of Whistleblower Program, I recapped the history of the SEC’s whistleblower program.Allow me to reprise some key points.First, measures to promote whistleblowing have long been a part of the US legal system. So there’s little excuse for underperformance, as it’s there’s been a long history in this regard:Incentives for private parties to spill the beans are a hallowed component of the US legal system, dating back to the Civil War-era False Claims Act (FCA) and extended by Congress in 1986. This statute includes “qui tam” provisions permitting individuals to sue on behalf of the government– and to receive a bounty if they prevail. The phrase qui tam is an abbreviation for the Latin “qui tam pro domino rege quam pro se ipso in hac parte sequitur”, which means “[he] who sues in this matter for the king as well as for himself.”And second, the current SEC program, authorized under Dodd-Frank, was badly designed from the start. This has serious consequences and certainly squelches many potentially valid claims: Some would say that the SEC program was badly designed from the start in that it left it to the SEC alone to decide whether to file a legal claim based on the whistleblower’s report. I would say this was a feature not a bug but will not belabor the point. From the SEC’s website “The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered.”
Three things FDIC's Gruenberg doesn't like about Senate reg relief deal — The Senate Banking Committee is preparing next month to vote on a deal to roll back bank regulations, but Federal Deposit Insurance Corp. Chairman Martin Gruenberg warned against enacting at least three of the provisions. During a press conference Tuesday, Gruenberg said raising the Dodd-Frank systemic bank threshold to $250 billion from $50 billion was an error, suggesting it was too high. “There is room for adjustment in the $50 billion asset threshold for intuitions to be subject to the enhanced prudential standards, but I also raise caution in testing that,” Gruenberg said. "$250 billion might go further than appropriate." He argued that even banks below the current $50 billion threshold can incur significant costs if they fail. Under the bill, which was an agreement struck between Senate Banking Committee Chairman Mike Crapo and several Democrats and Republicans, the threshold would be immediately raised to $100 billion and then further increased to $250 billion after 18 months. The Federal Reserve Board would still have the ability to target banks with between $100 billion to $250 billion of assets if it determined they posed a threat to the economy. Gruenberg also objected a proposed change to the Dodd-Frank supplementary leverage ratio. The provision requires banks to hold a 3% ratio of equity to on-balance-sheet assets and off-balance-sheet exposures. Global systemic financial institutions have to meet a more rigorous 5% ratio called the enhanced supplementary leverage ratio.The Senate bill would allow custodial banks to exempt deposits at central banks from the enhanced supplementary leverage ratio calculation, which would mean they wouldn’t have to hold as much equity.“Deductions from the denominator of the enhanced supplementary ratio which applies to the systemically important financial institutions ... there is a provision in the bill that impacts that so that would be a matter of concern,” Gruenberg said. Additionally, Gruenberg raised concerns about a change to the Volcker Rule, which was created by Dodd-Frank to prevent banks from proprietary trading with customer deposits. “On the Volcker Rule, I think there is room to reduce compliance” for smaller institutions with assets of less than $10 billion, Gruenberg said. But he said he preferred a “safe harbor” approach for smaller institutions, whichy typically don’t have as much trading activities as larger banks.
Blockchain Gets a Wall Street Win: ‘We Know the Thing Works Now’ - The prospect of blockchain technology remaking financial services just moved a step closer to reality after banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. completed a successful six-month test in the $2.8 trillion equity swaps market. The program, managed by blockchain startup Axoni, kept track of the swaps contracts after they were executed, recording things like amendments or termination of the deals, stock splits and dividends, and achieved a “100 percent success rate,” Axoni said in a statement Monday. Other participants include the Canada Pension Plan Investment Board, Citigroup Inc., BNP Paribas SA and Credit Suisse Group AG. “We’re on a path to take this forward,” Axoni Chief Executive Officer Greg Schvey said in an interview. “We know the thing works now.” Blockchain software has captivated Wall Street because it could vastly reduce the cost of back-office operations and speed up trade clearing and settlement times. Banks have to set aside capital while they wait for transactions to be settled, so billions of dollars could be freed up for other uses if trade times go down to minutes from days or even weeks. A blockchain system for equity swaps works to speed transaction times because the banks and asset managers all become members of a network that shares a so-called distributed ledger. Each member has an up-to-date copy of the ledger, so when payments need to go from one participant to another they can be processed almost in real time.
JPMorgan said to weigh offering CME bitcoin futures to clients -- JPMorgan Chase is weighing whether to help clients bet on the price of bitcoin via the CME Group’s proposed futures contracts, according to a person with knowledge of the situation.The largest U.S. bank is gauging client demand and the potential risks of facilitating their trades, the person said, asking not to be identified talking about internal deliberations. Chicago-based CME Group has said it hopes to offer bitcoin futures by the end of the year. Bitcoin’s eightfold surge in value this year is forcing Wall Street banks to balance clients’ interest in speculating on the cryptocurrency with executives’ skepticism about its future. JPMorgan Chief Executive Jamie Dimon has been one of bitcoin’s most prominent detractors, calling it a fraud and deriding buyers as “stupid,” but his finance chief, Marianne Lake, has struck a more measured tone. The firm is “open-minded” to the potential uses for digital currencies so long as they are properly regulated, she said last month.JPMorgan already allows clients some access to bitcoin through an exchange-traded note, which involves routing their orders to exchanges. Handling client trades of futures contracts is conceptually similar but could still pose some risks, according to the person. The New York-based bank’s deliberations were reported earlier by The Wall Street Journal. The exchange operator Cboe Global Markets is competing with CME Group to introduce bitcoin futures.
Is bitcoin ‘the next kale’? — There were mutual funds and software for advisors, even silk ties, pocket squares and colorful socks for sale at Schwab Impact, but no bitcoins. This was truly a missed opportunity, since it’s the one investment that had nearly every advisor and executive talking at the convention this week. The buzz among wealth managers greatly resembled the blend of curiosity and apprehension about cryptocurrencies evident in banking in recent years, and it highlighted how the conversation is widening.Publicly, bitcoin — which has reached a historic high of over $7,900 per token — was held out as an example of unbridled fintech disruption.Charles Schwab CEO Walt Bettinger told the conference that bitcoin would soon require government regulation, lest it would grow into a threat to governments worldwide, challenging local currencies. Even “Liar’s Poker” author Michael Lewis, who has made a career narrating Wall Street’s excesses, told the audience that he “didn’t see the story” behind the sudden rise of cryptocurrency.“There was something unreal about it,” he said, describing the first time he met bitcoin enthusiasts. “The insecurity of bitcoin as a store of value is a big problem. The volatility of bitcoin means it’s very hard to use as a means of exchange.” Lewis told the audience he perceived bitcoin as a “pump-and-dump” scheme by its owners. Despite such public admonition, more than one advisor or executive in attendance privately copped to owning a bitcoin, or envying a colleague who had bought into the cryptocurrency before its recent meteoric rise. “My friend kept putting his bonuses into bitcoin,” one executive said. “It’s worth over $1 million now. I was just talking to him the other day. He couldn’t believe it — seven figures now!” The executive asked his friend if he was going to cash out. “He said, nah, he wanted to see where it would go.” Liz Ann Sonders, Schwab’s chief investment strategist, sighed at the mention of cryptocurrency and acknowledged calls from curious clients about cryptocurrency investing. Sonders noted that Schwab, like many custodians, is developing blockchain technology to explore its potential to transform how the industry records transactions and custodies assets. But bitcoin is still even difficult to purchase, she noted. “Some of it smacks of speculative excess.” “Ask them what a bitcoin is, ask them what a cryptocurrency is — I bet you none of them would know,” she said. “I ask people why they’re interested, and they tell me, ‘I don’t know, it seems like the next big wave.’ It’s the next kale.”
Cleveland Fed withdraws online lending study after doubts arise -- The Federal Reserve Bank of Cleveland has removed from its website a study critical of the online lending industry that came under fire for its methodology. A spokesman for the regional Fed bank said Saturday that the research was taken down after its authors received questions about the composition of the data set they used. “In light of the comments received, the authors are currently revising their paper to further clarify the data sample they used in the study,” Cleveland Fed spokesman Tim Dewald said in an email. “Their revised paper will be posted as soon as it is completed.”The study, titled “Three Myths About Peer-to-Peer Loans,” ignited controversy shortly after it was published on Nov. 9. Nathaniel Hoopes, the executive director of a trade group representing marketplace lenders, had been demanding that the Cleveland Fed retract the study. “Just in defining the industry, they are literally off the mark by many orders of magnitude and tens of billions of dollars,” he said. The Cleveland Fed researchers purported to show that consumers who turn to peer-to-peer loans — sometimes known as marketplace loans, fintech loans or online loans — have worse financial outcomes than similarly situated consumers who do not take out those loans.The study found, for example, that the online borrowers ended up with more debt and lower credit scores than their peers who abstained. But questions soon arose about the data that the researchers used to obtain their findings.The data, which came from the credit bureau TransUnion, was purportedly used to identify roughly 90,000 individuals who took out an online loan between 2007 and 2012.But a TransUnion executive said Wednesday that none of the data the firm provided to the Cleveland Fed distinguished between peer-to-peer loans, fintech loans and traditional personal loans.
CFPB's Cordray urges CEOs to give consumers more control over payments, cards - A week before he is due to resign, the director of the Consumer Financial Protection Bureau sent a letter to 29 chief executives at banks, credit unions and other financial companies, urging them to help consumers exert more control over credit cards, debit cards and other payment methods. "On the eve of my leaving the bureau, I urge you to think creatively about how you can put more control directly in the hands of your consumers," Cordray wrote. "This will help them as they worry about data breaches, and could help you minimize the incidents of fraudulent use of credit cards and debit cards and other payment methods." Banks and fintech companies are working to strengthen security and protect consumer data after Equifax reported one of the worst data breaches in history. Equifax said Sept. 7 that hackers had accessed names, dates of birth and Social Security numbers for more than 145 million consumers. Cordray has occasionally sent letters to the CEOs of financial companies in the past urging them to create bank accounts without overdraft features, or to share credit scores with consumers on a regular basis. "There is enormous value in new technology that makes it feasible, right now, to enable consumers to exert much greater control over their credit cards, debit cards and other payment methods," he wrote. He wrote that his suggestions, which are not considered regulatory guidance, would result in lower chargeoffs. "We have not pressed these upon you as regulatory requirements, but as matters you would do well to consider as you seek to better serve your customers," he wrote.
Consumer Financial Protection Bureau takes $1.1M enforcement action against Xerox - The Consumer Financial Protection Bureau settled a $1.1 million enforcement action with Xerox Business Services on Monday for allegedly misreporting borrower payment history to credit reporting agencies.The company, now called Conduent Business Services, provided software to five auto lenders that would automatically generate the information, but the CFPB said a defect in the software code caused the auto lenders to report flawed data for more than a million borrowers in 2016 alone. Conduent acquired the software from another developer, but created flaws when it made modifications to the code when some of the auto lenders asked for specific featuresThe CFPB also said that the company discovered the problem after some clients reported that inaccurate information was being sent to the credit bureaus, but did not notify other customers about the broken software. "Xerox provided flawed software that resulted in incorrect or incomplete credit reporting information on more than a million borrowers,” CFPB Director Richard Cordray said in a press release. “The company compounded the problem by keeping lenders in the dark about the defects.” Under the consent order the company signed, it will have to explain the errors to its auto lender customers, correct future problems within 30 days of being discovered and provide the CFPB with a compliance plan to prevent future mistakes. “Mistakes on credit reports can greatly harm consumers, so we are ordering Xerox to fix its flawed systems,” Cordray said.
CFPB orders Citi to pay $6.5M for student loan failures - The Consumer Financial Protection Bureau on Tuesday ordered Citibank to pay $6.5 million in consumer relief and penalties for student loan servicing failures.The CFPB said in a consent order that Citi erroneously canceled deferments for some borrowers based on inaccurate information and then incorrectly charged late fees and interest on the loans while the students were still enrolled in college. After discovering that deferments had been terminated in error, Citi failed to refund late fees and added interest payments to loan balances, the agency said. “Citibank’s servicing failures made it more costly and confusing for borrowers trying to pay back their student loans,” said CFPB Director Richard Cordray. “We are ordering Citibank to fix its servicing problems and provide redress to borrowers who were harmed.” The CFPB ordered Citi to pay $3.75 million in redress to consumers and a $2.75 million civil money penalty.In 2010, Citi sold its student loan business to Discover, and the CFPB ordered Discover in 2015 to pay $18.5 million for student loan failures. However, Citi retained and continued to service a portion of its private student loan portfolio."We are pleased to resolve this matter," said Mark Costiglio, a Citi spokesman.Earlier this year, the CFPB warned student loan borrowers to watch out for surprise late fees and other charges based on inaccurate information about whether students were still enrolled in college. The CFPB said Citi also misled borrowers about the ability to deduct up to $2,500 in student loan interest on their taxes. Citi suggested on its web site and in periodic account statements that borrowers were not eligible for the qualified interest deduction, the CFPB said.
D.C. misses the point about overdraft: It helps consumers - House Democrats want legislation limiting overdraft fees to one per month for each consumer, and no more than six fees in a single year. But draconian steps like this and others like it would remove a safe and convenient option for consumers managing their budget and expenses. The Consumer Financial Protection Bureau expressed a similarly heavy-handed view on overdraft in an August report indicating the belief that consumers may not fully understand the overdraft product. The CFPB released four sample disclosures to make it easier for users to evaluate the costs and risks of overdraft coverage. CFPB Director Richard Cordray said consumers “need to better understand how an overdraft works and whether they want to take the risk of paying overdraft fees on debit-card transactions and ATM withdrawals.” But this point seems to overlook the reality that debit cards, ACH and ATM withdrawals — not checks — are how most consumers conduct business today. The CFPB’s 112-page report failed to mention that one way these consumers survive when they have difficulty making their rent or mortgage payment, purchasing groceries and medicine, and making health insurance payments is by overdrawing their checking account. For example, a consumer typically must pay his or her rent, buy groceries and purchase required medication one week prior to payday. If a bank is only permitted to charge one overdraft fee per month, then two of these payments will be returned as insufficient funds. Financial institutions are giving consumers an easy, safe and convenient way to survive by permitting an overdraft. But if financial institutions cannot charge a fee to pay an overdraft, then the financial institutions will refuse to pay the item. If someone overdraws an account with a check or ACH payment, the payment will then be returned and an insufficient funds fee will be charged to the consumer.
Banks aren't following CFPB data-sharing guidance, fintechs say - While some fintechs and data aggregators appear to have buried the hatchet with banks when it comes to sharing customer account data, not everyone is ready to say the battle is over. Some fintechs are accusing financial institutions of not following either the spirit or letter of the data-sharing principles the Consumer Financial Protection Bureau released in October. “While the principles have been publicly embraced, it’s important that they’re also fully implemented behind the scenes,” said Eric Showen, head of partnerships and policy at Plaid, a data aggregator. “A pick-and-choose approach, while tempting for some banks, doesn’t work for consumers.” But banks disagree, arguing they are following through on the principles. “We believe we’ve addressed every use case that’s been presented to us for data,” said Stuart Rubinstein, head of data aggregation at Fidelity Investments. “But it’s possible there will be a new use case or one we missed. We’re happy to talk about those.” One of fintechs’ primary accusations is that banks are selectively choosing fintechs to work with — leaving the rest out in the cold. Though the CFPB data-sharing principles do not spell out that banks should work with everyone equally, the spirit of the document suggests financial institutions should work with all trusted third parties. “Right now it feels like financial institutions are cherry-picking the providers with whom they want to work,” said Kathryn Petralia, co-founder and chief operating officer of the online small-business lender Kabbage, who spoke on behalf of the Consumer Financial Data Rights group, which represents 31 fintechs and data aggregators. “We have no idea what the backroom deal is on any of those transactions and it feels paternalistic, like the banks are telling their customers, ‘We know what’s good for you more than you do; you should only share your data with these people with whom we have a deal.’
Mulvaney as CFPB head? Five things to know --If President Trump taps Office of Management and Budget Director Mick Mulvaney as interim head of the Consumer Financial Protection Bureau, as is widely expected, he will be a sea change from outgoing head Richard Cordray. Mulvaney, a former congressman from South Carolina, was a fierce critic of the bureau when in Congress and he sat on the Financial Services Committee. The CFPB is “a sad, sick joke,” he said at one point, calling it “one of the most offensive concepts I think, in a representative government,” and claiming, “We have created … the very worst kind of government entity.” The former lawmaker was particularly critical of the CFPB's small-dollar loan rule, which was finalized last month and will effectively upend the lucrative payday lending business if it is implemented. Mulvaney has also staked out a number of other positions about the CFPB's structure and activities. As a result, it appears likely that Mulvaney, if chosen, could begin to radically reshape the agency as the administration searches for a permanent successor. He also would hold a position on the Financial Stability Oversight Council and a board seat at the Federal Deposit Insurance Corp., potentially having an impact on the agenda of those two organizations. Moreover, Mulvaney also has taken stances on another key financial issue, reforming the government-sponsored enterprises. It's not clear how much of a role a CFPB director could have in that debate, but some of the agency's rules, namely its "Qualified Mortgage" regulation, would be affected by changes to Fannie Mae and Freddie Mac. Following are five areas where Mulvaney has detailed his views: (slides)
CFPB Directorship Succession: What the Dodd-Frank Act’s Legislative History Tells Us - Adam Levitin, Credit Slips - The idea that the President could appoint an acting Director for the CFPB until such time as the Senate confirms a Director derives from the belief the the CFPB's Directorship succession is controlled by the Federal Vacancies Act. Most analyses of whether the FVA applies conclude that it does (see here, e.g.). They're wrong. The Consumer Financial Protection Act expressly provides for a different succession, namely for the CFPB's Deputy Director to assume the role of acting Director: "the Deputy Director ... shall... serve as acting Director in the absence or unavailability of the Director." . To be sure, one might argue just from the text about what "absence or unavailability" covers--perhaps it covers situations other than and short of vacancy?--but there's a kicker that has been entirely ignored in all the analyses I've seen: the legislative history of the Consumer Financial Protection Act. The version of the Consumer Financial Protection Act that originally passed the House was very clear that the FVA applied. It stated that "In the event of vacancy or during the absence of the Director (who has been confirmed by the Senate pursuant to paragraph (2)), an Acting Director shall be appointed in the manner provided in section 3345 of title 5, United States Code." Section 3345 of title 5 is the FVA. The quoted language didn't make it into the enacted version of the legislation. Instead, the conference committee that reconciled the House and Senate bills adopted the language in the Senate bill, about "absence or unavailability." In other words, Congress knew very well how to say that the FVA applies ... but ultimately decided that it would not apply. To my mind, this legislative history resolves any ambiguity about whether the Consumer Financial Protection Act's language qualifies as an express provision opting out of the FVA succession line. Bottom line: any appointment of Mick Mulvaney ... or Steve Mnuchin ... or anyone by President Trump to be acting CFPB Director would be illegal, and would call into question not only any actions taken by the CFPB, but also actions undertaken by the FDIC and FSOC, as the CFPB Director serves on those boards. If President Trump wants to choose the CFPB Director, there's a straight-forward way of doing it: go through Senate confirmation.
CFPB’s constitutionality question doesn’t end with Cordray’s departure - With just over a week to go before Richard Cordray steps down from the Consumer Financial Protection Bureau, the bureau still faces a looming legal showdown with President Trump over whether he has the authority to fire the head of an independent agency. Cordray's departure would appear to make a ruling by the U.S. Court of Appeals for the D.C. Circuit moot, except that a ruling in the case, which is expected any day now, could have an impact on Trump's interim and final picks to lead the CFPB. Depending on how PHH Corp. v. CFPB plays out, it could help or hurt the Trump administration in its efforts to control the CFPB, as well as resolve key questions about the agency's structure and powers. "The PHH case still definitely matters; it still has an outcome that could impact the bureau," At issue is a ruling last year by a three-judge panel that found the CFPB's structure is unconstitutional, and said the president could fire a director at will. That case was quickly appealed by the CFPB and is subject to a review by the entire Court of Appeals. Republicans have argued for years that the CFPB's single-director structure is unconstitutional, objecting to language in the Dodd-Frank Act that said a director could only be fired "for cause." If the appeals court affirms the lower court ruling, it would give Trump more leeway to determine a new CFPB director immediately. While the Trump administration has signaled it wants to temporarily appoint Office of Management and Budget Director Mick Mulvaney to the post while a permanent successor is nominated and confirmed, it's not clear if he has legal leeway to do so. While some say Trump has that power once Cordray leaves, a strict reading of the Consumer Financial Protection Act suggests a deputy director, in this case, David Silberman, would fill that role until a successor is confirmed. Because Cordray would be considered absent or unavailable by virtue of his resignation, the CFPB could name Silberman as interim director "regardless of whatever decision Trump makes with respect to Mulvaney or anyone else." Adam Levitin, a professor at Georgetown University Law Center, wrote in a recent blog post that any appointment by President Trump to be acting CFPB director "would be illegal."
Cordray out at CFPB, names own acting successor — Consumer Financial Protection Bureau Director Richard Cordray abruptly announced Friday that he would step down by the end of the day - nearly a week earlier than initially planned - and appointed a new deputy director to serve as his successor. Leandra English, who until Friday served as the agency's chief of staff, was promoted to deputy director, effectively immediately. In that role, she will serve as head of the CFPB once Cordray has left the agency. “In considering how to ensure an orderly succession for this independent agency, I determined that it would be best to avoid leaving this key position filled only in an acting capacity,” Cordray said in an email to CFPB staff. English will replace David Silberman, associate director of research, markets, and regulations division, who has been serving as the acting deputy director. While Cordray's departure is not a surprise, the timing of it caught the financial services industry off guard. Cordray announced last week he intended to step down at the end of November. He is widely expected to run for governor of Ohio. What happens next is unclear. The Trump administration is expected to attempt to name a new interim head of the bureau. Under the Federal Vacancies Act, the administration must chose someone who has already been confirmed by the Senate. It is widely expected that President Trump will choose Office of Management and Budget Director Mick Mulvaney to take the CFPB job temporarily. Yet it's not entirely clear that Trump has the power to appoint an interim director. Under the Dodd-Frank Act, which created the CFPB, the law specifically says the job of director falls to the deputy director of the CFPB until a successor is nominated and confirmed by the Senate. Many lawyers say that Dodd-Frank, as a more recent and specific statute, takes precedence. They have been quietly arguing for weeks that a legal battle may be in the offing if Trump tries to appoint an interim successor, but the CFPB does not recognize the appointment as valid. Some sources suggested the Trump administration could make its own move as early as Friday evening.
Trump taps Mulvaney to head CFPB, sparking confusion over agency's leadership - President Donald Trump on Friday named White House Budget Director Mick Mulvaney acting director of the Consumer Financial Protection Bureau, setting up a legal clash over who is in charge of the controversial agency.The announcement came just hours after outgoing CFPB Director Richard Cordray appointed the agency’s chief of staff, Leandra English, as deputy director, establishing her as his successor as he steps down today. The two moves plunged the agency into confusion over the leadership of the bureau, which was established in the wake of the financial crisis and has become a lightning rod for attacks by Republicans and business executives for its aggressive enforcement.“The President looks forward to seeing Director Mulvaney take a common sense approach to leading the CFPB’s dedicated staff, an approach that will empower consumers to make their own financial decisions and facilitate investment in our communities,” the White House said in a statement Friday night.“Director Mulvaney will serve as Acting Director until a permanent director is nominated and confirmed,” the statement said. The 2010 Dodd-Frank Act, which created the CFPB, explicitly says the consumer bureau's deputy director shall “serve as acting Director in the absence or unavailability of the Director,” giving the edge to English.
Legal clash looms for CFPB leadership after Cordray departure - Consumer Financial Protection Bureau Director Richard Cordray's decision to step down Friday and name his own successor has thrown the agency into legal turmoil, setting up a legal clash with the Trump administration. Cordray appointed Leandra English, the agency's chief of staff, as deputy director of the CFPB, effective immediately. Citing specific language in the Dodd-Frank Act, which created the CFPB, Cordray said that she would be the acting director of the agency once he left at the end of the day. The move appeared designed to stop the Trump administration from appointing its own interim agency head. But within hours, the Trump administration said it had picked Office of Management and Budget Director Mick Mulvaney as interim director. It was unclear who will show up to work on Monday to claim leadership of the agency. Ultimately, the issue is likely to go to the courts."There's going to be a court battle, and it has the potential to embroil the Trump administration in another difficult court challenge," said Christopher Peterson, a professor at the University of Utah's S.J. Quinney College of Law, and a former CFPB special advisor to Cordray."This is uncharted territory."At issue is the language of Dodd-Frank, which says that the bureau's deputy director will serve as acting CFPB director in the "absence or unavailability of the director." That is different from the earlier Federal Vacancies Act, which generally gives the president the power to appoint any Senate-confirmed individual to the temporary leadership of an independent agency. Lawyers said the question is whether Dodd-Frank, which was more recently enacted, supercedes the Federal Vacancies Act in this case. The Trump administration is likely to argue that Cordray's voluntary departure doesn't count as an "absence or unavailability."
The Myriad Irregularities of the Mulvaney "Appointment" - Adam Levitin - I want to emphasize just how irregular and probably illegal the Trump administration's attempt to make OMB Direct Mick Mulvaney the acting Director of the CFPB really is. First, there's the problem that it's hard, nay impossible, to read the Federal Vacancies Reform Act and Consumer Financial Protection Act and the relevant legislative history and come away thinking that the FVRA clearly controls. At most, there's ambiguity; I can't imagine a competent attorney writing a legal opinion that says anything more than that. Second, even if one believes that the FVRA governs or even might govern, it does not mandate Mulvaney's appointment as acting Director. Instead, the default setting under the FVRA is that the CFPB's Deputy Director would become the acting Director. Thus, if one believes there is statutory ambiguity, the prudent position would be to let the CFPB Deputy Director serve as acting Director, and proceed expeditiously to nominate a permanent Director for the Bureau. President Trump could have sent the Senate a nomination for a CFPB Director today. He didn't. Instead, he decided to put in place a cabinet member who already has substantial duties without running a second federal agencies. (Of course, Mulvaney's plan, it seems, is to only run one agency and shut down the other, so maybe it isn't actually double duty.) I'd be quite surprised if the President nominates anyone to be a permanent Director--the plan is to keep Mulvaney in place for as long as possible. That's not a good faith approach to the issue. Third, there's a Mulvaney-specific problem. Mulvaney is a cabinet officer who serves at the pleasure of the President. That role is inconsistent with that of the head of an independent agency who can be removed only for cause. By wearing two hats, Mulvaney would inherently compromise the CFPB's independence from the White House. And given that the CFPB Director is also an FDIC Director, the problem exists there too. Serving in the executive branch in an at-will cabinet position and a for-cause independent agency position simultaneously seems unconstitutional, as a separation of powers violation: when agencies engage in rulemaking, they are exercising the legislative power. That's a power that's forbidden to the executive. What we see here, then, is an approach that disregards the rule of law. But that shouldn't come as any surprise in this administration.
FDIC: Fewer Problem banks, Residential REO Declined in Q3 ---The FDIC released the Quarterly Banking Profile for Q3 today: Higher net interest income, reflecting modest growth in interest-bearing assets and wider net interest margins, helped earnings increase in the third quarter. Quarterly net income at the 5,737 commercial banks and savings institutions insured by the FDIC rose to $47.9 billion, an increase of $2.4 billion (5.2 percent) from third quarter 2016.1 The average return on assets (ROA) rose to 1.12 percent from 1.10 percent a year earlier. More than two out of every three banks—67.3 percent—reported year-over-year increases in earnings, and 59.8 percent reported higher quarterly ROAs. Only 3.9 percent of banks reported net losses for the quarter, compared with 4.6 percent in third quarter 2016. The Deposit Insurance Fund (DIF) balance increased by $2.9 billion, to $90.5 billion, during the third quarter. ... The DIF’s reserve ratio (the fund balance as a percent of estimated insured deposits) rose to 1.28 percent on September 30, 2017, from 1.24 percent at June 30, 2017, and 1.18 percent four quarters ago. The September 30, 2017, reserve ratio is the highest for the DIF since June 30, 2005, when the reserve ratio was also 1.28 percent.. The FDIC reported the number of problem banks declined slightly: During the third quarter, mergers absorbed 50 insured institutions. Two new charters were added during the third quarter, and there were no bank failures. ... The number of banks on the FDIC’s “Problem Bank List” declined from 105 to 104 during the third quarter. Total assets of “problem” banks fell from $17.2 billion to $16 billion. The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) declined from $3.30 billion in Q2 2017 to $3.08 billion in Q3. This is the lowest level of REOs since Q4 2006. This graph shows the nominal dollar value of Residential REO for FDIC insured institutions.
November 2017: Unofficial Problem Bank list declines to 108 Institutions -- Note: Surferdude808 compiles an unofficial list of Problem Banks compiled only from public sources.Here is the unofficial problem bank list for November 2017. Here are the monthly changes and a few comments from surferdude808: Update on the Unofficial Problem Bank List for November 2017. The list declined by three to 108 banks after four removals and one addition. Aggregate assets dropped by $1.1 billion to $25.5 billion, with the drop including $105 million from asset shrinkage using updated third quarter figures. A year ago, the list held 173 institutions with assets of $59.9 billion. This week the FDIC released their official Problem Bank figures for the end of the third quarter of 2017. The FDIC official list holds 104 institutions with assets of $16.0 billion, which equates to an average asset size of about $154 million. Last quarter, the FDIC said the official list had 105 institutions with assets of $17.2 billion, which equated to an average asset size of $164 million. Thus, during the third quarter of 2017, the FDIC had a net change of one institution and removed $1.2 billion of assets from their official list.
Did US Banks Try to Manipulate the Dodd-Frank Debate by Delaying Mortgage Foreclosures? - In the aftermath of the crisis, the Financial Services Committee was also asking tough questions about the origins of the crisis, how it propagated through the financial system, who were the main players in causing it (banks, borrowers, regulators, rating agencies, etc.), and what new regulations might help avoid future banking crises. It was therefore natural that banks would have political concerns about these exact provisions and how this could impact their profitability and shareholder value. If they wanted to try to reshape and water down the Dodd-Frank Act, they would have to do so while the bill was being debated in Congress. One potential mechanism to do so would be through lowering the number of foreclosures initiated in the districts of Dodd-Frank committee members so that the committee members wouldn’t hear complaints from their constituents about the hardship of the mortgage crisis and would be more lenient during the debate on the bill. Traditionally, banks try to influence politicians directly through campaign contributions and lobbying. For example, the top 10 mortgage servicers, which include some of the largest financial institutions like Bank of America, Citigroup, JPMorgan, and Wells Fargo, collectively spent about $44 million during this period in lobbying both the legislative and executive branches, not just committee members. The combined campaign contributions to the committee members by these mortgage servicers’ political action committees were about $1 million. However, it is conceivable that if the cost of delaying foreclosure starts were on the same order of magnitude then it might be worth spending the additional money. In a recent paper with Gene Amromin, Zahi Ben-David, and Serdar Dinc, I focused on this specific question: whether banks delayed foreclosure initiation on delinquent mortgages in the districts of House Financial Services Committee members during 2009–10 when the Dodd-Frank Act was being debated.
Calls intensify to separate reverse mortgages from FHA fund -- — The Federal Housing Administration's recent actuarial report has added more fuel to the fire over concerns about reverse mortgage losses. A jump in FHA claims for reverse mortgages administered through the Home Equity Conversion Mortgage program drove a 26-basis-point drop in the reserve ratio of the main FHA insurance fund in fiscal 2017, to 2.09%. The decline toward the fund's 2% statutory minimum makes it less likely an Obama-era plan to cut premiums will go forward. In addition to stoking worries about seniors defaulting on their loans, the spike in losses could also influence the debate over whether the financial reporting for FHA reverse mortgages should be separated from the FHA forward single-family program and placed in a separate FHA fund. "It is has become an albatross around the neck of the FHA forward program and millions of low-income and minority homebuyers," The report is likely to amplify voices clamoring for the FHA to separate reporting for the two programs, which proponents say will better illuminate the financial improvements in the insurance fund. The Mortgage Bankers Association, the National Association of Realtors and other groups support a review to look at removing the HECM program from the FHA Mutual Mortgage Insurance Fund. At an October congressional hearing, Housing and Urban Development Secretary Ben Carson agreed that separating the two mortgage programs would be a "worthy pursuit." MBA President and CEO David Stevens said in a press release after publication of the actuarial report earlier this month that removing the HECM program "would strengthen the MMI fund, give a more accurate look at the health of FHA's forward book of business and could allow for the consideration of a mortgage insurance premium reduction." The report noted that the FHA reverse mortgage program has a negative capital ratio of nearly 20%, while the larger FHA forward program had a standalone capital ratio of over 3.3%. Meanwhile, more FHA homeowners are refinancing out of the agency's insurance program and into conventional mortgages than the agency originally expected.
Black Knight: National Mortgage Delinquency Rate increased in October due to Hurricanes -- From Black Knight: Black Knight’s First Look at October 2017 Mortgage Data: National Delinquency Rate Sees Second Consecutive Annual Rise as Impact from Hurricanes Continues
• October’s 4BPS increase in the national delinquency rate can be directly linked to continued hurricane impact, while delinquencies fell 14BPS in non-affected areas
• Though delinquencies were down in all states except Texas and Florida, in FEMA-declared Hurricanes Harvey and Irma disaster areas, they rose another 24 percent (186BPS) in October
• The most notable increase was in Florida, where delinquencies spiked 36 percent from September in hurricane-affected areas
• Over 229,000 past-due mortgages can now be attributed to Hurricanes Irma (163,000) and Harvey (66,000)
• Total non-current inventories in Florida and Texas (all loans 30 or more days past due or in foreclosure) have risen 79 and 30 percent, respectively, over the past six months
• The inventory of loans in active foreclosure continues to improve, falling below 350,000 for the first time since 2006
According to Black Knight's First Look report for October, the percent of loans delinquent increased 0.9% in October compared to September, and increased 2.0% year-over-year. The percent of loans in the foreclosure process declined 2.8% in October and were down 31.4% over the last year. Black Knight reported the U.S. mortgage delinquency rate (loans 30 or more days past due, but not in foreclosure) was 4.44% in October, up from 4.40% in September.The percent of loans in the foreclosure process declined in October to 0.68%. The number of delinquent properties, but not in foreclosure, is up 60,000 properties year-over-year, and the number of properties in the foreclosure process is down 156,000 properties year-over-year.
Hurricanes drive October's increase in late mortgage payments -- Late payments from borrowers living in areas hardest hit by Hurricanes Harvey and Irma were responsible for October's increase in loan delinquencies. Over 229,000 past due mortgages are attributed to the two storms, said Black Knight in its first look report. Most of the late loans were secured by properties affected by Hurricane Irma (163,000), with the remaining 66,000 were in areas hit by Hurricane Harvey. There was a 4 basis point increase in the national delinquency rate compared with September to 4.44%. Every state but Florida and Texas had fewer delinquencies compared with the previous month. The delinquency rate in October 2016 was 4.35%. While Mississippi had the largest percentage of late loans at 10.62%, Florida was second at 9.90%, up 36% from September and 55% from one year ago. Texas had the fifth largest percentage of late mortgages at 7.32%, up 23% from October 2016. Nationwide there were 2.26 million properties at least 30 days late on their mortgage payment but not yet in foreclosure. This was up 17,000 from September and 60,000 from October 2016. Seriously delinquent properties – those 90 days late on their payment but not yet in foreclosure – were 589,000 of total, an increase of 13,000 from the previous month, but down by 88,000 from one year prior. There were 50,200 foreclosure starts in October, up 11% from September but down 11% from October 2016. The number of properties in active foreclosure was 348,000, down by 156,000 from Oct. 31, 2016. It is the first time since 2006 that the foreclosure inventory was below 350,000, Black Knight said. October's prepayment rate was 1.12%, a 17% increase from September but a 25% reduction in activity compared with one year ago.
Mobile Homes Are So Expensive Now, Hurricane Victims Can’t Afford Them - Hurricane victims emerging from ravaged trailer parks are discovering that the U.S. mobile-home market has left them behind. In Florida and Texas, dealerships are swarmed by buyers looking to rebuild their lives after hurricanes Harvey and Irma, but many leave disappointed. The industry, led by Warren Buffett’s Clayton Homes Inc., is peddling such pricey interior-designer touches as breakfast bars and his-and-her bathroom sinks. These extras, plus manufacturers’ increased costs for labor and materials, have pushed average prices for new double-wides up more than 20 percent in five years, putting them out of reach for many of the newly homeless. About 22 million Americans live in “manufactured homes,” a classification that dates back to 1976, when federal law set standards for what used to be called mobile homes. Sales of new units are growing 15 percent annually as the base of buyers expands from rural areas to suburbs and retirement enclaves. Tile backsplashes and kitchen pantries fatten profits and attract buyers who couldn’t afford similar extravagances in conventional houses. The industry, which makes 80 percent of new homes that sell for less than $150,000, was struggling to keep up with demand even before the hurricanes. Manufacturers that closed plants after the housing crash say they’re having difficulty adding capacity because of a shortage of skilled labor. Dealerships such as LeeCorp, among the biggest in Southwest Florida, have backlogs as long as six months. Irma and Harvey damaged almost 1.8 million homes, causing uninsured flood losses of as much as $57 billion, according to CoreLogic Inc., a real estate data firm. At homeless shelters in the Naples area, the waiting list for beds has doubled, especially for single mothers and their children, many of whom are living in tents in the woods or in cars, says Vann Ellison, chief executive officer of St. Matthew’s House, a nonprofit organization. “When their properties are damaged in a place like this, it’s next to impossible to bounce back,” Ellison says. Many have had to walk away from damaged mobile homes they can’t repair or replace, he says.
Mortgage applications inch up from the previous week - Mortgage applications rose slightly this week, increasing 0.1% from a week earlier, according to the Mortgage Bankers Association. The MBA's Weekly Mortgage Applications Survey for the week ending Nov. 17 found that the refinance index dropped by 5% from the previous week, while the purchase index grew 5% from one week earlier. The refinance share of mortgage activity declined from 51.3% to 49.9% from the previous week. The adjustable-rate mortgage share of activity rose to 6.5% of all applications. Of total applications, the Federal Housing Administration share grew to 10.6% from 10.2% from a week prior. The U.S. Department of Veterans Affairs share of total applications also increased from the previous week, growing to 10.7% from 10.1%. The U.S. Department of Agriculture share of total applications remained unchanged again from the previous week at 0.7%.The average contract interest rate for 30-year fixed-rate mortgages with nonconforming loan balances ($424,100 or less) rose to 4.20% from 4.18% from the week prior, with points increasing to 0.42% from last week's 0.40%, including the origination fee, for 80% loan-to-value ratio loans. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) grew to 4.16% from 4.12%, with points growing from 0.40% to 0.42%, including the origination fee, from a week prior for 80% LTV loans. For 15-year fixed-rate mortgages, the average contract interest rate rose to its highest level since March, increasing from 3.54% to 3.56% week-over-week, with points decreasing to 0.43% to 0.42% for 80% LTV loans, including the origination fee. The average contract interest rate for 5/1 ARMs declined from 3.41% to 3.31% from the week prior.
Existing-Home Sales Grew 2% in October - This morning's release of the October Existing-Home Sales increased from the previous month to a seasonally adjusted annual rate of 5.48 million units. The Investing.com consensus was for 5.42 million. The latest number represents a 2.0% increase from the previous month and a 0.9% decrease year-over-year. Here is an excerpt from today's report from the National Association of Realtors.Lawrence Yun, NAR chief economist, says sales activity in October picked up for the second straight month, with increases in all four major regions. "Job growth in most of the country continues to carry on at a robust level and is starting to slowly push up wages, which is in turn giving households added assurance that now is a good time to buy a home," he said. "While the housing market gained a little more momentum last month, sales are still below year ago levels because low inventory is limiting choices for prospective buyers and keeping price growth elevated."Added Yun, "The residual effects on sales from Hurricanes Harvey and Irma are still seen in parts of Texas and Florida. However, sales should completely bounce back to their pre-storm levels by the end of the year, as demand for buying in these areas was very strong before the storms." [Full Report] For a longer-term perspective, here is a snapshot of the data series, which comes from the National Association of Realtors. The data since January 1999 was previously available in the St. Louis Fed's FRED repository and is now only available from January 2014. It can be found here.
NAR: "Existing-Home Sales Grow 2.0 Percent in October" - From the NAR: Existing-Home Sales Grow 2.0 Percent in October: Existing-home sales increased in October to their strongest pace since earlier this summer, but continual supply shortages led to fewer closings on an annual basis for the second straight month, according to the National Association of Realtors®.Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 2.0 percent to a seasonally adjusted annual rate of 5.48 million in October from a downwardly revised 5.37 million in September. After last month's increase, sales are at their strongest pace since June (5.51 million), but still remain 0.9 percent below a year ago. Total housing inventory at the end of October decreased 3.2 percent to 1.80 million existing homes available for sale, and is now 10.4 percent lower than a year ago (2.01 million) and has fallen year-over-year for 29 consecutive months. Unsold inventory is at a 3.9-month supply at the current sales pace, which is down from 4.4 months a year ago. This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993. Sales in October (5.48 million SAAR) were 2.0% higher than last month, and were 0.9% below the October 2016 rate. The second graph shows nationwide inventory for existing homes. According to the NAR, inventory decreased to 1.80 million in October from 1.86 million in September. Headline inventory is not seasonally adjusted, and inventory usually decreases to the seasonal lows in December and January, and peaks in mid-to-late summer. The last graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory. Inventory decreased 10.4% year-over-year in October compared to October 2016. Months of supply was at 3.9 months in October.
Existing Home Sales Drop Year-Over-Year For 2nd Straight Month - First Time Since 2014 - Following September's positive housing data rebound, October data is starting well with existing home sales surging 2.0% MoM (better than expected 0.2%) to 5.48mm SAAR, as US existing home sales inventory tumbled 10.4% YoY, to 1.8 months, the lowest since 1999. Sales of previously owned U.S. homes rose to a four-month high, indicating demand was firming at the start of the quarter as the impact from hurricanes faded, according to a National Association of Realtors report released Tuesday. However, this is the second straight YoY sales decline, first back-to-back months since 2014... The median sales price increased 5.5% YoY to $247,000. Bloomberg reports that Houston and several areas of Florida saw gains when compared with a year earlier, while Miami is still showing some softness, according to NAR. As in the past, economic activity including in the housing industry typically bounces back after major storms as rebuilding and repair work gets under way. Another possible headwind comes from tax legislation being advanced in Congress, which the Realtors association strenuously opposes. The group said last week that the plans debated by lawmakers would “overwhelmingly remove the tax incentive to purchase and own a home in America,” and economists surveyed by Bloomberg said the House bill would reduce demand from homebuyers. “The momentum appears to be good,” Lawrence Yun, NAR’s chief economist, said at a press briefing accompanying the report. The hurricane impact was “more modest” than anticipated in October and activity is “quickly bouncing back.” The tax plan could be a “major wild-card disrupter to the housing recovery,” he said. Even so, he sees another “respectable year in 2018,” provided any tax changes don’t set back demand.
A Few Comments on October Existing Home Sales --My view is a sales rate of 5.48 million is solid. In fact, I'd consider any existing home sales rate in the 5 to 5.5 million range solid based on the normal historical turnover of the existing stock. As always, it is important to remember that new home sales are more important for jobs and the economy than existing home sales. Since existing sales are existing stock, the only direct contribution to GDP is the broker's commission. There is usually some additional spending with an existing home purchase - new furniture, etc. - but overall the economic impact is small compared to a new home sale. Inventory is still very low and falling year-over-year (down 10.4% year-over-year in October). Inventory has declined year-over-year for 29 consecutive months. I started the year expecting inventory would be increasing year-over-year by the end of 2017. However it looks like 2017 will be another year of declining inventory.Inventory is a key metric to watch. More inventory would probably mean smaller price increases, and less inventory somewhat larger price increases.The following graph shows existing home sales Not Seasonally Adjusted (NSA). Sales NSA in October (458,000, red column) were above sales in October 2016 (445,000, NSA) and at the highest level for October since 2006.Sales NSA are now slowing seasonally, and sales NSA will be lower through February.
First-time buyer market to surpass overall housing pace in 2018 - Over half of mortgage industry executives, or 57%, anticipate first-time home buyer growth in 2018, estimating that market will grow at a faster pace than the overall housing market, according to a Genworth Financial survey conducted at this year's Mortgage Bankers Association's Annual Convention in Denver. About 31% of respondents project the first-time buyer market will grow at the same pace of the overall housing market, while only 12% expect the population's growth to slow. Industry professionals were reportedly divided on their expectations for the most likely source for credit expansion next year. Among the most cited sources were LTV loans above 80% and 700 FICO scores below 700. Some respondents also claimed debt-to-income ratios above 41% will most likely be utilized for credit expansion in 2017. Nearly half of mortgage executives expect a strong lender appetite for non-qualified mortgage loan originations next year, suggesting the housing market is on a strong upward trajectory, according to Genworth. Respondents cite a lack of down payment and affordable housing inventory among the biggest hurdles for first-time home buyers, but lenders can combat these impediments through consumer outreach. "Despite their emergence as today's fastest-growing home buying demographic, first-time home buyers still face many headwinds. While some of these, such as shortages in affordable inventory, are environment-driven, others can be addressed via improved awareness on the various low-down-payment solutions available in today's market," said Rohit Gupta, president and CEO of Genworth Mortgage Insurance, in a press release.
MBA: Mortgage Applications Increase Slightly in Latest Weekly Survey -- From the MBA: Mortgage Applications Slightly Increase in Latest MBA Weekly Survey: Mortgage applications increased 0.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending November 17, 2017. .. The Refinance Index decreased 5 percent from the previous week. The seasonally adjusted Purchase Index increased 5 percent from one week earlier. The unadjusted Purchase Index increased 1 percent compared with the previous week and was 4 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) increased to 4.20 percent from 4.18 percent, with points increasing to 0.42 from 0.40 (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%.
Comments on October Housing Starts -- Last Friday: Housing Starts increased to 1.290 Million Annual Rate in October The housing starts report released Friday showed starts were up 13.7% in October compared to September, however starts were down 2.9% year-over-year compared to October 2016. This first graph shows the month to month comparison between 2016 (blue) and 2017 (red).Starts were down 2.9% in October 2017 compared to October 2016 (a difficult comparison), and starts are up only 5.8% year-to-date. Note that single family starts are up 10.2% year-to-date, and the weakness (as expected) has been in multi-family starts.My guess was starts would increase around 3% to 7% in 2017. Looks about right. Below is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment). These graphs use a 12 month rolling total for NSA starts and completions.
Debt-to-income levels could be under stress, default indices show -- Defaults for second lien mortgages and other types of consumer credit in October were up compared to the previous month, according to Standard & Poor's and Experian's indices."For the first time since January 2017, the default rate for autos, bank cards and mortgages all rose together," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, in a press release."The data does not suggest any unusual financial stress facing consumers which would explain the small, but across the board increases in default rates," he said. However, "the one concerning item, which might explain the default numbers, is recent softness in real disposable personal income. If a widening spread between income and spending appears, defaults may fill the gap."The composite default index was up 3 basis points from a year ago and 2 basis points from a month ago at 0.9%, and the second mortgage default rate was up 21 basis points from last year and 26 basis points from last month at 0.79%.Also the bank card default rate was up 52 basis points from a year ago and 13 basis points from the previous month at 3.28%. The default rate for auto loans was up 3 basis points from a year ago and six basis points from September at 1.11%.The trends suggest there is pressure on the debt-to-income ratios that single-family lenders look at closely when originating first mortgages. But so far the first-mortgage default-rate is up by only a basis point on a month-to-month basis, and it is still 3 basis points lower year-over-year at 0.67%.
UMich Consumer Confidence Slides In November As Faith In Stocks Falters - Having hit the highest level since Jan 2004 in October, November's final print shows the University of Michigan Consumer Sentiment index fell from 100.7 to 98.5, as both hope and current conditions slipped. Expectations for inflation dipped. Consumers saw inflation rate in the next year at 2.5 percent after 2.4 percent the prior month. Inflation rate over next five to 10 years seen at 2.4 percent, lowest since May, after 2.5 percent in October. “Increased certainty about future income and job prospects has become a key factor that has supported discretionary purchases,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.“The data indicate that neither changes in fiscal nor monetary policies have yet had any noticeable impact on consumer expectations.”The data signal consumer spending will rise 2.7 percent in 2018, adjusted for inflation, as well as “the best runup to the holiday shopping season in a decade,” the report said. Finally we note that faith in the stock market faltered modestly...
Hotel Occupancy Rate Increase Year-over-Year, On Pace for Record Year -- From HotelNewsNow.com: STR: US hotel results for week ending 18 November - The U.S. hotel industry reported positive year-over-year results in the three key performance metrics during the week of 12-18 November 2017, according to data from STR.In comparison with the week of 13-19 November 2016, the industry recorded the following:
• Occupancy: +0.8% to 66.1%
• Average daily rate (ADR): +1.9% to US$124.65
• Revenue per available room (RevPAR): +2.6% to US$82.42
Among the Top 25 Markets, Houston, Texas, reported the largest increase in all three key performance metrics: occupancy (+27.0% to 80.3%), ADR (+11.0% to US$117.82) and RevPAR (+40.9% to US$94.60).
Miami/Hialeah, Florida, posted the second-highest increase in RevPAR (+22.5% to US$155.08), due primarily to the second-largest increase in occupancy (+11.9% to 83.4%)
Note: The hurricanes continues to drive demand in Texas and Florida, especially in Houston. The following graph shows the seasonal pattern for the hotel occupancy rate using the four week average.
Business Is Booming for America’s Survival Food King - Lee needed help, fast: FEMA was running low on food rations. In the previous four weeks, the agency had supplied millions of meals to the Texans and South Floridians displaced by hurricanes Harvey and Irma. Maria had created a third disaster zone with more complex logistics, having knocked out Puerto Rico’s electricity, gutted its roads, and destroyed its markets and ports. Restoring food security on the island could take months. Lee had to procure millions of servings of just-add-water meals to sustain the victims. Could Jackson provide at least 2 million and begin deliveries immediately? Jackson is the 42-year-old chief executive officer of Wise Co., a leading brand in survival foods, that is, Mylar pouches of freeze-dried meals such as Savory Stroganoff and Loaded Baked Potato Casserole designed to remain edible on shelves for a quarter century. Over the past several years, the prepper phenomenon—people geared for imminent disaster—has come out of the backwoods via shows like the National Geographic Channel’s Doomsday Prepper and media reports of the very rich and very worried buying and fortifying luxury bunkers. Jackson’s been positioning Wise to feed the trend. During the call, he felt a rush of conflicting emotions—not so much from the prospect of getting a fat government contract while legions of people suffer, but because the windfall could derail his business strategy. A 2-million-serving order will increase his sales for 2017 about 15 percent but stretch his supply more than he’s comfortable with; his answer to Lee was not an easy yes. Jackson has filled many emergency orders, including supplies for Ebola victims in Liberia and for people in the Philippines devastated by 2013’s earthquake.Carnival Cruise Line has stocked Wise pouches at its Caribbean ports to feed employees when storms rock the region. Just a few days before the FEMA call, the Salvation Army purchased 100,000 servings of Wise products for Florida shelters near areas affected by Hurricane Irma.
US traffic growth slows as oil prices rise: Kemp (Reuters) - Traffic volumes on U.S. highways are at record levels but the rate of growth is slowing as the earlier impetus from lower gasoline prices fades and motoring costs rise. U.S. motorists drove a seasonally adjusted 267 billion vehicle-miles in September, up from 265 billion in the same month a year earlier, according to the U.S. Bureau of Transportation Statistics. But as oil and gasoline prices increased, the growth rate declined to less than 1 percent, from a peak of 4-5 percent in 2016 - when oil hit a cyclical low under $30 per barrel (http://tmsnrt.rs/2zVspkY) (http://tmsnrt.rs/2zVdI15). Traffic volumes exhibit a lot of month-to-month volatility, depending on calendar effects, weather conditions and extreme events such as hurricanes, snowstorms and floods. The relationship between gasoline prices and driving remains controversial among economists, and estimates for the price-elasticity of gasoline demand vary significantly. In general, a fall in prices is associated with a faster increase in driving. Rising prices are linked to a slowdown in traffic growth. Traffic volumes are not very sensitive to price changes, so a large change in prices is needed to induce a relatively small increase or decrease in vehicle use. However, U.S. gasoline prices have risen almost 20 percent over the last 12 months and are 40 percent higher than in February 2016.
Vehicle Forecast: Sales Expected to Exceed 17 million SAAR Again in November - The automakers will report November vehicle sales on Friday, Dec 1st. Note: There are 25 selling days in November 2017, there were also 25 selling days in November 2016. From WardsAuto: November U.S. Forecast: Post Sales-Surge Market Will Hit 17.1 Million SAAR A WardsAuto forecast calls for U.S. automakers to deliver 1.36 million light vehicles in November. .. The report puts the seasonally adjusted annual rate of sales for the month at 17.1 million units, below last year’s 17.6 million and last month’s exceptionally high 18.0 million. Sales had been below 17 million SAAR (Seasonally Adjusted Annual Rate) for six consecutive months, until September (18.5 million SAAR) and October (18.0 million SAAR), when sales spiked due to buying following Hurricane Harvey. Sales in November were probably also a little elevated due to the hurricanes. Even with the pickup in sales in September and October, sales are still down about 2% through October compared to the same period in 2006.
Tesla’s Burning Through Nearly Half a Million Dollars Every Hour -- Elon Musk said last week that Tesla Inc. is designing a new sports car that could go from zero to 60 mph in 1.9 seconds. Not bad, but here’s a speed number that investors might want to focus on instead: Over the past 12 months, the electric-car maker has been burning money at a clip of about $8,000 a minute (or $480,000 an hour), Bloomberg data show. At this pace, the company is on track to exhaust its current cash pile on Monday, Aug. 6. (At 2:17 a.m. New York time, if you really want to be precise.) To be fair, few Tesla watchers expect the cash burn to continue at quite such a breakneck pace, and the company itself says it’s ramping up output of its all-important Model 3, which will bring money in the door. Investors don’t seem concerned. Tesla shares rose almost 3 percent to $317.81 Tuesday, giving it a market capitalization of $53 billion. Ford Motor Co. is worth $48 billion. But still, its need for fresh cash came into high relief last week when Musk unveiled his latest plan to raise funds. He’s asking customers to pay him upfront to order vehicles that may not be delivered for years. The Founders Series Roadster will cost buyers a $250,000 down payment even though it’s not coming for more than two years. Orders of those cars are capped at 1,000, meaning they alone could generate $250 million. Tesla is charging a total of $50,000 for reservations of the regular Roadster. Companies can also pre-order electric Semi trucks for $5,000, though they don’t go into production until 2019. But all this is a pittance compared with Tesla’s financial needs. It’s blowing through more than $1 billion a quarter thanks to massive investment in making the Model 3, a $35,000 car that’s looking less likely to generate a return anytime soon. “Whether they can last another 10 months or a year, he needs money, and quickly,” said Kevin Tynan, senior analyst with Bloomberg Intelligence, who estimates Tesla will be required to raise at least $2 billion in fresh capital by mid-2018.
2nd Largest Gunmaker Nears Default As Americans Buy Fewer Firearms Post-Obama --2017 has seen the biggest drop in American firearms sales in history. After 8 years of almost incessant rises in NICS Firearms Checks (a proxy for 'legal' arms sales) under President Obama... 2017 has seen a considerable drop (year-to-date) - the biggest on NICS records... This sudden drop in demand after President Trump's election has meant Remington Outdoor, the second-largest U.S. gunmaker, has suffered a “rapid” and “sharp” deterioration in sales and a similar drop in profits since January, and faces “continued softness in consumer demand for firearms,” according to credit analysts at Standard & Poor’s Global Ratings.As Philly.com's Joseph DiStefano reports, S&P cut the company’s corporate credit rating - already at a junk-bond-level CCC+ - two full notches, to CCC- as:...a backlog of unsold, unwanted firearms will force Remington to operate at a loss and “pressure the company’s sales and profitability at least through early 2018, resulting in insufficient cash flow for debt service and fixed charges,” unless Remington gives up cash to pay for ongoing operations.S&P expects “a heightened risk of a restructuring” of Remington’s $575 million senior secured loan and asset-based lending facility, which it is supposed to pay back in 2019.If Remington defaults on its payments, based on the company’s current value, S&P expects first-lien creditors may receive around 35 cents back from every dollar they have lent or invested. Lower-rated creditors would get back less, or nothing. While the report said that default is not yet "a virtual certainty," judging by the collapse in Remington's bond prices this week... the market is pretty sure.
Headline Durable Goods Orders Down 1.2% in October - The Advance Report on Manufacturers’ Shipments, Inventories, and Orders released today gives us a first look at the latest durable goods numbers. Here is the Bureau's summary on new orders:New orders for manufactured durable goods in October decreased $2.8 billion or 1.2 percent to $236.0 billion, the U.S. Census Bureau announced today. This decrease, down following two consecutive monthly increases, followed a 2.2 percent September increase. Excluding transportation, new orders increased 0.4 percent. Excluding defense, new orders decreased 0.8 percent. Transportation equipment, also down following two consecutive monthly increases, drove the decrease, $3.5 billion or 4.3 percent to $77.1 billion. Download full PDFThe latest new orders number at -1.2% month-over-month (MoM) was worse than the Investing.com consensus of 0.3%. The series is up 1.0% year-over-year (YoY). If we exclude transportation, "core" durable goods came in at 0.4% MoM, which was slightly worse than the Investing.com consensus of 0.5%. The core measure is up 7.4% YoY.If we exclude both transportation and defense for an even more fundamental "core", the latest number is up 1.2% MoM and up 8.5% YoY.Core Capital Goods New Orders (nondefense capital goods used in the production of goods or services, excluding aircraft) is an important gauge of business spending, often referred to as Core Capex. It is down 0.5% MoM and up 8.1% YoY. For a look at the big picture and an understanding of the relative size of the major components, here is an area chart of Durable Goods New Orders minus Transportation and Defense with those two components stacked on top. We've also included a dotted line to show the relative size of Core Capex. The next chart shows year-over-year percent change in Durable Goods. We've highlighted the value at recession starts and the latest value for this metric.
US PMIs Tumble To 4-Month Lows, Signal Just 2% GDP Growth -- After reassuringly positive Eurozone PMIs, US Manufacturing and Services disappointed with the composite PMI slumping to 5-month lows in November.
- Flash U.S. Composite Output Index at 54.6 (55.2 in October). 4-month low.
- Flash U.S. Services Business Activity Index at 54.7 (55.3 in October). 4-month low.
- Flash U.S. Manufacturing PMI at 53.8 (54.6 in October). 2-month low.
- Flash U.S. Manufacturing Output Index at 54.3 (54.6 in October). 2-month low.
Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:“US businesses reported another month of solid growth in November, putting the economy on course for a reasonable, though by no means stellar, fourth quarter.Current PMI readings are broadly consistent with GDP growing at an annualised rate of just over 2%. “There was also good news on hiring, with a slight uptick in employment growth meaning the surveys are indicating non-farm payroll growth of just over 200,000 in November.“Both input costs and selling price inflation picked up, suggesting the upturn is feeding though to higher price pressures, though some of the manufacturing price hikes were attributable to the short-term effects of the hurricane-related supply chain disruptions.“An upturn in new order inflows means we can expect a strong end to the year, though prospects for 2018 remain more mixed. Although expectations about the year ahead slipped lower in the service sector, future optimism hit a two-year high in manufacturing, suggesting the goods-producing sector may start to make a stronger contribution to the economy in coming months.”There’s a better chance that WTI prices will drop to the low $40s than they rise to the low $60s, Horwitz said. “I would think that the rigs will be back in the fields and the shale producers will be pumping it out like crazy at these levels,” Horwitz said. On Wednesday, Baker Hughes said that the number of oil and gas rigs in the United Statesrose again this week.
Weekly Initial Unemployment Claims decrease to 239,000 --The DOL reported:In the week ending November 18, the advance figure for seasonally adjusted initial claims was 239,000, a decrease of 13,000 from the previous week's revised level. The previous week's level was revised up by 3,000 from 249,000 to 252,000. The 4-week moving average was 239,750, an increase of 1,250 from the previous week's revised average. The previous week's average was revised up by 750 from 237,750 to 238,500. Claims taking procedures continue to be disrupted in the Virgin Islands. The ability to take claims has improved in Puerto Rico. The previous week was revised up. The following graph shows the 4-week moving average of weekly claims since 1971.
Philly Fed: State Coincident Indexes increased in 41 states in October -- From the Philly Fed: The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for October 2017. Over the past three months, the indexes increased in 40 states, decreased in nine, and remained stable in one, for a three-month diffusion index of 62. In the past month, the indexes increased in 41 states, decreased in seven, and remained stable in two, for a one-month diffusion index of 68. Note: These are coincident indexes constructed from state employment data. An explanation from the Philly Fed: The coincident indexes combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing by production workers, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.
A Great Migration From Puerto Rico Is Set to Transform Orlando - Ten intolerable days after Hurricane Maria trounced Puerto Rico, Sahria Garcia finally got a call from her brother on the island. The call lasted three minutes and the news shook her: Her family had lost everything — jobs, houses, possessions, cars — and had spent days foraging for food, ice and water.Ms. Garcia, who lives in a small Orlando apartment with her three children, did not hesitate: “Don’t even ask,” Ms. Garcia said she told her brother during their conversation. “This is your house.” Last week, they arrived — two brothers, their wives and their four children — and plopped onto newly bought bunk beds. The family is one small part of a sudden exodus of tens of thousands of Puerto Ricans racing to Florida after Hurricane Maria, a migration so large it rivals those from New Orleans to Houston after Hurricane Katrina and from Cuba to Miami during the Mariel boatlift.The scale is larger than any previous movement of Puerto Ricans to the mainland, including the wave that arrived after World War II, said Jorge Duany, the director of the Cuban Research Institute at Florida International University and an expert on Puerto Rican migration. “It’s a stampede.”More than 168,000 people have flown or sailed out of Puerto Rico to Florida since the hurricane, landing at airports in Orlando, Miami and Tampa, and the port in Fort Lauderdale. Nearly half are arriving in Orlando, where they are tapping their networks of family and friends. An additional 100,000 are booked on flights to Orlando through Dec. 31, county officials said. Large numbers are also settling in the Tampa, Fort Lauderdale and West Palm Beach areas.With so many arriving so abruptly, the migration is expected to transform Orlando, a city that has already become a stronghold of Puerto Ricans, many of them fleeing the island’s economic crisis in recent years. The Puerto Rican population of Florida has exploded from 479,000 in 2000 to well over one million today, according to the Pew Research Center. The number of Puerto Ricans in Orlando was 210,000 in 2014, according to the Center for Population Studies, and since then the count has risen rapidly as more arrived during the economic crisis. The impact of this latest wave is likely to stretch from schools and housing to the work force and even politics. Puerto Ricans, who are American citizens and tilt Democratic, could sway the electoral results of one of the country’s most pivotal swing states.
Study: 26% of Hurricane Harvey Reconstruction Workers Said They Experienced Wage Theft or No Pay -- At a Tuesday press call organized by day laborer rights organizations, a new report focusing on issues of wage theft and workplace safety in the recovery process post-Hurricane Harvey in Houston, Texas, concluded that 26 percent of workers have either had their pay stolen or have not been paid for their work.“After the Storm: Houston’s Day Labor Markets in the Aftermath of Hurricane Harvey” also stated that “nearly two-thirds (64%) of the day laborers who identified themselves as being undocumented immigrants indicated that they do not feel safe asking for help from government officials” and that “more than one-third (34%) of workers reported having been injured while employed as a day laborer in Houston.”“While day laborers perform the difficult and often dangerous work of demolition, clean up, and debris removal and rebuilding, their efforts and the hazards they face are rarely acknowledged. This report documents the employment and working conditions of day laborers in the weeks following hurricane Harvey and it reveals many troubling aspects of the recovery work in Houston,” said the study’s author, Professor Nik Theodore of the University of Illinois at Chicago’s Department of Urban Planning and Policy. According to Theodore’s study, the “total amount of unpaid wages across this workforce in this short period exceeded $20,000″ for the 26% of workers who said they experienced wage theft. Other findings from the study included:
- “A major obstacle to the reduction of wage theft and the effective recovery of unpaid wages is that day laborers do not know where to report violations.”
- “Nearly two-thirds (64%) of the day laborers who identified themselves as being undocumented immigrants indicated that they do not feel safe asking for help from government officials.”
- “Second responders are not receiving the training they need to protect themselves from hazards during post-disaster recovery. Eighty five percent of day laborers who have worked in hurricane affected areas report that they have not received any training for the worksites they are entering.”
- “More than one-third (34%) of workers reported having been injured while employed as a day laborer in Houston.”
Here is the full study:
Thanksgiving help for the homeless: ‘We haven’t seen numbers like this since the Great Depression’ - LA Times: Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year. The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs.Scheduled volunteer servers include gubernatorial candidate and former Los Angeles Mayor Antonio Villaraigosa, entertainer Dick Van Dyke and actress Nicolette Sheridan. The Midnight Mission is seeking donations of $5 to $10 to help it cover the costs of the meals. Donations can be made by texting “Meals” to 71777, Berkovich said. The mission serves meals seven days a week, distributes hygiene kits after its meal service and conducts drives for food and clothing to distribute to its guests. Article continues belowBerkovich said the group has been serving nearly 1 million meals a year each year since 2013. “We haven't seen numbers like this since the Great Depression,” she said. The nearby Fred Jordan Mission expects to serve more than a ton of turkey drumsticks, along with 500 pounds of mashed potatoes, 80 gallons of gravy, hundreds of pounds of traditional cornbread stuffing, 560 pounds of candied yams, 585 pounds of green beans, glazed carrots, spiced peaches, cranberry sauce and 400 pumpkin pies, according to the mission's Suzanna Choi.
As America Gave Thanks, Homelessness Set New Records In Major Cities All Over The Nation -- If the U.S. economy was actually in good shape, we would expect that the number of people that are homeless would be going down or at least stabilizing. Instead, we have a growing national crisis on our hands. In fact, within the past two years “at least 10 cities or municipal regions in California, Oregon and Washington” have declared a state of emergency because the number of homeless is growing so rapidly. Things are particularly bad in southern California, and this year the Midnight Mission will literally be feeding a small army of people that have nowhere to sleep at night…Thanksgiving meals will be served to thousands of homeless and near-homeless individuals today on Skid Row and in Pasadena and Canoga Park amid calls for donations and volunteers for the rest of the year.The Midnight Mission will serve Thanksgiving brunch to nearly 2,500 homeless and near-homeless men, women and children, according to Georgia Berkovich, its director of public affairs. Overall, the Midnight Mission serves more than a million meals a year, and Berkovich says that homelessness hasn’t been this bad in southern California “since the Great Depression”… And of course the official numbers confirm what Berkovich is claiming. According to an article published earlier this year, the number of homeless people living in Los Angeles County has never been higher… The number of homeless people in Los Angeles has jumped to a new record, as city officials grapple with a humanitarian crisis of proportions remarkable for a modern American metropolis.Municipal leaders said that a recent count over several nights found 55,188 homeless people living in a survey region comprising most of Los Angeles County, up more than 25% from last year. We see the same thing happening when we look at the east coast. Just check out these numbers from New York City… In recent years the number of homeless people has grown. Whereas rents increased by 18% between 2005 and 2015, incomes rose by 5%. When Rudy Giuliani entered City Hall in 1994, 24,000 people lived in shelters. About 31,000 lived in them when Mike Bloomberg became mayor in 2002. When Bill de Blasio entered City Hall in 2014, 51,500 did. The number of homeless people now in shelters is around 63,000.For New York, this is the highest that the homeless population has been since the Great Depression, and city leaders are trying to come up with a solution. Meanwhile, things are so bad in Seattle that “400 unauthorized tent camps” have popped up…
Feds: Philly officer sold drugs stolen by corrupt Baltimore police squad - Federal agents arrested a Philadelphia police officer Tuesday, accusing him of conspiring with officers in Baltimore to sell cocaine and heroin seized from that city’s streets. Prosecutors say that Eric Troy Snell, 33, earned thousands of dollars serving as a conduit between corrupt members of a Baltimore police task force who stole the drugs and his brother, who sold them in Philadelphia.Investigators also have accused Snell of threatening the children of a Baltimore officer who pleaded guilty in the case. His arrest is the latest in a widening police corruption scandal that has rocked Maryland’s largest city, resulting in the arrests of eight members of an elite gun task force there who prosecutors have accused of robbing and extorting drug dealers for years. The squad had been deployed to crack down on the proliferation of illegal guns in that city. But prosecutors now say that Rayam and several cohorts, including two commanding sergeants, used their positions to rob drug dealers and pocket hundreds of thousands of dollars uncovered while searching homes and cars of suspected criminals.
Pseudoscience in the Witness Box: The FBI faked an entire field of forensic science. - The Washington Post published a story so horrifying this weekend that it would stop your breath: “The Justice Department and FBI have formally acknowledged that nearly every examiner in an elite FBI forensic unit gave flawed testimony in almost all trials in which they offered evidence against criminal defendants over more than a two-decade period before 2000.” What went wrong? The Post continues: “Of 28 examiners with the FBI Laboratory’s microscopic hair comparison unit, 26 overstated forensic matches in ways that favored prosecutors in more than 95 percent of the 268 trials reviewed so far.” The shameful, horrifying errors were uncovered in a massive, three-year review by the National Association of Criminal Defense Lawyers and the Innocence Project. Following revelations published in recent years, the two groups are helping the government with the country’s largest ever post-conviction review of questioned forensic evidence. Chillingly, as the Post continues, “the cases include those of 32 defendants sentenced to death.” Of these defendants, 14 have already been executed or died in prison. The massive review raises questions about the veracity of not just expert hair testimony, but also the bite-mark and other forensic testimony offered as objective, scientific evidence to jurors who, not unreasonably, believed that scientists in white coats knew what they were talking about. As Peter Neufeld, co-founder of the Innocence Project, put it, “The FBI’s three-decade use of microscopic hair analysis to incriminate defendants was a complete disaster.” This study was launched after the Post reported that flawed forensic hair matches might have led to possibly hundreds of wrongful convictions for rape, murder, and other violent crimes, dating back at least to the 1970s. There were no scientifically accepted standards for forensic testing, yet FBI experts routinely and almost unvaryingly testified, according to the Post, “to the near-certainty of ‘matches’ of crime-scene hairs to defendants, backing their claims by citing incomplete or misleading statistics drawn from their case work.” It was later revealed that one of the hairs presented at trial came from a dog.
Walking While Black - A ProPublica/Florida Times-Union analysis of five years of pedestrian tickets shows that the pedestrian tickets — typically costing $65, but carrying the power to damage one’s credit or suspend a driver’s license if unpaid — were disproportionately issued to blacks, almost all of them in the city’s poorest neighborhoods. In the last five years, blacks received 55 percent of all pedestrian tickets in Jacksonville, while only accounting for 29 percent of the population. Blacks account for a higher percentage of tickets in Duval County than any other large county in Florida. Blacks, then, were nearly three times as likely as whites to be ticketed for a pedestrian violation. Residents of the city’s three poorest zip codes were about six times as likely to receive a pedestrian citation as those living in the city’s other, more affluent 34 zip codes. Tickets for some of the less familiar statutes were issued even more disproportionately to blacks. Seventy-eight percent of all tickets written for “walking in the roadway where sidewalks are provided” were issued to blacks. As well, blacks accounted for 68 percent of all recipients of tickets issued for “failing to cross the road at a right angle or shortest route.”
The Decimated Public Schools in Wisconsin - In the six years since Wisconsin Gov. Scott Walker signed the union-busting Act 10, which curtailed collective bargaining rights for public employees, the state’s labor movement has been decimated. Wisconsin was once a leader in organized labor, but its share of workers belonging to unions plummeted from 14.2 percent in 2010 to 8.1 percent in 2016. . Now a new study highlights the unintended consequences of Act 10, which has proven catastrophic for Wisconsin’s public schools.As I explained in the March/April issue of Mother Jones, Wisconsin’s attack on public sector unions has created a shortage of public school teachers, as teachers retire and look for jobs in other states and fewer young people embark on careers in education: The school of education at the University of Wisconsin-Madison never used to have trouble attracting applicants with dreams of becoming teachers. Its graduate program is ranked fourth in the country by U.S. News & World Report, and until recently, its undergraduate program in elementary education typically received between 300 and 400 applications for its 125 spots. Now, says Michael Apple, a professor in the program, it only gets about one applicant per opening. A new study from the left-leaning Center for American Progress (CAP) offers a new set of numbers to quantify the effects of Act 10 on public education in Wisconsin. Median compensation—salary and benefits—was $10,843 lower in the 2015-2016 school year than before Act 10, a 12.6 percent reduction. The teachers who are still working in the state are far less experienced than before Act 10. According to the report, 24.1 percent of teachers have been working for fewer than five years, a spike from 19.6 percent of teachers prior to Act 10. And those remaining teachers are shifting around within the state at a higher rate, switching school districts rather than building up local connections. The CAP study refers to other research which has concluded that most of the turnover has been people voluntarily moving on, rather than people getting fired.
What Happens When You Bust a Teachers’ Union? Nothing Good! - According to a report cited by CNN, since Act 10 was passed in Wisconsin in 2011, the educational environment has taken a turn for the worse. Now, the Supreme Court could put something similar in place for all public sector unions around the country, as it has agreed to hear the case of Janus vs. AFSCME. The CNN article cites a report from the Center for American Progress Action Fund which used information gathered from the Wisconsin Department of Public Instruction (DPI) to analyze the impact of the law known as Act 10, which virtually gutted the collective bargaining rights of public school teachers and significantly weakened the power of the teachers’ union. The findings of the Center’s research include:
- Median teacher compensation has decreased by 8.2 percent.
- Median teacher benefits have decreased by more than 18 percent.
- Teachers leaving the profession spiked immediately after Act 10 was passed and has since settled at an average of more than eight percent per year, more than two percent higher than the average before the law was passed.
- The number of inexperienced teachers (under five years) has increased to almost 25 percent of the educators in the state. This is particularly true in rural districts, where young teachers get their start and then jump to urban districts for higher pay a few years later.
An article by Mother Jones covering the same study cites a conversation with a professor at the University of Wisconsin teaching certification program, ranked by US News and World Report as one of the best in the country. This professor said that prior to Act 10, they would receive 300-400 applicants for their 125 openings, annually. Now they get one applicant per opening. There is some indication that academic achievement has felt a negative impact from these results, but that has been difficult to track. The standardized tests used to measure student achievement have changed several times since Act 10 was passed. The CNN article cites more conservative thinkers who suggest that graduation rates and the number of students taking AP tests (both of which have increased) would be a better guide. Of course, the number of students taking the tests does not indicate if those students are doing well on them, so that argument seems weak. In logic model terms, they are proposing an output, not an outcome, as the measure of success.
Response to school massacres? A booming classroom security industry -- When 16 primary school children were massacred in Dunblane in 1996, the United Kingdom responded by tightening already strict gun laws to ban civilian ownership of handguns. The United States has responded to nearly 20 years of high-profile school shootings with a booming school security industry. To protect children from potential attackers, companies have offered everything from hi-tech locks for classroom doors to bulletproof whiteboards and backpacks. Some American schools have even staged fake mass shootings, complete with replica guns, to help their students practice how to respond to an attack. The federal government has spent hundreds of millions of taxpayers’ dollars to put police officers in schools, including $45m in the year after the 2012 Sandy Hook elementary school shooting alone. The market for security equipment in the education sector was estimated at $2.68bn in 2017, according to industry analysts at IHS Markit. But school safety experts say that American schools’ preparation for the next school shooting has sometimes backfired, resulting in policy choices that make children less safe. The National Association of School Psychologists cautions American schools against preparing for shootings with simulated attacks that could end up traumatizing young students or even the school’s staff.
Tech billionaires sank $170 million into a new kind of school — now classrooms are shrinking and some parents say their kids are 'guinea pigs' - It says it in the name: AltSchool. And it set out to be a different kind of school. Max Ventilla, a Google executive who left the search giant to launch AltSchool in 2013, wooed parents with his vision to bring traditional models of elementary education into the digital age. AltSchool has raised $175 million from Mark Zuckerberg, Peter Thiel's Founders Fund, and others, and the startup is closing a Series C round of funding. But now some parents are bailing out of the school because they say AltSchool put its ambitions as a tech company above its responsibility to teach their children. The startup, which launched in 2013, develops educational software and runs a network of small schools with four locations, in California and New York; two others closed their doors in the past year, and three more will close in the spring of 2018. These schools serve as testing grounds for an in-house team of technologists to work on tools for the modern classroom. AltSchool enrolls between 30 and 100 students at each campus. "We kind of came to the conclusion that, really, AltSchool as a school was kind of a front for what Max really wants to do, which is develop software that he's selling," a parent of a former AltSchool student told Business Insider. The criticism comes after an announcement that AltSchool would shutter locations in Manhattan's East Village and Palo Alto, California, at the end of the school year. Ventilla told Bloomberg the company was scaling back its "lab schools" to focus on software development, a more profitable business. AltSchool started licensing its technology to four private schools in August and has plans to reach schools nationwide in the next three to five years. Some parents say that AltSchool, which charges $27,000 for tuition, uses students as "guinea pigs" for testing new modes of teaching and offers screen time instead of human instruction. In rare cases, parents said their children's learning disabilities went undiagnosed because their work, which was sometimes done on tablets and computers, wasn't monitored. The startup's response, parents said, was to hire a specialist who provided pay-by-the-hour tutoring.
Republicans want to give rich people a tax cut on private school tuition - The GOP tax reform bill passed the House on Thursday and eyes are shifting to the Senate version next. Both versions include a similar break seemingly aimed at wealthy families: the ability to withdraw from 529 plans to fund K-12 education. 529 plans sound technical, but they're basically just an investment account that allows college savings to grow tax-free, similarly to saving for retirement in an IRA. Current tax law permits families to withdraw their savings only for tuition and expenses related to college or graduate school.The proposed GOP bills allow families to withdraw expenses up to $10,000 a year to pay for private elementary and high schools. That's a big change, and one that could yield significant benefits to wealthy families. A New York Times analysis estimated the savings could be more than $30,000 per 529 account.The Times takes the example of a family who opens a 529 plan with $200,000. It assumes that the money in the plan grows at 6% annually, and the family takes out the maximum allotted $10,000 each year. In that case, the family would avoid $2,380 in taxes per year. Multiply that savings over the 13 years of private school a child could attend from kindergarten to 12th grade, and the family would ultimately earn a tax break of $30,940.The move can be seen as a benefit primarily to the rich, since the tax benefits of 529 plans go almost entirely to affluent families, according to the Brookings Institute. The new plan also benefits families who can maximize their capital gains tax break by withdrawing $10,000 a year to pay for private school starting in kindergarten, instead of waiting for their wealth to build in the account over time. Essentially, the people who would see the largest tax breaks over time are those who have another $10,000 to withdraw every year.Some school choice advocates, like the conservative Heritage Foundation, praised the proposal, arguing that it would allow families to have more access to schools, according to Education Week. But other proponents of school choice struck out at the proposal, arguing that school choice should benefit those families who need options most. "If we are going to use scarce resources to advance school choice, we should do it for poor and working class kids, not for families who can already afford private school tuition," Mike Petrilli, President of the Thomas B. Fordham Institute, told the Washington Post.
House Republicans plan to eliminate the $250 tax deduction for teachers --Every year, Brooke Richardson, who teaches English as a second language to mostly low-income Hispanic students in Atlanta, turns to her own pocketbook to help her students. She has lost track of how many pencils, markers, notebooks and glue sticks she buys a year.Then there are the marshmallows and cotton balls for hands-on projects. And then there are the extra books so they have something to read on the weekend and during holiday breaks, and peanut butter and jelly so kids who don't have enough to eat have at least some food at Christmas. Every year she also has had to replace headphones or other classroom technology because something always malfunctions, and there's rarely enough money in the budget to fix it. She prides herself as a master discount shopper, but so many little purchases add up.All in, Richardson estimates she spent $500 of her own money on her students last year. She says it's worth it — her voice lights up talking about “her kids” and all their “aha moments,” many of which come when she deviates from the textbook.But what has also been helpful is that she's able to deduct $250 off her taxable income for the extras she buys for her classroom, a small help that Congress created in 2002 for teachers who “go above and beyond.”Now, the educator expense deduction has become a sticking point in the GOP tax debate, with the House and Senate taking it in two wildly different directions. The House GOP tax bill would scrap that educator deduction entirely. The Senate GOP tax plan would double it to $500.
DOJ Launches Probe Into Harvard's Affirmative Action Admissions -- The Department of Justice is taking its first tentative steps toward dismantling the 40-year-old system of affirmative action that governs admissions at US colleges and universities by opening an investigation into the admissions practices of America’s oldest and most venerated institution of higher education: Harvard. According to the Wall Street Journal, the DOJ’s investigation into the use of race in its admissions process was inspired by a federal civil lawsuit filed in 2014 that alleged the university discriminates against Asian-Americans. The Department of Education dismissed the group’s allegations back in 2015. The lawsuit was brought by Edward Blum, a conservative lawyer who has focused on eliminating affirmative action. Blum, who successfully sheparded a case alleging the University of Texas discriminated against a white student all the way to the Supreme Court last year, laid out his arguments in a Washington Post op-ed published back in August, where he pointed out that the DOJ was already investigating incidences of discrimination against Asian Americans. It is unfortunate that the Supreme Court has allowed universities to grant preferences to applicants based on race and ethnicity. Last year in Fisher v. University of Texas — in which Students for Fair Admissions provided counsel to the plaintiff — the Supreme Court allowed the University of Texas at Austin to continue the practice. Nonetheless, in Fisher and earlier cases, the court has been clear about the how these racial preferences must be implemented: Purposeful quotas and racial balancing are strictly prohibited. And, of course, diversity can never be a justification for invidious discrimination.
The Republican War on College -- To pay for a permanent tax cut on corporations, the Republican tax-reform plan raises taxes on colleges and college students, which is part of a broader Republican war on higher education in the U.S. This is a big deal, because in the last half-century, the most important long-term driver of wage growth has arguably been college. The House bill would reduce benefits for higher education by more than $60 billion in the coming decade. It would shock graduate students with sudden tax increases, punish student debtors, and force schools to raise tuition at a time when higher education already feels unaffordable for many students. On balance, the GOP plan would encourage large corporations to invest in new machines in the workplace, while discouraging American workers from investing in themselves. The most dramatic attack on higher education in the GOP House bill is its tax on tuition waivers. This may sound arcane to non–graduate students, but it’s a huge deal. Nearly 150,000 graduate students, many of whom represent the future of scientific and academic research, don’t pay tuition in exchange for teaching classes or doing other work at university. The GOP tax plan would treat their unpaid tuition as income. So imagine you are a graduate student earning $30,000 from your school for teaching, while attending a $50,000 program. Under current law, your taxable income is $30,000. Under the GOP tax plan, your taxable income is $80,000. Your tax bill could quadruple. “It’s a huge tax increase on income-constrained students, and the worst part of it is that it would come as a shock to thousands of grad students who aren’t expecting it,” But that’s just the start. In fact, modern GOP economic policy amounts to a massive, coordinated, multilevel attack on higher education in the U.S. It starts with the elite colleges. The House bill would apply an excise tax to private universities with endowments worth more than $250,000 per full-time student. The measure is expected to raise about $2.5 billion from approximately 70 topflight universities.
Tax bill that passed the House would cripple training of scientists - Yesterday, the US House of Representatives passed its version of a tax bill that would drop corporate tax rates and alter various deductions. While most of the arguments about the bill have focused on which tax brackets will end up paying more, an entire class of individuals appears to have been specifically targeted with a measure that could raise their tax liability by 300 percent or more: graduate student researchers. If maintained, the changes could be crippling for research in the US. Despite typically taking five to six years to complete, a PhD student is only likely to earn in the area of $44,000 after graduation if they're funded by the National Institutes of Health. Even four years of additional experience doesn't raise the salary above $50,000. As such, charging them tuition would leave them with no way to possibly pay back their student loans. Doing so would almost certainly discourage anyone but the independently wealthy from attending research-focused graduate programs. Instead, research institutions have typically operated a system where graduate students have taught classes and performed research in return for having their tuition waived. (Many universities have a more general deal where their employees and their families have tuition waived, as well.) In addition, the university will typically arrange for funding to pay the student a stipend for housing and food—effectively a salary. This system is enabled in part by a specific section of the US tax code, Section 117(d). That defines tuition reductions for university employees as non-income, and therefore non-taxable. The house bill would eliminate this section entirely. As a result, the cost of graduate tuition, which is often set by lucrative fields like law and medicine, will count as income if it's waived. As a result, graduate students would be taxed as if they earned their stipend plus the full cost of their tuition, even though they only saw a fraction of that money. In other words, a grad student living on a $25,000-a-year stipend could suddenly find themselves liable for taxes on a $75,000 income or more. Many grad students are foreign, which could add additional complications.
The Future of Colleges & Universities… And the Present - This article looks at the future of colleges and universities:There are over 4,000 colleges and universities in the United States, but Harvard Business School professor Clayton Christensen says that half are bound for bankruptcy in the next few decades.Christensen is known for coining the theory of disruptive innovation in his 1997 book, “The Innovator’s Dilemma.” Since then, he has applied his theory of disruption to a wide range of industries, including education.In his recent book, “The Innovative University,” Christensen and co-author Henry Eyring analyze the future of traditional universities, and conclude that online education will become a more cost-effective way for students to receive an education, effectively undermining the business models of traditional institutions and running them out of business. I think a bigger problem – and it isn’t limited just to the US – is that a lot of schools are putting out a large number of students with unmarketable degrees and useless “skills.” For instance, Newsweek had an article entitled Men with muscles and money are more attractve to straight women and gay men – showing gender roles aren’t progressing. It links to this study published in Feminist Media Studies by a couple of, ahem, researchers at two British universities: Coventry and Aberystwyth. Here’s the abstract:In this paper, we analyze the website TubeCrush, where people post and share unsolicited photographs of “guy candy” seen on the London Underground. We use TubeCrush as a case study to develop Berlant’s intimate publics as a lens for examining post-feminist sensibility and masculinity in the liminal space between home/work. The paper responds to notions of reverse sexism and post-sexism used to make sense of women’s apparent objectification of men in the digital space, by asking instead where the value of such images lies. We suggest that in TubeCrush, value is directed onto the bodies of particular men, creating a visual economy of post-feminist masculinity of whiteness, physical strength, and economic wealth. This celebration of masculine capital is achieved through humor and the knowing wink, but the outcome is a reaffirmation of urban hegemonic masculinity. Given the direction of the paper, I’d guess that the field collectively has close to a one in five chance of stumbling onto the theory of evolution over the next few decades.
The “phantom reference:” How a made-up article got almost 400 citations - Here’s a mystery: How did a nonexistent paper rack up hundreds of citations?Pieter Kroonenberg, an emeritus professor of statistics at Leiden University in The Netherlands, was puzzled when he tried to locate a paper about academic writing and discovered the article didn’t exist. In fact, the journal—Journal of Science Communications—also didn’t exist.Perhaps Kroonenberg’s most bizarre discovery was that this made-up paper, “The art of writing a scientific article,” had somehow been cited almost 400 times, according to Clarivate Analytics’ Web of Science.Anne-Wil Harzing, a professor of International Management at at Middlesex University in London, who recounted Kroonenberg’s discovery in her blog, wrote: To cut a long story short, the article appeared to be completely made up and did not in fact exist. It was a “phantom reference” that had been created merely to illustrate Elsevier’s desired reference format. Here’s the reference from Elsevier’s reference style section, part of its author guidelines (we’ve seen examples that cite the paper as from 2000 as well):Van der Geer, J., Hanraads, J.A.J., Lupton, R.A., 2010. The art of writing a scientific article. J Sci. Commun. 163 (2) 51-59. Puzzled, Harzing set out to understand how so many authors could cite this paper.
A Look At Which Students Are Most Likely To Default On Their Student Debt -- Since the early 2000's the amount of student debt outstanding has grown exponentially, along with annual tuitions, and now stands at nearly $1.5 trillion. Moreover, and not terribly surprisingly, defaults on that growing mountain of student debt have also surged as graduating students quickly discover that they just dropped $200,000 on a near-zero ROIC investment. But while a lot of attention is given to the growing default rates on this particular future economic disaster in the making, less time is spent trying to understand which students are most susceptible to default. That said, the following series of charts from the Federal Reserve Bank of New York help to shed some light on that particular topic. To our complete 'shock', students attending the nation's predatory for-profit colleges, with their aggressive lending programs, are almost twice as likely to default on their student loans than those attending non-profit schools. Student indebtedness has grown substantially, increasing by 170 percent between 2006 and 2016. In addition, the fraction of students who default on those loans has grown considerably. Of students who left college in 2010 and 2011, 28 percent defaulted on their student loans within five years, compared with 19 percent of those who left school in 2005 and 2006. Since defaulting on student loans can have serious consequences for credit scores and, by extension, the ability to purchase a home and take out other loans, it’s critical to understand how college and family characteristics correspond to default rates. Interestingly, though the difference in default rates between two- and four-year private college students is not large (less than 5 percentage points at age thirty-three), this is not the case for public college students. Default rates for community college (two-year public college) students are nearly 25 percentage points higher than those for their counterparts in four-year public colleges. The chart below also shows that while for-profit students have the highest default rates, the default rates of community college students are not too different from those of for-profit students (36 percent versus 42 percent for two-year and 39 percent for four-year for-profit students, respectively, at age thirty?three).
Philadelphia Fed Study Debunks Main Argument for Student Debt Slavery - Yves Smith - As most readers know, the 2005 bankruptcy law reform included provisions that made it virtually impossible to discharge student debt in bankruptcy. Yet borrowers who miss payments wind up paying penalty interest rates, with the result that they will carry their student debt with them to the grave. But why do student borrowers get such harsh treatment? The justification for the bankruptcy law change was that student borrowers were prone to abusing the bankruptcy code even though they had the ability to make good on their loans. I’ve never bought the “strategic default” meme, which is almost entirely creditor urban legend to justify squeezing more blood from the stone of broke borrowers. Bankruptcy is a painful process that leaves your credit record damaged for years. And why should anyone think that student loans were more prone to abuse? If someone declared a Chapter 7 bankruptcy pre-2005, the court would take all the assets it could lay its hands on, allocate the proceeds among the various debts, and wipe out the rest. It’s not as if student loans were treated worse than any other non-collateralized loans. Nevertheless, the argument was that student borrowers were defaulting opportunistically. If true, that higher default level would lead lenders to charge higher interest rates to cover for the cost of abusive defaults. In a new Philadelphia Fed working paper, Rajeev Darolia and Dubravka Ritter constructed a database of private student loan (PSL) borrowers to see if their behavior changed as a result of the bankruptcy law reforms. We’ve embedded their article at the end of the post. Their conclusion: Our findings contribute to this debate by providing evidence on bankruptcy filing and default behavior using a unique sample of anonymized credit bureau records. Although the 2005 bankruptcy reform reduced rates of Chapter 7 bankruptcy overall, the provisions making PSL debt nondischargeable do not appear to have reduced the bankruptcy filing or default behavior of PSL borrowers relative to other types of student loan borrowers at meaningful levels. Therefore, our analysis does not reveal debtor responses to the 2005 bankruptcy reform that would indicate widespread opportunistic behavior by PSL borrowers before the policy change. Philadelphia Fed Student Loan Paper.
When Unpaid Student Loan Bills Mean You Can No Longer Work - NYT - Fall behind on your student loan payments, lose your job. Few people realize that the loans they take out to pay for their education could eventually derail their careers. But in 19 states, government agencies can seize state-issued professional licenses from residents who default on their educational debts. Another state, South Dakota, suspends driver’s licenses, making it nearly impossible for people to get to work. As debt levels rise, creditors are taking increasingly tough actions to chase people who fall behind on student loans. Going after professional licenses stands out as especially punitive. Firefighters, nurses, teachers, lawyers, massage therapists, barbers, psychologists and real estate brokers have all had their credentials suspended or revoked. Determining the number of people who have lost their licenses is impossible because many state agencies and licensing boards don’t track the information. Public records requests by The New York Times identified at least 8,700 cases in which licenses were taken away or put at risk of suspension in recent years, although that tally almost certainly understates the true number. With student debt levels soaring — the loans are now the largest source of household debt outside of mortgages — so are defaults. Lenders have always pursued delinquent borrowers: by filing lawsuits, garnishing their wages, putting liens on their property and seizing tax refunds. Blocking licenses is a more aggressive weapon, and states are using it on behalf of themselves and the federal government.Proponents of the little-known state licensing laws say they are in taxpayers’ interest. Many student loans are backed by guarantees by the state or federal government, which foot the bills if borrowers default. Faced with losing their licenses, the reasoning goes, debtors will find the money.But critics from both parties say the laws shove some borrowers off a financial cliff.Tennessee is one of the most aggressive states at revoking licenses, the records show. From 2012 to 2017, officials reported more than 5,400 people to professional licensing agencies. Many — nobody knows how many — lost their licenses. Some, like Ms. Otto, lost their careers.
States Face Children’s Health Coverage Uncertainty - About two months after federal funding lapsed for the Children’s Health Insurance Program, state officials still don’t know exactly when they’ll run out of money or when Congress will renew funding — leaving families that depend on the program increasingly anxious about their benefits. At least a few states say that they could exhaust funds as soon as next month. States are growing more concerned about the program with just a few days left on the congressional calendar until December and no signs that lawmakers plan in the immediate future to renew funding. Changes in enrollment and unpredictable circumstances such as the recent hurricanes make it difficult to know exactly how quickly states’ funds will run dry. The lack of action in Congress could lead to unpleasant holiday season letters for families. Colorado plans to send informational notices about the potential end of the program starting the week of Nov. 27. These letters will tell families that the program may end at the end of January if Congress does not act. That would be followed by coverage termination notices at the end of the year confirming that coverage could end, said Rachel A. Reiter, external relations division director for the Colorado Department of Health Care Policy and Financing. Even if Congress acts in early December, states will face a time crunch.
Millennials Have Ushered In The 'Baby Bust' Cycle - Negative Population Growth, Inc., has issued a November report warning that America is no longer making enough babies to keep pace with deaths. The report blames, the‘baby bust’ phase on the millennial generation (1980-2000), who are having children at record low rates. Their attitudes towards marriage, procreation, and materialism changed dramatically after the Great Recession when the economies of the world came to a screeching halt. After a decade of excessive monetary policy from the Federal Reserve. The millennials have been forced to take out an excessive amount of debt such as auto loans, consumer debt, and student loans in an era of wage stagnation. This has fundamentally changed the game for millennials and perhaps changed the course of the United States. The implications of falling birth rates in a low growth economic environment coupled with massive amounts of debt - is a perfect storm that will lead to the next crisis. Falling birth rates in the United States have been classified of what some call the ‘baby bust’. Like any bubble, there must be a bust cycle and when it comes to births in the United States — that time, is now. According to the report, some demographers are “freaked out by the falling birth rate, an occupational hazard for people who spend their professional lives scrutinizing population statistics”. As the demographic winds shift, the United States is preparing for a ‘Japanification’ period of lower birth rates and a much old generation to strain the economic and healthcare systems. According to the Centers for Disease Control and Prevention, the number of babies born declined by 338,000 or 8.7% between 2007 and 2016. Over the period, the national fertility rate declined from 69.3 to a historic low of 62.0 in 2016. For more color, the peak was in 1960 at 118 after World war II, ever since it’s been in decline.
VA exploring idea of merging health system with Pentagon (AP) — As part of its effort to expand private health care, the Department of Veterans Affairs is exploring the possibility of merging its health system with the Pentagon’s, a cost-saving measure that veterans groups say could threaten the viability of VA hospitals and clinics. VA spokesman Curt Cashour called the plan a potential “game-changer” that would “provide better care for veterans at a lower cost to taxpayers,” but he provided no specific details. Griffin Anderson, a spokesman for the Democrats on the House Veterans Affairs Committee, said the proposal — developed without input from Congress — would amount to a merger of the VA’s Choice and the military’s TRICARE private health care programs. Committee Democrats independently confirmed the discussions involved TRICARE. News of the plan stirred alarm from veterans groups, who said they had not been consulted, and sharp criticism from congressional Democrats who pledged to oppose any VA privatization effort that forces veterans “to pay out of pocket for the benefits they have earned with their heroism.” VA is seeking a long-term legislative fix for Choice by year’s end.
“The Medical Cost Reduction Act of 2017” - naked capitalism - Yves here. This October post from the site New Laws for America hasn’t gotten the attention it deserves. Fighting for single payer should not preclude advocating other ideas for bringing the medical-industrial complex to heel; in fact, they should be seen as complementary. Forcing the health care rentiers to fight a multi-front war has higher odds of success than relying on one option. Due to the length of the post, author Bob Hertz didn’t unpack some of his ideas fully. For instance, he calls for the creation of “Health Courts” which appear to be modeled on small claims courts. Hertz says, “….he patient will not need an attorney.” In fact, as most readers know, parties to a suit can plead their own case in court, but judges take a dim view of that. Presumably what Hertz meant was that judges would expect most plaintiffs to be representing themselves and therefore procedure would be less strict than in most courts. Similarly, he calls for a national fee schedule for emergency procedures. One would presumably need some sort of local cost adjustment.
Surge in ObamaCare signups surprises experts | TheHill: The number of people signing up for ObamaCare has surged in the first few weeks of open enrollment this year, contrary to dire predictions. The spike in sign-ups is good news for supporters of the health-care law, but experts warn the early numbers don’t necessarily signify a trend. Final enrollment numbers could still be much lower than in the past, they say. The first ObamaCare open enrollment period of the Trump administration has been surprisingly robust, despite the uncertainty caused by nearly 10 months of repeal attempts in Congress, rising premiums and insurer exits.Through the first 18 days, nearly 2.3 million people have signed up for insurance coverage through ObamaCare exchanges, according to the Centers for Medicare and Medicaid Services, a number that has outpaced the same period under former President Barack Obama. Larry Levitt, a health policy expert at the Kaiser Family Foundation, said enrollment is up significantly on a daily basis, but cautioned against drawing conclusions from the early numbers. “But there are a lot fewer days” in the open enrollment period, he said. “It’s really hard to generalize from these early enrollment numbers.” There are a number of factors that could weigh down enrollment this year. Standard & Poor’s earlier this month forecast that enrollment could actually drop by as much as 1.6 million people below last year’s level of 12.2 million signups, in part due to uncertainty from the administration's actions. This year, open enrollment was cut in half and ends Dec. 15. Even if sign-ups stayed on pace, they would fall well short of previous years because of the shortened time period.
Health Giant Sutter Destroys Evidence In Crucial Antitrust Case Over High Prices - KHN - Sutter Health intentionally destroyed 192 boxes of documents that employers and labor unions were seeking in a lawsuit that accuses the giant Northern California health system of abusing its market power and charging inflated prices, according to a state judge.In a ruling this week, San Francisco County Superior Court Judge Curtis E.A. Karnow said Sutter destroyed documents “knowing that the evidence was relevant to antitrust issues. … There is no good explanation for the specific and unusual destruction here.”Karnow cited an internal email by a Sutter employee who said she was “running and hiding” after ordering the records destroyed in 2015. “The most generous interpretation to Sutter is that it was grossly reckless,” the judge wrote in his 12-page ruling. Sutter, which has 24 hospitals and nearly $12 billion in annual revenue, said the destruction was a regrettable mistake.Employers and policymakers across the country are closely watching this legal fight amid growing concern about the financial implications of industry consolidation. Large health systems are gaining market clout and the ability to raise prices by acquiring more hospitals, outpatient surgery centers and physician offices. “It’s stunning what Sutter did to cover up incriminating documents in this case,” said Richard Grossman, the lead plaintiffs’ lawyer representing a class of more than 1,500 employer-funded health plans.
Opioid-Related Deaths Drained $500 Billion From The US Economy In 2015 -- The national opioid epidemic is even larger drain on the US economy than previously believed, according to a new analysis from the White House Council of Economic Advisers. The cost of opioid-related deaths in 2015 was $504 billion, according to the CEA – a figure equivalent to 2.8% of that year’s gross domestic product.CEA said the report, which was obtained by the Hill ahead of its release on Monday, was needed because “in assessing the benefits of fiscal and regulatory policies that limit opioid abuse in the United States, it is important to understand the costs associated with the epidemic that policies might mitigate.” In calculating the net cost, the CEA posited that the official statistics gathered by the federal government underestimate the number of opioid-related deaths.According to the official count, there were more than 33,000 reported opioid-involved overdose deaths in 2015, but because fatalities are underreported, CEA pegged the number closer to about 41,000 deaths.Because of this adjustment, the CEA’s cost estimate is much larger than previous estimates.To arrive at the total cost associated with the 41,000 figure, the CEA used a formal typically employed by federal agencies to determine the value of lives lost. Another reason why estimates were much lower in the past is because previous studies only took into account the cost of prescription painkillers, while the CEA’s analysis also included illicit opioids, like heroin.
There’s new evidence that the sugar industry suppressed scientific studies linking sugar to heart disease and cancer - For decades, sugar lobbyists have been taking aim at studies linking sugar and cancer. When a study last year found that mice on sugar-heavy diets were more likely to develop breast cancer, the Sugar Association, one of the biggest sugar lobbying groups in the US, called it “sensationalized.” The group insists that “no credible link between ingested sugars and cancer has been established.” But doctors and researchers claim the sugar industry may have been intentionally keeping research about that link from getting published. A new study inthe journalPLOS Biology reveals how the Sugar Association worked to suppress scientific findings on the harmful effects of table sugar on rodents nearly 50 years ago. The report details the results of two unpublished studies, known as Project 259, which were funded by the sugar lobby in the late 1960s. Both involved research on the effects of feeding sugar to rats.In the first study, one group of rats was fed a balanced diet of cereal, beans, fish and yeast, while the other rats were given a high-sugar diet. The researchers found that the sugar eaters were at greater risk for strokes, heart attacks and heart disease, and had higher-than-normal levels of fat (triglycerides) in their blood.The second study compared sugar-fed rats with starch-fed rats and found that the sugar-eating rodents were more likely to have elevated levels of an enzyme associated with bladder cancer in humans. None of that rodent research saw the light of day, though. The Sugar Research Foundation cut Project 259 short and didn’t publish any of the results."Our study contributes to a wider body of literature documenting industry manipulation of science," the researchers, who hail from the University of California San Francisco, wrote in their report.
EPA: Perchlorate in Drinking Water Can Harm Fetal Brain Development -- Pursuant to a consent decree with the Natural Resources Defense Council (NRDC), the U.S. Environmental Protection Agency ( EPA ) is developing drinking water regulations to protect fetuses and young children from perchlorate , a toxic chemical that inhibits the thyroid's ability to make the hormone T4 essential to brain development. The rulemaking is part of a long process that began in 2011 when the agency made a formal determination that Safe Drinking Water Act standards for perchlorate were needed. Under the consent decree, EPA should propose a standard by October 2018. In the latest step in that process, EPA's scientists released a draft report in September that, at long last, answers questions posed by its Science Advisory Board in 2013 : does perchlorate exposure during the first trimester reduce production of T4 in pregnant women with low iodine consumption? Does reduction in maternal T4 levels in these women adversely affect fetal brain development? According to EPA's scientists, the answers are Yes and Yes. EPA's scientists reviewed 55 research studies and concluded, "Overall, the results of this literature review lend support to the concept that maternal fT4, especially in the hypothyroxinemic range, is critical to the offspring's proper neurodevelopment" and "the impact of altered fT4 is seen even with small incremental changes in fT4 (and in populations with fT4 across the "normal" range)."From the literature search, EPA identified IQ, motor skills, cognitive and language development and reaction time as measurements of neurodevelopment that enable them to quantify the effects of perchlorate exposure in the first trimester.
Line streets with trees to prevent serious asthma attacks, say scientists -- Asthma hospital admissions could be cut dramatically by lining streets with trees, the largest ever study has found. Researchers from the University of Exeter's medical school studied the impact of urban greenery on the respiratory condition and say the results suggest planting trees could help reduce the dangerous effects of traffic fumes.However large areas of grassed gardens or parkland could make asthma worse, the findings suggest, because grass pollen merges with pollution - triggering a condition known as 'greyfever.'Asthma affects about five million people in Britain, costs the NHS £1 billion a year and causes around 1,000 deaths annually. Pollution is known to exacerbate asthma, but researchers found that even in the most-polluted areas, a high density of trees led to fewer A&E admissions than in less-polluted neighbourhoods with fewer trees.The findings hold true even though tree pollen can often trigger asthma, suggesting the pollution-absorbing effect is greater than the allergenic impact, particularly when pollution is high. The researchers concluded, on balance, trees did "significantly more good than harm," with every extra 300 trees per square kilometre associated with around 50 fewer emergency asthma cases per 100,000 residents over a 15-year period."Greenspace and gardens were associated with reductions in asthma hospitalisation at lower pollutant levels, but not in the most polluted urban areas. With trees it was the other way round, " said study leader Dr Ian Alcock."It may be that grass pollens become more allergenic when combined with air pollutants so that the benefits of greenspace diminish as pollution increases. "In contrast, trees can effectively remove pollutants from the air, and this may explain why they appear to be most beneficial where concentrations are high."
Light pollution: Night being lost in many countries - BBC - A study of pictures of Earth by night has revealed that artificial light is growing brighter and more extensive every year. Between 2012 and 2016, the planet's artificially lit outdoor area grew by more than 2% per year. Scientists say a "loss of night" in many countries is having negative consequences for "flora, fauna, and human well-being".A team published the findings in the journal Science Advances. Their study used data from a Nasa satellite radiometer - a device designed specifically to measure the brightness of night-time light. It showed that changes in brightness over time varied greatly by country. Some of the world's "brightest nations", such as the US and Spain, remained the same. Most nations in South America, Africa and Asia grew brighter. Only a few countries showed a decrease in brightness, such as Yemen and Syria - both experiencing warfare. The nocturnal satellite images - of glowing coastlines and spider-like city networks - look quite beautiful but artificial lighting has unintended consequences for human health and the environment.
- In 2016, the American Medical Association officially recognised the "detrimental effects of poorly designed, high-intensity LED lighting", saying it encouraged communities to "minimise and control blue-rich environmental lighting by using the lowest emission of blue light possible to reduce glare. The sleep-inducing hormone melatonin is particularly sensitive to blue light.
- A recent study published in the journal Nature revealed that artificial light was a threat to crop pollination - reducing the pollinating activity of nocturnal insects.
- Research in the UK revealed that trees in more brightly lit areas burst their buds up to a week earlier than those in areas without artificial lighting.
- A study published earlier this year found that urban light installations "dramatically altered" the behaviour of nocturnally migrating birds.
Florida let hepatitis C go untreated in prisons. Now it may cost taxpayers millions. The state of Florida may have to pay hundreds of millions of dollars in treatment costs to as many as 20,000 sick inmates after a federal judge ruled Friday that prison officials had failed to properly care for felons infected with the hepatitis C virus. The ruling, by U.S. District Court Judge Mark Walker, requires the Florida Department of Corrections to immediately treat a significant portion of the state’s 98,000 inmates who test positive for the viral infection with direct acting antiviral drugs, a 12-week treatment that now costs about $37,000 per patient. “FDC has a long and sordid history of failing to treat HCV-infected inmates,” Walker wrote in his 32-page ruling. “And this court finds as a matter of fact that FDC’s failure to treat was due to a lack of funding.” The class action lawsuit was filed in May by three inmates who have been suffering for years from the ravages of hepatitis C but were denied treatment from both the state and the private companies contracted to provide medical care in the prison system. Walker said the state was “deliberately indifferent to the serious medical needs” and noted that only 13 inmates of the more than 7,000 eligible had ever been given the antiviral drugs, and three of them were given treatment after being named plaintiffs in the case. “If these inmates are not treated, they will undoubtedly suffer irreparable injury,” Walker wrote. “Although DAAs [direct acting antivirals] can cure a person of HCV, they do not necessarily reduce the level of fibrosis a person has already suffered. … Consequently, it is important to treat patients with HCV as soon as possible so that they can be cured of the virus before their liver becomes significantly diseased.”
Hundreds of Vietnam vets infected by a slow-killing parasite - — A half century after serving in Vietnam, hundreds of veterans have a new reason to believe they may be dying from a silent bullet — test results show some men may have been infected by a slow-killing parasite while fighting in the jungles of Southeast Asia.The Department of Veterans Affairs this spring commissioned a small pilot study to look into the link between liver flukes ingested through raw or undercooked fish and a rare bile duct cancer. It can take decades for symptoms to appear. By then, patients are often in tremendous pain, with just a few months to live. Of the 50 blood samples submitted, more than 20 percent came back positive or bordering positive for liver fluke antibodies, said Sung-Tae Hong, the tropical medicine specialist who carried out the tests at Seoul National University in South Korea."It was surprising," he said, stressing the preliminary results could include false positives and that the research is ongoing. Northport VA Medical Center spokesman Christopher Goodman confirmed the New York facility collected the samples and sent them to the lab. He would not comment on the findings, but said everyone who tested positive was notified. Though rarely found in Americans, the parasites infect an estimated 25 million people worldwide, mostly in Asia. Endemic in the rivers of Vietnam, the worms can easily be wiped out with a handful of pills early on, but left untreated they can live for decades without making their hosts sick. Over time, swelling and inflammation of the bile duct can lead to cancer. Jaundice, itchy skin, weight loss and other symptoms appear only when the disease is in its final stages.
Monsanto says Mexico revokes permit to market GMO soy in seven states (Reuters) - Monsanto Co said on Thursday that Mexico’s agriculture sanitation authority SENASICA had revoked its permit to commercialize genetically modified soy in seven states, criticizing the decision as unjustified. Monsanto said in a statement that the permit had been withdrawn on unwarranted legal and technical grounds. The company said it would take the necessary steps to safeguard its rights and those of farmers using the technology, but did not elaborate. SENASICA officials could not immediately be reached for comment. Mexican newspaper Reforma cited a document saying the permit had been withdrawn due to the detection of transgenic Monsanto soya in areas where it was not authorized. Monsanto rejected that argument, saying in its statement that authorities had not done an analysis of how the soy on which their decision was based was sown. The revocation applies to the states of Tamaulipas, San Luis Potosi, Veracruz, Chiapas, Campeche, Yucatan and Quintana Roo and follows a 2016 legal suspension of the permit.
The Realities of Industrial Farming - How would you react if a neighbor did something that suddenly altered your quality of life or the value of your property? For too many folks in a rural areas, this isn’t just a rhetorical question. People who live in the country understand the realities of farming and raising animals. They try to get along and be considerate. If a neighbor decided to build a rural factory, complete with constant truck traffic in and out, plus industrial sounds and smells (very unpleasant smells at that, and not just a few times a year, but nearly year-round)… what would you do? Neighbors surrounding an industrial-scale hog operation in tiny Mount Judea, Arkansas, have been living this new reality since discovering that a local man bought property up on a hill in the heart of their community. The factory turns out piglets by breeding 2500 sows in rotation, producing something like 80,000 animals yearly. The owners and proponents call it a farm. Officially, it is classified as a confined animal feeding operation, or CAFO for short. In other words, it’s an indoor feedlot for pigs. Two giant metal buildings stand windowless, with exhaust fans running around the clock to keep the enclosed hogs from suffocating. The animals never see daylight, except through the slats of a truck transporting them to the facility where they will be finished, meaning fattened, before being shipped one last time to a slaughter house. It is well known that pigs are as smart, perhaps even smarter, than many dogs. Yet these CAFO animals spend their entire lives either pregnant or nursing babies, within metal confinement pens inside these buildings. The pig, who is curious and playful under normal circumstances, never experiences the sun on its back or ground under its feet.
Rural areas at risk as water levels drop in massive aquifer - The draining of a massive aquifer that underlies portions of eight states in the central U.S. is drying up streams, causing fish to disappear and threatening the livelihood of farmers who rely on it for their crops. Water levels in the Ogallala aquifer have been dropping for decades as irrigators pump water faster than rainfall can recharge it. An analysis of federal data found the Ogallala aquifer shrank twice as fast over the past six years compared with the previous 60, The Denver Post reports. The drawdown has become so severe that streams are drying at a rate of 6 miles per year and some highly resilient fish are disappearing. In rural areas, farmers and ranchers worry they will no longer have enough water for their livestock and crops as the aquifer is depleted. The aquifer lost 10.7 million acre-feet of storage between 2013 and 2015, the U.S. Geological Survey said in a June report. Also known as the High Plains Aquifer, the Ogallala underlies 175,000 square miles (453,000 square kilometers), including parts of Colorado, Wyoming Kansas, Nebraska, New Mexico, Oklahoma, South Dakota and Texas. That's one of the primary agricultural regions of the U.S., producing $35 billion in crops annually. Farmers and ranchers have been tapping into the aquifer since the 1930s to boost production and help them get by in times of drought. However, overpumping has dried up 358 miles of surface rivers and streams across a 200-square-mile area covering eastern Colorado, western Kansas and Nebraska, according to researchers from Colorado State University and Kansas State University. If farmers keep pumping water at the current pace, another 177 miles of rivers and streams will be lost before 2060, the researchers determined.
Small Michigan Township Blocks Nestle From Bottling, Reselling Its Groundwater --A small Michigan township is making a stand against Nestle, temporarily blocking the company from pumping millions of gallons of groundwater for bottled water. Citizens near Evart, Michigan became outraged when Nestlé proposed to build even larger pipelines to increase the flow of water to its plant in Standwood. Global News CA details the local resistance to Nestlé’s proposed expansion to collect even more ground water: The added capacity provided by the proposed booster pump would make it possible for Nestlé to extract an estimated 1,500 litres of groundwater per minute, representing more than 4.2 million bottles of water in a 24-hour period. That’s equal to 794 million litres of water annually. As explained by Global News CA, “the company is currently limited to pumping 945 litres per minute, up significantly from its pre-2015 cap of 565 litres per minute.” In the video below, Michigan Citizens for Water Conservation protested last Wednesday outside the Reed City courthouse against Nestlé. Residents of the area have had enough of the multinational corporation extracting the towns resources for less than pennies on the dollar. One of the protestors had a sign that read, “Nestlé destroys our planet one bottle at a time.” One report claims that waters near the Nestlé-owned pump can no longer support fish species.A much larger issue that no-one seems to be addressing: how does a multinational corporation have virtually free access to the state’s water supply, while citizens in Flint, Michigan face undrinkable lead water? The state’s prioritization seems to be misaligned when it comes to its own taxpayers (especially when the adversary is one of the world's wealthiest multinationals).
2.5 Million in Yemen Have No Clean Water as World's Worst Single-Year Cholera Epidemic Threatens to Spread - The capital Sanaa and al-Bayda are now among the growing list of cities without access to clean water in Yemen after the Saudi-led blockade cut off supplies of fuel used for pumping. On Monday, the International Committee of the Red Cross (ICRC) confirmed that some 2.5 million Yemenis lack access to clean water. This latest development adds the capital to a long list of cities whose water infrastructure is crippled by blockade and war. Without fuel to pump water into Yemen's densely populated cities, 2.5 million are "at risk of another major outbreak of water-borne disease," Iolanda Jaquemet, an ICRC spokeswoman, told Reuters. Yemen passed beyond a public health nightmare months ago. Since April 2017, some 940,768 people have been infected with cholera, a water-borne disease, making it the world's worst epidemic in a single year. Dysentery and other water-borne diseases are rampant as well. "Today, Sanaa and al-Bayda joined the list," Jaquemet said to Reuters, meaning these two cities are now facing the same risks as Saada, Taiz and Hodeidah—three cities that ran out of clean water on Friday, according to the ICRC . "The water and sewage systems in Hodeidah, Saada and Taiz stopped operating because of a lack of fuel," Alexandre Faite, the ICRC's head of delegation in Yemen, said in a press release . "As a result, close to one million people are now deprived of clean water and sanitation in crowded urban environments in a country slowly emerging from the worst cholera outbreak in modern times." Sanaa's already deteriorated water network completely halted quicker than expected. Last Friday, the ICRC was warning that Sanaa's clean water crisis would reach a zenith in two weeks. Sanaa's water infrastructure, which has been subjected to airstrikes and blockade, was brought to a trickle within two days, making the city an even more fertile ground for water-borne diseases. .
Egypt Warns Ethiopia Nile Dam Dispute 'Life or Death' (AP) -- Egyptian President Abdel-Fattah el-Sissi, for the second time in as many days, delivered on Saturday a stern warning to Ethiopia over a dam it is building after the two countries along with Sudan failed to approve a study on its potential effects. Ethiopia is finalizing construction of the Grand Ethiopian Renaissance Dam, its first major dam on the Blue Nile, and will eventually start filling the giant reservoir behind it to power the Africa's largest hydroelectric dam. Egypt fears that will cut into its water supply, destroying parts of its precious farmland and squeezing its population of 94 million people, who already face water shortages. Dam construction on international rivers often causes disputes over the downstream impact. Cairo said last week that the three countries had failed to approve an initial study by a consultancy firm on the dam's potential effects on Egypt and Sudan. Ethiopia says the dam is essential to its development and has repeatedly sought to reassure Egypt. But Cairo's efforts to persuade Addis Ababa to engage in closer coordination over the dam appear to have made little headway. El-Sissi sought to reassure Egyptians in televised comments while attending the inauguration a fish farm in the Nile Delta province of Kafr el-Sheikh, but stressed that "water is a matter of life or death." "No one can touch Egypt's share of water," he said. The Nile provides over 90 percent of Egypt's water supply. It already receives the lion's share of Nile waters - more than 55 billion of the around 88 billion cubic meters of water that flow down the river each year.
The Psychology Of Desperate People: 15 Dead, 40 Injured In Food Stampede In Morocco -- In prepper lore, there is a theory about how badly desperate people are likely to behave. Many folks outside the community scoff at this theory. They believe that we have become more civilized than to utilize violent measures when hunger strikes.But an incident in Morocco the other day showed us exactly how hungry people behave. And it isn’t pretty. Food was being distributed in a rural market in Sidi Boulaalam, a poor village. Women had come to the market with baskets to get food for their families, when suddenly, what could only be described as a stampede erupted.At least 15 women died and five were wounded in a stampede during a food distribution operation on Sunday morning in rural Morocco, government officials said.The victims were crushed as hundreds of people, mostly women, gathered to collect baskets of food at the market……In the aftermath of the stampede, clothes and other personal items were left scattered across the ground. (source) That number was later updated to 40 people who were injured in the crush.Witnesses told local media that this year’s annual food aid distribution at a local market in Sidi Boulaalam, an impoverished town with just over 8,000 inhabitants, attracted a larger crowd than usual.“This year there were lots of people, several hundred people,” a witness who asked to remain anonymous told AFP news agency.“People shoved, they broke down the barriers,” he said, adding that the injured had been evacuated to a hospital in Marrakesh. (source). Here’s a video of the aftermath. The value of the food being handed out? $16. 15 families were left without mothers over $16 of food.
Frog goes extinct, media yawns -- On 26 September, staff with the Atlanta Botanical Garden found a frog dead in his enclosure. The frog had big brown eyes, massive feet with thick webs between the toes, and brownish skin speckled with little yellow dots. His name was Toughie. He was big for a frog and he didn’t like it when humans handled him. He’d lived a long time: 12 years. And he was the last of his kind. On 26 September 2016, the world very likely lost Rabbs’ fringe-limbed treefrog (Ecnomiohyla rabborum) to extinction. The species, only discovered by scientists in 2005, lived in Panama before it was wiped out in the wild by habitat destruction and the amphibian disease, chytridiomycosis. The last one was heard calling in the wild in 2007. But before this, a small number of Rabbs’ fringe-limbed treefrog had been taken into zoological facilities for captive breeding. Unfortunately, the attempt failed. Toughie was the last to die.Despite the fact that we can actually trace the extinction of Rabbs’ fringe-limbed treefrog to an exact date, it occurred with very little media interest. Sure, the species’ demise was covered by many standard science media sites, such as Scientific American, National Geographic, and Mongabay. But the list of what media outlets thought the story not interesting enough is perhaps more notable, including the BBC, the Sun, and CNN. Even this outlet, the Guardian, did not devote a full article to the extinction. A week after the extinction, I gave a presentation to a local herpetological society, ie devoted to amphibians and reptiles. When I brought up the recent demise of Rabbs’ fringe-limbed treefrog, there were audible gasps in the room. Even herp lovers hadn’t heard of it. This begs the question: how could the public care about global mass extinction if they aren’t even told about its victims? How can we care if we don’t grieve?
The long-lived clam and its untimely death - Longevity may not be the first thing that comes to mind when you think of clams but some of the squishy creatures can live for centuries — if we let them. But if the mollusks manage to evade predators like us, they can actually live to be quite old. To the tune of half a millennium. But how can we even tell how old a clam is? Conveniently, they have growth lines. Much like tree-rings, the many fine lines on their shells denote their age, with one line representing one year. The record holder (as far as we know) is the ocean quahog (Arctica islandica). These mollusks are quite common in the North Atlantic where they are harvested commercially. But one particular creature, which was later nick-named "Ming," managed to elude "harvesting" for centuries. But in 2006, Ming's luck ran out. A group of researchers pulled her out of the ocean off the coast of Iceland. Initially thought to be an impressive 405 years old, scientists later revised their assessment to a grand 507. By that reckoning, when Ming first saw the light of day, the Americas had just been discovered, Martin Luther was only 16 years old and yes, the Ming-Dynasty ruled China. Sadly, we will never know how much longer the aged clam might have lived if she had been left in her element. Before they realized what a unique specimen they had caught, the researchers froze the mollusk to preserve it - killing it in the process.
Lawsuit Challenges Trump Administration Over New Elephant and Lion Trophy Policies, Still in Effect Despite Trump's Tweets - The Center for Biological Diversity and Natural Resources Defense Council sued the Trump administration Monday for allowing U.S. hunters to import elephant and lion trophies from Zimbabwe. The lawsuit aims to protect animals and resolve confusion created by the administration's contradictory announcements in recent days. The suit comes days after the U.S. Fish and Wildlife Service abruptly reversed an Obama-era ban on elephant trophy imports based on catastrophic elephant population declines. Fish and Wildlife also recently greenlighted lion trophy imports from Zimbabwe, despite the controversial killing of Cecil the Lion in Zimbabwe in 2015. After massive public outcry, including from established Republican politicians and pundits, President Trump and Interior Sec. Ryan Zinke announced a "hold" on issuing elephant trophy import permits late Friday night. President Trump suggested on Twitter that a new big-game trophy decision would be forthcoming. Unfortunately, the new federal policies allowing imports of elephant and lion trophies—referred to as "positive enhancement findings" under the U.S. Endangered Species Act—remain in effect. "The Trump administration must clearly and permanently halt imports of lion and elephant trophies to protect these amazing animals from extinction," said Tanya Sanerib, a senior attorney with the Center for Biological Diversity. "Trump's abrupt backpedaling after public outcry, while appreciated, shows how arbitrary this deplorable decision was. These incredibly imperiled creatures need a lot more than vague promises."
Senate Republicans Push for Extinction of North Carolina's Red Wolf -- Tucked away in the Senate report accompanying Monday's funding bill for the Department of the Interior is a directive to the U.S. Fish and Wildlife Service to "end the Red Wolf recovery program and declare the Red Wolf extinct." "Senate Republicans are trying to hammer a final nail in the coffin of the struggling red wolf recovery program," said Perrin de Jong, staff attorney at the Center for Biological Diversity . "It is morally reprehensible for Senator Murkowski and her committee to push for the extinction of North Carolina's most treasured wild predator. Instead of giving up on the red wolf, Congress should fund recovery efforts, something lawmakers have cynically blocked time and time again." The science demonstrates that red wolves are still recoverable. A 2014 report by the nonpartisan Wildlife Management Institute concluded that recovery would require augmenting eastern North Carolina's existing wild population of fewer than 45 red wolves with two additional wild populations and investing additional resources to build local support for red wolf recovery. The Fish and Wildlife Service is currently developing a revised rule under the Endangered Species Act to redesign protections for the red wolf, and nearly all the public comments submitted to the agency this past summer support recovering the wild population in the southeastern U.S.
‘Looting’ spree threatens wildlife and forests across eastern Europe – Guardian - An environmental “looting” spree is threatening biodiversity and pristine forests across 15 countries in central and eastern Europe, the UN has warned. Environmental crimes such as illegal logging, fishing, poaching and the caviar black market are putting “high pressure” on ecosystems in the Danube-Carpathian region, according to a report by the UN Environmental Programme (Unep) and WWF. At least one species of Danube sturgeon has become extinct due to the €22m-a-year black market caviar trade, with three other species now critically endangered, and one so rare that it can no longer be monitored. Up to 36 million birds are being stolen or killed in the Mediterranean annually, the report says, with many ending up on plates in Italian and Maltese restaurants. “The looting of these natural resources undermines development and deprives governments of the money they need to promote jobs, education and health services”, said Erik Solheim, Unep’s director. “These resources should rather be a solid foundation for future generations”. Environmental crime is now the world’s fourth largest type of criminal activity, valued at between $91bn and $258bn per year. The cost of illegal logging to Romania alone has been estimated at €5bn over the last two decades. Climate change is increasingly adding to problems of environmental mismanagement, with forest fires in countries such as Bulgaria all but wiping out many monocultural plantations of non-native tree species. Irene Lucius, one of the report’s authors, said this also provided an opportunity, however, as “it becomes increasingly evident that natural forests are more resilient to climate change and that these areas that have been devastated by forest fires should be replanted by native trees.”
Conservation Gone Wrong: Converting Tibet’s Qinghai Plateau into a National Park - This is an example of conservation gone wrong. Very, very wrong.Conservation strategies that involve forced displacement of rural, land-based and Indigenous communities are nothing new and stem from a twisted worldview in which humans and nature have nothing in common. Conservation International and other Big Green groups are masters of this devastating “human exclusion” model of so-called environmental protection.But ironically, removal of the communities that depend on these ecosystems also means that there is no one left to REALLY protect them–leaving forests vulnerable to illegal logging, and wildlife unprotected from poaching. Meanwhile, the people are forced into cities where they experience grinding poverty, loss of culture, and exploitation. It is a lose-lose model that benefits only the elites. In the instance described below, nearly 8 million people in Tibet will be removed for China to establish a “national park,” in what is being called the largest peacetime displacement in history. GJEP has long fought this racist top-down model of “conservation,” collaborating with threatened communities to help them stay on their lands. GJEP co-founder Orin Langelle was part of and documented one such successful campaign in Chiapas, Mexico. You can view his photo essay here.
October 2017 was the second warmest October on record - NASA - October 2017 was the second warmest October in 137 years of modern record-keeping, according to a monthly analysis of global temperatures by scientists at NASA's Goddard Institute for Space Studies (GISS) in New York. Last month was +0.90 degrees Celsius warmer than the mean October temperature from 1951-1980, just barely warmer than October 2016 (+0.89 °C). The warmest month of October according to the analysis happened in 2015 (+1.08 °C). The monthly analysis by the GISS team is assembled from publicly available data acquired by about 6,300 meteorological stations around the world, ship- and buoy-based instruments measuring sea surface temperature, and Antarctic research stations. The modern global temperature record begins around 1880 because previous observations didn't cover enough of the planet. Monthly analyses are sometimes updated when additional data becomes available, and the results are subject to change.
La Niña ALERT: Tropical Pacific near La Niña thresholds The tropical Pacific is approaching La Niña thresholds. If the current progression continues, and thresholds are exceeded for a sustained period, 2017–18 will be considered a La Niña event. As a result, the Bureau’s ENSO Outlook has been raised to La Niña ALERT meaning there is approximately a 70% chance—or triple the normal likelihood—of La Niña occurring. Climate models suggest that any event is likely to be weak and short-lived. This means it is expected to be very different to the strong 2010–12 La Niña. Oceanic indicators of ENSO show a clear progression towards La Niña. Tropical Pacific sea surface temperatures (SSTs) have cooled since late winter, and waters beneath the surface remain cooler than average in the eastern Pacific. However, they are currently just shy of La Niña thresholds. Atmospheric indicators such as the Southern Oscillation Index (SOI) and trade winds have shown signs of shifting into a La Niña-like state. In order for La Niña to become established, atmospheric and oceanic indicators need to be reinforcing each other ("coupled"), which will strengthen and sustain these changes (i.e. a positive feedback). All international climate models suggest further cooling of the tropical Pacific is likely. All models reach La Niña thresholds in December 2017, and most maintain these values until at least February 2018. La Niña typically brings above average rainfall to eastern Australia during late spring and summer. However, sea surface temperature patterns in the Indian Ocean and closer to Australia are not typical of La Niña, reducing the likelihood of widespread summer rainfall. La Niña can also increase the chance of prolonged warm spells for southeast Australia. The Indian Ocean Dipole (IOD) is currently neutral. IOD events are typically unable to form between December and April.
Hurricane Maria Damage Estimate of $102 Billion Surpassed Only by Katrina - Two months after Category 4 Hurricane Maria pounded Puerto Rico and the Virgin Islands, the Thanksgiving holiday on the islands will be a difficult one. Approximately half of Puerto Rico’s 1.5 million customers still do not have power, 10% do not have water service, and a third of the island’s cell phone towers are not working. In the U.S. Virgin Islands, 73% of the 103,000 residents still had no power two weeks ago. Last week, Puerto Rico Governor Ricardo Rossello asked the federal government for $94.4 billion in disaster recovery aid; $5 billion in aid has been approved for Puerto Rico thus far by Congress. In mid-November, U.S. Virgin Islands Governor Kenneth Mapp asked Congress for $7.5 billion in Hurricane Maria disaster assistance; Congress has thus far only approved $0.5 billion in loans to the Virgin Islands. The combined $102 billion in damage aid requests for Maria from the two governors would put Maria in second place behind Hurricane Katrina of 2005 ($161 billion in damage) on the list of costliest weather disasters in world recorded history. An early estimate of insured damages from Maria from insurance broker AIR Worldwide was $40 - $85 billion; since total damage is typically about double insured damage, Maria's pricetag may end up being well in excess of $100 billion. The official death toll from Maria is 26 direct deaths (due to drowning or wind-related effects) and 29 indirect deaths in Puerto Rico; 2 direct deaths and 1 indirect death occurred in the U.S. Virgin Islands. However, the indirect deaths are likely greatly underestimated. A CNN analysis based on data from 112 funeral homes in Puerto Rico identified 499 storm-related deaths in the month following the hurricane. The article argued that this is likely an underestimate, since there are always a significant number of bodies that do not get processed through funeral homes. A more accurate way to estimate the storm’s indirect deaths might be to look at the total number of deaths this year compared to last year, and 472 more people died in September 2017 than September 2016, according to Puerto Rico's Demographic Registry.
The thawing Arctic threatens an environmental catastrophe - The Economist - A great thaw is inevitable as the climate responds to an accumulation of carbon emissions in the atmosphere. International efforts to limit global warming will at best slow the changes, perhaps making the consequences merely terrible rather than catastrophic. “The Paris agreement will not save the Arctic as it is today,” says Lars-Otto Reiersen, executive secretary of the group behind the latest edition of “Snow, Water, Ice, Permafrost in the Arctic” (SWIPA), a report produced under the auspices of the Arctic Council, a scientific-policy club for the eight countries with territory in the Arctic Circle), as well as observers including China and India. Atmospheric concentration of carbon dioxide has now reached 400 parts per million (ppm), up from 280ppm three centuries ago; the Earth is on average 1ºC hotter than in pre-industrial times. Even if the Paris agreement is implemented in full, the Arctic will warm by between 5ºC and 9ºC above the 1986-2005 average over the Arctic ocean in winter. The thaw is happening far faster than once expected. Over the past three decades the area of sea ice in the Arctic has fallen by more than half and its volume has plummeted by three-quarters (see map). SWIPA estimates that the Arctic will be free of sea ice in the summer by 2040. Scientists previously suggested this would not occur until 2070. The Arctic has been warming at twice the rate of the rest of the world for decades because of feedback loops that have reduced the albedo effect, a measure of the way Earth reflects heat. Unlike the rest of the planet the polar regions release more heat into space than they absorb, in effect cooling the planet, because sunlight is reflected by ice and snow. When it is replaced by water or dark ground, more heat is retained. That is precisely what is happening in the Arctic’s defrosting landscape.As the land in the Arctic warms and once permanently frozen ground unfreezes, greenhouse gases are released. The dead plants and animals in Arctic permafrost hold about half the world’s carbon stored in soil. As this organic matter thaws it decays, releasing carbon dioxide and methane, another powerful greenhouse gas, and insulating the planet still further.
Ice Apocalypse: Rapid collapse of Antarctic glaciers could flood coastal cities by the end of this century - In a remote region of Antarctica known as Pine Island Bay, 2,500 miles from the tip of South America, two glaciers hold human civilization hostage. Stretching across a frozen plain more than 150 miles long, these glaciers, named Pine Island and Thwaites, have marched steadily for millennia toward the Amundsen Sea, part of the vast Southern Ocean. Further inland, the glaciers widen into a two-mile-thick reserve of ice covering an area the size of Texas. There’s no doubt this ice will melt as the world warms. The vital question is when. The glaciers of Pine Island Bay are two of the largest and fastest-melting in Antarctica. (A Rolling Stone feature earlier this year dubbed Thwaites “The Doomsday Glacier.”) Together, they act as a plug holding back enough ice to pour 11 feet of sea-level rise into the world’s oceans — an amount that would submerge every coastal city on the planet. For that reason, finding out how fast these glaciers will collapse is one of the most important scientific questions in the world today. The ocean floor gets deeper toward the center of this part of Antarctica, so each new iceberg that breaks away exposes taller and taller cliffs. Ice gets so heavy that these taller cliffs can’t support their own weight. Once they start to crumble, the destruction would be unstoppable. “Ice is only so strong, so it will collapse if these cliffs reach a certain height,” explains Kristin Poinar, a glaciologist at NASA’s Goddard Space Flight Center. “We need to know how fast it’s going to happen.” In the past few years, scientists have identified marine ice-cliff instability as a feedback loop that could kickstart the disintegration of the entire West Antarctic ice sheet this century — much more quickly than previously thought. Minute-by-minute, huge skyscraper-sized shards of ice cliffs would crumble into the sea, as tall as the Statue of Liberty and as deep underwater as the height of the Empire State Building. The result: a global catastrophe the likes of which we’ve never seen.
A new NASA tool predicts how high seas will rise in your city if specific glaciers melt - Glaciers in Greenland are melting at an increasingly rapid pace, partially due to rising global temperatures caused by human activity. Though Greenland and Antarctica are far from cities like New York and London, the melting glaciers in both regions are expected to raise sea levels enough to change many of the world's coastlines. But different glacial systems will affect different cities to varying degrees, according to new research from NASA. These disparities depend on where and how much different glaciers feed water into the ocean, and where that water flows. The scientists created an interactive tool that allows users to pick from 293 coastal cities and see how those areas could be affected if particular ice masses melt into the ocean. New York, for example, should mostly worry about three major glaciers in Greenland’s northeast and northwest: the Petermann, Zachariae, and Jakobshavn glaciers. London should worry most about the northwestern part of the Greenland ice sheet. Sydney should actually fear the loss of parts of Antarctic ice that are farther from Australia more than the ones that are closer.This image shows which areas of Greenland threaten NYC the most. The red portions would have the greatest effect on the city's coastlines: If Greenland's Petermann, Zachariae, and Jakobshavn glaciers all melt, the world's seas would rise an average of four inches, NASA predicts. If that happens, Miami, Florida would see roughly that amount of local sea-level rise, but Rio de Janeiro, Brazil would see 124% of that average, or over five inches.Previous NASA research has suggested that Antarctic ice loss is a major threat to the US East Coast. If west Antarctica collapses, the world could experience an average of four feet of sea level rise. The East Coast, though, would experience 14 to 15 inches above that.This latest study also builds on previous research that has highlighted other effects of glacial melting, including the way it has warped the Earth's crust and slightly altered the planet’s axis of rotation.The researchers hope that coastal planners will use their newly developed tool to inform decisions about how cities should adapt to climate change, especially with respect to how individual glacier behavior relates to sea-level rise.
New Zealand considers visa for climate 'refugees' from Pacific islands (Reuters- New Zealand is proposing a special refugee visa for Pacific Islanders who are forced to migrate because of rising sea levels, the nation’s new climate change minister said, as world leaders wrap up United Nations climate talks in Germany. In the low-lying and vulnerable Pacific islands, the number of people moving within their own nations to flee worsening storms, sea level rise and other climate-related crises is still relatively small. But countries like New Zealand are making plans now before climate migration grows into a regional emergency. “We want to get ahead of this before it turns into a real problem ... we want to start a dialogue with the Pacific Island countries about this notion of migrating with dignity, if things get to that point,” said climate minister James Shaw, leader of New Zealand’s Green Party. “One of the options is a special humanitarian visa to allow people who are forced to migrate because of climate change,” he told the Thomson Reuters Foundation in a phone interview from the U.N. climate talks in Bonn, which were hosted by Fiji. In 2014, a New Zealand judge granted residency to a family from Tuvalu, in part on humanitarian grounds related to climate change. “The reason why we were throwing around an idea of a visa is because people who have been displaced by environmental conditions like rising seas and climate change aren’t counted under the U.N. Convention on Refugees,” said Shaw. The 1951 U.N. Refugee Convention grants refugee status to those fleeing persecution, wars, and conflicts, but does not include climate change as a reason to seek asylum. Neighbouring Australia said it would invest 300 million Australian dollars ($226 million) over four years to help Pacific Islands cope with climate change, but was not planning to implement a similar climate migration scheme.
A Huge Plume of Magma Is Bulging Against Antarctica - Antarctica's icy expanse is smothered in enough frozen water to drown every coastline in the world in a 216-foot (66 meters) wave if it were to melt. But scientists now believe that, deep beneath almost 1.2 miles (2 kilometers) of ice and a relatively thin slice of rocky crust, one region of the frozen continent hides a column of red-hot magma, straining toward the surface, according to a new study. Usually, magma nears the surface only at the edges of tectonic plates. And West Antarctica's Marie Byrd Land, where the plume is suspected to exist, is far from any such border regions. However, there are places in the world where magma reaches toward the surface far from any tectonic border regions, NASA scientists said in a Nov. 7 statement. Yellowstone National Park is one. Hawaii is another. All that magma pushes against the crust in those parts of the world, causing it to bulge and pumping heat up through the ground. Despite its apparent icy stillness, Antarctica is alive with motion. Huge masses of frozen water slip, slide and grind with enormous pressure against the continent below, their constant motion lubricated by a complex system of rivers and lakes below the ice. But in Marie Byrd Land, researchers found even more of that activity than the known regional heat sources could explain. Something else was cooking the ice shelf. About 30 years ago, researchers first began to suspect that a magma plume might be the cause, given the domed shape of the crust in that area. Now, scientists know for sure. Study researchers Hélène Seroussi and Erik Ivins of NASA's Jet Propulsion Laboratory built a model of all the known melting and freezing under the ice in the region. Researchers don't have probes under the ice, but they can detect the activity thanks to careful measurements of the rise and fall of the surface from NASA's ICESat satellite and IceBridge flyover missions. Their model confirmed the existence of a magma plume pumping about 150 milliwatts per square meter (or about 11 square feet) of heat up to the surface, and peaking at as much as 180 milliwatts per square meter in a region where a rift in the crust may exist. For comparison, a typical stretch of land in the United States gets about 40 to 60 milliwatts per square meter of geothermal heat, and Yellowstone gets about 200 milliwatts per square meter.
Upsurge in Big Earthquakes Predicted for 2018 As Earth Rotation Slows - Scientists have warned there could be a big increase in numbers of devastating earthquakes around the world next year. They believe variations in the speed of Earth’s rotation could trigger intense seismic activity, particularly in heavily populated tropical regions.Although such fluctuations in rotation are small – changing the length of the day by a millisecond – they could still be implicated in the release of vast amounts of underground energy, it is argued. The link between Earth’s rotation and seismic activity was highlighted last month in a paper by Roger Bilham of the University of Colorado in Boulder and Rebecca Bendick of the University of Montana in Missoula presented at the annual meeting of the Geological Society of America. In their study, Bilham and Bendick looked at earthquakes of magnitude 7 and greater that had occurred since 1900. “Major earthquakes have been well recorded for more than a century and that gives us a good record to study,” said Bilham. They found five periods when there had been significantly higher numbers of large earthquakes compared with other times. “In these periods, there were between 25 to 30 intense earthquakes a year,” said Bilham. “The rest of the time the average figure was around 15 major earthquakes a year.”The researchers searched to find correlations between these periods of intense seismic activity and other factors and discovered that when Earth’s rotation decreased slightly it was followed by periods of increased numbers of intense earthquakes. “The rotation of the Earth does change slightly – by a millisecond a day sometimes – and that can be measured very accurately by atomic clocks,” said Bilham.
Unregulated solar geoengineering could spark droughts and hurricanes, study warns -- Artificially cooling the planet through solar geoengineering could have some dramatic side effects – including an increase in droughts and hurricanes in some regions – if it is carried out in an unregulated way, a new study warns.The study focuses on one proposed type of geoengineering, known as a “stratospheric aerosol injection”, which involves sending up substances to the stratosphere that are known to have a cooling effect on the climate.It finds that if only one country, region or hemisphere were to pursue this type of geoengineering, other parts of the world could face adverse consequences. For example, if only the northern hemisphere were to release aerosols, the Sahel in Africa and parts of India would have to cope with more droughts.The research highlights that “geoengineering is going to require more global cooperation than has ever been attempted before”, another scientist tells Carbon Brief.Solar geoengineering, or “solar radiation management” (SRM), describes an array of methods – all of which remain hypothetical – for artificially reducing sunlight at the Earth’s surface in order to dampen global warming.Proposed methods includes making clouds brighter, increasing the bubbles and spray behind ships and even sending giant mirrors into space.It’s worth noting that while these proposed technologies may potentially be able to cool the planet, but they would not reduce the amount of CO2 in the atmosphere. SRM couldn’t, therefore, address all the impacts of climate change, including ocean acidification. The new study, published in Nature Communications, investigates the potential physical side effects that could come about from artificially introducing aerosols into the atmosphere.
Geoengineering Could Create More Problems Than It Could Solve -- Geoengineering —the untested technofix that would permit the continued use of fossil fuels—could create more problems than it could solve. By masking sunlight with injections of sulphate aerosols in the stratosphere, nations could perhaps suppress some of the devastating hurricanes and typhoons that in a rapidly warming world threaten northern hemisphere cities. But they could also scorch the Sahel region of Africa , to threaten millions of lives and livelihoods, according to new research. Geoengineering is sometimes played as humanity's have-your-cake-and-eat-it-too option: humans have already unthinkingly engineered climate change over the last 200 years by profligate combustion of coal, oil and gas that releases ever-growing concentrations of the greenhouse gas carbon dioxide into the atmosphere. Since ferocious volcanic eruptions have been known to cool the global climate by pumping soot and sulphur dioxide into the upper atmosphere, some reason that scientists and technologists could play the same card, in a calculated fashion. But shortly after one research team showed that, in theory at least, geoengineering could be made to work , a second group has demonstrated that there would be a huge price to pay. And they call on policymakers to think carefully before testing any unilateral action. "Our results confirm that regional solar geoengineering is a highly risky strategy which could simultaneously benefit one region to the detriment of another," said Anthony Jones , a climate scientist at the University of Exeter, UK, who led the study .
Report: Social Cost of Carbon Has Been Drastically Underestimated - Our understanding of the social cost of carbon (SCC) relied on outdated science from the 1980s, and is likely wrong. The latest calculations based on new modeling by UCLA and Purdue University show a drastic divergence with previous results—an increase of 129 percent, which moves the figure to $19.70 per ton of carbon dioxide. This calculation rests on the Climate Framework for Uncertainty, Negotiation and Distribution, or FUND model. "The underlying studies date back to publications in the 1990s, but it really dates back to science from the 1980s," said Thomas Hertel, distinguished professor of agricultural economics at Purdue. Created in the early 1980s as a response to former President Reagan's call for cost-benefit analyses on regulatory actions, the SCC became the carbon dioxide yardstick of U.S. federal agencies. The SCC measures the economic impacts, in dollar value, for the emission of one ton of carbon dioxide into the atmosphere in a given year. The latest calculations show that the FUND model failed to properly incorporate the damage of carbon emission-produced rising temperatures to the agriculture sector. Rather, the model treats agriculture as a carbon beneficiary. "The very early studies tended to show that the effects of warmer temperatures were not very severe and would be more than compensated by the beneficial effects of higher carbon dioxide concentrations," said Frances Moore, assistant professor of environmental science and policy at UC Davis and lead author of the study. The FUND model wrongly showed that carbon's damage to agriculture was -$2.70—that is to say, each ton of carbon gave an overall boost of $2.70 to the agriculture sector. This latest research refutes that. The new data shows carbon damages the economy by $8.50 per ton.
The Climate Crisis? It’s Capitalism, Stupid - NYT - Even casual readers of the news know that the earth is probably going to look very different in 2100, and not in a good way.A recent Times opinion piece included this quotation from the paleoclimatologist Lee Kump: “The rate at which we’re injecting CO2 into the atmosphere today, according to our best estimates, is 10 times faster than it was during the End-Permian.” The End-Permian is a pre-dinosaurs era of mass extinction that killed 90 percent of the life in the ocean and 75 percent of it on land. It is also called the Great Dying. However, the cause of the disaster that, by all indications, we are already living through should be clearer. It is not the result of the failure of individuals to adopt the moralizing strictures of “green” consciousness, and it is a sign of just how far we have to go that some still believe reusable shopping bags and composting (perfectly fine in their own right) are ways out of this mess. It is also not the deceit of specific immoral companies that is to blame: We like to pick out Volkswagen’s diesel scandal, but it is only one of many carmakers that “deliberately exploit lax emissions tests.” Nor does the onus fall on the foundering of Social Democratic reforms and international cooperation: Even before the United States backed out of the Paris Accord, we were well on our way to a 7.2 degrees Fahrenheit temperature rise by 2100, “a temperature that at times in the past has meant no ice at either pole.” The real culprit of the climate crisis is not any particular form of consumption, production or regulation but rather the very way in which we globally produce, which is for profit rather than for sustainability. So long as this order is in place, the crisis will continue and, given its progressive nature, worsen. This is a hard fact to confront. But averting our eyes from a seemingly intractable problem does not make it any less a problem. It should be stated plainly: It’s capitalism that is at fault. As an increasing number of environmental groups are emphasizing, it’s systemic change or bust. From a political standpoint, something interesting has occurred here: Climate change has made anticapitalist struggle, for the first time in history, a non-class-based issue.
Senate bill would cut EPA funding by $150M | TheHill: The Senate Appropriations Committee on Monday introduced an Interior Department and environment spending bill that would cut nearly $150 million in funding for the Environmental Protection Agency (EPA) next year. The legislation provides $32.6 billion in funding for the Interior Department, EPA and other agencies. The total is larger than a similar bill the House passed in September, slightly smaller than current funding levels and well above President Trump’s proposal for the agencies. The EPA would see the biggest cuts. It would receive about $7.9 billion in annual funding, which is $149.5 million less than current levels. The House voted to cut funding for the EPA by $528 million, and Trump proposed slashing the agency's budget by $3.6 billion. The Interior Department would receive $12.17 billion under the bill. The legislation would increase the National Park Service budget slightly and includes new funding for a construction backlog facing the service. Interior recently proposed raising fees at several of the country’s most popular national parks in order to pay for construction work. Other departments covered by the bill — including the Fish and Wildlife Service, U.S. Geological Survey, Office of Surface Mining and the Forest Service — face either small cuts or level funding. Senators also propose spending $3.6 billion on wildfire suppression.
Koch-Funded Group Prods Trump’s EPA to Say Climate Change Not a Risk - A lobbying group funded by Koch Industries Inc. and coal giant Peabody Energy Corp. is moving to prod the Environmental Protection Agency to rescind its earlier determination that climate change is a risk to human health and welfare.The American Legislative Exchange Council will consider a resolution that would be offered to state legislatures to adopt as a way of pressuring the Trump administration to uproot his predecessor’s efforts to address climate change, attacking the very science that shows temperatures rising and storms increasing. The EPA’s 2009 endangerment finding established that climate change warrants regulation. "So long as the endangerment finding remains in place, efforts to roll back climate regulations will likely fail," according to the draft document, which is on the group’s website and may be voted on in an ALEC meeting next month. "Research has shown that recent changes in temperatures, sea level rise, and the frequency of extreme weather events are far from unusual in the historic and geophysical record."That position risks opening a new rift in the group, which has faced defections from corporate titans such as Ford Motor Co. and BP Plc. for its efforts against renewable energy and carbon regulation. ALEC is a group of free-market organizations, corporate representatives and state lawmakers that adopts model bills which lawmakers then introduce in state legislatures nationwide. ALEC has denied that it rejects mainstream climate science, but it has downplayed the risks. Companies such as Exxon Mobil Corp., which says it accounts for climate change in its investment decisions, have also sponsored the organization, according to the Center for Media and Democracy.
Do the opposite thing you did 18 months ago”: EPA staffers on the agency in the Trump era -- Environmental Protection Agency Administrator Scott Pruitt doesn’t hide his contempt for how the agency has been run, but he does profess to care about one of its key programs: Superfund, which oversees the cleanup of the nation’s worst toxic waste sites. Pruitt — Oklahoma’s attorney general before he joined the EPA — tapped one of his former donors, banker Albert “Kell” Kelly, to find ways to accelerate and improve Superfund cleanups. Kelly started by consulting career staff members — often knowledgeable officials who work at the agency regardless of who holds the White House. But then Kelly closed off the process, conferring with Pruitt to produce a final plan that altered or excluded many of the staffers’ suggestions. What happened with Superfund is hardly an anomaly. Today’s EPA is wracked with internal conflict and industry influence and is struggling to fulfill its mission, according to more than two dozen current and former agency employees. A few dozen political appointees brought in under the Trump administration are driving policy. At least 16 of the 45 appointees worked for industries such as oil, coal and chemicals, as this CIP graphic shows. Four of these people — and another 21 — worked for, or donated to, politicians who have questioned established climate science, such as Pruitt and Sen. James Inhofe (R-OK). Career staff members — lawyers, scientists, analysts — are largely being frozen out of decision-making, current and former agency employees say. These staffers rarely get face time with Pruitt and frequently receive top-down orders from political appointees with little room for debate. They must sometimes force their way into conversations about subjects in which they have expertise. “I think it’s the fact that we’re not following regular procedures; we’re not sure of what the legal justification is for some of the things they’re asking us to do. We’re just kind of being told, ‘Do the opposite thing you did 18 months ago.’ That’s hard to swallow.”
The Heartland Institute is no longer fringe - TreeHugger used to have fun with the Heartland Institute with their over-the-top campaigns denying climate change. Today, the Heartland Institute is on a roll. And where most of us might think that the current administration in Washington has done huge damage to the environment, the Heartland Institute thinks they are just getting started. Juliet Eilperin and Brady Davis of the Washington Post got a hold of their Energy Freedom Scorecard that shows what they have achieved, but what is still on their to-do list, and it is really scary. In fact, it is positively Orwellian. Renewable energy harms the environment because it is less efficient and more land intensive than fossil fuels. Solar energy destroys jobs and harms the environment. PM 2.5 particulates have no detrimental health effects. Oh, and fuel economy standards "result in the deaths of thousands of car and truck passengers every year." The fact that instead of being happy about it, they are complaining that change isn't happening fast enough, is even scarier. And as proof that they are not fringe anymore, the EPA head Scott Pruitt phoned in his message: It's too hard to watch, really. This is the head of the EPA talking: “So, I want to say to you at the Heartland Institute, thanks for what you’re doing to advance energy. Thank you for what you’re doing to advance natural resources. After that wonderful introduction, they all got down to work. According to the Post,There were sessions on the “future of coal,” “the cost of excessive regulation” and the “benefits of ending the war on fossil fuels.” Speakers assailed most climate scientists as alarmists, extolled the benefits of fossil fuels and blasted environmental activists, whom they equated with government overreach. “People don’t trust the environmental left. They know they’re crazy,” one speaker said.The Post article ends with a classic, that nobody has had the nerve to say in public for decade, and now could well be government policy: “We are greening the planet with carbon dioxide,” he [a speaker at the conference] said, and cutting back on fossil fuels would be a “disaster. … There is no downside to carbon dioxide. It is the breath of life.”
Senate confirms Trump’s mine safety pick | TheHill: The Senate voted Wednesday to confirm David Zatezalo, a former coal mining executive who faced harsh criticism over his company’s safety record, to lead the federal government’s mine safety agency. The vote was 52 to 46, with all Republicans in favor and all Democrats opposed. Once he’s sworn in to lead the Labor Department’s Mine Safety and Health Administration (MSHA), Zatezalo will be responsible for safety across all of the nation’s mines, including those for coal, metals and other substances. Zatezalo, a West Virginia native, retired in 2014 as head of Rhino Resources, a coal mining company. Rhino had numerous run-ins with MSHA enforces under his leadership, including two “pattern of violations” letters, a rare warning from regulators.
Transportation is the Biggest Source of U.S. Emissions -- The busiest travel day of the year brings a renewed focus on transportation, and for the first time since the 1970s, U.S. carbon dioxide emissions from transportation have eclipsed emissions from electricity generation as the top source of greenhouse gases. The change comes as U.S. electricity generation relies less on coal and more on renewables and natural gas (a less carbon-intensive fossil fuel). Transportation emissions have also declined from a peak in 2008 due to steadily improving fuel economies, although there has been a small uptick recently as a result of a drop in gas prices. The projected growth in electric vehicles suggests decreases in CO2 transportation emissions are on the horizon. Even when accounting for how electricity is generated, an electric vehicle emits less carbon dioxide than a comparable gasoline car in a majority of U.S. states. A typical gasoline-powered passenger car emits 20 pounds of carbon dioxide for each gallon of gas burned, or about a pound for each mile traveled, and both electric and hybrid vehicles can cut back on those emissions. A recent Climate Central report, Climate Friendly Cars, shows which cars are the most climate friendly in each state. The rankings are based on the type of engine and the method in which electricity is generated in each state. From 2011 to 2016, the number of plug-in electric vehicles sold each year in the U.S. increased by a factor of eight. Projections for electric car sales vary among organizations, but all indicate a substantial increase in plug-in electric car sales in the coming years.
The Hidden Cost Of Electric Cars - EU electric car producers got a fresh lease on life last week as the European Commission proposed caps on vehicle emissions as a way to fight against global warming—and to help close a technological gap with China. The Asian nation is the world’s biggest supporter and producer of electric vehicles, and this year it overtook the U.S. in terms of the number of EVs on the road, with new registrations increasing 70 percent year-on-year to around 350,000 units, while Europe saw sales rise by only 7 percent.In an effort to catch up with Beijing in a rapidly expanding market, EU lawmakers threatened financial penalties on carmakers that fail to cut tailpipe emissions by 30 percent between 2020 and 2030. On the face of it, this might sound like a smart move, and one supported by international institutions. The International Energy Agency chimed in earlier this year, showing that EV sales have grown by 60 percent in 2016, surpassing the 2 million vehicle mark. The issue with this policy shift, however, is that EVs have yet to catch up with their reputation. Although they might have been promoted as ‘zero emission,’ analysing the entire manufacturing process—not simply the fumes they emit—shows they have the capacity to create a far greater environmental impact than assumed. Comparing the carbon footprint of the electric Tesla Model S P100D saloon and the conventional Mitsubishi Mirage, as researchers at MIT have done, illustrates the dilemma facing regulators. According to their data, a Tesla driven in the U.S. Midwest produces 226g of carbon dioxide per kilometre over its lifecycle, far less than the 385g emitted by the 7-series BMW. Yet the humble, combustion-engine Mirage produces even less CO2, at 192g. Such a comparison shows that focusing on tailpipe emissions risks missing the bigger picture. And no country demonstrates this conundrum better than China, where the government has been aggressively promoting EVs as a key weapon in the fight against pollution and as a cornerstone of a new industrial policy known as ‘Made in China 2025.’
LME probes cobalt supplies after complaints over child labour links - The African Union (AU) has expressed outrage after footage emerged appearing to show sub-Saharan migrants being sold at slave markets in Libya. On the video, released by CNN this week, young men are seen being auctioned off as farm workers.The AU chairman, President Alpha Conde of Guinea, demanded prosecutions over a "despicable" trade "from another era".Migrants trying to reach Europe have spoken of being held by smugglers and forced to work for little or no money.The footage released by CNN appears to show youths from Niger and other sub-Saharan countries being sold to buyers for about $400 (£300) at undisclosed locations in Libya."These modern slavery practices must end and the African Union will use all the tools at its disposal," Mr Conde said. Libya has opened an investigation into the practice, CNN reported on Friday. The IOM's chief of mission for Libya, Othman Belbeisi, told the BBC at the time that migrants were priced according to their abilities. "Apparently they don't have money and their families cannot pay the ransom, so they are being sold to get at least a minimum benefit from that," he said. "The price is definitely different depending on your qualifications, for example if you can do painting or tiles or some specialised work then the price gets higher."
Bitcoin Mining Now Consuming More Electricity Than 159 Countries Including Ireland & Most Countries In Africa -- Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst. However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins. According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh. That’s the equivalent of 0.13% of total global electricity consumption. While that may not sound like a lot, it means Bitcoin mining is now using more electricity than 159 individual countries (as you can see from the map above). More than Ireland or Nigeria. If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption. Here are a few other interesting facts about Bitcoin mining and electricity consumption:
- In the past month alone, Bitcoin mining electricity consumption is estimated to have increased by 29.98%
- If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.
- Estimated annualised global mining revenues: $7.2 billion USD (£5.4 billion)
- Estimated global mining costs: $1.5 billion USD (£1.1 billion)
- Number of Americans who could be powered by bitcoin mining: 2.4 million (more than the population of Houston)
- Number of Britons who could be powered by bitcoin mining: 6.1 million (more than the population of Birmingham, Leeds, Sheffield, Manchester, Bradford, Liverpool, Bristol, Croydon, Coventry, Leicester & Nottingham combined) Or Scotland, Wales or Northern Ireland.
- Bitcoin Mining consumes more electricity than 12 US states (Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming)
Will Bitcoin Mining Consume All The World's Current Electricity Production By Feb 2020? -- Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst. However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins. How Does Bitcoin Mining Consume Electricity? At a very basic level Bitcoin mining requires expensive and power hungry computer hardware. As the the IEEE explains: Mining power is high and getting higher, thanks to a computational arms race. Recall that the required number of zeros at the beginning of a hash is tweaked biweekly to adjust the difficulty of creating a block—and more zeros means more difficulty. The Bitcoin algorithm adds these zeros in order to keep the rate at which blocks are added constant, at one new block every 10 minutes. The idea is to compensate for the mining hardware becoming more and more powerful. When the hashing is harder, it takes more computations to create a block and thus more effort to earn new bitcoins, which are then added to circulation. According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh. The Bitcoin Energy Consumption Index estimates consumption has increased by 29.98%over the past month. If that growth rate were to continue, and countries did not add any new power generating capacity, Bitcoin mining would:
- Be greater than UK electricity consumption by October 2018 (309 TWh)
- Be greater than US electricity consumption by July 2019 (3,913 TWh)
- Consume all the world’s electricity by February 2020. (21,776 TWh)
PJM price formation proposal would dramatically change how prices are set in the RTO - The PJM Interconnection on Wednesday released a proposal that would raise prices across the RTO in an effort to provide incentives to “inflexible” generating units such as “coal, nuclear and large gas units.” PJM’s new price formation proposal goes beyond anything the RTO has attempted in the past. It also takes aim at issues raised in the Energy Department's notice of proposed rulemaking (NOPR) now before FERC that is examining ways to ensure resiliency by finding ways to compensate baseload resources. PJM’s price formation proposal is aimed at allowing both flexible and flexible generating units to set prices as a way of more accurately reflecting the true costs of serving load.The proposal is, in part, designed to offset the continuing penetration of zero marginal cost resources, declining natural gas prices, greater generator efficiency and reduced generator margins resulting from low energy prices have resulted in “a generation mix that is differentiated less by cost and more by physical operational attributes.”To address that, PJM wants to change its rules to provide greater incentives to inflexible units that are not able to ramp up or down quickly to respond to market signals quickly and often bid into the market as price takers.The proposal is “resource agnostic” and “neutral” with regard to fuel types, Stu Bresler, PJM’s senior vice president for operations and markets, told reporters on a call to discuss the proposal. The proposal says that inflexible units include, “any fuel type, including coal, nuclear and large gas units that are inflexible based on either their technology or the way they purchase natural gas.” To provide those incentives, PJM has proposed splitting its energy market into two parts, a “dispatch run” and a “pricing run.” In the proposal, PJM calls the LMP methodology it has been using for these past several years “restricted LMP.” PJM now wants to introduce an “extended LMP.”
Grid-Scale Storage of Renewable Energy: The Impossible Dream -- The utopian ambition for variable renewable energy is to convert it into uniform firm capacity using energy storage. Here we present an analysis of actual UK wind and solar generation for the whole of 2016 at 30 minute resolution and calculate the grid-scale storage requirement. In order to deliver 4.6 GW uniform and firm RE supply throughout the year, from 26 GW of installed capacity, requires 1.8 TWh of storage. We show that this is both thermodynamically and economically implausible to implement with current technology. At present, grid-scale wind and solar generation all over the world is being accommodated into power grids parasitically mainly through combined cycle gas turbines (CCGTs) ramping up and down to balance variable renewable energy (RE) supply. To become truly carbon free 100% RE, two strategies have been pursued. The first is to greatly over-dimension supply, e.g. Lappeenranta, [ref 1] and the second is to store surpluses for use at times of deficit e.g. Blakers et al, [ref 2]. This post focusses on the latter grid-scale storage option. The Blakers et al study has been the subject of recent discussion on this blog where Roger Andrews scrutinised the 100% RE model for Australia that relied heavily on pumped hydro energy storage (PHES) to smooth the fluctuations in combined wind+solar supply. Both Roger Andrews and guest contributor Roger Young concluded that Blaker’s et al seriously underestimated the storage requirement and storage cost by up to a factor of 10. Roger Andrews’ analysis was based on actual Australian grid data, but at present we only have 3 months of data available. Through the Energy Matters UK Grid Graphed initiative, we have already compiled wind + solar generation for the UK for 5 years at 30 minute resolution (2012 to 2016). I therefore decided to run a storage model for the whole of 2016 in order to constrain the scale of storage required to convert variable wind+solar to uniform firm supply over this longer time period. This analysis is confined to variable wind + solar production in the UK. UK hydro electric power seldom produces >1000 MW, and normally produces as base load, has become largely irrelevant to UK RE production statistics. We do not consider burning biomass for grid-scale power supply to be either CO2 neutral or sustainable, and so it too is excluded. The installed capacities of wind and solar in the UK for 2015 and 2016 as reported by the UK government (DUKES table 6.4) are summarised in Figure 1.
Tesla Finishes Building World's Largest Battery Month and a Half Ahead of Schedule –= Elon Musk has won an audacious bet he made back in March to build a battery system for South Australia in “100 days from contract signature or it is free." The 100-megawatt Powerpack system is the world's largest, or three times bigger than Tesla and Edison's battery at Mira Loma in Ontario, California. The Tesla CEO was responding to a challenge from Australian IT billionaire Mike Cannon-Brookes to help fix the Australian state's electricity woes. Losing the bet would have cost Musk " probably $50 million or more ." As it happens, when the grid connection deal was finally signed on Sept. 29—kick-staring the 100-day clock—Tesla was already halfway finished with installation. So if you want to be technical, you could say that the project was finished a month and a half before the contract's deadline. The company originally estimated completion by December 2017. The lithium-ion battery storage facility will charge using renewable energy from Neoen's Hornsdale wind farm near Jamestown, South Australia and deliver electricity during peak hours. According to Business Insider , when fully charged, the battery should hold enough power for 8,000 homes for 24 hours, or more than 30,000 houses for an hour during a blackout.
Global Energy Storage to Double 6 Times by 2030 -- Bloomberg New Energy Finance released a report Tuesday that forecasts the global energy storage market will “double six times” from now to 2030, from a meager starting point of less than 5 gigawatt-hours last year, to more than 300 gigawatt-hours and 125 gigawatts of capacity by the end of the next decade. An estimated $103 billion will be invested in energy storage over that time period. The trajectory for energy storage mirrors the market expansion that solar went through from 2000 to 2015, when the share of solar PV as a percentage of total generation doubled seven times. This rapid global growth rate tracks well with the U.S. energy storage market forecast from GTM Research, which projects a twelvefold growth in the U.S. alone between 2016 and 2022, to reach 7.2 gigawatt-hours, or 2.6 gigawatts, of capacity. This growth is going to be driven by both cost reductions for batteries and associated systems, and a rising need for more gigawatts of flexibility to manage the ups and downs of an increasingly wind- and solar-powered grid, according to BNEF energy storage analyst and lead report author Yayoi Sekine. “With so much investment going into battery technology, falling costs and with significant addition of wind and solar capacity in all markets, energy storage will play a crucial part in the energy transformation," she said.
Loggers and truckers sue Xcel Energy over proposed shutdowns of plants - A group of loggers in Minnesota is using an environmental law to sue Xcel Energy about three biomass plants in the state that burn wood waste or turkey manure to produce electricity. The Associated Contract Loggers & Truckers of Minnesota filed the lawsuit last week in state court to stop Xcel from buying and shutting down one plant and ending contracts with two others. The move, the group said, would eliminate 100 direct jobs and hundreds of indirect jobs. "In addition to devastating many hardworking families and businesses across greater Minnesota who depend on these facilities, Xcel's plan would also be terrible for the environment," said Scott Dane, the association's executive director. Xcel said electricity from the plants is far too expensive, and contracts should be ended to save ratepayers money. But Clean Energy Economy Minnesota, a nonprofit group that works with clean-energy companies across the state and is not part of the lawsuit, said that the three plants are critically important markets for biomass and represent millions of dollars in capital investments. "Any decision that is made prior to understanding the full economic impact this would have on forest management, supply chain participants and local communities, in particular, would be shortsighted," said Executive Director Gregg Mast. The turkey manure incinerator is located in Benson in western Minnesota, and the two wood-burning plants are in Virginia and Hibbing, owned by the Laurentian Energy Authority.
Two months after Hurricane Maria, Puerto Rico struggles to regain electricity and thousands flee the island - The lights remain off in bustling cities and in small rural villages. Gas generators, the only alternative to the downed power lines that seem to be everywhere, continuously hum outside hospitals and bodegas. When night falls, it’s the glow of car lights, not streetlights, that helps break through the darkness. Two months after Hurricane Maria tore through Puerto Rico, much of the U.S. territory still lacks electricity. Even in areas with power, such as the capital city of San Juan, residents must deal with daily blackouts. A lack of reliable electricity coupled with massive destruction to roads and bridges have led hundreds of thousands to flee Puerto Rico for the mainland U.S., and some economists predict decades of stagnation for an island that already was struggling financially. In recent days, Puerto Rico Gov. Ricardo Rossello announced that the island, through the work of Puerto Rico's Electric Power Authority, had restored power to 50% of the commonwealth. Rossello has said the island will reach 80% generation by the end of November and 95% by mid-December — goals that some here have called unrealistic. By contrast, the U.S. Army Corps of Engineers estimates that 75% of the island will regain power by the end of January. Rossello’s bold proclamations came before the resignation Friday of the power agency’s director, Ricardo Ramos, amid a flurry of controversy over a $300-million contract awarded to Whitefish Energy Holdings to rebuild the island’s power grid. Federal authorities have been investigating the contract awarded to the small company, which is headquartered in Interior Secretary Ryan Zinke's Montana hometown. The deal, signed shortly before Maria hit, was canceled last month as it faced scrutiny. Rossello told reporters Ramos had become a “distraction” as the commonwealth scrambles to rebuild an electrical grid that was almost eliminated by the storm.
Whitefish halts power work in Puerto Rico over $83M owed - ABC News: Whitefish Energy Holdings said late Monday that it was halting work to help restore power in Puerto Rico because the U.S. territory's government has not paid crews as part of a contract that led to accusations of overcharging and incompetence and contributed to the resignation of the power company director. The Montana-based company said in a statement that invoices for work done in October are outstanding and that it can no longer keep working. The Associated Press obtained a letter dated Nov. 19 and signed by Whitefish CEO Andy Techmanski saying that Puerto Rico's government owes Whitefish more than $83 million and that the company would suspend work on Monday if it wasn't paid. Whitefish said in the letter that the lack of payments is a breach of the $300 million contract that the administration of Gov. Ricardo Rossello cancelled last month. Even though the contract had been cancelled, both sides agreed Whitefish would complete its current projects and remain in Puerto Rico until Nov. 30. "There is no basis for PREPA to withhold payments from Whitefish Energy," the letter said, referring to the Puerto Rico Electric Power Authority. "We have met the terms of the contract — including completing difficult work on time and under challenging conditions." The company said Techmanski was not immediately available for comment. Whitefish also said Monday that Florida-based utility companies working in Puerto Rico were pulling out ahead of time.
Whitefish Energy won’t finish its work in Puerto Rico until it’s paid $83 million - After Puerto Rico canceled its controversial contract with the small Montana company last month, Whitefish had agreed to continue repairs on the island’s devastated grid until Nov. 30. But on Monday, the company paused work 10 days early. According to Whitefish, PREPA, Puerto Rico’s government-owned utility, owed it $83 million. “It may have not been the best business decision coming to work for a bankrupt island,” Whitefish CEO Andy Techmanski told CNN. PREPA was $9 billion in debt before Hurricane Maria. Whitefish claims that some of its contractors and subcontractors are going unpaid due to PREPA’s delayed payments. Meanwhile, PREPA says it paused payment to Whitefish on Nov. 16 at the request of a subcontractor claiming Whitefish owed it money. Sounds like a chicken-and-egg situation? Congress and the FBI are currently investigating the $300 million Whitefish contract, which drew scrutiny for its anti-auditing measure and unusually high fees, among other things. A congressional hearing last week found that PREPA ignored lawyers’ advice in signing the deal in the first place. Soon after the hearing, PREPA’s CEO resigned. Puerto Rico could use an end to the Whitefish drama — and the power outages. Two months after Hurricane Maria, less than half of the power has been restored and entire communities are still living without electricity.
The Pentagon’s hurricane relief effort in Puerto Rico is nearly over, but these missions remain -- The majority of active-duty U.S. troops involved in hurricane relief in Puerto Rico will return home this week, but power restoration and a few other missions are ongoing, said a U.S. general overseeing the effort. Army Lt. Gen. Jeffrey S. Buchanan said in an interview Tuesday that charter flights will take troops home to Fort Bragg in North Carolina, Fort Benning in Georgia, Joint Base San Antonio in Texas and Joint Base Lewis-McChord in Washington state on Wednesday. As of Monday, there were about 2,200 active-duty and reserve troops, but many are Puerto Ricans who are part of reserve units based on the island, he said. Buchanan said Tuesday that he had “personal regrets” that the military response was not faster, but he said it was difficult to understand the scope of the disaster because communications on the island were destroyed. The military units initially there, he said, “didn’t have a feel for how badly all of the island was impacted.” Aside from members of the National Guard, the remaining U.S. troops on the island will concentrate on power restoration, running Doppler weather radar sites and manning headquarters in San Juan, Buchanan said. A unit of several dozen Army reservists who work as linemen — Delta Company, 249th Engineer Battalion — are involved in efforts to run new power lines on the island. The storm destroyed nearly all of Puerto Rico’s power grid, and about half of it is still down.A Navy hospital ship dispatched to Puerto Rico, the USNS Comfort, returned to Virginia on Monday. No combat ships are involved in hurricane relief, but a 951-foot cargo ship, the USNS Brittin, delivered supplies Monday to the port of Ponce, including electrical poles and more generators, Buchanan said. The ship will be loaded in Ponce with equipment no longer being used in the relief mission, including trucks and helicopters.The Coast Guard, initially involved heavily in Puerto Rico relief, also has seen their role wane as immediate crises have disappeared. The sea service is no longer carrying out search-and-rescue missions and has sent its cutters elsewhere. Lt. Cmdr. Ryan Kelley, a spokesman, said Tuesday that the service is still involved in part by assessing the condition of sunken vessels off the coast, both for how they may affect the environment and handled as salvage.
Energy Majors Hit Hard By Climate Regulations - The first news came out of Siemens, a Munich-based industrial conglomerate somewhat akin to the troubled General Electric. After last week’s disastrous news from GE—a 50 percent dividend cut and plans for a complete corporate makeover—we shouldn’t have been surprised. GE’s difficulties weren’t just due to poor business conditions. There has also been too much financial engineering and a history of overpaying for acquisitions. But Siemens made a purely business announcement: It was laying off 6,900 workers due to weak demand for gas turbine electric generators. The industry has the capacity to produce 400 big units per year worldwide, but is producing only 100, and Siemens doesn’t expect demand to bounce back. Understand that the gas turbine is the most efficient and economic fossil fuel generator. And replacement of old coal-fired generation by gas turbines made a major contribution to carbon emission reductions.So, what’s the problem? First, growth in electric sales volume—particularly in the U.S. and Europe—has been tailing off. As a result, the industry needs fewer units to keep up with declining demand growth. Second, citing environmental objections, many equipment buyers don’t want a fossil-fueled unit no matter how efficient. Siemens, recognizing the latter preference, has made substantial investments in renewable energy. Second, the Norwegian state sovereign wealth fund, the biggest in the world, has decided to exit its oil investments. There is, of course, no small irony in this development because Norway built up the fund with revenue from the country’s oil fields. Nor in Norway closing its oil fields to help mitigate global warming. The third item was unveiled at the UN climate conference in Bonn, Germany. The UK and Canada announced a pledge to end coal-fired power generation by 2030. France, Italy, Mexico, the Netherlands, Portugal, New Zealand, Washington State, Ontario and Alberta have pledged support. This withdrawal from coal raises a technology and manufacturing question. There are only a few worldwide electrical equipment manufacturers, like GE and Siemens discussed above. They build products for worldwide markets, not niche or isolated markets.
Great Barrier Reef pitted against coal jobs in Australia vote - The fate of Adani Group’s A$16.5 billion ($12.4 billion) Australian coal mine hinges on weekend elections in Queensland state, as voters weigh the promise of new jobs against a potential environmental threat to the Great Barrier Reef.The Labor government has vowed to reject A$900 million in federal funding for a new rail link, which is needed to carry coal to the coast for export. The opposition Liberal National Party, vying to win office in Saturday’s ballot, says that threatens the viability of Indian billionaire Gautam Adani’s project, and with it the economic future of the resource-rich state. As the world grapples with the fossil fuel’s role in the future energy mix, the proposed Carmichael mine has become a defining issue in the election. Opinion polls indicate the result is too close to call.“This is the biggest specific issue in the election and the way voters perceive the mine will swing a lot of votes,” said John Quiggin, an economics lecturer at the University of Queensland. State Premier Annastacia Palaszczuk’s vow to block funding means Labor is “now seen in the anti-Adani camp,” he said. Supporters say the mine will open up the Galilee Basin, a coal-rich region bigger than the U.K., and create thousands of new jobs in the struggling state. Queensland, hit hard by the end of a decade-long mining-investment boom, has the nation’s second-highest unemployment rate. Opponents say Australia’s largest coal project would increase carbon pollution, exacerbating coral bleaching that’s already damaged large swathes of the world-famous reef.
Ontario to refurbish nuclear reactors - A new report by Ontario’s Financial Accountability Office (FAO) has confirmed the province’s plan to refurbish ten nuclear reactors and extend the life of six reactors. An Assessment of the Financial Risks of the Nuclear Refurbishment Plan looks at how financial risk would be allocated among ratepayers, the province, Ontario Power Generation (OPG) and Bruce Power. The FAO estimates the plan will result in nuclear generation supplying a “significant proportion” of Ontario’s electricity demand from 2016 to 2064 at an average price of CAD80.7 ($63.3) per MWh, in 2017 Canadian dollars. “There are currently no alternative generation portfolios that could provide the same supply of low-emissions baseload electricity generation at a comparable price to the Nuclear Refurbishment Plan,” the report finds.
China’s “Hualong 1” passes the first stage of the UK GDA process - With little fanfare last week, the Chinese designed HPR1000 (previously Hualong-1), pressurised water reactor, cleared the first of four stages in the General Design Assessment (GDA) administered by the UK Office of Nuclear Regulation (ONR). China General Nuclear (CGN) proposes to build 2 reactors of this design at the Bradwell site in England, in partnership with French state-owned EDF that currently operates all UK commercial reactors. As almost all readers of the blog will be aware, a team of EdF and China General Nuclear (CGN) have proposed the construction of a Chinese designed nuclear station at Bradwell, in Essex. On Thursday of this week, the UK Office of Nuclear Regulation announced that the design proposed for the station -the “HPR1000”, originally known as the “Hualong-1” has successfully completed the first, preparatory stage of the Generic Design Approval (GDA) process. This appears to have been completed on time, or perhaps a few weeks early.While we shouldn’t over-state the importance of this particular transition – GDA is a four stage process, in which stages 2 & 3 are where the great majority of the detailed evaluation of the design from a safety perspective is undertaken – it is important in that it’s the first point at which the developers have to publish reasonably detailed data on the design. That data is available here. This piece is intended to give an overview of the design, highlighted particular strengths and weaknesses that may affect the GDA outcome, and giving a comparison against the virtues and vices of the other contenders for UK build.
Russia Confirms Toxic Cloud Of "Extremely High" Radiation; Source Remains A Mystery -- One month after a mysterious radiation cloud was observed over Europe, whose source remained unknown last week speculation emerged that it may have been the result of a "nuclear accident" in Russia or Kazakhstan, on Tuesday Russian authorities on Tuesday confirmed the previous reports of a spike in radioactivity in the air over the Ural Mountains. In a statement, the Russian Meteorological Service said that it recorded the release of Ruthenium-106 in the southern Urals in late September and classified it as "extremely high contamination." Earlier this month, France's nuclear safety agency earlier this month said that it recorded a spike in radioactivity, and said that "the most plausible zone of release" of this radioactive material "lies between the Volga and the Urals" from a suspected accident involving nuclear fuel or the production of radioactive material. The agency noted, however, that it is impossible to determine the exact point of release given the available data. Luckily, it said the release of the isotope Ruthenium-106 posed no health or environmental risks to European countries. At the time, Russia's state-controlled Rosatom corporation - the same company implicated in the Uranium One scandal - said in a statement that there had been no radiation leak from its facilities. That changed when the Russian meteorological service (Rosgidromet) reported that it had detected record levels of radiation in the villages located in Russia's Ural region adjacent to Rosatom's Mayak plant for spent nuclear fuel. Some calculated that the radiation exposure levels were up to 1,000x higher than the normal rate.
Russian Anger Builds In Town Next To Leaking Nuclear Plant --Earlier this week, we noted that Russia’s state-owned nuclear energy agency had taken baby steps toward recognizing the dangers posed by an aging nuclear storage facility in Chelyabinsk, a town located on Russia’s southern border with Kazakhstan, when it officially acknowledged the extraordinary high levels of radiation in the area. Though the government refused to admit culpability, as many believe the radiation leaked out of the Mayak nuclear power plant, which has a history of serious nuclear accidents. Still, a month after the mysterious radiation cloud was first observed over Europe, Russian authorities have said little other than admitting the spike in radiation – a troubling trend that’s making some locals nervous and angry.As the Financial Times points out, 76 years after radiation first began seeping from Mayak into the surrounding rivers, lakes and atmosphere, Russian authorities admitted that the nearby town of Argayash was at the center of a radiation cloud containing “exceptionally high” levels of radioactive isotope ruthenium-106, which spread so far west that it reached France.But residents of the town are demanding more information from authorities, whom they blame for putting the health of locals at risk.The FT described Argayash is a cynical, mistrustful town. Apparently, decades of being lied to by the government about being down the road from a leaking nuclear plant does that to a place. So too does watching generations of people dying of radiation-related ailments while officials assure them nothing is amiss.
Six Years After Fukushima, Robots Finally Find Reactors’ Melted Uranium Fuel — Four engineers hunched before a bank of monitors, one holding what looked like a game controller. They had spent a month training for what they were about to do: pilot a small robot into the contaminated heart of the ruined Fukushima nuclear plant. Earlier robots had failed, getting caught on debris or suffering circuit malfunctions from excess radiation. But the newer version, called the Mini-Manbo, or “little sunfish,” was made of radiation-hardened materials with a sensor to help it avoid dangerous hot spots in the plant’s flooded reactor buildings. The size of a shoe box, the Manbo used tiny propellers to hover and glide through water in a manner similar to an aerial drone. After three days of carefully navigating through a shattered reactor building, the Manbo finally reached the heavily damaged Unit 3 reactor. There, the robot beamed back video of a gaping hole at the bottom of the reactor and, on the floor beneath it, clumps of what looked like solidified lava: the first images ever taken of the plant’s melted uranium fuel. The fate of the fuel had been one of the most enduring mysteries of the catastrophe, which occurred on March 11, 2011, when an earthquake and 50-foot tsunami knocked out vital cooling systems here at the plant. Left to overheat, three of the six reactors melted down. Their uranium fuel rods liquefied like candle wax, dripping to the bottom of the reactor vessels in a molten mass hot enough to burn through the steel walls and even penetrate the concrete floors below.
GE faces lawsuit over role in Fukushima nuclear disaster - -- A group of Japanese businesses and doctors sued General Electric Co. in Boston federal court on Friday, claiming the industrial giant was reckless and negligent in its design of the reactors and related systems at the core of the Fukushima nuclear disaster in 2011. The plaintiffs claim Boston-based GE knowingly used a reactor design at the Fukushima Daiichi Nuclear Power Plant that would fail to protect against the possible threat of earthquakes and tsunamis, a natural risk in that area. The plaintiffs are seeking class-action status for businesses in the area that suffered economic damage as a result of the disaster, which displaced as many as 150,000 people. Among other things, the lawsuit claims GE and its partners lowered a protective cliff by more than 60 feet, placing the plant and all six of its GE-designed reactors closer to the Pacific Ocean and in the path of the severe tsunami that struck on March 11, 2011. After the tsunami hit, three GE-designed reactors suffered from “entirely foreseeable flooding and resulting nuclear meltdowns,” causing the release of radioactive matter into the area surrounding the plant, according to the lawsuit. The plaintiffs are essentially blaming GE for defective reactor design as well as for not putting in place enough safeguards to prevent the spread of radiation once the Fukushima plant was breached.
Doomsday Scenarios: UK's Hair-Raising Admissions About Prospects Of Nuclear War (Or Accident) -- The British Ministry of Defence (MoD) has published several reports over the last few years. They discuss geopolitics and related themes, one of which is the likelihood of nuclear war or accident, including what it means for long-term survival.Experts say that even a so-called limited exchange or accident would be catastrophic. For example, a recent paper in Earth’s Future calculates that the most optimistic scenario of a “small,” regional nuclear war between India and Pakistan would wipe out millions of people through famine and result in a nuclear winter. An exchange between the USA and Russia, for instance, could be even bigger and more devastating America’s ongoing “Asia Pivot” encourages China to build up its arsenals. Proxy wars in Syria and Ukraine with Russia and continuing tensions with North Korea also increase the risk of brinkmanship and miscalculation between those nuclear powers. By training rebels in Syria and armed forces in Ukraine, the UK is particularly responsible for contributing to escalating tensions. Britain remains one of the USA’s closest allies and enjoys a “special relationship” with the US. It serves as a proxy for US Trident nuclear weapons systems. The UK’s Vanguard submarines host US-supplied Trident II D5 Intercontinental Ballistic Missiles. In 2016, a dummy ICBM was launched by the UK at a test target off the coast of Africa. It self-destructed and headed for Florida, according to news reports. The event took place a time when the British government voted to upgradeTrident in violation of Britain’s Non-Proliferation Treaty obligations and at a time when the newly-appointed Prime Minister, Theresa May (not yet elected), answered “Yes,” when asked by a member of Parliament if she would launch a nuclear missile and kill hundreds of thousands of civilians.
Frack-waste truck overturns near Coolville - A truck hauling brine waste resulting from the hydraulic fracturing process tipped over Sunday morning on U.S. Rt. 50/Ohio Rt. 7 between Coolville and Belpre, spilling roughly 1,200-1,500 gallons of brine, the Ohio Environmental Protection Agency confirmed on Tuesday. According to Ohio EPA spokesperson Dina Pierce, the Ohio EPA and Department of Natural Resources were continuing to conduct clean-up of the spill as of Tuesday morning, which occurred in Little Hocking, Washington County, a mile or two east of the K&H fracking-waste injection well located in Torch. The driver suffered minor injuries, according to an Ohio State Highway Patrol report, after the truck (in the westbound lane, heading toward K&H) drove off the right side of the roadway, struck an embankment and a tree, and overturned onto its side. Alcohol is not suspected in the crash. “Brine leaked from a top hatch into a roadside culvert. The Little Hocking fire department had plugged the culvert and installed a temporary dam in the ditch to limit migration of the brine.” Pierce said that the Ohio EPA inspected the discharge from the truck that flowed into the culvert and ditch, and also checked the nearest waterway that that culvert empties into, a creek that Pierce identified as White’s Run Creek. Pierce said that the company took samples of the brine from the crash site, and sent it to a “independent” lab to analyze the materials within the brine. “Ohio EPA inspected the discharge to the culvert, ditch, and also checked White’s Run Creek,” Pierce said. “No odors, sheen or wildlife impacts were observed. The trucking company, Contractor Transport, hired a contractor to vacuum the liquid from the culvert and ditch. The next steps are removing soil impacted by the spill.” Brine in this context is a byproduct of hydraulic fracturing for oil and gas, and may contain a cocktail of hazardous and toxic substances. Lorraine McCosker, an Athens-based environmental activist, was present on the scene Sunday, which she said is about a mile away from the K&H well. She said she and others took a sample of the brine, and will be conducting their own testing. She said that dozens of trucks carrying brine traverse that roadway each day, many of them heading toward the K&H waste-injection well.
Fracking Chemicals Remain Secret Despite EPA Knowledge of Health Hazards - The U.S. Environmental Protection Agency (EPA) knows that dozens of the chemicals used in fracking pose health hazards. The agency not only allows their use, but also lets the oil and gas industry keep the chemicals secret, according to a new report. Between 2003 and 2014 the EPA identified health hazards for 41 chemicals used in fracking, according to a report from the Partnership for Policy Integrity and Earthworks , based on documents obtained through a Freedom of Information Act request. Fracking is the injection of a chemical slurry into drilling sites to free up underground oil and gas deposits. Hazards from the chemicals used included irritation to eyes and skin; harm to the liver, kidney and nervous system; and damage to the developing fetus. Nonetheless, in most cases, the EPA allowed the chemicals to be manufactured and used without further testing. What's more, the identities of the chemicals are hidden from the public, even though federal law authorizes the EPA to require disclosure of so-called trade secrets if there is unreasonable risk of injury to health or the environment. In response to the report, more than 100 scientists, health professionals and first responders wrote the EPA , asking that it make public the identities of the chemicals known to pose health hazards. "Citizens have a right to know what health hazards we are being exposed to, especially when these hazards have been identified by government health assessments ... It is an unreasonable risk for people to be unknowingly exposed to chemicals that EPA, itself, has identified as potentially harmful," said the letter. Signers included Sandra Steingraber, author of Living Downstream and other acclaimed books on environmental health, and Wilma Subra, winner of a MacArthur "genius" award for her work to help vulnerable communities document the health risks of industrial pollution.
How the Government Hid Fracking’s Risk to Drinking Water -- The federal government hid evidence that chemicals used in hydraulic fracking can damage groundwater and drinking water, according to a report from Inside Climate News. The implications are especially important for rural families that rely on wells for drinking water. The findings go all the way back to 2004, when the George W. Bush administration’s Environmental Protection Agency commissioned a study on the chemicals used in fracking. The study, which minimized the risk from the chemicals, was not scientifically sound, a whistleblower said then. New information says the report’s conclusion was not supported by the scientists who wrote it: InsideClimate News has learned that the scientists who wrote the report disagreed with the conclusion imposed by the Bush EPA, saying there was not enough evidence to support it. The authors, who worked for a government contractor, went so far as to have their company’s name and their own removed from the final document. Congress subsequently exempted fracking chemicals from regulation under the Clean Water Act. So property owners and neighbors don’t know what chemicals have been used in what quantities. The "Halliburton loophole" exempts oil and gas companies from having to answer to the Clean Water Act for the chemicals they use for fracking.
Five more pipeline protesters arrested | PennLive.com - Five more members of the Lancaster Against Pipelines organization were arrested on Saturday, bringing the total number of arrests to 45. The organization said on Sunday these five protesters, who include one minor, are the latest to oppose the construction of the Williams Partners Atlantic Sunrise Pipeline, which is being constructed through Lancaster County. The five were arrested in Martic Township by stopping construction on Martic Heights as they sat in front of a working backhoe, according to the group. This follows the arrest of three on Tuesday, as well as previous protests that resulted in arrests in October. A court order filed by protestors had temporarily halted work, but the stay was removed by the court Nov. 8. The pipeline will ship natural gas across 183 miles of Pennsylvania, connecting gas-producing regions in the northeast to customers in the mid-Atlantic and the South.
Columbia gets FERC sign-off for 1.3 Bcf/d WB XPress pipeline project -- Columbia Gas Transmission won certificate approval Friday from the US Federal Energy Regulatory Commission for the 29-mile, 1.3 Bcf/d WB XPress natural gas pipeline project. The project will increase capacity along Columbia's existing WB Line, which runs bi-directionally through West Virginia and the northern part of Virginia. The project will pick up gas around Braxton County, West Virginia, and deliver 500 MMcf/d eastbound into interconnects with Cove Point Pipeline and Transcontinental Gas Pipe Line as well as sending 800 MMcf/d westbound into interconnects with Tennessee Gas at Broad Run and existing Columbia infrastructure including Columbia Gas Appalachia Pool. The FERC action came after Columbia parent TransCanada recently warned FERC of pressure on its schedules for WB XPress and its 171-mile, 2.7 Bcf/d Mountaineer XPress project without prompt approval, particularly as an environmental window controlling timing of tree clearing had already opened. A TransCanada executive said in a recent earnings call the company expected to have FERC certificates for the WB XPress, Mountaineer XPress and Gulf XPress projects in the fourth quarter of this year, and place all three projects in service in 2018.
WV abdicates responsibility in pipeline question (Charleston Gazette-Mail editorial) - Several firms, including EQT Midstream Partners LP; NextEra US Gas Assets, LLC; Con Edison Transmission, Inc.; WGL Midstream; and RGC Midstream, propose building the $3.7 billion Mountain Valley Pipeline, among several to move natural gas out of the region. This pipeline would run 300 miles from Wetzel County to Pittsylvania County, Virginia. The 42-inch pipe would have a 125-foot-wide construction corridor and a permanent right of way of 50 feet. It would require more than 600 stream crossings and 400 wetlands crossings. Construction would disturb nearly 4,300 acres of land in its path across Harrison, Doddridge, Lewis, Braxton, Webster, Nicholas, Greenbrier, Fayette, Summers and Monroe counties.
- Potential effects on water and wildlife, to say nothing of people, are obvious. Naturally, pipeline builders must submit to various evaluations and permit processes at both the state and federal levels. One, called a 401 Water Quality Certification after its section of the Federal Clean Water Act, is required for projects permitted by a federal agency. The 401 certification process is West Virginia’s opportunity to make sure a federally permitted project will not violate the state’s water quality or stream standards.
- West Virginia’s Department of Environmental Protection quickly granted this certification, despite much testimony from West Virginians that the project as proposed would harm water and streams.
- In August, the Sierra Club, West Virginia Rivers Coalition, Indian Creek Watershed Association, Appalachian Voices and Chesapeake Climate Action Network filed a suit in federal court asking the court to vacate DEP’s hasty certification and send the matter back to the agency for a thorough evaluation.
- In September, West Virginia’s DEP responded to the suit, acknowledging that the application did indeed require further review. DEP also asked the judge to send it back.
- In October, the 4th U.S. Circuit Court of Appeals sent the issue back to the state DEP for further review, as requested.
- By November, DEP just declared that the pipeline project could be built without harm. Furthermore, West Virginia wouldwaive its right to even conduct the 401 Certification.
Bans and Regulations: Two Sides of the Same Coin - The Heartland Institute - Officially, Vermont, New York, and Maryland, in that order, are the only states to have passed legislation banning hydraulic fracturing, also known as “fracking.” Illinois’ 2013 Hydraulic Fracturing Regulatory Act (HFRA), which grants permits allowing for high-volume hydraulic fracturing in the state, has ironically acted as a de facto ban – so much so that the first permit to be granted was two months ago, in September, four years after HFRA went into effect.Wichita, Kansas-based Woolsey Operating Co. was slated to be the first oil and natural gas company to begin its fracking operations in the New Albany Shale formation, located in southeastern Illinois. But alas, not even two months later, Woolsey requested the state’s Office of Oil and Gas Resource Management withdraw its injection well permit, explaining the company would consider reapplying for a permit in the future once “it is economical to pursue the projects contemplated …” Mark Sooter, Woolsey’s vice president for business development, revealed to Natural Gas Intel’s Shale Daily the primary reason for his company’s quick suspension of fracking production. “The process we have gone through to receive a permit was burdensome, time consuming and costly due to the current rules and regulations of the State of Illinois … Also, the drilling and completion requirements under the HFRA are stringent, which will make future development costs of the New Albany Shale excessive and the obligations for compliance on our staff demanding.”
Four Questions About the New Line 5 Pipeline Report - In June, the state of Michigan released a draft report on alternatives to Enbridge's Line 5 pipeline , which pumps up to 23 million gallons of oil and natural gas liquids (NGLs) per day along the bottom of the Straits of Mackinac. The draft report, written by Dynamic Risk, was met with heavy criticism from all sides, and the National Wildlife Federation joined with many others to suggest numerous and substantive changes. On Nov. 20, the final alternatives report was released to the public . As per an agreement with the state to obtain funding for the report, Enbridge has had five days to review this report before it is released publicly. Mike Shriberg, executive director for the National Wildlife Federation's Great Lakes Regional Center and a member of the Michigan Pipeline Safety Advisory Board, issued the following statement Monday about how we're evaluating the final alternatives analysis: "We're looking for this report to address four issues, at minimum, lacking in the first draft. It must assess what's best for Michigan—not Enbridge; it must analyze Michigan's share of product transported through Line 5; it must accurately assess the risk of Line 5 and treat that risk with the seriousness it deserves; and it must fully analyze all alternatives to Line 5." Here's a little more detail about what we're looking for in the report.
Pipeline opponents claim Enbridge skirted permit rules for storage yard - StarTribune.com: Enbridge has stockpiled thousands of pieces of pipe at several storage sites in northern Minnesota, in preparation for the company’s proposed new Line 3 oil pipeline. But pipeline opponents contend Enbridge skirted Minnesota law in its permit applications for the pipe storage yards. Missives from the Minnesota Pollution Control Agency (MPCA) — which granted the permits — buttress that notion. Enbridge in a statement said the “permits were issued in compliance with applicable regulations at the time.” Enbridge wants to build a new 340-mile pipeline to replace its existing Line 3, one of six Enbridge pipelines running from Canada across Minnesota to Superior, Wis. The new Line 3 would follow the current route to Clearbrook, but then jog south to Park Rapids before heading east. Enbridge has stacks of pipe at several staging areas, including Cloquet, Minn., ready to go if the Public Utilities Commission (PUC) approves the project. The PUC is expected to decide on Line 3 in April. Enbridge had to get “construction stormwater permits” for the pipe storage yards. In 2015, the MPCA issued the permits, which deal with controls for stormwater runoff. In May 2016, the MPCA conducted inspections of eight pipe yards and found Enbridge to be compliant with the stormwater permits. But the MPCA found a problem on another front. Under law and MPCA regulations, permits such as those for Enbridge’s pipe yards aren’t supposed to be issued before the completion of an environmental review for an entire project. The MPCA wrote to Enbridge in March that the pipe-yard permits were approved “prior to completion of the required environmental review” of Line 3. In the case of Line 3, a state-conducted environmental impact statement wasn’t completed until August. The PUC has not yet approved the EIS.
Tellurian awards EPC agreements for Driftwood LNG project totaling $15 billion (video) Houston-based Tellurian Inc. has awarded Bechtel Oil, Gas and Chemicals Inc. — the Houston-based subsidiary of California-based Bechtel Corp. — a collection of four engineering, procurement and construction agreements for its flagship liquefied natural gas terminal near Lake Charles, Louisiana.The agreements for the Driftwood LNG facility come to a total of $15.24 billion across four phases of construction, according to a filing with the U.S. Securities and Exchange Commission. The phases are to be completed along four deadlines. Tellurian has not yet filed the specific dates of those deadlines, though the Driftwood facility is supposed to start producing LNG from the first phase some time in 2022, with full production from all four phases in 2025, according to a company spokeswoman.In total, Driftwood will have capacity to produce up to 27.6 million tons per year of LNG, which means the facility will cost about $554 per ton of capacity. That makes it one of the lowest-cost LNG facility construction projects in the world, Tellurian's president and CEO, Meg Gentle, said in a press release."Today, production on Bechtel-built facilities accounts for 30 percent of global LNG capacity," Gentle said in the release. "We are proud to work together on the next generation of U.S. LNG exports."The contract price is to be paid out in a mixture of U.S. dollars and euros, according to the filing.Tellurian recently hired Bechtel to handle some additional engineering for the project. By the end of the year, the company is set to start participating in LNG markets as it sets up its marketing arm. Tellurian completed a merger with Magellan Petroleum Corp. earlier this year in a deal that took it into public markets. Tellurian plans to offer equity interest in Driftwood Holdings, which will include the LNG terminal, a pipeline and Tellurian's upstream natural gas production.
Kinder Morgan gets US FERC go-ahead for project to supply Sabine Pass - The US Federal Energy Regulatory Commission late Monday approved a Kinder Morgan pipeline expansion that will deliver feedgas to a fifth liquefaction train at Cheniere Energy's Sabine Pass LNG export terminal in Louisiana. The $151 million Sabine Pass Expansion Project will add 600,000 Dt/d of north-to-south firm service. It will replace a meter station in Acadia Parish, add a tap and lateral to connect to the export terminal in Cameron Parish, make changes to three delivery interconnects to allow receipts of gas as well as delivery, and add 15,900 hp of compression in Acadia Parish. It also entails addition of less than 1.5 miles of header pipeline to connect the compressor station to three existing pipeline interconnects. Kinder Morgan Louisiana Pipeline and Sabine Pass Liquefaction have signed a precedent agreement for the full capacity of the project under a 20-year term, according to the FERC order (CP17-22). FERC's order notes there is some overlap of facilities with Kinder Morgan's previously approved Lake Charles Expansion Project, intended to serve the Magnolia LNG project in Lake Charles, Louisiana. However, Kinder Morgan now expects to build the Sabine Pass Expansion Project first. The Magnolia project has received regulatory approval but is still seeking long-term contracts and awaiting a final investment decision, amid a well-supplied global market.
West Texas Producers Face A Growing Glut Of Natural Gas - West Texas oil producers are running out of places to send the growing glut of natural gas that is a byproduct of the recent oil boom in the region. As Fox Business reports, all of the natural gas pipelines that stretch from West Texas to the gulf are basically full. And the gas can’t be sent north, because northern natural gas markets are already supplied by producers in Canada and the Rockies. The market saturation has already sent natural gas prices tumbling even lower. And the oversupply could mean that some West Texas producers will be forced to cap wells or slow down on oil drilling. Many producers have resorted to simply burning the gas, a process that is harmful to the atmosphere but is often allowed in loosely-regulated Texas. Meanwhile, producers are hoping to pipe some of the gas to a waiting Mexican market—once new pipelines are built.
Growing Gas Glut Threatens West Texas Oil Boom - Natural gas is gushing out of West Texas, a byproduct of frenzied drilling for oil. That is a problem for energy producers, who are running out of places to send it all. Pipelines running from the region's Permian Basin to the Gulf Coast's chemical plants, cities and export terminals are essentially full. Drillers in the Rockies and Canada already supply markets in the north and west. There is plenty of room on pipelines running south to Mexico, which has emerged as a major market for U.S. producers, but there is a catch: much of the gas distribution infrastructure and power plants there that would buy the fuel haven't been built yet. The growing gas glut is already weighing on regional prices. Natural gas prices at the WaHa trading hub in West Texas have fallen to much as 57 cents per million British thermal units -- or about 20% -- below spot prices at Louisiana's Henry Hub, the national benchmark, according to S&P Global Platts. Analysts forecast the gap exceeding $1 next year, or about a third of the $3 that U.S. natural gas futures have hovered around this year. That is good news to regional gas consumers, such as power producers, who can profit from the lower price. Electricity provider Vistra Energy Corp. said it paid $350 million in August for a power plant in Odessa, Texas, to take advantage of the cheap fuel. But for oil and gas producers, the excess supply could potentially force them to take drastic measures -- such as capping wells and curtailing oil drilling -- until new pipelines to the Gulf Coast are built and planned power plants come online in Mexico. "We're headed into a situation that's never happened before," said Rusty Braziel, a former trader who heads consultant RBN Energy LLC. "They're making money on crude. They need to make sure the lack of gas takeaway capacity doesn't affect their crude production."
Natural gas inventories end October just below the previous five-year average - Working natural gas in storage in the Lower 48 states as of October 31, 2017, totaled 3,784 billion cubic feet (Bcf), as interpolated from EIA’s Weekly Natural Gas Storage Report data. Natural gas storage levels typically increase from April through October, although net injections sometimes occur in November. Inventories at the end of October 2017 were 2% lower than the previous five-year end-of-October average and 5% lower than the record-setting end-of-October level of 3,977 Bcf last year. Injection levels during refill season level can vary considerably, depending in part on inventory levels at the start of the refill season. This year, relatively high inventory levels at the beginning of the injection season (April) would naturally have resulted in a slower-than-average pace of injections. Nevertheless, injections were insufficient to return inventories to their recent historical average. From May 2015 through mid-September 2017, working gas levels were higher than the five-year average for 118 out of 122 weeks. However, since late September 2017, working natural gas levels have been lower than the previous five-year average for seven consecutive weeks, based on data through November 10. Natural gas storage is used to balance out seasonal fluctuations in demand. Natural gas demand is highest in the winter months, when residential and commercial demand for natural gas for space heating increases. Natural gas consumption in the power sector is highest in summer months, when overall electricity demand is relatively high for cooling. Based on data through August, year-over-year declines in electric power sector consumption have been partially offset by changes in natural gas trade, as exports have increased and imports have remained relatively flat. EIA’s latest Short-Term Energy Outlook expects the United States to be a net exporter of natural gas on an annual basis in 2017.
Pace of E&P bankruptcy filings slowed in 2017: attorney - Although bankruptcy filings among oil and natural companies have continued throughout the current year, the pace among exploration and production companies has slowed considerably since the start of the oil price collapse in mid-2014, according to a partner with the Haynes and Boone law firm. However, the same cannot be said for companies in the oilfield service sector, which has seen bankruptcy filings continue apace throughout 2017, attorney Eli Columbus said in a phone interview from Dallas. In a recent report, Haynes and Boone, which reports on oil and gas industry bankruptcy trends, said that it tracked 134 North American oil and gas producers that have filed for bankruptcy since the beginning of 2015. These bankruptcies, involved almost $80 billion in cumulative secured and unsecured debt. However, as of October 31, only 20 producers had filed bankruptcy in 2017, representing approximately $5.6 billion in cumulative secured and unsecured debt, the law firm said in the report. "On the producer side bankruptcies were steady and a there were lot of them through 2016, but in 2017 there hasn't been nearly as much activity in bankruptcy filings," Columbus said. At the same time, Haynes & Boone recorded 155 service company bankruptcies filed since the beginning of 2015, including a total aggregated debt of about $43.6 billion, with the average debt of these cases exceeding $281 million. Among the largest reported bankruptcy cases in the sector were Seadrill Limited, involving total debt of about $8 billion; Ocean Rig, $3.7 billion, and CGG Holding, $3.4 billion.
Saudi Arabia’s Risky Market Share Sacrifice - The 600,000 barrels per day Port Arthur refinery has exclusively processed Saudi Arabian crude since 1988, when Saudi Aramco first bought a stake in the facility—the largest of its kind in the United States. But Riyadh’s new strategy of constricting exports to the United States, along with several Asian countries, has reduced supplies to Motiva and several other refineries across the country."The drop is huge," said Amrita Sen of Energy Aspects in London. "It’s not just that Saudi exports are low, but they have been low for several months.” For months, the KSA has schemed to reduce the size of global inventories, which would spur the world’s major oil consumers to purchase more fuel, thus ending three years of a stubborn oil glut. The latest Brent barrel prices have hovered in the $62 range, which is a less than $10 jump from the January 2017 rate. At the time, the Organization of Petroleum Countries (OPEC) had not begun implementing its 1.2 million-barrel production deal. Eleven months in, the results are lackluster. Back in 2016, Saudi Arabia touted that the success of its Aramco initial public offering, due to take place in 2018, rested on a $60 per barrel price. That price would give investors confidence that the oil industry could be depended upon to produce profits for the next 10-20 years. Beyond that timeframe, the days of the dominance of fossil fuels in the global energy mix are numbered. Solar, wind and nuclear energies have seen unprecedented growth in recent years as nations gear up to meet their obligations under the 2015 Paris climate change agreement. Considering the KSA’s ultimate goal of ending its addiction to oil revenues, the fact that the nation dropped from being the U.S.’s second-largest oil provider to the fourth-largest in recent months, fails to ring major alarms. Iraq has picked up the slack so far. In July, the Motiva refinery increased its crude purchases from Iraq to make up for the lower supplies from Saudi Arabia. Other heavy crude producers have stepped up to fill supply gaps in American markets. As Libya, Iraq and Nigeria recover lost capacity, Saudi Arabia is due to be squeezed out of its North American market share.
Officials caught forcing state scientist to cover up earthquake/fracking link -- Due to an increased prevalence of seismic activity in the vicinity of fracking areas, many activists have pointed that this process may cause earthquakes as well. While environmentalists have been hoping to raise awareness about this problem for years, new testimony from one of the country’s top seismologists gives us a glimpse into why the scientific community has been largely silent about this issue. According to Austin Holland, the former lead seismologist for the state of Oklahoma, officials at the University of Oklahoma worked to actively cover up scientific findings that linked fracking to earthquakes. Oklahoma is one of the most drastic examples of how fracking can cause an upsurge in seismic activity, with the state seeing 639 earthquakes in the year of 2016 alone. In a deposition last month, Holland stated that Larry Grillot, former dean of OU’s Mewbourne College of Earth and Energy, and Randy Keller, the former director of the Oklahoma Geological Survey pressured him to alter his findings to be more favorable to fracking companies. After the incident, Holland left his position at OU and the Oklahoma Geologic Survey. “I don’t know if ‘angry’ is the right word, but just disappointed … that I’d spent my time working towards something, and I thought I was in my dream job, and then I couldn’t be a scientist and do what scientists do, and that’s publish with colleagues. Well, that’s the point at which I realized that for my scientific credibility, I had to leave the position I was in,” Holland said.
Nebraska Regulators Approve Alternative Route for Keystone XL Pipeline - — Nebraska regulators on Monday allowed the Keystone XL oil pipeline to clear its final major hurdle, granting a victory to President Trump and Republicans who have for years pressed for the project. But the pipeline company will not be allowed to build along its preferred route, the regulators announced, opening up new questions about how the project will proceed. The pipeline’s future was complicated by the commission’s 3-2 vote to approve the alternate route. The decision drew tempered reactions both from opponents of the project and TransCanada, the pipeline company, which was noncommittal about its path forward. “As a result of today’s decision, we will conduct a careful review of the Public Service Commission’s ruling while assessing how the decision would impact the cost and schedule of the project,” Russ Girling, TransCanada’s president and chief executive officer, said in a statement. The approved route enters Nebraska at the same spot and leads to the same end point as the company’s preferred option. But in between, the alternate route veers east to follow the path of the existing Keystone pipeline. The three commissioners who voted to approve the permit, all Republicans, said in a written opinion that they were very cognizant of the “impacts to the natural resources of the state,” but that there was “no utopian option” and that building the pipeline would bring economic benefits to counties along the route. Two commissioners, one Republican and one Democrat, dissented. Opponents of the pipeline, including many farmers and ranchers, packed the hearing room for the announcement. Some landowners in attendance found out that their land would no longer be on the pipeline route, while others learned that a path through their property had been approved. “They’re going to rape and pillage our soil,” “We will do everything in our power to make sure it doesn’t happen.”
Nebraska Regulators Approve Keystone Pipeline Route Days After South Dakota Leak, Shutdown - TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state... just days after a 5,000 barrel spill in South Dakota shut the pipeline. The decision will almost certainly be challenged in court. Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska's Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008. For those who aren't familiar with the project, the pipeline links Canada’s Alberta oil sands to U.S. refineries. While a portion of the pipeline has been operating, part of it had still not been approved by state regulators... until today's decision by Nebraska. Notably, with Nebraska’s go-ahead in hand, TransCanada still must formally decide whether to proceed with construction on the line, which would send crude from Hardisty, Alberta, through Montana and South Dakota to Nebraska, where it will connect to pipelines leading to U.S. Gulf Coast refineries. The company’s open season for gauging producers’ interest closed late last month, and TransCanada executives have indicated that they’ve secured enough shipping commitments to make the project commercially worthwhile.
The Keystone XL Pipeline Wins a Battle, But Faces a New War -- After a nearly decade-long fight over its construction—which grew to include three states, two provinces, several indigenous tribes, tens of thousands of activists, and two U.S. presidents—the Keystone XL pipeline seemed set to clear its final major hurdle on Monday morning.By a vote of 3-2, the Nebraska Public Service Commission voted to allow the pipeline to pass through the state. The commission’s vote was the last significant regulatory approval that Keystone XL required before construction could begin. Montana, South Dakota, and the U.S. federal government already okayed the 1,100-mile-long project this year.But—in a twist—the Nebraska commission’s vote might have merely opened a new chapter in the saga. While the commissioners approved Keystone XL, they also ordered that the pipeline take an alternate route through the state. The new route—which adds a 63-mile detour and parallels a preexisting pipeline—increases the cost and legal difficulties of an already expensive and delayed project.The commissioners said they were forcing the new route because Keystone XL must “take advantage of any opportunity” to run along the preexisting pipeline corridor.TransCanada, the pipeline’s developer, did not seem to celebrate the approval. Russ Girling, its president and chief executive officer, said in a statement that the company was “assessing how the decision would impact the cost and schedule of the project.” He also assured investors that the company was pursuing other improvements. And as the day went on, environmentalists and indigenous groups opposed to Keystone XL sounded upbeat about the possibility of postponing its construction further. “By pushing Keystone XL onto a new route, the commission all but guaranteed more delays and hurdles for TransCanada to work through. We’ll be there with our allies pushing back on them every step of the way,” said May Boeve, the director of 350.org, a climate-activism organization. She also said that activists should prepare to peacefully assemble in the pipeline’s path.
Five things to watch in the new Keystone fight | TheHill: Nebraska's decision Monday to approve the pipeline route was a landmark moment in the Keystone saga, but it’s not the final time regulators will decide the pipeline's fate. The Bureau of Land Management needs to issue a permit allowing pipeline construction on a small swatch of federal land along its path, said Sierra Club senior attorney Doug Hayes. The Army Corps of Engineers also has to authorize its construction over waterways along the route.Opponents have tried to raise legal barriers to Keystone on both the state and federal level. Tribes and landowners that oppose the pipeline are still suing over South Dakota’s decision to grant construction permits to developers. Their lawsuit is pending before that state's Supreme Court. On the federal level, a coalition of environmental groups want the courts to reconsider Trump’s permitting decision, arguing the State Department relied on an outdated environmental review when issuing the cross-border permit. A federal judge on Wednesday rejected a request from TransCanada and the Trump administration to dismiss that lawsuit, meaning the court is likely to review the State Department’s environmental assessment. Nebraska’s decision is also subject to legal challenges, something opponents have promised to pursue. A key question is how the route selected by the Nebraska Public Service Commission affects existing permits for the pipeline. Opponents of the pipeline say that decision raises a host of questions about previous permitting decisions. “It creates certain challenges on the state and federal level in terms of further environmental review, changes to the easements, and everything else,” Hayes said.
Keystone Pipeline oil spill could be worse than we thought - An oil spill in South Dakota that leaked thousands of gallons of highly polluting oil could damage the environment more than the company has let on. TransCanada shut down a portion of its highly contested Keystone Pipeline,which transports oil from the Canadian tar sands to refineries in the U.S., at 6 a.m. on Thursday after 210,000 gallons, or around 5,000 barrels, of oil spilled across South Dakota farmland. The type of oil in the pipeline, however, makes pinpointing the size of the spill more difficult than usual, worrying local environmental groups and landowners about its environmental effects. A viscous type of oil called diluted bitumen, or tar sands oil, flows through the Keystone Pipeline. Because it’s so thick, leaks can be difficult to detect. If the oil does spill, it’s often far more detrimental to sensitive water resources. Bitumen is also one of the dirtiest fuels in the world. Unlike conventional crude which can be pumped directly from the ground, water is required to separate the heavy, tar-like substance from the sand it’s found in — a process that depletes and pollutes freshwater resources. Thursday’s spill happened on a section of pipe along a small road approximately 35 miles south of the Ludden pump station in Marshall County, South Dakota,three miles southeast of the town of Amherst. Kent Moeckly, a nearby land owner and member of the Dakota Rural Action Group, told VICE News he’s concerned that the spill could be much larger though, in large part because the computers used to detect oil pressure drops don’t always detect small leaks. “TransCanada thought it was 200,000 gallons. What we found out working with TransCanada, it could very well be 600,000 gallons,” Moeckly said. His concerns aren’t unfounded. After the last major Keystone oil spill in South Dakota, in April 2016, TransCanada revised its initial estimate of the spill from 187 gallons to 16,800 gallons after the company started digging up the field where the spill occurred. Because diluted bitumen is so dense, it seeps into the soil and river beds rather than rising like conventional, lighter crude, potentially masking the full spill.
Drone footage captures extent of US oil leak - BBC News - (video) Drone footage has captured the scale of a 5,000 barrel oil leak in South Dakota. The leak was discovered by Keystone pipeline operators TransCanada on Thursday.
TransCanada sends more crews to Keystone pipeline leak - ABC News: TransCanada Corp. says the company has sent additional crews and equipment to the site of a 210,000-gallon oil spill in South Dakota from its Keystone pipeline. TransCanada said Saturday it is making progress in its investigation into the spill cause on farmland in Marshall County, near the North Dakota border, about 250 miles (402 kilometers) west of Minneapolis. But the company did not elaborate on the cause. The company says additional equipment and workers continue to be dispatched to the site. Company spokesman Terry Cunha said Sunday that about 150 people are now at the site. Cunha said a gravel road has been completed to handle heavy equipment. Cunha said a drainage ditch near the leak was protected by a berm and not polluted by the spill. State officials earlier said they did not believe the spill has polluted any surface water bodies or drinking water systems. A drainage ditch is clearly visible in aerial footage taken by DroneBase on Friday. Crews shut down the pipeline Thursday after discovering the leak. TransCanada says the leak is under control and there is no significant environmental impact or threat to the public.
Keystone Pipeline Permit Could Be Revoked After Last Week's 210,000-Gallon Spill - TransCanada's permit to operate its Keystone tar sands pipeline in South Dakota could be revoked if an investigation into last week's 210,000-gallon leak determines that the pipeline operator violated its license, Reuters reported. State regulators expressed concern that the Nov. 16 spill in Marshall County was not the first from the controversial pipeline. "This is a relatively new pipeline. It is supposed to have an operating life of more than 100 years and it was supposed to be a state-of-the-art pipeline construction. It appears that it is not," South Dakota Public Utilities Commission (PUC) member Gary Hanson told Aberdeen News . "We've had three fairly major leaks just on the border with North Dakota and two in South Dakota in a very short period of time," Hanson added. "One might expect this to take place on a pipeline over a period of 30 or 40 years at the maximum, yet it's been fewer than 10 years." In April 2016, the Keystone pipeline gushed 16,800 gallons of oil near Freeman, South Dakota. According to Reuters, the permit that the PUC issued for the Keystone in 2007 had 57 conditions that include construction standards and environmental requirements. The PUC can revoke or suspend the permit if TransCanada is found to have made misstatements in its application or does not comply with the conditions. The PUC is expecting a preliminary report about the spill from federal and state technical experts in the next 10 days. “We are waiting to see what the forensic analysis comes back with to see if any of our conditions were violated," PUC chair Kristie Fiegen told the news service.
Canadian heavy crude prices fall after TransCanada shuts Keystone pipeline - Canadian heavy crude benchmark Western Canadian Select at Hardisty fell sharply Friday after TransCanada shut its 600,000 b/d Keystone pipeline Thursday following a leak. Sources said WCS traded Friday at the January NYMEX light sweet crude futures contract calendar month average (WTI CMA) minus $15.90/b and at minus $16/b. Those levels represent a drop of as much as 50 cents/b from where the grade traded against the January WTI CMA on Thursday, which was the last day of December crude as the prompt month prior to pipeline nominations being due, sources said. On Thursday, TransCanada said it had shut the pipeline after detecting a leak of about 5,000 barrels of crude in South Dakota following a drop in pipeline pressure. The leak occurred in a section of the pipeline about 35 miles south of the Ludden pump station in Marshall County, South Dakota. "The section ... was completely isolated and within 15 minutes emergency response procedures were activated," the company said in a statement. "We have been keeping our shippers and customers up to date and have communicated that the pipeline from Hardisty, Alberta, to Cushing, Oklahoma, and to Wood River/Patoka, Illinois, is expected to remain shut as we respond to this information," it said, adding the shutdown does not impact crude flows on the Marketlink pipeline system.
WCS Hardisty-Cushing crude spread widens to two-year high on Keystone shutdown - The ongoing shutdown of TransCanada's Keystone crude pipeline in South Dakota helped push the spread between the price differentials for Western Canadian Select in Hardisty, Alberta, and in Cushing, Oklahoma, to its widest level in more than two years Tuesday, sources said. While WCS at Hardisty was heard talked at the NYMEX light sweet crude futures contract calendar month average (WTI CMA) minus $16.85/b Tuesday, a decline of 85 cents/b from Monday's assessment, the same grade at Cushing was talked at WTI CMA minus $6.80/b, an increase of $4.25/b day on day. Those price movements boosted the spread between the WCS grades to $10.05/b from $4.95/b on Monday, its widest level since reaching $10.50/b on August 12, 2015. TransCanada shut the pipeline November 16 after it detected a leak of 5,000 barrels at a site 3 miles southeast of Amherst, North Dakota. A company spokesman on Tuesday said while progress is being made at the site, it will be "some time" before a cause for the leak is determined and that the company does not yet have a timeframe for when operations will resume. Sources said another factor moving prices for WCS Tuesday was pipeline operator Enbridge's apportionment Monday. Enbridge set the apportionment for December crude shipments on Line 4/67 on its Canadian Mainline System at 21%, which one source described as "large," and compares with 5% apportionment in November. The Line 67 pipeline typically carries heavy western Canadian barrels from Alberta. The widening of the spread between differentials at Hardisty and at Cushing is probably about 60% due to the Keystone shutdown and 40% due to the apportionment, the source said.
Legal protest launched against massive Nevada fracking plan - —Three conservation groups filed an administrative protest 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’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. ” Regulations require the BLM to fully analyze and disclose harm from any federal actions, including developing public land for oil and gas extraction. Instead, BLM dismisses as “speculative” the possibility that drilling and fracking would damage Nevada’s precious water resources. Nevada hydrologist Tom Myers analyzed the effects of drilling and fracking in the sensitive groundwater basins of eastern Nevada. Myers concludes that “fracking development in the proposed lease area threatens the hydrogeology of the area, including regional springs and intermittent and perennial streams; potential impacts include both contamination and depletion of flow.”
Erie requests that Crestone relocate wells farther from community - Erie is the latest stakeholder in a mega oil and gas development to request that Crestone Peak Resources relocate 36 wells farther from the town, north onto Colo. 52. The Denver-based energy company has remained mum on whether it is seriously considering shifting around 180 wells proposed in Boulder County as part of its Comprehensive Drilling Plan, a new state process."We are reviewing all the letters from all the stakeholder groups regarding the CDP," said Crestone spokesman Jason Oates. "I don't have specific feedback to share about their proposals at this time." Oates had a similar response when asked about whether Crestone would consider other proposals by the Colorado Department of Health and Environment and a homeowner group calling for the relocation and consolidation of well pads. Martin Ostholthoff, Erie's community development director, asked state regulators that Crestone consider numerous requests regarding traffic impacts, pipelines, noise mitigation, leaks and fracking fluids. In a letter posted to the state's website on Nov. 16, Ostholthoff requested that Crestone:
- • Relocate proposed pipelines through Kenosha Farm and Erie Village subdivisions to North 119th Street and Kenosha Road
- • Provide pipeline/flowline mapping data to Erie
- • Reduce noise levels from operations below the maximum level permitted
- • Conduct monthly audio, visual and olfactory testing of well pads
- • Inspect operations with infra-red camera twice a year
- • Report inspection results to Erie on an annual basis
- • Use nearby water sources for the drilling and hydraulic fracturing
- • Ban diesel, 2-Butoxyethanol and benzene as fracking chemicals
- • Explore alternative methods of delivering materials
- • Hire an outside consultant to perform a road impact study, and pay for any damage caused by additional traffic
Climate activist goes on trial for Montana pipeline shutdown (AP) — An Oregon man goes on trial in Montana on Tuesday in the latest criminal prosecution against activists who sought to call attention to climate change by shutting down pipelines carrying crude from Canada's oil sands region to the United States. Leonard Higgins, 65, of Portland is charged with trespassing and felony criminal mischief for breaking into a fenced site near Big Sandy, Montana, to turn off a valve on a Spectra Energy pipeline in October 2016. Activists simultaneously targeted other lines in Washington state, North Dakota and Minnesota.Higgins, a retired technology worker for the state of Oregon, wants to tell jurors that his act of civil disobedience was necessary because climate change is an emergency that can't be ignored, he told The Associated Press.But District Judge Daniel Boucher (boo-SHAY) has indicated that he won't allow the trial to be used as a vehicle for political protest. Boucher said in an April order that testimony on climate change would be irrelevant to the charges faced by Higgins. "The energy policy of the United States is not on trial, nor will this court allow Higgins to attempt to put it on trial," Boucher wrote in the order. "Mr. Higgins is on trial for his voluntary acts."In a parallel case in Minnesota, two activists last month convinced a state judge to let them present evidence in their upcoming trial that the imminence of climate change justifies extreme action. That's a legal tactic known as a "necessity defense.""The important thing about a jury trial is a chance to argue about the climate emergency," said Higgins, a former information technology worker for the Oregon state government. "We chose tar sands oil and consider it along with coal to be the dirtiest carbon emitters. They're the ones we should reduce.
Blocked From Discussing Climate Change, Valve-Turner Faces 10 Years in Prison After Felony Conviction - After a judge refused to allow him to share his reasons for shutting off a tar sands pipeline valve in a protest of fossil fuel mining, 65-year-old climate activist Leonard Higgins was found guilty of criminal mischief—a felony—and misdemeanor criminal trespass. Higgins faces up to 10 years in jail and as much as $50,000 in fines. "I'm happy for the opportunity to share why I had to shut down this pipeline, and I really appreciate the time and dedication of the jury and the judge," Higgins said. "I was disappointed and surprised by the verdict, but even more disappointed that I was not allowed a 'necessity defense,' and that I wasn't allowed to talk about climate change as it related to my state of mind. When I tried to talk about why I did what I did I was silenced. I'm looking forward to an appeal." Supporters spoke out on social media after the verdict was handed down in a Montana court room, following a trial that lasted less than two days. Higgins , along with four other activists, shut off an emergency valve of the Enbridge tar sands pipeline in rural Montana on Oct. 11, 2016, in protest of the flow of the highly damaging carbon-carrying oil into the U.S. The former government employee admitted to his actions and expressed gratitude for his day in court. Higgins was hoping to be able to offer a "necessity defense," demonstrating that his protest was necessary to fight the destruction of climate change that's accelerated by fossil fuel mining and transportation of tar sands—but he was not permitted to testify regarding climate change.
Bakken Learning Curve Said Driving Well Productivity Gains -- Drilling productivity in the Bakken Shale, which is producing more than 1 million b/d of light sweet crude oil, is a byproduct of geology and the fact that North Dakota operators are further along the learning curve than in other U.S. onshore plays. Compared to a six-year-old well on average, wells now produce about 70,000 bbl more in the seventh month of their life. Operators also are having fewer issues with hydraulic fracturing (fracking) and well interference, he said. Water and sand volumes are higher this year than they were a year ago too, which indicates more fracking and longer laterals. Helms believes the Bakken has remained at the cutting edge in technology applications, such as fracking techniques, lateral length and the drilling speed. "Equally important is the fact that the Bakken, with the exception of the far northwestern corner of the state, is very overpressured, much more than many of the other major U.S. plays," he said. "This makes Bakken well productivity quite a bit higher due to the rock being so over-pressured."
Culver City Could Add 30 New Oil Wells and Allow Fracking Under New Proposal | L.A. Weekly: Environmentalists and local activists are protesting a proposal by Culver City to allow up to 30 new oil wells to be drilled in the next 15 years. Even more controversially, the city's proposed regulations would allow for fracking and other forms of well stimulation."I know that some of the city council members have been vocal about wanting to protect their residents from oil and gas production," says Maya Golden-Krasner, a senior attorney with the Climate Law Institute at the Center for Biological Diversity. "I don’t know why this is what they came up with."She adds: "They shouldn’t be drilling new wells. Really, we’re at the point where we really need to be looking at ways to phase out oil drilling." Roughly 10 percent of the 1,000-acre Inglewood Oil Field lies within Culver City's boundaries. After a raucous public meeting on Monday night, Culver City Council voted to extend the public comment period for the drilling proposal's Environmental Impact Report (or EIR). The extension is a small victory for opponents of new drilling. The city's mayor, Jeff Cooper, told L.A. Weekly after the meeting that he does not support the current proposal. "Personally, I don’t believe 30 new oil wells are good for Culver City," Cooper says. "I don’t think any new oil wells are good for Culver City. We’re surrounding the largest urban oil field in the world. I get concerned for a lot of the reasons our residents are concerned — potential seismic activity, chemicals used for extraction, other environmental consequences that could occur.
Victory: Concerned Citizens and Environmental Groups Stop Oil Train in Its Tracks -- A coalition of concerned citizens, environmental groups, and health and safety advocates successfully challenged the approval of a massive refinery and rail project that will further harm air quality in the San Joaquin Valley and subject residents in several states to the catastrophic risks of a derailment involving scores of tanker cars filled with explosive Bakken crude oil. The Alon Bakersfield Refinery Crude Flexibility Project, approved by the Kern County Board of Supervisors, would have enabled the refinery to unload crude from more than 200 tanker train cars per day, allowing it to import up to 63.1 million barrels of crude oil per year. A lawsuit filed by Earthjustice on behalf of the Association of Irritated Residents, Center for Biological Diversity and Sierra Club claimed that Kern County's certification of an environmental impact report (EIR) failed to meet its legal duty to fully assess the project's risks and disclose them to the public. The court agreed. Bakken crude emits high levels of volatile organic compound emissions that lead to ozone pollution, which in turn causes respiratory illnesses such as asthma. Already one in six children in the Valley will be diagnosed with asthma before age 18. The crude oil being transported to the Alon Bakersfield Refinery from the Bakken formation in North Dakota poses a higher risk of explosion in the event of a rail accident than heavier crudes. Kern County's EIR underestimated the likelihood of release of hazardous materials by rail accident by fivefold. It also wrongly ignored the air pollution from rail transportation. The county's EIR was set aside requiring a new one to be drafted and certified.
Has California built its last natural gas plant? -- Two pending decisions from California utility regulators will show whether the state is committed to its renewable energy goals or bound to natural gas for years to come. The most notable decision is the future of NRG Energy’s proposed 262 MW Puente natural gas project. Earlier this year, a committee of the California Energy Commission came out against building the plant, resulting in NRG suspending its application while reviewing the facility’s future prospects. On another front, Pacific Gas and Electric’s (PG&E) decision to shutter its 2,200 MW Diablo Canyon nuclear facility by 2024 or 2025 leaves a gaping hole in capacity that needs to be filled. The utility proposed a $1.3 billion energy efficiency investment as part of a 2016 agreement with renewable energy advocates over shuttering the plant. But an administrative law judge with the California Public Utilities Commission (CPUC) deferred approval of that investment, saying it should be addressed in the state’s new comprehensive planning. Natural gas appears to be the easy answer to fill the state’s capacity goals, but a recent investigation by the Los Angeles Times left many questioning whether the state is overbuilding that resource. California ISO agreed earlier this year to examine alternatives to Puente after pressure from lawmakers. Clean energy and green groups are also urging regulators and lawmakers to pivot to solar, efficiency and storage as a more cost-effective way to meet power needs and reduce emissions. As these debates play out, California is reaching an inflection point over the future of its energy landscape and how these decisions play out will decide how the state will move forward to cut emissions and invest in more renewable energy.
Port to protesters: No scheduled plans to ship fracking sand by rail - The Port of Olympia currently is unaffected by a group of protesters who have occupied a section of railroad tracks in downtown Olympia because the port has no scheduled plans to ship fracking sand to North Dakota, a spokeswoman for the port said Tuesday. The Port of Olympia commission met Tuesday for a special meeting on the port’s 2018 budget. The commission made no mention of the protest. “It’s not affecting us,” spokeswoman Jennie Foglia-Jones said during Tuesday’s meeting, but she added the port supports whatever action is taken by local law enforcement. “No movement is scheduled,” she said about the cargo. Meanwhile, city of Olympia officials don’t want to get the Olympia Police Department involved. City Manager Steve Hall says he hopes the port and railroad officials will resolve the issue. “This feels like a repeat of last year, and nobody wants to go through what happened last year,” Hall said. “Their beef is really with the port, not with the city.”
Senate May Approve Drilling In Alaskan Wilderness With Tax Bill - The Senate could soon approve oil drilling in Alaska's Arctic National Wildlife Refuge with its bill to overhaul the nation's tax code. ANWR has long held an outsized symbolic role in the tug-of-war between environmental protection and the desire to increase domestic oil and gas drilling. In that regard, you could argue, it was the original Keystone XL Pipeline — an issue activists on both sides could rally, fundraise and organize around. Legislation opening up a portion of ANWR for leasing cleared a key Senate hurdle this week, when the Senate Energy and Natural Resources Committee approved it on a 13-10 vote. The measure is tied to the budget process that Republican leaders are using to advance the tax overhaul, which means the bill would only need 51 votes – not the usual 60 – to advance in the full Senate. That means they can conceivably pass their legislation with just Republican votes. The measure would generate $1.1 billion over the coming decade, according to the nonpartisan Congressional Budget Office. That figure would help Senate Republicans offset the cost of their proposed tax cuts. Under reconciliation rules, the tax changes can't add more than $1.5 trillion to the deficit over 10 years, or they'd need 60 votes to advance. Democrats are seizing on that cost disparity as they blast the bill. "The Energy and Natural Resources Committee has been instructed to raise a billion dollars, and at the same time the Finance Committee is trying to increase the deficit by $1.5 trillion with tax cuts for corporations and millionaires," Sen. Maria Cantwell, D-Wash., said at this week's committee hearing. "The fact our committee's contribution to that deal is about 7/100th of one percent of the Republicans' increased deficit spending shows that this is not a serious budget proposal. It's a cynical effort to open up the heart of the Artic Wildlife Refuge for oil."
Aiming for ANWR: Will the Alaskan area be opened to oil development? - This week’s Capitol Crude looks at efforts by congressional Republicans to open up the Arctic National Wildlife Refuge to oil and gas development. After decades of debate, drilling in ANWR appears closer than ever, but there are a lot of open questions and moving parts. Senior oil editor Brian Scheid looks closely at a Senate committee hearing last week where a bill opening ANWR was approved. Additionally, Chris Guith, a senior vice president for policy at the US Chamber of Commerce’s Global Energy Institute, talks about whether oil and gas producers are even interested in the Alaskan frontier.
Alaska governor touts pipeline project that faces hurdles (AP) — Gov. Bill Walker on Tuesday touted the benefits a major liquefied natural gas project would bring to Alaska, though the project, which the state is pursuing with Chinese partners, is far from assured. Walker, speaking in Anchorage, told reporters the project could provide affordable natural gas to communities, create thousands of jobs and generate up to $2 billion a year in revenue for the state. Walker's office released the agreement that Walker and Keith Meyer, president of the state-sponsored Alaska Gasline Development Corp., signed this month with leaders of Sinopec, China Investment Corp. and the Bank of China. Sinopec is a major oil and gas company. The agreement doesn't obligate any party, and it doesn't require that they pursue this project exclusively. Instead, it calls on them to explore by May 31 the feasibility of investing in the Alaska project, which would move gas from the prodigious North Slope to Asian markets, and pursue terms to advance the project, including the potential for Sinopec to be involved in engineering, construction and other aspects. But Walker said the agreement is significant, a result of work that has included building relationships with Chinese officials, including the country's president, and getting the project on the White House's radar and promoting it with the Trump administration. Larry Persily, a former federal coordinator for Alaska natural gas projects, said it's good to have interest in the project. But "people are getting prematurely euphoric," he said.
Alliance of the Bear: Native groups stymie Trump, tar sands pipelines - Mongabay.com – Summary:
- When Big Oil and Gas invaded rural North America to frack, drill and dig the Alberta tar sands, the firms were met by a scattered opposition from Native peoples who developed a novel strategy: oppose new pipelines to keep fossil fuels from getting to market.
- Gradually, First Nations resistance groups in Canada’s East and West joined up with Western U.S. Native groups. Last July, many of their leaders met at a Rapid City, South Dakota Holiday Inn to sign a treaty of alliance against the fossil fuel companies and their ongoing projects.
- In recent months, oil and gas projects that indigenous organizers had risen against began to fold, including the Petronas liquid natural gas refinery project in British Columbia, and TransCanada’s Energy East pipeline.
- In June, the Trump administration removed Endangered protection status for the Greater Yellowstone River Valley grizzly population. The powerful Treaty Alliance Against Tar Sands Expansion vowed resistance, viewing delisting as both an attack on the sacred bear and as a means of exposing the land over which the bear roams to mining and drilling.
Foreign majors leaving Canada’s oil and gas sector Low oil and gas prices have spurred an exodus on foreign oil companies from Canada’s energy sector over the last year. On Thursday South Africa’s Sasol Ltd became the latest international energy firm to say it plans to divest Canadian assets. The departures have raised doubts over future development prospects of the world’s third largest crude reserves and stoked criticism of federal and provincial environmental policies that are stricter than those of the United States.(table of divestitures)
Eastern Canadian producers to offer as many as 10 January crude cargoes: source - Producers operating off the coast of the eastern Canadian province of Newfoundland and Labrador will offer as many as 10 crude cargoes for January loading, a source with knowledge of the program said. Five cargoes of Hibernia crude plus one potential direct-to-market cargo are scheduled to load in January, compared with seven in December, the source said. The Hibernia project is co-owned by ExxonMobil (33.125%), Chevron (26.875%), Suncor (20%), Canada Hibernia Holding (8.5%), Murphy Oil (6.5%) and Statoil (5%). There will be two cargoes of Terra Nova available in January, compared with one in December, the source said. Suncor, the operator of Terra Nova, has a 37.675% stake. The other partners in the field are ExxonMobil (19%), Statoil (15%), Husky Energy (13%), Murphy Oil (10.475%), Mosbacher Operating (3.85%) and Chevron (1%). There will be two cargoes of White Rose available in January, the same as in December, the source added. Husky operates the White Rose field with a 72.5% stake, while Suncor holds the remaining 27.5%.
The topsy-turvy world of Mexican natural gas supply - Mexico’s natural gas supply situation is in a state of flux, to say the least. Gas production within Mexico continues to decline, but there’s hope it can rebound in the country’s Burgos Shale region. Gas demand is rising fast, and new gas pipelines are being built to deliver Permian and other U.S. gas to new Mexican power plants. At the same time, though, delays in completing some of these new pipes have forced Mexico’s electricity authority to turn to LNG imports to keep gas supply and demand in balance. And yet, plans are afoot to export LNG to Asia from Mexico’s west coast by the early 2020s — gas that, by the way, would initially originate in Texas. Today, we explore recent developments in the Mexican gas arena. Exports of natural gas from the U.S. to Mexico have increased sharply over the past few years, driven by a combination of rising Mexican demand for gas (mostly to fuel a fast-growing fleet of new gas-fired combined-cycle power plants) and declining Mexican gas production. In 2016, exports of U.S. natural gas to Mexico via pipeline averaged 3.8 billion cubic feet/day (Bcf/d), more than four times higher than they were in 2010, and in the first eight months of 2017 pipeline-gas deliveries from the U.S. to Mexico averaged 4.2 Bcf/d, according to the Energy Information Administration (EIA). As we said in Part 4 of our “It Was Good Living With You (W)aha” blog series on the Waha gas hub in West Texas, the pace of pipeline-export growth to Mexico in late 2017 and in 2018 will be tied in large part to how quickly new gas pipeline capacity can be completed within Mexico, but a number of pipeline projects south of the border have experienced delays.
Fracking firm wins extension to 'draconian' protest injunction - A multinational firm has secured a long-term, sweeping injunction against anti-fracking protesters despite critics calling it “draconian and anti-democratic”.On Thursday, a high court judge extended the wide-ranging injunction sought by petrochemicals giant Ineos, which covers all anti-fracking campaigners.The injunction prohibits campaigners from interfering unlawfully with Ineos’s fracking operations. Anyone who obstructs the firm’s fracking activities faces being jailed, fined, or having their assets seized. Mr Justice Morgan dismissed a legal challenge brought by two anti-fracking campaigners, Joe Corré, the son of fashion designer Vivienne Westwood, and Joe Boyd, who had argued that the injunction was oppressive and should be discarded. Boyd said he will seeking to appeal the ruling which he called “profoundly troubling” and “an unprecedented restriction on our fundamental rights”. The legal case could have important implications for campaigners protesting against the activities of corporations as other firms could be encouraged to take out similar injunctions.
Natural gas emissions will blow Europe's carbon budget at current levels - Governments have drastically underestimated methane emissions from natural gas and will miss the Paris agreement’s goal of limiting global warming to 2C unless they urgently scale down its use, a major new study has found. Continuing natural gas emissions at present levels will add 0.6C to global warming and, with other fossil fuel use, exhaust Europe’s carbon budget – the amount it can safely and fairly emit – in less than a decade, says the report by the Tyndall Centre for Climate Change Research. It concludes that Europe must phase out all fossil fuels including gas by 2035 and decrease emissions by 12% per year – far beyond its current ambitions – to keep to the Paris 2C pledge. EU countries, including the UK, have committed to burn more natural gas as a “bridging fuel”, because it offers a baseline alternative to wind and solar on cloudy and windless days, and because it emits less carbon dioxide than coal. But the report’s authors find that there is “categorically no role” for new gas, oil or coal production, because of their high CO2 and methane emissions. “Considering both carbon dioxide and methane emissions, an urgent programme to phase out existing natural gas and other fossil fuel use across the EU is an imperative of any scientifically informed and equity-based policies designed to deliver on the Paris agreement,” says the study, which was co-written by Tyndall’s Prof Kevin Anderson and Dr John Broderick. Their report, which is based on original modelling and a meta-analysis of 250 gas supply chain studies, logs a “sustained rise” since 2006 in atmospheric methane concentrations. These are now “at the top end of IPCC (Intergovernmental Panel on Climate Change) scenarios” and running at unsustainable levels, according to the study. Far from phasing out natural gas ventures though, the EU appears to be accelerating them in a new “projects of common interest” (PCI) list for gas infrastructure. After 77 gas projects were approved in the last PCI round, the latest slate (pdf) could potentially approve more than 100 gas ventures for public funding and fast-tracked planning approval, according to analysis by Friends of the Earth Europe (FoEE).
Statoil plants flag in Big Oil’s race for ‘cleaner’ crude (Reuters) - There’s oil and then there’s oil, says Norway’s Statoil, which is pitched in a race to develop the cleanest crude as countries wean themselves off fossil fuels. While the world will need oil and gas for decades to come, Statoil’s Chief Executive Eldar Saetre expects that many oil deposits will never be tapped as increasingly discerning consumers will demand only the lowest-polluting crude. “A lot of fossil fuels will have to stay in the ground, coal obviously ... but you will also see oil and gas being left in the ground, that is natural,” Saetre told Reuters in an interview in London. “At Statoil we are not pursuing certain types of resources, we are not exploring for heavy oil or investing in oil sands. It is really about accessing the most carbon-efficient barrels.” Around 70 percent of the world’s discovered oil resources is heavy oil and bitumen, both highly viscous crudes that are more complex and energy-intensive to extract and process than lighter crude, according to the U.S. Geological Survey. The comments from a senior oil executive may raise alarm bells for oil-rich countries such as Venezuela and Canada that mostly produce heavy oil. The retreat from energy-intensive oil production in Canada and elsewhere is already taking place. Statoil sold its entire Canadian oil sands business late last year to Athabasca Oil Corp, and Royal Dutch Shell, ConocoPhillips and Marathon Oil have all scaled back their operations in the country. Statoil is now exploring for new resources offshore Norway and Brazil where oil is lighter and abundant. “The world needs to develop more efficient barrels... Competitiveness to me is carbon competitiveness and cost competitiveness,” Saetre said. Shell, Exxon Mobil and France’s Total have also invested billions in recent years in Brazil’s oil wealth, and companies are vying to discover and develop resources in other light-oil provinces such as the North Sea as well as shale basins in the United States.
Groundwater maps could help South Africa prepare for safer fracking - The South African government has made a firm commitment to proceed with unconventional gas exploration using fracking. Speculative estimates of the potential gas resource in the country’s Karoo basin range from 13 to 390 trillion cubic feet of gas, with the lowest estimate being the most realistic.The extraction of shale gas is an attractive option. It could reduce South Africa’s huge reliance on coal for energy. But there are also uncertainties around the impact of shale gas extraction. That’s why the Academy of Science investigated South Africa’s technical readiness for shale gas development. It assessed the status of available information and technologies that can support the development of the shale gas industry. The government also commissioned the strategic environmental assessment for shale gas development. One major concern from fracking is that groundwater will be affected in the shale gas extraction process. But a groundwater vulnerability map could help assess these risks. It also has the potential to help government decide which regions can be more safely fracked to limit damage to groundwater resources. Unconventional oil and gas extraction often has an impact on groundwater. Some of these include aquifer damage. An aquifer is an underground layer of water-bearing rock from which groundwater can be extracted using a borehole. During oil and gas extraction, an aquifer canexperience dewatering, deformation, and contamination. In some cases, the damage from contamination can be irreversible, such as when aquifer contamination can’t be physically cleaned or rehabilitation is too expensive. Physical cleanup may be impossible, for instance, when certain organic contaminants cannot be effectively removed. In the US, hazardous waste cleanup sites present a technical and institutional challenge at more than 126 000 contaminated locations. Various organic compounds are also used in fracking fluids and therefore represent similar risks to groundwater resources.
As Venezuela pumps below OPEC target, oil rivals begin filling gap (Reuters) - As Venezuela’s dilapidated energy sector struggles to pump enough crude oil to meet the country’s OPEC output target, rival producers have started to plug the gap, according to OPEC and industry sources and U.S. government data. The South American country’s oil output hit a 28-year low in October as state-owned oil giant PDVSA [PDVSA.UL] struggled to find the funds to drill wells, maintain oilfields and keep pipelines and ports working. Venezuela's oil production, which has been falling by about 20,000 barrels per day (bpd) per month since last year, is on track to fall by at least 250,000 bpd in 2017, according to numbers reported to the Organization of the Petroleum Exporting Countries (OPEC), as U.S. sanctions and a lack of capital hobble operations. [For a graphic on Venezuelan and Iraqi oil shipments to the United States and India, click tmsnrt.rs/2A9EKCH] Some OPEC members expect the fall to accelerate in 2018, reaching at least 300,000 bpd, OPEC sources said. At a recent internal OPEC meeting, Venezuelan officials were asked to give a clearer picture of the country’s declining output. The topic could come up later this month at the group’s next meeting. Saudi Arabia will not raise its output to compensate for this decline as OPEC’s defector leader is focused on reducing global oil stocks, one OPEC source familiar with Saudi oil policy told Reuters this month. But heavy oil from OPEC member Iraq and non-OPEC producers Canada and Brazil are already replacing Venezuelan barrels to key customers the United States and India, according to the sources and Thomson Reuters data. The Iraq shipments remain within OPEC targets. Iraq has increased shipments of crude and condensate to India by 80,000 bpd this year as Venezuelan deliveries fell by 84,000 bpd. The second largest OPEC producer also has exported 201,000 bpd more oil to the United States this year through October as Venezuelan shipments dropped about 90,000 bpd, according to the Reuters data. Venezuela’s weaker output “could be good for market rebalance and we could see price stay at $60 for a slightly longer time,” one OPEC source said. “That doesn’t mean there will be no free riders,” the source added.
China’s Russian buying spree to continue, says leading Moscow investment bank | South China Morning Post: The recent acquisition spree by Chinese firms in Russian energy and commodities companies is set to continue into next year as relations between the two nations grow closer, and both continue to show strong support for projects involved in the “Belt and Road Initiative”, according to a senior banker at the Moscow-based, Russian state-backed investment firm VTB Capital. The fact commodity prices have rebounded from industry cycle lows is also helping further cement the nations’ ties, said Alex Metherell, co-head of global banking at VTB, the investment banking unit of Russian government-controlled VTB Bank. Levels, however, are still trading significantly below the lofty heights of a few years ago, making it easier for buyers and sellers to agree on a price for complex assets and projects, “We have definitely seen increased cross-border investments by Chinese firms in Russia in the past 18 to 24 months,” he told the South China Morning Post in an exclusive phone interview. “Strategic asset owners in Russia, Eastern Europe and Central Asia are increasingly coming to China, too, as their first port of call before going elsewhere in search of potential long-term strategic investors.”There have been six major stake purchases by Chinese corporates in Russian firms so far this year, involving total investment of US$9.1 billion, up from US$1.1 billion last year and US$2.7 billion in 2015, according to data compiled by Dealogic. The largest deals over the past decade between the nations have predominantly been in the oil and gas sector, made by state-owned Chinese buyers.
Russia warns over Urals crude oil quality - The quality of Russia's key Urals crude exports towards Europe will continue to fall next year as more of the country's low-sulfur oil flows are diverted eastward to China, Russian national oil pipeline operator Transneft warned Monday. Predicting a 2% rise in crude exports by Russian companies next year, Transneft said the sulfur content in its westbound export flows will reach "a critical level" this year, as the company has no further technological tools to improve the quality of crude flows headed west towards mostly European customers. "Due to a [planned] rise in low-sulfur crude supplies to China, there will be no more low-sulfur volumes available for improving crude quality via other directions," Transneft's vice-president Sergei Andronov said Monday. The increase in sulfur levels in Urals as Russia exports more premium crude through outlets in the far east of the country has long been predicted, and may support prices for rival crude grades such as neighboring Kazakhstan's high-value CPC crude. The latter is exported through the Russian port of Novorossiisk via the CPC pipeline, which, unusually, is not owned by Transneft, but by an international consortium. The rise of alternative crudes around the eastern Mediterranean, including CPC, Azeri and Kurdish crudes, has already depressed demand for Urals in recent years, pushing it to further flung destinations. At the request of the energy ministry, Transneft maintains the quality of crude delivered to domestic refineries stable, at around 1.63% sulfur since 2014, Andronov said. Increasing sulfur content poses a high risk to domestic refining because Russian refineries are only equipped to process crude with less than 1.8% sulfur.
Exclusive: UAE's ADNOC to venture into privatization, oil trading - CEO (Reuters) - Abu Dhabi National Oil Company (ADNOC) has embarked on a major shake-up plan to privatize its services businesses, venture into oil trading and expand partnerships with strategic investors, its chief executive said on Monday. The partial privatization plan marks a major shift by the state energy company that was founded in 1971. It aims to make ADNOC more competitive and commercially focused, operating in way that is more akin to other state-owned controlled peers. The state firm plans to sell at least 10 percent of its fuel retail unit, ADNOC Distribution, in an initial public offering (IPO) this year and could float up to 30 percent in the unit in future, CEO Sultan al-Jaber told Reuters in an interview. Other Gulf states, such as Saudi Arabia and Oman, have also embarked on selling energy assets with the slide in oil prices. Saudi Arabia’s state-run oil giant Saudi Aramco plans to list about 5 percent next year. Although ADNOC has no plans to list the holding company, it might look at selling stakes in other service companies and would explore new ways to manage its assets, al-Jaber said. “ADNOC as the holding company will continue to be wholly owned by one shareholder that is Abu Dhabi government,” he said. “But anything that is currently owned by ADNOC especially companies in the service sector are actually candidates for us to explore where we can unlock and maximize value.” He said
Iran pushes to retain Asia oil buyers as possible U.S. sanctions loom (Reuters) - Iran is pushing to retain customers for its oil in Asia, hoping that price reductions will boost the appeal of its crude compared with other Middle Eastern supply even as the potential threat of further U.S. sanctions on the country looms. The National Iranian Oil Company has in the last few weeks offered spot cargoes, ranging from light to heavy grades, to its term buyers in Asia, after setting December prices at the lowest in years against comparable Saudi grades, three sources with knowledge of the matter said. The sources declined to be identified as they were not authorized to speak with media, while NIOC was not immediately available for comment. That comes as U.S. Congress has until mid-December to decide whether to reimpose sanctions on Iran that were lifted in exchange for it limiting its nuclear activity, with President Donald Trump disavowing Tehran’s compliance with the terms of that deal. “The threat of U.S. Congress sanctions has put pressure on Iran to ‘firm up’ markets via discounts and freight adjustments for its crude,” said Tilak Doshi, consultant at Muse & Stancil in Singapore. NIOC first cut the official selling price (OSP) of Iran Heavy crude against Saudi’s Arab Medium grade for October, before lowering it again for December. That puts the Iran Heavy price for December at the widest discount against Arab Medium in over a decade, data on Thomson Reuters Eikon showed. Meanwhile, price cuts for Iranian Light placed the oil at its lowest premium in two years against Saudi Arabia’s Arab Light. The discounts were made to retain existing buyers of Iranian oil, which already have government-backed arrangements in place from when the original western sanctions hit Iran’s oil exports in 2012-2014, the sources said.
Oil prices stall as record bullish position makes funds wary: Kemp (Reuters) - Hedge funds increased their bullish position in petroleum futures and options to a new record last week, but the first signs of caution started to emerge. Fund managers raised the number of long positions in the five major futures and options contracts covering Brent, WTI, U.S. gasoline and U.S. heating oil to a record 1.31 billion barrels on Nov. 14. Minus short positions, portfolio managers held a net long position of 1.12 billion barrels in the five main contracts, which was also a new record, according to regulatory and exchange data. Fund managers held record net long positions in both gasoline (100 million barrels) and heating oil (72 million barrels), and the position in Brent (538 million barrels) was just 6 million below the record set the week before. Even in WTI, where portfolio managers have been least bullish, the net position (410 million barrels) was only 34 million below the record set in February.Benchmark Brent prices have risen almost $20 per barrel since late June, while hedge fund positions in petroleum have increased by 815 million barrels. But fund managers’ positioning has become very lopsided over the last four months raising the prospect of a sharp price correction (http://tmsnrt.rs/2zTiyfa).Hedge funds now hold 6.9 long positions in petroleum for every short position, up from 1.6 at the end of June, and one of the most stretched positions in recent years.Over the last three years, similar concentrations of long or short positions have generally been followed by a sharp reversal of the previous price trend.In the current context, fund managers already hold a record number of long positions, which raises questions about their ability and willingness to continue adding to their positions, at least in the short term.On the short side, there are few bearish positions left to squeeze, with the total number of shorts across the five major contracts already down to just 190 million barrels, from 510 million in June.
Oil eases as traders; investors grow edgy ahead of OPEC (Reuters) - Oil prices slipped on Monday, extending recent weakness ahead of an OPEC meeting next week, while a rally in the dollar negatively affected commodities across the board. Brent crude futures were down 84 cents at $61.86, or 1.4 percent, by 11:37 a.m. EST (1637 GMT), while U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 1.2 percent, to $55.85 a barrel. Oil has been under pressure for the last two weeks since peaking in early November; U.S. crude has lost 2.6 percent. The Organization of the Petroleum Exporting Countries, together with a group of non-OPEC producers led by Russia, has been restraining output since the start of this year to try to lower global inventories and support prices. The deal is due to expire in March 2018, and OPEC meets on Nov. 30 to discuss the policy. The expectation is for the agreement to be extended to cover the whole of next year. “It is widely believed that OPEC together with 10 non-OPEC countries will roll over their production for the whole of 2018, although Russia is holding its cards close to its chest,” P OPEC last week forecast demand for its own crude to rise by 460,000 barrels per day (bpd) to 33.42 million bpd next year, in contrast with a forecast from the International Energy Agency (IEA) for a drop of 320,000 bpd to 32.38 million bpd. The dollar’s move higher overnight hit commodities, including oil. Oil often moves inversely to the dollar, because oil is transacted in the dollar, and a stronger dollar theoretically makes oil more expensive for global buyers. The relationship is not consistent, but sharp reactions in the dollar can affect commodities, and vice versa.
Crude Oil Prices Start the Week on The Backfoot - - Crude prices were a bit lower to start the week on Monday, as reduced expectations for an extension of OPEC-led output curbs combined with fears over rising U.S. output weighed on sentiment.Brent crude futures, the benchmark for oil prices outside the U.S., shed 17 cents, or around 0.3%, to $62.55 a barrel by 3:25AM ET (0825GMT).Meanwhile, U.S. West Texas Intermediate (WTI) crude futures slipped 4 cents, or about 0.1%, to $56.66 a barrel.Oil prices jumped more than 2% on Friday, but failed to offset their first weekly loss in six weeks, amid ongoing investor fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies.Domestic U.S. output has rebounded by almost 15% since the most recent low in mid-2016, casting doubts over the past few months' narrative of tightening energy markets.Meanwhile, growing concern that Russia was reluctant to support an extension of an existing OPEC-led production cut agreement further weighed.Under the original terms of the deal, OPEC and 10 other non-OPEC countries led by Russia agreed to cut production by 1.8 million barrels a day (bpd) for six months. The agreement was extended in May of this year for a period of nine more months until March 2018 in a bid to reduce global oil inventories and support oil prices.Discussions are continuing in the run-up to the Nov. 30 meeting, which oil ministers from OPEC and the participating non-OPEC countries will attend.In the week ahead, trade volumes are expected to remain light around Thursday's Thanksgiving holiday and Friday's shortened trading session.Market participants will eye fresh weekly information on U.S. stockpiles of crude and refined products on Tuesday and Wednesday to gauge the strength of demand in the world’s largest oil consumer.In other energy trading, gasoline futures declined 0.6 cents, or 0.4%, to $1.739 a gallon, while heating oil lost half a cent to $1.942 a gallon. Natural gas futures dropped 5.6 cents, or 1.8%, to $3.040 per million British thermal units.
Oil Prices Stuck Ahead Of OPEC Meeting --Oil prices are in a holding pattern ahead of the OPEC meeting at the end of next week. The consensus expectation is for an extension, although there are some rumblings about unease with the Russian delegation. “There seems to be some equivocation by the Russians about extending the OPEC deal,” said John Kilduff, founding partner at Again Capital. “With the door being left open, you’re seeing the market take a hit on a potential unraveling.” Data from OPEC suggests Venezuela could continue to see its oil production erode, with losses expected at 250,000 bpd in 2017. The losses could accelerate next year, jumping to 300,000 bpd. Some think it could be even worse. An OPEC source told Reuters that Saudi Arabia would not increase production in order to compensate for falling Venezuelan output. Still, Reuters points out that rising heavy oil production from Iraq, Canada and Brazil are offsetting the losses. Nebraska regulators gave the greenlight to the Keystone XL pipeline, removing one of the last barriers for the decade-old proposal. However, Nebraskan officials approved an alternative route, not TransCanada’s preferred route. That means that there could be new litigation that stands in the way of construction. Environmental groups argue that the alternative route has not yet been vetted. As some automakers shift aggressively towards electric vehicles, the oil majors are spending heavily to keep the internal combustion engine alive. The WSJ reports that ExxonMobil, Royal Dutch Shell and BP (NYSE: BP) are seeking to develop the next generation of engine lubricants, which could help boost fuel efficiency, allowing gasoline-fueled vehicles to compete. U.S. gasoline consumption hit a record high for the month of October, according to the American Petroleum Institute. Total deliveries of petroleum products hit 19.9 mb/d in October, 1.1 percent higher than a year ago. Gasoline demand averaged 9.3 mb/d.
Oil rises ahead of OPEC meeting as further output cuts expected -- (Reuters) - Oil rose on Tuesday, supported by expectations of an extension next week to OPEC output cuts, but prices remained under pressure from signs of higher output in the United States. Brent crude oil LCOc1 was up 17 cents at $62.39 a barrel at 1452 GMT. U.S. light crude CLc1 was at $56.72, up 30 cents. Analysts said Brent was expected to fluctuate in a narrow range, from $61 to $63, as the market awaited the outcome of the Organization of the Petroleum Exporting Countries’ meeting on Nov. 30. OPEC, together with a number of non-OPEC producers led by Russia, has been restraining output this year in an effort to end a global supply overhang and prop up prices. At its meeting next week, the group is widely expected to extend the deal beyond its March 2018 expiry date. “The market is just waiting for confirmation that OPEC wants to move on with the extension,” said Ole Hansen, senior manager at Saxo Bank. But doubts about the willingness of some participants including Russia to keep restricting production have led traders to take a more cautious approach and weighed on prices. “Against the positive news we have some comments from Russia which could indicate that they at this stage prefer to wait and see,” Hansen said. Russian news agency TASS reported on Tuesday that the country’s oil producers had met with the energy ministry to discuss a six-month extension, as opposed to the nine months originally floated by President Vladimir Putin. But the biggest headache for OPEC has been a rise in U.S. drilling activity, led by shale oil producers.
WTI Tops $57 After Biggest Crude Draw In 3 Months WTI/RBOB bounced today in anticipation of a reversal of the last two week's builds in crude inventories, and bulls were not disappointed by the API print. Jan '18 WTI pushed above $57 but RBOB fell after a big crude draw (though gasoline build).“It looks like we are going to get a draw in crude oil inventories. That’s somewhat supportive,” John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund, said by phone.Investors are also “looking ahead to the OPEC meeting, and despite some of that dithering by Russia, the consensus is they are going to come together and extend the output cuts.”Additionally, Oil Vol dropped to 8 month lows...“When you get into a solid, one-way trend, the volatility tends to come down because there’s not really a sense of an impending doom to the downside or even a real explosive upside breakout," API:
- Crude -6.356mm (-2.2mm exp) - biggest draw since August
- Cushing -1.8mm
- Gasoline +869k
- Distillates-1.67mm
Crude inventories up the last 2 weeks and a surprise gasoline build spooked markets but if API data holds this week's crude draw is the largest since August and the Cushing destocking is the largest since July. However, Gasoline saw another modest (surprise) build.
Oil Price Drop Imminent If Moscow Says "No" To Extension -- As the November 30 meeting in Vienna of OPEC and its partners in the oil production cut deal nears, worry has returned among traders: one of the brokers of the deal might decide to walk out on the deal instead of participating in another extension.We’re talking about Russia, the world’s top producer and exporter, who many believe played OPEC and specifically its leader, Saudi Arabia, by agreeing to a relatively minor production cut from its nearly record-high rate of production. Reports emerged last week that Russia is considering a delay on the decision to extend the cut. That’s after Energy Minister Alexander Novak hinted more than once that from Moscow’s perspective, this decision is far from urgent. With a budget based on Brent at US$40, Russia is indeed in a sweet spot compared with its partners in the deal: it can remain in the black at any price above US$40. But there may be another reason for Moscow deciding to opt out of the extension.Lower oil prices could actually be more beneficial for the Russian economy.Macro-Advisory analyst Chris Weafer lists six ways in which lower oil prices would be better for Russia, and all of these make sense, counterintuitive as this line of argument might seem at first glance.For starters, the higher the price of oil, the greater the risk of another collapse down the road. The more oil costs, the more producers will invest in new production, possibly leading to a repeat of the 2014 collapse. Or prices could simply take a dive once the OPEC deal ends, which it must at some point.A higher oil price would also likely compromise a budget reform currently in the works, which aims to rein in spending. More importantly, Russia’s economic diversification efforts may well be compromised if oil prices remain higher—a point we’ve made repeatedly on Oilprice, not just with respect to Russia but to all oil-dependent economies.According to Weafer, however, renewable energy does not play a large part in this diversification. He says that stifling investments in renewable energy is one more reason for Moscow to want oil prices to fall: the higher oil prices are, the more attractive renewable energy becomes.Yet another reason is that Moscow prefers to keep the ruble cheaper as this stimulates exports, curbs imports, and boosts competitiveness. Traditionally, the Russian currency has followed Brent’s moves closely, but this link has now been severed thanks to a fiscal rule mechanism employed by the Russian Finance Ministry that involves converting more rubles into forex as tax on the oil industry rises, pressuring the local currency. If, however, Brent goes high enough, there may be a spike in speculative interest in rubles, which will cause the currency to rise, too.
Oil Jumps in New York as U.S. Supply Drop Adds to OPEC Optimism - Oil settled at a two-year high as a drop in U.S. crude stockpiles added optimism to a rally underpinned by hopes for an OPEC deal extension.Futures in New York surged 2.1 percent to close above $58 a barrel for the first time since mid-2015. Crude inventories fell by 1.86 million barrels last week, the Energy Information Administration said Wednesday. Prices briefly dipped after the report as the draw came in smaller than the 6.36 million decline posted by the American Petroleum Institute. Meanwhile, an outage on TransCanada Corp.’s Keystone pipeline has led inventories to contract in the Cushing, Oklahoma distribution hub.“There is a fundamental under-supply right now in the global oil market, which is by definition bullish,” There’s a “growing recognition in the market-place, that global inventories are coming down and by a substantial amount.” The U.S. benchmark has jumped more than 6 percent this month amid signals that the Organization of Petroleum Exporting Countries and its allies may agree to prolong supply curbs beyond March when producers meet in Vienna next week. OPEC will extend its deal through the end of 2018 when the group meets on Nov. 30, according to a Bloomberg survey of analysts and traders. The cartel is said to have invited another 20 non-members to its meeting in an effort to rebalance world oil markets, according to a person familiar with the matter. “If they confirm that the cuts will be extended for a considerable length of time, let’s say nine more months, and everybody will continue to be covered who has been covered before, that may spur some additional uplift in oil.” West Texas Intermediate for January delivery advanced $1.19 to settle at $58.02 a barrel on the New York Mercantile Exchange, the highest level since June 30. Total volume traded was about 52 percent above the 100-day average.
WTI/RBOB Slide After Smaller Than Expected Crude Draw, New Record High Production -- With WTI at its highest since July 2015, vol at 8mo lows, and the front-end flipped into backwardation for the first time since Nov 2014, it appears a lot of hope is priced into continued equilibration (and OPEC). Last night's API (crude draw) provided some more confirmation but this morning's DOE data disappointed with a smaller than expected crude draw, and production rose once again to a new record high.“Domestic production is going to be the big nugget that everybody will be racing to see, in terms of whether those levels continue to rise or not,” John Kilduff, a partner at Again Capital, says.“They likely will, so that can be a counter-balance to the drawdown” DOE:
- Crude -1.86mm (-2.2mm exp)
- Cushing -1.827mm
- Gasoline +44k (+1mm exp)
- Distillates +269k
DOE disappointed expectations with a considerably smaller than expected crude draw (and well below API) and modest product builds...
Oil Prices Unmoved By Bullish EIA Report - A day after the American Petroleum Institute helped prop WTI up by reporting a 6.356-million-barrel inventory draw, the Energy Information Administration chimed in, reporting a much smaller decline of 1.9 million barrels in crude oil inventories for the week to November 17. At 457.1 million barrels, the EIA said, crude oil inventories are within the upper half of the seasonal average. Analysts polled by Platts expected a draw of 2.1 million barrels in crude oil inventories and a build of 1 million barrels in gasoline stockpiles.According to the EIA, gasoline stockpiles remained unchanged last week, after a 900,000-barrel build in the previous reporting period. That build followed a hefty build of 3.3 million barrels a week earlier and is more normal for this time of year when there is less driving and less demand for the most popular passenger vehicle fuel.Gasoline production last week averaged 10.4 million barrels daily, the EIA also said, up from 9.9 million bpd in the week before. Refineries operated at 91.3 percent of capacity, processing 16.8 million barrels of crude daily, versus 16.6 million bpd a week earlier.In addition to doubts about the OPEC oil deal extension, this week WTI received support from Canada: the closure of TransCanada’s 600,000-bpd Keystone pipeline due to a leak offered fresh support to prices, suggesting next week’s EIA report could include another inventory draw as a result of this suspension.As for OPEC’s meeting, most analysts are still certain it will result in an extension, despite reports that Russia may not be all-in. In fact, according to some, these reports are only a tool to get prices even higher prior to the extension announcement, which won’t be a great surprise, so it will not have that much of a boosting effect on prices. In the meantime, traders remain wary of making any big bets on oil in case something unforeseen happens in the run-up to the OPEC meeting, due next Thursday. WTI traded at US$57.73 a barrel at the time of writing, and Brent crude was changing hands at US$62.69 a barrel.
US Rig Count Up by 8 This Week to 923; Wyoming Up 4 - The number of rigs exploring for oil and natural gas in the U.S. increased by eight this week to 923. That's up from the 593 rigs that were active a year ago. Houston oilfield services company Baker Hughes said Wednesday that 747 rigs sought oil and 176 explored for natural gas this week. The weekly tabulation, normally released on Friday, was distributed early this week because of the Thanksgiving holiday.Among major oil- and gas-producing states, Wyoming gained four rigs while Colorado, Louisiana, New Mexico and Texas were up one apiece. Utah declined by one. Alaska, Arkansas, California, North Dakota, Ohio, Oklahoma, Pennsylvania and West Virginia were unchanged.The U.S. rig count peaked at 4,530 in 1981. It bottomed out in May of 2016 at 404.
The growing rig count maintains its November momentum - Houston Chronicle: U.S. oil and gas drilling activity increased for the third straight week, demonstrating new momentum for the energy sector heading into the holiday season. Nine more rigs drills for oil were added throughout the country, although the natural gas rig count dipped by one, creating a net gain of eight rigs for the week. This follows a week that saw a big surge in gas rigs and a week before that which had another large jump in oil rigs. U.S. oil prices are currently hovering near two-year highs, and the drilling activity has picked back up after lagging in the late summer and early fall.Only Wyoming saw a big jump with four active drilling rigs added last week, while the other gains were spread out. Texas, Louisiana, Colorado and New Mexico each added one net rig, according to weekly data collected by Baker Hughes. The U.S. rig count is now up to 923 rigs, down from a July peak of 958. Oil rigs account for 747 of the total. The total U.S. rig count is up from an all-time low of 404 rigs in May 2016. U.S. oil was selling above $57 a barrel in early afternoon trading in New York. West Texas' Permian Basin now accounts for 393 rigs, which is more than half of all the nation's oil rigs. The next most active area is Oklahoma's Cana-Woodford shale with 73 rigs, recently surpassing Texas' Eagle Ford shale with 67 rigs. Texas is home to 450 rigs overall, while Oklahoma is second with 122 rigs. New Mexico is next with 69 rigs, having passed Louisiana for third.
US Oil Rig Count Rises Amid Record Breaking Production -- The number of oil and gas rigs in the United States rose again this week. The boost in the number of active oil rigs this week brings the total gained in November to 10—the first monthly gain since July. Oil and gas rigs combined were up by 14 in November—also the biggest increase seen since July, in a sign that drillers are once again eager to add rigs after scaling back in August. This week, the number of active oil rigs increased by 9, with gas rigs falling by 1. The Permian basin, after gaining two rigs this week, now boasts 165 more rigs than this time last year, a staggering 72-percent increase. The WTI and Brent benchmarks rose earlier today on a small crude oil inventory decline as reported by the EIA, further supported by the Keystone pipeline shutdown that took 600,000 bpd offline. WTI and Brent are both trading at levels not seen since mid-2015. The total oil and gas rig count in the United States now stands at 923 rigs, up 330 rigs from a year ago—a 55 percent increase. The number of oil rigs stands at 747 versus 474 a year ago (+57 percent). The number of gas rigs in the US now stands at 176, up from 118 a year ago (+49 percent). WTI was trading up on Wednesday at 1.76 percent at $57.83 at 1:38pm EST. Brent crude was trading up 0.69 percent at $62.75 at that time. Along with an increase to the number of active oil rigs, US crude oil production was up for the week ending November 17 at 9.648 million barrels per day—another new high for 2017 as new highs are seemingly reached each week.
Oil price rises to 2-year high above $58 US on supply slowdown - The benchmark North American oil price hit its highest price in 2½ years on Wednesday as lower production from Canadian oilsands coupled with reduced inventories in the U.S. to push down supply.The price of West Texas Intermediate touched $58.05 US a barrel a little before 6 a.m. ET, up more than a dollar from Tuesday's close. The U.S. crude price is now up by about 35 per cent since a low in June. Two factors in the recent gain were warnings from two major oilsands companies that they would pump less oil this month and next. Royal Dutch Shell told its customers that output at its 255,000-barrel-per-day upgrader in Scotford, Alta., would be reduced next month, and Syncrude said it would cut volumes from the 350,000-barrel-per-day plant in northern Alberta by about five per cent, Reuters reported.Last week, the Keystone pipeline that carries 590,000 barrels per day of crude from Alberta's oilsands to markets in the United States, was shut down after 5,000 barrels of oil spilled in South Dakota. That prompted a shutdown of the pipeline while the mess could be cleaned up, and that's also pushing up the oil price. On Tuesday, the American Petroleum Institute reported that oil inventories dropped by 6.4 million barrels last week, far more than what analysts were expecting.Oil inventories tend to decline through the summer months — the busiest driving season — but this year's decline is stretching even later than usual.
WTI flips into big backwardation after pipeline spill: Kemp- (Reuters) - U.S. crude futures prices have swung into substantial backwardation after a spillage on the Keystone pipeline severely reduced crude deliveries from Canada into the U.S. Midwest. U.S. crude futures, also known as West Texas Intermediate (WTI), are based on crude delivered into the tank and pipeline system around Cushing, Oklahoma. Futures prices are therefore very sensitive to anything that affects the regional supply-demand balance in the Midwest. After the spill on Nov. 16, the calendar spread between WTI futures for delivery in January and July 2018 has surged from a contango of 2 cents a barrel to a backwardation of $1.17. The six-month WTI spread is trading at the highest level since October 2014, a sure sign traders expect stocks around Cushing to tighten significantly after the pipeline outage (http://tmsnrt.rs/2AsNe7K ). U.S. crude prices have risen much more sharply than Brent in recent sessions, narrowing the big gap between the two that started to open this summer and reached a peak in early November. U.S. crude futures for delivery in January are now trading only $5 a barrel below Brent, down from a discount of $6.70 earlier in the month. In reality, the Keystone spill has accelerated an adjustment of Midwest stocks and prices that had already begun as traders responded to the huge price differential by routing more crude to the coast. Cushing crude stocks rose steadily between the middle of August and the start of November, even as stocks declined in the rest of the country, especially on the U.S. Gulf Coast. (http://tmsnrt.rs/2Aqq7e2 ) Stocks at Cushing increased in 10 of the 11 weeks between Aug. 18 and Nov. 3 by a total of more than 8 million barrels, U.S. Energy Information Administration (EIA) data shows. By contrast, stocks in the rest of the country declined in seven of 10 weeks by a total of 14 million barrels. The contrast with the main refining centre on the Gulf Coast is even more stark, where stocks fell by 16 million barrels over the same period. Even before the Keystone spill, WTI futures had moved from a broad contango in early October to nearly flat in November, reflecting the shifting supply-demand-stocks dynamic at Cushing. Local oversupply was starting to clear and the pipeline outage will accelerate the process significantly.
U.S. oil hits 2-year high on pipeline outage, lower inventories - (Reuters) - U.S. crude hit a two-year high in thin trade on Thursday as the shutdown of a major crude pipeline from Canada and a draw on fuel inventories pointed to a tightening market, despite rising output from U.S. producers. West Texas Intermediate crude was up 54 cents at $58.56 per barrel by 2:00 p.m. EST (1900 GMT), close to a two-year peak of $58.58 touched earlier in the session. Brent crude settled at $63.55 per barrel, 23 cents above its previous close. Trading volumes were thin because of the Thanksgiving holiday in the United States. The shutdown on TransCanada Corp's 590,000-barrel-per-day Keystone pipeline following a spill last week has helped drive oil prices higher because of expectations it will reduce crude stocks in the U.S. storage hub of Cushing, Oklahoma. "Inventories should drain sharply in the next few weeks given the uncertain timeline for a restart of the Keystone pipeline, a major artery for Canadian heavy oil barrels into the heart of the Cushing hub," Prices also found support from a drawdown in commercial fuel inventories in the United States. U.S. stocks fell 1.9 million barrels in the week to Nov. 17, and have dropped 15 percent from record highs in March to below 2016 levels. The market shrugged off data showing U.S. output has risen by 15 percent since mid-2016 to a record 9.66 million bpd, helping turn the United States from the world's biggest importer to a major exporter.
Oil dips after US crude hits near 2-year high on pipeline shutdown - Oil prices eased on Thursday, with U.S. crude falling away from two-year highs reached the day before, but the shutdown of the Keystone pipeline and a drawdown in fuel inventories continued to bolster markets despite worries over rising output. U.S. West Texas Intermediate (WTI) crude futures were at $57.89 a barrel at 0749 GMT, down 13 cents, or 0.2 percent, from their last settlement, but still close to 2015-highs of $58.15 a barrel reached on Wednesday. Brent crude futures were at $63.14 per barrel, 18 cents, or 0.3 percent, below their last close. WTI has been buoyed by the shutdown of the 590,000 barrel-per-day (bpd) Keystone pipeline, one of the largest crude pipelines from Canada to the United States, as well as by another drawdown in commercial fuel inventories that came despite record U.S. oil production. "Lower supplies into the U.S. from the north and robust exports from the south are likely to support a further reduction in U.S. inventories," said Ole Hansen, head of commodity strategy at Saxo Bank. U.S. crude inventories fell 1.9 million barrels in the week to Nov. 17, to 457.14 million barrels. Stocks have dropped by 15 percent from their records in March, to below 2016 levels. The inventory drop came as the Keystone pipeline connecting Canada's oilfields to the United States was shut last week after an oil spill in South Dakota. Operator TransCanada is cutting deliveries at least until the end of November. In a sign of a tightening market, the WTI forward curve has moved from contango, when prices for future delivery are more expensive than those for immediate dispatch, into backwardation, where spot prices are higher than those for later delivery. Markets are also tightening globally due to an effort led by the Organization of the Petroleum Exporting Countries (OPEC) and a group of non-OPEC producers, including Russia, to withhold output.
US oil prices hit fresh two-year highs on Keystone pipeline outage (Reuters) - U.S. crude oil hit fresh two-year highs on Friday, as the shutdown of a major crude pipeline from Canada to the United States tightened North American markets. A fuel dispenser is seen at a petrol station in Riyadh, Saudi Arabia October 8, 2017. REUTERS/Faisal Al NasserTrading activity is expected to be very low on Friday due to the U.S. Thanksgiving holiday. U.S. West Texas Intermediate (WTI) crude futures were at $58.37 a barrel at 0206 GMT, up 35 cents, or 0.6 percent from their last settlement. They reached a high of $58.58 a barrel early on Friday, the highest level since July 1, 2015. In a sign of a tightening market, both crude benchmarks are in backwardation, where spot prices are higher than those for future delivery, which makes it unattractive for traders to store oil for later sale. The closure of the 590,000 barrels per day (bpd) Keystone pipeline following a spill last week has helped drive up U.S. crude as it reduces stocks in the storage hub of Cushing, Oklahoma, traders said. Markets have also been tightening globally due to an effort by the Organization of the Petroleum Exporting Countries (OPEC) and a group of other producers, including Russia, to withhold 1.8 million bpd of production. The deal to restrict output expires in March 2018, but OPEC will meet on Nov. 30 to discuss its policy, and it is expected to extend the cuts. “The Agenda for the OPEC meeting is out and it’s only a 3-hour meeting. That suggests that a broad consensus has been built and the meeting is really just a rubber stamp to agree the extension of the Saudis’ favored 9-month extension period,”
OilPrice Intelligence Report: A Big Week For Oil Bulls: Oil prices rose sharply in early trading on Friday on renewed optimism around an OPEC cut, which came a few days after news that the Keystone pipeline would remain mostly offline for a few weeks. Also, the EIA data from mid-week showed an unexpected inventory decline. Taken together, the news meant that oil bulls were on the march at the close of the week. TransCanada said that its Keystone pipeline would be offline for weeks, cutting crude deliveries through the 590,000-bpd pipeline by 85 percent. Last week the pipeline spilled an estimated 5,000 barrels of oil in South Dakota, knocking the pipeline offline. After the announcement, oil prices shot up on Wednesday on expectations of tighter supply in the United States. Meanwhile, WTI futures flipped into a state of backwardation, the first time the futures curve has been downward sloping in years. Backwardation could help accelerate inventory drawdowns. No surprise here, but Reuters reports that top OPEC officials are pushing for an extension through the end of 2018 ahead of the upcoming meeting on November 30. “The Saudis are lobbying to have a decision in November for nine months,” a senior oil industry source told Reuters. Russia remains the wildcard, as Moscow indicated in recent weeks that it had reservations about an extension. However, by early Friday, there were reports that Russia was getting close to coming on board. Bloomberg reported that Russia and OPEC agreed to a framework that included an extension through the end of 2018, although crucial details remained unanswered. One idea includes linking the amount of production cuts to the overall supply/demand balance in the market. Another idea would be to make explicit the fact that the deal could be renegotiated early next year in case market conditions change. OPEC officially meets on November 30 in Vienna, where they hope to announce the finalization of some agreement. . After several consecutive months of sharp declines in the rig count, the U.S. oil industry added more rigs back into operation for the third week in a row. The oil rig count jumped by nine, while the natural gas rig count fell by one. With several weeks of data in the books, there is growing evidence that the rig count bottomed out again, and is now on the rise, moving in tandem with the resurgence in oil prices. The price rally since September seems to have sparked a drilling revival.
U.S. oil prices climb as traders focus on disruptions, OPEC meeting - U.S. oil prices finished at a 2½-year high in an abbreviated session on Friday, as investors focused on a disruption to a major crude-oil hub in Oklahoma and looked ahead to a key OPEC meeting next week. West Texas Intermediate crude futures for January delivery, the U.S. benchmark rose 93 cents, or 1.6%, to $58.95 a barrel, settling at levels not seen since the summer of 2015. The contract has been inching closer in recent sessions, to attempt to eliminate the gap with Brent oil, which added 31 cents, or 0.5%, to $63.86 a barrel. For the week, WTI gained 4% and Brent futures, the international benchmark, marked a 1.8% climb. WTI has posted three weekly gains in a row, while Brent has logged four consecutive weekly gains. Crude prices have been on the rise as inventory data from the U.S. Energy Information Administration showed crude stockpiles fell by 1.9 million barrels last week, a sign that the rebalancing in the oil market is having an impact on U.S. storage, even though the decline was less than some expected. Trading in crude futures settled an hour earlier on Friday, at 1:30 p.m. Eastern, following the observance of Thanksgiving in the U.S. on Thursday. Adding to that bullish momentum on the session, Keystone pipeline operator TransCanada said Tuesday that flow from its pipeline to the U.S. would be reduced by 85% through the end of November, after roughly 5,000 barrels of oil leaked in South Dakota last week. The topic of rising U.S. output is expected to be on the table at the meeting of Organization of the Petroleum Exporting Countries Nov. 30, which will be attended by non-OPEC members. Some expect the meeting will yield an extension to a production-cut deal that was hammered out in January, but analysts warned that the market could be setting itself up for disappointment. Early reports suggest that one of the biggest non-OPEC crude producers, Russia, is in support of extending a current pact to limit crude output, set to end March 2018, to the end of next year.
Is $40 WTI Now More Realistic Than $60? - The current rise in oil prices is more of a fear trade right now, driven by fear of what is going on in the Middle East, rather than a result of growing OPEC chatter or inventory reports, Todd Horwitz, chief strategist at Bubbatrading.com, told Bloomberg on Wednesday.“The oil premiums are very narrow going out to the future, which means that this is more of a fear trade in the front month,” Horwitz said on ‘Bloomberg Markets’.“To me, this is more of just another farce of what OPEC is trying to do, and trying to push these prices higher,” the strategist noted.OPEC and its non-OPEC partners in the production cut deal are scheduled to meet in Vienna on November 30 to discuss the extension of their pact.While just a month ago a nine-month extension to the end of 2018 was the base case of all analysts, now there are growing voices that OPEC may delay the decision to early next year. The constant OPEC chatter and the return of some geopolitical risk premium in oil prices - with Saudi Arabia’s purge, heightened Saudi-Iran tensions, and the Iraq-Kurdistan standoff - have pushed oil prices to their highest in two years over the past few weeks. According to Horwitz, however, the WTI price has little room to rise from its current price of around $58 per barrel, because U.S. shale will return stronger.
Saudis push for nine-month extension of OPEC-led oil cut: sources (Reuters) - Top crude exporter Saudi Arabia is lobbying oil ministers to agree next week on a nine-month extension to OPEC-led supply cuts, sources familiar with the matter said, as Riyadh seeks to ensure a price-sapping glut is eradicated. The Organization of the Petroleum Exporting Countries, non-member Russia and nine other producers are cutting oil output by about 1.8 million barrels per day until March 2018, and will discuss extending the deal at a Nov. 30 meeting in Vienna. Oil prices have risen to almost $65 a barrel, the highest since 2015, supported by lower inventories. However, OPEC is wary prices could fall again since excess supply persists, while a flare-up in Middle Eastern political tensions has also played a part in the rally. “The Saudis are lobbying to have a decision in November for nine months,” said a senior oil industry source with knowledge of the matter who declined to be identified. Indications of support for a nine-month extension have come from the very top in Saudi Arabia, OPEC’s de facto leader, and Russia, the largest non-OPEC producer involved in the agreement. Saudi Crown Prince Mohammad bin Salman signaled he was supportive of extending the agreement further into 2018, following remarks by Russian President Vladimir Putin on Oct. 4 that the deal could be stretched to the end of next year.
Russia and OPEC Agree on Framework to Extend Oil Cuts - OPEC and Russia have crafted the outline of a deal to extend their oil production cuts to the end of next year, although both sides are still hammering out crucial details, according to people involved in the conversations. The Organisation of Petroleum Exporting Countries and several non-OPEC nations led by Russia will meet next week in Vienna to discuss prolonging their output curbs. Moscow had been hesitating over the need for an extension now because the current deal doesn’t expire until the end of March. After days of talks, Moscow and Riyadh now agree they should announce an additional period of cuts at the Nov. 30 meeting, the people said, asking not to be named because the conversations are private. Russia wants the extension deal to include new language that would link the size of the curbs to the health of the oil market, they said. “The goal to re-balance the market hasn’t been met in full yet, so everyone is in favor of extensions to reach final goals, Russia also supports these proposals,” Energy Minister Alexander Novak said in an interview with RBC television on Friday. “Different options are considered now, we will discuss details at the Nov. 30 meeting.” Russian President Vladimir Putin talked on the phone with Saudi King Salman bin Abdulaziz on Nov. 21, during which they “emphasized importance of further coordination between Russia and Saudi Arabia in the global hydrocarbon markets,” according to a Kremlin statement. The deal isn’t finalized as Russia and Saudi Arabia haven’t yet agreed on the new language, the people said. Oil ministers are due to start arriving in Vienna for the talks early next week. West Texas Intermediate crude, the U.S. benchmark, extended gains to the highest level since July 2015. Futures for January delivery rose as much as 1.6 percent to $58.92 a barrel in New York.
OPEC chatroom dead as Qatar crisis hurts Gulf oil cooperation (Reuters) - OPEC’s most powerful internal alliance, bringing together the oil producer group’s Gulf members, is disintegrating fast. As a six-month-old spat between Saudi Arabia and Qatar deepens, the organization’s Gulf ministers will have to scrap their tradition of meeting behind closed doors to agree policy before OPEC holds its twice-yearly talks, OPEC sources say. “We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chatroom. Now it’s dead,” said a senior source in the Organization of the Petroleum Exporting Countries. Four other sources said there had been no official contact on oil policy between the Gulf Arab nations, in a grouping known as the Gulf Cooperation Council (GCC). The GCC includes OPEC members Saudi Arabia, the United Arab Emirates, Kuwait and Qatar and non-OPEC Oman and Bahrain. OPEC meets on Nov. 30 in Vienna to decide whether to extend global output cuts beyond March. OPEC kingpin Saudi Arabia and the UAE cut ties with Doha in June, saying Qatar backed terrorism and was cozying up to rival Iran. Qatar rejected the accusation. “The ministers can’t meet,” another OPEC source said. “They may relay the message through the Kuwaiti or the Omani oil ministers, but Saudi and the UAE cannot meet publicly with the Qataris.” Kuwait and Oman have refrained from taking sides in the dispute, over which Kuwait’s Emir Sheikh Sabah has led regional mediation.
Israel Gives Official Confirmation Of Covert Ties With Saudi Arabia -- Yet more confirmation emerged today regarding the recently established relationship between Israel and Saudi Arabia, which is being defined by a shared desire to see Iranian influence and expansion rolled back in the Middle East. For the first time a high level Israeli government official has formally acknowledged the increased ties between the two countries which have historically been bitter enemies, and which have never had official diplomatic relations. The historic news, which is worrisome for the fact that it could bring the region closer to major war as the newfound "allies" eye the Iranian proxy Hezbollah, follows the leak of an Israeli diplomatic cable sent to all Israeli embassies throughout the world which revealed Israeli and Saudi behind the scenes coordination. The cable gave instructions to Israeli diplomats to express support for the Saudi war against Shia forces in Yemen and also urged embassies to aggressively lobby their host governments to take steps toward pushing Hezbollah out of Lebanon. And today the Times of Israel reports the following Reuters story under the bombshell headline, Israel Has Secret Contacts With Saudi Arabia, Senior Minister Reveals:Energy Minister Yuval Steinitz said on Sunday that Israel has had covert contacts with Saudi Arabia amid common concerns over Iran, a first disclosure by a senior Israeli official of such contacts. In an interview on Army Radio,Steinitz was asked why Israel was hiding its ties with Saudi Arabia, which does not have diplomatic ties with Israel.And in response Steinitz replied in the affirmative, explaining that: "We have ties that are indeed partly covert with many Muslim and Arab countries, and usually (we are) the party that is not ashamed. It’s the other side that is interested in keeping the ties quiet. With us, usually, there is no problem, but we respect the other side’s wish, when ties are developing, whether it’s with Saudi Arabia or with other Arab countries or other Muslim countries, and there is much more ... (but) we keep it secret.”
Saudi Arabia’s anti-corruption purge is all about life after oil -- Saudi Crown Prince Mohammed bin Salman’s decision to arrest scores of the country’s most prominent officials and business elites under the banner of an anti-corruption purge last week was a remarkable power play, an unprecedented move designed to concentrate all authority in the Gulf state in one man’s hands.But the radical shake-up was also about something else: preparing for life after oil.MBS, as the 32-year-old heir to the throne is widely known, has not just been detaining people — he’s also been seizing billions of dollars of their money. And he’s using this crackdown to make the case to the world that Saudi Arabia is a reformed nation cleansed of graft, and worthy of a big boost of foreign investment. In other words, the purge is more than just a way of eliminating his rivals and consolidating power. Experts say that MBS sees it as an opportunity to refill his country’s coffers while he works to modernize the stagnating Saudi economy and wean it off its near-total reliance on oil.MBS’s anti-corruption committee, which he formed just hours before the arrests began on November 4, has pledged to take “whatever measures are deemed necessary” to confiscate the assets of corrupt officials and businessmen. Saudi authorities have detained more than 200 people and frozen thousands of bank accounts. A US official briefed on the crackdown told the New York Times that the committee has even tried to get some of the people caught up in the sweep to sign over large amounts of money in order to secure better treatment while detained. (At least 17 people have required medical treatment due to abuse from authorities.) The Riyadh Chamber of Commerce and Industry estimates that if the committee attempted to retrieve all the revenue lost to corruption, it could amount to as much as $800 billion. “A key goal of the arrest campaign seems to be about replenishing state coffers,”
Saudi Purge Claims It's Latest Corporate Victim As Kingdom Holdings Sees $1.3 Billion Bank Deal Collapse --For the past couple of weeks we've written frequently about the sudden political turmoil in Saudi Arabia that resulted in two Saudi princes being killed in a span of just 24 hours and dozens others being detained on charges of corruption while having their bank accounts frozen. Here are couple of our most recent background posts on the topic:
- The Saudi Purge: The Middle-East Is On The Verge Of A New War
- If The Saudi Arabia Situation Doesn't Worry You, You're Not Paying Attention
Now, per an exclusive report from Reuters, it appears as though the latest casualty of the Saudi shakeup is a financing deal sought by the $8 billion dollar Kingdom Holdings which is owned and run by Prince Alwaleed bin Talal...at least until he was recently arrested that is Kingdom Holding’s plan to borrow money to fund new investments has stalled because owner Prince Alwaleed bin Talal has been detained in Saudi Arabia’s anti-corruption crackdown, according to four banking sources familiar with the matter. Kingdom 4280.SE had approached banks to obtain the loan, but the financing plan has been held up because the lenders are worried about potential repercussions if they lend to the prince’s company, the sources said. One of the sources, who was approached for the loan, said it would have been worth roughly 5 billion riyals ($1.3 billion). For those who aren't familiar with the company, Kingdom Holdings is a leading Saudi investment firm with stakes in prime real estate including New York’s Plaza Hotel and London’s Savoy Hotel.
Saudi Graft Settlements Could Reap Billions - Saudi authorities estimate they may be able to recover between $50 billion and $100 billion from settlement agreements with suspects detained in an anti-corruption crackdown that has implicated prominent princes, officials and billionaires, a senior official said. Suspects are being offered settlements to avoid trial, the official said, requesting anonymity to discuss the ongoing investigation. If they accept, talks are held with a special committee to work out the details. Payments are based on the amounts authorities believe suspects have amassed illegally, not their entire wealth, the official said. The purge, which saw royals and billionaires such as Prince Alwaleed bin Talal detained, shook the kingdom and reverberated abroad as diplomats, bankers and analysts sought to figure out its impact on wealthy clients as well as the struggle for power in the world’s biggest oil exporter. Prince Miteb bin Abdullah was held in the crackdown and also fired from his post as head of the powerful National Guard, a move that reinforced speculation that King Salman was preparing the ground to hand over power to his son and heir, Crown Prince Mohammed bin Salman. The purge has widened to the military. The senior official said 14 retired officers who worked at the Ministry of Defense and two retired National Guard officers had been detained on suspicion of being involved in financial contracts that were deemed corrupt. No active-duty officers have been arrested, he said. The crackdown comes at a delicate time for Saudi Arabia, an absolute monarchy grappling with the worst economic slowdown since 2009 as well as political unrest in the region, stirred in no small part by Prince Mohammed’s aggressive foreign policy to counter Iran’s influence. In the past two years, the prince has thrust Saudi Arabia into war in Yemen and led a regional boycott of neighboring Qatar.
U.S. warns citizens against risks of travel to Saudi Arabia (Reuters) - The U.S. State Department on Tuesday warned citizens to “consider the risks” when traveling to Saudi Arabia due to militant threats and the threat of ballistic missile attacks on civilians by rebels in Yemen. The warning comes two weeks after U.S.-allied Saudi Arabia said it had shot down a ballistic missile fired by Iran-aligned Houthis from Yemen towards the Saudi capital Riyadh. The missile, which the Houthis said was in response to Saudi-led air strikes on civilians in Yemen, was shot down near Riyadh airport without causing any casualties. “Terrorist threats persist throughout Saudi Arabia, including in major cities such as Riyadh, Jeddah, and Dhahran, and attacks can occur without warning anywhere in the country,” the State Department said in the warning, which was also posted on the U.S. embassy’s website. “Terrorist groups, including the Islamic State of Iraq and Syria (ISIS) and its affiliates have targeted both Saudi and Western government interests, mosques and other religious sites (both Sunni and Shia), and places frequented by U.S. citizens and other Westerners,” it added. In October, two Saudi guards were shot dead and three others injured when a gunman drove up to the gate of the royal palace in the Red Sea city of Jeddah and opened fire.
Saudi Arabia is sideshow compared to our real problems in Middle East | TheHill: It is all too easy to view the Middle East in terms of what has become something approaching the crisis of the day. The odd spectacle of Saad Hariri, the Prime Minister of Lebanon, abruptly resigning while in Saudi Arabia and remaining there for two weeks under what seemed to be house arrest on the grounds that he faced an assassination plot originating in Iran is a case in point. His resignation occurred the same day as a Houthi missile attack on Saudi Arabia from Yemen, and was followed almost immediately by an “anti-corruption” crisis in Saudi Arabia that seems to have been an effort by Crown Prince Muhammad Salman to eliminate key rivals and gain more control over the Kingdom’s private sources of wealth. The practical problem for the United States, however, is not the crisis of the day. The practical problem is the steady erosion in the U.S. position in most of the Middle East and North Africa, that U.S. success in defeating ISIS may actually have made the threat worse, and that the United states does not seem to have a clear strategy for any of the lasting problems that challenge its position in the region. With the possible exception of Morocco, every Arab country in North Africa faces critical economic problems. Libya is torn apart by civil war, and Algeria, Egypt and Tunisia are unable to create jobs and move toward broad development. Egypt has steadily lost regional influence, relied on repression rather than development, and may be tilting back toward Russian arms and security ties. What was once the anchor of the U.S. position in the region is now fragile and uncertain.
On the Destabilization of the Middle East – One of America’s favorite talking points on Iran is its “destabilizing” role in the Middle East. There’s no question that Iran does things that contribute to regional instability. In particular, it frequently supports armed non-state actors that serve as alternate sources of power inside their countries—Yemen’s rebels, militias in Syria and Iraq, and Hezbollah in Lebanon.But Iran is not the only or even the biggest contributor to Middle Eastern instability. In this area its contribution is at least matched, if not exceeded, by rival Saudi Arabia. Or, to be more specific, by one particular rival in Riyadh: Saudi Crown Prince Mohammad bin Salman (MbS). Since his father King Salman appointed him defense minister in January 2015, no single individual has done more to destabilize the Middle East or put more civilian lives in jeopardy than the future Saudi ruler. Saudi rhetoric about Iran’s “aggression” aside, it’s been Saudi aggression that has most afflicted the region on MbS’s watch. When referring to Iran, the Saudis and their allies have for many years used the term “Arab affairs”—as in, “Iran must stop meddling in Arab affairs.” As a practical matter this is a strange distinction. Leaving North Africa aside, “Arab affairs” are “Middle Eastern affairs,” and Iran, as a large and powerful Middle Eastern nation, will for better or worse continue to play a role in them. But the term isn’t meant to be a reasonable standard for Iranian behavior. Instead, it’s meant to create a reality wherein Iranian meddling in regional affairs must be resisted but the Saudis are free to meddle to their hearts’ content. Worse, the Saudis usually justify their actions as necessary to defend themselves from a supposed Iranian threat. And meddle the Saudis have—in Yemen, Syria, Qatar, and Lebanon. The result has been chaos throughout the Middle East.
In Escalating War Of Words, Saudi Crown Prince Calls Iran's Ayatollah "New Hitler Of The Middle East" -- Godwin's law states that "as an online discussion grows longer, the probability of a comparison involving Hitler approaches 1." Saudi Arabia's powerful, and controversial, 32-year-old Crown Prince Mohammed bin Salman - who in just a few months has made more local (and foreign) enemies than most of his predecessors accumulated over a lifetime, decided he does not need to wait that long, and in a glowing interview with the New York Times' Thomas Friedman, which touched on everything from the accommodations of the Riyadh Ritz-Carlton, to the recent power grab anti-corruption campaign, to Donald Trump, to the Saudi social and religious revolution, called the Supreme Leader of Iran “the new Hitler of the Middle East”, escalating the war of words between the arch-rivals. For his part, Khamenei has referred to the House of Saud as an “accursed tree”, and Iranian officials have accused the kingdom of spreading terrorism. MbS, as he is also known, and who after the recent purge is also Saudi defense minister, also slapped down the ISIS card and suggested the Islamic Republic’s alleged expansion under Ayatollah Ali Khamenei needed to be confronted.“But we learned from Europe that appeasement doesn’t work. We don’t want the new Hitler in Iran to repeat what happened in Europe in the Middle East,” the paper quoted him as saying.As reported previously, tensions between Iran and the Saudi Kingdom soared once again this month when Lebanon’s Saudi-allied Prime Minister Saad Hariri resigned in a television broadcast from Riyadh, citing the influence of Iran-backed Hezbollah in Lebanon and risks to his life. Hezbollah called the move an act of war engineered by Saudi authorities, an accusation they denied.
Nasrallah Accuses US Of "Daesh Conspiracy" As Feared 'Tehran-To-Beirut Land Bridge' Is Established -- Washington's past decade of Syria policy has been driven by fears of the so-called "Shia crescent" or Iranian land bridge which would conceivably connect Tehran with the Mediterranean in a continuous arch of influence. With events rapidly unfolding in Iraq and Syria, foremost among them the defeat of ISIS and the connection of Syrian and Iraqi national forces at the shared border, that land bridge has now been established for the first time in recent history. This week Hezbollah's Secretary-General Hassan Nasrallah has once again accused the United States and its allies in Syria of aiding ISIS. In televised remarks on Monday related to the recent fight for Albu Kamal, Nasrallah said, “The US helped Daesh as much as it could in Albu Kamal short of directly engaging forces that fought to liberate the town from Daesh.” He further accused the US of giving air cover to ISIS terrorists in Syria's east, as well as facilitating their escape from advancing Syrian army forces. But what is the truth behind what Nasrallah calls "the Daesh conspiracy"? The current geopolitics of the Syrian battlefield, and US policy and interests east of the Euphrates, in reality gives the US military every incentive to pressure the Syrian Army while at the same time allowing a Daesh escape - as even a recent bombshell BBC investigation confirmed. But to understand the intricacies of how US policy and strategy is playing out, it is important to chart the significance of the establishment of the historic "Iranian land bridge" which occurred this month. Below is a dispatch authored and submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media, who is currently on the ground in the region and has interviewed multiple officials involved in the conflict.
Lebanon Prime Minister Saad Hariri puts resignation on hold - Lebanese Prime Minister Saad Hariri announced Wednesday he was putting his resignation on hold, more than two weeks after he shocked the country by saying he was stepping down.Speaking hours after he returned to Beirut, Hariri said he had accepted President Michel Aoun's wish for him to suspend his resignation to allow for more consultations on the reasons behind the move.Hariri announced he was standing down on November 4 while in the Saudi capital, Riyadh, saying he feared his life was in danger. Lebanon said it could not accept his resignation until he returned to the country. Aoun said at the time Hariri was being held against his will in Riyadh -- a claim Hariri denied -- and speculation swirled in Lebanon that he was being held hostage. Hariri finally returned to Beirut late Tuesday, where his first stop was the grave of his slain father, former Prime Minister Rafik Hariri. On Wednesday he attended an Independence Day military parade in Beirut alongside the President before meeting with Aoun at the presidential palace. Hariri later tweeted: "Our beloved nation requires at this precise moment in its life exceptional effort from everyone, in order to protect it as it faces danger and challenges. These efforts start with an adherence to a policy of neutrality with regards to everything that hurts internal stability and our brotherly relations with the Arabs."
Lebanon's prime minister just un-resigned in the midst of a bizarre political crisis : (Reuters) - Lebanon's Saad al-Hariri on Wednesday suspended his decision to resign as prime minister at the request of President Michel Aoun to allow for dialogue, easing a major political crisis. Hariri made his announcement after returning to Beirut on Tuesday night for the first time since his Nov. 4 shock resignation in a statement broadcast from Saudi Arabia. He said all Lebanese parties must commit to keeping Lebanon out of regional conflicts, a reference to the powerful, Iran-backed group Hezbollah whose regional role is a source of deep concern in Saudi Arabia. He said hoped his decision would open "a new gateway for a responsible dialogue". "I presented today my resignation to President Aoun and he urged me to wait before offering it and to hold onto it for more dialogue about its reasons and political background, and I showed responsiveness," Hariri said in a televised statement. Thomson Reuters Hariri's resignation pitched Lebanon to the forefront of the regional tussle between Sunni Muslim Saudi Arabia and Shi'ite Islamist Iran, which backs the powerful Lebanese group Hezbollah. Lebanese state officials and senior politicians close to Hariri say Riyadh forced him to quit and held him in the kingdom, which Saudi Arabia and Hariri have denied. The resignation took even Hariri's aides by surprise. Hariri's return to Lebanon followed an intervention by France.
Saudi Arabia’s Arab Spring, at Last - Unlike the other Arab Springs — all of which emerged bottom up and failed miserably, except in Tunisia — this one is led from the top down by the country’s 32-year-old crown prince, Mohammed bin Salman, and, if it succeeds, it will not only change the character of Saudi Arabia but the tone and tenor of Islam across the globe. Only a fool would predict its success — but only a fool would not root for it. To better understand it I flew to Riyadh to interview the crown prince, known as “M.B.S.,” who had not spoken about the extraordinary events here of early November, when his government arrested scores of Saudi princes and businessmen on charges of corruption and threw them into a makeshift gilded jail — the Riyadh Ritz-Carlton — until they agreed to surrender their ill-gotten gains. You don’t see that every day. We met at night at his family’s ornate adobe-walled palace in Ouja, north of Riyadh. M.B.S. spoke in English, while his brother, Prince Khalid, the new Saudi ambassador to the U.S., and several senior ministers shared different lamb dishes and spiced the conversation. After nearly four hours together, I surrendered at 1:15 a.m. to M.B.S.’s youth, pointing out that I was exactly twice his age. It’s been a long, long time, though, since any Arab leader wore me out with a fire hose of new ideas about transforming his country. We started with the obvious question: What’s happening at the Ritz? And was this his power play to eliminate his family and private sector rivals before his ailing father, King Salman, turns the keys of the kingdom over to him? It’s “ludicrous,” he said, to suggest that this anticorruption campaign was a power grab. He pointed out that many prominent members of the Ritz crowd had already publicly pledged allegiance to him and his reforms, and that “a majority of the royal family” is already behind him. This is what happened, he said: “Our country has suffered a lot from corruption from the 1980s until today. The calculation of our experts is that roughly 10 percent of all government spending was siphoned off by corruption each year, from the top levels to the bottom. Over the years the government launched more than one ‘war on corruption’ and they all failed. Why? Because they all started from the bottom up.”
New Footage From Inside Riyadh Ritz-Carlton Reveals Princes Swapping Assets For Freedom (BBC video) A BBC reporter and film crew has gained rare access inside Riyadh's "gilded cage" - the Ritz-Carlton which became a luxury prison after a dozen or more princes were detained during the shocking events which began with Crown Prince Mohammad bin Salman's (MbS) internal purge on November 4th. BBC's tour was "facilitated" under highly controlled and coordinated conditions, as initial photographs and short cell phone videos produced during the first few days of the crackdown revealed harsher and more restricted conditions as princes and/or their staff were forced to sleep on the floor camp-style in the middle of the luxury hotel's lobby. According to the new BBC broadcast from inside the Ritz-Carlton, the princes are desperately scrambling to cut deals through their lawyers in order to secure release, this as new unconfirmed reports of torture have emerged: When people were brought here around midnight on November 4th they were understandably angry. Some of them thought it would just be a show and it wouldn't last. And then when they realized they were here to stay they were furious. Almost everyone here - 95% I was told - are willing to make a deal, to give back what are said to be substantial sums of money in order to get out of here. The torture allegations began with an explosive Daily Mail report, which said mercenaries purportedly employed by Academi, a successor to infamous US security contractor Blackwater, have been stringing up some of MBS’s “guests” at the Riyadh Ritz Carlton by their feet and savagely beating them during interrogations. Still, the Daily Mail isn't the most reputable news organization, so these early torture reports should be taken with a grain of salt. But what is certain is that the list of detained princes and businessmen, which has reportedly grown to multiple dozes, and which includes billionaires such as Alwaleed bin Talal and Mohammed Hussein al-Amoudi - the first and second wealthiest men in the country, respectively - constitutes the kingdom's elite and internationally well-connected. As we've consistently reported this is not a "corruption purge" as its being sold to international media, but in reality a massive cash grab and shakedown.
Saudi Billionaires Look for Ways to Protect Assets From Any Government Purge -- Wealthy Saudis are seeking to restructure their businesses to ring fence assets in case authorities widen their declared crackdown on corruption, according to three people with knowledge of the matter. Several family groups and businessmen who aren’t implicated in the purge are talking to local banks and international law firms about how to structure their companies to make it harder for the kingdom to confiscate or seize assets, the people said, asking not to be identified because the discussions are private. The discussions reflect the fear among many wealthy Saudis that the unprecedented purge, seen by many as an attempt by Crown Prince Mohammed bin Salman to tighten his grip on power, is set to widen. Dozens of officials, princes and billionaires, including Prince Alwaleed bin Talal, the global investor whose Kingdom Holding Co. owns stakes in companies such as Citigroup Inc., have already been targeted. Over his meteoric rise to power since his father’s accession to the throne in 2015, Prince Mohammed has emerged as the country’s predominant leader, sidelining other senior royals as he moved to control all levers of government. The crackdown was the latest move to shatter an informal agreement to rule the kingdom by consensus among members of the royal family, a system that ensured political stability but stymied economic reforms. The purge “is clearly more about the centralization of power,” “You can argue with the merits of whether that is a long-term sustainable equilibrium, but if Saudi is to implement the fast decisions it needs to transform its economy I would argue that centralization is at least necessary if not sufficient step,” he said.
'American mercenaries' are torturing Saudi princes -- Saudi princes and billionaire businessmen arrested in a power grab earlier this month are being strung up by their feet and beaten by American private security contractors, a source in the country tells DailyMail.com.The group of the country's most powerful figures were arrested in a crackdown ordered by Crown Prince Mohammed Bin Salman three weeks ago as he ordered the detention of at least 11 fellow princes and hundreds of businessmen and government officials over claims of corruption.Just last month, the Crown Prince vowed to restore 'moderate, open Islam' in the kingdom and relaxed a number of its ultra-conservative rules, including lifting a ban on women driving.DailyMail.com can disclose that the arrests have been followed by 'interrogations' which a source said were being carried out by 'American mercenaries' brought in to work for the 32-year-old crown prince, who is now the kingdom's most powerful figure.'They are beating them, torturing them, slapping them, insulting them. They want to break them down,' the source told DailyMail.com. 'Blackwater' has been named by DailyMail.com's source as the firm involved, and the claim of its presence in Saudi Arabia has also been made on Arabic social media, and by Lebanon's president. The firm's successor, Academi, strongly denies even being in Saudi Arabia and says it does not engage in torture, which it is illegal for any U.S. citizen to commit anywhere in the world. The Saudi crown prince, according to the source, has also confiscated more than $194 billion from the bank accounts and seized assets of those arrested.
Alwaleed Bin Talal Hung Upside Down And Beaten By US Mercenaries - Crown Prince Mohammed bin Salman must be worried that some of the royals rounded up during his “corruption crackdown” cash grab are holding out on him. Because the Saudi prince has reportedly hired a crew of American mercenaries who haven’t hesitated to employ an array of “enhanced interrogation” techniques.As the Daily Mail reports, mercenaries purportedly employed by Academi, a successor to infamous US security contractor Blackwater, have been stringing up some of MBS’s “guests” at the Riyadh Ritz Carlton by their feet and savagely beating them during interrogations. The claims have spread rapidly on Arabic-language social media, and even Lebanon’s president Michel Aoun has accused MbS of using mercenaries. Still, the Daily Mail isn't the most reputable news organization, so these reports should be taken with a grain of salt. 'They are beating them, torturing them, slapping them, insulting them. They want to break them down,' the source told DailyMail.com.'Blackwater' has been named by DailyMail.com's source as the firm involved, and the claim of its presence in Saudi Arabia has also been made on Arabic social media, and by Lebanon's president. The firm's successor, Academi, strongly denies even being in Saudi Arabia and says it does not engage in torture, which it is illegal for any U.S. citizen to commit anywhere in the world.
Is MBS’s supreme anti-corruption committee torturing Ritz detainees? - The London Daily Mail’s online edition on Thursday published an exclusive report claiming: “American mercenaries are torturing Saudi elite rounded up by new crown prince – and billionaire Prince Alwaleed was hung upside down ‘just to send a message.'” “They are beating them, torturing them, slapping them, insulting them. They want to break them down,” DailyMail.com quotes its source as saying. We have no direct-source verification of the specific claims in the Daily Mail piece. However, reports of beatings and torture of Saudi princes, former ministers, and leading businessmen held in the Riyadh Ritz-Carlton hotel and the nearby Courtyard Riyadh Diplomatic Quarter on allegations of corruption have been coming to light since at least November 10.Cross-checking of such reports and independent verification with diplomatic sources by now provides a high degree of confidence that torture has been taking place to extract admissions of guilt and – more important – to extract funds in the billions of dollars. The Financial Times has reported that Supreme Committee investigators and interrogators are seeking up to 70% of detainees’ wealth in return for their release. Among the individuals beaten and tortured and admitted to a hospital on November 6, according to Asia Times’ sources, was Prince Mutaib bin Abdullah, son of the late King Abdullah and deposed commander of the SANG (Saudi Arabian National Guard). The New York Times reports that as many as 17 detainees have required medical treatment. Were “American mercenaries” involved in the “enhanced interrogations”, beatings and torture? The Daily Mail source named “Blackwater” as the private US security firm involved. That’s nonsense. Blackwater no longer exists. The firm’s assets were sold in 2010 to Forte Capital Advisors and Manhattan Strategic Ventures and renamed Academi. However, it is a well-documented fact that Blackwater founder Erik Prince, after he sold Blackwater, moved to Abu Dhabi in 2011 and helped develop an 800-man foreign (mainly Colombian and South African) mercenary force for the Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan (MBZ).
As US Fuels War Crimes in Yemen, House Says US Involvement is Unauthorized - naked capitalism - Jerri-Lynn here: This Real News Network interview with Mike Weisbrot discusses the non-binding resolution the House of Representatives passed last week concerning the unauthorized role of the United States in the war in Yemen. This Saudi war has triggered an unprecedented humanitarian catastrophe, including a cholera epidemic and widespread hunger and starvation. No end to the crisis is in sight. Weisbrot is Co-Director of the Center for Economic and Policy Research in Washington, D.C. and author of the book Failed: What the “Experts” Got Wrong About the Global Economy (Oxford University Press, 2015), co-author, with Dean Baker, of Social Security: The Phony Crisis (University of Chicago Press, 2000). He writes a column on economic and policy issues that is distributed to over 550 newspapers by the Tribune Content Agency and his opinion pieces have appeared in The Guardian, New York Times, the Washington Post, the Los Angeles Times and Brazil’s largest newspaper, Folha de Sao Paulo. He is also president of Just Foreign Policy. (video with transcript)
U.N. pleads for end of Yemen blockade or 'untold thousands' will die -- The heads of three U.N. agencies urged the Saudi-led military coalition to lift its blockade of Yemen, warning that “untold thousands” would die if it stayed in place. The coalition closed all air, land and sea access to Yemen on Nov. 6 after the interception of a missile fired toward the Saudi capital, saying it had to stem the flow of arms from Iran to its Houthi opponents in the war in Yemen. Yemen has 7 million people on the brink of famine, but without the reopening of all ports, that number could grow by 3.2 million, the heads of the World Food Program, UNICEF and the World Health Organization said in a joint statement. “The cost of this blockade is being measured in the number of lives that are lost,” the statement said. “Together, we issue another urgent appeal for the coalition to permit entry of lifesaving supplies to Yemen in response to what is now the worst humanitarian crisis in the world.” U.N. Secretary General António Guterres wrote to Saudi U.N. Ambassador Abdallah al-Mouallimi to warn him that the blockade was “already reversing the impact of humanitarian efforts,” U.N. spokesman Stéphane Dujarric said Thursday. “The secretary general is very much disappointed we’ve not seen a lifting of the blockade. The secretary general and his humanitarian team are heartbroken at the scenes we’re seeing from Yemen,” Dujarric told reporters. Saudi Arabia has since said that aid can go through “liberated ports” but not Houthi-controlled Hodeidah, the conduit for the vast bulk of imports into Yemen. For months, the United Nations has warned that the closure of Hodeidah would dramatically escalate the crisis. As of Wednesday, 29 vessels, with 300,000 tons of food and 192,000 tons of fuel, had been blocked, while U.N. ships carrying $10 million of health and nutrition supplies and 25,000 tons of wheat were waiting to berth at Hodeidah, according to another U.N. statement.
Drums Along the Euphrates - Earlier today this tweet by Elijiah Magnier caught my eye. “USA protects SDF and ISIS east of the Euphrates and agreed that Russia won't fly over the area occupied by the US Forces in north-east Syria. USA is officially an occupation force in the Levant.”Seems the US and Russia have agreed to using the Euphrates as a de facto border between the SAA and its allies and the US-supported YPG/SDF… at least for a while. This is in line with statements made by Tillerson prior to the G20 summit held on 7 July in Hamburg. “The United States is prepared to explore the possibility of establishing with Russia joint mechanisms for ensuring stability, including no-fly zones, on the ground ceasefire observers, and coordinated delivery of humanitarian assistance” This temporary arrangement makes sense for Damascus. There are still plenty of fires to extinguish on Syrian territory west of the Euphrates. Why spread their forces thin again just when they are now able to concentrate their forces to address those fires. Besides, there is still plenty of time for the negotiation and reconciliation process to achieve victory without further bloodshed. I have no doubt. Syria will be whole once again. I’m sure CENTCOM sees this differently. I think the grand scheme was to establish an enduring US-controlled enclave encompassing all of Iraqi Kurdistan, Rojava and the Arab lands of eastern Syria. I bet there was a plan for establishing a new CENTCOM forward headquarters in Erbil to oversee this vast enclave. The premature Kurdish bid for independence blew a gaping hole in that plan. Iraqi Kurdistan lost its border with Syria. With that loss went CENTCOM’s secure land route from Kirkuk and Erbil to its growing bases in northeast Syria.
Trump Reportedly Tells Erdogan US Will Cease Arming Syrian Kurds - - Just after Putin hosted trilateral talks on Syria and the Middle East in Sochi involving Russia, Iran, and Turkey, President Trump spent part of his Friday after Thanksgiving on the phone with Turkey's Erdogan. While the two discussed Syria and other regional issues, it appears they broached the delicate and contentious topic of US support to Syrian Kurdish fighters (namely, the Kurdish YPG, which forms the core of the Syrian Democratic Forces). The call came amidst a flurry of diplomatic activity over the Middle East driven by the Kremlin, and follows a lengthy Trump-Putin phone call on Tuesday. Though the details of the call are still unclear, Trump outlined what was to be generally discussed in a tweet, and said this morning, "Will be speaking to President Recep Tayyip Erdogan of Turkey this morning about bringing peace to the mess that I inherited in the Middle East. I will get it all done, but what a mistake, in lives and dollars (6 trillion), to be there in the first place!" Though not verified by the US side, Turkish Foreign Minister Mevlut Cavusoglu said Trump told Erdogan during Friday's call that the US will cease supplying weapons to the Syrian Kurdish fighters, according to the AP. Turkey has long considered Syrian Kurdish militant groups to be terrorists, and Erdogan reportedly insisted at the Sochi summit that Syrian Kurds be excluded from all negotiations over the future of Syria on the grounds that they have links to the PKK. However, it is unlikely that a lasting political settlement for Syria can be negotiated and successfully held without Syrian Kurdish input.
'Facing disaster': children starve in siege of Syria's former breadbasket -- The sight of a woman weeping as she drags her malnourished children into a clinic is not rare in eastern Ghouta, which is under siege by forces loyal to Bashar al-Assad. But when one mother told Abdel Hamid, a doctor, that she had fed her four starving children newspaper cutouts softened with water to stop them from screaming into the night, even he was stunned. “I could try to describe to you how terrible the conditions are in which we are living, but the reality would still be worse,” said Abdel Hamid, who did not give his full name. More than 400,000 people still live in the region bordering Damascus that was once a breadbasket for the capital city, but has endured many of the horrors of Syria’s six-year war. The siege of eastern Ghouta has continued for years with conditions getting steadily worse. Siege Watch, a project that tracks blockades in Syria, has said the area is “on the brink of disaster”. Airstrikes have continued, with rescue workers saying 181 targeted eastern Ghouta this week. The region had long been porous, with smugglers able to maintain supply lines for some foodstuffs and goods. This ended in April after a major government offensive in the area that tightened the blockade. Aid workers and residents report that malnourishment among children is rife and there is an acute shortage of medicine and supplies. Most of the food that can be found is too expensive and airstrikes and shelling continue to devastate towns with limited supplies of electricity and clean drinking water. “Fridges don’t exist as part of our life,” said Abdel Hamid. “Actually, anything that needs electricity is not used. Thank God we don’t have cholera yet.”
The US Has Quietly Deployed More Than 500 Troops To Somalia --One of the many quiet escalations in countries where US military operations on the ground hadn’t really been well publicized in the first place, officials say that the US has more than doubled the number of ground troops in Somalia this year, and now have over 500 troops there.This is the most troops the US have had in the country since 1993, when the Black Hawk Down incident killed 18 US soldiers and led to a quick withdrawal from the nation.This year was also the first year since 1993 that any US troops died in Somalia.This escalation has involved a soaring number of US airstrikes in Somalia, not to mention a number of joint ground operations with Somali forces, mostly against al-Shabaab fighters, but many of them with very unclear goals. But the goals of the whole US operation in Somalia aren’t exactly clear anyhow, with some vague interest in fighting al-Shabaab, and possibly the ISIS affiliate in Puntland, but little sign that the operation is anything but escalation for escalation’s sake.
US Airstrike In Somalia Kills More Than 100 al-Shabab Militants -- More than 100 al-Shabaab militants were killed Tuesday in the latest US airstrike in Somalia the Pentagon announced, the latest in a series of strikes against the al Qaeda affiliated group and ISIS fighters in the war-torn country meant to support the local government. The strike occurred 125 miles northwest of the capital of Mogadishu, and was the 29th such strike since the start of 2017, and 7th since November 9.The Pentagon released the following statement commemorating the latest airstrike: U.S. Conducts Airstrike in Support of the Federal Government of Somalia. In coordination with the Federal Government of Somalia, U.S. forces conducted an airstrike in Somalia against an al-Shabaab camp on Tuesday, Nov. 21 at approximately 10:30 a.m. local Somalia time, killing more than 100 militants. The operation occurred 125 miles northwest of the capital, Mogadishu. Al-Shabaab has pledged allegiance to al-Qaeda and is dedicated to providing safe haven for terrorist attacks throughout the world. Al-Shabaab has publicly committed to planning and conducting attacks against the U.S. and our partners in the region. U.S. forces will continue to use all authorized and appropriate measures to protect Americans and to disable terrorist threats. This includes partnering with AMISOM and Somali National Security Forces (SNSF); targeting terrorists, their training camps and safe havens throughout Somalia, the region and around the world.
Iran to Send Warships to Gulf of Mexico, Atlantic Ocean — Iran's new naval commander has vowed to send warships to America's backyard. Rear Adm. Hossein Khanzadi said plans were being drawn up for vessels to be deployed to the Gulf of Mexico and Atlantic Ocean "in the near future." They would also visit South American countries, he added. Tehran has long complained about U.S. ships being based in the Persian Gulf. Speaking at his first press conference since being appointed, Khanzadi promised his navy would "wave the flag of our country in the Gulf of Mexico." He pointed out that "the appearance of our vessels in the Mediterranean and Suez Canal shocked the world and the U.S. also made comments on it." It isn't the first time Iran's military has pledged its ships would enter the Gulf of Mexico. Khanzadi’s predecessor Rear Adm. Habibollah Sayyari said in 2014 that Iran planned to send vessels close to American maritime borders as a counter to the U.S. Navy’s presence in the Persian Gulf. Sayyari later said the manoeuvers had been canceled “due to a change in schedule.” Thousands of American troops are in Iraq and Afghanistan, both of which border Iran. #160;
Macron Seeks to Quell Iran Furor, Avoids Taking Sides With Saudis - French President Emmanuel Macron sought to quell a mounting dispute with Iran, vowing not take sides in a regional conflict between the Shiite country and its Sunni rival Saudi Arabia. “We want an Iran that is a less aggressive power and for its ballistic missile program to be curtailed. But Iran is a regional power and we speak to them,” he said at a press conference in Gothenburg, Sweden. “The French line is to work for peace and not choose one side or the other. There are those who would like western countries to take sides between Shia and Sunni. We refuse. The role of France is to speak to everyone.” The 39-year-old president’s remarks come after Iran accused France of being “one-sided” and following French Foreign Minister Jean-Yves Le Drian’s criticism of the country’s regional policy, calling it a show of “hegemonic desire.” Le Drian made the comments at a press conference in Ryiadh, sitting next to his Saudi counterpart. A few hours later, the Iranian Foreign Ministry spokesman Bahram Qassemi fired back. “Unfortunately, it seems like France has a one-sided and biased view towards the ongoing crises and humanitarian catastrophes in the Middle East,” he said according to remarks carried by state-run Press TV late Thursday. “This view fuels regional conflicts, whether intentionally or not,” he added.
Russia's Arms Sales To Middle East Countries Spike To Record-High Levels -- Dubai Airshow 2017, one of the largest and most successful air shows in the world, ended on Nov.16, having drawn over 79,000 trade visitors, up around 20% over the last version of the event in 2015. The total order tally is $113.8 billion in orders. It nearly tripled from the $37.2 billion signed two years ago.Russia’s exposition at the Dubai Airshow 2017 included the combat helicopter Ka-52, multi-mission fighter MiG-29M, Su-35 supermaneuverable air defense fighter, Be-200 multipurpose amphibious aircraft, combat-transport helicopter Mi-35M, long-range air defense system S-400 Triumph, and short-range air defense missile system Pantsir–S1. The 'Russian Knights' aerobatic demonstration team performed extraordinary stunts riding through the skies to greatly impress spectators.The United Arab Emirates (UAE) is interested in procuring the Sukhoi Su-35 multi-role fighter. The country is considering the purchase of 10 or more of such aircraft. The UAE and Russia signed a letter of intent on the purchase of Su-35 fighter jets in Feb. 2017. The talks are in progress. The Emirates will be the second country after China to buy the plane. The UAE has already purchased Russian ground weapons, such as BMP-3 infantry combat vehicles and Pantsir S1 air-defense systems. In February, the Emirates entered into military contracts with Russia worth $1.9 billion. The deal includes 5,000 anti-armor missiles in addition to training and logistic support. The UAE started talks with Rostec company on the development of light fighter based on the MiG-29 twin-engine aircraft with development set to kick off in 2018.
How Turkey, Iran, Russia and India are playing the New Silk Roads | Asia Times - Pepe Escobar - Vladimir Putin, Recep Tayyip Erdogan and Hassan Rouhani will hold a summit this Wednesday in Sochi to discuss Syria. Russia, Turkey and Iran are the three power players at the Astana negotiations – where multiple cease-fires, as hard to implement as they are, at least evolve, slowly but surely, towards the ultimate target – a political settlement. A stable Syria is crucial to all parties involved in Eurasia integration. As Asia Times reported, China has made it clear that a pacified Syria will eventually become a hub of the New Silk Roads, known as the Belt and Road Initiative (BRI) – building on the previous business bonanza of legions of small traders commuting between Yiwu and the Levant. Away from intractable war and peace issues, it’s even more enlightening to observe how Turkey, Iran and Russia are playing their overlapping versions of Eurasia economic integration and/or BRI-related business. Much has to do with the energy/transportation connectivity between railway networks – and, further on the down the road, high-speed rail – and what I have described, since the early 2000s, as Pipelineistan. The Baku-Tblisi-Ceyhan (BTC) pipeline, a deal brokered in person in Baku by the late Dr Zbigniew “Grand Chessboard” Brzezinski, was a major energy/geopolitical coup by the Clinton administration, laying out an umbilical steel cord between Azerbaijan, Georgia and Turkey. Now comes the Baku-Tblisi-Kars (BTK) railway – inaugurated with great fanfare by Erdogan alongside Azerbaijani President Ilham Aliyev and Georgian Prime Minister Giorgi Kvirikashvili, but also crucially Kazakh Prime Minister Bakhytzhan Sagintayev and Uzbek Prime Minister Abdulla Aripov. After all, this is about the integration of the Caucasus with Central Asia.Erdogan actually went further: BTK is “an important chain in the New Silk Road, which aims to connect Asia, Africa, and Europe.” The new transportation corridor is configured as an important Eurasian hub linking not only the Caucasus with Central Asia but also, in the Big Picture, the EU with Western China. BTK is just the beginning, considering the long-term strategy of Chinese-built high-speed rail from Xinjiang across Central Asia all the way to Iran, Turkey, and of course, the dream destination: the EU. Erdogan can clearly see how Turkey is strategically positioned to profit from it.
Pakistan pulls plug on dam deal over China’s ‘too strict’ conditions in latest blow to Belt and Road plans | South China Morning Post: Pakistan has decided to cancel a US$14 billion infrastructure agreement with China because it could not accept the hyper strict conditions, local media reported, in another setback to Beijing’s overseas ambitions. The exclusion of the Diamer-Bhasha dam from the China-Pakistan Economic Corridor (CPEC) framework, a key element to Beijing’s Belt and Road Initiative, was because China’s hyper strict conditions for funding the project were “not doable and against our interests”, Pakistan’s Express Tribune quoted Water and Power Development Authority chairman Muzammil Hussain as saying on Thursday. The harsh conditions included China taking ownership of the project, the operation and maintenance costs and pledging to build another operational dam. The project will go on ahead, however, as Pakistan has decided to finance the project – which will generate 4,500 megawatts (MW) of hydropower – itself. The decision comes only a few days after Nepal called off a US$2.5 billion hydropower plant awarded to a Chinese state-owned company, which was also part of the Belt and Road Initiative. China and Pakistan are due to hold a meeting about the CPEC on November 21. The two sides have prioritised about 15 thermo energy projects valued at US$2.2 billion. Although the South Asian countries like Pakistan and Nepal need and welcome China’s investment to improve their infrastructure, specialists warned that the latest setbacks are a reminder that China should be more cautious when it promotes sensitive projects like hydropower in other countries. “Hydropower projects are particularly complicated and sensitive,” said Sun Shihai, a specialist on China’s relations with South Asia at the Chinese Academy of Social Sciences.
Nepal and Pakistan pulling the plug on Belt and Road plans, casts spotlight on public tender issues | South China Morning Post: When lofty aspirations meet the real world of competing sovereign interests the reality is that being a global superpower requires a delicate weaving of soft versus hard power with influence and dominance at multiple levels comprising military, political, economic and technological. And a few recent cracks in the plans for hegemony highlight the complicated road to infrastructure based influence faced by China. Last week, according to an SCMP report, the government of Nepal appears to have decided to abandon the US$2.5 billion deal to build the Budhigandaki Hydroelectric project dam with the Chinese state company China Gezhouba Group. The deal was scrapped by a new, incoming administration which criticised that the deal was signed without an open tender process, which was required by law.Ironically, the agreement was originally signed a few weeks after Nepal joined China’s “Belt and Road Initiative”. Then, last week, Pakistan also decided to pull out of the US$14 billion Diamer-Bhasha dam with China because it refused accept the strict deal conditions. The project will go on ahead, however, as Pakistan has decided to finance the project – which will generate 4,500 megawatts (MW) of hydropower – itself. Exploring why they might have collapsed so close together will explain why Belt and Road projects will face severe financing hurdles. The Belt and Road seems to be faltering in its conceptual financial stage. Two major related projects have been cancelled within a week, in both cases because the terms were not considered by the recipient country to be fair and equitable. And this inevitably also raises issues about the commercial viability and financial credibility of some other projects. As a former World Bank Group officer who has advised on the financing of infrastructure, I can highlight the underlying issues of these cancellations. They illustrate the problems that countries will encounter when dealing with the Chinese concept of infrastructure investment.
China wins its war against South Korea’s US THAAD missile shield – without firing a shot - A detente between China and South Korea may be good news for the Korean economy and a necessary step towards resolving the North Korea issue, but at the same time it threatens to degrade regional security for years to come. When South Korean President Moon Jae-in and Chinese President Xi Jinping agreed on November 11 to “normalise exchanges”, they ended a conflict that began more than a year ago with Seoul and Washington’s decision to deploy an anti-ballistic missile system in South Korea. Beijing, which claims the system’s radar can be used by the United States to spy on China, retaliated against the deployment of the Terminal High Altitude Area Defence (THAAD) system with unofficial sanctions against the South. Seoul has now agreed to accept military constraints in return for the lifting of those sanctions, creating a worrying precedent for Beijing’s rivals in the region. The military constraints are known as the “three nos”, meaning Seoul agrees there will be no further anti-ballistic missile systems in Korea, no joining of a region-wide US missile defence system and no military alliance involving Korea, the US and Japan. This is an enormous sacrifice but for reasons both economic and political Moon had few other options. Economically, after being suffocated for 16 months by China’s “doghouse diplomacy”, many South Korean businesses were left gasping for air. Hyundai’s sales in China dropped 64 per cent in the second quarter of 2017 from a year before, Lotte’s supermarket sales in China fell 95 per cent over the same period and Chinese tour groups to South Korea were banned outright, which alone led to an estimated revenue loss of US$15.6 billion this year, according to Hyundai Research Institute. Politically, a better strategy might have been playing both ends against the middle by fostering better ties with Japan and the US but this would have alienated Moon from his base and may not even be something he wants at the moment.
South Korea Seeks Free Trade Deal With Eurasian Economic Union – Eurasia Review: South Korea’s trade minister has met with Russian officials in Moscow, an official said Wednesday, November 22, in a move to lay the groundwork for a free trade deal with the Eurasian Economic Union (EAEU) amid growing U.S. trade pressure, Yonhap news agency reports. Kim Hyun-chong held separate talks with Herman Gref, CEO of Russia’s state-owned banking giant Sberbank and Russian Deputy Minister of Economic Development Alexei Gruzdev on Tuesday. They discussed how to lay the foundation for a free trade agreement (FTA) between South Korea and the EAEU, a South Korea trade ministry official said, without giving any further details. The meetings represent South Korea’s latest efforts to accelerate the ongoing negotiations between South Korea and the Eurasian Economic Union (EAEU) for an open trade pact. South Korean officials said they hope to launch negotiations with the EAEU by the end of this year. South Korean President Moon Jae-in and Russian Prime Minister Dmitry Medvedev agreed last week to accelerate the ongoing negotiations between South Korea and the EAEU for an FTA. The two leaders met on the sidelines of a regional forum in Manila. South Korean officials say a free trade deal with the EAEU is effectively the same as clinching a bilateral trade deal with Russia.
High-level Chinese envoy heads to North Korea -- The highest-level Chinese envoy to visit North Korea in two years arrived in the country’s capital on Friday to try to improve relations that have soured over Beijing’s tightening of sanctions and expressions of support for US President Donald Trump’s calls for more pressure on the North to abandon its nuclear weapons programme.Song Tao’s official mission is to brief North Korean officials on the outcome of China’s ruling Communist Party congress held last month. He is visiting as President Xi Jinping’s special envoy, according to Chinese and North Korean state media, but no other details about his itinerary or whether he will meet with North Korean leader Kim Jong-un have been announced. After arriving, Mr Song met with Choe Ryong-hae, a vice chairman of the ruling party and one of the most senior leaders after Mr Kim. The visit is seen as an effort by Mr Xi to explore a new approach in relations and likely also reflects Mr Xi’s desire to head off further pressure from Washington. China’s relations with North Korea have deteriorated under Mr Kim, who has ignored Beijing’s calls to end the North’s nuclear weapons and ballistic missile tests and return to disarmament talks. China, North Korea’s largest trading partner, says its influence with Mr Kim’s government is often exaggerated by the US and others. Beijing is opposed to measures that could bring down Mr Kim’s regime and lead to a refugee crisis along its border, and while enforcing harsh new UN sanctions targeting North Korea’s sources of foreign currency it has called for steps to renew dialogue.
China is stepping up its dominance in the South China Sea (HBO video) The South China Sea has roughly three trillion dollars worth of global trade passing through every single year, which means having the rights to these waters means having access to shipping lanes, fishing, oil and gas.China and its neighbors, including Vietnam, Brunei, and the Philippines, have long vied for dominance over the strategic waterway, but Beijing has taken the most aggressive stance in furthering its expansionist ambitions, building artificial islands and constructing military installments.Recently, the Philippines and China were put at odds over construction on small sandbars.President Rodrigo Duterte vowed to take a tougher stance on his Chinese neighbor at the APEC last week in Vietnam. Yet, the strongman eventually bowed out of the construction projects, giving way to China advancing towards further dominance over the region.VICE News traveled to Mindanao, Philippines to understand what is at stake.
China just revealed its plans for pulling ahead in the space race — and they include building a nuclear-powered shuttle - China continues to make steady progress on its space exploration plans: from a deal with Russia to the possibility of launching rockets near the equator, — and most recently, the ambition to develop a nuclear-powered shuttle. The China Aerospace Science and Technology Corporation (CASC), the main contractor for the country’s space program, has laid out a roadmap detailing the country’s goals for space exploration and technology. It offers a glimpse at what the country hopes to accomplish between 2017 and 2045, with one of the most ambitious projects being a nuclear-powered space shuttle. By 2025, CASC plans to have a reusable space plane that will be used for suborbital tasks such as space tourism — a market also being eyed by Blue Origin and Virgin Galactic . The first launch of China’s reusable space plane had previously been set to take place in 2020.By 2030, the Long March 9 rocket will be ready for use. Classified as a “heavy-lift” rocket, it’s capable of carrying over 100 tonnes (220,462 pounds), making it perfect for launching crewed missions to the Moon, and possibly unmanned missions to Mars. By comparison, SpaceX’s Falcon Heavy rocket has a payload capacity of about 63 tonnes (140,660 pounds), though future iterations of the Falcon Heavy are likely to incorporate an increased payload. Looking ahead to 2035, the CASC wants to make all of its launch vehicles reusable; currently, they’re all single use. Within five years from that time, they expect the introduction of a new generation of rockets and launch vehicles which would be used for interstellar missions, asteroid mining, and “constructing megaprojects such as a space-based solar power station.” The nuclear-powered space shuttle is also set for 2040, but as there are few details about the shuttle at present, it’s unclear if 2040 is when development will begin or when its first launch is expected to take place. Provided everything progresses as hoped, China foresees itself becoming a leader in aerospace by 2045. It is, of course, difficult to account for everything that could happen over the next couple of decades, but the CASC’s roadmap is a clear sign of its investment in space exploration, and an example of what other countries may want to consider in order to maintain the public’s interest in space.
China's pig farmers go north, upending world's top meat, grain market (Reuters) - China’s largest pig farming companies and new entrants are racing to build vast, modern hog farms in the north-eastern cornbelt, expanding the world’s biggest pork market and upending traditional trade flows in meat and grain. At least eight listed companies have announced or confirmed plans to produce around 17 million pigs annually in the north-east in coming years. Many more companies, including the country’s biggest pig farmer, Guangdong Wen’s Foodstuff Group Co Ltd, are building farms in the area, suppliers and sources say, adding to China’s annual $1 trillion pork market. Some researchers expect output in the northeast to hit nearly 120 million pigs a year, almost double the 69 million head produced in the area by Heilongjiang, Jilin, Liaoning and Inner Mongolia provinces last year. “In the next few years, almost 20 percent of China’s hogs will be transferred to new territory. That’s equivalent to the number slaughtered in the U.S. annually,” said Feng Yonghui, chief analyst at consultancy Soozhu.com. Temperatures go well below freezing in the winter in China’s northeast, but the area is sparsely populated and allows for setting up large farms that would not be possible in more crowded parts of the country. “The costs in the north-east are higher because of heating. But we can achieve scale there,” said Song Weiping, vice president at Beijing Dabeinong Technology, an animal feed firm that is diversifying into pork production. “We’re building seven farms in the northeast this year. In total, we’ll have around 20 farms in the region.” The output increase in the northeastern provinces would take their share of hogs raised in the country to around 17 percent of the 2016 total and would almost match combined production of 129 million from the top producing provinces, Henan and Sichuan, which currently account for 20 percent of total supplies.
Foxconn Interns Worked Illegal 11-Hour Shifts To Meet iPhone X Demand -- Apple and Foxconn have a well-documented history of labor abuses ranging from underpaying employees to compulsory over time that have been blamed for a slew of deaths and suicides among Foxconn's workforce. These abuses were widely covered in the media around 2012 but largely disappeared from the headlines after Apple CEO Tim Cook said he would pressure Foxconn into adopting more humane labor conditions. But apparently the unprecedented production problems that plagued the company's rollout of the iPhone X put Foxconn in an uncomfortable situation where they couldn't find enough seasonal workers to ramp up production fast enough. To compensate for the shortfall, the company recruited "interns" - who were also studying as full-time students - to work grueling 12-hour shifts at a factory in mainland China. The story was uncovered by the Financial Times, which sent a reporter to China to talk with Foxconn interns, who worked the long hours. This violated not only Apple and Foxconn's policies, but local laws governing labor abuses.The students, who are doing the internships for school credit, say they have little choice but to follow their supervisers' orders.Six high school students told the Financial Times they routinely work 11-hour days assembling the iPhone X at a factory in Zhengzhou, China, which constitutes illegal overtime for student interns under Chinese law. The six said they were among a group of 3,000 students from Zhengzhou Urban Rail Transit School sent in September to work at the local facility run by Taiwan-based Apple supplier Hon Hai Precision Industry, better known as Foxconn. The students, aged 17 to 19, said they were told that a three-month stint at the factory was required “work experience” that they had to complete in order to graduate.
China Slashes Import Tariffs on Consumer Goods In Boost For Trump And Western Exporters - China announced it is slashing import tariffs on 187 consumer products starting next month. The Finance Ministry pointed to the cuts being concentrated in products in short supply domestically which, it believes, will prompt local producers to improve quality. The items in the list which, includes baby formula, diapers, electric toothbrushes, medicines, cosmetics, coffee machines and whisky, are part of the broader category of consumer goods which account for roughly 30% of total Chinese imports. Of all 187 tariff reductions, the biggest was on vermouth and similar alcohols, like Martini, which were cut from 65% to 14%. The strangest was the cutting tariffs on electronic toilet seats, where domestic production must be truly appalling from a quality perspective, or markedly insufficient. Notwithstanding the Finance Ministry’s comments, it raises the question whether China is responding to loud and frequently repeated complaints from Donald Trump about the Middle Kingdom’s unfair trade practices. In 2016, the US trade deficit with China was $347 billion and is expected to rise to around $370 billion in the current year. In October 2017, the US accounted for 70% of China’s total trade surplus. More from Bloomberg: China’s new plan to slash import taxes on a wide range of consumer goods promises to boost the prospects of multinationals in the Chinese market, with everything from Procter & Gamble Co.’s baby diapers to Diageo Plc’s whiskey becoming more affordable to local consumers. Tariffs for 187 product categories will drop from an average 17.3 percent to 7.7 percent after the cut on Dec. 1, the Ministry of Finance said in a statement Friday, citing the need to help consumers access quality and specialty products which aren’t widely produced locally.
Good times may be over for overseas shopping agents as China cuts import tariffs | South China Morning Post: As China unleashed a new round of import tariff cuts on 187 goods to encourage consumer spending, analysts say the once flourishing overseas shopping agents, or daigou, could start to feel the pinch. The finance ministry’s announcement came just ahead of US Black Friday and Cyber Monday sales, a peak season for daigou, who resell items they buy abroad to consumers in China, undercutting conventional importers who are subject to full tariffs on their products. Goods benefiting from Friday’s import tax cuts, which take effect next month, range from food, health supplements, pharmaceuticals and clothing to recreational products, with taxes slashed to an average rate of 7.7 per cent from 17.3 per cent.Tariffs on some special infant milk formulas – a product highly sought after by mainland Chinese following the death of young children in a tainted milk scandal in 2008 – have been cut to zero, from 20 per cent. But standard infant milk formula is not included in the tax cut. The move comes amid long-standing complaints from nations including the United States about China’s trade surplus with many of its trading partners. The administration of President Donald Trump, in particular, has complained about unfair trade barriers limiting the sale of foreign goods in China. Meanwhile, Beijing is also encouraging people to spend more at home in its bid to transform the economy to a consumption-driven one. “This round of cuts concentrates on products in short supply domestically and will provide more choice for domestic consumers and guide the upgrade of domestic supplies,” the ministry said. But the immediate impact of the cuts on daigou is likely to be limited. Beijing waived the 30 per cent tariff for non-luxury cosmetics and cut the tax rate for luxury products to 15 per cent last year, but no significant price drops were seen given the strong demand from Chinese buyers.
The Five Biggest Tests For China's Next Central Bank Governor -- Zhou Xiaochuan’s long reign as PBoC Governor is drawing to a close. He signaled his impending retirement last month and will be seventy years old In January 2018. Zhou has headed up China’s central bank from the early days of China’s “growth miracle” in 2002 and successfully – thanks to massive credit creation - steered China’s economy through the 2008 crisis. Since then, he’s kept China’s horrendous credit bubble on the rails, while warning of the risk of a “Minsky moment” at the recent Party Congress. As Bloomberg notes, however, Zhou’s successor will immediately be faced with a series of major problems. When Zhou Xiaochuan finally hands over the baton at the People’s Bank of China after a decade and a half in charge, his successor will inherit a series of headaches crowned by a debt pile racing toward 300 percent of output. The next governor will be tasked with not just reining in that leverage without tripping up economic growth, but keeping an eye on accelerating inflation too, all as the institution’s role in a complex regulatory structure evolves. As if that wasn’t enough, they’ll also be tasked with maintaining a stable currency as it opens up to market forces and boosting communication to keep global investors in the loop. "The PBOC is in more of bind than ever with its monetary policy," said Zhao Yang, chief China economist at Nomura Holdings Inc. in Hong Kong."While it was fine to just look at inflation and economic growth targets in the past, the central bank now has to strike a balance among more targets, some of them conflicting." Bloomberg sets out “five of the most pressing tasks” which it sees Zhou’s successor having to address from day one.
What to Expect From Asia’s Big Central Banks Reshuffle - Asia’s biggest economies are set to change or reappoint their central bank chiefs in the coming months, in what’s shaping up as a shift in personnel rather than policy.China, Japan, Korea, Indonesia, Taiwan and New Zealand are all poised to announce new leadership or reappoint their exiting heads. They form part of the regional export powerhouse that’s forecast by the International Monetary Fund to make up almost two thirds of global growth this year. The backdrop: Change atop the Federal Reserve and a world inching toward tighter monetary policy. That trend could land in Asia soon, with South Korea forecast by some economists to raise benchmark interest rates as soon as next week. Yet the overarching policy outlook in Asia isn’t tipped to change along with its personalities. China’s next central bank chief will have to take instruction from the nation’s cabinet, which is intent on keeping cash flowing to the real economy even as it tightens the screws on riskier lending. In Japan, Haruhiko Kuroda is seen as likely to stay in his post, and even if he were to opt for retirement, few expect a hawk would take over. "Policy continuity will likely be the overriding factor in selecting the new Northeast Asian central bank leadership," said Rajiv Biswas, Asia-Pacific chief economist for IHS Markit in Singapore. Here’s a look at the slate of positions up for grabs:
Another One: Japan's "Fake Data" Scandal Hits Mitsubishi Materials -- So Kobe Steel was not an isolated incident and faking data on manufacturing quality in Japan is quite common, as other lower profile scandals at Nissan Motor and Takata proved. Today another culprit has come to light: Mitsubishi Materials – which may need to re-consider its corporate philosophy “For People, Society and the Earth” and Articles 2 and 3 of its code of conduct “Safety First” and “Compliance”. The company has admitted to falsifying data on rubber seals, brass strips and aluminum products sold to more than 250 customers in the aerospace and auto sectors. Having hit a two year high earlier this month, Mitsubishi Materials’ share price plunged during the Tokyo trading session, closing 8.1% lower on the day at 3,760 Yen, having traded as low as 3,635 Yen. More from Bloomberg:Japan’s reputation for manufacturing prowess took another hit as Mitsubishi Materials Corp. admitted it faked data on some products just weeks after a similar scandal engulfed Kobe Steel Ltd. Buyers of Japanese industrial goods from Boeing Co. to Airbus SE were once again scrambling to confirm whether safety had been compromised after Mitsubishi Materials said three of its units had faked data on products that may have been delivered to more than 250 customers. Its shares plunged as much as 11 percent in Tokyo, the most in eighteen months.Mitsubishi Cable Industries Ltd. falsified data on rubber seals, while Mitsubishi Shindoh Co. misreported the strength of brass strips for auto parts, according to a statement Thursday. The products may have been shipped to 229 Mitsubishi Cable clients and 29 customers of Mitsubishi Shindoh. A third unit, Mitsubishi Aluminum Co. Ltd., also supplied non-conforming products, although it has already confirmed with customers that they are safe, the company said, adding that its investigation hasn’t uncovered any cases that raise the possibility of legal violations or safety issues.
Battered Bangladesh risks everything on unsafe factories -- Bangladesh’s economy is fundamentally tied to garment exports. The country of 163 million is second only to China in making clothes for the world, totalling USD $28.1 billion according to most recent figures. The garment sector has directly fuelled Bangladesh’s development. The combination of a low minimum wage global demand for fast fashion and poor government oversight have created conditions whereby many people in the 5.1 million worker strong industry have been lifted from poverty. The garment sector has removed barriers to the employment of women, with 80% of the industry estimated to be female. But the Bangladeshi garment industry is at a crossroads. The collapse of Rana Plaza more than four years ago killed at least 1,100 people and inspired an internationally-backed campaign to make Bangladeshi factories safe. The two main efforts, signed by over 200 global fashion brands, are set to lapse in 2018. As this deadline approaches, both appear doomed to fail, and the government has blocked any prospect of an extension. This leaves a dark cloud over the future of worker safety in Bangladesh. Only 79 of 2,334 factories inspected have so far met the desired standard under the international monitoring programs. The prospects for the rest look glum. One of the programs, the European-based ‘Accord on Fire and Building Safety in Bangladesh’, reports that as of October, almost nine of every ten factories that fall under its agreement are behind schedule in remedial works. The US-based ‘Alliance for Bangladesh Worker Safety’ lists 35% of its factories are lagging. But according to the International Labor Rights Forum, the number is actually more than half, with many beset by major, uncorrected structural problems.
Party set to sack Mugabe, Zimbabweans celebrate expected downfall (Reuters) - Zimbabwe’s ruling party will dismiss President Robert Mugabe on Sunday and reinstate Emmerson Mnangagwa, the vice-president he fired, two party sources told Reuters on Saturday, as ecstatic crowds celebrated the expected downfall. Mugabe’s 37-year rule has been effectively at an end since the army seized control on Wednesday, confining him to his residence, saying it wanted to target the “criminals” around him. State television said Mugabe would meet military commanders on Sunday, quoting Catholic priest Fidelis Mukonori, who has been mediating in negotiations with the president. But hundreds of thousands of people had no need for a formal signal that his time had ended as they flooded the streets of Harare, singing, dancing and hugging soldiers. In scenes reminiscent of the downfall of Romanian dictator Nicolae Ceausescu in 1989, men, women and children ran alongside the armoured cars and the troops who stepped in this week to oust the only ruler Zimbabwe has known since independence in 1980. Under house arrest in his compound, the 93-year-old has watched support from his party, security services and people evaporate in less than three days. The sources said a ZANU-PF party central committee meeting scheduled for 10:30 a.m. (0830 GMT) would also dismiss 93-year-old Mugabe’s preferred successor, his wife Grace, from her role as head of the ZANU-PF Women’s League. Mugabe’s nephew Patrick Zhuwao, speaking from an undisclosed location in South Africa, told Reuters the leader and his wife were “ready to die for what is correct” rather than step down in order to legitimise what he described as a coup. Zhuwao also said that only Mugabe, who had hardly slept since the military took over but was otherwise in “good” health, could call a meeting of the central committee. It was not clear from reading the party’s constitution who is empowered to call such a meeting - but events appeared to have made the issue irrelevant. On Harare’s streets, Zimbabweans spoke of a second liberation for the former British colony, alongside their dreams of political and economic change after two decades of deepening repression and hardship.
"The President Is Gone" - Zimbabwe Ruling Party Officially Ousts Mugabe - A day after thousands of demonstrators took to the streets of Harare to celebrate the imminent removal of Robert Mugabe, the country’s 93-year-old dictator who’d been effectively deposed during a surprise coup earlier this week, the country’s ruling party has officially voted to remove him from office and install his former deputy, Emmerson Mnangagwa, as interim leader. As we’ve pointed out, Mugabe triggered his own downfall when he fired Mnangagwa last week to try and clear a path for his much-younger wife, Grace, to succeed him as leader of Zimbabwe. Mugabe tried to appoint his 52-year-old wife to Mnangagwa's former position, which would've positioned her to be his successor. However, Mnangagwa’s sudden ouster outraged the leaders of Zimbabwe’s military, who decided to intervene and place Mugabe under house arrest. Mugabe had resisted the military’s request to step down, so on Friday, the country’s 10 provincial committees resolved to oust Mugabe. That decision was ratified Sunday at a meeting of Zimbabwe’s central executives, according to the head of the country's influential liberation war veterans.Meanwhile, ABC reported that Mugabe's wife Grace - who reportedly fled the country after the coup - has been officially expelled by ZANU-PF, the ruling party. Veterans leader Chris Mutsvangwa said now that Mugabe’s ouster is official, processes to remove the 93-year-old as President could now begin.Attendants at the meeting sang and danced in celebration after unanimously voting to remove Mugabe.
Chaos in Zimbabwe after Mugabe fails to announce expected resignation - Zimbabwe’s ongoing crisis descended into outright chaos on Sunday after president Robert Mugabe failed to announce his resignation as widely expected in a national address on live television. Instead, in a rambling 30 minute address, Mugabe offered no concessions to his critics, the tens of thousands who marched calling for his resignation or the army commanders who led the military takeover last week. The 93-year-old autocrat said that “we cannot be guided by bitterness or revengefulness which would not makes us any better ... Zimbabweans” and said that he would preside over a special congress of the ruling Zanu-PF party scheduled for next month – suggesting he has no immediate intention of stepping down. Mugabe, who repeatedly cited the legacy of Zimbabwe’s brutal liberations wars of the 1970s, said he believed that the military “operation” launched last Tuesday by army commanders was motivated by “a deep patriotic concern for the stability of the nation” and “did not amount to a threat to our well-cherished constitutional order”. “I am aware that many developments have occurred in the party, given the failings of the past, and anger they might have triggered in some quarters .... [but] I am confident that from tonight our whole nation will put shoulder to the wheel,” Mugabe said. His once-loyal Zanu-PF party warned it would seek to impeach him if he fails to quit by midday (1000 GMT) on Monday. Earlier on Sunday, the veteran leader, who has been in power for 37 years, was sacked as leader of the Zanu-PF and told by 200 of the party’s top officials gathered at an extraordinary meeting in Harare to resign as head of state or face impeachment when parliament reconvenes on Tuesday.
Mugabe is a 'defiant bugger' | News24 - Zimbabweans have been left angered and confused after President Robert Mugabe failed to resign, but instead delivered a cryptic speech. They had gathered around televisions in anticipation of Mugabe's resignation, but instead were made to wait nearly two hours for his address on the state-owned Zimbabwe Broadcasting Corporation (ZBC)."Indeed, the current criticism raised against me by the command element and some of its members has a reason for a well-founded perception that the party was stretching or even failing," Mugabe said. Mugabe said open public spats between high ranking party officials made the criticisms levelled against him and the party inseparable. During Mugabe's drawn out speech, people huddled around televisions, some were jeering his comments. The embattled 93-year-old president instead rambled through an incoherent speech, where he insisted he would still be presiding over the extraordinary congress scheduled for December. Without announcing his much-anticipated resignation, Mugabe ended his speech with a "Good night". Those gathered around television sets were left stunned. "I'm so angry. I thought we were gonna be here tonight celebrating. But instead he said nothing," said one man at a bar in Harare. Another man, who only gave his name as Tawanda, described Mugabe's announcement as a "show of defiance". "This guy thinks we are fools. All this was a show of defiance. He's a show guy," he said. "To be honest, I didn't expect him to resign. I was hoping he would, but I didn't expect it would happen," Tawanda said. He described Mugabe as "a wounded animal" and said he believed the president knew his time was up. "He's a defiant bugger. But he's been defiant to the detriment of 15 million Zimbabweans tonight," he said. Another man said he was "livid" by Mugabe's speech. The party announced Mugabe had until noon on Monday to resign, otherwise he would be impeached on Tuesday.
93-year-old Zimbabwe president Robert Mugabe is on hunger strike as some of his political allies turn against him -- Robert Mugabe has gone on hunger strike to protest his conditions under house arrest while Zimbabwean officials plot his removal from office. Reports say the 93-year-old has not accepted food since Saturday as he continues to be held under house arrest by the military. His protest comes as officials from the ruling party, Zanu-PF, meet to plan for the end of his reign, according to the Daily Mail. It is believed the committee will seek to reinstate vice-president Emmerson Mnangagwa and remove Mugabe’s wife Grace, from the leadership, according to reports. Mugabe previously rejected a proposal to step down and allow Mr Mnangagwa, who he sacked as vice president earlier this month, to take over on an interim basis. Most Zimbabweans believe Mr Mnangagwa was dismissed to clear the way for Mr Mugabe’s despised wife Grace to become his successor. Known as ‘Gucci Grace’ for her lavish spending while the country struggled through decades of economic disaster, she is a key reason why public opinion turned against Africa’s longest serving head of state. Mugabe is said to be insisting he remain the “legitimate” head of state, and that if he were to step down in the future his family must have immunity from persecution. It remains unclear whether army chief General Constantino Chiwenga, who was photographed with the President at his home on Thursday, will agree to his conditions.
Zimbabwe's Robert Mugabe resigns, ending 37-year rule - BBC News: Zimbabwe's President Robert Mugabe has resigned, bringing an end to 37 years of rule and sparking jubilant celebrations in the nation's streets. A letter from Mr Mugabe read out by the speaker of parliament said the decision was voluntary and he had made it to allow a smooth transfer of power. The news abruptly halted an impeachment hearing that had begun against him. The ruling Zanu-PF party says former vice-president Emmerson Mnangagwa will succeed Mr Mugabe, in power since 1980. Mr Mnangagwa's sacking earlier this month triggered a political crisis. It had been seen by many as an attempt to clear the way for Grace Mugabe to succeed her husband as leader and riled the military leadership, who stepped in and put Mr Mugabe under house arrest. After the resignation announcement, lawmakers roared in jubilation.According to the constitution his successor should be the current vice-president, Phelekezela Mphoko, a supporter of Grace Mugabe. But Zanu-PF chief whip Lovemore Matuke told Reuters news agency that Mr Mnangagwa would be in office "within 48 hours". Speaking from an undisclosed location earlier on Tuesday, Mr Mnangagwa said he had fled abroad two weeks ago when he learned of a plot to kill him.
The people have spoken, says Zimbabwe's new leader (Reuters) - Zimbabwe’s new leader Emmerson Mnangagwa told a cheering crowd in Harare on Wednesday that the country was entering a new stage of democracy following Robert Mugabe’s removal as president after nearly four decades in power. Mnangagwa returned to the country earlier in the day, having fled for his safety when the 93-year-old former leader sacked him as vice president two weeks ago to smooth a path to the succession for his much younger wife Grace. “The people have spoken. The voice of the people is the voice of God,” Mnangagwa told thousands of supporters gathered outside the ruling ZANU-PF party’s offices in the capital. “Today we are witnessing the beginning of a new and unfolding democracy.” Zimbabwe was once one of Africa’s most promising economies but suffered decades of decline as Mugabe pursued policies that included the violent seizure of white-owned commercial farms and money-printing that led to hyperinflation. Most of its 16 million people remain poor and face currency shortages and sky-high unemployment, something Mnangagwa promised to address. “We want to grow our economy, we want peace in our country, we want jobs, jobs, jobs,” he told the crowd, adding: “The will of the people will always, always succeed.” Mnangagwa’s dismissal was the trigger for the army and former political allies to move against Mugabe, feted as an independence hero when Zimbabwe broke with former colonial power Britain in 1980 but later feared as a despot. He resigned as president on Tuesday as parliament began an impeachment process, after resisting pressure to do so for a week. People danced in the streets following his downfall, some brandishing posters of Mnangagwa and army chief General Constantino Chiwenga, who led the takeover. Parliamentary speaker Jacob Mudenda said on Wednesday that Mnangagwa would be sworn in as president on Friday after being nominated by ZANU-PF to fill the vacancy left by Mugabe.
Mnangagwa vows to rebuild Zimbabwe and serve all citizens (Reuters) - New President Emmerson Mnangagwa laid out a grand vision on Friday to revitalise Zimbabwe’s ravaged economy and vowed to rule on behalf of all the country’s citizens. Sworn in days after the overthrow of Robert Mugabe, the 75-year-old former security chief promised to guarantee the rights of foreign investors and to re-engage with the West, and said elections would go ahead next year as scheduled. In a 30-minute speech to tens of thousands of supporters in Harare’s national stadium, Mnangagwa extended an olive branch to opponents, apparently aiming to bridge the ethnic and political divides exploited by his predecessor during his 37 years in charge. “I intend, nay, am required, to serve our country as the president of all citizens, regardless of color, creed, religion, tribe or political affiliation,” he said, in a speech that also hailed the voice of the people as the “voice of god”. Behind the rhetoric, some Zimbabweans wonder whether a man who loyally served Mugabe for decades can bring change to a ruling establishment accused of systematic human rights abuses and disastrous economic policies. He made clear that the land reforms that sparked the violent seizure of thousands of white-owned farms from 2000 would not be reversed, but promised that those who lost property would receive compensation. To some political opponents, the speech was a welcome contrast with the habitual belligerence of Mugabe and appeared to be drawing on Mnangagwa’s knowledge and understanding of China as a model for running an economy.
Libya migrant 'slave market' footage sparks outrage - Members of the 140-year-old London Metal Exchange have launched an investigation into whether cobalt mined by child labour is trading on its exchange, following complaints it is allowing a Chinese company to sell untraceable supplies of the metal widely used in mobile phones and electric vehicles. They initially raised concerns about questionable cobalt this summer, highlighting their fears the rechargeable battery material may have come from mines in the Democratic Republic of Congo accused of employing children. Earlier this month, the LME quietly sent a directive to all suppliers asking them to detail how they guarantee “responsible sourcing” of commodities traded on the exchange. The notice, contained in email seen by the Financial Times, requests a response by December 1. Groups such as Amnesty International say children as young as seven are mining cobalt by hand in the DRC, one of the world’s poorest countries. The allegations have put pressure on companies such as Tesla and Apple to ensure cobalt in their battery-run products is traceable to reputable mines. More than half the world’s cobalt comes from the DRC, where up to one-fifth is extracted by so-called artisanal miners, who dig by hand in deep tunnels. Artisanal mines are more likely to employ child labour, according to Amnesty.
Slave trade in Libya: Outrage across Africa - DW | 22.11.2017: Media reports about alleged migrant slave markets in Libya have resulted in strong reactions across the continent. African politicians demand an investigation and the prosecution of those responsible.Who's the highest bidder? 800 Dinar! 1,000 Dinar! 1,100 Dinar! In the end, the winning bid is 1,200 Libyan Dinar – the equivalent of $800 (€680). A done deal; however, this isn't just any auction for a car or a piece of art. What's being sold here is a group of frightened young men from Sub-Saharan Africa. The low-resolution images, apparently taken at a market in Libya earlier in 2017 were shown on the US-based network CNN last week, which looked further into the issue. Journalists working for CNN discovered several such slave markets in the country's interior, proving what experts had feared for a long time: migrants trying to reach Europe via Libya continue to be subject to abuse. Heavy criticism across Africa Politicians in Africa have expressed their outrage at the scandal – especially in West Africa where most African migrants originate. President of Niger Mahamadou Issoufou felt particularly revolted by the reports, summoning the Libyan ambassador to Niger and demanding the International Court of Justice investigate Libya for trading slaves.
Militants kill more than 230 at Sinai mosque in Egypt's deadliest attack (Reuters) - Militants killed more than 230 people at a mosque in North Sinai on Friday, detonating a bomb and gunning down worshippers in the deadliest such attack in Egypt’s modern history, state media and witnesses said. No group immediately claimed responsibility, but since 2013 Egyptian security forces have battled an Islamic State affiliate in the mainly desert region, and militants have killed hundreds of police and soldiers. State media showed images of bloodied victims and bodies covered in blankets inside the Al Rawdah mosque in Bir al-Abed, west of El Arish, the main city in North Sinai. Worshippers were finishing Friday prayers at the mosque when a bomb exploded, witnesses said. Around 40 gunmen set up positions outside the mosque with jeeps and opened fire from different directions as people tried to escape. ”Four groups of armed men attacked the worshippers inside the mosque after Friday noon prayers. Two groups were firing at ambulances to deter them, said Mohamed, a witness. The public prosecutors’ office said in a statement 235 people had been killed and 109 more wounded. Hours after the attack, Egypt’s military launched air strikes on targets in mountainous areas around Bir al-Abed, security sources and witnesses said. “The armed forces and the police will avenge our martyrs and restore security and stability with the utmost force,” Egypt’s President Abdel Fattah al-Sisi said in a televised address. “What is happening is an attempt to stop us from our efforts in the fight against terrorism, to destroy our efforts to stop the terrible criminal plan that aims to destroy what is left of our region.” Egypt later said it would delay the opening of the Rafah border crossing to Gaza after the attack due to security concerns. The crossing had been due to open for three days beginning on Saturday. Striking at a mosque would be a change in tactics for the Sinai militants, who have usually attacked troops and police and Christian churches. Arabiya news channel and some local sources said some of the worshippers were Sufis, whom groups such as Islamic State consider targets because they revere saints and shrines, which for Islamists is tantamount to idolatry. The jihadists have also attacked local tribes and their militias for working with the army and police, branding them traitors.
Russia to act against Google if Sputnik, RT get lower search rankings: official (Reuters) - The Kremlin will take action against Alphabet Inc’s Google if articles from Russian news websites Sputnik and Russia Today are placed lower in search results, the Interfax news service cited Russia’s chief media regulator as saying on Tuesday. Alexander Zharov, head of media regulator Roskomnadzor, said his agency sent a letter to Google on Tuesday requesting clarification on comments Saturday by Alphabet Executive Chairman Eric Schmidt about how the Russian websites would be treated in search, according to Interfax. “We will receive an answer and understand what to do next,” Interfax quoted Zharov as saying. “We hope our opinion will be heard, and we won’t have to resort to more serious” retaliatory measures. Schmidt, speaking on stage at the Halifax International Security Forum on Saturday, responded to a question about Sputnik articles appearing on Google by saying the company was working to give less prominence to “those kinds of websites” as opposed to delisting them. The Russian government funds Sputnik and Russia Today, or RT. Google spokeswoman Andrea Faville said Schmidt was referring to ongoing efforts announced in April to demote search results that link to low quality, false and deliberately misleading content. The company said at the time it would work to highlight authoritative content. Google does not manually assign rankings to individual websites, Faville said, but analyzes a website’s attributes to automatically give it a position in results.
Nato apologises to Turkey after Erdogan and Ataturk appear on ‘enemy chart’ - Nato’s secretary general has apologised to Turkey over military exercises in Norway during which Turkey’s founding leader, Mustafa Kemal Ataturk, and its president, Recep Tayyip Erdoğan, were reportedly depicted as “enemies”. Erdoğan said Turkey withdrew 40 soldiers participating in the drills at Nato’s joint warfare centre in Stavanger, Norway, in protest at the incident and criticised the alliance. “There can be no such unity, no such alliance,” he said in an address to his ruling party’s provincial leaders. Details of the incident were sketchy. Erdoğan said Ataturk’s picture and his own name were featured on an “enemy chart” during the drills. The individual who posted the material was described as a Norwegian civil contractor seconded by Norway, and not a Nato employee. Nato secretary general Jens Stoltenberg issued a statement saying: “I apologise for the offence caused.” He said the incident was the result of an “individual’s actions” and did not reflect the views of the alliance. He added that the individual was removed from the exercise and an investigation was underway. “It will be for the Norwegian authorities to decide on any disciplinary action,” Stoltenberg added. “Turkey is a valued Nato ally, which makes important contributions to allied security.” Stoltenberg apologised again at the Halifax international security forum in Canada. He said he had already spoken to Turkey’s defence chief and that it “won’t create any lasting problems, and I think it’s already behind us”. Norway’s defence minister, Frank Bakke-Jensen, also expressed his concerns about the incident. “The message does not reflect Norway’s views or policies and I apologise for the content of the message,” Bakke-Jensen said.
The Refugee Scandal on the Island of Lesbos - Der Spiegel - Those wishing to visit ground zero of European ignominy must simply drive up an olive tree-covered hill on the island of Lesbos until the high cement walls of Camp Moria come into view. "Welcome to prison," someone has spray-painted on the walls. The dreadful stench of urine and garbage greets visitors and the ground is covered with hundreds of plastic bags. It is raining, and filthy water has collected ankle-deep on the road. The migrants who come out of the camp are covered with thin plastic capes and many of them are wearing only flipflops on their feet as they walk through the soup. Children are crying as men jostle their way through the crowd. Welcome to one of the most shameful sites in all of Europe. Camp Moria was originally built to handle 2,330 refugees. But currently it is home to 6,489.Conditions on the island of Lesbos haverarely been as precarious as they are today. Just as winter is arriving in Greece, some 15,000 refugees find themselves trapped in the five "hotspots" located on Greek islands in the Aegean Sea. Fully 8,357 of them are on Lesbos, living in horrific conditions in overcrowded, completely inadequate shelters. A huge number of refugees are forced to sleep in tents designed for summer conditions and many of them fear for their safety because of the close quarters and the repeated clashes in the main camp. Dozens of refugees have begun a hunger strike on Lesbos. The European Union's refugee deal with Turkey may have managed to cut the number of people reaching Greece by 97 percent, but dozens of migrants continue to arrive every day. Thus far this year, around 11,000 people have crossed over to the island from Turkey - a tiny number compared to the 12,500 who arrived on a single day in August 2015. But back then, newcomers were taken to the mainland and allowed to continue their journeys through the Balkans toward Hungary, Austria and, ultimately, Germany. Now, though, the former registration facilities have essentially been transformed into prisons.
Spain's Economy to Count the Cost If Catalan Crisis Continues - While Prime Minister Mariano Rajoy has stepped in to take over the region, upcoming Catalan elections could prove another flashpoint for the independence movement. For Oxford Economics, that means lingering uncertainty, posing a risk to sentiment, share prices and bonds. In their worst-case scenario, Spain’s expansion would be weaker and the economy would be 17 billion euros ($20 billion) smaller in 2019 than would otherwise have been the case. That “adverse” view – not Oxford’s central projection – assumes a permanent increase in bond yields of 50 basis points and a 10 percent decline in stocks in 2018 and 2019 compared with its baseline scenario.“The economic impact of the Catalan independence crisis is still unknown, but the increased political tensions have already caused uncertainty to surge to the highest levels in over a decade,” Senior Eurozone Economist Angel Talavera said. The Catalan crisis erupted on Oct. 1 when the former regional government held an illegal referendum on independence that it claimed as a mandate to declare independence from Spain. Rajoy responded by invoking constitutional powers to disband Catalonia’s government, dissolve its parliament and call regional elections for Dec. 21. As hundreds of companies, led by CaixaBank SA, move their legal headquarters out of the area, Economy Minister Luis de Guindos has warned that the crisis is taking its toll on both the Catalan and Spanish economies. Spain’s benchmark IBEX 35 stock index has dropped about 3.5 percent since the end of September while the spread on 10-year Spanish debt over German bonds is little changed. Oxford’s analysis also takes account of a so-called economic policy uncertainty index, which measures the number of news articles that contains the word “uncertainty” and related terms in Spain’s main newspapers as a gauge for political risk. It exceeded levels seen in 2016, when Spain was struggling to form a government, and household and business confidence will suffer if levels remain high, according to Talavera.
Europe Faces a Hamstrung Germany as Merkel’s Coalition Bid Fails --Angela Merkel may be running out of road after 12 years at the helm in Germany. With the chancellor’s attempt to form a fourth-term government in disarray, Merkel’s once unquestioned ability to steer Europe is waning as the region’s biggest economy heads into uncharted waters and possibly a protracted political stalemate. The breakdown in coalition talks late Sunday -- amid disputes over migration and other policies between a grab-bag of disparate parties -- raised the prospect of fresh elections, which probably would be held next spring. Relying on a minority administration with shifting alliances to pass legislation would run counter to Merkel’s promise to provide a stable government. However she attempts to move forward, European decisions on everything from Brexit and Greece to Russian sanctions and French President Emmanuel Macron’s proposals for strengthening the euro region will now be hemmed in by Merkel’s weakened role as a caretaker chancellor. “What it means is that Germany is pulled inward because it has to manage its political transition,” said Daniel Hamilton, executive director of the Center for Transatlantic Relations at Johns Hopkins University in Washington. “So the state of drift in Europe continues and now Germany, which has been the stabilizer of the last number of years, is part of that.” The euro and German stocks were little changed, sustained by optimism over the region’s economic momentum. The single currency slid less than 0.1 percent to $1.178 at 12:25 p.m. in Berlin, rebounding from as low as $1.172. The benchmark DAX index added 0.2 percent. Merkel, 63, said she plans to stay on as acting chancellor and will consult with Germany’s president later Monday on what comes next.
Germany’s preliminary coalition talks collapse - What now? Mrs Merkel will meet with Frank-Walter Steinmeier, Germany’s federal president, this morning to discuss next steps. Four possible outcomes present themselves. The FDP might be coaxed back to the negotiating table by plausible concessions from the CDU, CSU and Greens. But do not count on it. Mr Lindner’s language was ominously final. And the Greens (seemingly the main target of FDP recrimination) declared that they had reached their “pain threshold” and could not budge another centimetre. The second possibility is a new “grand coalition” marrying the CDU/CSU and the centre-left Social Democrats (SDP), who together have a workable majority in the Bundestag. But the SPD has strenuously ruled out the option. Having lost distinctiveness and votes in partnership with Mrs Merkel, its leaders and activists fear another spin with the chancellor could do their party terminal damage. Perhaps, just perhaps, Mrs Merkel, the media and Germany’s European partners can persuade them to take the risk. But months after its worst election result in post-war German history, the SPD will most probably reject the overtures. In the absence of a viable majority government, Mrs Merkel could form a minority one, concocting vote-by-vote majorities in the Bundestag. This might combine the CDU/CSU with the FDP, its traditional governing partner (together they would be 29 seats short of a majority). But a more natural fit would now be a black-green coalition with the Greens (42 seats short of a majority). Last night each side found generous words for the other, and they were as one in their contempt for the FDP. At federal level post-war Germany has witnessed no minority administrations, though one ran North-Rhine Westphalia, the country’s largest state, from 2010 to 2012. Such governments are alien both to the stable, long-termist ways of the German state and to Mrs Merkel’s plodding leadership style. How long one would even last in the current circumstances is unclear. That leaves the fourth, most drastic option: new elections. The route is not as simple as it sounds. Unlike some other European parliaments, the Bundestag cannot just dissolve itself (a legacy of Weimar-era instability) and as Mrs Merkel has not yet been reinstalled as chancellor she cannot call a straight confidence vote. Instead Mr Steinmeier must nominate a candidate for the job. If Mrs Merkel (for it would be she) failed to win an absolute majority in two successive Bundestag votes, which can be separated by two weeks, she would go to a third vote at which a simple majority would suffice. Only then could Mr Steinmeier dissolve the Bundestag, triggering a new election within 60 days.
What’s Next for Merkel and Germany? - Der Speigel -- It is difficult to overstate the impact of the collapsed talks. Indeed, for Merkel herself, Sunday night could mark the beginning of the end to her political career after 12 years in the Chancellery. Clearly drained from the exertion of the past several weeks, Merkel said on Sunday night that she would "almost even call it an historical day." It was the kind of sentence Germany has become used to from Merkel: a bit unpolished and inelegant. But it could end up being true.German President Frank-Walter Steinmeier now has a key role to play. For the time being, Germany will continue to be governed by the acting coalition pairing Merkel's conservatives with the center-left Social Democrats. But it is up to Steinmeier, himself a Social Democrat, to navigate the path forward toward new elections - unless Merkel decides to experiment with a minority government.The third possibility, one being discussed intently on Monday, is a repeat of the current "grand coalition." Immediately after the election results in September, which saw the SPD plunge to its worst election result since World War II, SPD head Martin Schulz vowed to lead his party into the opposition - the decision that led to the "Jamaica" negotiations in the first place. Now, though, the collapsed negotiations put the SPD in the position of having to revisit that decision. Schulz had been planning to announce his party's strategy for the future, including a personnel shuffle, on Monday morning, but that press conference has now been postponed. Indeed, it seemed on Sunday night that the parties were already positioning themselves for a possible election campaign ahead of a new vote. Green Party politician Konstantin von Notz said that he had had the impression on Sunday morning that the FDP was already preparing to abandon the talks and had found a possible excuse in an interview given by Jürgen Trittin, a senior member of the Greens. Trittin had told the weekly tabloid Bild am Sonntag that the FDP had become more unyielding on migration as the talks had progressed.
Merkel Tells Her Rivals: Back Me or Face Voters - German Chancellor Angela Merkel said she’s ready to face voters again to break the country’s political stalemate, betting they won’t blame her for failed talks on forming a coalition.Regaining her footing after the sudden breakdown, Merkel made it clear in television interviews that she intends to serve her fourth term and prefers new elections to governing Europe’s biggest economy without a majority. Germany’s president, Frank-Walter Steinmeier, will start sounding out political parties on Tuesday to see if he can cajole them into an alliance with Merkel.“A minority government isn’t part of my plans,” Merkel said in an interview with broadcaster ARD. “I’m certain that new elections are the better way.” Twelve years into her chancellorship, Merkel’s former partners are wary of another deal after emerging from previous alliances bruised or broken. It’s a sign of her diminished influence after Europe’s refugee crisis helped send her Christian Democratic-led group to a historic low in September’s election while propelling the anti-immigration Alternative for Germany into parliament. Steinmeier is calling on all parties to try again to reach a deal, saying anyone who seeks out a political mandate “must not be allowed to shy away from it when they hold it in their hands.” Merkel, who is due to attend a session of the Bundestag on Tuesday, said the breakdown of coalition talks was no reason to “back off” her pledge to provide another four years of sound governance, telling ZDF television that “Germany needs stability now.” The Social Democrats, part of Merkel’s “grand coalition” over the past four years, are refusing a rerun after suffering their worst electoral defeat since World War II. SPD policy victories, such as a national minimum wage and gender quotas for supervisory boards, didn’t prevent the party’s decline. The Free Democratic Party, which ended a month of coalition talks late Sunday, is wary because it crashed out of parliament after failing to impose its tax-cutting agenda as Merkel’s partner between 2009 and 2013. Merkel, 63, doesn’t trust FDP chairman Christian Lindner, 38, who harshly criticized her during the refugee crisis. She sees him as an opportunist and populist who avoids responsibility, according to a person close to her. Lindner, meanwhile, has never been an admirer of Merkel, an FDP party official said.
Most Germans favor snap election: poll - A majority of Germans think the country should hold a new general election following the collapse of talks on forming the next government, according to a new poll. Fifty-one percent of Germans support a new election, while 43 percent oppose the idea, the poll by public broadcaster ZDF found.The liberal Free Democrats (FDP) were blamed by 55 percent of respondents for the collapse of the exploratory talks on Sunday night. Thirty-nine percent believed the Greens were at fault, 37 percent pointed the finger at Bavaria’s Christian Social Union and 34 percent blamed Chancellor Angela Merkel’s Christian Democrats.A so-called “grand coalition” between Merkel’s conservative bloc and the Social Democrats (SPD) is favored by 48 percent of Germans, according to the poll. However, the SPD has repeatedlyruled out reprising the role of junior partner to Merkel that it has played for the past four years. If she cannot form a majority coalition, Merkel could try to run a minority government. But the chancellor told Germany’s ARD television that she would rather have a new election than pursue this option. Most Germans seem to share her view. The poll found only 30 percent supported a minority government.
Social Democrats considering renewed ‘grand coalition’ with Merkel: reports -- Germany’s Social Democrats have dropped their hard refusal to consider governing with Angela Merkel’s conservatives.In a meeting that lasted through most of the night, party leaders decided to help resolve an impasse that has left Germany without a clear coalition option for the first time in its post-war history.“The SPD is deeply convinced there should be discussions,” Hubertus Heil, the party’s general secretary, told reporters after the marathon session Friday. “The SPD will not refuse to talk.”Heil’s statement means the party is open to discussing at least two possible options with Merkel — reprising its role of the past four years as her junior partner in government or supporting a minority administration. German President Frank-Walter Steinmeier has invited Merkel, SPD leader Martin Schulz and Horst Seehofer, the chairman of the Bavarian sister party of the chancellor’s Christian Democrats, for talks next Thursday, Spiegel reported.Schulz said on Twitter that if the talks led to the SPD being involved in government, the decision would be put to a vote among party members.“In a dramatic appeal, the president called on to the parties to hold talks,” Schulz said. “We will not reject it.”The SPD leadership previously refused to entertain the possibility of another “grand coalition” with the conservatives. Schulz reiterated that position on Monday after talks to form a three-way government between the conservatives, liberals and Greens collapsed.Since then, he has come under intense pressure from both inside and outside the SPD to reconsider in order to avoid a new election. Heil denied reports that Schulz had come under pressure to resign.
Merkel Tanks In German Polls As Critical Discussions Take Place With SPD - Angela’s Merkel’s ability to restore her power in Germany should be decided in the next few days, as talks take place with Martin Schultz’s SPD.In the meantime, Merkel’s ratings have unexpectedly “tanked” in the latest German polls.More than half of Germans believe she should not run for office in a poll conducted for t-online.com, as the Daily Express reports.Angela Merkel’s worries continue as the latest polls reveal the majority of Germans did not want her to run as a candidate for Chancellor again. The survey, carried out in the coalition talks breakdown, makes worrying reading for Angela Merkel. While Mrs Merkel said yesterday she wanted to stand again in any new snap election the German people appear to be turned off by the prospect.Of those polled, 54 per cent said she should not run for office, according to the polling institute Civey for t-online.de. Only 38.5 percent of Germans would welcome a renewed candidacy of the chancellor. A breakdown of those views saw Mrs Merkel pick up 76.2 per cent support amongst the supporters of the Christian Democratic Union (CDU) and the Christian Social Union (CSU) which stood at 76.2 per cent.Amongst supporters of the Greens, Mrs Merkel also seemed to gain a sizeable backing with 52.2 per cent wanting the current leader to stand again. Among the FDP supporters that was only about 30 per cent. Perhaps unsurprisingly supporters of the right-wing Alternative for Germany (AfD) do not want her to stand again with 88.5 per cent calling on her to step back. There was little comfort for the German leader in another poll published yesterday in Der Spiegel. The latest SPON poll indicated that support for the coalition between Mrs Merkel’s CDU and the CSU fell below 30 per cent to 29.2 per cent. This is believed to be their lowest ever level. The polling institute Civey, based in Berlin, indicated the fall is part of a downward trend for the two parties.
Chancellor Angela Merkel moves left as German politics realign - DW -Earlier this year, with the far-right populist Alternative for Germany (AfD) coming off a string of regional election triumphs, most observers expected Angela Merkel to become more conservative. Some within her own parliamentary bloc indeed demanded she do just that. But the opposite has happened. If anything, the chancellor and the CDU-CSU have maneuvered further left. Part of the reason is the dictates of electoral numbers. The results of the September 24 national election meant that, with the extremes of the AfD and the Left party being deemed off-limits, Merkel's only viable coalitions involve either the center-left Social Democratic Party (SPD) or the left-wing environmentalist Greens. There is no non-left path to power.But changes to political culture and Merkel's own personal inclinations have also encouraged realignment and effectively shifted the center further to the left. It was part of the accepted wisdom in Germany in the last 30 years that the conservatives' natural allies were the business-friendly Free Democratic Party (FDP), which has leaned towards the conservatives as coalition partner since the early 1980s, but had been in a coalition with the SPD before that.But last Sunday, when the FDP walked out of coalition talks with the CDU-CSU and the Greens, showed that this is no longer necessarily the case. In justifying that decision, the FDP complained that the conservatives and the Greens had been too chummy during the negotiations. But the FDP's recalcitrance has driven Merkel and her party into the arms of another possible partner on the left - the Social Democrats. Merkel spoke of another "grand coalition" between conservatives and Social Democrats as an option on the evening after the September 24 national election - only to be rebuffed by SPD chairman and defeated chancellor candidate Martin Schulz, who categorically ruled it out. Schulz has now been forced to back off that hardline stance. Together with Merkel and the head of the CDU's Bavarian sister party, the CSU, the SPD chairman will be meeting next week with German President Frank-Walter Steinmeier. He's trying to broker a new government and head off a snap election. Although wary, the SPD is clearly open again to testing the Merkel option.
Could Italy’s Banking Crisis Drag Down Mario Draghi? -- Don Quijones - A blame game has begun in Italy that risks casting a bright light on the leadership of both the Bank of Italy and Italy’s financial markets regulator Consob. The controversial decision to award the central bank’s current Chairman Ignazio Visco a fresh six-year mandate despite presiding over one of the worst banking crises in living memory has ignited a tug-of-war between political parties and the president, who makes the ultimate decision on who to appoint as central bank chief. The first to cast aspersions was Italy’s former premier Matteo Renzi, who, no doubt in an effort to distract from his own party’s part in the collapse of Monte dei Paschi di Siena (MPS), called into question the supervisory role of both the Bank of Italy and Consob during Italy’s banking crisis. Silvio Berlusconi, a key player in the center-right coalition whose party came out on top in recent elections in Sicily, was next to join the fray. “The Bank of Italy did not exercise the control that was expected of it,” he told reporters in Brussels in response to a pointed question about Visco. As the controversy grows, it risks drawing the role of Visco’s predecessor, current ECB President Mario Draghi, into the spotlight. Many of the key events that helped pave the way to Italy’s current crisis took place during his mandate as governor of Italy’s central bank. And now the skeletons are beginning to crawl out of the closet. It was recently revealed in a Milan court case that in 2010 Italy’s central bank, run by Draghi, knew that MPS’ management had papered over a loss of almost $500 million in 2010 and failed to report it. It’s not the magnitude of the loss that matters, but how it was done and who knew what and when. Bloomberg:A 2010 report from the Bank of Italy … shows inspectors were aware that a 2008 trade struck with Deutsche Bank AG was the mirror image of an earlier deal Monte dei Paschi had with the German lender. The Italian bank was losing about €370 million ($431 million) on the earlier transaction, dubbed Santorini, as of December 2008. The new trade posted a gain of roughly the same amount and allowed losses to be spread out over a longer period, the document shows.The newly revealed report — dated Sept. 17, 2010, and marked “private” — shows the Bank of Italy was aware that by choosing not to book the trade at fair value, Monte Paschi avoided showing a loss at the time. If the bank had used a mark-to-market valuation in the fourth quarter of 2008, it would have been included in its year-end report as the credit crisis was cresting, with potentially grave consequences on the bank’s finances.
The Brexit Veto: How and why Ireland raised the stakes - RTE - On Wednesday 8 November, Taoiseach Leo Varadkar startled the Dáil by saying a breakthrough at the EU summit in December was "likely", allowing the Brexit negotiations to move to the future trading arrangements between the UK and the EU. Yet they went against the grain of the prevailing belief that a breakthrough was very much in the balance, at best, or at worst, looking increasingly unlikely. At the same time as the Taoiseach was briefing the Dáil, a paper was being circulated among EU ambassadors in Brussels in which was embedded an explosive suggestion that would raise the stakes on Brexit and Ireland to hitherto unseen heights. The paper had been carefully choreographed between the Irish Government and the EU Brexit Task Force, led by the chief negotiator Michel Barnier. So Leo Varakdar was well aware of its contents and importance when he spoke. The following day, Thursday 9 November, the paper was presented to officials of the 27 member states who were gathering in a regular Brexit Working Group formation in Brussels. The paper was then leaked to RTÉ News, as well as the Daily Telegraph and the Financial Times. It said that the only way to avoid a hard border in Ireland was, essentially, for Northern Ireland to remain inside, or as close as possible to, the customs union and single market. Such a scenario would require checks at Belfast and Larne ports and at Northern airports. The border would move off the island and into the Irish Sea. This was dynamite. It prompted an immediate denunciation from the DUP and the British government. Tougher language, in contrast to the Taoiseach’s sunny outlook in the Dáil, accompanied the paper. At the Fine Gael national conference in Cavan, Coveney warned that Ireland "will not be ignored" in the Brexit negotiations.The Task Force paper raised eyebrows in Brussels as well. Within the European Council, the body representing heads of government, officials handling the Irish issue were also taken aback. "There was an understanding that this was an internal document," says a well-placed EU source. "But it was mainly for outside consumption. It was a document that was designed to be leaked.
EU chiefs push Theresa May to say clearly how much UK will pay in ‘divorce bill’ - Theresa May has been urged by European Union leaders to spell out how much the UK will pay Brussels in a so-called divorce bill in order to secure progress on trade talks. The Prime Minister repeated her promise that the UK will "honour our commitments" to the European Union as it leaves the bloc but came under pressure to go further. Mrs May wants EU leaders to agree to move on to the second phase of Brexit talks covering the future trade relationship and a possible transitional period at a summit in Brussels next month. She used a gathering of EU counterparts in Gothenburg to push her case - but was told "clarity" was needed on the divorce settlement and there was no guarantee of a breakthrough in December. On the margins of a summit in the Swedish city, Mrs May met European Council chief Donald Tusk, French president Emmanuel Macron, Italian premier Paolo Gentiloni and Irish prime minister Leo Varadkar as she attempted to build support. On the eve of the summit she met Swedish counterpart Stefan Lofven, who said Mrs May needs to clarify what the financial settlement would cover, and it was "very difficult to say" whether trade talks would be given the go-ahead in December. She also had an impromptu meeting with Polish prime minister Beata Szydlo in a Gothenburg restaurant on Thursday night. European Commission president Jean-Claude Juncker said "the clock is ticking" and "work has still to be done" before the December 14-15 summit. Ireland and the UK clashed over the Northern Irish border, one of the three areas on which "sufficient progress" needs to be made before trade talks can be given the green light. The other issues on which progress will be judged are the rights of EU citizens in the UK and Britons on the continent and the so-called divorce bill.
‘Copy and paste’ approach to EU free trade agreements cannot work, experts warn - Telegraph - A “copy and paste” approach to turning EU trade deals in UK ones post-Brexit may be more complex than first hoped. The rolling over or so-called “grandfathering” the 67 free trade agreements (FTAs) which exist between the EU and other countries, in order to form UK only bilateral arrangements might not a offer a quick fix to avoiding renegotiation, legal experts have warned.Philippe De Baere, of international law firm Van Bael & Bellis, said such an approach misunderstood the complications involved with some trade deals.Existing deals would need to remain as trilateral arrangements in many cases, Mr De Baere told The Telegraph, if the UK wanted to be able to add value to imported goods and sell them into the EU, he said.Simply grandfathering the deal would be like “having access to both sides of the pitch but not being able to play football” Mr De Baere explained, as the UK would not be...
Brexit: The crunch is coming for Theresa May - BBC News: Did you watch Theresa May try to make the best of her Swedish photo opportunities yesterday? Or listen to David Davis as he urged the EU side to blink first, rather than the UK side? They both know that time is short to guarantee the UK gets what it wants and pushes the EU to move to the next stage of vital Brexit talks at the next leaders' jamboree in December. What's been missing until now is a sense of when the UK will be able to resolve its own short-term position. Is the cabinet willing to sanction a political move to offer the promise (not the figure) of more money on the table to settle our EU accounts? And if ministers are willing to do so, what do they expect in return - and when? It's been all too obvious that the EU side has, for a long time, been clear that they'll only budge when the UK is ready to promise - even vaguely or implicitly - a lot more cash. The hold-up has in part been that the UK has been pushing to make sure that taxpayers at home don't shell out when they don't have to. And also because UK and EU officials have taken a very different approach to settling the bill. But it's also the case that cabinet ministers have not been ready to agree how they want to proceed, and without that political agreement, it's been hard for the negotiations about the money to progress.However, the crunch is coming fast. I'm told on Monday there will be a significant meeting of the small cabinet committee that decides the Brexit negotiating strategy. Several government sources say the meeting of the Brexit strategy group could change the course of our departure. The question to be answered on Monday could be profound. One source told me: "People have to decide if they really want to make progress and support this prime minister, or not." For some in government that tight group of cabinet ministers must on Monday take a decision as vital as that - do they want to do a deal with the EU, or not?
More Brexit Delusion: May’s “Exit Tab” Surprise, Davis’ City Scheme v. More Customs Alarms, Tech Brexodus - Yves Smith - As the critical December Brexit negotiation round gets closer, the UK side is under more and more pressure to reach closure on the three issues where the EU has said the UK needs to show sufficient progress before it will entertain discussions on “the future relationship,” most importantly, trade. And because Theresa May is in such a weak position, and the Tories are engaged in bitter infighting, far too much of what passes for the UK’s negotiating strategy is the result of who seems to have the upper hand today, as opposed to any coherent plan. In the meantime, there is more and more evidence that the UK cannot begin to cope with a hard Brexit, let along a disorderly Brexit. For now, we’ll skip over one of the three issue, the Irish border, where neither Ireland nor the EU buy the UK’s fudge of a magical technology fix. The short update is Ireland leaked a document to force the UK’s hand, showing that Ireland and the EU were working on an “all Ireland” strategy, which would put Northern Ireland in the single market to prevent a hard border in Ireland. Earth to UK: if you don’t propose workable solutions, you give the other side the power to devise them for you. The UK side was predictably irate, since among other problems, an “all Ireland” approach would be anathema to the Tories’ coalition partner, the DUP. But the EU kept twitting the UK about it. From Politico daily Europe newsletter: Around 300 people watched the livestream as the EU’s Brexit negotiator Michel Barnier engaged in some plain talking at the Center for European Reform Monday. Every carrot had a string attached, and the sticks were many. Full speech here…What he said: There are currently about 100 examples of shared all-Ireland economic regulations, such as the “all-Ireland electricity market.” What he meant: We can read English too. We have 100 reasons to believe an all-Ireland economic system is possible. The matter that has the Government’s manhood at stake, however, is the so-called Brexit bill. The UK keeps trying to deny the EU’s position, which is that there are certain obligations that the UK has incurred that need to be settled, and that means cash settled, although clearly Brexit payments could be spread out over time and some could even be made contingent on future events. By contrast, British officials seem to believe their own PR, that the Brexit tab is raw extortion by the EU and thus any monies paid are too much. In keeping, the UK also sees the Brexit settlement as strictly haggling over a total amount, while the EU had envisioned the talks as working through the various obligations the UK has to the EU and coming up with ways to cost them out.
Brexit backlash as May's war cabinet 'agrees £40bn offer' | Daily Mail Online: David Davis today made clear Britain will not pay the EU a £40billion divorce bill unless there is a trade deal - amid an angry backlash at ministers agreeing to double the offer. The Brexit Secretary insisted that 'nothing is agreed until everything is agreed' as he said a financial settlement cannot be reached until future trade terms are clear.The comments lay bare the heart of the standoff between the UK and Brussels - as the EU's chief negotiator Michel Barnier has explicitly stated there can be no link between the divorce payment and trade.Mr Davis was giving a speech in London after Theresa May's Brexit 'war cabinet' agreed to offer billions more in divorce payments to the EU.Brussels sources had indicated they would not consider opening talks unless the UK hands over about £40billion – double the amount previously suggested by the Prime Minister.The pl an for an increased offer came after ten key ministers met amid tight secrecy in Downing Street, ahead of a crunch summit next month. But it has already prompted a major Tory revolt. Addressing an event organised by a think-tank this morning, Mr Davis said it was 'becoming clearer with every negotiating round' that the EU's insistence on resolving the divorce bill, Irish border and citizens' rights issues before starting on trade talks was not sustainable. The EU must now move on to discuss trade because it was an integral part of those areas, he said. 'The final resolution of the financial settlement depends on it, because nothing is agreed until everything is agreed,' Mr Davis added. Mr Davis said his desire was for there to be a deal with the EU, but said t he government would be planning for all eventualities.
The collapse of coalition talks in Germany makes a ‘no deal’ Brexit a little more likely - The Cabinet is expected to resume talks about Brexit today, reportedly nudging towards a £40 billion offer ahead of a meeting on Friday – but is there much point? Germany still has no government with Angela Merkel’s coalition talks having collapsed. The chairman of the Free Democratic Party ended talks with Merkel last night and her old coalition partners, the Social Democrats, refuse to enter a deal as this would confer opposition status on the populist AfD and thereby augmenting the progress they made in the recent federal elections. All of a sudden, Merkel’s fourth term has been thrown into question, and there’s talk of her doing a Theresa May and holding a snap election. ‘It is a day of deep reflection on how to go forward in Germany’, Merkel said. ‘As chancellor, I will do everything to ensure that this country is well managed in the difficult weeks to come’. But who will make sure the EU is well managed? It has long relied upon German direction, and if that’s not forthcoming then progress on a Brexit deal is even less likely. It’s worth remembering that the EU, as an institution, has always struggled with trade talks, having failed to cut a deal with almost any of its major trade partners. The problem is structural: it’s hard for anyone to negotiate with 27 member states, especially as you need unanimity and not all of them will be in a fit state, politically, to offer unanimity. For some time, British Brexiteers have been arguing that German industrial interests will assert themselves in the end, that the German carmakers will not tolerate tariffs on sales to the UK so Germany will force through a frer trade Brexit deal. That’s always been a bit ambitious, and looks even more so this morning.
Belief that customs system will be ready for Brexit ‘borders on insanity’ - One of the world’s biggest logistics companies, whose clients include Rolls-Royce, Airbus and Primark, has said it is “bordering on insanity” to think new Brexit customs systems will be in place for 2019. Leigh Pomlett, the executive director of CEVA Group, which specialises in road, air and ocean-going freight, said Downing Street and the Treasury did not understand how difficult it would be to have a system in place in 15 months’ time, when the UK leaves the EU. “It is just the urgency of this that worries me. It takes me longer to negotiate a supply chain contract than we have here. Arguably, it is already too late,” he said. CEVA employs 6,000 people in the UK and counts supermarkets, car manufacturers, food producers and pharmaceutical companies including GlaxoSmithKline among its clients. Pomlett told the Freight Transport Association conference in Dublin on Monday that delays in Dover would lead to a “calamitous situation”. It is calculated that an increase of just two minutes in the average time it takes trucks to clear customs could cause 17-mile tailbacks in the port town. He said 70% of EU trade entered Britain “on a lorry” and urged businesses to be more vocal about the potential disruption in order to force the government into action. Meanwhile, a body set up by the Good Friday agreement to promote cross-border trade in Ireland warned that some companies in Northern Ireland could be wiped out simply by the sheer number of rules of origin certificates required for each export to the EU after Brexit. “They are £48 a pop. We worked out the bill for one company would add on £700,000 in costs a year, its entire profit,” Manufacturing Northern Ireland said this was only the tip of the iceberg. “Add staff time, copies, potential letter of credit – if banking arrangements aren’t agreed – and the cost increases tenfold,” it tweeted in response to Gough.
The Impact of Brexit on the Irish Energy System – Pragmatism vs. Principles - Brexit promises pain for Ireland that could be cut off from the EU internal market and be left exposed to market instability in the UK. Georg Zachmann assesses the scale of the possible damage for Ireland, and how the UK and EU might use the special energy relations on the Irish island to commit to a pragmatic solution. Ireland is the EU member state that will be most impacted by Brexit. A particular case in point is the energy sector. Currently the Irish electricity and gas markets’ only physical connections are with the UK. So, after Brexit, these Irish markets would not be connected with the EU anymore. This has material implications. Currently, Ireland imports about half of its gas consumption through the UK (the rest is produced domestically). While there is no reason to believe that these gas flows will be stopped after Brexit, there might be three possible adverse effects for Irish gas customers:
- The liquidity of the UK gas wholesale market (NBP) might suffer from falling under different regulations compared to its EU counterparts. This might translate into more volatile and somewhat higher prices. As Irish gas prices will remain tied to the UK gas market, this would also affect Irish consumers.
- The risks for Irish consumers would increase, as EU solidarity rules – which imply that the UK would have to prioritise Irish household gas consumption over UK industrial consumption in a supply crisis situation – would cease to apply (but the 1993 protocol between the network operators on dealing with gas emergencies on either island would remain untouched by Brexit).
- The likely most important implication of Brexit is that Ireland will be unable to continue to participate in the development of the common gas market once it is no longer connected to the EU. Being outside of this large, liquid and competitive market will not only imply higher and more volatile gas prices, but it will also affect the investment decisions of gas companies in Ireland (as access to the large EU market is an anchor of regulatory stability).
Donald Tusk issues ultimatum to Theresa May over Brexit trade talks - Theresa May has until the start of December to move Brexit talks on to trade, the president of the European Council said as EU leaders denounced the British position. Speaking after talks with Mrs May in Sweden, Donald Tusk issued a final ultimatum to the prime minister, saying the EU was ready to green light trade and transition talks ahead of the European Council summit in mid-December, but “much more progress” was needed from the UK on the Irish border and the so-called divorce bill first. “We will be ready to move on to the second phase already in December, but in order to do that we need to see more progress from the UK side,” Mr Tusk said. “While good progress on citizens’ rights is being made, we need to see much more progress on Ireland and on the financial settlement.” He added that he had told Mrs May “this progress needs to happen at the beginning of December at the latest”. Mr Tusk warned: “If there is not sufficient progress by then, I will not be in a position to propose new guidelines on transition and the future relationship at the December European Council.” He said he and Mrs May had agreed to meet again next Friday “to assess the situation in more detail”. Downing Street sources insisted that the meeting had already been planned as part of the Eastern Partnership summit in Brussels. However, Mrs May offered a more upbeat assessment. She said: “We are agreed that good progress has been made but there is more to be done, that we should move forwards together towards that point where sufficient progress can be declared and we can look ahead to what I have already said I want to see as a deep and comprehensive and special partnership between the UK and the remaining 27 members of the EU.” Despite Mr Tusk’s forthright comments, the December deadline gives the government an extra week to strike an agreement with the EU. Last week in Brussels, Michel Barnier, the EU’s chief negotiator, told David Davis that Britain had two weeks to demonstrate progress. The Irish prime minister also warned that he could veto Brexit talks over the prospect of a hard border with Ireland. Leo Varadkar, who had breakfast with Mrs May at Friday’s summit, told Sky News: “Before we move to phase two talks on trade, we want taken off the table any suggestion that there will be a physical border, a hard border, new barriers to trade on the island of Ireland.
Today the UK died a little - On November 19th 2017 four things happened which left the UK a significantly diminished country on the global stage, and worse off as a result. The EU announced that The European Medicines Agency will move to Amsterdam, and the European Banking Authority will move to Paris. Both are located in London’s Canary Wharf, where they employ 900 and 170 people respectively. They are moving before Brexit, and directly because of Brexit. On the same day, the UK conceded defeat in elections to appoint a judge to the UN International Court of Justice. A British judge has sat on the bench of this court since it was founded in 1946, but this time in the vote the UK came last, in a draw with India, and apparently to avoid the humiliation of losing, withdrew their candidate. This is being widely seen as a reflection of the UK’s diminished international role. All of this matters because the UK has, in one day, lost its position in European medicine, European banking, and international law. This is a blow for the country’s reputation, and for its ability to influence and be part of global activities in the future. At a practical level, London is set to lose 1050 jobs from the two agencies, and many of the 1050 people who currently fill those jobs who will follow them out. These are highly educated people, who one assumes have equally educated spouses, and children. So around 2000 educated people, actively involved in international banking and medicine will leave London. Along with them, the UK loses their taxes, their spending, and the jobs for people they themselves employ, and the 36,000 scientists and regulators who visit each year. On top of that, London is losing qualified professionals, scientists, and all the related knowledge, learning, science, and shared intellectual benefits around them. Finally, the Government appears to have agreed to offer the EU a higher sum of money as its settlement for leaving the EU. This was a major sticking point in the negotiations, and however it is spun, such an offer is a capitulation by the British Government in order to move the rest of the Brexit negotiations somewhere more in their favour. Depending whose words you believe, whether it is the likes of Boris Johnson, who said the EU could ‘go whistle’ for their money, through to more rational politicians who conceded we’d have to pay something, having to raise their initial offer at the behest of the EU means the British government are failing in their negotiations.
“We are just 500 days from chaos”, warns immigration charity - Fewer than 500 days are left until the UK is due to leave the European Union. Yet the most significant obstacles to the ‘smooth, orderly Brexit’ promised by Theresa May have not been created by Brussels. They lie in wait in Croydon, Sheffield and the half a dozen other sites where the Home Office is shamefully unprepared for the most significant challenges our immigration system has faced in four decades. The Home Affairs Select Committee today grills Immigration Minister Brandon Lewis on his department’s ability to deal with these challenges. Three million EEA nationals and their families currently residing in Britain will have to be processed and regularised. And 450 million Europeans will become subject to broken and cruel systems hitherto reserved for the ‘rest of the world’. Officials have conceded that the department is struggling to increase its capacity. Ironically, the Home Office may have to recruit new staff from the EU to handle the strains of leaving the EU. The Home Office already faces accusations of incompetence as it fails to respond to a growing backlog, with procedural errors and poor decision-making leaving workers and families waiting up to two years for a decision. At current staffing levels, each caseworker will process an additional 1500 European applications. Yet even a doubling of capacity will not change the fact that the system itself does not work. Without a significant shift in the way Britain deals with both the idea and the reality of people on the move, we are just 500 days from chaos.
Philip Hammond to set aside £3B more for Brexit preparations — U.K. Chancellor Philip Hammond announced a major spending boost to stimulate the British economy over the next two years as growth forecasts were revised downwards in his budget statement Wednesday.Addressing MPs in the House of Commons, the chancellor announced a raft of new spending measures, including billions more for housing, health and welfare, while also setting aside an extra £3 billion to prepare for “every possible outcome” in the Brexit negotiations. That is on top of £700 million already promised for preparations ahead of Britain’s departure from the bloc in March 2019. The extra spending pledges — totalling some £25 billion — came despite a deteriorating outlook over the next five years, with the independent Office for Budget Responsibility (OBR) revising growth down every year until 2021 and forecasting GDP growth will not top 2 percent as productivity, high inflation and Brexit weigh on output. The economy is now forecast to be £65 billion smaller in 2020 than had been forecast in the March 2016 budget.Faced with a slowing economy, continuing Brexit uncertainty and growing political pressure, Hammond chose to loosen the government’s purse strings.He announced an extra £2.8 billion for the health service over three years, more than £1 billion to ease problems in the welfare system and £500 million to scrap housing taxes for first-time buyers. A major capital investment in housing and the NHS was also announced.The extra spending is mostly front-loaded to act as a stimulus for the economy in what the OBR described as a “significant near-term fiscal giveaway” adding almost £12 billion to borrowing by 2019/20. The big picture is of a dramatically deteriorating medium-term outlook. While falling short of predicting a recession, the OBR forecasts growth falling in 2017 to 1.5 percent, cut from 2 percent as predicted in their previous forecast, in March. The OBR now forecasts GDP growth will be 1.4 percent in 2018 and 1.3 percent in 2019, before picking up to 1.5 percent in 2021.
Brussels takes aim at Britain’s budget rebate in Brexit talks - Michel Barnier has set his sights on the most cherished aspect of the U.K.’s financial relationship with the EU — its annual budget rebate negotiated by former Prime Minister Margaret Thatcher.In his public statements, Barnier repeatedly and pointedly pegs the U.K.’s financial obligations at 14 percent of the bloc’s budget. That reflects Britain’s share before its rebate is applied, and is well above the 12.5 to 13 percent share that the U.K. actually pays into the EU’s coffers.If the EU’s chief negotiator gets his way, then it could mean Britain having to fork out at least €10 billion more to secure a Brexit transition deal. But any hint that the U.K. will have to pay more to Brussels than under the historic rebate scheme is certain to further antagonize Brexiteers who attach a near-religious significance to the financial arrangement.They are likely to see it not only as an EU demand for yet more money — a key motivator for Brexit voters in the referendum — but also a revenge assault on Thatcher’s “I want my money back” victory. After months of slow-moving negotiations, Brexit negotiators are finally now wrestling directly with the nitty-gritty details of how to settle the money issue in the divorce talks. And with the EU demanding a formula, not a total price-tag, the key to a deal is agreeing on the U.K.’s share of EU budget costs — past and future. While Brussels has signalled its willingness to apply the lower, historical percentage to the U.K.’s prior obligations, the possibility that the EU would demand to end the rebate, as part of the price of a transition, is likely to enrage Brexiteers, some of whom have urged the U.K. to pay nothing and walk away without a divorce settlement.The issue is so charged — with real potential to blow up the talks — that officials on both sides generally refuse to discuss it away from the bargaining table. “No magic formula or existing common position on these questions,” one senior EU official involved in the Brexit process said. “A matter for the negotiations.” But Barnier, who is extremely careful about his public comments, has effectively been negotiating in plain sight for months, repeatedly citing the 14 percent figure in speeches, in interviews, and in his responses during question-and-answer sessions. Officials close to Barnier said the point was intentional.
The Fantasyland version of Britain is alive and kicking – and driving Brexit -- British democracy used to be presented as the envy of the world. We had the Whig version of history, the rule of law – and, above all, a sense of continuity which supposedly differentiated the UK from its European neighbours.Such a view permeated British elites, institutions and public life - but also informed many left-wing radicals and dissenters. American writer Edward Shils, visiting the UK in 1953, was stunned to hear ‘an eminent man of the left, say, in utter seriousness … that the British constitution was “as nearly perfect as any human institution could be.”’ And Shils was even more surprised to find that ‘No one even thought it amusing.’Sixty years on, after so much change, surely few if any sensible people hold such self-congratulatory views? Yet these misplaced assumptions persist at the heart of the British political establishment – though they are usually a little more circumspect about saying it. A recent exception was Tory MP Charles Walker, Chair of the Commons Procedure Committee, reacting to criticism of Britain’s democratic arrangements from the Women’s Equality Party leader Sophie Walker on the BBC’s ‘Daily Politics.’ Walker raged ‘I always come on this programme and you have people who completely trash Parliament and our democracy’. He then launched into a glowing tribute of all things British constitutional. “We have an outstanding Parliament, an outstanding democracy, high levels of accountability. Politicians travel from across the world to come to our House of Commons to understand how we do Parliament. They are amazed … that when a constituent writes to me I can pass that letter on to a Secretary of State and get a response.” (BBC Daily Politics, October 17th 2017) Others still defend the royal puff and pageantry as aiding the national spirit. On the birth of another royal baby a few years ago, Kirstie Allsopp asked: ‘What is wrong with Britain being a Disneyland?’ The obvious answer being that the UK isn’t a fantasy playground, and the Royal Family infantilises all of us.
Where Brexit Hurts: The Nurses and Doctors Leaving London - Tanja Pardela is leaving London. Her last day is Nov. 26. She wells up talking about it. She will miss jacket potatoes, and Sunday roasts, and her morning commute — past playing fields, small children in school uniforms and a red telephone box — to the hospital where she has been a pediatric nurse for 11 years.Ms. Pardela does not want to leave the country she came to over a decade ago. But that country no longer exists. On June 24 last year, she said, “We all woke up in a different country.” Seventeen months after Britain voted to leave the European Union, many Europeans are voting to leave Britain — with their feet. Some 122,000 of them packed their bags in the year through March, according to the latest figures available, while the stream of new arrivals has slowed. In London, a city long sustained by European bankers, builders and baristas — “a place that makes you dream,” Ms. Pardela said — the departures are beginning to hurt. Construction companies and coffee shops are struggling to recruit. Top universities worry about retaining talent. And nowhere are the concerns more elemental than in Britain’s treasured and already overstretched National Health Service. Long before Brexit, the N.H.S. suffered from chronic staffing shortages, and today the country has 40,000 nursing vacancies. But recruiting nurses from the European Union had helped plug the gap — especially in London, where the share of nurses from the Continent is about 14 percent, or twice the national average. King’s College Hospital, the massive institution where Ms. Pardela works, is short of 528 nurses and midwives, and 318 doctors. Brexit seems certain to make it harder and costlier to recruit from the Continent, assuming that people will still want to come from there. Even the legal status of European Union citizens already living in Britain remains unclear, entangled in the stalled Brexit talks between Brussels and London. Many fear they could lose rights, job security, pensions and access to free health care.
Corbyn has seen the light on Brexit. Now he’s taking the fight to the Tories - Brexit is the great national crisis of our times and yet the leaders of the opposition have sometimes seemed so muted it has driven remainers to tear their hair out in frustration. That changed yesterday at prime minister’s questions. Jeremy Corbyn for the first time turned all guns on the prime minister over her incoherent, incomprehensible and impossible Brexit stance. He used all his questions, every one, to wallop her exactly where she and her party are most vulnerable – and not before time.If ever there were an open goal, it is the warring party of government whose demented 40-year obsession with the EU is finally driving us all to destruction. On budget day, PMQs may get less attention than usual, but the signs are that Corbyn’s blistering salvos are just the opening shots in what should be a weekly cannonade.Here’s his best tirade: “Seventeen months after the referendum they say there can be no hard border but haven’t worked out how. They say they’ll protect workers rights, then vote against it. They say they’ll protect environmental rights, then vote against it. They promise action on tax avoidance but vote against it time and time again.” The prime minister’s lame response was: “Let me tell him, I am optimistic about our future. I’m optimistic about the success we can make of Brexit … blah, blah, blah … building a Britain fit for the future …” Naturally, anyone who questions her nonexistent post-Brexit plans or visions is a traitor, “talking down Britain”.Half an hour later as the chancellor rose, there was no way he could avoid talking down Britain, no sugar to coat the pill as he read out dire budget figures showing growth and productivity falling further behind the Europe many Tories so despise. And Brexit is the reason.As the true meaning of the forecast sinks in, everyone sees the longest fall in living standards for 50 years, lasting until the middle of the next decade. And even then, who knows?Where has Corbyn been? On a journey, say those close by. A lifetime of instinctive “capitalist club” Euroscepticism has been shed. Passionate distress over Brexit from his young supporters and his trade union allies has brought him round. Besides, the facts have changed. His vague, abstract distaste for the EU has given way to facing the hard reality of what Brexit means: inflicting most harm on those he cares about most. If only those on the opposite benches were on the same reality-check journey.
The real price of Brexit is hidden in the Budget small print -- There is a dark cloud casting a long shadow across the Chancellor’s Budget numbers. The spectre of Brexit is looming large now on the prospects for the economy and public finances. Businesses are holding back on investment because of the uncertainty about trade and tariffs, which in turn is holding productivity down. If we cannot generate more output per hour worked, living standards will stagnate. As a consequence, the Office for Budget Responsibility downgrade for future growth prospects means the days of 2 per cent growth rates may be a thing of the past. With growth and productivity so moribund, the impact on tax revenues for the exchequer has to be factored in. That’s why the Treasury’s own documents predict a depressing collapse in receipts: down £8bn in 2019, down £13bn in 2020 and down by an astronomical £20bn in 2021.If this is added to borrowing, taxpayers will fork out debt interest for many years. But more likely, if it results in fiscal tightening it will drag on the vital resources our public services need - our schools and NHS will pay the price. So when the government talks of a new £3bn committed for Brexit “preparations” (which could otherwise have been spent productively elsewhere), that is just a start. This £20bn hit to revenues by 2021 is the real statistic that should send shivers down the spines of those who care about levels of public investment. This comes, of course, on top of the “divorce bill” that the government has yet to negotiate. Interestingly, the OBR suggest it may be as much as £67bn - equivalent to two further years of budget deficit! Brexit austerity will shape the fortunes for our public services for the decade ahead. These Budget figures should be a wake up call for MPs in all parties. None of this is a fate set in stone - it can still be changed if MPs pull back from that Brexit cliff edge in 2019. Those who fail to fight for our single market and customs union membership could find they share the responsibility for the next wave of austerity likely to befall Britain in the post-Brexit era.
Irish government set to fall weeks before Brexit summit (Reuters) - Ireland’s minority government looked set to collapse within days on Friday after the party propping it up submitted a motion of no confidence in the deputy prime minister, weeks before a summit on Britain’s plans to leave the European Union. Prime Minister Leo Varadkar said that if the motion was not withdrawn by Tuesday, he would be forced to hold an election before Christmas, a prospect EU officials say would complicate a key EU summit on Dec. 14-15 on Brexit. “What that would mean is me throwing a good woman under the bus to save myself and my own government, and that would be the wrong thing to do,” Varadkar told national broadcaster RTE, dismissing demands for his deputy Frances Fitzgerald to quit. Varadkar is due to play a major role in the Brexit talks, telling EU leaders whether Ireland believes sufficient progress has been made on the future border between EU-member Ireland and Britain’s province of Northern Ireland. The border is one of three issues Brussels wants broadly resolved before it decides whether to move the talks on to a second phase about trade, as Britain wants. While Varadkar could go into the summit in a caretaker role, he said that any election would have to happen before Christmas so that he or his successor could attend the next meeting of EU leaders in February with a fresh mandate. The head of opposition party Fianna Fail, Micheal Martin, earlier said an election “can be avoided if the government takes action” by asking Fitzgerald to resign. Varadkar said he would not seek, nor did he expect to be offered, a resignation. Fianna Fail supports the minority Fine Gael government in a “confidence and supply” arrangement. Voting no confidence in a minister would break that agreement.
Irish Government On Verge Of Collapse, Could Impact Brexit -- The Irish government was on the verge of collapse as it faced a vote of no confidence in the deputy prime minister by a party whose votes are critical for Prime Minister Leo Varadkar to pass laws (the government is a minority administration). As Reuters reported late on Thursday, the opposition Fianna Fail party threatened it would put a motion of no confidence in Deputy Prime Minister Frances Fitzgerald on Tuesday - a move sparked by Fitzgerald’s handling of a legal case involving a police whistleblower - and which would breach the "confidence and supply" agreement that allowed Taoiseach Leo Varadkar’s Fine Gael party to form a minority government 18 months ago.And, as UBS notes, if the government were to lose such a vote, it would have implications within Europe over the Brexit process. Fianna Fail indicated it might withdraw the motion if Fitzgerald resigned, but Foreign Minister Simon Coveney told state broadcaster RTE that Fitzgerald would not resign.As Politico adds, Fine Gael MPs passed a unanimous motion of support in Fitzgerald at an emergency meeting convened Thursday evening. An unnamed “senior Fianna Fáil” source told Reuters the country was heading “straight toward” a new election after the motion was passed, and added the party would hold a meeting Friday on the matter.The crisis comes at an awkward time for the UK's Brexit process, just weeks ahead of a European Union summit in which the Irish government has an effective veto on whether Britain’s talks on leaving the bloc progress as it determines if EU concerns about the future of the I rish border have been met.
In Britain, billionaires can buy the silence of the judiciary - You might think that, if a tech billionaire linked to Uber, Elon Musk, and Richard Branson was arrested in the investigation of an alleged rape in London, it would be a matter of public interest. It would also arguably be a matter of public interest — and an important issue for the reputation of the innocent man — to know that the police had then "de-arrested" him and, after an investigation, decided not to bring charges. Especially as the man had tweeted a letter from the police showing that he had been quickly cleared, with no charges brought. But not over the last few weeks, according to one London judge. This judge granted an injunction for the billionaire banning the British press from naming him. The injunction led to a ridiculous situation in which American news organisations were able to freely report that the man had been accused of rape by a woman at The Ned hotel in London but no one in Britain was allowed to report the identical information, even though anyone in Britain who did some web searching could see those reports if they wished. Also, many in the London media knew the man's name, as word of his injunction spread. This censorship of the press is quite common in Britain. Because of the secrecy involved, it is difficult to say how common. But it occurs much more frequently than most people realise.
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